{"id": "R44729", "title": "Constitutional Authority Statements and the Powers of Congress: An Overview", "released_date": "2019-03-11T00:00:00", "summary": ["On January 5, 2011, the House of Representatives adopted an amendment to House Rule XII to require that Members state the constitutional basis for Congress's power to enact the proposed legislation when introducing a bill or joint resolution. (The amendment does not pertain to concurrent or simple resolutions). This Constitutional Authority Statement (CAS) rule, found at House Rule XII, clause 7(c), was subsequently adopted by every subsequent Congress.", "Understanding the CAS rule first requires an understanding of both the powers provided to the Congress under the Constitution and Congress's role in interpreting the founding document. Article I's Vesting Clause creates a Congress of specified or \"enumerated\" powers, and every law Congress enacts must be based on one or more of its powers enumerated in the Constitution. The Constitution creates two central types of limitations on Congress's powers: (1) internal limits and (2) external limits. Internal limits are the restrictions inherent in the constitutional grants of power themselves, such as the limits on the scope of Congress's powers under the Commerce Clause. External limits, on the other hand, are the constraints contained in affirmative prohibitions found elsewhere in the text or structure of the document, such as the First Amendment's prohibition on Congress abridging the freedom of speech. While the Court's 1803 decision in Marbury v. Madison firmly cemented the judicial branch's role in interpreting the Constitution by recognizing the power of the Court to strike down legislation as unconstitutional, the early history of the nation is replete with examples of all three government branches playing a substantial role in constitutional interpretation. By the mid-20th century, however, the Supreme Court began articulating a theory of judicial supremacy that became widely accepted, wherein the federal judiciary is the final and exclusive arbiter of the Constitution's meaning. Nonetheless, in recent decades, a number of legal scholars and government officials have criticized this theory, instead promoting the view that the political branches of government possess the independent and coordinate authority to interpret the Constitution. In support of this view, some point to (1) the Constitution itself requiring all Members of Congress to be bound by an oath to support the Constitution; (2) the presumption of constitutionality that courts afford legislation enacted by Congress; and (3) the wide range of questions the Constitution requires Congress to resolve.", "A CAS is fundamentally a congressional interpretation of the Constitution, in that House Rule XII requires each Member introducing a piece of legislation to attach a statement that cites the power(s) that allows Congress to enact the legislation. The submitted CAS appears in the Congressional Record and is published on Congress.gov. The House Rules Committee has indicated that Members have significant discretion in determining whether particular CASs comply with the rule. The CAS rule is enforced only insofar as \"the House clerk ... acts to verify that each bill has a justification\" and \"not [in judging] the adequacy of the justification itself.\" The most common means of complying with the rule is to cite to a specific clause in Article I, Section 8, such as the Taxing and Spending Clause. The CAS rule has itself been subject to much debate, with proponents arguing that the rule promotes constitutional dialogue in the House, while critics contend that the rule provides minimal benefits and is administratively costly."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["On January 5, 2011, the House of Representatives adopted an amendment to House Rule XII to require that Members of the House state the constitutional basis for Congress's power to enact the proposed legislation when introducing a bill or joint resolution. (The amendment does not pertain to concurrent or simple resolutions.) The Constitutional Authority Statement (CAS) rule, found at House Rule XII, clause 7(c), was subsequently adopted in the 113th, 114th, 115th, and 116th Congresses. As the CAS rule begins its ninth year, the requirement continues to be a topic of congressional debate and inquiry, as Members of the House contemplate how to comply with the rule prior to every submission of a bill or joint resolution. ", "This report aims to aid in understanding the CAS requirement. It begins by providing a broad overview of (1) Congress's powers under the Constitution and (2) Congress's role in interpreting this document. The report then specifically addresses House Rule XII, clause 7(c), discussing its key requirements and limits, the legal effect of a CAS, and the debate over the rule's value. The report concludes by discussing trends with regard to the House's recent CAS practices and by providing considerations for congressional personnel drafting CASs. The report contains two tables: Table 1 identifies the constitutional provisions most commonly cited in CASs during the last six months of the 114 th and 115 th Congresses, and Table 2 lists suggested constitutional authorities for various types of legislation."], "subsections": []}, {"section_title": "Scope of Congress's Powers Under the Constitution", "paragraphs": ["Understanding the purpose and logic of the CAS rule first requires an understanding of both the powers provided to the Congress under the Constitution and Congress's role in interpreting the Constitution. The Framers of the Constitution feared tyranny as the result of the \"accumulation of all powers\" of government \"in the same hands\" and, thus, \"sought to guard against it by dispersing federal power to three interdependent branches of Government.\" Reflecting this fear, the federal Constitution divides the government's power among the legislative, executive, and judicial branches, with the Congress exercising the legislative power, the President exercising the executive power, and the federal courts exercising the judicial power. \"It is a breach of the National fundamental law\" if Congress \"gives up its legislative power\" to one of the other branches or if Congress \"attempts to invest itself or its members with either executive power or judicial power.\" ", "While only Congress may exercise the legislative power, this power, like those belonging to the other branches of the federal government, is cabined by the terms of the Constitution. Article I, Section 1, of the Constitution vests \"all legislative Powers herein granted ... in a Congress of the United States,\" with the phrase \"herein granted\" indicating that the Congress's authority to legislate is \"confined to those powers expressly identified in the document.\" As a result, the Supreme Court has interpreted Article I's Vesting Clause as creating a Congress of specified or \"enumerated powers.\" As the Court noted in United States v. Morrison , \"[e]very law enacted by Congress must be based on one or more of its powers enumerated in the Constitution.\""], "subsections": [{"section_title": "Congress's Powers", "paragraphs": ["Congress's specified powers are primarily, but not exclusively, found in Section 8 of Article I of the Constitution. This section contains 18 clauses, 17 of which enumerate relatively specific powers granted to the Congress. Among the powers enumerated are Congress's powers to ", "impose taxes, and spend the money collected to pay debts and provide for the \"common defence\" and \"general welfare,\" regulate commerce, establish laws respecting naturalization and bankruptcy, regulate currency, establish post offices and roads, promote the \"Progress of Science and useful Arts\" by giving authors and inventors \"exclusive rights\" to their writings and discoveries (i.e., copyright and patent protections), and establish a judicial system.", "In addition, six of the clauses in Article I, Section 8, defining the substantive legislative jurisdiction of Congress, deal exclusively with wartime and military matters and include Congress's power to declare war and provide for an Army and Navy. ", "Outside of Article I, Section 8, the Constitution contains several other provisions providing Congress with a specified power. For example, Article IV of the Constitution empowers Congress to enact laws regulating the validity of state \"public Acts, Records, and judicial Proceedings\" and rules respecting the territory and property belonging to the United States. And Article V authorizes Congress to propose amendments to the Constitution. Outside of the original constitutional text, many of the amendments to the Constitution explicitly restrict the power of Congress. Several of the Constitution's amendments, however, provide Congress with the power to enact certain legislation. For instance, the Thirteenth, Fourteenth, and Fifteenth Amendments, adopted following the Civil War, empower Congress to \"enforce\" the amendments' provisions prohibiting slavery, preventing the deprivations of certain civil rights, and outlawing the denial or abridgement of the right to vote on account of \"race, color, or previous condition of servitude.\"", "The final clause of Article I, Section 8, the Necessary and Proper Clause, supplements Congress's enumerated powers, providing the legislative branch the power to adopt measures that assist in the achievement of ends contemplated by other provisions in the Constitution. Specifically, that clause provides Congress with the power to make \"all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.\" The Supreme Court has interpreted the scope of Congress's power under the Necessary and Proper Clause as \"broad,\" in that the clause leaves to \"Congress a large discretion as to the means that may be employed in executing a given power.\" In so holding, the Court has described the clause as providing the \"broad power to enact laws that are 'convenient, or useful' or 'conducive' to\" a more specific authority's \"beneficial exercise.\" Consistent with this view, the Court has upheld legislation criminalizing perjury and witness tampering as an extension of Congress's power to constitute federal tribunals. Similarly, the Court upheld legislation prohibiting the bribery of officials who receive federal funds, as an extension of Congress's power to \"appropriate federal moneys to promote the general welfare.\" More broadly, the Court has taken the view that other powers, such as the power to conduct oversight, are implied from the general vesting of legislative powers in Congress.", "Importantly, however, the Necessary and Proper Clause is not an independent source of power for Congress that, standing in isolation, permits it to exercise the legislative power. As the Supreme Court has noted, the clause is \"not itself a grant of power, but a caveat that the Congress possesses all the means necessary to carry out the specifically granted 'foregoing' powers of \u00a7 8 'and all other Powers vested by this Constitution....'\" Instead, in legislating, Congress \"must rely upon its independent (though quite robust) Article I, \u00a7 8, powers\" or in other powers implicitly or explicitly vested elsewhere in the Constitution to Congress. Importantly as well, the Necessary and Proper Clause authorizes Congress to not only take action to assist in the execution of its own powers under the Constitution, but also to provide support for the execution of \"all other Powers vested by this Constitution in the Government of the United States.\" Pursuant to this authority, Congress may permissibly enact legislation to assure the proper exercise of powers given to other branches of the federal government."], "subsections": []}, {"section_title": "Limits on Congress's Powers", "paragraphs": ["The Constitution imposes two central types of limitations on the powers of Congress. First, the concept of enumerated powers creates what is often referred to as an \"internal limit\" on Congress's powers\u2014that is, Congress's powers are restricted by and to the terms of their express grant. For instance, in United States v. Lopez , the Supreme Court interpreted the Commerce Clause as empowering Congress to regulate \"three broad categories of activities\": (1) \"channels of interstate commerce,\" like roads and canals; (2) \"persons or things in interstate commerce,\" and (3) activities that substantially affect interstate commerce. Having determined those limits to the clause, the Court held that Congress's power over commerce does not permit it to enact legislation prohibiting the possession of guns near a school (absent a connection to commercial activity) because such legislation does not regulate an economic activity that substantially affects interstate commerce. Likewise, the Court has interpreted the Fourteenth Amendment's Enforcement Clause as necessarily requiring a \"congruence and proportionality\" between the injury to be prevented or remedied by congressional legislation and the means that Congress adopted to that end. Applying this standard in City of Boerne v. Flores , the Court held that Congress exceeded the scope of its enforcement power under the Fourteenth Amendment by enacting the Religious Freedom Restoration Act (RFRA) insofar as that law unduly invaded the sovereign rights of the states. Adopted to protect the constitutional right to the free exercise of religion, RFRA, in relevant part, invalidated any state law that imposed a \"substantial burden\" on a religious practice without sufficient justification and narrow tailoring. Describing RFRA's operative standard as imposing a \"stringent test\" that amounted to a \"considerable intrusion into the States' traditional prerogatives and general authority to regulate for the health and welfare of their citizens,\" the Court concluded that there was \"a lack of proportionality or congruence between the means adopted and the legitimate end to be achieved\" by RFRA.", "Second, beyond the internal limits on Congress's powers, the Constitution also imposes \"external\" constraints on congressional action, or affirmative prohibitions found elsewhere in the text or structure of the document. Article I, Section 9, lists specific constraints on the power of the federal government. Section 9 prohibits Congress from suspending the writ of habeas corpus in peacetime; passing bills of attainder or ex post facto laws; imposing taxes or duties on exports \"from any state\"; and granting titles of nobility. Section 9 also provides that Congress can suspend the writ of habeas corpus only in \"cases of rebellion or invasion\" when \"public safety may require\" such a suspension. Similarly, money can be drawn from the Treasury only upon an appropriation made by law.", "More broadly, Congress's powers are constrained by three principles undergirding the Constitution: federalism, separation of powers, and individual rights. Federalism constraints are grounded in states' status as separate and distinct sovereign entities and seek to preserve states' retained prerogatives under the U.S. constitutional system by enforcing certain limits on the federal government's jurisdiction. For instance, the Supreme Court has identified federalism-based constraints stemming from the Tenth Amendment\u2014the provision of the Bill of Rights that reads, \"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.\" More specifically, the Court has interpreted the Tenth Amendment to prevent the federal government from \"commandeering\" or requiring state executive officers or state legislators to carry out federal directives. Similarly, the Court has held that Congress cannot indirectly commandeer state governments by imposing limits on monetary grants that go so far as to functionally coerce states, leaving them with no choice but to comply with a federal directive.", "Second, separation of powers constraints are concerned with the proper allocation of authority among the three branches within the federal government. The Constitution assigns each branch of government distinct, but interrelated, roles, and one branch may not aggrandize its power by attempting to exercise powers assigned to another branch. For example, the Appointments Clause of the Constitution gives the President the authority to appoint principal officers of the United States with the Senate's advice and consent. Thus, when Congress purported to reserve to itself the right to appoint certain members of the Federal Election Commission in 1971, the Supreme Court struck down that law as being in violation of the Appointments Clause.", "Finally, constraints based on individual rights serve to prohibit congressional interference with the rights that individuals retain under the Constitution and, in particular, under the first 10 amendments to the Constitution, the Bill of Rights. The First Amendment, for example, prohibits Congress from enacting a law that abridges the freedom of speech. The Supreme Court has interpreted the First Amendment to mean that speech restrictions promulgated as a result of the content of the speech are presumptively unconstitutional. In keeping with this presumption, in United States v. Alvarez , the Court struck down a law that made it a crime to falsely claim that one had received military medals or decorations on the grounds that the law risked \"significant First Amendment harm\" by broadly empowering prosecutions of speech based on its content, without any notable limitations. "], "subsections": []}]}, {"section_title": "Role of Congress in Interpreting the Constitution", "paragraphs": ["Given the powers of Congress and the limits on those powers under the Constitution, the question remains as to which branch of the federal government may interpret the scope of Congress's powers. The question is one that has been debated from the very beginnings of the country. In its 1803 decision in Marbury v. Madison, the Supreme Court held that the logic of having a written Constitution that enumerates the legal limits imposed on the federal government, coupled with the tenure protections provided to the federal judiciary under the Constitution, confirmed the Supreme Court's role in interpreting the Constitution and invalidating acts of other branches of government that contravene this document in the context of a live case or controversy. Pursuant to Marbury ' s famous command, it is \"the province and duty of the judicial department to say what the law is.\" ", "While Marbury firmly established that the judicial branch has a role in interpreting the Constitution, including the power to strike down laws held to be incompatible with the founding document, it did not, however, expressly state that the judiciary has a final or even exclusive role in defining the basic powers and limits of the federal government. To the contrary, the early history of the United States is replete with examples of all three branches of the federal government playing a role in constitutional interpretation, with Congress and the Executive openly questioning the Supreme Court's pronouncements on constitutional law, such as the Court's rulings on the National Bank or slavery. As these examples show, Marbury was not seen to interfere with the ability of either Congress or the President to interpret the Constitution. Rather, Marbury only asserted the judiciary's power to act as the ultimate expositor of the Constitution in the limited context of cases that were properly before the Court. Instead, Thomas Jefferson's view that \"each of the three departments has equally the right to decide for itself what is its duty under the Constitution, without any regard to what the others may have decided for themselves under a similar question,\" appears to have prevailed in Congress during the early days of the United States. This is evidenced by the fact that Members of Congress spent \"a considerable amount of time\" \"debating the constitutional limitations on\" legislation during the first 100 years of the nation.", "In the mid-20 th century, however, the Supreme Court began articulating a theory of judicial supremacy, wherein the Court no longer shared its role in interpreting the Constitution with the other branches of the federal government, but rather characterized its role as being the preeminent arbiter of the Constitution's meaning. For example, in Cooper v. Aaron, the Court read Marbury as \"declaring the basic principle that the federal judiciary is supreme in the exposition of the law of the Constitution, and [this] principle has ever since been respected by this Court and the Country as a permanent and indispensable feature of our constitutional system.\" In other words, the Cooper Court concluded that the \"interpretation[s] of the [Constitution] enunciated by this Court ... [are] the supreme law of the land,\" with constitutional interpretations by other actors, including Congress, necessarily lacking the same force. Supporters of the judicial supremacy view assert that it promotes stability and uniformity in constitutional interpretation, as well as preserves constitutional norms from majoritarian pressures. The Court's decision in Cooper , coupled with broader institutional factors that may further constrain Congress's ability to engage in constitutional interpretation, has provided support for the notion of judicial supremacy in constitutional interpretation within the coordinate branches of government. As a result, while Congress certainly continues to debate about the Constitution during the legislative process, in the modern era, the Court's views on the Constitution appear to have taken on an elevated role vis-\u00e1-vis those views of the other branches of government.", "The theory of judicial supremacy is far from a consensus view, however, and several aspects of the American constitutional system may counsel for a more robust role for Congress in constitutional interpretation. In recent decades, a number of legal scholars and government officials have criticized the judicial supremacy view, instead advancing the view that the Constitution should more regularly be the subject of interpretation by those outside of the judicial branch. This view posits that Congress and others outside of the government possess independent and coordinate authority to interpret the Constitution. Supporters of this view point to the fact that the Constitution requires all Members of Congress to \"be bound by Oath or Affirmation ... to support [the] Constitution ... ,\" a requirement that presumes Senators and Representatives must understand and interpret the Constitution in their work in Congress. Similarly, courts' practice of affording a presumption of constitutionality to laws passed by Congress necessarily assumes that Members of Congress engage in constitutional interpretation during the legislative process. In addition, if Congress opts not to engage in interpreting the Constitution, a vacuum could arise in constitutional dialogue because various judicially crafted doctrines generally serve to keep the courts from making pronouncements on a wide range of constitutional questions. Indeed, as Justice Kennedy observed in his concurring opinion in Trump v. Hawaii, because there are \"numerous instances in which the statements and actions of Government officials are not subject to judicial scrutiny or intervention,\" it is \"imperative\" for public officials to \"adhere to the Constitution and to its meaning and promise.\" These arguments can be seen as relevant to the current CAS requirement imposed under the House rules insofar as they suggest that Congress should have some role in interpreting the Constitution."], "subsections": []}, {"section_title": "House Rule XII, Clause 7(c), and Constitutional Authority Statements", "paragraphs": ["Originally adopted as an amendment to House Rule XII on January 5, 2011, the CAS rule prohibits Members from introducing a bill or joint resolution without a \"statement citing as specifically as practicable the power or powers granted to Congress in the Constitution to enact the bill or joint resolution.\" The current CAS rule functionally replaced a requirement that existed during the 105th through 111th Congresses, mandating that committee reports for bills reported out of committee \"include a statement citing the specific powers granted to the Congress in the Constitution to enact the law proposed by the bill or joint resolution.\" A CAS is not part of the text of the legislation; instead, it \"accompanie[s]\" the legislation. The CAS must be \"submitted at the time the bill or joint resolution\" is presented for introduction and referral, that is, when the legislation is dropped in the \"hopper.\" The submitted CAS appears in the Congressional Record and is published electronically on Congress.gov. "], "subsections": [{"section_title": "Compliance with the CAS Rule", "paragraphs": ["While the rule, on its face, requires Members to provide as \"specific[] as practicable\" \"a statement citing ... the power or powers to Congress in the Constitution to enact the bill or joint resolution,\" the CAS rule itself is silent on various issues. For example, the rule does not prescribe any particular format or level of detail for CASs. The House Committee on Rules (Rules Committee) provided guidance soon after the rule was adopted, identifying the following five examples of citations to constitutional authority:", "1. \"The constitutional authority on which this bill rests is the power of Congress to make rules for the government and regulation of the land and naval forces, as enumerated in Article I, Section 8, Clause 14 of the United States Constitution.\" 2. \"This bill is enacted pursuant to Section 2 of Amendment XV of the United States Constitution.\" 3. \"This bill is enacted pursuant to the power granted to Congress under Article I, Section 8, Clause 3 of the United States Constitution.\" 4. \"The Congress enacts this bill pursuant to Clause 1 of Section 8 of Article I of the United States Constitution and Amendment XVI of the United States Constitution.\" 5. \"This bill makes specific changes to existing law in a manner that returns power to the States and to the people, in accordance with Amendment X of the United States Constitution.\" ", "This guidance suggests that compliant CASs should generally discuss the affirmative constitutional authority that empowers Congress to enact particular legislation, but need not discuss any external constraints on Congress's powers to enact the legislation. For example, under this guidance, a CAS for a bill that proposed to ban all interstate shipments of religious pamphlets could be seen as compliant if it cited the Commerce Clause as the source of congressional power, even though the bill may run afoul of the Free Exercise and Free Speech Clauses of the First Amendment. Nonetheless, the last example provided by the Rules Committee suggests that a citation to a provision of the Constitution that does not explicitly grant power to the Congress\u2014such as the Tenth Amendment, which preserves the powers of the states \u2014may suffice to comply with the rule. More broadly, the Rules Committee guidance indicates that Members have significant discretion in determining whether particular CASs comply with the rule. The Rules Committee guidance notes that it is ultimately \"the responsibility of the bill sponsor to determine what authorities [he or she] wish[es] to cite and to provide that information to the Legislative Counsel staff.\"", "In practice, outside commentators have noted that Members have generally complied with House Rule XII, clause 7(c). Such observations may be the result of how the rule is enforced. The Rules Committee has noted, \"The adequacy and accuracy of the citation of constitutional authority is a matter for debate in the committees and in the House.\" This statement suggests that the CAS rule is enforced only insofar as \"the House clerk ... acts to verify that each bill has a justification\" and \"not [in judging] the adequacy of the justification itself.\" "], "subsections": []}, {"section_title": "Studies of CAS Practices", "paragraphs": [], "subsections": [{"section_title": "Practices with Regard to Specificity", "paragraphs": ["Studies of past practices under House Rule XII, clause 7(c), support the view that Members have considerable leeway and discretion in crafting CASs. Professor Hanah Volokh of Emory University conducted a study of CAS practices early in the 112 th Congress, aggregating more than 1,700 statements submitted during the first four months of 2011. According to Professor Volokh, a \"handful\" of these CASs \"engage[d],\" in her opinion, \"in a thorough and highly detailed explanation of the constitutional ramifications of the proposed legislation\" by discussing the Federalist Papers or Supreme Court doctrine, among other things. The remainder, however, were less specific in their identification of Congress's powers. For example, 8% of the statements reviewed by Professor Volokh generally cited Article I, Section 8\u2013without providing any further specificity as to the particular clauses within that section providing constitutional support for the proposed legislation. A study of the CASs for \"every bill and joint resolution introduced\" from January 5, 2011, to January 5, 2012, of that same Congress reported similar findings. According to the House Republican Study Committee, 15% of submitted CASs relied on Article I, Section 8 alone.", "In preparing various versions of this report, CRS conducted a similar study of CASs from the 114th and 115th Congresses. First, in 2017, CRS staff examined the 937 statements submitted between July 1, 2016, and January 1, 2017, consisting of 13 joint resolutions and 924 bills. In 2019, CRS staff examined 1,110 statements submitted between July 1, 2018, and January 2, 2019, consisting of 10 joint resolutions and 1,100 bills. Most commonly, in 58% of cases, the CAS cited to a specific clause in Article I, Section 8, such as the Taxing and Spending Clause or the Commerce Clause. Few submitted CASs consisted of more than a bare citation to an affirmative power granted to Congress in the Constitution. For example, four CASs examined from 2016 and six CAS examined from 2018 explicitly discussed Supreme Court case law that purportedly support the bill or joint resolution. Forty-four of the statements from 2016 and thirteen statements from 2018 cited to provisions of the Constitution that constrain rather than empower Congress or one of the other federal branches, such as the restrictions in Article I, Section 9 or the Bill of Rights. Few CASs went beyond the scope of the rule to detail why the constitutional provision cited empowers Congress to enact the proposed legislation. ", "In line with the studies on CASs in the 112 th Congress, CRS found that numerous statements submitted during the sample periods contained general, rather than specific, references to the Constitution. As Table 1 below indicates, the most frequent citation in CASs accompanying recent legislation was a general reference to Article I, Section 8, of the Constitution. This occurred in 30% of all CASs during the 2016 sample period and 33% of all CASs during the 2018 sample period, a marked increase from the House Republican Study Committee and Volokh studies of the 112 th Congress. Similarly, the sixth and ninth most frequently cited constitutional provision in submitted statements during the respective sample periods was even broader: a general reference to Article I of the Constitution. "], "subsections": []}, {"section_title": "Practices with Regard to Particular Clauses", "paragraphs": ["Beyond CAS practices with regard to specificity, the sample of recently submitted Rule XII statements is also noteworthy in that it highlights the specific clauses of the Constitution that Members have most frequently relied upon in submitted CASs. In particular, numerous recently submitted CASs are notable in that the statements raise certain questions about how a particular clause has been interpreted, both as a matter of historical practice and by the courts, and how that same clause is being cited by the relevant CAS. Among the most prominent examples of CASs that could be seen as adopting an interpretation of the Constitution that potentially diverges from historical understandings or judicial interpretations of a particular clause include statements that cite to the following clauses:", "Necessary and Proper Clause : One of the most frequently cited clauses in recent CASs was the Necessary and Proper Clause, which allows Congress to \"make all Laws which shall be necessary and proper for carrying into Execution\" the powers enumerated in Article I and \"all other Powers vested by [the] Constitution in the Government of the United States, or in any Department or Officer thereof.\" About a quarter of all CASs in the CRS studies contained a citation to that clause, with 14% of the 2016 CASs and 19% of the 2018 CASs citing the Necessary and Proper Clause as the sole power to enact the underlying legislation. Citations to the Necessary and Proper Clause in isolation could be seen as somewhat anomalous, as that clause has never been viewed by the Court or by the Framers of the Constitution as a general source of power for Congress to do whatever is \"necessary and proper.\" Instead, \"[w]hile the Necessary and Proper Clause authorizes congressional action 'incidental to [an enumerated] power, and conducive to its beneficial exercise,'\" it does not provide Congress with \"great substantive and independent power.\" General Welfare Clause: The General Welfare Clause refers to a specific phrase contained within the language in Article I, Section 8, clause 1 empowering Congress to enact certain taxes and spend the money collected from taxation. Specifically, the first clause of Section 8 of Article I affords Congress the power to \"lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the Common Defence and general Welfare of the United States ....\u00a0\" In CRS's studies, the Taxing and Spending Clause was the third most frequently cited clause by CASs. Not infrequently, a citation to this clause\u2014commonly described in CASs as the \"General Welfare Clause\"\u2014was used for legislation unrelated to the spending of money by the federal government. Importantly, the phrase \"general Welfare\" does not exist in isolation in the clause, which might otherwise empower Congress to enact laws that broadly promote the general welfare of the nation. Instead, the phrase \"general Welfare\" in Article I, Section 8, clause 1, is tied to the preceding language in the clause regarding the raising of revenue, and thus requires Congress to spend the money it collects from taxation to promote the general welfare. While this power is considerable, it is necessarily tied to spending legislation. Military Regulation Clause: The constitutional provision affording Congress with the power to \"make rules for the Government and Regulation of the land and naval forces\" is another frequently cited clause in recent CASs. Several of the bills to which such CASs are attached, however, do not purport to regulate the United States' armed forces, but instead prescribe broad regulations for the government as a whole. Such references to the Military Regulation Clause appear to stem from reading the first phrase of the clause\u2014\"make rules for the Government\"\u2014in isolation from the rest of the clause, as an independent power. However, such an understanding of the clause is inconsistent with traditional interpretations of the scope of that clause, which view it as solely related to Congress's power over the military. This interpretation also runs contrary to traditional rules of legal interpretation that counsel for reading phrases in a legal text in their context and not in isolation from the rest of the text. More broadly, interpreting the Military Regulation Clause to allow Congress to direct the actions of the federal government generally in whatever manner Congress wishes would arguably transform the clause from a narrow power, confined to matters related to the armed forces, to an open-ended police power, something otherwise rejected by the Framers of the Constitution. Appropriations Clause: A number of recent CASs cite provisions in Article I, Section 9, including several CASs that cite the Appropriations Clause as the authority for Congress to provide money for a particular project. The Appropriations Clause states, in relevant part, that \"No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.\" Like other provisions found in Section 9 of Article I, this clause generally has not been interpreted to grant Congress any affirmative power. Instead, in keeping with other provisions in Section 9, the Appropriations Clause has been seen to function as a restriction on the powers of the federal government. Specifically, the Appropriations Clause ensures that when the federal government spends money, \"the payment of money from the Treasury must be authorized by a statute.\" It thus serves as an affirmative restriction on the power of the Executive and makes Congress's \"power over the purse\" exclusive in nature. As discussed above, Congress's power to spend money derives from the Taxing and Spending Clause. Bill of Rights: While not among the most frequent citations in CASs, occasionally one of the first 10 amendments to the Constitution\u2014the Bill of Rights\u2014has been cited in support of Congress's power to enact legislation. Congress may certainly have an interest in protecting the rights listed in the Bill of Rights, but it should be noted that the first 10 amendments to the Constitution do not themselves empower Congress to take any action, and they instead consist of \"negative rights\" protecting individuals from certain government conduct. The Bill of Rights often prohibits congressional action. As a result, if a sponsor proposes legislation intended to support individual liberties protected by the Constitution, the CAS for such legislation could instead rely on an affirmative power of the Congress, such as the powers provided in Article I, Section 8 of the Constitution. Another alternative would be the enforcement power of the Fourteenth Amendment, which the Supreme Court has held allows \"Congress [to] enact so-called prophylactic legislation\" aimed at \"prevent[ing] and deter[ing] unconstitutional conduct.\" Nonetheless, it should be noted that the House Rules Committee has suggested that a citation to a provision of the Constitution that does not explicitly grant power to Congress may suffice to comply with the CAS rule. For example, a Member seeking to rescind or narrow the scope of an existing law could arguably believe it appropriate to identify constitutional principles found in the Bill of Rights or elsewhere that the Member believes are advanced by the proposed legislation."], "subsections": []}]}, {"section_title": "Legal Implications of a CAS", "paragraphs": ["CASs have limited legal import, in that the CAS of a bill enacted into law will likely not alter a court's view of the constitutionality of the legislation. At bottom, a CAS is a statement by one Member of Congress (i.e., the sponsor) when a piece of legislation is introduced. It is not formally part of a bill or joint resolution. Therefore, even if the underlying legislation is enacted into law, the CAS would have no formal legal effect because the CAS was not subject to the approval of both houses of Congress, or presented to the President, as is required by Article I, Section 7. Instead, CASs are a type of legislative history material that describes the initial thoughts of a single Member as to Congress's power to enact the bill. In this sense, one might view a CAS as akin to an isolated statement in the Congressional Record or a statement issued by the sponsor of a bill, which courts generally regard as \"weak\" forms of legislative history when considering Congress's intent in passing a law. ", "In practice, in the few court cases that cite to a law's CAS, the underlying statement is mentioned merely in passing and had no apparent effect on the decision, as courts have independently evaluated the constitutionality of the legislation in question notwithstanding the existence of the CAS. This practice is in keeping with broader principles of constitutional law as adopted by the courts. One such principle holds that Congress generally may not independently and without further scrutiny in the context of a case or controversy before a court define its own powers under the Constitution. Another principle holds that an otherwise unconstitutional law will not be found to be permissible by a court merely because Congress believes the provision to be within its powers."], "subsections": []}, {"section_title": "Debate over the Rule", "paragraphs": ["Given the seeming ease of compliance with House Rule XII, clause 7(c) , and the tendency of some CASs to cite to general or arguably inapplicable provisions of the Constitution, questions might be raised about the desirability of the CAS rule. Critics have argued for its repeal, contending that the rule is symbolic and has little impact on congressional debate or dialogue about Congress's authority under the Constitution. In addition, some have asserted that Congress lacks the institutional capacity to interpret the Constitution, and the CAS rule demonstrates this insofar as there have been few meaningful debates in Congress over the scope of Congress's powers under the rule. Others contend that the administrative costs of complying with the rule outweigh any benefits from the CAS requirement.", "On the other hand, proponents characterize House Rule XII, clause 7(c), as an extension of the broader debate over Congress's role in interpreting the Constitution, providing a limited means by which Members of Congress may expressly engage in constitutional interpretation. As one commentator notes, \"[f]undamentally, a [CAS] is a congressional interpretation of the Constitution,\" and supporters of the rule see several benefits to having the House of Representatives engage in a limited form of constitutional interpretation through the submission of CASs. According to the rule's proponents, statements submitted under House Rule XII are a \"simple and straightforward self-monitoring mechanism\" to ensure that Congress does not \"usurp\" powers not granted to it in the Constitution. In this sense, according to its proponents, the CAS rule serves to remind Members of the limits on Congress's institutional power. ", "Additionally, supporters of House Rule XII, clause 7(c), argue that the rule enhances constitutional dialogue outside of the judiciary and promotes constitutional literacy within Congress by formally requiring Members to engage in even limited constitutional interpretation when introducing legislation. According to one commentator, the CAS rule could ", "provide a foundation for a new sense within ... [Congress] ... that there is both reason and need for its members to develop deeper and broader understandings of the Constitution and constitutional interpretation\u2014in the direction of Congress becoming ... not only a co-equal branch of the federal government, but a co-equal interpreter of the federal Constitution, if not more.", "Proponents of the rule have further contended that the rule could enhance the institutional credibility and reputation of Congress by making clear to constituents that Members \"take seriously the constitutionality of their actions.\" According to one former Member,", "Congress's reputational problems partially relate to a belief that Congress is not really debating or deliberating in good faith but is simply retreating to partisan battle lines. This concern has been exacerbated by Congress abdicating and leaving to the courts its historical responsibility to consider constitutionality on its own. In this respect, the House Rule ... is a foot in the door. Under the House Rule, all members of the House are required, essentially for the first time, to take at least one aspect of their obligation to consider constitutionality more seriously.", "Nonetheless, even among proponents of the rule, informal suggestions have been made to improve the constitutional dialogue surrounding CASs. Among the primary changes proposed are the following:", "Enhancing the Content of CASs: Prompted by criticisms about how \"thin many of [the CASs] are,\" some have suggested that the House rules be altered to require more formal and robust debate over the constitutionality of proposed legislation. One proposal called for time to be set aside for formal debate on the House floor about the constitutionality of legislation upon the motion of a single Member. Other proposals focus on changing the content of the CASs themselves by requiring more expansive statements that discuss the relationship between the cited provision of the Constitution and the bill itself. In addition, others have advocated that the CAS rule formally require that the statement discuss \"[w]ith some depth\" any \"precedent germane to the authority to enact the\" legislation. Finally, several commentators have proposed altering the rule so that Members must not only cite to the Constitution's affirmative grants of authority to Congress, but also discuss any potential limitations the Constitution may impose on Congress's power to legislate. Better Enforcing the CAS R ule : Given the large number of CASs that lack specificity or cite seemingly inapplicable clauses of the Constitution, supporters of the rule have argued that Members must be held accountable for ensuring that submitted CASs comply with both the letter and spirit of the requirement. One early version of the current CAS rule proposed in the 111th Congress would have deemed general citations to the \"common defense clause, the general welfare clause, or the necessary and proper clause\" insufficient to satisfy House Rule XII, clause 7(c). In addition, this proposal would have allowed a Member to initiate a point of order challenging the adequacy of a CAS, thereby subjecting the measure to a short debate that would resolve whether the submitted statement complied with House Rule XII. Others have urged that the Clerk of the House or a designee be empowered to \"evaluate the content\" of a submitted statement formally and \"add a note indicating that the Statement submitted does not properly satisfy the Rule's specificity requirement.\" Under this proposal, any bill with such a notation could be \"subject to a special privileged motion by a Member to recommit the bill for failure to follow the Rule.\" Changing Other Procedures Regarding CASs : Currently, the CAS focuses on a single moment: the initial introduction of a bill or joint resolution. Viewing this limitation on the use of a CAS as a shortcoming that prevents more robust constitutional debate, several proponents of the CAS rule have argued that the rule should apply during all stages of the legislative process, including during committee deliberations, so that the constitutionality of a bill or resolution is subject to broader consideration. Relatedly, because the CAS rule only applies at the beginning of the legislative process, the only Member who currently assesses Congress's authority to enact the legislation in question is the Member who introduced the legislation. In order to ensure that Members, who ordinarily must decide how to vote on another Member's bill, consider the constitutional implications of the legislation in question, some have suggested that the House rule \"explicitly acknowledge\" the independent \"obligation\" of Members to be \"mindful of any constitutional objections\" regarding the bill that is the subject of a vote. In what may be the broadest means to allow more Members to weigh in on the constitutional implications of a bill, at least one commentator has suggested (but ultimately rejects) changing the House rule so that the CAS is part of the text of a bill, as opposed to a statement attached to the bill. Such an approach could, at least in theory, formalize and elevate the role of the CAS because when a bill that contains a CAS in its text is put to a vote, multiple Members could potentially voice their agreement or disagreement with the bill's language assessing Congress's power to enact the underlying legislation. ", "Each of the proposed modifications to the CAS rule could raise new concerns, however. For example, if House Rule XII were modified to require more robust discussions of the constitutionality of a given piece of legislation throughout the legislative process, such a modification could amplify the criticisms that the CAS rule requires considerable resources to ensure compliance. Moreover, if the rule were modified to require that CASs include additional content, without any changes to its current enforcement regime, the additional requirements could, in the view of at least one commentator, be ignored."], "subsections": []}]}, {"section_title": "Potential Resources and Considerations for Drafting CASs", "paragraphs": ["This section of the report identifies issues that Members and congressional staffers may find useful to consider when assessing whether and how a constitutional provision may provide a source of authority for legislation. First, the section notes available resources that may aid in interpreting the Constitution. Second, the section suggests potential constitutional bases for various types of legislation."], "subsections": [{"section_title": "Resources on the Constitution That May Be Relevant for CASs", "paragraphs": ["There are numerous resources that Members and staff could use to learn more about the affirmative powers afforded Congress by the Constitution and the limitations on those powers. The Constitution and its current amendments contain a little more than 7,500 words, and Congress regularly authorizes the printing and distribution of pocket versions of the Constitution for Members and staff. Moreover, a host of primary historical documents from the founding era are available electronically for those interested, including the following:", "Farrand ' s Records : Documentary records from the Constitutional Convention, including the notes gathered by various attendees, complied by historian Max Farrand. The Federalist Papers : A series of newspaper articles written by Alexander Hamilton, John Jay, and James Madison urging the ratification of the Constitution. Founder ' s Constitution : A joint venture of the University of Chicago Press and the Liberty Fund, providing various primary sources for each clause of the Constitution. Constitutional Sources Project (ConSource): ConSource provides free access to a \"digital library of historical sources related to the creation, ratification, and amendment of the United States Constitution.\" ", "In addition to these primary sources, Members and staff may wish to consult a number of secondary sources that are publicly available explaining the various clauses of the Constitution, including the following:", "Constitution Annotated ( CONAN ) : The Library of Congress, through the Congressional Research Service, regularly publishes and updates The Constitution of the United States of America: Analysis and Interpretation (popularly known as the Constitution Annotated or CONAN). CONAN contains an in-depth, accessible, and objective record of how each provision in the Constitution has been interpreted by the Supreme Court and other entities. Commentaries on the Constitution of the United States : Commentaries on the Constitution of the United States is a three-volume treatise written by Associate Justice Joseph Story in 1833. It is widely cited as an authoritative understanding of the Constitution. Interactive Constitution : For an overview of the Constitution, the congressionally chartered National Constitution Center has created the Interactive Constitution wherein \"scholars of different perspectives discuss what they agree upon, and what they disagree about\" with regard to broad concepts in constitutional law. The Heritage Foundation ' s Guide to the Constitution : The Heritage Foundation's Guide to the Constitution provides a clause-by-clause analysis of the Constitution with a series of explanatory essays from a number of legal scholars. The American Constitution Society ' s Keeping Faith With the Constitution : The American Constitution Society's Keeping Faith With the Constitution examines the text and history of the Constitution with a view toward how the Constitution's \"words and principles\" have been interpreted throughout U.S. history."], "subsections": []}, {"section_title": "Additional Considerations in Crafting CASs", "paragraphs": ["To aid drafters of CASs, Table 2 provides a list of suggested citations that could potentially be submitted in a CAS pursuant to House Rule XII, clause 7(c), for various types of commonly introduced legislation. ", "Beyond these suggestions for citations to specific provisions of the Constitution, given the broader trends with regard to CAS practices discussed above, it may also be helpful to consider the following questions before submitting a CAS:", "Does the CAS cite to a specific clause of the Constitution? While several recent CASs have adopted the practice of citing to an entire Article of the Constitution or a section of the Constitution, such as Article I, Section 8, the prevailing customary practice has been to cite to a specific clause of the Constitution. To the extent a Member wishes to cite to a specific clause in a CAS, Table 2 may be a helpful resource to consult. Does the CAS cite only to the Necessary and Proper Clause? While a considerable number of CASs cite exclusively to the Necessary and Proper Clause, such a citation may raise questions with regard to whether the clause is intended to do more than supplement Congress's other enumerated powers under the Constitution. To the extent a Member may wish to cite to Congress's other, more specific enumerated powers for support for a given piece of legislation, Table 2 may be a helpful resource to consult. Does the CAS cite to a clause that affirmatively empowers Congress to take an action? Citations in CASs to clauses in Article I, Section 9 of the Constitution, which contains a list of limitations on the powers of the federal government, or the Bill of Rights, which consists of a number of rights retained vis-\u00e1-vis the federal government, may suggest a broader interpretation of such clauses. To the extent a Member prefers to cite to a clause that is more generally recognized to grant an affirmative power to Congress, Article I, Section 8 contains the vast majority of commonly cited clauses that provide Congress the power to legislate with respect to various subjects. Does the CAS cite to a clause that relates to and authorizes the underlying legislation? Perhaps most importantly, a Member may wish cite to a provision of the Constitution whose power, based on either historical understandings or judicial interpretations of a particular clause, has some relationship with the subject matter of the legislation. As discussed earlier in this report, citations to constitutional provisions like the General Welfare Clause and the Military Regulation Clause may be more limited than the language of the Constitution might suggest at first blush. To the extent a Member may want to confirm that a particular CAS citation relates to and authorizes the underlying legislation, attorneys in CRS's American Law Division can provide advice with regard to specific CAS citations. "], "subsections": []}]}, {"section_title": "Conclusion", "paragraphs": ["A House Rule XII, clause 7(c), statement regarding the constitutionality of legislation is required only when a Member of the House introduces legislation. The CAS, by its nature, is just the starting point for constitutional dialogue respecting a bill or joint resolution. Nothing in the rule prohibits further discussions about the constitutional issues that a piece of legislation may implicate. While the customary practice with regard to CASs, to date, has been to provide a short citation to the provision in the Constitution that affirmatively grants Congress the authority to enact the underlying legislation, it is not unprecedented for Members to cite sources beyond the text of the Constitution, such as Supreme Court case law, primary source materials on the Constitution, or a constitutional law treatise. Other CASs have gone beyond citing to the affirmative powers that the Constitution provides Congress and have discussed potential restraints the Constitution imposes that may prohibit the enactment of the underlying legislation.", "Outside of a CAS, Members can request a formal floor debate respecting the constitutionality of pending legislation, and constitutional debate and dialogue can occur in a host of other contexts, including voting to enact legislation, committee hearings, committee reports, and more \"informal practices, norms, and traditions.\" Also, Members of Congress have a variety of resources available to help inform their participation in constitutional debate, including \"expert witnesses at hearings, their legally trained staff, [and] constitutional experts at the [CRS].\" In particular, CRS's American Law Division regularly provides legal advice to Members and their staff on constitutional questions regarding pending legislation, whether by providing suggestions for a CAS or by formally rendering an opinion on the constitutionality of pending legislation. In this vein, Members and their staff have the capability to meaningfully participate in ongoing debates over the interpretation of the Constitution, beginning with the CAS."], "subsections": []}]}}
{"id": "R42699", "title": "The War Powers Resolution: Concepts and Practice", "released_date": "2019-03-08T00:00:00", "summary": ["This report discusses and assesses the War Powers Resolution and its application since enactment in 1973, providing detailed background on various cases in which it was used, as well as cases in which issues of its applicability were raised.", "In the post-Cold War world, Presidents have continued to commit U.S. Armed Forces into potential hostilities, sometimes without a specific authorization from Congress. Thus the War Powers Resolution and its purposes continue to be a potential subject of controversy. On June 7, 1995, the House defeated, by a vote of 217-201, an amendment to repeal the central features of the War Powers Resolution that have been deemed unconstitutional by every President since the law's enactment in 1973. In 1999, after the President committed U.S. military forces to action in Yugoslavia without congressional authorization, Representative Tom Campbell used expedited procedures under the Resolution to force a debate and votes on U.S. military action in Yugoslavia, and later sought, unsuccessfully, through a federal court suit to enforce presidential compliance with the terms of the War Powers Resolution.", "The War Powers Resolution (P.L. 93-148) was enacted over the veto of President Nixon on November 7, 1973, to provide procedures for Congress and the President to participate in decisions to send U.S. Armed Forces into hostilities. Section 4(a)(1) requires the President to report to Congress any introduction of U.S. forces into hostilities or imminent hostilities. When such a report is submitted, or is required to be submitted, Section 5(b) requires that the use of forces must be terminated within 60 to 90 days unless Congress authorizes such use or extends the time period. Section 3 requires that the \"President in every possible instance shall consult with Congress before introducing\" U.S. Armed Forces into hostilities or imminent hostilities.", "From 1975 through March 2017, Presidents have submitted 168 reports as the result of the War Powers Resolution, but only one, the 1975 Mayaguez seizure, cited Section 4(a)(1), which triggers the 60-day withdrawal requirement, and in this case the military action was completed and U.S. Armed Forces had disengaged from the area of conflict when the report was made. The reports submitted by the President since enactment of the War Powers Resolution cover a range of military activities, from embassy evacuations to full-scale combat military operations, such as the Persian Gulf conflict, and the 2003 war with Iraq, the intervention in Kosovo, and the anti-terrorism actions in Afghanistan. In some instances, U.S. Armed Forces have been used in hostile situations without formal reports to Congress under the War Powers Resolution. On one occasion, Congress exercised its authority to determine that the requirements of Section 4(a)(1) became operative on August 29, 1983, through passage of the Multinational Force in Lebanon Resolution (P.L. 98-119). In 1991 and 2002, Congress authorized, by law, the use of military force against Iraq. In several instances none of the President, Congress, or the courts has been willing to initiate the procedures of or enforce the directives in the War Powers Resolution.", "In the 115th Congress, U.S. military operations related to the joint counter-Houthi campaign conducted by the Kingdom of Saudi Arabia and the United Arab Emirates (UAE) in Yemen spurred congressional legislative action in both houses of Congress. The Senate on December 13, 2018, voted to adopt S.J.Res. 54, a joint resolution to \"direct the removal of United States Armed Forces from hostilities in the Republic of Yemen that have not been authorized by Congress,\" marking the first instance that such a joint resolution received consideration and passed the full Senate under the expedited consideration provisions of Section 1013 of the Department of State Authorization Act, Fiscal Years 1984 and 1985 (P.L. 98-164; 50 U.S.C. \u00a71546a). In the 116th Congress, the House of Representatives on February 13, 2019, voted to adopt a similar joint resolution on U.S. military involvement in Yemen, H.J.Res. 37, and the Senate is expected to take up a companion measure, S.J.Res. 7, in March 2019."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Under the Constitution, the war powers are divided between Congress and the President. Among other relevant grants, Congress has the power to declare war and raise and support the armed forces (Article I, Section 8), while the President is Commander in Chief (Article II, Section 2). It is generally agreed that the Commander-in-Chief role gives the President power to utilize the armed forces to repel attacks against the United States, but there has long been controversy over whether he is constitutionally authorized to send forces into hostile situations abroad without a declaration of war or other congressional authorization.", "Congressional concern about presidential use of armed forces without congressional authorization intensified after the Korean conflict. During the Vietnam War, Congress searched for a way to assert authority to decide when the United States should become involved in a war or the armed forces be utilized in circumstances that might lead to hostilities. On November 7, 1973, it passed the War Powers Resolution ( P.L. 93-148 ) over the veto of President Nixon. The main purpose of the Resolution was to establish procedures for both branches to share in decisions that might get the United States involved in war. The drafters sought to circumscribe the President's authority to use armed forces abroad in hostilities or potential hostilities without a declaration of war or other congressional authorization, yet provide enough flexibility to permit him to respond to attack or other emergencies.", "The record of the War Powers Resolution since its enactment has been mixed, and after 40 years it remains controversial. Some Members of Congress believe the Resolution has on some occasions served as a restraint on the use of armed forces by Presidents, provided a mode of communication, and given Congress a vehicle for asserting its war powers. Others have sought to amend the Resolution because they believe it has failed to assure a congressional voice in committing U.S. troops to potential conflicts abroad. Others in Congress, along with executive branch officials, contend that the President needs more flexibility in the conduct of foreign policy and that the time limitation in the War Powers Resolution is unconstitutional and impractical. Some have argued for its repeal.", "This report examines the provisions of the War Powers Resolution, actual experience in its use from its enactment in 1973 through March 2015, and proposed amendments to it. Appendix A lists instances which Presidents have reported to Congress under the War Powers Resolution, and Appendix B lists certain instances of the use of U.S. Armed Forces that were not reported."], "subsections": []}, {"section_title": "Provisions of the War Powers Resolution(P.L. 93-148)", "paragraphs": [], "subsections": [{"section_title": "Title", "paragraphs": ["Section 1 establishes the title, \"The War Powers Resolution.\" The law is frequently referred to as the \"War Powers Act,\" the title of the measure passed by the Senate. Although the latter is not technically correct, it does serve to emphasize that the War Powers Resolution, embodied in a joint resolution which complies with constitutional requirements for lawmaking, is a law."], "subsections": []}, {"section_title": "Purpose and Policy", "paragraphs": ["Section 2 states the Resolution's purpose and policy, with Section 2(a) citing as the primary purpose to \"insure that the collective judgment of both the Congress and the President will apply to the introduction of United States Armed Forces into hostilities, or into situations where imminent involvement in hostilities is clearly indicated by the circumstances, and to the continued use of such forces in hostilities or in such situations.\"", "Section 2(b) points to the Necessary and Proper Clause of the Constitution as the basis for legislation on the war powers. It provides that \"Under Article I, section 8, of the Constitution it is specifically provided that Congress shall have the power to make all laws necessary and proper for carrying into execution, not only its own powers but also all other powers vested by the Constitution in the Government of the United States....\"", "Section 2(c) states the policy that the powers of the President as Commander in Chief to introduce U.S. Armed Forces into situations of hostilities or imminent hostilities \"are exercised only pursuant to\u2014", "(1) a declaration of war,", "(2) specific statutory authorization, or", "(3) a national emergency created by attack upon the United States, its territories or possessions, or its armed forces.\""], "subsections": []}, {"section_title": "Consultation Requirement", "paragraphs": ["Section 3 of the War Powers Resolution requires the President \"in every possible instance\" to consult with Congress before introducing U.S. Armed Forces into situations of hostilities and imminent hostilities, and to continue consultations as long as the armed forces remain in such situations. The House report elaborated:", "A considerable amount of attention was given to the definition of consultation . Rejected was the notion that consultation should be synonymous with merely being informed. Rather, consultation in this provision means that a decision is pending on a problem and that Members of Congress are being asked by the President for their advice and opinions and, in appropriate circumstances, their approval of action contemplated. Furthermore, for consultation to be meaningful, the President himself must participate and all information relevant to the situation must be made available.", "The House version specifically called for consultation between the President and the leadership and appropriate committees. This was changed to less specific wording in conference, however, in order to provide more flexibility."], "subsections": []}, {"section_title": "Reporting Requirements", "paragraphs": ["Section 4 requires the President to report to Congress whenever he introduces U.S. Armed Forces abroad in certain situations. Of key importance is Section 4(a)(1) because it triggers the time limit in Section 5(b). Section 4(a)(1) requires reporting within 48 hours, in the absence of a declaration of war or congressional authorization, the introduction of U.S. Armed Forces \"into hostilities or into situations where imminent involvement in hostilities is clearly indicated by the circumstances.\"", "Some indication of the meaning of hostilities and imminent hostilities is given in the House report on its War Powers bill:", "The word hostilities was substituted for the phrase armed conflict during the subcommittee drafting process because it was considered to be somewhat broader in scope. In addition to a situation in which fighting actually has begun, hostilities also encompasses a state of confrontation in which no shots have been fired but where there is a clear and present danger of armed conflict. \" Imminent hostilities\" denotes a situation in which there is a clear potential either for such a state of confrontation or for actual armed conflict.", "Section 4(a)(2) requires the reporting of the introduction of troops \"into the territory, airspace or waters of a foreign nation, while equipped for combat, except for deployments which relate solely to supply, replacement, repair, or training of such forces.\" According to the House report this was to cover", "the initial commitment of troops in situations in which there is no actual fighting but some risk, however small, of the forces being involved in hostilities. A report would be required any time combat military forces were sent to another nation to alter or preserve the existing political status quo or to make the U.S. presence felt. Thus, for example, the dispatch of Marines to Thailand in 1962 and the quarantine of Cuba in the same year would have required Presidential reports. Reports would not be required for routine port supply calls, emergency aid measures, normal training exercises, and other noncombat military activities.", "Section 4(a)(3) requires the reporting of the introduction of troops \"in numbers which substantially enlarge United States Armed Forces equipped for combat already located in a foreign nation.\" The House report elaborated:", "While the word \"substantially\" designates a flexible criterion, it is possible to arrive at a common-sense understanding of the numbers involved. A 100% increase in numbers of Marine guards at an embassy\u2014say from 5 to 10\u2014clearly would not be an occasion for a report. A thousand additional men sent to Europe under present circumstances does not significantly enlarge the total U.S. troop strength of about 300,000 already there. However, the dispatch of 1,000 men to Guantanamo Bay, Cuba, which now has a complement of 4,000 would mean an increase of 25%, which is substantial. Under this circumstance, President Kennedy would have been required to report to Congress in 1962 when he raised the number of U.S. military advisers in Vietnam from 700 to 16,000.", "All of the reports under Section 4(a), which are to be submitted to the Speaker of the House and the President pro tempore of the Senate, are to set forth", "(A) the circumstances necessitating the introduction of United States Armed Forces;", "(B) the constitutional and legislative authority under which such introduction took place; and", "(C) the estimated scope and duration of the hostilities or involvement.", "Section 4(b) requires the President to furnish such other information as Congress may request to fulfill its responsibilities relating to committing the nation to war.", "Section 4(c) requires the President to report to Congress periodically, and at least every six months, whenever U.S. forces are introduced into hostilities or any other situation in Section 4(a).", "The objectives of these provisions, the conference report stated, was to \"ensure that the Congress by right and as a matter of law will be provided with all the information it requires to carry out its constitutional responsibilities with respect to committing the Nation to war and to the use of United States Armed Forces abroad.\""], "subsections": []}, {"section_title": "Congressional Action", "paragraphs": ["Section 5(a) deals with congressional procedures for receipt of a report under Section 4(a)(1). It provides that if a report is transmitted during a congressional adjournment, the Speaker of the House and the President pro tempore of the Senate, when they deem it advisable or if petitioned by at least 30% of the Members of their respective Houses, shall jointly request the President to convene Congress in order to consider the report and take appropriate action.", "Section 5(b) was intended to provide teeth for the War Powers Resolution. After a report \"is submitted or is required to be submitted pursuant to section 4(a)(1), whichever is earlier,\" Section 5(b) requires the President to terminate the use of U.S. Armed Forces after 60 days unless Congress (1) has declared war or authorized the action; (2) has extended the period by law; or (3) is physically unable to meet as a result of an armed attack on the United States. The 60 days can be extended for 30 days by the President if he certifies that \"unavoidable military necessity respecting the safety of United States Armed Forces\" requires their continued use in the course of bringing about their removal.", "Section 5(c) requires the President to remove the forces at any time if Congress so directs by concurrent resolution; the effectiveness of this subsection is uncertain because of the 1983 Supreme Court decision on the legislative veto. It is discussed in Part II of this report."], "subsections": []}, {"section_title": "Priority Procedures", "paragraphs": ["Section 6 establishes expedited procedures for congressional consideration of a joint resolution or bill introduced to authorize the use of armed forces under Section 5(b). They provide for", "(a) a referral to the House Foreign Affairs [International Relations] or Senate Foreign Relations Committee, the committee to report one measure not later than 24 calendar days before the expiration of the 60 day period, unless the relevant House determines otherwise by a vote;", "(b) the reported measure to become the pending business of the relevant House and be voted on within three calendar days, unless that House determines otherwise by vote; in the Senate the debate is to be equally divided between proponents and opponents;", "(c) a measure passed by one House to be referred to the relevant committee of the other House and reported out not later than 14 calendar days before the expiration of the 60 day period, the reported bill to become the pending business of that House and be voted on within 3 calendar days unless determined otherwise by a vote;", "(d) conferees to file a report not later than four calendar days before the expiration of the 60 day period. If they cannot agree within 48 hours, the conferees are to report back in disagreement, and such report is to be acted on by both Houses not later than the expiration of the 60-day period.", "Section 7 establishes similar priority procedures for a concurrent resolution to withdraw forces under Section 5(c). For a recent use of these procedures see the section on the \" Legislative Veto ,\" below."], "subsections": []}, {"section_title": "Interpretive Provisions", "paragraphs": ["Section 8 sets forth certain interpretations relating to the Resolution. Section 8(a) states that authority to introduce armed forces is not to be inferred from any provision of law or treaty unless such law, or legislation implementing such treaty, specifically authorizes the introduction of armed forces into hostilities or potential hostilities and states that it is \"intended to constitute specific statutory authorization within the meaning of this joint resolution.\" This language was derived from a Senate measure and was intended to prevent a security treaty or military appropriations act from being used to authorize the introduction of troops. It was also aimed against using a broad resolution like the Tonkin Gulf Resolution to justify hostilities abroad. This resolution had stated that the United States was prepared to take all necessary steps, including use of armed force, to assist certain nations, and it was cited by Presidents and many Members as congressional authorization for the Vietnam war.", "Section 8(b) states that further specific statutory authorization is not required", "to permit members of United States Armed Forces to participate jointly with members of the armed forces of one or more foreign countries in the headquarters operations of high-level military commands which were established prior to the date of enactment of this joint resolution and pursuant to the United Nations Charter or any treaty ratified by the United States prior to such date.", "This section was added by the Senate to make clear that the resolution did not prevent U.S. forces from participating in certain joint military exercises with allied or friendly organizations or countries. The conference report stated that the \"high-level\" military commands meant the North Atlantic Treaty Organization, (NATO), the North American Air Defense Command (NORAD) and the United Nations command in Korea.", "Section 8(c) defines the introduction of armed forces to include the assignment of armed forces to accompany regular or irregular military forces of other countries when engaged, or potentially engaged, in hostilities. The conference report on the War Powers Resolution explained that this was language modified from a Senate provision requiring specific statutory authorization for assigning members of the Armed Forces for such purposes. The report of the Senate Foreign Relations Committee on its bill said", "The purpose of this provision is to prevent secret, unauthorized military support activities and to prevent a repetition of many of the most controversial and regrettable actions in Indochina. The ever deepening ground combat involvement of the United States in South Vietnam began with the assignment of U.S. \"advisers\" to accompany South Vietnamese units on combat patrols; and in Laos, secretly and without congressional authorization, U.S. \"advisers\" were deeply engaged in the war in northern Laos.", "Section 8(d) states that nothing in the Resolution is intended to alter the constitutional authority of either the Congress or the President. It also specifies that nothing is to be construed as granting any authority to introduce troops that would not exist in the absence of the Resolution. The House report said that this provision was to help insure the constitutionality of the Resolution by making it clear that nothing in it could be interpreted as changing the powers delegated by the Constitution.", "Section 9 is a separability clause, stating that if any provision or its application is found invalid, the remainder of the Resolution is not to be affected."], "subsections": []}]}, {"section_title": "Constitutional Questions Raised", "paragraphs": ["From its inception, the War Powers Resolution was controversial because it operated on the national war powers, powers divided by the Constitution in no definitive fashion between the President and Congress. Congress adopted the resolution in response to the perception that Presidents had assumed more authority to send forces into hostilities than the framers of the Constitution had intended for the Commander in Chief. President Nixon in his veto message challenged the constitutionality of the essence of the War Powers Resolution, and particularly two provisions. He argued that the legislative veto provision, permitting Congress to direct the withdrawal of troops by concurrent resolution, was unconstitutional. He also argued that the provision requiring withdrawal of troops after 60-90 days unless Congress passed legislation authorizing such use was unconstitutional because it checked presidential powers without affirmative congressional action. Every President since the enactment of the War Powers Resolution has taken the position that it is an unconstitutional infringement on the President's authority as Commander in Chief."], "subsections": [{"section_title": "War Powers of the President and Congress", "paragraphs": ["The heart of the challenge to the constitutionality of the War Powers Resolution rests on differing interpretations by the two branches of the respective war powers of the President and Congress. These differing interpretations, especially the assertions of presidential authority to send forces into hostile situations without a declaration of war or other authorization by Congress, were the reason for the enactment of the Resolution.", "The congressional view was that the framers of the Constitution gave Congress the power to declare war, meaning the ultimate decision whether or not to enter a war. Most Members of Congress agreed that the President as Commander in Chief had power to lead the U.S. forces once the decision to wage war had been made, to defend the nation against attack, and perhaps in some instances to take other action such as rescuing American citizens. But, in this view, he did not have the power to commit armed forces to war. By the early 1970s, the congressional majority view was that the constitutional balance of war powers had swung too far toward the President and needed to be corrected. Opponents argued that Congress always held the power to forbid or terminate U.S. military action by statute or refusal of appropriations, and that without the clear will to act the War Powers Resolution would be ineffective.", "In his veto message, President Nixon said the Resolution would impose restrictions upon the authority of the President which would be dangerous to the safety of the Nation and \"attempt to take away, by a mere legislative act, authorities which the President has properly exercised under the Constitution for almost 200 years.\"", "The War Powers Resolution in Section 2(c) recognized the constitutional powers of the President as Commander in Chief to introduce forces into hostilities or imminent hostilities as \"exercised only pursuant to (1) a declaration of war, (2) specific statutory authorization, or (3) a national emergency created by attack upon the United States, its territories or possessions, or its armed forces.\" The executive branch has contended that the President has much broader authority to use forces, including for such purposes as to rescue American citizens abroad, rescue foreign nationals where such action facilitates the rescue of U.S. citizens, protect U.S. Embassies and legations, suppress civil insurrection, implement the terms of an armistice or cease-fire involving the United States, and carry out the terms of security commitments contained in treaties."], "subsections": []}, {"section_title": "Legislative Veto", "paragraphs": ["On June 23, 1983, the Supreme Court in INS v. Chadha , ruled unconstitutional the legislative veto provision in Section 244(c)(2) of the Immigration and Nationality Act. Although the case involved the use of a one-House legislative veto, the decision cast doubt on the validity of any legislative veto device that was not presented to the President for signature. The Court held that to accomplish what the House attempted to do in the Chadha case \"requires action in conformity with the express procedures of the Constitution's prescription for legislative action: passage by a majority of both Houses and presentment to the President.\" On July 6, 1983, the Supreme Court affirmed a lower court's decision striking down a provision in another law that permitted Congress to disapprove by concurrent (two-House) resolution.", "Since Section 5(c) requires forces to be removed by the President if Congress so directs by a concurrent resolution, it is constitutionally suspect under the reasoning applied by the Court. A concurrent resolution is adopted by both chambers, but it does not require presentment to the President for signature or veto. Some legal analysts contend, nevertheless, that the War Powers Resolution is in a unique category which differs from statutes containing a legislative veto over delegated authorities. Perhaps more important, some observers contend, if a majority of both Houses ever voted to withdraw U.S. forces, the President would be unlikely to continue the action for long, and Congress could withhold appropriations to finance further action. Because the War Powers Resolution contains a separability clause in Section 9, most analysts take the view that the remainder of the joint resolution would not be affected even if Section 5(c) were found unconstitutional.", "Congress has taken action to fill the gap left by the possible invalidity of the concurrent resolution mechanism for the withdrawal of troops. On October 20, 1983, the Senate voted to amend the War Powers Resolution by substituting a joint resolution, which requires presentment to the President, for the concurrent resolution in Section 5(c), and providing that it would be handled under the expedited procedures in Section 7. The House and Senate conferees agreed not to amend the War Powers Resolution itself, but to adopt a free standing measure relating to the withdrawal of troops. The measure, which became law, provided that any joint resolution or bill to require the removal of U.S. Armed Forces engaged in hostilities outside the United States without a declaration of war or specific statutory authorization would be considered in accordance with the expedited procedures of Section 601(b) of the International Security and Arms Export Control Act of 1976, except that it would be amendable and debate on a veto limited to 20 hours. The priority procedures embraced by this provision applied in the Senate only. Handling of such a joint resolution by the House was left to that Chamber's discretion.", "House Members attempted to use Section 5(c) to obtain a withdrawal of forces from Somalia. On October 22, 1993, Representative Benjamin Gilman introduced H.Con.Res. 170 , pursuant to Section 5(c) of the War Powers Resolution, directing the President to remove U.S. Armed Forces from Somalia by January 31, 1994. Using the expedited procedures called for in Section 5(c), the Foreign Affairs Committee amended the date of withdrawal to March 31, 1994, (the date the President had already agreed to withdraw the forces), and the House adopted H.Con.Res. 170 . The Foreign Affairs Committee reported:", "Despite such genuine constitutionality questions, the committee acted in accordance with the expedited procedures in section 7. The committee action was premised on a determination that neither individual Members of Congress nor Committees of Congress should make unilateral judgments about the constitutionality of provisions of law.", "Despite the use of the phrase \"directs the President,\" the sponsor of the resolution and Speaker of the House Thomas Foley expressed the view that because of the Chadha decision, the resolution would be nonbinding. The March 31, 1994, withdrawal date was later enacted as Section 8151 of P.L. 103-139 , signed November 11, 1993."], "subsections": []}, {"section_title": "Automatic Withdrawal Provision", "paragraphs": ["The automatic withdrawal provision has become perhaps the most controversial provision of the War Powers Resolution. Section 5(b) requires the President to withdraw U.S. forces from hostilities within 60-90 days after a report is submitted or required to be submitted under Section 4(a)(1). The triggering of the time limit has been a major factor in the reluctance of Presidents to report, or Congress to insist upon a report, under Section 4(a)(1).", "Drafters of the War Powers Resolution included a time limit to provide some teeth for Congress, in the event a President assumed a power to act from provisions of resolutions, treaties, or the Constitution which did not constitute an explicit authorization. The Senate report called the time limit \"the heart and core\" of the bill that \"represents, in an historic sense, a restoration of the constitutional balance which has been distorted by practice in our history and, climatically, in recent decades.\" The House report emphasized that the Resolution did not grant the President any new authority or any freedom of action during the time limits that he did not already have.", "Administration officials have objected that the provision would require the withdrawal of U.S. forces simply because of congressional inaction during an arbitrary period. Since the resolution recognizes that the President has independent authority to use armed forces in certain circumstances, they state, \"on what basis can Congress seek to terminate such independent authority by the mere passage of time?\" In addition, they argue, the imposition of a deadline interferes with successful action, signals a divided nation and lack of resolve, gives the enemy a basis for hoping that the President will be forced by domestic opponents to stop an action, and increases risk to U.S. forces in the field. This issue has not been dealt with by the courts."], "subsections": []}]}, {"section_title": "Major Cases and Issues Prior to the Persian Gulf War", "paragraphs": ["Perceptions of the War Powers Resolution tended to be set during the Cold War. During the 1970s the issues revolved largely around the adequacy of consultation. The 1980s raised more serious issues of presidential compliance and congressional willingness to use the War Powers Resolution to restrain presidential action. With regard to Lebanon in 1983, Congress itself invoked the War Powers Resolution, but in the 1987-1988 Persian Gulf tanker war Congress chose not to do so. Following is a summary of major U.S. military actions and the issues they raised relating to the War Powers Resolution from its enactment in 1973 to August 1990."], "subsections": [{"section_title": "Vietnam Evacuations and Mayaguez: What Is Consultation?", "paragraphs": ["As the Vietnam War ended, on three occasions, in April 1975, President Ford used U.S. forces to help evacuate American citizens and foreign nationals. In addition, in May 1975 President Ford ordered the retaking of a U.S. merchant vessel, the SS Mayaguez which had been seized by Cambodian naval patrol vessels. All four actions were reported to Congress citing the War Powers Resolution. The report on the Mayaguez recapture was the only War Powers report to date to specifically cite Section 4(a)(1), but the question of the time limit was moot because the action was over by the time the report was filed.", "Among the problems revealed by these first four cases were differences of opinion between the two branches on the meaning of consultation. The Ford Administration held that it had met the consultation requirement because the President had directed that congressional leaders be notified prior to the actual commencement of the introduction of armed forces. The prevailing congressional view was that consultation meant that the President seek congressional opinion, and take it into account, prior to making a decision to commit armed forces."], "subsections": []}, {"section_title": "Iran Hostage Rescue Attempt: Is Consultation Always Necessary and Possible?", "paragraphs": ["After an unsuccessful attempt on April 24, 1980, to rescue American hostages being held in Iran, President Carter submitted a report to Congress to meet the requirements of the War Powers Resolution, but he did not consult in advance. The Administration took the position that consultation was not required because the mission was a rescue attempt, not an act of force or aggression against Iran. In addition, the Administration contended that consultation was not possible or required because the mission depended upon total surprise.", "Some Members of Congress complained about the lack of consultation, especially because legislative-executive meetings had been going on since the Iranian crisis had begun the previous year. Just before the rescue attempt, the Senate Foreign Relations Committee had sent a letter to Secretary of State Cyrus Vance requesting formal consultations under the War Powers Resolution. Moreover, shortly before the rescue attempt, the President outlined plans for a rescue attempt to Senate Majority Leader Robert Byrd but did not say it had begun. Senate Foreign Relations Committee Chairman Frank Church stressed as guidelines for the future: (1) consultation required giving Congress an opportunity to participate in the decisionmaking process, not just informing Congress that an operation was underway; and (2) the judgment could not be made unilaterally but should be made by the President and Congress."], "subsections": []}, {"section_title": "El Salvador: When Are Military Advisers in Imminent Hostilities?", "paragraphs": ["One of the first cases to generate substantial controversy because it was never reported under the War Powers Resolution was the dispatch of U.S. military advisers to El Salvador. At the end of February 1981, the Department of State announced the dispatch of 20 additional military advisers to El Salvador to aid its government against guerilla warfare. There were already 19 military advisers in El Salvador sent by the Carter Administration. The Reagan Administration said the insurgents were organized and armed by Soviet bloc countries, particularly Cuba. By March 14, the Administration had authorized a total of 54 advisers, including experts in combat training.", "The President did not report the situation under the War Powers Resolution. A State Department memorandum said a report was not required because the U.S. personnel were not being introduced into hostilities or situations of imminent hostilities. The memorandum asserted that if a change in circumstances occurred that raised the prospect of imminent hostilities, the Resolution would be complied with. A justification for not reporting under Section 4(a)(2) was that the military personnel being introduced were not equipped for combat. They would, it was maintained, carry only personal side arms which they were authorized to use only in their own defense or the defense of other Americans.", "The State Department held that Section 8(c) of the War Powers Resolution was not intended to require a report when U.S. military personnel might be involved in training foreign military personnel, if there were no imminent involvement of U.S. personnel in hostilities. In the case of El Salvador, the memorandum said, U.S. military personnel \"will not act as combat advisors, and will not accompany Salvadoran forces in combat, on operational patrols, or in any other situation where combat is likely.\"", "On May 1, 1981, 11 Members of Congress challenged the President's action by filing suit on grounds that he had violated the Constitution and the War Powers Resolution by sending the advisers to El Salvador. Eventually there were 29 co-plaintiffs, but by June 18, 1981, an equal number of Members (13 Senators and 16 Representatives) filed a motion to intervene in the suit, contending that a number of legislative measures were then pending before Congress and that Congress had ample opportunity to vote to end military assistance to El Salvador if it wished.", "On October 4, 1982, U.S. District Court Judge Joyce Hens Green dismissed the suit. She ruled that Congress, not the court, must resolve the question of whether the U.S. forces in El Salvador were involved in a hostile or potentially hostile situation. While there might be situations in which a court could conclude that U.S. forces were involved in hostilities, she ruled, the \"subtleties of fact-finding in this situation should be left to the political branches.\" She noted that Congress had taken no action to show it believed the President's decision was subject to the War Powers Resolution. On November 18, 1983, a federal circuit court affirmed the dismissal and on June 8, 1984, the Supreme Court declined consideration of an appeal of that decision.", "As the involvement continued and casualties occurred among the U.S. military advisers, various legislative proposals relating to the War Powers Resolution and El Salvador were introduced. Some proposals required a specific authorization prior to the introduction of U.S. forces into hostilities or combat in El Salvador. Other proposals declared that the commitment of U.S. Armed Forces in El Salvador necessitated compliance with Section 4(a) of the War Powers Resolution, requiring the President to submit a report.", "Neither approach was adopted in legislation, but the Senate Foreign Relations Committee reported that the President had \"a clear obligation under the War Powers Resolution to consult with Congress prior to any future decision to commit combat forces to El Salvador.\" On July 26, 1983, the House rejected an amendment to the Defense Authorization bill ( H.R. 2969 ) to limit the number of active duty military advisers in El Salvador to 55, unless the President reported any increase above that level under Section 4(a)(1) of the War Powers Resolution. Nevertheless, the Administration in practice kept the number of trainers at 55."], "subsections": []}, {"section_title": "Honduras: When Are Military Exercises More than Training?", "paragraphs": ["Military exercises in Honduras in 1983 and subsequent years raised the question of when military exercises should be reported under the War Powers Resolution. Section 4(a)(2) requires the reporting of introduction of troops equipped for combat, but exempts deployments which relate solely to training.", "On July 27, 1983, President Reagan announced \"joint training exercises\" planned for Central America and the Caribbean. The first contingent of U.S. troops landed in Honduras on August 8, 1983, and the series of ground and ocean exercises continued for several years, involving thousands of ground troops plus warships and fighter planes.", "The President did not report the exercises under the War Powers Resolution. He characterized the maneuvers as routine and said the United States had been regularly conducting joint exercises with Latin American countries since 1965. Some Members of Congress, on the other hand, contended that the exercises were part of a policy to support the rebels or \"contras\" fighting the Sandinista Government of Nicaragua, threatening that government, and increased the possibility of U.S. military involvement in hostilities in Central America.", "Several Members of Congress called for reporting the actions under the War Powers Resolution, but some sought other vehicles for congressional control. In 1982, the Boland amendment to the Defense Appropriations Act had already prohibited use of funds to overthrow the Government of Nicaragua or provoke a military exchange between Nicaragua or Honduras. Variations of this amendment followed in subsequent years. After press reports in 1985 that the option of invading Nicaragua was being discussed, the Defense Authorization Act for Fiscal Year 1986 stated the sense of Congress that U.S. Armed Forces should not be introduced into or over Nicaragua for combat. In 1986, after U.S. helicopters ferried Honduran troops to the Nicaraguan border area, Congress prohibited U.S. personnel from participating in assistance within land areas of Honduras and Costa Rica within 120 miles of the Nicaraguan border, or from entering Nicaragua to provide military advice or support to paramilitary groups operating in that country. Gradually the issue died with peace agreements in the region and the electoral defeat of the Sandinista regime in Nicaragua in 1990."], "subsections": []}, {"section_title": "Lebanon: How Can Congress Invoke the War Powers Resolution?", "paragraphs": ["The War Powers Resolution faced a major test when Marines sent to participate in a Multinational Force in Lebanon in 1982 became the targets of hostile fire in August 1983. During this period President Reagan filed three reports under the War Powers Resolution, but he did not report under Section 4(a)(1) that the forces were being introduced into hostilities or imminent hostilities, thus triggering the 60-90 day time limit.", "On September 29, 1983, Congress passed the Multinational Force in Lebanon Resolution determining that the requirements of Section 4(a)(1) of the War Powers Resolution became operative on August 29, 1983. In the same resolution, Congress authorized the continued participation of the Marines in the Multinational Force for 18 months. The resolution was a compromise between Congress and the President. Congress obtained the President's signature on legislation invoking the War Powers Resolution for the first time, but the price for this concession was a congressional authorization for the U.S. troops to remain in Lebanon for 18 months.", "The events began on July 6, 1982, when President Reagan announced he would send a small contingent of U.S. troops to a multinational force for temporary peacekeeping in Lebanon. Chairman of the House Foreign Affairs Committee Clement Zablocki wrote President Reagan that if such a force were sent, the United States would be introducing forces into imminent hostilities and a report under Section 4(a)(1) would be required. When the forces began to land on August 25, President Reagan reported but did not cite Section 4(a)(1) and said the agreement with Lebanon ruled out any combat responsibilities. After overseeing the departure of the Palestine Liberation Organization force, the Marines in the first Multinational Force left Lebanon on September 10, 1982.", "The second dispatch of Marines to Lebanon began on September 20, 1982. President Reagan announced that the United States, France, and Italy had agreed to form a new multinational force to return to Lebanon for a limited period of time to help maintain order until the lawful authorities in Lebanon could discharge those duties. The action followed three events that took place after the withdrawal of the first group of Marines: the assassination of Lebanon President-elect Bashir Gemayel, the entry of Israeli forces into West Beirut, and the massacre of Palestinian civilians by Lebanese Christian militiamen.", "On September 29, 1982, President Reagan submitted a report that 1,200 Marines had begun to arrive in Beirut, but again he did not cite Section 4(a)(1), saying instead that the American force would not engage in combat. As a result of incidents in which Marines were killed or wounded, there was again controversy in Congress on whether the President's report should have been filed under Section 4(a)(1). In mid-1983 Congress passed the Lebanon Emergency Assistance Act of 1983 requiring statutory authorization for any substantial expansion in the number or role of U.S. Armed Forces in Lebanon. It also included Section 4(b) that stated:", "Nothing in this section is intended to modify, limit, or suspend any of the standards and procedures prescribed by the War Powers Resolution of 1983.", "President Reagan reported on the Lebanon situation for the third time on August 30, 1983, still not citing Section 4(a)(1), after fighting broke out between various factions in Lebanon and two Marines were killed.", "The level of fighting heightened, and as the Marine casualties increased and the action enlarged, there were more calls in Congress for invocation of the War Powers Resolution. Several Members of Congress said the situation had changed since the President's first report and introduced legislation that took various approaches. Senator Charles Mathias introduced S.J.Res. 159 stating that the time limit specified in the War Powers Resolution had begun on August 31, 1983, and authorizing the forces to remain in Lebanon for a period of 120 days after the expiration of the 60-day period. Representative Thomas Downey introduced H.J.Res. 348 directing the President to report under Section 4(a)(1) of the War Powers Resolution. Senator Robert Byrd introduced S.J.Res. 163 finding that Section 4(a)(1) of the war powers resolution applied to the present circumstances in Lebanon. The House Appropriations Committee approved an amendment to the continuing resolution for FY1984 ( H.J.Res. 367 ), sponsored by Representative Clarence Long, providing that after 60 days, funds could not be \"obligated or expended for peacekeeping activities in Lebanon by United States Armed Forces,\" unless the President had submitted a report under Section 4(a)(1) of the War Powers Resolution. A similar amendment was later rejected by the full body, but it reminded the Administration of possible congressional actions.", "On September 20, congressional leaders and President Reagan agreed on a compromise resolution invoking Section 4(a)(1) and authorizing the Marines to remain for 18 months. The resolution became the first legislation to be handled under the expedited procedures of the War Powers Resolution. On September 28, the House passed H.J.Res. 364 by a vote of 270 to 161. After 3 days of debate, on September 29, the Senate passed S.J.Res. 159 by a vote of 54 to 46. The House accepted the Senate bill by a vote of 253 to 156. As passed, the resolution contained four occurrences that would terminate the authorization before 18 months: (1) the withdrawal of all foreign forces from Lebanon, unless the President certified continued U.S. participation was required to accomplish specified purposes; (2) the assumption by the United Nations or the Government of Lebanon of the responsibilities of the Multinational Force; (3) the implementation of other effective security arrangements; or (4) the withdrawal of all other countries from participation in the Multinational Force.", "Shortly afterward, on October 23, 1983, 241 U.S. Marines in Lebanon were killed by a suicide truck bombing, bringing new questions in Congress and U.S. public opinion about U.S. participation. On February 7, 1984, President Reagan announced the Marines would be redeployed and on March 30, 1984, reported to Congress that U.S. participation in the Multinational Force in Lebanon had ended."], "subsections": []}, {"section_title": "Grenada: Do the Expedited Procedures Work?", "paragraphs": ["On October 25, 1983, President Reagan reported to Congress \"consistent with\" the War Powers Resolution that he had ordered a landing of approximately 1,900 U.S. Army and Marine Corps personnel in Grenada. He said that the action was in response to a request from the Organization of Eastern Caribbean States which had formed a collective security force to restore order in Grenada, where anarchic conditions had developed, and to protect the lives of U.S. citizens.", "Many Members of Congress contended that the President should have cited Section 4(a)(1) of the War Powers Resolution, which would have triggered the 60-90 day time limitation. On November 1, 1983, the House supported this interpretation when it adopted, by a vote of 403-23, H.J.Res. 402 declaring that the requirements of Section 4(a)(1) had become operative on October 25. The Senate did not act on this measure and a conference was not held. The Senate had adopted a similar measure on October 28 by a vote of 64 to 20, but on November 17 the provision was deleted in the conference report on the debt limit bill to which it was attached. Thus both Houses had voted to invoke Section 4(a)(1), but the legislation was not completed.", "On November 17, White House spokesman Larry Speakes said the Administration had indicated that there was no need for action as the combat troops would be out within the 60-90 day time period. Speaker Thomas O'Neill took the position that, whether or not Congress passed specific legislation, the War Powers Resolution had become operative on October 25. By December 15, 1983, all U.S. combat troops had been removed from Grenada.", "Eleven Members of Congress filed a suit challenging the constitutionality of President Reagan's invasion of Grenada. A district judge held that courts should not decide such cases unless the entire Congress used the institutional remedies available to it. An appellate court subsequently held that the issue was moot because the invasion had been ended."], "subsections": []}, {"section_title": "Libya: Should Congress Help Decide on Raids to Undertake in Response to International Terrorism?", "paragraphs": ["The use of U.S. forces against Libya in 1986 focused attention on the application of the War Powers Resolution to use of military force against international terrorism.", "Tensions between the United States and Libya under the leadership of Col. Muammar Qadhafi had been mounting for several years, particularly after terrorist incidents at the Rome and Vienna airports on December 27, 1985. On January 7, 1986, President Reagan said that the Rome and Vienna incidents were the latest in a series of brutal terrorist acts committed with Qadhafi's backing that constituted armed aggression against the United States.", "The War Powers issue was first raised on March 24, 1986, when Libyan forces fired missiles at U.S. aircraft operating in the Gulf of Sidra. In response, the United States fired missiles at Libyan vessels and at Sirte, the Libyan missile site involved. The U.S. presence in the Gulf of Sidra, an area claimed by Libya, was justified as an exercise to maintain freedom of the seas, but it was widely considered a response to terrorist activities.", "Subsequently, on April 5, 1986, a terrorist bombing of a discotheque in West Berlin occurred and an American soldier was killed. On April 14 President Reagan announced there was irrefutable evidence that Libya had been responsible, and U.S. Air Force planes had conducted bombing strikes on headquarters, terrorist facilities, and military installations in Libya in response.", "The President reported both cases to Congress although the report on the bombing did not cite Section 4(a)(1) and the Gulf of Sidra report did not mention the War Powers Resolution at all. Since the actions were short lived, there was no issue of force withdrawal, but several Members introduced bills to amend the War Powers Resolution. One bill called for improving consultation by establishing a special consultative group in Congress. Others called for strengthening the President's hand in combating terrorism by authorizing the President, notwithstanding any other provision of law, to use all measures he deems necessary to protect U.S. persons against terrorist threats."], "subsections": []}, {"section_title": "Persian Gulf, 1987: When Are Hostilities Imminent?", "paragraphs": ["The War Powers Resolution became an issue in activities in the Persian Gulf after an Iraqi aircraft fired a missile on the USS Stark on May 17, 1987, killing 37 U.S. sailors. The attack broached the question of whether the Iran-Iraq war had made the Persian Gulf an area of hostilities or imminent hostilities for U.S. forces. Shortly afterwards, the U.S. adoption of a policy of reflagging and providing a naval escort of Kuwaiti oil tankers through the Persian Gulf raised full force the question of whether U.S. policy was risking involvement in war without congressional authorization. During 1987 U.S. Naval forces operating in the Gulf increased to 11 major warships, 6 minesweepers, and over a dozen small patrol boats, and a battleship-led formation was sent to the Northern Arabian Sea and Indian Ocean to augment an aircraft carrier battle group already there.", "For several months the President did not report any of the deployments or military incidents under the War Powers Resolution, although on May 20, 1987, after the Stark incident, Secretary of State Shultz submitted a report similar to previous ones consistent with War Powers provisions, but not mentioning the Resolution. No reports were submitted after the USS Bridgeton struck a mine on July 24, 1987, or the U.S.-chartered Texaco-Caribbean struck a mine on August 10 and a U.S. F-14 fighter plane fired two missiles at an Iranian aircraft perceived as threatening.", "Later, however, after various military incidents on September 23, 1987, and growing congressional concern, the President began submitting reports \"consistent with\" the War Powers Resolution and on July 13, 1988, submitted the sixth report relating to the Persian Gulf. None of the reports were submitted under Section 4(a)(1) or acknowledged that U.S. forces had been introduced into hostilities or imminent hostilities. The Reagan administration contended that the military incidents in the Persian Gulf, or isolated incidents involving defensive reactions, did not add up to hostilities or imminent hostilities as envisaged in the War Powers Resolution. It held that \"imminent danger\" pay which was announced for military personnel in the Persian Gulf on August 27, 1987, did not trigger Section 4(a)(1). Standards for danger pay, namely, \"subject to the threat of physical harm or danger on the basis of civil insurrection, civil war, terrorism, or wartime conditions,\" were broader than for hostilities of the War Powers Resolution, and had been drafted to be available in situations to which the War Powers Resolution did not apply.", "Some Members of Congress contended that if the President did not report under Section 4(a)(1), Congress itself should declare such a report should have been submitted, as it had in the Multinational Force in Lebanon Resolution. Several resolutions to this effect were introduced, some authorizing the forces to remain, but none were passed. The decisive votes on the subject took place in the Senate. On September 18, 1987, the Senate voted 50-41 to table an amendment to the Defense authorization bill ( S. 1174 ) to apply the provisions of the War Powers Resolution. The Senate also sustained points of order against consideration of S.J.Res. 217 , which would have invoked the War Powers Resolution, on December 4, 1987, and a similar bill the following year, S.J.Res. 305 , on June 6, 1988.", "The Senate approach was to use legislation to assure a congressional role in the Persian Gulf policy without invoking the War Powers Resolution. Early in the situation, both Chambers passed measures requiring the Secretary of Defense to submit a report to Congress prior to the implementation of any agreement between the United States and Kuwait for U.S. military protection of Kuwaiti shipping, and such a report was submitted June 15, 1987. Later, the Senate passed a measure that called for a comprehensive report by the President within 30 days and provided expedited procedures for a joint resolution on the subject after an additional 30 days. The House did not take action on the bill.", "As in the case of El Salvador, some Members took the War Powers issue to court. On August 7, 1987, Representative Lowry and 110 other Members of Congress filed suit in the U.S. District Court for the District of Columbia, asking the court to declare that a report was required under Section 4(a)(1). On December 18, 1987, the court dismissed the suit, holding it was a nonjusticiable political question, and that the plaintiffs' dispute was \"primarily with fellow legislators.\"", "Compliance with the consultation requirement was also an issue. The Administration developed its plan for reflagging and offered it to Kuwait on March 7, 1987, prior to discussing the plan with Members of Congress. A June 15, 1987, report to Congress by the Secretary of Defense stated on the reflagging policy, \"As soon as Kuwait indicated its acceptance of our offer, we began consultations with Congress which are still ongoing.\" This was too late for congressional views to be weighed in on the initial decision, after which it became more difficult to alter the policy. Subsequently, however, considerable consultation developed and the President met with various congressional leaders prior to some actions such as the retaliatory actions in April 1988 against an Iranian oil platform involved in mine-laying.", "With recurring military incidents, some Members of Congress took the position that the War Powers Resolution was not being complied with, unless the President reported under Section 4(a)(1) or Congress itself voted to invoke the Resolution. Other Members contended the Resolution was working by serving as a restraint on the President, who was now submitting reports and consulting with Congress. Still other Members suggested the Persian Gulf situation was demonstrating the need to amend the War Powers Resolution.", "As a result of the Persian Gulf situation, in the summer of 1988 both the House Foreign Affairs Committee and the Senate Foreign Relations Committee, which established a Special Subcommittee on War Powers, undertook extensive assessments of the War Powers Resolution. Interest in the issue waned after a cease-fire between Iran and Iraq began on August 20, 1988, and the United States reduced its forces in the Persian Gulf area."], "subsections": []}, {"section_title": "Invasion of Panama: Why Was the War Powers Issue Not Raised?", "paragraphs": ["On December 20, 1989, President George H.W. Bush ordered 14,000 U.S. military forces to Panama for combat, in addition to 13,000 already present. On December 21, he reported to Congress under the War Powers Resolution but without citing Section 4(a)(1). His stated objectives were to protect the 35,000 American citizens in Panama, restore the democratic process, preserve the integrity of the Panama Canal treaties, and apprehend General Manuel Noriega, who had been accused of massive electoral fraud in the Panamanian elections and indicted on drug trafficking charges by two U.S. federal courts. The operation proceeded swiftly and General Noriega surrendered to U.S. military authorities on January 3. President Bush said the objectives had been met, and U.S. forces were gradually withdrawn. By February 13, all combat forces deployed for the invasion had been withdrawn, leaving the strength just under the 13,597 forces stationed in Panama prior to the invasion.", "The President did not consult with congressional leaders before his decision, although he did notify them a few hours in advance of the invasion. Some Members of Congress had been discussing the problem of General Noriega for some time. Before Congress adjourned, it had called for the President to intensify unilateral, bilateral, and multilateral measures and consult with other nations on ways to coordinate efforts to remove General Noriega from power. The Senate had adopted an amendment supporting the President's use of appropriate diplomatic, economic, and military options \"to restore constitutional government to Panama and to remove General Noriega from his illegal control of the Republic of Panama,\" but had defeated an amendment authorizing the President to use U.S. military force to secure the removal of General Noriega \"notwithstanding any other provision of law.\"", "The Panama action did not raise much discussion in Congress about the War Powers Resolution. This was in part because Congress was out of session. The first session of the 101 st Congress had ended on November 22, 1989, and the second session did not begin until January 23, 1990, when the operation was essentially over and it appeared likely the additional combat forces would be out of Panama within 60 days of their deployment. The President's action in Panama was popular in American public opinion and supported by most Members of Congress because of the actions of General Noriega. After it was over, on February 7, 1990, the House Passed H.Con.Res. 262 which stated that the President had acted \"decisively and appropriately in ordering United States forces to intervene in Panama.\""], "subsections": []}]}, {"section_title": "Major Cases and Issues in the Post-Cold War World", "paragraphs": ["After the end of the Cold War in 1990, the United States began to move away from unilateral military actions toward actions authorized or supported by the United Nations (U.N.). Under the auspices of U.N. Security Council resolutions, U.S. forces were deployed in Kuwait and Iraq, Somalia, former Yugoslavia/Bosnia/Kosovo, and Haiti. This raised the new issue of whether the War Powers Resolution applied to U.S. participation in U.N. military actions. It was not a problem during the Cold War because the agreement among the five permanent members required for Security Council actions seldom existed. An exception, the Korean War, occurred before the War Powers Resolution was enacted.", "The more basic issue\u2014under what circumstances congressional authorization is required for U.S. participation in U.N. military operations\u2014is an unfinished debate remaining from 1945. Whether congressional authorization is required depends on the types of U.N. action and is governed by the U.N. Participation Act (P.L. 79-264, as amended), as well as by the War Powers Resolution and war powers under the Constitution. Appropriations action by Congress also may be determinative as a practical matter.", "For armed actions under Articles 42 and 43 of the United Nations Charter, Section 6 of the U.N. Participation Act authorizes the President to negotiate special agreements with the Security Council \" which shall be subject to the approval of the Congress by appropriate Act or joint resolution ,\" providing for the numbers and types of armed forces and facilities to be made available to the Security Council. Once the agreements have been concluded, further congressional authorization is not necessary, but no such agreements have been concluded.", "Section 7 of the United Nations Participation Act, added in 1949 by P.L. 81-341, authorizes the detail of up to 1,000 personnel to serve in any noncombatant capacity for certain U.N. peaceful settlement activities. The United States has provided personnel to several U.N. peacekeeping missions, such as observers to the U.N. Truce Supervision Organization in Palestine since 1948, that appear to fall within the authorization in Section 7 of the Participation Act. Controversy has arisen when larger numbers of forces have been deployed or when it appears the forces might be serving as combatants.", "The War Powers Resolution neither excludes United Nations actions from its provisions nor makes any special procedures for them. Section 8(a)(2) states that authority to introduce U. S. Armed Forces into hostilities shall not be inferred from any treaty unless it is implemented by legislation specifically authorizing the introduction and stating that it is intended to constitute specific statutory authorization within the meaning of the War Powers resolution. One purpose of this provision was to ensure that both Houses of Congress be affirmatively involved in any U.S. decision to engage in hostilities pursuant to a treaty, since only the Senate approved a treaty. ", "From 1990 through 1999, Congress primarily dealt with the issue on a case-by-case basis, but Members also enacted some measures seeking more control over U.S. participation in future peacekeeping actions wherever they might occur. The Defense Appropriations Act for FY1994 stated the sense of Congress that funds should not be expended for U.S. Armed Forces serving under U.N. Security Council actions unless the President consults with Congress at least 15 days prior to deployment and not later than 48 hours after such deployment, except for humanitarian operations. The Defense Authorization Act for FY1994 required a report to Congress by April 1, 1994, including discussion of the requirement of congressional approval for participation of U.S. Armed Forces in multinational peacekeeping missions, proposals to conclude military agreements with the U.N. Security Council under Article 43 of the U.N. Charter, and the applicability of the War Powers Resolution and the U.N. Participation Act. In 1994 and 1995, Congress attempted to gain a greater role in U.N. and other peacekeeping operations through authorization and appropriation legislation. A major element of the House Republicans' Contract with America, H.R. 7 , would have placed notable constraints on presidential authority to commit U.S. forces to international peacekeeping operations. Senator Dole's S. 5 , The Peace Powers Act, introduced in January 1995, would have also placed greater legislative controls on such operations. General and specific funding restrictions and presidential reporting requirements were passed for peacekeeping operations underway or in prospect. Some of these legislative enactments led to presidential vetoes. These representative legislative actions are reviewed below as they apply to given cases."], "subsections": [{"section_title": "Persian Gulf War, 1991: How Does the War Powers Resolution Relate to the United Nations and a Real War?", "paragraphs": ["On August 2, 1990, Iraqi troops under the direction of President Saddam Hussein invaded Kuwait, seized its oil fields, installed a new government in Kuwait City, and moved on toward the border with Saudi Arabia. Action to repel the invasion led to the largest war in which the United States had been involved since the passage of the War Powers Resolution. Throughout the effort to repel the Iraqi invasion, President Bush worked in tandem with the United Nations, organizing and obtaining international support and authorization for multilateral military action against Iraq.", "A week after the invasion, on August 9, President George H.W. Bush reported to Congress \"consistent with the War Powers Resolution\" that he had deployed U.S. Armed Forces to the region prepared to take action with others to deter Iraqi aggression. He did not cite Section 4(a)(1) and specifically stated, \"I do not believe involvement in hostilities is imminent.\"", "The President did not consult with congressional leaders prior to the deployment, but both houses of Congress had adopted legislation supporting efforts to end the Iraqi occupation of Kuwait, particularly using economic sanctions and multilateral efforts. On August 2, shortly before its recess, the Senate by a vote of 97-0 adopted S.Res. 318 urging the President \"to act immediately, using unilateral and multilateral measures, to seek the full and unconditional withdrawal of all Iraqi forces from Kuwaiti territory\" and to work for collective international sanctions against Iraq including, if economic sanctions prove inadequate, \"additional multilateral actions, under Article 42 of the United Nations Charter, involving air, sea, and land forces as may be needed....\" Senate Foreign Relations Committee Chairman Pell stressed, however, that the measure did not authorize unilateral U.S. military actions. Also on August 2, the House passed H.R. 5431 condemning the Iraqi invasion and calling for an economic embargo against Iraq.", "The United Nations imposed economic sanctions against Iraq on August 7, and the United States and United Kingdom organized an international naval interdiction effort. Later, on August 25, the U.N. Security Council authorized \"such measures as may be necessary\" to halt shipping and verify cargoes that might be going to Iraq.", "Both Houses adopted measures supporting the deployment, but neither measure was enacted. On October 1, 1990, the House passed H.J.Res. 658 supporting the action and citing the War Powers Resolution without stating that Section 4(a)(1) had become operative. The resolution quoted the President's statement that involvement in hostilities was not imminent. Representative Fascell stated that H.J.Res. 658 was not to be interpreted as a Gulf of Tonkin resolution that granted the President open-ended authority, and that it made clear that \"a congressional decision on the issue of war or peace would have to be made through joint consultation.\" The Senate did not act on H.J.Res. 658 .", "On October 2, 1990, the Senate by a vote of 96-3 adopted S.Con.Res. 147 , stating that \"Congress supports continued action by the President in accordance with the decisions of the United Nations Security Council and in accordance with United States constitutional and statutory processes, including the authorization and appropriation of funds by the Congress, to deter Iraqi aggression and to protect American lives and vital interest in the region.\" As in the House, Senate leaders emphasized that the resolution was not to be interpreted as an open-ended resolution similar to the Gulf of Tonkin resolution. The resolution made no mention of the War Powers Resolution. The House did not act on S.Con.Res. 147 . Congress also supported the action by appropriating funds for the preparatory operation, called Operation Desert Shield, and later for war activities called Operation Desert Storm.", "Some Members introduced legislation to establish a special consultation group, but the Administration objected to a formally established group. On October 23, 1990, Senate Majority Leader Mitchell announced that he and Speaker Foley had designated Members of the joint bipartisan leadership and committees of jurisdiction to make themselves available as a group for consultation on developments in the Persian Gulf. By this time U.S. land, naval, and air forces numbering more than 200,000 had been deployed.", "After the 101 st Congress had adjourned, President Bush on November 8, 1990, ordered an estimated additional 150,000 troops to the Gulf. He incurred considerable criticism because he had not informed the consultation group of the buildup although he had met with them on October 30. On November 16, President Bush sent a second report to Congress describing the continuing and increasing deployment of forces to the region. He stated that his opinion that hostilities were not imminent had not changed. The President wrote, \"The deployment will ensure that the coalition has an adequate offensive military option should that be necessary to achieve our common goals.\" By the end of the year, approximately 350,000 U.S. forces had been deployed to the area.", "As the prospect of a war without congressional authorization increased, on November 20, 1990, Representative Ron Dellums and 44 other Democratic Members of Congress sought a judicial order enjoining the President from offensive military operations in connection with Operation Desert Shield unless he consulted with and obtained an authorization from Congress. On November 26, 11 prominent law professors filed a brief in favor of such a judicial action, arguing that the Constitution clearly vested Congress with the authority to declare war and that federal judges should not use the political questions doctrine to avoid ruling on the issue. The American Civil Liberties Union also filed a memorandum in favor of the plaintiffs. On December 13, Judge Harold Greene of the federal district court in Washington denied the injunction, holding that the controversy was not ripe for judicial resolution because a majority of Congress had not sought relief and the executive branch had not shown sufficient commitment to a definitive course of action. However, throughout his opinion Judge Greene rejected the Administration's arguments for full presidential war powers.", "On November 29, 1990, U.N. Security Council Resolution 678 authorized member states to use \"all necessary means\" to implement the Council's resolutions and restore peace and security in the area, unless Iraq complied with the U.N. resolutions by January 15, 1991. As the deadline for Iraqi withdrawal from Kuwait neared, President Bush indicated that if the Iraqi forces did not withdraw from Kuwait, he was prepared to use force to implement the U.N. Security Council resolutions. Administration officials contended that the President did not need any additional congressional authorization for this purpose.", "After the 102 nd Congress convened, on January 4, 1991, House and Senate leaders announced they would debate U.S. policy beginning January 10. A week before the January 15 deadline, on January 8, 1991, President Bush, in a letter to the congressional leaders, requested a congressional resolution supporting the use of all necessary means to implement U.N. Security Council Resolution 678. He stated that he was \"determined to do whatever is necessary to protect America's security\" and that he could \"think of no better way than for Congress to express its support for the President at this critical time.\" It is noteworthy that the President's request for a resolution was a request for congressional \"support\" for his undertaking in the Persian Gulf, not for \"authority\" to engage in the military operation. In a press conference on January 9, 1991, President Bush reinforced this distinction in response to questions about the use of force resolution being debated in Congress. He was asked whether he thought he needed the resolution, and if he lost on it would he feel bound by that decision. President Bush in response stated: \"I don't think I need it.... I feel that I have the authority to fully implement the United Nations resolutions.\" He added that he felt that he had \"the constitutional authority\u2014many attorneys having so advised me.\"", "On January 12, 1991, both houses passed the \"Authorization for Use of Military Force Against Iraq Resolution\" ( P.L. 102-1 ). Section 2(a) authorized the President to use U.S. Armed Forces pursuant to U.N. Security Council Resolution 678 to achieve implementation of the earlier Security Council resolutions. Section 2(b) required that first the President would have to report that the United States had used all appropriate diplomatic and other peaceful means to obtain compliance by Iraq with the Security Council resolution and that those efforts had not been successful. Section 2(c) stated that it was intended to constitute specific statutory authorization within the meaning of Section 5(b) of the War Powers Resolution. Section 3 required the President to report every 60 days on efforts to obtain compliance of Iraq with the U.N. Security Council resolution.", "In his statement made after signing H.J.Res. 77 into law, President Bush said the following: \"As I made clear to congressional leaders at the outset, my request for congressional support did not, and my signing this resolution does not, constitute any change in the long-standing positions of the executive branch on either the President's constitutional authority to use the Armed Forces to defend vital U.S. interests or the constitutionality of the War Powers Resolution.\" He added that he was pleased that \"differences on these issues between the President and many in the Congress have not prevented us from uniting in a common objective.\"", "On January 16, President Bush made the determination required by P.L. 102-1 that diplomatic means had not and would not compel Iraq to withdraw from Kuwait. On January 18, he reported to Congress \"consistent with the War Powers Resolution\" that he had directed U.S. forces to commence combat operations on January 16.", "After the beginning of the war many Members of Congress strongly supported the President as Commander in Chief in his conduct of the war. On March 19, 1991, President Bush reported to Congress that the military operations had been successful, Kuwait had been liberated, and combat operations had been suspended on February 28, 1991.", "Prior to passage of P.L. 102-1 , some observers questioned the effectiveness of the War Powers Resolution on grounds that the President had begun the action, deployed hundreds of thousands of troops without consultation of Congress, and was moving the Nation increasingly close to war without congressional authorization. After the passage of P.L. 102-1 and the war had begun, Chairman of the House Committee on Foreign Affairs Fascell took the position that \"the War Powers Resolution is alive and well\"; the President had submitted reports to Congress, and Congress, in P.L. 102-1 , had provided specific statutory authorization for the use of force. In his view, the strength and wisdom of the War Powers Resolution was that it established a process by which Congress could authorize the use of force in specific settings for limited purposes, short of a total state of war.", "The question is sometimes raised why Congress did not declare war against Iraq. Speaker Foley told the National Press Club on February 7, 1991, that \"The reason we did not declare a formal war was not because there is any difference I think in the action that was taken and in a formal declaration of war with respect to military operations, but because there is some question about whether we wish to excite or enact some of the domestic consequences of a formal declaration of war\u2014seizure of property, censorship, and so forth, which the President neither sought nor desired.\""], "subsections": []}, {"section_title": "Iraq-Post Gulf War: How Long Does an Authorization Last?", "paragraphs": ["After the end of Operation Desert Storm, U.S. military forces were used to deal with three continuing situations in Iraq. These activities raised the issue of how long a congressional authorization for the use of force lasts.", "The first situation resulted from the Iraqi government's repression of Kurdish and Shi'ite groups. U.N. Security Council Resolution 688 of April 5, 1991, condemned the repression of the Iraqi civilian population and appealed for contributions to humanitarian relief efforts. On May 17, 1991, President George H.W. Bush reported to Congress that the Iraqi repression of the Kurdish people had necessitated a limited introduction of U.S. forces into northern Iraq for emergency relief purposes. On July 16, 1991, he reported that U.S. forces had withdrawn from northern Iraq but that the U.S. remained prepared to take appropriate steps as the situation required and that, to this end, an appropriate level of forces would be maintained in the region for \"as long as required.\"", "A second situation stemmed from the cease-fire resolution, Security Council Resolution 687 of April 3, 1991, which called for Iraq to accept the destruction or removal of chemical and biological weapons and international control of its nuclear materials. On September 16, 1991, President Bush reported to Congress that Iraq continued to deny inspection teams access to weapons facilities and that this violated the requirements of Resolution 687, and the United States if necessary would take action to ensure Iraqi compliance with the Council's decisions. He reported similar noncooperation on January 14, 1992, and May 15, 1992.", "On July 16, 1992, President Bush reported particular concern about the refusal of Iraqi authorities to grant U.N. inspectors access to the Agricultural Ministry. The President consulted congressional leaders on July 27, and in early August the United States began a series of military exercises to take 5,000 U.S. troops to Kuwait. On September 16, 1992, the President reported, \"We will remain prepared to use all necessary means, in accordance with U.N. Security Council resolutions, to assist the United Nations in removing the threat posed by Iraq's chemical, biological, and nuclear weapons capability.\"", "The third situation was related to both of the earlier ones. On August 26, 1992, the United States, Britain, and France began a \"no-fly\" zone, banning Iraqi fixed wing and helicopter flights south of the 32 nd parallel and creating a limited security zone in the south, where Shi'ite groups were concentrated. After violations of the no-fly zones and various other actions by Iraq, on January 13, 1993, the Bush Administration announced that aircraft from the United States and coalition partners had attacked missile bases in southern Iraq and that the United States was deploying a battalion task force to Kuwait to underline the U.S. continuing commitment to Kuwait's independence. On January 19, 1993, President Bush reported to Congress that U.S. aircraft had shot down an Iraqi aircraft on December 27, 1992, and had undertaken further military actions on January 13, 17, and 18.", "President Clinton said on January 21, 1993, that the United States would adhere to the policy toward Iraq set by the Bush Administration. On January 22 and 23, April 9 and 18, June 19, and August 19, 1993, U.S. aircraft fired at targets in Iraq after pilots sensed Iraqi radar or anti-aircraft fire directed at them. On September 23, 1993, President Clinton reported that since the August 19 action, the Iraqi installation fired upon had not displayed hostile intentions.", "In a separate incident, on June 28, 1993, President Clinton reported to Congress \"consistent with the War Powers Resolution\" that on June 26 U.S. naval forces at his direction had launched a Tomahawk cruise missile strike on the Iraqi Intelligence Service's main command and control complex in Baghdad and that the military action was completed upon the impact of the missiles. He said the Iraqi Intelligence Service had planned the failed attempt to assassinate former President Bush during his visit to Kuwait in April 1993.", "The question was raised as to whether the Authorization for the Use of Force in Iraq ( P.L. 102-1 ) authorized military actions after the conclusion of the war. P.L. 102-1 authorized the President to use U.S. Armed Forces pursuant to U.N. Security Council Resolution 678 to achieve implementation of previous Security Council Resolutions relating to Iraq's invasion of Kuwait. The cease-fire resolution, Security Council Resolution 687, was adopted afterwards and therefore not included in Resolution 678.", "Congress endorsed the view that further specific authorization was not required for U.S. military action to maintain the cease-fire agreement. Specifically, Section 1095 of P.L. 102-190 stated the sense of Congress that it supported the use of all necessary means to achieve the goals of Security Council Resolution 687 as being consistent with the Authorization for Use of Military Force Against Iraq Resolution. Section 1096 supported the use of all necessary means to protect Iraq's Kurdish minority, consistent with relevant U.N. resolutions and authorities contained in P.L. 102-1 . The issue of congressional authorization was debated again in 1998. On March 31, 1998, the House passed a Supplemental Appropriations bill ( H.R. 3579 ) that would have banned the use of funds appropriated in it for the conduct of offensive operations against Iraq, unless such operations were specifically authorized by law. This provision was dropped in the conference with the Senate.", "A more broad-gauged approach to the issue of congressional authorization of military force was attempted in mid-1998. On June 24, 1998, the House passed H.R. 4103 , the Defense Department Appropriations bill for FY1999, with a provision by Representative David Skaggs that banned the use of funds appropriated or otherwise made available by this act \"to initiate or conduct offensive military operations by United States Armed Forces except in accordance with the war powers clause of the Constitution (Article 1, Section 8), which vests in Congress the power to declare and authorize war and to take certain specified, related actions.\" The Skaggs provision was stricken by the House-Senate conference committee on H.R. 4103 .", "As events developed, beginning in late 1998, and continuing into the period prior to the U.S. military invasion of Iraq in March 2003, the United States conducted a large number of ad-hoc air attacks against Iraqi ground installations and military targets in response to violations of the northern and southern \"no-fly zones\" by the Iraqis, and threatening actions taken against U.S. and coalition aircraft enforcing these \"no-fly\" sectors. Congressional authorization to continue these activities was not sought by the President, nor were these many incidents reported under the War Powers Resolution. The \"no-fly zones\" activities were terminated following the 2003 War with Iraq."], "subsections": []}, {"section_title": "Somalia: When Does Humanitarian Assistance Require Congressional Authorization?", "paragraphs": ["In Somalia, the participation of U.S. military forces in a U.N. operation to protect humanitarian assistance became increasingly controversial as fighting and casualties increased and the objectives of the operation appeared to be expanding.", "On December 4, 1992, President George H.W. Bush ordered thousands of U.S. military forces to Somalia to protect humanitarian relief from armed gangs. Earlier, on November 25, the President had offered U.S. forces, and on December 3, the United Nations Security Council had adopted Resolution 794 welcoming the U.S. offer and authorizing the Secretary-General and members cooperating in the U.S. offer \"to use all necessary means to establish as soon as possible a secure environment for humanitarian relief operations in Somalia.\" The resolution also called on member states to provide military forces and authorized the Secretary-General and the states concerned to arrange for unified command and control.", "On December 10, 1992, President Bush reported to Congress \"consistent with the War Powers Resolution\" that on December 8, U.S. Armed Forces entered Somalia to secure the air field and port facility of Mogadishu and that other elements of the U.S. Armed Forces were being introduced into Somalia to achieve the objectives of U.N. Security Council Resolution 794. He said the forces would remain only as long as necessary to establish a secure environment for humanitarian relief operations and would then turn over responsibility for maintaining this environment to a U.N. peacekeeping force. The President said that it was not intended that the U.S. Armed Forces become involved in hostilities, but that the forces were equipped and ready to take such measures as might be needed to accomplish their humanitarian mission and defend themselves. They would also have the support of any additional U.S. forces necessary. By mid-January, U.S. forces in Somalia numbered 25,000.", "Since the President did not cite Section 4(a)(1), the 60-day time limit was not necessarily triggered. By February, however, the U.S. force strength was being reduced, and it was announced the United States expected to turn over responsibility for protecting humanitarian relief shipments in Somalia to a U.N. force that would include U.S. troops. On March 26, 1993, the Security Council adopted Resolution 814 expanding the mandate of the U.N. force and bringing about a transition from a U.S.-led force to a U.N.-led force (UNOSOM II). By the middle of May, when the change to U.N. control took place, the U.S. forces were down to approximately 4,000 troops, primarily logistics and communications support teams, but also a rapid deployment force of U.S. Marines stationed on Navy ships.", "Violence within Somalia began to increase again. On June 5, 1993, attacks killed 23 Pakistani peacekeepers, and a Somali regional leader, General Aidid, was believed responsible. The next day the U.N. Security Council adopted Resolution 837 reaffirming the authority of UNOSOM II to take all necessary measures against those responsible for the armed attacks. On June 10, 1993, President Clinton reported \"consistent with the War Powers Resolution\" that the U.S. Quick Reaction Force had executed military strikes to assist UNOSOM II in quelling violence against it. On July 1, President Clinton submitted another report, not mentioning the War Powers Resolution, describing further air and ground military operations aimed at securing General Aidid's compound and neutralizing military capabilities that had been an obstacle to U.N. efforts to deliver humanitarian relief and promote national reconstruction.", "From the beginning, a major issue for Congress was whether to authorize U.S. action in Somalia. On February 4, 1993, the Senate had passed S.J.Res. 45 that would authorize the President to use U.S. Armed Forces pursuant to U.N. Security Council Resolution 794. S.J.Res. 45 stated it was intended to constitute the specific statutory authorization under Section 5(b) of the War Powers Resolution. On May 25, 1993, the House amended S.J.Res. 45 to authorize U.S. forces to remain for one year. S.J.Res. 45 was then sent to the Senate for its concurrence, but the Senate did not act on the measure.", "As sporadic fighting resulted in the deaths of Somali and U.N. forces, including Americans, controversy over the operation intensified, and Congress took action through other legislative channels. In September 1993 the House and Senate adopted amendments to the Defense Authorization Act for FY1994 asking that the President consult with Congress on policy toward Somalia, and report the goals, objectives, and anticipated jurisdiction of the U.S. mission in Somalia by October 15, 1993; the amendments expressed the sense that the President by November 15, 1993, should seek and receive congressional authorization for the continued deployment of U.S. forces to Somalia. On October 7, the President consulted with congressional leaders from both parties for over two hours on Somalia policy. On October 13, President Clinton sent a 33-page report to Congress on his Somalia policy and its objectives.", "Meanwhile, on October 7 President Clinton said that most U.S. forces would be withdrawn from Somalia by March 31, 1994. To ensure this, the Defense Department Appropriations Act for FY1994, cut off funds for U.S. military operations in Somalia after March 31, 1994, unless the President obtained further spending authority from Congress. Congress approved the use of U.S. military forces in Somalia only for the protection of American military personnel and bases and for helping maintain the flow of relief aid by giving the U.N. forces security and logistical support; it required that U.S. combat forces in Somalia remain under the command and control of U.S. commanders under the ultimate direction of the President.", "Earlier, some Members suggested that the U.S. forces in Somalia were clearly in a situation of hostilities or imminent hostilities, and that if Congress did not authorize the troops to remain, the forces should be withdrawn within 60 to 90 days. After a letter from House Foreign Affairs Committee Ranking Minority Member Benjamin Gilman and Senate Foreign Relations Committee Ranking Minority Member Jesse Helms, Assistant Secretary Wendy Sherman replied on July 21, 1993, that no previous Administrations had considered that intermittent military engagements, whether constituting hostilities, would necessitate the withdrawal of forces pursuant to Section 5(b); and the War Powers Resolution, in their view, was intended to apply to sustained hostilities. The State Department did not believe congressional authorization was necessary, although congressional support would be welcome. On August 4, 1993, Representative Gilman asserted that August 4 might be remembered as the day the War Powers Resolution died because combat broke out in Somalia on June 5 and the President had not withdrawn U.S. forces and Congress had \"decided to look the other way.\" On October 22, 1993, Representative Gilman introduced H.Con.Res. 170 directing the President pursuant to Section 5(c) of the War Powers Resolution to withdraw U.S. forces from Somalia by January 31, 1994. The House adopted an amended version calling for withdrawal by March 31, 1994. The Senate did not act on this nonbinding measure.", "However, the Defense Appropriations Act for FY1995 ( P.L. 103-335 , signed September 30, 1994) prohibited the use of funds for the continuous presence of U.S. forces in Somalia, except for the protection of U.S. personnel, after September 30, 1994. Subsequently, on November 4, 1994, the U.N. Security Council decided to end the U.N. mission in Somalia by March 31, 1995. On March 3, 1995, U.S. forces completed their assistance to United Nations forces evacuating Somalia.", "Another war powers issue was the adequacy of consultation before the dispatch of forces. On December 4, 1992, President Bush had met with a number of congressional leaders to brief them on the troop deployment. In his December 10 report, President Bush stressed that he had taken into account the views expressed in H.Con.Res. 370 , S.Con.Res. 132 , and P.L. 102-274 on the urgent need for action in Somalia. However, none of these resolutions explicitly authorized U.S. military action."], "subsections": []}, {"section_title": "Former Yugoslavia/Bosnia/Kosovo: What If No Consensus Exists?", "paragraphs": [], "subsections": [{"section_title": "Bosnia", "paragraphs": ["The issue of war powers and U.S. participation in United Nations actions was also raised by efforts to halt fighting in the territory of former Yugoslavia, initially in Bosnia. Because some of the U.S. action has been taken within a NATO framework, action in Bosnia has also raised the issue of whether action under NATO is exempt from the requirements of the War Powers Resolution or its standard for the exercise of war powers under the Constitution. Article 11 of the North Atlantic Treaty states that its provisions are to be carried out by the parties \"in accordance with their respective constitutional processes,\" inferring some role for Congress in the event of war. Section 8(a) of the War Powers Resolution states that authority to introduce U.S. forces into hostilities is not to be inferred from any treaty, ratified before or after 1973, unless implementing legislation specifically authorizes such introduction and says it is intended to constitute an authorization within the meaning of the War Powers Resolution. Section 8(b) states that nothing in the War Powers Resolution should be construed to require further authorization for U.S. participation in the headquarters operations of military commands established before 1973, such as NATO headquarters operations.", "On August 13, 1992, the U.N. Security Council adopted Resolution 770 calling on nations to take \"all measures necessary\" to facilitate the delivery of humanitarian assistance to Sarajevo. Many in Congress had been advocating more assistance to the victims of the conflict. On August 11, 1992, the Senate had passed S.Res. 330 urging the President to work for a U.N. Security Council resolution such as was adopted, but saying that no U.S. military personnel should be introduced into hostilities without clearly defined objectives. On the same day, the House passed H.Res. 554 urging the Security Council to authorize measures, including the use of force, to ensure humanitarian relief.", "During 1993 the United States participated in airlifts into Sarajevo, naval monitoring of sanctions, and aerial enforcement of a \"no-fly zone.\" On February 10, 1993, Secretary of State Warren Christopher announced that under President Clinton, the United States would try to convince the Serbs, Muslims, and Croats to pursue a diplomatic solution and that if an agreement was reached, U.S. forces, including ground forces, would help enforce the peace. On February 28, 1993, the United States began an airdrop of relief supplies aimed at civilian populations, mainly Muslims, surrounded by fighting in Bosnia.", "On March 31, 1993, the U.N. Security Council authorized member states to take all necessary measures to enforce the ban on military flights over Bosnia, the \"no-fly zone.\" NATO planes, including U.S. planes, began patrolling over Bosnia and Herzegovina on April 12, 1993, to enforce the Security Council ban, and the next day, President Clinton reported the U.S. participation \"consistent with Section 4 of the War Powers Resolution.\"", "Conflict continued, but the situation was complicated and opinion in Congress and among U.N. and NATO members was divided. President Clinton consulted with about two dozen congressional leaders on potential further action on April 27 and received a wide range of views. On May 2, the Administration began consultation with allies to build support for additional military action to enforce a cease-fire and Bosnian Serb compliance with a peace agreement, but a consensus on action was not reached.", "On June 10, 1993, Secretary of State Christopher announced the United States would send 300 U.S. troops to join 700 Scandinavians in the U.N. peacekeeping force in Macedonia. The mission was established under U.N. Security Council Resolution 795 (1992), which sought to prevent the war in Bosnia from spilling over to neighboring countries. President Clinton reported this action \"consistent with Section 4 of the War Powers Resolution\" on July 9, 1993. He identified U.S. troops as part of a peacekeeping force, and directed in accordance with Section 7 of the U.N. Participation Act.", "Planning for U.N. and NATO action to implement a prospective peace agreement included the possibility that the United States might supply 25,000 out of 50,000 NATO forces to enforce U.N. decisions. This possibility brought proposals to require congressional approval before the dispatch of further forces to Bosnia. On September 23, 1993, Senate Minority Leader Robert Dole said he intended to offer an amendment stating that no additional U.S. forces should be introduced into former Yugoslavia without advance approval from Congress. Assistant Secretary of State Stephen Oxman said on October 5 that the Clinton Administration would consult with Congress and not commit American troops to the implementation operation for a peace agreement without congressional support, and that the Administration would act consistent with the War Powers Resolution. Congress sought to assure this in Section 8146 of P.L. 103-139 , the Defense Appropriations Act for FY1994, stating the sense of Congress that funds should not be available for U.S. forces to participate in new missions or operations to implement the peace settlement in Bosnia unless previously authorized by Congress. This provision was sponsored by the Senate by leaders Mitchell and Dole.", "At the NATO summit conference in Brussels on January 11, 1994, leaders, including President Clinton, repeated an August threat to undertake air strikes on Serb positions to save Sarajevo and to consider other steps to end the conflict in Bosnia. On February 17, 1994, President Clinton reported \"consistent with\" the War Powers Resolution that the United States had expanded its participation in United Nations and NATO efforts to reach a peaceful solution in former Yugoslavia and that 60 U.S. aircraft were available for participation in the authorized NATO missions. On March 1, 1994, he reported that on the previous day U.S. planes patrolling the \"no-fly zone\" under the North Atlantic Treaty Organization (NATO) shot down 4 Serbian Galeb planes. On April 12, 1994, the President reported that on April 10 and 11, following shelling of Gorazde, one of the \"safe areas,\" and a decision by U.N. and NATO leaders, U.S. planes bombed Bosnian Serbian nationalist positions around Gorazde. On August 22, 1994, President Clinton similarly reported that on August 5, U.S. planes under NATO had strafed a Bosnian Serb gun position in an exclusion zone. On September 22, 1994, two British and one U.S. aircraft bombed a Serbian tank in retaliation for Serb attacks on U.N. peacekeepers near Sarajevo; and on November 21 more than 30 planes from the United States, Britain, France, and the Netherlands bombed the runway of a Serb airfield in Croatia.", "As the conflict in Bosnia continued, leaders in Congress called for greater congressional involvement in decisions. Senator Dole introduced S. 2042 , calling for the United States to end unilaterally its arms embargo, conducted in accordance with a U.N. Security Council Resolution, against Bosnia and Herzegovina. On May 10, 1994, Senate Majority Leader George Mitchell introduced an amendment to authorize and approve the President's decision to carry out NATO decisions to support and protect UNPROFOR forces around designated safe areas; to use airpower in the Sarajevo region; and to authorize air strikes against Serb weapons around certain safe areas if these areas were attacked. The Mitchell amendment favored lifting the arms embargo but not unilaterally; it also stated no U.S. ground combat troops should be deployed in Bosnia unless previously authorized by Congress. The Senate adopted both the Dole proposal, as an amendment, and the Mitchell amendment on May 12, 1994, by votes of 50-49. The less stringent Mitchell amendment passed on a straight party line vote. Yet thirteen Democrats voted for the Dole amendment, indicating a sentiment in both parties to assist the Bosnians in defending themselves. The Senate then adopted S. 2042 as amended. The House did not act on the measure.", "The Defense Authorization Act for FY1995 ( P.L. 103-337 , signed October 5, 1994) provided, in Section 1404, the sense of the Congress that if the Bosnian Serbs did not accept the Contact Group proposal by October 15, 1994, the President should introduce a U.N. Security Council resolution to end the arms embargo by December 1, 1994; if the Security Council had not acted by November 15, 1994, no funds could be used to enforce the embargo other than those required of all U.N. members under Security Council Resolution 713. That sequence of events occurred and the United States stopped enforcing the embargo. In addition, Section 8100 of the Defense Appropriations Act, FY1995 ( P.L. 103-335 , signed September 30, 1994), stated the sense of the Congress that funds made available by this law should not be available for the purposes of deploying U.S. Armed Forces to participate in implementation of a peace settlement in Bosnia unless previously authorized by Congress.", "On May 24, 1995, President Clinton reported \"consistent with the War Powers Resolution\" that U.S. combat-equipped fighter aircraft and other aircraft continued to contribute to NATO's enforcement of the no-fly zone in airspace over Bosnia-Herzegovina. U.S. aircraft, he noted, are also available for close air support of U.N. forces in Croatia. Roughly 500 U.S. soldiers were still deployed in the former Yugoslav Republic of Macedonia as part of the U.N. Preventive Deployment Force (UNPREDEP). U.S. forces continue to support U.N. refugee and embargo operations in this region.", "On September 1, 1995, President Clinton reported \"consistent with the War Powers Resolution,\" that \"U.S. combat and support aircraft\" had been used beginning on August 29, 1995, in a series of NATO air strikes against Bosnian Serb Army (BSA) forces in Bosnia-Herzegovina that were threatening the U.N.-declared safe areas of Sarajevo, Tuzla, and Gorazde.\" He noted that during the first day of operations, \"some 300 sorties were flown against 23 targets in the vicinity of Sarajevo, Tuzla, Gorazde, and Mostar.\"", "On September 7, 1995, the House passed an amendment to the FY1996 Department of Defense Appropriations Bill ( H.R. 2126 ), offered by Representative Mark Neumann that prohibited the obligation or expenditure of funds provided by the bill for any operations beyond those already undertaken. However, in conference the provision was softened to a sense-of-the-Congress provision that said that President must consult with Congress before deploying U.S. forces to Bosnia. The conference report was rejected by the House over issues unrelated to Bosnia on September 29, 1995, by a vote of 151-267. The substitute conference report on H.R. 2126 , which was subsequently passed and signed into law, did not include language on Bosnia, in part due to the President's earlier objections to any provision in the bill that might impinge on his powers as Commander in Chief. On September 29, the Senate passed by a vote of 94-2 a sense-of-the-Senate amendment to H.R. 2076 , the FY1996 State, Commerce, Justice Appropriations bill, sponsored by Senator Judd Gregg that said no funds in the bill should be used for the deployment of U.S. combat troops to Bosnia-Herzegovina unless Congress approves the deployment in advance or to evacuate endangered U.N. peacekeepers. The conference report on H.R. 2076 , agreed to by the House and the Senate, included the \"sense of the Senate\" language of the Gregg amendment.", "In response to mounting criticism of the Administration's approach to Bosnian policy, on October 17-18, 1995, Secretary of State Christopher, Secretary of Defense Perry and Joint Chiefs of Staff Chairman Shalikashvili testified before House and Senate Committees on Bosnia policy and the prospect of President Clinton deploying approximately 20,000 American ground forces as part of a NATO peacekeeping operation. During testimony before the Senate Foreign Relations Committee on October 17, Secretary Christopher stated that the President would not be bound by a resolution of the Congress prohibiting sending of U.S. forces into Bosnia without the express prior approval of Congress. Nevertheless, on October 19, 1995, President Clinton in a letter to Senator Robert C. Byrd stated that \"[w]hile maintaining the constitutional authorities of the Presidency, I would welcome, encourage and, at the appropriate time, request an expression of support by the Congress\" for the commitment of U.S. troops to a NATO implementation force in Bosnia, after a peace agreement is reached.", "Subsequently, on October 30, 1995, the House, by a vote of 315-103, passed H.Res. 247 , expressing the sense of the House that \"no United States Armed forces should be deployed on the ground in the territory of the Republic of Bosnia and Herzegovina to enforce a peace agreement until the Congress has approved such a deployment.\" On November 13, President Clinton's 9-page letter to Speaker Gingrich stated he would send a request \"for a congressional expression of support for U.S. participation in a NATO-led Implementation Force in Bosnia ... before American forces are deployed in Bosnia.\" The President said there would be a \"timely opportunity for Congress to consider and act upon\" his request for support. He added that despite his desire for congressional support, he \"must reserve\" his \"constitutional prerogatives in this area.\" On November 17, 1995, the House passed (243-171) H.R. 2606 , which would \"prohibit the use of funds appropriated or otherwise available\" to the Defense Department from \"being used for the deployment on the ground of United States Armed Forces in the Republic of Bosnia-Herzegovina as part of any peacekeeping operation or as part of any implementation force, unless funds for such deployment are specifically appropriated\" by law.", "On December 4, 1995, Secretary of Defense Perry announced the deployment of about 1,400 U.S. military personnel (700 to Bosnia/700 to Croatia) as part of the advance elements of the roughly 60,000 person NATO Implementation Force in Bosnia, scheduled to deploy in force once the Dayton Peace Agreement is signed in Paris on December 14, 1995. Secretary Perry noted that once the NATO I-Force was fully deployed, about 20,000 U.S. military personnel would be in Bosnia, and about 5,000 in Croatia.", "On December 6, 1995, President Clinton notified the Congress, \"consistent with the War Powers Resolution,\" that he had \"ordered the deployment of approximately 1,500 U.S. military personnel to Bosnia and Herzegovina and Croatia as part of a NATO 'enabling force' to lay the groundwork for the prompt and safe deployment of the NATO-led Implementation Force (IFOR),\" which would be used to implement the Bosnian peace agreement after its signing. The President also noted that he had authorized deployment of roughly 3,000 other U.S. military personnel to Hungary, Italy, and Croatia to establish infrastructure for the enabling force and the IFOR.", "In response to these developments, Congress addressed the question of U.S. ground troop deployments in Bosnia. Lawmakers sought to take action before the final Bosnian peace agreement was signed in Paris on December 14, 1995, following which the bulk of American military forces would be deployed to Bosnia. On December 13, 1995, the House considered H.R. 2770 , sponsored by Representative Dornan, which would have prohibited the use of federal funds for the deployment \"on the ground\" of U.S. Armed Forces in Bosnia-Herzegovina \"as part of any peacekeeping operation, or as part of any implementation force.\" H.R. 2770 was defeated in the House by a vote of 210-218. On December 13, the House considered two other measures. It approved H.Res. 302 , offered by Representative Buyer, by a vote of 287-141. H.Res. 302 , a nonbinding measure, reiterated \"serious concerns and opposition\" to the deployment of U.S. ground troops to Bosnia, while expressing confidence, \"pride and admiration\" for U.S. soldiers deployed there. It called on the President and Defense Secretary to rely on the judgement of the U.S. ground commander in Bosnia and stated that he should be provided with sufficient resources to ensure the safety and well-being of U.S. troops. H.Res. 302 , further stated that the U.S. government should \"in all respects\" be \"impartial and evenhanded\" with all parties to the Bosnian conflict \"as necessary to ensure the safety and protection\" of American forces in the region.", "Subsequently, the House defeated H.Res. 306 , proposed by Representative Hamilton, by a vote of 190-237. H.Res. 306 stated that the House \"unequivocally supports the men and women of the United States Armed Forces who are carrying out their mission in support of peace in Bosnia and Herzegovina with professional excellence, dedicated patriotism and exemplary bravery.\"", "On December 13, the Senate also considered three measures related to Bosnia and U.S. troop deployments. The Senate defeated H.R. 2606 by a vote of 22-77. This bill would have prohibited funds to be obligated or expended for U.S. participation in peacekeeping in Bosnia unless such funds were specifically appropriated for that purpose. The Senate also defeated S.Con.Res. 35 , a nonbinding resolution of Senators Hutchison and Inhofe. This resolution stated that \"Congress opposes President Clinton's decision to deploy\" U.S. troops to Bosnia, but noted that \"Congress strongly supports\" the U.S. troops sent by the President to Bosnia.", "The Senate did pass S.J.Res. 44 , sponsored by Senators Dole and McCain, by a vote of 69-30. This resolution stated that Congress \"unequivocally supports the men and women of our Armed Forces\" who were to be deployed to Bosnia. S.J.Res. 44 stated that \"notwithstanding reservations expressed about President Clinton's decision\" to deploy U.S. forces, \"the President may only fulfill his commitment\" to deploy them to Bosnia \"for approximately one year\" if he made a determination to Congress that the mission of the NATO peace implementation force (IFOR) will be limited to implementing the military annex to the Bosnian peace agreement and to protecting itself. The presidential determination must also state that the United States will \"lead an immediate international effort,\" separate from IFOR, \"to provide equipment, arms, training and related logistics assistance of the highest possible quality\" to the Muslim-Croat Federation so that it may provide for its own defense. The President could use \"existing military drawdown authorities and requesting such additional authority as may be necessary.\" S.J.Res. 44 also required President Clinton to submit to Congress a detailed report on the armament effort within 30 days, and required regular presidential reports to Congress on the implementation of both the military and nonmilitary aspects of the peace accords.", "The House and Senate did not appoint and direct conferees to meet to reconcile the conflicting elements of the Bosnia related measures each had passed on December 13, 1995. A number of Members and Senators had wished to express their views on the troop deployment before the Dayton Accords were formally signed in Paris. That action had occurred, and the leadership of both parties apparently believed nothing further would be achieved by a conference on the measures passed. As result, no final consensus on a single specific measure was reached on the issue by the two chambers.", "The President meanwhile continued with the Bosnian deployment. On December 21, 1995, President Clinton notified Congress \"consistent with the War Powers Resolution,\" that he had ordered the deployment of approximately 20,000 U.S. military personnel to participate in the NATO-led Implementation Force (IFOR) in the Republic of Bosnia-Herzegovina, and approximately 5,000 U.S. military personnel would be deployed in other former Yugoslav states, primarily in Croatia. In addition, about 7,000 U.S. support forces would be deployed to Hungary, Italy, Croatia, and other regional states in support of IFOR's mission. The President ordered participation of U.S. forces \"pursuant to\" his \"constitutional authority to conduct the foreign relations of the United States and as Commander-in-Chief and Chief Executive.\" Subsequently, President Clinton in December 1996, agreed to provide up to 8,500 ground troops to participate in a NATO-led follow-on force in Bosnia termed the Stabilization Force (SFOR). On March 18, 1998, the House defeated by a vote of 193-225, H.Con.Res. 227 , a resolution of Representative Tom Campbell, directing the President, pursuant to Section 5(c) of the War Powers Resolution to remove United States Armed Forces from the Republic of Bosnia and Herzegovina ( H.Rept. 105-442 )."], "subsections": []}, {"section_title": "Kosovo", "paragraphs": ["The issue of presidential authority to deploy forces in the absence of congressional authorization, under the War Powers Resolution, or otherwise, became an issue of renewed controversy in late March 1999 when President Clinton ordered U.S. military forces to participate in a NATO-led military operation in Kosovo. This action was the focus of a major policy debate over the purpose and scope of U.S. military involvement in Kosovo. The President's action to commit forces to the NATO Kosovo operation also led to a suit in federal District Court for the District of Columbia by Members of Congress seeking a judicial finding that the President was violating the War Powers Resolution and the Constitution by using military forces in Yugoslavia in the absence of authorization from the Congress.", "The Kosovo controversy began in earnest when on March 26, 1999, President Clinton notified Congress \"consistent with the War Powers Resolution,\" that on March 24, 1999, U.S. military forces, at his direction and in coalition with NATO allies, had commenced air strikes against Yugoslavia in response to the Yugoslav government's campaign of violence and repression against the ethnic Albanian population in Kosovo. Prior to the President's action, the Senate, on March 23, 1999, had passed, by a vote of 58-41, S.Con.Res. 21 , a nonbinding resolution expressing the sense of the Congress that the President was authorized to conduct \"military air operations and missile strikes in cooperation with our NATO allies against the Federal Republic of Yugoslavia (Serbia and Montenegro).\"", "Subsequently, the House voted on a number of measures relating to U.S. participation in the NATO operation in Kosovo. On April 28, 1999, the House of Representatives passed H.R. 1569 , by a vote of 249-180. This bill would prohibit the use of funds appropriated to the Defense Department from being used for the deployment of \"ground elements\" of the U.S. Armed Forces in the Federal Republic of Yugoslavia unless that deployment is specifically authorized by law. On that same day the House defeated H.Con.Res. 82 , by a vote of 139-290. This resolution would have directed the President, pursuant to Section 5(c) of the War Powers Resolution, to remove U.S. Armed Forces from their positions in connection with the present operations against the Federal Republic of Yugoslavia. On April 28, 1999, the House also defeated H.J.Res. 44 , by a vote of 2-427. This joint resolution would have declared a state of war between the United States and the \"Government of the Federal Republic of Yugoslavia.\" The House on that same day also defeated, on a 213-213 tie vote, S.Con.Res. 21 , the Senate resolution passed on March 23, 1999, that supported military air operations and missile strikes against Yugoslavia. On April 30, 1999, Representative Tom Campbell and 17 other members of the House filed suit in federal District Court for the District of Columbia seeking a ruling requiring the President to obtain authorization from Congress before continuing the air war, or taking other military action against Yugoslavia.", "The Senate, on May 4, 1999, by a vote of 78-22, tabled S.J.Res. 20 , a joint resolution, sponsored by Senator John McCain, that would authorize the President \"to use all necessary force and other means, in concert with United States allies, to accomplish United States and North Atlantic Treaty Organization objectives in the Federal Republic of Yugoslavia (Serbia and Montenegro).\" The House, meanwhile, on May 6, 1999, by a vote of 117-301, defeated an amendment by Representative Ernest Istook to H.R. 1664 , the FY1999 defense supplemental appropriations bill, that would have prohibited the expenditure of funds in the bill to implement any plan to use U.S. ground forces to invade Yugoslavia, except in time of war. Congress, meanwhile, on May 20, 1999, cleared for the President's signature, H.R. 1141 , an emergency supplemental appropriations bill for FY1999, that provided billions in funding for the existing U.S. Kosovo operation.", "The Senate tabled two other amendments that would have restricted military operations by President Clinton in Kosovo. On May 24, 1999, it tabled, by a vote of 52-48, an amendment offered by Senator Arlen Specter to state that no funds available to the Defense Department may be obligated or expended for the deployment of U.S. ground troops to Yugoslavia unless authorized by a declaration of war or a joint resolution authorizing the use of military force. The Specter amendment did not apply to certain actions, such as rescuing U.S. military personnel or citizens. On May 26, 1999, the Senate tabled an amendment, by a vote of 77-21, offered by Senator Bob Smith to prohibit, effective October 1, 1999, the use of funds for military operations in Yugoslavia unless Congress enacted specific authorization in law for the conduct of these operations.", "On May 25, 1999, the 60 th day had passed since the President notified Congress of his actions regarding U.S. participation in military operations in Kosovo. Representative Campbell, and those who joined his suit, noted to the federal Court that this was a clear violation of the language of the War Powers Resolution stipulating a withdrawal of U.S. forces from the area of hostilities after 60 days in the absence of congressional authorization to continue, or a presidential request to Congress for an extra 30 day period to safely withdraw. The President did not seek such a 30 day extension, noting instead his view that the War Powers Resolution is constitutionally defective.", "On June 8, 1999, Federal District Judge Paul L. Friedman dismissed the suit of Representative Campbell and others that sought to have the court rule that President Clinton was in violation of the War Powers Resolution and the Constitution by conducting military activities in Yugoslavia without having received prior authorization from Congress. The judge ruled that Representative Campbell and the other congressional plaintiffs lacked legal standing to bring the suit. On June 24, 1999, Representative Campbell appealed the ruling to the U.S. Court of Appeals for the District of Columbia. The appeals court subsequently agreed to hear the case on an expedited basis before Judges Silberman, Randolph, and Tatel. On February 18, 2000, the appeals court affirmed the opinion of the District Court that Representative Campbell and his co-plaintiffs lacked standing to sue the President. On May 18, 2000, Representative Campbell and 30 other Members of Congress appealed this decision to the United States Supreme Court. On October 2, 2000, the United States Supreme Court, without comment, refused to hear the appeal of Representative Campbell, thereby letting stand the holding of the U.S. Court of Appeals.", "While Representative Campbell's litigation was continuing, Yugoslavia, on June 10, 1999, agreed to NATO conditions for a cease-fire and withdrawal of Yugoslav military and paramilitary personnel from Kosovo, and the creation of a peacekeeping force (KFOR) which had the sanction of the United Nations. Further, on June 10, 1999, the House of Representatives defeated, by a vote of 328-97, an amendment to H.R. 1401 , the National Defense Authorization Act for FY2000-FY2001, that would have prohibited the use of any Defense Department funding in FY2000 for \"military operations in the Federal Republic of Yugoslavia.\" On that same day, the House approved, by a vote of 270-155, an amendment that deleted, from the House reported version of H.R. 1401 , language that would have prohibited any funding for \"combat or peacekeeping operations\" in the Federal Republic of Yugoslavia.", "On June 12, 1999, President Clinton announced and reported to Congress \"consistent with the War Powers Resolution\" that he had directed the deployment of about \"7,000 U.S. military personnel as the U.S. contribution to the approximately 50,000-member, NATO-led security force (KFOR)\" being assembled in Kosovo. He also noted that about \"1,500 U.S. military personnel, under separate U.S. command and control, will deploy to other countries in the region, as our national support element, in support of KFOR.\" Thus, by the summer of 1999, the President had been able to proceed with his policy of intervention in the Kosovo crisis under the aegis of NATO, the Congress had not achieved any position of consensus on what actions were appropriate in Yugoslavia, and a U.S. District Court had dismissed a congressional lawsuit (a position subsequently affirmed the following year by the Appeals Court, and the U.S. Supreme Court) attempting to stop presidential military action in Yugoslavia in the absence of prior congressional authorization under the War Powers Resolution."], "subsections": []}]}, {"section_title": "Haiti: Can the President Order Enforcement of a U.N. Embargo?", "paragraphs": ["On July 3, 1993, Haitian military leader Raoul Cedras and deposed President Jean-Bertrand Aristide signed an agreement providing for the restoration of President Aristide on October 30. The United Nations and the Organization of American States took responsibility for verifying compliance. In conjunction with the agreement, President Clinton offered to send 350 troops and military engineers to Haiti to help retrain the Haitian armed forces and work on construction projects. A first group of American and Canadian troops arrived on October 6. When additional U.S. forces arrived on October 11, a group of armed civilians appeared intent upon resisting their landing, and on October 12 defense officials ordered the ship carrying them, the U.S.S. Harlan County , to leave Haitian waters.", "Because the Haitian authorities were not complying with the agreement, on October 13 the U.N. Security Council voted to restore sanctions against Haiti. On October 20, President Clinton reported \"consistent with the War Powers Resolution\" that U.S. ships had begun to enforce the U.N. embargo. Some Members of Congress complained that Congress had not been consulted on or authorized the action. On October 18, Senator Dole said he would offer an amendment to the Defense Appropriations bill ( H.R. 3116 ) which would require congressional authorization for all deployments into Haitian waters and airspace unless the President made specified certifications. Congressional leaders and Administration officials negotiated on the terms of the amendment. As enacted, Section 8147 of P.L. 103-139 stated the sense of Congress that funds should not be obligated or expended for U.S. military operations in Haiti unless the operations were (1)\u00a0authorized in advance by Congress, (2) necessary to protect or evacuate U.S. citizens, (3) vital to the national security of the United States and there was not sufficient time to receive congressional authorization, or (4) the President reported in advance that the intended deployment met certain criteria.", "Enforcement of the embargo intensified. On April 20, 1994, President Clinton further reported \"consistent with the War Powers Resolution\" that U.S. naval forces had continued enforcement in the waters around Haiti and that 712 vessels had been boarded. On May 6, 1994, the U.N. Security Council adopted Resolution 917 calling for measures to tighten the embargo. On June 10, 1994, President Clinton announced steps being taken to intensify the pressure on Haiti's military leaders that included assisting the Dominican Republic to seal its border with Haiti, using U.S. naval patrol boats to detain ships suspected of violating the sanctions, a ban on commercial air traffic, and sanctions on financial transactions.", "As conditions in Haiti worsened, President Clinton stated he would not rule out the use of force, and gradually this option appeared more certain. Many Members continued to contend congressional authorization was necessary for any invasion of Haiti. On May 24, 1994, the House adopted the Goss amendment to the Defense Authorization bill ( H.R. 4301 ) by a vote of 223-201. The amendment expressed the sense of Congress that the United States should not undertake any military action against the mainland of Haiti unless the President first certified to Congress that clear and present danger to U.S. citizens or interests required such action. Subsequently, on June 9 the House voted on the Goss amendment again. This time the House reversed itself and rejected the amendment by a vote of 195-226. On June 27, a point of order was sustained against an amendment to the State Department appropriations bill that sought to prohibit use of funds for any U.N. peacekeeping operation related to Haiti. On June 29, 1994, the Senate in action on H.R. 4226 repassed a provision identical to Section 8147 of P.L. 103-139 but rejected a measure making advance congressional authorization a binding requirement. On August 5 it tabled (rejected) by a vote of 31 to 63 an amendment to H.R. 4606 by Senator Specter prohibiting the President from using U.S. Armed Forces to depose the military leadership unless authorized in advance by Congress, necessary to protect U.S. citizens, or vital to U.S. interests.", "President Clinton sought and obtained U.N. Security Council authorization for an invasion. On July 31, the U.N. Security Council authorized a multinational force to use \"all necessary means to facilitate the departure from Haiti of the military leadership ... on the understanding that the cost of implementing this temporary operation will be borne by the participating Member States\" (Resolution 940, 1994).", "On August 3, the Senate adopted an amendment to the Department of Veterans Affairs appropriation, H.R. 4624 , by a vote of 100-0 expressing its sense that the Security Council Resolution did not constitute authorization for the deployment of U.S. forces in Haiti under the Constitution or the War Powers Resolution. The amendment, however, was rejected in conference. President Clinton said the same day that he would welcome the support of Congress but did not agree that he was constitutionally mandated to obtain it. Some Members introduced resolutions, such as H.Con.Res. 276 , calling for congressional authorization prior to the invasion.", "On September 15, 1994, in an address to the Nation, President Clinton said he had called up the military reserve and ordered two aircraft carriers into the region. His message to the military dictators was to leave now or the United States would force them from power. The first phase of military action would remove the dictators from power and restore Haiti's democratically elected government. The second phase would involve a much smaller force joining with forces from other U.N. members which would leave Haiti after 1995 elections were held and a new government installed.", "While the Defense Department continued to prepare for an invasion within days, on September 16 President Clinton sent to Haiti a negotiating team of former President Jimmy Carter, former Joint Chiefs of Staff Chairman Colin Powell, and Senate Armed Services Committee Chairman Sam Nunn. Again addressing the Nation on September 18, President Clinton announced that the military leaders had agreed to step down by October 15, and agreed to the immediate introduction of troops, beginning September 19, from the 15,000 member international coalition. He said the agreement was only possible because of the credible and imminent threat of multinational force. He emphasized the mission still had risks and there remained possibilities of violence directed at U.S. troops, but the agreement minimized those risks. He also said that under U.N. Security Council resolution 940, a 25-nation international coalition would soon go to Haiti to begin the task of restoring democratic government. Also on September 18, President Clinton reported to Congress on the objectives in accordance with the sense expressed in Section 8147 (c) of P.L. 103-139 , the FY1994 Defense Appropriations Act.", "U.S. forces entered Haiti on September 1994. On September 21, President Clinton reported \"consistent with the War Powers Resolution\" the deployment of 1,500 troops, to be increased by several thousand. (At the peak in September there were about 21,000 U.S. forces in Haiti.) He said the U.S. presence would not be open-ended but would be replaced after a period of months by a U.N. peacekeeping force, although some U.S. forces would participate in and be present for the duration of the U.N. mission. The forces were involved in the first hostilities on September 24 when U.S. Marines killed 10 armed Haitian resisters in a fire-fight.", "On September 19, the House agreed to H.Con.Res. 290 commending the President and the special delegation to Haiti, and supporting the prompt and orderly withdrawal of U.S. forces from Haiti as soon as possible; on September 19, the Senate agreed to a similar measure, S.Res. 259 . On October 3, 1994, the House Foreign Affairs Committee reported H.J.Res. 416 authorizing the forces in Haiti until March 1, 1995, and providing procedures for a joint resolution to withdraw the forces. In House debate on October 6 the House voted against the original contents and for the Dellums substitute. As passed, H.J.Res. 416 stated the sense that the President should have sought congressional approval before deploying U.S. forces to Haiti, supporting a prompt and orderly withdrawal as soon as possible, and requiring a monthly report on Haiti as well as other reports. This same language was also adopted by the Senate on October 6 as S.J.Res. 229 , and on October 7 the House passed S.J.Res. 229 . President Clinton signed S.J.Res. 229 on October 25, 1994 ( P.L. 103-423 ).", "After U.S. forces began to disarm Haitian military and paramilitary forces and President Aristide returned on October 15, 1994, the United States began to withdraw some forces. On March 31, 1995, U.N. peacekeeping forces assumed responsibility for missions previously conducted by U.S. military forces in Haiti. By September 21, 1995, President Clinton reported the United States had 2,400 military personnel in Haiti as participants in the U.N. Mission in Haiti (UNMIH), and 260 U.S. military personnel assigned to the U.S. Support Group Haiti. On February 29, 1996, the U.S. Commander of the UNMIH was replaced and U.S. forces ceased to conduct security operations in Haiti, except for self-defense. The majority of the 1,907 U.S. military personnel in Haiti were withdrawn by mid-March 1996, and the remainder, who stayed to arrange the dismantlement and repatriation of equipment, were withdrawn in mid-April 1996. After that, a U.S. support unit of 300 to 500 troops, made up primarily of engineers, remained in Haiti carrying out public works such as building bridges, repairing schools, and digging wells. In December 1997, President Clinton ordered the Dept. of Defense to maintain hundreds of U.S. troops in Haiti indefinitely. In September 1999, however, the 106 th Congress passed the FY2000 DOD authorization bill ( P.L. 106-65 ) that prohibited DOD funding to maintain a continuous U.S. military presence in Haiti beyond May 31, 2000. The troops were withdrawn by the end of January 2000. According to the conference report accompanying the FY2000 DOD authorization bill ( H.Rept. 106-301 ), the President is not prohibited from engaging in periodic theater engagement activities in Haiti."], "subsections": []}, {"section_title": "Terrorist Attacks against the United States (World Trade Center and the Pentagon) 2001: How Does the War Powers Resolution Apply?", "paragraphs": ["On September 11, 2001, terrorists hijacked four U.S. commercial airliners, crashing two into the twin towers of the World Trade Center in New York City, and another into the Pentagon building in Arlington, VA. The fourth plane crashed in Shanksville, PA, near Pittsburgh, after passengers struggled with the highjackers for control of the aircraft. The death toll from these incidents was more than three thousand, making the attacks the most devastating of their kind in United States history. President George W. Bush characterized these attacks as more than acts of terror. \"They were acts of war,\" he said. He added that \"freedom and democracy are under attack,\" and he asserted that the United States would use \"all of our resources to conquer this enemy.\"", "In the days immediately after the September 11 attacks, the President consulted with the leaders of Congress on appropriate steps to take to deal with the situation confronting the United States. One of the things that emerged from discussions with the White House and congressional leaders was the concept of a joint resolution of the Congress authorizing the President to take military steps to deal with the parties responsible for the attacks on the United States. Between September 13 and 14, draft language of such a resolution was discussed and negotiated by the President's representatives and the House and Senate leadership of both parties. Other members of both Houses suggested language for consideration. On Friday, September 14, 2001, the text of a joint resolution was introduced. It was first considered and passed by the Senate in the morning of September 14, as Senate Joint Resolution 23, by a vote of 98-0. The House of Representatives passed it later that evening, by a vote of 420-1, after tabling an identical resolution, H.J.Res. 64 , and rejecting a motion to recommit by Representative John Tierney that would have had the effect, if passed and enacted, of requiring a report from the President on his actions under the resolution every 60 days.", "Senate Joint Resolution 23, titled the \"Authorization for Use of Military Force,\" passed by Congress on September 14, 2001, was signed into law on September 18, 2001. The joint resolution authorizes the President", "to use all necessary and appropriate force against those nations, organizations, or persons he determines planned, authorized, committed, or aided the terrorist attacks that occurred on September 11, 2001, or harbored such organizations or persons, in order to prevent any future acts of international terrorism against the United States by such nations, organizations or persons.", "The joint resolution further states that Congress declares that this resolution is intended to \"constitute specific statutory authorization within the meaning of section 5(b) of the War Powers Resolution.\" Finally, the joint resolution also states that \"[n]othing in this resolution supercedes any requirement of the War Powers Resolution.\"", "A notable feature of S.J.Res. 23 is that unlike all other major legislation authorizing the use of military force by the President, this joint resolution authorizes military force against \"organizations and persons\" linked to the September 11, 2001, attacks on the United States. Past authorizations of the use of force have permitted action against unnamed nations in specific regions of the world or against named individual nations. This authorization of military action against \"organizations or persons\" is unprecedented in American history, with the scope of its reach yet to be determined. The authorization of use of force against unnamed nations is more consistent with some previous instances where authority was given to act against unnamed states as appropriate when they became aggressors or took military action against the United States or its citizens.", "President George W. Bush in signing S.J.Res. on September 18, 2001, noted the Congress had acted \"wisely, decisively, and in the finest traditions of our country.\" He thanked the \"leadership of both Houses for their role in expeditiously passing this historic joint resolution.\" He noted that he had had the \"benefit of meaningful consultations with members of the Congress\" since the September 11 attacks and that he would \"continue to consult closely with them as our Nation responds to this threat to our peace and security.\" President Bush also asserted that S.J.Res. 23 \"recognized the authority of the President under the Constitution to take action to deter and prevent acts of terrorism against the United States.\" He also stated: \"In signing this resolution, I maintain the longstanding position of the executive branch regarding the President's constitutional authority to use force, including the Armed Forces of the United States and regarding the constitutionality of the War Powers Resolution.\"", "Prior to its enactment, there was concern among some in Congress that the President might not adhere to the reporting requirements of the War Powers Resolution when he exercised the authority provided in S.J.Res. 23 . There appeared to be general agreement that the President had committed himself to consult with Congress on matters related to his military actions against terrorists and those associated with the attacks on the United States on September 11. On September 24, 2001, President Bush reported to Congress, \"consistent with the War Powers Resolution,\" and \"Senate Joint Resolution 23\" that in response to terrorist attacks on the World Trade Center and the Pentagon he had ordered the \"deployment of various combat-equipped and combat support forces to a number of foreign nations in the Central and Pacific Command areas of operations.\" The President noted that as part of efforts to \"prevent and deter terrorism\" he might find it necessary to order additional forces into these and other areas of the world....\" He stated that he could not now predict \"the scope and duration of these deployments,\" nor the \"actions necessary to counter the terrorist threat to the United States.\"", "Subsequently, on October 9, 2001, President George W. Bush reported to Congress, \"consistent with the War Powers Resolution,\" and \"Senate Joint Resolution 23\" that on October 7, 2001, U.S. Armed Forces \"began combat action in Afghanistan against Al Qaida terrorists and their Taliban supporters.\" The President stated that he had directed this military action in response to the September 11, 2001, attacks on U.S. \"territory, our citizens, and our way of life, and to the continuing threat of terrorist acts against the United States and our friends and allies.\" This military action was \"part of our campaign against terrorism\" and was \"designed to disrupt the use of Afghanistan as a terrorist base of operations.\"", "Thus, in light of the September 11, 2001, terrorist attacks against United States territory and citizens, the President and Congress, after consultations, agreed to a course of legislative action that did not invoke the War Powers Resolution itself, but substituted a specific authorization measure, S.J.Res. 23 . Pursuit of such an action is contemplated by the language of the War Powers Resolution itself. As of the end of October 2001, President Bush had chosen to state in his reports to Congress that the military actions he had taken relating to the terrorists attacks were \"consistent with\" both the War Powers Resolution and Senate Joint Resolution 23. His actions follow the practice of his White House predecessors in not formally citing the language of the War Powers Resolution in Section 4(a)(1) that would trigger a military forces withdrawal timetable. Congress for its part in S.J.Res. 23 stated that this legislation constituted \"specific statutory authorization within the meaning of section 5(b) of the War Powers Resolution.\" It also noted that \"nothing\" in S.J.Res. 23 \"supercedes any requirement of the War Powers Resolution.\" The President and Congress, in sum, maintained their respective positions on the constitutionality of the War Powers Resolution and the responsibilities of the President under it, while finding a legislative vehicle around which both branches could unite to support the President's response to the terrorist attacks on the United States."], "subsections": []}, {"section_title": "Use of Force Against Iraq Resolution 2002: A Classic Application of the War Powers Resolution?", "paragraphs": ["In summer 2002, the Bush Administration made public its views regarding what it deemed a significant threat to U.S. interests and security posed by the prospect that Iraq had or was acquiring weapons of mass destruction. Senior members of the Bush Administration cited a number of violations of U.N. Security Council resolutions by Iraq regarding the obligation imposed at the end of the Gulf War in 1991 to end its chemical, biological and nuclear weapons programs. On September 4, 2002, President George W. Bush met with leaders from both Houses and parties at the White House. At that meeting the President stated that he would seek congressional support, in the near future, for action deemed necessary to deal with the threat posed to the United States by the regime of Saddam Hussein of Iraq. The President also indicated that he would speak to the United Nations shortly and set out his concerns about Iraq.", "On September 12, 2002, President Bush addressed the U.N. General Assembly and set out the history of Iraqi misdeeds over the last two decades and the numerous times that Iraq had not fulfilled its commitments to comply with various U.N. Security Council resolutions, including disarmament, since the Gulf War of 1991. He stated that the United States would work with the U.N. Security Council to deal with Iraq's challenge. However, he emphasized that if Iraq refused to fulfill its obligations to comply with U.N. Security Council resolutions, the United States would see that those resolutions were enforced.", "Subsequently, on September 19, 2002, the White House sent a \"draft\" joint resolution to House Speaker Dennis Hastert, House Minority Leader Richard Gephardt, Senate Majority Leader Thomas Daschle and Senate Minority Leader Trent Lott. This draft would have authorized the President to use military force not only against Iraq but \"to restore international peace and security in the region.\" Subsequently introduced as S.J.Res. 45 on September 26, it served as the basis for an extensive debate over the desirability, necessity, and scope of a new congressional authorization for the use of force. The Senate used this bill as the focus for a debate which began, after cloture was invoked, on October 3. The Senate debate continued from October 4 until October 11, 2002, and involved consideration of numerous amendments to the measure. In the end the Senate adopted H.J.Res. 114 in lieu of S.J.Res. 45 .", "The draft measure was not formally introduced in the House. Instead, the vehicle for House consideration of the issue was H.J.Res. 114 . Cosponsored by Speaker Hastert and Minority Leader Gephardt and introduced on October 2, 2002, H.J.Res. 114 embodied modifications to the White House draft that were agreeable to the White House, most House and Senate Republicans, and the House Democratic leader. The House International Relations Committee reported out a slightly amended version of the joint resolution on October 7, 2002 ( H.R. 721 ). The House adopted the rule governing debate on the joint resolution ( H.R. 474 ) on October 8, 2002; and debated the measure until October 10, when it passed H.J.Res. 114 by a vote of 296-133. Subsequently, the Senate passed the House version of H.J.Res. 114 on October 11 by a vote of 77-23, and President Bush signed the \"Authorization for Use of Military Force against Iraq Resolution of 2002\" into law on October 16, 2002.", "In signing H.J.Res. 114 into law, President Bush noted that by passing this legislation Congress had demonstrated that \"the United States speaks with one voice on the threat to international peace and security posed by Iraq.\" He added that the legislation carried an important message that \"Iraq will either comply with all U.N. resolutions, rid itself of weapons of mass destruction, and ... its support for terrorists, or will be compelled to do so.\" While the President noted he had sought a \"resolution of support\" from Congress to use force against Iraq, and appreciated receiving that support, he also stated that", "my request for it did not, and my signing this resolution does not, constitute any change in the long-standing positions of the executive branch on either the President's constitutional authority to use force to deter, prevent, or respond to aggression or other threats to U.S. interests or on the constitutionality of the War Powers Resolution.", "The President went on to state that on the \"important question of the threat posed by Iraq,\" his views and goals and those of Congress were the same. He further observed that he had extensive consultations with Congress in the past months, and that he looked forward to \"continuing close consultation in the months ahead.\" He stated his intent to submit written reports to Congress every 60 days on matters \"relevant to this resolution.\"", "The central element of P.L. 107-243 is the authorization for the President to use the armed forces of the United States", "as he determines to be necessary and appropriate in order to (1) defend the national security of the United States against the continuing threat posed by Iraq; and (2) enforce all relevant United Nations Security Council resolutions regarding Iraq.", "As predicates for the use of force, the statute requires the President to communicate to Congress his determination that the use of diplomatic and other peaceful means will not \"adequately protect the United States ... or ... lead to enforcement of all relevant United Nations Security Council resolutions\" and that the use of force is \"consistent\" with the battle against terrorism. Like P.L. 102-1 and P.L. 107-40 , the statute declares that it is \"intended to constitute specific statutory authorization within the meaning of section 5(b) of the War Powers Resolution.\" It also requires the President to make periodic reports to Congress \"on matters relevant to this joint resolution.\" Finally, the statute expresses Congress' \"support\" for the efforts of the President to obtain \"prompt and decisive action by the Security Council\" to enforce Iraq's compliance with all relevant Security Council resolutions.", "http://www.congress.gov/cgi-lis/bdquery/R?d107:FLD002:@1(107+243) P.L. 107-243 clearly confers broad authority on the President to use force. In contrast to P.L. 102-1 , the authority granted is not limited to the implementation of previously adopted Security Council resolutions concerning Iraq but includes \"all relevant ... resolutions.\" Thus, it appears to incorporate resolutions concerning Iraq that may be adopted by the Security Council in the future as well as those already adopted. The authority also appears to extend beyond compelling Iraq's disarmament to implementing the full range of concerns expressed in those resolutions. Unlike P.L. 107-40 , the President's exercise of the authority granted is not dependent upon a finding that Iraq was associated in some direct way with the September 11, 2001, attacks on the United States. Moreover, the authority conferred can be used for the broad purpose of defending \"the national security of the United States against the continuing threat posed by Iraq.\" Nevertheless, P.L. 107-243 is narrower than P.L. 107-40 in that it limits the authorization for the use of force to Iraq. It also requires as a predicate for the use of force that the President determine that peaceful means cannot suffice and that the use of force against Iraq is consistent with the battle against terrorism. It further limits the force used to that which the President determines is \"necessary and appropriate.\" Finally, as with P.L. 107-40 , the statutory authorization for use of force granted to the President in P.L. 107-243 is not dependent for its exercise upon prior authorization by the U.N. Security Council. In the form that P.L. 107-243 is drafted, and given the context in which it was debated, one could argue that it is a classic example of an authorization vehicle contemplated by the original War Powers Resolution."], "subsections": []}, {"section_title": "Libya 2011: Establishing a New Definition of What Constitutes \"Hostilities\" for Purposes of Full Compliance with the War Powers Resolution?", "paragraphs": ["During U.S. military operations in Libya from mid-March through June 2011, President Barack Obama\u2014having received legal advice from the Office of Legal Counsel (OLC) at the Justice Department and State Department Legal Advisor Harold Koh\u2014took the position that U.S. military operations in Libya did not constitute \"hostilities\" for purposes of the language of the War Powers Resolution nor was the United States involved in a \"war\" in Libya for purposes of Article I of the Constitution. Given those conclusions by the Administration, the President's view was that express statutory authorization from Congress to conduct the military operations in Libya was not required under the framework of the War Powers Resolution.", "The President did comply with the reporting requirements of the War Powers Resolution, when the Libya operation was first launched in March 2011, and followed up with a letter to congressional leaders on May 20, 2011\u2014the 60 th day after U.S. military forces were \"introduced\" into the conflict in Libya. In his May 20 letter, the President pointed out that on April 4, 2011, the United States had transferred responsibility for military operations in Libya to NATO forces, and that from that time forward the U.S. had assumed only a supporting role for the NATO-led operation. This support included, \"since April 23, [36 days after the initial introduction of U.S. military forces into Libya], precision strikes by unmanned aerial vehicles against a limited set of clearly defined targets in support of the NATO-led coalition's efforts.\" The President held from the outset that the actions he had directed were \"in the national security and foreign policy interests of the United States.\" He took them, the President stated, \"pursuant to my constitutional authority to conduct U.S. foreign relations and as Commander in Chief and Chief Executive.\""], "subsections": [{"section_title": "Administration Report to Congress on \"United States Activities in Libya\" Submitted on June 15, 2011", "paragraphs": ["On June 15, 2011 (86 days after the initial introduction of U.S. military forces into Libya), the Obama Administration submitted a 32-page unclassified report, together with a classified annex, that described U.S. actions in Libya to that date. On page 25 of that unclassified report was a \"Legal Analysis\" consisting of one long paragraph summarizing the Administration's view of what the President's authority was to take the actions he had taken in Libya, and his rationale for not having to obtain congressional authorization to do so. This paragraph from the report states", "Given the important U.S. interests served by U.S. military operations in Libya and the limited nature, scope and duration of the anticipated actions, the President had constitutional authority, as Commander in Chief and Chief Executive and pursuant to his foreign affairs powers, to direct such limited military operations abroad. The President is of the view that the current U.S. military operations in Libya are consistent with the War Powers Resolution and do not under that law require further congressional authorization, because U.S. military operations are distinct from the kind of \"hostilities\" contemplated by the Resolution's 60 day termination provision. U.S. forces are playing a constrained and supporting role in a multinational coalition, whose operations are both legitimated by and limited to the terms of a United Nations Security Council Resolution that authorizes the use of force solely to protect civilians and civilian populated areas under attack or threat of attack and to enforce a no-fly zone and an arms embargo. U.S. operations do not involve sustained fighting or active exchanges of fire with hostile forces, nor do they involve the presence of U.S. ground troops, U.S. casualties or a serious threat thereof, or any significant chance of escalation into a conflict characterized by these factors.", "There are various legal arguments available to the Administration to justify use of UAVs for military action abroad against terrorist organizations and individuals. The following addresses the potential interplay of the War Powers Resolution's statutory requirements and the use of UAVs for military operations abroad."], "subsections": []}, {"section_title": "The War Powers Resolution and Military Use of UAVs: Some Considerations", "paragraphs": ["In another situation, it is possible that the President might use the same basic formulation he and his legal advisors set out regarding the application of the War Powers Resolution to U.S. military actions in Libya discussed above. Directly put, if it is accepted that the President's use of UAVs for military attacks against terrorist targets abroad constitutes an action that is limited in scope and duration, and does not require introduction of U.S. military forces directly and physically into \"hostilities,\" then the War Powers Resolution, under this interpretation, does not apply to this presidential action, nor require congressional statutory authorization. The President, under this construction, has sufficient authority to act to defend the United States based only on his own Constitutional authorities as Commander in Chief, as set out in the legal memorandum of the Office of Legal Counsel of April 1, 2011, and in the President's June 15, 2011, report to Congress.", "To date, based on public reports, instances of the use of UAVs to attack terrorist targets abroad have not required a time period in excess of 60 days to execute, nor have U.S. military personnel been placed directly into harm's way or in places where hostilities that could directly involve them were indicated. The very nature of UAV technology permits their employment from locations remote from the places they are used to attack. Thus, the argument could be made that in these circumstances, the War Powers Resolution, as currently drafted, does not require the President to obtain statutory congressional approval for the use of UAVs in military operations abroad.", "In his War Powers Resolution report to Congress, on June 15, 2012, the President noted that he had authorized, during the previous six months, the U.S. military to work closely with the government of Yemen \"to operationally dismantle and ultimately eliminate the terrorist threat posed by al-Qa'ida in the Arabian Peninsula (AQAP), the most active and dangerous affiliate of al-Qa'ida today.\" The President added that", "Our joint efforts have resulted in direct action against a limited number of AQAP operatives and senior leaders in that country who posed a terrorist threat to the United States and our interests.", "While the term \"direct action\" is not defined in the President's June 15, 2012, report quoted above, its context, coupled with public reporting on the U.S. use of UAVs to attack al-Qa'ida terrorist personnel in Yemen, strongly suggests that this is what the President is referring to in this report. The President further notes in this report that similar actions may be undertaken by the United States in the future. He stated:", "The United States is committed to thwarting the efforts of al-Qa'ida and its associated forces to carry out future acts of international terrorism, and we have continued to work with our CT [counter-terrorism] partners to disrupt and degrade the capabilities of al-Qa'ida and its associated forces. As necessary, in response to the terrorist threat, I will direct additional measures against al-Qa'ida, the Taliban, and associated forces to protect U.S. citizens and interests.", "The June 15, 2012, report also stated that a \"classified annex\" to it \"would provide further information\" on such matters. That annex would perhaps elaborate on the specifics of the topics alluded to in the unclassified text, and clarify the express meaning of \"direct action,\" and, in particular, how it was employed by the United States.", "In light of the above considerations, it appears that the existing statutory language of the War Powers Resolution, as interpreted by the Administration, does not require congressional authorization for the President to use UAVs in military operations against terrorists abroad, in Yemen or in other countries. It does appear that the President may believe that in fulfilling his reporting obligations to Congress under the WPR he should at least implicitly note the use of UAVs in military attacks against terrorists when he submits his supplementary WPR report every six months. Perhaps the President also believes he should, in keeping with WPR reporting requirements, report more explicitly about such actions in classified reports every six months. Even though the President has not publicly reported the specific use of UAVs in military operations within 48 hours of their use, private consultations with the congressional leadership about their use may have occurred in individual cases.", "Should Congress agree with what appears to be the President's position regarding his minimal obligations under the War Powers Resolution regarding the military use of UAVs, it need do nothing further. However, should Congress conclude that the War Powers Resolution should unambiguously require statutory congressional authorization of the military use of UAVs for counter-terrorism operations, then it would likely have to amend this statute, unless other mutually agreeable alternatives can be devised with the President."], "subsections": []}]}, {"section_title": "Military Campaign Against the Islamic State", "paragraphs": ["Beginning in June 2014, forces of the Islamic State (IS; also known as ISIL, ISIS, or the Arabic acronym Da' esh ) rapidly expanded their control of several Iraqi cities and threatened attack on Baghdad. These developments caused worries of debilitating destabilization of Iraq's government and increased U.S. concerns for the safety of the U.S. embassy, other U.S. facilities, and U.S. personnel in Iraq, as well as the Iraqi population.", "After first ordering multiple deployments of U.S. troops to Iraq to provide security to diplomatic personnel and facilities, advise Iraqi security forces, and conduct intelligence gathering and reconnaissance, President Obama began ordering U.S. military airstrikes on IS forces in Iraq in August 2014. Later in September, after laying out plans for expanded use of military force against the Islamic State in a televised speech to the American people, the President ordered U.S. military airstrikes in Syria against both IS forces and forces of the \"Khorasan Group,\" identified by the President as part of Al Qaeda. U.S. military operations against the Islamic State have since expanded in limited fashion to Libya; targeted anti-IS airstrikes have been detailed in periodic presidential War Powers Resolution reporting to Congress. In addition, it has been reported that the Trump Administration plans a new deployment of approximately 1,000 U.S. troops to Syria, seemingly signaling further expansion of the anti-IS military campaign. U.S. military engagement in hostilities against these groups in Iraq, Syria, and elsewhere has raised numerous questions in Congress and beyond about the President's authority to use military force in this conflict. Questions concerning President Obama's WPR notifications to Congress and his eventual reliance on existing authorizations for use of military force to meet the requirements of the WPR have arisen, and Congress has considered proposals to enact a new authorization for use of military force targeting the Islamic State, including a February 2015 proposal from President Obama. The Trump Administration has continued the previous Administration's reliance on existing AUMFs to conduct the military campaign against the Islamic State, and many Members of Congress remain concerned and active in calling for congressional action to oversee, authorize, or limit presidential authority to continue the use of military force."], "subsections": [{"section_title": "Presidential Reporting on Individual Missions and the War Powers Resolution's Withdrawal Requirement", "paragraphs": ["President Obama began providing WPR notifications concerning the U.S. military response in Iraq to the Islamic State crisis in June 2014. On June 16, 2014, President Obama notified the Speaker of the House and President pro tempore of the Senate, \"consistent with the War Powers Resolution,\" that he had deployed combat-equipped troops to Iraq to provide security for U.S. diplomatic personnel and facilities. On August 8, 2014, the President sent the first notification during the current crisis concerning the use of military force in Iraq. Prior to the President's announcement of a wider, sustained military campaign against the Islamic State on September 10, 2014, President Obama made seven WPR notifications for deployments and actions in Iraq, four concerning combat-equipped troop deployments with no hostilities active or imminent, and three concerning airstrikes against ISIL forces", "June 16, 2014, Security for U.S. Embassy Baghdad: notification informed Congress of the deployment of up to 275 U.S. Armed Forces personnel to Iraq to provide support and security for U.S. personnel and the U.S. Embassy in Baghdad. June 26, 2014, Military Advisers: notification informed Congress of the deployment of up to approximately 300 additional U.S. Armed Forces personnel in Iraq to \"assess how we can best train, advise, and support Iraqi security forces and to establish joint operations centers with Iraqi security forces to share intelligence and coordinate planning to confront the threat posed by ISIL,\" and for presidential orders to \"increase intelligence, surveillance, and reconnaissance that is focused on the threat posed by the Islamic State of Iraq and the Levant (ISIL).\" June 30, 2014, Increased Security Deployment: notification informed Congress of the deployment of up to approximately 200 additional U.S. Armed Forces personnel to Iraq to \"reinforce security at the U.S. Embassy, its support facilities, and the Baghdad International Airport.\" August 8, 2014, Airstrikes and Humanitarian Assistance and Intervention: notification informed Congress of airstrikes to protect U.S. personnel in Erbil and to assist a humanitarian mission to protect Iraqi civilians trapped on Mount Sinjar in northern Iraq. August 17, 2014, Airstrikes to Assist Iraq, Protect Civilians, Provide Security for U.S. Facilities and Personnel: notification informed Congress of airstrikes against ISIL forces to assist Iraqi security forces in retaking Mosul Dam in northern Iraq. September 1, 2014, Airstrikes to Assist Iraq, Humanitarian Assistance and Intervention: notification informed Congress of airstrikes near Amirli in northern Iraq targeting ISIL forces besieging the town and as part of a mission to provide humanitarian assistance. September 5, 2014, Increased Security Deployment: notification explained the deployment of 350 additional combat-equipped troops to provide security for diplomatic facilities and personnel in Baghdad. September 8, 2014, Airstrikes to Assist Iraq, Protect Civilians, Provide Security for U.S. Facilities and Personnel: notification of airstrikes \"in the vicinity of the Haditha Dam in support of Iraqi forces in their efforts to retain control of and defend this critical infrastructure site from ISIL,\" stating that \"[t]hese additional military operations will be limited in their scope and duration as necessary to address this threat and prevent endangerment of U.S. personnel and facilities and large numbers of Iraqi civilians.\"", "In each of these notifications, President Obama cited no war declaration or legislative authorization for use of military force that authorized his actions, but instead relied on his constitutional authority under Article II as Commander in Chief and Chief Executive. Without such legislative authority, any engagement in hostilities could have been considered to trigger the 60-day withdrawal requirement under Section 5(b). Although there was no indication from the President, the deployments announced in the June 16, June 24, June 30, and September 5 WPR notifications could have been construed as falling under Section 4(a)(2) and/or (3) of the WPR; such interpretation would not have triggered the WPR withdrawal requirement. The airstrikes notifications of August 8, August 17, and September 1, 2014, seem more likely to concern activities considered hostilities under the WPR, and therefore could be considered Section 4(a)(1) notifications, triggering the 60-day withdrawal period, although again, neither the President nor Congress took any action to definitively characterize such actions as triggering the WPR withdrawal requirement.", "President Obama's multiple notifications, some of which involved hostilities, raised questions about whether multiple WPR notifications for short-term, circumscribed military action in relation to the same enemy in the same conflict should be considered separately or be combined for purposes of the operation of the WPR withdrawal requirement. Analysts and Members of Congress struggled with how to determine whether the 60-day period was running, on what date it began, or whether it had reset each time one of the three discrete military operations had ceased. From the description in the airstrikes notifications, the Mount Sinjar, Mosul Dam, and Amirli operations involved operations by U.S. Armed Forces conducting airstrikes that lasted only a few days at most, such forces engaged in airstrikes likely entered, fought, and withdrew from Iraqi airspace in a matter of hours, and the troops that remained in Iraq after the airstrikes were apparently not engaged in hostilities or present where hostilities were imminent. In addition, the Obama Administration has been careful to state that the first airstrikes were solely to halt the advance of ISIL on Erbil and break the siege of Mount Sinjar, both of which were accomplished at the end of operations, that the second airstrikes were to help with the recapture of Mosul Dam, which was also completed, and that the third airstrikes were solely to protect ISIL-besieged Iraqi citizens in Amirli, and that objective also seemed to have been met, each within a matter of days. ", "Some analysts raised the question whether the President's frequent notifications, each explaining a discrete operation that would last only a few days, were intended simply to ensure that Congress was kept informed in detail about ongoing U.S. military action in Iraq or, alternatively, whether they were intended to have some consequence for assessing when and whether the WPR's 60-day deadline for termination of hostilities begins and ends\u2014that is to say, that each of the particular actions reported constitutes a separate military action that is subject to its own 60-day deadline for termination. Because the operations were short in duration, considering each operation to operate under its own 60-day period, despite seemingly being part of a larger campaign against one enemy, would arguably undercut the WPR's goal of ensuring that U.S. forces were not engaged in hostilities against an enemy force for a sustained period of time without congressional authorization.", "Notifications of discrete, time-limited deployments and hostilities have occurred in the past. Since Congress enacted the War Powers Resolution, Presidents have made Section 4 notifications that refer to military deployments and operations, including the use of military force, that are relatively small in scope and duration, involving individual strikes. These limited WPR notifications, however, often involve either planned strikes against foreign targets that can be regarded as isolated and not part of a larger, connected military campaign against an enemy, or address one-time defensive military action against armed attack."], "subsections": []}, {"section_title": "Presidential Reliance on Prior Existing Authorizations to Meet War Powers Resolution Requirements", "paragraphs": ["After relying on Article II authority as Commander in Chief and Chief Executive in his first seven WPR notifications concerning military action against the Islamic State, President Obama changed course and began relying on existing authorizations for the continuing and expanding military campaign. Obama Administration officials and the President's September 2014 notifications to Congress for airstrikes and other actions in Iraq and Syria stated that two enacted authorizations for use of military force (AUMFs) currently in force, the Authorization for Use of Military Force (2001 AUMF; P.L. 107-40 ), and the Authorization for Use of Military Force Against Iraq Resolution of 2002 (2002 AUMF; P.L. 107-243 ), provide authorization for certain U.S. military strikes against the Islamic State in Iraq and Syria, as well as the Khorasan Group of Al Qaeda in Syria. As it regarded the requirements of the WPR, President Obama by citing 2001 and 2002 AUMF authority provided a legislative basis for his decision to engage U.S. Armed Forces in hostilities against the Islamic State and other groups, which would meet the WPR's notification requirements, and prevent application of Section 5(b)'s 60-day withdrawal requirement and the WPR's provisions for consideration of legislative proposals to approve or disapprove of his actions. Trump Administration officials have also argued that existing legislative authority covers U.S. military operations against the Islamic State in Iraq, Syria, and elsewhere.", "Congress enacted the 2001 AUMF in response to the September 11, 2001, terrorist attacks, authorizing the President to use military force against \"those nations, organizations, or persons he determines planned, authorized, committed, or aided the terrorist attacks that occurred on September 11, 2001, or harbored such organizations or persons....\" The executive branch has since relied on the 2001 AUMF to fight Al Qaeda and the Taliban in Afghanistan, and has stated that the 2001 AUMF authorizes limited, targeted U.S. military strikes against Al Qaeda and associated forces that have been carried out in other countries, including Pakistan, Yemen, Somalia, and Libya. President Obama's reliance on 2001 AUMF authority to undertake a large-scale, long-term military campaign outside Afghanistan to fight the Islamic State represented to some observers an expansion of the interpretation of 2001 AUMF authority. The Obama Administration stated that the Islamic State can be targeted under the 2001 AUMF because its predecessor organization, Al Qaeda in Iraq, communicated and coordinated with Al Qaeda; the Islamic State currently has ties with Al Qaeda fighter and operatives; the Islamic State employs tactics similar to Al Qaeda; and the Islamic State, with its intentions of creating a new Islamic caliphate, is the \"true inheritor of Osama bin Laden's legacy.\"", "The 2002 AUMF authorizes the President to use U.S. Armed Forces to enforce relevant United Nations Security Council resolutions and to \"defend the national security of the United States against the continuing threat posed by Iraq....\" Although the 2002 AUMF has no sunset provision and Congress has not repealed it, one view is that after the establishment of a new Iraqi government, the restoration of full Iraqi sovereignty, and the U.S. withdrawal from Iraq, all completed by the end of 2011, the 2002 AUMF no longer has force. During the Obama Administration, executive branch officials voiced support for repealing the 2002 AUMF, reflecting the belief that it is no longer needed. Conversely, another view asserts that, although its preamble focuses on the Saddam Hussein regime and its WMD programs, the 2002 AUMF's authorization language is broad, referring only to a \"continuing threat\" from Iraq, and that the 2002 AUMF could provide authority to defend against threats to Iraq as well as threats posed by Iraq. Indeed, 2002 AUMF authority was the basis for the U.S. military presence in Iraq from the fall of Saddam Hussein and completion of the WMD search to its 2011 withdrawal, a span of over eight years, a period that could be characterized as dealing with threats to Iraq rather than threats from Iraq. The IS threat in Iraq could therefore be seen as breathing new life into 2002 AUMF authority. In addition, former supporters of Saddam Hussein reportedly provide support to the Islamic State, possibly forming a link between the original aims of the 2002 AUMF and any future actions taken against the Islamic State."], "subsections": []}, {"section_title": "Congressional Action Related to War Powers Resolution Requirements", "paragraphs": ["A number of legislative proposals have been introduced responding to presidential decisions to deploy U.S. Armed Forces and order the use of military force against the Islamic State and other groups. Some Members of Congress have proposed legislation restricting military action against the Islamic State under the 2001 and 2002 AUMFs, repealing these authorizations, and authorizing military force against the Islamic State in a new standalone AUMF. Proposals related to the WPR and its operation generally have been introduced during this period as well, possibly spurred by current U.S. use of military force against the Islamic State.", "On June 19, 2014, three days after President Obama's first WPR notification concerning new deployments to Iraq, Congress considered two amendments to a Department of Defense appropriations bill ( H.R. 4870 , 113 th Congress), the first of which prohibiting the use of funds appropriated to the department pursuant to the 2002 AUMF, and the second prohibiting use of such funds under the 2001 AUMF after December 31, 2014. Both amendments were defeated by roll call vote.", "Some Members of Congress also proposed legislation to require the President to either withdraw troops from Iraq pursuant to the procedures of the WPR or seek a new authorization for use of military force. A concurrent resolution ( H.Con.Res. 105 , 113th Congress) was introduced in the House of Representatives on July 11, 2014, requiring withdrawal from Iraq.", "Section 1. Removal of United States Armed F orces from I raq.", "Pursuant to section 5(c) of the War Powers Resolution (50 U.S.C. 1544(c)), Congress directs the President to remove United States Armed Forces, other than Armed Forces required to protect United States diplomatic facilities and personnel, from Iraq\u2014", "(1) by no later than the end of the period of 30 days beginning on the day on which this concurrent resolution is adopted; or", "(2) if the President determines that it is not safe to remove such United States Armed Forces before the end of that period, by no later than December 31, 2014, or such earlier date as the President determines that the Armed Forces can safely be removed.", "H.Con.Res. 105 was later amended to remove the direction to withdraw U.S. Armed Forces, replacing it with language stating that the \"President shall not deploy or maintain United States Armed Forces in a sustained combat role in Iraq without specific statutory authorization for such use enacted after the date of the adoption of this concurrent resolution,\" and that nothing in the concurrent resolution supersedes the requirements of the WPR. This version of H.Con.Res. 105 passed the House by a vote of 370-40 on July 25, 2014. It was received in the Senate on July 28, 2014 and referred to the Senate Committee on Foreign Relations; no further action was taken.", "After President Obama ordered airstrikes against IS forces in Iraq in August 2014, debate in Congress for the most part turned toward crafting a new authorization for use of military force against the Islamic State (IS AUMF), which would meet the requirements for continued military action after 60 days, rather than proposals prohibiting the use of funds for military operations or requiring an end to hostilities and withdrawal of U.S. Armed Forces from Iraq. Beginning in September 2014, several proposed IS AUMFs were introduced, many with provisions intended to define and circumscribe U.S. military engagement, likely a reaction to a perceived over-expansive interpretation and application of the 2001 AUMF by the executive branch since its initial enactment. Provisions in these proposals that would have restricted or limited Congress's overall grant of authority included", "limiting the type of military action or military unit to be utilized, including broad prohibitions on the use of U.S. ground forces; limiting the geographic area where military action was authorized; limiting the lawful targets of military force, including limitations on targeting \"associated forces\" of the Islamic State; and terminating the authority automatically after a specific time period, from 120 days to three years after enactment.", "One IS AUMF proposal, S.J.Res. 47 (113 th Congress), was debated, amended, and reported favorably to the full Senate by the Committee on Foreign Relations. After the resolution was reported to the Senate, no further action was taken in the 113 th Congress. ", "On February 11, 2015, President Obama provided Congress with his draft proposal for a new IS AUMF, The proposal would have authorized the use of U.S. Armed Forces that he deems \"necessary and appropriate\" against the Islamic State and associated persons or forces, meaning \"individuals and organizations fighting for, on behalf of, or alongside ISIL or any closely-related successor entity in hostilities against the United States or its coalition partners.\" The authorization does not include authority for the use of U.S. Armed Forces for \"enduring offensive ground combat operations.\" The proposal's authorization would terminate three years after enactment. The President would be required to report to Congress at least every six months on actions taken under the proposed IS AUMF, matching the timing of the reporting requirement in Section 4(c) of the WPR.", "Since President Obama's proposal, Members of Congress have continued to introduce new IS AUMFs. Many of these proposals, however, have not included provisions limiting the authority provided to the President to use military force against the Islamic State as several previous proposals had. Some of the proposals do contain a three-year sunset provision for such authority, however. Conversely, a few legislative proposals have been introduced to limit the President's use of military force against the Islamic State. H.Con.Res. 55 (114 th Congress), directing the President, pursuant to Section 5(c) of the War Powers Resolution, to remove U.S. Armed Forces deployed after August 7, 2014, in Iraq and Syria, was similar to the concurrent resolution from the 113 th Congress discussed above. It failed passage in the House by a vote of 139-288 on June 17, 2015. After the anti-IS strikes the United States conducted in Libya, an amendment was offered in the 114 th Congress to the House version of the Department of Defense Appropriations Act, 2017 ( H.Amdt. 1213 to H.R. 5293 , 114 th Congress), prohibiting the use of funds to engage in hostilities in Libya in contravention of the War Powers Resolution. The amendment failed passage by voice vote on June 16, 2016. Provisions in the House version of the Defense appropriations bill in the 115 th Congress (Sections 8115 and 9019 of H.R. 1301 , 115 th Congress) would prohibit the use of appropriated funds for deployments of U.S. Armed Forces in contravention of the consultation and reporting requirements of Sections 3 and 4 of the War Powers Resolution.", "In addition, during the nearly three years since the U.S. military campaign against the Islamic State began, a number of proposals to repeal or sunset the 2001 and 2002 AUMFs have been introduced, both as part of IS AUMF and war declaration proposals as well as contained in standalone legislative vehicles. Proposed repeals were introduced both before and after President Obama announced his reliance on 2001 and 2002 AUMF authority for his decision to order a wider military campaign against IS and other forces in September 2014, and have continued into the first session of the 115 th Congress."], "subsections": []}]}, {"section_title": "Niger: Hostilities Involving U.S. Forces Operating Under Title 10 Authorities", "paragraphs": ["An incident involving casualties among U.S. Armed Forces deployed to provide nonlethal assistance under Title 10, U.S. Code authorities, raised the question of whether previous presidential reporting of a combat-equipped deployment is sufficient when hostilities break out involving such deployed forces, and whether the exercise of Title 10 authorities to train and assist foreign militaries might necessarily involve authorities for the use of military force in some cases. On October 4, 2017, four U.S. soldiers were killed and two were wounded when they and their Nigerien partners were ambushed in western Niger while on a reconnaissance patrol as part of overall U.S. counterterrorism operations in Niger and the Sahel region generally. The Department of Defense (DOD) later identified those responsible for the ambush as members of a group affiliated with the Islamic State, the Islamic State in the Greater Sahel (ISGS). A DOD investigation later revealed that the actions of U.S. forces involved in the patrol had improperly exposed the troops to potential attack and harm, outside the mission approved under applicable Title 10 training and assistance authority. The Trump Administration later reported another ISGS attack on U.S. and Nigerien troops on December 6, 2017.", "Presidential reporting to Congress consistent with the War Powers Resolution with regard to U.S. Armed Forces operating in Niger began several years before the October 2017 ambush. President Obama, on February 22, 2013, notified Congress of the deployment of U.S. Armed Forces to that country. The notification stated,", "This deployment will provide support for intelligence collection and will also facilitate intelligence sharing with French forces conducting operations in Mali, and with other partners in the region\u2026. The recently deployed forces have deployed with weapons for the purpose of providing their own force protection and security. ", "Providing an explanation of applicable constitutional and/or legislative authority, President Obama stated that he had directed the deployment \"pursuant to my constitutional authority to conduct U.S. foreign relations and as Commander in Chief and Chief Executive.\" Subsequent notifications updating Congress on the status of U.S. Armed Forces in Niger have been included regularly in the six-month periodic reports under the War Powers Resolution, reflecting an increase of total numbers of troops from approximately 40 in early 2013 to approximately 800 as of the June 2018 notification. The notifications referenced only activities for \"support for intelligence collection [and] intelligence sharing with French forces in Mali, and with other forces in the region\" until the June 2017 reporting, where it described U.S. forces in Niger and elsewhere in the Sahel region as \"provid[ing] a wide variety of support to African partners conducting counterterrorism operations in the region,\" seemingly encompassing a wider possible range of CT operations for U.S. troops.", "Some Members of Congress expressed surprise after the deaths of U.S. troops in Niger, not only regarding the circumstances of the ambush but also the overall mission and activities of U.S. Armed Forces in Niger overall. Despite certain presidential and other DOD reporting on U.S. military operations in Niger and the Lake Chad Basin and Sahel region in general, there was still a belief among some Members that Congress had not been adequately informed of these operations, especially as their scope and purpose had seemingly expanded from 2013 to 2017. U.S. Armed Forces deployed while equipped for combat were operating in Niger and many other countries in Africa and elsewhere under Title 10 authority to assist foreign militaries: it seemed to some that such forces might at any time be engaged in hostilities against terrorist groups or other enemies alongside foreign military partners, just as had occurred in Niger. In such circumstances, Congress would be notified of a Title 10 deployment, but would have little chance to authorize or otherwise offer input concerning a decision to use military force or place U.S. troops in a situation where such use of force might be necessary.", "A question in the context of the Niger situation is whether the presidential reporting requirements in the War Powers Resolution might have been utilized to provide more timely information to Congress. As described earlier in this report, Section 4(a) of the War Powers Resolution requires the President, absent a relevant declaration of war from Congress, to notify Congress within 48 hours after introducing U.S. Armed Forces \"into hostilities or situations where imminent involvement in hostilities is clearly indicated by the circumstances\" (paragraph (a)(1)), or, short of hostilities, introducing U.S. combat-equipped armed forces into a foreign country (paragraphs (a)(2) or (3)). Although the executive branch maintains that hostilities occur only with exchanges of fire between U.S. and enemy forces, the legislative history of the War Powers Resolution refers to hostilities as also including \"a state of confrontation in which no shots have been fired but where there is a clear and present danger of armed conflict,\" and that imminent hostilities means \"a situation in which there is a clear potential either for such a state of confrontation or for actual armed conflict.\" A original deployment absent imminent or active hostilities reported under Section 4(a)(2) or (3) might later be expected to generate a new notification under Section 4(a)(1), if hostilities were to commence. ", "In the case of the deployments to Niger beginning in 2013, presidential reporting first referred only to intelligence support in describing the U.S. mission, but later described broader U.S. military operations to include conducting patrols with Nigerien forces. With U.S. forces placed in the same \"state of confrontation\" and possible active hostilities with terrorist and other enemy groups as their Nigerien partners, a presidential report under Section 4(a)(1) of the War Powers Resolution, requiring reporting within 48 hours, might have been expected. Similarly, when the extended firefight between U.S. and Nigerien forces and ISGS elements occurred October 4, 2017, resulting in U.S. dead and wounded, a Section 4(a)(1) might also have been expected within 48 hours of the exchange of fire, but no such notification was made. The President did, however, include information concerning the ambush in Niger in his December 2017 six-month periodic reporting consistent with Section 4(c) of the War Powers Resolution.", "As the Niger operation represented a use of military force, however limited, in a new foreign country, some observers and Members of Congress raised questions about the U.S. military activities leading up to the October 2017 ambush and the possibility that further hostilities might occur in Niger and other foreign countries where U.S. Armed Forces were engaged in close cooperation with partner forces facing active enemy groups. Of particular interest was whether the use of military force in Niger by U.S. troops would be considered authorized by the Authorization for Use of Military Force (2001 AUMF; P.L. 107-40 ; 50 U.S.C. \u00a71541 note), which had been applied to the use of military force against Al Qaeda, the Taliban, the Islamic State, and several \"associated forces\" in Afghanistan, Iraq, Libya, Somalia, Syria, and Yemen. ", "Trump Administration officials, including Secretary of Defense James Mattis, initially asserted that U.S. troops were operating under Title 10 training and assistance authorities, and were not acting under 2001 AUMF authority. Later Administration statements seemed to call this initial assertion into question, however. DOD identified the attackers in the two Niger incidents as elements of the Islamic State, a group the executive branch had already determined was a targetable entity under the 2001 AUMF. These IS elements were eventually referred to as an IS-associated force known as ISGS, or ISIS-GS in DOD documents. A May 2018 DOD report on the October 2017 ambush stated that U.S. Special Operations Forces in Niger \"have the authority to conduct CT operations with partner Nigerien forces,\" including operations \"targeting \u2026 key member[s] of ISIS-GS,\" seemingly outside nonlethal Title 10 authorities. In a reversal of initial statements, in March 2018 the Administration explained that the 2001 AUMF did in fact apply to U.S. use of military force in Niger:", "On October 4, 2017 and December 6, 2017, those U.S. forces and their Nigerien partner forces were attacked by forces assessed to be elements of ISIS, a group within the scope of the 2001 AUMF, and responded with force in self-defense. The Administration has concluded that this use of force was also conducted pursuant to the 2001 AUMF.", "Despite finding that 2001 AUMF authority applies to the use of military force in Niger, DOD reportedly has also explained that U.S. use of military force in Niger and in other foreign countries where U.S. Armed Forces are operating under Title 10 is authorized under the \"collective self-defense supplemental rule of engagement,\" which permits U.S. Armed Forces working alongside foreign partner forces to use military force against enemies who attack either U.S. forces or partner forces, including enemies not authorized to be targeted under \"by the 2001 AUMF or other congressional authorizations for the use of force.\" While utilization of self-defense and collective self-defense concepts would seem to be necessary in individual instances where U.S. forces conducting training and other assistance operations and their foreign partners come under attack, some argue such concepts might be applied to permit ongoing uses of military force where no congressional authorization exists. From the standpoint of the operation of the War Powers Resolution, this might be expected to produce more situations in which presidential notifications under Section 4(a)(2) or (3), reporting combat-equipped deployments but no hostilities, are used to satisfy presidential reporting requirements without additional reporting of hostilities under Section 4(a)(1), as initially occurred in the Niger situation. This might make it more difficult for Congress to engage in a timely manner as to the details of individual instances of the introduction of U.S. Armed Forces into hostilities, their estimated scope and duration, and the proper constitutional and legislative authority for such uses of military force."], "subsections": []}, {"section_title": "Yemen: \"Hostilities\" and Support of Foreign Military Action", "paragraphs": ["Responding to the outbreak of civil war in Yemen and the Ansar Allah/Houthi movement's ouster of the Yemeni government in 2015, Saudi Arabia in the intervening years has led a coalition of countries in a military campaign to reverse gains made by the Houthi and restore Yemen's government to power. The air forces of the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE) have continued to conduct airstrikes against Houthi targets in Yemen during this time. Houthi forces have conducted cross border missile and mortar attacks against Saudi Arabia and the UAE, with some apparent support from Iran. U.S. Armed Forces have provided discrete support to some Saudi and Emirati military operations against Houthi forces, with current operations reported to be specifically focused on Houthi missile force targets. ", "Operating pursuant to bilateral agreements, the United States has provided \"the KSA-led coalition defense articles and services, including air-to-air refueling; certain intelligence support; and military advice, including advice regarding compliance with the law of armed conflict and best practices for reducing the risk of civilian casualties,\" according to the Department of Defense. In June 2018, President Trump notified Congress, consistent with the War Powers Resolution, that \"United States Armed Forces, in a non-combat role, have continued to provide military advice and limited information, logistics, and other support to regional forces combatting the Houthi insurgency in Yemen. United States forces are present in Saudi Arabia for this purpose.\" On November 9, 2018, the United States and Saudi Arabia announced that U.S. Armed Forces would cease air-to-air refueling of Saudi and Emirati aircraft engaged in the counter-Houthi campaign in Yemen. U.S. refueling missions had resupplied some Saudi and Emirati aircraft since 2015 pursuant to bilateral acquisition and cross-servicing agreements.", "In a bid to counter weapons proliferation to the Houthi and limit opportunities for Houthi exploitation of commerce, Saudi forces have imposed strict limits on the transit of vessels via air and sea to Yemen since 2015. These limits have been moderated to some extent by coalition coordination with a U.N. Verification and Inspection Mechanism (UNVIM) but nevertheless have contributed to shortages of food, fuel, and commercial products across the country. Along with ongoing conflict and disruption of infrastructure, the coalition-imposed limits have become a key factor in what the United Nations and various humanitarian and human rights organizations describe as a humanitarian emergency in Yemen. As of November 2018, U.N. officials have warned that as many as 14 million Yemenis are at risk of famine because of the ongoing conflict and related restrictions and disruptions of shipments of food, fuel, and goods. ", "Military operations by the KSA-led coalition, especially some air-to-ground strikes by Saudi and other coalition aircraft, also have been identified as having caused high levels of civilian casualties and destruction of civilian infrastructure. KSA-led coalition officials state they are committed to protecting civilians, improving their military operations, and supporting humanitarian access and aid delivery programs. Saudi Arabia and the UAE continue to pledge considerable financial support to relief efforts while, until recently, carrying forward military campaigns aimed at evicting Houthi fighters from the Red Sea port of Hodeidah and the capital Sanaa, and targeting Houthi leaders and forces involved in cross-border attacks. In December 2018, the parties to the conflict met in Stockholm, Sweden, for talks on the conflict, ultimately ending in a ceasefire agreement to be implemented with assistance from the United Nations. In February 2019, it was announced that the Yemeni government and the Houthis had agreed to execute a significant part of the Stockholm agreement, withdrawing troops from Hodeidah. But subsequent reports that fighting has intensified in the north of Yemen, among other escalations, continue to cast doubt on the overall durability of the ceasefire and future prospects for an end to the conflict.", "Some Members of Congress have voiced concerns about the overall situation in Yemen, the actions of the Saudi military in its prosecution of its conflict with the Houthis, and the involvement of the U.S. military to date in the KSA-led campaign. Some Members have also argued that current U.S. operations to support the KSA-led campaign in Yemen represent a use of U.S. Armed Forces requiring a new, specific authorization from Congress."], "subsections": [{"section_title": "WPR-Related Congressional Action to Disapprove U.S. Military Involvement", "paragraphs": ["Driven by a range of Yemen-related concerns, Representative Ro Khanna and three co-sponsors on September 27, 2017, introduced a concurrent resolution ( H.Con.Res. 81 ) \"pursuant to section 5(c) of the War Powers Resolution\" directing the President \"to remove United States Armed Forces from hostilities in the Republic of Yemen, except United States Armed Forces engaged in operations directed at Al Qaeda in the Arabian Peninsula or associated forces, by not later than the date that is 30 days after the date of the adoption\" of the resolution. In the preamble, the resolution asserts that U.S. Armed Forces \"have been involved in hostilities between Saudi-led forces and the Houthi-Saleh alliance, including\" airstrike targeting assistance and mid-air refueling of Saudi and UAE aircraft. The resolution further states that \"[n]o authorization for the use of United States Armed Forces with respect to the conflict between Saudi-led forces and the Houthi-Saleh alliance in Yemen has been enacted, and no provision of law authorizes the provision of midair refueling services to warplanes of Saudi Arabia or the United Arab Emirates that are engaged in such conflict.\"", "H.Con.Res. 81 was treated as a privileged resolution entitled to expedited consideration under Section 7 of the WPR. On October 11, the House adopted by unanimous consent a motion to consider the resolution under Section 7 expedited procedures, but delayed the operation of such procedures until not earlier than November 2, 2017.", "Before expedited procedures became applicable to H.Con.Res. 81 , proponents of the resolution, leaders of both parties in the House, and the House Foreign Affairs and Rules Committees, agreed to consider a separate simple resolution on the situation in Yemen, H.Res. 599, which was introduced by Representative Khanna on November 1, 2017. On the same day, the House adopted a motion stating that Section 7 of the WPR should not apply to H.Con.Res. 81 , and that it was in order to consider H.Res. 599 at any time, with one hour of debate on H.Res. 599 to take place before a vote of the full House. Like H.Con.Res. 81 , the language of H.Res. 599 also included the assertion, among other things, that Congress has not enacted an authorization to use military force against parties to the Yemeni civil war not otherwise subject to the 2001 or 2002 AUMFs, but did not require a withdrawal of U.S. Armed Forces from any hostilities related to the conflict in Yemen. After floor debate, the House voted 366-30 to adopt H.Res. 599 on November 13, 2017.", "The Senate subsequently took up a similar proposal to H.Con.Res. 81 . On February 28, 2018, Senator Bernard Sanders and two co-sponsors introduced S.J.Res. 54, a joint resolution requiring the President to remove U.S. Armed Forces from hostilities \"in or affecting\" Yemen, except forces fighting Al Qaeda or its associated forces. Because it is a joint resolution directing a termination of hostilities, S.J.Res. 54 relied on the authority provided in Section 1013 of the Department of State Authorization Act, Fiscal Years 1984 and 1985 (\"Section 1013\"; 50 U.S.C. \u00a71546a), rather than Section 5(c) of the WPR. Incorporating the expedited procedure in Section 601(b) of the International Security Assistance and Arms Export Control Act of 1976 (\"Section 601(b)\"; P.L. 94-329 ; 90 Stat. 765), Section 1013 authorizes a motion to discharge a joint resolution such as S.J.Res. 54 from the Foreign Relations Committee if the committee has not reported the resolution to the full Senate within 10 calendar days.", "In accordance with this provision, on March 20, 2018, Senator Sanders made a motion to discharge S.J.Res. 54 from the committee. Senator Bob Corker, Chairman of the Foreign Relations Committee, arguing that the Foreign Relations Committee had committed to active oversight over the Yemen situation and had not yet been able to complete such oversight, moved to table the motion to discharge. After debate, the motion to table the motion to discharge S.J.Res. 54 was adopted by a vote of 55-44 on March 20, 2018.", "On September 26, 2018, Representative Khanna and 26 cosponsors introduced H.Con.Res. 138 , another concurrent resolution to disapprove U.S. military activities with regard to Yemen and to require removal of U.S. Armed Forces from hostilities related to the KSA-led counter-Houthi campaign. The resolution is similar in its aims to H.Con.Res. 81 , but contains new language, including a specific reference to Section 8(c) of the WPR (50 U.S.C. \u00a71547(c)):", "(4) Section 8(c) of the War Powers Resolution (50 U.S.C. 1547(c)) defines the introduction of United States Armed Forces to include \"the assignment of members of such armed forces to command, coordinate, participate in the movement of, or accompany the regular or irregular military forces of any foreign country or government when such military forces are engaged, or there exists an imminent threat that such forces will become engaged, in hostilities\".", "In addition, H.Con.Res. 138 , in its provision directing removal of U.S. Armed Forces, references military activities authorized pursuant to the Authorization for Use of Military Force (2001 AUMF; P.L. 107-40 ; 50 U.S.C. \u00a71541 note), rather than describing counterterrorism operations against Al Qaeda in the Arabian Peninsula (AQAP) in Yemen, as does H.Con.Res. 81 . The executive branch has relied on 2001 AUMF authority to conduct its anti-AQAP operations in Yemen, but some Members of Congress have long disagreed with what they see as the executive branch's over-expansive interpretation of 2001 AUMF authority, including its application in Yemen.", "On November 13, 2018, the House Rules Committee voted to submit a separate resolution to the full House that would, among other things, rescind the applicability of the expedited consideration privilege in Section 7 of the WPR (50 U.S.C. \u00a71546) to H.Con.Res. 138 . The next day, November 14, the full House voted 201-187 to adopt this resolution, H.Res. 1142, thus effectively \"deprivileging\" H.Con.Res. 138 in the House. On November 29, 2018, Representative Khanna introduced H.Con.Res. 142 , containing identical language to H.Con.Res. 138 .", "In the Senate, S.J.Res. 54 became the pending business of the chamber once again in the last week of November 2018, with Senator Sanders making a motion to discharge the Senate disapproval resolution from the Foreign Relations Committee and subject the resolution to debate in the full Senate under the Section 1013 provisions described above. On November 28, 2018, the Senate voted 63-37 in favor of the motion to discharge, clearing the way for debate on the measure in the Senate.", "Senate Consideration of S.J.Res. 54", "Consideration of S.J.Res. 54 in the Senate proceeded in December 2018 under Section 601(b) procedure. After the Senate's adoption of the motion to discharge S.J.Res. 54 from the Foreign Relations Committee, Section 601(b) states that a motion to consider the resolution in the Senate is in order and is privileged. Senator Sanders made such a motion to proceed to consideration on December 12, 2018, which the Senate adopted by a 60-39 vote. The Senate also agreed, by a vote of 96-3, to a point of order that any amendments offered under Section 1013 must be germane to the underlying subject of S.J.Res. 54, U.S. involvement in the conflict in Yemen. The Senate then proceeded to debate S.J.Res. 54 on December 12-13, 2018. The Senators who spoke on the floor raised a number of issues related both to the substance of the resolution, as well as the appropriateness of applying expedited consideration procedures under Section 1013 to a resolution in this particular instance. ", "Supporters of the resolution argued that U.S. military activities to support the KSA-led counter-Houthi campaign constituted involvement in a war amounting to \"hostilities\" under the War Powers Resolution and Section 1013, citing language in the War Powers Resolution that refers to U.S. forces engaging in activities to \"command, coordinate, participate in the movement of, or accompany\" foreign forces, and characterizing U.S. forces supporting the KSA-led coalition as co-belligerents in the Yemen war. Citing Congress's sole power to declare war under the Constitution, supporters stated that because Congress had not authorized U.S. involvement in the war in Yemen, U.S. involvement in the war was unconstitutional and therefore must end. Senators opposed to the resolution responded that U.S. activities to provide aircraft refueling, targeting assistance, and intelligence sharing to the KSA-led coalition did not amount to \"hostilities\" under Section 1013 or the War Powers Resolution, because U.S. Armed Forces were not involved in \"direct military action\" against Houthi forces, nor were they operating alongside coalition forces engaging in such direct action. Characterizing U.S. support operations as hostilities in this case, they argued, would set a precedent that would prevent the U.S. military from carrying out many of the support operations it conducts around the world, including in crisis situations, unless Congress specifically authorized such use of the military. ", "With regard to the resolution's substance and purpose, proponents argued that U.S. involvement in the KSA-led campaign against the Houthis was supporting actions that had led to a severe humanitarian crisis and large numbers of civilian casualties. They asserted that stopping military assistance to the KSA-led campaign and a shift to diplomatic and multilateral tools would better alleviate the suffering of the Yemeni population. Some senators also stressed the troubling actions of the Saudi regime generally on human rights issues, especially the Saudi government's actions in the killing of journalist Jamal Khashoggi, and stated that continued support for the Saudi regime for its war in Yemen was not appropriate. Other senators countered these arguments, stating that continued U.S. involvement would better ensure fewer civilian deaths and an improvement in the humanitarian situation in Yemen. They also argued that withdrawing support from the KSA-led campaign would weaken Saudi Arabia and strengthen Iran, which has supported the Houthis, in Yemen. Opponents also raised the possibility that U.S. interests and national security might be threatened by terminating U.S. support, including through an increased risk to terrorist attacks against the United States and U.S. forces in the Middle East by elements of terror groups operating in Yemen, such as AQAP. ", "After debate on the resolution, the Senate also debated and voted on six amendments to S.J.Res. 54 on December 13, 2018. The Senate agreed to amendments", "to include \"refueling of non-United States aircraft\" participating in the Yemen conflict in the definition of \"hostilities\" for purposes of S.J.Res. 54; to ensure nothing in the resolution be interpreted to disrupt U.S. military operations and cooperation with Israel; and to require reporting on the risks involved with ceasing certain U.S. support to the KSA-led coalition with regard to the people of the United States and Saudi Arabia, regional humanitarian crises, and terrorist attacks against the United States.", "The Senate did not adopt two amendments that would have limited the scope of application of the resolution's prohibitions by excluding military operations intended to reduce civilian casualties or to enable adherence to the international law of armed conflict, and operations to support strikes against Houthi targets outside Yemen.", "Immediately after these votes, the Senate proceeded to vote on passage of S.J.Res. 54, as amended, and the resolution passed the Senate by a vote of 56-41. The resolution was received in the House on December 19, 2018, where no further action was taken before the end of the 115 th Congress. Because Section 1013 expedited consideration procedure applies only in the Senate, the resolution was not privileged in the House."], "subsections": []}, {"section_title": "Renewed Efforts in the 116th Congress", "paragraphs": ["On January 30, 2019, Representative Khanna and 96 co-sponsors introduced H.J.Res. 37 , which again would direct \"the removal of United States Armed Forces from hostilities in the Republic of Yemen that have not been authorized by Congress.\" The language in H.J.Res. 37 as introduced was identical to the amended version of S.J.Res. 54 that passed the Senate in the 115 th Congress. The resolution was referred to the House Foreign Affairs Committee, which on February 6, 2019, considered the resolution at a markup session after a hearing of the full committee regarding U.S. policy in the Arabian peninsula. During markup, opponents of the measure argued that U.S. support operations related to the counter-Houthi campaign in Yemen were not \"hostilities,\" and that passage of H.J.Res. 37 would set a precedent under which any Member of Congress could force votes calling into question \"all U.S. security cooperation agreements throughout the world.\" Those in favor of the measure stated that U.S. actions in Yemen in this specific case involved direct involvement in an armed conflict, and that \"support for ongoing hostilities by a third power and ally \u2026 qualify\" as involvement of U.S. Armed Forces in hostilities. The committee voted 25-17 to report H.J.Res. 37 to the full House and recommend its passage.", "On February 11, 2019, the House Rules Committee reported on H.Res. 122, which provided for immediate consideration in the House of H.J.Res. 37 , with one hour for general debate and 10 minutes for two amendments deemed in order by the rule. A motion to recommit with or without instruction was also permitted. On February 13, 2019, the House adopted H.Res. 122 and proceeded to debate on the resolution. Supporters of the measure reiterated that U.S. military support for the KSA-led coalition was counter to American interests and values and that the actions of the coalition were creating a humanitarian crisis in Yemen. Opponents stated that the situation would not improve if the United States removed its support, and that such a decision would embolden Iran's involvement in the Yemen conflict and take pressure off elements of Al Qaeda and the Islamic State in Yemen. With regard to the provisions of the War Powers Resolution and Section 1013, Members continued to disagree on the definition of hostilities and the appropriate use of the expedited consideration procedures afforded to Congress in that legislation.", "The House considered one amendment in order, which would have added language to ensure that nothing in the resolution would be construed to hinder U.S. forces and officials from collecting, analyzing, and sharing intelligence. The amendment was agreed to by a 252-177 rollcall vote. The House then considered a motion to recommit H.J.Res. 37 to the House Foreign Affairs Committee, with an instruction to report the resolution back to the House with an amendment to the findings section of the resolution. The amendment would have added language stating that it is in the \"national security interest of the United States to combat anti-Semitism around the world,\" among other supporting statements. The motion to recommit with instruction was agreed to by a 424-0 vote. The House then proceeded to vote on H.J.Res. 37 , as amended, passing the resolution 248 to 177. On February 14, the House transmitted H.J.Res. 37 as adopted to the Senate, where it was referred to the Foreign Relations Committee.", "H.J.Res. 37 is a joint resolution introduced with specific reference to Section 1013 expedited consideration procedure, and therefore could have been expected to receive expedited consideration once it passed the House and was received in the Senate. Its privileged status in the Senate, however, was eliminated on February 25, 2019, when the Senate Parliamentarian ruled that elements of the House-passed resolution were not germane to the subject of withdrawal of U.S. Armed Forces from hostilities in Yemen, and therefore the resolution could not be treated as privileged under Section 1013 procedure. At issue it seemed were the provisions on combating anti-Semitism added to the resolution in the motion to recommit that the House agreed to on February 13, 2019. After the decision of the Parliamentarian, Senators Sanders, Mike Lee, and Chris Murphy, co-authors of S.J.Res. 7, the companion measure in the Senate to H.J.Res. 37 , stated that they would take steps to ensure that their joint resolution, which does not contain the anti-Semitism language, receives consideration and a vote in the Senate under the Section 1013 privilege. The Senate is expected to take up S.J.Res. 7 in some fashion in March 2019."], "subsections": []}, {"section_title": "What Constitutes U.S. \"Hostilities\" Related to Yemen", "paragraphs": ["In the case of U.S. operations supporting the KSA-led counter-Houthi campaign, the executive branch and certain Members of Congress have disagreed over the meaning of \"hostilities\" as it relates to the application of the WPR provisions. The executive branch has maintained that \"hostilities\" for the purposes of the WPR means only \"a situation in which units of U.S. armed forces are actively engaged in exchanges of fire with opposing units of hostile forces,\" something that it argues is not occurring in the context of the counter-Houthi operations. Congress's intent in using the term \"hostilities,\" however, seems to evidence a definition that is wider in scope, to include diverse circumstances in which no exchanges of fire have yet occurred. Some indication of this intended wider meaning of hostilities and imminent hostilities is given in the House report on its War Powers bill:", "The word hostilities was substituted for the phrase armed conflict during the subcommittee drafting process because it was considered to be somewhat broader in scope. In addition to a situation in which fighting actually has begun, hostilities also encompasses a state of confrontation in which no shots have been fired but where there is a clear and present danger of armed conflict. \" Imminent hostilities \" denotes a situation in which there is a clear potential either for such a state of confrontation or for actual armed conflict. ", "In this conception, a range of situations into which U.S. Armed Forces are deployed could be considered active or imminent hostilities subject to the reporting and termination requirements of the WPR, for example ", "U.S. Armed Forces actively exchanging fire with enemy forces; a standoff between U.S. and enemy forces poised to engage in armed conflict; or a circumstance where U.S. Armed Forces are equipped for combat in a foreign country where an opposing military might be expected to take an adversarial stance at some point in the near future against such U.S. Armed Forces.", "In the context of U.S. operations related to the counter-Houthi campaign in Yemen, however, this conception does not necessarily answer whether U.S. Armed Forces acting in noncombat support roles in an armed conflict, or a \"state of confrontation,\" involving foreign partner military forces, are properly considered engaged in active hostilities or where hostilities are imminent. According to the House report quoted above, hostilities encompass armed conflict, involving the exchange of fire between U.S. Armed Forces and enemy forces, or a state of confrontation with a clear and present danger of armed conflict. As the term is used in the WPR, \"hostilities\" might not, then, include a situation in which U.S. Armed Forces are serving only in a noncombat support role, and would not engage in exchanges of fire with enemy forces in the case of active armed combat, or operate under a clear and present danger of exchanging fire in the case of a state of confrontation. This is the argument the Trump Administration is currently making with regard to U.S. military operations connected to the KSA-led counter-Houthi campaign in Yemen.", "This approach to defining hostilities, however, might be considered overly narrow. Under international law, all members of the armed forces of a party to an armed conflict are considered combatants with the right to participate in such armed conflict. To the extent the United States can be considered a party to an armed conflict in Yemen, all U.S. Armed Forces participating arguably would be engaged in such armed conflict and thus \"hostilities,\" under the more expansive definition of the term set out in the House report language above."], "subsections": []}, {"section_title": "Interpretive Provision Related to Activities of Foreign Military Forces", "paragraphs": ["Proponents in Congress of the several pending Yemen disapproval resolutions in the 115 th Congress have also argued that U.S. support operations aiding the KSA-led campaign in Yemen link U.S. operations to ongoing offensive strikes by Saudi and Emirati forces, thus introducing U.S. Armed Forces into hostilities under the interpretive provisions of Section 8 of the WPR. Section 8(c) defines the introduction of armed forces to include activities of U.S. Armed Forces in connection with the operations of foreign military forces: ", "(c) For purposes of this joint resolution, the term \"introduction of United States Armed Forces\" includes the assignment of members of such armed forces to command, coordinate, participate in the movement of, or accompany the regular or irregular military forces of any foreign country or government when such military forces are engaged, or there exists an imminent threat that such forces will become engaged, in hostilities.", "The conference report on the WPR explained that this was language modified from a Senate provision requiring specific statutory authorization for assigning members of the Armed Forces for such purposes. The report of the Senate Foreign Relations Committee on its bill said", "The purpose of this provision is to prevent secret, unauthorized military support activities and to prevent a repetition of many of the most controversial and regrettable actions in Indochina. The ever deepening ground combat involvement of the United States in South Vietnam began with the assignment of U.S. \"advisers\" to accompany South Vietnamese units on combat patrols; and in Laos, secretly and without congressional authorization, U.S. \"advisers\" were deeply engaged in the war in northern Laos. ", "This interpretive provision could be confusing from the standpoint of determining whether an \"introduction of U.S. armed forces\" specifically into active or imminent hostilities under Section 4(a)(1) has occurred. Section 8(c) on the one hand seems to indicate some intention that if U.S. Armed Forces are operating alongside foreign military forces engaged in hostilities, those hostilities could be attributed to such U.S. Armed Forces as well, triggering a report under Section 4(a)(1) and possibly the termination provisions of Section 5. ", "Yet, while Section 8(c) refers to a situation where foreign military forces are actively engaged or will be engaged imminently in hostilities, when this occurs and U.S. Armed Forces are operating alongside such foreign forces, this seems to meet only the definition of an \"introduction of United States Armed Forces\" for purposes of Section 4(a) of the WPR, not the definition of \"hostilities\" or \"introduction of United States Armed Forces into hostilities .\" Under Section 4(a), there are situations in which an introduction does not involve hostilities: an introduction can also involve foreign deployments of combat-equipped troops absent any U.S. forces engaged in active or imminent hostilities. ", "Thus, it seems that Section 8(c) contemplates situations where \"assignment of [U.S.] armed forces to command, coordinate, participate in the movement of, or accompany\" foreign forces engaged in or about to engage in hostilities would not necessarily be considered an introduction of U.S. Armed Forces into such hostilities. In addition, the Senate Foreign Relations Committee report quoted above refers specifically to Section 8(c) preventing \" secret , unauthorized military support activities,\" something a report under Section 4(a)(2) or (3) could accomplish by bringing an otherwise secret deployment to light, without a deployment being considered an \"introduction into hostilities.\"", "The executive branch has notified Congress of the activities of U.S. military personnel in support of Saudi-led coalition military operations in Yemen in letters to Congress consistent with the War Powers Resolution. In February 2018, Department of Defense counsel argued in a letter to Congress,", "The limited military and intelligence support that the United States is providing to the KSA-led coalition does not involve any introduction of U.S. forces into hostilities for purposes of the War Powers Resolution or of section 1013 of the Department of State Authorization Act, Fiscal Years 1984 and 1985 (50 USC 1546a).", "The Department specifically argued that since U.S. personnel providing support to the Saudi-led coalition were not then engaged themselves in exchanges of fire, they had not been introduced into hostilities or situations where hostilities were imminent. The Department further stated that U.S. forces did not then \"currently command, coordinate, accompany, or participate in the movement of coalition forces in counter-Houthi operations,\" nor were they \"accompanying the KSA-led coalition when its military forces are engaged, or an imminent threat exists that they will become engaged, in hostilities.\" "], "subsections": []}]}]}, {"section_title": "Proposed Amendments", "paragraphs": ["After four decades in existence, controversy continues over the War Powers Resolution and its effectiveness and appropriateness as a system for maintaining a congressional role in the use of armed forces in conflict. One view is that the War Powers Resolution is basically sound and does not need amendment. Those who hold this opinion believe it has brought about better communication between the two branches in times of crisis, and has given Congress a vehicle by which it can act when a majority of Members wish to do so. The Resolution served as a restraint on the use of armed forces by the President in some cases because of awareness that certain actions might invoke its provisions. For example, the threat of invoking the War Powers Resolution may have been helpful in getting U.S. forces out of Grenada, in keeping the number of military advisers in El Salvador limited to 55, and in prodding Congress to take a stand on authorizing the war against Iraq.", "A contrary view is that the War Powers Resolution is an inappropriate instrument that restricts the President's effectiveness in foreign policy and should be repealed. Those with this perspective believe that the basic premise of the War Powers Resolution is wrong because in it, Congress attempts excessive control of the deployment of U.S. military forces, encroaching on the responsibility of the President. Supporters of repeal contend that the President needs more flexibility in the conduct of foreign policy and that the time limitation in the War Powers Resolution is unconstitutional and impractical. Some holding this view contend that Congress has always had the power, through appropriations and general lawmaking, to inquire into, support, limit, or prohibit specific uses of U.S. Armed Forces if there is majority support. The War Powers Resolution does not fundamentally change this equation, it is argued, but it complicates action, misleads military opponents, and diverts attention from key policy questions.", "A third view is that the War Powers Resolution has not been adequate to accomplish its objectives and needs to be strengthened or reshaped. Proponents of this view assert that Presidents have continued to introduce U.S. Armed Forces into hostilities without consulting Congress and without congressional authorization. Presidents have cited Section 4(a)(1) on only one occasion\u2014Mayaguez\u2014and by the time the action was reported, it was virtually over.", "Holders of this third view have proposed various types of amendments to the War Powers Resolution. These include returning to the version originally passed by the Senate, establishing a congressional consultation group, adding a cutoff of funds, and providing for judicial review. A general discussion of these categories of possible changes follows."], "subsections": [{"section_title": "Return to Senate Version: Enumerating Exceptions for Emergency Use", "paragraphs": ["In 1977, Senator Thomas Eagleton proposed that the War Powers Resolution return to the original language of the version passed by the Senate, and this proposal has been made several times since. This would require prior congressional authorization for the introduction of forces into conflict abroad without a declaration of war except to respond to or forestall an armed attack against the United States or its forces or to protect U.S. citizens while evacuating them. The amendment would eliminate the construction that the President has 60 to 90 days in which he can militarily act without authorization. Opponents fear the exceptions to forestall attacks or rescue American citizens abroad would serve as a blanket authorization and might be abused, yet might not allow the needed speed of action and provide adequate flexibility in other circumstances."], "subsections": []}, {"section_title": "Shorten or Eliminate Time Limitation", "paragraphs": ["Another proposal is to shorten the time period that the President could maintain forces in hostile situations abroad without congressional authorization from 60 to 30 days, or eliminate it altogether. Some proponents of this amendment contend the current War Powers Resolution gives the President 60 to 90 days to do as he chooses and that this provides too much opportunity for mischief or irreversible action. The original Senate version provided that the use of armed forces in hostilities or imminent hostilities in any of the emergency situations could not be sustained beyond 30 days without specific congressional authorization, extendable by the President upon certification of necessity for safe disengagement. Opponents of this and related measures argue that they induce military opponents to adopt strategies to win given conflicts in Congress that they could not win in the field over time."], "subsections": []}, {"section_title": "Replace Automatic Withdrawal Requirement", "paragraphs": ["The War Powers Resolution has an automatic requirement for withdrawal of troops 60 days after the President submits a Section 4(a)(1) report. Some Members of Congress favor replacing this provision with expedited procedures for a joint resolution to authorize the action or require disengagement. One of the main executive branch objections to the War Powers Resolution has been that the withdrawal requirement could be triggered by congressional inaction, and that adversaries can simply wait out the 60 days. By providing for withdrawal by joint resolution, this amendment would also deal with the provision for withdrawal by concurrent resolution, under a cloud because of the Chadha decision. On the other hand, a joint resolution requiring disengagement could be vetoed by the President and thus would require a two-thirds majority vote in both Houses for enactment."], "subsections": []}, {"section_title": "Cutoff of Funds", "paragraphs": ["Some proposals call for prohibiting the obligation or expenditure of funds for any use of U.S. Armed Forces in violation of the War Powers Resolution or laws passed under it except for the purpose of removing troops. Congress could enforce this provision by refusing to appropriate further funds to continue the military action. This has always been the case, some contend, and would not work because Congress would remain reluctant to withhold financial support for U.S. Armed Forces once they were abroad."], "subsections": []}, {"section_title": "Elimination of Action by Concurrent Resolution", "paragraphs": ["Many proposed amendments eliminate Section 5(c) providing that U.S. forces engaged in hostilities abroad without congressional authorization are to be removed if Congress so directs by concurrent resolution, and Section 7 providing priority procedures for a concurrent resolution. Those who hold this view contend the concurrent resolution section is invalid because of the Chadha decision."], "subsections": []}, {"section_title": "Expedited Procedures", "paragraphs": ["Several proposals call for new and more detailed priority procedures for joint resolutions introduced under the War Powers Resolution. These would apply to joint resolutions either authorizing a military action or calling for the withdrawal of forces, and to congressional action to sustain or override a presidential veto of the joint resolution."], "subsections": []}, {"section_title": "Consultation Group", "paragraphs": ["Several proposed amendments have focused on improving consultation under the War Powers Resolution, particularly by establishing a specific consultation group in Congress for this purpose. Senators Byrd, Nunn, Warner, and Mitchell have proposed the President regularly consult with an initial group of 6 Members\u2014the majority and minority leaders of both Chambers plus the Speaker of the House and President pro tempore of the Senate. Upon a request from a majority of this core group, the President is to consult with a permanent consultative group of 18 Members consisting of the leadership and the ranking and minority members of the Committees on Foreign Relations, Armed Services, and Intelligence. The permanent consultative group would also be able to determine that the President should have reported an introduction of forces and to introduce a joint resolution of authorization or withdrawal that would receive expedited procedures.", "Other Members have favored a consultation group, but consider that amendment of the War Powers Resolution is not required for Congress to designate such a group. On October 28, 1993, House Foreign Affairs Chairman Lee Hamilton introduced H.R. 3405 to establish a Standing Consultative Group. Its purpose would be to facilitate improved interaction between the executive branch and Congress on the use of U.S. military forces abroad, including under the War Powers Resolution or United Nations auspices. Members of the Consultative Group would be appointed by the Speaker of the House and the Majority Leader of the Senate, after consultation with the minority leaders. The Group would include majority and minority representatives of the leadership and the committees on foreign policy, armed services, intelligence, and appropriations.", "Another proposal would attempt to improve consultation by broadening the instances in which the President is required to consult. This proposal would cover all situations in which a President is required to report, rather than only circumstances that invoke the time limitation, as is now the case."], "subsections": []}, {"section_title": "Judicial Review", "paragraphs": ["Proposals have been made that any Member of Congress may bring an action in the United States District Court for the District of Columbia for judgment and injunctive relief on the grounds that the President or the U.S. Armed Forces have not complied with any provision of the War Powers Resolution. The intent of this legislation is to give standing to Members to assert the interest of the House or Senate, but whether it would impel courts to exercise jurisdiction is uncertain. Most recent federal court decisions have rejected War Powers lawsuits by congressional litigants on the grounds they lacked standing to sue. Proposals have also called for the court not to decline to make a determination on the merits, on the grounds that the issue of compliance is a political question or otherwise nonjusticiable; to accord expedited consideration to the matter; and to prescribe judicial remedies including that the President submit a report or remove Armed Forces from a situation."], "subsections": []}, {"section_title": "Change of Name", "paragraphs": ["Other proposals would construct a Hostilities Act or Use of Force Act and repeal the War Powers Resolution. A possible objection to invoking the War Powers Resolution is reluctance to escalate international tension by implying that a situation is war. Some would see this as a step in the wrong direction; in the Korean and Vietnam conflicts, some contend, it was self-deceptive and ultimately impractical not to recognize hostilities of that magnitude as war and bring to bear the Constitutional provision giving Congress the power to declare war."], "subsections": []}, {"section_title": "United Nations Actions", "paragraphs": ["With the increase in United Nations actions since the end of the Cold War, the question has been raised whether the War Powers Resolution should be amended to facilitate or restrain the President from supplying forces for U.N. actions without congressional approval. Alternatively, the United Nations Participation Act might be amended, or new legislation enacted, to specify how the War Powers Resolution is to be applied, and whether the approval of Congress would be required only for an initial framework agreement on providing forces to the United Nations, or whether Congress would be required to approve an agreement to supply forces in specified situations, particularly for U.N. peacekeeping operations.", "Appendix A. Instances Reported Under the War Powers Resolution", "This appendix lists reports Presidents have made to Congress through early 2017 as the result of the War Powers Resolution. Each entry contains the President's reference to the War Powers Resolution. The reports generally cite the President's authority to conduct foreign relations and as Commander in Chief; each entry indicates any additional legislative authority a President cites for his action. Several of the reports listed for the period since 1991, in particular, are reports regarding ongoing operations previously reported by the President, rather than completely new instances of use of the U.S. military overseas.", "(1) Danang, Vietnam . On April 4, 1975, President Ford reported the use of naval vessels, helicopters, and Marines to transport refugees from Danang and other seaports to safer areas in Vietnam. His report mentioned Section 4(a)(2) of the War Powers Resolution and authorization in the Foreign Assistance Act of 1961 for humanitarian assistance to refugees suffering from the hostilities in South Vietnam. Monroe Leigh, Legal Adviser to the Department of State, testified later that the President \"advised the members of the Senate and House leadership that a severe emergency existed in the coastal communities of South Vietnam and that he was directing American naval transports and contract vessels to assist in the evacuation of refugees from coastal seaports.\"", "(2) Cambodia . On April 12, 1975, President Ford reported the use of ground combat Marines, helicopters, and supporting tactical air elements to assist with the evacuation of U.S. nationals from Cambodia. The report took note of both Section 4 and Section 4(a)(2) of the War Powers Resolution. On April 3, 1975, the day the President authorized the Ambassador to evacuate the American staff, he directed that the leaders of the Senate and House be advised of the general plan of evacuation. On April 11, the day he ordered the final evacuation, President Ford again directed that congressional leaders be notified.", "(3) Vietnam . On April 30, 1975, President Ford reported the use of helicopters, Marines, and fighter aircraft to aid in the evacuation of U.S. citizens and others from South Vietnam. The report took note of Section 4 of the War Powers Resolution. On April 10, the President had asked Congress to clarify its limitation on the use of forces in Vietnam to insure evacuation of U.S. citizens and to cover some Vietnamese nationals, but legislation to this effect was not completed. On April 28, the President directed that congressional leaders be notified that the final phase of the evacuation of Saigon would be carried out by military forces within the next few hours.", "(4) Mayaguez . On May 15, 1975, President Ford reported that he had ordered U.S. military forces to rescue the crew of and retake the ship Mayaguez that had been seized by Cambodian naval patrol boats on May 12, that the ship had been retaken, and that the withdrawal of the forces had been undertaken. The report took note of Section 4(a)(1) of the War Powers Resolution. On May 13, Administration aides contacted 10 Members from the House and 11 Senators regarding the military measures directed by the President.", "(5) Iran . On April 26, 1980, President Carter reported the use of six aircraft and eight helicopters in an unsuccessful attempt of April 24 to rescue the American hostages in Iran. The report was submitted \"consistent with the reporting provision\" of the War Powers Resolution. President Carter said the United States was acting in accordance with its right under Article 51 of the United Nations Charter to protect and rescue its citizens where the government of the territory in which they are located is unable or unwilling to protect them. The Administration did not inform congressional leaders of the plan on grounds that consultation could endanger the success of the mission.", "(6) Sinai . The United States, Egypt, and Israel signed an executive agreement on August 3, 1981, outlining U.S. participation in a Multinational Force and Observers unit to function as a peacekeeping force in the Sinai after Israel withdrew its forces. In anticipation of this accord, on July 21, 1981, President Reagan requested congressional authorization for U.S. participation. Congress authorized President Reagan to deploy military personnel to the Sinai in the Multinational Force and Observers Participation Resolution, P.L. 97-132 , signed December 29, 1981. On March 19, 1982, President Reagan reported the deployment of military personnel and equipment to the Multinational Force and Observers in the Sinai. The President said the report was provided \"consistent with Section 4(a)(2) of the War Powers Resolution\" and cited the Multinational Force and Observers Participation Resolution.", "(7) Lebanon . On August 24, 1982, President Reagan reported the dispatch of 800 Marines to serve in the multinational force to assist in the withdrawal of members of the Palestine Liberation force from Lebanon. The report was provided \"consistent with\" but did not cite any specific provision of the War Powers Resolution. President Reagan had begun discussions with congressional leaders on July 6, 1982, after the plan had been publicly announced, and after leaks in the Israeli press indicated that he had approved the plan on July 2.", "(8) Lebanon . On September 29, 1982, President Reagan reported the deployment of 1,200 Marines to serve in a temporary multinational force to facilitate the restoration of Lebanese government sovereignty. He said the report was being submitted \"consistent with the War Powers Resolution.\" On this second Multinational Force in Lebanon there was a considerable amount of negotiation between the executive branch and Congress, but most of it occurred after the decision to participate had been made and the Marines were in Lebanon.", "(9) Chad . On August 8, 1983, President Reagan reported the deployment of two AWACS electronic surveillance planes and eight F-15 fighter planes and ground logistical support forces to Sudan to assist Chad and other friendly governments helping Chad against Libyan and rebel forces. He said the report was being submitted consistent with Section 4 of the War Powers Resolution. On August 23, 1983, a State Department spokesman announced that the planes were being withdrawn.", "(10) Lebanon . On August 30, 1983, after the Marines participating in the Multinational Force in Lebanon were fired upon and two were killed, President Reagan submitted a report \"consistent with Section 4 of the War Powers Resolution.\" In P.L. 98-119 , the Multinational Force in Lebanon Resolution, signed October 12, 1983, Congress determined Section 4(a) had become operative on August 29, 1983, and authorized the forces to remain for 18 months.", "(11) Grenada . On October 25, 1983, President Reagan reported that U.S. Army and Marine personnel had begun landing in Grenada to join collective security forces of the Organization of Eastern Caribbean States in assisting in the restoration of law and order in Grenada and to facilitate the protection and evacuation of U.S. citizens. He submitted the report \"consistent with the War Powers Resolution.\" President Reagan met with several congressional leaders at 8 p.m. on October 24. This was after the directive ordering the landing had been signed at 6 p.m., but before the actual invasion that began at 5:30 a.m., October 25.", "(12) Libya . On March 26, 1986, President Reagan reported (without any mention of the War Powers Resolution) that, on March 24 and 25, U.S. forces conducting freedom of navigation exercises in the Gulf of Sidra had been attacked by Libyan missiles. In response, the United States fired missiles at Libyan vessels and at Sirte, the missile site.", "(13) Libya . On April 16, 1986, President Reagan reported, \"consistent with the War Powers Resolution,\" that on April 14 U.S. air and naval forces had conducted bombing strikes on terrorist facilities and military installations in Libya. President Reagan had invited approximately a dozen congressional leaders to the White House at about 4 p.m. on April 14 and discussed the situation until 6 p.m. He indicated that he had ordered the bombing raid and that the aircraft from the United Kingdom were on their way to Libya and would reach their targets about 7 p.m.", "(14) Persian Gulf . On September 23, 1987, President Reagan reported that, on September 21, two U.S. helicopters had fired on an Iranian landing craft observed laying mines in the Gulf. The President said that while mindful of legislative-executive differences on the interpretation and constitutionality of certain provisions of the War Powers Resolution, he was reporting in a spirit of mutual cooperation.", "(15) Persian Gulf . On October 10, 1987, President Reagan reported \"consistent with the War Powers Resolution\" that, on October 8, three U.S. helicopters were fired upon by small Iranian naval vessels and the helicopters returned fire and sank one of the vessels.", "(16) Persian Gulf . On October 20, 1987, President Reagan reported an attack by an Iranian Silkworm missile against the U.S.-flag tanker Sea Isle City on October 15 and U.S. destruction, on October 19, of the Iranian Rashadat armed platform used to support attacks and mine-laying operations. The report was submitted \"consistent with the War Powers Resolution.\"", "(17) Persian Gulf . On April 19, 1988, President Reagan reported \"consistent with the War Powers Resolution\" that in response to the U.S.S. Samuel B. Roberts striking a mine on April 14, U.S. Armed Forces attacked and \"neutralized\" two Iranian oil platforms on April 18 and, after further Iranian attacks, damaged or sank Iranian vessels. The President called the actions \"necessary and proportionate.\" Prior to this action, the President met with congressional leaders.", "(18) Persian Gulf . On July 4, 1988, President Reagan reported that on July 3 the USS Vincennes and USS Elmer Montgomery fired upon approaching Iranian small craft, sinking two. Firing in self-defense at what it believed to be a hostile Iranian military aircraft, the Vincennes had shot down an Iranian civilian airliner. The President expressed deep regret. The report was submitted \"consistent with the War Powers Resolution.\"", "(19) Persian Gulf . On July 14, 1988, President Reagan reported that, on July 12, two U.S. helicopters, responding to a distress call from a Japanese-owned Panamanian tanker, were fired at by two small Iranian boats and returned the fire. The report was submitted \"consistent with the War Powers Resolution.\"", "(20) Philippines . On December 2, 1989, President George H. W. Bush submitted a report to congressional leaders \"consistent with\" the War Powers Resolution, describing assistance of combat air patrols to help the Aquino government in the Philippines restore order and to protect American lives. After the planes had taken off from Clark Air Base to provide air cover, Vice President Quayle and other officials informed congressional leaders. On December 7, House Foreign Affairs Committee Chairman Dante Fascell wrote President Bush expressing his concern for the lack of advance consultation. In reply, on February 10, 1990, National Security Adviser Brent Scowcroft wrote Chairman Fascell that the President was \"committed to consultations with Congress prior to deployments of U.S. Forces into actual or imminent hostilities in all instances where such consultations are possible. In this instance, the nature of the rapidly evolving situation required an extremely rapid decision very late at night and consultation was simply not an option.\"", "(21) Panama . On December 21, 1989, President George H. W. Bush reported \"consistent with the War Powers Resolution\" that he had ordered U.S. military forces to Panama to protect the lives of American citizens and bring General Noriega to justice. By February 13, 1990, all the invasion forces had been withdrawn. President Bush informed several congressional leaders of the approaching invasion of Panama at 6 p.m. on December 19, 1989. This was after the decision to take action was made, but before the operation actually began at 1:00 a.m., December 20.", "(22) Liberia . On August 6, 1990, President George H. W. Bush reported to Congress that following discussions with congressional leaders, a reinforced rifle company had been sent to provide additional security to the U.S. Embassy in Monrovia and helicopter teams had evacuated U.S. citizens from Liberia. The report did not mention the War Powers Resolution or cite any authority.", "(23) Iraq . On August 9, 1990, President George H. W. Bush reported to Congress \"consistent with the War Powers Resolution\" that he had ordered the forward deployment of substantial elements of the U.S. Armed Forces into the Persian Gulf region to help defend Saudi Arabia after the invasion of Kuwait by Iraq. The Bush Administration notified congressional leaders that it was deploying U.S. troops to Saudi Arabia on August 7, the date of the deployment. After the forces had been deployed, President Bush held several meetings with congressional leaders and members of relevant committees, and committees held hearings to discuss the situation.", "(24) Iraq . On November 16, 1990, President George H. W. Bush reported, without mention of the War Powers Resolution but referring to the August 9 letter, the continued buildup to ensure \"an adequate offensive military option.\" Just prior to adjournment, Senate Majority Leader Mitchell and Speaker Foley designated Members to form a consultation group, and the President held meetings with the group on some occasions, but he did not consult the members in advance on the major buildup of forces in the Persian Gulf area announced November 8.", "(25) Iraq . On January 18, 1991, President George H. W. Bush reported to Congress \"consistent with the War Powers Resolution\" that he had directed U.S. Armed Forces to commence combat operations on January 16 against Iraqi forces and military targets in Iraq and Kuwait. On January 12, Congress had passed the Authorization for Use of Military Force against Iraq Resolution ( P.L. 102-1 ), which stated it was the specific statutory authorization required by the War Powers Resolution. P.L. 102-1 required the President to submit a report to the Congress at least once every 60 days on the status of efforts to obtain compliance by Iraq with the U.N. Security Council resolution, and Presidents submitted subsequent reports on military actions in Iraq \"consistent with\" P.L. 102-1 . An exception is report submitted June 28, 1993, described below.", "(26) Somalia . On December 10, 1992, President George H. W. Bush reported \"consistent with the War Powers Resolution\" that U.S. Armed Forces had entered Somalia on December 8 in response to a humanitarian crisis and a U.N. Security Council Resolution determining that the situation constituted a threat to international peace. He included as authority applicable treaties and laws, and said he had also taken into account views expressed in H.Con.Res. 370 , S.Con.Res. 132 , and the Horn of Africa Recovery and Food Security Act, P.L. 102-274 . On December 4, the day the President ordered the forces deployed, he briefed a number of congressional leaders on the action.", "(27) Bosnia . On April 13, 1993, President Clinton reported \"consistent with Section 4 of the War Powers Resolution\" that U.S. forces were participating in a NATO air action to enforce a U.N. ban on all unauthorized military flights over Bosnia-Hercegovina, pursuant to his authority as Commander in Chief. Later, on April 27, President Clinton consulted with about two dozen congressional leaders on potential further action.", "(28) Somalia . On June 10, 1993, President Clinton reported that in response to attacks against U.N. forces in Somalia by a factional leader, the U.S. Quick Reaction Force in the area had participated in military action to quell the violence. He said the report was \"consistent with the War Powers Resolution, in light of the passage of 6 months since President Bush's initial report....\" He said the action was in accordance with applicable treaties and laws, and said the deployment was consistent with S.J.Res. 45 as adopted by the Senate and amended by the House. (The Senate did not act on the House amendment, so Congress did not take final action on S.J.Res. 45 .)", "(29) Iraq . On June 28, 1993, President Clinton reported \"consistent with the War Powers Resolution\" that on June 26 U.S. naval forces had launched missiles against the Iraqi Intelligence Service's headquarters in Baghdad in response to an unsuccessful attempt to assassinate former President Bush in Kuwait in April 1993.", "(30) Macedonia . On July 9, 1993, President Clinton reported \"consistent with Section 4 of the War Powers Resolution\" the deployment of approximately 350 U.S. Armed Forces to Macedonia to participate in the U.N. Protection Force to help maintain stability in the area of former Yugoslavia. He said the deployment was directed in accordance with Section 7 of the United Nations Participation Act.", "(31) Bosnia . On October 13, 1993, President Clinton reported \"consistent with the War Powers Resolution\" that U.S. military forces continued to support enforcement of the U.N. no-fly zone in Bosnia, noting that more than 50 U.S. aircraft were now available for NATO efforts in this regard.", "(32) Haiti . On October 20, 1993, President Clinton submitted a report \"consistent with the War Powers Resolution\" that U.S. ships had begun to enforce a U.N. embargo against Haiti.", "(33) Macedonia . On January 8, 1994, President Clinton reported \"consistent with the War Powers Resolution\" that approximately 300 members of a reinforced company team (RCT) of the U.S. Army's 3 rd Infantry Division (Mechanized) had assumed a peacekeeping role in Macedonia as part of the United Nations Protection Force (UNPROFOR) on January 6, 1994.", "(34) Bosnia . On February 17, 1994, President Clinton reported \"consistent with the War Powers Resolution\" that the United States had expanded its participation in United Nations and NATO efforts to reach a peaceful solution in former Yugoslavia and that 60 U.S. aircraft were available for participation in the authorized NATO missions.", "(35) Bosnia . On March 1, 1994, President Clinton reported \"consistent with\" the War Powers Resolution that on February 28 U.S. planes patrolling the \"no-fly zone\" in former Yugoslavia under the North Atlantic Treaty Organization (NATO) shot down 4 Serbian Galeb planes.", "(36) Bosnia . On April 12, 1994, President Clinton reported \"consistent with\" the War Powers Resolution that on April 10 and 11, U.S. warplanes under NATO command had fired against Bosnian Serb forces shelling the \"safe\" city of Gorazde.", "(37) Rwanda . On April 12, 1994, President Clinton reported \"consistent with\" the War Powers Resolution that combat-equipped U.S. military forces had been deployed to Burundi to conduct possible noncombatant evacuation operations of U.S. citizens and other third-country nationals from Rwanda, where widespread fighting had broken out.", "(38) Macedonia . On April 19, 1994, President Clinton reported \"consistent with the War Powers Resolution\" that the U.S. contingent in the former Yugoslav Republic of Macedonia had been augmented by a reinforced company of 200 personnel.", "(39) Haiti . On April 20, 1994, President Clinton reported \"consistent with the War Powers Resolution\" that U.S. naval forces had continued enforcement in the waters around Haiti and that 712 vessels had been boarded.", "(40) Bosnia . On August 22, 1994, President Clinton reported the use on August 5 of U.S. aircraft under NATO to attack Bosnian Serb heavy weapons in the Sarajevo heavy weapons exclusion zone upon request of the U.N. Protection Forces. He did not cite the War Powers Resolution but referred to the April 12 report that cited the War Powers Resolution.", "(41) Haiti . On September 21, 1994, President Clinton reported \"consistent with the War Powers Resolution\" the deployment of 1,500 troops to Haiti to restore democracy in Haiti. The troop level was subsequently increased to 20,000.", "(42) Bosnia . On November 22, 1994, President Clinton reported \"consistent with the War Powers Resolution\" the use of U.S. combat aircraft on November 21, 1994, under NATO to attack bases used by Serbs to attack the town of Bihac in Bosnia.", "(43) Macedonia . On December 22, 1994, President Clinton reported \"consistent with the War Powers Resolution\" that the U.S. Army contingent in the former Yugoslav Republic of Macedonia continued its peacekeeping mission and that the current contingent would soon be replaced by about 500 soldiers from the 3 rd Battalion, 5 th Cavalry Regiment, 1 st Armored Division from Kirchgons, Germany.", "(44) Somalia . On March 1, 1995, President Clinton reported \"consistent with the War Powers Resolution\" that on February 27, 1995, 1,800 combat-equipped U.S. Armed Forces personnel began deployment into Mogadishu, Somalia, to assist in the withdrawal of U.N. forces assigned there to the United Nations Operation in Somalia (UNOSOM II).", "(45) Haiti . On March 21, 1995, President Clinton reported \"consistent with the War Powers Resolution\" that U.S. military forces in Haiti as part of a U.N. Multinational Force had been reduced to just under 5,300 personnel. He noted that as of March 31, 1995, approximately 2,500 U.S. personnel would remain in Haiti as part of the U.N. Mission in Haiti UNMIH).", "(46) Bosnia . On May 24, 1995, President Clinton reported \"consistent with the War Powers Resolution\" that U.S. combat-equipped fighter aircraft and other aircraft continued to contribute to NATO's enforcement of the no-fly zone in airspace over Bosnia-Herzegovina. U.S. aircraft, he noted, are also available for close air support of U.N. forces in Croatia. Roughly 500 U.S. soldiers continue to be deployed in the former Yugoslav Republic of Macedonia as part of the U.N. Preventive Deployment Force (UNPREDEP). U.S. forces continue to support U.N. refugee and embargo operations in this region.", "(47) Bosnia . On September 1, 1995, President Clinton reported \"consistent with the War Powers Resolution,\" that \"U.S. combat and support aircraft\" had been used beginning on August 29, 1995, in a series of NATO air strikes against Bosnian Serb Army (BSA) forces in Bosnia-Herzegovina that were threatening the U.N.-declared safe areas of Sarajevo, Tuzla, and Gorazde.\" He noted that during the first day of operations, \"some 300 sorties were flown against 23 targets in the vicinity of Sarajevo, Tuzla, Goradzde and Mostar.\"", "(48) Haiti . On September 21, 1995, President Clinton reported \"consistent with the War Powers Resolution\" that the United States had 2,400 military personnel in Haiti as participants in the U.N. Mission in Haiti (UNMIH). In addition, 260 U.S. military personnel are assigned to the U.S. Support Group Haiti.", "(49) Bosnia . On December 6, 1995, President Clinton notified Congress, \"consistent with the War Powers Resolution,\" that he had \"ordered the deployment of approximately 1,500 U.S. military personnel to Bosnia and Herzegovina and Croatia as part of a NATO 'enabling force' to lay the groundwork for the prompt and safe deployment of the NATO-led Implementation Force (IFOR),\" which would be used to implement the Bosnian peace agreement after its signing. The President also noted that he had authorized deployment of roughly 3,000 other U.S. military personnel to Hungary, Italy, and Croatia to establish infrastructure for the enabling force and the IFOR.", "(50) Bosnia . On December 21, 1995, President Clinton notified Congress \"consistent with the War Powers Resolution\" that he had ordered the deployment of approximately 20,000 U.S. military personnel to participate in the NATO-led Implementation Force (IFOR) in the Republic of Bosnia-Herzegovina, and approximately 5,000 U.S. military personnel would be deployed in other former Yugoslav states, primarily in Croatia. In addition, about 7,000 U.S. support forces would be deployed to Hungary, Italy and Croatia and other regional states in support of IFOR's mission. The President ordered participation of U.S. forces \"pursuant to\" his \"constitutional authority to conduct the foreign relations of the United States and as Commander-in-Chief and Chief Executive.\"", "(51) Haiti . On March 21, 1996, President Clinton notified Congress \"consistent with the War Powers Resolution\" that beginning in January 1996 there had been a \"phased reduction\" in the number of United States personnel assigned to the United Nations Mission in Haiti (UNMIH). As of March 21, 309 U.S. personnel remained a part of UNMIH. These U.S. forces were \"equipped for combat.\"", "(52) Liberia . On April 11, 1996, President Clinton notified Congress \"consistent with the War Powers Resolution\" that on April 9, 1996, due to the \"deterioration of the security situation and the resulting threat to American citizens\" in Liberia he had ordered U.S. military forces to evacuate from that country \"private U.S. citizens and certain third-country nationals who had taken refuge in the U.S. Embassy compound....\"", "(53) Liberia . On May 20, 1996, President Clinton notified Congress, \"consistent with the War Powers Resolution\" of the continued deployment of U.S. military forces in Liberia to evacuate both American citizens and other foreign personnel, and to respond to various isolated \"attacks on the American Embassy complex\" in Liberia. The President noted that the deployment of U.S. forces would continue until there was no longer any need for enhanced security at the Embassy and a requirement to maintain an evacuation capability in the country.", "(54) Central African Republic . On May 23, 1996, President Clinton notified Congress, \"consistent with the War Powers Resolution\" of the deployment of U.S. military personnel to Bangui, Central African Republic, to conduct the evacuation from that country of \"private U.S. citizens and certain U.S. Government employees,\" and to provide \"enhanced security\" for the American Embassy in Bangui.", "(55) Bosnia . On June 21, 1996, President Clinton notified Congress, \"consistent with the War Powers Resolution\" that United States forces totaling about 17,000 remain deployed in Bosnia \"under NATO operational command and control\" as part of the NATO Implementation Force (IFOR). In addition, about 5,500 U.S. military personnel are deployed in Hungary, Italy and Croatia, and other regional states to provide \"logistical and other support to IFOR.\" The President noted that it was the intention that IFOR would complete the withdrawal of all troops in the weeks after December 20, 1996, on a schedule \"set by NATO commanders consistent with the safety of troops and the logistical requirements for an orderly withdrawal.\" He also noted that a U.S. Army contingent (of about 500 U.S. soldiers) remains in the Former Yugoslav Republic of Macedonia as part of the United Nations Preventive Deployment Force (UNPREDEP).", "(56) Rwanda and Zaire . On December 2, 1996, President Clinton notified Congress \"consistent with the War Powers Resolution,\" that in support of the humanitarian efforts of the United Nations regarding refugees in Rwanda and the Great Lakes Region of Eastern Zaire, he had authorized the use of U.S. personnel and aircraft, including AC-130U planes to help in surveying the region in support of humanitarian operations, although fighting still was occurring in the area, and U.S. aircraft had been subject to fire when on flight duty.", "(57) Bosnia . On December 20, 1996, President Clinton notified Congress \"consistent with the War Powers Resolution,\" that he had authorized U.S. participation in an IFOR follow-on force in Bosnia, known as SFOR (Stabilization Force), under NATO command. The President said the U.S. forces contribution to SFOR was to be \"about 8,500\" personnel whose primary mission was to deter or prevent a resumption of hostilities or new threats to peace in Bosnia. SFOR's duration was Bosnia is expected to be 18 months, with progressive reductions and eventual withdrawal.", "(58) Albania . On March 15, 1997, President Clinton notified Congress \"consistent with the War Powers Resolution,\" that on March 13, 1997, he had utilized U.S. military forces to evacuate certain U.S. Government employees and private U.S. citizens from Tirana, Albania, and to enhance security for the U.S. embassy in that city.", "(59) Congo and Gabon . On March 27, 1997, President Clinton notified Congress \"consistent with the War Powers Resolution,\" that on March 25, 1997, a standby evacuation force of U.S. military personnel had been deployed to Congo and Gabon to provide enhanced security for American private citizens, government employees and selected third country nationals in Zaire, and be available for any necessary evacuation operation.", "(60) Sierra Leone . On May 30, 1997, President Clinton notified Congress \"consistent with the War Powers Resolution,\" that on May 29 and May 30, 1997, U.S. military personnel were deployed to Freetown, Sierra Leone to prepare for and undertake the evacuation of certain U.S. Government employees and private U.S. citizens.", "(61) Bosnia . On June 20, 1997, President Clinton notified Congress \"consistent with the War Powers Resolution,\" that U.S. Armed Forces continued to support peacekeeping operations in Bosnia and other states in the region in support of the NATO-led Stabilization Force (SFOR). He reported that most U.S. military personnel then involved in SFOR were in Bosnia, near Tuzla, and about 2,800 U.S. troops were deployed in Hungary, Croatia, Italy, and other regional states to provide logistics and other support to SFOR. A U.S. Army contingent of about 500 also remained deployed in the Former Yugoslav Republic of Macedonia as part of the U.N. Preventative Deployment Force (UNPREDEP).", "(62) Cambodia . On July 11, 1997, President Clinton notified Congress \"consistent with the War Powers Resolution,\" that in an effort to ensure the security of American citizens in Cambodia during a period of domestic conflict there, he had deployed a Task Force of about 550 U.S. military personnel to Utapao Air Base in Thailand. These personnel were to be available for possible emergency evacuation operations in Cambodia.", "(63) Bosnia . On December 19, 1997, President Clinton notified Congress \"consistent with the War Powers Resolution,\" that he intended \"in principle\" to have the United States participate in a security presence in Bosnia when the NATO SFOR contingent withdrew in the summer of 1998.", "(64) Guinea-Bissau . On June 12, 1998, President Clinton reported to Congress \"consistent with the War Powers Resolution\" that, on June 10, 1998, in response to an army mutiny in Guinea-Bissau endangering the U.S. Embassy and U.S. government employees and citizens in that country, he had deployed a standby evacuation force of U.S. military personnel to Dakar, Senegal, to remove such individuals, as well as selected third country nationals, from the city of Bissau.", "(65) Bosnia . On June 19, 1998, President Clinton reported to Congress \"consistent with the War Powers Resolution\" regarding activities in the last six months of combat-equipped U.S. forces in support of NATO's SFOR in Bosnia and surrounding areas of former Yugoslavia.", "(66) Kenya and Tanzania . On August 10, 1998, President Clinton reported to Congress \"consistent with the War Powers Resolution\" that he had deployed, on August 7, 1998, a Joint Task Force of U.S. military personnel to Nairobi, Kenya to coordinate the medical and disaster assistance related to the bombings of the U.S. embassies in Kenya and Tanzania. He also reported that teams of 50-100 security personnel had arrived in Nairobi, Kenya and Dar es Salaam, Tanzania to enhance the security of the U.S. embassies and citizens there.", "(67) Albania . On August 18, 1998, President Clinton reported to Congress, \"consistent with the War Powers Resolution,\" that he had, on August 16, 1998, deployed 200 U.S. Marines and 10 Navy SEALS to the U.S. Embassy compound in Tirana, Albania to enhance security against reported threats against U.S. personnel.", "(68) Afghanistan and Sudan . On August 21, 1998, by letter, President Clinton notified Congress \"consistent with the War Powers Resolution\" that he had authorized airstrikes on August 20 th against camps and installations in Afghanistan and Sudan used by the Osama bin Laden terrorist organization. The President did so based on what he termed convincing information that the bin Laden organization was responsible for the bombings, on August 7, 1998, of the U.S. embassies in Kenya and Tanzania.", "(69) Liberia . On September 29, 1998, by letter, President Clinton notified Congress \"consistent with the War Powers Resolution\" that he had deployed a stand-by response and evacuation force to Liberia to augment the security force at the U.S. Embassy in Monrovia, and to provide for a rapid evacuation capability, as needed, to remove U.S. citizens and government personnel from the country.", "(70) Bosnia . On January 19, 1999, by letter, President Clinton notified Congress \"consistent with the War Powers Resolution\" that pursuant to his authority as Commander in Chief he was continuing to authorize the use of combat-equipped U.S. Armed Forces to Bosnia and other states in the region to participate in and support the NATO-led Stabilization Force (SFOR). He noted that U.S. SFOR military personnel totaled about 6,900, with about 2,300 U.S. military personnel deployed to Hungary, Croatia, Italy and other regional states. Also some 350 U.S. military personnel remain deployed in the Former Yugoslav Republic of Macedonia (FYROM) as part of the UN Preventive Deployment Force (UNPREDEP).", "(71) Kenya . On February 25, 1999, President Clinton submitted a supplemental report to Congress \"consistent with the War Powers Resolution\" describing the continuing deployment of U.S. military personnel in Kenya to provide continuing security for U.S. embassy and American citizens in Nairobi in the aftermath of the terrorist bombing there.", "(72) Yugoslavia/Kosovo . On March 26, 1999, President Clinton notified Congress \"consistent with the War Powers Resolution,\" that on March 24, 1999, U.S. military forces, at his direction and acting jointly with NATO allies, had commenced air strikes against Yugoslavia in response to the Yugoslav government's campaign of violence and repression against the ethnic Albanian population in Kosovo.", "(73) Yugoslavia/Albania . On April 7, 1999, President Clinton notified Congress, \"consistent with the War Powers Resolution,\" that he had ordered additional U.S. military forces to Albania, including rotary wing aircraft, artillery, and tactical missiles systems to enhance NATO's ability to conduct effective air operations in Yugoslavia. About 2,500 soldiers and aviators are to be deployed as part of this task force.", "(74) Yugoslavia/Albania . On May 25, 1999, President Clinton reported to Congress, \"consistent with the War Powers Resolution\" that he had directed \"deployment of additional aircraft and forces to support NATO's ongoing efforts [against Yugoslavia], including several thousand additional U.S. Armed Forces personnel to Albania in support of the deep strike force located there.\" He also directed that additional U.S. forces be deployed to the region to assist in \"humanitarian operations.\"", "(75) Yugoslavia/Kosovo . On June 12, 1999, President Clinton reported to Congress, \"consistent with the War Powers Resolution,\" that he had directed the deployment of about \"7,000 U.S. military personnel as the U.S. contribution to the approximately 50,000-member, NATO-led security force (KFOR)\" being assembled in Kosovo. He also noted that about \"1,500 U.S. military personnel, under separate U.S. command and control, will deploy to other countries in the region, as our national support element, in support of KFOR.\"", "(76) Bosnia . On July 19, 1999, President Clinton reported to Congress \"consistent with the War Powers Resolution\" that about 6,200 U.S. military personnel were continuing to participate in the NATO-led Stabilization Force (SFOR) in Bosnia, and that another 2,200 personnel were supporting SFOR operations from Hungary, Croatia, and Italy. He also noted that U.S. military personnel remain in the Former Yugoslav Republic of Macedonia to support the international security presence in Kosovo (KFOR).", "(77) East Timor . On October 8, 1999, President Clinton reported to Congress \"consistent with the War Powers Resolution\" that he had directed the deployment of a limited number of U.S. military forces to East Timor to support the U.N. multinational force (INTERFET) aimed at restoring peace to East Timor. U.S. support had been limited initially to \"communications, logistics, planning assistance and transportation.\" The President further noted that he had authorized deployment of the amphibious ship USS Belleau Wood , together with its helicopters and her complement of personnel from the 31 st Marine Expeditionary Unit (Special Operations Capable) (MEU SOC) to the East Timor region, to provide helicopter airlift and search and rescue support to the multinational operation. U.S. participation was anticipated to continue until the transition to a U.N. peacekeeping operation was complete.", "(78) Yugoslavia/Kosovo . On December 15, 1999, President Clinton reported to Congress \"consistent with the War Powers Resolution\" that U.S. combat-equipped military personnel continued to serve as part of the NATO-led security force in Kosovo (KFOR). He noted that the American contribution to KFOR in Kosovo was \"approximately 8,500 U.S. military personnel.\" U.S. forces were deployed in a sector centered around \"Urosevac in the eastern portion of Kosovo.\" For U.S. KFOR forces, \"maintaining public security is a key task.\" Other U.S. military personnel are deployed to other countries in the region to serve in administrative and logistics support roles for U.S. forces in KFOR. Of these forces, about 1,500 U.S. military personnel are in Macedonia and Greece, and occasionally in Albania.", "(79) Bosnia . On January 25, 2000, President Clinton reported to Congress \"consistent with the War Powers Resolution\" that the U.S. continued to provide combat-equipped U.S. Armed Forces to Bosnia and Herzegovina and other states in the region as part of the NATO-led Stabilization Force (SFOR). The President noted that the U.S. force contribution was being reduced from \"approximately 6,200 to 4,600 personnel,\" with the U.S. forces assigned to Multinational Division, North, centered around the city of Tuzla. He added that approximately 1,500 U.S. military personnel were deployed to Hungary, Croatia, and Italy to provide \"logistical and other support to SFOR,\" and that U.S. forces continue to support SFOR in \"efforts to apprehend persons indicted for war crimes.\"", "(80) East Timor . On February 25, 2000, President Clinton reported to Congress \"consistent with the War Powers Resolution\" that he had authorized the participation of a small number of U.S. military personnel in support of the United Nations Transitional Administration in East Timor (UNTAET), with a mandate to maintain law and order throughout East Timor, facilitate establishment of an effective administration there, deliver humanitarian assistance, and support the building of self-government. The President reported that the U.S. contingent was small: three military observers, and one judge advocate. To facilitate and coordinate U.S. military activities in East Timor, the President also authorized the deployment of a support group (USGET), consisting of 30 U.S. personnel. U.S. personnel would be temporarily deployed to East Timor, on a rotational basis, and through periodic ship visits, during which U.S. forces would conduct \"humanitarian and assistance activities throughout East Timor.\" Rotational activities should continue through the summer of 2000.", "(81) Sierra Leone . On May 12, 2000, President Clinton, \"consistent with the War Powers Resolution\" reported to Congress that he had ordered a U.S. Navy patrol craft to deploy to Sierra Leone to be ready to support evacuation operations from that country if needed. He also authorized a U.S. C-17 aircraft to deliver \"ammunition, and other supplies and equipment\" to Sierra Leone in support of United Nations peacekeeping operations there.", "(82) Yugoslavia/Kosovo . On June 16, 2000, President Clinton reported to Congress, \"consistent with the War Powers Resolution,\" that the U.S. was continuing to provide military personnel to the NATO-led KFOR security force in Kosovo. U.S. forces were numbered at 7,500, but were scheduled to be reduced to 6,000 when ongoing troop rotations were completed. U.S. forces in Kosovo are assigned to a sector centered near Gnjilane in eastern Kosovo. Other U.S. military personnel are deployed to other countries to serve in administrative and logistics support roles, with approximately 1,000 U.S. personnel in Macedonia, Albania, and Greece.", "(83) Bosnia . On July 25, 2000, President Clinton reported to Congress, \"consistent with the War Powers Resolution,\" that combat-equipped U.S. military personnel continued to participate in the NATO-led Stabilization Force (SFOR) in Bosnia and Herzegovina, being deployed to Bosnia, and other states in the region in support of peacekeeping efforts in former Yugoslavia. U.S. military personnel levels have been reduced from 6,200 to 4,600. Apart from the forces in Bosnia, approximately 1,000 U.S. personnel continue to be deployed in support roles in Hungary, Croatia, and Italy.", "(84) East Timor . On August 25, 2000, President Clinton reported to Congress,\" consistent with the War Powers Resolution,\" that the United States was contributing three military observers to the United Nations Transitional Administration in East Timor (UNTAET) that is charged by the UN with restoring and maintaining peace and security there. He also noted that the U.S. was maintaining a military presence in East Timor separate from UNTAET, comprised of about 30 U.S. personnel who facilitate and coordinate U.S. military activities in East Timor and rotational operations of U.S. forces there. U.S. forces conduct humanitarian and civic assistance activities for East Timor's citizens. U.S. rotational presence operations in East Timor were presently expected, the President said, to continue through December 2000.", "(85) Yemen . On October 14, 2000, President Clinton reported to Congress, \"consistent with the War Powers Resolution,\" that on October 12, 2000, in the wake of an attack on the USS C ole in the port of Aden, Yemen, he had authorized deployment of about 45 military personnel from U.S. Naval Forces Central Command to Aden to provide \"medical, security, and disaster response assistance.\" The President further reported that on October 13, 2000, about 50 U.S. military security personnel arrived in Aden, and that additional \"security elements\" may be deployed to the area, to enhance the ability of the U.S. to ensure the security of the USS Cole and the personnel responding to the incident. In addition, two U.S. Navy surface combatant vessels are operating in or near Yemeni territorial waters to provide communications and other support, as required.", "(86) Yugoslavia/Kosovo . On December 18, 2000, President Clinton reported to Congress, \"consistent with the War Powers Resolution,\" that the United States was continuing to provide approximately 5,600 U.S. military personnel in support of peacekeeping efforts in Kosovo as part of the NATO-led international security force in Kosovo (KFOR). An additional 500 U.S. military personnel are deployed as the National Support Element in Macedonia, with an occasional presence in Albania and Greece. U.S. forces are assigned to a sector centered around Gnjilane in the eastern portion of Kosovo. The President noted that the mission for these U.S. military forces is maintaining a safe and secure environment through conducting \"security patrols in urban areas and in the countryside throughout their sector.\"", "(87) Bosnia . On January 25, 2001, President George W. Bush reported to Congress, \"consistent with the War Powers Resolution,\" that about 4,400 combat-equipped U.S. Armed Forces continued to be deployed in Bosnia and Herzegovina, and other regional states as part of the NATO-led Stabilization Force (SFOR). Most were based at Tuzla in Bosnia. About 650 others were based in Hungary, Croatia, and Italy, providing logistical and other support.", "(88) East Timor . On March 2, 2001, President George W. Bush reported to Congress, \"consistent with the War Powers Resolution,\" that the U. S. armed forces were continuing to support the United Nations peacekeeping effort in East Timor aimed at providing security and maintaining law and order in East Timor, coordinating delivery of humanitarian assistance, and helping establish the basis for self-government in East Timor. The U.S. had three military observers attached to the United Nations Transitional Administration in East Timor (UNTAET). The United States also has a separate military presence, the U.S. Support Group East Timor (USGET), of approximately 12 U.S. personnel, including a security detachment, which \"facilitates and coordinates\" U.S. military activities in East Timor.", "(89) Yugoslavia/Kosovo . On May 18, 2001, President George W. Bush reported to Congress, \"consistent with the War Powers Resolution,\" that the United States was continuing to provide approximately 6,000 U.S. military personnel in support of peacekeeping efforts in Kosovo as part of the NATO-led international security force in Kosovo (KFOR). An additional 500 U.S. military personnel are deployed as the National Support Element in Macedonia, with an occasional presence in Greece and Albania. U.S. forces in Kosovo are assigned to a sector centered around Gnjilane in the eastern portion. President Bush noted that the mission for these U.S. military forces is maintaining a safe and secure environment through conducting security patrols in urban areas and in the countryside through their sector.", "(90) Bosnia . On July 24, 2001, President George W. Bush reported to Congress, \"consistent with the War Powers Resolution,\" about 3,800 combat-equipped U.S. Armed Forces continued to be deployed in Bosnia and Herzegovina, and other regional states as part of the NATO-led Stabilization Force (SFOR). Most were based at Tuzla in Bosnia. About 500 others were based in Hungary, Croatia, and Italy, providing logistical and other support.", "(91) East Timor . On August 31, 2001, President George W. Bush reported to Congress, \"consistent with the War Powers Resolution,\" that the U. S. armed forces were continuing to support the United Nations peacekeeping effort in East Timor aimed at providing security and maintaining law and order in East Timor, coordinating delivery of humanitarian assistance, and helping establish the basis for self-government in East Timor. The U.S. had three military observers attached to the United Nations Transitional Administration in East Timor (UNTAET). The United States also has a separate military presence, the U.S. Support Group East Timor (USGET), of approximately 20 U.S. personnel, including a security detachment, which \"facilitates and coordinates\" U.S. military activities in East Timor, as well as a rotational presence of U.S. forces through temporary deployments to East Timor. The President stated that U.S. forces would continue a presence through December 2001, while options for a U.S. presence in 2002 are being reviewed, with the President's objective being redeployment of USGET personnel, as circumstances permit.", "(92) Anti-terrorist operations . On September 24, 2001, President George W. Bush reported to Congress, \"consistent with the War Powers Resolution,\" and \"Senate Joint Resolution 23\" that in response to terrorist attacks on the World Trade Center and the Pentagon he had ordered the \"deployment of various combat-equipped and combat support forces to a number of foreign nations in the Central and Pacific Command areas of operations.\" The President noted in efforts to \"prevent and deter terrorism\" he might find it necessary to order additional forces into these and other areas of the world....\" He stated that he could not now predict \"the scope and duration of these deployments,\" nor the \"actions necessary to counter the terrorist threat to the United States.\"", "(93) Afghanistan . On October 9, 2001, President George W. Bush reported to Congress, \"consistent with the War Powers Resolution,\" and \"Senate Joint Resolution 23\" that on October 7, 2001, U.S. Armed Forces \"began combat action in Afghanistan against Al Qaida terrorists and their Taliban supporters.\" The President stated that he had directed this military action in response to the September 11, 2001, attacks on U.S. \"territory, our citizens, and our way of life, and to the continuing threat of terrorist acts against the United States and our friends and allies.\" This military action was \"part of our campaign against terrorism\" and was \"designed to disrupt the use of Afghanistan as a terrorist base of operations.\"", "(94) Yugoslavia/Kosovo . On November 19, 2001, President George W. Bush reported to Congress, \"consistent with the War Powers Resolution,\" that the United States was continuing to provide approximately 5,500 U.S. military personnel in support of peacekeeping efforts in Kosovo as part of the NATO-led international security force in Kosovo (KFOR). An additional 500 U.S. military personnel are deployed as the National Support Element in Macedonia, with an occasional presence in Greece and Albania. U.S. forces in Kosovo are assigned to a sector centered around Gnjilane in the eastern portion. President Bush noted that the mission for these U.S. military forces is maintaining a safe and secure environment through conducting security patrols in urban areas and in the countryside through their sector.", "(95) Bosnia . On January 21, 2002, President George W. Bush reported to Congress, \"consistent with the War Powers Resolution,\" that about 3,100 combat-equipped U.S. Armed Forces continued to be deployed in Bosnia and Herzegovina, and other regional states as part of the NATO-led Stabilization Force (SFOR). Most were based at Tuzla in Bosnia. About 500 others were based in Hungary, Croatia, and Italy, providing logistical and other support.", "(96) East Timor . On February 28, 2002, President George W. Bush reported to Congress, \"consistent with the War Powers Resolution,\" that U. S. armed forces were continuing to support the United Nations peacekeeping effort in East Timor aimed at providing security and maintaining law and order in East Timor, coordinating delivery of humanitarian assistance, and helping establish the basis for self-government in East Timor. The U.S. had three military observers attached to the United Nations Transitional Administration in East Timor (UNTAET). The United States also has a separate military presence, the U.S. Support Group East Timor (USGET), comprised of approximately 10 U.S. personnel, including a security detachment, which \"facilitates and coordinates\" U.S. military activities in East Timor, as well as a rotational presence of U.S. forces through temporary deployments to East Timor. The President stated that U.S. forces would continue a presence through 2002. The President noted his objective was to gradually reduce the \"rotational presence operations,\" and to redeploy USGET personnel, as circumstances permitted.", "(97) Anti-terrorist operations . On March 20, 2002, President George W. Bush reported to Congress, \"consistent with the War Powers Resolution,\" on U.S. efforts in the \"global war on Terrorism.\" He noted that the \"heart of the al-Qaeda training capability\" had been \"seriously degraded,\" and that the remainder of the Taliban and the al-Qaeda fighters were being \"actively pursued and engaged by the U.S., coalition and Afghan forces.\" The United States was also conducting \"maritime interception operations ... to locate and detain suspected al-Qaeda or Taliban leadership fleeing Afghanistan by sea.\" At the Philippine Government's invitation, the President had ordered deployed \"combat-equipped and combat support forces to train with, advise, and assist\" the Philippines' Armed Forces in enhancing their \"existing counterterrorist capabilities.\" The strength of U.S. military forces working with the Philippines was projected to be 600 personnel. The President noted that he was \"assessing options\" for assisting other nations, including Georgia and Yemen, in enhancing their \"counterterrorism capabilities, including training and equipping their armed forces.\" He stated that U.S. combat-equipped and combat support forces would be necessary for these efforts, if undertaken.", "(98) Yugoslavia/Kosovo . On May 17, 2002, President George W. Bush reported to Congress, \"consistent with the War Powers Resolution,\" that the U.S. military was continuing to support peacekeeping efforts of the NATO-led international security force in Kosovo (KFOR). He noted that the current U.S. contribution was about 5,100 military personnel, with an additional 468 personnel in Macedonia; and an occasional presence in Albania and Greece.", "(99) Bosnia . On July 22, 2002, President George W. Bush reported to Congress, \"consistent with the War Powers Resolution,\" that the U.S. military was continuing to support peacekeeping efforts of the NATO-led Stabilization Force (SFOR) in Bosnia and Herzegovina and other regional states. He noted that the current U.S. contribution was \"approximately 2,400 personnel.\" Most U.S. forces in Bosnia and Herzegovina are assigned to the Multinational Division, North headquartered in Tuzla. An additional 60 U.S. military personnel are deployed to Hungary and Croatia to provide logistical and other support.", "(100) Anti-terrorist operations . On September 20, 2002, President Bush reported to Congress \"consistent with the War Powers Resolution,\" that U.S. \"combat-equipped and combat support forces\" have been deployed to the Philippines since January 2002 to train with, assist and advise the Philippines' Armed Forces in enhancing their \"counterterrorist capabilities.\" He added that U.S. forces were conducting maritime interception operations in the Central and European Command areas to combat movement, arming, or financing of \"international terrorists.\" He also noted that U.S. combat personnel had been deployed to Georgia and Yemen to help enhance the \"counterterrorist capabilities\" of their armed forces.", "(101) Cote d'Ivoire . On September 26, 2002, President Bush reported to Congress \"consistent with the War Powers Resolution,\" that in response to a rebellion in Cote d'Ivoire that he had on September 25, 2002, sent U.S. military personnel into Cote d'Ivoire to assist in the evacuation of American citizens and third country nationals from the city of Bouake; and otherwise assist in other evacuations as necessary.", "(102) Yugoslavia/Kosovo . On November 15, 2002, the President reported to Congress \"consistent with the War Powers Resolution\" that the U.S. was continuing to deploy combat equipped military personnel as part of the NATO-led international security force in Kosovo (KFOR). The U.S. had approximately 4,350 U.S. military personnel in Kosovo, with an additional 266 military personnel in Macedonia. The U.S. also has an occasional presence in Albania and Greece, associated with the KFOR mission.", "(103) Bosnia . On January 21, 2003, President George W. Bush reported to Congress, \"consistent with the War Powers Resolution,\" that about 1,800 U.S. Armed Forces personnel continued to be deployed in Bosnia and Herzegovina, and other regional states as part of the NATO-led Stabilization Force (SFOR). Most were based at Tuzla in Bosnia. About 80 others were based in Hungary and Croatia, providing logistical and other support.", "(104) Anti-terrorist operations . On March 20, 2003, President Bush reported to Congress, \"consistent with the War Powers Resolution,\" as well as P.L. 107-40 , and \"pursuant to\" his authority as Commander in Chief, that he had continued a number of U.S. military operations globally in the war against terrorism. These military operations included ongoing U.S. actions against al-Qaeda fighters in Afghanistan; collaborative anti-terror operations with forces of Pakistan in the Pakistan/Afghanistan border area; \"maritime interception operations on the high seas\" in areas of responsibility of the Central and European Commands to prevent terrorist movement and other activities; and military support for the armed forces of Georgia and Yemen in counter-terrorism operations.", "(105) War against Iraq . On March 21, 2003, President Bush reported to Congress, \"consistent with the War Powers Resolution,\" as well as P.L. 102-1 and P.L. 107-243 , and \"pursuant to\" his authority as Commander in Chief, that he had \"directed U.S. Armed Forces, operating with other coalition forces, to commence operations on March 19, 2003, against Iraq.\" He further stated that it was not possible to know at present the duration of active combat operations or the scope necessary to accomplish the goals of the operation\u2014\"to disarm Iraq in pursuit of peace, stability, and security both in the Gulf region and in the United States.\"", "(106) Yugoslavia/Kosovo . On May 14, 2003, President Bush reported to Congress, \"consistent with the War Powers Resolution,\" that combat-equipped U.S. military personnel continued to be deployed as part of the NATO-led international security force in Kosovo (KFOR). He noted that about 2,250 U.S. military personnel were deployed in Kosovo, and additional military personnel operated, on occasion, from Macedonia, Albania, and Greece in support of KFOR operations.", "(107) Liberia . On June 9, 2003, President Bush reported to Congress, \"consistent with the War Powers Resolution,\" that on June 8 he had sent about 35 combat-equipped U.S. military personnel into Monrovia, Liberia, to augment U.S. Embassy security forces, to aid in the possible evacuation of U.S. citizens if necessary. The President also noted that he had sent about 34 combat-equipped U.S. military personnel to help secure the U.S. embassy in Nouakchott, Mauritania, and to assist in evacuation of American citizens if required. They were expected to arrive at the U.S. embassy by June 10, 2003. Back-up and support personnel were sent to Dakar, Senegal, to aid in any necessary evacuation from either Liberia or Mauritania.", "(108) Bosnia . On July 22, 2003, President Bush reported to Congress, \"consistent with the War Powers Resolution,\" that the United States continued to provide about 1,800 combat-equipped military personnel in Bosnia and Herzegovina in support of NATO's Stabilization Force (SFOR) and its peacekeeping efforts in this country.", "(109) Liberia . On August 13, 2003, President Bush reported to Congress, \"consistent with the War Powers Resolution,\" that in response to conditions in Liberia, on August 11, 2003, he had authorized about 4,350 U.S. combat-equipped military personnel to enter Liberian territorial waters in support of U.N. and West African States efforts to restore order and provide humanitarian assistance in Liberia.", "(110) Anti-terrorist operations . On September 19, 2003, President Bush reported to Congress \"consistent with the War Powers Resolution,\" that U.S. \"combat-equipped and combat support forces\" continue to be deployed at a number of locations around the world as part of U.S. anti-terrorism efforts. American forces support anti-terrorism efforts in the Philippines, and maritime interception operations continue on the high seas in the Central, European and Pacific Command areas of responsibility, to \"prevent the movement, arming, or financing of international terrorists.\" He also noted that \"U.S. combat equipped and support forces\" had been deployed to Georgia and Djibouti to help in enhancing their \"counterterrorist capabilities.\"", "(111) Yugoslavia/Kosovo . On November 14, 2003, the President reported to Congress \"consistent with the War Powers Resolution\" that the United States was continuing to deploy combat equipped military personnel as part of the NATO-led international security force in Kosovo (KFOR). The United States had approximately 2,100 U.S. military personnel in Kosovo, with additional American military personnel operating out of Macedonia, Albania, and Greece, in support of KFOR operations.", "(112) Bosnia . On January 22, 2004, the President reported to Congress \"consistent with the War Powers Resolution\" that the United States was continuing to deploy combat equipped military personnel in Bosnia and Herzegovina in support of NATO's Stabilization Force (SFOR) and its peacekeeping efforts in this country. About 1,800 U.S. personnel are participating.", "(113) Haiti . On February 25, 2004, the President reported to Congress \"consistent with the War Powers Resolution\" that, on February 23, he had sent a combat-equipped \"security force\" of about \"55 U.S. military personnel from the U.S. Joint Forces Command\" to Port-au-Prince, Haiti to augment the U.S. Embassy security forces there and to protect American citizens and property in light of the instability created by the armed rebellion in Haiti.", "(114) Haiti . On March 2, 2004, the President reported to Congress \"consistent with the War Powers Resolution\" that on February 29 he had sent about \"200 additional U.S. combat-equipped, military personnel from the U.S. Joint Forces Command\" to Port-au-Prince, Haiti for a variety of purposes, including preparing the way for a UN Multinational Interim Force, and otherwise supporting UN Security Council Resolution 1529 (2004).", "(115) Anti-terrorist operations . On March 20, 2004, the President sent to Congress \"consistent with the War Powers Resolution,\" a consolidated report giving details of multiple ongoing United States military deployments and operations \"in support of the global war on terrorism (including in Afghanistan),\" as well as operations in Bosnia and Herzegovina, Kosovo, and Haiti. In this report, the President noted that U.S. anti-terror related activities were underway in Georgia, Djibouti, Kenya, Ethiopia, Yemen, and Eritrea. He further noted that U.S. combat-equipped military personnel continued to be deployed in Kosovo as part of the NATO-led KFOR (1,900 personnel); in Bosnia and Herzegovina as part of the NATO-led SFOR (about 1,100 personnel); and approximately 1,800 military personnel were deployed in Haiti as part of the U.N. Multinational Interim Force.", "(116) Anti-terrorist operations . On November 4, 2004, the President sent to Congress, \"consistent with the War Powers Resolution,\" a consolidated report giving details of multiple ongoing United States military deployments and operations \"in support of the global war on terrorism.\" These deployments, support or military operations include activities in Afghanistan, Djibouti, as well as Kenya, Ethiopia, Eritrea, Bosnia and Herzegovina, and Kosovo. In this report, the President noted that U.S. anti-terror related activities were underway in Djibouti, Kenya, Ethiopia, Yemen, and Eritrea. He further noted that U.S. combat-equipped military personnel continued to be deployed in Kosovo as part of the NATO-led KFOR (1,800 personnel); and in Bosnia and Herzegovina as part of the NATO-led SFOR (about 1,000 personnel). Meanwhile, he stated that the United States continued to deploy more than 135,000 military personnel in Iraq.", "(117) Anti-terrorist operations . On May 20, 2005, the President sent to Congress \"consistent with the War Powers Resolution,\" a consolidated report giving details of multiple ongoing United States military deployments and operations \"in support of the global war on terrorism,\" as well as operations in Iraq, where about 139,000 U.S. military personnel were stationed. U.S. forces are also deployed in Kenya, Ethiopia, Yemen, Eritrea, and Djibouti assisting in \"enhancing counter-terrorism capabilities\" of these nations. The President further noted that U.S. combat-equipped military personnel were deployed in Kosovo as part of the NATO-led KFOR (1,700 personnel). Approximately 235 U.S. personnel were also deployed in Bosnia and Herzegovina as part of the NATO Headquarters-Sarajevo who assist in defense reform and perform operational tasks, such as counter-terrorism and supporting the International Criminal Tribunal for the Former Yugoslavia.", "(118) Anti-terrorist operations . On December 7, 2005, the President sent to Congress \"consistent\" with the War Powers Resolution, a consolidated report giving details of multiple ongoing United States military deployments and operations \"in support of the global war on terrorism,\" and in support of the Multinational Force in Iraq, where about 160, 000 U.S. military personnel are deployed. U.S. forces are also deployed in the Horn of Africa region\u2014Kenya, Ethiopia, Yemen, and Djibouti\u2014assisting in \"enhancing counter-terrorism capabilities\" of these nations. The President further noted that U.S. combat-equipped military personnel continued to be deployed in Kosovo as part of the NATO-led KFOR (1,700 personnel). Approximately 220 U.S. personnel are also deployed in Bosnia and Herzegovina as part of the NATO Headquarters-Sarajevo who assist in defense reform and perform operational tasks, such as \"counter-terrorism and supporting the International Criminal Tribunal for the Former Yugoslavia.\"", "(119) Anti-terrorist operations . On June 15, 2006, the President sent to Congress \"consistent\" with the War Powers Resolution, a consolidated report giving details of multiple ongoing United States military deployments and operations \"in support of the war on terror,\" and in Kosovo, Bosnia and Herzegovina, and as part of the Multinational Force (MNF) in Iraq. Presently, about 131, 000 military personnel were deployed in Iraq. U.S. forces were also deployed in the Horn of Africa region, and in Djibouti to support necessary operations against al-Qaida and other international terrorists operating in the region. U.S. military personnel continue to support the NATO-led Kosovo Force (KFOR). The current U.S. contribution to KFOR is about 1,700 military personnel. The NATO Headquarters-Sarajevo was established in November 22, 2004, as a successor to its stabilization operations in Bosnia-Herzegovina to continue to assist in implementing the peace agreement. Approximately 250 U.S. personnel are assigned to the NATO Headquarters-Sarajevo who assist in defense reform and perform operational tasks, such as \"counter-terrorism and supporting the International Criminal Tribunal for the Former Yugoslavia.\"", "(120) Lebanon . On July 18, 2006, the President reported to Congress \"consistent\" with the War Powers Resolution, that in response to the security threat posed in Lebanon to U.S. Embassy personnel and citizens and designated third country personnel,\" he had deployed combat-equipped military helicopters and military personnel to Beirut to assist in the departure of the persons under threat from Lebanon. The President noted that additional combat-equipped U.S. military forces may be deployed \"to Lebanon, Cyprus and other locations, as necessary\" to assist further departures of persons from Lebanon and to provide security. He further stated that once the threat to U.S. citizens and property has ended, the U.S. military forces would redeploy.", "(121) Anti-terrorist operations . On December 15, 2006, the President sent to Congress \"consistent\" with the War Powers Resolution, a consolidated report giving details of multiple ongoing United States military deployments and operations \"in support of the war on terror,\" in Kosovo, Bosnia and Herzegovina, and as part of the Multinational Force (MNF) in Iraq. Presently, about 134, 000 military personnel are deployed in Iraq. U.S. forces were also deployed in the Horn of Africa region, and in Djibouti to support necessary operations against al-Qaida and other international terrorists operating in the region, including Yemen. U.S. military personnel continue to support the NATO-led Kosovo Force (KFOR). The U.S. contribution to KFOR was about 1,700 military personnel. The NATO Headquarters-Sarajevo was established in November 22, 2004, as a successor to its stabilization operations in Bosnia-Herzegovina to continue to assist in implementing the peace agreement. Approximately 100 U.S. personnel are assigned to the NATO Headquarters-Sarajevo who assist in defense reform and perform operational tasks, such as \"counter-terrorism and supporting the International Criminal Tribunal for the Former Yugoslavia.\"", "(122) Anti-terrorist operations . On June 15, 2007, the President sent to Congress, \"consistent\" with the War Powers Resolution, a consolidated report giving details of ongoing U.S. military deployments and operations \"in support of the war on terror,\" and in support of the NATO-led Kosovo Force (KFOR). The President reported that various U.S. \"combat-equipped and combat-support forces\" were deployed to \"a number of locations in the Central, Pacific, European (KFOR), and Southern Command areas of operation\" and were engaged in combat operations against al-Qaida terrorists and their supporters. The United States was \"pursuing and engaging remnant al-Qaida and Taliban fighters in Afghanistan.\" U.S. forces in Afghanistan totaled approximately 25,945. Of this total, \"approximately 14,340 were assigned to the International Security Assistance Force (ISAF) in Afghanistan.\" The U.S. military continued to support peacekeeping operations in Kosovo, specifically the NATO-led Kosovo Force (KFOR). The U.S. contribution to KFOR in Kosovo was approximately 1,584 military personnel.", "(123) Anti-terrorist operations . On December 14, 2007, the President sent to Congress, \"consistent with the War Powers Resolution,\" a consolidated report giving details of ongoing U.S. military deployments and operations \"in support of the war on terror,\" and in support of the NATO-led Kosovo Force (KFOR). The President reported that various U.S. \"combat-equipped and combat-support forces\" were deployed to \"a number of locations in the Central, Pacific, European, and Southern Command areas of operation\" and were engaged in combat operations against al-Qaida terrorists and their supporters. The United States was \"pursuing and engaging remnant al-Qaida and Taliban fighters in Afghanistan.\" U.S. forces in Afghanistan totaled approximately 25,900. Of this total, \"approximately 15,180 were assigned to the International Security Assistance Force (ISAF) in Afghanistan.\" The U.S. military supports peacekeeping operations in Kosovo, specifically the NATO-led Kosovo Force (KFOR). The U.S. contribution to KFOR in Kosovo was approximately 1,498 military personnel.", "(124) Anti-terrorist operations . On June 13, 2008, the President sent to Congress \"consistent with the War Powers Resolution,\" a consolidated report giving details of ongoing U.S. military deployments and operations \"in support of the war on terror,\" and in support of the NATO-led Kosovo Force (KFOR). The President reported that various U.S. \"combat-equipped and combat-support forces\" were deployed to \"a number of locations in the Central, Pacific, European, and Southern Command areas of operation\" and were engaged in combat operations against al-Qaida terrorists and their supporters. The United States is \"pursuing and engaging remnant al-Qaida and Taliban fighters in Afghanistan.\" U.S. forces in Afghanistan totaled approximately 31,122. Of this total, \"approximately 14,275 were assigned to the International Security Assistance Force (ISAF) in Afghanistan.\" The U.S. military continued to support peacekeeping operations in Kosovo, specifically the NATO-led Kosovo Force (KFOR). The U.S. contribution to KFOR in Kosovo was about 1,500 military personnel.", "(125) Anti-terrorist operations . On December 16, 2008, President George W. Bush sent to Congress \"consistent with the War Powers Resolution,\" a consolidated report giving details of ongoing U.S. military deployments and operations \"in support of the war on terror,\" and in support of the NATO-led Kosovo Force (KFOR). The President reported that various U.S. \"combat-equipped and combat-support forces\" were deployed to \"a number of locations in the Central, Pacific, European, Southern, and Africa Command areas of operation\" and were engaged in combat operations against al-Qaida and their supporters. The United States is \"actively pursuing and engaging remnant al-Qaida and Taliban fighters in Afghanistan.\" U.S. forces in Afghanistan total approximately 31,000. Of this total, \"approximately 13,000 are assigned to the International Security Assistance Force (ISAF) in Afghanistan.\" The U.S. military continued to support peacekeeping operations in Kosovo, specifically the NATO-led Kosovo Force (KFOR). The U.S. contribution to KFOR in Kosovo was about 1,500 military personnel.", "(126) Anti-terrorist operations . On June 15, 2009, President Barack Obama sent to Congress \"consistent with the War Powers Resolution\" a supplemental consolidated report giving details of \"ongoing contingency operations overseas.\" The report noted that the total number of U.S. forces in Afghanistan was \"approximately 58,000,\" of which approximately 20,000 were assigned to the International Security Assistance Force (ISAF) in Afghanistan.\" The United States continued to pursue and engage \"remaining al-Qa'ida and Taliban forces in Afghanistan.\" The U.S. also continued to deploy military forces in support of the Multinational Force (MNF) in Iraq. The current U.S. contribution to this effort is \"approximately 138,000 U.S. military personnel.\" U.S. military operations continue in Kosovo, as part of the NATO-led Kosovo Force (KFOR). Presently the United States contributed approximately 1,400 U.S. military personnel to KFOR. In addition, the United States continued to deploy \"U.S. combat-equipped forces to help enhance the counterterrorism capabilities of our friends and allies\" not only in the Horn of Africa region, but globally through \"maritime interception operations on the high seas\" aimed at blocking the \"movement, arming and financing of international terrorists.\"", "(127) Anti-terrorist operations . On December 5, 2009, the President sent to Congress \"consistent with the War Powers Resolution,\" a consolidated report giving details of \"global deployments of U.S. Armed Forces equipped for combat.\" The report detailed \"ongoing U.S. contingency operations overseas.\" The report noted that the total number of U.S. forces in Afghanistan was \"approximately 68,000,\" of which approximately 34,000 are assigned to the International Security Assistance Force (ISAF) in Afghanistan. The United States continued to pursue and engage \"remaining al-Qa'ida and Taliban forces in Afghanistan.\" The United States has deployed \"various combat-equipped forces to a number of locations in the Central, Pacific, European, Southern, and African Command areas of operation\" in support of anti-terrorist and anti-al-Qa'ida actions. The U.S. also continued to deploy military forces in Iraq to \"maintain security and stability\" there. These Iraqi operations continue pursuant to the terms of a bilateral agreement between the U.S. and Iraq, which entered into force on January 1, 2009. The U.S. force level in Iraq was \"approximately 116,000 U.S. military personnel.\" U.S. military operations continue in Kosovo, as part of the NATO-led Kosovo Force (KFOR). The United States contributed approximately 1,475 U.S. military personnel to KFOR. In addition, the United States continued to deploy \"U.S. combat-equipped forces to assist in enhancing the counterterrorism capabilities of our friends and allies\" not only in the Horn of Africa region, but globally through \"maritime interception operations on the high seas\" aimed at blocking the \"movement, arming and financing of international terrorists.\"", "(128) Anti-terrorist operations . On June 15, 2010, the President sent to Congress, \"consistent with the War Powers Resolution,\" a consolidated report, giving details of \"deployments of U.S. Armed Forces equipped for combat.\" The report noted that the total number of U.S. forces in Afghanistan was \"approximately 87,000,\" of which over 62,000 are assigned to the International Security Assistance Force (ISAF) in Afghanistan. The United States continues combat operations \"against al-Qa'ida terrorists and their Taliban supporters\" in Afghanistan. The United States has deployed \"combat-equipped forces to a number of locations in the U.S. Central, Pacific, European, Southern and African Command areas of operation\" in support of anti-terrorist and anti-al-Qa'ida actions. The United States also continues to deploy military forces in Iraq to \"maintain security and stability\" there. These Iraqi operations continue pursuant to the terms of a bilateral agreement between the United States and Iraq, which entered into force on January 1, 2009. The current U.S. force level in Iraq is \"approximately 95,000 U.S. military personnel.\" U.S. military operations continue in Kosovo, as part of the NATO-led Kosovo Force (KFOR). Presently, the United States contributes approximately 1,074 U.S. military personnel to KFOR. In addition, the United States continues to \"conduct maritime interception operations on the high seas\" directed at \"stopping the movement, arming and financing of international terrorist groups.\"", "(129) Anti-terrorist operations . On December 15, 2010, the President submitted to Congress, \"consistent with the War Powers Resolution,\" a consolidated report, detailing \"deployments of U.S. Armed Forces equipped for combat.\" The report noted that the total number of U.S. forces in Afghanistan was \"approximately 97,500,\" of which over 81,500 were assigned to the International Security Assistance Force (ISAF) in Afghanistan. The United States is continuing combat operations \"against al-Qa'ida terrorists and their Taliban supporters\" in Afghanistan. The United States has deployed \"combat-equipped forces to a number of locations in the U.S. Central, Pacific, European, Southern, and African Command areas of operation\" in support of anti-terrorist and anti-al-Qa'ida actions. In addition, the United States continues to conduct \"maritime interception operations on the high seas in the areas of responsibility of the geographic combatant commands\" directed at \"stopping the movement, arming and financing of international terrorist groups.\" The United States also continues to deploy military forces in Iraq in support of Iraqi efforts to \"maintain security and stability\" there. These Iraqi operations continue pursuant to the terms of a bilateral agreement between the United States and Iraq, which entered into force on January 1, 2009. The current U.S. force level in Iraq is \"approximately 48,400 U.S. military personnel.\" U.S. military operations also continue in Kosovo, as part of the NATO-led Kosovo Force (KFOR). The United States currently contributes approximately 808 U.S. military personnel to KFOR.", "(130) Anti-terrorist operations . On June 15, 2011, the President sent to Congress, \"consistent with the War Powers Resolution,\" a supplemental consolidated report, giving details of \"global deployments of U.S. Armed Forces equipped for combat.\" The report detailed ongoing U.S. contingency operations overseas. The report noted that the total number of U.S. forces in Afghanistan was \"approximately 99,000,\" of which approximately 83,000 are assigned to the International Security Assistance Force (ISAF) in Afghanistan. The United States continues to pursue and engage \"remaining al-Qa'ida and Taliban fighters in Afghanistan.\" The United States has deployed various \"combat-equipped forces\" to a number of locations in the Central, Pacific, European, Southern, and African Command areas of operation\" in support of anti-terrorist and anti-al-Qa'ida actions. This includes the deployment of U.S. military forces globally to assist in enhancing the counterterrorism capabilities of our friends and allies through maritime interception operations on the high seas \"aimed at stopping the movement, arming and financing of certain international terrorist groups.\" A combat-equipped security force of about \"40 U.S. military personnel from the U.S. Central Command\" were deployed to Cairo, Egypt, on January 31, 2011, for the sole purpose of \"protecting American citizens and property.\" That force remains at the U.S. Embassy in Cairo. The United States also continues to deploy military forces in Iraq to help it \"maintain security and stability\" there. These Iraqi operations continue pursuant to the terms of a bilateral agreement between the United States and Iraq, which entered into force on January 1, 2009. The current U.S. force level in Iraq is \"approximately 45,000 U.S. military personnel.\" In Libya, since April 4, 2011, the United States has transferred responsibility for military operations there to NATO, and U.S. involvement \"has assumed a supporting role in the coalition's efforts.\" U.S. support in Libya has been limited to \"intelligence, logistical support, and search and rescue assistance.\" The U.S. military aircraft have also been used to assist in the \"suppression and destruction of air defenses in support of the no-fly zone\" over Libya. Since April 23, 2011, the United States has supported the coalition effort in Libya through use of \"unmanned aerial vehicles against a limited set of clearly defined targets\" there. Except in the case of operations to \"rescue the crew of a U.S. aircraft\" on March 21, 2011, \"the United States has deployed no ground forces to Libya.\" U.S. military operations continue in Kosovo, as part of the NATO-led Kosovo Force (KFOR). Presently the United States contributes approximately 800 U.S. military personnel to KFOR. ", "(131) Libya . On March 21, 2011, the President submitted to Congress, \"consistent with the War Powers Resolution,\" a report stating that at \"approximately 3:00 p.m. Eastern Daylight Time, on March 19, 2011,\" he had directed U.S. military forces to commence \"operations to assist an international effort authorized by the United Nations (U.N.) Security Council and undertaken with the support of European allies and Arab partners, to prevent a humanitarian catastrophe and address the threat posed to international peace and security by the crisis in Libya.\" He further stated that U.S. military forces, \"under the command of Commander, U.S. Africa Command, began a series of strikes against air defense systems and military airfields for the purposes of preparing a no-fly zone.\" These actions were part of \"the multilateral response authorized under U.N. Security Council Resolution 1973,\" and the President added that \"these strikes will be limited in their nature, duration, and scope. Their purpose is to support an international coalition as it takes all necessary measures to enforce the terms of U.N. Security Council Resolution 1973. These limited U.S. actions will set the stage for further action by other coalition partners.\"", "The President noted that ", "United Nations Security Council Resolution 1973 authorized Member States, under Chapter VII of the U.N. Charter, to take all necessary measures to protect civilians and civilian populated areas under threat of attack in Libya, including the establishment and enforcement of a \"no-fly zone\" in the airspace of Libya. United States military efforts are discrete and focused on employing unique U.S. military capabilities to set the conditions for our European allies and Arab partners to carry out the measures authorized by the U.N. Security Council Resolution.", "The President stated further that the \"United States has not deployed ground forces into Libya. United States forces are conducting a limited and well-defined mission in support of international efforts to protect civilians and prevent a humanitarian disaster.\" Accordingly, he added, \"U.S. forces have targeted the Qadhafi regime's air defense systems, command and control structures, and other capabilities of Qadhafi's armed forces used to attack civilians and civilian populated areas.\" It was the intent of the United States, he said, to \"seek a rapid, but responsible, transition of operations to coalition, regional, or international organizations that are postured to continue activities as may be necessary to realize the objectives of U.N. Security Council Resolutions 1970 and 1973.\" The President said that the actions he had directed were \"in the national security and foreign policy interests of the United States.\" He took them, the President stated, \"pursuant to my constitutional authority to conduct U.S. foreign relations and as Commander in Chief and Chief Executive.\"", "(132) Central Africa . On October 14, 2011, the President submitted to Congress, \"consistent with the War Powers Resolution,\" a report stating that \"he had authorized a small number of combat-equipped U.S. forces to deploy to central Africa to provide assistance to regional forces that are working toward the removal of Joseph Kony,\" leader of the Lord's Resistance Army (LRA), from the battlefield. For over two decades, the LRA has murdered, kidnapped, and raped tens of thousands of men, women, and children throughout central Africa, and has continued to commit atrocities in South Sudan, the Democratic Republic of the Congo, and the Central African Republic. The U.S. Armed Forces, the President noted, would be a \"significant contribution toward counter-LRA efforts in central Africa.\" The President stated that on \"October 12, 2011, the initial team of U.S. military personnel with appropriate combat equipment deployed to Uganda.\" In the \"next month, additional forces will deploy, including a second combat-equipped team and associated headquarters, communications, and logistics personnel.\" The President further stated that the \"total number of U.S. military personnel deploying for this mission is approximately 100. These forces will act as advisors to partner forces that have the goals of removing from the battlefield Joseph Kony and other senior leadership of the LRA.\" U.S. forces \"will provide information, advice, and assistance to select partner nation forces.\" With the approval of the respective host nations, \"elements of these U.S. forces will deploy into Uganda, South Sudan, the Central African Republic, and the Democratic Republic of the Congo. The support provided by U.S. forces will enhance regional efforts against the LRA.\" The President emphasized that even though the \"U.S. forces are combat-equipped, they will only be providing information, advice, and assistance to partner nation forces, and they will not themselves engage LRA forces unless necessary for self-defense. All appropriate precautions have been taken to ensure the safety of U.S. military personnel during their deployment.\" The President took note in his report that Congress had previously \"expressed support for increased, comprehensive U.S. efforts to help mitigate and eliminate the threat posed by the LRA to civilians and regional stability\" through the passage of the Lord's Resistance Army Disarmament and Northern Uganda Recovery Act of 2009, P.L. 111-172 , enacted May 24, 2010.", "(133) Anti-terrorist operations . On December 15, 2011, the President submitted to Congress, \"consistent with the War Powers Resolution,\" a supplemental consolidated report, giving details of \"deployments of U.S. Armed Forces equipped for combat.\" The report detailed ongoing U.S. contingency operations overseas. The report noted that the total number of U.S. forces in Afghanistan was \"approximately 93,000,\" of which approximately 78,000 are assigned to the International Security Assistance Force (ISAF) in Afghanistan. The United States continues to pursue and engage \"remaining al-Qa'ida and Taliban fighters in Afghanistan.\" The United States has deployed various \"combat-equipped forces\" to a number of locations in the Central, Pacific, European, Southern, and African Command areas of operation in support of anti-terrorist and anti-al-Qa'ida actions. This includes the deployment of U.S. military forces globally: \"including special operations and other forces\" for \"sensitive operations\" in various places, as well as forces to assist in enhancing the counterterrorism capabilities of our friends and allies. U.S. forces also have engaged in maritime interception operations on the high seas \"aimed at stopping the movement, arming and financing of certain international terrorist groups.\" The United States continued to deploy military forces in Iraq to help it \"maintain security and stability\" there. These Iraqi operations were undertaken pursuant to the terms of a bilateral agreement between the United States and Iraq, which entered into force on January 1, 2009. The U.S. force level in Iraq on October 28, 2011, was \"36,001 U.S. military personnel.\" The U.S. was committed to withdraw U.S. forces from Iraq by December 31, 2011. (This occurred, as scheduled, after this report was submitted.) In Libya, after April 4, 2011, the United States transferred responsibility for military operations there to NATO, and U.S. involvement \"assumed a supporting role in the coalition's efforts.\" U.S. support in Libya was limited to \"intelligence, logistical support, and search and rescue assistance.\" The U.S. military aircraft were also used to assist in the \"suppression and destruction of air defenses in support of the no-fly zone\" over Libya. After April 23, 2011, the United States supported the coalition effort in Libya through use of \"unmanned aerial vehicles against a limited set of clearly defined targets\" there. Except in the case of operations to \"rescue the crew of a U.S. aircraft\" on March 21, 2011, and deploying 16 U.S. military personnel to aid in re-establishing the U.S. Embassy in Tripoli in September 2011, \"the U.S. deployed no ground forces to Libya.\" On October 27, 2011, the United Nations terminated the \"no-fly zone\" effective October 31, 2011. NATO terminated its mission during this same time. U.S. military operations continue in Kosovo, as part of the NATO-led Kosovo Force (KFOR). Presently the United States contributes approximately 800 U.S. military personnel to KFOR. ", "(134) Somalia . On January 26, 2012, the President submitted to Congress, \"consistent with the War Powers Resolution,\" a report detailing a successful U.S. Special Operations Forces operation in Somalia of January 24, 2012, to rescue Ms. Jessica Buchanan, a U.S. citizen who had been kidnapped by a group linked to Somali pirates and financiers. This operation was undertaken \"by a small number of joint combat-equipped U.S. forces\" following receipt of reliable intelligence establishing her location in Somalia. A Danish national Poul Hagen Thisted, kidnapped with Ms. Buchanan, was also rescued with her.", "(135) Anti-terrorist operations . On June 15, 2012, the President reported to Congress, \"consistent with\" the War Powers Resolution, a consolidated report regarding various deployments of U.S. Armed Forces equipped for combat. In the efforts in support of U.S. counterterrorism (CT) objectives against al-Qa'ida, the Taliban and, associated forces, he noted that U.S. forces were engaged in Afghanistan in the above effort were \"approximately 90,000.\" With regard to other counter-terrorism operations, the President stated that the United States had deployed \"U.S. combat-equipped forces to assist in enhancing the CT capabilities of our friends and allies including special operations and other forces for sensitive operations in various locations around the world.\" He noted that the \"U.S. military has taken direct action in Somalia against members of al-Qa'ida, including those who are also members of al-Shabaab, who are engaged in efforts to carry out terrorist attacks against the United States and our interests.\" The President further stated that the U.S. military had been \"working closely with the Yemini government to operationally and ultimately eliminate the terrorist threat posed by al-Qa-ida in the Arabian Peninsula (AQAP), the most active and dangerous affiliate of al-Qa'ida today.\" He added that these \"joint efforts have resulted in direct action against a limited number of AQAP operatives and senior leaders in that country who posed a terrorist threat to the United States and our interests.\" The President noted that he would direct \"additional measures against al-Qa'ida, the Taliban, and associated forces to protect U.S. citizens and interests.\" Further information on such matters is provided in a \"classified annex to this report....\" Other military operations reported by the President include the deployment of U.S. combat-equipped military personnel to Uganda \"to serve as advisors to regional forces that are working to apprehend or remove Joseph Kony and other senior Lord's Resistance Army (LRA) leaders from the battlefield and to protect local populations.\" The total number of U.S. military personnel deployed for this mission is \"approximately 90,\" and elements of these U.S. forces have been sent to \"forward locations in the LRA-affected areas of the Republic of South Sudan, the Democratic Republic of the Congo, and the Central African Republic.\" These U.S. forces \"will not engage LRA forces except in self-defense.\" The President also reported that presently the U.S. was contributing \"approximately 817 military personnel\" to the NATO-led Kosovo Force (KFOR) in Kosovo. He also reported that the U.S. remained prepared to engage in \"maritime interception operations\" intended to stop the \"movement, arming, and financing of certain international terrorist groups,\" as well as stopping \"proliferation by sea of weapons of mass destruction and related materials.\" Additional details about these efforts are included in \"the classified annex\" to this report.", "(136) Libya/Yemen . On September 14, 2012, the President reported to Congress, \"consistent with\" the War Powers Resolution, that on September 12, 2012, he ordered deployed to Libya \"a security force from the U.S. Africa Command\" to \"support the security of U.S. personnel in Libya.\" This action was taken in response to the attack on the U.S. \"diplomatic post in Benghazi, Libya,\" that had killed four America citizens, including U.S. Ambassador John Christopher Stevens. The President added on September 13, 2012, that \"an additional security force arrived in Yemen in response to security threats there.\" He further stated that \"Although these security forces are equipped for combat, these movements have been undertaken solely for the purpose of protecting American citizens and property.\" These security forces will remain in Libya and in Yemen, he noted, \"until the security situation becomes such that they are no longer needed.\"", "(137) Six-Month Periodic Report. On December 14, 2012, President Obama reported to Congress concerning ongoing military deployments for U.S. counterterrorism operations, military operations in Central Africa, maritime interception operations, military operations in Egypt, U.S./NATO Operations in Kosovo, and regional security operations in Libya and Yemen.", "(138) Chad/Central African Republic. On December 29, 2012, President Obama reported to Congress that he had ordered deployment of \"a stand-by response and evacuation force of approximately 50 U.S. military personnel from U.S. Africa Command\" to Chad \"to support the evacuation of U.S. embassy personnel and U.S. citizens from the Central African Republic,\" due to the \"the deteriorating security situation\" in that country. ", "(139) Somalia. On January 13, 2013, the President notified Congress that U.S. combat aircraft entered Somali airspace on January 11, 2013, in support of a French mission to rescue a French citizen held hostage by the al-Shabaab terror group, but did not \"employ weapons\" and departed Somali airspace the same day.", "(140) Niger. On February 22, 2013, the President notified Congress of deployment of \"the last elements of ... approximately 40 additional U.S. military personnel\" to Niger to \"provide support for intelligence collection and will also facilitate intelligence sharing with French forces conducting operations in Mali, and with other partners in the region.\" The President stated that the forces are combat-equipped \"for the purpose of providing their own force protection and security.\"", "(141) Six-Month Periodic Report. On June 14, 2013, President Obama reported to Congress concerning ongoing military deployments for U.S. counterterrorism operations, military operations in Central Africa, maritime interception operations, military operations in Egypt, U.S./NATO Operations in Kosovo, and regional security operations in Libya and Yemen. He also notified Congress that forces deployed to Chad in December 2012 had withdrawn.", "(142) Jordan. On June 21, 2013, the President reported to Congress on deploying U.S. Armed Forces to Jordan \"solely to participate in a training exercise,\" and \"a combat-equipped detachment of approximately 700 of these forces remained in Jordan after the conclusion of the exercise to join other U.S. forces already in Jordan.\"", "(143) Six-Month Periodic Report. On December 13, 2013, President Obama reported to Congress concerning ongoing military deployments for U.S. counterterrorism operations, military operations in Central Africa, maritime interception operations, military operations in Egypt, military operations in Jordan, U.S./NATO Operations in Kosovo, and regional security operations in Libya and Yemen.", "(144) South Sudan. On December 19, 2013, the President notified Congress that \"45 U.S. Armed Forces personnel deployed to South Sudan to support the security of U.S. personnel and our Embassy\" for \"the purpose of protecting U.S. citizens and property.\"", "(145) South Sudan. On December 22, 2013, the President notified Congress of deployment of \"46 additional U.S. military personnel deployed by military aircraft to the area of Bor, South Sudan, to conduct an operation to evacuate U.S. citizens and personnel.\" According to the notification, U.S. aircraft \"came under fire\" and withdrew from South Sudan without completing the evacuation.", "(146) Uganda/South Sudan/Democratic Republic of the Congo/Central African Republic. On March 25, 2014, the President notified Congress of a new deployment of U.S. aircraft and 150 U.S. aircrew and support personnel to Uganda, South Sudan, the Democratic Republic of the Congo, and the Central African Republic \"to support regional forces from the African Union's Regional Task Force that are working to apprehend or remove Lord's Resistance Army leader Joseph Kony and other senior leaders from the battlefield and to protect local populations.\"", "(147) Chad. On May 21, 2014, the President notified Congress that \"[a]pproximately 80 U.S. Armed Forces personnel have deployed to Chad as part of the U.S. efforts to locate and support the safe return of over 200 schoolgirls who are reported to have been kidnapped in Nigeria\" in support of the \"operation of intelligence, surveillance, and reconnaissance aircraft for missions over northern Nigeria and the surrounding area.\"", "(148) Six-Month Periodic Report. On June 12, 2014, President Obama reported to Congress concerning ongoing military deployments for U.S. counterterrorism operations, military operations related to the Lord's Resistance Army, military operations in Egypt, military operations in Jordan, U.S./NATO Operations in Kosovo, and regional security operations in Libya and Yemen.", "(149) Iraq. On June 16, 2014, the President notified Congress of the deployment of up to 275 U.S. Armed Forces personnel to Iraq to provide support and security for U.S. personnel and the U.S. Embassy in Baghdad. ", "(150) Iraq. On June 26, 2014, the President notified Congress of the deployment of up to approximately 300 additional U.S. Armed Forces personnel in Iraq to \"assess how we can best train, advise, and support Iraqi security forces and to establish joint operations centers with Iraqi security forces to share intelligence and coordinate planning to confront the threat posed by ISIL,\" and for presidential orders to \"increase intelligence, surveillance, and reconnaissance that is focused on the threat posed by the Islamic State of Iraq and the Levant (ISIL).\"", "(151) Iraq. On June 30, 2014, the President notified Congress of the deployment of up to approximately 200 additional U.S. Armed Forces personnel to Iraq to \"reinforce security at the U.S. Embassy, its support facilities, and the Baghdad International Airport.\" ", "(152) Iraq. On August 8, 2014, the President notified Congress of airstrikes against Islamic State (IS) forces to protect U.S. personnel in Erbil and to assist a humanitarian mission to protect Iraqi civilians trapped on Mount Sinjar in northern Iraq.", "(153) Iraq. On August 17, 2014, the President notified Congress of airstrikes against IS forces to assist Iraqi security forces in retaking Mosul Dam in northern Iraq.", "(154) Iraq. On September 1, 2014, the President notified Congress of airstrikes near Amirli in northern Iraq targeting IS forces besieging the town and as part of a mission to provide humanitarian assistance. ", "(155) Iraq. On September 5, 2014, the President notified Congress of the deployment of 350 additional combat-equipped troops to provide security for diplomatic facilities and personnel in Baghdad.", "(156) Iraq. On September 8, 2014, President Obama notified Congress of airstrikes \"in the vicinity of the Haditha Dam in support of Iraqi forces in their efforts to retain control of and defend this critical infrastructure site from ISIL,\" stating that \"[t]hese additional military operations will be limited in their scope and duration as necessary to address this threat and prevent endangerment of U.S. personnel and facilities and large numbers of Iraqi civilians.\"", "(157) Central African Republic. President Obama notified Congress on September 11, 2014, of the deployment of \"approximately 20 U.S. Armed Forces personnel\" to the Central African Republic \"to support the resumption of the activities of the U.S. Embassy in Bangui.\"", "(158) Syria/Khorasan Group. On September 23, 2014, the President notified Congress that he directed U.S. Armed Forces to begin \"a series of strikes in Syria against elements of al-Qa'ida known as the Khorasan Group.\"", "(159) Iraq/Syria/Islamic State. On September 23, 2014, President Obama notified Congress that he had \"ordered implementation of a new comprehensive and sustained counterterrorism strategy to degrade, and ultimately defeat, ISIL,\" The notification states that the President deployed \"475 additional U.S. Armed Forces personnel to Iraq,\" and \"that it is necessary and appropriate to use the U.S. Armed Forces to conduct coordination with Iraqi forces and to provide training, communications support, intelligence support, and other support, to select elements of the Iraqi security forces, including Kurdish Peshmerga forces.\" The President also notified Congress that he had ordered U.S. forces \"to conduct a systematic campaign of airstrikes and other necessary actions against these terrorists in Iraq and Syria,\" \"in coordination with and at the request of the Government of Iraq and in conjunction with coalition partners.\" The President stated that the duration of the deployments and operations is not known.", "(160) Six-Month Periodic Report. On December 11, 2014, President Obama reported to Congress concerning ongoing military deployments for U.S. counterterrorism operations, including the military campaign against the Islamic State in Iraq and Syria, military operations related to the Lord's Resistance Army, military operations in Egypt, military operations in Jordan, U.S./NATO Operations in Kosovo, and regional security operations in the Central African Republic, Libya, Tunisia, and Yemen.", "(161) Six-Month Periodic Report. On June 11, 2015, President Obama reported to Congress concerning ongoing military deployments for U.S. counterterrorism operations, including the military campaign against the Islamic State in Iraq and Syria, military operations related to the Lord's Resistance Army, military operations in Egypt, military operations in Jordan, and U.S./NATO Operations in Kosovo.", "(162) Cameroon. On October 14, 2015, President Obama notified Congress that he had deployed approximately 90 U.S. Armed Forces personnel to Cameroon to \"conduct airborne intelligence, surveillance, and reconnaissance operations in the region.\"", "(163) Six-Month Periodic Report. On December 11, 2015, President Obama reported to Congress concerning ongoing military deployments for U.S. counterterrorism operations, including the military campaign against the Islamic State in Iraq and Syria (of note were deployments of combat aircraft and personnel to Turkey and airstrikes in Libya), as well as new counterterrorism deployments to Cameroon, military operations related to the Lord's Resistance Army, military operations in Egypt, military operations in Jordan, and U.S./NATO Operations in Kosovo.", "(164) Six-Month Periodic Report. On June 13, 2016, President Obama reported to Congress concerning ongoing military deployments for U.S. counterterrorism operations, including the military campaign against the Islamic State in Iraq and Syria, military operations related to the Lord's Resistance Army, military operations in Egypt, military operations in Jordan, and U.S./NATO Operations in Kosovo.", "(165) South Sudan. On July 13, 2016, President Obama notified Congress that he had ordered deployment of approximately 47 U.S. Armed Forces personnel to South Sudan to support the security of U.S. personnel and the U.S. embassy in Juba.", "(166) Uganda. On July 15, 2016, President Obama notified Congress of the deployment of approximately 200 U.S. Armed Forces personnel in Uganda, for the purpose of supporting the security of U.S. citizens and property in South Sudan.", "(167) Yemen. On October 14, 2016, President Obama reported to Congress that he had ordered U.S. armed force to conduct missile strikes in Houthi-controlled territory in Yemen, targeting radar facilities in response to anti-ship cruise missile launches conducted by Houthi insurgents against U.S. Navy warships in the Red Sea.", "(168) Six-Month Periodic Report. On December 5, 2016, President Obama reported to Congress concerning ongoing military deployments for U.S. counterterrorism operations, including the military campaign against the Islamic State in Iraq and Syria, military operations related to the Lord's Resistance Army, military operations in the Red Sea (previously reported missile strikes against Houthi insurgents in Yemen), military operations in Egypt, military operations related to the security of U.S. citizens and property in South Sudan, and U.S./NATO Operations in Kosovo.", "Appendix B. Instances Not Formally Reported to the Congress Under the War Powers Resolution", "In some instances where U.S. Armed Forces have been deployed in potentially hostile situations abroad, Presidents did not submit reports to Congress under the War Powers Resolution and the question of whether a report was required could be raised. Representative examples of these instances from 1973 to 1998 include", "evacuation of civilians from Cyprus in 1974 evacuation of civilians from Lebanon in 1976 Korean DMZ tree-cutting incident of 1976 transport of European troops to Zaire in 1978 dispatch of additional military advisers to El Salvador in 1981 shooting down of two Libyan jets over the Gulf of Sidra on August 19, 1981, after one had fired a heat-seeking missile the use of training forces in Honduras after 1983 dispatch of AWACS to Egypt after a Libyan plane bombed a city in Sudan March 18, 1983 shooting down of two Iranian fighter planes over Persian Gulf on June 5, 1984, by Saudi Arabian jet fighter planes aided by intelligence from a U.S. AWACS interception by U.S. Navy pilots on October 10, 1985, of an Egyptian airliner carrying hijackers of the Italian cruise ship Achille Lauro use of U.S. Army personnel and aircraft in Bolivia for anti-drug assistance on July 14, 1986 buildup of fleet in Persian Gulf area in 1987 force augmentations in Panama in 1988 and 1989 shooting down 2 Libyan jet fighters over the Mediterranean Sea on January 4, 1989 dispatch of military advisers and Special Forces teams to Colombia, Bolivia, and Peru, in the Andean initiative, announced September 5, 1989, to help those nations combat illicit drug traffickers transport of Belgian troops and equipment into Zaire September 25-27, 1991 evacuation of nonessential U.S. government workers and families from Sierra Leone, May 3, 1992 a bombing campaign against Iraq, termed Operation Desert Fox, aimed at destroying Iraqi industrial facilities deemed capable of producing weapons of mass destruction, as well as other Iraqi military and security targets, December 16-23, 1998.", "Appendix C. Text of the War Powers Resolution", "War Powers Resolution", "P.L. 93-148 (H.J.Res 542), 87 Stat. 555, passed over President's veto November 7, 1973", "JOINT RESOLUTION Concerning the war powers of Congress and the President.", "Resolved by the Senate and House of Representatives of the United States of America in Congress assembled,", "SHORT TITLE", "Section 1. This joint resolution may be cited as the \"War Powers Resolution.\"", "PURPOSE AND POLICY", "Section 2. (a) It is the purpose of this joint resolution to fulfill the intent of the framers of the Constitution of the United States and insure that the collective judgment of both the Congress and the President will apply to the introduction of United States Armed Forces into hostilities, or into situations where imminent involvement in hostilities is clearly indicated by the circumstances, and to the continued use of such forces in hostilities or in such situations.", "(b) Under article I, section 8, of the Constitution, it is specifically provided that the Congress shall have the power to make all laws necessary and proper for carrying into execution, not only its own powers but also all other powers vested by the Constitution in the Government of the United States, or in any department or officer thereof.", "(c) The constitutional powers of the President as Commander in Chief to introduce United States Armed Forces into hostilities, or into situations where imminent involvement in hostilities is clearly indicated by the circumstances, are exercised only pursuant to (1) a declaration of war, (2)\u00a0specific statutory authorization, or (3) a national emergency created by attack upon the United States, its territories or possessions, or its armed forces.", "CONSULTATION", "Section 3. The President in every possible instance shall consult with Congress before introducing United States Armed Forces into hostilities or into situations where imminent involvement in hostilities is clearly indicated by the circumstances, and after every such introduction shall consult regularly with the Congress until United States Armed Forces are no longer engaged in hostilities or have been removed from such situations.", "REPORTING", "Section 4. (a) In the absence of a declaration of war, in any case in which United States Armed Forces are introduced\u2014", "(1) into hostilities or into situations where imminent involvement in hostilities is clearly indicated by the circumstances;", "(2) into the territory, airspace, or waters of a foreign nation, while equipped for combat, except for deployments which relate solely to supply, replacement, repair, or training of such forces; or", "(3) in numbers which substantially enlarge United States Armed Forces equipped for combat already located in a foreign nation;", "the President shall submit within 48 hours to the Speaker of the House of Representatives and to the President pro tempore of the Senate a report, in writing, setting forth\u2014", "(A) the circumstances necessitating the introduction of United States Armed Forces;", "(B) the constitutional and legislative authority under which such introduction took place; and", "(C) the estimated scope and duration of the hostilities or involvement.", "(b) The President shall provide such other information as the Congress may request in the fulfillment of its constitutional responsibilities with respect to committing the Nation to war and to the use of United States Armed Forces abroad.", "(c) Whenever United States Armed Forces are introduced into hostilities or into any situation described in subsection (a) of this section, the President shall, so long as such armed forces continue to be engaged in such hostilities or situation, report to the Congress periodically on the status of such hostilities or situation as well as on the scope and duration of such hostilities or situation, but in no event shall he report to the Congress less often than once every six months.", "CONGRESSIONAL ACTION", "Section 5. (a) Each report submitted pursuant to section 4(a)(1) shall be transmitted to the Speaker of the House of Representatives and to the President pro tempore of the Senate on the same calendar day. Each report so transmitted shall be referred to the Committee on Foreign Affairs of the House of Representatives and to the Committee on Foreign Relations of the Senate for appropriate action. If, when the report is transmitted, the Congress has adjourned sine die or has adjourned for any period in excess of three calendar days, the Speaker of the House of Representatives and the President pro tempore of the Senate, if they deem it advisable (or if petitioned by at least 30% of the membership of their respective Houses) shall jointly request the President to convene Congress in order that it may consider the report and take appropriate action pursuant to this section.", "(b) Within sixty calendar days after a report is submitted or is required to be submitted pursuant to section 4(a)(1), whichever is earlier, the President shall terminate any use of United States Armed Forces with respect to which such report was submitted (or required to be submitted), unless the Congress (1) has declared war or has enacted a specific authorization for such use of United States Armed Forces, (2) has extended by law such sixty-day period, or (3) is physically unable to meet as a result of an armed attack upon the United States. Such sixty-day period shall be extended for not more than an additional thirty days if the President determines and certifies to the Congress in writing that unavoidable military necessity respecting the safety of United States Armed Forces requires the continued use of such armed forces in the course of bringing about a prompt removal of such forces.", "(c) Notwithstanding subsection (b), at any time that United States Armed Forces are engaged in hostilities outside the territory of the United States, its possessions and territories without a declaration of war or specific statutory authorization, such forces shall be removed by the President if the Congress so directs by concurrent resolution.", "CONGRESSIONAL PRIORITY PROCEDURES FOR JOINT RESOLUTION OR BILL", "Section 6. (a) Any joint resolution or bill introduced pursuant to section 5(b) at least thirty calendar days before the expiration of the sixty-day period specified in such section, shall be referred to the Committee on Foreign Affairs of the House of Representatives or the Committee on Foreign Relations of the Senate, as the case may be, and such committee shall report one such joint resolution or bill, together with its recommendations, not later than twenty-four calendar days before the expiration of the sixty-day period specified in such section, unless such House shall otherwise determine by the yeas and nays.", "(b) Any joint resolution or bill so reported shall become the pending business of the House in question (in the case of the Senate the time for debate shall be equally divided between the proponents and the opponents), and shall be voted on within three calendar days thereafter, unless such House shall otherwise determine by yeas and nays.", "(c) Such a joint resolution or bill passed by one House shall be referred to the committee of the other House named in subsection (a) and shall be reported out not later than fourteen calendar days before the expiration of the sixty-day period specified in section 5(b). The joint resolution or bill so reported shall become the pending business of the House in question and shall be voted on within three calendar days after it has been reported, unless such House shall otherwise determine by yeas and nays.", "(d) In the case of any disagreement between the two Houses of Congress with respect to a joint resolution or bill passed by both Houses, conferees shall be promptly appointed and the committee of conference shall make and file a report with respect to such resolution or bill not later than four calendar days before the expiration of the sixty-day period specified in section 5(b). In the event the conferees are unable to agree within 48 hours, they shall report back to their respective House in disagreement. Notwithstanding any rule in either House concerning the printing of conference reports in the Record or concerning any delay in the consideration of such reports, such report shall be acted on by both Houses not later than the expiration of such sixty-day period.", "CONGRESSIONAL PRIORITY PROCEDURES FOR CONCURRENT RESOLUTION", "Section 7. (a) Any concurrent resolution introduced pursuant to section 5(c) shall be referred to the Committee on Foreign Affairs of the House of Representatives or the Committee on Foreign Relations of the Senate, as the case may be, and one such concurrent resolution shall be reported out by such committee together with its recommendations within fifteen calendar days, unless such House shall otherwise determine by the yeas and nays.", "(b) Any concurrent resolution so reported shall become the pending business of the House in question (in the case of the Senate the time for debate shall be equally divided between the proponents and the opponents) and shall be voted on within three calendar days thereafter, unless such House shall otherwise determine by yeas and nays.", "(c) Such a concurrent resolution passed by one House shall be referred to the committee of the other House named in subsection (a) and shall be reported out by such committee together with its recommendations within fifteen calendar days and shall thereupon become the pending business of such House and shall be voted upon within three calendar days, unless such House shall otherwise determine by yeas and nays.", "(d) In the case of any disagreement between the two Houses of Congress with respect to a concurrent resolution passed by both Houses, conferees shall be promptly appointed and the committee of conference shall make and file a report with respect to such concurrent resolution within six calendar days after the legislation is referred to the committee of conference. Notwithstanding any rule in either House concerning the printing of conference reports in the Record or concerning any delay in the consideration of such reports, such report shall be acted on by both Houses not later than six calendar days after the conference report is filed. In the event the conferees are unable to agree within 48 hours, they shall report back to their respective Houses in disagreement.", "INTERPRETATION OF JOINT RESOLUTION", "Section 8. (a) Authority to introduce United States Armed Forces into hostilities or into situations wherein involvement in hostilities is clearly indicated by the circumstances shall not be inferred\u2014", "(1) from any provision of law (whether or not in effect before the date of the enactment of this joint resolution), including any provision contained in any appropriation Act, unless such provision specifically authorizes the introduction of United States Armed Forces into hostilities or into such situations and states that it is intended to constitute specific statutory authorization within the meaning of this joint resolution; or", "(2) from any treaty heretofore or hereafter ratified unless such treaty is implemented by legislation specifically authorizing the introduction of United States Armed Forces into hostilities or into such situations and stating that it is intended to constitute specific statutory authorization within the meaning of this joint resolution.", "(b) Nothing in this joint resolution shall be construed to require any further specific statutory authorization to permit members of United States Armed Forces to participate jointly with members of the armed forces of one or more foreign countries in the headquarters operations of high-level military commands which were established prior to the date of enactment of this joint resolution and pursuant to the United Nations Charter or any treaty ratified by the United States prior to such date.", "(c) For purposes of this joint resolution, the term \"introduction of United States Armed Forces\" includes the assignment of members of such armed forces to command, coordinate, participate in the movement of, or accompany the regular or irregular military forces of any foreign country or government when such military forces are engaged, or there exists an imminent threat that such forces will become engaged, in hostilities.", "(d) Nothing in this joint resolution\u2014", "(1) is intended to alter the constitutional authority of the Congress or of the President, or the provisions of existing treaties; or", "(2) shall be construed as granting any authority to the President with respect to the introduction of United States Armed Forces into hostilities or into situations wherein involvement in hostilities is clearly indicated by the circumstances which authority he would not have had in the absence of this joint resolution.", "SEPARABILITY CLAUSE", "Section 9. If any provision of this joint resolution or the application thereof to any person or circumstances is held invalid, the remainder of the joint resolution and the application of such provision to any other person or circumstance shall not be affected thereby.", "EFFECTIVE DATE", "Section 10. This joint resolution shall take effect on the date of its enactment."], "subsections": []}]}]}}
{"id": "RL30920", "title": "Social Security: Major Decisions in the House and Senate Since 1935", "released_date": "2019-03-28T00:00:00", "summary": ["The Social Security program, enacted in 1935, has been amended numerous times. Lists and summaries of individual major Social Security amendments may illuminate the tone and context of the debate of the program in the House and Senate. Major statutory decisions made by Congress on the Social Security program, vote information, summaries of major legislative actions, and descriptions of floor amendments and congressional debate may be informative to current discussions of the Social Security program.", "During the 115th Congress, lawmakers enacted several pieces of Social Security legislation that included the following:", "P.L. 115-59, the Social Security Number Fraud Prevention Act of 2017, which restricted federal agencies from including any individual's Social Security number (SSN) on documents sent by mail; P.L. 115-165, the Strengthening Protections for Social Security Beneficiaries Act of 2018, which made a variety of changes to the Social Security Administration's (SSA's) representative payee program; P.L. 115-243, the Tribal Social Security Fairness Act of 2018, which allowed federally recognized Indian tribes to enter into voluntary agreements with SSA to extend Social Security coverage to tribal council members; and P.L. 115-174, the Economic Growth, Regulatory Relief and Consumer Protection Act, which required SSA to accept electronic signatures of individuals who consent to allow a financial institution to verify their name, SSN, and date of birth with the information contained in SSA's records."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Social Security Act of 1935 established a federal old-age pension financed with employee-employer payroll taxes. Since then, Congress has amended the Social Security program for multiple purposes, including to expand coverage, change the minimum age for retirement benefits, provide an automatic cost-of-living adjustment to benefits, and address concerns about solvency of the Social Security Trust Funds.", "This report traces the major decisions affecting the Social Security program, from the earliest enacting legislation through the most recent congressional session. It provides a summary of the provisions and voting records for each bill, focusing on amendments to Old-Age, Survivors and Disability Insurance (OASDI). (OASDI is the formal name for Social Security.)", "For an overview of the Social Security program, see CRS Report R42035, Social Security Primer .", " Table 1 lists major Social Security legislation from 1935 to 2018."], "subsections": []}, {"section_title": "Chamber Votes", "paragraphs": [], "subsections": [{"section_title": "P.L. 271\u201474th Congress, Enactment of the Social Security Act", "paragraphs": ["The Social Security Act became law on August 14, 1935, when President Franklin Roosevelt signed H.R.\u00a07260. Title II of the act created a compulsory national old-age benefits program, covering nearly all workers in commerce and industry and providing monthly pensions for insured workers aged 65 or older. A benefit weighted toward lower-paid workers was to be based on cumulative wages and was to be payable beginning in 1942 to persons aged 65 or older who had paid Social Security taxes for at least five years. The benefit was to be withheld from otherwise qualified persons in any month in which they did any work. Under Title VIII of the act, a payroll tax of 1%, each, on employees and employers, payable on earnings up to $3,000 each year, was to be imposed on covered jobs as of January 1, 1937, and was scheduled to rise in steps to 3% each by 1949.", "Besides old-age benefits, the act provided for a system of federal-state unemployment compensation funded with employer payroll taxes, and for grants to states to help fund assistance payments to certain categories of needy persons (i.e., the aged, the blind, and children under 16 who had been deprived of parental support), child welfare services, and maternal and child health services.", "When the act was debated in Congress, prominent Republicans in the House and Senate made attempts to delete the provisions creating the old-age pension system. They said they preferred to rely solely on the assistance (i.e., charity/welfare) approach to help the aged. They argued that the payroll tax/insurance mechanism of the old-age benefits provisions might be unconstitutional and that it would impose a heavy tax burden on businesses that would retard economic development. Members of the minority stated, in the Ways and Means Committee's report to the House, that the old-age benefits program (Title II) and the method by which the money was to be raised to pay for the program (Title VIII) established a \"bureaucracy in the field of insurance in competition with private business.\" They contended further that the program would \"destroy old-age retirement systems set up by private industries, which in most instances provide more liberal benefits than are contemplated under Title II.\" Although some party members tried to remove the old-age benefits provisions, the majority of Republicans in both chambers nevertheless did vote for the final Social Security bill. During congressional debate, Democrats generally supported the proposed old-age benefits program, and the vast majority of Democrats voted for the final bill."], "subsections": [{"section_title": "House Action", "paragraphs": ["Debate on the Social Security bill started in the House on April 11 and lasted until April 19, 1935. Approximately 50 amendments were offered, but none passed. According to Edwin Witte, a key player in the development of the Social Security Act, House leaders passed the word that they wanted all amendments defeated.", "Four particularly significant votes were Representative Monaghan's amendment proposing a revised \"Townsend plan\" and Representative Connery's amendment proposing the Lundeen plan, both of which (described below) called for a more generous social insurance system; Representative Treadway's motion to recommit H.R. 7260 to delete the old-age benefits program and its related taxes; and the vote on final passage of the bill.", "On April 18, 1935, Representative Monaghan (D-MT) offered an amendment, introduced in its original form by Representative Groarty (D-CA) and referred to as the Townsend plan, which required the federal government to pay a $200-a-month pension to everyone 60 years of age or older, to be financed by a 2% tax on \"all financial\" transactions (essentially a sales tax). (For more details on the Townsend plan, see discussion of the 1939 amendments below.) Representative Monaghan's amendment, although less costly than the original Townsend plan, was rejected by a vote of 56 to 206.", "On April 18, 1935, Representative Connery (D-MA) offered an amendment that contained the provisions of a bill sponsored by Representative Lundeen (Farmer-Laborite-MN). The Lundeen bill, which was approved 7-6 by the House Labor Committee, called for the \"establishment of a system of social insurance to compensate all workers and farmers, 18 years of age or older, in all industries, occupations, and professions, who are unemployed through no fault of their own.... \" Representative Lundeen's plan offered higher benefits than the bill reported out of the Committee on Ways and Means, and it tied benefits to the cost of living. Under the Lundeen proposal, a more generous social insurance program was to be extended to all workers and farmers unable to work because of illness, old age, maternity, industrial injury, or any other disability. This system was to be financed by taxes falling most heavily on persons with higher incomes (by levying additional taxation on inheritances, gifts, and individual and corporation incomes of $5,000 or more per year). There was a division vote of 52 in favor and 204 opposed. Representative Connery asked for tellers. The Connery amendment was rejected by a 40-158 teller vote.", "On April 18, 1935, Representative Treadway (R-MA), the ranking minority Member of the Ways and Means Committee, offered an amendment to strike Title II, the old-age benefit provisions, from the bill. Representative Treadway was opposed to the old-age benefits provision and to the taxing provisions of Title VIII. He said that the financing arrangement was unconstitutional. He indicated that the tax would be particularly burdensome on industry, running up to 6% on payrolls. He said that \"business and industry are already operating under very heavy burdens\" and maintained that to add a payroll tax to their burden would probably cause more unemployment and more uncertainty. Representative Jenkins (R-OH), supporter of the Treadway amendment, stated that making each worker pay 3% of his money for old-age benefits, whether he wanted to or not, and requiring employers to do the same, was clearly unconstitutional. He said, \"Why talk about wanting to relieve the Depression, why talk about charity, why talk about all these other things when you are placing a financial lash upon the backs of the people whose backs are breaking under a load of debts and taxes?\" He described the old-age benefits system as \"compulsion of the rankest kind.\" The Treadway amendment was defeated by a 49-125 teller vote.", "On April 19, 1935, Representative Treadway made a motion to recommit H.R. 7260, including instructions to the Ways and Means Committee to strike out the old-age and unemployment insurance provisions and to increase the federal contribution for the welfare program of old-age assistance, Title I of the bill. Representative Treadway stated that the old-age benefit and unemployment insurance provisions of the bill were not emergency measures and that they \"would not become effective in time to help present economic conditions, but, on the contrary would be a definite drag on recovery.\" He was opposed to levying a tax against both the employer and the employee. During his remarks on April 12, 1935, he stated that he would \"vote most strenuously in opposition to the bill at each and every opportunity.\" During his April 19, 1935, remarks, Representative Treadway said he was disgusted \"at the attitude of business in that it has not shown the proper interest in protecting itself by stating its case before Congress.\" His motion to recommit was rejected by a vote of 149 (95-R, 45-D, 9-I) to 253 (1-R, 252-D).", "On April 19, 1935, the House passed the Social Security bill by a vote of 372 (77-R, 288-D, 7-I) to 33 (18-R, 13-D, 2-I)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["There were also four major votes in the Senate: Senator Long's (D-LA) proposal to substitute taxes on wealth and property for the payroll tax; Senator Clark's amendment to exempt from coverage employees in firms with private pensions; Senator Hastings's motion to recommit; and the vote on final passage of the bill.", "On June 17, 1935, Senator Long offered an amendment to liberalize the proposed old-age assistance program (Title I of the bill) and delete the payroll tax provisions (Title VIII and IX). In place of the payroll tax, Senator Long recommended that states levy a tax on wealth or property. Senator Long's amendment was rejected by voice vote.", "On June 19, 1935, Senator Clark (D-MO) offered an amendment to exempt from coverage under the old-age benefits system employees in firms with private old-age pension systems. This idea came from an official of a Philadelphia insurance brokerage firm that specialized in group annuity contracts. Proponents of the amendment stated that employees would benefit from more liberal private annuities that would be in true proportion to earnings and service; joint annuities to protect spouses; earlier retirement for disability; and other factors. Supporters of the amendment also maintained that the government would benefit because the reserves of private annuity plans would increase investment and create more income to tax. The Administration (being opposed to the amendment) argued that the amendment did not provide true retirement income guarantees because private pension programs could be cancelled, or the firm sponsoring them could go out of business. Critics maintained that the amendment discouraged the employment of older men. The Ways and Means Committee rejected the proposal and so did the Finance Committee (by a narrow margin), but when Senator Clark offered it as an amendment on the Senate floor, it was passed by a vote of 51 (16-R, 35-D) to 35 (3-R, 30-D, 2-I).", "On June 19, 1935, Senator Hastings (R-DE) made a motion to strike out the old-age benefits provisions from the bill. Senator Hastings stated that those provisions were an effort to write into law a forced annuity system for a certain group of people. He maintained that the reserve account to take care of people in the future was not a contract and the American public could not depend upon it. He stated that the accumulation of huge sums of money for persons who had not yet reached retirement age would be subjected to many demands and most likely could not be preserved intact. He also said \"let us not deceive that youth by making him believe that here is an annuity whereby he is contributing 50% and his employer is contributing 50%, and that it goes to his credit, when as a matter of fact, part of it is taken from him in order that we may take care of the older people of today.\" Senator Hastings's amendment was rejected by a vote of 15 (12-R, 3-D) to 63 (7-R, 54-D, 2-I).", "On June 19, 1935, Senator George (D-GA) offered an amendment to encourage formation of industrial pensions as a substitute for Titles II and VIII. Under the amendment, employers were to operate and manage their own plans. The amendment called for a uniform schedule of benefits nationwide and provided for disability and survivor benefits along with old-age and unemployment benefits. The amendment was defeated by voice vote.", "The Senate passed the bill on June 19, 1935, by a vote of 77 (15-R, 60-D, 2-I) to 6 (5-R, 1-D)."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["The conferees settled all differences except on the Clark amendments related to employees under private pension plans. The conference committee reported the bill without the Clark amendments, but with an understanding that the chairmen of the Ways and Means and Finance Committees would appoint a special joint committee to study whether to exempt industrial employers with private pension plans from coverage under Social Security and to report to the next Congress.", "On July 17, 1935, the House rejected Representative Treadway's motion to accept the Clark amendment by a vote of 78 to 268; then agreed by a vote of 269 to 65 to a motion by Representative Doughton (D-NC) that the House insist that the Senate drop the Clark amendment.", "On July 17, 1935, the Senate agreed, by voice vote, to Senator Harrison's motion to insist on keeping the Clark amendment and ask for a further conference.", "On August 8, 1935, the conference report cleared the House by a voice vote.", "On August 9, 1935, the Senate conferees agreed to delete the Clark amendment; the Senate then agreed to the conference report by a voice vote."], "subsections": []}]}, {"section_title": "P.L. 379\u201476th Congress, Social Security Amendments of 1939", "paragraphs": ["H.R. 6635, the Social Security Amendments of 1939, was signed into law on August 10, 1939, by President Franklin Roosevelt. Congress expressly provided in the 1935 Act that the Social Security Board (a three-member panel appointed by the President with advice and consent of the Senate) study and make recommendations on the most effective methods of providing economic security through social insurance. An advisory council appointed by the Senate Special Committee on Social Security and the Social Security Board was created in May 1937 to work with the Social Security Board to study amending Titles II and VII of the Social Security Act. Some members of the advisory council represented employees, some represented employers, and others represented the general public. Both the Social Security Board and the advisory council made recommendations on how the old-age benefits program should be changed, and many of their recommendations were the same. President Roosevelt sent the Social Security Board's recommendations to Congress on January 16, 1939. The 1939 amendments incorporated most of the board's recommendations.", "The 1939 amendments extended benefits to dependents and survivors of workers covered by Social Security. Dependents included an aged wife, a child under 16 (under 18 if attending school), a widowed mother caring for an eligible child, an aged widow, and a dependent aged parent if there were no eligible widow or child. Widows would receive 75% of the primary insurance amount (PIA) of the worker, and all other dependents would receive 50% of the PIA.", "The starting date for monthly benefits was accelerated to January 1, 1940, instead of January 1, 1942. Benefits were based on average monthly wages rather than on cumulative wages. In addition, Congress repealed the tax rate increase to 1.5%, scheduled to go into effect in 1940, replacing it with an increase to 2% in 1943-1945. The amendments also modified qualifying provisions, including the definition of insured status, for consistency with other changes in the act. Further, people receiving OASI benefits were permitted to earn up to $14.99 monthly: no benefits were to be paid in any month in which the recipient earned $15 or more in covered employment. The system now was called Old-Age and Survivors Insurance (OASI). Congress also changed the old-age reserve account to a trust fund, managed by a board of trustees."], "subsections": [{"section_title": "House Action", "paragraphs": ["On June 2, 1939, following public hearings on the proposed amendments and six weeks of executive sessions, the Committee on Ways and Means reported to the House H.R. 6635, embodying its recommendations for amendments to the Social Security Act. The day before, the House had debated on and voted against the Townsend old-age pension bill. The Townsend plan, embodied in H.R. 6466 introduced by Representative McGroarty (D-CA) in January 1935, was offered as a substitute for H.R. 6635. The Townsend plan would have provided a monthly pension of $200 to every citizen aged 60 or older who had not been convicted of a felony. To receive the pension, a person could not earn wages and was required to spend the entire pension within 30 days. The plan would have been financed by a 2% tax on every commercial and financial transaction; the President would have been given discretionary power to raise the tax to 3% or to lower it to 1%. During a 1935 Ways and Means Committee hearing, Representative Townsend stated that his plan was only incidentally a pension plan. He said the principal objectives of the proposal were to solve the unemployment problem and to restore prosperity by giving people purchasing power. He cited Census Bureau data that 4 million people over the age of 60 held jobs in 1930. He reiterated that to be eligible for the proposed pension of $200 a month, those elderly people would have to give up their jobs, which he said meant that 4 million jobs would become available to middle-aged and younger people. In addition, he said that requiring 8 million elderly persons to buy $200 worth of goods and services each month would increase demand and result in more jobs.", "Representative Sabath (D-IL) said he thought it was \"decidedly out of place to bring the Townsend bill to the floor.\" He said that the bill \"had no chance of passing in the first place; neither was it feasible nor possible of operation.\" Others branded the bill as \"crackpot,\" and in general objected because they thought that the Social Security program was a better means of caring for the aged, asserting that any liberalization of pensions should be done within the framework of the Social Security Act.", "Edwin Witte wrote,", "The members of the House of Representatives at all times took the Townsend movement much more seriously than did the senators. The thousands of letters that the members received in support of this plan worried them greatly. With the exception of probably not more than a half dozen members, all felt that the Townsend plan was utterly impossible; at the same time they hesitated to vote against it.", "The House rejected H.R. 6466, the Townsend plan bill, on June 1, 1939, by a vote of 97 (55-R, 40-D, 2-I) to 302 (107-R, 194-D, 1-I).", "A New York Times editorial reported that \"the psychological effect of the presentation of the Townsend bill was to make these liberalized benefits, referring to the provisions in H.R. 6635, seem small. Most of those who voted against the Townsend plan will be eager to vote for these liberalized benefits to show that their hearts are in the right place. The result is that the real cost of the new Social Security scale of benefits is not likely to receive very serious attention.\"", "The House took up H.R. 6635 on June 6, 1939. The bill had the general support of the Ways and Means Committee. The minority stated in the committee's report to the House that \"while the bill in no sense represents a complete or satisfactory solution of the problem of Social Security, it at least makes certain improvements in the present law (some of which we have ourselves heretofore suggested) which we believe justify us in supporting it despite its defects.\"", "On June 9, 1939, Representative Havenner (D-CA) offered an amendment, endorsed by the American Federation of Labor, to extend Social Security coverage to workers employed in college clubs or fraternities or sororities; employees in nonprofit religious, charitable, or educational institutions; student nurses; and some agricultural workers. The amendment was rejected by voice vote.", "On June 9, 1939, Representative Kean (R-NJ) offered an amendment that required that the money derived from the Social Security payroll tax be invested in one-year marketable U.S. government bonds rather than in special nonmarketable Treasury obligations. Representative Kean remarked that the adoption of the amendment would \"prevent the present practice of using old-age taxes for current expenses.\" The amendment was rejected by voice vote.", "On June 9, 1939, Representative Carlson (R-KS) offered an amendment to exclude non-citizens from coverage under Social Security. He was opposed to putting foreigners under the U.S. old-age insurance provisions. Opponents of the amendment argued that exemption of such people would give employers of aliens a competitive advantage over vessels owned and manned by Americans. Representative Carlson's amendment was rejected 24 to 59 by a division vote.", "On June 10, 1939, Representative Carlson moved to recommit H.R. 6635 to the Committee on Ways and Means. The motion was rejected by voice vote.", "On June 10, 1939, the House passed H.R. 6635 by a vote of 364 (142-R, 222-D) to 2 (2-R)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On July 13, 1939, Senator Downey (D-CA), in the course of his statement on how \"unworkable, unjust, and unfair\" the Social Security Act was, moved that the bill be recommitted to the Finance Committee for more study of the whole pension and savings field. Senator Downey stated that under H.R. 6635 covered workers in 1942 would receive only one-half as much in old-age benefits as those receiving government subsidies (old-age assistance benefits/cash relief). Under H.R. 6635, the average monthly Social Security benefit was projected at between $19 and $20 for 80% of workers in 1942, whereas the maximum old-age assistance benefit was $40. The motion was rejected by a vote of 18 (12-R, 5-D, 1-I) to 47 (4-R, 41-D, 2-I).", "On July 13, 1939, Senator Reynolds (D-NC) offered an amendment to prohibit non-U.S. citizens from being eligible for Social Security coverage or benefits. Senator Harrison (D-MS) offered additional language to Senator Reynolds's amendment that allowed benefit payments to aliens if they lived within 50 miles of the United States. The amendment as modified was agreed to by voice vote.", "The Senate passed H.R. 6635 on July 13, 1939, by a vote of 57 (8-R, 45-D, 4-I) to 8 (6-R, 2-D)."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["The conference report was approved by the House on August 4, 1939, by voice vote, and by the Senate on August 5, 1939, by a vote of 59 (14-R, 42-D, 3-I) to 4 (4-D)."], "subsections": []}]}, {"section_title": "Payroll Tax Freeze, 1942-1947", "paragraphs": ["Between 1942 and 1947, the Social Security payroll tax rate increase was postponed seven times. It was not until 1950 that the 1% Social Security tax rate was allowed to rise to 1.5%.", "The Revenue Act of 1942, P.L. 753 (H.R. 7378, 77 th Congress) was signed by President Franklin Roosevelt on October 21, 1942. It provided that for calendar year 1943, the payroll tax rate for old-age and survivors benefits would be frozen at the existing rate of 1% for employees and employers, each, instead of being increased to 2% on each as otherwise would have been required.", "P.L. 211 (H.J.Res. 171, 78 th Congress), a joint resolution regarding the Tariff Act, signed by President Roosevelt on December 22, 1943, froze the payroll tax at the 1% rate until March 1, 1944. The purpose of the resolution was to give Congress time to consider the scheduled payroll tax increase before it went into effect.", "The Revenue Act of 1943, P.L. 235 (H.R. 3687, 78 th Congress), was vetoed by President Roosevelt on February 22, 1944; the veto was overridden by the House on February 24, 1944, and by the Senate on February 25, 1944. The bill deferred the scheduled payroll tax increase (from 1 to 2%) until 1945.", "P.L. 235 also contained an amendment by Senator Murray (D-MT) that authorized the use of general revenues if payroll taxes were insufficient to meet Social Security benefit obligations. Senator Murray stated that the amendment merely stated in law what had been implied in the Senate committee report. Senator Vandenberg (R-MI) replied that the amendment \"has no immediate application, it has no immediate menace, it contemplates and anticipates no immediate appropriation; but as the statement of a principle, I agree with the amendment completely.\" The amendment passed by voice vote. The \"Murray-Vandenberg\" general revenue provision was repealed in 1950, when the tax rate was increased.", "The Federal Insurance Contributions Act (FICA) of 1945, P.L. 495 (H.R. 5564, 78 th Congress), signed by President Roosevelt on December 16, 1944, froze the payroll tax rate at 1% until 1946 and scheduled the payroll tax rate to rise to 2.5% for the years 1946 through 1948, and to 3% thereafter.", "The Revenue Act of 1945, P.L. 214 (H.R. 4309, 79 th Congress), signed by President Truman on November 8, 1945, deferred the tax rate increase until 1947.", "The Social Security Amendments of 1946, P.L. 719 (H.R. 7037, 79 th Congress), signed by President Truman on August 10, 1946, deferred the tax rate increase until 1948.", "The Social Security Amendments of 1947, P.L. 379 (H.R. 3818, 80 th Congress), signed by President Truman on August 6, 1947, continued the freeze on the tax rate increase until 1950 and provided that it would rise to 1.5% for 1950-1951 and to 2% thereafter.", "Members who favored these payroll tax freezes argued that the Social Security reserves were adequate and that benefit payments in the immediate future could be met with the current payroll tax rate. In a 1942 letter to the Senate Finance Committee, President Roosevelt said that \"a failure to allow the scheduled increase in rates to take place under the present favorable circumstances would cause a real and justifiable fear that adequate funds will not be accumulated to meet the heavy obligations of the future and that the claims for benefits accruing under the present law may be jeopardized.\" He also stated that \"expanded Social Security, together with other fiscal measures, would set up a bulwark of economic security for the people now and after the war and at the same time would provide anti-inflationary sources for financing the war.\" Members who were opposed to the freeze argued that the scheduled payroll tax increase was important for the long-term soundness of the OASI trust fund and that postponing the tax increase would mean higher payroll tax rates in the future and perhaps government subsidies to meet obligations. Some proponents of the freeze maintained that the Administration wanted the tax increase to retire the public debt accumulated by wartime expenditures.", "Although Senator Vandenberg (R-MI) was the main spokesman for postponing the payroll tax increases, the legislative effort to defer tax increases was bipartisan. \"Without regard to party or ideology, elected representatives of the people were not willing to argue for increases in an earmarked tax if a current need for them could not be demonstrated,\" one scholar observed."], "subsections": []}, {"section_title": "P.L. 492\u201480th Congress, 1948 Provision for Exclusion of Certain Newspaper and Magazine Vendors from Social Security Coverage (H.R. 5052) and P.L. 642\u201480th Congress, 1948 Provision to Maintain Status Quo Concept of Employee", "paragraphs": ["Two pieces of 1948 legislation, H.R. 5052 and H.J.Res. 296, settled the argument of who was considered an employee for purposes of Social Security coverage. The term employee was not defined in the Social Security Act or in the Internal Revenue Code. However, in 1936, the Social Security Board and the Treasury Department issued regulations that to a certain extent explained the meaning of the terms employee and employer . In defining employer, both sets of regulations emphasized the concept of \"control\"\u2014the right to give instructions\u2014but other significant factors, such as the right to discharge, the furnishing of tools, and a place to work, were also mentioned in the regulations. During the next few years, the Social Security Board and the Treasury Department issued numerous rulings to clarify the boundaries of the employee-employer relationship and a number of court cases established generally applicable precedents. The common-law meaning of employee, however, was very unclear in cases of outside salesmen.", "On December 31, 1946, the U.S. District Court for the Northern District of California, in the case of Hearst Publications, Inc. v. The United States , ruled that newspaper vendors should be considered employees rather than independent contractors. H.R. 5052, introduced in 1948, proposed to treat newspaper and magazine vendors as independent contractors rather than employees and thereby to exclude them from Social Security coverage. In addition, in 1948, Congress addressed the broader issue of who was to be considered an employee by passing H.J.Res. 296, a resolution to maintain the status quo of treating newspaper vendors as independent contractors, by stating that Congress, not the courts or the Social Security Administration (SSA), should determine national policy regarding Social Security coverage. It was reported that H.J.Res. 296 was introduced primarily to prevent the release of new federal regulations defining the meaning of employee along the lines interpreted by the Supreme Court in three cases decided in June 1947. H.J.Res. 296 excluded from Social Security coverage (and unemployment insurance) any person who was not considered an employee under the common-law rules. In effect, H.J.Res. 296 said that independent contractors (e.g., door-to-door salesmen, insurance salesmen, and pieceworkers) were not to be considered employees. H.R. 5052 and H.J.Res. 296 were vetoed by President Truman. Congress overrode both vetoes.", "In his veto of H.R. 5052, President Truman asserted that the nation's security and welfare demanded that Social Security be expanded to cover the groups excluded from the program: \"Any step in the opposite direction can only serve to undermine the program and destroy the confidence of our people in the permanence of its protection against the hazards of old age, premature death, and unemployment.\" The action taken on H.R. 5052 illustrated the controversial issues involved in determining who should be covered under Social Security."], "subsections": [{"section_title": "House Action", "paragraphs": ["On March 4, 1948, Representative Gearhart (R-CA) asked unanimous consent for immediate consideration of H.R. 5052. He stated that \"until the rendition of the federal court decisions I have referred to were rendered the status of the newspaper and magazine vendors was considered by everyone, and as this Congress clearly intended, to be that of independent contractors since they bought their periodicals at a low price and sold them at a higher price, deriving their livelihood from the profit in the operation.\" Under the court decisions \"these vendors were arbitrarily declared to be employees and therefore subject to the payroll taxes though the money they receive is not wages, as generally understood, but profits derived from an independent business operation of their own.\" Under the court decisions, newspaper and magazine vendors were in essence employees of all of the newspaper and magazine companies with which they had an arrangement. H.R. 5052 excluded newspaper and magazine vendors from coverage under the Social Security Act. Representative Gearhart stated in his remarks that \"when newspaper vendors are covered into the Social Security system\u2014and I believe they will be by act of Congress before this session ends\u2014they will be brought in as the independent contractors which they are, as the self-employed.... \" The House passed H.R. 5052 on March 4, 1948, by unanimous consent.", "On February 27, 1948, H.J.Res. 296 was passed by a vote of 275 to 52."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On March 23, 1948, the Senate passed by unanimous consent H.R. 5052 in form identical to that passed by the House.", "On June 4, 1948, H.J.Res. 296 was passed, after public assistance amendments increasing federal assistance to states were added, by a vote of 74 to 6.", "Although there was no conference on H.J.Res. 296, the House concurred with the Senate amendments on June 4, 1948, by voice vote."], "subsections": []}, {"section_title": "Veto", "paragraphs": ["On April 6, 1948, in the veto message on H.R. 5052, President Truman stated that some vendors work under arrangements, \"which make them bona fide employees of the publishers, and, consequently, are entitled to the benefits of the Social Security Act.\" President Truman further stated that \"It is said that news vendors affected by this bill could more appropriately be covered by the Social Security laws as independent contractors when and if coverage is extended to the self-employed. Whether that is true or not, surely they should continue to receive the benefits to which they are now entitled until the broader coverage is provided. It would be most inequitable to extinguish their present rights pending a determination as to whether it is more appropriate for them to be covered on some other basis.\"", "On June 14, 1948, President Truman vetoed H.J.Res. 296, saying that \"If our Social Security program is to endure, it must be protected against these piecemeal attacks. Coverage must be permanently expanded and no employer or special group of employers should be permitted to reverse that trend by efforts to avoid the burden which millions of other employers have carried without serious inconvenience or complaint.\""], "subsections": []}, {"section_title": "Veto Override", "paragraphs": ["The House overrode President Truman's veto of H.R. 5052 and passed the bill on April 14, 1948, by a vote of 308 (207-R, 101-D) to 28 (2-R, 24-D, 2-I). On April 20, 1948, the Senate overrode the President's veto and passed H.R. 5052 by a vote of 77 (48-R, 29-D) to 7 (7-D).", "On June 14, 1948, President Truman's veto of H.J.Res. 296 was overridden in the House by a vote of 298 to 75 and in the Senate by a vote of 65 (37-R, 28-D) to 12 (2-R, 10-D)."], "subsections": []}]}, {"section_title": "P.L. 734\u201481st Congress, Social Security Act Amendments of 1950", "paragraphs": ["H.R. 6000, the Social Security Act Amendments of 1950, was signed by President Truman on August 28, 1950. H.R. 6000 broadened the Social Security Act to cover roughly 10 million additional persons, including regularly employed farm and domestic workers; self-employed people other than doctors, lawyers, engineers, and certain other professional groups; certain federal employees not covered by government pension plans; and workers in Puerto Rico and the Virgin Islands. On a voluntary group basis, coverage was offered to employees of state and local governments not under public employee retirement systems and to employees of nonprofit organizations. Dependent husbands, widowers, and, under certain circumstances children of insured women were also made eligible for benefits (before, such benefits were not generally available to children of female workers).", "In addition, Congress raised benefits by about 77%; raised the wage base from $3,000 to $3,600; raised employer and employee taxes gradually from 1.5% to an ultimate rate of 3.25% each in 1970 and years thereafter; set the OASI tax rate for the self-employed at 75% of the combined employer-employee rate; eased requirements for eligibility for benefits by making 1950 the starting date for most people in determining the quarters of coverage needed; permitted recipients to have higher earnings ($50 a month) without losing any OASI benefits (i.e., those aged 75 or older could now earn any amount without losing OASI benefits); and gave free wage credits of $160 for each month in which military service was performed between September 16, 1940, and July 24, 1947."], "subsections": [{"section_title": "House Action", "paragraphs": ["On August 22, 1949, the Committee on Ways and Means reported H.R. 6000. H.R. 6000 did not include President Truman's recommendations for health insurance or his request to lower the OASI eligibility age to 60 for women, but it did include disability protection for both Social Security and public assistance recipients. It also extended coverage to farm and domestic workers.", "All 10 Republicans on the committee (including 7 who voted to send H.R. 6000 to the floor) filed a minority report stating that OASI coverage and benefits should be limited so as to provide only a \"basic floor\" of economic protection. The minority report opposed the disability insurance provision, saying that aid to the disabled should be limited to charity aid provided under the proposed public assistance program for the permanently and totally disabled.", "The Committee on Rules at first refused to send H.R. 6000 to the floor, but, after much debate, a closed rule barring floor amendments was granted. A number of Members opposed the rule because they said it foreclosed their right to improve the bill through floor amendments.", "On October 4, 1949, Representative Sabath (D-IL) offered a resolution for four days of debate, with only the Committee on Ways and Means having the right to offer amendments, and with only a motion to recommit being in order. Those favoring the resolution stated that the Ways and Means Committee had devoted six months to considering the bill, had heard testimony from 250 witnesses and thus knew best how to improve the program. Those opposing the closed rule said the bill was very controversial and that the whole House should settle difficult questions of policy. They said the closed rule negated the importance of other House Members and usurped their rights.", "The House agreed to the resolution for a closed rule by a vote of 189 (12-R, 176-D, 1-I) to 135 (123-R, 12-D) on October 4, 1949.", "On October 5, 1949, Representative Mason (R-IL) moved to recommit H.R. 6000, and offered H.R. 6297 (a bill that carried out the minority view on H.R. 6000) as its substitute. H.R. 6297, introduced by Representative Kean (R-NJ) on October 3, 1949, held the wage base to $3,000; recommended greater coverage for domestic workers so that those who were less regularly employed would be included; exempted teachers, firemen, and policemen with their own pension systems from coverage; confined disability payments to the public assistance program; and recommended that Congress establish an independent Social Security system in Puerto Rico, the Virgin Islands, and other possessions rather than include them in the existing OASI program.", "The motion to recommit was defeated by a vote of 113 (112-R, 1-D) to 232 (29-R, 202-D, 1-I).", "Immediately following the rejection of the motion, H.R. 6000 was passed in the House by a vote of 333 (R-130, D-202, 1-I) to 14 (R-12, D-2)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["Since Congress adjourned shortly after the House action, the Senate did not consider H.R. 6000 until 1950. The Senate Finance Committee held extensive hearings and adopted many amendments to H.R. 6000. The committee stated that the chief purpose of the bill was to strengthen the OASI system so that OASI would be the primary method of offering \"basic security to retired persons and survivors,\" with public assistance (particularly old-age assistance) playing strictly a supplementary and secondary role. The Finance Committee version of the bill did not include the disability insurance provision passed by the House nor the provision providing federal grants to states for needy persons who were permanently and totally disabled, nor President Truman's health insurance proposal. The bill was reported to the Senate on May 17, 1950, and debate began on June 12, 1950.", "On June 14, 1950, following a Senate Republican Policy Committee meeting, Senator Millikin (R-CO) and Senator Taft (R-OH) indicated that Republicans would support H.R. 6000 but favored a study to determine whether the OASI and old-age assistance programs eventually should be united in a universal pay-as-you-go system. Under this proposal, all elderly persons in the United States would become eligible for subsistence-level pensions at the age of 65, with pension amounts the same for all (rather than varied to reflect earnings during the work career), and financed from current revenues rather than a trust fund.", "An amendment offered by Senator Myers (D-PA) to add a disability insurance program to OASI was rejected by a voice vote.", "On June 20, 1950, another amendment offered by Senator Myers to boost the OASI wage base from $3,000 to $4,200, closer to what President Truman had requested (instead of $3,600 specified in the George amendment\u2014see below), was rejected 36 (9-R, 27-D) to 45 (27-R, 18-D).", "On June 20, 1950, Senator Long (D-LA) introduced an amendment to provide federal grants to States for needy disabled persons. The amendment was rejected by a vote of 41 (4-R, 37-D) to 42 (33-R, 9-D).", "On June 20, 1950, Senator George's (D-GA) amendment to increase the basic wage base from $3,000 to $3,600 was agreed to by voice vote.", "On June 20, 1950, by a voice vote, the Senate adopted S.Res. 300, authorizing a study of a universal pay-as-you-go old-age pension system.", "The Senate passed H.R. 6000 on June 20 by a vote of 81 (35-R, 47-D) to 2 (2-R)."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["Conferees dropped the disability insurance proposal, but retained the public assistance program for the permanently and totally disabled (i.e., the so-called charity approach). The conference report was submitted to the House on August 1, 1950.", "On August 16, 1950, Representative Byrnes (R-WI) moved to recommit the conference report on H.R. 6000. He stated that his main reason for doing so was to prevent any attempt to remove from the bill a Senate floor amendment by Representative Knowland (R-CA) to reduce federal control over state-administered unemployment insurance. Representative Doughton (D-NC) moved the previous question on the motion to recommit. The motion on the previous question was passed by a vote of 188 (120-R, 68-D) to 186 (20-R, 165-D, 1-I). The motion to recommit the conference report was rejected.", "The conference report passed the House on August 16, 1950, 374 (140-R, 234-D) to 1 (1-R); and the Senate on August 17, 1950, by voice vote."], "subsections": []}]}, {"section_title": "P.L. 590\u201482nd Congress, Social Security Act Amendments of 1952", "paragraphs": ["H.R. 7800, the Social Security Amendments of 1952, was signed into law on July 18, 1952, by President Truman. The amendments increased OASI benefits for both present and future recipients (by an average of 15% for those on the rolls), permitted recipients to earn $75 a month (instead of $50) without losing OASI benefits, extended wage credits of $160 for each month in which active military or naval service was performed during the period from July 24, 1947, through December 1953, and provided for a disability \"freeze,\" which in principle preserved the Social Security benefits of qualified workers who became permanently and totally disabled before retirement by averaging the person's wages only over his or her working years. (See following conference action section for more details.)"], "subsections": [{"section_title": "House Action", "paragraphs": ["In the House, debate centered largely on a so-called disability freeze proposed by the Committee on Ways and Means. Under the provision, if a person became permanently and totally disabled, the period of disability was to be excluded in computing the number of quarters of coverage he or she needed to be eligible for benefits, and in computing the average earnings on which the benefits would be based. The provision, in effect, preserved benefit rights while a person was disabled. Medical examinations by doctors and public institutions would be designated and paid for by the Federal Security Agency (FSA). The American Medical Association (AMA) claimed that this arrangement would lead to socialized medicine. Representative Reed (R-NY), the minority leader of the Ways and Means Committee, was the primary spokesman for Members who endorsed the AMA position.", "On May 19, 1952, when H.R. 7800 was brought to the floor under suspension of the rules procedure\u2014requiring a two-thirds vote for passage and barring amendments\u2014the majority of Republicans voted against it because of the disability provision, and it was rejected by a vote of 151 (52-R, 98-D, 1-I) to 141 (99-R, 42-D), failing to win a two-thirds vote.", "On June 16, 1952, Democratic leaders brought H.R. 7800 to the floor under suspension of the rules. An amended version of the revised bill empowered the FSA to make disability determinations but omitted the language specifying how the FSA administrator should do so. Representative Reed said \"... let no person on this floor be deceived. You have the same old H.R. 7800 here before you. While the socialized medicine advocates pretend to remove the specific instructions to the Administrator, they now give him more powers under general provisions of the law than he had before. You have socialized medicine here stronger in this bill than was H.R. 7800, heretofore defeated.\" Representative Reed later contended that because of the approaching election, many Members chose to go on record in favor of the other OASI provisions and so voted for the amended version of H.R. 7800. The bill was approved 361 (165-R, 195-D, 1-I) to 22 (20-R, 2-D) on June 17, 1952."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["When the bill came to the Senate Finance Committee, it dropped the disability freeze provision. The Finance Committee said there was inadequate time to study the issue properly.", "The committee amendment, offered by Senator George (D-GA), to drop the disability freeze provision, was passed by voice vote on June 26, 1952.", "H.R. 7800 (without the disability freeze provision) was passed in the Senate by a voice vote on June 26, 1952."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["The conferees retained the disability freeze provision, in principle. The compromise terminated the freeze provision on June 30, 1953; at the same time, it did not allow an application to be accepted before July 1, 1953. Thus, the disability freeze provision was made inoperative unless Congress, in subsequent legislation, were to take action to remove the bar. The stated intent in making the provision inoperative was to permit \"the working out of tentative agreements with the States for possible administration of these provisions.\" In addition, the conferees gave responsibility for determining whether an applicant was disabled to appropriate state agencies (such as public assistance, vocational rehabilitation, or workmen's compensation), instead of the FSA. The Federal Security administrator would be able to overturn a ruling by the state agencies that a person was disabled, but would not be able to reverse a ruling by the state agencies that a person was not disabled.", "The conference report was agreed to July 5, 1952, by voice votes in both chambers."], "subsections": []}]}, {"section_title": "P.L. 761\u201483rd Congress, Social Security Amendments of 1954", "paragraphs": ["H.R. 9366, the Social Security Amendments of 1954, was signed by President Eisenhower on September 1, 1954. In his 1953 State of the Union Message, the President recommended that \"OASI should promptly be expanded to cover millions of citizens who have been left out of the Social Security system.\" The Social Security Amendments of 1954 extended mandatory coverage to, among others, some self-employed farmers, engineers, architects, accountants, and funeral directors, all federal employees not covered by government pension plans, and farm and domestic service workers not covered by the 1950 amendments, and it extended voluntary coverage to ministers and certain state and local government employees already covered by staff retirement systems. The bill also raised the wage base for the OASI tax to $4,200; raised the tax rate to 3.5%, each, for employers and employees beginning in 1970, and to 4.0%, each, beginning in 1975, with the tax rate for the self-employed continuing at 1.5 times the employee rate (or 75% of the combined employee-employer rate). OASI benefits for recipients were raised by roughly 15%, with the maximum individual benefit rising from $85 to $98.50 a month, and a revised benefit formula was provided for future retirees that increased benefits by roughly 27%, with the maximum benefit rising from $85 a month to $108.50. The bill also put the disability freeze into effect (see discussion of House action on the 1952 amendments below), with disability determinations to be made by the appropriate State agencies, permitted a recipient to earn up to $1,200 a year without deductions, eliminated the earnings test for people aged 72 or older, and dropped the five years of lowest earnings from average monthly wage determinations for benefit computation purposes."], "subsections": [{"section_title": "House Action", "paragraphs": ["On June 1, 1954, Representative Smith (D-VA) and other farm area Democrats objected to bringing H.R. 9366 to the floor under a closed rule because coverage of farmers was included in the bill. Representative Smith stated, \"I object to the feature of this bill that prohibits you from offering any amendment. I think that requires a little discussion and a little understanding. We all agree that on an ordinary tax bill it is not feasible or practical to write it on the floor of the House, and therefore we have adopted the theory that we have closed rules on tax bills ... all we asked for in the Rules Committee was that the individual members of this House be given an opportunity to offer amendments to designate what classifications of persons should be included.\" On June 1, 1954, by a vote of 270 (171-R, 98-D, 1-I) to 76 (5-R, 71-D), debate of the closed rule was cut off, and the closed rule was then adopted by voice vote.", "The House bill also included provisions extending mandatory coverage to all self-employed professionals but doctors (dentists and other medical professionals would have been covered).", "The House passed H.R. 9366 on June 1, 1954, by a vote of 356 (181-R, 174-D, 1-I) to 8 (2-R, 6-D)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["H.R. 9366 as reported by the Finance Committee included the coverage of farm and domestic service workers, ministers, state and local government employees covered by a retirement system, and a small number of professionals. It also increased the earnings test threshold to $1,200 a year; reduced the age at which the earnings test no longer applied to 72; and increased the lump-sum death benefit from $255 to $325.50. During the Senate debate on H.R. 9366, nine amendments were adopted, six were rejected, and six were presented and then withdrawn.", "Among the amendments adopted on the floor by the Senate was a provision by Senator Long (D-LA) to require the Department of Health, Education, and Welfare to study the feasibility and costs of providing increased minimum benefits of $55, $60, and $75 a month under the Social Security program. On August 13, 1954, Senator Long's amendment was agreed to by voice vote.", "Among the amendments defeated were the Johnston (D-SC) amendment to reduce the Social Security eligibility age to 60; the Stennis (D-MS) amendments that would have left the coverage of farm workers unchanged; and the Humphrey (D-MN) amendment to increase the widow's benefit to 100% of the primary insurance amount. On August 13, 1954, Senator Johnston's amendment was rejected by voice vote. On August 13, 1954, the Stennis amendments were rejected en bloc by voice vote. On August 13, 1954, Senator Humphrey's amendment was rejected on a division vote.", "Among the amendments that were presented and then withdrawn was an amendment by Senator Lehman (D-NY) to extend Social Security coverage, increase benefits, add permanent and total disability and temporary disability Social Security benefits, and to make other changes.", "On August 13, 1954, the Senate passed H.R. 9366, by voice vote."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["The conferees, among other things, accepted a provision mandatorily covering self-employed farmers, accountants, architects, engineers, and funeral directors, but excluding lawyers, doctors, dentists, or other medical professionals, and extended coverage to federal employees not covered by staff retirement systems.", "Both chambers agreed to the conference report without amendments by voice vote on August 20, 1954, the last day of the session."], "subsections": []}]}, {"section_title": "P.L. 880\u201484th Congress, Social Security Amendments of 1956", "paragraphs": ["H.R. 7225, the Social Security Amendments of 1956, was signed by President Eisenhower on August 1, 1956. The amendments provided benefits, after a six-month waiting period, for permanently and totally disabled workers aged 50 to 64 who were fully insured and had at least 5 years of coverage in the 10-year period before becoming disabled; to a dependent child 18 years or older of a deceased or retired insured worker if the child became disabled before age 18; to female workers and wives at the age of 62, instead of 65, with actuarially reduced benefits; reduced from 65 to 62 the age at which benefits were payable to widows or parents, with no reduction; extended coverage to lawyers, dentists, veterinarians, optometrists, and all other self-employed professionals except doctors; increased the tax rate by 0.25% on employer and employee each (0.375% for self-employed people) to finance disability benefits (thereby raising the aggregate tax rate ultimately to 4.25% each for employees and employers); and created a separate Disability Insurance (DI) trust fund. The Social Security program now consisted of Old-Age, Survivors, and Disability Insurance (OASDI)."], "subsections": [{"section_title": "House Action", "paragraphs": ["Major House Ways and Means Committee provisions provided benefits to disabled persons aged 50 or older and reduced the age at which women could first receive OASI benefits to 62. Although some Members maintained that not enough time was spent in working out the details of these two controversial provisions, H.R. 7225 was brought to the floor under suspension of the rules, which barred floor amendments and required a two-thirds vote for passage. H.R. 7225 was passed by the House on July 18, 1955, by a vote of 372 (169-R, 203-D) to 31 (23-R, 8-D)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["At Senate Finance Committee hearings on the House-passed bill, the Secretary of Health, Education, and Welfare, Marion Folsom stated that the Administration was opposed to reducing the retirement age to 62 for women and providing disability benefits. According to Congress and the Nation , Senator Folsom said that OASI had stayed actuarially sound without excessive taxes because it had been restricted to one purpose with \"predictable costs\": providing income for the aged. Spokesmen for the AFL-CIO and several other groups maintained that union experience with welfare plans and federal studies dating back to 1937 showed that disability insurance was both administratively and financially sound.", "On June 5, 1956, the Senate Finance Committee reported H.R. 7225 after eliminating the Disability Insurance program and the tax increase to pay for it and limiting retirement benefits at age 62 to widows only.", "On July 17, 1956, Senator George (D-GA) offered an amendment reinstating the Disability Insurance program and the tax increase to finance it. The amendment provided for a separate disability insurance trust fund (instead of operating the new program out of the OASI fund). The amendment was passed by a vote of 47 (6-R, 41-D) to 45 (38-R, 7-D).", "Also, on July 17, 1956, the Senate agreed to Senator Kerr's (D-OK) amendment to permit women to receive benefits at age 62 at actuarially reduced rates. The amendment passed by a vote of 86 (40-R, 46-D) to 7 (5-R, 2-D).", "On July 17, 1956, the Senate passed H.R. 7225 by a vote of 90 (45-R, 45-D) to 0."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["The House on July 26, 1956, and the Senate on July 27, 1956, cleared the conference report on H.R. 7225 without amendments by voice votes."], "subsections": []}]}, {"section_title": "P.L. 85-840, Social Security Amendments of 1958", "paragraphs": ["H.R. 13549, the Social Security Amendments of 1958, was signed by President Eisenhower on August 28, 1958. The amendments raised recipients' benefits an average of 7%, with benefits ranging from $33 to $127 per month for future recipients; increased maximum family benefits from $200 to $254; raised the wage base from $4,200 to $4,800 a year; increased the tax rate by 0.25% on employers and employees each and 0.375% for the self-employed; provided benefits to dependents of workers receiving disability benefits; and permitted the aged dependent parents of an insured deceased worker to receive survivors' benefits even if the worker's widow or dependent widower or child were alive and also eligible for benefits."], "subsections": [{"section_title": "House Action", "paragraphs": ["Most of the controversy over H.R. 13549 pertained to public assistance programs. There was relatively little controversy over the proposed OASDI provisions. During debate on H.R. 13549, Representative Reed (R-NY) stated that the bill would strengthen the actuarial soundness of the Social Security program.", "On July 31, 1958, the House passed H.R. 13549 by a vote of 374 to 2."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On August 15, 1958, Senator Yarborough (D-TX) offered an amendment to increase benefits by 10%, rather than 7% as proposed in H.R. 13549. Senator Yarborough stated that in many states old-age public assistance payments were higher than the \"Social Security payments the people have earned by putting their money into the Social Security fund.\"", "Proponents of the amendment mentioned that a 10% increase would alleviate erosion of benefits due to inflation. Opponents of the amendment argued that many persons getting Social Security also received income from other sources. Some opponents of the amendment maintained that it would jeopardize the enactment of the bill. Senator Yarborough's amendment was rejected by a vote of 32 (6-R, 26-D) to 53 (33-R, 20-D).", "On August 16, 1958, Senator Kennedy (D-MA) offered an amendment to increase Social Security benefits by 8% (rather than 7%). The Kennedy-Case amendment was rejected by voice vote.", "On August 16, 1958, Senator Morse (D-OR) offered an amendment to increase Social Security benefits by 25%, provide health insurance, and make other changes. Senator Morse's amendment was rejected by voice vote.", "On August 16, 1958, Senator Humphrey (D-MN) offered an amendment to provide health insurance. (Senator Morse's amendment was based in part on this Humphrey amendment.) Senator Humphrey withdrew his amendment.", "On August 16, 1958, Senator Kennedy offered an amendment for himself and Senator Smathers (D-NJ) to eliminate the dollar ceiling of $255 on the lump-sum death benefit and restore the 3-to-1 ratio between the death benefit and the regular monthly benefit. The amendment was rejected by voice vote.", "On August 16, 1958, Senator Revercomb (R-WV) offered an amendment to provide full Social Security retirement benefits at age 62, for both men and women. Senator Revercomb's amendment was rejected by voice vote.", "The Senate passed H.R. 13549 on August 16, 1958, by a vote of 79 (37-R, 42-D) to 0."], "subsections": []}, {"section_title": "House Concurrence", "paragraphs": ["On August 19, 1958, the House by a voice vote agreed to the Senate amendments."], "subsections": []}]}, {"section_title": "P.L. 86-778, Social Security Amendments of 1960", "paragraphs": ["H.R. 12580, the Social Security Amendments of 1960, was signed by President Eisenhower on September 13, 1960. Health care for the aged was the primary issue in 1960. At the crux of the debate was the question of whether the federal government should assume major responsibility for the health care of the nation's elderly people, and, if so, whether medical assistance should be provided through the Social Security system or through the public assistance programs (i.e., charity approach).", "The 1960 amendments provided more federal funds for old-age assistance (OAA) programs so that states could choose to improve or establish medical care services to OAA recipients. In addition, the legislation known as \"Kerr-Mills\" established a new voluntary program (under jurisdiction of the OAA program) of medical assistance for the aged, under which states received federal funds to help pay for medical care for persons aged 65 or older who were not recipients of OAA but whose income and resources were insufficient to meet their medical expenses.", "The 1960 amendments also contained a number of OASDI provisions. The amendments made disability benefits available to workers under the age of 50; established a new earnings test whereby each dollar of yearly earnings between $1,200 and $1,500 would cause only a 50-cent reduction in benefits with a dollar-for-dollar reduction in benefits for earnings above $1,500; liberalized requirements for fully insured status so that to be eligible for benefits a person needed only one quarter of covered work for every three calendar quarters (rather than one for every two quarters, as under the old law), elapsing after 1950 and before retirement, disability, or death; and raised the survivor benefit of each child to 75% of the parent's PIA."], "subsections": [{"section_title": "House Action", "paragraphs": ["H.R. 12580 as reported by the Ways and Means Committee contained two medical care provisions for elderly people. The first provision provided the states with additional funding to improve or to establish medical care programs for old-age assistance recipients. The second provision established a new federal-state program (under a new title of the Social Security Act) designed to assist aged persons who were not eligible for public assistance but who were unable to pay their medical bills.", "The Ways and Means Committee rejected H.R. 4700, introduced by Representative Forand (D-RI), which would have provided insurance against the cost of hospital, nursing home, and surgical services for OASDI recipients, by a vote of 17 to 8.", "Proponents of H.R. 12580 said that it provided medical assistance for every aged person in any state that implemented a medical assistance program. Representative Thompson (D-NJ), a supporter of the Forand bill stated that under H.R. 12580 people would be \"denied the opportunity of contributing to their old-age health insurance coverage while employed and would be forced to rely upon charity after their working days were over.\" He contended further that \"even this charity ... is contingent upon the action of the separate states.\"", "The House passed H.R. 12580 on June 23, 1960, by a vote of 381 (137-R, 244-D) to 23 (7-R, 16-D)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["The Senate deleted the bill's new title, and instead adopted an amendment by Senator Kerr (D-OK) and Senator Frear (D-DE) that amended Title I of the Social Security Act to provide medical services for medically needy aged persons.", "On August 20, 1960, Senator Javits (R-NY) offered an amendment to provide federal matching grants to states to enable them to give health care to needy persons aged 65 or older. (This proposal was more generous than the provisions\u2014also based on the public assistance, i.e., charity approach\u2014already in the report by the Finance Committee.) On August 23, 1960, Senator Javits's amendment was rejected by a vote of 28 (28-R) to 67 (5-R, 62-D).", "Also on August 20, 1960, Senator Anderson (D-NM) offered an amendment to use Social Security as well as the public assistance program for the aged to provide health care to the elderly. On August 23, 1960, Senator Anderson's amendment was rejected by a vote of 44 (1-R, 43-D) to 51 (32-R, 19-D).", "On August 23, 1960, the Senate passed by voice vote Senator Byrd's (D-WV) amendment to permit men to retire at the age of 62 with actuarially reduced benefits. (The amendment was later dropped in conference.)", "The Senate passed H.R. 12580 on August 23, 1960, by a vote of 91 (31-R, 60-D) to 2 (1-R, 1-D)."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["The conferees agreed to the medical care provisions in the Senate-passed bill (i.e., no new title for a program for aged persons not eligible for OAA benefits). The medical provisions became known as the Kerr-Mills program, named for Senator Robert Kerr (D-OK) and House Ways and Means Committee Chairman Wilbur Mills (D-AR).", "The House agreed to the conference report on August 26, 1960, by a vote of 369 (132-R, 237-D) to 17 (8-R, 9-D).", "The Senate agreed to the conference report on August 29, 1960, by a vote of 74 (31-R, 43-D) to 11 (1-R, 10-D)."], "subsections": []}]}, {"section_title": "P.L. 87-64, Social Security Amendments of 1961", "paragraphs": ["H.R. 6027, the Social Security Amendments of 1961, was signed into law on June 30, 1961, by President Kennedy. In general, the amendments made many of the changes in the Social Security program recommended by President Kennedy in his February 2, 1961, message to Congress, in which he outlined a program to restore momentum to the national economy. The amendments raised the minimum benefit to $40 per month; permitted men to claim retired worker's benefits at the age of 62, instead of 65, with actuarially reduced benefits; liberalized the insured status requirement so that, subject to the 6-quarter minimum and the 40-quarter maximum, an individual was fully insured if he had one quarter of coverage for every calendar year that elapsed between January 1, 1951, or age 21, whichever was later, and the year before he died, became disabled, or reached retirement age; increased benefits to a surviving aged widow, widower, or dependent parent of an insured deceased worker from 75 to 82.5% of the benefit the worker would have been entitled to if alive; changed the earnings test so that an aged recipient had no benefits withheld if earnings were $1,200 a year or less, $1 withheld for each $2 earned between $1,200 and $1,700, and a $1 reduction in benefits for each additional dollar of earnings above $1,700; and raised the employer and employee tax rates by 0.125% and the self-employed tax rate by 0.1875%."], "subsections": [{"section_title": "House Action", "paragraphs": ["In the House, the principal point of dissension was the provision in H.R. 6027 that lowered the eligibility age for men from 65 to 62. Several Republicans opposed the provision on the basis that it would likely start a trend toward \"compulsory retirement\" at age 62. Speaking for himself and most of the minority committee members, Representative Curtis (R-MO) stated, \"The reason [we are] against the age 62 [provision] is this: our older people are having a hard enough time now to stay in the labor market. This provides further incentive to drive them out.\"", "On April 20, 1961, Representative Curtis made a motion to recommit H.R. 6027 and substitute a measure that cut out the provisions for lowering the first eligibility age for men, increased benefits for widows, and raised the minimum benefit from $33 to $40. The motion was rejected by voice vote. Note that the provisions raising the minimum benefit and increasing benefits for widows were already in H.R. 6027 as reported out of committee.", "The House passed H.R. 6027 on April 20, 1961, by a vote of 400 (149-R, 251-D) to 14 (14-R)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["In the Senate, debate focused on Senator Cotton's (R-NH) amendment made on June 26, 1961, to increase the earnings test limit to $1,800 a year. Senator Kerr (D-OK) said that Senator Cotton's amendment failed to provide increased OASDI taxes to pay for the additional $427 million to $615 million that would be paid out each year under the proposed amendment. Senator Kerr stated that \"an amendment which would result in the impairment of the fiscal integrity of the fund should not be pressed.\"", "Senator Hartke (D-IN) offered a substitute amendment that provided a slightly less generous new earnings test limit ($1,700). The substitute amendment was passed June 26, 1961, by a vote of 59 (3-R, 56-D) to 30 (30-R). Provisions to finance this change were agreed to by unanimous consent.", "On June 26, 1961, Senator Hartke's amendment to broaden the definition of disability was rejected by voice vote.", "The Senate passed H.R. 6027 90 (33-R, 57-D) to 0 on June 26, 1961."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["Both chambers cleared the conference report by voice votes June 29, 1961."], "subsections": []}]}, {"section_title": "Proposed Social Security Amendments of 1964", "paragraphs": ["H.R. 11865, the proposed Social Security Amendments of 1964, was passed by both the House and the Senate but the conference committee could not reach agreement, adjourning on October 3, 1964, without making any recommendations.", "The proposed Social Security Amendments of 1964 as passed by the House contained a 5% across-the-board Social Security benefit increase; extended the child's benefit to age 22 if he or she were in school; allowed widows to retire at age 60, with actuarially reduced benefits; provided limited benefits to persons aged 72 or older who had some Social Security coverage but not enough to meet the minimum requirements of existing law; and extended Social Security coverage to groups of persons who previously had been excluded. The House-passed bill contained no provision relating to hospital insurance for the aged.", "The proposed Social Security Amendments of 1964 as passed by the Senate contained a hospital insurance program, the so-called King-Anderson bill; increased benefits: raised the earnings base; liberalized the earnings test; changed the eligibility requirements for the blind; and permitted religious groups to reject Social Security coverage if they had religious objections to social insurance."], "subsections": [{"section_title": "House Action", "paragraphs": ["H.R. 11865, the proposed Social Security Amendments of 1964, was reported out of the Ways and Means Committee on July 7, 1964. The bill was debated under a rule that permitted only committee amendments. No amendments were offered.", "On July 29, 1964, the House passed H.R. 11865 by a vote of 388 to 8."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["The Finance Committee approved H.R. 11865 on August 21, 1964. The committee rejected several amendments that would have created a hospital insurance program for the aged through the Social Security program.", "On August 31, 1964, Senator Gore (D-TN) offered an amendment to Senator Long's (D-LA) amendment to increase the proposed across-the-board benefit increase to 7% (instead of the proposed 5% increase) and to liberalize the earnings test. Senator Gore's amendment included the 1963 King (D-CA)-Anderson (D-NM) bill (H.R. 3920/S. 880), which would have provided hospital insurance benefits for the aged under the Social Security program.", "On September 2, 1964, the Gore amendment passed by a vote of 49 to 44.", "On September 3, 1964, the Senate passed H.R. 11865 by a vote of 60 to 28."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["The conference committee on H.R. 11865 could not reach agreement. The conferees from the Senate voted 4 to 3 to insist on including the hospital insurance provisions; the conferees from the House, by a 3 to 2 vote, refused to accept such provisions. The conference committee adjourned on October 2, 1964."], "subsections": []}]}, {"section_title": "P.L. 89-97, Social Security Amendments of 1965", "paragraphs": ["H.R. 6675, the Social Security Amendments of 1965, was signed into law on July 30, 1965, by President Lyndon Johnson. Although a federally operated health insurance program covering the entire nation was considered by the Franklin Roosevelt Administration in 1935, it was not explicitly endorsed until January 1945, when President Roosevelt's budget message called for an \"extended Social Security including medical care.\" Such a plan was submitted to Congress by President Truman in November 1945, but neither chamber acted on the proposal, in large part due to strong opposition by the AMA. The controversy surrounding the establishment of a federal health insurance program for the aged was finally ended by the 1965 amendments (H.R. 6675), which established a basic two-part health insurance program called Medicare (Title XVIII of the Social Security Act). The costs of hospitalization and related care would be met in part by a compulsory program of Hospital Insurance (HI, Part A), financed by a separate payroll tax. The program would serve recipients of the Social Security and railroad retirement programs, aged 65 or older. A voluntary Supplementary Medical Insurance (SMI) plan (Part B) would help pay doctor bills and related services, for all persons aged 65 or older, financed through monthly premiums paid by the recipient and a matching federal payment from general revenues.", "The amendments also provided a 7% across-the-board increase in OASDI benefits, extended compulsory self-employment coverage to doctors, made child's benefits available through age 21 if the child were a full-time student (under prior law, they were available only through age 17), permitted widows to receive actuarially reduced benefits at age 60 rather than age 62, provided benefits to divorced wives and widows under certain conditions, increased the earnings test amount to $1,500 with $1 withheld for every $2 earned up to $2,700, and provided that an insured worker would be eligible for disability benefits if his or her disability was expected to end in death or to last for 12 consecutive months, instead of indefinitely. The 1965 amendments also increased the payroll tax rate and the taxable wage base. In addition, P.L. 89-97 reduced the number of quarters of work necessary for persons aged 72 or older to have insured status (from 6 quarters to 3 quarters for a worker and from 6 quarters to 3 quarters for a wife who reached age 72 in or before 1966, to 4 quarters for a wife who turned 72 in 1967, and to 5 quarters for a wife who attained age 72 in 1968).", "Further, a new federal-state medical assistance program established under Title XIX of the Social Security Act replaced the Kerr-Mills law (medical assistance for the aged that was enacted in 1960). The program was to be administered by the states, with federal matching funds. The new Medicaid program was available to all people receiving assistance under the public assistance titles (Title I, Title IV, Title X, and Title XIV) and to people who were able to provide for their own maintenance but whose income and resources were insufficient to meet their medical costs."], "subsections": [{"section_title": "House Action", "paragraphs": ["A federal hospital insurance program, or \"Medicare,\" had been passed only once by the Senate, in 1964, and then by a narrow margin. It had never been approved by the Ways and Means Committee and thus had not been put to a House vote. The 1964 congressional elections, however, brought 42 new Northern Democrats into the House, almost all of them Medicare supporters.", "The Ways and Means Committee began holding executive sessions on H.R. 1, a bill to establish a social insurance program for hospital and related care for the aged, on January 27, 1965. The committee reported H.R. 6675 March 29, 1965, with all 17 Democrats favoring the bill and all 8 Republicans opposing it.", "House floor debate centered on the Medicare proposal. Supporters said it was long overdue. Critics opposed its compulsory nature, argued that it would be financed by a \"regressive\" payroll tax, and said it would endanger the Social Security cash benefit program. Republican spokesmen instead wanted a voluntary health plan (as opposed to a mandatory social insurance approach) with a Medicaid-like program underpinning it to provide medical assistance for the needy aged.", "On April 8, 1965, the House rejected Representative Byrnes's (R-WI) motion to recommit H.R. 6675 to the Ways and Means Committee with instructions to substitute the text of H.R. 7057, a bill that Representative Byrnes had introduced a week earlier. H.R. 7057 was not offered as an amendment because the rule did not permit such action. H.R. 7057 provided for all hospitalization, nursing home, medical and surgical care to be financed through a voluntary system with payment split between the patient and general revenues, rather than from a tax on the payrolls of employers. The motion to recommit was rejected by a vote of 191 (128-R, 63-D) to 236 (10-R, 226-D).", "On April 8, 1965, the House passed H.R. 6675 by a vote of 313 (65-R, 248-D) to 115 (73-R, 42-D)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On June 30, 1965, the Finance Committee reported its version of H.R. 6675. The committee approved the bill by a vote of 12 (2-R, 10-D) to 5 (4-R, 1-D).", "On July 7 and 8, 1965, three moves to expand H.R. 6675 were rejected. Senator Ribicoff's (D-CT) amendment to remove all time limits on length of hospital stays under Medicare was rejected by a vote of 39 (13-R, 26-D) to 43 (12-R, 31-D). Senator Miller's (R-IA) amendment to provide for an automatic 3% increase in Social Security pensions whenever a 3% increase occurred in the \"retail\" price index was rejected by a vote of 21 (15-R, 6-D) to 64 (9-R, 55-D). Senator Prouty's (R-VT) amendment to provide benefit increases ranging from 75% in the low-income brackets to 7% in the upper-income brackets was rejected by a vote of 12 (10-R, 2-D) to 79 (18-R, 61-D). In addition, Senator Curtis's (R-NE) amendment to provide that the Medicare patient pay a deductible based on ability to pay was rejected by a vote of 41 (25-R, 16-D) to 51 (4-R, 47-D).", "On July 7, 1965, Senator Byrd's (D-WV) amendment to lower the age at which workers could receive Social Security benefits to 60 (rather than age 62, the existing minimum) was agreed to by voice vote.", "On July 8, 1965, Senator Kennedy's (D-NY) amendment to prohibit federal payments to any hospital not meeting the standards required by the state or local government was passed by voice vote.", "On July 9, 1965, Senator Hartke's (D-IN) amendment to liberalize the definition of blindness under the Social Security program, provide benefits to blind workers with at least 6 quarters of Social Security coverage, and permit blind workers to receive benefits regardless of other earnings was passed by a vote of 78 (28-R, 50-D) to 11 (11-D).", "On July 9, 1965, Senator Hartke's amendment to eliminate the time limit on hospital care under the proposed program was agreed to by voice vote.", "On July 9, 1965, Senator Smathers's (D-FL) amendment to raise payroll taxes to finance the benefits provided in floor amendments passed by a voice vote.", "On July 9, 1965, Senator Curtis (R-NE) offered an amendment to strike Medicare, Parts A and B, from the bill. The amendment was rejected by a vote of 26 (18-R, 8-D) to 64 (11-R, 53-D). Senator Curtis also reintroduced, in a slightly different form, his amendment to provide a deductible based on the Medicare patient's ability to pay. This amendment, too, was rejected by a vote of 40 to 52. In addition, Senator Curtis moved to recommit H.R. 6675 with instructions to strike out the portions related to Medicare and substitute a plan patterned after the health insurance program used by retired federal employees, but financed from current premiums. The motion to recommit H.R. 6675 was rejected by a vote of 26 (18-R, 8-D) to 63 (10-R, 53-D).", "H.R. 6675 was passed by the Senate on July 9, 1965, by a vote of 68 (13-R, 55-D) to 21 (14-R, 7-D)."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["On July 27, 1965, the House adopted the conference report by a vote of 307 (70-R, 237-D) to 116 (68-R, 48-D).", "On July 28, 1965, the Senate adopted the conference report by a vote of 70 (13-R, 57-D) to 24 (17-R, 7-D)."], "subsections": []}]}, {"section_title": "P.L. 89-368, Tax Adjustment Act of 1966", "paragraphs": ["H.R. 12752, signed by President Johnson on March 15, 1966, raised income taxes to help pay for the Vietnam War. It extended OASI benefits of $35 per month to persons over the age of 71 who were not covered, but with the benefit reduced by the amount of payments received under government pension plans, veteran's or civil service pensions, teacher's retirement pension plans, or welfare programs."], "subsections": [{"section_title": "House Action", "paragraphs": ["The House passed H.R. 12752, the Tax Adjustment Act of 1966, by a vote of 246 (46-R, 200-D) to 146 (88-R, 58-D). The bill did not contain any Social Security provisions."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["During the floor debate on H.R. 12752, Senator Prouty (R-VT) offered an amendment to extend a minimum Social Security payment of $44 a month to all persons aged 70 or older who were not then eligible for benefits (an estimated 1.8 million persons at a cost of $760 million in FY1967).", "On March 8, 1966, Senator Long (D-LA) moved to table the Prouty amendment but his motion was rejected by a vote of 37 (1-R, 36-D) to 51 (30-R, 21-D).", "On March 8, 1966, the Senate passed the Prouty amendment by a vote of 45 (21-R, 24-D) to 40 (9-R, 31-D) and adopted by a vote of 44 (25-R, 19-D) to 43 (6-R, 37-D) a motion by Senator Prouty to table Senator Mansfield's (D-MT) motion to reconsider the vote on passage of the amendment.", "On March 9, 1966, the Senate passed the Tax Adjustment Act of 1966 by a vote of 79 (24-R, 55-D) to 9 (4-R, 5-D)."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["On March 10, 1966, the conferees included the Prouty amendment in the final version of H.R. 12752, but changed the monthly benefit to $35.", "On March 15, 1966, the House adopted the conference report on H.R. 12752 by a vote of 288 (68-R, 220-D) to 102 (59-R, 43-D).", "On March 15, 1966, the Senate adopted the conference report on H.R. 12752 by a vote of 72 (23-R, 49-D) to 5 (4-R, I-D)."], "subsections": []}]}, {"section_title": "P.L. 90-248, Social Security Amendments of 1967 (H.R. 12080)", "paragraphs": ["H.R. 12080, the Social Security Amendments of 1967, was signed by President Johnson on January 2, 1968. The amendments provided a 13% across-the-board increase in benefits; raised the taxable wage base from $6,600 to $7,800; increased the payroll tax rate from 4.4% on employers and employees each to 4.8% in 1969; raised the minimum benefit from $44 to $55 per month; raised the earnings test limit to $1,680 a year instead of $1,500 (recipient lost $1 in benefits for every $2 earned between $1,680 and $2,880, and lost $1 for each additional dollar earned above $2,880); added benefits for disabled widows and widowers at age 50, with a stricter definition of disability; liberalized the definition of blindness for disability payments; and clarified the definition of disability.", "President Johnson had called for a 15% across-the-board increase in OASDI benefits and numerous other changes in the Social Security Act. The proposals were embodied in H.R. 5710, introduced in the House on February 20, 1967, by the Committee on Ways and Means chairman, Wilbur Mills (D-AR)."], "subsections": [{"section_title": "House Action", "paragraphs": ["The Ways and Means Committee held hearings on the Administration's bill (H.R. 5710) in March and April 1967. On August 7, 1967, it reported a new bill, H.R. 12080, that included most of the Administration's Social Security proposals, notably a provision that raised the earnings test limit from $1,500 to $1,680.", "On August 17, 1967, Representative Utt (R-CA) moved to recommit H.R. 12080. The motion was rejected by voice vote.", "On August 17, 1967, the House passed H.R. 12080 by a roll call vote of 416 (182-R, 234-D) to 3 (1-R, 2-D). The bill was debated under a closed rule prohibiting floor amendments."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On November 14, 1967, the Senate Finance Committee reported a heavily amended bill that contained several OASDI provisions as recommended by the Administration rather than as modified by the House. The Senate bill provided a 15% across-the-board Social Security increase, in contrast to the 12.5% increase in the House bill.", "On November 17, 1967, Senator Prouty (R-VT) offered an amendment to finance the higher benefits out of general revenues rather than Social Security taxes. The amendment was rejected by a vote of 6 (3-R, 3-D) to 62 (23-R, 39-D).", "On November 17, 1967, Senator Metcalf (D-MT) offered an amendment to delete from H.R. 12080 a more stringent definition of disability. The Metcalf amendment was passed by a vote of 34 (6-R, 28-D) to 20 (16-R, 4-D).", "On November 21, 1967, Senator Williams (R-DE) offered an amendment to implement the Finance Committee's recommended payroll tax increase in January 1968 (before the general election) rather than in January 1969. The amendment was defeated by a vote of 27 (22-R, 5-D) to 49 (4-R, 45-D).", "On November 21, 1967, the Senate, by a vote of 22 (17-R, 5-D) to 58 (9-R, 49-D), rejected a Republican proposal offered by Senator Curtis (R-NE) and Senator Williams (R-DE) substituting the 12.5% OASDI benefit increase and financing plan contained in the House bill for the 15% benefit increase and financing plan recommended by the Finance Committee.", "On November 21, 1967, Senator Bayh (D-IN) offered an amendment to raise the earnings test limit from $1,680 to $2,400. The amendment passed by a vote of 50 (14-R, 36-D) to 23 (10-R, 13-D).", "The Senate passed H.R. 12080 on November 22, 1967, by a 78 (23 R, 55-D) to 6 (4-R, 2-D) roll call vote."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["The conference report on H.R. 12080 was filed on December 11, 1967. All of the major Senate floor amendments were dropped from the bill. The conferees split the difference between many of the other provisions.", "The House adopted the conference report on December 13, 1967, by a vote of 390 (167-R, 223-D) to 3 (1-R, 2-D).", "The Senate adopted the conference report on December 15, 1967, by a vote of 62 (26-R, 36-D) to 14 (3-R, 11-D)."], "subsections": []}]}, {"section_title": "P.L. 91-172, Tax Reform Act of 1969", "paragraphs": ["H.R. 13270, the Tax Reform Act of 1969, was signed by President Nixon on December 30, 1969. The new law included a 15% increase in Social Security benefits beginning in January 1, 1970."], "subsections": [{"section_title": "House Action", "paragraphs": ["On August 7, 1969, the House passed H.R. 13270 by a vote of 395 (176-R, 219-D) to 30 (10-R, 20-D). The bill did not contain any Social Security provisions."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On December 5, 1969, Senator Long (D-LA) offered an amendment to raise basic Social Security benefits by 15% beginning in January 1970.", "Senator Long's amendment was passed by a vote of 73 (23-R, 50-D) to 14 (14-R).", "A Byrd (D-WV)-Mansfield (D-MT) amendment to increase the minimum benefit to $100 for single persons and to $150 for couples and to increase the taxable wage base from $7,800 to $12,000 beginning in 1973 was passed December 5, 1969, by a vote of 48 (8-R, 40-D) to 41 (28-R, 13-D).", "On December 5, 1969, Senator Williams (R-DE) offered a substitute amendment to provide a 10%, rather than a 15% benefit increase. The substitute amendment was rejected by a vote of 34 (33-R, 1-D) to 56 (5-R, 51-D).", "On December 11, 1969, the Senate passed H.R. 13270 by a vote of 69 (18-R, 51-D) to 22 (20-R, 2-D)."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["The conferees agreed to increase Social Security benefits by 15%, effective January 1, 1970. The House had not included the increase in H.R. 13270 but had approved an identical provision in another bill, H.R. 15095. The conferees dropped the other provisions that were added on the Senate floor.", "On December 22, 1969, the House adopted the conference report on the Tax Reform Act, H.R. 13270, by a vote of 381 (169-R, 212-D) to 2 (2-R).", "On December 22, 1969, the Senate adopted H.R. 13270 by a vote of 71 (25-R, 46-D) to 6 (6-R)."], "subsections": []}]}, {"section_title": "P.L. 92-5, Public Debt Limit Increase; Social Security Amendments", "paragraphs": ["President Nixon signed H.R. 4690 on March 17, 1971. It provided a 10% across-the-board increase in OASDI benefits, retroactive to January 1, 1971; raised the minimum benefit from $64 to $70.40 per month; increased the taxable wage base from $7,800 to $9,000 effective January 1, 1972; increased the OASDI tax rates on employers and employees to 5.15% each beginning in 1976 (from 5% scheduled to take effect in 1973 under prior law); and provided a 5% increase in special benefits payable to individuals aged 72 or older who were not insured for regular benefits, retroactive to January 1, 1971."], "subsections": [{"section_title": "House Action", "paragraphs": ["In 1970, a comprehensive Social Security bill (H.R. 17550) was passed by the House by a vote of 344 (166-R, 178-D) to 32 (32-D). H.R. 17550 increased benefits by 5%, provided for automatic benefit increases with rises in the cost of living, and made other changes in the OASDI and Medicare programs."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["In the Senate, H.R. 17550 became a conglomerate bill containing import quotas and welfare provisions as well. On December 29, 1970, the Senate separated Social Security changes from the rest of the bill. H.R. 17550, with provisions raising benefits by 10%, providing a $100 minimum monthly benefit, raising the taxable wage base from $7,800 to $9,000, and making changes in the Medicare and Medicaid programs, was passed by the Senate on December 29, 1970, by a vote of 81 (35-R, 46-D) to 0. However, the House never agreed to a conference.", "Senator Long (D-LA), chairman of the Finance Committee and floor manager of H.R. 4690, said that he had asked the House to take immediate action to raise Social Security benefits and as the House had not responded, he was offering a benefit increase as an amendment to H.R. 4690, a bill to increase the debt ceiling.", "On March 12, 1971, Senator Long's amendment to provide a 10% increase in Social Security payments, a $100 minimum monthly benefit, increases in earnings limitations, and other changes passed by a vote of 82 (38-R, 44-D) to 0.", "The Senate, on March 12, 1971, passed H.R. 4690, after approving several Social Security changes, including the benefit increase proposed by Senator Long, by a vote of 80 (37-R, 43-D) to 0."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["Conferees accepted the Senate's 10% benefit increase but reduced the $100 minimum benefit to $70.40 and made several other modifications.", "On March 16, 1971, the House adopted the conference report by a vote of 360 (150-R, 210-D) to 3 (3-R).", "On March 16, 1971, the Senate adopted the report by a vote of 76 (37-R, 39-D) to 0."], "subsections": []}]}, {"section_title": "P.L. 92-336, Public Debt Limit; Disaster losses; Social Security Act Amendments", "paragraphs": ["President Nixon signed H.R. 15390, a bill to extend the limit on the public debt, on July 1, 1972. At the beginning of the year, the President included a number of Social Security proposals, along with a controversial welfare reform plan, in H.R. 1. Congress at midyear used a more promising vehicle to pass a separate 20% increase in Social Security benefits. The increase was added in the Senate to a House-passed bill that raised the debt limit (H.R. 15390). The bill also provided for future automatic increases in Social Security benefits when the consumer price index (CPI) rose by 3% or more. To finance the increase, the taxable wage base was raised from $9,000 to $10,800 in 1973 and to $12,000 in 1974, with automatic adjustment thereafter. The Congressional Quarterly Almanac reported that,", "Backers of the Social Security benefits package decided to attach it to the debt increase bill for two reasons: (1) President Nixon, who opposed a 20% increase as inflationary, would be unlikely to veto a bill that contained a debt limit increase, and (2) H.R. 1, the bill under which a benefit increase was then being considered, faced an uncertain future because of controversy over its welfare provisions."], "subsections": [{"section_title": "House Action", "paragraphs": ["On June 22, 1971, the House had passed H.R. 1 (see P.L. 92-603, below) which included provision for a general benefit increase of 5%.", "On February 23, 1972, Representative Mills (D-AR), chairman of the Ways and Means Committee, introduced H.R. 13320, which provided for an immediate benefit increase of 20%.", "On June 27, 1972, the House passed H.R. 15390, providing only for an increase in the debt ceiling, by a vote of 211 to 168."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On June 29, 1972, Senator Aiken (R-VT) offered an amendment to the Church amendment to increase Social Security benefits by 30%. Following Senator Long's (D-LA) motion, Senator Aiken's amendment was tabled by a vote of 71 (31-R, 40-D) to 18 (8-R, 10-D).", "On June 30, 1972, an amendment by Senator Bennett (R-UT) to increase Social Security benefits by 10% instead of 20% was rejected by the Senate by a vote of 20 (17-R, 3-D) to 66 (21-R, 45-D).", "On June 30, 1972, Senator Church's (D-ID) amendment calling for a 20% benefit increase and the automatic adjustment of benefits and the taxable wage base in the future was adopted by the Senate by a vote of 82 (34-R, 48-D) to 4 (4-R). The amendment made benefit increases automatic whenever the CPI rose by 3% or more in any calendar year.", "On June 30, 1972, the Senate passed H.R. 15390 by a vote of 78 (36-R, 42-D) to 3 (1-R, 2-D). H.R. 15390 was then sent back to the House."], "subsections": []}, {"section_title": "House Response to Senate Amendment", "paragraphs": ["The House sent the debt ceiling bill to the conference committee on June 30, 1972, without accepting the Senate-passed benefit increase. Immediate congressional action was necessary because the debt limit was to revert automatically to $400 billion (from the existing $450 billion) at midnight on June 30, 1972."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["On June 30, 1972, the conferees informally accepted the Senate-passed version of H.R. 15390. Under House rules, however, House conferees could not agree to nongermane amendments added by the Senate. Thus, the conference report was reported back to the House in disagreement.", "On June 30, 1972, Representative Byrnes (R-WI) called the proposed 20% increase \"irresponsible\" and moved that the House concur with the Senate amendment but with the benefit increase limited to 10%. The motion was rejected by a vote of 83 (63-R, 20-D) to 253 (73-R, 180-D).", "On June 30, 1972, Representative Mills's (D-AR) motion that the House concur with the Senate-passed amendment granting a 20% Social Security benefit increase and annual automatic cost-of-living adjustments (COLAs) was accepted by a vote of 302 (108-R, 194-D) to 35 (28-R, 7-D)."], "subsections": []}]}, {"section_title": "P.L. 92-603, Social Security Amendments of 1972", "paragraphs": ["H.R. 1, the Social Security Amendments of 1972, was signed into law on October 30, 1972, by President Nixon. From1969 to 1972, Congress raised OASDI benefits three times. Benefits were raised by 15% in 1969, 10% in 1971, and 20% in 1972 (discussed above, the latter with the adoption of P.L. 92-336). P.L. 92-336 also provided for future automatic benefit increases, or COLAs, starting in January 1975, whenever the consumer price index rose more than 3% in a year. These benefit increases were amendments to bills dealing with other subjects. President Nixon had requested a number of other Social Security liberalizations in 1969, but those proposals were entangled with his controversial welfare reform plan. It was not until 1972, when H.R. 1 became P.L. 92-603, that the requested Social Security recommendations became law.", "The 1972 amendments (H.R. 1) increased benefits for widows and widowers; raised the earnings limit from $1,680 to $2,100 with automatic adjustment to average wages thereafter (benefits were reduced by $1 for every $2 in earnings in excess of $2,100); reduced the waiting period for disability benefits from six to five months; extended Medicare protection to disabled recipients who had received benefits for at least two years; and provided a special minimum benefit of up to $170 a month for those who had worked many years, but at low earnings. In addition, OASDHI tax rate-increases scheduled for the periods 1973-1977, 1978-1980, 1981-1985, 1986-1992, 1993-1997, 1998-2010, and 2011 and years thereafter, were further raised.", "H.R. 1 also contained the President's controversial Family Assistance Plan. The bill remained in the Senate for more than a year because of controversy over welfare reform. The Senate finally approved H.R. 1 with a provision for tests of rival welfare plans, but in conference all family welfare provisions were dropped. In addition, the final version of H.R. 1 contained provisions federalizing and consolidating adult public assistance programs for needy aged, blind, or disabled persons in a new Supplemental Security Income (SSI) program."], "subsections": [{"section_title": "House Action", "paragraphs": ["Most of the debate on H.R. 1 dealt with the family welfare provisions, with little debate on the OASDI and Medicare provisions.", "H.R. 1 was passed by the House on June 22, 1971, by a vote of 288 (112-R, 176-D) to 132 (64-R, 68-D)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On September 27, 1972, Senator Mansfield (D-MT) offered an amendment to increase the earnings test limit from $1,680 to $3,000. The amendment was agreed to by a vote of 76 (32-R, 44-D) to 5 (4-R, 1-D).", "On September 28, 1972, Senator Percy's (R-IL) amendment to require the Secretary of the Department of Health, Education, and Welfare to review the Social Security earnings test, and report to Congress on the feasibility of eliminating it, was accepted by voice vote.", "On September 29, 1972, Senator Long (D-LA) offered an amendment to provide a federal SSI program for needy aged, blind, or disabled persons (in place of the existing state adult assistance programs). The amendment was passed by a vote of 75 (32-R, 43-D) to 0.", "n September 29, 1972, the Finance Committee's amendment to guarantee every person who worked in employment covered under the Social Security program for at least 30 years a minimum monthly benefit of $200 ($300 for a couple) passed by a vote of 73 (30-R, 43-D) to\u00a00.", "On September 30, 1972, Senator Byrd's (D-WV) amendment to lower to 60 the age at which reduced Social Security benefits could be received and to 55 the age at which a woman could receive reduced widow's benefits was agreed to by a vote of 29 (10-R, 19-D) to 25 (12-R, 13-D).", "On September 27, 1972, Senator Goldwater (R-AZ) offered an amendment to repeal the earnings limitation for all Social Security recipients aged 65 or older. The amendment was rejected by voice vote.", "H.R. 1 passed the Senate on October 5, 1972, by a vote of 68 (33-R, 35-D) to 5 (1-R, 4-D)."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["On October 17, 1972, the House adopted the conference report on H.R. 1 by a vote of 305 (129-R, 176-D) to 1 (1-D).", "On October 17, 1972, the Senate adopted the conference report on H.R. 1 by a vote of 61 (24-R, 37-D) to 0."], "subsections": []}]}, {"section_title": "P.L. 93-233, Social Security Benefits Increase", "paragraphs": ["A two-step 11% benefit increase became law when President Nixon signed H.R. 11333 on December, 31, 1973. This increase was in lieu of a 5.9% increase scheduled by P.L. 93-66 , which had been enacted in July 1973. In passing H.R. 11333 , congressional sentiment was that the earlier increase was inadequate to offset recent rapid increases in inflation.", "P.L. 93-233 increased benefits by 7% in March 1974 and by another 4% in June 1974. To finance the increases, the Social Security taxable wage base was raised from $12,600 to $13,200 in January 1974. In addition, the automatic COLA mechanism was revised. Under P.L. 93-233 , the COLA was to be based on the rise in the CPI from the first quarter of one year to the first quarter of the next year, rather than second quarter to second quarter, with benefit increases starting in June 1975 rather than in January. As a result, the increases would appear in checks received in July, creating only a three-month lag from the close of the measuring period (i.e., the first quarter) rather than the seven-month lag under the prior mechanism."], "subsections": [{"section_title": "House Action", "paragraphs": ["With a rule allowing only one floor amendment (pertaining to SSI), the House passed H.R. 11333 on November 15, 1973.", "The November 14-15 debate on H.R. 11333 was devoted to the need for a quick cost-of-living Social Security benefit increase and to questions about the fiscal soundness of the Social Security trust funds. H.R. 11333 as reported by the Ways and Means Committee recommended a two-step 11% Social Security benefit increase in 1974, accelerated SSI benefit increases, and payroll tax increases.", "On November 15, 1973, the House passed H.R. 11333 by a vote of 391 (168-R, 223-D) to 20 (15-R, 5-D)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["The Senate Finance Committee approved a number of provisions affecting Social Security, including an initial 7% benefit increase effective upon enactment and a further 4% increase in June 1974. Rather than acting on H.R. 11333 , the Senate attached its Social Security amendments to H.R. 3153 , a Social Security bill passed by the House on April 2, 1973. ( H.R. 3153 made a number of technical and conforming amendments to the Social Security Act that had been omitted in drafting the conference agreement on H.R. 1, which became P.L. 92-603.) The Senate debated H.R. 3153 for three days and adopted 38 amendments.", "On November 29, 1973, Senator Byrd (D-WV) introduced an amendment that reduced to 55 the age at which a woman could claim a Social Security widow's benefit. Under existing law, a widow could elect to retire at 60 with reduced benefits. Senator Byrd said that his amendment would help widows between the ages of 55 and 60, who would be unlikely and perhaps unable to establish a new career or to reactivate an old one. Terming the Byrd amendment \"inequitable,\" Senator Curtis (R-NE) objected that it would be unjust to reduce the eligibility age for widows \"who have not worked under covered employment\" while keeping the existing requirement at age 62 for \"women who have had to work all their lives and will have to work until they are of retirement age.\" Senator Byrd's amendment was adopted by a vote of 74 (28-R, 46-D) to 13 (9-R, 4-D).", "Senator Byrd introduced a second amendment that increased the earnings test limit from $2,400 to $3,000 and lowered from 72 to 70, the age at which the earnings limit would no longer apply. The amendment was accepted November 29, 1973, by a vote of 83 (33-R, 50-D) to 1 (1-R).", "On November 29, 1973, Senator Hartke's (D-IN) amendment making blind persons eligible for disability benefits after working 18 months in covered employment was adopted by voice vote. (Ordinarily a disabled person had to have covered employment in 20 quarters out of the last 40 quarters to be eligible.)", "On November 30, 1973, the Senate passed H.R. 3153 by a vote of 66 (24-R, 42-D) to 8 (6-R, 2-D)."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["After the Senate passed H.R. 3153 , it asked the House for a conference, but the House appointed conferees only two days before the end of the session. The conferees did not act on H.R. 3153 . Instead, they agreed to work on revisions to H.R. 11333 , the House-passed Social Security bill, on which the Senate had never acted.", "As part of a compromise reached on December 20, the House conferees agreed to hold a further conference on H.R. 3153 in 1974 to consider additional Senate amendments, but the conference never took place.", "The conference report on H.R. 11333 included a two-step 11% increase in benefits, effective March 1974 and June 1974, raised the wage base to $13,200 in 1974, and increased the initial federal SSI benefit level.", "The Senate passed H.R. 11333 with the amendments agreed to in conference on December 21, 1973, by a vote of 64 to 0.", "The House, on December 21, 1973, concurred in passing the bill by a vote of 301 (123-R, 178-D) to 13 (10-R, 3-D)."], "subsections": []}]}, {"section_title": "P.L. 95-216. The Social Security Amendments of 1977", "paragraphs": ["H.R. 9346 , the Social Security Amendments of 1977, was signed by President Carter on December 20, 1977. H.R. 9346 was passed to meet major Social Security financing problems that emerged in the mid-1970s. The Congressional Quarterly Almanac says that the main cause of the immediate financial problems was the \"combination of rapid inflation and a recession, which together raised Social Security benefit costs and reduced tax receipts.\" In addition to fixing short-run problems, the amendments sought to eliminate the medium-range deficit (over the next 25 years) and to reduce the projected long-range deficit (next 75 years) from more than 8% of taxable payroll to less than 1.5%. The basic approach was to (1) handle the short-term financing problem either through increased payroll taxes or infusions from the general fund; and (2) reduce and possibly eliminate the projected long-run deficit by modifying the benefit formula to stabilize replacement rates.", "Neither house of Congress gave much attention to an Administration proposal to authorize use of general revenues for Social Security during periods of high unemployment (i.e., the so-called counter cyclical use of general revenues). Instead, the new law met the short-run problem mostly by increasing Social Security tax rates and the taxable earnings base and also by somewhat reducing expenditures. The final bill contained \"decoupling\" procedures, which also had been supported by the Ford Administration, for correcting a basic flaw in the benefit computation formula, and thereby largely reduced the long-run problem. P.L. 95-216 also liberalized the earnings test by providing a five-step ad hoc increase in the earnings limits for recipients aged 65 or older (the limit for persons under age 65 continued to be adjusted only for increases in average wages after 1978); eliminated the earnings test for recipients aged 70 or older (reduced from age 72), beginning in 1982; reduced spousal benefits for government annuitants whose government jobs were not covered by Social Security; and liberalized the treatment of divorced and widowed recipients."], "subsections": [{"section_title": "House Action", "paragraphs": ["Legislation that incorporated the Administration's recommendations ( H.R. 8218 ) was introduced on July 12, 1977, by Representative Burke (D-MA), chairman of the House Ways and Means Committee's Social Security Subcommittee. After reworking the Administration's package, the subcommittee made recommendations to the full committee that were introduced by Chairman Ullman (D-OR) on September 27, 1977, as H.R. 9346 . On October 6, 1977, the full committee approved a financing plan combining payroll tax increases with basic changes in benefits and coverage. H.R. 9346 , was reported to the House on October 12, 1977. The House floor debate on H.R. 9346 began on October 26, 1977.", "On October 26, 1977, the House considered an amendment from the Committee on Post Office and Civil Service. The amendment would have deleted the provision in the Ways and Means Committee bill covering federal, state, local, and nonprofit employees under Social Security.", "Representative Fisher (D-VA) offered a substitute for the Post Office and Civil Service Committee amendment. The Fisher substitute provided that federal employees would continue to be exempt from the Social Security system and that state and local governments and nonprofit organizations would continue to have the option of electing to cover their employees. While the amendment deleted mandatory coverage of these employees, the bill retained a provision requiring a study of mandatory coverage to be conducted jointly by the Civil Service Commission, the Departments of Treasury and Health, Education, and Welfare, and the Office of Management and Budget. Many Members endorsed the concept of universal mandatory Social Security coverage, but supporters of the Fisher amendment asserted that a study of the universal coverage issue should be conducted first. Opponents, in contrast, argued that the committee bill, by postponing the extension of coverage until 1982, allowed sufficient time to work out details. To make up for the revenue loss due to deletion of the mandatory coverage provisions, the amendment also provided for greater increases in the Social Security tax rate and wage base than those included in the committee bill. The Administration, as well as representatives of many groups that would have been affected by the coverage extension, lobbied for the Fisher amendment. Representative Fisher's substitute amendment was agreed to by a vote of 386 (129-R, 257-D) to 38 (14-R, 24-D). The House then adopted the Post Office and Civil Service Committee amendment, as amended by the Fisher amendment, by a vote of 380 (124-R, 256-D) to 39 (14-R, 25-D).", "On October 26, 1977, Representative Pickle (D-TX) offered an amendment to strike another committee provision authorizing standby loans to the OASDI system from general revenues whenever trust fund reserves dipped below 25% of a year's outgo. Representative Pickle argued that any use of general treasury funds for Social Security undermined the contributory nature of the program. He remarked that he did not want to see the Social Security program turned into a \"welfare or need program.\" The Pickle amendment was rejected by a vote of 196 (122-R, 74-D) to 221 (15-R, 206-D).", "On October 26, 1977, Representative Corman (D-CA) offered an amendment to eliminate the minimum Social Security benefit for new recipients. He said that the minimum benefit gave those who had paid very little in Social Security taxes a benefit \"far in excess of his or her average monthly wage.\" He stated that his amendment restored \"a measure of the social insurance principle of relating benefits to contributions.\" The amendment was rejected by a vote of 131 (68-R, 63-D) to 271 (64-R, 207-D).", "On October 27, 1977, Representative Ketchum (R-CA) offered an amendment to gradually raise the earnings limitation on recipients over age 65 and to phase it out completely in 1982. The amendment included a tax rate increase to meet the cost of the additional benefit payments. The amendment was adopted by a vote of 268 (139-R, 129-D) to 149 (1-R, 148-D).", "On October 27, 1977, Representative Conable (R-NY) moved to recommit H.R. 9346 to the Ways and Means Committee with instructions to report out the bill with an amendment that mandated coverage of federal workers, diverted half of the HI portion of the payroll tax to OASDI in 1980, and replaced the lost HI revenues with general revenues. Representative Conable argued that an amendment containing the above would enable both the wage base and the tax rate to remain as scheduled under existing law. The recommittal motion was rejected by a vote of 57 (44-R, 13-D) to 363 (97-R, 266-D).", "H.R. 9346 passed the House on October 27, 1977, by a vote of 275 (40-R, 235-D) to 146 (100-R, 46-D)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["Preliminary hearings and markup sessions on financing and decoupling were held by the Senate Committee on Finance in the summer and fall of 1977, even though the House had not yet passed its Social Security bill. Before H.R. 9346 was passed by the House, the Finance Committee had tentatively agreed that its amendments would be attached to H.R. 5322 , an unrelated tariff bill that had originated in the House. H.R. 5322 was to be a convenient vehicle for putting the Senate Finance Committee proposals before the Senate promptly.", "When H.R. 9346 as passed by the House came up for debate on the Senate floor on November 2, 1977, Senator Long (D-LA) introduced an amendment to substitute the Finance Committee Social Security proposals in H.R. 5322 for the House bill. The Finance Committee proposals included decoupling measures similar to those in the House bill. They also included provisions that would require employers to pay Social Security taxes on a higher wage base than employees and would reduce spousal benefits by the amount of a government pension that was based on work not covered by Social Security. Senator Long's amendment was agreed to with no recorded vote. Thus, the text of H.R. 5322 became H.R. 9346 as amended by the Senate.", "On November 3, 1977, Senator Curtis (R-NE) offered an amendment that would have kept the taxable wage base the same for employers and employees (at the level specified for employees in the committee proposal) but would have raised the tax rate above the committee-recommended levels. Senator Curtis said his amendment would take care of the deficit in the Social Security fund. He stated that raising the wage base would put half of the financing burden exclusively on the people with higher incomes.", "Senator Nelson (D-WI) acknowledged that the Curtis amendment would supply the necessary funding to keep the retirement system solvent, but stressed that the average worker would pay a higher tax under the Curtis plan than under the committee proposal. Senator Nelson's motion to table the Curtis amendment lost by a vote of 44 (3-R, 41-D) to 45 (31-R, 14-D), but the Senate then rejected the Curtis amendment, 40 (27-R, 13-D) to 50 (7-R, 43-D).", "On November 4, 1977, Senator Goldwater (R-AZ) offered an amendment to lower the age at which the earnings test would no longer apply from 72 to 65. Senator Goldwater said that his amendment would end the discrimination that allowed full benefits to relatively wealthy retirees who had unearned income in excess of $3,000, but reduced benefits for retirees who relied entirely on additional earned income to supplement their Social Security benefits. Opponents of the amendment said that it would provide a windfall to professionals who continued to work at lucrative jobs past retirement age.", "Senator Church (D-ID offered a substitute amendment to lower from 72 to 70 the age at which the earnings test would no longer apply. Senator Goldwater's motion to table the Church amendment was rejected 33 (25-R, 8-D) to 53 (7-R, 46-D). The Senate adopted the Church substitute amendment 59 (12-R, 47-D) to 28 (20-R, 8-D) and then adopted the Goldwater amendment as amended by the Church substitute by a vote of 79 (30-R, 49-D) to 4 (4-D).", "An amendment offered by Senator Church on November 4, 1977, to provide for semiannual COLAs when the rate of inflation for a six-month period was 4% or greater was adopted by a vote of 50 (11-R, 39-D) to 21 (15-R, 6-D).", "On November 4, 1977, Senator Bayh (D-IN) offered an amendment to remove the earnings limit for blind persons collecting disability benefits and to set the number of quarters blind persons must work to qualify for disability benefit at six. The Bayh amendment was adopted by voice vote.", "The Senate passed H.R. 9346 , as amended, by a vote of 42 (9-R, 33-D) to 25 (15-R, 10-D) on November 4, 1977."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["The conference agreement provided for higher payroll tax rates than those proposed by either the House or Senate. The House-approved authority for loans to the trust funds from general revenues was dropped, as was the Senate-passed proposal to raise the wage base for employers higher than that for employees. Rather than phase out the earnings test, as in the House-passed bill, the conferees agreed to raise, over five years, the earnings tests limit for the elderly (aged 65 or older).", "Despite numerous differences between the House and Senate versions of the bill, the Congressional Quarterly Almanac stated that the conferees resolved their differences \"without trouble.\" The main controversy involved provisions dealing with welfare programs and college tuition tax credits.", "On December 15, 1977, the House agreed to the conference report by a vote of 189 (15-R, 174-D) to 163 (109-R, 54-D). There was unease in the House because of the large tax increases. Representative Conable (R-NY) claimed that more reasonable non-tax alternatives were available.", "On December 15, 1977, Representative Ullman (D-OR) stated that the conference report \"responsibly faces up to the issues of Social Security, both short range and long range.\" He assured Members that he would \"move as expeditiously as possible ... toward adopting a new revenue mechanism whereby we can back off from these major increases.... \"", "On December 15, 1977, the Senate passed the conference report with little controversy by a vote of 56 (17-R, 39-D) to 21 (14-R, 7-D)."], "subsections": []}]}, {"section_title": "P.L. 96-265, Social Security Disability Amendments of 1980", "paragraphs": ["H.R. 3236 , the Social Security Disability Amendments of 1980, was signed by President Carter on June 9, 1980. H.R. 3236 changed the Social Security disability insurance program in four major ways: (1) it placed a new limit on family benefits to prevent Social Security benefits from exceeding the worker's previous average earnings; (2) it provided incentives for recipients to return to work; (3) it required a higher percentage of federal reviews of new disability awards and more frequent periodic state-level reexamination of existing recipients; and (4) it modified the administrative relationship between the federal government and states. The amendments also made similar changes in disability payments under the SSI program and established federal standards for \"medigap\" insurance policies sold by private insurance companies to supplement federal Medicare health insurance."], "subsections": [{"section_title": "House Action", "paragraphs": ["The House Ways and Means Committee's Subcommittee on Social Security held public hearings in February and March 1979. Following these hearings, the subcommittee held markup sessions on H.R. 2854 , the Administration's proposals, and incorporated its recommendations into H.R. 3236 , which was introduced on March 27, 1979. After considering the subcommittee's recommendations, the full Committee on Ways and Means reported the bill to the House on April 23, 1979. Action on the bill was delayed as several major groups raised questions about the legislation, and controversy arose as to the rules under which the bill would be considered on the House floor. Many of the interested parties wanted an opportunity to consider several of the provisions separately when H.R. 3236 was considered on the floor, rather than to vote for or against the bill as a whole. The Rules Committee held hearings on June 6 and 7, 1979, and reported out on June 7, 1979, H.Res. 310 , which provided for a modified rule and one hour of debate on H.R. 3236 . The rule provided that the only amendments that would be in order would be those recommended by the Ways and Means Committee (which were not amendable) and an amendment offered by Representattive Simon (D-IL) that would delay the implementation of a provision affecting vocational rehabilitation funding by one year. Despite the passage of the rule, \"the opposition coalition was able to block floor consideration of the measure for 3 months.\" Floor debate on H.R. 3236 did not begin until September 6, 1979.", "On September 6, 1979, the House agreed to the Ways and Means Committee and Representative Simon's amendments and passed H.R. 3236 by a vote of 235 (108-R, 127-D) to 162 (36-R, 126-D)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["In October 1979, the Senate Finance Committee held hearings on proposed disability legislation. The committee completed its markup on November 7, 1979, and reported H.R. 3236 to the Senate on November 8, 1979. On December 5, 1979, the Senate began floor debate. Final debate, which occurred in late January 1980, centered primarily on the provision to establish a lower limit on family benefits.", "On January 30, 1980, Senator Metzenbaum's (D-OH) amendment to increase the limit on disability benefits from 85% to 100% of the worker's previous average earnings was defeated by a vote of 47 (7-R, 40-D) to 47 (31-R, 16-D).", "On January 30, 1980, Senator Bayh (D-IN) offered an amendment to exempt terminally ill applicants from the waiting period. The amendment was limited to people who, in the opinion of two doctors, would probably die within a year. Senator Bayh said it was cruel to deny assistance to desperately ill people on the basis of an arbitrary waiting period that lasted longer than most of them were likely to live.", "Senator Long (D-LA) said elimination of the waiting period for one group would eventually lead to its elimination for all disabled persons, at a cost of $3 billion a year. Senator Long also argued that the amendment was not germane because there was nothing in the bill relating to the waiting period for benefits. The amendment was ruled out of order but the Senate voted 37 (19-R, 18D) to 55 (17-R, 38-D) against the ruling of the chair and then adopted the Bayh amendment by a vote of 70 (25-R, 45-D) to 23 (12-R, 11-D).", "On January 31, 1980, the Senate passed H.R. 3236 , with amendments, by a vote of 87 (35-R, 52-D) to 1 (1-D)."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["On May 13, 1980, the conference committee reported the bill. On the key issue of limiting future family benefits, the conferees combined the Senate limit of 85% of the worker's previous average work earnings and the House provision limiting benefits to no more than 150% of the worker's basic individual benefit. The conferees also made a modification to the medigap provision (added by the Senate) and dropped the Senate amendment regarding the waiting period for the terminally ill, calling for a study of the issue instead.", "On May 22, 1980, the House passed H.R. 3236 , as agreed to by the conferees, by a vote of 389 (147-R, 242-D) to 2 (2-D).", "On May 29, 1980, the Senate passed the conference report on H.R. 3236 by a voice vote."], "subsections": []}]}, {"section_title": "P.L. 96-403, Reallocation of OASI and Dl Taxes", "paragraphs": ["On October 9, 1980, H.R. 7670 , the Reallocation of Social Security Taxes Between OASl and Dl Trust Funds, was signed into law by President Carter. Although the Social Security Amendments of 1977 did, in part, remedy the program's financing problems, high inflation increased Social Security benefits and higher than expected unemployment reduced income to the trust funds. The outlook for the OASI program, in particular, was deteriorating fairly rapidly. H.R. 7670 shifted revenues from the Disability Insurance Trust Fund to the Old-Age and Survivors Trust Fund during 1980 and 1981 so that adequate reserves could be maintained in both trust funds at least through the end of calendar year 1981."], "subsections": [{"section_title": "House Action", "paragraphs": ["On July 21, 1980, Representative Pickle (D-TX) moved to suspend the rules and pass H.R. 7670 . In his remarks, Representative Pickle said that \"the bill we bring today is a deliberate step both to insure the stability of the trust funds and to provide the Congress the time it will need to make any further changes necessary.\" He also stated that \"Reallocation, the mechanism used in H.R. 7670 , has been the traditional way of redistributing the OASDI tax rates when there have been changes in the law and in the experience of programs and in order to keep all the programs on a more or less even reserve ratio.... Reallocation means that the formula for allocating the incoming payroll tax receipts is changed in the law so that funds will flow into the various funds in a different mix than currently projected.\"", "On July 21, 1980, the House suspended the rules and passed H.R. 7670 . There was no roll call vote."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On September 25, 1980, H.R. 7670 was passed by unanimous consent."], "subsections": []}]}, {"section_title": "P.L. 96-473, Retirement Test Amendments277", "paragraphs": ["On October 19, 1980, H.R. 5295 was signed by President Carter. It made various changes in the earnings test provisions enacted in 1977 and limited the circumstances under which Social Security benefits could be paid to prisoners. Before enactment of P.L. 96-473 , two earnings tests applied to Social Security benefits. One was an annual test, the other a monthly test. If a recipient earned more than the annual limit, benefits were reduced $1 for every $2 of excess earnings until all Social Security benefits were withheld. Under the monthly earnings test, however, if a person's earnings were less than one-twelfth of the annual amount, he or she could get full benefits for that month, regardless of annual earnings. The 1977 provision eliminating the monthly earnings test was designed with retirees in mind. However, the language as enacted applied to all classes of recipients affected by the earnings limitation. Generally, these recipients are likely to get a job and have substantial earnings in the year their benefits end. If these earnings were over the annual earnings limitation, some of the benefits they already received in the year become overpayments and had to be repaid. P.L. 96-473 modified this by allowing individuals who received certain dependents' benefits (a child or student's benefit, mother's benefit, or father's benefit) to use the monthly earnings test in the year in which their entitlement to such benefits ended. P.L. 96-473 also allowed all recipients to qualify for at least one \"grace year\" in which the monthly earnings test applies and made other changes relating to the earnings test for the self-employed, particularly those whose incomes were often in \"deferred\" forms.", "In addition, P.L. 96-473 prohibited payment of Social Security disability insurance benefits or of student benefits (based on any kind of Social Security status) to prisoners convicted of a felony, except where the individual is participating in a court-approved rehabilitation program (but allowed benefits to be paid to their dependents); disallowed impairments that arise from or are aggravated by the commission of a crime to be considered in determining whether a person is disabled; and disallowed impairments developed while an individual is in prison to be considered in determining disability while the person remains in prison."], "subsections": [{"section_title": "House Action", "paragraphs": ["On July 23, 1979, the House Ways and Means Committee's Subcommittee on Social Security held a hearing on the Social Security earnings test. In the spring of 1980, Congress also was concerned with the issue of paying Social Security benefits to prisoners. The Subcommittee on Social Security held hearings on the subject, and numerous bills prohibiting payments to prisoners were introduced.", "On December 19, 1979, Senator Long (D-LA) in discussing the earnings test as amended by the 1977 amendments said, \"The purpose of the change was to simplify the test and make more evenhanded the treatment of those who had similar amounts of annual earnings but differences in monthly work patterns. Several categories of recipients have been experiencing unforeseen problems with the new annual earnings test, however, and have been disadvantaged by it. H.R. 5295 is designed to correct those inequities.\"", "On December 19, 1979, H.R. 5295 , as amended, was passed unanimously by the House, 383 to\u00a00."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On April 21, 1980, the Senate Finance Committee's Subcommittee on Social Security held a hearing on the Social Security earnings test. During the spring of 1980, the subcommittee also held hearings on the subject of denying Social Security benefits to prisoners. When S. 2885 , the 1981 Budget Reconciliation bill, was reported out of the Senate Finance, it included a provision that prohibited payment of Social Security disability benefits to prisoners convicted of crimes. The Finance Committee also included this measure in H.R. 5295 .", "On September 30, 1980, the Senate passed H.R. 5295 , with amendments, by unanimous consent."], "subsections": []}, {"section_title": "House Concurrence", "paragraphs": ["On October 1, 1980, Representative Conable (R-NY) remarked \"The only amendment that we are asking to be attached here that goes to the Senate is an amendment that changes the word 'crime' to the words 'crime in the nature of a felony,' so that it would apply only to more serious crimes and not possibly to traffic infractions and things of that sort.\"", "On October 1, 1980, the House concurred in the Senate amendments with an amendment by unanimous consent."], "subsections": []}, {"section_title": "Senate Concurrence", "paragraphs": ["On October 1, 1980, Senator Byrd's motion that the Senate concur with the House amendment to the Senate amendment was agreed to by voice vote."], "subsections": []}]}, {"section_title": "P.L. 97-35, Omnibus Budget Reconciliation Act of 1981", "paragraphs": ["H.R. 3982 , the Omnibus Budget Reconciliation Act of 1981, was signed into law ( P.L. 97-35 ) by President Reagan on August 13, 1981. It included most of the Social Security changes proposed as part of the President's 1982 budget, as well as some added by the House. The Social Security provisions were among many outlay reduction measures intended to constrain federal expenditures. The Administration argued that the benefits it targeted for elimination or reduction were not directed at the basic goals of the program, and it did not consider them to have been \"earned.\" The budget proposals eliminated the minimum Social Security benefit for both current and future recipients, phased out benefits for students in postsecondary schools (aged 18 or older, except for those under aged 19 still in high school), made lump-sum death benefits available only to a spouse who was living with the worker or a spouse or child eligible for immediate monthly survivor benefits, and reduced benefits for those whose Social Security disability payments and certain other public pensions exceed 80% of pre-disability earnings. The amendments also eliminated reimbursement of the cost of state vocational rehabilitation services from the trust funds except where it could be shown that the services had resulted in the disabled person leaving the rolls; postponed the lowering of the earnings test exempt age (from 72 to 70) until 1983; ended parents' benefit when the youngest child reaches age 16; and provided that workers and their spouses would not receive benefits unless they meet the requirements for entitlement throughout the month. These last three provisions were initiatives added by the Ways and Means Committee."], "subsections": [{"section_title": "Senate Action287", "paragraphs": ["Because the Social Security legislation was considered in the context of the budget and reconciliation processes, there was virtually simultaneous consideration of the proposals by the House and the Senate. After final adoption on May 21, 1981, of the First Concurrent Budget Resolution, both the House and the Senate were acting within similar reconciliation guidelines.", "On June 10, 1981, the Finance Committee reported its recommendations for spending reductions. These were included by the Senate Budget Committee in S. 1377 , the Omnibus Budget Reconciliation Act of 1981, which was reported by the Budget Committee to the Senate on June 17, 1981. The Social Security proposals included in S. 1377 were basically those proposed by the Administration with some minor modifications.", "On June 22-25, 1981, the Senate debated S. 1377 . The most controversial aspect of the bill relating to the Social Security program was the elimination of the minimum benefit for people already on the benefit rolls. On June 23, 1981, Senator Riegle (D-MI) offered an amendment that would have eliminated the minimum benefit only for future recipients. The amendment was defeated by a vote of 45 (4-R, 41-D) to 53 (48-R, 5-D).", "On June 25, 1981, the Senate passed S. 1377 , with the Finance Committee's Social Security proposals, by a vote of 80 (52-R, 28-D) to 15 (0-R, 15-D)."], "subsections": []}, {"section_title": "House Action", "paragraphs": ["The Ways and Means Committee recommendations, while touching on some of the same benefit categories as the Administration's proposals, were notably different. These proposals were incorporated by the Budget Committee into its version of the Omnibus Budget Reconciliation Act of 1981, H.R. 3982 , which was reported to the House on June 19, 1981.", "The adoption of the rule for floor consideration of H.R. 3982 became, in itself, a highly controversial issue. The Democratic leadership argued for allowing six separate votes on the grounds that this would allow for greater accountability for individual Members and avoid criticisms of \"rubber-stamping\" the Administration's proposals. A bipartisan group of Members (generally supported by the Administration) argued instead for a rule that allowed only an up-or-down vote on a substitute for the Budget Committee bill sponsored by Representative Gramm (D-TX) and Representative Latta (R-OH). Those arguing for the substitute said it would facilitate future conference agreement by bringing H.R. 3982 more closely in line with the President's original proposals and with S. 1377 then pending in the Senate.", "On June 25, 1981, the original rule for floor consideration of the bill was defeated by a vote of 210 (1-R, 209-D) to 217 (188-R, 29-D).", "A package of amendments by Representative Latta, the so-called Gramm-Latta II alternative, called for (1) deleting the Ways and Means' proposal to move the COLA from July to October and (2) changing the effective date of the Senate-passed minimum benefit proposal, affecting both current and future recipients, and (3) modifying the Senate-passed student benefit phase-out proposal (which contained a faster phase-out than the Ways and Means Committee version). The Gramm-Latta II alternative package passed the House on June 26, 1981, by a vote of 217 (188-R, 29-D) to 211 (2-R, 209-D).", "On June 26, 1981, the House passed the Omnibus Budget Reconciliation Act of 1981 by a vote of 232 (185-R, 47-D) to 193 (5-R, 188-D)."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["The passage of the alternative budget package resulted in House-passed Social Security measures that were very similar to the Administration's original proposals and to those in the Senate-passed reconciliation bill. On July 13, 1981, the Senate voted to substitute the reconciliation proposals from S. 1377 for those passed by the House in H.R. 3982 and to go to conference to resolve the differences.", "On July 30, 1981, Representative Bolling (D-MO), chairman of the House Rules Committee, threatened to prevent the conference agreement from being brought to the House floor for final approval until something could be negotiated to modify the minimum benefit provision. An agreement was worked out permitting a bill that would modify the minimum benefit provision to be brought to the House floor before the vote on the reconciliation conference report. This bill was H.R. 4331 , the Social Security Amendments of 1981. (See following section for further details.)", "On July 31, 1981, both the House and the Senate approved the conference report on the 1981 Budget Reconciliation bill, the House by a voice vote and the Senate by a vote of 80 (49-R, 31-D) to 14 (1-R, 13-D)."], "subsections": []}]}, {"section_title": "P.L. 97-123, Social Security Amendments of 1981", "paragraphs": ["H.R. 4331 , the Social Security Amendments of 1981, was signed by President Reagan on December 29, 1981. The amendments restored the minimum benefit for current recipients but eliminated it for people becoming eligible for benefits after December 31, 1981 (see discussion of P.L. 97-35 above). In July 1981, as part of P.L. 97-35 , Congress had enacted the elimination of the minimum benefit effective in April 1982. However, the public outcry was so great that both houses and the Administration thought it prudent to reconsider the measure. H.R. 4331 also allowed the financially troubled OASI trust fund to borrow from the healthier disability insurance and hospital insurance trust funds until December 31, 1982. The law specified that the borrowing could not exceed amounts needed to pay full benefits for six months and provided for repayment of any amounts borrowed. OASI borrowed $17.5 billion from the two trust funds late in December 1982, an amount limited to that necessary to keep benefits flowing until June 1983.", "In addition, the bill (1) allowed members of religious orders who had taken a vow of poverty and were covered by Social Security before enactment of the bill to continue to become eligible for the minimum benefit during the next 10 years; (2) extended the payroll tax to the first six months of sick pay; (3) made it a felony to alter or counterfeit a Social Security card; and (4) allowed the Department of Health and Human Services (DHHS) access to recorded Social Security numbers to prevent ineligible prisoners from receiving disability benefits."], "subsections": [{"section_title": "House Action", "paragraphs": ["On July 21, 1981, the House, by a vote of 405 (176-R, 229-D) to 13 (10-R, 3-D), adopted a nonbinding resolution ( H.Res. 181 ) urging that steps be taken \"to ensure that Social Security benefits are not reduced for those currently receiving them.\" After the conference report on the reconciliation bill was filed, the House Rules Committee Chairman Richard Bolling (D-MO) held up the reconciliation bill in his committee in an effort to restore the minimum benefit. An agreement was subsequently reached whereby the budget bill would be reported out of the Rules Committee intact, and a separate bill to restore the minimum benefit for all current and future recipients ( H.R. 4331 ) would be taken up by the House before the vote on the budget bill. The House passed H.R. 4331 on July 31, 1981. It repealed the section of P.L. 97-35 that eliminated the minimum benefit, thereby reinstating the minimum benefit for current and future recipients.", "On July 31, 1981, the House passed H.R. 4331 by a vote of 404 (172-R, 232-D) to 20 (17-R, 3-D)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["When H.R. 4331 was sent to the Senate, Senators Riegle (D-MI), Moynihan (D-NY), and Kennedy (D-MA) moved to have the Senate immediately consider it. The Senate's presiding officer ruled the motion out of order, and the ruling was upheld by a vote of 57 to 30, thereby permitting consideration of the bill by the Finance Committee and delaying a Senate vote until October.", "The bill reported by the Finance Committee in September 1981 included provisions that restored the minimum benefit for current recipients, except for those with government pensions, whose so-called windfall Social Security benefits would be reduced dollar for dollar by the extent their government pension exceeded $300 a month. The bill provided that members of religious orders who became eligible for Social Security in 1972 could remain eligible for the minimum benefit for the next 10 years. To offset the cost of restoring the minimum benefit, the Senate agreed to apply the payroll tax to the first six months of all sick pay received and to lower the maximum family retirement and survivor benefit to 150% of the worker's primary insurance amount (PIA). The bill also allowed interfund borrowing.", "On October 14, 1981, the Senate by a voice vote agreed to (1) Senator Danforth's (R-MO) amendment to override provisions of the federal Privacy Act to allow access to prison records so that disability payments to ineligible inmates could be stopped; and (2) Senator Baucus's (D-MT) amendment to make it a felony to alter or counterfeit a Social Security card.", "On October 15, 1981, Senator Dole's (R-KS) amendment to apply the Social Security payroll tax to the first six months of all employer-financed sick pay, except that paid as insurance, was accepted by voice vote.", "On October 15, 1981, Senator Moynihan's (D-NY) amendment requiring counterfeit-proof Social Security cards was agreed to by voice vote.", "On October 15, 1981, Senator Eagleton (D-MO) offered an amendment to repeal a provision of the Economic Recovery Tax Act of 1981 ( P.L. 97-34 ) that had reduced windfall profit taxes on newly discovered oil, and then use these tax savings to build an emergency reserve for the Social Security trust funds. The amendment was tabled 65 (42-R, 23-D) to 30 (7-R, 23-D).", "On October 15, 1981, by a unanimous vote of 95 (48-R, 47-D) to 0, the Senate passed H.R. 4331 , as amended."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["The Congressional Quarterly Almanac states that the major dispute of the conference was whether to pay for the cost of restoring the minimum benefit by tax increases or by benefit cuts. The conferees finally agreed to accept only the sick pay tax \"on the condition that inter-fund borrowing be allowed for just one year.\" The conference agreement restored the minimum benefit to recipients eligible for benefits before 1982, and it rejected the Senate provisions (1) to reduce the minimum for those also receiving government pensions above $300 per month and (2) to limit further family benefits in OASI cases.", "The Senate agreed to the conference report on December 15, 1981, by a vote of 96 (50-R, 46-D) to 0.", "The House agreed to the conference report on December 16, 1981, by a vote of 412 (181-R, 231-D) to 10 (7-R, 3-D)."], "subsections": []}]}, {"section_title": "P.L. 97-455, An Act Relating to Taxes on Virgin Island Source Income and Social Security Disability Benefits", "paragraphs": ["President Reagan signed H.R. 7093 on January 12, 1983. In March 1981, the Administration began implementing the continuing disability investigation process mandated (beginning in 1982) under the 1980 amendments ( P.L. 96-265 ), with the result that thousands of recipients lost their benefits, although many were restored upon appeal to an administrative law judge. P.L. 97-455 was a \"stopgap\" measure to remedy some of the perceived procedural inequities in the disability review process. It provided, temporarily, an opportunity for individuals dropped from the rolls before October 1, 1983, to elect to receive DI and Medicare benefits while they appealed the decision; June 1984 was to be the last month for which such payments could be made. The DI benefits would have to be repaid if the appeal were lost. The measure also required the DHHS to provide, as of January 1, 1984, face-to-face hearings during reconsideration of any decision to terminate disability benefits. Previously, recipients did not have such a meeting until they appeared before an administrative law judge. The bill also required the Secretary to report to Congress semiannually on the rate of continuing disability reviews and terminations and gave the Secretary authority to decrease the number of disability cases sent to state agencies for review."], "subsections": [{"section_title": "Senate Action314", "paragraphs": ["On September 28, 1982, the Finance Committee marked up S. 2942 , which contained a number of continuing disability review provisions. The chairman, Senator Dole (R-KS), asked that S. 2942 be attached to a House-passed bill ( H.R. 7093 ) dealing with Virgin Islands taxation. Thus, H.R. 7093 , with provisions of S. 2942 , was reported to the Senate on October 1, 1982.", "On December 3, 1982, Senator Heinz (R-PA) said, \"... this emergency legislation does not completely solve the problem of the unfair terminations of hundreds of thousands of disabled individuals ... nonetheless. It means that in the immediate future, at least, individuals who have been wrongly terminated will not be financially ruined because they have been deprived of their benefits during a lengthy appeals process.\"", "On December 3, 1982, the Senate passed H.R. 7093 by a vote of 70 (43-R, 27-D) to 4 (1-R, 3-D)."], "subsections": []}, {"section_title": "House Action", "paragraphs": ["On September 20, 1982, the House passed H.R. 7093 by voice vote. This version of the bill contained no Social Security provisions.", "On December 14, 1982, the House amended the Senate-passed version of H.R. 7093 and passed it by unanimous consent. H.R. 7093 was then sent back to the Senate for consideration of the added amendments. These amendments required the Secretary to (1) provide face-to-face hearings during reconsideration of any decision to terminate disability benefits; (2) advise recipients of what evidence they should bring to and what procedures they should follow at the reconsideration hearing; and (3) provide that, for a five-year period beginning December 1, 1982, only one-third of a spouse's government pension would be taken into account when applying the government pension offset provision enacted in 1977."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["The bill as agreed to by the conferees was identical to the House-passed bill, except for the modification in the government pension offset provision.", "The House passed the conference report on H.R. 7093 on December 21, 1982, by a vote of 259 (115-R, 144-D) to 0.", "The Senate passed the report by a voice vote on December 21, 1982."], "subsections": []}]}, {"section_title": "P.L. 98-21, The Social Security Amendments of 1983", "paragraphs": ["H.R. 1900 , the Social Security Amendments of 1983, was signed by President Reagan on April 20, 1983. The latest projections showed that the OASDI program was projected to run out of funds by mid-1983 and to need about $150 billion to $200 billion to provide reasonable assurance that it would remain solvent for the rest of the decade. Once this short-run problem was addressed, the program was projected to be adequately financed for about 35 years. However, beginning about 2025, the effects of the retirement of the baby-boom were projected to plunge the system into deficit again. The National Commission on Social Security Reform, a bipartisan panel appointed by President Reagan and congressional leaders, was formed to seek a solution to the system's financing problems. On January 15, 1983, a majority of the commission members reached agreement on a package of changes.", "Conforming to most of the recommendations in the commission's package, the 1983 amendments put new federal employees and all nonprofit organization employees under the OASDI program as of January 1, 1984; prohibited state and local and nonprofit agencies from terminating Social Security coverage; moved the annual cost-of-living adjustments in benefits from July to January of each year (which caused a delay of six months in 1983); made up to one-half of the benefits received by higher income recipients subject to federal income taxation; gradually raised the full benefit retirement age from 65 to 67 early in the 21 st century; increased benefits for certain groups of widow(er)s; liberalized the earnings test; increased the delayed retirement credit; reduced benefits for workers also getting pensions based on noncovered employment; called for the earlier implementation of scheduled payroll tax increases; and substantially raised payroll tax rates on the self-employed. P.L. 98-21 also stipulated that beginning with the FY1993 budget, income and expenditures for OASDI and HI would no longer be included in federal budget totals. The 1983 amendments also stipulated that only two-thirds of a spouse's government pension would be taken into account when applying the government pension offset provision, eliminated remaining gender-based distinctions, and made numerous additional technical changes in the law."], "subsections": [{"section_title": "House Action", "paragraphs": ["On March 4, 1983, the Ways and Means Committee reported out H.R. 1900 . The bill included most of the recommendations of the National Commission, numerous additional relatively minor Social Security provisions, and other measures mostly related to long-run financing issues, along with provisions affecting the Medicare and Unemployment Insurance programs.", "On March 9, 1983, the House debated H.R. 1900 . Proponents of the bill maintained that, although there were many provisions that individuals or certain groups might find troublesome, there was an overriding need to deal quickly and effectively with the Social Security financing issues. Opponents questioned whether this was the best way to solve the system's projected financial difficulties. Many favored raising the retirement age instead of increasing payroll taxes.", "On March 9, 1983, Representative Pickle's (D-TX) amendment calling for increases in the age at which \"full\" retirement benefits (i.e., unreduced for early retirement) are payable to 66 by 2009 and to 67 by 2027 was approved by a vote of 228 (152-R, 76-D) to 202 (14-R, 188-D). Early retirement at age 62 would be maintained but at 70% of full benefits (instead of 80%) after the \"full retirement age\" reached 67.", "Representative Pepper (D-FL) then offered a substitute amendment to raise the OASDI tax rate from 6.20% to 6.73% beginning in 2010. The amendment was rejected by a vote of 132 (1-R, 131-D) to 296 (16-R, 131-D). Had the amendment passed, it would have superseded Representative Pickle's amendment.", "The House passed H.R. 1900 , as it had been amended, by a vote of 282 (97-R, 185-D) to 148 (69-R, 79-D) on March 9, 1983."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["The Senate Finance Committee reported out S. 1 on March 11, 1983. As with the House bill, the committee adopted long-term financing measures along the lines of the recommendations of the National Commission and provisions affecting the Medicare and Unemployment Insurance programs.", "The full Senate began consideration of H.R. 1900 on March 16, 1983. Seventy-two amendments were offered to the bill on the floor; the Senate adopted 49 of them. The following were among the major amendments debated.", "On March 23, 1983, Senator Long (D-LA) offered an amendment to make coverage of newly hired federal employees contingent upon enactment of a supplemental civil service plan for them. It was passed by a voice vote.", "An amendment to the Long amendment by Senator Stevens (R-AL) and Senator Mathias (R-MD) to exclude federal workers from coverage altogether was rejected by a vote of 12 (8-R, 4-D) to 86 (46-R, 40-D) on March 23, 1983.", "Senator Stevens's amendment to the Long amendment to require the creation of a supplemental civil service retirement program by October 1985, while granting new employees wage credits toward such a plan in the meantime, was rejected 45 (41R, 4-D) to 50 (12-R, 38-D) on March 23, 1983.", "The Senate passed H.R. 1900 on March 23, 1983, by a vote of 88 (47-R, 41-D) to 9 (6-R, 3-D)."], "subsections": []}, {"section_title": "Conference Action329", "paragraphs": ["On March 24, 1983, conferees agreed to the final provisions of H.R. 1900 . The primary issue was how to solve the system's long-run financial problems. The House measure called for a two-year increase in the retirement age, whereas the Senate bill proposed to increase the retirement age to 66, eliminate the earnings test, and cut initial benefit payments 5%. Another major difference was a provision in the Senate bill delaying coverage of new federal employees until a supplemental civil service retirement plan could be developed. House conferees charged that if the change were made, no revenues from the proposed coverage could be counted on for the Social Security bailout plan because, if such a plan were not subsequently developed, federal workers might escape coverage altogether.", "The conferees agreed to the House retirement age change. Senate conferees then agreed to recede on the federal employee coverage issue.", "On March 24, 1983, the House passed the conference report by a vote of 243 (80-R, 163-D) to 102 (48-R, 54-D).", "On March 25, 1983, the Senate passed H.R. 1900 , as agreed to in the conference report, by a vote of 58 (32-R, 26-D) to 14 (8-R, 6-D)."], "subsections": []}]}, {"section_title": "P.L. 98-460, Social Security Disability Benefits Reform Act of 1984", "paragraphs": ["On October 9, 1984, President Reagan signed H.R. 3755 , the Social Security Disability Benefits Reform Act of 1984. P.L. 98-460 ended three years of controversy over the Administration's efforts to rid the DI program of ineligible recipients through an expanded periodic review process. The expanded reviews had been authorized by the 1980 disability amendments.", "Shortly after implementation of periodic review, the public and Congress began to criticize the process. The major complaints were the large number of persons dropped from the Dl rolls, of whom many had been receiving benefits for years and had not expected their cases to be reviewed; the great increase in the number of cases subjected to continuing disability reviews; and the number of cases in which recipients were erroneously dropped from the rolls. More than half of those removed from the rolls were reinstated upon appeal, fueling complaints that many terminations were unjustified. Advocacy groups for the disabled raised questions about the Social Security Administration's termination policies and procedures and petitioned Congress for legislative relief. In addition, concerns about the disability process were raised by the federal courts and the states.", "P.L. 98-460 provided that (1) with certain exceptions, benefit payments can be terminated only if the individual has medically improved and can engage in substantial gainful activity; (2) benefit payments can be continued until a decision by the administrative law judge in cases where a termination of benefits for medical reasons is being appealed; (3) reviews of all mental impairment disabilities be delayed until regulations stipulating new medical listings for mental impairments are published; (4) in cases of multiple impairments, the combined effect of all the impairments must be considered in making a disability determination; (5) the DHHS Secretary initiate demonstration projects providing personal appearance interviews between the recipient and state agency disability examiner in potential termination cases and potential initial denials; (6) the Secretary issue uniform standards, binding at all levels of adjudication, for disability determinations under Social Security and SSI disability; (7) the Secretary federalize disability determinations in a state within six months of finding that a state is not in substantial compliance with federal laws and standards; and (8) the qualifications of representative payees be more closely examined, and that the Secretary establish a system of annual accountability monitoring where benefit payments are made to someone other than a parent or spouse living in the same household with the recipient. It also established a temporary statutory standard for the evaluation of pain and directed that a study of the problem of evaluating pain be made by a commission to be appointed by the Secretary."], "subsections": [{"section_title": "House Action", "paragraphs": ["On March 14, 1984, the House Committee on Ways and Means reported H.R. 3755 with amendments.", "During debate on H.R. 3755 , Representative Conable (R-NY) remarked that the intent of the 1980 legislation, requiring continuing disability reviews, was meritorious, but the results were not what the drafters intended. He further stated, \"Not only were ineligible recipients terminated, but some eligible recipients were taken from the rolls, as well. Many, especially those with mental impairments, suffered duress and the economic hardship of interrupted benefits.\" Representative Conable also said, \"Both Congress and the administration have taken remedial steps ... we approved P.L. 97-455 , which, on an interim basis, provided for the continuation of benefits during an appeal of an adverse decision ... H.R. 3755 represents the next step.\"", "The sponsor of H.R. 3755 , Representative Pickle (D-TX), said, \"In the past 3 years nearly half a million disabled recipients have been notified that their benefits will end. Far too often this notice has been sent in error, and corrected only at the recipient's expense ... we who serve on the Social Security Subcommittee have heard those pleas from the disabled, from Governors, and from those who must administer this program in the states ... for over a year now we have carefully drafted legislation to bring order to the growing chaos ... This bill does not attempt to liberalize the disability program. It does restore order and humanity to the disability review process.\"", "On March 27, 1984, the House passed H.R. 3755 by a vote of 410 (160-R, 250-D) to 1 (1-R)."], "subsections": []}, {"section_title": "Administrative Action", "paragraphs": ["Six months before legislation was enacted, Secretary Heckler imposed a moratorium on periodic continuing disability reviews. The Secretary said,", "Although we have made important progress in reforming the review process with Social Security, the confusion of differing court orders and state actions persists. The disability program cannot serve those who need its help when its policies are splintered and divided. For that reason, we must suspend the process and work together with Congress to regain order and consensus in the disability program."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On May 16, 1984, the Finance Committee approved S. 476 . Major provisions of the bill allowed disabled persons to continue collecting Social Security benefits if their medical condition had not improved since they were determined disabled. The major difference between the medical improvement provision in S. 476 and H.R. 3755 was that the Senate bill stated that the recipient bore the burden of proof that his or her condition had not improved.", "On May 22, 1984, Senator Cohen (R-ME), one of the sponsors of S. 476 , said, \"The need for fundamental change in the disability reviews has been evident for some time. Since the reviews began, more than 12,000 individuals have filed court actions challenging the SSA's termination of their benefits. An additional 40 class action suits had been filed as of last month. The legislation before the Senate today would end this chaos and insure an equitable review process.\"", "Senator Levin (D-MI), another sponsor, said, \"It has taken us 3 years to come to grips with the problems in the disability review process as a legislative body. And while it was long in coming, I am pleased with the final outcome. The bill I, along with Senator Cohen and others introduced on February 15, 1983, S. 476 , as reported by the Finance Committee contains the essential ingredients to the development of a fair and responsible review process.\"", "On May 22, 1984, the Senate passed H.R. 3755 , after substituting the language of S. 476 for the House-passed version, 96 (52-R, 44-D) to 0."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["On September 19, 1984, the conferees filed the conference report. The conference committee generally followed the House version of the medical improvement standard (with some modifications) and added the requirement that any continuing disability review be made on the basis of the weight of the evidence with regard to the person's condition.", "On September 19, 1984, the House and Senate passed H.R. 3755 unanimously; 402 to 0 in the House, and 99 to 0 in the Senate."], "subsections": []}]}, {"section_title": "P.L. 99-177, Public Debt Limit\u2014Balanced Budget and Emergency Deficit Control Act of 1985", "paragraphs": ["The Balanced Budget and Emergency Deficit Control Act, which was included as Title II of H.J.Res. 372 , increasing the national debt, was signed by President Reagan on December 12, 1985. The act stipulated that budget deficits must be decreased annually, and under certain circumstances required across-the-board cuts of nonexempt programs by a uniform percentage to achieve this result. Under the act, if annual deficit amounts were larger than the law established, a formula would be used to reduce the deficit annually until it reached zero in FY1991. This part of P.L. 99-177 is generally referred to by the names of its sponsors\u2014Senators Gramm (R-TX), Rudman (R-NH), and Hollings (D-SC). The Gramm-Rudman-Hollings Act accelerated the \"off-budget\" treatment of OASDI, as prescribed by P.L. 98-21 , from FY1993 to FY1986. (However, Social Security income and outgo still would be counted toward meeting Gramm-Rudman-Hollings deficit reduction targets.) The HI trust fund was not affected (i.e., not to be separated from the budget until FY1993). In addition, the act exempted Social Security benefits (including COLAs) from automatic cuts and required the Secretary of the Treasury to restore to the trust funds any interest lost as a result of 1984 and 1985 debt ceiling constraints, and to issue to the trust funds obligations bearing interest rates and maturities identical to those of securities redeemed between August 31, 1985, and September 30, 1985."], "subsections": [{"section_title": "House Action", "paragraphs": ["On August, 1, 1985, the House approved the debt-limit increase, unamended, as part of the FY1986 budget resolution ( S.Con.Res. 32 ) by a vote of 309 (127-R, 182-D) to 119 (52-R, 67-D)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On October 9, 1985, the Senate adopted the Gramm-Rudman-Hollings amendment to H.J.Res. 372 (Balanced Budget and Emergency Control Act of 1985) by a vote of 75 (48-R, 27-D) to 24 (4-R, 20-D).", "On October 10, 1985, the Senate passed H.J.Res. 372 , with amendments, by a vote of 51 (38-R, 13-D) to 37 (8-R, 29-D)."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["On November 1, 1985, the conference report was filed in disagreement. The House asked for another conference on November 6, 1985, the Senate agreeing on November 7, 1985. The second conference report was filed on December 10, 1985.", "On December 11, 1985, both the House and the Senate agreed to the conference report, the House by a vote of 271 (153-R, 118-D) to 154 (24-R, 130-D) and the Senate by a vote of 61 (39-R, 22-D) to 31 (9-R, 22-D)."], "subsections": []}]}, {"section_title": "S.Con.Res. 32, Proposed COLA Constraints in FY1986 Budget Resolution", "paragraphs": ["In 1985, the Senate voted to skip the 1986 COLA for various federal programs, including Social Security, when it passed S.Con.Res. 32 , the first concurrent budget resolution for FY1986. However, the House-passed version had no COLA freeze, and the proposal was dropped in conference.", "In his FY1986 Budget submitted in January 1985, President Reagan proposed that there be no COLA for several federal benefit programs, among them civil service and military retirement, in 1986. However, Social Security was exempted from the proposal. In considering S.Con.Res. 32 , the first concurrent budget resolution for FY1986 (which involves the goal-setting stage of the congressional budget process) on March 14, the Senate Budget Committee, by a vote of 11 (11-R, 0-D) to 10 (0-R, 10-D) added Social Security to the list of programs whose COLAs were to be skipped in 1986. The Social Security portion of the COLA \"freezes,\" as they were called, was estimated to yield $22 billion in savings over the FY1986-FY1988 period and larger savings thereafter. An alternative COLA cutback proposal emerged shortly thereafter, as part of a substitute deficit-reduction package developed by the Administration and the Senate Republican leadership. Instead of freezing COLAs in the affected federal retirement programs for one year, it would have limited the COLAs for the next three years to 2% per year plus any amount by which inflation exceeded the Administration's assumptions (its assumptions at that time suggested that inflation would hover in the high 3% or low 4% range). It further included a guarantee provision under which the affected COLAs could not be less than 2%. It, too, would have resulted in about $22 billion in Social Security savings over the following three years (as well as higher savings in later years)."], "subsections": [{"section_title": "Senate Action", "paragraphs": ["When the Senate took up the Budget Committee's first budget resolution, it rejected both the COLA freeze and the alternative COLA limitation by agreeing on May 1, 1985, by a vote of 65 (19-R, 46-D) to 34 (33-R, 1-D) to an amendment by Senator Dole (R-KS), for Senators Hawkins (R-FL) and D'Amato (R-NY), to provide for full funding of Social Security COLAs.", "However, on May 10, 1985, after considering many amendments, the Senate adopted by a vote of 50 (49-R, 1-D) to 49 (4-R, 45-D) an entirely revised budget package, introduced by Senator Dole, which incorporated the original COLA freeze recommended by the committee.", "Subsequently, the Senate considered an amendment by Senator Moynihan (D-NY) to provide a full Social Security COLA in January 1986, but it was tabled by a vote of 51 (49-R, 2-D) to 47 (3-R, 44-D).", "The final budget resolution, passed by a voice vote, assumed later enactment of the 1986 COLA freezes, including one affecting Social Security."], "subsections": []}, {"section_title": "House Action", "paragraphs": ["The House-passed version of the FY1986 first budget resolution, H.Con.Res. 152 , assumed that full COLAs would be paid in all federal benefit programs.", "On May 22, 1985, the House rejected an amendment by Representative Dannemeyer (R-CA) to limit Social Security COLAs to 2% per year for the three-year period FY1986-FY1988 by a vote of 382 (135-R, 247-D) to 39 (39-R, 0-D).", "On May 23, 1985, the House also rejected by a vote of 372 (165-R, 207-D) to 56 (15-R, 41-D) an amendment offered by Representative Leath (D-TX) to freeze 1986 COLAs for Social Security, federal retirement, and veterans' compensation while adding back 20% of the anticipated savings to programs that aid needy elderly and disabled people.", "Provisions of the House-passed resolution were inserted in S.Con.Res. 32 , in lieu of the Senate-passed measures, which was approved by a vote of 258 (24-R, 234-D) to 170 (155-R, 15-D) on May 23, 1985."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["Conferees for the House and Senate met throughout June and July 1985 to work out an agreement on a deficit reduction package. Among the number of ideas that surfaced were proposals to delay the Senate-passed COLA freezes until 1987, means test the COLAs, make both the COLAs and adjustments to income tax brackets effective every other year (instead of annually), and increase the amount of Social Security benefits that would be subject to income taxes. Ultimately, however, agreement could not be reached on any form of Social Security constraint, and the conference agreement on the First Concurrent Resolution on the Budget for FY1986, passed on August 1, 1985, did not assume any such savings."], "subsections": []}]}, {"section_title": "P.L. 99-509, Omnibus Budget Reconciliation Act of 1986", "paragraphs": ["President Reagan signed H.R. 5300 , the Omnibus Budget Reconciliation Act of 1986, on October 21, 1986. During 1986, inflation slowed to a rate that made it unlikely that it would reach the 3% threshold necessary to provide a COLA in that year. P.L. 99-509 permanently eliminated the 3% requirement, which enabled a 1.3% COLA to be authorized for December 1986."], "subsections": [{"section_title": "Senate Action", "paragraphs": ["The Senate Finance Committee, as part of its budget provisions incorporated in S. 2706 , the Omnibus Budget Reconciliation Act of 1986, included a measure that would have provided a Social Security COLA in January 1987 no matter how low inflation turned out to be, that is, it permanently eliminated the 3% requirement.", "The Senate approved S. 2706 on September 20, 1986, by a vote of 88 (50-R, 38-D) to 7 (0-R, 7-D)."], "subsections": []}, {"section_title": "House Action", "paragraphs": ["The House Ways and Means Committee, as part of its budget reconciliation provisions incorporated in H.R. 5300 , its version of the Omnibus Budget Reconciliation Act of 1986, included a similar measure.", "The House passed H.R. 5300 with this measure on September 24, 1986, by a vote of 309 (99-R, 210-D) to 106 (71-R, 35-D)."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["The conference report on H.R. 5300 , including the COLA provision, was approved by both houses on October 17, 1986, by a vote of 305 (112-R, 193-D) to 70 (R-51, D-19) in the House and 61 (33-R, 28-D) to 25 (10-R, 15-D) in the Senate."], "subsections": []}]}, {"section_title": "P.L. 100-203, Omnibus Budget Reconciliation Act of 1987", "paragraphs": ["H.R. 3545 , the Omnibus Budget Reconciliation Act of 1987, was signed into law on December 22, 1987, by President Reagan. Several of its provisions affected Social Security. P.L. 100-203 extended FICA coverage to military training of inactive reservists, the employer's share of all cash tips, and several other categories of earnings; lengthened from 15 months to 36 months the period during which a disability recipient who returns to work may become automatically re-entitled to benefits; and extended the period for appeal of adverse disability decisions through 1988."], "subsections": [{"section_title": "House Action", "paragraphs": ["H.R. 3545 was a bill to meet the deficit reduction targets set by the FY1988 budget resolution ( H.Con.Res. 93 ). Earlier, in July, the Ways and Means Committee also had approved changes in Social Security. Two of these provisions\u2014extending coverage to military training of inactive reservists and group term life insurance\u2014had been requested by President Reagan. In addition, the committee agreed to lengthen from 15 months to 36 months the period during which a disability recipient who returns to work may become automatically re-entitled to benefits, to extend the period for appeal of adverse disability decisions through 1988, and to cover certain agricultural workers, children and spouses in family businesses.", "The house passed H.R. 3545 on October 29, 1987, by a vote of 206 (1-R, 205-D) to 205 (164-R, 41-D)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["When the Finance Committee approved H.R. 3545 on December 3, 1987, it included the House Social Security coverage provisions.", "On December 10, 1987, the Senate rejected an amendment by Senator Kassebaum (R-KS) that would have limited the 1988 Social Security COLA to 2%, by a vote of 71 (34-R, 37-D) to 25 (11-R, 14-D).", "On December 11, 1987, the Senate approved H.R. 3545 by a voice vote."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["The conference committee generally accepted the House-passed version of H.R. 3545 .", "On December 21, 1987, the House passed the conference report by a vote of 237 (44-R, 193-D) to 181 (130-R, 51-D).", "On December 21, 1987, the Senate passed the conference report by a vote of 61 (18-R, 43-D) to 28 (23-R, 5-D)."], "subsections": []}]}, {"section_title": "P.L. 100-647, The Technical and Miscellaneous Revenue Act of 1988", "paragraphs": ["On November 10, 1988, President Reagan signed H.R. 4333 , the Technical and Miscellaneous Revenue Act of 1988. In addition to various tax measures the bill contained several provisions affecting Social Security. Among these, H.R. 4333 provided interim benefits to individuals who have received a favorable decision upon appeal to an Administrative Law Judge but whose case has been under review by the Appeals Council for more than 110 days; extended the existing provision for continued payment of benefits during appeal; denied benefits to Nazis who are deported; and lowered the number of years of substantial Social Security-covered earnings that are needed to begin phasing out the windfall benefit formula (which applies to someone receiving a pension from noncovered employment) from 25 years to 20 years."], "subsections": [{"section_title": "House Action", "paragraphs": ["On July 14, 1988, the Ways and Means Committee approved a \"tax corrections\" bill, H.R. 4333 , that also included some measures affecting Social Security.", "The House passed H.R. 4333 on August 4, 1988, by a vote of 380 (150-R, 230-D) to 25 (19-R, 6-D)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["The Finance Committee adopted about half of the House Social Security provisions.", "The Senate approved H.R. 4333 on October 11, 1988, by a vote of 87 (38-R, 49-D) to 1 (0-R, 1-D)."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["The conference committee generally accepted the House-passed version of H.R. 4333 .", "On October 21, 1988, the House passed the conference report by a vote of 358 (150-R, 208-D) to 1 (0-R, 1-D).", "On October 21, 1988, the Senate passed the conference report by a voice vote."], "subsections": []}]}, {"section_title": "P.L. 101-239, Omnibus Budget Reconciliation Act of 1989", "paragraphs": ["On December 19, 1989, President George H. W. Bush signed H.R. 3299 , the Omnibus Budget Reconciliation Act of 1989. Among other things, its Social Security provisions extended benefits to children adopted after the worker became entitled to benefits, regardless of whether the child was dependent on the worker before the worker's entitlement; further extended the existing provision for continued payment of benefits during appeal; increased the calculation of average wages, used for purposes of computing of benefits and the maximum amount of earnings subject to FICA tax, by including deferred compensation; and, beginning in 1990, required that SSA provide estimates of earnings and future benefits to all workers over the age of 24."], "subsections": [{"section_title": "House Action", "paragraphs": ["When the Ways and Means Committee considered H.R. 3299 on October 5, 1989, it proposed several Social Security-related measures. Among these was a provision making SSA an independent agency; raising the Special Minimum benefit by $35 a month; increasing the earnings test limits for recipients over the age of 64; extending benefits to children adopted after the worker became entitled to benefits, regardless of whether the child was dependent on the worker before the worker's entitlement; further extending the existing provision for continued payment of benefits during appeal; and including deferred compensation in the determination of average wages for purposes of determining benefits and the maximum amount of earnings subject to the FICA tax.", "On October 5, 1989, the House passed H.R. 3299 by a vote of 333 (R-146, D-187) to 91 (R-28, D-63)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["The Finance Committee approved its version of H.R. 3299 on October 3, 1989. Like the House version, it included an increase in the maximum amount of earnings subject to the FICA tax, but it specifically earmarked the revenue therefrom to pay for proposed increases in the earnings test limits. It also approved making SSA an independent agency, but with a single administrator as opposed to the three-person board specified in the House version. However, because it was thought that a \"clean bill\" would improve chances of passage, the bill was stripped of its Social Security provisions before it reached the floor.", "The senate approved its version of H.R. 3299 on October 13, 1989, by a vote of 87 (R-40, D-47) to 7 (R-2, D-5)."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["In conference, most of the House provisions were accepted (but the major exclusion was making SSA an independent agency). Although neither version of H.R. 3299 included it, a provision was added that, beginning in 1990, required that SSA provide estimates of earnings and future benefits to all workers over the age of 24.", "On November 22, 1989 (legislative day November 21), the House approved the conference report by a vote of 272 (R-86, D-186) to 128 (R-81, D-47). The Senate approved it the same day by a voice vote."], "subsections": []}]}, {"section_title": "P.L. 101-508, The Omnibus Budget Reconciliation Act of 1990", "paragraphs": ["On November 5, 1990, President George H. W. Bush signed H.R. 5835 , the Omnibus Budget Reconciliation Act of 1990. Among its Social Security provisions, it made permanent a temporary provision, first enacted in 1984 and subsequently extended, that provides the option for recipients to choose to continue to receive disability and Medicare benefits while their termination is being appealed; liberalized the definition of disability for disabled widow(er)s by making it consistent with that for disabled workers; extended benefits to spouses whose marriage to the worker is otherwise invalid, if the spouse was living with the worker before he or she died or filed for benefits; removed the operation of the trust funds from budget deficit calculations under the Gramm-Rudman-Hollings Act; established separate House and Senate procedural safeguards to protect trust fund balances; extended coverage to employees of state and local governments who are not covered by a retirement plan; and raised the maximum amount of earnings subject to HI taxes to $125,000, effective in 1991, with raises thereafter indexed to increases in average wages."], "subsections": [{"section_title": "House Action", "paragraphs": ["In 1990, the congressional agenda was dominated by the debate over how to reduce a large budget deficit, which, under the Gramm-Rudman-Hollings (GRH) sequestration rules, would have required billions of dollars of cuts in many federal programs. The Administration's FY1991 budget contained several Social Security measures, the most prominent of which was to extend Social Security coverage to state and local government workers not covered by a retirement plan. The Ways and Means Social Security Subcommittee included some of them in a package of Social Security provisions it forwarded to the full committee. For several months budget negotiations stalled, as the democratic majority in Congress disagreed with the Administration's position that the deficit should be reduced entirely with spending cuts. As a result of a budget \"summit\" between congressional and Administration leaders, an agreement was reached in which the President would put tax increases on the table and the Congress would consider spending cuts in entitlements, including Social Security and Medicare. The resulting bill reported from the Budget Committee on October 15, H.R. 5835 , extended Social Security coverage to state and local government workers not covered by a retirement plan and raised the maximum amount of earnings subject to HI taxes to $100,000, effective in 1991. However, the same day the Ways and Means Committee reported out H.R. 5828 , a bill making miscellaneous and technical amendments to the Social Security Act, which incorporated most of the provisions that had earlier been approved by the Social Security Subcommittee.", "On October 16, 1990, the House approved H.R. 5835 by a vote of 227 (10-R, 217-D) to 203 (163-R, 40-D)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["During 1990, the debate about Social Security was largely dominated by a proposal by Senator Moynihan (D-NY) to cut the Social Security payroll tax and return the program to true pay-as-you-go financing. The driving force behind the proposal was the growing realization that the rapid rise in Social Security yearly surpluses, caused by payroll tax revenues that exceeded the program's expenditures, were significantly reducing the size of the overall federal budget deficit. This had led to charges that the Social Security trust funds were being \"raided\" to finance the rest of government and \"masking\" the true size of the deficit. In S. 3167 , Senator Moynihan proposed that the payroll tax rate be scheduled to fall and rise with changes in the program's costs.", "On October 10, 1990, Senator Moynihan asked that the Senate vote on S. 3167 . While the Senate leadership agreed to bring the bill to the floor, a point of order was raised against it on the basis that it violated the Budget Act. Although a majority of Senators voted to override the point of order, 54 (R-12, D-42) to 44 (31-R, 13-D), the measure fell short of the 60 votes required.", "When the Senate considered H.R. 5835 on October 18, 1990, it accepted by a vote of 98 (43-R, 55-D) to 2 (2-R, 0-D) an amendment by Senators Hollings (D-SC) and Heinz (R-PA) to remove Social Security from GRH budget deficit calculations.", "On October 19, 1990 (legislative day October 18), the Senate passed the budget reconciliation bill by a vote of 54 (23-R, 31-D) to 46 (22-R, 24-R)."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["On October 27, 1990 (legislative day October 26), the House passed the conference report on H.R. 5835 by a vote of 228 (47-R, 181-D) to 200 (126-R, 74-D).", "On October, 27, 1990, the Senate passed the conference report by a vote of 54 (19-R, 35-D) to 45 (25-R, 20-D)"], "subsections": []}]}, {"section_title": "P.L. 103-66, The Omnibus Budget Reconciliation Act of 1993", "paragraphs": ["On August 10, 1993, President Clinton signed H.R. 2264 , the Omnibus Budget Reconciliation Act of 1993. Effective in 1994, H.R. 2264 made up to 85% of Social Security benefits subject to the income tax for recipients whose income plus one-half of their benefits exceed $34,000 (single) and $44,000 (couple); and eliminated the maximum taxable earnings base for the HI payroll tax, (i.e., subjected all earnings to the HI tax), effective in 1994.", "As part of his plan to cut the federal fiscal deficit, President Clinton proposed in his first budget that the proportion of benefits subject to taxation should be increased from 50% to 85%, effective in 1994. His budget document said this would \"move the treatment of Social Security and railroad retirement Tier I benefits toward that of private pensions\" and would generate $32 billion in new tax revenues over five years. The proceeds from the change would not be credited to the Social Security trust funds, as under current law, but to the Medicare Hospital Insurance program, which had a less favorable financial outlook than did Social Security. Doing so also would have avoided procedural obstacles that could have been raised in the budget reconciliation process. The budget also proposed that the maximum taxable earnings base for HI be eliminated entirely beginning in 1994.", "Both proposals, especially the increase in the taxation of benefits, were opposed vigorously by the Republican minority. Critics maintained that the increase was unfair as it changed the rules in the middle of the game, penalizing recipients who relied on old law and who could not change past work and savings decisions. Regardless of abstract arguments about tax principles, many recipients regarded increased taxation as simply a reduction in the benefits they had been promised. They regarded taxation of benefits as an indirect means test, which would weaken the \"earned right\" nature of the program and make it more like welfare, where need determines the level of benefits. Finally, they maintained that it grossly distorts marginal tax rates and provides a strong disincentive for many recipients to work."], "subsections": [{"section_title": "House Action", "paragraphs": ["H.Con.Res. 64 , the FY1994 Concurrent Budget Resolution, included the additional revenue from the President's proposal.", "On March 18, 1993, the House passed H.Con.Res. 64 by a vote of 243 (0-R, 242-D, 1-I) to 183 (172-R, 11-D), which included the additional revenue from the President's proposal."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["The Senate devoted six days of debate to H.Con.Res. 64 at the end of March.", "On March 24, 1993, the Senate rejected by a vote of 47 (43-R, 4-D) to 52 (0-R, 52-D) an amendment by Senator Lott (R-MS) that would have deleted from the resolution the revenue projected from the President's proposal.", "On March 24, 1993, the Senate approved, by a vote of 67 (12-R, 55-D) to 32 (31-R, 1-D), an amendment by Senators Lautenberg (D-NJ) and Exon (D-NE) expressing the sense of the Senate that the revenues set forth in the resolution assume that the Finance Committee would make every effort to find alternative sources of revenue before imposing additional taxes on the Social Security benefits of recipients with threshold incomes of less than $32,000 (single) and $40,000 (couples). The thresholds for taxing 50% of benefits were to remain at the current law levels of $25,000 and $32,000.", "On March 25, 1993, the Senate approved H.Con.Res. 64 by a vote of 54 (0-R, 54-D) to 45 (43-R, 1-D)."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["On March 31, 1993, the House approved the conference report on H.Con.Res. 64 by a vote of 240 (0-R, 239-D, 1-I) to 184 (172-R, 12-D). On April 1, 1993, the Senate approved the conference report by a vote of 55 (0-R, 55-D) to 45 (43-R, 2-D). It included the sense of the Senate resolution."], "subsections": []}, {"section_title": "House Action as Modified", "paragraphs": ["On May 13, 1993, by a party-line vote of 24-14, the House Committee on Ways and Means approved the President's proposal, but modified it so that the additional proceeds would be credited to the General Fund instead of to Medicare. This measure was included in H.R. 2264 , the 1993 Omnibus Budget Reconciliation Act.", "On May 27, 1993, the House passed H.R. 2264 by a vote of 219 (0-R, 218-D, 1-I) to 213 (175-R, 38-D)."], "subsections": []}, {"section_title": "Senate Action as Modified", "paragraphs": ["On June 18, 1993, by a party-line vote of 11-9, the Finance Committee approved H.R. 2264 , but included the Lautenberg-Exon amendment to raise the taxation thresholds to $32,000 (single) and $42,000 (couple).", "On June 24, 1993, the Senate rejected, by a vote of 46 (41-R, 5-D) to 51 (1-R, 50-D), an amendment by Senator Lott to delete the taxation of benefits provision.", "It also rejected, by a vote of 46 (3-R, 43-D) to 51 (40-R, 11-D) an amendment by Senator DeConcini to increase the 85% thresholds to $37,000 (single) and $54,000 (couple), and, by a vote of 41 (40-R, 1-D) to 57 (3-R, 54-D) an amendment by Senator McCain to direct that the proceeds of increased taxation of benefits be credited to the Social Security trust funds.", "On June 24, 1993, the Senate approved, by a vote of 50 (0-R, 50-D) to 49 (43-R, 6-D), the Budget Reconciliation bill. It included the Lautenberg-Exon amendment creating second-tier thresholds of $32,000 and $40,000."], "subsections": []}, {"section_title": "Conference Action as Modified", "paragraphs": ["On July 14, 1993, the House adopted, by a vote of 415 to 0, an amendment by Representative Sabo (D-MN) to instruct its conferees on the bill to accept the Senate version of taxation of benefits.", "When the House and Senate versions of the budget package were negotiated in conference, the conferees modified the Senate taxation of Social Security benefits provision by setting the second tier thresholds at $34,000 (single) and $44,000 (couple). The measure was included in the final version of the reconciliation bill passed by the House on August 5, 1993, by a vote of 218 (0-R, 217-D, 1-I) to 216 (175-R, 41-D).", "On August 6, 1993, the Senate passed H.R. 2264 by a vote of 51 (0-R, 51-D) to 50 (44-R, 6-D)."], "subsections": []}]}, {"section_title": "P.L. 103-296, Social Security Administrative Reform Act of 1994", "paragraphs": ["President Clinton signed H.R. 4277 , the Social Security Administrative Reform Act of 1994, on August 15, 1994. P.L. 103-296 established the SSA as an independent agency, effective March 31, 1995. It restricted DI and SSI benefits payable to drug addicts and alcoholics by creating sanctions for failing to get treatment, limiting their enrollment to three years, and requiring that those receiving DI benefits have a representative payee (formerly required only of SSI recipients). Representatives of the Clinton Administration initially opposed making SSA an independent agency, but President Clinton supported H.R. 4277 's final passage.", "Interest in making SSA independent began in the early 1970s, when Social Security's impact on fiscal policy was made more visible by including it in the federal budget. During congressional budget discussions in the early 1980s, proponents of independence wanted to insulate Social Security from benefit cuts designed to meet short-term budget goals rather than policy concerns about Social Security. Many argued that making the agency independent would help insulate it from political and budgetary discussions, lead to better leadership, and reassure the public about Social Security's long-run survivability.", "Opponents argued that Social Security's huge revenue and outlays should not be isolated from policy choices affecting other HHS social programs and that its financial implications for the economy and millions of recipients should be evaluated in conjunction with other economic and social functions of the government. They further believed that making SSA independent would not necessarily resolve its administrative problems, which were heavily influenced by ongoing policy changes to its programs resulting from legislation and court decisions.", "Starting in 1986, a number of attempts were made in Congress to make SSA independent. Various Administrations generally opposed the idea, and a disagreement persisted between the House and Senate over how such an agency should be administered. The House preferred an approach under which an independent SSA would be run by a three-member bipartisan board; the Senate preferred an approach where it would be run by a single administrator."], "subsections": [{"section_title": "House Action", "paragraphs": ["On May 12, 1994, the Ways and Means Committee reported out H.R. 2264 (incorporating the three-member bipartisan board approach), introduced by Representative Jacobs (D-IN).", "The House passed H.R. 2264 on May 17, 1994, by a vote of 413-0."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On January 25, 1994, the Senate Finance Committee reported out S. 1560 (incorporating the single-administrator approach), introduced by Senator Moynihan (D-NY).", "The Senate passed S. 1560 by voice vote on March 2, 1994.", "On May 23, 1994, the Senate approved H.R. 4277 , after striking its language and substituting that of S. 1560 , by voice vote."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["Conferees reached an agreement on July 20, 1994, under which SSA would be run by a single administrator appointed for a six-year term, supported by a seven-member bipartisan advisory board.", "The Senate passed the agreement by voice vote on August 5, 1994.", "The House passed the agreement on August 11, 1994, by a vote of 431-0."], "subsections": []}]}, {"section_title": "P.L. 103-387, Social Security Domestic Reform Act of 1994", "paragraphs": ["President Clinton signed H.R. 4278 , Social Security Domestic Reform Act of 1994, on October 22, 1994. H.R. 4278 raised the threshold for Social Security coverage of household employees from $50 in wages a quarter to $1,000 a year, which would rise thereafter with the growth in average wages and reallocated taxes from the OASI fund to the DI fund.", "In early 1993, the issue of coverage of domestic workers burst into public awareness when several Cabinet nominees revealed that they had failed to report the wages they had paid to childcare providers. Subsequent media scrutiny made it apparent that under-reporting of household wages was common. It also highlighted that householders were supposed to be reporting even occasional work such as babysitting and lawn mowing. As the threshold had not been changed for 43 years, the question naturally arose of whether it should be raised."], "subsections": [{"section_title": "House Action", "paragraphs": ["Several measures were introduced in the 103 rd Congress that would have raised the threshold by varying amounts. On March 22, 1994, Representative Andrew Jacobs (D-IN) introduced H.R. 4105 , which would have raised the threshold to $1,250 a year in 1995, to be indexed thereafter to increases in average wages.", "This measure was included in H.R. 4278 , approved by the House on May 12, 1994, by a vote of 420-0."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["When the Senate considered H.R. 4278 on May 25, 1994, it struck the House language and substituted the text of S. 1231 , a bill by Senator Moynihan (D-NY) that would have raised the annual threshold to the same level as that needed to earn a quarter of coverage ($620 in 1994) and exempted from Social Security taxes the wages paid to domestic workers under the age of 18.", "The Senate passed the revised version of H.R. 4278 on May 25, 1994, by unanimous consent."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["On October 5, 1994, conferees agreed to a measure that raised the threshold for Social Security coverage of household workers to $1,000, effective in 1994. The measure also provided that the threshold would rise in the future, in $100 increments, in proportion to the growth in average wages in the economy.", "On October 6, 1994, the conference report was approved in the House by a vote of 423-0.", "The same day, the Senate approved the conference report by unanimous consent."], "subsections": []}]}, {"section_title": "P.L. 104-121, The Senior Citizens Right to Work Act of 1996", "paragraphs": ["On March 29, 1996, President Clinton signed H.R. 3136 , the Senior Citizens Right to Work Act of 1996. H.R. 3136 : raised the annual earnings test exempt amount, for recipients who have attained the full retirement age (FRA), over a period of seven years, reaching $30,000 in 2002, and then indexed that amount to wages; prohibited DI and SSI eligibility to individuals whose disability is based on drug addiction or alcoholism; tightened eligibility requirements for entitlements to benefits as a stepchild; and, as a way to produce program savings that would help compensate for the increased costs to the Social Security system due to liberalizing the earnings test, provided funds for additional continuing disability reviews.", "On September 27, 1994, 300 Republican congressional candidates presented a \"Contract with America\" that listed 10 proposals that they would pursue if elected. One of the proposals, the \"Senior Citizens Equity Act,\" included a measure to increase the earnings test limits, for those over age 64, over a period of five years, reaching $30,000 in 2000. After the Republican victory in the election, the Senior Citizens Equity Act was sponsored by 131 Members in H.R. 8 , introduced January 4, 1995. Although the House approved the measure as part of H.R. 1215 , it was not included in the Balanced Budget Reconciliation bill ( H.R. 2491 ) passed by the Congress on November 20, 1995."], "subsections": [{"section_title": "House Action", "paragraphs": ["On November 28, 1995, the Social Security Subcommittee of the Ways and Means Committee approved H.R. 2684 , the Senior Citizens Right to Work Act, introduced by Chairman Bunning (R-KY), that would gradually increase the earnings test limits for those aged 65-69 to $30,000 in 2002. The full committee approved H.R. 2684 by a vote of 31-0 on November 30, 1995.", "The House approved H.R. 2684 on December 5, 1995, by a vote of 411 (230-R, 180-D, 1-I) to 4 (0-R, 4-D).", "On March 21, 1996, reportedly with the agreement of the Administration, a modified version of H.R. 2684 was included in H.R. 3136 , the Contract with America Advancement Act of 1996, introduced by Representative Archer (D-TX). H.R. 3136 , also included an increase in the debt ceiling and other measures. The part of H.R. 3136 relating to the earnings test was similar to H.R. 2684 , but modified to slow the rise in the exempt amounts during the first five years of the phase-in.", "On March 28, 1996, H.R. 3136 was passed by the House by a vote of 328 (201-R, 127-D) to 91 (30-R, 60-D, 1-I)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On December 14, 1995, the Senate Committee on Finance approved S. 1470 , a bill similar to H.R. 2684 .", "On March 28, 1996, H.R. 3136 was passed by the Senate by unanimous consent."], "subsections": []}]}, {"section_title": "P.L. 106-170, The Ticket to Work and Work Incentives Improvement Act of 1999", "paragraphs": ["President Clinton signed H.R. 1180 , the Ticket to Work and Work Incentive Act of 1999, on December 17, 1999. H.R. 1180 provided disabled recipients with vouchers they can use to purchase rehabilitative services from public or private providers and extended Medicare coverage for up to 4.5 additional years for disabled recipients who work.", "In the 1990s, there was a growing movement to mitigate what was seen as a fundamental dilemma faced by many disabled Social Security recipients. While the disabled were encouraged to try to leave the Social Security rolls by attempting to work, in doing so they faced a limited choice in seeking rehabilitation services and a potentially serious loss of Medicare and Medicaid benefits. Proponents of providing greater work opportunity argued that incentives for the disabled to attempt to work should be enhanced."], "subsections": [{"section_title": "House Action", "paragraphs": ["On October 19, 1999, the House approved H.R. 1180 , The Ticket to Work and Work Incentives Improvement Act of 1999, introduced by Representative Rick Lazio (R-NY), by a vote of 412 (206-R, 205-D, 1-I) to 9 (9-R, 0-D)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On June 16, 1999, the Senate passed a similar bill, S. 331 , the Work Incentives Improvement Act of 1999, introduced by Senator James S. Jeffords (R-VT), by a vote of 99-0. On October 21, 1999, the Senate passed H.R. 1180 , after striking its language and substituting that of S. 331 , by unanimous consent."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["On November 18, 1999, the House adopted the conference report by a vote of 418 (212-R, 205-D, 1-I) to 2 (0-R, 2-D).", "On November 19, 1999, the Senate adopted the conference report by a vote of 95 (51-R, 44-D) to 1 (1-R, 0-D)."], "subsections": []}]}, {"section_title": "P.L. 106-182, Senior Citizens Right to Work Act", "paragraphs": ["President Clinton signed H.R. 5 , the Senior Citizens Right to Work Act, on April 7, 2000. H.R. 5 eliminated the earnings test for recipients who have attained FRA, effective in 2000.", "The earnings test has always been one of the most unpopular features of the Social Security program. Critics said it was unfair and inappropriate to impose a form of means test for a retirement benefit that has been earned by a lifetime of contributions to the program, that it has a strong negative effect on work incentives, and that it can hurt elderly individuals who need to work to supplement their Social Security benefits. Defenders of the provision said that it is a reasonable means of executing the purpose of Social Security. Because the system is social insurance that protects workers from loss of income due to the retirement, death, or disability of the worker, they consider it appropriate to withhold benefits from workers who show by their substantial earnings that they have not in fact \"retired.\" They also argued that eliminating or significantly liberalizing the benefit would primarily help those who do not need help (i.e., the better-off).", "However, over the years probably the main impediment to eliminating the earnings test was its negative effect on the program's financial status and on current federal budgets, which perennially were in deficit. By 2000, the federal budget was running large surpluses, so major alterations to the test were deemed affordable. In addition, it was projected that eliminating the test would have no negative impact on Social Security's long-range financing because of offsetting savings. The ground work for this offsetting effect had been laid in 1983, when Congress increased the Delayed Retirement Credit (DRC). The DRC increases benefits for retirees by a certain percentage for each month they do not receive benefits after they attained FRA. The 1983 legislation provided for a long phase-in of the increase in the DRC, so that its ultimate rate would not be achieved until 2008. At that point, it would be \"actuarially fair,\" meaning that the additional benefits a person would receive over his or her lifetime due to the DRC would be approximately equal to the value of the benefits lost due to the earnings test. Thus, the long-range cost of eliminating the earnings test for those above FRA would be offset by the savings produced by fewer payments of DRCs. Because there was no threat to Social Security's long-range solvency and the short-range costs were judged to be affordable, the momentum to repeal the test for those at or over the retirement age was overwhelming."], "subsections": [{"section_title": "House Action", "paragraphs": ["On March 1, 2000, the House approved H.R. 5 , a bill that would eliminate the earnings test for recipients who have attained FRA, introduced by Representative Sam Johnson (R-TX), by a vote of 422-0."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On March 22, 2000, the Senate approved H.R. 5 , with a modification to the monthly exempt amounts in the year of attaining FRA, by a vote of 100-0."], "subsections": []}, {"section_title": "Conference Action", "paragraphs": ["On March 28, 2000, the House approved the Senate version of H.R. 5 by a vote of 419-0."], "subsections": []}]}, {"section_title": "P.L. 108-203, The Social Security Protection Act of 2004", "paragraphs": ["President George W. Bush signed H.R. 743 , the Social Security Protection Act of 2004, on March 2, 2004. The measure included various provisions designed to reduce fraud and abuse in the Social Security and SSI programs. Among other changes, H.R. 743 imposed stricter standards on individuals and organizations that serve as representative payees for Social Security and SSI recipients; made nongovernmental representative payees liable for misused funds and subjected them to civil monetary penalties; tightened restrictions on attorneys who represent Social Security and SSI disability claimants; limited assessments on attorney fee payments; prohibited fugitive felons from receiving Social Security benefits; modified the last day rule under the Government Pension Offset provision; and required certain noncitizens to have authorization to work in the United States at the time a Social Security number is assigned, or at some later time, to gain insured status under the Social Security program. Several major provisions of the law are described below.", "SSA may designate a \"representative payee\" to accept monthly benefit payments on behalf of Social Security and SSI recipients who are physically or mentally incapable of managing their own funds, or on behalf of children under the age of 18. Before P.L. 108-203 , SSA was required to reissue benefits misused by an individual or organizational representative payee only in cases where the Social Security Commissioner found that SSA negligently failed to investigate or monitor the payee. The new law eliminated the requirement that the reissuance of benefits be subject to a finding of negligence on the part of SSA. As a result, SSA is required to reissue any benefits misused by an individual representative payee who represents 15 or more recipients, or by an organizational representative payee. In addition, the law made nongovernmental representative payees (i.e., those other than federal, state, and local government agencies) liable for the reimbursement of misused funds. Under the new law, SSA has the authority to impose a civil monetary penalty (up to $5,000 for each violation) and an assessment (up to twice the amount of misused benefits) on representative payees who misuse benefits. The new law included a number of other provisions aimed at strengthening the accountability of representative payees.", "Social Security and SSI disability claimants may choose to have an attorney or other qualified individual represent them in proceedings before SSA, and the claimant representative may charge a fee for his or her services. The fee, which is subject to limits, must be authorized by SSA. If a Social Security disability claimant is awarded past-due benefits and his or her representative is an attorney, SSA withholds the attorney's fee payment from the benefit award and sends the payment directly to the attorney. To cover the administrative costs associated with the fee withholding process for attorney representatives of Social Security disability claimants, SSA withholds an assessment of up to 6.3% from the attorney's fee. Before P.L. 108-203 , if the claimant representative was not an attorney, or the claim was for SSI benefits, SSA would send the full benefit award to the claimant and the claimant representative would be responsible for collecting his or her fee from the individual. The new law capped the assessment for processing attorney fee payments at the lesser of 6.3% of the attorney's fee and $75 (indexed to inflation); provided for a temporary (five-year) extension of the attorney fee withholding process to SSI claims; authorized a five-year demonstration project to extend the fee withholding process to non-attorney representatives in both Social Security and SSI claims; and required the Government Accountability Office to study the fee payment process for claimant representatives.", "Before P.L. 108-203 , SSA was prohibited from paying SSI benefits only (not Social Security benefits) to fugitive felons (i.e., persons fleeing prosecution, custody, or confinement after conviction, and persons violating probation or parole). In addition, upon written request, SSA was required to provide information about these individuals (current address, Social Security number, and photograph) to law enforcement officials. The new law prohibited SSA from paying Social Security benefits as well to fugitive felons and required SSA, upon written request, to provide information to law enforcement officials to assist in the apprehension of these individuals. The new law authorized the Social Security Commissioner to pay, with good cause, SSI and Social Security benefits previously denied because of an individual's status as a fugitive felon.", "If an individual receives a government pension from work that was not covered by Social Security, his or her Social Security spousal or widow(er) benefit is reduced by an amount equal to two-thirds of the noncovered government pension, under a provision known as the Government Pension Offset (GPO). Before P.L. 108-203 , a state or local government employee who was not covered by Social Security would be exempt from the GPO if he or she worked in a Social Security-covered government position on the last day of employment . That is, under the last day rule , a noncovered state or local government employee could avoid having his or her Social Security spousal or widow(er) benefit reduced under the GPO by switching to a Social Security-covered government position for one day (or longer). Under the new law, a state or local government employee must be covered by Social Security for at least the last 60 calendar months of employment to be exempt from the GPO.", "Before P.L. 108-203 , a noncitizen was not required to have authorization to work in the United States at any point to qualify for Social Security benefits. Under the new law, a noncitizen who is assigned a Social Security number (SSN) in 2004 or later is required to have work authorization at the time the SSN is assigned, or at some later time, to gain insured status under the Social Security program. Specifically, if the individual obtains work authorization at some point, all of his or her Social Security-covered earnings count toward qualifying for benefits (all authorized and unauthorized earnings). If the individual never obtains authorization to work in the United States, none of his or her Social Security-covered earnings count toward qualifying for benefits. A noncitizen who was assigned an SSN before 2004 is not subject to the work authorization requirement established under the new law (i.e., all of the individual's Social Security-covered earnings count toward qualifying for benefits, regardless of his or her work authorization status)."], "subsections": [{"section_title": "House Action", "paragraphs": ["On April 2, 2003, the House approved H.R. 743 , the Social Security Protection Act of 2003, introduced by Representative E. Clay Shaw (R-FL), by a vote of 396 (219-R, 176-D, 1-I) to 28 (3-R, 25-D)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On September 17, 2003, the Senate Finance Committee approved an amendment in the nature of a substitute to H.R. 743 , as passed by the House, by a voice vote.", "On December 9, 2003, the Senate approved H.R. 743 , with an amendment that substituted for the version of the bill approved by the Senate Finance Committee, by unanimous consent."], "subsections": []}, {"section_title": "House Response to Senate Action", "paragraphs": ["On February 11, 2004, the House agreed to the Senate version and passed H.R. 743 (renamed the Social Security Protection Act of 2004), by a vote of 402 (221-R, 180-D, 1-I) to 19 (4-R, 15-D)."], "subsections": []}]}, {"section_title": "P.L. 111-312, Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010", "paragraphs": ["President Obama signed H.R. 4853 , the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, on December 17, 2010. Section 601 of the law reduced, in 2011 only, the Social Security portion of the payroll tax applied to both the wages and salaries of FICA-covered workers and to the net earnings of SECA-covered self-employed workers, each by two percentage points. The Social Security initiative was just one among other provisions included in the legislation intended to stimulate the economy by creating jobs, extending public payments to the unemployed, and providing workers with more disposable income.", "The act temporarily reduced the FICA tax rate from 6.2% of covered earnings to 4.2% for employees, and the SECA tax rate from 12.4% of covered net self-employed earnings to 10.4%. The law did not change the FICA rate for employers in 2011, which remained at 6.2%.", "Net revenue to the Social Security trust funds was not affected by P.L. 111-312 . Any decline in tax revenue in 2011 attributed to the act was covered by appropriate transfers from the General Fund of the U.S. Treasury."], "subsections": [{"section_title": "House Action", "paragraphs": ["On March 17, 2010, the House approved H.R. 4853 , under suspension of the rules by voice vote. The bill, introduced by Representative James Oberstar (D-MN), at the time was known as the ultimately unrelated Federal Aviation Administration Extension Act of 2010."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On September 23, 2010, the Senate passed the bill, with an amendment in the nature of a substitute to H.R. 4853 , as passed by the House, by unanimous consent. The Senate's amendment, still focused on the aviation industry, was titled the Airport and Airway Extension Act of 2010, Part III."], "subsections": []}, {"section_title": "House Action as Amended", "paragraphs": ["After a few days of debate on tax relief and the economy in early December, the House moved to strip out all aviation provisions in H.R. 4853 and subsequently used the bill as a vehicle for tax relief measures. On December 2, 2010, the House agreed to adopt an amendment to H.R. 4853 , as amended by the Senate, by a vote of 234 (231-D, 3-R) to 188 (168-R, 20-D)."], "subsections": []}, {"section_title": "Senate Action as Amended", "paragraphs": ["The Senate immediately began deliberation of its version of tax relief in response to the House amendment to the Senate amendment of H.R. 4853 . On December 9, 2010, the Senate produced a new substitute to H.R. 4853 , in the form of yet another amendment. This version included a provision to grant a one year partial payroll tax \"holiday\" to workers and the self-employed in 2011. The holiday was packaged as a two percentage point reduction in the FICA and SECA payroll tax rates.", "On December 15, 2010, the Senate approved this new version of the bill, by a vote of 81 (43-D, 37-R, 1-I) to 19 (13-D, 5-R, 1-I)."], "subsections": []}, {"section_title": "House Action Approved Amendment", "paragraphs": ["On December 17, 2010, the House approved the latest Senate version of H.R. 4853 (officially, the Senate amendment to the House amendment to the Senate amendment of H.R. 4853 ). The House approved the measure by a vote of 277 (139-D, 138-R) to 148 (112-D, 36-R)."], "subsections": []}]}, {"section_title": "P.L. 112-78, Temporary Payroll Tax Cut Continuation Act of 2011", "paragraphs": ["President Obama signed H.R. 3765 , the Temporary Payroll Tax Cut Continuation Act of 2011, on December 23, 2011. Section 101 of the law extended the expiring temporary Social Security payroll tax contribution rates that were provided in P.L. 111-312 , the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ( P.L. 111-312 ), effective in calendar year 2011, into calendar year 2012. In addition to the Social Security payroll tax provisions, P.L. 112-78 also included extensions of unemployment insurance and health provisions, as well as provisions relating to mortgage fees and the construction of a transcontinental oil pipeline.", "Specifically, the Social Security portion of the payroll tax applied to the covered net earnings of SECA-covered self-employed workers remained reduced throughout 2012 at 10.4%, down from the SECA tax rate of 12.4%. The act also extended the 2011 temporary reduction of the FICA tax rate on employee covered earnings from 6.2% to 4.2% through February 2012 only.", "Throughout 2011, several proposals were introduced to extend the 2011 temporary payroll tax reductions through calendar year 2012. H.R. 3630 received attention as the vehicle for a year-long extension, which had bipartisan and bicameral support, but the bill stalled as respective versions advanced by the House and Senate differed on how to replace revenue lost as a result of the payroll tax rate reductions. Ultimately, H.R. 3765 emerged as a short-term compromise, and it extended the payroll tax reductions for two months. The year-long extension of payroll tax cuts through calendar year 2012 is addressed in the \"P.L. 112-96, The Middle Class Tax Relief and Job Creation Act of 2012\" section below, in which Congress revisited H.R. 3630 after the adoption of H.R. 3765 into P.L. 112-78 ."], "subsections": [{"section_title": "House Action", "paragraphs": ["On December 23, 2011, the House approved H.R. 3765 , introduced by Representative Dave Camp (R-MI) without objection."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On December 23, 2011, the Senate approved H.R. 3765 by unanimous consent."], "subsections": []}]}, {"section_title": "P.L. 112-96, Middle Class Tax Relief and Job Creation Act of 2012", "paragraphs": ["President Obama signed H.R. 3630 , the Middle Class Tax Relief and Job Creation Act of 2012, on February 22, 2012. Section 1001 of the law further extended, through 2012, expiring reduced Social Security payroll tax contribution rates first provided in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ( P.L. 111-312 ).", "The payroll tax rate reductions included in P.L. 113-312 addressed above in the \"P.L. 111-312, The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010\" section, were initially intended to be applied only in 2011. These rate reductions were extended for an additional two months, through February 2012, by the Temporary Payroll Tax Cut Continuation Act of 2011 ( P.L. 112-78 ). The Middle Class Tax Relief and Job Creation Act of 2012 further extended the rate reductions through the end of calendar year 2012.", "In addition to the Social Security payroll tax provisions, P.L. 112-96 also included extensions of unemployment insurance, health, and welfare provisions, as well as provisions relating to the retirement contributions for federal employees and to public safety programs.", "In the second session of the 112 th Congress, the House and Senate came to an agreement on how to pay for the provisions in H.R. 3630 , and the legislation advanced with the filing of a conference report on February 16, 2012. The temporary payroll tax rates extended under P.L. 112-96 expired at the end of 2012. The tax rates returned to 6.2% of covered earnings for employees and 12.4% of covered net earnings for the self-employed in 2013."], "subsections": [{"section_title": "House Action", "paragraphs": ["On December 13, 2011, the House approved H.R. 3630 , the Middle Class Tax Relief and Job Creation Act of 2011, introduced by Representative Dave Camp (R-MI), by a vote of 234 (224-R, 10-D) to 193 (14-R, 179-D)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On December 17, 2011, the Senate approved its version of H.R. 3630 , as an amendment in the nature of a substitute and renamed the Temporary Payroll Tax Cut Continuation Act of 2011 by Majority Leader Harry Reid (D-NV), by a vote of 89 (49-D, 39-R, 1-I) to 10 (2-D, 7-R, 1-I)."], "subsections": []}, {"section_title": "House Action as Agreed", "paragraphs": ["On February 17, 2012, the House agreed to the conference report of the bill, now identified as the Middle Class Tax Relief and Job Creation Act of 2012, by a vote of 293 (147-D, 146-R) to 132 (91-R, 41-D)."], "subsections": []}, {"section_title": "Senate Action as Agreed", "paragraphs": ["On February 17, 2012, the Senate agreed to the conference report by a vote of 60 (45-D, 14-R, 1-I) to 36 (30-R, 5-D, 1-I)."], "subsections": []}]}, {"section_title": "P.L. 113-270, No Social Security for Nazis Act", "paragraphs": ["President Barack Obama signed into law H.R. 5739 , the No Social Security for Nazis Act, on December 18, 2014. Before P.L. 113-270 , Title II of the Social Security Act provided for the termination of Social Security benefits for individuals who were ordered removed due to participation in Nazi persecutions, genocide, torture, or extrajudicial killings under Section 237(a)(4)(D) of the Immigration and Nationality Act. SSA was required to terminate benefits for such individuals upon notification that final orders of removal were issued against the individuals. Physical removal of the individual from the United States was not a necessary condition for the termination of benefits in such cases as it is with all other individuals who have been ordered removed; rather, the issuance of a final order of removal was the basis for the termination of benefits.", "P.L. 113-270 expanded the conditions under which Social Security benefits would be terminated for those who participated in Nazi persecutions. In addition, under P.L. 113-270 , benefits would be reinstated for those who are ordered removed based on participation in genocide, torture, or extrajudicial killings until those persons are physically removed.", "The act broadened the existing provision of the Social Security Act described above for those who participated in Nazi persecutions in response to concerns that certain individuals believed to have participated in Nazi persecutions during World War II have been living outside the United States and receiving Social Security benefits. Specifically, concern focused on a small surviving group of individuals who had lived in the United States previously and, due to their participation in Nazi persecutions, had been under investigation by the Department of Justice and left the country before being ordered removed. Because these individuals left the United States before being issued an order of removal, their Social Security benefits were not subject to termination. (These individuals would also have met other requirements for the payment of Social Security benefits outside the United States.)", "P.L. 113-270 provided for the termination of Social Security benefits for these additional individuals determined to have participated in Nazi persecutions, and it prohibited them from receiving Social Security benefits based on another person's work record. It also clarified the timeframe in which the Department of Justice or the Department of Homeland Security must notify SSA of certain actions involving these individuals. The change in benefit eligibility for those who participated in genocide, torture, or extrajudicial killings as a result of P.L. 113-270 (i.e., making the physical removal of such individuals from the United States a necessary condition for the termination of benefits, rather than the issuance of a final order of removal ) is likely an unintended consequence of the legislative language."], "subsections": [{"section_title": "House Action", "paragraphs": ["On December 2, 2014, the House moved to suspend the rules and pass H.R. 5739 by a vote of 420 (228-R, 192-D) to 0."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On December 4, 2014, H.R. 5739 was passed by the Senate without amendment by unanimous consent. "], "subsections": []}]}, {"section_title": "P.L. 114-74, Bipartisan Budget Act of 2015", "paragraphs": ["President Barack Obama signed into law the Bipartisan Budget Act of 2015 ( H.R. 1314 ) on November 2, 2015. The broad budget legislation contained a number of Social Security-related provisions, including changes to rules that apply when a person files an application for Social Security benefits, and a temporary reallocation of Social Security payroll tax revenues from the Old-Age and Survivors Insurance (OASI) Trust Fund to the Disability Insurance (DI) Trust Fund."], "subsections": [{"section_title": "Changes to Social Security's Filing Rules", "paragraphs": ["Section 831 of P.L. 114-74 made changes to two types of filing rules: (1) deemed filing and (2) the voluntary suspension of benefits . The changes affect options available to claimants who are full retirement age (FRA) or older (the FRA ranges from 65 to 67, depending on the person's year of birth)."], "subsections": [{"section_title": "Deemed Filing", "paragraphs": ["A worker who qualifies for both a retired-worker benefit and a spousal benefit generally cannot restrict his or her application to only one type of benefit. Rather, when the person files for one benefit, he or she is required (or deemed) to file for the other benefit at the same time. The person becomes simultaneously entitled to a retired-worker benefit and a spousal benefit, and the spousal benefit is reduced under the dual entitlement rule . Under the dual entitlement rule, a person receives his or her own retired-worker benefit first, plus a spousal benefit that has been reduced by the amount of the retired-worker benefit (the spousal benefit may be reduced to zero). In effect, the person receives the higher of the two benefit amounts (not both). ", "Before P.L. 114-74 , deemed filing applied only to claimants who are below FRA . A claimant who was FRA or older could file a restricted application for benefits; that is, he or she could file for spousal benefits only, for example, and wait until a later time to file for retired-worker benefits. This would allow the person to receive a full spousal benefit now (the dual entitlement rule would not be applied at this time) and to file for a higher retired-worker benefit later. When the person filed for his or her own retired-worker benefit later on, the spousal benefit would then be reduced under the dual entitlement rule. Some beneficiaries used this \"claiming strategy\" as a way to maximize their Social Security retired-worker and spousal benefits.", "P.L. 114-74 eliminated the restricted application option for claimants who are FRA or older. Like claimants who are below FRA, they are deemed to file for both a retired-worker benefit and a spousal benefit, if eligible for both. The deemed filing change is effective for people born in 1954 or later (i.e., people who reach age 62\u2014the age at which one first becomes eligible for retirement benefits\u2014on or after January 2, 2016). People born before 1954 (i.e., people who reached age 62 before January 2, 2016) are \"grandfathered\" under the old rules. They can file a restricted application for spousal benefits only or retired-worker benefits only when they reach FRA . If they claim benefits before FRA, they are subject to deemed filing rules. "], "subsections": []}, {"section_title": "Voluntary Suspension of Benefits", "paragraphs": ["Social Security benefits replace a portion of earnings lost due to the worker's retirement, disability, or death. Therefore, family members generally cannot claim benefits on a worker's record if the worker has not claimed benefits. Before P.L. 114-74 , a worker who was FRA or older could file an application for retired-worker benefits and then request that the benefit payments be suspended. This \"file and suspend\" approach (1) allowed the worker to accrue delayed retirement credits (DRCs) during the period of voluntary suspension (i.e., his or her retired-worker benefit would increase 8% per year from FRA up to age 70) and at the same time (2) allowed eligible family members (such as a spouse or dependent child) to claim benefits on the worker's record.", "In addition, a beneficiary who had voluntarily suspended his or her own retired-worker benefit could receive a spousal or widow(er)'s benefit based on another person's record. A spousal or widow(er)'s benefit would be reduced under the dual entitlement rule as if the beneficiary's own retired-worker benefit had not been suspended (i.e., the beneficiary could receive any excess spousal or widow(er)'s benefits). A worker could also \"unsuspend\" his or her benefits on a retroactive basis and receive a lump sum payment for the past-due period. ", "Under P.L. 114-74 , a worker who is FRA or older can file for retired-worker benefits and voluntarily suspend benefits between FRA and age 70 to accrue DRCs (as before). This approach could be used by a beneficiary who claims retired-worker benefits and then returns to work, for example. Under the new rules, however, benefits are no longer payable to eligible family members based on the worker's record during the period of voluntary suspension, with the exception of divorced spouses . A divorced spouse may collect benefits on the worker's record during the period of suspension. Widow(er)'s benefits are also payable on the record of a deceased worker who had suspended his or her own retired-worker benefits.", "In addition, a worker can no longer receive benefits based on another person's record while his or her own retired-worker benefit is suspended; nor can a worker \"unsuspend\" his or her benefits retroactively and receive a lump sum payment. The period of voluntary suspension ends with the earlier of (1) the month before the person turns age 70, or (2) the month following the person's request to resume benefit payments. The changes apply to requests for the voluntary suspension of benefits made after April 29, 2016. ", "The changes to Social Security's filing rules were intended to prevent the use of \"claiming strategies\" viewed as inconsistent with the concept behind Social Security spousal benefits, and that otherwise allowed workers and spouses to collect more in Social Security benefits than Congress intended. Before P.L. 114-74 , a person who was FRA or older could claim spousal benefits only, when he or she also qualified for retired-worker benefits. As a result, the person could receive full spousal benefits for several years, before claiming a higher retired-worker benefit and only then being subject to the dual entitlement rule. In addition, the \"restricted application\" and \"file and suspend\" options were being used in combination by some married couples, for example, to allow both members of the couple to maximize their own retired-worker benefit (through the accrual of DRCs) and to allow one member of the couple to receive full spousal benefits at the same time (by avoiding the dual entitlement rule)."], "subsections": []}]}, {"section_title": "Social Security Payroll Tax Reallocation", "paragraphs": ["In July 2015, the Social Security Board of Trustees (the Trustees) released projections showing that the asset reserves held by the DI trust fund would be depleted by the end of calendar year 2016; had this occurred, Social Security would have been unable to pay disability benefits in full and on time from that point forward. Section 833 of P.L. 114-74 provided a temporary reallocation of the Social Security payroll tax rate between the OASI and DI trust funds, directing a larger share of total payroll tax revenues to the DI trust fund over a three-year period (2016 through 2018). Updated projections following enactment of P.L. 114-74 show that the reallocation extends DI trust fund solvency from the end of calendar year 2016 to c alendar year 202 3 . The reallocation did not change the year of projected reserve depletion for the OASI trust fund; it is projected to remain solvent until calendar year 2035.", "P.L. 114-74 also contained a number of other provisions designed to address fraud and other program integrity issues in SSA's disability programs.", "On March 4, 2015, Representative Patrick Meehan (PA) introduced H.R. 1314 , the Ensuring Tax Exempt Organizations the Right to Appeal Act. At the time, the bill contained no Social Security provisions. The bill was approved by the House on April 15, 2015, and was moved to the Senate. On May 22, 2015, the Senate passed H.R. 1314 , with an amendment in the nature of a substitute, and it was now known as the Trade Act of 2015. After attempts by the House to resolve differences with the Senate amendment (which still did not contain Social Security provisions), the Trade Act of 2015 was tabled on June 25, 2015. On October 28, 2015, the House reported an amendment to the Senate amendment of H.R. 1314 , now titled the Bipartisan Budget Act of 2015. The version of H.R. 1314 reported in the House amendment included the Social Security tax rate reallocation and the unrelated provisions mentioned above. Details of congressional action prior to the bill being renamed the Bipartisan Budget Act of 2015 are not reflected in this report."], "subsections": []}, {"section_title": "House Action", "paragraphs": ["On October 28, 2015, the House adopted their amendment to H.R. 1314 , as amended by the Senate, by a vote of 266 (187-D, 79-R) to 167 (167-R)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On October 30, 2015, the Senate agreed to the House amendment to the Senate amendment to H.R. 1314 by a vote of 64 (44-D, 18-R, 2-I) to 35 (35-R)."], "subsections": []}]}, {"section_title": "P.L. 115-8, Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Social Security Administration relating to Implementation of the NICS Improvement Amendments Act of 2007", "paragraphs": ["President Donald Trump signed H.J.Res . 40 on February 28, 2017. Under the Congressional Review Act, the law nullified the \"Implementation of the NICS Improvement Amendments Act of 2007\" rule which was finalized by the SSA on December 19, 2016, and had been scheduled to be implemented as of January 18, 2017. The final rule would have required the SSA to send the names of individuals meeting certain criteria to the National Instant Criminal History Background Check System. The criteria included individuals who received benefit payments through a representative payee because they had been determined to be mentally incapable of managing benefit payments on their own. The proposed rule received over 90,000 comments.", "This law vacated the SSA final rule. It also barred the SSA from issuing any future rule that would be \"substantially the same\" as the vacated rule unless the agency received a new statutory authorization to do so.", "In the retraction of the rule, SSA notes that, \"Although the final rule had an effective date of January 18, 2017, we delayed the compliance date of the rule until December 19, 2017 (81 FR at 91720). Therefore, we did not report any records to the National Instant Criminal Background Check System (NICS) pursuant to the final rule.\""], "subsections": [{"section_title": "House Action", "paragraphs": ["H.J.Res . 40 was i ntroduced by Representative Sam Johnson (R-TX) on January 30, 2017, and the House debated the joint resolution on February 2, 2017 . Members raised multiple issues, including the concern that the SSA rule stigmatized those with mental health issues or intellectual disabilities. They cited letters from several advocacy groups, as well as a letter from the National Council on Disability favoring the joint resolution. Representatives voicing opposition to the joint resolution cited several factors including that the SSA final rule only impacted a small subset of beneficiaries and that the joint resolution disregarded the decisionmaking processes of the agency. At the conclusion of debate, the resolution was passed by a voice vote. A recorded vote occurred later that afternoon, and H.J.Res . 40 was passed by a vote of 235 (R-229, D-6) to 180 (R-2, D-178)."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On February 15, 2017, H.J.Res . 40 was passed by the Senate without amendment by a vote of 57 (R-52, D-4, I-1) to 43 (D-42, I-1)."], "subsections": []}]}, {"section_title": "P.L. 115-59, Social Security Number Fraud Prevention Act of 2017", "paragraphs": ["President Donald Trump signed H.R. 624 , the Social Security Number Fraud Prevention Act of 2017, on September 15, 2017. The law included several provisions to limit federal agencies from including an individual's SSN on documents sent by mail. It requires the head of each CFO (chief financial officer) Act agency to issue regulations no later than five years after enactment, which specify the circumstances under which a Social Security number would be necessary to include on a document sent by mail. In addition, it stipulates that each agency must issue several reports demonstrating the agency's progress in removing the SSN from agency documents. The final report would list any remaining documents produced by the CFO Act agency that continued to include an SSN."], "subsections": [{"section_title": "House Action", "paragraphs": ["H.R. 624 was introduced by Representative David G. Valadao (R-CA) on January 24, 2017. The Committee on Oversight and Government Reform adopted, by voice vote, a substitute amendment extending the deadline for issuing regulations from one year to five years on February 14, 2017. The House approved the bill, as amended, under suspension of the rules by a voice vote on May 24, 2017. "], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On September 6, 2017, H.R. 624 was passed by the Senate without amendment by unanimous consent."], "subsections": []}]}, {"section_title": "P.L. 115-165, Strengthening Protections for Social Security Beneficiaries Act of 2018", "paragraphs": ["President Donald Trump signed H.R. 4547 on April 13, 2018. The law amended Titles II, VIII, and XVI of the Social Security Act. It was designed to increase oversight of representative payees and protect vulnerable beneficiaries. The law required the SSA to make annual grants to each state's protection and advocacy system for the purpose of conducting reviews of representative payees under the Supplemental Security Income (SSI) program and the Old-Age, Survivors, and Disability Insurance (OASDI) program.", "Impetus for this law came as details emerged of significant cases of abuse by representative payees. In one case, reported by the SSA's Office of Inspector General, a woman in Philadelphia imprisoned mentally ill adults and confiscated their Social Security benefits by identifying herself as their representative payee. This case, and similar ones, led to the publication of two reports by the Social Security Advisory Board: Representative Payees: A Call to Action (2016) and Improving Social Security's Representative Payee Program (2018). The GAO also published a report, SSA Representative Payee Program: Addressing Long-Term Challenges Requires a More Strategic Approach (2013). ", "The Social Security Subcommittee of the House Committee on Ways and Means held hearings in 2017 on the representative payee program, including Examining the Social Security Administration's Representative Payee Program: Determining Who Needs Help on February 7, 2017, and Examining the Social Security Administration's Representative Payee Program: Who Provides Help on March 22, 2017. ", "P.L. 115-165 included a provision designed to enhance personal control by allowing beneficiaries to designate their preferred payee in advance. It directed SSA to take a greater role in assessing the appropriateness of representative payees, and banned individuals with certain criminal convictions from serving as payees. In addition, it prohibited individuals who have a payee from serving as a payee for others. "], "subsections": [{"section_title": "House Action", "paragraphs": ["H.R. 4547 was introduced on December 5, 2017, by Representative Sam Johnson (R-TX). It was referred to the House Committee on Ways and Means. On February 5, 2018, the House moved to suspend the rules and passed H.R. 4547 , as amended, by a vote of 396 (225-R, 171-D) to 0."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On March 23, 2018, the Senate passed the House bill without amendment by unanimous consent."], "subsections": []}]}, {"section_title": "P.L. 115-243, Tribal Social Security Fairness Act of 2018", "paragraphs": ["President Donald Trump signed H.R. 6124 , the Tribal Social Security Fairness Act of 2018, on September 20, 2018. The law amended Title II of the Social Security Act and directed the SSA to extend Old-Age, Survivors and Disability Insurance benefits to tribal council leaders, if requested to do so by an Indian tribe. The law also allowed tribal council members to receive Social Security credit for taxes paid prior to the establishment of the agreement, if taxes were paid in good faith and not subsequently refunded. It reversed an SSA policy that prevented tribal leaders from being covered under the Social Security program. "], "subsections": [{"section_title": "House Action", "paragraphs": ["H.R. 6124 was introduced by Representative Dave Reichert (R-WA) on June 15, 2018. An amendment in the nature of a substitute was presented in the Committee on Ways and Means by Representative Kevin Brady (R-TX). The substitute amendment was adopted by a voice vote in committee on June 21, 2018. ", "H.R. 6124 , as amended, was considered by the House under suspension of the rules and passed by a voice vote on July 24, 2018."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On September 6, 2018, the House bill passed the Senate without amendment by unanimous consent."], "subsections": []}]}, {"section_title": "P.L. 115-174, Economic Growth, Regulatory Relief, and Consumer Protection Act", "paragraphs": ["President Donald Trump signed S. 2155 , the Economic Growth, Regulatory Relief, and Consumer Protection Act, on May 24, 2018. Section 215 required SSA to accept the electronic signature of an individual who consents to allow a financial institution to verify his or her name, date of birth, and Social Security number using SSA's Consent Based Social Security Number Verification (CBSV) Service.", "Some identity thieves use a technique called synthetic identity theft in which they apply for credit using a mixture of real, verifiable information of an existing person with fictitious information, thus creating a \"synthetic\" identity. Often the information includes real SSNs of people who are unlikely to have existing credit files, such as children or recent immigrants. The SSA Consent-Based Social Security Number Verification Service was created to fight identity fraud such as this, but prior to the enactment of P.L. 115-174 it required financial institutions to obtain a physical written signature to make a verification request. Some observers believed this requirement was outdated and time consuming, undermining the effectiveness of the program. Section 215 aimed to modernize SSA's verification system and make it more efficient by allowing the use of electronic signatures.", "Section 215 directed the SSA to allow certain financial institutions to receive customers' consent by electronic signature to verify their name, date of birth, and Social Security number with SSA. In addition, the section directed SSA to modify their databases and systems to allow financial institutions to electronically and quickly request and receive accurate verification of the consumer data."], "subsections": [{"section_title": "Senate Action", "paragraphs": ["Senator Mike Crapo introduced S. 2155 on November 16, 2017. As introduced, the bill did not include any Social Security provisions. S.Amdt. 2151 , an amendment in the nature of a substitute, which included the Social Security provisions in Section 215, was offered on the Senate floor on March 7, 2018. During floor debate, Senator Tim Scott identified himself as the author of the provisions in Section 215. Senator Scott explained that the purpose of Section 215 was to reduce synthetic identity theft by providing options for entities to crosscheck consumer information with the SSA. Senator Scott also expressed his expectation that the database that SSA would create to allow this cross check to occur would be operational within one year of enactment.", "S.Amdt. 2151 , as modified, passed the Senate by a roll call vote of 67 (R-50, D-16, I-1) to 31(D-30, I-1) on March 14, 2018."], "subsections": []}, {"section_title": "House Action", "paragraphs": ["On May 22, 2018, the House passed the Senate version of the bill in a roll call vote of 258 (R-225, D-33) to 159 (R-1, D-158)."], "subsections": []}]}]}]}}
{"id": "RL30354", "title": "Monetary Policy and the Federal Reserve: Current Policy and Conditions", "released_date": "2019-02-22T00:00:00", "summary": ["Congress has delegated responsibility for monetary policy to the Federal Reserve (the Fed), the nation's central bank, but retains oversight responsibilities for ensuring that the Fed is adhering to its statutory mandate of \"maximum employment, stable prices, and moderate long-term interest rates.\" To meet its price stability mandate, the Fed has set a longer-run goal of 2% inflation.", "The Fed's control over monetary policy stems from its exclusive ability to alter the money supply and credit conditions more broadly. Normally, the Fed conducts monetary policy by setting a target for the federal funds rate, the rate at which banks borrow and lend reserves on an overnight basis. It meets its target through open market operations, financial transactions traditionally involving U.S. Treasury securities. Beginning in 2007, the federal funds target was reduced from 5.25% to a range of 0% to 0.25% in December 2008, which economists call the zero lower bound. By historical standards, rates were kept unusually low for an unusually long time to mitigate the effects of the financial crisis and its aftermath. Starting in December 2015, the Fed has been raising interest rates and expects to gradually raise rates further. The Fed raised rates once in 2016, three times in 2017, and four times in 2018, by 0.25 percentage points each time. In light of increased economic uncertainty and financial volatility, the Fed announced in January 2019 that it would be \"patient\" before raising rates again.", "The Fed influences interest rates to affect interest-sensitive spending, such as business capital spending on plant and equipment, household spending on consumer durables, and residential investment. In addition, when interest rates diverge between countries, it causes capital flows that affect the exchange rate between foreign currencies and the dollar, which in turn affects spending on exports and imports. Through these channels, monetary policy can be used to stimulate or slow aggregate spending in the short run. In the long run, monetary policy mainly affects inflation. A low and stable rate of inflation promotes price transparency and, thereby, sounder economic decisions.", "The Fed's relative independence from Congress and the Administration has been justified by many economists on the grounds that it reduces political pressure to make monetary policy decisions that are inconsistent with a long-term focus on stable inflation. But independence reduces accountability to Congress and the Administration, and recent legislation and criticism of the Fed by the President has raised the question about the proper balance between the two.", "While the federal funds target was at the zero lower bound, the Fed attempted to provide additional stimulus through unsterilized purchases of Treasury and mortgage-backed securities (MBS), a practice popularly referred to as quantitative easing (QE). Between 2009 and 2014, the Fed undertook three rounds of QE. The third round was completed in October 2014, at which point the Fed's balance sheet was $4.5 trillion\u2014five times its precrisis size. After QE ended, the Fed maintained the balance sheet at the same level until September 2017, when it began to very gradually reduce it to a more normal size. The Fed has raised interest rates in the presence of a large balance sheet through the use of two new tools\u2014by paying banks interest on reserves held at the Fed and by engaging in reverse repurchase agreements (reverse repos) through a new overnight facility. In January 2019, the Fed announced that it would continue using these tools to set interest rates permanently, in which case the balance sheet may not get much smaller than its current size of $4 trillion.", "With regard to its mandate, the Fed believes that unemployment is currently lower than the rate that it considers consistent with maximum employment, and inflation is close to the Fed's 2% goal by the Fed's preferred measure. Even after recent rate increases, monetary policy is still considered expansionary. This monetary policy stance is unusually stimulative compared with policy in this stage of previous expansions, and is being coupled with a stimulative fiscal policy (larger structural budget deficit). Debate is currently focused on how quickly the Fed should raise rates. Some contend the greater risk is that raising rates too slowly at full employment will cause inflation to become too high or cause financial instability, whereas others contend that raising rates too quickly will cause inflation to remain too low and choke off the expansion."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Federal Reserve's (the Fed's) responsibilities as the nation's central bank fall into four main categories: monetary policy, provision of emergency liquidity through the lender of last resort function, supervision of certain types of banks and other financial firms for safety and soundness, and provision of payment system services to financial firms and the government. ", "Congress has delegated responsibility for monetary policy to the Fed, but retains oversight responsibilities to ensure that the Fed is adhering to its statutory mandate of \"maximum employment, stable prices, and moderate long-term interest rates.\" The Fed has defined stable prices as a longer-run goal of 2% inflation\u2014the change in overall prices, as measured by the Personal Consumption Expenditures (PCE) price index. By contrast, the Fed states that \"it would not be appropriate to specify a fixed goal for employment; rather, the Committee's policy decisions must be informed by assessments of the maximum level of employment, recognizing that such assessments are necessarily uncertain and subject to revision.\" Monetary policy can be used to stabilize business cycle fluctuations (alternating periods of economic expansions and recessions) in the short run, while it mainly affects inflation in the long run. The Fed's conventional tool for monetary policy is to target the federal funds rate \u2014the overnight, interbank lending rate.", "This report provides an overview of how monetary policy works and recent developments, a summary of the Fed's actions following the financial crisis, and ends with a brief overview of the Fed's regulatory responsibilities. "], "subsections": []}, {"section_title": "Recent Monetary Policy Developments", "paragraphs": ["In December 2008, in the midst of the financial crisis and the \"Great Recession,\" the Fed lowered the federal funds rate to a range of 0% to 0.25%. This was the first time rates were ever lowered to what is referred to as the zero lower bound . The recession ended in 2009, but as the economic recovery consistently proved weaker than expected in the years that followed, the Fed repeatedly pushed back its time frame for raising interest rates. As a result, the economic expansion was in its seventh year and the unemployment rate was already near the Fed's estimate of full employment when it began raising rates on December 16, 2015. This was a departure from past practice\u2014in the previous two economic expansions, the Fed began raising rates within three years of the preceding recession ending. Since then, the Fed has continued to raise rates in a series of steps to incrementally tighten monetary policy. The Fed raised rates once in 2016, three times in 2017, and four times in 2018, by 0.25 percentage points each time. The Fed has stated that \"some further gradual increases in ... the federal funds rate\" are necessary to fulfill its mandate. The Fed describes its plans as \"data dependent,\" meaning they would be altered if actual employment or inflation deviate from its forecast.", "Although monetary policy is now less stimulative than it had been at the zero lower bound, the Fed is still adding stimulus to the economy as long as the federal funds rate is below what economists call the \"neutral rate\" (or the long-run equilibrium rate). To illustrate, the federal funds rate is currently similar to the inflation rate, meaning that the real (i.e., inflation-adjusted) federal funds rate is around zero. However, there is uncertainty as to what constitutes a neutral rate today. By historical standards, a zero real interest rate would be well below the neutral rate, but the neutral rate appears to have fallen following the financial crisis, so that current rates may be close to the neutral rate today. ", "Typically, the Fed keeps interest rates below the neutral rate when the economy is operating below full employment, at neutral levels when the economy is near full employment, and above the neutral rate when the economy is at risk of overheating. Indeed, the Fed identifies this as one of its \"three key principles of good monetary policy.\" Because of lags between changes in interest rates and their economic effects, in the past, the Fed has often preemptively changed its monetary policy stance before the economy reaches the state that the Fed is anticipating.", "In this business cycle, the Fed has maintained a (progressively less) stimulative monetary policy throughout the expansion, boosting economic activity. In one sense, this policy could be viewed as having successfully delivered on the Fed's mandated goals of full employment and stable prices. The unemployment rate has been below 5% since 2015 and is now lower than the rate believed to be consistent with full employment. Other labor market measures are also consistent with full employment, with the possible exception of the still-low labor force participation rate. Economic theory posits that lower unemployment will lead to higher inflation in the short run, but inflation has not proven responsive to lower unemployment in recent years. After remaining persistently below the Fed's 2% target from mid-2012 to early 2018 as measured by core PCE, inflation has remained around 2% in 2018 as measured by headline or core PCE. Economic growth has also picked up beginning in the second quarter of 2017, after being persistently low by historical standards throughout the expansion.", "Contributing to the 2018 growth acceleration, a more expansionary fiscal policy (larger structural budget deficit) added more stimulus to the economy in the short run. Two notable policy changes contributing to fiscal stimulus in 2018 were the 2017 tax cuts ( P.L. 115-97 ) and the boost to discretionary spending in FY2018 and FY2019 agreed to in P.L. 115-123 . The Fed did little to offset this fiscal stimulus, as the pace of monetary tightening in 2018 was only slightly faster than in 2017.", "Despite strong economic data (which is only available with a lag), the Fed announced in January 2019 that it would be \"patient\" before raising rates again in light of increased economic uncertainty and financial volatility. The Fed's intended policy path poses risks. If the Fed waits too long to raise rates again, the economy could overheat, resulting in high inflation and posing risk to financial stability. As an example of how overly stimulative monetary policy can lead to the latter, critics contend that the Fed contributed to the precrisis housing bubble by keeping interest rates too low for too long during the economic recovery starting in 2001. Critics see these risks as outweighing any marginal benefit associated with monetary stimulus when the economy is already so close to full employment. Raising rates more quickly would also provide more \"headroom\" for the Fed to lower rates more aggressively during the next economic downturn. The potential percentage point reduction in rates before hitting the zero bound is currently smaller than the rate cuts that the Fed has undertaken in past recessions. ", "Alternatively, there is uncertainty about whether strong growth, low unemployment, inflation around 2%, and the generally benign economic environment will continue. Economic expansions do not \"die of old age\"; nevertheless, the current expansion is already the second longest on record and cannot last forever. The flattening of the yield curve (i.e., long-term Treasury yields are similar to short-term Treasury yields) is seen by some as a warning signal that rates are too high. Although there is a risk of stimulative monetary policy causing the economy to overheat, there is also a risk that tightening too quickly could be harmful if the economy slows. Some critics would prefer clear evidence that inflation is above the Fed's target or financial conditions are unstable before the Fed raises rates again."], "subsections": []}, {"section_title": "How Does the Federal Reserve Execute Monetary Policy?", "paragraphs": ["Monetary policy refers to the actions the Fed undertakes to influence the availability and cost of money and credit to promote the goals mandated by Congress, a stable price level and maximum sustainable employment. Because the expectations of households as consumers and businesses as purchasers of capital goods exert an important influence on the major portion of spending in the United States, and because these expectations are influenced in important ways by the Fed's actions, a broader definition of monetary policy would include the directives, policies, statements, economic forecasts, and other Fed actions, especially those made by or associated with the chairman of its Board of Governors, who is the nation's central banker.", "The Fed's Federal Open Market Committee (FOMC) meets every six weeks to choose a federal funds target and sometimes meets on an ad hoc basis if it wants to change the target between regularly scheduled meetings. The FOMC is composed of the 7 Fed governors, the President of the Federal Reserve Bank of New York, and 4 of the other 11 regional Federal Reserve Bank presidents serving on a rotating basis."], "subsections": [{"section_title": "Policy Tools", "paragraphs": ["The Fed targets the federal funds rate to carry out monetary policy. The federal funds rate is determined in the private market for overnight reserves of depository institutions (called the federal funds market). At the end of a given period, usually a day, depository institutions must calculate how many dollars of reserves they want or need to hold against their reservable liabilities (deposits). Some institutions may discover a reserve shortage (too few reservable assets relative to those they want to hold), whereas others may have reservable assets in excess of their wants. These reserves can be borrowed and lent on an overnight basis in a private market called the federal funds market. The interest rate in this market is called the federal funds rate. If it wishes to expand money and credit, the Fed will lower the target, which encourages more lending activity and, thus, greater demand in the economy. Conversely, if it wishes to tighten money and credit, the Fed will raise the target. ", "The federal funds rate is linked to the interest rates that banks and other financial institutions charge for loans. Thus, whereas the Fed may directly influence only a very short-term interest rate, this rate influences other longer-term rates. However, this relationship is far from being on a one-to-one basis because longer-term market rates are influenced not only by what the Fed is doing today, but also by what it is expected to do in the future and by what inflation is expected to be in the future. This fact highlights the importance of expectations in explaining market interest rates. For that reason, a growing body of literature urges the Fed to be very transparent in explaining what its policy is, will be, and in making a commitment to adhere to that policy. The Fed has responded to this literature and is increasingly transparent in explaining its policy measures and what these measures are expected to accomplish.", "The Federal Reserve uses two methods to maintain its target for the federal funds rate:", "The Fed can also change the federal funds rate by changing reserve requirements, which specify what portion of customer deposits (primarily checking accounts) banks must hold as vault cash or on deposit at the Fed. Thus, reserve requirements affect the liquidity available within the federal funds market. Statute sets the numerical levels of reserve requirements, although the Fed has some discretion to adjust them. Currently, banks are required to hold 0% to 10% of customer deposits that qualify as net transaction accounts in reserves, depending on the size of the bank's deposits. This tool is used rarely\u2014the percentage was last changed in 1992.", "Each of these tools works by altering the overall liquidity available for use by the banking system, which influences the amount of assets these institutions can acquire. These assets are often called credit because they represent loans the institutions have made to businesses and households, among others."], "subsections": [{"section_title": "Targeting Interest Rates Versus Targeting the Money Supply", "paragraphs": ["The Fed's control over monetary policy stems from its exclusive ability to alter the money supply and credit conditions more broadly. The Fed directly controls the monetary base , which is made up of currency (Federal Reserve notes) and bank reserves. The size of the monetary base, in turn, influences broader measures of the money supply, which include close substitutes to currency, such as demand deposits (e.g., checking accounts) held at banks.", "The Fed's definition of monetary policy as the actions it undertakes to influence the availability and cost of money and credit suggests two ways to measure the stance of monetary policy. One is to look at the cost of money and credit as measured by the rate of interest relative to inflation (or inflation projections), and the other is to look at the growth of money and credit itself. Thus, it is possible to look at either interest rates or the growth in the supply of money and credit in coming to a conclusion about the current stance of monetary policy\u2014that is, whether it is expansionary (adding stimulus to the economy), contractionary (slowing economic activity), or neutral.", "During the high inflation experience of the 1970s the Fed placed greater emphasis on money supply growth, but since then, most central banks including the Fed have preferred to formulate monetary policy in terms of the cost of money and credit rather than in terms of their supply. The Fed conducts monetary policy by focusing on the cost of money and credit as proxied by the federal funds rate. "], "subsections": []}, {"section_title": "Real Versus Nominal Interest Rates", "paragraphs": ["A simple comparison of market interest rates over time as an indicator of changes in the stance of monetary policy is potentially misleading, however. Economists call the interest rate that is essential to decisions made by households and businesses to buy capital goods the real interest rate. It is often proxied by subtracting from the market interest rate the actual or expected rate of inflation. If inflation rises and market interest rates remain the same, then real interest rates have fallen, with a similar economic effect as if market rates (called nominal rates) had fallen by the same amount with a constant inflation rate. ", "The federal funds rate is only one of the many interest rates in the financial system that determines economic activity. For these other rates, the real rate is largely independent of the amount of money and credit over the longer run because it is determined by the interaction of saving and investment (or the demand for capital goods). The internationalization of capital markets means that for most developed countries the relevant interaction between saving and investment that determines the real interest rate is on a global basis. Thus, real rates in the United States depend not only on U.S. national saving and investment but also on the saving and investment of other countries. For that reason, national interest rates are influenced by international credit conditions and business cycles."], "subsections": []}]}, {"section_title": "Economic Effects of Monetary Policy in the Short Run and Long Run", "paragraphs": ["How do changes in short-term interest rates affect the overall economy? In the short run, an expansionary monetary policy that reduces interest rates increases interest-sensitive spending, all else equal. Interest-sensitive spending includes physical investment (i.e., plant and equipment) by firms, residential investment (housing construction), and consumer-durable spending (e.g., automobiles and appliances) by households. As discussed in the next section, it also encourages exchange rate depreciation that causes exports to rise and imports to fall, all else equal. To reduce spending in the economy, the Fed raises interest rates and the process works in reverse. ", "An examination of U.S. economic history will show that money- and credit-induced demand expansions can have a positive effect on U.S. GDP growth and total employment. The extent to which greater interest-sensitive spending results in an increase in overall spending in the economy in the short run will depend in part on how close the economy is to full employment. When the economy is near full employment, the increase in spending is likely to be dissipated through higher inflation more quickly. When the economy is far below full employment, inflationary pressures are more likely to be muted. This same history, however, also suggests that over the longer run, a more rapid rate of growth of money and credit is largely dissipated in a more rapid rate of inflation with little, if any, lasting effect on real GDP and employment. ", "Economists have two explanations for this paradoxical behavior. First, they note that, in the short run, many economies have an elaborate system of contracts (both implicit and explicit) that makes it difficult in a short period for significant adjustments to take place in wages and prices in response to a more rapid growth of money and credit. Second, they note that expectations for one reason or another are slow to adjust to the longer-run consequences of major changes in monetary policy. This slow adjustment also adds rigidities to wages and prices. Because of these rigidities, changes in the growth of money and credit that change aggregate demand can have a large initial effect on output and employment, albeit with a policy lag of six to eight quarters before the broader economy fully responds to monetary policy measures. Over the longer run, as contracts are renegotiated and expectations adjust, wages and prices rise in response to the change in demand and much of the change in output and employment is undone. Thus, monetary policy can matter in the short run but be fairly neutral for GDP growth and employment in the longer run.", "In societies in which high rates of inflation are endemic, price adjustments are very rapid. During the final stages of very rapid inflations, called hyperinflation, the ability of more rapid rates of growth of money and credit to alter GDP growth and employment is virtually nonexistent, if not negative."], "subsections": []}, {"section_title": "Monetary Versus Fiscal Policy", "paragraphs": ["Either fiscal policy (defined here as changes in the structural budget deficit, caused by policy changes to government spending or taxes) or monetary policy can be used to alter overall spending in the economy. However, there are several important differences to consider between the two.", "First, economic conditions change rapidly, and in practice monetary policy can be more nimble than fiscal policy. The Fed meets every six weeks to consider changes in interest rates and can call an unscheduled meeting any time. Large changes to fiscal policy typically occur once a year at most. Once a decision to alter fiscal policy has been made, the proposal must travel through a long and arduous legislative process that can last months before it can become law, whereas monetary policy changes are made instantly.", "Both monetary and fiscal policy measures are thought to take more than a year to achieve their full impact on the economy due to pipeline effects. In the case of monetary policy, interest rates throughout the economy may change rapidly, but it takes longer for economic actors to change their spending patterns in response. For example, in response to a lower interest rate, a business must put together a loan proposal, apply for a loan, receive approval for the loan, and then put the funds to use. In the case of fiscal policy, once legislation has been enacted, it may take some time for authorized spending to be outlayed. An agency must approve projects and select and negotiate with contractors before funds can be released. In the case of transfers or tax cuts, recipients must receive the funds and then alter their private spending patterns before the economy-wide effects are felt. For both monetary and fiscal policy, further rounds of private and public decisionmaking must occur before multiplier or ripple effects are fully felt.", "Second, monetary policy is determined based only on the Fed's mandate, whereas fiscal policy is determined based on competing political goals. Fiscal policy changes have macroeconomic implications regardless of whether that was policymakers' primary intent. Political constraints have prevented increases in budget deficits from being fully reversed during expansions. Over the course of the business cycle, aggregate spending in the economy can be expected to be too high as often as it is too low. This means that stabilization policy should be tightened as often as it is loosened, yet increasing the budget deficit has proven to be much more popular than implementing the spending cuts or tax increases necessary to reduce it. As a result, the budget has been in deficit in all but five years since 1961, which has led to an accumulation of federal debt that gives policymakers less leeway to potentially undertake a robust expansionary fiscal policy, if needed, in the future. By contrast, the Fed is more insulated from political pressures, as discussed in the previous section, and experience shows that it is willing to raise or lower interest rates.", "Third, the long-run consequences of fiscal and monetary policy differ. Expansionary fiscal policy creates federal debt that must be serviced by future generations. Some of this debt will be \"owed to ourselves,\" but some (presently, about half) will be owed to foreigners. To the extent that expansionary fiscal policy crowds out private investment, it leaves future national income lower than it otherwise would have been. Monetary policy does not have this effect on generational equity, although different levels of interest rates will affect borrowers and lenders differently. Furthermore, the government faces a budget constraint that limits the scope of expansionary fiscal policy\u2014it can only issue debt as long as investors believe the debt will be honored, even if economic conditions require larger deficits to restore equilibrium.", "Fourth, openness of an economy to highly mobile capital flows changes the relative effectiveness of fiscal and monetary policy. Expansionary fiscal policy would be expected to lead to higher interest rates, all else equal, which would attract foreign capital looking for a higher rate of return, causing the value of the dollar to rise. Foreign capital can only enter the United States on net through a trade deficit. Thus, higher foreign capital inflows lead to higher imports, which reduce spending on domestically produced substitutes and lower spending on exports. The increase in the trade deficit would cancel out the expansionary effects of the increase in the budget deficit to some extent (in theory, entirely if capital is perfectly mobile). Expansionary monetary policy would have the opposite effect\u2014lower interest rates would cause capital to flow abroad in search of higher rates of return elsewhere, causing the value of the dollar to fall. Foreign capital outflows would reduce the trade deficit through an increase in spending on exports and domestically produced import substitutes. Thus, foreign capital flows would (tend to) magnify the expansionary effects of monetary policy. ", "Fifth, fiscal policy can be targeted to specific recipients. In the case of normal open market operations, monetary policy cannot. This difference could be considered an advantage or a disadvantage. On the one hand, policymakers could target stimulus to aid the sectors of the economy most in need or most likely to respond positively to stimulus. On the other hand, stimulus could be allocated on the basis of political or other noneconomic factors that reduce the macroeconomic effectiveness of the stimulus. As a result, both fiscal and monetary policy have distributional implications, but the latter's are largely incidental whereas the former's can be explicitly chosen.", "In cases in which economic activity is extremely depressed, monetary policy may lose some of its effectiveness. When interest rates become extremely low, interest-sensitive spending may no longer be very responsive to further rate cuts. Furthermore, interest rates cannot be lowered below zero so traditional monetary policy is limited by this \"zero lower bound.\" In this scenario, fiscal policy may be more effective. As is discussed in the next section, some argue that the U.S. economy experienced this scenario following the recent financial crisis.", "Of course, using monetary and fiscal policy to stabilize the economy are not mutually exclusive policy options. But because of the Fed's independence from Congress and the Administration, the two policy options are not always coordinated. If Congress and the Fed were to choose compatible fiscal and monetary policies, respectively, then the economic effects would be more powerful than if either policy were implemented in isolation. For example, if stimulative monetary and fiscal policies were implemented, the resulting economic stimulus would be larger than if one policy were stimulative and the other were neutral. Alternatively, if Congress and the Fed were to select incompatible policies, these policies could partially negate each other. For example, a stimulative fiscal policy and contractionary monetary policy may end up having little net effect on aggregate demand (although there may be considerable distributional effects). Thus, when fiscal and monetary policymakers disagree in the current system, they can potentially choose policies with the intent of offsetting each other's actions. Whether this arrangement is better or worse for the economy depends on what policies are chosen. If one actor chooses inappropriate policies, then the lack of coordination allows the other actor to try to negate its effects."], "subsections": []}]}, {"section_title": "Unconventional Monetary Policy During and After the Financial Crisis", "paragraphs": ["When the United States experienced the worst financial crisis since the Great Depression, the Fed undertook increasingly unprecedented steps in an attempt to restore financial stability. These steps included reducing the federal funds rate to the zero lower bound, providing direct financial assistance to financial firms, and \"quantitative easing.\" These unconventional policy decisions continue to have consequences for monetary policy today, as the Fed embarks on monetary policy \"normalization.\" "], "subsections": [{"section_title": "The Early Stages of the Crisis and the Zero Lower Bound", "paragraphs": ["The bursting of the housing bubble led to the onset of a financial crisis that affected both depository institutions and other segments of the financial sector involved with housing finance. As the delinquency rates on home mortgages rose to record numbers, financial firms exposed to the mortgage market suffered capital losses and lost access to liquidity. The contagious nature of this development was soon obvious as other types of loans and credit became adversely affected. This, in turn, spilled over into the broader economy, as the lack of credit soon had a negative effect on both production and aggregate demand. In December 2007, the economy entered a recession.", "As the housing slump's spillover effects to the financial system, as well as its international scope, became apparent, the Fed responded by reducing the federal funds target and the discount rate. Beginning on September 18, 2007, and ending on December 16, 2008, the federal funds target was reduced from 5.25% to a range between 0% and 0.25%, where it remained until December 2015. Economists call this the zero lower bound to signify that once the federal funds rate is lowered to zero, conventional open market operations cannot be used to provide further stimulus. The Fed attempted to achieve additional monetary stimulus at the zero bound through a pledge to keep the federal funds rate low for an extended period of time, which has been called forward guidance or forward commitment .", "The decision to maintain a target interest rate near zero was unprecedented. First, short-term interest rates have never before been reduced to zero in the history of the Federal Reserve. Second, the Fed waited much longer than usual to begin tightening monetary policy in the current recovery. For example, in the previous two expansions, the Fed began raising rates less than three years after the preceding recession ended."], "subsections": []}, {"section_title": "Direct Assistance During and After the Financial Crisis", "paragraphs": ["With liquidity problems persisting as the federal funds rate was reduced, it appeared that the traditional transmission mechanism linking monetary policy to activity in the broader economy was not working. Monetary authorities became concerned that the liquidity provided to the banking system was not reaching other parts of the financial system. As noted above, using only traditional monetary policy tools, additional monetary stimulus cannot be provided once the federal funds rate has reached its zero bound. To circumvent this problem, the Fed decided to use nontraditional methods to provide additional monetary policy stimulus.", "First, the Federal Reserve introduced a number of emergency credit facilities to provide increased liquidity directly to financial firms and markets. The first facility was introduced in December 2007, and several were added after the worsening of the crisis in September 2008. These facilities were designed to fill perceived gaps between open market operations and the discount window, and most of them were designed to provide short-term loans backed by collateral that exceeded the value of the loan. A number of the recipients were nonbanks that are outside the regulatory umbrella of the Federal Reserve; this marked the first time that the Fed had lent to nonbanks since the Great Depression. The Fed authorized these actions under Section 13(3) of the Federal Reserve Act, a seldom-used emergency provision that allowed it to extend credit to nonbank financial institutions and to nonfinancial firms as well.", "The Fed provided assistance through liquidity facilities, which included both the traditional discount window and the newly created emergency facilities mentioned above, and through direct support to prevent the failure of two specific institutions, American International Group (AIG) and Bear Stearns. The amount of assistance provided was an order of magnitude larger than normal Fed lending, as shown in Figure 1 . Total assistance from the Federal Reserve at the beginning of August 2007 was approximately $234 million provided through liquidity facilities, with no direct support given. In mid-December 2008, this number reached a high of $1.6 trillion, with a near-high of $108 billion given in direct support. From that point on, it fell steadily. Assistance provided through liquidity facilities fell below $100 billion in February 2010, when many facilities were allowed to expire, and support to specific institutions fell below $100 billion in January 2011. The last loan from the crisis was repaid on October 29, 2014. Central bank liquidity swaps (temporary currency exchanges between the Fed and central foreign banks) are the only facility created during the crisis still active, but they have not been used on a large scale since 2012. All assistance through expired facilities has been fully repaid with interest. In 2010, the Dodd-Frank Act changed Section 13(3) to rule out direct support to specific institutions in the future.", "From the introduction of its first emergency lending facility in December 2007 to the worsening of the crisis in September 2008, the Fed sterilized the effects of lending on its balance sheet (i.e., prevented the balance sheet from growing) by selling an offsetting amount of Treasury securities. After September 2008, assistance exceeded remaining Treasury holdings, and the Fed allowed its balance sheet to grow. Between September 2008 and November 2008, the Fed's balance sheet more than doubled in size, increasing from less than $1 trillion to more than $2 trillion. The loans and other assistance provided by the Federal Reserve to banks and nonbank institutions are considered assets on this balance sheet because they represent money owed to the Fed.", "With the federal funds rate at its zero bound and direct lending falling as financial conditions began to normalize in 2009, the Fed faced the decision of whether to try to provide additional monetary stimulus through unconventional measures. It did so through two unconventional tools\u2014large-scale asset purchases (quantitative easing) and forward guidance."], "subsections": []}, {"section_title": "Quantitative Easing and the Growth in the Fed's Balance Sheet and Bank Reserves", "paragraphs": ["With short-term rates constrained by the zero bound, the Fed hoped to reduce long-term rates through large-scale asset purchases, which were popularly referred to as quantitative easing (QE). Between 2009 and 2014, the Fed undertook three rounds of QE, buying U.S. Treasury securities, agency debt, and agency mortgage-backed securities (MBS). These securities now comprise most of the assets on the Fed's balance sheet.", "To understand the effect of quantitative easing on the economy, it is first necessary to describe its effect on the Fed's balance sheet. In 2009, the Fed's emergency lending declined rapidly as market conditions stabilized, which would have caused the balance sheet to decline if the Fed took no other action. Instead, asset purchases under the first round of QE (QE1) offset the decline in lending, and from November 2008 to November 2010, the overall size of the Fed's balance sheet did not vary by much. Its composition changed because of QE1, however\u2014the amount of Fed loans outstanding fell to less than $50 billion at the end of 2010, whereas holdings of securities rose from less than $500 billion in November 2008 to more than $2 trillion in November 2010. The second round of QE, QE2, increased the Fed's balance sheet from $2.3 trillion in November 2010 to $2.9 trillion in mid-2011. It remained around that level until September 2012, when it began rising for the duration of the third round, QE3. It was about $4.5 trillion (comprised of $2.5 trillion of Treasury securities, $1.7 trillion MBS, and $0.4 trillion of agency debt) when QE3 ended in October 2014, and has remained at that level since. ", "Table 1 summarizes the Fed's QE purchases. In total, the Fed's balance sheet increased by more than $2.5 trillion over the course of the three rounds of QE, making it about five times larger than it was before the crisis.", "This increase in the Fed's assets must be matched by a corresponding increase in the liabilities on its balance sheet. The Fed's liabilities mostly take the form of currency, bank reserves, and cash deposited by the U.S. Treasury at the Fed. QE has mainly resulted in an increase in bank reserves, from about $46 billion in August 2008 to $820 billion at the end of 2008. Since October 2009, bank reserves have exceeded $1 trillion, and they have been between $2.5 trillion and $2.8 trillion since 2014. The increase in bank reserves can be seen as the inevitable outcome of the increase in assets held by the Fed because the bank reserves, in effect, financed the Fed's asset purchases and loan programs. Reserves increase because when the Fed makes loans or purchases assets, it credits the proceeds to the recipients' reserve accounts at the Fed.", "The intended purpose of QE was to put downward pressure on long-term interest rates. Purchasing long-term Treasury securities and MBS should directly reduce the rates on those securities, all else equal. The hope is that a reduction in those rates feeds through to private borrowing rates throughout the economy, stimulating spending on interest-sensitive consumer durables, housing, and business investment in plant and equipment. Indeed, Treasury and mortgage rates have been unusually low since the crisis compared with the past few decades, although the timing of declines in those rates does not match up closely to the timing of asset purchases. Determining whether QE reduced rates more broadly and stimulated interest-sensitive spending requires controlling for other factors, such as the weak economy, which tends to reduce both rates and interest-sensitive spending.", "The increase in the Fed's balance sheet has the potential to be inflationary because bank reserves are a component of the portion of the money supply controlled by the Fed (called the monetary base ), which grew at an unprecedented pace during QE. In practice, overall measures of the money supply have not grown as quickly as the monetary base, and inflation has remained below the Fed's goal of 2% for most of the period since 2008. The growth in the monetary base has not translated into higher inflation because bank reserves have mostly remained deposited at the Fed and have not led to increased lending or asset purchases by banks.", "Another concern is that by holding large amounts of MBS, the Fed is allocating credit to the housing sector, putting the rest of the economy at a disadvantage compared with that sector. Advocates of MBS purchases note that housing was the sector of the economy most in need of stabilization, given the nature of the crisis (this argument becomes less persuasive as the housing market continues to rebound); that MBS markets are more liquid than most alternatives, limiting the potential for the Fed's purchases to be disruptive; and that the Fed is legally permitted to purchase few other assets, besides Treasury securities."], "subsections": []}]}, {"section_title": "The \"Exit Strategy\": Normalization of Monetary Policy After QE", "paragraphs": ["On October 29, 2014, the Fed announced that it would stop making large-scale asset purchases at the end of the month. Now that QE is completed, attention has turned to the Fed's \"exit strategy\" from QE and zero interest rates. The Fed laid out its plans to normalize monetary policy in a statement in September 2014. It plans to continue implementing monetary policy by targeting the federal funds rate. The basic challenge to doing so is that the Fed cannot effectively alter the federal funds rate by altering reserve levels (as it did before the crisis) because QE has flooded the market with excess bank reserves. In other words, in the presence of more than $2 trillion in bank reserves, the market-clearing federal funds rate is close to zero even if the Fed would like it to be higher.", "The most straightforward way to return to normal monetary policy would be to remove those excess reserves by shrinking the balance sheet through asset sales. The Fed does not intend to sell any securities, however. Instead, it is gradually reducing the balance sheet by ceasing to roll over securities as they mature, which began in September 2017\u2014almost three years after QE ended. Initially, it allowed only $6 billion of Treasuries and $4 billion of MBS to run off each month, which was gradually increased to $30 billion of Treasuries and $20 billion of MBS per month, where it will remain until normalization is completed. The Fed believes that it would only cease shrinking the balance sheet or use QE again in the future if it its ability to stimulate the economy using reductions in the federal funds rate were insufficient.", "The Fed intends to ultimately reduce the balance sheet until it holds \"no more securities than necessary to implement monetary policy efficiently and effectively.\" The Fed has stated that it foresees a balance sheet size that is consistent with this goal will be larger than it was before the crisis. In part, that is because other liabilities on the Fed's balance sheet are larger\u2014there is more currency in circulation now than there was before the crisis, and the Treasury has kept larger balances on average in its account at the Fed. But the balance sheet will also be significantly larger because the Fed decided in January 2019 to continue using its new method of targeting the federal funds rate even after normalization is completed. Under the new method, the federal funds rate is not determined by supply and demand in the market for bank reserves, and the Fed would prefer to maintain abundant bank reserves so that it does not have to use open market operations to respond to changes in banks' demand for reserves. By contrast, if it went back to the pre-crisis method of targeting the federal funds rate, only minimal excess reserve balances would be necessary (but perhaps more than before the crisis), so its balance sheet could be much smaller. ", "The Fed has not yet announced when the wind-down will be completed or how large the balance sheet would be upon completion, but the January 2019 FOMC minutes noted the wind-down could be completed as soon as this year. In that case, the balance sheet would not be much smaller than its current size of $4 trillion when normalization is completed\u2014more than four times larger than its pre-crisis size. Although the Fed has stated that it intends to eventually stop holding MBS, the Fed would still have sizable MBS holdings in 2025, according to projections from the New York Fed.", "In order to raise the federal funds rate in the presence of large reserves, the Fed has raised the two market interest rates that are close substitutes\u2014it has directly raised the rate it pays banks on reserves held at the Fed and used large-scale reverse repurchase agreements (repos) to alter repo rates. ", "In 2008, Congress granted the Fed the authority to pay interest on reserves. Because banks can earn interest on excess reserves by lending them in the federal funds market or by depositing them at the Fed, raising the interest rate on bank reserves should also raise the federal funds rate. In this way, the Fed can lock up excess liquidity to avoid any potentially inflationary effects because reserves kept at the Fed cannot be put to use by banks to finance activity in the broader economy. In practice, the interest rate that the Fed has paid banks on reserves has been slightly higher than the federal funds rate, which some have criticized as a subsidy to banks.", "Reverse repos are another tool for draining liquidity from the system and influencing short-term market rates. They drain liquidity from the financial system because cash is transferred from market participants to the Fed. As a result, interest rates in the repo market, one of the largest short-term lending markets, rise. The Fed has long conducted open market operations through the repo market, but since 2013 it has engaged in a much larger volume of reverse repos with a broader range of nonbank counterparties, including the government-sponsored enterprises (such as Fannie Mae and Freddie Mac) and certain money market funds, through a new Overnight Reverse Repurchase Operations Facility. The Fed is currently not capping the amount of overnight reverse repos offered through this facility. There has been some concern about the potential ramifications of the Fed becoming a dominant participant in this market and expanding its counterparties. For example, will counterparties only be willing to transact with the Fed in a panic, and will the Fed be exposed to counterparty risk with nonbanks that it does not regulate?"], "subsections": [{"section_title": "Appendix. Regulatory Responsibilities", "paragraphs": ["The Fed has distinct roles as a central bank and a regulator. Its main regulatory responsibilities are as follows:", "B ank regulation . The Fed supervises bank holding companies (BHCs) and thrift holding companies (THCs), which include all large and thousands of small depositories, for safety and soundness. The Dodd-Frank Act requires the Fed to subject BHCs with more than $50 billion in consolidated assets to enhanced prudential regulation (i.e., stricter standards than are applied to similar firms) in an effort to mitigate the systemic risk they pose. The Fed is also the prudential regulator of U.S. branches of foreign banks and state banks that have elected to become members of the Federal Reserve System. Often in concert with the other banking regulators, it promulgates rules and supervisory guidelines that apply to banks in areas such as capital adequacy, and examines depository firms under its supervision to ensure that those rules are being followed and those firms are conducting business prudently. The Fed's supervisory authority includes consumer protection for banks under its jurisdiction that have $10 billion or less in assets. P rudential regulat ion of nonbank systemically important financial institutions . The Dodd-Frank Act allows the Financial Stability Oversight Council (FSOC) to designate nonbank financial firms as systemically important (SIFIs). Designated firms are supervised by the Fed for safety and soundness. Since enactment, the number of designated firms has ranged from four, initially, to none today. R egulation of the payment system . The Fed regulates the retail and wholesale payment system for safety and soundness. It also operates parts of the payment system, such as interbank settlements and check clearing. The Dodd-Frank Act subjects payment, clearing, and settlement systems designated as systemically important by the FSOC to enhanced supervision by the Fed (along with the Securities and Exchange Commission and the Commodity Futures Trading Commission, depending on the type of system). M argin requirements . The Fed sets margin requirements on the purchases of certain securities, such as stocks, in certain private transactions. The purpose of margin requirements is to mandate what proportion of the purchase can be made on credit.", "The Fed attempts to mitigate systemic risk and prevent financial instability through these regulatory responsibilities, as well as through its lender of last resort activities and participation on the FSOC (whose mandate is to identify risks and respond to emerging threats to financial stability). The Fed has focused more on attempting to mitigate systemic risk through its regulations since the financial crisis, and has also restructured its internal operations to facilitate a macroprudential approach to supervision and regulation."], "subsections": []}]}]}}
{"id": "R45705", "title": "Base Closure and Realignment (BRAC): Background and Issues for Congress", "released_date": "2019-04-25T00:00:00", "summary": ["Since 1977, statutory thresholds have effectively constrained the President's ability to close or realign major military installations in the United States. Congress has instead periodically granted temporary authorities\u2014known as a Base Realignment and Closure (BRAC)\u2014that have established independent commissions for the review and approval of basing changes submitted by the Secretary of Defense. These unique and transient authorities last expired on April 16, 2006. There have been five rounds of base closures: 1988, 1991, 1993, 1995, and 2005.", "Though Congress has periodically adjusted the BRAC process to account for lessons learned, the modern framework has remained generally consistent with earlier rounds, and includes", "establishment of an independent commission; reliance on objective and uniform criteria; Government Accountability Office (GAO) review and certification of Department of Defense (DOD) data; deliberations designed to be transparent that include open hearings, solicitation of feedback, installation visits, and data available for public review; and requirement that the final list of closure and realignment recommendations be accepted or rejected in their entirety.", "Congress has defined BRAC selection criteria in statute, thus requiring the Secretary to prioritize military value over cost savings. Additionally, Congress has required the Secretary to align the Department's recommendations with a comprehensive 20-year force structure plan. The commission may modify, reject, or add recommendations during its review before forwarding a final list to the President.", "After receiving the Commission's list of recommendations, the President may either accept the report in its entirety or seek to modify it by indicating disapproval and returning it to the commission for further evaluation. If the President accepts the commission's recommendations, they are forwarded to Congress. BRAC implementation begins by default unless Congress rejects the recommendations in their entirety within 45 days by enacting a joint resolution. During the implementation phase, DOD is required to initiate closures and realignments within two years and complete all actions within six years.", "The BRAC process represents a legislative compromise between the executive and legislative branches wherein each shares power in managing the closure and realignment of military bases. The imposition of an independent, third-party mediator was intended to insulate base closings from political considerations by both branches that had complicated similar actions in the past.", "This report provides background on the development of BRAC, describes its major elements and milestones, and outlines issues frequently cited in the context of new rounds, such as potential savings."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["The U.S. Constitution does not clearly specify how military bases should be managed. Article II, Section 2, appoints the President as the commander-in-chief, with the implied power to deploy, and redeploy, the armed forces as necessary for national defense. In common practice, this has included the authority to create and close military installations needed to accommodate and train personnel under the President's command. However, Article I, Section 8, charges Congress with the responsibility to raise armies, maintain a Navy, and regulate the militia. Through annual authorization and appropriation legislation, Congress legislates policy for managing DOD real property assets and funds the construction, maintenance, operation, and disposal of military infrastructure.", "Throughout most of American history, the President has exercised broad, relatively unchallenged authority for opening, closing, or realigning military installations. Congress largely deferred to the Executive branch primarily because the President, as commander-in-chief, is empowered with the responsibility of deploying military forces.", "Prompted by large-scale closures of World War II era infrastructure during the 1960s and 1970s, Congress enacted legislation in 1977 that effectively limited the Executive branch's ability to close or realign major military installations. The new statute, later codified as 10 U.S.C. 2687 (Section 612 of the Military Construction Authorization Act of 1978, P.L. 95-82 ), generally required DOD to conduct comprehensive and lengthy assessments of major basing decisions as part of a congressional report-and-wait process. These assessments could be challenged in court on environmental grounds or on questions related to their sufficiency, further lengthening delays. The new legislation effectively halted DOD's ability to close or realign domestic bases of significant size.", "In the decade that followed the passage of 10 U.S.C. 2687, congressional pressure grew to accommodate DOD basing priorities. By 1988, ongoing negotiations between the Secretary of Defense and the House and Senate Armed Service Committees led to new legislation ( P.L. 100-526 ) that authorized a limited number of base closures based on the oversight of an independent panel. Though later modified, the effort marked the beginning of the first Base Realignment and Closure (BRAC) process, which was intended to insulate base closings from considerations such as favoritism or other political interference. ", "Widely considered a success, the 1988 BRAC legislation was taken up again and modified in succeeding BRAC rounds; first in 1991, 1993, and 1995; and again in 2005."], "subsections": []}, {"section_title": "Major Elements of the Modern BRAC Process", "paragraphs": ["The modern BRAC process refers to a temporary authority that amends the Defense Base Closure and Realignment Act of 1990 ( P.L. 101-510 ), hereinafter referred to as the Base Closure Act , and features a framework of elements that entrusts an independent commission with certifying closure and realignment recommendations made by the Secretary of Defense. ", "In general, the process has required the Secretary to submit a list of military installations recommended for closure or realignment to an independent, bipartisan BRAC commission. After analyzing the Secretary's recommendations, the commission may accept, reject, or modify the list. Upon completing its review, the commission forwards its final findings and recommendations to the President. Upon acceptance of commission's recommendations, the President then submits them to Congress. If the President does not submit the recommendations to Congress within the timeframe required under the Base Closure Act, the BRAC process is terminated. Upon receipt of the report from the President, Congress has the opportunity to disapprove of the recommendations in toto through the enactment of a joint resolution. ", "The hallmarks of this framework include", "establishment of an independent commission whose members are appointed by the President, in consultation with congressional leadership (and the advice and consent of the Senate); reliance on objective and uniform criteria for evaluating basing recommendations; GAO review and certification of DOD data; deliberations that include open hearings, solicitation of feedback, installation visits, and data available for public review; requirement that the commission's final list of closure and realignment actions be accepted or rejected in its entirety; and presidential and congressional off-ramps that would terminate the BRAC process when certain conditions are not met.", "The timeline to complete an entire BRAC round has varied; however, the most recent one conducted in 2005 took approximately 10 years, from authorization to completion (end of the six-year BRAC implementation period).", "Key milestones of a typical BRAC timeline include", "DOD force structure plan, infrastructure inventory, and analysis of options (up to four years); nomination and confirmation of BRAC commissioners; DOD submission of BRAC recommendations (and associated reports) to the commission; commission deliberations (typically four months); final report sent to the President for approval; 45-day deadline for Congress to reject recommendations in their entirety (Joint Resolution of Disapproval) or allow implementation to begin; DOD implementation (two years to begin; six years to complete); and DOD disposal of real property (indeterminate)."], "subsections": []}, {"section_title": "BRAC Selection Criteria", "paragraphs": ["BRAC is often characterized as a cost efficiency measure that enables DOD to more effectively manage its real property assets by allowing it to shed excess infrastructure, but historically, potential costs and savings have been a consideration that have ranked below military value. No BRAC round has established cost savings targets, floors, or ceilings. ", "During BRAC rounds in 1991, 1993, and 1995, Congress required the Secretary of Defense to develop and report a set of objective selection criteria that would be used for identifying bases for closure and realignment. For the 2005 round, Congress amended the BRAC statute to require the Secretary to regard military value (defined below) as the primary consideration. Other factors, such as potential costs and savings, were explicitly categorized as lower priority. Because the amended legislative language reflected longstanding DOD policy, the 2005 BRAC criteria appear almost identical when compared with previous versions, with additional language added for emphasis or included for explanatory examples. ", "The excerpt below indicates the 2005 BRAC selection criteria. Emphasized text (in italics) represents new language not included as part of the 1995 criteria.", "SEC. 2913. SELECTION CRITERIA FOR 2005 ROUND.", "(a) FINAL SELECTION CRITERIA.\u2014The final criteria to be used by the Secretary in making recommendations for the closure or realignment of military installations inside the United States under this part in 2005 shall be the military value and other criteria specified in subsections (b) and (c).", "(b) MILITARY VALUE CRITERIA.\u2014The military value criteria are as follows:", "(1) The current and future mission capabilities and the impact on operational readiness of the total force of the Department of Defense, including the impact on joint warfighting, training, and readiness.", "(2) The availability and condition of land, facilities, and associated airspace (including training areas suitable for maneuver by ground, naval, or air forces throughout a diversity of climate and terrain areas and staging areas for the use of the Armed Forces in homeland defense missions) at both existing and potential receiving locations.", "(3) The ability to accommodate contingency, mobilization, surge, and future total force requirements at both existing and potential receiving locations to support operations and training.", "(4) The cost of operations and the manpower implications.", "(c). OTHER CRITERIA.\u2014The other criteria that the Secretary shall use in making recommendations for the closure or realignment of military installations inside the United States under this part in 2005 are as follows:", "(1) The extent and timing of potential costs and savings, including the number of years, beginning with the date of completion of the closure or realignment, for the savings to exceed the costs.", "(2) The economic impact on existing communities in the vicinity of military installations.", "(3) The ability of the infrastructure of both the existing and potential receiving communities to support forces, missions, and personnel.", "(4) The environmental impact , including the impact of costs related to potential environ mental restoration, waste management, and environmental compliance activities."], "subsections": []}, {"section_title": "Disposal of Real Property", "paragraphs": ["The transfer and disposal of DOD real property made available following the implementation of a BRAC round is a complex process that may extend for years beyond the initial six-year implementation window. Disposal may be delayed or otherwise affected by the participation of local and state communities and the degree to which environmental remediation by federal authorities is necessary. The graph below shows the total acreage from previous BRAC rounds yet to be disposed.", "The Base Closure Act authorizes a variety of conveyance mechanisms not otherwise available for the transfer and disposal of federal property, a process typically performed by the General Services Administration (GSA). Under a BRAC, conveyance authority is delegated from GSA, through the Secretary of Defense to the various military departments, which receive special approval to supersede GSA regulations with BRAC specific regulations. The primary difference between the routine disposal of federal property and real property conveyed under a BRAC is the role of local communities.", "Under normal (non-BRAC) circumstances, the General Services Administration (GSA) is directly responsible for disposing of any surplus federal real property, which includes defense property. A military department in possession would, for example, declare property as excess to its needs and turn over the administration of a site to the GSA. The GSA would then follow a number of consecutive steps for disposal of federal property laid out in statute. It would first offer the excess property to other federal agencies. If none expressed an interest, the excess property would be declared surplus . The GSA would then offer the surplus property to state or local governments and non-profits that might use it for a public benefit ( public benefit conveyance) , such as a homeless shelter or medical center. Finally, if the property has neither been transferred nor conveyed in the previous steps, the surplus property would be offered for sale to the public.", "Under a BRAC, local communities can significantly affect the BRAC property transfer and disposal decisions, which are managed by the Secretary of the responsible military department. Once approved for closure, communities around an installation typically organize a Local Redevelopment Authority (LRA) for the purpose of creating and executing a redevelopment plan for the property. While the plan is not binding on DOD, the Department has been statutorily directed to give the plan considerable weight. DOD makes economic development grants and technical support available through its Office of Economic Adjustment (OEA) to assist LRAs with the process. ", "In recent BRAC rounds, Congress has authorized a special transfer authority that has permitted DOD to transfer title to property at less than fair market value, or even at no cost, if the LRA agrees to certain conditions designed to create employment at the former defense facility. This has been referred to as an Economic Development Conveyance (EDC)."], "subsections": []}, {"section_title": "BRAC Savings", "paragraphs": ["DOD has asserted that savings generated from BRAC are generally the result of avoiding the cost of retaining and operating unneeded infrastructure, with upfront costs eventually offset by annual savings. Between FY2012 and FY2018, the Department consistently argued for a new BRAC, asserting that \"absent another BRAC round, the Department will continue to operate some of its installations sub-optimally as other efficiency measures, changing force structure, and technology reduce the number of missions and personnel.\"", "Emphasizing the potential cost savings, DOD has suggested a new \"efficiency-focused BRAC\" could save the Department billions of dollars annually: \"Savings from BRAC rounds are real and substantial. The last five BRAC rounds are collectively saving the Department $12B annually. A new efficiency-focused BRAC could save the Department an additional ~$2B annually (based on the '93/'95 rounds).\"", "In its ongoing series of BRAC-related reports, the GAO has noted the unreliability of DOD cost savings estimates. In 2013, GAO concluded that, though the Department had achieved annual recurring savings as the result of the 2005 round, visibility into the outcome has been limited due to missing and inconsistent recordkeeping. Similar studies have raised questions about the data DOD has used to predict and monitor BRAC effectiveness, long-term savings, and outcomes. For example", "\"... the services did not develop baseline operating costs before implementing the BRAC recommendations, which would have enabled it to determine whether savings were achieved.\" \"... We found that DOD's process for providing the BRAC commission with cost and savings estimates was hindered by underestimating recommendation-specific requirements and that DOD did not fully anticipate information technology requirements for many of the recommendations.\" \"The department cannot provide documentation to show to what extent it reduced plant replacement value or vacated leased space as it reported in May 2005 that it was intended to do.... In addition, DOD bundled multiple closures ... thus limiting visibility into the estimated costs and savings for individual closures and realignments.\" \"... DOD has not reported to Congress how the cleanup of emerging contaminants, especially certain perfluorinated compounds, at installations closed under BRAC will significantly increase the estimated (BRAC) cleanup costs.\" \"... We found that OSD (Office of the Secretary of Defense) did not have a fully developed method for accurately collecting information on costs, savings, and efficiencies achieved specifically from joint basing, and that OSD had not developed a plan to guide joint bases in achieving cost savings and efficiencies....\" \"... DOD has not committed to take action on some of our recommendations related to implementing any future BRAC rounds, such as improving DOD's ability to estimate potential liabilities, and savings to achieve desired outcomes.\" ", "In its final report to the President, the 2005 BRAC commission noted DOD's initial estimate of savings had been \"vastly overestimated,\" and suggested that the Department had claimed savings that were \"not truly savings in the commonly understood sense of the term.\" Reflecting on the quality of cost estimates and savings associated with 2005 BRAC round, Anthony Principi, Chairman of the 2005 Defense Base Closure and Realignment Commission, has suggested opportunities exist for the DOD to improve its analysis by adopting more consistent accounting practices and inclusive metrics:", "To start, DoD has to do a better job estimating the true cost of any closure or realignment.... Second, the cost of base realignment actions (COBRA) accounting procedure, used by DoD as a basis of comparison among scenarios, should include cost estimates for environmental restoration not just \"clean to current use\" standards. In addition, COBRA or some other cost evaluation process should also include transportation and infrastructure costs and burden sharing with the federal government.... ", "In addition to refining DOD accounting metrics, some observers have suggested congressional visibility into BRAC cost and long-term effectiveness could be improved by amending the process to require the Department to disclose how closure and realignment recommendations meet expected cost saving and reduced infrastructure targets. "], "subsections": []}, {"section_title": "Excess Infrastructure", "paragraphs": ["A BRAC process is the chief means by which DOD disposes of excess infrastructure. Each year between 2013 and 2017, the Department requested a new BRAC round as a means of realizing greater efficiency and reducing excess infrastructure. It has also attempted to allay concerns related to the 2005 BRAC experience - marked by unexpectedly high costs and complexity - by emphasizing cost savings and efficiencies rather than force transformation. ", "In April 2016, DOD submitted to the House Armed Services Committee an I nfrastructure C apacity R eport (interim version) that assessed 22% of the Department's base infrastructure excess to its needs. The methodology used in the report\u2014required by Section 2815 of the National Defense Authorization Act (NDAA) for FY2016 (P.L. 114-92)\u2014remained consistent with excess capacity reports submitted prior to the 1998 and 2005 BRAC rounds round. The Department stated its purpose for obtaining \"a sense of excess and whether excess remains after various changes, such as (prior) BRAC or force structure reductions.\" A final infrastructure capacity report, submitted to Congress in October 2017, modified the original excess capacity estimate to 19%. ", "The Department concluded its infrastructure capacity analysis by arguing it had established sufficient justification for a new BRAC round, a process that would allow it to more effectively dispose of excess infrastructure and manage remaining real property assets.", "The Department believes we have addressed all congressional concerns.... The time to authorize another BRAC round is now. The BRAC process requires considerable time to analyze and develop recommendations, have those recommendations reviewed by the independent BRAC Commission, and then implemented over a six-year period of time. The longer authorization is delayed, the longer the Department will be forced to expend valuable resources on unnecessary facilities instead of weapons systems, readiness, and other national security priorities. ", "Critics of the Department's methodology for estimating excess infrastructure have asserted it includes unreasonable research assumptions and metrics, undermining the basis for DOD's conclusion. For example, observers have cited the report's reliance on Cold War baseline values to establish excess capacity, inconsistent application of existing metrics for measuring capacity shortfalls, and overly broad categorization schemes. Some observers have also cited longstanding data management challenges that continue to affect the Department's ability to measure current excess facility inventory and utilization rates. Others have noted the dearth of data that support DOD claims related to BRAC effectiveness and the disposal of excess property. ", "During a news briefing on the FY2019 defense budget, Undersecretary of Defense (Comptroller) David L. Norquist noted that the Department had declined to propose a BRAC round that year, stating that it would work instead to focus on internal reforms while preparing for a financial audit. ", "And so, I think we're looking at doing two things, going forward. One is, working with Congress to find common areas where we can make reforms and changes that don't create the same types of obstacles. The other is that we are undergoing a financial-statement audit that includes a look at property, and assets and investments and improving the accuracy of the data behind it. And as a view of being able to take advantage of the data coming out of that process, to help us make better decision-making on real property. But, yes, you are correct, there is not (a) request for another BRAC round in this budget.", "In testimony before the Senate Appropriations Committee Subcommittee on Military Construction, Veterans Affairs, and Related Agencies, Lucian Niemeyer, Assistant Secretary of Defense for Energy, Installations and Environment, indicated DOD would be working in FY2019 to improve its excess infrastructure accounting processes and demolish unneeded infrastructure:", "In lieu of another request for legislation in FY 2019 to authorize an additional Base Realignment and Closure (BRAC) round, we will review our facilities, to include facility usage optimization review to ensure we have a better accounting of excess infrastructure. We also have proposed for FY 2019 increased efforts to demolish unneeded or obsolete facilities over the course of this year."], "subsections": []}, {"section_title": "Legacy of the 2005 BRAC Round", "paragraphs": ["The 2005 BRAC round was unique among all previous rounds due to its relative size, scope and complexity. (See Figure 2 for comparison of major and minor BRAC actions between rounds.) Colloquially called \"the mother of all BRACs,\" the objectives of the 2005 round were primarily about transforming military infrastructure; however, unanticipated expenses have played a role in shaping subsequent congressional views of the BRAC process and, according to many observers, dampened support for consideration of a new round. ", "Savings estimates submitted during the 2005 round were overvalued by as much as 67%, according to GAO analysis, with one-time implementation costs rising from $21 to $35.1 billion. GAO found that the $14.1 billion increase was due primarily to the rising cost of new construction associated with subsidiary projects not included in the original BRAC implementation plan. ", "Referring to the implementation of the 2005 round, Assistant Secretary Niemeyer, noted, \"BRAC legislation effectively limited the ability of Congress to oversee BRAC implementation costs and the Department made deliberate decisions to use BRAC implementation as a recapitalization tool, expanding facility requirements and associated costs.\"", "To address congressional concerns about spiraling costs in new BRAC rounds, DOD has periodically proposed legislative language that would constrain the Secretary's ability to recommend BRAC actions that would not yield savings within 20 years and to emphasize recommendations that would yield net savings within five years."], "subsections": []}, {"section_title": "The Department of Defense Base Closure Account", "paragraphs": ["Each year, Congress appropriates funding for the Department of Defense Base Closure Account, part of the Military Construction Defense-Wide appropriation. With no BRAC round authorized or underway, the primary purpose of continuing BRAC appropriations is to fund the environmental cleanup and caretaker functions at bases that were closed under prior rounds (see Figure 3 ). ", "In FY2020, the Trump Administration has requested $278.5 million for BRAC continuing environmental and caretaker costs, with $158.3 million provided for the Navy (57%), $66.1 million for the Army (24%), and $54 million for the Air Force (19%). The total request represents a $63 million decrease (19%) from FY2019 enacted levels ($342 million). ", "In FY2018, Congress urged DOD to accelerate environmental remediation at BRAC sites. In report language, appropriators stated that additional funds were provided to speed environmental remediation at installations closed under previous rounds. ", "Accelerated cleanup.\u2014The agreement includes additional funding to accelerate environmental remediation at installations closed during previous Base Realignment and Closure (BRAC) rounds. Priority should be given to those sites with newly identified radiological cleanup cost. There are many factors hindering the cleanup of BRAC sites. However, strategic investments can lead to quicker clean-ups and faster turnover of DOD property to the local community. Therefore, the Department is directed to submit to the congressional defense committees a spend plan for the additional BRAC funds not later than 30 days after enactment of this Act."], "subsections": []}, {"section_title": "Congressional Action on BRAC", "paragraphs": [], "subsections": [{"section_title": "Prohibition on Conducting a New Round", "paragraphs": ["Congressional authorizers and appropriators have regularly inserted language into annual defense legislation that would disallow the use of funds for the purpose of a new BRAC round. In FY2019, for example, though DOD did not propose a BRAC, authorizers inserted language into the annual NDAA that prohibited a new round:", "SEC. 2703. Prohibition on Conducting Additional Base Realignment and Closure (BRAC) Round. Nothing in this Act shall be construed to authorize an additional Base Realignment and Closure (BRAC) round.", "A similar provision was included in the final FY2019 defense appropriations bill:", "SEC. 8122. None of the funds made available by this Act may be used to propose, plan for, or execute a new or additional Base Realignment and Closure (BRAC) round. "], "subsections": []}, {"section_title": "BRAC Legislation in the 115th Congress", "paragraphs": ["In 2017, Members in both chambers proposed legislation that would have authorized a new round of base closures. Though no legislation for a full BRAC was enacted, a provision included the following year in the final FY2019 NDAA.", "Under the new scenario described by Section 2702 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 ( H.R. 5515 , P.L. 115-232 ), BRAC-like actions are authorized within the confines of a state based on the recommendation of the governor and support of local communities affected by the proposed actions. Unlike a traditional BRAC process, the new authorities would forgo the creation of an independent review panel. The Secretary of Defense is, instead, required to deliver a report of planned BRAC actions to congressional defense committees and, following a 90-day waiting period, begin implementation. For details, please refer to \"In-State BRAC\" in Appendix A of this report.", "The BRAC related legislative proposals above illustrate the flexibility Congress has for amending or adopting the template of past BRAC processes that DOD has called \"the only fair, objective, and comprehensive process to achieve these goals (eliminating excess infrastructure).\" Congress may consider whether future legislative proposals for base closures and realignments will adopt the lessons learned from previous rounds while retaining the basic framework, or fundamentally alter the process."], "subsections": []}, {"section_title": "BRAC Legislation in the 116th Congress", "paragraphs": ["No BRAC legislation has so far been proposed in the 116 th Congress. Additionally, the Department has asserted that it does not intend to use the new BRAC-like authorities authorized by Section 2702 of the FY2019 NDAA. To date, DOD has received no state requests under this authority.", "Appendix A. Legislative References", "BRAC Authorizing Legislation", "1988 Round", "The Defense Authorization Amendments and Base Closure and Realignment Act, enacted October 24, 1988 (P.L.100-526)", "1991, 1993, 1995 Rounds", "National Defense Authorization Act for Fiscal Year 1991, enacted November 5, 1990 (P.L. 107-107, Base Closure and Realignment Act of 1990, Title XXIX)", "2005 Round", "National Defense Authorization Act for Fiscal Year 2002, ( P.L. 101-510 ; amended the Defense Base Closure and Realignment Act of 1990 ( P.L. 101-510 )", "10 U.S.C. 2687, 10 U.S.C. 993 Summary", "In 1977, Congress enacted 10 U.S.C. 2687, the first statutory restriction on the President's ability to close or realign military installations. Amended over the years, the statute has retained its essential elements, establishing procedures the Secretary of Defense must follow before closing a military installation where a threshold number (currently 300) of civilian personnel are authorized to be employed, or realigning an installation that involves a reduction by more than 50% (or 1,000) of civilian workers. A more recent statute, 10 U.S.C. 993, introduced additional reporting requirements that would restrict the Secretary's ability to realign installations if the plan would affect more than 1,000 assigned members of the Armed Forces. ", "In-State BRAC", "Section 2702 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 ( H.R. 5515 , P.L. 115-232 ) authorizes new in-state BRAC authorities. Text of the provision is included below in its entirety.", "SEC. 2702. ADDITIONAL AUTHORITY TO REALIGN OR CLOSE CERTAIN MILITARY ", "INSTALLATIONS.", "(a) Authorization.\u2014Notwithstanding sections 993 or 2687 of title 10, United States Code, and subject to subsection (d), the Secretary of Defense may take such actions as may be necessary to carry out the realignment or closure of a military installation in a State during a fiscal year if\u2014", "(1) the military installation is the subject of a notice which is described in subsection (b); and", "(2) the Secretary includes the military installation in the report submitted under paragraph (2) of subsection (c) with respect to the fiscal year.", "(b) Notice From Governor of State.\u2014A notice described in this subsection is a notice received by the Secretary of Defense from the Governor of a State (or, in the case of the District of Columbia, the Mayor of the District of Columbia) in which the Governor recommends that the Secretary carry out the realignment or closure of a military installation located in the State, and which includes each of the following elements:", "(1) A specific description of the military installation, or a specific description of the relevant real and personal property. ", "(2) Statements of support for the realignment or closure from units of local government in which the installation is located.", "(3) A detailed plan for the reuse or redevelopment of the real and personal property of the installation, together with a description of the local redevelopment authority which will be responsible for the implementation of the plan.", "(c) Response to Notice.\u2014", "(1) Mandatory response to governor and congress.\u2014Not later than 1 year after receiving a notice from the Governor of a State (or, in the case of the District of Columbia, from the Mayor of the District of Columbia), the Secretary of Defense shall submit a response to the notice to the Governor and the congressional defense committees indicating whether or not the Secretary accepts the recommendation for the realignment or closure of a military installation which is the subject of the notice.", "(2) Acceptance of recommendation.\u2014If the Secretary of Defense determines that it is in the interests of the United States to accept the recommendation for the realignment or closure of a military installation which is the subject of a notice received under subsection (b) and intends to carry out the realignment or closure of the installation pursuant to the authority of this section during a fiscal year, at the time the budget is submitted under section 1105(a) of title 31, United States Code, for the fiscal year, the Secretary shall submit a report to the congressional defense committees which includes the following:", "(A) The identification of each military installation for which the Secretary intends to carry out a realignment or closure pursuant to the authority of this section during the fiscal year, together with the reasons the Secretary of Defense believes that it is in the interest of the United States to accept the recommendation of the Governor of the State involved for the realignment or closure of the installation.", "(B) For each military installation identified under subparagraph (A), a master plan describing the required scope of work, cost, and timing for all facility actions needed to carry out the realignment or closure, including the construction of new facilities and the repair or renovation of existing facilities.", "(C) For each military installation identified under subparagraph (A), a certification that, not later than the end of the fifth fiscal year after the completion of the realignment or closure, the savings resulting from the realignment or closure will exceed the costs of carrying out the realignment or closure, together with an estimate of the annual recurring savings that would be achieved by the realignment or closure of the installation and the timeframe required for the financial savings to exceed the costs of carrying out the realignment or closure.", "(d) Limitations.\u2014", "(1) Timing.\u2014The Secretary may not initiate the realignment or closure of a military installation pursuant to the authority of this section until the expiration of the 90-day period beginning on the date the Secretary submits the report under paragraph (2) of subsection (c).", "(2) Total costs.\u2014Subject to appropriations, the aggregate cost to the government in carrying out the realignment or closure of military installations pursuant to the authority of this section for all fiscal years may not exceed $2,000,000,000. In determining the cost to the government for purposes of this section, there shall be included the costs of planning and design, military construction, operations and maintenance, environmental restoration, information technology, termination of public-private contracts, guarantees, and other factors contributing to the cost of carrying out the realignment or closure, as determined by the Secretary.", "(e) Process for Implementation.\u2014The implementation of the realignment or closure of a military installation pursuant to the authority of this section shall be carried out in accordance with section 2905 of the Defense Base Closure and Realignment Act of 1990 (title XXIX of P.L. 101-510 ; 10 U.S.C. 2687 note) in the same manner as the implementation of a realignment or closure of a military installation pursuant to the authority of such Act.", "(f) State Defined.\u2014In this section, the term ``State'' means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, American Samoa, Guam, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands.", "(g) Termination of Authority.\u2014The authority of the Secretary to carry out a realignment or closure pursuant to this section shall terminate at the end of fiscal year 2029.", "Appendix B. BRAC Acreage Disposal Status, By State"], "subsections": []}]}]}}
{"id": "R45576", "title": "An Overview of Small Business Contracting", "released_date": "2019-03-08T00:00:00", "summary": ["Congress has broad authority to impose requirements upon the federal procurement process, that is, the process whereby agencies obtain goods and services from the private sector. One way in which Congress has exercised this authority is by adopting measures to promote contracting and subcontracting between \"small businesses\" and federal agencies.", "These measures, among other things, declare a congressional policy of ensuring that a \"fair proportion\" of federal contract and subcontract dollars is awarded to small businesses; establish government-wide and agency-specific goals for the percentage of federal contract and subcontract dollars awarded to small businesses; establish an annual Small Business Goaling Report to measure progress in meeting these goals; generally require federal agencies, under specified circumstances, to reserve contracts that have an anticipated value greater than the micro-purchase threshold (currently $10,000), but not greater than the simplified acquisition threshold (currently $250,000) exclusively for small businesses; authorize federal agencies, under specified circumstances, to set aside contracts that have an anticipated value greater than the simplified acquisition threshold exclusively for small businesses; authorize federal agencies to make sole source awards to small businesses when the award could not otherwise be made (e.g., only a single source is available, under urgent and compelling circumstances); authorize federal agencies to set aside contracts for, or grant other contracting preference to, specific types of small businesses (e.g., 8(a) small businesses, HUBZone small businesses, women-owned small businesses (WOSBs) and service-disabled veteran-owned small businesses (SDVOSBs)); and task the Small Business Administration (SBA) and other federal procurement officers with reviewing and restructuring proposed procurements to maximize opportunities for small business participation.", "Small business contracting programs generally have strong bipartisan support. However, that does not mean that these programs face no opposition, or that issues have not been raised concerning the impact and operations of specific programs. For example, small business advocates note that implementing regulations in the Federal Acquisition Regulation (FAR) narrow the reach (and impact) of some small business contracting preferences by excluding specific types of contracts, such as those listed in the Federal Supply Schedules, from FAR requirements pertaining to small business contracting. Advocates want the federal government to enact policies that reduce or eliminate such exclusions. Critics have questioned some of these programs' effectiveness, in terms of both promoting small business opportunities to win federal contracts and promoting a more diversified, robust economy.", "Many observers judge the relative success or failure of federal efforts to enhance small business contracting opportunities by whether federal government and individual federal agencies meet the predetermined procurement goals in the annual Small Business Goaling Report. In recent years, the federal government has generally succeeded in meeting the government-wide goals of awarding 23% of the total value of all small business eligible prime contract awards to small businesses, 5% to small disadvantaged businesses (SDBs), and 3% to SDVOSBs. It has had difficulty meeting the goals of 5% to WOSBs and 3% to HUBZone small businesses.", "The Small Business Goaling Report is the most convenient measure available to compare federal small business contracting performance over time, but it has limitations. For example, the SBA excludes some contracts from the report in its determination of what is \"small business eligible\" and some federal procurement activities are not included because they are not recorded in the Federal Procurement Data System\u2014Next Generation. It also does not evaluate the effect these contracts have on small businesses, industry competitiveness, or the overall economy."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["During World War II and then again after the outbreak of fighting in Korea, Congress found that the existence of thousands of small business concerns was being threatened by war-induced shortages of materials coupled with an inability to obtain defense contracts or financial assistance. Concerned that many small businesses might fail without government assistance, in 1953, Congress passed and President Dwight Eisenhower signed into law the Small Business Act (P.L. 83-163), which authorized the Small Business Administration (SBA). The act specifies that it is the declared policy of Congress to promote the interests of small businesses to \"preserve free competitive enterprise.\" Congress specified that one of the ways to preserve free competitive enterprise was to insure that small businesses received a \"fair proportion\" of federal contracts and subcontracts:", "It is the declared policy of the Congress that the Government should aid, counsel, assist, and protect, insofar as is possible, the interests of small-business concerns in order to preserve free competitive enterprise, to insure that a fair proportion of the total purchases and contracts or subcontracts for property and services for the Government (including but not limited to contracts or subcontracts for maintenance, repair, and construction) be placed with small-business enterprises, to insure that a fair proportion of the total sales of Government property be made to such enterprises, and to maintain and strengthen the overall economy of the Nation.", "Congress indicated that its intent in supporting small businesses was not to \"favor small business at the expense of its larger competitors. Our only purpose in supporting the creation and effective operation of the SBA is to equalize the scales when necessary to guarantee the continued vigor of our competitive free enterprise system.\"", "More recently, a House committee report indicated that the primary rationale for small business contracting programs", "is the positive economic benefits they provide, as well as assisting small businesses overcome the complexities of the system. The economic benefits of these programs can be seen in two primary areas\u2014market competition and local economic development. First, [these] programs \u2026 are designed to increase and diversify small contractors with the intent of expanding the federal supplier base. This leads to increased competition, which results in higher quality, greater product variety, and lower prices. Second, these contracting initiatives lower barriers to entry in a wide range of markets for small businesses. This provides greater market access for small firms' goods and services. From an economic perspective, such access is critical to generating positive macroeconomic benefits, including higher job creation, wage growth, and greater income distribution.", "Over the years, Congress has approved legislation to support small business in various ways. For example, the SBA administers several types of programs to support small businesses, including loan guaranty and venture capital programs to enhance small business access to capital; contracting programs to increase small business opportunities in federal contracting; direct loan programs for businesses, homeowners, and renters to assist their recovery from natural disasters; and small business management and technical assistance training programs to assist business formation and expansion. In recent years, congressional interest in these programs has increased, primarily because assisting small businesses is viewed as a means to stimulate economic activity and create jobs.", "This report describes the various federal programs, requirements, procurement officers, and procurement offices involved in promoting federal contracting and subcontracting with small businesses, small disadvantaged businesses (SDBs), SDBs participating the SBA's \"8(a) Program,\" Historically Underutilized Business Zone (HUBZone) small businesses, women-owned small businesses (WOSBs), and service-disabled veteran-owned small businesses (SDVOSBs). The SBA administers many, but not all, of these programs.", "It examines the following federal requirements and authorities in promoting contracting and subcontracting with small businesses:", "1. The requirement that federal agencies generally reserve contracts that have an anticipated value greater than the micro-purchase threshold (currently $10,000) but not greater than the simplified acquisition threshold (currently $250,000) exclusively for small businesses unless the contracting officer is unable to obtain offers from two or more small businesses that are competitive with market prices and the quality and delivery of the goods or services being purchased. 2. The establishment of small business procurement goals, both government-wide and agency specific, to promote the awarding of contracts to small businesses. 3. The requirement that federal agencies generally set aside contracts that have an anticipated value exceeding the simplified acquisition threshold exclusively for small businesses when there is a reasonable expectation that offers will be obtained from at least two responsible small businesses offering the products of different small businesses (Rule of Two) and the award will be made at a fair market price. 4. The authority provided federal agencies to make sole source awards to small businesses when the award could not otherwise be made (e.g., only a single source is available, under urgent and compelling circumstances). 5. The authority provided federal agencies to set aside contracts for, or grant other contracting preference to, specific types of small businesses (e.g., 8(a) small businesses, HUBZone small businesses, WOSBs, and SDVOSBs). ", "It discusses the SBA's oversight and responsibilities concerning the small business goaling program, small business mentor-prot\u00e9g\u00e9 programs, the 7(j) management and training program, and the surety bond guaranty program. ", "It also discusses the role of the Office of Small and Disadvantaged Business Utilization (OSDBU), located in each federal agency, in promoting contracting with small businesses, and examines the role and responsibilities of various federal procurement officers, including procurement center representatives, commercial market representatives, and business opportunity specialists, in promoting small business contracting opportunities.", "This report concludes with a brief discussion of the strong bipartisan support for small business contracting programs. However, that does not mean that these programs face no opposition, or that issues have not been raised concerning the impact and operations of specific programs. For example, small business advocates note that implementing regulations in the Federal Acquisition Regulation (FAR) narrow the reach (and impact) of some small business contracting preferences by excluding specific types of contracts, such as those listed in the Federal Supply Schedules, from FAR requirements pertaining to small business contracting. Advocates want the federal government to enact policies that reduce or eliminate exclusions that narrow the reach of small business contracting preferences. Critics have questioned some of these programs' effectiveness, in terms of promoting both small business opportunities to win federal contracts and a more diversified, robust economy."], "subsections": []}, {"section_title": "Basic Contracting Requirements", "paragraphs": [], "subsections": [{"section_title": "Federal Contractors", "paragraphs": ["With a few exceptions, businesses interested in bidding on a federal contract must obtain a Dun & Bradstreet Data Universal Numbering System (DUNS) number (i.e., a unique nine-digit identification number) for each of the business's physical locations, and register with the federal government's System for Award Management (SAM). SAM is used by government agencies for several purposes, including to find contractors. ", "Businesses also must match their products and services to a North American Industry Classification System (NAICS) code. Businesses generally have a primary NAICS code, and may have multiple NAICS codes if they sell multiple products and services. ", "Businesses that identify themselves as a small business in SAM must (1) meet the Small Business Act's definition of a small business and (2) not exceed size standards established, and updated periodically, by the SBA.", "The Small Business Act defines a small business as one that ", "is organized for profit; has a place of business in the United States; operates primarily within the United States or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials, or labor; is independently owned and operated; and is not dominant in its field on a national basis.", "The business may be a sole proprietorship, partnership, corporation, or any other legal form.", "The Small Business Act authorizes the SBA to establish size standards to ensure that only small businesses are provided SBA assistance. The SBA currently uses two types of size standards to determine SBA program eligibility: industry-specific size standards and alternative size standards , for some lending and venture capital investment programs based on the applicant's maximum tangible net worth and average net income after federal taxes. The SBA's industry-specific size standards are used to determine eligibility for federal small business contracting purposes. ", "The SBA determines if a business is small by comparing that business's economic characteristics (typically number of employees or average annual receipts) to size standards listed in the SBA's Table of Small Business Size Standards . The table has size standards for 1,036 industrial classifications in the North American Industrial Classification System. Businesses that exceed the applicable size standard for their primary industry do not meet the requirement of being small.", "The SBA's size standards are designed to (1) encourage competition within each industry and (2)\u00a0ensure that SBA assistance is provided only to firms that are not dominant in their field on a national basis. The size standards are derived through an assessment of four economic factors: (1)\u00a0the average firm size, (2) the average assets size as a proxy of start-up costs and entry barriers, (3) the four-firm concentration ratio (the cumulative share of total industry receipts of that industry's four biggest firms) as a measure of industry competition, and (4) the size distribution of firms. The SBA also considers the ability of small businesses to compete for federal contracting opportunities and, when necessary, several secondary factors \"as they are relevant to the industries and the interests of small businesses, including technological change, competition among industries, industry growth trends, and impacts of size standard revisions on small businesses.\" ", "Historically, the SBA has used the number of employees to determine if manufacturing and mining companies are small (ranging from fewer than 50 employees for some industries to fewer than 1,500 employees for others) and average annual receipts for most other industries (ranging from no more than $1 million for some industries to no more than $40 million for others)."], "subsections": []}, {"section_title": "Federal Agencies", "paragraphs": ["To make it easier to determine if an offeror meets the SBA's definition of a small business, prior to soliciting bids, federal agencies are required to classify a product or service being acquired in only one (NAICS code) industry, \"whose definition best describes the principal nature of the product or service being acquired even though for other purposes it could be classified in more than one.\" When acquiring a product or service that could be classified in two or more industries with different size standards, contracting officers must \"apply the size standard for the industry accounting for the greatest percentage of the contract price.\" If a solicitation calls for more than one item and allows offers to be submitted on any or all of the items, \"an offeror must meet the size standard for each item it offers to furnish.\" If a solicitation calling for more than one item requires offers on all or none of the items, \"an offeror may qualify as a small business by meeting the size standard for the item accounting for the greatest percentage of the total contract price.\"", "With several notable exceptions (e.g., HUBZone small businesses, SBA 8(a) program participants, and veteran-owned small businesses [VOSBs] and SDVOSBs seeking contracts with the Department of Veterans Affairs), businesses generally self-certify their status as small when they register their business in the SAM database.", "The contracting officer is required to accept an offeror's representation in a specific bid or proposal that it is a small business unless \"(1) another offeror or interested party challenges the concern's small business representation or (2) the contracting officer has a reason to question the representation.\" ", "If an offeror's small business status is challenged, the contracting officer is generally not allowed to award the contract until the SBA has made a size determination or 15 business days after the SBA receives the protest, whichever occurs first. The SBA's Office of Government Contracting Area Office (Area Office) serving the area in which the headquarters of the offeror is located initially reviews the protest. The Area Office is required, by regulation, to determine the offeror's size status within 15 business days after receipt of the protest, or \"within any extension of time granted by the contracting officer.\" If the SBA does not make a determination within the required time, the contracting officer \"may award the contract after determining in writing that there is an immediate need to award the contract and that waiting until SBA makes its determination will be disadvantageous to the government.\" ", "An appeal of the Area Office's decision may be filed with the SBA's Office of Hearings and Appeals (OHA) . If the OHA accepts the appeal for consideration and finds the protested concern to be ineligible for award, the contracting officer must \"terminate the contract unless termination is not in the best interests of the government, in keeping with the circumstances described in the [aforementioned] written determination. However, the contracting officer shall not exercise any options or award further task or delivery orders.\" Furthermore, a concern cannot become eligible for a specific award after the SBA has determined that it is not a small business, even if the concern takes action to meet the definition of a small business. ", "The SBA or the federal agency may suspend or debar a firm from future government contracts for misrepresenting its size status. In addition, individuals that knowingly misrepresent a business's size to secure a federal contract can be subject to civil and criminal penalties."], "subsections": []}]}, {"section_title": "The Pre-Award Process", "paragraphs": [], "subsections": [{"section_title": "Federal Agency Requirements", "paragraphs": ["15 U.S.C. \u00a7644(e)(1) states, \"To the maximum extent practicable, procurement strategies used by a Federal department or agency having contracting authority shall facilitate the maximum participation of small business concerns as prime contractors, subcontractors, and suppliers.\" To accomplish this goal, FAR regulations (FAR \u00a719.202-1) require contracting officers, when applicable, to take the following actions prior to awarding a federal contract:", "1. \"Divide proposed acquisitions of supplies and services (except construction) into reasonably small lots (not less than economic production runs) to permit offers on quantities less than the total requirement.\" 2. \"Plan acquisitions such that, if practicable, more than one small business concern may perform the work, if the work exceeds the amount for which a surety may be guaranteed by the SBA against loss under 15 U.S.C. \u00a7694b [generally $6.5 million, or $10 million if the contracting officer certifies that the higher amount is necessary].\" 3. \"Ensure that delivery schedules are established on a realistic basis that will encourage small business participation to the extent consistent with the actual requirements of the Government.\" 4. \"Encourage prime contractors to subcontract with small business concerns [primarily through the agency's role in negotiating an acceptable small business subcontracting plan with prime contractors on contracts anticipated to exceed $700,000 or $1.5 million for construction contracts].\" 5. \"Provide a copy of the proposed acquisition package to the SBA procurement center representative [PCR, duties are described later]\" for his or her review, comment and recommendation, or, if a PCR is not assigned, to the SBA Area Office serving the area in which the procuring activity is located \"at least 30 days prior to the issuance of the solicitation if (i) The proposed acquisition is for supplies or services currently being provided by a small business and the proposed acquisition is of a quantity or estimated dollar value, the magnitude of which makes it unlikely that small businesses can compete for the prime contract; (ii) The proposed acquisition is for construction and seeks to package or consolidate discrete construction projects and the magnitude of this consolidation makes it unlikely that small businesses can compete for the prime contract; or (iii) The proposed acquisition is for a consolidated or bundled requirement.\u2026 The contracting officer shall provide all information relative to the justification for the consolidation or bundling, including the acquisition plan or strategy and if the acquisition involves substantial bundling, the information identified in [FAR] 7.107-4. The contracting officer shall also provide the same information to the agency Office of Small and Disadvantaged Business Utilization [duties are described later].\" 6. \"Provide a statement explaining why the (i) Proposed acquisition cannot be divided into reasonably small lots (not less than economic production runs) to permit offers on quantities less than the total requirement; (ii) Delivery schedules cannot be established on a realistic basis that will encourage small business participation to the extent consistent with the actual requirements of the government; (iii) Proposed acquisition cannot be structured so as to make it likely that small businesses can compete for the prime contract; (iv) Consolidated construction project cannot be acquired as separate discrete projects; or (v) Consolidation or bundling is necessary and justified.\" 7. \"Process the 30-day notification concurrently with other processing steps required prior to the issuance of the solicitation.\" 8. \"If the contracting officer rejects the SBA procurement center representative's recommendation \u2026 document the basis for the rejection and notify the SBA procurement center representative [who (as described later) may appeal the rejection to the chief of the contracting office and, ultimately, to the agency head].\""], "subsections": []}, {"section_title": "The Role of SBA Procurement Center Representatives", "paragraphs": ["The SBA may assign one or more procurement center representatives (PCRs) to any contracting activity or contract administration office to implement the SBA's policies and programs. The SBA currently has 49 PCRs located in the SBA's six Area Offices. PCRs are required to comply with the contracting agency's directives governing the conduct of contracting personnel and the release of contract information.", "PCR duties include the following:", "Review proposed acquisitions to recommend \"the setting aside of selected acquisitions not unilaterally set aside by the contracting officer;\" new qualified small business sources; and the feasibility of breaking out components of the contract for competitive acquisitions. Review proposed acquisition packages. If the PCR (or, if a PCR is not assigned, the SBA Area Office serving the area in which the procuring activity is located) \"believes that the acquisition, as proposed, makes it unlikely that small businesses can compete for the prime contract,\" the PCR can recommend any alternate contracting method that he or she \"reasonably believes will increase small business prime contracting opportunities.\" The recommendation must be made to the contracting officer within 15 days after the package's receipt. Recommend small businesses \"for inclusion on a list of concerns to be solicited in a specific acquisition.\" Appeal to the contracting office's chief \"any contracting officer's determination not to solicit a concern recommended by the SBA for a particular acquisition, when not doing so results in no small business being solicited.\" This appeal may be further appealed to the agency head. Conduct periodic reviews of the agency's contracting activity, including the agency's assessment of any required small business subcontracting plan, \"to ascertain whether the agency is complying with the small business policies in this regulation.\" Sponsor and participate in conferences and training \"designed to increase small business participation in the contracting activities of the office.\""], "subsections": []}, {"section_title": "The Role of the Office of Small and Disadvantaged Business Utilization", "paragraphs": ["Every federal agency (except the SBA) that has procurement powers is required to have an OSDBU, whose director, by statute, reports directly to the head of the agency and has supervisory authority over agency staff performing certain procurement functions. The OSDBU's primary responsibility is to ensure that small businesses, SDBs, WOSBs, SDVOSBs, and HUBZone small businesses are treated fairly and that they have an opportunity to compete and be selected for a fair amount of the agency's contract dollars. Among its statutory responsibilities are the following: ", "\"Identify proposed solicitations that involve significant bundling of contract requirements, and work with the agency acquisition officials and the Administration to revise the procurement strategies for such proposed solicitations where appropriate to increase the probability of participation by small businesses as prime contractors, or to facilitate small business participation as subcontractors and suppliers, if a solicitation for a bundled contract is to be issued.\" Assist small businesses \"to obtain payments, required late payment interest penalties, or information regarding payments due to the concern from an executive agency or a contractor.\" Assign \"a small business technical adviser to each office to which the SBA has assigned\" a PCR. The small business technical advisor \"shall be a full-time employee of the procuring activity, well qualified, technically trained and familiar with the supplies or services purchased at the activity; and whose principal duty shall be to assist\" the PCR. Provide the agency's \"Chief Acquisition Officer and senior procurement executive \u2026 with advice and comments on acquisition strategies, market research, and justifications [related to limitations on the consolidation of contracts as a means to provide small businesses appropriate opportunities to participate as prime contractors and subcontractors].\" Provide training to small businesses and contract specialists, provided that the training does not interfere with the director carrying out his or her other responsibilities. Ensure that a small business that notifies the PCR prior to a contract's award that \"a solicitation, request for proposal, or request for quotation unduly restricts [its] ability \u2026 to compete for the award \u2026 is aware of other resources and processes available to address unduly restrictive provisions \u2026 even if such resources and processes are provided by such agency, the Administration, the Comptroller General, or a Department of Defense (DOD) procurement technical assistance program [described below].\" Review all subcontracting plans \"to ensure that the plan provides maximum practicable opportunity for small business concerns to participate in the performance of the contract to which the plan applies.\"", "In accordance with P.L. 109-163 , the National Defense Authorization Act of 2006, the DOD renamed its OSDBU the Office of Small Business Programs (OSBP). The act also redesignated the Army, Navy, and Air Force's OSDBUs to OSBPs of the Department of the Army, Navy, and Air Force, respectively."], "subsections": []}, {"section_title": "The Roles of Other Procurement Officers and Offices", "paragraphs": ["At the agency level, procurement department heads (sometimes titled senior procurement executive ) are responsible for implementing small business programs at their agencies, including achieving program goals. In general, procurement department staff who work on small business issues (often titled small business specialists ) coordinate with OSDBU directors on their agencies' small business programs.", "Chief acquisition officers provide a focal point for acquisition in agency operations. Their key functions include \"monitoring and evaluating agency acquisition activities, increasing the use of full and open competition, increasing performance-based contracting, making acquisition decisions, managing agency acquisition policy, acquisition career management, acquisition resources planning, and conducting acquisition assessments.\"", "The SBA must assign a breakout procurement center representative (breakout PCR) to each major procurement center. A major procurement center is, in the opinion of the SBA Administrator, a procurement center that purchases substantial dollar amounts of other than commercial items, and has the potential to incur significant savings as a result of the placement of a breakout PCR. ", "The breakout PCR advocates for (1) the appropriate use of full and open competition, and (2) the breakout of items, \"when appropriate and while maintaining the integrity of the system in which such items are used.\" The breakout PCR is in addition to the PCR.", "When a breakout PCR is assigned, the SBA must assign at least two co-located small business technical advisors. SBA breakout PCRs and technical advisors must comply with the contracting agency's directives governing the conduct of contracting personnel and the release of contract information. The SBA must obtain security clearances for its breakout PCRs and technical advisors as required by the contracting agency.", "The SBA has four commercial market r epresentatives who, among other duties, help prime contractors find small businesses that are capable of performing subcontracts; provide counseling on the contractor's responsibility to maximize subcontracting opportunities for small businesses; and conduct periodic reviews of contractors awarded contracts requiring an acceptable subcontracting plan that provides small businesses \"the maximum practicable opportunity to participate in contract performance consistent with its efficient performance\" (generally any solicitation to perform a contract that is expected to exceed $700,000 ($1.5 million for construction) and that has subcontracting possibilities).", "The SBA's business opportunity s pecialists provide, among other duties, guidance, counseling, and referrals for assistance with technical, management, financial, or other matters intended to improve the competitive viability of SBA 8(a) program participants. They provide 8(a) program participants comprehensive assessments of the firm's strengths and weaknesses; monitor and document their compliance with 8(a) program requirements; advise them on compliance with contracting regulations after the award of a 8(a) program contract or subcontract; review and monitor their compliance with mentor-prot\u00e9g\u00e9 agreements; represent the interests of the SBA Administrator and small businesses in the award, modification, and administration of 8(a) program contracts and subcontracts; and report fraud or abuse involving the 8(a) program.", "The Small Business Procurement Advisory Council (SBPAC), whose members are composed of the SBA Administrator (or his or her designee), the director of the Minority Business Development Agency, and the head of each OSDBU in each federal agency having procurement powers, has the following statutory duties:", "1. Develop positions on proposed procurement regulations affecting the small business community. 2. Submit comments reflecting such positions to appropriate regulatory authorities. 3. Conduct reviews of each OSDBU to determine the office's compliance with its statutory requirements. 4. Identify best practices for maximizing small business utilization in federal contracting that may be implemented by federal agencies having procurement powers. 5. Submit annually, to the House Committee on Small Business and Senate Committee on Small Business and Entrepreneurship, a report describing (1) the comments submitted to appropriate regulatory authorities, including any outcomes related to the comments; (2) the results of its review of each OSDBU ; and (3) best practices identified for maximizing small business contracting .", "The Defense Logistic Agency's Procurement Technical Assistance Program (PTAC) helps \"businesses pursue and perform under contracts with the Department of Defense, other federal agencies, state and local governments and with government prime contractors. Most of the assistance the PTACs provide is free. PTAC support to businesses includes registration in systems such as the System for Award Management (SAM), identification of contract opportunities, and help in understanding requirements and in preparing and submitting bids.\""], "subsections": []}]}, {"section_title": "Set-Asides and Sole Source Awards", "paragraphs": ["The Competition in Contracting Act of 1984 generally requires \"full and open competition\" for government procurement contracts. However, various provisions of the Small Business Act authorize or, in some cases, require federal agencies to provide for other than \"full and open competition through the use of competitive procedures\" when contracting with small businesses. For example, as mentioned previously, federal agencies are generally required to reserve contracts that have an anticipated value greater than the micro-purchase threshold (currently $10,000), but not greater than the simplified acquisition threshold (currently $250,000) exclusively for small businesses unless the contracting officer is unable to obtain offers from two or more small businesses that are competitive with market prices and the quality and delivery of the goods or services being purchased.", "In addition, federal agencies ", "are generally required to set aside contracts that have an anticipated value exceeding the simplified acquisition threshold exclusively for small businesses when there is a reasonable expectation by the contracting officer that offers will be obtained by at least two responsible small businesses offering the products of different small businesses (Rule of Two) and the award will be made at a fair market price; may similarly set aside contracts exceeding the simplified acquisition threshold for competition reserved for specific types of small businesses (e.g., 8(a) small businesses, HUBZone small businesses, WOSBs and SDVOSBs); may enter into negotiations directly with particular types of small businesses (e.g., a sole source award) when the award could not otherwise be made (e.g., only a single source is available or under urgent and compelling circumstances); and are required to grant HUBZone small businesses a price evaluation preference of not more than 10% in open and unrestricted competitions. "], "subsections": []}, {"section_title": "SBA Contracting Programs66", "paragraphs": ["Several SBA programs assist small businesses in obtaining and performing federal contracts and subcontracts. These include various prime contracting programs; subcontracting programs; and other assistance (e.g., contracting technical training assistance and oversight of the federal small business goaling program and the Surety Bond Guarantee program)."], "subsections": [{"section_title": "Prime Contracting Programs", "paragraphs": ["Several contracting programs allow small businesses to compete only with similar firms for government contracts or receive sole source awards in circumstances in which such awards could not be made to other firms. These programs provide small businesses an opportunity to win government contracts without having to compete against larger and more experienced companies."], "subsections": [{"section_title": "8(a) Program67", "paragraphs": ["The 8(a) Minority Small Business and Capital Ownership Development Program (named for the section of the Small Business Act from which it derives its authority) provides business development assistance to businesses owned and controlled by persons who are socially and economically disadvantaged. African Americans, Hispanics, Native Americans (including American Indians, Eskimos, Aleuts, and Native Hawaiians), Asian-Pacific Americans, and Subcontinent Asian Americans are presumed to be socially and economically disadvantaged. Other individuals can also qualify as socially and economically disadvantaged on a case-by-case basis. To be considered economically disadvantaged, an individual's net worth, excluding ownership interest in the 8(a) firm and equity in his or her primary personal residence, must be less than $250,000 at the time of application to the 8(a) Program, and less than $750,000 thereafter. ", "Federal agencies are authorized to award contracts for goods or services, or to perform construction work, to the SBA for subcontracting to 8(a) firms. The SBA is authorized to delegate the function of executing contracts to the procuring agencies and often does so. Once the SBA has accepted a contract for the 8(a) Program, the contract is awarded through either a set-aside or on a sole source basis, with the contract amount generally determining the acquisition method used. When the contract's anticipated total value, including any options, is less than $4 million ($7 million for manufacturing contracts), the contract is normally awarded without competition (as a sole source award). In contrast, when the contract's anticipated value exceeds these thresholds, the contract generally must be awarded via a set-aside with competition limited to 8(a) firms so long as there is a reasonable expectation that at least two eligible and responsible 8(a) firms will submit offers and the award can be made at fair market price. The SBA also provides technical assistance and training to 8(a) firms. Firms may participate in the 8(a) Program for no more than nine years. ", "In FY2017, the federal government awarded $27.2 billion to 8(a) firms. ", "$16.4 billion was awarded with an 8(a) preference ($8 billion through an 8(a) set-aside and $8.4 billion through an 8(a) sole source award); $4.8 billion was awarded to an 8(a) firm in open competition with other firms; and $6 billion was awarded with another small business preference (e.g., set-asides and sole source awards for small businesses generally and for HUBZone firms, women-owned small businesses, and service-disabled veteran-owned small businesses)."], "subsections": []}, {"section_title": "Historically Underutilized Business Zone Program72", "paragraphs": ["This program assists small businesses located in Historically Underutilized Business Zones (HUBZones) through set-asides, sole source awards (so long as the award can be made at a fair and reasonable price, and the anticipated total value of the contract, including any options, is below $4 million, or $7 million for manufacturing contracts) and price evaluation preferences (of up to 10%) in full and open competitions. The HUBZone program targets assistance to small businesses located in areas with low income, high poverty, or high unemployment. To be certified as a HUBZone small business, at least 35% of the small business's employees must generally reside in a HUBZone. ", "In FY2017, the federal government awarded $7.53 billion to HUBZone-certified small businesses. ", "$1.90 billion was awarded with a HUBZone preference ($1.49 billion through a HUBZone set-aside, $65.3 million through a HUBZone sole source award, and $346.9 million through a HUBZone price-evaluation preference); $1.53 billion was awarded to HUBZone-certified small businesses in open competition with other firms; and $4.10 billion was awarded with another small business preference (e.g., set-asides and sole source awards for small businesses generally and for 8(a), women-owned, and service-disabled veteran-owned small businesses)."], "subsections": []}, {"section_title": "Service-Disabled Veteran-Owned Small Business Program", "paragraphs": ["This program allows agencies to set aside contracts for SDVOSBs. Also, federal agencies may award sole source contracts to SDVOSBs so long as the award can be made at a fair and reasonable price, and the anticipated total value of the contract, including any options, is below $4 million ($6.5 million for manufacturing contracts). For purposes of this program, veterans and service-related disabilities are defined as they are under the statutes governing veterans affairs. ", "In FY2017, the federal government awarded $18.2 billion to SDVOSBs.", "$6.8 billion was awarded through a SDVOSB set-aside award; $4.3 billion was awarded to a SDVOSB in open competition with other firms; and $7.1 billion was awarded with another small business preference (e.g., set-asides and sole source awards for small businesses generally and for HUBZone firms, 8(a) firms, and WOSBs)."], "subsections": []}, {"section_title": "Women-Owned Small Business Program", "paragraphs": ["Under this program, contracts may be set aside for economically disadvantaged WOSBs in industries in which women are underrepresented and substantially underrepresented. Federal agencies may award sole source contracts to WOSBs so long as the award can be made at a fair and reasonable price, and the anticipated total value of the contract, including any options, is below $4 million ($6.5 million for manufacturing contracts).", "In FY2017, the federal government awarded $21.3 billion to WOSBs.", "$648.9 million was awarded with a WOSB preference ($580.5 million through a WOSB set-aside and $68.4 million through a WOSB sole source award); $7.0 billion was awarded to a WOSB in open competition with other firms; and $13.7 billion was awarded with another small business preference (e.g., set-asides and sole source awards for small businesses generally and for HUBZone firms, 8(a) firms, and SDVOSBs)."], "subsections": []}]}, {"section_title": "Subcontracting Programs", "paragraphs": ["Federal contracting officers are required to provide the SBA's PCR (or, if a PCR is not assigned, the SBA Area Office serving the procuring activity area) a \"reasonable period of time\" to review any solicitation requiring submission of a small business subcontracting plan and to submit advisory findings before the solicitation is issued. The PCR's advisory comments regarding the small business subcontracting plan's acceptability must be submitted, in writing, to the appropriate contracting officer within five working days after the plan's receipt. ", "As mentioned previously, the SBA's commercial market representatives help prime contractors find small businesses to perform subcontracts; counsel contractors on their responsibility to maximize subcontracting opportunities for small businesses; and conduct periodic reviews, often in concert with a SBA PCR, of contractors awarded contracts that require an acceptable small business subcontracting plan."], "subsections": []}]}, {"section_title": "Other Federal Agency Contracting Programs", "paragraphs": ["Federal agencies may also set aside contracts or make sole source awards to small businesses not participating in any other program under certain conditions."], "subsections": [{"section_title": "Department of Transportation Disadvantaged Business Enterprise Program", "paragraphs": ["The Department of Transportation's (DOT's) Disadvantaged Business Enterprise (DBE) Program originally began in 1980 as a minority/women's business enterprise program \"established by regulation under the authority of Title VI of the Civil Rights Act of 1964 and other nondiscrimination statutes that apply to DOT financial assistance programs.\" Congress has reauthorized the DBE program several times since its inception; most recently in P.L. 114-94 , the Fixing America's Surface Transportation Act (FAST-Act).", "The FAST-Act provides, that, except to the extent the Secretary of Transportation determines otherwise, not less than 10% of the amounts made available for any program under Titles I (federal-aid highways), II (innovative project finance), III (public transportation) and VI (innovation) of the act and 23 U.S. Code 403 (highway safety research and development), shall be expended with DBEs. DOT also has a separate DBE program for airport concessions.", "A DBE is a for-profit small business owned and controlled by socially and economically disadvantaged individuals. Eligibility for the DBE program differs somewhat from the 8(a) program. For example, under the DBE program, women are presumed to be socially and economically disadvantaged individuals. Also, to be regarded as economically disadvantaged, an individual must have a personal net worth (excluding ownership interest in the firm and equity in his or her primary personal residence) that does not exceed $1.32 million. The DBE must also meet SBA size criteria and have average annual gross receipts not exceeding $23.98 million. Size limits for the airport concessions DBE program are higher.", "The DBE program's eight objectives are to", "1. ensure nondiscrimination in the award and administration of DOT-assisted contracts in the department's highway, transit, and airport financial assistance programs; 2. create a level playing field on which DBEs can compete fairly for DOT-assisted contracts; 3. ensure that the department's DBE program is narrowly tailored in accordance with applicable law; 4. ensure that only firms that fully meet the program's eligibility standards are permitted to participate as DBEs; 5. help remove DBE-participation barriers in DOT-assisted contracts; 6. promote the use of DBEs in all types of federally-assisted contracts and procurement activities conducted by recipients; 7. assist the development of firms that can compete successfully in the marketplace outside the DBE program; and 8. provide appropriate flexibility to recipients of federal financial assistance in establishing and providing opportunities for DBEs."], "subsections": []}, {"section_title": "Subcontracting Programs for Small Disadvantaged Businesses", "paragraphs": ["Other federal programs promote subcontracting with small disadvantaged businesses (SDBs). SDBs include 8(a) participants and other small businesses that are at least 51% unconditionally owned and controlled by socially or economically disadvantaged individuals or groups. Individuals owning and controlling non-8(a) SDBs may have net worth of up to $750,000 (excluding ownership interests in the SDB firm and equity in their primary personal residence). Otherwise, however, SDBs must generally satisfy the same eligibility requirements as 8(a) firms, although they do not apply to the SBA to be designated SDBs in the same way that 8(a) firms do. ", "Federal agencies must negotiate \"subcontracting plans\" with the apparently successful bidder or offeror on eligible prime contracts prior to awarding the contract. Subcontracting plans set goals for the percentage of subcontract dollars to be awarded to SDBs, among others, and describe efforts that will be made to ensure that SDBs \"have an equitable opportunity to compete for subcontracts.\" Federal agencies may also consider the extent of subcontracting with SDBs in determining to whom to award a contract or give contractors \"monetary incentives\" to subcontract with SDBs. ", "As of February 11, 2019, the SBA's Dynamic Small Business Search database included 2,538 SBA-certified SDBs and 100,595 self-certified SDBs."], "subsections": []}]}, {"section_title": "Other Small Business Programs of Interest", "paragraphs": [], "subsections": [{"section_title": "The SBA 7(j) Management and Technical Assistance Program", "paragraphs": ["The SBA's 7(j) Management and Technical Assistance program provides \"a wide variety of management and technical assistance to eligible individuals or concerns to meet their specific needs, including: (a) counseling and training in the areas of financing, management, accounting, bookkeeping, marketing, and operation of small business concerns; and (b) the identification and development of new business opportunities.\" Eligible individuals and businesses include \"8(a) certified firms, SDBs, businesses operating in areas of high unemployment, or low income or firms owned by low income individuals.\"", "In FY2017, the 7(j) Management and Technical Assistance program assisted 4,100 small businesses."], "subsections": []}, {"section_title": "SBA Surety Bond Guarantee Program94", "paragraphs": ["The SBA's Surety Bond Guarantee program aims to increase small businesses' access to federal, state, and local government contracting, as well as private-sector contracts, by guaranteeing bid, performance, and payment bonds for small businesses that cannot obtain surety bonds through regular commercial channels. The program guarantees individual contracts of up to $6.5 million and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary. The SBA's guarantee ranges from not to exceed 80% to not to exceed 90% of the surety's loss if a default occurs. In FY2017, the SBA guaranteed 10,397 bid and final surety bonds with a total contract value of more than $6.3 billion.", "A surety bond is a three-party instrument between a surety (someone who agrees to be responsible for the debt or obligation of another), a contractor, and a project owner. The agreement binds the contractor to comply with the terms and conditions of a contract. If the contractor is unable to successfully perform the contract, the surety assumes the contractor's responsibilities and ensures that the project is completed. The surety bond reduces the risk associated with contracting.", "Surety bonds are meant to encourage project owners to contract with small businesses that may not have the credit history or prior experience of larger businesses and may be at greater risk of failing to comply with the contract's terms and conditions. ", "Surety bonds are important to small businesses interested in competing for federal contracts because the federal government requires prime contractors\u2014prior to the award of a federal contract exceeding $150,000 for the construction, alteration, or repair of any building or public work of the United States\u2014to furnish a performance bond issued by a surety satisfactory to the contracting officer in an amount that the officer considers adequate to protect the government."], "subsections": []}, {"section_title": "Small Business Mentor-Prot\u00e9g\u00e9 Programs101", "paragraphs": ["Small business mentor-prot\u00e9g\u00e9 programs typically seek to pair new businesses with more experienced businesses in mutually beneficial relationships. Prot\u00e9g\u00e9s may receive financial, technical, or management assistance from mentors in obtaining and performing federal contracts or subcontracts, or serving as suppliers under such contracts or subcontracts. Mentors may receive credit toward subcontracting goals, reimbursement of certain expenses, or other incentives. ", "The federal government currently has several mentor-prot\u00e9g\u00e9 programs to assist small businesses in various ways. ", "The 8(a) Mentor-Prot\u00e9g\u00e9 Program is a government-wide program designed to assist small businesses \"owned and controlled by socially and economically disadvantaged individuals\" participating in the SBA's Minority Small Business and Capital Ownership Development Program (commonly known as the 8(a) program) in obtaining and performing federal contracts. For that purpose, mentors may (1) form joint ventures with prot\u00e9g\u00e9s that are eligible to perform federal contracts set aside for small businesses; (2) make certain equity investments in prot\u00e9g\u00e9 firms; (3) lend or subcontract to prot\u00e9g\u00e9 firms; and (4) provide technical or management assistance to their prot\u00e9g\u00e9s. The SBA's A ll S mall B usiness Mentor-Prot\u00e9g\u00e9 Program is a government-wide mentor-prot\u00e9g\u00e9 program for all small business concerns, consistent with the SBA's mentor-prot\u00e9g\u00e9 program for participants in the SBA's 8(a) Business Development program. The Department of Defense (DOD) Mentor-Prot\u00e9g\u00e9 Program , in contrast, is agency-specific. It assists various types of small businesses and other entities in obtaining and performing DOD subcontracts and serving as suppliers on DOD contracts. Mentors may (1) make advance or progress payments to their prot\u00e9g\u00e9s that DOD reimburses; (2) award subcontracts to their prot\u00e9g\u00e9s on a noncompetitive basis when they would not otherwise be able to do so; (3) lend money to or make investments in prot\u00e9g\u00e9 firms; and (4) provide or arrange for other assistance. ", "Other agencies also have agency-specific mentor-prot\u00e9g\u00e9 programs to assist various types of small businesses or other entities in obtaining and performing subcontracts under agency prime contracts. The Department of Homeland Security (DHS), for example, has a mentor-prot\u00e9g\u00e9 program wherein mentors may provide prot\u00e9g\u00e9s with rent-free use of facilities or equipment, temporary personnel for training, property, loans, or other assistance. Because these programs are not based in statute, unlike the SBA and DOD programs, they generally rely upon preexisting authorities (e.g., authorizing use of evaluation factors) or publicity to incentivize mentor participation. ", "Currently, more than 1,200 mentor-prot\u00e9g\u00e9 agreements are in place, even though there are issues with the accuracy and thoroughness of some federal agency records."], "subsections": []}]}, {"section_title": "Small Business Procurement Goals", "paragraphs": ["Since 1978, federal agency heads have been required to establish federal procurement goals, in consultation with the SBA, \"that realistically reflect the potential of small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals\" to participate in federal procurement. Each agency is required, at the conclusion of each fiscal year, to report its progress in meeting the goals to the SBA.", "In 1988, Congress authorized the President annually to establish government-wide minimum participation goals for procurement contracts awarded to small businesses and small businesses owned and controlled by socially and economically disadvantaged individuals. Congress required the government-wide minimum participation goal for small businesses to be \"not less than 20% of the total value of all prime contract awards for each fiscal year\" and \"not less than 5% of the total value of all prime contract and subcontract awards for each fiscal year\" for small businesses owned and controlled by socially and economically disadvantaged individuals.", "Each federal agency was also directed to \"have an annual goal that presents, for that agency, the maximum practicable opportunity for small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals to participate in the performance of contracts let by such agency.\" The SBA was also required to report to the President annually on the attainment of the goals and to include the information in an annual report to Congress. The SBA negotiates the goals with each federal agency and establishes a small business eligible baseline for evaluating the agency's performance. The agency head is required to \"make consistent efforts to annually expand participation by small business concerns from each industry category.\" If the SBA and the agency cannot agree on the goals, the agency may submit the case to the Office of Management and Budget (OMB) Office of Federal Procurement Policy (OFPP) for resolution.", "The small business eligible baseline excludes certain contracts that the SBA has determined do not realistically reflect the potential for small business participation in federal procurement (such as those awarded to mandatory and directed sources), contracts funded predominately from agency-generated sources (i.e., non-appropriated funds), contracts not covered by the FAR, acquisitions on behalf of foreign governments, and contracts not reported in the Federal Procurement Data System \u2013 Next Generation, or FPDS-NG (such as government procurement card purchases and contracts valued less than $10,000). These exclusions typically account for 18% to 20% of all federal prime contracts each year.", "The SBA then evaluates the agencies' performance against their negotiated goals annually, using FPDS-NG data, managed by the U.S. General Services Administration (GSA), to generate the small business eligible baseline. This information is compiled into the official Small Business Goaling Report, which the SBA releases annually. Each agency that fails to achieve any proposed prime or subcontract goal is required to submit a justification to the SBA on why it failed to achieve a proposed or negotiated goal with a proposed plan of corrective action.", "Agencies can take credit in every category that is applicable to the recipient of the contract. For example, \"when counting goaling achievements, a contract awarded to a service-disabled Veteran-Owned Woman-Owned Small Business would be counted toward the Small Business (SB) goal, the Service-Disabled Veteran-Owned Small Business (SDVOSB) goal and the Women-Owned Small Business (WOSB) goal. However, these category counts are not summed to triple the total count. The Sum of Parts Does Not Equal the Whole (italics in original).\"", "Over the years, federal government-wide procurement goals have been established for small businesses generally ( P.L. 100-656 , the Business Opportunity Development Reform Act of 1988, and P.L. 105-135 , the HUBZone Act of 1997\u2014Title VI of the Small Business Reauthorization Act of 1997); small businesses owned and controlled by socially and economically disadvantaged individuals ( P.L. 100-656 ); women ( P.L. 103-355 , the Federal Acquisition Streamlining Act of 1994); small businesses located within a HUBZone ( P.L. 105-135 ); and small businesses owned and controlled by a service-disabled veteran ( P.L. 106-50 , the Veterans Entrepreneurship and Small Business Development Act of 1999).", "The current federal small business procurement goals are", "at least 23.0% of the total value of all small business eligible prime contract awards to small businesses for each fiscal year; 5.0% of the total value of all small business eligible prime contract awards and subcontract awards to small disadvantaged businesses (including participants in the SBA's 8(a) Program) for each fiscal year; 5.0% of the total value of all small business eligible prime contract awards and subcontract awards to women-owned small businesses; 3.0% of the total value of all small business eligible prime contract awards and subcontract awards to HUBZone small businesses; and 3.0% of the total value of all small business eligible prime contract awards and subcontract awards to service-disabled veteran-owned small businesses.", "There are no punitive consequences for not meeting these goals. However, the SBA's Small Business Goaling Report is distributed widely, receives media attention, and serves to heighten public awareness of the issue of small business contracting. For example, agency performance as reported in the SBA's Small Business Goaling Report is often cited by Members during their questioning of federal agency witnesses during congressional hearings. ", "As shown in Table 1 , the FY2017 Small Business Goaling Report , using FPDS-NG data, indicates that federal agencies met the federal procurement goal for small businesses generally, small disadvantaged businesses, and service-disabled veteran-owned small businesses in FY2017. ", " Table 1 also provides, for comparative purposes, the percentage of total reported federal contracts (without exclusions) awarded to those small businesses in FY2017."], "subsections": []}, {"section_title": "Certificate of Competency Program", "paragraphs": ["Before awarding a federal contract, the contracting officer must affirmatively determine that the business is responsible to perform the contract. If the contracting officer determines that an apparent successful small business offeror lacks certain elements of responsibility (e.g., is unable to fulfill the requirements of a specific government procurement because it lacks capability, competency, capacity, credit, integrity, perseverance, tenacity, or limitations on subcontracting), the officer is required to refer the matter in writing to the SBA for review and a possible Certificate of Competency (COC), even if the next acceptable offer is also from a small business. The COC certifies in writing that the small business meets all required elements of responsibility for the purpose of receiving and performing a specific government contract. The \"COC program empowers the SBA to certify to contracting officers as to all elements of responsibility of any small business concern to receive and perform a specific government contract. The COC program does not extend to questions concerning regulatory requirements imposed and enforced by other federal agencies.\""], "subsections": []}, {"section_title": "Post-Award Requirements", "paragraphs": ["As mentioned previously, the SBA's commercial market representatives conduct periodic compliance reviews of contractors awarded contracts that require an acceptable small business subcontracting plan. In addition, once the contract is completed, federal agencies are required to pay the contractor on a timely basis and pay interest penalties for late payments. Under specified circumstances, federal agencies may also pay contractors before the contract's payment's due date."], "subsections": [{"section_title": "Small Business Subcontracting Plan Reviews", "paragraphs": ["The periodic compliance review can take place on-site, at the contracting agency, or virtual. Materials that may be reviewed include the contractor's contract files, correspondence that is directly or indirectly related to the contract, IT systems, subcontracting methods, and procedures. Contractors are selected randomly for audit. The SBA may enter into agreements with other federal agencies to conduct these assessments.", "The compliance report includes compliant and non-compliant items found during the assessment of the contractor's subcontracting activities and a rating indicating the contractor's level of compliance or non-compliance, ranging from unsatisfactory to outstanding. If any deficiencies are found, the contractor is required to submit, within 30 days of the compliance review rating letter date, a corrective action plan (CAP). The CAP is submitted to the SBA Area Office via email, or any method designated by the SBA. The commercial market representative conducts a follow-up compliance report within six months to a year of the date the SBA acknowledges receipt of the contractor's CAP to ensure that corrective actions have been taken to eliminate the deficiencies. The SBA keeps the federal agency that awarded the contract informed of the contractor's adherence to correcting the deficiencies.", "If the contractor refuses to provide or address all deficiencies in the CAP, a delinquent CAP letter is sent advising the contractor that it has 15 days from the letter's date to comply with federal regulations. If an acceptable CAP is not received in the allotted time frame the case is escalated to the SBA's subcontracting program manager who informs the SBA's Office of Government Contracting director and works with the SBA's Office of General Counsel and the federal agency that awarded the contract for resolution or to begin accessing liquidated damages."], "subsections": []}, {"section_title": "Prompt Payments", "paragraphs": ["Once a contract is awarded, federal agencies are generally required to pay interest to prime contractors on any invoice payments the agency fails to make by the date(s) specified in the contract, or within 30 days of receipt of a proper invoice for the amount due if no date is specified in the contract. ", "Similar requirements exist for prime contractors in paying subcontractors on construction contracts. These requirements are especially important for small businesses in the construction industry. Specifically, every construction contract awarded by a federal agency must contain clauses obligating the prime contractor to (1) pay the subcontractor for \"satisfactory performance\" under the subcontract within seven days of receiving payment from the agency and (2) pay interest on any amounts that are not paid within the proper time frame. The contract must also obligate the prime contractor to include similar payment and interest penalty terms in its subcontracts, as well as require its subcontractors to impose these terms on their subcontractors. This latter provision ensures that the payment and interest penalty requirements flow down to all tiers of construction subcontractors.", "In addition, required subcontracting plans must incorporate terms obligating the prime contractor to notify the agency awarding the contract in writing if a subcontractor is paid a reduced price for goods supplied or services completed under the contract, or if payment is made to the subcontractor more than 90 days past due. The prime contractor must include the reason for the reduction in payment or failure to pay a subcontractor within 90 days. If the contracting officer for a covered contract (a contract that requires an acceptable subcontracting plan) determines that a prime contractor has a history of unjustified, untimely payments to contractors, the contracting officer shall record the contractor's identity, describe the circumstances under which the contractor may be determined to have a history of unjustified, untimely payments to subcontractors, and include the contractor's identity in, and make publicly available through, the Federal Awardee Performance and Integrity Information System, or any successor. This information is used by federal agencies to \"evaluate the business ethics and quality of prospective contractors competing for Federal contracts and to protect taxpayers from doing business with contractors that are not responsible sources.\" "], "subsections": []}, {"section_title": "Accelerated Payments", "paragraphs": ["Federal agencies are permitted to make an accelerated payment up to seven days before the required payment date in a federal contract, or earlier if the agency deems it necessary on a case-by-case basis if, after receiving a proper invoice, it is in the best interest of the government, and any of the following is true:", "the invoice in under $2,500; the payment is to a small business; or the payment is related to an emergency, disaster, or military deployment.", "In addition, the Secretary of Defense is required, to the fullest extent permitted by law, to establish an accelerated payment date for its small business prime contractors, with a goal of 15 days after receipt of a proper invoice for the amount due if a specific payment date is not established by contract. ", "The Secretary of Defense is also required to establish, to the fullest extent permitted by law, an accelerated payment date for its prime contractors that subcontract with small businesses, with a goal of 15 days after receipt of a proper invoice for the amount due if a specific payment date is not established by contract and the prime contractor agrees to make payments to the subcontractor \"in accordance with the accelerated payment date, to the maximum extent practicable, without any further consideration from or fees charged to the subcontractor.\" "], "subsections": []}]}, {"section_title": "Concluding Observations", "paragraphs": ["The small business contracting programs described in this report generally have strong bipartisan support. However, that does not mean that these programs face no opposition or that issues have not been raised concerning the impact or operations of specific programs. For example, small business advocates ", "seek policies that reduce or eliminate exclusions that narrow the reach of small business contracting preferences, want the SBA to use the total value of all prime contract awards in the Small Business Goaling Report, and want the SBA to use a more discerning methodology for awarding performance grades to federal agencies in meeting its small business contracting goals.", "Critics have questioned some of these programs' effectiveness, in terms of both promoting small business opportunities to win federal contracts and a more diversified, robust economy.", "Many observers judge the relative success or failure of federal efforts to enhance small business contracting opportunities by whether the federal government and individual federal agencies meet the procurement goals in the annual Small Business Goaling Report. In recent years, the federal government has generally succeeded in meeting the government-wide goals of awarding 23% of the total value of all small business eligible prime contract awards to small businesses generally, 5% to SDBs, and 3% to SDVOSBs. However, it has had difficulty meeting the goals of 5% to WOSBs and 3% to HUBZone small businesses. ", "The Small Business Goaling Report is the most convenient measure available to compare federal small business contracting performance over time, but it has limitations. For example, the report does not include all federal contracts, because some are not deemed to be small business eligible and others are not recorded in the FPDS-NG. In addition, the report does not evaluate the effect these contracts have on small businesses, industry competitiveness, or the overall economy. As one group of researchers has argued,", "the entire goal-setting process \u2026 is geared to measuring the dollars and contracts awarded to small business, and pays little attention to the effect that access to government contracts has on small business starts, growth, and wealth generation. Results of the program are also hard to isolate, difficult to measure, and generally not judged against the next best or other alternative policies [emphasis in original].", "Comprehensive studies examining the effect of small business contracting preferences on small business startups, growth, wealth generation, and industry competitiveness may prove useful for congressional oversight. In the meantime, although the Small Business Goaling Report has its limitations, it can help policymakers identify programs most in need of examination. For example, the SBA has announced that it is focusing additional efforts on promoting the HUBZone program to federal contracting officials, primarily due to the continuing difficulties federal agencies have had in meeting the 3% goal for HUBZone small businesses."], "subsections": []}]}}
{"id": "R45625", "title": "Attaching a Price to Greenhouse Gas Emissions with a Carbon Tax or Emissions Fee: Considerations and Potential Impacts", "released_date": "2019-03-22T00:00:00", "summary": ["The U.S. Fourth National Climate Assessment, released in 2018, concluded that \"the impacts of global climate change are already being felt in the United States and are projected to intensify in the future\u2014but the severity of future impacts will depend largely on actions taken to reduce greenhouse gas [GHG] emissions and to adapt to the changes that will occur.\" Members of Congress and stakeholders articulate a wide range of perspectives over what to do, if anything, about GHG emissions, future climate change, and related impacts. If Congress were to consider establishing a program to reduce GHG emissions, one option would be to attach a price to GHG emissions with a carbon tax or GHG emissions fee. In the 115th Congress, Members introduced nine bills to establish a carbon tax or emissions fee program. However, many Members have expressed their opposition to such an approach. In particular, in the 115th Congress, the House passed a resolution \"expressing the sense of Congress that a carbon tax would be detrimental to the United States economy.\"", "Multiple economic studies have estimated the emission reductions that particular carbon tax would achieve. For example, a 2018 study analyzed various impacts of four carbon tax rate scenarios: a $25/metric ton of CO2 and $50/metric ton of CO2 carbon tax, increasing annually by 1% and 5%. The study concluded that each of the scenarios would likely achieve the U.S. GHG emission reduction target pledged under the international Paris Agreement (at least in terms of CO2 emissions).", "A carbon tax system would generate a new revenue stream, the magnitude of which would depend on the scope and rate of the tax, among other factors. In 2018, the Congressional Budget Office (CBO) estimated that a $25/metric ton carbon tax would yield approximately $100 billion in its first year. CBO projected that federal revenue would total $3.5 trillion in FY2019.", "Policymakers would face challenging decisions regarding the distribution of the new carbon tax revenues. Congress could apply revenues to support a range of policy objectives but would encounter trade-offs among the objectives. The central trade-offs involve minimizing economy-wide costs, lessening the costs borne by specific groups\u2014particularly low-income households and displaced workers in certain industries (e.g., coal mining)\u2014and supporting other policy objectives.", "A primary argument against a carbon tax regards it potential economy-wide impacts, often measured as impacts to the U.S. gross domestic product (GDP). Some may argue that projected impacts should be compared with the climate benefits achieved from the program as well as the estimated costs of taking no action. The potential impacts would depend on a number of factors, including the program's magnitude and design and, most importantly, the use of carbon tax revenues.", "In general, economic literature finds that some of the revenue applications would reduce the economy-wide costs from a carbon tax but may not eliminate them entirely. In addition, some studies cite particular economic modeling scenarios in which certain carbon tax revenue applications produce a net increase in GDP compared to a baseline scenario. These scenarios involve using carbon tax revenues to offset reductions in other tax rates (e.g., corporate income or payroll taxes). Although economic models generally indicate that these particular revenue applications would yield the greatest benefit to the economy overall, the models also find that lower-income households would likely face a disproportionate impact under such an approach. As lower-income households spend a greater proportion of their income on energy needs (electricity, gasoline), these households are expected to experience disproportionate impacts from a carbon tax if revenues were not recycled back to them in some fashion (e.g., lump-sum distribution).", "A price on GHG emissions could create a competitive disadvantage for some industries, particularly \"emission-intensive, trade-exposed industries.\" Policymakers have several options to address this concern, including establishing a \"border carbon adjustment\" program, which would levy a fee on imports from countries without comparable GHG reduction programs. Alternatively, policymakers could allocate (indefinitely or for a period of time) some of the carbon tax revenues to selected industry sectors or businesses. Relatedly, a carbon tax system is projected to disproportionately impact fossil fuel industries, particularly coal, and the communities that rely on their employment. To alleviate these impacts, policymakers may consider using some of the revenue to provide transition assistance to employees or affected communities."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The U.S. Fourth National Climate Assessment, released in 2018, concluded that \"the impacts of global climate change are already being felt in the United States and are projected to intensify in the future\u2014but the severity of future impacts will depend largely on actions taken to reduce greenhouse g as [GHG] emissions and to adapt to the changes that will occur.\" Although a variety of efforts seeking to reduce GHG emissions are currently underway on the international and sub-national level, federal policymakers and stakeholders have different viewpoints over what to do, if anything, about future climate change and related impacts. Their views regarding climate change cover a wide range of perspectives. ", "For example, some contend that climate change poses a \"direct, existential threat\" to human society and that nations must start making significant reductions in GHG emissions in order to avoid \"dire effects.\" To support this argument, proponents of climate change mitigation highlight the evidence and conclusions from recent reports that are generally considered authoritative, including:", "1. The Intergovernmental Panel on Climate Change, Global W arming of 1.5\u00b0C , 2018; and 2. The U.S. Global Change Research Program, Fourth National Climate Assessment , Volume II: Impacts, Risks, and Adaptation in the United States , 2018. ", "On the other hand, some question whether there are sufficient risks of climate change to merit a federal program requiring GHG emission reductions. In addition, others argue that a unilateral approach to climate change by the United States could disproportionately impact domestic industries while achieving minimal results in global climate change mitigation. ", "If Congress were to consider establishing a program to reduce GHG emissions, one option would be to apply a tax or fee on GHG emissions or the inputs that produce them. This type of approach is commonly called a carbon tax or a GHG emissions fee (see \"Terminology Issues: A Carbon Tax or an Emissions Fee?\").", "This report does not compare and analyze the multiple policy tools available to Congress that could address climate change (see text box \"Other Policy Options for Addressing GHG Emissions\"). This report focuses on the policy considerations and potential impacts of using a carbon tax or GHG emissions fee to control GHG emissions.", "The key human-related GHG is CO 2 , which is generated primarily through the combustion of fossil fuels: coal, oil, and natural gas. In 2016, fossil fuel combustion accounted for 94% of U.S. CO 2 emissions and 76% of U.S. GHG emissions. A carbon tax could apply either directly to GHG emissions or to the materials\u2014based on their carbon contents\u2014that ultimately generate the emissions (i.e., \"emissions inputs\"). A carbon price on emissions or their emissions inputs\u2014mainly fossil fuels\u2014would increase the relative price of the more carbon-intensive energy sources, particularly coal. This result could spur innovation in less carbon-intensive technologies (e.g., renewable energy, nuclear power, carbon capture and sequestration [CCS]) and stimulate other behavior that may decrease emissions, such as efficiency improvements. The energy price increases could also have both economy-wide impacts and negative effects on specific industries and particular demographic groups.", "A carbon tax approach has received some attention and debate in recent years. In the 115 th Congress, Members introduced nine carbon tax or fee proposals. Outside of Congress, the Climate Leadership Council\u2014a bipartisan group of former policymakers and industry leaders\u2014published a conceptual carbon tax approach in 2017 that generated some interest. Some of the industry leaders on the council represent major energy companies, including Shell, BP, and ExxonMobil.", "On the other hand, many Members have expressed their opposition to a carbon tax. Starting in the 112 th Congress and going through the 115 th Congress, Members have introduced resolutions in both the House and Senate expressing the view that a carbon tax is not in the economic interests of the United States. In 2018, the House passed a resolution \"expressing the sense of Congress that a carbon tax would be detrimental to the United States economy\" ( H.Con.Res. 119 ). An analogous resolution was not introduced in the Senate in the 115 th Congress. ", "The first section of this report examines carbon tax design issues, including the point of taxation, the rate of taxation, and potential border carbon adjustments. The second section discusses issues related to the distribution of carbon tax revenues. The third section discusses additional considerations associated with a carbon tax program, including estimates of GHG emissions, federal revenue, and fossil fuel prices and changes in energy use. The fourth section provides concluding observations. "], "subsections": []}, {"section_title": "Carbon Tax Design Considerations", "paragraphs": ["If policymakers decide to establish a carbon tax system, Congress would face several key design decisions, including the point of taxation\u2014where to impose the tax and what to tax\u2014the rate of taxation, and whether and/or how to address imported carbon-intensive materials. ", "Alternatively, Congress could direct one or more federal agencies to determine these design features through a rulemaking procedure. Although a few of the GHG emission reduction proposals in prior Congresses delegated such authority to an agency, such as the U.S. Environmental Protection Agency (EPA), all of the proposals since the 111 th Congress have included some degree of design details in the statutory language. (A later section discusses carbon tax revenue application considerations.)"], "subsections": [{"section_title": "Point of Taxation", "paragraphs": ["The point of taxation would determine which entities would be required to (1) make tax payments based on emissions or emission inputs, such as fossil fuels, (2) monitor emissions or emission inputs, and (3) maintain records of relevant activities and transactions. This section provides some considerations for policymakers deciding which GHG emissions and/or emission sources to cover in a carbon tax system.", "Throughout the U.S. economy, millions of discrete sources generate GHG emissions: power plants, industrial facilities, motor vehicles, households, commercial buildings, livestock, etc. Administrative costs and challenges would likely increase with a broader scope of an emissions tax. ", "A carbon tax may apply to CO 2 emissions alone, which account for most U.S. GHG emissions, or to multiple GHGs. Carbon tax proposals that apply only to CO 2 generally attach a price to a metric ton of CO 2 emissions (mtCO 2 ). Some sources emit non-CO 2 GHGs, such as methane, nitrous oxides, and sulfur hexafluoride. GHG emissions from these sources could be addressed by attaching a price to a metric ton of CO 2 emissions-equivalent (mtCO 2 e). This term of measure is used because GHGs vary by global warming potential (GWP). At these sources, the determined GWP values would be an important issue.", "Policymakers may consider limiting the tax to sectors or sources that emit above a certain percentage of total U.S. GHG emissions, many of which currently report their emissions to the government. For more than 20 years, monitoring devices or systems have been installed in smokestacks of most large facilities, such as power plants, which are required to periodically report emissions data to EPA. In addition, since 2010, EPA has collected annual emissions data from approximately 8,000 facilities that directly release above certain amounts of GHG emissions. Using these established monitoring frameworks, policymakers could employ a \"downstream\" approach, applying a carbon tax at the point where the GHGs from these facilities are released to the atmosphere. ", "Alternatively, the tax could be applied to reliable proxies for emissions, such as emission inputs. For example, the carbon content of fossil fuels\u2014coal, natural gas, petroleum\u2014can serve as a proxy for the emissions released when the fuels are combusted. Applying a tax on emission inputs allows for the consideration of various points of taxation. For instance, emission inputs could be taxed at \"upstream\" (e.g., wells) or \"midstream\" stages in that process (e.g., refineries), the latter allowing for potential tax administration advantages that may be provided by specific infrastructure chokepoints in the fossil fuel market. For example, with respect to petroleum, the number of upstream sources\u2014wells that produce crude oil\u2014is over 445,000, but the number of midstream sources\u2014facilities that refine crude oil\u2014is only 137. ", " Table A-1 (in Appendix A) lists the top GHG emission sources in the United States. These sources combined to account for approximately 95% of U.S. GHG emissions in 2016. Table A-1 identifies the number of entities for each source category (e.g., number of coal mines, number of steel production facilities) and the percentage of total U.S. GHG emissions the category contributes. ", "In the case of fossil fuel combustion\u2014which accounted for 76% of total U.S. GHG emissions\u2014the table provides several options for segmenting the universe of sources if policymakers choose to implement a carbon tax. It identifies the number of entities that might be subject to the carbon tax under a particular option (pending any exclusions). For example, policymakers could address fossil fuel combustion emissions by applying a carbon tax to fossil fuels (based on their carbon content) at the following entities, which include both upstream and midstream infrastructure chokepoints:", "137 petroleum refineries (based on 2017 data) and 166 petroleum importers (based on 2018 data); 671 coal mines and eight companies supplying imported coal (based on 2017 data); and 1,679 entities that report natural gas deliveries to the Energy Information Administration (EIA) on Form EIA-176 and 123 natural gas fractionators (based on 2016 data).", "Some of the above points of taxation might take advantage of the administrative frameworks for existing federal excise taxes. For example, a per-barrel federal excise tax on crude oil at the refinery supports the Oil Spill Liability Trust Fund. An excise tax on the sale or use of coal supports the Black Lung Disability Trust Fund. "], "subsections": []}, {"section_title": "Rate of Carbon Tax", "paragraphs": ["A central policy choice when establishing a price on GHG emissions is the rate of the carbon tax. Several approaches, which are discussed below, could inform the decision. "], "subsections": [{"section_title": "GHG Emissions Target Approach", "paragraphs": ["One approach would set the carbon tax rate at a level or pathway\u2014based on modeling estimates\u2014that would achieve a specific GHG emissions target. For example, a 2018 study estimated the carbon tax rate needed to meet the U.S. GHG emission reduction targets established under the 2015 Paris Agreement: 26%-28% below 2005 net GHG emission levels by 2025. The study found that a constant tax rate of $43/ton starting in 2019 would meet the 2025 reduction target. ", "Emissions reduction estimates from carbon tax programs are based on multiple assumptions. Accordingly, such estimates provide different tax rates needed to meet a particular emissions target depending on these assumptions. See \" Impacts on GHG Emission Levels \" for selected analyses of emission reductions for a given carbon price and rate of price increase."], "subsections": []}, {"section_title": "Marginal Benefits or \"Social Cost of Carbon\" Approach", "paragraphs": ["Under another approach, policymakers could base the carbon tax rate on the estimated marginal net benefits associated with reduced CO 2 emissions. The net benefits would be the avoided net damages (i.e., costs) of climate change. The estimates of net benefits of avoided emissions often rely on analyses of the social cost of carbon (SC-CO 2 ) or the social cost of greenhouse gases (SC-GHG ). Therefore, policymakers could use SC-CO 2 measurements\u2014as the basis for an estimate of the net benefits of a marginal change in emissions\u2014to set the rate of a carbon tax or emissions fee.", "One potential challenge of relying on SC-CO 2 estimates to set a carbon fee are methodological concerns. For example, the existing estimates in peer-reviewed research cover a wide range. In addition, some argue that the underlying simulation models for estimating the SC-CO 2 values are insufficient. For any level of emissions, the projected increase in global average temperature may cover multiple degrees Fahrenheit, and other measures of climate change, such as precipitation patterns, may encompass directional uncertainties. No estimates of impacts are comprehensive at this time, and many of the risks are difficult to estimate and value.", "When valuing the SC-CO 2 , analysts encounter a range of views on methods and assumptions, and establishing study parameters may be challenging. For example, estimates of the monetary values of climate change impacts may be difficult or controversial to estimate, such as the monetary values associated with human deaths or sickness. A related framework question is whether to include global climate impacts or just domestic impacts.", "In addition, the element of time in climate change impacts particularly complicates the valuation. The fact that many impacts of climate change will occur in the distant future requires consideration of society's willingness to pay in the near term to reduce emissions that would cause future damages, mostly to future generations. To take time into account, economists discount future values to a calculated \"present value.\" Economists do not agree on the appropriate discount rate(s) to use for a multi-generational, largely nonmarket issue such as human-induced climate change. The choice of discount rate can significantly increase or decrease values of the SC-CO 2 . A low discount rate would give greater value today to future impacts than would a higher discount rate. High discount rates can reduce the value today of future climate change impacts to a small fraction of their undiscounted values. A high discount rate would recommend applying fewer of today's resources to addressing climate change impacts in the future. ", "Since 2008, federal agencies have used SC-CO 2 estimates in dozens of final rulemakings as a method to estimate the net benefits of abating CO 2 emissions. An Interagency Working Group prepared SC-CO 2 estimates, which were updated over time and subjected to expert and public comment. On March 28, 2017, President Trump issued Executive Order 13783, \"Promoting Energy Independence and Economic Growth,\" which effectively withdrew the federal SC-CO 2 estimates. Nonetheless, federal agencies have used new, interim values generated by EPA in 2017, modified from the withdrawn technical support documents, in regulatory and other decisions. Legislation could set a carbon price citing any of these SC-CO 2 values or others available from nonfederal researchers or prescribe methods for estimating new ones. ", "Using SC-CO 2 estimates to set the tax rate would involve a cost-benefit framework. Although many posit that a cost-benefit framework remains the best option, some economists argue that a cost-benefit framework may be inappropriate for climate change policy for these reasons ", "Many experts expect climate change\u2014and policies to address it\u2014to cause nonmarginal changes to economies and ecosystems. The changes are expected to increase disproportionately with incremental climate change with a potential for crossing critical \"tipping points\" after which systems change dramatically and rapidly. Climate change impacts are multi-generational, and uncertainty and disagreement exists about whether and how to assign a present value to social costs and benefits over generations. Some impacts from climate change may be irreversible on the timescale of human civilizations, such as melting of major ice sheets in Antarctica or Greenland. "], "subsections": []}, {"section_title": "Other Considerations", "paragraphs": ["Policymakers might consider a carbon tax as a fiscal tool to help reduce the federal deficit, reduce other taxes, or pay for specific programs that may or may not be related to climate change policy. In addition, some have proposed a phased-in approach, setting a rate that is initially lower but increases at an announced or adjustable rate either for a fixed period or indefinitely. Advantages of this approach include providing an opportunity for consumers and investors to adjust their behavior before the higher tax rates go into effect, such as purchasing more energy efficient appliances or investing in low-emissions technologies. Phasing in a carbon tax, however, could delay climate-related benefits. ", "If Congress finds agreement in principle on carbon pricing, the rate(s) could emerge from the process of reaching political agreement. Elements that might be considered include the options described above or consideration of the magnitude of overall economic impact; impacts on certain economic sectors, regions, or population groups; timing to motivate and allow an orderly transition to a lower-GHG economy; or other factors."], "subsections": []}]}, {"section_title": "Border Carbon Adjustments", "paragraphs": ["Many stakeholders have voiced concerns over how a U.S. carbon price system would interact with policies in other nations, particularly if the United States were to enact a carbon tax system that covers more sources or is more stringent than enacted elsewhere. A central concern is that a U.S. carbon tax could raise U.S. prices more than the prices of goods manufactured abroad, potentially creating a competitive disadvantage for some domestic businesses. Certain businesses may become less profitable, lose market share, and reduce jobs. ", "The industries generally expected to experience disproportionate impacts under a U.S. carbon tax are often described as \"emission-intensive, trade-exposed\" industries. An industry's CO 2 emission intensity is a function of both direct CO 2 emissions from its manufacturing process (e.g., CO 2 from cement or steel production) and indirect CO 2 emissions from the inputs to the manufacturing process (e.g., electricity, natural gas). Such industries are likely to experience greater cost increases than less carbon intensive industries, all else being equal. In general, trade-exposed industries are those that face greater international competition compared to other domestic industries. A carbon tax could present a particular challenge for these industries, because they might be less able to pass along the tax in the form of higher prices, because they may lose global market share\u2014and jobs\u2014to competitors in countries lacking comparable carbon policies.", "Policymakers might consider approaches to mitigate these potential economic impacts in several ways. One approach that has received interest in recent years is a border adjustment mechanism, which is often described as a border carbon adjustment (BCA) in the carbon tax context. A BCA would apply a tariff to emission-intensive, imported goods such as steel, aluminum, cement, and certain chemicals. Each of the carbon price proposals in the 115 th Congress would have established a BCA to address emission-intensive imports.", "Another rationale for adding a BCA to a carbon tax system is the possibility that it would encourage other nations to adopt comparable carbon price policies. Many of the recently proposed BCA mechanisms allow for exemptions for nations with comparable programs.", "To date, no nations have implemented a BCA as part of their climate change policies. Establishing an economically efficient BCA would likely present substantial challenges. For example, policymakers must decide which goods and/or industries would be covered by a BCA and how the adjustment program would assess the comparability of varied climate-related policies in other nations. In addition, accurately determining and verifying the volume of GHG emissions embodied in a particular imported product would be data intensive and challenging. To alleviate some of the measurement complexity, policymakers could limit the program to selected industries and apply default values and assumptions to particular manufacturing processes. However, this simplified approach could result in less accurate import price adjustments, which could potentially affect the accuracy of GHG emission reductions achieved by the carbon tax program. Another option would be to allow companies to provide measured, independently verified emissions data as an alternative to default values.", "In addition, the border adjustment approach would likely raise concerns of violating international trade rules. Further, some researchers have highlighted the potential for unintended consequences from a BCA. For example, some studies have found that a border adjustment may lead to lower net exports than the carbon price alone, due to the adjustment's terms-of-trade effect on U.S. currency. These issues are beyond the scope of this report, but some of the concerns may be lessened to some degree if a larger number of nations establish comparable emission reduction policies, as many have agreed to do under the Paris Agreement. ", "Another possible rationale for a BCA is to address the concern of \"emissions leakage\" (or \"carbon leakage\"). Emissions leakage \"occurs when economic activity is shifted as a result of the emission control regulation [e.g., a carbon tax program] and, as a result, emission abatement achieved in one location that is subject to emission control regulation is [diminished] by increased emissions in unregulated locations.\" The concern of emissions leakage has been central in the debate over whether the United States (or any nation) should unilaterally address GHG emissions. A BCA may diminish the potential for emissions leakage by reducing the incentive to shift economic activity to a nation without a comparable carbon tax. However, some recent studies raise questions regarding the degree to which emissions leakage would be a concern under a unilateral U.S. carbon tax. "], "subsections": []}]}, {"section_title": "Applications for Carbon Tax Revenue", "paragraphs": ["Although a tax may be levied on fossil fuels or GHG emission sources at various points in the economy, the carbon tax impacts may be experienced elsewhere. Policymakers have multiple options to address these expected impacts. Policymakers would face challenging decisions regarding the distribution of the new carbon tax revenues. As discussed below, some economic analyses indicate that certain distributions of tax revenue\u2014depending on the level of the tax\u2014would have a greater economic impact than the direct effects from the tax or fee on GHG emissions. ", "Carbon tax revenues could be treated as general fund revenue without a dedication to a specific purpose in the enacting legislation (i.e., subject to the annual appropriations process), or policymakers could state that the new revenues would support deficit (or debt) reduction. Alternatively, the enacting legislation could return the tax revenue to the economy in some manner, sometimes called \"revenue recycling.\" All of the carbon tax legislative proposals in recent Congresses have proposed some manner of revenue recycling, specifically directing the carbon tax revenue to support specific policy objectives. ", "Carbon tax revenues may be used to support a variety of policy goals. When deciding how to allocate the new revenue stream, policymakers would likely encounter trade-offs among objectives, including:", "reducing the economy-wide costs resulting from a carbon tax program; alleviating the costs borne by subgroups in the U.S. population, particularly low-income households and/or communities most dependent on carbon-intensive economic activity; and supporting specific policy objectives, such as domestic employment, climate change adaptation, energy efficiency, technological advance, energy diversity, or federal deficit reduction, among others.", "In general, economic carbon tax studies have found that the relative ranking of revenue recycling options to mitigate the economy-wide impacts is generally the opposite of the relative ranking for alleviating distributional impacts. The contrasting relative rankings highlight a central tradeoff policymakers would face when deciding how to allocate carbon tax revenues.", "The following sections discuss these trade-offs and some of the revenue application options that have received attention in recent years. A large body of economic literature has examined the economic impacts of hypothetical carbon tax programs, particularly the impacts of using the carbon tax revenues for different purposes. Many of the economic studies cited below were prepared prior to the enactment of the Tax Cuts and Jobs Act (TCJA, P.L. 115-97 ). Signed by President Trump in December 2017, the act changed various elements of the U.S. federal tax system. In particular, the act lowered the corporate income tax rate from 35% to 21%. As discussed below, adjusting the corporate income tax rate is one of the central policy options generally considered in carbon tax economic literature both before and after enactment of P.L. 115-97 . Based on a selected review of the economic literature that includes the tax code changes in P.L. 115-97 , the central conclusions from carbon tax literature regarding revenue recycling appear to be largely unchanged. "], "subsections": [{"section_title": "Economy-Wide Impacts", "paragraphs": ["A primary concern with a carbon tax is the potential economy-wide costs that may result. Generally, a tax or fee on GHG emissions or the fuels that generate them would increase certain energy prices, namely fossil fuels, in the near- to medium-term as well as the prices of goods and services produced using these materials, like electricity. This outcome is inherent to the carbon tax, as its purpose is to increase the relative price of the more carbon-intensive energy sources compared to less carbon-intensive alternatives, encourage innovation in less carbon-intensive technologies, and promote other activity (e.g., energy efficiency) that may decrease emissions. These expected outcomes will have some economy-wide impacts. ", "Ultimately, the economy-wide effects would depend on a number of factors, including, but not limited to, the magnitude and scope of the carbon tax and, most importantly, use of the ensuing revenues. Economy-wide costs (referred to as macroeconomic costs) are often measured in terms of changes in projected gross domestic product (GDP) or another societal-scale metric, such as economic welfare. The magnitude of macroeconomic impacts from a carbon tax has been a subject of debate among policymakers and stakeholders. In addition, results of economy-wide impacts will not include comparisons of impacts to different subpopulations or geographic regions, which may be of interest to policymakers. ", "Multiple economic studies and models have examined and compared various options for addressing the economy-wide impacts that may result from a carbon tax. One option for reducing the economic cost of a carbon tax is using the revenue to reduce existing taxes, such as those on labor, income, and investment. Economists generally describe such taxes as distortionary, because the taxes discourage economically beneficial activity, such as employment and investment. ", "Another option for policymakers is to use the tax revenues to address the national debt. Fewer studies have examined deficit reduction scenarios, because \"modeling the effects of budget deficits is much more difficult than modeling the effects of tax cuts.\" Some studies have concluded that using tax revenues for this purpose would help alleviate economy-wide costs from a carbon tax because of the reduced need to impose distortionary taxes in the future. These studies indicate that the economy-wide benefit would be delayed and its realization assumes policymakers would, sometime in the future, address the deficit by raising taxes.", "Many recent legislative proposals would distribute the carbon tax revenue back to households in lump-sum payments. Policymakers have generally included this carbon tax revenue application to address distribution impacts (discussed below). These payments could take multiple forms. Economic analyses typically assume an equal payment to individuals or households regardless of their income or location or the effects of the carbon price on them individually. Alternatively, payments could be targeted or scaled to different segments of the population.", "Among the options mentioned above, economic studies indicate that using carbon tax revenues to offset reductions in existing, distortionary taxes would be the most economically efficient use of the revenues and yield the greatest benefit to the economy overall. This concept is sometimes referred to as a \"tax swap.\" ", "Using carbon tax or fee revenues to offset other distortionary taxes (e.g., labor or capital) may yield a \"double-dividend,\" which includes: ", "reduced GHG emissions; and reduced market distortions by reducing other distortionary taxes, such as investment or income. ", "The economic models that examine the economic impacts of a carbon tax differ in their frameworks and underlying assumptions and often include multiple scenarios involving different uses of carbon tax revenue. In general, the economic models find that certain revenue recycling options may reduce the economy-wide carbon tax impacts but may not eliminate them entirely. ", "Some studies cite particular economic modeling scenarios in which a carbon tax with certain revenue recycling applications would produce a net increase in GDP or economic welfare compared to a baseline scenario. These results indicate that, in certain modeling conditions, the economic improvements gained by reducing existing distortionary taxes would be greater than the costs imposed by the new carbon tax (without including the intended climate benefits of the policy). For example, results from a 2018 study demonstrated a net increase in GDP, compared to baseline conditions, when carbon tax revenues were used to finance proportionate reductions in labor tax rates (payroll tax). ", "In general, the economic carbon tax studies usually agree on the relative ranking of revenue recycling options in terms of their ability to mitigate the economy-wide impacts of a carbon tax program. The studies indicate that the approaches that use carbon tax revenue to proportionately lower existing tax rates are able to mitigate more of the carbon tax economy-wide costs than using the revenue to provide a lump-sum distribution to individuals or households. ", "Researchers prepared multiple carbon tax analyses prior to the enactment of the TCJA in 2017 that estimated the magnitude GDP impacts. As with other estimates relating to carbon tax impacts, the results depend on the scope of the carbon tax, underlying assumptions in the analytical model, and the terms of measurement: Some estimates measure GDP growth rates; others measure actual GDP.", " Figure 1 illustrates the modeled GDP results from a 2018 carbon tax analysis that includes the changes made by the TCJA. This study assessed the GDP impacts under a $50/mtCO 2 e carbon tax (starting in 2020 and increasing by 2% annually) that would apply to CO 2 emissions from fossil fuel combustion and methane emissions from fossil fuel production activities. The figure compares projected GDP impacts under a baseline scenario (i.e., no carbon tax) with three carbon tax revenue applications: a payroll tax rate reduction tax swap, a lump-sum distribution to households, and a scenario that would use tax revenue to reduce the national debt for 10 years and then use revenues for a lump-sum distribution to households. The figure projects GDP impacts in 2020, 2024, 2029, and 2039. ", "As the figure indicates, the payroll tax rate scenario would result in a 0.1% loss of GDP in the first year (2020), but would yield GDP gains in subsequent years compared to baseline. The lump-sum distribution approach would yield GDP losses each year, ranging from 0.3% to 0.4% below the projected baseline. The deficit reduction approach would yield a range of GDP losses in the first 10 years\u2014ranging from 0.4% to 0.04%\u2014but would yield a GDP gain in 2039 (if not before), compared to baseline. ", "Opponents of a carbon tax approach often highlight the GDP losses that would result from a carbon tax. Policymakers and stakeholders may have different perspectives regarding whether the magnitude of the GDP impacts are significant. In addition, GDP impact estimates may be presented in several ways. For example, one could compare the differences in GDP value for a particular year between carbon tax scenarios and a baseline scenario. This approach is employed in the above figure. Alternatively, one could present the GDP losses with a cumulative measure. For instance, if one were to add up the annual GDP losses (for example, over a 10-year period) from the lump-sum scenario compared to the baseline scenario, the resulting sum would be much larger. These types of calculations would require assumptions about annual GDP growth rates.", "Some may point out that the GDP impact estimates do not account for the environmental and public health benefits for reducing GHG emissions and that the GDP projections should be compared with the climate benefits achieved from the program as well as the estimated costs of taking no action. As discussed above, estimates of climate-related benefits and costs often contain considerable uncertainty and have generated debate in recent years."], "subsections": []}, {"section_title": "Household Impacts", "paragraphs": ["Many economic analyses have found that a carbon tax (before revenue recycling) would produce a regressive outcome among households, with lower-income households facing a larger impact from the tax than higher-income households. However, \"the degree to which a carbon tax is found to disproportionately burden low-income households varies across studies, based on the metrics against which analysts measure costs.\"", "Entities that pay the carbon tax may pass its costs back to fuel producers or forward to fuel consumers. If entities pass the costs forward, consumers would face higher prices for fuels and electricity and carbon-intensive products. When the carbon tax is passed forward to consumers, lower-income households in particular would likely face a disproportionate impact (i.e., regressive outcome), because a larger percentage of their income is used to pay for energy needs, such as electricity, gasoline, or home heating oil.", "Many economic analyses of carbon price scenarios assume that the vast majority (if not all) of the carbon tax impact is passed forward to consumers, leading to a regressive outcome. On the other hand, if entities pass the costs backward to producers, the tax impacts would fall on labor through reduced wages or owners of capital through reduced returns on investment. Economic models that assume this outcome produce more progressive results (absent revenue recycling), with lower-income households experiencing smaller impacts than higher-income households.", "The economic analyses appear to agree that the distributional effects among households (i.e., regressive vs. progressive) of a carbon tax program would be largely dependent on how the carbon tax revenues were used. A number of economic studies have used models to estimate the impacts of a carbon tax across households under several revenue distribution scenarios. The results vary because the studies use different modeling frameworks, carbon tax rates and scopes, underlying assumptions, and ways to measure impacts. ", "For example, a 2018 study assessed the impacts to household income for different household quintiles under a carbon tax of $50/mtCO 2 e, starting in 2020. This study examined four revenue distribution scenarios:", "1. reduce federal deficit, 2. reduce corporate income tax rate, 3. reduce payroll tax rate, and 4. provide a per-capita rebate to households.", "This report highlights this study, because it includes carbon tax revenue applications that have generated interest in recent years. In addition, this analysis was prepared after the 2017 tax rate changes in P.L. 115-97 .", " Figure 2 illustrates the modeled results, which the study measured as percentage reductions to household income. Thus, negative percentages illustrated in the figure are gains to household income. The per-capita rebate approach provides the most progressive result, yielding a net benefit for the bottom three household quintiles but a net loss for the top quintile. The fourth quintile impact is zero. By comparison, the other approaches produce varying degrees of regressive outcomes while providing a net gain for wealthier groups in two particular instances. Of the four options, the payroll tax rate reduction approach estimates the smallest variance between the income quintiles, ranging from a 0.5% loss for the lowest quintile to a 0.2% gain for the fourth quintile. The fifth quintile impact is zero.", "The relative ranking among options for progressivity is generally the opposite of the relative ranking for mitigating economy-wide impacts. Other economic analyses have found similar relative rankings of revenue recycling options. The contrasting rankings highlight a central tradeoff policymakers would face when deciding how to allocate carbon tax revenues. ", "Policymakers could allot some portion of the revenues to partially support both objectives. In a 2018 carbon tax study, economic modelers assessed a scenario in which a portion of the revenue was used to offset the welfare impacts for the lowest-income household quintile and the remaining revenue supported reductions in capital tax rates. The study's models estimated that a carbon tax's impacts on the lowest-income household quintile could be counteracted with approximately 10% of the revenue. This would allow for 90% of the revenue to be used to reduce capital tax rates and thus address the economy-wide impacts from the carbon tax."], "subsections": []}, {"section_title": "Industry Impacts and Transition Assistance", "paragraphs": ["As discussed above, a carbon tax is projected to disproportionately impact certain industries, particularly those that are described as \"emission-intensive, trade-exposed industries.\" To address these concerns, many of the recent carbon tax legislative proposals have included design mechanisms that would attach a carbon price to certain imported materials and products (see \" Border Carbon Adjustments \").", "Another approach to addressing the competitiveness concerns of domestic industries would involve distributing a portion of the carbon tax revenues to emission-intensive, trade-exposed industries as rebates based on their output. Output rebate proposals generally determine rebate amounts by measuring emissions intensity at the relevant sector level or by a benchmark that would encourage facilities to reduce their emissions intensity. These rebates could be phased out over time or continue until other nations adopt comparable carbon price policies. Under a carbon tax system in Canada, which is scheduled to take effect in 2019, industries will be subject to an \"output-based pricing system.\" Some contend that the data and administrative resources necessary to implement such a program would be substantial. ", "A carbon tax system is also expected to disproportionately impact fossil fuel industries and the communities that rely on their employment. In particular, coal-mining communities are expected to experience substantial impacts based on the coal production declines predicted in carbon tax analyses. For example, one model estimates that under a $50/mtCO 2 e carbon tax, annual U.S. coal production would decline by almost 80% in 2030 compared to a reference case. Policymakers may consider supporting worker transition or community transition assistance to help mitigate the economic impacts. Several of the recent carbon tax proposals would have devoted carbon tax revenues for this objective. "], "subsections": []}, {"section_title": "Other Policy Objectives", "paragraphs": ["Policymakers may also consider using the carbon tax revenues to provide funding to support a range of objectives, which may include policy goals that are not directly related to climate change. Some options are identified below, and many have been included in recent legislative proposals or in state GHG mitigation programs that raise revenues:", "Technology development and deployment: Efforts to reduce the costs of emission mitigation technologies\u2014particularly carbon capture, utilization, and sequestration\u2014are often considered in carbon tax programs, and Congress has funded such programs in other legislation. Energy efficiency programs: Although a carbon tax would likely stimulate energy efficiency to some degree, Congress may consider using the revenues to provide additional incentives and/or technical assistance, particularly to encourage households and small businesses to increase efficiency, which would also reduce the effects of the tax on their energy bills. States in the Regional Greenhouse Gas Initiative (RGGI) have used revenues from the program to support efficiency improvements, among other objectives. Biological sequestration: Trees, plants, and soils sequester carbon, removing it from the earth's atmosphere. Revenues could be used to promote carbon sequestration efforts, particularly forestry or agricultural activities, which would supplement the GHG reductions of the carbon tax. Adaptation to climate change: Regardless of emission reduction efforts taken today, climatic changes are expected due to the ongoing accumulation of GHGs in the atmosphere. Therefore, some advocate using revenues to reduce potential damage\u2014domestically and internationally\u2014of a changing climate. Deficit reduction: The possible contribution of a carbon tax to deficit reduction would depend on the magnitude and scope of the carbon tax, various market factors, and assumptions about the size of the deficit. Some carbon tax proposals in recent congressional sessions would have allotted a portion of revenues for deficit reduction. Infrastructure funding: Some recent proposals have provided funding for infrastructure projects. This objective could be combined with funding for adaptation activities. "], "subsections": []}]}, {"section_title": "Additional Considerations", "paragraphs": [], "subsections": [{"section_title": "Impacts on GHG Emission Levels", "paragraphs": ["Multiple economic studies have estimated the emission reductions that particular carbon tax designs could achieve. Economic models provide estimates based on the best information available at the time. Comparing results from different studies is problematic, because the studies' scenarios differ in multiple ways, including the tax rate, start date, scope of the program, assumptions about economic growth and technological advances, and assumptions about other federal and state policies and their effects.", "A 2018 study avoided some of these comparison difficulties by inviting modeling teams to analyze a coordinated set of scenarios. The 2018 Stanford Energy Modeling Forum study (\"EMF 32\") assembled 11 modeling teams to analyze the economic impacts of four carbon tax scenarios starting in 2020: a $25/metric ton and $50/metric ton carbon tax, increasing annually by 1% and 5%. Within each of these carbon price frameworks, the models ran separate revenue distribution scenarios: a reduction in labor tax rates, a reduction in capital tax rates, and household rebates. ", " Figure 3 illustrates the study's estimates of CO 2 emissions from fossil fuel combustion. The red lines in the figure display the average values for the 11 models. The shaded areas illustrate the range of results, highlighting the uncertainties in emission reduction estimates. Based on these results, the study authors concluded that each of the tax rate scenarios would likely achieve the U.S. CO 2 emission reduction targets under the Paris Agreement.", "As Figure 3 indicates, a carbon tax or emissions fee could be set with the expectation that it would achieve an emissions reduction target, but the resulting level of emissions would be uncertain. The uncertainty of resulting emissions may lead some stakeholders to disfavor a carbon tax or fee option to control GHG emissions. Although uncertain emissions are inherent with a carbon tax approach, Congress could employ certain design elements to enhance the emission control certainty. For example, the existing GHG emission reporting data could be used to track the impact and performance of a carbon price. If policymakers determine that emission reduction is not occurring at a desired pace, the price could be amended. Legislation could establish the conditions and process by which price changes could occur.", "Some may argue that adjusting the carbon price to reflect actual emissions performance would undermine the benefits of price certainty. Others may point out that unplanned adjustments to the carbon price could be politically unpalatable. For example, it may be difficult for policymakers to increase the tax rate, especially during periods of high energy prices. Some have suggested that Congress authorize an independent board or agency with the mandate to modify the tax rate administratively in order to meet pre-determined emission reduction objectives. Although this approach would likely improve emission certainty, long-term price certainty may be sacrificed to some degree, depending on the authority of the delegated entity to adjust the tax rate. ", "Some would argue that potential year-to-year emission variations under a carbon tax would not undermine efforts to control climate change so long as long-term emission goals are achieved. Indeed, they would assert that annual emission fluctuations are preferable to price volatility that could result from an emissions cap program. They support their preference for price control by suggesting that CO 2 generates damages through its overall accumulation as concentrations in the atmosphere, not its annual flow. ", "A potential concern of a carbon tax is whether it would be effective in reducing GHG emissions in all of its covered sectors, particularly emissions in the transportation sector. As of 2016, the transportation sector contributes the largest percentage (36%) of CO 2 emissions from fossil fuel combustion, with electric power second at 35%. Carbon tax analyses generally agree that the majority of the emission reductions resulting from a carbon tax program would occur in the electricity sector. By comparison, economic models generally conclude that a carbon tax would have much less of an impact on emissions in the transportation sector. Several factors explain this projected outcome. The transportation sector offers fewer opportunities to switch to less carbon-intensive fuels in the short term than does the electric power sector, which can displace coal with natural gas relatively quickly. In addition, short-term emission changes in the transportation sector are largely influenced by changes in driving demand, which has historically been relatively insensitive to gasoline price increases. ", "Based on these projected outcomes, some may contend that to achieve deeper, long-term reductions in total GHG emissions, policymakers would need to complement a carbon tax with other programs, such as vehicle technology standards (e.g., Corporate Average Fuel Economy, CAFE) or fuel performance standards, among other options. "], "subsections": []}, {"section_title": "Potential to Generate Revenues", "paragraphs": ["The quantity of revenues generated under a carbon tax system depend on the program's design features, namely the tax base and rate, as well as such independent factors as prices in global energy markets. They would also depend on how covered emission sources respond to the carbon price, for example by adopting alternative technologies or changing behavior. Several carbon tax studies have prepared revenue estimates, which are presented in Table 1 .", "From a public finance perspective, a carbon tax may not be a reliable source of long-term funding, because a primary goal of the carbon tax is to reduce its tax base\u2014GHG emissions. The estimates in Table 1 project carbon tax revenue values in 2020. Multiple studies have projected carbon tax revenue trajectories beyond 2020. In the 2018 EMF 32 study, all but one of eight models projected carbon tax revenue increases from 2020 through 2040. The carbon tax scenarios with larger annual rate increases resulted in steeper trajectories of increasing revenues through 2040. The models' estimates of annual carbon tax revenue in 2040 ranged from approximately $250 billion to $475 billion (under the tax rate scenario of $50/metric ton, increasing 5% annually). "], "subsections": []}, {"section_title": "Effects on Energy Prices and Energy Use", "paragraphs": ["Fossil fuels have a wide range of CO 2 emission intensity (i.e., emissions per unit of energy). As illustrated in Figure 4 , the CO 2 emission intensity of coal is approximately 30% more than oil and approximately 80% more than natural gas. These emissions intensity differences would lead to different tax rates per unit of energy across different fuels in a carbon tax regime.", "Carbon taxes could affect fuel prices in complex ways. The change in consumer fuel prices would likely not be the same as the price paid by the party directly subject to the tax. Actual price impacts for consumers would depend on multiple factors, including whether:", "a carbon tax is applied at the beginning of the production process (\"upstream\") to fossil fuels; and the price impacts are passed through to end users and not absorbed by upstream energy producers or midstream entities, such as retailers. ", "In addition, market participants such as electric power plant operators can avoid paying the increased costs by substituting fuels or technologies. Energy consumers may modify their behavior in the marketplace\u2014energy conservation, consuming less or different products and services\u2014to mitigate impacts from the increased prices.", " Table 2 includes estimates of price increases on coal, crude oil, natural gas, home heating oil, and motor gasoline based on a carbon tax rate of $25/mtCO 2 that applies CO 2 emissions from fossil fuel combustion. As indicated in the table, a carbon tax would have the greatest impact on the price of coal due to coal's relatively high CO 2 emissions intensity. By comparison, a carbon tax is expected to have less of an impact on the price of gasoline, increasing its price by 8%. ", "Economic models have projected how carbon prices would impact energy use, particularly the consumption of different fossil fuels and less carbon-intensive alternatives, such as renewables or nuclear power. For example, the 2018 EMF 32 study, which included results from 11 modeling groups, assessed how several carbon tax scenarios would impact energy consumption. Highlights of these models' results (compared to reference case scenarios) include the following:", "Coal consumption could decline by 40% to nearly 100% by 2030 under a $50/mtCO 2 carbon tax, though one model projected an increase in coal due to the model incorporating CCS technology. Natural gas consumption estimates vary across the models, with some showing minimal change in 2030 and others showing declines ranging between 40% and 60%. Oil consumption estimates indicate that the largest decline (approximately 4% by 2030) would occur under the $50/mtCO 2 carbon tax scenario. Wind energy consumption could increase by 48% to 300% by 2030 under a $50/mtCO 2 carbon tax scenario."], "subsections": []}]}, {"section_title": "Concluding Observations", "paragraphs": ["A carbon tax is one policy option to address U.S. GHG emission levels, which contribute to climate change and related impacts. Economic modeling indicates that a carbon tax would achieve emission reductions, the level of which would depend on which GHG emissions and sources are covered and the rate of the carbon tax.", "A carbon tax would generate a new revenue stream. The magnitude of the revenues would depend on the scope and rate of the tax and multiple market factors, which introduce uncertainty in the revenue projections. A 2018 CBO study estimated that a $25/metric ton tax on CO 2 emissions from energy-related activities and other selected GHG emission sources would yield approximately $100 billion in the first year of the program. To put this estimate in context, the CBO projected that total federal revenue would be $3.5 trillion in FY2019.", "Policymakers would face challenging decisions regarding the distribution of the new carbon tax revenues. Depending on the level of the tax, some economic analyses indicate that the distribution of tax revenue could yield greater economic impacts than the direct impacts of the tax. Some models indicate that the economic impacts are greatest in the early years of the carbon tax. ", "Policymakers could apply the tax revenues to support a range of policy objectives. When deciding how to allocate the revenues, policymakers would encounter trade-offs among objectives. The central trade-offs involve minimizing economy-wide costs, lessening the costs borne by specific groups\u2014particularly low-income households\u2014and supporting a range of specific policy objectives.", "A primary concern with a carbon tax is the potential economy-wide costs that may result. The potential costs would depend on a number of factors, including the magnitude, design, and use of revenues of the carbon tax. In general, economic literature finds that some of the modeled revenue applications would reduce the economy-wide costs imposed by a carbon tax but may not eliminate them entirely. ", "Policymakers and stakeholders may have different perspectives regarding whether these estimated economy-wide costs (typically measured in terms of GDP loss) represent a significant concern. Some argue that the estimated economy-wide costs should be compared with the policy option of not establishing a carbon tax. This comparison is uncertain as carbon tax analyses do not generally consider the benefits that would be gained by reducing GHG emissions and avoiding climate change and its adverse impacts.", "Some studies cite particular economic modeling scenarios in which a carbon tax and revenue recycling could produce a net increase in GDP or economic welfare, compared to a baseline scenario. These scenarios involve using carbon tax revenues to offset reductions in existing, distortionary taxes, such as corporate income or payroll taxes. Although the models indicate that these revenue applications would yield the greatest benefit to the economy overall, the models also find that lower-income households would likely face a disproportionate impact under such revenue applications. As lower-income households spend a greater proportion of their income on energy needs, these households are expected to experience disproportionate impacts from a carbon tax if revenues were not recycled back to them in some fashion, such as a lump-sum distribution. Carbon tax revenues that are used to offset the burden imposed on various sectors or specific population groups would not be available to support other objectives.", "An additional concern with a carbon tax involves potential disproportionate impacts to \"emission-intensive, trade-exposed industries.\" Policymakers could select among several options to address these concerns, either by establishing a border carbon adjustment program or allocating some of the carbon tax revenues to selected industry sectors based on an output-based metric. If other nations were to adopt comparable carbon price policies, this concern may be alleviated to some degree. ", "Relatedly, a carbon tax is projected to disproportionately impact fossil fuel industries, particularly coal, and the communities that rely on their employment. To alleviate these impacts, policymakers could allocate some of the carbon tax revenue to provide transition assistance to employees or affected communities."], "subsections": [{"section_title": "Appendix. Potential Applications of a Carbon Tax", "paragraphs": [" Table A-1 identifies sources of GHG emissions that account for 0.5% or more of total U.S. GHG emissions. The sources are listed in descending order by their percentage contribution. CO 2 emissions from fossil fuel combustion, which accounts for almost 76% of total U.S. GHG emissions, are broken down by fossil fuel type: petroleum, coal, and natural gas. ", "The table identifies potential points in the economy at which a carbon tax could be applied. The table lists the approximate number of entities that would be involved with different tax applications. The number of entities listed is current as of the most recent data available and varies accordingly by category. See table notes for details.", "The right-hand column of the table provides additional comments for some of the emission sources. In some cases the comments discuss potential opportunities for additional GHG emissions coverage at a particular source. In other cases, the comments address potential limitations of covering all of the emissions from a particular source."], "subsections": []}]}]}}
{"id": "R45630", "title": "Merit Systems Protection Board (MSPB): A Legal Overview", "released_date": "2019-03-25T00:00:00", "summary": ["The Merit Systems Protection Board (MSPB or Board) is a quasi-judicial independent agency in the executive branch charged with protecting federal employees against improper employment-related actions. The Board works to ensure, for example, that federal agencies avoid taking arbitrary action against employees, exhibiting favoritism, or engaging in reprisals against whistleblowers. The MSPB also aims to promote an effective federal workforce free of certain types of discrimination and other prohibited personnel practices. While the Board mainly carries out its mission through adjudication of federal employment-related disputes, it also performs specified oversight functions related to federal employment, including conducting special studies of the civil service and other executive branch merit systems.", "Established by the Civil Service Reform Act of 1978, the MSPB consists of three Board members, appointed by the President with the advice and consent of the Senate. Not more than two Board members may be adherents of the same political party. The term of office of each Board member is seven years, and terms are nonrenewable. Board members may be removed by the President only for inefficiency, neglect of duty, or malfeasance in office. The Board operates concurrently with the Office of Special Counsel, an independent, prosecutorial federal agency. The Special Counsel receives and investigates complaints related to certain kinds of federal agency misconduct and may petition the Board for corrective action.", "The MSPB operates like a tribunal and maintains procedures for conducting hearings, examining evidence, and rendering decisions. Most cases the Board reviews are federal employee appeals of adverse actions, including those related to removal or suspension of employment. When the MSPB determines that a federal employee has been subject to an improper adverse action, the Board can issue orders that compel agencies to reverse these actions and, depending upon the particular agency action in question, may order relief, including reinstatement, backpay, and attorney's fees.", "The Board also maintains original jurisdiction over certain types of cases in which it hears and decides the case initially rather than reviews an agency decision. For example, the MSPB may adjudicate cases brought by the Office of Special Counsel related to a prohibited personnel practice. The Special Counsel may, among other things, petition the Board for a stay of an adverse employment action in relation to this practice. Some of the Board's adjudicatory functions, including appeals of adverse action decisions, typically are carried out by \"administrative judges\" employed by the Board, while administrative law judges (ALJs) may examine matters coming under the Board's original jurisdiction.", "Federal employees or applicants for employment who are adversely affected by a final order or decision of the MSPB may obtain judicial review. The U.S. Court of Appeals for the Federal Circuit (Federal Circuit) is generally the proper judicial forum for these cases. Federal law compels the Federal Circuit to examine these cases under a standard of review that is deferential to the MSPB's determination. Consequently, the Federal Circuit typically upholds Board decisions. But a special jurisdictional rule exists for so-called \"mixed cases\" involving an alleged violation of federal antidiscrimination laws in connection with an improper adverse personnel action. Following the MSPB's decision in a mixed case, affected employees may seek judicial review in federal district court rather than the Federal Circuit. District court review is generally preferable for the petitioning federal employee, as district courts typically review these discrimination-related claims under a de novo standard (i.e., affording no deference to the determination of the MSPB).", "Since March 2019, the Board has lacked sitting members. Lack of a quorum prevents the Board from performing some of its review functions, including issuing final decisions in cases when an initial decision issued by an administrative judge has been appealed to the full Board. As a result, a significant case backlog has developed. President Trump has submitted nominees to the Senate to fill vacancies on the Board."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Merit Systems Protection Board (MSPB or Board) is a n independent , executive branch agency that works to protect current, former, and prospective federal employees against inappropriate employment-related actions, in accordance with \" merit system principles ,\" statutorily defined standards governing the performance and management of the federal workforce. The MSPB also aims to promote an effective federal workforce free of prohibited personnel practices. The Board mainly carries out its mission through adjudication of federal employee appeals of adverse actions . When the Board determines that a federal employee has been subject to an improper adverse action, it may order relief, including reins tatement, backpay, and attorney' s fees. The Board may also order federal agencies to comply with Board orders, conduct special studies of the civil service and other executive branch merit systems, and review Office of Personnel Management (OPM) rules and regulations to determine, for example, whether a federal agency has invalidly implemented the OPM requirements. This report focuses on the Board's adjudicatory authority.", "Federal law specifies that the Board consists of three members appointed by the President with the advice and consent of the Senate. However, as of March 2019, the Board lacks any sitting members. Although other MSPB employees, including administrative judges who issue initial decisions in cases, will continue their work, some Members of Congress and others have raised concerns about the extent to which these vacancies limit the agency's ability to perform its other functions.", "This report discusses the establishment of the MSPB and its structure, as well as the role of the Office of Special Counsel, an independent, prosecutorial agency that operates concurrently with the Board. The report then addresses the Board's authority to adjudicate matters within its jurisdiction and the scope of this jurisdiction, as well as the availability of judicial review for the Board's decisions. Finally, the report examines the effect of the lack of a quorum of Board members."], "subsections": []}, {"section_title": "Creation of the MSPB", "paragraphs": ["The origins of the MSPB may be traced back more than a century, as part of efforts to curtail the practice of political patronage in the federal government. Under the \"spoils system\" that existed in the first century of the Republic, \"federal employees came and went, depending upon party service and changing administrations, rather than meritorious performance.\" In response to the \"strong discontent with the corruption and inefficiency of the patronage system of public employment,\" Congress passed the Civil Service Act of 1883, also known as the Pendleton Act, which generally created a merit-based system for hiring federal employees. More specifically, the Act established a Civil Service Commission (CSC) authorized to aid the President in preparing suitable civil service rules for open, competitive examinations of applicants for federal employment. Over the next few decades, Congress enacted additional measures addressing issues such as merit hiring, due process rights, and appeals of agency adverse personnel actions, and the CSC played an increasingly larger role in implementing these requirements.", "Even so, some Members of Congress and others expressed concerns with the regulatory structure of the civil service system. One central criticism of this structure involved the CSC and its simultaneous handling of managerial and adjudicatory matters. A 1978 Senate committee report described the issue: ", "At the present time the Civil Service Commission has a variety of functions . . . The CSC must now simultaneously serve as a management agent for a President elected through a partisan political process as well as the protection of the merit system from partisan abuse. The Commission serves, too, as the provider of services to agency management in implementing personnel programs, while maintaining sufficient neutrality to adjudicate disputes between agency managers and their employees. As a result, the Commission's performance of its conflicting functions has suffered. Expected to be all things to all parties\u2014Presidential counsellor, merit \"watchdog,\" employee protector, and agency advisory\u2014the Commission has become progressively less credible in all of its roles.", "In response to these and other issues, Congress passed the Civil Service Reform Act (CSRA), the most comprehensive reform of the civil service system since the Pendleton Act and the current legal framework governing the federal civilian workforce. As part of this reform, and in conjunction with an earlier reorganization plan developed by President Carter, the CSRA split the functions of the Commission between two separate new agencies, OPM and the MSPB. In general, the CSRA charged OPM with conducting personnel management functions formerly performed by the CSC, such as providing training and productivity programs, examining for civil service positions, classifying positions, and administering pay and benefits. The MSPB retained the CSC's hearing, adjudication, and appeals functions, as well as authority to enforce agency compliance with its decisions. The CSRA further authorized the MSPB to develop its adjudicatory processes and procedures, and gave the Board power to, among other functions, issue subpoenas, call witnesses to testify at hearings, and enforce compliance with its final decisions."], "subsections": []}, {"section_title": "Board Composition and Terms of Office", "paragraphs": ["As noted above, the Board consists of three members\u2014a Chairman, a Vice Chairman, and a third member\u2014all appointed by the President with the advice and consent of the Senate. Not more than two members may be adherents of the same political party. In order to serve on the Board, members must have demonstrated ability, background, training, or experience that makes them \"especially qualified\" to carry out the MSPB's functions. The term of office of each Board member is seven years, and terms are nonrenewable. While a sitting member may not be reappointed after a seven-year term, a member may continue to serve on the Board for up to one additional year if no successor has been appointed. Board members also have for-cause removal protection and may be removed by the President only \"for inefficiency, neglect of duty, or malfeasance in office.\" ", "While the three Board members make decisions in all cases by majority vote, the Chairman of the Board is the chief executive and administrative officer, responsible for handling issues related to the Board's organization and personnel policies. The Vice Chairman is tasked with performing the Chairman's functions during absence, disability, or vacancy. During the absence or disability of both the Chairman and Vice Chairman or vacancies in both offices, the remaining Board member performs the Chairman's functions. Neither the CSRA nor the Board's regulations expressly address a scenario in which the Board is entirely vacant."], "subsections": []}, {"section_title": "Office of Special Counsel", "paragraphs": ["The Office of Special Counsel (OSC) in an independent federal agency that protects employees, former employees, and applicants for employment from prohibited personnel practices by receiving and investigating complaints of those practices. The OSC is headed by the Special Counsel, who is appointed by the President, by and with the advice and consent of the Senate, for a term of five years. After receiving and investigating allegations of prohibited personal practices, the Special Counsel may petition the MSPB for corrective action if an agency does not correct the practice, and may seek disciplinary action against any employee who has committed such a practice. The Special Counsel may also petition the Board to order a stay of any personnel action that he believes was taken or is to be taken as a result of a prohibited personnel practice. The Special Counsel position originally resided in the MSPB. In 1989, Congress established the OSC as an independent agency to be headed by the Special Counsel."], "subsections": []}, {"section_title": "Board Adjudication", "paragraphs": ["The MSPB hears and adjudicates matters within its jurisdiction, as provided by the CSRA and by any other statute, rule, or regulation. The Board maintains both original and appellate jurisdiction over cases. The Board has original jurisdiction over actions brought by the Special Counsel for corrective and disciplinary action, specified removals of persons in the Senior Executive Service (SES), and certain adverse personnel actions taken against administrative law judges (ALJs). In cases involving its original jurisdiction, the Board adjudicates the case initially rather than reviews an agency decision. The MSPB has appellate jurisdiction to review any action that is appealable to the Board under any statute, rule, or regulation by an employee or applicant for employment. For example, an agency's decision to remove or suspend an employee for more than 14 days may be appealed to the Board.", "Cases may be heard by Board members directly, or referred to ALJs or Board employees called \"administrative judges.\" ALJs typically adjudicate and issue initial decisions in cases involving corrective and disciplinary action. Administrative judges adjudicate cases and issue initial decisions under the Board's appellate jurisdiction. Once decided, an initial decision may be appealed to the full Board. While both ALJs and administrative judges are attorneys who are licensed to practice law, administrative judges do not enjoy the tenure and job protections of ALJs. An ALJ, for example, may only be removed for cause."], "subsections": [{"section_title": "Limits on Board Jurisdiction", "paragraphs": ["The MSPB's jurisdiction does not depend solely on the nature of the action taken, but also requires consideration of the party involved. For example, the Board's ability to hear and adjudicate appeals of agency-imposed adverse actions, such as removals, reductions in grade or pay, and suspensions for more than 14 days, has been limited by statute to actions involving only specified employees:", "individuals in the competitive service who are not serving a probationary or trial period or who have completed one year of current continuous service; preference eligibles in the excepted service who have completed one year of current continuous service in an executive agency, the Postal Service, or the Postal Rate Commission; and non-preference eligible individuals in the excepted service who are not serving a probationary or trial period or who have completed two years of current or continuous service in an executive agency.", "For other actions, however, the Board's ability to hear and adjudicate an appeal may be broader, involving individuals other than current employees. For example, the Board can review cases involving employees, former employees, and applicants for employment when a personnel action was allegedly taken as a reprisal for whistleblowing. ", "An employee in a collective bargaining unit that is represented by a union can generally appeal an agency's major disciplinary action, such as a removal or a reduction in grade or pay, to the MSPB or pursuant to a collective bargaining agreement's negotiated grievance procedure, but not both.", "The U.S. Supreme Court has also determined that the Board's jurisdiction over certain subject matters is constrained. For example, in Department of the Navy v. Egan , the Court concluded that the Board does not have jurisdiction to review the substance of a security clearance determination. The Court maintained that the Board may evaluate only: (1) whether an agency determined that an employee's position required a clearance; (2) whether the clearance was denied or revoked; and (3) whether the employee was provided procedural protections including notice of charges, an opportunity to respond to them, and representation by an attorney or other representative. In Kaplan v. Conyers , the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) interpreted the holding in Egan expansively. The court maintained that the MSPB not only lacks jurisdiction to review the substance of agency security clearance determinations, but also cannot review agency determinations regarding which employees are eligible to occupy sensitive positions."], "subsections": []}, {"section_title": "Original Jurisdiction", "paragraphs": [], "subsections": [{"section_title": "Corrective Action Cases", "paragraphs": ["The MSPB has original jurisdiction over cases brought by the Special Counsel to correct personnel actions involving a prohibited personnel practice. An employee, former employee, or applicant for employment, who believes that a prohibited personal practice has occurred, exists, or is to be taken, may seek corrective action from the OSC. If the Special Counsel believes that there are reasonable grounds to believe that a personnel action was taken or is to be taken as a result of a prohibited personnel practice, he may request a stay of the action from any Board member. A stay will be ordered unless the member determines that it would not be appropriate.", "If, following an investigation of the complaint, the Special Counsel determines that a prohibited personal practice has occurred, exists, or is to be taken, and corrective action is required, he or she will report that determination and any findings or recommendations to the MSPB, the agency involved, and OPM. If the agency does not correct the prohibited personnel practice, the Special Counsel may petition the Board for an order requiring the agency to do so. In general, the Board will order corrective action it considers appropriate so long as the Special Counsel has demonstrated that the prohibited personnel practice has occurred, exists, or is to be taken.", "In cases involving a personnel action taken against an employee for making a whistleblower disclosure or exercising a right granted by statute, rule, or regulation, the Board will order corrective action if the Special Counsel has demonstrated that the disclosure or activity was a contributing factor in the personnel action. However, in cases involving a whistleblower disclosure, corrective action may not be ordered if an agency demonstrates by clear and convincing evidence that it would have taken the same personnel action in the absence of the disclosure.", "A Board order to correct a prohibited personnel practice may require the reinstatement of the individual in the position that he would have occupied if the practice had not occurred, reimbursement for attorney's fees, back pay and related benefits, medical costs, travel expenses, other reasonable and foreseeable consequential damages, and any other compensatory damages.", "An employee, former employee, or applicant for employment who is adversely affected by the Board's final order or decision regarding corrective action may obtain judicial review."], "subsections": []}, {"section_title": "Disciplinary Action Cases", "paragraphs": ["The MSPB also has original jurisdiction over actions brought by the Special Counsel to discipline an employee for committing a prohibited personnel practice, violating the provisions of any statute, rule, or regulation, engaging in misconduct within the Special Counsel's jurisdiction, or knowingly and willfully refusing or failing to comply with a Board order. If the Special Counsel determines that disciplinary action should be taken, he is to prepare a written complaint against the employee that includes his determination and a statement of supporting facts. The complaint and statement are then presented to the employee and the MSPB.", "Upon receipt of a complaint, the employee is given an opportunity to provide an answer and to furnish affidavits and other documentary evidence in support of that answer. The employee is also entitled to be represented by an attorney or other representative, to a hearing before the MSPB or an ALJ designated by the Board, and to a written decision that includes a copy of any final order imposing disciplinary action.", "A final Board order may provide for an employee's removal, reduction in grade, debarment from federal employment for up to five years, suspension, or reprimand. The Board may also order a civil penalty not to exceed $1,000, or any combination of the aforementioned disciplinary actions. In general, an employee who is subject to a final order imposing disciplinary action may obtain judicial review of the order in the Federal Circuit."], "subsections": []}, {"section_title": "Informal Hearings for Career Senior Executives Removed from SES", "paragraphs": ["A career appointee who is removed from the SES for less than fully successful performance as a manager is entitled to an informal hearing before an ALJ designated by the MSPB. The appointee may appear and present arguments at such a hearing, but his removal will not be delayed as a result of the hearing. But the right to an informal hearing does not provide an appointee with a right to appeal a removal from the SES to the Board."], "subsections": []}, {"section_title": "Actions Against Administrative Law Judges", "paragraphs": ["The MSPB also has original jurisdiction over certain adverse actions taken against an ALJ, such as removals and reductions in grade or pay. An ALJ who faces such action has various rights, including the right to answer the agency's complaint and the right to be represented in an MSPB hearing on the record before a Board-designated ALJ. The ALJ who hears the case is to issue an initial decision, which may be reviewed by the Board.", "The MSPB is to uphold an agency-proposed disciplinary action against an ALJ only if it determines that an agency has established good cause. Good cause has been held to differ from the standard that the Board must find to sustain an adverse disciplinary action for misconduct involving most other employees. For employees who are neither ALJs nor members of the SES, the applicable standard is cause \"as will promote the efficiency of the service.\"", "An ALJ who is subject to a final Board decision authorizing a proposed agency action may obtain judicial review before the Federal Circuit."], "subsections": []}]}, {"section_title": "Appellate Jurisdiction", "paragraphs": ["A qualifying employee or applicant for employment may submit an appeal to the MSPB from any action that is appealable to the Board under any statute, rule, or regulation. For example, Section 7513(d) of title 5, U.S. Code, permits an employee who, because of misconduct, is subject to removal, suspension for more than 14 days, a reduction in grade or pay, or a furlough of 30 days or less to appeal his agency's action to the MSPB. This type of action is often referred to as a \"chapter 75 action.\" Under Section 4303(e) of title 5, U.S. Code, an employee who is removed or reduced in grade because of unacceptable performance may also appeal his agency's action to the MSPB. This type of action is often described as a \"chapter 43 action.\" An individual who appeals a personnel action to the Board is entitled to a hearing and legal or other representation.", "Once an appeal is filed, the case may be heard by the Board or it may be referred to an ALJ or administrative judge for hearing. An initial decision rendered by the Board, ALJ, or administrative judge generally becomes the Board's final decision, unless a party to the appeal or the Director of OPM files a petition for review within 30 days after receiving the decision, or the Board reopens and reconsiders the case on its own motion. One Board member may grant a petition for review or otherwise direct the full Board to review a decision unless an ALJ's decision is required to be acted upon by the Board.", "An agency's personnel action is to be sustained only if it is supported by substantial evidence in cases involving an employee's unacceptable performance, or by a preponderance of the evidence in all other cases, such as those involving misconduct. An agency's action may not be sustained if the appellant shows: (1) harmful error in the application of the agency's procedures in arriving at its decision; (2) that the decision was based on a prohibited personnel practice; or (3) that the decision was not in accordance with law.", "In general, an agency must establish three factors to withstand an individual's challenge of his adverse personnel action. First, the agency must prove, by a preponderance of the evidence, that the charged conduct occurred. Second, it must establish a nexus between that conduct and the efficiency of the civil service. Finally, the agency must demonstrate that the penalty imposed on the employee is reasonable.", "If a member of a collective bargaining unit exercises a right to appeal a personnel action under a negotiated grievance procedure rather than through the MSPB, an arbitrator must apply the same standards of proof\u2014substantial evidence for unacceptable performance actions and preponderance of the evidence for other personnel actions\u2014that the Board applies."], "subsections": []}, {"section_title": "Penalty Mitigation Authority", "paragraphs": ["Penalties imposed by an agency for actions involving misconduct may be mitigated by the MSPB. In Douglas v. Veterans Administration , the Board concluded that its statutory authority to take final action on matters within its jurisdiction includes the ability to modify or reduce a penalty imposed on an employee by his or her agency's adverse action. While the Board acknowledged that the management of the federal workforce and the maintenance of discipline among its members are not among its functions, it maintained that it did have the authority to mitigate a penalty when it determines that the penalty is clearly excessive, disproportionate to the sustained charges, or arbitrary, capricious, or unreasonable. Noting that this authority had previously been vested in the CSC and was not altered by the CSRA, the Board identified factors that are relevant for consideration when evaluating the appropriateness of a penalty. These factors include the nature and seriousness of the offense, and its relationship to the employee's duties, position, and responsibilities, and the employee's past disciplinary record. The Board indicated that an agency's selection of an appropriate penalty must involve a balancing of the relevant factors in an individual case.", "Penalties imposed by an agency for actions involving an employee's unacceptable performance under chapter 43 of title 5, U.S. Code, may not be mitigated by the MSPB. In Lisiecki v. MSPB , the Federal Circuit maintained that the CSRA's legislative history suggested that such actions should be distinguished from actions involving misconduct. The court explained that the legislative history \"repeatedly cautions that the old standards of review are not applicable under chapter 43 and . . . that the MSPB and the courts should 'give deference to the judgment by each agency of the employee's performance in light of the agency's assessment of its own personnel needs and standards.'\"", "The Federal Circuit noted that allowing the Board to mitigate penalties in chapter 43 actions would give the agency more authority than Congress intended. The court observed that chapter 43 prescribes certain standards that do not apply to actions involving misconduct, such as a lighter burden of proof to sustain agency action. If Congress intended \"more intrusive review of agency action\" by the Board, the court maintained, \"Congress knew what to say if such was its desire.\""], "subsections": []}, {"section_title": "Discrimination", "paragraphs": ["Cases involving an adverse personnel action and allegations of discrimination may be subject to review by both the MSPB and the Equal Employment Opportunity Commission (EEOC). When an employee or applicant for employment has been (1) affected by an agency personnel action that may be appealed to the MSPB and (2) believes that the basis for the action was discrimination prohibited by certain federal antidiscrimination provisions, he may appeal such action to the Board, which will decide both the discrimination issue and the appealable action. The Board's decision in a so-called \"mixed case\" may be appealed to the EEOC. However, if the individual does not seek review by the EEOC or if the agency decides not to review the Board's decision, that decision becomes judicially reviewable.", "An employee in a collective bargaining unit who alleges that he was affected by a prohibited personnel practice involving discrimination may raise the matter under a statutory procedure or a negotiated grievance procedure, but not both. An employee who selects a negotiated grievance procedure may request that MSPB review an arbitrator's final decision."], "subsections": []}]}, {"section_title": "Judicial Review", "paragraphs": ["Under 5 U.S.C. \u00a7 7703, federal employees or applicants for employment who are adversely affected by a final order or decision of the MSPB may obtain judicial review. This section also specifies the judicial forum for these decisions. In general, a petition for judicial review may be filed in the Federal Circuit within 60 days after the date the petitioner received notice of a Board final decision. The Federal Circuit must examine these cases under a standard of review that is deferential to the MSPB's determination. More specifically, the Federal Circuit is required to review the record in these cases and hold unlawful and set aside only any agency action, findings, or conclusions found to be:", "(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;", "(2) obtained without procedures required by statute, rule, or regulation having been followed; or", "(3) unsupported by substantial evidence.", "Under this standard of review, the Supreme Court has recognized that the Federal Circuit's ability to review the merits of MSPB decisions is \"extremely narrow.\" As the Court has further explained, in examining these MSPB decisions, \"it is not for the Federal Circuit to substitute its own judgment for that of the Board.\" Accordingly, the Federal Circuit typically upholds Board decisions. According to a 2019 MSPB report, over the past few years, the Federal Circuit has affirmed Board decisions in 93 to 96 percent of the cases it reviewed.", "Courts have also acknowledged that the CSRA, as amended, provides the Federal Circuit with exclusive jurisdiction over appeals of MSPB final decisions. However, one central exception to this exclusivity, found under 5 U.S.C. \u00a7 7702, is for so-called \"mixed cases\" involving allegations of federal antidiscrimination laws in connection with an improper adverse personnel action. Following the MSPB's decision in a mixed case, affected employees may seek judicial review in federal district court, rather than the Federal Circuit. District court review may be preferable for the petitioning federal employee, as district courts generally review these discrimination-related claims under a de novo standard (i.e., affording no deference to the determination of the MSPB). ", "While this special jurisdictional rule for mixed cases may appear straightforward, courts have grappled with its application in a variety of circumstances. Two recent Supreme Court decisions, Kloeckner v. Solis and Perry v. Merit Systems Protection Board , illustrate some of the issues that courts have confronted with respect to the judicial review of MSPB decisions involving mixed cases. The Court in Kloeckner considered the proper judicial forum when the Board dismisses a mixed case on procedural grounds. Although the Federal Circuit generally held that the appropriate forum for review was the district court if the MSPB dismissed a mixed case on the merits, other courts reached varying conclusions with respect to cases dismissed by the MSPB for procedural reasons. In Kloeckner , a former Labor Department employee filed a discrimination claim with the agency, and the employee was subsequently terminated from her position. The employee filed her case with the MSPB, but the Board dismissed her claim as untimely. In a unanimous opinion written by Justice Kagan, the Supreme Court examined the statutory language in 5 U.S.C. \u00a7 7702 and held that when the MSPB decides a mixed case, the proper forum for review is the district court, irrespective of whether the MSPB dismissed the case on the merits or procedural grounds.", "The Court in Perry also explored the judicial review of mixed case appeals, particularly in situations where the MSPB dismissed a case for lack of Board jurisdiction. Traditionally, lower courts had commonly held that the Federal Circuit, and not a district court, was the appropriate court to hear these types of cases. In Perry , a U.S. Census Bureau employee received notice that he would be removed from his position for poor attendance. After the employee and the agency reached a settlement involving suspension from service and early retirement, the employee appealed to the MSPB. The MSPB found that the employee's separation from service was voluntary, and, therefore, not an issue that the Board had jurisdiction to examine. The employee appealed the case to the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit), but the court transferred the case to the Federal Circuit. ", "In a 6-2 decision penned by Justice Ginsburg, the Supreme Court reversed the judgment of the D.C. Circuit. Similar to Kloeckner , the Court's opinion hinged on its interpretation of the statutory language in 5 U.S.C. \u00a7 7702, under which district court review of a mixed case applies only when an employee \"(A) has been affected by an action which the employee . . . may appeal to the [MSPB] and \"(B) alleges . . . discrimination.\" While the federal government had argued for purposes of this section that a case constitutes a mixed case only if the employee \"may appeal to the Board,\" the Court rejected this argument. Instead, the Court declared that under this language, what matters is not what the MSPB determined about its ability to hear an appeal, but rather \"the nature of an employee's claim that he had been \"'affected by an action [appealable] to the [MSPB]'\" (in this case, suspension and removal).", "The Court also relied on its decision in Kloe c kner and found that when it comes to mixed cases, there was nothing in the statutory language that demonstrated Congress's intent to treat jurisdictional dismissals differently from other types of MSPB dismissals. Accordingly, the Kloe c kner and Perry decisions both arguably demonstrate that despite MSPB's grounds for dismissing a mixed case, if an employee (or a former employee) \"complains of serious adverse action prompted . . . by the employing agency's violation of federal antidiscrimination laws,\" the appropriate forum for judicial review is the district court.", "In recent years, Congress has passed legislation that, for some types of cases, expressly extends judicial review of MSPB decisions beyond the Federal Circuit. The Department of Veterans Affairs Accountability and Whistleblower Protection Act of 2017 addressed MSPB appeal rights for Veterans Affairs Department employees who have been suspended, demoted, or removed from federal service for performance or misconduct. Among other things, the act specifies that employees may appeal a decision of the MSPB to the Federal Circuit or any court of appeals of competent jurisdiction. Additionally, in 2018, Congress passed the All Circuit Review Act, which extends judicial review of MSPB decisions in certain whistleblower and other retaliation cases not only to the Federal Circuit, but also to federal circuit court of appeals. This act is a permanent extension of the Whistleblower Protection Enhancement Act, as amended, which provided for this expanded jurisdiction for a period that terminated on November 26, 2017. According to the Office of Special Counsel, the new Act will, among other things, promote more \"robust implementation of whistleblower protection laws.\" The Special Counsel further maintained that given the number of district and appellate courts that will now be hearing these cases, \"[d]iffering interpretations may result in 'circuit splits,' which make it more likely that the U.S. Supreme Court will take up questions that arise regarding how these important laws are applied. This expanded judicial accountability is precisely the outcome Congress intended and will strengthen whistleblower protections.\""], "subsections": []}, {"section_title": "Effect of Absence of Quorum", "paragraphs": ["The MSPB currently has no sitting members. Board member Mark A. Robbins, who served most recently as the MSPB's Acting Chairman, ended his term on February 28, 2019. The Board has lacked a quorum since January 8, 2017, when former Board Chairman Susan Tsui Grundmann resigned. Prior to that time, there were only two members on the Board. MSPB regulations provide generally that its members will make decisions in all cases by majority vote. These regulations do allow for some decision making when a majority vote is not possible because of a vacancy or recusal, but such decisionmaking is available only when there are at least two members in office.", "Without a quorum, the Board is unable to issue final decisions in cases where an initial decision has been appealed. As of December 31, 2018, there were approximately 1,800 cases pending before the Board. The absence of a quorum also restricts the Board's ability to publish reports on merit system studies or promulgate new regulations in response to any legislative changes involving the MSPB.", "In 2018, President Trump nominated three individuals to serve as Chairman, Vice Chairman, and Board member. A confirmation hearing for these nominees was subsequently held, but the nominees were not confirmed by the Senate before the adjournment of the 115th Congress. On January 16, 2019, the President resubmitted the nominations for consideration by the 116th Congress. On February, 13 , 2019, the Senate Committee on Homeland Security and Governmental Affairs approved two of the nominees, but the President's nominee for Vice Chairman withdrew from consideration prior to the committee's vote. The committee's chairman has indicated that he will not advance the two nominees to the full Senate until the President nominates, and the committee supports, a third member."], "subsections": []}]}}
{"id": "R45635", "title": "Categories of Federal Civil Service Employment: A Snapshot", "released_date": "2019-03-26T00:00:00", "summary": ["According to the Office of Personnel Management (OPM), the federal workforce consists of an estimated two million civilian employees. Federal law categorizes these employees into three types of service\u2014the competitive service, the excepted service, and the Senior Executive Service (SES)\u2014that may be distinguished by different selection, compensation, and other standards. Title 5 of the U.S. Code (Title 5) contains most of the standards governing federal employment, and OPM is generally responsible for implementing these requirements.", "The competitive service largely consists of all civil service positions in the executive branch, other than (1) positions excepted from the competitive service by statute; (2) positions appointed by the President and confirmed by the Senate; and (3) the SES. Traditionally, OPM has administered examinations for entrance into the competitive service. These examinations are meant to be \"practical in character\" and relate to \"matters that fairly test the relative capacity and fitness of the applicants for the appointment sought.\" Title 5 also authorizes OPM to prescribe rules allowing agencies to hire candidates directly under specified circumstances.", "The excepted service includes designated civil service positions that are not in the competitive service or the SES and are not subject to competitive examination. OPM maintains authority to exempt a position from the competitive service when it determines that an appointment through competitive examination is not practicable, or the recruitment of students or recent graduates would be better achieved through alternate recruitment and assessment processes.", "The pay structure for the competitive service and the excepted service is similar. Both services are typically paid in accordance with the General Schedule, a schedule of annual basic pay rates that consists of 15 grades, designated \"GS-1\" through \"GS-15.\" This fixed pay scale is generally designed to reflect, among other things, equal pay for substantially equal work within a local pay area. Additionally, the competitive service and the excepted service generally have similar notice and appeal rights for adverse personnel actions. For example, before a removal, a suspension for more than 14 days, a reduction in grade or pay, or a furlough of 30 days or less, the agency must provide at least 30 days' advance written notice to the affected employee. The employee must also be given a reasonable time to respond to the notice and provide affidavits and other evidence to support the answer. Some adverse actions may also be appealed to the Merit Systems Protection Board (MSPB or Board), an independent, quasi-judicial agency that reviews and adjudicates specified personnel actions taken against qualifying federal employees.", "The SES is a corps of some 7,000 high-level government administrators who manage major programs and projects within most federal agencies. In these leadership roles, SES members may serve as a link between top-level political appointees of an agency and career civil servants within the agency. The SES is governed by a regulatory structure separate from the competitive and excepted services. While SES members are primarily career appointees chosen through a merit-based competitive hiring process, others are noncareer, limited term or limited emergency appointees (commonly political appointees) selected by agency leadership. To shield certain SES roles from political influence, some SES positions (career reserved positions) must be filled with career appointees, and Title 5 limits the number of noncareer and limited term appointees that may serve in SES positions.", "The SES pay structure is distinct from the rest of the civil service. Title 5 specifies that SES members are paid within a particular range based on an executive's individual performance or contribution to agency performance (or both), as measured under a performance appraisal system. In addition, Title 5 articulates special conditions and procedures for removing, suspending, or taking other adverse actions against a member of the SES. For example, career SES appointees who have successfully completed a one-year probationary period may be removed or subject to adverse action only for specified reasons, including misconduct and substandard performance. Career appointees must receive advance written notice of these actions, and an opportunity to appeal the action. In comparison, noncareer, limited term, and limited emergency appointees are generally not subject to the same protections and may be removed from the SES at any time."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The federal government is the nation's largest employer, with over two million workers employed in the United States, U.S. Territories, and foreign countries. A majority of these employees work in the competitive service of the executive branch. Applicants for competitive service positions compete with other applicants and are evaluated according to objective standards. The executive branch includes two other service classifications\u2014the excepted service and the Senior Executive Service (SES)\u2014with hiring and removal standards that diverge from those prescribed for the competitive service. Positions in the excepted service are specifically excepted from the competitive service by statute, by the President, or by the Office of Personnel Management (OPM). SES positions are also not in the competitive service. The SES includes senior managerial, supervisory, and policy positions that are subject to a different pay scale, as well as different hiring and removal standards. This report examines the three service classifications, and reviews some of the central features and notable differences among these classifications."], "subsections": []}, {"section_title": "Competitive Service", "paragraphs": ["The competitive service consists of all civil service positions in the executive branch, except the following:", "positions that are specifically excepted from the competitive service by or under statute; positions to which appointments are made by presidential nomination for confirmation by the Senate, unless the Senate otherwise directs; and positions in the SES. "], "subsections": [{"section_title": "Appointment Process", "paragraphs": ["The competitive service also includes non-executive branch positions and positions in the District of Columbia government that are specifically included in the competitive service by statute.", "OPM administers examinations for entrance into the competitive service. These examinations are meant to be \"practical in character\" and relate to \"matters that fairly test the relative capacity and fitness of the applicants for the appointment sought[.]\" OPM identifies the relative weights for the subjects in an examination, and assigns numerical ratings on a 100-point scale. Applicants who meet the minimum requirements for entrance to an examination, such as citizenship and residence requirements, and are rated 70 or more in the examination are eligible for appointment in the competitive service. These individuals are placed on registers or lists of eligibles. When an agency seeks to fill a competitive service position, it requests a certificate of eligibles from OPM. This certificate is to include enough names from the top of the relevant register to allow an agency appointing official to consider at least three individuals for every position to be filled.", "The competitive service includes several types of appointments. An individual selected for a continuing position is generally appointed as a career-conditional employee subject to an initial one-year probationary period. After three continuous years of service in a career-conditional appointment, an employee will be converted to a career appointment. A term appointment is a nonpermanent appointment for a period of more than one year, but less than four years. An agency may make a term appointment when the need for an employee's services is not permanent, but involves a special project, extraordinary workload, or reorganization. A temporary appointment is a time-limited appointment for a period not to exceed one year. An agency may make a temporary appointment to fill a short-term position or meet an employment need that is scheduled to end within a specified timeframe."], "subsections": []}, {"section_title": "Pay Structure", "paragraphs": ["Employees in the competitive service are generally paid in accordance with the General Schedule, a schedule of annual basic pay rates that consists of 15 grades, designated \"GS-1\" through \"GS-15.\" The grades include 10 steps that provide for increasing rates of pay. An employee who has not reached the maximum pay rate for his or her position is generally advanced to the next step at specified intervals. General Schedule salaries are based on the principles that there is equal pay for substantially equal work within a local pay area, that any pay distinctions are based on work and performance, that federal pay rates are comparable with non-federal pay rates for the same level of work, and that any pay disparities between federal and non-federal employees should be eliminated."], "subsections": []}, {"section_title": "Adverse Action Protections and Procedures", "paragraphs": ["Employees in the competitive service who are not serving a probationary or trial period, or have completed one year of current continuous service in a position other than a temporary appointment limited to one year or less, maintain specified notice and appeal rights for adverse personnel actions. Before an agency may suspend such a qualifying employee for 14 days or less, the employee must be given an advance written notice that identifies the specific reasons for the suspension. The employee must also be provided a reasonable time to answer the notice and furnish affidavits and other evidence to support the answer.", "Similar notice is required before an agency may subject a qualifying employee to other adverse personnel actions. Before a removal, a suspension for more than 14 days, a reduction in grade or pay, or a furlough of 30 days or less, the agency must provide at least 30 days' advance written notice to the employee. The employee must also be given a reasonable time to respond to the notice and provide affidavits and other evidence to support the answer. Unlike suspensions for 14 days or less, these adverse actions may be appealed to the Merit Systems Protection Board (MSPB or Board), an independent, quasi-judicial agency that reviews and adjudicates specified personnel actions taken against qualifying federal employees.", "In general, an agency must establish three factors to withstand an individual's challenge of his or her adverse personnel action. First, the agency must prove, by a preponderance of the evidence, that the charged conduct occurred. Second, it must establish a nexus between that conduct and the efficiency of the civil service. Finally, the agency must show that the penalty imposed on the employee is reasonable. An agency's action may not be sustained if the appellant shows: (1) harmful error in applying the agency's procedures in arriving at its decision; (2) that the decision was based on a prohibited personnel practice; or (3) that the decision was not in accordance with law."], "subsections": []}]}, {"section_title": "Excepted Service", "paragraphs": [], "subsections": [{"section_title": "Appointment Process", "paragraphs": ["About one-third of all federal workers are employed in the excepted service. The excepted service consists of those civil service positions that are not in the competitive service or the SES. Positions in the excepted service may be designated by statute or by OPM, and are not subject to competitive examination. OPM will exempt a position from the competitive service when it determines that an appointment through competitive examination is not practicable, or the recruitment of certain students or recent graduates would be better achieved through alternate recruitment and assessment processes. For example, OPM may determine that a position should be excepted from the competitive service because it is impracticable to examine the knowledge, skills, and abilities required for a position.", "Positions in the excepted service are categorized into four schedules. Schedule A includes positions that are not of a confidential or policy-determining character for which it is not practicable to examine applicants. Attorneys, chaplains, and short-term positions for which there is a critical hiring need are examples of schedule A positions.", "Schedule B also includes positions that are not of a confidential or policy-determining character for which it is not practicable to examine applicants. Unlike Schedule A positions, however, these positions require an applicant to satisfy basic qualification standards established by OPM for the relevant occupation and grade level. Individuals appointed to schedule B positions engage in a variety of activities, including policy analysis, teaching, and technical assistance.", "Positions in schedule C are policy-determining or involve a close and confidential working relationship with the head of an agency or other key appointed officials. These positions include most political appointees below the cabinet and subcabinet levels. An agency's senior advisor and special assistant positions are typically in schedule C.", "Finally, schedule D includes positions that are not of a confidential or policy-determining character for which competitive examination makes it difficult to recruit a sufficient number of certain students or recent graduates. Examples of schedule D positions include those involving science, technology, engineering, or mathematics (STEM) occupations and positions in the Presidential Management Fellows Program. Schedule D positions generally require an applicant to satisfy basic qualification standards established by OPM for the relevant occupation and grade level."], "subsections": []}, {"section_title": "Pay Structure", "paragraphs": ["Like employees in the competitive service, excepted service employees are generally paid in accordance with the General Schedule. "], "subsections": []}, {"section_title": "Adverse Action Protections and Procedures", "paragraphs": ["In addition, excepted service employees maintain the same notice and appeal rights for adverse personnel actions. Some employees in the excepted service, however, must satisfy different durational requirements before these rights become available. So-called \"preference eligibles\" in an executive agency, the Postal Service, or the Postal Rate Commission must complete one year of current continuous service to avail themselves of the relevant notice and appeal rights. The term \"preference eligible\" refers to specified military veterans and some of their family members, such as an unmarried widow, and the wife or husband of a service-connected disabled veteran. Employees in the excepted service who are not preference eligibles and (1) are not serving a probationary or trial period under an initial appointment pending conversion to the competitive service, or (2) have completed two years of current or continuous service in the same or similar position, have the same notice and appeal rights as qualifying employees in the competitive service."], "subsections": []}]}, {"section_title": "Senior Executive Service", "paragraphs": ["The SES is a cadre of high-level government administrators who manage major programs and projects within most federal agencies. While they are considered federal employees within the civil service system, the SES is governed by a regulatory structure separate from the competitive and excepted services. As defined in statute, SES positions are generally managerial or supervisory positions that are classified above the GS-15 grade (or certain equivalent positions) and need not be appointed by the President and confirmed by the Senate. In these leadership roles, SES members may serve as intermediaries between top-level political appointees of an agency who seek to carry out the objectives of a particular President and career civil servants with institutional experience relating to relevant issues. According to a 2018 report, there are currently more than 7,000 permanent SES positions."], "subsections": [{"section_title": "Positions and Appointment Process", "paragraphs": ["There are two types of SES positions: (1) career reserved and (2) general. Career reserved positions must be filled with career appointees to shield certain SES roles from political influence. Generally, agency heads are to determine whether a particular SES position warrants a career reserved designation, to \"ensure impartiality, or the public's confidence in the impartiality, of the Government.\" OPM regulations reflect the types of SES roles in which this designation is appropriate, including those involving adjudication and appeals, auditing, and law enforcement duties. General positions may be filled by career appointees, as well as other noncareer and limited term (i.e., political) appointees.", "There are four types of SES appointments: career, noncareer, limited term, and limited emergency appointees. The SES mainly consists of \"career appointees\" chosen through a merit-based competitive hiring process. As part of this process, each agency must maintain a recruitment program for career appointees, as well as at least one executive board that reviews qualifications and makes recommendations regarding SES candidates. An OPM-convened Qualification Review Board (QRB) must certify the executive and managerial qualifications of a selected candidate before a career appointment may be made to an SES position.", "Unlike career appointees, noncareer appointees are not subject to the competitive selection process, but agency heads must determine that these appointees meet the qualifications of the SES position. While noncareer appointees are not QRB-certified, OPM must approve these appointees. Limited term and limited emergency appointees make up a small subset of the SES, and their terms are non-renewable. These appointments are used when a position is needed for a specified period (such as to manage a special project), or a position is established to meet a \"bona fide, unanticipated, urgent need.\" Limited term and limited emergency appointments are also subject to OPM approval. To restrict the politicization of the SES, Title 5 of the U.S. Code (Title 5) limits the number of noncareer and limited term appointees who may serve in SES positions."], "subsections": []}, {"section_title": "Pay Structure and Performance Appraisal", "paragraphs": ["The SES pay structure is also distinct from the rest of the civil service. Title 5 specifies that the pay rate of each senior executive is based on the executive's individual performance or contribution to agency performance (or both), as measured under a \"rigorous\" performance appraisal system. Each federal agency must maintain at least one of these appraisal systems, subject to OPM standards, review, and approval. Performance appraisals of SES members may consider factors such as improvements in efficiency, productivity, and quality of work or service, cost efficiency, and performance timeliness. In response to earlier concerns that SES appraisal systems were flawed because most executives received the highest rating, Title 5 tasks OPM, in collaboration with the Office of Management and Budget, with the establishment and maintenance of a government-wide performance appraisal system certification process, in an effort to ensure that an agency's appraisal systems for SES employees make \"meaningful distinctions based on relative performance.\"", "Title 5 also sets out different pay rates for the SES, with a minimum rate of basic pay equal to 120 percent of the rate for GS-15, step 1, and a maximum rate of basic pay equal to the rate for Level III of the Executive Schedule. But SES members' annual aggregate pay (that includes additional compensation such as bonuses, awards, and other payments in addition to basic pay) is capped at the rate for Level I of the Executive Schedule. If a senior executive's total compensation exceeds the aggregate limitation, the executive receives the overage in the following calendar year. To encourage federal agencies to establish and maintain an OPM-certified performance appraisal system, Title 5 allows for a higher range of SES pay for agencies that have these certified systems."], "subsections": []}, {"section_title": "Adverse Action Protections and Procedures", "paragraphs": ["Title 5 also articulates conditions and procedures for removing, suspending, or taking other adverse actions against a member of the SES. Career SES appointees who have successfully completed a one-year probationary period may be removed or subject to adverse action only for specified reasons. For example, an SES career appointee may be removed from the civil service or suspended for more than 14 days only for misconduct, neglect of duty, malfeasance, or failure to accept a directed reassignment or to accompany a position in a transfer of function. SES members must receive advance written notice about the action and opportunity to provide an answer or receive hearing, subject to exception. The senior executive may also appeal the employment action to the MSPB.", "A career appointee receiving a single unsatisfactory performance rating may be reassigned or transferred within the SES or removed from the SES. A career SES member who receives two unsatisfactory ratings in any period of five consecutive years, or twice in any period of three consecutive years receives less than fully successful ratings, must be removed from the SES. Affected SES career appointees must receive advance written notice of these actions. While these appointees may not appeal these actions to the MSPB, they may request an informal hearing before the Board. SES career appointees are also generally entitled to be placed in a civil service position at GS-15 or above (or an equivalent position).", "In comparison, noncareer, limited term, and limited emergency appointees are generally not subject to the same removal protections and may be removed from the SES at any time. The procedures for removal of noncareer and limited term appointees are largely not addressed in federal statute, and the terms and procedures for their removal are mainly at the discretion of the agency head.", "In response to concerns about performance and accountability of SES members employed by the Department of Veterans Affairs (VA), Congress recently created special removal requirements that apply to these positions. In 2017, Congress passed the Department of Veterans Affairs Accountability and Whistleblower Protection Act, which amended an existing provision concerning removal procedures for these covered senior executives. Under the 2017 Act, the VA Secretary has discretion to suspend, demote, remove, or take other actions against SES career appointees or other high-level executives if the Secretary determines that the individual's misconduct or performance warrants such action. To address SES job performance issues more expeditiously, SES employees at the VA Department are entitled to abbreviated notice and appeals rights, as compared to the removal procedures in place in other federal agencies."], "subsections": []}]}]}}
{"id": "RL33446", "title": "Military Pay: Key Questions and Answers", "released_date": "2019-05-06T00:00:00", "summary": ["From the earliest days of the republic, the federal government has compensated members of the Armed Forces for their services. While the original pay structure was fairly simple, over time a more complex system of compensation has evolved. The current military compensation system includes cash payments such as basic pay, special and incentive pays, and various allowances. Servicemembers also receive noncash benefits such as health care and access to commissaries and recreational facilities, and may qualify for deferred compensation in the form of retired pay and other retirement benefits. This report provides an overview of military compensation generally, but focuses on cash compensation for current servicemembers.", "Since the advent of the all-volunteer force in 1973, Congress has used military compensation to improve recruiting, retention, and the overall quality of the force. Congressional interest in sustaining the all-volunteer force during a time of sustained combat operations led to substantial increases in compensation in the decade following the attacks of September 11, 2001. Subsequently, in the earlier part of the 2010s, concerns over government spending generated congressional and executive branch interest in slowing the rate of growth in military compensation. Initiatives to slow compensation growth included presidentially directed increases in basic pay below the rate of increase for the Employment Cost Index (ECI) for 2014-2016 and statutory authority for the Department of Defense (DOD) to reduce Basic Allowance for Housing (BAH) payments by 1% of the national average monthly housing cost per year from 2015 to 2019 (for a maximum reduction of 5% under the national monthly average housing cost).", "Some have raised concerns about the impact of personnel costs on the overall defense budget, arguing that they decrease the amount of funds available for modernizing equipment and sustaining readiness. Others argue that robust compensation is essential to maintaining a high-quality force that is vigorous, well-trained, experienced, and able to function effectively in austere and volatile environments. The availability of funding to prosecute contingency operations in Iraq and Afghanistan mitigated the pressure to trade off personnel, readiness, and equipment costs, but the current budgetary environment appears to have brought these trade-offs to the fore again.", "DOD spends about $100,000-$110,000 per year to compensate the average active duty servicemember\u2014to include cash, benefits, and contributions to retirement programs\u2014although some estimates of compensation costs are substantially higher. However, gross compensation figures do not tell the full story, as military compensation relative to civilian compensation is a key factor in an individual's decision to join or stay in the military. Thus, the issue of comparability between military and civilian pay is an often-discussed topic. Some analysts and advocacy groups have argued that a substantial \"pay gap\" has existed for decades\u2014with military personnel earning less than their civilian counterparts\u2014although they generally concede that this gap is fairly small today. Others argue that the methodology behind this \"pay gap\" is flawed and does not provide a suitable estimate of pay comparability. Still others believe that military personnel, in general, are better compensated than their civilian counterparts. The Department of Defense takes a different approach to pay comparability. The 9th Quadrennial Review of Military Compensation (QRMC), published in 2002, argued that compensation for servicemembers should be around the 70th percentile of wages for civilian employees with similar education and experience. According to the 11th QRMC, published in 2012, regular military compensation for officers was at the 83rd percentile of wages for civilian employees with similar education and experience, and at the 90th percentile for enlisted personnel. A 2018 RAND report concluded that these overall percentiles were nearly the same in 2016."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The military compensation system is complex and includes an array of cash compensation elements, noncash compensation (benefits), deferred compensation (retirement pay, Thrift Savings Plan, retiree health care, and other retirement benefits), and tax advantages. This report focuses primarily on the cash compensation provided to members of the active component Armed Forces. Other CRS reports cover military retirement and health care. ", "This report uses a question and answer format to highlight key aspects of the military compensation system and to address topics of recurring congressional interest, including the following:", "Compensation elements and rates. Statutory formulas for increasing compensation elements. Historical increases in basic pay. Comparability with civilian pay. Additional compensation for those serving in Iraq or Afghanistan."], "subsections": []}, {"section_title": "Key Questions and Answers", "paragraphs": [], "subsections": [{"section_title": "1. How Are Military Personnel Compensated?", "paragraphs": ["There are three main ways in which military personnel are compensated: cash compensation, noncash compensation, and deferred compensation. ", "Cash compensation takes a variety of forms and includes basic pay, housing and subsistence allowances, enlistment bonuses, skill proficiency pay, and additional pay for particularly demanding or dangerous duty. Non cash compensation includes various benefits such as medical and dental care, government-provided housing, educational benefits, space-available travel on military aircraft, and access to subsidized grocery stores (commissaries), retail stores (exchanges), and child care centers. The main elements of deferred compensation are retired pay and retiree health care, but commissary and exchange access, space-available travel, and other benefits are also part of this. Servicemembers may also participate in the Thrift Savings Plan (TSP), although until 2018 they generally did not receive matching contributions from the government. However, recent changes to the military retirement system made matching contributions to the Thrift Savings Plan a key component of many servicemembers' deferred compensation starting in 2018. ", "The basic compensation package provided to all servicemembers includes basic pay, a housing allowance (or government-provided housing), a subsistence allowance (or government-provided meals), free medical and dental care for servicemembers, free or low-cost medical and dental care for dependents, paid annual leave, and certain other benefits. Table 1 summarizes the main elements of compensation provided to all servicemembers. Servicemembers may also receive additional cash compensation based on their occupational specialty, duty assignment, and other factors."], "subsections": []}, {"section_title": "2. What Is Regular Military Compensation (RMC)? How Much Do Servicemembers Receive in RMC?", "paragraphs": ["When people talk about military pay, they are often only referring to basic pay . Although basic pay is usually the largest component of cash compensation that a servicemember receives, there are other types of military pay that increase it significantly. There are tax benefits as well. Regular Military Compensation is a statutorily defined measure of the cash or in-kind compensation elements that all servicemembers receive every payday. It is widely used as a basic measure of military cash compensation levels and for comparisons with civilian salary levels. "], "subsections": [{"section_title": "Regular Military Compensation (RMC)", "paragraphs": ["RMC, as defined in law, is \"the total of the following elements that a member of the uniformed services accrues or receives, directly or indirectly, in cash or in kind every payday: basic pay, basic allowance for housing, basic allowance for subsistence, and federal tax advantage accruing to the aforementioned allowances because they are not subject to federal income tax.\" Though military compensation is structured much differently than civilian compensation, making comparison difficult, RMC provides a more complete understanding of the cash compensation provided to all servicemembers. Therefore, it is usually preferred over simple basic pay when comparing military with civilian compensation, analyzing the standards of living of military personnel, or studying military compensation trends over time."], "subsections": [{"section_title": "Basic Pay", "paragraphs": ["For most servicemembers, basic pay is the largest element of the compensation they receive in their paycheck and typically accounts for about two-thirds of an individual's RMC. All members of the Armed Forces receive basic pay, although the amount varies by pay grade (rank) and years of service (also called longevity). Table 2 provides illustrative examples of basic pay rates."], "subsections": []}, {"section_title": "Housing", "paragraphs": ["All servicemembers are entitled to either government-provided housing or a housing allowance, known as basic allowance for housing (BAH) for those living within the United States or Overseas Housing Allowance (OHA) for those living outside of the United States. Roughly one-third of servicemembers receive government-provided housing (in the form of barracks, dormitories, ship berthing, or government-owned family housing), with the remainder receiving BAH or OHA to offset the costs of the housing they rent or purchase in the civilian economy or the privatized housing they rent on or near military bases. ", "The proportion of housing costs covered by housing allowances has varied over time. See the section entitled \" Basic Allowance for Housing: Increases Are Linked to Increases in Housing Costs \" later in this report for more information on this topic.", "The amount of BAH a servicemember receives is based on three factors: paygrade (rank), geographic location, and whether the servicemember has dependents. Paygrade and dependency status are used to determine the type of accommodation\u2014or \"housing profile\"\u2014that would be appropriate for the servicemember (for example, one-bedroom apartment, two-bedroom townhouse, or three-bedroom single family home). Geographic location is used to determine the median costs associated with each of these housing profiles. The median costs of these housing profiles are the basis for BAH rates, with some additional adjustments made on the basis of paygrade (that is, an E-7 without dependents will receive more than an E-6 without dependents, even though the appropriate housing profile for both of them is \"two bedroom apartment\"). As a result of this methodology, BAH rates are much higher in some areas than others, but servicemembers of similar paygrade and dependents status should be able to pay for roughly comparable housing regardless of their duty location. BAH rates are paid to the servicemember at the specified rate, regardless of the actual housing expenses incurred. Table 2 provides illustrative examples of how much BAH servicemembers receive annually. ", "OHA is also based on paygrade, geographic location, and whether the servicemember has dependents, but the manner in which it is calculated is significantly different than BAH. OHA is paid based on the servicemember's reported actual housing expenses, up to a maximum amount that varies by location, plus an allowance for utilities. The amount is reduced if the servicemember resides with one or more \"sharers.\" There is also a fixed one-time allowance to cover certain move-in expenses (such as real estate agents' fees, phone and utility connections, and security improvements). "], "subsections": []}, {"section_title": "Food", "paragraphs": ["Nearly all servicemembers receive a monthly payment to defray their personal food costs. This is known as basic allowance for subsistence (BAS). BAS is provided at a flat rate: In 2019, enlisted personnel receive $369.39 a month, while officers receive $254.39 a month. There have been calls in the past to merge BAS with basic pay to reduce the complexity of military compensation and the need for BAS computations each year."], "subsections": []}, {"section_title": "Federal Tax Advantage", "paragraphs": ["Certain types of military compensation are not subject to federal income tax, thus generating a tax benefit for servicemembers. The various types of military pay\u2014basic pay, special pay, and incentive pay\u2014are considered part of gross income and are usually subject to federal income tax. Military allowances, on the other hand, are generally not considered part of gross income and are not subject to federal income tax; nor are the various in-kind benefits of the military\u2014for example, government housing, health care, fitness centers, and subsidized grocery stores. , RMC considers only the federal income tax advantage provided by the exemption of BAH and BAS from gross income. The precise value of the federal tax advantage for an individual servicemember will vary depending on his or her unique tax situation."], "subsections": []}, {"section_title": "Compensation Elements Not Included in RMC", "paragraphs": ["RMC does not include the full array of compensation elements (e.g., special pays and bonuses, reimbursements, educational assistance, deferred compensation, or any estimate of the cash value of nonmonetary benefits such as health care, child care, recreational facilities, commissaries, and exchanges). As the value of these forms of compensation can be very substantial, RMC should not be considered a measure of total military compensation. "], "subsections": []}]}]}, {"section_title": "3. How Are Each Year's Increases in Basic Pay, BAH, and BAS Computed?", "paragraphs": ["Mentions of the \"military pay raise\" are almost always references to the annual increase in basic pay. The statutory formula for calculating each year's pay raise is discussed below, but b asic pay is only one element of RMC. BAH and BAS are also subject to periodic adjustment, although they typically do not receive as much attention as increases in basic pay. "], "subsections": [{"section_title": "Basic Pay: Increases Are Linked to Increases in the Employment Cost Index (ECI)", "paragraphs": ["Section 1009 of Title 37 provides a permanent formula for an automatic annual increase in basic pay that is indexed to the annual increase in the Employment Cost Index (ECI) for \"wages and salaries, private industry workers.\" For 2000-2006, the statute required the military raise to be equal to the ECI increase plus an additional one half percentage point (i.e., if the ECI annual increase were to be 3.0%, the military raise would be 3.5%). For 2007 and onward, the statute required the raise be equal to the ECI, although Congress continued to enact increases above the ECI through 2010. ", "Under subsection (e) of this statute, the President can specify an alternative pay adjustment that supersedes the automatic adjustment. President Obama invoked this option with regard to the 2014-2016 pay raises. Additionally, Congress can pass legislation to specify the annual pay raise which, if enacted, would supersede the automatic adjustment and/or any proposed presidential adjustment. The frequency of such congressional action is discussed below.", "The automatic adjustment under 37 U.S.C. 1009 is tied to the increase in the ECI from the third quarter of the third preceding year to the third quarter of the second preceding year. For example, in the 12-month period between the quarter which ended in September 2015 and the quarter which ended in September 2016, the ECI increased by 2.4%. Hence the pay raise for 2018, as calculated by the statutory formula, was 2.4%. An illustration of how the formula operates is provided in Figure 1 . This methodology results in a substantial lag between increases in the ECI and increases in basic pay; the lag appears to be related to the stages of the federal budget process. "], "subsections": [{"section_title": "Congress Has Frequently Waived the Automatic Adjustment and Specified the Amount of the Military Pay Raise, Although This Has Become Less Common In Recent Years", "paragraphs": ["Despite the statutory formula, which could operate each year without any further action, Congress has frequently waived the automatic adjustment and legislated particular percentage increases. For the pay raises effective in fiscal years 1981 and1982 and calendar years 1984-2010, 2013, and 2017-2018 Congress specified the increase that was to take effect in the annual defense authorization act. Congress specified no percentage increase for 1983, 2011, 2012, 2014-2016, or 2019, thereby allowing the statutory formula or the presidential alternative adjustment to go into effect. The statutory formula is important even when it does not go into effect, as it provides a benchmark around which alternatives are developed and debated."], "subsections": []}]}, {"section_title": "Basic Allowance for Housing: Increases Are Linked to Increases in Housing Costs", "paragraphs": ["Basic Allowance for Housing is paid to servicemembers living in the United States who do not choose or are not provided government quarters. By law, the Secretary of Defense sets the BAH rates for localities, known as military housing areas (MHAs), throughout the United States. However, the law requires the Secretary to set the rates \"based on the costs of adequate housing determined for the area\" and ties this determination to \"the costs of adequate housing for civilians with comparable income levels in the same area.\" As increases in BAH are tied to increases in local housing costs, they are not affected by the annual percentage increase in the ECI. Thus, the average increase in BAH almost always differs from the increase in basic pay. ", "To determine the cost of adequate housing, DOD conducts an annual survey of rental costs in each of the MHAs. DOD employs a contractor to collect rental costs for various types of housing, including apartments, townhouses, and single\u2010family units of varying bedroom sizes. Costs for utilities are also collected. DOD uses these annual surveys to determine how much housing costs have increased or decreased in each MHA. If costs in a given MHA increase, it adjusts BAH rates for that locality upward accordingly at the start of the next calendar year. If costs in a given MHA decrease, it adjusts the BAH rates downward. However, in the case of a downward adjustment, a \"save pay\" provision on the BAH statute prevents the decrease from applying to individuals currently assigned to that locality: \"So long as a member of a uniformed service retains uninterrupted eligibility to receive a basic allowance for housing within an area of the United States, the monthly amount of the allowance for the member may not be reduced as a result of changes in housing costs in the area or the promotion of the member.\" Thus, only personnel newly assigned to the area receive the lower payment. ", "Congress has periodically changed the law with regard to the proportion of housing costs covered by BAH or its predecessor, known as Basic Allowance for Quarters (BAQ) and Variable Housing Allowance (VHA). DOD estimated that BAQ+VHA covered about 80% of housing costs in 1996. In 1997, Congress replaced BAQ+VHA with BAH, and subsequently raised BAH rates so that they covered 100% of the cost of adequate housing by 2005.", "More recently, the FY2015 National Defense Authorization Act allowed the Secretary of Defense to reduce BAH payments by 1% of the national average monthly housing cost, and the FY2016 National Defense Authorization Act extended this authority, authorizing an additional 1% reduction per year through 2019 (for a maximum reduction of 5% under the national monthly average housing cost). DOD has indicated that a save pay provision, discussed above, will apply to these changes."], "subsections": []}, {"section_title": "Basic Allowance for Subsistence: Increases Are Linked to Increases in Food Costs", "paragraphs": ["BAS is paid at a uniform rate to all eligible enlisted personnel, and at a uniform but lower rate for all eligible officers. By law, BAS is adjusted each year according to a formula that is linked to changes in food prices. The increase is identical to \"the percentage increase in the monthly cost of a liberal food plan for a male in the United States who is between 20 and 50 years of age over the preceding fiscal year, as determined by the Secretary of Agriculture each October 1.\" "], "subsections": []}]}, {"section_title": "4. What Have Been the Annual Percentage Increases in Basic Pay Over the Past 20 Years? What Were Each Year's Major Executive and Legislative Branch Proposals and Actions on the Annual Percentage Increase in Military Basic Pay?", "paragraphs": ["The following subsections itemize action on the basic pay increase going back to 1997. Unless otherwise noted, all increases were proposed to be effective on January 1 of the year indicated in bold. The public law number for each year's National Defense Authorization Act is included at the end of each section below, even for those years in which there was no statutory language relevant to the pay raise.", "For a table that summarizes recent increases in basic pay, see CRS In Focus IF10260, Defense Primer: Military Pay Raise , by Lawrence Kapp. ", "2019 . Statutory Formula: 2.6 %. Administration request: 2.6 %. The House-passed version of the FY2019 National Defense Authorization Act (NDAA) contained no provision to specify the rate of increase in basic pay. Section 601 of the Senate-passed version of the FY2019 NDAA waived the automatic increase in basic pay under the statutory formula of 37 U.S.C. \u00a71009, and set the pay raise at 2.6%. The John S. McCain National Defense Authorization Act for FY 2019 ( P.L. 115-232 ) contained no provision relating to a general increase in basic pay, thereby leaving the automatic adjustment of 37 U.S.C. 1009 in place. Final increase: 2. 6 % across-the-board .", "2018. Statutory Formula: 2.4 %. Administration request: 2.1 %. Section 601 of the House-passed version of the FY2018 National Defense Authorization Act (NDAA) required the statutory formula increase (2.4%) to go into effect, \"notwithstanding any determination made by the President under subsection (e) of such section with respect to an alternative pay adjustment.... \" Section 601 of the Senate-passed version of the FY2018 NDAA waived the automatic increase in basic pay under the statutory formula of 37 U.S.C. \u00a71009, and set the pay raise at 2.1%. On August 31, 2017, President Trump sent a letter to congressional leaders invoking his authority under 37 U.S.C. 1009(e) to set the pay raise at 2.1%. However, Section 601 of the enacted version of the FY2018 NDAA ( P.L. 115-91 ) specified the statutory formula increase (2.4%) would go into effect, superseding the President's alternative adjustment. Therefore, basic pay for all servicemembers increased by 2.4% on January 1, 2018. Final increase : 2. 4 % across-the-board ( P.L. 115-91 ) .", "2017. Statutory Formula: 2.1 %. Administration request: 1 .6 %. Section 601 of the House version of the FY2017 NDAA ( H.R. 4909 ) required the statutory formula increase (2.1%) to go into effect, \"notwithstanding any determination made by the President under subsection (e) of such section with respect to an alternative pay adjustment.... \" Section 601 of the Senate version of the FY2017 NDAA ( S. 2943 ) waived the automatic increase in basic pay under the statutory formula of 37 U.S.C. \u00a71009, and set the pay raise at 1.6%. On August 31, 2016, the President sent a letter to congressional leaders invoking his authority under 37 U.S.C. 1009(e) to set the pay raise at 1.6%. However, Section 601 of the final version of the FY2017 NDAA set the pay raise at 2.1%, and President Obama signed this bill into law on December 23, 2016. This statutory adjustment supplanted the President's alternative pay adjustment. Therefore, basic pay for all servicemembers increased by 2.1% on January 1, 2017. Final increase : 2.1% across-the-board ( P.L. 114-328 ) .", "2016. Statutory Formula: 2.3 %. Administration request: 1 .3 %. The House version of the FY2016 NDAA ( H.R. 1735 ) contained no provision to specify the rate of increase in basic pay, although the report accompanying it stated that the committee supported a 2.3% increase. The Senate version ( H.R. 1735 ) contained a provision that waived the automatic adjustment of 37 U.S.C. \u00a71009 and set the pay increase at 1.3%, but excluded generals and admirals. On August 28, the President exercised his authority to specify an alternative adjustment, setting the increase at 1.3%. No general pay raise provision was included in the final version of the NDAA, thereby leaving in place the 1.3% increase specified by President Obama. However, Section 601 of the FY2016 NDAA prevented the pay increase from applying to generals and admirals. Final increase : 1.3% across-the-board, excluding generals and admirals ( P.L. 114-92 ).", "2015. Statutory Formula: 1.8 %. Administration request: 1 .0 %. The House version of the FY2015 NDAA contained no statutory provision to specify the rate of increase in basic pay, although the report accompanying it stated that the committee supported a 1.8% increase; it also included a provision to prevent general and flag officers from receiving any increase in basic pay in 2015. The Senate committee-reported version contained a provision waiving the automatic adjustment of 37 U.S.C. 1009 and setting the pay increase at 1.0% for servicemembers, but excluded generals and admirals. On August 29, President Obama sent a letter to Congress invoking 37 U.S.C. 1009(e) to set the pay raise for 2015 at 1.0%. No general pay raise provision was included in the final version of the NDAA, thereby leaving in place the 1.0% increase specified by President Obama. However, Section 601 of the FY2015 NDAA prevented the pay increase from applying to generals and admirals. Final increase : 1% across-the-board, excluding generals and admirals ( P.L. 113-291 ).", "2014. Statutory Formula: 1. 8 %. Administration request: 1. 0 %. The House version of the FY2014 NDAA contained no provision to specify the rate of increase in basic pay, while the Senate committee-reported bill specified an increase of 1.0%. On August 30, President Obama sent a letter to Congress invoking 37 U.S.C. 1009(e) to set the pay raise for 2014 at 1.0%. No provision was included in the final version of the NDAA, thereby leaving in place the 1.0% increase specified by the President. Final increase : 1% across-the-board ( P.L. 113-66 ).", "2013. Statutory Formula: 1. 7 %. Administration request: 1. 7 %. The House version of the FY2013 NDAA supported a 1.7% across-the-board pay raise. The Senate bill contained no statutory language. The final bill specified a 1.7% increase. Final increase : 1 .7 % across-the-board ( P.L. 112-239 ). ", "2012. Statutory Formula: 1.6%. Administration request: 1.6%. The House version of the FY2012 NDAA supported a 1.6% across-the-board pay raise, equal to the ECI. Both the Senate-reported bill and the final version were silent on the pay raise issue. As a result, the statutory formula became operative with an automatic January 1, 2012, across-the-board raise equal to 1.6%. Final increase : 1.6% across-the-board ( P.L. 112-81 ).", "2011. Statutory formula: 1.4%. Administration request : 1.4%. The House version of the FY2011 NDAA supported a 1.9% across-the-board pay raise, 0.5% above the ECI. Both the Senate-reported bill and the final bill were silent on the pay raise issue. As a result, the statutory formula became operative with an automatic across-the-board raise of 1.4%; equal to the ECI. Final increase : 1.4% across-the-board ( P.L. 111-383 ).", "2010. Statutory formula: 2.9%. Administration request: 2.9%. The FY2010 NDAA specified a 3.4% increase. Final increase : 3.4% across-the- board ( P.L. 111-84 ).", "2009. Statutory formula: 3.4%. Administration request: 3.4%. The FY2009 NDAA specified a 3.9% increase. Final increase : 3.9% across -the-board ( P.L. 110-417 ).", "2008. Statutory formula: 3.0%. Administration request: 3.0% across-the-board. The presidential veto of the initial FY2008 NDAA resulted in a 3.0% pay raise taking effect on January 1, 2008 (statutory formula). The final version of the NDAA, signed into law on January 28, specified that basic pay be increased by 3.5% retroactive to January 1. Final increase : 3.5 % across -the-board ( P.L. 110-181 ).", "2007. Statutory formula: 2.2%. The statutory formula for 2007 was based solely on the ECI and not a rate 0.5% higher than the ECI that had been specified for 2000-2006. Administration request: 2.2%. The NDAA specified a minimum 2.2% increase, with greater increases for certain pay cells. Final increase : 2.2% across-the- board but with an additional April 1, 2007 , targeted pay raise that would be as high as 8.3% for some warrant officers and range from 2.5 % for E-5s to 5.5 % for E-9s ( P.L. 109-364 ).", "2006. Statutory formula: 3.1%. Administration request: 3.1% across-the-board. The NDAA specified a 3.1% increase. Final increase : 3.1% across-the- board ( P.L. 109-163 ).", "2005. Statutory formula: 3.5%. Administration request: 3.5%. The NDAA specified a 3.5% increase. Final increase : 3.5% across-the-board ( P.L. 108-375 ).", "2004. Statutory formula: 3.7%. Administration request: Average 4.1%; minimum 2.0%; maximum of 6.5%. The NDAA specified a 3.7% minimum increase, with greater increases for certain pay cells. Final increase : 3.7% minimum, 4.15% average, 6.25% maximum for some senior NCOs ( P.L. 108-136 ).", "2003. Statutory formula: 4.1%. Administration request: minimum 4.1%; average 4.8%; between 5.0% and 6.5% for some mid-level and senior noncommissioned officers, warrant officers, and mid-level commissioned officers. The NDAA specified increases identical to the Administration request. Final increase: I dentical to the Administration request ( P.L. 107-314 ). ", "2002. Statutory formula: 4.6%. Administration request: numerous figures for the \"Administration request\" were mentioned in the pay raise debate, depending on when and which agency produced the figures. In general, however, they all proposed increases of at least 5% and no more than 15% (the latter applying only to a very few individuals), depending on pay grade and years of service; the average increase was 6.9%. The NDAA specified a 5% minimum increase, with greater increases for certain pay cells. Final increase: Between 5 and 10%, depending on pay grade and years of service ( P.L. 107-107 ). ", "2001. Statutory formula: 3.7%. Administration request : 3.7%. The FY2001 NDAA specified a 3.7% minimum increase of 3.7%, with greater increases for certain pay cells . The NDAA specified a 3.7% minimum increase, with greater increases for certain pay cells. Final increase: 3.7% across-the-board, effective January 1, 2001, plus additional raises of between 1.0 and 5.5% for mid -grade officer and enlisted personnel , to be effective July 1, 2001 ( P.L. 106-398 ).", "2000. Statutory formula: 4.8% (based on the change to the statutory formula; the original statutory formula would have led to a proposed raise of 3.8%). Administration request: 4.4% on January 1, 2000, plus increases averaging an additional 1.4% for mid-grade officer and enlisted personnel, effective July 1, 2000. The NDAA specified a 4.8% minimum increase, with greater increases for certain pay cells. Final increase: 4.8% on January 1, 2000, plus increases averaging an additional 1.4% for mid-grade officer and enlisted personnel, effective July 1, 2000 ( P.L. 106-65 ).", "1999. Statutory formula : 3.1%. Administration request : 3.6%. The House approved 3.6%, or whatever percentage increase was approved for federal GS civilians, whichever was higher. The Senate approved 3.6%. The final version accepted the House provision. Final increase : 3.6%, as GS civilians also received 3.6% ( P.L. 105-261 )."], "subsections": []}, {"section_title": "5. What Is an \"Adequate\" Level of Military Pay?", "paragraphs": ["Since the end of the draft in 1973, the \"adequacy\" of military pay has tended to become an issue for Congress if it appears that", "the military services are having trouble recruiting enough new personnel, or keeping sufficient career personnel, of requisite quality; or the standard of living of career personnel is perceived to be less fair or equitable than that of demographically comparable civilians (in terms of age, education, skills, responsibilities, and similar criteria).", "The first issue is an economic inevitability in some periods. In the absence of a draft, the services must compete in the labor market for new military personnel, and\u2014a fact often overlooked\u2014have always had to compete in the labor market to retain the more experienced individuals who make up the career force. When unemployment is low, employment opportunities in the civilian world abound and military recruiting is more difficult. When unemployment is high, military service becomes a more attractive alternative, and military recruiting is easier. ", "From 2010 to 2017, recruiting and retention in the Armed Forces were quite strong, hence weakening the case for compensation increases based on competition with the civilian economy and generating discussion of possible compensation cuts and/or restructuring. However, the strong recruiting and retention results in those years were due in part to a civilian economy still recovering from recession and to force reductions in the Air Force, Marine Corps, and Army, which generated lower recruiting and retention goals. Congress approved active duty end-strength increases for all four Services in FY2018. Subsequently, the Army did not meet its FY2018 recruiting goal and senior defense officials have testified that a strong economy has made it more challenging for them to recruit new personnel. If recruiting problems were to become more widespread, increased advocacy for compensation increases could well occur.", "The second situation is frequently stated in moral or ethical terms. Proponents of this viewpoint argue that, even if quantitative indexes of recruiting and retention appear to be satisfactory, the crucial character of the military's mission of national defense, and its acceptance of the professional ethic that places mission accomplishment above survival, demands certain enhanced levels of compensation. However, the compensation increases that occurred in the 2000s have led many analysts to conclude that military compensation is currently quite robust in comparison to civilian counterparts. "], "subsections": []}, {"section_title": "6. Is There a \"Pay Gap\" Between Military and Civilian Pay? Do Military Personnel Make More or Less Than Their Civilian Counterparts?", "paragraphs": ["The issue of a military-civilian \"pay gap\" raises several additional questions:", "How can the existence of a gap be determined and the gap be measured? Is there a gap and, if so, are civilians or military personnel being paid more? How much more? If there is a gap, does that in itself require action?", "A wide range of studies over the past several decades have attempted to compare military and civilian (both federal civil service and private sector) compensation. In general, the markedly different ways in which civilian public and private sector compensation and benefit systems are structured, compared to those of the Armed Forces, make it difficult to validate any generalizations about whether there is a \"gap\" between military and civilian pay."], "subsections": [{"section_title": "Measuring and Confirming a \"Gap\"", "paragraphs": ["It is difficult to find a common index or indicator to compare the dollar values of military and civilian compensation. First, military compensation includes numerous separate components, whose receiving population and taxability vary widely. Which of these, if any, should be included in a military-civilian pay comparison? Furthermore, total military compensation includes a wide range of noncash benefits\u2014health care, commissary access, recreational facilities\u2014as well as a unique deferred compensation package. Few civilians work in organizations where analogous benefits are provided. Attempts to facilitate a comparison by assigning a cash value to noncash benefits almost always founder on the large number of debatable assumptions that must be made to generate such an estimate.", "Second, it is also difficult to establish a comparison between military ranks and pay grades on the one hand and civilian jobs on the other. The range of knowledge, supervision, and professional judgment required of military personnel and civilians performing similar duties in a standard peacetime industrial or office milieu may be roughly equivalent. However, when the same military member's job in the field and in combat is concerned, comparisons become difficult.", "Third, generally speaking, the conditions of military service are frequently much more arduous than those of civilian employment, even in peacetime, for families as well as military personnel themselves. This aspect of military service is sometimes cited as a rationale for military compensation being at a higher level than it otherwise might be. On the other hand, the military services all mention travel and adventure in exotic places as a positive reason for enlistment and/or a military career, so it may be misleading to automatically assume that this is always a liability. Thus, it can be difficult to make direct comparisons between military and civilian occupations. As noted by the Congressional Budget Office:", "Comparing compensation in the military and civilian sectors can be problematic. One obvious limitation is that such comparisons cannot easily account for different job characteristics. Many military jobs are more hazardous, require frequent moves, and are less flexible than civilian jobs in the same field. Members of the armed forces are subject to military discipline, are considered to be on duty at all times, and are unable to resign, change jobs at will or negotiate pay. Military personnel also receive extensive training, paid for by the government. Family support programs are generally more available in the military compared with civilian employers. Intangible rewards, such as a shared sense of purpose, may be higher among military personnel as well. Quantifying those elements among military and civilian personnel is extremely difficult. ", "Fourth, differing methodologies for calculating compensation can yield different results. For example, comparing the percentage increase in pay over different time periods can produce widely varying rates of increase. Likewise, when indexes of compensation include different elements (for example, basic pay versus RMC), the results will typically diverge as well.", "Finally, the level of specificity used in a pay comparison can lead to differing results, especially when the comparison is between private sector and federal pay, both civil service and military. For instance, Army colonels may, according to some indexes, be paid roughly as much as federal civil service GS-15s, or as much as private sector managers with certain responsibilities. However, if the pay comparisons focus on those occupational specialties that are highly paid in the private sector\u2014health care, information technology, and some other scientific and engineering skills are examples\u2014the comparison may not be as favorable. Other common subcategories for comparison\u2014such as age, gender, years in the labor force, and educational levels\u2014can also produce differing results."], "subsections": []}, {"section_title": "Estimates of a Military-Civilian Pay Gap", "paragraphs": ["Various comparisons of military and civilian compensation exist which illustrate a gap that favors civilian pay levels, refute the existence of such a gap, or show that the pay gap favors the military. Some of these reports lack precision in identifying what aspects of military pay were compared with civilian pay, which indexes were used to make the comparison, or the length of time covered by the comparison. ", "One method of estimation, which indicates there is a pay gap in favor of civilians, asserts that rough pay parity existed between civilian and military personnel in 1982, but that increases since then in military basic pay have generally not kept up with increases in civilian pay (as measured by the ECI). As a result, a pay gap of about 13% in 1999 was gradually eliminated by 2011 due to above-ECI increases in basic pay. It reappeared in 2014 with military pay estimated to be 2.6% lower than civilian pay in 2018. ", "However, using the same starting date (1982) but considering RMC rather than just basic pay, the Congressional Budget Office (CBO) came to a much different conclusion in 2010. In congressional testimony, a CBO analyst answered the question \"Is there a 'gap' between civilian and military pay raises over the past few decades,\" as follows:", "The answer depends on how narrowly military cash pay is defined. One common method of comparison is to calculate the cumulative difference between increases in military and civilian pay using military basic pay, a narrow measure of cash compensation that does not include, for example, tax-free allowances for housing and food. Applying that method would indicate that cumulatively, civilian pay rose by about 2 percent more than military pay between 1982 and the beginning of 2010. But that measure does not encompass the full scope of military cash compensation. Using a broader measure that includes cash allowances for housing and food indicates that the cumulative increase in military compensation has exceeded the cumulative increase in private-sector wages and salaries by 11 percent since 1982. That comparison excludes the value of noncash and deferred benefits, which would probably add to the cumulative difference, because benefits such as military health care have expanded more rapidly than corresponding benefits in the private sector.", "Another approach to estimating a pay gap attempts to compare actual compensation levels of military personnel to civilians with similar education and experience, rather than comparing rates of compensation increase over time. For example, the 9 th Quadrennial Review of Military Compensation (QRMC), published in 2002, compared the RMC of junior enlisted personnel to the earnings of civilian high school graduates, middle grade NCOs with civilians with some college education, and senior enlisted personnel with civilians who are college graduates. It compared the RMC of officers to the earnings of civilians with bachelors or advanced degrees in professional or managerial occupations. Based on a separate body of research, it argued that \"pay at around the 70 th percentile of comparably educated civilians has been necessary to enable the military to recruit and retain the quantity and quality of personnel it requires\" and pointed out those groups of military personnel that fell short of this compensation goal. Congress approved several rounds of pay table reform to address situations where servicemembers fell below the 70% mark. Additionally, general increases in basic pay higher than the rate of increase in the ECI (2000-2010) and the elimination of \"out-of-pocket\" housing expenses by 2005 pushed servicemember RMC up substantially in relation to civilian compensation. According to the 11 th QRMC, by 2009 military compensation had substantially exceeded this goal: ", "In 2009, average RMC for enlisted members exceeded the median wage for civilians in each relevant comparison group\u2014those with a high school diploma, those with some college, and those with an associate's degree. Average RMC for the enlisted force corresponded to the 90 th percentile of wages for civilians from the combined comparison groups. For officers, average RMC exceeded wages for civilians with a bachelor's or graduate-level degree. Average RMC for the officer force corresponded to the 83 rd percentile of wages for the combined civilian comparison groups.", "Since that time, Congress and the executive branch have made efforts to slow the growth of military compensation. Recent initiatives have included presidentially directed increases in basic pay below the ECI for 2014-2016 and statutory authority for DOD to reduce BAH payments by 1% of the national average monthly housing cost per year from 2015 to 2019 (for a maximum reduction of 5% of the national monthly average housing cost). ", "In 2018, RAND published a report that compared RMC in 2016 to civilian pay levels, and compared those results to those generated by the 11 th QRMC in 2009. Using a similar, though not identical, methodology the RAND report found that RMC had remained well above the 70 th percentile of comparability educated civilians:", "The 11 th QRMC, using 2009 data, placed RMC at the 90 th percentile of civilian pay for enlisted and the 83 rd for officers. Our percentiles for 2016\u2014the 84 th for enlisted and 77 th for officers\u2014are somewhat lower than those of the 11 th QRMC. Although the estimates differ, both estimates show relatively high percentiles, yet methodological differences contribute to the discrepancy.", "Taking into account the somewhat different methodology used by RAND in 2018, its authors conclude \"overall RMC percentiles for 2016 for enlisted personnel and officers were virtually the same as for 2009.\""], "subsections": []}, {"section_title": "If There Is a Pay Gap, Does It Matter?", "paragraphs": ["Some have suggested that the emphasis on a pay gap, whether real or not, is an inappropriate guide to arriving at sound policy. They argue that the key issue is, or should be, not comparability of military and civilian compensation, but the competitiveness of the former. Absent a draft, the Armed Forces must compete in the labor market for new enlisted and officer personnel. The career force by definition has always been a \"volunteer force,\" and thus has always had to compete with civilian opportunities, real or perceived. Given these facts, some ask what difference it makes whether military pay is much lower, the same, or higher than that of civilians? If the services are having recruiting difficulties, then pay increases might be appropriate, even if the existing \"gap\" favors the military. Conversely, if military compensation is lower than equivalent civilian pay, and if the services are doing well in recruiting and retaining sufficient numbers of qualified personnel, then there might be no reason to raise military pay.", "The 11 th QRMC voiced similar sentiments when it argued the following: ", "A comparison between military and civilian wages does not, by itself, determine if military pay is at the optimal level. As previously noted, other factors are also at play including: recruiting and retention experiences and outlook; unemployment in the civilian economy; political factors, such as a wartime environment or risk of war; and the expected frequency and duration of overseas deployments. But the relative standing of military compensation provides context to help make decisions about RMC and other elements of the compensation system, such as those studied by the QRMC."], "subsections": []}]}, {"section_title": "7. What Additional Benefits Are Available for Military Personnel Serving in Iraq and Afghanistan?", "paragraphs": ["Members of the Armed Forces serving in Iraq or Afghanistan are entitled to various additional forms of compensation, described below. Those serving in nearby countries are often eligible as well. "], "subsections": [{"section_title": "Hostile Fire/Imminent Danger Pay", "paragraphs": ["Military personnel serving in Iraq or Afghanistan are eligible for Hostile Fire Pay (HFP) or Imminent Danger Pay (IDP). HFP is paid at the rate of $225 per month; IDP is paid at an equivalent rate, but on a daily basis ($7.50 per day). The purpose of this pay is to compensate servicemembers for physical danger. An individual can collect either Hostile Fire Pay or Imminent Danger Pay, not both simultaneously. Iraq and Afghanistan are designated imminent danger locations; any servicemember in these locations is entitled to IDP by virtue of their presence. Certain areas surrounding these countries were formerly designated as imminent danger locations, but DOD revoked this designation in 2014. For a list of all imminent danger locations, see the DOD Financial Management Regulations."], "subsections": []}, {"section_title": "Hardship Duty Pay", "paragraphs": ["Military personnel serving for over 30 days in Iraq, Afghanistan, and certain surrounding countries are eligible for Hardship Duty Pay (HDP). HDP is compensation for the exceptional demands of certain duty. In the case of Iraq and Afghanistan, it is compensation for the austere living conditions of the location. The rate for HDP in Iraq and Afghanistan is $100 per month."], "subsections": []}, {"section_title": "Family Separation Allowance", "paragraphs": ["Military personnel serving in Iraq, Afghanistan, and surrounding areas may be eligible for Family Separation Allowance (FSA). FSA provides a special pay for those servicemembers with dependents who are separated from their families for more than 30 days. The purpose of this pay is to \"partially reimburse, on average, members of the uniformed services involuntarily separated from their dependents for the reasonable amount of extra expenses that result from such separation, and to reimburse members who must maintain a home in the United States for their dependents and another home overseas for themselves for the average expenses of maintaining the overseas home.\" To be eligible for this allowance, U.S. military personnel must be separated from their dependents for 30 continuous days or more; but once the 30-day threshold has been reached, the allowance is applied retroactively to the first day of separation. The authorizing statute for FSA sets the rate at $250 per month. "], "subsections": []}, {"section_title": "Per Diem for Incidental Expenses", "paragraphs": ["Military personnel using military facilities and serving in Iraq and Afghanistan receive per diem equivalent to $105 per month to cover incidental expenses. The rate is the same for all personnel."], "subsections": []}, {"section_title": "Combat Zone Tax Exclusion", "paragraphs": ["One of the more generous benefits for many of those serving in Iraq or Afghanistan, and certain surrounding areas, is the \"combat zone tax exclusion.\" Military personnel serving in direct support of operations in these combat zones are also eligible for the combat zone tax exclusion, as are those \"hospitalized as a result of wounds, disease, or injury incurred while serving in a combat zone.\" For enlisted personnel and warrant officers, this means that all compensation for active military service in a combat zone is free of federal income tax. For commissioned officers, their compensation is free of federal income tax up to the maximum amount of enlisted basic pay plus any imminent danger pay received. While this benefit applies only to federal income tax, almost all states have provisions extending the benefit to their state income tax as well.", "In addition, military personnel who qualify for a reenlistment or retention bonus while stationed in a combat zone do not have to pay federal income tax on the bonus (though commissioned officers are still subject to the cap mentioned above). The amounts involved can be substantial, often in the tens of thousands of dollars, and occasionally over $100,000."], "subsections": []}, {"section_title": "Savings Deposit Program", "paragraphs": ["Another benefit available to those deployed to a combat zone is eligibility for the Savings Deposit Program. This program allows servicemembers to earn a guaranteed rate of 10% interest on deposits of up to $10,000, which must have been earned in the designated areas. The deposit is normally returned to the servicemember, with interest, within 90 days after he or she leaves the eligible region, although earlier withdrawals can sometimes be made for emergency reasons."], "subsections": []}]}, {"section_title": "8. What Benefits Are Available to the Survivors of Military Personnel Killed in Iraq or Afghanistan?", "paragraphs": ["Currently, the survivors (typically, spouses and children) of military personnel who die on active duty, whether serving in combat zones or not, are eligible for a number of monetary and other benefits. These generally include the following:", "A death gratuity of $100,000, payable within a few days of the death to assist families in dealing with immediate expenses. Servicemembers' Group Life Insurance (SGLI) of up to $400,000. Disbursement of unpaid pay and allowances. One year of government housing or BAH. Three years of TRICARE coverage at the active duty dependent rate, followed by coverage at the retiree dependent rate (children remain covered as active duty family members until age 21, or until age 23 if enrolled in school full-time). Commissary and Exchange access. Burial expenses. One or more survivor benefit annuities (Social Security Survivor Benefits, DOD Survivor Benefit Plan , and/or Veterans Affairs Dependency and Indemnity Compensation; receipt of more than one annuity may require offsets between the annuities).", "Note, however, that each type of benefit described above has its own eligibility criteria. Survivors may, or may not, qualify for a given benefit based on their unique circumstances. For more detailed information on who qualifies for a given benefit, see the Department of Defense's A Survivor's Guide to Benefits ."], "subsections": []}]}]}}
{"id": "RL33003", "title": "Egypt: Background and U.S. Relations", "released_date": "2019-03-12T00:00:00", "summary": ["Historically, Egypt has been an important country for U.S. national security interests based on its geography, demography, and diplomatic posture. Egypt controls the Suez Canal, which is one of the world's most well-known maritime chokepoints, linking the Mediterranean and Red Seas. Egypt, with its population of more than 100 million people, is by far the most populous Arabic-speaking country. Although it may not play the same type of leading political or military role in the Arab world as it has in the past, Egypt may retain some \"soft power\" by virtue of its history, media, and culture. Cairo plays host both to the 22-member Arab League and Al Azhar University, which claims to be the oldest continuously operating university in the world and has symbolic importance as a leading source of Islamic scholarship.", "Additionally, Egypt's 1979 peace treaty with Israel remains one of the most significant diplomatic achievements for the promotion of Arab-Israeli peace. While people-to-people relations remain cold, the Israeli and Egyptian governments have increased their cooperation against Islamist militants and instability in the Sinai Peninsula and Gaza Strip.", "Personnel moves and possible amendments to the Egyptian constitution highlight apparent efforts by President Sisi to consolidate power with the help of political allies, including colleagues from Egypt's security establishment. President Sisi has come under repeated international criticism for an ongoing government crackdown against various forms of political dissent and freedom of expression. The Egyptian government has defended its human rights record, asserting that the country is under pressure from terrorist groups seeking to destabilize Arab nation-states.", "The Trump Administration has tried to normalize ties with the Sisi government that were generally perceived as strained under President Obama. In January 2019, U.S. Secretary of State Michael Pompeo delivered a major policy speech at the American University in Cairo, where he stated, \"And as we seek an even stronger partnership with Egypt, we encourage President Sisi to unleash the creative energy of Egypt's people, unfetter the economy, and promote a free and open exchange of ideas.\"", "The United States has provided significant military and economic assistance to Egypt since the late 1970s. Successive U.S. Administrations have justified aid to Egypt as an investment in regional stability, built primarily on long-running cooperation with the Egyptian military and on sustaining the 1979 Egyptian-Israeli peace treaty.", "All U.S. foreign aid to Egypt (or any recipient) is appropriated and authorized by Congress. Since 1946, the United States has provided Egypt with over $83 billion in bilateral foreign aid (calculated in historical dollars\u2014not adjusted for inflation). Annual appropriations legislation includes several conditions governing the release of these funds. All U.S. military aid to Egypt finances the procurement of weapons systems and services from U.S. defense contractors.", "For FY2019, Congress has appropriated $1.4 billion in total bilateral assistance for Egypt, the same amount it provided in FY2018. For FY2020, the President is requesting a total of $1.382 billion in bilateral assistance for Egypt. Nearly all of the U.S. funds for Egypt come from the FMF account (military aid). In November 2018, the U.S. Defense Department notified Congress of a major $1 billion sale of defense equipment to Egypt, consisting of 10 AH-64E Apache Attack Helicopters, among other things.", "Beyond the United States, President Sisi has broadened Egypt's international base of support to include several key partners, including the Arab Gulf states, Israel, Russia, and France. In the last five years, as French-Egyptian ties have improved, Egypt has purchased major air and naval defense systems from French defense companies."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Historical Background", "paragraphs": ["Since 1952, when a cabal of Egyptian Army officers, known as the Free Officers Movement, ousted the British-backed king, Egypt's military has produced four presidents; Gamal Abdel Nasser (1954-1970), Anwar Sadat (1970-1981), Hosni Mubarak (1981-2011), and Abdel Fattah el Sisi (2013-present). In general, these four men have ruled Egypt with strong backing from the country's security establishment. The only significant and abiding opposition has come from the Egyptian Muslim Brotherhood, an organization that has opposed single party military-backed rule and advocated for a state governed by a vaguely articulated combination of civil and Shariah (Islamic) law.", "Egypt's sole departure from this general formula took place between 2011 and 2013, after popular demonstrations sparked by the \"Arab Spring,\" which had started in neighboring Tunisia, compelled the military to force the resignation of former President Hosni Mubarak in February 2011. During this period, Egypt experienced tremendous political tumult, culminating in the one-year presidency of the Muslim Brotherhood's Muhammad Morsi. When Morsi took office on June 30, 2012, after winning Egypt's first truly competitive presidential election, his ascension to the presidency was supposed to mark the end of a rocky 16-month transition period. Proposed time lines for elections, the constitutional drafting process, and the military's relinquishing of power to a civilian government had been constantly changed, contested, and sometimes even overruled by the courts. Instead of consolidating democratic or civilian rule, Morsi's rule exposed the deep divisions in Egyptian politics, pitting a broad cross-section of Egypt's public and private sectors, the Coptic Church, and the military against the Brotherhood and its Islamist supporters. ", "The atmosphere of mutual distrust, political gridlock, and public dissatisfaction that permeated Morsi's presidency provided Egypt's military, led by then-Defense Minister Sisi, with an opportunity to reassert political control. On July 3, 2013, following several days of mass demonstrations against Morsi's rule, the military unilaterally dissolved Morsi's government, suspended the constitution that had been passed during his rule, and installed an interim president. The Muslim Brotherhood and its supporters declared the military's actions a coup d'etat and protested in the streets. Weeks later, Egypt's military and national police launched a violent crackdown against the Muslim Brotherhood, resulting in police and army soldiers firing live ammunition against demonstrators encamped in several public squares and the killing of at least 1,150 demonstrators. The Egyptian military justified these actions by decrying the encampments as a threat to national security."], "subsections": []}, {"section_title": "Overview", "paragraphs": ["As Egyptian President Abdel Fattah al Sisi consolidates his power amid a continuing macroeconomic recovery, Egypt is poised to play an increasingly active role in the region, albeit from a more independent position vis-a-vis the United States than in the past. Although Egyptian relations with the Trump Administration are solid, and Egypt has relied on the International Monetary Fund (IMF) program to guide its economic recovery, Egypt seems committed to broadening its international base of support. The United States plays a key role in that international base, but Egypt also has other significant partners, including the Arab Gulf states, Israel, Russia, and France. The Egyptian government blames American criticism of its human rights record for preventing closer U.S.-Egyptian ties. From the U.S. perspective, some Members of Congress, U.S. media outlets, and advocacy groups document how Egyptian authorities have widened the scope of a crackdown against dissent, which initially was aimed at the Muslim Brotherhood but has evolved to encompass a broader range of political speech.", "Egypt's parliament is currently considering whether to adopt a package of draft constitutional amendments that would extend presidential term limits and executive branch control over the judiciary. If Egypt's 2019 constitutional amendments are approved, President Sisi will attain unprecedented power in the political system over the military and the judiciary and, if reelected, will have the potential to remain in office until 2034. He has inserted his older brother and oldest son into key security and intelligence positions while stymying all opposition to his rule and criticism of his government. ", "This consolidation of power and crackdown against dissent has taken place during a period of steady economic growth, which has not benefitted wide swaths of the population. The state has enacted a series of austerity measures to reduce debt in compliance with IMF-mandated reforms. In the year ahead, economists anticipate gross domestic product (GDP) growth of 5.3%, driven by an expansion in tourism and natural gas production. Nevertheless, Egyptians continue to endure double-digit inflation stemming in part from the 2016 flotation of the currency, tax increases, and reductions in food and fuel subsidies. While it is difficult to ascertain how dissatisfied the public is with rising prices, President Sisi has responded to criticisms of his economic policies, stating: \"The path of real reform is difficult and cruel and causes a lot of suffering.... But there is no doubt that the suffering resulting from the lack of reform is much worse.\" The IMF has praised the Egyptian government's record of reform implementation, while also highlighting the need for private sector growth \"that will absorb the rapidly growing labor force and ensure that the benefits are perceived more widely.\"", "After several years of observers seeing Egypt as more inwardly focused, several recent developments suggest an increasingly active foreign policy. In January 2019, Egypt hosted an international forum on Mediterranean gas which included European and Arab countries together with Israel. A month later, President Sisi was elected head of the African Union for a year-long term. In February 2019, Egypt hosted the first-ever European Union- Arab summit in Sharm el Sheikh, where officials discussed terrorism, migration, and the need for greater European-Arab cooperation to counter a perceived growing Chinese and Russian interest in the Middle East."], "subsections": []}, {"section_title": "Domestic Developments", "paragraphs": ["Personnel moves and other developments in Egypt highlight apparent efforts by President Sisi to consolidate power with the help of political allies, including colleagues from Egypt's security establishment. In June 2018, Sisi reshuffled his cabinet, making key changes to the defense and interior ministries, among other appointments. Sisi appointed Mohamed Ahmed Zaki, former head of the Republican Guard, as defense minister and Mahmoud Tawfik, former head of the National Security Service, as interior minister. According to one account, Sisi may have been rewarding Zaki for his role in arresting former Egyptian President Mohamed Morsi in 2013.", "In July 2018, parliament passed Law 161 of 2018, providing judicial immunity to senior military commanders for military acts committed during the two-and-a-half-year period beginning with the military coup of July 2013. The new law grants immunity to senior commanders while potentially keeping high-ranking officers on reserve duty for life, making them ineligible to run for president. In order for a senior commander to be prosecuted under this new law, a case would have to be first authorized by the Supreme Council of the Armed Forces (SCAF), which President Sisi appoints. According to one analysis, the law deters senior officers from challenging President Sisi (for example, some challenges occurred during the run-up to the 2018 presidential election), thereby acting \"as a guarantor of President Sisi's authoritarian rule, setting the stage for him to remain president for life.\"", "Per the 2014 Egyptian constitution (article 140), President Sisi, who was reelected in April 2018, may only serve two four-year terms in office (current term ends in 2022). However, his supporters have proposed a set of amendments to the constitution which, if approved by parliament and public referendum, have the potential to make President Sisi eligible for an additional two six-year terms when his current term ends in 2022. Other proposed changes to the constitution include", "granting the president the authority to appoint all chief justices of Egyptian judicial bodies, and the public prosecutor; requiring that at least one-quarter of the seats in the parliament be allocated to women and reducing the number of the seats in the House of Representatives from 596 to 450; and establishing an upper house of parliament (Senate) consisting of 250 members, two-thirds of whom would be elected and one-third of whom would be appointed by the president."], "subsections": []}, {"section_title": "Democracy, Human Rights, and Religious Freedom", "paragraphs": ["President Sisi has come under repeated international criticism for an ongoing government crackdown against various forms of political dissent and freedom of expression. Certain practices of Sisi's government, the parliament, and the security apparatus have been contentious. According to the U.S. State Department's report on human rights conditions in Egypt in 2017:", "The most significant human rights issues included arbitrary or unlawful killings by the government or its agents; major terrorist attacks; disappearances; torture; harsh or potentially life-threatening prison conditions; arbitrary arrest and detention; including the use of military courts to try civilians; political prisoners and detainees; unlawful interference in privacy; limits on freedom of expression, including criminal \"defamation of religion\" laws; restrictions on the press, internet, and academic freedom; and restrictions on freedoms of assembly and association, including government control over registration and financing of NGOs [nongovernmental organizations]. LGBTI persons faced arrests, imprisonment, and degrading treatment. The government did not effectively respond to violence against women, and there were reports of child labor.", "Select international human rights, democracy, and development monitoring organizations provide the following rankings for Egypt globally:", "Other human rights issues of potential interest to Congress may include the 2013 convictions of American, European, and Egyptian civil society representatives; the controversial 2017 NGO law; the detention of American citizens in Egypt; and the treatment of Coptic Christians, discussed in the following sections. "], "subsections": [{"section_title": "\"Case 173\"", "paragraphs": ["In 2013, an Egyptian court convicted and sentenced 43 individuals from the United States, Egypt, and Europe, including the Egypt country directors of the National Democratic Institute (NDI) and the International Republican Institute (IRI), for spending money from organizations that were operating in Egypt without a license and for receiving foreign funds (known as Case 173 or the \"foreign funding case\"). ", "Some lawmakers had protested that those individuals were wrongfully convicted and had requested that the Egyptian government and judiciary resolve the matter. In 2018, a retrial began and, on December 20, 2018, the individuals were acquitted of all charges. In January 2019, U.S. Secretary of State Michael R. Pompeo traveled to Cairo, where he remarked: \"I was happy to see our citizens, wrongly convicted of improperly operating NGOs here, finally be acquitted. And we strongly support President Sisi's initiative to amend Egyptian law so that this does not happen again. More work certainly needs to be done to maximize the potential of the Egyptian nation and its people. I'm glad that America will be a partner in those efforts.\" However, Case 173 remains active, as the judiciary has imposed asset freezes and travel bans on several Egyptian civil society activists."], "subsections": []}, {"section_title": "NGO Law", "paragraphs": ["In May 2017, President Sisi signed Law 70 of 2017 on Associations and Other Foundations Working in the Field of Civil Work. The parliament had passed this bill six months earlier, and both the passage and signing drew widespread international condemnation. The new law (which replaced a 2002 NGO law) requires NGOs to receive prior approval from internal security before accepting foreign funding. It also restricts the scope of permitted NGO activities and increases penalties for violations, including possible imprisonment for up to five years. However, the government did not issue implementing regulations for the new NGO law. ", "At Egypt's November 2018 World Youth Forum in Sharm el Sheikh, President Sisi announced plans to amend Law 70. According to Sisi, \"I want to reassure those who are listening to me inside Egypt and outside of Egypt, that in Egypt, we are keen that the law becomes balanced and achieves what is required of it to regulate the work of these groups in a good way. This is not just political talk.\" Since then, Egypt's Ministry of Social Solidarity has held multiple rounds of talks with local NGOs aimed at determining which articles of the law need to be amended. A draft proposal is expected to be ready in the spring of 2019, when it will be sent to parliament for consideration."], "subsections": []}, {"section_title": "Detention of American Citizens in Egypt", "paragraphs": ["The detention of American citizens in Egypt has continued to strain U.S.-Egyptian relations. Some Members of Congress are concerned about the case of 53-year-old New York resident Mustafa Kassem, who was detained by authorities in 2013 and sentenced to 15 years in prison in a mass trial in September 2018. These lawmakers insist that Kassem, who has been on a limited hunger strike, was wrongfully arrested and convicted, and they have sought Trump Administration support in securing his release from the government of Egypt. In January 2018, Vice President Pence raised Kassem's case directly with President Sisi in a meeting in Cairo, saying \"I told him we'd like to see those American citizens restored to their families and restored to our country.\""], "subsections": []}, {"section_title": "Coptic Christians", "paragraphs": ["Since taking office, President Sisi has publicly called for greater Muslim-Christian coexistence and national unity. In January 2019, he inaugurated Egypt's Coptic Cathedral of Nativity in the new administrative capital east of Cairo saying, \"This is an important moment in our history.... We are one and we will remain one.\"", "Despite these public calls for improved interfaith relations in Egypt, the minority Coptic Christian community continues to claim that they face professional and social discrimination, along with occasional sectarian attacks by terrorists and vigilantes. Coptic Christians have also voiced concern about state regulation of church construction. They have long demanded that the government reform long-standing laws (with two dating back to 1856 and 1934, respectively) on building codes for Christian places of worship. ", "Article 235 of Egypt's 2014 constitution mandates that parliament reform these building code regulations. In 2016, parliament approved a church construction law (Law 80 of 2016) that expedited the government approval process for the construction and restoration of Coptic churches, among other structures. Although Coptic Pope Tawadros II welcomed the law, others claim that it continues to be discriminatory. According to Human Rights Watch , \"the new law allows governors to deny church-building permits with no stated way to appeal, requires that churches be built 'commensurate with' the number of Christians in the area, and contains security provisions that risk subjecting decisions on whether to allow church construction to the whims of violent mobs.\""], "subsections": []}]}, {"section_title": "The Economy", "paragraphs": ["For 2019, the IMF projects 5.3% GDP growth for the Egyptian economy, noting that the outlook remains \"favorable, supported by strong policy implementation.\" In 2016, the IMF and Egypt reached a three-year, $12 billion loan agreement, $10 billion of which has been disbursed as of March 2019. Key sources of foreign exchange (tourism and remittances) are up and unemployment is at its lowest level since 2011. In line with IMF recommendations, the government has taken several steps to reform the economy, including depreciating the currency, reducing fuel subsidies, enacting a value-added tax (VAT), and providing cash payments to the poor in lieu of subsidizing household goods (though many food subsidies continue).", "Egypt's energy sector also is contributing to the economy's rebound. Egypt is the largest oil producer in Africa outside of the Organization of the Petroleum Exporting Countries (OPEC) and the third-largest natural gas producer on the continent following Algeria and Nigeria. In December 2017, an Egyptian and Italian partnership began commercial output from the Zohr natural gas field (est. 30 trillion cubic feet of gas), the largest ever natural gas field discovered in the Mediterranean Sea (see Figure 3 ). The Egyptian government also has repaid debts owed to foreign energy companies, allowing for new investments from BP and BG Group. ", "Egypt is attempting to position itself as a regional gas hub, whereby its own gas fields meet domestic demand while imported gas from Israel and Cyprus can be liquefied in Egypt and reexported. Israeli and Egyptian companies have bought significant shares of an unused undersea pipeline connecting Israel to the northern Sinai Peninsula (see Figure 4 ). The pipeline will be used to transport natural gas from Israel to Egypt for possible reexport, as part of an earlier 10-year, $15 billion gas deal between the U.S. Company Noble Energy, its Israeli partner Delek, and the Egyptian company Dolphinus Holdings. In January 2019, Egypt convened the first ever Eastern Mediterranean Gas Forum (EMGF), a regional consortium consisting of Egypt, Israel, Jordan, the Palestinian Authority, Cyprus, Greece, and Italy, intended to consolidate regional energy policies and reduce costs.", "Despite Egypt's positive economic outlook, significant challenges remain. Inflation remains over 11%, making the cost of goods high for many Egyptians. In addition, while the fiscal deficit may be decreasing, Egypt's overall public and foreign debt have grown significantly in recent years and remain high, leading the government to allocate resources (nearly 38% of Egypt's budget) toward debt-service payments and away from spending on health and education. Economists forecast that total public debt will reach 84.8% of GDP and external debt 32% of GDP ($101.7 billion) in 2019. ", "Some observers assert that Egypt's recent economic reforms, while successful in the short term, have not addressed deeper structural impediments to growth. For example, Egypt's industrial sector is heavily dependent upon imports and, as the economy expands, the demand for foreign currency increases. According to Bloomberg , \"this means, the more the economy grows, the greater the pressure on dollar reserves. It doesn't help that these were built up almost entirely through foreign borrowing, pushing Egypt's foreign debt from $55 billion in 2016 to $92 billion in late 2018. It won't be long before the country's finances are once again in crisis.\"", "Many experts argue that to sustain growth over the long term, Egypt requires dramatic expansion of the nonhydrocarbon private sector. For decades, Egypt's military has played a key role in the nation's economy as a food producer and low-cost domestic manufacturer of consumable products; however, due to political sensitivities, the extent of its economic power is rarely quantified. Egypt's military is largely economically self-sufficient. It produces what it consumes (food and clothes) and then sells surplus goods for additional revenue. Egyptian military companies have been the main beneficiaries of the massive infrastructure contracts Sisi has commissioned. Moreover, military-owned manufacturing companies have expanded into new markets, producing goods (appliances, solar panels, some electronics, and some medical equipment) that are cheaper than either foreign imports or domestically produced goods made by the private sector. "], "subsections": []}, {"section_title": "Terrorism and Islamist Militancy in Egypt", "paragraphs": ["President Sisi, who led the 2013 military intervention and was elected president in mid-2014, came to power promising not only to defeat violent Salafi-Jihadi terrorist groups militarily, but also to counter their foundational ideology, which President Sisi and his supporters often attribute to the Muslim Brotherhood. President Sisi has outlawed the Muslim Brotherhood while launching a more general crackdown against a broad spectrum of opponents, both secular and Islamist. While Egypt is no longer beset by the kind of large-scale civil unrest and public protest it faced during the immediate post-Mubarak era, it continues to face terrorist and insurgent violence, both in the Sinai Peninsula and in the rest of Egypt."], "subsections": [{"section_title": "Sinai Peninsula", "paragraphs": ["Terrorists based in the Sinai Peninsula (the Sinai) have been waging an insurgency against the Egyptian government since 2011. While the terrorist landscape in Egypt is evolving and encompasses several groups, the Islamic State's Sinai Province affiliate (IS-SP) is known as the most lethal. Since its affiliation with the Islamic State in 2014, IS-SP has attacked the Egyptian military continually, targeted Coptic Christian individuals and places of worship, and occasionally fired rockets into Israel. In October 2015, IS-SP targeted Russian tourists departing the Sinai by planting a bomb aboard Metrojet Flight 9268, which exploded midair, killing all 224 passengers and crew aboard. Two years later, on November 24, 2017, IS-SP gunmen launched an attack against the Al Rawdah mosque in the town of Bir al Abed in northern Sinai. That attack killed at least 305 people, making it the deadliest terrorist attack in Egypt's modern history.", "Combating terrorism in the Sinai is particularly challenging due to an array of factors, including the following:", "Geograph y : The peninsula's interior is mountainous and sparsely populated, providing militants with ample freedom of movement. Demograph y and Culture : The Sinai's northern population is a mix of Palestinians and Bedouin Arab tribes whose relationship to the state is filled with distrust. Sinai Bedouin have faced discrimination and exclusion from full citizenship and access to the economy. In the absence of development, a black market economy based primarily on smuggling has thrived, further contributing to the popular portrayal of Bedouin as outlaws. State authorities charge that the Sinai Bedouin seek autonomy from the central government, while residents insist on obtaining basic rights, such as property rights, full citizenship, and access to government services such as education and health care. Econom ics : Bedouins claim that Egypt has underinvested in northern Sinai, channeling development toward southern tourist destinations that cater to foreign visitors. Northern Sinai consists of mostly flat desert terrain inhospitable to large-scale agriculture without significant investment in irrigation. For decades, the Egyptian state has claimed to follow successive Sinai development plans. However, Egyptian governance and development of the Sinai has been hampered by corruption. Diploma cy : The 1979 Israeli-Egyptian peace treaty limits the number of soldiers that Egypt can deploy in the Sinai, subject to the parties' ability to negotiate changes as circumstances necessitate. Egypt and Israel mutually agree upon any short-term increase of Egypt's military presence in the Sinai. Since Israel returned control over the Sinai to Egypt in 1982, the area has been partially demilitarized, and the Sinai has served as an effective buffer zone between the two countries. The Multinational Force and Observers, or MFO, are deployed in the Sinai to monitor the terms of the Israeli-Egyptian peace treaty (see Figure 5 ).", "Egypt and Israel reportedly continue to cooperate in countering terrorism in the Sinai. In a televised interview, President Sisi responded to a question on whether Egyptian-Israeli military cooperation was the closest it has ever been, saying \"That is correct. The [Egyptian] Air Force sometimes needs to cross to the Israeli side. And that's why we have a wide range of coordination with the Israelis.\" One news account suggests that Israel, with Egypt's approval, has used its own drones, helicopters, and aircraft to carry out more than 100 covert airstrikes inside Egypt against militant targets. ", "In order to counter IS-SP in northern Sinai, the Egyptian armed forces and police have declared a state of emergency, imposed curfews and travel restrictions, and erected police checkpoints along main roads. Authorities also have limited domestic and foreign media access to the northern Sinai, declaring it an active combat zone and unsafe for journalists. According to Jane's Defence Weekly , Egypt may be upgrading an old air base in the Sinai (Bir Gifgafa), where it could deploy Apache attack helicopters and unmanned aerial vehicles for use in counterterrorism operations. ", "While an increased Egyptian military presence in the Sinai may be necessary to stabilize the area, many observers have argued that military means alone are insufficient. These critics say that force should be accompanied by policies to reduce the appeal of antigovernment militancy by addressing local political and economic grievances. According to one account:", "Sinai residents are prohibited from joining any senior post in the state. They cannot work in the army, police, judiciary, or in diplomacy. Meanwhile, no development projects have been undertaken in North Sinai the past 40 years. The villages of Rafah and Sheikh Zuwayed have no schools or hospitals and no modern system to receive potable water. They depend on rainwater and wells, as if it were the Middle Ages.", "Egyptian counterterrorism efforts in the Sinai appear to have reduced the frequency of terrorist attacks somewhat. In February 2018, the military launched an offensive campaign, dubbed \"Operation Sinai 2018.\" During the campaign, the military deployed tens of thousands of troops to the peninsula and was able to eliminate several senior IS-SP leaders. One report suggests that unlike previous military operations against militants in the Sinai, this time the Egyptian military armed progovernment tribesmen to assist conventional forces in combating IS-SP. According to one analysis, the military's recent campaign has \"to some degree, restricted the militants' movements, destroyed a number of hideouts, and most importantly eliminated several trained and influential elements.\" However, as in previous major operations, once the military reduces its presence in northern Sinai, terrorist groups may reconstitute themselves. ", "In March 2019, CENTCOM Commander General Joseph L. Votel testified before Congress, stating that the \"Egyptian Armed Forces have more effectively fought ISIS in the Sinai and are now taking active measures to address the underlying issues that give life to\u2014to these violent extremist groups and are helping to contain the threat.\""], "subsections": [{"section_title": "Beyond the Sinai: Other Egyptian Insurgent Groups", "paragraphs": ["Outside of the Sinai, either in the western desert near the Libya border or other areas (Cairo, Nile Delta, Upper Egypt), small nationalist insurgent groups, such as Liwa al Thawra (The Revolution Brigade) and Harakat Sawaed Misr (Arms of Egypt Movement, referred to by its Arabic acronym HASM), have carried out high-level assassinations of military/police officials and bombings of infrastructure. According to one expert, these insurgent groups are comprised mainly of former Muslim Brotherhood activists who have splintered off from the main organization to wage an insurgency against the government. ", "On January 31, 2018, the U.S. State Department designated Liwa al Thawra and HASM as Specially Designated Global Terrorists (SDGTs) under Section 1(b) of Executive Order (E.O.) 13224. The State Department noted that some of the leaders of both groups \"were previously associated with the Egyptian Muslim Brotherhood.\"", "Terrorist attacks against key sectors of the economy continue. In December 2018, a bus carrying a group of Vietnamese tourists to the pyramids in Giza hit a roadside bomb killing 4 people and injuring 11 others. No group claimed responsibility for the attack. In February 2019, a terrorist detonated a suicide bomb he was carrying while being pursued by police, killing himself and two officers near Cairo's popular Khan el Khalili market and famous Al Azhar Mosque."], "subsections": []}]}]}, {"section_title": "Egypt's Foreign Policy", "paragraphs": [], "subsections": [{"section_title": "Israel and the Palestinians", "paragraphs": ["Egypt and Israel have continued to find specific areas in which they can cooperate. In 2018, Israeli and Egyptian companies entered into a decade-long agreement by reaching a $15 billion natural gas deal, according to which Israeli off-shore natural gas will be exported to Egypt for liquefaction before being exported elsewhere (see \" The Economy \" above). While people-to-people relations remain cold, Israel and Egypt continue to cooperate against Hamas in the Gaza Strip. In mid-November 2018, Egyptian mediation between Israel and Hamas helped calm tensions after an Israeli raid inside Gaza escalated tensions. Egypt reportedly continues to broker indirect Israel-Hamas talks aimed at establishing a long-term cease-fire.", "Egypt is opposed to Islamist groups wielding political power across the Middle East, and opposes Turkish and Qatari support for Hamas. On the Egyptian-Gaza border, Egypt has tried to thwart arms tunnel smuggling into Gaza and has accused Palestinian militants in Gaza of aiding terrorist groups in the Sinai. In order to weaken Hamas's rule in Gaza, Egypt has sought to restore a Palestinian Authority (PA) presence in Gaza by reconciling it with the PA. Though Egypt has helped broker several agreements aimed at ending the West Bank-Gaza split, Hamas still effectively controls Gaza. Egypt controls the Rafah border crossing into Gaza, the only non-Israeli-controlled entryway into the Strip, which it periodically closes for security reasons. Control over the Rafah border crossing provides Egypt with some leverage over Hamas, though Egyptian authorities use it carefully in order not to spark a humanitarian crisis on their border."], "subsections": []}, {"section_title": "Gulf Arab Monarchies", "paragraphs": ["Egypt's relations with most Gulf Arab monarchies are strong. Saudi Arabia, the United Arab Emirates (UAE), and Kuwait have provided billions of dollars in financial assistance to Egypt's military-backed government since 2013. Saudi Arabia also hosts nearly 3 million Egyptian expatriates who work in the kingdom, providing a valuable source of remittances for Egyptians back home. From 2013 onward, Emirati companies have made significant investments in the Egyptian economy. Egypt transferred sovereignty to Saudi Arabia over two islands at the entrance to the Gulf of Aqaba\u2014Tiran and Sanafir\u2014that had been under Egyptian control since 1950, in a move that sparked rare public criticism of President Sisi. In June 2017, Egypt joined other Gulf Arab monarchies in boycotting Qatar. In Yemen, Egypt is officially part of the Saudi-led coalition against Houthi forces, though its contribution to the war effort has been minimal. "], "subsections": []}, {"section_title": "Libya", "paragraphs": ["The Egyptian government supports Field Marshal Khalifa Haftar and the Libyan National Army (LNA) movement, which controls most of eastern Libya. Haftar's politics closely align with President Sisi's, as both figures hail from the military and broadly oppose Islamist political forces. From a security standpoint, Egypt seeks the restoration of order on its western border, which has experienced occasional terrorist attacks and arms smuggling. From an economic standpoint, thousands of Egyptian guest workers were employed in Libya's energy sector prior to unrest in Libya in 2011, and Egypt seeks their return to Libya and a resumption of the vital remittances those workers provided the Egyptian economy. ", "Diplomatically, Egypt has tried to leverage its close ties to Haftar and the LNA in order to play the role of mediator between the LNA and Fayez al Sarraj, the Chairman of the Presidential Council of Libya and Prime Minister of the U.N.-backed Government of National Accord. Egypt's policy toward Libya also is closely aligned with other foreign backers of the LNA, including France and the United Arab Emirates (UAE). Reportedly, the three countries are working in concert to strengthen the position of Haftar in order to facilitate the eventual reunification of the Libyan army. A 2019 LNA offensive into southern Libya has placed additional pressure on the Government of National Accord and may complicate U.S.-backed efforts by the United Nations to facilitate a national dialogue, constitutional referendum, and elections in 2019."], "subsections": []}, {"section_title": "Egypt and the Nile Basin Countries", "paragraphs": ["To Egypt's south, the government is embroiled in regional disputes with Nile Basin countries, such as Ethiopia, which is nearing completion of the $4.2 billion Grand Ethiopian Renaissance Dam, a major hydroelectric project. Egypt argues that the dam, once filled, will limit the flow of the Nile River below Egypt's agreed share. However, many analysts expect that Egypt will address the dispute by increasing water-use efficiency and investing in desalination, rather than using its military to bomb the dam. Reduced Nile flow into Egypt may exacerbate existing water shortages and cause short-term political problems for the Egyptian government, which faces extensive domestic water needs. In February 2019, President Sisi assumed the one-year chairmanship of the African Union, during which he is expected to promote closer relations with fellow African states. "], "subsections": []}, {"section_title": "Egypt and Russia", "paragraphs": ["Egypt and Russia, close allies in early years of the Cold War, have again strengthened bilateral ties under President Sisi, who has promised to restore Egyptian stability and international prestige. His relationship with Russian President Vladimir Putin has rekindled, in the words of one observer, \"a romanticized memory of relations with Russia during the Nasser era.\" President Sisi first turned to Russia during the Obama Administration, when U.S.-Egyptian ties were strained, and Egypt seemed intent on signaling its displeasure with U.S. policy. ", "Since 2014, Egypt and Russia have improved ties in a number of ways, including through arms deals. Reportedly, Egypt is upgrading its aging fleet of legacy Soviet MiG-21 aircraft to a fourth generation MiG-29M variant with additional deliveries to Egypt in 2018 (first delivered in April 2017). Egypt also has purchased 46 standard Ka-52 Russian attack helicopters for its air force. Egypt reportedly also has purchased the naval version of the Ka-52 for use on Egypt's two French-procured Mistral-class helicopter dock vessels (see below), and the S-300VM surface-to-air missile defense system from Russia. In August 2018, Egyptian Defense Minister Mohamed Zaki visited Russia, where he attended a Russian arms exhibition. ", "Additionally, Egypt and Russia reportedly have expanded their cooperation on nuclear energy. In 2015, Egypt reached a deal with Russian state energy firm Rosatom to construct a 4,800-megawatt nuclear power plant in the Egyptian Mediterranean coastal town of Daba'a, 80 miles northwest of Cairo. Russia is lending Egypt $25 billion over 35 years to finance the construction and operation of the nuclear power plant (this will cover 85% of the project's total costs). The contract also commits Russia to supply the plant's nuclear fuel for 60 years and transfer and store depleted nuclear fuel from the reactors.", "As Egyptian and Russian foreign policies have become more closely aligned in conflict zones such as eastern Libya, bilateral military cooperation has expanded. One report suggests that Russian Special Forces based out of an airbase in Egypt's western desert (Sidi Barrani) may be aiding General Haftar. In November 2017, Egypt and Russia signed a draft agreement governing the use of each other's air space.", "While Egyptian-Russian ties have grown warmer in recent years, they are not without complications. In the aftermath of an October 2015 terrorist attack against a Russian passenger jet departing from Sharm El Sheikh, visits to Egypt by Russian tourists, previously the country's largest source of tourists, dropped significantly. Russian commercial aircraft have resumed direct flights to Cairo but not to Sharm El Sheikh. Egypt and Russia also engaged in a trade dispute in 2016 over Russian wheat imports. Egypt is the largest global importer of wheat, and the largest export market for Russian wheat. "], "subsections": []}, {"section_title": "France", "paragraphs": ["Aside from Russia, France stands out as a non-U.S. country with which President Sisi has sought to build a diplomatic and military procurement relationship. In the last five years, as French-Egyptian ties have improved, Egypt has purchased major air and naval defense systems from French defense contractors, including the following:", "Four Gowind Corvettes (produced by Naval Group)\u2014This deal was signed in July 2014. As part of the French-Egyptian arrangement, some of the Corvette construction has taken place at the Alexandria Shipyard in Egypt. One FREMM multi-mission Frigate (produced by Naval Group)\u2014Named the Tahya Misr (Long Live Egypt), this vessel was delivered to Egypt in 2015. This ship has participated in an annual joint French-Egyptian naval exercise, known as Cleopatra. In February 2015, Egypt purchased 24 Rafale multirole fighters (produced by Dassault Aviation). Under the initial agreement, Egypt and France may enter into a new procurement agreement for 12 additional Rafale fighters. According to the manufacturer, the Rafale has flown in combat in Afghanistan, Libya, Mali, Iraq, and Syria and is used by Egypt, Qatar, and India. In 2018, French officials said that the United States would not permit France to export the SCALP air-launched land-attack cruise missile used on the Rafale to Egypt under the International Trade in Arms Regulation (ITAR) agreement. The United States may have been concerned over the transfer of sensitive technology to Egypt. Two Mistral-class Helicopter Carriers (produced by Naval Group)\u2014In the fall of 2015, France announced that it would sell Egypt two Mistral-class Landing Helicopter Dock (LHD) vessels (each carrier can carry 16 helicopters, 4 landing craft, and 13 tanks) for $1 billion. The LHDs (ENS Anwar El Sadat and ENS Gamal Abdel Nasser ) were delivered in 2016. In 2017, Egypt announced that it would purchase Russian 46 Ka-52 Alligator helicopters, which can operate on the LHDs.", "In January 2019, French President Emmanuel Macron paid a three-day visit to Egypt, where he raised human rights issues in public and with Egyptian authorities and civil society representatives. According to Macron, \"I can't see how you can pretend to ensure long-term stability in this country, which was at the heart of the Arab Spring and showed its taste for freedom, and think you can continue to harden beyond what's acceptable or justified for security reasons.\""], "subsections": []}]}, {"section_title": "Trump Administration Policy toward Egypt", "paragraphs": ["President Trump has praised the Egyptian government's counterterrorism efforts while his Administration has worked to restore high-level diplomatic engagement, joint military exercises, and arms sales. Many commentators initially expected President Trump to bring the United States and Egypt closer together, and that largely has been the case. The Administration has withheld some foreign assistance for policy reasons on at least one occasion, however, and the United States has not had an ambassador in Cairo since June 30, 2017.", "As evidence of improved bilateral ties, the U.S. Defense Department notified Congress in November 2018 of a major $1 billion sale of defense equipment to Egypt, consisting of 10 AH-64E Apache Attack Helicopters, among other things. The Egyptian Air Force already possesses 45 less advanced versions of the Apache that were acquired between 2000 and 2014. In January 2019, U.S. Secretary of State Michael Pompeo delivered a major policy speech at the American University in Cairo, where he stated: \"And as we seek an even stronger partnership with Egypt, we encourage President Sisi to unleash the creative energy of Egypt's people, unfetter the economy, and promote a free and open exchange of ideas. The progress made to date can continue.\" ", "U.S. officials have not yet publicly criticized efforts by supporters of President Sisi to advance amendments to the constitution (see above) to extend the possibility of Sisi's continued presidency. Human rights advocates have called for Western governments to withhold assistance to Egypt if the amendments are approved. According to Human Rights Watch , \"Al-Sisi's government is encouraged by the continued silence of its allies, and if the US, UK, and France want to avoid the destabilizing consequences of entrenching authoritarian rule in Egypt, they should act now.\" On February 22, 2019, a bipartisan group of national security experts called on U.S. officials to \"express strong concern about the amendments to the Egyptian constitution now moving through a rapid approval process.\"", "Egypt's poor record on human rights and democratization has sparked regular criticism from U.S. officials and some Members of Congress. Since FY2012, Members have passed appropriations legislation that withholds the obligation of FMF to Egypt until the Secretary of State certifies that Egypt is taking various steps toward supporting democracy and human rights. With the exception of FY2014, lawmakers have included a national security waiver to allow the Administration to waive these congressionally mandated certification requirements under certain conditions.", "Over the last year, the Administration has obligated several tranches of FMF to Egypt, including the following:", "In September 2018, the Administration obligated $1 billion in FY2018 FMF. Per Section 7041(a)(3)(A) of P.L. 115-141 , the Consolidated Appropriations Act, FY2018, $300 million in FMF remains withheld from obligation until the Secretary of State certifies that Egypt is taking various steps toward supporting democracy and human rights. In previous acts, the amount withheld had been $195 million. FY2018 FMF for Egypt remains available to be expended until September 30, 2019. In August 2018, the Administration waived the certification requirement in Section 7041(a)(3)(B) of P.L. 115-31 , the Consolidated Appropriations Act, FY2017, allowing for the obligation of $195 million in FY2017 FMF, which occurred in September 2018. However, according to one report, Senator Patrick Leahy has placed a hold on $105 million in FY2017 FMF and is seeking more information on the plight of detained Egyptian-American Moustafa Kassem. In January 2018, the Administration notified Congress of its intent to obligate $1.039 billion in FY2017 FMF out of a total of $1.3 billion appropriated for FY2017. It chose not to obligate $65.7 million in FY2017 FMF. The remaining $195 million had been withheld until a national security waiver was issued in August 2018 (see above).", "For FY2019, the President requested a total of $1.381 billion in foreign assistance for Egypt, the same amount requested for the previous year. Nearly all of the requested funds for Egypt are for the FMF account. For FY2020, the request is nearly identical from previous years, as the President is seeking a total of $1.382 billion in bilateral assistance for Egypt.", "The FY2019 Omnibus ( P.L. 116-6 ) provides the following for Egypt:", "a total of $1.419 billion in bilateral U.S. foreign assistance for Egypt, of which $1.3 billion is in FMF, $112.5 million in ESF, $3 million in NADR, $2 million in INCLE, and $1.8 million in IMET; and a reauthorization of ESF to support future loan guarantees to Egypt;", "P.L. 116-6 sets the following conditions for Egypt:", "As in previous years, it requires that funds may only be made available when the Secretary of State certifies that the government of Egypt is sustaining the strategic relationship with the United States and meeting its obligations under the 1979 Egypt-Israel Peace Treaty. As in previous years, the act withholds ESF that \"the Secretary determines to be equivalent to that expended by the United States Government for bail, and by nongovernmental organizations for legal and court fees, associated with democracy-related trials in Egypt until the Secretary certifies and reports to the Committees on Appropriations that the Government of Egypt has dismissed the convictions issued by the Cairo Criminal Court on June 4, 2013, in Public Prosecution Case No. 1110 for the Year 2012 and has not subjected the defendants to further prosecution or if convicted they have been granted full pardons .\" This last condition (bolded) was added in 2019 to account for the acquittal of the 43 foreign defendants in Case 173 (see above). As in previous years, the FY2019 Omnibus also includes a limitation on ESF, stating that no FY2018 ESF or prior-year ESF \"may be made available for a contribution, voluntary or otherwise, to the Civil Associations and Foundations Support Fund, or any similar fund, established pursuant to Law 70 on Associations and Other Foundations Working in the Field of Civil Work [informally known as the NGO law].\" As in previous years, the act also includes a provision that withholds $300 million of FMF funds until the Secretary of State certifies that the Government of Egypt is taking effective steps to advance, among other things, democracy and human rights in Egypt. The Secretary of State may waive this certification requirement, though any waiver must be accompanied by, among other things, an assessment of the Government of Egypt's compliance with United Nations Security Council Resolution 2270 and other such resolutions regarding North Korea. There has been some concern in the Administration and Congress over Egypt's alleged weapons procurement from North Korea in recent years.", "P.L. 115-245 , the Department of Defense (DOD) and Labor, Health and Human Services, and Education Appropriations Act, 2019 and Continuing Appropriations Act, 2019, specifies that the Secretary of Defense may provide Egypt with funds from the Counter-ISIS Train and Equip Fund (CTEF) to enhance its border security. To date, Egypt has not received security assistance from DOD-managed accounts."], "subsections": [{"section_title": "Appendix. Background on U.S. Foreign Assistance to Egypt", "paragraphs": [], "subsections": []}, {"section_title": "Overview", "paragraphs": ["Between 1946 and 2016, the United States provided Egypt with $78.3 billion in bilateral foreign aid (calculated in historical dollars\u2014not adjusted for inflation). The 1979 Peace Treaty between Israel and Egypt ushered in the current era of U.S. financial support for peace between Israel and its Arab neighbors. In two separate memoranda accompanying the treaty, the United States outlined commitments to Israel and Egypt, respectively. In its letter to Israel, the Carter Administration pledged to \"endeavor to take into account and will endeavor to be responsive to military and economic assistance requirements of Israel.\" In his letter to Egypt, former U.S. Secretary of Defense Harold Brown wrote the following:", "In the context of the peace treaty between Egypt and Israel, the United States is prepared to enter into an expanded security relationship with Egypt with regard to the sales of military equipment and services and the financing of, at least a portion of those sales, subject to such Congressional review and approvals as may be required.", "All U.S. foreign aid to Egypt (or any foreign recipient) is appropriated and authorized by Congress . The 1979 Egypt-Israel Peace Treaty is a bilateral peace agreement between Egypt and Israel, and the United States is not a legal party to the treaty. The treaty itself does not include any U.S. aid obligations, and any assistance commitments to Israel and Egypt that could be potentially construed in conjunction with the treaty were through ancillary documents or other communications and were\u2014by their terms\u2014subject to congressional approval (see above). However, as the peace broker between Israel and Egypt, the United States has traditionally provided foreign aid to both countries to ensure a regional balance of power and sustain security cooperation with both countries.", "In some cases, an Administration may sign a bilateral \"Memorandum of Understanding\" (MOU) with a foreign country pledging a specific amount of foreign aid to be provided over a selected time period subject to the approval of Congress. In the Middle East, the United States has signed foreign assistance MOUs with Israel and Jordan. Currently, there is no U.S.-Egyptian MOU specifying a specific amount of total U.S. aid pledged to Egypt over a certain time period. ", "Congress typically specifies a precise allocation of most foreign assistance for Egypt in the foreign operations appropriations bill. Egypt receives the bulk of foreign aid funds from three primary accounts: Foreign Military Financing (FMF), Economic Support Funds (ESF), and International Military Education and Training (IMET). The United States offers IMET training to Egyptian officers in order to facilitate U.S.-Egyptian military cooperation over the long term."], "subsections": []}, {"section_title": "Military Aid and Arms Sales", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["Since the 1979 Israeli-Egyptian Peace Treaty, the United States has provided Egypt with large amounts of military assistance. U.S. policymakers have routinely justified this aid to Egypt as an investment in regional stability, built primarily on long-running military cooperation and sustaining the treaty\u2014principles that are supposed to be mutually reinforcing. Egypt has used U.S. military aid through the FMF to (among other things) purchase major U.S. defense systems, such as the F-16 fighter aircraft, the M1A1 Abrams battle tank, and the AH-64 Apache attack helicopter. "], "subsections": []}, {"section_title": "Realigning Military Aid from Conventional to Counterterrorism Equipment", "paragraphs": ["For decades, FMF grants have supported Egypt's purchases of large-scale conventional military equipment from U.S. suppliers. However, as mentioned above, the Obama Administration announced that future FMF grants may only be used to purchase equipment specifically for \"counterterrorism, border security, Sinai security, and maritime security\" (and for sustainment of weapons systems already in Egypt's arsenal).", "It is not yet clear how the Trump Administration will determine which U.S.-supplied military equipment would help the Egyptian military counter terrorism and secure its land and maritime borders. Overall, some defense experts continue to view the Egyptian military as inadequately prepared, both doctrinally and tactically, to face the threat posed by terrorist/insurgent groups such as Sinai Province. According to a former U.S. National Security Council official, \"they [the Egyptian military] understand they have got a problem in Sinai, but they have been unprepared to invest in the capabilities to deal with it.\" To reorient the military toward unconventional warfare, the Egyptian military needs, according to one assessment, \"heavy investment into rapid reaction forces equipped with sophisticated infantry weapons, optics and communication gear ... backed by enhanced intelligence, surveillance and reconnaissance platforms. In order to transport them, Egypt would also need numerous modern aviation assets.\""], "subsections": []}, {"section_title": "Special Military Assistance Benefits for Egypt", "paragraphs": ["In addition to substantial amounts of annual U.S. military assistance, Egypt has benefited from certain aid provisions that have been available to only a few other countries. For example", "Early Disbursal and Interest - Bearing Account : Between FY2001 and FY2011, Congress granted Egypt early disbursement of FMF funds (within 30 days of the enactment of appropriations legislation) to an interest-bearing account at the Federal Reserve Bank of New York. Interest accrued from the rapid disbursement of aid has allowed Egypt to receive additional funding for the purchase of U.S.-origin equipment. In FY2012, Congress began to condition the obligation of FMF, requiring the Administration to certify certain conditions had been met before releasing FMF funds, thereby eliminating their automatic early disbursal. However, Congress has permitted Egypt to continue to earn interest on FMF funds already deposited in the Federal Reserve Bank of New York. The Excess Defense Articles (EDA) program provides one means by which the United States can advance foreign policy objectives\u2014assisting friendly and allied nations through provision of equipment in excess of the requirements of its own defense forces. The Defense Security Cooperation Agency (DSCA) manages the EDA program, which enables the United States to reduce its inventory of outdated equipment by providing friendly countries with necessary supplies at either reduced rates or no charge. As a designated \"major non-NATO ally,\" Egypt is eligible to receive EDA under Section 516 of the Foreign Assistance Act and Section 23(a) of the Arms Export Control Act. "], "subsections": []}]}, {"section_title": "Economic Aid", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["Over the past two decades, U.S. economic aid to Egypt has been reduced by over 90%, from $833 million in FY1998 to a request of $75 million for FY2019. Beginning in the mid to late 1990s, as Egypt moved from an impoverished country to a lower-middle-income economy, the United States and Egypt began to rethink the assistance relationship, emphasizing \"trade not aid.\" Congress began to scale back economic aid both to Egypt and Israel due to a 10-year agreement reached between the United States and Israel in the late 1990s known as the \"Glide Path Agreement,\" which gradually reduced U.S. economic aid to Egypt to $400 million by 2008. U.S. economic aid to Egypt stood at $200 million per year by the end of the George W. Bush Administration, whose relations with then-President Hosni Mubarak suffered over the latter's reaction to the Administration's democracy agenda in the Arab world. ", "During the final years of the Obama Administration, distrust of U.S. democracy promotion assistance led the Egyptian government to obstruct many U.S.-funded economic assistance programs. According to the Government Accountability Office (GAO), the Department of State and the U.S. Agency for International Development (USAID) reported hundreds of millions of dollars ($460 million as of 2015) in unobligated prior year ESF funding. As these unobligated balances grew, it created pressure on the Obama Administration to reobligate ESF funds for other purposes. In 2016, the Obama Administration notified Congress that it was reprogramming $108 million of ESF that had been appropriated for Egypt in FY2015 but remained unobligated for other purposes. The Administration claimed that its actions were due to \"continued government of Egypt process delays that have impeded the effective implementation of several programs.\" In 2017, the Trump Administration also reprogrammed FY2016 ESF for Egypt.", "U.S. economic aid to Egypt is divided into two components: (1) USAID-managed programs (public health, education, economic development, democracy and governance); and (2) the U.S.-Egyptian Enterprise Fund. Both are funded primarily through the Economic Support Fund (ESF) appropriations account. "], "subsections": []}]}]}]}}
{"id": "R43139", "title": "Federal Disaster Assistance After Hurricanes Katrina, Rita, Wilma, Gustav, and Ike", "released_date": "2019-02-26T00:00:00", "summary": ["This report provides information on federal financial assistance provided to the Gulf States after major disasters were declared in Alabama, Florida, Louisiana, Mississippi, and Texas in response to the widespread destruction that resulted from Hurricanes Katrina, Rita, and Wilma in 2005 and Hurricanes Gustav and Ike in 2008.", "Though the storms happened over a decade ago, Congress has remained interested in the types and amounts of federal assistance that were provided to the Gulf Coast for several reasons. This includes how the money has been spent, what resources have been provided to the region, and whether the money has reached the intended people and entities. The financial information is also useful for congressional oversight of the federal programs provided in response to the storms. It gives Congress a general idea of the federal assets that are needed and can be brought to bear when catastrophic disasters take place in the United States. Finally, the financial information from the storms can help frame the congressional debate concerning federal assistance for current and future disasters.", "The financial information for the 2005 and 2008 Gulf Coast storms is provided in two sections of this report:", "1. Table 1 of Section I summarizes disaster assistance supplemental appropriations enacted into public law primarily for the needs associated with the five hurricanes, with the information categorized by federal department and agency; and 2. Section II contains information on the federal assistance provided to the five Gulf Coast states through the most significant federal programs, or categories of programs.", "The financial findings in this report include the following:", "Congress has appropriated roughly $121.7 billion in hurricane relief for the 2005 and 2008 hurricanes in 10 supplemental appropriations statutes. The appropriated funds have been distributed among 11 departments, 3 independent agencies/entities, numerous subentities, and the federal judiciary. Congress appropriated almost half of the funds ($53.8 billion, or 44% of the total) to the Department of Homeland Security, most of which went to the Disaster Relief Fund (DRF) administered by the Federal Emergency Management Agency (FEMA). Congress targeted roughly 22% of the total appropriations (almost $27 billion) to the Department of Housing and Urban Development for community development and housing programs. Approximately 20% ($25 billion) was appropriated to Department of Defense entities: $15.6 billion for civil construction and engineering activities undertaken by the Army Corps of Engineers and $9.2 billion for military personnel, operations, and construction costs. FEMA has reported that roughly $5.9 billion has been obligated from the DRF after Hurricanes Katrina, Rita, and Wilma to save lives and property through mission assignments made to over 50 federal entities and the American Red Cross (see Table 17), $160.4 million after Hurricane Gustav through 32 federal entities (see Table 18), and $441 million after Hurricane Ike through 30 federal entities (see Table 19). In total, federal agencies obligated roughly $6.5 billion for mission assignments after the five hurricanes. The Small Business Administration approved almost 177,000 applications in the region for business, home, and economic injury loans, with a total loan value of almost $12 billion (Table 28 and Table 29). The Department of Education obligated roughly $1.8 billion to the five states for elementary, secondary, and higher education assistance (Table 11).", "This report also includes a brief summary of each hurricane and a discussion concerning federal to state cost-shares. Federal assistance to states is triggered when the President issues a major disaster declaration. In general, once declared the federal share for disaster recovery is 75% while the state pays for 25% of recovery costs. However, in some cases the federal share can be adjusted upward when a sufficient amount of damage has occurred, or when altered by Congress (or both). In addition, how much federal assistance is provided to states for major disasters is influenced not only by the declaration, but also by the percentage the federal government pays for the assistance. This report includes a cost-share discussion because some of these incidents received adjusted cost-shares in certain areas."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides a comprehensive summary of the federal financial assistance provided to the Gulf Coast states of Alabama, Florida, Louisiana, Mississippi, and Texas in response to the widespread destruction that resulted from Hurricanes Katrina, Rita, and Wilma in 2005 and Hurricanes Gustav and Ike in 2008. ", "The damages caused by the hurricanes are some of the worst in the history of the United States in terms of lives lost and property damaged and destroyed. The federal government played a significant role in the response to the hurricanes and Congress appropriated funds for a wide range of activities and efforts to help the Gulf Coast states recover and rebuild from the storms. In addition, Congress appropriated a significant amount of funds for mitigation activities and projects to reduce or eliminate the impacts of future storms. ", "Though the storms happened over a decade ago, Congress remains interested in the types and amounts of federal assistance that were provided to the Gulf Coast for several reasons. For one, Congress continues to be interested in how the money has been spent, what resources have been provided to the region, and whether the money has reached the people and entities intended to receive the funds. The financial information is also useful for congressional oversight and evaluation of the federal entities that were responsible for response and recovery operations. Similarly, it gives Congress a general idea of the federal assets that are needed and can be brought to bear when catastrophic disasters take place in the United States. As such, the financial information from the storms can help frame the congressional debate concerning federal assistance for current and future disasters.", "The financial information provided in this report includes a summary of appropriations provided to the Gulf Coast states by Congress in response to the 2005 and 2008 hurricanes. In addition, when available, hurricane-specific and state-specific funding information is provided by federal entity."], "subsections": []}, {"section_title": "Background1", "paragraphs": ["The 2005 hurricane season was a record-breaking season for hurricanes and storms. There were 13 hurricanes in 2005, breaking the old record of 12 hurricanes set in 1969. The 2005 season also set a record for the number of category 5 storms (three) in a season. Most of the damaging effects caused by the hurricanes were experienced in the Gulf Coast states of Louisiana, Arkansas, Florida, Mississippi, and Texas. The 2008 hurricane season was also an active hurricane season that caused additional damage in the Gulf Coast. "], "subsections": [{"section_title": "Hurricane Katrina", "paragraphs": ["On August 23, 2005, Hurricane Katrina began about 200 miles southeast of Nassau in the Bahamas as a tropical depression. It became a tropical storm the following day. On August 24-25, 2005, the storm moved through the northwestern Bahamas and then turned westward toward southern Florida. Katrina became a hurricane just before making landfall near the Miami-Dade/Broward county line during the evening of August 25, 2005. The hurricane moved southwestward across southern Florida into the eastern Gulf of Mexico on August 26, 2005. Katrina then strengthened significantly, reaching category 5 intensity on August 28. On August 29, 2005, Hurricane Katrina made landfall in southern Plaquemines Parish, LA. The storm affected a broad geographic area\u2014stretching from Alabama, across coastal Mississippi, to southeast Louisiana. Hurricane Katrina was reported as a category 4 storm when it initially made landfall in Louisiana, but was later downgraded to a category 3 storm. Even as a category 3 storm, Hurricane Katrina was one of the strongest storms to impact the U.S. Gulf Coast. The force of the storm was significant. The winds to the east of the storm's center were estimated to be nearly 125 mph (see Figure 1 ).", "The Gulf Coast has had a history of devastating hurricanes, but Hurricane Katrina was singular in many respects. Approximately 1.2 million people evacuated from the New Orleans metropolitan area. While the evacuation helped to save lives, over 1,800 people died in the storm. In addition, Hurricane Katrina destroyed or made uninhabitable an estimated 300,000 homes and displaced over 400,000 citizens. Economic losses from the storm were estimated to be between $125 billion and $150 billion."], "subsections": []}, {"section_title": "Hurricanes Rita and Wilma", "paragraphs": ["Two other hurricanes made landfall in the Gulf Coast shortly after Hurricane Katrina that added to recovery costs and impeded recovery efforts. On September 24, 2005, Hurricane Rita made landfall on the Texas and Louisiana border as a category 3 storm. Rita also hit parts of Arkansas and Florida. Hurricane Rita caused widespread property damage to the Gulf Coast; however, there were few deaths or injuries reported. Rita produced rainfalls of 5 to 9 inches over large portions of Louisiana, Mississippi, and eastern Texas, with isolated amounts of 10 to 15 inches. In addition, storm surge flooding and wind damage occurred in southwestern Louisiana and southeastern Texas, with some surge damage occurring in the Florida Keys (see Figure 2 ).", "On October 24, 2005, Hurricane Wilma made landfall as a category 3 hurricane in Cape Romano, FL. The eye of Hurricane Wilma crossed the Florida Peninsula and then moved into the Atlantic Ocean north of Palm Beach (see Figure 3 ). Hurricane Wilma killed five people in Florida and caused widespread property damage in the Gulf Coast region."], "subsections": []}, {"section_title": "Hurricanes Gustav and Ike", "paragraphs": ["In 2008, the Gulf Coast was once again affected by storms that caused billions of dollars in additional damage. On September 1, 2008, Hurricane Gustav made landfall near Cocodrie, LA, as a category 2 storm, then swept across the region causing damages in Alabama, Florida, Mississippi, and Texas (see Figure 4 ). Gustav produced rains over Louisiana and Arkansas that caused moderate flooding along many rivers, and is known to have produced 41 tornadoes: 21 in Mississippi, 11 in Louisiana, 6 in Florida, 2 in Arkansas, and 1 in Alabama.", "Hurricane Ike made landfall as a category 2 storm near Galveston, Texas, on September 13, 2008, with maximum sustained winds of 110 mph. The hurricane weakened as it moved inland across eastern Texas and Arkansas. Hurricane Ike's storm surge devastated the Bolivar Peninsula of Texas, and surge, winds, and flooding from heavy rains caused widespread damage in other portions of southeastern Texas, western Louisiana, and Arkansas and killed 20 people in these areas (see Figure 5 ). Additionally, as an extratropical system over the Ohio Valley, Ike was directly or indirectly responsible for 28 deaths and more than $1 billion in property damage in areas outside of the Gulf Coast."], "subsections": []}]}, {"section_title": "Information Categories and Data Collection Methods", "paragraphs": ["The following two sections provide funding data and narratives describing the assistance that was provided to the Gulf Coast in response to the 2005 and 2008 hurricane seasons. Section I presents funding provided to the five Gulf Coast states (Alabama, Florida, Louisiana, Mississippi, and Texas) after Hurricanes Katrina, Rita, Wilma, Gustav, and Ike. Funding amounts were compiled by CRS analysts who reviewed legislative texts of supplemental appropriations. The amounts are disaggregated by federal entity and subentity, insofar as possible and applicable. The data are based on the analysts' interpretations of disaster assistance. Some data were excluded from Section I because CRS analysts found that the data either were too ambiguous or covered disasters not limited to the Gulf Coast. Certain amounts pertaining to a range of disasters were included, however, because CRS analysts determined that most of the funds went to the Gulf Coast states.", "Section II presents funding by federal agency. The amounts reported may reflect expenditures, obligations, allocations, or appropriations. The data in this section are not based solely on those in Section I . Rather, the data in Section II were derived from a variety of authoritative sources, including agency websites, CRS experts who received information directly from agencies, and governmental reports. Section II presents funding information by federal entity and includes a narrative summarizing each agency's disaster assistance efforts. The sections also provide the authorities that authorized the activities that were provided. When possible, funding data are provided in tabular form. ", "It should be noted that the data on appropriations in Section I , Table 1 , are not directly comparable to funding data in Section II . The former were drawn solely from the public laws cited in the source note to Table 1 . The data in Section II were obtained, as cited in each subsection, from a range of published and unpublished sources, and include various fiscal years."], "subsections": []}, {"section_title": "Caveats and Limitations", "paragraphs": ["Funding data on federal (and nonfederal) assistance are not systematically collected. Given the absence of comprehensive federal information on disaster assistance, the data provided in this report should only be considered as an approximation, and should not be viewed as definitive. ", "In addition to the above, the following caveats apply to this report:", "It is difficult to identify all of the federal entities that provide disaster relief because many federal entities provide aid through a wide range of programs, not necessarily through those designated specifically as \"disaster assistance\" programs. Because data on federal (and nonfederal) assistance are not systematically collected, funding data were drawn from a wide range of sources including published and unpublished data that have been collected at different times and under inconsistent reporting methods. Following the exodus of thousands of residents from the Gulf Coast states after Hurricane Katrina in 2005, many other states received federal assistance to cope with the influx of those seeking aid. The aid provided to the states outside the Gulf Coast is not discussed in this report. The appropriations language reviewed for Section I usually designates funds to a federal entity for a range of disasters without identifying how much funding is to be disbursed to each incident. For example, P.L. 110-329 , signed into law on September 30, 2008, provided funds for several disasters that occurred in 2008, including Hurricanes Gustav and Ike, wildfires in California, and the Midwest floods. Determining the funding amounts directed toward each individual disaster is difficult, if not impossible, unless the legislative text specifies these amounts. An additional difficulty occurs in tracking funding at the agency level because appropriations might be made, not to specific entities, but to budget accounts, and then allocated for specified purposes. The degree of transparency in reporting funding levels for disaster relief varies tremendously among federal entities. As an example, Congress requires the Federal Emergency Management Agency (FEMA) to submit monthly status reports on the Disaster Relief Fund (DRF). The DRF is FEMA's disaster assistance account. The DRF is used to fund existing recovery projects (including reimbursements to other federal agencies for their work) and provide funding for future emergencies and disasters as needed. The DRF reports must detail obligations, allocations, and expenditures for Hurricanes Katrina, Rita, and Wilma. This requirement has not been extended to other agencies, and scant data exist, particularly on a state-by-state basis, on other federal funding for emergencies and major disasters. Appropriations may be subject to transfers or rescissions after enactment of appropriations statutes. It is possible that such emendations to the initial appropriations have not been identified in this research. ", "In addition to the above caveats, it should also be noted that there may have been funding changes since this report was originally published in 2013 that are not represented in this updated version. In some cases, additional obligations may have been provided and in other cases some funding may have been recouped or otherwise transferred. The funding information in this report should therefore be interpreted as illustrative as opposed to definitive, and used with appropriate caution."], "subsections": []}, {"section_title": "Section I: Summary of Gulf Coast Disaster Supplemental Appropriations", "paragraphs": [" Table 1 presents data on the appropriations enacted after Hurricanes Katrina, Rita, Wilma, Gustav, and Ike from FY2005 to FY2009, by federal entity and subentity, when possible and applicable. As mentioned earlier, in many cases funding for disaster relief is appropriated for multiple incidents. Therefore, Table 1 may include data on appropriations that also provided funding for non-Gulf Coast incidents. Some appropriations designated for a range of disasters were excluded, however, in an attempt to avoid artificially inflating the amount of funding directed to the Gulf Coast for hurricane relief.", "Since FY2005, at least 10 appropriations bills have been enacted to address widespread destruction caused by the 2005 and 2008 Gulf Coast hurricanes. These appropriations consisted of eight emergency supplemental appropriations acts, one reconciliation act, and one continuing appropriations resolution. In addition to these statutes that specifically identify the hurricanes or the Gulf Coast states, it is likely that regular appropriations legislation also provided assistance to the Gulf Coast. Because these statutes did not specify that they were providing such assistance, regular appropriations are not included in Table 1 ."], "subsections": []}, {"section_title": "Section II. Agency-Specific Information on Gulf Coast Hurricane Federal Assistance", "paragraphs": ["In the course of this research, CRS identified 11 federal departments, 4 federal agencies (or other entities), and numerous subentities, programs, and activities that supplied roughly $121.7 billion in federal assistance to the Gulf Coast states after the major hurricanes of 2005 (Katrina, Rita, and Wilma) and 2008 (Gustav and Ike). Section II provides information on the most significant programs, or categories of programs, through which the aid was provided. Each narrative contains a summary of activities of each federal entity providing disaster relief. When possible, the information is presented in tabular form and is disaster and state specific. Unless otherwise specified, all figures are stated in nominal dollars.", "As mentioned earlier, the data in Section II may not correspond to the emergency funds appropriated by Congress for hurricane relief purposes specified in Section I. Reasons for the difference include the following:", "the tables in Section II present information from a variety of funding measures, including obligations, allocations, and expenditures; some funds made available may have been reallocated or deobligated from other purposes; and money from accounts that did not terminate at the end of a fiscal year (known as no-year accounts) may have been allocated to the Gulf Coast states."], "subsections": [{"section_title": "Department of Agriculture21", "paragraphs": ["The U.S. Department of Agriculture (USDA) provides a variety of disaster assistance for hurricanes and other natural disasters. For the hurricanes covered in this report, the bulk of the department's funding has been disaster payments to producers who suffered production losses and funding for land rehabilitation programs for cleanup and restoration projects, primarily under P.L. 109-234 and through other authorities. The total USDA budget authority was over $1.0 billion for disaster relief following Hurricanes Katrina, Rita, and Wilma ( Table 2 ). For these three hurricanes, USDA also paid an additional $112 million in farm disaster benefits to farmers in the Gulf States under various Farm Service Agency indemnity and grant programs, using funds allocated from USDA's \"Section 32\" Program (see \" Farm Service Agency \" section below). ", "Hurricane-related support by individual agency for the 2005 and 2008 hurricanes is described in separate sections below. State-specific data are provided where available and are current as of the dates cited."], "subsections": [{"section_title": "Agricultural Research Service", "paragraphs": ["The Agricultural Research Service (ARS) is USDA's chief scientific research agency. Under P.L. 109-234 , USDA received funding for cleanup and salvage efforts at the ARS facility in Poplarville, MS, and the Southern Regional Research Center in New Orleans, LA. Total budget authority was $39 million for the 2005 hurricanes provided under P.L. 109-234 and through reallocations from existing funds."], "subsections": []}, {"section_title": "Farm Service Agency", "paragraphs": ["The mission of the Farm Service Agency (FSA) is to serve farmers, ranchers, and agricultural partners through the delivery of agricultural support programs. Besides administering general farm commodity programs, FSA administers disaster payments for crop and livestock farmers who suffer losses from natural disasters. Following the 2005 hurricanes, producer benefits were provided under five new programs created by USDA for tropical fruit, citrus, sugarcane, nursery crops, fruits and vegetables, livestock death, feed losses, and dairy production and spoilage losses. These USDA-created programs were the Hurricane Indemnity Program (HIP), Livestock Indemnity Program (LIP), Feed Indemnity Program (FIP), and an Aquaculture Grant Program (AGP). Payments under the previously established Tree Indemnity Program (TIP) were provided to eligible owners of commercially grown fruit trees, nut trees, bushes, and vines producing annual crops that were lost or damaged. ", "Total outlays for 2005 hurricanes to the Gulf States under the aforementioned five programs were $132 million under P.L. 109-234 (see Table 2 ) and $112 million for four programs under \"Section 32\" (see Table 3 for Section 32 data). Section 32 is a permanent appropriation (originating from P.L. 74-320) that supports a variety of USDA activities, including disaster relief, federal child nutrition programs, and surplus commodity purchases. ", "Following Hurricanes Gustav and Ike in 2008, payments were provided to qualifying producers under five nationwide agricultural disaster programs authorized in the Food, Conservation, and Energy Act of 2008 ( P.L. 110-246 , 2008 farm bill). Under the largest disaster program, Supplemental Revenue Assistance Payments Program (SURE), the combined payments for Alabama, Florida, Louisiana, Mississippi, and Texas totaled $285 million in 2008 for a variety of natural disaster losses, including hurricane damage ( Table 4 ). Payments for these states under the other four programs (three livestock-related programs and the Tree Assistance Program (TAP)) were approximately $66 million.", "FSA also administered two land rehabilitation disaster programs: (1) the Emergency Forestry Conservation Reserve Program (EFCRP), which compensated private, nonindustrial forest landowners who experienced losses from hurricanes in calendar year 2005, for temporarily retiring their land; and (2) the Emergency Conservation Program (ECP), which provides emergency funding and technical assistance for farmers and ranchers to rehabilitate farmland damaged by natural disasters. ", "For the 2005 hurricanes, Congress provided $82 million in budget authority for EFCRP and $84.7 million in budget authority for ECP. Of the $84.7 million in budget authority for ECP, FSA obligated over $70 million. Previously unobligated funds from 2005 hurricane recovery efforts were reprogrammed in 2009 under P.L. 111-32 to be used for then current disasters, including hurricanes. On July 14, 2009, USDA announced $71 million in ECP funding, which included the 2005 reprogrammed funds, for repairing farmland damaged by natural disasters, including the hurricanes that occurred in 2008. Of the five hurricane-affected states, Texas received the largest allocation ($11 million) to address 2008 hurricane restoration efforts."], "subsections": []}, {"section_title": "Food and Nutrition Service30", "paragraphs": ["The Food and Nutrition Service (FNS) administers several programs that are crucial in hurricane relief efforts. These include the Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamp Program (FSP)), child nutrition programs (e.g., school meals programs), and federally donated food commodities delivered through relief organizations. Existing laws authorize USDA to change eligibility and benefit rules to facilitate emergency aid. Disaster FSP benefits provided approximately $1 billion worth of support directly due to Hurricanes Katrina, Rita, Wilma, Gustav, and Ike. Assistance provided by FSP (now, SNAP) and the child nutrition programs required no additional appropriations because the benefits are treated as entitlements.", "Other than a small one-time increase in appropriations, in P.L. 109-148 , to replenish some commodity stocks used for hurricane-relief purposes, no significant action was taken for hurricane relief or to pay for commodity distribution costs. This is because funding and federally provided food commodities were generally available without a need for a large appropriation."], "subsections": []}, {"section_title": "Natural Resources Conservation Service", "paragraphs": ["The Natural Resources Conservation Service (NRCS) assists private land owners with conserving soil, water, and other natural resources. Following natural disasters, NRCS works with FEMA, state and federal agencies, and local units of government to conduct postdisaster cleanup and restoration projects. NRCS administers the Emergency Watershed Protection (EWP) Program, which assists landowners and operators in implementing emergency recovery measures for slowing runoff and preventing erosion to relieve imminent hazards to life and property created by a natural disaster that causes a sudden impairment of a watershed. In the wake of 2005 and 2008 hurricane events, NRCS staff also assessed the demand and requirements for the disposal of animal carcasses, through authority delegated by FEMA. As of November 29, 2012, NRCS had obligated approximately $300 million for disaster relief stemming from these hurricanes. State EWP data for the 2005 and 2008 hurricanes are provided in Table 5 below."], "subsections": []}, {"section_title": "Forest Service34", "paragraphs": ["The Forest Service (FS) administers programs for protecting and managing the natural resources of the National Forest System (NFS, primarily national forests and national grasslands) and for assisting states and nonindustrial private forestland owners in protecting and managing the natural resources of nonfederal forestlands. Through its State and Private Forestry (SPF) program, the FS provides financial and technical assistance, typically through state forestry agencies, to nonfederal landowners to restore forests damaged by hurricanes (and other disasters). The state agencies are authorized to use such funds in numerous ways, such as assisting landowners to clear damaged trees and to plant new stands on cleared sites. While emergency and supplemental funding is sometimes enacted for natural disasters (e.g., hurricanes), the funding often is expended through ongoing, existing programs, and commonly cannot be distinguished from regular appropriations for these purposes (i.e., protecting and managing NFS lands and resources and assisting nonfederal landowners in protecting and managing their forests). ", "Funding for the FS to conduct work after a natural disaster can be categorized generally as response efforts and recovery efforts. Response tasks are identified through the National Response Framework (NRF), administered by FEMA, which grants the FS certain responsibilities (e.g., firefighting) to coordinate during a presidentially declared emergency or major disaster. The FS reports it spent approximately $77 million for Hurricanes Katrina, Rita, and Wilma, respectively, on response efforts in FS region 8 (state-level data were not available). The FS estimates it spent a total of $2.5 million on response efforts for Hurricane Gustav ($1.4 million in Alabama, $0.9 million in Louisiana, $0.1 million in Mississippi, and $0.1 million in Texas). The FS reports it spent a total of $2.1 million on response efforts for Hurricane Ike (all funding spent in Texas).", "Although the FS does not have the authority for specific programs to grant recovery assistance to states, the FS can use its regular program authorities to assist state and private landowners broadly following a disaster. For example, after a hurricane, the FS may receive supplemental funding under the state and private forestry (SPF) programs appropriation to conduct recovery work via a SPF program. Eight existing FS programs were used to assist the states following Hurricanes Katrina, Rita, Wilma, Gustav, and Ike (see Table 6 ). The FS may also grant funding for the FSA Emergency Forest Restoration Program. FS recovery funding amounts by state for the 2005 hurricanes (Katrina, Rita, and Wilma) and 2008 hurricanes (Gustav and Ike) are provided in Table 7 . "], "subsections": []}, {"section_title": "Rural Housing Service", "paragraphs": ["The Rural Housing Service (RHS) provides loan and grant assistance for single-family and multifamily housing. RHS also administers the Community Facilities loan and grant program to provide assistance to communities for health facilities, fire and police stations, and other essential community facilities. Following the hurricanes, RHS provided housing relief to residents of the affected areas through payment moratoriums of six months, a three-month moratorium on initiating foreclosures under the single family guaranteed homeownership loans, loan forgiveness, loan reamortization, and refinancing. In addition, RHS provided temporary rental assistance to displaced family farm labor housing tenants. Assistance was provided for single-family homeowners (e.g., Section 502 loans), multifamily housing owners (e.g., Section 504 loans), and rental housing assistance (Section 521). Under P.L. 109-234 , total budget authority for RHS programs for the 2005 hurricanes was $128 million.", "The Disaster Relief and Recovery Supplemental Appropriations Act of 2008 ( P.L. 110-329 ) provided funding for activities under the Rural Development Mission Area for relief and recovery from natural disasters (including hurricanes) during 2008. The act specifically provided $38 million for activities of the Rural Housing Service for areas affected by Hurricanes Katrina and Rita."], "subsections": []}, {"section_title": "Rural Utilities Service", "paragraphs": ["The Rural Utilities Service (RUS) is responsible for administering electric, telecommunications, and water assistance programs that help finance the infrastructure necessary to improve the quality of life and promote economic development in rural areas. Hurricane relief included grants for rebuilding, repairing, or otherwise improving water and waste disposal systems in designated disaster areas. Increased technical assistance under the Circuit Rider program was also provided to rural water districts. With the approval of lenders, RUS also suspended preauthorized debit payments for water and waste disposal loan guarantees for six months. Under permanent authority of P.L. 92-419, total budget authority for RUS programs for the 2005 hurricanes was $53 million."], "subsections": []}]}, {"section_title": "Department of Commerce", "paragraphs": [], "subsections": [{"section_title": "National Oceanic and Atmospheric Administration40", "paragraphs": ["The federal government may provide disaster relief to the fishing industry when there is a commercial fishery failure. A commercial fishery failure occurs when fishermen endure hardships resulting from fish population declines or other disruptions to the fishery. Two statutes, the Interjurisdictional Fisheries Act (16 U.S.C. \u00a74107) and the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. \u00a71864a and \u00a71864), provide the authority and requirements for fishery disaster assistance. Under both statutes, a request for a fishery disaster determination is generally made by the governor of a state, or by a fishing community, although the Secretary of Commerce may also initiate a review at his or her own discretion. If the Secretary determines that a fishery disaster has occurred, Congress may appropriate funds for disaster assistance, which are administered by the Secretary. Funding is usually distributed as grants to states or regional marine fisheries commissions by the National Oceanic and Atmospheric Administration (NOAA) of the Department of Commerce.", "Since 2005, Congress has appropriated almost $260 million of hurricane disaster relief to the Gulf of Mexico fishing industry (see Table 8 ). Of this total, $213 million was appropriated for damages and disruptions caused by Hurricanes Katrina and Rita ( P.L. 109-234 and P.L. 110-28 ). Assistance provided for the direct needs of fishermen and related businesses, and supported related fisheries programs such as oyster bed and fishery habitat restoration, cooperative research, product marketing, fishing gear studies, and seafood testing. Many of these activities such as habitat restoration are ongoing management priorities for these fisheries. For damage caused by Hurricanes Gustav and Ike, $47 million was appropriated to restore damaged oyster reefs, remove storm debris, and rebuild fishing infrastructure in Texas and Louisiana ( P.L. 110-329 ). In addition, $85 million was provided to NOAA for scanning, mapping, and removing marine debris; repairing and reconstructing the NOAA Science Center; procuring a replacement emergency response aircraft and sensor package; and other activities ( P.L. 109-234 and P.L. 110-28 )."], "subsections": []}, {"section_title": "Economic Development Administration Economic Adjustment Assistance Program41", "paragraphs": ["The Economic Development Administration (EDA) was created with the passage of the Public Works and Economic Development Act of 1965 (PWEDA), P.L. 89-136, (42 U.S.C. \u00a73121, et. al) to provide assistance to communities experiencing long-term economic distress or sudden economic dislocation. Among the programs administered by EDA is the Economic Adjustment Assistance (EAA) program. The PWEDA (42 U.S.C. \u00a73149(c)(2)) authorizes EDA to provide EAA funds for", "disasters or emergencies, in areas with respect to which a major disaster or emergency has been declared under the Robert T. Stafford Disaster Relief and Emergency Assistance Act for post-disaster economic recovery. ", "In addition to funding disaster-recovery efforts using Emergency Assistance Act (EAA) funds available under its regular appropriation, 42 U.S.C. \u00a73233 authorizes the appropriation of such sums as are necessary to fund EAA disaster recovery activities authorized under 42 U.S.C. \u00a73149(c)(2). Funds appropriated under 42 U.S.C. \u00a73233 may be used to cover up to 100% of the cost of a project or activity authorized under 42 U.S.C. \u00a73149(c)(2). Funds appropriated under a regular appropriations act may be used to cover only 50% of the cost of disaster recovery activities. However, the authorizing statute also grants EDA the authority to increase the federal share of a project's cost to 100%. "], "subsections": [{"section_title": "Disaster Assistance Grants", "paragraphs": ["Presidentially declared disasters or emergencies are one of five specific qualifying events eligible for EAA funding assistance. EAA grants are competitively awarded and may be used to help finance public facilities; public services (including job training and counseling) business development (including funding a revolving loan fund (RLF); planning; and technical assistance that support the creation or retention of private sector jobs. Regions submitting an application for EAA disaster assistance must demonstrate a clear connection between the proposed project and disaster recovery efforts. EAA disaster grants can cover 100% of a project's cost.", "In order to qualify for assistance, the Secretary of Commerce must find that a proposed project or activity will help the area respond to a severe increase in unemployment, or economic adjustment problems resulting from severe changes in economic conditions. EAA regulations also require an area seeking such assistance to prepare or have in place a Comprehensive Economic Development Strategy (CEDS) outlining the nature and level of economic distress in the region, and proposed activities that could be undertaken to support private-sector job creation or retention efforts in the area. "], "subsections": []}, {"section_title": "Funding Narrative", "paragraphs": ["Congress did not provide EAA supplemental appropriations for disaster recovery activities related to Hurricanes Katrina, Rita, or Wilma. However, EDA allocated $24.2 million from its regular appropriations in response to the hurricanes of 2005. In response to Hurricanes Gustav and Ike and other disasters occurring in 2008, Congress appropriated $400 million in EAA disaster supplemental funding when it approved P.L. 110-329 . It also appropriated an additional $100 million in supplemental EAA disaster assistance without limiting it to disasters occurring in a specific year when it passed the Supplemental Appropriations Act of 2008, P.L. 110-252 .", "Of the $500 million appropriated for EAA disaster grants in 2008, EDA allocated, based on its 2010 annual report to Congress, the latest data available, a total of $63.8 million to 33 recipients in five of the six states identified in this report. "], "subsections": []}]}]}, {"section_title": "Department of Defense (Civil)44", "paragraphs": [], "subsections": [{"section_title": "Army Corps of Engineers", "paragraphs": [], "subsections": [{"section_title": "Civil Works Program", "paragraphs": ["The U.S. Army Corps of Engineers (Corps) is a unique federal agency in the Department of Defense, with military and civilian responsibilities. Under its civil works program, the Corps plans, builds, operates, and maintains a wide range of water resources facilities, including hurricane protection and flood damage reduction projects, and performs emergency actions for flood and coastal emergencies. ", " Table 9 shows, for each Gulf Coast state, the direct appropriations that the Corps received for its water resources work related to the five hurricanes. According to data the Corps provided to CRS, of the total $15.6 billion appropriated, more than $11.2 billion has been obligated."], "subsections": []}]}]}, {"section_title": "Department of Defense (Military) 45", "paragraphs": [], "subsections": [{"section_title": "Military Personnel", "paragraphs": ["The Military Personnel accounts fund military pay and allowances, permanent change of station travel, retirement and health benefit accruals, uniforms, and other personnel costs. For the hurricane response efforts, funds have been used primarily to pay per diem to DOD personnel evacuated from affected areas, for the pay and allowances of activated Guard and Reserve personnel supporting the hurricane relief effort, and for increased housing allowances to compensate for housing rate increases in hurricane-affected areas. Military personnel funds obligated by the Alabama, Florida, Texas, Louisiana, and Mississippi National Guard are detailed in Table 10 . Data on the obligation of other Military Personnel funds, by state, were not readily available. "], "subsections": []}, {"section_title": "Operations and Maintenance", "paragraphs": ["The Operations and Maintenance (O&M) accounts fund training and operation costs, pay for civilians, maintenance service contracts, fuel, supplies, repair parts, and other expenses. For the hurricane response efforts, funds have been used primarily to repair facilities, establish alternate operating sites for displaced military organizations, repair and replace equipment, remove debris, clean up hazardous waste, repair utilities, evacuate DOD personnel from affected areas, and support the operations of activated Army and Air National Guard units. O&M funds obligated by the Alabama, Florida, Texas, Louisiana, and Mississippi National Guard are detailed in Table 10 . Data on the obligation of other O&M funds, by state, were not readily available. "], "subsections": []}, {"section_title": "Procurement", "paragraphs": ["The Procurement accounts generally fund the acquisition of aircraft, ships, combat vehicles,\u00a0satellites, weapons, ammunition, and other capital equipment. For the hurricane response efforts, $2.85 billion was appropriated, of which $2.5 billion was used primarily to pay for extraordinary shipbuilding and ship repair costs, including not only damage to ships under construction and\u00a0replacement of equipment and materials, but also additional overhead and labor costs resulting from schedule delays due to the hurricane damage to shipyards, primarily Avondale in New Orleans, Louisiana, and Ingalls in Pascagoula, Mississippi. \u00a0These funds also included $140 million to\u00a0improve the infrastructure at damaged shipyards. Budget authority, obligations, and outlays for procurement, allocated by state for Alabama, Florida, Texas, Louisiana, and Mississippi are detailed in Table 10 . "], "subsections": []}, {"section_title": "Research, Development, Test, and Evaluation", "paragraphs": ["The Research, Development, Test, and Evaluation (RDT&E) accounts fund modernization efforts by way of basic and applied research, creation of technology-demonstration devices, developing prototypes, and other related costs. For the hurricane response efforts, funds have been used to replace damaged test equipment and repair damaged test facilities. Data allocating RDT&E funds by state were not readily available. "], "subsections": []}, {"section_title": "Military Construction (MILCON) and Family Housing", "paragraphs": ["The MILCON accounts fund the acquisition, construction, installation, and equipment of temporary or permanent public works, military installations, facilities, and real property. The Family Housing Construction accounts fund costs associated with the construction of military family housing (including acquisition, replacement, addition, expansion, extension, and alteration), while the Family Housing O&M accounts fund expenses such as debt payment, leasing, minor construction, principal and interest charges, and insurance premiums on military family housing. For the hurricane response efforts, $1.4 billion was appropriated to finance the planning, design, and construction of military facilities and infrastructure that were damaged or destroyed by hurricane winds and water. Of this, $918 million was dedicated to military operations and training facilities, while an additional $460 million was appropriated for family housing construction and family housing O&M to rebuild destroyed, damaged, or new housing units and a housing office. Budget authority for MILCON and family housing construction allocated to the states of Alabama, Florida, Texas, Louisiana, and Mississippi is detailed in Table 10 . Of the $1.4 billion appropriated, $1.2 billion could be allocated to the five specified states, while $167 million was devoted to planning and design activities not associated with specific locations."], "subsections": []}, {"section_title": "Management Funds", "paragraphs": ["This category includes the Defense Working Capital Fund, the National Defense Sealift Fund, and a commissary fund. For the hurricane response efforts, these funds have been used primarily to rebuild and repair damaged commissaries, replace commissary inventories, and cover transportation and contingency costs of the Defense Logistics Agency. Data allocating these funds by state were not readily available."], "subsections": []}, {"section_title": "Other Department of Defense Programs", "paragraphs": ["This category includes the Defense Health Program (DHP) and the Office of the Inspector General (OIG). The DHP title funds medical and dental care to current and retired members of the Armed Forces, their family members, and other eligible beneficiaries. For the hurricane response efforts, these funds have been used primarily to pay for costs associated with displaced beneficiaries seeking care from private-sector providers rather than at military health care facilities, to pay the health care costs of activated Guard and Reserve personnel, and to replace medical supplies and equipment. Data allocating DHP funds by state were not readily available. Of the $589,000 appropriated for the OIG, $263,000 was provided to replace and repair damaged equipment in the Inspector General's office in Slidell, LA, and to cover relocation costs. "], "subsections": []}]}, {"section_title": "Department of Education48", "paragraphs": [], "subsections": [{"section_title": "Elementary and Secondary Education", "paragraphs": [], "subsections": [{"section_title": "Program Authorities49", "paragraphs": ["Following the Gulf Coast hurricanes, funding to support elementary and secondary schools affected by Hurricane Katrina or Hurricane Rita was provided through three public laws: P.L. 109-148 ($1.4 billion), P.L. 109-234 ($235 million), and P.L. 110-28 ($30 million). ", "P.L. 109-148 created two new programs: (1) Immediate Aid to Restart School Operations ($750 million) and (2) Temporary Impact Aid for Displaced Students ($645 million), which were specifically designed to address needs resulting from the hurricanes. It also added $5 million to the McKinney-Vento Homeless Assistance Act to serve homeless children and youth who had been displaced by the Gulf Coast hurricanes. P.L. 109-234 provided additional funding of $235 million for the Temporary Impact Aid for Displaced Students enacted under P.L. 109-148 . P.L. 110-28 appropriated $30 million for elementary and secondary schools affected by the hurricanes through the Hurricane Educator Assistance program to assist in recruiting, retaining, and compensating staff in those schools. ", "Congress then appropriated an additional $15 million through P.L. 110-329 to provide support to local educational agencies (LEAs) whose enrollment of homeless students increased as a result of hurricanes, including Hurricanes Gustav and Ike, floods, or other natural disasters during 2008. Congress subsequently appropriated $12 million through P.L. 111-117 for the Gulf Coast Recovery Initiative to improve education in areas affected by Hurricanes Katrina, Rita, or Gustav. A brief description of each of these programs and the amount of funding each received is presented below. Table 11 details how much funding various states received under each of the programs."], "subsections": []}, {"section_title": "Immediate Aid to Restart School Operations", "paragraphs": ["The Immediate Aid to Restart School Operations provided support for LEAs and nonpublic schools in Louisiana, Mississippi, Alabama, and Texas to restart school operations, reopen schools, and re-enroll students. P.L. 109-148 provided $750 million for this program. This program is no longer authorized."], "subsections": []}, {"section_title": "Temporary Emergency Impact Aid for Displaced Students", "paragraphs": ["The Temporary Emergency Impact Aid for Displaced Students program provided federal funding to assist schools in enrolling students who had been displaced by the Gulf Coast hurricanes. Funds were made available to LEAs and schools based on the number of displaced students that enrolled, irrespective of whether the school in which parents chose to enroll their child was a public or nonpublic school. P.L. 109-148 appropriated $645 million for this program. Subsequently, P.L. 109-234 appropriated an additional $235 million for this program, bringing the total program appropriation to $880 million. Portions of the funds appropriated were provided to 49 states and the District of Columbia based on the number of displaced students each enrolled. Louisiana, Texas, and Mississippi received the largest proportion of funds. This program is no longer authorized."], "subsections": []}, {"section_title": "Hurricane Educator Assistance Program", "paragraphs": ["The Hurricane Educator Assistance Program made federal funding available to Louisiana, Mississippi, and Alabama to use for recruiting, retaining, and compensating school staff who committed to work for at least three years in public elementary and secondary schools affected by Hurricanes Katrina or Rita. States were required to apply to receive funds, and the funds were allocated based on the number of public elementary and secondary schools that were closed for 19 days or more from August 29, 2005, through December 31, 2005. P.L. 110-28 provided $30 million for these purposes to Louisiana and Mississippi only. This program is no longer authorized."], "subsections": []}, {"section_title": "McKinney-Vento Homeless Assistance Act", "paragraphs": ["The McKinney-Vento Homeless Assistance Act provides funding to states to ensure that homeless children and youth are provided equal access to a free, appropriate public education in the same manner as provided other children and youth. P.L. 109-148 appropriated $5 million for this program for LEAs serving homeless children and youth who had been displaced by Hurricane Katrina or Hurricane Rita. Eight states received funding under this program, with the largest grants provided to Texas and Louisiana. While the McKinney-Vento Homeless Assistance Act continues to provide funding related to the education of homeless students, the provisions enacted specifically in response to the Gulf Coast hurricanes are no longer authorized."], "subsections": []}, {"section_title": "Homeless Education Disaster Assistance55", "paragraphs": ["P.L. 110-329 provided $15 million to LEAs whose enrollment of homeless students increased as a result of hurricanes, floods, or other natural disasters that occurred during 2008 and for which the President declared a major disaster under Title IV of the Stafford Act. ED was required to distribute the funds through the McKinney-Vento Homeless Assistance Act based on demonstrated need. These funds provided assistance to LEAs in Gulf Coast states affected by Hurricanes Gustav and Ike, as well as LEAs affected by natural disasters in other parts of the nation, such as flooding in the Midwest. The majority of the funds were provided to LEAs in Louisiana and Texas. This program is no longer authorized."], "subsections": []}, {"section_title": "Gulf Coast Recovery Initiative", "paragraphs": ["P.L. 111-117 provided $12 million for competitive awards to LEAs located in counties in Louisiana, Mississippi, and Texas that were designated by FEMA as counties eligible for individual assistance as a result of damage caused by Hurricanes Katrina, Rita, or Gustav. The funds had to be used to improve education in areas affected by these hurricanes and had to be used for activities such as replacing instructional materials and equipment; paying teacher incentives; modernizing, renovating, or repairing school buildings; supporting charter school expansion; and supporting extended learning time activities. The majority of the funds were provided to LEAs in Louisiana. This program is no longer authorized."], "subsections": []}]}, {"section_title": "Higher Education", "paragraphs": [], "subsections": [{"section_title": "Program Authorities", "paragraphs": ["Appropriations to support institutions of higher education (IHEs) following the Gulf Coast hurricanes of 2005 were provided through P.L. 109-148 ($200 million), P.L. 109-234 ($50 million), and P.L. 110-28 ($30 million). P.L. 110-329 subsequently provided an additional $15 million for IHEs in areas affected by hurricanes, including Hurricanes Gustav and Ike, floods, or other natural disasters in 2008. Table 11 details the amount of funding allocated to various states under these provisions. "], "subsections": []}, {"section_title": "Hurricane Education Recovery", "paragraphs": ["Of the $200 million provided under P.L. 109-148 for higher education, $95 million was specifically appropriated for the Louisiana Board of Regents, and $95 million was specifically appropriated for the Mississippi Institutes of Higher Learning for hurricane education recovery from the 2005 Gulf Coast hurricanes. Subsequently, P.L. 109-234 and P.L. 110-28 provided additional funds for hurricane education recovery under the Fund for the Improvement of Postsecondary Education (FIPSE), authorized by Title VII of the Higher Education Act, to assist IHEs adversely affected by the 2005 Gulf Coast hurricanes. Under both laws, funds were provided to help defray the expenses incurred by IHEs that were forced to close, relocate, or reduce their activities due to hurricane damage. Under P.L. 110-28 , IHEs also were permitted to use these funds to make grants to students enrolled at these institutions on or after July 1, 2006. A total of $80 million was provided for IHEs affected by Hurricane Katrina or Hurricane Rita under the FIPSE for hurricane education recovery. The majority of funds appropriated for hurricane education recovery were provided to Mississippi and Louisiana. These activities are no longer authorized."], "subsections": []}, {"section_title": "Funds to Assist IHEs Enrolling Displaced Students", "paragraphs": ["The remaining $10 million appropriated under P.L. 109-148 for higher education disaster relief was provided to assist IHEs with unanticipated costs associated with the enrollment of students displaced as a result of Hurricane Katrina or Hurricane Rita. Overall, 99 IHEs in 24 states and the District of Columbia received funds related to the enrollment of displaced higher education students. Louisiana and Texas received the largest state grants. This program is no longer authorized."], "subsections": []}, {"section_title": "Higher Education Disaster Relief58", "paragraphs": ["P.L. 110-329 provided an additional $15 million for IHEs that were located in an area affected by hurricanes, floods, and other natural disasters that occurred during 2008 and for which the President declared a major disaster under Title IV of the Stafford Act. Funds provided through the Higher Education Disaster Relief program could be used to defray the expenses incurred by IHEs that were forced to close or relocate or whose operations were adversely affected by the natural disaster, and to provide grants to students who attended such IHEs for academic years beginning on or after July 1, 2008. The majority of these funds were provided to Louisiana and Texas for hurricane-related education disaster assistance related to Hurricanes Gustav and Ike. This program is no longer authorized."], "subsections": []}, {"section_title": "Funding Summary", "paragraphs": ["Following the Gulf Coast hurricanes of 2005, Congress appropriated $1.943 billion for ED to provide support to LEAs, schools, and IHEs in the Gulf Coast region and nationwide that were affected by Hurricane Katrina or Hurricane Rita. Subsequently, FY2009 supplemental appropriations provided an additional $30 million for education-related disaster relief for LEAs and IHEs affected by natural disasters during the 2008 calendar year. Most recently, FY2010 appropriations provided an additional $12 million for LEAs located in specific areas affected by Hurricanes Katrina, Rita, or Gustav. Of the $1.985 billion provided for education-related disaster relief and administered by ED since the Gulf Coast hurricanes, nearly all of these funds ($1.826 billion, 92%) were provided to Alabama, Florida, Louisiana, Mississippi, Tennessee, and Texas in response to the 2005 and 2008 hurricanes. Table 11 details how much of this funding was allocated to each of these states for each of the programs discussed in this section."], "subsections": []}]}]}, {"section_title": "Department of Health and Human Services", "paragraphs": [], "subsections": [{"section_title": "Administration for Children and Families62", "paragraphs": [], "subsections": [{"section_title": "Head Start", "paragraphs": ["The federal Head Start program, authorized at 42 U.S.C. \u00a79801 et seq., provides comprehensive early childhood development services to low-income children. The program seeks to promote school readiness by enhancing the social and cognitive development of children through the provision of educational, health, nutritional, social, and other services. Federal Head Start funds are provided directly to local grantees (e.g., public and private nonprofit and for-profit agencies) rather than through states. Most children served in Head Start programs are three- and four-year-olds, but services are authorized for children from birth through compulsory school age. ", "In December 2005, Congress appropriated $90 million in supplemental Head Start funds for the costs of serving displaced children and the renovation of Head Start facilities affected by the Gulf Coast hurricanes of 2005. The Department of Health and Human Services (HHS) Administration for Children and Families (ACF) reported awarding approximately $74 million of the total appropriation based on grantee requests; the remaining funds ($16 million) reverted to the U.S. Treasury Department. The majority of the funds awarded to grantees ($72.5 million, or 98% of the $74 million) went to Head Start programs in Alabama, Florida, Louisiana, Mississippi, and Texas (see Table 12 ). "], "subsections": []}, {"section_title": "Social Services Block Grant", "paragraphs": ["The Social Services Block Grant (SSBG), permanently authorized by 42 U.S.C. \u00a71397 et seq., is a flexible source of funds that states use to support a wide variety of social services activities, ranging from child care to special services for the disabled. States have broad discretion over the use of SSBG funds, which are typically allocated to states according to a population-based formula. ", "In December 2005, Congress appropriated $550 million in supplemental SSBG funds for necessary expenses related to the consequences of the Gulf Coast hurricanes of 2005. ACF distributed these funds based on the number of FEMA registrants from Hurricanes Katrina, Rita, and Wilma, as well as the percentage of individuals in poverty in each state. Funds were allocated to all states that took in evacuees, not just the states that were directly affected. The appropriations language expanded potential services for which these funds could be used to include \"health services (including mental health services) and for repair, renovation, and construction of health facilities (including mental health facilities).\"", "In September 2008, Congress appropriated $600 million for necessary expenses resulting from major disasters occurring in 2008, including hurricanes, floods, and other natural disasters, as well as expenses resulting from Hurricanes Katrina and Rita. ACF reserved a portion of these funds for states affected by major disasters of 2008 and a portion for states facing ongoing needs as a result of Hurricanes Katrina and Rita. ACF distributed both sets of funds based on each state's share of FEMA registrants, as well as the overall population for each state. Like the previous supplemental, the 2008 supplemental appropriation again expanded potential services for which SSBG funds could be used, this time to include \"health services (including mental health services) and for repair, renovation, and construction of health facilities (including mental health facilities), child care centers, and other social services facilities.\"", "Combined, these two supplemental appropriations provided $1.150 billion for the SSBG. According to ACF, the bulk of these funds\u2014$944 million, or 82% of the $1.150 billion\u2014were allocated to Alabama, Florida, Louisiana, Mississippi, and Texas (see Table 12 ). ", "Typically, SSBG funds are subject to a two-year expenditure period\u2014meaning that funds must be spent by the end of the fiscal year subsequent to the fiscal year in which they were allotted to states. However, most states had not spent all of their funds from either supplemental within the standard two-year period and, in both cases, Congress passed legislation extending the spending deadline for these supplemental funds. According to data from ACF, states had spent about $521 million (95%) of the 2005 $550 million supplemental before the extended deadline of September 30, 2009. ACF data indicate that states had spent about $522 million (87%) of the 2008 $600 million supplemental before the extended expenditure deadline of September 30, 2011. Unspent funds were to revert to the U.S. Treasury.", "According to the FY2009 SSBG annual report, states spent supplemental funds on 28 of the 29 SSBG service categories defined in federal regulation, including education and training, counseling services, and health-related services. The FY2009 report indicated that most supplemental funds were spent in the \"other services\" category, including expenditures for certain construction and renovation costs, as well as costs related to certain health and mental health services. Notably, the FY2009 annual report only includes expenditures from the December 2005 supplemental appropriation. "], "subsections": []}]}, {"section_title": "Public Health and Medical Assistance75", "paragraphs": [], "subsections": [{"section_title": "DRF-Funded Mission Assignments", "paragraphs": ["The Department of Health and Human Services (HHS) is the coordinating agency for Emergency Support Function 8 (ESF #8), Public Health and Medical Services, under the National Response Framework . The Stafford Act authorizes reimbursements to HHS for many of its emergency or major disaster response activities, including (among others): deployment of operational assets (medical surge and mortuary teams, portable field hospitals, and the Strategic National Stockpile of drugs and medical supplies); disease surveillance; food and water safety activities; and workforce assistance to health departments. Reimbursements to HHS for mission assignments are presented in Table 17 , Table 18 , and Table 19 ."], "subsections": []}, {"section_title": "DRF-Funded Crisis Counseling Program (CCP)", "paragraphs": ["Pursuant to Section 416 of the Stafford Act, the President may provide assistance for the establishment of crisis counseling services in areas affected by declared major disasters. CCP, a program to provide short-term mental health screening, counseling, and referral services in presidentially declared disasters, is jointly administered by FEMA, the Substance Abuse and Mental Health Services Administration (SAMHSA) in HHS, and affected states. Amounts provided to each state for the response to the Gulf Coast hurricanes are displayed in Table 13 ."], "subsections": []}, {"section_title": "Federal Assistance for Health Care", "paragraphs": ["In response to Hurricane Katrina, Congress authorized and appropriated a one-time program of up to $2.1 billion to cover full federal funding of the state match that would normally have been required under the Medicaid and State Children's Health Insurance (CHIP) programs, and the costs of uncompensated care, for eligible individuals from disaster-affected areas. Assistance was provided both to directly affected states and to certain states that hosted evacuees. Funding was also authorized \"to restore access to health care in impacted communities,\" and was provided to stabilize the primary care workforce in three directly affected states: Alabama, Louisiana, and Mississippi. Outlay amounts are presented in Table 14 ."], "subsections": []}, {"section_title": "Appropriations to Existing HHS Accounts", "paragraphs": ["In response to the 2005 hurricanes, Congress provided, in emergency supplemental appropriations for affected areas, $4 million for communications equipment for community health centers, and $8 million for mosquito abatement in affected states. The amounts obligated from this emergency supplemental funding are presented in Table 15 ."], "subsections": []}, {"section_title": "Grants from Existing HHS Accounts", "paragraphs": ["In some cases, funds available in existing HHS accounts were provided for hurricane relief. For example, the Centers for Medicare and Medicaid Services (CMS) Emergency Prescription Assistance Program provided up to $2 million in individual assistance for affected counties in Texas following Hurricane Ike. Also, the HHS Office of Minority Health provided $12 million in grants to minority-serving organizations following Hurricane Katrina. Third, SAMHSA Emergency Response Grants (SERG) provided funds to states for mental health and substance abuse services following Hurricane Katrina. Amounts for SERG grants are presented in Table 13 ."], "subsections": []}]}, {"section_title": "Administrative Waivers", "paragraphs": ["The federal government funds a significant portion of the nation's health care costs, through the Medicare and Medicaid programs, veterans and Indian health care systems, and other activities. In response to the major hurricanes, HHS invoked numerous waiver authorities that allowed state, local, tribal, and private health care providers and facilities affected by the disasters to continue receiving federal health care services and/or reimbursements under altered conditions, such as the use of temporary facilities, the use of volunteer providers, and care provided to individuals not usually eligible. Although these waivers did not provide new funds to disaster-affected areas, they prevented the loss of substantial federal revenues. Several HHS agencies also allowed states to reprogram federal grant funds, including from most of the grants administered by the Centers for Disease Control and Prevention (CDC)."], "subsections": []}, {"section_title": "Public Health Emergency Fund", "paragraphs": ["The Secretary of HHS has authority to use a no-year fund for public health emergencies. However, the fund has not had a balance since the 1990s, so it was not available for the response to the 2005 and 2008 hurricanes."], "subsections": []}]}, {"section_title": "Department of Homeland Security84", "paragraphs": [], "subsections": [{"section_title": "Federal Emergency Management Agency", "paragraphs": [], "subsections": [{"section_title": "Authority", "paragraphs": ["The Stafford Act authorizes the President to issue major disaster or emergency declarations in response to incidents in the United States that overwhelm state and local governments. Section 403(a)(1) of Stafford authorizes the President to direct federal resources to provide assistance essential to meeting immediate threats to life and property resulting from a major disaster. Section 304 of the Stafford Act authorizes the reimbursement of other agencies from funds appropriated to the DRF for services or supplies furnished under the authority of the Stafford Act. "], "subsections": []}, {"section_title": "Program Description", "paragraphs": ["The primary mission of FEMA is to \"reduce the loss of life and property and protect the Nation from all hazards, including natural disasters, acts of terrorism, and other man-made disasters, by leading and supporting the Nation in a risk-based, comprehensive emergency management system of preparedness, protection, response, recovery, and mitigation.\" ", "FEMA provides assistance to states, local governments, tribal nations, individuals and families, and certain nonprofit organizations through the Disaster Relief Fund (DRF). The more significant aid programs authorized under the Stafford Act include the Public Assistance Program (PA); and the Individual and Household Program (IHP), which includes Other Needs Assistance (ONA) and Debris Removal, the Hazard Mitigation Grant Program (HMGP), and Essential Assistance. ", "P.L. 112-175 requires the FEMA Administrator to provide a report by the fifth day of each month on the DRF which includes DRF funding summaries. The DRF report provides funding information by state for the 2005 and 2008 hurricanes. As shown in Table 16 , the DRF report aggregates funding for Hurricanes Katrina, Rita, and Wilma."], "subsections": []}]}, {"section_title": "FEMA Mission Assignments by Federal Entity", "paragraphs": ["Mission assignments are directives from FEMA (on behalf of the requesting state) to other federal agencies to perform specific work in disaster operations on a reimbursable basis. The mission assignment contains information that is used by FEMA management to evaluate requests for assistance from states, other federal agencies, and internal FEMA organizations. Mission assignments are paid out of the DRF through funds appropriated to FEMA rather than funds appropriated directly to the respective agency. Table 17 contains a list of mission assignment funding by entity for Hurricanes Katrina, Wilma, and Rita. Table 18 contains mission assignment data for Hurricane Gustav and Table 19 contains mission assignment funding for Hurricane Ike. As shown in Tables 1 7 , 1 8 , and 19 , mission assignment funding can be assigned directly to an agency, directly to an agency's program/activity, or both."], "subsections": []}]}, {"section_title": "Department of Housing and Urban Development (HUD)97", "paragraphs": [], "subsections": [{"section_title": "Community Development Block Grants", "paragraphs": [], "subsections": [{"section_title": "Program Authority", "paragraphs": ["The Community Development Block Grant (CDBG) program was first authorized as Title I of the Housing and Community Development Act of 1974, P.L. 93-383 , (42 U.S. C. \u00a75301, et al.). "], "subsections": []}, {"section_title": "Program Description", "paragraphs": ["Funds are allocated by formula to states, Puerto Rico, and eligible (entitlement) communities to be used to fund eligible housing, neighborhood revitalization, and economic development activities. After funds are set aside for Indian tribes and insular areas 70% of each year's annual CDBG program appropriation must be allocated to CDBG entitlement communities, including metropolitan cities with populations of 50,000 persons or more, central cities of metropolitan areas, and statutorily defined urban counties. The remaining 30% of appropriated funds are allocated to states for distribution to non-entitlement communities. ", "Eligible activities must meet one of three national objectives. The activity must", "principally benefit low or moderate income persons; aid in preventing or eliminating slums or blight; or address an imminent threat to the health or welfare of residents of an area, including disaster relief, mitigation, and long-term recovery activities.", "In addition, a state or entitlement community grantee must certify that it will expend at least 70% of its CDBG allocation over a three-year period on eligible activities principally benefiting low- and moderate-income persons. ", "In addition to allowing a state or entitlement community to fund disaster-recovery efforts under the CDBG's imminent threat national objective using CDBG regular appropriation, Congress has, at its discretion, appropriated additional supplemental CDBG funds in response to presidentially declared disasters. In addition to appropriating funds for disaster recovery activities, the statute authorizing the CDBG program grants the Department of Housing and Urban Development (HUD) the authority to waive or modify program regulations, except those relating to public notice, fair housing, civil rights, labor standards, environmental review, and the program's low- and moderate-income targeting requirement, when CDBG funds are used to respond to presidentially declared major disasters. ", "Funds are allocated to states and communities to cover unmet needs not covered by state and local efforts, private insurers, and standard federal disaster programs administered by the Federal Emergency Management Agency, the Small Business Administration, and the Army Corps of Engineers. As a condition of funding, grantees are required to submit, for HUDs approval, a disaster recovery plan. "], "subsections": []}, {"section_title": "Funding", "paragraphs": ["In the aggregate, the six states identified in Table 20 were awarded a total of $23.971 billion in CDBG disaster relief assistance to fund disaster relief activities in response to the five hurricanes identified in the table. Nearly 60% of this amount was allocated to Louisiana while Mississippi received approximately 30% of the total. ", "Five of the six states included in Table 20 received a total allocation of $19.672 billion in response to the Gulf Coast hurricanes of 2005. Louisiana received the largest share (75%) of this amount followed by Mississippi (28%), Texas (2.5%), Florida (1%), and Alabama (less than 1%).", "A total of $4.296 billion was awarded to five of six states included in Table 20 to support disaster recovery activities in response to Hurricane Ike. Texas accounted for 71% of the total followed by Louisiana (25%), Tennessee (2%), Florida (1.8%), and Mississippi (less than 1%). "], "subsections": []}]}, {"section_title": "Rental Assistance/Section 8 Vouchers", "paragraphs": ["The Section 8 Housing Choice Voucher program, authorized at 42 U.S.C. \u00a71437f(o), provides portable rent subsidies that low-income families can use to rent housing units offered by private market landlords. Families with vouchers contribute an income-based payment towards their rent (generally equal to 30% of a family's income), and the federal government, through local public housing authorities (PHAs), pays the landlord the difference between the tenant's contribution and the contract rent for the unit.", "Congress provided over $555 million to HUD to provide rental assistance (in the form of Section 8 Housing Choice Vouchers) to families displaced by Hurricanes Katrina and Rita. The first $390 million of that amount was appropriated to HUD to provide temporary rental assistance vouchers to families that were previously assisted by HUD programs, but were displaced by the 2005 hurricanes. ", "Later, HUD was given a mission assignment by FEMA to begin providing rental assistance to all remaining households displaced by the 2005 hurricanes. HUD named this program the Disaster Housing Assistance Program (DHAP), and the cost of the DHAP was covered by FEMA's Disaster Relief Fund. Following Hurricane Ike, FEMA and HUD established another Disaster Housing Assistance Program (DHAP-Ike) for families displaced by that storm, also funded through the DRF under a mission assignment.", "Following the first appropriation, and establishment of the mission assignments, Congress appropriated $85 million for HUD to fund the cost of ongoing, permanent Section 8 rental assistance vouchers for displaced families whose temporary housing assistance under DHAP-Katrina was expiring. Congress later appropriated an additional $80 million to create new Section 8 rental assistance vouchers in the areas affected by Hurricanes Katrina and Rita. ", " Table 21 provides the total appropriations for disaster-related rental assistance vouchers. It does not provide allocations by state for all rental assistance funding because that information is not readily available and would be difficult to determine. Most of the funding for rental assistance was not allocated to the local public housing authorities (PHAs) administering the program by state. Rather, it was allocated based on where displaced families were living. For example, a PHA in Texas may have been administering a voucher on behalf of the Housing Authority of New Orleans for a family who was living in New Orleans before the storm, but relocated to Alabama after the storm. The $80 million for new vouchers was allocated to housing authorities and Table 21 provides a breakdown by state for those funds. "], "subsections": []}, {"section_title": "Supportive Housing", "paragraphs": ["The Louisiana Recovery Corporation titled its recovery plan, which was primarily funded with emergency CDBG funding, the \"Road Home\" program. As shown in Table 21 , Congress appropriated $73 million to HUD for allocation to Louisiana's Road Home program (Supportive Housing) to fund the creation of permanent supportive housing units for the elderly and persons with disabilities. Of that amount, $50 million was appropriated through an existing homeless assistance grant program that serves homeless persons with disabilities (called Shelter Plus Care) (authorized at 42 U.S.C. Chapter 119) and $23 million was appropriated through the Section 8 Housing Choice Voucher program. "], "subsections": []}, {"section_title": "Public Housing Repair", "paragraphs": ["Low-rent public housing is federally subsidized housing owned and operated by local PHAs and available to low-income families. Several public housing developments, particularly in New Orleans, suffered severe damage after Hurricane Katrina. As shown in Table 21 , Congress appropriated $15 million in emergency funding to HUD's public housing capital fund (authorized at 42 U.S.C. \u00a71437g), which was allocated to PHAs to aid in the repair of severely damaged public housing in Louisiana."], "subsections": []}, {"section_title": "Inspector General", "paragraphs": ["As shown in Table 21 , Congress appropriated $7 million for the HUD Inspector General to help fund the cost of enhanced oversight over disaster recovery funding."], "subsections": []}]}, {"section_title": "Department of Justice101", "paragraphs": ["Established by an \"Act to Establish the Department of Justice\" with the Attorney General at its head, the Department of Justice (DOJ) provides counsel for the government in federal cases and protects citizens through law enforcement. It represents the federal government in all proceedings, civil and criminal, before the U.S. Supreme Court. In legal matters, generally, the department provides legal advice and opinions, upon request, to the President and executive branch department heads.", "To date, the DOJ has received a total of $287.5 million in supplemental appropriations for departmental expenses related to hurricanes in the Gulf of Mexico and to award grants to Gulf Coast states. Table 22 provides a breakdown of how DOJ obligated disaster funding among Alabama, Florida, Louisiana, Mississippi, and Texas."], "subsections": [{"section_title": "Legal Activities", "paragraphs": [], "subsections": [{"section_title": "Program Authority or Authorities", "paragraphs": ["Subtitle A of Title XI of the Violence Against Women and Department of Justice Reauthorization Act of 2005 ( P.L. 109-162 ) authorized appropriations for the General Legal Activities and U.S. Attorneys accounts. For the General Legal Activities account the act authorized $679.7 million for FY2006, $706.8 million for FY2007, $735.1 million for FY2008, and $764.5 million for FY2009. For the U.S. Attorneys account the act authorized $1.626 billion for FY2006, $1.691 billion for FY2007, $1.795 billion for FY2008, and $1.829 billion for FY2009. "], "subsections": []}, {"section_title": "Program Description", "paragraphs": ["The Legal Activities account includes several subaccounts, including General Legal Activities and the U.S. Attorneys. The General Legal Activities subaccount funds the Solicitor General's supervision of DOJ's conduct in proceedings before the Supreme Court. It also funds several departmental divisions (tax, criminal, civil, environment and natural resources, legal counsel, civil rights, INTERPOL, and dispute resolution). The U.S. Attorneys enforce federal laws through prosecution of criminal cases and represent the federal government in civil actions in all of the 94 federal judicial districts. "], "subsections": []}, {"section_title": "Funding Narrative", "paragraphs": ["Since 2005, Congress has appropriated a total of $17.5 million in supplemental appropriations for this account. This amount included $2.0 million for General Legal Activities and a total of $15.5 million for the U.S. Attorneys. Chapter 8 of Title II of the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror and Hurricane Recovery, 2006 ( P.L. 109-234 ) provided $2 million for General Legal Activities \"to investigate and prosecute fraud cases related to hurricanes in the Gulf Coast region.\" Chapter 8 of Title I of Division B of the Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006 ( P.L. 109-148 ) provided $9 million for the U.S. Attorneys \"to support operational recovery from hurricane-related damage in the Gulf Coast region.\" Chapter 8 of Title II of the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror and Hurricane Recovery, 2006 ( P.L. 109-234 ) provided the U.S. Attorneys with $6.5 million \"to investigate and prosecute fraud cases related to hurricanes in the Gulf Coast region.\""], "subsections": []}]}, {"section_title": "United States Marshals Service", "paragraphs": [], "subsections": [{"section_title": "Program Authority or Authorities", "paragraphs": ["Subtitle A of Title XI of the Violence Against Women and Department of Justice Reauthorization Act of 2005 ( P.L. 109-162 ) authorized $800.3 million for FY2006, $832.3 million for FY2007, $865.6 million for FY2008, and $900.2 million for FY2009 for the United States Marshals Service (USMS) account."], "subsections": []}, {"section_title": "Program Description", "paragraphs": ["The federal marshals' service was founded in 1789, making it the oldest federal law enforcement agency. A presidentially appointed U.S. marshal directs the operations of the marshals' services in each of the 94 federal judicial districts. The USMS facilitates the functioning of the federal judicial process by providing protection for judges, attorneys, witnesses, and jurors and providing physical security in courthouses. The USMS is the federal government's primary agency for fugitive investigations. USMS task forces combine the efforts of federal, state, and local law enforcement agencies to locate and arrest fugitives. The Marshals Service also works with international law enforcement agencies to apprehend fugitives who have fled abroad and to apprehend foreign fugitives who have entered the United States. The USMS executes all federal arrest warrants. The USMS manages and sells assets which were seized or forfeited by federal law enforcement agencies. The assets managed and sold by the USMS are assets that represent the proceeds of, or were used to facilitate federal crimes. The Marshals Service is responsible for housing and transporting all federal detainees from the time they are arrested until they are either acquitted or convicted and delivered to their designated federal prison. The USMS operates the Justice Prisoner and Alien Transportation System (JPATS), which transports prisoners between judicial districts, correctional facilities, and foreign countries. The USMS is also responsible for administering the federal witness security program, which provides for the security and safety of government witnesses and their authorized family members, whose lives are in danger as a result of their cooperation with the U.S. government. "], "subsections": []}, {"section_title": "Funding Narrative", "paragraphs": ["Since 2005, Congress has appropriated $9 million in supplemental appropriations for the U.S. Marshal's Service. Chapter 8 of Title I of Division B of the Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006 ( P.L. 109-148 ) provided $9 million for the USMS's salaries and expenses account \"to support operational recovery from hurricane-related damage in the Gulf Coast region.\""], "subsections": []}]}, {"section_title": "Federal Bureau of Investigation", "paragraphs": [], "subsections": [{"section_title": "Program Authority or Authorities", "paragraphs": ["Subtitle A of Title XI of the Violence Against Women and Department of Justice Reauthorization Act of 2005 ( P.L. 109-162 ) authorized $5.761 billion for FY2006, $5.992 billion for FY2007, $6.231 billion for FY2008, and $6.481 billion for FY2009 for the Federal Bureau of Investigation (FBI) account."], "subsections": []}, {"section_title": "Program Description", "paragraphs": ["The FBI was founded in 1908. Its headquarters is in Washington, DC, and it has 56 field offices located in major cities throughout the United States and its territories and another 380 resident agencies in cities and towns across the nation. In addition, the FBI has more than 60 international offices called \"legal attach\u00e9s\" in U.S. embassies worldwide. The FBI is the lead federal investigative agency charged with defending the country against foreign terrorist and intelligence threats; enforcing federal criminal laws; and providing leadership and criminal justice services to federal, state, municipal, tribal, and territorial law enforcement agencies and partners. The FBI focuses on protecting the United States from internal and external threats and investigations that are too large or too complex for state and local authorities to handle on their own. The priorities of the FBI include", "protecting the United States from terrorist attack; protecting the United States against foreign intelligence operations and espionage; protecting the United States against cyber-based attacks and high-technology crimes; combating public corruption; protecting civil rights; investigating transnational/national criminal organizations and enterprises; investigating major white-collar crime; investigating significant violent crime; and supporting federal, state, local and international partners. ", "The FBI collects and disseminates national crime data through the Uniform Crime Reports (UCR). The FBI also operates several national law enforcement information sharing systems such as the Combined DNA Index System (CODIS), the Law Enforcement National Data Exchange (N-Dex), the Next Generation Identification System (NGI), the National Instant Criminal Background Check System (NICS), and the National Crime Information Center (NCIC). "], "subsections": []}, {"section_title": "Funding Narrative", "paragraphs": ["Since 2005, Congress has appropriated $45 million in supplemental appropriations for the FBI. Chapter 8 of Title I of Division B of the Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006 ( P.L. 109-148 ) provided $45 million for the FBI's salaries and expenses account \"to support operational recovery from hurricane-related damage in the Gulf Coast region.\""], "subsections": []}]}, {"section_title": "Drug Enforcement Administration", "paragraphs": [], "subsections": [{"section_title": "Program Authority or Authorities", "paragraphs": ["Subtitle A of Title XI of the Violence Against Women and Department of Justice Reauthorization Act of 2005 ( P.L. 109-162 ) authorized $1.716 billion for FY2006, $1.785 billion for FY2007, $1.856 billion for FY2008, and $1.930 billion for FY2009 for the Drug Enforcement Administration (DEA) account."], "subsections": []}, {"section_title": "Program Description", "paragraphs": ["The DEA was established in 1973 through an executive order issued by President Nixon. The DEA has 226 domestic and 85 foreign offices. The DEA's mission is \"to enforce the controlled substances laws and regulations of the United States and bring to the criminal and civil justice system of the United States, or any other competent jurisdiction, those organizations and principal members of organizations, involved in the growing, manufacture, or distribution of controlled substances appearing in or destined for illicit traffic in the United States; and to recommend and support nonenforcement programs aimed at reducing the availability of illicit controlled substances on the domestic and international markets.\" The DEA's primary responsibilities include", "investigating major violators of controlled substance laws operating at interstate and international levels; management of a national drug intelligence program in cooperation with federal, state, local, and foreign officials to collect, analyze, and disseminate strategic and operational drug intelligence information; seizure and forfeiture of assets derived from, traceable to, or intended to be used for illicit drug trafficking; enforcement of the provisions of the Controlled Substances Act as they pertain to the manufacture, distribution, and dispensing of legally produced controlled substances; reduction of illicit drugs on the United States market through methods such as crop eradication, crop substitution, and training of foreign officials; and liaison with the United Nations, Interpol, and other organizations on matters relating to international drug control programs. "], "subsections": []}, {"section_title": "Funding Narrative", "paragraphs": ["Since 2005, Congress has appropriated $10 million in supplemental appropriations for this account. Chapter 8 of Title I of Division B of the Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006 ( P.L. 109-148 ) provided $10 million for the DEA's salaries and expenses account \"to support operational recovery from hurricane-related damage in the Gulf Coast region.\""], "subsections": []}]}, {"section_title": "Bureau of Alcohol, Tobacco, Firearms, and Explosives", "paragraphs": [], "subsections": [{"section_title": "Program Authority or Authorities", "paragraphs": ["Subtitle A of Title XI of the Violence Against Women and Department of Justice Reauthorization Act of 2005 ( P.L. 109-162 ) authorized $923.6 million for FY2006, $960.6 million for FY2007, $999.0 million for FY2008, and $1.039 billion for FY2009 for the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) account."], "subsections": []}, {"section_title": "Program Description", "paragraphs": ["The ATF enforces federal criminal law related to the manufacture, importation, and distribution of alcohol, tobacco, firearms, and explosives. The ATF's responsibilities were transferred from the Department of the Treasury to the Department of Justice as a part of the Homeland Security Act ( P.L. 107-296 ). The ATF works both independently and through partnerships with industry groups, international, state, and local governments, and other federal agencies to investigate and reduce crime involving firearms and explosives, acts of arson and bombings, and illegal trafficking of alcohol and tobacco products. "], "subsections": []}, {"section_title": "Funding Narrative", "paragraphs": ["Since 2005, Congress has appropriated $20 million in supplemental appropriations for the ATF. Chapter 8 of Title I of Division B of the Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006 ( P.L. 109-148 ) provided $20 million for the ATF's salaries and expenses account \"to support operational recovery from hurricane-related damage in the Gulf Coast region.\""], "subsections": []}]}, {"section_title": "Federal Prison System (Bureau of Prisons)", "paragraphs": [], "subsections": [{"section_title": "Program Authority", "paragraphs": ["Subtitle A of Title XI of the Violence Against Women and Department of Justice Reauthorization Act of 2005 ( P.L. 109-162 ) authorized $5.066 billion for FY2006, $5.268 billion for FY2007, $5.479 billion for FY2008, and $5.698 billion for FY2009 for the Federal Prison System account."], "subsections": []}, {"section_title": "Program Description", "paragraphs": ["The Bureau of Prisons (BOP) was established in 1930 to house federal inmates, to professionalize the prison service, and to ensure consistent and centralized administration of the federal prison system. The BOP's mission is to protect society by confining offenders in prisons and community-based facilities that are safe, humane, cost-efficient, and appropriately secure, and that provide work and other self-improvement opportunities for inmates so that they can become productive citizens after they are released. BOP currently operates 118 correctional facilities across the country. "], "subsections": []}, {"section_title": "Funding Narrative", "paragraphs": ["Since 2005, Congress has appropriated $11 million in supplemental appropriations for the BOP. Chapter 8 of Title I of Division B of the Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006 ( P.L. 109-148 ) provided $11 million for the BOP's buildings and facilities account \"to repair hurricane-related damage in the Gulf Coast region.\""], "subsections": []}]}, {"section_title": "Office of Justice Programs", "paragraphs": [], "subsections": [{"section_title": "Program Authorities", "paragraphs": ["Congress has not traditionally authorized appropriations for the Office of Justice Programs (OJP); rather it has authorized appropriations for grant programs administered by the OJP. The funding appropriated by Congress for the OJP under the Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006 ( P.L. 109-148 ) was not appropriated pursuant to any authorized grant program. Congress appropriated funding for OJP's State and Local Law Enforcement assistance account for the OJP to award to states affected by hurricanes in the Gulf of Mexico in 2005. The funding appropriated by Congress for the OJP under the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 ( P.L. 110-28 ) was appropriated pursuant to an authorization for the Byrne Discretionary Grant program. This program was previously authorized under Part B of Subchapter V of Chapter 46 of Title 42 of the U.S. Code. However, the authorization was repealed by Section 1111(b)(1) of the Violence Against Women and Department of Justice Reauthorization Act of 2005 ( P.L. 109-162 ). Congress continued to appropriate funding for the Byrne Discretionary Grant program until FY2011 when the program's funding was eliminated due to the earmark ban put in place by the 112 th Congress. "], "subsections": []}, {"section_title": "Program Description", "paragraphs": ["The OJP manages and coordinates the National Institute of Justice (NIJ), Bureau of Justice Statistics (BJS), Office of Juvenile Justice and Delinquency Prevention (OJJDP), Office of Victims of Crime (OVC), Bureau of Justice Assistance (BJA), and related grant programs. Through its component offices and bureaus, OJP disseminates knowledge and practices across America and provides grants for the implementation of crime fighting strategies. NIJ focuses on research, development, and evaluation of crime control and justice issues. NIJ funds research, development, and technology assistance, as well as assesses programs, policies, and technologies. BJS collects, analyzes, publishes, and disseminates information on crime, criminal offenders, crime victims, and criminal justice operations. BJS also provides financial and technical support to state, local, and tribal governments to improve their statistical capabilities and the quality and the utility of their criminal history records. OJJDP assists local community endeavors to effectively avert and react to juvenile delinquency and victimization. OJJDP seeks to improve the juvenile justice system and its policies so that the public is better protected, youth and their families are better served, and offenders are held accountable. OVC distributes federal funds to victim assistance programs across the country. OVC offers training programs for professionals and their agencies that specialize in helping victims. BJA provides leadership and assistance to local criminal justice programs that improve and reinforce the nation's criminal justice system. BJA's goals are to reduce and prevent crime, violence, and drug abuse and to improve the way in which the criminal justice system functions. "], "subsections": []}, {"section_title": "Funding Narrative", "paragraphs": ["Since 2005, Congress has appropriated $175 million for OJP for grants to assist states affected by hurricanes in the Gulf of Mexico. Chapter 8 of Title I of Division B of the Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006 ( P.L. 109-148 ) included $125 million for OJP's State and Local Law Enforcement Assistance account for \"necessary expenses related to the direct or indirect consequences of hurricanes in the Gulf of Mexico in calendar year 2005.\" Chapter 2 of Title IV of the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 ( P.L. 110-28 ) included $50 million under OJP's State and Local Law Enforcement Assistance Account for the Byrne Discretionary Grant program. Language in the law stated that funds provided under this program were to be used for local law enforcement initiatives in the Gulf Coast region related to the aftermath of Hurricane Katrina. Congress also required OJP to award the $50 million it received under the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 based upon each affected state's level of reported violent crime in 2005."], "subsections": []}]}]}, {"section_title": "Department of Labor133", "paragraphs": [], "subsections": [{"section_title": "Workforce Innovation and Opportunity Act (WIOA) Dislocated Worker Activities134", "paragraphs": [], "subsections": [{"section_title": "National Dislocated Worker Grants", "paragraphs": ["The Employment and Training Administration (ETA) of the Department of Labor administers \"federal government job training and worker dislocation programs, federal grants to states for public employment service programs, and unemployment insurance benefits. These services are primarily provided through state and local workforce development systems.\" ", "The Workforce Innovation and Opportunity Act (WIOA, P.L. 113-128 ), whose programs are administered primarily by ETA, is the primary federal employment and training legislation. WIOA authorizes several job training programs: state formula grants for Adult, Youth, and Dislocated Worker Employment and Training Activities; Job Corps; and other national programs, including Native American Programs, Migrant and Seasonal Farmworker Programs, and a series of competitive grant programs authorized under Section 169 of WIOA.", "ETA provides funding assistance for disaster relief activities primarily through the Dislocated Worker program, specifically by National Dislocated Worker Grants (DWG). DWGs are authorized under WIOA Section 170 and are for employment and training assistance to workers affected by major economic dislocations, such as plant closures, mass layoffs, or natural disasters. These DWGs are awarded primarily to states and local Workforce Development Boards (WDBs) to provide services for eligible individuals, including dislocated workers, civilian employees of the Departments of Defense or Energy employed at an installation that is being closed within 24 months of eligibility determination, employees or contractors with the Department of Defense at risk of dislocation due to reduced defense expenditures, or certain other members of the Armed Forces. Services include job search assistance and training for eligible workers. In addition, DWG funding may be used to provide direct employment (\"disaster relief employment\") to individuals for a period of up to 12 months for work related to a disaster.", "A majority of WIOA funding for the Dislocated Worker program is allocated by formula grants to states (which in turn allocate funds to local entities) to provide training and related services to individuals who have lost their jobs and are unlikely to return to those jobs or similar jobs in the same industry. The remainder of the appropriation is reserved by DOL for a National Reserve account, which in part provides for the DWGs."], "subsections": []}, {"section_title": "Funding Narrative", "paragraphs": ["The Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006 ( P.L. 109-148 ) provided $125 million in appropriations to ETA to award National Emergency Grants (NEGs) related to the consequences of hurricanes in the Gulf of Mexico in calendar year 2005. P.L. 109-148 specified that the appropriations were to remain available until June 30, 2006, and that the funds could be used to replace NEG funds previously obligated to the hurricane-impacted areas. In calendar year (CY) 2006, Alabama received $667,000, Louisiana $36.4 million, Mississippi $46.7 million, and Texas $64.9 million in NEG funding. The total of $148.6 million in NEG funding awarded to the five states, shown in Table 23 , exceeds the $125 million appropriated in P.L. 109-148 . In providing the award amounts and projects, ETA does not distinguish awards by funding source. Thus, some of the funding shown in Table 23 is from the NEG funding in the regular annual WIA National Reserve appropriations. ", "The Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006 ( P.L. 109-234 ) provided $16 million in appropriations to ETA for \"necessary expenses related to the consequences of Hurricane Katrina and other hurricanes of the 2005 season, for the construction, rehabilitation, and acquisition of Job Corps centers.\" P.L. 109-234 specified that the funds were to remain available until expended. Job Corps, which is administered by ETA, is primarily a residential job training program first established in 1964 that provides educational and career services to low-income individuals ages 16 to 24, primarily through contracts administered by DOL with corporations and nonprofit organizations. Most participants in the Job Corps program work toward attaining a high school diploma or a General Educational Development (GED) certificate, with a subset also receiving career technical training. Currently, Job Corps centers operate in 50 states, the District of Columbia, and Puerto Rico. The $16 million provided in P.L. 109-234 for construction, rehabilitation, and acquisition of Job Corps centers was most likely used for repair of the Gulfport (Mississippi) and New Orleans Job Corps centers, which were damaged during Hurricane Katrina. "], "subsections": []}]}]}, {"section_title": "Department of Transportation139", "paragraphs": ["DOT is the lead support agency under Emergency Support Function #1: Transportation, under the NRF. DOT reports on damage to transportation infrastructure and coordinates alternative transportation services and the restoration and recovery of the transportation infrastructure. At the time that Hurricanes Katrina, Rita, and Wilma struck, DOT also worked with FEMA in providing and coordinating transportation support, such as evacuation aid and shipping of critical supplies to the disaster area. However, by the time Gustav and Ike struck, DOT had turned over its role in evacuation aid and the shipping of critical supplies to FEMA.", "During the hurricane response, DOT had only one permanent disaster program, the Federal Highway Administration Emergency Relief Program (ER). Other operating administrations, such as the Federal Aviation Administration and the Federal Transit Administration, also provided disaster assistance.", "From a budgetary perspective, however, the DOT response to the Gulf Coast hurricanes may be viewed as either DOT funding or as FEMA funding provided to DOT for the mission assignment activities assumed by its operating administrations (see Table 17 , Table 18 , and Table 19 ). Funding by the FHWA, FAA, and FTA is briefly described below, and the cumulative total allocations to the Gulf of Mexico states are provided in Table 24 . "], "subsections": [{"section_title": "Federal Highway Administration: Emergency Relief Program (ER)", "paragraphs": [], "subsections": [{"section_title": "ER Program Authorities", "paragraphs": ["The Federal Highway Administration's Emergency Relief Program (ER) is authorized by Title 23, U.S.C. \u00a7125 (Section 120 (e) for federal share payable)."], "subsections": []}, {"section_title": "Program Description141", "paragraphs": ["The ER program provides funds for the repair and reconstruction of roads on the federal-aid highway system that have suffered serious damage as a result of either (1) a natural disaster over a wide area, such as a flood, hurricane, tidal wave, earthquake, tornado, severe storm, or landslide; or (2) a catastrophic failure from any external cause (for example, the collapse of a bridge that is struck by a barge). Historically, however, the vast majority of ER funds have gone for natural disaster repair and reconstruction. "], "subsections": []}, {"section_title": "ER Funding for Gulf Coast Hurricane Response", "paragraphs": ["ER funding allocations for Hurricanes Katrina, Rita, Wilma, Gustav, and Ike totaled almost $3.2 billion. Of this amount, just over $2.8 billion has been obligated; see Table 24 . Funding provided for hurricane relief includes funds from the program's annual $100 million authorization and from additional sums provided in supplemental or other appropriations acts. ER funds can only be used for roads and bridges on the federal-aid highway system. Repair and reconstruction costs for other damaged roads (mostly local roads and neighborhood streets) may be reimbursed by FEMA. "], "subsections": []}]}, {"section_title": "Federal Aviation Administration (FAA)", "paragraphs": ["FAA has approved $110.5 million for repair and improvements to hurricane-damaged airport and air traffic control infrastructure. Of this amount, $40.6 million was appropriated under the Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act of 2006 ( P.L. 109-148 ). FAA also provided Airport Improvement Program discretionary funds for airport repairs in the Gulf of Mexico states. "], "subsections": []}, {"section_title": "Federal Transit Administration (FTA)", "paragraphs": ["The U.S. Troop Readiness Veterans' Care Katrina Recovery and Iraq Accountability Appropriations Act of 2007 ( P.L. 110-28 ) appropriated $35 million for transit relief to the Gulf Coast states. The distribution of this funding across the Gulf Coast states is shown in Table 25 . It is not unusual for FTA to be tasked by FEMA under a mission assignment to provide transit assistance to disaster victims. Table 25 does not include these FEMA-reimbursed costs."], "subsections": []}]}, {"section_title": "Department of Veterans Affairs144", "paragraphs": [], "subsections": [{"section_title": "Medical Center in New Orleans", "paragraphs": ["The Department of Veterans Affairs (VA) administers programs that provide benefits and other services to veterans and their spouses, dependents, and beneficiaries. The VA has three primary organizations to provide these benefits: the Veterans Benefits Administration (VBA), the Veterans Health Administration (VHA), and the National Cemetery Administration (NCA). The VHA provides medical care to eligible veterans and dependents. Hurricane Katrina caused extensive damage to the VA Medical Center in New Orleans."], "subsections": [{"section_title": "Funding Narrative", "paragraphs": ["P.L. 109-148 appropriated additional funds for necessary expenses due to the consequences of the hurricanes in the Gulf of Mexico in 2005. Funds were appropriated by category, including $198.3 million for medical services, and $26.9 million for general operating expenses, minor construction, and the National Cemetery Administration. P.L. 109-148 appropriated $367.5 million for major construction, of which $292.5 million was for a new facility in Biloxi, MS, and $75 million was for advance planning and design work to replace the VA Medical Center in New Orleans. ", "The total amount of appropriations authorized for the new Biloxi VA Medical Center was $310 million. This amount included $292.5 million provided in. P.L. 109-148 and $17.5 million in regular appropriations. P.L. 111-212 transferred $6 million in bid savings to the Filipino Veterans Compensation Fund, and $18 million was transferred to New Orleans Medical Center project. Later another $11 million was reprogramed from the working reserve for the new Biloxi VA Medical Center. The total estimated cost of the new Biloxi VA Medical Center is $297 million. While a majority of buildings were completed in December 2011, as of FY2018 some buildings are still under construction.", "P.L. 109-234 appropriated $585.9 million for major construction by the VA, of which $550 million was for replacing the New Orleans Medical Center. P.L. 112-10 appropriated $310 million for FY2011, and P.L. 112-74 appropriated $60 million for FY2012, for the New Orleans Medical Center. In FY2015 $39.5 million and in FY2016 $50 million were respectively reprogrammed from the working reserve. The total estimated cost of replacing the VA Medical Center in New Orleans is approximately $1.09 billion.", "The site decision for the new VA Medical Center in New Orleans was announced on November 25, 2008, and a groundbreaking ceremony was held on June 25, 2010. However, VA could not acquire all the land parcels necessary to construct the new medical center until late April 2011. The construction of the new facility began in May 2011. The new medical center was formally opened on November 18, 2016, and activation of various clinics would occur in various phases. "], "subsections": []}]}, {"section_title": "Armed Forces Retirement Homes", "paragraphs": [], "subsections": [{"section_title": "Gulfport Facility", "paragraphs": ["The Armed Forces Retirement Home Trust Fund provides funds to operate and maintain the Armed Forces Retirement Homes (AFRH) in Washington, DC (also known as the United States Soldiers' and Airmen's Home), and in Gulfport, MS (originally located in Philadelphia, PA, and known as the United States Naval Home). These two facilities provide long-term housing and medical care for approximately 1,600 needy veterans. The Gulfport campus, encompassing a 19-story living accommodation and medical facility tower, was severely damaged by Hurricane Katrina, and closed at the end of August 2005."], "subsections": []}, {"section_title": "Funding Narrative", "paragraphs": ["P.L. 109-148 appropriated $65.8 million for the AFRH for expenses necessary because of the Gulf of Mexico hurricanes. Of the $65.8 million, $45 million was for advance planning and design work to replace the Gulfport, MS, facility, which was nearly destroyed by Hurricane Katrina. The facility had almost 600 residents, the majority of whom were transferred to the Washington, DC, facility after the storm. P.L. 109-234 appropriated $176 million for construction of the new Gulfport facility, and consolidated an additional $64.7 million in previously appropriated funds for construction of the new facility. P.L. 110-329 and P.L. 111-117 provided additional funds ($8.0 million and $72.0 million, respectively) for construction and renovation at the Washington, DC, and Gulfport facilities (a breakdown between the facilities for the funding is not available). In October 2010, the new Gulfport facility was completed to which residents returned."], "subsections": []}]}]}, {"section_title": "Corporation for National and Community Service151", "paragraphs": ["The National Civilian Community Corps (NCCC), authorized under the National and Community Service Act of 1990, as amended, is a residential program for individuals age 18 through 24 that conducts projects related to, among other things, disaster preparedness and relief and recovery efforts. The $10 million in Emergency Supplemental Funds provided for NCCC in P.L. 109-234 was used to support a range of program operations in the Gulf Region, from staff and member payroll and travel to covering communications, equipment, and supply costs. Funding was used in FY2007. Approximately $1.3 million went directly to the National Service Trust, which provides educational awards to NCCC members who complete 10 months of full-time service. The remaining $8.7 million was used to support program operations; it was not used to support a specific project or service. Instead, it was combined with the program's FY2007 appropriation of $26.8 million and allowed NCCC to direct members from all of its campuses to the Gulf Region for the recovery effort. The FY2007 appropriation, combined with the $8.7 million in supplemental funds, was used, among other things, to enable 1,063 members to serve 810,000 hours on 341 relief and recovery projects in the Gulf Region.", "To support this work, NCCC partnered with numerous national and local organizations, local universities and churches, as well as local and federal government, including (but not limited to) the American Red Cross; Habitat for Humanity; City Year Louisiana; The Salvation Army; Hands On Network; Federal Emergency Management Agency; St. Bernard Parish; Tulane, Xavier, and Dillard Universities; United Way of Acadiana, Louisiana; New Orleans Recovery School District; Christian Contractors Association, Mississippi; Council on Aging, Louisiana; Alliance for Affordable Energy; Arc of Greater New Orleans; Blackbelt and Central Alabama Housing Authority; various Boys and Girls Clubs; Mississippi Commission for Volunteers; and New Orleans Recreation Department."], "subsections": []}, {"section_title": "Environmental Protection Agency153", "paragraphs": ["The U.S. Environmental Protection Agency's (EPA's) primary responsibilities include the implementation of federal statutes regulating air quality, water quality, pesticides, and toxic substances; the regulation of the management and disposal of solid and hazardous wastes; and the cleanup of environmental contamination. In the case of declared disasters, FEMA may call on EPA to provide assistance to state and local governments, most notably in response to releases of hazardous materials and contaminants from a major disaster or emergency."], "subsections": [{"section_title": "Hurricane Emergency Response Authorities", "paragraphs": ["In addition to the authorities of a Presidential declaration under the Stafford Act, three federal laws authorized the development of the regulations that are embodied in the National Oil and Hazardous Substances Pollution Contingency Plan (NCP). These regulations serve as EPA's standing authority and plan for response to oil spills and releases of hazardous substances. Section 311 of the Clean Water Act authorizes federal emergency response to oil spills into U.S. waters, onto adjoining shorelines, or that may affect natural resources under the jurisdiction of the United States. The Oil Pollution Act of 1990 (OPA) amended the response authorities in Section 311 of the Clean Water Act, and established a liability and compensation framework for oil spills. The Comprehensive, Environmental Response, Compensation, and Liability Act (CERCLA, commonly referred to as Superfund) authorizes federal emergency response to releases of hazardous substances into the environment. The President's response authorities under these laws are delegated by executive order to the Environmental Protection Agency (EPA) in the inland zone and to the U.S. Coast Guard in the coastal zone. Other response authorities apply to oil released under certain circumstances not covered by the NCP. ", "EPA also has additional emergency response roles related to protecting water infrastructure under other response plans and authorities if required. EPA is the lead federal agency for the water sector under the National Infrastructure Protection Plan. EPA also has statutory \"emergency powers\" under the Safe Drinking Water Act to issue orders and commence civil action if a contaminant likely to enter a public water supply system poses a substantial threat to public health, and state or local officials have not taken adequate action."], "subsections": []}, {"section_title": "EPA Hurricane Response", "paragraphs": ["EPA's primary disaster response role is carried out in accordance with the (NCP) as outlined in the NRF, Emergency Support Function 10 (ESF#10)\u2014Oil and Hazardous Materials Annex. Under ESF#10, EPA is the lead federal agency for inland incidents and those affecting both inland and coastal zones. EPA also has various other response roles under the NRF and may perform a wide array of support functions in responding to a disaster or emergency. In accordance with various ESFs, EPA support to other federal agencies (primarily FEMA and the Army Corps of Engineers) and state and local governments, includes activities necessary to address threats to human health and the environment focusing on impacts to drinking water and wastewater treatment facilities and postdisaster cleanup. EPA also may support the Army Corps of Engineers in its mission under ESF #3\u2014Public Works and Engineering Annex\u2014to remove disaster debris and cleanup of water infrastructure facilities, and to DOE under ESF #12\u2014Energy Annex\u2014in its effort to maintain continuous and reliable energy supplies. In practice, EPA support for this latter function has generally involved waiving environmental requirements applicable to motor vehicle fuel under the Clean Air Act. For example, as part of the federal response to hurricanes in 2005, EPA granted certain waivers under this statute in response to requests from state and local officials when significant disruptions in fuel production or distribution occurred in the wake of these natural disasters. ", "EPA's activities following the 2005 and 2008 hurricanes included retrieval and disposal of orphan (oil) tanks and drums, the collection of household hazardous waste, and the collection of liquid and semiliquid waste. Additionally, EPA and Corps of Engineers staff conducted assessments, providing assistance to state and local government personnel to evaluate damages to public works. Steps involved in actually restoring service include drying out and cleaning engines; testing and repairing waterlogged electrical systems; testing for toxic chemicals that may have infiltrated pipes and plants; restoring pressure (drinking water distribution lines); activating disinfection units; restoring bacteria needed to treat wastes (wastewater plants); and cleaning, repairing, and flushing distribution and sewer lines. EPA also assisted local agencies with contaminated (nonhazardous) debris management activities. "], "subsections": []}, {"section_title": "Funding Narrative", "paragraphs": ["Initially following the 2005 and 2008 hurricanes, EPA conducted assessments and provided assistance to state and local governments using existing programs and regular funding. After the initial period EPA was eligible for reimbursement by FEMA for costs associated with these efforts under a FEMA mission assignment. Funding for EPA's response to Hurricanes Katrina, Rita, Wilma, Gustav, and Ike was primarily through the FEMA mission assignments and interagency agreements with FEMA. EPA indicated that of the $505 million received cumulatively through interagency agreements for its response to the five hurricanes, $497 million was expended. ", "In addition to the mission assignment from FEMA, EPA received a cumulative total of $21 million in emergency supplemental appropriations under P.L. 109-148 enacted December 30, 2005, and P.L. 109-234 , enacted June 15, 2006. Under P.L. 109-148 , EPA received $8 million in emergency supplemental FY2006 appropriations for the Leaking Underground Storage Tank Program (LUST) for necessary expenses to address the most immediate underground storage tank needs in areas affected by Hurricanes Katrina and Rita. P.L. 109-234 increased EPA's FY2006 appropriation by an additional $7 million for assessing underground storage tanks that may have leaked in affected areas, and made $6 million available through EPA's Environmental Programs and Management (EPM) appropriations account for increased environmental monitoring, assessment, and analytical support to protect public health during the ongoing recovery and reconstruction efforts related to the consequences of the 2005 hurricane season.", "EPA provided the cumulative $15 million included in the two supplemental appropriations under the LUST program to Alabama, Louisiana, and Mississippi in the form of grants for assessment and containment of underground tanks (by statute not to exceed $85,000 per project). EPA reported no allocation of this funding to Florida or Texas. The per-state distribution was determined jointly by EPA and the affected states based on the site evaluation information available at the time. The Alabama Department of Environmental Management (ADEM) indicated completion of site work related to Katrina and initiated a return of unliquidated obligations totaling $364,670. The majority of the $6 million emergency appropriations provided within the EPA Environmental Programs and Management appropriations account was used to fund contractors for analytical and other disaster support and to purchase equipment, including replacement of expended or damaged air monitors, within Louisiana and Mississippi. Funding was also provided for similar purposes in Alabama and Florida. No EPM funding allocation was reported for Texas. EPA provided $1.4 million of the EPM supplemental funding to its Office of Research and Development and Office of Air and Radiation for continued disaster and emergency response support, including analysis in its laboratories and air monitoring, across states affected by Hurricanes Katrina and Rita."], "subsections": []}, {"section_title": "EPA Regular Appropriations", "paragraphs": ["General appropriation funds available to states in the form of grants from EPA may also have been used in the 2005 and 2008 hurricane recovery efforts, in particular, capitalization grants from the Clean Water and the Drinking Water State Revolving Funds (SRFs). The SRFs are funded within the EPA's State and Tribal Assistance Grants (STAG) appropriations account. SRF grant funding is used for local wastewater and drinking water infrastructure projects, such as construction of and modification to municipal sewage treatment plants and drinking water treatment plants, to facilitate compliance with Clean Water Act and Safe Drinking Water Act requirements, respectively. Although, following a presidentially declared emergency, public drinking water and wastewater utilities are eligible for FEMA supplemental federal disaster grant assistance for the repair, replacement, or restoration of disaster damaged facilities, the portions of the annual fiscal year SRF grant allotments to states may have also been used to supplement these projects.", "EPA allocates annual appropriations for these capitalization grants among the states based on an established formula authorized in the Clean Water Act and based on needs surveys under the Safe Drinking Water Act. States must provide 20% matching funds in order to receive the federal funds. States combine their matching funds with the federal monies to capitalize their SRFs, which they use to issue low-interest or no interest loans to finance local water infrastructure projects in communities. The recipients generally must repay the loan to the issuing state. For FY2006-FY2011, the cumulative total allotment to the five Gulf States examined in this report from Clean Water SRF annual appropriations was $1.20 billion. The cumulative total during the six-year period for the Drinking Water SRF was $1.16 billion. What portion of these funds was used to support projects for infrastructure affected by the five hurricanes is not known."], "subsections": []}]}, {"section_title": "The Federal Judiciary177", "paragraphs": ["The mission of the federal courts is to protect the rights and liberties guaranteed under the Constitution. The courts are charged with interpreting and applying the law to resolve disputes through fair and impartial judgments, and ensuring fairness and equal justice for all citizens of the United States. ", "According to the Budget Office of the Administrative Office of the U.S. Courts, Congress appropriated $18 million in emergency judiciary funding for disaster relief in the aftermath of Hurricanes Katrina and Rita. These monies were obligated to (1) reimburse per diem for judges, court staff, and federal public defenders' staff who were on temporary duty assignment, and their dependents; (2) reimburse all judges and court staff who were on temporary duty assignment for travel purposes; (3) pay for furniture, equipment, and security in the temporary locations; and (4) replace furniture and equipment in courts affected by the hurricanes. Table 27 presents the funding provided to Louisiana, Mississippi, Texas, and Florida, as well as the additional funding to the Fifth Circuit."], "subsections": []}, {"section_title": "Small Business Administration180", "paragraphs": [], "subsections": [{"section_title": "Disaster Assistance Program", "paragraphs": [], "subsections": [{"section_title": "Authority", "paragraphs": ["The Small Business Administration's (SBA's) Disaster Assistance Program is authorized by the Small Business Act (P.L. 85-536, Section 7(b) 72 Stat. 387, as amended)."], "subsections": []}, {"section_title": "Program Description", "paragraphs": ["The SBA's Disaster Assistance Program provides low-interest disaster loans to homeowners, renters, and businesses, as well as to private and nonprofit organizations to repair or replace real estate, personal property, machinery and equipment, inventory, and business assets that have been damaged or destroyed in a declared disaster. ", "The SBA provides three categories of loans: (1) home loans, (2) business loans, and (3) Economic Injury Disaster Loans (EIDLs). Home disaster loans help homeowners and renters repair or replace disaster-related damages to homes or personal property. SBA regulations limit home loans to $200,000 for the repair or replacement of real estate and $40,000 to repair or replace personal property. Business disaster loans help business owners repair or replace disaster-damaged property, including inventory and supplies. Business loans are limited to $2 million. EIDLs provide assistance to small businesses, small agricultural cooperatives, and certain private, nonprofit organizations that have suffered substantial economic injury resulting from a physical disaster or an agricultural production disaster. EIDLs are limited to $2 million.", " Table 28 lists the number of approved disaster loan applications by state and by type of loan for all five hurricanes. The actual number of loans made may be somewhat lower than the number of loan applications approved, because not all approved loan applications are subsequently accepted by the borrower. Table 29 lists the amount of the approved loans, by state."], "subsections": []}]}]}]}, {"section_title": "Cost-Shares and Programmatic Considerations: Hurricanes Katrina, Wilma, Dennis, and Rita182", "paragraphs": [], "subsections": [{"section_title": "Administrative and Congressional Waivers of Cost-Shares", "paragraphs": ["P.L. 110-28 , the \"U.S. Troops Readiness, Veterans Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007,\" which provided supplemental appropriations legislation for the war in Iraq and disaster recovery from Hurricane Katrina, provided cost-share reductions for disaster assistance provided to the affected states along the Gulf Coast. The reductions provided to Alabama, Florida, Louisiana, Mississippi, and Texas were among the largest ever granted.", "P.L. 110-28 provided a waiver of all state and local cost-shares for four disaster assistance programs that are a part of the Stafford Act. These programs included Section 403 (Essential Assistance), Section 406 (Repair, Restoration, and Replacement of Damaged Facilities), Section 407 (Debris Removal), and Section 408 (Federal Assistance to Individuals and Households). These programs are generally cost-shared in statute at 75% federal and 25% state and local with the possibility, under specified circumstances, for a 90% federal, 10% state and local ratio. Also significant was the cost-share waiver for the Other Needs Assistance Program under Section 408, which had never been waived previously. That section of Stafford states that the \"Federal share shall be 75 percent.\" ", "Section 4501 of P.L. 110-28 , also states in part, the following:", "(a) Notwithstanding any other provision of law, including any agreement, the Federal share of assistance, including direct Federal assistance, provided for the States of Louisiana, Mississippi, Florida, Alabama and Texas in connection with Hurricanes Katrina, Wilma, Dennis and Rita under sections 403, 406, 407, and 408 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 USC 5170b, 5172, 5173, and 5174) shall be 100 percent of the eligible costs under such sections.", "(b) APPLICABILITY", "1) IN GENERAL\u2014The federal share provided by subsection (a) shall apply to disaster assistance applied for before the date of enactment of this Act.", "(2) LIMITATION\u2014In the case of disaster assistance provided under Section 403, 406 and 407 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, the Federal share provided by subsection (a) shall be limited to assistance provided for projects for which a \"request for public assistance form\" has been submitted.", "The statutory cost-share waivers were provided for five states. Per capita damage for Louisiana, Mississippi, and Alabama from Hurricane Katrina, and for Louisiana from Hurricane Rita, had already qualified those states for a decreased state cost-share (from 25% to 10%) through FEMA's regulatory formula based on estimated damage. Congress' inclusion of Florida and Texas may have been an effort to not separate out related damages within a devastating hurricane season. ", "Also, the decision to grant cost-share waivers to Florida and Texas may have been in recognition of the amount of help both states had provided to Mississippi and Louisiana, respectively, in both the provision of emergency management resources and in hosting large numbers of evacuees in the wake of the storms of 2005.", "The \"Limitation\" in the legislation was intended to ensure that the projects receiving the waiver were ones already identified by applicants and not newly created projects, or perhaps, projects not necessarily related to the event that were attempting to capitalize on the reduced cost-share provision. The legislation states that a \"request for public assistance\" submitted prior to enactment of the bill (May 25, 2007) will require no cost-share. Any \"requests for public assistance\" not submitted prior to the enactment of the bill will be cost-shared at the 90% federal, 10% state and local cost-share for the affected states. This provision appeared to be intended to provide the more generous cost-share to those projects already selected by the state rather than projects that could be developed or submitted based on 100% federal funding.", "There have been several instances when Congress chose to adjust a state's cost-share by legislation. Prior to large cost-share adjustments made to several FEMA programs as noted above, Congress also legislatively reduced cost-shares for states affected by Hurricane Rita."], "subsections": []}]}, {"section_title": "Concluding Observations and Policy Questions185", "paragraphs": ["This report demonstrates not only the significant amount of assistance the federal government provides for major disasters, but also the wide range of federal programs that are brought to bear to help individuals and communities respond and recover from major disasters, as well as prepare and mitigate against future disasters. Yet, this is only a partial picture of the amounts and types of disaster assistance that have been provided by the federal government on a yearly basis. The research focus for this report was on supplemental appropriations for the 2005 and 2008 Gulf Coast hurricanes. The federal government, however, also annually provides disaster assistance through regular appropriations and continuing resolutions, as well as supplemental appropriations. For example, with respect to the DRF, Congress provided roughly $42 billion in annual appropriations for FY2007 to FY2016 (see Table 30 ). This amount does not include what was provided in annual appropriations for other agencies, nor does it include what was provided through supplemental appropriations. ", "There are indications that expenditures on disaster assistance may increase. In recent years there has been an uptick in the number of declarations issued each year. For example, the average number of major disasters declared per year from 1953 to 2016 was 35.8. However, beginning in the 1990s there has been an uptick in the frequency with which major disasters are declared. During the 1990s the average number of major disaster declarations per year was 45.8, the average number from 2000 to 2009 was 57.1, and the average number from 2010 to 2016 was 58.7 (see Figure 1 ).", "Thus, while this report provides the most detailed information on federal assistance for the 2005 and 2008 Gulf Coast hurricanes, there is a need for further research on the subject of federal disaster assistance\u2014including the assistance provided in response to disasters in other regions of the United States\u2014to address existing gaps in funding information. This information would be useful because, arguably, congressional oversight and debates concerning disaster relief can be better informed with more accurate data and information on the amounts and types of assistance provided by the federal government to states, localities, and tribal nations. ", "Potential policy methods for addressing gaps in funding information may include requiring", "the issuance of disaster assistance reports on an annual or quarterly basis from all federal entities that provide significant amounts of disaster assistance; the Office of Management and Budget (OMB) to compile a report on an annual or quarterly basis with funding information that details all federal spending for emergencies and major disasters; a standardization of how expenditure data are reported across federal agencies to facilitate cost comparisons; reports to include state-specific as well as disaster-specific information. State-specific information could be used to target mitigation projects; disaster assistance reports to include supplemental as well as regular appropriations data; federal agencies to flag monies used for disaster relief that has been taken from their regular budgets; and disaster assistance reports to contain cost share information as well as detailed information on state expenditures."], "subsections": [{"section_title": "Potential Methods for Controlling Costs Associated with Major Disasters", "paragraphs": ["If the increase in the number of declarations and their associated costs are of concern, in addition to requiring improved data reporting Congress may choose to address the issue through a variety of policy measures. ", "The following sections could be used to frame a potential debate on limiting the number of declarations being issued, limiting the assistance provided after a declaration has been declared, or both."], "subsections": [{"section_title": "Rationale for Keeping the Disaster Assistance the Same", "paragraphs": ["To many, providing relief to disaster victims is an essential role of the government. In their view, the concern over costs is understandable given concerns over the national budget. However, they may argue that the increase in the amount of assistance provided over the past decade is justified because the occurrences of disasters are on the rise (see Figure 6 ). The rise may be due to a number of factors including increases in inclement weather, population growth, and building development. Moreover, proponents of keeping the current system in place may say that providing assistance to disaster-stricken areas is both acceptable and needed to help a state and region's economy recover from a storm that it otherwise may not be able to recover from on its own."], "subsections": []}, {"section_title": "Limiting the Number of Major Disaster Declarations Being Issued", "paragraphs": ["Others may contend that too many major disasters are being declared and should be limited. The following sections review some policy mechanisms that could be employed to decrease the number of declarations that are being issued. The primary option consists of preventing what may be perceived by some to be marginal incidents from triggering federal assistance. Potential methods to achieve this include changing the definitions of a major disaster in Stafford Act, changing the per capita formula for determining whether a disaster is sufficiently large to warrant federal assistance, or the use of other indicators instead of, or in conjunction with, the per capita formula."], "subsections": [{"section_title": "Changing the Definition of Major Disaster in the Stafford Act", "paragraphs": ["Some argue that the Stafford Act has enhanced presidential declaration authority because the definition of a major disaster in Section 102(2) of Stafford Act is ill-defined. Because of the expansive nature of this definition under the Stafford Act, they assert, there are not many restrictions on the types of major disasters for which the President may issue a declaration. For example, some would argue that snowstorms do not warrant major disaster declarations."], "subsections": []}, {"section_title": "Changing the Per Capita Formula", "paragraphs": ["One potential method of reducing the number of major disasters being declared is to increase the per capita amount used by FEMA to make major disaster recommendations to the President. A per capita formula based on damages caused by an incident is used by FEMA to make recommendations to the President concerning whether to issue a major disaster declaration. The current per capita amount used by FEMA to make recommendations is $1.43. This amount could be increased (for example, by 10%) to reduce the number of incidents eligible for federal assistance. ", "If increased, Congress might require that the per capita be adjusted annually for inflation. The DHS Inspector General issued a report in May 2012, which noted that FEMA had been using a $1 per capita damage amount since 1986 for determining during its preliminary damage assessment process if it would recommend to the President that the event was beyond the capacity of state and local governments to deal with without federal assistance. The DHS Inspector General also explained that FEMA did not begin adjusting that number for inflation until 1999. The DHS Inspector General pointed out that if the inflation adjustment had been occurring over that 13-year period, from 1986 to 1999, fully 36% fewer disasters would have qualified for a presidential declaration based on that factor. ", "However, it is also useful to understand that the actual public announcement of factors considered for a declaration did not become public until 1999. At the behest of Congress, it was in that year that FEMA began to print the factors that were considered in regulation. Until then, all of that information had been within the \"pre-decisional\" part of the process in the executive branch. However, in 1999 FEMA began to identify factors considered for both Public and Individual Assistance. That is not to say FEMA was not using the per capita amount in its considerations, only that the process was not widely known or understood as it presently is. As the DHS IG notes, FEMA could have been raising that amount gradually, a process that did not begin until more than a dozen years later. On the other hand, it should also be considered that when FEMA discussed such proposals (e.g., per capita figures gradually increasing) with Congress, the result was a new Section 320 of the Stafford Act that stated the following:", "No geographic area shall be precluded from receiving assistance under this Act solely by virtue of an arithmetic formula or sliding scale based on income of population."], "subsections": []}]}, {"section_title": "The Use of State Capacity Indicators", "paragraphs": ["In 2001, the Government Accountability Office (GAO) issued a report on disaster declaration criteria. The GAO report was a comprehensive review of FEMA's declaration criteria factors. GAO recommended that FEMA \"develop more objective and specific criteria to assess the capabilities of state and local governments to respond to a disaster\" and \"consider replacing the per capita measure of state capacity with a more sensitive measure, such as a state's total taxable resources.\"", "The state's Total Taxable Resources (TTR) was developed by the Department of the Treasury. GAO reported that TTR:", "is a better measure of state funding capacity in that it provides a more comprehensive measure of the resources that are potentially subject to state taxation. For example, TTR includes much of the business income that does not become part of the income flow to state residents, undistributed corporate profits, and rents and interest payments made by businesses to out-of-state stock owners. This more comprehensive indicator of state funding capacity is currently used to target federal aid to low-capacity states under the Substance Abuse and Mental Health Service Administration's block grant programs. In the case of FEMA's Public Assistance program, adjustments for TTR in setting the threshold for a disaster declaration would result in a more realistic estimate of a state's ability to respond to a disaster.", "It could be argued that the use of TTR would conflict with the prohibition against the use of arithmetic formulas established by Congress. However, just as FEMA's per capita measurement is one of several factors considered and not the \"sole\" determinant of a declaration, GAO stated that TTR would not violate Section 320 because TTR could also be used with other criteria such as those identified in regulations. Thus, some could contend that TTR could fill a similar role with perhaps more accuracy. It may also help reduce federal costs for disaster assistance by denying assistance to marginal incidents that could be otherwise handled by the state."], "subsections": []}, {"section_title": "Expert Panels", "paragraphs": ["Some have proposed the use of an independent expert panel to review gubernatorial requests for major disaster declarations. Such panels would be comprised of individuals with specialized knowledge in certain subject areas, such as disasters, economics, and public health. The panel would take into account the severity of the incident as well as other factors that might indicate how well the state could respond to and recover from the incident. The panel would then make recommendations to the President whether the circumstances of the incident were worthy of federal assistance based on their assessment.", "Some might argue that the use of an expert panel would make decisions about whether to provide assistance more objective. Others might argue that the use of a panel may slow down the declaration process and impede the provision of important assets and resources. It may be argued that the panel's recommendation would infringe on the President's authority to issue a declaration. On the other hand, it could also be argued that the President would retain the authority to issue a declaration despite the panel's recommendation."], "subsections": []}, {"section_title": "Emergency Loans", "paragraphs": ["Another potential method to reduce the number of declarations and the costs of federal disaster assistance would be to create incentives to dissuade states from requesting assistance. One method would be converting some, or all, federal assistance provided through emergency declarations into a loan program. For example, emergency declarations could be altered to provide up to a specified amount (for example, $5 billion dollars) in low interest recovery loans. Under this arrangement a state could elect to handle the incident without federal assistance rather than having to reimburse the federal government for recovery loans."], "subsections": []}, {"section_title": "Changes to the Stafford Act", "paragraphs": ["The following section discusses some potential changes to the Stafford Act that might limit the number of declarations being issued each year."], "subsections": [{"section_title": "Repeal of Section 320", "paragraphs": ["As mentioned previously, Section 320 of the Stafford Act restricts the use of an arithmetic or sliding scale to provide federal assistance. Repealing Section 320 would allow formulas that establish certain thresholds that states would have to meet to qualify for assistance."], "subsections": []}, {"section_title": "Section 404", "paragraphs": ["Section 404 of the Stafford Act authorizes the President to contribute up to 75% of the cost of an incident toward mitigation measures that reduce the risk of future damage, loss of life, and suffering. Section 404 could be amended to make mitigation assistance contingent on state codes being in place prior to an event. For example, states that have met certain mitigation standards could remain eligible for the 75% federal cost share. States that do not meet the standards would be eligible for a smaller share, such as 50% federal cost share. The amendment may incentivize mitigation work on the behalf of the state and possibly help reduce damages to the extent that a request for assistance is not needed, or the cost of the federal share may be lessened. The amendment could be set to take effect in three years, giving states time to act, or not."], "subsections": []}, {"section_title": "Other Potential Amendments to the Stafford Act", "paragraphs": ["Other amendments to the Stafford Act could either limit the number of declarations being issued, or the amount of assistance provided to the state by the federal government.", "The Stafford Act could be amended so that there could be no administrative adjustment of the cost-share. The cost-share could only be adjusted through congressional action. The amendment could be designed to apply immediately. The Stafford Act could be amended so that federal assistance would only be available for states with corollary programs (such as Public Assistance, Individual Assistance, and housing assistance). Establishing these programs at the state level may increase state capacity to handle some incidents without federal assistance. The amendment could be designed to take effect in three years, giving states time to act, or not. The Stafford Act could be amended to discontinue all assistance for snow removal unless directed by Congress. The amendment could be designed to take effect in three years to give states and localities an opportunity to increase snow removal budgets, or not."], "subsections": []}]}, {"section_title": "Reducing the Amount of Assistance Provided Through Declarations", "paragraphs": [], "subsections": [{"section_title": "Adjust the State Cost Share", "paragraphs": ["Most discussions regarding state cost-shares in disaster programs and projects involve ways in which the state amount may be reduced and the federal share increased. Some may contend, however, that the opposite approach should be adopted and efforts should be undertaken to reduce disaster costs by shifting the costs to the state and local level. Currently, state and local governments provide 25% of disaster costs on projects and grants to families and individuals with the federal government assuming, at a minimum, 75% of all costs.", "There is no statutory limit on the number of people that can be helped following a disaster. Similarly, when assessing damage to state and local infrastructure there is no cap on the amount of federal funds that can be expended to make the repairs or accomplish a replacement. The only limitation is that the damage must be to eligible facilities and that it is disaster-related damage.", "Given that open-ended commitment by the federal government, some may argue that increasing the state share of 25% to a higher percentage would be warranted given the federal government's fiscal condition. Another option would be to make the cost-share arrangement not subject to administrative adjustment."], "subsections": []}, {"section_title": "Disaster Loans", "paragraphs": ["As mentioned previously, the assistance provided for emergency declarations could be provided through the form of loans. Similarly, some or all of the assistance provided to the state after a major disaster could be converted to low-interest or no-interest loans. For example, a state may receive the traditional 75% cost share for an incident but be required to reimburse 25% of that funding to the federal government. Loans for disaster recovery could also be incentivized. For instance, states that undertook certain pre-established preparedness mitigation measures could qualify for a larger federal share or a lower interest rate."], "subsections": []}]}]}, {"section_title": "Policy Questions", "paragraphs": ["Congress has always debated the federal role in disaster relief. In recent years the debate has intensified in light of the federal budgetary environment. Policymakers have, or may ask, a number of questions relating to federal expenditures on disaster relief to assist and improve oversight, and to better inform deliberations on legislation designed to assist individuals and communities respond and recover from incidents. Such questions may include the following: ", "To what degree should the federal government be involved in providing disaster assistance? Is the federal government providing enough assistance, or being overly generous in providing financial assistance to states? Was the funding provided for the Gulf Coast storms delivered efficiently and to its intended targets? If not, how can the process be improved without slowing the provision of necessary services and resources? How were funding allocations to each federal entity determined? Was the process accurate, or could it be improved in upcoming disasters? Are there increased instances of fraud, abuse, and waste when large sums of funding are provided for disaster relief? If so, what oversight mechanisms are in place to prevent such occurrences? Is there unnecessary duplication of services and/or efforts given the large number of federal entities involved in disaster relief? The assistance provided by the federal government to the Gulf Coast was provided, in part, by a number of supplemental appropriations. Is it better to provide funding overtime through multiple supplemental appropriations, or to provide the funding once through a single supplemental appropriation?"], "subsections": [{"section_title": "Appendix. Contributing Authors", "paragraphs": ["The following authors contributed sections in this report."], "subsections": []}]}]}]}}
{"id": "R44000", "title": "Turkey: Background and U.S. Relations In Brief", "released_date": "2019-02-08T00:00:00", "summary": ["The United States and Turkey have been NATO allies since 1952 and share some vital interests, but harmonizing their priorities can be difficult. These priorities sometimes diverge irrespective of who leads the two countries, based on contrasting geography, threat perceptions, and regional roles.", "Turkey's core security and economic relationships and institutional links remain with Western nations, as reflected by some key U.S. military assets based in Turkey and Turkey's strong trade ties with the European Union. However, various factors complicate U.S.-Turkey relations. For example, Turkey relies to some degree on nations such as Russia and Iran for domestic energy needs and coordination on regional security, and therefore balances diplomatically between various actors. Additionally, Turkey's president and longtime leader Recep Tayyip Erdogan appears to be concerned that the United States and some other Western countries harbor sympathies for some of the groups that have been marginalized domestically under Erdogan. Also, Turkey has played a larger role in the Middle East since the 2000s, but has faced a number of setbacks and has problematic relations with Israel and most Sunni Arab countries other than Qatar.", "Bilateral relations between the Trump Administration and the Erdogan government have been difficult, but have improved somewhat since October 2018, when a Turkish court allowed Pastor Andrew Brunson to return to the United States after a two-year imprisonment. The following are current points of tension in the U.S.-Turkey relationship.", "F-35 aircraft acquisition endangered by possible S-400 acquisition from Russia. Turkey's planned purchase of an S-400 air defense system from Russia could trigger U.S. sanctions under existing law and decrease Turkey's chances of acquiring U.S.-origin F-35 aircraft. The possible S-400 transaction has sparked broader concern over Turkey's relationship with Russia and implications for NATO. U.S. officials seek to prevent the deal by offering Patriot air defense systems as an alternative to the S-400.", "Syria and the Kurds. Turkey's political stances and military operations in Syria have fed U.S.-Turkey tensions, particularly regarding Kurdish-led militias supported by the United States against the Islamic State over Turkey's strong objections. President Trump's announcement in December 2018 that U.S. troops would withdraw from Syria came after a call with President Erdogan in which Erdogan accepted responsibility for countering the Islamic State in Syria. Efforts to coordinate U.S. and Turkish actions related to a U.S. withdrawal have triggered debate about the possible consequences of Turkish intervention in northeast Syria, especially for those Kurdish-led militias, which have links with the PKK (Kurdistan Workers' Party). The PKK is a U.S.-designated terrorist organization that originated in Turkey and wages an on-and-off insurgency against the Turkish government while using safe havens in both Syria and Iraq.", "Congressional initiatives. Within the tense bilateral context, the 115th Congress required the Trump Administration\u2014in the FY2019 John S. McCain National Defense Authorization Act (NDAA, P.L. 115-232)\u2014to report on the status of U.S.-Turkey relations, with particular emphasis on the possible S-400 deal and its implications. The Department of Defense (DOD) submitted a mostly classified report to Congress in November 2018. Appropriations legislation proposed for FY2019 in the 116th Congress (H.R. 648) would require an update to the DOD report.", "Turkey's domestic trajectory and financial distress. President Erdogan rules in an increasingly authoritarian manner, with his power further consolidated in June 2018 presidential and parliamentary elections. A number of developments (a globally stronger dollar, rule of law concerns and political uncertainty, significant corporate debt) led to a precipitous drop in the value of Turkey's currency during 2018. A major September 2018 interest rate hike by Turkey's central bank helped reverse some of the currency's downward slide, but concerns remain about Turkey's financial position and the possible consequences that higher interest rates might have for economic growth. Local elections are scheduled for March 2018 against the backdrop of these economic concerns.", "The next steps in relations between the United States and Turkey will take place with Turkey facing a number of political and economic challenges. Given Erdogan's consolidation of power, observers now question how he will govern a polarized electorate and deal with the foreign actors who can affect Turkey's financial solvency, regional security, and political influence. U.S. officials and lawmakers can refer to Turkey's complex history, geography, domestic dynamics, and international relationships in evaluating how to encourage Turkey to align its policies with U.S. interests."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides background information and analysis on the following topics:", "Various aspects of U.S.-Turkey relations, including (1) Turkey's strategic orientation; (2) U.S./NATO cooperation and how a Turkish purchase of an S-400 air defense system from Russia could endanger its acquisition of U.S.-origin F-35 aircraft; (3) the situation in northern Syria, including with Kurdish-led militias; (4) criminal cases of note since the failed 2016 coup attempt in Turkey; and (5) congressional proposals. Domestic Turkish developments, including politics under President Recep Tayyip Erdogan's largely authoritarian and polarizing rule (with local elections scheduled for March 2019), and significant economic concerns.", "For additional information, see CRS Report R41368, Turkey: Background and U.S. Relations , by Jim Zanotti and Clayton Thomas."], "subsections": []}, {"section_title": "U.S.-Turkey Relations", "paragraphs": [], "subsections": [{"section_title": "Turkey's Strategic Orientation in Question", "paragraphs": ["Numerous points of bilateral tension have raised questions within the United States and Turkey about the two countries' alliance. Turkish actions and statements on a number of foreign policy issues have contributed to problems with the United States and its other NATO allies, fueling concern about Turkey's commitment to NATO and Western orientation. For its part, Turkey may bristle because it feels like it is treated as a junior partner, and may seek greater foreign policy diversification through stronger relationships with more countries. In the months since the apparent October 2018 killing of Saudi journalist Jamal Khashoggi in Saudi Arabia's Istanbul consulate, some observers speculate that President Erdogan has sought to use information from the event to gain leverage in Turkey's dealings with the United States, and to boost Turkey's regional and global profile.", "A number of considerations drive the complicated dynamics behind Turkey's international relationships. Turkey's history as both a regional power and an object of great power aggression translates into wide popularity for nationalistic political actions and discourse. This nationalistic sentiment might make some Turks wary of Turkey's partial reliance on other key countries (for example, the United States for security, European Union countries for trade and investment, and Russia and Iran for energy). Moreover, Turkey's cooperative relationships with countries whose respective interests may conflict involves a balancing act. Turkey's vulnerability to threats from Syria and Iraq increases the pressure on it to manage this balance. Involvement in Syria and Iraq by the United States, Russia, and Iran further complicates Turkey's situation. Additionally, grievances that President Erdogan and his supporters espouse against seemingly marginalized domestic foes (the military and secular elite who previously dominated Turkey, the Fethullah Gulen movement, Kurdish nationalists, and liberal activists) extend to the United States and Europe due to apparent suspicions of Western sympathies for these foes. ", "Turkey's Middle Eastern profile expanded in the 2000s as Erdogan (while serving as prime minister) sought to build economic and political linkages\u2014often emphasizing shared Muslim identity\u2014with Turkey's neighbors. However, efforts to increase Turkey's influence and offer it as a \"model\" for other regional states appear to have been set back by a number of developments since 2011: (1) conflict and instability that engulfed the region and Turkey's own southern border, (2) Turkey's failed effort to help Muslim Brotherhood-aligned groups gain lasting power in Syria and North Africa, and (3) domestic polarization accompanied by government repression. Although Turkey shares some interests with traditional Sunni Arab powers Saudi Arabia and Egypt in countering Iran, these countries' leaders regard Turkey suspiciously because of the Turkish government's Islamist sympathies and close relationship with Qatar. Turkey maintains relations with Israel, but these have become distant and\u2014at times\u2014contentious during Erdogan's rule."], "subsections": []}, {"section_title": "U.S./NATO Cooperation with Turkey", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["Turkey's location near several global hotspots makes the continuing availability of its territory for the stationing and transport of arms, cargo, and personnel valuable for the United States and NATO. From Turkey's perspective, NATO's traditional value has been to mitigate its concerns about encroachment by neighbors. Turkey initially turned to the West largely as a reaction to aggressive post-World War II posturing by the Soviet Union. In addition to Incirlik air base near the southern Turkish city of Adana, other key U.S./NATO sites include an early warning missile defense radar in eastern Turkey and a NATO ground forces command in Izmir. Turkey also controls access to and from the Black Sea through its straits pursuant to the Montreux Convention of 1936.", "Current tensions have fueled discussion from the U.S. perspective about the advisability of continued U.S./NATO use of Turkish bases. Reports in 2018 suggested that some Trump Administration officials were contemplating significant reductions in the U.S. presence in Turkey. There are historical precedents for such changes. On a number of occasions, the United States has withdrawn military assets from Turkey or Turkey has restricted U.S. use of its territory or airspace. These include the following:", "196 2\u2014 Cuban Missile Crisis . The United States withdrew its nuclear-tipped Jupiter missiles from Turkey as part of the secret deal to end this crisis with the Soviet Union. 1975\u2014 Cyprus. Turkey closed most U.S. defense and intelligence installations in Turkey during the U.S. arms embargo that Congress imposed in response to Turkey's military intervention in Cyprus. 2003\u2014 Iraq. A Turkish parliamentary vote did not allow the United States to open a second front from Turkey in the Iraq war.", "Some of the plotters of an unsuccessful coup attempt in Turkey in July 2016 apparently used Incirlik air base, causing temporary disruptions of some U.S. military operations. This may have eroded some trust between the two countries, while also raising U.S. questions about Turkey's stability and the safety and utility of Turkish territory for U.S. and NATO assets. As a result of these questions and U.S.-Turkey tensions, some observers have advocated exploring alternative basing arrangements in the region. ", "The cost to the United States of finding a replacement for Incirlik and other sites in Turkey would likely depend on a number of variables including the functionality and location of alternatives, where future U.S. military engagements may happen, and the political and economic difficulty involved in moving or expanding U.S. military operations elsewhere. While an August 2018 report cited a Department of Defense (DOD) spokesperson as saying that the United States is not leaving Incirlik, some reports suggest that expanded or potentially expanded U.S. military presences in Greece and Jordan might be connected with concerns about Turkey.", "Calculating the costs and benefits to the United States of a U.S./NATO presence in Turkey, and of potential changes in U.S./NATO posture, revolves to a significant extent around three questions:", "To what extent does strengthening Turkey relative to other regional actors serve U.S. interests? To what extent does the United States rely on the use of Turkish territory or airspace to secure and protect U.S. interests? To what extent does Turkey rely on U.S./NATO support, both politically and functionally, for its security and regional influence? "], "subsections": []}, {"section_title": "F-35 Aircraft Acquisition Endangered by Possible S-400 Acquisition from Russia", "paragraphs": ["Turkey's plans to take delivery of an S-400 air defense system from Russia sometime in 2019 could hamper its acquisition of U.S.-origin F-35 Joint Strike Fighter aircraft. Turkey is a member of the international consortium that has developed the F-35, and plans to purchase 100 of the aircraft. Training on the F-35 for Turkish pilots is now underway on U.S. soil, and the first aircraft is reportedly scheduled to leave the United States for Turkey sometime in 2020."], "subsections": [{"section_title": "S-400 Deal and Implications for NATO", "paragraphs": ["Turkey justified its preliminary decision to acquire S-400s instead of U.S. or European alternatives by claiming that it turned to Russia because NATO allies rebuffed its attempts to purchase an air defense system from them. Turkey has also cited various practical reasons, including cost, technology sharing, and territorial defense coverage. However, one analysis from December 2017 asserted that the S-400 deal would not involve technology transfer, would not defend Turkey from ballistic missiles (because the system would not have access to NATO early-warning systems), and could weaken rather than strengthen Turkey's geopolitical position by increasing Turkish dependence on Russia. ", "For some observers, the S-400 issue raises the possibility that Russia could take advantage of U.S.-Turkey friction to undermine the NATO alliance. Previously, in 2013, Turkey reached a preliminary agreement to purchase a Chinese air and missile defense system, but later (in 2015) withdrew from the deal, perhaps partly due to concerns voiced within NATO, as well as China's reported reluctance to share technology."], "subsections": []}, {"section_title": "Possible Impact on F-35 Transaction", "paragraphs": ["While U.S. officials express desires to avoid disruptions to the F-35's manufacture and rollout, they also express concern that Turkey's potential operation of the S-400 alongside the F-35 could compromise sensitive technology. According to one analysis, \"the Pentagon fears that Turkey's operation of the S-400 would allow the Russian military to study how the F-35 stealth fighters [show up on] Russian-built air defense radars, and potentially facilitate the infiltration of [the F-35] computer system. This could compromise the F-35's effectiveness around the world.\" According to one Turkish press report, Turkey has taken a step intended to assuage U.S. concerns by insisting on an arrangement that allows Turkish technicians to operate the S-400 without Russian involvement, and Turkey may also allow U.S. officials to examine the S-400. ", "Congress has enacted legislation that has subjected the F-35 transfer to greater scrutiny. Under Section 1282 of the FY2019 John S. McCain National Defense Authorization Act ( P.L. 115-232 ), DOD submitted a report to Congress in November 2018 on a number of issues affecting U.S.-Turkey defense cooperation, including the S-400 and F-35.", "Much of the report was classified, but an unclassified summary said that the U.S. government has told Turkey that purchasing the S-400 would have \"unavoidable negative consequences for U.S.-Turkey bilateral relations, as well as Turkey's role in NATO,\" including", "potential sanctions against Turkey under Section 231 of the Countering America's Adversaries Through Sanctions Act (CAATSA, P.L. 115-44 ); risk to Turkish participation in the F-35 program (both aircraft acquisition and industrial workshare); risk to other potential U.S. arms transfers to Turkey, and to broader bilateral defense industrial cooperation; reduction in NATO interoperability; and introduction of \"new vulnerabilities from Turkey's increased dependence on Russia for sophisticated military equipment.\""], "subsections": []}, {"section_title": "U.S. Offer of Patriot System as Alternative to S-400", "paragraphs": ["In July 2018, a State Department official confirmed ongoing U.S. efforts to persuade Turkey to purchase a Patriot air defense system instead of an S-400. However, in October 2018, Turkish Defense Minister Hulusi Akar said that talks with U.S. and European air defense system suppliers had \"not yielded desired results,\" and announced plans for Turkey to begin deploying the S-400 in October 2019. Previously, Turkish officials had indicated some concern about whether Congress would approve a Patriot sale, perhaps because of some congressional opposition for other arms sales to Turkey.", "The unclassified summary of the November 2018 DOD report to Congress indicated that U.S. officials were continuing to offer a Patriot system to Turkey:", "The Administration has developed an alternative package to provide Turkey with a strong, capable, NATO-interoperable air and missile defense system that meets all of Turkey's defense requirements. Parts of the package require Congressional Notification. Congressional support for Foreign Military Sales and Direct Commercial Sales to Turkey is essential to provide a real alternative that would encourage Turkey to walk away from a damaging S-400 acquisition.", "In December 2018, the Defense Security Cooperation Agency (DSCA) notified Congress that \"the State Department has made a determination approving a possible Foreign Military Sale [FMS] of eighty (80) Patriot MIM-104E Guidance Enhanced Missiles (GEM-T) missiles, sixty (60) PAC-3 Missile Segment Enhancement (MSE) missiles and related equipment for an estimated cost of $3.5 billion.\" ", "Reportedly, discussions between U.S. and Turkish officials over a Patriot sale are ongoing. Turkish officials have stated their intention to proceed with the S-400 purchase regardless of how negotiations over the Patriot sale proceed. In 2009, DSCA notified Congress of a possible FMS to Turkey of Patriot missiles and associated equipment, but the countries did not enter into a transaction for that equipment. Since 2007, Turkey has solicited a number of outside bids to sell it an air defense system, but has not finalized a transaction to date. "], "subsections": []}]}]}, {"section_title": "Syria", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["Turkey's involvement in Syria's conflict since 2011 has been complicated and costly. During that time, Turkey's priorities in Syria appear to have evolved. While Turkey still officially calls for Syrian President Bashar al Asad to leave power, it has engaged in a mix of coordination and competition with Russia and Iran (Asad's supporters) on some matters since intervening militarily in Syria starting in August 2016. Turkey may be seeking to protect its borders, project influence, promote commerce, and counter other actors' regional ambitions.", "Turkey's chief objective has been to thwart the Syrian Kurdish People's Protection Units (YPG) from establishing an autonomous area along Syria's northern border with Turkey. The YPG has links with the PKK (Kurdistan Workers' Party), a U.S.-designated terrorist organization that for decades has waged an on-and-off insurgency against the Turkish government while using safe havens in both Syria and Iraq. Turkey appears to view the YPG and its political counterpart, the Democratic Union Party (PYD), as the top threat to its security, given the boost the YPG/PYD's military and political success could provide to the PKK's insurgency within Turkey. The YPG plays a leading role in the umbrella group known as the Syrian Democratic Forces (SDF), which also includes Arabs and other non-Kurdish elements. ", "Since 2014, the SDF has been the main U.S. ground force partner against the Islamic State (IS, also known as ISIS/ISIL). Even though Turkey is also a part of the anti-IS coalition, U.S. operations in support of the SDF\u2014largely based from Turkish territory\u2014has fueled U.S.-Turkey tension because of Turkey's view of the YPG as a threat. As part of SDF operations to expel the Islamic State from the Syrian city of Raqqah in 2017, the U.S. government pursued a policy of arming the YPG directly while preventing the use of such arms against Turkey, and Secretary of Defense Jim Mattis announced an end to the direct arming of the YPG near the end of the year. Following the Raqqah operation, U.S. officials contrasted their long-standing alliance with Turkey with their current but temporary cooperation with the YPG.", "After Turkey moved against IS-held territory in northern Syria as a way to prevent the YPG from consolidating its rule across much of the border area between the two countries (Operation Euphrates Shield, August 2016-March 2017), Turkey launched an offensive directly against the YPG in the Afrin province in January 2018. In Afrin and the other areas Turkey has occupied since 2016 with the help of allied Syrian opposition militias (see Figure 2 below) , Turkey has organized local councils and invested in infrastructure . Q uestions persist about how deeply Turkey will influence future governance in these areas ."], "subsections": []}, {"section_title": "Implications of Announced U.S. Withdrawal", "paragraphs": ["President Trump's announcement in December 2018 that the United States would withdraw approximately 2,000 U.S. troops stationed in Syria has major implications for Turkey and the YPG. The announcement came shortly after a call between Presidents Trump and Erdogan, during which Trump reportedly accepted Erdogan's offer to take responsibility for countering the Islamic State in Syria. U.S. officials have been cited as saying that U.S. troops will redeploy from Syria by summer 2019.", "How a U.S. withdrawal would happen remains unclear, as does how Turkey and the many other actors in Syria would respond. Turkey has refused to agree to a demand from National Security Advisor John Bolton to guarantee the YPG's safety, with Erdogan insisting that Turkey should have a free hand with the YPG and other groups it considers to be terrorists. In January, amid reports that the U.S. military had begun preparing for withdrawal, President Trump tweeted that he would \"devastate Turkey economically\" if it hit the Kurds, and at the same time proposed the creation of a 20-mile-deep \"safe zone\" on the Syria side of the border. Secretary of State Mike Pompeo later said that the U.S. \"twin aims\" are to make sure that those who helped take down the IS caliphate have security, and to prevent terrorists from attacking Turkey out of Syria. Some sources suggest that U.S. officials favor having a Western coalition patrol any kind of buffer zone inside the Syrian border, with some U.S. support, while Turkey wants its forces and Syrian rebel partners to take that role.", "Uncertainty surrounding the announced U.S. withdrawal from northeast Syria also applies to how Turkish forces might operate there. One analyst calculates that additional Turkish military intervention might focus on areas, such as Tal Abyad (aka Tell Abiad), that are less historically Kurdish than others, in an effort to reduce the YPG's control over territorially contiguous regions. Some observers express doubts that Turkish-supported militias would be able to counter the Islamic State as effectively as the YPG-led SDF, and one journalist has stated concerns about what could happen to the IS foreign fighters held by the SDF if Turkey clashes with the YPG. Turkish officials have requested U.S. air and logistical support for their potential operations, despite the two countries' different stances on the YPG. In a New York Times column in January, President Erdogan envisioned that if Turkish-backed forces gain control of predominantly Kurdish areas in Syria currently under YPG rule, these regions would be run by popularly elected local councils advised by Turkish officials. Various analyses surmise that a U.S. troop withdrawal would lead the YPG toward an accommodation with Russia and the Syrian government. A reference by Russian President Vladimir Putin to the 1998 Adana Protocol between Turkey and Syria suggests that Russia may seek to limit direct Turkish involvement in Syria under the premise that Syria's government would take greater responsibility for constraining YPG actions.", "How U.S.-Turkey coordination plays out in northeastern Syria could influence Turkey's presence in western Syria, particularly in key contested areas like the town of Manbij and Idlib province. Russia and the Syrian government have sent forces near Manbij, possibly as a check on Turkish personnel there who are intent on eradicating YPG influence from the town. In Idlib, Turkey-backed forces stationed at points around the province appear to have failed to prevent territorial gains by Al Qaeda-linked Hayat Tahrir al Sham (HTS) jihadists who also oppose the Syrian government. The HTS gains in Idlib may lead to a Russian-backed Syrian military operation there with the potential for new refugee flows to Turkey. "], "subsections": []}]}, {"section_title": "Various Criminal Cases After 2016 Coup Attempt", "paragraphs": ["A number of cases involving criminal allegations or detentions have generated controversy between the United States and Turkey since the July 2016 coup attempt in Turkey. Shortly after the attempt, Turkey's government called for the extradition of Fethullah Gulen (the U.S.-based former cleric whom Turkey's government has accused of involvement in the plot), and the matter remains pending before U.S. officials. Since the coup attempt, sharp criticism of U.S. actions related to Gulen's case has significantly increased in Turkish media. Additionally, Turkey's government has dismissed around 130,000 Turks from government posts, detained more than 60,000, and taken over or closed various businesses, schools, and media outlets. The government's measures appear to have targeted many who are not connected with Gulen.", "As part of Turkish authorities' postcoup crackdown, they detained Pastor Andrew Brunson (who was released, after a two-year imprisonment, in October 2018) and a number of other U.S. citizens (most of them dual U.S.-Turkish citizens), along with Turkish employees of the U.S. government. Reports suggest that Congress and the State Department are trying to obtain the release of those currently detained, though the Administration lifted sanctions on senior Turkish officials following Pastor Brunson's release.", "Separately, two prominent Turkish citizens with government ties were arrested by U.S. authorities in 2016 and 2017 for conspiring to evade sanctions on Iran. One, Reza Zarrab, received immunity for cooperating with prosecutors, while the other, Mehmet Hakan Atilla, was convicted and sentenced in May 2018 to 32 months in prison. The case was repeatedly denounced by Turkish leaders, who reportedly expressed concern about the potential implications for Turkey's economy if the case led U.S. officials to impose penalties on Turkish banks. This has not yet happened."], "subsections": []}, {"section_title": "Congressional Proposals", "paragraphs": ["Bilateral tensions contributed to various legislative proposals by Members of Congress during the 115 th Congress. The most significant congressional action against Turkey to date has been an arms embargo that Congress enacted in response to Turkish military intervention in Cyprus. That embargo lasted from 1975 to 1978. ", "In the 116 th Congress, the House-passed Consolidated Appropriations Act, 2019 ( H.R. 648 ) contains foreign aid provisions that also have been introduced in the Senate Appropriations Committee. Section 7046(d) of H.R. 648 includes the following proposals regarding Turkey:", "Requiring DOD to update its FY2019 NDAA report to Congress on Turkey's possible S-400 acquisition. The update, including a detailed description of plans to impose sanctions under CAATSA, is required by November 1, 2019. Until the report is submitted, funding cannot be used to transfer F-35 aircraft to Turkey. Restricting transfer of arms to Turkish P residential Protection Directorate (TPPD) . This restriction, which is subject to a few exceptions, would apply unless the State Department reports to Congress that members of the TPPD who were involved in a violent incident against protestors during a May 2017 Washington, DC, trip by President Erdogan have been \"brought to justice.\"", "H.R. 648 is less stringent than an earlier FY2019 appropriations bill ( S. 3108 ) from the 115 th Congress that would have prohibited transferring F-35s to Turkey if it purchased the S-400, and would have denied entry to senior Turkish officials involved in detaining U.S. citizens."], "subsections": []}]}, {"section_title": "Domestic Turkish Developments", "paragraphs": [], "subsections": [{"section_title": "Political Developments Under Erdogan's Rule", "paragraphs": ["President Erdogan has ruled Turkey since becoming prime minister in 2003. After Erdogan became president in August 2014 via Turkey's first-ever popular presidential election, he claimed a mandate for increasing his power and pursuing a \"presidential system\" of governance. Analyses of Erdogan sometimes characterize him as one or more of the following: a pragmatic populist, a protector of the vulnerable, a budding authoritarian, an indispensable figure, and an Islamic ideologue. ", "Erdogan's consolidation of power has continued amid domestic and international concerns about growing authoritarianism in Turkey. He outlasted the July 2016 coup attempt, and then scored victories in the April 2017 constitutional referendum and the June 2018 presidential and parliamentary elections\u2014emerging with the expanded powers he had sought. Some allegations of voter fraud and manipulation surfaced in both elections. U.S. and European Union officials have expressed a number of concerns about rule of law and civil liberties in Turkey, including the government's influence on media and Turkey's reported status as the country with the most journalists in prison.", "While there may be some similarities between Turkey under Erdogan and countries like Russia, Iran, or China, some factors distinguish Turkey from them. For example, unlike Russia or Iran, Turkey's economy cannot rely on significant rents from natural resources if foreign sources of revenue or investment dry up. Unlike Russia and China, Turkey does not have nuclear weapons under its command and control. Additionally, unlike all three others, Turkey's economic, political, and national security institutions and traditions have been closely connected with those of the West for decades.", "Erdogan is a polarizing figure, with about half the country supporting his rule, and half the country against it. To obtain a parliamentary majority in the June 2018 elections, Erdogan's Islamist-leaning Justice and Development Party ( Adalet ve Kalkinma Partisi , or AKP) relied on a coalition with the Nationalist Action Party ( Milliyet Halk Partisi , or MHP). The MHP is the country's traditional Turkish nationalist party, and is known for opposing political accommodation with the Kurds. Local elections scheduled for March 2019 could be a significant barometer of domestic support for Erdogan under the difficult economic circumstances described below."], "subsections": []}, {"section_title": "Economic Concerns", "paragraphs": ["The Turkish economy appears to be slowing down, with negative consequences both for consumer demand and for companies seeking or repaying loans in global markets. Economic growth was down from over 7% in 2017 to around 3% in 2018, with forecasts for 2019 at or below 1%. By the end of 2018, inflation had essentially doubled year-on-year to more than 20%. During 2018, the Turkish lira depreciated close to 30% against the dollar in an environment featuring a globally stronger dollar, rule of law concerns and political uncertainty, and significant corporate debt. In August 2018, amid U.S.-Turkey tensions on the Pastor Brunson matter, President Trump announced a doubling of tariffs on Turkish steel and aluminum imports. This prompted retaliatory action from Turkey. The lira plunged in value, but recovered somewhat in the final months of 2018 after Turkey's central bank raised its key interest rate by 6.25% in September. In November 2018, the United States granted Turkey (along with seven other countries) a six-month exception from U.S. sanctions on Iranian oil.", "Some observers speculate that Turkey may need to turn to the International Monetary Fund (IMF) for a financial assistance package. This would be a sensitive challenge for President Erdogan because his political success story is closely connected with helping Turkey become independent from its most recent IMF intervention in the early 2000s. Before the central bank's rate hike in September 2018, some commentators voiced concerns about the bank's independence as Erdogan publicly opposed increasing rates. In January 2019, Turkey's parliament voted to grant Erdogan broader emergency powers in case of a financial crisis.", "The government appears to be trying to stimulate growth via familiar measures to boost consumer demand. A former Turkish economic official has claimed that by offloading the \"debt crisis of the real sector\" onto the banking sector, the government has exacerbated the crisis. In his opinion, a \"harsh belt-tightening policy\" with or without the IMF is thus inevitable after the March 2018 local elections."], "subsections": []}]}]}}
{"id": "R45327", "title": "Public Safety Officers\u2019 Benefits (PSOB) and Public Safety Officers\u2019 Educational Assistance (PSOEA) Programs", "released_date": "2019-02-01T00:00:00", "summary": ["The Public Safety Officers' Benefits (PSOB) program provides cash benefits to federal, state, and local law enforcement officers; firefighters; employees of emergency management agencies; and members of emergency medical services agencies who are killed or permanently and totally disabled as the result of personal injuries sustained in the line of duty. The Public Safety Officers' Educational Assistance (PSOEA) program, a component of the PSOB program, provides higher-education assistance to the children and spouses of public safety officers killed or permanently disabled in the line of duty.", "The PSOB and PSOEA programs are administered by the Department of Justice (DOJ), Bureau of Justice Assistance (BJA). However, claimants dissatisfied with denials of benefits may pursue administrative appeals within DOJ and may seek judicial review before the United States Court of Appeals for the Federal Circuit.", "Each year, Congress appropriates funding for PSOB death benefits, which is considered mandatory spending, and for PSOB disability benefits and PSOEA benefits, which is subject to annual appropriations.", "For FY2019, the one-time lump-sum PSOB death and disability benefit is $359,316 and the PSOEA monthly benefit for a student attending an educational institution full-time is $1,224.", "In FY2017, the DOJ approved 399 claims for PSOB death benefits, 82 claims for PSOB disability benefits, and 601 claims for PSOEA benefits."], "reports": {"section_title": "", "paragraphs": ["T he Public Safety Officers' Benefits (PSOB) program provides cash benefits to federal, state, and local law enforcement officers; firefighters; employees of emergency management agencies; and members of emergency medical services agencies who are killed or permanently and totally disabled as the result of personal injuries sustained in the line of duty. The Public Safety Officers' Educational Assistance (PSOEA) program, a component of the PSOB program, provides higher-education assistance to the children and spouses of public safety officers killed or permanently disabled in the line of duty. Both programs are administered by the PSOB Office of the Department of Justice (DOJ), Bureau of Justice Assistance (BJA). ", "Congress appropriates funds for these programs in the annual Departments of Commerce and Justice, Science, and Related Agencies Appropriations Act. For FY2019, the one-time lump-sum PSOB benefit is $359,316 and the monthly full-time attendance PSOEA assistance is $1,224. The PSOB and PSOEA benefit amounts are indexed to reflect changes in the cost of living.", " Table 1 shows PSOB and PSOEA claims and approvals as reported by DOJ."], "subsections": [{"section_title": "Public Safety Officers' Benefits Program", "paragraphs": [], "subsections": [{"section_title": "Eligible Public Safety Officers", "paragraphs": ["To be eligible for PSOB benefits for death or disability, a person must have served in one of the following categories of public safety officers:", "law enforcement officer, firefighter, or chaplain in a public agency; FEMA employee or a state, local, or tribal emergency management agency employee; or emergency medical services member. ", "There is no minimum amount of time a person must have served to be eligible for benefits."], "subsections": [{"section_title": "Law Enforcement Officer, Firefighter, or Chaplain", "paragraphs": ["To be eligible for PSOB benefits as a law enforcement officer, firefighter, or chaplain, a person must have served in a \"public agency\" in an official capacity, with or without compensation. For the purposes of PSOB eligibility, a public agency is defined as ", "the federal government and any department, agency, or instrumentality of the federal government; and any state government, the District of Columbia government, and any U.S. territory or possession; and any local government, department, agency, or instrumentality of a state, the District of Columbia, or any U.S. territory or possession. "], "subsections": [{"section_title": "Law Enforcement Officer", "paragraphs": ["For the purposes of PSOB eligibility, a law enforcement officer is defined as \"an individual involved in crime and juvenile delinquency control or reduction, or enforcement of the criminal laws (including juvenile delinquency), including, but not limited to, police, corrections, probation, parole, and judicial officers.\""], "subsections": []}, {"section_title": "Firefighter", "paragraphs": ["For the purposes of PSOB eligibility, the definition of firefighter includes both professional firefighters and persons serving as an \"officially recognized or designated member of a legally organized volunteer fire department.\" "], "subsections": []}, {"section_title": "Chaplain", "paragraphs": ["A chaplain is eligible for PSOB benefits (1) if he or she is either an \"officially recognized or designated member of a legally organized volunteer fire department or legally organized police department\" or public employee of a police or fire department and (2) only if he or she was performing the duties of a chaplain in an official capacity while responding to a police, fire, or rescue emergency. "], "subsections": []}]}, {"section_title": "Emergency Management Agency Employee", "paragraphs": ["Employees of the Federal Emergency Management Agency (FEMA) and state, local, or tribal emergency management agencies may be eligible for PSOB benefits under certain conditions provided in statute. A FEMA employee or an employee of a state, local, or tribal emergency management agency working with FEMA is eligible for PSOB benefits if he or she is performing official duties that are related to a major disaster or an emergency declared under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) and that are considered hazardous by the FEMA Administrator or the head of the state, local, or tribal agency. "], "subsections": []}, {"section_title": "Emergency Medical Services Member", "paragraphs": ["A member, including a volunteer member, of a rescue squad or \"ambulance crew\" who is authorized or licensed by law and the applicable agency and is engaging in rescue services or providing emergency medical services may be eligible for PSOB benefits. The rescue squad or ambulance service may provide ground or air ambulance services and may be either a public agency or a nonprofit entity authorized to provide rescue or emergency medical services. By PSOB regulation, eligible emergency medical services workers include rescue workers, ambulance drivers, paramedics, health care responders, emergency medical technicians, or others who are trained in rescue activity or emergency medical services and have the legal authority and responsibility to provide such services."], "subsections": []}]}, {"section_title": "Injury and Line of Duty Requirements", "paragraphs": ["The PSOB program pays benefits if a public safety officer becomes permanently and totally disabled or dies \"as the direct and proximate result of a personal injury sustained in the line of duty.\" "], "subsections": [{"section_title": "Injury Requirement", "paragraphs": ["To qualify for coverage under the PSOB program, a public safety officer's disability or death must have been the result of a personal injury. The PSOB regulation defines an injury for the purposes of benefit eligibility as", "a traumatic physical wound (or a traumatized physical condition of the body) directly and proximately caused by external force (such as bullets, explosives, sharp instruments, blunt objects, or physical blows), chemicals, electricity, climatic conditions, infectious disease, radiation, virii, or bacteria ...", "The regulation also provides that the definition of an injury does not include an occupational disease or a condition of the body caused by stress or strain, including psychological conditions such as post-traumatic stress disorder. However, the PSOB statute specifically provides for deaths caused by certain cardiovascular conditions. "], "subsections": [{"section_title": "Presumption of Injury Status for Heart Attack, Stroke, or Vascular Rupture", "paragraphs": ["The death of a public safety officer due to a heart attack, stroke, or vascular rupture shall be presumed to be a death from a personal injury for the purposes of PSOB eligibility if the officer engaged in nonroutine stressful or strenuous physical activity as part of an emergency response or training exercise; and if the condition began during the physical activity, while the officer remained on duty after the physical activity, or within 24 hours of the physical activity. "], "subsections": []}]}, {"section_title": "Line of Duty Requirement", "paragraphs": ["The PSOB program covers a public safety officer's death or disability if it occurred as the result of an injury incurred in the line of duty. The PSOB regulations provide that an injury occurs in the line of duty if it (1) is the result of the public safety officer's authorized activities while on duty, (2) occurs while responding to an emergency or request for assistance, or (3) occurs while commuting to or from duty in an authorized department or personal vehicle. In addition, if there is convincing evidence that the injury was the result of the individual's status as a public safety officer, that injury is covered by the PSOB program."], "subsections": []}]}, {"section_title": "Benefit Amounts", "paragraphs": ["The lump-sum PSOB death and disability benefit for FY2019 is $359,316. The benefit amount is adjusted annually to reflect changes in the cost of living using the annual percentage change in the Consumer Price Index for Urban Consumers (CPI-U) for the one-year period ending in the previous June. If a public safety officer receives a disability benefit and later dies from the same injury, the officer's survivors may not receive a PSOB death benefit. ", "The payable benefit amount is based on the date of the public safety officer's death or the date of the injury that caused the disability, rather than on the date of application for benefits or disability determination. Thus, if a benefit increase occurs while an application is pending, the benefit is payable at the previous, lower, benefit level. ", "Death and disability benefits are not subject to the federal income tax. In general, PSOB death and disability benefits are paid in addition to any other workers' compensation, life insurance, or other benefits paid for the death of a public safety officer. However, the PSOB death benefit is offset by the following benefits:", "benefits under the Federal Employees' Compensation Act (FECA) payable to state and local law enforcement officers injured or killed while enforcing federal law; benefits under the D.C. Retirement and Disability Act of 1916 for certain police officers and firefighters in the District of Columbia; and payments from the September 11 th Victim Compensation Fund (VCF)."], "subsections": []}, {"section_title": "Payments to Survivors", "paragraphs": ["PSOB death benefits are payable to the eligible spouse and children of a public safety officer. A spouse is the person to whom the officer is legally married, even if physically separated, under the marriage laws of the jurisdiction where the marriage took place. Pursuant to regulations issued after the Supreme Court struck down the federal Defense of Marriage Act in United States v. Windsor , the legally married spouse of a public safety office may be of the same sex as the officer. ", "A child is defined as any \"natural, illegitimate, adopted, or posthumous child or stepchild\" of the public safety officer who, at the time of the public safety officer's fatal or catastrophic injury, is", "18 years of age or under; between 18 and 23 years of age and a full-time student in high school or undergraduate higher education; or over 18 years of age and incapable of self-support because of physical or mental disability. ", "PSOB death benefits are paid to eligible survivors in the following order:", "1. if the officer is survived by only a spouse, 100% of the death benefits are payable to the spouse; 2. if the officer is survived by a spouse and children, 50% of the death benefits are payable to the spouse and the remaining 50% is distributed equally among the officer's children; 3. if the officer is survived by only children, the death benefits are equally distributed among the officer's children; 4. if the officer has no surviving spouse or children, the death benefits are paid to the individual or individuals designated by the officer in the most recently executed designation of beneficiary on file at the time of the officer's death; or if the officer does not have a designation of beneficiary on file, the benefits are paid to the individual or individuals designated by the officer in the most recently executed life insurance policy on file at the time of the officer's death; 5. if the officer has no surviving spouse or eligible children, and the officer does not have a life insurance policy, the death benefits are equally distributed between the officer's surviving parents; or 6. if the officer has no surviving spouse, eligible children, or parents, and the officer did not have a designation of beneficiary or a life insurance policy on file at the time of his or her death, the death benefits are payable to surviving adult, nondependent, children of the officer."], "subsections": []}, {"section_title": "Definition of Disability", "paragraphs": ["PSOB disability benefits are paid only in cases of permanent and total disability. There are no benefits payable for partial or short-term disabilities. A disability is considered permanent for the purposes of PSOB eligibility if, given the current state of medicine in the United States, there is a degree of medical certainty that the condition will remain constant or deteriorate over the person's lifetime or that the public safety officer has reached maximum medical improvement. A public safety officer is considered to be totally disabled for the purposes of PSOB eligibility if given the current state of medicine in the United States, there is a degree of medical certainty that the officer is unable to perform any gainful work. PSOB regulation defines gainful work as \"full- or part-time activity that is compensated or commonly compensated.\" "], "subsections": []}, {"section_title": "Application Process", "paragraphs": ["Applications for PSOB death and disability benefits are filed with the PSOB office, which determines benefit eligibility and commences benefit payment. Unless extended for good cause, application deadlines must be met. Complete benefit applications must be filed no later than", "for death benefits: three years after the death; one year after the determination of the officer's employing agency to award or deny death benefits payable by that agency; or one year after certification by the officer's employing agency that the agency is not authorized to pay any death benefits; and for disability benefits: three years after the date of the injury; one year after the determination of the officer's employing agency to award or deny workers' compensation or disability benefits payable by that agency; or one year after certification by the officer's employing agency that the agency is not authorized to pay any workers' compensation or disability benefits.", "A lump-sum interim payment of up to $3,000 may be made if a PSOB death benefit will \"probably be paid.\" The interim payment amount reduces the final PSOB payment amount. If the ultimate decision is to deny death benefits, the interim payment must be returned to the federal government, unless this repayment is waived because it would create a hardship for the beneficiary. "], "subsections": [{"section_title": "Expedited Benefits in Terrorism Cases", "paragraphs": ["Section 611 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act; P.L. 107-56 ) provides for expedited payment of PSOB death and disability benefits if the officer's injury occurred \"in connection with prevention, investigation, rescue, or recovery efforts related to a terrorist attack.\" In such cases, PSOB benefits must be paid within 30 days of certification from the officer's employing agency that the officer's death or disability was related to terrorism."], "subsections": []}]}]}, {"section_title": "Public Safety Officers' Educational Assistance Program", "paragraphs": ["The Public Safety Officers' Education Assistance (PSOEA) program provides financial assistance with costs associated with higher education to the spouse or children of a public safety officer who is eligible for PSOB death or disability benefits. "], "subsections": [{"section_title": "Eligibility", "paragraphs": ["The spouse or child of a public safety officer who is eligible for PSOB death or disability benefits may be eligible for PSOEA benefits. To be eligible for PSOEA benefits, a spouse must have been married to an eligible public safety officer at the time of the officer's death or injury. A child is eligible for PSOEA benefits until the age of 27. This age limit can be extended by the Attorney General in extraordinary circumstances, or, pursuant to Section 3 of the Public Safety Officers' Benefits Improvement Act of 2017 ( P.L. 115-36 ), if there is a delay of more than one year in approving PSOB or PSOEA benefits. ", "In addition, to be eligible for PSOEA benefits, the spouse or child must be enrolled at an eligible educational institution. For the purposes of PSOEA eligibility, an eligible education institution is one that meets the definition of an \"institution of higher education\" as provided by Section 102 of the Higher Education Act of 1965 and that is eligible for federal student aid. "], "subsections": []}, {"section_title": "Amount of Benefits", "paragraphs": ["PSOEA benefits are payable to the claimant and may be used only to defray costs associated with higher education attendance, including tuition, room, board, book and supplies, and education-related fees. The monthly PSOEA benefit amount is equal to the monthly benefit amount payable under the GI Bill Survivors' and Dependents' Educational Assistance (DEA) program, which is administered by the Department of Veterans Affairs (VA) for spouses and dependents of veterans with disabilities or who died as a result of service-connected conditions. The PSOEA benefit amounts are adjusted annually to reflect changes in the cost of living in accordance with changes to the GI Bill DEA benefit amounts. For FY2019, the PSOEA monthly benefit for a student attending an educational institution full-time is $1,224. The PSOEA benefit rates are prorated for less than full-time attendance. "], "subsections": []}, {"section_title": "Duration of Benefits", "paragraphs": ["The maximum duration of PSOEA benefits for any person is 45 months of full-time education or a proportionate duration of part-time education. A person is ineligible for PSOEA if he or she is in default on a federal student loan or is ineligible for federal benefits due to a drug trafficking or drug possession conviction. In addition, the Attorney General may discontinue PSOEA benefits for a student that fails to make satisfactory progress in his or her course of study as defined by Section 484(c) of the Higher Education Act of 1965."], "subsections": []}]}, {"section_title": "PSOB and PSOEA Appeals Process", "paragraphs": ["A claimant who is dissatisfied with a PSOB disability benefit denial may request a reconsideration. There is no reconsideration offered for denials of PSOB death or PSOEA benefits. A claimant who is dissatisfied with a PSOB or PSOEA benefit denial may request a de novo hearing before a hearing officer assigned by the director of the DOJ PSOB Office. The determination of a hearing officer may be appealed to the PSOB Office director. The director's determination is considered the final agency determination and is not subject to any further agency administrative review or appeal. However, provided all administrative appeals remedies have been exhausted, the PSOB Office director's determination may be appealed to the United States Court of Appeals for the Federal Circuit. ", "The PSOB statute authorizes the BJA to prescribe the maximum fee that an attorney or other representative may charge a claimant for services rendered in connection with a claim, with attorney fees generally limited to between 3% and 6% of the total benefit paid, depending on the level in the administrative appeals process the claim is approved. Program regulation prohibits stipulated-fee and contingency-fee arrangements for PSOB representation. "], "subsections": []}, {"section_title": "Budget and Appropriations", "paragraphs": ["Congress provides funding for PSOB and PSOE benefits and associated administrative expenses in the annual Departments of Commerce and Justice, Science, and Related Agencies Appropriations Act. Funding for PSOB death benefits and associated administrative expenses is considered mandatory spending and Congress appropriates \"such sums as may be necessary\" for the payment of these benefits. Funding for PSOB disability and PSOEA benefits is considered discretionary and is subject to specific congressional appropriations. Annual appropriations language grants the Attorney General the authority to transfer from any available appropriations to the DOJ the funds necessary to respond to emergent circumstances that require additional funding for PSOB disability benefits and PSOEA benefits. "], "subsections": []}]}}
{"id": "R44027", "title": "Tracking Federal Awards: USAspending.gov and Other Data Sources", "released_date": "2019-04-26T00:00:00", "summary": ["USAspending.gov, available at http://www.USAspending.gov, is a government source for data on federal awards by state, congressional district (CD), county, and zip code. The awards data in USAspending.gov are provided by federal agencies and represent contracts, grants, loans, and other forms of financial assistance. USAspending.gov also provides tools for examining the broader picture of federal spending obligations by categories, such as budget function, agency, and object class.", "Using USAspending.gov to locate and compile accurate data on federal awards can be challenging due, in part, to continuing data quality issues that have been identified by the U.S. Government Accountability Office (GAO). Users of USAspending.gov need to be aware that while search results may be useful for informing consideration of certain questions, these results may be incomplete or contain inaccuracies.", "USAspending.gov was created under P.L. 109-282, the Federal Funding Accountability and Transparency Act of 2006 (FFATA), and is being enhanced under requirements in P.L. 113-101, the Digital Accountability and Transparency Act of 2014 (DATA Act).", "Other federal awards data sources reviewed in this report include the following:", "Federal Procurement Data System (FPDS); Census Federal Audit Clearinghouse; U.S. Budget: Aid to State and Local Governments; Census Federal Aid to States (FAS) and Consolidated Federal Funds Report (CFFR); and Additional federal grant awards databases, including sources tracking medical, scientific, and technical research."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["USAspending.gov, available to the public at http://www.usaspending.gov , is a government source for data on federal grants, contracts, loans, and other financial assistance. The website enables searching of federal awards from FY2008 to the present by state, congressional district (CD), county, and zip code. Grant awards include money the federal government commits for projects in states, local jurisdictions, regions, territories, and tribal reservations, as well as payments for eligible needs to help individuals and families. Contract awards refer to bids and agreements the federal government makes for specific goods and services.", "USAspending.gov also provides tools for examining the broader picture of federal spending obligations by categories, such as budget function, agency, and object class. Budget function refers to the major purpose that the spending serves, such as Social Security, Medicare, and national defense. Object class refers to the type of item or service purchased by the federal government, such as grants, contracts, and personnel compensation and benefits.", "For Congress, the ability to more accurately track these federal awards is necessary to better inform oversight of federal spending. In recent years, Congress has passed laws to create and improve systems used by government departments and agencies to report and input data on federal awards for contracts, grants, and other financial assistance: ", "P.L. 109-282 , the Federal Funding Accountability and Transparency Act of 2006 (FFATA), called for the creation of a database that became USAspending.gov. The publicly available database replaced data collection and annual reports issued for more than 30 years in the Census Bureau's Federal Aid to States (FAS) report and Consolidated Federal Funds Report (CFFR). P.L. 111-5 , the American Recovery and Reinvestment Act of 2009 (ARRA), required federal agencies awarding stimulus funding and state and local recipients of such funding to report spending back to the ARRA Recovery Board; this reporting also became a part of USAspending.gov. P.L. 113-101 , the Digital Accountability and Transparency Act of 2014 (DATA Act), transferred responsibility for USAspending.gov from the Office of Management and Budget (OMB) to the Department of the Treasury and required that expenditures data be added to the federal agency obligations data already included in the USAspending.gov database. The DATA Act also required Treasury and OMB to develop government-wide data standardization to facilitate consolidating, automating, and simplifying reports on grant awards and contracts and to improve USAspending.gov underreporting and inconsistencies. ", "However, finding accurate and complete data on federal funds received by states and congressional districts continues to be challenging due to ongoing data quality problems identified by the Government Accountability Office (GAO) in June 2014. A GAO report released in November 2017 assessed the quality of data reported by agencies in May 2017 under new DATA Act standards. GAO identified issues and challenges with the completeness and accuracy of the data submitted, use of data elements, and disclosure of data limitations on what was, at the time, a beta version of the new USAspending.gov website. The beta version has since become the official site as of March 2018 and the previous version is no longer available. According to a note on the site, data quality and display improvements will be continually made on a rolling basis. Users of USAspending.gov should be aware that although search results may be useful for informing consideration of certain questions, these results may also be incomplete or contain inaccuracies. "], "subsections": []}, {"section_title": "USAspending.gov Background", "paragraphs": [], "subsections": [{"section_title": "Origins", "paragraphs": ["FFATA required OMB to create a public database of all federal funds awarded to the final recipient level. The DATA Act followed eight years later and required the Department of the Treasury and OMB to develop government-wide data standardization to consolidate, automate, and simplify reports on grant awards and contracts to improve underreporting and inconsistencies as identified by GAO. These requirements in the DATA Act were intended to expand on the transparency efforts originally mandated by FFATA, specifically by", "disclosing direct agency expenditures and linking federal contract, loan, and grant spending information to federal agency programs; establishing government-wide data standards for financial data and providing consistent, reliable, and searchable data that are displayed accurately; simplifying reporting, streamlining reporting requirements, and reducing compliance costs, while improving transparency; and improving the quality of data submitted to USAspending.gov by holding agencies accountable.", "In addition, no later than four years after enactment (by spring 2018), Treasury and OMB must ensure that all information published on USAspending.gov conforms to government-wide data standards. OMB is also required to issue guidance so that all agencies can follow government-wide data standards when reporting on grantee and contractor awards. "], "subsections": []}, {"section_title": "Types and Timing of Data", "paragraphs": ["The data in USAspending.gov are submitted by federal agencies and represent awards, including grants, contracts, loans, and other financial assistance (e.g., Medicare benefits, food stamps, unemployment benefits). USAspending.gov does not include data on actual spending by recipients. Federal agencies are required to submit reports on awards transactions within 30 days after transactions are implemented. There may be a longer lag-time with data from the Department of Defense, generally 90 days. "], "subsections": []}, {"section_title": "Site Features", "paragraphs": ["USAspending.gov enables congressional staff and the public to search back to FY2008 for prime and subaward data by state, congressional district, and other jurisdictions. The site includes the following features: ", "Advanced Award Search of prime and subaward data back to FY2008 allows filtering by award type, awarding agency, recipient, country, state, zip, county, CD, and other criteria. To identify where money is being spent, search on Place of Performance versus Recipient Location . Search results include awards that are active during the selected fiscal year, regardless of when the award initially started. Details on an individual award, including transaction history and subawards, may be viewed by clicking on the Award ID . The results list displayed can be downloaded at either the award or transaction level, along with additional details about each award, into a spreadsheet. The advanced search is currently being developed and improved on a rolling basis, so new features may have become available since the publication of this report. Spending Explorer enables \"big picture\" browsing of federal spending obligations and offers interactive data visualization by budget function, agency, and object class. With this tool, users can see the budget function breakdown by categories, such as Social Security, Medicare, and national defense; obligated amounts by agency; and obligations by object class categories, such as grants, contracts, and personnel compensation and benefits. Profile s Tab includes the following subtabs: Agencies features data on each agency's total budgetary resources, a dollar amount that has been obligated (or committed to be spent) against those budgetary resources, the breakdown of these obligations by object class, and the federal accounts through which the obligations are administered. Federal Accounts features a list of nearly 2,000 federal accounts through which users can track spending obligations. Data in this section are presented visually through graphs and other infographics. States provides tables, interactive maps, and graphs showing a breakdown of a total awarded amount to each state back to FY2008. Breakdowns include totals by award type, county, and CD. Profiles also include top five rankings in various categories, such as awarding agencies and recipients. Recipients contains profiles of entities that have received federal awards in the form of contracts, grants, loans, or other financial assistance back to FY2008. Profiles include data on award trends over time and top five rankings in various categories. Download Center allows bulk exporting of large, pregenerated award data sets by agency, award type, and fiscal year through the Award Data Archive . The custom download pages\u2014 Custom Award Data and Custom Account Data (which covers all spending data, including nonaward spending)\u2014also allow downloading of large data sets but provide additional filtering options."], "subsections": []}, {"section_title": "Issues with Tracking Awards", "paragraphs": ["In addition to the data quality problems in USAspending.gov mentioned earlier, the following issues should be taken into consideration."], "subsections": [{"section_title": "Recipient Location Versus Place of Performance", "paragraphs": ["As recipients of federal grant funding, state and local governments may provide services directly to beneficiaries. Alternatively, a state may act as a pass-through, redisbursing federal grant funding to localities using a formula or a competitive process through subgrants or subcontracts. Both federal grant and procurement awards thus may have a where awarded vs. where spent component that is not fully identified in grant or procurement records. ", "For example, most federal grant funding is awarded to states, which then subaward or subcontract to eligible recipients elsewhere in the state (see Figure 1 ) . So, a project's place of performance (where the award is spent) may therefore differ from the initial recipient location (where the funding is awarded). ", "In addition, a funding award may pass through multiple different jurisdictions (in different CDs) before reaching the final place of performance. For example", "Federal grants may go first to the state (the state capital, in one CD), then be distributed to a city or county government (in one or more additional CDs), which then may pass the funds to an organization that spends the money in other CDs. A CD in which a state capital is located may appear to receive more federal funds than other CDs in the state, but searching USAspending.gov data by place of performance rather than recipient location would identify data by the project location. Procurement awards may be given to a corporation headquartered in one state (and one CD), but the company may spend the money manufacturing the purchased product at one or more of its manufacturing facilities in one or more additional states (and CDs)."], "subsections": []}, {"section_title": "Congressional District Data", "paragraphs": ["The USAspending.gov advanced award search enables filtering by state and congressional district. When searching for CD data, note the following:", "For CD data, search USAspending.gov by place of performance rather than recipient location to identify awards by project location (see \" Recipient Location Versus Place of Performance ,\" above). Use caution when comparing CD data over time. During decennial redistricting, CD borders and numbers may change, but past data are not revised to account for redistricting. For example, comparing data from the 115 th or 114 th Congress with earlier data must take into account new district borders created by the 2010 decennial redistricting. Other geographic search options, such as by zip code or county, could be used to track funds within a CD, although borders may not exactly align. CDs that include state capitals will appear to receive more federal funds because states are prime recipients of federal block and formula grants. State Administering Agencies (SAAs) then pass through or subaward federal funding for projects throughout the state."], "subsections": []}]}]}, {"section_title": "Other Data Sources", "paragraphs": [], "subsections": [{"section_title": "Federal Procurement Data System", "paragraphs": ["The General Services Administration (GSA) maintains the Federal Procurement Data System\u2013Next Generation (FPDS\u2013NG) at https://www.fpds.gov/fpdsng_cms/index.php/en/ , which contains statistical information on federal contracts. The FPDS\u2013NG", "serves as the source of USAspending.gov contracts data; makes available Federal Procurement Reports from FY2000 forward on its website; includes data on contracts of more than $25,000 and summary data of procurements less than $25,000; and provides selected search capabilities by state (including aggregate county statistics), contractor name, and product or service category.", "For more refined searching, such as by CD, the FPDS Help Desk can guide congressional staff and the public through filtering for data needed (called ad hoc reports )."], "subsections": []}, {"section_title": "Federal Audit Clearinghouse", "paragraphs": ["States, local governments, and nonprofits (including universities) spending $750,000 or more in federal grants during a fiscal year are required to submit an audit detailing expenditures. Data from the audits are posted on the Census Bureau's Federal Audit Clearinghouse site, at https://harvester.census.gov/facweb/Default.aspx . No printed documents are produced.", "Because the audit data are for the fiscal year of the filing agency or organization (which may differ from the federal fiscal year), they are not comparable with data from any other federal source. Searches may be conducted by organization or institution, Catalog of Federal Domestic Assistance (CFDA) program number, and geographic location (by city or state but not by congressional district). See search options at https://harvester.census.gov/facweb/ . "], "subsections": []}, {"section_title": "U.S. Budget: Aid to State and Local Governments", "paragraphs": ["The Analytical Perspectives volume of the President's budget covers various topics, including \"Aid to State and Local Governments\" (Chapter 17 in the FY2020 report). Federal grants-in-aid to state and local governments, U.S. territories, and American Indian tribal governments are intended to support government operations or the provision of services to the public. Grants are most often awarded as direct cash assistance, but federal grants-in-aid also can include payments for grants-in-kind\u2014nonmonetary aid such as commodities purchased for the National School Lunch Program. Federal revenues shared with state and local governments also are considered grants-in-aid.", "The FY2020 budget proposes $751 billion in outlays for aid to state and local governments, an increase of less than one percent from FY2019. Individual program tables with state-by-state obligation data for grants-in-aid programs to state and local governments may be found on the OMB website. Tables 17-3 through 17-39 show state-by-state obligations for 35 federal grants-in-aid programs.", "Federal grants generally fall into one of two broad categories\u2014categorical grants or block grants, depending on the requirements of the grant program. In addition, grants may be characterized by how the funding is awarded, such as by formula, by project, or by matching state and local funds. As recipients of federal grant funding, state and local governments may provide services directly to beneficiaries or states may act as a pass-through, disbursing grant funding to localities using a formula or a competitive process. As discussed above, this pass-through, or subawarding, at the state level makes tracking federally originated funds to the final recipient a challenge."], "subsections": []}, {"section_title": "Federal Aid to States and the Consolidated Federal Funds Report", "paragraphs": ["These Census Bureau reports, published from FY1983 to FY2010 and available at https://www.census.gov/govs/pubs/title.html , were the federal government's primary documents summarizing the geographic distribution of federal monies to states and counties, whether grants, contracts, or appropriations. The FY2010 Federal Aid to States (FAS) and Consolidated Federal Funds Report (CFFR) were the last reports issued due to the termination of the Census Bureau's Federal Financial Statistics program. Federal obligations data continue to be posted on\u00a0USAspending.gov, now the official source collecting federal awards data. ", "FAS covered federal government expenditures to state and local governments and presented figures to the state level by program area and agency. CFFR included payments to state and local governments as well as to nongovernmental recipients. Dollar amounts reported represented either actual expenditures or obligations (see CFFR introduction and source notes for each table or graph). CFFR provided data to the state and county level for grants, salaries and wages, procurement contracts, direct payments for individuals, other direct payments, direct loans, guaranteed or insured loans, and insurance. Although CFFR indicated congressional districts (one or more) for each county, it did not give separate data by CD."], "subsections": []}, {"section_title": "Selected Agency Grant Awards Databases and Information", "paragraphs": ["USAspending.gov collects brief data on all federal grants and contracts awarded. However, some agencies, in particular those awarding research grants, also continue to post information on their own websites.", "Department of Agriculture (USDA) ", "Current Research Information System https://cris.nifa.usda.gov/ Ongoing agricultural, food science, human nutrition, and forestry research, education and extension activities, with a focus on the National Institute of Food and Agriculture (NIFA) grant programs. Projects are conducted or sponsored by USDA research agencies, state agricultural experiment stations, land-grant universities, other cooperating state institutions, and participants in NIFA-administered grant programs, including Small Business Innovation Research and the Agriculture and Food Research Initiative. ", "Department of Education (ED)", "Institute of Education Sciences, Funded Research Grants and Contracts http://ies.ed.gov/funding/grantsearch/index.asp", "Department of Health and Human Services (HHS)", "Tracking Accountability in Government Grants System (TAGGS) http://taggs.hhs.gov/AdvancedSearch.cfm Database of awards from HHS and its subsidiaries. National Institutes of Health (NIH) Research Portfolio Online Reporting Tools RePORTER http://projectreporter.nih.gov/reporter.cfm Includes projects funded by the NIH, Administration for Children and Families, Agency for Health Care Research and Quality, Centers for Disease Control and Prevention, Food and Drug Administration, and the U.S. Department of Veterans Affairs. National Library of Medicine (NLM) https://hsrproject.nlm.nih.gov/ Database of ongoing health services research and public health projects, whether government, corporate, or private. ", "Department of Homeland Security (DHS)", "Federal Emergency Management Agency (FEMA), Public Assistance Grant Awards Activity 2013-2016: https://www.fema.gov/media-library/assets/documents/30731 2017-2019: https://www.fema.gov/media-library/assets/documents/128200 Daily activity of Public Assistance Grant Awards, including FEMA region, state, disaster declaration number, event description, mission assigned agency, assistance requested, obligated federal dollars, and date of obligation.", "Department of Justice (DOJ)", "Office of Justice Programs (OJP), OJP Grant Award Data http://ojp.gov/funding/Explore/OJPAwardData.htm ", "Department of Labor (DOL)", "Employment and Training Administration (ETA), Grants Awarded http://www.doleta.gov/grants/grants_awarded.cfm", "Environmental Protection Agency (EPA)", "Grant Awards Database https://yosemite.epa.gov/oarm/igms_egf.nsf/HomePage?ReadForm Contains a summary record for all nonconstruction EPA grants awarded in the last 10 years plus grants that were awarded before that time that are still open. EPA Active Contracts Listing https://www.epa.gov/contracts/epa-active-contracts-listing Lists of all currently active EPA Contracts. The listing is available by Contract Number and by Vendor Name.", "Institute of Museum and Library Services (IMLS)", "IMLS Awarded Grants http://www.imls.gov/recipients/grantsearch.aspx", "National Endowment for the Arts (NEA)", "Grant Search https://apps.nea.gov/grantsearch/ NEA grants awarded since 1998.", "National Endowment for the Humanities (NEH)", "Funded Projects https://securegrants.neh.gov/publicquery/main.aspx", "National Science Foundation (NSF) ", "NSF Awards http://www.nsf.gov/awardsearch/ Includes data from 1989 to the present. Research.gov is a partnership of federal research-oriented grant-making agencies led by the NSF http://www.research.gov/research-portal/appmanager/base/desktop?_nfpb=true&_eventName=viewQuickSearchFormEvent_so_rsr&wtlink=RSR_Search_homepage . ", "Small Business Innovation Research (SBIR) and Small Business Technology Transfer\u00a0(STTR) ", "SBIR and STTR Awards https://www.sbir.gov/sbirsearch/award/all The SBIR/STTR program's mission is to stimulate technology innovation by strengthening the role of innovative small business in federal research and development. Currently, 11 federal agencies participate in the program: the Departments of Agriculture, Commerce (National Institute of Standards and Technology and the National Oceanic and Atmospheric Administration), Defense, Education, Energy, Health and Human Services, Homeland Security, and Transportation, and the Environmental Protection Agency, National Aeronautics and Space Administration, and National Science Foundation.", "Transportation Research Board (TRB) ", "Research in Progress http://rip.trb.org/ View projects by subject, individuals, or organizations."], "subsections": []}]}, {"section_title": "Further Reading", "paragraphs": ["Data Foundation and Deloitte, \"DATA Act 2022: Changing Technology, Changing Culture,\" report, May 2017, at http://www.datafoundation.org/data-act-2022/ .", "U.S. Senate, Permanent Subcommittee on Investigations, Committee on Homeland Security and Governmental Affairs, \"Federal Agency Compliance with the DATA Act,\" report, July 2018, at https://www.hsgac.senate.gov/subcommittees/investigations/media/new-psi-report-details-failure-of-federal-agencies-to-submit-accurate-data-on-how-they-spend-taxpayer-dollars . ", "Urban Institute, \"Follow the Money: How to Track Federal Funding to Local Governments,\" research report, February 26, 2018, at https://www.urban.org/research/publication/follow-money-how-track-federal-funding-local-governments ."], "subsections": []}]}}
{"id": "R45693", "title": "Tax Equity Financing: An Introduction and Policy Considerations", "released_date": "2019-04-17T00:00:00", "summary": ["This report provides an introduction to the general tax equity financing mechanism. The term tax equity investment describes transactions that pair the tax credits or other tax benefits generated by a qualifying physical investment with the capital financing associated with that investment. These transactions involve one party agreeing to assign the rights to claim the tax credits to another party in exchange for an equity investment (i.e., cash financing). The exchange is sometimes referred to as \"monetizing,\" \"selling,\" or \"trading\" the tax credits. Importantly, however, the \"sale\" of federal tax credits usually occurs within a partnership or contractual agreement that legally binds the two parties.", "Three categories of tax credits that either currently use or have recently used this mechanism are presented in this report to help explain the structure and function of tax equity arrangements. These include the low-income housing tax credit (LIHTC); the new markets tax credit (NMTC); and two energy-related tax credits\u2014the renewable electricity production tax credit (PTC) and energy investment tax credit (ITC). While these credits all use the tax equity financing mechanism, no two credits do so in the same manner. The economic rationale for subsidizing the activities targeted by these tax credits is not evaluated. Instead, this report focuses on explaining the structure and functioning of tax equity arrangements, analyzing the delivery of federal financial support using this mechanism, and discussing various policy options related to tax credits that rely on tax equity.", "Four policy options are presented to help Congress should it consider modifications to an existing tax equity program, or create a new one. The options are with respect to the general tax equity approach and include making the credits refundable, converting the credits to grants, allowing for the direct transfer of credits, and accelerating the credit claim periods. This list of options is not exhaustive. Due to important differences in the underlying structure of various current or future credits, some options may be better suited for particular credits than others. Careful consideration on a case-by-case basis is part of evaluating the appropriateness of each option.", "Consideration of various options might ask whether the use of tax equity markets is an efficient and effective means of delivering federal financial support. At first glance, it may appear that the government would get more \"bang for its buck\" by delivering subsidies more directly, without a role for tax equity markets. However, such a conclusion overlooks one role that tax equity investors play in some industries in addition to providing financing: they evaluate the quality of projects before investing, as well as provide continuing oversight and compliance monitoring. Effectively, the tax equity mechanism outsources a portion of the oversight and compliance monitoring to investors in exchange for a financial return. On the one hand, there may be value to the federal government in being able to rely on outside investors to provide oversight and monitoring. On the other hand, for some tax equity programs that have a government entity overseeing participant compliance, the monitor role of investors may be redundant. There also may be ways to improve the current delivery approach."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The federal government subsidizes a wide range of activities through the tax code. The majority of available tax incentives are claimed directly by the party engaged in the activity targeted by the subsidy. There are several tax credits, however, that often require or encourage the intended beneficiary of the subsidy to partner with a third party to use the tax incentive. This may happen because the tax credits are nonrefundable and the intended beneficiary of the tax credit has little or no tax liability (e.g., a nonprofit), or because the credits are delivered over multiple years whereas upfront funding is needed to break g round. This situation often results in a tax equity transaction\u2014the intended beneficiary of the tax credit agrees to transfer the rights to claim the credits to a third party in exchange for an equity financing contribution. One estimate placed the size of the tax equity market in 2017 at $20 billion. ", "This report provides an introduction to the general tax equity financing mechanism. To facilitate the presentation of the tax equity approach to subsidization, three categories of tax credits that either currently use or have recently used this mechanism are examined: the low-income housing tax credit (LIHTC); the new markets tax credit (NMTC); and two energy-related tax credits\u2014the renewable electricity production tax credit (PTC) and energy investment tax credit (ITC). This report does not evaluate the economic rationale for subsidizing the activities targeted by these tax credits, and does not analyze whether these subsidies increase net investment in these activities. Instead, this report focuses on explaining the structure and functioning of tax equity arrangements. "], "subsections": []}, {"section_title": "Tax Equity Investments", "paragraphs": ["T ax equity investment is not a statutorily defined term, but rather identifies transactions that pair the tax credits or other tax benefits generated by a qualifying physical investment with the capital financing associated with that investment. These transactions involve one party agreeing to assign the rights to claim the tax credits to another party in exchange for an equity investment (i.e., cash financing). The exchange is sometimes referred to as \"monetizing,\" \"selling,\" or \"trading\" the tax credits. Importantly, however, the \"sale\" of federal tax credits occurs within a partnership or contractual agreement that legally binds the two parties to satisfy federal tax requirements that the tax credit claimant have an ownership interest in the underlying physical investment. This makes the trading of tax credits different than the trading of corporate stock, which occurs between two unrelated parties on an exchange. The partnership form also allows for income (or losses), deductions, and other tax items to be allocated directly to the individual partners. In some cases, nonprofit entities can form a partnership with taxable investors and benefit from tax credits through this relationship. "], "subsections": [{"section_title": "Overview of Structure and Mechanics", "paragraphs": ["While the specifics of a tax equity arrangement vary depending on the project and tax credit program involved, these deals often share some general common structural features. Figure 1 provides a graphical summary of the structure and mechanics of one kind of project that relies on tax equity investment. ", "The process begins with a developer, also sometimes referred to as a \"sponsor,\" identifying a potential project eligible for federal tax credits. For projects where an application is required, the developer will apply to the entity in charge of awarding the credits. At the same time, the developer will seek out potential investors willing to contribute equity capital in exchange for the tax credits expected to be awarded. A developer can partner directly with an investor, or, as is also common, partner with a tax credit \"syndicator\" that manages a tax credit fund for multiple investors that may not have the expertise to partner directly with a developer, or that may want to diversify their tax equity investment portfolio. The syndicator will earn a syndication fee for identifying, evaluating, and managing tax equity investments for the fund. Regardless of whether the partnership with investors is direct or via a syndicator, the tax equity investors are typically large corporations with predictable tax liabilities. ", "The developer and investors will negotiate how much equity capital will be contributed in exchange for the right to claim the tax credits and other tax benefits. As previously mentioned, this is commonly referred to as the \"selling,\" \"trading,\" or \"monetizing\" of tax credits. The tax equity investors will serve as the \"limited\" partners in the partnership, meaning they generally have a passive role and do not participate in management decisions. The developer will serve as the \"general\" partner overseeing day-to-day operations in exchange for a fee and possibly any cash distributions the project may generate. The developer may also contribute their own capital to or arrange or coordinate other sources of capital for the project, depending on the particular tax credit program being used. While tax equity investors are not generally required to have an active management role, they have an incentive to monitor the project to ensure it complies with the program's rules, since compliance violations can result in forfeiture of tax credits. "], "subsections": []}, {"section_title": "The Tax Equity Investor's Return", "paragraphs": ["A tax equity investor's return depends on the price paid per credit and associated benefits the investor secures in exchange. In the simplest case, the only benefit the investor receives from the credits is the ability to reduce their tax liability. For example, consider a project that will cost $1.5 million to complete and that will generate $1 million in federal tax credits that its owner is seeking to sell to finance the upfront cost of the project. An outside investor has agreed to contribute 90 cents in equity financing in exchange for each $1.00 of tax credit. Thus, the investor pays (contributes in capital) $900,000 in exchange for $1 million in tax credits. The net return to the investor is $100,000 (in reduced taxes), or 11.1% ($100,000 divided by $900,000). ", "The project developer will need to make up the difference between the project's cost ($1.5 million) and tax equity investor's capital contribution ($900,000). This difference is often referred to as the \"equity gap.\" Possible options for filling the equity gap include traditional loans or equity financing from other sources. The gap could also be filled with additional federal, state, or local subsidies. These might be grants, below-market-rate loans, or other tax incentives. ", "Depending on the structure of the arrangement, the tax equity investor may also secure other benefits, such as additional state and federal tax incentives, a claim to operating income and losses, a share of any capital gains when the underlying investment is sold, or goodwill with the community or regulators. With regard to regulatory-driven motives, investments in LIHTC and NMTC projects, for example, can assist financial institutions in satisfying requirements under the Community Reinvestment Act (CRA; P.L. 95-128 ), which is intended to encourage banks to make credit more readily available in low- and moderate-income communities. Tax equity investors in renewable energy projects generally have returns that consist of both tax attributes and operating cash flow to conform to guidance provided by the Internal Revenue Service (IRS).", "The price investors are willing to pay for tax credits not only depends on the benefits attached to the credits, but on factors associated with the underlying project. These factors can include the risk associated with the project, how it is financed, and the time period over which benefits accrue. ", "Due to the complexity of tax equity transactions and the size of investors' tax liabilities they desire to offset, the current federal tax equity mechanism may not, in some cases, be well suited for assisting small individual projects. When possible, tax equity investors typically seek large projects expected to generate a fairly significant amount of credits. ", "Since tax equity investors require a financial return in exchange for providing financial capital, a portion of the subsidy is diverted away from the targeted activity. Returning to the previous example, if a tax equity investor agrees to contribute 90 cents in equity financing per $1.00 of federal tax credit, it means that for every $1.00 in government subsidy (i.e., tax credit), 10 cents is diverted away from subsidizing the underlying activity and to the investor and middlemen. Put differently, every 90 cents in federal subsidy that reaches the targeted industry actually costs the government $1.00 in lost tax revenue. This aspect of the tax equity mechanism is discussed in more detail in the \" Policy Options and Considerations \" section. "], "subsections": []}, {"section_title": "Subsidy Fluctuations", "paragraphs": ["The use of the tax equity mechanism can create fluctuations in the amount of subsidy qualified activities receive. The subsidy flowing into a project depends on the price tax equity investors receive in exchange for their financing contributions. All else equal, higher tax credit prices imply more federal subsidization of the targeted activity per dollar loss of federal tax revenue. Therefore, factors that cause variability in tax credit prices also cause variability in the subsidization rate. This can lead to fluctuation in the subsidy delivered via the tax equity mechanism, even though there has been no direct policy change regarding the tax credit program itself. For example, during the Great Recession, falling corporate tax liabilities reduced investor demand for credits, leading to depressed credit prices. In turn, qualified investments had difficulty raising enough equity to finance projects. To bypass the tax equity mechanism, some credits were temporarily converted into direct grants. ", "Policies enacted by Congress, but not directly related to the underlying tax credit program itself, can also lead to subsidy fluctuations. This occurred most recently with the 2017 tax revision ( P.L. 115-97 ). Although some direct changes were made to several incentives that use the tax equity mechanism, there have also been concerns that the reduction in corporate tax rates and overall corporate tax liabilities could curb investor appetite for credits, and reduce the amount of tax equity investment being offered in the market. With less tax equity being supplied in the market, tax equity investors might demand higher rates of return, which could increase the cost of financing from the perspective of investors in targeted activities. Additionally, the subsidies delivered by LIHTC and NMTC can also vary geographically due to the CRA.", "Policies can also affect the demand for tax equity. For example, with renewable energy tax incentives phasing down, renewable energy investors may have fewer tax credits they are seeking to monetize. Less demand for tax equity could tend to reduce tax equity financing costs from the perspective of investors in targeted activities, reducing the overall rate of return for tax equity investors. "], "subsections": []}]}, {"section_title": "Select Case Studies", "paragraphs": ["While several current federal tax credits use the tax equity financing mechanism, no two credits do so in the same manner. For example, affordable housing developers are awarded LIHTCs by officials in each state who review applications, decisions regarding NMTC applications are made by federal officials, and renewable energy tax credits have no similar application and review process. The rate of subsidization and time frame over which the various tax credits may be claimed are also different, as are many of the intricacies of the rules and requirements of each. This section reviews three large tax credits that employ the tax equity financing mechanism to illustrate the various ways the approach is used in practice."], "subsections": [{"section_title": "Low-Income Housing Tax Credit", "paragraphs": ["The LIHTC program was created by the Tax Reform Act of 1986 ( P.L. 99-514 ) to replace various affordable housing tax incentives that were viewed as inefficient and uncoordinated at the time. The tax credits are given to developers over a 10-year period in exchange for constructing affordable rental housing. Originally scheduled to expire in 1989, the program was extended several times before being made permanent in the Omnibus Budget Reconciliation Act of 1993 ( P.L. 103-66 ). According to the Joint Committee on Taxation's (JCT's) most recent tax expenditure estimates, the LIHTC is estimated to cost the government an average of approximately $9.9 billion annually in reduced federal tax revenues.", "The mechanics of the program are complex. The process begins at the federal level, with each state receiving an annual LIHTC allocation based on population. In 2019, states received an LIHTC allocation of $2.75625 per person, with a minimum small-population state allocation of $3,166,875. These amounts reflect a temporary increase in the amount of credits each state received as a result of the 2018 Consolidated Appropriations Act ( P.L. 115-141 ). The increase is equal to 12.5% above what states would have received absent P.L. 115-141 , and is in effect through 2021. ", "State or local housing finance agencies (HFAs) then award credits to developers using a competitive application process to determine which developers receive a credit award. HFAs review developer applications to ensure that proposed projects satisfy certain federally required criteria, as well as criteria established by each state. For example, some states may choose to give priority to buildings that offer specific amenities such as computer centers or that are located close to public transportation, while others may give priority to projects serving a particular demographic, such as the elderly. Delegating authority to HFAs to award credits gives each state the flexibility to address its individual housing needs, which is important given the local nature of housing markets.", "Upon receipt of an LIHTC award, developers typically \"sell\" the tax credits to investors in exchange for an equity investment. This transaction occurs within a partnership structure and in a manner similar to the generalized example discussed in the previous section. While LIHTC prices fluctuate over time and geographic regions, they typically range from the mid-$0.80s to mid-$0.90s per $1.00 of tax credit. In addition to the tax credits, the equity investor may also receive tax benefits related to any tax losses and other deductions, as well as residual cash flow. "], "subsections": []}, {"section_title": "New Markets Tax Credit", "paragraphs": ["The NMTC program was created by the Community Renewal Tax Relief Act of 2000 ( P.L. 106-554 ) to provide an incentive to stimulate investment in low-income communities (LICs). The original allocation authority eligible for the NMTC program was $15 billion from 2001 to 2007. Congress subsequently increased the total allocation authority to $61 billion and extended the program through 2019. The tax credits are awarded to community development entities (CDEs) to make eligible low-income community investments. According to JCT's most recent tax expenditure estimates, the NMTC is estimated to cost the government an average of approximately $1.2 billion annually in reduced federal tax revenues.", "The process by which the NMTC affects eligible low-income communities involves multiple agents and steps. The multiple steps and agents are designed to ensure that the tax credit achieves its primary goal: encouraging investment in low-income communities. For example, the Department of the Treasury's Community Development Financial Institutions Fund (CDFI) reviews NMTC applicants submitted by CDEs, issues tax credit authority to those CDEs deemed most qualified, and plays a significant role in program compliance.", "To receive an allocation, a CDE must submit an application to the CDFI, which asks a series of standardized questions about the CDE's track record, the amount of NMTC allocation authority being requested, and the CDE's plans for any allocation authority granted. The application is reviewed and scored to identify those applicants most likely to have the greatest community development impact and ranked in descending order of aggregate score. Tax credit allocations are then awarded based upon the aggregate ranking until all of the allocation authority is exhausted. ", "Upon receipt of an NMTC award, developers often \"sell\" the tax credits to investors in exchange for an equity investment. This transaction typically occurs through a limited liability corporation obtaining a loan from a bank and combining the loan proceeds with the tax credit proceeds to invest in the low-income community. While NMTC prices fluctuate over time, geographic regions, and the business cycle, they typically range from the mid-$0.70s to mid-$0.80s per $1.00 of tax credit. Unlike the LIHTC investor, the NMTC equity investor does not generally receive tax benefits related to any tax losses and other deductions. "], "subsections": []}, {"section_title": "Energy Tax Credits", "paragraphs": ["Investment tax credits for renewable energy date back to the late 1970s. The production tax credit (PTC) for renewable energy was enacted in the Energy Policy Act of 1992 ( P.L. 102-486 ). In recent years, the cost of both of these incentives has increased, as investment in renewable energy technologies has accelerated. For FY2018, the JCT estimates tax expenditures for the renewable energy investment tax credit (ITC) will be $2.8 billion. Tax expenditures estimates for the PTC are $5.1 billion for FY2018. Most of the forgone revenue associated with the ITC is attributable to solar ($2.5 billion of the $2.8 billion for all eligible technologies). In the case of the PTC, most of the forgone revenue is associated with tax credits claimed for using wind to produce electricity ($4.7 billion of the $5.1 billion for all eligible technologies). ", "The energy credit for solar is 30% of the amount invested in solar projects that start construction before the end of calendar year 2019. In 2020, the credit rate is reduced to 26% for property beginning construction in 2020, before being reduced again to 22% in 2021. For property that begins construction after 2021, the credit is 10%. As an investment credit, the ITC is generally claimed in the year the property is placed in service. The energy credit may be recaptured, meaning a taxpayer must add all or part of the tax credit to their tax liability, if a taxpayer disposes of the energy property or ceases to use the property for the purpose for which a tax credit was claimed. The recapture period is five years.", "The PTC is a per-kilowatt-hour (kWh) tax credit that can be claimed for the first 10 years of qualified renewable energy production. In 2018, the tax credit for wind was 2.4 cents per kWh. The amount of the credit is adjusted annually for inflation. Since 2009, taxpayers have had the option of electing to receive an ITC in lieu of the PTC. Wind or solar projects that began construction in 2009, 2010, or 2011 had an option to elect to receive a one-time grant in lieu of tax credits. Using tax equity financing arrangements has allowed developers to monetize the tax benefits, essentially trading future tax benefits for upfront capital. ", "The ITC and PTC were not designed as tax equity incentives. Rather, they were intended to subsidize investment in and production of renewable energy. Unlike the LIHTC and the NMTC, the energy tax credits were not intended to rely on taxpayer investors to deliver the subsidy. In the case of the PTC, when enacted, it was anticipated that tax credits would be claimed for electricity produced at facilities owned by the taxpayer and later sold by the taxpayer. Over time, however, partnerships began to form to efficiently use tax benefits. ", "Recognizing that tax equity transactions were being undertaken with respect to wind development, in 2007 the IRS released Revenue Procedure 2007-65, which established a safe harbor under which the allocation of tax credits in a tax equity partnership structure would not be challenged as long as certain ownership requirements were met. While separate guidance has not been issued for solar projects claiming the ITC, industry practice has generally been to follow the safe harbor guidance provided to wind projects claiming the PTC.", "Partnership flips are a common tax equity financing structure in renewable energy markets. Under a partnership flip structure, a renewable energy developer partners with a third-party tax equity investor. The tax equity investor has (or expects to have) sufficient tax liability to use the tax credits associated with the renewable energy investment or production. The tax equity investor and renewable energy developer establish a partnership, which is the project company. The tax equity investor may provide upfront cash to the project company, in exchange for production or investment tax credits, depreciation, interest deductions, and operating income. ", "During the initial phase of the project, the tax equity investor will receive most of the tax benefits, as well as the income or loss (often the share is 99%). The developer retains a small allocation of tax benefits and income (profit or loss). Once the tax equity investor has achieved a targeted internal rate of return (IRR), the partners' interests in the project company will flip, with the developer now receiving most of the tax benefits and income (profit or loss) associated with the project (typically 95%, leaving the tax equity investor with 5%). The developer may also buy out the tax equity investor, such that the tax equity investor no longer owns any part of the project.", "Tax equity generally provides a portion of a project's capital needs\u2014somewhere from 30% to 60%, depending on the specifics of the project. For renewable energy projects, tax equity is generally more expensive than other sources of debt financing. For example, tax equity investors require rates of return that are 7% to 10% higher than the return on a comparable debt product. Tax equity yields (or the after-tax return required by tax equity investors) can vary widely across energy projects, but often fall in the 6% to 8% range, depending on the technology and specifics of the project. "], "subsections": []}]}, {"section_title": "Policy Options and Considerations", "paragraphs": ["There are a range of policy options to consider when it comes to using tax equity markets to monetize tax benefits. For existing programs and new tax policies that could involve tax equity transactions, consideration of various options might ask whether the use of tax equity markets is an efficient and effective means of delivering federal financial support. At first glance, it may appear that the government would get more \"bang for its buck\" by structuring the subsidy delivery mechanism to eliminate investors. However, such a conclusion overlooks one role that tax equity investors often play in addition to providing financing: tax equity investors evaluate the quality of projects before investing, as well as provide continuing oversight and compliance monitoring. Effectively, the tax equity mechanism outsources a portion of the oversight and compliance monitoring to the investors in exchange for a financial return. There may be value to the federal government in being able to rely on outside investors to provide oversight and monitoring. It could be argued, though, that for some tax equity programs that have a government entity overseeing participant compliance, the monitor role of investors is redundant.", "This section presents several policy options frequently discussed in debates regarding tax equity. The options are with respect to the general tax equity approach. Due to important differences in the underlying structure of various current or future credits, some options may be better suited for particular credits than others. Careful consideration on a case-by-case basis is part of evaluating the appropriateness of each option. The list of options presented here is by no means exhaustive. "], "subsections": [{"section_title": "Make the Credits Refundable", "paragraphs": ["Making the tax credits refundable could, in some cases, reduce or eliminate the need for tax equity. In other cases, making the tax credits refundable could reduce the cost of such financing for those who still need to access tax equity markets. ", "All the tax credits currently using the tax equity approach are nonrefundable. Nonrefundable credits have value only to the extent that there is a tax liability to offset. In contrast, refundable credits have value regardless of tax liability. For example, if a developer has $1,000 in refundable tax credits and no tax liability, they may claim the credits and receive a tax refund of $1,000. Thus, fully refundable credits are similar to direct grants administered through the tax system. ", "Even if the relevant tax credits were made refundable, there could still be a role for tax equity investment. Current tax credits relying on tax equity are delivered over multiple years or when the investment in qualifying property is complete and tax returns are filed. Project developers, however, typically need upfront capital to make their investments. Thus, developers (for-profit and nonprofit) may still choose to rely on tax equity markets to monetize tax credits even if they were refundable. Alternatively, allowing tax credits to be refundable could make it easier for projects to rely on debt financing. Lenders may be more willing to lend on favorable terms to a project that expects a refundable tax benefit in the future. ", "Moving to refundable credits could potentially increase the amount of subsidy per dollar of federal revenue loss. That is, it could increase the efficiency of the subsidy delivery mechanism and result in more of the targeted activity taking place. As discussed previously, all else equal, higher tax credit prices imply there is more federal subsidization per dollar loss of federal tax revenue. With refundable tax credits, current tax equity investors would be expected to pay more for each tax credit because the risk of not having sufficient tax liability to use the credits would be removed. Additionally, potential investors who are currently not purchasing tax credits because of uncertainty over their ability to use nonrefundable tax credits may enter the market now that the uncertainty is gone. This would add to the competition among investors and would likely put upward pressure on tax credit prices, further enhancing the subsidy mechanism.", "Transitioning to refundable business tax credits raises two potential concerns. The first is the federal cost. Refundable tax credits typically result in a large revenue loss because they may be fully utilized regardless of tax liability, whereas nonrefundable credits may be claimed only to the extent there is a tax liability, which can result in a portion of nonrefundable credits ultimately going unused. This concern is likely less of an issue with LIHTC and NMTC, since few of these tax credits currently go unclaimed. This implies that converting these to refundable credits would likely not result in a significant increase in federal revenue loss. ", "Making the energy credits (PTC and ITC) refundable could result in considerable federal revenue loss. ITCs and PTCs that are currently carried forward and ultimately go unused under current law could instead be claimed immediately by taxpayers. For energy tax credits, many are claimed without the involvement of tax equity investors. Tax equity investors typically require projects to be of a certain size (i.e., generate a certain amount of tax benefits) to invest. As a result, there are many PTC- and ITC-eligible projects that are not able to monetize tax benefits using tax equity investors. Making energy tax credits refundable could (1) make the tax credits more attractive to developers that are not currently participating in tax equity markets; and (2) reduce the cost of tax equity for developers that are participating. Without a cap on the amount of ITCs or PTCs that can be claimed, if policy changes were made that increased demand for credits, the cost associated with delivering those credits would increase. One option to address concerns about the potential cost associated with an unlimited tax credit would be to limit the amount of tax credits that could be claimed. ", "There is some experience with refundable energy tax credits. The energy tax credits enacted for wind and solar in the late 1970s were refundable, although legislation was enacted to make the credits nonrefundable in 1980. Also, several states offer tax credits designed to promote renewable energy that are refundable. ", "The second concern is allowing businesses to claim a refundable tax credit generally. Refundable tax credits are a useful tool for providing income support via the tax code. For this reason, refundable tax credits have generally been reserved for households, and mostly for lower-income households. Some may take issue with allowing businesses to access an income-support tax incentive. Others assert that allowing the credits to be refundable would likely result in each dollar of federal tax revenue loss yielding more subsidy flowing into the intended activity."], "subsections": []}, {"section_title": "Convert to Grants", "paragraphs": ["The tax credits could be replaced with grants. A concern with the current tax equity mechanism is the amount of subsidy that is diverted away from the underlying activity and toward third-party investors and middlemen. Even if the tax credits were fully refundable, as discussed above, tax equity might still be used to monetize tax credits to get upfront financing. Nonprofit entities that do not file federal income tax returns would also not generally benefit directly from an incentive delivered through the tax code. Another concern with the current tax equity structure that has already been mentioned is that it can potentially create a bias toward larger-scale projects because of tax credit investors' appetite for credits combined with the cost savings from evaluating and monitoring fewer projects.", "One way to potentially overcome or mitigate these concerns would be to provide lump-sum grants. The effective subsidy would correspond to the federal revenue loss, and there would no longer be a bias toward larger projects resulting from the way the subsidy was delivered. The tradeoff, however, is that there would be no outside investors scrutinizing the long-term feasibility of potential projects or monitoring compliance after construction\u2014though a mechanism such as that used to award NMTCs may help address this concern. Thus, there could be an increase in project failure and noncompliance, without the federal government (and in some cases, state governments) filling the role of tax credit investors. Carefully designed recapture provisions would also be needed in the case of project failure. In the end, replacing tax credits with grants would likely increase government administrative costs that could offset the increased subsidy flowing to the projects from the removal of tax credit investors.", "An option for maintaining the role of investors would be to deliver a portion of the tax credits as upfront grants, and deliver the remaining tax credits over time. To maintain a feasible tax credit market and investor participation, the proportion of grant funding would have to be such that enough developers sold their remaining tax credits. It is not clear exactly what proportion would achieve the appropriate balance, although there are several options. The federal government could statutorily determine a particular split, such as 50% grants and 50% tax credits. For programs primarily administered by states, such as the LIHTC, the decision could be left to the states. Alternatively, developers could request that a specific amount of their funding be in the form of grants up to a certain percentage. In any case, if enough developers chose not to sell their credits, then the tax credit market would not function well, and project feasibility assessment and compliance monitoring responsibilities would fall on the government. ", "There is recent precedent for allowing grants in lieu of tax credits. During the Great Recession, falling corporate tax liabilities reduced investor demand for credits, leading to depressed credit prices. In response to the general macroeconomic conditions at the time, Congress passed the American Recovery and Reinvestment Act (ARRA; P.L. 111-5 ) in early 2009. The act allowed a portion of LIHTCs to be converted into grants. Renewable energy tax credits also had the option of receiving a grant in exchange for forgoing future tax benefits.", "In the case of the LIHTC, the grants were awarded via the competitive process used for awarding the credits. The need to intervene in tax credit markets highlights that the tax equity mechanism can create fluctuations in the subsidy qualified activities receive, as was discussed in the \" Subsidy Fluctuations \" section.", "In addition, ARRA allowed taxpayers who otherwise would have been eligible for the PTC or ITC to elect to receive a one-time grant from the Treasury in lieu of these tax benefits. Initially, the grant option was to be available for 2009 and 2010, although the policy was later extended such that projects that began construction before the end of 2011 could qualify. Since the grant was designed to be in lieu of existing tax benefits, tax benefits that could be claimed only by tax-paying entities, tax-exempt entities were not eligible. "], "subsections": []}, {"section_title": "Allow the Direct Transfer of Credits", "paragraphs": ["The tax code could be modified to allow the direct transfer of tax credits without having to form a legal partnership. Currently, federal tax law requires tax equity investors to have an ownership interest in the underlying business venture in order to claim the associated tax credits. To meet this requirement, monetization of federal tax credits typically takes place within a partnership structure that legally binds the project's sponsor and investors for a period of time. In contrast, certain states permit state tax credits to be sold directly to investors without the need to establish a legal relationship. ", "Removing the need to form a partnership to invest in tax equity projects could broaden the pool of potential investors. In turn, this could enhance competition for tax credits, resulting in more equity finance being raised per dollar of forgone federal tax revenue. It is unclear, however, what impact the direct transfer of credits would have on deals involving other tax benefits that are often bundled with the tax credits. For example, the section titled \" The Tax Equity Investor's Return \" notes that investors may also secure a claim to other state and federal tax incentives, operating income and losses, capital gains when the underlying investment is sold, or goodwill with the community or regulators.", "A number of issues would need to be addressed before allowing tax credits to be directly transferred. For example, allowing credits to be sold to anonymous investors with no formal ties to the underlying project potentially removes the tax equity investors' oversight incentives, which are a crucial feature of the current approach. Additionally, procedures would need to be implemented to track who has the right to claim the credits and prevent credits from being claimed (or from being recaptured) in instances of noncompliance or project failure. A decision would also need to be made about whether credits could be transferred only once, or if purchasers could resell credits. This would determine the resources needed to accurately track eligible credit claimants. Policymakers would also face the issue of who could participate in this market. Unsophisticated investors may not fully understand the risks or how to properly scrutinize these investments. ", "Some of these issues may be resolved by the market itself if direct transfers were permitted. For example, at the state level, tax credit brokers have emerged to facilitate the exchange of transferable credits. There are also a number of online tax credit exchanges where state tax credits are traded. Brokers or exchanges can provide some level of expertise and guidance on the risks of these transactions. Their services also come at a cost that reduces the subsidy directed to the targeted activity. Imposing reporting requirements on brokers or exchanges may help with the administration of a direct transfer regime. ", "Another option would be to allow more flexibility in transferring tax credits among various project participants. For example, tax-exempt entities engaged in a subsidized activity could be allowed to transfer their tax credit to someone else involved in the project (a designer or builder, or the provider of financing, for example) without entering into a formal partnership. As was the case with general transferability of credits, even allowing more restricted transfer of credits could impose additional administrative and oversight burdens on both taxpayers and the government. "], "subsections": []}, {"section_title": "Accelerate the Credits", "paragraphs": ["Accelerating the credits could potentially reduce the cost of tax equity. This option, however, would not eliminate the need to rely on tax equity markets altogether. Further, this option is most directly applicable to tax credits or other tax benefits that accrue and reduce tax liability over a multiyear period, as opposed to the current tax year. ", "A straightforward way to accelerate the credits would be to shorten the time period over which they are claimed. Alternatively, acceleration could also be achieved by leaving the claim periods unaltered, and frontloading the credits so that a greater proportion could be claimed in the earlier years. Either of these changes would likely increase the amount of equity a developer could raise from a given tax credit award because tax equity investors would be willing to pay a higher price per dollar of tax credit. This, in turn, would result in more subsidy flowing into the targeted investment, and allow for more projects to be undertaken for the same federal revenue loss. ", "Tax equity investors would be willing to pay more if credits were accelerated for two reasons. First, a shorter claim period means that investors would reduce the discount applied to the total stream of tax credits, since they could offset tax liabilities sooner. Second, longer claim periods result in more uncertainty (risk) over whether an investor will have sufficient tax liability to use purchased credits. Accelerating the tax credit reduces that risk, and less risk would lead to current investors being willing to pay higher prices for tax credits. Less risk could also bring new tax equity investors into the market, which would also tend to increase tax credit prices. ", "A concern with accelerating the tax credits is the potential for participants to lose focus on the investment after they have claimed all the credits. This concern could be addressed with a compliance period that is longer than the claim period and with credit recapture. For example, currently LIHTC is claimed over a 10-year period, but investors and developers are subject to a 15-year compliance period. Should the project fall out of compliance with the LIHTC rules in the last five years, the investors are subject to recapture of previously claimed tax credits. For purposes of this example, the claim period could be shortened to five years while leaving the 15-year compliance period in place."], "subsections": []}]}]}}
{"id": "R41479", "title": "Social Security: Revisiting Benefits for Spouses and Survivors", "released_date": "2019-02-06T00:00:00", "summary": ["Social Security auxiliary benefits are paid to the spouse, former spouse, survivor, child, or parent of a Social Security-covered worker and are equal to a specified percentage of the worker's basic monthly benefit amount (subject to a maximum family benefit amount). For example, the spouse of a retired worker may receive up to 50% of the retired worker's basic benefit and the widow(er) of a retired worker may receive up to 100% of the retired worker's basic benefit.", "When auxiliary benefits were first established, most households consisted of a single earner\u2014usually the husband\u2014and a wife who cared for children and remained out of the paid workforce. As a result, benefits for nonworking spouses were structured to be relatively generous. A woman who was never employed but is married to a man with high Social Security-covered wages may receive a Social Security spousal benefit that is higher than the retirement benefit received by a single woman, or a divorced woman who was married less than 10 years, who worked a full career in a low-wage job.", "In recent decades, this household structure has changed in part because women have entered the workforce in increasing numbers. The labor force participation rate of women with children under the age of 18 increased from 47% in 1975 to 70.8% in March 2016. As a result, many women now qualify for Social Security benefits based on their own work records. Women are, however, more likely than men to take breaks in employment to care for family members, which can result in fewer years of contributions to Social Security and employer-sponsored pension plans.", "Beneficiaries who qualify for multiple benefits do not receive both benefits in full, however. For example, for a beneficiary eligible for his or her own retired-worker benefits as well as spousal benefits, the spousal benefit is reduced by the amount of the retired-worker benefit. The beneficiary receives a reduced spousal benefit (if not reduced to zero) in addition to his or her retired-worker benefit. This effectively means the beneficiary receives the higher of the two benefit amounts. Because of this, a two-earner household may receive lower total Social Security benefits than a single-earner household with identical total Social Security-covered earnings.", "Another change since 1939 has been an increase in the number of men and women who remain single or who have divorced. Persons who have never been married, or divorced before 10 years of marriage, do not qualify for Social Security spousal or survivors benefits under current law.", "Proposals to modify the Social Security auxiliary benefit structure are often motivated by desire to improve adequacy for certain beneficiaries, or equity between a two-earner household and a one-earner household with similar earning profiles. For example, some proposals address the adequacy of benefits for certain groups of beneficiaries, such as elderly and widowed women. Although Social Security plays an important role in the retirement security of aged women, about 13.9% of widowed women aged 65 or older, 15.8% of divorced elderly women, and 21.5% of never-married elderly women have family incomes below the official poverty line in 2017."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Social Security provides dependent benefits and survivors benefits , sometimes collectively referred to as auxiliary benefits , to the spouses, former spouses, widow(er)s, children, and parents of retired, disabled, or deceased workers. Auxiliary benefits are based on the work record of the household's primary earner.", "Social Security spousal benefits (i.e., benefits for a wife or husband of the primary earner) are payable to the spouse or divorced spouse of a retired or disabled worker. Social Security survivors benefits are payable to the survivors of a deceased worker as a widow(er), as a child, as a mother or father of the deceased worker's child(ren), or as a dependent parent of the deceased worker. Although Social Security is often viewed as a program that primarily provides benefits to retired or disabled workers, 33% of new benefit awards in 2017 were made to the dependents and survivors of retired, disabled, and deceased workers.", "Spousal and survivors benefits play an important role in ensuring women's retirement security. However, women continue to be vulnerable to poverty in old age, due to demographic and economic reasons. This report presents the current-law structure of auxiliary benefits for spouses, divorced spouses, and surviving spouses. It makes note of adequacy and equity concerns of current-law spousal and widow(er)'s benefits, particularly with respect to female beneficiaries, and discusses the role of demographics, the labor market, and current-law provisions on adequacy and equity. The report concludes with a discussion of proposed changes to spousal and widow(er) benefits to address these concerns."], "subsections": []}, {"section_title": "Origins of Social Security Auxiliary Benefits", "paragraphs": ["The original Social Security Act of 1935 (P.L. 74-271) established a system of Old-Age Insurance to provide benefits to individuals aged 65 or older who had \"earned\" retirement benefits through work in jobs covered by the system. Before the Old-Age Insurance program was in full operation, the Social Security Amendments of 1939 (P.L. 76-379) extended monthly benefits to workers' dependents and survivors. The program now provided Old-Age and Survivors Insurance (OASI).", "The 1939 amendments established benefits for the following dependents and survivors: (1) a wife aged 65 or older; (2) a child under the age of 18; (3) a widowed mother of any age caring for an eligible child; (4) a widow aged 65 or older; and (5) a surviving dependent parent aged 65 or older.", "In its report to the Social Security Board (the predecessor to the Social Security Administration) and the Senate Committee on Finance, the 1938 Social Security Advisory Council justified creating spousal benefits on the grounds of the adequacy of household benefits:", "The inadequacy of the benefits payable during the early years of the old-age insurance program is more marked where the benefits must support not only the annuitant himself but also his wife. In 1930, 63.8 per cent of men aged 65 and over were married. Payment of supplementary allowances to annuitants who have wives over 65 will increase the average benefit in such a manner as to meet the greatest social need with the minimum increase in cost. The Council believes that an additional 50 percent of the basic annuity would constitute a reasonable provision for the support of the annuitant's wife.", "The Social Security Board concurred in its own report, which it wrote based on the council's report. The board also found that benefit adequacy was the primary justification for spousal benefits:", "The Board suggests that a supplementary benefit be paid for the aged dependent wife of the retired worker which would be related to his old-age benefit. Such a plan would take account of greater presumptive need of the married couple without requiring investigation of individual need.", "Since 1939, auxiliary benefits have been modified by Congress many times, including the expansion of benefits to husbands, widowers, and divorced spouses. The legislative history of auxiliary benefits is outlined in detail in Appendix A ."], "subsections": []}, {"section_title": "Auxiliary Benefits", "paragraphs": ["Auxiliary benefits for a spouse, survivor, or other dependent are based on the benefit amount received by a primary earner (an insured worker). The primary earner may receive a Social Security retirement or disability benefit. Social Security retirement benefits are based on the average of a worker's highest 35 years of earnings (less up to 5 years for years of disability) from covered employment. A worker's basic benefit amount ( primary insurance amount or PIA) is computed by applying the Social Security benefit formula to the worker's career-average, wage-indexed monthly earnings ( average indexed monthly earnings or AIME). The benefit formula replaces a higher percentage of the preretirement earnings of workers with low career-average earnings than for workers with high career-average earnings.", "The primary earner's initial monthly benefit is equal to his or her PIA if benefits are claimed at full retirement age (FRA, which ranges from age 65 to age 67, depending on year of birth). A worker's initial monthly benefit will be less than his or her PIA if the worker begins receiving benefits before FRA, and it will be greater than his or her PIA if the worker begins receiving benefits after FRA. The purpose of the actuarial adjustment to benefits claimed before or after FRA is to ensure that the worker receives roughly the same total lifetime benefits regardless of when he or she claims benefits (assuming he or she lives to average life expectancy). ", "Auxiliary benefits are paid to the spouse, former spouse, survivor, child, or parent of the primary earner. Auxiliary benefits are determined as a percentage of the primary earner's PIA, subject to a maximum family benefit amount. For example, the spouse of a retired or disabled worker may receive up to 50% of the worker's PIA, and the widow(er) of a deceased worker may receive up to 100% of the worker's PIA. As with benefits paid to the primary earner, auxiliary benefits are subject to adjustments based on age at entitlement and other factors. A basic description of auxiliary benefits is provided in the following sections, with more detailed information provided in Appendix B ."], "subsections": [{"section_title": "Currently Married or Separated Spouses", "paragraphs": ["Social Security provides a spousal benefit that is equal to 50% of a retired or disabled worker's PIA. A qualifying spouse must be at least 62 years old or have a qualifying child (a child who is under the age of 16 or who receives Social Security disability benefits) in his or her care. A qualifying spouse may be either married to or separated from the worker. An individual must have been married to the worker for at least one year before he or she applies for spousal benefits, with certain exceptions. In addition, the worker must be entitled to (generally, collecting) benefits in order for an eligible spouse to become entitled to benefits.", "If a spouse claims benefits before FRA, his or her benefits are reduced to take into account the longer expected period of benefit receipt. An individual who is entitled to a Social Security benefit based on his or her own work record and to a spousal benefit in effect receives the higher of the two benefits (see \" Dually Entitled Beneficiaries \" below)."], "subsections": []}, {"section_title": "Widows and Widowers", "paragraphs": ["Under current law, surviving spouses (including divorced surviving spouses) may be eligible for aged widow(er) benefits beginning at the age of 60. If the surviving spouse has a qualifying disability and meets certain other conditions, survivors benefits are available beginning at the age of 50. The aged widow(er)'s basic benefit is equal to 100% of the deceased worker's PIA.", "A qualifying widow(er) must have been married to the deceased worker for at least nine months and must not have remarried before the age of 60 (or before age 50 if the widow[er] is disabled). Widow(er)s who remarry after the age of 60 (or after age 50 if disabled) may become entitled to benefits based on the prior deceased spouse's work record. Widow(er)s who are caring for children under the age of 16 or disabled may receive survivors benefits at any age and do not have to meet the length of marriage requirement\u2014see \" Mothers and Fathers \" below.", "If an aged widow(er) claims survivors benefits before FRA, his or her monthly benefit is reduced (up to a maximum of 28.5%) to take into account the longer expected period of benefit receipt. In addition, survivors benefits may be affected by the deceased worker's decision to claim benefits before FRA under the widow(er)'s limit provision (see Appendix B ). As with spouses of retired or disabled workers, a surviving spouse who is entitled to a Social Security benefit based on his or her own work record and a widow(er)'s benefit receives in effect the higher of the two benefits (see \" Dually Entitled Beneficiaries \" below)."], "subsections": []}, {"section_title": "Mothers and Fathers", "paragraphs": ["Social Security provides benefits to a surviving spouse or divorced surviving spouse of any age who is caring for the deceased worker's child, when that child is either under the age of 16 or disabled. Mother's and father's benefits are equal to 75% of the deceased worker's PIA, subject to a maximum family benefit. There are no length of marriage requirements for mother's and father's benefits, whether the beneficiary was married to, separated from, or divorced from the deceased worker; however, remarriage generally ends entitlement to mother's and father's benefits."], "subsections": []}, {"section_title": "Divorced Spouses", "paragraphs": ["Spousal benefits are available to a divorced spouse beginning at the age of 62, if the marriage lasted at least 10 years before the divorce became final and the person claiming spousal benefits is currently unmarried. A divorced spouse who is younger than 62 years old is not eligible for spousal benefits even with an entitled child in his or her care. Survivors benefits are available to a divorced surviving spouse beginning at the age of 60 (or beginning at age 50 if the divorced surviving spouse is disabled) if the divorced surviving spouse has not remarried before the age of 60 (or before age 50 if disabled), or if the surviving divorced spouse has an entitled child in his or her care.", "Divorced spouses who are entitled to benefits receive the same spousal and survivors benefits as married or separated persons. If a divorced spouse claims benefits before FRA, his or her benefits are reduced to take into account the longer expected period of benefit receipt. In addition, a divorced spouse who is entitled to a Social Security benefit based on his or her own work record and a spousal or survivor benefit receives in effect the higher of the two benefits (see \" Dually Entitled Beneficiaries \" below). "], "subsections": [{"section_title": "Data on Duration of Marriages", "paragraphs": ["A divorced person who was married to a primary earner for less than 10 years does not qualify for spousal benefits on that spouse's record (although he or she may qualify for benefits based on his or her own record or on another spouse's record). First marriages that end in divorce have a median duration of 8 to 12 years. Table 1 shows that the proportions of males and females who have a marriage that lasted longer than 10 years was higher from 1960 to 1964 than those in recent decades. About 83% of women who married for the first time during the early 1960s stayed married for 10 years or longer; however, for women who married between 1970 and 1999, about 71%-75% of women's first marriages have lasted for 10 years or more. This percentage dropped to 58% for women who first married during the early 2000s.", "Other data suggest that, for men and women aged 15 to 44 between 2006 and 2010, the probability of a first marriage lasting 10 years or longer was 68%. The probability that a first marriage would remain intact for at least 10 years was 73%, 56%, and 68% for Hispanic, black, and white women, respectively. In addition, among the women who were first divorced in 2012, 60% of them had a marriage lasting for 10 or more years."], "subsections": []}]}, {"section_title": "Dually Entitled Beneficiaries", "paragraphs": ["A person may qualify for a spousal or survivor benefit as well as for a Social Security benefit based on his or her own work record (a retired-worker benefit). In such cases, the person in effect receives the higher of the worker benefit and the spousal or survivor benefit. When the person's retired-worker benefit is higher than the spousal or survivor benefit to which he or she would be entitled, the person receives only the retired-worker benefit. Conversely, when the person's retired-worker benefit is lower than the spousal or survivor benefit, the person is referred to as dually entitled and receives the retired-worker benefit plus a spousal or survivor benefit that is equal to the difference between the retired-worker benefit and the full spousal or survivor benefit. In essence, the person receives a total benefit amount equal to the higher spousal benefit.", "Women have increasingly become entitled to Social Security benefits based on their own work records, either as retired-worker beneficiaries only or as dually entitled beneficiaries. As shown in Figure 1 , the percentage of women aged 62 or older entitled to benefits based on their own work records\u2014as retired workers or as dually entitled beneficiaries\u2014grew from 43% in 1960 to 79.3% in 2017. More than half of this growth was in the percentage of dually entitled beneficiaries. The percentage of women aged 62 or older entitled to benefits based solely on their own work records fluctuated between 36% and 42% between 1960 and 2005, before increasing to 54.2% in 2017. In 2017, 45.7% of women aged 62 or older relied to some extent on benefits received as a spouse or survivor: 25% of spouse and survivor beneficiaries were dually entitled and 20.7% received spousal or survivors benefits only.", "As shown in Table 2 , among wives who were dually entitled spousal beneficiaries in December 2017, the retired-worker benefit accounted for 68% of the combined monthly benefit (the retired-worker benefit with a top-up provided by the spousal benefit) and the spousal benefit accounted for 32% of the combined monthly benefit, on average. Among widows who were dually entitled survivor beneficiaries, the retired-worker benefit and the widow(er)'s benefit each accounted for about half of the combined monthly benefit, on average. Many more women than men are dually entitled to retired-worker benefits and spousal or widow(er)'s benefits. As shown in the table, in December 2017, about 6.9 million women and 235,533 men were dually entitled to benefits."], "subsections": []}]}, {"section_title": "Women, Social Security, and Auxiliary Benefits", "paragraphs": ["Spousal and survivors benefits play an important role in ensuring women's retirement security. In December 2017, about 25.4 million elderly (aged 65 and older) women received Social Security benefits, including 13.3 million women who received only retired-worker benefits, 2.1 million women who were entitled solely as the spouse of a retired worker, 3.2 million women who were entitled solely as the survivor of a deceased worker, and 6.7 million women who were dually entitled to a retired-worker benefit and a spousal or survivor benefit. In 2017, Social Security provided 50% or more of family income for more than 53% of elderly women in beneficiary families and 90% or more of family income for about 28% of elderly women in beneficiary families.", "Women, however, continue to be vulnerable to poverty in old age for several reasons. These reasons can generally be split into demographic reasons and economic reasons. In addition, the design of auxiliary benefits can lead to equity concerns.", "With respect to demographic and economic reasons that lead to adequacy concerns,", "Women on average live longer than men, and thus more women are likely to be widowed than are men. Women reaching the age of 65 in 2017 are likely to live another 20.7 years, on average, compared with another 18.2 years for men. About 5% of women aged 50-59, about 16% of women aged 60-75, and about 56% of women aged 75 and older are currently widowed. By comparison, about 2% of men aged 50-59, about 5% of men aged 60-75, and about 21% of men aged 75 and older are widowed. As a consequence, women may spend more time in retirement and are more vulnerable to inflation and the risk of outliving other assets. The real value of private pension benefits declines with age, as private pensions are generally not adjusted for inflation, and some private pensions cease with the death of the retired worker. Women are more likely to take employment breaks to care for children or parents, and thus have a lower labor force participation rate than men. During 2016, 88.5% of men and 74.3% of women aged 25-54 participated in the labor force. The rate for women with children under three years old was lower, at 63%. Breaks in employment result in fewer years of contributions to Social Security and employer-sponsored pension plans and thus lower retirement benefits. The median earnings of women who are full-time wage and salary workers are 82% of their male counterparts. Because Social Security and private pension benefits are linked to earnings, this \"earnings gap\" can lead to lower benefit amounts for women than for men.", "Social Security benefits are designed in a way that can result in inequities between households with similar earning profiles. Spousal and survivors benefits were added to the Social Security system in 1939. At that time, the majority of households consisted of a single earner\u2014generally the husband\u2014and a wife who was not in the paid workforce but instead stayed home to care for children. However, in recent decades, women have increasingly assumed roles as wage earners or as heads of families.", "A beneficiary who qualifies for both a retired-worker benefit and a spousal benefit does not receive both benefits in full. Instead, the spousal benefit is reduced by the amount of the retired-worker benefit; this effectively means the beneficiary receives the higher of the two benefit amounts. Because of this, a two-earner household receives lower combined Social Security benefits than a single-earner household with identical total Social Security-covered earnings, despite paying more in Social Security taxes. Moreover, after the death of one spouse, the disparity in benefits may increase: in a one-earner couple, the surviving spouse receives two-thirds of what the couple received on a combined basis, whereas in some two-earner couples with roughly equal earnings, the surviving spouse receives roughly one-half of what the couple received on a combined basis."], "subsections": [{"section_title": "Adequacy Issues", "paragraphs": ["Social Security is credited with keeping many of the elderly out of poverty. However, in 2017, 6.5% of Social Security beneficiaries aged 65 or older were below the poverty line. Figure 2 highlights the differences in poverty status among men and women aged 65 or older who received Social Security benefits in 2017, after Social Security is combined with other sources of income such as earnings from work, pensions, income from assets, and cash assistance.", " Figure 2 shows that married beneficiaries have significantly lower poverty rates than nonmarried beneficiaries and that nonmarried women aged 65 or older\u2014including widowed, divorced, and never-married women\u2014are more likely to be in poverty than their male counterparts. Particularly vulnerable among women are divorced beneficiaries and the never-married. Among women aged 65 and older, about 13.7% of divorced Social Security beneficiaries and 18.0% of never-married Social Security beneficiaries have total incomes below the official poverty line in 2017. Among Social Security beneficiaries aged 65 and over, poverty rates are also high among never-married men, at a rate of 17.5% in 2017.", "The reasons for the disparity in poverty rates among elderly men and women relate in part to women's lower lifetime earnings, which affect Social Security benefits and private pensions. Low lifetime earnings can be due to lower labor force participation of women and the earnings gap. In addition, women live two to three years longer than men on average, making them more likely to exhaust retirement savings and other assets before death. In addition, if the deceased husband was receiving a pension, the widow's benefit may be significantly reduced, or the pension may cease with the husband's death, depending on whether the couple had a joint and survivor annuity and how the joint and survivor annuity was structured. Elderly widows also may be at risk if assets are depleted by health-related expenses prior to the spouse's death."], "subsections": [{"section_title": "Labor Force Participation of Women", "paragraphs": ["During the past several decades, the labor force participation rate among women increased, but still remained below the rate among men. In 1950, about 34% of women aged 16 or older participated in the labor force, compared with about 86% of men aged 16 or older. By 2016, about 57% of women aged 16 or older participated in the labor force, compared with 69% of men in the same age group. Women are also more likely than men to work part-time (i.e., less than 35 hours per week in a sole or principal job). In 2016, 25% of women in wage and salary jobs worked part-time, compared with 12% of men. ", "Women with children under the age of 18 have increasingly entered the labor force in recent decades (see Figure 3 ). However, women with children have fewer years of paid work, on average. By the age of 50, women without children who were born between 1948 and 1958 had worked on average about two years less than men overall (i.e., men with and without children). For a woman with two children, however, the gap at the age of 50 was about 6.5 years less than the average man with or without children. In 2017, about 69% of mothers were employed, compared with 91% of fathers.", "In addition to childcare, women are also more likely than men to provide care to a spouse, a parent, or some other adult relative. One survey estimates that, among 39.8 million caregivers who have provided unpaid care to an adult in 2015, 60% of them are female. Some researchers find that female caregivers tend to work fewer hours per week and earn a lower wage than non-caregivers. Another study shows that women who leave work to provide care may face relatively low probabilities of returning to work."], "subsections": []}, {"section_title": "Earnings Gap", "paragraphs": ["Another reason why women receive lower retired-worker benefits than men is that full-time women workers earn about 80%-82% of the median weekly earnings of their male counterparts. In 2016, women who were full-time wage and salary workers had median weekly earnings of $749, or about 82% of the $915 median earned by their male counterparts. The women's-to-men's earnings ratio was about 62% in 1979 and, after increasing gradually during the 1980s and 1990s, has ranged between 80% and 82% since 2004.", "In 2016, the earnings gap between women and men varied among age groups (see Table 3 ). Among full-time workers, women aged 16-24 earned about 95% as much as men; women aged 25-34 earned about 89% as much as men; and women aged 55-64 earned about 74% as much as men.", "Over time, the earnings gap between women and men has narrowed for most age groups. For example, among full-time workers aged 25-34, the women's-to-men's earnings ratio increased from 68% in 1979 to 89% in 2016. For workers aged 35-44, the earnings ratio increased from 58% in 1979 to 83% in 2016. Similarly, for workers aged 45-54, the earnings ratio increased from 57% in 1979 to 78% in 2016. Part of the earnings gap can be attributed to differences between men's and women's years of education, full-time work experience, and occupations.", "Comparing the annual earnings of women and men may understate differences in total earnings across longer periods. Using a 15-year time frame (1983-1998), one study found that women in the prime working years of 26 to 59 had total earnings that were 38% of what prime-age men earned, in total, over the same 15-year period. Another study found that women born between 1955 and 1959 who worked full-time, year-round each year would have an average lifetime loss of $531,500 by age 59, compared with men.", "As women enter the work force in greater numbers, more women will qualify for Social Security benefits based on their own work records, instead of a spousal benefit that is equal to 50% of the husband's PIA. However, retired-worker and disabled-worker benefits for women continue to be lower than those for men on average for a variety of reasons, as discussed above. Consequently, after the death of a husband, the survivor's benefit, which is equal to 100% of the husband's PIA, will continue to play an important role in the financial well-being of widows."], "subsections": []}]}, {"section_title": "Equity Issues", "paragraphs": ["Although Social Security provides essential income support to nonworking spouses and widows, the current-law spousal benefit structure can lead to a variety of incongruous benefit patterns that have been documented in the literature. For example, a woman who was never employed but is married to a man with high Social Security-covered wages may receive a Social Security spousal benefit that is higher than the retirement benefit received by a single woman, or a woman who was married less than 10 years, who worked a full career in a low-wage job.", "The current system provides proportionately more benefits relative to payroll-tax contributions to one-earner couples (which predominated when Social Security was created in the 1930s) than to single persons or to couples with two earners, on average. As a result, the current system can lead to situations in which Social Security provides unequal benefits to one-earner and two-earner couples with the same total household lifetime earnings. Putting this in a different perspective, some two-earner couples may have to contribute significantly more to Social Security to receive the same retirement and spousal benefits that the system provides to a one-earner couple with identical total household earnings. As women's share of household income has increased, and also as women have increasingly become heads of families, these anomalies could become more relevant.", " Table 4 illustrates the disparate treatment of one-earner and two-earner couples with examples developed by the American Academy of Actuaries. In the table, a one-earner couple with household earnings of $50,000 is compared with two different two-earner couples. The second couple in the comparison is a two-earner couple with the same total household earnings ($50,000) as the one-earner couple, with the earnings evenly split between the two spouses (each spouse earns $25,000). The third couple in the comparison is a two-earner couple in which one spouse earns $50,000 (the same as the primary earner in the one-earner couple) and the other spouse earns half that amount, or $25,000, for total household earnings of $75,000.", "As the table illustrates, a one-earner couple may receive higher retirement and survivors benefits than a two-earner couple with identical total household earnings. Specifically, the first couple with one earner receives a total of $2,655 in monthly retirement benefits, compared with the second couple with two earners, who receives a total of $2,240 in monthly retirement benefits. Similarly, the survivor of the one-earner couple receives $1,770 in monthly benefits (either as a retired worker or as a surviving spouse). In comparison, the survivor of the two-earner couple with identical total household earnings receives $1,120 in monthly benefits.", "In the third couple shown in Table 4 , both spouses work in Social Security-covered employment, but in this example one spouse earns $50,000 annually and the other spouse earns $25,000. This couple receives monthly benefits that are $235 higher than the monthly benefits received by the one-earner couple ($2,890 compared with $2,655); however, this couple has earned much more over time ($25,000 annually) and contributed commensurately more in Social Security payroll taxes ($1,550 annually). The survivor benefit received by the third couple is identical to that received by the one-earner couple. Thus, the current-law Social Security spousal benefit structure requires some two-earner couples to make substantially higher contributions for similar benefit levels. With higher earnings but similar benefits to the one-earner couple, the third couple's replacement rate of 46% (i.e., family total monthly benefits as a percentage of preretirement earnings) is lower than that of the one-earner couple, which is 64%. ", "After the death of one spouse, the disparity in benefits between one-earner and two-earner couples may increase, as shown in the table. For the one-earner couple, the surviving spouse receives a benefit equal to two-thirds of the couple's combined benefit (for a reduction equal to one-third of the couple's combined benefit). For a two-earner couple with equal earnings (the second couple), the surviving spouse receives a benefit equal to one-half of the couple's combined benefit.", "Further, the surviving spouse in the first couple (the one-earner couple) receives a larger monthly benefit than the survivor of the second couple (a two-earner couple with earnings evenly split)\u2014$1,770 compared with $1,120\u2014although both couples paid the same amount of Social Security payroll tax contributions. Similarly, compared with the one-earner couple, the surviving spouse in the third couple (a two-earner couple with unequal earnings and higher total earnings than the one-earner couple) receives the same monthly benefit ($1,770) although the couple paid a higher amount of Social Security payroll tax contributions. For both two-earner couples in these examples, after the death of one spouse, the second earnings record does not result in the payment of any additional benefits.", "When spousal and survivors benefits were first established, most households consisted of a single earner\u2014usually the husband\u2014and a wife who cared for children and remained out of the paid workforce. As a result, benefits for nonworking spouses were structured to be relatively generous. Over the past six decades, women's earnings have increased and the share of households who have one earner has declined, and thus the share of women beneficiaries who received Social Security benefits solely based on husband's earnings record has decreased (see Figure 1 ). ", "In addition to inequities among couples with different work histories and earnings levels, the current structure of Social Security auxiliary benefits creates inequities among the divorced. Divorced spouses with 9\u00bd years of marriage, for example, receive no Social Security spousal and survivors benefits, whereas divorced spouses with 10 or more years of marriage may receive full spousal and survivors benefits."], "subsections": []}, {"section_title": "Other Program Design Considerations", "paragraphs": ["The current structure of Social Security spousal and survivors benefits raises other considerations for lawmakers with respect to potential policy changes.", "Social Security automatically provides pension rights to one or more eligible divorced spouses, in contrast to private pensions. Further, the benefit payable to the primary earner is not reduced for benefits paid to a current or one or more former spouses, again in contrast to private pensions. Divorced spouses receive a higher benefit after the death of their former spouse (the primary earner): benefits for a divorced spouse are equal to 50% of the primary earner's PIA, while benefits for a divorced surviving spouse are equal to 100% of the primary earner's PIA. This can create volatility in the income of divorced spouses. Widow(er)s who had high-earning spouses may face disincentives to marry a lower-earning second husband (if remarriage occurs before the eligibility age for widow[er]'s benefits).", "In response to the adequacy, equity, and other program design issues described above, policymakers and researchers have proposed a number of ways to restructure Social Security auxiliary benefits. Some of these proposals are discussed in the following section."], "subsections": []}]}, {"section_title": "Proposals for Restructuring Social Security Spousal or Survivors Benefits", "paragraphs": ["A number of proposals have been put forward to modify the current structure of Social Security spousal and survivors benefits. These proposals have different potential consequences for benefit levels of current, divorced, and surviving spouses; for the redistribution of benefits among couples from different socioeconomic levels; for the eligibility of means-tested programs such as Supplemental Security Income; and for work incentives. "], "subsections": [{"section_title": "Earnings Sharing", "paragraphs": ["Earnings sharing has been suggested as a way to address the unequal treatment of one-earner versus two-earner couples under current law. As noted above, Social Security often provides higher benefits to one-earner couples than to two-earner couples with the same total household earnings. In addition, earnings sharing has sometimes been suggested as a way to provide benefits to divorced women whose marriages did not last long enough (at least 10 years) to allow them to qualify for divorced spousal or survivors benefits. By definition, earnings sharing would not affect never-married persons.", "Under the most basic form of earnings sharing, spousal and survivors benefits would be eliminated. Instead, for each year of marriage, a couple's covered earnings would be added together and divided evenly between the spouses. For years when an individual is not married, his or her own earnings would be recorded. If a person has multiple marriages, the earnings sharing would occur during each period of marriage. Both members of a couple would have individual earnings records reflecting shared earnings as a member of the couple as well as any earnings before or after the marriage. Social Security benefits would be computed separately for each member of the couple, based on the individual earnings records and using the current-law benefit formula. For couples who were married for the entire career of one or both members, both members of the couple would receive identical benefits and the couple's combined benefit would be equal to twice that of either member of the couple. The two spouses would receive different benefits, however, if either had earnings before or after the marriage.", "Earnings sharing proposals would reduce benefits for the majority of individuals, relative to current law, and in the absence of other benefit enhancements. For example, a 2009 Social Security Administration (SSA) study (hereinafter, 2009 SSA Study) found that 61% of individuals would receive average benefit reductions of about 17%. About 11% of individuals would experience no change in benefits, and 28% would experience benefit increases averaging about 10%. Among married couples, the benefit decrease under earnings sharing proposals would be substantially larger among individuals in one-earner married couples than two-earner married couples. This is mainly because the current system on average provides proportionately more benefits relative to payroll-tax contributions to one-earner couples than to couples with two earners, but under earnings sharing, couples with the same total lifetime earnings generally would receive the same benefits regardless of their individual earnings profiles, all things being equal.", "Studies have found that the largest benefit reductions under earnings sharing could affect widows and divorced women. The 2009 SSA study found that about 93% of widows would experience an average benefit reduction of 27% while 45% of divorced women would experience benefit reductions averaging about 22%. A 2016 study found that 39% of divorced women and 62% of widows would experience a median decrease in benefits of 6% and 14%, respectively.", "The decline in widow's benefits results from eliminating the surviving spouse benefit under current law and replacing it with earnings credits. The widow's benefit under current law is equal to 100% of the husband's PIA, where the husband's PIA is determined based on unshared earnings. Although earnings sharing would increase the amount of earnings credited to the surviving wife (assuming the husband was the higher earner), the benefit payable to the surviving wife based on shared earnings would be lower than the current-law widow's benefit. Another study found that the gains experienced by divorced spouses and some married women under earnings sharing would come largely at the expense of widowed men and women.", "Some earnings sharing proposals would mitigate these effects by providing enhanced benefits to survivors or other targeted groups. For example, an \"inheritance provision\" could allow a surviving spouse to count all (instead of half) of a deceased spouse's earnings (or those of a deceased former spouse) during each year of marriage, in addition to all of his or her own earnings. An inheritance provision would protect some, though not all, surviving spouses. For example, the 2009 SSA study found that 40% of widows would receive lower benefits relative to current law under earnings sharing with an inheritance provision (compared with 93% without the inheritance provision).", "Alternatively, benefits for surviving spouses could be based on an amount equal to two-thirds of the combined benefit the couple was receiving when both members of the couple were alive (see \" Survivor's Benefit Increased to 75% of Couple's Combined Benefit \" below), or special provisions could be targeted to surviving disabled spouses.", "Provisions to protect survivors from benefit reductions, however, would reduce the amount of savings that would otherwise be achieved through program changes. Similarly, provisions to increase benefits for survivors relative to current law would increase program costs. A higher survivor benefit could be self-financed by reducing, on an actuarially fair basis, the combined benefit the couple receives while both members of the couple are alive."], "subsections": []}, {"section_title": "Divorced Spouse Benefits", "paragraphs": ["Under the current Social Security program, a divorced spouse must have been married to the worker for at least 10 years to qualify for spousal and survivors benefits based on the worker's record, as discussed above. Benefits for divorced spouses are equal to 50% of the worker's PIA; benefits for divorced surviving spouses are equal to 100% of the worker's PIA. One approach to extend Social Security spousal and survivors benefits to more divorced spouses would be to lower the 10-year marriage requirement (for example, to 5 or 7 years). Proposals to lower the length-of-marriage requirement for divorced spouses would improve benefit adequacy for some, although not all, divorced women.", "One study estimated that lowering the marriage-duration requirement from 10 to 7 years would increase benefits for about 8% of divorced women and 2% of widowed women aged 60 or older in the year 2030. Lowering the marriage-duration requirement to 5 years (with a proportional decrease to benefit amounts) would increase benefits for about 11% of all divorced women in the year 2030. The study found that, among divorced women aged 60 and over who would receive higher benefits as a result of lowering the marriage-duration requirement to 5 or 7 years, the outcomes were moderately progressive in the sense that they channeled a greater share of benefit increases to low-income and non-college-educated divorced women in old age. For example, under a 7-year marriage-duration requirement, about 10% of divorced women in the lowest retirement income quintile would receive a benefit increase compared with around 4% in the highest quintile who would receive a benefit increase. Among divorced women who gain, women in the lowest retirement income quintile would see a median benefit increase of 79%, compared with a median increase of 25% among women in the highest quintile. An earlier study found a similar result.", "Some researchers contend that the 50% benefit rate for divorced spouses (50% of the worker's PIA) is not sufficient to prevent many divorced spouses from falling into poverty. The 50% benefit rate for spouses initially was established to supplement the benefit received by a one-earner couple (i.e., in 1939, a spousal benefit was provided for a dependent wife to supplement the benefit received by the worker). Some observers contend that it may not be sufficient for persons (divorced spouses) who may be living alone. As described above, about 13.7% of divorced women and 10.3% of divorced men aged 65 and older have incomes below the poverty line, compared with 2.1% and 2.4% of married women and men respectively in 2017 (see Figure 2 )."], "subsections": []}, {"section_title": "Increased Benefits for the Oldest Old", "paragraphs": ["Another type of benefit modification would increase benefits for the oldest old (for example, beneficiaries aged 80 or older, or after 20 years of benefit receipt) by a specified percentage such as 5%. One rationale for this proposal is that beneficiaries tend to exhaust their personal savings and other assets over time, becoming more reliant on Social Security at advanced ages. Another rationale is that, after the age of 60, Social Security retirement benefits do not keep pace with rising living standards. In particular, the formula for computing a worker's initial retirement benefit is indexed to national average wage growth through the age of 60 and then to price inflation (the Consumer Price Index for Urban Wage and Clerical Workers, or CPI-W) starting at the age of 62. Once a beneficiary begins receiving benefits, his or her benefits increase each year with price inflation (the annual cost-of-living adjustment, based on the CPI-W) so that the initial benefit amount is effectively fixed in real terms. Some argue that the CPI-W is an inaccurate measure of price inflation that seniors face.", "According to one study, a 5% bump-up in benefits at the age of 80 would result in a slight decline in poverty rates among widows and nonmarried retired-worker beneficiaries aged 80 or older (declines of 3 percentage points and 4 percentage points, respectively). The same study found that this option is not targeted toward low-income beneficiaries: less than 30% of the additional benefits would accrue to beneficiaries in the bottom quintile of the income distribution. Another SSA study finds that a 5% benefit increase in the individual's primary insurance amount for beneficiaries aged 85 or older in 2030 would decrease the projected poverty rate from 1.5% to 1.2%.", "Alternatively, a benefit increase for the oldest old could be limited to beneficiaries who receive a below-poverty-level benefit. One proposal along these lines would provide a benefit to persons aged 82 or older that would be prorated based on the number of years the person contributed to Social Security.", "Other proposals would link the Social Security COLA to the Experimental Consumer Price Index for Americans Aged 62 and Older (CPI-E), which grows faster than the CPI-W on average, and is projected to increase Social Security benefits. Although the changes were targeted to all Social Security beneficiaries, those who received COLAs under the new policy for many years, such as the very old or people who had been disabled for a long period, tend to receive the largest benefit increase. "], "subsections": []}, {"section_title": "Minimum Benefit for Low Earners", "paragraphs": ["Social Security already has a \"special minimum\" benefit designed to help workers with long careers at low wages. A worker is awarded the special minimum benefit only if it exceeds the worker's regular benefit. The value of the special minimum benefit, which is indexed to prices, is rising more slowly than the value of the regular Social Security benefit, which is indexed to wages. As a result, the number of beneficiaries who receive the special minimum benefit under current law declines each year, and the Social Security Administration projected that the special minimum benefit provision would have no effect on people turning 62 years old in 2019 or later. ", "Some observers argue that a carefully designed minimum benefit has the potential to reduce poverty rates among older women, including divorced and never-married women, more efficiently than existing spousal and survivors benefits. Minimum benefit proposals are aimed at improving the adequacy of benefits, in comparison with some other proposals that address issues of equity among individuals and couples with different marital statuses. ", "Most minimum benefit proposals would require the worker to have between 30 and 40 years of Social Security-covered earnings to qualify for a minimum benefit at the poverty line or somewhat above it (for example, 120% of the poverty line). These work tenure requirements are intended to address, although not resolve, concerns that providing a minimum benefit could discourage work effort. Setting eligibility for a full minimum benefit at 30 to 40 years of covered earnings would allow many workers to take several years out of the labor force to care for children (or other family members) and still receive a higher benefit than they would have qualified for in the absence of a minimum benefit. Arguably, intermittent work histories play a greater role than long-term low earnings in leading to below-poverty-level benefits among women. Therefore, proposals for a minimum benefit based on a specified number of years of covered employment could be combined with modified spousal benefits or with a caregiver credit to balance recognition of longer work effort with recognition of the requirements of caregiving.", "To maintain the minimum benefit at a constant ratio to average living standards, some proposals would link the minimum benefit to wage growth instead of setting the minimum benefit equal to a specified percentage of the poverty line. The official poverty line is indexed to price growth, whereas living standards rise with increases in wages and productivity. Wage growth generally outpaces price growth. ", "The 2010 National Commission on Fiscal Responsibility and Reform and the Bipartisan Policy Center both proposed packages that included, among other measures, provisions to create new minimum benefits. Some researchers propose modernizing the special minimum benefit by tying it to a poverty level that is in line with the recommendations of the National Academy of Social Insurance. If a new minimum benefit is provided, it would be necessary to address interactions between Social Security benefits and eligibility for Supplemental Security Income, Medicaid, and other means-tested programs for low-income individuals."], "subsections": []}, {"section_title": "Caregiver Credits and Drop-out Years for Caregiving", "paragraphs": ["Women are more likely than men to take career breaks to care for a child or other relative, as discussed above. The Social Security retired-worker benefit is based on the average of a worker's 35 highest years of covered earnings. If a worker has fewer than 35 years of earnings, for example due to years of unpaid caregiving, years of no earnings are entered as zeros in the computation of career-average earnings. Years of zero earnings lower the worker's career-average earnings, resulting in a lower initial monthly benefit.", "One approach is to replace years of low or zero earnings with a caregiver credit equal to a specified dollar amount. Some proposals would provide the same fixed credit to all eligible persons. Other proposals would link the amount of the credit to foregone earnings, so that higher earners would receive higher credits. The latter proposal would require that the caregiver have been in the paid labor force previously. Some proposals to base benefits on caregiving, rather than on marriage, would eliminate the current spousal benefit.", "A second approach is to drop years of caregiving , up to a fixed maximum number of years, from the benefit computation period. This approach could be implemented either by dropping years of zero earnings or by dropping years of low earnings. The proposal to drop years of zero earnings (rather than low earnings) would require a person to leave the workforce completely. This could be problematic for many women, making the proposal less likely to reach as many women as a caregiver credit. Allowing a parent to drop up to 5 years of zero (or low) earnings for caring for a child at home would cause the parent's AIME to be calculated based on the highest 30 years of earnings, rather than the highest 35 years of earnings (the benefit computation periods would be reduced from 35 years to 30 years). This change in the benefit computation would result in higher initial monthly benefits for these workers (and higher benefits for family members who receive benefits based on their work records). ", "The Social Security Disability Insurance program allows up to three \"drop-out\" years for caregiving. Policies to credit years of caregiving in the provision of public pension benefits have been implemented in other countries in a variety of ways. In making such a provision, one question to consider is whether the credit should be available only to parents who have stopped working completely or also to parents who continue to work part-time or full-time. Another question to consider is whether to provide credits only for the care of young children or also for the care of other immediate family members such as an aging parent. For example, Canada excludes years of caring for children under the age of 7 from the averaging period in the pension calculation and from the contributory period under its earnings-related scheme, while Germany provides one pension point (equal to a year's contributions at the national average earnings) for three years per child, which can be taken by either the employed or nonemployed parent, or shared between parents (there are also credits for working while children are under the age of 10). ", "Other recent proposals, however, would count additional years of earnings (more than 35 years) in the Social Security benefit computation. For example, some proposals would increase the averaging period from 35 to 38 years. These proposals are aimed at helping improve Social Security's projected long-range financial position and at encouraging people to work longer. Such proposals generally would affect women disproportionately. ", "A criticism of proposals to drop or credit years of caregiving is that they may be of most benefit to higher-wage households that can afford to forego one spouse's earnings over a period of several years. Lower-wage spouses, and single working mothers, may not be in a position to stop working for any period of time. In addition, a practical issue involves ascertaining that years out of the workforce are actually spent caring for children or other family members."], "subsections": []}, {"section_title": "Survivor's Benefit Increased to 75% of Couple's Combined Benefit", "paragraphs": ["Under current law, an aged surviving spouse receives the higher of his or her own retired-worker benefit and 100% of the deceased spouse's PIA. This leads to a reduction in benefits compared with the combined benefit the couple was receiving when both members of the couple were alive. The reduction ranges from one-third of the combined benefit for a one-earner couple to one-half of the combined benefit for some two-earner couples. However, there is not always a corresponding reduction in household expenses for the surviving member of the couple. Some contend that 75% of the income previously shared by the couple more closely approximates the income needed by the surviving spouse to maintain his or her standard of living.", "One frequently mentioned proposal would increase the surviving spouse's benefit to the higher of (1) the deceased spouse's benefit, (2) the surviving spouse's own benefit, and (3) 75% of the couple's combined monthly benefit when both spouses were alive. The couple's combined monthly benefit when both spouses were alive would be the sum of (1) the higher-earner's benefit and (2) the higher of the lower-earner's worker benefit and spousal benefit. Some proposals for a 75% survivor benefit would target the provision to lower-income households by capping the survivor benefit, for example, at the benefit amount received by the average retired-worker beneficiary. ", "A 75% minimum survivor benefit would increase benefits for many surviving spouses, both in dollar terms and as a replacement rate for the combined benefit received by the couple when both spouses were alive. For a one-earner couple, the benefit for the surviving spouse would increase from 100% to 112% of the worker's benefit (112% = 75% of 150% of the worker's benefit that the couple received when both spouses were alive). For a two-earner couple with similar earnings histories, the surviving spouse's benefit would increase from roughly 50% of the couple's combined benefit when both spouses were alive (under current law, the surviving spouse receives the benefit received by the higher-earning spouse while he or she was alive) to 75% of the couple's combined benefit when both spouses were alive.", "A 75% minimum survivor benefit provision would \"reward\" the second income of a two-earner couple and improve equity between one-earner and two-earner couples. Under current law, upon the death of either spouse, the earnings record of the lower-earning spouse does not result in the payment of any additional benefits (i.e., in addition to the benefits payable on the earnings record of the higher-earning spouse). Stated another way, the earnings record of the lower-earning spouse effectively \"disappears\" with the death of either spouse.", "Because a 75% survivor benefit would increase costs to the Social Security system, some have proposed financing it through a gradual reduction in the spousal benefit from 50% to 33% of the primary earner's benefit, while both spouses are alive. For a one-earner couple, the couple's combined benefit would be reduced from 150% to 133% of the worker's benefit. This is broadly consistent with the structure of private annuities, where the annuity payout is lower to adjust for a longer expected payout period. As a result, more dually entitled spouses would likely qualify for a retirement benefit based on their own work record only, because more dually entitled spouses would likely have a retired-worker benefit of their own that is equal to at least 33% (rather than 50%) of the higher-earning spouse's retired-worker benefit.", "Reducing a one-earner couple's combined monthly benefit to 133% of the worker's benefit, as a way to finance a 75% survivor benefit, could be problematic for low-income couples. Effectively, the increased survivor benefit would help the survivors of both one-earner and two-earner couples, but it would be financed by reducing the combined benefits of one-earner couples from 150% to 133% of the worker's benefit. In addition, unless this proposal were modified for divorced spouses, it would also reduce the spousal benefits received by divorced spouses from 50% to 33% of the primary earner's benefit. After the death of the primary earner, benefits for a divorced spouse would jump to 100% of the primary earner's benefit, creating income volatility unless this outcome is addressed for divorced spouses. ", "Although the 75% survivor benefit option could increase benefits for vulnerable groups such as aged widows, it would not address the needs of other vulnerable groups, such as individuals who were never married or who divorced before reaching 10 years of marriage. In addition, a 75% survivor benefit option would provide somewhat more additional benefits to higher-income beneficiaries than to lower-income beneficiaries. To address this outcome, as noted above, some proposals would cap the 75% survivor benefit at the average retired-worker benefit. "], "subsections": []}]}, {"section_title": "Conclusion", "paragraphs": ["Although more women have qualified for Social Security benefits based on their own earning records in recent decades, Social Security auxiliary benefits continue to play a crucial role in improving income security for older women, as well as for young surviving spouses and children of deceased workers. Some policymakers and researchers, however, have expressed concerns about the current structure of Social Security auxiliary benefits on both equity and adequacy grounds. For example, the current structure can lead to situations in which a one-earner couple receives higher retirement and survivors benefits than a two-earner couple with identical total household earnings. In addition, auxiliary benefits do not reach certain groups, such as persons who divorced before 10 years of marriage or mothers who never married.", "Some proposals have been suggested to increase Social Security benefits to certain, but not all, vulnerable groups. For example, an enhanced widow(er)'s benefit would provide income support to many elderly women and men, but it would not help those who divorced before 10 years of marriage or who never married. Similarly, a caregiver credit for workers who stay at home to care for young children would increase benefits for never-married and divorced women, but it would not help those without children, whether married or unmarried.", "The consideration of potential changes to Social Security spousal and survivors benefits involves balancing improvements in benefit equity, for example, between one-earner and two-earner couples, with improvements in benefit adequacy for persons who experience relatively higher poverty rates, such as never-married men and women. In addition, the policy discussion about auxiliary benefits may involve balancing benefit increases for spouses and survivors, divorced spouses, or never-married persons with other potential program changes to offset the higher program costs in light of the Social Security system's projected long-range financial outlook.", "Appendix A. Major Changes in Social Security Auxiliary Benefits", "Appendix B. Summary of Possible Adjustments to Social Security Spousal and Widow(er)'s Benefits Under Current Law", "Social Security benefits for spouses and widow(er)s are based on a percentage of the worker's primary insurance amount (PIA), with various adjustments for age at entitlement and other factors. The following section describes some of the adjustments that apply to benefits for spouses and widow(er)s.", "Age-Related Benefit Adjustment for Spouses", "Spousal benefits (including those for divorced spouses) are reduced when the spouse claims benefits before full retirement age (FRA) to take into account the longer expected period of benefit receipt (assuming the individual lives to average life expectancy). A spouse who claims benefits at the age of 62 (the earliest eligibility age for retirement benefits) may receive a benefit that is as little as 32.5% of the worker's PIA.", "Age-Related Benefit Adjustments for Widow(er)s", "The earliest age a widow(er) can claim benefits is age 60. If a widow or widower (including divorced and disabled widow(er)s) claims survivors benefits before FRA, his or her monthly benefit is reduced by a maximum of 28.5% to take into account the longer expected period of benefit receipt (assuming he or she lives to average life expectancy). ", "In addition, survivors benefits may be affected by the deceased worker's decision to claim benefits before FRA. If the deceased worker claimed benefits before FRA (and therefore was receiving a reduced benefit) and the widow(er) claims survivors benefits at FRA, the widow(er)'s benefit is reduced under the widow(er)'s limit provision . Under the widow(er)'s limit provision, which is intended to prevent the widow(er)'s benefit from exceeding the deceased worker's retirement benefit, the widow(er)'s benefit is limited to (1) the benefit the worker would be receiving if he or she were still alive, or (2) 82.5% of the worker's PIA, whichever is higher.", "Benefit Adjustments Based on Other Factors", "Benefits for spouses and widow(er)s may be subject to other reductions, in addition to those based on entitlement before FRA. For example, under the dual entitlement rule, a Social Security spousal or widow(er)'s benefit is reduced or fully offset if the person also receives a Social Security retired-worker or disabled-worker benefit (see \" Dually Entitled Beneficiaries \" above). Similarly, under the g overnment p ension o ffset (GPO), a Social Security spousal or widow(er)'s benefit is reduced or fully offset if the person also receives a pension based on his or her own employment in certain federal, state, or local government positions that are not covered by Social Security. In some cases, a spousal or widow(er)'s benefit may be reduced to bring the total amount of benefits payable to family members based on the worker's record within the maximum family benefit amount.", "Under the Social Security retirement earnings test (RET), auxiliary benefits may be reduced if the auxiliary beneficiary is below the FRA and has earnings above specified dollar thresholds. Also, under the RET, benefits paid to spouses may be reduced if the benefits are based on the record of a worker beneficiary who is affected by the RET (excluding benefits paid to divorced spouses who have been divorced for at least two years).", " Table B-1 shows the percentage of a worker's PIA on which various categories of spousal and widow(er)'s benefits are based. It also shows the age at which benefits are first payable on a reduced basis (the eligibility age) and the maximum reduction to benefits claimed before FRA relative to the worker's PIA. "], "subsections": []}]}}
{"id": "95-118", "title": "Pension Benefit Guaranty Corporation (PBGC): A Primer", "released_date": "2019-03-21T00:00:00", "summary": ["The Pension Benefit Guaranty Corporation (PBGC) is a federal agency established by the Employee Retirement Income Security Act of 1974 (ERISA; P.L. 93-406). It was created to protect the pensions of participants and beneficiaries covered by private sector defined benefit (DB) plans. These pension plans provide a specified monthly benefit at retirement, usually either a percentage of salary or a flat dollar amount multiplied by years of service. Defined contribution (DC) plans, such as 401(k) plans, are not insured. PBGC is chaired by the Secretary of Labor, with the Secretaries of the Treasury and Commerce serving as board members.", "PBGC runs two distinct insurance programs: one for single-employer pensions and a second for multiemployer plans. Single-employer pension plans are sponsored by one employer and cover eligible workers employed by the plan sponsor. Multiemployer plans are collectively bargained plans to which more than one company makes contributions. PBGC maintains separate reserve funds for each program.", "A firm must be in financial distress to end an underfunded single-employer plan and for PBGC to become the trustee of the plan. Multiemployer plans do not terminate. When a multiemployer plan becomes insolvent and is not able to pay promised benefits, PBGC provides financial assistance to the plan in the form of loans, although PBGC does not expect the loans to be repaid.", "In FY2018, PBGC insured about 25,000 DB pension plans covering approximately 37 million people. PBGC became the trustee of 58 newly terminated single-employer pension plans and began providing financial assistance to an additional 6 multiemployer pension plans. PBGC paid benefits to 861,371 participants in 4,919 single-employer pension plans and 62,300 participants in 78 multiemployer plans.", "There is a statutory maximum benefit that PBGC can pay. Participants receive the lower of their benefit as calculated under the plan or the statutory maximum benefit. If a participant's benefit is higher than the statutory maximum benefit, the participant's benefit is reduced. Participants in single-employer plans that terminate in 2019 and are trusteed by PBGC may receive up to $67,295 per year if they begin taking their pension at the age of 65. The single-employer maximum benefit is adjusted depending on the age at which the participant begins taking the benefit and on the form of the benefit (e.g., the maximum benefit is lower for a joint-and-survivor annuity). The maximum benefit for participants in multiemployer plans that receive financial assistance depends on the number of years of service in the plan. For example, a participant with 30 years of service may receive up to $12,870 per year. Currently, most workers in single-employer plans taken over by PBGC and multiemployer plans that receive financial assistance from PBGC receive the full pension benefit that they earned. However, among participants in multiemployer plans that were terminated and likely to need financial assistance in the future, 49% have a benefit below the PBGC maximum guarantee and 51% have a benefit larger than the PBGC maximum guarantee.", "At the end of FY2018, PBGC had a total deficit of $51.4 billion, which consisted of a $2.4 billion surplus from the single-employer program and a $53.9 billion deficit from the multiemployer program. PBGC's single-employer program has been on the Government Accountability Office's (GAO's) list of high-risk government programs since 2003. PBGC's multiemployer program was added in 2009. PBGC projects the financial position of the single-employer program to improve slightly, but the financial position of the multiemployer program is expected to worsen considerably over the next 10 years."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Pension Benefit Guaranty Corporation", "paragraphs": ["The Pension Benefit Guaranty Corporation (PBGC) is a federal agency established by the Employee Retirement Income Security Act of 1974 (ERISA; P.L. 93-406 ). It was created to protect the pe nsions of participants and beneficiaries covered by private sector defined benefit (DB) plans. These pension plans provide a specified monthly benefit at retirement, usually either a percentage of salary or a flat dollar amount multiplied by years of service. Defined contribution (DC) plans, such as 401(k) plans, are not insured.", "PBGC runs two distinct insurance programs: one for single-employer pension plans and a second for multiemployer plans. Single-employer pension plans are sponsored by one employer and cover eligible workers employed by the plan sponsor. Multiemployer plans are collectively bargained plans to which more than one company makes contributions. PBGC maintains separate reserve funds for each program.", "In FY2018, PBGC insured about 25,000 DB pension plans covering about 37 million people. It paid or owed benefits to 1.4 million people. PBGC is the trustee of 4,919 single-employer plans. PBGC provided financial assistance to 78 multiemployer pensions. PBGC pays a maximum benefit to plan participants. Most workers in single-employer plans taken over by PBGC and multiemployer plans that receive financial assistance from PBGC receive the full pension benefit that they earned. However, among participants in multiemployer plans that were terminated and likely to need financial assistance in the future, 49% have a benefit below the PBGC maximum guarantee and 51% have a benefit larger than the PBGC maximum guarantee."], "subsections": [{"section_title": "PBGC Administration", "paragraphs": ["PBGC is a government-owned corporation. A three-member board of directors, chaired by the Secretary of Labor, administers the corporation. The Secretary of Commerce and the Secretary of the Treasury are the other members of the board of directors. The Director of PBGC is appointed by the President with the advice and consent of the Senate. ERISA also provides for a seven-member Advisory Committee, appointed by the President, for staggered three-year terms. The Advisory Committee advises PBGC on issues, such as investment of funds, plan liquidations, and other matters.", "The Moving Ahead for Progress in the 21 st Century Act (MAP-21; P.L. 112-141 ) altered some of the governance structures of PBGC. Some of these changes include setting the term of the PBGC Director at five years, unless removed by the President or by the board of directors; requiring that the Board of Directors meet at least four times each year; and establishing a Participant and Plan Sponsor Advocate within PBGC to act as a liaison between PBGC, participants in plans trusteed by PBGC, and the sponsors of pension plans insured by PBGC."], "subsections": []}, {"section_title": "PBGC Financing", "paragraphs": ["PBGC is required by ERISA to be self-supporting and receives no appropriations from general revenue. ERISA states that the \"United States is not liable for any obligation or liability incurred by the corporation,\" and some Members of Congress have expressed a reluctance to consider providing financial assistance to PBGC. The most reliable source of PBGC revenue is the premiums set by Congress and paid by the private-sector employers that sponsor DB pension plans. Other sources of income are assets from terminated plans taken over by PBGC, investment income, and recoveries collected from companies when they end underfunded pension plans. The Multiemployer Pension Plan Amendments Act of 1980 ( P.L. 96-364 ) requires that PBGC's receipts and disbursements be included in federal budget totals."], "subsections": []}, {"section_title": "Premiums", "paragraphs": ["The sponsors of private-sector pension plans pay a variety of premiums to PBGC. The sponsors of single-employer and multiemployer pension plans pay a flat-rate, per-participant premium. The sponsors of underfunded single-employer pension plans pay an additional premium that is based on the amount of plan underfunding. In addition, pension plans that are terminated in certain situations pay a per-participant premium per year for three years after termination.", "The premiums for 2019 are as follows:", "Single-employer flat-rate premium : The sponsors of single-employer DB pension plans pay an annual premium of $80 for each participant in the plan. Single-employer variable-rate premium : In addition to the flat-rate premium, the sponsors of underfunded single-employer DB pension plans pay an additional annual premium of $43 for each $1,000 of unfunded vested benefits. There is a per-participant limit of $541 for this premium. Single-employer termination premium : The sponsors of single-employer DB pension plans that end in certain situations pay an annual premium of $1,250 per participant per year for three years following plan termination. Multiemployer flat-rate premium : The sponsors of multiemployer DB pension plans pay an annual premium of $29 for each participant in the plan in 2019.", "In the Appendix, Table A-1 and Table A-2 provide a history of PBGC premium rates.", " Table 1 details the amounts of premium income in FY2017 and FY2018."], "subsections": []}, {"section_title": "Requirements for PBGC Coverage", "paragraphs": ["PBGC covers only those DB plans that meet the qualification requirements of Section 401 of the Internal Revenue Code (IRC). DC plans (such as 401(k) and 403(b) plans) are not insured by PBGC. Plans must meet these requirements to receive the tax benefits available to qualified pension plans. If a plan meets the requirements of IRC Section 401, the employer's contributions to the plan are treated as a tax-deductible business expense, and neither the employer's contributions to the plan nor the investment earnings of the plan are treated as taxable income to the participants. When a pension plan participant begins to receive income from the plan, it is taxed as ordinary income.", "In general, to be qualified under the IRC, a pension plan must be established with the intent of being a permanent and continuing arrangement; must provide definitely determinable benefits; may not discriminate in favor of highly compensated employees with respect to coverage, contributions, or benefits; and must cover a minimum number or percentage of employees.", "Pension plans specifically excluded by law from being insured by PBGC include governmental plans, church plans, plans of fraternal societies financed entirely by member contributions, plans maintained by certain professionals (such as physicians, attorneys, and artists) with 25 or fewer participants, and plans established and maintained exclusively for substantial owners of businesses. "], "subsections": []}, {"section_title": "Pension Benefit Guaranty", "paragraphs": ["PBGC's single-employer and multiemployer insurance programs operate differently and PBGC maintains separate reserve funds for each program. Funds from the reserve of one program may not be used for the other program.", "In the single-employer program, PBGC becomes the trustee of the terminated, underfunded single-employer DB pension plans. The assets of the terminated plan are placed in a trust fund operated by PBGC. The participants in the trusteed plans receive their benefits from PBGC.", "In the multiemployer program, PBGC does not become the trustee of plans. PBGC makes loans to multiemployer DB pension plans when the plans become insolvent. An insolvent multiemployer plan has insufficient assets available from which to pay participant benefits."], "subsections": [{"section_title": "Single-Employer Insurance Program", "paragraphs": ["An employer can voluntarily terminate a single-employer plan in either a standard or distress termination. The participants and PBGC must be notified of the termination. PBGC may involuntarily terminate an underfunded plan if the sponsor is unable to fund its pension obligations."], "subsections": [{"section_title": "Standard Terminations", "paragraphs": ["A company may voluntarily end its pension plan if the plan's assets are sufficient to cover benefit liabilities. In such cases, PBGC does not pay any benefits to plan participants. Its role is to confirm that the requirements for termination have been met by the plan. Generally, benefit liabilities equal all benefits earned to date by plan participants, including vested and nonvested benefits (which automatically become vested at the time of termination), plus certain early retirement supplements and subsidies. Benefit liabilities also may include certain contingent benefits. If assets are sufficient to cover benefit liabilities (and other termination requirements, such as notice to employees, have not been violated), the plan distributes benefits to participants. The plan provides for the benefit payments it owes by purchasing annuity contracts from an insurance company, or otherwise providing for the payment of benefits, for example, by providing the benefits in lump-sum distributions.", "Assets in excess of the amounts necessary to cover benefit liabilities may be recovered by the employer in an asset reversion. The asset reversion is included in the employer's gross income and is subject to a nondeductible excise tax. The excise tax is 20% of the amount of the reversion if the employer establishes a qualified replacement plan or provides certain benefit increases in connection with the termination. Otherwise, the excise tax is 50% of the reversion amount."], "subsections": []}, {"section_title": "PBGC Trusteeship", "paragraphs": ["When an underfunded plan terminates in a distress or involuntary termination, the plan goes into PBGC receivership. PBGC becomes the trustee of the plan, takes control of any plan assets, and assumes responsibility for liabilities under the plan. PBGC makes payments for benefit liabilities promised under the plan with assets received from two sources: (1) assets in the plan before termination and (2) assets recovered from employers. The balance, if any, of guaranteed benefits owed to beneficiaries is paid from PBGC's revolving funds.", "Distress Terminations", "If assets in the plan are not sufficient to cover benefit liabilities, the employer may not terminate the plan unless the employer meets one of four criteria necessary for a \"distress\" termination:", "1. The plan sponsor, and every member of the controlled group (companies with the same ownership) of which the sponsor is a member, has filed or had filed against it a petition seeking liquidation in bankruptcy or any similar federal law or other similar state insolvency proceedings; 2. The plan sponsor, and every member of the sponsor's controlled group, has filed or had filed against it a petition to reorganize in bankruptcy or similar state proceedings. This criterion is also met if the bankruptcy court (or other appropriate court) determines that, unless the plan is terminated, the employer will be unable to continue in business outside the reorganization process and approves the plan termination; 3. PBGC determines that termination is necessary to allow the employer to pay its debts when due; or 4. PBGC determines that termination is necessary to avoid unreasonably burdensome pension costs caused solely by a decline in the employer's work force.", "These requirements were added by the Single Employer Pension Plan Amendments Act of 1986 (SEPPAA; P.L. 99-272 ) and modified by the Omnibus Budget Reconciliation Act of 1987 ( P.L. 100-203 ) and the Retirement Protection Act of 1994 (RPA; P.L. 103-465 ). They are designed to ensure that the liabilities of an underfunded plan remain the responsibility of the employer, rather than PBGC, unless the employer meets strict standards of financial need indicating genuine inability to continue funding the plan.", "Involuntary Terminations", "PBGC may terminate a plan involuntarily, either by agreement with the plan sponsor or pursuant to a federal court order. PBGC may institute such proceedings only if", "the plan in question has not met the minimum funding standards, the plan will be unable to pay benefits when due, the plan has a substantial owner who has received a distribution greater than $10,000 (other than by reason of death) and the plan has unfunded vested benefits, or the long-run loss to PBGC with respect to the plan is expected to increase unreasonably if the plan is not terminated.", "PBGC must terminate a plan if the plan is unable to pay benefits that are currently due. A federal court may order termination of the plan to protect the interests of participants, to avoid unreasonable deterioration of the plan's financial condition, or to avoid an unreasonable increase in PBGC's liability under the plan.", " Table 2 provides information on the number of terminations since 1974 by single-employer DB pension plans and the number of these terminations that resulted in PBGC becoming trustee of the pension plan. From FY1974 through FY2016, PBGC became the trustee of 4,769 single-employer DB pension plans. The number of single-employer plan terminations that result in claims against PBGC is a relatively small fraction of all plan terminations. Most pension plan terminations are standard terminations."], "subsections": []}, {"section_title": "Employer Liability to PBGC", "paragraphs": ["Following a distress or involuntary termination, the plan's sponsor and every member of that sponsor's controlled group are liable to PBGC for the plan's shortfall. The shortfall is measured as the value of the plan's liabilities as of the date of the plan's termination minus the fair market value of the plan's assets on the date of termination. The liability is joint and several, meaning that each member of the controlled group can be held responsible for the entire liability. Generally, the obligation is payable in cash or negotiable securities to PBGC on the date of termination. Failure to pay this amount upon demand by PBGC may trigger a lien on the property of the contributing employer's controlled group. Often, however, a plan undergoing a distress termination is sponsored by a company that is in bankruptcy proceedings, in which case PBGC does not have legal authority to create (or perfect) a lien against the plan sponsor. In such instances, PBGC has the same legal standing as other creditors of the plan sponsor, and its ability to recover assets is limited."], "subsections": []}, {"section_title": "Benefit Payments", "paragraphs": ["When an underfunded plan terminates, the benefits PBGC will pay depend on the statutory limit on guaranteed benefits, the amount of the terminated plan's assets, and recoveries by PBGC from the employer that sponsored the terminated plan.", "Guaranteed Benefits", "Within limits set by Congress, PBGC guarantees any retirement benefit that was nonforfeitable (vested) on the date of plan termination other than benefits that vest solely on account of the termination, and any death, survivor, or disability benefit that was owed or was in payment status at the date of plan termination. Generally, only that part of the retirement benefit that is payable in monthly installments (rather than, for example, lump-sum benefits payable to encourage early retirement) is guaranteed. Retirement benefits that commence before the plan's normal age of retirement are guaranteed, provided they meet the other conditions of guarantee. Contingent benefits (for example, early retirement benefits provided only if a plant shuts down) are guaranteed only if the triggering event occurs before plan termination. Following enactment of the Pension Protection Act of 2006 (PPA; P.L. 109-280 ), PBGC guarantee for such benefits is phased in over a five-year period commencing when the event occurs.", "Maximum Benefits for Participants in Single-Employer Pension Plans", "ERISA sets a maximum on the individual benefit amount that PBGC can guarantee.", "The ceiling for single-employer plans is adjusted annually for national wage growth. The maximum pension guarantee is $67,295 a year for workers aged 65 in plans that terminate in 2019. This amount is adjusted annually and is decreased if a participant begins receiving the benefit before the age of 65 (reflecting the fact that they will receive more monthly pension checks over their expected lifetime) or if the pension plan provides benefits in some form other than equal monthly payments for the life of the retiree. The benefit is increased if a participant begins receiving the benefit after the age of 65 (reflecting the fact that they will receive fewer monthly pension checks over their expected lifetime). Table 3 contains examples of PBGC's annual maximum benefit for individuals who begin receiving benefits at the ages of 60, 65, or 70 and who receive either a straight-life annuity or a joint and 50% survivor annuity.", "The reduction in the maximum guarantee for benefits paid before the age of 65 is 7% for each of the first 5 years under age 65, 4% for each of the next 5 years, and 2% for each of the next 10 years. The reduction in the maximum guarantee for benefits paid in a form other than a straight-life annuity depends on the type of benefit, and if there is a survivor's benefit, the percentage of the benefit continuing to the surviving spouse and the age difference between the participant and spouse.", "Only \"basic benefits\" are guaranteed. These include benefits beginning at normal retirement age (usually 65), certain early retirement and disability benefits, and benefits for survivors of deceased plan participants. Only vested benefits are insured. The average monthly benefit received by retirees in FY2015 was $606. In a study released in 2008, PBGC indicated that more than 80% of PBGC recipients in single-employer plans trusteed by PBGC received their full benefits. Among participants whose benefits were reduced, the average reduction was 28%.", "Assets of a terminated plan are allocated to pay benefits according to a priority schedule established by statute. Under this schedule, some nonguaranteed benefits are payable from plan assets before certain guaranteed benefits. For example, benefits of participants who have been receiving pension payments for more than three years have priority over guaranteed benefits of participants not yet receiving payments.", "PBGC also is required to pay participants a portion of their unfunded, nonguaranteed benefits based on a ratio of assets recovered from the employer to the amount of PBGC's claim on employer assets (called Section 4022(c) benefits)."], "subsections": []}]}, {"section_title": "Multiemployer Pension Insurance Program", "paragraphs": ["In the case of multiemployer plans, PBGC insures plan insolvency, rather than plan termination. Accordingly, a multiemployer plan need not be terminated to qualify for PBGC financial assistance. A plan is insolvent when its available resources are not sufficient to pay the plan benefits for the plan year in question, or when the sponsor of a plan in reorganization reasonably determines, taking into account the plan's recent and anticipated financial experience, that the plan's available resources will not be sufficient to pay benefits that come due in the next plan year.", "If it appears that available resources will not support the payment of benefits at the guaranteed level, PBGC will provide the additional resources needed as a loan, which PBGC indicates are rarely repaid. PBGC may provide loans to the plan year after year. If the plan recovers from insolvency, it must begin repaying loans on reasonable terms in accordance with regulations. Only one multiemployer plan has repaid any of its financial assistance."], "subsections": [{"section_title": "Benefits for Participants in Multiemployer Pension Plans", "paragraphs": ["PBGC guarantees benefits to multiemployer plans as it does for single-employer plans, although a different guarantee ceiling applies. Multiemployer plans determine benefits by multiplying a flat dollar rate by years of service, so the benefit guarantee ceiling is tied to this formula. The benefit guarantee limit for participants in multiemployer plans equals a participant's years of service multiplied by the sum of (1) 100% of the first $11 of the monthly benefit rate and (2) 75% of the next $33 of the benefit rate. For a participant with 30 years of service, the guaranteed limit is $12,870. This benefit formula is not adjusted for increases in the national wage index. PBGC estimated in 2015 that 79% of participants in multiemployer plans that receive financial assistance received their full benefit. However, in plans that may need financial assistance in the future, only 49% of participants would receive their full benefit payment. Among ongoing plans (neither receiving PBGC financial assistance nor terminated and expected to receive financial assistance), the average benefit is almost twice as large as the average benefit in terminated plans. This suggests that a larger percentage of participants in plans that receive PBGC financial assistance in the future are likely to see benefit reductions as a result of the PBGC maximum guarantee level."], "subsections": []}]}]}, {"section_title": "Current Financial Status", "paragraphs": ["The most commonly used measure of PBGC's financial status is its net financial position, which is the difference between PBGC's assets and its liabilities. At the end of FY2018, PBGC's assets were $112.3 billion, PBGC liabilities were $163.7 billion, and its net financial position was -$51.4 billion.", "PBGC's main assets are the value of its trust fund and revolving funds. The trust fund contains the assets of the pension plans of which PBGC becomes trustee and the returns on the trust fund investments. The revolving funds contain the premiums that plan sponsors pay to PBGC, transfers from the trust fund that are used to pay for participants' benefits, and returns on the revolving funds' investments in U.S. Treasury securities.", "PBGC's main liabilities are the estimated present values of (1) future benefits payments in the single-employer program and (2) future financial assistance to insolvent plans in the multiemployer program.", " Table 4 provides information on the net financial position of PBGC from FY1999 through FY2018. PBGC has had an end of fiscal year deficit each year since FY2002.", "The weakness in the economy in 2001, particularly in the steel and airline industries, led to large and expensive plan terminations that created a deficit for PBGC. By the end of 2004, the single-employer program had a deficit of $23.3 billion. For the first time since FY2001, partly as a result of increases to the premiums that employers pay, the single-employer program showed a surplus in FY2018.", "The multiemployer program had a surplus from FY1982 to FY2002, but PBGC reported deficits each year since. PBGC projects that the multiemployer program will be likely become insolvent in FY2025 and there is a less than 1% chance that the program will remain solvent in FY2026. Both the single-employer and multiemployer programs are on the Government Accountability Office's (GAO's) list of high-risk government programs."], "subsections": [{"section_title": "Benefit Payments in the Single-Employer Insurance Program", "paragraphs": [" Table 5 shows that approximately 825,000 participants received monthly payments from PBGC in FY2015 (the most recent year for which comprehensive data on benefit payments are available). The average monthly payment was $536 and the median monthly payment was $279. Among retiree payees, the average monthly benefit was $606 and among beneficiary payees, the average monthly benefit was $307. Approximately 40,000 participants received a lump-sum payment in FY2015, and the average amount of the lump-sum payment was $2,054."], "subsections": []}, {"section_title": "Finances of the Single-Employer Insurance Program", "paragraphs": [" Figure 1 displays the net financial position of PBGC's single-employer program from FY1980 to FY2018. In FY1996, PBGC showed a surplus in its single-employer program for the first time in its history. That surplus peaked at $9.7 billion in FY2000, helped by the strong performance of the equity markets in the mid- and late 1990s. In FY2018, PBGC the single-employer program showed a surplus of $2.44 billion. The improvement in the financial condition of the single-employer program is a result of several factors, such as investment income (there has not been an investment loss since FY2008) and increase in premium income (premium income was 3.6 times greater in FY2018 compared to FY2008)."], "subsections": []}, {"section_title": "Finances of the Multiemployer Insurance Program", "paragraphs": [" Table 6 provides data on the number of plans that have received financial assistance and the annual amounts of the financial assistance from FY1995 to FY2018. Seventy-eight multiemployer plans received financial assistance in FY2018. The FY2018 annual report indicated that approximately 62,300 multiemployer plan participants received financial assistance in FY2018 and that approximately 27,800 participants will receive benefits in the future because they are in plans that are currently receiving financial assistance.", " Figure 2 indicates that the financial condition of the multiemployer insurance program has been worsening. The deficit in the multiemployer insurance program increased from $8.3 billion in FY2013 to $42.4 billion in FY2014, and $65.1 billion in FY2017. It decreased to $53.8 billion in FY2018. The large increase in the deficit in FY2014 was the result of the increase in the likelihood of the insolvency of several large multiemployer pension plans in financial distress."], "subsections": []}]}, {"section_title": "PBGC and the Federal Budget", "paragraphs": ["PBGC's budgetary cash flows are based on its premium income, interest income, benefit outlays, and the interaction of PBGC's trust and revolving funds. The trust fund contains the assets of the pension plans of which PBGC becomes trustee and the returns on the trust fund investments. Revolving funds contain the premiums that plan sponsors pay to PBGC, transfers from the trust fund that are used to pay for participants' benefits, and returns on the revolving funds' investments in U.S. Treasury securities."], "subsections": [{"section_title": "PBGC Trust Fund", "paragraphs": ["When PBGC becomes trustee of a single-employer pension plan, the assets of the terminated pension plan are transferred to PBGC and placed in a nonbudgetary trust fund. Transfers of assets to the trust fund do not appear in the federal budget and the assets of this trust fund do not appear on the federal balance sheet. The assets of the trust fund are managed by private-sector money managers in accordance with an investment policy established by PBGC's Board of Directors. The current investment policy establishes assets allocations of 30% for equities and other nonfixed income assets, and 70% for fixed income. Trust fund investments totaled $70.2 billion at the end of FY2018."], "subsections": []}, {"section_title": "PBGC Revolving Funds", "paragraphs": ["ERISA authorized the creation of seven revolving funds for PBGC, although only three revolving funds have been used by PBGC. The revolving funds contain the premiums paid by single-employer and multiemployer pension plan sponsors, returns on revolving funds' investments, and transfers from the trust fund that are used to pay benefits. Each year, PBGC transfers funds from the trust fund to the revolving funds to pay for a share of participants' benefits.", "The investments of the revolving funds are, by law, invested exclusively in U.S. Treasury securities. The revolving funds' assets at the end of FY2018 were $1.8 billion for Fund 1, $2.1 billion for Fund 2, and $29.3 billion for Fund 7, for a total of $33.2 billion.", "The revolving funds are on-budget accounts: increases or decreases in the revolving funds appear as on-budget federal receipts and outlays. The funds' gross outlays include PBGC benefit payments and administrative expenses and receipts include premiums paid, interest on federal securities, and reimbursements from the trust fund.", "Because increases in the premiums paid by pension plan sponsors to PBGC are increases in federal revenue, some stakeholders and policymakers have criticized recent PBGC premium increases because they feel increases in premiums are used to offset other federal spending, do not address the financial condition of PBGC, and may discourage employers from maintaining their DB pension plans."], "subsections": []}, {"section_title": "Future Financial Condition", "paragraphs": ["In its FY2017 Projections Report, PBGC estimated its financial condition over the next 10 years. The report indicated that the single-employer program's deficit is likely to shrink and the multiemployer program is likely to run out of money in FY2025. PBGC projected that the single-employer program was likely to emerge from deficit by FY2018 (which it did). The average estimate of PBGC's simulations was a $26 billion surplus for the single-employer program in 10 years.", "PBGC projected that there is a 90% chance that the multiemployer program will be insolvent before the end of FY2025 and a 99% chance that the multiemployer program will be insolvent by 2026. This is a result of the likely insolvency of several large multiemployer pension plans. PBGC's FY2018 Annual Report indicated that the multiemployer program's probable exposure to future financial assistance would be $53.8 billion. Premium levels are likely inadequate to provide continued financial assistance to insolvent multiemployer plans. The financial assistance to these plans could exhaust PBGC's ability to guarantee participants' benefits. PBGC has indicated that once resources are exhausted in the PGBC's multiemployer program, insolvent plans would be required to reduce benefits to levels that could be sustained through premium collections only.", "The Multiemployer Pension Reform Act of 2014 (MPRA, enacted as part of P.L. 113-235 ), allowed, among other provisions, multiemployer DB pension plans that expect to become insolvent to reduce benefits to participants in these plans. An insolvent plan has no assets from which to pay any benefits. Plans that reduce benefits to forestall insolvency would not require financial assistance from PBGC, and would reduce the amount of future financial assistance PBGC would expect to provide. This would likely improve PBGC's financial condition. PBGC indicated that there is uncertainty in how the provisions of MPRA that allow benefit suspensions and plan partitions will be used. PBGC estimated that the effect of MPRA would likely not change PBGC projections of future solvency.", "In response to the increasing concerns of policymakers and stakeholders (such as participants, participating employers, and plans), the Bipartisan Budget Act of 2018 ( P.L. 115-123 ) created a new joint select committee of the House and Senate: The Joint Select Committee on Solvency of Multiemployer Pension Plans. The committee was tasked with formulating recommendations and legislative language by November 30, 2018, that would \"significantly improve the solvency of multiemployer pension plans and the Pension Benefit Guaranty Corporation.\" The committee did not release a report containing recommendations or legislative language by the deadline. "], "subsections": [{"section_title": "Appendix. Historical PBGC Premium Rates", "paragraphs": [" Table A-1 provides historical data on the single-employer program premium levels. ", " Table A-2 provides historical data on the multiemployer program premium levels."], "subsections": []}]}]}]}]}}
{"id": "R45708", "title": "Energy and Water Development: FY2020 Appropriations", "released_date": "2019-04-30T00:00:00", "summary": ["The Energy and Water Development appropriations bill provides funding for civil works projects of the U.S. Army Corps of Engineers (USACE); the Department of the Interior's Bureau of Reclamation (Reclamation) and Central Utah Project (CUP); the Department of Energy (DOE); the Nuclear Regulatory Commission (NRC); and several other independent agencies. DOE typically accounts for about 80% of the bill's funding.", "President Trump submitted his FY2020 detailed budget proposal to Congress on March 18, 2019 (after submitting a general budget overview on March 11). The budget requests for agencies included in the Energy and Water Development appropriations bill total $38.02 billion\u2014$6.64 billion (15%) below the FY2019 appropriation. The largest exception to the overall decrease proposed for energy and water programs is a $1.309 billion increase (12%) for DOE nuclear weapons activities.", "For FY2019, the conference agreement on H.R. 5895 (H.Rept. 115-929) provided total Energy and Water Development appropriations of $44.66 billion\u20143% above the FY2018 level, excluding supplemental funding, and 23% above the FY2019 request. It was signed by the President on September 21, 2018 (P.L. 115-244). Emergency supplemental appropriations totaling $17.419 billion were provided to USACE and DOE for hurricane response by the Bipartisan Budget Act of 2018 (P.L. 115-123), signed February 9, 2018.", "Major Energy and Water Development funding issues for FY2020 are listed below. They were selected based on the total funding involved, the percentage of proposed increases or decreases, and potential impact on broader public policy considerations.", "Water Agency Funding Reductions. The Trump Administration requested reductions of 31% for USACE and 29% for Reclamation for FY2020 from the FY2019 enacted levels. The largest reductions would be from USACE Operation and Maintenance (-48%) and Reclamation's Water and Related Resources account (-31%). Similar reductions proposed by the Administration for FY2019 were not enacted. Power Marketing Administration (PMA) Reforms. DOE's FY2020 budget request includes mandatory proposals to sell PMA electricity transmission lines and other assets, repeal certain PMA borrowing authority, and eliminate cost-based limits on the electricity rates charged by the PMAs. The proposals would need to be enacted in authorizing legislation. Termination of Energy Efficiency Grants. DOE's Weatherization Assistance Program and State Energy Program would be terminated under the FY2020 budget request. The Administration had proposed to eliminate the grants in FY2018 and FY2019, but Congress continued funding. Reductions in Energy Research and Development. Under the FY2020 budget request, DOE research and development appropriations would be reduced for energy efficiency and renewable energy (EERE) by 83%, nuclear energy by 38%, and fossil energy by 24%. Similar reductions proposed by the Administration for FY2019 were not enacted. Nuclear Waste Repository. The Administration's budget request would provide new funding for the first time since FY2010 for a proposed nuclear waste repository at Yucca Mountain, NV. DOE would receive $116 million to seek an NRC license for the repository and develop interim waste storage capacity. NRC would receive $38.5 million to consider DOE's repository license application. Similar Administration funding requests for FY2018 and FY2019 were not enacted. Elimination of Advanced Research Projects Agency\u2014Energy (ARPA-E). The Trump Administration proposes no new appropriations for ARPA-E in FY2020 and to cancel $287 million in unobligated balances from previous appropriations. Similar proposals to terminate ARPA-E in FY2018 and FY2019 were not enacted. Loan Programs Termination. The FY2020 budget request would terminate DOE's Title 17 Innovative Technology Loan Guarantee Program, the Advanced Technology Vehicles Manufacturing Loan Program, and the Tribal Energy Loan Guarantee Program. Administration proposals to eliminate the programs were not included in the enacted appropriations measures for FY2018 and FY2019. Weapons Activities. The FY2020 budget request for DOE Weapons Activities is 12% greater than it was in FY2019 ($12.4 billion vs. $11.1 billion), in contrast to a proposed 10% reduction in DOE's total funding. Notable proposed increases would be used for warhead life extension programs and preparations for increase production of plutonium pits (warhead cores)."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction and Overview", "paragraphs": ["The Energy and Water Development appropriations bill includes funding for civil works projects of the U.S. Army Corps of Engineers (USACE), the Department of the Interior's Central Utah Project (CUP) and Bureau of Reclamation (Reclamation), the Department of Energy (DOE), and a number of independent agencies, including the Nuclear Regulatory Commission (NRC) and the Appalachian Regional Commission (ARC). Figure 1 compares the major components of the Energy and Water Development bill from FY2017 through the FY2020 request.", "President Trump submitted his FY2020 detailed budget proposal to Congress on March 18, 2019 (after submitting a general budget overview on March 11). The budget requests for agencies included in the Energy and Water Development appropriations bill total $38.02 billion\u2014$6.64 billion (15%) below the FY2019 appropriation. (See Table 3 .) A $1.309 billion increase (12%) is proposed for DOE nuclear weapons activities.", "For FY2019, the conference agreement on H.R. 5895 ( H.Rept. 115-929 ) provided total Energy and Water Development appropriations of $44.66 billion\u20143% above the FY2018 level and 23% above the FY2019 request. The bill was signed by the President on September 21, 2018 ( P.L. 115-244 ). Figures for FY2019 exclude emergency supplemental appropriations totaling $17.419 billion provided to USACE and DOE for natural disaster response by the Bipartisan Budget Act of 2018 ( P.L. 115-123 ), signed February 9, 2018. For more details, see CRS Report R45258, Energy and Water Development: FY2019 Appropriations , by Mark Holt and Corrie E. Clark, and CRS Report R45326, Army Corps of Engineers Annual and Supplemental Appropriations: Issues for Congress , by Nicole T. Carter. ", "The FY2020 budget request proposes substantial reductions from the FY2019 enacted level for DOE energy research and development (R&D) programs, including a reduction of $178 million (-24%) in fossil fuels and $502 million (-38%) in nuclear energy. Energy efficiency and renewable energy R&D would decline by $1.724 billion (-83%). DOE science programs would be reduced by $1.039 billion (-16%). Programs targeted by the budget for elimination or phaseout include energy efficiency grants, the Advanced Research Projects Agency\u2014Energy (ARPA-E), and loan guarantee programs. Funding would be reduced for USACE by $2.172 billion (-31%), and Reclamation and CUP by $462 million (-29%). Congress did not enact similar reductions included in the FY2018 and FY2019 budget requests."], "subsections": [{"section_title": "Budgetary Limits", "paragraphs": ["Congressional consideration of the annual Energy and Water Development appropriations bill is affected by certain procedural and statutory budget enforcement measures. These consist primarily of limits associated with the budget resolution on total discretionary spending and allocations of this amount that apply to spending under the jurisdiction of each appropriations subcommittee.", "Statutory budget enforcement is derived from the Budget Control Act of 2011 (BCA; P.L. 112-25 ). The BCA established separate limits on defense and nondefense discretionary spending. These limits are in effect for each of the fiscal years from FY2012 through FY2021, and are primarily enforced by an automatic spending reduction process called sequestration, in which a breach of a spending limit would trigger across-the-board cuts within that spending category.", "The BCA's statutory discretionary spending limits were increased for FY2018 and FY2019 by the Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123 ), enacted February 9, 2018. However, the BCA discretionary spending limits have not been increased for FY2020. As a result, the limits currently in place for FY2020 are substantially lower than the limits that were in place for FY2019. For discretionary defense spending, the FY2020 limit drops from $647 billion to $576 billion (-11%), while the nondefense limit drops from $597 billion to $542 billion (-9%). A bill to raise the defense and nondefense spending limits for FY2020 and FY2021 was reported by the House Budget Committee April 5, 2019 ( H.R. 2021 , H.Rept. 116-35 ). ", "(For more information, see CRS Report R44874, The Budget Control Act: Frequently Asked Questions , by Grant A. Driessen and Megan S. Lynch.)"], "subsections": []}]}, {"section_title": "Funding Issues and Initiatives", "paragraphs": ["Several issues raised by the Administration's budget request could generate controversy during congressional consideration of Energy and Water Development appropriations for FY2020. The issues described in this section\u2014listed approximately in the order the affected agencies appear in the Energy and Water Development bill\u2014were selected based on the total funding involved, the percentage of proposed increases or decreases, and potential impact on broader public policy considerations."], "subsections": [{"section_title": "USACE and Reclamation Budgets", "paragraphs": ["For USACE, the Trump Administration requested $4.827 billion for FY2020, which is $2.172 billion (-31%) below the FY2019 appropriation. The request includes no funding for initiating new studies and construction projects (referred to as new starts). The FY2020 request seeks to limit funding for ongoing navigation and flood risk-reduction construction projects to those whose benefits are at least 2.5 times their costs, or projects that address safety concerns. Many congressionally authorized USACE projects would not meet that standard. The Administration also proposes to transfer the Formerly Utilized Sites Remedial Action Program from USACE to DOE. For Reclamation, FY2020 funding would be reduced by $461.6 million (29%) from the FY2019 level, to $1.11 billion. For more details, see CRS In Focus IF11137, Army Corps of Engineers: FY2020 Appropriations , by Nicole T. Carter and Anna E. Normand; CRS In Focus IF11158, Bureau of Reclamation: FY2020 Appropriations , by Charles V. Stern; and CRS Report R45326, Army Corps of Engineers Annual and Supplemental Appropriations: Issues for Congress , by Nicole T. Carter. "], "subsections": []}, {"section_title": "Power Marketing Administration Reforms: Divestiture, Rate Reform, and Repeal of Borrowing Authority", "paragraphs": ["DOE's FY2020 budget request includes three mandatory proposals related to the Power Marketing Administrations (PMAs)\u2014Bonneville Power Administration (BPA), Southeastern Power Administration (SEPA), Southwestern Power Administration (SWPA), and Western Area Power Administration (WAPA). PMAs sell the power generated by the dams operated by Reclamation and USACE. The Administration proposes to divest the assets of the three PMAs that own transmission infrastructure: BPA, SWPA, and WAPA. These assets consist of thousands of miles of high voltage transmission lines and hundreds of power substations. The budget request projects that mandatory savings from the sale of these assets would total approximately $5.8 billion over a 10-year period. The FY2020 budget request includes a proposal to repeal the borrowing authority for WAPA's Transmission Infrastructure Program, which facilitates the delivery of renewable energy resources.", "The FY2020 budget also proposes eliminating the statutory requirement that PMAs limit rates to amounts necessary to recover only construction, operations, and maintenance costs; the budget proposes that the PMAs instead transition to a market-based approach to setting rates. The Administration has estimated that this proposal would yield $1.9 billion in new revenues over 10 years. The budget also calls for repealing $3.25 billion in borrowing authority provided to WAPA for transmission projects enacted under the American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ). The proposal is estimated to save $640 million over 10 years. ", "All of these proposals would need to be enacted in authorizing legislation, and no congressional action has been taken on them to date. The proposals have been opposed by groups such as the American Public Power Association and the National Rural Electrical Cooperative Association, and they have been the subject of opposition letters to the Administration from several regionally based bipartisan groups of Members of Congress. PMA reforms have been supported by some policy research institutes, such as the Heritage Foundation. For further information, see CRS Report R45548, The Power Marketing Administrations: Background and Current Issues , by Richard J. Campbell. "], "subsections": []}, {"section_title": "Termination of Energy Efficiency Grants", "paragraphs": ["The FY2020 budget request proposes to terminate both the DOE Weatherization Assistance Program and the State Energy Program (SEP). The Weatherization Assistance Program provides formula grants to states to fund energy efficiency improvements for low-income housing units to reduce their energy costs and save energy. The SEP provides grants and technical assistance to states for planning and implementation of their energy programs. Both the weatherization and SEP programs are under DOE's Office of Energy Efficiency and Renewable Energy (EERE). The weatherization program received $257 million and SEP $55 million for FY2019, after also having been proposed for elimination in that year's budget request, as well as in FY2018. According to DOE, the proposed elimination of the grant programs is \"due to a departmental shift in focus away from deployment activities and towards early-stage R&D.\""], "subsections": []}, {"section_title": "Proposed Cuts in Energy R&D", "paragraphs": ["Appropriations for DOE R&D on energy efficiency, renewable energy, nuclear energy, and fossil energy would be reduced from $4.133 billion in FY2019 to $1.729 billion (-58%) under the Administration's FY2020 budget request. Major proposed reductions include bioenergy technologies (-82%), vehicle technologies (-79%), natural gas technologies (-79%), advanced manufacturing (-75%), building technologies (-75%), wind energy (-74%), solar energy (-73%), geothermal technologies (-67%), and nuclear fuel cycle R&D (-66%). DOE says the proposed reductions would primarily affect the later stages of energy research, which tend to be the most costly. \"The Budget focuses DOE resources toward early-stage R&D, where the Federal role is strongest, and reflects an increased reliance on the private sector to fund later-stage research, development, and commercialization of energy technologies,\" according to the FY2020 DOE request. Similar reductions proposed by the Administration for FY2019 were not enacted."], "subsections": []}, {"section_title": "Nuclear Waste Management", "paragraphs": ["The Administration's FY2020 budget request, for the first time since FY2010, would provide new funding for a proposed nuclear waste repository at Yucca Mountain, NV; similar Administration requests for the repository project were not included in the enacted funding measures for FY2018 and FY2019. Under the FY2020 request, DOE would receive $116 million to seek an NRC license for the repository and to develop interim nuclear waste storage capacity. NRC would receive $38.5 million to consider DOE's application. DOE's total of $116 million in nuclear waste funding would come from two appropriations accounts: $90 million from Nuclear Waste Disposal and $26 million from Defense Nuclear Waste Disposal (to pay for defense-related nuclear waste that would be disposed of at Yucca Mountain).", "DOE submitted a license application for the Yucca Mountain repository in 2008, but NRC suspended consideration in 2011 for lack of funding. The Obama Administration had declared the Yucca Mountain site \"unworkable\" because of opposition from the state of Nevada. The House voted to provide the Yucca Mountain funding requested for FY2018 and a $100 million increase for FY2019, but the Senate Appropriations Committee did not include it for FY2018, and it was not included in the Senate-passed bill for FY2019. Also as in FY2018, the FY2019 Senate bill included an authorization for a pilot program to develop an interim nuclear waste storage facility at a voluntary site (\u00a7304). The enacted FY2019 appropriations measure did not include the House-passed funding for Yucca Mountain or the Senate's nuclear waste pilot program provisions. For more background, see CRS Report RL33461, Civilian Nuclear Waste Disposal , by Mark Holt."], "subsections": []}, {"section_title": "Elimination of Energy Loans and Loan Guarantees", "paragraphs": ["The FY2020 budget request would halt further loans and loan guarantees under DOE's Advanced Technology Vehicles Manufacturing Loan Program and the Title 17 Innovative Technology Loan Guarantee Program. Similar proposals to eliminate the programs in FY2018 and FY2019 were not enacted. The FY2020 budget request would also halt further loan guarantees under DOE's Tribal Energy Loan Guarantee Program. Under the FY2020 budget proposal, DOE would continue to administer its existing portfolio of loans and loan guarantees. Unused prior-year authority, or ceiling levels, for loan guarantee commitments would be rescinded, as well as $169.5 million in unspent appropriations to cover loan guarantee \"subsidy costs\" (which are primarily intended to cover potential losses). On March 22, 2019, after the FY2020 budget request had been submitted, DOE provided $3.7 billion in additional Title 17 loan guarantees for two new reactors under construction at the Vogtle nuclear plant in Georgia. The Vogtle project had previously received $8.3 billion in loan guarantees under the DOE program."], "subsections": []}, {"section_title": "International Thermonuclear Experimental Reactor", "paragraphs": ["The Administration's request for DOE includes $107 million in FY2020 for the U.S. contribution to the International Thermonuclear Experimental Reactor (ITER), which is under construction in France by a multinational consortium. \"ITER will be the first fusion device to maintain fusion for long periods of time\" and is to lay the technical foundation \"for the commercial production of fusion-based electricity,\" according to the consortium's website. The FY2020 DOE appropriation request, 19% below the FY2020 level, would pay for components supplied by U.S. companies for the project, such as central solenoid superconducting magnet modules. ITER has long attracted congressional concern about management, schedule, and cost. The United States is to pay 9% of the project's construction costs, including contributions of components, cash, and personnel. Other collaborators in the project include the European Union, Russia, Japan, India, South Korea, and China. The total U.S. share of the cost was estimated in 2015 at between $4.0 billion and $6.5 billion, up from $1.45 billion to $2.2 billion in 2008. DOE funding for the project was $122 million in FY2018 and $132 million in FY2019."], "subsections": []}, {"section_title": "Elimination of Advanced Research Projects Agency\u2014Energy", "paragraphs": ["The Trump Administration's FY2020 budget would eliminate the Advanced Research Projects Agency\u2014Energy (ARPA-E) and rescind $287 million of the agency's unobligated balances. ARPA-E funds research on technologies that are determined to have potential to transform energy production, storage, and use. \"This elimination facilitates opportunities to integrate the positive aspects of ARPA-E into DOE's applied energy research programs,\" according to the DOE request. The Administration also proposed to terminate ARPA-E in its FY2018 and FY2019 budget requests, but Congress increased the program's funding in both years.", "Because ARPA-E provides advance funding for projects for up to three years, oversight and management of the program would still be required during a phaseout period. According to the Administration budget request, \"ARPA-E will utilize the remainder of its unobligated balances to execute the multi-year termination of the program, with all operations ceasing by FY 2022.\""], "subsections": []}, {"section_title": "Weapons Activities", "paragraphs": ["The FY2020 budget request for DOE Weapons Activities is 12% greater than the FY2019 enacted level ($12.4 billion vs. $11.1 billion). Weapons Activities programs are carried out by the National Nuclear Security Administration (NNSA), a semiautonomous agency within DOE.", "Under Weapons Activities, FY2020 funding for nuclear warhead life-extension programs (LEPs) would increase by 10% ($2.1 billion vs $1.9 billion). The two most notable increases within that account are the funding request for W80-4 LEP, which increases by 37% ($898.6 million vs. $654.8 million) and the initiation of funding for the W87-1 LEP. The increase in the request for the W80-4 warhead, which is due to be carried on the new long-range standoff weapon (a new cruise missile), apparently is the result of a new budget estimate, as the Department of Defense is not accelerating development of the missile. The FY2020 request seeks $112 million for the W87-1 warhead (formerly the Interoperable Warhead 1, or IW-I), which received $53 million in FY2019. This warhead is to be carried by the Ground Based Strategic Deterrent, a new land-based missile that is scheduled to enter the force in the 2030s.", "The FY2020 budget request seeks $10 million for the W76-2 LEP, down from $65 million in FY2019. Work on this warhead is nearly complete. It is a low-yield modification of the current W76 warhead carried by U.S. submarine-launched ballistic missiles. It remains controversial in Congress despite its relatively low price tag.", "In FY2020, NNSA is seeking $51.5 million, in the Stockpile Systems account, for surveillance efforts for the B83 gravity bomb, the most powerful bomb in the U.S. inventory. This effort represents a 47% increase over the $35 million request in FY2019. The Obama Administration had planned to retire this bomb, but the Trump Administration reversed that decision in its 2018 Nuclear Posture Review. This decision may also prove controversial, as several Senators have been vocal supporters of the plan to retire the bomb.", "Within the Strategic Materials account in the NNSA budget, funding for Plutonium Sustainment would increase 97%, from $361 million enacted for FY2019 to $712 million requested for FY2020. This increase would support the Administration's plans to produce plutonium pits (or cores) for nuclear warheads at two facilities\u2014Los Alamos National Laboratory in New Mexico and the Savannah River Site in South Carolina. The Administration is seeking $410 million to begin conceptual design and pre-Critical Decision (CD)-1 activities at Savannah River. ", "For more information, see CRS Report R44442, Energy and Water Development Appropriations: Nuclear Weapons Activities , by Amy F. Woolf."], "subsections": []}, {"section_title": "Cleanup of Former Nuclear Sites", "paragraphs": ["DOE's Office of Environmental Management (EM) is responsible for environmental cleanup and waste management at the department's nuclear facilities. The total FY2020 appropriations request for EM activities of $6.469 billion would be a decrease of $706 million (-10%) from FY2019. The budgetary components of the EM program are Defense Environmental Cleanup (-9%), Non-Defense Environmental Cleanup (-20%), and the Uranium Enrichment Decontamination and Decommissioning Fund (-15%). The FY2020 request includes a proposal to transfer management of the Formerly Utilized Sites Remedial Action Program (FUSRAP) from USACE to the Office of Legacy Management (LM), the DOE office responsible for long-term stewardship of remediated sites. The FY2020 LM budget request includes $141 million for FUSRAP, down from $150 million appropriated to USACE for the program in FY2019. According to the DOE budget justification, \"USACE will continue to conduct cleanup of FUSRAP sites on a reimbursable basis.\""], "subsections": []}]}, {"section_title": "Bill Status and Recent Funding History", "paragraphs": [" Table 1 indicates the steps during consideration of FY2020 Energy and Water Development appropriations. (For more details, see the CRS Appropriations Status Table at http://www.crs.gov/AppropriationsStatusTable/Index .) As of the publication date of this report, no markups had been held.", " Table 2 includes budget totals for energy and water development appropriations enacted for FY2011 through FY2019, plus the FY2020 request."], "subsections": []}, {"section_title": "Description of Major Energy and Water Programs", "paragraphs": ["The annual Energy and Water Development appropriations bill includes four titles: Title I\u2014Corps of Engineers\u2014Civil; Title II\u2014Department of the Interior (Central Utah Project and Bureau of Reclamation); Title III\u2014Department of Energy; and Title IV\u2014Independent Agencies, as shown in Table 3 . Major programs in the bill are described in this section in the approximate order they appear in the bill. Previous appropriations and budget recommendations for FY2020 are shown in the accompanying tables, and additional details about many of these programs are provided in separate CRS reports as indicated. For a discussion of current funding issues related to these programs, see \" Funding Issues and Initiatives ,\" above. Congressional clients may obtain more detailed information by contacting CRS analysts listed in CRS Report R42638, Appropriations: CRS Experts , by James M. Specht and Justin Murray. "], "subsections": [{"section_title": "Agency Budget Justifications", "paragraphs": ["FY2020 budget justifications for the largest agencies funded by the annual Energy and Water Development appropriations bill can be found through the following links:", "Title I, U.S. Army Corps of Engineers, Civil Works, http://www.usace.army.mil/Missions/CivilWorks/Budget Title II Bureau of Reclamation, https://www.usbr.gov/budget/ Central Utah Project, https://www.doi.gov/sites/doi.gov/files/uploads/fy2020_cupca_budget_justification.pdf Title III, Department of Energy, https://www.energy.gov/cfo/downloads/fy-2020-budget-justification Title IV, Independent Agencies Appalachian Regional Commission, http://www.arc.gov/images/newsroom/publications/fy2020budget/FY2020PerformanceBudgetMar2019.pdf Nuclear Regulatory Commission, https://www.nrc.gov/docs/ML1906/ML19065A279.pdf Defense Nuclear Facilities Safety Board, https://www.dnfsb.gov/about/congressional-budget-requests Nuclear Waste Technical Review Board, http://www.nwtrb.gov/about-us/plans"], "subsections": []}, {"section_title": "Army Corps of Engineers", "paragraphs": ["USACE is an agency in the Department of Defense with both military and civilian responsibilities. Under its civil works program, which is funded by the Energy and Water appropriations bill, USACE plans, builds, operates, and in some cases maintains water resources facilities for coastal and inland navigation, riverine and coastal flood risk reduction, and aquatic ecosystem restoration. In recent decades, Congress has generally authorized Corps studies, construction projects, and other activities in omnibus water authorization bills, typically titled Water Resources Development Acts (WRDA), prior to funding them through appropriations legislation. Recent Congresses enacted the following omnibus water resources authorization acts: in June 2014, the Water Resources Reform and Development Act of 2014 (WRRDA, P.L. 113-121 ); in December 2016, the Water Resources Development Act of 2016 (Title I of P.L. 114-322 , the Water Infrastructure Improvements for the Nation Act [WIIN]); and in October 2018, the Water Resources Development Act of 2018 (Title I of P.L. 115-270 , America's Water Infrastructure Act of 2018 [AWIA 2018]). These acts consisted largely of authorizations for new USACE projects, and they altered numerous USACE policies and procedures.", "Unlike in highways and municipal water infrastructure programs, federal funds for USACE are not distributed to states or projects based on formulas or delivered via competitive grants. Instead, USACE generally is directly involved in planning, designing, and managing the construction of projects that are cost-shared with nonfederal project sponsors.", "Prior to FY2010, in addition to site-specific project funding included in the President's annual budget request for USACE, Congress, during the discretionary appropriations process, had identified many additional USACE projects to receive funding or had adjusted the funding levels for the projects identified in the President's request. Starting in the 112 th Congress, site-specific project line items added or increased by Congress (i.e., earmarks) became subject to House and Senate earmark moratorium policies. As a result, Congress generally has not added funding at the project level since FY2010. In lieu of the project-based increases, Congress has included \"additional funding\" for select categories of USACE projects and provided direction and limitations on the use of these funds. For more information, CRS In Focus IF11137, Army Corps of Engineers: FY2020 Appropriations , by Nicole T. Carter and Anna E. Normand. Previous appropriations and the President's request for FY2020 are shown in Table 4 ."], "subsections": []}, {"section_title": "Bureau of Reclamation and Central Utah Project", "paragraphs": ["Most of the large dams and water diversion structures in the West were built by, or with the assistance of, the Bureau of Reclamation. While the Corps of Engineers built hundreds of flood control and navigation projects, Reclamation's original mission was to develop water supplies, primarily for irrigation to reclaim arid lands in the West for farming and ranching. Reclamation has evolved into an agency that assists in meeting the water demands in the West while working to protect the environment and the public's investment in Reclamation infrastructure. The agency's municipal and industrial water deliveries have more than doubled since 1970.", "Today, Reclamation manages hundreds of dams and diversion projects, including more than 300 storage reservoirs, in 17 western states. These projects provide water to approximately 10 million acres of farmland and 31 million people. Reclamation is the largest wholesale supplier of water in the 17 western states and the second-largest hydroelectric power producer in the nation. Reclamation facilities also provide substantial flood control, recreation, and other benefits. Reclamation facility operations are often controversial, particularly for their effect on fish and wildlife species and because of conflicts among competing water users during drought conditions.", "As with the Corps of Engineers, the Reclamation budget is made up largely of individual project funding lines, rather than general programs that would not be covered by congressional earmark requirements. Therefore, as with USACE, these Reclamation projects have often been subject to earmark disclosure rules. The current moratorium on earmarks restricts congressional steering of money directly toward specific Reclamation projects.", "Reclamation's single largest account, Water and Related Resources, encompasses the agency's traditional programs and projects, including construction, operations and maintenance, dam safety, and ecosystem restoration, among others. Reclamation also typically requests funds in a number of smaller accounts, and has proposed additional accounts in recent years.", "Implementation and oversight of the Central Utah Project (CUP), also funded by Title II, is conducted by a separate office within the Department of the Interior. ", "For more information, see CRS In Focus IF11158, Bureau of Reclamation: FY2020 Appropriations , by Charles V. Stern. Previous appropriations and recommendations for FY2020 are shown in Table 5 ."], "subsections": []}, {"section_title": "Department of Energy", "paragraphs": ["The Energy and Water Development bill has funded all DOE programs since FY2005. Major DOE activities include (1) research and development (R&D) on renewable energy, energy efficiency, nuclear power, fossil energy, and electricity; (2) the Strategic Petroleum Reserve; (3) energy statistics; (4) general science; (5) environmental cleanup; and (6) nuclear weapons and nonproliferation programs. Table 6 provides the recent funding history for DOE programs, which are briefly described further below. "], "subsections": [{"section_title": "Energy Efficiency and Renewable Energy", "paragraphs": ["DOE's Office of Energy Efficiency and Renewable Energy (EERE) conducts research and development on transportation energy technology, energy efficiency in buildings and manufacturing processes, and the production of solar, wind, geothermal, and other renewable energy. EERE also administers formula grants to states for making energy efficiency improvements to low-income housing units and for state energy planning.", "The Sustainable Transportation program area includes electric vehicles, vehicle efficiency, and alternative fuels. DOE's electric vehicle program aims to \"reduce the cost of electric vehicle batteries by more than half, to less than $100/kWh [kilowatt-hour] (ultimate goal is $80/kWh), increase range to 300 miles, and decrease charge time to 15 minutes or less.\" DOE's vehicle fuel cell program is focusing on the costs of fuel cells and their hydrogen fuel. According to the FY2020 budget request, \"To be cost competitive with gasoline-powered internal combustion engines on a cents-per-mile driven basis, the cost of hydrogen delivered and dispensed needs to be less than $4/gge [gasoline gallon equivalent] (untaxed), and the cost of a durable fuel cell system to be less than $40/kW.\" Bioenergy goals include the development of \"drop-in\" fuels\u2014fuels that would be largely compatible with existing energy infrastructure and vehicles, with a goal of $3/gge. ", "Renewable power programs focus on electricity generation from solar, wind, water, and geothermal sources. The solar energy program has a goal of achieving, by 2030, costs of 3 cents per kWh for unsubsidized, utility-scale photovoltaics (PV). Wind R&D is to focus on early-stage research and testing to reduce costs and improve performance and reliability. The geothermal program is to focus on developing \"enhanced geothermal systems\" with an electricity generation cost target of 20.8 cents/kWh by 2022.", "In the energy efficiency program area, the advanced manufacturing program focuses on improving the energy efficiency of manufacturing processes and on the manufacturing of energy-related products. The building technologies program includes R&D on lighting, space conditioning, windows, and control technologies to reduce building energy-use intensity. The energy efficiency program also provides weatherization grants to states for improving the energy efficiency of low-income housing units and state energy planning grants.", "For more details, see CRS Report R44980, DOE's Office of Energy Efficiency and Renewable Energy (EERE): Appropriations Status , by Corrie E. Clark."], "subsections": []}, {"section_title": "Electricity Delivery, Cybersecurity, Energy Security, and Energy Reliability", "paragraphs": ["The Office of Cybersecurity, Energy Security, and Emergency Response (CESER) was created from programs that were previously part of the Office of Electricity Delivery and Energy Reliability. The programs that were not moved into CESER became part of the DOE Office of Electricity (OE).", "OE's mission is to lead DOE efforts \"to strengthen, transform, and improve energy infrastructure so that consumers have access to secure and resilient sources of energy.\" Major priorities of OE are developing a model of North American energy vulnerabilities, pursuing megawatt-scale electricity storage, integrating electric power system sensing technology, and analyzing electricity policy issues. The office also includes the DOE power marketing administrations, which are funded from separate appropriations accounts.", "CESER is the federal government's lead entity for energy sector-specific responses to energy security emergencies\u2014whether caused by physical infrastructure problems or by cybersecurity issues. The office conducts R&D on energy infrastructure security technology; provides energy sector security guidelines, training, and technical assistance; and enhances energy sector emergency preparedness and response.", "DOE's Multiyear Plan for Energy Sector Cybersecurity describes the department's strategy to \"strengthen today's energy delivery systems by working with our partners to address growing threats and promote continuous improvement, and develop game-changing solutions that will create inherently secure, resilient, and self-defending energy systems for tomorrow.\" The plan includes three goals that DOE has established for energy sector cybersecurity:", "strengthen energy sector cybersecurity preparedness; coordinate cyber incident response and recovery; and accelerate game-changing research, development, and demonstration (RD&D) of resilient energy delivery systems."], "subsections": []}, {"section_title": "Nuclear Energy", "paragraphs": ["DOE's Office of Nuclear Energy (NE) \"focuses on three major mission areas: the nation's existing nuclear fleet, the development of advanced nuclear reactor concepts, and fuel cycle technologies,\" according to DOE's FY2020 budget justification. It calls nuclear energy \"a key element of United States energy independence, energy dominance, electricity grid resiliency, national security, and clean baseload power.\"", "The Reactor Concepts program area includes research on advanced reactors, including advanced small modular reactors, and research to enhance the \"sustainability\" of existing commercial light water reactors. Advanced reactor research focuses on \"Generation IV\" reactors, as opposed to the existing fleet of commercial light water reactors, which are generally classified as generations II and III. R&D under this program focuses on advanced coolants, fuels, materials, and other technology areas that could apply to a variety of advanced reactors. To help develop those technologies, the Reactor Concepts program is developing a Versatile Test Reactor that would allow fuels and materials to be tested in a fast neutron environment (in which neutrons would not be slowed by water, graphite, or other \"moderators\"). Research on extending the life of existing commercial light water reactors beyond 60 years, the maximum operating period currently licensed by NRC, is being conducted by this program with industry cost-sharing.", "The Fuel Cycle Research and Development program includes generic research on nuclear waste management and disposal. One of the program's primary activities is the development of technologies to separate the radioactive constituents of spent fuel for reuse or solidifying into stable waste forms. Other major research areas in the Fuel Cycle R&D program include the development of accident-tolerant fuels for existing commercial reactors, evaluation of fuel cycle options, and development of improved technologies to prevent diversion of nuclear materials for weapons. The program is also developing sources of high-assay low enriched uranium (HALEU), in which uranium is enriched to between 5% and 20% in the fissile isotope U-235, for potential use in advanced reactors. For more information, see CRS Report R45706, Advanced Nuclear Reactors: Technology Overview and Current Issues , by Danielle A. Arostegui and Mark Holt. "], "subsections": []}, {"section_title": "Fossil Energy Research and Development", "paragraphs": ["Much of DOE's Fossil Energy R&D Program focuses on carbon capture and storage for power plants fueled by coal and natural gas. Major activities include Advanced Coal Energy Systems and Carbon Capture, Utilization, and Storage (CCUS); Natural Gas Technologies; and Unconventional Fossil Energy Technologies from Petroleum\u2014Oil Technologies.", "Advanced Coal Energy Systems includes R&D on modular coal-gasification systems, advanced turbines, solid oxide fuel cells, advanced sensors and controls, and power generation efficiency.", "Elements of the CCUS program include the following:", "Carbon Capture subprogram for separating CO 2 in both precombustion and postcombustion systems; Carbon Utilization subprogram for R&D on technologies to convert carbon to marketable products, such as chemicals and polymers; and Carbon Storage subprogram on long-term geologic storage of CO 2 , focusing on saline formations, oil and natural gas reservoirs, unmineable coal seams, basalts, and organic shales.", "For more information, see CRS In Focus IF10589, FY2019 Funding for CCS and Other DOE Fossil Energy R&D , by Peter Folger, and CRS Report R44472, Funding for Carbon Capture and Sequestration (CCS) at DOE: In Brief , by Peter Folger. "], "subsections": []}, {"section_title": "Strategic Petroleum Reserve", "paragraphs": ["The Strategic Petroleum Reserve (SPR), authorized by the Energy Policy and Conservation Act ( P.L. 94-163 ) in 1975, consists of caverns built within naturally occurring salt domes in Louisiana and Texas. The SPR provides strategic and economic security against foreign and domestic disruptions in U.S. oil supplies via an emergency stockpile of crude oil. The program fulfills U.S. obligations under the International Energy Program, which avails the United States of International Energy Agency (IEA) assistance through its coordinated energy emergency response plans, and provides a deterrent against energy supply disruptions. DOE has been conducting a major maintenance program to address aging infrastructure and a deferred maintenance backlog at SPR facilities.", "The federal government has not purchased oil for the SPR since 1994. Beginning in 2000, additions to the SPR were made with royalty-in-kind (RIK) oil acquired by DOE in lieu of cash royalties paid on production from federal offshore leases. In September 2009, the Secretary of the Interior announced a phaseout of the RIK Program. By early 2010, the SPR's capacity reached 727 million barrels. A series of oil sales and purchases since then have resulted in a net reduction of the SPR inventory. Currently, the SPR contains about 649 million barrels.", "Congress has enacted several laws since 2015 that mandate sales of SPR oil, including the Bipartisan Budget Act of 2015 ( P.L. 114-74 ), the Fixing America's Surface Transportation Act ( P.L. 114-94 ), the 21 st Century Cures Act of 2016 ( P.L. 114-255 ), the 2017 Tax Revision ( P.L. 115-97 ), the Bipartisan Budget Act of 2018 ( P.L. 115-123 ), and the Consolidated Appropriations Act, 2018. Broadly considered, this legislation requires oil to be sold from the reserve over the period FY2017 through FY2027, totaling 266 million barrels.", "For more information, see CRS Report R45577, Strategic Petroleum Reserve: Mandated Sales and Reform , by Robert Pirog, and CRS In Focus IF10869, Reconsidering the Strategic Petroleum Reserve , by Robert Pirog. "], "subsections": []}, {"section_title": "Science and ARPA-E", "paragraphs": ["The DOE Office of Science conducts basic research in six program areas: advanced scientific computing research, basic energy sciences, biological and environmental research, fusion energy sciences, high-energy physics, and nuclear physics. According to DOE's FY2020 budget justification, the Office of Science \"is the Nation's largest Federal sponsor of basic research in the physical sciences and the lead Federal agency supporting fundamental scientific research for our Nation's energy future.\"", "DOE's Advanced Scientific Computing Research (ASCR) program focuses on developing and maintaining computing and networking capabilities for science and research in applied mathematics, computer science, and advanced networking. The program plays a key role in the DOE-wide effort to advance the development of exascale computing, which seeks to build a computer that can solve scientific problems 1,000 times faster than today's best machines. DOE has asserted that the department is on a path to have a capable exascale machine by the early 2020s.", "Basic Energy Sciences (BES), the largest program area in the Office of Science, focuses on understanding, predicting, and ultimately controlling matter and energy at the electronic, atomic, and molecular levels. The program supports research in disciplines such as condensed matter and materials physics, chemistry, and geosciences. BES also provides funding for scientific user facilities (e.g., the National Synchrotron Light Source II, and the Linac Coherent Light Source-II), and certain DOE research centers and hubs (e.g., Energy Frontier Research Centers, as well as the Batteries and Energy Storage and Fuels from Sunlight Energy Innovation Hubs).", "Biological and Environmental Research (BER) seeks a predictive understanding of complex biological, climate, and environmental systems across a continuum from the small scale (e.g., genomic research) to the large (e.g., Earth systems and climate). Within BER, Biological Systems Science focuses on plant and microbial systems, while Biological and Environmental Research supports climate-relevant atmospheric and ecosystem modeling and research. BER facilities and centers include four Bioenergy Research Centers and the Environmental Molecular Science Laboratory at Pacific Northwest National Laboratory. ", "Fusion Energy Sciences (FES) seeks to increase understanding of the behavior of matter at very high temperatures and to establish the science needed to develop a fusion energy source. FES provides funding for the International Thermonuclear Experimental Reactor (ITER) project, a multinational effort to design and build an experimental fusion reactor. According to DOE, ITER \"aims to provide fusion power output approaching reactor levels of hundreds of megawatts, for hundreds of seconds.\" However, many U.S. analysts have expressed concern about ITER's cost, schedule, and management, as well as the budgetary impact on domestic fusion research. ", "The High Energy Physics (HEP) program conducts research on the fundamental constituents of matter and energy, including studies of dark energy and the search for dark matter. Nuclear Physics supports research on the nature of matter, including its basic constituents and their interactions. A major project in the Nuclear Physics program is the construction of the Facility for Rare Isotope Beams at Michigan State University. ", "A separate DOE office, the Advanced Research Projects Agency\u2014Energy (ARPA-E), was authorized by the America COMPETES Act ( P.L. 110-69 ) to support transformational energy technology research projects. DOE budget documents describe ARPA-E's mission as overcoming long-term, high-risk technological barriers to the development of energy technologies. ", "For more details, see CRS Report R45150, Federal Research and Development (R&D) Funding: FY2019 , coordinated by John F. Sargent Jr."], "subsections": []}, {"section_title": "Loan Guarantees and Direct Loans", "paragraphs": ["DOE's Loan Programs Office provides loan guarantees for projects that deploy specified energy technologies, as authorized by Title 17 of the Energy Policy Act of 2005 (EPACT05, P.L. 109-58 ), direct loans for advanced vehicle manufacturing technologies, and loan guarantees for tribal energy projects. Section 1703 of the act authorizes loan guarantees for advanced energy technologies that reduce greenhouse gas emissions, and Section 1705 established a temporary program for renewable energy and energy efficiency projects.", "Title 17 allows DOE to provide loan guarantees for up to 80% of construction costs for eligible energy projects. Successful applicants must pay an up-front fee, or \"subsidy cost,\" to cover potential losses under the loan guarantee program. Under the loan guarantee agreements, the federal government would repay all covered loans if the borrower defaulted. Such guarantees would reduce the risk to lenders and allow them to provide financing at below-market interest rates. The following is a summary of loan guarantee amounts that have been authorized (loan guarantee ceilings) for various technologies:", "$8.3 billion for nonnuclear technologies under Section 1703; $2.0 billion for unspecified projects from FY2007 under Section 1703; $18.5 billion for nuclear power plants ($12.0 billion committed); $4 billion for loan guarantees for uranium enrichment plants; $1.18 billion for renewable energy and energy efficiency projects under Section 1703, in addition to other loan guarantee ceilings, which can include applications that were pending under Section 1705 before it expired; and In addition to the loan guarantee ceilings above, an appropriation of $161 million was provided for subsidy costs for renewable energy and energy efficiency loan guarantees under Section 1703. If the subsidy costs averaged 10% of the loan guarantees, this funding could leverage loan guarantees totaling about $1.6 billion.", "The only loan guarantees under Section 1703 were $8.3 billion in guarantees provided to the consortium building two new reactors at the Vogtle plant in Georgia. DOE committed an additional $3.7 billion in loan guarantees for the Vogtle project on March 22, 2019. Another nuclear loan guarantee is being sought by NuScale Power to build a small modular reactor in Idaho."], "subsections": []}, {"section_title": "Nuclear Weapons Activities", "paragraphs": ["In the absence of explosive testing of nuclear weapons, the United States has adopted a science-based program to maintain and sustain confidence in the reliability of the U.S. nuclear stockpile. Congress established the Stockpile Stewardship Program in the National Defense Authorization Act for Fiscal Year 1994 ( P.L. 103-160 ). The goal of the program, as amended by the National Defense Authorization Act for Fiscal Year 2010 ( P.L. 111-84 , \u00a73111), is to ensure \"that the nuclear weapons stockpile is safe, secure, and reliable without the use of underground nuclear weapons testing.\" The program is operated by NNSA, a semiautonomous agency within DOE established by the National Defense Authorization Act for Fiscal Year 2000 ( P.L. 106-65 , Title XXXII). NNSA implements the Stockpile Stewardship Program through the activities funded by the Weapons Activities account in the NNSA budget.", "Most of NNSA's weapons activities take place at the nuclear weapons complex, which consists of three laboratories (Los Alamos National Laboratory, NM; Lawrence Livermore National Laboratory, CA; and Sandia National Laboratories, NM and CA); four production sites (Kansas City National Security Campus, MO; Pantex Plant, TX; Savannah River Site, SC; and Y-12 National Security Complex, TN); and the Nevada National Security Site (formerly the Nevada Test Site). NNSA manages and sets policy for the weapons complex; contractors to NNSA operate the eight sites. Radiological activities at these sites are subject to oversight and recommendations by the independent Defense Nuclear Facilities Safety Board, funded by Title IV of the annual Energy and Water Development appropriations bill.", "There are three major program areas in the Weapons Activities account.", "Directed Stockpile Work includes the life extension programs (LEPs) on existing warheads and stockpile services programs that monitor their condition; and maintaining warheads through repairs, refurbishment, and modifications. It also includes funding for research and development in support of specific warheads, and dismantlement of warheads that have been removed from the stockpile. This last activity received more significant funding as the number of warheads in the U.S. stockpile declined after the Cold War; it also provides a source for critical components for warheads remaining in the stockpile. Directed Stockpile Work also involves programs that work on the materials needed for nuclear warheads, including the plutonium pits that are the core of the weapons.", "Research, Development, Test, and Evaluation (RDT&E) includes five programs that focus on \"efforts to develop and maintain critical capabilities, tools, and processes needed to support science based stockpile stewardship, refurbishment, and continued certification of the stockpile over the long-term in the absence of underground nuclear testing.\" This area includes operation of some large experimental facilities, such as the National Ignition Facility at Lawrence Livermore National Laboratory. ", "Infrastructure and Operations has, as its main funding elements, material recycle and recovery, recapitalization of facilities, and construction of facilities. The latter include two major projects that have generated congressional controversy: the Uranium Processing Facility (UPF) at the Y-12 National Security Complex and the Chemistry and Metallurgy Research Replacement (CMRR) Project, which deals with plutonium, at Los Alamos National Laboratory.", "Nuclear Weapons Activities also has several smaller programs, including the following:", "Secure Transportation Asset, providing for safe and secure transport of nuclear weapons, components, and materials; Defense Nuclear Security, providing operations, maintenance, and construction funds for protective forces, physical security systems, personnel security, and related activities; and Information Technology and Cybersecurity, whose elements include cybersecurity, secure enterprise computing, and Federal Unclassified Information Technology.", "For more information, see CRS Report R44442, Energy and Water Development Appropriations: Nuclear Weapons Activities , by Amy F. Woolf, and CRS Report R45306, The U.S. Nuclear Weapons Complex: Overview of Department of Energy Sites , by Amy F. Woolf and James D. Werner. "], "subsections": []}, {"section_title": "Defense Nuclear Nonproliferation", "paragraphs": ["DOE's nonproliferation and national security programs provide technical capabilities to support U.S. efforts to prevent, detect, and counter the spread of nuclear weapons worldwide. These programs are administered by NNSA's Office of Defense Nuclear Nonproliferation.", "The Materials Management and Minimization program conducts activities to minimize and, where possible, eliminate stockpiles of weapons-useable material around the world. Major activities include conversion of reactors that use highly enriched uranium (useable for weapons) to low-enriched uranium, removal and consolidation of nuclear material stockpiles, and disposition of excess nuclear materials.", "Global Materials Security has three major program elements. International Nuclear Security focuses on increasing the security of vulnerable stockpiles of nuclear material in other countries. Radiological Security promotes the worldwide reduction and security of radioactive sources, including the removal of surplus sources and substitution of technologies that do not use radioactive materials. Nuclear Smuggling Detection and Deterrence works to improve the capability of other countries to halt illicit trafficking of nuclear materials.", "Nonproliferation and Arms Control works to \"to support U.S. nonproliferation and arms control objectives to prevent proliferation, ensure peaceful nuclear uses, and enable verifiable nuclear reductions,\" according to the FY2020 DOE justification. This program conducts reviews of nuclear export applications and technology transfer authorizations, implements treaty obligations, and analyzes nonproliferation policies and proposals.", "Other programs under Defense Nuclear Nonproliferation include research and development and construction, which advances nuclear detection and nuclear forensics technologies. Nuclear Counterterrorism and Incident Response provides \"interagency policy, contingency planning, training, and capacity building\" to counter nuclear terrorism and strengthen incident response capabilities, according to the FY2020 budget justification."], "subsections": []}, {"section_title": "Cleanup of Former Nuclear Weapons Production and Research Sites", "paragraphs": ["The development and production of nuclear weapons during half a century since the beginning of the Manhattan Project resulted in a waste and contamination legacy managed by DOE that continues to present substantial challenges today. DOE also manages legacy environmental contamination at sites used for nondefense nuclear research. In 1989, DOE established the Office of Environmental Management primarily to consolidate its responsibilities for the cleanup of former nuclear weapons production sites that had been administered under multiple offices.", "DOE's nuclear cleanup efforts are broad in scope and include the disposal of large quantities of radioactive and other hazardous wastes generated over decades; management and disposal of surplus nuclear materials; remediation of extensive contamination in soil and groundwater; decontamination and decommissioning of excess buildings and facilities; and safeguarding, securing, and maintaining facilities while cleanup is underway. DOE's cleanup of nuclear research sites adds a nondefense component to the EM's mission, albeit smaller in terms of the scope of their cleanup and associated funding.", "DOE has identified more than 100 separate sites in over 30 states that historically were involved in the production of nuclear weapons and nuclear energy research for civilian purposes. The geographic scope of these sites is substantial, collectively encompassing a land area of approximately 2 million acres. Cleanup remedies are in place and operational at the majority of these sites. Responsibility for the long-term stewardship of them has been transferred to the Office of Legacy Management and other offices within DOE for the operation and maintenance of cleanup remedies and monitoring. Some of the smaller sites for which DOE initially was responsible were transferred to the Army Corps of Engineers in 1997 under the Formerly Utilized Sites Remedial Action Program (FUSRAP). Once USACE completes the cleanup of a FUSRAP site, it is transferred back to DOE for long-term stewardship under the Office of Legacy Management, which is separate from EM and has its own funding account.", "Three appropriations accounts fund the Office of Environmental Management. The Defense Environmental Cleanup account is the largest in terms of funding, and it finances the cleanup of former nuclear weapons production sites. The Non-Defense Environmental Cleanup account funds the cleanup of federal nuclear energy research sites. Title XI of the Energy Policy Act of 1992 ( P.L. 102-486 ) established the Uranium Enrichment Decontamination and Decommissioning Fund to pay for the cleanup of three federal facilities that enriched uranium for national defense and civilian purposes. Those facilities are located near Paducah, KY; Piketon, OH (Portsmouth plant); and Oak Ridge, TN. Title X of P.L. 102-486 authorized the reimbursement of uranium and thorium producers for their costs of cleaning up contamination attributable to uranium and thorium sold to the federal government. ", "The adequacy of funding for the Office of Environmental Management to attain cleanup milestones across the entire site inventory has been a recurring issue. Cleanup milestones are enforceable measures incorporated into compliance agreements negotiated among DOE, the Environmental Protection Agency, and the states. These milestones establish time frames for the completion of specific actions to satisfy applicable requirements at individual sites."], "subsections": []}, {"section_title": "Power Marketing Administrations", "paragraphs": ["DOE's four Power Marketing Administrations were established to sell the power generated by the dams operated by the Bureau of Reclamation and the Army Corps of Engineers. Preference in the sale of power is given to publicly owned and cooperatively owned utilities. The PMAs operate in 34 states; their assets consist primarily of transmission infrastructure in the form of more than 33,000 miles of high voltage transmission lines and 587 substations. PMA customers are responsible for repaying all power program expenses, plus the interest on capital projects. Since FY2011, power revenues associated with the PMAs have been classified as discretionary offsetting receipts (i.e., receipts that are available for spending by the PMAs), thus the agencies are sometimes noted as having a \"net-zero\" spending authority. Only the capital expenses of WAPA and SWPA require appropriations from Congress.", "For more information, see CRS Report R45548, The Power Marketing Administrations: Background and Current Issues , by Richard J. Campbell. "], "subsections": []}]}]}, {"section_title": "Independent Agencies", "paragraphs": ["Independent agencies that receive funding in Title IV of the Energy and Water Development bill include the Nuclear Regulatory Commission (NRC), the Appalachian Regional Commission (ARC), and the Defense Nuclear Facilities Safety Board. NRC is by far the largest of the independent agencies, with a total budget of more than $900 million. However, as noted in the description of NRC below, about 90% of NRC's budget is offset by fees, so that the agency's net appropriation is less than half of the total funding in Title IV. The recent appropriations history for all the Title IV agencies is shown in Table 7 ."], "subsections": [{"section_title": "Appalachian Regional Commission", "paragraphs": ["Established in 1965, the Appalachian Regional Commission (ARC) is a regional economic development agency. It awards grants and contracts to state and local governments and nonprofit organizations to foster economic opportunities, improve workforce skills, build critical infrastructure, strengthen natural and cultural assets, and improve leadership skills and capacity in the region. ARC's authorizing statute defines the Appalachian Region as including all of West Virginia and parts of Alabama, Georgia, Kentucky, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, and Virginia. More than 25 million people currently live in the region as defined.", "ARC provides funding to several hundred projects each year, with particular focus on the region's most economically distressed counties. Major areas of infrastructure support broadband communication systems, transportation, and water and wastewater systems. ARC has supported development of the Appalachian Development Highway System (ADHS), a planned 3,000-mile system of highways that connect with the U.S. Interstate Highway System. According to ARC, 90.5% of ADHS is currently \"complete, open to traffic, or under construction.\""], "subsections": []}, {"section_title": "Nuclear Regulatory Commission", "paragraphs": ["NRC is an independent agency that establishes and enforces safety and security standards for nuclear power plants and users of nuclear materials. Major appropriations categories for NRC are shown in Table 8 . Nuclear Reactor Safety is NRC's largest program and is responsible for licensing and regulating the U.S. fleet of 98 power reactors, plus two under construction. NRC is also responsible for licensing and regulating nuclear waste facilities, such as the proposed underground nuclear waste repository at Yucca Mountain, NV.", "NRC is required by law to offset about 90% of its total budget, excluding specified items, through fees charged to nuclear reactor owners and other holders of NRC licenses. As a result, NRC's net appropriation can be as low as 10% of its total funding level, depending on the activities that Congress excludes from fee recovery. For example, excluded items in NRC's FY2019 enacted appropriation are prior-year balances, development of advanced reactor regulations, and international activities. "], "subsections": []}]}, {"section_title": "Congressional Hearings", "paragraphs": ["The following hearings have been held by the Energy and Water Development subcommittees of the House and Senate Appropriations Committees on the FY2020 budget request. Testimony and opening statements are posted on most of the web pages cited for each hearing, along with webcasts in many cases."], "subsections": [{"section_title": "House", "paragraphs": ["Department of Energy , March 26, 2019, https://appropriations.house.gov/legislation/hearings/budget-department-of-energy . Corps of Engineers (Civil Works) and the Bureau of Reclamation , March 27, 2019, https://appropriations.house.gov/legislation/hearings/budget-us-army-corps-of-engineers-and-bureau-of-reclamation . National Nuclear Security Administration , April 2, 2019, https://appropriations.house.gov/legislation/hearings/budget-department-of-energy-national-nuclear-security-administration. DOE Science, Energy, and Environmental Management Programs , April 3, 2019, https://appropriations.house.gov/legislation/hearings/budget-science-energy-and-environmental-management-programs."], "subsections": []}, {"section_title": "Senate", "paragraphs": ["Department of Energy , March 27, 2019, https://www.appropriations.senate.gov/hearings/review-of-the-fy2020-budget-request-for-the-us-department-of-energy . National Nuclear Security Administration , April 3, 2019, https://www.appropriations.senate.gov/hearings/review-of-the-fy2020-budget-request-for-the-national-nuclear-security-administration . U.S. Army Corps of Engineers and the Bureau of Reclamation , April 10, 2019, https://www.appropriations.senate.gov/hearings/review-of-the-fy2020-budget-requests-for-army-corps-of-engineers-and-bureau-of-reclamation ."], "subsections": []}]}]}}
{"id": "R44116", "title": "Department of Defense Contractor and Troop Levels in Afghanistan and Iraq: 2007-2018", "released_date": "2019-05-10T00:00:00", "summary": ["Throughout its history, the Department of Defense (DOD) has relied on contractors to support a wide range of military operations. Operations over the last thirty years have highlighted the critical role that contractors play in supporting U.S. troops\u2014both in terms of the number of contractors and the type of work being performed. During recent U.S. military operations in Iraq and Afghanistan, contractors often accounted for 50% or more of the total DOD presence in-country.", "For the fourth quarter of fiscal year (FY) 2018, U.S. Central Command (CENTCOM) reported 49,451 contractor personnel working for DOD within its area of responsibility, which included 28,189 individuals located in Afghanistan, Iraq, and Syria. From FY2009 to FY2018, obligations for all DOD-funded contracts performed within the Iraq and Afghanistan areas of operation totaled approximately $208 billion in FY2019 dollars.", "In late 2017, the DOD stopped reporting the number of U.S. military personnel deployed in support of operations in Afghanistan, Iraq, and Syria as part of its quarterly manpower reports and in other official releases. These data remain withheld."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides background information for Congress on the levels of Department of Defense (DOD) military servicemembers and contractor personnel deployed in support of prior and ongoing military operations in Iraq and Afghanistan. For more information on DOD's use of contractor personnel, see CRS In Focus IF10600, Defense Primer: Department of Defense Contractors , by Heidi M. Peters and Moshe Schwartz and CRS Report R43074, Department of Defense's Use of Contractors to Support Military Operations: Background, Analysis, and Issues for Congress , by Moshe Schwartz."], "subsections": []}, {"section_title": "The Role of Contractors in Military Operations", "paragraphs": ["Throughout its history, DOD has relied on contractors to support a wide range of military operations. Operations over the past 30 years have highlighted the critical role that contractors play in supporting U.S. military servicemembers, both in terms of the number of contractors and the type of work being performed. During recent U.S. military operations in Iraq and Afghanistan, contractors frequently averaged 50% or more of the total DOD presence in-country."], "subsections": [{"section_title": "Tracking Contractors During Contingency Operations", "paragraphs": ["Since 2008, U.S. Central Command (CENTCOM) has published quarterly contractor census reports that provide aggregated data \u2013 including elements such as mission category and nationality \u2013 on contractors employed through DOD-funded contracts who are physically located within the CENTCOM area of responsibility.", "Analysts and observers have previously raised questions about the reliability of the data gathered by DOD regarding the number of contractors it employs in theater in support of military operations. DOD officials, however, have stated that since 2009, the DOD has implemented a variety of mechanisms to improve the reliability of contractor data it gathers, including modifications to information technology systems, such as data collection systems like the joint Synchronized Predeployment and Operational Tracker (SPOT) database; updates and changes to related departmental policies; and changes in \"leadership emphasis\" within DOD and the combatant commands.", "For the fourth quarter of Fiscal Year (FY) 2018, CENTCOM reported 49,451 contractor personnel working for DOD within its area of responsibility, which included 28,189 individuals located in Afghanistan, Iraq, and Syria (see Figure 1 and Figure 2 ). ", "From FY2009 to FY2018, obligations for all DOD-funded contracts performed within the Iraq and Afghanistan areas of operation totaled approximately $208 billion in FY2019 dollars (see Table 5 )."], "subsections": []}, {"section_title": "Force Management Levels for Deployed U.S. Armed Forces", "paragraphs": ["Force management levels, sometimes also described as troop caps, troop ceilings, or force manning levels, have historically been used by the United States to establish bounds on the number of military personnel that may be deployed in a country or region. ", "The executive and legislative branches of the U.S. government have used force management levels to guide the execution of certain overseas U.S. military operations, as well as the associated presence of DOD personnel. During the 1980s, for example, Congress used provisions within annual appropriations legislation to establish force management levels limiting the number of active duty U.S. military personnel stationed ashore in Europe. The Obama Administration used force management levels to manage its drawdown of the U.S. military presence in Afghanistan, and to manage the U.S. military presence in Iraq and Syria under Operation Inherent Resolve. The Trump Administration has reportedly delegated the authority to establish force management levels for Afghanistan, Iraq, and Syria to the Secretary of Defense.", "In August 2017, the DOD announced that it was revising its force management level accounting and reporting practices for Afghanistan to also include U.S. Armed Forces personnel in-country for short-duration missions, personnel in a temporary duty status, personnel assigned to combat support agencies, and forces assigned to the material recovery element and the Resolute Support sustainment brigade in reported totals. ", "In late 2017, the Defense Department stopped reporting the number of U.S. military personnel deployed in support of operations in Afghanistan, Iraq, and Syria as part of its quarterly manpower reports and in other official releases. These data remain withheld, leading to criticism from some observers and Members of Congress."], "subsections": []}, {"section_title": "DOD Usage of Contractors During Ongoing Military Operations", "paragraphs": ["Some observers and experts argued that external \"resource limits\" of force management levels may have increased DOD's \"reliance on\u2026contractor and temporary duty personnel\" to effectively execute ongoing military operations in Afghanistan, Iraq, and Syria. In February 2017, U.S. Army General John Nicholson, then Commander of the NATO Resolute Support Mission and United States Forces\u2013Afghanistan, testified before the Senate Armed Services Committee that DOD had to \"substitute contractors for soldiers in order to meet the force manning levels\" in Afghanistan. While the drawdown of U.S. forces contributed to a demonstrable increase in the ratio of contractors to uniformed servicemembers in Afghanistan between 2012 and 2017, it is difficult to assess if the increased ratio supported General Nicholson's assertion. ", "The House-passed version of the FY2018 National Defense Authorization Act (NDAA, H.R. 2810 ) contained a provision (Section 923) that would have expressed the sense of Congress that the DOD should discourage the practice of substituting contractor personnel for available members of the Armed Forces when a unit deploys overseas. This section also would have required the Secretary of Defense to provide a related briefing to the congressional defense committees. A similar provision was not included in the Senate amendment to H.R. 2810 . While the House receded in conference, the conferees directed the Secretary of Defense to provide a briefing detailing steps taken by DOD to revise deployment guidelines to ensure readiness, unit cohesion, and maintenance were prioritized, as well as the Secretary of Defense's plan to establish a policy to avoid the practice of directly substituting contractor personnel for U.S. military personnel when practicable in the future.", "Concern about DOD's use of contractors in contingency operations predates the recent usage of force management levels. For example, the Commission on Wartime Contracting in Iraq and Afghanistan, in its 2011 final report to Congress, expressed its view that operations in Iraq and Afghanistan between FY2002 and FY2011 had led to an \"unhealthy over-reliance\" on contractors by DOD, Department of State, and USAID."], "subsections": []}, {"section_title": "Private Security Contractors in Afghanistan and Iraq", "paragraphs": ["In Iraq and Afghanistan, armed and unarmed private security contractors have been employed to provide services such as protecting fixed locations; guarding traveling convoys; providing security escorts; and training police and military personnel. The number of private security contractor employees working for DOD in Iraq and Afghanistan has fluctuated significantly over time, and is dependent on a variety of factors, including current force management levels in-country and U.S. operational needs.", "The presence of private security contractors peaked in Afghanistan in 2012 at more than 28,000 individuals and in Iraq in 2009 at more than 15,000 individuals. For the fourth quarter of FY2018, DOD reported 4,172 private security contractors in Afghanistan, with 2,397 categorized as armed private security contractors (see Table 2 ). DOD reported 418 security contractor personnel in Iraq and Syria during the same period, none of whom were identified as armed private security contractors (see Table 4 )."], "subsections": []}]}, {"section_title": "U.S. Armed Forces and Contractor Personnel in Afghanistan", "paragraphs": ["As of the fourth quarter of FY2018, 25,239 DOD contractor personnel were located in Afghanistan (see Table 1 ). Approximately 44% of DOD's reported individual contractors were U.S. citizens (10,989), approximately 42% were third-country nationals (10,628), and roughly 14% were local nationals (3,622). Of the 25,239 DOD contractor personnel, about 9% were armed private security contractors (2,397). ", "As of May 2019, observers and analysts estimated the number of U.S. Armed Forces personnel in Afghanistan to be between 14,000 and 15,000. Reports in early 2019 indicate the Trump Administration may be contemplating withdrawing some portion of in-country U.S. forces (a subject of ongoing U.S.-Taliban negotiations). U.S. officials have stated that no final policy decision has been made."], "subsections": []}, {"section_title": "U.S. Armed Forces and Contractor Personnel in Iraq", "paragraphs": ["DOD ceased publicly reporting numbers of DOD contractor personnel working in Iraq in December 2013, following the conclusion of the U.S. combat mission in Iraq (Operation Iraqi Freedom and Operation New Dawn), and the subsequent drawdown of DOD contractor personnel levels in Iraq. ", "In late 2014, in response in part to developing operations in the region, DOD reinitiated reporting broad estimates of DOD contractor personnel deployed in Iraq in support of Operation Inherent Resolve (OIR). As the number of DOD contractor personnel in Iraq increased over the first six months of 2015, DOD resumed reporting exact numbers and primary mission categories of OIR contractor personnel in June 2015. In the second quarter of FY2018, DOD began reporting a combined total of contractor personnel physically located in Iraq and Syria.", "As of the fourth quarter of FY2018, there were 6,318 DOD contractor personnel in Iraq and Syria (see Table 3 ). Approximately 49% of DOD's reported individual contractors were U.S. citizens (3,086), approximately 38% were third-country nationals (2,405); and roughly 13% were local/host-country nationals. As of FY2018, CENTCOM has not resumed reporting data on DOD-funded private security personnel in Iraq.", "In December 2017, DOD indicated the number of U.S. Armed Forces personnel in Iraq was roughly 5,200, and indicated the number of U.S. Armed Forces personnel in Syria was approximately 2,000. In December 2018, President Donald J. Trump announced that U.S. forces had defeated the Islamic State and would leave Syria; however, in February 2019, the White House indicated that several hundred U.S. troops would remain in Syria."], "subsections": []}]}}
{"id": "RS22654", "title": "Veto Override Procedure in the House and Senate", "released_date": "2019-03-26T00:00:00", "summary": ["A bill or joint resolution that has been vetoed by the President can become law if two-thirds of the Members voting in the House and the Senate each agree to pass it over the President's objection. The chambers act sequentially on vetoed measures: The House acts first on House-originated measures (H.R. and H.J. Res.), and the Senate acts first on Senate-originated measures (S. and S.J. Res.). If the first-acting chamber fails to override the veto, the other chamber cannot consider it. The House typically considers the question of overriding a presidential veto under the hour rule, with time customarily controlled and allocated by the chair and ranking member of the committee with jurisdiction over the bill. The Senate usually considers the question of overriding a veto under the terms of a unanimous consent agreement."], "reports": {"section_title": "", "paragraphs": ["A ccording to Article 1, Section 7, of the Constitution, when the President chooses not to sign a bill and instead returns it to the chamber that originated it, the chamber shall enter the message of the President detailing the reasons for the veto in its Journal and then \"proceed to reconsider\" the bill. A vetoed bill can become law if two-thirds of the Members voting in each chamber agree, by recorded vote, a quorum being present, to repass the bill and thereby override the veto of the President.", "The chamber that originated the bill sent to the President acts first on the question of its reconsideration. In other words, the House acts first on vetoed bills that carry an \"H.R.\" or \"H.J. Res.\" designation, and the Senate acts first on vetoed bills that carry an \"S.\" or \"S.J. Res.\" designation. If the chamber of origin votes to repass the bill, then the bill with the veto message is transmitted to the second chamber, which then also reconsiders it.", "Nothing in the Constitution requires that either chamber vote directly on the question of repassing a vetoed bill. The chambers have, for example, referred a vetoed bill to committee instead. If either chamber fails to vote on the question of repassing the bill, then the measure dies at the end of the Congress. Both chambers will not necessarily even have a chance to take up the question. If two-thirds of the Members of the chamber of origin do not agree to override a veto, then the measure dies, and the other chamber does not have an opportunity to vote on the question of repassing the bill.", "The Constitution does not otherwise address how Congress should consider a vetoed bill, and it is therefore House and Senate rules and practices that additionally govern the treatment of bills vetoed and returned by the President."], "subsections": [{"section_title": "House Procedure", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The consideration of a vetoed bill is a matter of high privilege in the House, and the chamber generally votes to override or sustain the veto shortly after the message is received from the President or the Senate. Time for debate on the question is usually controlled and allocated by members of the committee of jurisdiction, and a majority of the House can vote to bring consideration to a close. To repass the bill over the veto of the President requires the support of two-thirds of the Members voting, a quorum being present."], "subsections": []}, {"section_title": "Beginning Reconsideration of a Vetoed Bill in the House", "paragraphs": ["On the day a vetoed bill and accompanying presidential message are received, the Speaker lays the message before the House. The veto message is read and entered in the House Journal . It is not necessary for a Member to make a motion to reconsider the vetoed bill. If no Member seeks recognition after the message is read, the Speaker will put the question of overriding the veto before the House by stating:", "The pending question is whether the House will, on reconsideration, pass the bill, the objections of the President to the contrary notwithstanding.", "If Members do not wish to debate the question immediately, several preferential motions can be made before the Speaker states it. The House can agree by motion (or unanimous consent) to postpone the consideration of a veto message to a named day or to refer it to committee. The motion to postpone consideration of a veto message and the motion to refer a veto message are debatable under the hour rule. The House may also agree to a nondebatable motion to lay the vetoed bill on the table. While the motion to table usually permanently and adversely disposes of a matter, that is not true in the case of a vetoed bill. A motion to remove the bill from the table could be made at any time."], "subsections": []}, {"section_title": "House Debate on Veto Override", "paragraphs": ["Debate on the question of overriding a veto takes place under the hour rule. In practice, the Speaker recognizes the chair of the committee with jurisdiction over the vetoed bill for an hour of debate, and the chair in turn yields 30 minutes to the ranking minority member for purposes of the debate only. The chair and ranking member of the committee serve as floor managers of the debate, yielding portions of time to other Members who wish to speak. Typically, after the hour is consumed or yielded back, the majority floor manager moves the previous question. If a majority of the House votes to order the previous question, the vote immediately occurs on the question of overriding the veto."], "subsections": []}, {"section_title": "Voting in the House", "paragraphs": ["To override a veto, two-thirds of the Members voting, a quorum being present, must agree to repass the bill over the President's objections. The Constitution requires that the vote be by the \"yeas and nays,\" which in the modern House means that Members' votes will be recorded through the electronic voting system. The vote on the veto override is final because, in contrast to votes on most other questions in the House, a motion to reconsider the vote on the question of overriding a veto is not in order.", "If the override vote on a House or Senate bill is unsuccessful, then the House informs the Senate of this fact and typically refers the bill and veto message to committee. If the House votes to override a veto of a bill that originated in the House (H.R. or H.J. Res.), the bill and veto message are sent to the Senate for action. If the House successfully overrides a veto of a bill that originated in the Senate (S. or S.J. Res.), then the bill becomes law, because two-thirds of both chambers have agreed to override the veto."], "subsections": []}]}, {"section_title": "Senate Procedure", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["If the Senate wishes to reconsider a vetoed bill, Senators generally enter into a unanimous consent agreement that the message be considered as read, printed in the Congressional Record , and, as required by the Constitution, entered in the Senate Journal . Senators often also agree, by unanimous consent, to limit time for debate on the question of overriding the veto. When the Senate receives a vetoed measure from the President or the House, it is quite common for it to be \"held at the desk\" for several days and considered only after unanimous consent has been reached on the terms of its consideration. When the vote on the question occurs, it must be taken by roll-call vote and receive support from two-thirds of the Senators voting, a quorum being present."], "subsections": []}, {"section_title": "Beginning Reconsideration of a Vetoed Bill in the Senate Without a Unanimous Consent Agreement", "paragraphs": ["Although generally the Senate reconsiders a vetoed bill under the terms of a unanimous consent agreement, it is not necessary to secure the support of all 100 Senators to consider a vetoed bill in the Senate. Absent an arrangement to hold the veto message at the desk, it would be read and then entered into the Journal after its receipt from the President or the House. The presiding officer would then state:", "Shall the bill pass, the objections of the President of the United States to the contrary notwithstanding?", "Several debatable motions are in order, however, that could displace consideration of the veto message. The message could be referred to committee, for example, or postponed to a specific time. Alternatively, the majority leader might make a motion to proceed to another matter. The question of overriding the veto could be brought back before the Senate with the consent of all Senators or by a numerical majority through a nondebatable motion to proceed.", "Finally, once the veto message has been laid before the Senate, it could also be tabled or indefinitely postponed, which would normally preclude any further action on the matter."], "subsections": []}, {"section_title": "Senate Debate on Veto Override", "paragraphs": ["The question of overriding a veto is debatable under the regular rules of the Senate. The question could be debated as long as any Senator sought recognition to discuss it.", "Debate on the question of overriding a veto can be limited by unanimous consent or by invoking cloture. Ending debate through a cloture motion requires the support of three-fifths of Senators duly chosen and sworn, or 60 Senators if there is no more than one vacancy. Cloture is rarely used to end debate on overriding a presidential veto. The number of Senators required to end debate is less than the number required to override a veto (assuming that there are no vacancies and more than 90 Senators vote on the override question)."], "subsections": []}, {"section_title": "Voting in the Senate", "paragraphs": ["Two-thirds of the Senators voting, a quorum being present, must agree to override the veto and repass the bill. The vote must be a roll-call vote and not a voice vote, due to the constitutional requirement that the vote be by the \"yeas and nays.\" A motion to reconsider the vote on the question of overriding a veto is in order only if the Senate fails to override the veto. In other words, if two-thirds of the Senators agree to override the veto, a motion to reconsider that vote is not in order.", "If the Senate fails to override a veto of a Senate-originated bill (S. or S.J. Res.), then the question of override never reaches the House. The Senate simply informs the House that the override vote on a House or Senate bill was unsuccessful. If the override vote on a Senate-originated measure (S. or S.J. Res.) is successful in the Senate, the bill and veto message are sent to the House for action. If the override vote on a House-originated measure (H.R. or H.J. Res.) is successful, then the bill becomes law, because two-thirds of both chambers have agreed to override the veto."], "subsections": []}]}]}}
{"id": "R45730", "title": "Farm Commodity Provisions in the 2018 Farm Bill (P.L. 115-334)", "released_date": "2019-05-21T00:00:00", "summary": ["The farm commodity program provisions in Title I of the Agricultural Improvement Act of 2018 (P.L. 115-334; the 2018 farm bill) include revenue support programs for major program crops and permanent agricultural disaster assistance programs for producers of most tree crops and livestock. Aside from dairy and sugar, which have their own specific programs, most grain and oilseed crops produced in the United States are eligible for two tiers of revenue support under Title I of the 2018 farm bill\u2014specialty crops such as fruits, vegetables, and tree nuts are not covered. The first tier of support is provided by the Marketing Assistance Loan (MAL) program, which offers interim financing for production of \"loan\" commodities in the form of a nine-month nonrecourse loan at statutorily set prices. A producer must have a harvested crop to offer as collateral for the MAL loan. Nonrecourse means that, if forfeited, USDA must accept the crop pledged as collateral as full payment of an outstanding loan. Thus, the statutory loan rates serve as minimum price guarantees for eligible commodities.", "The MAL program may be supplemented by a higher, second tier of revenue support comprised of (1) the Price Loss Coverage (PLC) program, which provides price protection at the national level via statutory fixed \"reference\" prices for eligible crops, or (2) the Agricultural Risk Coverage (ARC) program, which provides revenue protection via historical moving average revenue guarantees based on the five most recent years of national crop prices and county or farm average yields. Participation is free for both ARC and PLC. However, a producer must own or rent historical \"base\" acres of \"covered\" commodities. In addition, producers must sign up and elect either PLC or a county-coverage ARC program (ARC-CO) on a crop-by-crop basis or enroll all covered commodities together in a whole-farm revenue guarantee under an individual-coverage ARC program (ARC-IC).", "The dairy and sugar sectors are supported by separate federal farm programs that are tailored more specifically to the physical differences associated with each of their products\u2014liquid fresh milk and refined sugar\u2014and their respective markets. For dairy, the Dairy Margin Coverage (DMC) program offers producers milk margin protection for a range of margin thresholds\u2014the milk margin equals the difference between the all-milk farm price and the price of a formula-based feed ration\u2014and for a producer-selected portion (ranging from 5% to 95%) of historical milk production. Milk producers must sign up, select both margin and milk production coverage levels, and pay a premium that varies with coverage levels. The U.S. dairy sector also benefits from tariff-rate quotas (TRQs) on selected dairy products. The sugar program provides revenue support through a combination of limits on domestic output sales (marketing allotments), nonrecourse MAL loans for domestic sugar production (but at the processor level), a sugar-to-ethanol backstop program (Feedstock Flexibility Program), and quotas that limit imports. The import quotas for dairy and sugar are authorized outside of the omnibus farm bill.", "Disaster assistance is available for producers of most tree crops and livestock. The Noninsured Crop Assistance Program (NAP) is available for all agricultural production that is not covered by a federal crop insurance policy. All of these programs have permanent authority. However, the 2018 farm bill amends most of them.", "The enacted 2018 farm bill continues a $125,000 per-person cap on combined PLC and ARC payments but excludes MAL program benefits from the limit. The limit applies to the total from all covered commodities except peanuts, which has a separate $125,000 limit. To be eligible for payments, persons must be actively engaged in farming (AEF). Payment limits are doubled if the farm operator has a spouse. On family farming operations, all family members 18 years or older are deemed AEF and eligible for payments, including cousins, nephews, and nieces. The 2018 farm bill retains the adjusted gross income (AGI) limit for payment eligibility of $900,000.", "The Congressional Budget Office (CBO) projects outlays for Title I provisions of the 2018 farm bill for the five-year period (FY2019-FY2023) to average $6.3 billion compared with an estimated $7.2 billion in annual outlays under the 2014 farm bill. Based on projected market-price-to-PLC-reference price ratios, producers are expected to shift their preference toward PLC over ARC under the 2018 farm bill, resulting in a shift in program outlays concentrated more on PLC than ARC.", "The farm commodity program provisions in Title I of the Agricultural Improvement Act of 2018 (P.L. 115-334; the 2018 farm bill) include revenue support programs for major program crops and permanent agricultural disaster assistance programs for producers of most tree crops and livestock. Aside from dairy and sugar, which have their own specific programs, most grain and oilseed crops produced in the United States are eligible for two tiers of revenue support under Title I of the 2018 farm bill\u2014specialty crops such as fruits, vegetables, and tree nuts are not covered. The first tier of support is provided by the Marketing Assistance Loan (MAL) program, which offers interim financing for production of \"loan\" commodities in the form of a nine-month nonrecourse loan at statutorily set prices. A producer must have a harvested crop to offer as collateral for the MAL loan. Nonrecourse means that, if forfeited, USDA must accept the crop pledged as collateral as full payment of an outstanding loan. Thus, the statutory loan rates serve as minimum price guarantees for eligible commodities.", "The MAL program may be supplemented by a higher, second tier of revenue support comprised of (1) the Price Loss Coverage (PLC) program, which provides price protection at the national level via statutory fixed \"reference\" prices for eligible crops, or (2) the Agricultural Risk Coverage (ARC) program, which provides revenue protection via historical moving average revenue guarantees based on the five most recent years of national crop prices and county or farm average yields. Participation is free for both ARC and PLC. However, a producer must own or rent historical \"base\" acres of \"covered\" commodities. In addition, producers must sign up and elect either PLC or a county-coverage ARC program (ARC-CO) on a crop-by-crop basis or enroll all covered commodities together in a whole-farm revenue guarantee under an individual-coverage ARC program (ARC-IC).", "The dairy and sugar sectors are supported by separate federal farm programs that are tailored more specifically to the physical differences associated with each of their products\u2014liquid fresh milk and refined sugar\u2014and their respective markets. For dairy, the Dairy Margin Coverage (DMC) program offers producers milk margin protection for a range of margin thresholds\u2014the milk margin equals the difference between the all-milk farm price and the price of a formula-based feed ration\u2014and for a producer-selected portion (ranging from 5% to 95%) of historical milk production. Milk producers must sign up, select both margin and milk production coverage levels, and pay a premium that varies with coverage levels. The U.S. dairy sector also benefits from tariff-rate quotas (TRQs) on selected dairy products. The sugar program provides revenue support through a combination of limits on domestic output sales (marketing allotments), nonrecourse MAL loans for domestic sugar production (but at the processor level), a sugar-to-ethanol backstop program (Feedstock Flexibility Program), and quotas that limit imports. The import quotas for dairy and sugar are authorized outside of the omnibus farm bill.", "Disaster assistance is available for producers of most tree crops and livestock. The Noninsured Crop Assistance Program (NAP) is available for all agricultural production that is not covered by a federal crop insurance policy. All of these programs have permanent authority. However, the 2018 farm bill amends most of them.", "The enacted 2018 farm bill continues a $125,000 per-person cap on combined PLC and ARC payments but excludes MAL program benefits from the limit. The limit applies to the total from all covered commodities except peanuts, which has a separate $125,000 limit. To be eligible for payments, persons must be actively engaged in farming (AEF). Payment limits are doubled if the farm operator has a spouse. On family farming operations, all family members 18 years or older are deemed AEF and eligible for payments, including cousins, nephews, and nieces. The 2018 farm bill retains the adjusted gross income (AGI) limit for payment eligibility of $900,000.", "The Congressional Budget Office (CBO) projects outlays for Title I provisions of the 2018 farm bill for the five-year period (FY2019-FY2023) to average $6.3 billion compared with an estimated $7.2 billion in annual outlays under the 2014 farm bill. Based on projected market-price-to-PLC-reference price ratios, producers are expected to shift their preference toward PLC over ARC under the 2018 farm bill, resulting in a shift in program outlays concentrated more on PLC than ARC."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["On December 20, 2018, President Trump signed into law a new five-year omnibus farm bill, the Agricultural Improvement Act of 2018 ( P.L. 115-334 ; the 2018 farm bill). The U.S. Department of Agriculture (USDA) will implement the provisions, most of which take effect in calendar year 2019. The 2018 farm bill includes 12 titles covering different program areas. The first title, Title I\u2014Commodities, authorizes several major revenue support and disaster assistance programs (see shaded box below). ", "This report briefly describes the major revenue support programs in Title I of the 2018 farm bill. In addition, it reviews changes to key administrative provisions such as program eligibility and signup, payment acres and yields, payment limits, and cost projections. Appendixes at the end of this report ( Table A-1 to Table A-5 ) provide side-by-side comparisons of the provisions for five of the subtitles of Title I with prior law (as indicated in the shadow box above\u2014Subtitle C, sugar, and Subtitle D, dairy, are discussed elsewhere). "], "subsections": []}, {"section_title": "Background on Title I Support Programs", "paragraphs": ["Aside from dairy and sugar, which have their own specific programs, most grain and oilseed crops produced in the United States are eligible for two tiers of revenue support under Title I of the 2018 farm bill. Specialty crops such as fruits, vegetables, and tree nuts are not covered. The first tier of support is provided by the Marketing Assistance Loan (MAL) program, which offers a minimum price guarantee for production of \"loan\" commodities in the form of a short-term loan at statutorily set prices ( Table 1 ). The MAL program may be supplemented by a higher, second tier of revenue support comprised of two other programs: (1) the Price Loss Coverage (PLC) program, which provides price protection via statutory fixed \"reference\" prices for eligible crops, or (2) the Agricultural Risk Coverage (ARC) program, which provides revenue protection via historical moving average revenue guarantees based on the five most recent years of crop prices and yields. PLC and ARC are available for producers that own or rent historical \"base\" acres of \"covered\" commodities. ", "The sugar and dairy sectors are supported by separate federal farm programs that are tailored more specifically to the physical differences associated with each of their products\u2014refined sugar and liquid fresh milk\u2014and their respective markets. Disaster assistance is available for producers of most tree crops and livestock. The Noninsured Crop Assistance Program is available for all agricultural commodities that are not covered by a federal crop insurance policy.", "All of these Title I programs existed under the previous 2014 farm bill. The 2018 farm bill extends their authority through crop year 2023 but with some modifications to most of them.", "Occasionally, agricultural producers may receive federal support under programs authorized outside of the farm bill. The Secretary of Agriculture has broad latitude under the authority of the Commodity Credit Corporation (CCC) Charter Act to make direct payments in support of U.S. agriculture. Two such programs implemented in recent years under CCC authority are the Cotton Ginning Cost Share program and the Market Facilitation Program. ", "Separately, under the federal crop insurance program, Title I program commodities\u2014along with more than 100 other crops including fruits and vegetables\u2014are also eligible for subsidized crop insurance, which provides within-year yield (or revenue) protection. The federal crop insurance program is permanently authorized outside of the omnibus farm bill by the Federal Crop Insurance Act (7 U.S.C. \u00a71501 et seq. ). The 2018 farm bill includes Title XI\u2014Crop Insurance, which makes minor adjustments to program implementation but does not alter the underlying authority of the federal crop insurance program. Neither the federal crop insurance program nor programs authorized under the CCC Charter Act are discussed in this report."], "subsections": [{"section_title": "Policy Rationale for Farm Commodity Subsidies", "paragraphs": ["Federal farm support began in the 1930s through Depression-era efforts to raise farm household income when commodity prices were low because of prolonged weak consumer demand. While initially intended to be a temporary effort, the commodity support programs have continued. However, several of them have been modified away from supply control and management of commodity stocks (which was designed to prop up prices) that directly linked support payments to farm production activities into decoupled revenue support that makes payments on historical program acres\u2014referred to as base acres. ", "Proponents of farm revenue support programs argue that federal involvement in the sector is needed to stabilize and support farm incomes by shifting some of the production risks to the federal government. These risks include short-term market price instability often due to weather or international events\u2014both of which are outside the farmer's control. Proponents see the goal of farm policy as maintaining the economic health of the nation's farm sector so that it can use its comparative advantage in supplying domestic demand and competing in the global market for food and fiber. Critics argue that farm revenue support programs waste taxpayer dollars, distort producer behavior in favor of certain crops, capitalize benefits to the owners of the resources, encourage concentration of production, and comparatively harm smaller domestic producers and farmers in lower-income foreign nations."], "subsections": []}, {"section_title": "Authorizing Legislation", "paragraphs": ["The authority for USDA to operate farm revenue support programs comes from three permanent laws, as amended: the Agricultural Adjustment Act of 1938 (P.L. 75-430), the Agricultural Act of 1949 (P.L. 81-439), and the CCC Charter Act of 1948 (P.L. 80-806). Congress typically alters these laws through multi-year omnibus farm bills to address current market conditions, budget constraints, or other concerns.", "If a new farm bill is not enacted when an old one expires, farm programs would revert to the permanent laws mentioned above for most of the major program crops. Under permanent law, eligible commodities would be supported under a parity-price formula at levels much higher than they are now, and many of the currently supported commodities might not be eligible. Since reverting to permanent law is incompatible with current national economic objectives, global trading rules, and federal budgetary policies, pressure builds at the end of each farm bill for policymakers to enact another.", "The 2018 farm bill ( P.L. 115-334 ) contains the most recent version of the farm commodity support programs. It supersedes the commodity provisions of previous farm bills and includes a provision (Section 1702) that suspends the relevant price support provisions of permanent law for the crop (and marketing) years 2019-2023."], "subsections": []}, {"section_title": "Eligible Commodities", "paragraphs": ["Federal support exists for about two dozen farm commodities representing about one-third of gross farm sales. During the five marketing years of 2014 through 2018, six crops (corn, wheat, soybeans, peanuts, cotton, and rice) accounted for an estimated 92% of farm commodity program payments. "], "subsections": [{"section_title": "Covered Commodities", "paragraphs": ["The 2018 farm bill continues to define covered commodities as the crops eligible for the farm revenue support programs PLC and ARC: wheat, oats, barley (including wheat, oats, and barley used for haying and grazing), corn, grain sorghum, long-grain rice, medium-grain rice, seed cotton (unginned upland cotton that contains both lint and seed), pulse crops (dry peas, lentils, small chickpeas, and large chickpeas), soybeans, other oilseeds (including sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, crambe, and sesame seed), and peanuts (7 U.S.C. \u00a79011). Each of these commodities has a statutorily defined PLC reference price (listed in Table 1 ).", "Upland cotton was removed from eligibility as a covered commodity by the 2014 farm bill ( P.L. 113-79 ). However, it indirectly regained its status as a covered commodity, via seed cotton, under the Bipartisan Budget Act of 2018 ( P.L. 115-113 )."], "subsections": []}, {"section_title": "Loan Commodities", "paragraphs": ["\"Loan commodities\" include all of the \"covered commodities\" plus upland cotton, extra-long-staple cotton, wool, mohair, and honey. These commodities have statutory loan rates ( Table 1 ) and are eligible for the MAL program. "], "subsections": []}, {"section_title": "Fresh Milk", "paragraphs": ["Support for milk production is available in the form of subsidized protection for producer milk margins (milk prices minus feed costs) under the Dairy Margin Coverage program. "], "subsections": []}, {"section_title": "Sugar Cane and Sugar Beets", "paragraphs": ["Sugar support is indirect through import quotas, processor price guarantees, and domestic marketing allotments. No direct payments are made to sugar growers or processors. "], "subsections": []}, {"section_title": "Agricultural Products Without a Title I Revenue Support Program", "paragraphs": ["Livestock, poultry, fruits, vegetables, nuts, hay, and nursery products (about two-thirds of U.S. farm sales) are not eligible to participate in a Title I revenue support program under the 2018 farm bill. However, livestock and fruit tree producers may qualify for partial relief from losses related to natural disasters under one of the four permanently authorized agricultural disaster assistance programs under Title I of the 2018 farm bill.", "Also, subsidized federal crop insurance is available for more than 100 crops, including fruits, vegetables, and selected livestock activities that are not supported by Title I farm programs. Crop insurance is designed primarily to cover losses from natural disasters or disease and within-season price or revenue declines. Another Title I farm bill program\u2014the Noninsured Crop Disaster Assistance Program\u2014is available for crops not currently covered by crop insurance."], "subsections": []}]}, {"section_title": "Definition of Farm", "paragraphs": ["The definition of farm used to administer the revenue support programs is different from common perception or statistical definitions of farm based on size or output. Under USDA's Farm Service Agency (FSA) regulations, a \"farm\" for program payment purposes is one or more tracts of land considered to be a separate operation. A producer must register each farm operation with USDA and identify the resources (land, labor, equipment, capital, and management) associated with it. Land in a farm does not need to be contiguous. However, all tracts within a farm must have the same operator and the same owner (unless all owners agree to combine multiple tracts into a single FSA farm). Thus, one producer may be operating several \"farms\" if he or she is renting land from several landlords or has purchased land in several tracts. "], "subsections": []}, {"section_title": "Base Acres", "paragraphs": ["B ase acres describes the historical planted acreage on each FSA farm using a multi-year average from as far back as the 1980s, for purposes of calculating program payments under one of the two revenue support programs\u2014PLC or ARC. As of crop year 2015, USDA reported 273 million base acres, of which 254 million acres were enrolled in either ARC or PLC ( Figure 1 ). ", "Base acres are calculated for each covered commodity and remain with the land when real estate is sold, thus making the new landowner eligible for farm programs. A farm's base acres may increase from year to year if base acres expire from a conservation contract or easement or a producer has eligible oilseed acreage as a result of the Secretary of Agriculture designating a new oilseed eligible as a covered commodity. Similarly, base acres may decline from year to year if some base acres are enrolled in a conservation easement; are converted to certain nonfarm or residential uses and are unlikely to return to agriculture; or are planted to fruits, vegetables, or wild rice in excess of certain planting flexibility rules. ", "Under the PLC and ARC program payment-acre provisions (7 U.S.C. 9014; Table A-1 ), planting flexibility rules allow crops other than the program crop to be grown, but eligible payment acreage is reduced when fruits, vegetables (other than mung beans and pulse crops), or wild rice are planted in excess of 15% of base acres (or 35% depending upon a farmer's program choice discussed below). The reduction to payment acres is one-for-one for every acre in excess of these percentages for that year.", "A farm with base acres is not obligated to participate in farm programs. For those farms that do participate, once a farm's base acres are enrolled in either ARC or PLC, the farm does not have to plant a particular program crop to be eligible for a program payment. This is because ARC and PLC payments are decoupled from actual crop plantings. However, all participating producers must maintain conservation compliance, which requires planting a cover crop on highly erodible land.", "Under both the 2014 farm bill ( P.L. 113-79 ) and the Bipartisan Budget Act of 2018 ( P.L. 115-113 ), the calculation of base acres underwent several changes. These are briefly discussed next."], "subsections": [{"section_title": "2014 Farm Bill: Updating Base Acres, Creation of Generic Base", "paragraphs": ["Because a farmer's actual plantings may differ from farm base acres, program payments may not necessarily align with financial losses associated with market prices or crop revenue. To better match program payments with farm risk, the 2014 farm bill provided farmers with a one-time opportunity to update individual crop base acres by reallocating acreage within their current base portfolio to match their actual crop mix (plantings) during the crop years 2009-2012. Farmers could also choose to not reallocate their base acres if they expected payments to be maximized under their then-current base acres. Even after the opportunity to update base acres to better match actual farm plantings, disparities remained between base and planted acres ( Figure 2 ).", "The 2014 farm bill also removed upland cotton from eligibility for the ARC and PLC programs due to a ruling from a World Trade Organization dispute settlement case successfully brought by Brazil against U.S. cotton support programs. Former cotton base acres were renamed \"generic base\" and added to a producer's base for potential payments if a covered commodity (now excluding upland cotton) was planted on the farm. However, upland cotton remained eligible for the MAL program. "], "subsections": []}, {"section_title": "Bipartisan Budget Agreement of 2018: Seed Cotton as a Covered Commodity", "paragraphs": ["In 2018, seed cotton was added as a covered commodity, but not as a MAL loan commodity, by the Bipartisan Budget Agreement (BBA) of 2018 ( P.L. 115-123 ). Under the BBA, producers were given a choice of how to allocate their generic base acres\u2014either as base acres assigned to seed cotton or to another covered commodity and thus eligible for either ARC or PLC payments or into an unassigned pool where they would be ineligible for ARC or PLC program payments. "], "subsections": []}, {"section_title": "2018 Farm Bill: Base Acres Retained from Prior Law with Potential Reduction", "paragraphs": ["The 2018 farm bill retained base acres as defined on September 30, 2018, under the 2014 farm bill and inclusive of the BBA changes. Thus, upland cotton remains ineligible for PLC or ARC but is so indirectly via seed cotton. The 2018 farm bill also added a provision (Section 1102(b)) regarding base-acre eligibility for ARC or PLC program payments. If base acres were planted continuously to grass or pasture (including fallow acres) during the nine-year period extending from January 1, 2009, through December 31, 2017, then those affected base acres are not eligible for ARC or PLC payments during the life of the 2018 farm bill\u2014that is, during crop years 2019-2023. However, these acres would remain eligible to be counted as base acres for a future farm bill."], "subsections": []}]}, {"section_title": "Eligible Producers", "paragraphs": ["The 2018 farm bill defines producer (for purposes of revenue support program benefits) as an owner-operator, landlord, tenant, or sharecropper who shares in the risk of producing a crop and is entitled to a share of the crop produced on the farm. Participation in revenue support programs is free. However, an individual must comply with certain requirements to be eligible for most program payments. These requirements include:", "Actively engaged in farming (AEF) . Each individual must provide a significant contribution of capital (land or equipment) and personal labor or active personal management to the farm operation, share in the risk of loss from the farm operation, and receive a share of the output as compensation. Legal entities can be actively engaged if members collectively contribute personal labor or active personal management. Special classes allow landowners to be considered actively engaged if they receive income based on the farm's operating results without providing labor or management (as described below). Conservation co mpliance . A producer agrees to maintain a minimum level of conservation on highly erodible land and not to convert or make production possible on wetlands. Adjusted gross income (AGI) thr eshold . Persons with combined farm and nonfarm AGI in excess of $900,000 are ineligible for most program benefits. Average AGI is measured from the three tax years prior to the most recent taxable year. The AGI limit may be waived on a case-by-case basis to protect environmentally sensitive land of special significance. Minimum farm size . A producer on a farm may not receive farm program payments if the sum of the base acres on the farm is 10 acres or less. Two producer groups are excluded from this prohibition: beginning farmers and ranchers and veteran farmers and ranchers."], "subsections": [{"section_title": "Eligibility and Tenancy", "paragraphs": ["A farm operation usually involves some combination of owned and rented land. The amount of total land in farms rented by farm operators has ranged between 34% and 43% of farmland during 1964-2012. In 2014, an estimated 39% of farmland was rented\u201480% of rented farmland is owned by non-operator landlords. Two types of rental arrangements are common: cash rent and share rent. "], "subsections": [{"section_title": "Cash Renting Base Acres", "paragraphs": ["Under cash rental contracts, the tenant pays a fixed cash rent to the landlord. The landlord receives the same rent irrespective of market conditions, bears no risk in production, and thus fails to meet the AEF criteria and is not eligible to receive program payments. The tenant bears all of the risk, takes all of the harvest, and receives all of the program payment.", "Even though tenants might receive all of the government payments under cash rent arrangements, they might not keep all of the benefits if landlords demand higher rent. Economists widely agree that a large portion of government farm payments passes through to landlords, since government payments boost the rental value of land. "], "subsections": []}, {"section_title": "Share Cropping Base Acres", "paragraphs": ["Under share rental contracts, the tenant usually supplies most or all of the labor and machinery, while the landlord supplies land and perhaps some machinery or management. Both the landlord and the tenant bear risk in producing a crop and receive a portion of the harvest. In most cases, both meet the AEF criteria and are eligible to share in the government subsidy."], "subsections": []}]}]}]}, {"section_title": "Farm Commodity Revenue Support Programs", "paragraphs": ["The farm revenue support program provisions from Title I of the 2014 farm bill are largely preserved under the 2018 farm bill but with some modifications, as identified below. "], "subsections": [{"section_title": "The Marketing Assistance Loan (MAL) Program", "paragraphs": ["The MAL program has been in existence, in one form or another, since the 1930s. Its longevity as a farm program derives from its utility at providing both short-term financing and a guaranteed floor price. This is done by offering producers a nonrecourse nine-month loan\u2014valued at a commodity-specific, statutorily-fixed loan rate\u2014for all harvested production of qualifying crops. These qualifying crops are referred to as loan commodities ( Table 1 ). Because MAL benefits are directly linked to the harvested output, benefits are said to be \"coupled.\" "], "subsections": [{"section_title": "No Signup, but Participation Requires a Harvested Crop", "paragraphs": ["No pre-planting signup is necessary to participate in the MAL program, and a producer does not need to own or rent base acres to be eligible. However, a producer must have a harvested crop to use as collateral for the loan. Thus, if a producer suffers a crop failure due to a natural disaster and has no marketable crop, the MAL program is not available as a program option."], "subsections": []}, {"section_title": "How the MAL Program Works", "paragraphs": ["At harvest time, crop prices are usually at their lowest point for the year because of the large supply of harvested crops entering the marketplace at the same time. To avoid selling into a weak market, the MAL program offers producers the option to put a harvested loan commodity under a nine-month nonrecourse loan valued at a statutorily fixed, per-unit commodity loan rate ( Table 1 ) using the crop as collateral. Thus, MAL benefits are coupled to the harvested crop. Nonrecourse means that USDA must accept the pledged crop (i.e., the collateral) as full payment of an outstanding loan if the collateral is forfeited. ", "During the nine-month loan period, producers will consider whether market prices are above or below the MAL loan rate. If they are above the loan rate, producers will pay off their loans and reclaim their collateral crops to sell into the higher priced marketplace. However, if market prices are below the loan rate, then producers may consider forfeiting their crop to USDA and keeping the loan value as payment. Thus, the statutory loan rate, in effect, establishes a price guarantee. Under the 2018 farm bill a producer has additional choices besides forfeiture in claiming MAL benefits when market prices are low (see \" Policy Evolution of the MAL Program \" section below)."], "subsections": []}, {"section_title": "Policy Evolution of the MAL Program", "paragraphs": ["In the 1960s, 1970s, and 1980s, during extended periods when commodity prices were below the MAL loan rates, many producers chose to forfeit their crops to USDA rather than repay their MAL loans at the higher loan rate. These forfeitures led to large accumulations of grain and oilseed stocks by USDA. These government-held stocks were costly to taxpayers and contributed to market conditions of oversupply. ", "In the 1980s and 1990s, Congress redesigned the MAL program to avoid government stock accumulation by offering alternative repayment prices to the statutory loan rates (see box below). Under current law, prior to loan maturity, producers may compare the repayment prices announced by USDA for their localities with the statutory MAL loan rates for each eligible commodity before selecting from among several potential MAL program benefits."], "subsections": []}, {"section_title": "A Producer Has Four Potential Repayment Choices Under an MAL Loan", "paragraphs": ["Under current law (as continued by the 2018 farm bill), a producer with a commodity under an MAL loan has several repayment options. If the USDA-announced repayment rate is at or above the loan rate, the farmer repays the loan principal and interest and reclaims the commodity. In contrast, when the announced repayment rate is below the loan rate, the farmer may choose from among four potential options: ", "Loan deficiency payment ( LDP ). Rather than putting the harvested crop under an MAL, a farmer may request an LDP with the per-unit payment rate equal to the difference between the loan rate and loan repayment rate. The farmer receives the LDP payment and keeps the crop to sell or use on farm.", "Marketing loan gain (MLG) . A participating farmer with a crop under an MAL loan can repay the loan at the USDA-announced repayment price and pocket the difference (between the loan rate and the repayment rate) as an MLG. The farmer keeps the MLG and the crop to sell or use on farm.", "Commodity certificate exchange . A farmer may use commodity certificates\u2014paper certificates with a dollar denomination that may be exchanged for commodities in USDA inventory\u2014to repay an MAL loan at the lower USDA-announced price and keep the associated price gain. The farmer keeps the gain and the crop to sell or use on farm.", "Forfeiture . A producer can forfeit the pledged crop to USDA at the end of the loan period. The producer may keep any price gains associated with forfeiture but relinquishes access to the crop."], "subsections": []}, {"section_title": "Higher MAL Loan Rates for Some Commodities Under the 2018 Farm Bill", "paragraphs": ["The level of revenue support provided by the MAL program varies with market conditions and the relationship between MAL loan rates and market prices. The 2018 farm bill raised MAL loan rates for several loan commodities, including barley, corn, grain sorghum, oats, extra-long-staple cotton, sugar, rice, soybeans, dry peas, lentils, and small and large chickpeas. The MAL program's usefulness as a risk management and marketing tool varies widely across program crops depending on the relationship between farm prices and the statutory loan rates. ", "Under the 2018 farm bill (Section 1703): ", "MAL benefits are no longer subject to annual payment limits (this includes MLG and LDP benefits, as well as any gains under commodity certificates and forfeiture). ", "Under the previous 2014 farm bill: ", "MLG and LDP benefits combined with payments under PLC and ARC were subject to a payment limit of $125,000 per person for all covered commodities (except peanuts, which has a separate limit of $125,000). However, MAL gains under commodity certificates and forfeiture were excluded from payment limits."], "subsections": []}]}, {"section_title": "PLC and ARC Programs", "paragraphs": ["A second tier of revenue support is available under the PLC and ARC programs. PLC and ARC provide income support to covered commodities at levels above the price protection offered by the MAL program's loan rates. ", "ARC and PLC were first authorized under the 2014 farm bill ( P.L. 113-79 ). The 2018 farm bill extends both programs but with several modifications intended to increase producer flexibility in their use. Participation is free. However, a producer must own or rent base acres to participate. In addition, a producer must elect ARC or PLC for the farm's historical base acres and enroll his or her farm operation in the elected program. Unlike MAL payments, which are coupled to harvested crops, PLC and ARC payments are decoupled and made proportional to base acres."], "subsections": [{"section_title": "Producer Election", "paragraphs": ["Producers choose between PLC and ARC depending on their preference for protection against a decline in (a) crop prices or (b) crop revenue, respectively. Payments under the PLC program are triggered when the national market-year average farm price (MYAP) for a covered commodity is below its \"effective reference price\" ( Figure 3 ). In contrast, ARC payments are triggered when crop revenue is below its guaranteed level based on a multi-year moving average of historical crop revenue ( Figure 5 ). Producers can elect ARC at either the county (ARC-CO) or individual farm (ARC-IC) level. PLC and ARC-CO choices can vary by \"covered\" commodities (for a list of covered commodities, see Table 1 ), whereas ARC-IC includes all \"covered\" commodities on a farm under a single whole-farm revenue guarantee.", "Under the 2014 farm bill, producers had a one-time choice between ARC and PLC, on a commodity-by-commodity basis that lasted for five crop years (2014-2018). In contrast, the 2018 farm bill allows producers to alter their program choices more frequently. In 2019, producers may select ARC or PLC coverage, on a commodity-by-commodity basis, effective for both crop years 2019 and 2020. If no initial choice is made, then the default is whichever program was in effect during crop years 2015 through 2018 under the 2014 farm bill. Then, beginning in 2021, producers may again choose (i.e., make a new election) between ARC and PLC annually by covered commodity for each of crop year 2021, 2022, and 2023. In addition, producers now may remotely and electronically sign annual or multi-year contracts for ARC and PLC. "], "subsections": []}, {"section_title": "Price Loss Coverage (PLC)", "paragraphs": ["PLC price protection is based on a statutorily fixed reference price ( Table 1 ) that may be temporarily increased under certain conditions. Under the 2014 farm bill version of the PLC program, producers received payments on a portion of their enrolled base acres when the national MYAP for the enrolled covered commodity was below its reference price set in statute. This option was attractive if farmers expected farm prices to drop below the reference price for a covered commodity.", "The 2018 farm bill added a provision (Section 1101) that replaced the statutory reference price with an \"effective reference price\" that may increase to as much as 115% of the statutory PLC reference price based on market conditions. The effective reference price is determined by a formula as the higher of the statutory reference price or 85% of the five-year Olympic average of the national MYAP for the five preceding years. "], "subsections": [{"section_title": "PLC Payment Formula", "paragraphs": ["Under the 2018 farm bill, the PLC program will make a payment when the MYAP for a covered commodity is less than the effective reference price. See Figure 3 for a graphical interpretation of the formula and Figure 4 for a hypothetical example for rice. The farm's total PLC payments for a covered commodity may be calculated as follows:", "The PLC per-unit payment rate equals the difference between the effective PLC reference price and the higher of the MYAP or the MAL loan rate. The PLC per-acre payment rate equals the PLC per-unit payment rate times the program yield (described below). The PLC total payment equals the PLC per-acre payment rate times 85% of base acres signed up for the respective covered commodity. "], "subsections": []}, {"section_title": "PLC Payment Yield", "paragraphs": ["PLC payment yields are similar to base acres in that they are historical farm-level, crop-specific measures that are used to determine program payments under the PLC program. Producers were given the option of updating their payment yields under the 2002, 2014, and 2018 farm bills. ", "Under the 2014 farm bill, producers were given an opportunity to update payment yields, on a covered-commodity-by-covered-commodity basis, using 90% of average yields for the 2008-2012 crop years\u2014excluding any year in which acreage planted to the covered commodity was zero. Producers could also use a \"plug\" yield in the update calculation, equal to 75% of the five-year average county yield for a covered commodity, if the farm-level yield for any of the 2008-2012 crop years was less than 75% of the average county yield during that period. The yield update election had to be made so as to be in effect beginning with the 2014 crop year.", "Under the 2018 farm bill, producers could again update program yields, on a covered-commodity-by-covered-commodity basis, using 90% of the average of the yield per planted acre for the 2013-2017 crop years. However, unlike the 2014 farm bill yield update which used the simple average for the data period, the 2018 farm bill yield update was subject to a commodity-specific adjustment factor to account for any national increase in trend yield. ", "Producers could again use a \"plug\" yield in the update calculation, equal to 75% of the average county yield for a covered commodity during the 2013-2017 crop years, if the farm-level yield for any year was less than 75% of the average county yield during that period. Any year in which planted acreage to the covered commodity was zero could be excluded from the calculation. The yield update election must be made so as to be in effect beginning with the 2020 crop year. "], "subsections": []}]}, {"section_title": "Agriculture Risk Coverage (ARC)", "paragraphs": ["Producers more concerned about declines in crop revenue (i.e., yield times price) than price can select the county ARC program (ARC-CO) as an alternative to PLC for each covered commodity. Under ARC-CO, payments are triggered when the annual county revenue for a covered commodity is less than 86% of its recent five-year average revenue. If farmers prefer farm-level revenue protection based on farm-level yields, then they could choose to combine all covered commodities into a single, whole-farm revenue guarantee under the farm-level \"individual\" ARC (ARC-IC) program."], "subsections": [{"section_title": "County ARC (ARC-CO)", "paragraphs": ["The ARC-CO program has a county revenue guarantee, and only a crop revenue loss at the county level triggers a payment. The ARC-CO crop revenue guarantee equals 86% of the county benchmark revenue ( Figure 5 ). The benchmark revenue is the product of the five-year Olympic average of county yields (measured as units of output per acre) and the five-year Olympic average of the higher of the national MYAP or the PLC effective reference price. An ARC-CO payment is made if the current-year county revenue (calculated as the product of county yield and national MYAP) is below the ARC-CO revenue guarantee. The ARC-CO payment rate, which equals the difference between the per-acre county revenue guarantee and the actual county per-acre crop revenue, is capped at 10% of benchmark revenue.", "With the revenue guarantee set at 86% of the benchmark revenue, the producer absorbs the first 14% of any shortfall, and the government absorbs the next 10% of revenue shortfall. Remaining losses may be backstopped by crop insurance if purchased at sufficient coverage levels by the producer and by the MAL program. ", "Similar to PLC, the ARC-CO payment formula for a particular covered commodity is the ARC-CO payment rate times 85% times the number of base acres enrolled in ARC-CO. See Figure 5 for a graphical interpretation of the formula and Figure 6 for a hypothetical example for corn. "], "subsections": []}, {"section_title": "County Yield Data Changes", "paragraphs": ["Under the 2014 farm bill, USDA's National Agricultural Statistics Service (NASS) was the primary source for the county yield estimates used in the ARC-CO formulas. However, when USDA announced its first ARC-CO payments under the then-new program in 2015, significant discrepancies in county-level payments were discovered. These discrepancies appeared to be due, in part, to how average county yield calculations were being made. If a county lacked sufficient NASS data, then USDA would use Risk Management Agency (RMA) yield data based on crop insurance program participation. A comparison of the two estimates suggested that RMA yields were frequently higher than NASS yields at the county level. As a result, payments to producers in counties where RMA yields were used could be substantially lower than payments in counties using NASS yields. Congress showed interest in minimizing such discrepancies. Since RMA yield data were more widely available at the county level than NASS yield data, there was considerable debate about switching yield data prioritization for ARC-CO calculations to the RMA data.", "Under the 2018 farm bill (Section 1107), yield data from RMA are made the primary source for county average yield calculations for the ARC-CO benchmark revenue. Where RMA data are not available, USDA is to determine the data source considering data from NASS or the yield history of representative farms in the state, region, or crop-reporting district. Also, ARC-CO is to use a trend-adjusted yield to calculate the benchmark revenue, as is done by RMA for the federal crop insurance program. Finally, the five-year Olympic average county yield calculations are to include a yield plug (equal to 80% of the 10-year average county yield) for each year where actual county yield is lower than the estimated plug.", "Other 2018 farm bill (Section 1107) modifications to ARC-CO include allowing yields used in ARC-CO revenue calculations to be calculated separately for irrigated and non-irrigated land in each county and basing ARC-CO payments on the physical location of the farm\u2014farms that cross multiple counties are prorated for each county. Finally, up to 25 counties nationwide may subdivide for ARC-CO yield calculations to reflect significant yield deviations within a county. Such subdivision is to be based on certain criteria: A county must be larger than 1,400 square miles and have more than 190,000 base acres."], "subsections": []}, {"section_title": "Individual ARC (ARC-IC)", "paragraphs": ["Instead of an ARC-CO revenue guarantee on a crop-by-crop basis, farmers could select a farm-level guarantee that includes all covered commodities on a farm under one revenue guarantee. The farm-level revenue guarantee is again based on a five-year moving average of farm-level yields for each crop year, multiplied by the higher of the reference price or the MYAP, that aggregates all crop revenue into a single, whole-farm guarantee. ", "The individual ARC payment formula is 65% times the number of total base acres for the farm times the difference between the whole-farm revenue guarantee and the actual whole-farm crop revenue. The calculation for the guarantee and actual revenue are based on the aggregation of all covered commodities on the farm using individual farm yields instead of county yields. "], "subsections": []}]}, {"section_title": "Decoupled Payments Made on Base Acres", "paragraphs": ["A participating farmer does not have to plant or harvest a covered commodity to receive a PLC or ARC payment. However, a portion of the farm's base acres must be enrolled in either PLC or ARC for that covered commodity. This is because ARC-CO, ARC-IC, and PLC payments are decoupled: Payments are made on a portion of a crop's enrolled base acres rather than actual production. If ARC-CO or PLC program payments are triggered, then they are made on 85% of the producer's base acres that were enrolled for that covered commodity irrespective of actual plantings. ARC-IC payments are made on a reduced 65% of base acres.", "Payments are made with a lag of approximately one year, as a full 12-month marketing year must be completed to compile the annual price and yield data necessary for USDA's calculations. According to statute (Section 1106 for PLC, Section 1107 for ARC), USDA is to announce payments no later than 30 days after the end of each marketing year. However, the actual payments may not be made prior to October 1 after the end of the applicable marketing year for the covered commodity. The marketing year varies by crop. For example, the marketing year for corn or soybeans harvested in fall 2019 ends on August 31, 2020. Thus, corn and soybean payments must be announced by September 30, 2020, but may not be made before October 1, 2020."], "subsections": []}]}, {"section_title": "Payment Limits", "paragraphs": ["The enacted 2018 farm bill sets a $125,000 per-person cap on the total combined payments of PLC and ARC for all covered commodities on a farming operation except peanuts, which has a separate $125,000 limit. In addition, a provision in the 2018 farm bill (Section 1603) specifies that any reductions in PLC and ARC payments due to sequestration must be applied before evaluating payment limit criteria. The 2018 farm bill (Section 1703) removed MAL program payments from any payment limit criteria. ", "Payment limits may be doubled if the farm operator has a spouse. On family farming operations, all family members ages 18 or older are deemed to meet AEF criteria and are eligible for a separate payment limit. Prior to the 2018 farm bill, family membership was based on lineal ascendants or descendants but was also extended to siblings and spouses. The 2018 farm bill (Section 1703(a)(1)(B)) expands the definition of family farm to include cousins, nephews, and nieces."], "subsections": []}, {"section_title": "Miscellaneous Payment Programs", "paragraphs": ["Producers of upland cotton may also benefit from payments under two 2018 farm bill provisions: Section 1203(b), which provides economic adjustment assistance to users of upland cotton, and Section 1201(b)(2), which authorizes cotton storage cost reimbursements under certain market conditions.", "Economic adjustment assistance payments are made to domestic users for all documented use of upland cotton on a monthly basis, regardless of the origin of the upland cotton (imported or domestic). The payment rate is $0.03 per pound. Although the payments are made to cotton users, at least a portion of the payment is likely returned to producers in the form of higher prices associated with the increased demand from domestic users.", "The cotton storage cost reimbursement is generally referred to as a storage credit, since it is used to reduce the loan repayment rate by a portion of the accrued storage costs for upland cotton that has been placed under a MAL loan. It does not involve any actual CCC budgetary outlay but rather is a reduction in potential receipts from the CCC budget. The availability of a cotton storage credit is determined by the relationship between the MAL rate for upland cotton, the weekly announced average world price, and the accrued interest and storage charges specific to each bale of cotton placed under the MAL program. "], "subsections": []}, {"section_title": "Interaction with Federal Crop Insurance", "paragraphs": ["Federal crop insurance directly intersects with farm programs when producers choose between the ARC and PLC programs. For producers who select the PLC, additional price protection is available by purchasing Supplemental Coverage Option (SCO). SCO is a crop insurance product that was permanently authorized under the 2014 farm bill (Section 11003). SCO is designed to cover part of the deductible on a producer's underlying crop insurance policy. SCO is not available for base acres enrolled in ARC."], "subsections": []}]}, {"section_title": "Dairy and Sugar Programs", "paragraphs": ["The sugar (Subtitle C) and dairy (Subtitle D) programs are essential parts of Title I of the 2018 farm bill. However, their programs differ markedly from the MAL, PLC, and ARC programs. Neither dairy nor sugar program benefits are subject to any per-person payment limit. In addition, the commodities themselves differ from the other Title I commodities (primarily grain and oilseed crops) in the nature of their output\u2014fluid milk and refined sugar, how these commodities are processed and stored, and the markets that they are sold into. As a result, the dairy and sugar programs are briefly discussed below but are described in more detail in other reports."], "subsections": [{"section_title": "The Dairy Margin Coverage Program", "paragraphs": ["The current U.S. dairy program\u2014known as the Dairy Margin Coverage (DMC) program\u2014was first authorized by the 2014 farm bill under the previous name of Margin Protection Program (MPP). The DMC offers milk producers a range of milk price margin protection levels based on their historical milk production. The milk margin is defined as the difference between the farm price per hundred pounds (cwt) of milk and the price of a representative feed ration based on USDA-announced prices for milk and major feed ingredients (corn, soymeal, and alfalfa hay). The DMC pays participating dairy producers the difference (when positive) between a producer-selected DMC margin protection level and the actual national milk margin. Producers must sign up for the program and pay an administrative fee of $100. Producers choose coverage either at the free $4.00/cwt margin or pay a premium that increases for higher milk production coverage levels and higher margin protection thresholds.", "The 2018 farm bill significantly revised the margin program, including renaming it as the DMC. Premium rates for the first 5 million pounds of milk coverage were lowered; the range of margin protection for the first 5 million pounds of production was expanded (the previous range was $4.50/cwt to $8.00/cwt; the new range is $4.50/cwt to $9.50/cwt); the range of margin protection available for the production beyond the first 5 million pounds retains the previous $4.50-$8.00/cwt range of choices but with slightly higher premiums; and producers may now cover a larger quantity of milk production (up to 95% of their historical base production). DMC is authorized through December 31, 2023. ", "Also, under the 2018 farm bill, dairy producers may receive a 25% discount on their premiums if they select and lock in their margin and production coverage levels for the entire five years (calendar years 2019-2023) of the DMC program. Otherwise, producers may select coverage levels annually. Also under DMC, dairy producers may apply to USDA for reimbursement of MPP premiums paid, less any payments received, during calendar years 2014-2017. ", "Unlike MPP, the DMC program allows dairy producers to participate in both margin coverage and the Livestock Gross Margin-Dairy insurance program that insures the margin between feed costs and a designated milk price. "], "subsections": []}, {"section_title": "The Sugar Program", "paragraphs": ["Current law mandates that raw cane and refined beet sugar prices are supported through a combination of limits on domestic output that can be sold (marketing allotments), nonrecourse marketing assistance loans for domestic sugar (but at the processor level), quotas that limit imports, and a sugar-to-ethanol backstop program (Feedstock Flexibility Program). These sugar program features result in essentially no federal outlays. The only change to the sugar program under the 2018 farm bill was a 5% increase in the MAL rate for raw cane and refined beet sugar ( Table 1 ).", "U.S. producers of both sugar and milk receive important price support via import protection from international competitor products under tariff-rate quotas (TRQs). Such TRQ support does not incur a direct cost to the federal government. Instead, domestic consumers bear the costs. For example, despite incurring no federal outlays, the U.S. government notifies sugar TRQ protection annually to the World Trade Organization as market price support (valued at over $1.4 billion in 2014)."], "subsections": []}]}, {"section_title": "Agricultural Disaster Assistance Programs", "paragraphs": ["Four disaster assistance programs that focus primarily on livestock and tree crops were permanently authorized in the 2014 farm bill. These disaster assistance programs provide federal assistance to help farmers and ranchers recover financially from natural disasters, including drought and floods. Participation is free.", "The Livestock Indemnity Program (LIP) compensates producers at a rate of 75% of market value for livestock mortality or livestock sold at a loss. Eligible loss conditions may include (1) extreme or abnormal damaging weather that is not expected to occur during the loss period for which it occurred, (2) disease that is caused or transmitted by a vector and is not susceptible to control by vaccination, and (3) an attack by animals reintroduced into the wild by the federal government or protected by federal law. The Livestock Forage Disaster Program (LFP) provides payments to eligible livestock producers who have suffered grazing losses on drought-affected pastureland (including cropland planted specifically for grazing) or on rangeland managed by a federal agency due to a qualifying fire. The Tree Assistance Program (TAP) provides payments to eligible orchardists and nursery growers to replant or rehabilitate trees, bushes, and vines damaged by natural disasters, disease, and insect infestation. Eligible losses must exceed 15% after adjustment for normal mortality. Payments cover 65% of the cost of replanting trees or nursery stock and 50% of the cost of rehabilitation (e.g., pruning and removal). The Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP) provides payments to producers of livestock, honey bees, and farm-raised fish as compensation for losses due to disease, adverse weather, feed or water shortages, or other conditions (such as wildfires) that are not covered under LIP or LFP.", "The 2018 farm bill amended the permanent agricultural disaster assistance programs by expanding the definition of eligible producer to include Indian tribes or tribal organizations. It also expanded payments under LIP for livestock losses caused by disease and for losses of unweaned livestock that occur before vaccination. It increased replanting and rehabilitation payment rates for orchardists who are beginning farmers or veterans under TAP. Finally, it removed payment limits on ELAP. Of the four disaster assistance programs, only the LFP is now subject to the $125,000 per-person payment limit. "], "subsections": [{"section_title": "Noninsured Crop Disaster Assistance Program (NAP)", "paragraphs": ["NAP is available for production of all agricultural commodities that are not covered by a federal crop insurance policy. NAP was permanently authorized by the 1996 farm bill (Federal Agriculture Improvement and Reform Act; P.L. 104-127 ). The 2018 farm bill (Section 1601) amended NAP by increasing the per-crop signup fee to $325 per crop, or $825 per producer per county, but not to exceed $1,950 per producer. Also, NAP eligibility was expanded to include crops that may be covered by select forms of crop insurance but only under whole farm plans or weather index policies. The 2018 farm bill also amended the payment calculation to consider the producer's share of the crop. ", "NAP offers both catastrophic coverage (a crop loss of at least 50% valued at 55% of the average market price) and additional buy-up coverage (ranging from 50% to 65% of established yields and 100% of the average market price). The 2018 farm bill made buy-up coverage permanent, added data collection and program coordination requirements, and created separate payment limits for catastrophic ($125,000 per person) and buy-up ($300,000 per person) coverage."], "subsections": []}]}, {"section_title": "Estimated Cost of the Commodity Title", "paragraphs": ["CBO projects USDA spending for Title I farm commodity and disaster programs under the 2018 farm bill at $31.3 billion for the five-year 2019-2023 period. This translates to $6.3 billion annually, including projected annual outlays of $4.1 billion for PLC and $1.2 billion for ARC ( Table 2 ). This contrasts with estimated annual outlays on Title I programs under the 2014 farm bill of $7.2 billion, including $1.8 billion for PLC and $3.3 billion for ARC.", "Under the 2014 farm bill, most acres of corn, soybeans, and wheat\u2014the three largest crops produced annually in the United States\u2014were enrolled in ARC (93%, 97%, and 56%, respectively). This preference for enrollment in ARC contributed to larger annual payment outlays under ARC ($3.3 billion per year on average) than PLC ($1.8 billion per year) under the 2014 farm bill. CBO's spending projections assume that a large proportion of producers will switch from participating in ARC to PLC under the 2018 farm bill ( Figure 7 ). The assumed shift in participation between the two programs is driven by projections of farm prices for major program crops to track near or below PLC reference prices throughout the 10-year projection period, thus implying greater potential for PLC payments. ", "The substantial projected shift in participation from ARC to PLC is projected to result in significantly larger annual outlays under the PLC program ($4.1 billion per year) than under the ARC program ($1.2 billion per year) under the five-year life of the 2018 farm bill, crop years 2019-2023 ( Table 2 and Figure 8 ). Annual program outlays can be highly variable. This is because spending on the farm revenue support programs\u2014MAL, PLC, and ARC\u2014is market-driven, and disaster assistance payments are associated with unpredictable acts of nature. Given the counter-cyclical design of the PLC and ARC programs, if commodity prices turn out to be higher than projected, then outlays will be lower than projected levels (and vice versa)."], "subsections": [{"section_title": "Appendix. Comparison of Major Title I Provisions in Prior Law and the Enacted 2018 Farm Bill, by Subtitle", "paragraphs": ["This appendix provides a side-by-side comparison of provisions from Title I (the Commodity title) of the 2018 farm bill with prior law\u2014that is, provisions from Title I of the 2014 farm bill ( P.L. 113-79 ) as amended by subsequent law including the Bipartisan Budget Agreement (BBA) of 2018 ( P.L. 115-123 ). ", "The BBA made substantial changes to both the dairy program and the treatment of cotton under the PLC and ARC programs. ", "Each subtitle (A-G) is individually examined in a separate table with the exception of Subtitle C (Sugar) and Subtitle D (Dairy), which are examined in more detail by other CRS products. This appendix includes the following tables by subtitle.", "Table A-1. Subtitle A\u2014Commodity PolicyTable A-2. Subtitle B\u2014Marketing LoansTable A-3. Subtitle E\u2014Supplemental Agricultural Disaster AssistanceTable A-4. Subtitle F\u2014Noninsured Crop AssistanceTable A-5. Subtitle G\u2014Administration", "For information on the dairy and sugar programs and their explicit legislative text, see:", "CRS Report R45525, The 2018 Farm Bill (P.L. 115-334): Summary and Side-by-Side Comparison , coordinated by Mark A. McMinimy; CRS In Focus IF10750, Farm Bill Primer: Dairy Safety Net , by Joel L. Greene; CRS In Focus IF10833, Dairy Provisions in the Bipartisan Budget Act (P.L. 115-123) , by Joel L. Greene; CRS In Focus IF10223, Fundamental Elements of the U.S. Sugar Program , by Mark A. McMinimy; and CRS Report R43998, U.S. Sugar Program Fundamentals , by Mark A. McMinimy."], "subsections": []}]}]}}
{"id": "R45248", "title": "The Congressional Review Act: Determining Which \u201cRules\u201d Must Be Submitted to Congress", "released_date": "2019-03-06T00:00:00", "summary": ["The Congressional Review Act (CRA) allows Congress to review certain types of federal agency actions that fall under the statutory category of \"rules.\" The CRA requires that agencies report their rules to Congress and provides special procedures under which Congress can consider legislation to overturn those rules. A joint resolution of disapproval will become effective once both houses of Congress pass a joint resolution and it is signed by the President, or if Congress overrides the President's veto.", "The CRA generally adopts a broad definition of the word \"rule\" from the Administrative Procedure Act (APA), defining a rule as \"the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency.\"", "The CRA, however, provides three exceptions to this broad definition:", "any rule of particular applicability, including a rule that approves or prescribes for the future rates, wages, prices, services, or allowances therefor, corporate or financial structures, reorganizations, mergers, or acquisitions thereof, or accounting practices or disclosures bearing on any of the foregoing; any rule relating to agency management or personnel; or any rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties.", "The class of rules the CRA covers is broader than the category of rules that are subject to the APA's notice-and-comment requirements. As such, some agency actions, such as guidance documents, that are not subject to notice-and-comment rulemaking procedures may still be considered rules under the CRA and thus could be overturned using the CRA's procedures. The effect of Congress disapproving a rule that is not subject to notice-and-comment rulemaking may be subject to debate, given that such rules are generally viewed to lack any legal effect in the first place. Nonetheless, the CRA does encompass some such rules, as highlighted by the recent enactment of a CRA resolution overturning a bulletin from the Consumer Financial Protection Bureau that was not subject to the notice-and-comment procedures.", "Even if an agency action falls under the CRA's definition of \"rule,\" however, the expedited procedures for considering legislation to overturn the rule only become available when the agency submits the rule to Congress. In many cases in which agencies take actions that fall under the scope of a \"rule\" but have not gone through notice-and-comment rulemaking procedures, agencies fail to submit those rules. Thus, questions have arisen as to how Members can avail themselves of the CRA's special fast-track procedures if the agency has not submitted the action to Congress.", "To protect its prerogative to review agency rules under the CRA, Congress and the Government Accountability Office (GAO) have developed an ad hoc process in which Members can request that GAO provide a formal legal opinion on whether a particular agency action qualifies as a rule under the CRA. If GAO concludes that the action in question falls within the CRA's definition of \"rule,\" Congress has treated the publication of the GAO opinion in the Congressional Record as constructive submission of the rule. In other words, an affirmative opinion from GAO can allow Congress to use the CRA procedures to consider legislation overturning an agency action despite the agency not submitting that action to Congress."], "reports": {"section_title": "", "paragraphs": ["T he Congressional Review Act (CRA) allows Congress to review certain types of federal agency actions that fall under the statutory category of \"rules.\" Enacted in 1996 as part of the Small Business Regulatory Enforcement Fairness Act, the CRA requires agencies to report the issuance of \"rules\" to Congress and provides Congress with special procedures under which to consider legislation to overturn those rules. A joint resolution of disapproval will become effective once both houses of Congress pass a joint resolution and it is signed by the President, or if Congress overrides the President's veto. ", "For an agency's action to be eligible for review under the CRA, it must qualify as a \"rule\" as defined by the statute. The class of rules covered by the CRA is broader than the category of rules that are subject to the Administrative Procedure Act's (APA's) notice-and-comment requirements. As such, some agency actions, such as guidance documents, that are not subject to notice-and-comment rulemaking procedures may still be considered rules under the CRA and thus could be overturned using the CRA's procedures. ", "The 115 th Congress used the CRA to pass, for the first time, a resolution of disapproval overturning an agency guidance document that had not been promulgated through notice-and-comment procedures. The resolution was signed into law by the President on May 21, 2018. In all of the previous instances in which the CRA was used to overturn agency actions, the disapproved actions were regulations that had been adopted through APA rulemaking processes. Congress's use of the CRA in this instance raised questions about the scope of the CRA and Congress's ability to use the CRA to overturn agency actions that were not promulgated through APA notice-and-comment procedures. ", "Under the CRA, the expedited procedures for considering legislation to overturn rules become available only when agencies submit their rules to Congress. In many cases in which agencies take actions that meet the legal definition of a \"rule\" but have not gone through notice-and-comment rulemaking procedures, however, agencies fail to submit those rules. Thus, questions have arisen as to how Members can use the CRA's procedures to overturn agency actions when an agency does not submit the action to Congress. ", "This report first describes what types of agency actions can be overturned using the CRA by providing a close examination and discussion of the statutory definition of \"rule.\" The report then explains how Members can use the CRA to overturn agency rules that have not been submitted to Congress. "], "subsections": [{"section_title": "Overview of the CRA", "paragraphs": ["Under the CRA, before a rule can take effect, an agency must submit to both houses of Congress and the Government Accountability Office (GAO) a report containing a copy of the rule and information on the rule, including a summary of the rule, a designation of whether the rule is \"major,\" and the proposed effective date of the rule. For most rules determined to be \"major,\" the agency must allow for an additional period to elapse before the rule can take effect\u2014primarily to give Congress additional time to consider taking action on the most economically impactful rules\u2014and GAO must write a report on each major rule to the House and Senate committees of jurisdiction within 15 days. The report is to contain GAO's assessment of the agency's compliance with various procedural steps in the rulemaking process. ", "After a rule is received by Congress, Members have the opportunity to use expedited procedures to overturn the rule. A Member must submit the resolution of disapproval and Congress must take action on it within certain time periods specified in the CRA to take advantage of the expedited procedures, which exist primarily in the Senate. Those expedited, or \"fast track,\" procedures include the following:", "a Senate committee can be discharged from the further consideration of a CRA joint resolution disapproving the rule by a petition signed by at least 30 Senators; any Senator may make a nondebatable motion to proceed to consider the disapproval resolution, and the motion to proceed requires a simple majority for adoption; and if the motion to proceed is successful, the CRA disapproval resolution would be subject to up to 10 hours of debate, and then voted upon. No amendments are permitted and the disapproval resolution requires a simple majority to pass.", "If both houses pass the joint resolution, it is sent to the President for signature or veto. If the President were to veto the resolution, Congress could vote to override the veto under normal veto override procedures. ", "If a joint resolution of disapproval is submitted and acted upon within the CRA-specified deadlines and signed by the President (or if Congress overrides the President's veto), the CRA states that the \"rule shall not take effect (or continue).\" In other words, if part or all of the rule had already taken effect, the rule would be deemed not to have had any effect at any time. If a rule is disapproved, the status quo that was in place prior to the issuance of the rule would be reinstated.", "In addition, when a joint resolution of disapproval is enacted, the CRA provides that a rule may not be issued in \"substantially the same form\" as the disapproved rule unless it is specifically authorized by a subsequent law. The CRA does not define what would constitute a rule that is \"substantially the same\" as a nullified rule. "], "subsections": []}, {"section_title": "Types of Agency Actions Covered by the CRA", "paragraphs": ["The CRA governs \"rules\" promulgated by a \"federal agency,\" using the definition of \"agency\" provided in the APA. That APA definition broadly defines an agency as \"each authority of the Government of the United States, ... but does not include ... Congress; ... the courts of the United States; ... courts martial and military commissions.\" Accordingly, the CRA generally covers rules issued by most executive branch entities. In the context of the APA, however, courts have held that this definition excludes actions of the President. ", "The more difficult interpretive issue is what types of agency actions should be considered \"rules\" under the CRA. The CRA adopts a broad definition of the word \"rule\" from the APA, but then creates three exceptions to that definition. This APA definition of \"rule\" encompasses a wide range of agency action, including certain agency statements that are not subject to the notice-and-comment rulemaking requirements outlined elsewhere in the APA:", "\"[R]ule\" means the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency and includes the approval or prescription for the future of rates, wages, corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services or allowances therefor or of valuations, costs, or accounting, or practices bearing on any of the foregoing[.]", "The CRA narrows this definition by providing that the term \"rule\" does not include", "(A) any rule of particular applicability, including a rule that approves or prescribes for the future rates, wages, prices, services, or allowances therefor, corporate or financial structures, reorganizations, mergers, or acquisitions thereof, or accounting practices or disclosures bearing on any of the foregoing;", "(B) any rule relating to agency management or personnel; or", "(C) any rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties.", "Determining whether any particular agency action is a rule subject to the CRA therefore entails a two-part inquiry: first, asking whether the statement qualifies as a rule under the APA definition and, second, asking whether the statement falls within any of the exceptions noted above to the CRA's definition of rule. These two steps are illustrated below in Figure 1 . ", "This section of the report walks through the two elements of this inquiry in more detail. First, while the APA's definition of \"rule\" is expansive, courts have held that \"Congress did not intend that the ... definition ... be construed so broadly that every agency action\" should be encompassed under this provision. As a preliminary matter, courts have distinguished agency rulemaking actions from adjudicatory and investigatory functions. And under the statutory text, to qualify as a rule, an agency statement must meet three requirements: it must be \"of general ... applicability,\" have \"future effect,\" and be \"designed to implement, interpret, or prescribe law or policy.\" Second, even if an agency statement does qualify as an APA \"rule,\" the CRA expressly exempts three categories of rules from its provisions: rules \"of particular applicability,\" rules \"relating to agency management or personnel,\" and \"any rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties.\" Both inquiries are heavily fact specific, and require looking beyond a document's label to the substance of the agency's action. "], "subsections": [{"section_title": "Determining Whether an Agency Action Is an APA Rule", "paragraphs": ["The CRA defines the word \"rule\" by incorporating in part the APA's definition of that term. Although there is very little case law interpreting the meaning of \"rule\" under the CRA, cases interpreting the APA's definition of \"rule\" may provide persuasive authority for interpreting the CRA because the CRA explicitly relies on that provision as the basis for its own definition of the term \"rule.\" The APA provides a general framework governing most agency action\u2014not only agency rulemaking, but also administrative adjudications. The APA accordingly distinguishes different types of agency actions, separating rules from orders and investigatory acts. These distinctions may also be relevant when deciding whether an agency action is a rule subject to the CRA."], "subsections": [{"section_title": "Differentiating \"Rules,\" \"Orders,\" and \"Investigative Acts\" under the APA", "paragraphs": ["The APA distinguishes a \"rule\" from an \"order,\" defining an \"order\" as \"the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing.\" Orders are the product of agency adjudication, in contrast to rules, which result from rulemaking. To determine whether an agency action is a rule or an order in the context of the APA, courts look beyond the document's label to the substance of the action. One federal court of appeals described the distinction between rulemaking and adjudication as follows: ", "First, adjudications resolve disputes among specific individuals in specific cases, whereas rulemaking affects the rights of broad classes of unspecified individuals.... Second, because adjudications involve concrete disputes, they have an immediate effect on specific individuals (those involved in the dispute). Rulemaking, in contrast, is prospective, and has a definitive effect on individuals only after the rule subsequently is applied.", "Courts have also distinguished rules from agency investigations. A separate provision of the APA addresses an agency's authority to compel the submission of information and perform \"investigative act[s] or demand[s].\" When agencies conduct investigative actions such as requiring regulated parties to submit informational reports, courts have held that they are not subject to the APA's rulemaking requirements. However, courts have also noted that some actions related to investigations may qualify as rules. For instance, in one case, a federal court of appeals observed that the procedures governing an agency's decision to investigate \"are separate from and precede the agency's ultimate act,\" concluding that the procedures at issue constituted a rule."], "subsections": []}, {"section_title": "\"Rules\" under the APA", "paragraphs": ["An agency statement will qualify as a \"rule\" under the APA definition if it (1) is \"of general or particular applicability,\" (2) has \"future effect,\" and (3) is \"designed to implement, interpret, or prescribe law or policy.\" With regard to the first requirement, as the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) has noted, most agency statements will be \"of general or particular applicability\" and will fulfill this condition. ", "The second requirement\u2014that a rule be \"of ... future effect\" \u2014is the subject of some ambiguity. Courts have largely agreed that this requirement is likely intended to distinguish agency rulemaking from agency adjudication. Courts often differentiate rules and orders by noting that orders are retrospective, while rules have \"future effect.\" Rules operate prospectively, in the sense that they are intended to \"inform the future conduct\" of those subject to the rules. ", "Additionally, courts have sometimes said that the \"future effect\" requirement excludes any agency statements that do not \"bind the agency.\" Thus, for example, in a concurring opinion in a 1988 Supreme Court case, Justice Scalia suggested that the \"future effect\" requirement must be read to mean \"that rules have legal consequences only for the future.\" He argued that the only way to distinguish rules from orders\u2014which can have both future and past legal consequences\u2014was to define rules as having only prospective operation. Judge Silberman of the D.C. Circuit, concurring in an opinion from that court, drew on Justice Scalia's interpretation of this requirement to argue that it would be unreasonable to conclude that every single agency statement with future effect is a rule under the APA. Instead, he argued that only agency statements that \"seek to authoritatively answer an underlying policy or legal issue\" should be considered rules. ", "These opinions raise several unanswered questions, which could suggest some hesitation before reading the phrase \"future effect\" in the APA definition of a rule to mean \"binding.\" First, these cases do not fully explain what it means for an agency statement to be binding or address the case law suggesting that the term \"future effect\" merely pertains to the prospective nature of the statement. Second, and perhaps more critical, this case law reading \"future effect\" to mean that APA \"rules\" must bind the agency does not explain how to distinguish this requirement from the separate inquiry into whether an agency action is subject to notice-and-comment rulemaking procedures. As discussed in more detail below, some (but not all) APA \"rules\" must go through procedures commonly known as notice-and-comment rulemaking. To distinguish so-called \"legislative\" rules that are subject to notice-and-comment procedures from \"interpretive\" rules, which are not, courts generally ask whether the rule has \"the force of law\" \u2014or stated another way, whether the rule is \"legally binding.\" Arguably, then, this \"legal effect\" test for notice-and-comment rulemaking may be equivalent to asking whether a rule binds an agency. However, the \"future effect\" inquiry tests whether an agency action is a \"rule\" under 5 U.S.C. \u00a7551(4), and the \"legal effect\" inquiry tests whether such a rule is subject to the notice-and-comment procedures outlined in 5 U.S.C. \u00a7553. Because the tests are tied to two distinct statutory provisions, they arguably should not both turn on whether a rule is legally binding. This is especially true where courts have generally held that interpretive rules may not be subject to notice-and-comment but are nonetheless \"rules\" within the meaning of the APA. The fact that Congress expressly exempted \"interpretative rules\" from the rulemaking procedures applicable to \"rules\" may itself suggest that such agency actions are rules\u2014otherwise, the exemption would be unnecessary.", "The third requirement for an agency action to be considered an APA rule is that it must be \"designed to implement, interpret, or prescribe law or policy.\" The D.C. Circuit has held that agency documents that merely state an \"established interpretation\" and \"tread no new ground\" do not \"implement, interpret, or prescribe law or policy\" and therefore are not rules. Similarly, an agency statement is not a rule if it \"does not change any law or official policy presently in effect.\" Thus, courts have concluded that \"educational\" documents that merely \"reprint[]\" or \"restate\" existing law are not rules under the APA. The D.C. Circuit has also held that an agency's budget request is not a rule. "], "subsections": []}, {"section_title": "Notice-and-Comment Rulemaking and Guidance Documents", "paragraphs": ["The APA outlines specific rulemaking procedures that agencies must follow when they formulate, amend, or repeal a rule. The APA generally requires publication in the Federal Register and institutes procedural requirements that are often referred to as notice-and-comment rulemaking. Under notice-and-comment rulemaking, agencies must notify the public of a proposed rule and then provide a meaningful opportunity for public comment on that rule. However, not all agency acts that qualify as \"rules\" under the APA definition are required to comply with the APA's rulemaking procedures. In particular, the APA provides that notice and comment is not required for \"interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice.\" Additionally, the APA's rulemaking procedures do not, in relevant part, apply to \"matter[s] relating to agency management or personnel.\" Therefore, agency statements such as guidance documents or procedural rules may not be required to undergo notice-and-comment rulemaking, but may still be APA \"rules.\" ", "Courts frequently hold that agency's guidance documents are exempt from APA notice-and-comment rulemaking requirements because those documents are properly classified either as interpretative rules or as general policy statements. Interpretive rules merely explain or clarify preexisting legal obligations without themselves \"purport[ing] to impose new obligations or prohibitions,\" while general policy statements simply describe how an agency \"will exercise its broad enforcement discretion\" without binding the agency. But as mentioned above, the critical factor distinguishing both interpretive rules and general policy statements from \"legislative\" rules that must be promulgated through notice-and-comment procedures is \"whether the agency action binds private parties or the agency itself with the 'force of law,'\" or whether the rule \"has legal effect.\" General policy statements ordinarily are not legally binding, and accordingly are not \"substantive\" rules required to undergo notice-and-comment rulemaking procedures. ", "It should be noted that some cases from the D.C. Circuit have suggested that general policy statements are not \"rules\" at all under the APA definition. For example, in one case, the D.C. Circuit said that the \"primary distinction between a substantive rule\u2014really any rule\u2014and a general statement of policy, then, turns on whether an agency intends to bind itself to a particular legal position.\" As discussed above, courts have also sometimes held that where an agency statement does not \"bind\" an agency, it has no \"future effect\" and therefore cannot qualify as an APA \"rule.\" This \"binding effect\" requirement has clear parallels to these cases holding that general policy statements are not rules because they do not bind the agency. However, these latter decisions do not explicitly ground this characterization of general policy statements in the text of the APA requiring rules to have \"future effect.\" Accordingly, it is not clear how these two inquiries interrelate. Other cases have characterized general policy statements as APA rules, notwithstanding the fact that such a statement may not be legally binding in a future administrative proceeding. "], "subsections": []}, {"section_title": "CRA Incorporation of APA Definition of \"Rule\"", "paragraphs": ["The CRA incorporates the APA definition of \"rule\" by reference, and, consequently, should likely be read to incorporate judicial constructions of that definition. Thus, for example, although the CRA does not itself reference agency \"orders,\" some courts have nonetheless imported the APA's distinction between rules and orders when interpreting the CRA. Accordingly, if an agency acts through an order or investigatory act, rather than a rule, the requirements of the CRA likely will not apply. ", "In recent years, some commentators have discussed using the CRA to revoke agencies' guidance documents, raising the question of which guidance documents qualify as CRA \"rules.\" As a preliminary matter, it is important to note that \"guidance document\" is not a defined term under either the CRA or the APA. Even if an agency has characterized a statement as a guidance document rather than a rule, it still may qualify as a \"rule\" under the CRA. Instead, the relevant question is whether any agency statement labeled as guidance\u2014which could include, for example, actions such as memoranda, letters, or agency bulletins\u2014falls within the statutory definition of \"rule\" and, if so, whether it is nonetheless exempt from the CRA under any of the exceptions to that definition.", "As discussed above, agency statements labeled as guidance are frequently exempt from the APA's notice-and-comment rulemaking procedures because they fall within the exceptions for interpretive rules or general policy statements. However, while the CRA adopts the APA's definition of rule, the CRA's exceptions to that definition are not identical to the APA's exemptions from its notice-and-comment procedures. Notably, the CRA does not exclude from its definition of rule either general policy statements or interpretative rules. Instead, the category of agency \"rules\" subject to the requirements of the CRA appears to encompass most \"rules\" that must go through the APA's notice-and-comment rulemaking procedures, along with some that do not. Consequently, agency guidance documents that are exempt from the APA's notice-and-comment procedural requirements may nonetheless be subject to the CRA, if they do not fall within one of the CRA's exceptions. But the effect of a disapproval resolution in such a case may be limited because such guidance documents generally lack legal effect in the first place.", "The post-enactment legislative history of the CRA indicates that the CRA was intended to encompass some agency statements that would not be subject to the APA's notice-and-comment rulemaking requirements. Following the enactment of the CRA in 1996, the law's sponsors inserted into the Congressional Record a statement in which they asserted that the law would cover a wide swath of agency actions: ", "The committees intend this chapter to be interpreted broadly with regard to the type and scope of rules that are subject to congressional review. The term \"rule\" in subsection 804(3) begins with the definition of a \"rule\" in subsection 551(4) and excludes three subsets of rules that are modeled on APA sections 551 and 553. This definition of a rule does not turn on whether a given agency must normally comply with the notice-and-comment provisions of the APA.... The definition of \"rule\" in subsection 551(4) covers a wide spectrum of activities. ", "This statement suggests that Congress intended the CRA to reach a broad range of agency activities, including agency policy statements, interpretive rules, and certain rules of agency organization, despite the fact that those actions are not subject to the APA's requirements for notice and comment.", "However, as discussed above, there is some ambiguity regarding whether certain non-binding statements are rules at all. If general policy statements or other non-binding agency actions are not \"rules\" under the APA definition, then arguably, they are not rules under the CRA. But importantly, GAO has concluded that general policy statements should be considered \"rules\" under the CRA. As discussed in more detail below, GAO's resolution of this issue may stand as the last word on the matter, given the role that GAO has come to play in advising Congress on which agency actions are subject to the CRA."], "subsections": []}]}, {"section_title": "CRA Exceptions", "paragraphs": ["Even if an agency action is a \"rule\" within the APA definition, it will not be subject to the CRA if it falls within one of the three exceptions to the CRA's definition of a \"rule.\" The CRA incorporates the APA definition of rule, but exempts from that definition any rules \"of particular applicability,\" rules \"relating to agency management or personnel,\" and \"any rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties.\" Some of these exemptions track language in the APA, and accordingly, cases interpreting those APA provisions may be useful to interpret the CRA exceptions. Additionally, the CRA does not \"apply to rules that concern monetary policy proposed or implemented by the Board of Governors of the Federal Reserve System or the Federal Open Market Committee.\"", "The CRA also contains a partial exception for rules where an agency has, \"for good cause,\" dispensed with notice-and-comment rulemaking procedures, as well as for rules related to \"a regulatory program for a commercial, recreational, or subsistence activity related to hunting, fishing, or camping .\" However, this section does not exempt rules from the CRA procedures entirely; it merely allows the agency to determine when the rule shall take effect, notwithstanding the CRA's requirements. "], "subsections": [{"section_title": "Rules of Particular Applicability", "paragraphs": ["While the APA's definition of \"rule\" includes agency statements \"of general or particular applicability,\" the CRA expressly exempts \"any rule of particular applicability.\" Courts have said that this language refers to \"legislative-type promulgations\" that are \"directed to\" specifically named parties. In opinions from GAO analyzing whether various agency actions fall within the particular-applicability exception, GAO has stated that to be generally applicable, the CRA does not require a rule to \"generally apply to the population as a whole.\" Instead, \"all that is required is a finding\" that a rule \"has general applicability within its intended range, regardless of the magnitude of that range.\" For example, in one case, GAO concluded that an agency decision adopting and implementing a plan to counter decreased river flows in a certain river basin was not a matter of particular applicability. Although the decision applied to a specific geographic area, it would, in the view of GAO, nonetheless \"have significant economic and environmental impact throughout several major watersheds in the nation's largest state.\"", "The CRA gives examples of some types of rules of particular applicability by specifying that this exemption includes any \"rule that approves or prescribes for the future rates, wages, prices, services, or allowances therefor, corporate or financial structures, reorganizations, mergers, or acquisitions thereof, or accounting practices or disclosures bearing on any of the foregoing.\" Moreover, the post-enactment statement for the record written by the CRA's sponsors maintained that \"IRS private letter rulings and Customs Service letter rulings are classic examples of rules of particular applicability.\" Under the APA, courts have also held, for example, that agency actions designating specific sites as covered by environmental laws are rules of \"particular applicability.\""], "subsections": []}, {"section_title": "Rules Relating to Agency Management or Personnel", "paragraphs": ["The second CRA exemption excludes \"any rule relating to agency management or personnel.\" The APA contains a similar exemption from its general rulemaking requirements. Within the context of the APA, courts have concluded that this exemption covers agency statements such as policies for hiring employees. A rule will not fall within this exemption solely because it is \"directed at government personnel.\" Instead, courts have viewed this APA exception to cover internal matters that do not substantially affect parties outside an agency. ", "Notwithstanding the general presumption of courts that where Congress adopts language from another statute, it also intends to incorporate any settled judicial interpretations of that same language, it is unclear whether this substantial-effect requirement developed by courts in the context of the APA should be read into the CRA. The CRA's second exemption, for \"any rule relating to agency management or personnel,\" does not expressly mention a rule's effect on third parties. By contrast, the CRA's third exemption does. This distinction in language could be read to mean that Congress intentionally chose to create a substantial-effect requirement for the third exception while omitting this limitation from the second one, so that the CRA's second exception excludes \"any rule relating to agency management or personnel\" regardless of its impact on third parties. On this view, this difference in phrasing would displace the ordinary presumption that Congress incorporates case law interpreting similar statutory provisions. This interpretation of the second exemption could mean that the CRA's exception for rules relating to agency management or personnel may be interpreted more broadly than the APA exception. ", "However, it is also possible that Congress chose not to include the substantial-effect requirement in this second exception because \"prior judicial interpretation\" of the identical phrases in the APA made such language unnecessary. Congress may have added a substantial-effect requirement to the third exception in order to settle some ambiguity in the cases interpreting the parallel provision of the APA, as described below."], "subsections": []}, {"section_title": "Rules of Agency Organization, Procedure, or Practice", "paragraphs": ["Finally, the CRA exempts \"any rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties.\" The APA also excludes \"rules of agency organization, procedure, or practice\" from notice-and-comment rulemaking procedures. Courts have held that this APA exception includes actions like agency decisions relating to how regulated entities must go about satisfying investigative requirements. Unlike the CRA, the APA does not explicitly limit this exception to those rules that do not \"substantially affect the rights or obligations of non-agency parties.\" Nonetheless, because courts have read such a limitation into the APA exemption, the case law defining this requirement may be relevant to determine the scope of this CRA exemption. ", "However, in the cases interpreting this parallel APA exclusion, the impact of a rule on a third party is not the only factor courts use to distinguish between substantive rules, which are required to go through notice-and-comment procedures, and procedural rules, which are not. Instead, courts have engaged in two kinds of inquiries. The first is the \"substantial impact test,\" which asks whether the agency action substantially impacts the regulated industry. However, the D.C. Circuit has noted that even rules best characterized as procedural measures may have a significant effect on regulated parties, and, accordingly, has held that \"a rule with a 'substantial impact' upon the persons subject to it is not necessarily a substantive rule.\" Consequently, the D.C. Circuit has also asked whether the rule \"encodes a substantive value judgment.\"", "Nonetheless, because the text of the CRA expressly excludes rules \"of agency organization, procedure, or practice\" that do not \"substantially affect the rights or obligations of non-agency parties,\" the CRA appears to mandate the use of something akin to the substantial impact test to determine whether a rule falls within this exception. In fact, one of the sponsors of the CRA emphasized prior to its passage that to determine whether a rule should be excluded under this provision, \"the focus ... is not on the type of rule but on its effect on the rights or obligations of nonagency parties.\" He went on to say that the exclusion covered only rules \"with a truly minor, incidental effect on nonagency parties.\" GAO has sometimes drawn on the APA case law described above in its own opinions analyzing whether various actions fall within the purview of the CRA. However, because the substantial-impact test and the substantive-value-judgment test were developed in the context of the APA to test whether rules \"implicate the policy interests animating notice-and-comment rulemaking,\" these judicially created tests might not be directly applicable to determine whether an agency statement is subject to the CRA."], "subsections": []}]}]}, {"section_title": "CRA Requirement for Submission of Rules", "paragraphs": ["The CRA requires that agencies submit actions that fall within the CRA's definition of a rule to both houses of Congress and to GAO before the actions may take effect. Thus, the submission requirement applies generally to rules that are promulgated through APA notice-and-comment procedures, as well as to other types of agency statements, as discussed above.", "Specifically, Section 801(a)(1)(A) of the CRA requires the agency to submit a report containing a copy of the rule to each house of Congress and the Comptroller General; a concise general statement relating to the rule, including whether it is a major rule; and the proposed effective date of the rule. The agency is also required to submit additional information pertaining to any cost-benefit analysis the agency conducted, along with information on the agency's actions resulting from other regulatory impact analysis requirements, including the Regulatory Flexibility Act and the Unfunded Mandates Reform Act. For major rules, after receiving this information, GAO is then required to assess the agency's compliance with these additional informational requirements and include its assessment in the major rule report. The report is required to be submitted to the House and Senate committees of jurisdiction within 15 calendar days of the submission of the rule or its publication in the Federal Register , whichever date is later. ", "The \"report\" that agencies are required to submit along with the rule, in practice, is a two-page form on which they provide the information required under Section 801(a)(1)(A) and, for major rules, most of the information required to be included in GAO's major rule report. In FY1999 appropriations legislation, Congress required the Office of Management and Budget (OMB) to provide agencies with a standard form to use to meet this reporting requirement. OMB issued the form in March 1999 as part of a larger guidance to agencies on compliance with the CRA. A copy of the form is provided in Appendix A of this report. ", "When final rules are submitted to Congress, notice of each chamber's receipt and referral appears in the respective House and Senate sections of the daily Congressional Record devoted to \"Executive Communications.\" Notice of each chamber's receipt is also entered into a database that can be searched using Congress.gov. When the rule is submitted to GAO, a record of its receipt at GAO is noted in a database on GAO's website as well.", "Once the rule is received in Congress and published in the Federal Register , the time periods during which the CRA's expedited procedures are available begin, and Members can use the procedures to consider a resolution of disapproval. Thus, submission of rules to Congress under the CRA is critical because the receipt of the rule in Congress triggers the CRA's expedited procedures for introduction and consideration of a joint resolution disapproving the rule. In other words, if an agency fails to submit a rule to Congress, the House and Senate are unable to avail themselves of the special \"fast track\" procedures to consider a joint resolution striking down the rule."], "subsections": [{"section_title": "Agency Compliance with Submission Requirement", "paragraphs": ["Following enactment of the CRA in 1996, some Members of Congress and others raised concerns over agencies not submitting their rules on several occasions. At a hearing on the CRA in 1997, one year after its enactment, witnesses noted that agencies were not in full compliance with the submission requirement. It was also noted at the hearing, however, that it appeared agencies were seeking \"in good faith\" to comply with the statute. At a hearing in 1998 on implementation of the CRA, GAO's general counsel testified that agencies were often not sending their rules to GAO or Congress.", "Also in 1998, to further improve agency compliance with the CRA, Congress required OMB to issue guidance on certain provisions of the CRA, specifically including the submission requirement in 5 U.S.C. \u00a7801(a)(1). To meet this requirement, then-OMB Director Jacob J. Lew issued a memorandum for agencies in March 1999. The Lew memorandum provided information such as where agencies should send their rules in the House and Senate, including the addresses of the Office of the President of the Senate and the Speaker of the House, the offices in each chamber that receive the rules; what information the agencies should include with the rule; and an explanation of what types of rules are required to be submitted.", "Because agencies were initially inconsistent about fulfilling the submission requirement, GAO began to monitor agencies' compliance with the submission requirement by comparing the final rules that were published in the Federal Register with rules that were submitted to GAO. This was not a role that was required under the CRA; rather, GAO conducted these reviews voluntarily. As then-GAO general counsel Robert Murphy testified in 1998, GAO ", "conducted a review to determine whether all final rules covered by the Congressional Review Act and published in the Register were filed with the Congress and the GAO. We performed this review both to verify the accuracy of our own data base and to ascertain the degree of agency compliance with the statute. We were concerned that regulated entities may have been led to believe that rules published in the Federal Register were effective, when, in fact, they were not unless filed in accordance with the statute. ", "After its review of agency compliance with the submission requirement, in November 1997, GAO submitted to OMB's Office of Information and Regulatory Affairs (OIRA) a list of the rules that had been published in the Federal Register but had not been submitted to GAO. According to GAO, OIRA distributed this list to affected agencies; GAO then followed up again with the agencies that had rules that remained un-submitted in February 1998. GAO stated in its March 1998 testimony that \"In our view, OIRA should have played a more proactive role in assuring that the agencies were both aware of the statutory filing requirements and were complying with them.\"", "GAO continued to conduct similar reviews regularly, comparing the list of rules that agencies submitted to GAO against rules that were published in the Federal Register . Until 2012, GAO periodically sent letters to OIRA regarding rules that it had not received. In March 2012, GAO notified OIRA that, due to constraints on its resources, it would no longer be sending lists of rules not received. Instead, GAO decided to continue to track only major rules not received, not all final rules, as they had previously done. "], "subsections": [{"section_title": "Submission of Notice-and-Comment Rules vs. Other Types of Documents", "paragraphs": ["In general, although there have been exceptions noted by GAO, agencies appear to be fairly comprehensive in submitting rules to Congress and GAO when those rules have been promulgated through an APA rulemaking process. GAO's federal rules database lists thousands of such rules each year. In the case of rules that are not subject to notice-and-comment procedures, however, agencies often do not fulfill the submission requirement, and tracking compliance for these types of agency actions is more difficult. ", "Although GAO has voluntarily tracked agency compliance with the submission requirement, its methodology for doing so did not result in a complete list of agency actions that should have been submitted. GAO's point of reference was to compare regulations that were published in the Federal Register against regulations it received pursuant to the CRA. Most rules that are required to be published in the Federal Register are indeed subject to the CRA, making this a potentially helpful method of identifying rules that were not submitted. However, many of the other agency actions that are not subject to notice-and-comment requirements are not generally published in the Federal Registe r and are also not submitted to GAO. Therefore, using this method, many rules that should have been submitted likely were undetected by GAO and thus not included in the lists of un-submitted rules it sent to OIRA and to the agencies. It is precisely this issue that led to Members requesting GAO's opinion on individual agency actions that were of specific interest to them and were not submitted to Congress (nor, in most cases, published in the Federal Register ). ", "The higher incidence of noncompliance with the CRA's submission requirement for agency actions that were conducted outside the notice-and-comment rulemaking process is likely due in large part to the practical difficulty of submitting the substantial number of agency statements that qualify as rules under the CRA. The CRA's submission requirement could potentially include a wide variety of items such as FAQs posted on agency websites, press releases, bulletins, information memoranda, and statements made by agency officials. In congressional testimony in 1997, one administrative law scholar argued that agencies \"annually take tens of thousands of actions\" that would fall under the CRA's definition of rule, and that ", "Were agencies to comply fully with [the CRA's] requirement that all these matters be filed with Congress as a condition of their effectiveness (as it appears, thus far, they are not doing), Congress and the GAO would be swamped with filings. Burying Congress in paper might even seem a useful means of diverting attention from larger, controversial matters; haystacks can be useful for concealing needles. No one believes many, if any, of these rules will be the subjects of resolutions of disapproval. Yet for them even simple accompanying documents to permit data analysis and tracking, such as GAO has been proposing, would impose significant aggregate costs, well beyond their possible benefit.", "In addition, it seems possible that many agencies are unaware of the breadth of the CRA's coverage. Reading through various agencies' responses to the GAO opinions discussed below suggests that many agencies appear to be aware that notice-and-comment rules are generally covered by the CRA, but they may be unaware that many other types of actions are covered. For example, in an opinion it issued in 2012 regarding an action taken by the Department of Health and Human Services, GAO stated that \"We requested the views of the General Counsel of HHS on whether the July 12 Information Memorandum is a rule for purposes of the CRA by letter dated August 3, 2012. HHS responded on August 31, 2012, stating that the Information Memorandum was issued as a non-binding guidance document, and that HHS contends that guidance documents do not need to be submitted pursuant to the CRA.\" GAO concluded, however, \"We cannot agree with HHS's conclusion that guidance documents are not rules for the purposes of the CRA and HHS cites no support for this position.\" "], "subsections": []}]}]}, {"section_title": "GAO's Role in Determining Whether an Agency Action is Covered by the CRA", "paragraphs": ["Because submission of rules is key to Congress's ability to use the CRA, if an agency does not submit a rule to Congress, this could potentially frustrate Congress's ability to review rules under the act. To avoid Congress being denied its opportunity for review of rules in this way, however, the Senate appears to have developed a practice that allows it to employ the CRA's review mechanism even when an agency does not submit a rule for review. That practice has involved seeking an opinion from GAO on whether an agency action should have been submitted under the CRA (i.e., whether the action is covered by the CRA's definition of \"rule\").", "In several instances since the enactment of the CRA in 1996, Members of Congress sought an opinion from GAO as to whether certain agency actions were covered by the CRA, despite the agency not having undertaken notice-and-comment rulemaking or having submitted the action to Congress. GAO has issued 21 opinions of this type as of March 5, 2019. In many of these opinions, GAO has defined the term \"rule\" as used in the CRA expansively. In 11 of the 21 opinions, GAO opined that the agency statement in question was a rule under the CRA that should have been submitted to the House and Senate for review. These opinions are summarized below in this report and are listed in a table in Appendix B .", "In recent years, the Senate has considered publication in the Congressional Record of a GAO opinion classifying an agency action as a rule as the trigger date for the initiation period to submit a disapproval resolution and for the action period during which such a joint resolution qualifies for expedited consideration in the Senate. Thus, the question of whether Congress may use the CRA's expedited parliamentary disapproval mechanism generally hinges upon the nature of GAO's opinion in such cases. By allowing the GAO opinion to serve as a substitute for the actual submission of a rule, the Senate can still avail itself of the CRA's expedited procedures to overturn rules. "], "subsections": [{"section_title": "Origin of GAO's Role", "paragraphs": ["In responding to these requests from Members for opinions on whether certain agency actions are covered, GAO has played an important role in determining the applicability of the CRA, although the specific role that GAO has played in this regard is not explicitly outlined in the statute. But a review of the history of the early implementation of the CRA, and a consideration of GAO's other activities under the CRA, suggests that the role GAO currently plays with regard to determining whether a specific agency action is a \"rule\" is linked to other activities GAO has engaged in regarding the CRA.", "As has been noted, GAO's primary statutory requirement under the CRA is to provide a report to the committees of jurisdiction on each major rule, and to include in the report information about the agency's compliance with various steps of the rulemaking process for each major rule. ", "For non-major rules, soon after the CRA was enacted, GAO voluntarily created an online database of rules submitted to it under the CRA, suggesting that it was willing to go beyond what was required of it by the statute to facilitate implementation. As GAO's general counsel explained in congressional testimony in 1998, \"Although the law is silent as to GAO's role relating to the nonmajor rules, we believe that basic information about the rules should be collected in a manner that can be of use to Congress and the public. To do this, we have established a database that gathers basic information about the 15-20 rules we receive on the average each day.\" The database can be used to search for rules by elements such as the title, issuing agency, date of publication, type of rule (major or non-major), and effective date. The website also contains links to each of GAO's major rule reports. ", "Perhaps most notably, however, GAO's determination of whether agency actions are considered \"rules\" under the CRA appears to be closely linked to its monitoring of agency compliance with the submission requirement as discussed above. The question of whether an agency action is a rule under the CRA is also a question of whether it should be submitted; arguably, then, GAO is addressing a very similar question in its opinions on whether certain agency actions are covered as it was in its initial reports to OIRA on agency compliance with the submission requirement. ", "A discussion of GAO's role in a congressional hearing on the Tongass Land Management Plan in 1997 provides some evidence of the voluntary and, initially, ad hoc nature of GAO's role in this regard. One of the issues that was addressed at the hearing was whether the plan should be considered a rule under the CRA; GAO's general counsel was invited to testify at the hearing. Six days before the hearing, GAO issued its second opinion on the applicability of the CRA, in which it stated that the Tongass Land Management Plan should have been submitted as a rule under the CRA. Former Senator Larry Craig, who had requested the opinion, asked GAO's general counsel at the hearing about GAO's role: ", "It is our understanding of your testimony and our own reading of the Regulatory Flexibility Act that the General Accounting Office has been given the role of advising Congress and perhaps agencies on whether their policy decisions constitute rules. It is our understanding that the GAO's independent opinion is generally given considerable weight by the agencies. Is this also the GAO's understanding of its role?", "In response, GAO's general counsel, Robert Murphy, stated that the CRA", "does not provide any identification of who is to decide what a rule is, unlike the issue of whether a rule is a major rule or not, which, as [OIRA Administrator] Ms. Katzen pointed out, has been assigned to her. So in that sense, I cannot say that GAO has a special role under the statute for making that determination. The decision, the opinion, that we issued last week on the question [of whether the Tongass Land Management Plan was a rule under the CRA] was done in our role as adviser to the Congress in response to the request of three chairmen of congressional committees.", "Thus, GAO acknowledged that its opinion was provided not pursuant to any specific provision of the statute, but in a more general, advisory capacity. In the years following, Members continued to request GAO opinions advising Congress on the matter of whether an agency action should have been submitted. "], "subsections": [{"section_title": "Congressional Response to GAO Opinions Since 1996", "paragraphs": ["Although GAO has issued 21 opinions on the applicability of the CRA since 1996, Congress's response to those opinions has varied over time. Initially, the GAO opinions finding that the agency actions in question were rules under the CRA did not lead to the introduction of joint resolutions of disapproval\u2014Members appear not to have introduced any joint resolutions of disapproval following a GAO opinion until 2008. In 2008, GAO issued an opinion stating that a letter from the Centers for Medicare & Medicaid Services to state health officials concerning the State Children's Health Insurance Program was a rule for the purposes of the CRA; in response, Senator John D. Rockefeller introduced S.J.Res. 44 to disapprove the guidance provided in the letter. According to a press release from the Committee on Finance at the time, however, the committee did not take further action on the resolution of disapproval because it had missed the window during which the action would have been required to be taken under the CRA to use its expedited procedures.", "The first time either chamber took action on a resolution of disapproval introduced following a GAO opinion was in 2012, when the House passed H.J.Res. 118 (112 th Congress), a resolution of disapproval that would have overturned an information memorandum issued by the Department of Health and Human Services relating to the implementation of the Temporary Assistance for Needy Families (TANF) program. The first time the Senate took action on such a resolution of disapproval was on April 18, 2018, when it passed S.J.Res. 57 , overturning guidance from the Bureau of Consumer Financial Protection (CFPB) pertaining to indirect auto lending and the Equal Credit Opportunity Act. The House passed S.J.Res. 57 on May 8, 2018, and the President signed it into law on May 21, 2018."], "subsections": []}]}, {"section_title": "Consequences of GAO Opinions", "paragraphs": ["Standing alone, a GAO opinion deciding whether an agency action is a \"rule\" covered by the CRA does not have legal effect. As discussed, GAO's role in determining whether actions are subject to the CRA is not provided for in the CRA, and its opinions are, in essence, advisory. The opinions do not have any immediate effect other than advising Congress as to whether GAO considers an agency action to meet the definition of \"rule\" under the CRA. ", "As a matter of course, however, it appears that the Senate has chosen to treat the GAO opinions as dispositive on the issue. In several cases, individual Senators have stated that once a GAO opinion determining that an agency action is a rule is published in the Congressional Record , the time periods under the CRA commence and the agency action in question becomes subject to the CRA disapproval mechanism. The enactment in May 2018 of a joint resolution of disapproval that was introduced following a GAO opinion regarding a 2013 CFPB bulletin that had not been submitted by the agency further indicates that Congress, in at least some cases, is willing to consider the GAO opinion as a substitute for the agency's submission of a rule to Congress. GAO described this practice in November 2018 in one of its opinions relating to the applicability of the CRA: \"Congress has opted to treat the receipt of a GAO opinion concluding that an agency action is a rule as triggering the statutory provisions that otherwise would have been triggered by the agency's submission. Thus, Congress has used GAO opinions to cure the impediment created by the agency's failure to submit the rule, protecting its review and oversight authorities.\"", "In sum, GAO opinions facilitate congressional review of rules that were not\u2014but should have been\u2014submitted under the CRA. ", "A CRA provision barring judicial review makes it unlikely that a GAO opinion or any other congressional determination stating that a rule is subject to the CRA would be subject to challenge in court. This provision states that \"[n]o determination, finding, action, or omission under this chapter shall be subject to judicial review.\" Accordingly, most courts have refused to review any claims arguing that an agency action should have been submitted to Congress as a rule under the CRA. As a result, the question of whether an agency action is subject to the CRA and its fast-track procedures will likely be settled in the political arena rather than in the courts, and, if Congress continues to treat GAO opinions as determinative, those opinions likely will be the final word on the issue. ", "The provision barring judicial review may mean that one other critical aspect of the CRA may be addressed outside of the courts and through GAO opinions: whether a rule has taken effect. As discussed previously, the CRA states that agencies must submit covered rules to Congress and the Comptroller General \"before a rule can take effect,\" suggesting that a rule may not become operative until the report required by the CRA is submitted to Congress. Indeed, the post-enactment statement inserted into the Congressional Record by the CRA's sponsors stated that, barring two exceptions listed in the CRA, \"any covered rule not submitted to Congress and the Comptroller General will \u2026 not [take] effect until it is submitted pursuant to subsection 801(a)(1)(A).\" However, courts have refused to adjudicate claims arguing that various rules are not in effect because an agency has failed to submit the rules to Congress. Accordingly, it is unlikely that a court would be willing to enforce this provision and declare that a rule lacks effect because it was not submitted to Congress. ", "If an agency has not submitted a disputed action to Congress, it is possible that this inaction was the result of the agency's view that the rule was not subject to the CRA. A GAO opinion stating that an agency action does constitute a rule, while not itself rendering a rule ineffective, may be the first indication to the agency that the rule did not \"take effect\" because the agency did not fulfill the CRA submission requirement. But in the context of agency rules that inherently lack legal effect, the determination that they lack \"effect\" under the CRA may not have much practical impact. In the context of rulemaking, to \"take effect\" usually means that something has become legally effective. As noted, however, the CRA encompasses some non-legislative rules that inherently lack legal effect. The fact that the CRA requires agencies to submit some agency statements that lack legal effect suggests that the term \"effect,\" as used in the CRA's submission requirement, means something other than legal effect. While reviewing notice-and-comment rulemakings, some courts have held that the CRA suspends a rule's operation notwithstanding the fact that a rule may technically have become effective. With respect to rules such as general policy statements that generally lack legal force, however, even if an agency failed to comply with the CRA's submission requirement and erroneously regarded the rule as being operative, it is less likely that the operation of the statement had a discernible and independent effect on the agency's actions."], "subsections": []}, {"section_title": "Summary of GAO Opinions", "paragraphs": ["This section briefly summarizes each of the 21 GAO opinions to date on whether certain agency actions were rules and, thus, eligible for disapproval under the CRA. When GAO appeared to consider one or more of the CRA exceptions to the definition of \"rule\" as fundamental to its analysis, the summaries identify which exception GAO focused on in its opinion. The opinions are listed in chronological order by the date on which GAO issued the opinion. ", "For a more concise summary of each of these opinions, see the table in Appendix B ."], "subsections": [{"section_title": "Department of Agriculture Memorandum Concerning the Emergency Salvage Timber Sale Program220", "paragraphs": ["The Emergency Sale Timber Program was enacted as part of the Emergency Supplemental Appropriations and Rescissions Act of 1995. The program was intended to \"increase the sales of salvage timber in order to remove diseased and damaged trees and improve the health and ecosystems of federally owned forests.\" On July 2, 1996, the Secretary of Agriculture sent a memorandum entitled \"Revised Direction for Emergency Timber Salvage Sales Conducted Under Section 2001(b) of P.L. 104-19 \" to the Chief of the Forest Service, containing \"clarifications in policy\" for the program.", "GAO concluded that the memorandum was a rule under the CRA because some of its contents \"clearly are of general applicability and future effect in interpreting section 2001 of P.L. 104-19 \" and because, contrary to the argument the Department of Agriculture made to GAO when GAO requested its views on the matter, the memorandum \"does not fall within the agency procedure or practice exclusion [in 5 U.S.C. \u00a7804(3)(C)].\""], "subsections": []}, {"section_title": "U.S. Forest Service Tongass National Forest Land and Resource Management Plan224", "paragraphs": ["On May 23, 2007, the Department of Agriculture's Forest Service issued the Tongass National Forest Land and Resource Management Plan, which \"sets forth the management direction for the Tongass Forest and the desired condition of the Forest to be attained through Forest-wide multiple-use goals and objectives.\"", "GAO concluded that the plan was a rule under the CRA and was not excepted under 5 U.S.C. \u00a7804(3) because \"decisions made in the Plan substantially affect non-agency parties and are, therefore, not 'agency procedures.'\" "], "subsections": []}, {"section_title": "American Heritage River Initiative, Created by Executive Order 13061227", "paragraphs": ["President William Clinton signed Executive Order 13061 on September 11, 1997, announcing policies related to the American Heritage River Initiative (AHRI). The AHRI was intended to support American communities' efforts to restore and protect their rivers; the President was to designate, by proclamation, 10 rivers that would take part in the program.", "GAO concluded that Executive Order 13061 was not a rule under the CRA because the President is not an \"agency\" for the purposes of the CRA (or, for that matter, under the APA). As such, actions taken by the President are not subject to the CRA."], "subsections": []}, {"section_title": "Environmental Protection Agency \"Interim Guidance for Investigating Title VI Administrative Complaints Challenging Permits\"230", "paragraphs": ["On February 5, 1998, the Environmental Protection Agency (EPA) issued its \"Interim Guidance for Investigating Title VI Administrative Complaints Challenging Permits.\" According to EPA, the intent of the guidance was to update EPA's procedural and policy framework regarding complaints alleging discrimination in the environmental permitting context.", "GAO concluded that \"considered as a whole, the Interim Guidance clearly affects the rights of non-agency parties\" and thus was a rule under the CRA and not exempt under 5 U.S.C. \u00a7804(3)."], "subsections": []}, {"section_title": "Farm Credit Administration National Charter Initiative232", "paragraphs": ["On May 3, 2000, the Farm Credit Administration (FCA) issued a booklet entitled \"National Charters,\" and then the FCA published the booklet in the Federal Register on July 20, 2000. The booklet \"provide[d] guidance on the national charter application process and the national charter territory. Specifically, the Booklet explain[ed] how a direct lender association can apply for a national charter; what the territory of a national charter will be; and what conditions the FCA will impose in connection with granting a national charter.\"", "GAO concluded that \"we find that the Booklet, while labeled a statement of policy by the FCA, in actuality, meets the requirements of a legislative rule\u2014which should have been issued using informal rulemaking procedures, including notice and comment.\" GAO then concluded that the booklet constituted a rule under the CRA and was not exempt under 5 U.S.C. \u00a7804(3) because the policies established in the booklet would have an effect on non-agency parties, and because statements made within the booklet clearly indicate that \"the FCA recognizes the effect of the Booklet and national charters on other parties.\" "], "subsections": []}, {"section_title": "Department of the Interior Record of Decision \"Trinity River Mainstem Fishery Restoration\"237", "paragraphs": ["The Trinity River Record of Decision (ROD) was issued in December 2000 and documented the Department of the Interior's selection of the actions that it deemed necessary to \"restore and maintain the anadromous fish in the Trinity River.\" The ROD identified the department's selected courses of action for addressing the decreased river flows in the Trinity River Basin.", "GAO concluded that the ROD was a \"rule\" under the CRA because \"its essential purpose is to set policy for the future,\" it was not a rule of agency procedure or practice under 5 U.S.C. \u00a7804(3), and \"it will have broad effect on both rivers' ecosystems and potentially significant economic effect within the Sacramento and Trinity River basins.\""], "subsections": []}, {"section_title": "Department of Veterans Affairs Memorandum Regarding the VA's Marketing Activities to Enroll New Veterans in the VA Health Care System240", "paragraphs": ["On July 18, 2002, the Department of Veterans Affairs (VA) issued a memorandum to network directors regarding the VA's marketing activities to enroll new veterans in the VA health care system. Specifically, the memorandum directed the network directors to no longer engage in trying to enroll new veterans through the use of certain types of activities, such as health fairs, veteran open houses, and enrollment displays at VSO meetings.", "GAO concluded that the memorandum was not a rule under the CRA because it \"is clearly excluded from the coverage of the CRA by one of the enumerated exceptions found in 5 U.S.C. \u00a7804(3)\"\u2014specifically, GAO considered the memorandum to be a statement of agency procedure or practice that did not affect the rights or obligations of non-agency parties. Rather, the memorandum governed internal agency procedures and did not affect the ability of veterans to enroll in the VA health care system."], "subsections": []}, {"section_title": "Department of Veterans Affairs Memorandum Terminating Vendee Loan Program243", "paragraphs": ["On January 23, 2003, the VA issued a memorandum terminating the Vendee Loan Program, a program that allowed the VA to make loans for the sale of foreclosed VA-loan-guaranteed property. In the memorandum, which was addressed to all directors and loan guarantee officers, the VA Secretary announced that it would no longer finance the sale of acquired properties.", "GAO concluded that the memorandum was not a rule under the CRA because it was a rule relating to agency management (i.e., excepted under 5 U.S.C. \u00a7804(3)(B)) or a rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties (i.e., excepted under 5 U.S.C. \u00a7804(3)(C)). GAO noted that \"this is the type of management decision left to the discretion of the Secretary of VA in order to maintain the effective functioning and long-term stability of the program,\" and that \"since the vendee loans were a purely discretionary method for VA to use to dispose of foreclosed properties, the change in the agency's 'organization' or 'practice' does not affect any party's right or obligation.\""], "subsections": []}, {"section_title": "Center for Medicare & Medicaid Services Letter on the State Children's Health Insurance Program245", "paragraphs": ["On August 17, 2007, the Centers for Medicare & Medicaid Services issued a letter to state health officials concerning the State Children's Health Insurance Program (SCHIP). The letter \"purports to clarify the statutory and regulatory requirements concerning prevention of crowd out for states wishing to provide SCHIP coverage to children with effective family incomes in excess of 250 percent of the federal poverty level (FPL) and identifies a number of particular measures that these states should adopt.\"", "GAO concluded that the letter was a rule for the purposes of the CRA because it was a \"statement of general applicability and future effect designed to implement, interpret, or prescribe law or policy with regard to the SCHIP program,\" and because GAO did \"not believe that the August 17 letter comes within any of the exceptions to the definition of rule contained in the Review Act.\""], "subsections": []}, {"section_title": "Department of Health and Human Services Information Memorandum Concerning the Temporary Assistance to Needy Families Program249", "paragraphs": ["On July 12, 2012, the Department of Health and Human Services' Administration for Children and Families issued an information memorandum concerning the Temporary Assistance for Needy Families (TANF) program. The memorandum notified states that HHS was willing to exercise waiver authority over some of the program's work requirements. ", "GAO concluded that the information memorandum was a rule for the purposes of the CRA because it was a \"statement of general applicability and future effect, designed to implement, interpret, or prescribe law or policy with regard to TANF,\" and it did not fall within any of the three exceptions to the definition of a rule. As GAO stated, the memorandum applied to states and therefore was of general applicability, rather than particular applicability; it applied to the states and not agency management or personnel; and it established \"the criteria by which states may apply for waivers from certain requirements of the TANF program. These criteria affect the obligations of the states, which are non-agency parties.\""], "subsections": []}, {"section_title": "Environmental Protection Agency Proposed Rule on Standards of Performance for Greenhouse Gas Emissions from New Stationary Sources: Electric Utility Generating Units253", "paragraphs": ["On January 8, 2014, the Environmental Protection Agency issued a proposed rule entitled \"Standards of Performance for Greenhouse Gas Emissions from New Stationary Sources: Electric Utility Generating Units.\" The proposed rule was intended to establish \"standards for fossil fuel-fired electric steam generating units (utility boilers and Integrated Gasification Combined Cycle (IGCC) units) and for natural gas-fired stationary combustion turbines.\" ", "GAO concluded that the proposed rule in question was not an action that was covered by the CRA, because the CRA was intended to apply only to final rules: \"The issuance of a proposed rule is an interim step in the rulemaking process intended to satisfy APA's notice requirement, and, as such, is not a triggering event for CRA purposes.\" Furthermore, GAO stated \"the precedent provided in our prior opinions underscores that proposed rules are not rules for CRA purposes, and GAO has no role with respect to them.\""], "subsections": []}, {"section_title": "Office of the Comptroller of the Currency, Federal Reserve Board, and Federal Deposit Insurance Corporation Interagency Guidance on Leveraged Lending258", "paragraphs": ["On March 22, 2013, the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, and Federal Deposit Insurance Corporation, issued interagency guidance on leveraged lending. The guidance \"outline[d] for agency-supervised institutions high-level principles related to safe-and-sound leveraged lending activities, including underwriting considerations, assessing and documenting enterprise value, risk management expectations for credits awaiting distribution, stress-testing expectations, pipeline portfolio management, and risk management expectations for exposures held by the institution.\"", "GAO concluded that the leveraged-lending guidance was a rule under the CRA because it was a general statement of policy that had future effect and because GAO could \"readily conclude that the guidance does not fall within any of the three exceptions in the CRA.\" GAO's opinion, which was issued on October 19, 2017, was silent on the matter of the timing of its opinion relative to the guidance, which was issued in 2013."], "subsections": []}, {"section_title": "U.S. Forest Service 2016 Amendment to the Tongass Land and Resource Management Plan262", "paragraphs": ["On December 9, 2016, the U.S. Department of Agriculture's Forest Service approved an amendment to the Tongass Land and Resource Management Plan. The plan identified the uses that may occur in each area of the forest. The Forest Service is required under the National Forest Management Act of 1976 to update forest plans at least every 15 years and potentially more frequently.", "GAO concluded that the amendment to the plan was a rule under the CRA because the amendment \"has a substantial impact on the regulated community such that it is a substantive rather than a procedural rule for purposes of CRA.\" As such, the plan could not be considered to fall within the exception in 5 U.S.C. \u00a7804(3)(C), despite the argument presented by USDA when GAO asked the agency its views on the matter."], "subsections": []}, {"section_title": "Bureau of Land Management Eastern Interior Resource Management Plan266", "paragraphs": ["On December 30, 2016, the Department of the Interior's Bureau of Land Management issued its resource management plan for four areas in Alaska: the Draanjik Planning Area, the Fortymile Planning Area, the Steese Planning Area, and the White Mountains Planning Area. Land management plans such as these are intended to provide specific information for the use of public lands and are required under the Federal Land Policy and Management Act of 1976.", "GAO concluded that the plan was a rule under the CRA because it was of general applicability, had future effect, and was designed to implement, interpret, or prescribe law or policy, and because it did not fit into any of the three exceptions. Of particular relevance appeared to be the exception in 5 U.S.C. \u00a7804(3)(C): \"Because the Eastern Interior Plan designates uses by nonagency parties that may take place in the four areas it governs, it is not a rule of agency organization, procedure or practice.\""], "subsections": []}, {"section_title": "Consumer Financial Protection Bureau Bulletin on Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act270", "paragraphs": ["On March 21, 2013, the Consumer Financial Protection Bureau issued a bulletin on \"Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act.\" The bulletin \"provide[d] guidance about indirect auto lenders' compliance with the fair lending requirements of the Equal Credit Opportunity Act (ECOA) and its implementing regulation, Regulation B.\"", "GAO concluded that the bulletin was a rule under the CRA because it \"is a statement of general applicability, since it applies to all indirect auto lenders; it has future effect; and it is designed to prescribe the Bureau's policy in enforcing fair lending laws,\" and because the bulletin \"does not fall within any of the [CRA's] exceptions.\" GAO's opinion, which was issued on October 19, 2017, was silent on the matter of the timing of its opinion relative to the bulletin, which was issued in 2013."], "subsections": []}, {"section_title": "U.S. Agency for International Development Fact Sheet on Global Health Assistance and Revisions to Standard Provisions for U.S. Nongovernmental Organizations275", "paragraphs": ["On January 23, 2017, President Donald J. Trump released a presidential memorandum establishing his Administration's policy on global health assistance funding, often referred to as the \"Mexico City Policy.\" The policy prohibited assistance to foreign nongovernmental organizations and other entities that perform or promote abortion as a method of family planning. To implement this policy, the Department of State issued a fact sheet entitled \"Protecting Life in Global Health Assistance\" on May 15, 2017, and the U.S. Agency for International Development (USAID) issued revisions to its \"Standard Provisions for U.S. Nongovernmental Organizations\" on March 2, 2017.", "GAO concluded that the two agency actions in question were not rules for the purposes of the CRA because, although the fact sheets were issued by federal agencies, they were merely implementing a decision of the President, under a statute that specifically granted broad policymaking authority to the President. GAO based this decision on a 1989 D.C. Circuit case, DKT Memorial Fund v. Agency for International Development , which held that agency actions implementing the decision of President Ronald Reagan to establish the Mexico City Policy were not reviewable under the APA. The court held that the disputed decision involved \"not a rulemaking by an agency, but rather a policy-making at the highest level by the executive branch,\" concluding that it did not have authority under the APA \"to review the wisdom of policy decisions of the President\" where the relevant statute granted the President broad discretion in the area of foreign affairs. GAO determined that in accordance with this precedent, the agency actions implementing President Trump's policy decision were not subject to the CRA."], "subsections": []}, {"section_title": "Internal Revenue Service Statement on Health Care Reporting Requirements282", "paragraphs": ["In guidance for the 2018 tax filing season, IRS announced on its website that it \"would not accept electronically filed individual income tax returns where the taxpayer does not meet ACA reporting requirements, specifically to report full-year health coverage, claim a coverage exemption, or report a shared responsibility payment (known as 'silent returns').\"", "GAO concluded that the agency statement was not a rule under the CRA because it \"is a rule of agency procedure or practice that does not substantially affect taxpayers' rights or obligations,\" thus falling into the exception in 5 U.S.C. \u00a7804(3)(C). In effect, according to GAO, the \"statement changes the timing of IRS compliance measures, but it does not change IRS's basis for assessing taxpayers' compliance with existing law\u2014namely, the requirement to file a complete tax return and to meet ACA reporting requirements.\""], "subsections": []}, {"section_title": "Social Security Administration Hearings, Appeals, and Litigation Law Manual286", "paragraphs": ["The Social Security Administration's (SSA) Hearings, Appeals, and Litigation Law Manual (HALLEX) describes how SSA will process and adjudicate claims for disability benefits under the Social Security Act. Two sections of the manual stated a policy under which an SSA adjudicator could not rely on information from the Internet, including from social media networks, in deciding a claim for benefits (with two exceptions). ", "GAO concluded that these two sections of HALLEX were not rules under the CRA because they were merely \"procedures that govern the use of evidence from the Internet during those proceedings\" and they \"do not impose new burdens on claimants or alter claimants' rights or obligations during the SSA appeal process.\" Thus, GAO concluded that \"the HALLEX sections are procedural rules that meet the [5 U.S.C. \u00a7804(3)(C)] exception.\" "], "subsections": []}, {"section_title": "Internal Revenue Service Revenue Procedure 2018-38290", "paragraphs": ["On July 26, 2018, the IRS issued Revenue Procedure 2018-38, which \"modifies the information certain tax-exempt entities are required to report to IRS on their annual returns.\" On July 30, 2018, the IRS submitted Revenue Procedure 2018-38 to Congress under the CRA. On September 7, 2018, then-Senator Orrin Hatch submitted a request to GAO seeking its opinion on whether the revenue procedure was covered by the CRA's definition of \"rule.\" The IRS had apparently made the determination, despite having submitted the document under the CRA, that the document was not covered by the CRA. Rather, the IRS argued that it had submitted the rule \"out of an abundance of caution\" and to \"allow Congress to decide whether it is a rule by consulting GAO.\"", "The circumstances surrounding this GAO opinion were somewhat unique, because the IRS had already submitted the revenue procedure to Congress under the CRA by the time the question was raised as to whether the revenue procedure was covered by the definition of \"rule.\" This appeared to be the first time that GAO had considered the application of the CRA when an agency submitted a rule and later made the argument that the rule was not covered.", "In its opinion, GAO primarily addressed the issue of whether the submission of the rule was sufficient to trigger the CRA's timelines rather than whether the revenue procedure met the statutory definition of \"rule.\" GAO stated in its opinion that the purpose of the GAO opinions is \"to cure the impediment created by the agency's failure to submit the rule, protecting [Congress's] review and oversight authorities,\" and, therefore, because the IRS had already submitted the rule, a GAO opinion on the CRA's applicability would be unnecessary.", "Furthermore, GAO confirmed that the IRS revenue procedure was available for congressional review under the CRA because the IRS had already submitted it: \"IRS's submission triggered Congress's review and oversight powers under CRA, starting with the transmittal of the rule to the committees of jurisdiction.\" GAO also stated, \"As Congress is not deprived of exercising its powers under CRA, there is no impediment to those powers that a GAO opinion might cure. We, therefore, take no position on whether the revenue procedure is a rule otherwise.\""], "subsections": []}, {"section_title": "Department of Justice Memorandum to Federal Prosecutors on Zero-Tolerance Policy297", "paragraphs": ["On April 6, 2018, the Attorney General issued a memorandum directing federal prosecutors to adopt a zero-tolerance policy for illegal border crossings at the southwestern border of the United States. ", "GAO concluded that the April 2018 memorandum was not a rule under the CRA because it was a rule of agency organization, procedure, or practice, and it did not change individuals' rights or obligations: \"The rights and obligations in question are prescribed by existing immigration laws and remain unchanged by the agency's internal enforcement procedures at issue here.\" Thus, GAO concluded that the memorandum was covered by the exception in 5 U.S.C. \u00a7804(3)(C)."], "subsections": []}, {"section_title": "Department of Commerce Memorandum Regarding a Citizenship Question on the 2020 Census300", "paragraphs": ["In March 2018, the Secretary of Commerce issued a memorandum to the Under Secretary of Commerce for Economic Affairs justifying the Secretary's decision to add a citizenship question to the 2020 census. According to GAO, the memorandum \"described a December 12, 2017 request from the Department of Justice (DOJ) that the Census Bureau include a citizenship question on the 2020 census\" and directed the Under Secretary to include such a question. Soon after the Secretary issued the memorandum, pursuant to statutory requirements, the Census Bureau delivered a report to Congress containing its planned questions for the 2020 census, including the citizenship question. ", "GAO concluded that the memorandum was not a rule under the CRA, stating that \"it was direction from a supervisor to a subordinate in conjunction with the statutory process whereby the Secretary informs Congress of the questions that will be on the census.\u2026 As such, the memorandum does not meet CRA's definition of a rule because it was not designed to implement, interpret, or prescribe law or policy.\" Because the memorandum did not meet the definition of \"rule\" under section 551 of the APA, GAO did not discuss whether the memorandum would have been covered by any of the exceptions.", "Appendix A. Submission Form for Rules Under the\u00a0CRA", "Appendix B. Summary of GAO Opinions"], "subsections": []}]}]}]}}
{"id": "R45410", "title": "The Violence Against Women Act (VAWA): Historical Overview, Funding, and Reauthorization", "released_date": "2019-04-23T00:00:00", "summary": ["The Violence Against Women Act (VAWA; Title IV of P.L. 103-322) was originally enacted in 1994. It addressed congressional concerns about violent crime, and violence against women in particular, in several ways. It allowed for enhanced sentencing of repeat federal sex offenders; mandated restitution to victims of specified federal sex offenses; and authorized grants to state, local, and tribal law enforcement entities to investigate and prosecute violent crimes against women, among other things. VAWA has been reauthorized three times since its original enactment. Most recently, Congress passed and President Obama signed the Violence Against Women Reauthorization Act of 2013 (P.L. 113-4), which reauthorized most VAWA programs through FY2018, among other things.", "The fundamental goals of VAWA are to prevent violent crime; respond to the needs of crime victims; learn more about crime; and change public attitudes through a collaborative effort by the criminal justice system, social service agencies, research organizations, schools, public health organizations, and private organizations. The federal government tries to achieve these goals primarily through federal grant programs that provide funding to state, tribal, territorial, and local governments; nonprofit organizations; and universities.", "VAWA programs generally address domestic violence, sexual assault, dating violence, and stalking\u2014crimes for which the risk of victimization is highest for women\u2014although some VAWA programs address additional crimes. VAWA grant programs largely address the criminal justice system and community response to these crimes, but certain programs address prevention as well.", "The Office on Violence Against Women (OVW) administers the majority of VAWA-authorized programs, while other federal agencies, including the Centers for Disease Control and Prevention (CDC) and the Office of Justice Programs (OJP), also manage VAWA programs. Since its creation in 1995 through FY2018, OVW has awarded more than $8 billion in grants and cooperative agreements to state, tribal, and local governments, nonprofit organizations, and universities. In FY2019, approximately $559 million was appropriated for VAWA-authorized programs administered by OVW, OJP, and CDC. While several extensions of authorization for VAWA were provided through FY2019 continuing appropriations, authorizations for appropriations for all VAWA programs have since expired. However, all VAWA programs funded in FY2018 have been funded in FY2019 (select programs at slightly higher levels), and thus far it appears that the expiration of authorizations has not impacted the continuing operation of VAWA programs. The Administration has requested FY2020 funding for all VAWA-authorized programs funded in FY2019.", "There are several issues that Congress may consider in efforts to reauthorize VAWA. These include, but are not limited to, improvements to data collection on domestic violence and stalking or the rape kit backlog; assessing the implementation and future direction of tribal jurisdiction over non-tribal members, including potentially adding new crimes under VAWA; new approaches for law enforcement in assisting victims; and enforcement of the federal prohibition on firearms for those convicted of a misdemeanor crime of domestic violence and those who are subject to a domestic violence protective order. Congress may also consider further changes to VAWA programs.", "In the 116th Congress, the House passed the Violence Against Women Reauthorization Act of 2019 (H.R. 1585). Among other things, it would reauthorize funding for VAWA programs and authorize new programs; amend and add definitions used for VAWA programs; amend federal criminal law relating to firearms, custodial rape, and stalking; and expand tribal jurisdiction over certain crimes committed on tribal lands."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Violence Against Women Act (VAWA) was originally enacted in 1994 ( P.L. 103-322 ). It addressed congressional concerns about violent crime, and violence against women in particular, in several ways. Among other things, it allowed for enhanced sentencing of repeat federal sex offenders; mandated restitution to victims of specified federal sex offenses; and authorized grants to state, local, and tribal law enforcement entities to investigate and prosecute violent crimes against women. ", "This report provides a brief history of VAWA and an overview of the crimes addressed through the act. It includes brief descriptions of earlier VAWA reauthorizations and a more-detailed description of the most recent reauthorization in 2013. It also briefly addresses reauthorization activity in the 116 th Congress. The report concludes with a discussion of VAWA programs and a five-year history of funding from FY2015 through FY2019."], "subsections": []}, {"section_title": "Origins of VAWA", "paragraphs": ["The enactment of VAWA was ultimately spurred by decades of growing unease over a rising violent crime rate and a focus on women as crime victims. In the 1960s, the violent crime rate rose fairly steadily\u2014it more than doubled from 1960 (160.9 per 100,000) to 1969 (328.7 per 100,000) \u2014igniting concern from both the public and the federal government. Adding to this was the concern about violent crimes committed against women. In the 1970s, grassroots organizations began to stress the need for attitudinal change among both the public and the law enforcement community regarding violence against women. ", "In the 1970s and 1980s, researchers increased their attention on the issue of violence against women as well. In one study, researchers collected data on family violence and attributed declines in spousal assault to heightened awareness of the issue in men as well as the criminal justice system. The public and the criminal justice system were beginning to view family violence as a crime rather than a private family matter. ", "In 1984, Congress and President Reagan enacted the Family Violence Prevention and Services Act (FVPSA, P.L. 98-457 ) to assist states in preventing incidents of family violence and to provide shelter and related assistance to victims and their dependents. While FVPSA authorized programs similar to those discussed in this report and FVPSA reauthorizations subsequently reauthorized programs that were originally created by VAWA, such as the National Domestic Violence Hotline, it is a separate piece of legislation and beyond the scope of this report.", "In 1994, Congress passed and President Clinton signed into law, the Violent Crime Control and Law Enforcement Act of 1994 ( P.L. 103-322 ), which included VAWA as Title IV. The act created an unprecedented number of programs geared toward helping local law enforcement fight violent crime and providing services to victims of violent crime, among other things. In their opening remarks on VAWA in 1994, Senators Barbara Boxer and Joseph Biden highlighted the insufficient response to violence against women by police and prosecutors. The shortfalls of legal responses and the need for a change in attitudes toward violence against women were primary reasons cited for the passage of VAWA. ", "VAWA has been reauthorized three times since its original enactment. Most recently, Congress passed and President Obama signed the Violence Against Women Reauthorization Act of 2013 ( P.L. 113-4 ), which reauthorized most of the programs under VAWA, among other things. In addition, this VAWA reauthorization amended and authorized appropriations for the Trafficking Victims Protection Act of 2000, enhanced measures to combat trafficking in persons, and amended VAWA grant purpose areas to include sex trafficking. Moreover, P.L. 113-4 gave American Indian tribes authority to enforce tribal laws pertaining to domestic violence and related crimes against non-tribal members, and established a nondiscrimination provision for VAWA grant programs. The reauthorization also included new provisions to address states' rape kit backlogs. "], "subsections": [{"section_title": "Violence Against Women Act of 1994", "paragraphs": ["The Violence Against Women Act of 1994, among other things, (1) enhanced investigations and prosecutions of sex offenses; (2) provided for a number of grant programs to address the issue of violence against women from a variety of angles, including law enforcement, public and private entities and service providers, and victims of crime; and (3) established immigration provisions for abused aliens. The sections below highlight examples of these VAWA provisions."], "subsections": [{"section_title": "Investigations and Prosecutions", "paragraphs": ["As originally enacted, VAWA impacted federal investigations and prosecutions of cases involving violence against women in a number of ways. For instance, it established new offenses and penalties for the violation of a protection order or stalking in which an abuser crossed a state line to injure or harass another, or forced a victim to cross a state line under duress and then physically harmed the victim in the course of a violent crime. It added new provisions to require states, tribes, and territories to enforce protection orders issued by other states, tribes, and territories. VAWA allowed for enhanced sentencing of repeat federal sex offenders, and it also authorized funding for the Attorney General to develop training programs to assist probation and parole officers in working with released sex offenders.", "In addition, VAWA established a new requirement for pretrial detention of defendants in federal sex offense or child pornography felony cases. It also modified the Federal Rules of Evidence to include new procedures specifying that, with few exceptions, a victim's past sexual behavior was not admissible in federal criminal and civil cases of sexual misconduct. Moreover, VAWA directed the Attorney General to study states' actions to ensure confidentiality between sexual assault or domestic violence victims and their counselors.", "VAWA mandated restitution to victims of specified federal sex offenses, particularly sexual abuse, sexual exploitation, and other abuse of children. It also established new provisions such as a civil remedy that allows victims of sexual assault to seek civil penalties from their alleged assailants, and a provision that allows rape victims to demand that their alleged assailants be tested for HIV."], "subsections": []}, {"section_title": "Grant Programs", "paragraphs": ["The original VAWA created a number of grant programs for a range of activities, including programs aimed at (1) preventing domestic violence and sexual assault; (2) encouraging collaboration among law enforcement, judicial personnel, and public/private sector providers with respect to services for victims of domestic violence and related crimes; (3) investigating and prosecuting domestic violence and related crimes; (4) encouraging states, tribes, and local governments to treat domestic violence as a serious crime and implement arrest policies; (5) bolstering investigations and prosecutions of domestic violence and child abuse in rural states; and (6) preventing crime in public transportation as well as public and national parks.", "VAWA created new and reauthorized grants under FVPSA. These included grants for youth education on domestic violence and intimate partner violence as well as grants for community intervention and prevention programs. It authorized the grant for the National Domestic Violence Hotline and authorized funding for its operation. VAWA also reauthorized funding for battered women's shelters.", "VAWA authorized research and education grants for judges and court personnel in federal court circuits to gain a better understanding of the nature and the extent of gender bias in the federal courts. It additionally authorized grants for developing model programs for training of state and tribal judges and personnel on laws on rape, sexual assault, domestic violence, and other crimes of violence motivated by the victim's gender. It also authorized a new grant to be used for assisting state and local governments with entering data on stalking and domestic violence into local, state, and national databases\u2014such as the National Crime Information Center (NCIC) database.", "VAWA authorized the expansion of grants under the Public Health Service Act to include rape prevention education. Additionally, it expanded the purposes of the Runaway and Homeless Youth Act to allow for grant funding to assist youth at risk of or who have been subjected to sexual abuse. VAWA reauthorized the Court-Appointed Special Advocate Program and the Child Abuse Training Programs for Judicial Personnel and Practitioners. It also authorized funding for Grants for Televised Testimony by Victims of Child Abuse."], "subsections": []}, {"section_title": "Immigration Provisions17", "paragraphs": ["VAWA of 1994 addressed immigration-related problems faced by battered aliens. It included three provisions related to abused aliens: self-petitioning by abused foreign national spouses and their children, required evidence for demonstrating abuse, and suspension of deportation and cancellation of removal. These petitions allowed battered foreign national spouses and their children to essentially substitute a self-petition for lawful status in place of a petition for lawful status that was based on sponsorship by the abusive spouse, clarified the evidence required for joint petition waivers, and established requirements for battered foreign national spouses and children to stay deportation."], "subsections": []}, {"section_title": "Other VAWA Requirements", "paragraphs": ["Beyond the criminal justice improvements, grant programs, and immigration provisions, VAWA included provisions for several other activities, including", "requiring that the U.S. Postal Service take measures to ensure confidentiality of domestic violence shelters' and abused persons' addresses; mandating federal research by the Attorney General, National Academy of Sciences, and Secretary of Health and Human Services to increase the government's understanding of violence against women; and requesting special studies on campus sexual assault and battered women's syndrome."], "subsections": []}]}, {"section_title": "Office on Violence Against Women", "paragraphs": ["In 1995, the Office on Violence Against Women (OVW) was administratively created within the Department of Justice (DOJ) to administer grants authorized under VAWA. In 2002, OVW was codified through Title IV of the 21 st Century Department of Justice Appropriations Authorization Act ( P.L. 107-273 ). Since its creation through FY2018, OVW has awarded more than $8 billion in grants and cooperative agreements to state, tribal, and local governments, nonprofit organizations, and universities. While OVW administers the majority of VAWA-authorized grants, other federal agencies, including the Centers for Disease Control and Prevention (CDC) and the Office of Justice Programs (OJP), also manage VAWA programs."], "subsections": []}]}, {"section_title": "Categories of Crime Addressed through VAWA", "paragraphs": ["VAWA programs generally address domestic violence, sexual assault, dating violence, and stalking, although some VAWA programs address additional crimes. VAWA grant programs largely address the criminal justice system and community response to these crimes, but certain programs address prevention as well. These crimes involve a wide range of victim demographics, but the risk of victimization is highest for women.", "Public concern over violence against women prompted the original passage and enactment of VAWA. As such, VAWA legislation and programs have historically emphasized women victims. More recently, however, there has been a focus on ensuring that the needs of all victims are met through provisions of VAWA programs. Of note, while the title of the act and some headings and general purpose areas refer to women only, most VAWA grant purpose areas are not specific to women.", "National victimization data on domestic violence, sexual assault, dating violence, and stalking are available from two surveys, the National Crime Victimization Survey (NCVS) and the Youth Risk Behavior Surveillance System. Offense data are available from the Federal Bureau of Investigation's (FBI's) Uniform Crime Reporting (UCR) Program. UCR data differ from victimization data because the UCR data describe crimes that were reported to law enforcement, while victimization data include crimes that might not have been reported to law enforcement. Due to differences in what they are trying to measure, victimization data are not directly comparable to UCR data."], "subsections": [{"section_title": "Domestic Violence", "paragraphs": ["Domestic violence can take many forms, but is often labeled as family violence or intimate partner violence. Under VAWA, domestic violence is generally interpreted as intimate partner violence; it includes felony or misdemeanor crimes committed by spouses or ex-spouses, boyfriends or girlfriends, and ex-boyfriends or ex-girlfriends. Crimes may include sexual assault, simple or aggravated assault, and homicide. As defined in statute for the purposes of VAWA grant programs, domestic violence includes ", "felony or misdemeanor crimes of violence committed by a current or former spouse or intimate partner of the victim, by a person with whom the victim shares a child in common, by a person who is cohabitating with or has cohabitated with the victim as a spouse or intimate partner, by a person similarly situated to a spouse of the victim under the domestic or family violence laws of the jurisdiction receiving grant monies, or by any other person against an adult or youth victim who is protected from that person's acts under the domestic or family violence laws of the jurisdiction.", "From 1993 to 2017, the rate of serious intimate partner violence victimization declined by 70% for females, from 5.7 victimizations per 1,000 females aged 12 and older in 1993 to 1.7 per 1,000 in 2017; and 87% for males, from 1.5 victimizations per 1,000 males aged 12 and older in 1993 to 0.2 per 1,000 in 2017. In 2015, a survey conducted by the CDC included questions about lifetime victimization. The CDC estimates that 21.4% of women and 14.9% of men have experienced severe physical violence by an intimate partner in their lifetime."], "subsections": [{"section_title": "Intimate Partner Homicide", "paragraphs": ["Since peaking in the early 1990s, the violent crime rate (including homicide and intimate partner homicide) has declined. Although it has fluctuated over the last several years, the violent crime rate remains far lower now than it was in the 1990s. In examining the initial decline in the 1990s and early 2000s, researchers studied a range of social factors that may influence homicide rates and suggested possible reasons for the decline in the intimate partner homicide rate. For instance, most intimate partner homicides involve married couples; as such, some researchers suggested the decline in marriage rates among young adults is a contributing factor in the decline in intimate partner homicide rates. Additionally, divorce and separation rates increased. Fewer marriages may result in less exposure to abusive partners, and may suggest that those who do marry are more selective in choosing a partner.", "Overall, homicide is committed largely by males, mostly victimizing other males. In 2017, males made up 84% of all offenders and 78% of all homicide victims; however, 78% of all intimate partner homicide victims were female. From 2003-2014, the CDC found that approximately 55% of female homicides for which circumstances were known were related to intimate partner violence. "], "subsections": []}]}, {"section_title": "Sexual Assault", "paragraphs": ["Sexual assault may include the crimes of forcible rape, attempted forcible rape, assault with intent to rape, statutory rape, and other sexual offenses. For VAWA programs, sexual assault is defined as \"any nonconsensual sexual act proscribed by Federal, tribal, or State law, including when the victim lacks capacity to consent.\" Sexual assault is termed as \"sexual abuse\" and \"aggravated sexual abuse\" under federal criminal law. Of note, intimate partner violence can, and often does, include sexual assault.", "Until 2012, and for the purposes of its UCR program, the FBI defined forcible rape as \"the carnal knowledge of a female forcibly and against her will.\" In January 2012, the FBI revised its definition of rape , and 2013-2017 rape data rely on the following definition: \"penetration, no matter how slight, of the vagina or anus with any body part or object, or oral penetration by a sex organ of another person, without the consent of the victim.\" The new, more inclusive definition", "includes either male or female victims or offenders, includes instances in which the victim is incapable of giving consent because of temporary or permanent mental or physical incapacity, and reflects the various forms of sexual penetration understood to be rape. ", "Both the legacy definition and the current definition exclude statutory rape\u2014nonforcible sexual intercourse with or between individuals, at least one of whom is younger than the age of consent.", "According to UCR data, and applying the revised definition of rape, 135,755 forcible rapes were reported to law enforcement in 2017\u2014a rate of 41.7 per 100,000 people. From 2013-2017, the number of rapes (revised definition) increased by 19.4%, and the rate increased each year, from 35.9 per 100,000 in 2013 to 41.7 per 100,000 in 2017.", "Using the legacy definition, 99,856 forcible rapes were reported to law enforcement in 2017. Since 1990, when 102,555 forcible rapes (previous definition) were reported, the number has fluctuated but has generally declined, though it also has increased each year since 2013 (see Figure 1 ).", "According to statistics from the National Crime Victimization Survey (NCVS), it is estimated that there were 393,980 sexual assaults (1.4 per 1,000 aged 12 and older) in 2017\u2014which is nearly triple the number of forcible rapes reported in the 2017 UCR. As noted, NCVS estimates are not directly comparable to UCR program data because victimizations are self-reported during interviews and may not have been reported to law enforcement. The UCR and NCVS also measure rape and sexual assault differently\u2014among other variations, the NCVS combines rape and sexual assault into one category.", "As shown in Figure 2 , and similar to UCR data, NCVS data reflect a decline in sexual assaults since 1993; however, the victimization survey went through a redesign in 2006 and 2016, so data over time should be interpreted with caution. Figure 2 demonstrates that a fairly low percentage of rape/sexual assaults are reported to police each year. In 2017, it is estimated that 40% of rape or sexual assault incidents were reported to the police\u2014nearly double the percentage that were reported in 2016."], "subsections": []}, {"section_title": "Dating Violence", "paragraphs": ["Under VAWA, dating violence refers to \"violence committed by a person who is or has been in a social relationship of a romantic or intimate nature with the victim.\" The relationship between the offender and victim is determined based on the following factors: (1) the length of the relationship, (2) the type of relationship, and (3) the frequency of interaction between the persons involved in the relationship.", "While teenagers are not the only demographic subject to dating violence, data reports on dating violence usually refer to teenagers as the relevant age demographic. According to the CDC's 2017 Youth Risk Behavior Survey , approximately 8.0% of high school students who dated or went out with someone during the 12 months before the survey reported being \"hit, slammed into something, or injured with an object or weapon on purpose by someone they were dating or going out with\" one or more times in the past year. The prevalence of physical dating violence victimization was higher among female students (9.1%) than male students (6.5%). The overall percentage of high school students experiencing physical dating violence has declined since the CDC first included the question in its 2013 survey. In 2013, approximately 10.3% of high school students reported being a victim of physical dating violence; in 2015, it was 9.6%; and in 2017, it was 8.0%. "], "subsections": []}, {"section_title": "Stalking", "paragraphs": ["All 50 states, the District of Columbia, and U.S. territories have stalking laws, though they vary in definition. Federal law makes it unlawful to travel across state lines or use the mail or computer and electronic communication services with the intent to kill, injure, harass, or intimidate another person, and as a result, place that person in reasonable fear of death or serious bodily injury or cause substantial emotional distress to that person, a spouse or intimate partner of that person, or a member of that person's family.", "The NCVS Supplemental Victimization Survey (SVS) defines stalking as \"a course of conduct directed at a specific person that would cause a reasonable person to feel fear.\" The SVS measures these unwanted stalking behaviors:", "making unwanted phone calls; sending unsolicited or unwanted letters or emails; following or spying on; showing up at places without a legitimate reason; waiting at places for the victim; leaving unwanted items, presents, or flowers; or posting information or spreading rumors about the victim on the internet, in a public place, or by word of mouth.", "According to the NCVS SVS, an estimated 3.3 million individuals aged 18 and older were victims of stalking in 2006. More females than males were stalked. Also, the percentage of individuals targeted decreased with age; those aged 18-24 experienced the highest incidence of stalking. ", "The CDC measures stalking differently than the NCVS. For the purposes of CDC reports, a person is considered a stalking victim \"if they experienced multiple stalking tactics or a single stalking tactic multiple times by the same perpetrator and felt very fearful, or believed that they or someone close to them would be harmed or killed as a result of the perpetrator's behavior.\" The CDC measured the following stalking tactics:", "unwanted phone calls, voice or text messages, hang-ups; unwanted emails, instant messages, messages through social media; unwanted cards, letters, flowers, or presents; watching or following from a distance, spying with a listening device, camera, or global positioning system (GPS); approaching or showing up in places, such as the victim's home, workplace, or school, when it was unwanted; leaving strange or potentially threatening items for the victim to find; sneaking into victim's home or car and doing things to scare the victim or let the victim know the perpetrator had been there.", "The CDC asked about two additional tactics after respondents were identified as possible stalking victims:", "damaged personal property or belongings, such as in their home or car; and made threats of physical harm.", "According to 2015 data from the CDC, 16.0% of women (19.1 million) and 5.8% of men (6.4 million) have been stalked by an intimate partner in their lifetimes. In the 12 months preceding the survey, approximately 4.5 million women and 2.1 million men were victims of stalking. See Figure 3 ."], "subsections": []}]}, {"section_title": "Federal Programs Authorized by VAWA", "paragraphs": ["The fundamental goals of VAWA are to prevent violent crime; respond to the needs of crime victims; learn more about crime; and change public attitudes through a collaborative effort by the criminal justice system, social service agencies, research organizations, schools, public health organizations, and private organizations. The federal government tries to achieve these goals primarily through federal grant programs that provide funding to state, tribal, territorial, and local governments; nonprofit organizations; and universities.", "As previously mentioned, OVW administers the majority of VAWA-authorized programs, while other federal agencies, including OJP and the CDC, also manage VAWA programs. Since its creation in 1995 through FY2018, OVW has awarded more than $8 billion in grants and cooperative agreements to state, tribal, and local governments; nonprofit organizations; and universities."], "subsections": [{"section_title": "FY2018\u2013FY2019 Appropriations", "paragraphs": ["In FY2018 and FY2019, $553 million and $559 million, respectively, were appropriated for VAWA programs administered by OVW, OJP, and the CDC, as shown in Table 1 . For program descriptions, authorization levels, and a five-year history of appropriations, see the Appendix ."], "subsections": []}, {"section_title": "FY2020 Appropriations", "paragraphs": ["While authorizations of appropriations for VAWA programs have expired, the Administration has requested FY2020 funding for VAWA-authorized programs. The Administration's budget request proposes to fund OVW at $492.5 million for FY2020 (a 1% decrease from FY2019), all of which would be derived from a transfer from the Crime Victims Fund. The Administration requests $9.0 million for OJP (a 25% decrease from FY2019) for the Court Appointed Special Advocates (CASA). Also for FY2020, the Administration requests level funding ($49.4 million) for the Rape Prevention and Education Program at the CDC."], "subsections": []}]}, {"section_title": "Past Reauthorizations and Changes to VAWA", "paragraphs": ["Since it was enacted in 1994, VAWA has been reauthorized three times. Of note, the reauthorizations in 2000 and 2005 had broad bipartisan support, while the most recent reauthorization in 2013 had bipartisan support but faced greater opposition. This section will provide comparatively more detail for the 2013 reauthorization because it was the most recent and some issues may remain relevant to current reauthorization discussions."], "subsections": [{"section_title": "2000 Reauthorization", "paragraphs": ["In 2000, Congress reauthorized VAWA through the Victims of Trafficking and Violence Protection Act ( P.L. 106-386 ; VAWA 2000). Modifications included additional protections for battered nonimmigrants, a new program for victims of domestic violence, dating violence, sexual assault, and stalking in need of transitional housing, a requirement for grant recipients to submit reports on the effectiveness of programs, new programs designed to protect elderly and disabled women, mandatory funds to be used exclusively for rape prevention and education programs, and inclusion of victims of dating violence. ", "VAWA 2000 amended interstate stalking and domestic violence law to include (1) a person who travels in interstate or foreign commerce with the intent to kill, injure, harass, or intimidate a spouse or intimate partner, and who in the course of such travel commits or attempts to commit a crime of violence against the spouse or intimate partner; (2) a person who causes a spouse or intimate partner to travel in interstate or foreign commerce by force or coercion and in the course of such travel commits or attempts to commit a crime of violence against the spouse or intimate partner; (3) a person who travels in interstate or foreign commerce with the intent of violating a protection order or causes a person to travel in interstate or foreign commerce by force or coercion and violates a protection order; and (4) a person who uses the mail or any facility of interstate or foreign commerce to engage in a course of conduct that would place a person in reasonable fear of harm to themselves or their immediate family or intimate partner. "], "subsections": []}, {"section_title": "2005 Reauthorization", "paragraphs": ["In 2005, Congress reauthorized VAWA through the Violence Against Women and Department of Justice Reauthorization Act ( P.L. 109-162 ; VAWA 2005). VAWA 2005 added protections for battered and/or trafficked nonimmigrants, programs for American Indian victims, and programs designed to improve the public health response to domestic violence. The act emphasized collaboration among law enforcement; health and housing professionals; and women, men, and youth alliances, and it encourages community initiatives to address these issues. ", "This reauthorization enhanced penalties for repeat stalking offenders and expanded the federal criminal definition of stalking to include cyberstalking. It also amended the federal criminal code to revise the definition of the crime of interstate stalking to (1) include placing someone under surveillance with the intent to kill, injure, harass, or intimidate that person; and (2) require consideration of substantial emotional harm to the stalking victim."], "subsections": []}, {"section_title": "2013 Reauthorization", "paragraphs": ["Authorization for appropriations for the programs under VAWA expired in 2011; however, programs continued to receive appropriations in FY2012 and FY2013. In 2013, the 113 th Congress reauthorized VAWA through the Violence Against Women Reauthorization Act of 2013 ( P.L. 113-4 ; VAWA 2013). Most VAWA grants were reauthorized from FY2014 through FY2018. This section briefly describes provisions of VAWA 2013."], "subsections": [{"section_title": "Consolidation of Grant Programs", "paragraphs": ["VAWA 2013 reauthorized most VAWA grant programs and authorized appropriations at a lower level, in general. It consolidated several VAWA grant programs, and in doing so authorized new grant programs. These actions are summarized below.", "The Grants to Support Families in the Justice System program was created by consolidating two previously authorized programs: (1) the Safe Havens for Children program (also referred to as Supervised Visitation), and (2) the Court Training and Improvements program. The purpose of this program is to improve the civil and criminal justice systems' responses to families with a history of domestic violence, dating violence, sexual assault, or stalking, or in cases involving allegations of child sexual abuse. The Creating Hope Through Outreach, Options, Services, and Education for Children and Youth (CHOOSE Children & Youth) was created by consolidating two previously authorized programs: (1) Services to Advocate for and Respond to Youth (also referred to as Youth Services) and (2) Grants to Combat Domestic Violence, Dating Violence, Sexual Assault, and Stalking in Middle and High Schools (also referred to as Supporting Teens through Education and Protection, or STEP). The purpose of this program is to enhance the safety of youth and children who are victims of or exposed to domestic violence, dating violence, sexual assault, stalking, or sex trafficking. The program also aims to prevent future violence. The Saving Money and Reducing Tragedies Through Prevention (SMART Prevention) was created by consolidating two previously authorized programs: (1) Engaging Men and Youth in Prevention and Grants to Assist Children and (2) Youth Exposed to Violence. The SMART Prevention program aims to prevent domestic violence, sexual assault, dating violence, and stalking through awareness and education programs, and also through assisting children who have been exposed to violence and abuse. In addition, this program aims to prevent violence by engaging men as leaders and role models. The Grants to Strengthen the Healthcare System's Response to Domestic Violence, Dating Violence, Sexual Assault, and Stalking was created using the purpose areas of three previously unfunded programs\u2014(1) Interdisciplinary Training and Education on Domestic Violence and Other Types of Violence and Abuse, (2) Research on Effective Interventions in the Health Care Setting, and (3) Grants to Foster Public Health Responses to Domestic Violence, Dating Violence, Sexual Assault, and Stalking\u2014these programs were eliminated. The purpose of this program is to improve training and education for health professionals in preventing and responding to domestic violence, dating violence, sexual assault, and stalking."], "subsections": []}, {"section_title": "VAWA Grant Provisions", "paragraphs": ["VAWA 2013 established new provisions for all VAWA grant programs. It established a nondiscrimination provision to ensure that victims are not denied services and are not subjected to discrimination based on actual or perceived race, color, religion, national origin, sex, gender identity, sexual orientation, or disability. It also enhanced protection of personally identifiable information of victims and specified the type of information that may be shared by grantees and subgrantees. It also required that any grantee or subgrantee that provides legal assistance must comply with certifications required under the Legal Assistance for Victims Grant Program.", "The 2013 reauthorization also added, modified, or expanded several definitions of terms in VAWA. Examples include the following:", "The definition of domestic violence was revised to specifically include \"intimate partners\" in addition to \"current and former spouses.\" The term linguistically was removed from the Culturally Specific Services Grant and the definition of \"culturally specific services\" was amended to address the needs of culturally specific communities. With respect to providing VAWA-related services, the act added the terms population specific services and population specific organizations , which focus on \"members of a specific underserved population.\" Underserved populations was redefined to include those who may be discriminated against based on religion , sexual orientation, or gender identity. The definition of cyberstalking was expanded to include use of any \"electronic communication device or electronic communication service or electronic communication system of interstate commerce.\" A definition of rape crisis center was added, meaning \"a nonprofit, nongovernmental, or tribal organization, or governmental entity in a State other than a Territory that provides intervention and related assistance ... to victims of sexual assault without regard to their age. In the case of a governmental entity, the entity may not be part of the criminal justice system ... and must be able to offer a comparable level of confidentiality as a nonprofit entity that provides similar victim services.\" Individual in later life was defined as a person who is 50 years of age or older. Youth was defined as a person who is 11 to 24 years of age. The definition of rural state was revised to include states with more densely populated rural areas than under the prior definition."], "subsections": []}, {"section_title": "Accountability of Grantees", "paragraphs": ["VAWA 2013 imposed new accountability provisions, including an audit requirement and mandatory exclusion from eligibility if a grantee is found to have an unresolved audit finding. Additionally, it required OVW to establish a biennial conferral process with state and tribal coalitions and technical assistance providers that receive OVW funding. It prohibited conferences funded through cooperative agreements from using more than $20,000 in funding without prior written approval by DOJ officials."], "subsections": []}, {"section_title": "Sexual Assault and Rape Kit Backlog", "paragraphs": ["VAWA 2013 amended the DNA Analysis Backlog Elimination Act of 2000 ( P.L. 106-546 ) to strengthen audit requirements for sexual assault evidence backlogs. It also required that for each fiscal year through FY2018, not less than 75% of the total Debbie Smith grant amounts be awarded to carry out DNA analyses of samples from crime scenes for inclusion in the Combined DNA Index System (CODIS) and to increase the capacity of state or local government laboratories to carry out DNA analyses. ", "Additionally, VAWA 2013 expanded the purpose areas of several VAWA grants to respond to the needs of sexual assault survivors by addressing rape kit backlogs. It also established a new requirement that at least 20% of funds within the STOP (Services, Training, Officers, Prosecutors) program and 25% of funds within the Grants to Encourage Arrest Policies and Enforce Protection Orders program be directed to programs that meaningfully address sexual assault."], "subsections": []}, {"section_title": "Trafficking in Persons", "paragraphs": ["VAWA 2013 amended and authorized appropriations for the Trafficking Victims Protection Act of 2000 (Division A of P.L. 106-386 ). It enhanced measures to combat trafficking in persons, and amended the purpose areas for several grants to address sex trafficking. VAWA 2013 also clarified that victim services and legal assistance include services and assistance to victims of domestic violence, dating violence, sexual assault, or stalking who are also victims of severe forms of trafficking in persons."], "subsections": []}, {"section_title": "American Indian Tribes", "paragraphs": ["VAWA 2013 included new provisions for American Indian tribes. It granted authority to tribes to exercise special domestic violence criminal jurisdiction and civil jurisdiction to issue and enforce protection orders over any person. It also created a voluntary two-year pilot program for tribes that make a request to the Attorney General to be designated as a participating tribe to have special criminal jurisdiction over domestic violence cases. (Note: The Attorney General may grant a request after concluding that the tribe's criminal justice system has adequate safeguards in place to protect defendants' rights.) In addition, it created a new grant program to assist tribes in exercising special criminal jurisdiction in cases involving domestic violence.", "VAWA 2013 also expanded the purpose areas of grants for tribal governments and coalitions to", "include sex trafficking; develop and promote legislation and policies that enhance best practices for responding to violent crimes against Indian women; and raise awareness of and response to domestic violence, including identifying and providing technical assistance to enhance access to services for Indian women victims of domestic and sexual violence, including sex trafficking."], "subsections": []}, {"section_title": "Battered Nonimmigrants", "paragraphs": ["VAWA 2013 extended VAWA coverage to derivative children whose self-petitioning parent died during the petition process, a benefit currently afforded to foreign nationals under the family-based provisions of the Immigration and Naturalization Act (INA). It also exempted VAWA self-petitioners, U visa petitioners, and battered foreign nationals from being classified as inadmissible for legal permanent resident status if their financial circumstances raised concerns about them becoming potential public charges. Additionally, it amended the INA to expand the definition of the nonimmigrant U visa to include victims of stalking.", "VAWA 2013 added several new purpose areas to the Grants to Encourage Arrest Policies and Enforcement of Protection Orders program (Arrest Program), one of which was to improve the criminal justice system response to immigrant victims of domestic violence, sexual assault, dating violence, and stalking."], "subsections": []}, {"section_title": "Underserved Populations", "paragraphs": ["In addition to expanding the definition of underserved populations , VAWA 2013 established several new grant provisions to address the needs of underserved populations. It required STOP implementation plans to include demographic data on the distribution of underserved populations within states and how states will meet their needs. It expanded the purpose areas of the Grants to Combat Violent Crimes on Campuses program to address the needs of underserved populations on college campuses. It also dedicated 2% of annual appropriated funding for the Arrest and STOP programs to Grants for Outreach to Underserved Populations, a previously unfunded VAWA program."], "subsections": []}, {"section_title": "Housing", "paragraphs": ["VAWA 2013 added housing rights for victims of domestic violence, dating violence, sexual assault, and stalking, including a provision stating that applicants may not be denied public housing assistance based on their status as victims of domestic violence, dating violence, sexual assault, or stalking. It also required each executive department carrying out a covered housing program to adopt a plan whereby tenants who are victims of domestic violence, dating violence, sexual assault, or stalking can be transferred to another available and safe unit of assisted housing. Additionally, it required the Secretary of Housing and Urban Development to establish policies and procedures under which a victim requesting such a transfer may receive Section 8 assistance under the U.S. Housing Act of 1937.", "Under the VAWA-authorized Transitional Housing Assistance Grant program, the act ensured that victims receiving transitional housing assistance are not subject to prohibited activities, including background checks or clinical evaluations, to determine eligibility for services. It removed the requirement that victims must be \"fleeing\" from a violent situation in order to receive transitional housing assistance. It also specified that transitional housing services may include employment assistance."], "subsections": []}, {"section_title": "Institutions of Higher Education (IHEs)", "paragraphs": ["VAWA 2013 made several changes to higher education policy. It amended the Clery Act and incorporated provisions from the Campus Sexual Violence Elimination Act. These provisions required, among other things, IHEs to report data on domestic violence, dating violence, and stalking in annual security reports (ASRs). Newly reportable crime categories included domestic violence, dating violence, and stalking. VAWA 2013 also added two new categories of bias applicable to hate crime reporting (i.e., national origin and gender identity).", "VAWA 2013 required ASRs to include a statement of the IHE's policy on programs to prevent sexual assaults, domestic violence, dating violence, and stalking; policies to address these incidents if they occur, including a statement on the standard of evidence that will be used during an institutional conduct proceeding regarding these crimes; and primary prevention programs to promote awareness of these crimes for incoming students and new employees, as well as providing ongoing awareness and prevention training for students and faculty. It also required that crime statistics on victims who were \"intentionally selected\" because of their national origin or gender identity are recorded and reported according to category of prejudice.", "In addition, VAWA 2013 required that students and employees receive written notification of available victim services including counseling, advocacy, and legal assistance, as well as options for modifying a victim's academic, living, transportation, or work arrangements. Victims were to be notified of their rights, including their right to notify or not notify law enforcement and campus authorities of a crime of sexual violence. The law also required that officials who investigate a complaint or conduct an administrative proceeding regarding sexual assault, domestic violence, dating violence, or stalking receive annual training on how to conduct investigations or proceedings that protect the safety of victims and promote accountability."], "subsections": []}, {"section_title": "Other Changes", "paragraphs": ["VAWA 2013 amended rules for sexual acts in federal custodial facilities by adding \"the commission of a sexual act\" as grounds for civil action by a federal prisoner and mandating that detention facilities operated by the Department of Homeland Security and custodial facilities operated by the Department of Health and Human Services adopt national standards established pursuant to the requirements in the Prison Rape Elimination Act of 2003 ( P.L. 108-79 ). VAWA 2013 also enhanced criminal penalties for assaulting a spouse, intimate partner, or dating partner."], "subsections": []}]}, {"section_title": "Rape Survivor Child Custody Act", "paragraphs": ["In May 2015, as part of the Justice for Victims of Trafficking Act (Title IV, P.L. 114-22 ), the Rape Survivor Child Custody Act was enacted into law. It requires the Attorney General (through OVW) to increase grant funding under the STOP and SASP formula grant programs to states that have a law allowing the mother of a child conceived through rape to seek court-ordered termination of the parental rights of her rapist. The increase in formula grants is allowed to be provided for a total of four two-year periods (eight years), and is equal to not more than 10% of the total amount of funding provided to the state averaged over the previous three years. Of the increased funding, 25% is for STOP grants and 75% for the SASP grants. The Rape Survivor Child Custody Act authorized $5 million a year for FY2015 through FY2019 for the grant increases."], "subsections": []}]}, {"section_title": "Current Efforts to Reauthorize VAWA", "paragraphs": ["There are several issues that Congress may consider in current reauthorization efforts. These include, but are not limited to, improvements to data collection, assessing tribal jurisdiction over non-tribal members who commit VAWA-related crimes on tribal lands, new approaches for law enforcement in assisting victims, and enforcement of the federal prohibition on firearms for those convicted of a misdemeanor crime of domestic violence and those who are subject to a domestic violence protective order. Congress may also consider further changes to VAWA programs.", "The Violence Against Women Reauthorization Act of 2019 ( H.R. 1585 ), as passed by the House, would address some of these issues. Among other things, it would reauthorize funding for VAWA programs and authorize new programs; amend and add definitions used for VAWA programs; amend federal criminal law relating to firearms, custodial rape, and stalking; and expand tribal jurisdiction over certain crimes committed on tribal lands."], "subsections": [{"section_title": "Improvements to Data Collection", "paragraphs": ["Congress may address issues concerning limited law enforcement data at the national level on the crimes of domestic violence and stalking. The data are limited because the UCR does not currently collect information on these offenses from state and local agencies like it does for its traditional violent and property crime offense categories. In 2019, the UCR program plans to begin collecting domestic violence offense data through the National Incident-Based Reporting System (NIBRS). NIBRS also includes stalking as part of an intimidation offense category. Even though the NIBRS data are not yet nationally representative, the FBI states that it is transitioning its UCR program to a \"NIBRS only data collection\" by 2021. Congress may consider options to expand the NIBRS program sooner than 2021 or to adjust the UCR program in other ways, such as by requiring the FBI to collect data on stalking as its own offense under NIBRS rather than incorporating it into the intimidation offense category.", "Congress may also address the availability of data on the sexual assault kit (SAK, or rape kit) backlog. According to the National Institute of Justice (NIJ), \"it is unknown how many unanalyzed [SAKs] there are nationwide.\" NIJ notes that while there are many reasons why there are no data on the number of untested SAKs in law enforcement's possession, one contributing factor is that there is no national system for collecting these data. Also, tracking and counting SAKs is an antiquated process in many jurisdictions (often done in nonelectronic formats), and the availability of computerized evidence-tracking systems has been an issue for many jurisdictions for years.", "The Joyful Heart Foundation, a grassroots organization, addressed the SAK data void by attempting to count the backlog (through public records requests) and track data in cities and states across the country. While the organization's data are incomplete, it has estimates of rape kit backlogs for various cities and states. Thus far, it has identified approximately 41 municipal and county jurisdictions with known rape kit backlogs ranging from several hundred to thousands\u2014its current total is 40,000 untested SAKs.", "Congress may assess the SAK backlog and debate if the federal response should be changed as the issue evolves and agencies, including NIJ, capture the full breadth of the problem.", "H.R. 1585 , as passed by the House, would authorize several new activities related to increasing or improving data collection. These include, but are not limited to, the following:", "requiring the Attorney General to establish an interagency working group to study federal efforts to collect data on sexual violence and to make recommendations on the harmonization of such efforts, authorizing funding for tribal governments to improve data collection and to enter information into and obtain information from national crime information databases, and requiring NIJ to prepare a report on the status of women in federal incarceration\u2014this requirement allows for inmate and personnel data to be collected from the Bureau of Prisons."], "subsections": []}, {"section_title": "Tribal Jurisdiction", "paragraphs": ["As discussed previously, VAWA 2013 granted authority to American Indian tribes to exercise special domestic violence criminal jurisdiction and civil jurisdiction to issue and enforce protection orders over any person, including non-tribal members. As of March 2018, 18 tribes were exercising this authority. These tribes have reported 143 arrests of 128 non-tribal individuals, which led to 74 convictions and five acquittals with 24 cases pending as of March 2018. According to the National Congress of American Indians (NCAI), tribes are exercising jurisdiction \"with careful attention to the requirements of federal law and in a manner that upholds the rights of defendants.\" ", "While NCAI issued its assessment report in 2018, Congress also may elect to assess implementation in the five years since this authority was granted. If it so chooses, Congress may require the Government Accountability Office (GAO) to evaluate tribal jurisdiction.", "Congress may elect to grant special jurisdiction over non-tribal members for additional VAWA crimes such as sexual assault and stalking, as well as non-VAWA crimes. NCAI stated in its assessment report that many implementing tribes were unable to prosecute non-tribal members for many crimes that co-occur with domestic violence such as drug and alcohol offenses.", "H.R. 1585 , as passed by the House, would amend tribal criminal jurisdiction authorized under Section 204 of the Indian Civil Rights Act. Among other changes, tribal jurisdiction over criminal behavior on tribal lands would consist of domestic violence ( H.R. 1585 would also expand the definition of domestic violence used for tribal jurisdiction), as well as obstruction of justice, assaulting a law enforcement officer, sex trafficking, sexual violence, and stalking."], "subsections": []}, {"section_title": "New Approaches for Law Enforcement", "paragraphs": ["As there are further developments in the fields of criminal justice and public health, researchers and practitioners report new and developing approaches and methods for law enforcement and other criminal justice personnel in working with victims of domestic violence, sexual assault, dating violence, and stalking. Congress may consider these new approaches when debating additions to grant purpose areas or encouraging states to adopt certain practices. For example, over the last decade there has been a push for criminal justice professionals to incorporate trauma-informed policing and response policies. Congress may consider requiring law enforcement grantees to incorporate trauma-informed training and policies into their required training or standard operating procedures or creating new funding opportunities to develop these trainings and policies. Of note, OVW has supported several initiatives related to trauma-informed approaches. Other new and developing approaches include, but are not limited to, new protocols for police officers about when they would activate their body-worn cameras as they interact with victims of domestic violence, sexual assault, dating violence, or stalking and so-called \"red flag\" laws that allow law enforcement or family members to petition a court to have firearms removed from those who are a danger to themselves or others.", "H.R. 1585 , as passed by the House, would authorize a new demonstration program under OVW to promote trauma-informed training for law enforcement. Through this program, OVW would make grants on a competitive basis to eligible entities to implement evidence-based or promising policies and practices to incorporate trauma-informed techniques designed to prevent re-traumatization of crime victims and improve communication between victims and law enforcement officers, among other purpose areas, in an effort to increase the likelihood of successful investigations and prosecutions of reported crime in a manner that protects the victim to the greatest extent possible."], "subsections": []}, {"section_title": "Domestic Violence and Federal Prohibition of Possession of Firearms", "paragraphs": ["The Gun Control Act (GCA) prohibits certain individuals from possessing firearms, including individuals who have been convicted of a misdemeanor crime of domestic violence and those who are subject to a protective order involving an intimate partner or child of an intimate partner. Congress may consider any number of issues surrounding prohibitions on firearms possession and matters of domestic violence, but the issue of enforcement of domestic violence and protection order prohibitions has been subject to some debate.", "While there is a federal process for preventing those convicted of a misdemeanor crime of domestic violence or those subject to a protective order from purchasing a firearm, there is not a federal process for these individuals to surrender their firearms. The process is left up to states and local jurisdictions, which vary in their approaches to enforcing these prohibitions. In some jurisdictions, the process for informing defendants/respondents they must surrender their firearms can vary by judge. Of note, VAWA 2005 established a provision that required states or units of local government to certify that its judicial policies and practices included notification to domestic violence offenders of the firearms prohibitions in Section 922(g)(8) and (g)(9) of Title 18 in order to be eligible to receive STOP funding. Congress may choose to take further steps to ensure the enforcement of these prohibitions, such as adding to the certification requirement, or it might leave the decisions to the states, some of which have enacted laws requiring the removal of firearms from those subject to the prohibitions.", "H.R. 1585 , as passed by the House, includes several provisions that seek to reduce firearms-related intimate partner violence. It would amend federal law to prohibit persons convicted of misdemeanor stalking crimes from receiving or possessing a firearm or ammunition, and revise related provisions governing domestic violence protection orders and the definition of \"intimate partner\" under current law. H.R. 1585 also includes other provisions related to improving enforcement of federal firearm possession prohibitions under 18 U.S.C. \u00a7922, subsections (g)(8), (g)(9), and (g)(10)."], "subsections": []}, {"section_title": "Other Changes to VAWA Programs", "paragraphs": ["In the next effort to reauthorize VAWA, Congress may debate additional changes to VAWA programs such as adding new grant purpose areas or additional crimes, creating new programs, or consolidating existing programs. Examples of potential changes Congress may consider should it choose to reauthorize VAWA appropriations include the following:", "Female genital mutilation or female genital cutting (FGM/C) may be added to grant programs in a variety of ways. For example, it can be added as a crime for services eligibility, or Congress may try to encourage or require states (in order to receive grant funding) to make FGM/C a crime. Many VAWA grant programs fund the same services and the same organizations. For example, nine separate VAWA programs may be used to fund emergency shelter or transitional housing. Congress may consider streamlining funding into fewer, larger grant programs. Currently, OVW administers 4 formula grant programs and 15 discretionary grant programs. Congress may opt to support domestic violence courts. While some grantees already use funds for this purpose and OVW has provided technical assistance to fund model domestic violence courts, Congress may elect to create a program to support these specialized courts. While there is a large amount of grantee data available on the VAWA programs administered by OVW, grantee data from the Rape Prevention and Education (RPE) formula grant program administered by the CDC are limited. Congress may choose to require the CDC to submit reports on the activities supported with RPE funds.", "H.R. 1585 , as passed by the House, would define FGM/C for VAWA grant purposes, and amend the purpose areas of three VAWA grant programs (STOP, Outreach and Services to Underserved Populations, and CHOOSE Children and Youth) to include providing culturally specific victim services regarding responses to, and prevention of, FGM/C. The bill would also require the Director of the FBI to classify FGM/C, or female circumcision, as a part II crime in the UCR (see \" Categories of Crime Addressed through VAWA \" for discussion of UCR crime data).", "H.R. 1585 would also amend the Rape Prevention and Education Grant Program to require the CDC Director to submit to Congress a report on the activities funded by grants and best practices relating to rape prevention and education.", "H.R. 1585 , if enacted, would make many other changes that are not discussed in detail in this report. These include changes to definitions used for VAWA grant purposes, new housing protections for victims, and the creation of new grant programs that address issues such as lethality assessment in domestic violence cases and economic security for victims. Of note, H.R. 1585 would reauthorize funding for most VAWA programs for FY2020-FY2024."], "subsections": [{"section_title": "Appendix. Additional Data for VAWA Programs", "paragraphs": ["The Violence Against Women Reauthorization Act of 2013 ( P.L. 113-4 ) authorized appropriations for most VAWA programs for FY2014 through FY2018. Table A-1 provides descriptions of currently funded VAWA programs, Table A-2 provides a list of unfunded VAWA-authorized programs, and Table A-3 provides a five-year funding history of VAWA programs by total funding amounts for each administrative office. For more-detailed program funding, see Table 1 ."], "subsections": []}]}]}]}}
{"id": "R45728", "title": "Major Agricultural Trade Issues in the 116th Congress", "released_date": "2019-05-20T00:00:00", "summary": ["Sales of U.S. agricultural products to foreign markets absorb about one-fifth of U.S. agricultural production, thus contributing significantly to the health of the farm economy. Farm product exports, which totaled $143 billion in FY2018 (see chart below), make up about 9% of total U.S. exports and contribute positively to the U.S. balance of trade. The economic benefits of agricultural exports also extend across rural communities, while overseas farm sales help to buoy a wide array of industries linked to agriculture, including transportation, processing, and farm input suppliers.", "Congress has traditionally displayed a keen interest in agricultural trade issues given their importance to farmers and ranchers and to the overall economy. A major area of interest for the 116th Congress has been the loss of overseas export market shares for agricultural products due to the direction of the Trump Administration's trade policy, which places increased emphasis on reducing the overall U.S. trade deficit. In March 2018, the Trump Administration imposed Section 232 tariffs on U.S. imports of steel and aluminum from most countries and additional Section 301 tariffs on a number of imports from China. Following these actions, Canada, China, Mexico, the European Union (EU), and Turkey imposed retaliatory tariffs on more than 800 U.S. agricultural and food product exports. In response, USDA authorized $12 billion in short-term assistance to the affected agricultural producers and commodities under its Market Facilitation Program to help mitigate the economic impact on farmers.", "A number of policy developments undertaken by the Trump Administration in bilateral and regional trade agreements may affect agricultural markets as well. On the Administration's initiative, the North American Free Trade Agreement (NAFTA) has been renegotiated and signed as the U.S.-Mexico-Canada Agreement (USMCA). This agreement is subject to legislative ratification by Canada and Mexico and approval by U.S. Congress. President Trump withdrew the United States from the Trans-Pacific Partnership (TPP) in January 2017. In March 2018, the remaining 11 countries concluded a revised version of TPP, the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP). Signatories of CPTPP have begun to reduce tariffs and provide greater agricultural market access for imports from CPTPP signatory countries, actions that could potentially erode U.S. agricultural market shares in the region. At the bilateral level, the Trump Administration has notified Congress of its intent to begin trade negotiations with Japan (a CPTPP member), the EU, and the United Kingdom.", "At the global level, and at the initiative of the United States, the World Trade Organization (WTO) recently ruled that China has subsidized its agricultural production beyond the level permitted under its WTO obligations and that China's administration of its agricultural market access policies are inconsistent with its WTO obligations. The United States has also filed a counter notification against India at the WTO stating that India has underreported its agricultural domestic subsidies.", "Several other agricultural trade issues may be of interest to Congress. For example, the proposed USMCA does not address all the issues that restrict U.S. agricultural exports to Mexico and Canada, and Southeastern U.S. produce growers have been seeking changes to trade remedy laws to address imports of seasonal produce. A key objective of U.S. trade negotiations continues to be the establishment of a common framework for approval, trade, and marketing of the products of agricultural biotechnology. U.S. farm and food interests see the potential for market expansion opportunities in Cuba, but a prohibition on private U.S. financing is generally viewed as a major obstacle to this end. Moreover, the United States has announced its intention to withdraw eligibility for the Generalized System of Preference (GSP)\u2014which provides duty-free tariff treatment for certain products from developing countries\u2014from Turkey and India. On another front, U.S. exports of beef, pork, and chicken continue to face bans and trade restrictions over disease outbreaks even though the bans are inconsistent with international trade protocols, among which are China's ongoing bans on imports of U.S. beef and poultry and restrictions imposed by several foreign markets on U.S. ractopamine-fed pork."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report identifies selected current major trade issues for U.S. agriculture that may be of interest to the 116 th Congress. It provides background on individual trade issues and attempts to bring perspective on the significance of each for U.S. agricultural trade. Each trade issue summary concludes with an assessment of its current status.", "The report begins by examining a series of overarching issues. These issues include U.S. agricultural trade and its importance to the agricultural sector, a brief description of the trade policy being pursued by the Trump Administration and its ramifications for U.S. agricultural exports, the Administration's actions to mitigate the economic impact on agriculture from retaliatory actions by trading partners against its trade policies, and the implications for U.S. agriculture of the U.S. withdrawal from the Trans-Pacific Partnership (TPP) agreement. The report then reviews a number of ongoing trade disputes and trade negotiations while also examining a series of narrower trade issues of importance to the agricultural sector. The format for these more focused trade issues is similar, consisting of background and perspective on the issue at hand and an assessment of their current status."], "subsections": []}, {"section_title": "Overview of U.S. Agricultural Trade1", "paragraphs": ["U.S. agricultural exports have long been a bright spot in the U.S. balance of trade, with exports exceeding imports in every year since 1960. In recent years, the value of farm exports have experienced a downturn from the record level recorded in FY2014. The U.S. Department of Agriculture (USDA) forecasts U.S. agricultural exports in FY2019 at $141.5 billion (see Figure 1 ). If realized, this total would represent a decline from FY2018, when exports totaled $143 billion. Exports in FY2018 were $3 billion above the FY2017 total but almost $11 billion below the peak of $152.3 billion in FY2014. The decline in the value of farm exports since FY2014 initially reflected lower market prices for bulk commodities, such as soybeans and corn. Agricultural prices and U.S. exports of certain bulk commodities such as soybeans were further affected in 2018 by retaliatory tariffs imposed on selected U.S. agricultural imports by China, Canada, Mexico, the European Union (EU), and Turkey. The retaliatory tariffs were in response to the Trump Administration's imposition of Section 301 tariffs on certain imports from China and Section 232 tariffs on U.S. imports of steel and aluminum.", "U.S. agricultural imports are forecast to total $128 billion in FY2019, slightly up from $127.6 billion in FY2018, resulting in an agricultural trade surplus of $13.5 billion. This would be below the surplus of $15.8 billion in FY2018 and below the record high in nominal dollars of $43.1 billion in FY2014.", "Agricultural exports are important both to farmers and to the U.S. economy. During the calendar years 2017 and 2018, the value of U.S. agricultural exports accounted for 8% and 9% of total U.S. exports, respectively, and 5% of total U.S. imports, according to the U.S. Census data. As for the contribution of U.S. agricultural exports to the overall U.S. economy, USDA's Economic Research Service (ERS) estimates that in 2017 each dollar of U.S. agricultural exports stimulated an additional $1.30 in business activity. Moreover, that same year, U.S. agricultural exports generated an estimated 1,161,000 full-time civilian jobs, including 795,000 jobs outside the farm sector.", "With the productivity of U.S. agriculture growing faster than domestic demand, farmers and agriculturally oriented firms rely on export markets to sustain prices and revenue. Within the agricultural sector itself, the importance of exports account for around 20% of total farm production by value. Export markets are a major outlet for many farm commodities, absorbing over one-half of U.S. output for cotton and about half of total U.S. production for wheat, soybeans, and some specialty crops.", "Within the overall mix of agricultural exports, soybeans, corn, other feed crops, and wheat continue to rank at or near the top of the list of farm exports by volume. The high-value product (HVP) category\u2014which includes such products as live animals, meat, dairy products, fruits and vegetables, nuts, fats, hides, manufactured feeds, sugar products, processed fruits and vegetables, and other processed food products\u2014comprises the largest share of exports in value terms. In FY2018, the HVP share of the value of U.S. agricultural exports represented 66% of the total. ", "All U.S. states export agricultural commodities, but a minority of states account for a majority of farm export sales. In calendar year 2017, the 10 leading agricultural exporting states based on value\u2014California, Iowa, Illinois, Texas, Minnesota, Nebraska, Kansas, Indiana, North Dakota, and Missouri\u2014accounted for 57% of the total value of U.S. agricultural exports that year. ", "Status : In December 2018, Congress reauthorized major agricultural export promotion programs through FY2023 with the passage of the so-called 2018 farm bill ( P.L. 115-334 ). Title III of the farm bill includes provisions covering export credit guarantee programs, export market development programs, and international science and technical exchange programs that are designed to develop agricultural export markets in emerging economies."], "subsections": []}, {"section_title": "Trump Administration Trade Policy11", "paragraphs": ["In establishing policy for U.S. participation in international trade, the Trump Administration has placed increased emphasis on trade deficits, which it views as an indicator of \"unfair\" foreign trade practices, with potential implications for U.S. industry and jobs. With the objective of reducing trade deficits, the Administration's trade policy has focused on withdrawing from or renegotiating existing trade agreements that the Administration views as being \"unfair;\" initiating new bilateral agreements; and responding to the trade practices of U.S. trade partners (whether geopolitical ally or adversary) that it views as unfair, illegal, or threatening to U.S. industry, with punitive trade actions. The punitive actions have included the imposition of Section 232 tariffs on U.S. imports of steel and aluminum and Section 301 tariffs on U.S. imports of products from China. The direction of the Administration's trade policy\u2014for example, withdrawing from the Trans-Pacific Partnership (TPP) agreement with Japan and 10 other Pacific-facing nations and engaging in trade disputes with important agricultural trading partners that have resulted in retaliatory tariffs on U.S. agricultural products\u2014has coincided with market share losses for certain U.S. agricultural exports.", "The Trump Administration has taken the position that current trade agreements to which the United States is a party and where the U.S. has a trade deficit or where the Administration perceives that the United States is being treated unfairly must be renegotiated or the United States will withdraw from them. Furthermore, the Administration questions the benefits of multi-party agreements, viewing them in some instances as improper vehicles for achieving meaningful negotiations. The Administration has also threatened to withdraw from the World Trade Organization (WTO) if it fails to undergo certain reforms. In January 2017, the Trump Administration withdrew from the TPP, which was subsequently concluded by the remaining TPP signatories under a modified framework renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in March 2018. Under U.S. initiative, the North American Free Trade Agreement (NAFTA) was renegotiated as the U.S.-Mexico-Canada Agreement (USMCA). USMCA was signed by the leaders of the three nations in November 2018 but requires legislative ratification to enter into force. ", "In contrast to the Trump Administration's view of regional or multilateral negotiations, the Administration believes that greater potential gains can be achieved under bilateral negotiations where two countries can negotiate directly in the absence of group consensus. The Administration has sought to update some existing bilateral trade agreements and open new bilateral negotiations:", "The Administration negotiated selected modifications to the U.S.-South Korea free trade agreement. The Administration has notified Congress of its intent to begin negotiations under Trade Promotion Authority (TPA) with trading partners including Japan, the EU, and the United Kingdom (UK). The Administration is currently engaged in bilateral trade negotiations with China in an attempt to resolve the current trade dispute that has resulted in retaliatory tariffs on a wide range of U.S. agricultural products.", "Status : The Administration's trade policy actions have in some cases resulted in retaliatory tariffs against U.S. agricultural product exports, while the status of new agreements with several important agricultural trading partners, such as Canada and Mexico, remains uncertain. U.S. agricultural exports continue to be subject to retaliatory tariffs imposed by trading partners in response to the Administration's imposition of Section 232 tariffs on steel and aluminum and Section 301 tariffs on China. The signed USMCA awaits consideration by Congress and ratification by Canada and Mexico. Numerous stakeholders have raised concerns that U.S. agriculture will lose export market shares to competitors due to U.S. withdrawal from TPP and its absence from CPTPP. Some stakeholders wonder whether agriculture will be prioritized in all planned bilateral negotiations. The Office of the U.S. Trade Representative (USTR) had indicated that it may pursue negotiations with Japan in stages, declaring that the automobiles sector will be a priority. At the same time, both President Trump and the Secretary of Agriculture have stated that U.S.-Japan negotiations would occur in stages with a \"very quick\" deal on agriculture. However, the Japanese economy minister has stated that the United States and Japan would not reach an agreement in any one sector before other sectors. ", "Elsewhere, the EU negotiating mandate for conducting trade negotiations with the United States articulates that a key EU goal is \"a trade agreement limited to the elimination of tariffs for industrial goods only, excluding agricultural products.\" As for the UK, it cannot formally negotiate or conclude a new trade agreement with the United States until it exits the EU."], "subsections": [{"section_title": "Retaliatory Tariffs on U.S. Agricultural Exports32", "paragraphs": ["On March 23, 2018, the Trump Administration applied a 25% tariff to certain U.S. steel imports and a 10% tariff to certain U.S. aluminum imports under Section 232 of the Trade Expansion Act of 1962. This action followed Department of Commerce (DOC) investigations that determined that current imports threaten U.S. national security. Citing objections to China's policies on intellectual property, technology, and innovation, the Administration also implemented three rounds of tariff increases under Section 301 on a total of $250 billion worth of Chinese products. ", "Canada, China, Mexico, the EU, and Turkey\u2014whose exports were affected by the steel and aluminum tariffs\u2014retaliated with tariffs on imports of a range of U.S. agricultural and food products and other goods. India has proposed retaliatory tariffs on a number of U.S. agricultural products, but it has delayed implementation pending ongoing negotiations with the Trump Administration.", "In all, the retaliatory tariffs imposed by these trading partners have targeted more than 800 U.S. agricultural and food products. Exports of those products to these five trading partners amounted to $26.9 billion in calendar year 2017, or about 18% of global U.S. agricultural and food product exports of $150.8 billion that year.", "Retaliatory tariffs by China affect 99% of U.S. agricultural products exported to China. With a combination of Section 301 and Section 232 retaliations, China has levied retaliatory tariffs ranging from 5% to 50%, in addition to existing most-favored nation (MFN) tariffs, on more than 800 U.S. food and agricultural products that were worth about $20.6 billion in calendar year 2017. The products, subject to retaliatory tariffs, span all agricultural and food categories, including grains, meat and animal products, fruits and vegetables, seafood, and processed foods. The U.S. agricultural imports into China with the largest loss of markets since the tariffs were imposed in 2018, compared with 2017, are soybeans, cotton, sorghum, and hides and skins.", "Canada has levied retaliatory tariffs of 10% on more than 20 U.S. agricultural and food products that are otherwise duty free under NAFTA. U.S. exports most affected by these tariffs are roasted coffee, ketchup, various beverage waters, licorice and toffee, and orange juice. U.S. exports of the products subject to Canada's retaliatory tariffs were valued at $2.6 billion in 2017. ", "Mexico has placed retaliatory tariffs of 15%-25% on a range of U.S. products that are otherwise duty free under NAFTA. U.S. exports to Mexico of these products amounted to approximately $2.5 billion in 2017. U.S. exports of cheese and pork have been the commodities most affected by Mexico's retaliatory tariffs as measured by reduced exports in 2018 compared with 2017. ", "The EU has levied a 25% tariff on certain U.S. exports of prepared vegetables and legumes, grains, fruit juice, peanut butter, and whiskey, which together amounted to $1 billion in sales in 2017. Turkey has imposed retaliatory tariffs on U.S. tree nuts, rice, prepared foods, whiskey, and unmanufactured tobacco. U.S. exports of these products to Turkey totaled $250 million in 2017. ", "A study from Purdue University found that the retaliatory tariffs could result in a reduction of U.S. agricultural exports by as much as $8 billion annually (in inflation adjusted values) after the markets have adjusted in the near future. The study also projects that the reduction in U.S. agricultural exports could lower agricultural land prices and result in the reallocation of 45,000 farm, ranch, and processing workers. Additionally, the authors suggest that U.S. soybean producers would see the most change in the wake of tariff retaliation, with exports potentially falling by 21% and land prices declining by about 18%. The impact estimated by the model would be affected over time by other policy shocks and technological and population changes that are not accounted for in the model. A recent United Nations study states that extended imposition of retaliatory tariffs will erode U.S. market share in favor of export competitors in the longer term. ", "Status : U.S. agricultural exports continue to face retaliatory tariffs in response to the Administration's 2018 trade actions. The USDA forecasts U.S. agricultural exports for FY2019 at $141.5 billion compared with $143.4 billion in FY2018, reflecting its expectation that increased trade with other regions that are not involved in the tariff dispute will partially offset tariff-related trade losses, particularly with China. U.S. agricultural exports to China are forecast to decline in FY2019 by over $7 billion from $16 billion in FY2018. The United States and China are engaged in bilateral discussions to resolve the current trade dispute. USMCA\u2014the proposed successor to NAFTA\u2014does not address the Section 232 tariffs that led Canada and Mexico to impose retaliatory tariffs. Representatives of the U.S. business community, agriculture interest groups, other congressional leaders, and Canadian and Mexican government officials have stated that the Section 232 tariff issues must be resolved before USMCA enters into force. "], "subsections": []}, {"section_title": "USDA's Trade-Aid Package in Response to Trade Retaliation38", "paragraphs": ["On July 24, 2018, Secretary of Agriculture Sonny Perdue announced that the USDA would take several temporary actions to assist farmers in response to trade-related consequences from what the Administration characterized as \"unjustified retaliation\" against several U.S. agricultural products in 2018. Specifically, the Secretary said that the USDA would authorize up to $12 billion in financial assistance\u2014referred to as a trade aid package\u2014for certain agricultural commodities using the authority provided under Section 5 of the Commodity Credit Corporation (CCC) Charter Act (15 U.S.C. \u00a7714c). ", "The Secretary initially stated that there would be no further trade-related financial assistance beyond this $12 billion package. However, on May 10, 2019, Secretary Perdue tweeted that the White House had directed USDA to work on a new aid package. The 2018 trade aid package includes (1) a Market Facilitation Program (MFP) of direct payments (valued at up to $10 billion) to producers of commodities most affected by the trade retaliation, (2) a Food Purchase and Distribution Program to partially offset lost export sales of affected commodities ($1.2 billion), and (3) an Agricultural Trade Promotion program to expand foreign markets ($200 million).", "The largest component of the trade aid package, the MFP, provides direct financial assistance to producers of commodities that are most impacted by actions of foreign governments resulting in the loss of traditional exports. Affected commodities include soybeans, corn, cotton, sorghum, wheat, hogs, dairy, fresh sweet cherries, and shelled almonds. USDA announced MFP per-unit payment rates to be applied to certified production of eligible commodities in 2018. ", "USDA's Farm Service Agency administers the MFP. Eligible participants had to sign up for payments from September 2018 to February 2019. They also had to meet additional criteria, including being \"actively engaged in farming,\" having an average adjusted gross income of less than $900,000, meeting conservation compliance provisions, and certifying their 2018 production with USDA by May 1, 2019.", "USDA determined the MFP per-unit payment rate based on the estimated \"direct trade damage\"\u2014the difference in expected trade value for each affected commodity with and without the retaliatory tariffs. The estimated \"trade damage\" for each affected commodity was then divided by the crop's production in 2017 to derive a per-unit payment rate. Indirect effects\u2014such as any decline in market prices for affected commodities that were used domestically rather than exported\u2014were not included in the payment calculation. Based on 2017 production data, USDA estimated that approximately $9.6 billion would be distributed in MFP payments to eligible producers, with over three-fourths ($7.3 billion) of MFP payments provided to soybean producers.", "By linking MFP commodity payments only to the trade loss associated with each named MFP commodity, the payment formula favored commodities that relied more heavily on export markets than on domestic markets. Soybean growers and most farm-advocacy groups have generally been supportive of the payments, but some commodity groups\u2014most notably associations representing corn, wheat, milk, and specialty crops\u2014argued that the MFP payment formulation was inadequate to fully compensate their industries. For example, the National Corn Growers Association states that the 2018 trade disputes lowered corn prices by $0.44 per bushel for a potential total loss of $6.3 billion. Similarly, the National Association of Wheat Growers estimates a $0.75 per bushel decrease in domestic wheat prices that resulted in nearly $2.5 billion in lost value, while the National Milk Producers Federation has calculated that the retaliatory tariffs resulted in a $1.10 per hundredweight decline in domestic milk prices and over $1.2 billion in losses for milk producers based on milk futures prices. Similarly, many specialty crop groups contend that their tariff-related export losses were not fully compensated by the trade aid programs. To this point, a 2018 study by researchers at the University of California-Davis stated that, in California alone, specialty crops may suffer trade-related losses of over $3.3 billion on their 2018 production.", "Status: In March 2019, USDA estimated that a total of $8.7 billion in outlays would be made available under the MFP program, including $5.2 billion in 2018 and $3.5 billion in 2019. The large volume of payments could attract international attention about whether they are consistent with WTO rules and commitments on domestic support. The trade aid package raises a number of potential questions. For instance, if the United States and China do not reach an agreement in their ongoing tariff-driven trade negotiations, should another trade aid package, or some alternative compensatory measure, be provided in 2019, and possibly beyond? If MFP payments are to be repeated in the future, should USDA revise its payment formulation to provide a broader distribution of payments across the U.S. agricultural sector?"], "subsections": []}, {"section_title": "U.S. Withdrawal from Trans-Pacific Partnership (TPP)47", "paragraphs": ["The TPP was concluded on October 4, 2015, among 12 countries: the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The agreement had not yet entered into force when President Trump signed an executive order withdrawing the United States from TPP on January 23, 2017. On March 8, 2018, the remaining 11 countries concluded a revised agreement\u2014the CPTPP. On December 30, 2018, the CPTPP entered into force among the first six countries to ratify the agreement\u2014Canada, Australia, Japan, Mexico, New Zealand, and Singapore. On January 14, 2019, the CPTPP entered into force for Vietnam.", "With the United States, the TPP would have become the world's largest trade agreement, covering 40% of the global economy and providing comprehensive market access through the elimination and reduction of tariff and non-tariff barriers. The TPP provisions would have significantly increased the overseas markets to which U.S. farm and food products would have preferential access. The CPTPP provisions are based on the TPP. The agricultural provisions of the CPTPP seek to liberalize trade through lower tariffs, expanded tariff-rate quotas (TRQs), and agreements for reducing non-tariff barriers, including laws and regulations pertaining to products of agricultural biotechnology. ", "In 2016, the U.S. International Trade Commission (USITC) had assessed the potential economic benefits from TPP ratification, projecting that by 2032 U.S. agricultural exports would be higher by $7.2 billion, or 2.6%, under TPP than without the agreement. Most of the increase in U.S. exports would have been concentrated in Japan (up $3.6 billion) and Vietnam (up $3.3 billion). ", "CPTPP countries represent a major component of U.S. farm and food trade, providing markets for 42% of U.S. farm exports between 2015 and 2018 while also supplying 52% of U.S. agricultural imports. By one estimate, U.S. absence from CPTPP will lead to a decline in U.S. agricultural exports of about $1.8 billion (1.2% of FY2018 U.S. agricultural exports of $143 billion) per year. The combination of U.S. absence from CPTPP, retaliatory tariffs on U.S. farm and food exports, and the possibility of the United States withdrawing entirely from NAFTA\u2014as President Trump has threatened in the absence of USMCA ratification\u2014could lead to a potential annual drop in U.S. agricultural exports of $21.8 billion, according to a study commissioned by the Farm Foundation. As the CPTPP agreement is relatively new, the possible range of impact on U.S. agriculture is uncertain because of limited studies that are available. ", "A broad cross-section of agricultural groups and food and agribusiness interests are concerned about losing potential export markets given U.S. absence from CPTPP. Under CPTPP, for example, Japanese tariffs on wheat imports will face a 50% reduction by 2025, which will put U.S. wheat exports to Japan at a competitive disadvantage. Similarly, the U.S. dairy industry estimates that by 2027, almost half of the U.S. dairy exports to Japan are likely to be replaced by dairy products from CPTPP and other countries with preferential trading agreements with Japan. Japan has historically accounted for more than a quarter of the total value of U.S. beef and pork exports. The U.S. share of Japan's imports of these commodities is expected to decline, because CPTPP competitors receive more favorable access to the Japanese market for beef and pork. U.S. Meat Export Federation states that annual beef export losses could reach $550 million by 2023 and more than $1.2 billion by 2028. Annual U.S. pork export losses are estimated to exceed $600 million by 2023 and reach $1 billion by 2028. USDA officials and representatives of the U.S. wheat and barley industries assert that U.S. wheat and barley exports are rapidly losing market share in Japan to CPTPP member countries and the EU.", "Status : U.S. agricultural exports appear to be at an increasing disadvantage in the CPTPP member country markets as these countries have begun to expand market access and reduce tariffs on imported products from CPTPP signatory countries. On October 16, 2018, under the TPA procedures, the Trump Administration gave Congress its official 90-day advance notification of intent to enter into trade negotiations with Japan, a CPTPP member country. In view of the Trump Administration's expressed objectives to \"achieve fairer, more balanced trade,\" including in auto trade, stakeholders are uncertain about the prospects of reaching a quick deal with Japan. At the same time, both President Trump and the Secretary of Agriculture have stated that U.S.-Japan negotiations would occur in stages with a \"very quick\" deal on agriculture. However, the Japanese economy minister has stated that the United States and Japan would not reach an agreement in any one sector before other sectors."], "subsections": []}]}, {"section_title": "Agricultural Trade Issues with Canada and Mexico", "paragraphs": ["Since 2002, Canada has been the United States' top agricultural export market, with U.S. agricultural exports averaging over $20 billion between FY2016 and FY2018. In FY2018, Canada accounted for 14% of the total value of U.S. agricultural exports to all destinations. Mexico has been the third-largest market for U.S. agricultural exports since FY2010. U.S. agricultural exports to Mexico averaged over $18 billion between FY2016 and FY2018, accounting for 13% of the total value of U.S. agricultural exports to all destinations in FY2018."], "subsections": [{"section_title": "U.S.-Mexico-Canada Agreement (USMCA)61", "paragraphs": ["On September 30, 2018, the Trump Administration announced an agreement with Canada and Mexico, USMCA, which it is promoting as a replacement for the NAFTA. Under NAFTA, all agricultural tariffs were phased out to zero except for certain products traded between the United States and Canada. These included U.S. imports from Canada of dairy products, peanuts, peanut butter, cotton, sugar, and sugar-containing products and Canadian imports from the United States of dairy products, poultry, eggs, and margarine. Quotas that once governed bilateral trade in these commodities were redefined as TRQs to comply with WTO commitments. Under a TRQ, a lower tariff rate is levied on import quantities within the quota amount, while a higher tariff rate is imposed on quantities in excess of the quota. The United States and Mexico agreement under NAFTA did not exclude any agricultural products from trade liberalization. ", "The proposed USMCA would expand upon the agricultural provisions of NAFTA. All food and agricultural products that have zero tariffs under NAFTA would remain at zero under USMCA. Under USMCA, market access would be expanded for the agricultural products traded between Canada and the United States that were exempt from tariff elimination under NAFTA. Canada agreed to create new U.S.-specific TRQs for U.S. dairy products and to replace the existing NAFTA poultry TRQs with new USMCA TRQs. All U.S. exports within the set TRQ volume limit would be subject to zero tariffs rates, but U.S. over-quota exports would still face the higher levels of tariffs currently in place under Canada's WTO commitment. The United States, in turn, agreed to improve access for imports of Canadian dairy, sugar, peanuts, and cotton. Canada and the United States also agreed to grade each other's like varieties of wheat as if they were produced domestically, a long-standing request of the U.S. wheat industry.", "Under USMCA, provisions are made for textiles and apparel to promote greater use of North American origin products, which may support domestic U.S. cotton production. Also, each country would offer the same treatment for distributing another USMCA country's spirits, wine, beer, and other alcoholic beverages as it would its own products. USMCA's Sanitary and Phytosanitary (SPS) chapter calls for greater transparency in SPS rules and improved regulatory alignment among the three countries. Under USMCA, the United States, Canada, and Mexico agreed to provide procedural safeguards for recognition of new geographic indications, which are place names used to identify products that come from certain regions or locations. The agricultural chapter of USMCA also lays out provisions for addressing the products of agricultural biotechnology, an issue NAFTA does not address.", "In April 2019, USITC released its report that provides an assessment of the likely effects of USMCA on the overall U.S. economy and its component sectors. Because NAFTA has already eliminated duties on most goods and reduced most non-tariff barriers, USITC's quantitative assessment includes changes that are not easily quantifiable. These provisions of trade negotiations were excluded from past USITC quantitative analyses. The provisions included in USMCA assessment by USITC\u2014such as intellectual property rights, future commitments to open flows of data, and strengthening labor standards and rights\u2014may reduce uncertainty in future trading regimes. Uncertainty reducing provisions are part of most free-trade agreements, including NAFTA, even if past assessments excluded them in the analyses. The USITC report finds that U.S. agricultural exports would increase by 1.1% in year 6 of USMCA implementation compared to its 2017 baseline export levels. In inflation-adjusted dollars, U.S. dairy exports to NAFTA countries would increase by $314.5 million (7.1%), and U.S. poultry exports would increase by $183.5 million (1%) compared to exports in 2017.", "A 2018 study commissioned by the Farm Foundation performs an economy-wide analysis, but the analysis takes into consideration only the changes in agricultural tariffs and TRQs proposed under USMCA. The market access changes are introduced as shocks into a multi-region, economy-wide model. The impacts of these changes are analyzed after the economy has adjusted to the shocks after full implementation of USMCA\u2014year 6. The adjustment process can include changes in production and consumption structure, including production costs and changes in the volume of agricultural outputs. This study estimates, in 2014 dollars, a net increase in annual U.S. agricultural exports of $450 million under USMCA, or about 1% of U.S. agricultural exports under NAFTA\u2014$41 billion in FY2014. It projects the export losses from the retaliatory tariffs imposed by Canada and Mexico in response to U.S. Section 232 tariffs on steel and aluminum imports to be $1.8 billion per year (in 2014 dollars), which would more than offset the projected export gain of $450 million from USMCA. These losses include changes in production decisions and volumes resulting from higher production costs. This study does not consider changes in other sectors of the economy that would result from the implementation of USMCA provisions in these other sectors. Moreover, the impact estimated by the model would be affected over time by other policy shocks and technological and population changes that are not accounted for in the model.", "According to an updated version of the Farm Foundation study, under the possible scenario of a complete withdrawal from NAFTA without ratification of USMCA, tariffs on U.S. exports to Canada and Mexico would be expected to return to the higher WTO MFN rates. Under this scenario, the study finds that, in 2014 dollars, U.S. agricultural and food exports to Canada and Mexico would decline by about $12 billion annually. ", "A study conducted by researchers at the International Monetary Fund assesses the potential impacts of USMCA on North America as a region taking into consideration the following provisions of the proposed USMCA: (1) higher vehicle and auto parts regional value content requirement; (2) new labor value content requirement for vehicles; (3) stricter rules of origin for USMCA textile and apparel trade; (4) agricultural trade liberalization that increases U.S. access to Canadian supply-managed markets and reduces U.S. barriers on Canadian dairy, sugar and sugar products, and peanuts and peanut products; and (5) trade facilitation measures. ", "The results describe a medium-term adjustment five to seven years after full implementation of USMCA\u2014year 6. By this time, labor and capital would have been reallocated among sectors, but new investment spending would not yet have increased productive capacity. The study compares base period with what may happen five to seven years after full implementation of USMCA. This study finds that increasing higher regional vehicle and labor requirements would contribute to an economic loss for all three USMCA countries, with a decline in the production of vehicles and parts, shifts toward greater sourcing of both vehicles and parts from outside of the region, and higher prices for consumers. Regarding agricultural provisions of USMCA, the report highlights that Canada would stand to gain more than the United States. The study also highlights that the trade facilitation provisions of USMCA would potentially provide the largest gain to the region. Another researcher reiterates the findings of the International Monetary Fund study that the new domestic content provisions in USMCA would increase input costs for U.S. farmers who would end up paying more for trucks and machinery. As few studies have analyzed the potential impacts of USMCA, the diversity in the findings regarding the impacts from the implementation of USMCA is limited.", "Stakeholder groups have expressed mixed responses to USMCA. A broad coalition representing more than 200 U.S. companies and industry associations has advocated for USMCA's approval. The American Farm Bureau Federation, which is the largest general farm organization, expressed satisfaction that USMCA not only locks in market opportunities previously developed but also builds on those trade relationships in several key areas. On the other hand, the National Farmers Union and the Institute for Agriculture and Trade Policy have expressed concern that the proposed agreement does not go far enough to institute a fair trade framework that benefits family farmers and ranchers.", "Status: The proposed USMCA does not enter into force unless approved by the U.S. Congress and ratified by Canada and Mexico. A report by USITC that assesses the impact of USMCA on U.S. economy was submitted to Congress on April 18, 2019. The timeline for congressional approval of USMCA would likely be governed by the TPA procedures established under the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 ( P.L. 114-26 ) but would not be initiated until the President submits the draft implementing bill to Congress. ", "Some policymakers have stated that the path to ratifying USMCA by Congress is uncertain, in part because the three countries have yet to resolve disputes over U.S. Section 232 tariffs on imports of steel and aluminum and over the retaliatory tariffs that Canada and Mexico have imposed on U.S. agricultural products. Senator Chuck Grassley is reported to have called on the Trump Administration to lift tariffs on steel and aluminum imports from Canada and Mexico before Congress begins considering legislation to implement USMCA. House Speaker Nancy Pelosi has reportedly stated that she wants \"stronger enforcement language\" and that USMCA talks should be reopened to tighten enforcement provisions for labor and environmental protections.", "For more information, see CRS Report R45661, Agricultural Provisions of the U.S.-Mexico-Canada Agreement ."], "subsections": []}, {"section_title": "U.S. Dairy Exports to Canada78", "paragraphs": ["The Canadian dairy sector limits production, sets prices, and restricts imports. Canadian imports of dairy products are restricted through TRQs, with over-quota tariffs in excess of 200% for some products. Although Canada is the second-largest market for U.S. dairy product exports, U.S. exports would likely be higher but for Canadian import restrictions.", "In recent years, U.S. milk producers began exporting increased quantities of ultra-filtered (UF) milk to Canada. UF milk is a high-protein liquid product made by separating and concentrating certain milk components (such as protein and fat) for use as ingredients in dairy products, such as cheese, yogurt, and ice cream. U.S. UF milk found a market among Canadian cheese makers in 2008 after Canada revised its compositional standards for cheese. This revision significantly reduced the use of several milk products that U.S. processors had been supplying to Canadian food manufacturers, including milk protein concentrates and dried protein products. ", "In recent years, growing demand for butterfat in Canada resulted in increased Canadian milk production and, consequently, surplus supplies of skim milk. To address the surplus, Canada adopted the Class 7 milk price classification in 2017 (Class 6 in Ontario). Milk classified as Class 7 comprises skim milk components\u2014primarily milk protein concentrates (MPC) and skim milk powder (SMP)\u2014used to process dairy products. Prices for Class 7 products were set at low levels. Once the Class 7 regime was implemented, Canadian skim milk products became cheaper. Canada expanded global exports of SMP with the consequence that U.S. producers lost exports of high-protein UF milk to Canadian cheese and yogurt processors.", "According to USDA, the value of U.S. UF milk exports to Canada peaked at nearly $107 million in 2015 but declined after the Class 7 regime was implemented in 2017 to $49 million in 2017 and $32 million in 2018. At the same time, Canada's exports of SMP more than tripled in 2017 to $133 million, compared with $42 million in 2016 before the Class 7 price regime was implemented. Eliminating Canada's Class 7 pricing regime became a priority for the U.S. dairy industry when NAFTA renegotiations commenced in 2017.", "Status : Under USMCA, Canada agreed to eliminate the Class 7 pricing regime six months after USMCA enters into force. Canada also agreed to reclassify Class 7 products according to their end use and base its selling price on a formula that takes into consideration the USDA reported nonfat dry milk price. Also under the agreement, Canada would be required to monitor its exports of MPC, SMP, and infant formula and report at the harmonized tariff schedule level monthly.", "Although Canada would maintain its milk supply management system under USMCA, it would expand TRQs for U.S. exports of milk, cheese, cream, skim milk powder, condensed milk, yogurt, and several other dairy products. U.S. dairy products within the USMCA TRQs would enter Canada duty free, while U.S. exports above the TRQ quantities would be subject to the existing higher over-quota tariffs. Likewise, the United States would establish TRQs for imports of Canadian dairy products. ", "In total, under USMCA Canada would grant the United States duty-free access to nearly 17,000 metric tons (MT) of dairy products the first year of the agreement, 100,000 MT in the sixth year, and 109,000 MT in year 19. The USMCA quota is specific to the United States and would be in addition to the 93,648 MT of WTO global quota, which is available under NAFTA to exports from the United States as well as to exports from other WTO member countries. For more information, see CRS In Focus IF11149, Dairy Provisions in USMCA . "], "subsections": []}, {"section_title": "U.S.-Canada Dispute Regarding the Sale of Wine in Grocery Stores82", "paragraphs": ["In Canada, the authority to import and distribute alcohol rests with the provincial governments. Starting in 2015, British Columbia (BC) initiated a series of policies and regulations that provide BC wine exclusive access to retail channels and grocery store shelves, while imported wine maybe sold in grocery stores only through a \"store within a store\" physically separated from the main retail outlet and with separate cash registers. Overall, the U.S.-based Wine Institute reports that Canada is the leading export market for California wine\u2014the leading wine producing state in the United States\u2014accounting for $444 million in sales in 2017.", "Status: In January 2017, the Obama Administration initiated trade enforcement action against Canada at the WTO regarding Canada's BC wine measures. Subsequent actions by the Trump Administration, in September 2017, led to the United States requesting formal consultations with Canada regarding BC wine measures. USTR states that \"discriminatory regulations implemented by British Columbia are unfairly keeping U.S. wine off of grocery store shelves\" and that the measures are inconsistent with Canada's commitments and obligations under the WTO. The Canadian wine industry estimates that wine imports account for nearly 70% of the Canadian wine market. It also points out that the BC Vintners Quality Alliance has been issuing store licenses for the industry since the 1980s. The United States reiterated its concerns as part of a second complaint issued in this case in July 2018. Argentina, Australia, New Zealand, and the EU have requested to join the consultation.", "The proposed USMCA addresses U.S. concerns about Canada's BC wine measures as part of a side letter to the proposed agreement. As outlined in the side letter, Canada would modify certain measures that provide preferential grocery store shelf space to wines produced within the province and \"implement any changes no later than November 1, 2019.\" "], "subsections": []}, {"section_title": "Other North American Trade Issues", "paragraphs": ["The proposed USMCA does not address all the issues that restrict U.S. agricultural exports to Mexico and Canada, nor does it include all of the changes sought by U.S. agricultural interest groups. For instance, Southeastern U.S. produce growers have been seeking changes to trade remedy laws to address imports of seasonal produce."], "subsections": [{"section_title": "Import Competition of Seasonal Produce from Mexico91", "paragraphs": ["Mexico's production of some fruits and vegetables\u2014tomatoes, peppers, cucumbers, berries, and melons\u2014has increased in recent years in part due to Mexico's investment in large-scale greenhouse production facilities and other types of technological innovations. Greenhouse production in Mexico continues to rise, with 2018 estimates of nearly 57,500 acres of produce grown under protection, up from an estimated 9,000 acres in 2017. USDA researchers reported that Mexico is the largest foreign supplier of U.S. imports of vegetables and fruits (excluding bananas).", "Representatives of the Florida Fruit and Vegetable Association (FFVA) claim that Mexico's investment in produce production is supported by government subsidies and should be addressed through countervailing duties (CVD) on U.S. imports of these products. They further state that these exports enter the United States at prices below the cost of production and should be countered by higher antidumping (AD) duties. FFVA also believes that Mexico's labor cost advantage in fruit and vegetable production gives Mexico a competitive advantage over U.S. produce growers. In general, trade concerns have centered on tomatoes, peppers, and berries. ", "One of the Trump Administration's initial agriculture-related objectives in the renegotiation of NAFTA included a proposal to establish new rules for seasonal and perishable products, such as fruits and vegetables. The proposal would have established a separate domestic industry provision for perishable and seasonal products in AD and CVD proceedings, making it easier for a group of regional producers to initiate an injury case and to prove injury, thereby implementing CVD or AD duties to be levied on the imported products responsible for the injury. This could protect certain U.S. seasonal fruit and vegetable products in some regions by making it easier to initiate trade remedy cases. USITC has previously reviewed trade remedy cases involving perishable agricultural products that have proven difficult to settle. ", "Some Members of Congress supported including seasonal protections as part of NAFTA's renegotiation. Others opposed including such protections, contending that seasonal production complements rather than competes with U.S. growing seasons, while still others worried it could open the door to an \"uncontrolled proliferation of regional, seasonal, perishable remedies against U.S. exports.\" Most U.S. food and agricultural sectors, including some fruit and vegetable producer groups, opposed including seasonal protections as part of the renegotiation. Some worried that efforts to push for seasonal protections would derail the renegotiation. Others claimed that such efforts would favor a few \"politically-connected, wealthy agribusiness firms from Florida\" at the expense of others in the U.S. produce industry and at the expense of both consumers and growers in other fruit and vegetable producing states, such as California. The Agricultural Technical Advisory Committee for Trade in Fruits and Vegetables (F&V ATAC) supported not including provisions in the NAFTA renegotiation, acknowledging that including such protections would generate \"significant opposition from Mexican and Canadian negotiators, in addition to raising concern by many in the U.S. agricultural community, including many in the fruit and vegetable industry.\" In January 2018, F&V ATAC passed a resolution supporting the withdrawal of the seasonal and perishable trade remedy proposal from the U.S. negotiating objectives.", "Status: The proposed USMCA that might replace NAFTA does not include changes to U.S. trade remedy laws to address seasonal produce trade. As a result, some in Congress have taken additional steps to try to address this issue. Bills were introduced in both the House and Senate in the 115 th Congress as part of the Agricultural Trade Improvement Act of 2018 ( S. 3510 ; H.R. 7015 ). These bills would have provided for CVD and AD procedures for seasonal producers and defined core seasonal industry in U.S. trade remedy laws, among other changes. These two bills were reintroduced in the 116 th Congress but renamed \"Defending Domestic Produce Production Act of 2019\" ( S. 16 ; H.R. 101 ). Current law generally requires that an injury case be supported by at least 50% of the domestic industry. The House and Senate bills would allow regional groups representing less than 50% of nationwide seasonal growers to initiate an injury investigation. Such changes could make it easier for a group of regional producers to initiate trade remedy cases."], "subsections": []}, {"section_title": "Withdrawal of the U.S.-Mexico Tomato Suspension Agreement109", "paragraphs": ["The U.S.-Mexico Tomato Suspension Agreement is an agreement between DOC and signatory producers/exporters of fresh tomatoes grown in Mexico that suspends the U.S. AD investigation into whether Mexican fresh tomatoes were sold into the U.S. market at less than fair value. Fresh tomatoes imported from Mexico have been governed by suspension agreements since 1996. The first suspension agreement on fresh tomatoes from Mexico became effective in November 1996. The Mexican signatory growers and the United States entered into new agreements in 2002 and 2008. The most recent agreement became effective in March 2013. Under the current agreement, the signatories agree to suspend the AD investigation and monitor compliance with the agreement. The basis for the suspension agreement was a commitment by each signatory producer/exporter to sell tomatoes at or above the stated reference price in order to eliminate the injurious effects of exports of fresh tomatoes to the United States. Analysis commissioned by the Fresh Produce Association of the Americas (FPAA) found that terminating the agreement could \"reduce the supply of tomatoes in the US market, and raise prices paid by consumers in the U.S., particularly during the winter tomato season (October-June).\"", "The agreement sets different floor prices for Mexican fresh tomatoes during the summer and winter and specifies prices for open field/adapted-environment and controlled-environment production. These price floors cover all types of fresh or chilled tomatoes from Mexico, including common round, cherry, grape, plum, pear, and greenhouse tomatoes. The agreement does not cover tomatoes that are for processing. ", "In early 2018, DOC initiated consultations with the Mexican tomato growers and exporters to negotiate possible revisions to the 2013 agreement. In addition, DOC initiated its five-year sunset review of the suspended AD investigation and published the preliminary and final results of its analysis in late 2018. DOC's analysis indicated that dumping of fresh tomatoes was likely to occur or recur and calculated weighted-average dumping margins of up to 188%. In November 2018, the Florida Tomato Exchange requested that the United States withdraw from the suspension agreement, eliminate the reference prices, and resume the related initial 1996 AD investigation. Several Members of Congress in both the House and the Senate have expressed support for withdrawing from the suspension agreement. Among the groups that oppose withdrawal are the FPAA and other groups representing Mexican growers and exporters as well as businesses, various associations, and local and county governments.", "Status: On May 7, 2019, the United States terminated the 2013 Suspension Agreement on Fresh Tomatoes from Mexico but said it plans to continue negotiations regarding a possible revised agreement. DOC initially announced its intention to withdraw from the agreement in February 2019 following its periodic review of the agreement, which concluded that Mexican fresh tomatoes have been sold into the U.S. market at less than fair value. Without a suspension agreement, an AD order could be issued if USITC makes a determination of financial injury to U.S. growers. Reportedly, the DOC and Mexico have been unable to develop a revised agreement that is acceptable to both sides, despite ongoing negotiations since early 2018. In April 2019, Mexico's tomato growers proposed to eliminate a price distinction between winter and summer season tomatoes and increase the reference price for USDA-certified organic tomatoes. The government of Mexico has expressed its disappointment about the U.S. decision. "], "subsections": []}, {"section_title": "U.S.-Mexico Sugar Suspension Agreements123", "paragraphs": ["In December 2014, DOC signed suspension agreements with the government of Mexico and Mexican sugar producers and exporters that prevented the imposition of CVD and AD on U.S. imports of Mexican sugar. This was a consequence of U.S. government determinations that Mexican sugar was being subsidized by the government of Mexico and was being sold into the U.S. market at less than fair value.", "The suspension agreements limit Mexico's sugar exports to the United States to the residual of U.S. needs for domestic human use in a given marketing year after subtracting U.S. production and imports from other countries. The agreements establish minimum reference prices for Mexican sugar that are above U.S. sugar program loan levels for domestically produced sugar. Another provision limits the share of Mexican sugar that can enter the United States as refined sugar. ", "After the suspension agreements took effect, a number of stakeholders in the U.S. sugar market asserted that the suspension agreements had not worked as intended and had not entirely eliminated the injury caused by the subsidization and dumping of Mexican sugar. One widely held criticism was that cane refiners who were dependent on imports of raw cane from Mexico had received an inadequate share of sugar from Mexico. Another criticism leveled at the agreements was that Mexican exporters were not always adhering to limits on the share of Mexican sugar imports that are refined sugar as compared with raw sugar nor to the specified minimum reference prices.", "In November 2016, the American Sugar Coalition\u2014representing sugar cane and sugar beet producers and sugar processors, refiners, and workers\u2014called on DOC to withdraw from the agreements, an action that could have caused AD and CVD duties to be imposed on Mexican sugar. Imperial Sugar Company, a U.S. cane refiner, also advocated for withdrawal. The Sweetener Users Association, which represents sugar-using businesses, recommended renegotiating the agreements to address their shortcomings and warned that terminating them would virtually eliminate Mexican sugar from the U.S. market. In November 2016, DOC issued results of a preliminary administrative review. In it, the DOC concluded that the agreements may not have entirely redressed the injury, and that certain import transactions may not have adhered to the terms in the agreements.", "Status: In June 2017, the United States and Mexico agreed to amendments to the suspension agreements. Under the amendments, effective October 1, 2017, the price of imported Mexican raw sugar was increased from $0.2225 per pound to $0.23 per pound. The price of imported refined sugar was increased from $0.26 per pound to $0.28 per pound. The maximum share of refined sugar imports was limited to 30%, with raw sugar imports constituting at least 70% of the total, compared with 53% and 47%, respectively, under the 2014 agreement. The agreement also requires that imported raw sugar be loaded in bulk and free flowing\u2014that is, not packaged. Any raw sugar imports that are packaged would be counted toward the refined sugar allotment. In addition, if USDA determines that the United States requires additional sugar imports to meet its needs, Mexico would be awarded the first opportunity to fill the need. For more information, see CRS In Focus IF10693, Amended Sugar Agreements Recast U.S.-Mexico Trade ."], "subsections": []}]}]}, {"section_title": "Other Major Trade Issues", "paragraphs": ["Several other trade issues may be of interest to Congress. A key objective of U.S. trade negotiations has been to establish a common framework for approval, trade, and marketing of the products of agricultural biotechnology. Among other high-profile issues, geographical indications are increasingly becoming an agricultural trade issue. In addition, U.S. farm and food interests continue to see potential market expansion opportunities in Cuba, but interested exporters regard a prohibition on private U.S. financing as a major obstacle to this end. On the import side of the trade ledger, in March 2019, the United States initiated its review of the Generalized System of Preference (GSP), which provides duty-free tariff treatment for certain products imported from developing countries. "], "subsections": [{"section_title": "Agricultural Biotechnology128", "paragraphs": ["Agricultural biotechnology refers primarily to the commercial use of recombinant DNA techniques to genetically modify or bioengineer plants and animals so that they have certain desired characteristics, primarily herbicide tolerance and pest resistance. More recently, the term has also come to encompass a range of new genetic technologies involving genomic editing (e.g., CRISPR-Cas9) rather than recombinant DNA techniques alone. U.S. soybean, corn, cotton, and sugar beet producers have rapidly adopted genetically engineered (GE) varieties of these crops since commercialization began in the mid-1990s. The United States is the leading country in cultivating GE crops, accounting for more than 40% of total acres growing GE crops worldwide. ", "Elsewhere in the world, the adoption and cultivation of GE crops by both producers and consumers has been mixed. In the EU, for example, the European Commission (EC) may approve of GE products for import and marketing, but individual member states may maintain bans. GE crop production in the EU accounts for about 1% of crop acreage\u2014about 325,000 acres\u2014all in a single variety of pest-resistant GE corn: MON810. This particular variety is cultivated predominantly in Spain and Portugal. Eighteen EU member states ban cultivation of GE crops and/or have specific rules on the trade of GE seeds. EU officials have been cautious in permitting GE products to be cultivated within the EU, but EU-approved varieties of GE commodities can be imported. ", "All GE-derived food and feed imported to the EU must be labeled as such. The EU's regulatory framework regarding biotechnology is generally regarded as one of the most stringent worldwide. Many U.S. producers assert that EU labeling and traceability regulations for approving GE crops have effectively limited certain U.S. agricultural exports to the EU. The EU's approval process for GE products\u2014effectively a de facto moratorium since 1998\u2014has been a source of dispute since 2003 and continues to be a contentious issue in the current U.S.-EU agricultural trade negotiations.", "While the EU as a policymaking entity generally supports GE production, public opinion remains strongly opposed to GE food and crops in most EU member states. This opposition in the EU has also been an important factor in the acceptance of GE crops in lesser developed countries. Most African countries have largely followed the EU in restricting or banning the cultivation of GE crops. ", "The U.S. Secretary of Agriculture stated that the United States will not regulate plants created through genomic editing so long as they are developed without using a plant pest as the donor or vector and are not plant pests themselves. In contrast, the EU Court of Justice ruled that organisms obtained by mutagenesis are genetically modified organisms (GMOs) and are in principle within the scope of the GMO Directive, which governs the deliberate release of GMOs into the environment. The EU Court considers that the risks posed by new mutagenesis techniques such as gene editing (CRISPR-Cas9) to be similar to crops created from transgenesis, wherein GE crops have genetic material introduced from other organisms. ", "China's reluctance to approve GE crops or GE imports is a source of frustration for U.S. agricultural interests. While GE crops are technically banned from China, U.S.-developed GMOs appear to be grown in China without authorization despite Chinese laws banning their cultivation. In September 2016, China agreed to improve its agricultural biotechnology approval process. That commitment did not include specific details, although China stated that they are committed to review eight long-pending applications of agricultural biotechnology in a \"timely, ongoing, and science-based manner.\" On January 8, 2019, the Chinese Ministry of Agriculture and Rural Affairs announced approval of five new biotech traits in imported crops for processing, the first new approvals since June 2017. At the same time, the ministry amended the regulations on safety assessment, import approval, and labeling of agricultural GMOs without notifying the changes to the WTO nor soliciting comments from stakeholders.", "With respect to the proposed USMCA, the agreement specifically includes provisions to improve transparency in approving and bringing to market products of agricultural biotechnology, something NAFTA did not cover. USMCA provisions cover crops produced with all biotechnology methods, including recombinant DNA and gene editing. ", "Trade negotiations concerning agricultural biotechnology also involve labeling issues and other provisions that address the unintended presence of GE products in non-GE shipments. As the United States implements its new \"bioengineered food disclosure\" standard, it may raise concerns among some trading partners\u2014particularly the EU. The food disclosure standard, for example, will not mandate labeling of highly refined ingredients from any GE crop if \"no modified genetic material\" is detectable. This provision would exclude food products, for example, containing high-fructose corn syrup, refined soybean oil, and sugar from sugar beets. ", "Status: A key objective of U.S. trade negotiations, such as the U.S.-EU agricultural trade negotiations and U.S. negotiations with China, has been to establish a common framework for GE approvals. This includes labeling practices consistent with the U.S. guidelines and harmonized regulatory procedures concerning GE presence in products that are consistent with the Codex Alimentarius Commission Annex on Food Safety Assessment in Situations of Low-Level Presence of Recombinant-DNA Plant Material in Food . The proposed USMCA specifically includes provisions to improve transparency in approving and bringing to market products of agricultural biotechnology. For other negotiations, U.S. objectives on agricultural biotechnology, for the most part, remain aspirational. Additionally, the United States believes that U.S. export opportunities are being impaired due to EU pressure on lesser developed countries to adopt EU SPS measures that ban GE products. "], "subsections": []}, {"section_title": "Geographical Indications (GIs)140", "paragraphs": ["GIs are geographical names that act to protect the quality and reputation of a distinctive product originating in a certain region. The term GI is most often applied to wines, spirits, and agricultural products. Some food producers benefit from the use of GIs by giving certain foods recognition for their distinctiveness, thereby differentiating them in the marketplace. In this manner, GIs can be commercially valuable. GIs may also be eligible for relief from acts of infringement or unfair competition. While the use of GIs may protect consumers from deceptive or misleading labels, they also have the potential to impair trade when the use of names that are considered common or generic in one market are protected in another. Examples of registered or established GIs include Parmigiano Reggiano cheese and Prosciutto di Parma ham from the Parma region of Italy, Toscano olive oil from the Tuscany region of Italy, Roquefort cheese from France, Champagne from the region of the same name in France, Irish whiskey, Darjeeling tea, Florida oranges, Idaho potatoes, Vidalia onions, Washington State apples, and Napa Valley wines. ", "GIs\u2014along with other types of intellectual property such as patents, copyrights, trademarks, and trade secrets\u2014are an example of intellectual property rights (IPR). The use of GIs has become a contentious international trade issue, particularly for U.S. wine, cheese, and sausage makers. In general, some consider GIs to be protected intellectual property, while others consider them to be generic or semi-generic terms. For example, in the United States, feta is considered the generic name for a type of cheese. However, it is protected as a GI in Europe. As such, feta cheese produced in the United States may not be exported for sale in the EU, since only feta produced in countries or regions currently holding GI registrations may be sold commercially. ", "Laws and regulations governing GIs differ markedly between the United States and EU, which further complicates this issue. In addition, registered products often fall under GI protections in certain third-country markets, and some EU GIs have been trademarked in some non-EU countries. This has become a concern for U.S. agricultural exporters following a series of recently concluded trade agreements among the EU and Canada, Japan, South Korea, South Africa, and other countries that in many cases are also trading partners of the United States. As a result, Canada has agreed to recognize a list of 143 EU GIs in Canada, and Japan has agreed to recognize 71 EU GIs in Japan. More than 4,500 product names are registered and protected in the EU for foods, wine, and spirits originating in both EU member states and other countries. ", "The EU's GI program remains a contentious issue for many in the U.S. Congress, particularly among Members with dairy constituencies. Some have long expressed their concerns about EU protections for GIs, which they claim are being misused to create market and trade barriers. A 2019 study commissioned by the U.S. dairy industry forecasts declining U.S. cheese exports due to expanding restrictions on the use of generic terms such as parmesan, asiago, and feta cheese. However, some U.S. agricultural industry groups are trying to create a system similar to the EU GI system for U.S. products to promote certain distinctive American agricultural products as part of the American Origin Products Association, which represents certain U.S. potato, maple syrup, ginseng, coffee, and chile pepper producers and certain U.S. winemakers, among other regional producer groups, and seeks to work with federal authorities to \"create of a list of qualified U.S. distinctive product names, which correspond to the GI definition.\" ", "Status: GIs are included among other IPR issues in the current U.S. trade agenda. The proposed USMCA protects common names and limits the ability to register new GIs that some producers regard as common (generic) names. USMCA includes a side letter between the U.S. and Mexico regarding the use of 33 cheese names.", "GIs have been an active area of debate between the United States and EU in previous trade negotiations. GIs continue to be a trade issue for USTR, and the United States is working \"to advance U.S. market access interests in foreign markets and to ensure that GI-related trade initiatives of the EU, its Member States, like-minded countries, and international organizations, do not undercut such market access,\" stating that the EU's GI agenda \"significantly undermines the scope of trademarks and other [intellectual property] rights held by U.S. producers and imposes barriers on market access for American-made goods that rely on the use of common names.\" Previously, USDA officials have indicated that the United States would likely not agree to EU demands to reserve certain food names for EU producers and have expressed concerns about the EU's system of protections for GIs. GIs are also included in the United States' IPR negotiating objectives for the U.S.-EU and U.S.-Japan trade negotiations."], "subsections": []}, {"section_title": "U.S. Farm Trade with Cuba152", "paragraphs": ["The U.S. embargo on trade and financial transactions with Cuba dates from 1962. The sanctions on Cuba were partially eased in 2000 with regard to U.S. exports of agricultural products with the enactment of the Trade Sanctions Reform and Export Enhancement Act of 2000 ( P.L. 106-387 ). The law allows for one-year export licenses for selling agricultural commodities to Cuba but without the availability of U.S. government assistance, foreign assistance, export assistance, credits, or credit guarantees to finance the trade. The law also denies exporters of agricultural goods access to U.S. private commercial financing or credit, although U.S. private export financing is permitted for all other authorized export trade to Cuba. Moreover, all agricultural product transactions must be conducted on a cash-in-advance basis or with financing from third countries. ", "Cuba received almost $5.7 billion, in nominal dollars, in U.S. agricultural products from FY2001 to FY2018. U.S agricultural exports to Cuba peaked in FY2008, reaching $658 million. Major exports during the earlier years included poultry, corn, soybeans, wheat, rice, and feed and fodder products including soybean meal and distillers grains. Since FY2008, U.S. agricultural exports to Cuba declined partly due to negligible exports of rice, wheat, cotton, beef, pork, and distillers grains. Shipments of U.S. farm products to Cuba amounted to $230 million in FY2018, down from $266 million in FY2017. ", "A USDA attach\u00e9 report on Cuba contends that the decline in U.S. market share in Cuba \"is largely attributable to a decrease in bulk commodity exports from the United States in light of favorable credit terms offered by key competitors.\" The same report concluded that lifting U.S. restrictions on travel and capital flow to Cuba, and enabling USDA to conduct market development and credit guarantee programs in Cuba, would help the United States recapture its market share in Cuba. ", "A 2016 USITC report noted that Cuba imports 70%-80% of its food needs, which amount to some $2 billion per year. Given the price competitiveness and logistical advantages of key U.S. agricultural products compared with export competitors, ITC indicated that U.S. agricultural exports could expand significantly\u2014to about $800 million within five years\u2014if the remaining U.S. restrictions on trade with Cuba were removed. The report identified corn, wheat, rice, and dairy products (particularly milk powder) as the commodities that could see the greatest dollar increase in exports over the near term. The same report observed that U.S. agricultural suppliers view prohibitions on providing credit on food and agricultural product sales and U.S. restrictions on travel to Cuba as key obstacles to increasing U.S. farm exports to the island nation. ", "USDA also maintains that Cuba would likely develop comparative advantages in the production and export of certain citrus and tropical fruit, vegetables, tropical plants, and cut flowers. Some agricultural interests in Florida have expressed concern about potentially subsidized competition from Cuba and exposing U.S. agriculture to invasive pests and diseases. Sugar trade could be an area that would require negotiations. The United States is a major sugar importer, and Cuba is a sugar exporter. Should the embargo be further eased, Cuba may wish to export sugar to the United States. The United States tightly manages sugar imports, so any access for Cuba to export sugar to the U.S. market would have to be negotiated. ", "Status: In December 2014, President Obama announced a major shift away from a sanctions-based policy with Cuba toward a policy of engagement. President Obama acknowledged that he did not have the authority to lift the embargo because it is codified into Section 102(h) of the Cuban Liberty and Democratic Solidarity Act of 1996, P.L. 104-114 . Removing the overall economic embargo would require amending or repealing that law as well as other statutes\u2014such as the Cuban Democracy Act of 1992 (Title XVII of P.L. 102-484 ) and the Trade Sanctions Reform and Export Enhancement Act ( P.L. 106-387 )\u2014that include provisions impeding normal economic relations with Cuba. In 2017, the Trump Administration introduced new sanctions and partially rolled back some of the Obama Administration's efforts to normalize relations, including adding restrictions on transactions with companies controlled by the Cuban military and the elimination of individual people-to-people travel. On March 4, 2019, the Administration allowed lawsuits to go forward against some 200 Cuban entities operated by the Cuban military, intelligence, or security services for trafficking in confiscated property.", "Amid this policy shift toward Cuba, the 2018 farm bill ( P.L. 115-334 ) permits funding to be used to operate two U.S. agricultural export promotion programs in Cuba\u2014the Market Access Program and the Foreign Market Development Cooperator Program. ", "For more on U.S. agricultural trade with Cuba, see CRS Report R44119, U.S. Agricultural Trade with Cuba: Current Limitations and Future Prospects . For information on U.S. policy toward Cuba, see CRS Report R44822, Cuba: U.S. Policy in the 115th Congress and CRS In Focus IF10045, Cuba: U.S. Policy Overview ."], "subsections": []}, {"section_title": "Generalized System of Preferences (GSP)159", "paragraphs": ["The GSP provides duty-free tariff treatment for certain products from designated developing countries. U.S. agricultural imports under GSP totaled $2.4 billion in 2018, accounting for about 15% of the value of total U.S. GSP imports. Leading agricultural imports (based on value) include processed foods and food processing inputs, beverages and drinking waters, processed and fresh fruits and vegetables, sugar and sugar confectionery, olive oil, fresh fruits, and miscellaneous food preparations and inputs for further processing. In 2018, the six leading GSP countries\u2014Thailand, India, Turkey, Indonesia, Brazil, and Argentina\u2014accounted for nearly 70% of all GSP-eligible U.S. agricultural imports. In recent years, a debate has emerged over the limits of eligibility for GSP treatment. ", "Over the past decade, GSP has been extended through a series of short-term extensions\u2014most recently until December 31, 2020 ( P.L. 115-141 ). This latest extension made certain technical modifications related to GSP imports and required USTR to submit an annual report to Congress on its efforts to ensure that GSP countries are meeting the eligibility criteria for the program. ", "Members of Congress have expressed a range of views on whether to include emerging market developing countries (e.g., India, Brazil) as GSP beneficiaries or limit the program to least-developed countries. Some GSP beneficiary countries have become ineligible to participate in the U.S. program. For example, in 2014, Russia's GSP status was terminated, and in 2017, Seychelles, Uruguay, and Venezuela were graduated out of the program because it was determined they had become \"high income\" countries. Argentina's GSP eligibility was suspended in 2012 but was reinstated in 2017. In early 2018, USTR initiated a series of actions regarding GSP as part of its ongoing review of specific country practices. USTR's review is in response to concerns about the countries' compliance under the program but is also part of its GSP country eligibility assessment and petition process. Some of the countries subject to USTR's review are actively exporting to the United States under GSP, including India, Indonesia, and Turkey. Combined, these three countries accounted for an estimated $800 million in 2018, or about one-third of the value of all GSP-eligible agricultural imports to the United States. ", "The interagency Trade Policy Staff Committee, chaired by USTR, reviews and revises the lists of eligible products annually, generally on the basis of petitions received from beneficiary countries or interested parties requesting that additional products be added or removed. When a country's petition for product eligibility is approved, the product becomes GSP-eligible for all GSP-beneficiary developing countries (or only for least developed countries if so designated). Based on previous reviews, opinions within the U.S. agricultural industry are often mixed, reflecting both support for and opposition to the current program.", "Status: USTR initiated its current annual GSP product and country review in March 2019 and announced its intention to terminate GSP designations for Turkey and India \"because they no longer comply with the statutory eligibility criteria.\" Press reports suggest that continued U.S. GSP eligibility is a top priority for India, while other reports suggest that Turkey views U.S. GSP review standards as being in violation of WTO rules. Action by USTR to terminate GSP designations for Turkey and India could increase trade tensions between the United States and these two trading partners, potentially affecting future trade relations and U.S. agricultural exports. Some in Congress have expressed opposition to the Administration's stated intent to terminate India's designation as a GSP beneficiary. A survey of companies conducted by the Coalition for GSP suggests that terminating India's and Turkey's GSP beneficiary status could adversely affect U.S. businesses, including some food and agricultural companies, through higher tariffs for some imported products and ingredients."], "subsections": []}]}, {"section_title": "U.S.-EU Agricultural Trade Issues", "paragraphs": ["The EU has historically been one of the top U.S. agricultural export markets, currently ranking as the fourth-largest buyer of U.S. agricultural products. U.S. agricultural exports to the EU totaled $12.7 billion in FY2018 and for FY2019 is forecast to reach $13.4 billion. Tree nuts, soybeans, and alcoholic beverages are among the top U.S. exports to the EU based on value. The EU is also a major supplier of U.S. agricultural products. The United States imported $23.7 billion worth of agricultural products in FY2018, and USDA forecasts imports of $24 billion in FY2019. Processed agricultural products such as wine and beer, essential oils, cheese, and other consumer-oriented food products are the top U.S. purchases from the EU. Based on the value of agricultural trade, the U.S. agricultural trade deficit with the EU was $11 billion in FY2018 and is projected to be $10.6 billion in FY2019. "], "subsections": [{"section_title": "U.S.-EU Agricultural Trade Negotiations172", "paragraphs": ["The United States and the EU are the world's largest mutual trade and investment partners. Although this trading relationship is largely harmonious, the EU was among those U.S. trading partners that placed retaliatory tariffs on some U.S. products in response to Section 232 tariffs imposed by the Trump Administration on U.S. imports of steel and aluminum. Effective in June 2018, the EU imposed tariffs of 25% on U.S. exports of prepared vegetables and legumes, grains, fruit juice, peanut butter, and whiskey, among other products. These tariffs affect about $1 billion in U.S. agricultural exports to the EU, or about 8% of total U.S.-EU agricultural trade in recent years. In July 2018, the Trump Administration and the EC issued a joint statement announcing that they were forming an executive working group that will seek to reduce transatlantic barriers to trade, including eliminating non-auto industrial tariffs and non-tariff barriers. In October 2018, USTR officially notified Congress of the Administration's intention to start negotiations. ", "The WTO reports that the simple average WTO MFN tariff applied to agricultural products entering the United States was 5.1% in 2014, compared to an average of 12.2% for products entering the EU. Including all products imported under an applied tariff or a TRQ, USDA reports that the calculated average rate across all U.S. agricultural imports is roughly 12%, well below the EU's average of 30%. Restrictive TRQs on EU imports of agricultural products are an issue for U.S. exporters. ", "In 2013, the Obama Administration engaged in negotiations with the EU as part of the Transatlantic Trade and Investment Partnership (T-TIP) with the goal of concluding a \"comprehensive and high standard\" agreement within two years. T-TIP's last negotiating round was in October 2016, and negotiations were largely paused for both sides to evaluate progress. Underlying regulatory and administrative differences between the United States and the EU on issues of food safety, public health, and IPR for some types of agricultural products have been areas of contention in these negotiations. ", "The United States and the EU have engaged in a series of long-standing disputes involving agricultural products and certain SPS standards. These include, for example, delays in reviews of biotech products (limiting U.S. exports of grain and oilseed products), prohibitions on growth hormones in beef production and certain antimicrobial and pathogen reduction treatments (limiting U.S. meat and poultry exports), and complex certification requirements (limiting U.S. exports of processed foods, animal products, and dairy products). Other EU regulations of concern to U.S. exporters include the arguable lack of a science-based focus in establishing SPS measures, difficulty meeting food safety standards and securing product certification, the perceived lack of cohesive labeling requirements, and stringent testing requirements that appear to be implemented often inconsistently among EU member nations. Some U.S. agricultural producers also oppose EU policies on GIs. (See section \" Geographical Indications (GIs) .\")", "Status: In January 2019, USTR announced its negotiating objectives for a U.S.-EU trade agreement following a public comment period and a hearing involving several leading U.S. agricultural trade associations. These include agricultural policies\u2014both market access and non-tariff measures such as TRQ administration and other regulatory issues. Among regulatory issues, key U.S. objectives include harmonizing regulatory processes and standards to facilitate trade, including SPS standards, and establishing specific commitments for trade in products developed through agricultural biotechnologies. The U.S. objectives also include addressing GIs by protecting generic terms for common use. U.S. agricultural interests generally support including agriculture as part of the U.S. negotiating objectives for a U.S.-EU trade agreement. Several Members of Congress support this position and are opposed to the EU's decision to exclude agricultural policies in their negotiating mandate. A letter to USTR from a bipartisan group of 114 House Members states that \"an agreement with the EU that does not address trade in agriculture would be, in our eyes, unacceptable.\" Senate Finance Committee Chairman Chuck Grassley has reiterated, \"Bipartisan members of the Senate and House \u2026 have voiced their objections to a deal without agriculture, making it unlikely that such a deal would pass Congress.\" The EU, however, has indicated that it is planning for a more limited negotiation that does not include agricultural products and policies. In late January 2019, the EC published a progress report confirming that its joint agenda does not include agriculture, since it \"is a sensitivity for the EU side.\" The EU negotiating mandate states that a key EU goal is \"a trade agreement limited to the elimination of tariffs for industrial goods only, excluding agricultural products.\"", "Separately, the EU has taken certain measures to avoid escalating agricultural trade tensions with the United States, for example, by increasing imports of U.S. soybeans as a source of biofuels and by proposing to lift a ban on certain pest-resistant American grapes in EU wine production, among other measures. At the same time, the EU has announced that it would retaliate against \"unlawful subsidies given\" to Boeing by imposing increased tariffs on imports of U.S. food products such as frozen fish, fruits, wine, liquors, and ketchup."], "subsections": []}, {"section_title": "U.S.-EU Dispute over U.S. Olive Imports189", "paragraphs": ["In 2018, the United States concluded an injury investigation regarding ripe olives imported from Spain based on complaints from two California-based olive producers. In June 2018, DOC announced its affirmative final determinations in the AD and CVD investigations. In the AD investigation, DOC found that Spanish ripe olives were being sold in the United States at less than fair value and calculated dumping margins ranging from about 17% to 25% on imports of ripe olives from Spain. In the CVD investigation, DOC determined that Spanish ripe olive producers and exporters were subsidized at rates ranging from about 8% to 27%. In July, USITC determined that U.S. producers were materially injured by imports of ripe olives from Spain. Given these determinations, AD and CVD duty orders on U.S. Spanish ripe olive imports were issued and became effective on August 1, 2018.", "Status: In January 2019, the EU requested WTO dispute consultations with the United States concerning U.S. AD and CVD duties imposed on imported ripe olives from Spain. The EU position is that these measures are inconsistent with the U.S. commitments under the WTO. USTR states that \"the EU's case is without merit\" and that it intends to \"fight it very aggressively.\" AD/CVD duties levied against ripe olives from Spain have reportedly already cost the Spanish olive industry an estimated $27 million in lost exports. "], "subsections": []}, {"section_title": "U.S.-EU Beef Hormone Dispute196", "paragraphs": ["The United States and the EU have engaged in a long-standing trade dispute over the EU's ban on hormone-treated meat. The EU adopted restrictions on livestock production in the early 1980s, limiting the use of natural hormones to therapeutic purposes, banning the use of synthetic hormones, and prohibiting imports of animals and meat from animals that have been administered the hormones. In response, the United States suspended trade concessions with the EU in 1999 by imposing retaliatory tariffs of 100% ad valorem on selected food products from EU countries. Despite an ongoing series of WTO dispute settlement proceedings and decisions, the United States and the EU continue to disagree on a range of legal and procedural issues, as well as the scientific evidence and consensus affirming the safety of hormone-treated beef.", "Many in the United States perceive EU's action and the use of SPS measures and non-tariff barriers as disguised protectionism intended to unjustifiably restrict and discriminate against product exports from certain countries. In January 2009, USTR announced its intent to make changes to the list of EU products subject to increased tariffs under the dispute, including changes to the EU countries and products affected, with additional tariffs on some products. The EU claimed that this action constituted an \"escalation\" of the dispute. In May 2009, following a series of negotiations, the United States and the EU signed a memorandum of understanding that phased in certain changes over the next several years, and the United States suspended its retaliatory tariffs for imported EU products under the dispute.", "As part of the 2009 memorandum, the EU granted market access to U.S. exports of beef raised without growth promotants as part of its High-Quality Beef (HQB) TRQ. The EU's HQB quota is currently set at 45,000 MT annually and assessed a customs tariff of 20%. However, the HQB quota remains open to other beef exporting nations, which effectively limits the ability for U.S. beef producers to fully benefit under the quota. According to USTR and the U.S. beef industry, most of the HQB quota has been filled by countries other than the United States, and the EU has been unwilling to consider an allocation that would reserve a significant part of the HQB quota for the United States. ", "In December 2016, USTR proposed reinstating retaliatory tariffs on EU products under the dispute. In February 2017, USTR convened a hearing to review this possible retaliatory action. To date, the United States has not imposed retaliatory tariffs connected to the U.S.-EU beef hormone dispute. ", "Status: The EU continues to impose bans and restrictions on meat produced using hormones, beta agonists, and other growth promotants, and it allows only imports of beef produced without hormones subject to the EU's HQB quota. The United States maintains that scientific evidence demonstrates that meat produced using hormones, beta agonists, and other growth promotants is safe for consumers.", "The United States continues to seek a U.S.-specific allocation of the EU's HQB import quota. In late 2018, the EU agreed to review its existing HQB quota and renegotiate its quota with the United States with the expectation that a revised HQB agreement would be implemented in early 2019. In March 2019, press reports indicated that the U.S. and EU had reached an \"agreement in principle\" for reallocating the EU's HQB quota, which could provide the United States a share of EU's annual quota. If realized, such an agreement could result in additional market access to the EU for U.S. beef certified as produced without hormones."], "subsections": []}, {"section_title": "U.S.-EU Dispute over Pathogen Reduction Treatments (PRTs)207", "paragraphs": ["In January 2009, the United States escalated a long-running dispute with the EU over its refusal to accept imports of U.S. poultry that are subject to certain pathogen reduction treatments (PRTs). PRTs are antimicrobial rinses that have been approved for use by the USDA in poultry production to reduce the amount of microbes on meat. Meat and poultry products processed with PRTs are judged safe by the United States and also by European food safety authorities. However, the EU prohibits the use of PRTs and the importation of poultry treated with these substances. The EU generally opposes such chemical interventions and asserts that its own poultry producers follow much stricter production and processing rules that are more effective in reducing microbiological contamination than simply washing poultry products. In general, EU consumer groups argue that the use of such treatments compensates for poor hygiene in the supply chain. The United States requested WTO consultations with the EU on the matter, a prerequisite first step toward the establishment of a formal WTO dispute settlement panel. A WTO panel was subsequently established in November 2009, but this case has not moved forward.", "In 2013, USDA submitted an application for the approval of peroxyacetic acid as a PRT for poultry. Although the EU initially put forward a proposal to authorize the PRT, the EU withdrew its proposal in December 2015, citing the European Food Safety Authority's (EFSA) opinion of insufficient evidence of peroxyacetic acid's efficacy against campylobacter. ", "EFSA cleared lactic acid for reducing pathogens on beef carcasses, cuts, and trimmings in 2011. In 2013, the EU lifted its ban on the use of lactic acid in beef PRTs on beef carcasses, half-carcasses, and beef quarters in the slaughterhouse. In 2017, the National Pork Producers Council submitted an application to EFSA to approve organic lactic and acetic acid for use on pork carcasses and cuts. EFSA's panel report, issued in October 2018, concluded that use of the treatments do not pose a safety concern provided that the substances comply with the EU specifications for food additives and that their use is efficacious compared to untreated meat. However, EFSA raised questions about whether lactic and acetic acid were more efficacious than water treatment for certain applications.", "Status: The United States continues to maintain that PRTs are a \"critical tool during meat processing that helps further the safety of products being placed on the market\" and continues to seek approval of certain PRTs for beef, pork, and poultry. To date, however, the United States and the EU have not been able to agree on a number of issues related to veterinary equivalency, and the EU continues to prohibit any substance other than water to remove contamination from animal products unless the EU approves the substance."], "subsections": []}, {"section_title": "EU Regulation of Edible Gelatin and Collagen215", "paragraphs": ["In December 2018, USDA's Animal and Plant Health Inspection Service (APHIS) responded to the WTO notification of a new EU regulation, 2017/625, concerning new requirements for gelatin and collagen entering the EU for human consumption. In FY2018, the U.S. exported over $199 million worth of raw materials to the EU for the production of gelatin and collagen that were intended for human consumption. APHIS and industry trade groups have objected to the EU's new requirement, which would be enforceable as of December 14, 2019.", "U.S. animal byproduct exports to the EU follow an EU regulation in force since 2011 that provides detailed rules for trade in animal byproducts. The current regulation allows APHIS to make changes to the list of eligible U.S. animal byproduct facilities that are authorized to export to the EU. The new EU regulation would require all U.S. animal byproduct exporters to register their establishments in the EU Trade Control Expert System (TRACES). APHIS contends that the TRACES registration process is cumbersome in that it could take more than a month to add a new facility or to amend an existing approval, creating delays that could potentially impede trade. ", "Currently, the EU recognizes only U.S. meat intended for human consumption overseen by the Food Safety and Inspection Service (FSIS) of USDA as equivalent to EU-produced products. As a result, many FSIS-inspected establishments are already listed in TRACES. However, not all animal byproduct facilities in the United States are overseen by FSIS, and these may not already be listed on TRACES. Some raw materials intended for collagen or gelatin products may have originated from FSIS-inspected establishments, but processed products and animal feeds may be overseen by U.S. Food and Drug Administration or other federal agencies. The new EU proposed regulation would eventually allow many of these facilities to be listed in TRACES. ", "Under the current EU Regulation 142/2011 Chapter 8 Health Certificate, APHIS is the recognized oversight authority for U.S. exports. The EU's proposed 2017 regulation Model Certificate would require that APHIS be present at all times during the loading of animal byproducts into a container. U.S. trade associations have expressed the view that the EU-specific certificate requirements are not consistent with guidance provided by Codex Alimentarius\u2014the international food standards organization that sets guidelines to protect public health and ensure fair practices in the food trade. Instead, they allege that the EU requirements are unnecessarily restrictive and would have \"the effect of closing the EU market to the majority of U.S. hides and skins exported for the purposes of edible gelatin and collagen production.\" ", "Status: In December 2018, APHIS submitted comments to the WTO in response to the proposed EU 2017 draft regulation. APHIS \"requests that the EU delay the proposed implementation date to allow for competent authorities [USDA] to adequately prepare for implementation and provide the EU additional time to clarify its requirements.\" Officials at APHIS await an official response from the EU. "], "subsections": []}]}, {"section_title": "Issues Related to Livestock Trade", "paragraphs": ["In 2018, exports of U.S. livestock and products totaled $29.6 billion, while imports totaled $16.5 billion. Foreign demand for U.S. animals and products supports prices of domestic livestock, poultry, and dairy products, while imports help to meet U.S. consumer demand for a variety of livestock and dairy products. U.S. producers in the livestock sector look to the U.S. government to negotiate market access agreements, monitor international trading policies, and settle trade disputes, including restrictions that certain countries impose on U.S. exports in response to animal disease concerns. "], "subsections": [{"section_title": "Export Bans on U.S. Meat and Poultry222", "paragraphs": ["In 2019, the USDA forecasts that exports of meat and poultry products will represent about 17% of U.S. domestic production. Periodically, foreign countries impose export bans on U.S. meat products in response to an outbreak of certain animal diseases. The bans are disruptive for livestock producers and meat exporters, are often inconsistent with internationally accepted protocols, and vary in terms of how broadly and how long trading partners apply them. For example, bans were imposed on U.S. beef exports because of the discovery of bovine spongiform encephalopathy (BSE, or mad cow disease) in 2003. An outbreak of highly pathogenic avian influenza (HPAI) at the end of 2014 and early 2015 in U.S. turkey and egg-laying flocks triggered export bans on poultry products by more than 30 countries. The bans on U.S. broiler meat exports were imposed for various periods of time even though the HPAI outbreaks were not in areas in close proximity of commercial broiler production.", "The World Organization for Animal Health (known as OIE) has established trade protocols when disease outbreaks occur in countries that export meat and poultry products. According to OIE, in most cases total export bans are not recommended or needed when there is a BSE or HPAI discovery or outbreak in exporting countries. In 2013, the OIE determined that the United States is at \"negligible risk\" for BSE, meaning that U.S. surveillance and safeguard systems are strong. For HPAI, USDA, in collaboration with states, has implemented increased flock biosecurity and has a system in place to rapidly contain and eradicate an outbreak of HPAI.", "Over the years, while some foreign markets imposed total bans on U.S. beef exports following the 2003 BSE incident, other export markets for U.S. beef imposed specific conditions for imports of U.S. beef. For example, Japan and South Korea\u2014two importers of U.S. beef\u2014require that imported U.S. beef be produced from cattle under 30 months of age. China did not lift its ban on U.S beef exports until 2017 and included an age restriction when it did. Regarding poultry, some foreign markets imposed total bans on poultry exports during the HPAI outbreak, while other markets imposed export bans only from the regions affected by the outbreak, consistent with the recommended OIE protocol. As the United States demonstrated that the outbreak was contained and then eliminated, most of these bans were lifted.", "Status: China lifted the ban on U.S. beef in 2017 but restricts imports of U.S. beef to cattle under 30 months of age, similar to other countries that maintain age restrictions. The OIE guidelines do not include age restrictions for countries with the \"negligible risk\" status. China also requires that U.S. exporters of beef to China participate in the USDA Agricultural Marketing Service export verification program, which verifies that U.S. suppliers are meeting importing country requirements. In 2017 and 2018, the U.S. shipped about 10,000 MT of beef to China, representing 0.5% total U.S. beef exports.", "China continues to ban U.S. exports of poultry meat because of the HPAI outbreak and has been unwilling to accept regionalization\u2014the internationally accepted principle that export bans be applied only to areas affected by an animal disease outbreak. In 2018, the United States and South Korea reached an agreement accepting regionalization in the event of an HPAI outbreak in the United States instead of imposing nationwide bans."], "subsections": []}, {"section_title": "U.S. Meat and Poultry Imports230", "paragraphs": ["Currently, 33 countries are eligible to export meat and poultry to the United States. Before the United States authorizes imports of meat or poultry, APHIS conducts risk assessments of any foreign animal diseases that could pose a threat to U.S. animal health. Also, FSIS must determine if a foreign meat or poultry inspection system provides an \"equivalent\" level of sanitation and protection of public health as the U.S. system. Foreign governments document how inspection systems are regulated, and FSIS conducts onsite audits of foreign facilities. FSIS also conducts equivalency verification and periodic audits of countries already approved to export meat and poultry to the United States."], "subsections": [{"section_title": "Imports of Chicken from China", "paragraphs": ["In August 2013, FSIS confirmed that China's poultry processing inspection system was equivalent to the U.S. poultry inspection system. This determination allowed China to export processed (cooked) poultry meat that is sourced raw from the United States or from countries eligible to export poultry to the United States. In March 2016, FSIS recommended that the process of verifying equivalency for China's poultry slaughter inspection system move forward. In August 2017, FSIS released an audit report confirming that China's poultry processing system remained equivalent. To date, USDA has not issued a final rule on equivalency for China's poultry slaughter system.", "These actions were the culmination of a process that began in 2005, when China requested that USDA evaluate its poultry inspection system. Congress halted the process in FY2006, when appropriations provisions prohibited FSIS from expending funds to evaluate China's poultry inspection system. The process resumed in FY2010 on the condition that FSIS provide Congress with regular reports on the equivalency process. The possibility that the United States could import poultry meat from China has alarmed some food safety advocates and some Members of Congress because of concerns about relatively lax food safety enforcement in China for both domestically consumed products and exports. Testimony presented during a Congressional-Executive Commission on China hearing highlighted concerns regarding China's food safety.", "Status: In response to concern about China's record on food safety, Section 749 of Division B of the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), prohibits USDA from using any funds to purchase Chinese raw or processed poultry products for feeding programs, including the school lunch and school breakfast programs. Section 753 of Division B of the FY2019 appropriations act prohibits USDA from finalizing the proposed rule to allow the importation of slaughtered Chinese poultry.", "In 2017, the United States imported about 500 pounds of processed poultry meat from China but did not import any processed poultry meat in 2018. If Congress were to lift the appropriations prohibition on finalizing the China poultry slaughter rule, China would still be restricted to sending only cooked/processed products because of APHIS restrictions on uncooked/processed products due to the presence of animal diseases in China, such as avian influenza."], "subsections": []}, {"section_title": "Fresh Beef Imports from Brazil and Argentina", "paragraphs": ["The United States restricts or prohibits the importation of animals or animal products (including meat) from countries where highly infectious animal diseases exist in order to protect U.S. herds. Fresh beef imports from Brazil and Argentina have been prohibited or restricted because of foot-and-mouth disease (FMD) in the two countries. U.S. beef imports from Brazil and Argentina have mostly been limited to fully cooked/processed product. Argentina was approved to export fresh beef to the United States from 1997 to 2001,\\ until the United States halted exports after an Argentine FMD outbreak in 2001.", "In December 2013, APHIS proposed a rule that would allow fresh beef imports from 13 regions in Brazil. In August 2014, APHIS proposed a separate rule to allow fresh beef imports from Patagonia and northern Argentina. In July 2015, APHIS released final rules to allow the import of fresh beef from these regions of Brazil and Argentina. USDA risk assessments determined that, under certain circumstances, fresh beef could be safely imported from Brazil and Argentina without threatening the FMD-free status of the United States. Some livestock industry stakeholders, such as the National Cattlemen's Beef Association and the National Farmers Union, have expressed opposition to allowing fresh beef from Brazil and Argentina because neither country is considered to be free of FMD. FMD was eradicated in the United States in 1929, and any introduction of the disease back into the United States could be economically devastating for the livestock industry. In 2013, the Department of Homeland Security estimated that the cost of an FMD outbreak in the United States could exceed $50 billion.", "In May 2015, FSIS found that Brazil's beef inspection system would provide an equivalent level of food safety as the U.S. system. In August 2016, USDA announced that Brazil was approved to ship fresh beef to the United States, and the first shipments arrived the following month. In June 2017, USDA suspended imports of fresh beef from Brazil after FSIS found problems with re-inspected Brazilian beef at the U.S. port of entry. According to USDA, FSIS was re-inspecting 100% of Brazilian fresh beef imports and refused entry to 11% of shipments, well above the 1% refusal rate for other beef imports.", "In November 2018, FSIS announced that the Argentine beef inspection system was equivalent, and the country could export fresh beef to the United States again. FSIS also announced that within six months of the November 2018 equivalency determination, the agency would undertake additional onsite audits of Argentina's raw beef inspection system.", "Status : The United States continues to suspend its approval of fresh beef imports from Brazil. The United States imported about 10,000 MT of fresh Brazilian beef since September 2016, when U.S. imports began, until shipments were suspended in June 2017. In a step to allow U.S. beef imports from Brazil to resume, President Trump and President Bolsonaro of Brazil issued a joint statement during President Bolsonaro's March 2019 visit in which the United States agreed to \"expeditiously schedule\" an audit of Brazil's beef inspection system once FSIS is \"satisfied with Brazil's food safety documentation.\" ", "The United States imported nearly 1,100 pounds of fresh beef from Argentina in December 2018. Argentina holds a 20,000 MT ton duty-free TRQ allotment for beef shipments to the United States. "], "subsections": []}]}, {"section_title": "Trade Restrictions on Ractopamine Use246", "paragraphs": ["Ractopamine, an animal drug that increases animal weight gain and meat yield, is approved by FDA for use in U.S. cattle, hog, and turkey production. It is also approved for use in countries such as Canada, Japan, Mexico, and South Korea, but many other countries ban the use of ractopamine in meat production. In 2012, the Codex Alimentarius\u2014the international food standards organization that sets guidelines to protect public health and ensure fair practices in the food trade\u2014set maximum residue levels for ractopamine in beef and pork. However, several of the largest markets for U.S. meat exports have restricted imports of meat produced with ractopamine, despite U.S. adherence to the residue standards established by Codex. ", "The USTR, in its \"2019 National Trade Estimate Report on Foreign Trade Barriers,\" states that the EU, China, Taiwan, and Thailand continue to restrict U.S. meat exports produced with ractopamine. According to FSIS, U.S. meat exports\u2014particularly pork\u2014may be shipped to markets with ractopamine restrictions if the exported product is raised without ractopamine and is certified through USDA's Never Fed Beta Agonists Program. U.S. exports to markets that have ractopamine restrictions are subject to increased certification and testing costs, potentially affecting competitiveness and dampening market opportunities.", "Status : USDA and the USTR continue to engage with trading partners to encourage them to accept international standards on the use of ractopamine."], "subsections": []}, {"section_title": "Country-of-Origin Labeling (COOL)249", "paragraphs": ["In March 2009, USDA implemented a final rule to implement country-of-origin labeling (COOL) to provide consumers information on the origin of fresh fruits and vegetables, fish, shellfish, peanuts, pecans, macadamia nuts, ginseng, and ground and muscle cuts of beef, pork, lamb, chicken, and goat. The rules were required by the 2002 farm bill ( P.L. 107-171 ) as amended by the 2008 farm bill ( P.L. 110-246 ). ", "In 2009, Canada and Mexico challenged U.S. COOL in the WTO, arguing that COOL reduced the value and number of cattle and hogs shipped to the U.S. market, thus violating WTO trade commitments. In 2011, the WTO found that COOL treated imported livestock less favorably than U.S. livestock and did not provide complete information to consumers on the origin of meat products. The United States appealed the WTO ruling, but the Appellate Body upheld the findings. USDA issued a revised COOL rule in May 2013, which required that production steps\u2014born, raised, and slaughtered, by origin country\u2014be included on meat labels, but in 2014 the WTO found that the revised COOL regulations still violated U.S. WTO obligations by discriminating against imported livestock. In December 2015, the WTO authorized Canada and Mexico to retaliate against $1 billion worth of products imported from the United States. In December 2015, Congress repealed the COOL requirements for beef and pork and ground beef and pork in Section 759 of Division A of the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ). USDA then issued a final rule that removed beef and pork from COOL regulations, thus settling the trade dispute. Even so, Canada and Mexico retain their rights granted by the WTO to retaliate if the United States should implement laws or regulations that violate the WTO findings on U.S. COOL for beef and pork.", "Status : Following the repeal of COOL for beef and pork, several state legislatures\u2014including Wyoming, South Dakota, Montana, and Colorado\u2014have considered bills that would require COOL on meat sold within the state, but thus far none has been enacted. The Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America and the Cattle Producers of Washington sued USDA to restore COOL for beef and pork in June 2017. In June 2018, the district court in eastern Washington ruled in favor of USDA because the plaintiffs had missed \"the applicable statute of limitations time period and because the regulations follow Congress's clear intent.\"", "In June 2018, the Organization for Competitive Markets and the American Grassfed Association petitioned FSIS to change its \"Product of USA\" label. The organizations state that foreign meat is imported into the United States, minimally processed, and then sold as \"Product of USA\" meat. The petition requests that FSIS change its Food Standards and Labeling Policy Book to clarify that the ingredients in a product must be of domestic origin to have a \"Product of USA\" label. To date, FSIS has not responded to this request. "], "subsections": []}]}, {"section_title": "WTO and U.S. Agriculture", "paragraphs": ["The 164-member WTO oversees and administers multilateral trade rules, serves as a forum for trade liberalization negotiations, and resolves trade disputes through its Dispute Settlement Understanding (DSU). As a signatory member of the WTO, the United States has committed to abide by WTO rules and disciplines, including those that govern domestic farm policy. The WTO's general rules concerning subsidy disciplines, trade behavior, and market access concessions apply to all members. "], "subsections": [{"section_title": "2018 Farm Bill and WTO Compliance255", "paragraphs": ["Two developments in 2018 have created some uncertainty about whether the United States will remain in compliance with rules and spending limits for domestic support programs that it has agreed to in the WTO. These developments are farm program changes under both the 2018 farm bill ( P.L. 115-334 ) and a new USDA direct payment program\u2014the MFP\u2014implemented in 2018 under other statutory authorities in response to foreign trade retaliation targeting U.S. agricultural products. The outcome will depend on market conditions, but the potential for non-compliance would be heightened if market prices for major commodity crops were to weaken and lower prices were to generate farm program payments above current USDA projections. ", "In general, the farm program changes enacted in the 2018 farm bill incrementally shift farm safety net outlays away from decoupled programs that do not tie crop support payments to production and toward coupled programs that are potentially more market distorting. This resulted from the addition of a new, albeit temporary, coupled support program (the MFP) and, in the 2018 farm bill, from raising support levels for existing coupled programs and from removing several of the coupled programs from individual farm payment limit requirements.", "Direct farm support payments may occur under: ", "One of the revenue-support programs authorized by the farm bill\u2014the Market Assistance Loan (MAL), Agricultural Risk Coverage (ARC), Price Loss Coverage (PLC), and Dairy Margin Coverage (DMC) programs; A program authorized by the Secretary of Agriculture using authority under the CCC Charter to make payments in support of U.S. agriculture\u2014two such programs are the Cotton Ginning Cost Share (CGCS) program and the MFP; or One of the four disaster assistance programs\u2014the Livestock Forage Disaster Program (LFP), Livestock Indemnity Program (LIP), Tree Assistance Program (TAP), and Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish Program (ELAP).", "In a change from previous policy, the 2018 farm bill excluded payments made under MAL, LIP, TAP, and ELAP from annual individual payment limits. DMC, like its predecessor\u2014the Margin Protection Program\u2014operates without any farm payment limit. The absence of a limit on benefits received by an individual farmer under these programs represents the potential for unlimited, fully coupled USDA farm support outlays that would count against U.S. domestic support limits agreed to under U.S. WTO commitments.", "MAL payments are coupled directly to actual production (subject to a producer's participation choice). DMC payments are made on a producer-selected share of a historical production base that is adjusted upward for annual growth in national average milk production. Milk producers must participate in the program to receive the annual base adjustment. Thus DMC payments are treated as coupled. The 2018 farm bill raised support levels for both dairy producers under the DMC and for several program crops under MAL, including barley, corn, grain sorghum, oats, extra-long-staple cotton, rice, soybeans, dry peas, lentils, and small and large chickpeas. Higher support levels increase the potential for higher payments during a market downturn. Such payments count against the market-distorting spending limit. Furthermore, coupled payments can influence producer production choices in favor of those farm activities expected to receive larger support payments. If such payments are noticeably large relative to the commodity's farm value and result in surplus production that moves into international markets, then they could attract the attention of competitor nations. Such spillovers, if measurably harmful to foreign export competitors or producers, could lead to challenges under the WTO's dispute settlement process. ", "Of the direct payment programs, ARC and PLC are partially decoupled from producer behavior: Payments are made to a portion (85%) of historical base acres irrespective of actual plantings. Because of this they are notified as non-product specific and have been excluded from counting against WTO spending limits under a special \"de minimis\" exclusion, which allows minimum amounts of domestic support even if they are market distorting. Most of the other direct support programs\u2014MAL, DMC, LFP, LIP, TAP, and ELAP\u2014count against the United States' annual market-distorting \"amber box\" payment limit of $19.1 billion.", "CGCS and MFP are special cases. The United States has yet to notify spending under either of these programs to the WTO, so their exact WTO spending classification is currently unknown. However, because their payments are coupled directly to specific commodities, they could well be included with other market-distorting payments subject to the spending limit. To the extent that producers expect payments under these programs to recur, they can become market distorting and subject to potential WTO challenge. Secretary Perdue has, however, stated that MFP was a one-time assistance and would not be extended beyond the package announced in July 2018. CGCS outlays were $326 million in 2016 and $216 million in 2018. Actual outlays under MFP are estimated at $5.2 billion in 2018 and $3.5 billion in 2019.", "The U.S. sugar program does not rely on direct payments from USDA. Instead, USDA provides indirect price support via MAL loans to processors at statutorily fixed prices (which were raised slightly by the 2018 farm bill) while limiting the amount of sugar supplied for food use in the U.S. market. In its 2015 notification of domestic support to the WTO (the most recent notification year), USDA notified the implicit cost of the sugar program at $1.5 billion.", "The federally subsidized crop insurance program was largely unchanged by the 2018 farm bill. Annual USDA premium subsidies\u2014which have averaged $6.4 billion per year since 2011\u2014count against the U.S. trade-distorting spending limit of $19.1 billion. Payments under U.S. conservation programs are deemed generally non-market distorting and are notified as \"green box\" payments, which are not subject to any spending limit.", "Status: Most recent studies suggest that, for U.S. program spending to exceed the $19.1 billion cumulative spending limit, even with the addition of large MFP payments and higher MAL and DMC support levels, a combination of events would have to occur that would broadly depress commodity prices. Perhaps more relevant to U.S. agricultural trade is the concern that, because the United States plays such a prominent role in most international markets for agricultural products, any distortion resulting from U.S. policy would be both visible and potentially vulnerable to challenge under WTO rules."], "subsections": []}, {"section_title": "U.S. Challenges of Farm Support Spending of WTO Members266", "paragraphs": ["The United States was a major force behind the establishment of the WTO in 1995 and the rules and procedures governing its DSU. The United States has frequently used DSU, often successfully. ", "Since the summer of 2017, the United States has blocked the appointment of new DSU Appellate Body (AB) jurists, which has limited the ability of the system to hear dispute cases. The AB currently has three jurists (the minimum number to hear a case) out of a total of seven positions. In December 2019, the terms of two of the three will expire, potentially leaving the AB unable to function if no new jurists are appointed.", "Status: Since the inception of the WTO in 1995, the United States has brought to it 46 cases on agriculture. Of these cases, 34 were fully or partially decided in favor of the United States by the WTO panel hearing the case. Most recently, the WTO ruled in favor of the United States against China over Chinese domestic support policies for its agricultural sector and over China's administration of its market access policies. The United States has notified the WTO on a similar domestic support case against India. However, if no new members are appointed to the WTO AB, then pending U.S. cases may be unable to move forward toward a ruling."], "subsections": [{"section_title": "U.S. Challenges of China's Agricultural Domestic Support", "paragraphs": ["In September 2016, USTR filed a dispute settlement case (DS511) at the WTO over Chinese domestic support policies for its agricultural sector that USTR alleged were inconsistent with WTO rules and commitments. Furthermore, USTR contended that China's policies had distorted international trade in wheat, rice, and corn and that government support payments were in excess of China's WTO spending limits. In December 2016, USTR requested that WTO establish a dispute settlement panel to examine China's domestic support levels for these crops, a request that was fulfilled in January 2017. ", "In its challenge, USTR contended that the level of support that China provided for rice, wheat, and corn had exceeded\u2014by nearly $100 million from 2012 through 2015\u2014the level to which China had committed to when it joined the WTO. USTR also asserted that China's price support for domestic production had been above the world market prices since 2012, thereby creating an incentive for Chinese farmers to increase production of the subsidized crops, which in turn displaced imports from the United States and elsewhere.", "When China acceded to the WTO in 2001, some of its domestic support policies\u2014including market price support and certain producer payments and input subsidies linked to production\u2014became subject to an annual spending limit of 8.5% of each product's value based on China's domestic prices.", "Since all of China's domestic production was potentially eligible for the above-market support prices\u2014and on the assumption that all domestic producers had incorporated the high support levels into their production decisions\u2014USTR stated that the correct measure of total support should be based on the total production of wheat, rice, and corn in the provinces and regions where the support programs operated. However, USTR asserted that China reported the subsidies only on the smaller quantities purchased by the government. USTR also argued that China's fixed external reference price for wheat, rice, and corn should be based on the three-year averages of 1986-1988 world prices, as specified in the WTO Agreement on Agriculture. In contrast, China had used the much higher 1996-1998 prices, which had resulted in smaller price gap calculations. Finally, the United States and China disagreed on whether to measure the level of market price support for milled or unmilled rice and the appropriate conversion factor between the two.", "Status: On February 28, 2019, the WTO dispute settlement body (DSB) found that China had exceeded its domestic support limits for wheat and rice in each year between 2012 and 2015 and therefore was not in compliance with its WTO commitment. The panel agreed with China's reference price calculations based on 1996-1998 prices because these years had been used in China's WTO accession documentation. The panel disagreed with China's methodology of calculating domestic support taking into consideration only the purchases made by the government. The DSB panel made recommendations for calculation of reference prices and domestic support for China in order to comply with its WTO commitments. The DSB panel did not make a ruling on corn because, following the 2015 harvest, China made changes to its calculations of corn prices that were found to be less market distorting than the method used prior to 2015. If neither the United States nor China appeals the report, the findings and recommendations in the report would be adopted within 60 days of public circulation. China recently stated that it will not appeal the WTO ruling."], "subsections": []}, {"section_title": "U.S. Challenges of China's Agricultural Market Access Policy276", "paragraphs": ["On December 15, 2016, USTR filed another WTO dispute settlement case (DS517) against China, alleging that China's administration of its TRQs for wheat, rice, and corn are unclear and that China had failed to fill the within-quota commitments, thus undermining U.S. exports. While China announced on an annual basis the opening of TRQs, USTR stated that China's application criteria and procedures were unclear and that China did not provide meaningful information on how it actually administered the TRQs. ", "When China joined the WTO in 2001, it agreed to create TRQs to allow imports of wheat, rice, and corn. Imports within the set quota volume would be levied a lower within-quota tariff rate, while imports beyond the set quota amount would be levied at a higher tariff rate. Under China's WTO commitments, by 2004, the wheat TRQ would reach 9.6 million metric tons, rice 5.4 million metric tons, and corn 7.2 million metric tons. The in-quota tariffs for all three commodities are 1%, while the over-quota tariffs are set at 65%.", "Despite the low within-quota tariff, China's TRQs for wheat, rice, and corn have never been filled even when imported grains were priced lower and were more competitive than domestic grains. According to prices reported by China's Ministry of Agriculture, during 2014-2016, the import prices were lower by about 30-40% for wheat, 25-35% for rice, and 15-35% for corn. USTR states that China's TRQ administration appears to restrict imports and fails to provide sufficient information to permit the processing of quota application and importation. ", "Status: On September 22, 2017, a WTO DSB panel was established on \"China\u2014Tariff Rate Quotas for Certain Agricultural Products\" (DS517). On April 18, 2019, the WTO ruled in favor of the United States, stating that \"China's administration of its TRQs for wheat, rice and corn were inconsistent with its obligations under the WTO to administer TRQs on a transparent, predictable and fair basis.\" The WTO recommends that China make changes to make its TRQ administration to conform with its WTO obligations. "], "subsections": []}, {"section_title": "U.S. Challenges of India's Domestic Agricultural Support", "paragraphs": ["In May 2018, the United States challenged India's domestic agricultural support notifications at the WTO, charging that India had under-notified spending on its market price support for rice and wheat for the marketing years 2010/11 through 2013/14. The United States alleged that India's market price support for wheat and rice exceeded its allowable levels of trade distorting domestic support under the WTO. ", "In November 2018, the United States also challenged India's domestic support for cotton, stating that it exceeded its allowable level under its WTO commitments. At about the same time, Australia, Brazil, and Guatemala challenged India's level of domestic support for sugar, charging that India had violated its WTO commitment levels.", "In February 2019, the United States further challenged India stating that it had substantially underreported its market price support for chickpeas, pigeon peas, black matpe (a type of black lentil), mung beans, and lentils. According to USTR, when calculated using the WTO Agreement on Agriculture methodology, India's market price support for each of these pulses has exceeded the allowable levels of trade-distorting domestic support under India's WTO commitments.", "Status: The United States' challenge to India's domestic support for rice and wheat was raised at the May 2018 WTO Committee on Agriculture (COA) meeting. USTR raised the issue concerning India's cotton price support during the November 2018 COA meeting, and the challenge against India's domestic support for pulses was raised at the February 2019 COA meeting. USTR raised these issues at the COA to alert India and other WTO members that the United States is aware and concerned about India's underreporting of its domestic agricultural subsidies. USTR intends to continue challenging India's domestic support for agriculture at upcoming COA meetings and, if necessary, could pursue these concerns through WTO's dispute settlement mechanism. "], "subsections": []}]}]}]}}
{"id": "R45518", "title": "Banking Policy Issues in the 116th Congress", "released_date": "2019-02-21T00:00:00", "summary": ["Regulation of the banking industry has undergone substantial changes over the past decade. In response to the 2007-2009 financial crisis, many new bank regulations were implemented pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act; P.L. 111-203) or under the existing authorities of bank regulators to address apparent weaknesses in the regulatory regime. While some observers view those changes as necessary and effective, others argued that certain regulations were unjustifiably burdensome. To address those concerns, the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (P.L. 115-174) relaxed certain regulations. Opponents of that legislation argue it unnecessarily pared back important safeguards, but proponents of deregulation argue additional pare backs are needed. Meanwhile, a variety of economic and technological trends continue to affect banks. As a result, the 116th Congress faces many issues related to banking, including the following:", "Safety and Soundness. Banks are subject to regulations designed to reduce the likelihood of bank failures. Examples include requirements to hold a certain amount of capital (which enables a bank to absorb losses without failing) and the so-called Volcker Rule (a ban on banks' proprietary trading). In addition, anti-money laundering requirements aim to reduce the likelihood banks will execute transactions involving criminal proceeds. Banks are also required to take steps to avoid becoming victims of cyberattacks. The extent to which these regulations (i) are effective, and (ii) appropriately balance benefits and costs is a matter of debate.", "Consumer Protection, Fair Lending, and Access to Banking. Certain laws are designed to protect consumers and ensure that lenders use fair lending practices. The Consumer Financial Protection Bureau has authorities to regulate for consumer protection. No consensus exists on whether current regulations strike an appropriate balance between protecting consumers while ensuring access to credit and justifiable compliance costs. In addition, whether Community Reinvestment Act regulations as currently implemented effectively and efficiently encourage banks to provide services in their areas of operation is an open question.", "Large Banks and \"Too Big To Fail.\" Regulators also regulate for systemic risks, such as those associated with very large and complex financial institutions that may contribute to systemic instability. Dodd-Frank Act provisions include enhanced prudential regulation for certain large banks and changes to resolution processes in the event one fails. In addition, bank regulators imposed additional capital requirements on certain large, complex banks. Subsequently, some argued that certain of these additional regulations were too broadly applied and overly stringent. In response, Congress reduced the applicability of the Dodd-Frank measures and regulators have proposed changes to the capital rules. Whether relaxing these rules will provide needed relief to these banks or unnecessarily pare back important safeguards is a debated issue.", "Community Banks. The number of small or \"community\" banks has declined substantially in recent decades. No consensus exists on the degree to which regulatory burden, market forces, and the removal of regulatory barriers to interstate branching and banking are causing the decline.", "What Companies Should Be Eligible for Bank Charters. To operate legally as a bank, an institution must hold a charter granted by a state or federal government. Traditionally, these are held by companies generally focused on and led by people with experience in finance. However, recently companies with a focus on technology are interested in having legal status as a bank, either through a charter from the Office of the Comptroller of the Currency or a state-level industrial loan company charter. Policymakers disagree over whether allowing these companies to operate as banks would create appropriately regulated providers of financial services or inappropriately extend government-backed bank safety nets and disadvantage existing banks.", "Recent Market and Economic Trends. Changing economic forces also pose issues for the banking industry. Some observers argue that increases in regulation could drive certain financial activities into a relatively lightly regulated \"shadow banking\" sector. Innovative financial technology may alter the way certain financial services are delivered. If interest rates rise, it could create opportunities and risks. Such trends could have implications for how the financial system performs and influence debates over appropriate banking regulations."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Banks play a central role in the financial system by connecting borrowers to savers and allocating available funds across the economy. As a result, banking is vital to the U.S. economy's health and growth. Nevertheless, banking is an inherently risky activity involving extending credit and undertaking liabilities. Therefore, banking can generate tremendous societal and economic benefits, but banking panics and failures can create devastating losses. Over time, a regulatory system designed to foster the benefits of banking while limiting risks has developed, and both banks and regulatio n have coevolved as market conditions have changed and different risks have emerged. For these reasons, Congress often considers policies related to the banking industry.", "The last decade has been a transformative period for banking. The 2007-2009 financial crisis threatened the total collapse of the financial system and the real economy. Many assert only huge and unprecedented government interventions staved off this collapse. Others argue that government interventions were unnecessary or potentially exacerbated the crisis. In addition, many argue the crisis revealed that the financial system was excessively risky and the regulatory regime governing the financial system had serious weaknesses. ", "Policymakers responded to the perceived weaknesses in the pre-crisis financial regulatory regime by implementing numerous changes to financial regulation, including to bank regulation. Most notably, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act; P.L. 111-203 ) in 2010 with the intention of strengthening regulation and addressing risks. In addition, U.S. bank regulators have implemented changes under their existing authorities, many of which generally adhere to the Basel III Accords\u2014an international framework for bank regulation agreed to by U.S. and international bank regulators\u2014that called for making certain bank regulations more stringent.", "In the ensuing years, some observers raised concerns that the potential benefits of those regulatory changes (e.g., better-managed risks, increased consumer protection, greater systemic stability, potentially higher economic growth over the long term) were outweighed by the potential costs (e.g., compliance costs incurred by banks, reduced credit availability for consumers and businesses, potentially slower economic growth). In response to these concerns, Congress passed the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCP Act; P.L. 115-174 ). Among other things, the law modified certain (1) regulations facing small banks; (2) regulations facing banks large enough to be subjected to Dodd-Frank enhanced regulation but still below the size thresholds exceeded by the very largest banks; and (3) mortgage regulations facing lenders including banks.", "In addition, federal banking regulatory agencies\u2014the Federal Reserve (the Fed), the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC)\u2014have proposed further changes in regulation. Implementing the regulatory changes prescribed in the aftermath of the crisis and made pursuant to the Dodd-Frank Act occurred over the course of years. In recent years\u2014a period in which the leadership of the regulators has transferred from Obama Administration to Trump Administration appointees\u2014the banking regulators have expressed the belief that, after having viewed the effects of the regulations, they now have the necessary information to determine which regulations may be ineffective or inefficient as currently implemented. Recently, these regulators have made of number of proposals with the aim of reducing regulatory burden. A key issue surrounding regulatory relief made pursuant to the EGRRCP Act and regulator-initiated changes is whether regulatory burden can be reduced without undermining the goals and effectiveness of the regulations.", "Meanwhile, market trends and economic conditions continue to affect the banking industry coincident with the implementation of new regulation. Some of the more notable conditions include the development of new technologies used in financial services (known as \"fintech\") and a rising interest rate environment following an extraordinarily long period of very low rates.", "This report provides a broad overview of selected banking-related issues, including issues related to \"safety and soundness\" regulation, consumer protection, community banks, large banks, what type of companies should be able to establish banks, and recent market and economic trends. This report is not an exhaustive look at all bank policy issues, nor is it a detailed examination of any one issue. Rather, it provides concise background and analyses of certain prominent issues that have been the subject of recent discussion and debate. In addition, this report provides a list of Congressional Research Service reports that examine specific issues."], "subsections": []}, {"section_title": "\"Safety and Soundness\"", "paragraphs": ["Banks face a number of regulations intended to increase the likelihood that banks are profitable without being excessively risky and prone to failures; decrease the likelihood that bank services are used to conceal the proceeds of criminal activities; and to protect banks and their customers' data from cyberattacks. This section provides background on these \"safety and soundness\" regulations and analyzes selected issues related to them, including", "prudential regulation related to capital requirements and the Volcker Rule (which restricts proprietary trading); requirements facing banks related to anti-money laundering laws, such as the Bank Secrecy Act (P.L. 91-508); and challenges related to cybersecurity."], "subsections": [{"section_title": "Background", "paragraphs": ["Bank failures can inflict large losses on stakeholders, including taxpayers via government \"safety nets\" such as deposit insurance and Federal Reserve lending facilities. Failures can cause systemic stress and sharp contraction in economic activity if they are large or widespread. To make such failures less likely\u2014and to reduce losses when they do occur\u2014regulators use prudential regulation designed to ensure banks are safely profitable and to reduce the likelihood of bank failure. ", "In addition, banks are subject to regulations intended to reduce the prevalence of crime. Some of those are anti-money laundering measures aimed at stopping criminals from using the banking system to conduct or hide illegal operations. Others are cybersecurity regulations aimed at protecting banks and their customers from becoming victims of cybercrime, such as denial-of-service attacks or data theft."], "subsections": []}, {"section_title": "Prudential Regulation9", "paragraphs": ["Banks profit in part because their assets are generally riskier, longer term, and more illiquid than their liabilities, which allows the banks to earn more interest on their assets than they pay on their liabilities. The practice is usually profitable, but does expose banks to risks that can potentially lead to failure. ", "Failures can be reduced if (1) banks are better able to absorb losses or (2) they are less likely to experience unsustainably large losses. One tool regulators use to increase a bank's ability to absorb losses is to require banks to hold a minimum level of capital. Another tool regulators use to reduce the likelihood and size of potential losses is to prohibit banks from engaging in activities that could create excessive risks. For example, the Volcker Rule prohibits banks from engaging in proprietary trading \u2014the buying and selling of securities that the bank itself owns with the aim of profiting from price changes.", "The EGRRCP Act mandated certain changes to these prudential regulations, and regulators have proposed changes under existing authorities. Regulators are to promulgate these changes through the rulemaking process in the coming months and years. In addition, whether policymakers have calibrated these regulations such that their benefits and costs are appropriately balanced is likely to be an area of ongoing debate. For these reasons, prudential regulation issues will likely continue to draw congressional attention."], "subsections": [{"section_title": "Capital Requirements", "paragraphs": ["A bank's balance sheet is composed of assets, liabilities, and capital. Assets are largely the value of loans owed to the bank and securities owned by the bank. To make loans and buy securities, a bank secures funding by either issuing liabilities or raising capital. A bank's liabilities are largely the value of deposits and borrowings the bank owes savers and creditors. Capital is raised through various methods, including issuing equity to shareholders or special types of bonds that can be converted into equity. ", "Banking is an inherently risky activity, because banks may suffer losses on assets but face rigid obligations on the liabilities owed to depositors and creditors. In contrast to liabilities, capital generally does not obligate the bank to repay or distribute a specified amount of money at a specified time. This characteristic means that, in the event a bank suffers losses, capital gives the bank the ability to absorb some amount of losses while meeting its obligations. Thus, banks can avoid failures if they hold sufficient capital. ", "Banks are required to satisfy several requirements to ensure they hold enough capital. In the United States, these requirements are generally aligned with the Basel III standards developed as part of a nonbinding agreement between international bank regulators. In general, these are expressed as minimum ratios between certain balance sheet items that banks must maintain. A detailed examination of how these ratios are calculated and what levels must be met is beyond the scope of this report. This examination of policy issues only requires noting that capital ratios fall into one of two main types\u2014a leverage ratio or a risk-weighted ratio. ", "A leverage ratio treats all assets the same, requiring banks to hold the same amount of capital against assets regardless of how risky each asset is. A risk-weighted ratio assigns a risk weight\u2014a percentage based on the riskiness of the asset that the asset value is multiplied by\u2014to account for the fact that some assets are more likely to lose value than others. Riskier assets receive a higher risk weight, which requires banks to hold more capital to meet the ratio requirement.", "Whether the benefits of capital requirements (e.g., increased bank and financial system stability) are generally outweighed by the potential costs (e.g., reduced credit availability) is an issue subject to debate. Capital is typically a more expensive source of funding for banks than liabilities. Thus, requiring banks to hold higher levels of capital may make funding more expensive, and so banks may choose to reduce the amount of credit available. Some studies indicate this could slow economic growth. However, no economic consensus exists on this issue, because a more stable banking system with fewer crises and failures may lead to higher long-run economic growth. In addition, estimating the value of regulatory costs and benefits is subject to considerable uncertainty, due to difficulties and assumptions involved in complex economic modeling and estimation.", "Lack of consensus also surrounds questions over whether or under what circumstances risk-weighted ratios are necessary, effective, and efficient. Proponents of risk-based measures assert that it is important to use both risk-weighted and leverage ratios because each addresses weaknesses of the other. For example, riskier assets generally offer a greater rate of return to compensate the investor for bearing more risk. Without risk weighting, banks would have an incentive to hold riskier assets because the same amount of capital must be held against risky and safe assets.", "However, the use of risk-weighted ratios could be problematic for a number of reasons. Risk weights assigned to particular classes of assets could potentially be an inaccurate estimation of some assets' true risk, which could incent banks to misallocate available resources across asset classes. For example, banks held a high level of seemingly low-risk, mortgage-backed securities (MBSs) before the crisis, in part because those assets offered a higher rate of return than other assets with the same risk weight. MBSs then suffered unexpectedly large losses during the crisis. ", "Another criticism is that the risk-weighted requirements involve \"needless complexity\" and their use is an example of regulatory micromanagement. The complexity could benefit the largest banks that have the resources to absorb the added regulatory cost compared with small banks that could find compliance costs more burdensome. (Small or \"community\" bank compliance issues will be covered in more detail in the \" Regulatory Burden on Community Banks \" section later in the report.)", "Section 201 of the EGRRCP Act is aimed at addressing concerns over the complexity of risk-weighted ratios and the costs they impose on community banks. This provision created an option for banks with less than $10 billion in assets to meet a higher leverage ratio\u2014the Community Bank Leverage Ratio (CBLR)\u2014in order to be exempt from having to meet the risk-based ratios described above. Bank regulators have issued a proposal to implement this provision wherein banks (1) below the threshold that (2) meet at least a 9% leverage ratio measure of equity and certain retained earnings to assets and (3) had limited off-balance sheet exposures and limited securities trading activity (among other requirements) would qualify for the exemption. The FDIC estimates that more than 80% of community banks will be eligible for the CBLR. ", "However, this new optional exemption does not entirely settle the issue. One bank industry group has argued that 9% is set higher than is necessary, excluding deserving banks from the exemption. In addition, bills in the 115 th Congress, notably H.R. 10 , proposed a high-leverage-ratio option be available to banks regardless of size that would exempt qualifying banks from a wider range of prudential regulations. There are also specific policy issues relating to capital requirements for large banks, which are discussed in the \" Regulator Proposals Related to Large Bank Capital Requirements \" section below. "], "subsections": []}, {"section_title": "Volcker Rule", "paragraphs": ["Section 619 of Dodd-Frank\u2014often referred to as the Volcker Rule\u2014generally prohibits depository banks from engaging in proprietary trading or sponsoring a hedge fund or private equity fund. Proprietary trading refers to owning and trading securities for a bank's own portfolio with the aim of profiting from price changes. Put simply, if a bank is engaged in proprietary trading, it is itself an investor in stocks, bonds, and derivatives, which is commonly characterized as \"playing the market\" or \"speculating.\" The rule includes exceptions for when bank trading is deemed appropriate\u2014such as (1) when a bank is hedging against risks the bank has assumed as a part of its traditional business and (2) market-making (i.e., buying available securities with the intention of quickly selling them to meet market demand).", "Proprietary trading is an inherently risky activity, and banks have faced varying degrees of restrictions over engaging in this activity for a number of decades. Sections 16, 20, 21, and 32 of the Banking Act of 1933 (P.L. 73-66)\u2014commonly referred to as the Glass-Steagall Act\u2014generally prohibited certain deposit-taking banks from engaging in certain securities markets activities. Over time, regulator interpretation of Glass-Steagall and legislative changes expanded permissible activities for certain banks, allowing them to make certain securities investments and authorizing bank-holding companies to own depositories and securities firms within the same organization. The financial crisis increased debate over whether banks were engaging in unnecessarily risky activities. Ultimately, certain provisions in Dodd-Frank placed restrictions on permissible activities to reduce banks' riskiness, and the Volcker Rule was designed to prohibit proprietary trading by depository banking organizations.", "One of the Volcker Rule's proponents' main rationales for the separation of deposit-taking and certain securities investments is that when banks analyze and assume risks, they may be subject to moral hazard \u2014the willingness to take on excessive risk due to some outside protection from losses. Deposits are an important source of bank funding and insured (up to a limit on each account) by the government. This arguably reduces depositors' incentive to monitor their banks' riskiness. Thus, a bank could potentially take on excessive risk without concern about losing this funding because, in the event of large losses that lead to failure, at least part of the losses will be borne by the FDIC's Deposit Insurance Fund (which is backed by the full faith and credit of the U.S. government and so ultimately the taxpayer). Thus, supporters of the Volcker Rule have characterized it as preventing banks from \"gambling\" in securities markets with taxpayer-backed deposits.", "However, critics of the Volcker Rule doubt its necessity and efficiency. In regard to necessity, they assert that proprietary trading at commercial banks did not play a substantive role in the financial crisis. They note the rule would not have prevented a number of the major events that played a direct role in the crisis\u2014including failures or bailouts of large investment banks and insurers and losses on loans held by commercial banks. On this point, they also argue that proprietary trading risks are no greater than those posed by \"traditional\" banking activities, such as mortgage lending, and allowing banks to take on risks in different markets might diversify their risk profiles, making them less likely to fail.", "Debates relating to the efficiency of the Volcker Rule involve its complexity, compliance burden, and potential to lead banks to reduce their engagement in beneficial market activities. Recall that the Volcker Rule is not a ban on all trading, as banks are still allowed to trade to hedge risks or make markets. This poses practical supervisory problems. For example, how can regulators determine whether a broker-dealer is holding a security for market-making, as a hedge against another risk, or as a speculative investment? Differentiating among these motives creates the aforementioned complexity and compliance costs that could affect banks' trading behavior, and so could reduce financial market efficiency.", "Another criticism of the Volcker Rule in its original form was that it unnecessarily subjected all banks to the rule and their associated compliance costs. Critics of this aspect asserted that the vast majority of community banks are not involved in complex trading activity, but nevertheless must incur costs in evaluating the rule to ensure they are in compliance. ", "Both Congress and regulators have recently taken actions in response to concerns over the complexity of the Volcker Rule and its compliance burden for small banks. Section 203 of the EGRRCP Act exempted banks with less than $10 billion in assets that fell below certain trading activity limits from the rule. Independent of that mandate, the agencies that implemented and enforced the Volcker Rule released and called for public comment on a proposal to simplify the rule in May 2018. Under the proposal, the agencies would clarify certain of the rule's definitions and criteria in an effort to reduce or eliminate uncertainties related to how certain trading activity can qualify for exemption. The proposal would also further tailor the compliance requirements facing banks based on the size of an institution's trading activity.", "Proponents of the Volcker Rule are generally wary of size-based exemptions. They contend that community banks typically do not face compliance obligations under the rule and do not face an excessive burden by being subject to it. They argue that community banks that are subject to compliance requirements can comply by having clear policies and procedures in place for review during the normal examination process. In addition, Volcker Rule supporters are generally critical of the regulators' proposal, asserting that the changes would undermine \"the effective supervision and enforcement\" of the rule. "], "subsections": []}]}, {"section_title": "Anti-Money Laundering Regulation40", "paragraphs": ["Anti-money laundering (AML) regulation refers to efforts to prevent criminal exploitation of financial systems to conceal the location, ownership, source, nature, or control of illicit proceeds. The U.S. Department of the Treasury estimates domestic financial crime, excluding tax evasion, generates $300 billion in illicit proceeds that might involve money laundering. Despite robust AML efforts in the United States, the ability to counter money laundering effectively remains challenged by factors including (1) the diversity of illicit methods to move and store ill-gotten proceeds through the international financial system; (2) the introduction of new and emerging threats such as cyber-related financial crimes; (3) gaps in legal, regulatory, and enforcement regimes; and (4) the costs associated with financial institution compliance with global AML guidance and national laws.", "In the United States, the statutory foundation for domestic AML originated in 1970 with the Bank Secrecy Act (BSA; P.L. 91-508) and its major component, the Currency and Foreign Transaction Reporting Act. Amendments to the BSA and related provisions in the 1980s and 1990s expanded AML policy tools available to combat crime, particularly drug trafficking, and prevent criminals from laundering their illicitly derived profits. Key elements to the BSA/AML legal framework include requirements for customer identification, recordkeeping, reporting, and compliance programs intended to identify and prevent money laundering abuses.", "In general, banking regulators examine institutions for compliance with BSA/AML. When a regulator finds BSA violations or deficiencies in AML compliance programs, it may take informal or formal enforcement action, including possible civil fines. The BSA/AML policy framework is premised on banks and other covered financial entities filing a range of reports with the Department of the Treasury's Financial Crimes Enforcement Network (FinCEN), when their clients either engage in suspicious financial transactions, large cash transactions, or certain other transactions. For example, a bank generally must file a Suspicious Activity Report (SAR) if, among other reasons, it conducts a transaction of $5,000 or more that the bank suspects involves money laundering or other criminal activity. A bank must file a Currency Transaction Report (CTR) if it conducts a currency (i.e., cash) transaction of $10,000 or more as to which it has the same suspicions. The accurate, timely, and complete reporting of such activity to FinCEN flags situations that may warrant further investigation for law enforcement.", "Whether this regulatory framework adequately hinders criminals from using the banking system to launder their criminal proceeds and whether it does so efficiently without unduly burdening banks are debated issues. One aspect of this debate is whether current reporting requirements are inefficient and overly costly to the banking industry. Some industry observers\u2014including officials from the OCC\u2014have indicated that they believe certain areas of the current framework could be reformed in a way that reduces compliance costs without unduly weakening the ability to prevent money laundering. In contrast, officials from other agencies involved in AML and law enforcement\u2014including FinCEN and the FBI\u2014have stressed the importance of the information gathered under the current reporting requirements in combating money laundering. ", "Another area of concern involves beneficial owners \u2014that is, the natural person(s) who own or control a legal entity, such as a corporation or limited liability company. When such entities are set up without physical operations or assets, they are often referred to as shell companies . Shell companies can be used to conceal beneficial ownership and facilitate anonymous financial transactions. In recent years, policymakers have become increasingly concerned regarding potential risks posed by shell companies whose beneficial ownership is not transparent. This is due in part to a series of leaks to the media regarding the use of shell companies to facilitate criminal activity (such as \"the Panama Papers\") and sustained multilateral criticism of current U.S. practices by the Financial Action Task Force, an international standard-setting body. In May 2018, a new FinCEN regulation came into effect that increased the requirements for banks to conduct customer due diligence (CDD) and ascertain the identity of beneficial owners in certain cases. Central to the CDD rule is a requirement for financial institutions to establish and maintain procedures to identify and verify beneficial owners of a legal entity opening a new account.", "If Congress decides that reporting requirements facing banks are not appropriately calibrated, it could pass legislation amending those requirements. For example, Congress could change the CTR or SAR reporting threshold or index the threshold levels to inflation. Certain bills introduced in the 115 th Congress would have increased financial transparency and reporting requirements for beneficial owners in other nonbank fields, such as real estate, but could potentially indirectly impact the banking industry as well."], "subsections": []}, {"section_title": "Cybersecurity50", "paragraphs": ["Cybersecurity is a major concern of banks, other financial services providers, and federal regulators. In many ways, it is an important extension of physical security. For example, banks are concerned about both physical and electronic theft of money and other assets, and they do not want their businesses shut down by weather events or electronic denial-of-service attacks. Maintaining the confidentiality, security, and integrity of physical records and electronic data held by banks is critical to sustaining the level of trust that allows businesses and consumers to rely on the banking industry to supply services on which they depend.", "The federal government has increasingly recognized the importance of cybersecurity in the financial services industry, as evidenced by the inclusion of financial services in the government's list of critical infrastructure sectors. The basic authority that federal regulators use to establish cybersecurity standards emanates from the organic legislation that established the agencies and delineated the scope of their authority and functions. As previously discussed, federal banking regulators are required to promulgate safety and soundness standards for all federally insured depository institutions to protect the stability of the nation's banking system. Some of these standards pertain to cybersecurity issues, including information security, data breaches, and destruction or theft of business records.", "In addition, certain laws (at both the state and federal levels) have provisions related to cybersecurity of financial services that are often performed by banks, including the Dodd-Frank Act, the Gramm-Leach-Bliley Act of 1999 (GLBA; P.L. 106-102 ), and the Sarbanes-Oxley Act of 2002 ( P.L. 107-204 ). For example, Section 501 of GLBA imposes obligations on financial institutions to \"respect the privacy of ... [their] customers and to protect the security and confidentiality of those customers' nonpublic personal information.\" Federal banking regulators require the entities that they regulate to protect customer privacy of physical and electronic records as mandated by the privacy title of GLBA. Federal bank regulators also issue guidance in a variety of forms designed to help banks evaluate their risks and comply with cybersecurity regulations.", "Regulators bring adjudicatory enforcement actions on a case-by-case basis related to banks' violations of cybersecurity protocols. Banks often view these actions as signaling how an agency interprets aspects of its regulatory authority. For example, a number of recent consent orders issued by the FDIC have directed banks to perform assessments or audits of information technology programs and management to identify risks and ensure compliance with cybersecurity requirements. ", "Thus, oversight of financial services and bank cybersecurity reflects a complex and sometimes overlapping array of state and federal laws, regulators, regulations, and guidance. However, whether this framework is effective and efficient, resulting in adequate protection against cyberattacks without imposing undue cost burdens on banks, is an open question. The occurrence of successful hacks of banks and other financial institutions, wherein huge amounts of individuals' personal information are stolen or compromised, highlights the importance of ensuring bank cybersecurity. For example, in 2014, JPMorgan Chase, the largest U.S. bank, experienced a data breach that exposed financial records of 76 million households. However, no consensus exists on how best to reduce the occurrence of such incidents. "], "subsections": []}]}, {"section_title": "Consumer Protection, Fair Lending, and Banking Access", "paragraphs": ["Financial products can be complex and potentially difficult for consumers to fully understand. Consumers seeking loans or financial services could be vulnerable to deceptive or unfair practices. To reduce the occurrence of bad outcomes, laws and regulations have been put in place to protect consumers. This section provides background on consumer financial protection and the Bureau of Consumer Financial Protection's (CFPB) authority. The section also analyzes related issues, including", "whether the CFPB has used its authorities and regulations of banking institutions appropriately; concerns relating to the lack of consumer access to banking services; and whether the Community Reinvestment Act as currently implemented is effectively and efficiently meeting its goal of ensuring banks provide credit to the areas in which they operate. "], "subsections": [{"section_title": "Background", "paragraphs": ["Banks are subject to consumer compliance regulation, intended to ensure that banks are in compliance with relevant consumer-protection and fair-lending laws. Federal laws and regulations in this area take a variety of approaches and address different areas of concern. Certain laws provide disclosure requirements intended to ensure consumers adequately understand the costs and other features and terms of financial products. Other laws prohibit unfair, deceptive, or abusive acts and practices. Fair lending laws prohibit discrimination in credit transactions based upon certain borrower characteristics, including sex, race, religion, or age, among others. ", "The financial crisis raised concerns among policymakers that regulators' mandates lacked sufficient focus on consumer protection. In response, the Dodd-Frank Act established the CFPB with the single mandate to implement and enforce federal consumer financial law, while ensuring consumers can access financial products and services. The CFPB also seeks to ensure the markets for consumer financial services and products are fair, transparent, and competitive.", "For banks with more than $10 billion in assets, the CFPB is the primary regulator for consumer compliance, whereas safety and soundness regulation continues to be performed by the prudential regulator. As a regulator of larger banks, the CFPB has rulemaking, supervisory, and enforcement authorities. A large bank, therefore, has different regulators for consumer protection and safety and soundness. ", "For banks with $10 billion or less in assets, the rulemaking, supervisory, and enforcement authorities for consumer protection are divided between the CFPB and a prudential regulator. The CFPB may issue rules that apply to smaller banks, but the prudential regulators maintain primary supervisory and enforcement authority for consumer protection. The CFPB has limited supervisory and enforcement powers over small banks."], "subsections": []}, {"section_title": "Consumer Protection, Fair Lending, and CFPB Regulation64", "paragraphs": ["Consumer protection and fair lending compliance continue to be important issues for banks for numerous reasons. Noncompliance can result in regulators taking enforcement actions that may involve substantial penalties. In addition, even in the absence of enforcement actions, an institution faces reputational risks if it comes to be perceived as dealing badly with customers. For example, the CFPB maintains a consumer complaints database that makes public consumer complaints against individual companies readily available, potentially affecting prospective customers' decisions on which companies to use for financial services. The recent public reaction to and enforcement actions pertaining to Wells Fargo's unauthorized opening of customer accounts show the importance of strong consumer protection compliance. ", "Recently, banks and other nonbank financial institutions that provide financial products to consumers (e.g., mortgages, credit cards, and deposit accounts) have been affected by the implementation of new CFPB regulations. For example, banks and other lenders have begun to comply with major new mortgage rules such as the Ability-to-Repay and Qualified Mortgage Standards Rule (ATR/QM) and Truth in Lending Act/Real Estate Settlement Act Integrated Disclosure Rule (TRID). The ATR/QM encourages lenders to gather more information on prospective borrowers than they otherwise might have in order to reduce the likelihood that a borrower would receive an inappropriate loan. TRID requires lenders to provide borrowers with certain information about the mortgages for which they are applying. In addition to these and other new regulations, the CFPB also provides information on its supervisory activities related to banks, such as instances where its examiners found that certain financial institutions misrepresented service fees associated with deposit and checking accounts.", "Compliance with these new rules has increased banks' operational costs, which some argue potentially leads to higher costs for consumers in certain markets or a reduction in the availability of credit. Others stress that CFPB's regulatory, supervisory, and enforcement efforts reduce the likelihood of consumer harm in financial markets. Debates about how best to achieve the appropriate balance between consumer protection, credit access, and industry costs are unlikely to be resolved easily, and thus may continue to be an area of congressional interest."], "subsections": []}, {"section_title": "Access to Banking71", "paragraphs": ["The banking sector provides valuable financial services for households that allow them to save, make payments, and access credit. Safe and affordable financial services allow households to avoid financial hardship, build assets, and achieve financial security. However, many U.S. households (often those with low incomes, lack of credit histories, or credit histories marked with missed debt payments) do not use banking services. According to the FDIC's National Survey of Unbanked and Underbanked Households, in 2017, 6.5% of households in the United States were unbanked (i.e., did not have an account at an insured institution) and 18.7% of households were underbanked (i.e., obtained financial products and services outside of the banking system in the past year). ", "Lack of bank access leads some households to rely on alternative financial service providers and consumer credit products outside of the formal banking sector, such as payday or auto title loans. According to an FDIC estimate, 12.9% of households had unmet demand for mainstream small-dollar credit. Certain observers believe that financial outcomes for the unbanked and underbanked would be improved if banks\u2014which may be more likely to be a stable source of relatively inexpensive financial services relative to certain alternatives\u2014were more active in meeting this demand. For this reason, prudential regulators, like the OCC and the FDIC, are currently exploring ways to encourage banks to offer small-dollar credit products to consumers, and other policymakers and observers will likely continue to explore ways to make banking more accessible to a greater portion of the population."], "subsections": []}, {"section_title": "Community Reinvestment Act75", "paragraphs": ["The Community Reinvestment Act of 1977 (CRA; P.L. 95-128 ) addresses how banking institutions meet the credit needs of the areas they serve, notably in low- and moderate-income (LMI) neighborhoods. The federal prudential banking regulators (the Fed, the OCC, and the FDIC) conduct examinations to evaluate how banks are fulfilling the objectives of the CRA. The regulators issue CRA credits, or points, where banks engage in qualifying activities\u2014such as mortgage, consumer, and business lending; community investments; and low-cost services that would benefit LMI areas and entities\u2014that occur within an assigned assessment area . These credits are then used to issue each bank a performance rating, from Outstanding to Substantial Noncompliance. The CRA requires regulators to take these ratings into account when banks request to merge with other banking institutions or otherwise expand their operations into new areas. Whether regulations as currently implemented are effectively and efficiently meeting the CRA's goals has been the subject of debate. The banking industry and other observers assert that CRA regulations can be altered in a way that would reduce regulatory burden while still meeting the law's goals. Recently, the OCC and Treasury have made proposals to address those concerns. However, consumer and community advocates argue that efforts to provide relief to banks may potentially be at the expense of communities that the CRA is intended to help.", "Treasury made a number of recommendations to the bank regulators for changes to CRA regulations in a memorandum it sent to those agencies in April 2018. Regarding the need for modernization, the memorandum recommends revisiting the approach for determining banks' assessment areas, given that geographically defined areas arguably may not fully reflect the community served by a bank because of technology developments. Treasury also recommends establishing clearer standards for CRA-eligible activities that provide flexibility and expand the types of loans, investments, and services that are eligible for CRA credit. Regarding aspects of CRA compliance that may be unnecessarily burdensome, Treasury recommends increasing the timeliness of the CRA performance examination process. Regarding improving the outcomes that the CRA was intended to encourage, such as increasing the availability of credit to LMI neighborhoods, Treasury recommendations include incorporating performance incentives that might result in more efficient lending activities.", "In September 2018, the OCC published an advance notice of proposed rulemaking (ANPR) seeking public comment on 31 questions pertaining to issues to consider and possible changes to CRA regulation. The OCC's ANPR does not propose specific changes, but its content and the questions posed suggest that the OCC is exploring the possibility of adopting a quantitative metric-based approach to CRA performance evaluation, changing how assessment areas are defined, expanding CRA-qualifying activities, and reducing the complexity, ambiguity, and burden of the regulations on the bank industry. The OCC received more than 1,300 comment letters in response to the ANPR that were alternatively supportive or critical of the various possible alterations to CRA regulation. "], "subsections": []}]}, {"section_title": "Community Banks83", "paragraphs": ["Although some banks hold a very large amount of assets, are complex, and operate on a national or international scale, the vast majority of U.S. banks are relatively small, have simple business models, and operate within a local area. This section provides background on these simpler banks\u2014often called community bank s \u2014and analyzes issues related to them, including", "regulatory relief for community banks and the long-term decline in the number of community banks."], "subsections": [{"section_title": "Background", "paragraphs": ["Although there is no official definition of a community bank, policymakers and the public generally recognize that the vast majority of U.S. banks differ substantially from a relatively small number of very large and complex banking organizations in a number of ways. Community banks tend to ", "hold a relatively small amount of assets (although asset size alone need not be a determining factor); be more concentrated in core bank businesses of making loans and taking deposits and less involved in other, more complex activities; and operate within a smaller geographic area, making them generally more likely to practice relationship lending wherein loan officers and other bank employees have a longer standing and perhaps more personal relationship with borrowers. ", "Therefore, community banks may serve as particularly important credit sources for local communities and underserved groups of which large banks may have little familiarity. In addition, relative to large banks, community banks generally have fewer employees, less resources to dedicate to regulatory compliance, and individually pose less of a systemic risk to the broader financial system.", "Congress often faces policy issue questions related to community banks. Community bank advocates often assert the tailoring of regulations currently in place does not adequately balance the benefits and costs of the regulations when applied to community banks. Concerns have also been raised about the three-decade decline in the number and market presence of these institutions, and the predominant cause of that decline is a matter of debate."], "subsections": []}, {"section_title": "Reduction in Community Banks", "paragraphs": ["In recent decades, community banks, under almost any common definition, have seen their numbers decline and their collective share of banking industry assets fall in the United States. Overall, the number of FDIC-insured institutions fell from a peak of 18,083 in 1986 to 5,477 in 2018. The number of institutions with less than $1 billion in assets fell from 17,514 to 4,704 during that time period, and the share of industry assets held by those banks fell from 37% to 7%. Meanwhile, the number of banks with more than $10 billion in assets rose from 38 to 138, and the share of total banking industry assets held by those banks increased from 28% to 84%.", "The decrease in the number of community banks occurred mainly through three methods: mergers, failures, and lack of new banks. Most of the decline in the number of institutions in the past 30 years was due to mergers, which averaged more than 400 a year from 1990 to 2016. Failures were minimal from 1999 to 2007, but played a larger role in the decline during the late 1980s and following the 2007-2009 financial crisis and subsequent recession. As economic conditions have improved, failures have declined, but the number of n ew r eporters \u2014new chartered institutions providing information to the FDIC for the first time\u2014has been extraordinarily small in recent years. For example, in the 1990s, an average of 130 new banks reported data to the FDIC per year. Through September 30, five new banks reported data to the FDIC in 2018.", "Observers have cited several possible causes for this industry consolidation. Some observers argue the decline indicates that the regulatory burden on community banks is too onerous, driving smaller banks to merge to create or join larger institutions, an argument covered in more detail in the following section, \" Regulatory Burden on Community Banks .\" However, mergers\u2014the largest factor in consolidation\u2014could occur for a variety of reasons. For example, a bank that is struggling financially may look to merge with a stronger bank to stay in business. Alternatively, a community bank that has been outperforming its peers may be bought by a larger bank that wants to benefit from its success. ", "In addition, other fundamental changes besides regulatory burden in the banking system could be driving consolidation, making it difficult to isolate the effects of regulation. Through much of the 20 th century, federal and state laws restricted banks' ability to open new branches and banking across state lines was restricted. Thus, many more banks were needed to serve every community. Branching and banking across state lines was not substantially deregulated at the federal level until 1997 through the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 ( P.L. 103-328 ). When these restrictions were relaxed, it became easier for community banks to consolidate or for mid-size and large banks to spread operations to other markets. In addition, there may be economies of scale, not only in compliance, but in the business of banking in general. Furthermore, the economies of scale may be growing over time, which would also drive industry consolidation. For example, information technology has become more important in banking (e.g., cybersecurity and mobile banking), and certain information technology systems may be subject to economies of scale. Finally, the slow growth coming out of the most recent recession, and macroeconomic conditions more generally (such as low interest rates), may make it less appealing for new firms to enter the banking market."], "subsections": []}, {"section_title": "Regulatory Burden on Community Banks", "paragraphs": ["Community banks receive special regulatory consideration to minimize their regulatory burden. For example, many regulations\u2014including a number of regulations implemented pursuant to the Dodd-Frank Act\u2014include exemptions for community banks or are otherwise tailored to reduce compliance costs for community banks. Title I and Title II of the EGRRCP Act contained numerous provisions that provided new exemptions to community banks or raised the thresholds for existing exemptions, such as the Community Bank Leverage Ratio and Volcker Rule exemptions discussed above in the \" Prudential Regulation \" section. In addition, bank regulators are required to consider the effect of rules on community banks during the rulemaking process pursuant to provisions in the Regulatory Flexibility Act ( P.L. 96-354 ) and the Riegle Community Development and Regulatory Improvement Act ( P.L. 103-325 ). Supervision is also structured to pose less of a burden on small banks than larger banks, such as by requiring less-frequent bank examinations for certain small banks and less intensive reporting requirements. ", "However, Congress often faces questions related to whether tailoring in general or tailoring provided in specific regulations is sufficient to ensure that an appropriate trade-off has been struck between the benefits and costs of regulations facing community banks. Advocates for further regulatory relief argue that certain realized benefits are likely to be relatively small, whereas certain realized costs are likely to be relatively large.", "One area where the benefits of regulation may be relatively small for community banks relative to large banks is regulations aimed at improving systemic stability, because community banks individually pose less of a risk to the financial system as a whole than a large, complex, interconnected bank. Many recent banking regulations were implemented at least in part in response to the systemic nature of the 2007-2009 crisis. Some community bank proponents argue that because small banks did not cause the crisis and pose less systemic risk, they need not be subject to new regulations made in response to the crisis. Opponents of these arguments note that systemic risk is only one of the goals of regulation, along with prudential regulation and consumer protection, and that community banks are exempted from many of the regulations aimed at systemic risk. They note that hundreds of small banks failed during and after the crisis, suggesting the prudential regulation in place prior to the crisis was not stringent enough.", "Another potential rationale for easing regulations on community banks would be if there are economies of scale to regulatory compliance costs, meaning that regulatory compliance costs may increase as bank size does but decrease as a percentage of overall costs or revenues. Put another way, as regulatory complexity increases, compliance may become relatively more costly for small institutions. Empirical evidence on whether compliance costs are subject to economies of scale is mixed, thus consider this illustrative example to show the logic behind the argument. Imagine a bank with $100 million in assets and 25 employees and a bank with $10 billion in assets and 1,250 employees each determine they must hire an extra employee to ensure compliance with new regulations. The relative burden is larger on the small institution that expands its workforce by 4% than on the large bank that expands by less than 0.1%. From a cost-benefit perspective, if regulatory compliance costs are subject to economies of scale, then the balance of costs and benefits of a particular regulation will differ depending on the size of the bank. For the same regulatory proposal, economies of scale could potentially result in costs outweighing benefits for smaller banks. ", "Due to a lack of empirical evidence of the exact benefits and costs of each individual regulation at each individual bank (and even lack of consensus over which banks should qualify as community banks), debates over the appropriate level of tailoring of regulations is a debate over calibration involving qualitative assessments. Where should the lines be drawn? Should exemption thresholds be set high so that regulations apply only to the very largest, most complex banks? Should thresholds be set relatively low, so that only very small banks are exempt? At what point does a bank cease to have the characteristics associated with community banks? Often at issue in this debate are the so-called regional banks \u2014banks that are larger and operate across a greater geographic market than the community banks but are also smaller and less complex than the largest, most complex organizations with hundreds of billions or trillions of dollars in assets. Should regulators provide regional banks the same exemptions as those provided to community banks? Policymakers, in the 116 th Congress, continue to face these and other questions concerning community banks. "], "subsections": []}]}, {"section_title": "Large Banks and \"Too Big to Fail\"106", "paragraphs": ["Along with the thousands of relatively small banks operating in the United States, there are a handful of banks with hundreds of billions of dollars of assets. The 2007-2009 financial crisis highlighted the problem of \"too big to fail\" (TBTF) financial institutions\u2014the concept that the failure of a large financial firm could trigger financial instability, which in several cases prompted extraordinary federal assistance to prevent the failure of certain of these institutions. In response to the crisis, policymakers took a number of steps through the Dodd-Frank Act and the Basel III Accords to eliminate the TBTF problem, including subjecting the largest banks to enhanced prudential regulations, a new resolution regime to unwind these banks in the event of failure, and higher capital requirements.", "This section provides background on these large banks and examines issues related to them, including", "reductions in the application of enhanced prudential regulations facing certain large banks made pursuant to P.L. 115-174 and changes to capital requirements proposed by regulators that would reduce the amount of capital certain large banks would have to hold. ", "As regulators implement these statutory changes and their proposed rules move forward, Congress faces questions about whether relaxing these regulations appropriately eases overly stringent requirements or unnecessarily increases the likelihood that large banks take on excessive risks."], "subsections": [{"section_title": "Background", "paragraphs": ["Some bank holding companies (BHCs) have hundreds of billions or trillions of dollars in assets and are deeply interconnected with other financial institutions. A bank may be so large that its leadership and market participants may believe that the government would save it if it became distressed. This belief could arise from the determination that the institution is so important to the country's financial system\u2014and that its failure would be so costly to the economy and society\u2014that the government would feel compelled to avoid that outcome. An institution of this size and complexity is said to be TBTF. ", "In addition to fairness issues, economic theory suggests that expectations that a firm will not be allowed to fail creates moral hazard \u2014if the creditors and counterparties of a TBTF firm believe that the government will protect them from losses, they have less incentive to monitor the firm's riskiness because they are shielded from the negative consequences of those risks. As a result, TBTF institutions may have incentives to be excessively risky, gain unfair advantages in the market for funding, and expose taxpayers to losses. ", "Several market forces likely drive banks and other financial institutions to grow in size and complexity, thereby potentially increasing efficiency and improving financial and economic outcomes. For example, marginal costs can be reduced through economies of scale; risk can be diversified by spreading exposures over multiple business lines and geographic markets; and a greater array of financial products could be offered to customers allowing a bank to potentially attract new customers or strengthen relationships with existing ones. ", "These market forces and the relaxation of certain interstate banking and branching regulations described in the \" Reduction in Community Banks \" section may have driven some banks to become very large and complex in the years preceding the crisis. At the end of 1997, two insured depository institutions held more than $250 billion in assets, and together accounted for about 9.3% of total industry assets. By the end of 2007, six banks held more than $250 billion in assets, accounting for 40.9% of industry assets. The trend has generally continued, and as of the third quarter of 2018, nine banks held more than $250 billion in assets, accounting for 49.5% of industry assets.", "Many assert that the worsening of the financial crisis in fall 2008 was a demonstration of TBTF-related problems. Large institutions had taken on risks that resulted in large losses, causing the institutions to come under threat of failure. In some cases, the U.S. government took actions to stabilize the financial system and individual institutions. Wachovia and Washington Mutual were large institutions that were acquired by other institutions to avoid their failure during the crisis. Bank of America and Citigroup received extraordinary assistance through the Troubled Asset Relief Program (TARP) to address financial difficulties. Other large (and small) banks participated in emergency government programs offered by the Treasury (TARP), the Federal Reserve, and the FDIC.", "In response, the Dodd-Frank Act attempted to end TBTF through (1) a new regulatory regime to reduce the likelihood that large banks would fail; (2) a new resolution regime to make it easier to safely wind down large bank holding companies that are at risk of failing; and (3) new restrictions on regulators' use of emergency authority to prevent \"bail outs\" of failing large banks. In addition, the Federal Reserve imposed additional capital requirements on the largest banks that largely aligned with proposed standards set out by the Basel III Accords, with some exceptions.", "To make it less likely that large banks would fail, certain large banks are now subject to an enhanced prudential regulatory regime administered by the Federal Reserve. Under this regime, large banks are subject to more stringent safety and soundness standards than other banks. They must comply with higher capital and liquidity requirements, undergo stress tests, produce living wills and capital plans, and comply with counterparty limits and risk management requirements.", "To make it easier to wind down complex BHCs with nonbank subsidiaries, the Dodd-Frank Act created the Orderly Liquidation Authority (OLA), a resolution regime administered by the FDIC that is similar to how the FDIC resolves bank subsidiaries. This replaced the bankruptcy process, focused on the rights of creditors, with an administrative process, focused on financial stability, for winding down such firms. To date, OLA has never been used."], "subsections": []}, {"section_title": "Implementing Statutory Changes", "paragraphs": ["The Dodd-Frank Act initially applied enhanced prudential regulation requirements to all BHCs with more than $50 billion in assets, although more stringent standards were limited to banks with more than $250 billion in assets or $10 billion in foreign exposure, and the most stringent standards were limited to U.S. globally systemically important banks (G-SIBs), the eight most complex U.S. banks. ", "Subsequent to the enactment of Dodd-Frank, critics of the $50 billion asset threshold argued that many banks above that size are not systemically important and that Congress should raise the threshold. In particular, critics distinguished between regional banks (which tend to be at the lower end of the asset range and, some claim, have a traditional banking business model comparable to community banks) and Wall Street banks ( a term applied to the largest, most complex organizations that tend to have significant nonbank financial activities). Opponents of raising the threshold disputed this characterization, arguing that some regional banks are involved in sophisticated activities, such as being swap dealers, and have large off-balance-sheet exposures.", "In response to concerns that the enhanced prudential regulation threshold was set too low, P.L. 115-174 exempted banks with between $50 billion and $100 billion in assets from enhanced prudential regulation, leaving them to be regulated in general like any other bank. Under the proposed rule implementing the P.L. 115-174 changes, the Fed has increased the tiering of enhanced regulation for banks with more than $100 billion in assets. The proposed rule would create four categories of banks based on size and complexity, and impose increasingly stringent requirements on each category. From most to least stringent, Category I would currently include the eight G-SIBs, Category II would include one bank, Category III would include four banks, and Category IV would include 11 banks. Compared with current policy, banks in all categories would face reduced regulatory requirements under this rule, other proposed rules, and forthcoming rules required by Section 402 of P.L. 115-174 , if finalized. In addition, P.L. 115-174 created new size-based exemptions from various regulations, increasing the tendency to subject larger banks to more stringent requirements than smaller banks. These changes include exemptions from the Volcker Rule and risk-weighted capital requirements for banks with less than $10 billion in assets (meeting certain criteria).", "Proponents of the changes assert they provide necessary and targeted regulatory relief. Opponents argue they needlessly pare back important Dodd-Frank protections to the benefit of large and profitable banks."], "subsections": []}, {"section_title": "Regulator Proposals Related to Large Bank Capital Requirements", "paragraphs": ["As discussed in the \" Capital Requirements \" section, all banks must hold enough capital to meet certain capital ratio requirements. Broadly, those requirements take two forms\u2014risk-weighted requirements and unweighted leverage requirements. In addition, a small subset of very large and very complex banks also face additional capital ratio requirements implemented by the U.S. federal bank regulators. The Federal Reserve has made two proposals to simplify and relax certain aspects of these additional requirements, and these proposals are subject to debate.", "All banks must hold additional high-quality capital on top of the minimum required levels\u2014called the capital conservation buffer (CCB)\u2014to avoid limitations on their capital distributions, such as dividend payments. In addition, certain large banks are subject to the Federal Reserve's stress tests, the results of which can lead to restrictions on the bank's capital distributions. Stress tests are intended to ensure that banks hold enough capital to withstand a hypothetical market stress scenario, but arguably have the effect of acting as additional capital requirements with which banks must comply.", "Advanced approaches banks must maintain a fixed minimum supplementary leverage ratio (SLR), an unweighted capital requirement that is more stringent than the leverage ratio facing smaller banks because it incorporates off-balance sheet exposures. A Congressional Research Service (CRS) analysis of large holding companies' regulatory filings indicates that, currently, 19 large and complex U.S. bank or thrift holding companies are classified as advanced approaches banks. ", "G-SIBs must meet fixed enhanced SLR (eSLR) requirements, which sets the SLR higher for these banks. In addition, the G-SIBs are subject to an additional risk-weighted capital surcharge (on top of other risk-weighted capital requirements that all banks must meet) of between 1% and 4.5% based on the systemic importance of the institution. Whether these requirements are appropriately calibrated is a debated issue.", "Proponents of recalibrating some of these capital requirements argue that those requirements set at a fixed number\u2014including the CCB and eSLR\u2014are inefficient, because they do not reflect varying levels of risk posed by individual banks. Recalibration proponents also argue that compiling with these requirements in addition to stress test requirements is unnecessarily burdensome for banks. Opponents of proposals to relax current capital requirements facing large and profitable banks assert that doing so needlessly pares back important safeguards against bank failures and systemic instability.", "In response to concerns that fixed requirements do not adequately account for risk differences between institutions, the Fed has issued two proposals for public comment that would link individual large banks' requirements with other risk measures. One proposal would make bank CCB requirements a function of their stress tests results, and the other proposal would link large banks' eSLR requirements with individual G-SIB systemic importance scores. The Fed estimates that the new CCB requirement would generally reduce the amount of capital large banks would have to hold, but that some G-SIBs would see their required capital levels increase. The Fed estimates that the new eSLR requirement would generally reduce the amount of capital held by G-SIB parent companies by $400 million and the amount held by insured depository subsidiaries by $121 billion. "], "subsections": []}]}, {"section_title": "What Companies Should Be Eligible For Charters131", "paragraphs": ["To legally operate as a bank and perform the relevant activities, an institution generally must have a charter granted by either the OCC at the federal level or a state-level authority. In addition, to engage in certain activities, the institution must have federal deposit insurance granted by the FDIC. Currently, these requirements raise a number of policy questions, including", "whether companies established primarily as financial technology companies should be able to receive a national bank charter, as has been offered by the OCC; and whether the application process and determinations made by the FDIC as they relate to institutions seeking a specific type of state charter, called an industrial loan company (ILC) charter, is overly restrictive."], "subsections": [{"section_title": "Background", "paragraphs": ["An institution that makes loans and takes deposits\u2014the core activities of traditional commercial banking\u2014must have a government issued charter. Numerous types of charters exist, including national bank charters; state bank charters; federal savings association charters, and state savings association charters (saving associations are also referred to as thrifts ). Each charter type determines what activities are permissible for the institution, what activities are restricted, and which agency will be the institution's primary federal regulator (see Table 1 ). One of the main rationales for this system is that it gives institutions with different business models and ownership arrangements the ability to choose a regulatory regime appropriately suited to the institution's business needs and risks. ", "The differences between institution business models and the attendant regulations are numerous, varied, and beyond the scope of this report. The issues examined in this section arise from each charter's granting an institution the right to engage in certain banking related activities, and thus generating the potential benefits and risks of those activities. Broadly, these issues relate to questions over whether companies that differ from traditional banks should be allowed to engage in traditional banking activities given the types and magnitudes of benefits and risks the companies might present."], "subsections": []}, {"section_title": "OCC \"Fintech\" Charter", "paragraphs": ["Recent advances in technology, including the proliferation of available data and internet access, have altered the way financial activities are performed in many ways. These innovations in financial technology, or fintech, have created the opportunity for certain activities that have traditionally been the business of banks to instead be performed by technology-focused, nonbank companies. Lending and payment processing are prominent examples. This development has raised questions over how these fintech companies should be regulated, and the appropriate federal and state roles in that regulation. One possible, though contested, proposal for addressing a number of these questions would be to make an OCC national bank charter available to certain fintech companies.", "Many nonbank fintech companies performing bank-like activities are regulated largely at the state level. They may have to obtain lending licenses or register as money transmitters in every state they operate and may be subject to the consumer protection laws of that state, such as interest rate limits. Proponents of fintech companies argue that subjecting certain technology companies to 50 different state level regulatory regimes is unnecessarily burdensome and hinders companies that hope to achieve nationwide operations quickly using the internet. In addition, a degree of uncertainty surrounding the applicability of certain laws and regulations to certain fintech firms and activities has arisen. For example, whether federal preemption of state interest rate limits apply to loans made through a marketplace lender \u2014that is, online-only lenders that exclusively use automated, algorithmic underwriting\u2014but originated by a bank faces legal uncertainty due to certain court decisions, including Madden v Midlands . ", "One possible avenue to ease the state-by-state regulatory burdens and resolve the uncertainties facing some fintech firms would be to allow those firms that perform bank-like activities to apply for and (provided they meet necessary requirements) to grant them national bank charters. First proposed in 2016 by then-Comptroller of the Currency Thomas Curry, and following subsequent examination of the issue and review of public comments, the OCC announced in July 2018 that it would consider \"applications for special purpose bank charters from financial technology (fintech) companies that are engaged in the business of banking but do not take deposits.\"", "OCC argues that companies with such a charter would be explicitly subject to all laws and regulations (including those that preempt state law, a contentious issue addressed below) applicable to national banks. The OCC stated that fintech firms granted the charter \"will be subject to the same high standards of safety and soundness and fairness that all federally chartered banks must meet,\" and also that the OCC \"may need to account for differences in business models and activities, risks, and the inapplicability of certain laws resulting from the uninsured status of the bank.\" Thus, the argument goes, establishing a fintech charter would mean a new set of innovative companies would no longer face regulatory uncertainty and could safely and efficiently provide beneficial financial services, perhaps to populations and market-niches that banks with traditional cost structures do not find cost-effective to serve.", "Until the OCC actually grants such charters and fintech firms operate under the national bank regime for some amount of time, how well this policy fosters potential innovations and benefits while guarding against risks is the subject of debate. Proponents of the idea generally view the charter as a mechanism for freeing companies from what they assert is the unnecessarily onerous regulatory burden of being subject to numerous state regulatory regimes. They further argue that this would be achieved without overly relaxing regulations, as the companies would become subject to the OCC's national bank regulatory regime and its rulemaking, supervisory, and enforcement authorities. Opponents generally assert both that the OCC does not have the authority to charter these types of companies, as discussed below, and that doing so would inappropriately allow marketplace lenders to circumvent important state-level consumer protections.", "The OCC's assertion that it has the authority to grant such charters has been challenged. Shortly after the initial 2016 announcements that the OCC was examining the possibility of granting the charters, the Conference of State Bank Supervisors and the New York State Department of Financial Services sued the OCC to prevent it from issuing the charters on the grounds that it lacked the authority to do so. A federal district court dismissed the case after concluding that because the OCC had not yet issued charters to nonbanks, the plaintiffs (1) lacked standing to challenge the OCC's purported decision to move forward with chartering nonbanks, and (2) had alleged claims that were not ripe for adjudication. Subsequent to the OCC's July 2018 announcement, state regulators have again filed lawsuits."], "subsections": []}, {"section_title": "Industrial Loan Company Charters", "paragraphs": ["Industrial loan companies (ILCs) hold a particular type of charter offered by some states that generally allows ILCs to engage in certain banking activities. Depending on the state, those activities can include deposit-taking, but only if they are granted deposit insurance by the FDIC. Thus, ILCs that take deposits are state regulated with the FDIC acting as the primary federal regulator. Importantly, a parent company that owns an ILC that meets certain criteria is not necessarily considered a BHC for legal and regulatory purposes. This means ILC charters create an avenue for commercial firms (i.e., companies not primarily focused on the financial industry, such as manufacturers, retailers, or possibly technology companies) to own a bank. Nonfinancial parent companies of ILCs generally are not subject to Fed supervision and other regulations pursuant to the Bank Holding Company Act of 1956 (P.L. 84-511).", "A commercial firm may want to own a bank for a number of economic reasons. For example, an ILC can provide financing to the parent company's customers and clients and thus increase sales for the parent. In recent decades, household-name manufacturers have owned ILCs, including but not limited to General Motors, Toyota, Harley Davidson, and General Electric. However, while they can generate profits and potentially increase credit availability, ILCs pose a number of potential risks. ", "The United States has historically adopted policies to generally separate commerce and banking, because allowing a single company to be involved in both activities could potentially result in a number of bad outcomes. A mixed organization's banking subsidiary could make decisions based on the interests of the larger organization, such as making overly risky loans to customers of a commerce subsidiary or providing funding to save a failing commerce subsidiary. Such conflicts of interest could threaten the safety and soundness of the bank. Relatedly, some have argued that having a federally insured bank within a commercial organization is an inappropriate expansion of federal banking safety nets (such as deposit insurance). Certain observers, including community banks, have concerns over whether purely commercial or purely banking organizations would be able to compete with combined organizations that could potentially use economies of scale and funding advantages to exercise market power. ", "These arguments played a prominent role in the public debate that was sparked when Walmart and Home Depot made unsuccessful efforts to secure an ILC charter between 2005 and 2008. Amid this debate, the FDIC imposed a moratorium in 2006 on the acceptance, approval, or denial of ILC applications for deposit insurance while the agency reexamined its policies related to these companies. That moratorium ended in January 2008. Subsequently, concerns over ILCs led Congress to mandate another moratorium (this one lasting three years, ending in July 2013) on granting new ILCs deposit insurance in the Dodd-Frank Act.", "No consensus has been reached on the magnitude of these risks and validity of the concerns surrounding deposit-taking ILCs. Recently, two financial technology companies, Square and SoFi, have applied for ILC charters and renewed debates over ILCs. Even though the moratoriums on granting ILCs deposit insurance have expired, the FDIC has not approved any new ILC applications since the 2013 expiration. However, since becoming FDIC chairman in June 2018, Jelena McWilliams has made statements indicating that under her leadership the FDIC will again consider ILC applications. Given the interest in and debate surrounding this charter type, policymakers will likely examine questions over the extent to which ILCs create innovative sources of credit and financial services subject to appropriate safeguards or inadvisably allow commercial organizations to act as banks with federal safety nets while exempting them from certain bank regulation and supervision. "], "subsections": []}]}, {"section_title": "Market and Economic Trends160", "paragraphs": ["In addition to regulation issues, market and economic conditions and trends continually affect the banking industry. This section analyzes such trends that may affect banks, including", "migration of financial activity from banks into nonbanks or the \"shadow banking\" system; increasing capabilities and market presence of financial technology or fintech; and a higher interest rate environment following a long period of extraordinarily low rates."], "subsections": [{"section_title": "Nonbank Credit Intermediation or \"Shadow Banking\"", "paragraphs": ["Credit intermediation is a core banking activity and involves transforming short-term, liquid, safe liabilities into relatively long-term, illiquid, higher-risk assets. In the context of traditional banking, credit intermediation is performed by taking deposits from savers and using them to fund loans to borrowers. Nonbank institutions can also perform similar credit intermediation to banks\u2014sometimes called shadow banking \u2014using certain instruments such as money market mutual funds, short-term debt instruments, and securitized pools of loans. When illiquid assets are funded by liquid liabilities, an otherwise-solvent bank or nonbank might experience difficulty meeting short-term obligations without having to sell assets, possibly at \"fire sale\" prices. If depositors or other funding providers feel their money is not safe with an institution, many of them may withdraw their funds at the same time. Such a \"run\" could cause an institution to fail. ", "Long-established government programs mitigate liquidity- and run-risk in the banking industry. The Federal Reserve is authorized to act as a \"lender of last resort\" for a bank experiencing liquidity problems, and the FDIC insures depositors against losses. Banks are also subject to prudential regulation\u2014as discussed in the \" Prudential Regulation \" section. However, nonbank intermediation is performed without the government safety nets available to banks or the prudential regulation required of them. The lack of an explicit government safety net in shadow banking means that taxpayers are less explicitly or directly exposed to risk, but it also means that shadow banking may be more vulnerable to a panic that could trigger a financial crisis. ", "Some argue that the increased regulatory burden placed on banks in response to the financial crisis\u2014such as the changes in bank regulation mandated by Dodd-Frank or agreed to in Basel III\u2014could result in a decreased role for banks in credit intermediation and an increased role for relatively lightly regulated nonbanks.", "Many contend the financial crisis demonstrated how risks to deposit-like financial instruments in the shadow banking sector\u2014such as money market mutual funds and repurchase agreements\u2014can create or exacerbate systemic distress. Money market mutual funds are deposit-like instruments that are managed with the goal of never losing principal and that investors can convert to cash on demand. Institutions can also access deposit-like funding by borrowing through short-term funding markets\u2014such as by issuing commercial paper and entering repurchase agreements. These instruments can be continually rolled over as long as funding providers have confidence in the borrowers' solvency. During the crisis, all these instruments\u2014which investors had previously viewed as safe and unlikely to suffer losses\u2014experienced run-like events as funding providers withdrew from markets. Moreover, nonbanks can take on exposure to long-term loans through investing in mortgage-backed securities (MBS) or other asset-backed securities (ABS). During the crisis, as firms faced liquidity problems, the value of these assets decreased quickly, possibly in part as a result of fire sales.", "Since the crisis, many regulatory changes have been made related to certain money market, commercial paper, and repurchase agreement markets and practices. For example, in the United States, certain money market mutual funds now must have a floating net asset value . Among other benefits, this may signal to fund investors that a loss of principal is possible and thus reduce the likelihood that investors would \"run\" at the first sign of possible small losses. However, some observers are still concerned that shadow banking poses risks, because the funding of relatively long-term assets with relatively short-term liabilities will inherently introduce run-risk absent certain safeguards."], "subsections": []}, {"section_title": "Financial Technology, or \"Fintech\"", "paragraphs": ["As discussed above, f intech usually refers to technologies with the potential to alter the way certain financial services are performed. Banks are affected by technological developments in two ways: (1) they face choices over how much to invest in emerging technologies and to what extent they want to alter their business models in adopting technologies, and (2) they potentially face new competition from new technology-focused companies. Such technologies include online marketplace lending, crowdfunding, blockchain and distributed ledgers, and robo-advising, among many others. Certain financial innovations may create opportunities to improve social and economic outcomes, but there is also potential to create risks or unexpected financial losses. ", "Potential benefits from fintech are greater efficiency in financial markets that creates lower prices and increased customer and small business access to financial services. These can be achieved if innovative technology replaces traditional processes that are outdated or inefficient. For example, automation may be able to replace employees, and digital technology can replace physical systems and infrastructure. Cost savings from removing inefficiencies may lead to reduced prices, making certain services affordable to new customers. Some customers who previously did not have access to services\u2014due to such things as the lack of information about creditworthiness or geographic remoteness\u2014could also potentially gain access. Increased accessibility may be especially beneficial to traditionally underserved groups, such as low-income, minority, and rural populations.", "Fintech could also create or increase risks. Many fintech products have only a brief history of operation, so it can be difficult to predict outcomes and assess risk. It is possible certain technologies may not in the end function as efficiently and accurately as intended. Also, the stated aim of a new technology is often to bring a product directly to consumers and eliminate a \"middle-man.\" However, that middle-man could be an experienced financial institution or professional that can advise consumers on financial products and their risks. In these ways, fintech could increase the likelihood that consumers engage in a financial activity and take on risks that they do not fully understand.", "Policymakers debate whether (and which) innovations can be integrated into the financial system without additional regulatory or policy action. Technology in finance largely involves reducing the costs or time involved in providing existing products and services, and the existing regulatory structure was developed to address risks from these financial products and activities. Existing regulation may be able to accommodate new technologies while adequately protecting against risks. However, there are two other possibilities. One is that some regulations may be stifling beneficial innovation. Another is that existing regulation does not adequately address risks created by new technologies.", "Some observers argue that regulation could potentially impede the development and introduction of beneficial innovation. For example, companies incur costs to comply with regulations. In addition, companies are sometimes unsure how regulators will treat the innovation once it is brought to market. A potential solution being used in other countries is to establish a regulatory \"sandbox\" or \"greenhouse\" wherein companies that meet certain requirements work with regulators as products are brought to market under a less onerous regulatory framework. In the United States, the CFPB has recently introduced a sandbox wherein companies can experiment with disclosure forms.", "Some are concerned that existing regulations may not adequately address certain risks posed by new technologies. Regulatory arbitrage\u2014conducting business in a way that circumvents unfavorable regulations\u2014may be a concern in this area. Fintech potentially could provide an opportunity for companies to claim they are not subject to certain regulations because of a superficial difference between how they operate compared with traditional banks. ", "Another group of issues posed by fintech relates to cybersecurity (for general issues related to cybersecurity, see the \" Cybersecurity \" section above). As financial activity increasingly uses digital technology, sensitive data are generated. Data can be used to accurately assess risks and ensure customers receive the best products and services. However, data can be stolen and used inappropriately, and there are concerns over privacy issues. This raises questions over ownership and control of the data\u2014including the rights of consumers and the responsibilities of companies in accessing and using data\u2014and whether companies that use and collect data face appropriate cybersecurity requirements. "], "subsections": []}, {"section_title": "Higher Interest Rate Environment", "paragraphs": ["The Federal Reserve's monetary policy response to the financial crisis, the ensuing recession, and subsequent slow economic growth was to keep interest rates unusually low for an extraordinarily long time. It accomplished this in part using unprecedented monetary policy tools such as quantitative easing \u2014large-scale asset purchases that significantly increased the size of the Federal Reserve's balance sheet. Recently, as economic conditions improved, the Federal Reserve took steps to normalize monetary policy such as raising its target interest rate and reducing the size of its balance sheet. ", "A rising interest rate environment\u2014especially following an extended period of unusually low rates achieved with unprecedented monetary policy tools\u2014is an issue for banks because they are exposed to interest rate risk . A portion of bank assets have fixed interest rates with long terms until maturity, such as mortgages, and the rates of return on these assets do not increase as current market rates do. However, many bank liabilities are short term, such as deposits, and can be repriced quickly. So although certain interest revenue being collected by banks is slow to rise, the interest costs paid out by banks can rise quickly. In addition to putting stress on net income, rising interest rates can cause the market value of fixed-rate assets to fall. Finally, banks incur an opportunity cost when resources are tied up in long-term assets with low interest rates rather than being used to make new loans at higher interest rates.", "The magnitude of interest rate risks should not be overstated, as rising rates can potentially increase bank profitability if they result in a greater difference between long-term rates banks receive and short-term rates they pay\u2014referred to as net interest margin . However, thus far into the Federal Reserve interest rate normalization process, this has not materialized. During 2018, the difference between long-term rates and short-term rates has generally decreased (known as a flattening of the yield curve ). ", "Whatever changes may occur to various interest rates in the coming months and years, banks and regulators typically recognize the importance of managing interest rate risk, carefully examine the composition of bank balance sheets, and plan for different interest rate change scenarios. While banks are well-practiced at interest rate risk management through normal economic and monetary policy cycles, managing bank risk through a period of interest rate growth could be more challenging because rates have been so low for so long and achieved through unprecedented monetary policy tools. Because rates have been low for so long, many loans made in different interest rate environments that preceded the crisis have matured. Meanwhile, all new loans made in the past 10 years were made in a low interest rate environment. This presents challenges to banks seeking to hold a mix of loans with different rates. In addition, because the Federal Reserve has used new monetary policy tools and grown its balance sheet to unprecedented levels, accurately controlling the pace of interest rate growth may be challenging. "], "subsections": []}]}, {"section_title": "CRS Resources", "paragraphs": [], "subsections": []}]}}
{"id": "R42723", "title": "Marine Corps Amphibious Combat Vehicle (ACV): Background and Issues for Congress", "released_date": "2019-04-11T00:00:00", "summary": ["On January 6, 2011, after spending approximately $3 billion in developmental funding, the Marine Corps cancelled the Expeditionary Fighting Vehicle (EFV) program due to poor reliability demonstrated during operational testing and excessive cost growth. Because the EFV was intended to replace the 40-year-old Amphibious Assault Vehicle (AAV), the Pentagon pledged to move quickly to develop a \"more affordable and sustainable\" vehicle to replace the EFV. The Amphibious Combat Vehicle (ACV) is intended to replace the AAV, incorporating some EFV capabilities but in a more practical and cost-efficient manner. In concert with the ACV, the Marines were developing the Marine Personnel Carrier (MPC) to serve as a survivable and mobile platform to transport Marines when ashore. The MPC was not intended to be amphibious like an AAV, EFV, or the ACV but instead would be required to have a swim capability for inland waterways such as rivers, lakes, and other water obstacles such as shore-to-shore operations in the littorals. Both vehicles were intended to play central roles in future Marine amphibious operations. On June 14, 2013, Marine leadership put the MPC program \"on ice\" due to budgetary pressures but suggested the program might be resurrected some 10 years down the road when budgetary resources might be more favorable.", "In what was described as a \"drastic shift,\" the Marines decided to \"resurrect\" the MPC in March 2014. The Marines designated the MPC as ACV Increment 1.1 and planned to acquire about 200 vehicles. The Marines also plan to develop ACV Increment 1.2, a tracked, fully amphibious version, and at the time planned to acquire about 470 vehicles and fund an ongoing high water speed study. Although ACV Increment 1.1 is to have a swim capability, another mode of transport (ship or aircraft) would be required to get the vehicles from ship to shore. The Marines are reportedly exploring the possibility of developing a high water speed ACV 2.0, which could accompany tanks and light armored vehicles into combat.", "On November 5, 2014, the Marines released a draft Request for Proposal (RFP) for ACV Increment 1.1. On November 24, 2015, the Marine Corps awarded BAE Systems and SAIC contracts to develop ACV 1.1 prototypes for evaluation. BAE's contract was for $103.8 million and SAIC's for $121.5 million, and each company was to build 16 prototypes to be tested over the next two years. Both BAE and SAIC delivered their prototypes early, and Engineering and Manufacturing Development (EMD) testing began mid-March 2017. In early December 2017, the Marines reportedly sent the ACV 1.1 down select request for proposals to BAE and Science Applications International Corporation (SAIC).", "On June 19, 2018, the Marine Corps selected BAE Systems to produce the ACV. The initial contract\u2014valued at $198 million\u2014was for low-rate production of 30 vehicles to be delivered by the autumn of 2019. On April 10, 2019, during testimony to the Senate Armed Services Committee, Navy and Marine Corps leadership announced that during the fall of 2018, ACV 1.1 prototypes demonstrated satisfactory water mobility performance in high surf conditions and, in doing so, met the full water mobility transition requirement for ACV 1.2 capability. As a result, ACV 1.1 and ACV 1.2 were to be consolidated into a single variant\u2014the ACV\u2014which is intended to replace all AAVs.", "Potential issues for Congress include the potential ramifications of the consolidation of the ACV 1.1 and ACV 1.2 programs and how the possible adoption of the Expeditionary Advance Base Operations (EABO) operational concept could affect the ACV program."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["U.S. Code, Title 10, Section 5063, United States Marine Corps: Composition and Functions, dated October 1, 1986, states the following:", "The Marine Corps will be organized, trained and equipped to provide an amphibious and land operations capability to seize advanced naval bases and to conduct naval land campaigns.", "In this regard, the Marines are required by law to have the necessary equipment to conduct amphibious operations and land operations. The ACV and MPC were considered integral systems by the Department of Defense (DOD) and Marine Corps to meet this legal requirement, as well as providing critical capabilities to execute the nation's military strategy.", "On January 6, 2011, after spending approximately $3 billion in developmental funding, the Marine Corps\u2014with \"encouragement\" from DOD\u2014cancelled the Expeditionary Fighting Vehicle (EFV) program. The EFV was intended to replace the 40-year-old Amphibious Assault Vehicle (AAV), which currently transports Marines from ships to shore under hostile conditions. The Marine Corps cancelled the EFV due to excessive cost growth and poor performance in operational testing. Recognizing the need to replace the AAV, the Pentagon pledged to move quickly to develop a \"more affordable and sustainable\" vehicle to take the place of the EFV. The Amphibious Combat Vehicle (ACV) is intended to replace the AAV, incorporating some EFV capabilities but in a more practical and cost-efficient manner. ", "In concert with the ACV, the Marines were developing the Marine Personnel Carrier (MPC) to serve as a survivable and mobile platform to transport Marines when ashore. At present, the Marines do not have a wheeled armored fighting vehicle that can operate as a dedicated infantry carrier with Marine maneuver forces inland. The MPC was not intended to be amphibious like an AAV, EFV, or the ACV but instead would be required to have a swim capability for inland waterways such as rivers, lakes, and other water obstacles such as shore-to-shore operations in the littorals. Because of a perceived amphibious \"redundancy,\" some have questioned the need for both the ACV and MPC. In June 2013, citing budgetary pressures, the Marines reportedly put the MPC program \"on ice\" and suggested that it might not be resurrected for about 10 years. Although some have questioned why the Marines cannot simply \"adopt\" a U.S. Army personnel carrier, Marine requirements for a personnel carrier reflect the need for this vehicle to be compatible with amphibious assault craft, as well as to have an enhanced amphibious capability, which is not necessarily an Army requirement.", "With the Marines involved in decades-long land conflicts in Iraq and Afghanistan and proliferating anti-access technologies such as guided missiles, some analysts questioned whether the Marines would ever again be called on to conduct a large-scale amphibious assault operation. In response to these questions and the perceived need to examine the post-Iraq and Afghanistan Marine Corps, the Department of the Navy and DOD studied the requirement to conduct large-scale amphibious operations and in early 2012 released a strategic vision for how amphibious operations will be conducted in the future. The primary assertion of this study is that the Marine Corps' and Navy's amphibious capabilities serve a central role in the defense of the global interests of a maritime nation. The need to maintain an amphibious assault capability is viewed by Marine Corps leadership as establishing the requirement for the ACV and MPC (as discussed in greater detail below)."], "subsections": []}, {"section_title": "Significance for Congress", "paragraphs": ["Congress is responsible for authorizing and appropriating funds for all weapon systems programs, including the ACV. In its oversight role, Congress could be concerned about how the ACV enables the Marines to conduct not only amphibious operations but also operations ashore. Another possible congressional concern is to what extent a robust amphibious assault capability is a necessary component of U.S. national security. Cost is another issue of interest to Congress."], "subsections": []}, {"section_title": "The Marines' Justification for the ACV and MPC", "paragraphs": [], "subsections": [{"section_title": "ACV", "paragraphs": ["At present, the Marines use the AAV-7A1 series amphibious assault vehicle to move Marines from ship to shore. The Marines have used the AAV since 1971 and expect to continue to use it until replaced by the ACV or a similar vehicle. Over the years, the Marines have claimed the AAV has become increasingly difficult to operate, maintain, and sustain. As weapons technology and threat capabilities have evolved since the early 1970s, the AAV\u2014despite upgrades\u2014is viewed as having capabilities shortfalls in the areas of water and land mobility performance, lethality, protection, and network capability. The AAV's two-mile ship-to-shore range is viewed by many as a significant survivability issue not only for the vehicle itself but also for naval amphibious forces."], "subsections": []}, {"section_title": "MPC", "paragraphs": ["Although the AAV has some armor protection and can operate inland to a limited extent, it is not intended for use as an infantry combat vehicle. The Marines do have the LAV-25, Light Armored Vehicle-25, an eight-wheeled armored vehicle that carries a crew of three and six additional marines. The LAV-25 is armed with a 25 mm chain gun and a 7.62 mm machine gun but is not fully amphibious, as it cannot cross a surf zone and would get to the beach via some type of connector such as the Landing Craft, Air Cushioned (LCAC). The LAV-25 has been in service since 1983. According to the Marine Program Executive Office (PEO) Land Systems, the LAV is not employed as an armored personnel carrier and usually carries a four-person Marine scout/reconnaissance team in addition to its crew. In this regard, the MPC was viewed as necessary by Marine leadership for the transport and enhanced armor protection of Marine infantry forces."], "subsections": []}]}, {"section_title": "Desired Operational Capabilities", "paragraphs": [], "subsections": [{"section_title": "ACV4", "paragraphs": ["The Marines' 2011 Request for Information (RFI) to industry provides an overview of the operational requirements for the ACV. These requirements include the following:", "The proposed vehicle must be able to self-deploy from amphibious shipping and deliver a reinforced Marine infantry squad (17 marines) from a launch distance at or beyond 12 miles with a speed of not less than 8 knots in seas with 1-foot significant wave height and must be able to operate in seas up to 3-foot significant wave height. The vehicle must be able to maneuver with the mechanized task force for sustained operations ashore in all types of terrain. The vehicle's road and cross-country speed as well as its range should be greater than or equal to the M-1A1. The vehicle's protection characteristics should be able to protect against direct and indirect fire and mines and improvised explosive device (IED) threats. The vehicle should be able to accommodate command and control (C2) systems that permit it to operate both at sea and on land. The vehicle, at a minimum, should have a stabilized machine gun in order to engage enemy infantry and light vehicles."], "subsections": []}, {"section_title": "MPC6", "paragraphs": ["The Marine Corps' 2011 Request for Information (RFI) to industry provided an overview of the operational requirements for the MPC. These requirements included the following:", "The vehicle must accommodate nine marines and two crew members and have a \"robust tactical swim capability (shore-to-shore [not designed to embark from an amphibious ship]) and be capable of operating at 6 knots in a fully developed sea.\" The vehicle must be able to operate on land with M-1A1s in mechanized task forces across the Marine Corps' mission profile. The vehicle shall provide protection for the occupants from the blasts, fragments, and incapacitating effects of attack from kinetic threats, indirect fire, and improvised explosive devices and mines. The vehicle shall be capable of firing existing Marine anti-structure and anti-armor missiles and should be able to accommodate existing command and control (C2) systems."], "subsections": []}]}, {"section_title": "Expeditionary Advance Base Operations (EABO)", "paragraphs": ["Defense officials have noted the Marine Corps is \"not currently organized, trained and equipped to face a peer adversary in the year 2025\" and enemies with advanced air and shore defense will make amphibious operations even riskier. To counter this, the Navy is developing the Expeditionary Advance Base Operations (EABO) operational concept to address these concerns. EABO is described as follows: ", "Expeditionary Advance Base Operations is a naval operational concept that anticipates the requirements of the next paradigm of US Joint expeditionary operations. The concept is adversary based, cost informed and advantage focused. EABO calls for an alternative, difficult to target forward basing infrastructure that will enable US naval and joint forces to create a more resilient forward based posture to persist, partner and operate within range of adversary long range precision fires. The alternative forward posture enabled by Expeditionary Advance Bases (EABs) is designed to mitigate the growing threat posed by the abundant quantity, expanded range and enhanced precision of potential adversary weaponry\u2014particularly ballistic and cruise missiles designed to attack critical joint fixed forward infrastructure and large platforms. EABs provide a dispersed and largely mobile forward basing infrastructure that enables a persistent alternative force capability set that is similarly designed to be difficult to target and inherently resilient. The resilient, reduced signature infrastructure of EABs, combined with naval forces designed and structured to persist and operate within the arc of adversary anti-access/aerial denial (A2AD) capabilities enables naval commanders to conduct Expeditionary Advance Base Operations to support Joint Force Maritime Component Commander (JFMCC), and Fleet Commanders in the fight for sea control, by exploiting the opportunities afforded by key maritime terrain, particularly in close and confined seas. EABO advances, sustains and maintains the naval and joint sensor, shooter and sustainment capabilities of dispersed forces to leverage the decisive massed capabilities of the larger joint force with enhanced situational awareness, augmented fires and logistical support. The EABO Concept enables US naval forces to exercise 21 st Century naval operational art, meet new enemy A2AD threats with new capabilities and operate and thrive in and around close and confined seas.", "In terms of Marine Corps amphibious assault operations, the adoption of EABO could reportedly result in \"an entirely different approach to amphibious assaults as well as new weapon systems.\" Noting that \"missiles can now hit ships and landing craft while they are hundreds of miles from shore, making it far too dangerous for Marines to storm a beach with current capabilities,\" Marine officials are reportedly exploring ways to create temporary \"bubbles\" where Marines can get ashore. In response to these challenges, current and planned weapons systems might need to be modified to accommodate EABO operational concepts."], "subsections": []}, {"section_title": "Past Programmatic Activities", "paragraphs": [], "subsections": [{"section_title": "2013 Decision to \"Shelve\" the MPC", "paragraphs": ["As previously noted, in June 2013, citing budgetary pressures, the Marines reportedly put the MPC program \"on ice\" and suggested it might not be resurrected for about 10 years. At the time of the decision, the Marines' acquisition priorities were refocused to the ACV as well as the Joint Light Tactical Vehicle (JLTV). Although the Marines refocused budgetary resources to the ACV, difficulties in developing an affordable high water speed capability for the ACV continued to confront Marine leadership. "], "subsections": []}, {"section_title": "MPC Becomes ACV 1.115", "paragraphs": ["In what was described as a \"drastic shift,\" the Marines decided in March 2014 to \"resurrect\" the MPC and designate it as ACV Increment 1.1 and initially acquire about 200 vehicles. The Marines also plan to develop ACV Increment 1.2, a tracked version, and to acquire about 470 vehicles and fund an ongoing high water speed study. Although ACV Increment 1.1 will have a swim capability, a connector will be required to get the vehicles from ship to shore.", "Plans called for ACV Increment 1.1 to enter the acquisition cycle at Milestone B (Engineering and Manufacturing Development) in FY2016, award prototype contracts leading to a down select to one vendor in FY2018, and enter low-rate initial production. "], "subsections": []}, {"section_title": "Marines Release Request for Information (RFI) for ACV Increment 1.116", "paragraphs": ["On April 23, 2014, the Marines released an RFI for ACV Increment 1.1. Some of the required capabilities included the following: ", "... operate in a significant wave height of two feet and sufficient reserve buoyancy to enable safe operations; a high level of survivability and force protection; operate in four to six feet plunging surf with ship-to-shore operations and launch from amphibious ships as an objective; land mobility, operate on 30 percent improved surfaces and 70 percent unimproved surfaces; ability to integrate a .50 calibre remote weapon station (RWS) with growth potential to a dual mount 40 mm/.50 calibre RWS or a 30 mm cannon RWS; carrying capacity to include three crew and 10 embarked troops as the threshold, 13 embarked troops as the objective, carry mission essential equipment and vehicle ammunition; and the ability to integrate a command, control and communications suite provided as government furnished equipment ...", "The RFI included a requirement for industry to deliver 16 prototype vehicles nine months after contract award in April 2016 at a rate of 4 vehicles per month. The Marines estimated ACV Increment 1.1 would cost about $5 million to $6 million per vehicle, about $10 million less than what the previous ACV version was expected to cost."], "subsections": []}, {"section_title": "Marines Release Draft Request for Proposal (RFP) for ACV Increment 1.120", "paragraphs": ["On November 5, 2014, the Marines reportedly released a draft RFP for ACV Increment 1.1. The Marines were looking for information from industry regarding program milestones, delivery schedules, and where in the program cost savings could be achieved. Plans were for two companies to build 16 prototype vehicles each for testing. Companies who competed for the two contracts included BAE Systems, General Dynamics Land Systems (GDLS), Lockheed Martin, and Scientific Applications International Corporation (SAIC)."], "subsections": []}, {"section_title": "Additional Details on 2015 ACV 1.1 RFP22", "paragraphs": ["Under the provisions of the RFP, the ACV 1.1 was envisioned as an eight-wheeled vehicle capable of carrying 10 Marines and a crew of 3 that would cost between $4 million to $7.5 million per copy\u2014a change from the RFI estimate of $5 million to $6 million per vehicle. In terms of mobility, the ACV 1.1 would need to be able to travel at least 3 nautical miles from ship to shore, negotiate waves up to at least 2 feet, travel 5 to 6 knots in calm seas, and be able to keep up with the M-1 Abrams tank once ashore.", "Proposals were due in April 2016 and the Marines reportedly planned to award two EMD contracts for 16 vehicles each to be delivered in November 2016. In 2018, the Marines would then down select to one vendor and start full production. "], "subsections": [{"section_title": "ACV 1.1 Fielding Plan23", "paragraphs": ["The Marines reportedly plan to acquire 204 ACV 1.1s, to be allocated as follows:", "1 st Marine Expeditionary Force, Camp Pendleton, CA\u2014 67 ; 2 nd Marine Expeditionary Force, Camp Lejeune, NC\u2014 46 ; 3 rd Marine Expeditionary Force, Okinawa, Japan\u2014 21 ; Assault Amphibian School, Camp Pendleton, CA\u2014 25 ; Exercise Support Division, Marine Corps Air Ground Combat Center, Twenty Nine Palms, CA\u2014 25 ; and Program Manager, Quantico, VA, and Amphibious Vehicle Test Branch, Camp Pendleton, CA\u2014 20 .", "In April 2016 testimony to the Senate Armed Services Committee, the Deputy Commandant for Combat Development and Integration testified that the Marines' Acquisition Objective for the ACV 1.1 remained at 204 vehicles, which would provide lift for two infantry battalions. Full Operational Capability (FOC) for ACV 1.1 is planned for FY2020."], "subsections": []}]}, {"section_title": "Marines Award ACV 1.1 Contracts26", "paragraphs": ["On November 24, 2015, the Marine Corps awarded BAE Systems and SAIC contracts to develop ACV 1.1 prototypes for evaluation. BAE's contract was for $103.8 million and SAIC's for $121.5 million, and each company is to build 16 prototypes. The Marines expect to down select to a single vendor in 2018. Initial operational capability (IOC) was expected by the end of 2020, and all ACV 1.1 vehicles are planned to be fielded by summer 2023. Plans are to equip six battalions with ACV 1.1s and 392 existing upgraded AAVs.", "Both BAE and SAIC reportedly have a long history related to amphibious vehicles, as BAE built the Marines' original AAV and SAIC has built hundreds of Terrex 1 vehicles used by Singapore, and both companies had Marine Corps contracts to modernize AAVs.", "ACV 1.1 is intended to have some amphibious capability but would rely on ship-to-shore connectors. ACV 1.2 is intended to have greater amphibious capability, including greater water speed and the ability to self-deploy from amphibious ships.", "BAE planned to team with Italian manufacturer Iveco (which owns Chrysler and Ferrari). BAE's prototype would accommodate 13 Marines and travel 11.5 miles at about 7 miles per hour (mph) in surf and 65 mph on land. BAE's version would incorporate a V hull design intended to protect passengers from underside blasts and have external fuel tanks for increased safety. BAE intends to produce its prototypes at its York, PA, facility.", "SAIC planned to team with Singapore Technology Kinetics to develop its prototype based on an existing design called Terrex. SAIC's version is said to travel 7 mph in water and incorporates a V hull design as well as blast-mitigating seats. It would carry a crew of 3 and can accommodate 11 Marines. SAIC's version plans for a Common Remote Weapons System (CROWS) (.50 calibre machine gun and a 30 mm cannon), which could be operated from inside the vehicle while buttoned up, therefore not exposing crewmen to hostile fire."], "subsections": []}, {"section_title": "General Dynamics Land Systems (GDLS) Protests Contract Awards to the Government Accountability Office (GAO)27", "paragraphs": ["On December 7, 2015, it was reported that GDLS would protest the award of the ACV 1.1 contract to BAE and SAIC, claiming the Marines asked for particular capabilities and then evaluated vendors by a different set of standards. "], "subsections": []}, {"section_title": "GAO Denies GDLS Protest28", "paragraphs": ["On March 15, 2016, GAO denied GDLS's protest, noting that \"the Marine Corps' evaluation was reasonable and consistent with the evaluation scheme identified in the solicitation.\" The Marines reportedly stated that the protest put the ACV 1.1 program about 45 days behind schedule but anticipated the ACV 1.1 would still be fielded on time."], "subsections": []}, {"section_title": "BAE Systems and SAIC Deliver ACV 1.1 Prototypes Early and EMD Testing Begins31", "paragraphs": ["BAE and SAIC reportedly delivered their ACV 1.1 prototypes, with BAE delivering its first prototype in December 2016 and SAIC delivering its prototype in February 2017. This early delivery could potentially result in an unspecified incentive fee award for both companies. EMD testing began the week of March 13 and was scheduled to last eight months."], "subsections": []}, {"section_title": "Marine Corps Down Select Final Proposals32", "paragraphs": ["In early December 2017, the Marines reportedly sent the ACV 1.1 down select request for proposals to BAE and SAIC. Plans called for operational testing to start in January 2018, with the Marines anticipating announcing a contract winner in June 2018 for the delivery of 204 ACV 1.1s over a four-year period."], "subsections": []}, {"section_title": "Annual Required GAO Report on the ACV Program33", "paragraphs": ["In accordance with the provisions of the FY2014 National Defence Authorization Act ( P.L. 113-66 ) Section 251, GAO submitted its annual report to Congress on the ACV program in April 2018. GAO reviewed program cost estimates, updated schedules, and program assessments of test results and production readiness, and compared ACV acquisition efforts to DOD guidance and GAO-identified best practices. GAO found the following:", "The first version of the Amphibious Combat Vehicle (ACV 1.1) is on track to meet development cost goals with no additional anticipated delays for major acquisition milestones. With regard to costs, the development phase of ACV 1.1 is on pace to not exceed cost goals that were established at the start of development, based on a recent Navy estimate, the ACV program office, and reporting from the contractors.", "GAO recommended that the Marine Corps (1) not enter the second year of low rate production for ACV 1.1 until after the contractor has achieved an overall Manufacturing Readiness Level (MRL) of 8 and (2) not enter full-rate production until achieving an overall MRL of 9. DOD partially concurred with this recommendation but noted that it was \"reasonable to proceed at lower MRL levels if steps are taken to mitigate risks.\""], "subsections": []}, {"section_title": "BAE Wins ACV Competition38", "paragraphs": ["On June 19, 2018, the Marine Corps selected BAE Systems to produce the ACV. Reportedly, the initial contract\u2014valued at $198 million\u2014will be for low-rate production of 30 vehicles to be delivered by the autumn of 2019. Eventually, 204 vehicles are to be delivered under the ACV 1.1 phase of the project. BAE will also produce the ACV 1.2 variant and, all told, the entire ACV 1.1 and 1.2 project is expected to deliver 700 vehicles, and, if all options are exercised, the total contract will reportedly be worth $1.2 billion."], "subsections": []}, {"section_title": "Navy Awards BAE Contract for ACV Lot 239", "paragraphs": ["In December 2018, the Navy reportedly awarded BAE Systems a $140 million contract modification to build 30 Low Rate Initial Production (LRIP) ACVs as part of Lot 2, with the first vehicles expected to be delivered in the summer of 2020. Lot 1 is reportedly still scheduled to start delivery in the summer of 2019. "], "subsections": []}, {"section_title": "Director, Operational Test and Evaluation (DOT&E) FY2018 Annual Report40", "paragraphs": ["In DOT&E's December 2018 FY2018 Annual Report, it was noted", "During the operational evaluation (OA), the ACV-equipped unit demonstrated the ability to maneuver to an objective, conduct immediate action drills, and provide suppressive fires in support of dismounted infantry maneuver in a desert environment. The ACV-equipped unit was able to maneuver in the littorals; embark aboard a landing craft air cushioned (LCAC), transit the open ocean and surf zone, and debark from the LCAC. The ACV demonstrated water mobility and the ability to self-deploy from the beach, cross the surf zone, enter the ocean, swim, and return to the beach. Based on data from the OA, reliability is below the program reliability growth curve (58 hours Mean Time Between Operational Mission Failures [MTBOMF]). BAE vehicles demonstrated 24.9 hours MTBOMF. There were no systemic problems identified that indicate a major redesign is required. The ACV section was successful in 15 of 16 missions and demonstrated the capability to negotiate terrain in the desert and littorals, operate with tanks and light armored vehicles, and maneuver to achieve tactical advantage over the opposing threat force. ACV crews, supported infantry, and the opposing force noted that the vehicles performed better than the legacy vehicle in a wide variety of areas.", "In terms of recommendations, DOT&E noted the Program Manager, Advanced Amphibious Assault should do the following:", "Modify the infantry troop commander's station to make it easier to move between the hatch and seat. Assess the capability of all existing Marine Corps recovery assets to recover the ACV. Investigate options for preventing damage to steering/suspension when encountering battlefield debris, such as concertina wire."], "subsections": []}]}, {"section_title": "ACV 1.2 Requirements", "paragraphs": [], "subsections": [{"section_title": "Ship-to-Shore Requirements for the Next ACV Version43", "paragraphs": ["According to reports, the Marines envisioned that the successor to ACV 1.1\u2014the ACV 1.2\u2014would have a threshold requirement of 12 miles from ship-to-shore. If this threshold can be achieved, it could help to reduce the vulnerability of U.S. naval vessels supporting Marine amphibious operations to enemy shore fire."], "subsections": []}]}, {"section_title": "ACV 1.1 and ACV 1.2 Consolidated44", "paragraphs": ["On April 10, 2019, during testimony to the Subcommittee on Seapower of the Senate Armed Services Committee, Navy and Marine Corps leadership noted", "During the fall of 2018, ACV 1.1 prototypes demonstrated satisfactory water mobility performance in high surf conditions, and in doing so met the full water mobility transition requirement for ACV 1.2 capability. Subsequently, the Milestone Decision Authority Assistant Secretary of the Navy for Research, Development and Acquisition (ASN (RD&A)) approved the consolidation of increments one and two into a single program to enable continuous production of ACVs to completely replace the AAV. The next key acquisition event is the Full Rate Production decision scheduled for the third quarter of FY 2020 following Initial Operational Test & Evaluation. ACV remains on schedule to achieve Initial Operational Capability in the fourth quarter of FY 2020.", "With the consolidation of ACV variants into a single variant, there will likely be a number of programmatic changes and potential ramifications for the ACV and ACV 2.0 programs."], "subsections": []}, {"section_title": "ACV 2.045", "paragraphs": ["Reportedly, the Marines plan to develop an ACV 2.0, capable of carrying 10 to 13 Marines plus crew, capable of high water speeds and deployment from ships far from the coast. ACV 2.0 is planned to be capable of operating on land alongside tanks and light armored vehicles. According to the Marines", "ACV 2.0 serves as a conceptual placeholder for a future Decision Point (~ 2025, or sooner) at which time knowledge gained in the fielding and employment of the first phase of ACV (1.1 and 1.2), the state of the naval connector strategy, and science & technology work towards a high water speed capable self-deploying vehicle will support an informed decision."], "subsections": []}, {"section_title": "Department of Defense FY2020 Budget Request47", "paragraphs": ["The FY2020 presidential budget request includes RDT&E and Procurement funding requests in the Base Budget, as well as FY2020 requested quantities. The Marines did not request ACV Overseas Contingency operations (OCO) funding in FY2020.", "According to DOD, the FY2020 ACV budget request will fund", "The ACV 1.1 Full Rate Production (FRP) Lot 3 of 56 vehicles, plus procurement of related items such as production support, systems engineering, program management, Engineering Change Orders (ECOs), Government Furnished Equipment (GFE), and integrated logistics support. Research and Development efforts include the procurement of ACV 1.2 MRV test articles, associated GFE, and initiation of a Vehicle Protective System trade study and integration efforts."], "subsections": []}, {"section_title": "Potential Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "The Consolidation of the ACV 1.1 and ACV 1.2 Programs", "paragraphs": ["While from an overall programmatic perspective, the consolidation of the ACV 1.1 and ACV 1.2 variants could be viewed as a favourable programmatic outcome, there are likely ramifications that might be of interest to policymakers. Potential issues include the following:", "Will the consolidation of ACV 1.1 and ACV 1.2 result in an overall cost savings? Will this consolidation permit the acquisition of additional ACVs because of potential cost savings? With the consolidation and the stated intent to replace AAVs, what is the revised timeline for the replacement of AAVs and will this result in cost savings from not having to upgrade and maintain AAVs longer than previously intended? How will the consolidation of ACV 1.1 and ACV 1.2 affect the ACV 2.0 program?"], "subsections": []}, {"section_title": "Expeditionary Advance Base Operations and the ACV", "paragraphs": ["If the Navy and Marine Corps decide to adopt Expeditionary Advance Base Operations (EABO) as an operational concept, it could possibly have implications for the ACV program, including the following:", "At the weapon systems level, would EABO require any changes to the vehicles themselves, such as enhanced survivability, lethality, or Command, Control, Communications, Computer, Intelligence, Surveillance, and Reconnaissance (C4ISR) features? If changes are required to facilitate EABO, how would this affect the program's overall acquisition timeline and cost? If EABO does not require any technical changes in the ACV program, would the adoption of EABO modify the Marines' current procurement quantities of ACVs? If EABO requires different procurement quantities for the different ACV versions (more or fewer), how might this affect program timelines and program costs?"], "subsections": []}]}]}}
{"id": "RL31913", "title": "Debt Limit Legislation: The House \u201cGephardt Rule\u201d", "released_date": "2019-02-13T00:00:00", "summary": ["Essentially all of the outstanding debt of the federal government is subject to a statutory limit, which is set forth as a dollar limitation in 31 U.S.C. 3101(b). From time to time, Congress considers and passes legislation to adjust or suspend this limit.", "At the beginning of the 116th Congress, the House adopted a standing rule that would provide for legislation suspending the statutory debt limit to be considered as passed by the House, without a separate vote, when the House adopts the budget resolution for a fiscal year. This House rule is similar to a previous one related to the debt limit (commonly referred to as the \"Gephardt rule,\" named after its original sponsor, former Representative Richard Gephardt), which was first adopted in 1979 but was repealed at the beginning of the 112th Congress in 2011.", "The House may also consider debt limit legislation without resorting to the new debt limit rule (and also did so under the former Gephardt rule) either as freestanding legislation, as part of another measure, or as part of a budget reconciliation bill. The Senate does not have (and has never had) a comparable procedure. If it chooses under the new rule to consider such debt-limit legislation, it would do so under its regular legislative process.", "This report first explains the current House debt limit rule, particularly in relation to the former Gephardt rule. Then, it describes the legislative history of the former rule and reviews how the former rule operated before it was repealed at the beginning of the 112th Congress.", "Under the former Gephardt rule, in 11 of the 31 years between 1980 and 2010, the rule was either suspended (1988, 1990-1991, 1994-1997, and 1999-2000) or repealed (2001-2002) by the House. In most years in which the rule was suspended, legislation changing the statutory limit was not necessary\u2014that is, at the time, the existing public debt limit was expected to be sufficient.", "During the years in which the rule applied (i.e., in the remaining 20 of the 31 years between 1980 and 2010), the rule led to the automatic engrossment of 20 House joint resolutions increasing the statutory limit on the public debt. In effect, under the rule, in these cases, the House was able to initiate legislation increasing the level of the public debt limit without a separate, direct vote on the legislation. Of these 20 joint resolutions, 15 became law. In 10 of these 15 cases, the Senate passed the measure without change, allowing it to be sent to the President for his signature without any further action by the House. In the remaining 5 cases, the Senate amended the rule-initiated legislation, requiring the House to vote on the amended legislation before it could be sent to the President.", "During this period, the House also originated and considered debt limit legislation without resorting to the Gephardt rule either as freestanding legislation, as part of another measure, or as part of a budget reconciliation bill. Of the 47 public debt limit changes enacted into law during the period 1980-2010, 32 were enacted without resorting to the Gephardt rule, each requiring the House to vote on such legislation.", "In total, between 1980 and 2010, the rule effectively allowed the House to avoid a separate, direct vote on 10 of the 47 measures changing the debt limit that were ultimately enacted into law.", "This report updates the previous one (dated July 27, 2015) with a description of the changes to the former rule."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Essentially all of the outstanding debt of the federal government is subject to a statutory limit, which is set forth as a dollar limitation in 31 U.S.C. 3101(b). From time to time, Congress considers and passes legislation to adjust or suspend this limit. Legislation adjusting the debt limit takes the form of an amendment to 31 U.S.C. 3101(b), usually striking the current dollar limitation and inserting a new one. In recent years, such legislation has taken the form of suspending the debt limit through a date certain with an increase to the dollar limit made administratively at the end of the suspension period.", "At the beginning of the 116 th Congress, the House adopted a standing rule that would provide for legislation suspending the statutory debt limit to be considered as passed by the House, without a separate vote, when the House adopts the budget resolution for a fiscal year. This House rule is similar to a previous one related to the debt limit (commonly referred to as the \"Gephardt rule,\" named after its original sponsor, former Representative Richard Gephardt), which was first adopted in 1979 but was repealed at the beginning of the 112 th Congress in 2011.", "The House may also consider debt limit legislation without resorting to the new debt limit rule (and also did so under the former Gephardt rule) either as freestanding legislation, as part of another measure, or as part of a budget reconciliation bill. The Senate does not have (and has never had) a comparable procedure. If it chooses under the new rule to consider such debt limit legislation, it would do so under its regular legislative process.", "This report first explains the current House debt limit rule, particularly in relation to the former Gephardt rule. Then, it describes the legislative history of the former rule and reviews how the former rule operated before it was repealed at the beginning of the 112 th Congress."], "subsections": []}, {"section_title": "Features of the House Debt Limit Rule", "paragraphs": ["House Rule XXVIII requires that the House clerk, when the House adopts the budget resolution for a fiscal year, automatically engross and transmit to the Senate a joint resolution suspending the public debt limit through the end of that year. In other words, such legislation suspending the debt limit would be passed by the House without a separate vote on the debt limit legislation. Instead of a separate vote, the rule stipulates that the vote on the budget resolution is to be considered as the vote on the debt legislation.", "The new House debt limit rule differs from the former rule in two respects. First, under the new rule, the debt limit legislation is passed and sent to the Senate when the House adopts the budget resolution, not when the House and Senate agree to the budget resolution. Second, the debt legislation would suspend the debt limit, not explicitly set a new debt limit. Under the former rule, the debt limit legislation would provide for a specific new debt limit, indicating the amount by which the debt limit would be increased. In contrast, as a suspension of the debt limit, the new rule would provide for legislation that accommodates the variability of federal collections and past obligations but retain the ability of Congress to revisit the effects of such revenues and existing obligations.", "The current rule, as well as the former rule, does not affect the House Ways and Means Committee's exclusive jurisdiction over debt limit legislation.", "The full text of the current debt limit rule is provided in the Appendix ."], "subsections": []}, {"section_title": "Legislative History of the Gephardt Rule", "paragraphs": ["The Gephardt rule, initially codified as Rule XLIX of the Standing Rules of the House of Representatives, was established by P.L. 96-78 (93 Stat. 589-591), an act to provide for a temporary increase in the public debt limit. The House adopted the legislation ( H.R. 5369 ) by a vote of 219-198 on September 26, 1979.", "During consideration of the measure, Representative Gephardt explained that the purpose of the new House rule was to place the consideration of the public debt limit within the context of the overall budget policies contained in the annual budget resolution. In addition, it was intended to reduce the amount of time spent and the number of votes in the House and in committees on the issue of raising the public debt limit.", "One of the aggregate amounts required to be included in the annual budget resolution is the appropriate level of the public debt. The budget resolution, however, does not become law. Therefore, the enactment of subsequent legislation is necessary in order to change the statutory limit on the public debt. The Gephardt rule enables the House to combine the finalization of the budget resolution and the origination of debt limit legislation into a single step.", "Representative Gephardt stated that the new automatic engrossment process", "puts the consideration of the appropriate level for the debt ceiling where it legitimately and logically belongs. That is in the context of when we vote for the spending that creates the need to change the debt ceiling.", "In its original form, the rule required the engrossment of a joint resolution changing the temporary public debt limit. In 1983, the separate temporary and permanent statutory limits on the public debt were combined into one permanent statutory limit ( P.L. 98-34 ). Subsequently, the House amended the Gephardt rule to reflect this change by agreeing to H.Res. 241 (98 th Congress) by voice vote on June 23, 1983. Under the modified rule, the automatically engrossed joint resolution would contain a change to the permanent statutory limit. In addition to this modification, the rules change", "also provided that where a budget resolution contains more than one public debt limit figure (for the current and the next fiscal year), only one joint resolution be engrossed, containing the debt limit figure for the current fiscal year with a time limitation, and the debt limit figure for the following fiscal year as the permanent limit.", "During consideration of H.Res. 241 , Representative Butler C. Derrick explained the limitation of a single joint resolution by stating the following:", "The Committee on Rules ... believes that it is unnecessary and confusing to have ... a single concurrent resolution on the budget trigger the engrossment and passage of two separate joint resolutions to increase or decrease the public debt [limit].", "At the beginning of the 106 th Congress (1999-2000), the House recodified the rule as House Rule XXIII. Certain language was deleted and modified from the existing rule, but the revisions were intended to continue the automatic engrossment process \"without substantive change.\"", "The House repealed the rule at the beginning of the 107 th Congress (2001-2002). On the opening day of the 108 th Congress (2003-2004), however, the House reinstated this automatic engrossing process as a new rule, Rule XXVII. The reinstated rule contained the same language as Rule XXIII of the 106 th Congress.", "The rule was redesignated (without change) as Rule XXVIII during the 110 th Congress upon the enactment of the Honest Leadership and Open Government Act of 2007 ( S. 1 , P.L. 110-81 , September 14, 2007, see Section 301(a)).", "Finally, as noted above, the House repealed the previous rule at the beginning of the 112 th Congress (2011-2012). More recently, the House restored and revised the rule at the beginning of the 116 th Congress."], "subsections": []}, {"section_title": "Operation of the Gephardt Rule", "paragraphs": [" Table 1 provides information on the joint resolutions changing the public debt limit that were engrossed and deemed passed by the House pursuant to the Gephardt rule during calendar years 1980-2010.", "The rule, however, did not operate in all of these years. In 11 of the 31 years between 1980 and 2010, the rule was either suspended (1988, 1990-1991, 1994-1997, and 1999-2000) or repealed (2001-2002) by the House. In most cases, the House suspended the rule because legislation changing the statutory limit was not necessary. At the time, the existing public debt limit was expected to be sufficient. In three cases, the House passed or was expected to pass separate legislation to increase the statutory limit. As noted above, the rule was repealed at the beginning of the 107 th Congress and therefore did not apply in 2001 and 2002.", "During the remaining 20 years, when the rule was in effect, the House originated 20 joint resolutions under this procedure. The first seven of these 20 joint resolutions were generated under the Gephardt rule in its original form. As mentioned above, the rule was modified in 1983. It generally remained in this form through 2010. The subsequent 13 joint resolutions were generated under this modified language. In four years (calendar years 1998, 2004, 2006, and 2010), while the rule was in effect, the House and Senate did not agree to a conference report on the budget resolution, and therefore the automatic engrossment process under the Gephardt rule was not used.", "As Table 1 shows, although budget resolutions adopted during this period contained debt limit amounts for between three and 11 different fiscal years\u2014as the time frame of each budget resolution dictated\u2014the joint resolutions automatically engrossed under the Gephardt rule contained debt limit amounts for only one or two fiscal years, depending on the requirements of the rule at the time. The 1983 modification, as noted above, provided that the automatically engrossed joint resolution could include multiple debt limit increases\u2014one temporary and another permanent. The first three of the 11 joint resolutions automatically engrossed pursuant to this modified version of the rule contained two different public debt limits, and the other eight contained a single public debt limit.", "The Senate passed 16 of the 20 joint resolutions automatically engrossed pursuant to the Gephardt rule, passing 10 without amendment and six with amendments. The 10 joint resolutions passed without amendment were sent to the President and signed into law. The six joint resolutions amended by the Senate required a vote of the House before being sent to the President. Five of these ultimately became law. Of the remaining four joint resolutions, the Senate began consideration on one but came to no resolution on it, and it took no action on three.", "Between 1980 and 2010, a total of 47 public debt limit changes were signed into law as independent measures or as part of other legislation. The Gephardt rule originated less than a third of these changes. That is, over two-thirds of the 47 public debt limit changes enacted into law during this period originated by procedures other than the House rule, each requiring the House to vote on such legislation. However, the rule effectively allowed the House to avoid a separate, direct vote on 10 (or 21%) of the 47 measures changing the debt limit that were ultimately enacted into law."], "subsections": [{"section_title": "Appendix. Text of Current House Debt Limit Rule", "paragraphs": ["RULE XXVIII", "STATUTORY LIMIT ON THE PUBLIC DEBT", "1. Upon adoption by the House of a concurrent resolution on the budget under section 301 or 304 of the Congressional Budget Act of 1974, the Clerk shall prepare an engrossment of a joint resolution suspending the statutory limit on the public debt in the form prescribed in clause 2. Upon engrossment of the joint resolution, the vote by which the concurrent resolution on the budget was adopted by the House shall also be considered as a vote on passage of the joint resolution in the House, and the joint resolution shall be considered as passed by the House and duly certified and examined. The engrossed copy shall be signed by the Clerk and transmitted to the Senate for further legislative action.", "2. The matter after the resolving clause in a joint resolution described in clause 1 shall be as follows: 'Section 3101(b) of title 31, United States Code, shall not apply for the period beginning on the date of enactment and ending on September 30, .' with the blank being filled with the budget year for the concurrent resolution.", "3. Nothing in this rule shall be construed as limiting or otherwise affecting\u2014", "(a) the power of the House or the Senate to consider and pass bills or joint resolutions, without regard to the procedures under clause 1, that would change the statutory limit on the public debt; or", "(b) the rights of Members, Delegates, the Resident Commissioner, or committees with respect to the introduction, consideration, and reporting of such bills or joint resolutions.", "4. In this rule the term 'statutory limit on the public debt' means the maximum face amount of obligations issued under authority of chapter 31 of title 31, United States Code, and obligations guaranteed as to principal and interest by the United States (except such guaranteed obligations as may be held by the Secretary of the Treasury), as determined under section 3101(b) of such title after the application of section 3101(a) of such title, that may be outstanding at any one time."], "subsections": []}]}]}}
{"id": "R45486", "title": "Child Nutrition Programs: Current Issues", "released_date": "2019-04-24T00:00:00", "summary": ["The term child nutrition programs refers to several U.S. Department of Agriculture Food and Nutrition Service (USDA-FNS) programs that provide food for children in institutional settings. These include the school meals programs\u2014the National School Lunch Program and School Breakfast Program\u2014as well as the Child and Adult Care Food Program, Summer Food Service Program, Special Milk Program, and Fresh Fruit and Vegetable Program.", "The most recent child nutrition reauthorization, the Healthy, Hunger-Free Kids Act of 2010 (HHFKA; P.L. 111-296), made a number of changes to the child nutrition programs. In some cases, these changes spurred debate during the law's implementation, particularly in regard to updated nutrition standards for school meals and snacks. On September 30, 2015, some of the authorities created by the HHFKA expired. Efforts to reauthorize the child nutrition programs in the 114th Congress, while not completed, considered several related issues and prompted further discussion about the programs. There were no substantial reauthorization attempts in the 115th Congress.", "Current issues discussed in this report include the following:", "Nutrition standards for school meals and snacks. The HHFKA required USDA to update the nutrition standards for school meals and other foods sold in schools. USDA issued final rules on these standards in 2012 and 2016, respectively. Some schools had difficulty implementing the nutrition standards, and USDA and Congress have taken actions to change certain parts of the standards related to whole grains, sodium, and milk.", "Offerings in the Fresh Fruit and Vegetable Program (FFVP). There have been debates recently over whether the FFVP should include processed and preserved fruits and vegetables, including canned, dried, and frozen items. Currently, statute permits only fresh offerings.", "\"Buy American\" requirements for school meals. The school meals programs' authorizing laws require schools to source foods domestically, with some exceptions, under Buy American requirements. Efforts both to tighten and loosen these requirements have been made in recent years. The enacted 2018 farm bill (P.L. 115-334) instructed USDA to \"enforce full compliance\" with the Buy American requirements and report to Congress within 180 days of enactment.", "Congregate feeding in summer meals. Under current law, children must consume summer meals on-site. This is known as the \"congregate feeding\" requirement. Starting in 2010, Congress funded demonstration projects, including the Summer Electronic Benefit Transfer (EBT) demonstration, to test alternatives to congregate feeding in summer meals. Congress has increased funding for Summer EBT in recent appropriations cycles and there have been discussions about whether to continue or expand the program.", "Implementation of the Community Eligibility Provision (CEP). The HHFKA created CEP, an option for qualifying schools, groups of schools, and school districts to offer free meals to all students. Because income-based applications for school meals are no longer required in schools adopting CEP, its implementation has created data issues for federal and state programs relying on free and reduced-price lunch eligibility data.", "Unpaid meal costs and \"lunch shaming.\" The issue of students not paying for meals and schools' handling of these situations has received increasing attention. Some schools have adopted what some term as \"lunch shaming\" practices, including throwing away a student's selected hot meal and providing a cold meal alternative when a student does not pay. Congress and USDA have taken actions recently to reduce instances of student nonpayment and stigmatization.", "Paid lunch pricing. One result of new requirements in the HHFKA was price increases for paid (full price) lunches in many schools. Attempts have been made\u2014some successfully\u2014to loosen these \"paid lunch equity\" requirements in recent years."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The term child nutrition programs refers to several U.S. Department of Agriculture Food and Nutrition Service (USDA-FNS) programs that provide food to children in institutional settings. The largest are the National School Lunch Program (NSLP) and School Breakfast Program (SBP), which subsidize free, reduced-price, and full-price meals in participating schools. Also operating in schools, the Fresh Fruit and Vegetable Program provides funding for fruit and vegetable snacks in participating elementary schools, and the Special Milk Program provides support for milk in schools that do not participate in NSLP or SBP. Other child nutrition programs include the Child and Adult Care Food Program, which provides meals and snacks in child care and after-school settings, and the Summer Food Service Program, which provides food during the summer months. ", "The child nutrition programs were last reauthorized by the Healthy, Hunger-Free Kids Act of 2010 (HHFKA, P.L. 111-296 ). On September 30, 2015, some of the authorities created or extended by the HHFKA expired. However, these expirations had a minimal impact on program operations, as the child nutrition programs have continued with funding provided by annual appropriations acts. ", "In the 114 th Congress, lawmakers began but did not complete child nutrition reauthorization, which refers to the process of reauthorizing and potentially making changes to multiple permanent statutes\u2014the Richard B. Russell National School Lunch Act, the Child Nutrition Act, and sometimes Section 32 of the Act of August 24, 1935. Both committees of jurisdiction\u2014the Senate Committee on Agriculture, Nutrition, and Forestry and the House Committee on Education and the Workforce\u2014reported reauthorization legislation ( S. 3136 and H.R. 5003 , respectively). This legislation died at the end of the 114 th Congress, as is the case for any bill that has not yet passed both chambers and been sent to the President at the end of a Congress. There were no significant child nutrition reauthorization efforts in the 115 th Congress; however, 2018 farm bill proposals and the final enacted bill included a few provisions related to child nutrition programs. ", "The implementation of the HHFKA, child nutrition reauthorization efforts in the 114 th Congress, and the child nutrition-related topics raised during 2018 farm bill negotiations have raised issues that may be relevant for Congress in future reauthorization efforts or other policymaking opportunities. These issues often relate to the content and type of foods served in schools: for example, the nutritional quality of foods and whether foods are domestically sourced. Other issues relate to access, including alternatives to on-site consumption in summer meals and implementation of the Community Eligibility Provision, an option to provide free meals to all students in certain schools. Stakeholders in these issues commonly include school food authorities (SFAs; school food service departments that generally operate at the school district level), hunger and nutrition-focused advocacy organizations, and food industry organizations, among others.", "This report provides an overview of these and other current issues in the child nutrition programs. It does not cover every issue, but rather provides a high-level review of some recent issues raised by Congress and/or program stakeholders, drawing examples from legislative proposals in the 114 th and 115 th Congresses . References to CRS reports with more detailed information or analysis on specific issues are provided where applicable, including the following:", "For an overview of the structure and functions of the child nutrition programs, see CRS Report R43783, School Meals Programs and Other USDA Child Nutrition Programs: A Primer . For more information on the child nutrition reauthorization proposals in the 114 th Congress, see CRS Report R44373, Tracking the Next Child Nutrition Reauthorization: An Overview . For a summary of the HHFKA, see CRS Report R41354, Child Nutrition and WIC Reauthorization: P.L. 111-296 ."], "subsections": []}, {"section_title": "Current Issues", "paragraphs": [], "subsections": [{"section_title": "Nutrition Standards for School Meals and Snacks", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["School meals must meet certain requirements to be eligible for federal reimbursement, including nutritional requirements. These nutrition standards were last updated following the enactment of the HHFKA, which required USDA to update the standards for school meals and create new nutrition standards for \"competitive\" foods (e.g., foods sold in vending machines, a la carte lines, and snack bars) within a specified timeframe. Specifically, the law required USDA to issue proposed regulations for competitive foods nutrition standards within one year after enactment and for school meals nutrition standards within 18 months after enactment. The law also provided increased federal subsidies (6 cents per lunch) for schools meeting the new requirements and funding for technical assistance. The nutrition standards in the HHFKA were championed by a variety of organizations and stakeholders, including nutrition and public health advocacy organizations, food and beverage companies, school nutrition officials, retired military leaders, and then-First Lady Michelle Obama.", "The precise nutritional requirements were largely written in the subsequent regulations, not the HHFKA. USDA-FNS published the final rule for school meals in January 2012 and the final rule for competitive foods in July 2016. As required by law, the nutrition standards were based on the Dietary Guidelines for Americans and recommendations from the Institute of Medicine (now the Health and Medicine Division of the National Academies). For school meals, the updated standards increased the amount of fruits, vegetables, and whole grains in school lunches and breakfasts. They also instituted limits on calories, sodium, whole grains, and proteins in meals and restricted milk to low-fat (unflavored) and fat-free (flavored or unflavored) varieties. Other requirements included a provision that senior high school students must select a half-serving of fruits or vegetables with a reimbursable meal. Similarly, the nutrition standards for competitive foods limited calories, sodium, and fat in foods sold outside of meals, among other requirements. The standards applied only to non-meal foods and beverages sold during the school day (defined as midnight until 30 minutes after dismissal) and include some exceptions for fundraisers."], "subsections": []}, {"section_title": "Implementation and Changes", "paragraphs": ["The meal standards began phasing in during school year (SY) 2012-2013, and the competitive foods standards took effect in SY2014-2015. However, sodium limits and certain whole grain requirements for school meals were scheduled to phase in over multiple school years. Some schools experienced challenges implementing the changes, reporting difficulty obtaining whole grain and low-sodium products, issues with student acceptance of foods, reduced participation, increased costs, and increased food waste. These accounts were shared in news stories and by the School Nutrition Association (SNA), a national, nonprofit professional and advocacy organization representing school nutrition professionals. Studies by the U.S. Government Accountability Office and USDA confirmed that many of these issues were present in SY2012-2013 and SY2013-2014, the first two years of implementation. SNA advocated for certain changes to the standards, while other groups called for maintaining the standards, arguing that they were necessary for children's health and that implementation challenges were easing with time. ", "In January 2014, USDA removed weekly limits on grains and protein. Then, in the FY2015, FY2016, and FY2017 appropriations laws, Congress enacted provisions that loosened the milk, whole grain, and/or sodium requirements from SY2015-2016 through SY2017-2018. USDA implemented similar changes for SY2018-2019 in an interim final rule. In December 2018, USDA published a final rule that indefinitely changes these three aspects of the standards starting in SY2019-2020. Specifically, the rule", "allows all SFAs to offer flavored, low-fat (1%) milk as part of school meals and as beverages sold in schools, and requires unflavored milk to be offered alongside flavored milk in school meals; requires SFAs to adhere to a 50% whole grain-rich requirement (the original regulations required 100% whole grain-rich starting in SY2014-2015); states may make exemptions to allow SFAs to offer nonwhole grain-rich products; and maintains Target 1 sodium limits from SY2019-2020 through SY2023-2024, implements Target 2 limits starting in SY2024-2025 and thereafter, and eliminates Target 3 limits (the strictest target).", " Table 2 provides a timeline from the 2012 final rule to the 2018 final rule, showing the ways in which milk, whole grain, and sodium requirements have been modified over time. Apart from these changes, the nutrition standards for school meals remain largely intact. The changes to the milk requirements also affect other beverages sold in schools; otherwise, the nutrition standards for competitive foods have not been changed substantially. "], "subsections": []}, {"section_title": "Other Proposals", "paragraphs": ["Legislative proposals related to the nutrition standards were considered in the 115 th Congress. For example, the House-passed version of 2018 farm bill (one version of H.R. 2 ) would have required USDA to review and revise the nutrition standards for school meals and competitive foods. According to the bill, the revisions would have had to ensure that the standards, particularly those related to milk, \"(1) are based on research based on school-age children; (2) do not add costs in addition to the reimbursements required to carry out the school lunch program \u2026 and (3) maintain healthy meals for students.\" This provision was not included in the enacted bill. ", "Child nutrition reauthorization proposals in the House and Senate during the 114 th Congress also would have altered the nutrition standards. The House committee's proposal ( H.R. 5003 ) would have required USDA to review the school meal standards at least once every three years and revise them as necessary, following certain criteria. In addition, under the proposal, fundraisers by student groups/organizations would no longer have had to meet the competitive food standards and any foods served as part of a federally reimbursable meal would have been allowed to be sold a la carte. The Senate committee's proposal ( S. 3136 ) would have required USDA to revise the whole grain and sodium requirements for school meals within 90 days after enactment. Although not included in the proposal itself, negotiations between the Senate committee, the White House, USDA, and the School Nutrition Association resulted in an agreement that these revisions, if enacted, would have reduced the 100% whole grain-rich requirement to 80% and delayed the Target 2 sodium requirement for two years. "], "subsections": []}]}, {"section_title": "\"Fresh\" in the Fresh Fruit and Vegetable Program (FFVP)", "paragraphs": ["Under current law, fruit and vegetable snacks served in FFVP must be fresh. According to USDA guidance, fresh refers to foods \"in their natural state and without additives.\" In recent years, some have advocated for the inclusion of frozen, dried, canned, and other types of fruits and vegetables in the program, while others have advocated for continuing to maintain only fresh products. Stakeholders on both sides include agricultural producers and processors. ", "The 2014 farm bill (Section 4214 of P.L. 113-79 ) funded a pilot project that incorporated canned, dried, and frozen (CDF) fruits and vegetables in FFVP in a limited number of states. USDA selected schools in four states (Alaska, Delaware, Kansas, and Maine) that reported difficulty obtaining, storing, and/or preparing fresh fruits and vegetables. According to the final (2017) evaluation, 56% of the pilot schools chose to incorporate CDF fruits and vegetables during an average week of the demonstration. Schools most often introduced dried and canned fruits, which resulted in decreased vegetable offerings and increased fruit offerings in the FFVP. However, there was no significant impact on students' vegetable consumption, while fruit consumption declined on FFVP snack days (likely because students consumed a smaller quantity of fruit when it was dried or canned). There was also no significant impact on student participation. Student satisfaction with FFVP decreased slightly during the pilot, parents' responses to the pilot were mixed, and school administrators (who opted into the pilot) generally favored the changes.", "Legislative proposals to change FFVP offerings on a more permanent basis have also been considered. For example, in the 115 th Congress, the House version of H.R. 2 would have allowed CDF and pur\u00e9ed forms of fruits and vegetables in FFVP and removed \"fresh\" from the program name. This provision was not included in the enacted bill. In the 114 th Congress, child nutrition reauthorization legislation in the House ( H.R. 5003 ) included a similar proposal to allow participating schools to serve \"all forms\" of fruits and vegetables as well as tree nuts. The Senate committee's proposal ( S. 3136 ) would have provided temporary hardship exemptions for schools with limited storage and preparation facilities or limited access to fresh fruits and vegetables that would have allowed them to serve CDF fruits and vegetables in FFVP. Such schools would have to transition to 100% fresh products over time. "], "subsections": []}, {"section_title": "\"Buy American\" in School Meals Programs", "paragraphs": ["Schools participating in the National School Lunch Program (NSLP) and/or School Breakfast Program (SBP) must comply with federal requirements related to sourcing foods domestically. These requirements are outlined in the school meals programs' authorizing laws and clarified in USDA guidance.", "Under the Buy American requirements, schools participating in the NSLP and/or SBP in the 48 contiguous states must purchase \"domestic commodities or products \u2026 to the maximum extent practicable.\" Statute defines \"domestic commodities or products\" as those that are both produced and processed substantially in the United States. Accompanying conference report language elaborated that \"processed substantially\" means the product is processed in the United States and contains over 51% domestically grown ingredients, and this definition is also included in USDA guidance (discussed below). USDA regulations essentially restate the statutory requirement. ", "USDA has issued guidance on how SFAs and state agencies should implement the Buy American requirements. The most recent guidance (as of the date of this report) was published in a June 2017 memorandum. According to USDA-FNS guidance, the Buy American requirements apply to any foods purchased with funds from the nonprofit school food service account, whether or not they are federal funds (children's paid lunch fees, for example, also go into the nonprofit school food service account). The guidance encourages SFAs to integrate Buy American into their procurement processes; for example, by monitoring the USDA catalog for appropriate products and placing Buy American language in solicitations, contracts, and other procurement documents. The guidance explains that SFAs are permitted to make exceptions to the Buy American requirements on a limited basis when a product \"is not produced or manufactured in the U.S. in sufficient and reasonably available quantities of a satisfactory quality\" or when \"competitive bids reveal the costs of a U.S. product are significantly higher than the non-domestic product.\" SFAs must interpret when this is the case and document any exceptions they make. SFAs may also request a waiver from the requirements for a product that does not meet these criteria. State agencies must review SFAs' compliance with the Buy American requirements, including any exceptions an SFA has made, and take corrective action when necessary. ", "The enacted 2018 farm bill (Section 4207 of P.L. 115-334 ) included a provision requiring USDA to \"enforce full compliance\" with the Buy American requirements and \"ensure that States and school food authorities fully understand their responsibilities\" within 180 days of enactment. In addition, the bill requires USDA to submit a report to Congress by the 180-day deadline on actions taken and plans to comply with the provision. The provision clarifies the definition of domestic products for the purposes of USDA's enforcement, stating that domestic products are those that are \"processed in the United States and substantially contain \u2026 meats, vegetables, fruits, and other agricultural commodities\" produced in the United States, the District of Columbia, Puerto Rico, or any territory or possession of the United States, or \"fish harvested\" in the Exclusive Economic Zone or by a U.S.-flagged vessel. The provision in the enacted bill amended a related provision in the Senate-passed version of the farm bill. ", "Proponents of stricter requirements have cited economic and food safety reasons for domestic sourcing and expressed particular concern over sourcing from China. Others have argued for maintaining or increasing schools' discretion in food procurement, arguing that high-quality domestic options are not always available or cost-effective."], "subsections": []}, {"section_title": "Alternatives to Congregate Feeding in Summer Meals", "paragraphs": ["Under current law, summer meals are generally provided in \"congregate\" or group settings where children come to eat while supervised. These meals are provided through the Summer Food Service Program (SFSP) and the National School Lunch Program's Summer Seamless Option (SSO). In recent years, policymakers have weighed different proposals and tested alternatives to congregate meals in SFSP and SSO. Some of these alternatives focus on rural areas, which may face particular barriers to onsite consumption of summer meals. According to a May 2018 study by the U.S. Government Accountability Office, states commonly reported that reaching children in rural areas was \"very\" or \"extremely\" challenging in SFSP. "], "subsections": [{"section_title": "Summer EBT Demonstration", "paragraphs": ["The 2010 Agriculture Appropriations Act (Section 749(g) of P.L. 111-80 ) provided $85 million in discretionary funding for \"demonstration projects to develop and test methods of providing access to food for children in urban and rural areas during the summer months.\" One of these is the Summer Electronic Benefit Transfer for Children (SEBTC or Summer EBT) project, which began in summer 2011 and has continued each summer since (as of the date of this report) in a limited number of states and Indian Tribal Organizations. The project provides electronic food benefits to households with children eligible for free or reduced-price school meals. Depending on the site and year, either $30 or $60 per month is provided on an electronic benefits transfer (EBT) card for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) or Supplemental Nutrition Assistance Program (SNAP). Participants in jurisdictions providing benefits through SNAP can redeem benefits for SNAP-eligible foods at any SNAP-authorized retailer, while participants in the WIC EBT jurisdictions are limited to the smaller set of WIC-eligible foods at WIC-authorized retailers.", "An evaluation of Summer EBT was conducted from FY2011 through FY2013. The study, which used a random assignment design, found a significant decline in the prevalence of very low food security among participants (9.5% of control group children experienced very low food security compared to 6.4% in the Summer EBT group). It also showed improvements in children's consumption of fruits, vegetables, and whole grains. Both the WIC and SNAP models showed increased consumption, but increases were greater at sites operating the WIC model. ", "Congress has provided subsequent funding for Summer EBT projects (see Table 3 ). Most recently, the third FY2019 Consolidated Appropriations Act ( P.L. 116-6 ) provided $28 million for the Summer EBT demonstration. Awardees for summer 2017 were Connecticut, Delaware, Michigan, Missouri, Nevada, Oregon, Virginia, and the Chickasaw and Cherokee nations. For summer 2018, USDA also awarded grants to Tennessee and Texas. Many of these jurisdictions participated in Summer EBT in previous summers as well. In October 2018, USDA-FNS announced a new strategy for determining grant recipients in FY2019, stating that the agency will prioritize new states that have not participated before, statewide projects, and projects that can operate in the summers of 2019 through 2021.", "There were proposals in the 114 th and 115 th Congresses to expand Summer EBT. For example, the Senate committee's child nutrition reauthorization proposal in the 114 th Congress ( S. 3136 ) would have allowed a portion of SFSP's mandatory funding to cover Summer EBT and authorized up to $50 million in discretionary funding for the program. In addition, in its FY2017 budget proposal, the Obama Administration recommended expansion of Summer EBT nationwide with a phase-in over 10 years. Freestanding bills in the 114 th and 115 th Congresses had similar objectives."], "subsections": []}, {"section_title": "Other Summer Demonstrations", "paragraphs": ["Funding from the 2010 Agriculture Appropriations Act (Section 749(g) of P.L. 111-80 ) was also used for other demonstration projects. One of these, the Enhanced Summer Food Service Program (eSFSP), took place during the summers of 2010 through 2012 in eight states. It included four initiatives: (1) incentives for SFSP sites to lengthen operations to 40 or more days, (2) funding to add recreational or educational activities at meal sites, (3) meal delivery for children in rural areas, and (4) food backpacks that children could take home on weekends and holidays.", "Evaluations of eSFSP were published from 2011 to 2014. Summer meal participation rates rose during the demonstration periods for all four initiatives. In addition, children in the meal delivery and backpack demonstrations had consistent rates of food insecurity from summer to fall (this was not measured for the other initiatives). However, the results from these evaluations should be interpreted with caution due to a small sample size, the lack of a comparison group, and potential confounding factors.", "Another demonstration project, also operating under authority provided by the 2010 Agriculture Appropriations Act, provided exemptions from the congregate feeding requirement to SFSP and SSO outdoor meal sites experiencing excessive heat each summer since 2015 (as of the date of this report). Exempted sites must continue to serve children in congregate settings on days when heat is not excessive, and provide meals in another form (e.g., a take-home form) on days of excessive heat. USDA also offers exemptions on a case-by-case basis for other extreme weather conditions. This demonstration has not been evaluated."], "subsections": []}, {"section_title": "Other Proposals", "paragraphs": ["There were other proposals and hearings related to congregate feeding in SFSP in recent years. For example, in the 114 th Congress, committee-reported child nutrition reauthorization proposals in the Senate and the House ( S. 3136 and H.R. 5003 , respectively) would have enabled some rural meal sites to provide SFSP meals for consumption offsite. Specifically, both proposals would have allowed offsite consumption for children (1) in rural areas ( H.R. 5003 to a more limited extent than S. 3136 ) and (2) in nonrural areas in which more than 80% of students are certified as eligible for free or reduced-price meals. The bills would have also permitted congregate feeding sites to provide meals to be consumed offsite episodically under certain conditions such as extreme weather or public safety concerns. "], "subsections": []}]}, {"section_title": "Community Eligibility Provision", "paragraphs": ["The HHFKA created the Community Eligibility Provision (CEP), an option to provide free meals (lunches and breakfasts) to all students in schools with high proportions of students who automatically qualify for free or reduced-price lunches. CEP became available to schools nationwide starting in SY2014-2015, and participation has increased since then. As of SY2016-2017, more than 20,700 schools participated in CEP, according to data from the Food Research and Action Center (FRAC), a nonprofit advocacy organization. This is roughly 22% of NSLP schools.", "Several groups have expressed support for CEP during its implementation, arguing that the provision improves access to meals, reduces stigma associated with receiving free or reduced-price meals, and reduces schools' administrative costs. Others have sought to change the option. For example, in the 114 th Congress, the House's committee-reported child nutrition reauthorization bill ( H.R. 5003 ) would have restricted schools' eligibility for CEP, which the committee majority argued was \"to better target resources to those students in need, while also ensuring all students who are eligible for assistance continue to receive assistance.\" ", "One secondary effect of CEP is that it has created data issues for other nonnutrition federal and state programs. Many programs, most notably the federal Title I-A program (the primary source of federal funding for elementary and secondary schools), use free and reduced-price lunch data to determine eligibility and/or funding allocations. These data come from school meal applications, which are no longer collected under CEP's automatic eligibility determination process. For more information on this issue, see CRS Report R44568, Overview of ESEA Title I-A and the School Meals' Community Eligibility Provision . "], "subsections": []}, {"section_title": "Unpaid Meal Costs and \"Lunch Shaming\"", "paragraphs": ["Students may qualify for free meals, or they may have to pay for reduced-price or full-price meals. In recent years, the issue of students owing and not paying their meal costs, and schools' responses to such situations, has received increased attention. In many cases, schools serve students a regular meal, charging the unpaid meal cost and creating a debt that they may try to collect later from the family. In other cases, schools respond with what some have called \"lunch shaming\" practices\u2014most commonly, taking or throwing away a student's selected hot foods and providing an alternative cold meal or, less commonly, barring children from participation in school events until debt is repaid or having children wear a visual indicator of meal debt (e.g., a stamp or sticker). Lunch shaming instances have largely been reported in news articles from different states, and there are limited national data available on the prevalence of such practices (available data are discussed in the text box below).", "Many school districts report that unpaid meal costs create a financial burden on their meal programs (see text box below for more detail). In addition to federal funds, student payments for full and reduced-price meals are a primary source of revenue for school food programs. Schools have an interest in collecting this revenue to help fund operations. Also, according to federal regulations, if schools are unable to recover unpaid meal funds, the money becomes \"bad debt\" and the school or school district must use other nonfederal funding sources to cover the costs.", "Starting in 2010, Congress and USDA have taken actions to address the issue of unpaid meal costs. Section 143 of the HHFKA required USDA to examine states' and school districts' policies and practices regarding unpaid meal charges. As part of the review, the law required USDA to \"prepare a report on the feasibility of establishing national standards for meal charges and the provision of alternate meals\" and, if applicable, make recommendations related to the implementation of the standards. The law also permitted USDA to take follow-up actions based on the findings from the report. ", "USDA's subsequent Report to Congress in June 2016 ultimately did not recommend national standards, but instead recommended \"clarifying and updating policy guidance on specific national policies impacting unpaid meal charges and facilitating the development and distribution of best practices to support decision making by States and localities.\" USDA-FNS followed up with a memorandum requiring SFAs to institute and communicate, by July 1, 2017, a written meal charge policy, which was to include instructions on how to address situations in which a child does not pay for a meal. USDA-FNS also provided clarification through webinars, other memoranda, and a best practice guide.", "In the Report to Congress, USDA stated that its recommendation was based on findings from a study published by USDA-FNS in March 2014 and a Request for Information (RFI) on \"Unpaid Meal Charges\" published by USDA-FNS in October 2014. The findings from both the study and the RFI\u2014which garnered 462 comments\u2014showed that meal charge policies were largely determined at the school and school district levels rather than the state level. The responses to the RFI also indicated that such policies ranged in formality, with varying degrees of review (e.g., some required school board approval while others did not) and enforcement. In the RFI comments, school and district officials generally expressed a preference for local control of meal charge policies, while national advocacy groups generally favored national standards.", "The topics of lunch shaming and unpaid meal costs also surfaced in the 115 th Congress. For example, a provision in the FY2018 appropriations law stated that funds appropriated in the law could not be used in ways that result in discrimination against children eligible for free or reduced-price meals, including the practices of segregating children and overtly identifying children by special tokens or tickets (note that this does not pertain to children paying for full-price meals). Legislative proposals in the 115 th Congress included the Anti-Lunch Shaming Act of 2017 ( H.R. 2401 / S. 1064 ), which sought to establish national standards for how schools treat children unable to pay for a meal. ", "Unpaid meal costs and lunch shaming have also been active topics at the state level. In recent years, a number of states have enacted legislation aimed at addressing these issues. For example, in 2018, Illinois passed legislation that requires schools to serve a regular (reimbursable) meal to students who do not pay and allows school districts to request an offset from the state for debts exceeding $500. "], "subsections": []}, {"section_title": "Paid Lunch and Other School Food Pricing", "paragraphs": ["The HHFKA created new requirements related to schools' pricing of paid lunches (sometimes referred to as \"paid lunch equity\" requirements). Specifically, the law required all NSLP-participating SFAs to review their average price of paid lunches and, if necessary, gradually increase prices based on a formula. The law also gave SFAs the option to meet the requirements with specified nonfederal funding sources instead of raising prices. ", "According to the Senate committee report on the HHFKA, the requirements were intended \"to ensure that children receiving free and reduced price lunches receive the full value of federal funds.\" Prior to the paid lunch equity requirements, a USDA study found that federal subsidies for free and reduced-price lunches were cross-subsidizing other aspects of the meals programs, likely including paid lunches. This can occur because federal reimbursements for free, reduced-price, and paid lunches are all mixed into the same SFA-run \"nonprofit school food service account\" (NSFSA). Some observers argue, however, that raising prices may reduce participation in paid lunches.", "Under the paid lunch equity formula, the price per paid lunch must eventually match or exceed the difference between the federal reimbursements for free and paid lunches. If this is not the case, schools must increase prices over time until they make up the difference. For example, the federal reimbursement was $3.37 for free lunches and $0.37 for paid lunches SY2018-2019 for some schools. Under the requirements, if schools were not charging at least $3.00 per paid lunch, they would be required to increase the price of a paid lunch gradually, based on a formula, until they closed the gap (see Figure 1 ). Schools cannot be required to raise the price by more than 10 cents annually, but they may choose to do so.", "The HHFKA also included related requirements for revenue from \"nonprogram\" (i.e., competitive) foods. The law required that any revenue from nonprogram foods accrue to the SFA-run NSFSA. In practice, this prevents revenue from competitive foods from being used for other school purposes outside of food service. The law also required that, broadly speaking, revenue from nonprogram foods equal or exceed the costs of obtaining nonprogram foods (see the regulations for a specific formula). ", "In June 2011, USDA-FNS published an interim final rule implementing the requirements starting in SY2011-2012, offering some flexibility for that first year. USDA subsequently provided certain exemptions through agency guidance for SY2013-2014 through SY2017-2018 for SFAs \"in strong financial standing,\" as determined by state agencies based on different criteria. For SY2018-2019, the enacted FY2018 appropriation (Section 775 of P.L. 115-141 ) expanded the exemptions, requiring only SFAs with a negative balance in the NSFSA as of January 31, 2018, potentially to have to raise prices for paid meals.", "Other legislative proposals related to the paid lunch equity requirements were considered in recent Congresses. For example, the House committee's child nutrition reauthorization proposal in the 114 th Congress would have eliminated the requirements. The Senate committee's proposal would have replaced the requirements with a broader \"non-federal revenue target,\" which could have come from household payments for full-price lunches or other state and local contributions."], "subsections": [{"section_title": "Appendix. Acronyms Used in This Report", "paragraphs": ["CACFP: Child and Adult Care Food Program", "CDF: Canned, dried, or frozen", "CEP: Community Eligibility Provision", "eSFSP: Enhanced Summer Food Service Program", "FFVP: Fresh Fruit and Vegetable Program", "HHFKA: Healthy, Hunger-Free Kids Act", "NSFSA: Nonprofit school food service account", "NSLP: National School Lunch Program ", "SBP: School Breakfast Program ", "SFA: School food authority", "SFSP : Summer Food Service Program", "SMP: Special Milk Program ", "SSO: Summer Seamless Option ", "Summer EBT or SEBTC : Summer Electronic Benefit Transfer for Children", "SY: school year", "USDA-FNS: U.S. Department of Agriculture Food and Nutrition Service"], "subsections": []}]}]}]}}
{"id": "R40213", "title": "Foreign Aid: An Introduction to U.S. Programs and Policy", "released_date": "2019-04-16T00:00:00", "summary": ["Foreign assistance is the largest component of the international affairs budget and is viewed by many as an essential instrument of U.S. foreign policy. On the basis of national security, commercial, and humanitarian rationales, U.S. assistance flows through many federal agencies and supports myriad objectives. These include promoting economic growth, reducing poverty, improving governance, expanding access to health care and education, promoting stability in conflict regions, countering terrorism, promoting human rights, strengthening allies, and curbing illicit drug production and trafficking. Since the terrorist attacks of September 11, 2001, foreign aid has increasingly been associated with national security policy. At the same time, many Americans and some Members of Congress view foreign aid as an expense that the United States cannot afford given current budget deficits.", "In FY2017, U.S. foreign assistance, defined broadly, totaled an estimated $49.87 billion, or 1.2% of total federal budget authority. About 44% of this assistance was for bilateral economic development programs, including political/strategic economic assistance; 35% for military aid and nonmilitary security assistance; 18% for humanitarian activities; and 4% to support the work of multilateral institutions. Assistance can take the form of cash transfers, equipment and commodities, infrastructure, or technical assistance, and, in recent decades, is provided almost exclusively on a grant rather than loan basis. Most U.S. aid is implemented by nongovernmental organizations rather than foreign governments. The United States is the largest foreign aid donor in the world, accounting for about 24% of total official development assistance from major donor governments in 2017 (the latest year for which these data are available).", "Key foreign assistance trends in the past decade include growth in development aid, particularly global health programs; increased security assistance directed toward U.S. allies in the anti-terrorism effort; and high levels of humanitarian assistance to address a range of crises. Adjusted for inflation, annual foreign assistance funding over the past decade was the highest it has been since the Marshall Plan in the years immediately following World War II. In FY2017, Afghanistan, Iraq, Israel, Jordan, and Egypt received the largest amounts of U.S. aid, reflecting long-standing aid commitments to Israel and Egypt, the strategic significance of Afghanistan and Iraq, and the strategic and humanitarian importance of Jordan as the crisis in neighboring Syria continues. The Near East region received 27% of aid allocated by country or region in FY2017, followed by Africa, at 25%, and South and Central Asia, at 15%. This was a significant shift from a decade prior, when Africa received 19% of aid and the Near East 34%, reflecting significant increases in HIV/AIDS-related programs concentrated in Africa between FY2007 and FY2017 and the drawdown of U.S. military forces in Iraq and Afghanistan. Military assistance to Iraq began to decline starting in FY2011, but growing concern about the Islamic State in Iraq and Syria (ISIS) has reversed this trend.", "This report provides an overview of the U.S. foreign assistance program by answering frequently asked questions on the subject. It is intended to provide a broad view of foreign assistance over time, and will be updated periodically. For more current information on foreign aid funding levels, see CRS Report R45168, Department of State, Foreign Operations and Related Programs: FY2019 Budget and Appropriations, by Susan B. Epstein, Marian L. Lawson, and Cory R. Gill."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Foreign Aid: An Introduction to U.S. Programs and Policy", "paragraphs": ["U.S. foreign aid is the largest component of the international affairs budget, for decades viewed by many as an essential instrument of U.S. foreign policy. Each year, the foreign aid budget is the subject of congressional debate over the size, composition, and purpose of the program. The focus of U.S. foreign aid policy has been transformed since the terrorist attacks of September 11, 2001. Global development, a major objective of foreign aid, has been cited as a third pillar of U.S. national security, along with defense and diplomacy, in the national security strategies of the George W. Bush and Barack Obama Administrations. Although the Trump Administration's National Security Strategy does not explicitly address the status of development vis-\u00e0-vis diplomacy and defense, it does note the historic importance of aid in achieving foreign policy goals and supporting U.S. national interests.", "This report addresses a number of the more frequently asked questions regarding the U.S. foreign aid program; its objectives, costs, and organization; the role of Congress; and how it compares to those of other aid donors. It attempts not only to present a current snapshot of American foreign assistance, but also to illustrate the extent to which this instrument of U.S. foreign policy has evolved over time. ", "Data presented in the report are the most current, consistent, and reliable figures available, generally updated through FY2017. Dollar amounts come from a variety of sources, including the U.S. Agency for International Development (USAID) Foreign Aid Explorer database (Explorer) and annual State, Foreign Operations, and Related Programs (SFOPS) appropriations acts. As new data are obtained or additional issues and questions arise, the report will be revised.", "Foreign aid abbreviations used in this report are listed in Appendix B ."], "subsections": [{"section_title": "How Is \"U.S. Foreign Aid\" Defined and Counted?", "paragraphs": ["In its broadest sense, U.S. foreign aid is defined under the Foreign Assistance Act of 1961 (FAA), the primary legislative basis of foreign aid programs, as ", "any tangible or intangible item provided by the United States Government [including \"by means of gift, loan, sale, credit, or guaranty\"] to a foreign country or international organization under this or any other Act, including but not limited to any training, service, or technical advice, any item of real, personal, or mixed property, any agricultural commodity, United States dollars, and any currencies of any foreign country which are owned by the United States Government.... (\u00a7634(b))", "For many decades, nearly all assistance annually requested by the executive branch and debated and authorized by Congress was ultimately encompassed in the foreign operations appropriations and the international food aid title of the agriculture appropriations. In the U.S. federal budget, these traditional foreign aid accounts have been subsumed under the 150 (international affairs) budget function. ", "By the 1990s, however, it became increasingly apparent that the scope of U.S. foreign aid was not fully accounted for by the total of the foreign operations and international food aid appropriations. Many U.S. departments and agencies had adopted their own assistance programs, funded out of their own budgets and commonly in the form of professional exchanges with counterpart agencies abroad\u2014the Environmental Protection Agency, for example, providing water quality expertise to other governments. These aid efforts, conducted outside the purview of the traditional foreign aid authorizing and appropriations committees, grew more substantial and varied in the mid-1990s. The Department of Defense (DOD) Nunn-Lugar effort provided billions in aid to secure and eliminate nuclear and other weapons, as did Department of Energy activities to control and protect nuclear materials\u2014both aimed largely at the former Soviet Union. Growing participation by DOD in health and humanitarian efforts and expansion of health programs in developing countries by the National Institutes of Health and Centers for Disease Control and Prevention, especially in response to the HIV/AIDS epidemic, followed. ", "During the past 15 years, DOD-funded and implemented aid programs in Iraq and Afghanistan to train and equip foreign forces and win hearts and minds through development efforts were often considerably larger than the traditional military and development assistance programs provided under the foreign operations appropriations. The recent decline in DOD activities in these countries has sharply decreased nontraditional aid funding. In FY2011, nontraditional sources of assistance, at $17.3 billion, represented 35% of total aid obligations. By FY2017, nontraditional aid, at $9.7 billion, represented 19% of total aid, still a significant proportion.", "While the executive branch has continued to request and Congress to debate most foreign aid within the parameters of the foreign operations legislation, both entities have sought to ascertain a fuller picture of assistance programs through improved data collection and reporting. Significant discrepancies remain between data available for traditional versus nontraditional types of aid and, therefore, the level of analysis applied to each. (See text box , \"A Note on Numbers and Sources,\" below.) Nevertheless, to the extent possible, this report tries to capture the broadest definition of aid throughout. "], "subsections": []}]}, {"section_title": "Foreign Aid Purposes and Priorities", "paragraphs": [], "subsections": [{"section_title": "What Are the Rationales and Objectives of U.S. Foreign Assistance?", "paragraphs": ["Foreign assistance is predicated on several rationales and supports a great many objectives. The importance and emphasis of various rationales and objectives have changed over time."], "subsections": [{"section_title": "Rationales for Foreign Aid", "paragraphs": ["Throughout the past 70 years, there have been three key rationales for foreign assistance", "National Security has been the predominant theme of U.S. assistance programs. From rebuilding Europe after World War II under the Marshall Plan (1948-1951) and through the Cold War, U.S. aid programs were viewed by policymakers as a way to prevent the incursion of communist influence and secure U.S. base rights or other support in the anti-Soviet struggle. After the Cold War ended, the focus of foreign aid shifted from global anti-communism to disparate regional issues, such as Middle East peace initiatives, the transition to democracy of eastern Europe and republics of the former Soviet Union, and international illicit drug production and trafficking in the Andes. Without an overarching security rationale, foreign aid budgets decreased in the 1990s. However, since the September 11, 2001, terrorist attacks in the United States, policymakers frequently have cast foreign assistance as a tool in U.S. counterterrorism strategy, increasing aid to partner states in counterterrorism efforts and funding the substantial reconstruction programs in Afghanistan and Iraq. As noted, global development has been featured as a key element in U.S. national security strategy in both Bush and Obama Administration policy statements. Commercial Interests. Foreign assistance has long been defended as a way to either promote U.S. exports by creating new customers for U.S. products or by improving the global economic environment in which U.S. companies compete. Humanitarian Concerns. Humanitarian concerns drive both short-term assistance in response to crisis and disaster as well as long-term development assistance aimed at reducing poverty, hunger, and other forms of human suffering brought on by more systemic problems. Providing assistance for humanitarian reasons has generally been the aid rationale most broadly supported by the American public and policymakers alike."], "subsections": []}, {"section_title": "Objectives of Foreign Aid", "paragraphs": ["The objectives of aid generally fit within these rationales. Aid objectives include promoting economic growth and reducing poverty, improving governance, addressing population growth, expanding access to basic education and health care, protecting the environment, promoting stability in conflictive regions, protecting human rights, promoting trade, curbing weapons proliferation, strengthening allies, and addressing drug production and trafficking. The expectation has been that, by meeting these and other aid objectives, the United States will achieve its national security goals as well as ensure a positive global economic environment for American products, and demonstrate benevolent and respectable global leadership. ", "Different types of foreign aid typically support different objectives. But there is also considerable overlap among categories of aid. Multilateral aid serves many of the same objectives as bilateral development assistance, although through different channels. Military assistance, economic security aid\u2014including rule of law and police training\u2014and development assistance programs may support the same U.S. political objectives in the Middle East, Afghanistan, and Pakistan. Military assistance and alternative development programs are integrated elements of American counternarcotics efforts in Latin America and elsewhere.", "Depending on how they are designed, individual assistance projects can also serve multiple purposes. A health project ostensibly directed at alleviating the effects of HIV/AIDS by feeding orphan children may also stimulate grassroots democracy and civil society through support of indigenous NGOs while additionally meeting U.S. humanitarian objectives. Microcredit programs that support small business development may help develop local economies while at the same time enabling client entrepreneurs to provide food and education to their children. Water and sanitation improvements both mitigate health threats and stimulate economic growth by saving time previously devoted to water collection, raising school attendance for girls, and facilitating tourism, among other effects.", "In 2006, in an effort to rationalize the assistance program more clearly, the State Department developed a framework that organizes U.S. foreign aid around five strategic objectives, each of which includes a number of program elements, also known as sectors. The five objectives are Peace and Security; Investing in People; Governing Justly and Democratically; Economic Growth; and Humanitarian Assistance. Generally, these objectives and their sectors do not correspond to any one particular budget account in appropriations bills. Annually, the Department of State and USAID develop their foreign operations budget request within this framework, allowing for an objective and program-oriented viewpoint for those who seek it. An effort by the State Department to obtain reporting from all departments and agencies of the U.S. government on aid levels categorized by objective and sector is ongoing. USAID's Explorer website (explorer.usaid.gov) currently provides a more complete picture from all parts of the U.S. government (see Table 1 )."], "subsections": []}]}, {"section_title": "What Are the Major Foreign Aid Funding Categories and Accounts?", "paragraphs": ["The 2006 framework introduced by the Department of State organizes assistance by foreign policy strategic objective and sector. But there are many other ways to categorize foreign aid, one of which is to sort out and classify foreign aid accounts in the U.S. budget according to the types of activities they are expected to support, using broad categories such as military, bilateral development, multilateral development, humanitarian assistance, political/strategic, and nonmilitary security activities (see Figure 1 ). This methodology reflects the organization of aid accounts within the SFOPS appropriations but can easily be applied to the international food aid title of the Agriculture appropriations as well as to the DOD and other government agency assistance programs with funding outside traditional foreign aid budget accounts. In FY2017, these many aid accounts provided $49.9 billion in obligated assistance. "], "subsections": [{"section_title": "Bilateral Development Assistance", "paragraphs": ["For FY2017, U.S. government departments and agencies obligated about $16.2 billion in bilateral development assistance, or 33% of total foreign aid, primarily through the Development Assistance (DA) and Global Health (Global Health-USAID and Global Health-State) accounts and the administrative accounts that allow USAID to operate (Operating Expenses, Capital Investment Fund, and Office of the Inspector General). Other bilateral development assistance accounts support the development efforts of distinct institutions, such as the Peace Corps, Inter-American Foundation (IAF), U.S.-African Development Foundation, Trade and Development Agency, Millennium Challenge Corporation (MCC), and National Endowment for Democracy (NED). ", "Development assistance programs aim to foster sustainable broad-based economic progress and social stability in developing countries. This aid is managed largely by USAID and is used for long-term projects in a wide range of areas. Many programs share the objective in the State Department framework of \"promoting economic growth and prosperity.\" Agriculture programs focus on reducing poverty and hunger, trade-promotion opportunities for farmers, and sound environmental practices for sustainable agriculture. Private sector development programs include support for business associations and microfinance services. Programs for managing natural resources and protecting the global environment focus on conserving biological diversity; improving the management of land, water, and forests; encouraging clean and efficient energy production and use; and reducing the threat of global climate change. Programs supporting the objective of \"governing justly and democratically\" include support for promoting rule of law and human rights, good governance, political competition, and civil society. Programs with the objective of \"investing in people\" include support for basic, secondary, and higher education; improving government ability to provide social services; water and sanitation; and health care. ", "By far the largest portion of bilateral development assistance is devoted to global health. These programs include treatment of HIV/AIDS and other infectious diseases, maternal and child health, family planning and reproductive health programs, and strengthening the government health systems that provide care. Most funding for HIV/AIDS, malaria, and tuberculosis is directed through the State Department's Office of the Global AIDS Coordinator to other agencies, including USAID and the Centers for Disease Control and Prevention. The latter agency and the National Institutes for Health also conduct programs funded by Labor-Health and Human Services (HHS) appropriations. ", "In addition to providing emergency food aid in crisis situations, a portion (about 25% in FY2017) of the Food for Peace (FFP) Title II international food aid program (also referred to as P.L. 480, named after the 1954 law that authorized it)\u2014funded under the Agriculture appropriations\u2014provides nonemergency food commodities to private voluntary organizations (PVOs) or multilateral organizations, such as the World Food Program, for development-oriented purposes. FFP funds are also used to support the \"farmer-to-farmer\" program, which sends hundreds of U.S. volunteers as technical advisors to train farm and food-related groups throughout the world. In addition, the McGovern-Dole International Food for Education and Child Nutrition Program, a program begun in 2002, provides commodities, technical assistance, and financing for school feeding and child nutrition programs."], "subsections": []}, {"section_title": "Multilateral Development Assistance", "paragraphs": ["A share of U.S. foreign assistance\u20144% in FY2017 ($2.1 billion)\u2014is combined with contributions from other donor nations to finance multilateral development projects. Multilateral aid is funded largely through the International Organizations and Programs (IO&P) account and individual accounts for each of the Multilateral Development Banks (MDBs) and global environmental funds. For FY2017, the U.S. government obligated $2.1 billion for development activities managed by international organizations and financial institutions, including contributions to the United Nations Children's Fund (UNICEF); the United Nations Development Program (UNDP); and MDBs, such as the World Bank. ", "The U.S. share of donor contributions to each of the MDB concessional (subsidized) and nonconcessional (market rate) loan windows varies widely. For the largest MDB, the World Bank, the United States has contributed about 20.5% to the nonconcessional lending window (the International Development Associations [IDA]) and about 17.3% to the nonconcessional lending window (the International Bank for Reconstruction and Development [IBRD]). In determining the U.S. share of donor contributions to the various multilateral institutions, the U.S. faces the challenge of finding the right balance between the benefits of burden sharing and the constraints of sharing control when determining multilateral priorities. "], "subsections": []}, {"section_title": "Humanitarian Assistance", "paragraphs": ["For FY2017, obligations for humanitarian assistance programs amounted to $8.9 billion, 18% of total assistance. Unlike development assistance programs, which are often viewed as long-term efforts that may have the effect of preventing future crises from emerging, humanitarian assistance programs are devoted largely to the immediate alleviation of human suffering in emergencies, both natural and man-made, as well as problems resulting from conflict associated with failed or failing states. The largest portion of humanitarian assistance is managed through the International Disaster Assistance (IDA) account by USAID, which provides relief and rehabilitation efforts to victims of man-made and natural disasters, such as the economic and social dislocations caused by the 2014/2015 Ebola epidemic, and the ongoing crises in Syria, South Sudan, Yemen, and Venezuela. A portion of IDA is used for food assistance through the Emergency Food Security Program. ", "Additional humanitarian assistance goes to programs administered by the State Department and funded under the Migration and Refugee Assistance (MRA) and the Emergency Refugee and Migration Assistance (ERMA) accounts, aimed at addressing the needs of refugees and internally displaced persons. These accounts support a number of refugee relief organizations, including the U.N. High Commission for Refugees and the International Committee of the Red Cross. The Department of Defense provides disaster relief under the Overseas Humanitarian, Disaster, and Civic Assistance (OHDACA) account of the DOD appropriations. (For further information on humanitarian programs, see CRS In Focus IF10568, Overview of the Global Humanitarian and Displacement Crisis , by Rhoda Margesson.) ", "The bulk of FFP Title II Agriculture appropriations\u2014$1.3 billion in obligations, about 75% of total Food for Peace Act in FY2017\u2014are used by USAID, mostly to purchase U.S. agricultural commodities, for emergency needs, supplementing both refugee and disaster programs. (For more information on food aid programs, see CRS Report R45422, U.S. International Food Assistance: An Overview , by Alyssa R. Casey.)"], "subsections": []}, {"section_title": "Assistance Serving Both Development and Special Political/Strategic Purposes", "paragraphs": ["A few accounts promote special U.S. political and strategic interests. Programs funded through the Economic Support Fund (ESF) account generally aim to promote political and economic stability, often through activities indistinguishable from those provided under regular development programs. However, ESF is also used for direct budget support to foreign governments and to support sovereign loan guarantees. For FY2017, USAID and the State Department obligated $4.8 billion, nearly 10% of total assistance, through this account.", "For many years, following the 1979 Camp David accords, most ESF funds went to support the Middle East Peace Process\u2014in FY1997, for example, 87% of ESF went to Israel, Egypt, the West Bank and Jordan. Those proportions have declined significantly in recent decades. In FY2007, 22% of ESF funding went to these countries and, in FY2017, 25%. Since the September 2001 terrorist attacks, ESF has largely supported countries of importance in the U.S. global counterterrorism strategy. In FY2007, for example, activities is Afghanistan and Pakistan received 17% of ESF funding (25% in FY2017). ", "Over the years, other accounts have been established to meet specific political or security interests and then were dissolved once the need was met. One example is the Assistance to Eastern Europe and Central Asia (AEECA) account, established in FY2009 to combine two aid programs that met particular strategic political interests arising from the demise of the Soviet empire. The SEED (Support for East European Democracy Act of 1989) and the FREEDOM Support Act (Freedom for Russia and Emerging Eurasian Democracies and Open Markets Support Act of 1992) programs were designed to help Central Europe and the newly independent states of the former Soviet Union (FSA) achieve democratic systems and free market economies. With funding decreasing as countries in the region graduated from U.S. assistance, Congress discontinued use of the AEECA account in the FY2013 appropriations. Increasing requests and appropriations for countries in the former Soviet Union threatened by Russia, however, led to its re-emergence in the FY2017 and succeeding SFOPS appropriations.", "In the recent past, several DOD-funded nontraditional aid programs directed at Afghanistan also supported development efforts. The Afghanistan Infrastructure Fund and the Business Task Force wound down as the U.S. military presence in that country declined; the Commander's Emergency Response Program (CERP) still exists. The latter two programs had earlier iterations as well in Iraq. "], "subsections": []}, {"section_title": "Nonmilitary Security Assistance", "paragraphs": ["Several U.S. government agencies support programs to address global concerns that are considered threats to U.S. security and well-being, such as terrorism, illicit narcotics, crime, and weapons proliferation. In the past two decades, policymakers have given greater weight to these programs. In FY2017, they amounted to $2.9 billion, 6% of total assistance ", "Since the mid-1990s, three U.S. agencies\u2014State, DOD, and Energy\u2014have provided funding, technical assistance, and equipment to counter the proliferation of chemical, biological, radiological, and nuclear weapons. Originally aimed at the former Soviet Union under the rubric cooperative threat reduction (CTR), these programs seek to ensure that these weapons are secured and their spread to rogue nations or terrorist groups prevented. In addition to nonproliferation efforts, the Nonproliferation, Anti-Terrorism, Demining and Related Programs (NADR) account, managed by the State Department, encompasses civilian anti-terrorism efforts such as detecting and dismantling terrorist financial networks, establishing watch-list systems at border controls, and building developing country anti-terrorism capacities. NADR also funds humanitarian demining programs.", "The State Department is the main implementer of counternarcotics programs. The State-managed International Narcotics Control and Law Enforcement (INCLE) account supports counternarcotics activities, most notably in Afghanistan, Pakistan, Peru, and Colombia. It also helps develop the judicial systems\u2014assisting judges, lawyers, and legal institutions\u2014of many developing countries, especially in Afghanistan. DOD and USAID also support counternarcotics activities, the former largely by providing training and equipment, the latter by offering alternative crop and employment programs."], "subsections": []}, {"section_title": "Military Assistance", "paragraphs": ["The United States provides military assistance to U.S. friends and allies to help them acquire U.S. military equipment and training. At $14.5 billion, military assistance accounted for about 29% of total U.S. foreign aid in FY2017. The Department of State administers three programs, with corresponding appropriations accounts that are then implemented by DOD. Foreign Military Financing (FMF) is a grant program that enables governments to receive equipment and associated training from the U.S. government or to access equipment directly through U.S. commercial channels. Most FMF grants support the security needs of Israel, Egypt, Jordan, Pakistan, and Iraq. The International Military Education and Training program (IMET) offers military training on a grant basis to foreign military officers and personnel. Peacekeeping funds (PKO) are used to support voluntary non-U.N. peacekeeping operations as well as training for an African crisis response force. Since 2002, DOD appropriations have supported FMF-like programs, training and equipping security forces in Afghanistan and Iraq. These programs and the accounts that fund them are called the Afghanistan Security Forces Fund (ASFF) and, through FY2012, the Iraq Security Forces Fund (ISFF). Beginning in FY2015, similar support was provided Iraq under the Iraq Train and Equip Fund. The DOD-funded programs in Afghanistan and Iraq accounted for more than half of total military assistance in FY2017."], "subsections": []}]}]}, {"section_title": "Delivery of Foreign Assistance", "paragraphs": ["How and in what form assistance reaches an aid recipient can vary widely, depending on the type of aid program, the objective of the assistance, and the agency responsible for providing the aid."], "subsections": [{"section_title": "What Executive Branch Agencies Implement Foreign Aid Programs?", "paragraphs": ["Federal agencies may implement foreign assistance programs using funds appropriated directly to them or funds transferred to them from another agency. For example, significant funding appropriated through State Department and Department of Agriculture accounts is used for programs implemented by USAID (see Figure 2 ). The funding data in this section reflect the agency that implemented the aid, not necessarily the agency to which funds were originally appropriated. "], "subsections": [{"section_title": "U.S. Agency for International Development", "paragraphs": ["For 50 years, USAID has implemented the bulk of the U.S. bilateral economic development and humanitarian assistance. It directly implements the Development Assistance, International Disaster Assistance, and Transition Initiatives accounts, as well as a USAID-designated portion of the Global Health account. Jointly with the State Department, USAID co-manages ESF, AEECA, and Democracy Fund programs, which frequently support development activities as a means of promoting U.S. political and strategic goals. Based on historical averages, according to USAID, the agency implements more than 90% of ESF, 70% of AEECA, 40% of the Democracy Fund, and about 60% of the Global HIV/AIDS funding appropriated to the State Department. USAID also implements all Food for Peace Act Title II food assistance funded through agriculture appropriations. ", "USAID obligated an estimated $20.55 billion to implement foreign assistance programs and activities in FY2017. The agency's staff in 2018 totaled 9,747 , of which about 67% were working overseas, overseeing the implementation of hundreds of projects undertaken by thousands of private sector contractors, consultants, and nongovernmental organizations."], "subsections": []}, {"section_title": "U.S. Department of Defense", "paragraphs": ["DOD implements all SFOPS-funded military assistance programs\u2014FMF, IMET, PKO, and PCCF\u2014in conjunction with the policy guidance of the Department of State. The Defense Security Cooperation Agency is the primary DOD body responsible for these programs. DOD also carries out an array of state-building activities, funded through defense appropriations legislation, which are usually in the context of training exercises and military operations. These sorts of activities, once the exclusive jurisdiction of civilian aid agencies, include development assistance to Iraq and Afghanistan through the Commander's Emergency Response Program (CERP), the Iraq Relief and Reconstruction Fund, and the Afghanistan Infrastructure Fund, and elsewhere through the Defense Health Program, counterdrug activities, and humanitarian and disaster relief. Training and equipping of Iraqi and Afghan police and military, though similar in nature to some traditional security assistance programs, has been funded and implemented primarily through DOD appropriations, though implementing the Iraq police training program was a State Department responsibility from 2012 until it was phased out in 2013.", "In FY2017, the Department of Defense implemented an estimated $14.50 billion in foreign assistance programs. "], "subsections": []}, {"section_title": "U.S. Department of State", "paragraphs": ["The Department of State manages and co-manages a wide range of assistance programs. It is the lead U.S. civilian agency on security and refugee related assistance, and has sole responsibility for implementing the International Narcotics and Law Enforcement (INCLE) and Nonproliferation, Antiterror, and Demining (NADR) accounts, the two Migration and Refugee accounts (MRA and ERMA), and the International Organizations and Programs (IO&P) account. State is also home to the Office of the Global AIDS Coordinator (OGAC), which manages the State Department's portion of Global Health funding in support of HIV/AIDS programs, though many of these funds are transferred to and implemented by USAID, the National Institutes of Health, and the Centers for Disease Control and Prevention. ", "In conjunction with USAID, the State Department manages the Economic Support Fund, AEECA assistance to the former communist states, and Democracy Fund accounts. For these accounts, the State Department largely sets the overall policy and direction of funds, while USAID implements the preponderance of programs. In addition, the State Department, through its Bureau of Political-Military Affairs, has policy authority over the Foreign Military Financing (FMF), International Military Education and Training (IMET), and Peacekeeping Operations (PKO) accounts, and, while it was active, the Pakistan Counterinsurgency Capability Fund (PCCF). These programs are implemented by the Department of Defense. Police training programs have traditionally been the responsibility of the International Narcotics and Law Enforcement (INL) Office in the State Department, though programs in Iraq and Afghanistan were implemented and paid for by the Department of Defense for several years. ", "State is also the organizational home to the Office of U.S. Foreign Assistance Resources (formerly the Office of the Director of Foreign Assistance), known as \"F,\" which was created in 2006 to coordinate U.S. foreign assistance programs. The office establishes standard program structures and definitions, as well as performance indicators, and collects and reports data on State Department and USAID aid programs.", "The State Department implemented about $7.66 billion in foreign assistance funding in FY2017, though it has policy authority over a much broader range of assistance funds."], "subsections": []}, {"section_title": "U.S. Department of Health and Human Services", "paragraphs": ["The U.S. Department of Health and Human Services implements a range of global health programs through its various component institutions. As an implementing partner in the President's Emergency Plan for Aids Relief (PEPFAR), a large portion of HHS foreign assistance activity is related to HIV prevention and treatment, including technical support and preventing mother to child transmission of HIV/AIDS. The Centers for Disease Control and Prevention participates in a broad range of global disease control activity, including rapid outbreak response, global research and surveillance, information technology assistance, and field epidemiology and laboratory training. The National Institutes of Health (NIH) also conduct international health research that is reported as assistance.", "In FY2017, HHS institutions implemented $2.66 billion in foreign assistance activities."], "subsections": []}, {"section_title": "U.S. Department of the Treasury", "paragraphs": ["The Department of the Treasury's Under Secretary for International Affairs administers U.S. contributions to and participation in the World Bank and other multilateral development institutions. In this case, the agency manages the distribution of funds to the institutions, but does not implement programs. Presidentially appointed U.S. executive directors at each of the banks represent the United States' point of view. Treasury also deals with foreign debt reduction issues and programs, including U.S. participation in the Highly Indebted Poor Countries (HIPC) initiative, and manages a technical assistance program offering temporary financial advisors to countries implementing major economic reforms and combating terrorist finance activity. ", "For FY2017, the Department of the Treasury managed foreign assistance valued at about $1.85 billion."], "subsections": []}, {"section_title": "Millennium Challenge Corporation", "paragraphs": ["Created in February 2004, the Millennium Challenge Corporation (MCC) seeks to concentrate significantly higher amounts of U.S. resources in a few low- and lower-middle-income countries that have demonstrated a strong commitment to political, economic, and social reforms relative to other developing countries. A significant feature of the MCC effort is that recipient countries formulate, propose, and implement mutually agreed multi-year U.S.-funded project plans known as compacts. Compacts in the 27 recipient countries selected to date have emphasized construction of infrastructure. The MCC is a U.S. government corporation, headed by a chief executive officer who reports to a board of directors chaired by the Secretary of State. The Corporation maintains a relatively small staff of about 300. ", "The MCC obligated about $1.01 billion in FY2017."], "subsections": []}, {"section_title": "Other Agencies", "paragraphs": ["A number of other government agencies play a role in implementing foreign aid programs. ", "The Peace Corps, an autonomous agency with FY2017 obligations of $445 million, supports about 7,300 volunteers in 65 countries. Peace Corps volunteers work in a wide range of educational, health, and community development projects. The Trade and Development Agency (TDA), which obligated $58 million in FY2017, finances trade missions and feasibility studies for private sector projects likely to generate U.S. exports. The Overseas Private Investment Corporation (OPIC) provides political risk insurance to U.S. companies investing in developing countries and finances projects through loans and guarantees. Its insurance activities have been self-sustaining, but credit reform rules require a relatively small appropriation to back up U.S. guarantees and for administrative expenses. The Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act), signed into law in October 2018 ( P.L. 115-254 ), authorized consolidation of OPIC and USAID's Development Credit Authority into a new U.S. International Development Finance Corporation (IDFC), which is expected to become operational in fall 2019. For FY2017, as for most prior years, OPIC receipts exceeded appropriations, resulting in a net gain to the Treasury. The Inter-American Foundation and the African Development Foundation, obligating $25.8 million and $20.2 million, respectively, in FY2017, finance small-scale enterprise and grassroots self-help activities aimed at assisting poor people. "], "subsections": []}]}, {"section_title": "What Are the Different Forms in Which Assistance Is Provided?", "paragraphs": ["Most U.S. assistance is now provided as a grant (gift) rather than a loan, so as not to increase the heavy debt burden carried by many developing countries. However, the forms a grant may take are diverse. The most common type of U.S. development aid is project-based assistance (77% in FY2017), in which aid is channeled through an implementing partner to complete a project. Aid is also provided in the form of core contribution to international organizations such as the United Nations, technical assistance, and direct budget support (cash transfer) to governments. A portion of aid money is also spent on administrative costs ( Figure 3 ). Within these categories, aid may take many forms, as described below."], "subsections": [{"section_title": "Cash Transfer", "paragraphs": ["Although it is the exception rather than the rule, some countries receive aid in the form of a cash grant to the government. Dollars provided in this way support a government's balance-of-payments situation, enabling it to purchase more U.S. goods, service its debt, or devote more domestic revenues to developmental or other purposes. Cash transfers have been made as a reward to countries that have supported the United States' counterterrorism operations (Turkey and Jordan in FY2004), to provide political and strategic support (both Egypt and Israel annually for decades after the 1979 Camp David Peace Accord), and in exchange for undertaking difficult political and economic reforms. "], "subsections": []}, {"section_title": "Commodities", "paragraphs": ["Assistance may be provided in the form of food commodities, weapons systems, or equipment such as generators or computers. Food aid may be provided directly to meet humanitarian needs or to encourage attendance at a maternal/child health care program. Weapons supplied under the military assistance program may include training in their use. Equipment and commodities provided under development assistance are usually integrated with other forms of aid to meet objectives in a particular social or economic sector. For instance, textbooks have been provided in both Afghanistan and Iraq as part of a broader effort to reform the educational sector and train teachers. Computers may be offered in conjunction with training and expertise to fledgling microcredit institutions. Since PEPFAR was first authorized in 2004, antiretroviral drugs (ARVs) provided to individuals living with HIV/AIDS have been a significant component of commodity-based assistance."], "subsections": []}, {"section_title": "Economic Infrastructure", "paragraphs": ["Although once a significant portion of U.S. assistance programs, construction of economic infrastructure\u2014roads, irrigation systems, electric power facilities, etc.\u2014was rarely provided after the 1970s. Because of the substantial expense of these projects, they were to be found only in large assistance programs, such as that for Egypt in the 1980s and 1990s, where the United States constructed major urban water and sanitation systems. The aid programs in Iraq and Afghanistan supported the building of schools, health clinics, roads, power plants, and irrigation systems. In Iraq alone, more than $10 billion went to economic infrastructure. Economic infrastructure is now also supported by U.S. assistance in a wider range of developing countries through the Millennium Challenge Corporation. In this case, recipient countries design their own assistance programs, most of which, to date, include an infrastructure component."], "subsections": []}, {"section_title": "Training", "paragraphs": ["Transfer of knowledge and skills is a significant part of most assistance programs. The International Military Education and Training Program (IMET) provides training to officers of the military forces of allied and friendly nations. Tens of thousands of citizens of aid recipient countries receive short-term technical training or longer-term degree training annually under USAID programs. More than one-quarter of Peace Corps volunteers are English, math, and science teachers. Other aid programs provide law enforcement personnel with anti-narcotics or anti-terrorism training."], "subsections": []}, {"section_title": "Expertise", "paragraphs": ["Many assistance programs provide expert advice to government and private sector organizations. The Department of the Treasury, USAID, and U.S.-funded multilateral banks all place specialists in host government ministries to make recommendations on policy reforms in a wide variety of sectors. USAID has often placed experts in private sector business and civic organizations to help strengthen them in their formative years or while indigenous staff are being trained. While most of these experts are U.S. nationals, in Russia, USAID funded the development of locally staffed political and economic think tanks to offer policy options to that government."], "subsections": []}, {"section_title": "Small Grants", "paragraphs": ["USAID, the Inter-American Foundation, and the African Development Foundation often provide aid in the form of small grants directly to local organizations to foster economic and social development and to encourage civic engagement in their communities. Grants are sometimes provided to microcredit organizations, such village-level women's savings groups, which in turn provide loans to microentrepreneurs. Small grants may also address specific community needs. Recent IAF grants, for example, have supported organizations that help resettle Salvadoran migrants deported from the United States and youth programs in Central America aimed at gang prevention. "], "subsections": []}]}, {"section_title": "How Much Aid Is Provided as Loans and How Much as Grants? What Are Some Types of Loans? Have Loans Been Repaid? Why Is Repayment of Some Loans Forgiven?", "paragraphs": ["Under the Foreign Assistance Act of 1961, the President may determine the terms and conditions under which most forms of assistance are provided. In general, the financial condition of a country\u2014its ability to meet repayment obligations\u2014has been an important criterion of the decision to provide a loan or grant. Some programs, such as humanitarian and disaster relief programs, were designed from the beginning to be entirely grant activities."], "subsections": [{"section_title": "Loan/Grant Composition", "paragraphs": ["During the past two decades, nearly all foreign aid\u2014military as well as economic\u2014has been provided in grant form. While loans represented 32% of total military and economic assistance between 1962 and 1988, this figure declined substantially beginning in the mid-1980s, until by FY2001, loans represented less than 1% of total aid appropriations. The de-emphasis on loan programs came largely in response to the debt problems of developing countries. Both Congress and the executive branch have generally supported the view that foreign aid should not add to the already existing debt burden carried by these countries. In the FY2019 budget request, the Trump Administration encouraged the use of loans over grants when providing military assistance (Foreign Military Financing), but Congress did not include language in support of that proposal in the enacted FY2019 appropriation ( P.L. 116-6 )."], "subsections": []}, {"section_title": "Loan Guarantees", "paragraphs": ["Although a small proportion of total current aid, there are significant USAID-managed programs that guarantee loans, meaning the U.S. government agrees to pay a portion of the amount owed in the case of a default on a loan. A Development Credit Authority (DCA) loan guarantee, in which risk is shared with a private sector bank, can be used to increase access to finance in support of any development sector. The DCA is to be transferred from USAID in 2019 to the new IDFC, established by the BUILD Act of 2018 ( P.L. 115-254 ), to enhance U.S. development finance capacity. ", "Under the Israeli Loan Guarantee Program, the United States has guaranteed repayment of loans made by commercial sources to support the costs of immigrants settling in Israel from other countries and may issue guarantees to support economic recovery. USAID has also provided loan guarantees in recent years to improve the terms or amounts of financing from international capital markets for Ukraine and Jordan. In these cases, assistance funds representing a fraction of the guarantee amount are provided to cover possible default."], "subsections": []}, {"section_title": "Loan Repayment", "paragraphs": ["Between 1946 and 2016, the United States loaned $112.7 billion in foreign economic and military aid to foreign governments, and while most foreign aid is now provided through grants, $9.18 billion in loans to foreign governments remained outstanding at the end of FY2016. For nearly three decades, Section 620q of the Foreign Assistance Act (the Brooke amendment) has prohibited new assistance to the government of any country that falls more than one year past due in servicing its debt obligations to the United States, though the President may waive application of this prohibition if he determines it is in the national interest. "], "subsections": []}, {"section_title": "Debt Forgiveness", "paragraphs": ["The United States has also forgiven debts owed by foreign governments and encouraged, with mixed success, other foreign aid donors and international financial institutions to do likewise. In some cases, the decision to forgive foreign aid debts has been based largely on economic grounds as another means to support development efforts by heavily indebted, but reform-minded, countries. The United States has been one of the strongest supporters of the Heavily Indebted Poor Country (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI). These initiatives, which began in the late 1990s, include participation of the World Bank, the International Monetary Fund, and other international financial institutions in a comprehensive debt workout framework for the world's poorest and most debt-strapped nations. ", "The largest and most hotly debated debt forgiveness actions have been implemented for much broader foreign policy reasons with a more strategic purpose. Poland, during its transition from a communist system and centrally planned economy (1990\u2014$2.46 billion); Egypt, for making peace with Israel and helping maintain the Arab coalition during the Persian Gulf War (1990\u2014$7 billion); and Jordan, after signing a peace accord with Israel (1994\u2014$700 million), are examples. Similarly, the United States forgave about $4.1 billion in outstanding Saddam Hussein-era Iraqi debt in November 2004 and helped negotiate an 80% reduction in Iraq's debt to creditor nations later that month."], "subsections": []}]}, {"section_title": "What Are the Roles of Government and Private Sector in Development and Humanitarian Aid Delivery?", "paragraphs": ["Most development and humanitarian assistance activities are not directly implemented by U.S. government personnel but by private sector entities, such as individual personal service contractors, consulting firms, universities, private voluntary organizations (PVOs), or public international organizations (PIOs). Generally speaking, U.S. government foreign service and civil servants determine the direction and priorities of the aid program, allocate funds while keeping within legislative requirements, ensure that appropriate projects are in place to meet aid objectives, select implementers, and monitor the implementation of those projects for effectiveness and financial accountability. Both USAID and the State Department have promoted the use of public-private partnerships, in which private entities such as corporations and foundations are contributing partners, not paid implementers, in situations where business interests and development objectives coincide."], "subsections": []}, {"section_title": "Which Countries Receive U.S. Foreign Aid?", "paragraphs": ["In FY2017, the United States provided some form of bilateral foreign assistance to more than 150 countries. Aid is concentrated heavily in certain countries, reflecting the priorities and interests of United States foreign policy at the time. Table 2 identifies the top 15 recipients of U.S. foreign assistance for FY1997, FY2007 and FY2017.", "As shown in the table above, there are both similarities and sharp differences among country aid recipients for the three periods. The most consistent thread connecting the top aid recipients over the past two decades has been continuing U.S. strategic interests in the Middle East, with large programs maintained for Israel and Egypt and, for Iraq, following the 2003 invasion. Two key countries in the U.S. counterterrorism strategy, Afghanistan and Pakistan, made their first appearances on the list in FY2002 and continued to be among the top recipients in FY2017.", "In FY1997, one sub-Saharan African country appeared among leading aid recipients; in FY2017, 7 of the 15 are sub-Saharan African. Many are focus countries under the PEPFAR initiative to address the HIV/AIDS epidemic; South Sudan receives support as a newly independent country with multiple humanitarian and development needs. In FY1997, three countries from Eastern Europe and the former Soviet Union made the list, as many from the region had for much of the 1990s, representing the effort to transform the former communist nations to democratic societies and market-oriented economies. None of those countries appear in the FY2017 list. In FY1997, four Latin American countries make the list; no countries from the region appear in FY2017.", "On a regional basis, the Middle East/North Africa (MENA) region has received the largest share of U.S. foreign assistance for many decades. Although economic aid to the region's top two recipients, Israel and Egypt, began to decline in the late 1990s, the dominant share of bilateral U.S. assistance consumed by the MENA region was maintained in FY2005 by the war in Iraq. Despite the continued importance of the region, its share slipped substantially by FY2017 as the effort to train and equip Iraqi forces diminished.", "Since September 11, 2001, South and Central Asia has emerged as a significant target of U.S. assistance, rising from a roughly 3% share 20 years ago to 16% in FY2007 and 15% in FY2017, largely because of aid to Afghanistan and Pakistan. Similarly, the share represented by African nations has increased from 10% and 19%, respectively, in FY1997 and FY2007, to 25% in FY2017, largely due to the HIV/AIDS initiative that funnels resources mostly to African countries and to a range of other efforts to address the region's development challenges. Meanwhile, the share of aid to Europe/Eurasia, which greatly surpassed that of Africa in FY1997, has declined significantly in the past decade, to about 4% in FY2017, with the graduation of many East European aid recipients and the termination of programs in Russia. The Ukraine was responsible for about one third of aid to that region in FY2017. East Asia/Pacific has remained at a low level during the past two decades, while Latin America's share has risen and fallen based on U.S. interest in Colombia and a few Central American countries as aid has shifted to regions of more pressing strategic interest (see Figure 4 )."], "subsections": []}]}, {"section_title": "Foreign Aid Spending", "paragraphs": [], "subsections": [{"section_title": "How Large Is the U.S. Foreign Assistance Budget?", "paragraphs": ["There are several methods commonly used for measuring the amount of federal spending on foreign assistance. Amounts can be expressed in terms of budget authority (funds appropriated by Congress), obligations (amounts contractually committed), outlays or disbursements (money actually spent). Assistance levels are also sometimes measured as a percentage of the total federal budget, as a percentage of total discretionary budget authority (excluding mandatory and entitlement programs), or as a percentage of the gross domestic product (GDP) (for an indication of the national wealth allocated to foreign aid).", "By nearly all of these measures, foreign aid resources fell gradually on average over several decades since the historical high levels of the late 1940s and early 1950s ( Appendix A ). ", "This downward trend was sporadically interrupted, largely due to major foreign policy initiatives such as the Alliance for Progress for Latin America beginning in 1961, the infusion of funds to implement the Camp David Middle East Peace Accords in 1979, and an increase in military assistance to Egypt, Turkey, Greece and others in the mid-1980s. The lowest point in U.S. foreign aid spending since World War II came in 1997, when foreign assistance obligations fell to just above $20 billion (in 2017 dollar terms). ( Figure 5 )", "While foreign aid consistently represented just over 1% of U.S. annual gross domestic product in the decade following World War II, it fell gradually to between 0.2% and 0.4% for most years in the past three decades. Foreign assistance spending has comprised, on average, around 3% of discretionary budget authority and just over 1% of total budget authority each year since 1977, though the percentages have sometimes varied considerably from year to year. Foreign aid dropped from 5% of discretionary budget authority in 1979 to 2.4% in 2001, before rising sharply in conjunction with U.S. activities in Afghanistan and Iraq starting in 2003. As a portion of total budget authority, foreign assistance reached 2.5% in 1979, but has hovered below 1.5% since 1987. In 2017, foreign assistance was estimated to account for 4.1% of discretionary budget authority and 1.2% of total budget authority ( Figure 6 ; Appendix A ).", "As previously discussed, since the September 11, 2001, terrorist attacks, foreign aid funding has been closely tied to U.S. counterterrorism strategy, particularly in Iraq, Afghanistan, and Pakistan. Bush and Obama Administration global health initiatives, the creation of the Millennium Challenge Corporation, and growth in counter-narcotics activities have driven funding increases as well. The Budget Control Act of 2011, and the drawdown of U.S. military forces in Iraq, and to some degree Afghanistan, led to a notable dip in aid obligations in FY2013, but aid levels have risen again with efforts to address the crisis in Syria, counter-ISIL activities, and humanitarian aid. The use of the Overseas Contingency Operations (OCO, discussed below) designation has enabled this growth despite the BCA limitations. Figure 7 shows how trends in foreign aid funding in recent decades can be attributed to specific foreign policy events and presidential initiatives. "], "subsections": []}, {"section_title": "What Does Overseas Contingency Operations (OCO) Mean?", "paragraphs": ["The Obama Administration's FY2012 international affairs budget proposed that the overseas contingency operations (OCO) designation, which had been applied since 2009 to war-related Defense appropriations, including to DOD assistance programs such as ISFF, ASFF and CERP, be extended to include \"extraordinary, but temporary, costs of the Department of State and USAID in the front line states of Iraq, Afghanistan and Pakistan.\" Congress not only adopted the OCO designation in the FY2012 SFOPS appropriations legislation, but expanded it to include funding for additional accounts and countries. In every fiscal year since, a portion of certain foreign assistance accounts\u2014primarily ESF, FMF, IDA, MRA and INCLE\u2014has been appropriated with the OCO designation.", "The OCO designation is significant because the Budget Control Act of 2011 (BCA), which set annual caps on discretionary funding from FY2013 through FY2021, specified that funds designated as OCO do not count toward the discretionary spending limits established by the act. OCO designation makes it possible to prevent war-related funding from crowding out core international affairs activities within the budget allocation. The OCO approach is reminiscent of the use of supplemental international affairs appropriations for the first decade after the September 11, 2001, terrorist attacks. Congress appropriated significant emergency supplemental funds for foreign operations and Defense assistance programs every year from FY2002 through FY2010 for activities in Iraq, Afghanistan, and elsewhere, which were not counted toward subcommittee budget allocations. Since the OCO designation was first applied to foreign operations in FY2012, supplemental appropriations for foreign aid have declined significantly. ", "In the FY2019 and FY2020 budget requests, the Trump Administration did not request OCO funding within the international affairs budget, but did request OCO funding for the Department of Defense, including for DOD aid accounts. Congress used the OCO designation for both DOD and State/USAID accounts in the FY2019 appropriation, P.L. 116-6 , but a smaller portion of aid was designated as OCO compared to FY2018. It remains to be seen whether this is the beginning of a downward trend in OCO use for foreign aid."], "subsections": []}, {"section_title": "How Much of Foreign Aid Dollars Are Spent on U.S. Goods?", "paragraphs": ["Congress historically sought to enhance the domestic benefits of foreign aid by requiring that most U.S. foreign aid be used to procure U.S. goods and services. The conditioning of aid on the procurement of goods and services from the donor-country is sometimes called \"tied aid,\" and while quite common for much of the history of modern foreign assistance, has become increasingly disfavored in the international community. Studies have shown that tying aid increases the costs of goods and services by 15%-30% on average, and up to 40% for food aid, reducing the overall effectiveness of aid flows. The United States joined other donor nations in committing to reduce tied aid in the Paris Declaration on Aid Effectiveness in March 2005, and the portion of tied aid from all donors fell from 70% of total bilateral development assistance in 1985 to an average of 12% in 2016. However, an estimated 32% of U.S. bilateral development assistance was tied in 2016, the highest percentage among major donors, perhaps reflecting the perception of policymakers that maintaining public and political support for foreign aid programs requires ensuring direct economic benefit to the United States. About 67% of U.S. foreign assistance funds in FY2017 were obligated to U.S.-based entities. ", "A considerable amount of U.S. foreign assistance funds remain in the United States, through domestic procurement or the use of U.S. implementers, but the portion differs by program and is hard to identify with any accuracy. For some types of aid, the legislative requirements or program design make it relatively easy to determine how much aid is spent on U.S. goods or services, while for others, this is more difficult to determine.", "USAID. Most USAID funding (Development Assistance, Global Health, Economic Support Fund) is implemented through contracts, grants, and cooperative agreements with implementing partners. While many implementing partner organizations are based in the United States and employ U.S. citizens, there is little information available about what portion of the funds used for program implementation are used for goods and services provided by American firms. Procurement reform efforts initiated by USAID in 2010 have aimed to increase procurement and implementation by host country entities as a means to enhance country ownership, build local capacity, and improve sustainability of aid programs. Food assistance commodities, until recently, were purchased wholly in the United States, and generally required by law to be shipped by U.S. carriers, suggesting that the vast majority of food aid expenditures are made in the United States. Starting in FY2009, a small portion of food assistance was authorized to be purchased locally and regionally to meet urgent food needs more quickly. Successive Administrations and several Members of Congress have proposed greater flexibility in the food aid program, potentially increasing aid efficiency but reducing the portion of funds flowing to U.S. farmers and shippers. To date, these proposals have been largely unsuccessful. Foreign Military Financing , with the exception of certain assistance allocated to Israel, is used exclusively to procure U.S. military equipment and training. Millennium Challenge Corporation. The MCC bases its procurement regulations on those established by the World Bank, which calls for an open and competitive process, with no preference given to donor country suppliers. Between FY2011 and FY2017, the MCC awarded roughly 15% of the value of compact contracts to U.S. firms. Multilateral development aid. Multilateral aid funds are mixed with funds from other nations and the bulk of the program is financed with borrowed funds rather than direct government contributions. Information on the U.S. share of procurement financed by MDBs is unavailable.", "In addition to the direct benefits derived from aid dollars used for American goods and services, many argue that the foreign aid program brings significant indirect financial benefits to the United States. For example, analysts maintain that provision of military equipment through the military assistance program and food commodities through the Food for Peace program helps to develop future, strictly commercial, markets for those products. More broadly, as countries develop economically, they are in a position to purchase more goods from abroad and the United States benefits as a trade partner. Since an increasing majority of global consumers are outside of the United States, some business leaders assert that establishing strong economic and trade ties in the developing world, using foreign assistance as a tool, is key to U.S. economic and job growth. "], "subsections": []}, {"section_title": "How Does the United States Rank as a Donor of Foreign Aid?", "paragraphs": ["Since World War II, with the exception of several years between 1989 and 2001, during which Japan ranked first among aid donors, the United States has led the developed countries in net disbursements of economic aid, or \"Official Development Assistance (ODA)\" as defined by the Organization for Economic Cooperation and Development's (OECD) Development Assistance Committee (DAC). In 2017, the most recent year for which data are available, the United States disbursed $34.12 billion in ODA, or about 24% of the $144.71 billion in total net ODA disbursements by DAC donors that year. Germany ranked second at $24.16 billion, the United Kingdom followed at $18.59 billion, Japan ranked fourth at $11.85 billion, and France rounded out the top donors with $11.03 billion in 2017 (see Figure 8 ). While the top five donors have not varied for more than a decade, there have been shifts lower down the ranking. For example, Turkey has become a much more prominent ODA donor in recent years (ranked 6 th in 2017, with $9.08 billion in ODA, compared to 21 st in 2006), reflecting large amounts of humanitarian aid to assist Syrian refugees.", "Even as it leads in dollar amounts of aid flows to developing countries, the United States often ranks low when aid is calculated as a percentage of gross national income (GNI). This calculation is often cited in the context of international donor forums, as a level of 0.7% GNI was established as a target for donors in the 2000 U.N. Millennium Development Goals. In 2017, the United States ranked at the bottom among major donors at 0.18% of GNI, slightly lower than Portugal and Spain (0.18% and 0.19%, respectively). The United Arab Emirates, which has significantly increased its reported ODA in recent years, ranked first among top donors at 1.03% of GNI, followed by Sweden at 1.02% and Luxembourg at 1.00%. ", "There has also been an increase in ODA from non-DAC countries. Between 2000 and 2014, China spent $81.1 billion in ODA, more than tripling its ODA commitments during this period. While reported Chinese ODA is still relatively small compared to that of major donor countries, policymakers are paying increasing attention to growing Chinese investments in developing countries that do not meet the ODA definition. China has touted its \"Belt and Road\" initiative as an effort to boost development and connectivity across as many as 125 countries to create \"strategic propellers\" for its own development. However, China has provided little official aggregate information on the initiative, including on the number of projects, countries involved, the terms of financing, and metrics for success."], "subsections": []}]}, {"section_title": "Congress and Foreign Aid", "paragraphs": [], "subsections": [{"section_title": "What Congressional Committees Oversee Foreign Aid Programs?", "paragraphs": ["Numerous congressional authorizing committees and appropriations subcommittees maintain responsibility for U.S. foreign assistance. Several committees have responsibility for authorizing legislation establishing programs and policy and for conducting oversight of foreign aid programs. In the Senate, the Committee on Foreign Relations, and in the House, the Committee on Foreign Affairs, have primary jurisdiction over bilateral development assistance, political/strategic and other economic security assistance, military assistance, and international organizations. Food aid, primarily the responsibility of the Agriculture Committees in both bodies, is periodically shared with the Foreign Affairs Committee in the House. U.S. contributions to multilateral development banks are within the jurisdiction of the Senate Foreign Relations Committee and the House Financial Services Committee. The large nontraditional aid programs funded by DOD, such as Nunn-Lugar Cooperative Threat Reduction programs and the military aid programs in Afghanistan and Iraq, come under the jurisdiction of the Armed Services Committees. Some global health assistance, such as research and other activities done by the Centers for Disease Control and Prevention, may fall under the jurisdiction of the House Energy and Commerce and Senate HELP committees.", "Traditionally, most foreign aid appropriations fall under the jurisdiction of the SFOPS Subcommittees, with food assistance appropriated by the Agriculture Subcommittees. As noted earlier, however, certain military, global health, and other activities that have been reported as foreign aid have been appropriated through other subcommittees in recent years, including the Defense and the Labor, Health and Human Services, Education and Related Agencies subcommittees. (For current information on SFOPS Appropriations legislation, see CRS Report R45168, Department of State, Foreign Operations and Related Programs: FY2019 Budget and Appropriations , by Susan B. Epstein, Marian L. Lawson, and Cory R. Gill.)"], "subsections": []}, {"section_title": "What Are the Major Foreign Aid Legislative Vehicles?", "paragraphs": ["The most significant permanent foreign aid authorization laws are the Foreign Assistance Act of 1961, covering most bilateral economic and security assistance programs (P.L. 87-195; 22 U.S.C. 2151); the Arms Export Control Act (1976), authorizing military sales and financing (P.L. 90-629; 22 U.S.C. 2751); the Agricultural Trade Development and Assistance Act of 1954 (P.L. 480), covering food aid (P.L. 83-480; 7 U.S.C. 1691); and the Bretton Woods Agreement Act (1945), authorizing U.S. participation in multilateral development banks (P.L. 79-171; 22 U.S.C. 286). In the past, Congress usually scheduled debates every two years on omnibus foreign aid legislation that amended these permanent authorization measures. Congress has not enacted into law a comprehensive foreign assistance authorization measure since 1985, although foreign aid authorizing bills have passed the House or Senate, or both, on numerous occasions. Foreign aid bills have frequently stalled at some point in the debate because of controversial issues, a tight legislative calendar, or executive-legislative foreign policy disputes. In contrast, DOD assistance is authorized in annual National Defense Authorization legislation.", "In lieu of approving a broad State Department/USAID authorization bill, Congress has on occasion authorized major foreign assistance initiatives for specific regions, countries, or aid sectors in stand-alone legislation or within an appropriation bill. Among these are the SEED Act of 1989 ( P.L. 101-179 ; 22 U.S.C. 5401); the FREEDOM Support Act of 1992 ( P.L. 102-511 ; 22 U.S.C. 5801); the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 ( P.L. 108-25 ; 22 U.S.C. 7601); the Tom Lantos and Henry J. Hyde United States Global Leadership Against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act of 2008 ( P.L. 110-293 ); the Millennium Challenge Act of 2003 (Division D, Title VI of P.L. 108-199 ); the Enhanced Partnership With Pakistan Act of 2009 ( P.L. 111-73 ; 22 U.S.C. 8401); the Global Food Security Act of 2016 ( P.L. 114-195 ; 22 U.S.C. 9306), and the BUILD Act ( P.L. 115-254 ).", "In the absence of regular enactment of foreign aid authorization bills, appropriation measures considered annually within the SFOPS spending bill have assumed greater significance for Congress in influencing U.S. foreign aid policy. Not only do appropriations bills set spending levels each year for nearly every foreign assistance account, SFOPS appropriations also incorporate new policy initiatives that would otherwise be debated and enacted as part of authorizing legislation.", "Appendix A. Data Table", "Appendix B. Common Foreign Assistance Abbreviations"], "subsections": []}]}]}}
{"id": "RS22389", "title": "An Introduction to the Low-Income Housing Tax Credit", "released_date": "2019-02-27T00:00:00", "summary": ["The low-income housing tax credit (LIHTC) program is one of the federal government's primary policy tools for encouraging the development and rehabilitation of affordable rental housing. These nonrefundable federal housing tax credits are awarded to developers of qualified rental projects via a competitive application process administered by state housing finance authorities. Developers typically sell their tax credits to outside investors in exchange for equity in the project. Selling the tax credits reduces the debt developers would otherwise have to incur and the equity they would otherwise have to contribute. With lower financing costs, tax credit properties can potentially offer lower, more affordable rents. The LIHTC is estimated to cost the government an average of approximately $9.9 billion annually.", "In late 2017, there was a revision to the Internal Revenue Code (P.L. 115-97) that substantially changed the federal tax system. The revision did not directly alter the LIHTC program; however, there had been early reports of downward pressure on tax credit demand stemming from the 2017 tax revision.", "Most recently, the 2018 Consolidated Appropriations Act (P.L. 115-141) made two changes to the LIHTC program. First, the act modified the so-called \"income test,\" which determines the maximum income an LIHTC tenant may have. Previously, each individual tenant was required to have an income below one of two threshold options (either 50% or 60% of area median gross income, depending on an election made by the property owner). With the modification, property owners may use a third income test option that allows them to average the income of tenants when determining whether the income restriction is satisfied. Second, the act also increased the amount of credits available to states each year by 12.5% for years 2018 through 2021.", "This report will be updated as warranted by legislative changes."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The low-income housing tax credit (LIHTC) was created by the Tax Reform Act of 1986 ( P.L. 99-514 ) to provide an incentive for the development and rehabilitation of affordable rental housing. These federal housing tax credits are awarded to developers of qualified projects via a competitive application process administered by state housing finance authorities (HFAs). Developers either use the credits or sell them to investors to raise capital for real estate projects, which, in turn, reduces the debt or equity contribu tion that would otherwise be required of developers. With lower financing costs, tax credit properties can potentially expand the supply of affordable rental housing. The LIHTC is estimated to cost the government an average of $9.9 billion annually."], "subsections": []}, {"section_title": "Types of Credits", "paragraphs": ["Two types of LIHTCs are available depending on the nature of the construction project. The so-called 9% credit is generally reserved for new construction, while the so-called 4% credit is typically used for rehabilitation projects and new construction that is financed with tax-exempt bonds. Each year, for 10 years, a tax credit equal to roughly 4% or 9% of a project's qualified basis (cost of construction) is claimed. The applicable credit rates have historically not actually been 4% and 9%. Instead, the credit rates have fluctuated in response to market interest movements so that the program has delivered a subsidy equal to 30% of the present value of a project's qualified basis in the case of the 4% credit, and 70% in the case of the 9% credit. For both the 4% and 9% credit it is the subsidy levels (30% or 70%) that are explicitly specified in the Internal Revenue Code (IRC), not the credit rates. Since 1986, the 4% rate has ranged between 3.15% and 3.97%, and the 9% credit between 7.35% and 9.27%. Since 2008, however, there has been a floor under the 9% credit below which the new construction credit rate cannot fall."], "subsections": []}, {"section_title": "An Example", "paragraphs": ["A simplified example may help in understanding how the LIHTC program is intended to encourage affordable housing development. Consider a new affordable housing apartment complex with a qualified basis of $1 million. Since the project involves new construction it will qualify for the 9% credit and generate a stream of tax credits equal to $90,000 (9% \u00d7 $1 million) per year for 10 years, or $900,000 in total. Under the appropriate interest rate the present value of the $900,000 stream of tax credits should be equal to $700,000, resulting in a 70% subsidy. The subsidy is intended to incentivize the development of affordable housing that otherwise may not be financially feasible or attractive relative to alternative investments. ", "The situation would be similar if the project involved rehabilitated construction except the developer would be entitled to a stream of tax credits equal to $40,000 (4% \u00d7 $1 million) per year for 10 years, or $400,000 in total. The present value of the $400,000 stream of tax credits should be equal to $300,000, resulting in a 30% subsidy."], "subsections": []}, {"section_title": "The Allocation Process", "paragraphs": ["The process of allocating, awarding, and then claiming the LIHTC is complex and lengthy. The process begins at the federal level with each state receiving an annual LIHTC allocation in accordance with federal law. State housing agencies then allocate credits to developers of rental housing according to federally required, but state created, allocation plans. The process typically ends with developers selling allocated credits to outside investors in exchange for equity. A more detailed discussion of each level of the allocation process is presented below."], "subsections": [{"section_title": "Federal Allocation to States", "paragraphs": ["LIHTCs are first allocated to each state according to its population. In 2019, states received an LIHTC allocation of $2.75625 per person, with a minimum small population state allocation of $3,166,875. These amounts reflect a temporary increase in the amount of credits each state received as a result of the 2018 Consolidated Appropriations Act ( P.L. 115-141 ). The increase is equal to 12.5% above what states would have received absent P.L. 115-141 , and is in effect through 2021. The state allocation limits do not apply to the 4% credits which are automatically packaged with tax-exempt bond financed projects. The administration of the tax credit program is typically carried out by each state's Housing Finance Agency (HFA)."], "subsections": []}, {"section_title": "State Allocation to Developers", "paragraphs": ["State HFAs allocate credits to developers of rental housing according to federally required, but state created, Qualified Allocation Plans (QAPs). Federal law requires that the QAP give priority to projects that serve the lowest-income households and that remain affordable for the longest period of time. Many states have two allocation periods per year. Developers apply for the credits by proposing plans to state agencies. Types of developers include nonprofit organizations, for-profit organizations, joint ventures, partnerships, limited partnerships, trusts, corporations, and limited liability corporations.", "An allocation to a developer does not imply that all allocated tax credits will be claimed. An allocation simply means tax credits are set aside for a developer. Once a developer receives an allocation it has several years to complete its project. Credits may not be claimed until a project is completed and occupied, also known as \"placed in service.\" Tax credits that are not allocated by states are added to a national pool and then redistributed to states that apply for the excess credits. To be eligible for an excess credit allocation, a state must have allocated its entire previous allotment of tax credits. This use-or-lose feature gives states an incentive to allocate all of their tax credits to developers. ", "In order to be eligible for an LIHTC allocation, properties are required to meet certain tests that restrict both the amount of rent that is assessed to tenants and the income of eligible tenants. Historically, the \"income test\" for a qualified low-income housing project has required project owners to irrevocably elect one of two income level tests, either a 20-50 test or a 40-60 test. In order to satisfy the first test, at least 20% of the units must be occupied by individuals with income of 50% or less of the area's median gross income, adjusted for family size. To satisfy the second test, at least 40% of the units must be occupied by individuals with income of 60% or less of the area's median gross income, adjusted for family size. ", "The 2018 Consolidated Appropriations Act ( P.L. 115-141 ) added a third income test option that allows owners to average the income of tenants. Specifically, under the income averaging option, the income test is satisfied if at least 40% of the units are occupied by tenants with an average income of no greater than 60% of AMI, and no individual tenant has an income exceeding 80% of AMI. Thus, for example, renting to someone with an income equal to 80% of AMI would also require renting to someone with an income no greater than 40% of AMI, so the tenants would have an average income equal to 60% of AMI. ", "In addition to the income test, a qualified low-income housing project must also meet the \"gross rents test\" by ensuring rents do not exceed 30% of the elected 50% or 60% of area median gross income, depending on which income test option the project elected.", "The types of projects eligible for the LIHTC are apartment buildings, single-family dwellings, duplexes, and townhouses. Projects may include more than one building. Tax credit project types also vary by the type of tenants served. Housing can be for families or special needs populations including the elderly.", "Enhanced LIHTCs are available for difficult development areas (DDAs) and qualified census tracts (QCTs) as an incentive to developers to invest in more distressed areas: areas where the need is greatest for affordable housing, but which can be the most difficult to develop. In these distressed areas, the LIHTC can be claimed for 130% (instead of the normal 100%) of the project's total cost excluding land costs. This also means that available credits can be increased by up to 30%. HERA ( P.L. 110-289 ) enacted changes that allow an HFA to classify any nontax exempt bond financed LIHTC project as difficult to develop, and hence, eligible for the enhanced credit."], "subsections": []}, {"section_title": "Developers and Investors", "paragraphs": ["Upon receipt of an LIHTC allocation, developers typically exchange the tax credits for equity. For-profit developers can either retain tax credits as financing for projects or sell them to investors; nonprofit developers sell tax credits. Taxpayers claiming the tax credits are usually investors, not developers. The tax credits cannot be claimed until the real estate development is complete and operable. This means that more than a year or two could pass between the time of the tax credit allocation and the time the credit is claimed. If, for example, a project were completed in July of 2018, depending on the filing period of the investor, the tax credits may not begin to be claimed until sometime in 2019.", "Trading tax credits, or selling them, refers to the process of exchanging tax credits for equity investment in real estate projects. Developers recruit investors to provide equity to fund development projects and offer the tax credits to those investors in exchange for their commitment. When credits are sold, the sale is usually structured with a limited partnership between the developer and the investor, and sometimes administered by syndicators who must adhere to the complex provisions of the tax code. As the general partner, the developer has a very small ownership percentage but maintains the authority to build and run the project on a day-to-day basis. The investor, as a limited partner, has a large ownership percentage with an otherwise passive role. Syndicators charge a fee for overseeing the investment transactions. ", "Typically, investors do not expect their equity investment in a project to produce income. Instead, investors look to the credits, which will be used to offset their income tax liabilities, as their return on investment. The return investors receive is determined in part by the market price of the tax credits. The market price of tax credits fluctuates, but in normal economic conditions the price typically ranges from the mid-$0.80s to low-$0.90s per $1.00 tax credit. The larger the difference between the market price of the credits and their face value ($1.00), the larger the return to investors. The investor can also receive tax benefits related to any tax losses generated through the project's operating costs, interest on its debt, and deductions such as depreciation.", "The type of tax credit investor has changed over the life of the LIHTC. Upon the introduction of the LIHTC in 1986, public partnerships were the primary source of equity investment in tax credit projects, but diminished profit margins have driven some syndicators out of the retail investment market. Although there are individual tax credit investors, in recent years, the vast majority of investors have come from corporations, either investing directly or through private partnerships.", "Different types of investors have different motivations for investing in tax credits. Some investors are motivated by the Community Reinvestment Act (CRA), which considers LIHTC investments favorably. Other investors include real estate, insurance, utility, and manufacturing firms, many of which list the rate of return on investment as their primary purpose for investing in tax credits. Tax sheltering is the second-most highly ranked purpose for investing.", "The LIHTC finances part of the total cost of many projects rather than the full cost and, as a result, must be combined with other resources. The financial resources that may be used in conjunction with the LIHTC include conventional mortgage loans provided by private lenders and alternative financing and grants from public or private sources. Individual states provide financing as well, some of which may be in the form of state tax credits modeled after the federal provision. Additionally, some LIHTC projects may have tenants who receive other government subsidies such as housing vouchers."], "subsections": []}]}, {"section_title": "Recent Legislative Developments", "paragraphs": ["In late 2017, there was a revision to the Internal Revenue Code ( P.L. 115-97 ) that substantially changed the federal tax system. The revision did not directly alter the LIHTC program; however, the reduction in corporate taxes, along with the limits on deducting net operating losses that were part of the act, led affordable housing advocates at the time to voice concern about a reduction in the demand for LIHTCs. ", "Most recently, the 2018 Consolidated Appropriations Act ( P.L. 115-141 ) made two changes to the LIHTC program. As was discussed in the \" The Allocation Process \" section, the act modified the so-called \"income test\" to allow for income averaging across tenants, and also increased the amount of credits available to states each year by 12.5% for years 2018 through 2021. These changes may have helped alleviate some concerns stemming from the 2017 tax revision's potential effect on LIHTC development. Still, it is not yet clear what, if any, impact there may be on the affordable housing supply in the long run as the result of these recent changes to the federal tax code."], "subsections": []}]}}
{"id": "R43542", "title": "How Social Security Benefits Are Computed: In Brief", "released_date": "2019-05-03T00:00:00", "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.", "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.", "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", "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.", "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.", "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."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["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."], "subsections": []}, {"section_title": "Eligibility", "paragraphs": ["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."], "subsections": []}, {"section_title": "Average Indexed Monthly Earnings", "paragraphs": ["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."], "subsections": [{"section_title": "Wage Indexing", "paragraphs": ["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\u2014for retired workers, at ages 61 and above\u2014are not indexed."], "subsections": []}, {"section_title": "Averaging Indexed Earnings", "paragraphs": ["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. "], "subsections": []}]}, {"section_title": "Primary Insurance Amount", "paragraphs": ["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."], "subsections": []}, {"section_title": "Wage Indexing Results in Stable Replacement Rates", "paragraphs": ["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\u2014the portion of earnings that benefits replace\u2014remain 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."], "subsections": []}, {"section_title": "Cost-of-Living Adjustment", "paragraphs": ["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."], "subsections": []}, {"section_title": "How Timing of Benefit Claim Affects Benefit Levels", "paragraphs": [], "subsections": [{"section_title": "Full Retirement Age", "paragraphs": ["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 ."], "subsections": []}, {"section_title": "Adjustments for Early and Late Benefit Claim", "paragraphs": ["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 6\u2154% 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."], "subsections": []}]}, {"section_title": "Dependent Benefits", "paragraphs": ["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. "], "subsections": []}, {"section_title": "Other Adjustments to Benefits", "paragraphs": ["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 ."], "subsections": []}]}}
{"id": "R45482", "title": "Background Ozone: Challenges in Science and Policy", "released_date": "2019-01-31T00:00:00", "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.", "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\u2014and even current\u2014ozone 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.", "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.", "Defining Background Ozone", "Three terms are used for different types of background ozone, and distinguishing among them can be important for regulatory purposes.", "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.", "Challenges in Estimating Background Ozone", "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:", "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.", "This report provides information on sources of background ozone, presents key challenges in addressing these sources, and discusses potential options to overcome these challenges."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["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\u2014under the right conditions\u2014for 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\u2014that 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. "], "subsections": []}, {"section_title": "Defining Background Ozone", "paragraphs": ["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."], "subsections": [{"section_title": "Different Types of Background Ozone", "paragraphs": ["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."], "subsections": [{"section_title": "Natural Background (NB)", "paragraphs": ["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. "], "subsections": []}, {"section_title": "North American Background (NAB)", "paragraphs": ["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. "], "subsections": []}, {"section_title": "U.S. Background (USB)", "paragraphs": ["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. "], "subsections": []}]}]}, {"section_title": "Challenges in Estimating Background Ozone", "paragraphs": ["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."], "subsections": []}, {"section_title": "Trends in Background Ozone Contributions", "paragraphs": ["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\u2014and outdated in some modeling cases\u2014several 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."], "subsections": [{"section_title": "Regulatory Relief Options for Some \"Natural Sources\"", "paragraphs": ["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."], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": ["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. "], "subsections": []}]}}
{"id": "R45539", "title": "Immigration: U.S. Asylum Policy", "released_date": "2019-02-19T00:00:00", "summary": ["Asylum is a complex area of immigration law and policy. While much of the recent debate surrounding asylum has focused on efforts by the Trump Administration to address asylum seekers arriving at the U.S. southern border, U.S. asylum policies have long been a subject of discussion.", "The Immigration and Nationality Act (INA) of 1952, as originally enacted, did not contain any language on asylum. Asylum provisions were added and then revised by a series of subsequent laws. Currently, the INA provides for the granting of asylum to an alien who applies for such relief in accordance with applicable requirements and is determined to be a refugee. The INA defines a refugee, in general, as a person who is outside his or her country of nationality and is unable or unwilling to return to that country because of persecution or a well-founded fear of persecution on account of race, religion, nationality, membership in a particular social group, or political opinion.", "Under current law and regulations, aliens who are in the United States or who arrive in the United States, regardless of immigration status, may apply for asylum (with exceptions). An asylum application is affirmative if an alien who is physically present in the United States (and is not in removal proceedings) submits an application to the Department of Homeland Security's (DHS's) U.S. Citizenship and Immigration Services (USCIS). An asylum application is defensive when the applicant is in standard removal proceedings with the Department of Justice's (DOJ's) Executive Office for Immigration Review (EOIR) and requests asylum as a defense against removal. An asylum applicant may receive employment authorization 180 days after the application filing date.", "Special asylum provisions apply to aliens who are subject to a streamlined removal process known as expedited removal. To be considered for asylum, these aliens must first be determined by a USCIS asylum officer to have a credible fear of persecution. Under the INA, credible fear of persecution means that \"there is a significant possibility, taking into account the credibility of the statements made by the alien in support of the alien's claim and such other facts as are known to the officer, that the alien could establish eligibility for asylum.\" Individuals determined to have a credible fear may apply for asylum during standard removal proceedings.", "Asylum may be granted by USCIS or EOIR. There are no numerical limitations on asylum grants. If an alien is granted asylum, his or her spouse and children may also be granted asylum, as dependents. A grant of asylum does not expire, but it may be terminated under certain circumstances. After one year of physical presence in the United States as asylees, an alien and his or her spouse and children may be granted lawful permanent resident status, subject to certain requirements.", "The Trump Administration has taken a variety of steps that would limit eligibility for asylum. As of the date of this report, legal challenges to these actions are ongoing. For its part, the 115th Congress considered asylum-related legislation, which generally would have tightened the asylum system. Several bills contained provisions that, among other things, would have amended INA provisions on termination of asylum, credible fear of persecution, frivolous asylum applications, and the definition of a refugee.", "Key policy considerations about asylum include the asylum application backlog, the grounds for granting asylum, the credible fear of persecution threshold, frivolous asylum applications, employment authorization, variation in immigration judges' asylum decisions, and safe third country agreements."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Illegal aliens have exploited asylum loopholes at an alarming rate. Over the last five years, DHS has seen a 2000 percent increase in aliens claiming credible fear (the first step to asylum), as many know it will give them an opportunity to stay in our country, even if they do not actually have a valid claim to asylum. ", "\u2014Department of Homeland Security (DHS) press release, December 20, 2018", "The increased number of Central Americans petitioning for asylum in the United States is not because more people are \"exploiting\" the system via \"loopholes,\" but because many have credible claims\u2026. There is no recorded evidence by any U.S. federal agency showing that the increased number of people petitioning for asylum in the United States is due to more people lying about the dangers they face back in their country of origin.", "\u2014Washington Office on Latin America (WOLA) commentary, March 14, 2018", "These statements and the conflicting views about asylum seekers underlying them suggest why the asylum debate has become so heated. Policymakers have faced a perennial challenge to devise a fair and efficient system that approves legitimate asylum claims while deterring and denying illegitimate ones. Changes in U.S. asylum po licy and processes over the years can be seen broadly as attempts to strike the appropriate balance between these two goals. Periods marked by increasing levels of asylum-seeking pose particular challenges and may elicit a variety of policy responses. Faced with an influx of Central Americans seeking asylum at the southern U.S. border, the Trump Administration has put forth policies to tighten the asylum system (see, for example, the \" 2018 Interim Final Rule \" and \" DHS Migrant Protection Protocols \" sections of this report); these policies typically have been met with court challenges. This report explores the landscape of U.S. asylum policy through an analysis of current asylum processes, available data, legislative and regulatory history, recent legislative and presidential proposals, and selected policy questions."], "subsections": []}, {"section_title": "What is Asylum?", "paragraphs": ["In common usage, the word asylum often refers to protection or safety. In the immigration context, however, it has a narrower meaning. The Immigration and Nationality Act (INA) of 1952, as amended, provides for the granting of asylum to an alien who applies for such relief in accordance with applicable requirements and is determined to be a refugee . The INA defines a refugee, in general, as a person who is outside his or her country of nationality and is unable or unwilling to return to, or to avail himself or herself of the protection of, that country because of persecution or a well-founded fear of persecution based on one of five protected grounds: race, religion, nationality, membership in a particular social group, or political opinion. Asylum can be granted by the Department of Homeland Security's (DHS's) U.S. Citizenship and Immigration Services (USCIS) or the Department of Justice's (DOJ's) Executive Office for Immigration Review (EOIR), depending on the type of application filed (see \" Asylum Application Process \"). ", "The INA distinguishes between applicants for refugee status and applicants for asylum by their physical location. Refugee applicants are outside the United States, while applicants for asylum are physically present in the United States or at a land border or port of entry. After one year as a refugee or asylee (a person granted asylum), an individual can apply to be become a U.S. lawful permanent resident (LPR)."], "subsections": []}, {"section_title": "Overview of Current Asylum Provisions", "paragraphs": ["With some exceptions, aliens who are in the United States or who arrive in the United States, regardless of immigration status, may apply for asylum. This summary describes the asylum process for an adult applicant. ", "As discussed in the next section of the report, asylum may be granted by a USCIS asylum officer or an EOIR immigration judge. There are no numerical limitations on asylum grants. In order to receive asylum, an alien must establish that he or she meets the INA definition of a refugee, among other requirements. Certain aliens, such as those who are determined to pose a danger to U.S. security, are ineligible for asylum. An asylum applicant who is not otherwise eligible to work in the United States may apply for employment authorization 150 days after filing a completed asylum application and may receive such authorization 180 days after the application filing date. ", "An alien who has been granted asylum is authorized to work in the United States and may receive approval to travel abroad. A grant of asylum does not expire, but it may be terminated under certain circumstances, such as if an asylee is determined to no longer meet the INA definition of a refugee. After one year of physical presence in the United States as an asylee, an alien may be granted LPR status, subject to certain requirements. There are no numerical limitations on the adjustment of status of asylees to LPR status.", "Special asylum provisions apply to certain aliens without proper documentation who are determined to be subject to a streamlined removal process known as expedited removal. To be considered for asylum, these aliens must first be determined by a USCIS asylum officer to have a credible fear of persecution. Those determined to have a credible fear may apply for asylum during standard removal proceedings. (See \" Inspection of Arriving Aliens .\")"], "subsections": []}, {"section_title": "Asylum Application Process", "paragraphs": ["Applications for asylum are either defensive or affirmative. A different set of procedures applies to each type of application. "], "subsections": [{"section_title": "Affirmative Asylum", "paragraphs": ["An asylum application is affirmative if an alien who is physically present in the United States (and not in removal proceedings) submits an application for asylum to DHS's USCIS. An alien may file an affirmative asylum application regardless of his or her immigration status, subject to applicable restrictions. There is no fee to apply for asylum. ", " Figure 1 shows the number of new affirmative asylum applications filed with USCIS since FY1995, the year filings reached their historical high point. The years included in this figure and in the subsequent figures and tables differ due to the availability of data from the relevant agencies. The data displayed in Figure 1 are for applications, not individuals; an application may include a principal applicant and dependents. Figure 1 reflects the impact of various factors. For example, reforms in the mid-1990s, which made the asylum system more restrictive, contributed to the decline in applications in the earlier years shown. A contributing factor to the application increases in the later years depicted in Figure 1 was the influx of unaccompanied alien children from Central America seeking asylum. (See Appendix A for underlying data and data on the top 10 nationalities filing affirmative asylum applications.) ", "The INA prohibits the granting of asylum until the identity of the asylum applicant has been checked against appropriate records and databases to determine if he or she is inadmissible or deportable, or ineligible for asylum. As part of the affirmative asylum process, applicants are scheduled for fingerprinting appointments. The fingerprints are used to confirm the applicant's identity and perform background and security checks. ", "Asylum applicants are interviewed by USCIS asylum officers. In scheduling asylum interviews, the USCIS Asylum Division is currently giving priority to applications that have been pending for 21 days or less. According to USCIS, \"Giving priority to recent filings allows USCIS to promptly place such individuals into removal proceedings, which reduces the incentive to file for asylum solely to obtain employment authorization.\"", "Under DHS regulations, the asylum interview is to be conducted in \"a nonadversarial manner.\" The applicant may bring counsel or a representative to the interview, present witnesses, and submit other evidence. After the interview, the applicant or the applicant's representative can make a statement."], "subsections": [{"section_title": "USCIS Decisions on Affirmative Asylum Applications", "paragraphs": ["An asylum officer's decision on an application is reviewed by a supervisory asylum officer, who may refer the case for further review. If an asylum officer ultimately determines that an applicant is eligible for asylum, the applicant receives a letter and form documenting the grant of asylum.", "If the asylum officer determines that an applicant is not eligible for asylum and the applicant has immigrant status, nonimmigrant status, or temporary protected status (TPS), the asylum officer denies the application. If the asylum officer determines than an applicant is not eligible for asylum and the applicant appears to be inadmissible or deportable under the INA, however, DHS regulations direct the officer to refer the case to an immigration judge for adjudication in removal proceedings. In those proceedings, the immigration judge evaluates the asylum claim independently as a defensive application for asylum. ", " Figure 2 presents data on affirmative asylum applications considered by USCIS since FY2009. It shows four separate outcome categories. Closures are cases administratively closed for reasons such as abandonment or lack of jurisdiction. A closure in one fiscal year in Figure 2 could have been refiled or reopened in a subsequent year. Figure 2 shows that a majority of cases were referred to an immigration judge each year. These referrals included both applicants who were interviewed by USCIS and applicants who were not (e.g., they did not appear for the interview). (See Table B-1 for underlying data and additional detail. )"], "subsections": []}]}, {"section_title": "Defensive Asylum", "paragraphs": ["An asylum application is defensive when the applicant is in standard removal proceedings in immigration court and requests asylum as a defense against removal. Figure 3 provides data on defensive asylum applications filed since FY2009. The data include both cases that originated as defensive cases as well as cases that were first filed as affirmative applications with USCIS, as described in the preceding section. (See Table C-1 for underlying data and additional detail.) ", "There are different ways that an alien can be placed in standard removal proceedings. An alien who is living in the United States can be charged by DHS with violating immigration law. In such a case, DHS initiates removal proceedings when it serves the alien with a Notice to Appear before an immigration judge. ", "Another way to be placed in standard removal proceedings relates to the statutory expedited removal and credible fear screening provisions discussed more fully below (see \" Inspection of Arriving Aliens \"). Under the INA, an individual who is determined by DHS to be inadmissible to the United States because he or she lacks proper documentation or has committed fraud or willful misrepresentation of facts to obtain documentation or another immigration benefit (and thus is subject to expedited removal) and expresses the intent to apply for asylum or a fear of persecution is to be interviewed by an asylum officer to determine if he or she has a credible fear of persecution. Credible fear of persecution means that \"there is a significant possibility, taking into account the credibility of the statements made by the alien in support of the alien's claim and such other facts as are known to the officer, that the alien could establish eligibility for asylum.\" If the alien is found to have a credible fear, the asylum officer is to refer the case to an immigration judge for a full hearing on the asylum request during removal proceedings. ", " Figure 4 provides data on USCIS credible fear findings since FY1997. For each year, it shows the number of credible fear cases referred to and completed by USCIS and the outcomes of the completed cases. Closed cases are cases in which a credible fear determination was not made. (See Table B-2 and Table B-3 for underlying data and additional detail.) "], "subsections": [{"section_title": "EOIR Decisions on Defensive Asylum Applications", "paragraphs": ["During a removal proceeding, an attorney from DHS's Immigration and Customs Enforcement (ICE) presents the government's case for removing the alien, the alien or their representative may present evidence on the alien's behalf and cross examine witnesses, and an immigration judge from EOIR determines whether the alien should be removed. An immigration judge's removal decision is generally subject to administrative and judicial review.", " Figure 5 presents data on EOIR decisions in defensive asylum cases since FY2009. (See Appendix D for underlying data and data for defensive cases that began with a credible fear claim. ) Figure 5 shows a sharp drop in administrative closures since FY2016. Administrative closing \"allows the removal of cases from the immigration judge's calendar in certain circumstances\" but \"does not result in a final order\" in the case; cases that are administratively closed can be reopened. Administrative closure has been used, for example, when an alien has a pending application for relief from another agency. In May 2018, Attorney General Jeff Sessions ruled that immigration judges and the BIA do not have general authority to administratively close cases. "], "subsections": []}]}]}, {"section_title": "Evolution of U.S. Asylum Policy", "paragraphs": ["The INA, as originally enacted, did not contain refugee or asylum provisions. Language on the conditional entry of refugees was added by the INA Amendments of 1965. The 1965 act authorized the conditional entry of aliens, who were to include those who demonstrated to DOJ's Immigration and Naturalization Service (INS) that", "(i) because of persecution or fear of persecution on account of race, religion, or political opinion they have fled (I) from any Communist or Communist-dominated country or area, or (II) from any country within the general area of the Middle East, and (ii) are unable or unwilling to return to such country or area on account of race, religion, or political opinion, and (iii) are not nationals of the countries or areas in which their application for conditional entry is made.", "In 1968, the United States acceded to the 1967 United Nations Protocol Relating to the Status of Refugees (Protocol). The Protocol incorporated the 1951 United Nations Convention Relating to the Status of Refugees (Convention), which the United States had not previously been a party to, and expanded the Convention's definition of a refugee. The Convention had defined a refugee in terms of events occurring before January 1951. The Protocol eliminated that date restriction. It also provided that the refugee definition would apply without geographic limitation, while allowing for some exceptions. With the changes made by the Protocol, a refugee came to be defined as a person who \"owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country.\"", "The Protocol retained other elements of the Convention, including the latter's prohibition on refoulement (or forcible return), a fundamental asylum concept. Specifically, the Convention prohibited states from expelling or returning a refugee \"to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion.\"", "In the 1970s, INS issued regulations that established procedures for applying for asylum in the United States and for adjudicating asylum applications. For example, a 1974 rule provided that an asylum applicant could include his or her spouse and unmarried minor children on the application and that INS could deny or approve an asylum application as a matter of discretion."], "subsections": [{"section_title": "Refugee Act of 1980", "paragraphs": ["Despite the U.S. accession to the 1967 U.N. Protocol, the INA did not include a conforming definition of a refugee or a mandatory nonrefoulement provision until the enactment of the Refugee Act of 1980. As noted, the 1965 conditional entry provisions incorporated a refugee definition that was limited by type of government and geography. A 1999 INS report explained a goal of the Refugee Act as being \"to establish a politically and geographically neutral adjudication for both asylum status and refugee status, a standard to be applied equally to all applicants regardless of country of origin.\"", "The definition of a refugee, as added to the INA by the 1980 act, reads, in main part:", "(A) any person who is outside any country of such person's nationality ... and who is unable or unwilling to return to, and is unable or unwilling to avail himself or herself of the protection of, that country because of persecution or a well-founded fear of persecution on account of race, religion, nationality, membership in a particular social group, or political opinion.", "(This first part of the definition of a refugee has not changed since enactment of the Refugee Act.)"], "subsections": [{"section_title": "Asylum Process", "paragraphs": ["As explained by INS Acting Commissioner Doris Meissner at a 1981 Senate hearing, the primary focus of the Refugee Act of 1980 was the refugee process. According to Meissner's written testimony, \"The asylum process was looked upon as a separate and considerably less significant subject.\" In keeping with this secondary status, the asylum provisions added by the 1980 act to the INA (as INA \u00a7208) comprised three short paragraphs. The first directed the Attorney General to establish asylum application procedures for aliens physically present in the United States or arriving at a land border or port of entry, regardless of immigration status, and gave the Attorney General discretionary authority to grant asylum to aliens who met the newly added INA definition of a refugee. The second paragraph allowed for the termination of asylum status if the Attorney General determined that the alien no longer met the INA definition of a refugee due to \"a change in circumstances\" in the alien's home country. The third paragraph provided for the granting of asylum status to the spouse and children of an alien granted asylum. "], "subsections": []}, {"section_title": "Adjustment of Status", "paragraphs": ["Separate language in the Refugee Act added a new Section 209 to the INA on refugee and asylee adjustment of status. Adjustment of status is the process of acquiring LPR status in the United States. The asylee provisions granted the Attorney General discretionary authority to adjust the status of an alien who had been physically present in the United States for one year after being granted asylum and met other requirements, subject to an annual numerical limit of 5,000."], "subsections": []}, {"section_title": "Withholding of Deportation", "paragraphs": ["The Refugee Act amended an INA provision on withholding of deportation, making it consistent with the nonrefoulement language in the Convention. The INA provision in effect prior to the enactment of the Refugee Act \"authorized\" the Attorney General to withhold the deportation of an alien in the United States (other than an alien involved in Nazi-related activity) to \"any country in which in his opinion the alien would be subject to persecution on account of race, religion or political opinion.\" The Refugee Act revised this language to prohibit the Attorney General from deporting or returning any alien to a country where the Attorney General determines the alien's life or freedom would be threatened because of the alien's race, religion, nationality, membership in a particular social group, or political opinion. It also added exclusions beyond the one for participation in Nazi-related activity. Specifically, the new provision made an alien ineligible for withholding if the alien had participated in the persecution of another person based on race, religion, nationality, membership in a particular social group, or political opinion; the alien had been convicted of a \"particularly serious crime\" and thus was a danger to the United States; there existed \"serious reasons for considering that the alien had committed a serious nonpolitical crime outside the United States,\" or there existed \"reasonable grounds\" for considering the alien a danger to national security. (For subsequent changes to this provision, see \" Withholding of Removal .\") "], "subsections": []}]}, {"section_title": "1980 Interim Regulations", "paragraphs": ["INS published interim regulations in June 1980 to implement the Refugee Act's provisions on refugee and asylum procedures. The asylum regulations included the following:", "INS district directors had jurisdiction over all requests for asylum except for those made by aliens in exclusion or deportation proceedings. An alien whose application for asylum was denied by the district director could renew the asylum request in exclusion or deportation proceedings. The applicant had the burden of proof to establish eligibility for asylum. The asylum applicant would be examined in person by an immigration officer or an immigration judge. The district director (or the immigration judge) would request an advisory opinion on the asylum application from the Department of State's (DOS's) Bureau of Human Rights and Humanitarian Affairs (BHRHA). The district director could grant work authorization to an asylum applicant who filed a \"non-frivolous\" application. The district director's decision on an asylum application was discretionary. The district director would deny an asylum application for various reasons, including that the alien had been firmly resettled in another country; the alien had participated in the persecution of another person based on race, religion, nationality, membership in a particular social group, or political opinion; the alien had been convicted of a \"particularly serious crime\" and thus was a danger to the United States; there existed \"serious reasons for considering that the alien had committed a serious non-political crime outside the United States;\" or there existed \"reasonable grounds\" for considering the alien a danger to national security. An initial grant of asylum was for one year and could be extended in one-year increments. Asylum status could be terminated for various reasons, including changed conditions in the asylee's home country."], "subsections": []}, {"section_title": "1990 Final Rule", "paragraphs": ["There was much discussion and debate about asylum in the 1980s, as related legislation and regulations were proposed, court cases were litigated, and the number of applications increased. In addition, in a 1983 internal DOJ reorganization, EOIR was established as a separate DOJ agency to administer the U.S. immigration court system. It combined the Board of Immigration Appeals (BIA) with the INS immigration judge function. With the creation of EOIR, the immigration courts became independent of INS.", "It was not until July 1990 that INS published a final rule to revise the 1980 interim regulations on asylum procedures. According to the supplementary information to the 1990 rule, the asylum policy established by the rule reflected two core principles: \"A fundamental belief that the granting of asylum is inherently a humanitarian act distinct from the normal operation and administration of the immigration process; and a recognition of the essential need for an orderly and fair system for the adjudication of asylum claims.\"", "The 1990 final rule created the position of asylum officer within INS to adjudicate asylum applications. As described in the supplementary information to a predecessor 1988 proposed rule, asylum officers were intended to be \"a specially trained corps\" that would develop expertise over time, with the expected result of greater uniformity in asylum adjudications. Under the 1990 rule, asylum applications filed with the district director were to be forwarded to the asylum officer with jurisdiction in the district. ", "Under the 1990 rule, comments on asylum applications by DOS\u2014a standard part of the adjudication process under the 1980 interim regulations\u2014became optional. (In an earlier, related development, DOS announced that as of November 1987 it would no longer be able to provide an advisory opinion on every asylum application due to budget constraints and would focus on those cases where it thought it could provide input not available from other sources. )", "The 1990 rule distinguished between asylum claims based on actual past persecution and on a well-founded fear of future persecution. To establish a well-founded fear of future persecution, the rule required, in part, that an applicant establish that he or she fears persecution in his or her country based on one of the five protected grounds and that \"there is a reasonable possibility of actually suffering such persecution\" upon return. The rule further detailed the \"burden of proof\" requirements for asylum applicants. It provided that the applicant's own testimony alone may be sufficient to prove that he or she meets the definition of a refugee. It also stated that an applicant could show a well-founded fear of persecution on one of the protected grounds without proving that he or she would be persecuted individually, if the applicant could establish \"that there is a pattern or practice\" of persecution of similarly situated individuals in his or her home country and that he or she is part of such a group. ", "The 1990 rule provided that a grant of asylum to a principal applicant would be for an indefinite period. It also provided that the grant of asylum to a principal applicant's spouse and children would be indefinite, unless the principal's asylum status was revoked. ", "Under the 1990 rule, an application for asylum was also to be considered an application for withholding of deportation; in cases of asylum denials, the asylum officer was required to decide whether the applicant was entitled to withholding of deportation. A 1987 proposed rule would have made asylum officers' decisions on asylum and withholding of deportation applications binding on immigration judges. That change was not retained in the 1990 final rule, however, which preserved immigration judges' role in adjudicating asylum and withholding of deportation claims in exclusion or deportation proceedings. Regarding eligibility for withholding of deportation, the 1990 rule stated, in part, \"The applicant's life or freedom shall be found to be threatened if it is more likely than not that he would be persecuted on account of race, religion, nationality, membership in a particular social group, or political opinion.\"", "The 1990 rule directed the asylum officer to grant an undetained asylum applicant employment authorization for up to one year if the officer determined that the application was not frivolous; frivolous was defined as \"manifestly unfounded or abusive.\" The employment authorization could be renewed in increments of up to one year. The asylum officer had to provide an applicant with a written decision on an asylum or withholding of deportation application, and had to provide an explanation in the case of a denial. The 1990 rule also granted specified officials in INS and DOJ the authority to review the decisions of asylum officers but did not grant applicants any right to appeal to these officials."], "subsections": []}, {"section_title": "Acts of 1990 and 1994", "paragraphs": ["The Immigration Act of 1990 and the Violent Crime Control and Law Enforcement Act of 1994 made several changes to the asylum-related provisions in the INA. The 1990 act amended INA \u00a7209 to increase the annual numerical limitation on asylee adjustment of status from 5,000 to 10,000. It also added new language to INA \u00a7208, making an alien who had been convicted of a crime categorized as an aggravated felony under the INA ineligible for asylum. The 1994 act further amended INA \u00a7208 to state that an asylum applicant was not entitled to employment authorization except as provided at the discretion of the Attorney General by regulation."], "subsections": []}, {"section_title": "1994 Final Rule", "paragraphs": ["In March 1994, INS published a proposed rule to streamline its asylum procedures that included a number of controversial provisions. The agency characterized the problem the proposal sought to address as follows: \"The existing system for adjudicating asylum claims cannot keep pace with incoming applications and does not permit the expeditious removal from the United States of those persons who[se] claims fail.\"", "The 1994 final rule, published in December 1994, made fundamental changes to the asylum adjudication process. Under the rule, INS asylum officers were no longer to deny asylum applications filed by aliens who appeared to be excludable or deportable, or to consider applications for withholding of deportation from such applicants, with limited exceptions. Instead, officers were to either grant such applicants asylum or immediately refer their claims to immigration judges, where the claims would be considered as part of exclusion or deportation proceedings. Asylum officers were to continue to issue approvals and denials in cases of asylum applications filed by aliens with a legal immigration status.", "The 1994 rule also made changes to the employment authorization process for asylum applicants that were intended to \"discourage applicants from filing meritless claims solely as a means to obtain employment authorization.\" Under the rule, an alien had to wait 150 days after his or her complete asylum application had been received to apply for employment authorization. INS then had 30 days to adjudicate that employment authorization application. (These 150-day and 30-day time frames remain in regulation. ) According to the supplementary information accompanying the rule, the goal was to make a decision on an asylum application before the end of 150 days: \"The Immigration and Naturalization Service (INS) and the Executive Office for Immigration Review (EOIR) would strive to complete the adjudication of asylum applications, through the decision of an immigration judge, within this 150-day period.\" ", "Some of the provisions in the proposed rule were not adopted in the final rule. These included proposals to make asylum interviews discretionary and to charge fees for asylum applications and initial applications for employment authorization."], "subsections": []}, {"section_title": "Illegal Immigration Reform and Immigrant Responsibility Act and Implementing Regulations", "paragraphs": ["The Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) of 1996 significantly amended the INA's asylum provisions and made a number of other changes to the INA relevant to asylum policy. Many of the IIRIRA changes remain in effect. ", "One set of changes, which had broad implications for the immigration system generally, concerned the INA grounds of exclusion. Applicable to aliens outside the United States, these provisions enumerated classes of aliens who were ineligible for visas and were to be excluded from admission. IIRIRA amended these provisions and replaced the concept of an excludable alien with that of an inadmissible alien\u2014the latter being a person who, whether outside or inside the United States, has not been lawfully admitted to the country. In general, with the enactment of IIRIRA, an alien became ineligible for a visa or admission if he or she was described in the reconfigured grounds of inadmissibility."], "subsections": [{"section_title": "Asylum Provisions", "paragraphs": ["IIRIRA added restrictions to the general policy set forth in the 1980 Refugee Act and incorporated into the INA that an alien who is present in the United States or who arrives in the United States, regardless of immigration status, can apply for asylum. In general, under the IIRIRA amendments, which remain in effect, an alien is not eligible to apply for asylum unless the alien can show that he or she filed the application within one year of arriving in the United States. An alien is also generally ineligible to apply if he or she has previously had an asylum application denied. There is an exception to both restrictions if an alien can show \"changed circumstances which materially affect the applicant's eligibility for asylum,\" and an additional exception to the time limit requirement if the alien can show \"extraordinary circumstances\" related to the filing delay . IIRIRA also made an alien ineligible to apply for asylum if the Attorney General determined that the alien could be removed, pursuant to a bilateral or multilateral agreement, to a safe third country where the alien would be considered for asylum or equivalent temporary protection (see \" Safe Third Country Agreements \").", "IIRIRA amended the INA to authorize, but not require, the Attorney General to impose fees on asylum applications and related applications for employment authorization. Among other new asylum provisions it added to the INA were a requirement to check the identity of applicants against \"all appropriate records or databases maintained by the Attorney General and by the Secretary of State\" and a permanent bar to receiving any immigration benefits for aliens who knowingly file frivolous asylum applications after being notified of the consequences for doing so. IIRIRA also put asylum processing-related time frames in statute, including a requirement that \"in the absence of exceptional circumstances,\" administrative adjudication of an asylum application be completed within 180 days after the filing date. All these provisions are still in statute. ", "IIRIRA modified and codified some existing and prior asylum regulations. It amended an existing INA provision on employment authorization by adding language prohibiting an asylum applicant who is not otherwise eligible for employment authorization from being granted such authorization earlier than 180 days after filing the asylum application. It further amended the INA asylum provisions to add grounds for denying asylum. Similar to the mandatory denial language in the 1980 interim regulations, these grounds included an applicant's conviction for a \"particularly serious crime,\" \"serious reasons for believing the alien has committed a serious nonpolitical crime outside the United States,\" \"reasonable grounds\" for considering the alien a danger to national security, and the applicant's firm resettlement in another country prior to arrival in the United States. IIRIRA also added, as a new asylum denial ground, being inadmissible to the United States on certain terrorist-related grounds. In addition, IIRIRA provided that the Attorney General could establish additional ineligibilities for asylum by regulation that were consistent with the INA asylum provisions. These IIRIRA amendments remain a part of the INA, although the provision on terrorist-related grounds of inadmissibility has been revised. ", "IIRIRA amended the INA language on termination of asylum to state that the granting of asylum \"does not convey a right to remain permanently in the United States.\" It also added new termination grounds to the existing ground of no longer meeting the INA definition of a refugee. IIRIRA provided that asylum could be terminated if the Attorney General determined that the asylee met one of the grounds for denying asylum noted in the preceding paragraph. Among IIRIRA's other new grounds for terminating asylum was a determination by the Attorney General, analogous to the \"safe third country\" determination described above, that the alien could be removed, pursuant to a bilateral or multilateral agreement, to a safe third country where the alien would be eligible for asylum or equivalent temporary protection. The IIRIRA asylum termination provisions remain part of the INA."], "subsections": []}, {"section_title": "Definition of a Refugee", "paragraphs": ["IIRIRA amended the INA definition of a refugee to cover individuals subject to \"coercive population control.\" It provided that for purposes of meeting the definition of a refugee, an individual who had been forced to have an abortion or undergo sterilization or had been persecuted for resistance to a coercive population control program would be considered to have been persecuted on the basis of political opinion. Similarly, an individual with a well-founded fear that he or she would be forced to undergo a procedure or would be persecuted for resistance to a coercive population control program would be considered to have a well-founded fear of persecution on the basis of political opinion. This language remains part of the INA definition of a refugee."], "subsections": []}, {"section_title": "Inspection of Arriving Aliens", "paragraphs": ["IIRIRA amended the INA provisions on the inspection of aliens by immigration officers to establish a new immigration enforcement mechanism known as expedited removal. In general, under expedited removal an alien who is determined by an immigration officer to be inadmissible to the United States because the alien lacks proper documentation or has committed fraud or willful misrepresentation of facts to obtain documentation or another immigration benefit may be removed from the United States without any further hearings or review, unless the alien indicates either an intention to apply for asylum or a fear of persecution. ", "Under the INA, as amended by IIRIRA, this expedited removal procedure was to be applied to all arriving aliens , a term that includes aliens arriving at a U.S. port of entry. (An exception for Cuban citizens arriving at U.S. ports of entry by aircraft is no longer in effect. ) It also could be applied to any (or all) aliens in the United States, as designated by the Attorney General at his or her discretion, if an alien has not been admitted or paroled into the United States and \"has not affirmatively shown, to the satisfaction of an immigration officer, that the alien has been physically present in the United States continuously for the 2-year period immediately prior to the date of the determination of inadmissibility.\" Using this statutory authority, the application of expedited removal has been expanded to classes of aliens beyond arriving aliens (see \" Implementing Regulations \").", "Under the IIRIRA amendments, an alien who is subject to expedited removal and expresses the intent to apply for asylum or a fear of persecution is to be interviewed by an asylum officer to determine if the alien has a credible fear of persecution. (Special procedures apply to aliens arriving in the United States at a U.S.-Canada land port of entry in accordance with a U.S.-Canada agreement; see \" Safe Third Country Agreements .\") Under the INA, credible fear of persecution means that \"there is a significant possibility, taking into account the credibility of the statements made by the alien in support of the alien's claim and such other facts as are known to the officer, that the alien could establish eligibility for asylum.\" If an alien is found to have a credible fear, the asylum officer is to refer the case to an immigration judge for full consideration of the asylum request during standard removal proceedings. If an alien is found not to have a credible fear, the alien may request that an immigration judge review the negative finding. To ultimately receive asylum, however, an alien must meet the higher standard of showing past persecution or a well-founded fear of future persecution. "], "subsections": []}, {"section_title": "Withholding of Removal", "paragraphs": ["As part of a larger set of changes to the INA replacing the concept of deportation with removal, IIRIRA added a withholding of removal provision (INA \u00a7241(b)(3)) to replace the existing INA withholding of deportation provision. The new withholding of removal provision stated, and continues to state, in main part, that \"the Attorney General may not remove an alien to a country if the Attorney General decides that the alien's life or freedom would be threatened in that country because of the alien's race, religion, nationality, membership in a particular social group, or political opinion.\" The IIRIRA provision retained language on ineligibility for withholding that had been enacted in 1980. It also included language on treatment of aggravated felonies for purposes of ineligibility for withholding of removal. The IIRIRA amendments on ineligibility for withholding of removal remain in current law. ", "Some of the same ineligibility grounds apply to applicants for withholding of removal and applicants for asylum. As noted, however, asylum is also subject to a second set of restrictions, under which certain individuals are ineligible to apply for this form of relief. These restrictions include the requirement to apply for asylum within one year after arrival in the United States. Withholding of removal is not subject to an analogous set of restrictions. Another difference between withholding of removal and asylum concerns adjustment to LPR status. The INA provides for the adjustment of status of aliens granted asylum but not those granted withholding of removal (for further comparison of withholding of removal and asylum, see \" Implementing Regulations ,\" below)."], "subsections": []}, {"section_title": "Implementing Regulations", "paragraphs": ["In March 1997, DOJ issued an interim rule, effective April 1, 1997, to amend existing regulations to implement the IIRIRA provisions on asylum, withholding of removal, expedited removal, and other immigration procedures. In December 2000, DOJ published a final rule on asylum procedures, which addressed jurisdiction, asylum application procedures, and withholding of removal, among other issues. ", "The December 2000 rule included language on eligibility for asylum and eligibility for withholding of removal under INA \u00a7241(b)(3). Regarding eligibility for asylum based on a well-founded fear of future persecution, the 2000 regulations stated, in part, \"An applicant has a well-founded fear of persecution if: (A) The applicant has a fear of persecution in his or her country of nationality \u2026 on account of race, religion, nationality, membership in a particular social group, or political opinion; (B) There is a reasonable possibility of suffering such persecution if he or she were to return to that country.\" This language was similar to that in the 1990 rule. Unlike the earlier rule, however, the 2000 regulations also provided that an applicant would not be considered to have a well-founded fear of persecution if he or she could relocate within his or her home country \"if under all the circumstances it would be reasonable to expect the applicant to do so.\"", "Regarding eligibility for withholding of removal under INA \u00a7241(b)(3) based on a future threat to one's life or freedom, the 2000 regulations, like the earlier 1990 regulations on withholding of deportation, stated that an applicant could demonstrate a future threat \"if he or she can establish that it is more likely than not that he or she would be persecuted on account of race, religion, nationality, membership in a particular social group, or political opinion upon removal to that country.\" As with the regulations on asylum eligibility, the 2000 regulations on eligibility for withholding of removal provided that an applicant could not demonstrate a threat to life or freedom upon a finding that the applicant could avoid the threat by relocating within his or her home country if it were reasonable to expect him or her to do so. ", "The December 2000 regulations on eligibility for asylum and withholding of removal under INA \u00a7241(b)(3) remain in effect. Comparing the above-cited standards for providing these two forms of relief in cases involving claims of future persecution, the threshold for granting withholding of removal ( more likely than not ) is higher than that for granting asylum ( reasonable possibility ).", "Regarding expedited removal, DOJ stated in the supplementary information to the March 1997 interim rule that for the time being, it would only apply the expedited removal provisions to arriving aliens (i.e., aliens arriving at ports of entry and certain others). At the same time, it reserved \"the right to apply the expedited removal procedures to additional classes of aliens within the limits set by the statute, if, in the [INS] Commissioner's discretion, such action is operationally warranted.\"", "Beginning in 2002, DOJ and then DHS, which assumed primary responsibility for immigration under the Homeland Security Act, acted to apply the expedited removal procedures to additional classes of aliens. In November 2002, DOJ extended expedited removal to aliens arriving by sea who are not admitted or paroled and who have not been continuously present in the United States for the prior two years. In August 2004, DHS authorized the placing in expedited removal proceedings of aliens who are present in the United States without having been admitted or paroled, and are found inadmissible due to lack of proper documentation or to commission of fraud or willful misrepresentation to obtain documentation or another immigration benefit, in certain circumstances. These circumstances were that the aliens \"are encountered by an immigration officer within 100 air miles of the U.S. international land border\" and \"have not established to the satisfaction of an immigration officer that they have been physically present in the United States continuously for the fourteen-day (14-day) period immediately prior to the date of encounter.\" "], "subsections": []}]}, {"section_title": "Convention Against Torture Protection and Implementing Regulations", "paragraphs": ["Separate from asylum and withholding of removal under the INA, protection from removal is available to aliens in the United States who are more likely than not to be tortured in the country of removal, in accordance with the United Nations Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (Convention Against Torture, or CAT), which entered into force for the United States in November 1994. Under Article 3 of the CAT, \"No State Party shall expel, return (\"refouler\") or extradite a person to another State where there are substantial grounds for believing that he would be in danger of being subjected to torture.\" Under current DHS and DOJ regulations, torture is defined, in part, as \"any act by which severe pain or suffering, whether physical or mental, is intentionally inflicted on a person \u2026 when such pain or suffering is inflicted by or at the instigation of or with the consent or acquiescence of a public official or other person acting in an official capacity.\" In February 1999, DOJ published an interim rule establishing procedures to implement U.S. obligations under Article 3 of the CAT in the removal process. These regulations have since been revised. ", "DHS regulations set forth procedures for handling cases in which an alien subject to expedited removal expresses a fear of torture. In a process analogous to that for aliens subject to expedited removal who express a fear of persecution, DHS regulations provide that such an alien is to be interviewed by an asylum officer to determine if he or she has a credible fear of torture. To establish a credible fear of torture, an alien must show that \"there is a significant possibility that he or she is eligible for\" protection under the CAT. Eligibility for CAT protection, unlike for asylum, does not require the showing of a nexus between the torture claim and a protected ground (such as race). If the asylum officer makes an affirmative credible fear finding, the officer is to refer the case to an immigration judge for full consideration of the CAT application during standard removal proceedings. If the officer makes a negative finding, the alien may request a review of that determination by an immigration judge. If during removal proceedings the immigration judge determines that \"the alien is more likely than not to be tortured in the country of removal,\" the alien is entitled to CAT protection. That protection is to be granted in the form of either withholding of removal or deferral of removal depending on the circumstances of the case.", "The February 1999 CAT rule also established another screening process\u2014for reasonable fear of persecution or torture. Modeled on but separate from the credible fear of persecution or torture screening processes, reasonable fear screening applies to certain aliens who are not eligible for asylum (these are aliens ordered removed under INA \u00a7238(b) for the commission of certain criminal offenses or aliens whose deportation, exclusion, or removal is reinstated under INA \u00a7241(a)(5)). Under current DHS and DOJ regulations, if an alien in this category expresses a fear of returning to the country of removal, USCIS is to make a reasonable fear determination, subject to review by an immigration judge. To establish a reasonable fear of persecution, an alien must establish \"a reasonable possibility that he or she would be persecuted on account of his or her race, religion, nationality, membership in a particular social group or political opinion\"; this is the same standard used to establish eligibility for asylum. To establish a reasonable fear of torture, an alien must establish \"a reasonable possibility that he or she would be tortured in the country of removal.\" ", "If the alien receives a positive reasonable fear finding, the case is referred to an immigration judge to determine whether the alien is eligible for withholding of removal under INA \u00a7241(b)(3) or withholding of removal or deferral of removal under the CAT. DHS and DOJ regulations further state, however, that the granting of such withholding of removal or deferral of removal would not prevent the United States from removing the alien to a third country."], "subsections": []}, {"section_title": "Post-1996 Statutory Provisions", "paragraphs": ["While the IIRIRA amendments to the INA asylum provisions remain largely in place, subsequent laws have made further changes to the INA provisions. For example, the Real ID Act of 2005 amended the INA language on the conditions for granting asylum to add \"burden of proof\" provisions, which had previously been in regulations. These burden of proof provisions remain in law. They require an asylum applicant to show that \"race, religion, nationality, membership in a particular social group, or political opinion was or will be at least one central reason for persecuting the applicant\" to meet the definition of a refugee. The provisions further set forth standards for making determinations about an applicant's credibility and about the need for corroborating evidence to sustain an applicant's burden of proof. In addition, among its other asylum-related provisions, the Real ID Act eliminated the annual caps on asylee adjustment of status. The 2008 William Wilberforce Trafficking Victims Protection Reauthorization Act (TVPRA) added language to the INA asylum provisions that addressed asylum applications by unaccompanied alien children in the United States. This new language made certain statutory restrictions on applying for asylum inapplicable to these children and provided that a USCIS asylum officer would have initial jurisdiction over any asylum application filed by an unaccompanied child, even if the child was in removal proceedings."], "subsections": []}, {"section_title": "2018 Interim Final Rule", "paragraphs": ["On November 9, 2018, DHS and DOJ jointly issued an interim final rule to govern \"asylum claims in the context of aliens who are subject to, but contravene, a suspension or limitation on entry into the United States through the southern border with Mexico that is imposed by a presidential proclamation or other presidential order.\" That same day, President Donald Trump issued a proclamation to suspend immediately the entry into the United States of aliens who cross the Southwest border between ports of entry (see \" Presidential Action \"). According to the supplementary information accompanying the interim rule, the rule would serve to \"channel inadmissible aliens to ports of entry, where such aliens could seek to enter and would be processed in an orderly and controlled manner.\"", "The interim rule, which is not in effect due to legal challenges, would bar an alien who enters the United States in contravention of the proclamation from eligibility for asylum. Under the rule, an asylum officer would make a negative credible fear of persecution determination in the case of such an alien. As explained in the supplementary information to the rule, however, aliens who enter the United States at the Southwest border without inspection would continue to be eligible for consideration for forms of protection from removal other than asylum\u2014namely, withholding of removal under INA \u00a7241(b)(3) and protections under the CAT . The interim final rule addresses eligibility for asylum and screening procedures for aliens who enter the United States in contravention of the proclamation. Regarding claims for withholding of removal under the INA or withholding or deferral of removal under the CAT, the rule establishes that such claims would be assessed under the reasonable fear standard (see \" Convention Against Torture Protection and Implementing Regulations \"). The supplementary information includes the following summary of the two-stage screening protocol the rule would institute: ", "Aliens determined to be ineligible for asylum by virtue of contravening a proclamation, however, would still be screened, but in a manner that reflects that their only viable claims would be for statutory withholding or CAT protection\u2026. After determining the alien's ineligibility for asylum under the credible-fear standard, the asylum officer would apply the long-established reasonable-fear standard to assess whether further proceedings on a possible statutory withholding or CAT protection claim are warranted.", "This rule is being challenged in federal court. On December 19, 2018, a federal district court judge in California granted a nationwide preliminary injunction against it. "], "subsections": []}, {"section_title": "DHS Migrant Protection Protocols", "paragraphs": ["On December 20, 2018, DHS announced the Migrant Protection Protocols (MPP), under which \"individuals arriving in or entering the United States from Mexico\u2014illegally or without proper documentation\u2014may be returned to Mexico for the duration of their immigration proceedings.\" The U.S. government notified the Mexican government about the MPP that same day. The MPP is separate and distinct from a safe third country agreement (see \" Safe Third Country Agreements \").", "The DHS press release announcing the Migrant Protection Protocols characterized them as \"historic measures\" to address the \"illegal immigration crisis.\" In the words of the press release:", "Aliens trying to game the system to get into our country illegally will no longer be able to disappear into the United States, where many skip their court dates. Instead, they will wait for an immigration court decision while they are in Mexico. 'Catch and release' will be replaced with 'catch and return.' In doing so, we will reduce illegal migration by removing one of the key incentives that encourages people from taking the dangerous journey to the United States in the first place. This will also allow us to focus more attention on those who are actually fleeing persecution.", "According to DHS, the U.S. government will invoke INA \u00a7235(b)(2)(C), which permits the return of certain aliens arriving in the United States on land from a foreign contiguous territory to that foreign territory pending standard removal proceedings. An alien potentially subject to this return provision under the INA is an applicant for admission who \"is not clearly and beyond a doubt entitled to be admitted\" and thus is \"detained for a [standard removal] proceeding.\" INA \u00a7235(b)(2)(C) is explicitly inapplicable to aliens who are determined to be subject to expedited removal.", "On January 28, 2019, USCIS and DHS's Customs and Border Protection (CBP) issued memoranda on MPP implementation. The CBP memorandum announced that the agency would begin implementing the MPP that day. According to the memorandum, \"MPP implementation will begin at the San Ysidro port of entry [in California], and it is anticipated that it will be expanded in the near future.\" Also on January 28, 2019, CBP issued \"MPP Guiding Principles,\" which included the following: \"To implement the MPP, aliens arriving from Mexico who are amenable to the process \u2026 and who in an exercise of discretion the officer determines should be subject to the MPP process, will be issued [a] Notice to Appear (NTA) and placed into Section 240 removal proceedings. They will then be transferred to await proceedings in Mexico.\" Among the aliens identified as \" not amenable to MPP\" in the CBP guiding principles document are unaccompanied alien children, citizens or nationals of Mexico, aliens processed for expedited removal, and aliens who are more likely than not to face persecution or torture in Mexico. The MPP is in effect as of the date of this report, but it remains unclear how DHS is making decisions about which aliens to process under the protocols. The MPP is being challenged in federal court."], "subsections": []}]}, {"section_title": "Recent Legislative and Presidential Action", "paragraphs": [], "subsections": [{"section_title": "Legislation in the 115th Congress", "paragraphs": ["Asylum-related legislation was considered in the 115 th Congress. Two immigration bills that were the subjects of unsuccessful House floor votes in June 2018\u2014the Securing America's Future Act of 2018 ( H.R. 4760 ) and the Border Security and Immigration Reform Act of 2018 ( H.R. 6136 )\u2014contained similar provisions on asylum. A third asylum-related House bill (the Asylum Reform and Border Protection Act of 2017 ( H.R. 391 )) that included some of the same provisions as the above measures was ordered to be reported by the House Judiciary Committee. In addition, the House and the Senate acted on several other measures containing more limited language on asylum."], "subsections": [{"section_title": "H.R. 4760 and H.R. 6136", "paragraphs": ["H.R. 4760 and H.R. 6136 , as considered on the House floor, included various provisions related to asylum. Both bills would have amended the INA \"safe third country\" asylum provision, under which an alien is ineligible to apply for asylum if it is determined that he or she can be removed to a safe country \"pursuant to a bilateral or multilateral agreement\" (see \" Safe Third Country Agreements \"). H.R. 4760 and H.R. 6136 would have eliminated the \"pursuant to a bilateral or multilateral agreement\" language.", "Both bills would have added a new provision to the INA stating that an alien's asylum status would be terminated if the alien returned to his or her home country (from which the alien sought refuge in the United States) absent changed country conditions. Both bills would have given DHS discretionary authority to waive this provision in individual cases. H.R. 4760 also included an exception to this provision for certain Cubans.", "Both bills would have amended the INA provisions on frivolous asylum applications (see \" Frivolous or Fraudulent Asylum Claims \"). Current INA provisions make an alien permanently ineligible for immigration benefits if he or she knowingly files a frivolous asylum application after receiving notice of the consequences for doing so. The bills would have changed the notification process. They would have required that a written notice appear on the asylum application advising the applicant of the consequences of filing a frivolous application. The bills would also have added language to the INA explaining that an application is frivolous if \"it is so insufficient in substance that it is clear that the applicant knowingly filed the application solely or in part to delay removal from the United States, to seek employment authorization as an applicant for asylum\" or \"any of the material elements are knowingly fabricated.\"", "H.R. 4760 and H.R. 6136 also would have changed the INA definition of credible fear of persecution, which an alien in expedited removal has to show to be able to pursue an asylum claim. The bills would have added a new requirement to the definition\u2014that \"it is more probable than not that the statements made by, and on behalf of, the alien in support of the alien's claim are true.\" The bills would also have required audio or audio/visual recording of expedited removal and credible fear interviews."], "subsections": []}, {"section_title": "H.R. 391", "paragraphs": ["H.R. 391 , as ordered to be reported by the House Judiciary Committee, would have amended the INA provisions on safe third country removals, termination of asylum upon return to the home country, frivolous asylum applications, and credible fear similarly to H.R. 4760 and H.R. 6136 . In addition, this bill would have made a number of other changes to the asylum-related language in the INA. Among its asylum-related provisions, H.R. 391 would have clarified the INA definition of a refugee (which asylum applicants also have to satisfy), specifically the \"membership in a particular social group\" ground. It would have defined particular social group , which is not currently defined in statute, to mean a group that is \"defined with particularity,\" is \"socially distinct,\" and has members who share \"a common immutable characteristic.\" ", "H.R. 391 would have explicitly provided that the \"membership in a particular social group\" ground would cover individuals who fail or refuse \"to comply with any law or regulation that prevents the exercise of the individual right of that person to direct the upbringing and education of a child of that person (including any law or regulation preventing homeschooling).\" At the same time, the bill sought to prohibit the application of this ground to asylum cases involving criminal gang membership or activity.", "H.R. 391 also included language related to the INA asylum provisions that enumerate certain determinations about an alien that preclude the granting of asylum. One of these determinations is that the alien was \"firmly resettled in another country\" before coming to the United States and requesting asylum. H.R. 391 would have considered the \"firmly resettled\" criterion to be satisfied \"by evidence that the alien can live in such country (in any legal status) without fear of persecution.\""], "subsections": []}, {"section_title": "Other Bills", "paragraphs": ["Other bills that saw action in the 115 th Congress included more limited language on asylum. For example, the Criminal Alien Gang Member Removal Act ( H.R. 3697 ), as passed by the House, would have added a new item to the INA list of determinations that preclude the granting of asylum. It would have made an alien ineligible for asylum if he or she was inadmissible or deportable based on new INA criminal gang membership or criminal gang-related activity grounds that the bill would have established. Under H.R. 3697 , such an alien would also have been exempt from the INA restriction on removing an alien to a country where his or her life or freedom would be threatened based on race, religion, nationality, membership in a particular social group, or political opinion.", "Asylum-related provisions similar to those in H.R. 3697 were included in two other measures\u2014the Michael Davis, Jr. and Danny Oliver in Honor of State and Local Law Enforcement Act ( H.R. 2431 ), as ordered to be reported by the House Judiciary Committee, and the SECURE and SUCCEED Act ( S.Amdt. 1959 to H.R. 2579 ), which failed on a Senate floor vote in February 2018. In addition, these two measures would have made further changes to the INA's asylum-related provisions. They would have made aliens ineligible for asylum if they were inadmissible on a broader array of terrorist-related grounds and would have exempted aliens who were inadmissible on this larger set of terrorist grounds from the general INA restriction on removing an alien to a country where his or her life or freedom would be threatened.", "H.R. 2431 and S.Amdt. 1959 would also have amended the INA provisions on asylee adjustment of status to LPR status. Current INA provisions generally require that applicants for adjustment be admissible to the United States as immigrants, but they grant the Secretary of Homeland Security or the Attorney General broad authority to waive applicable inadmissibility provisions for humanitarian purposes. While there were significant differences among the asylee adjustment of status amendments in S.Amdt. 1959 and H.R. 2431 , both measures would have limited existing DHS/DOJ inadmissibility waiver authority and added new deportability-related requirements to the INA asylee adjustment of status provisions. "], "subsections": []}]}, {"section_title": "Presidential Action", "paragraphs": ["Citing constitutional and statutory authority, President Trump issued a presidential proclamation on November 9, 2018, to immediately suspend the entry into the United States of aliens who cross the Southwest border between ports of entry. The proclamation indicates that its entry suspension provisions will expire 90 days after its issuance date or on the date that the United States and Mexico reach a bilateral safe country agreement, whichever is earlier. Also on November 9, 2018, DHS and DOJ jointly issued an interim final rule to bar an alien who enters the United States in contravention of the proclamation from eligibility for asylum. The proclamation and the rule are being challenged in federal court (see \" 2018 Interim Final Rule \"). On February 7, 2019, President Trump renewed the proclamation with the issuance of a new proclamation with the same name."], "subsections": []}]}, {"section_title": "Selected Policy Issues", "paragraphs": ["Asylum is a complex area of immigration law and policy. Much of the recent debate surrounding it has focused on efforts by the Trump Administration to tighten the asylum system. Several key policy considerations about asylum are highlighted below. Some, such as the grounds for granting asylum, have been long-standing issues for policymakers, while others, such as safe third country agreements, have been garnering attention more recently."], "subsections": [{"section_title": "Asylum Backlog", "paragraphs": ["There has been much discussion about an increasing backlog of asylum applications. The term asylum backlog may suggest that there is a single queue of pending asylum cases. In fact, as discussed above, USCIS and EOIR separately adjudicate affirmative asylum cases and defensive asylum cases, respectively. ( Backlog as used in this report is synonymous with pending caseload .)", "The numbers of pending USCIS affirmative asylum applications and EOIR defensive asylum cases have varied over the years, impacted by factors including international developments, changes to U.S. immigration laws, and agency resources. In the case of affirmative applications, there have been significant fluctuations in the size of the backlog over the history of the asylum program. Since FY2009, however, backlogs of both USCIS affirmative asylum applications and EOIR cases have increased annually. At the end of FY2009, there were about 6,000 pending affirmative asylum applications at USCIS ; that number stood at about 320,000 at the end of FY2018. ", "During this same period, the number of pending cases before EOIR increased from about 224,000 at the end of FY2009 to about 786,000 at the end of FY2018. Not all the EOIR cases necessarily involve an asylum claim, however. According to EOIR, as of June 18, 2018, it had about 720,000 pending cases, and some 325,000 of those (about 45%) included asylum applications. ", "A variety of arguments are made for prioritizing the reduction of the asylum backlog. These include the need to preserve the integrity of the asylum process and to provide protection in a timely manner to legitimate asylum seekers. More controversial arguments for addressing the backlog center on the perceived need to eliminate an incentive for unauthorized aliens without valid asylum claims to enter the United States and file frivolous applications (see \" Frivolous or Fraudulent Asylum Claims \").", "Regarding the affirmative asylum backlog, USCIS described its January 2018 decision to interview more recent asylum applications before older filings as \"an attempt to stem the growth of the agency's asylum backlog.\" There is debate about whether this is an effective and judicious strategy. While some point to signs that this processing change is reducing the backlog, others argue that it is a wrongheaded approach and that USCIS should instead be dedicating more resources to adjudicating asylum cases. Those in the latter group argue that individuals with older, valid asylum claims will face even longer waits for relief under the last in-first out system. ", "DHS efforts to reduce the asylum backlog are also impacting other humanitarian admissions programs. According to the report Proposed Refugee Admissions for Fiscal Year 2019 , \"DHS in FY 2017 and FY 2018 shifted a significant proportion of its refugee officers to processing affirmative asylum applications and conducting credible fear and reasonable fear screenings. This reduced the number of refugee interviews that could be conducted abroad in those years.\" The report also indicates that the Administration plans to \"continue to shift some refugee officers to assist the Asylum Division\" in FY2019 to address the asylum backlog.", "Regarding the backlog of immigration court cases, the director of EOIR testified at an April 2018 Senate hearing that the agency was addressing challenges that had contributed to the backlog. In his prepared testimony, he cited the challenges of \"declining case completions, protracted hiring times for new immigration judges, and the continued use of paper files.\" ", "In June 2018 remarks at EOIR, Attorney General Sessions characterized the large and growing backlog of immigration court cases as unacceptable and outlined steps being taken to reduce it. In his prepared remarks, he asked each EOIR judge to complete at least 700 cases annually, which he described as \"about the average.\" He said, \"Setting this expectation is a rational management policy to ensure consistency, accountability, and efficiency in our immigration court system.\" He also explained that additional immigration judges were being hired and that DOJ was working with DHS to \"deploy judges electronically and by video-teleconference.\" ", "Some question whether the approach being taken by DOJ to reduce the EOIR backlog\u2014particularly the annual case completion goal\u2014is advisable and will succeed. For example, Ashley Tabaddor, president of the National Association of Immigration Judges, has expressed concern about the ability of immigration judges to adjudicate asylum cases within the time frame dictated by that yearly goal."], "subsections": []}, {"section_title": "Grounds for Asylum", "paragraphs": ["The INA definition of a refugee identifies five persecution grounds as the bases for receiving refugee status or asylum: race, religion, nationality, membership in a particular social group, and political opinion. It provides no definitions of these terms. As noted, however, it does state that an individual who has been forced to have an abortion or undergo sterilization or has been persecuted for resistance to a coercive population control program is to be considered to have been persecuted on the basis of political opinion. Legislation considered in the 115 th Congress would have further amended the INA refugee definition to provide that an individual who has been persecuted for failure to comply with or resistance to any law or regulation that prevents homeschooling is to be considered to have been persecuted on the basis of membership in a particular social group (see \" H.R. 391 \").", "In June 2018, Attorney General Sessions issued a decision regarding the adjudication of asylum claims based on the \"membership in a particular social group\" ground. In the past, asylum had been granted to certain victims of domestic violence based on a finding of persecution or a well-founded fear of persecution on account of \"membership in a particular social group.\" Attorney General Sessions vacated a Board of Immigration Appeals' 2016 decision in one of these cases and remanded the case to the immigration judge for further proceedings, arguing that the appropriate legal standards had not been applied. He reached the following conclusion about asylum cases involving private criminal activity (footnotes excluded):", "Generally, claims by aliens pertaining to domestic violence or gang violence perpetrated by non-governmental actors will not qualify for asylum. While I do not decide that violence inflicted by non-governmental actors may never serve as the basis for an asylum or withholding application based on membership in a particular social group, in practice such claims are unlikely to satisfy the statutory grounds for proving group persecution that the government is unable or unwilling to address. The mere fact that a country may have problems effectively policing certain crimes\u2014such as domestic violence or gang violence\u2014or that certain populations are more likely to be victims of crime, cannot itself establish an asylum claim.", "The decision further noted that because claims by aliens pertaining to domestic violence or gang violence perpetrated by nongovernmental actors generally will not qualify for asylum, they would also generally not meet the threshold for a finding of a credible fear of persecution (see \" Inspection of Arriving Aliens \").", "In July 2018, USCIS issued a policy memorandum to provide guidance to its asylum officers in light of the Attorney General's decision. Highlighting required findings about the home government in cases involving private violence, the memorandum stated:", "Few gang-based or domestic-violence claims involving particular social groups defined by the members' vulnerability to harm may merit a grant of asylum or refugee status\u2014or pass the \"significant possibility\" test in credible fear screenings \u2026\u2014because an applicant must prove, or establish a significant possibility that, his or her government is unable or unwilling to protect him or her\u2026. Again, the home government must either condone the behavior or demonstrate a complete helplessness to protect victims of such alleged persecution.", "Following issuance of the Attorney General's decision, immigration advocates expressed worry that the decision and the related USCIS policy memorandum could have wide-sweeping consequences, particularly for asylum seekers from Central America. In a letter to the New York Times , a counsel with the Tahirih Justice Center, which advocates for immigrant women and girls fleeing gender-based violence, wrote, \"As a result of that ruling, and the subsequent policy guidance, immigration officers may now feel emboldened to deny asylum to women fleeing domestic violence, even under the most life-threatening circumstances.\"", "On December 19, 2018, a federal district court judge in Washington, DC, ruled on a case challenging the policies regarding credible fear of persecution determinations set forth in former Attorney General Sessions' decision and the USCIS policy memorandum. The judge permanently enjoined the U.S. government from continuing some of the new policies.", "S ome who a re concerned about the potential impact of the former Attorney General's decision on women seeking asylum have discussed the possibility of amending the underlying INA definition of a refugee to explicitly address gender-based asylum claims. Among the l egislative options that have been put forward a re to add \"gender\" to the list of persecution gro unds or \"to define the phrase ' particular social group' by amending the law to include a non-exclusive list of (currently) common gender-based asylum claims, including domestic violence.\""], "subsections": []}, {"section_title": "Credible Fear of Persecution Threshold", "paragraphs": ["Separate from the 2018 decision by former Attorney General Sessions and the related USCIS policy memorandum discussed in the preceding section, the credible fear of persecution threshold has been a focus of attention recently as the number of individuals being screened for and found to have a credible fear has grown. Individuals who are found to have a credible fear may remain in the United States while their court case proceeds.", "As noted, the INA asylum provisions define credible fear of persecution to mean \"there is a significant possibility, taking into account the credibility of the statements made by the alien in support of the alien's claim and such other facts as are known to the officer, that the alien could establish eligibility for asylum.\" House bills considered in the 115 th Congress would have added a new requirement to this definition\u2014that \"it is more probable than not that the statements made by, and on behalf of, the alien in support of the alien's claim are true.\"", "USCIS Director Francis Cissna has endorsed a tightening of the credible fear of persecution standard. In prepared testimony for a May 2018 House hearing on border security, he stated, \"The simple reality is that those who wish to gain access to or remain in the United States know they can likely effect that access and then delay their removal by simply saying the 'magic words' of 'fear' or 'asylum.' The standard for credible fear screenings at the border has been set so low that nearly everyone meets it.\"", "Others disagree that the credible fear standard should be raised. In a 2018 policy brief, the American Immigration Lawyers Association (AILA) argues that \"the lower threshold for credible fear determinations is necessary precisely because asylum seekers arriving at the border are typically detained, traumatized, and have limited access to counsel and documentation to support their claims.\""], "subsections": []}, {"section_title": "Frivolous or Fraudulent Asylum Claims", "paragraphs": ["There have been concerns about frivolous asylum applications since the establishment of the U.S. asylum program. As noted, the 1980 interim regulations made reference to \"non-frivolous\" applications, and IIRIRA amended the INA to permanently bar an individual who knowingly files a frivolous asylum application from receiving immigration benefits. Under current regulations, an asylum application is considered \"frivolous\" for purposes of the INA benefit bar \"if any of its material elements is deliberately fabricated.\" These regulations also provide that for purposes of the bar, \"a finding that an alien filed a frivolous asylum application shall not preclude the alien from seeking withholding of removal.\"", "The issue of frivolous asylum claims was highlighted by Attorney General Sessions in 2017 remarks, in which he described the asylum system as being \"subject to rampant abuse and fraud.\" He further said, \"And as this system becomes overloaded with fake claims, it cannot deal effectively with just claims.\" Similarly, in his May 2018 House testimony, USCIS Director Cissna stated, \"The integrity of our entire immigration system is at risk because frivolous asylum applications impede our ability to help people who really need it.\" ", "Several House bills considered in the 115 th Congress sought to tighten language in the INA on frivolous asylum claims. In his May 2018 testimony, USCIS Director Cissna called for legislation to address the problem of frivolous claims that would, among other provisions, \"impos[e] and enforce[e] penalties for the filing of frivolous asylum applications.\"", "A key point of contention in the current debate about frivolous or fraudulent asylum claims is the scope of the problem. According to a researcher at the immigration-restrictionist Center for Immigration Studies, \"Most asylum claims nowadays, whether in Europe or the United States, are not genuine. Migrants are more and more using the asylum ticket to gain entry into a country and stay.\"", "Other experts, such as Law Professor Lindsay M. Harris, reach different conclusions about the prevalence of fraud in recent asylum applications: \"One of the humanitarian crises producing refugees happens to be south of our border, in Central America, and this accounts for the exponential increase in asylum claims and individuals seeking protection in the U.S. through the credible fear system, rather than a sudden increase in fraudulent claims.\""], "subsections": []}, {"section_title": "Employment Authorization", "paragraphs": ["Under current law, an asylum seeker who is not otherwise eligible for employment authorization cannot be granted such authorization until 180 days after filing an application for asylum. In general, under DHS regulations, an asylum applicant cannot submit an application for employment authorization and an employment authorization document (EAD) until 150 days after a complete asylum application has been received. There is no fee for an asylum applicant's initial application for employment authorization. Renewal applications are subject to standard fees.", "Although there seems to be general agreement that asylum seekers should be eligible for employment authorization at some point, aspects of this policy have long been debated. For example, for more than 20 years, some have argued that the availability of employment authorization creates an incentive for individuals to apply for asylum solely to be able to work legally in the United States. In his prepared testimony for the May 2018 House hearing on border issues, USCIS Director Cissna stated, \"While the number of mala fide claims is difficult to estimate, experience from the 1990s indicates that a significant amount of the growth in receipts since FY 2014 may be linked to individuals pursuing work authorization and not necessarily asylum status.\"", "Others dismiss the idea that asylum seekers act in response to particular U.S. policies, arguing that they are motivated by desperate circumstances. Commenting on Central American asylum seekers, a spokesperson for the U.N. High Commissioner for Refugees said, \"People are leaving because they are suffering from high levels of violence from gangs and other organized criminal groups.\u2026 This flow of families from Central America will not stop because if the root causes are still there these people will keep coming to the U.S. or to other countries.\"", "The complex system set up to track when an asylum seeker has reached the 180-day point for employment authorization purposes\u2014known as the asylum EAD clock \u2014has also been controversial. There are various events that stop the asylum EAD clock. USCIS and EOIR characterize these as \"delays requested or caused by an applicant while his or her asylum application is pending with USCIS and/or EOIR\" (e.g., the applicant's \"failure to appear at an interview or fingerprint appointment\" or \"the applicant or his or her attorney asks for additional time to prepare the case\"). Over the years, immigration advocacy groups have been critical of clock-related USCIS and EOIR policies and actions."], "subsections": []}, {"section_title": "Variation in Immigration Judges' Asylum Decisions", "paragraphs": ["In November 2017, the Transactional Records Access Clearinghouse (TRAC) published the report Asylum Outcome Continues to Depend on the Judge Assigned , which examined asylum decisions of judges on the same immigration court. It was based on combined data from FY2012 through FY2017 for judges who decided at least 100 asylum cases during this six-year period. Among its findings, the report identified the Newark and San Francisco Immigration Courts as having the greatest judge-to-judge differences in asylum cases decided during that time. For the San Francisco court, for example, it stated that \"the odds of denial varied from only 9.4 percent all the way up to 97.1 percent depending upon the judge.\" The TRAC analysis assumes that \"when individual judges [on the same court] handle a sufficient number of asylum requests, random case assignment will result in each judge being assigned a roughly equivalent mix of 'worthy' cases.\" It, thus, posits, \"any large differences in the denial rates of individual judges are unlikely to be the result of differences in the nature of the incoming cases. Instead, they are likely to reflect the personal perspective that each judge brings to the bench.\"", "TRAC first reported on differences in asylum decisions by immigration judges nationwide based on an analysis of asylum cases decided by judges from FY1994 through early FY2005. Published in July 2006, this TRAC report found a \"great disparity in the rate at which individual immigration judges declined the applications.\" Seemingly taking issue with the TRAC analysis but not mentioning it by name, a November 2007 EOIR fact sheet, \"Asylum Variations in Immigration Court,\" stated:", "Asylum adjudication does not lend itself well to statistical analysis. Each asylum application is adjudicated on a case-by-case basis, and each has many variables that need to be considered by an adjudicator. It is therefore important that any statistical analysis acknowledge these variables and not draw comparisons between substantially different cases.", "The U.S. Government Accountability Office (GAO) examined variations in the outcomes of asylum cases in reports issued in 2008 and 2016. The 2008 report, which was based on an analysis of asylum case data from FY1994 through April 2007, found that \"within immigration courts, there were pronounced differences in grant rates across immigration judges.\" While acknowledging the limits of its analysis, GAO concluded that \"the size of the disparities in asylum grant rates creates a perception of unfairness in the asylum adjudication process within the immigration court system.\"", "GAO analyzed EOIR data for FY1995 through FY2014 for its 2016 follow-up report. Although it was unable to control for \"the underlying facts and merits of individual asylum applications,\" GAO maintained that the available data allowed it to compare asylum outcomes across immigration courts and immigration judges. It estimated that for the May 2007-FY2014 period since its 2008 report, \"the affirmative and defensive asylum grant rates would vary by 47 and 57 percentage points, respectively, for the same representative applicant whose case was heard by different immigration judges.\""], "subsections": []}, {"section_title": "Safe Third Country Agreements", "paragraphs": ["Under the INA, an alien is ineligible to apply for asylum in the United States if he or she can be removed, pursuant to a bilateral or multilateral agreement, to a third country where the \"alien's life or freedom would not be threatened on account of race, religion, nationality, membership in a particular social group, or political opinion, and where the alien would have access to a full and fair procedure for determining a claim to asylum or equivalent temporary protection.\" ", "The United States and Canada signed a safe third country agreement in 2002, which went into effect in 2004. Under the agreement, asylum seekers must request protection in the first of the two countries they arrive in, unless they qualify for an exception. Under DHS regulations, a USCIS asylum officer must determine whether an alien arriving in the United States at a U.S.-Canada land border port of entry seeking asylum is subject to removal to Canada in accordance with the U.S.-Canada safe third country agreement.", "The Trump Administration has had preliminary discussions with Mexico about a possible safe third country agreement. According to an unidentified senior DHS official, \"We believe the flows [of Central Americans into the United States] would drop dramatically and fairly immediately\" if a U.S.-Mexico safe country agreement went in effect. ", "Human Rights First, an advocacy organization, opposes such an agreement. The group found that Mexico was not a safe third country in 2017 and indicated in a July 2018 press release that that was still the case: \"Since [last year], the dangers facing refugees and migrants in Mexico have escalated. Recent reports confirm that Mexican authorities continue to improperly return asylum seekers to their countries of persecution and that the deficiencies in the Mexican asylum system have grown.\"", "Taking a different approach, House bills considered in the 115 th Congress would have amended the INA safe third country asylum provision to eliminate the \"pursuant to a bilateral or multilateral agreement\" language, presumably to provide for removals to a third country without a bilateral agreement."], "subsections": []}]}, {"section_title": "Conclusion", "paragraphs": ["The asylum provisions in the INA are unusual in providing a standard mechanism for eligible unauthorized aliens in the United States to apply for a legal immigration status. This aspect of asylum also serves to make this form of relief particularly controversial, especially at times when large numbers of asylum seekers are arriving in the United States. The high volume of asylum cases has elicited policy responses from the Trump Administration, as described in this report. In October 2018 remarks at an immigration conference, USCIS Director Cissna offered context for DHS's and DOJ's asylum-related actions from the Administration's perspective when he referenced \"challenges associated with surges at the U. S. southern border, where migrants know that they can exploit a broken system to enter the U.S., avoid removal, and remain in the country.\" While the Administration maintains that its policies adhere to the INA and are necessary to preserve the integrity of the immigration system, others argue that it is tightening the asylum process in contravention of the law. It remains to be seen whether the Administration will continue to try to reshape U.S. asylum policy and whether Congress will take action, as it has at times in the past, to make legislative changes to the asylum system.", "Appendix A. Affirmative Asylum Applications", " Table A-1 provides the underlying data for Figure 1 on new affirmative asylum applications filed annually with USCIS since FY1995. ", " Table A-2 expands on the data in Table A-1 to show the top 10 nationalities filing new affirmative asylum applications annually since FY2007. For each of the top 10 nationalities for each year, Table A-2 provides a rank and a percentage of all applications that were filed by applicants of that nationality. The table also includes annual data on the total number of applications filed by all applicants (the latter totals match the data in Table A-1 ). ", "As shown in Table A-2 , the top four nationalities filing new affirmative asylum applications in FY2007 (China, Haiti, Mexico, and Guatemala) remained in the top 10 throughout the period, with China holding the top spot in all years except FY2017 and FY2018. Between FY2009 and FY2012, Chinese nationals filed one-third of all new affirmative asylum applications each year. In FY2017 and FY2018, however, China's rank fell to 2 nd and 4 th , respectively. In each of those two years, Venezuelans filed more new affirmative asylum applications than nationals of any other country, accounting for one-fifth of all applications filed in FY2017 and more than a quarter of the total in FY2018. Since FY2015, nationals of Venezuela and four other Latin American countries (Guatemala, El Salvador, Mexico, and Honduras) have accounted for five of the top six nationalities filing new affirmative asylum applications each year.", "Appendix B. USCIS Asylum Decisions and Credible Fear Findings ", " Table B-1 provides the underlying data for Figure 2 on USCIS decisions on affirmative asylum applications issued annually from FY2009 through FY2017. It also includes an additional small outcome category (Cases Dismissed). These are cases where the applicant did not appear for fingerprinting/ biometrics collection. For the cases referred to an immigration judge (which involve applicants without lawful status), Table B-1 distinguishes among three mutually exclusive subcategories: cases that were interviewed by USCIS; cases that were interviewed by USCIS where the applicant did not meet the filing deadline; and cases that were not interviewed by USCIS. (The Referrals \"Total\" column in Table B-1 matches the Referrals data displayed in Figure 2 .)", "In addition to deciding affirmative asylum cases, USCIS is tasked with assessing the credible fear of persecution claims made by individuals in expedited removal. Table B-2 and Table B-3 provide the underlying credible fear-related data for Figure 4 . Table B-2 contains data on referrals of credible fear claims to USCIS and USCIS completions of these cases.", " Table B-3 provides breakdowns of the Table B-2 \"Completions\" data by case outcome. It also provides the percentage of the completed cases in which credible fear was found.", "Appendix C. Defensive Asylum Applications", "The \"Total Applications\" column in Table C-1 provides the underlying data for Figure 3 on defensive asylum applications filed annually since FY2008. In addition, Table C-1 provides data on the two components of that total: (1) asylum applications originally filed as affirmative applications with USCIS (column 2), and (2) asylum applications originally filed as defensive applications with EOIR (column 3) (see \" Defensive Asylum \"). As shown in Table C-1 , the growth in the total number of defensive asylum applications filed in recent years prior to FY2018 has been driven mainly by an increase in asylum applications first filed in immigration court.", "Appendix D. EOIR Asylum Decisions", "EOIR immigration judges decide defensive asylum cases. An asylum application is defensive when the applicant is in standard removal proceedings in immigration court (see \" Defensive Asylum \"). Table D-1 provides the underlying data for Figure 5 on defensive asylum cases decided annually since FY2009. ", " Table D-2 provides data on a subset of EOIR asylum decisions involving credible fear claims. It is limited to decisions in defensive asylum cases that originated with an individual receiving a positive credible fear of persecution finding from USCIS. "], "subsections": []}]}}
{"id": "R42917", "title": "Mexico: Background and U.S. Relations", "released_date": "2019-05-02T00:00:00", "summary": ["Congress has maintained significant interest in Mexico, an ally and top trade partner. In recent decades, U.S.-Mexican relations have grown closer through cooperative management of the 2,000-mile border, the North American Free Trade Agreement (NAFTA), and security and rule of law cooperation under the M\u00e9rida Initiative. Relations have been tested, however, by President Donald J. Trump's shifts in U.S. immigration and trade policies.", "On December 1, 2018, Andr\u00e9s Manuel L\u00f3pez Obrador, the leftist populist leader of the National Regeneration Movement (MORENA) party, which he created in 2014, took office for a six-year term after winning 53% of votes in the July 1, 2018, presidential election. Elected on an anticorruption platform, L\u00f3pez Obrador is the first Mexican president in over two decades to enjoy majorities in both chambers of Congress. L\u00f3pez Obrador succeeded Enrique Pe\u00f1a Nieto of the Institutional Revolutionary Party (PRI). From 2013-2014, Pe\u00f1a Nieto shepherded reforms through the Mexican Congress, including one that opened Mexico's energy sector to foreign investment. He struggled, however, to address human rights abuses, insecurity, and corruption.", "President L\u00f3pez Obrador has pledged to make Mexico a more just and peaceful society, but also to govern with austerity. Given fiscal constraints and rising insecurity, observers question whether his goals are attainable. L\u00f3pez Obrador aims to build infrastructure in southern Mexico, revive the state oil company, promote social programs, and maintain a noninterventionist position in foreign affairs, including the crisis in Venezuela. His power is constrained, however, by MORENA's lack of a two-thirds majority in Congress, which he would need to enact constitutional reforms or to roll back reforms. Non-MORENA governors have also opposed some of his policies. Still, as of April 2019, L\u00f3pez Obrador had an approval rating of78%.", "U.S. Policy", "Despite predictions to the contrary, U.S.-Mexico relations under the L\u00f3pez Obrador government have thus far remained friendly. Nevertheless, tensions have emerged over several key issues, including trade disputes and tariffs, immigration and border security issues, and Mexico's decision to remain neutral in the crisis in Venezuela. The new government has accommodated U.S. migration and border security policies, despite the domestic criticism it has received for agreeing to allow Central American asylum seekers to await U.S. immigration proceedings in Mexico and for rapidly increasing deportations. The Trump Administration requested $76.3 million for the M\u00e9rida Initiative for FY2020 (a 35% decline from the FY2018-enacted level).", "In November 2018, Mexico, the United States, and Canada signed a proposed U.S.-Mexico-Canada (USMCA) free trade agreement that, if approved by Congress and ratified by Mexico and Canada, would replace NAFTA. Mexico has applied retaliatory tariffs in response to U.S. tariffs on steel and aluminum imports imposed in 2018.", "Legislative Action", "The 116th Congress may consider approval of the USMCA. Congressional concerns regarding the USMCA include possible effect on the U.S. economy, working conditions in Mexico and the protection of worker rights, enforceability of USMCA labor provisions, U.S.-Mexican economic relations, and other issues. It is not known whether or when Congress will consider implementing legislation for USMCA. In January 2019, Congress provided $145 million for the M\u00e9rida Initiative ($68 million above the budget request) in the FY2019 Consolidated Appropriations Act (P.L. 116-6) and asked for reports on how bilateral efforts are combating flows of opioids, methamphetamine, and cocaine. The House also passed H.R. 133 (Cuellar), a bill that would promote economic partnership between the United States and Mexico, as well as educational and professional exchanges. A related bill, S. 587 (Cornyn), has been introduced in the Senate.", "Further Reading", "CRS In Focus IF10578, Mexico: Evolution of the M\u00e9rida Initiative, 2007-2019.", "CRS In Focus IF10400, Transnational Crime Issues: Heroin Production, Fentanyl Trafficking, and U.S.-Mexico Security Cooperation.", "CRS In Focus IF10215, Mexico's Immigration Control Efforts.", "CRS Report R45489, Recent Migration to the United States from Central America: Frequently Asked Questions.", "CRS Report RL32934, U.S.-Mexico Economic Relations: Trends, Issues, and Implications.", "CRS Report R44981, NAFTA Renegotiation and the Proposed United States-Mexico-Canada Agreement (USMCA)", "CRS Report R45430, Sharing the Colorado River and the Rio Grande: Cooperation and Conflict with Mexico"], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Congress has demonstrated renewed interest in Mexico, a top trade partner and energy supplier with which the United States shares a nearly 2,000-mile border and strong cultural, familial, and historical ties (see Figure 1 ). Economically, the United States and Mexico are interdependent, and Congress closely followed efforts to renegotiate NAFTA, which began in August 2017, and ultimately resulted in a proposed United States-Mexico-Canada Agreement (USMCA) signed in November 2018. Similarly, security conditions in Mexico and the Mexican governments' ability to manage U.S.-bound migration flows affect U.S. national security, particularly at the Southwest border. ", "Five months into his six-year term, Mexican President Andr\u00e9s Manuel L\u00f3pez Obrador enjoys an approval ratings of 78%, even as his government is struggling to address rising insecurity and sluggish growth. Discontent with Mexico's traditional parties and voters' desire for change led them to elect L\u00f3pez Obrador president with 53% of the vote. Some fear that L\u00f3pez Obrador, whose National Regeneration Movement (MORENA) coalition captured legislative majorities in both chambers of the Congress, will reverse the reforms enacted in 2013-2014. Others predict that pressure from business groups, civil society, and some legislators and governors may constrain L\u00f3pez Obrador's populist tendencies.", "This report provides an overview of political and economic conditions in Mexico, followed by assessments of selected issues of congressional interest in Mexico: security and foreign aid, extraditions, human rights, trade, migration, energy, education, environment, and water issues. "], "subsections": []}, {"section_title": "Background", "paragraphs": ["Over the past two decades, Mexico has transitioned from a centralized political system dominated by the Institutional Revolutionary Party (PRI), which controlled the presidency from 1929-2000, to a true multiparty democracy. Since the 1990s, presidential power has become more balanced with that of Mexico's Congress and Supreme Court. Partially as a result of these new constraints on executive power, the country's first two presidents from the conservative National Action Party (PAN)\u2014Vicente Fox (2000-2006) and Felipe Calder\u00f3n (2006-2012)\u2014struggled to enact some of the reforms designed to address Mexico's economic and security challenges.", "The Calder\u00f3n government pursued an aggressive anticrime strategy and increased security cooperation with the United States. Mexico arrested and extradited many drug kingpins, but some 60,000 people died due to organized crime-related violence. Mexico's security challenges overshadowed some of the government's achievements, including its economic stewardship during the global financial crisis, health care expansion, and efforts on climate change. ", "In 2012, the PRI regained control of the presidency 12 years after ceding it to the PAN with a victory by Enrique Pe\u00f1a Nieto over L\u00f3pez Obrador of the leftist Democratic Revolutionary Party (PRD). L\u00f3pez Obrador then left the PRD and founded the MORENA party. Voters viewed the PRI as best equipped to reduce violence and hasten economic growth, despite concerns about its reputation for corruption. In 2013, Pe\u00f1a Nieto shepherded structural reforms through a fragmented legislature by forming a \"Pact for Mexico\" agreement among the PRI, PAN, and PRD. The reforms addressed a range of issues, including education, energy, telecommunications, access to finance, and politics (see Table A-1 in the Appendix ). The energy reform led to foreign oil and gas companies committing to invest $160 billion in the country.", "Despite that early success, Pe\u00f1a Nieto left office with extremely low approval ratings (20% in November 2018) after presiding over a term that ended with record levels of homicides, moderate economic growth (averaging 2% annually), and pervasive corruption and impunity. Pe\u00f1a Nieto's approval rating plummeted after his government botched an investigation into the disappearance of 43 students in Ayotzinapa, Guerrero in September 2014. Reports that surfaced in 2014 of how Pe\u00f1a Nieto, his wife, and his foreign minister benefitted from ties to a firm that won lucrative government contracts, further damaged the administration's reputation. In 2017, reports emerged that the Pe\u00f1a Nieto government used spyware to monitor its critics, including journalists."], "subsections": []}, {"section_title": "L\u00f3pez Obrador Administration", "paragraphs": [], "subsections": [{"section_title": "July 1, 2018, Election7", "paragraphs": ["On July 1, 2018, Andr\u00e9s Manuel L\u00f3pez Obrador and his MORENA coalition dominated Mexico's presidential and legislative elections. Originally from the southern state of Tabasco, L\u00f3pez Obrador is a 65-year-old former mayor of Mexico City (2000-2005) who ran for president in the past two elections. After his loss in 2012, he left the center-left Democratic Revolutionary Party (PRD) and established MORENA. ", "MORENA, a leftist party, ran in coalition with the socially conservative Social Encounter Party (PES) and the leftist Labor Party (PT). L\u00f3pez Obrador won 53.2% of the presidential vote, more than 30 percentage points ahead of his nearest rival, Ricardo Anaya, of the PAN/PRD/Citizen's Movement (MC) alliance who garnered 22.3% of the vote. L\u00f3pez Obrador won in 31 of 32 states (see Figure 2 ). The PRI-led coalition candidate, Jos\u00e9 Antonio Meade, won 16.4% of the vote followed by Jaime Rodr\u00edguez, Mexico's first independent presidential candidate, with 5.2%.", "Andr\u00e9s Manuel L\u00f3pez Obrador's victory signaled a significant change in Mexico's political development. L\u00f3pez Obrador won in 31 of 32 states, demonstrating that he had broadened his support from his base in southern Mexico.The presidential election results have prompted soul-searching within the traditional parties and shown the limits of independent candidates. Anaya's defeat provoked internal struggles within the PAN. Meade's performance demonstrated voters' deep frustration with the PRI. ", "In addition to the presidential contest, all 128 seats in the Mexican senate and 500 seats in the chamber of deputies were up for election. Senators serve for six years, and deputies serve for three. Beginning this cycle, both senators and deputies will be eligible to run for reelection for a maximum of 12 years in office. MORENA's coalition won solid majorities in the Senate and the Chamber which convened on September 1, 2018. As of April 2019, the ruling coalition controls 70 of 128 seats in the Senate and 316 of 500 seats in the Chamber. The MORENA coalition lacks the two-thirds majority it needs to make constitutional changes or overturn reforms passed in 2013. The PAN is the second-largest party in each chamber.", "Mexican voters gave L\u00f3pez Obrador and MORENA a mandate to change the course of Mexico's domestic policies. Nevertheless, L\u00f3pez Obrador's legislative coalition may face opposition if it seeks to enact policies that would shift the balance of power between federal and state offices. L\u00f3pez Obrador proposed having a federal representative in each state to liaise with his office and to oversee distribution of all federal funds, but governors opposed this proposal. As shown in Figure 3 , MORENA and allied parties control four of 32 governorships, including that of Mexico City. "], "subsections": []}, {"section_title": "President L\u00f3pez Obrador: Priorities and Early Actions", "paragraphs": ["In 2018, L\u00f3pez Obrador promised to bring about change by governing differently than recent PRI and PAN administrations. He focused on addressing voters' concerns about corruption, poverty and inequality, and escalating crime and violence.Although some of his advisers endorse progressive social policies, L\u00f3pez Obrador personally has opposed abortion and gay marriage. ", "L\u00f3pez Obrador has set high expectations for his government and promised many things to many different constituencies, some of which appear to conflict with each other. Upon taking office, L\u00f3pez Obrador pledged to bring about a \"fourth transformation\" that would make Mexico a more just and peaceful society, but observers question whether his ambitious goals are attainable, given existing fiscal constraints. As an example, he has promised to govern austerely but has started a number of new social programs. His finance minister has promised that existing contracts with private energy companies will be respected, but his energy minister has halted new auctions and is seeking to rebuild the heavily indebted state oil company ( Petr\u00f3leos de M\u00e9xico or Pemex). ", "President L\u00f3pez Obrador's distinct brand of politics has given him broad support. L\u00f3pez Obrador has dominated the news cycle by convening daily, early morning press conferences. His decision to cut his own salary and public sector salaries generally have prompted high-level resignations among senior bureaucrats, but proven popular with the public. His government has started a new youth scholarship program and pensions for the elderly, while also promising to create jobs with infrastructure investments (including a new oil refinery and a railroad in the Yucat\u00e1n) in southern Mexico regardless of their feasibility. Voters have given the government the benefit of the doubt even when its policies have caused inconveniences, such as fuel shortages that occurred after security forces closed some oil pipelines in an effort to combat theft. ", "Investors have been critical of some of the administration's early actions. Many expressed concern after L\u00f3pez Obrador cancelled a $13 billion airport project already underway after voters in a MORENA-led referendum rejected its location. Investors were somewhat assuaged, however, after the administration unveiled a relatively austere budget in late 2018 and then decided to allow energy contracts signed during Pe\u00f1a Nieto's presidency to proceed while halting new ones. With L\u00f3pez Obrador's support, the Congress has enacted reforms to strengthen the protection of labor rights and workers' salaries, in part to comply with its domestic commitments related to the USMCA. On the other hand, it is unclear whether legislators' revisions will water down, or completely undo, education reforms passed in 2013 that were deemed a step forward toward raising education standards by many, but have been opposed by unions and ordered repealed by L\u00f3pez Obrador. ", "Critics maintain that President L\u00f3pez Obrador has shunned reputable media outlets that have questioned his policies and cut funding for entities that could provide checks on his presidential power. He has dismissed data collected on organized crime-related violence by media outlets as \"fake news\" even as government data corroborate their findings that violence is escalating. His government has cut the budget for the national anticorruption commission, newly independent prosecutor general's office, and several regulatory agencies."], "subsections": []}, {"section_title": "Security Conditions", "paragraphs": ["Endemic violence, much of which is related to organized crime, has become an intractable problem in Mexico (see Figure 4 ). Organized crime-related violence has been fueled by U.S. drug demand, as well as bulk cash smuggling and weapons smuggling from the United States. Organized crime-related homicides in Mexico rose slightly in 2015 and significantly in 2016. In 2017, total homicides and organized crime-related homicides reached record levels. During Mexico's 2018 campaign, more than 150 politicians reportedly were killed. The homicide rate reached record levels in 2018 and rose even higher during the first three months of 2019 as fighting among criminal organizations intensified.", "Infighting among criminal groups has intensified since the rise of the Jalisco New Generation, or CJNG, cartel, a group that shot down a police helicopter in 2016. The January 2017 extradition of Joaqu\u00edn \"El Chapo\" Guzm\u00e1n prompted succession battles within the Sinaloa Cartel and emboldened the CJNG and other groups to challenge Sinaloa's dominance. Crime groups are competing to supply surging U.S. demand for heroin and other opioids. Mexico's criminal organizations also are fragmenting and diversifying away from drug trafficking, furthering their expansion into activities such as oil theft, alien smuggling, kidnapping, and human trafficking. Although much of the crime\u2014particularly extortion\u2014disproportionately affects localities and small businesses, fuel theft has become a national security threat, costing Mexico as much as $1 billion a year and fueling violent conflicts between the army and suspected thieves.", "Many assert that the Pe\u00f1a Nieto administration maintained Calder\u00f3n's reactive approach of deploying federal forces\u2014including the military\u2014to areas in which crime surges rather than proactively strengthening institutions to deter criminality. These deployments led to a swift increase in human rights abuses committed by security forces (military and police) against civilians (see \" Human Rights \" below). High-value targeting of top criminal leaders also continued. As of August 2018, security forces had killed or detained at least 110 of 122 high-value targets identified as priorities by the Pe\u00f1a Nieto government; nine of those individuals received sentences. In August 2018, the Mexican government and the U.S. Drug Enforcement Administration (DEA) announced a new bilateral effort to arrest the leader of the CJNG. Even as many groups have developed into multifaceted illicit enterprises, government efforts to seize criminal assets have been modest and attempts to prosecute money laundering cases have had \"significant shortcomings.\"", "With violence reaching historic levels during the first quarter of 2019 and high-profile massacres occurring, President L\u00f3pez Obrador is under increasing pressure to refine his security strategy. As a candidate, L\u00f3pez Obrador emphasized anticorruption initiatives, social investments, human rights, drug policy reform, and transitional justice for nonviolent criminals. In line with those priorities, Mexico's security strategy for 2018-2024 includes a focus on addressing the socioeconomic drivers of violent crime. The administration has launched a program to provide scholarships to youth to attend university or to complete internships. Allies in the Mexican Congress are moving toward decriminalizing marijuana production and distribution.", "At the same time, President L\u00f3pez Obrador has backed constitutional reforms to allow military involvement in public security to continue for five more years, despite a 2018 Supreme Court ruling that prolonged military involvement in public security violated the constitution. He secured congressional approval of a new 80,000-strong National Guard (composed of military police, federal police, and new recruits) to combat crime, a move that surprised many in the human rights community. After criticism from human rights groups, the Congress modified L\u00f3pez Obrador's original proposal to ensure the National Guard will be under civilian command. "], "subsections": []}, {"section_title": "Corruption, Impunity, and Human Rights Abuses", "paragraphs": [], "subsections": [{"section_title": "Corruption and the Rule of Law", "paragraphs": ["Corruption is an issue at all levels of government in Mexico: 84% of Mexicans identify corruption as among the most pressing challenge facing the country. In Mexico, the costs of corruption reportedly reach as much as 5% of gross domestic product each year. Mexico fell 33 places in Transparency International's Corruption Perceptions Index from 2012 to 2018. At least 14 current or former governors (many from the PRI) are under investigation for corruption, including collusion with organized crime groups that resulted in violent deaths. A credible case against the chair of Pe\u00f1a Nieto's 2012 campaign (and former head of Pemex) for receiving $10.5 million in bribes from Odebrecht, a Brazilian construction firm, stalled after the prosecutor investigating the case was fired. Even though L\u00f3pez Obrador has called for progress and transparency in anticorruption cases, his government has not unsealed information on investigations related to the Odebrecht case.", "New Criminal Justice System. By the mid-2000s, most Mexican legal experts had concluded that reforming Mexico's corrupt and inefficient criminal justice system was crucial for combating criminality and strengthening the rule of law. In June 2008, Mexico implemented constitutional reforms mandating that by 2016, trial procedures at the federal and state level had to move from a closed-door process based on written arguments presented to a judge to an adversarial public trial system with oral arguments and the presumption of innocence. These changes aimed to help make a new criminal justice system that would be more transparent, impartial, and efficient (through the use of alternative means of dispute settlement). Federal changes followed advances made in early adopters of the new system, including states such as Chihuahua.", "Under Pe\u00f1a Nieto, Mexico technically met the June 2016 deadline for adopting the new system, with states that have received technical assistance from the United States showing, on average, better results than others. Nevertheless, s problems in implementation occurred and public opinion turned against the system as many criminals were released by judges due to flawed investigations by police and/or weak cases presented by prosecutors. On average, fewer than 20% of homicides have been successfully prosecuted, suggesting persistently high levels of impunity. According to the World Justice Project, the new system has produced better courtroom infrastructure, more capable judges, and faster case resolution than the old system, but additional training for police and prosecutors is needed. It is unclear whether L\u00f3pez Obrador will dedicate the resources necessary to strengthen the system.", "Reforming the Attorney General's Office. Analysts who study Mexico's legal system highlight the inefficiency of the attorney general's office (PGR). For years, the PGR's efficiency has suffered because of limited resources, corruption, and a lack of political will to resolve high-profile cases, including those involving high-level corruption or emblematic human rights abuses. Three attorneys general resigned from 2012 to 2017; the last one stepped down over allegations of corruption. Many civil society groups that pushed for the new criminal justice system in the mid-2000s also lobbied the Mexican Congress to create an independent prosecutor's office to replace the PGR. Under constitutional reforms adopted in 2014, Mexico's Senate would appoint an independent individual to lead the new prosecutor general's office. ", "President Andr\u00e9s Manuel L\u00f3pez Obrador downplayed the importance of the new office during his presidential campaign, but Mexico's Congress established the office after he was inaugurated in December 2018. In January 2019, Mexico's Senate named Dr. Alejandro Gertz Manero, a 79-year old associate and former security advisor to L\u00f3pez Obrador, as Prosecutor General. Gertz Manero's nomination and subsequent appointment has raised concerns about his capacity to remain independent, given his ties to the president. Many wonder if he will take up cases against the president and his administration. Gertz Manero is to serve a nine-year term.", "Making Electoral Fraud and Corruption Grave Crimes. In December 2018, L\u00f3pez Obrador proposed constitutional changes that would expand the list of grave crimes for which judges must mandate pretrial detention to include corruption and electoral fraud. The proposal passed the Senate in December and the lower chamber in February 2019. Critics, such as the UN High Commissioner for Human Rights (OHCHR), noted that the change violates the presumption of innocence, an international human right under the UN's Universal Declaration of Human Rights. Increasing pretrial detention also goes against one of the stated goals of the NCJS. The president, however, welcomed the outcome.", "National Anticorruption System. In July 2016, Mexico's Congress approved legislation to fully implement the national anticorruption system (NAS) created by a constitutional reform in April 2015. The legislation reflected several of the proposals put forth by Mexican civil society groups. It gave the NAS investigative and prosecutorial powers and a civilian board of directors; increased administrative and criminal penalties for corruption; and required three declarations (taxes, assets, and conflicts of interest) from public officials and contractors. During the Pe\u00f1a Nieto government, federal implementation of the NAS lagged and state-level implementation varied significantly. In December 2017, members of the system's civilian board of directors maintained that the government had thwarted its efforts by denying requests for information. ", "Although he campaigned on an anticorruption platform, President L\u00f3pez Obrador has questioned the necessity of the NAS. Since taking office, L\u00f3pez Obrador has not prioritized implementing the system. Nevertheless, Prosecutor General Gertz Manero named a special anticorruption prosecutor in February 2019. The 18 judges required to hear corruption cases are still to be named. In addition, many states have not fulfilled the constitutional requirements for establishing a local NAS."], "subsections": []}, {"section_title": "Human Rights", "paragraphs": ["Criminal groups, sometimes in collusion with public officials, as well as state actors (military, police, prosecutors, and migration officials), have continued to commit serious human rights violations against civilians, including extrajudicial killings. The vast majority of those abuses have gone unpunished, whether prosecuted in the military or civilian justice systems. The government also continues to receive criticism for not adequately protecting journalists and human rights defenders, migrants, and other vulnerable groups. ", "For years, human rights groups and U.S. State Department Country Reports on Human Rights Practices have chronicled cases of Mexican security officials' involvement in extrajudicial killings, \"enforced disappearances,\" and torture. In October 2018, the outgoing Pe\u00f1a Nieto government estimated that more than 37,000 people who had gone missing since 2006 remained unaccounted for. States on the U.S.-Mexico border (Tamaulipas, Nuevo Le\u00f3n, and Sonora) have among the highest rates of disappearances. The National Human Rights Commission estimates that \"more than 3,900 bodies have been found in over 1,300 clandestine graves since 2007.\" ", "In 2017, the Mexican Congress enacted a law against torture. After an April 2019 visit to Mexico, the U.N. Committee against Torture welcomed the passage of the 2017 law, but stated that torture by state agents occurred in a \" generalized manner \" in Mexico and found the use of torture to be \"endemic\" in detention centers. They also maintained that impunity for the crime of torture must be addressed: 4.6% of investigations into torture claims resulted in convictions.", "During a recent visit to Mexico, Michelle Bachelet, the United Nations High Commissioner for Human Rights recognized President L\u00f3pez Obrador's efforts to put human rights at the center of his government. Bachelet highlighted the President's willingness to \"unveil the truth, provide justice, give reparations to victims and guarantee the nonrepetition\" of human rights violations. She commended the creation of the Presidential Commission for Truth and Access to Justice for the Ayotzinapa case and acknowledged the government's broader commitment to search for the disappeared. The commissioner welcomed the government's presentation of the Plan for the Implementation of the General Law on Disappearances (approved in 2017), the reestablishment of the National Search System, and the announcement of plans to create a Single Information System and a National Institute for Forensic Identification. ", "In recent years, international observers have expressed alarm as Mexico has become one of the most dangerous countries for journalists to work outside of a war zone. From 2000 to 2018, some 120 journalists and media workers were killed in Mexico and many more have been threatened or attacked, according to Article 19 (an international media rights organization). A more conservative estimate from the Committee to Protect Journalists (CPJ) is that 41 journalists have been killed in Mexico since 2000. In addition, Mexico ranks among the top 10 countries globally with the highest rates of unsolved journalist murders as a percentage of population in CPJ's Global Impunity Index . ", "Mexico is also a dangerous country for human rights defenders. During the first three months of the L\u00f3pez Obrador government, at least 17 journalists and human rights defenders were killed, at least one of whom was receiving government protection. Although L\u00f3pez Obrador has been critical of some media outlets and reporters, his government has pledged to improve the mechanism intended to protect human rights defenders and journalists."], "subsections": []}]}, {"section_title": "Foreign Policy", "paragraphs": ["President Pe\u00f1a Nieto prioritized promoting trade and investment in Mexico as a core goal of his administration's foreign policy. During his term, Mexico began to participate in U.N. peacekeeping efforts and spoke out in the Organization of American States on the deterioration of democracy in Venezuela, a departure for a country with a history of nonintervention. Pe\u00f1a Nieto hosted Chinese Premier Xi Jinping for a state visit to Mexico, visited China twice, and in September 2017 described the relationship as a \"comprehensive strategic partnership.\" The Pe\u00f1a Nieto government negotiated and signed the proposed Trans-Pacific Partnership (TPP) trade agreement with other Asia-Pacific countries (and the United States and Canada). Even after President Trump withdrew the United States from the TPP agreement, Mexico and the 10 other signatories of the TPP concluded their own trade agreement, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Mexico also prioritized economic integration efforts with the pro-trade Pacific Alliance countries of Chile, Colombia, and Peru and focused on expanding markets for those governments. ", "In contrast to his predecessor, President L\u00f3pez Obrador generally has maintained that the best foreign policy is a strong domestic policy. His foreign minister, Marcelo Ebrard (former mayor of Mexico City), is leading a return to Mexico's traditional, noninterventionist approach to foreign policy (the so-called Estrada doctrine ). Many analysts predict, however, that Mexico may continue to engage on global issues that it deems important. L\u00f3pez Obrador reversed the active role that Mexico had been playing during the Pe\u00f1a Nieto government in seeking to address the crises in Venezuela. Mexico has not recognized Juan Guaid\u00f3 as Interim President of Venezuela despite pressure from the United States and others to do so. As of January 2019, U.N. agencies estimated that some 39,000 Venezuelan migrants and refugees were sheltering in Mexico. ", "Despite these changes, Mexico continues to participate in the Pacific Alliance, promote its exports and seek new trade partners, and support investment in the Northern Triangle countries (Guatemala, El Salvador, and Honduras). The Mexican government has long maintained that the best way to stop illegal immigration from Central America is to address the insecurity and lack of opportunity there. Nevertheless, fiscal limitations limit the Mexican government's ability to support Central American efforts to address those challenges. "], "subsections": []}]}, {"section_title": "Economic and Social Conditions67", "paragraphs": ["Mexico has transitioned from a closed, state-led economy to an open market economy that has entered into free trade agreements with 46 countries. The transition began in the late 1980s and accelerated after Mexico entered into NAFTA in 1994. Since NAFTA, Mexico has increasingly become an export-oriented economy, with the value of exports equaling more than 38% of Mexico's gross domestic product (GDP) in 2016, up from 10% of GDP 20 years prior. Mexico remains a U.S. crude oil supplier, but its top exports to the United States are automobiles and auto parts, computer equipment, and other manufactured goods. Reports have estimated that 40% of the content of those exports contain U.S. value added content. ", "Despite attempts to diversify its economic ties and build its domestic economy, Mexico remains heavily dependent on the United States as an export market (roughly 80% of Mexico's exports in 2018 were U.S.-bound) and as a source of remittances, tourism revenues, and investment. Studies estimate that a U.S. withdrawal from NAFTA, could cost Mexico more than 950,000 low-skilled jobs and lower its GDP growth by 0.9%. In recent years, remittances have replaced oil exports as Mexico's largest source of foreign exchange. According to Mexico's central bank, remittances reached a record $33.0 billion in 2018. Mexico remained the leading U.S. international travel destination in 2017 (the most recent year calculated by the U.S. Department of Commerce). U.S. travel warnings regarding violence in resort areas such as Playa del Carmen, Los Cabos, and Canc\u00fan could result in declining arrivals. ", "The Mexican economy grew by 2% in 2018, but growth may decline to 1.6% in 2019, due, in part, to lower projected private investment. Mexico's Central Bank has also cited slowing investment, gasoline shortages, and strikes as reasons for revising its growth forecast for 2019 downward to a range of 1.1% to 2.1% for 2019. Some observers believe that investor sentiment and the country's growth prospects could worsen if L\u00f3pez Obrador continues to promote government intervention in the economy and to rely on popular referendums to make economic decisions.", "Economic conditions in Mexico tend to follow economic patterns in the United States. When the U.S. economy is expanding, as it is now, the Mexican economy tends to grow. However, when the U.S. economy stagnates or contracts, the Mexican economy also tends to contract, often to a greater degree. The negative impact of protectionist U.S. trade policies and a projected U.S. economic slowdown in 2020 could hurt Mexico's growth prospects. President Trump has threatened to close the U.S.-Mexico border in response to his concerns about illegal immigration and illicit drug flows. Closing the border could have immediate and serious economic consequences. As an example, the U.S. auto industry stated that U.S. auto production would stop after a week due to the deep interdependence of the North American auto industry.", "Sound macroeconomic policies, a strong banking system, and structural reforms backed by a flexible line of credit with the International Monetary Fund (IMF) have helped Mexico weather recent economic volatility. Nevertheless, the IMF has recommended additional steps to deal with potential external shocks. These steps include improving tax collection, reducing informality, reforming public administration, and improving governance. "], "subsections": [{"section_title": "Factors Affecting Economic Growth", "paragraphs": ["Over the past 30 years, Mexico has recorded a somewhat low average economic growth rate of 2.6%. Some factors\u2014such as plentiful natural resources, a young labor force, and proximity to markets in the United States\u2014have been counted on to help Mexico's economy grow faster in the future. Most economists maintain that those factors could be bolstered over the medium to long term by continued implementation of some of the reforms described in Table A-1 . ", "At the same time, continued insecurity and corruption, a relatively weak regulatory framework, and challenges in its education system may hinder Mexico's future industrial competitiveness. Corruption costs Mexico as much as $53 billion a year (5% of GDP). A lack of transparency in government spending and procurement, as well as confusing regulations and red tape, has likely discouraged some investment. Deficiencies in the education system, including a lack of access to vocational education, have led to firms having difficulty finding skilled labor. ", "Another factor affecting the economy is the price of oil. Because oil revenues make up a large, if lessening, part of the country's budget (32% of government revenue in 2017), low oil prices since 2014 and a financial crisis within Pemex have proved challenging. The Pe\u00f1a Nieto government raised other taxes to recoup lost revenue from oil, but the L\u00f3pez Obrador administration has pledged to make budget cuts in order to maintain fiscal targets.", "Many analysts predict that Mexico will have to combine efforts to implement its economic reforms with other actions to boost growth. A 2018 report by the Organisation for Economic Co-operation and Development suggests that Mexico will need to enact complementary reforms to address issues such as corruption, weak governance, and lack of judicial enforcement to achieve its full economic growth potential. "], "subsections": []}, {"section_title": "Combating Poverty and Inequality", "paragraphs": ["Mexico has long had relatively high poverty rates for its level of economic development (43.6% in 2016), particularly in rural regions in southern Mexico and among indigenous populations. Some assert that conditions in indigenous communities have not measurably improved since the Zapatistas launched an uprising for indigenous rights in 1994. Traditionally, those employed in subsistence agriculture or small, informal businesses tend to be among the poorest citizens. Many households rely on remittances to pay for food, clothing, health care, and other basic necessities. ", "Mexico also experiences relatively high income inequality. According to the 2014 Global Wealth Report published by Credit Suisse, 64% of Mexico's wealth is concentrated in 10% of the population. Mexico is among the 25 most unequal countries in the world included in the Standardized World Income Inequality Database. According to a 2015 report by Oxfam Mexico, this inequality is due in part to the country's regressive tax system, oligopolies that dominate particular industries, a relatively low minimum wage, and a lack of targeting in some social programs.", "Economists have maintained that reducing informality is crucial for addressing income inequality and poverty, while also expanding Mexico's low tax base. The 2013-2014 reforms sought to boost formal-sector employment and productivity, particularly among the small- and medium-sized enterprises (SMEs) that employ some 60% of Mexican workers, mostly in the informal sector. Although productivity in Mexico's large companies (many of which produce internationally traded goods) increased by 5.8% per year between 1999 and 2009, productivity in small businesses fell by 6.5% per year over the same period. To address that discrepancy, the financial reform aimed to increase access to credit for SMEs and the fiscal reform sought to incentivize SMEs' participation in the formal (tax-paying) economy by offering insurance, retirement savings accounts, and home loans to those that register with the national tax agency.", "The Pe\u00f1a Nieto administration sought to complement economic reforms with social programs, but corruption within the Secretariat for Social Development likely siphoned significant funding away from some of those programs. It expanded access to federal pensions, started a national anti-hunger program, and increased funding for the country's conditional cash transfer program. Pe\u00f1a Nieto renamed that program Prospera (Prosperity) and redesigned it to encourage its beneficiaries to engage in productive projects. In addition to corruption, some of Pe\u00f1a Nieto's programs, namely the anti-hunger initiative, were criticized for a lack of efficacy.", "Despite his avowed commitment to austerity, L\u00f3pez Obrador has endorsed state-led economic development and promised to rebuild Mexico's domestic market as part of his National Development Plan 2018-2024, which he presented on May 1, 2019. In addition to revitalizing Pemex, the president has promised to build a \"Maya Train\" to connect five states in the southeast and facilitate tourism (see Figure 5 ). In December 2018, L\u00f3pez Obrador announced a plan to invest some $25 billion in southern Mexico to accompany an estimated $4.8 billion in potential U.S. public and private investments to promote job growth, infrastructure, and development in that region, including jobs for Central American migrants.", "L\u00f3pez Obrador's pledges related to social programs include (1) doubling monthly payments to the elderly; (2) providing regular financial assistance to a million disabled people; (3) giving a monthly payment to students in 10 th to 12 th grades to lower the dropout rate, and (4) offering paid apprenticeships for 2.3 million young people. While some of these programs have already gotten underway, their ultimate scale and impacts will take time to evaluate. Some observers are concerned about his plan to decouple monthly support to families provided through the program formerly known as Prospera with requirements that children attend school and receive regular health checkup. "], "subsections": []}]}, {"section_title": "U.S. Relations and Issues for Congress", "paragraphs": ["Mexican-U.S. relations generally have grown closer over the past two decades. Common interests in encouraging trade flows and energy production, combating illicit flows (of people, weapons, drugs, and currency), and managing environmental resources have been cultivated over many years. A range of bilateral talks, mechanisms, and institutions have helped the Mexican and U.S. federal governments\u2014as well as stakeholders in border states, the private sector, and nongovernmental organizations\u2014find common ground on difficult issues, such as migration and water management. U.S. policy changes that run counter to Mexican interests in one of those areas could trigger responses from the Mexican government on other areas where the United States benefits from Mexico's cooperation, such as combating illegal migration. ", "Despite predictions to the contrary, U.S.-Mexico relations under the L\u00f3pez Obrador administration have thus far remained friendly. Nevertheless, tensions have emerged over several key issues, including trade disputes and tariffs, immigration and border security issues, and Mexico's decision to remain neutral in the crisis in Venezuela. The new government has generally accommodated U.S. migration and border security policies, but has protested recent policies that have resulted in extended border delays. President L\u00f3pez Obrador has also urged the U.S. Congress to consider the USMCA. ", "Security Cooperation: Transnational Crime and Counternarcotics", "Mexico is a significant source and transit country for heroin, marijuana, and synthetic drugs (such as methamphetamine) destined for the United States. It is also a major transit country for cocaine produced in the Andean region. Mexican-sourced heroin now accounts for nearly 90% of the total weight of U.S.-seized heroin analyzed in the U.S. Drug Enforcement Administration's (DEA's) Heroin Signature Program. In addition to Mexico serving as a transshipment point for Chinese fentanyl (a powerful synthetic opioid), the DEA suspects labs in Mexico may use precursor chemicals smuggled over the border from the United States to produce fentanyl.", "Mexican drug trafficking organizations pose the greatest crime threat to the United States, according to the DEA's 2018 National Drug Threat Assessment . These organizations engage in drug trafficking, money laundering, and other violent crimes. They traffic heroin, methamphetamine, cocaine, marijuana, and, increasingly, the powerful synthetic opioid fentanyl. ", "Mexico is a long-time recipient of U.S. counterdrug assistance, but cooperation was limited between the mid-1980s and mid-2000s due to U.S. distrust of Mexican officials and Mexican sensitivity about U.S. involvement in the country's internal affairs. Close cooperation resumed in 2007, when Mexican President Felipe Calder\u00f3n requested U.S. assistance to combat drug trafficking organizations, and worked with President George W. Bush to develop the M\u00e9rida Initiative. While initial U.S. funding for the initiative focused heavily on training and equipping Mexican security forces, U.S. assistance shifted over time to place more emphasis on strengthening Mexican institutions. ", "In 2011, the U.S. and Mexican governments agreed to a revised four-pillar strategy that prioritized (1) combating transnational criminal organizations through intelligence sharing and law enforcement operations; (2) institutionalizing the rule of law while protecting human rights through justice sector reform and forensic assistance; (3) creating a \"21 st century border\" while improving immigration enforcement in Mexico; and (4) building strong and resilient communities with pilot programs to address the root causes of violence and reduce drug demand. The M\u00e9rida Initiative has continued to evolve along with U.S. and Mexican security concerns. Recent programs have focused on combating opioid production and distribution, improving border controls and interdiction, training forensic experts, and combating money laundering. Nevertheless, organized crime-related homicides in Mexico and opioid-related deaths in the United States have surged, leading some critics to question the efficacy of bilateral efforts. ", "The future of the M\u00e9rida Initiative is unclear. Some observers predict L\u00f3pez Obrador may seek to emphasize anticorruption initiatives, social investments in at-risk youth, human rights, and drug policy reform as he did during his presidential campaign. Others maintain that L\u00f3pez Obrador has thus far accommodated the Trump Administration's emphasis on combating Central American migration and may back other U.S. priorities, such as combating the fentanyl trade. Other common interests may include countering human rights violations, combating weapons trafficking, and accelerating efforts against money laundering and corruption.", "There has been bipartisan support in Congress for the M\u00e9rida Initiative, which has accounted for the majority of U.S. foreign assistance to Mexico provided over the past decade (see Table 1 ). The FY2019 Consolidated Appropriations Act ( P.L. 116-6 ) provided some $145 million for accounts that fund the initiative ($68 million above the budget request). The increased resources are primarily for addressing the flow of U.S.-bound opioids. The joint explanatory statement accompanying the act ( H.Rept. 116-9 ) requires a State Department strategy on international efforts to combat opioids (including efforts in Mexico) and a report on how the M\u00e9rida Initiative is combating cocaine and methamphetamine flows. The Administration's FY2020 budget request asks Congress to provide $76.3 million for the M\u00e9rida Initiative."], "subsections": [{"section_title": "Department of Defense Assistance", "paragraphs": ["In contrast to Plan Colombia, the Department of Defense (DOD) did not play a primary role in designing the M\u00e9rida Initiative and is not providing assistance through M\u00e9rida accounts. However, DOD oversaw the procurement and delivery of equipment provided through the FMF account. Despite DOD's limited role in the M\u00e9rida Initiative, bilateral military cooperation has been increasing. DOD assistance aims to support Mexico's efforts to improve security in high-crime areas, track and capture suspects, strengthen border security, and disrupt illicit flows. ", "A variety of funding streams support DOD training and equipment programs. Some DOD equipment programs are funded by annual State Department appropriations for FMF, which totaled $5.0 million in FY2018. International Military Education and Training (IMET) funds, which totaled $1.5 million in FY2018, support training programs for the Mexican military, including courses in the United States. Apart from State Department funding, DOD provides additional training, equipping, and other support to Mexico that complements the M\u00e9rida Initiative through its own accounts. Individuals and units receiving DOD support are vetted for potential human rights issues in compliance with the Leahy Law. DOD programs in Mexico are overseen by U.S. Northern Command, which is located at Peterson Air Force Base in Colorado. DOD counternarcotics support to Mexico totaled approximately $63.3 million in FY2018. ", "Policymakers may want to receive periodic briefings on DOD efforts to guarantee that DOD programs are being adequately coordinated with M\u00e9rida Initiative efforts, complying with U.S. vetting requirements, and not reinforcing the militarization of public security in Mexico."], "subsections": []}, {"section_title": "Extraditions", "paragraphs": ["During the Calder\u00f3n government, extraditions were another indicator that the State Department used as an example of the M\u00e9rida Initiative's success. During the final years of the Calder\u00f3n government, Mexico extradited an average of 98 people per year to the United States, an increase over the prior administration. When President Pe\u00f1a Nieto took office, extraditions fell to 54 in 2013 but rose to a high of 76 in 2016 (see Figure 6 )."], "subsections": []}, {"section_title": "Human Rights99", "paragraphs": ["The U.S. Congress has expressed ongoing concerns about human rights conditions in Mexico. Congress has continued to monitor adherence to the Leahy vetting requirements that must be met under the Foreign Assistance Act (FAA) of 1961, as amended (22 U.S.C. 2378d), which pertains to State Department aid, and 10 U.S.C. 2249e, which guides DOD funding. DOD reportedly suspended assistance to a brigade based in Tlatlaya, Mexico, due to concerns about the brigade's potential involvement in the extrajudicial killings previously described. From FY2008 to FY2015, Congress made conditional 15% of U.S. assistance to the Mexican military and police until the State Department sent a report to appropriators verifying that Mexico was taking steps to comply with certain human rights standards. In FY2014, Mexico lost $5.5 million in funding due to human rights concerns. For FY2016-FY2019, human rights reporting requirements applied to FMF rather than to M\u00e9rida Initiative accounts. ", "U.S. assistance to Mexico has supported the Mexican government's efforts to reform its judicial system and to improve human rights conditions in the country. Congress has provided funding to support Mexico's transition from an inquisitorial justice system to an oral, adversarial, and accusatory system that aims to strengthen human rights protections for victims and the accused. The State Department has established a high-level human rights dialogue with Mexico. The U.S. Agency for International Development (USAID) supported Mexico's 2014-2018 human rights plan, including the development of legislation in compliance with international standards, prevention efforts, improved state responses to abuses, and expanded assistance to victims. One recent project addressed the way the Mexican government addresses cases of torture and enforced disappearances, another sought to help the government protect journalists and resolve crimes committed against them. In many of these areas, U.S. technical assistance to the government is complemented by support to think tanks and civil society organizations, including in the area of providing forensic assistance to help search for missing people.", "Congress may choose to augment M\u00e9rida Initiative funding for human rights programs, such as ongoing training programs for military and police, or to fund new efforts to support human rights organizations. Human rights conditions in Mexico, as well as compliance with conditions included in the FY2019 Consolidated Appropriations Act ( P.L. 116-6 ) are likely to be closely monitored. Some Members of Congress have written letters to U.S. and Mexican officials regarding human rights concerns, including allegations of extrajudicial killings by security forces, abuses of Central American migrants, and the use of spyware against human rights activists.", "U.S. policymakers may question how the L\u00f3pez Obrador administration moves to punish past human rights abusers, how it intends to prevent new abuses from occurring, and how the police and judicial reforms being implemented are bolstering human rights protections."], "subsections": []}, {"section_title": "Economic and Trade Relations108", "paragraphs": ["The United States and Mexico have a strong economic and trade relationship that has been bolstered through NAFTA. Since 1994, NAFTA has removed virtually all tariff and nontariff trade and investment barriers among partner countries and provided a rules-based mechanism to govern North American trade. Most economic studies show that the net economic effect of NAFTA on the United States and Mexico has been relatively small but positive, though there have been adjustment costs to some sectors in both countries. Further complicating assessments of NAFTA, not all trade-related job gains and losses since NAFTA entered into force can be entirely attributed to the agreement. Numerous other factors have affected trade trends, such as Mexico's trade-liberalization efforts, economic conditions, and currency fluctuations. ", "Mexico is the United States' third-largest trading partner. Mexico ranks third as a source of U.S. merchandise imports and second as an export market for U.S. goods. The United States is Mexico's most important export market for goods, with 80% of Mexican exports destined for the United States. Merchandise trade between the two countries in 2018 was six times higher (in nominal terms) than in 1993, the year NAFTA entered into force. The merchandise trade balance went from a U.S. surplus of $1.7 billion in 1993 (the year before NAFTA entered into force) to a widening deficit that reached $81.5 billion in 2018. In services, the United States had a trade surplus with Mexico of $7.4 billion in 2017 (latest available data); it largely consists of travel, transportation, business, and financial services. ", "Total trade (exports plus imports) amounted to $561.3 billion in 2018. Much of that bilateral trade occurs in the context of supply chains, as manufacturers in each country work together to create goods. The expansion of trade has resulted in the creation of vertical supply relationships, especially along the U.S.-Mexican border. The flow of intermediate inputs produced in the United States and exported to Mexico and the return flow of finished products increased the importance of the U.S.-Mexican border region as a production site.", "Foreign direct investment (FDI) is also an integral part of the bilateral economic relationship. The stock of U.S. FDI in Mexico increased from $15.2 billion in 1993 to $109.7 billion in 2017. Although the stock of Mexican FDI in the United States is much lower, it has also increased significantly since NAFTA, from $1.2 billion in 1993 to $18.0 billion in 2017.", "The Obama Administration worked with Mexico to balance border security with facilitating legitimate trade and travel, promote economic competitiveness, and pursue energy integration. The U.S.-Mexican High-Level Economic Dialogue, launched in 2013, was a bilateral initiative to advance economic and commercial priorities through annual Cabinet meetings. The High-Level Regulatory Cooperation Council launched in 2012 helped align regulatory principles. Trilateral (with Canada) cooperation occurred under the aegis of the North American Leadership Summits. ", "While those mechanisms have not continued under the Trump Administration, the bilateral Executive Steering Committee (ESC), which guides broad efforts along the border, and the Bridges and Border Crossings group on infrastructure have continued to meet. The U.S.-Mexico CEO Dialogue has also continued to convene biannual meetings to produce joint recommendations for the two governments. Mexican business leaders reportedly worked with U.S. executives, legislators, and governors to encourage the Trump Administration to back the proposed USMCA rather than just abandoning NAFTA."], "subsections": [{"section_title": "Trade Disputes", "paragraphs": ["Despite positive advances on many aspects of bilateral and trilateral economic relations, trade disputes continue. The United States and Mexico have had a number of trade disputes over the years, many of which have been resolved. Some of them have involved: country-of-origin labeling, dolphin-safe tuna labeling, and NAFTA trucking provisions. In 2017, Mexico and the United States concluded a suspension agreement on a U.S. antidumping and countervailing duty investigation on Mexican sugar exports to the United States in which Mexico agreed to certain limitations on its access to the U.S. sugar market. ", "In recent years, new trade disputes have emerged. In January 2018, President Trump announced new tariffs on imported solar panels and washing machines under the Trade Act of 1974 that included products coming from Mexico. In February 2019, U.S. Commerce Secretary Wilbur Ross announced that the United States intends to withdraw from a 2013 suspension agreement on fresh tomato exports from Mexico. The agreement effectively suspends an investigation by the U.S. International Trade Commission (USITC) into whether Mexican producers are dumping fresh tomatoes into the U.S. market. Mexico's ambassador to the United States has stated she is \"cautiously optimistic\" the United States and Mexico will agree to a new arrangement before a U.S. withdrawal. ", "The United States and Mexico are in another trade dispute over U.S. actions to impose tariffs on imports of steel and aluminum under Section 232 of the Trade Expansion Act of 1962, which authorizes the President to impose restrictions on certain imports based on national security threats. Using these authorities, on May 31, 2018, the United States imposed a 25% duty on steel imports and a 10% duty on aluminum imports from Mexico and Canada. In response, Mexico applied retaliatory tariffs of 5% to 25% on U.S. exports valued at approximately $3.6 billion on pork, apples, potatoes, and cheese, among other items. ", "On May 23, 2018, the Trump Administration initiated a Section 232 investigation into the imports of motor vehicles and automotive parts (83 FR 24735) to determine if those imports threaten to impair U.S. national security. "], "subsections": []}, {"section_title": "The Proposed USMCA119", "paragraphs": ["On November 30, 2018, the United States, Canada, and Mexico signed the proposed USMCA, which, if approved by Congress and ratified by Mexico and Canada, would replace NAFTA. The proposed USMCA would retain many of NAFTA's chapters, while making notable changes to others, including market access provisions for autos and agriculture products, and new rules on investment, government procurement, and intellectual property rights (IPR). It would add new chapters on digital trade, state-owned enterprises, and currency misalignment. ", "The USMCA would tighten rule of origin requirements for duty-free treatment of U.S. motor vehicle imports from Mexico. Under NAFTA, motor vehicles must contain 62.5% North American content, while all other vehicles and motor parts must contain 60% North American content to qualify for duty-free treatment. The new rules would require that 75% of a motor vehicle and 70% of its steel and aluminum originate in North America and that 40%-45% of auto content be made by workers earning at least $16 per hour. Side letters would exempt up to 2.6 million vehicles from Canada and Mexico annually from potential Section 232 auto tariffs. ", "USMCA would maintain the NAFTA state-to-state mechanism for resolving most disputes, as well as NAFTA's binational mechanism for reviewing and settling trade remedy disputes. However, it would maintain an investor-state dispute settlement (ISDS) process only between the United States and Mexico, without Canada, but limit its scope to government contracts in oil, natural gas, power generation, infrastructure, and telecommunications sectors. It would also maintain U.S.-Mexico ISDS in other sectors provided the claimant exhausts national remedies first, among other changes and new limitations.", "Policymakers may consider numerous issues related to U.S.-Mexico trade as they debate the proposed USMCA. Some issues could include the timetable for congressional consideration under Trade Promotion Authority (TPA), whether the proposed USMCA meets TPA's negotiating objectives and other requirements, and the impact of the agreement on U.S.-Mexico trade relations. In April 2019, the USITC completed a required study on the possible economic impact of a USMCA on the United States. The report estimates that the agreement would have a very small but positive impact on the U.S. economy, potentially raising U.S. real GDP by \"0.35% and U.S. employment by 176,000 jobs (0.12 %).\" Other policymakers contend that the United States lift steel and aluminum tariffs on imports from Canada and Mexico before the agreement is considered by Congress and state that the tariffs act as a barrier hindering Mexican and Canadian ratification of the proposed USMCA.", "Congressional objectives and concerns are likely to shape timing of congressional consideration of the proposed USMCA. Some policymakers view the agreement as vital for U.S. firms, workers, and farmers, and believe that the updated agreement would benefit U.S. economic interests. Other issues of concern include a lack of worker rights protection in Mexico and the enforceability of labor provisions, the scaling back of ISDS provisions, which could affect U.S. investors, and possible adverse effects of auto rules of origin on U.S. automakers. Although USMCA would revise NAFTA labor provisions and provide the same dispute mechanism as other parts of the agreement, some critics contend that USMCA has the same limitations as NAFTA; they allege that the proposed USMCA enforcement tools do not go far enough to ensure the protection of worker rights to organize and bargain collectively. It is unclear whether labor reforms that have passed the Mexican Congress will be enough to assuage those concerns."], "subsections": []}]}, {"section_title": "Migration and Border Issues", "paragraphs": [], "subsections": [{"section_title": "Mexican-U.S. Immigration Issues", "paragraphs": ["Immigration policy has been a subject of congressional concern over many decades, with much of the debate focused on how to prevent unauthorized migration and address the large population of unauthorized migrants living in the United States. Mexico's status as both the largest source of migrants in the United States and a continental neighbor means that U.S. migration policies\u2014including stepped-up border and interior enforcement\u2014have primarily affected Mexicans. Beginning in FY2012, foreign nationals from countries other than Mexico began to comprise a growing percentage of total apprehensions. Due to a number of factors, more Mexicans have been leaving the United States than arriving. Nevertheless, protecting the rights of Mexicans living in the United States, including those who are unauthorized, remains a top Mexican government priority. ", "Since the mid-2000s, successive Mexican governments have supported efforts to enact immigration reform in the United States, while being careful not to appear to be infringing upon U.S. authority to make and enforce immigration laws. Mexico has made efforts to combat transmigration by unauthorized migrants and worked with U.S. law enforcement to combat alien smuggling and human trafficking. In FY2018, the Trump Administration removed (deported) some 141,045 Mexicans, as compared to 128,765 removals in FY2017. During the Obama Administration, some of Mexico's past concerns about U.S. removal policies, including nighttime deportations and issues concerning the use of force by some U.S. Border Patrol officials, were addressed through bilateral migration talks and letters of agreement. ", "President Trump's shifts in U.S. immigration policies have tested U.S.-Mexican relations. His repeated assertions that Mexico will pay for a border wall resulted in President Pe\u00f1a Nieto canceling a White House meeting in January 2017 and continued to strain relations throughout his term. The Mexican government expressed regret after the Administration's decision to rescind the Deferred Action for Childhood Arrivals (DACA) initiative, which has provided work authorization and relief from removal for migrants brought to the United States as children, but pledged to assist DACA beneficiaries who return to Mexico. In June 2018, Mexico criticized U.S. \"zero tolerance\" immigration policies. Despite these developments, Mexico has continued to work with the United States on migration management and border issues.", "In E.O. 13678, the Trump Administration broadened the categories of authorized immigrants prioritized for removal. As a result, the profile of Mexican deportees now include more individuals who have spent many decades in the United States than in recent years (when the Obama Administration had focused on recent border crossers and those with criminal records). The potential for large-scale removal of Mexican nationals present in the United States without legal status is an ongoing concern of the Mexican government that reportedly has been expressed to Trump Administration officials. Mexico's consular network in the United States has bolstered the services offered to Mexicans in the United States, including access to identity documents and legal counsel. It has launched a 24-hour hotline and mobile consultants to provide support, both practical and psychological, to those who may have experienced abuse or are facing removal. ", "The Mexican government has expressed hope that the U.S. Congress will develop a solution to resolve the phased ending of the DACA initiative. As of July 2018, some 561,400 Mexicans brought to the United States as children had received work authorizations and relief from removal through DACA. Many DACA recipients born in Mexico have never visited the country, and some do not speak Spanish."], "subsections": []}, {"section_title": "Dealing with Unauthorized Migration, Including from Central America137", "paragraphs": ["Since 2014, Mexico has helped the United States manage a surge in unauthorized migration from the \"Northern Triangle\" (El Salvador, Guatemala, and Honduras). Collectively, those countries have overtaken Mexico as the primary source for migrants apprehended at the U.S.-Mexico border. From 2015 to November 2018, Mexico reported apprehending almost 524,000 migrants and asylum seekers from the Northern Triangle. As U.S. asylum policies have tightened, Mexico also has absorbed more Central Americans in need of humanitarian protection (see Figure 7 ). ", "Mexico has received U.S. assistance for its immigration control efforts through the M\u00e9rida Initiative. Mexico has received support for its humanitarian protection efforts through global U.S. Migration and Refugee Assistance (MRA) implemented by the U.N. High Commissioner for Refugees (UNHCR) and others. Some U.S. policymakers have praised Mexico's management of these migration flows, whereas others have questioned Mexico's ability to protect migrants from abuse and to provide asylum to those in need of protection. ", "The L\u00f3pez Obrador administration has a broad vision of addressing immigration by protecting human rights, decriminalizing migration, and cooperating with Central America. Implementing this vision has thus far proved difficult in an environment of increased flows from the Northern Triangle and pressure from the United States to limit them. The Mexican government has long maintained that the best way to stop illegal immigration from Central America is to address the insecurity and lack of opportunity there, but fiscal limitations limit its ability to support Central American efforts to address those challenges. As previously mentioned, the U.S. and Mexican governments issued a joint statement in December 2018 pledging to boost public and private investment in Central America. On March 29, 2019, the Trump Administration announced that it intends to end foreign assistance programs for the Northern Triangle countries for failing to combat unauthorized migration, appearing to reverse its prior pledge. The State Department has indicated that the decision will affect approximately $450 million in FY2018 funding. ", "The L\u00f3pez Obrador administration has provided humanitarian relief to Central American migrants in Mexico, but not increased funding for the migration agency or asylum system. Under pressure from the United States and with its migration stations overcapacity, the Mexican government has recently limited protections and increased deportations, particularly for those traveling in large groups or caravans, to discourage future flows. From April 1-22, 2019, Mexico removed nearly 11,800 people, up from 9,650 removed in the month of April 2018. Mexico's asylum system is underfunded and overwhelmed; it received 29,000 applications in 2018 even as 80% of applications from 2017 still awaited resolution. ", "President L\u00f3pez Obrador's desire to maintain positive relations with the U.S. government has prompted domestic criticism and may cause strain in its relations with some Central American governments. His government's decision to allow Central American asylum seekers to be returned to Mexico under the U.S. Migrant Protection Protocols (MPP) to obtain humanitarian visas\u2014rather than challenging the MPP\u2014has put pressure on local governments and aid organizations to assist the migrants. Many state it may also be putting migrants' lives at risk; many Mexican border cities are among the countries most dangerous."], "subsections": []}, {"section_title": "Modernizing the U.S.-Mexican Border", "paragraphs": ["Since the terrorist attacks of September 11, 2001, there have been significant delays and unpredictable wait times at the U.S.-Mexican border. The majority of U.S.-Mexican trade passes through a port of entry along the southwestern border, often more than once, due to the increasing integration of manufacturing processes in the United States and Mexico. Past bilateral efforts discussed below have contributed to reductions in wait times at some points of entry, but infrastructure and staffing issues remain on both the U.S. and Mexican sides of the border. One effort that has continued is the use of public-private partnerships to address those issues.", "On May 19, 2010, the United States and Mexico declared their intent to collaborate on enhancing the U.S.-Mexican border as part of pillar three of the M\u00e9rida Initiative. A Twenty-First Century Border Bilateral Executive Steering Committee (ESC) has met since then, most recently in November 2017, to develop binational action plans and oversee implementation of those plans. The plans set goals within broad objectives: coordinating infrastructure development, expanding trusted traveler and shipment programs, establishing pilot projects for cargo preclearance, improving cross-border commerce and ties, and bolstering information sharing among law enforcement agencies. In 2015, the two governments opened the first railway bridge in 100 years at Brownsville-Matamoros and launched three cargo pre-inspection test locations where U.S. and Mexican customs officials are working together. A Mexican law allowing U.S. customs personnel to carry arms in Mexico hastened these bilateral efforts.", "In recent months, wait times have lengthened as a result of U.S. efforts to deal with an influx of Central American asylum seekers and to hasten construction of additional border barriers. Businesses have been concerned that unless L\u00f3pez Obrador speaks out, President Trump may adopt policies that could exacerbate the delays at the border resulting from his decision to transfer customs personnel from ports of entry to perform migration management duties. As an example, President Trump has recently threatened to close the U.S.-Mexico border or to impose 25% tariffs on Mexican motor vehicle exports to the United States if the Mexican government does not increase its efforts to stop U.S.-bound migrants over the coming year. Mexico has recently urged the U.S. government to reconsider policies resulting in extended border delays.", "As Congress carries out its oversight function on U.S.-Mexican migration and border issues, questions that may arise include the following: How well is Mexico fulfilling its pledges to increase security along its northern and southern borders and to enforce its immigration laws? What is Mexico doing to address Central American migration through its territory? What is the current level of bilateral cooperation on border security and immigration and border matters, and how might that cooperation be improved? How well are the U.S. and Mexican governments balancing security and trade concerns along the U.S.-Mexican border? To what extent would the construction of a new border wall affect trade and migration flows in the region?"], "subsections": []}]}, {"section_title": "Energy153", "paragraphs": ["The future of energy production in Mexico is important for Mexico's economic growth and for the U.S. energy sector. Mexico has considerable oil and gas resources, but its state oil company (Pemex), has struggled to counter declining production and postponed needed investments due to fiscal challenges. Mexico's 2013 constitutional reforms on energy opened up oil, electricity, gas, transmission, production, and sales to private and foreign investment while keeping ownership of Mexico's hydrocarbons under state control, as established in its 1917 constitution. ", "The 2013 reforms created opportunities for U.S. businesses in exploration, pipeline construction and ownership, natural gas production, and commercial gasoline sales. Although the reforms did not privatize Pemex, they did expose the company to competition and hastened its entrance into joint ventures. Because of the reforms, Mexico has received more than $160 billion in promised investment. However, the reforms ended subsidies that kept gasoline prices low for Mexican consumers and failed to reverse production declines and ongoing problems within Pemex. Pemex's debt increased by more than 60% from 2013 to 2017. While analysts still predict that the reforms will bring long-term benefits to the country, the Pe\u00f1a Nieto administration oversold their short-term impacts, which has emboldened those within the L\u00f3pez Obrador government who have opposed private involvement in the sector.", "The United States sought to help lock in Mexico's energy reforms through the NAFTA renegotiations. NAFTA includes some reservations for investment in Mexico's energy sector. The proposed USMCA would reinforce Mexico's 2013 constitutional reforms and the current legal framework for private energy projects in Mexico. It also would apply similar investor-state dispute settlement mechanisms that currently exist in NAFTA to the oil and gas, infrastructure, and other energy sectors. In addition, the free trade agreement would allow for expedited exports of U.S. natural gas to Mexico, which have increased about 130% since the 2013 reforms.", "Private sector trade, innovation, and investment have created a North American energy market that is interdependent and multidirectional, with cross-border gas pipelines and liquefied natural gas (LNG) shipments from the United States to Mexico surging. In 2018, the value of U.S. petroleum products exports to Mexico totaled $30.6 billion, nearly double the value of U.S. energy imports from Mexico ($15.8 billion). Some experts estimate that the United States, Mexico, and Canada represent 20% of global oil and gas supply, as well as 20%-25% of the expected additions to international supply over the next 25 years. They believe that deepened energy cooperation with Mexico will give North America an industrial advantage. ", "L\u00f3pez Obrador's plans for Mexico's energy sector are still developing. He opposed the 2013 reforms, but he and his top officials have said that his government will honor existing contracts that do not involve any corruption. Despite that commitment, the new government has halted future rounds of auctions and plans to upgrade existing refineries and construct a new refinery in Tabasco rather than importing U.S. natural gas. L\u00f3pez Obrador's energy plans also focus on revitalizing Pemex, although the company's financial problems have already become a financial burden for the government and its credit rating has been downgraded. The government's decision to halt new auctions in wind and solar energy, which had also attracted significant investment as a result of the reforms, has led some environmentalists to challenge L\u00f3pez Obrador's commitment to a clean energy future for Mexico.", "Opportunities exist for continued U.S.-Mexican energy cooperation in the hydrocarbons sector, but the future of those efforts may depend on the policies of the L\u00f3pez Obrador government. Leases have been awarded in the Gulf of Mexico under the U.S.-Mexico Transboundary Agreement, which was approved by Congress in December 2013 ( P.L. 113-67 ). Bilateral efforts to ensure that hydrocarbon resources are developed without unduly damaging the environment could continue, possibly through collaboration between Mexican and U.S. regulatory entities. Educational exchanges and training opportunities for Mexicans working in the petroleum sector could expand. The United States and Mexico could build upon efforts to provide natural gas resources to help reduce energy costs in Central America and connect Mexico to the Central American electricity grid, as discussed during conferences on Central America cohosted by both governments in 2017 and in 2018. Analysts also have urged the United States to provide more technical assistance to Mexico\u2014particularly in deepwater and shale exploration.", "In addition to monitoring energy-related issues as they pertain to NAFTA, oversight questions may focus on how the Transboundary Hydrocarbons Agreement is implemented, the extent to which Mexico is developing capable energy-sector regulators, and the effects of transnational crime groups and violence on Mexico's energy industry and the safety of foreign workers employed in the energy sector. An emerging issue for congressional oversight may involve the fairness of policies adopted by the incoming Mexican government toward foreign investors."], "subsections": []}, {"section_title": "Water and Floodplain Issues162", "paragraphs": ["The United States and Mexico share the waters of the Colorado River and the Rio Grande. These shared rivers have long presented complex issues leading to cooperation and conflict in the U.S.-Mexican border region and between the United States and Mexico. ", "A bilateral water treaty from 1944 (the 1944 Water Treaty) and other binational agreements guide how the two governments share the flows of these rivers. The binational International Boundary and Water Commission (IBWC) administers these agreements and includes a U.S. Section that operates under foreign policy guidance from the U.S. Department of State. Since 1944, the IBWC has been the principal venue for addressing river-related disputes between the United States and Mexico. The 1944 Water Treaty authorizes the IBWC to develop rules and to issue proposed decisions, called minutes , regarding matters related to the treaty's execution and interpretation. ", "Under the 1944 Water Treaty, the United States is required to provide Mexico annually with 1.5 million acre-feet (AF) of Colorado River water. U.S. deliveries to Mexico in the Rio Grande basin near El Paso/Ciudad Ju\u00e1rez occur annually under a 1906 binational convention, whereas Mexico's deliveries downstream of Fort Quitman, TX, are established in the 1944 Water Treaty. Mexico is to deliver to the United States a minimum amount during a five-year cycle. IBWC also administers other binational boundary and water-related agreements and projects for flood control and sanitation (principally wastewater treatment facilities) and binational reservoirs.", "Recent Developments in the Colorado River Basin . The United States continues to meet its Colorado River annual delivery requirements to Mexico pursuant to the 1944 Water Treaty. Recent IBWC actions on the Colorado River have focused on how to manage the Colorado River's water and infrastructure to improve water availability during drought and to restore and protect riverine ecosystems. The most recent minute governing basin operations, Minute 323 (signed in September 2017) is a set of binational measures that provides for binational cooperative basin water management, including environmental flows to restore riverine habitat. Minute 323 also provides for Mexico to share in cutbacks during shortage conditions in the U.S. portion of the basin, including delivery reductions under Drought Contingency Plans that were authorized by Congress in April 2019. In addition, Minute 323 designates a \"Mexican Water Reserve\" through which Mexico can delay its water deliveries from the United States and store its delayed deliveries upstream at Lake Mead, thereby increasing the lake's elevation. For the Colorado River basin, issues before Congress may be largely related to oversight of Minute 323 implementation and water management associated with potential shortage conditions.", "Recent Development in the Rio Grande Basin . On multiple occasions since 1994, Mexico has not met its Rio Grande delivery obligations within the five-year cycle established by the 1944 Water Treaty, most recently during the five-year cycle from 2010 to 2015. Mexico made up for those shortfalls in subsequent five-year cycles, as authorized under the 1944 Treaty. The October 2015 to October 2020 cycle is under way. Mexico offset its below-target deliveries for the first year of this cycle with additional deliveries in the second year. IBWC indicates that Mexico delivered less than its 350,000 AF in the third year of the cycle; however, higher deliveries in the second year resulted in Mexico's deliveries being almost at 98% of the three-year cumulative delivery target. In recent years, IBWC reportedly has been working toward a binational model for water management in the Rio Grande and obtaining input from binational working groups with the objective of improved predictability and reliability in water deliveries and treaty compliance.", "To date, Congress has been primarily involved in conducting oversight through reporting requirements for the U.S. Department of State. The FY2019 Consolidated Appropriations Act ( P.L. 116-6 ) includes a reporting requirement from the Senate Appropriations Subcommittee on State, Foreign Operations, and Related Programs ( S.Rept. 115-282 ):", "Not later than 45 days after enactment of the act, the Secretary of State, in consultation with the IBWC Commissioner, shall submit to the Committee an update to the report required in section division J of Public Law 113\u2013325 detailing efforts to establish mechanisms to improve transparency of data on, and predictability of, water deliveries from Mexico to the United States to meet annual water apportionments to the Rio Grande, in accordance with the 1944 Treaty between the United States and Mexico Respecting Utilization of Waters of the Colorado and Tijuana Rivers and of the Rio Grande, and actions taken to minimize or eliminate future water deficits to the United States.", "Pursuant to the various reporting requirements, various reports have been delivered to various committees of Congress, including in the spring of 2019. ", "Recent Development in Wastewater and River Pollution . On border wastewater issues, congressional appropriators have shown interest in increasing oversight through statements and reporting requirements related to the pollution in the Tijuana River. Authorizing committees have engaged on issues related to wastewater management near Nogales, AZ. The FY2019 Consolidated Appropriations Act ( P.L. 116-6 ) includes a reporting requirement stating that", "Not later than 180 days after enactment of the act, the IBWC shall submit a report to the Committee quantifying the total annual volume and composition of transboundary flows that enter the United States from Mexico in the Tijuana watershed, as well as the amount of time between each discharge from Mexico and the notification of the U.S. Government and local communities, as recorded\u2026by the IBWC. The report shall also include a description of steps taken by the IBWC and other relevant Federal agencies to implement additional mitigation measures to address increased flows in 2017 and 2018. ", "Border Floodplain Encroachment . Discussion of increased U.S. security measures along the border, particularly the border between Texas and Mexico, may revive concerns regarding compliance with treaty provisions related to the construction of structures in the binational floodplain that increase flood risk. "], "subsections": []}, {"section_title": "Environment and Renewable Energy Policy", "paragraphs": ["In addition to the water management and conservation issues addressed by the IBWC, the U.S. and Mexican governments have worked together on broader environmental issues in the border region since signing the La Paz Agreement in 1983. Led by the U.S. Environmental Protection Agency (EPA) and the Mexican secretary of environmental resources, the agreement committed the two governments to regularly consult and review environmental concerns. Federal funding and interest in border environmental issues peaked in the 1990s during the negotiations for and implementation of the environmental side agreement to NAFTA that created the North American Development Bank (NADB) and the Border Environment Cooperation Commission (BECC). ", "Even after federal funding for border environmental projects decreased post-2000, the governments have continued to design and implement binational environmental programs. The current 10-year border program, Border 2020, is focused on cooperation in five areas: (1) reducing air pollution; (2) improving access to clean water; (3) promoting materials and waste management; (4) enhancing joint preparedness for environmental response; and (5) enhancing environmental stewardship. The Trump Administration's FY2020 budget request would zero out funding and staff for the U.S.-Mexican border programs run by the EPA. In FY2018 and FY2019, the Administration did not requested any funding for the programs, but Congress provided $3.0 million in EPA funding each year.", "In 2009, President Obama and then-President Calder\u00f3n announced the Bilateral Framework on Clean Energy and Climate Change to jointly develop clean energy sources and encourage investment in climate-friendly technologies. Among others, its goals included enhancing renewable energy, combating climate change, and strengthening the reliability of cross-border electricity grids. USAID and Mexico also expanded cooperation through the Mexico Global Climate Change (GCC) Program, which began in 2010 and provided $50 million in funding through FY2016, although bilateral efforts on climate change began around 1990. By 2016, environmental protection and clean energy became a priority for North American cooperation. ", "Mexico, Canada, and the United States all became parties to the Paris Agreement, which entered into force on November 4, 2016, under the U.N. Framework Convention on Climate Change. The Mexican Congress and the Canadian parliament ratified the Paris Agreement. In contrast, U.S. executive branch officials stated that the Paris Agreement is an executive agreement not requiring Senate advice and consent to ratification. President Obama signed an instrument of acceptance on behalf of the United States on August 29, 2016, without submitting it to Congress. ", "On June 1, 2017, President Trump announced his intention to withdraw from the Paris Agreement. The Administration's FY2018 budget request, released on May 23, 2017, proposed to \"eliminate U.S. funding for the Green Climate Fund (GCF) in FY2018, in alignment with the President's promise to cease payments to the United Nations' climate change programs.\" The FY2018 budget request also eliminates funding for Global Climate Change programs run by USAID, the Department of State, and the Department of the Treasury. Congress did not provide funding for those programs in FY2018. ", "President L\u00f3pez Obrador's 2018-2014 plan for the environment includes pledges to adjust government policies to comply with the Paris Accord and meet Mexico's Nationally Determine Contribution (NDC). It is unlikely that those pledges will be met, however, as L\u00f3pez Obrador has also pledged to bolster hydrocarbons production rather than renewable energy sources. Environmental groups are concerned about L\u00f3pez Obrador's plans to build a coal-fired refinery, which would reverse prior pledges to reduce the country's coal-based electricity generation beginning in 2017. According to data from Mexico's National Institute of Ecology and Climate Change, Mexico would need to invest $8 billion per year from 2014 to 2030 to meet its NDC. In 2017, the country reportedly invested $2.4 billion. "], "subsections": []}, {"section_title": "Educational Exchanges and Research", "paragraphs": ["Educational and research exchanges between the United States and Mexico have been occurring for decades, but they rose higher in the bilateral agenda during the Obama Administration as part of the High-Level Economic Dialogue. In 2011, President Obama established a program called \"100,000 Strong in the Americas\" to boost the number of U.S. students studying in Latin America (including Mexico) to 100,000 (and vice versa) by 2020. Similarly, President Pe\u00f1a Nieto implemented Proyecta 100,000, which aimed to have 100,000 Mexican students and researchers studying in the United States by 2018. Together, the U.S. and Mexican governments launched a Bilateral Forum on Higher Education, Innovation, and Research (FOBESII) in May 2013, which led to more than 80 partnerships between U.S. and Mexican universities. Both programs are still being implemented, albeit mostly with private funding.", "Country and bilateral efforts face continued challenges. In 2016-2017 (the latest year available), the number of U.S. students studying in Mexico increased by 10.8% compared to 2015-2016. In contrast, the number of Mexicans studying in the United States decreased by 8.9% in 2017-2018 as compared to the previous year. Mexico ranks ninth on the Institute of International Education's list of countries with students studying in the United States. China is number one and India is number two. A lack of scholarship funding and a lack of English language skills have been barriers for many Mexican students."], "subsections": [{"section_title": "Appendix. Structural Reforms", "paragraphs": [], "subsections": []}]}, {"section_title": "Structural Reforms: Enacted but Implemented Unevenly", "paragraphs": ["Many analysts praised President Pe\u00f1a Nieto and his advisers for shepherding structural reforms through the Mexican Congress but predicted that the reforms' impact would depend on their implementation. Mexico's ranking in the World Economic Forum's Global Competiveness Index for 2017 improved, in part due to some of the reforms. Nevertheless, critics have alleged that votes in favor of the reforms \"were duly purchased\" by the PRI.\"", "Some of Mexico's reforms have faced problems due to issues in implementation; others have faced opposition from entrenched interest groups. Still others have faced unfavorable global conditions. Fiscal reforms faced challenges in tax collection, and a 2017 Supreme Court ruling reportedly watered down the telecommunications reform. Teachers unions, particularly in southern Mexico, vehemently opposed education reforms requiring teacher evaluations and accountability measures. In June 2016, 8 people died and more than 100 were injured after unions and police clashed in Oaxaca. Although Mexico's energy sector has attracted significant international investment, low global oil prices thus far have rendered shale resources and other unconventional fields unfeasible to develop. "], "subsections": []}]}]}}
{"id": "R45489", "title": "Recent Migration to the United States from Central America: Frequently Asked Questions", "released_date": "2019-01-29T00:00:00", "summary": ["Over the last decade, migration to the United States from Central America\u2014in particular from El Salvador, Guatemala, and Honduras (known collectively as the Northern Triangle)\u2014has increased considerably. Families migrating from this region, many seeking asylum, have made up an increasing share of the migrants seeking admission to the United States at the U.S.-Mexico border. In the past year, news reports of migrant \"caravans\" from the Northern Triangle traveling toward the United States have sparked intense interest and questions from Congress.", "Many factors, both in their countries of origin and elsewhere, contribute to people's decisions to emigrate from the Northern Triangle. Weak institutions and corrupt government officials, chronic poverty, rising levels of crime, and demand for illicit drugs result in insecurity and citizens' low levels of confidence in government institutions. These \"push\" factors intersect with \"pull\" factors attracting migrants to the United States, including economic and educational opportunities and a desire to reunify with family members.", "Addressing these factors is complex. Under the U.S. Strategy for Engagement in Central America, the United States is working with Central American governments to promote economic prosperity, improve security, and strengthen governance in the region. Since 2014, Mexico has helped the United States manage flows of Central American migrants, including a recent decision to allow certain U.S.-bound asylum seekers to remain in Mexico while awaiting U.S. immigration proceedings. The United Nations High Commissioner for Refugees (UNHCR)\u2014in collaboration with local and federal governments and civil society\u2014is providing immediate and longer-term support for Mexico's refugee agency and migrants in transit.", "Central Americans who wish to request asylum in the United States may do so at a U.S. port of entry before a Customs and Border Protection (CBP) officer or upon apprehension by a CBP officer between U.S. ports of entry. Those requesting asylum at the border undergo screening to determine whether they can pursue an asylum claim. To receive asylum, a foreign national must establish, among other requirements, that he or she is unable or unwilling to return to his or her home country because of past persecution or a well-founded fear of future persecution based on one of five protected grounds (race, religion, nationality, membership in a particular social group, or political opinion). In 2018, President Trump, the Department of Homeland Security (DHS), and the Department of Justice (DOJ) took various actions to tighten the U.S. asylum system. These actions have been met with legal challenges. For example, on November 9, 2018, the President issued a presidential proclamation to suspend immediately the entry into the United States of aliens who cross the Southwest border between ports of entry. This proclamation and a related DHS-DOJ rule are being challenged in federal court.", "Chapter 15, Title 10 of the U.S. Code provides general legislative authority for the Armed Forces to provide certain types of support to federal, state, and local law enforcement agencies. In October 2018, active-duty personnel were deployed to the Southwest border to provide assistance in air and ground transportation, logistics support, engineering capabilities and equipment, medical support, housing, and planning support. The Posse Comitatus Act constrains the manner in which military personnel may be used in a law enforcement capacity at the border. President Trump has contemplated proclaiming a national emergency pursuant to the National Emergencies Act (NEA) in order to fund a physical barrier at the southern border with Mexico using DOD funds.", "Congress provided the President with significant discretion to reduce foreign assistance to Central America in FY2018, dependent on the governments of El Salvador, Guatemala, and Honduras addressing a variety of congressional concerns, including improving border security, combating corruption, and protecting human rights. The President's ability to modify assistance to the Northern Triangle for the remainder of FY2019 will depend on provisions Congress may include in future appropriations legislation."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Over the last decade, migration to the United States from Central America\u2014in particular from El Salvador, Guatemala, and Honduras (known collectively as the Northern Triangle)\u2014has increased considerably. From 2006 to 2016, the number of individuals living in the United States who were born in the Northern Triangle grew from 2.2 million to almost 3 million; this increase (37%) was more than twice the increase for the total foreign-born population (16%). During the same period, the foreign-born population from Mexico living in the United States held steady at 11.5 million (which is more than any other country-of-birth group). In 2016, the foreign-born population from the Northern Triangle comprised less than 1.0% of the U.S. population and 6.8% of the 43.7 million foreign-born residents of the United States, up from 5.8% in 2006. ", "Even though total apprehensions of illegal border crossers were at a 45-year low in FY2017, the number of families from the Northern Triangle apprehended at the U.S.-Mexico border has increased in recent years. While earlier migrants apprehended at the Southwest border were predominantly single, adult males from Mexico, currently the majority of apprehended migrants are families and unaccompanied children, and the majority of apprehended migrants come from the Northern Triangle. An increasing share of those arriving at the Southwest border are requesting asylum, some at official ports of entry and others after entering the United States \"without inspection\" (i.e., illegally) between U.S. ports of entry. This is adding to a large backlog of asylum cases in U.S. immigration courts.", "In the past year, news reports of migrant \"caravans\" from the Northern Triangle traveling toward the U.S. border have sparked intense interest and many questions from Congress, including the following: What factors are contributing to the increase in migration from the Northern Triangle to the United States? Is the choice to migrate in large groups a new trend? How are the United States, Mexico, and Central American governments responding? How are U.S. policies at the border\u2014including security screening, removal proceedings, military involvement, and asylum processing\u2014being implemented? This report addresses these and other frequently asked questions."], "subsections": [{"section_title": "How do current levels of Central American migrants apprehended at the Southwest border of the United States compare with earlier apprehension levels for Central Americans?7", "paragraphs": ["The increase in the number of Central American migrants apprehended at the Southwest border is occurring within the context of historically low levels of total alien apprehensions (see Figure 1 ). Apprehensions of migrants of all nationalities increased consistently beginning in 1960, fluctuated between two peaks of 1.62 million in FY1986 and 1.64 million in FY2000, and then declined to a 45-year low of approximately 304,000 in FY2017. Apprehensions increased in FY2018 to 397,000, which was comparable to the annual Southwest border average (401,000) for the most recent 10-year period (FY2009-FY2018). ", "Two demographic shifts, illustrated in the apprehension data, characterize recent migrant flows. First, over the past two decades the national origins of apprehended aliens have changed. In FY2000, almost all Southwest border apprehensions (98%) were of Mexican nationals. Beginning in FY2012, however, the percentage of apprehended aliens from Honduras, Guatemala, and El Salvador started to increase as a share of total apprehensions. By FY2018, foreign nationals from those three countries made up 52% of all apprehensions. Second, the type of migrants apprehended has also shifted. In the past, single adult males made up over 90% of apprehended aliens. Currently, the majority of apprehended migrants are families and unaccompanied children. From FY2012 to FY2018, the predominant national origins of such families changed from Mexico to the Northern Triangle countries (see Figure 2 ). (For more information, see CRS Report R45266, The Trump Administration's \"Zero Tolerance\" Immigration Enforcement Policy .)"], "subsections": []}, {"section_title": "Why are people leaving the Northern Triangle countries of El Salvador, Guatemala, and Honduras?12", "paragraphs": ["Many factors\u2014including those in their countries of origin, destination countries (often the United States), and other countries\u2014contribute to people's decisions to emigrate from the Northern Triangle. ", "Drivers of migration are interrelated, often reinforcing one another. Over time, weak institutions and corrupt government officials, economic growth that does not significantly reduce chronic poverty, rising levels of crime, and demand for illicit drugs result in insecurity and citizens' low levels of confidence in government institutions. These in turn contribute to an increased desire to leave a country. ", "The Northern Triangle countries have long histories of autocratic rule, weak institutions, and corruption. A lack of political will and capacity, rampant bribery and embezzlement of state funds, and some of the lowest tax collection rates in Latin America divert and diminish resources, leaving state institutions and programs underfunded. These problems also limit the governments' abilities to respond to crises such as natural disasters and food insecurity. All of these factors help perpetuate chronic poverty. While often cited as a leading cause of emigration from the Northern Triangle, poverty alone does not explain it.", "Over the past decade, transnational criminal organizations have used the Central American corridor for a range of illicit activities, including trafficking approximately 90% of cocaine bound for the United States. As a result, Northern Triangle countries have experienced extremely elevated homicide rates and general crime committed by drug traffickers, gangs, and other criminal groups. For instance, clashes between street gangs and, in El Salvador, between gangs and security forces, have paralyzed cities and some rural areas. A recent study found that the probability that an individual intends to migrate is 10-15 percentage points higher for Salvadorans and Hondurans who have been victims of multiple crimes than for those who have not.", "Finally, Central America has always been particularly subject to climate variability. According to the World Risk Index, Guatemala and El Salvador are among the 15 countries in the world most exposed to natural disasters, especially earthquakes and droughts. About one-fourth of those employed in the Northern Triangle work in the agriculture sector; widespread crop failures can have a devastating impact on people's livelihoods and ability to feed their families. According to the 2018 Global Hunger Index, Guatemala and Honduras ranked second and third in hunger levels in Central America and the Caribbean, behind Haiti. Research indicates that more intense and erratic weather patterns in recent years are strongly linked to food insecurity and migration. ", "(For more information, see CRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for Congress ; CRS Report RL34027, Honduras: Background and U.S. Relations ; CRS Report R43616, El Salvador: Background and U.S. Relations ; CRS Report R42580, Guatemala: Political and Socioeconomic Conditions and U.S. Relations ; and CRS Report RL34112, Gangs in Central America .)"], "subsections": []}, {"section_title": "What factors are attracting people from the Northern Triangle to the United States?23", "paragraphs": ["The factors discussed above intersect with factors attracting migrants to the United States. Economic opportunity may motivate Northern Triangle families and unaccompanied children to migrate. Despite challenging labor market conditions for low-skilled minority youth in the United States, economic prospects for industrial sectors employing low-skilled workers have improved recently. Educational opportunities may also be a motivating factor in migration, as perceptions of free public education through high school may be widespread among young migrants. ", "Family reunification is a key motive, as many migrants have family members among the sizable Salvadoran, Guatemalan, and Honduran foreign-born populations residing in the United States. While the impacts of actual and perceived U.S. immigration policies have been widely debated, it remains unclear if, and how, specific immigration policies have motivated families and children to migrate to the United States. Some contend that the United States' asylum policy, which allows asylum seekers to remain in the United States while they await a decision on their cases, has encouraged recent family and unaccompanied child migration to the country. Currently, immigration courts face a backlog of over 700,000 asylum cases, resulting in wait times of months or years, and a substantial portion of asylum seekers fail to appear in court. Others have argued that the revised humanitarian relief policies for unaccompanied children included in the Trafficking Victims Protection Reauthorization Act (TVPRA) of 2008, which expanded immigration relief options for such children, fostered a similar result among this migrant population. (For more information, see archived CRS Report R43628, Unaccompanied Alien Children: Potential Factors Contributing to Recent Immigration .)"], "subsections": []}, {"section_title": "Why do some migrants choose to travel in large groups? Is this a new phenomenon?26", "paragraphs": ["Migrants from the Northern Triangle traveling to the United States customarily have used various means to get to the Mexico-U.S. border, including walking, hitchhiking, riding on the top of trains through Mexico, and riding buses, all with or without the assistance of smugglers. Central American migrants have joined into groups to make the journey together as a way to share resources, avoid the cost of smugglers, and gain protection by the safety offered in numbers. \"Caravans\" have reportedly occurred for a least a decade, but they received little attention until last spring when a group of roughly 1,000 Central American migrants headed to the United States. About 400 migrants eventually made it to the U.S. border. ", "In past years, ad hoc processions have been loosely organized by nonprofit groups wanting to call attention to the plight of migrants in their home communities, particularly those of families with children fleeing unsafe environments, poverty, and lack of protection from gang violence and extortion. Mobile phone technology has facilitated navigation and affords communication with impromptu groups, resulting in migrations that can expand and contract along the way."], "subsections": []}]}, {"section_title": "Actions by Governments and International Organizations", "paragraphs": [], "subsections": [{"section_title": "What is the United States doing to address the factors driving migration from the Northern Triangle?31", "paragraphs": ["Under the U.S. Strategy for Engagement in Central America, the United States is working with Central American governments to promote economic prosperity, improve security, and strengthen governance in the region. The Obama Administration launched the strategy following a surge in apprehensions of unaccompanied alien children in 2014, and the Trump Administration largely has left the strategy in place. Congress appropriated an estimated $2.1 billion to support the strategy from FY2016-FY2018, roughly doubling annual aid levels for the region. The governments of El Salvador, Guatemala, and Honduras are carrying out complementary efforts under their Plan of the Alliance for Prosperity in the Northern Triangle. They collectively allocated an estimated $7.7 billion to the initiative from 2016-2018, though some analysts have questioned whether those funds have been targeted effectively.", "On December 18, 2018, the Trump Administration committed to providing $5.8 billion in public and private investment to support institutional reforms and development in the Northern Triangle. Nearly all of the foreign assistance included in that figure was appropriated in prior years and the remainder consists of potential loans, loan guarantees, and private sector resources that the U.S. Overseas Private Investment Corporation could mobilize if it is able to identify commercially viable projects. (For more information, see CRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for Congress .)"], "subsections": []}, {"section_title": "What results have recent U.S. assistance efforts in the Northern Triangle produced?36", "paragraphs": ["It is too early to assess the full impact of recent U.S. efforts because implementation did not begin until 2017 for many of the programs funded under the U.S. Strategy for Engagement in Central America. Nevertheless, the Northern Triangle countries, with U.S. support, have made some tentative progress. For example, they have implemented some policy changes that have contributed to economic stability. At the same time, living conditions have yet to improve for many residents because the Northern Triangle governments have not invested in effective poverty-reduction programs. Security conditions also have improved in some respects, as homicide rates have declined for three consecutive years. Still, many Northern Triangle residents continue to feel insecure, and the percentage of individuals reporting they were victims of crime increased in all three nations between 2014 and 2017. The countries' attorneys general\u2014with the support of the U.N.-backed International Commission against Impunity in Guatemala and the Organization of American States-backed Mission to Support the Fight against Corruption and Impunity in Honduras\u2014have made significant progress in the investigation and prosecution of high-level corruption cases. Those efforts could be undermined, however, as they have received considerable pushback from political and economic elites in the region. (For more information, see CRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for Congress .)"], "subsections": []}, {"section_title": "What is Mexico doing to address the flow of Central American migrants through its territory?42", "paragraphs": ["Since a surge of unaccompanied child migrants from the Northern Triangle transited Mexico to the United States in 2014, Mexico has helped the United States manage flows of Central American migrants and has received more than $100 million in U.S. funding for those efforts. From 2015 through 2018, Mexico returned almost 524,000 migrants who entered it from the Northern Triangle countries. At the same time, Mexico has provided temporary visas for those who want to work in its southern border states, as well as humanitarian visas and access to asylum for those who do not raise criminal or terrorist concerns when their biometric information is run against U.S. databases. President Andr\u00e9s Manuel L\u00f3pez Obrador has thus far been willing to shelter some U.S.-bound Central American migrants, but he urged the U.S. government to invest in southern Mexico and Central America to prevent future unauthorized migration. On December 18, 2018, the two governments made a joint announcement in support of economic development in Mexico and the Northern Triangle.", "The Mexican government has faced pressure from the United States to help contain and disperse recent caravans of Central American migrants transiting the country; humanitarian groups, by contrast, have urged it to assist the migrants. In fall 2018, Mexican citizens, aid groups, and local, state, and federal entities provided migrants with food, shelter, and emergency aid. As of early December 2018, the U.N. High Commissioner for Refugees (UNHCR) reported that 3,300 members of migrant caravans had applied for asylum in Mexico. At the same time, more than 3,000 people had accepted voluntary repatriation to their countries of origin. With U.S. ports of entry limiting the number of migrants accepted each day for asylum screening, border cities may have to shelter thousands of migrants for many months. Mexico's refugee agency, which has received support from UNHCR (discussed below), was overwhelmed processing record numbers of applications prior to the arrival of recent migrant caravans. ", "In late 2018, the U.S. and Mexican governments were negotiating an agreement\u2014dubbed \"Remain in Mexico\"\u2014that would have required U.S.-bound asylum seekers who could not demonstrate that they faced imminent danger in Mexico to remain there as their U.S. asylum claims were processed. Prior to the conclusion of a final bilateral agreement, the U.S. Department of Homeland Security (DHS) notified Mexico that it would implement a new policy under Section 235(b)(2)(C) of the Immigration and Nationality Act to return some non-Mexican asylum seekers (excluding unaccompanied minors) to Mexico to await their immigration court decisions. Mexico responded with a statement declaring that it has the right to admit or reject foreigners arriving in its territory, and that it would provide humanitarian visas and work permits to certain non-Mexicans awaiting U.S. immigration proceedings and offer some individuals the ability to apply for asylum in Mexico. Mexico reportedly began implementing this policy in mid-January, and the United States returned the first asylum seeker to Mexico under its new policy\u2014dubbed the \"Migrant Protection Protocols\"\u2014on January 29, 2019. Mexican officials have reportedly stated that they will not accept minors or individuals over age 60 awaiting asylum claims. Concerns over the costs to local governments of sheltering migrants and the safety of migrants could make this policy difficult to maintain. (For more information, see CRS In Focus IF10215, Mexico's Immigration Control Efforts .)"], "subsections": []}, {"section_title": "What is the role of the United Nations and other organizations in addressing the humanitarian needs of migrants from the Northern Triangle?55", "paragraphs": ["A range of organizations provide humanitarian assistance to people traveling from the Northern Triangle toward the United States, including U.N. entities and other intergovernmental organizations, local and national non-governmental organizations, and the private sector. According to UNHCR \u2014a key U.N. entity operating in the region\u2014 comprehensive assistance is needed at all phases of the journey, including food, medical care, shelter, protection, and, in many cases, legal support.", "Experts characterize this flow of people from the Northern Triangle as mixed migration, defined as different groups\u2014such as economic migrants, refugees, asylum-seekers, trafficked persons, and unaccompanied children\u2014who travel the same routes and use the same modes of transportation. The distinctions between groups in mixed migration flows raise questions about their status and rights. While refugees are granted certain rights and protection under international refugee law, migrants are not protected by a comparable set of rules or treaties. Nevertheless, UN HCR asserts that transit and destination countries should provide all of these groups access to humanitarian assistance, protection , and due process to assess their asylum claims, even if they do not qualify as refugees. Those who flee are often unsafe not only in their home countries, but also during their journey north where they face recruitment into criminal gangs, sexual and gender-based violence, and murder. Many are vulnerable, including women, children, the elderly, and those with disabilities. ", "In Mexico, UNHCR provides immediate and longer-term support by working with local and federal governments and alongside civil society and other partners. In addition to shelter and cash-based humanitarian assistance, broader safety mechanisms include improved screening procedures and dissemination of information for those fleeing violence, increased ways to guard against smugglers and traffickers, and enhanced access to the Mexican asylum system. Even with additional support from UNHCR, Mexico's Commission for the Aid of Refugees (COMAR) lacks sufficient capacity to process claims. UNHCR and other organizations are also being mobilized along the caravan routes in places such as Chiapas, Oaxaca, and Tijuana. ", "International humanitarian efforts aim to align with the Comprehensive Regional Protection and Solutions Framework, an intergovernmental agreement that defends the rights of migrants and refugees who live in or cross the territories of Belize, Costa Rica, Guatemala, Honduras, Mexico, and Panama. In general, most Latin American and Caribbean countries are part of an ongoing forum to address issues driving displacement such as poverty, economic decline, inflation, violence, disease, and food insecurity. In the current situation, U.N. and other experts urge donors to provide timely and predictable international funding to support host governments and local communities that are assisting arriv als. "], "subsections": []}]}, {"section_title": "The Role of U.S. Government Agencies and the Military", "paragraphs": [], "subsections": [{"section_title": "What is the role of U.S. government agencies involved in processing migrants at the Southwest U.S. border?67", "paragraphs": ["Several federal agencies are involved in immigration processing at land, air, and sea ports of entry and along U.S. borders shared with Mexico and Canada. The following descriptions are not exhaustive of all the duties carried out by each entity; they are a selection of duties relevant to immigration enforcement at the Southwest border at and between land ports of entry.", "The Department of Homeland Security (DHS) includes several relevant components: ", "Customs and Border Protection (CBP) is responsible for facilitating lawful trade and travel while preventing unauthorized people and contraband from entering the country. Within CBP, U.S. Border Patrol is the law enforcement agency that secures U.S. borders at and between ports of entry; Border Patrol agents apprehend and hold foreign nationals who have no valid entry documents when they reach ports of entry or who attempt to cross between ports of entry. CBP's Office of Field Operations (OFO) operates U.S. ports of entry and conducts immigration inspections of arriving foreign nationals to determine their admissibility to the United States.", "Immigration and Customs Enforcement (ICE) is responsible for protecting the country from cross-border crime and illegal immigration that threatens national security and public safety. ICE's Enforcement and Removal Operations (ERO) enforces immigration laws pertaining to the detention and removal of unauthorized aliens and oversees detention centers, including family detention centers. ICE also finds and removes deportable aliens located in the U.S. interior.", "United States Citizenship and Immigration Services (USCIS) is responsible for adjudication of immigration and naturalization petitions, consideration of refugee and asylum claims and related humanitarian and international concerns, and other services, such as issuing employment authorizations and processing nonimmigrant change-of-status petitions. At the border, USCIS asylum officers interview foreign nationals who arrive without admissions documents at a port of entry or who encounter a Border Patrol agent and express a fear of return to their home countries based on persecution. If migrants are found to have \"credible fear,\" they are referred to an immigration judge for a hearing. ", "The Department of Justice (DOJ) runs the Executive Office for Immigration Review (EOIR ), the federal government's immigration courts. Immigration judges determine whether an alien is removable or is eligible for some type of immigration relief during the removal process (e.g., asylum or withholding of removal). The standard removal process is a civil administrative proceeding involving a DHS attorney and an EOIR immigration judge to determine whether an alien should be removed. (For more information, see CRS Report R43892, Alien Removals and Returns: Overview and Trends .)", "The Department of Health and Human Services' (HHS ' ) Office of Refugee Resettlement (ORR) is responsible for the care of unaccompanied alien children (UAC) and their subsequent placement in appropriate custody. ICE handles custody transfer or repatriation. (For more information, see archived CRS Report R43599, Unaccompanied Alien Children: An Overview .)"], "subsections": []}, {"section_title": "How does the United States process unlawful border crossers?68", "paragraphs": ["Aliens apprehended for illegally entering the United States between U.S. ports of entry generally face civil penalties for illegal presence in the United States and may face criminal penalties for illegal entry. Aliens who have been removed face additional criminal penalties if they are apprehended for illegal reentry. Aliens apprehended for illegal entry and reentry are subject to prosecution in federal criminal courts by DOJ.", "All apprehended aliens, including children, are placed into one of two types of immigration removal proceedings: standard proceedings that involve formal hearings in an immigration court run by DOJ's EOIR before an immigration judge, or streamlined \"expedited removal\" proceedings without such hearings. ICE is responsible for legally representing the government during removal proceedings. CBP may refer aliens to DOJ for criminal prosecution depending on whether they meet current criminal enforcement priorities. If CBP does not refer apprehended aliens to DOJ for criminal prosecution, CBP may either return them to their home countries using expedited removal or transfer them to ICE custody for immigration detention while they are in formal removal proceedings. (For more information, see CRS Report R45314, Expedited Removal of Aliens: Legal Framework .) ", "Aliens who wish to request asylum may do so at a U.S. port of entry before a CBP officer or upon apprehension by a CBP officer between U.S. ports of entry. Aliens requesting asylum at the border are entitled to an interview assessing the credibility of their asylum claims. (For more information, see \" What is the process for seeking asylum in the United States? \" below.)", "During the brief period when the Trump Administration's \"zero tolerance\" policy was in effect (May and June 2018), DOJ sought the prosecution of all adults caught entering illegally, including asylum seekers and adults accompanied by children. On June 20, 2018, following considerable and largely negative public attention to family separations stemming from the zero tolerance policy, President Trump issued an executive order (EO) effectively ending the policy. While it was in effect, DHS classified all children accompanying criminally prosecuted adults as UAC and turned them over to HHS' ORR, where they were housed temporarily in its shelters. After the prosecuted adults served any applicable criminal sentence, they were transferred to ICE custody, placed in immigration detention, and eventually, in most cases, reunited with their children, either in family detention or upon release into the United States on bond, an order of supervision, or another condition of release. Other parents were deported before they were reunited with their children, and a small number of parents still in the United States remain separated from their children. (For more information, see CRS Report R45266, The Trump Administration's \"Zero Tolerance\" Immigration Enforcement Policy .)"], "subsections": []}, {"section_title": "What is the process for seeking asylum in the United States?69", "paragraphs": ["The Immigration and Nationality Act (INA) provides, subject to certain exceptions and restrictions, that aliens who are in the United States or who arrive in the United States (whether or not at an official port of entry) may apply for asylum, regardless of their immigration status. Asylum may be granted by a USCIS asylum officer or a DOJ EOIR immigration judge. To receive asylum, an alien must establish, among other requirements, that he or she is unable or unwilling to return to his or her home country because of past persecution or a well-founded fear of future persecution based on one of five protected grounds (race, religion, nationality, membership in a particular social group, or political opinion). Certain aliens, such as those who are determined to pose a danger to U.S. security, are ineligible to receive asylum. ", "Special asylum provisions apply to aliens who are subject to a streamlined removal process known as expedited removal. In order for such an alien to be considered for asylum, a USCIS asylum officer first must determine that the alien has a credible fear of persecution. (For more information, see CRS Report R45314, Expedited Removal of Aliens: Legal Framework .)"], "subsections": []}, {"section_title": "What did former Attorney General Sessions decide about domestic violence and gang violence as grounds for asylum? What is the status of that decision?70", "paragraphs": ["In June 2018, the Attorney General, whose decisions are binding on DHS officers and immigration judges, issued a decision regarding the adjudication of asylum claims based on \"membership in a particular social group.\" In the decision, Attorney General Sessions stated that \"[g]enerally, claims by aliens pertaining to domestic violence or gang violence perpetrated by non-governmental actors will not qualify for asylum\" based on the \"membership in a particular social group\" ground. He further noted that because such claims would not generally qualify for asylum, they also would not generally meet the threshold for a finding of a credible fear of persecution. USCIS subsequently issued a policy memorandum to provide guidance to its asylum officers in light of the Attorney General's decision. The memorandum included guidance on determining whether an alien is eligible for asylum as well as whether an alien has a credible fear of persecution and thus can pursue an asylum claim.", "The new policies regarding credible fear of persecution determinations were challenged in federal court. In December 2018, a federal district court judge permanently enjoined the U.S. government from continuing some of the new credible fear policies. Other components of the former Attorney General's decision and the USCIS memorandum, including standards for adjudicating asylum claims, remain in effect. (For more information, CRS Legal Sidebar LSB10207, Asylum and Related Protections for Aliens Who Fear Gang and Domestic Violence .)"], "subsections": []}, {"section_title": "How does the United States screen for security threats among those seeking entry at the Southwest border?74", "paragraphs": ["TECS (not an acronym) is the main system that CBP officers employ at the border and elsewhere to screen arriving travelers and determine their admissibility. CBP also uses the Automated Targeting System (ATS), which is a decision support tool. As one of its functions, ATS \"compares information about travelers and cargo arriving in, transiting through, or exiting the country, against law enforcement and intelligence databases,\" including information from the Terrorist Screening Databased (TSDB, commonly referred to as the terrorist watchlist). As its name suggests, Automated Targeting System-Passenger (ATS-P) is the portion of ATS focused on passengers, \"for the identification of potential terrorists, transnational criminals, and, in some cases, other persons who pose a higher risk of violating U.S. law\" and is used by CBP personnel at the border, ports of entry, and elsewhere, including screening the passenger manifests of all U.S. bound international flights. (For more information, see CRS Report R44678, The Terrorist Screening Database and Preventing Terrorist Travel .)"], "subsections": []}, {"section_title": "What types of missions do military personnel typically perform on the Southwest border?78", "paragraphs": ["Active duty and National Guard personnel have performed a variety of missions on the Southwest border in the past, including ground and aerial surveillance, road and fencing construction, intelligence analysis, transportation, maintenance, and communications support. According to a DOD news release, the National Guard personnel who deployed to the border in April 2018 would provide \"surveillance, engineering, administrative and mechanical support to border agents.\" ", "A subsequent DOD news release announcing the deployment of active duty personnel in October 2018 stated that CBP \" requested aid in air and ground transportation, and logistics support, to move CBP personnel where needed. Officials also asked for engineering capabilities and equipment to secure legal crossings, and medical support units. CBP also asked for housing for deployed Border Protection personnel and extensive planning support.\" ", "The Trump Administration issued a memo on November 20, 2018, which authorized military personnel to perform", "those military protective activities that the Secretary of Defense determines are reasonably necessary to ensure the protection of Federal personnel, including a show or use of force (including lethal force, where necessary), crowd control, temporary detention and cursory search. Department of Defense personnel shall not, without further direction from the President, conduct traditional civilian law enforcement activities, such as arrest, search, and seizure in connection with the enforcement of the laws. ", "During a discussion with reporters on November 21, 2018, Secretary of Defense James Mattis responded to questions about the potential use of military personnel in a law enforcement role:", "The one point I want to make again is we are not doing law enforcement. We do not have arrest authority. Now the governors could give their troops arrest authority. I don't think they've done that, but there are\u2014is no arrest authority under Posse Comitatus for the U.S. federal troops. You know, that can be done but it has to be done in accordance with the law, and that has not been done nor has it been anticipated.", "Later in the interview he stated", "On detention, we do not have arrest authority. Detention would\u2014I would put it in terms of minutes. In other words, if someone's beating on a Border Patrolman and if we were in position to have to do something about it, we could stop them from beating on them and take him over and deliver him to a Border Patrolman, who would then arrest him for it\u2026. There's no violation of Posse Comitatus, there's no violation here at all. We're not going to arrest or anything else. To stop someone from beating on someone and turn them over to someone else\u2014this is minutes not even hours, okay?", "According to a January 14 news release from DOD, Acting Secretary of Defense Patrick Shanahan approved continued DOD assistance to DHS through September 30, 2019. It also noted that \"DOD is transitioning its support at the southwestern border from hardening ports of entry to mobile surveillance and detection, as well as concertina wire emplacement between ports of entry. DOD will continue to provide aviation support.\""], "subsections": []}, {"section_title": "How does the Posse Comitatus Act limit the use of military personnel?85", "paragraphs": ["The Posse Comitatus Act constrains how military personnel may be used in a law enforcement capacity at the border. The Posse Comitatus Act is a criminal prohibition that provides", "Whoever, except in cases and under circumstances expressly authorized by the Constitution or Act of Congress, willfully uses any part of the Army or the Air Force as a posse comitatus or otherwise to execute the laws shall be fined under this title or imprisoned not more than two years, or both.", "Consequently, there must be a constitutional or statutory authority to use federal troops in a law enforcement capacity to enforce immigration or customs laws directly by, for example, stopping aliens from entering the country unlawfully, apprehending gang members, or seizing contraband. As noted in a section below, federal law permits the Armed Forces to act in a supporting role for civil authorities by providing logistics or operating and maintaining equipment, among other things. ", "Case law suggests that the Posse Comitatus Act is violated when (1) civilian law enforcement officials make a direct active use of military personnel to execute the law; (2) the use of the military pervades the activities of the civilian officials; or (3) the military is used so as to subject persons to the exercise of military power which is regulatory, prescriptive, or compulsory in nature. The Posse Comitatus Act does not apply to the National Guard unless it is activated for federal service.", "One possible statutory exception the President could potentially invoke for direct military enforcement is the Insurrection Act provision for sending troops whenever he determines that \"unlawful obstructions, combinations, or assemblages, or rebellion against the authority of the United States, make it impracticable to enforce the laws of the United States \u2026 by the ordinary course of judicial proceedings.\" However, the Insurrection Act appears never to have been invoked to respond to unlawful migrant border crossings, and its application in such a situation has not been tested in court. ", "The executive branch has long asserted two constitutional exceptions to the Posse Comitatus Act \"based upon the inherent legal right of the U.S. Government \u2026 to insure the preservation of public order and the carrying out of governmental operations within its territorial limits, by force if necessary.\" These exceptions include the emergency authority \"to prevent loss of life or wanton destruction of property and to restore governmental functioning and public order when sudden and unexpected civil disturbances, disasters, or calamities seriously endanger life and property and disrupt normal governmental functions to such an extent that duly constituted local authorities are unable to control the situation\"; and the authority to \"protect Federal property and Federal governmental functions when the need for protection exists and duly constituted local authorities are unable or decline to provide adequate protection.\" (For more information, see CRS Report R42659, The Posse Comitatus Act and Related Matters: The Use of the Military to Execute Civilian Law .)"], "subsections": []}, {"section_title": "Can the Department of Defense build the border wall?90", "paragraphs": ["President Trump has contemplated proclaiming a national emergency pursuant to the National Emergencies Act (NEA) in order to fund a physical barrier at the southern border with Mexico using DOD funds. Declaring a national emergency could permit the President to invoke two statutes that could potentially permit either the use of unobligated military construction funds or the reprogramming of Army Corps of Engineers civil works funds. ", "Military Construction Funds . Upon declaring a national emergency pursuant to the NEA, the President may invoke the emergency military construction authority in 10 U.S.C. \u00a72808. Originally enacted in 1982, Section 2808 provides that upon the President's declaration of a national emergency \"that requires use of the armed forces,\" the Secretary of Defense may \"without regard to any other provision of law ... undertake military construction projects ... not otherwise authorized by law that are necessary to support such use of the armed forces.\" Section 2808 limits the funds available for emergency military construction to \"the total amount of funds that have been appropriated for military construction\" that have not been obligated. With certain limited exceptions, Presidents have generally invoked this authority in connection with construction at military bases in foreign countries.", "The circumstances in which the Section 2808 authority could be used to deploy barriers along the border appears to be a question of first impression, and one that is likely to be vigorously litigated. It appears that three interpretive questions could impede such use. First , there may be dispute about whether conditions at the border provide a sufficient factual basis to invoke Section 2808. Before the Section 2808 authority may be used, the President must determine that the relevant construction project would address a problem qualifying as a national emergency \"that requires use of the armed forces.\" Moreover, the construction project must be \"necessary to support such use of the armed forces.\" Second , if the above criteria are met, then an assessment would be necessary to determine whether construction of a border wall qualifies as a \"military construction project\" within the meaning of Section 2808. Title 10 defines the term \"military construction project\" for purposes of Section 2808 to include \"military construction work,\" and defines \"military construction\" as \"includ[ing] any construction, development, conversion, or extension of any kind carried out with respect to a military installation ... or any acquisition of land or construction of a defense access road.\" Because there does not appear to be case law addressing the scope of this definition of \"military construction,\" the question of whether Section 2808 extends to the construction of a border wall appears to be an issue of first impression. Third , if a court were to review the invocation of Section 2808 to construct a border wall, its analysis might be informed by the location of particular barriers. It is possible that a border wall will be \"necessary to support such use of the armed forces\" at some locations but not others. Likewise, the construction of a wall over certain areas of the border\u2014specifically, areas that directly abut military bases\u2014would appear to have a greater claim to qualifying as construction undertaken \"with respect to a military installation\" than construction at other locations along the border.", "Army Corp s of Engineers Funds. Section 2293 of Title 33, U.S. Code, authorizes the Secretary of the Army to terminate or defer Army civil works projects that are \"not essential to the national defense\" upon a declaration of a national emergency under the NEA \"that requires or may require the use of the Armed Forces.\" The Secretary of the Army can then use the funds otherwise allocated to those projects for \"authorized civil works, military construction, and civil defense projects that are essential to the national defense.\" As with Section 2808, it is unsettled whether the construction of a border wall would qualify as an \"authorized civil works, military construction, [or] civil defense project[].\" This uncertainty is compounded by the difficulty of determining whether the qualifier \"authorized\" modifies all of the items enumerated in Section 2293 or only the term \"civil works.\" If the term \"authorized\" modifies all of the items in the relevant sentence, then Section 2293 arguably would not allow the President to construct a border wall if that term is read to mean specifically authorized by Congress. ", "Courts have traditionally afforded significant deference to executive claims of military necessity, deference which may stand as a substantial obstacle to legal challenges to any factual findings supporting the invocation of either Section 2808 or Section 2293. (For more information, see CRS Legal Sidebar LSB10242, Can the Department of Defense Build the Border Wall? )"], "subsections": []}]}, {"section_title": "The Role of the U.S. President", "paragraphs": [], "subsections": [{"section_title": "What authority does the President have to use military personnel to support border security operations?96", "paragraphs": ["The President's authority to use military personnel to support border security operations depends on whether those personnel are active duty troops serving under Title 10, U.S. Code, or National Guard troops operating under Title 32, U.S. Code. Section 502 of Title 32, U.S. Code, provides the authority for the Secretary of the Army and the Secretary of the Air Force to call National Guard units to full-time duty under Title 32 status for training \"or other duty in addition to\" mandatory training. Section 502(f) \"other duty\" may include \"homeland defense activities.\" Such activities are defined to mean activities: ", "undertaken for the military protection of the territory or domestic population of the United States, or of infrastructure or other assets of the United States determined by the Secretary of Defense as being critical to national security, from a threat or aggression against the United States.", "Chapter 15 of Title 10, U.S. Code\u2014Military Support for Civilian Law Enforcement Agencies\u2014provides general legislative authority for the Armed Forces to provide certain types of support to federal, state, and local law enforcement agencies, particularly in counterdrug, counterterrorism, and counter-transnational crime efforts. Such authorities permit the military to provide certain types of support for border security and immigration control operations. These authorities permit DOD to share information collected during the normal course of military operations, loan equipment and facilities, provide expert advice and training, and maintain and operate equipment. ", "To assist federal law enforcement agencies, military personnel may maintain and operate equipment in conjunction with counterterrorism operations or the enforcement of counterdrug laws, immigration laws, and customs requirements. To assist federal law enforcement agencies in counter drug operations, military personnel may, among other things, engage in the \"[c]onstruction of roads and fences and installation of lighting to block drug smuggling corridors across international boundaries of the United States.\" Chapter 15 support authority \"does not include or permit direct participation by a member of the Army, Navy, Air Force, or Marine Corps in a search, seizure, arrest, or other similar activity unless participation in such activity by such member is otherwise authorized by law.\"", "One other possible source of authority is Section 1059 of the National Defense Authorization Act of 2016. That provision authorized the Secretary of Defense, with the concurrence of the Secretary of Homeland Security, to spend up to $75 million of 2016 DOD funds to provide assistance to CBP \"for purposes of increasing ongoing efforts to secure the southern land border of the United States.\" The types of assistance permitted include \"deployment of members and units of the regular and reserve components of the Armed Forces to the southern land border of the United States\" along with \"manned aircraft, unmanned aerial surveillance systems, and ground-based surveillance systems to support continuous surveillance of the southern land border of the United States\" and \"[i]ntelligence analysis support.\" (For more information, see CRS Legal Sidebar LSB10121, The President's Authority to Use the National Guard or the Armed Forces to Secure the Border .)"], "subsections": []}, {"section_title": "What authority does the President have to cut off aid to the Northern Triangle countries?111", "paragraphs": ["Congress provided the President with significant discretion to reduce foreign assistance to Central America in FY2018. In the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), Congress designated \"up to\" $615 million for the Central America strategy, effectively placing a ceiling on aid but no floor. The act also requires the State Department to withhold 75% of assistance for the central governments of El Salvador, Guatemala, and Honduras until the Secretary of State certifies that those governments are addressing a variety of congressional concerns, including improving border security, combating corruption, and protecting human rights. The act empowers the Secretary of State to suspend and reprogram aid if he determines the governments have made \"insufficient progress\" in addressing the legislative requirements. The President's ability to modify assistance to the Northern Triangle countries for FY2019 will depend on provisions Congress may include in future appropriations legislation."], "subsections": []}, {"section_title": "What actions has the President taken to restrict eligibility for asylum?112", "paragraphs": ["Citing constitutional and statutory authority, the President issued a presidential proclamation on November 9, 2018, to immediately suspend the entry into the United States of aliens who cross the Southwest border between ports of entry. The proclamation indicates that its entry suspension provisions will expire 90 days after its issuance date or on the date that the United States and Mexico reach a bilateral agreement that allows for the removal of asylum seekers to Mexico, whichever is earlier. Also on November 9, 2018, DHS and DOJ jointly issued an interim final rule to bar an alien who enters the United States in contravention of the proclamation from eligibility for asylum. Under the rule, an asylum officer is to make a negative credible fear determination in the case of such an alien. (For more information, see CRS Insight IN10993, Presidential Proclamation on Unlawful Border Crossers and Asylum .)", "The proclamation and the rule are being challenged in federal court. As of the date of this report, the changes to the asylum process set forth in the rule are not in effect. (For more information, see CRS Legal Sidebar LSB10222, District Court Temporarily Blocks Implementation of Asylum Restrictions on Unlawful Entrants at the Southern Border .)"], "subsections": []}]}, {"section_title": "Where can more information be found?", "paragraphs": ["For more information on relevant topics and issues Congress may consider, see the following reports or contact the authors:", "CRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for Congress , by Peter J. Meyer", "CRS Report R45120, Latin America and the Caribbean: Issues in the 115th Congress , coordinated by Mark P. Sullivan (see \"Migration Issues\" section)", "CRS In Focus IF10215, Mexico's Immigration Control Efforts , by Clare Ribando Seelke and Carla Y. Davis-Castro", "CRS Report R43616, El Salvador: Background and U.S. Relations , by Clare Ribando Seelke", "CRS Report RL34027, Honduras: Background and U.S. Relations , by Peter J. Meyer", "CRS Report R42580, Guatemala: Political and Socioeconomic Conditions and U.S. Relations , by Maureen Taft-Morales", "CRS Report R45266, The Trump Administration's \"Zero Tolerance\" Immigration Enforcement Policy , by William A. Kandel", "CRS Insight IN10993, Presidential Proclamation on Unlawful Border Crossers and Asylum , by Andorra Bruno", "CRS Report RS20844, Temporary Protected Status: Overview and Current Issues , by Jill H. Wilson", "CRS Legal Sidebar LSB10150, An Overview of U.S. Immigration Laws Regulating the Admission and Exclusion of Aliens at the Border , by Hillel R. Smith", "CRS Report R42138, Border Security: Immigration Enforcement Between Ports of Entry , coordinated by Audrey Singer", "CRS Report R43356, Border Security: Immigration Inspections at Ports of Entry , by Audrey Singer", "CRS Report R43599, Unaccompanied Alien Children: An Overview , by William A. Kandel", "CRS Legal Sidebar LSB10121, The President's Authority to Use the National Guard or the Armed Forces to Secure the Border , by Jennifer K. Elsea"], "subsections": []}]}}
{"id": "R44125", "title": "Consumer Credit Reporting, Credit Bureaus, Credit Scoring, and Related Policy Issues", "released_date": "2019-03-28T00:00:00", "summary": ["The consumer data industry\u2014generally referred to as credit reporting agencies or credit bureaus\u2014collects and subsequently provides information to firms about the behavior of consumers when they participate in various financial transactions. Firms use consumer information to screen for the risk that consumers will engage in behaviors that are costly for businesses. For example, lenders rely upon credit reports and scores to determine the likelihood that prospective borrowers will repay their loans. Insured depository institutions (i.e., banks and credit unions) rely on consumer data service providers to determine whether to make available checking accounts or loans to individuals. Some insurance companies use consumer data to determine what insurance products to make available and to set policy premiums. Some payday lenders use data regarding the management of checking accounts and payment of telecommunications and utility bills to determine the likelihood of failure to repay small-dollar cash advances. Merchants rely on the consumer data industry to determine whether to approve payment by check or electronic payment card. Employers may use consumer data information to screen prospective employees to determine the likelihood of fraudulent behavior. In short, numerous firms rely upon consumer data to identify and evaluate potential risks a consumer may pose before entering into a financial relationship with that consumer.", "Greater reliance by firms on consumer data significantly affects\u2014and potentially limits\u2014consumer access to financial products or opportunities. Specifically, negative or derogatory information, such as late payments, loan defaults, and multiple overdrafts, may stay on consumer reports for several years and lead firms to deny a consumer access to credit, a financial product, or a job opportunity. Having a nonexistent, insufficient, or a stale credit history may also prevent credit access.", "Accordingly, various policy issues have been raised about the consumer data industry, most notably including the following:", "How to address inaccurate or disputed consumer data provided in consumer data reports; How long negative or derogatory information should remain in consumer data reports; How to address differences in billing and collection practices that can adversely affect consumer data reports, an issue of particular concern with medical billing practices; How to ensure that consumers are aware of their rights and how to exercise them in the event of a consumer data dispute; Whether uses of consumer data reports outside of the financial services, such as for employment decisions, adversely affect consumers and should be limited; Whether the use of alternative consumer data or newer versions of credit scores may increase accuracy and credit access; and How to address data protection and security issues in consumer data reporting.", "Congress has shown continuing interest in these and other policy questions surrounding the consumer data industry, particularly in its regulation and whether such regulation currently provides sufficient protection to consumers. In the 116th Congress, legislation has been introduced to address many of these concerns. The Comprehensive Credit Reporting Reform Act of 2019 (CCRRA) and the Protecting Innocent Consumers Affected by a Shutdown Act, both released as drafts by Chairwoman Maxine Waters, would amend the Fair Credit Reporting Act (FCRA) and create additional laws to address these concerns. Other relevant bills introduced in the 116th Congress address topics such as credit reporting and cybersecurity (H.R. 331 and H.R. 1282); credit information used for auto insurance (H.R. 1756); and federal employees affected by the shutdown (H.R. 935, H.R. 799, H.R. 1286, and S. 535)."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The consumer data industry collects and subsequently provides information to firms about behavior when consumers conduct various financial transactions. Firms use this data to determine whether consumers have engaged i n behaviors that could be costly or beneficial to the firms. For example, lenders rely upon credit reports and scoring systems to determine the likelihood that prospective borrowers will repay their loans. The data may also be used to predict consumer behaviors that would financially benefit firms.", "Although the general public is likely to be more familiar with the use of credit reporting and scoring to qualify for mortgage and other consumer loans, the scope of consumer data use is much broader. Insured depository institutions (i.e., banks and credit unions) rely on consumer data service providers to determine whether to make checking accounts or loans available to individuals. Insurance companies use consumer data to determine what insurance products to make available and to set policy premiums. Some payday lenders use data regarding the management of checking accounts and payment of telecommunications bills to determine the likelihood that a consumer will fail to repay small-dollar cash advances. Merchants rely on the consumer data industry to determine whether to approve payment by check or electronic payment card. Employers may use consumer data information to screen prospective employees to determine, for example, the likelihood of fraudulent behavior. In short, numerous firms rely upon consumer data to identify and evaluate the risks associated with entering into financial relationships or transactions with consumers. ", "Greater reliance by firms on consumer data significantly affects consumer access to financial products or opportunities. For example, negative or derogatory information, such as multiple overdrafts, involuntary account closures, loan defaults, and fraud incidents, may influence a lender to deny a consumer access to credit. Further, such information may stay on a consumer's reports for several years. The inclusion of negative information may be particularly limiting to consumers under circumstances in which such information is inaccurate or needs to be updated to reflect more current and possibly more favorable financial situations. Furthermore, consumers may find the process of making corrections to consumer data reports to be time-consuming, complex, and perhaps ineffective. The exclusion of more favorable information, such as the timely repayment of noncredit obligations, from standard credit reporting or scoring models may also limit credit access. ", "This report first provides background information on the consumer data industry and various specialty areas. The report examines one prominent specialty area\u2014consumer scoring\u2014and describes various factors used to calculate credit scores. Next, the report provides a general description of the current regulatory framework of the consumer data industry. Finally, the report discusses selected policy issues pertaining to consumer data reports. Specifically, the report addresses policy issues concerning inaccurate or disputed consumer data provided in consumer data reports; how long negative or derogatory information should remain in consumer data reports; differences in billing and collection practices that can adversely affect consumer data reports, an issue of particular concern with medical billing practices; consumer's rights; whether uses of credit bureau data outside of the financial services, such as for employment decisions, adversely affect consumers and should be limited; whether the use of alternative consumer data or newer versions of credit scores may increase accuracy and credit access; and how to address data protection and security issues in consumer data reporting. For each policy issue, the report addresses corresponding legislative and regulatory developments.", "In the 116 th Congress, credit reporting and the consumer data industry is a topic of interest. On February 26, 2019, the House Financial Services Committee held a hearing on the consumer data industry, entitled, \" Who ' s Keeping Score? Holding Credit Bureaus Accountable and Repairing a Broken System .\" House Financial Services Committee Chairwoman Maxine Waters has also released two draft bills: the Comprehensive Credit Reporting Reform Act of 2019 (CCRRA) and the Protecting Innocent Consumers Affected by a Shutdown Act, which, if enacted, would address many of the policy issues discussed in this report. Where relevant, the report discusses the approach these bills would take to addressing the policy issues examined. "], "subsections": []}, {"section_title": "The Consumer Data Industry and Specialty Services", "paragraphs": ["This section provides background information on the consumer data industry, which generally includes credit reporting agencies (CRAs), also referred to as credit bureaus (both terms are used interchangeably in this report). This section also provides background on credit scoring, a specialty service the industry provides, including a summary of the key factors known to affect credit scores."], "subsections": [{"section_title": "Consumer Reporting Services", "paragraphs": ["According to the Fair Credit Reporting Act (FCRA), which generally regulates the business of credit reporting, CRAs are firms that prepare consumer reports based upon individuals' financial transactions history data. Such data may include historical information about credit repayment, tenant payment, employment, insurance claims, arrests, bankruptcies, and check writing and account management. Consumer files, however, do not contain information on consumer income or assets. Consumer reports generally may not include information on items such as race or ethnicity, religious or political preference, or medical history.", "Equifax, Experian, and TransUnion are the three largest nationwide providers of credit reports. Other CRAs provide a variety of specialized consumer reporting services. Some specialty CRAs collect data regarding payment for phone, utilities (e.g., electric, gas, water), and telecommunication (e.g., cable) services. Utility and telecommunication service providers use the reports to verify the identity of customers and determine downpayment requirements for new customers. Property management companies and rent payment services may report to CRAs that specialize in collecting rent payment data for tenant and employment screening. Some CRAs specialize in consumer reporting for the underbanked, near prime, and subprime consumer segments, including consumers with minimal recorded data. Some CRAs specialize in debt collection (recovering past due funds) and fraud verification data.", "Firms that use consumer reports may also report information to CRAs, thus serving as furnishers . A tradeline is an account attached to a particular consumer that is reported to a CRA by a furnisher. A tradeline serves as a record of the transaction (payment) activity associated with the account. Furnishing tradelines is voluntary, and furnishers are not required to submit tradelines to all CRAs. Furnishers also have different business models and policies, resulting in different reporting practices. Some furnishers may report all unpaid customer obligations that were deemed uncollectible and written off their balance sheets; some report when money balances owed surpass minimum threshold levels; some report only the principal balances owed minus the penalties and fees; and others may report all monies owed. Furnishers also have discretion over the types of obligations they wish to report.", "Benefits to users of consumer data increase as more individual companies choose to participate as furnishers, but furnishers do incur costs to report data. To become furnishers, firms must be approved and comply with the policies of a CRA, such as fee registration requirements. The transfer of consumer data involves security risks, and many CRAs have adopted standardized reporting formats and requirements approved by the Consumer Data Industry Association (CDIA) for transferring data. Furnishers must be able to comply with industry data transfer requirements or some CRAs are unlikely to accept their data. Compliance may require investing in technology compatible with the computer systems of a CRA. Compliance costs may be more burdensome for smaller firms, causing some to choose not to be furnishers. In addition, entities that elect to become furnishers face legal obligations under the FCRA. The FCRA requires furnishers to report accurate and complete information as well as to investigate consumer disputes. Hence, reporting obligations could possibly, under some circumstances, result in legal costs, which may also influence a firm's decision to become a furnisher.", "Business models and policies of CRAs are also different. Different CRAs may collect the same information on the same individuals but adopt different conventions for storing the information. One CRA may report a delinquent debt obligation separately from the penalties and fees whereas another CRA may choose to combine both items into one entry. Consequently, consumer reports obtained from different CRAs on the same consumer are likely to differ due to different policies adopted by furnishers, CRAs, or both."], "subsections": []}, {"section_title": "Credit Scoring Services", "paragraphs": ["A consumer score is a (numeric) metric that can be used to predict a variety of financial behaviors. Consumer credit scores are prepared for lenders to determine, for example, the likelihood of loan default. Other consumer scores can be prepared to predict the likelihood of filing an insurance claim, overdrawing a bank account, failing to pay a utility bill, committing fraud, or a host of other adverse financial behaviors. Consumer scores are typically computed using the information obtained from one or more consumer reports. Rather than maintaining a repository of credit records, some firms are primarily engaged in the production of consumer scores. Hence, consumer scoring can be considered a specialty service in the consumer data industry. For example, if a user of a consumer report subsequently wants a consumer score, it may be charged an additional fee.", "Given the variety of different financial behaviors to predict, there are many consumer scores that can be calculated. Consumer scores for the same individual and behavior calculated by different scoring firms are also likely to differ. Consumer scoring firms may have purchased consumer information from different CRAs, which have their own policies for storing and reporting information. Each scoring firm has its own proprietary statistical model(s), meaning that each firm decides what consumer information should be included and excluded from calculations. Each firm can choose its own weighting algorithms. For example, included information can be equally weighted, or heavier weights can be placed on more recent information or on information otherwise deemed more pertinent. Sometimes the consumer scoring firm selects the appropriate weighting scheme, and sometimes the requestor of a consumer score may provide instructions to the preparer. Hence, consumers may not see the actual scores used until after the decisionmaking firms release them, particularly in cases when customized scores were requested and used in the decisionmaking process."], "subsections": []}]}, {"section_title": "Existing Consumer Protections and Regulation of CRAs", "paragraphs": ["This section provides a brief overview of existing consumer protections and regulation related to credit reporting. ", "As noted, the Fair Credit Reporting Act, enacted in 1970, is the main statute regulating the credit reporting industry. The FCRA requires \"that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information.\" The FCRA establishes consumers' rights in relation to their credit reports, as well as permissible uses of credit reports. It also imposes certain responsibilities on those who collect, furnish, and use the information contained in consumers' credit reports. ", "The FCRA includes consumer protection provisions. Under the FCRA, consumers must be told when their information from a CRA has been used after an adverse action (generally a denial of credit) has occurred, and disclosure of that information must be made free of charge. Consumers have a right to one free credit report every year (from each of the three largest nationwide credit reporting providers) even in the absence of an adverse action (e.g., credit denial). Consumers also have the right to dispute inaccurate or incomplete information in their report. After a consumer alerts a CRA of such a discrepancy, the CRA must investigate and correct errors, usually within 30 days. The FCRA also limits the length of time negative information may remain on reports. Negative collection tradelines typically stay on credit reports for 7 years, even if the consumer pays in full the item in collection; a tradeline associated with a personal bankruptcy stays on a credit report for 10 years.", "The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) established the Bureau of Consumer Financial Protection (CFPB), consolidating many federal consumer financial protection powers from other federal agencies. The CFPB has rulemaking and enforcement authorities over all CRAs for certain consumer protection laws; it has supervisory authority, or the authority to conduct examinations, over the larger CRAs. In July 2012, the CFPB announced that it would supervise CRAs with $7 million or more in annual receipts, which included 30 firms representing approximately 94% of the market. ", "The CFPB conducts examinations of the CRAs, reviewing procedures and operating systems regarding the management of consumer data and enforcing applicable laws. In 2017, the CFPB released a report of its supervisory work in the credit reporting system. The report discusses the CFPB's efforts to work with credit bureaus and financial firms to improve credit reporting in three specific areas: data accuracy, dispute handling and resolution, and furnisher reporting. As the report describes, credit bureaus and financial firms have developed data governance and quality control programs to monitor data accuracy through working with the CFPB. In addition, the CFPB has encouraged credit bureaus to improve their dispute and resolution processes, including making it easier and more informative for consumers.", "Recently, Congress has also been interested in improving consumer protections in the credit reporting system, particularly in response to the 2017 Equifax data breach, which exposed personal information of millions of consumers. The Economic Growth, Regulatory Relief, and Consumer Protection Act ( P.L. 115-174 ), which was enacted in 2018, established new consumer protections relating to credit reporting, including the right to a free credit freeze. Credit freezes allow consumers to stop new credit from being opened in their name, to protect themselves from fraud and identity theft."], "subsections": []}, {"section_title": "Policy Issues", "paragraphs": ["This section examines selected policy issues pertaining to the use of credit reports and scores in consumer lending decisions. For each policy issue, the report highlights recent legislative and regulatory developments and discusses selected legislative proposals from the 116 th Congress that would address the issue."], "subsections": [{"section_title": "Inaccurate or Disputed Information", "paragraphs": ["The accuracy of consumer information in consumer data reports has been an ongoing policy concern. Inaccurate information in a credit report may limit a consumer's access to credit in some cases or increase the costs to the consumer of obtaining credit in others. In 2012, the Federal Trade Commission (FTC) reported that 26% of participants in a survey of credit report accuracy were able to identify at least one potentially material error on at least one of approximately three different credit reports prepared using their consumer information. After the reports were corrected, 13% of participants in the FTC study saw one or more of their credit scores increase. For those who saw an increase, over 40% of their scores rose by more than 20 points, which could increase the likelihood that the consumer would be offered less expensive credit terms.", "Credit reporting inaccuracies may occur for various reasons. Consumers may inadvertently provide inaccurate data when applying for financial services. Furnishers may inadvertently input inaccurate information into their databases. Matching information to the proper individual poses challenges, such as in cases when multiple individuals have similar names and spellings. In some cases, the information may be properly matched, but the individual could be a victim of fraud or identity theft. ", "The predictive power of consumer data, or the ability to accurately predict a consumer's likelihood to default on a loan, would be enhanced to the extent that consumer tradelines are regularly updated with correct and current information. As mentioned in the previous section, the CFPB has recently encouraged credit bureaus and financial firms to improve data accuracy in credit reporting. For example, since 2014, the CFPB has required the largest consumer reporting firms to provide standardized accuracy reports on a regular basis. The accuracy reports must specify the frequency that consumers dispute information, list furnishers and industries with the most disputes, and provide dispute resolution information. According to the CFPB, the top 100 furnishers provide 76% of tradeline information to the largest nationwide CRAs, and the furnishers regularly update the account status of reported tradelines. In addition, the larger CRAs have also made improvements to the communication tool they use to facilitate the dispute resolution process between consumers and furnishers. Further, effective July 1, 2017, the CRAs enhanced public record data standards for the collection and timely updating of civil judgements and tax liens. Public record data must contain minimum identifying information (i.e., name, address, and Social Security number or date of birth) and must be updated at least every 90 days; otherwise, the tax lien and civil judgment information will no longer be reported. The accuracy of credit reports, nonetheless, ultimately depends upon consumers to monitor and dispute any discrepancies. ", "If enacted, Chairwoman Waters' draft bill\u2014the Comprehensive Credit Reporting Reform Act of 2019 (CCRRA)\u2014would address some concerns relating to inaccurate or disputed data by establishing new consumer rights around the dispute process. These rights would include guaranteeing consumers more information about dispute investigations and granting consumers the right to appeal disputes to credit bureaus, thus formalizing the process. The CCRRA also would explicitly establish consumers' right to seek injunctive relief, a legal remedy where a court requires future behavior change (e.g., removing adverse information from a credit record). Lastly, the bill would provide credit restoration to consumers who are the victims of some predatory activities, such as deceptive lender acts or discrimination. "], "subsections": []}, {"section_title": "Length of Time to Retain Negative Information", "paragraphs": ["Policymakers have also considered the appropriate length of time negative information should be allowed to remain on a credit report. Negative information generally refers to delinquencies or defaults, which typically remain on credit reports for seven years. Negative information in a credit report often results in a consumer appearing to pose a greater risk of default or other negative behavior. This may lead a consumer to either pay more for financial services or, in some cases, be denied access to credit entirely. Limiting a consumer's access to certain financial services, such as depository checking accounts or lower cost loans, may disproportionately affect the consumer's cost of engaging in financial transactions. Similarly, the use of consumer data reports by potential employers, discussed further below, may limit job opportunities that could arguably help applicants overcome financial challenges and thereby improve their credit histories. ", "Retaining negative information on credit reports for an extended period of time may pose benefits and detriments. On the one hand, under circumstances in which the underlying information in a consumer data report is inaccurate or out of date, consumers may improperly be considered to pose a greater risk to a firm. In that case, the consumer may be offered costlier credit options (or even face denials of credit) that do not accurately reflect the consumer's actual risk of default. In other cases, consumers also may unfairly be considered to pose a greater risk now due to circumstances in the past that they have since overcome. On the other hand, the longer information remains on the credit report arguably allows lenders to see long-term trends that may be helpful for distinguishing between a rare occurrence and a consistent pattern in a consumer's behavior. Shorter or insufficient periods of time in which negative tradelines appear on consumer reports may also compromise the ability to compute reliable scores. If lenders view credit reports and scores as unreliable due to premature removal of negative information, they could increase downpayment requirements across the board for all credit applicants or reduce loan amounts. In short, lenders who are uncertain about data reliability might adopt stricter underwriting and lending policies. In addition to restricting credit access generally, this could reduce competition by allowing lenders with an established relationship and more information on a consumer to provide more favorable terms to that consumer than other companies. In addition, the Association of Certified Fraud Examiners (ACFE) found that poor credit can signal criminal activity, and earlier removal of negative information may make it more difficult for an organization to detect fraud, which may be particularly costly for small businesses and nonprofit organizations. ", "Many preparers and users of credit scores have adopted weighting schemes that place less weight on older information in a consumer data report. Maintaining longer (rather than shorter) durations of negative tradelines on reports allows preparers to make greater use of variable-weighted algorithms to calculate scores, which may be useful when the importance of a weight needs to be modified over time. In addressing this policy issue, the CCRRA would shorten the time period that adverse information could remain on a person's credit report by three years (such that it remains on the report for a total of four years), among other things."], "subsections": []}, {"section_title": "Inconsistent Billing and Reporting Practices: Medical Tradelines", "paragraphs": ["Another policy issue that often arises in connection with credit reporting is that different holders of consumer debt bill differently and report to the CRAs differently. Inconsistent reporting practices result in variation of the timing with which unpaid debts appear on consumer reports. For example, medical providers may assign unpaid bills to debt collectors or sell outstanding debts to debt buyers. Some medical providers may assign or sell the debt after 60 days, but some may do so after 30 days (by comparison, most bank credit card delinquencies are assigned or sold after 180 days). Some firms may turn obligations over to collections as a tool to encourage consumers to settle unpaid balances, blurring the distinction between billing and collecting policies. Debt collectors or buyers subsequently furnish negative information to CRAs, causing tradeline accounts to appear on consumer reports. ", "The CFPB used a random sample of approximately 5 million consumers as of December 2012 to determine what types of tradeline accounts were reported most frequently and the amounts. The CFPB found that approximately 33% of credit reports surveyed had collection tradelines, and approximately 52% of those collection tradelines were related to medical collections. After medical obligations, the CFPB found that the remaining collection tradelines of significant relevance were associated with unclassified debts (17.3%), cable or cellular bills (8.2%), utilities (7.3%), and retail stores (7.2%). All other categories of collectible tradelines were approximately 2% or less of the survey. For 85% of the respondents, the amounts owed for medical debt were for less than $1,000. In short, more than half of collection tradelines were associated with medical debt, and they were for relatively small amounts. Specifically, the median amount owed for the medical collection tradelines was $207, and 75% of all medical collection tradelines were under $490.", "One form of consumer debt\u2014medical debt\u2014is most often disputed by consumers and raises specific policy issues related to inconsistent billing and reporting practices. According to the CFPB study, consumers are unlikely to know when and how much various medical services cost in advance, particularly those associated with accidents and emergencies. People often have difficulty understanding co-pays and health insurance deductibles. Consequently, consumers may delay paying medical obligations as they either assume their insurance companies will pay or attempt to figure out why they have been billed, which often results in medical debt appearing unpaid on credit reports. ", "Regulators and industry have taken actions that may reduce medical tradelines and their associated negative effects on consumer credit data. On December 31, 2014, the Internal Revenue Service (IRS) announced a final rule requiring the separation of billing and collection policies of nonprofit hospitals. Under the rule, hospitals that have or are pursuing tax-exempt status are required to make reasonable efforts to determine whether their patients are eligible for financial assistance before engaging in \"extraordinary collection actions,\" which may include turning a debt over to a collection agency (thus creating a medical tradeline) or garnishing wages. In short, tax-exempt hospitals must allow patients 120 days from the date of the first billing statement to pay the obligation before initiating collection procedures. The IRS rule only impacts nonprofit hospitals, but, on September 15, 2017, the three major credit reporting agencies\u2014Experian, Equifax, and TransUnion\u2014established a 180-day (6 month) waiting period before posting a medical collection of any type on a consumer credit report. In addition, P.L. 115-174 , Section 302, amends the FCRA to provide credit reporting protections for veterans as follows:", "CRAs must exclude certain medical debt incurred by a veteran from his or her credit report if the hospital care or medical services relating to the debt predates the credit report by less than one year. CRAs must remove from the credit report a veteran's fully paid or settled medical debt previously characterized as delinquent, charged off, or in collection. CRAs must establish a dispute process and verification procedures for veterans' medical debt. Active duty military personnel receive free credit monitoring.", "The CCRRA would impose restrictions on the appearance of medical collections on consumer credit reports, codifying the CRA's 2017 180-day rule. It would also require expedited removal of all fully repaid or settled debts, including medical collections."], "subsections": []}, {"section_title": "Consumer Rights in the Credit Reporting System", "paragraphs": ["Consumers sometimes find it difficult to advocate for themselves when credit reporting issues arise because they are not aware of their rights and how to exercise them. According to a CFPB report, some consumers are confused about what credit reports and scores are, find it challenging to obtain credit reports and scores, and struggle to understand the contents of their credit reports. The CFPB receives more credit reporting complaints than complaints in any other industry it regulates. Currently, the CFPB provides financial education resources on its website to help educate consumers about their rights regarding consumer reporting. The credit bureaus' websites also provide information about how to dispute inaccurate information, and consumers can contact them by phone or mail.", "The CCRRA proposes that CRAs provide free credit scores and explanations of those scores to consumers in their annual free credit report. In addition, consumers would be entitled to these free credit reports at other times, for example, whenever they apply for a new mortgage, auto loan, or student loan, or if a consumer's identity is stolen. The report and score used to make underwriting decisions in connection with these events would be provided to the consumer. The CCRRA also would direct the credit bureaus to give consumers more information on dispute rights, and it would require hard inquires to be limited for a longer 120-day shopping window for certain consumer credit products (as described in the box \"Some Factors Frequently Used to Calculate Credit Scores\" above). "], "subsections": []}, {"section_title": "Appropriate Purposes for Using Credit Bureau Data: Employment Decisions", "paragraphs": ["Policy questions exist regarding the appropriate uses of credit bureau data, particularly for uses outside of extending credit to consumers. For example, credit information can be used for employment decisions. According to the Society for Human Resource Management (a human resources professional society), in 2012, almost half of surveyed organizations in their membership used credit background checks on some of their job applications. Employers report that they use this information to reduce the likelihood of employee theft or embezzlement and to reduce legal liability for negligent hiring. To comply with the FCRA, employers must inform an applicant that his or her credit report is a part of a hiring decision, and acquire the applicant's written permission to obtain the report. If an applicant is denied a job, or if the employer takes another adverse action due to information on a credit report, then the applicant must be given a copy of the report and a summary of their FCRA rights.", "Whether the use of credit information in employment decisions unnecessarily harms prospective job applicants is debatable. For some occupations, past financial difficulties may increase the likelihood, for example, that the employee could be bribed or compromised in some way; however, this information may not be essential for success in all occupations. Currently, many states limit employers' use of credit information for employment decisions. The CCRRA would ban the use of credit information for employment decisions, unless required by law or for a national security investigation."], "subsections": []}, {"section_title": "Consumers with Limited Credit Histories and Use of Alternative Scoring Methods", "paragraphs": ["The CFPB estimates that credit scores cannot be generated for approximately 20% of the U.S. population due to their limited credit histories. The CFPB distinguishes between different types of consumers with limited credit histories. One category of consumers, referred to as credit invisibles , have no credit record at the three largest credit bureaus and, thus, do not exist for the purposes of credit reporting. According to the CFPB, this group represents 11.0% of the U.S. adult population, or 26 million consumers. Another category of consumers do exist (have a credit record), but they still cannot be scored or are considered non scorable . Nonscorable consumers either have insufficient (short) histories or outdated (stale) histories. The insufficient and stale unscored groups, each containing more than 9 million individuals, collectively represent 8.3% of the U.S. adult population, or approximately 19 million consumers according to the CFPB. Younger adults may be part of the credit invisible or nonscorable population because they lack a sufficient credit history. As consumers get older, however, the problem of being credit invisible or belonging to the insufficient part of the nonscorable group typically declines, but may begin to reoccur after the age of 60. Older adults, who may have considerably reduced their credit usage, perhaps as they prepare to enter retirement years, may encounter the problem of having stale credit records. Because credit scoring models vary by firms, consumers that cannot be scored by some models might still have the ability to be scored by other models; thus, the state of being nonscorable may depend upon the credit reporting data records and scoring models used. ", "Borrowers with missing or impaired credit histories may be able to improve their ability to get reliable credit scores by using credit building loans, such as secured credit cards that require either security deposits as collateral for the amount of the line of credit or links to checking or savings accounts, thereby allowing lenders to recover funds if payments are missed. The security deposit is refunded if borrowers do not miss payments. Secured credit card lending can help borrowers build or repair their credit histories, assuming that the more favorable customer payment activity is reported to credit bureaus. In addition, the use of alternative credit scores may also help the credit invisibles because other types of consumer payment activity (discussed below) may be predictive in regard to how borrowers would manage credit. In short, options that increase the ability to calculate scores for the invisible or currently nonscoreable consumer groups could allow lenders to better determine the quantity and scope of financial relationships they can establish with such groups. ", "A lternative credit scoring models could potentially increase accuracy by including additional information beyond that which is traditionally included in a credit report. For example, some credit score models do not distinguish between unpaid and paid (resolved) tradelines. Most credit scores are calculated without utility and rent payments information. Arguably, including this information would benefit the credit scores for some individuals with limited or no credit histories, potentially increasing their access to\u2014and lowering their costs of\u2014credit. Conversely, information about medical debts has often been included in credit scores, but the unevenness in medical reporting, as previously discussed, and possibly the consumers' lack of choice in incurring medical debt raises questions about whether medical debt tradelines should be considered reliable predictors of creditworthiness or credit performance. For this reason, some newer versions of credit scoring apply less weight to medical debt. In short, developing credit scores with new information might allow lenders to find new creditworthy consumers.", "Regulators and Congress have considered the potential for alternative credit scoring. In 2014, the Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac\u2014the government-sponsored enterprises (GSEs) that purchase mortgages in the secondary market\u2014to consider using more updated credit scoring models in their mortgage underwriting. Under P.L. 115-174 , FHFA is required to define, through rulemaking, the standards and criteria the GSEs will use for validating credit score models used when evaluating whether to purchase a residential mortgage. If enacted, the CCRRA would direct the CFPB to report to Congress on the impact of using nontraditional data on credit scoring.", "Full implementation of newer versions of credit scoring models, however, may not occur quickly. In the mortgage market, upgrading automated underwriting systems is costly for the GSEs, FHA, and loan originators. Not all originators will choose to update their automated underwriting systems. Even if alternative credit scoring models were widely adopted, the credit score is not the only variable considered during the underwriting process. Just as several factors are included in the development of a credit score, a credit score is only one of several factors included in an automated underwriting model (also referred to as an underwriting scorecard). The debt-to-income ratio, for example, may still be an important variable for mortgage underwriting. Higher levels of medical and student loan debts may still affect mortgage underwriting decisions. Hence, the use of alternative credit scores may help some borrowers close to a threshold or borderline, yet still not translate into significant changes in credit access across the board."], "subsections": []}, {"section_title": "Data Protection and Security Issues", "paragraphs": ["Congressional interest in data protection and security in the consumer data industry has increased following the announcement, on September 7, 2017, of the Equifax cybersecurity breach that potentially revealed sensitive consumer data information for 143 million U.S. consumers. CRAs are subject to the data protection requirements of Section 501(b) of the Gramm-Leach-Bliley Act (GLBA). Section 501(b) requires the federal financial institution regulators to \"establish appropriate standards for the financial institutions subject to their jurisdiction relating to administrative, technical, and physical safeguard\u2014(1) to insure the security and confidentiality of consumer records and information; (2) to protect against any anticipated threats or hazards to the security or integrity of such records; and (3) to protect against unauthorized access or use of such records or information which could result in substantial harm or inconvenience to any customer.\" ", "The CFPB does not have the authority to prescribe regulations with regard to safeguarding the security and confidentiality of customer records. Instead, the FTC has the authority to enforce Section 501(b) as the federal functional regulator of nonbank financial institutions, including CRAs. The FTC has promulgated rules implementing the GLBA requirement. Because the FTC has little upfront supervisory or enforcement authority, the agency typically must rely upon its enforcement authority after an incident has occurred. In the 116 th Congress, bills such as H.R. 331 and H.R. 1282 would direct the FTC to ensure sufficient standards for safeguarding consumer information, including for the credit bureaus and data furnishers. In addition, in March 2019, a Government Accountability Office report became public that recommended actions for the FTC, the CFPB, and Congress to strengthen oversight of credit bureaus' data security.", "Meanwhile, P.L. 115-174 , Section 301, requires credit bureaus to provide fraud alerts for consumer files for at least a year under certain circumstances. In addition, credit bureaus must provide consumers with one free freeze alert and one free unfreeze alert per year. The law also established further requirements to protect minors. Currently, many credit bureaus provide consumers services such as credit monitoring for identity theft victims. In general, credit bureaus charge fees for these services, paid for by either a consumer or private company after a data breach incident. The CCRRA would expand protections for identity theft victims, including the right to free credit monitoring and identity theft services. It would require the CFPB to create new regulations to define the parameters for these new consumer benefits, including how long they should be provided and what services should be included. "], "subsections": []}]}]}}
{"id": "RS21282", "title": "Military Service Records, Awards, and Unit Histories: A Guide to Locating Sources", "released_date": "2019-05-20T00:00:00", "summary": ["This guide provides information on locating military unit histories and individual service records of discharged, retired, and deceased military personnel. It also provides information on locating and replacing military awards and medals. Included is contact information for military history centers, websites for additional sources of research, and a bibliography of other publications, including related CRS reports."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Personnel Files: Military Service and Pension Records at the National Archives", "paragraphs": ["The Military Personnel Records division of the National Personnel Records Center (NPRC), a component of the National Archives and Records Administration (NARA) located in St. Louis, Missouri, holds most existing U.S. military personnel, health, and medical records of discharged and deceased veterans of all services from World War I to the present. Neither the NPRC nor the Department of Defense (DOD) intends to destroy the physical records of U.S. servicemembers. Some older records have been electronically scanned to reduce the handling of fragile records. See NARA's site \"Access to Military Service and Pension Records\" at https://www.archives.gov/research/order/order-vets-records.html . ", "Official Military Personnel File (OMPF) records may be requested online at https://www.archives.gov/veterans/military-service-records , by using the Standard Form 180 and submitting by mail (the appropriate address listed on the back of the form), or fax (314-801-9195). ", "Veterans and their next-of-kin (NOK) may request these records. According to the NPRC, for the Air Force, Navy, Marine Corps, and Coast Guard, the NOK is defined as the unremarried widow or widower, son, daughter, father, mother, brother or sister; for the Army, the NOK is defined as the surviving spouse, eldest child, father or mother, eldest sibling or eldest grandchild. ", "If an individual does not meet the definition of a NOK, he or she is considered a member of the general public and may request military personnel records via the Freedom of Information Act (FOIA). See \"Access to OMPFs for the General Public\" at https://www.archives.gov/st-louis/military-personnel/public/general-public.html .", "In 1973, a fire at NPRC destroyed approximately 16 million to 18 million Army and Air Force official military personnel files. In such cases where files were lost, NPRC uses alternate sources of information to respond to requests.", "More information about obtaining military personnel files can be found on the NPRC website, http://www.archives.gov/st-louis/military-personnel/ , or by contacting the center at", "National Personnel Records Center Military Personnel Records 1 Archives Drive St. Louis, MO 63138 Tel: [phone number scrubbed] congressional line Tel: [phone number scrubbed] public line Status Update Request Form: https://www.archives.gov/st-louis/forms", "Older military personnel records (generally prior to 1917) are located at ", "National Archives and Records Administration (NARA) Textual Archives Division Washington, DC 20408 http://www.archives.gov/veterans/military-service-records/pre-ww-1-records.html "], "subsections": [{"section_title": "Correcting Military Service Records", "paragraphs": ["For guidance on the review of discharges and military corrections boards, see NARA's \" Veterans' Service Records: Correcting Military Service Records \" . For i nformation on the military service review boards (Air Force, Army, Coast Guard, and Navy and Marine Corps) , see \" Boards for Correction of Military Records (BCMR) / Discharge Upgrades \" site. NARA's site also provides the following BCMR guidance: ", "\" Prior to submitting a request to a Board for Correction of Military Records, ALL administrative avenues must be used. Generally, that means a request to NPRC for a correction (minor corrections can be made by NPRC), then a request to the military service department (service departments can make more corrections than NPRC), and finally if both these fail, then submit DD Form 149, with supporting evidence as instructed on the form .\""], "subsections": []}]}, {"section_title": "Military Awards and Decorations", "paragraphs": ["The NPRC also provides information and guidance on how to request military awards and decorations online and by mail for veterans and their NOK; replacing certain military medals; and obtaining a Cold War Recognition Certificate. This is available for the records of a servicemember who separated before or during 1956. For records for individuals who separated after 1956, these records can be requested through FOIA. The general public may also purchase a copy of the veteran's OMPF to determine the awards due and obtain the medals from a commercial source. Individuals can request information on military service medals, decorations and awards online: https://www.archives.gov/personnel-records-center/awards-and-decorations . ", "By military service (Army, Navy, Marine Corps, and Air Force including Army Air Corps & Army Air Forces) via mail:", "National Personnel Records Center 1 Archives Drive St. Louis, MO 63138", "For Coast Guard:", "Coast Guard Personnel Service Center 4200 Wilson Blvd., Suite 900 (PSC-PSD-MA) Stop 7200 Arlington, VA 20598-7200"], "subsections": [{"section_title": "Cold War Recognition Certificate", "paragraphs": ["The National Defense Authorization Act (NDAA) for Fiscal Year 1998 ( P.L. 105-85 ) in Section 1084 required the Secretary of Defense to prepare a certificate recognizing the Cold War service of qualifying members of the Armed Forces and civilian personnel of DOD and other government agencies contributing to national security. This certificate, known as the \"Cold War Recognition Certificate,\" may be awarded upon individual request to all members of the Armed Forces and qualified federal government civilian personnel who served the United States during the Cold War era from September 2, 1945, to December 26, 1991. "], "subsections": []}]}, {"section_title": "Finding Unit Histories", "paragraphs": ["The Modern Military Records office of NARA has custody of records relating to World War I, World War II, Korea, and Vietnam. The records vary by conflict and branch of service; for example, the records for Army units active during the interwar periods (1920-1939 and 1945-1950) are incomplete. For more information, contact the Textual Records office at ", "Textual Records Office National Archives and Records Administration at College Park 8601 Adelphi Road College Park, MD 20740-6001 Tel: [phone number scrubbed] Email: [email address scrubbed] ", "If a military unit record is not publicly available, a FOIA request may be submitted to the agency where the record is held. For example, for special access records held at the National Archives at College Park, contact the Archives FOIA office at the following:", "Special Access and FOIA Division National Archives at College Park 8601 Adelphi Road College Park, MD 20740-6001 Tel: [phone number scrubbed] Email: [email address scrubbed]", "For more information on how to submit a FOIA request, visit https://www.foia.gov/how-to.html .", "Other types of auxiliary and organizational records, including Army morning reports, Army unit rosters, Army officer pay cards, Navy muster rolls, U.S. Army Surgeon General's office records and Veterans Administration index cards are maintained at the National Archives in St. Louis, Missouri. Further information regarding these records, as well as the timespan of available records for each category, are available at http://www.archives.gov/st-louis/archival-programs/other-records/index.html . Certain published unit histories can also be found in the collections of the military departments (see Table 1 )."], "subsections": [{"section_title": "Military Records for Veterans Compensation", "paragraphs": ["To support disability claims of exposure to hazardous materials (Agent Orange, asbestos, etc.), numerous veterans are culling through Army morning reports, unit rosters, pay cards, Navy muster rolls, Captain logs/Navy Deck logs, etc. during their military service. For more information on military exposures, see the VA's Military Exposure site: https://www.publichealth.va.gov/exposures/index.asp . ", "At this time, VA continues to study the long-term health issues of deployed veterans and their exposure to burn pits used at military waste sites in Iraq and Afghanistan. Currently, there is no compensation available for exposure to burn pits. For more information, see the VA's Public Health site on Burn Pits at https://www.publichealth.va.gov/exposures/burnpits/ and related CRS products on VA health care and disability in the sources below. "], "subsections": []}]}, {"section_title": "Selected Additional Sources for Research", "paragraphs": [], "subsections": [{"section_title": "Selected CRS Reports", "paragraphs": ["CRS Report R41386, Veterans' Benefits: Burial Benefits and National Cemeteries , by Scott D. Szymendera ", "CRS Report R42324, Who Is a \"Veteran\"?\u2014Basic Eligibility for Veterans' Benefits , by Scott D. Szymendera ", "CRS Report R42747, Health Care for Veterans: Answers to Frequently Asked Questions , by Sidath Viranga Panangala ", "CRS Report R44837, Benefits for Service-Disabled Veterans , by Benjamin Collins, Scott D. Szymendera, and Libby Perl ", "CRS Report 95-519, Medal of Honor: History and Issues , by Barbara Salazar Torreon", "CRS Report R42704, The Purple Heart: Background and Issues for Congress , by Barbara Salazar Torreon ", "CRS Report RS21405, U.S. Periods of War and Dates of Recent Conflicts , by Barbara Salazar Torreon "], "subsections": []}, {"section_title": "Selected Federal Government Web Resources", "paragraphs": ["American Battle Monuments Commission (ABMC) at http://www.abmc.gov ", "The website contains databases of veterans interred or memorialized at overseas American military cemeteries and memorials.", "The Civil War Soldiers and Sailors System, National Park Service", "https://www.nps.gov/civilwar/soldiers-and-sailors-database.htm", "This website contains a database of the men who served in the Union and Confederate armies during the Civil War, as well as information on regiment histories, significant battles, and some prisoner-of-w ar records and cemetery records.", "Confederate States of America (CSA) Records at the Library of Congress", "https://www.loc.gov/collections/confederate-states-of-america-records/about-this-collection/ ", "The records of the C SA span the years 1854-1889, with the bulk of the material concentrated in the period 1861-1865, during the Civil War . Provides links to Official Records of the Union and Confederate Armies External ; Official Records of the Union and Confederate Navies External ; and War Department Collection of Confederate Records.", "Military Resources: Veterans at the National Archives Library Information Center (ALIC) https://www.archives.gov/research/alic/reference/military/veterans-related.html ", "This site provides links to v eterans ' i nformation , m ilitary c asualties , Prisoners of War/Missing in Action (POW/MIAs) , and m edals & h onors .", "Philippine Army and Guerilla Records at the National Archives", "http://www.archives.gov/st-louis/military-personnel/philippine-army-records.html ", "The collection includes records of the Philippine Commonwealth Army of the United States Armed Forces Far East (USAFFE), including recognized Philippine Guerrilla forces ( not the Army of the United States or Philippine Scouts) during World War II. ", "Veterans History Project (VHP) at the Library of Congress at http://www.loc.gov/vets/", "VHP collects, preserves, and makes accessible the personal accounts of American veterans.", "Veterans Affairs (VA) Nationwide Gravesite Locator at http://gravelocator.cem.va.gov/", "The database contains burial locations of veterans and their family members. "], "subsections": []}]}, {"section_title": "Selected Bibliography", "paragraphs": ["Beers, Henry Putney. The Confederacy: A Guide to the Archives of the Government of the Confederate States of America . Washington, DC: National Archives and Records Administration, 1998.", "Borch, Fred L. For Military Merit: Recipients of the Purple Heart . Annapolis, MD: Naval Institute Press, 2010.", "Center of Military History. Order of Battle of the United States Land Force s in the World War. Washington, DC: Center of Military History, U.S. Army, 1988. 3 volumes.", "Controvich, James T. United States Army U nit and Organizational H istories: A B ibliography . Lanham, MD: Scarecrow Press, 2003.", "\u2014\u2014 United States Air Force and I ts A ntecedents: P ublished and P rinted U nit H istories, a B ibliography . Lanham, MD: Scarecrow Press, 2004.", "Dinackus, Thomas D. Order of Battle: Allied Ground Forces of Operation Desert Storm. Central Point, OR: Hellgate Press, 2000.", "Dornbusch, C. E. Military Bibliography of the Civil War. New York: New York Public Library, 1971.", "Dyer, Frederick H. A Compendium of the War of the Rebellion. New York: T. Yoseloff, 1959.", "Johnson, Lt. Col. Richard S., and Debra Johnson Knox. How to Locate Anyone Who Is or Has Been in the Military: Armed Forces Locator Guide. Spartanburg, SC: MIE Publishing, 1999.", "Owens, Ron. Medal of Honor: Historical Facts and Figures. Paducah, KY: Turner Publishing ", "Company, 2004. ", "Plante, Trevor K. Military Service Records at the National Archives. Washington, DC: National Archives and Records Administration, 2009. ", "Stanton, Shelby L. World War II O rder of B attle, U.S. Army ( G round F orce U nits ) . Mechanicsburg, PA: Stackpole Books, 2006.", "\u2014\u2014 Vietnam Order of Battle. Mechanicsburg, PA: Stackpole Books, 2003.", "U.S. Department of the Army. Office of Military History. Order of Battle of the United States Army Ground Forces in World War II, Pacific Theater of Operations: Administrative and Logistical Commands, Armies, Corps, and Divisions. Washington, DC: Department of the Army, 1959.", "U.S. Naval War Records Office. Official Records of the Union and Confederate Navies in the War of the Rebellion. Harrisburg, PA: National Historical Society, 1987. 30 v.", "U.S. War Department. The War of the Rebellion: A Compilation of the Official Records of the Union and Confederate Armies . Washington, DC: GPO, 1880-1901. 70 v."], "subsections": []}]}}
{"id": "R44601", "title": "House and Senate Restaurants: Current Operations and Issues for Congress", "released_date": "2019-04-02T00:00:00", "summary": ["Dining facilities in the Capitol and in House and Senate office buildings provide an essential convenience for Members of Congress and congressional staff, enabling them to easily obtain meals, beverages, and snacks, and quickly return to work. By providing an efficient way to meet congressional dining needs during unpredictable workdays, the restaurant systems help facilitate the legislative and representational work of Congress. These restaurants also provide spaces for constituents and other visitors to meet with staff and Members of Congress, or to purchase refreshments. House and Senate restaurant services are also available to provide catering to Members of Congress when they host events on Capitol grounds. The restaurants remain a subject of ongoing congressional interest, as many Members and staff visit them on a daily basis.", "Those involved with restaurant administration in the House and Senate have often considered how management choices affect operating costs, services available, oversight, and other elements of the restaurant systems. For much of their histories, the House and Senate operated their own restaurants, but since 1994 in the House and since 2008 in the Senate, private vendors have run the restaurants. In August 2015, the House entered an agreement with Sodexo to operate the 17 facilities in the House restaurant system, subject to direction from the Chief Administrative Officer (CAO) and the Committee on House Administration. In December 2015, the Senate entered a new contract with Restaurant Associates to operate the 12 facilities in the Senate restaurant system, subject to direction from the Architect of the Capitol (AOC) and the Committee on Rules and Administration.", "Many argue that this professional restaurant management experience is necessary to meet the variety of customer needs in the House and Senate restaurants in a cost-effective manner. Numerous nearby eateries compete with the congressional restaurants for customers. Often, an advantage the House and Senate restaurants are able to provide is convenience for Members, staff, and visitors. This advantage, however, may be undermined if the restaurants are not responsive to customer input and are unable to provide consistent food quality, sufficient variety, or reasonably priced service, relative to their competitors.", "Food and price issues, along with other day-to-day operational issues, including personnel matters, are largely the responsibility of the restaurant contractors. Some Members and observers have raised concerns about the degree of accountability for the House and Senate restaurant contractors, believing that the restaurants' administration reflects upon Congress and that the restaurants should set an example for other businesses to follow. Although the House and Senate are responsible for restaurant oversight, the delegation of restaurant operations to private contractors means the chambers have less control over employee wages and benefits, procurement, or other business decisions that affect the restaurant systems.", "The combination of entities involved in House and Senate dining operations creates a unique organizational arrangement, unlike other institutional dining systems. Other features of Congress also distinguish the House and Senate restaurants from similar-seeming restaurant operations. The restaurants' business volume, for example, is highly contingent on the congressional calendar, consisting of a fairly constant weekday breakfast and lunch business, but experiencing substantial, and sometimes unexpected, decreases if Congress adjourns for a recess. Information specific to the House and Senate restaurant systems may therefore be of particular interest to those concerned with their operations. Additional background and context on House and Senate restaurant operations is found in CRS Report R44600, History of House and Senate Restaurants: Context for Current Operations and Issues, by Sarah J. Eckman."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["On a daily basis, the restaurants, cafeterias, and carryout facilities operated by the House of Representatives and the Senate serve Members of Congress, congressional employees, constituents, and other visitors to the Capitol, House office buildings, and Senate office buildings. The House and Senate restaurant systems have existed since the early 1800s and have grown and modernized over time. Although many of their services may seem similar, food operations are separately administered and managed for the House, for the Senate, and for the Capitol Visitor Center (CVC). By meeting congressional dining needs during workdays that frequently can be unpredictable, the restaurant systems help facilitate the legislative and representational work of Congress. Because many Members and staff visit these restaurants every day, they remain a subject of ongoing congressional interest. "], "subsections": []}, {"section_title": "House Restaurant System Operations", "paragraphs": [], "subsections": [{"section_title": "Present Vendor and Oversight for House Restaurants", "paragraphs": ["Since 1994, the House restaurants have been operated by a private vendor, with oversight provided by the House. Under the Rules of the House of Representatives, the House restaurants fall under the jurisdiction of the Committee on House Administration, which delegates much of the daily oversight and financial management of the restaurant system to the Chief Administrative Officer (CAO) of the House. On June 9, 2015, the CAO announced that Sodexo Government Services would be the new food service provider for the House. The contract with Sodexo is for an initial term of four years. Starting in 2019, six two-year options may extend the contract for up to 12 additional years. ", "A comprehensive survey of House food service needs, based on analysis of restaurant records, and the experiences of secret shoppers, focus groups, and surveys, had been commissioned during fall 2013 to help inform the vendor selection process. The CAO issued a request for proposals (RFP) for vendors interested in running any or all of the House restaurants in October 2014. Prospective contractors were notified that \"the House will have no financial responsibility or liability under the terms of the contract,\" and that the contractor selected would pay the House a monthly commission, determined by an agreed-upon percentage of gross receipts. The CAO encouraged ideas from vendors to improve operations in the Members' dining room and also initiated service schedule changes. Food service providers would not be required to operate the Members' dining room when late votes were scheduled in the evenings, on weekends, or on holidays, and instead, the room would be available for hosting catered events. ", "To address some of the suggestions from the 2013 food service study, the RFP required that contractors include three-tier pricing strategies (value, standard, and premium) for all areas except vending. Once prices were set, any price increases would be prohibited for the first two years of service. Vendors were also required to introduce a minimum of two branded eatery concepts that would suit the needs of House customers. Catering requirements and responsibilities for different locations in the Capitol and office buildings were detailed, and the new contractor would be expected to \"successfully execute events with less than four (4) hours' notice.\" The new contractor would be required to conduct at least one formal focus group per year to help ensure long-term customer satisfaction and was encouraged to \"utilize a variety of assessment tools\" to appraise customer service.", "Individuals from outside of the CAO's office were included on the panel that reviewed and evaluated vendor proposals, and the panel also included a staff member from a Member office. To aid in the service transition, once Sodexo was chosen as the new vendor, it designated a community relations officer, a position unique to its House operation, to help address comments and resolve problems raised by House dining patrons. It is not publicly known whether or not the past provider, Restaurant Associates, submitted a bid to renew its contract. Sodexo assumed its responsibilities as the House vendor on August 7, 2015, and immediately began renovations and other changes related to the transition, some of which continued in 2016. "], "subsections": []}, {"section_title": "Services Available in the House Restaurant System", "paragraphs": ["Currently, 10 dining areas and carryouts in the House of Representatives and the House office buildings are operated by Sodexo as part of the House food services. Additionally, Sodexo is responsible for in-house catering services and most vending machines for the House. Sodexo introduced SoGo Cards, a new form of payment, for House staff to use in the House cafeterias. The cards are available at the cash registers of the dining facilities, can be reloaded with funds online, and provide a reward program regular customers may enroll in. All the House food service facilities, including the vending machines, are required to accept all major credit and debit cards, and many vending machines also accept Apple Pay and Google Pay. Additional \"pop-up\" lunch options in the O'Neill House Office Building main lobby operate through a partnership with Fooda on certain weekdays, featuring foods from local restaurants. ", "The facilities operated under the House restaurant system are listed in Table 1 . With the arrival of Sodexo in 2015, the CAO announced several major changes to House dining operations, including the following:", "For lunch and dinner, the Members' dining room would replace a la carte service with a buffet. The introduction of an online system that allows users to preorder their food items and pick them up in the Longworth Cafeteria. The replacement of some eateries with popular branded restaurant concepts.", "Members of the House Appropriations Subcommittee on Legislative Branch expressed continuing concerns about food quality, high prices, and poor service in the House restaurants under Sodexo during the House of Representatives FY2018 budget hearing in May 2017. At the hearing, the CAO stated that a quality assurance surveillance team, comprised of five CAO employees, had been created to continually appraise contractor performance in a number of areas. According to the CAO, observations and feedback from the surveillance team during its first two months had led to some improvements in food quality and changes in restaurant management personnel. A new chef was brought in to the Members' dining room and some table service was reintroduced in response to feedback.", "Several branded restaurant concepts have been introduced to the House dining facilities, beginning with a Dunkin' Donuts/Baskin Robbins in the Longworth House Office Building and a Subway in the Rayburn House Office Building, which opened in 2016. In January 2018, a food service survey conducted within the House community by the CAO \"indicated a strong desire for both cafeteria and branded food options,\" and the legislative branch conference report for FY2019 \"encourage[d] the CAO to continue exploring opportunities to add more [branded concepts]\" throughout the House restaurant system. Beginning in 2018, \"pop-up restaurants\" have been featured on a weekly basis in the Longworth cafeteria, offering food options from branded restaurant chains. Three additional branded concepts have opened or are scheduled to open in the House during 2019: an &pizza in Rayburn, an Au Bon Pain in Cannon, and a Steak 'n Shake in Rayburn. ", "The FY2019 legislative branch appropriations conference report also directed the CAO to explore applying a \"branded option concept\" to the Members' dining room \"in an effort to provide consistent service, better food selection, and quality food to Members and their guests.\" Beginning in September 2018, the Members' dining room also began providing service to congressional employees."], "subsections": []}]}, {"section_title": "Senate Restaurant System Operations", "paragraphs": [], "subsections": [{"section_title": "Present Vendor and Oversight for Senate Restaurants", "paragraphs": ["Since 2008, food services in the Senate have been provided by a private contractor, under the jurisdiction of the AOC and subject to policy directives from the Committee on Rules and Administration. Rule XXV of the Standing Rules of the Senate grants the committee authority over \"Services to the Senate, including the Senate restaurant.\" The food service vendor selected for the Senate in 2008 was Restaurant Associates, part of Compass Group, which was selected again under a new seven-year contract, signed December 18, 2015. A 2016 Department of Labor investigation revealed wage-related infractions that could lead to contract renegotiations sooner than 2022. ", "Under current arrangements, additional food vendors may be subcontracted to provide some Senate restaurant services. In 2012, for example, requests to bring kosher meals to the Dirksen cafeterias were ultimately fulfilled by Bubbie's Gourmet; the decision was authorized by the Senate Rules and Administration Committee, and Restaurant Associates was responsible for selecting the subcontractor and overseeing its operations. In 2001, a coffee shop and cafe owned by a local family, Cups & Company, opened in the Russell Senate Office Building and remains independently operated. "], "subsections": []}, {"section_title": "Services Available in Senate Restaurants", "paragraphs": ["In the Senate and its office buildings, 12 dining areas and carryouts are operated as a part of the Senate Restaurant System, along with additional vending areas. The facilities included in the Senate Restaurant System are listed in Table 2 . Restaurant Associates also provides in-house catering services, including a \"Caf\u00e9 to Go\" option that can serve groups of 40 or less with advance notice of 24 hours. "], "subsections": []}]}, {"section_title": "Issues Related to Congressional Restaurants", "paragraphs": ["Some of the issues affecting the restaurant systems are unique to the House and others are unique to the Senate, resulting from the fact that each chamber administers its own restaurant services. Other issues affect the restaurants in both chambers or are typical challenges in any food service operation. This section focuses on current issues related to the congressional restaurants, but many of the challenges the House and Senate restaurants face today are similar to issues they have faced in the past. For more background on these topics, see CRS Report R44600, History of House and Senate Restaurants: Context for Current Operations and Issues , by Sarah J. Eckman."], "subsections": [{"section_title": "Financial Challenges in Operating Restaurants", "paragraphs": ["Throughout history, the House and Senate restaurants have faced financial challenges. In part, this is a consequence of the operating practices adopted by the House and Senate restaurants tending to reflect the needs of Congress, even when these choices sometimes hurt the ability of the restaurants to break even. This approach illustrates the view that the restaurants should operate as a necessary service rather than a profit-generating enterprise\u2014a perspective that originated with the earliest congressional restaurants in an underdeveloped Washington, DC, and persisted long after. Although more dining options exist in the Capitol Hill neighborhood today, the dining facilities in the Capitol and congressional office buildings often remain a more convenient option for Members, staff, and visitors.", "The operating hours of the House and Senate restaurants are one factor that, historically, have contributed to their financial challenges. The House and Senate restaurants, for example, operate primarily for breakfast and lunch service during weekdays, whereas some claim that typical restaurants often rely on dinner service and weekend customers to generate much of their revenue. The cost of labor associated with staffing the restaurants during nonpeak operating hours has often been a significant expense for the restaurant systems. While the restaurants were under congressional management during much of the 20 th century, their finances were particularly affected by legislative measures that established the wages and benefits of federal or congressional employees.", "Some dining establishments in each chamber have been consistently more profitable than others. Eateries that serve a smaller number of patrons, close when Congress is out of session, or offer full table service can be more expensive to operate. Over the years, the restaurant systems have sometimes operated at a net loss; in other years, revenue from catering or the cafeterias can help offset losses from other establishments to help the overall system break even or make a profit.", "Obtaining a complete picture of the House and Senate restaurant system finances has always been difficult, given that restaurant responsibilities have often been distributed across multiple actors. When the House and Senate managed their own restaurants, multiple congressional entities were involved in the restaurants' operation, which created challenges for obtaining a complete financial picture. Since the restaurants have been run by private contractors, many business records are not subject to the same public disclosure requirements that government entities would be. This ambiguity has sometimes led to incomplete reports about restaurant finances. The House and Senate restaurants today receive commission-based fees from the food service providers, but more detail is unavailable, since most of the financial records regarding the restaurants are maintained by the vendors and are not publicly accessible."], "subsections": []}, {"section_title": "Pricing of Menu Items", "paragraphs": ["Attempts to improve House and Senate restaurant finances over the years have frequently involved food price increases. Many of these price increases have been minimal adjustments required to keep up with increasing costs of food, energy, and labor, while others have been larger adjustments. Sometimes, the relatively small increase to revenue from price increases has not been sufficient to completely offset increased expenses. Contract agreements with vendors sometimes prohibit price increases for a specified amount of time, which can make it difficult for vendors to adjust and compensate for unexpected increases in their operating expenses. Thus, when price changes do occur, the restaurants are often adjusting for several years of increased costs, which can appear as a large jump to customers. In the transition to Sodexo in the House during 2015, for example, the CAO acknowledged that prices on many menu items would increase, explaining that", "while prices on many items will increase when the new contract takes effect, no price increases have been approved in House food service facilities over the past six years. Bidders were required to propose pricing comparable to similar government and corporate food service facilities.\u00a0The new contract limits any future increases to changes in a subset of the Producer Price Index, with a three percent annual cap.", "Complaints about restaurant prices have persisted over the history of the restaurant systems, and the 2013 study of dining operations in the House suggested that many customers, particularly staff and visitors, remain price-conscious. When possible, customers may be willing to trade the convenience of on-site services for off-site alternatives if the dining options in the Capitol complex are not perceived as good values. "], "subsections": []}, {"section_title": "Meeting Evolving Expectations for Quality and Services", "paragraphs": ["In addition to reasonable prices, the House and Senate restaurants are expected to meet other customer standards, often related to food quality, nutrition, and variety. Food service vendors, through their experience in the broader restaurant industry, are often aware of current consumer interests, and the House and Senate restaurants solicit customer feedback to help ascertain what needs and values their particular customers have. When the current vendor, Sodexo, was selected for the House restaurants, the CAO acknowledged that providing quick dining options was a main priority for the restaurant service, although the quality of food, nutrition, and customer service were also considerations. The requirement for two branded restaurant concepts also reflected customer preferences. On its website for Senate dining, Restaurant Associates has, at times, highlighted its initiatives in \"sustainability as well as social and environmental responsibility.\" These include its efforts to provide organic food, locally produced food, sustainable seafood, cage-free eggs, and no trans-fats."], "subsections": []}, {"section_title": "Maintenance of Restaurant Facilities", "paragraphs": ["To continue to meet expectations for food quality and safety, efficiency in service, and customer satisfaction, dining facilities may require more frequent updates and renovations than other areas within the Capitol complex. Many of the most significant changes to the restaurant facilities occur during or soon after the transition to a new restaurant system vendor, but upgrades to equipment may be an ongoing concern. The age of the rooms that house dining services may present additional construction challenges and safety concerns. In January 2016, for example, the Longworth Cafeteria was evacuated and temporarily closed after several employees reported feeling ill from possible exposure to lead paint dust stirred up by ongoing nighttime kitchen renovations. ", "In addition to periodic updates to the restaurants themselves, large-scale renovations are sometimes necessary to improve and maintain the Capitol, House, and Senate facilities. Any closures to particular buildings can have an impact on House and Senate restaurant services, which are spread throughout these locations. The closure of a cafeteria with a full kitchen may require additional resources for other cafeterias, or a greater reliance on prepackaged food items prepared elsewhere in the restaurant system or off-site. The Cannon Renewal Project, for example, necessitated the closure of the Cannon Caf\u00e9 in December 2014, and it was replaced with a convenience store, Cannon Twelve, which is expected to operate until the renovation is complete. The Longworth Cafeteria operated under limited hours and periodically closed while major renovations were undertaken between July and November of 2016. Because many customers value convenience, the temporary reorganization of congressional office space due to renovations may also shift demand for cafeterias or carryouts from one building to another. "], "subsections": []}, {"section_title": "Oversight and Restaurant Management", "paragraphs": ["The degree to which Congress can and should be involved in the daily management of the House and Senate restaurants is a question that has persisted over time. Both chambers currently use private food service vendors to run the day-to-day operations of the restaurants, while retaining general authority for oversight of the restaurant systems. This, however, has not always been the case; the House operated its own restaurants as recently as 1994, and the Senate operated its own restaurants until 2008. ", "The reasons given in support of congressional management or private management have varied over time and often overlap, as each side has claimed that its approach would be financially advantageous, benefit employees, and improve the quality of food services provided. Those who have advocated for private management note that modern restaurant systems are larger and more complex than many of the internal operations managed by the House or the Senate. Food service requires consistent quality, safety, and efficiency, and some believe professional contractors familiar with the business of running large institutional restaurants are better able to achieve these objectives.", "Those who have supported congressional management, however, believe that each chamber has sufficient administrative means to operate the restaurants, and that Congress better understands the unique needs of the House and Senate restaurant systems and the constraints under which they operate. Private management may also raise oversight challenges for Congress if company financial records are not made available for review. Some Members have expressed concerns that contractors do not have to follow the same guidelines for personnel or procurement that the federal government does, even though the restaurants operate within the Capitol complex. "], "subsections": []}, {"section_title": "Employee Salaries and Benefits", "paragraphs": ["Issues related to employee wages and benefits affected the House and Senate restaurants during the 114 th Congress (2015-2016). A new contract for the House restaurants went into effect in August 2015, and a new contract for the Senate restaurants went into effect in December 2015. This created an opportunity for employees and others to advocate for changes, including higher wages for all restaurant employees and union representation for Senate restaurant employees, that they hoped to see before the terms of the new agreements were settled upon in each chamber. A summary of these recent events and ongoing concerns is below. "], "subsections": [{"section_title": "House Restaurant Employee Wages and Union", "paragraphs": ["Wages for House restaurant employees are a concern expressed by some House Members. While the search for a new vendor was underway in 2015, Representative Debbie Wasserman Schultz proposed an amendment during the committee markup of the FY2016 Legislative Branch Appropriations Bill that would affect House restaurant employee wages. The proposal \"directed the [CAO] to solicit and select a food service contractor who provides a livable wage to its employees to meet basic needs for food and shelter,\" using local economic indices to determine an appropriate wage amount. In a 21-29 vote, the amendment was not agreed to. ", "The CAO noted that its office shares the \"understandable desire to ensure that the people who provide services to the House are compensated fairly,\" and indicated that the new House vendor was chosen, in part, based on \"the signals that Sodexo sent regarding the value it places on a strong, effective, fairly compensated workforce.\" When Sodexo took over the House restaurants in August 2015, it announced plans to voluntarily follow the D.C. Displaced Workers Protection Act of 1994, which guaranteed that no employees would be laid off for at least 90 days after the contractor change. Sodexo also agreed to recognize the restaurant employees' union, UNITE HERE Local 23, and signed a collective bargaining agreement. ", "Many provisions in the collective bargaining agreement with Sodexo remain similar to those that applied to the previous House vendor, Restaurant Associates, including the pay scale, annual and sick leave, health insurance, short-term disability benefits, life insurance, and union pension. Workers who received higher wages or benefit levels based on their service under past House restaurant employer agreements continue to receive these levels. Sodexo provided starting wages for new employees ranging from $10.15 to $19.00 an hour, with a $0.20 per hour increase scheduled for June 1, 2016, and an additional $0.25 per hour increase to follow on December 1, 2016. Additionally, Sodexo offers House Restaurant System employees the option to enroll in a 401(k) plan and will match $0.35 of every dollar an employee contributes, up to 6% of the employee's earnings."], "subsections": []}, {"section_title": "Senate Restaurant Employee Wages and Interest in Unionizing", "paragraphs": ["Concerns have been raised about wages and benefits for Senate restaurant employees. A number of protests and advocacy initiatives occurred during late 2014 and throughout 2015 addressing pay and union representation for Senate restaurant employees. On April 22, 2015, approximately 40 Senate contract workers, some of whom were restaurant employees, participated in what was characterized as a strike with other workers and activists, calling for an executive order giving preference to federal contractors who would provide an hourly wage of at least $15 for their workers. Other labor action occurred during the summer and fall months, and an additional strike occurred on December 8, 2015. In addition to higher wages, some Senate restaurant employees also sought to form a union. ", "Some Senators indicated their support for the restaurant employees' concerns. On April 27, 2015, nine Senators signed a letter to the Senate Rules and Administration Committee, arguing that it was wrong for \"American taxpayers [to] subsidize these contractors by allowing them to pay low wages that must be augmented by taxpayer-funded benefits.\" The Senators also wanted federal contractors to provide healthcare and other benefits. Another letter, reiterating these goals and advocating further executive action to \"[make] the government a 'model employer,'\" was signed by 18 Senators and sent to the President of the United States on May 15. An additional letter was sent on August 5 to the Rules and Administration Committee, advocating for higher restaurant employee wages, signed by 40 Senators. A group of 34 Senators signed a letter on November 13 to the CEO of Compass Group, the parent company of Restaurant Associates, asking the company to recognize a union if a majority of the restaurant employees wanted to unionize. Some Senators and congressional staffers also participated in the protests and advocacy for restaurant employees, including Wednesday \"sit-in\" lunches or \"brown bag boycotts\" throughout the fall in the Dirksen cafeteria.", "Senate restaurant employees maintained that, given the high costs of living in the Washington, DC, area, a wage increase was needed so they could live above the poverty line and provide for their families. The new seven-year contract with Restaurant Associates went into effect January 2016. It included pay increases, reportedly raising the average hourly wage from $11.50 to $14.50 and the minimum starting wage to $13.30. Workers received additional benefits for health insurance, retirement savings, or transportation amounting to $4.27 per hour. "], "subsections": []}, {"section_title": "Department of Labor Investigation of Senate Job Title Changes", "paragraphs": ["On July 26, 2016, the Department of Labor (DOL) found that Restaurant Associates, and its subcontractor, Personnel Plus, owed $1,008,302 in back wages to 674 Senate restaurant employees. DOL found that many Senate restaurant workers were improperly classified into lower paying job categories and were required to work without compensation prior to their scheduled start times, which also resulted in underestimated overtime pay. This finding has led to renewed calls by some Senators to terminate the Senate's contract with Restaurant Associates. Restaurant Associates stated that the error was due to \"administrative technicalities,\" and that it had paid the workers in full.", "The DOL investigation began after Good Jobs Nation, an advocacy group, filed a complaint on behalf of the restaurant employees with DOL on January 14, 2016. After the AOC's December 2015 contract with Restaurant Associates went into effect, employees alleged that job misclassification had occurred. Federal contractor worker occupational titles and job descriptions are set forth under the Service Contract Act of 1965, and the contract with Restaurant Associates specified particular minimum wages for different occupational titles in the Senate restaurant system. Employees were supposed to receive raises under the new contract, but if the employee's title changed from a higher-paying position to a lower-paying position when the contract took effect, the employee could receive little or no pay increase. ", "The AOC identified some of the misclassified employees through its own internal investigation in early 2016 and worked with Restaurant Associates to provide back pay for these workers and correct the misclassifications. On March 15, 2016, the AOC spoke at a Senate Appropriations Legislative Branch Subcommittee hearing, noting that \"we thought that we were doing a good thing [by including a pay raise in the new contract], only to be surprised just a week or two later ... that the pay rates that we had adjusted to were not being implemented.\" The AOC also indicated that he believed Restaurant Associates' reclassifications did constitute a violation of the contract terms. ", "A subsequent Government Accountability Office (GAO) review between December 2016 and May 2017 found that \"[t]he AOC's oversight of the Senate food services contract with Restaurant Associates has been consistent with its established oversight policies and practices in the AOC contracting manual.\" In addition to providing back pay to affected employees, DOL reports that Restaurant Associates agreed to retain an independent compliance monitor (at its own expense) and will not bid on any new federal service contracts for two years. DOL also reports that Restaurant Associates \"is taking additional proactive steps to ensure future compliance,\" including the appointment of a compliance manager and compliance supervisors and the creation of a confidential telephone hotline for employees or managers to report issues."], "subsections": []}]}]}, {"section_title": "Concluding Observations", "paragraphs": ["In many regards, the House and Senate food services operate like many large, institutional cafeterias do. Similar to many office cafeterias, House and Senate food services primarily serve breakfast, lunch, and snacks during regular workday business hours, and provide vending options for patrons who may be on-site during other times. Recognizing the availability of other dining options, the House and Senate food service providers attempt to provide convenient service, keep their prices competitive, and offer the types of menu items that customers enjoy.", "Some aspects of House and Senate dining operations, however, are necessarily unique, given the congressional environment in which they exist. The Members' dining rooms, for example, provide an ambiance not typically found in workplace eateries. In addition to their historic and architectural value, these dining rooms also provide Members of Congress and staff members a more formal and private setting in which to meet with guests or one another. ", "Another feature House and Senate dining operations must account for is that the schedule of Congress can be less predictable than that of other institutions, which can have a variety of effects on food services. An unscheduled recess, for example, can significantly reduce the number of customers the House and Senate dining services can expect. This often results in higher costs to the restaurants, which have to account for lost food and sometimes pay employees; as a result, recesses can also lead to temporary worker layoffs or reduced hours. Conversely, when Congress is in session, House and Senate food services must be able to handle high volumes of customers with a variety of needs. Because events like hearings or briefings can be added to, or moved around, the congressional schedule, food service providers, and catering in particular, must to be able to accommodate last-minute requests and changes. ", "The House and Senate restaurants are operated by private food service contractors who handle most of the day-to-day concerns. Despite this delegation, the House and Senate remain responsible for food service oversight. This shared administration resulted from how the congressional restaurant systems developed and grew over time. As a result, many of the issues faced by the restaurants today are addressed by the contractors themselves. Other issues are addressed by the House Administration Committee, Senate Rules and Administration Committee, or other congressional support offices. Together, these entities strive to meet the needs of the Members and staff who rely upon congressional dining services to help them carry out their daily legislative and representational work. "], "subsections": []}]}}
{"id": "RL32572", "title": "Nonstrategic Nuclear Weapons", "released_date": "2019-01-17T00:00:00", "summary": ["Recent debates about U.S. nuclear weapons have questioned what role weapons with shorter ranges and lower yields can play in addressing emerging threats in Europe and Asia. These weapons, often referred to as nonstrategic nuclear weapons, have not been limited by past U.S.-Russian arms control agreements, although some analysts argue such limits would be of value, particularly in addressing Russia's greater numbers of these types of weapons. Others have argued that the United States should expand its deployments of these weapons, in both Europe and Asia, to address new risks of war conducted under a nuclear shadow. The Trump Administration addressed these questions in the Nuclear Posture Review released in February 2018, and determined that the United States should acquire two new types of nonstrategic nuclear weapons: a new low-yield warhead for submarine-launched ballistic missiles and a new sea-launched cruise missile.", "During the Cold War, the United States and Soviet Union both deployed nonstrategic nuclear weapons for use in the field during a conflict. While there are several ways to distinguish between strategic and nonstrategic nuclear weapons, most analysts consider nonstrategic weapons to be shorter-range delivery systems with lower-yield warheads that might be used to attack troops or facilities on the battlefield. They have included nuclear mines; artillery; short-, medium-, and long-range ballistic missiles; cruise missiles; and gravity bombs. In contrast with the longer-range \"strategic\" nuclear weapons, these weapons had a lower profile in policy debates and arms control negotiations, possibly because they did not pose a direct threat to the continental United States. At the end of the 1980s, each nation still had thousands of these weapons deployed with their troops in the field, aboard naval vessels, and on aircraft.", "In 1991, the United States and Soviet Union both withdrew from deployment most and eliminated from their arsenals many of their nonstrategic nuclear weapons. The United States now has approximately 500 nonstrategic nuclear weapons, with around 200 deployed with aircraft in Europe and the remaining stored in the United States. Estimates vary, but experts believe Russia still has between 1,000 and 6,000 warheads for nonstrategic nuclear weapons in its arsenal. The Bush Administration quietly redeployed some U.S. weapons deployed in Europe, while the Obama Administration retired older sea-launched cruise missiles. Russia, however seems to have increased its reliance on nuclear weapons in its national security concept.", "Analysts have identified a number of issues with the continued deployment of U.S. and Russian nonstrategic nuclear weapons. These include questions about the safety and security of Russia's weapons and the possibility that some might be lost, stolen, or sold to another nation or group; questions about the role of these weapons in U.S. and Russian security policy; questions about the role that these weapons play in NATO policy and whether there is a continuing need for the United States to deploy them at bases overseas; questions about the implications of the disparity in numbers between U.S. and Russian nonstrategic nuclear weapons; and questions about the relationship between nonstrategic nuclear weapons and U.S. nonproliferation policy.", "Some argue that these weapons do not create any problems and the United States should not alter its policy. Others argue that the United States should expand its deployments of these weapons in response to challenges from Russia, China, and North Korea. Some believe the United States should reduce its reliance on these weapons and encourage Russia to do the same. Many have suggested that the United States and Russia expand efforts to cooperate on ensuring the safe and secure storage and elimination of these weapons; others have suggested that they negotiate an arms control treaty that would limit these weapons and allow for increased transparency in monitoring their deployment and elimination. The 115th Congress may review some of these proposals."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Trump Administration's Nuclear Posture Review, released on February 2, 2018, includes plans for the United States to deploy two new types of nuclear weapons \"to enhance the flexibility and responsiveness of U.S. nuclear forces.\" The report highlights that these weapons represent a response to Russia's deployment of a much larger stockpile of lower-yield nonstrategic nuclear weapons and to Russia's apparent belief \"that limited nuclear first use, potentially including low yield weapons\" can provide \"a coercive advantage in crises and at lower levels of conflict.\"", "The two capabilities identified in the NPR are a new low-yield nuclear warhead to be deployed on U.S. long-range submarine-launched ballistic missiles and a new sea-launched cruise missile that could be deployed on Navy ships or attack submarines. The report states that the United States does not need to deploy \"non-strategic nuclear capabilities that quantitatively match or mimic Russia's more expansive arsenal.\" But it indicates that \"expanding flexible U.S. nuclear options now, to include low yield options, is important for the preservation of credible deterrence against regional aggression.\"", "The NPR's recommended deployment of U.S. nonstrategic nuclear weapons follows growing concerns, both in Congress and among analysts outside of government, about new nuclear challenges facing the United States. For example, In late January 2015, Representatives Mike Rogers and Mike Turner, both members of the House Armed Services Committee, sent a letter to then-Secretary of State John Kerry and then-Secretary of Defense Chuck Hagel, seeking information about the agreements that would be needed and costs that might be incurred if the United States sought to deploy dual-capable aircraft and nuclear bombs at bases on the territories of NATO members in Eastern Europe. Neither NATO, as an organization, nor any of the nations who are members of NATO had called on the United States to pursue such deployments. However, Representatives Rogers and Turner noted that Russian actions in 2014\u2014including aggression against Ukraine, noncompliance with the 1987 INF Treaty, and threats to deploy nuclear weapons in Crimea\u2014threatened European security and warranted a more potent U.S. response. Some analysts outside government have also called for the deployment of greater numbers and/or types of nuclear weapons in Europe in response to Russia's continuing aggression in Ukraine and its apparent increased reliance on nuclear weapons. Others, however, have argued that more nuclear weapons would do little to enhance NATO's security and that NATO would be better served by enhancing its conventional capabilities.", "This interest in possible new deployments of U.S. nonstrategic, or shorter-range, nuclear weapons differs sharply from previous years, when Members of Congress, while concerned about Russia's larger stockpile of such weapons, seemed more interested in limiting these weapons through arms control than expanding U.S. deployments. During the Senate debate on the 2010 U.S.-Russian Strategic Arms Reduction Treaty (New START), many Members noted that this treaty did not impose any limits on nonstrategic nuclear weapons and that Russia possessed a far greater number of these systems than did the United States. Some expressed particular concerns about the threat that Russian nonstrategic nuclear weapons might pose to U.S. allies in Europe; others argued that these weapons might be vulnerable to theft or sale to nations or groups seeking their own nuclear weapons. In response to these concerns, the Senate, in its Resolution of Ratification on New START, stated that the United States should seek to initiate within one year, \"negotiations with the Russian Federation on an agreement to address the disparity between the non-strategic (tactical) nuclear weapons stockpiles of the Russian Federation and of the United States and to secure and reduce tactical nuclear weapons in a verifiable manner.\" In addition, in the FY2013 Defense Authorization Act ( H.R. 4310 , \u00a71037), Congress again indicated that \"the United States should pursue negotiations with the Russian Federation aimed at the reduction of Russian deployed and nondeployed nonstrategic nuclear forces.\"", "Although the United States did raise the issue of negotiations on nonstrategic nuclear weapons with Russia within the year after New START entered into force, the two nations have not moved forward with efforts to negotiate limits on these weapons. Russia has expressed little interest in such a negotiation, and has stated that it will not even begin the process until the United States removes its nonstrategic nuclear weapons from bases in Europe. According to U.S. officials, the United States and NATO have been trying to identify and evaluate possible transparency measures and limits that might apply to these weapons. ", "This report provides basic information about U.S. and Russian nonstrategic nuclear weapons. It begins with a brief discussion of how these weapons have appeared in public debates in the past few decades, then summarizes the differences between strategic and nonstrategic nuclear weapons. It then provides some historical background, describing the numbers and types of nonstrategic nuclear weapons deployed by both nations during the Cold War and in the past decade; the policies that guided the deployment and prospective use of these weapons; measures that the two sides have taken to reduce and contain their forces, and the 2018 NPR's recommendation for the deployment of new U.S. nonstrategic nuclear weapons. The report reviews the issues that have been raised with regard to U.S. and Russian nonstrategic nuclear weapons, and summarizes a number of policy options that might be explored by Congress, the United States, Russia, and other nations to address these issues."], "subsections": []}, {"section_title": "Background", "paragraphs": ["During the Cold War, nuclear weapons were central to the U.S. strategy of deterring Soviet aggression against the United States and U.S. allies. Toward this end, the United States deployed a wide variety of systems that could carry nuclear warheads. These included nuclear mines; artillery; short-, medium-, and long-range ballistic missiles; cruise missiles; and gravity bombs. The United States deployed these weapons with its troops in the field, aboard aircraft, on surface ships, on submarines, and in fixed, land-based launchers. The United States articulated a complex strategy, and developed detailed operational plans, that would guide the use of these weapons in the event of a conflict with the Soviet Union and its allies.", "During the Cold War, most public discussions about U.S. and Soviet nuclear weapons\u2014including discussions about perceived imbalances between the two nations' forces and discussions about the possible use of arms control measures to reduce the risk of nuclear war and limit or reduce the numbers of nuclear weapons\u2014focused on long-range, or strategic, nuclear weapons. These include long-range land-based intercontinental ballistic missiles (ICBMs), submarine-launched ballistic missiles (SLBMs), and heavy bombers that carry cruise missiles or gravity bombs. These were the weapons that the United States and Soviet Union deployed so that they could threaten destruction of central military, industrial, and leadership facilities in the other country\u2014the weapons of global nuclear war. But both nations also deployed thousands of nuclear weapons outside their own territories with their troops in the field. These weapons usually had less explosive power and were deployed with launchers that would deliver them across shorter ranges than strategic nuclear weapons. They were intended for use by troops on the battlefield or within the theater of battle to achieve more limited, or tactical, objectives.", "These \"nonstrategic\" nuclear weapons did not completely escape public discussion or arms control debates. Their profile rose in the early 1980s when U.S. plans to deploy new cruise missiles and intermediate-range ballistic missiles in Europe, as a part of NATO's nuclear strategy, ignited large public protests in many NATO nations. Their high profile returned later in the decade when the United States and Soviet Union signed the 1987 Intermediate Range Nuclear Forces (INF) Treaty and eliminated medium- and intermediate-range ballistic and cruise missiles. Then, in 1991, President George Bush and Soviet President Mikhail Gorbachev each announced that they would withdraw from deployment most of their nonstrategic nuclear weapons and eliminate many of them.", "These 1991 announcements, coming after the abortive coup in Moscow in August 1991, but months before the December 1991 collapse of the Soviet Union, responded to growing concerns about the safety and security of Soviet nuclear weapons at a time of growing political and economic upheaval in that nation. They also allowed the United States to alter its forces in response to easing tensions and the changing international security environment. Consequently, for many in the general public, these initiatives appeared to resolve the problems associated with nonstrategic nuclear weapons. As a result, although the United States and Russia included these weapons in some of their arms control discussions, most of their arms control efforts during the rest of that decade focused on strategic weapons, with efforts made to implement the 1991 Strategic Arms Reduction Treaty (START) and negotiate deeper reductions in strategic nuclear weapons.", "The lack of public attention did not, however, reflect a total absence of questions or concerns about nonstrategic nuclear weapons. In 1997, President Clinton and Russia's President Boris Yeltsin signed a framework agreement that stated they would address measures related to nonstrategic nuclear weapons in a potential START III Treaty. Further, during the 1990s, outside analysts, officials in the U.S. government, and many Members of Congress raised continuing questions about the safety and security of Russia's remaining nonstrategic nuclear weapons. Congress sought a more detailed accounting of Russia's weapons in legislation passed in the late 1990s. Analysts also questioned the role that these weapons might play in Russia's evolving national security strategy, the rationale for their continued deployment in the U.S. nuclear arsenal, and their relationship to U.S. nuclear nonproliferation policy. The terrorist attacks of September 11, 2001, also reminded people of the catastrophic consequences that might ensue if terrorists were to acquire and use nuclear weapons, with continuing attention focused on the potentially insecure stock of Russian nonstrategic nuclear weapons.", "The George W. Bush Administration did not adopt an explicit policy of reducing or eliminating nonstrategic nuclear weapons. When it announced the results of its Nuclear Posture Review (NPR) in early 2002, it did not outline any changes to the U.S. deployment of nonstrategic nuclear weapons at bases in Europe; it stated that NATO would address the future of those weapons. Although there was little public discussion of this issue during the Bush Administration, reports indicate that the United States did redeploy and withdraw some of its nonstrategic nuclear weapons from bases in Europe. It made these changes quietly and unilaterally, in response to U.S. and NATO security requirements, without requesting or requiring reciprocity from Russia.", "The Bush Administration also did not discuss these weapons with Russia during arms control negotiations in 2002. Instead, the Strategic Offensive Reductions Treaty (Moscow Treaty), signed in June 2002, limited only the number of operationally deployed warheads on strategic nuclear weapons. When asked about the absence of these weapons in the Moscow Treaty, then-Secretary of State Colin Powell noted that the treaty was not intended to address these weapons, although the parties could address questions about the safety and security of these weapons during less formal discussions. These discussions, however, never occurred. ", "Nevertheless, Congress remained concerned about the potential risks associated with Russia's continuing deployment of nonstrategic nuclear weapons. The FY2006 Defense Authorization Act ( P.L. 109-163 ) contained two provisions that called for further study on these weapons. Section 1212 mandated that the Secretary of Defense submit a report that would determine whether increased transparency and further reductions in U.S. and Russian nonstrategic nuclear weapons were in the U.S. national security interest; Section 3115 called on the Secretary of Energy to submit a report on what steps the United States might take to bring about progress in improving the accounting for and security of Russia's nonstrategic nuclear weapons. In the 109 th Congress, H.R. 5017 , a bill to ensure implementation of the 9/11 Commission Report recommendations, included a provision (\u00a7334) that called on the Secretary of Defense to submit a report that detailed U.S. efforts to encourage Russia to provide a detailed accounting of its force of nonstrategic nuclear weapons. It also would have authorized $5 million for the United States to assist Russia in completing an inventory of these weapons. The 109 th Congress did not address this bill or its components in any detail. In the 110 th Congress, H.R. 1 sought to ensure the implementation of the 9/11 Commission Report recommendations. However, in its final form ( P.L. 110-53 ), it did not include any references to Russia's nonstrategic nuclear weapons.", "Several events in the past decade have served to elevate the profile of nonstrategic nuclear weapons in debates about the future of U.S. nuclear weapons and arms control policy. For example, in January 2007, four senior statesmen published an article in the Wall Street Journal that highlighted the continuing threat posed by the existence, and proliferation, of nuclear weapons. They called on leaders in nations with nuclear weapons to adopt the goal of seeking a world free of nuclear weapons. After acknowledging that that this was a long-term enterprise, they identified a number of urgent, near-term steps that these nations might take. They included among these steps a call for nations to eliminate \"short-range nuclear weapons designed to be forward-deployed.\" In a subsequent article published in January 2008, they elaborated on this step, calling for \"a dialogue, including within NATO and with Russia, on consolidating the nuclear weapons designed for forward deployment to enhance their security, as a first step toward careful accounting for them and their eventual elimination.\" They noted, specifically, that \"these smaller and more portable nuclear weapons are, given their characteristics, inviting acquisition targets for terrorist groups.\"", "In addition, as a part of its renewed interest in the role of nuclear weapons in U.S. national security strategy, Congress established, in the FY2008 Defense Authorization Bill ( P.L. 110-181 \u00a71062), a Congressional Commission on the Strategic Posture of the United States. The Congressional Commission, which issued its report in April 2009, briefly addressed the role of nonstrategic nuclear weapons in U.S. national security strategy and noted that these weapons can help the United States assure its allies of the U.S. commitment to their security. It also noted concerns about the imbalance in the numbers of U.S. and Russian nonstrategic nuclear weapons and mentioned that Russia had increased its reliance on these weapons to compensate for weaknesses in its conventional forces. ", "The 110 th Congress also mandated ( P.L. 110-181 , \u00a71070) that the next Administration conduct a new Nuclear Posture Review (NPR). The Obama Administration completed this NPR in early April 2010. This study identified a number of steps the United States would take to reduce the roles and numbers of nuclear weapons in the U.S. arsenal. A few of these steps, including the planned retirement of nuclear-armed, sea-launched cruise missiles, affected U.S. nonstrategic nuclear weapons. At the same time, though, the NPR recognized the role that U.S. nonstrategic nuclear weapons play in assuring U.S. allies of the U.S. commitment to their security. It indicated that the United States would \"retain the capability to forward-deploy U.S. nuclear weapons on tactical fighter-bombers\" and that the United States would seek to \"expand consultations with allies and partners to address how to ensure the credibility and effectiveness of the U.S. extended deterrent. No changes in U.S. extended deterrence capabilities will be made without close consultations with our allies and partners.\"", "Discussions about the presence of U.S. nonstrategic nuclear weapons at bases in Europe and their role in NATO's strategy also increased in 2009 and 2010 during the drafting of NATO's most recent strategic concept. Officials in some NATO nations called for the removal of U.S. nonstrategic weapons from bases on the continent, noting that they had no military significance for NATO's security. Others called for the retention of these weapons, arguing that they played a political role in NATO, with shared rights and responsibilities, and that they helped balance Russia's deployment of greater numbers of nonstrategic nuclear weapons. When it was published, the Strategic Concept did not call for the removal of U.S. nonstrategic nuclear weapons. It stated that \"deterrence, based on an appropriate mix of nuclear and conventional capabilities, remains a core element of our overall strategy.\" It also indicated that \"the circumstances in which any use of nuclear weapons might have to be contemplated are extremely remote,\" but indicated that \"as long as nuclear weapons exist, NATO will remain a nuclear alliance.\" It then concluded that NATO would \"maintain an appropriate mix of nuclear and conventional forces.\" NATO nations continue to share responsibility for basing and delivery of the weapons and would weigh in on decisions about their possible use.", "At the same time, NATO recognized that the new Strategic Concept would not be the last word on the role or presence of nonstrategic nuclear weapons in NATO. In the declaration released at the conclusion of the November 2010 Lisbon Summit, the allies agreed that they would continue to review NATO's overall posture in deterring and defending against the full range of threats to the Alliance. They commissioned a comprehensive Deterrence and Defense Posture Review (DDPR) that would examine the range of capabilities required for defense and deterrence, including nuclear weapons, missile defense, and other means of strategic deterrence and defense. The DDPR was presented at the May 2012 NATO summit in Chicago. It did not, however, recommend any changes in NATO's nuclear posture. Instead, it noted that \"nuclear weapons are a core component of NATO's overall capabilities for deterrence and defence,\" and that \"the Alliance's nuclear force posture currently meets the criteria for an effective deterrence and defence posture.\" NATO reaffirmed this conclusion after its summit in Wales in September 2014, noting that \"deterrence, based on an appropriate mix of nuclear, conventional, and missile defence capabilities, remains a core element of our overall strategy.\" ", "NATO addressed this issue again during its summit in Warsaw in July 2016, and did not alter this conclusion about the value of nuclear weapons to the alliance. Moreover, although the alliance did not call for the deployment of additional nuclear weapons in Europe, the communique released at the end of the summit highlighted the continuing importance of U.S. nuclear weapons deployed in Europe and the nuclear sharing arrangements among the allies. Specifically, the allies reiterated that \"as long as nuclear weapons exist, NATO will remain a nuclear alliance\" and that \"the strategic forces of the Alliance, particularly those of the United States, are the supreme guarantee of the security of the Allies.\" At the same time, they noted that \"NATO's nuclear deterrence posture also relies, in part, on United States' nuclear weapons forward-deployed in Europe and on capabilities and infrastructure provided by Allies concerned.\" At the same time, NATO has begun to implement numerous initiatives in response to Russia's aggression in Ukraine and aggressive posture toward Europe. While some of these initiatives may strengthen NATO's planning and exercise capabilities, they are unlikely to result in changes in the numbers of deployed nuclear weapons. ", "The 2018 Nuclear Posture Review picks up on many of the same themes highlighted in documents published in the past decade. Like the Strategic Posture Commission Report published in 2009, the NPR highlights the imbalance in the numbers of U.S. and Russian nonstrategic nuclear weapons and states that Russia has increased its reliance on these weapons in its national security strategy. It argues that Russia believes it could use these weapons to coerce the United States and its NATO allies to back down during a conventional conflict in Europe. The 2018 NPR also echoes the Obama Administration's NPR, indicating that the United States will maintain \"the capability to forward deploy nuclear bombers and DCA around the world.\" It also states that the United States will continue Obama-era programs to communicate with and consult allies \"on policy, strategy and capabilities.\" The 2018 NPR also supports of the recent changes in NATO's approach to nuclear modernization and planning, indicating that the United States is \"committed to upgrading DCA [dual capable aircraft] with the nuclear-capable F-35 aircraft\" and that the United States will \"work with NATO to best ensure\u2014and improve where needed\u2014the readiness, survivability, and operational effectiveness of DCA based in Europe.\"", "However, while the 2010 NPR called for the retirement of U.S. Tomahawk nuclear-armed sea-launched cruise missiles (TLAMN), the 2018 NPR calls for the development of a new sea-launched cruise missile (SLCM). The 2010 NPR argued that \"this system serves a redundant purpose in the U.S. nuclear stockpile\" and, although the United States \"remains committed to providing a credible extended deterrence posture and capabilities,\" the \"deterrence and assurance roles of TLAMN can be adequately substituted by these other means.\" The 2018 NPR disputes this conclusion. It states that \"the rapid development of a modern SLCM\" will address \"the increasing need for flexible and low-yield options to strengthen deterrence and assurance\" and \"will strengthen the effectiveness of the sea-based nuclear deterrence force.\""], "subsections": []}, {"section_title": "The Distinction Between Strategic and Nonstrategic Nuclear Weapons", "paragraphs": ["The distinction between strategic and nonstrategic (also known as tactical) nuclear weapons reflects the military definitions of, on the one hand, a strategic mission and, on the other hand, the tactical use of nuclear weapons. According to the Department of Defense Dictionary of Military Terms, a strategic mission is", "Directed against one or more of a selected series of enemy targets with the purpose of progressive destruction and disintegration of the enemy's warmaking capacity and will to make war. Targets include key manufacturing systems, sources of raw material, critical material, stockpiles, power systems, transportation systems, communication facilities, and other such target systems. As opposed to tactical operations, strategic operations are designed to have a long-range rather than immediate effect on the enemy and its military forces.", "In contrast, the tactical use of nuclear weapons is defined as \"the use of nuclear weapons by land, sea, or air forces against opposing forces, supporting installations or facilities, in support of operations that contribute to the accomplishment of a military mission of limited scope, or in support of the military commander's scheme of maneuver, usually limited to the area of military operations.\""], "subsections": [{"section_title": "Definition by Observable Capabilities", "paragraphs": ["During the Cold War, it was relatively easy to distinguish between strategic and nonstrategic nuclear weapons because each type had different capabilities that were better suited to the different missions."], "subsections": [{"section_title": "Definition by Range of Delivery Vehicles", "paragraphs": ["The long-range missiles and heavy bombers deployed on U.S. territory and missiles deployed in ballistic missile submarines had the range and destructive power to attack and destroy military, industrial, and leadership targets central to the Soviet Union's ability to prosecute the war. At the same time, with their large warheads and relatively limited accuracies (at least during the earlier years of the Cold War), these weapons were not suited for attacks associated with tactical or battlefield operations. Nonstrategic nuclear weapons, in contrast, were not suited for strategic missions because they lacked the range to reach targets inside the Soviet Union (or, for Soviet weapons, targets inside the United States). But, because they were often small enough to be deployed with troops in the field or at forward bases, the United States and Soviet Union could have used them to attack targets in the theater of the conflict, or on the battlefield itself, to support more limited military missions.", "Even during the Cold War, however, the United States and Russia deployed nuclear weapons that defied the standard understanding of the difference between strategic and nonstrategic nuclear weapons. For example, both nations considered weapons based on their own territories that could deliver warheads to the territory of the other nation to be \"strategic\" because they had the range needed to reach targets inside the other nation's territory. But some early Soviet submarine-launched ballistic missiles had relatively short (i.e., 500 mile) ranges, and the submarines patrolled close to U.S. shores to ensure that the weapons could reach their strategic targets. Conversely, in the 1980s the United States considered sea-launched cruise missiles (SLCMs) deployed on submarines or surface ships to be nonstrategic nuclear weapons. But, if these vessels were deployed close to Soviet borders, these weapons could have destroyed many of the same targets as U.S. strategic nuclear weapons. Similarly, U.S. intermediate-range missiles that were deployed in Europe, which were considered nonstrategic by the United States, could reach central, strategic targets in the Soviet Union.", "Furthermore, some weapons that had the range to reach \"strategic\" targets on the territory of the other nations could also deliver tactical nuclear weapons in support of battlefield or tactical operations. Soviet bombers could be equipped with nuclear-armed anti-ship missiles; U.S. bombers could also carry anti-ship weapons and nuclear mines. Hence, the range of the delivery vehicle does not always correlate with the types of targets or objectives associated with the warhead carried on that system. This relationship between range and mission has become even more clouded since the end of the Cold War because the United States and Russia have retired many of the shorter- and medium-range delivery systems considered to be nonstrategic nuclear weapons. Further, both nations could use their longer-range \"strategic\" systems to deliver warheads to a full range of strategic and tactical targets, even if long-standing traditions and arms control definitions weigh against this change."], "subsections": []}, {"section_title": "Definition by Yield of Warheads", "paragraphs": ["During the Cold War, the longer-range strategic delivery vehicles also tended to carry warheads with greater yields, or destructive power, than nonstrategic nuclear weapons. Smaller warheads were better suited to nonstrategic weapons because they sought to achieve more limited, discrete objectives on the battlefield than did the larger, strategic nuclear weapons. But this distinction has also dissolved in more modern systems. Many U.S. and Russian heavy bombers can carry weapons of lower yields, and, as accuracies improved for bombs and missiles, warheads with lower yields could achieve the same expected level of destruction that had required larger warheads in early generations of strategic weapons systems."], "subsections": []}]}, {"section_title": "Definition by Exclusion", "paragraphs": ["The observable capabilities that allowed analysts to distinguish between strategic and nonstrategic nuclear weapons during the Cold War have not always been precise, and may not prove to be relevant or appropriate in the future. On the other hand, the \"strategic\" weapons identified by these capabilities\u2014ICBMs, SLBMs, and heavy bombers\u2014are the only systems covered by the limits in strategic offensive arms control agreements\u2014the SALT agreements signed in the 1970s, the START agreements signed in the 1990s, the Moscow Treaty signed in 2002, and the New START Treaty signed in 2010. Consequently, an \"easy\" dividing line is one that would consider all weapons not covered by strategic arms control treaties as nonstrategic nuclear weapons. This report takes this approach when reviewing the history of U.S. and Soviet/Russian nonstrategic nuclear weapons, and in some cases when discussing remaining stocks of nonstrategic nuclear weapons."], "subsections": []}, {"section_title": "Hybrid Definitions", "paragraphs": ["The definition by exclusion, although the most common form used in recent discussions, may not prove sufficient when discussing current and future issues associated with these weapons. Since the early 1990s, the United States and Russia have withdrawn from deployment most of their nonstrategic nuclear weapons and eliminated many of the shorter- and medium-range launchers for these weapons (these changes are discussed in more detail below). Nevertheless, both nations maintain roles for these weapons in their national security strategies. Russia has enunciated a national security strategy that allows for the possible use of nuclear weapons in regional contingencies and conflicts near the periphery of Russia. The United States also maintains these capabilities in its nuclear arsenal and does not rule out the possibility that it might need them to deter or defeat potential adversaries. ", "Moreover, the 2018 Nuclear Posture Review, with its plans for the deployment of two new types of nonstrategic weapons, further complicates efforts to identify a single definition. The sea-launched cruise missile clearly meets several definitions of nonstrategic nuclear weapons\u2014it would not have the long range of a strategic system, it would likely have a relatively low-yield warhead, and it would not count under existing treaties limiting strategic offensive weapons. But a new low-yield warhead for submarine-launched ballistic missiles is more complicated. For the NPR, yield seems to be the distinguishing characteristic. But the delivery system\u2014a submarine-launched ballistic missile\u2014is clearly a strategic system, as it has the long range of a strategic delivery vehicle and it is counted within the limits of the New START Treaty. Moreover, missiles with low-yield warheads could be deployed on the same submarines as missiles with higher yield, or strategic, warheads, complicating efforts to distinguish between strategic and nonstrategic SLBMs. ", "Then-Secretary of Defense James Mattis further complicated the discussion during his testimony before the House Armed Services Committee on February 6, 2018, when he stated that he does not believe \"there is any such thing as a tactical nuclear weapon. Any nuclear weapon used any time is a strategic game changer.\" He also resisted using the phrase \"nonstrategic\" to describe U.S. capabilities, and instead referred to the U.S. ability to deliver a \"low-yield\" response. While his resistance to the phrases \"tactical\" and \"nonstrategic\" seemed to contradict the NPR's widespread use of the phrase \"non-strategic nuclear weapons,\" his response likely reflects a different definition of the dividing line between strategic and nonstrategic nuclear weapons. His comments reflect the view that any use of nuclear weapons would have \"strategic effect,\" possibly meaning that it would expand and escalate the conflict beyond the immediate battlefield. The distinction, therefore, between a strategic and a nonstrategic nuclear weapon could well reflect the nature of the target or the implications for the conflict, not the yield or delivery vehicle of the attacking warhead."], "subsections": []}]}, {"section_title": "U.S. and Soviet Nonstrategic Nuclear Weapons", "paragraphs": [], "subsections": [{"section_title": "U.S. Nonstrategic Nuclear Weapons During the Cold War", "paragraphs": ["Throughout the Cold War, the United States deployed thousands of shorter-range nuclear weapons with U.S. forces based in Europe and Asia and on ships around the world. The United States maintained these deployments to extend deterrence and to defend its allies. Not only did the presence of these weapons (and the presence of U.S. forces, in general) increase the likelihood that the United States would come to the defense of its allies if they were attacked, the weapons also could have been used on the battlefield to slow or stop the advance of the adversaries' conventional forces."], "subsections": [{"section_title": "Strategy and Doctrine", "paragraphs": ["In most cases, these weapons were deployed to defend U.S. allies against aggression by the Soviet Union and its Warsaw Pact allies, but the United States did not rule out their possible use in contingencies with other adversaries. In Europe, these weapons were a part of NATO's strategy of \"flexible response.\" Under this strategy, NATO did not insist that it would respond to any type of attack with nuclear weapons, but it maintained the capability to do so and to control escalation if nuclear weapons were used. This approach was intended to convince the Soviet Union and Warsaw Pact that any conflict, even one that began with conventional weapons, could result in nuclear retaliation. As the Cold War drew to a close, NATO acknowledged that it would no longer maintain nuclear weapons to deter or defeat a conventional attack from the Soviet Union and Warsaw Pact because \"the threat of a simultaneous, full-scale attack on all of NATO's European fronts has effectively been removed.\" But NATO documents indicated that these weapons would still play an important political role in NATO's strategy by ensuring \"uncertainty in the mind of any potential aggressor about the nature of the Allies' response to military aggression.\""], "subsections": []}, {"section_title": "Force Structure", "paragraphs": ["Throughout the Cold War, the United States often altered the size and structure of its nonstrategic nuclear forces in response to changing capabilities and changing threat assessments. These weapons were deployed at U.S. bases in Asia, and at bases on the territories of several of the NATO allies, contributing to NATO's sense of shared responsibility for the weapons. The United States began to reduce these forces in the late 1970s, with the numbers of operational nonstrategic nuclear warheads declining from more than 7,000 in the mid-1970s to below 6,000 in the 1980s, to fewer than 1,000 by the middle of the 1990s. These reductions occurred, for the most part, because U.S. and NATO officials believed they could maintain deterrence with fewer, but more modern, weapons. For example, when the NATO allies agreed in 1970 that the United States should deploy new intermediate-range nuclear weapons in Europe, they decided to remove 1,000 older nuclear weapons from Europe. And in 1983, in the Montebello Decision, when the NATO defense ministers approved additional weapons modernization plans, they also called for a further reduction of 1,400 nonstrategic nuclear weapons.", "These modernization programs continued through the 1980s. In his 1988 Annual Report to Congress, Secretary of Defense Caspar Weinberger noted that the United States was completing the deployment of Pershing II intermediate-range ballistic missiles and ground-launched cruise missiles in Europe; modernizing two types of nuclear artillery shells; upgrading the Lance short-range ballistic missile; continuing production of the nuclear-armed version of the Tomahawk sea-launched cruise missile; and developing a new nuclear depth/strike bomb for U.S. naval forces. However, by the end of that decade, as the Warsaw Pact dissolved, the United States had canceled or scaled back all planned modernization programs. In 1987, it also signed the Intermediate-Range Nuclear Forces (INF) Treaty, which eliminated all U.S. and Soviet ground-launched shorter and intermediate-range ballistic and cruise missiles."], "subsections": []}]}, {"section_title": "Soviet Nonstrategic Nuclear Weapons During the Cold War", "paragraphs": [], "subsections": [{"section_title": "Strategy and Doctrine", "paragraphs": ["During the Cold War, the Soviet Union also considered nuclear weapons to be instrumental to its military strategy. Although the Soviet Union had pledged that it would not be the first to use nuclear weapons, most Western observers doubted that it would actually observe this pledge in a conflict. Instead, analysts argue that the Soviet Union had integrated nuclear weapons into its warfighting plans to a much greater degree than the United States. Soviet analysts stressed that these weapons would be useful for both surprise attack and preemptive attack. According to one Russian analyst, the Soviet Union would have used nonstrategic nuclear weapons to conduct strategic operations in the theater of war and to reinforce conventional units in large scale land and sea operations. This would have helped the Soviet Union achieve success in these theaters of war and would have diverted forces of the enemy from Soviet territory.", "The Soviet Union reportedly began to reduce its emphasis on nuclear warfighting strategies in the mid-1980s, under Soviet President Mikhail Gorbachev. He reportedly believed that the use of nuclear weapons would be catastrophic. Nevertheless, they remained a key tool of deterring and fighting a large-scale conflict with the United States and NATO."], "subsections": []}, {"section_title": "Force Structure", "paragraphs": ["The Soviet Union produced and deployed a wide range of delivery vehicles for nonstrategic nuclear weapons. At different times during the period, it deployed devices that were small enough to fit into a suitcase-sized container, nuclear mines, shells for artillery, short-, medium-, and intermediate-range ballistic missiles, short-range air-delivered missiles, and gravity bombs. The Soviet Union deployed these weapons at nearly 600 bases, with some located in Warsaw Pact nations in Eastern Europe, some in the non-Russian republics on the western and southern perimeter of the nation, and throughout Russia. Estimates vary, but many analysts believe that, in 1991, the Soviet Union had more than 20,000 of these weapons. The numbers may have been higher, in the range of 25,000 weapons in earlier years, before the collapse of the Warsaw Pact."], "subsections": []}]}, {"section_title": "The 1991 Presidential Nuclear Initiatives", "paragraphs": ["In September and October 1991, U.S. President George H. W. Bush and Soviet President Mikhail Gorbachev sharply altered their nations' deployments of nonstrategic nuclear weapons. Each announced unilateral, but reciprocal initiatives that marked the end of many elements of their Cold War nuclear arsenals."], "subsections": [{"section_title": "U.S. Initiative", "paragraphs": ["On September 27, 1991, U.S. President George H. W. Bush announced that the United States would withdraw all land-based tactical nuclear weapons (those that could travel less than 300 miles) from overseas bases and all sea-based tactical nuclear weapons from U.S. surface ships, submarines, and naval aircraft. Under these measures the United States began dismantling approximately 2,150 warheads from the land-based delivery systems, including 850 warheads for Lance missiles and 1,300 artillery shells. It also withdrew about 500 weapons normally deployed aboard surface ships and submarines, and planned to eliminate around 900 B-57 depth bombs, which had been deployed on land and at sea, and the weapons for land-based naval aircraft. Furthermore, in late 1991, NATO decided to reduce by about half the number of weapons for nuclear-capable aircraft based in Europe, which led to the withdrawal of an additional 700 U.S. air-delivered nuclear weapons.", "The United States implemented these measures very quickly. Nonstrategic nuclear weapons were removed from bases around the world by mid-1992. The Navy had withdrawn nuclear weapons from its surface ships, submarines, and forward bases by mid-1992. The warhead dismantlement process has moved more slowly, taking most of the 1990s to complete for some weapons, but this was due to the limits on capacity at the Pantex Plant in Texas, where dismantlement occurs.", "The first Bush Administration decided to withdraw these weapons for several reasons. First, the threat the weapons were to deter\u2014Soviet and Warsaw Pact attacks in Europe\u2014had diminished with the collapse of the Warsaw Pact in 1989. Further, the military utility of the land-based weapons had declined as the Soviet Union pulled its forces eastward, beyond the range of these weapons. The utility of the sea-based weapons had also declined as a result of changes in U.S. warfighting concepts that accompanied the end of the Cold War. Moreover, the withdrawal of the sea-based weapons helped ease a source of tensions between the United States and some allies, such as New Zealand and Japan, who had been uncomfortable with the possible presence of nuclear weapons during port visits by U.S. naval forces.", "The President's announcement also responded to growing concerns among analysts about the safety and security of Soviet nonstrategic nuclear weapons. The Soviet Union had deployed thousands of these weapons at bases in remote areas of its territory and at bases outside Soviet territory in Eastern Europe. The demise of the Warsaw Pact and political upheaval in Eastern Europe generated concerns about the safety of these weapons. The abortive coup in Moscow in August 1991 had also caused alarms about the strength of central control over nuclear weapons inside the Soviet Union. The U.S. initiative was not contingent on a Soviet response, and the Bush Administration did not consult with Soviet leadership prior to its public announcement, but many hoped that the U.S. initiative would provide President Gorbachev with the incentive to take similar steps to withdraw and eliminate many of his nation's nonstrategic nuclear weapons."], "subsections": []}, {"section_title": "Soviet and Russian Initiatives", "paragraphs": ["On October 5, 1991, Russia's President Gorbachev replied that he, too, would withdraw and eliminate nonstrategic nuclear weapons. He stated that the Soviet Union would destroy all nuclear artillery ammunition and warheads for tactical missiles; remove warheads for nuclear antiaircraft missiles and destroy some of them; destroy all nuclear land mines; and remove all naval nonstrategic weapons from submarines and surface ships and ground-based naval aviation, destroying some of them. Estimates of the numbers of nonstrategic nuclear weapons deployed by the Soviet Union varied, with a range as great as 15,000-21,700 nonstrategic nuclear weapons in the Soviet arsenal in 1991. Consequently, analysts expected these measures to affect several thousand weapons.", "Russia's President Boris Yeltsin pledged to continue implementing these measures after the Soviet Union collapsed at the end of 1991. He also stated that Russia would destroy many of the warheads removed from nonstrategic nuclear weapons. These included all warheads from short-range missiles, artillery, and atomic demolition devices; one-third of the warheads from sea-based nonstrategic weapons; half of the warheads from air-defense interceptors; and half of the warheads from the Air Force's nonstrategic nuclear weapons.", "Reports indicate that the Soviet Union had begun removing nonstrategic nuclear weapons from bases outside Soviet territory after the collapse of the Warsaw Pact, and they had probably all been removed from Eastern Europe and the Transcaucasus prior to the 1991 announcements. Nevertheless, President Gorbachev's pledge to withdraw and eliminate many of these weapons spurred their removal from other former Soviet states after the collapse of the Soviet Union. Reports indicate that they had all been removed from the Baltic States and Central Asian republics by the end of 1991, and from Ukraine and Belarus by mid-late spring 1992.", "The status of nonstrategic nuclear weapons deployed on Russian territory is far less certain. According to some estimates, the naval systems were removed from deployment by the end of 1993, but the Army and Air Force systems remained in the field until 1996 and 1997. Furthermore, Russia has been far slower to eliminate the warheads from these systems than has the United States. Some analysts and experts in the United States have expressed concerns about the slow pace of eliminations in Russia. They note that the continuing existence of these warheads, along with the increasing reliance on nuclear weapons in Russia's national security strategy, indicate that Russia may reverse its pledges and reintroduce nonstrategic nuclear weapons into its deployed forces. Others note that financial constraints could have slowed the elimination of these warheads, or that Russia decided to coordinate the elimination effort with the previously scheduled retirement of older weapons."], "subsections": []}]}, {"section_title": "U.S. Nonstrategic Nuclear Weapons after the Cold War", "paragraphs": [], "subsections": [{"section_title": "Strategy and Doctrine", "paragraphs": [], "subsections": [{"section_title": "NATO Policy", "paragraphs": ["In U.S. and NATO policy, nonstrategic nuclear weapons have served not only as a deterrent to a wide range of potential aggressors, but also as an important element in NATO's cohesion as an alliance. NATO reaffirmed the importance of nonstrategic nuclear weapons for deterrence and alliance cohesion several times during the 1990s. In the press communiqu\u00e9 released after their November 1995 meeting, the members of NATO's Defense Planning Committee and Nuclear Planning Group stated that \"Alliance Solidarity, common commitment, and strategic unity are demonstrated through the current basing of deployable sub-strategic [nuclear] forces in Europe.\" In 1997, in the Founding Act on Mutual Relations, Cooperation, and Security Between the Russian Federation and the North Atlantic Treaty Organization , NATO members assured Russia that it had \"no intention, no plan, and no reason to deploy nuclear weapons on the territory of new members.\" But NATO also stated that it had no need \"to change any aspect of NATO's nuclear policy\u2014and do not foresee any future need to do so [emphasis added].\" Finally, the \"New Strategic Concept\" signed in April 1999 stated that \"to protect peace and to prevent war or any kind of coercion, the Alliance will maintain for the foreseeable future an appropriate mix of nuclear and conventional forces. Nuclear weapons make a unique contribution in rendering the risks of aggression against the Alliance incalculable and unacceptable.\"", "NATO completed the next review of its Strategic Concept in November 2010. In this document, the allies indicated that \"deterrence, based on an appropriate mix of nuclear and conventional capabilities, remains a core element of our overall strategy.\" The document went on to indicate that NATO would remain a nuclear alliance as long as nuclear weapons continued to exist. It also noted that the alliance would \"maintain an appropriate mix of nuclear and conventional forces\" to ensure that \"NATO has the full range of capabilities to deter and defend against any threat.\" However, the Strategic Concept did not refer, specifically, to the U.S. nuclear weapons based in Europe, as had the communiqu\u00e9 released in 1995. Instead, the Strategic Concept noted that the \"supreme guarantee of the security of the Allies is provided by the strategic nuclear forces of the Alliance, particularly those of the United States [emphasis added].\" It went on to indicate that \"the independent strategic nuclear forces of the United Kingdom and France, which have a deterrent role of their own, contribute to the overall deterrence and security of the Allies.\"", "Moreover, the 2010 Strategic Concept alluded to the possibility of further reductions in nuclear weapons, both within the alliance and globally, in the future. The document noted that the allies are \"resolved to seek a safer world for all and to create the conditions for a world without nuclear weapons in accordance with the goals of the Nuclear Non-Proliferation Treaty, in a way that promotes international stability, and is based on the principle of undiminished security for all.\" It also noted that the alliance had \"dramatically reduced the number of nuclear weapons stationed in Europe\" and had reduced the role of nuclear weapons in NATO strategy.\" The allies pledged to \"seek to create the conditions for further reductions in the future.\" The Strategic Concept indicated that the goal in these reductions should be to \"seek Russian agreement to increase transparency on its nuclear weapons in Europe and relocate these weapons away from the territory of NATO members.\" Moreover, the document noted that this arms control process \"must take into account the disparity with the greater Russian stockpiles of short-range nuclear weapons.\" Hence, even though NATO no longer viewed Russia as an adversary, the allies apparently agreed that the disparity in nonstrategic nuclear weapons could create security concerns for some members of the alliance.", "In recognition of different views about the role or nuclear weapons in alliance policy, the allies agreed that they would continue to review NATO's deterrence and defense posture in a study that would be completed in time for NATO's May 2012 summit in Chicago. They agreed that the Deterrence and Defense Posture Review (DDPR) would examine the full range of capabilities required, including nuclear weapons, missile defense, and other means of strategic deterrence and defense. However, the completed DDPR did not recommend any changes in NATO's nuclear posture. Instead, it noted that \"nuclear weapons are a core component of NATO's overall capabilities for deterrence and defence,\" and that \"the Alliance's nuclear force posture currently meets the criteria for an effective deterrence and defence posture.\" This force posture includes shared rights and responsibilities, with nuclear weapons stored at bases on the territories of five NATO nations, and all NATO nations (except France, which has chosen not to participate in nuclear decisionmaking or operations) participating in nuclear planning and policymaking. Specifically, NATO calls for \"the broadest possible participation of Allies in collective defence planning on nuclear roles, in peacetime basing of nuclear forces, and in command, control and consultation arrangements.\" ", "The DDPR reiterated the alliance's interest in pursuing arms control measures with Russia to address concerns with these weapons. It noted that the allies \"look forward to continuing to develop and exchange transparency and confidence-building ideas with the Russian Federation in the NATO-Russia Council, with the goal of developing detailed proposals on and increasing mutual understanding of NATO's and Russia's non-strategic nuclear force postures in Europe.\" It also indicated that NATO would \"consider, in the context of the broader security environment, what [it] would expect to see in the way of reciprocal Russian actions to allow for significant reductions in forward-based non-strategic nuclear weapons assigned to NATO.\" In other words, any further changes in NATO's nuclear posture were linked to reciprocal changes in Russia's nonstrategic nuclear weapons posture.", "NATO has continued to review and revise its statements about nuclear weapons during its recent summits in Wales (2014), Warsaw (2016), and Brussels. These summits occurred after Russia's annexation of Crimea and in the shadow of Russia's continuing aggressive behavior in Europe. While most of the efforts announced after these summits sought to bolster NATO's conventional capabilities and demonstrate an enduring commitment to the defense of all NATO allies, some also addressed the role of nuclear weapons and arms control in NATO strategy. For example, Paragraph 51 of the Warsaw Summit Communique confirms that \"the greatest responsibility of the Alliance is to protect and defend our territory and our populations against attack ... \" and that \"no one should doubt NATO's resolve if the security of any of its members were to be threatened.\" ", "As was noted above, the statement also reaffirmed the important role of nuclear deterrence in alliance security. It indicated that \"the strategic forces of the Alliance, particularly those of the United States, are the supreme guarantee of the security of the Allies\" and that \"the independent strategic nuclear forces of the United Kingdom and France have a deterrent role of their own and contribute to the overall security of the Alliance.\" Moreover, the allies reaffirmed that \"NATO's nuclear deterrence posture also relies, in part, on United States' nuclear weapons forward-deployed in Europe and on capabilities and infrastructure provided by Allies concerned.\" In addition, in response to concerns about Russian nuclear doctrine, the statement emphasized that \"any employment of nuclear weapons against NATO would fundamentally alter the nature of a conflict\" and, \"if the fundamental security of any of its members were to be threatened however, NATO has the capabilities and resolve to impose costs on an adversary that would be unacceptable and far outweigh the benefits that an adversary could hope to achieve.\"", "On the other hand, the Warsaw Summit Communique recognized the strains on the arms control relationship with Russia. Where the 2012 DDPR had called for discussions with Russia on transparency and confidence-building and indicated that NATO would consider negotiating reductions in forward-based forces, the 2016 Warsaw statement simply noted that \"arms control, disarmament, and non-proliferation continue to play an important role in the achievement of the Alliance's security objectives.\" It then stated that, \"in this context, it is of paramount importance that disarmament and non-proliferation commitments under existing treaties are honoured ... \" and called on \"Russia to preserve the viability of the INF Treaty through ensuring full and verifiable compliance.\"", "The communique released after the Brussels summit in July 2018 reiterated many of the points raised in previous communiques. In several places, the allies noted that the changing security environment necessitated efforts to bolster the deterrence \"as a core element\" of the alliance's collective defense and noted that credible deterrence \"will continue to be based on an appropriate mix of nuclear, conventional, and missile defence capabilities.\" It also stated that a \"robust deterrence and defence posture strengthens Alliance cohesion and provides an essential political and military transatlantic link, through an equitable and sustainable distribution of roles, responsibilities, and burdens.\" ", "At the same time, the 2018 communique went further in highlighting the allies' concerns with Russia's violation of the INF Treaty. The communique noted that the INF Treaty \"has been crucial to Euro-Atlantic security\" and pointed out that \"full compliance with the INF Treaty is essential.\" It supported the U.S. position on Russian noncompliance, noting that the \"allies have identified a Russian missile system, the 9M729, which raises serious concerns\" and that \"a pattern of behaviour and information over many years has led to widespread doubts about Russian compliance.\""], "subsections": []}, {"section_title": "Extended Deterrence", "paragraphs": ["Recent discussions about the U.S. nuclear weapons policy have placed a renewed emphasis on the role of U.S. nonstrategic nuclear weapons in extended deterrence and assurance. Extended deterrence refers to the U.S. threat to use nuclear weapons in response to attacks, from Russia or other adversaries, against allies in NATO and some allies in Asia. Assurance refers to the U.S. promise, made to those same allies, to come to their defense and assistance if they are threatened or attacked. The weapons deployed in Europe are a visible reminder of that commitment; the sea-based nonstrategic nuclear weapons that were in storage that could have been deployed in the Pacific in a crisis served a similar purpose for U.S. allies in Asia. Recent debates, however, have focused on the question of whether a credible U.S. extended deterrent requires that the United States maintain weapons deployed in Europe, and the ability to deploy them in the Pacific, or whether other U.S. military capabilities, including strategic nuclear weapons and conventional forces, may be sufficient. ", "In the 2010 Nuclear Posture Review, the Obama Administration stated that the United States \"will continue to assure our allies and partners of our commitment to their security and to demonstrate this commitment not only through words, but also through deeds.\" The NPR indicated that a wide range of U.S. military capabilities would support this goal, but also indicated that U.S. commitments would \"retain a nuclear dimension as long as nuclear threats to U.S. allies and partners remain.\" The Administration did not, however, specify that the nuclear dimension would be met with nonstrategic nuclear weapons; the full range of U.S. capabilities would likely be available to support and defend U.S. allies. In addition, the Administration announced that the United States would retire the nuclear-armed sea-launched cruise missiles that had helped provide assurances to U.S. allies in Asia. In essence, the Administration concluded that the United States could reassure U.S. allies in Asia, and deter threats to their security, without deploying sea-based cruise missiles to the region in a crisis.", "Moreover, the possible use of nuclear weapons, and extended nuclear deterrence, were a part of a broader concept that the Obama Administration referred to as \"regional security architectures.\" The 2010 NPR indicated that regional security architectures were a key part of \"the U.S. strategy for strengthening regional deterrence while reducing the role and numbers of nuclear weapons.\" As a result, these architectures would \"include effective missile defense, counter-WMD capabilities, conventional power-projection capabilities, and integrated command and control\u2014all underwritten by strong political commitments.\" In other words, although the United States would continue to extend deterrence to its allies and seek to assure them of the U.S. commitment to their security, it would draw on political commitments and a range of military capabilities to achieve these goals.", "During the presidential campaign, President Trump questioned the value of U.S. alliance relationships in general and the relevance of NATO in particular. He argued that the United States was overextended around the world and that U.S. allies should contribute more toward their own defense or at least pay more for U.S. security guarantees. Moreover, he suggested that some U.S. allies would be better served if they acquired their own nuclear weapons rather than relying on U.S. nuclear weapons for their defense. ", "These ideas did not translate into policy in the 2018 Nuclear Posture Review. To the contrary, the NPR asserts that the U.S. commitment to NATO and to allies and partners in the Asia-Pacific region \"is unwavering.\" Concerns about the regional threats to U.S. allies in Europe and Asia and about the credibility of U.S. assurances to these allies dominate the analysis in the NPR. However, while the 2010 NPR called for a strengthening of U.S. conventional capabilities and missile defenses as a part of its effort to strengthen extended deterrence, the 2018 NPR focuses almost exclusively on enhancements to U.S. nuclear capabilities. It does not completely dismiss the value of U.S. conventional capabilities, but asserts that \"conventional forces alone are inadequate to assure many allies who rightly place enormous value on U.S. extended nuclear deterrence for their security.\" According to the NPR, these concerns are central to the recommendation that the United States develop two new types of nonstrategic nuclear weapons."], "subsections": []}, {"section_title": "Regional Contingencies", "paragraphs": ["In the past, U.S. discussions about nonstrategic nuclear weapons have also addressed questions about the role they might play in deterring or responding to regional contingencies that involved threats from nations that may not be armed with their own nuclear weapons. For example, former Secretary of Defense Perry stated, during the Clinton Administration, that \"maintaining U.S. nuclear commitments with NATO, and retaining the ability to deploy nuclear capabilities to meet various regional contingencies , continues to be an important means for deterring aggression, protecting and promoting U.S. interests, reassuring allies and friends, and preventing proliferation (emphasis added).\" ", "Specifically, both during the Cold War and after the demise of the Soviet Union, the United States maintained the option to use nuclear weapons in response to attacks with conventional, chemical, or biological weapons. For example, in 1999, Assistant Secretary of Defense Edward Warner testified that \"the U.S. capability to deliver an overwhelming, rapid, and devastating military response with the full range of military capabilities will remain the cornerstone of our strategy for deterring rogue nation ballistic missile and WMD proliferation threats. The very existence of U.S. strategic and theater nuclear forces, backed by highly capable conventional forces, should certainly give pause to any rogue leader contemplating the use of WMD against the United States, its overseas deployed forces, or its allies.\" These statements do not indicate whether nonstrategic nuclear weapons would be used to achieve battlefield or tactical objectives, or whether they would contribute to strategic missions, but it remained evident, throughout the 1990s, that the United States continued to view these weapons as a part of its national security strategy.", "The George W. Bush Administration also emphasized the possible use of nuclear weapons in regional contingencies in its 2001 Nuclear Posture Review. The Bush Administration appeared to shift toward a somewhat more explicit approach when acknowledging that the United States might use nuclear weapons in response to attacks by nations armed with chemical, biological, and conventional weapons, stating that the United States would develop and deploy those nuclear capabilities that it would need to defeat the capabilities of any potential adversary whether or not it possessed nuclear weapons. This does not, by itself, indicate that the United States would plan to use nonstrategic nuclear weapons. However, many analysts concluded from these and other comments by Bush Administration officials that the United States was planning for the tactical, first use of nuclear weapons. The Bush Administration never confirmed this view, and, instead, indicated that it would not use nuclear weapons in anything other than the most grave of circumstances.", "The Obama Administration, on the other hand, seemed to foreclose the option of using nuclear weapons in some regional contingencies. Specifically, it stated, in the 2010 NPR, that \"the United States will not use or threaten to use nuclear weapons against non-nuclear weapons states that are party to the Nuclear Non-Proliferation Treaty (NPT) and in compliance with their nuclear non-proliferation obligations.\" Specifically, if such a nation were to attack the United States with conventional, chemical, or biological weapons, the United States would respond with overwhelming conventional force, but it would not threaten to use nuclear weapons if the attacking nation was in compliance with its nuclear nonproliferation obligations and it did not have nuclear weapons of its own. At the same time, though, the NPR stated that any state that used chemical or biological weapons \"against the United States or its allies and partners would face the prospect of a devastating conventional military response\u2014and that any individuals responsible for the attack, whether national leaders or military commanders, would be held fully accountable.\"", "The 2018 NPR echoes some of this policy from the Obama Administration, but alters it in ways that track more closely with the policy of the Bush Administration. First, the 2018 NPR repeats the paragraph from the 2010 NPR stating that \"the United States will not use or threaten to use nuclear weapons against non-nuclear weapons states that are party to the NPT and in compliance with their nuclear non-proliferation obligations.\" But it then states that \"the United States reserves the right to make any adjustment in the assurance that may be warranted by the evolution and proliferation of non-nuclear strategic attack technologies [emphasis added] and U.S. capabilities to counter that threat.\" Elsewhere in the document the NPR indicates that non-nuclear strategic attacks could include chemical, biological, cyber, and large-scale conventional aggression. Hence, where the Obama Administration left open the possibility of nuclear retaliation in response to biological attacks, but stated that other threats could be deterred by the prospect of a devastating conventional response, the Trump Administration includes a wider range of circumstances where the United States might retaliate with nuclear weapons after an attack. "], "subsections": []}]}, {"section_title": "Force Structure", "paragraphs": ["Through the late 1990s and early in George W. Bush Administration, the United States maintained approximately 1,100 nonstrategic nuclear weapons in its active stockpile. Unclassified reports indicate that, of this number, around 500 were air-delivered bombs deployed at bases in Europe. The remainder, including some additional air-delivered bombs and around 320 nuclear-armed sea-launched cruise missiles, were held in storage areas in the United States. After the Clinton Administration's 1994 Nuclear Posture Review, the United States eliminated its ability to return nuclear weapons to U.S. surface ships (it had retained this ability after removing the weapons under the 1991 PNI). It retained, however, its ability to restore cruise missiles to attack submarines, and it did not recommend any changes in the number of air-delivered weapons deployed in Europe. During this time, the United States also consolidated its weapons storage sites for nonstrategic nuclear weapons. It reportedly reduced the number of these facilities \"by over 75%\" between 1988 and 1994. It eliminated two of its four storage sites for sea-launched cruise missiles, retaining only one facility on each coast of the United States. It also reduced the number of bases in Europe that store nuclear weapons from over 125 bases in the mid-1980s to 10 bases, in seven countries, by 2000. ", "The Bush Administration did not recommend any changes for U.S. nonstrategic nuclear weapons after completing its Nuclear Posture Review in 2001. Reports indicate that it decided to retain the capability to restore cruise missiles to attack submarines because of their ability to deploy, in secret, anywhere on the globe in time of crisis. The NPR also did not recommend any changes to the deployment of nonstrategic nuclear weapons in Europe, leaving decisions about their status to the members of the NATO alliance. ", "Nevertheless, according to unclassified reports, the United States did reduce the number of nuclear weapons deployed in Europe and the number of facilities that house those weapons during the George W. Bush Administration. Some reports indicate that most of the weapons were withdrawn from Europe between 2001 and 2006. According to unclassified reports, some are stored at U.S. bases and would be delivered by U.S. aircraft; others are stored at bases operated by the \"host nation\" and would be delivered by that nation's aircraft if NATO decided to employ nuclear weapons. ", "The Obama Administration did not announce any further reductions to U.S. nuclear weapons in Europe but it indicated that the United States would \"consult with our allies regarding the future basing of nuclear weapons in Europe.\" In the months prior to the completion of NATO's 2010 Strategic Concept, some politicians in some European nations did propose that the United States withdraw these weapons. For example, Guido Westerwelle, Germany's foreign minister, stated that he supported the withdrawal of U.S. nuclear weapons from Germany. As was noted above, NATO did not call for the removal of these weapons in its new Strategic Concept, but did indicate that it would be open to reducing them as a result of arms control negotiations with Russia.", "Moreover, in the 2010 NPR, the Obama Administration indicated that it would take the steps necessary to maintain the capability to deploy U.S. nuclear weapons in Europe. It indicated that the U.S. Air Force would retain the capability to deliver both nuclear and conventional weapons as it replaced aging F-16 aircraft with the new F-35 Joint Strike Fighter. The NPR also indicated that the United States would conduct a \"full scope\" life extension program for the B61 bomb, the weapon that is currently deployed in Europe, \"to ensure its functionality with the F-35.\" This life extension program will consolidate four versions of the B61 bomb, including the B61-3 and B61-4 that are currently deployed in Europe, into one version, the B61-12. Reports indicate that this new version will reuse the nuclear components of the older bombs, but will include enhanced safety and security features and a new \"tail kit\" that will increase the accuracy of the weapon.", "On the other hand, the 2010 NPR indicated that the U.S. Navy would retire its nuclear-armed, sea-launched cruise missiles (TLAM-N). It indicated that \"this system serves a redundant purpose in the U.S. nuclear stockpile\" because it is one of several weapons the United States could deploy forward. The NPR also noted that \"U.S. ICBMs and SLBMs are capable of striking any potential adversary.\" As a result, because \"the deterrence and assurance roles of TLAM-N can be adequately substituted by these other means,\" the United States could continue to extend deterrence and provide assurance to its allies in Asia without maintaining the capability to redeploy TLAM-N missiles.", "As was noted above, the Trump Administration's NPR reaffirms many of the policies and programs the United States has pursued in recent years. It does not announce any changes to the current basing of U.S. nuclear weapons in Europe, and reaffirms the U.S. commitment to upgrading U.S. dual-capable aircraft (DCA) with the nuclear-capable F-35 aircraft. It indicates that the United States will \"maintain, and enhance as necessary, the capability to forward deploy nuclear bombers and DCA around the world\" and will \"work with NATO to best ensure\u2014and improve where needed\u2014the readiness, survivability, and operational effectiveness of DCA based in Europe.\"", "The 2018 NPR also reinforces U.S. support for measures that NATO is taking to ensure that its \"overall deterrence and defense posture, including its nuclear forces, remain capable of addressing any potential adversary's doctrine and capabilities.\" These measures include, among other things, enhancing \"the readiness and survivability of NATO DCA\" and improving the \"capabilities required to increase their operational effectiveness\"; promoting \"the broadest possible participation of Allies in their agreed burden sharing arrangements\"; and enhancing \"the realism of training and exercise programs to ensure the Alliance can effectively integrate nuclear and non-nuclear operations.\"", "On the other hand, the 2018 NPR reverses the Obama Administration's decision to remove sea-launched cruise missiles from the U.S. force structure. Where the 2010 NPR asserted that the capabilities provided by a SLCM were redundant with those available on other forward-deployable systems, the 2018 NPR argues that the SLCM will provide the United States with \"a needed non-strategic regional presence\" that will address \"the increasing need for flexible and low-yield options.\" According to the NPR, this will strengthen deterrence of regional adversaries and assure allies of the U.S. commitment to their defense. The NPR also indicates that a new SLCM program could serve as a response to Russia's violation of the 1987 Intermediate-range Nuclear Forces (INF) Treaty and a \"necessary incentive for Russia to negotiate seriously a reduction of its non-strategic nuclear weapons.\" "], "subsections": []}]}, {"section_title": "Russian Nonstrategic Nuclear Weapons after the Cold War", "paragraphs": [], "subsections": [{"section_title": "Strategy and Doctrine", "paragraphs": ["Russia has altered and adjusted the Soviet nuclear strategy to meet its new circumstances in a post-Cold War world. It explicitly rejected the Soviet Union's no-first-use pledge in 1993, indicating that it viewed nuclear weapons as a central feature in its military and security strategies. However, Russia did not maintain the Soviet Union's view of the need for nuclear weapons to conduct surprise attacks or preemptive attacks. Instead, it seems to view these weapons as more defensive in nature, as a deterrent to conventional or nuclear attack and as a means to retaliate and defend itself if an attack were to occur.", "Russia has revised its national security and military strategy several times in the past 20 years, with successive versions appearing to place a greater reliance on nuclear weapons. For example, the military doctrine issued in 1997 allowed for the use of nuclear weapons \"in case of a threat to the existence of the Russian Federation.\" The doctrine published in 2000 expanded the circumstances when Russia might use nuclear weapons to include attacks using weapons of mass destruction against Russia or its allies \"as well as in response to large-scale aggression utilizing conventional weapons in situations critical to the national security of the Russian Federation.\" In mid-2009, when discussing the revision of Russia's defense strategy that was expected late in 2009 or early 2010, Nikolai Patrushev, the head of Russia's Presidential Security Council, indicated that Russia would have the option to launch a \"preemptive nuclear strike\" against an aggressor \"using conventional weapons in an all-out, regional, or even local war.\" ", "However, when Russia published the final draft of the doctrine, in early 2010, it did not specifically authorize the preemptive use of nuclear weapons. Instead, it stated that \"Russia reserves the right to use nuclear weapons in response to a use of nuclear or other weapons of mass destruction against her and (or) her allies, and in a case of an aggression against her with conventional weapons that would put in danger the very existence of the state.\" Instead of expanding the range of circumstances when Russia might use nuclear weapons, this actually seemed to narrow the range, from the 2000 version that allowed for nuclear use \"in situations critical to the national security of the Russian Federation\" to the current form that states they might be used in a case \"that would put in danger the very existence of the state.\"", "Hence, there is little indication that Russia plans to use nuclear weapons at the outset of a conflict, before it has engaged with conventional weapons, even though Russia could resort to the use of nuclear weapons first, during an ongoing conventional conflict. This is not new, and has been a part of Russian military doctrine for years.", "Analysts have identified several factors that have contributed to Russia's increasing dependence on nuclear weapons. First, with the demise of the Soviet Union and the economic upheavals of the 1990s, Russia no longer had the means to support a large and effective conventional army. The conflicts in Chechnya and Georgia highlighted seeming weaknesses in Russia's conventional military forces. Russian analysts also saw emerging threats in other former Soviet states along Russia's periphery. Many analysts believed that by threatening, even implicitly, that it might resort to nuclear weapons, Russia hoped it could enhance its ability to deter similar regional conflicts. Russia's sense of vulnerability, and its view that the threats to its security were increasing, also stemmed from the debates over NATO enlargement. Russia has feared the growing alliance would create a new challenge to Russia's security, particularly if NATO moved nuclear weapons closer to Russia's borders. These concerns contributed to the statement that Russia might use nuclear weapons if its national survival were threatened. ", "For many in Russia, NATO's air campaign in Kosovo in 1999 underlined Russia's growing weakness and NATO's increasing willingness to threaten Russian interests. Its National Security Concept published in 2000 noted that the level and scope of the military threat to Russia was growing. It cited, specifically, as a fundamental threat to its security, \"the desire of some states and international associations to diminish the role of existing mechanisms for ensuring international security.\" There are also threats in the border sphere. \"A vital task of the Russian Federation is to exercise deterrence to prevent aggression on any scale and nuclear or otherwise, against Russia and its allies.\" Consequently, Russia concluded that it \"should possess nuclear forces that are capable of guaranteeing the infliction of the desired extent of damage against any aggressor state or coalition of states in any conditions and circumstances.\"", "The debate over the role of nuclear weapons in Russia's national security strategy in the late 1990s considered both strategic and nonstrategic nuclear weapons. With concerns focused on threats emerging around the borders of the former Soviet Union, analysts specifically considered whether nonstrategic nuclear weapons could substitute for conventional weaknesses in regional conflicts. The government appeared to resolve this debate in favor of the modernization and expansion of nonstrategic nuclear weapons in 1999, shortly after the conflict in Kosovo. During a meeting of the Kremlin Security Council, Russia's President Yeltsin and his security chiefs reportedly agreed \"that Moscow should develop and deploy tactical, as well as, strategic nuclear weapons.\" Vladimir Putin, who was then chairman of the Security Council, stated that President Yeltsin had endorsed \"a blueprint for the development and use of nonstrategic nuclear weapons.\"", "Many analysts in the United States interpreted this development, along with questions about Russia's implementation of its obligations under the 1991 PNI, to mean that Russia was \"walking back\" from its obligation to withdraw and eliminate nonstrategic nuclear weapons. Others drew a different conclusion. One Russian analyst has speculated that the documents approved in 1999 focused on the development of operations plans that would allow Russia to conduct \"limited nuclear war with strategic means in order to deter the enemy, requiring the infliction of pre-planned, but limited damage.\" Specifically, he argued that Russia planned to seek a new generation of nonstrategic, or low-yield, warheads that could be to be delivered by strategic launchers. Others believe Russia has also pursued the modernization of existing nonstrategic nuclear weapons and development of new nuclear warheads for shorter-range nuclear missiles.", "The potential threat from NATO remained a concern for Russia in its 2010 and 2014 military doctrines. The 2010 doctrine stated that the main external military dangers to Russia are \"the desire to endow the force potential of the North Atlantic Treaty Organization (NATO) with global functions carried out in violation of the norms of international law and to move the military infrastructure of NATO member countries closer to the borders of the Russian Federation, including by expanding the bloc.\" It also noted that Russia was threatened by \"the deployment of troop contingents of foreign states (groups of states) on the territories of states contiguous with the Russian Federation and its allies and also in adjacent waters.\" The 2014 doctrine repeated these concerns. Hence, Russia views NATO troops in nations near Russia's borders as a threat to Russian security. This concern extends to U.S. missile defense assets that may be deployed on land in Poland and Romania and at sea near Russian territory as a part of the European Phased Adaptive Approach (EPAA). In an environment where Russia also has doubts about the effectiveness of its conventional forces, its doctrine allows for the possible use of nonstrategic nuclear weapons during a local or regional conflict on its periphery. The doctrines do not say that Russia would use nuclear weapons to preempt such an attack, but it does reserve the right to use them in response.", "Although Russia does not use the phrase in any of these recent versions of its military doctrine, analysts both inside and outside the U.S. government often refer to this approach as the \"escalate to de-escalate\" doctrine. Russian statements, when combined with military exercises that simulate the use of nuclear weapons against NATO members, have led many to believe that Russia might threaten to use its nonstrategic nuclear weapons to coerce or intimidate its neighbors. These threats could occur prior to the start of a conflict, or within a conflict if Russia believed that the threat to use nuclear weapons might lead its adversaries (including the United States and its allies) to back down. This doctrine, when combined with recent Russian statements designed to remind others of the strength of Russia's nuclear deterrent, seems to indicate that Russia has increased the role of nuclear weapons in its military strategy and military planning. ", "The 2018 Nuclear Posture Review adheres to the view that Russia has adopted such a strategy and asserts that Russia \"mistakenly assesses that the threat of nuclear escalation or actual first use of nuclear weapons would serve to 'de-escalate' a conflict on terms favorable to Russia.\" This view underlines the NPR's recommendations for the United States to develop new low-yield nonstrategic weapons that, it argues, would provide the United States with a credible response, thereby \"ensuring that the Russian leadership does not miscalculate regarding the consequences of limited nuclear first use.\""], "subsections": []}, {"section_title": "Force Structure", "paragraphs": ["It is difficult to estimate the number of nonstrategic nuclear weapons remaining in the Russian arsenal. This uncertainty stems from several factors: uncertainty about the number of nonstrategic nuclear weapons that the Soviet Union had stored and deployed in 1991, when President Gorbachev announced his PNI; uncertainty about the pace of warhead elimination in Russia; and uncertainty about whether all warheads removed from deployment are still scheduled for elimination.", "Analysts estimate that the Soviet Union may have deployed 15,000-25,000 nonstrategic nuclear weapons, or more, in the late 1980s and early 1990s. During the 1990s, Russian officials stated publicly that they had completed the weapons withdrawals mandated by the PNIs and had proceeded to eliminate warheads at a rate of 2,000 per year. However, many experts doubt these statements, noting that Russia probably lacked the financial and technical means to proceed this quickly. In addition, Russian officials have offered a moving deadline for this process in their public statements. For example, at the Nuclear Nonproliferation Treaty review conference in 2000, Russian Foreign Minister Ivanov stated that Russia was about to finish implementing its PNIs. But, at a follow-up meeting two years later, Russian officials stated that the elimination process was continuing, and, with adequate funding, could be completed by the end of 2004. In 2007, an official from Russia's Ministry of Defense stated that Russia had completed the elimination of all of the warheads for its ground forces, 60% of its missile defense warheads, 50% of its air force warheads, and 30% of its naval warheads. In 2010, the Russian government revised this number and said it had reduced its nonstrategic nuclear weapons inventory by 75%.", "In 2003, General Yuri Baluyevsky, who was then the first deputy chief of staff of the Russian General Staff, stated that Russia would not destroy all of its tactical nuclear weapons and that it would, instead, \"hold on to its stockpiles\" in response to U.S. plans to develop new types of nuclear warheads. General Nikolai Makarov, head of the Russian General Staff, made a similar comment in 2008. He said that Russia would \"keep nonstrategic nuclear forces as long as Europe is unstable and packed with armaments.\"", "Russia has also reportedly reduced the number of military bases that could deploy nonstrategic nuclear weapons and has consolidated its storage areas for these weapons. According to unclassified estimates, the Soviet Union may have had 500-600 storage sites for nuclear warheads in 1991. By the end of the decade, this number may have declined to about 100. In the past 10 years, Russia may have further consolidated its storage sites for nuclear weapons, retaining around 50 in operation.", "With consideration for the uncertainties in estimates of Russian nonstrategic nuclear forces, some sources indicate Russia may still have up to 4,000 warheads for nonstrategic nuclear weapons. In its 2009 report, the congressionally mandated Strategic Posture Commission indicated that Russia may have around 3,800 operational nonstrategic nuclear weapons. This number may exclude warheads slated for retirement. A more recent estimate indicates that Russia may have \"nearly 2,000 nonstrategic nuclear warheads assigned for delivery by air, naval, and various defensive forces.\" The authors calculate that, within this total, Russia's navy maintains about 760 warheads for \"cruise missiles, antisubmarine rockets, antiaircraft missiles, torpedoes, and depth charges.\" The Air Force may have 570 nuclear warheads available for delivery by fighters and bombers. Some of Russia's nonstrategic nuclear warheads are also allocated to Russia's air and missile defense forces, with about 140 warheads retained for short-range ballistic missiles. ", "Another source, using a different methodology, concluded that Russia may have half that amount, or only 1,000 operational warheads for nonstrategic nuclear weapons. This estimate concludes that Russia may retain up to 210 warheads for its ground forces, up to 166 warheads for its air and missile defense forces, 334 warheads for its air force, and 330 warheads for its naval forces. Where past studies calculated the number of operational warheads by combining estimates of reductions from Cold War levels with assessments of the number of nuclear-capable units and delivery systems remaining in Russia's force structure, this author focused on the number of operational units and the likely number of nuclear warheads needed to achieve their assigned missions.", "Russia is also modernizing and updating its nonstrategic nuclear forces. According to unclassified sources, this effort appears to \"involve phasing out Soviet-era weapons and replacing them with newer but fewer arms.\" Some argue that Russia will likely limit this modernization program and could retire more of these weapons than it acquires as it develops more capable advanced conventional weapons. Others, however, see Russia's modernization of its nonstrategic nuclear weapons as a partner to its \"escalate to de-escalate\" nuclear doctrine and argue that Russia will expand its nonstrategic nuclear forces as it raises their profile in its doctrine and war-fighting plans. The 2018 Nuclear Posture Review notes that Russia is \"building a large, diverse, and modern set of non-strategic systems that ... may be armed with nuclear or conventional weapons.\" The NPR argues that Russia is \"increasing the total number of such weapons in its arsenal, while significantly improving its delivery capabilities.\" ", "The 2018 NPR also notes that one of Russia's new nonstrategic nuclear weapons is a ground-launched cruise missile with a range between 500 and 5,000 kilometers, which makes it a violation of the 1987 INF Treaty. The Obama Administration had first reported that Russia was in violation of INF in 2014, in the State Department's Report on Adherence to and Compliance with Arms Control, Nonproliferation, and Disarmament Agreements and Commitments . According to the 2017 Report, Russia began deploying the missile, now known as the 9M729, in late 2016. "], "subsections": []}]}, {"section_title": "Changing the Focus of the Debate", "paragraphs": ["The preceding sections of this report focus exclusively on U.S. and Soviet/Russian nonstrategic nuclear weapons. These weapons were an integral part of the Cold War standoff between the two nations. The strategy and doctrine that would have guided their use and the numbers of deployed weapons both figured into calculations about the possibility that a conflict between the two nations might escalate to a nuclear exchange. Other nations\u2014including France, Great Britain, and China\u2014also had nuclear weapons, but these did not affect the central conflict of the Cold War in the same way as U.S. and Soviet forces.", "The end of the Cold War, however, and the changing international security environment during the past 25 years has rendered incomplete any discussion of nonstrategic nuclear weapons that is limited to U.S. and Russian forces. Because both these nations maintain weapons and plans for their use, the relationship between the two nations could still affect the debate about these weapons. In addition, Russian officials have turned to these weapons as a part of their response to concerns about a range of U.S. and NATO policies. Nevertheless, both these nations have looked beyond their mutual relationship when considering possible threats and responses that might include the use of nonstrategic nuclear weapons. Both nations have highlighted the threat of the possible use of nuclear, chemical, or biological weapons by other potential adversaries or nonstate actors. Both have indicated that they might use nuclear weapons to deter or respond to threats from other nations. This theme is evident in the 2018 Nuclear Posture Review, which calls for the deployment of a new sea-launched cruise missile to address the threat, at least in part, to U.S. allies from the missile and nuclear programs in North Korea.", "In addition, many analysts believe that a debate about nonstrategic nuclear weapons can no longer focus exclusively on the U.S. and Russian arsenals. For example, India and Pakistan have joined the list of nations that may potentially resort to nuclear weapons in the event of a conflict. If measured by the range of delivery vehicles and the yield of the warheads, these nations' weapons could be considered to be nonstrategic. But each nation could plan to use these weapons in either strategic or nonstrategic roles. Both nations continue to review and revise their nuclear strategies, leaving many questions about the potential role for nuclear weapons in future conflicts. Pakistan, in particular, has considered deploying short-range tactical nuclear weapons with forward-deployed forces, with the intention of using them on the battlefield to blunt a possible Indian attack. China also has nuclear weapons with ranges and missions that could be considered nonstrategic. Many analysts have expressed concerns about the potential for the use of nuclear weapons in a conflict over Taiwan or other areas of China's interests. This report does not review the nuclear weapons programs in these nations. However, when reviewing the issues raised by, problems attributed to, and solutions proposed for nonstrategic nuclear weapons, the report acknowledges the role played by the weapons of these other nations."], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": ["During the 2010 debate on the New START Treaty, many Senators expressed concerns about Russian nonstrategic nuclear weapons. They noted that these weapons were not covered by the new treaty, that Russia possessed a far greater number of these weapons than did the United States, and that Russia's nonstrategic nuclear weapons might be vulnerable to theft or sale to other nations seeking nuclear weapons. More recently, some Members have raised concerns about the possibility that Russia might deploy these weapons in Crimea, which Russia annexed in March 2014, bringing them closer to the borders of some NATO allies. Russia's Foreign Minister Sergei Lavrov ignited these concerns in December 2014, when he noted that Russia had a right to put nuclear weapons in Crimea because Crimea was now a part of Russia. Although he did not offer details of plans for such deployments, other reports have indicated that Russia might move missiles and bombers that could deliver either nuclear or conventional weapons into Crimea in the next few years. The 2018 Nuclear Posture Review continues to highlight concerns about Russia's nonstrategic nuclear weapons and links proposed changes in U.S. nuclear forces\u2014including the development of a new low-yield warhead for submarine launched ballistic missiles and new sea-launched cruise missile\u2014to Russia's apparent nuclear doctrine and the modernization of its nonstrategic nuclear forces. ", "During the 2010 debates prior to the completion of NATO's new Strategic Concept, analysts and government officials also raised many issues about U.S. nonstrategic nuclear weapons. These debates focused on questions about whether NATO should continue to rely on nuclear weapons to ensure its security and whether the United States should continue to deploy nonstrategic nuclear weapons at bases in Europe. Many of the discussions that focused on Russian nonstrategic nuclear weapons and many of those that focused on U.S. nonstrategic nuclear weapons reached a similar conclusion\u2014there was widespread agreement about the need for further cooperation between the United States and Russia in containing, controlling, and possibly reducing nonstrategic nuclear weapons. The 112 th Congress reiterated its support for this agenda, when in the FY2013 Defense Authorization Act ( H.R. 4310 , \u00a71037) it indicated that \"the United States should pursue negotiations with the Russian Federation aimed at the reduction of Russian deployed and nondeployed nonstrategic nuclear forces.\" ", "But the tone of the discussion has changed in recent years, following Russia's annexation of Crimea, its support for separatists in Ukraine, and its military maneuvers near NATO nations. There is little discussion of possible reductions in U.S. nuclear weapons in Europe and declining interest in pursuing transparency and confidence-building measures with Russia. Instead, while the prospects for cooperation with Russia seem limited, particularly in light of its reported violation of the INF Treaty, NATO has taken steps to bolster its nuclear capabilities and the United States is considering the deployment of new nonstrategic nuclear weapons."], "subsections": [{"section_title": "Safety and Security of Russian Nonstrategic Nuclear Weapons", "paragraphs": ["One potential risk from Russia's continued deployment of nonstrategic nuclear weapons stems from concerns about their safety and security in storage areas and a possible lack of central control over their use when deployed in the field. These weapons were deployed, and many remain in storage, at remote bases close to potential battlefields and far from the central command authority in Moscow. The economic chaos in Russia during the 1990s raised questions about the stability and reliability of the troops charged with monitoring and securing these weapons. At the time, some raised concerns about the possibility that the weapons might be lost, stolen, or sold to other nations or groups seeking nuclear weapons. Even though economic conditions in Russia have improved significantly, some analysts still view Russian nonstrategic nuclear weapons as a possible source of instability. Specifically, some have noted that \"the continuing existence of \u2026 tactical nuclear weapons \u2026 creates a risk of accidental, unauthorized or mistaken use. In addition, the risk of terrorist groups acquiring these weapons is high. Therefore, security vigilance is essential.\"", "Russian officials deny that they might lose control over their nonstrategic nuclear weapons and they contend that the problems of the 1990s were resolved as the weapons were withdrawn to central storage areas. Moreover, there is no public evidence from Western sources about any episodes of lost, sold, or stolen Russian nuclear weapons. Nevertheless, concerns remain that these weapons might find their way to officials in rogue nations or nonstate actors. For example, during comments made after a speech in October 2008, Secretary of Defense Robert Gates stated that he was worried that the Russians did not know the numbers or locations of \"old land mines, nuclear artillery shells, and so on\" that might be of interest to rogue states or terrorists. Russian officials noted, in response to this comment, that its stocks of nuclear weapons were secure and well-guarded and that Gates's concerns were not valid. "], "subsections": []}, {"section_title": "The Role of Nonstrategic Nuclear Weapons in Russia's National Security Policy", "paragraphs": ["As was noted above, many analysts argue that Russia's nonstrategic nuclear weapons pose a risk to the United States, its allies, and others because Russia has altered its national security concept and military strategies, increasing its reliance on nuclear weapons. Some fear that Russia might resort to the early use of nuclear weapons in a conflict along its periphery, which could lead to a wider conflict and the possible involvement of troops from NATO or other neighboring countries, possibly drawing in new NATO members. Some also believe that Russia could threaten NATO with its nonstrategic nuclear weapons because Russia sees NATO as a threat to its security. Russian analysts and officials have argued that NATO enlargement\u2014with the possible deployment of nuclear weapons and missile defense capabilities on the territories of new NATO members close to Russia's borders\u2014demonstrates how much NATO could threaten Russia.", "The congressionally mandated Strategic Posture Commission expressed a measure of concern about the military implications of Russia's nonstrategic nuclear forces. It noted that Russia \"stores thousands of these weapons in apparent support of possible military operations west of the Urals.\" It further noted that the current imbalance between U.S. and Russian nonstrategic nuclear warheads is \"worrisome to some U.S. allies in Central Europe.\" It argued that this imbalance, and the allies' worries, could become more pronounced in the future if the United States and Russia continue to reduce their numbers of deployed strategic nuclear weapons.", "Others have argued, however, that regardless of Russia's rhetoric, \"Russia's theater nuclear weapons are not ... destabilizing.\" Even if modernized, these weapons will not \"give Moscow the capability to alter the strategic landscape.\" Further, Russian weapons, even with its new military strategy, may not pose a threat to NATO or U.S. allies. Russia's doctrine indicates that it would use these weapons in response to a weak performance by its conventional forces in an ongoing conflict. Since it would be unlikely for NATO to be involved in a conventional conflict with Russia, it would also be unlikely for Russian weapons to find targets in NATO nations. This does not, however, preclude their use in other conflicts along Russia's periphery. As Russian documents indicate, Russia could use these weapons if its national survival were at stake. ", "This view, however, has been tempered, in recent years, by both Russia's aggression in Ukraine and its frequent \"nuclear saber-rattling.\" Not only have Russian officials reminded others of the existence and relevance of Russian nuclear weapons, Russian military exercises, bomber flights, and cruise missile launches have seemed designed to demonstrate Russia's capabilities and, possibly, its willingness to challenge NATO's eastern members. These actions have raised concerns about the possibility that Russia might threaten to use nuclear weapons during a crisis with NATO, in line with its apparent \"escalate to de-escalate\" strategy, to force a withdrawal by NATO forces defending an exposed ally or to terminate a conflict on terms favorable to Russia. While some analysts dispute this interpretation of Russia's doctrine, most agree that nonstrategic nuclear weapons appear to play a significant role in Russia's doctrine and war plans."], "subsections": []}, {"section_title": "The Role of Nonstrategic Nuclear Weapons in U.S. National Security Policy", "paragraphs": ["The Bush Administration argued, after the 2001 Nuclear Posture Review, that the United States had reduced its reliance on nuclear weapons by increasing the role of missile defenses and precision conventional weapons in the U.S. deterrent posture. At the same time, though, the Administration indicated that the United States would acquire and maintain those capabilities that it needed to deter and defeat any nation with the potential to threaten the United States, particularly if the potential adversary possessed weapons of mass destruction. It noted that these new, threatening capabilities could include hardened and deeply buried targets and, possibly, bunkers holding chemical or biological weapons. It indicated that the United States would seek to develop the capabilities to destroy these types of facilities.", "Using a similar construct, the Obama Administration, in the 2010 Nuclear Posture Review, also indicated that the United States would reduce the role of nuclear weapons in U.S. regional deterrence strategies by increasing its reliance on missile defenses and precision conventional weapons. Unlike the Bush Administration, however, the Obama Administration did not seek to acquire new nuclear weapons capabilities or to extend U.S. nuclear deterrence to threats from nations armed with chemical or biological weapons. It stated that it would not consider the use of nuclear weapons in response to conventional, chemical, or biological attack if the attacking nation were in compliance with its nuclear nonproliferation obligations. Instead, in such circumstances, the United States would deter and respond to attacks with missile defenses and advanced conventional weapons. In addition, the Administration announced that it planned to retire the Navy's nuclear-armed, sea-launched cruise missiles, which had been part of the U.S. extended deterrent to allies in Asia. Nevertheless, the Administration pledged to retain and modernize the B-61 warheads, carried by U.S. tactical fighters and bombers; these are also a part of the U.S. extended deterrent.", "Some questioned the wisdom of this change in policy. They recognized that the United States would only threaten the use of nuclear weapons in the most extreme circumstances, but they argued that, by taking these weapons \"off the table\" in some contingencies, the United States might allow some adversaries to conclude that they could threaten the United States without fear of an overwhelming response. The Obama Administration argued, however, that although it was taking the nuclear option off the table in some cases, this change would not undermine the U.S. ability to deter attacks from non-nuclear nations because the United States maintained the capability to respond to attacks from these nations with overwhelming conventional force. According to Under Secretary of State Ellen Tauscher, \"we retain the prospect of using devastating conventional force to deter and respond to any aggression, especially if they were to use chemical or biological weapons. No one should doubt our resolve to hold accountable those responsible for such aggression, whether those giving the orders or carrying them out. Deterrence depends on the credibility of response. A massive and potential conventional response to non-nuclear aggression is highly credible.\"", "Questions about the role of U.S. nuclear weapons in regional contingencies have resurfaced in recent years, as analysts have sought to understand how these weapons might affect a conflict with a regional ally armed with nuclear weapons. Some analysts doubt that U.S. nuclear weapons would play any role in such a contingency, unless used in retaliation after an adversary used a nuclear weapon against the United States or an ally, because U.S. conventional forces should be sufficient to achieve most conceivable military objectives. Others, however, argue that the United States might need to threaten the use of nuclear weapons, and possibly even employ those weapons, when facing an adversary seeking to use its own nuclear capabilities to intimidate the United States or coerce it to withdraw support for a regional ally. Some have suggested, specifically, that forward-deployed nuclear weapons with lower yields\u2014in other words, nonstrategic nuclear weapons\u2014might serve as a more credible deterrent threat in these circumstances.", "The 2018 Nuclear Posture Review adopts this perspective, and seems to discount the approach, taken in both the Bush and Obama NPRs, of reducing the role of nuclear weapons by expanding the role and options available with advanced conventional weapons. It does not completely dismiss the value of U.S. conventional capabilities, but asserts that \"conventional forces alone are inadequate to assure many allies who rightly place enormous value on U.S. extended nuclear deterrence for their security.\" These concerns are central to the NPR's recommendation that the United States develop two new types of nonstrategic nuclear weapons. Where the two previous NPRs sought to fill \"gaps\" in deterrence with ballistic missile defenses and advanced conventional weapons, the 2018 NPR asserts that new nuclear weapons are needed for this purpose."], "subsections": []}, {"section_title": "The Role of Nonstrategic Nuclear Weapons in NATO Policy and Alliance Strategy", "paragraphs": ["For years after the collapse of the Warsaw Pact and demise of the Soviet Union, analysts questioned whether the United States needed to continue to deploy nuclear weapons in Europe. During the Cold War, these weapons were a part of NATO's effort to offset the conventional superiority of the Soviet Union and its Warsaw Pact allies. Some argued that this role was no longer relevant following the collapse of the Soviet-era military and alliance structure. In addition, analysts argued that NATO conventional forces were far superior to those of Russia, and sufficient for NATO's defense. However, NATO policy still views nonstrategic nuclear weapons as a deterrent to any potential adversary, and they also serve as a link among the NATO nations, with bases in several nations and shared responsibility for nuclear policy planning and decisionmaking. They also still serve as a visible reminder of the U.S. extended deterrent and assurance of its commitment to the defense of its allies. ", "The United States, its allies, and analysts outside government engaged in a heated debate over the role of and need for U.S. nonstrategic nuclear weapons deployed in Europe in the months leading up to the completion of NATO's Strategic Concept in November 2010. In early 2010, political leaders from several NATO nations\u2014including Belgium, Germany, Luxembourg, the Netherlands, and Norway\u2014called for the United States to remove these weapons from Europe. They argued that these weapons served no military purpose in Europe, and that their removal would demonstrate NATO's commitment to the vision of a world free of nuclear weapons, a vision supported by President Obama in a speech he delivered in April 2009. Those who sought the weapons' removal also argued that NATO could meet the political goals of shared nuclear responsibility in other ways, and that the United States could extend deterrence and ensure the security of its allies in Europe with conventional weapons, missile defenses, and longer-range strategic nuclear weapons. Moreover, some argue, because these weapons play no military or political role in Europe, they no longer serve as a symbol of alliance solidarity and cooperation.", "Others, however, including some officials in newer NATO nations, argued that U.S. nonstrategic nuclear weapons in Europe not only remained relevant militarily, in some circumstances, but that they were an essential indicator of the U.S. commitment to NATO security and solidarity. This argument has gained credence as some of the newer NATO allies, such as Poland and the Baltic states, feel threatened by Russia and its arsenal of nonstrategic nuclear weapons. They would view the withdrawal of U.S. nuclear weapons as a change in the U.S. and NATO commitment to their security.", "NATO foreign ministers addressed the issue of U.S. nonstrategic nuclear weapons during their meeting in Tallinn, Estonia, in April 2010. At this meeting, the allies sought to balance the views of those nations who sought NATO agreement on the removal of the weapons and those who argued that these weapons were still relevant to their security and to NATO's solidarity. At the conclusion of the meeting, Secretary of State Hillary Clinton said that the United States was not opposed to reductions in the number of U.S. nuclear weapons in Europe, but that the removal of these weapons should be linked to a reduction in the number of Russian nonstrategic nuclear weapons. Moreover, according to a NATO spokesman, the foreign ministers had agreed that no nuclear weapons would be removed from Europe unless all 28 member states of NATO agreed.", "Some also question whether the United States and NATO might benefit from the removal of these weapons from bases in Europe for safety and security reasons. An Air Force review of nuclear surety and security practices, released in early 2008, identified potential security concerns for U.S. weapons stored at some bases in Europe. The problems were evident at some of the national bases, where the United States stores nuclear weapons for use by the host nation's own aircraft, but not at U.S. air bases in Europe. The review noted that \"host nation security at nuclear-capable units varies from country to country\" and that most bases do not meet DOD's security requirements. ", "As was noted earlier, some in Congress thought the United States should consider expanding its deployment of dual-capable aircraft and nuclear bombs into eastern NATO nations, in response to Russia's aggression in Ukraine. They argued that such moves would demonstrate that \"Russian actions will come at a price.\" Some have also suggested that the United States consider deploying new nuclear-armed missiles in Europe, in response to Russia's violation of the 1987 INF Treaty. There is little evidence that NATO has requested, or would welcome, such deployments, even though the United States has announced that it plans to withdraw from the INF Treaty. Some have argued that such steps could ignite a new arms race that could further undermine security in Europe. Others have noted that these weapons might be destabilizing if they were vulnerable to preemptive strikes. Moreover, NATO has adjusted its conventional force posture and operations in response to Russia's actions in Ukraine. According to NATO documents, these changes, when backed by the strategic nuclear forces of the United States and United Kingdom, should help assure the eastern allies of NATO's ability to defend them."], "subsections": []}, {"section_title": "The Relationship Between Nonstrategic Nuclear Weapons and U.S. Nonproliferation Policy", "paragraphs": ["The George W. Bush Administration stated that the U.S. nuclear posture adopted after the 2002 NPR, along with the research into the development of new types of nuclear warheads, would contribute to U.S. efforts to stem the proliferation of nuclear, chemical, and biological weapons. It argued that, by creating a more credible threat against the capabilities of nations that seek these weapons, the U.S. policy would deter their acquisition or deployment. It also reinforced the value of the U.S. extended deterrent to allies in Europe and Japan, thus discouraging them from acquiring their own nuclear weapons.", "Critics of the Bush Administration's policy questioned whether the United States needed new nuclear weapons to deter the acquisition or use of WMD by other nations; as noted above, they claim that U.S. conventional weapons can achieve this objective. Further, many analysts claimed that the U.S. policy would actually spur proliferation, encouraging other countries to acquire their own WMD. Specifically, they noted that U.S. plans and programs could reinforce the view that nuclear weapons have military utility. If the world's only conventional superpower needs more nuclear weapons to maintain its security, then it would be difficult for the United States to argue that other nations could not also benefit from these weapons. Such nations could also argue that nuclear weapons would serve their security interests. Consequently, according to the Bush Administration's critics, the United States might ignite a new arms race if it pursued new types of nuclear weapons to achieve newly defined battlefield objectives. The Bush Administration countered this argument by noting that few nations acquire nuclear weapons in response to U.S. nuclear programs. They do so either to address their own regional security challenges, or to counter U.S. conventional superiority.", "The Obama Administration, in the 2010 Nuclear Posture Review, set out a different relationship between U.S. nuclear weapons policy and nonproliferation policy. The Bush Administration had indicated that a policy where the United States argued that it might use nuclear weapons against non-nuclear nations would discourage these nations from acquiring or using weapons of mass destruction. In other words, they could be attacked with nuclear weapons whether or not they had nuclear weapons of their own. The Obama Administration, however, argued that its adjustment to the U.S. declaratory policy\u2014where it indicated that it would not use U.S. nuclear weapons to threaten or attack nations who did not have nuclear weapons and were in compliance with their nonproliferation obligations\u2014would discourage their acquisition of nuclear weapons. Nations that did not yet have nuclear weapons would know that they could be added to the U.S. nuclear target list if they acquired them. And others, like Iran and North Korea, who were already pursuing nuclear weapons, would know that, if they disbanded their programs, they could be removed from the U.S. nuclear target list.", "The 2018 Nuclear Posture Review, for example, explicitly states that \"credible U.S. extended nuclear deterrence will continue to be a cornerstone of U.S. non-proliferation efforts.\" Many analysts have argued that, if allies were not confident in the reliability and credibility of the U.S. nuclear arsenal, they may feel compelled to acquire their own nuclear weapons. Such calculations might be evident in Japan and South Korea, as they face threats or intimidation from nuclear-armed neighbors like China and North Korea. In recent years, some politicians in South Korea have called for the return of U.S. nonstrategic nuclear weapons to the peninsula, or even South Korea's development of its own nuclear capability, as a response to North Korea's development and testing of nuclear weapons. This view has not received the support of the current government in South Korea, but it does demonstrate that some may see U.S. security guarantees as fragile. Many analysts note, however, that extended deterrence rests on more than just U.S. nonstrategic nuclear weapons. For example, in recent years the United States and South Korea have participated in the U.S.-ROK (Republic of Korea) Extended Deterrence Policy Committee and the United States and Japan have pursued the U.S.-Japan Extended Deterrence Dialogue to discuss issues related to regional security and to bolster the allies' confidence in the U.S. commitment to their security. Moreover, the United States occasionally flies B-2 and B-52 bombers in joint exercises with South Korea to demonstrate its ability to project power, if needed, into a conflict in the area."], "subsections": []}, {"section_title": "Arms Control Options", "paragraphs": ["Concerns about the disparity between the numbers of U.S. and Russian nonstrategic nuclear weapons have dominated discussions about possible arms control measures addressing nonstrategic nuclear weapons in recent years. The United States and Russia have never employed their nonstrategic nuclear weapons to counter, or balance, the nonstrategic nuclear weapons of the other side. For NATO during the Cold War and for Russia in more recent years, these weapons have served to counter perceived weaknesses and an imbalance in conventional forces. As a result, there has been little interest, until recently, in calculating or creating a balance in the numbers of nonstrategic nuclear weapons.", "Some who have expressed a concern about the numerical imbalance in nonstrategic nuclear weapons argue that this imbalance could become more important as the United States and Russia reduce their numbers of strategic nuclear weapons. They fear that NATO nations located near Russia's borders may feel threatened or intimidated by Russia's nonstrategic nuclear weapons. They assert that Russia's advantage in the numbers of these weapons, when combined with a reduction in U.S. strategic forces, could convince these nations that Russia was the rising power in the region, and that they should, therefore, accede to Russia's political or economic pressure. ", "Others, however, have questioned this logic. They agree that Russia's ability to intimidate, and possibly attack, NATO nations on its periphery may be related to the capabilities of Russia's conventional forces and the existence of Russia's nuclear forces. But this ability would exist whether Russia had dozens or hundreds of nuclear weapons in the region. And NATO's ability to resist Russian pressure and support vulnerable allies would be related more to its political cohesion and overall military capabilities than to the precise number of nuclear weapons that were deployed on European territory. Moreover, some note that, in spite of Russia's advantage in the aggregate number on nonstrategic nuclear weapons, many of Russia's weapons may be deployed at bases closer to its border with China than its borders with NATO nations, so many of these weapons should not count in the balance at all."], "subsections": [{"section_title": "Increase Transparency", "paragraphs": ["Many analysts have argued that the United States and Russia should, at a minimum, provide each other with information about their numbers of nonstrategic nuclear weapons and the status (i.e., deployed, stored, or awaiting dismantlement) of those weapons. According to one such article, \"a crucial first step ... would be to ... agree on total transparency, verification, and the right to monitor changes and movement of the arsenal.\" Such information might help each side to monitor the other's progress in complying with the PNIs; it could also help resolve questions and concerns that might come up about the status of these weapons or their vulnerability to theft or misuse. The United States and Russia have discussed transparency measures for nuclear weapons in the past, in a separate forum in the early 1990s, and as a part of their discussions of the framework for a START III Treaty in the late 1990s. They failed to reach agreement on either occasion. Russia, in particular, has seemed unwilling to provide even basic information about its stockpile of nonstrategic nuclear weapons. Some in the United States resisted as well, arguing that public discussions about the numbers and locations of U.S. nuclear weapons in Europe could increase pressure on the United States to withdraw these weapons.", "After NATO completed its new Strategic Concept in 2010 and Deterrence and Defense Posture Review in 2012, many experts recognized that NATO was unlikely to approve reductions in U.S. nonstrategic nuclear weapons in Europe unless Russia agreed to similar reductions. As a result, in recent years, some again argued that NATO and Russia should focus on transparency and confidence-building measures as a way to ease concerns and build cooperation, before they seek to negotiate actual limits or reductions in nonstrategic nuclear weapons. They could begin, for example, with discussions about which types of weapons to include in the negotiation and what type of data to exchange on these weapons. Some have suggested, in addition, that the two nations could exchange information on the locations of storage facilities that no longer house these weapons, as a way to begin the process of building confidence and understanding. Those who support this approach argue that it would serve well as a first step, and could eventually lead to limits or reductions. Others, however, believe these talks might serve as a distraction, and, if the United States and Russia get bogged down in these details, they may never negotiate limits or reductions. Moreover, Russian officials seem equally as uninterested in transparency negotiations as they are in reductions at this time."], "subsections": []}, {"section_title": "Negotiate a Formal Treaty", "paragraphs": ["Over the years, some analysts have suggested that the United States and Russia negotiate a formal treaty to put limits and restrictions on each nation's nonstrategic nuclear weapons. This was a central theme in the debate over the New START Treaty in late 2010. Not only did Members of the Senate call on the Obama Administration to pursue such negotiations, Administration officials noted often that the New START Treaty was just a first step and that the United States and Russia would pursue limits on nonstrategic nuclear weapons in talks on a subsequent agreement. In April 2009, when Presidents Obama and Medvedev outlined their approach to nuclear arms control, they indicated that arms control would be a step-by-step process, with a replacement for the 1991 START Treaty coming first, but a more comprehensive treaty that might include deeper cuts in all types of warheads, including nonstrategic nuclear weapons, following in the future.", "Negotiations on a treaty to limit nonstrategic nuclear weapons could be complex, difficult, and very time-consuming. Given the large disparity in the numbers of U.S. and Russian nonstrategic nuclear weapons, and given the different roles these weapons play in U.S. and Russian security strategy, it may be difficult to craft an agreement that not only reduces the numbers of weapons in an equitable way but also addresses the security concerns addressed by the retention of these weapons. A treaty that imposed an equal ceiling on each sides' numbers of deployed nonstrategic weapons might appear equitable, but it would require sharp reductions in Russia's forces with little impact on U.S. forces. A treaty that required each side to reduce its forces by an equal percentage would have a similar result, requiring far deeper reductions on Russia's part. ", "Even if the United States and Russia could agree on the depth of reductions to impose on these weapons, they may not be able to agree on which weapons would fall under the limit. For the United States, it may be relatively straightforward to identify the affected weapons\u2014the limit could apply to the gravity bombs deployed in Europe and any spare weapons that may be stored in the United States. Russia, however, has many different types of nonstrategic nuclear weapons, including some that could be deployed on naval vessels, some that would be delivered by naval aircraft, and some that would be deployed with ground forces. Moreover, while many of these weapons might be deployed with units in western Russia, near Europe, others are located to the east, and would deploy with troops in a possible conflict with China.", "To address these problems, some analysts have suggested that the limits in the next arms control treaty cover all types of nuclear warheads\u2014warheads deployed on strategic-range delivery vehicles, warheads deployed with tactical-range delivery vehicles, and nondeployed warheads held in storage. The Obama Administration reportedly considered this approach, and studied the contours of a treaty that would limit strategic, nonstrategic, and nondeployed nuclear warheads. This type of agreement would allow each side to determine, for itself, the size and mix of its forces, within the limits on total warheads.", "While this type of comprehensive agreement may seem to provide a solution to the imbalance between U.S. and Russian nonstrategic nuclear weapons, it is not clear that, once the parties move beyond limits on just their deployed strategic weapons, they will be able to limit the scope of the treaty in this way. Each side has its own list of weapons that it finds threatening; each may seek to include these in a more comprehensive agreement. For example, Russian officials, including the Foreign Minister, Sergei Lavrov, have stated that a future arms control agreement should also include limits on missile defenses, strategic-range weapons that carry conventional warheads, and possibly weapons in space. Minister Lavrov stated, specifically, that ", "it is impossible to discuss only one aspect of the problem at strategic parity and stability negotiations held in the modern world. It is impossible to ignore such aspects as non-nuclear strategic armaments, on which the United States is actively working, plans to deploy armaments in space, which we oppose actively, the wish to build global missile defense systems, and the imbalance of conventional armaments. It is possible to hold further negotiations only with due account of all these factors\u2026.\"", "The United States has no interest in including these types of limits in the next agreement. Hence, it is not clear that the two sides would be able to agree on which issues and what weapons systems to include in a next round of arms control negotiations.", "Moreover, although President Medvedev agreed, in April 2009, that the United States and Russia should pursue more arms control reductions after completing New START, Russia may have little interest in limits on nonstrategic nuclear weapons. Russian officials have denied that their weapons pose a safety and security problem, and they still consider these weapons essential to Russian military strategy and national security."], "subsections": []}, {"section_title": "Prospects for Arms Control", "paragraphs": ["Most analysts agree that the United States and Russia are unlikely to make any progress on either limits or transparency measures related to nonstrategic nuclear weapons in the current environment. Russia's annexation of Crimea, aggression against Ukraine, and violation of the INF Treaty have altered the security atmosphere in Europe and quieted calls among officials in NATO nations for reductions in these weapons. According to Obama Administration officials, the U.S. offer for further negotiations remained on the table through the end of the Administration, but \"progress requires a willing partner and a conducive strategic environment.\" ", "The Trump Administration reiterated this point in the 2018 Nuclear Posture Review, noting that \"progress in arms control is not an end in and of itself, and depends on the security environment and the participation of willing partners.\" It emphasized, further, that neither of these conditions exist today, in light of Russia's violation of numerous arms control agreements and its efforts to \"change borders and overturn existing norms\" in Crimea and eastern Ukraine. ", "Nevertheless, the 2018 NPR suggests the contours of a possible future arms control agreement between the United States and Russia. When discussing the need for a new sea-launched cruise missile, the NPR notes that this missile would not only provide a \"non-strategic regional presence\" and \"an assured response capability\" to bolster the U.S. commitment to its allies' defense, but would also provide \"an INF-Treaty compliant response to Russia's continuing Treaty violation.\" Moreover, it seems to view the SLCM as a bargaining chip for a future negotiation:", "If Russia returns to compliance with its arms control obligations, reduces its non-strategic nuclear arsenal, and corrects its other destabilizing behaviors, the United States may reconsider the pursuit of a SLCM. Indeed, U.S. pursuit of a SLCM may provide the necessary incentive for Russia to negotiate seriously a reduction of its non-strategic nuclear weapons, just as the prior Western deployment of intermediate-range nuclear forces in Europe led to the 1987 INF Treaty. As then Secretary of State George P. Shultz stated, \"If the West did not deploy Pershing II and cruise missiles, there would be no incentive for the Soviets to negotiate seriously for nuclear weapons reductions. ", "This last sentence is a reference to NATO's 1979 Dual Track decision, which paved the way for the negotiation of the INF Treaty. In the late 1970s, the Soviet Union began to deploy a new intermediate-range ballistic missile\u2014known as the SS-20\u2014that threatened to upset stability in Europe and raised questions about the cohesion of NATO. As a result, in December 1979, NATO adopted a \"dual-track\" decision that sought to link the modernization of U.S. nuclear weapons in Europe with an effort to spur the Soviets to negotiate reductions in INF systems. ", "In the first track, the United States and its NATO partners agreed to replace aging medium-range Pershing I ballistic missiles with a more accurate and longer-range Pershing II (P-II) while adding new ground-launched cruise missiles. In the second track, NATO agreed that the United States should attempt to negotiate limits with the Soviet Union on intermediate-range nuclear systems. The allies recognized that the Soviet Union was unlikely to negotiate limits on its missiles unless it faced a similar threat from intermediate-range systems based in Western Europe. Initially, the United States sought an agreement that would impose equal limits on both sides' intermediate-range missiles, but after several years of negotiations and significant changes in the global security environment, both nations agreed to a global ban on all land-based intermediate-range ballistic and cruise missiles. ", "This agreement serves as an imperfect model for the offer contained in the 2018 NPR. The \"dual-track\" decision envisioned limits on similar systems\u2014U.S. and Soviet intermediate-range missiles. The NPR offers to forgo the new U.S. SLCM in exchange for a longer list of Russian weapons and behaviors\u2014it indicates that the United States may reconsider the SLCM program if Russia \"returns to compliance with its arms control obligations, reduces its non-strategic nuclear arsenal, and corrects its other destabilizing behaviors.\" In addition, the 1979 dual track decision sought to deploy new U.S. missiles in Europe, to balance an emerging Soviet threat to Europe. A U.S. offer to forgo the SLCM in negotiations with Russia could be inconsistent with the NPR's insistence that this missile is critical to extended deterrence in Asia. Even if the United States sought to limit the agreement to missiles deployed in Europe, Russia might object by noting that the United States could easily move sea-launched cruise missiles deployed in Asia to locations closer to Russia (the INF Treaty addressed the problem of mobility by adopting a global ban on these missiles). Finally, as the United States and Soviet Union discovered when they negotiated the INF Treaty, the complexity of distinguishing between nuclear and conventional cruise missiles could necessitate a ban on all cruise missiles of a designated range. This would likely be inconsistent with the U.S. reliance on conventional SLCMs in conflicts around the world. ", "Consequently, even with the potential opening for arms control in the 2018 NPR, it seems unlikely that the United States and Russia will pursue or conclude an agreement limiting nonstrategic nuclear weapons in the near future."], "subsections": []}]}]}]}}
{"id": "R45595", "title": "Laws Affecting Students with Disabilities: Preschool Through Postsecondary Education", "released_date": "2019-03-13T00:00:00", "summary": ["The Individuals with Disabilities Education Act (IDEA), Section 504 of the Rehabilitation Act (Section 504), and the Americans with Disabilities Act (ADA) each play a significant part in federal efforts to support the education of individuals with disabilities. These statutory frameworks, while overlapping, differ in scope and in their application to students with disabilities. As a result, when students with disabilities transition between levels of schooling, the accommodations and services they must be provided under federal law may change. For example, while the IDEA, the ADA, and Section 504 potentially apply to children with disabilities from preschool through 12th grade (P-12), only the ADA and Section 504 apply to students in an institution of higher education. More generally, application of the IDEA, Section 504, and the ADA to students with disabilities is determined by (1) the definition of \"disability\" employed by each framework; (2) the mechanisms employed under each law to determine whether a student has a qualifying disability; and (3) the adaptations, accommodations, and services that must be provided to students with disabilities under each law.", "Individuals with Disabilities Education Act (IDEA)", "The IDEA, as amended, authorizes federal grants to states to support the education of children with disabilities. The act requires that states, as a condition for receiving funds, provide students with disabilities a range of substantive and procedural protections. For example, states and local education agencies (LEAs) must (1) identify, locate, and evaluate all children with disabilities residing in the state, regardless of the severity of their disability, to determine which children are eligible for special education and related services; (2) convene a team, which includes the parents of each eligible child with a disability, to develop an individual education program (IEP) spelling out the specific special education and related services to be provided to that child to ensure a \"free appropriate public education\" (FAPE); and (3) provide procedural safeguards to children with disabilities and their parents, including a right to an administrative hearing to challenge determinations and placements, with the ability to appeal the ruling to federal district court. Of the three legal frameworks discussed in this report, only the IDEA is focused squarely on educational matters, and its statutory provisions and implementing regulations specifically detail the rights of children with disabilities and their families in U.S. public schools. Of the three laws examined here, the IDEA is also the only one that fixes an age limit, with its substantive and procedural guarantees applying to persons with disabilities from birth until they reach 21 years or exit high school, if earlier.", "Section 504 of the Rehabilitation Act of 1973", "Section 504 is an antidiscrimination provision within a broader federal law providing rehabilitation services to people with disabilities. Section 504 protects individuals from disability discrimination in programs and activities that receive federal financial assistance, including elementary and secondary schools, as well as many colleges and universities. While Section 504 is terse in describing covered entities' obligations, the statute's implementing regulations, including those promulgated by the U.S. Department of Education (ED) applicable in the educational context, are extensive. For example, Section 504 and its implementing regulations require all schools receiving federal funds to make their application forms and course materials accessible to people with disabilities.", "Americans with Disabilities Act of 1990 (ADA)", "Enacted in 1990, the ADA provides broad nondiscrimination protection for individuals with disabilities across a range of institutional contexts, both public and private, including employment, public services, transportation, telecommunications, public accommodations, and services operated by private entities. In an educational context, the ADA and implementing regulations effectively require both public schools and many P-12 private schools to ensure that students with disabilities are not excluded, denied services, segregated, or otherwise treated differently than other individuals because of their disability, unless the school can demonstrate that taking those steps would fundamentally alter the nature of the school's program or cause an undue financial burden. The ADA's statutory provisions and implementing regulations outline the types of modifications that must be made for individuals with disabilities, including the removal of barriers, alterations to new and existing buildings, accessible seating in assembly areas, and accessible examinations and course materials."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Several federal laws address the services and protections received by students with disabilities. The application of these laws may change depending upon the student's situation, and most common ly at times of transition\u2014whether the student moves to a new school district or state, or between preschool and kindergarten, elementary school and junior high, junior high and high school, or high school and postsecondary education. Often the biggest transition for students with disabilities and their families is from the supports and services provided in the preschool-12th grade (P-12) public education system to a college or university.", "At the P-12 level, three main federal laws impact students with disabilities: the Individuals with Disabilities Education Act (IDEA), Section 504 of the Rehabilitation Act of 1973 (Section 504), and the Americans with Disabilities Act (ADA). For students receiving special education under the IDEA or receiving accommodations and services under Section 504, transitioning from the P-12 public education system to an institution of higher education (IHE) may affect how the school assesses their disability, their eligibility for receiving accommodations or services, and the supports, services, and accommodations available to them. This report examines those laws' impact on students with disabilities in three key respects: how they define disability; how they determine eligibility for services and protections; and how they ensure students with disabilities receive the accommodations and services they need to participate in all levels of education."], "subsections": []}, {"section_title": "Laws Protecting Students with Disabilities", "paragraphs": [], "subsections": [{"section_title": "Section 504 of the Rehabilitation Act of 1973", "paragraphs": ["In 1973, following two major federal district court decisions concluding that children with disabilities have the same right of access to public education as other children, Congress enacted the first of a series of civil rights statutes protecting individuals with disabilities: Section 504 of the Rehabilitation Act of 1973. The Rehabilitation Act of 1973 provided a statutory basis for the Rehabilitation Services Administration and funding for projects and studies supporting the employment of people with disabilities. Section 504 was the last section of the Act and the only section concerned with the civil rights of people with disabilities. That provision accordingly provides broad antidiscrimination protections for the disabled, prohibiting any \"program or activity\" that receives federal financial assistance from excluding \"otherwise qualified individual[s] with a disability\" from participating in, or benefiting from, those programs. Given the reach of federal funding, Section 504's guarantee of nondiscrimination stretches quite far, covering not just the P-12 public schools but also postsecondary education, employment, and access to public facilities as well. And because of that breadth, the act remains a key legal protection for students with disabilities today.", "Students who receive accommodations under Section 504 in high school may have an easier time transitioning to a postsecondary educational environment because the basic protections under Section 504 remain the same regardless of the age or education level of the person with a disability. As explained later in this report, the U.S. Department of Education (ED) has developed separate Section 504 regulations covering these different levels of education, including Preschool, Elementary, and Secondary Education (Subpart D) and Postsecondary Education (Subpart E).", "ED's Office of Civil Rights (OCR) has a primary role in enforcing Section 504 in the education context, affecting a significant number of students. In the 2013-2014 school year (SY), OCR reported that nearly 1 million public school students received some sort of service under Section 504. And at the postsecondary level, where students with disabilities receive protection under both Section 504 and the ADA, in SY 2015-2016, approximately 19.5% of undergraduates and 12.0% of post-baccalaureate students reported having a disability."], "subsections": []}, {"section_title": "The Individuals with Disabilities Education Act", "paragraphs": ["Two years after enactment of the Rehabilitation Act, Congress passed the Education for All Handicapped Children Act, later renamed the IDEA, which focused directly on children with disabilities' access to education. At the time of the IDEA's adoption, Congress found that more than half of all children with disabilities were not receiving appropriate educational services and that 1 million children with disabilities were excluded entirely from the public school system. Congress determined, in addition, that many children participating in public school programs had undiagnosed disabilities that harmed their educational progress. To address these findings, Congress laid down a clear mandate to any state seeking funds under the act: in order to receive those funds, the state must \"identify and evaluate\" all children with disabilities residing \"within [their] borders\" to ensure those children receive a free appropriate public education.", "The IDEA has been comprehensively reauthorized five times since its original enactment in 1975, most recently in 2004. ED's Office of Special Education Programs in the Office of Special Education and Rehabilitative Services administers the act, and it remains the main federal statute governing special education for children from birth through age 21. The IDEA does so by supplementing state and local funding to pay for some of the additional or excess costs of educating children with disabilities. Of particular importance is Part B of the act, which protects the right of individuals with disabilities, from age 3 through 21, to a \"free appropriate public education\" (FAPE). In SY2017-2018, approximately 7 million children ages 3 through 21 received special education and related services under Part B of the IDEA . Students served under Part B of the IDEA represent about 13.6% of all P-12 public school students."], "subsections": []}, {"section_title": "The Americans with Disabilities Act of 1990", "paragraphs": ["The ADA, as amended, has been described as \"the most sweeping anti-discrimination measure since the Civil Rights Act of 1964.\" Its purpose, as explained in the act itself, is \"to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities.\" The ADA therefore provides broad nondiscrimination protection for individuals with disabilities, applicable across many settings. Title II of the act, in particular, prohibits any \"public entity,\" such as a public school, from discriminating based on disability, while Title III similarly forbids discrimination by \"public accommodations,\" including nonparochial private schools.", "The ADA Amendments Act adopted in 2008 and made effective January 1, 2009, broadened the scope of the ADA's definition of disabilities, and, through conforming amendments, Section 504's definition as well. The ADA Amendments Act extends the ADA and Section 504 coverage to more clearly encompass all public, and some private, P-12 schools and nearly all postsecondary IHEs. According to the U.S. Census Bureau, 12.7% of the civilian noninstitutionalized population were reported to have a disability in 2017 (about 40.7 million people), including 4.2% of all children under age 18 (roughly 3.1 million) and 6.4% of all adults ages 18 to 34 (about 4.7 million). These individuals are covered by the broad protections of the ADA when accessing most services and facilities, including secondary and postsecondary educational institutions."], "subsections": []}]}, {"section_title": "Defining \"Disability\"", "paragraphs": [], "subsections": [{"section_title": "The IDEA's Categorical Definition of \"Disability\"", "paragraphs": ["The IDEA incorporates a categorical definition of \"disability,\" identifying a covered \"child with a disability\" as any \"child\" having at least one of 13 conditions specifically categorized in the act. Thus, to qualify for services under the IDEA a student of qualifying age must satisfy two requirements. First, the student must have a documented disability that falls in one of the categories enumerated in the IDEA, as further specified by ED's implementing regulation. And second, as a result of that disability the student must require \"special education and related services\" in order to benefit from public education. Only if the student meets both criteria will he or she be eligible to receive the principal benefit of the act: specially designed instruction or special education in which the content or the delivery of the instruction is adapted to the child's individual needs, detailed in a plan known as an individualized education program (IEP). Consequently, a child who has a disability not recognized under the act, or has a disability that may require related services but not special education, has no right under the IDEA to the special education and related services provided through an IEP.", "Each IDEA disability category is broadly defined in ED's regulations implementing the act. And that breadth has given states some room to adopt more specific requirements for these categories, so long as those further requirements do not exclude children otherwise eligible for services under the act. Thus, for example, while the IDEA expressly covers a child suffering from some \"other health impairments\" (OHI), the act itself does not specify the sort of disorders that might count as such. In its IDEA regulations, ED has provided a complex definition of that statutory OHI category, listing a series of examples of disorders that may qualify under it. And some states, in their own implementing regulations, have further elaborated on ED's definition, particularly its condition that, to qualify under the IDEA, an OHI must \"adversely affect[] a child's educational performance.\" Delaware, for instance, lists five broad requirements under \"Eligibility Criteria for Other Health Impairment,\" one of which specifically outlines criteria for determining whether children with attention deficit disorder (ADD) and attention deficit hyperactivity disorder (ADHD) have an OHI. When a child's eligibility under the IDEA is due to ADD or ADHD, Delaware's regulation requires evaluators to examine the child according to an additional six factors, and within those six factors 18 symptoms, to determine whether the child's ADD or ADHD qualifies as an OHI. Other states, meanwhile, impose no criteria beyond those found in ED's IDEA regulations for assessing whether a child has an OHI."], "subsections": []}, {"section_title": "Section 504 and the ADA's Functional Definition of \"Disability\"", "paragraphs": ["Sections 504 and the ADA draw on a common definition of \"disability,\" one that is substantially broader than the categorical definition found in the IDEA. Under both laws, an \"individual with a disability\" includes \"any person who (i) has a physical or mental impairment which substantially limits one or more major life activities, (ii) has a record of such an impairment, or (iii) is regarded as having such an impairment.\" This definition, unlike the IDEA's, is not restricted to the educational context. And also unlike the definition used in IDEA, the definition found in Section 504 and the ADA is broadly functional, protecting individuals with any \"impairment\" affecting a bodily or intellectual function\u2014like seeing, hearing, walking, or thinking. The conditions covered by Section 504 and the ADA are therefore not confined to a particular list of \"disability\" categories\u2014\"autism,\" for example, or \"specific learning disability\"\u2014as they are under the IDEA. As a result, an impairment qualifying as a \"disability\" under the IDEA will generally also be covered by Section 504 and the ADA, though not the reverse.", "Although the ADA Amendments Act maintains essentially the same statutory language as the original ADA, the subsequent act introduced several new \"rules of construction\" clarifying Congress's intent for the ADA's crucial term\u2014\"disability\" \u2014to be construed broadly. These rules of construction regarding the definition of disability\u2014applicable to both the ADA and Section 504\u2014provide that:", "the definition of disability shall be construed in favor of broad coverage to the maximum extent permitted by the terms of the act;", "the term \"substantially limits\" shall be interpreted consistently with the findings and purposes of the Amendments Act;", "an impairment that substantially limits one major life activity need not limit other major life activities to be considered a disability;", "an impairment that is episodic or in remission is a disability if it would have substantially limited a major life activity when active; and", "the determination of whether an impairment substantially limits a major life activity shall be made without regard to the ameliorative effects of mitigating measures, except that the ameliorative effects of ordinary eyeglasses or contact lenses shall be considered.", "The ADA Amendments Act also included a conforming amendment to the Rehabilitation Act of 1973, applying these more generous rules of construction to Section 504. ED's OCR consequently enforces the regulations implementing both Section 504 and Title II of the ADA consistently with the ADA Amendments Act."], "subsections": []}]}, {"section_title": "Preschool Through Secondary Education Versus Postsecondary Education", "paragraphs": ["The IDEA covers all children with disabilities residing in states that receive financial assistance under the act. It does not extend, however, to students with disabilities in college or other postsecondary education and training programs. But Section 504 does, and ED has issued separate regulations specifically elaborating that provision's application to preschool, elementary, and secondary education, as well as to postsecondary education. The ADA also does not directly address the provisions of educational services; it instead prohibits discrimination against individuals with disabilities across many contexts, including by a \"public entity\" like a public school. The following sections of this report identify key provisions in the IDEA, Section 504, and the ADA, explain how they apply in particular situations, and analyze how they differ between students in P-12 and postsecondary education settings when more than one law applies. Table 1 also summarizes and compares key characteristics of the IDEA, Section 504, and the ADA."], "subsections": [{"section_title": "Evaluation and Placement", "paragraphs": [], "subsections": [{"section_title": "Evaluations in Preschool, Elementary, and Secondary Education", "paragraphs": [], "subsections": [{"section_title": "Child Find", "paragraphs": ["The IDEA requires each state that receives funds under the act to have in place policies and procedures to identify, locate, and evaluate all children residing in the state who may have a disability requiring special education and related services. These policies and procedures\u2014known as \"Child Find\" \u2014have broad application, covering all children ages 3 to 21 through their time in high school, including those who are homeless or wards of the state, attend private schools, or, according to IDEA's regulations, are highly mobile, like migrant children.", "The regulations implementing Section 504 contain similar provisions requiring recipients of federal money operating public elementary and secondary schools \"to identify and locate every qualified handicapped person residing in the recipient's jurisdiction who is not receiving a public education.\" Section 504's regulations also require LEAs to evaluate students individually before classifying them as having a disability or providing them with accommodations, special education, or related services. But these responsibilities apply only to students in public elementary or secondary schools. Students protected by Section 504 in colleges and universities are responsible for providing their IHEs with documentation of their disabilities and for working with the IHE's disability support services personnel to arrange any accommodations they may need. And the same is true under the ADA."], "subsections": []}, {"section_title": "Evaluation", "paragraphs": ["A child who has been identified as having (or possibly having) a disability must be evaluated by his or her LEA before receiving special education and related services under the IDEA or Section 504. The ADA, by contrast, contains no such requirement. Under the IDEA, individuals may qualify for an IEP only if they have been determined to have a qualifying disability for which they need special education and/or related services to benefit from public education. But a child who has a disability that does not adversely affect his or her educational performance\u2014as required to be eligible for an IEP under several IDEA disability categories \u2014may still qualify for a plan under Section 504.", "Under the IDEA, either a child's parent or the LEA may request an initial evaluation. In general, the LEA must obtain informed consent from a child's parent before conducting an initial evaluation. That consent, however, does not transfer\u2014parental consent to an evaluation, that is, does not imply consent to special education and related services. In addition, the initial evaluation must take place within 60 days of receiving parental consent or within an alternative time frame established by the state.", "Section 504, unlike the IDEA, does not explicitly call either for parental consent to an evaluation or for an evaluation to take place within a specific period after being requested. ED's OCR has nevertheless interpreted Section 504 to require LEAs to obtain parental consent to an initial evaluation. But under Section 504, like under the IDEA, a parent's refusal of an evaluation may not be the final word. OCR has construed Section 504 to allow an LEA, whenever it \"suspects a student needs or is believed to need special instruction and parental consent is withheld,\" to \"use due process hearing procedures to seek to override the parents' denial of consent for an initial evaluation.\"", "In conducting an initial evaluation of a child suspected of having a disability, both the IDEA and Section 504 regulations require LEAs to use valid and reliable assessment tools tailored to assess a child's specific areas of educational need. The IDEA emphasizes the importance of using multiple measures of assessing whether children are eligible for services under the statute, requiring LEAs to \"use a variety of assessment tools and strategies to gather relevant functional, developmental, and academic information, including information provided by the parent.\" The IDEA also requires that LEAs use multiple measures or assessments to determine whether a child is \"a child with a disability\" under the act, as well as to determine whether an educational program is appropriate. The Section 504 regulations, for their part, also require LEAs \"to draw upon information from a variety of sources\" when interpreting evaluation data, \"including aptitude and achievement tests, teacher recommendations, and adaptive behavior.\" And the Section 504 regulations likewise \"establish procedures to ensure that information obtained from all relevant sources is documented and carefully considered.\"", "Assessments and other evaluation materials used to assess a child under the IDEA must be selected and administered to avoid discriminating on a racial or cultural basis. They must also be provided and administered in the language and form most likely to yield accurate information about what the child knows and can do academically, developmentally, and functionally. Section 504's regulations do not address children's native language or the possibility of racially or culturally discriminatory evaluation materials. However, they do include \"social or cultural background\" information as one of several sources LEAs should draw upon in interpreting evaluation data and in making placement decisions.", "After completing an evaluation for an IEP under the IDEA, the LEA must determine whether the child is a \"child with a disability\" under the act, and, if so, what his or her educational needs are, including the participation of qualified professionals and the child's parents. Section 504, by contrast, does not expressly require that a child's parents participate in placement decisions. Section 504 regulations instead provide only that placement decisions be made \"by a group of persons, including those knowledgeable about the child, the meaning of the evaluation data, and the placement options.\" ED's regulations under Section 504 do mandate, however, that LEAs have in place \"a system of procedural safeguards that includes notice, an opportunity for the parents or guardian of the person to examine relevant records, an impartial hearing with opportunity for participation by the person's parents or guardian and representation by counsel, and a review procedure.\""], "subsections": []}, {"section_title": "Reevaluations", "paragraphs": ["Under IDEA regulation, reevaluations are required if a child's teacher or parent makes a request or if the LEA determines that a child's educational and service needs, or functional performance warrant reevaluation. For example, a reevaluation might be warranted if a child's performance in school significantly improves, suggesting that the child no longer requires special education and related services, or if a child is not making progress toward the goals in his or her IEP, suggesting that changes are needed in the special education or related services the LEA is providing. A reevaluation may not be done more than once a year unless the parents and LEA agree, and must be done at least once every three years unless the parent and the LEA agree that a reevaluation is unnecessary. In general, the child's parent(s) must consent to a reevaluation, as well as to the initial evaluation. Before any such reevaluation, an LEA may not change a child's eligibility for educational services under the IDEA, unless the child graduates from high school with a regular diploma or reaches the age at which state law no longer provides a FAPE.", "The briefer Section 504 regulations simply require LEAs to establish procedures for \"the periodic reevaluation of students who have been provided special education and related services.\" Reevaluation procedures consistent with the IDEA also satisfy this regulatory requirement."], "subsections": []}]}, {"section_title": "Evaluations and Reevaluations in Postsecondary Education", "paragraphs": ["As noted, at the postsecondary level educational institutions have no responsibility for evaluating students for a disability. However, if a student requests modifications, accommodations, or auxiliary aids or services because of a disability, IHEs are allowed, though not required, to request that the student provide \"reasonable\" documentation of his or her disability and need for the requested accommodations or services.", "Before the ADA Amendments Act in 2008, which clarified Congress's intent that \"disability\" under the ADA and Section 504 be construed broadly, there had been significant confusion among IHEs about what a student could be required to use to document a disability. Different IHEs developed their own requirements for the evaluation/reevaluation materials students needed to submit to establish a disability warranting accommodations and services. Some universities required students to produce \"recent\" documentation of an evaluation or reevaluation for a disability, while other schools, looking to the IDEA as a guide, instead required comprehensive evaluations that were no more than three years old. Requirements for \"recent\" documentation may apply to returning postsecondary students; students who had been served under Section 504 in high school; students who attended private schools that did not require or provide evaluations to determine students' disability status; and any postsecondary student with a disability whose disability had last been comprehensively evaluated in the ninth grade or earlier. Such students would need to be reevaluated at their own expense to prove that they were still a student with a disability, if they wanted to receive accommodations or supports at the postsecondary level.", "Prior to the passage of the ADA Amendments Act, several courts struck down triennial evaluation requirements used by colleges and universities, as well as requirements that students be regularly reevaluated for the presence of a disability even when they were permanently disabled and had sufficient (but not recent) proof of their disability status. And the ADA Amendments Act only reinforced the breadth of the ADA's and Section 504's protection, with its implementing regulations explaining that:", "The primary purpose of the ADA Amendments Act is to make it easier for people with disabilities to obtain protection under the ADA. Consistent with the ADA Amendments Act's purpose of reinstating a broad scope of protection under the ADA, the definition of \"disability\" in this part shall be construed broadly in favor of expansive coverage to the maximum extent permitted by the terms of the ADA. The primary object of attention in cases brought under the ADA should be whether entities covered under the ADA have complied with their obligations and whether discrimination has occurred, not whether the individual meets the definition of \"disability.\" The question of whether an individual meets the definition of \"disability\" under this part should not demand extensive analysis.", "Also since the passage of the ADA Amendments Act, IHEs and professional organizations have prepared their own informal guidance for disability support services staff, professors, and anyone else responsible for confirming a student's disability and request for accommodations. Current guidance for IHEs tends to support the use of postsecondary students' past evaluations for special education services or accommodations under Section 504, or other information from external or third parties, as potentially useful supporting documentation but not necessarily required for determining a disability."], "subsections": []}, {"section_title": "Placements in Preschool, Elementary and Secondary Education", "paragraphs": [], "subsections": [{"section_title": "Public School Placements", "paragraphs": ["Determining an appropriate public school placement for a child with a disability calls for similar considerations under both the IDEA and Section 504. However, as with many other aspects of P-12 education for children with disabilities discussed in this report, there are more specific provisions on placement decisions in the IDEA than in Section 504. For example, the IDEA requires that a placement decision for a child with a disability be determined at least annually; be based on the child's IEP; and be made by a group of people who are knowledgeable about the child, the meaning of the evaluation data, and the placement options, including the child's parents. In comparison, Section 504 does not require placement decisions to be determined at any particular time interval. Nor does it require those decisions to be based on a child's educational plan under Section 504 or include specific persons as a part of the deliberations\u2014parents included.", "In other aspects of their placement provisions, the IDEA and Section 504 are more alike. For example, like the IDEA, Section 504 regulation requires that a child with a disability be placed in the regular educational environment to the maximum extent appropriate to the needs of the child. Under the IDEA and its implementing regulations, when determining a child's placement, states must have in effect policies and procedures to ensure that LEAs are providing a free appropriate public education in the least restrictive environment (LRE)\u2014that children with disabilities, in other words, receive their education alongside children who do not have disabilities, to the maximum extent appropriate. Section 504's regulations do not use the same terminology as the IDEA\u2014there is no express mention of an LRE, for instance\u2014but both require, in academic and nonacademic settings (e.g., lunch, recess), that children with disabilities be educated with their nondisabled peers \"to the maximum extent appropriate to [their] needs.\"", "Under the IDEA, LEAs \"must ensure that a continuum of alternative placements [are] available to meet children's needs for special education and related services.\" This includes \"instruction in regular classes,\" with the provision of supplementary services when appropriate, as well as \"special classes, special schools, home instruction, and instruction in hospitals and institutions.\" In contrast to IDEA's focus on a continuum of services to enable an appropriate placement for each child with a disability, Section 504's main concern, as a civil-rights law, is to ensure that children with disabilities are not discriminated against in their placements, so that children with disabilities can participate whenever possible in academic and nonacademic activities alongside their peers without disabilities. In cases where a child with a disability does need to attend a facility specifically for children with disabilities, the LEA must ensure that the facility and the services and activities it provides are \"comparable to the LEA's other facilities, services, and activities.\"", "Unlike the IDEA, the Section 504 regulations do not mandate the use of an IEP, though an IEP that satisfies the IDEA will also satisfy Section 504. And the regulations implementing Section 504, unlike those under the IDEA, do not detail how a student's educational plan developed under Section 504\u2014often called a \"504 plan\"\u2014must be created. Thus, for example, while the IDEA specifies the members who must be invited to participate in a child's IEP team including the child's parents, no similar requirement appears in Section 504 or its regulations.", "In addition, any accommodations, special education, and related services described in a student's IEP or 504 plan must be implemented in all of the student's classes, whether they are special education classes, regular education classes, or accelerated classes. For example, ED has determined that denying students with disabilities access to accelerated programs such as Advanced Placement and International Baccalaureate classes violates Section 504 regulations as well as the regulations implementing the IDEA. Even though schools may have eligibility requirements for such courses, ED has concluded that both sets of regulations make it \"unlawful to deny a student with a disability admission to an accelerated class or program solely because of that student's need for special education or related aids and services.\""], "subsections": []}, {"section_title": "Private School Placements", "paragraphs": ["Because the IDEA is designed to improve the education of all children with qualifying disabilities, the act also provides benefits and services to eligible children enrolled by their parents in private school. As a result, the IDEA as well as ED's implementing regulations each have extensive provisions addressing children with disabilities who attend private schools. Those provisions range from funding conditions to LEAs' and State Education Agencies' (SEAs') responsibilities under Child Find to the procedural safeguards protecting families of children with disabilities in private schools. Most of the IDEA's provisions on private school placements, however, fall into two broad categories: those related to children placed in or referred to private schools by public agencies, and those related to children enrolled in private schools by their parents. Together, these provisions outline the various procedural, financial, and educational responsibilities of SEAs, LEAs, private schools, and parents of children with disabilities in private schools, depending on who decided to place the child in private school.", "In contrast, the Section 504 regulations addressing students with disabilities in private schools do not address SEAs, LEAs, or parents of children with disabilities. They instead outline general responsibilities toward students with disabilities that are incumbent on any private educational institution receiving federal financial assistance. Thus, under Section 504 regulations, a private elementary or secondary school that receives federal funds \"may not exclude a student with a disability if the student can, with minor adjustments, be provided an appropriate education within that institution's program or activity.\" Nor may a recipient of federal funds charge more to educate students with disabilities than those without disabilities, according to ED's Section 504 regulations, \"except to the extent that any additional charge is justified by a substantial increase in cost to the federal funding recipient.\""], "subsections": []}]}, {"section_title": "Postsecondary Education: Access and Admissions", "paragraphs": ["The IDEA requires IEP teams to include postsecondary transition goals and services in each student's IEP beginning no later than when students are 16 years old. Transition goals and services are individualized. For a student planning to pursue postsecondary education, transition services could include helping the student select colleges to apply to or complete applications; obtain accommodations, such as extended time on standardized college placement tests; practice self-advocacy skills; or any other services that the IEP team agrees would help the student prepare for postsecondary education. However, no matter what transition services students with disabilities receive in high school, those transition services will end once they exit the P-12 public school system and enter an IHE.", "At the postsecondary level, Section 504 and the ADA require IHEs to provide broad nondiscrimination protection to students who have a disability or who are regarded as having one. However, Section 504 and the ADA do not require IHEs to seek out students with disabilities to provide them with these protections, to evaluate students who are suspected of having a disability, or to arrange proactively for accommodations for students who had been evaluated and found eligible for services under IDEA, Section 504, or the ADA. At the postsecondary level, students must self-identify as having a disability, provide appropriate documentation of their disability, and arrange with campus disability support services for any accommodations and services to which they may be entitled.", "Section 504 and the ADA protect students applying for postsecondary education from discrimination in two basic ways: (1) in the eligibility requirements and admissions policies and procedures adopted by those institutions, and (2) following admission, in any activities, programs, aid, benefits, or services offered to students. ADA regulations also prohibit public accommodations, including IHEs, from imposing or applying eligibility criteria that screen out individuals with disabilities from fully and equally enjoying any goods, services, facilities, privileges, advantages, or accommodations they offer. Section 504 regulations likewise prohibit discrimination in admissions policies, including admissions testing. And the ADA regulations extend those prohibitions to private entities that \"offer[] examinations or courses related to applications, licensing, certification, or credentialing for secondary or postsecondary education, professional, or trade purposes,\" requiring them to provide those examinations or courses \"in a place and manner accessible to persons with disabilities or offer alternative accessible arrangements.\""], "subsections": []}]}, {"section_title": "Free Appropriate Public Education", "paragraphs": [], "subsections": [{"section_title": "FAPE in Preschool, Elementary and Secondary Education", "paragraphs": ["At the P-12 level, the IDEA, Section 504, and the ADA all guarantee students with disabilities a free appropriate public education. Those provisions, while similar, are not identical. Their differences largely have to do with details, but they generally can be traced to a more basic difference in statutory design: \"the IDEA guarantees individually tailored educational services, while Title II [of the ADA] and [Section] 504 promise nondiscriminatory access to public institutions.\" The IDEA's provisions addressing a FAPE are consequently much more detailed than their counterparts in Section 504, the same that apply, according to ED, under Title II of the ADA.", "These differences among the three statutory schemes have also led to some judicial disagreement about how to relate their violations: specifically, whether denying an eligible child the IDEA's procedural or substantive guarantees also amounts to disability discrimination, in violation of Section 504 (and, by extension, Title II of the ADA). At least some of the lower courts have found these violations to overlap, so that a valid claim under the IDEA will \"almost always\" support one under Section 504. Other courts, however, have taken the opposite view: for them, \"something more than a mere failure to provide the 'free appropriate education' required by [IDEA] must be shown\" before those courts will draw the discriminatory inference required for a violation of Section 504. What that something is also appears to vary somewhat by court, but several have insisted on a showing of at least \"bad faith or gross misjudgment . . . before a [Section]\u00a0504 violation [will] be made out\" in this context.", "Whatever its differences with Section 504, Part B of the IDEA nevertheless mandates that every recipient state provide a FAPE to all disabled children between the ages of 3 and 21 residing \"within its borders.\" \"An eligible child [therefore] acquires a 'substantive right' to such an education once a State accepts the IDEA's financial assistance,\" and the state's denial of that education therefore entitles eligible students to legal relief, whether in the form of an injunction for the improperly denied services or money damages.", "What a FAPE entails, and what demands it puts on a school district, will therefore vary from student to student. At a minimum, however, a FAPE consists of \"special education and related services\"\u2014\"specially designed instruction,\" in other words, that \"meets the unique needs of a child with a disability. And for that instruction to qualify as a FAPE, it must also be \"provided at public expense, under public supervision, and without charge; meet[] the standards of the [SEA];\" encompass preschool through secondary school; and conform to the student's IEP. A child's IEP accordingly \"serves as the 'primary vehicle' for providing [him or her] with the promised FAPE,\" by specifying the particular special education and related services that the LEA will provide to meet the child's needs.", "Apart from these procedural minimums, the substantive guarantee of a FAPE remains highly general. And that generality has provoked one of the most commonly litigated questions under the act: What does an \"appropriate\" public education require of an IEP? In an early decision under the act\u2014 Board of Education v. Rowley \u2014the U.S. Supreme Court appeared to set the bar fairly low. There the Court concluded that a school district could satisfy its responsibility of providing a FAPE so long as it had met two basic conditions. The school district had to have observed all of the IDEA's procedural rules, and it had to have provided an IEP \"reasonably calculated\" to \"confer some educational benefit\" on the child.", "But that latter condition\u2014requiring an IEP that conferred \"some educational benefit\"\u2014did little to resolve the basic ambiguity in the IDEA's guarantee of a FAPE: How much benefit would make an IEP \"appropriate\"? The lower federal courts were therefore left to fashion for themselves a more concrete standard for deciding whether an IEP had provided an eligible child with enough of a benefit to satisfy Rowley . On this point some courts took a minimalist view, requiring an IEP to provide at least some educational benefit \u2014a benefit, in other words, that is \"barely more than de minimis .\" Other courts, however, read Rowley as calling for much more, demanding evidence that an IEP had provided \"meaningful benefit to the child.\"", "Faced with this circuit split, in 2017, the Supreme Court took the opportunity in Endrew F. v. Douglas County School District to clarify just how much of a benefit an eligible child must receive through an IEP. The Court did so by returning to its Rowley standard: to provide an eligible child a FAPE under the IDEA, the Court explained, a school must \"offer an IEP reasonably calculated to enable a child to make progress appropriate in light of the child's circumstance.\" \u00a0Thus, \"for a child fully integrated in the regular classroom, an IEP typically should . . . be 'reasonably calculated to enable the child to achieve passing marks and advance from grade to grade.'\" The Court cautioned, however, that an appropriate measure of \"progress\" would depend on the child's circumstances\u2014and especially on the child's integration into the regular classroom. For children with disabilities not integrated into the regular classroom, an \"appropriate\" IEP therefore \"need not aim for grade-level advancement.\"", "Endrew F. clearly rejected, then, the more minimalist view of a FAPE. \"[T]he IDEA demands more\" from an IEP than the \"barely more than de minimis progress\" that the lower court upheld there. A child's IEP must instead be \"appropriately ambitious in light of his circumstances,\" so that that child, like every other, \"ha[s] the chance to meet challenging objectives\" despite his differing goals. Although the Court did not explicitly compare its refined standard in Endrew F. with the view from the other side of the circuit split\u2014that an appropriate IEP needed to confer a meaningful benefit on a child\u2014several lower courts have taken Endrew F. to vindicate that meaningful-benefit standard nonetheless. As the U.S. Court of Appeals for the First Circuit explained, Endrew F. appears to call for an IEP of exactly the same quality that that circuit had expected all along under Rowley . Thus, \"[a]t a bare minimum,\" that standard demands an IEP that includes \"the child's present level of educational attainment, the short-and long-term goals for his or her education, objective criteria with which to measure progress toward these goals, and the specific services to be offered.\" Whether the other circuits will also agree on that \"bare minimum\" remains to be seen."], "subsections": []}, {"section_title": "Postsecondary Education and a FAPE", "paragraphs": ["The right of students with disabilities to a FAPE under the IDEA has a still more definite limit: it does not extend to students in colleges, universities, or any other postsecondary education or training programs. Instead, the IDEA requires only that LEAs provide qualifying students with disabilities a FAPE until they exit high school\u2014whether by graduating, dropping out\u2014or until they surpass the maximum age for IDEA services, 21 years old. Section 504 and the ADA, on the other hand, have no such limit. They instead protect students of all ages from discrimination based on their disability, both during the admissions process and while enrolled as a student. Like the IDEA, however, Section 504's regulations ensure a FAPE only to students in P-12 public schools, a guarantee that ED has read to be \"incorporated in the general nondiscrimination provisions of the Title II regulation\" under the ADA as well."], "subsections": []}]}, {"section_title": "Adaptations, Accommodations, and Services", "paragraphs": [], "subsections": [{"section_title": "Preschool, Elementary, and Secondary Education", "paragraphs": ["To receive services under the IDEA, a child must be evaluated and found eligible for an IEP under one of the IDEA disability categories and must because of that disability require special education and related services to benefit from public education. In the IDEA, \"special education\" means instruction designed to meet the unique needs of a child with a disability, provided at no cost to the child's parents. It may include instruction conducted in both academic and nonacademic settings, including in the classroom, in the home, and in hospitals and institutions, as well as instruction in physical education. In comparison, \"related services\" are intended to assist a child with a disability to benefit from special education\u2014such as nursing services during the school day for a student who relies on a ventilator. Among the related services provided by the IDEA are speech-language pathology and audiology services; interpreting services, psychological services; physical and occupational therapy; recreation, including therapeutic recreation; social work services; counseling services; and, certain medical and school nurse services. ", "Besides special education and related services, under the IDEA and implementing regulations children with disabilities may receive supplementary aids and services and other supports in regular education classes, and in extracurricular and nonacademic settings, to enable them to be educated with nondisabled children to the maximum extent appropriate. The combination of special education, related services, and other supplementary aids and services a child receives is determined by the child's IEP team, taking into consideration the child's academic, developmental, and functional needs.", "As discussed, the IDEA defines a FAPE as special education and related services that are provided at public expense, meet the standards of the SEA, and conform to the student's IEP. As part of their right to a FAPE, each child receiving services under the IDEA must have an IEP stating the specific special education and related services the LEA will provide to meet his or her needs. Unlike the IDEA, an \"appropriate education\" under Section 504 regulation is defined as the provision of regular or special education and related aids and services designed to meet individual educational needs of children with disabilities as adequately as the needs of children without disabilities are met and that comply with procedural requirements. Note, however, that the IDEA specifically requires the provision of special education and related services, while Section 504 requires the provision of regular or special education and related aids and services. Thus, a child with a Section 504 plan may be served by a \"regular\" education with related aids and services, while under the IDEA a qualifying child must be provided \"special education.\""], "subsections": []}, {"section_title": "Postsecondary Education: Adaptations and Accommodations", "paragraphs": ["To receive accommodations or services under the ADA or Section 504 at the postsecondary level, students with disabilities must seek out the person or office at their IHEs responsible for arranging accommodations for students with disabilities, request the accommodations they need, and provide the documentation and/or personal history necessary to support their request. ED's regulations implementing Title II of the ADA include specific requirements to guide disability and accommodation services personnel at IHEs when considering such requests. Thus, for example, the regulations instruct IHEs,", "[w]hen considering requests for modifications, accommodations, or auxiliary aids or services, [to] give[] considerable weight to documentation of past modifications, accommodations, or auxiliary aids or services received in similar testing situations, as well as such modifications, accommodations, or related aids and services provided in response to an [IEP] provided under the [IDEA] or a . . . Section 504 Plan.", "Once students have provided adequate documentation of their disabilities to the appropriate person or office, Section 504 and Title II of the ADA protect them from discrimination based on their disabilities. Section 504's regulations on postsecondary education programs and activities elaborate on IHEs' responsibilities for adopting and maintaining nondiscriminatory practices toward students with disabilities, including through accommodations, modifications, or adaptations across many contexts, from course examinations to housing and counseling services to financial and employment assistance."], "subsections": []}]}]}]}}
{"id": "R45732", "title": "The Federal Tort Claims Act (FTCA): A Legal Overview", "released_date": "2019-05-21T00:00:00", "summary": ["A plaintiff injured by a defendant's wrongful act may file a tort lawsuit to recover money from that defendant. To name a particularly familiar example, a person who negligently causes a vehicular collision may be liable to the victim of that crash. By forcing people who wrongfully injure others to pay money to their victims, the tort system serves at least two functions: (1) deterring people from injuring others and (2) compensating those who are injured.", "Employees and officers of the federal government occasionally commit torts just like other members of the general public. For a substantial portion of this nation's history, however, plaintiffs injured by the tortious acts of a federal officer or employee were barred from filing lawsuits against the United States by \"sovereign immunity\"\u2014a legal doctrine that ordinarily prohibits private citizens from haling a sovereign state into court without its consent. Until the mid-20th century, a tort victim could obtain compensation from the United States only by persuading Congress to pass a private bill compensating him for his loss.", "Congress, deeming this state of affairs unacceptable, enacted the Federal Tort Claims Act (FTCA), which authorizes plaintiffs to obtain compensation from the United States for the torts of its employees. However, subjecting the federal government to tort liability not only creates a financial cost to the United States, it also creates a risk that government officials may inappropriately base their decisions not on socially desirable policy objectives, but rather on the desire to reduce the government's exposure to monetary damages. In an attempt to mitigate these potential negative effects of abrogating the government's immunity from liability and litigation, the FTCA limits the circumstances in which a plaintiff may pursue a tort lawsuit against the United States. For example, the FTCA contains several exceptions that categorically bar plaintiffs from recovering tort damages in certain categories of cases. Federal law also restricts the types and amount of damages a victorious plaintiff may recover in an FTCA suit. Additionally, a plaintiff may not initiate an FTCA lawsuit unless he has timely complied with a series of procedural requirements, such as providing the government an initial opportunity to evaluate the plaintiff's claim and decide whether to settle it before the case proceeds to federal court.", "Since Congress first enacted the FTCA, the federal courts have developed a robust body of judicial precedent interpreting the statute's contours. In recent years, however, the Supreme Court has expressed reluctance to reconsider its long-standing FTCA precedents, thereby leaving the task of further developing the FTCA to Congress. Some Members of Congress have accordingly proposed legislation to modify the FTCA in various respects, such as by broadening the circumstances in which a plaintiff may hold the United States liable for torts committed by government employees."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["A plaintiff injured by a defendant's wrongful conduct may file a tort lawsuit to recover money from that defendant. To name an especially familiar example of a tort, \"a person who causes a crash by negligently driving a vehicle is generally liable to the victim of that crash.\" By forcing people who wrongfully injure others to pay money to their victims, the tort system serves at least two functions: (1) \"deter[ring] people from injuring others\" and (2) \"compensat[ing] those who are injured.\"", "Employees and officers of the federal government occasionally commit torts just like other members of the general public. Until the mid-20th century, however, the principle of \"sovereign immunity\"\u2014a legal doctrine that bars private citizens from suing a sovereign government without its consent\u2014prohibited plaintiffs from suing the United States for the tortious actions of federal officers and employees. Thus, for a substantial portion of this nation's history, persons injured by torts committed by the federal government's agents were generally unable to obtain financial compensation through the judicial system.", "Congress, deeming this state of affairs unacceptable, ultimately enacted the Federal Tort Claims Act (FTCA) in 1946. The FTCA allows plaintiffs to file and prosecute certain types of tort lawsuits against the United States and thereby potentially recover financial compensation from the federal government. Some FTCA lawsuits are relatively mundane; for instance, a civilian may sue the United States to obtain compensation for injuries sustained as a result of minor accidents on federal property. Other FTCA cases, however, involve grave allegations of government misfeasance. For example, after naval officers allegedly sexually assaulted several women at the infamous Tailhook Convention in 1991, those women invoked the FTCA in an attempt to hold the United States liable for those officers' attacks. Family members of persons killed in the 1993 fire at the Branch Davidian compound in Waco likewise sued the United States under the FTCA, asserting that federal law enforcement agents committed negligent acts that resulted in the deaths of their relatives. Additionally, the U.S. Court of Appeals for the First Circuit affirmed an award of over $100 million against the United States in an FTCA case alleging that the Federal Bureau of Investigation (FBI) committed \"egregious government misconduct\" resulting in the wrongful incarceration of several men who were falsely accused of participating in a grisly gangland slaying. ", "Empowering plaintiffs to sue the United States can ensure that persons injured by federal employees receive compensation and justice. However, waiving the government's immunity from tort litigation comes at a significant cost: the U.S. Department of the Treasury's Bureau of the Fiscal Service (Bureau) reports that the United States spends hundreds of millions of dollars annually to pay tort claims under the FTCA, and the Department of Justice reports that it handles thousands of tort claims filed against the United States each year. Moreover, exposing the United States to tort liability arguably creates a risk that government officials may inappropriately base their decisions \"not on the relevant and applicable policy objectives that should be governing the execution of their authority,\" but rather on a desire to reduce the government's \"possible exposure to substantial civil liability.\"", "As explained in greater detail below, the FTCA attempts to balance these competing considerations by limiting the circumstances in which a plaintiff may successfully obtain a damages award against the United States. For example, the FTCA categorically bars plaintiffs from pursuing certain types of tort lawsuits against the United States. The FTCA also restricts the types and amount of monetary damages that a plaintiff may recover against the United States. Additionally, the FTCA requires plaintiffs to comply with an array of procedural requirements before filing suit. ", "This report provides an overview of the FTCA. It first discusses the events and policy concerns that led Congress to enact the FTCA, including the background principle of sovereign immunity. The report then explains the effect, scope, and operation of the FTCA's waiver of the United States' immunity from certain types of tort claims. In doing so, the report describes categorical exceptions to the government's waiver of sovereign immunity, statutory limitations on a plaintiff's ability to recover monetary damages under the FTCA, and the procedures that govern tort claims against the United States. The report concludes by discussing various legislative proposals to amend the FTCA."], "subsections": []}, {"section_title": "Background", "paragraphs": ["A person injured by the tortious activity of a federal employee generally has two potential targets that he might name as a defendant in a tort lawsuit: (1) the federal employee who committed the tort and (2) the federal government itself. In many cases, however, suing the employee is not a viable option. For one, as explained in greater detail below, Congress has opted to shield federal officers and employees from personal liability for torts committed within the scope of their employment. Moreover, even if Congress had not decided to insulate federal employees from tort liability, suing an individual is typically an unattractive option for litigants, as individual defendants may lack the financial resources to satisfy an award of monetary damages.", "For many litigants, the legal and practical unavailability of tort claims against federal employees makes suing the United States a more attractive option. Whereas a private defendant may lack the financial resources to satisfy a judgment rendered against him, the United States possesses sufficient financial resources to pay virtually any judgment that a court might enter against it. ", "A plaintiff suing the United States, however, may nonetheless encounter significant obstacles. In accordance with a long-standing legal doctrine known as \"sovereign immunity,\" a private plaintiff ordinarily may not file a lawsuit against a sovereign entity\u2014including the federal government\u2014unless that sovereign consents. For a substantial portion of this nation's history, the doctrine of sovereign immunity barred citizens injured by the torts of a federal officer or employee from initiating or prosecuting a lawsuit against the United States. Until 1946, \"the only practical recourse for citizens injured by the torts of federal employees was to ask Congress to enact private legislation affording them relief\" through \"private bills.\" ", "Some, however, criticized the public bill system. Not only did private bills impose \"a substantial burden on the time and attention of Congress,\" some members of the public became increasingly concerned \"that the private bill system was unjust and wrought with political favoritism.\" Thus, in 1946, Congress enacted the FTCA, which effectuated \"a limited waiver of [the federal government's] sovereign immunity\" from certain common law tort claims . With certain exceptions and caveats discussed throughout this report, the FTCA authorizes plaintiffs to bring civil lawsuits", "1. against the United States; 2. for money damages; 3. for injury to or loss of property, or personal injury or death; 4. caused by a federal employee's negligent or wrongful act or omission; 5. while acting within the scope of his office or employment; 6. under circumstances where the United States, if a private person, would be liable to the plaintiff in accordance with the law of the place where the act or omission occurred.", "Thus, not only does the FTCA \"free Congress from the burden of passing on petitions for private relief\" by \"transfer[ring] responsibility for deciding disputed tort claims from Congress to the courts,\" it also creates a mechanism to compensate victims of governmental wrongdoing. In addition to this compensatory purpose, the FTCA also aims to \"deter tortious conduct by federal personnel\" by rendering the United States liable for the torts of its agents, thereby incentivizing the government to carefully supervise its employees.", "Significantly, however, the FTCA does not itself create a new federal cause of action against the United States; rather, the FTCA waives the United States's sovereign immunity from certain types of claims that exist under state tort law . Thus, in most respects, \"the substantive law of the state where the tort occurred determines the liability of the United States\" in an FTCA case. In this way, the FTCA largely \"renders the Government liable in tort as a private individual would be under like circumstances.\" ", "Critically, however, \"although the FTCA's waiver of sovereign immunity is significant and extensive, it is not complete.\" To address \"concerns . . . about the integrity and solvency of the public fisc and the impact that extensive litigation might have on the ability of government officials to focus on and perform their other duties,\" the FTCA affords the United States \"important protections and benefits . . . not enjoyed by other tort defendants\" that are explained extensively below. Moreover, to limit the fora in which a plaintiff may permissibly litigate a tort suit against the United States, Congress vested the federal district courts (as well as a small number of territorial courts) with exclusive jurisdiction over FTCA cases. Furthermore, because Congress believed \"that juries would have difficulty viewing the United States as a defendant without being influenced by the fact that it has a deeper pocket than any other defendant,\" FTCA cases that proceed to trial are generally \"tried by the court without a jury.\" "], "subsections": []}, {"section_title": "The Preclusion of Individual Employee Tort Liability Under the FTCA", "paragraphs": ["Notably, the FTCA only authorizes tort lawsuits against the United States itself; it expressly shields individual federal employees from personal liability for torts that they commit within the scope of their employment. In other words, the FTCA \"makes the remedy against the United States under the FTCA exclusive\" of \"any other civil action or proceeding for money damages\" that might otherwise be available \"against the employee whose act or omission gave rise to the claim.\" Congress prohibited courts from holding federal employees personally liable for torts committed within the scope of their employment in order to avert what Congress perceived as \"an immediate crisis involving the prospect of personal liability and the threat of protracted personal tort litigation for the entire Federal workforce.\" Critically, the individual employee generally remains immune from tort liability for torts committed within the scope of his employment even if a provision of the FTCA forecloses the plaintiff from recovering monetary damages from the United States itself.", "As the following subsections of this report explain, determining whether the FTCA governs a particular tort case\u2014and, thus, whether the FTCA shields the individual who committed the alleged tort from personal liability\u2014requires the court to ask two threshold questions: (1) whether the individual who committed the tort was in fact a federal employee, and, if so, (2) whether that individual committed the tort within the scope of his office or employment."], "subsections": [{"section_title": "Employees and Independent Contractors", "paragraphs": ["First, the FTCA only waives the United States's sovereign immunity as to torts committed by an \" employee of the Government.\" Thus, if a plaintiff attempts to sue the United States for a tort committed by someone who is not a federal employee, the plaintiff's claim against the government will necessarily fail. For the purposes of the FTCA, the term \"employee of the government\" includes", "officers or employees of any federal agency; members of the military or naval forces of the United States; members of the National Guard while engaged in training or duty under certain provisions of federal law; persons acting on behalf of a federal agency in an official capacity; and officers and employees of a federal public defender organization (except when such employees are performing professional services in the course of providing representation to clients).", "As a result of this relatively broad definition of \"employee,\" the FTCA effectively waives the government's immunity from torts committed by certain categories of persons who might not ordinarily be considered \"employees\" as a matter of common parlance.", "Because the FTCA applies only to torts committed by federal employees, the FTCA provision shielding federal employees from personal tort liability does not protect nonemployees. Thus, with certain caveats discussed below, a plaintiff injured by the tortious action of a nonemployee may potentially be able to sue that nonemployee individually under ordinary principles of state tort law, even though he could not sue the United States under the FTCA.", "Notably, the United States commonly hires independent contractors to carry out its governmental objectives. The FTCA, however, explicitly excludes independent contractors from the statutory definition of \"employee.\" As a result, \"the government cannot be held liable\" under the FTCA \"for torts committed by its independent contractors\"; the plaintiff must instead attempt to seek compensation from the contractor itself. ", "Different courts consider different sets of factors when evaluating whether an alleged tortfeasor is an independent contractor as opposed to a government employee. Most courts, however, hold that \"the critical factor\" when assessing whether a defendant is an employee or an independent contractor for the purposes of the FTCA is whether the federal government possesses the authority \"to control the detailed physical performance of the contractor.\" \"[A] contractor can be said to be an employee or agent of the United States within the intendment of the [FTCA] only where the Government has the power under the contract to supervise a contractor's day-to-day operations and to control the detailed physical performance of the contractor.\" Thus, to illustrate, courts have typically determined that certified registered nurse anesthetists (CRNAs) working for federal hospitals qualify as employees under the FTCA. These courts have justified that conclusion on the ground that CRNAs do not ordinarily enjoy broad discretion to exercise their independent judgment when administering anesthesia, but instead operate pursuant to the direct supervision and control of an operating surgeon or anesthesiologist working for the federal government. By contrast, courts have generally held that because physicians who provide medical services at facilities operated by the United States often operate relatively independently of the federal government's control, such physicians ordinarily qualify as \"independent contractors, and not employees of the government for FTCA purposes.\" "], "subsections": [{"section_title": "The Boyle Rule", "paragraphs": ["Because the FTCA's prohibition against suits by individual employees does not insulate independent contractors from liability, a plaintiff injured by the tortious action of an independent contractor working for the federal government may potentially be able to recover compensation directly from that contractor. Nevertheless, a plaintiff asserting a tort claim directly against a federal contractor may still encounter other obstacles to recovery. As the Supreme Court ruled in its 1988 decision in Boyle v. United Technologies Corp. , a plaintiff may not pursue state law tort claims against a government contractor if imposing such liability would either create \"a 'significant conflict'\" with \"an identifiable 'federal policy or interest'\" or \"'frustrate specific objectives' of federal legislation.\" Several courts have therefore rejected tort claims against defense contractors on the ground that allowing such suits to proceed could undesirably interfere with military objectives. Courts have been less willing to extend Boyle immunity to nonmilitary contractors, however."], "subsections": []}]}, {"section_title": "Scope of Employment", "paragraphs": ["As noted above, the FTCA applies only to torts that a federal employee commits \"while acting within the scope of his office or employment.\" Thus, \"[i]f a government employee acts outside the scope of his employment when engaging in tortious conduct, an action against the United States under the FTCA will not lie.\" Instead, the plaintiff may potentially \"file a state-law tort action against the\" employee who committed the tort, as the aforementioned protections from liability apply only when employees are acting within the scope of their employment. ", "Courts determine whether a federal employee was acting within the scope of his employment at the time he committed an alleged tort by applying the law the state in which the tort occurred. Although the legal principles that govern the scope of a tortfeasor's employment vary from state to state, many states consider whether the employer hired the employee to perform the act in question and whether the employee undertook the allegedly tortious activity to promote the employer's interests.", "Two cases involving vehicular mishaps illustrate how courts perform the scope of employment inquiry in practice. In Barry v. Stevenson , for instance, two soldiers\u2014one driver and one passenger\u2014were returning to their headquarters in a government-owned Humvee military truck after completing a work assignment on a military base. The truck hit a dip in the trail, injuring the passenger. Because the driver \"was engaged in annual Army National Guard training\" and \"driving a government vehicle . . . on government property\" at the time of the accident, the court concluded that the driver \"was acting within the course of his employment\" as a federal officer \"when the injury occurred.\" ", "In Merlonghi v. United States , by contrast, a special agent employed by the Office of Export Enforcement (OEE) collided with a motorcyclist while driving home from work in a government vehicle. The agent and the motorcyclist had engaged in a verbal altercation and \"swerved their vehicles back and forth towards each other\" immediately prior to the collision. After brandishing a firearm at the motorcyclist, the agent sharply careened his vehicle into the motorcycle, throwing the motorcyclist to the ground and severely injuring him. The court determined that the agent \"was not acting within the scope of his employment\" at the time of the collision even though \"he was driving a government vehicle and was on call.\" The court first observed that \"engaging in a car chase while driving home from work [wa]s not the type of conduct that OEE hired [the agent] to perform.\" The court also emphasized that the agent \"was not at work, responding to an emergency, or driving to a work assignment\" at the time of the collision. The court further noted that the agent's actions were not \"motivated . . . by a purpose to serve the employer,\" as the agent's \"argument with [the motorcyclist] and the back-and-forth swerving leading to the altercation had nothing to do with an OEE assignment. His conduct related to personal travel and a personal confrontation.\" Because the agent \"was not acting within the scope of his employment when he crashed into\" the motorcyclist, the court ruled that the district court had correctly dismissed the motorcyclist's claims seeking compensation from the United States."], "subsections": []}, {"section_title": "Attorney General Certification", "paragraphs": ["Occasionally a plaintiff will file a tort suit against an individual without realizing that he is a federal employee. In such cases, the FTCA allows the Attorney General to certify \"that the defendant employee was acting within the scope of his office or employment at the time of the incident out of which the claim arose.\" If the Attorney General files such a certification, then", "the lawsuit is \"deemed an action against the United States\" under the FTCA; the employee is dismissed from the action, and the United States is substituted as defendant in the employee's place; and the case proceeds against the government in federal court.", "In such instances, the United States \"remain[s] the federal defendant in the action unless and until the [d]istrict [c]ourt determines that the employee . . . engaged in conduct beyond the scope of his employment.\" By creating a mechanism by which the United States may substitute itself as the defendant in the individual employee's place, the FTCA effectively \"immunize[s] covered federal employees not simply from liability, but from suit.\" In this way, the FTCA \"relieve[s] covered employees from the cost and effort of defending the lawsuit\" and instead places \"those burdens on the Government's shoulders.\"", "In some cases, the Attorney General's decision to substitute the United States in the officer's place may adversely affect the plaintiff's chances of prevailing on his claims. Generally speaking, once the Attorney General certifies that the federal employee was acting within the scope of his employment when he committed the allegedly tortious act, \"the FTCA's requirements, exceptions, and defenses apply to the suit.\" Depending on the circumstances, those requirements, exceptions, and defenses can \"absolutely bar [the] plaintiff's case\" against the United States, as explained in greater detail below. Moreover, the individual federal employee remains immune from liability even when the FTCA \"precludes recovery against the Government\" itself. Thus, under certain circumstances, the FTCA will shield both the United States and its employees from liability for its tortious actions, thereby effectively \"leav[ing] certain tort victims without any remedy.\" ", "\"In such cases, to try to preserve their lawsuits\" against the federal employee, the plaintiff may attempt to \"contest the Attorney General's scope-of-employment certification.\" That is, the plaintiff may argue that the government employee defendant was not acting within the scope of his employment, such that the suit should therefore proceed against the government official in his personal capacity. If the court agrees that the employee was acting within the scope of employment at the time of the alleged tort, then \"the suit becomes an action against the United States that is governed by the FTCA.\" If, however, the court disagrees with the Attorney General's determination, the suit may proceed against the government employee in his personal capacity.", "A plaintiff may, however, prefer to litigate against the United States rather than against an individual government employee, especially if the employee does not have enough money to satisfy a judgment that the court might ultimately render in the plaintiff's favor. Because government employees may be \"under-insured or judgment proof,\" they may lack sufficient assets to \"satisfy judgments rendered against them\" in tort cases. Thus, oftentimes the plaintiff does not object when the Attorney General certifies that the named defendant was acting within the scope of his employment at the time of the alleged tort. ", "If a plaintiff successfully obtains a judgment against the United States based on the tortious conduct of a federal employee, the government may not subsequently sue the culpable employee to recover the amount of money the government paid to the plaintiff. Consequently, if the government successfully substitutes itself for an individual defendant in an FTCA case, that substitution may effectively relieve the individual employee from all civil liability for his allegedly tortious action. Because this aspect of the FTCA is particularly favorable for government employees, if the Attorney General refuses to certify that an employee was acting within the scope of his employment, that employee may at any time before trial petition a federal district court for certification that he was acting within the scope of his employment for the purposes of the FTCA. If the court agrees that the employee was acting within the scope of his employment, then the case proceeds \"against the Government, just as if the Attorney General had filed a certification.\" If, however, the court instead finds that the government employee was not acting within the scope of employment, then the lawsuit may proceed against the government employee in his personal capacity."], "subsections": []}]}, {"section_title": "Exceptions to the FTCA's Waiver of Sovereign Immunity", "paragraphs": ["As mentioned above, the FTCA imposes significant substantive limitations on the types of tort lawsuits a plaintiff may permissibly pursue against the United States. The Congress that enacted the FTCA, concerned about \"unwarranted judicial intrusion[s] into areas of governmental operations and policymaking,\" opted to explicitly preserve the United States' sovereign immunity from more than a dozen categories of claims. Specifically, Section 2680 of the FTCA establishes the following exceptions preventing private litigants from pursuing the following categories of claims against the United States:", "\"Any claim based upon an act or omission of an employee of the Government, exercising due care, in the execution of a statute or regulation . . . or based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty\"; \"Any claim arising out of the loss, miscarriage, or negligent transmission of letters or postal matter\"; certain claims arising from the actions of law enforcement officers administering customs and excise laws; certain admiralty claims against the United States for which federal law provides an alternative remedy; claims \"arising out of an act or omission of any employee of the Government in administering\" certain provisions of the Trading with the Enemy Act of 1917; \"Any claim for damages caused by the imposition or establishment of a quarantine by the United States\"; certain claims predicated upon intentional torts committed by federal employees; \"Any claim for damages caused by the fiscal operations of the Treasury or by the regulation of the monetary system\" ; \"Any claim arising out of the combatant activities of the military or naval forces, or the Coast Guard, during time of war\"; \"Any claim arising in a foreign country\"; \"Any claim arising from the activities of the Tennessee Valley Authority\"; \"Any claim arising from the activities of the Panama Canal Company\"; or \"Any claim arising from the activities of a Federal land bank, a Federal intermediate credit bank, or a bank for cooperatives.\"", "Some of these exceptions are more doctrinally significant than others. The following sections of this report therefore discuss the most frequently litigated exceptions to the United States' waiver of immunity from tort claims. "], "subsections": [{"section_title": "The Discretionary Function Exception", "paragraphs": ["First, Section 2680(a) \u2014which is \"commonly called the discretionary function exception\" \u2014\"preserves the federal government's immunity . . . when an employee's acts involve the exercise of judgment or choice.\" Along with being one of the most frequently litigated exceptions to the FTCA's waiver of sovereign immunity, the discretionary function exception is, according to at least one commentator, \"the broadest and most consequential.\" For example, the United States has successfully invoked the discretionary function exception to avoid tort liability in cases involving exposures to radiation, asbestos, Agent Orange, and the human immunodeficiency virus (HIV).", "The discretionary function exception serves at least two purposes. First, the exception \"prevent[s] judicial 'second-guessing' of legislative and administrative decisions grounded in social, economic, and political policy through the medium of an action in tort.\" According to one commentator, the Congress that enacted the FTCA viewed such second guessing to be \"inappropriate\" because (1) \"such judgments are more appropriately left to the political branches of our governmental system;\" and (2) \"courts, which specialize in the resolution of discrete factual and legal disputes,\" may not be \"equipped to make broad policy judgments.\" Second, the discretionary function exception is intended to \"protect the Government from liability that would seriously handicap efficient government operations.\" By insulating the government from liability for the discretionary actions of its employees, the discretionary function exception arguably decreases the likelihood that federal employees will shy away from making sound policy decisions based on a fear of increasing the government's exposure to tort liability. Relatedly, exposing the United States to liability for discretionary acts could cause government officials to \"spend an inordinate amount of their tax-payer compensated time responding to lawsuits\" rather than serving the \"greater good of the community.\" The discretionary function exception thus \"marks the boundary between Congress' willingness to impose tort liability upon the United States and its desire to protect certain governmental activities from exposure to suit by private individuals.\" ", "As explained in greater detail in the following subsections, to determine whether the discretionary function exception bars a particular plaintiff's suit under the FTCA, courts examine whether the federal employee was engaged in conduct that was (1) discretionary and (2) policy-driven. \"If the challenged conduct is both discretionary and policy-driven,\" then the FTCA does not waive the government's sovereign immunity with respect to that conduct, and the plaintiff's FTCA claim must therefore fail. If, by contrast, an official's action either (1) \"does not involve any discretion\" or (2) \"involves discretion,\" but \"does not involve the kind of discretion\u2014consideration of public policy\u2014that the exception was designed to protect,\" then the discretionary function exception does not bar the plaintiff's claim."], "subsections": [{"section_title": "Whether the Challenged Conduct Is Discretionary", "paragraphs": ["When first evaluating whether \"the conduct that is alleged to have caused the harm\" to the plaintiff \"can fairly be described as discretionary,\" a court must assess \"whether the conduct at issue involves 'an element of judgment or choice' by the employee.\" \"The conduct of federal employees is generally held to be discretionary unless 'a federal statute, regulation, or policy specifically prescribes a course of action for an employee to follow.'\" If \"the employee has no rightful option but to adhere to the directive\" established by a federal statute, regulation, or policy, \"then there is no discretion in the conduct for the discretionary function exception to protect.\" Put another way, the discretionary function exception does not insulate the United States from liability when its employees \"act in violation of a statute or policy that specifically directs them to act otherwise.\" ", "Even where a federal statute, regulation, or policy pertaining to the challenged action exists, however, the action may nonetheless qualify as discretionary if the law in question \"predominately uses permissive rather than mandatory language.\" In other words, where \"a government agent's performance of an obligation requires that agent to make judgment calls, the discretionary function exception\" may bar the plaintiff's claim under the FTCA. Notably, \"[t]he presence of a few, isolated provisions cast in mandatory language\" in a federal statute, regulation, or policy \"does not transform an otherwise suggestive set of guidelines into binding\" law that will defeat the discretionary function exception. \"Even when some provisions of a policy are mandatory, governmental action remains discretionary if all of the challenged decisions involved 'an element of judgment or choice.'\"", "The Fourth Circuit's decision in Rich v. United States exemplifies how courts evaluate whether a federal employee has engaged in discretionary conduct. The plaintiff in Rich \u2014a federal inmate who was stabbed by members of a prison gang\u2014attempted to file an FTCA suit alleging that the Bureau of Prisons (BOP) should have housed him separately from the gang members. Federal law permitted\u2014but did not affirmatively require\u2014BOP \"to separate certain inmates from others based on their past behavior.\" Because federal law empowered prison officials to \"consider several factors and exercise independent judgment in determining whether inmates may require separation,\" the Rich court held that BOP's decision whether or not to separate an inmate from others was discretionary in nature and therefore outside the scope of the FTCA.", "By contrast, in the Supreme Court case of Berkovitz ex rel. Berkovitz v. United States , the discretionary function exception did not shield the United States from liability. The plaintiff in Berkovitz alleged that the federal government issued a license to a vaccine manufacturer \"without first receiving data that the manufacturer must submit showing how the product . . . matched up against regulatory safety standards,\" as required by federal law. After the plaintiff allegedly contracted polio from a vaccine produced by that manufacturer, the plaintiff sued the United States under the FTCA. Because \"a specific statutory and regulatory directive\" divested the United States of any \"discretion to issue a license without first receiving the required test data,\" the Court held that \"the discretionary function exception impose[d] no bar\" to the plaintiff's claim.", "Courts have disagreed regarding whether the discretionary function exception shields tortious conduct that allegedly violates the U.S. Constitution, as contrasted with a federal statute, regulation, or policy. Most courts have held that \"the discretionary-function exception . . . does not shield decisions that exceed constitutional bounds, even if such decisions are imbued with policy considerations.\" These courts reason that \"[t]he government 'has no \"discretion\" to violate the Federal Constitution; its dictates are absolute and imperative.'\" By contrast, a minority of courts have instead concluded that the discretionary function exception shields actions \"based upon [the] exercise of discretion\" even if they are \"constitutionally repugnant.\" These courts base that conclusion on the fact that the text of 28 U.S.C. \u00a7 2680(a) purports to shield discretionary judgments even when a government employee abuses his discretion. Still other courts have declined to take a side on this issue."], "subsections": []}, {"section_title": "Whether Policy Considerations Influence the Exercise of the Employee's Discretion", "paragraphs": ["If the allegedly tortious conduct that injured the plaintiff was discretionary, the court must then evaluate \"whether the exercise or non-exercise of the granted discretion is actually or potentially influenced by policy considerations\" \u2014that is, whether the challenged action \"implicate[s] social, economic, [or] policy judgments.\" As the Supreme Court has recognized, the discretionary function exception \"protects . . . only governmental actions and decisions based on considerations of public policy.\" For instance, if a given decision requires a federal employee to \"balance competing interests\" \u2014such as weighing the benefits of a particular public safety measure against that measure's financial costs \u2014then that decision is likely susceptible to policy analysis within the meaning of the discretionary function exception.", "When applying the second prong of the discretionary function exception, courts employ an objective rather than a subjective standard. Courts therefore \"do not examine . . . 'whether policy considerations were actually contemplated in making the decision'\" \u2014that is, \"[t]he decision need not actually be grounded in policy considerations so long as it is, by its nature, susceptible to a policy analysis.\" Indeed, the discretionary function exception \"applies 'even if the discretion has been exercised erroneously' and is deemed to have frustrated the relevant policy purpose.\" For that reason, whether the employee committed negligence in exercising his discretion \"is irrelevant to the applicability of the discretionary function exception.\" Nor does it matter whether the allegedly tortious action was undertaken \"by low-level government officials [or] by high-level policymakers.\" The nature of the conduct challenged by the plaintiff\u2014as opposed to the status of the actor\u2014governs whether the discretionary function exception applies in a given case. As long as the challenged conduct involves the exercise of discretion in furtherance of some policy goal, the discretionary function exception forecloses claims under the FTCA.", "If the first element of the discretionary function exception is satisfied, then courts will generally presume that the second element is satisfied as well. The Supreme Court has held that when an \"established governmental policy, as expressed or implied by statute, regulation, or agency guidelines, allows a Government agent to exercise discretion, it must be presumed that the agent's acts are grounded in policy when exercising that discretion.\" Nevertheless, a plaintiff may rebut that presumption if \"the challenged actions are not the kind of conduct that can be said to be grounded in the policy of the regulatory regime\" at issue in the case.", "Courts assessing the applicability of the discretionary function exception utilize a \"case-by-case approach. \" Given the fact-intensive nature of the discretionary function inquiry, \"deciding whether a government agent's action is susceptible to policy analysis is often challenging.\" Nevertheless, examples from the case law help illustrate which sorts of governmental actions are susceptible to policy analysis. For instance, in the Rich case discussed above, the court held that \"prisoner placement and the handling of threats posed by inmates against one another are 'part and parcel of the inherently policy-laden endeavor of maintaining order and preserving security within our nation's prisons.'\" The court explained that \"factors such as available resources, proper classification of inmates, and appropriate security levels are 'inherently grounded in social, political, and economic policy.'\" Accordingly, the court held that BOP's decision to house the plaintiff with inmates who ultimately attacked him was susceptible to policy analysis, such that the discretionary function exception shielded the United States from liability.", "By contrast, courts have held that decisions motivated solely by laziness or careless inattention \"do not reflect the kind of considered judgment 'grounded in social, economic, and political policy'\" that the discretionary function exception is intended to shield from judicial second-guessing. For example, the discretionary function exception does not shield \"[a]n inspector's decision (motivated simply by laziness) to take a smoke break rather than inspect\" a machine that malfunctions and injures the plaintiff, as a mere decision to act carelessly or slothfully \"involves no element of choice or judgment grounded in policy considerations.\" Courts have similarly held that allowing toxic mold to grow on food served at the commissary on a naval base is not a decision influenced by \"social, economic, or political policy,\" and that, as a result, the discretionary function exception does not bar a plaintiff sickened by that mold from suing the United States. "], "subsections": []}]}, {"section_title": "The Intentional Tort Exception", "paragraphs": ["Another important exception to the FTCA's waiver of sovereign immunity is known as the \"intentional tort exception.\" An \"intentional tort,\" as the name suggests, occurs \"when the defendant acted with the intent to injure the plaintiff or with substantial certainty that his action would injure the plaintiff.\" A familiar example of an intentional tort is battery\u2014that is, purposeful harmful or offensive physical contact with another person. Subject to a significant proviso discussed below, the intentional tort exception generally preserves the United States's immunity against claims arising out of", "assault; battery; false imprisonment; false arrest; malicious prosecution; abuse of process; libel; slander; misrepresentation; deceit; or interference with contract rights.", "As the Supreme Court has observed, however, this list \"does not remove from the FTCA's waiver all intentional torts;\" moreover, the list includes \"certain torts . . . that may arise out of negligent\"\u2014and therefore unintentional\u2014\"conduct.\" Thus, while the phrase \"intentional tort exception\" provides a suitable \"shorthand description\" of the exception's scope, that moniker is, according to the High Court, \"not entirely accurate.\"", "The FTCA's \"legislative history contains scant commentary\" discussing Congress's rationale for exempting these categories of torts from the FTCA's waiver of sovereign immunity. However, at least some Members of the Congress that first enacted the FTCA appeared to believe (1) that \"it would be 'unjust' to make the government liable\" for the intentional torts of its employees; and (2) that \"exposing the public fisc to potential liability for assault, battery, and other listed torts would be 'dangerous,' based on the notion that these torts are both easy for plaintiffs to exaggerate and difficult to defend against.\"", "The intentional tort exception has shielded the United States from liability for serious acts of misconduct allegedly committed by federal officers. In a particularly high-profile example, a group of women who were allegedly sexually assaulted by naval officers at the 1991 Tailhook Convention sued the United States under the FTCA \"for the sexual assaults and batteries allegedly perpetrated by Naval officers at the Convention social events.\" The court ultimately ruled that the intentional tort exception defeated the plaintiffs' claims against the United States, as the alleged sexual assaults constituted intentionally tortious acts."], "subsections": [{"section_title": "The Exception to the Intentional Tort Exception:235 The Law Enforcement Proviso", "paragraphs": ["Critically, however, the intentional tort exception contains a carve-out known as the \"law enforcement proviso\" that renders the United States liable for certain intentional tort claims committed by \"investigative or law enforcement officers of the United States Government.\" Congress added this proviso \"in 1974 in response to widespread publicity over abuse of powers by federal law enforcement officers.\" Thus, although \"private citizens are barred from bringing suit against federal employees for many intentional torts, they may nonetheless bring suit\" against the United States for a subset of these torts \"if the alleged act was committed by an 'investigative or law enforcement officer.'\" Only the following torts fall within the law enforcement proviso's ambit:", "assault; battery; false imprisonment; false arrest; abuse of process; and malicious prosecution.", "The list of intentional torts that potentially qualify for the law enforcement proviso therefore contains \"only half\" of \"the torts listed in the intentional tort exception.\" The proviso thereby only \"waives immunity for the types of tort claims typically asserted against criminal law enforcement officers, while preserving immunity for other tort claims that are asserted more broadly against federal employees.\"", "To determine whether the proviso applies in any given case, the court must first assess whether the alleged tortfeasor qualifies as an \"investigative or law enforcement officer[].\" The FTCA defines that term to include \"any officer of the United States who is empowered by law to\" (1)\u00a0\"execute searches,\" (2) \"seize evidence,\" or (3) \"make arrests for violations of Federal law.\" Some courts have therefore concluded that the law enforcement proviso waives the United States's immunity only against claims for intentional torts committed by \"criminal law enforcement officers,\" as contrasted with \"federal employees who conduct only administrative searches\" like Transportation Security Administration (TSA) screeners. Thus, as a general matter, the United States remains largely immune to claims arising from intentional torts committed by federal employees who are not criminal law enforcement officers.", "It is important to note that the law enforcement proviso waives the United States's immunity only for acts or omissions committed \"while the officer is 'acting within the scope of his office or employment.'\" The underlying tort need not arise while the officer is executing searches, seizing evidence, or making arrests; so long as the officer is \"act[ing] within the scope of his or her employment\" at the time the tort arises, \"the waiver of sovereign immunity holds.\" In other words, the waiver of sovereign immunity \"effected by the law enforcement proviso extends to acts or omissions of law enforcement officers that arise within the scope of their employment, regardless of whether the officers are engaged in investigative or law enforcement activity\" at the time they commit the allegedly tortious act. To illustrate, the Supreme Court has held that the intentional tort exception will not necessarily bar a federal prisoner's claim \"that correctional officers sexually assaulted . . . him while he was in their custody.\" Assuming that the correctional officers qualified as law enforcement officers within the meaning of the FTCA and were acting within the scope of their employment at the time of the alleged assault, the Court concluded that the law enforcement proviso rendered the intentional tort exception inapplicable even if the correctional officers were not specifically engaged in investigative or law enforcement activity during the assault itself."], "subsections": []}]}, {"section_title": "The Foreign Country Exception", "paragraphs": ["As the name suggests, the \"foreign country exception\" to the FTCA preserves the United States' sovereign immunity against \"any claim arising in a foreign country.\" The Supreme Court has interpreted this exception to \"bar[] all claims based on any injury suffered in a foreign country, regardless of where the tortious act or omission occurred .\" The exception therefore \"ensure[s] that the United States is not exposed to excessive liability under the laws of a foreign country over which it has no control,\" as could potentially occur if the United States made itself liable to the same extent as any private citizen who commits a tort in that country.", "The recent case of S.H. ex rel. Holt v. United States illustrates how courts apply the foreign country exception in practice. In that case, a family attempted to sue the United States pursuant to the FTCA, alleging that U.S. Air Force (USAF) officials in California \"negligently approved the family's request for command-sponsored travel to a [USAF] base in Spain\" with substandard medical facilities. When the mother ultimately gave birth prematurely in Spain, her daughter was injured during birth. After the family returned to the United States, American doctors diagnosed the daughter with cerebral palsy resulting from her premature birth. The court concluded that, because the daughter's \"cerebral palsy resulted from the brain injury she sustained in Spain,\" the foreign country exception barred the family's FTCA claim even though doctors did not diagnose the daughter with cerebral palsy until after the family returned the United States. To support its conclusion, the court reasoned that, for the purposes of the foreign country exception, \"an injury is suffered where the harm first 'impinge[s]' upon the body, even if it is later diagnosed elsewhere.\""], "subsections": []}, {"section_title": "The Military Exceptions", "paragraphs": ["Finally, two exceptions\u2014one created by Congress, one created by the Supreme Court\u2014preserve the federal government's immunity as to certain torts arising from the United States' military activities."], "subsections": [{"section_title": "The Combatant Activities Exception", "paragraphs": ["The first such exception, codified at 28 U.S.C. \u00a7 2680(j), preserves the United States' immunity from \"[a]ny claim arising out of the combatant activities of the military or naval forces, or the Coast Guard, during time of war.\" Although the FTCA's legislative history casts little light on the purpose and intended scope of the combatant activities exception, courts have generally inferred that \"the policy embodied by the combatant activities exception is . . . to preempt state or foreign regulation of federal wartime conduct and to free military commanders from the doubts and uncertainty inherent in potential subjection to civil suit.\"", "The 1996 case of Clark v. United States illustrates how the combatant activities exception operates in practice. The plaintiff in Clark \u2014a U.S. army sergeant who served in Saudi Arabia during Operation Desert Storm\u2014conceived a child with his wife after he returned home to the United States. After the child manifested serious birth defects, the sergeant sued the United States, claiming that his \"exposure to the toxins he encountered while serving in Saudi Arabia\" during Operation Desert Storm \"combined with the medications and shots he received from the U.S. Army\" caused his child to be born with significant injuries. The court concluded that, because a state of war existed during Operation Desert Storm, the sergeant's claims arose \"out of wartime activities by the military\" and were therefore barred by the combatant activities exception."], "subsections": []}, {"section_title": "The Feres Doctrine", "paragraphs": ["In addition to the exceptions to liability explicitly enumerated in Section 2680, the Supreme Court has also articulated an additional exception to the United States' waiver of sovereign immunity known as the Feres doctrine. That doctrine derives its name from the 1950 case Feres v. United States , in which several active duty servicemembers (or their executors) attempted to assert a variety of tort claims against the United States. The executor for one of the servicemembers who died in a fire at a military facility, for instance, claimed that the United States had negligently caused the servicemember's death by \"quartering him in barracks known or which should have been known to be unsafe because of a defective heating plant\" and by \"failing to maintain an adequate fire watch.\" The second plaintiff claimed that an Army surgeon negligently left a 30-by-18-inch towel in his stomach during an abdominal operation. The executor of a third servicemember alleged that army surgeons administered \"negligent and unskillful medical treatment\" that resulted in the servicemember's death. The Supreme Court dismissed all three claims, holding \"that the Government is not liable under the [FTCA] for injuries to [military] servicemen where the injuries arise out of or are in the course of activity incident to [military] service.\"", "The Feres doctrine thus \"applies broadly\" to render the United States immune from tort liability resulting from virtually \"all injuries suffered by military personnel that are even remotely related to the individual's status as a member of the military.\" For instance, courts have frequently barred active duty servicemembers from suing the United States for medical malpractice allegedly committed by military doctors. ", "Notably, the Feres doctrine is not explicitly codified in the FTCA . Instead, courts have justified Feres on the ground that subjecting the United States to liability for tort claims arising out of military service could \"disrupt the unique hierarchical and disciplinary structure of the military.\" According to the Supreme Court, \"complex, subtle, and professional decisions as to the composition, training, and . . . control of a military force are essentially professional military judgments.\" In the Supreme Court's view, requiring federal courts to adjudicate \"suits brought by service members against the Government for injuries incurred incident to service\" would thereby embroil \"the judiciary in sensitive military affairs at the expense of military discipline and effectiveness.\"", "As discussed in greater detail below, the Feres doctrine has been the subject of significant debate. Nonetheless, the Supreme Court has reaffirmed or expanded Feres on several occasions despite opportunities and invitations to overturn or confine its holding. Most recently, on May 20, 2019, the Court denied a petition asking the court to overrule Feres with respect to certain types of medical malpractice claims. Although the Supreme Court has stated that Congress may abrogate or modify Feres by amending the FTCA if it so chooses, Congress has not yet opted to do so."], "subsections": []}]}]}, {"section_title": "Other Limitations on Damages Under the FTCA", "paragraphs": ["Apart from the exceptions to the United States' waiver of sovereign immunity discussed above, the FTCA may also limit a plaintiff's ability to obtain compensation from the federal government in other ways. Although, as a general matter, the damages that a plaintiff may recover in an FTCA suit are typically determined by the law of the state in which the tort occurred, the FTCA imposes several restrictions on the types and amount of damages that a litigant may recover. With few exceptions, plaintiffs may not recover punitive damages or prejudgment interest against the United States. The FTCA likewise bars most awards of attorney's fees against the government. ", "Furthermore, with limited exceptions, an FTCA plaintiff may not recover any damages that exceed the amount he initially requested when he submitted his claim to the applicable agency to satisfy the FTCA's exhaustion requirement, which this report discusses below. \"[T]he underlying purpose of\" requiring the plaintiff to specify the maximum amount of damages he seeks \"is to put the government on notice of its maximum potential exposure to liability\" and thereby \"make intelligent settlement decisions.\" Critically, however, a plaintiff can potentially recover damages in excess of the amount he initially requested if the plaintiff can demonstrate \"intervening facts\" or \"newly discovered evidence not reasonably discoverable at the time of presenting the claim to the federal agency\" that warrant a larger award. "], "subsections": []}, {"section_title": "Procedural Requirements", "paragraphs": ["In addition to the aforementioned substantive limitations on a plaintiff's ability to pursue a tort lawsuit against the United States, Congress has also established an array of procedural requirements a plaintiff must satisfy in order to validly invoke the FTCA. Most significantly, the FTCA contains statute-of-limitations and exhaustion provisions that limit when a plaintiff may permissibly file a tort lawsuit against the United States.", "For one, with certain exceptions, a plaintiff may not institute an FTCA action against the United States unless (1) the plaintiff has first \"presented the claim to the appropriate Federal agency\" whose employees are responsible for the plaintiff's alleged injury, and (2) that agency has \"finally denied\" the plaintiff's claim. These administrative exhaustion requirements afford federal agencies an opportunity to settle disputes before engaging in formal litigation in the federal courts. \"[E]ncouraging settlement of tort claims within administrative agencies\" in this manner arguably \"reduce[s] court congestion and avoid[s] unnecessary litigation.\" Because litigation can be costly and time-consuming, \"the settlement of claims within administrative agencies\" arguably not only \"benefits FTCA claimants by permitting them to forego the expense of full-blown litigation,\" but also \"frees up limited [governmental] resources for more pressing matters.\"", "A claimant ordinarily has two years from the date of his injury to present a written notification of his FTCA claim \"to the Federal agency whose activities gave rise to the claim.\" This written notification must \"sufficiently describ[e] the injury to enable the agency to begin its own investigation.\" Once the agency receives such notice, it may either settle the claim or deny it. ", "With limited exceptions, if the claimant fails to submit an administrative claim within the two-year time limit, then \"his 'tort claim against the United States shall be forever barred.'\" As a general rule, a plaintiff must \"exhaust his administrative remedies prior to filing suit\"; a plaintiff usually cannot file an FTCA lawsuit and then cure his failure to comply with the exhaustion requirement by belatedly submitting an administrative claim.", "If, after the claimant submits his claim to the relevant administrative agency, the claimant and the agency agree on a mutually acceptable settlement, no further litigation occurs. Statistics suggest that \"[t]he majority of FTCA . . . claims are resolved on the administrative level and do not go to litigation.\" If the agency does not agree to settle the claim, however, the agency may deny the claim by \"mailing, by certified or registered mail, . . . notice of final denial of the claim\" to the claimant. If no administrative settlement occurs, a claimant's right to a judicial determination \"is preserved and the claimant may file suit in federal court.\" The claimant typically has six months from the date the agency mails its denial to initiate an FTCA lawsuit against the United States in federal court if he so chooses. With limited exceptions, if the plaintiff does not file suit before this six-month deadline, his claim against the United States will be \"forever barred.\"", "If a federal agency does not promptly decide whether to settle or deny claims that claimants have presented to them, the FTCA establishes a mechanism for constructive exhaustion to prevent claims from being consigned to administrative limbo while the claimant awaits the agency's decision. Pursuant to Section 2675(a) of the FTCA, \"[t]he failure of an agency to make final disposition of a claim within six months after it is filed shall, at the option of the claimant any time thereafter, be deemed a final denial of the claim for purposes of\" the FTCA's exhaustion requirement. Thus, under these limited circumstances, Section 2675(a) authorizes a plaintiff to file an FTCA suit against the United States even before the agency has formally denied his administrative claim."], "subsections": []}, {"section_title": "Legislative Proposals to Amend the FTCA", "paragraphs": ["Since Congress first enacted the FTCA in 1946, the federal courts have developed a robust body of judicial precedent interpreting the statute. In recent decades, however, the Supreme Court has rejected several invitations by litigants to modify its long-standing doctrines governing the FTCA's application. In doing so, the Court has expressed reluctance to revisit settled FTCA precedents in the absence of congressional action. Thus, if Congress disapproves of some or all of the legal principles that currently govern FTCA cases, legislative action may be necessary to change the governing standards. ", "Some observers have advocated a variety of modifications to the FTCA. Recent legislative proposals to alter the FTCA have included, among other things,", "carving out certain categories of claims, cases, or plaintiffs to which the FTCA does not apply; expanding or narrowing the FTCA's definition of \"employee\" \u2014which, as discussed above, is presently relatively broad, but does not include independent contractors; and amending 28 U.S.C. \u00a7 2680 to create new exceptions to the federal government's waiver of sovereign immunity\u2014or, alternatively, to broaden, narrow, or eliminate existing exceptions.", "Proposals to change the FTCA's substantive standards implicate policy questions that Congress may wish to consider. On one hand, broadening the FTCA's waiver of sovereign immunity could enable a larger number of victims of government wrongdoing to obtain recourse through the federal courts, but could concomitantly increase the total amount of money the United States must pay to tort claimants each year and exacerbate \"concerns . . . about . . . the impact that extensive litigation might have on the ability of government officials to focus on and perform their other duties.\" Conversely, narrowing the FTCA's immunity waiver could result in a larger number of private individuals bearing the costs of government employee misfeasance, but could result in a cost savings to the United States and decrease the potential for judicial interference with federal operations."], "subsections": [{"section_title": "Proposals to Abrogate or Modify Feres", "paragraphs": ["One particular proposal to amend the FTCA that has captured a relatively substantial amount of congressional attention is abrogating or narrowing the Feres doctrine. As discussed above, the Feres doctrine shields the federal government from liability \"for injuries to servicemen where the injuries arise out of or are in the course of activity incident to [military] service.\" Opponents of Feres argue that the doctrine inappropriately bars servicemembers from obtaining recourse for their injuries. Critics maintain that Feres 's bar on FTCA suits creates especially unjust results with respect to servicemembers who suffer injuries in military hospitals and servicemembers who are victims of sexual abuse, as those types of tortious actions are far removed from the core functions of the military. Some Members of Congress, judges, and legal commentators have therefore advocated eliminating or narrowing the Feres doctrine to allow servicemembers to pursue certain tort claims against the United States under the FTCA.", "Supporters of Feres , by contrast, have instead urged Congress to retain the Feres doctrine in its current form. These commentators contend \"that the abolition of the Feres doctrine would lead to intra-military lawsuits that would have a very adverse effect on military order, discipline and effectiveness.\" Supporters further maintain that entertaining tort suits by servicemembers against the United States would increase the government's exposure to monetary liability. Some who support the Feres doctrine argue that even though Feres bars servicemembers from suing the United States under the FTCA for injuries they sustain incident to military service, Feres does not necessarily leave servicemembers without any remedy whatsoever; depending on the circumstances, injured servicemembers may be entitled to certain benefits under other federal statutes.", "Congress has periodically held hearings to assess whether to retain, abrogate, or modify the Feres doctrine. The House Armed Services Committee's Subcommittee on Military Personnel conducted the most recent of those hearings on April 30, 2019.", "If Congress desires to authorize servicemembers to prosecute tort lawsuits against the United States, it has several options. For example, Congress could abolish Feres in its entirety and allow servicemembers to file tort suits against the United States subject to the same exceptions and prerequisites that govern FTCA lawsuits initiated by nonservicemembers. Alternatively, instead of abrogating Feres entirely, Congress could allow servicemembers to sue the United States for only certain injuries arising from military service, such as injuries resulting from medical malpractice. As an alternative to authorizing full-fledged litigation against the United States in federal court, Congress could also create alternative compensation mechanisms intended to provide relief to injured servicemembers whose claims would otherwise be barred by Feres . Such alternative compensation procedures could, for example, resemble the alternative compensation scheme Congress established for persons injured by vaccines.", "To that end, Congress has periodically introduced bills proposing to modify the Feres doctrine. Most recently, several Members of the 116th Congress cosponsored the Sfc. Richard Stayskal Military Medical Accountability Act of 2019 ( H.R. 2422 ), which would authorize \"member[s] of the Armed Forces of the United States\" to bring claims \"against the United States under [the FTCA] for damages . . . arising out of a negligent or wrongful act or omission in the performance of medical, dental, or related health care functions\" rendered at certain military medical treatment facilities under specified conditions."], "subsections": []}, {"section_title": "Private Bills", "paragraphs": ["In addition to proposals to modify the FTCA itself, Congress retains the authority to enact private legislation to compensate individual tort victims who would otherwise be barred from obtaining recourse from the United States under the FTCA in its current form. Although, as explained above, Congress enacted the FTCA in part to eliminate the need to pass private bills in order to compensate persons injured by the federal government, Congress still retains some authority to pass private bills if it so desires. Thus, rather than amend the FTCA to expand the universe of circumstances in which the United States will be liable to tort claimants, some have suggested that Congress should pass individual private bills to compensate particular injured persons or groups of persons who might otherwise lack recourse under the FTCA. To that end, Congress has occasionally \"provided compensation [to plaintiffs] in situations where the courts have found that the FTCA waiver of immunity provides no relief.\""], "subsections": []}]}]}}
{"id": "RL32589", "title": "The Federal Communications Commission: Current Structure and Its Role in the Changing Telecommunications Landscape", "released_date": "2019-04-18T00:00:00", "summary": ["The Federal Communications Commission (FCC) is an independent federal agency established by the Communications Act of 1934 (1934 Act, or \"Communications Act\"). The agency is charged with regulating interstate and international communications by radio, television, wire, satellite, and cable. The mission of the FCC is to make available for all people of the United States, \"without discrimination on the basis of race, color, religion, national origin, or sex, a rapid, efficient, Nationwide, and worldwide wire and radio communication service with adequate facilities at reasonable charges.\"", "The FCC operates under a public interest mandate first laid out in the 1927 Radio Act (P.L. 632, 69th Congress), but how this mandate is applied depends on how \"the public interest\" is interpreted. Some regulators seek to protect and benefit the public at large through regulation, while others seek to achieve the same goals through the promotion of market efficiency. Additionally, Congress granted the FCC wide latitude and flexibility to revise its interpretation of the public interest standard to reflect changing circumstances and the agency has not defined it in more concrete terms. These circumstances, paired with changes in FCC leadership, have led to significant changes over time in how the FCC regulates the broadcast and telecommunications industries.", "The FCC is directed by five commissioners appointed by the President and confirmed by the Senate for five-year terms. The President designates one of the commissioners as chairperson. Three commissioners may be members of the same political party of the President and none can have a financial interest in any commission-related business. The current commissioners are Ajit Pai (Chair), Michael O'Rielly, Brendan Carr, Jessica Rosenworcel, and Geoffrey Starks.", "The day-to-day functions of the FCC are carried out by 7 bureaus and 10 offices. The current basic structure of the FCC was established in 2002 as part of the agency's effort to better reflect the industries it regulates. The seventh bureau, the Public Safety and Homeland Security Bureau, was established in 2006. The bureaus process applications for licenses and other filings, manage non-federal spectrum, analyze complaints, conduct investigations, develop and implement regulatory programs, and participate in hearings, among other things. The offices provide support services. Bureaus and offices often collaborate when addressing FCC issues.", "Beginning in the 110th Congress, the FCC has been funded through the House and Senate Financial Services and General Government (FSGG) appropriations bill as a single line item. Previously, it was funded through what is now the Commerce, Justice, Science appropriations bill, also as a single line item. Since 2009 the FCC's budget has been derived from regulatory fees collected by the agency rather than through a direct appropriation. The fees, often referred to as \"Section (9) fees,\" are collected from license holders and certain other entities. The FCC is authorized to review the regulatory fees each year and adjust them to reflect changes in its appropriation from year to year. Most years, appropriations language prohibits the use by the commission of any excess collections received in the current fiscal year or any prior years.", "For FY2020, the FCC has requested $335,660,000 in budget authority from regulatory fee offsetting collections. The FCC also requested $132,538,680 in budget authority for the spectrum auctions program."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview of the Federal Communications Commission", "paragraphs": ["The Federal Communications Commission (FCC) is an independent federal agency, with its five members appointed by the President, subject to confirmation by the Senate. It was established by the Communications Act of 1934 (1934 Act, or \"Communications Act\") and is charged with regulating interstate and international communications by radio, television, wire, satellite, and cable. The mission of the FCC is to ensure that the American people have available, \"without discrimination on the basis of race, color, religion, national origin, or sex, a rapid, efficient, Nationwide, and worldwide wire and radio communication service with adequate facilities at reasonable charges.\" ", "The 1934 Act is divided into titles and sections that describe various powers and concerns of the commission.", "Title I\u2014FCC Administration and Powers. The 1934 Act originally called for a commission consisting of seven members, but that number was reduced to five in 1983. Commissioners are appointed by the President and approved by the Senate to serve five-year terms; the President designates one member to serve as chairman. Title II\u2014Common carrier regulation, primarily telephone regulation, including circuit-switched telephone services offered by cable companies. Common carriers are communication companies that provide facilities for transmission but do not originate messages, such as telephone and microwave providers. The 1934 Act limits FCC regulation to interstate and international common carriers, although a joint federal-state board coordinates regulation between the FCC and state regulatory commissions. Title III\u2014Broadcast station requirements. Much existing broadcast regulation was established prior to 1934 by the Federal Radio Commission, and most provisions of the Radio Act of 1927 were subsumed into Title III of the 1934 Act. Title IV\u2014Procedural and administrative provisions, such as hearings, joint boards, judicial review of the FCC's orders, petitions, and inquiries. Title V\u2014Penal provisions and forfeitures, such as violations of rules and regulations. Title VI\u2014Cable communications, such as the use of cable channels and cable ownership restrictions, franchising, and video programming services provided by telephone companies. Title VII\u2014Miscellaneous provisions and powers, such as war powers of the President, closed captioning of public service announcements, and telecommunications development fund."], "subsections": [{"section_title": "FCC Leadership", "paragraphs": ["The FCC is directed by five commissioners appointed by the President and confirmed by the Senate for five-year terms (except when filling an unexpired term). The President designates one of the commissioners to serve as chairperson. Three commissioners may be members of the same political party as the President and none can have a financial interest in any commission-related business. ", "Ajit Pai, Chair (originally sworn in on May 14, 2012; designated chairman by President Trump in January 2017 and confirmed by the Senate for a second term on October 2, 2017); Michael O'Rielly (sworn in for a second term on January 29, 2015); Brendan Carr (sworn in on August 11, 2017); Jessica Rosenworcel (sworn in on August 11, 2017); and Geoffrey Starks (sworn in on January 30, 2019)."], "subsections": []}, {"section_title": "FCC Structure", "paragraphs": ["The day-to-day functions of the FCC are carried out by 7 bureaus and 10 offices. The current basic structure of the FCC was established in 2002 as part of the agency's effort to better reflect the industries it regulates. The seventh bureau, the Public Safety and Homeland Security Bureau, was established in 2006, largely in response to Hurricane Katrina.", "The bureaus process applications for licenses and other filings, analyze complaints, conduct investigations, develop and implement regulatory programs, and participate in hearings, among other things. The offices provide support services. Bureaus and offices often collaborate when addressing FCC issues. The bureaus hold the following responsibilities:", "Consumer and Governmental Affairs Bureau\u2014Develops and implements consumer policies, including disability access and policies affecting Tribal nations. The Bureau serves as the public face of the Commission through outreach and education, as well as responding to consumer inquiries and informal complaints. The Bureau also maintains collaborative partnerships with state, local, and tribal governments in such critical areas as emergency preparedness and implementation of new technologies. In addition, the Bureau's Disability Rights Office provides expert policy and compliance advice on accessibility with respect to various forms of communications for persons with disabilities. Enforcement Bureau\u2014Enforces the Communications Act and the FCC's rules. It protects consumers, ensures efficient use of spectrum, furthers public safety, promotes competition, resolves intercarrier disputes, and protects the integrity of FCC programs and activities from fraud, waste, and abuse. International Bureau\u2014Administers the FCC's international telecommunications and satellite programs and policies, including licensing and regulatory functions. The Bureau promotes pro-competitive policies abroad, coordinating the FCC's global spectrum activities and advocating U.S. interests in international communications and competition. The Bureau works to promote high-quality, reliable, interconnected, and interoperable communications infrastructure on a global scale. Media Bureau\u2014Recommends, develops, and administers the policy and licensing programs relating to electronic media, including broadcast, cable, and satellite television in the United States and its territories. Public Safety and Homeland Security Bureau\u2014Develops and implements policies and programs to strengthen public safety communications, homeland security, national security, emergency management and preparedness, disaster management, and network reliability. These efforts include rulemaking proceedings that promote more efficient use of public safety spectrum, improve public alerting mechanisms, enhance the nation's 911 emergency calling system, and establish frameworks for communications prioritization during crisis. The Bureau also maintains 24/7 operations capability and promotes Commission preparedness to assist the public, first responders, the communications industry, and all levels of government in responding to emergencies and major disasters where reliable public safety communications are essential. Wireless Telecommunications Bureau\u2014Responsible for wireless telecommunications programs and policies in the United States and its territories, including licensing and regulatory functions. Wireless communications services include cellular, paging, personal communications, mobile broadband, and other radio services used by businesses and private citizens. Wireline Competition Bureau\u2014Develops, recommends, and implements policies and programs for wireline telecommunications, including fixed (as opposed to mobile) broadband and telephone landlines, striving to promote the widespread development and availability of these services. The Bureau has primary responsibility for the Universal Service Fund which helps connect all Americans to communications networks.", "The offices hold the following responsibilities:", "Administrative Law Judges\u2014Composed of one judge (and associated staff) who presides over hearings and issues decisions on matters referred by the FCC. Communications Business Opportunities\u2014Promotes competition and innovation in the provision and ownership of telecommunications services by supporting opportunities for small businesses as well as women and minority-owned communications businesses. Economics and Analytics\u2014Responsible for expanding and deepening the use of economic analysis into Commission policymaking, for enhancing the development and use of auctions, and for implementing consistent and effective agency-wide data practices and policies. The Office also manages the FCC's auctions in support of and in coordination with the FCC's Bureaus and Offices. In January 2019, the FCC voted along party lines to eliminate the Office of Strategic Planning and Policy Analysis and replace it with the Office of Economics and Analytics. Engineering and Technology\u2014Advises the FCC on technical and engineering matters. This Office develops and administers FCC decisions regarding spectrum allocations and grants equipment authorizations and experimental licenses. General Counsel\u2014Serves as the FCC's chief legal advisor and representative. Inspector General\u2014Conducts and supervises audits and investigations relating to FCC programs and operations. Legislative Affairs\u2014Serves as the liaison between the FCC and Congress, as well as other federal agencies. Managing Director\u2014Administers and manages the FCC. Media Relations\u2014Informs the media of FCC decisions and serves as the FCC's main point of contact with the media. Workplace Diversity\u2014Ensures that FCC provides employment opportunities for all persons regardless of race, color, sex, national origin, religion, age, disability, or sexual orientation.", "Additionally, an FCC Secretary serves to preserve the integrity of the FCC's records, oversee the receipt and distribution of documents filed by the public through electronic and paper filing systems, and give effective legal notice of FCC decisions by publishing them in the Federal Register and the FCC Record ."], "subsections": []}, {"section_title": "FCC Strategic Plan", "paragraphs": ["The current FCC Strategic Plan covers the five-year period FY2018-FY2022. The plan outlines four goals:", "Closing the Digital Divide\u2014Broadband is acknowledged as being critical to economic opportunity, but broadband is unavailable or unaffordable in many parts of the country. The FCC is to seek to help close the digital divide, bring down the cost of broadband deployment, and create incentives for providers to connect consumers in hard-to-serve areas. Promoting Innovation\u2014Fostering a competitive, dynamic, and innovative market for communications services is a key priority for the FCC. The FCC plans to promote entrepreneurship, expand economic opportunity, and remove barriers to entry and investment. Protecting Consumers and Public Safety\u2014Serving the broader public interest is the FCC's core mission. The FCC plans to work to combat unwanted and unlawful robocalls, make communications accessible for people with disabilities, and protect public safety (e.g., ensuring delivery of 9-1-1 calls, restoring communications after disasters). Reforming the FCC's Processes\u2014One of the chairman's top priorities has been to implement process reforms to make the work of the FCC more transparent, open, and accountable to the public. The FCC plans to modernize and streamline its operations and programs to improve decisionmaking, build consensus, and reduce regulatory burdens.", "The FCC has identified performance objectives associated with each strategic goal. Commission management annually develops targets and measures related to each performance goal to provide direction toward accomplishing those goals. Targets and measures are published in the FCC's Performance Plan, and submitted with the commission's annual budget request to Congress. Results of the commission's efforts to meet its goals, targets, and measures are found in the FCC's Annual Performance Report published each February. The FCC also issues a Summary of Performance and Financial Results every February, providing a concise, citizen-focused review of the agency's accomplishments."], "subsections": []}]}, {"section_title": "FCC Operations: Budget, Authorization, and Reporting to Congress", "paragraphs": ["Since the 110 th Congress, the FCC has been funded through the House and Senate Financial Services and General Government (FSGG) appropriations bill as a single line item. Previously, it was funded through what is now the Commerce, Justice, Science appropriations bill, also as a single line item.", "The FCC annually collects and retains regulatory fees to offset costs incurred by the agency and to carry out its functions. Since 2009 the FCC's budget has been derived from regulatory fees collected by the agency rather than through a direct appropriation. The fees, often referred to as \"Section (9) fees,\" are collected from license holders and certain other entities (e.g., cable television systems). The regulatory fees do not apply to governmental entities, amateur radio operator licensees, nonprofit entities, and certain other non-commercial entities. The FCC is authorized to review the regulatory fees each year and adjust them to reflect changes in its appropriation from year to year. The Commission originally implemented the Regulatory Fee Collection Program by rulemaking on July 18, 1994. The most recent regulatory fee order was released by the Commission on August 29, 2018. The FCC's budgets from FY2010 to FY2020 are in Figure 1 ."], "subsections": [{"section_title": "Availability of Regulatory Fees", "paragraphs": ["On March 23, 2018, the Repack Airwaves Yielding Better Access for Users of Modern Services Act of 2018 (the \"RAY BAUM'S Act\" or \"2018 Act\") became law as part of the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ). The 2018 Act requires the FCC to transfer all excess collections for FY2018 and prior years to the General Fund of the U.S. Treasury for the sole purpose of deficit reduction. The 2018 Act also requires the Commission to transfer any excess collections in FY2019 and in subsequent years to the General Fund of the U.S. Treasury for the sole purpose of deficit reduction. On October 1, 2018, the Commission transferred over $9 million in excess collections from FY2018 as well as approximately $112 million in excess collections from FY2017 and prior years to the General Fund of the U.S. Treasury."], "subsections": []}, {"section_title": "FCC FY2020 Budget", "paragraphs": ["For FY2020, the FCC has requested $335,660,000 in budget authority from regulatory fee offsetting collections. This is $3,950,000 less than the authorization level of $339,610,000 included in the 2018 FCC Reauthorization in the Consolidated Appropriations Act, 2018. The FY2020 FCC request also represents a decrease of $3,340,000, or about 1.0%, from the FY2019 appropriated level of $339,000,000.", "The FCC requested $132,538,680 in budget authority for the spectrum auctions program. For FY2019, Congress appropriated a cap of $130,284,000 for the spectrum auctions program, which included additional funds to implement the requirements of the 2018 Act that mandated significant additional work for the FCC related to the TV Broadcaster Relocation Fund. The Commission's FY2020 budget request of $132,538,680 for this program would be an increase of $2,254,680, or 1.7%, over the FY2019 appropriation. This level of funding is intended to enable the Commission to continue its efforts to: reimburse full power and Class A stations, multichannel video programming distributors, Low Power TV, TV translator, and FM stations for reasonable costs incurred as a result of the Commission's incentive auction; make more spectrum available for 5G; and educate consumers affected by the reorganization of broadcast television spectrum. To date, the Commission's spectrum auctions program has generated over $114.6 billion for government use; at the same time, the total cost of the auctions program has been less than $2.0 billion, or less than 1.7% of the total auctions' revenue."], "subsections": []}, {"section_title": "FCC Authorization", "paragraphs": ["Through the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), the FCC was reauthorized for the first time since 1990 (FCC Authorization Act of 1990, P.L. 101-396 ). "], "subsections": []}, {"section_title": "FCC Reporting to Congress", "paragraphs": ["The FCC publishes four periodic reports for Congress. ", "Strategic Plan. The Strategic Plan is the framework around which the FCC develops its yearly Performance Plan and Performance Budget. The FCC submitted its current four-year Strategic Plan for 2018-2022 in February 2018, in accordance with the Government Performance and Results Modernization Act of 2010, P.L. 111-352 . Performance Budget. The annual Performance Budget includes performance targets based on the FCC's strategic goals and objectives, and serves as the guide for implementing the Strategic Plan. The Performance Budget becomes part of the President's annual budget request. Agency Financial Report. The annual Agency Financial Report contains financial and other information, such as a financial discussion and analysis of the agency's status, financial statements, and audit reports. Annual Performance Report. At the end of the fiscal year, the FCC publishes an Annual Performance Report that compares the agency's actual performance with its targets. ", "All of these reports are available on the FCC website, https://www.fcc.gov/about/strategic-plans-budget ."], "subsections": []}]}, {"section_title": "Activity in the 116th Congress", "paragraphs": ["One FCC-related hearing has been held in the 116 th Congress. On April 3, 2019, the House Committee on Appropriations Subcommittee on Financial Services and General Government held a hearing on the FY2020 FCC budget. The hearing addressed issues including 5G deployment, federal preemption of state and local tower siting requirements, merger reviews, robocalls, and net neutrality. No bills that would affect the operation of the FCC have been introduced in the 116 th Congress."], "subsections": []}, {"section_title": "Trends in FCC Regulation: Defining the Public Interest", "paragraphs": ["The FCC operates under a public interest mandate first laid out in the 1927 Radio Act (P.L. 632, 69 th Congress), but how this mandate is applied depends on which of two regulatory philosophies is relied upon to interpret it. The first seeks to protect and benefit the public at large through regulation, while the second seeks to achieve the same goals through the promotion of market efficiency. Additionally, Congress granted the FCC wide latitude and flexibility to revise its interpretation of the public interest standard to reflect changing circumstances, and the agency has not defined it in more concrete terms. These circumstances, paired with changes in FCC leadership, have led to significant changes over time in how the FCC regulates the broadcast and telecommunications industries. This evolution can be illustrated in changes to the agency's strategic goals under former Chairman Tom Wheeler to current Chairman Ajit Pai, which, in turn, led to the repeal in 2017 of the FCC's 2015 net neutrality rules and to changes in the agency's structure in 2019."], "subsections": [{"section_title": "FCC Strategic Goals", "paragraphs": ["The FCC's strategic goals are set forth in its quadrennial Strategic Plan. How these goals change from one plan to the next can illustrate how the priorities of the commission change over time, especially when there is a change in the political majority of the commission and therefore, the political party of the chairman. Table 1 outlines the strategic goals of Chairman Wheeler in the FY2015-FY2018 Strategic Plan compared to those of Chairman Pai in the FY2018-FY2022 Strategic Plan. ", "Chairman Wheeler was a proponent of protecting and benefitting the public through regulation. His support of this regulatory philosophy can be seen in the language used in the strategic goals, such as the \"rights of users\" and the \"responsibilities of network providers.\" Another example can be seen in the following language: \"The FCC has a responsibility to promote the expansion of these networks and to ensure they have the incentive and the ability to compete fairly with one another in providing broadband services.\" ", "On the other hand, Chairman Pai speaks about protecting and benefitting the public through the promotion of market incentives and efficiency. His support of this regulatory philosophy can be seen in the language used in the strategic goals, such as \"reducing regulatory burdens\" and ensuring that \"regulations reflect the realities of the current marketplace, promote entrepreneurship, expand economic opportunity, and remove barriers to entry and investment.\" ", "The use of this particular language may seem somewhat vague, but within the context of the net neutrality debate, discussed below, and the replacement of the Office of Strategic Planning and Policy Analysis with the Office of Economics and Analytics, those words take on more specific meaning, each intending to support the policy agenda of the Chairman."], "subsections": []}, {"section_title": "Net Neutrality", "paragraphs": ["Net neutrality is arguably the highest profile issue illustrating the two regulatory philosophies described above. Chairman Pai had long maintained that the FCC under Chairman Wheeler had overstepped its bounds, expressing confidence that the 2015 Wheeler-era net neutrality rules would be undone, calling them \"unnecessary regulations that hold back investment and innovation.\"", "Although the net neutrality debate originated in 2005, the 2015 Open Internet Order, implemented under the leadership of Chairman Wheeler, and the 2017 Order overturning those rules, promulgated under Chairman Pai, are the most recent. These two orders can be used to illustrate the contrast between the regulatory philosophies of the two chairmen:", "Some policymakers contend that more proscriptive regulations, such as those contained in the FCC's 2015 Open Internet Order (2015 Order), are necessary to protect the marketplace from potential abuses which could threaten the net neutrality concept. Others contend that existing laws and the current, less restrictive approach, contained in the FCC's 2017 Restoring Internet Freedom Order (2017 Order), provide a more suitable framework.", "Net neutrality continues to be a highly politicized issue, with most FCC action being approved along party lines. "], "subsections": []}, {"section_title": "FCC Structure", "paragraphs": ["In January 2019, the FCC voted along party lines to eliminate the Office of Strategic Planning and Policy Analysis and replace it with a new Office of Economics and Analytics. The Office of Strategic Planning and Policy Analysis (OSP) was created in 2005, replacing the Office of Plans and Policy. OSP had been charged with \"providing advice to the chairman, commissioners, bureaus, and offices; developing strategic plans; identifying the agency's policy objectives; and providing research, advice, and analysis of advanced, novel, and nontraditional communications issues.\" It had also been the home of the Chief Economist and Chief Technologist. ", "The new Office of Economics and Analytics is \"responsible for expanding and deepening the use of economic analysis into FCC policy making, for enhancing the development and use of auctions, and for implementing consistent and effective agency-wide data practices and policies.\" This new office reflects the goals in the current strategic plan: ", "We will modernize and streamline the FCC's operations and programs to \u2026 reduce regulatory burdens\u2026. A key priority [is to] \u2026 ensure that the FCC's actions and regulations reflect the realities of the current marketplace \u2026 and remove barriers to entry and investment."], "subsections": []}]}, {"section_title": "Concluding Observations", "paragraphs": ["As the FCC continues to conduct its business into the future, the changing regulatory philosophies of the FCC chairmen may continue to drive how the FCC defines its long-term, strategic goals. This, in turn, may affect how the agency structures (and restructures) itself and how it decides regulatory questions, including a continued review of net neutrality. Congress may determine that the public interest standard should remain more static, rather than fluctuating dramatically depending on the regulatory philosophy of the chairman. No legislation on this topic has been introduced in Congress, signaling to some observers that it intends to continue allowing the FCC to define it. "], "subsections": [{"section_title": "Appendix. FCC-Related Congressional Activity\u2014115th Congress", "paragraphs": [" Table A-1 . Senate and House hearings in the 115 th Congress regarding the operation of the FCC are detailed in Table A-2 and Table A-3 , respectively. Links to individual hearing pages are included in these tables."], "subsections": []}]}]}}
{"id": "R44637", "title": "Department of State and Foreign Operations Appropriations: History of Legislation and Funding in Brief", "released_date": "2019-03-22T00:00:00", "summary": ["Congress currently appropriates most foreign affairs funding through annual Department of State, Foreign Operations, and Related Programs (SFOPS) appropriations. Prior to FY2008, however, Congress provided funding for the Department of State, international broadcasting, and related programs within the Commerce, Justice, State, the Judiciary, and Related Agencies appropriations. In those years, Congress separately appropriated funding for the U.S. Agency for International Development (USAID) and foreign aid within the Foreign Operations, Export Financing, and Related Programs appropriations. The 110th Congress aligned the two foreign affairs appropriations into the SFOPS legislation.", "SFOPS appropriations since FY2001 have included enduring appropriations (ongoing or base funding), emergency supplemental appropriations, and Overseas Contingency Operations (OCO) appropriations. Total SFOPS funding levels in both current and constant dollars show a general upward trend, with FY2004 as the peak largely as a result of emergency supplemental appropriations for Iraq Relief and Reconstruction Funds. When adjusted for inflation, annual foreign affairs appropriations have yet to surpass the FY2004 peak. The Budget Control Act (BCA) of 2011 and the Bipartisan Budget Acts (BBA) of 2015 and 2018 appear to have had an impact on both enduring and OCO funding levels.", "The legislative history of SFOPS appropriations shows that nearly all foreign affairs appropriations measures within the past 25 years were passed within omnibus, consolidated, or full-year continuing resolutions, rather than in stand-alone bills. Moreover, many appropriations were passed after the start of the new fiscal year, at times more than half way into the new fiscal year. In many fiscal years, SFOPS appropriations included emergency supplemental funding or, since FY2012, OCO funding."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Congress appropriates foreign affairs funding primarily through annual Department of State, Foreign Operations, and Related Programs (SFOPS) appropriations. Prior to FY2008, however, Congress provided funds for the Department of State and international broadcasting within the Commerce, Justice, and State, the Judiciary, and Related Agencies appropriations (CJS) and separately provided foreign aid funds within Foreign Operations, Export Financing, and Related Programs appropriations. ", "The transition between the different alignments occurred in the 109 th Congress, with a change in appropriations subcommittee jurisdiction. For that Congress, the House of Representatives appropriated State Department funds separately from foreign aid, as in earlier Congresses, but the Senate differed by appropriating State and foreign aid funds within one bill\u2014the Department of State, Foreign Operations, and Related Programs Appropriations. Both the House and Senate began jointly funding Department of State and foreign aid appropriations within the Department of State, Foreign Operations and Related Programs Appropriations in the Consolidated Appropriations Act, 2008 ( P.L. 110-161 ). ", "SFOPS appropriations currently include State Department Operations (including accounts for Embassy Security, Construction, and Maintenance, and Education and Cultural Affairs, among others); Foreign Operations (including USAID administration expenses, bilateral economic assistance, international security assistance, multilateral assistance, and export assistance); various international commissions; and International Broadcasting (including VOA, RFE/RL, Cuba Broadcasting, Radio Free Asia, and Middle East Broadcasting Networks). While the distribution varies slightly from year to year, Foreign Operations funding is typically about twice as much as State Operations funding.", "In addition to regular, enduring SFOPS appropriations, Congress has approved emergency supplemental funding requested by Administrations to address emergency or otherwise off-cycle budget needs. Since FY2012, Congress has also appropriated Overseas Contingency Operations (OCO) funding requested within the regular budget process for Department of State and USAID war-related expenses. ", "This report lists the legislative and funding history of SFOPS appropriations and includes funding trends."], "subsections": []}, {"section_title": "Legislative History", "paragraphs": ["Nearly all foreign affairs appropriations within the past 25 years were passed within omnibus, consolidated, or full-year continuing resolutions, rather than in stand-alone bills, and usually after the start of the new fiscal year. Many foreign policy experts contend that stand-alone appropriations legislation would allow for a more rigorous debate on specific foreign policy activities and improve the ability to introduce or fund new programs, or cancel and defund existing programs. Such experts assert that the frequent practice of passing continuing resolutions and delaying passage of appropriations well into the next fiscal year has hindered program planning (not just in foreign affairs) and has reduced the ability to fund programs that did not exist in the previous cycle. ", "In addition to annual appropriations, several laws require Congress to authorize State and foreign operations funding prior to expenditure. Before 2003, Congress typically provided authorization in a biannual Foreign Relations Authorization bill. This practice not only authorized funding for obligation and expenditure, but also provided a forum for more rigorous debate on specific foreign affairs and foreign aid policies and a legislative vehicle for congressional direction. In recent years, the House and Senate have separately introduced or considered foreign relations and foreign aid authorization bills, but none have been enacted. ", " Table 1 below provides a 25-year history of enacted foreign affairs appropriations laws (excluding short-term continuing resolutions and supplemental appropriations), including the dates they were sent to the President and signed into law. Some observations follow:", "Since FY1995, Congress appropriated foreign affairs funding in on-time, freestanding bills once\u2014in 1994 for the FY1995 appropriations year. The last time Congress passed foreign affairs funding on time, but not in freestanding legislation, was for FY1997. Congress included foreign affairs funding within an omnibus, consolidated, or full-year continuing resolution 21 of the past 25 years. FY2006 was the last time Congress enacted freestanding State Department and foreign operations appropriations bills. Six times over the past 25 years, Congress sent the State and foreign operations appropriations to the President in March, April, or May\u2014six to eight months into the fiscal year."], "subsections": []}, {"section_title": "Funding History", "paragraphs": ["Since realignment of the foreign affairs appropriations legislation in FY2008, SFOPS appropriations measures have included State Department Operations, Foreign Operations, various international commissions, and International Broadcasting. For a full list of the accounts included in the FY2019 SFOPS, see Table 2 ."], "subsections": [{"section_title": "20-Year Funding Trends", "paragraphs": [" Table 3 and Figure 1 provide the funding levels for enduring funds and Supplemental/OCO funds in the Department of State, Foreign Operations and Related Programs for FY2001-2020 request (in current dollars).", "Although current funding for State-Foreign Operations generally has grown since FY2001, there was a spike in funding in FY2004 that can, in large part, be attributed to supplemental funding for the Iraq Relief and Reconstruction Fund, which provided additional funds in that year. The creation of the Millennium Challenge Corporation (MCC) and the President's Emergency Plan for AIDS Relief (PEPFAR) added to growing funding levels from FY2004-FY2009. OCO became a regular part of foreign affairs funding as of FY2012. Supplemental funding for Ebola in FY2015, Zika in FY2016, and OCO in FY2017 contributed to the rise in funding levels during those years (see Figure 2 ).", "The constant dollar trend line generally continues to increase, although at a slower pace than current dollars. FY2004 remains the peak year in constant dollars. The introduction of OCO funding in FY2012 briefly elevated SFOPS funding, but in the following years, funding levels off at nearly the same amount as the FY2012 level. After removing inflation, funding for FY2013 through the FY2020 request declines below that level, suggesting that the Budget Control Act of 2011 (BCA) has kept foreign affairs funding below the rate of inflation. "], "subsections": []}, {"section_title": "Enduring vs. Supplemental/OCO Appropriations", "paragraphs": ["The Administration distinguishes between enduring (also called base, regular, or ongoing), emergency supplemental, and Overseas Contingency Operations (OCO) funds. Funds designated as emergency or OCO are not subject to procedural limits on discretionary spending in congressional budget resolutions, or the statutory discretionary spending limits provided through the Budget Control Act of 2011 for FY2011-FY2021 (BCA, P.L. 112-25 ). ", "Prior to FY2012, the President typically submitted to Congress additional funding requests (after the initial annual budget request), referred to as emergency supplementals. Supplemental funding packages have historically been approved to address emergency, war-related, or otherwise off-cycle budget needs. The Obama Administration requested emergency supplemental appropriations for urgent unexpected expenses, such as the U.S. international responses to Ebola, the Zika virus, and famine relief to Syria, Yemen, Somalia, and Northeast Nigeria. The Trump Administration has not requested supplemental funding for unexpected international crises.", "In contrast to emergency supplemental appropriations, the Obama Administration included within the regular budget request in FY2012 what it described as short-term, temporary, war-related funding for the frontline states of Iraq, Afghanistan, and Pakistan\u2014designated as Overseas Contingency Operations funds, or OCO. Congress had used the OCO designation in earlier years for Department of Defense appropriations to distinguish between ongoing versus war-related expenditures. In response to the FY2012 SFOPS OCO request, Congress appropriated OCO funds for the Department of State and USAID activities beyond the requested level and for more than just activities in Iraq, Afghanistan, and Pakistan. ", "In FY2012, Congress included OCO funds for the three frontline states as well as for Yemen, Somalia, Kenya, and the Philippines. The Obama Administration first requested OCO funds for a country other than the three frontline states in FY2015, when it requested OCO funds for Syria. In FY2018, the Trump Administration requested OCO funds for the Department of State and USAID activities in Iraq, Afghanistan, and Pakistan, as well as \"High Threat/High Risk\" areas. These included Syria, Yemen, Nigeria, Somalia, and South Sudan, among others. The Administration's initial FY2019 request included OCO funds for the Department of State and USAID, but after passage of the Bipartisan Budget Act of 2018 (BBA 2018, P.L. 115-123 ), the Administration requested that all previously requested SFOPS OCO funds be moved to enduring funds. For FY2020, the Trump Administration again requested no OCO funds for foreign affairs agencies.", "Since FY2012, OCO has ranged from a low of 14% of the total budget request in FY2014 to a high of 36% in FY2017, when the Bipartisan Budget Act of 2015 (BBA 2015, P.L. 114-74 ) set nonbinding OCO minimums for FY2016 and FY2017. The Bipartisan Budget Act of 2018 (BBA 2018, P.L. 115-123 ) raised discretionary spending limits for FY2018 and FY2019 and extended direct spending reductions through FY2027. With the raised spending limits, the Trump Administration's FY2019 budget request did not include the OCO designation for any foreign assistance funds. However, Congress has continued to appropriate OCO funds, including $8.0 billion in FY2019. The Administration's FY2020 budget request also does not request OCO funds for State-Foreign Operations appropriations.", "The BCA and BBAs have had an effect on foreign affairs funding levels and may have future implications. The Budget Control Act of 2011 sets limits on discretionary spending through FY2021 for defense and nondefense funding categories. Because OCO funds are not counted against the discretionary spending limits, the BCA has put downward pressure on SFOPS enduring/base funds, while OCO has increasingly funded other foreign affairs activities. In addition, the 2015 BBA significantly increased FY2016 and FY2017 OCO funding for foreign affairs over the requested funding levels in FY2015 and FY2016, further encouraging a migration of funds for ongoing activities into OCO-designated accounts. However, the 2018 BBA has had the opposite effect on foreign affairs OCO, allowing lawmakers to shift OCO funding back into enduring/base accounts. "], "subsections": []}]}]}}
{"id": "R41146", "title": "Small Business Administration 7(a) Loan Guaranty Program", "released_date": "2019-03-04T00:00:00", "summary": ["The Small Business Administration (SBA) administers several programs to support small businesses, including loan guaranty programs designed to encourage lenders to provide loans to small businesses \"that might not otherwise obtain financing on reasonable terms and conditions.\" The SBA's 7(a) loan guaranty program is considered the agency's flagship loan program. Its name is derived from Section 7(a) of the Small Business Act of 1953 (P.L. 83-163, as amended), which authorizes the SBA to provide business loans and loan guaranties to American small businesses.", "In FY2018, the SBA approved 60,353 7(a) loans totaling nearly $25.4 billion. The average approved 7(a) loan amount was $420,401. Proceeds from 7(a) loans may be used to establish a new business or to assist in the operation, acquisition, or expansion of an existing business.", "This report discusses the rationale provided for the 7(a) program; the program's borrower and lender eligibility standards and program requirements; and program statistics, including loan volume, loss rates, use of proceeds, borrower satisfaction, and borrower demographics. It also examines issues raised concerning the SBA's administration of the 7(a) program, including the oversight of 7(a) lenders and the program's lack of outcome-based performance measures.", "The report also surveys congressional and presidential actions taken in recent years to enhance small businesses' access to capital. For example,", "Congress approved legislation during the 111th Congress to provide more than $1.1 billion to temporarily subsidize the 7(a) and 504/Certified Development Companies (504/CDC) loan guaranty programs' fees and temporarily increase the 7(a) program's maximum loan guaranty percentage to 90% (funding was exhausted on January 3, 2011); raise the 7(a) program's gross loan limit from $2 million to $5 million; and establish an alternative size standard for the 7(a) and 504/CDC loan programs. The SBA waived the up-front, one-time loan guaranty fee for smaller 7(a) loans from FY2014 through FY2018; and is waiving the annual service fee for 7(a) loans of $150,000 or less made to small businesses located in a rural area or a HUBZone and reducing the up-front one-time guaranty fee for these loans from 2.0% to 0.6667% of the guaranteed portion of the loan in FY2019. The SBA has also waived the up-front, one-time loan guaranty fee for veteran loans under the SBAExpress program (up to $350,000) since January 1, 2014; and reduced the up-front, one-time loan guaranty fee on non-SBAExpress 7(a) loans to veterans from FY2015 through FY2018. P.L. 114-38, the Veterans Entrepreneurship Act of 2015, provided statutory authorization and made permanent the veteran's fee waiver under the SBAExpress program, except during any upcoming fiscal year for which the President's budget, submitted to Congress, includes a cost for the 7(a) program, in its entirety, that is above zero. Congress also approved legislation that increased the 7(a) program's authorization limit from $18.75 billion (on disbursements) in FY2014 to $23.5 billion in FY2015, $26.5 billion in FY2016, $27.5 billion in FY2017, $29.0 billion in FY2018, and $30 billion in FY2019. P.L. 115-189, the Small Business 7(a) Lending Oversight Reform Act of 2018, among other provisions, codified the SBA's Office of Credit Risk Management; required that office to annually undertake and report the findings of a risk analysis of the 7(a) program's loan portfolio; created a lender oversight committee within the SBA; authorized the Director of the Office of Credit Risk Management to undertake informal and formal enforcement actions against 7(a) lenders under specified conditions; redefined the credit elsewhere requirement; and authorized the SBA Administrator, starting in FY2019 and after providing at least 30 days' notice to specified congressional committees, to increase the amount of 7(a) loans not more than once during any fiscal year to not more than 115% of the 7(a) program's authorization limit.", "The Appendix provides a brief description of the 7(a) program's SBAExpress, Export Express, and Community Advantage programs."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Small Business Administration Loan Guaranty Programs", "paragraphs": ["The Small Business Administration (SBA) administers programs to support small businesses, including loan guaranty programs to encourage lenders to provide loans to small businesses \"that might not otherwise obtain financing on reasonable terms and conditions.\" The SBA's 7(a) loan guaranty program is considered the agency's flagship loan program. Its name is derived from Section 7(a) of the Small Business Act of 1953 (P.L. 83-163, as amended), which authorizes the SBA to provide and guarantee business loans to American small businesses. ", "The SBA also administers several 7(a) subprograms that offer streamlined and expedited loan procedures for particular groups of borrowers, including the SBAExpress, Export Express, and Community Advantage Pilot programs (see the Appendix for additional details). Although these subprograms have their own distinguishing eligibility requirements, terms, and benefits, they operate under the 7(a) program's authorization.", "Proceeds from 7(a) loans may be used to establish a new business or to assist in the operation, acquisition, or expansion of an existing business. Specific uses include to acquire land (by purchase or lease); improve a site (e.g., grading, streets, parking lots, and landscaping); purchase, convert, expand, or renovate one or more existing buildings; construct one or more new buildings; acquire (by purchase or lease) and install fixed assets; purchase inventory, supplies, and raw materials; finance working capital; and refinance certain outstanding debts.", "In FY2018, the SBA approved 60,353 7(a) loans totaling nearly $25.4 billion. The average approved 7(a) loan amount was $420,401. As will be discussed, the total number and amount of SBA 7(a) loans approved (and actually disbursed) declined in FY2008 and FY2009, increased during FY2010 and FY2011, declined somewhat in FY2012, and have increased since then.", "Historically, one of the justifications presented for funding the SBA's loan guaranty programs has been that small businesses can be at a disadvantage, compared with other businesses, when trying to obtain access to sufficient capital and credit. Congressional interest in the 7(a) loan program has increased in recent years because of concerns that small businesses might be prevented from accessing sufficient capital to enable them to grow and create jobs. ", "Some Members of Congress have argued that the SBA should be provided additional resources to assist small businesses in acquiring capital necessary to start, continue, or expand operations with the expectation that in so doing small businesses will create jobs. Others worry about the long-term adverse economic effects of spending programs that increase the federal deficit. They advocate business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to help small businesses further economic growth and job creation.", "This report discusses the rationale provided for the 7(a) program; the program's borrower and lender eligibility standards and program requirements; and program statistics, including loan volume, loss rates, use of the proceeds, borrower satisfaction, and borrower demographics. It also examines issues raised concerning the SBA's administration of the 7(a) program, including the oversight of 7(a) lenders and the program's lack of outcome-based performance measures.", "This report also surveys congressional and presidential actions taken in recent years to help small businesses gain greater access to capital. For example, during the 111 th Congress", "P.L. 111-5 , the American Recovery and Reinvestment Act of 2009 (ARRA), provided the SBA an additional $730 million, including $375 million to temporarily subsidize the 7(a) and 504/Certified Development Companies (504/CDC) loan guaranty programs' fees ($299 million) and to temporarily increase the 7(a) program's maximum loan guaranty percentage to 90% ($76 million). P.L. 111-240 , the Small Business Jobs Act of 2010, provided $505 million (plus $5 million for administrative expenses) to extend the fee subsidies and 90% loan guaranty percentage through December 31, 2010; increased the 7(a) program's gross loan limit from $2 million to $5 million; and established an alternative size standard for the 7(a) and 504/CDC loan programs to enable more small businesses to qualify for assistance. P.L. 111-322 , the Continuing Appropriations and Surface Transportation Extensions Act, 2011, authorized the SBA to continue the fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage through March 4, 2011, or until available funding was exhausted (which occurred on January 3, 2011).", "During the 112 th Congress, several bills were introduced to expand the 7(a) program:", "S. 1828 , a bill to increase small business lending (and for other purposes), would have reinstated for one year following the date of its enactment the fee subsidies for the 7(a) and 504/CDC loan guaranty programs and the 90% loan guaranty percentage for the 7(a) program, which were originally authorized by ARRA. H.R. 2936 , the Small Business Administration Express Loan Extension Act of 2011, would have extended a one-year increase in the maximum loan amount for the SBAExpress program from $350,000 to $1 million for an additional year. That temporary increase was authorized by P.L. 111-240 and expired on September 27, 2011. S. 532 , the Patriot Express Authorization Act of 2011, would have provided statutory authorization for the Patriot Express Pilot Program and increased its loan guaranty percentages and its maximum loan amount from $500,000 to $1 million. The Patriot Express Pilot Program was subsequently discontinued by the SBA on December 31, 2013.", "During the 113 th Congress, the SBA ", "waived the up-front, one-time loan guaranty fee and ongoing servicing fee for 7(a) loans of $150,000 or less approved in FY2014 and FY2015 as a means to encourage the demand for smaller 7(a) loans. H.R. 2462 , the Small Business Opportunity Acceleration Act of 2013, would have made the fee waiver for smaller 7(a) loans permanent. waived the up-front, one-time loan guaranty fee for a loan to a veteran or to a veteran's spouse under the SBAExpress program (up to $350,000) from January 1, 2014, through the end of FY2015 (called the SBA Veterans Advantage Program). waived 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $150,001 up to and including $5 million in FY2015.", "In addition, P.L. 113-235 , the Consolidated and Further Continuing Appropriations Act, 2015, provided statutory authorization for the Veterans Advantage fee waiver in FY2015. ", "During the 114 th Congress, the SBA", "waived the up-front, one-time loan guaranty fee for 7(a) loans of $150,000 or less approved in FY2016 and FY2017 as a means to encourage the demand for smaller 7(a) loans. waived the annual service fee for 7(a) loans of $150,000 or less approved in FY2016 (increased to 0.546% in FY2017). waived 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $150,001 to $5 million in FY2016; and 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $150,001 to $500,000 in FY2017.", "In addition", "P.L. 114-38 , the Veterans Entrepreneurship Act of 2015, provided statutory authorization and made permanent the veteran's fee waiver under the SBAExpress program, except during any upcoming fiscal year for which the President's budget, submitted to Congress, includes a cost for the 7(a) program, in its entirety, that is above zero. The SBA waived this fee in FY2016, FY2017, FY2018, and is waiving this fee in FY2019. The act also increased the 7(a) program's FY2015 authorization limit of $18.75 billion (on disbursements) to $23.5 billion. P.L. 114-113 , the Consolidated Appropriations Act, 2016, increased the 7(a) program's authorization limit to $26.5 billion in FY2016. P.L. 114-223 , the Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2017, authorized the SBA to use funds from its business loan program account \"to accommodate increased demand for commitments for [7(a)] general business loans\" for the duration of the continuing resolution (initially December 9, 2016, later extended by P.L. 114-254 , the Further Continuing and Security Assistance Appropriations Act, 2017, to April 28, 2017). ", "During the 115 th Congress, the SBA", "waived the up-front, one-time loan guaranty fee for 7(a) loans of $125,000 or less approved in FY2018 as a means to encourage the demand for smaller 7(a) loans. waived 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $125,001 to $350,000 in FY2018. is waiving the annual service fee for 7(a) loans of $150,000 or less made to small businesses located in a rural area or a HUBZone and reducing the up-front one-time guaranty fee for these loans from 2.0% to 0.6667% of the guaranteed portion of the loan in FY2019.", "In addition ", "P.L. 115-31 , the Consolidated Appropriations Act, 2017, increased the 7(a) program's authorization limit to $27.5 billion in FY2017 and P.L. 115-141 , the Consolidated Appropriations Act, 2018, increased the 7(a) program's authorization limit to $29.0 billion in FY2018. P.L. 115-189 , the Small Business 7(a) Lending Oversight Reform Act of 2018, among other provisions, codified the SBA's Office of Credit Risk Management; required that office to annually undertake and report the findings of a risk analysis of the 7(a) program's loan portfolio; created a lender oversight committee within the SBA; authorized the Director of the Office of Credit Risk Management to undertake informal and formal enforcement actions against 7(a) lenders under specified conditions; redefined the credit elsewhere requirement; and authorized the SBA Administrator to increase the amount of 7(a) loans not more than once during any fiscal year to not more than 115% of the 7(a) program's authorization limit. The SBA is required to provide at least 30 days' notice of its intent to exceed the 7(a) loan program's authorization limit to the House and Senate Committees on Small Business and the House and Senate Committees on Appropriations' Subcommittees on Financial Services and General Government and may exercise this option only once per fiscal year. P.L. 115-232 , the John S. McCain National Defense Authorization Act for Fiscal Year 2019, included provisions originally in H.R. 5236 , the Main Street Employee Ownership Act of 2018, to make 7(a) loans more accessible to employee-owned small businesses (ESOPs) and cooperatives. The act clarified that 7(a) loans to ESOPs may be made under the Preferred Lenders Program; allows the seller to remain involved as an officer, director, or key employee when the ESOP or cooperative has acquired 100% ownership of the small business; and authorizes the SBA to finance transition costs to employee ownership and waive any mandatory equity injection by the ESOP or cooperative to help finance the change of ownership. The act also directs the SBA to create outreach programs and an interagency working group to promote lending to ESOPs and cooperatives. President Trump's FY2019 budget request included proposals to offset SBA business loan administrative costs by, among other provisions, (1) allowing the SBA to set the 7(a) program's annual servicing fee at rates below zero credit subsidy; (2) increasing the 7(a) loan program's FY2019 annual servicing fee's cap from 0.55% to 0.625%; and (3) increasing the FY2019 upfront loan guarantee fee on 7(a) loans over $1 million by 0.25%. The Trump Administration estimated that these changes would raise $93 million in additional revenue. The Trump Administration also requested that the 7(a) loan program's authorization limit be increased to $30.0 million in FY2019; that the SBA be allowed to further increase the 7(a) loan program's authorization amount in FY2019 by 15% under specified circumstances \"to better equip the SBA to meet peaks in demand while continuing to operate at zero subsidies\"; and that the SBAExpress program's loan limit be increased from $350,000 to $1 million.", "During the 116 th Congress", "P.L. 116-6 , the Consolidated Appropriations Act, 2019, increased the 7(a) program's authorization limit to $30.0 billion in FY2019.", "This report's Appendix provides a brief description of the 7(a) program's SBAExpress, Export Express, and Community Advantage programs."], "subsections": []}, {"section_title": "Borrower Eligibility Standards and Program Requirements", "paragraphs": [], "subsections": [{"section_title": "Borrower Eligibility Standards", "paragraphs": ["To be eligible for an SBA business loan, a small business applicant must ", "be located in the United States; be a for-profit operating business (except for loans to eligible passive companies and businesses engaged in specified industries, such as insurance companies and financial institutions primarily engaged in lending); qualify as small under the SBA's size requirements; demonstrate a need for the desired credit; and be certified by a lender that the desired credit is unavailable to the applicant on reasonable terms and conditions from nonfederal sources without SBA assistance.", "To qualify for an SBA 7(a) loan, applicants must be creditworthy and able to reasonably assure repayment. SBA requires lenders to consider the strength of the business and the applicant's", "character, reputation, and credit history; experience and depth of management; past earnings, projected cash flow, and future prospects; ability to repay the loan with earnings from the business; sufficient invested equity to operate on a sound financial basis; potential for long-term success; nature and value of collateral (although inadequate collateral will not be the sole reason for denial of a loan request); and affiliates' effect on the applicant's repayment ability."], "subsections": []}, {"section_title": "Borrower Program Requirements", "paragraphs": [], "subsections": [{"section_title": "Use of Proceeds", "paragraphs": ["Borrowers may use 7(a) loan proceeds to establish a new business or to assist in the operation, acquisition, or expansion of an existing business. 7(a) loan proceeds may be used to", "acquire land (by purchase or lease); improve a site (e.g., grading, streets, parking lots, landscaping), including up to 5% for community improvements such as curbs and sidewalks; purchase one or more existing buildings; convert, expand, or renovate one or more existing buildings; construct one or more new buildings; acquire (by purchase or lease) and install fixed assets; purchase inventory, supplies, and raw materials; finance working capital; and refinance certain outstanding debts.", "Borrowers are prohibited from using 7(a) loan proceeds to", "refinance existing debt where the lender is in a position to sustain a loss and the SBA would take over that loss through refinancing; effect a partial change of business ownership or a change that will not benefit the business; permit the reimbursement of funds owed to any owner, including any equity injection or injection of capital for the business's continuance until the loan supported by the SBA is disbursed; repay delinquent state or federal withholding taxes or other funds that should be held in trust or escrow; or pay for a nonsound business purpose."], "subsections": []}, {"section_title": "Loan Amounts", "paragraphs": ["As mentioned previously, P.L. 111-240 increased the 7(a) program's maximum gross loan amount for any one 7(a) loan from $2 million to $5 million (up to $3.75 million maximum guaranty). In FY2018, the average approved 7(a) loan amount was $420,401, and about 36% of all 7(a) loans exceeded $2 million."], "subsections": []}, {"section_title": "Loan Terms, Interest Rate, and Collateral", "paragraphs": [], "subsections": [{"section_title": "Loan Terms", "paragraphs": ["A 7(a) loan is required to have the shortest appropriate term, depending upon the borrower's ability to repay. The maximum term is 10 years, unless the loan finances or refinances real estate or equipment with a useful life exceeding 10 years. In that case, the loan term can be up to 25 years, including extensions."], "subsections": []}, {"section_title": "Interest Rate", "paragraphs": ["Lenders are allowed to charge borrowers \"a reasonable fixed interest rate\" or, with the SBA's approval, a variable interest rate. The SBA uses a multistep formula to determine the maximum allowable fixed interest rate for all 7(a) loans (with the exception of the Export Working Capital Program and Community Advantage loans) and periodically publishes that rate and the maximum allowable variable interest rate in the Federal Register .", "The maximum allowable fixed interest rates in February 2019 are 13.50% for 7(a) loans of $25,000 or less; 12.50% for loans over $25,000 but not exceeding $50,000; 11.50% for loans over $50,000 up to and including $250,000; and 10.50% loans greater than $250,000.", "The 7(a) program's maximum allowable variable interest rate may be pegged to the lowest prime rate (5.50% in February 2019), the 30-day LIBOR rate plus 300 basis points (5.51% in February 2019), or the SBA optional peg rate (3.13% in the second quarter of FY2019). The optional peg rate is a weighted average of rates the federal government pays for loans with maturities similar to the average SBA loan."], "subsections": []}, {"section_title": "Collateral", "paragraphs": ["For 7(a) loans of $25,000 or less, the SBA does not require lenders to take collateral. For 7(a) loans exceeding $25,000 to $350,000, the lender must follow the collateral policies and procedures that it has established and implemented for its similarly sized non-SBA-guaranteed commercial loans. However, the lender must, at a minimum, obtain a first lien on assets financed with loan proceeds, and a lien on all of the applicant's fixed assets, including real estate, up to the point that the loan is fully secured. For 7(a) loans exceeding $350,000, the SBA requires lenders to collateralize the loan to the maximum extent possible up to the loan amount. If business assets do not fully secure the loan, the lender must take available equity in the principal's personal real estate (residential and investment) as collateral.", "7(a) loans are considered \"fully secured\" if the lender has taken security interests in all available fixed assets with a combined \"net book value\" up to the loan amount. The SBA directs lenders to not decline a loan solely on the basis of inadequate collateral because \"one of the primary reasons lenders use the SBA-guaranteed program is for those Applicants that demonstrate repayment ability but lack adequate collateral to repay the loan in full in the event of a default.\""], "subsections": []}]}]}]}, {"section_title": "Lender Eligibility Standards and Program Requirements", "paragraphs": [], "subsections": [{"section_title": "Lender Eligibility Standards", "paragraphs": ["Lenders must have a continuing ability to evaluate, process, close, disburse, service, and liquidate small business loans; be open to the public for the making of such loans (and not be a financing subsidiary, engaged primarily in financing the operations of an affiliate); have continuing good character and reputation; and be supervised and examined by a state or federal regulatory authority, satisfactory to the SBA. They must also maintain satisfactory performance, as determined by the SBA through on-site review/examination assessments, historical performance measures (such as default rate, purchase rate, and loss rate), and loan volume to the extent that it affects performance measures. In FY2017, 1,978 lenders provided 7(a) loans."], "subsections": []}, {"section_title": "PLP Lenders", "paragraphs": ["The SBA started the Preferred Lenders Program (PLP) on March 1, 1983, initially on a pilot basis. It is designed to streamline the procedures necessary to provide financial assistance to small businesses by delegating the final credit decision and most servicing and liquidation authority and responsibility to carefully selected PLP lenders. PLP loan approvals are subject only to a brief eligibility review and the assignment of a loan number by SBA. PLP lenders draft the SBA Authorization (of loan guaranty approval) without the SBA's review, and execute it on behalf of the SBA. In FY2018, PLP lenders approved 26,497 7(a) loans (43.9% of all 7(a) loans), amounting to $18.8 billion (74.2% of the total amount approved). ", "PLP lenders must comply with all of the SBA's business loan eligibility requirements, credit policies, and procedures. The PLP lender is required to stay informed on, and apply, all of the SBA's loan program requirements. They must also complete and retain in the lender's file all forms and documents required of standard 7(a) loan packages. "], "subsections": []}, {"section_title": "Lender Program Requirements", "paragraphs": [], "subsections": [{"section_title": "The Application Process", "paragraphs": ["Borrowers submit applications for a 7(a) business loan to private lenders. The lender reviews the application and decides if it merits a loan on its own or if it has some weaknesses which, in the lender's opinion, do not meet standard, conventional underwriting guidelines and require additional support in the form of an SBA guaranty. The SBA guaranty assures the lender that if the borrower does not repay the loan and the lender has adhered to all applicable regulations concerning the loan, the SBA will reimburse the lender for its loss, up to the percentage of the SBA's guaranty. The small business borrowing the money remains obligated for the full amount due.", "If the lender determines that it is willing to provide the loan, but only with an SBA guaranty, it submits the application for approval to the SBA's Loan Guaranty Processing Center (LGPC) through the SBA's E-Tran (Electronic Loan Processing/Servicing) website (which is available through SBA One, the SBA's automated lending platform) or, if attachments to the application are too large for E-Tran, by secured electronic file transfer.", "The LGPC has two physical locations: Citrus Heights, CA, and Hazard, KY. This center has responsibility for processing 7(a) loan guaranty applications for lenders who do not have delegated authority to make 7(a) loans without the SBA's final approval. ", "The SBA has authorized PLP and express lenders to make credit decisions without SBA review prior to loan approval. However, the PLP and express lender's analysis is subject to the SBA's review and determination of adequacy when the lender requests the SBA to purchase its guaranty and when the SBA is conducting a review of the lender.", "As an additional safeguard against the potential for loan defaults, the SBA now requires all non-express 7(a) loans of $350,000 or less to be SBA credit scored through E-Tran prior to submission/approval. ", "If the credit score is below the minimum set by the SBA (currently 140 for 7(a) loans of $350,000 or less, including Community Advantage loans), the loan must be submitted to the SBA for approval with a full credit write-up for consideration. The loan cannot be processed under delegated authority. If the credit score is acceptable to the SBA, the lender is a PLP lender, and the loan is eligible to be processed under the PLP lender's delegated authority, the lender will receive an SBA loan number indicating that the loan is approved. The PLP lender's documentation, including underwriting, closing, and servicing, must be maintained in their files, and can be reviewed by the SBA at any time. If the lender is not a PLP lender or if the loan is not eligible to be submitted under the PLP lender's delegated authority, the lender must refer the loan to the LGPC for review.", "The application materials required for a SBA guaranty vary depending on the size of the loan ($350,000 or less versus exceeding $350,000) and the method of processing used by the lender (standard versus expedited/express). ", "The following SBA documentation is required for all 7(a) standard loans of $350,000 or less:", "Form 191 9: Borrower Information Form . SBA form 1919 provides information about the borrower (name, name of business, social security number, date and place of birth, gender, race, veteran, etc.); the loan request; any indebtedness; the principals and affiliates; current or previous government financing; the applicant's eligibility (e.g., criminal information, citizenship status); the loan's eligibility for delegated or expedited processing (e.g., the borrower is not more than 60 days delinquent in child support payments, not proposed or presently excluded from participation in this transaction by any federal department or agency, has no potential for a conflict of interest due to an owner being a current or former SBA employee, a Member of Congress, or a SCORE volunteer); and, among other disclosures, the firm's existing number of employees, the number of jobs to be created as a result of the loan, and the number of jobs that will be retained as a result of the loan that would have otherwise been lost. Form 912 : Statement of Personal History . SBA form 912 is required if the borrower reports on Form 1919 an arrest in the past six months for a criminal offense or had ever been convicted, plead guilty, plead nolo contendere, been placed on pretrial diversion, or been placed on any form of parole or probation (including probation before judgment) of any criminal offense. Form 912 requires the borrower to furnish details concerning his or her offense(s) and authorizes the SBA's Office of Inspector General to request criminal record information about the applicant from criminal justice agencies for determining program eligibility. It must be dated within 90 days of the application's submission to the SBA. Form 159 : Fee Disclosure and Compensation Agreement . SBA form 159 is required if the borrower reports on Form 1919 that he or she used (or intends to use) a packager, broker, accountant, lawyer, etc. to assist in preparing the loan application or any related materials. SBA form 159 is also required if the lender retains the services of a packager, broker, accountant, lawyer, etc. to assist in preparing the loan application or any related materials. Form 159 provides identifying information about the packager, broker, accountant, lawyer, etc. and the fees paid to any such person. Form 601 : Agreement of Compliance (prohibiting discrimination). SBA form 601 is required if the borrower reports on Form 1919 that more than $10,000 of the loan proceeds will be used for construction. Form 601 certifies that the borrower will cooperate actively in obtaining compliance with Executive Order 11246, which prohibits discrimination on the basis of race, color, religion, sex, or national origin and requires affirmative action to ensure equality of opportunity in all aspects of employment related to federally assisted construction projects in excess of $10,000. Form 1920 : Lenders Application for Guaranty for all 7(a) Programs . SBA form 1920 provides identifying information about the lender; the loan type (standard, SBAExpress, Export Express, etc.); loan terms; use of proceeds; the business's size and information about affiliates, if any; the applicant's character; if credit is reasonably available elsewhere; the type of business; potential conflicts of interest; and other information such the number of jobs created or retained. PLP lenders complete the form and retain it in the loan file. Other lenders must submit this form electronically to the LGPC. Verification of Alien Status . Documentation of the U.S. Citizenship and Immigration Services (USCIS) status of each alien is required prior to submission of the application to the SBA. Lender's Credit Memo randum . For loans up to and including $350,000, the Lender's Credit Memorandum includes a brief description of the history of the business and its management; the debt service coverage ratio (net operating income compared to total debt service must be at least 1:1); statement that the lender has reconciled financial data (including seller's financial data) against IRS transcripts; an owner/guarantor analysis (including personal financial condition); lender's discussion of life insurance requirements; explanation and justification for any refinancing; analysis of credit, including lender's rationale for recommending approval; for a change of ownership, discussion/analysis of business valuation and how the change benefits the business; discussion of any liens, judgments, or bankruptcy filings; and discussion of any other relevant information. For loans exceeding $350,000, the Lender's Credit Memorandum must also include an analysis of collateral and a financial analysis which includes an analysis of the historical financial statements; defining assumptions supporting projected cash flow; and, when used, spread of pro forma balance sheet, ratio calculations, and working capital analysis. Cash Flow Projections . A projection of the borrower's cash flow, month-by-month for one year, is required for all new businesses, and when otherwise applicable.", "The following forms and documentation are also required for 7(a) standard loans exceeding $350,000:", "Form 413 : Personal Financial Statement . SBA form 413 provides detailed information concerning the applicant's assets and liabilities and must be dated within 90 days of submission to the SBA, on all owners of 20% or more (including the assets of the owner's spouse and any minor children), and proposed guarantors. Lenders may substitute their own Personal Financial Statement form. Form 1846 : Statement Regarding Lobbying . SBA Form 1846 must be signed and dated by lender. It indicates that if any funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an officer or employee of a Member of Congress in connection with this commitment, the lender will complete and submit a Standard Form LLL \"Disclosure of Lobbying Activities.\" A copy of Internal Revenue Service (IRS) Form 4506-T, Request for Copy of Tax Return . Lenders must identify the date IRS Form 4506-T was sent to the IRS. For nondelegated lenders, verification of IRS Form 4506-T is required prior to submission of the application to the SBA. For PLP and express lenders, verification of IRS Form 4506-T is required prior the first disbursement. Business Financial Statements or tax returns dated within 180 days of the application's submission to the SBA, consisting of (1) year-end balance sheets for the last three years, (2) year-end profit and loss statements for the last three years, (3) reconciliation of net worth, (4) interim balance sheet, and (5) interim profit and loss statements. Affiliate and Subsidiary Financial Statements or tax returns dated within 180 days of the application's submission to the SBA, consisting of (1) year-end balance sheets for the last three years, (2) year-end profit and loss statements for the last three years, (3) reconciliation of net worth, (4) interim balance sheet, and (5) interim profit and loss statements. A copy of the Le ase Agreement , if applicable. A detailed Schedule of C ollateral . A detailed List of M&E (machinery and equipment) being purchased with SBA loan proceeds, including cost quotes. If real estate is to be purchased with the loan proceeds, a Real Estate Appraisal , Environmental Investigation Report questionnaire, a cost breakdown, and copy of any Real Estate Purchase Agreements . If purchasing an existing business with loan proceeds, a (1) copy of buy-sell agreement, (2) copy of business valuation, (3) pro forma balance sheet for the business being purchased as of the date of transfer, (4) copy of the seller's financial statements for the last three complete fiscal years or for the number of years in business if less than three years, (5) interim statements no older than 180 days from date of submission to the SBA, and (6) if the seller's financial statements are not available, the seller must provide an alternate source of verifying revenues. An explanation of the type and source of applicant's equity injection. Proper evidence of a borrower's equity injection may include the copy of a check together with proof it was processed, or a copy of an escrow settlement sheet with a bank account statement showing the injection into the business prior to disbursement. A promissory note, \"gift letter,\" or financial statement is generally not sufficient evidence."], "subsections": []}, {"section_title": "SBA Guaranty and Servicing Fees", "paragraphs": ["To offset its costs, the SBA is authorized to charge lenders an up-front, one-time guaranty fee and an annual, ongoing service fee for each 7(a) loan approved and disbursed. The SBA's fees vary depending on loan amount and loan maturity. The maximum guaranty fee for 7(a) loans with maturities exceeding 12 months is set by statute and varies depending on the loan amount. The fee is a percentage of the SBA guaranteed portion of the loan. On short-term loans (maturities of less than 12 months), the lender must pay the guaranty fee to the SBA electronically through www.pay.gov within 10 days from the date the SBA loan number is assigned. If the fee is not received within the specified time frame, the SBA will cancel the guaranty. On loans with maturities in excess of 12 months, the lender must pay the guaranty fee to the SBA within 90 days of the date of loan approval. ", "For short-term loans, the lender may charge the guaranty fee to the borrower only after the lender has paid the guaranty fee. For loans with maturities in excess of 12 months, the lender may charge the guaranty fee to the borrower after initial disbursement. Lenders are permitted to retain 25% of the guaranty fee on loans with a gross amount of $150,000 or less.", "The annual service fee cannot exceed 0.55% of the outstanding balance of the SBA's share of the loan and is required to be no more than the \"rate necessary to reduce to zero the cost to the Administration\" of making guaranties. The lender's annual service fee to the SBA cannot be charged to the borrower.", "In an effort to assist small business owners, the SBA ", "waived its annual service fee for all 7(a) loans of $150,000 or less approved from FY2014 through FY2016 (the annual service fee for other small businesses was 0.52% in FY2014, 0.519% in FY2015, and 0.473% in FY2016); is waiving the annual service fee for 7(a) loans of $150,000 or less made to small businesses located in a rural area or a HUBZone in FY2019 (the annual service fee for other small businesses is 0.55% in FY2019); waived the up-front, one-time guaranty fee for all 7(a) loans of $150,000 or less approved from FY2014 through FY2017; waived the up-front, one-time guaranty fee for all 7(a) loans of $125,000 or less approved in FY2018; and is reducing the up-front one-time guaranty fee for loans made small businesses located in a rural area or a HUBZone from 2.0% to 0.6667% of the guaranteed portion of the loan in FY2019. ", " Table 1 shows the annual service fee and guaranty fee for 7(a) loans in FY2019. The annual service fee is a percentage of the outstanding balance of the SBA's share of the loan. The guaranty fee is a percentage of the SBA guaranteed portion of the loan.", "As mentioned previously, the SBA waived its up-front, one-time guaranty fee for all veteran loans under the 7(a) SBAExpress program (up to $350,000) from January 1, 2014, through the end of FY2015. P.L. 114-38 , the Veterans Entrepreneurship Act of 2015, made this fee waiver permanent, except during any upcoming fiscal year for which the President's budget, submitted to Congress, includes a cost for the 7(a) program, in its entirety, that is above zero. The SBA waived this fee in FY2016, FY2017, and FY2018 and is waiving it in FY2019. ", "The SBA also waived 50% of the up-front, one-time guaranty fee on all non-SBAExpress 7(a) loans of $150,001 to $5 million for veterans in FY2015 and FY2016; 50% of the up-front, one-time guaranty fee on all non-SBAExpress 7(a) loans of $150,001 to $500,000 for veterans in FY2017; and 50% of the up-front, one-time guaranty fee on all non-SBAExpress 7(a) loans of $125,001 to $350,000 for veterans in FY2018.", "The Obama Administration argued that fee waivers for 7(a) loans of $150,000 or less were necessary because the demand for smaller 7(a) loans had fallen and the waiver reduction \"can be achieved with zero credit subsidy appropriations\" because the \"annual fees for larger 7(a) loans will cover the cost for those smaller loans.\" The Administration also contended that waiving the fees on smaller SBA loans would \"promote lending to small businesses that face the most constraints on credit access.\"", "For context, 7(a) loans of $150,000 or less accounted for about 11.8% of the total amount of 7(a) loan approvals in FY2010 ($1.46 billion of $12.41 billion); 8.3% in FY2011 ($1.63 billion of $19.64 billion); 9.5% in FY2012 ($1.44 billion of $15.15 billion); 8.1% in FY2013 ($1.45 billion of $17.87 billion); 9.7% in FY2014 ($1.86 billion of $19.19 billion); 9.7% in FY2015 ($2.28 billion of $23.58 billion); 9.4% in FY2016 ($2.75 billion of $24.13 billion), and 9.2% in FY2017 ($2.33 billion of $25.45 billion).", "The SBA also announced that eliminating guaranty fees for 7(a) loans of $150,000 or less ($125,000 or less in FY2018) was part of its broader effort to \"reduce barriers, attract new lenders, grow loan volumes of existing lenders and improve access to capital for small businesses and entrepreneurs.\" ", "Some in Congress questioned whether it is appropriate to require borrowers of larger 7(a) loans to, in effect, subsidize borrowers of smaller 7(a) loans, who might be direct competitors. They have suggested that it might be more appropriate to reduce fees across-the-board without regard to loan size. "], "subsections": []}, {"section_title": "Lender Packaging, Servicing, and Other Fees", "paragraphs": ["The lender may charge an applicant \"reasonable fees\" customary for similar lenders in the geographic area where the loan is being made for packaging and other services. The lender must advise the applicant in writing that the applicant is not required to obtain or pay for unwanted services. These fees are subject to SBA review at any time, and the lender must refund any such fee considered unreasonable by the SBA.", "The lender may also charge an applicant an additional fee if, subject to prior written SBA approval, all or part of a loan will have extraordinary servicing needs. The additional fee cannot exceed 2% per year on the outstanding balance of the part requiring special servicing (e.g., field inspections for construction projects). The lender may also collect from the applicant necessary out-of-pocket expenses, including filing or recording fees, photocopying, delivery charges, collateral appraisals, environmental impact reports that are obtained in compliance with SBA policy, and other direct charges related to loan closing. The lender is prohibited from requiring the borrower to pay any fees for goods and services, including insurance, as a condition for obtaining an SBA guaranteed loan, and from imposing on SBA loan applicants processing fees, origination fees, application fees, points, brokerage fees, bonus points, and referral or similar fees.", "The lender is also allowed to charge the borrower a late payment fee not to exceed 5% of the regular loan payment when the borrower is more than 10 days delinquent on its regularly scheduled payment. The lender may not charge a fee for full or partial prepayment of a loan.", "For loans with a maturity of 15 years or longer, the borrower must pay to the SBA a subsidy recoupment fee when the borrower voluntarily prepays 25% or more of its loan in any one year during the first three years after first disbursement. The fee is 5% of the prepayment amount during the first year, 3% in the second year, and 1% in the third year."], "subsections": []}]}]}, {"section_title": "Program Statistics", "paragraphs": [], "subsections": [{"section_title": "Loan Volume", "paragraphs": ["As shown in Table 2 , the total number and amount of SBA 7(a) loans approved (before and after cancellations and modifications) declined in FY2008 and FY2009, increased during FY2010 and FY2011, declined somewhat in FY2012, and have increased since then. The number and amount of 7(a) loans approved annually is higher than the number and amount of loans disbursed because some borrowers decide not to accept the loan for a variety of reasons, such as financing was secured elsewhere, the funds are no longer needed, or there was a change in business ownership. ", "The SBA attributed the decreased number and amount of 7(a) loans approved in FY2008 and FY2009 to a reduction in the demand for small business loans resulting from the economic uncertainty of the recession (December 2007-June 2009) and to tightened loan standards imposed by lenders concerned about the possibility of higher loan default rates resulting from the economic slowdown. The SBA attributed the increased number of loans approved in FY2010 and FY2011 to legislation that provided funding to temporarily reduce the 7(a) program's loan fees and temporarily increase the 7(a) program's loan guaranty percentage to 90% for all standard 7(a) loans from up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000.", "The fee subsidies and 90% loan guaranty percentage were in place during most of FY2010 and the first quarter of FY2011. The increased number and amount of 7(a) loans approved since FY2012 are generally attributed to improving economic conditions.", " Table 2 also provides the 7(a) program's unpaid principal balance by fiscal year. Precise measurements of the small business credit market are not available. However, the SBA has estimated that the small business credit market (outstanding bank loans of $1 million or less, plus credit extended by finance companies and other sources) is roughly $1.2 trillion. The 7(a) program's unpaid principal balance of $92.41 billion at the end of FY2018 was about 7.7% of that amount."], "subsections": []}, {"section_title": "Appropriations for Loan Subsidy Costs", "paragraphs": ["One of the SBA's goals is to achieve a zero subsidy rate for its loan guaranty programs. A zero subsidy rate occurs when the SBA's loan guaranty programs generate sufficient revenue through fee collections and recoveries of collateral on purchased (defaulted) loans to not require appropriations to issue new loan guarantees. ", "From 2005 to 2009, the SBA did not request appropriations to subsidize the cost of any of its loan guaranty programs, including the 7(a) program. However, as indicated in Table 3 , loan guaranty fees and loan liquidation recoveries did not generate enough revenue to cover loan losses in the 7(a) loan guaranty program from FY2010 through FY2013 and in the 504/CDC loan guaranty program from FY2012 through FY2015. Appropriations were provided to address the shortfalls.", "Congress did not approve appropriations for 7(a) and 504/CDC loan guaranty program credit subsidies for FY2016 through FY2019 because the President's budget request indicated that those programs did not require appropriations for credit subsidies in those fiscal years."], "subsections": []}, {"section_title": "Administrative Expenses", "paragraphs": ["In FY2017, the SBA spent $82.2 million on the 7(a) program for administrative expenses, including $63.0 million for loan making, $4.1 million for loan servicing, and $15.1 million for loan liquidation. Also, the SBA spent $36.9 million on lender oversight, including oversight of 7(a) lenders. The SBA anticipated that 7(a) program administrative expenses will be about $82.2 million in FY2018 and $84.5 million in FY2019. In addition, the SBA anticipated that it will spend about $36.9 million in FY2018 and $36.6 million in FY2019 for lender oversight of the SBA's various lending programs."], "subsections": []}, {"section_title": "Use of Proceeds and Borrower Satisfaction", "paragraphs": ["In FY2017, borrowers used 7(a) loan proceeds to", "purchase land or make land improvements (26.62%); purchase a business (17.06%); finance working capital (15.59%); pay off loans, accounts payable or notes payable (13.23%); construct new buildings (6.06%); purchase equipment (5.76%); make leasehold improvements (3.25%); expand or renovate current buildings (2.39%); refinance existing debt (1.40%); and cover other expenses (8.64%).", "In 2008, the Urban Institute released the results of an SBA-commissioned study of the SBA's loan guaranty programs. As part of its analysis, the Urban Institute surveyed a random sample of SBA loan guaranty borrowers. The survey indicated that most of the 7(a) borrowers responding to the survey rated their overall satisfaction with their 7(a) loan and loan terms as either excellent (18%) or good (50%). One out of every five 7(a) borrowers (20%) rated their overall satisfaction with their 7(a) loan and loan terms as fair, and 6% rated their overall satisfaction with their 7(a) loan and loan terms as poor (7% reported don't know or did not respond). In addition, 90% of the survey's respondents reported that the 7(a) loan was either very important (62%) or somewhat important (28%) to their business success (2% reported somewhat unimportant, 3% reported very unimportant, and 4% reported don't know or did not respond)."], "subsections": []}, {"section_title": "Borrower Demographics", "paragraphs": ["The Urban Institute found that about 9.9% of conventional small business loans are issued to minority-owned small businesses, and about 16% of conventional small business loans are issued to women-owned businesses. In FY2018, 32.8% of 7(a) loan approvals ($8.32 billion of $25.37 billion) were to minority-owned businesses (23.0% Asian, 6.0% Hispanic, 3.1% African-American, and 0.7% American Indian) and 13.6% ($3.46 billion of $25.37 billion) were to women-owned businesses. From its comparative analysis of conventional small business loans and the SBA's loan guaranty programs, the Urban Institute concluded the following:", "SBA's loan programs are designed to enable private lenders to make loans to creditworthy borrowers who would otherwise not be able to qualify for a loan. As a result, there should be differences in the types of borrowers and loan terms associated with SBA-guaranteed and conventional small business loans.", "Our comparative analysis shows such differences. Overall, loans under the 7(a) and 504 programs were more likely to be made to minority-owned, women-owned, and start-up businesses (firms that have historically faced capital gaps) as compared to conventional small business loans. Moreover, the average amounts for loans made under the 7(a) and 504 programs to these types of firms were substantially greater than conventional small business loans to such firms. These findings suggest that the 7(a) and 504 programs are being used by lenders in a manner that is consistent with SBA's objective of making credit available to firms that face a capital opportunity gap."], "subsections": []}]}, {"section_title": "Congressional Issues", "paragraphs": [], "subsections": [{"section_title": "Access to Capital", "paragraphs": ["Congressional interest in the 7(a) loan program has increased in recent years largely because of concerns that small businesses might be prevented from accessing sufficient capital to enable them to assist in the economic recovery. During the 110 th and 111 th Congresses, several laws were enacted to increase the supply and demand for capital for both large and small businesses. For example, in 2008, Congress adopted P.L. 110-343 , the Emergency Economic Stabilization Act of 2008, which authorized the Troubled Asset Relief Program (TARP). Under TARP, the U.S. Department of the Treasury was authorized to purchase or insure up to $700 billion in troubled assets, including small business loans, from banks and other financial institutions. The law's intent was \"to restore liquidity and stability to the financial system of the United States.\" P.L. 111-203 , the Dodd-Frank Wall Street Reform and Consumer Protection Act, reduced total TARP purchase authority from $700 billion to $475 billion. The Department of the Treasury's authority to make new financial commitments under TARP ended on October 3, 2010. The Department of the Treasury has disbursed approximately $430 billion in TARP funds, including $370 million to purchase SBA 7(a) loan guaranty program securities.", "In addition, as mentioned previously, in 2009, ARRA provided an additional $730 million for SBA programs, including $375 million to temporarily reduce fees in the SBA's 7(a) and 504/CDC loan guaranty programs and increase the 7(a) program's maximum loan guaranty percentage from up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000 to 90% for all standard 7(a) loans. Congress subsequently provided another $265 million, and authorized the SBA to reprogram another $40 million, to extend the fee reductions and loan modification through May 31, 2010, and the Small Business Jobs Act of 2010 provided another $505 million (plus $5 million for administrative expenses) to extend the fee reductions and loan modification from September 27, 2010, through December 31, 2010. Also, P.L. 111-322 , the Continuing Appropriations and Surface Transportation Extensions Act, 2011, authorized the use of any funding remaining from the Small Business Jobs Act of 2010 to extend the fee subsidies and 90% maximum loan guaranty percentage through March 4, 2011, or until the available funding was exhausted. Funding for these purposes was exhausted on January 3, 2011.", "The Obama Administration argued that TARP and the additional funding for the SBA's loan guaranty programs helped to improve the small business lending environment and supported \"the retention and creation of hundreds of thousands of jobs.\" Critics argued that small business tax reduction, reform of financial credit market regulation, and federal fiscal restraint are the best means to assist small business economic growth and job creation."], "subsections": []}, {"section_title": "Program Administration", "paragraphs": ["Over the years, the SBA's Office of Inspector General (OIG) and the U.S. Government Accountability Office (GAO) have independently reviewed the SBA's administration of the SBA's loan guaranty programs. Although improvements have been noted, both agencies have reported deficiencies in the SBA's administration of its loan guaranty programs that they argue need to be addressed, including issues involving the oversight of 7(a) lenders and the lack of outcome-based performance measures."], "subsections": [{"section_title": "Oversight of 7(a) Lenders", "paragraphs": ["On December 1, 2000, the OIG released its FY2001 list of the most serious management challenges facing the SBA and included, for the first time, the oversight of SBA lenders. Since then, the OIG has determined that the SBA has made significant progress in improving its oversight of SBA lenders. For example ", "The SBA established an Office of Lender Oversight (renamed the Office of Credit Risk Management in 2007), led by an Associate Administrator, which, in October 2000, drafted a strategic plan to serve as a basis for developing a Standard Operating Procedure (SOP) for lender oversight and, among other activities, initiated \"steps to develop and implement a comprehensive loan monitoring system to evaluate lender performance. The system will collect data on lenders such as delinquency default rates, liquidations, loan payments, and loan originations.\" In 2004, the SBA's National Guaranty Purchase Center developed a quality control plan \"to review the quality of the guaranty purchase process.\" In 2006, the SBA issued an SOP that established procedures for on-site, risk-based lender reviews and safety and soundness examinations for 7(a) lenders and Certified Development Companies (CDCs) participating the SBA's 504/CDC loan guaranty program. In 2007, the SBA completed the centralization of all 7(a) loan processing activities and, with very limited exception, ended loan making, servicing, liquidation, and guaranty purchase activity at district offices. In 2008, the SBA issued an SOP for 7(a) lender oversight which included uniform policies and procedures for the evaluation of lender performance and the SBA's Office of Financial Program Operations (OFPO) began designing \"a comprehensive quality control program across all of its centers.\" Previously, quality control was conducted within each loan center (Standard 7(a) Loan Guaranty Processing Center, Commercial Loan Service Center, and National Guaranty Purchase Center) \"at various levels of sophistication.\" The SBA issued an interim final rule in the Federal Register on December 1, 2008, incorporating the SBA's risk-based lender oversight program into the SBA's regulations. In 2010, the SBA's OFPO established its agency-wide quality control program, which is designed to improve service and \"reduce waste, fraud, and abuse\" by ensuring \"that centers accurately and consistently apply statutory, regulatory, and procedural loan program requirements.\" The SBA also developed a \"risk-based, off-site analysis of lending partners through its Loan/Lender Monitoring System (L/LMS), a state-of-the-art portfolio monitoring system that incorporates credit scoring metrics for portfolio management purposes.\" In 2012-2013, the SBA \"(1) developed risk profiles and lender performance thresholds, (2) developed a select analytical review process to allow for virtual risk-based reviews, (3) updated its lender risk rating model to better stratify and predict risk, and (4) conducted test reviews under the new risk-based review protocol.\" In 2013-2014, the SBA \"improved its monitoring and verification of corrective actions by lenders by: (1) developing corrective action assessment procedures, (2) finalizing a system to facilitate the corrective action process, and (3) populating the system with lender oversight results requiring corrective action.\" In 2015, the SBA's Office of Credit Risk Management (OCRM) \"engaged contractor support to expand on its corrective action follow-up process. Additionally, OCRM issued its FY2015 Risk Management Oversight Plan, which included plans to conduct 170 corrective action reviews between 7(a) and 504 lenders.\" In 2016, OCRM reported that it conducted 147 corrective action follow-up assessments, established performance measures and risk mitigation goals for the SBA's entire lending portfolio, and \"conducted portfolio analyses of problem lenders with heavy concentrations in SBA 7(a) lending and sales on the secondary market.\"", "Despite these improvements, the OIG continues to list lender oversight as one of the most serious management challenges facing the SBA because it argues that several issues that it has identified in audits have not been fully addressed. Specifically, the OIG reports that the SBA needs to show that the portfolio risk management program is used to support risk based decisions, implement additional controls to mitigate risks, develop an effective method for tracking loan agents, and update regulations on loan agents."], "subsections": []}, {"section_title": "Outcome-Oriented Performance Measures", "paragraphs": ["GAO has argued that the 7(a) program's performance measures (e.g., number of loans approved, loans funded, and firms assisted across the subgroups of small businesses) provide limited information about the impact of the loans on participating small businesses:", "The program's performance measures focus on indicators that are primarily output measures\u2013for instance, they report on the number of loans approved and funded. But none of the measures looks at how well firms do after receiving 7(a) loans, so no information is available on outcomes. As a result, the current measures do not indicate how well the agency is meeting its strategic goal of helping small businesses succeed. ", "The SBA's OIG has made a similar argument concerning the SBA's Microloan program's performance measures. Because the SBA uses similar program performance measures for its Microloan and 7(a) programs, the OIG's recommendations could also be applied to the SBA's 7(a) program.", "Specifically, as part of its audit of the SBA Microloan program's use of ARRA funds, the OIG found that the SBA's performance measures for the Microloan program are based on the number of microloans funded, the number of small businesses assisted, and program's loan loss rate. It argued that these \"performance metrics ... do not ensure the ultimate program beneficiaries, the microloan borrowers, are truly assisted by the program\" and \"without appropriate metrics, SBA cannot ensure the Microloan program is meeting policy goals.\" It noted that the SBA does not track the number of microloan borrowers who remain in business after receiving a microloan to measure the extent to which the loans contributed to the success of borrowers and does not determine the effect that technical training assistance may have on the success of microloan borrowers and their ability to repay loans. It recommended that the SBA \"develop additional performance metrics to measure the program's achievement in assisting microloan borrowers in establishing and maintaining successful small businesses.\"", "In its response to GAO's recommendation to develop additional performance measures for the 7(a) program, the SBA formed, in July 2014, an impact evaluation working group to develop a methodology for conducting impact evaluations of the agency's programs using administrative data sources residing at the SBA and in other federal agencies, such as the U.S. Census Bureau and the Bureau of Labor Statistics. Numerous SBA program offices participated in this working group and each office developed its own program evaluation methodology or established program evaluation frameworks. ", "More recently, the SBA indicated in its FY2017 congressional budget justification document that although it \"continues to face barriers gathering outcome rich evaluation data with current restrictions in collecting personal identification information (PII) and business identification information (BII)\" it \"plans to further develop its analytical capabilities, enhance collaboration across its programs, provide evaluation-specific trainings, and broaden use of impact evaluations to support senior leaders and institutionalize the evidence-based process across programs.\" To encourage evidence-based evaluations across its programs, the SBA has created an annual Enterprise Learning Agenda designed to \"help program managers continue to build and use evidence and to foster an environment of continuous learning.\" As part of this agenda building process, the SBA identifies programs for evidence-based evaluation and undertakes both internal evaluations using available data or contracts with third parties to conduct the evaluations."], "subsections": []}]}]}, {"section_title": "Legislative Activity During the 111th Congress", "paragraphs": ["Congress authorized several changes to the 7(a) program during the 111 th Congress in an effort to increase the number and amount of 7(a) loans. "], "subsections": [{"section_title": "The Obama Administration's Proposals", "paragraphs": ["During the 111 th Congress, the Obama Administration supported congressional efforts to temporarily subsidize fees for the 7(a) and 504/CDC loan guaranty programs and to increase the 7(a) program's loan guaranty percentage from up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000 to 90%. Congress subsequently provided nearly $1.1 billion to temporarily subsidize fees for the 7(a) and 504/CDC loan guaranty programs and to increase the 7(a) program's maximum loan guaranty percentage to 90% for all standard 7(a) loans.", "The Obama Administration also proposed the following modifications to several SBA programs, including the 7(a) program:", "increase the maximum loan size for 7(a) loans from $2 million to $5 million; increase the maximum loan size for the 504/CDC program from $2 million to $5 million for regular projects and from $4 million to $5.5 million for manufacturing projects; increase the maximum loan size for microloans to small business concerns from $35,000 to $50,000; increase the maximum loan limits for lenders in their first year of participation in the Microloan program, from $750,000 to $1 million, and from $3.5 million to $5 million in the subsequent years; temporarily increase the cap on SBAExpress loans from $350,000 to $1 million; and temporarily allow in FY2010 and FY2011, with an option to extend into FY2012, the refinancing of loans for owner-occupied commercial real estate that are within one year of maturity under the SBA's 504/CDC program."], "subsections": [{"section_title": "Arguments for Increasing the SBA's Maximum Loan Limits", "paragraphs": ["The Obama Administration argued that increasing the maximum loan limits for the 7(a), 504/CDC, Microloan, and SBAExpress programs would allow the SBA to \"support larger projects,\" which would \"allow the SBA to help America's small businesses drive long-term economic growth and the creation of jobs in communities across the country.\" The Administration also argued that increasing the maximum loan limits for these programs would be \"budget neutral\" over the long run and \"help improve the availability of smaller loans.\""], "subsections": []}, {"section_title": "Arguments Against Increasing the SBA's Maximum Loan Limits", "paragraphs": ["Critics of the Obama Administration's proposals to increase the SBA's maximum loan limits argued that higher loan limits might increase the risk of defaults, resulting in higher guaranty fees or the need to provide the SBA additional funding, especially for the SBAExpress program, which has experienced somewhat higher default rates than other SBA loan guaranty programs. Others advocated a more modest increase in the maximum loan limits to ensure that the 7(a) program \"remains focused on startup and early-stage small firms, businesses that have historically encountered the greatest difficulties in accessing credit,\" and \"avoids making small borrowers carry a disproportionate share of the risk associated with larger loans.\" ", "Others argued that creating a small business direct lending program within the SBA would reduce paperwork requirements and be more efficient in providing small businesses access to capital than modifying existing SBA programs that rely on private lenders to determine if they will issue the loans. Also, as mentioned previously, others argued that providing additional resources to the SBA or modifying the SBA's loan programs as a means to augment small business access to capital is ill-advised. In their view, the SBA has limited impact on small businesses' access to capital. They argued that the best means to assist small business economic growth and job creation is to focus on small business tax reduction, reform of financial credit market regulation, and federal fiscal restraint."], "subsections": []}]}, {"section_title": "P.L. 111-5, the American Recovery and Reinvestment Act of 2009 (ARRA)", "paragraphs": ["As mentioned previously, in 2009, ARRA provided an additional $730 million for SBA programs, including $375 million to temporarily reduce fees in the SBA's 7(a) and 504/CDC loan guaranty programs ($299 million) and increase the 7(a) program's maximum loan guaranty percentage from up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000 to 90% for all standard 7(a) loans ($76 million). "], "subsections": []}, {"section_title": "P.L. 111-240, the Small Business Jobs Act of 2010", "paragraphs": ["P.L. 111-240 provided $505 million (plus $5 million for administrative expenses) to extend the 7(a) program's 90% maximum loan guaranty percentage and 7(a) and 504/CDC loan guaranty programs' fee subsidies through December 31, 2010 (later extended to March 4, 2011), or until available funding was exhausted (which occurred on January 3, 2011). The act also made the following changes to the SBA's programs:", "increased the maximum loan size for 7(a) loans from $2 million to $5 million; temporarily increased for one year (through September 27, 2011) the cap on SBAExpress loans from $350,000 to $1 million; increased the maximum loan size for the 504/CDC loans from $1.5 million to $5 million for regular projects, from $2 million to $5 million for projects meeting one of the program's specified public policy goals, and from $4 million to $5.5 million for manufacturers; increased the maximum loan size for the Microloan program from $35,000 to $50,000; authorized the SBA to establish an alternative size standard for the 7(a) and 504/CDC programs that uses maximum tangible net worth and average net income as an alternative to the use of industry standards and established an interim size standard of a maximum tangible net worth of not more than $15 million and an average net income after federal taxes (excluding any carryover losses) for the preceding two fiscal years of not more than $5 million; and allowed 504/CDC loans to be used to refinance up to $7.5 billion in short-term commercial real estate debt each fiscal year for two years after enactment (through September 27, 2012) into long-term fixed rate loans.", "The act also authorized the Secretary of the Treasury to establish a $30 billion Small Business Lending Fund (SBLF) to encourage community banks to provide small business loans ($4 billion was issued), a $1.5 billion State Small Business Credit Initiative to provide funding to participating states with small business capital access programs, and about $12 billion in tax relief for small businesses. It also contained revenue raising provisions to offset the act's cost and authorized a number of changes to other SBA loan and contracting programs."], "subsections": []}]}, {"section_title": "Legislative Activity During the 112th Congress", "paragraphs": ["Congress did not approve any changes to the 7(a) program during the 112 th Congress. However, several bills were introduced during the 112 th Congress that would have changed the program.", "S. 1828 , a bill to increase small business lending, and for other purposes, was introduced on November 8, 2011, and referred to the Senate Committee on Small Business and Entrepreneurship. The bill would have reinstated for a year following the date of its enactment the temporary fee subsidies for the 7(a) and 504/CDC loan guaranty programs and the 90% loan guaranty for standard 7(a) loans, which were originally authorized by ARRA and later extended by several laws, including the Small Business Jobs Act of 2010.", "H.R. 2936 , the Small Business Administration Express Loan Extension Act of 2011, introduced on September 15, 2011, and referred to the House Committee on Small Business, would have extended a one-year increase in the maximum loan amount for the SBAExpress program from $350,000 to $1 million for an additional year. The temporary increase in that program's maximum loan amount was authorized by P.L. 111-240 , the Small Business Jobs Act of 2010, and expired on September 27, 2011 (see Appendix ). ", "S. 532 , the Patriot Express Authorization Act of 2011, introduced on March 9, 2011, and referred to the Senate Committee on Small Business and Entrepreneurship, would have provided statutory authorization for the Patriot Express Pilot Program. This program was subsequently discontinued by the SBA on December 31, 2013. The bill would have increased the program's maximum loan amount from $500,000 to $1 million, and it would have increased the guaranty percentages from up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000 to up to 85% of loans of $500,000 or less and up to 80% of loans exceeding $500,000."], "subsections": []}, {"section_title": "Legislative Activity During the 113th Congress", "paragraphs": ["H.R. 2451 , the Strengthening Entrepreneurs' Economic Development Act of 2013, was introduced on June 20, 2013, and referred to the House Committee on Small Business. It would have authorized the SBA to make direct loans of up to $150,000 to businesses with fewer than 20 employees. It would have also required the SBA to assess, collect, and retain a fee with respect to the outstanding balance of the deferred participation share of each 7(a) loan in excess of $2 million that is no more than is necessary to reduce to zero the SBA's cost of making the loan. ", "H.R. 2461 , the SBA Loan Paperwork Reduction Act of 2013, was introduced on June 20, 2013, and referred to the House Committee on Small Business. It would have provided statutory authorization for the Small Loan Advantage (SLA) pilot program. The SBA started that program on February 15, 2011. It provided a streamlined application process for 7(a) loans of up to $350,000 if the loan received an acceptable credit score from the SBA prior to the loan being submitted for processing. The SBA adopted the SLA application process as the model for processing all non-express 7(a) loans of $350,000 or less, effective January 1, 2014. ", "As mentioned previously, the Obama Administration waived the up-front, one time loan guaranty fee and ongoing servicing fee for 7(a) loans of $150,000 or less approved in FY2014 (and later extended the fee waiver in FY2015 and FY2016). H.R. 2462 , the Small Business Opportunity Acceleration Act of 2013, introduced on June 20, 2013, and referred to the House Committee on Small Business, would have made the fee waiver permanent. ", "Also, the Obama Administration waived the up-front, one-time loan guaranty fee for veteran loans under the SBAExpress program (up to $350,000) from January 1, 2014, through the end of FY2015 (called the Veterans Advantage Program). S. 2143 , the Veterans Entrepreneurship Act, would have authorized this fee waiver and made it permanent. Also, P.L. 113-235 provided statutory authorization to waive the 7(a) SBAExpress program's guarantee fee for veterans (and their spouse) in FY2015."], "subsections": []}, {"section_title": "Legislative Activity During the 114th Congress", "paragraphs": ["P.L. 114-38 , the Veterans Entrepreneurship Act of 2015, authorized and made permanent the waiver of the up-front, one-time loan guaranty fee for veterans (and their spouse) in the SBAExpress program beginning on or after October 1, 2015, except during any upcoming fiscal year for which the President's budget, submitted to Congress, includes a cost for the 7(a) program, in its entirety, that is above zero. The act also increased the 7(a) program's authorization limit from $18.75 billion in FY2015 to $23.5 billion.", "On June 25, 2015, the SBA informed Congress that the 7(a) program \"is on track to hit its authorization ceiling of $18.75 billion well before the end of FY2015.\" The SBA indicated that \"our activity and trend analysis reveal a strong uptick that, if sustained, would exceed our lending authority ceiling by late August.\" If that were to occur, and in the absence of statutory authority to do otherwise, the SBA reported that it would have to suspend 7(a) loan making for the remainder of the fiscal year. The SBA requested an increase in the 7(a) loan program's authorization limit to $22.5 billion in FY2015.", "On July 23, 2015, citing \"unprecedented demand,\" the SBA suspended 7(a) program lending. The SBA indicated that it would continue to process loan applications \"up to the point of approval\" and then place approved loans \"into a queue awaiting the availability of program authority.\" Loans would be released \"once program authority became available due to Congressional action or as a result of cancellations of loans previously approved this fiscal year.\" Applications would then \"be funded in the order they were approved by SBA, with the exception that requests for increases to previously approved loans will be funded before applications for new loans.\"", "The SBA resumed 7(a) lending on July 28, 2015, following P.L. 114-38 's enactment. In addition to increasing the 7(a) program's authorization limit for FY2015, the act added requirements designed to ensure that SBA loans do not displace private sector loans (e.g., the SBA Administrator may not guarantee a 7(a) loan if the lender determines that the borrower is unable to obtain credit elsewhere solely because the liquidity of the lender depends upon the guarantied portion of the loan being sold on the secondary market, or if the sole purpose for requesting the guarantee is to allow the lender to exceed the lender's legal lending limit), and requires the SBA to report, on a quarterly basis, specified 7(a) program statistics to the House and Senate Committees on Appropriations and Small Business. These required statistics are designed to inform the committees of the SBA's pace of 7(a) lending, provide estimates concerning the date on which the program's authorization limit may be reached, and present information concerning early defaults and actions taken by the SBA to combat early defaults.", "As mentioned previously, P.L. 114-113 increased the 7(a) program's authorization limit from $23.5 billion in FY2015 to $26.5 billion for FY2016. In addition, P.L. 114-223 , the Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2017, authorized the SBA to use funds from its business loan program account \"to accommodate increased demand for commitments for [7(a)] general business loans\" for the duration of the continuing resolution (initially December 9, 2016, later extended by P.L. 114-254 , the Further Continuing and Security Assistance Appropriations Act, 2017, to April 28, 2017).", "In a related development, S. 2496 , the Help Small Businesses Access Affordable Credit Act, introduced on February 2, 2016, would have authorized the SBA Administrator, with prior approval of the House and Senate Committees on Appropriations, to make loans in an amount equal to not more than 110% of the 7(a) program's authorization limit if the demand for 7(a) loans should exceed that limit. The Obama Administration also requested authorization to allow the SBA Administrator to continue to issue loans should the demand for 7(a) loans exceed the program's authorization limit.", "Also. S. 2992 , the Small Business Lending Oversight Act of 2016, would have required the Director of the SBA's Office of Credit Risk Management (OCRM) to impose penalties on 7(a) lenders who \"knowingly and repeatedly\" undertake specified activities; required the SBA to annually undertake and report the findings of a risk analysis of the 7(a) program's loan portfolio; redefined the credit elsewhere requirement; authorized fees to be used to support OCRM operations; required the SBA to identify potential loan risks by lenders participating in the Preferred Lenders Program by requiring the SBA, at the end of each year, to \"calculate the percentage of loans in a lender's portfolio made without a contribution of borrower equity when the loan's purpose was to establish a new small business concern, to effectuate a change of small business ownership, or to purchase real estate\"; and, among other provisions, prohibited the SBA from approving any loan if its financing is more than 100% of project costs.", "Legislation was also introduced ( S. 2125 , the Small Business Lending and Economic Inequality Reduction Act of 2015) to provide permanent, statutory authorization for the Community Advantage Pilot program (see Appendix ). The SBA announced on December 28, 2015, that it was extending the Community Advantage Pilot program through March 31, 2020. It had been set to expire on March 15, 2017."], "subsections": []}, {"section_title": "Legislative Activity During the 115th Congress", "paragraphs": ["Recognizing that 7(a) loan approvals during the first half of FY2017 were about 9% higher than during the first half of FY2016, Congress included a provision in P.L. 115-31 , the Consolidated Appropriations Act, 2017, that increased the 7(a) program's authorization limit to $27.5 billion in FY2017 from $26.5 billion in FY2016. Congress also approved legislation ( P.L. 115-141 , the Consolidated Appropriations Act, 2018) that increased the 7(a) program's authorization limit to $29.0 billion in FY2018. ", "In addition, as mentioned earlier, P.L. 115-189 , the Small Business 7(a) Lending Oversight Reform Act of 2018, among other provisions, codified the SBA's Office of Credit Risk Management; required that office to annually undertake and report the findings of a risk analysis of the 7(a) program's loan portfolio; created a lender oversight committee within the SBA; authorized the Director of the Office of Credit Risk Management to undertake informal and formal enforcement actions against 7(a) lenders under specified conditions; redefined the credit elsewhere requirement; and authorized the SBA Administrator to increase the amount of 7(a) loans not more than once during any fiscal year to not more than 115% of the 7(a) program's authorization limit. The SBA is required to provide at least 30 days' notice of its intent to exceed the 7(a) loan program's authorization limit to the House and Senate Committees on Small Business and the House and Senate Committees on Appropriations' Subcommittees on Financial Services and General Government and may exercise this option only once per fiscal year.", "Also, P.L. 115-232 , the John S. McCain National Defense Authorization Act for Fiscal Year 2019, included provisions to make 7(a) loans more accessible to employee-owned small businesses (ESOPs) and cooperatives. The act authorizes the SBA to make \"back-to-back\" loans to ESOPs to better align with industry practices (the loan proceeds must only be used to make a loan to a qualified employee trust); clarifies that 7(a) loans to ESOPs may be made under the Preferred Lenders Program; allows the seller to remain involved as an officer, director, or key employee when the ESOP or cooperative has acquired 100% ownership of the small business; and authorizes the SBA to finance transition costs to employee ownership and waive any mandatory equity injection by the ESOP or cooperative to help finance the change of ownership. The act also directs the SBA to create outreach programs with Small Business Investment Companies and Microloan intermediaries to make their lending programs more accessible to all eligible ESOPs and cooperatives, an interagency working group to promote lending to ESOPs and cooperatives, and a Small Business Employee Ownership and Cooperatives Promotion Program, administered by Small Business Development Centers, to offer technical assistance and training to small businesses on the transition to employee ownership through cooperatives and ESOPs.", "Congress did not focus much attention on the Trump Administration's proposal in its FY2019 budget request to \"introduce counter-cyclical policies in SBA's business guaranty loan programs and update certain fees structures to offset $155 million in business loan administration.\" As mentioned earlier, the proposal included raising $93 million in additional revenue by", "allowing the SBA to set the 7(a) program's annual servicing fee at rates below zero credit subsidy; increasing the 7(a) loan program's FY2019 annual servicing fee's cap from 0.55% to 0.625%; and increasing the FY2019 upfront loan guarantee fee on 7(a) loans over $1 million by 0.25%.", "The Administration also requested that the 7(a) loan program's authorization limit be increased to $30.0 million in FY2019; that the SBA be allowed to further increase the 7(a) loan program's authorization amount in FY2019 by 15% under specified circumstances \"to better equip the SBA to meet peaks in demand while continuing to operate at zero subsidies;\" that the SBA be allowed to impose an annual fee, not to exceed 0.05% per year, of the outstanding balance on 7(a) secondary market trust certificates to help offset administrative costs; and that the SBAExpress program's loan limit be increased from $350,000 to $1 million."], "subsections": []}, {"section_title": "Legislative Activity During the 116th Congress", "paragraphs": ["P.L. 116-6 , the Consolidated Appropriations Act, 2019, increased the 7(a) program's authorization limit to $30.0 billion in FY2019."], "subsections": []}, {"section_title": "Concluding Observations", "paragraphs": ["The congressional debate concerning the SBA's 7(a) program during the 111 th Congress was not whether the federal government should act, but which federal policies would most likely enhance small businesses' access to capital and result in job retention and creation. As a general proposition, some Members of Congress argued that the SBA should be provided additional resources to assist small businesses in acquiring capital necessary to start, continue, or expand operations with the expectation that in so doing small businesses will create jobs. Others worried about the long-term adverse economic effects of spending programs that increase the federal deficit. They advocated business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to help small businesses further economic growth and job creation.", "In terms of specific program changes, increasing the 7(a) program's loan limit, extending the 7(a) program's temporary fee subsidies and 90% maximum loan guaranty percentage, and establishing an alternative size standard for the 7(a) program were all designed to achieve the same goal: to enhance job creation by increasing the ability of 7(a) borrowers to access credit at affordable rates. However, determining how specific changes in federal policy are most likely to enhance job creation is a challenging task. For example, a 2008 Urban Institute study concluded that differences in the term, interest rate, and amount of SBA financing were \"not significantly associated with increasing sales or employment among firms receiving SBA financing.\" The study also reported that the analysis accounted for less than 10% of the variation in firm performance. The Urban Institute suggested that local economic conditions, local zoning regulations, state and local tax rates, state and local business assistance programs, and the business owner's charisma or business acumen also \"may play a role in determining how well a business performs after receipt of SBA financing.\"", "As the Urban Institute study suggests, because many factors influence business success, measuring the 7(a) program's effect on job retention and creation is complicated. That task is made even more challenging by the absence of performance-oriented measures that could serve as a guide. Both GAO and the SBA's OIG have recommended that the SBA adopt outcome performance-oriented measures for its loan guaranty programs, such as tracking the number of borrowers who remain in business after receiving a loan to measure the extent to which the program contributed to their ability to stay in business. Other performance-oriented measures that Congress might also consider include requiring the SBA to survey 7(a) borrowers to measure the difficulty they experienced in obtaining a loan from the private sector and the extent to which the 7(a) loan or technical assistance received contributed to their ability to create jobs or expand their scope of operations."], "subsections": [{"section_title": "Appendix. 7(a) Specialized Programs", "paragraphs": ["The 7(a) program has several specialized programs that offer streamlined and expedited loan procedures for particular groups of borrowers, including the SBAExpress, Export Express, and Community Advantage programs. Lenders must be approved by the SBA for participation in these programs.", "SBAExpress Program", "The SBAExpress program was established as a pilot program by the SBA on February 27, 1995, and made permanent through legislation, subject to reauthorization, in 2004 ( P.L. 108-447 , the Consolidated Appropriations Act, 2005). The program is designed to increase the availability of credit to small businesses by permitting lenders to use their existing documentation and procedures in return for receiving a reduced SBA guaranty on loans. It provides a 50% loan guaranty on loan amounts up to $350,000. ", "As shown in Table A-1 , the SBA approved 27,794 SBAExpress loans (46.1% of total 7(a) program loan approvals), totaling $1.98 billion (7.8% of total 7(a) program amount approvals) in FY2018. The program's higher loan amount in FY2011 was due, at least in part, to a provision in P.L. 111-240 , the Small Business Jobs Act of 2010, which temporarily increased the SBAExpress program's loan limit to $1 million for one year following enactment (through September 27, 2011).", "During the 112 th Congress, H.R. 2936 , the Small Business Administration Express Loan Extension Act of 2011, would have extended the SBAExpress program's higher loan limit for an additional year (through September 27, 2012).", "SBAExpress loan proceeds can be used for the same purposes as those of the 7(a) program (expansion, renovation, new construction, the purchase of land or buildings, the purchase of equipment, fixtures, and lease-hold improvements, working capital, to refinance debt for compelling reasons, seasonal line of credit, and inventory); except that participant debt restructure cannot exceed 50% of the project and may be used for revolving credit. The program's loan terms are the same as those of the 7(a) program (the loan maturity for working capital, machinery, and equipment (not to exceed the life of the equipment) is typically 5 years to 10 years; and the loan maturity for real estate is up to 25 years, except that the term for a revolving line of credit cannot exceed 7 years.", "The SBAExpress loan's interest rates and fees are the same as those used for the 7(a) program. To account for the program's lower guaranty rate of 50%, lenders are allowed to perform their own loan analysis and procedures and receive SBA approval with a targeted 36-hour maximum turnaround time. Also, collateral is not required for loans of $25,000 or less. Lenders are allowed to use their own established collateral policy for loans over $25,000. ", "As mentioned earlier, the SBA waived the up-front, one-time loan guaranty fee for 7(a) loans of $125,000 or less approved in FY2018. The SBA also waived 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $125,001 to $350,000 in FY2018.", "In addition, P.L. 114-38 , the Veterans Entrepreneurship Act of 2015, provided statutory authorization and made permanent the veteran's fee waiver in the SBAExpress program, except during any upcoming fiscal year for which the President's budget, submitted to Congress, includes a cost for the 7(a) program, in its entirety, that is above zero. The SBA waived this fee in FY2016, FY2017, and FY2018 and is waiving it in FY2019.", "The SBA indicated that its fee waivers for veterans are part \"of SBA's broader efforts to make sure that veterans have the tools they need to start and grow a business.\"", "In a related development, the SBA discontinued the Patriot Express Pilot Program on December 31, 2013. It provided loans of up to $500,000 (with a guaranty of up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000) to veterans and their spouses. It had been in operation since 2007, and, like the SBAExpress program, featured streamlined documentation requirements and expedited loan processing. Over its history, the Patriot Express Pilot Program disbursed 9,414 loans amounting to more than $791 million.", "Export Express", "The Export Express program was established as a subprogram of the SBAExpress program in 1998, and made a separate pilot program in 2000. It was made permanent through legislation, subject to reauthorization, in 2010 ( P.L. 111-240 , the Small Business Jobs Act of 2010). ", "The Export Express program is designed to increase the availability of credit to current and prospective small business exporters that have been in business, though not necessarily in exporting, for at least 12 full months, particularly those small businesses needing revolving lines of credit. Export Express loans may not be used to finance overseas operations, except for the marketing or distribution of products or services exported from the United States.", "The program is generally subject to the same loan processing, making, closing, servicing, and liquidation requirements as well as the same maturity terms, interest rates, and applicable fees as the SBAExpress program. Two key differences between the two programs is that the Export Express program's maximum loan amount is up to $500,000, and its guaranty rate is 90% for loans of $350,000 or less, and 75% for loans exceeding $350,000.", "There were 215 lenders with approved SBA Export Express loan guaranties at the end of FY2017. These lenders are located in 46 states, Guam, and Puerto Rico. As shown in Table A-2 , the SBA approved 59 Export Express loans totaling $15.45 million in FY2018.", "Community Advantage 7(a) Loan Initiative", "The SBA's Community Advantage (CA) 7(a) loan initiative became operational on February 15, 2011. Originally announced as a three-year pilot program (through March 15, 2014), it subsequently was extended through March 15, 2017; March 31, 2020; and September 30, 2022. As of September 12, 2018, there were 113 approved CA lenders, 99 of which were actively making and servicing CA loans.", "The CA loan initiative is designed to increase lending to underserved low- and moderate-income communities. It, along with the now-discontinued Small Loan Advantage program, replaced the Community Express Pilot Program, which also was designed to increase lending to underserved communities. ", "The CA loan initiative provides the same loan terms, guaranty fees, and guaranty as that of the 7(a) program on loan amounts up to $250,000 (85% for loans up to $150,000 and 75% for those greater than $150,000). Loan proceeds can be used for the same purposes as those of the 7(a) program. The loan's maximum interest rate is prime, plus 6%. The program has an expedited approval process, which includes a two-page application for borrowers and a goal of completing the approval process within 5 to 10 days.", "The CA loan initiative is designed to increase \"the number of SBA 7(a) lenders who reach underserved communities, targeting community-based, mission-focused financial institutions which were previously not able to offer SBA loans.\" These mission-focused financial institutions include the following:", "nonfederally regulated Community Development Financial Institutions certified by the U.S. Department of the Treasury, SBA's Certified Development Companies, SBA's nonprofit microlending intermediaries, and, added in December 2015, SBA's Intermediary Lending Pilot Program intermediaries. ", "They are expected to maintain at least 60% of their SBA loan portfolio in underserved markets, including loans to small businesses in, or that have more than 50% of their full-time workforce residing in, low-to-moderate income (LMI) communities; Empowerment Zones and Enterprise Communities; HUBZones; start-ups (firms in business less than two years); businesses eligible for the SBA's Veterans Advantage program; Promise Zones (added in December 2015); and Opportunity Zones and Rural Areas (added in October 2018). ", "The SBA placed a moratorium, effective October 1, 2018, on accepting new CA lender applications, primarily as a means to mitigate the risk of future loan defaults. The SBA also ", "increased the minimum acceptable credit score for CA loans \"that satisfies the need to consider several required underwriting criteria\" from 120 to 140; increased the wait time for CA lenders ineligible for delegated lender status at the time of approval as a CA lender from 6 months to 12 months and increased the number of CA loans that must be initially dispersed before a CA lender may process applications under delegated authority from five to seven loans; increased the loan loss reserve requirement for CA loans sold in the secondary market from 3% to 5% of the outstanding amount of the guaranteed portion of each loan; modified requirements related to the refinancing of debts with a CA loan; limited fees that can be charged by a CA lender for assistance in obtaining a CA loan to no more than $2,500, with the exception of necessary out-of-pocket costs such as filing or recording fees; and as mentioned previously, added Opportunity Zones and Rural Areas to the list of economically distressed communities that are eligible for a CA loan.", "As shown in Table A-3 , the SBA approved 1,118 CA loans amounting to $157.5 million in FY2018 and 4,906 CA loans amounting to $643.72 million from the time the program became operational to the end of FY2018.", "As mentioned previously, legislation was introduced during the 114 th Congress ( S. 2125 , the Small Business Lending and Economic Inequality Reduction Act of 2015) to provide the Community Advantage Pilot program permanent, statutory authorization."], "subsections": []}]}]}}
{"id": "R45688", "title": "Timber Harvesting on Federal Lands ", "released_date": "2019-04-12T00:00:00", "summary": ["Congress has granted some federal land management agencies the authority to sell timber from federal lands. Two agencies, the Forest Service (FS) and the Bureau of Land Management (BLM), conduct timber sales as an authorized use. Together, the FS and the BLM manage 76% of federal forest area. FS manages 144.9 million acres, while BLM manages 37.6 million acres. The other major federal land management agencies, the National Park Service (NPS) and the Fish and Wildlife Service (FWS), rarely conduct timber sales.", "Lands managed by the FS, the National Forest System (NFS), are managed under a multiple use-sustained yield model pursuant to the Multiple Use-Sustained Yield Act of 1960 (MUSYA). This statute directs FS to balance multiple uses of their lands and ensure a sustained yield of those uses in perpetuity. Congress, through the National Forest Management Act (NFMA), has directed FS to engage in long-term land use and resource management planning. Plans set the framework for land management, uses, and protection; they are developed through an interdisciplinary process with opportunities for public participation. In the case of timber, they describe where timber harvesting may occur and include measures of sustainable timber harvest levels. FS uses these plans to guide implementation of individual sales, which generate revenue. Congress has specified various uses for this revenue.", "Timber harvest on FS lands has varied over time. FS harvest volumes in the 1940s were around 1-3 billion board feet per year. Annual harvest volumes rose from the 1950s through the 1980s, sometimes exceeding 10 billion board feet. Annual harvested volumes decreased in the early 1990s and have remained between 1.8 and 2.8 billion board feet since FY2003. The total dollar value of FS timber harvests generally rose from the early 1940s to over $3 billion in FY1979. Total value has been between $100 million and $300 million since FY2001. From FY2014 to FY2018, the greatest average annual harvest volume on FS lands was from Oregon and Washington.", "BLM lands are managed under a multiple use-sustained yield model pursuant to the Federal Land Policy and Management Act of 1976 (FLPMA). This statute directs BLM to balance multiple uses of their lands and ensure a sustained yield of those uses in perpetuity. Congress has directed BLM to engage in long-term land use and resource management planning through FLPMA. Plans set the framework for land management, uses, and protection; they are developed made through an interdisciplinary process with opportunities for public participation. In the case of timber, they describe where timber harvesting may occur and contain measures of sustainable timber harvest levels. The FS and the BLM use these plans to guide implementation of individual sales, which generate revenue. Congress has specified various uses for this revenue.", "Although trends in timber activities on BLM lands are challenging to infer from the available data, volumes sold in the past appear to be larger than recent volumes offered for sale. Harvested volumes for the BLM have been between 100 and 260 million board feet annually from FY1995 onward, except in FY1994 and between FY2001-FY2003. Total harvest values have declined since the mid-1990s, and have generally been between $20 million and $50 million annually since FY2011. From FY2014 to FY2018, the greatest average annual harvest volume from BLM lands was from Oregon and Washington.", "Congress has debated the appropriate balance of timber harvesting and other uses on federal lands. Determining the proportions of these uses, in whole and on individual lands, is challenging for land management agencies. Preferences for certain balances of these uses often stem from values about federal forests' purposes, such as consideration of economic, environmental, or recreational values. Debate has also centered on the relationship of timber harvesting levels to forest health, including whether changing harvest levels is a desirable forest management tool.", "Congress has granted some federal land management agencies the authority to sell timber from federal lands. Two agencies, the Forest Service (FS) and the Bureau of Land Management (BLM), conduct timber sales as an authorized use. Together, the FS and the BLM manage 76% of federal forest area. FS manages 144.9 million acres, while BLM manages 37.6 million acres. The other major federal land management agencies, the National Park Service (NPS) and the Fish and Wildlife Service (FWS), rarely conduct timber sales.", "Lands managed by the FS, the National Forest System (NFS), are managed under a multiple use-sustained yield model pursuant to the Multiple Use-Sustained Yield Act of 1960 (MUSYA). This statute directs FS to balance multiple uses of their lands and ensure a sustained yield of those uses in perpetuity. Congress, through the National Forest Management Act (NFMA), has directed FS to engage in long-term land use and resource management planning. Plans set the framework for land management, uses, and protection; they are developed through an interdisciplinary process with opportunities for public participation. In the case of timber, they describe where timber harvesting may occur and include measures of sustainable timber harvest levels. FS uses these plans to guide implementation of individual sales, which generate revenue. Congress has specified various uses for this revenue.", "Timber harvest on FS lands has varied over time. FS harvest volumes in the 1940s were around 1-3 billion board feet per year. Annual harvest volumes rose from the 1950s through the 1980s, sometimes exceeding 10 billion board feet. Annual harvested volumes decreased in the early 1990s and have remained between 1.8 and 2.8 billion board feet since FY2003. The total dollar value of FS timber harvests generally rose from the early 1940s to over $3 billion in FY1979. Total value has been between $100 million and $300 million since FY2001. From FY2014 to FY2018, the greatest average annual harvest volume on FS lands was from Oregon and Washington.", "BLM lands are managed under a multiple use-sustained yield model pursuant to the Federal Land Policy and Management Act of 1976 (FLPMA). This statute directs BLM to balance multiple uses of their lands and ensure a sustained yield of those uses in perpetuity. Congress has directed BLM to engage in long-term land use and resource management planning through FLPMA. Plans set the framework for land management, uses, and protection; they are developed made through an interdisciplinary process with opportunities for public participation. In the case of timber, they describe where timber harvesting may occur and contain measures of sustainable timber harvest levels. The FS and the BLM use these plans to guide implementation of individual sales, which generate revenue. Congress has specified various uses for this revenue.", "Although trends in timber activities on BLM lands are challenging to infer from the available data, volumes sold in the past appear to be larger than recent volumes offered for sale. Harvested volumes for the BLM have been between 100 and 260 million board feet annually from FY1995 onward, except in FY1994 and between FY2001-FY2003. Total harvest values have declined since the mid-1990s, and have generally been between $20 million and $50 million annually since FY2011. From FY2014 to FY2018, the greatest average annual harvest volume from BLM lands was from Oregon and Washington.", "Congress has debated the appropriate balance of timber harvesting and other uses on federal lands. Determining the proportions of these uses, in whole and on individual lands, is challenging for land management agencies. Preferences for certain balances of these uses often stem from values about federal forests' purposes, such as consideration of economic, environmental, or recreational values. Debate has also centered on the relationship of timber harvesting levels to forest health, including whether changing harvest levels is a desirable forest management tool."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Timber harvesting on federal lands is a long-standing activity which sometimes generates controversy. Most timber harvesting on federal lands occurs on lands directed to provide a regular output of multiple uses under current law. Determining the proportions of these uses, in whole and on individual lands, is challenging for land management agencies. Often at issue is the appropriate use of federal lands for timber harvesting under these policies, including what amount of timber harvesting should occur and what constitutes proper balance among timber harvesting and other uses.", "Congress has authorized timber harvesting on certain federal lands under specified circumstances. Most timber harvesting on federal lands occurs on two land systems. The majority of harvests occur on the National Forest System (NFS), which is managed by the Forest Service (FS) within the Department of Agriculture (USDA). Harvests also occur on the public lands managed by the Bureau of Land Management (BLM) within the Department of the Interior (DOI). The FS manages 144.9 million acres of forest, while the BLM manages 37.6 million acres of forest (see Figure 1 ). Together, FS and BLM forest comprises 76% of federal forest area and 23% of all forest in the United States. Within their respective forest, the FS has 96.1 million acres of timberlands, and the BLM has 6.1 million acres of timberlands. The United States has 765.5 million acres of forest, of which 514.4 million acres is timberland and 57% is private. The United States has 57.0 million acres of woodland. ", "Timber harvesting is the physical cutting and removal of trees or parts of trees from a given forested site. Harvested timber , or cut and removed trees, is the raw material for items made of wood, such as lumber, plywood, paper, and other products. Timber harvesting may occur on private, federal, or non-federal publicly owned lands, and may be conducted by the landowner or by another entity they allow to do so. Most timber harvesting in the United States is conducted on private lands: in 2011, 88% of timber harvests were conducted on private lands, and in 2012, 90% of wood and paper products in the United States originated on private lands.", "FS and BLM conduct timber sales as the most general way to allow timber harvesting on their respective lands, although they may allow harvesting in other ways. A timber sale is a formal process whereby an entity may purchase a contract to cut and remove specified timber. FS and BLM receive revenue from the sale of the contract. Information on timber harvesting in this report, such as harvested volume, harvested value, and other statistics, derives from FS and BLM data and may include timber harvested through timber sales or other means.", "Both FS and BLM timber sale planning and implementation proceed under similar principles of achieving multiple use and sustained yield. Both agencies conduct timber harvesting for various purposes. Both plan long-term timber management by designating areas that can support sustainable timber harvest and calculating yields that can be taken without permanent impairment. In the short term, both agencies create plans for timber sales, determine the value of offered timber and specify what timber may be cut, and conduct sales in a competitive manner open to the public. ", "Timber harvesting may also occur on two other federal land systems, the National Park System, managed by the National Park Service, and the National Wildlife Refuge System (NWRS), managed by the Fish and Wildlife Service (both agencies are within DOI). In the case of the National Park System, the Secretary may dispose of timber to control insects and diseases or to conserve natural or historic resources. In the case of the NWRS, the Secretary of the Interior may permit timber harvesting to achieve desired fish and wildlife habitat conditions. On both systems, timber harvesting is rare, and harvested volumes are small. ", "This report provides an overview of timber harvesting on FS and BLM lands. The report describes general statutory authorities and regulations, planning activities, timber sales, and trends in the volume and value of timber harvested, first from FS lands, and then for BLM lands. It concludes with a discussion of issues Congress has debated concerning timber harvesting and federal lands. "], "subsections": []}, {"section_title": "The National Forest System", "paragraphs": ["The National Forest System comprises nearly 193 million acres. It is made up of 154 national forests, national grasslands, and other units such as research and experimental areas. Approximately 75% of national forest acreage is located in 15 states. As discussed, the NFS contains 144.9 million acres of forest and woodland, of which 66% are considered timberland. "], "subsections": [{"section_title": "Statutory Authorities for Harvesting Timber", "paragraphs": ["Most of the lands contained in the modern Forest Service were reserved from the public lands in the late 19 th and early 20 th centuries, in what were first called \"forest reserves\". The forest reserves were initially managed by the DOI and later moved to the USDA and the Forest Service. Through the Organic Administration Act, Congress specified that the purpose of these forests was to \"improve and protect the forest within the reservation \u2026 and to furnish a continuous supply of timber for the use and necessities of the citizens of the United States,\" in addition to protecting water flows. The act authorized timber sales of \"dead, matured or large growth of trees\" and set out procedures for conducting them. ", "Congress expanded the purposes for the national forests, and developed management goals to achieve those purposes, through the Multiple Use-Sustained Yield Act of 1960 (MUSYA). Congress added the provision of fish and wildlife habitat, recreation, energy and mineral development, and livestock grazing as official purposes of the national forests, in addition to timber harvesting and watershed protection. To supply these activities, management of the forests' resources is to be organized for multiple uses in a \"harmonious and coordinated\" manner that considers the combination of uses that best meets the needs of the American people, not that necessarily yields the largest dollar return or output. The act also directs a sustained yield of products and services, meaning high-level regular output in perpetuity without impairing the lands' productivity. "], "subsections": []}, {"section_title": "Planning, Sale Process, and Revenues", "paragraphs": ["Congress has directed FS to engage in long-term land use and resource management. Plans set the framework for land management, uses, and protection. They are developed through an interdisciplinary process with opportunities for public participation. FS uses these plans to guide implementation of site-specific activities. In the case of timber, plans describe where timber harvesting may occur and include measures of sustainable timber harvest levels, and are used to guide implementation of individual sales. These sales generate revenues. Congress has specified various uses for these revenues. ", "Congress directed the Forest Service to conduct long-term planning and management through the passage of the National Forest Management Act of 1976 (NFMA). NFMA requires the FS to prepare a land and resource management plan\u2014often called a \"forest plan\"\u2014for each NFS unit. These plans are to be revised at least every 15 years. The FS has issued regulations to implement the planning requirement\u2014often called \"planning rules\"\u2014and to establish the procedures for developing, amending, and revising forest plans. The first planning rule was issued in 1979 and later revised; the current rule dates from 2012. Forest planning and implementation generally proceed as described below. Forest Service timber planning and administration proceed under general FS planning procedures.", "Forest plans guide management of the plan area by specifying objectives, standards, and guidelines for resources and activities. They contain certain components required by statute, such as components addressing provision of outdoor recreation, range, wildlife, fish, and timber. Among the most general required components addressing timber are requirements to identify areas and quantities for timber harvesting. The FS must identify lands that may be not suited for timber production . All other lands in the NFS unit are considered suitable for timber production. The plan must contain the allowable sale quantity, the measure of timber that can be removed annually without impairing future yield, although FS also considers other measures of sustainable yield in planning over various time horizons. The allowable sale quantity informs the amount of timber that can be removed annually over a ten-year plan period. Plans are required to be developed with public participation and in accordance with various other administrative and environmental statutes, such as the National Environmental Policy Act (NEPA). ", "Forest plans may consider harvesting for various purposes\u2014for example, to produce timber or to achieve and maintain desired resource conditions, such as habitat improvement, fire risk reduction, and sanitation. If the forest plan identifies lands as suitable for timber production, the plan must address timber harvesting on those lands. If the forest plan considers timber harvesting for purposes other than producing timber, it must delineate areas where such activities may occur. These areas may be identified by forest type, geographic area, or other criteria. ", "FS conducts timber sales to achieve the objectives in the forest plan. FS establishes a sale schedule and timber sale project plan, which may include more than one timber sale. The plan estimates volume offered, acreage, and harvest methods for the relevant sales. Site-specific timber harvests must also comport with NEPA and relevant statutes, including any requirement for site-specific environmental analysis and review. ", "Prior to an individual sale, FS marks and appraises the timber to be offered. FS may designate timber in one of three ways: physical marking, a written description of specific trees for harvest (called description ) , or a written description of desired post-harvest stand characteristics (called prescription ). FS creates a sale package, including a prospectus, sample contract, and other required documentation; some requirements are site-specific. FS advertises the package at an appraised starting price. Interested parties may bid on the package. A contract is awarded to the highest bidder provided legal conditions are met. The winning bidder conducts the timber harvest according to the terms\u2014such as timeline, harvest method, and road construction conditions\u2014specified in the contract. Timber harvests must generally be completed in 3 years, with a maximum term of 10 years. ", "Timber sales generate revenue, and disposition of this revenue depends on several factors. Congress has established several funds for FS to retain and use timber sale receipts. Depending on the type of sale, among other factors, FS may be required to make certain deposits to these funds. If any portion of receipts are not required to be deposited, FS may distribute receipts among funds at their discretion, including depositing all revenue in a single fund. The money in these funds may be used by the FS for a variety of purposes, sometimes without further appropriation (i.e., as mandatory appropriations). See Table A-1 for a list of these funds. A more detailed discussion of revenue levels, expenditures, and issues related to FS timber revenue funds is outside the scope of this report."], "subsections": []}, {"section_title": "Timber Harvests from the NFS", "paragraphs": ["Timber harvesting is one of many authorized uses of the NFS. The amount of timber harvested from the NFS, and its relative proportion of total U.S. timber supply, has fluctuated over time. This section provides an overview of timber volume harvested from the NFS, and value of those harvests, along with some economic and historical factors which may have contributed to observed changes. ", "The volume of timber harvested from the national forests (and their precursors, the forest reserves) increased slowly from 1898 until the 1940s. Most demand for wood was met by private timberlands; by 1940, for example, FS lands supplied 2% of U.S. timber supply. ", "In the post-World War II era, timber harvest volume from the NFS grew (see Figure 2 ). The timber supply from private forestry was unable to keep pace with the increased demand, due in part to high harvest levels during WWII. In the 1950s, the FS began to raise harvest limits. Harvests rose from 1-3 billion board feet (abbreviated BBF) annually in the early 1940s to more than 10 BBF in some years of the 1960s and 1970s. According to historical data from one source, harvest from the NFS rose from 9% of total U.S. harvest in 1952 to 16% in 1962 and 1970, and 15% in 1976. ", "Harvest volume declined from the mid-1970s to the early 1980s. Harvest on FS lands shifted to more marginal timberlands; in part, clear-cutting in the previous decades had reduced tree volume available for harvest in productive areas. This period also coincided with recessions in 1980 and 1982, which may have reduced demand. ", "Timber harvests rose from the early 1980s to the early 1990s, sometimes reaching levels of over 12 BBF per year. These timber harvests coincided with the 1986 U.S. peak in per capita consumption of wood products, driven in part by an increase in housing starts following the 1982 recession. In 1986, timber harvests from the NFS were 13% of total U.S. timber harvests. ", "In the early 1990s, harvested timber volume began a sustained decrease. In 1991, the NFS supplied 11% of total U.S. harvested timber, and in 1997, the NFS supplied 5% of total U.S. harvested timber. In 2011, NFS supplied 2% of U.S. wood and paper products. Numerous interrelated factors, including statutory, administrative, biological, and market influences, may have contributed to this decline. The effect of each individual factor is not settled, as is the effect of each factor over time. These factors occurred at varying points in time and may not coincide directly with observed harvest level changes. Some sources have noted that statutory changes added complexity to forest management and increasing litigation frequency, while also increasing transparency and public participation. Other sources have noted changing management priorities. Others have noted decreasing domestic demand, volatile prices, and the prevalence of less valuable timber due to high harvest levels in previous decades. The listing of the northern spotted owl ( Strix occidentalis caurina) under the Endangered Species Act in 1990 is often discussed in regard to declining timber harvest levels.", "Harvested volumes have consistently been between 2 BBF and 3 BBF annually from FY2004 onward. In FY2018, approximately 2.8 BBF were harvested from FS lands. Although the national timber market in the United States was affected by the 2008 housing market collapse and the subsequent decline in demand, timber volumes harvested from FS experienced relatively little change in volume, for unclear reasons. ", "In FY2018 dollars, harvest values from approximately FY2000 onward are similar to harvest values in the early 1940s. Harvest values generally increased from the early 1940s to a peak of approximately $3.4 billion (FY2018 dollars) in FY1979, before a decline through FY1982. They rose again thereafter, reaching another peak of approximately $2.6 billion (FY2018 dollars) in FY1989, before again declining. Values from FY2001 onward have generally been between approximately $100 million and $300 million in FY2018 dollars. In FY2018, cut value was approximately $188.8 million. FS harvest value declined during the recession and housing collapse of 2008. Harvest value may vary due to quality, species, and age class of offered timber and timber market conditions, and is correlated with volume harvested. "], "subsections": [{"section_title": "Geographic Distribution of Timber Harvests from NFS Lands", "paragraphs": ["FS harvest volume differs by region; these differences mirror the major production regions in private forestry (see Figure 3 ). FS Region 6 (the Pacific Northwest), Region 8 (the Southeast), and Region 9 (the North), are the three largest producing regions in both private and public forestry. In general, harvest volume and value by region is a function of many complex factors, including the dominant timber type, age class, and condition; the suitability of FS sites for harvest operations; the legal limitations on land uses; and the status of the local forest products industry. "], "subsections": []}]}]}, {"section_title": "Bureau of Land Management Lands", "paragraphs": ["The Bureau of Land Management (BLM) administers about 246 million surface acres of federal lands, almost entirely located in twelve western states. As noted, about 37.6 million acres of BLM lands are forest; of that, 16% is considered timberland. The Oregon and California (O&C) lands, which comprise approximately 2.6 million acres, contain 2.4 million acres of forest (see \" Statutory Authorities for Harvesting Timber ,\" below, for a description of the O&C lands). The transfer of the forest reserves to FS administration in the early 1900s reduced the amount of forest land and timberland under BLM management today. "], "subsections": [{"section_title": "Statutory Authorities for Harvesting Timber", "paragraphs": ["The modern BLM was formed in 1946 to manage the public domain lands. At its formation, BLM had no general authority to harvest timber on those lands. Congress authorized BLM to dispose of forest materials through the Materials Act of 1947. Congress later elaborated BLM's management responsibilities with the passage of the Federal Land Policy and Management Act of 1976 (FLPMA). Like the MUSYA's mandate for the FS, FLPMA requires BLM to manage the public lands for multiple use and sustained yield in a \"harmonious and coordinated\" manner that considers the combination of uses that best meets the needs of the American people, not necessarily yields the largest dollar return or output. The act directs a sustained yield of renewable resources, meaning high-level regular output in perpetuity without impairing the lands' productivity.", "The O&C lands are lands in western Oregon managed according to their own establishing statutes, mostly by BLM. FS manages 492 thousand acres of the O&C lands, or 18% of this total area. The lands consist of several areas, the Oregon and California lands and the Coos Bay Wagon Road (CBWR) lands, which were revested to the federal government following violation of grant terms. They are usually referred to collectively as \"O&C lands\" and often grouped for legislative purposes. BLM or FS's mandate to sell timber on the O&C lands derives directly from the O&C lands' establishing statute. The O&C Act directs that O&C lands be managed for sustained yield of permanent forest production, watershed protection, recreation, and contributing to the economic stability of local communities and industries. "], "subsections": []}, {"section_title": "Planning, Sale Process, and Receipts", "paragraphs": ["Congress has directed BLM to engage in long-term land use and resource management planning . Plans set the framework for land management, uses, and protection. They are developed through an interdisciplinary process with opportunit ies for public participation. BLM uses these plans to guide implementation of site-specific activities. In the case of timber, plans describe where timber harvesting may occur and include measures of sustainable timber harvest levels . They are used to guide execution of individual sales , which generate revenues. Congress has specified various uses for these revenues.", "BLM timber planning and administration follow general BLM land use planning procedures. Through FLPMA, Congress directs BLM to develop, maintain, and revise plans for managing public lands. BLM issued the first regulations to implement the planning requirement in 1979, and subsequently revised them; the current BLM planning rule dates from 2005. Plans must be developed with public participation and in accordance with various other administrative and environmental statutes (e.g., NEPA). ", "Under BLM's planning rule, resource management plans remain in effect indefinitely. They are to include monitoring and evaluation standards, and are to be amended or revised when circumstances warrant. The planning rule directs BLM to identify indicators that describe the desired forest outcomes in the plan area. BLM is to identify a suite of management actions to achieve those outcomes, including identifying sustained yield areas, areas that could support long-term timber harvest. BLM personnel determine a harvest level for these areas that can be maintained without permanent impairment; this harvest level is known as the allowable sale quantity . Allowable sale quantity is measured for a ten-year period. ", "In addition, BLM generally makes annual forest product sale plans. These plans contain estimates of sale volume, acreage, and permitted harvest methods for any sales proposed for the year. Site-specific timber harvests must comport with NEPA and relevant statutes, including any additional requirement for site-specific analysis and review. ", "To conduct an individual sale within the plan, BLM designates the timber for sale and appraises the value of the timber. BLM timber may be designated by physical marking or by enclosing timber in a sale boundary. BLM prepares a sale contract, along with a prospectus describing the sale. The sale is advertised at an appraised starting price. Interested parties may bid on the contract. A contract is awarded to the highest bidder provided legal conditions are met. The winning bidder conducts the timber harvest according to the terms specified in the contract, such as timeline and harvest method. Timber harvests must generally be completed in three years, but may be extended under certain circumstances.", "Timber sales generate revenues, and disposition of these revenues depends on a number of factors. Congress has established several funds for timber sale revenues. Depending on the type of sale and the originating lands, BLM may be required to make certain deposits to these funds. If any portion of revenues are not required to be deposited, BLM may allocate those revenues among funds at its discretion, including depositing all revenues in a single account. Some funds are permanently appropriated to BLM and may be used without further congressional action (i.e. as mandatory appropriations). See Table A-2 for a list of these funds. A more detailed discussion of funding levels, expenditures, and issues related to BLM timber revenue funds is outside the scope of this report."], "subsections": []}, {"section_title": "Timber Harvests from BLM Lands", "paragraphs": ["Timber harvesting is one of many authorized uses of BLM lands. Long-term historical data regarding BLM timber harvesting is unavailable. Other data on past timber program activity show that BLM timber harvesting may have changed over time. This section provides data on timber offered for sale, timber sold, and timber harvested from BLM lands at various points in time, along with some economic and historical factors which may have contributed to observed changes.", "Data on cut timber volume from BLM lands is available from FY1994 onward (see Figure 4 ). While complete historical cut data is unavailable prior to FY1994, some data exists about past sales (see Table 1 ). The intermittent nature of this data challenges drawing conclusions about larger trends in these periods, especially in the missing decades. In addition, these data refer to either timber sold or timber offered for sale, which differs from volume of timber cut. However, as an approximate comparison, the data show that the volumes sold prior to FY1990 are large compared to recent volumes offered for sale. Observers confirmed a decline in public domain timber offered for sale beginning in 1991, though the investigation did not consider the O&C lands. ", "Volumes harvested from BLM lands were between 100 and 260 MMBF from FY1995 to FY2000 and from FY2004 to FY2018 (see Figure 4 ). Harvests were lower in FY1994 and between FY2001 and FY2003. Harvested volumes have shown a generally increasing trend since FY2001, with the largest recently recorded harvest in FY2015 (about 258 MMBF). Like the NFS, harvests from BLM lands during the recession and housing market collapse of 2008 experienced relatively little change in volume, for unclear reasons. In FY2018, BLM harvested about 178 MMBF. ", "Data on cut timber value from BLM lands is available from FY1996 onward (see Figure 4 ). Total value of harvests has declined since FY1996. Harvest values have generally increased since the low value of approximately $15.4 million in FY2001, and have been between $20 million and $50 million since FY2011 (FY2018 dollars). In FY2018, cut value was $41.3 million. Like the FS, BLM harvest value during the recession and housing market collapse of 2008 declined, but the relative change was small compared to the decreases of the late 1990s. Harvest value may vary due to the quality, species, and age class of offered timber as well as timber market conditions, and is correlated with harvested volume. BLM harvest values per unit of timber are higher than FS values per unit, due to the dominant timber type harvested from BLM lands, among other factors. "], "subsections": [{"section_title": "Geographic Distribution of Timber Harvests on BLM Lands", "paragraphs": ["Most timber harvests on BLM lands are conducted on the O&C lands. From FY2014 to FY2018, the average harvested volume from O&C lands was 93% of the average total volume. The large proportion of volume harvested from O&C lands reflects the forest cover and type, dominant use for forest production, and the size of the forest industry in the Pacific Northwest. As with the NFS, in general, BLM harvest volume and value is a function of many complex factors, including the dominant timber type, age class, and condition; the suitability of sites for harvest operations; legal limitations on land uses; and the status of the local forest products industry. "], "subsections": []}]}]}, {"section_title": "Issues for Congress", "paragraphs": ["Management of federal lands for multiple uses and sustained yield is challenging, including balancing timber harvesting with other uses. Timber production from federal lands is driven by a complex interaction of environmental factors, market forces, and land management policies. Under current law, efforts to change harvest levels must comport with the provision of a sustained yield of multiple uses. Congress has sometimes considered legislation to prioritize or exclude some uses in a limited manner\u2014in certain geographic regions, for example\u2014but has not changed these fundamental management concepts since their enactment in the 1960s and 1970s.", "The public often expresses preferences for uses of federal forests, including with respect to timber harvesting. Some may support timber harvesting generally, and believe the current levels of production are sufficient. Others may wish to see the levels of production increased or decreased, depending on their perspective. Those who support timber harvesting on federal lands may cite benefits to the local timber industry, a belief that harvesting is part of the core mission of federal forests, or a belief that timber harvesting is a tool for improving forest health conditions, among other reasons. Proponents of timber harvesting on federal lands may also emphasize the role of timber harvesting in some forest-adjacent rural economies. Others may oppose timber harvesting due to concerns about ecological or human impacts: for example, they may cite beliefs that timber sales have detrimental impacts on environmental quality, fish and wildlife habitat, forest character, recreation and tourism, or cultural and aesthetic values. Opponents may also contend that conducting timber sales favors the timber industry over other interests. ", "In addition to the themes identified above, Congress may also debate other issues related to federal timber harvests that are not discussed in detail in this report. For example, these include issues related to the disposition and use of timber sale revenues; the relationship between timber harvest planning and statutes such as NEPA and the Endangered Species Act (ESA); and special harvest authorities, among others. "], "subsections": [{"section_title": "Appendix. Timber Receipt Funds", "paragraphs": ["The following tables list and describe the funds that receive timber sale revenues; the funds' statutory authority is also shown. A detailed discussion of funding levels, expenditures, and issues related to these funds is outside the scope of this report. "], "subsections": []}]}]}}
{"id": "R41930", "title": "Mail and Wire Fraud: A Brief Overview of Federal Criminal Law", "released_date": "2019-02-11T00:00:00", "summary": ["The mail and wire fraud statutes are exceptionally broad. Their scope has occasionally given the courts pause. Nevertheless, prosecutions in their name have brought to an end schemes that have bilked victims out of millions, and sometimes billions, of dollars. The statutes proscribe (1) causing the use of the mail or wire communications, including email; (2) in conjunction with a scheme to intentionally defraud another of money or property; (3) by means of a material deception. The offenses, along with attempts or conspiracies to commit them, carry a term of imprisonment of up to 30 years in some cases, followed by a term of supervised release. Offenders also face the prospect of fines, orders to make restitution, and forfeiture of their property.", "The mail and wire fraud statutes overlap with a surprising number of other federal criminal statutes. Conduct that supports a prosecution under the mail or wire fraud statutes will often support prosecution under one or more other criminal provision(s). These companion offenses include (1) those that use mail or wire fraud as an element of a separate offense, like racketeering or money laundering; (2) those that condemn fraud on some jurisdictional basis other than use of the mail or wire communications, like those that outlaw defrauding the federal government or federally insured banks; and (3) those that proscribe other deprivations of honest services (i.e., bribery and kickbacks), like the statutes that ban bribery of federal officials or in connection with federal programs.", "Among the crimes for which mail or wire fraud may serve as an element, RICO (Racketeer Influenced and Corrupt Organizations Act) outlaws employing the patterned commission of predicate offenses to conduct the affairs of an enterprise that impacts commerce. Money laundering consists of transactions involving the proceeds of a predicate offense in order to launder them or to promote further predicate offenses.", "The statutes that prohibit fraud in some form or another are the most diverse of the mail and wire fraud companions. Congress modeled some after the mail and wire fraud statutes, incorporating elements of a scheme to defraud or obtain property by false pretenses into statutes that outlaw bank fraud, health care fraud, securities fraud, and foreign labor contracting fraud. Congress designed others to protect the public fisc by proscribing false claims against the United States, conspiracies to defraud the United States by obstructing its functions, and false statements in matters within the jurisdiction of the United States and its departments and agencies.", "Federal bribery and kickback statutes populate the third class of wire and mail fraud companions. One provision bans offering or accepting a thing of value in exchange for the performance or forbearance of a federal official act. Another condemns bribery of faithless agents in connection with federally funded programs and activities. A third, the Hobbs Act, outlaws bribery as a form of extortion under the color of official right.", "The fines, prison sentences, and other consequences that follow conviction for wire and mail fraud companions vary considerably, with fines from not more than $25,000 to not more than $2 million and prison terms from not more than five years to life."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction1", "paragraphs": ["Some time ago, a federal prosecutor referred to the mail and wire fraud statutes as \"our Stradivarius, our Colt 45, our Louisville Slugger \u2026 and our true love.\" Not everyone shared the prosecutor's delight. Commentators have argued that the statutes \"have long provided prosecutors with a means by which to salvage a modest, but dubious, victory from investigations that essentially proved unfruitful.\" Federal judges have also expressed concern from time to time, observing that the \"mail and wire fraud statutes have 'been invoked to impose criminal penalties upon a staggeringly broad swath of behavior,' creating uncertainty in business negotiations and challenges to due process and federalism.\" Nevertheless, mail and wire fraud prosecutions have brought to an end schemes that bilked victims of millions, and sometimes billions, of dollars. ", "The federal mail and wire fraud statutes outlaw schemes to defraud that involve the use of mail or wire communications. Both condemn fraudulent conduct that may also come within the reach of other federal criminal statutes. Both may serve as racketeering and money laundering predicate offenses. Both are punishable by imprisonment for not more than 20 years; for not more than 30 years, if the victim is a financial institution or the offense is committed in the context of major disaster or emergency. Both entitle victims to restitution. Both may result in the forfeiture of property."], "subsections": []}, {"section_title": "Background", "paragraphs": ["The first of the two, the mail fraud statute, emerged in the late 19 th century as a means of preventing \"city slickers\" from using the mail to cheat guileless \"country folks.\" But for penalty increases and amendments calculated to confirm its breadth, the prohibition has come down to us essentially unchanged. Speaking in 1987, the Supreme Court noted that \"the last substantive amendment to the statute ... was the codification of the holding of Durland ... in 1909.\" Congress did amend it thereafter to confirm that the mail fraud statute and the wire fraud statute reached schemes to defraud another of the right to honest services and to encompass the use of commercial postal carriers.", "The wire fraud statute is of more recent vintage. Enacted as part of the Communications Act Amendments of 1952, it was always intended to mirror the provisions of the mail fraud statute. Since its inception, changes in the mail fraud statute have come with corresponding changes in the wire fraud statute in most instances. "], "subsections": []}, {"section_title": "Elements", "paragraphs": ["The mail and wire fraud statutes are essentially the same, except for the medium associated with the offense\u2014the mail in the case of mail fraud and wire communication in the case of wire fraud. As a consequence, the interpretation of one is ordinarily considered to apply to the other. In construction of the terms within the two, the courts will frequently abbreviate or adjust their statement of the elements of a violation to focus on the questions at issue before them. As treatment of the individual elements makes clear, however, there seems little dispute that conviction requires the government to prove", "the use of either mail or wire communications in the foreseeable furtherance of a scheme and intent to defraud another of either property or honest services involving a material deception. "], "subsections": [{"section_title": "Use of Mail or Wire Communications", "paragraphs": ["The wire fraud statute applies to anyone who \"transmits or causes to be transmitted by wire, radio, or television communication in interstate or foreign commerce any writings ... for the purpose of executing [a] ... scheme or artifice.\" The mail fraud statute is similarly worded and applies to anyone who \"... for the purpose of executing [a] ... scheme or artifice ... places in any post office ... or causes to be delivered by mail ... any ... matter.\" ", "The statutes require that a mailing or wire communication be in furtherance of a scheme to defraud. The mailing or communication need not be an essential element of the scheme, as long as it \"is incident to an essential element of the scheme.\" A qualifying mailing or communication, standing alone, may be routine, innocent or even self-defeating, because \"[t]he relevant question at all times is whether the mailing is part of the execution of the scheme as conceived by the perpetrator at the time, regardless of whether the mailing later, through hindsight, may prove to have been counterproductive.\" The element may be satisfied by mailings or communications \"designed to lull the victim into a false sense of security, postpone inquiries or complaints, or make the transaction less suspect.\" The element may also be satisfied by mailings or wire communications used to obtain the property which is the object of the fraud. ", "A defendant need not personally have mailed or wired a communication; it is enough that he \"caused\" a mailing or transmission of a wire communication in the sense that the mailing or transmission was the reasonable foreseeable consequence of his intended scheme."], "subsections": []}, {"section_title": "Scheme to Defraud", "paragraphs": ["The mail and wire fraud statutes \"both prohibit, in pertinent part, 'any scheme or artifice to defraud[,]' or to obtain money or property 'by means of false or fraudulent pretenses, representations, or promises,\" or deprive another of the right to honest services by such means. From the beginning, Congress intended to reach a wide range of schemes to defraud, and has expanded the concept whenever doubts arose. It added the second prong\u2014obtaining money or property by false pretenses, representations, or promises\u2014after defendants had suggested that the term \"scheme to defraud\" covered false pretenses concerning present conditions but not representations or promises of future conditions. More recently, it added 18 U.S.C. \u00a7 1346 to make it clear the term \"scheme to defraud\" encompassed schemes to defraud another of the right to honest services. Even before that adornment, the words were understood to \"refer 'to wronging one in his property rights by dishonest methods or schemes,' and 'usually signify the deprivation of something of value by trick, deceit, chicane or overreaching.'\" ", "As a general rule, the crime is done when the scheme is hatched and an attendant mailing or interstate phone call or email has occurred. Thus, the statutes are said to condemn a scheme to defraud regardless of its success. It is not uncommon for the courts to declare that to demonstrate a scheme to defraud the government needs to show that the defendant's \"communications were reasonably calculated to deceive persons of ordinary prudence and comprehension.\" Even a casual reading, however, might suggest that the statutes also cover a scheme specifically designed to deceive a na\u00efve victim. Nevertheless, the courts have long acknowledged the possibility of a \"puffing\" defense, and there may be some question whether the statutes reach those schemes designed to deceive the gullible though they could not ensnare the reasonably prudent. In any event, the question may be more clearly presented in the context of the defendant's intent and the materiality of the deception. "], "subsections": [{"section_title": "Defrauding or to Obtain Money or Property", "paragraphs": ["The mail and wire fraud statutes speak of schemes to defraud or to obtain money or property by means of false or fraudulent pretenses. The Supreme Court has said that the phrase \"to defraud\" and the phrase \"to obtain money or property\" do not represent separate crimes, but instead the phrase \"obtain money or property\" describes what constitutes a scheme to defraud. In later look-alike offenses, Congress specifically numerated the two phrases. The bank fraud statute, for example, applies to \"whoever knowingly executes \u2026 a scheme or artifice \u2014 (1) to defraud a financial institution; or (2) to obtain any of the money, funds, credits, assets, securities, or other property owned by \u2026 a financial institution, by means of false or fraudulent pretenses \u2026\" It left the mail and wire fraud statutes, however, unchanged.", "The mail and wire fraud statutes clearly protect against deprivations of tangible property. They also protect certain intangible property rights, but only those that have value in the hands of the victim of a scheme. \"To determine whether a particular interest is property for purposes of the fraud statutes, [courts] look to whether the law traditionally has recognized and enforced it as a property right.\" "], "subsections": []}]}, {"section_title": "Materiality", "paragraphs": ["Neither the mail nor the wire fraud statute exhibits an explicit reference to materiality. Yet materiality is an element of each offense, because at the time of the statutes' enactment, the word \"defraud\" was understood to \"require[] a misrepresentation or concealment of [a] material fact.\" Thus, other than in an honest services context, a \"scheme to defraud\" for mail or wire fraud purposes must involve a material misrepresentation of some kind. \"A misrepresentation is material if it is capable of influencing the intended victim.\""], "subsections": []}, {"section_title": "Intent", "paragraphs": ["Again, other than in the case of honest services, \"'intent to defraud' requires an intent to (1) deceive, and (2) cause some harm to result from the deceit. A defendant acts with the intent to deceive when he acts knowingly with the specific intent to deceive for the purpose of causing pecuniary loss to another or bringing about some financial gain to himself.\"", "A defendant has a complete defense if he believes the deceptive statements or promises to be true or otherwise acts under circumstances that belie an intent to defraud. Yet, a defendant has no defense if he blinds himself to the truth. Nor is it a defense if he intends to deceive but feels his victim will ultimately profit or be unharmed. "], "subsections": []}, {"section_title": "Honest Services", "paragraphs": ["The Supreme Court held in McNally v. United States that the protection of the mail fraud statute, and by implication the protection of the wire fraud statute, did not extend to \"the intangible right of the citizenry to good government.\" Soon after McNally , Congress enlarged the mail and wire fraud protection to include the intangible right to honest services, by defining the \"term 'scheme or artifice to defraud' [to] include[s] a scheme or artifice to deprive another of the intangible right to honest services.\" Lest the expanded definition be found unconstitutionally vague, the Court in Skilling v. United States limited its application to cases of bribery or kickbacks. The Court in Skilling supplied only a general description of the bribery and kickbacks condemned in the honest-services statute. Subsequent lower federal courts have often looked to the general federal law relating to bribery and kickbacks for the substantive elements of honest services bribery. In this context, bribery requires \"a quid pro quo\u2014a specific intent to give \u2026 something of value in exchange for an official act.\" And an \"official act\" means no more than an officer's formal exercise of governmental power in the form of a \"decision or action on a 'question, matter, cause, suit, proceeding or controversy'\" before him.", "The definition of the word \"kickback\" quoted by the Court in Skilling has since been reassigned, and the courts have cited the dictionary definition on occasion. ", "Except for the elements of a scheme to defraud in the form of a bribe and a kickback, honest services fraud, as an adjunct of the mail and wire fraud statutes, draws its elements and the sanctions that attend the offense from the mail and wire fraud statutes."], "subsections": []}, {"section_title": "Aiding and Abetting, Attempt, and Conspiracy", "paragraphs": ["Attempting or conspiring to commit mail or wire fraud or aiding and abetting the commission of those offenses carries the same penalties as the underlying offense. \"In order to aid and abet another to commit a crime it is necessary that a defendant in some sort associate himself with the venture, that he participate in it as in something that he wishes to bring about, that he seek by his action to make it succeed.\" ", "\"Conspiracy to commit wire fraud under 18 U.S.C. \u00a7 1349 requires a jury to find that (1) two or more persons agreed to commit wire fraud and (2) the defendant willfully joined the conspiracy with the intent to further its unlawful purpose.\" As a general rule, a conspirator is liable for any other offenses that a co-conspirator commits in the foreseeable furtherance of the conspiracy. Such liability, however, extends only until the objectives of the conspiracy have been accomplished or the defendant has withdrawn from the conspiracy.", "Where attempt has been made a separate offense, as it has for mail and wire fraud, conviction ordinarily requires that the defendant commit a substantial step toward the completion of the underlying offense with the intent to commit it. It does not, however, require the attempt to have been successful. Unlike conspiracy, a defendant may not be convicted of both the substantive offense and the lesser included crime of attempt to commit it. "], "subsections": []}, {"section_title": "Sentencing", "paragraphs": ["A mail and wire fraud are punishable by imprisonment for not more than 20 years and a fine of not more than $250,000 (not more than $500,000 for organizations), or fine of not more than $1 million and imprisonment for not more than 30 years if the victim is a financial institution or the offense was committed in relation to a natural disaster. It is also subject to a mandatory minimum two-year term of imprisonment if identify theft is used during and in furtherance of the fraud. Conviction may also result in ", "probation, a term of supervised release, a special assessment, a restitution order, and/or a forfeiture order."], "subsections": [{"section_title": "Sentencing Guidelines", "paragraphs": ["Sentencing in federal court begins with the federal Sentencing Guidelines. The Guidelines are essentially a scorekeeping system. A defendant's ultimate sentence under the Guidelines is determined by reference first to a basic guideline, which sets a base \"offense level.\" Offense levels are then added or subtracted to reflect his prior criminal record as well as the aggravating and mitigating circumstances attending his offense. One of two basic guidelines applies to mail and wire fraud. Section 2C1.1 applies to mail or wire fraud convictions involving corruption of public officials. Section 2B1.1 applies to other mail or wire fraud convictions. Both sections include enhancements based on the amount of loss associated with the fraud.", "After all the calculations, the final offense level determines the Guidelines' recommendations concerning probation, imprisonment, and fines. The Guidelines convert final offense levels into 43 sentencing groups, which are in turn each divided into six sentencing ranges based on the defendant's criminal history. Thus, for instance, the recommended sentencing range for a first-time offender (i.e., one with a category I criminal history) with a final offense level of 15 is imprisonment for between 18 and 24 months. A defendant with the same offense level 15 but with a criminal record placing him in criminal history category VI, would face imprisonment from between 41 and 51 months. The Guidelines also provide offense-level-determined fine ranges for individuals and organizations.", "As a general rule, sentencing courts may place a defendant on probation for a term of from 1 to 5 years for any crime punishable by a maximum term of imprisonment of less than 25 years. The Guidelines, however, recommend \"pure\" probation, that is, probation without any term of incarceration, only with respect to defendants with an offense level of 8 or below, i.e., levels where the sentencing range is between zero and six months. ", "Once a court has calculated the Guidelines' recommendations, it must weigh the other statutory factors found in 18 U.S.C. \u00a7 3553(a) before imposing a sentence. Appellate courts will uphold a sentence if the sentence is procedurally and substantively reasonable. A sentence is reasonable procedurally if it is free of procedural defects, such as a failure to accurately calculate the Guidelines' recommendations and to fully explain the reasons for the sentence selected. A sentence is reasonable substantively if it is reasonable in light of circumstances that a case presents. "], "subsections": []}, {"section_title": "Supervised Release and Special Assessments", "paragraphs": ["Supervised release is a form of parole-like supervision imposed after a term of imprisonment has been served. Although imposition of a term of supervised release is discretionary in mail and wire fraud cases, the Sentencing Guidelines recommend its imposition in all felony cases. The maximum supervised release term for wire and mail fraud generally is three years\u2014five years when the defendant is convicted of the mail or wire fraud against a financial institution that carries a 30-year maximum term of imprisonment. Release will be subject to a number of conditions, violation of which may result in a return to prison for not more than two years (not more than three years if the original crime of conviction carried a 30-year maximum). There are three mandatory conditions: (1) commit no new crimes; (2) allow a DNA sample to be taken; and (3) submit to periodic drug testing. The court may suspend the drug testing condition, although it is under no obligation to do so even though the defendant has no history of drug abuse and drug abuse played no role in the offense. ", "Most courts will impose a standard series of conditions in addition to the mandatory condition of supervised release. The Sentencing Guidelines recommend that these include the payment of any fines, restitution, and special assessments that remain unsatisfied. Defendants convicted of mail or wire fraud must pay a special assessment of $100. "], "subsections": []}, {"section_title": "Restitution", "paragraphs": ["Restitution is ordinarily required of those convicted of mail or wire fraud. The victims entitled to restitution include those directly and proximately harmed by the defendant's crime of conviction, and \"in the case of an offense that involves as an element a scheme, conspiracy, or pattern of criminal activity,\" like mail and wire fraud, \"any person directly harmed by the defendant's conduct in the course of the scheme, conspiracy, or pattern.\" "], "subsections": []}, {"section_title": "Forfeiture", "paragraphs": ["Property that constitutes the proceeds of mail or wire fraud is subject to confiscation by the United States. It may be confiscated pursuant to either civil forfeiture or criminal forfeiture procedures. Civil forfeiture proceedings are conducted that treat the forfeitable property as the defendant. Criminal forfeiture proceedings are conducted as part of the criminal prosecution of the property owner. "], "subsections": []}]}]}, {"section_title": "Related Criminal Provisions", "paragraphs": ["The mail and wire fraud statutes essentially outlaw dishonesty. Due to their breadth, misconduct that constitutes mail or wire fraud may constitute a violation of one or more other federal criminal statutes as well. This overlap occurs perhaps most often with respect to (1) crimes for which mail or wire fraud are elements (\"predicate offenses\") of another offense; (2) fraud proscribed under jurisdictional circumstances other than mail or wire use; and (3) honest services fraud in the form of bribery or kickbacks."], "subsections": [{"section_title": "Predicate Offense Crimes", "paragraphs": ["Some federal crimes have as an element the commission of some other federal offense. The money laundering statute, for example, outlaws laundering the proceeds of various predicate offenses. The racketeering statute outlaws the patterned commission of a series of predicate offenses in order to operate a racketeering enterprise. Mail and wire fraud are racketeering and money laundering predicate offenses. "], "subsections": [{"section_title": "RICO", "paragraphs": ["The Racketeering Influenced and Corrupt Organization (RICO) provisions outlaw acquiring or conducting the affairs of an enterprise, engaged in or whose activities affect interstate commerce, through loan sharking or the patterned commission of various other predicate offenses. The racketeering-conduct and conspiracy-to-engage-in-racketeering-conduct appear to be the RICO offenses most often built on wire or mail fraud violations. The elements of the RICO conduct offense are (1) conducting the affairs; (2) of an enterprise; (3) engaged in activities in or that impact interstate or foreign commerce; (4) through a pattern; (5) of racketeering activity. To prove a RICO conspiracy, the government must prove: \"(1) that two or more persons agreed to conduct or to participate, directly or indirectly, in the conduct of an enterprise's affairs through a pattern of racketeering activity; (2) that the defendant was a party to or a member of that agreement; and (3) that the defendant joined the agreement or conspiracy knowing of its objective to conduct or participate, directly or indirectly, in the conduct of the enterprise's affairs through a pattern of racketeering activity.\" ", "\"Racketeering activity\" means, among other things, any act that is indictable under either the mail or wire fraud statutes. As for pattern, a RICO pattern \"requires at least two acts of racketeering activity. The racketeering predicates may establish a pattern if they [were] related and \u2026 amounted to, or threatened the likelihood of, continued criminal activity.'\" ", "The pattern of predicate offenses must be used by someone employed by or associated with a qualified enterprise to conduct or participate in its activities. \"Congress did not intend to extend RICO liability . . . beyond those who participated in the operation and management of an enterprise through a pattern of racketeering activity.\" Nevertheless, \"liability under \u00a7 1962(c) is not limited to upper management \u2026 An enterprise is operated not just by upper management but also by lower rung participants.\" ", "The enterprise may be either any group of individuals, any legal entity, or any group \"associated in fact.\" \"Nevertheless, 'an association-in-fact enterprise must have at least three structural features: a purpose, relationships among those associated with the enterprise and longevity sufficient to permit those associates to pursue the enterprise's purpose.'\" Moreover, qualified enterprises are only those that \"engaged in, or the activities of which affect, interstate or foreign commerce.\"", "RICO violations are punishable by imprisonment for not more than 20 years and a fine of not more than $250,000 (not more than $500,000 for organizations). The crime is one for which restitution must be ordered when one of the predicate offenses is mail or wire fraud. RICO has one of the first contemporary forfeiture provisions, covering property and interests acquired through RICO violations. As noted earlier, any RICO predicate offense is by virtue of that fact a money laundering predicate. RICO violations create a cause of action for treble damages for the benefit of anyone injured in their business or property by the offense. "], "subsections": []}, {"section_title": "Money Laundering", "paragraphs": ["Mail and wire fraud are both money laundering predicate offenses by virtue of their status as RICO predicates. The most commonly prosecuted federal money laundering statute, 18 U.S.C. \u00a7 1956, outlaws, among other things, knowingly engaging in a financial transaction involving the proceeds generated by a \"specified unlawful activity\" (a predicate offense) for the purpose (1) of laundering the proceeds (i.e., concealing their source or ownership), or (2) of promoting further predicating offenses. ", "To establish the concealment offense, the government must establish that \"(1) [the] defendant conducted, or attempted to conduct a financial transaction which in any way or degree affected interstate commerce or foreign commerce; (2) the financial transaction involved proceeds of illegal activity; (3) [the] defendant knew the property represented proceeds of some form of unlawful activity, [such as mail or wire fraud]; and (4) [the] defendant conducted or attempted to conduct the financial transaction knowing the transaction was designed in whole or in part to conceal or disguise the nature, the location, the source, the ownership or the control of the proceeds of specified unlawful activity.\"", "To prove the promotional offense, \"the Government must show that the defendant: (1) conducted or attempted to conduct a financial transaction; (2) which the defendant then knew involved the proceeds of unlawful activity; (3) with the intent to promote or further unlawful activity.\"", "Nothing in either provision suggests that the defendant must be shown to have committed the predicate offense. Moreover, simply establishing that the defendant spent or deposited the proceeds of the predicate offense is not enough without proof of an intent to promote or conceal. ", "Either offense is punishable by imprisonment for not more than 20 years and a fine of not more than $500,000. Property involved in a transaction in violation of Section 1956 is subject to civil and criminal forfeiture. ", "Merely depositing the proceeds of a money laundering predicate offense, like mail or wire fraud, does not alone constitute a violation of Section 1956. It is enough for a violation of 18 U.S.C. \u00a7\u00a01957, however, if more than $10,000 is involved. Section 1957 uses Section 1956's definition of specified unlawful activities. Thus, mail and wire fraud violations may serve as the basis for the prosecution under Section 1957. \"Section 1957 differs from Section 1956 in two critical respects: It requires that the property have a value greater than $10,000, but it does not require that the defendant know of [the] design to conceal aspects of the transaction or that anyone have such a design.\"", "Violations are punishable by imprisonment for not more than 10 years and a fine of not more than $250,000 (not more than $500,000) for organizations. The property involved in a violation is subject to forfeiture under either civil or criminal procedures."], "subsections": []}]}, {"section_title": "Fraud Under Other Jurisdictional Circumstances", "paragraphs": ["This category includes the offenses that were made federal crimes because they involve fraud against the United States, or because they are other frauds that share elements with the mail and wire fraud. The most prominent are the proscriptions against defrauding the United States by the submission of false claims, conspiracy to defraud the United States, and material false statements in matters within the jurisdiction of the United States. Bank fraud, health care fraud, securities and commodities fraud, and fraud in foreign labor contracting are mail and wire fraud look-alikes. "], "subsections": [{"section_title": "Defrauding the United States", "paragraphs": [], "subsections": [{"section_title": "False Claims", "paragraphs": ["Section 287 outlaws the knowing submission of a false claim against the United States. \"To prove a false claim, the government must prove that (1) [the defendant] 'made and presented' to the government a claim, (2) 'the claim was false, fictitious, or fraudulent,' (3) [the defendant] knew the claim was false, fictitious, or fraudulent, and (4) 'the claim was material' to the government.\" The offense carries a sentence of imprisonment for not more than five years and a fine of not more than $250,000 (not more than $500,000 for organizations). The crime is one for which restitution must be ordered. There is no explicit authority for confiscation of property tainted by the offense, but either a private individual or the government may bring a civil action for treble damages under the False Claims Act. Section 287 offenses are neither RICO nor money laundering predicate offenses. Nevertheless, a defendant who presents his false claim by mail or email may find himself charged under both Section 287 and either the mail or wire fraud statutes. "], "subsections": []}, {"section_title": "Conspiracy to Defraud the United States", "paragraphs": ["The general conspiracy statute has two parts. It outlaws conspiracies to violate the laws of the United States. More relevant here, it also outlaws conspiracies to defraud the United States. \"To convict on a charge under the 'defraud' clause, the government must show that the defendant (1) entered into an agreement (2) to obstruct a lawful government function (3) by deceitful or dishonest means and (4) committed at least one overt act in furtherance of the conspiracy.\" Thus, the \"fraud covered by the statute reaches any conspiracy for the purpose of impairing, obstructing or defeating the lawful functions of any department of the Government\" by \"deceit, craft or trickery, or at least by means that are dishonest.\" Unlike mail and wire fraud, the government need not show that the scheme was designed to deprive another of money, property, or honest services; it is enough to show that the scheme is designed to obstruct governmental functions.", "Conspiracy to defraud the United States is punishable by imprisonment for not more than five years and a fine of not more than $250,000 (not more than $500,000 for organizations). It is neither a RICO nor a money laundering predicate offense. It is an offense for which restitution must be ordered. There is no explicit authority for confiscation of property tainted by the offense. "], "subsections": []}, {"section_title": "False Statements", "paragraphs": ["Section 1001 outlaws knowingly and willfully making a material false statement on a matter within the jurisdiction of the executive, legislative, or judicial branch of the federal government. A matter is material for purposes of Section 1001 when \"it has a natural tendency to influence, or [is] capable of influencing, the decision of\" the individual or entity to whom it is addressed. A matter is within the jurisdiction of a federal entity \"when it has the power to exercise authority in a particular matter,\" and federal jurisdiction \"may exist when false statements [are] made to state or local government agencies receiving federal support or subject to federal regulation.\" ", "A violation of Section 1001 is punishable by imprisonment for not more than five years and a fine of not more than $250,000 (not more than $500,000 for organizations). It is neither a RICO nor a money laundering predicate offense. It is an offense for which restitution must be ordered. There is no explicit authority for confiscation of property tainted by the offense, unless the offense relates to the activities of various federal financial receivers and conservators. Moreover, in a situation where the offense involves the submission of a false claim, either a private individual or the government may bring a civil action for treble damages under the False Claims Act. "], "subsections": []}]}, {"section_title": "Fraud Elsewhere in Chapter 63", "paragraphs": ["Chapter 63 contains four other fraud proscriptions in addition to mail and wire fraud: bank fraud, health care fraud, securities and commodities fraud, and fraud in foreign labor contracting. Each relies on a jurisdictional base other than use of the mail or wire communications. "], "subsections": [{"section_title": "Bank Fraud", "paragraphs": ["The bank fraud statute outlaws (1) schemes to defraud a federally insured financial institution, and (2) schemes to falsely obtain property from such an institution. To establish the bank- property scheme to defraud offense, \"the Government must prove: (1) the defendant knowingly executed or attempted to execute a scheme or artifice to defraud a financial institution; (2) the defendant did so with the intent to defraud a financial institution; and (3) the financial institution was federally insured.\"", "As for the bank-custody offense, \"the government must prove (1) that a scheme existed to obtain moneys, funds, or credit in the custody of a federally-insured bank by fraud; (2) that the defendant participated in the scheme by means of material false pretenses, representations, or promises; and (3) that the defendant acted knowingly.\"", "Violation of either offense is punishable by imprisonment for not more than 30 years and a fine of not more than $1 million. Bank fraud is both a RICO and a money laundering predicate offense. Conviction also requires an order for victim restitution. Property constituting the proceeds of a violation is subject to forfeiture under either civil or criminal procedure."], "subsections": []}, {"section_title": "Health Care Fraud", "paragraphs": ["The health care fraud provision follows the pattern of other Chapter 63 offenses. It condemns schemes to defraud. The schemes it proscribes include honest services fraud in the form of bribery and kickbacks. Attempts and conspiracies to violate its prohibitions carry the same penalties as the complete offense it describes. It is often prosecuted along with other related offenses. Parsed to its elements, the section declares:", "[a] Whoever", "[b] knowingly and willfully", "[c] executes or attempts to execute", "[d] a scheme or artifice", "(1) to defraud any health care benefit program, or", "(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any money or property owned by, or under the custody or control of, any health care benefit program", "[e] in connection with the delivery of or payment for health care benefits, items, or services shall be \u2026", "Section 1347's penalty structure is somewhat distinctive. General violations are punishable by imprisonment for not more than 10 years and fines of not more than $250,000. Should serious bodily injury result, however, the maximum penalty is increased to imprisonment for not more than 20 years; should death result, the maximum penalty is imprisonment for life or any term of years. Section 1347 offenses are neither money laundering nor RICO predicate offenses, and proceeds of a violation of Section 1347 are not subject to confiscation. Victims, however, are entitled to restitution. "], "subsections": []}, {"section_title": "Securities and Commodities Fraud", "paragraphs": ["Section 1348, the securities and commodities fraud prohibition, continues the progression of separating its defrauding feature from its obtaining-property feature. The elements of defrauding offense \"are (1) fraudulent intent, (2) a scheme or artifice to defraud, and (3) a nexus with a security.\" To prove a violation of Section 1348(2), the government must establish that the defendant (1) executed, or attempted to execute, a scheme or artifice; (2) with fraudulent intent; (3) in order to obtain money or property; (4) by material false or fraudulent pretenses, representations, or promises. ", "A conviction for mail fraud or wire fraud, or both, sometimes accompanies a conviction for securities fraud under Section 1348.", "Under either version of Section 1348, offenders face imprisonment for not more than 25 years and fines of not more than $250,000 (not more than $500,000 for organizations). The offense s are neither money laundering nor RICO predicate offense s . Victim restitution must be ordered upon conviction, but forfeiture is not authorized."], "subsections": []}, {"section_title": "Fraud in Foreign Labor Contracting", "paragraphs": ["\"The substantive offense of fraud in foreign labor contracting [under 18 U.S.C. \u00a7 1351] occurs when someone: (1) recruits, solicits, or hires a person outside the United States, or causes another person to do so, or attempts to do so; (2) does so by means of materially false or fraudulent pretenses, representations or promises regarding that employment; and (3) acts knowingly and with intent to defraud.\" The offense occurs outside the United States when related to a federal contract or U.S. presence abroad. ", "The offense is a RICO predicate offense and consequently a money laundering predicate offense as well. A restitution order is required at sentencing, but forfeiture is not authorized."], "subsections": []}]}, {"section_title": "Honest Services Fraud Elsewhere", "paragraphs": ["After the Supreme Court's 2010 decision in Skillin g v. United States , honest services mail and wire fraud consists of bribery and kickback schemes furthered by use of the mail or wire communications. Mail and wire fraud aside, the principal bribery and kickback statutes include 18 U.S.C. \u00a7\u00a7 201(b)(1) (bribery of federal officials), 666 (bribery relating to federal programs), 1951 (extortion under color of official right); 15 U.S.C \u00a7\u00a7 78dd-1 to 78dd-3 (foreign corrupt practices); and 42 U.S.C. \u00a7 1320a-7b (Medicare/Medicaid anti-kickback). "], "subsections": [{"section_title": "Bribery of Federal Officials", "paragraphs": ["Conviction for violation of Section 201(b)(1) \"requires a showing that something of value was corruptly ... offered or promised to a public official ... or corruptly ... sought ... or agreed to be received by a public official with intent ... to influence any official act ... or in return for 'being influenced in the performance of any official act.\" ", "The hallmark of the offense is a corrupt quid pro quo, \"a specific intent to give or receive something of value in exchange for an official act.\" The public officials covered include federal officers and employees, those of the District of Columbia, and those who perform tasks for or on behalf of the United States or any of its departments or agencies. The official acts that constitute the objective of the corrupt bargain include any decision or action relating to any matter coming before an individual in his official capacity.", "Section 201 punishes bribery with imprisonment for up to 15 years, a fine of up to $250,000 (up to $500,000 for an organization), and disqualification from future federal office or employment. Section 201 is a RICO predicate offense and consequently also a money laundering predicate offense. The proceeds of a bribe in violation of Section 201 are subject to forfeiture under either civil or criminal procedure. "], "subsections": []}, {"section_title": "Bribery and Fraud Related to Federal Programs", "paragraphs": ["Section 666 outlaws both (1) fraud and (2) bribery by the faithless agents of state, local, tribal, or private entities\u2014that receive more than $10,000 in federal benefits\u2014in relation to a transaction of $5,000 or more. \"A violation of Section 666(a)(1)(A) requires proof of five elements. The government must prove that: (1) a defendant was an agent of an organization, government, or agency; (2) in a one-year period that organization, government, or agency received federal benefits in excess of $10,000; (3) a defendant \u2026 obtained by fraud \u2026 ; (4) \u2026 property owned by, or in the care, custody, or control of, the organization, government, or entity; and (5) the value of that property was at least $5,000.\"", "\"A person is guilty under \u00a7 666[(a)(1)(B)] if he, being an agent of an organization, government, or governmental agency that receives federal-program funds, corruptly solicits or demands for the benefit of any person, or accepts or agrees to accept, anything of value from any person, intending to be influenced or rewarded in connection with any business, transaction, or series of transactions of such organization, government, or agency involving anything of value of $5,000 or more.\"", "Agents are statutorily defined as \"person[s] authorized to act on behalf of another person or a government and, in the case of an organization or government, includes a servant or employee, and a partner, director, officer, manager, and representative.\" The circuits appear divided over whether the government must establish a quid pro quo as in a Section 201 bribery case. The government, however, need not establish that the tainted transaction involves federal funds.", "Violations of Section 666 are punishable by imprisonment for not more than 10 years and a fine of not more than $250,000 (not more than $500,000 for organizations). Section 666 offenses are money laundering predicate offenses. Section 666 offenses are not among the RICO federal predicate offenses, although bribery in violation of state felony laws is a RICO predicate offense. The proceeds of a bribe in violation of Section 666 are subject to forfeiture under either civil or criminal procedure. "], "subsections": []}, {"section_title": "Hobbs Act", "paragraphs": ["The Hobbs Act, 18 U.S.C. \u00a7 1951, outlaws obtaining the property of another under \"color of official right,\" in a manner that has an effect on interstate commerce. Conviction requires the government to prove that the defendant \"(1) was a government official; (2) who accepted property to which she was not entitled; (3) knowing that she was not entitled to the property; and (4) knowing that the payment was given in return for officials acts: (5) which had at least a de minimis effect on commerce.\" Conviction does not require that the public official sought or induced payment: \"the government need only show that a public official has obtained a payment to which he was not entitled, knowing that the payment was made in return for official acts.\"", "Hobbs Act violations are punishable by imprisonment for not more than 20 years and a fine of not more than $250,000 (not more than $500,000 for an organization). Hobbs Act violations are RICO predicate offenses and thus money laundering predicates as well. The proceeds of a Hobbs Act violation are subject to forfeiture under either civil or criminal procedure. "], "subsections": []}, {"section_title": "Foreign Corrupt Practices", "paragraphs": ["The bribery provisions of the Foreign Corrupt Practices Act (FCPA) are three: 15 U.S.C. \u00a7\u00a7 78dd-1 (trade practices by issuers), 78dd-2 (trade practices by domestic concerns), and 78dd-3 (trade practices by others within the United States). Other than the class of potential defendants, the elements of the three are comparable. They ", "make[] it a crime to: (1) willfully; (2) make use of the mail or any means or instrumentality of interstate commerce; (3) corruptly; (4) in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to; (5) any foreign official; (6) for purposes of [either] influencing any act or decision of such foreign official in his official capacity [or] inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official [or] securing any improper advantage; (7) in order to assist such [corporation] in obtaining or retaining business for or with, or directing business to, any person.", "None of the three proscriptions apply to payments \"to expedite or to secure the performance of a routine governmental action,\" and each affords defendants an affirmative defense for payments that are lawful under the applicable foreign law or regulation.", "Violations are punishable by imprisonment for not more than five years and by a fine of not more than $100,000 (not more than $2 million for organizations). Foreign Corrupt Practices Act violations are not RICO predicate offenses, but they are money laundering predicates. The proceeds of a violation are subject to forfeiture under either civil or criminal procedure. "], "subsections": []}, {"section_title": "Medicare Kickbacks", "paragraphs": ["The Medicare/Medicaid kickback prohibition in 42 U.S.C. 1320a-7b(b) outlaws \"knowingly and willfully [offering or paying], soliciting [or] receiving, any remuneration (including any kickback) ... (A) to induce the referral of [, or (B) the purchase with respect to] Medicare [or] Medicaid beneficiaries ... any item or service for which payment may be made in whole or in part under the Medicare [or] Medicaid programs....\"", "Violations are punishable by imprisonment for not more than five years and by a fine of not more than $25,000. Section 1320a-7b kickback violations are money laundering, but not RICO, predicate offenses. The proceeds of a violation are subject to forfeiture under either civil or criminal procedure."], "subsections": []}]}]}]}, {"section_title": "Statutory Text", "paragraphs": [], "subsections": [{"section_title": "18 U.S.C. 1341 (Mail Fraud) (Text)", "paragraphs": ["Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both."], "subsections": []}, {"section_title": "18 U.S.C. 1343 (Wire Fraud) (Text)", "paragraphs": ["Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5122 )), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both."], "subsections": []}, {"section_title": "18 U.S.C. 1346 (Honest Services) (Text)", "paragraphs": ["For the purposes of this chapter, the term \"scheme or artifice to defraud\" includes a scheme or artifice to deprive another of the intangible right of honest services."], "subsections": []}, {"section_title": "18 U.S.C. 1349 (Attempt and Conspiracy) (Text)", "paragraphs": ["Any person who attempts or conspires to commit any offense under this chapter shall be subject to the same penalties as those prescribed for the offense, the commission of which was the object of the attempt or conspiracy."], "subsections": []}]}]}}
{"id": "R43661", "title": "The Effectiveness of the Community Reinvestment Act", "released_date": "2019-02-28T00:00:00", "summary": ["The Community Reinvestment Act (CRA; P.L. 95-128, 12 U.S.C. \u00a7\u00a72901-2908) addresses how banking institutions meet the credit needs of the areas they serve, particularly in low- and moderate-income (LMI) neighborhoods. The federal banking regulatory agencies\u2014the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC)\u2014currently implement the CRA. The regulators issue CRA credits, or points, where banks engage in qualifying activities\u2014such as mortgage, consumer, and business lending; community investments; and low-cost services that would benefit LMI areas and entities\u2014that occur with a designated assessment area. These credits are then used to issue each bank a performance rating. The CRA requires these ratings be taken into account when banks apply for charters, branches, mergers, and acquisitions among other things.", "The CRA, which was enacted in 1977, was subsequently revised in 1989 to require public disclosure of bank CRA ratings to establish a four-tiered system of descriptive performance levels (i.e., Outstanding, Satisfactory, Needs to Improve, or Substantial Noncompliance). In 1995, the CRA examination was customized to account for differences in bank sizes and business models. In 2005, the bank size definitions were revised and indexed to the Consumer Price Index. The 2005 amendments also expanded opportunities for banks to earn CRA credit for public welfare investments (such as providing housing, services, or jobs that primarily benefit LMI individuals). Qualifying activities under the CRA have evolved to include consumer and business lending, community investments, and low-cost services that would benefit LMI areas and entities.", "Congressional interest in the CRA stems from various perceptions of its effectiveness. Some have argued that, by encouraging lending in LMI neighborhoods, the CRA may also encourage the issuance of higher-risk loans to borrowers likely to have repayment problems (under the presumption that low-income is correlated with lower creditworthiness), which can translate into losses for lenders. Others are concerned that the CRA is not generating sufficient incentives to increase credit availability to qualified LMI borrowers, which may impede economic recovery for some, particularly following the 2007-2009 recession.", "This report informs the congressional debate concerning the CRA's effectiveness in incentivizing bank lending and investment activity to LMI borrowers. After a discussion of the CRA's origins, it presents the CRA's examination process and bank activities that are eligible for consideration of CRA credits. Next, it discusses the difficulty of determining the CRA's influence on bank behavior. For example, the CRA does not specify the quality and quantity of CRA-qualifying activities, meaning that compliance with the CRA does not require adherence to lending quotas or benchmarks. In the absence of benchmarks, determining the extent to which CRA incentives have influenced LMI credit availability relative to other factors is not straightforward. Banks also face a variety of financial incentives\u2014for example, capital requirements, the prevailing interest rate environment, changes in tax laws, and technological innovations\u2014that influence how much (or how little) they lend to LMI borrowers. Because multiple financial profit incentives and CRA incentives tend to exist simultaneously, it is difficult to determine the extent to which CRA incentives have influenced LMI credit availability relative to other factors."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "CRA Background and Objectives", "paragraphs": ["Congress passed the Community Reinvestment Act of 1977 (CRA; P.L. 95-128 , 12 U.S.C. \u00a7\u00a72901-2908) in response to concerns that federally insured banking institutions were not making sufficient credit available in the local areas in which they were chartered and acquiring deposits. According to some in Con gress, the granting of a public bank charter should translate into a continuing obligation for that bank to serve the credit needs of the public where it was chartered. Consequently, the CRA was enacted to \"re-affirm the obligation of federally chartered or insured financial institutions to serve the convenience and needs of their service areas\" and \"to help meet the credit needs of the localities in which they are chartered, consistent with the prudent operation of the institution.\" The CRA requires federal banking regulators to conduct examinations to assess whether a bank is meeting local credit needs. The regulators issue CRA credits, or points, where banks engage in qualifying activities\u2014such as mortgage, consumer, and business lending; community investments; and low-cost services that would benefit low- and moderate-income (LMI) areas and entities\u2014that occur within assessment areas (where institutions have local deposit-taking operations). These credits are then used to issue each bank a performance rating from a four-tiered system of descriptive performance levels (Outstanding, Satisfactory, Needs to Improve, or Substantial Noncompliance). The CRA requires federal banking regulators to take those ratings into account when institutions apply for charters, branches, mergers, and acquisitions, or seek to take other actions that require regulatory approval.", "Congress became concerned with the geographical mismatch of deposit-taking and lending activities for a variety of reasons. Deposits serve as a primary source of borrowed funds that banks may use to facilitate their lending. Hence, there was concern that banks were using deposits collected from local neighborhoods to fund out-of-state as well as various international lending activities at the expense of addressing the local area's housing, agricultural, and small business credit needs. Another motivation for congressional action was to discourage redlining practices. One type of redlining can be defined as the refusal of a bank to make credit available to all of the neighborhoods in its immediate locality, including LMI neighborhoods where the bank may have collected deposits. A second type of redlining is the practice of denying a creditworthy applicant a loan for housing located in a certain neighborhood even though the applicant may qualify for a similar loan in another neighborhood. This type of redlining pertains to circumstances in which a bank refuses to serve all of the residents in an area, perhaps due to discrimination.", "The CRA applies to banking institutions with deposits insured by the Federal Deposit Insurance Corporation (FDIC), such as national banks, savings associations, and state-chartered commercial and savings banks. The CRA does not apply to credit unions, insurance companies, securities companies, and other nonbank institutions because of the differences in their financial business models. The Office of the Comptroller of the Currency (OCC), the Federal Reserve System, and the FDIC administer the CRA, which is implemented via Regulation BB. The CRA requires federal banking regulatory agencies to evaluate the extent to which regulated institutions are effectively meeting the credit needs within their designated assessment areas, including LMI neighborhoods, in a manner consistent with the federal prudential regulations for safety and soundness .", "The CRA's impact on lending activity has been publicly debated. Some observers are concerned that the CRA may induce banks to forgo more profitable lending opportunities in nontargeted neighborhoods by encouraging a disproportionate amount of lending in LMI communities. Furthermore, some argue that the CRA compels banks to make loans to higher-risk borrowers that are more likely to have repayment problems, which may subsequently compromise the financial stability of the banking system. For example, some researchers have attributed the increase in risky lending prior to the 2007-2009 recession to banks attempting to comply with CRA objectives. Others are concerned that enforcement of CRA objectives has not been stringent enough to compel banks to increase financial services in LMI areas. Almost all banks receive Satisfactory or better performance ratings (discussed in more detail below) on their CRA examinations, which some may consider indicative of weak enforcement.", "This report informs the congressional debate concerning the CRA's effectiveness in incentivizing bank lending and investment activity to LMI customers. It begins with a description of bank CRA examinations, including how a bank delineates its assessment area; the activities that may qualify for points under the three tests (i.e., lending, investment, and service) that collectively make up the CRA examination; and how the composite CRA rating is calculated. Next, the report analyzes the difficulty in attributing bank lending decisions to CRA incentives. For example, the CRA does not specify the quality and quantity of CRA-qualifying activities, meaning that CRA compliance does not require adherence to lending quotas or benchmarks. Without explicit benchmarks, linking the composition of banks' loan portfolios to either too strong or too weak CRA enforcement is difficult. Banks are also unlikely to get CRA credit for all of the loans they make to LMI customers. Specifically, higher-risk loans that banking regulators explicitly discourage are unlikely to be eligible for CRA consideration. Furthermore, greater mobility of lending and deposit-taking activity across regional boundaries due to various financial market innovations has complicated the ability to geographically link various financial activities. Hence, many banks' financial activities occurring in a designated assessment area that are eligible for CRA consideration may simply be profitable, meaning they may have occurred without the CRA incentive. Finally, this report summarizes recent policy discussions regarding modernization of the CRA."], "subsections": []}, {"section_title": "CRA Examinations", "paragraphs": ["As noted above, the federal banking regulators conduct regular examinations of banks to assess whether they meet local credit needs in designated assessment areas. The regulators issue CRA credits, or points, when banks engage in qualifying activities\u2014such as mortgage, consumer, and business lending; community investments; and low-cost services that would benefit LMI areas and entities\u2014that occur within assessment areas."], "subsections": [{"section_title": "Defining the CRA Assessment Areas", "paragraphs": ["Regulation BB provides the criteria that a bank's board of directors must use to determine the assessment area(s) in which its primary regulator will conduct its CRA examination. The assessment area typically has a geographical definition\u2014the location of a bank's main office, branches, and deposit-taking automatic teller machines, as well as surrounding areas where the bank originates and purchases a substantial portion of loans. Assessment areas must generally include at least one metropolitan statistical area (MSA) or at least one contiguous political subdivision, such as a county, city, or town. Regulation BB also requires that assessment areas may not reflect illegal discrimination, arbitrarily exclude LMI geographies, and extend substantially beyond an MSA boundary or a state boundary (unless the assessment area is located in a multistate MSA). Banking regulators regularly review a bank's assessment area delineations for compliance with Regulation BB requirements as part of the CRA examination.", "Instead of a more conventionally delineated assessment area, certain banking firms may obtain permission to devise a strategic plan for compliance with Regulation BB requirements. For example, wholesale and limited purpose banks are specialized banks with nontraditional business models. Wholesale banks provide services to larger clients, such as large corporations and other financial institutions; they generally do not provide financial services to retail clients, such as individuals and small businesses. Limited purpose banks offer a narrow product line (e.g., concentration in credit card lending) rather than provide a wider range of financial products and services. These banking firms typically apply to their primary regulators to request designation as a wholesale or limited purpose bank and, for CRA examination purposes, are evaluated under strategic plan options that have been tailored for their distinctive capacities, business strategies, and expertise. The option to develop a strategic plan of pre-defined CRA performance goals is available to any bank subject to the CRA. The public is allowed time (e.g., 30 days) to provide input on the draft of a bank's strategic plan, after which the bank submits the plan to its primary regulator for approval (within 60 days after the application is received)."], "subsections": []}, {"section_title": "Qualifying Activities", "paragraphs": ["Regulation BB does not impose lending quotas or benchmarks. Instead, Regulation BB provides banks with a wide variety of options to serve the needs of their assessment areas. Qualifying CRA activities include mortgage, consumer, and business lending; community investments; and low-cost services that would benefit LMI areas and entities. For example, banks may receive CRA credits for such activities as ", "investing in special purpose community development entities (CDEs), which facilitate capital investments in LMI communities (discussed below); providing support (e.g., consulting, detailing an employee, processing transactions for free or at a discounted rate, and providing office facilities) to minority- and women-owned financial institutions and low-income credit unions (MWLIs), thereby enhancing their ability to serve LMI customers; serving as a joint lender for a loan originated by MWLIs; facilitating financial literacy education to LMI communities, including any support of efforts of MWLIs and CDEs to provide financial literacy education; opening or maintaining bank branches and other transactions facilities in LMI communities and designated disaster areas; providing low-cost education loans to low-income borrowers; and offering international remittance services in LMI communities.", "The examples listed above are not comprehensive, but they illustrate several activities banks may engage in to obtain consideration for CRA credits. The banking regulators will consider awarding CRA credits or points to a bank if its qualifying activities occur within an assigned assessment area. The points are then used to compute a bank's overall composite CRA rating. "], "subsections": []}, {"section_title": "The CRA Examination Tests", "paragraphs": ["Regulators apply up to three tests, which are known as the lending , investment , and service tests, respectively, to determine whether a bank is meeting local credit need in designated assessment areas. The lending test evaluates the number, amount, and distribution across income and geographic classifications of a bank's mortgage, small business, small farm, and consumer loans. The investment test grades a bank's community development investments in the assessment area. The service test examines a bank's retail service delivery, such as the availability of branches and low-cost checking in the assessment area. The point system for bank performance under the lending, investment, and service tests is illustrated in Table 1 . The lending test is generally regarded as the most important of the three tests, awarding banks the most points (CRA credits) in all rating categories. As shown in Table 1 , banks receive fewer credits for making CRA-qualified investments than for providing direct loans to individuals under the lending test. In some instances, an activity may qualify for more than one of the performance tests.", "Federal banking regulators evaluate financial institutions based upon their capacity, constraints, and business strategies; demographic and economic data; lending, investment, and service opportunities; and benchmark against competitors and peers. Because these factors vary across banks, the CRA examination was customized in 1995 to account for differences in bank sizes and business models. ", "In 2005, the bank size definitions were revised to include small , intermediate small , and large banks. The bank regulators also indexed the asset size thresholds\u2014which are adjusted annually\u2014to inflation using the Consumer Price Index. As of January 1, 2019, a small bank is defined as having less than $1.284 billion in assets as of December 31 of either of the prior two calendar years; an intermediate small bank has at least $321 million as of December 31 of both of the prior two calendar years but less than $1.284 billion as of December 31 of either of the prior two calendar years; and a large bank has $1.284 billion or more in assets.", "Small banks are typically evaluated under the lending test. Regulators review (1) loan-to-deposit ratios; (2) percentage of loans in an assessment area; (3) lending to borrowers of different incomes and in different amounts; (4) geographical distribution of loans; and (5) actions on complaints about performance. Intermediate small banks are subject to both the lending and investment tests. Large banks are subject to all three tests. "], "subsections": []}, {"section_title": "Community Investments Qualifying for CRA Consideration", "paragraphs": ["As mentioned previously, direct lending to borrowers, taking place in what is referred to as primary lending markets , qualify for CRA credit under the lending test. Investments taking place in secondary lending markets , in which investors purchase loans that have already been originated (such that little or no direct interaction occurs between investors and borrowers), qualify for CRA credit under the investment test. Secondary market investors may assume the default risk associated with a loan if the entire loan is purchased. Alternatively, if a set of loans are pooled together, then numerous secondary investors may purchase financial securities in which the returns are generated by the principal and interest repayments from the underlying loan pool, thereby sharing the lending risk. Direct ownership of loans or purchases of smaller portions (debt securities) of a pool of loans, therefore, are simply alternative methods to facilitate lending. As shown in Table 1 above, a bank may receive CRA consideration under the lending test for making a loan to LMI individuals that is guaranteed by a federal agency, such as the Federal Home Administration (FHA). If, however, a bank purchases securities backed by pools of FHA-guaranteed mortgage originations, this activity receives credit under the investment test. Thus, the bank receives less CRA credit when the financial risk is shared with other lenders than it would for making a direct loan (and holding all of the lending risk) even though it would still facilitate lending to LMI borrowers.", "In 2005, the activities that qualify for CRA credit were expanded to encourage banks to make public welfare investments. More specifically, qualifying activities include", "a public welfare investment (PWI) that promotes the public welfare by providing housing, services, or jobs that primarily benefit LMI individuals; and a community development investment (CDI), economic development investment , or project that meets the PWI requirements. Examples of CDI activities include promoting affordable housing, financing small businesses and farms, and conducting activities that revitalize LMI areas.", "Banks may engage in certain activities that typically would not be permitted under other banking laws as long as these activities promote the public welfare and do not expose institutions to unlimited liability. For example, banks generally are not allowed to make direct purchases of the preferred or common equity shares of other banking firms; however, banks may purchase equity shares of institutions with a primary mission of community development (discussed in more detail in the Appendix ) up to an allowable CDI limit. The Financial Services Regulatory Relief Act of 2006 ( P.L. 109-351 ) increased the amount that national banking associations and state banks (that are members of the Federal Reserve System) may invest in a single institution from 10% to 15% of a bank's unimpaired capital and unimpaired surplus.", "CDIs that benefit a bank's designated assessment area may qualify for CRA credit. For CRA purposes, the definition of a CDI was expanded in 2005 to include \"underserved and distressed\" rural areas and \"designated disaster areas\" to aid the regional rebuilding from severe hurricanes, flooding, earthquakes, tornados, and other disasters. The disaster area provision allows banks anywhere in America to receive consideration for CRA credit if they facilitate making credit available to a distressed location or geographic area outside of their own assessment areas. Thus, the 2005 revisions to the PWI and CDI definitions made more banking activities eligible for CRA credits.", "The banking regulators would consider awarding full CRA credits under the lending test to banks that make CDI loans directly in their assessment areas. Under the investment test, however, the banking regulators may choose to prorate the credits awarded to indirect investments. The Appendix provides examples of CDI activities that would qualify for CRA consideration under the investment test. Any awarded CRA credits could be prorated given that investing banks typically would have less control over when and where the funds are loaned."], "subsections": []}, {"section_title": "Results of the CRA Examination", "paragraphs": ["The CRA was revised in 1989 to require descriptive CRA composite performance ratings that must be disclosed to the public. The composite ratings illustrated in Table 2 are tabulated using the points assigned from the individual tests (shown in Table 1 above). Grades of Outstanding and Satisfactory are acceptable; Satisfactory ratings in both community development and retail lending are necessary for a composite Satisfactory . Large banks must receive a sufficient amount of points from the investment and service tests to receive a composite Outstanding rating.", "Regulators include CRA ratings as a factor when lenders request permission to engage in certain activities, such as moving offices or buying another institution. Denying requests, particularly applications for mergers and acquisitions, is a mechanism that may be applied against banking organizations with ratings below Satisfactory . In 2005, the banking regulators also ruled that any evidence of discrimination or credit practices that violate an applicable law, rule, or regulation by any affiliate would adversely affect an agency's evaluation of a bank's CRA performance. Applicants with poor ratings may resubmit their applications after making the necessary improvements. Covered institutions must post a CRA notice in their main offices and make publicly available a record of their composite CRA performance. "], "subsections": []}]}, {"section_title": "Difficulties Determining CRA Effectiveness", "paragraphs": ["Given that the CRA is not a federal assistance program and that several regulators implement it separately, no single federal agency is responsible for evaluating its overall effectiveness. In 2000, Congress directed the Federal Reserve to study the CRA's effectiveness. The Federal Reserve's study reported that lending to LMI families had increased since the CRA's enactment but found it was not possible to directly attribute all of that increase to the CRA. For example, advancements in underwriting over the past several decades have enabled lenders to better predict and price borrower default risk, thus making credit available to borrowers that might have been rejected prior to such technological advances. This section examines the difficulty linking bank lending outcomes directly to the CRA, considering questions raised about the subjectivity of the CRA examination itself, whether prudential regulators use CRA to encourage banks to engage in high-risk lending, and whether the increased lending to LMI borrowers since CRA's enactment can be attributed to other profit-incentives that exist apart from the CRA. "], "subsections": [{"section_title": "Is the CRA Examination Subjective?", "paragraphs": ["Questions have been raised as to whether the CRA examination itself is effective at measuring a bank's ability to meet local credit needs. For example, the CRA examinations have an element of subjectivity in terms of measuring both the quality and quantity of CRA compliance. In terms of quality, regulators determine the \"innovativeness or flexibility\" of qualified loan products; the \"innovativeness or complexity\" of qualified investments; or the \"innovativeness\" of ways banks service groups of customers previously not served. The number of points some CRA-qualifying investments receive relative to others is up to the regulator's judgment given that no formal definition of innovativeness has been established (although regulators provide a variety of examples as guidelines for banks to follow). In terms of quantity, there is no official quota indicating when banks have done enough CRA-qualified activities to receive a particular rating. Without specific definitions of the criteria or quotas, the CRA examination may be considered subjective.", "Almost all banks pass their CRA examinations. Figure 1 shows the average annual composite scores of banks that received CRA examinations as well as the annual number of bank examinations by size. In general, most banks receive a composite Satisfactory or better rating regardless of the number of banks examined in a year. For all years, approximately 97% or more of banks examined received ratings of Satisfactory or Outstanding . Whether the consistently high ratings reflect the CRA's influence on bank behavior or whether the CRA examination procedures need improvement is difficult to discern."], "subsections": []}, {"section_title": "Do Higher-Risk Loans Receive CRA Consideration?", "paragraphs": ["Another issue raised is whether the CRA has resulted in banks making more high-risk loans given that it encourages banks to lend to LMI individuals (perhaps under the presumption that LMI individuals are less creditworthy relative to higher-income individuals). Since passage of the CRA, however, innovations have allowed lenders to better evaluate the creditworthiness of borrowers (e.g., credit scoring, the adoption of automated underwriting), thus enhancing credit availability to both high credit quality and credit-impaired individuals. Credit-impaired borrowers can be charged higher interest rates and fees than those with better credit histories to compensate lenders for taking on greater amounts of credit or default risk. Nontraditional loan products (e.g., interest-only, initially low interest rate) allow borrowers to obtain lower regular payments during the early stages of the loan, perhaps under the expectation that their financial circumstances may improve in the later stages as the loan payments adjust to reflect the true costs. The ability to charge higher prices or offer such nontraditional loan products may result in greater higher-risk lending. Because these technological developments in the financial industry occurred after enactment of the CRA, banks' willingness to enter into higher-risk lending markets arguably cannot be attributed solely to the CRA.", "Regulators arguably are more reluctant to award banks CRA credit for originating higher-risk loans given the scrutiny necessary to determine whether higher loan prices reflect elevated default risk levels or discriminatory or predatory lending practices. Primary bank regulators are concerned with both prudential regulation and consumer protection. It is difficult for regulators to monitor how well borrowers understood the disclosures regarding loan costs and features, or whether any discriminatory or predatory behavior occurred at the time of loan origination. Regulators use fair lending examinations to determine whether loan pricing practices have been applied fairly and consistently across applicants or if some steering to higher-priced loan products occurred. Nevertheless, although it is not impossible for banks to receive CRA credits for making some higher-priced loans, regulators are mindful of practices such as improper consumer disclosure, steering, or discrimination that inflate loan prices. Prudential regulators are also unlikely to encourage lending practices that might result in large concentrations of high-risk loans on bank balance sheets. Hence, certain lending activities\u2014subprime mortgages and payday lending\u2014have been explicitly discouraged by bank regulators, as discussed in more detail below."], "subsections": [{"section_title": "Subprime Mortgages and the Qualified Mortgage Rule", "paragraphs": ["Although no consensus definition has emerged for subprime lending, this practice may generally be described as lending to borrowers with weak credit at higher costs relative to borrowers of higher credit quality. In September 2006, the banking regulatory agencies issued guidance on subprime lending that was restrictive in tone. The guidance warned banks of the risk posed by nontraditional mortgage loans, including interest-only and payment-option adjustable-rate mortgages. The agencies expressed concern about these loans because of the lack of principal amortization and the potential for negative amortization. Consequently, a study of 2006 Home Mortgage Disclosure Act data reported that banks subject to the CRA and their affiliates originated or purchased only 6% of the reported high-cost loans made to lower-income borrowers within their CRA assessment areas. Banks, therefore, received little or no CRA credit for subprime mortgage lending. Instead, federal regulators offered CRA consideration to banks that helped mitigate the effects of distressed subprime mortgages. On April 17, 2007, federal regulators provided examples of various arrangements that financial firms could provide to LMI borrowers to help them transition into affordable mortgages and avoid foreclosure. The various workout arrangements were eligible for favorable CRA consideration.", "Banks are unlikely to receive CRA consideration for originating subprime mortgages going forward. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act; P.L. 111-203 ) requires lenders to consider consumers' ability to repay before extending them mortgage credit, and one way for lenders to comply is to originate qualified mortgages (QMs) that satisfy various underwriting and product-feature requirements. For example, QMs may not have any negative amortization features, interest-only payments, or points and fees that exceed specified caps of the total loan amount; in most cases, borrowers' debt-to-income ratios shall not exceed 43%. QM originations will give lenders legal protections if the required income verification and other proper underwriting procedures were followed. Given the legal protections afforded to QMs, some banks might show greater reluctance toward making non-QM loans. With this in mind, the federal banking regulators announced that banks choosing to make only or predominately QM loans should not expect to see an adverse effect on their CRA evaluations; however, the regulators did not indicate that CRA consideration would be given for non-QMs. Arguably, the federal banking regulators appear less inclined to use the CRA to encourage lending that could be subject to greater legal risks."], "subsections": []}, {"section_title": "Small-Dollar (Payday) Lending", "paragraphs": ["Banks have demonstrated interest in providing financial services such as small dollar cash advances, which are similar to payday loans, in the form of subprime credit cards, overdraft protection services, and direct deposit advances. However, banks are discouraged from engaging in payday and similar forms of lending. Legislation, such as the Credit Card Accountability Responsibility and Disclosure Act of 2009 ( P.L. 111-24 ), placed restrictions on subprime credit card lending. In addition, federal banking regulators expressed concern when banks began offering deposit advance products due to the similarities to payday loans. Specifically, on April 25, 2013, the OCC, FDIC, and Federal Reserve expressed concerns that the high costs and repeated extensions of credit could add to borrower default risks and issued final supervisory guidance regarding the delivery of these products. Many banks subsequently discontinued offering deposit advances. ", "In general, these legislative and regulatory efforts explicitly discourage banks from offering high-cost consumer financial products and thus such products are unlikely to receive CRA consideration. When various financial products are deemed unsound by bank regulators and not offered by banks, a possible consequence may be that some customers migrate to nonbank institutions willing to provide these higher-cost products. Accordingly, the effectiveness of the CRA diminishes if more individuals choose to seek financial products from nonbank institutions."], "subsections": []}]}, {"section_title": "Do Profit and CRA Incentives Exist Simultaneously?", "paragraphs": ["In general, it can be difficult to determine the extent to which banks' financial decisions are motivated by CRA incentives, profit incentives, or both. Compliance with CRA does not require banks to make unprofitable, high-risk loans that would threaten the financial health of the bank.\u00a0Instead, CRA loans have profit potential; and bank regulators require all loans, including CRA loans, to be prudently underwritten. As evidenced below, it may be difficult to determine whether banks have made particular financial decisions in response to profit or CRA incentives in cases where those incentives exist simultaneously.", "For example, banks increased their holdings of municipal bonds in 2009. Although banks may receive CRA consideration under the investment test for purchasing state and local municipal bonds that fund public and community development projects in their designated assessment areas, banks may choose this investment for reasons unrelated to CRA. During recessions, for example, banks may reduce direct (or primary market) lending activities and increase their holdings of securities in the wake of declining demand for and supply of direct loan originations that occur during economic slowdowns and early recovery periods. In addition, a provision of the American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ) provided banks with a favorable tax incentive to invest in municipal bonds in the wake of the 2007-2009 recession. Hence, determining whether banks increased their municipal holdings because of a turn to securities markets for higher yields following a recession, a favorable tax incentive, or the CRA incentive is challenging. Similarly, banks increased their investments in Small Business Investment Corporations (SBICs, defined in the Appendix ) in 2010. Investments in SBICs allow banks to provide subordinate financing (rather than senior debt) to businesses. Senior lenders have first claims to the business's assets in case of failure; however, subordinate financiers provide funds in the form of mezzanine capital or equity, requiring a higher return because they are repaid after senior lenders. Banks generally are not allowed to act as subordinate financiers because they are not allowed to acquire ownership interests in private equity funds, unless such investments promote public welfare. Hence, attributing community development financing activities, such as SBIC investments, to CRA incentives may arguably be easier (relative to other financing activities) because the ability to engage in subordinate financing activities typically represents a CRA exemption from ordinary permissible banking activities. Following the 2007-2009 recession, however, U.S. interest rates dropped to historically low levels for an abnormally long period of time. Because low-yielding interest rate environments squeeze profits, banks were likely to search for higher-yielding and larger-sized lending opportunities, such as investments in SBICs. Hence, it remains difficult to determine whether a particular bank's decision to increase SBIC financing activities was driven by normal profit or CRA-related incentives. Between June 2016 and June 2017, more than 1700 U.S. bank branches were closed. Many branch closings occurred primarily in rural and low-income tract areas, raising concerns that banks would be able to circumvent their CRA obligation to lend and be evaluated in these areas. A traditional bank business model, however, relies primarily on having access to core deposits , a stable source of funds used to subsequently originate loans. Banks value geographic locations with greater potential to attract high core deposit volumes, which is also consistent with the CRA's requirement that assessment areas include at least one MSA or contiguous political subdivision (as previously discussed). Furthermore, using FDIC and U.S. Census Bureau data, the Federal Reserve noted that the number of branches per capita in 2017 was higher than two decades ago. Hence, determining whether branch closures reflect a bank's intentions to circumvent CRA compliance or to facilitate its ability to attract core deposits is challenging. "], "subsections": []}]}, {"section_title": "Recent Developments", "paragraphs": ["On April 3, 2018, the U.S. Department of Treasury (Treasury) released recommendations to modernize CRA in a memorandum to the federal banking regulators (OCC, FCIC, and the Fed). Treasury highlighted four of its recommendations, summarized below. ", "When the CRA was enacted in 1977, banks received deposits and made loans primarily through geographical branches. Assessment areas defined geographically arguably may not fully reflect the community served by a bank because of technology developments, such as the internet and mobile phone banking, prompting Treasury to call for revisiting the approach for determining banks' assessment areas. In 2016, the banking regulators issued Interagency Questions and Answers (Q&As) to provide banks guidance pertaining to CRA-eligible activities; however, Treasury noted that each regulator provides its examiners with additional guidance. Also, the Interagency Q&As illustrate past CRA-qualifying activities, but Treasury noted that no formal process currently exists to help determine whether potential (complex, innovative, or innovative) activities would qualify for CRA credit. Treasury recommends establishing clearer standards for CRA-qualifying activities and flexibility (expanding the types of loans, investments, and services that qualify for CRA credit), which may encourage banks to venture beyond activities that typically receive CRA credit. Treasury reports that each bank regulator follows a different examination schedule; the examinations are lengthy; and delays associated with the release of performance evaluations may limit the time banks can react to recommendations before their next CRA examination. Treasury recommends increasing the timeliness of the CRA examination process. Treasury recommends incorporating performance incentives that might result in more efficient lending activities. For example, CRA-qualifying loans may receive credit in the year of origination, but equity investments may receive credit each year that the investment is held. Treasury recommends consistent treatment of loans and investments, which may encourage banks to make more long-term loans (rather than sequences of short-term loans for the sake of being awarded CRA credits at each CRA examination).", "On August, 28, 2018, the OCC released an Advance Notice of Proposed Rulemaking (ANPR) to seek comments on ways to modernize the CRA framework. The ANPR solicited comments on the issues raised by Treasury among other things. The OCC's ANPR does not propose specific changes, but its content and the questions posed suggest that the OCC is exploring the possibility of adopting a quantitative metric-based approach to CRA performance evaluation, changing how assessment areas are defined, expanding CRA-qualifying activities, and reducing the complexity, ambiguity, and burden of the regulations on the bank industry. When the comment period closed on November 19, 2018, the OCC had received 1584 comments. The Federal Reserve and the FDIC did not join the OCC in releasing the ANPR. ", "The Federal Reserve System, however, did host research symposiums around the country to gather comments pertaining to CRA reform. As reported by the Federal Reserve, some banking industry comments suggested, among other things, the need for consistency of the CRA examinations to facilitate CRA compliance. Yet some tailoring may still be necessary with respect to determining assessment areas that better reflect each bank's business models, particularly for models that use technology to deliver products and services. The regulators also heard from community and consumer groups. While expressing the need to retain focus on the historical context of the CRA, these groups highlighted the need to address issues pertaining to banking deserts in underserved communities."], "subsections": [{"section_title": "Appendix. CRA Investment Options", "paragraphs": ["Community development investments (CDIs) that meet public welfare investment (PWI) requirements are those that promote the public welfare, primarily resulting in economic benefits for low- and moderate-income (LMI) individuals. This appendix provides examples of CDI activities that would qualify for consideration under the CRA investment test. In many cases, covered banks are more likely to take advantage of these optional vehicles to obtain CRA credits if they perceive the underlying investment opportunities to have profit potential.", "Loan Participations", "Banks and credit unions often use participation (syndicated) loans to jointly provide credit. When a financial firm (e.g., bank, credit union) originates a loan for a customer, it may decide to structure loan participation arrangements with other institutions. The loan originator often retains a larger portion of the loan and sells smaller portions to other financial institutions willing to participate. Suppose a financial firm originates a business or mortgage loan in a LMI neighborhood. A bank may receive CRA investment credit consideration by purchasing a participation, thus becoming a joint lender to the LMI borrower. An advantage of loan participations is that the default risk is divided and shared among the participating banks (as opposed to one financial firm retaining all of the risk). CRA consideration is possible if the activity occurs within the designated assessment area. For all participating banks to receive credit, some overlap in their designated assessment areas must exist. An exception is made for participations made to benefit designated disaster areas, in which all participating banks would receive CRA consideration regardless of location.", "State and Local Government Bonds", "State and local governments issue municipal bonds, and the proceeds are used to fund public projects, community development activities, and other qualifying activities. The interest that nonbank municipal bondholders receive is exempt from federal income taxes to encourage investment in hospitals, schools, infrastructure, and community development projects that require state and local funding. Legislative actions during the 1980s eliminated the tax-exempt status of interest earned from holdings of municipal bonds for banks. Although banks no longer have a tax incentive to purchase municipal bonds, they still consider the profitability of holding these loans, as they do with all lending opportunities. Furthermore, banks receive CRA investment consideration when purchasing state and local municipal bonds that fund public and community development projects in their designated assessment areas.", "CRA-Targeted Secondary Market Instruments", "Secondary market financial products have been developed to facilitate the ability of banks to participate in lending activities eligible for CRA consideration, such as purchasing mortgage-backed securities (MBSs) or shares of real estate investment trusts (REITs). A MBS is a pool of mortgage loans secured by residential properties; a multifamily MBS is a pool of mortgage loans secured by multifamily properties, consisting of structures designed for five or more residential units, such as apartment buildings, hospitals, nursing homes, and manufactured homes. CRA-MBSs are MBSs consisting of loans that originated in specific geographic assessment areas, thereby allowing bank purchases into these pools to be eligible for CRA consideration under the investment test. Similarly, REITs may also pool mortgages, mortgage MBSs, and real estate investments (e.g., real property, apartments, office buildings, shopping malls, hotels). Investors purchase shares in REIT pools and defer the taxes. Banks may only invest in mortgage REITs and MBS REITs. Similar to the CRA-MBSs, the REITs must consist of mortgages and MBSs that would be eligible for CRA consideration. The Community Development Trust REIT is an example of a REIT that serves as a CRA-qualified investment for banks.", "Community Development Financial Institutions and Equity Equivalent Investments", "The Community Development Financial Institutions (CDFI) Fund was created by the Riegle Community Development Regulatory Improvement Act of 1994 (the Riegle Act; P.L. 103-325 ). The CDFI Fund was established to promote economic development for distressed urban and rural communities. The CDFI Fund, currently located within the U.S. Department of the Treasury, is authorized to certify banks, credit unions, nonprofit loan funds, and (for-profit and nonprofit) venture capital funds as designated CDFIs. In other words, a bank may satisfy the requirements to become a CDFI, but not all CDFIs are banks. The primary focus of institutions with CDFI certification is to serve the financial needs of economically distressed people and places. The designation also makes these institutions eligible to receive financial awards and other assistance from the CDFI Fund.", "In contrast to non-CDFI banks, some CDFI banks have greater difficulty borrowing funds and then transforming them into loans for riskier, economically distressed consumers. The lack of loan level data for most CDFI banks causes creditors to hesitate in making low-cost, short-term loans to these institutions. Specifically, the lack of information on loan defaults and prepayment rates on CDFI banking assets is likely to result in limited ability to sell these loan originations to secondary loan markets. Consequently, the retention of higher-risk loans, combined with limited access to low-cost, short-term funding, makes CDFI banks more vulnerable to liquidity shortages. Hence, CDFIs rely primarily on funding their loans (assets) with net assets , which are proceeds analogous to the equity of a traditional bank or net worth of a credit union. CDFI net assets are often acquired in the form of awards or grants from the CDFI Fund or for-profit banks. Funding assets with net assets is less expensive for CDFIs than funding with longer-term borrowings.", "Banks may obtain CRA investment credit consideration by making investments to CDFIs, which provides CDFIs with net assets (equity). Under PWI authority, banks are allowed to make equity investments in specialized financial institutions, such as CDFIs, as long as they are considered by their safety and soundness regulator to be at least adequately capitalized . Furthermore, the final Basel III notification of proposed regulation (NPR) allows for preferential capital treatment for equity investments made under PWI authority, meaning equity investments to designated CDFIs may receive more favorable capital treatment. Consequently, banks often provide funds to CDFIs through equity equivalent investments (EQ2s), which are debt instruments issued by CDFIs with a continuous rolling (indeterminate) maturity. EQ2s, from a bank's perspective, are analogous to holding convertible preferred stock with a regularly scheduled repayment. Hence, banks may view EQ2s as a potentially profitable opportunity to invest in other specialized financial institutions and receive CRA consideration, particularly when the funds are subsequently used by CDFIs to originate loans in the banks' assessment areas.", "Small Business Investment Companies", "The Small Business Administration (SBA) was established in 1953 by the Small Business Act of 1953 (P.L. 83-163) to support small businesses' access to capital in a variety of ways. Although issuing loan guarantees for small businesses is a significant component of its operations, the SBA also has the authority to facilitate the equity financing of small business ventures through its Small Business Investment Company (SBIC) program, which was established by the Small Business Investment Act of 1958 (P.L. 85-699). SBICs that are licensed and regulated by the SBA may provide debt and equity financing and, although not a program requirement, educational (management consulting) resources for businesses that meet certain SBA size requirements.", "Banks may act as limited partners if they choose to provide funds to SBICs, which act as general partners. Banks may establish their own SBICs, jointly establish SBICs (with other banks), or provide funds to existing SBICs. SBICs subsequently use bank funding to invest in the long-term debt and equity securities of small, independent (SBA-eligible) businesses, and banks may receive CRA investment consideration if the activities benefit their assessment areas. Community banks invest in SBICs because of the profit potential as well as the opportunity to establish long-term relationships with business clients during their infancy stages. Banks that are considered by their regulators to be adequately capitalized are allowed to invest in these specialized financial institutions under PWI authority, but the investments still receive risk-based capital treatment. SBIC assets, similar to CDFIs, are illiquid given the difficulty to obtain credit ratings for SBIC investments; thus, they cannot be sold in secondary markets. Because banks risk losing the principal of their equity investments, they are required to perform the proper due diligence associated with prudent underwriting.", "Tax Credits", "The low-income housing tax credit (LIHTC) program was created by the Tax Reform Act of 1986 ( P.L. 99-514 ) to encourage the development and rehabilitation of affordable rental housing. Generally speaking, government (federal or state) issued tax credits may be bought and, in many cases, sold like any other financial asset (e.g., stocks and bonds). Owners of tax credits may reduce their tax liabilities either by the amount of the credits or by using the formulas specified on those credits, assuming the owners have participated in the specified activities that the government wants to encourage. For LIHTCs, banks may use a formula to reduce their federal tax liabilities when they provide either credit or equity contributions (grants) for the construction and rehabilitation of affordable housing. If a bank also owns a LIHTC, then a percentage of the equity grant may be tax deductible if the CDFI uses the funds from the grant to finance affordable rental housing. Furthermore, banks may receive consideration for CRA-qualified investment credits.", "After a domestic corporation or partnership receives designation as a Community Development Entity (CDE) from the CFDI Fund, it may apply for New Markets Tax Credits (NMTCs). Encouraging capital investments in LMI communities is the primary mission of CDEs, and CDFIs and SBICs automatically qualify as CDEs. Only CDEs are eligible to compete for NMTCs, which are allocated by the CDFI Fund via a competitive process. Once awarded an allocation of NMTCs, the CDE must obtain equity investments in exchange for the credits. Then, the equity proceeds raised must either be used to provide loans or technical assistance or deployed in eligible community investment activities. Only for-profit CDEs, however, may provide NMTCs to their investors in exchange for equity investments. Investors making for-profit CDE equity investments can use the NMTCs to reduce their tax liabilities by a certain amount over a period of years. As previously discussed, a bank may receive CRA credit for making equity investments in nonprofit CDEs and for-profit subsidiaries, particularly if the investment occurs within the bank's assessment area. Furthermore, banks may be able to reduce their tax liabilities if they can obtain NMTCs from the CDEs in which their investments were made."], "subsections": []}]}]}}
{"id": "R43240", "title": "The Army\u2019s Armored Multi-Purpose Vehicle (AMPV): Background and Issues for Congress", "released_date": "2019-03-14T00:00:00", "summary": ["The Armored Multi-Purpose Vehicle (AMPV) is the Army's proposed replacement for the Vietnam-era M-113 personnel carriers, which are still in service in a variety of support capacities in Armored Brigade Combat Teams (ABCTs). While M-113s no longer serve as infantry fighting vehicles, five variants of the M-113 are used as command and control vehicles, general purpose vehicles, mortar carriers, and medical treatment and evacuation vehicles.", "The AMPV is intended to be a nondevelopmental program (candidate vehicles will be either existing vehicles or modified existing vehicles\u2014not vehicles that are specially designed and not currently in service). Some suggest a nondevelopmental vehicle might make it easier for the Army to eventually field this system to the force, as most of the Army's past developmental programs, such as the Ground Combat Vehicle (GCV), the Future Combat System (FCS), the Crusader self-propelled artillery system, and the Comanche helicopter, were cancelled before they could be fully developed and fielded.", "On November 26, 2013, the Army issued a Request for Proposal (RFP) for the AMPV. This RFP stipulated the Army planned to award a five-year Engineering and Manufacturing Development (EMD) contract in May 2014 worth $458 million to a single contractor for 29 prototypes. While the March 2013 RFP established an Average Unit Manufacturing Cost Ceiling for each AMPV at $1.8 million, this was rescinded to permit vendors greater flexibility. The EMD phase was scheduled to run between FY2015 and FY2019, followed by three years of low-rate initial production (LRIP) starting in 2020. As of 2018, the Army planned to procure 2,936 AMPVs to replace M-113s in ABCTs. The Army also has plans to replace 1,922 M-113s at Echelons Above Brigade (EAB), and the Department of Defense (DOD) estimates that if the M-113s are replaced by AMPVs at EAB, total program costs could be increased by an additional $6.5 billion. While the Army would like a pure fleet of AMPVs, budgetary constraints could preclude this.", "On December 23, 2014, the Army announced it had selected BAE Systems Land and Armaments L.P. as the winner of the EMD contract. The initial award was for 52 months, valued at about $382 million. In addition, the award provided for an optional low-rate initial production (LRIP) phase. The EMD contract did not include EAB AMPV variants. The AMPV reportedly successfully completed its Critical Design Review (CDR) on June 23, 2016. On December 15, 2016, BAE delivered the first general purpose AMPV to the Army for testing. In September 2017, the Army began AMPV reliability, availability, and maintainability (RAM) testing. Also in 2017, based on budgetary constraints, the Army decided it would upgrade a number of EAB M-113s instead of replacing them with AMPVs. In May 2018, the Army decided to put the EAB M-113 upgrade effort on hold. On March 13, 2019, Army leadership reportedly announced the Army had decided to cut funding over the next five years for 93 programs\u2014including the AMPV\u2014to increase available funding for its new modernization strategy. This cut is not expected to affect the overall AMPV requirement but could slow the AMPV production rate.", "Other program issues include DOD Inspector General (IG) concerns regarding performance and design concerns, as well as inaccurate procurement quantities, which could result in inaccurate program costs. The Government Accountability Office (GAO) in 2018 expressed concerns regarding cost growth, difficulties meeting a variety of developmental requirements, and dependencies on other programs that are experiencing developmental challenges.", "Potential issues for Congress include a \"way ahead\" for upgraded M-113s at EAB, DOD Inspector General (IG) and GAO concerns, and the potential revised AMPV procurement rate."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["In 1956, the Army began the development of a family of air-transportable, armored multi-purpose vehicles intended to provide a lightweight, amphibious armored personnel carrier for armor and mechanized infantry units. Known as the M-113, it entered production in 1960 and saw extensive wartime service in Vietnam. Considered a reliable and versatile vehicle, a number of different variations of the M-113 were produced to fulfill such roles as a command and control vehicle, mortar carrier, and armored ambulance, to name but a few. The Army began replacing the M-113 infantry carrier version in the early 1980s with the M-2 Bradley Infantry Fighting Vehicle, but many non-infantry carrier versions of the M-113 were retained in service. "], "subsections": []}, {"section_title": "The Armored Multi-Purpose Vehicle (AMPV)2", "paragraphs": ["According to the Army", "The Armored Multi-Purpose Vehicle (AMPV) is the proposed United States Army program for replacement of the M-113 Family of Vehicles (FOV) to mitigate current and future capability gaps in force protection, mobility, reliability, and interoperability by mission role variant within the Heavy Brigade Combat Team (HBCT) [now known as the Armored Brigade Combat Team \u2013 ABCT]. The AMPV will have multiple variants tailored to specific mission roles within HBCT. Mission roles are as follows: General Purpose, Medical Evacuation, Medical Treatment, Mortar Carrier, and Mission Command. AMPV is a vehicle integration program."], "subsections": []}, {"section_title": "The Army's AMPV Requirements3", "paragraphs": ["Regarding the decision to replace remaining M-113s, the Army notes the following:", "The M-113 lacks the force protection and mobility needed to operate as part of combined arms teams within complex operational environments. For example, \"commanders will not allow them to leave Forward Operating Bases (FOBs) or enter contested areas without extensive mission protection and route clearance.\" The use of other vehicles for M-113 mission sets (casualty evacuations, for example) reduces unit combat effectiveness.", "The majority of the Army's M-113s are found in Armored Brigade Combat Teams (ABCTs), where they comprise 32% of the tracked armored vehicles organic to that organization. The 114 M-113 variants in the ABCT are distributed as follows:"], "subsections": []}, {"section_title": "AMPVs at Echelons Above Brigade (EAB)5", "paragraphs": ["In addition to the AMPV requirement in the ABCTs, the Army also planned to procure an additional 1,922 AMPVs to replace M-113s in Echelons Above Brigade (EAB). The Army notes that these AMPVs might have different requirements than the ABCT AMPVs. DOD estimates if the M-113s are replaced by AMPVs at EAB, total program costs could be increased by an additional $6.5 billion. "], "subsections": []}, {"section_title": "Program Overview8", "paragraphs": ["According to the Government Accountability Office (GAO), in March 2012, the Under Secretary of Defense for Acquisition, Technology, and Logistics (USD, AT&L) approved a materiel development decision for AMPV and authorized the Army's entry into the materiel solution analysis phase. The Army completed the AMPV analysis of alternatives (AoA) in July 2012 and proposed a nondevelopmental vehicle (the candidate vehicle will be either an existing vehicle or a modified existing vehicle\u2014not a vehicle that is specially designed and not in current service). Because the AMPV is to be a nondevelopmental vehicle, DOD decided the program would start at Milestone B, Engineering and Manufacturing Development (EMD) Phase and skip the Milestone A, Technology Development Phase. ", "The Army planned for a full and open competition and aimed to award one industry bidder a 42-month EMD contract to develop all five AMPV variants. A draft Request for Proposal (RFP) released in March 2013 stated the EMD contract would be worth $1.46 billion, including $388 million for 29 EMD prototypes for testing between 2014 and 2017 and $1.08 billion for 289 low-rate initial production (LRIP) models between 2018 and 2020. The Army had planned on releasing the formal RFP in June 2013 but instead slipped the date until mid-September 2013, citing a delayed Defense Acquisition Board review attributed in part to Department of Defense civilian furloughs. The EMD contract award was originally planned for late 2014. The Army planned for an average unit manufacturing cost (AUMC) of $1.8 million per vehicle. "], "subsections": [{"section_title": "Department of Defense (DOD) Approves AMPV Program10", "paragraphs": ["On November 26, 2013, DOD issued an Acquisition Decision Memorandum (ADM) officially approving the Army's entry into the Milestone B, Engineering and Manufacturing Development (EMD) Phase. The ADM directed the Army to impose an Average Procurement Unit Cost less than or equal to $3.2 million at a production rate of not less than 180 vehicles per year. In addition, operations and sustainment costs were to be less than or equal to $400,000 per vehicle per year. The Army was also directed to down select to a single prime contractor at the completion of Milestone B. "], "subsections": []}, {"section_title": "Army Issues AMPV Draft Request for Proposal (RFP)11", "paragraphs": ["Also on November 26, 2013, the Army issued a new draft Request for Proposal (RFP) for the AMPV. This RFP stipulated the Army planned to award a five-year EMD contract in May 2014 worth $458 million to a single contractor for 29 prototypes. While the March 2013 RFP established an Average Unit Manufacturing Cost Ceiling for each AMPV at $1.8 million, this was rescinded to permit vendors greater flexibility. The EMD phase was scheduled to run between FY2015 and FY2019, followed by three years of low-rate initial production (LRIP) starting in 2020."], "subsections": []}]}, {"section_title": "Selected Program Activities", "paragraphs": [], "subsections": [{"section_title": "Army Awards ABCT AMPV Contract to BAE12", "paragraphs": ["On December 23, 2014, the Army announced it had selected BAE Systems Land and Armaments L.P. as the winner of the EMD contract. The initial award was for 52 months valued at about $382 million. During this period of performance, BAE was to produce 29 vehicles, which would be put through \"rigorous developmental and operational testing.\" In addition, the award provided for an optional low-rate initial production (LRIP) phase award in the future. If this phase is awarded, BAE would produce an additional 289 vehicles for a total contract value of $1.2 billion. The Army, in its announcement, emphasized the BAE EMD contract did not pertain to the 1,922 EAB AMPVs."], "subsections": []}, {"section_title": "AMPV Completes Critical Design Review", "paragraphs": ["According to reports, the AMPV successfully completed its Critical Design Review (CDR) on June 23, 2016. Successful completion of a CDR demonstrates the AMPV's design is stable, can be expected to meet established performance standards, and the program can be accomplished within its established budget."], "subsections": []}, {"section_title": "Roll Out of First AMPV for Testing15", "paragraphs": ["On December 15, 2016, BAE delivered the first general purpose AMPV to the Army for testing. The Army plans for six months of contractor tests, followed by one year of government testing and then Limited User Testing. In April 2018, BAE reportedly delivered all 29 AMPVs to the Army for testing."], "subsections": []}, {"section_title": "AMPV Begins Developmental Testing17", "paragraphs": ["In September 2017, the Army reportedly started reliability, availability, and maintainability (RAM) testing for the AMPV. DOD defines RAM as follows:", "Reliability is the probability of an item to perform a required function under stated conditions for a specified period of time. Reliability is further divided into mission reliability and logistics reliability. Availability is a measure of the degree to which an item is in an operable state and can be committed at the start of a mission when the mission is called for at an unknown (random) point in time. Availability as measured by the user is a function of how often failures occur and corrective maintenance is required, how often preventive maintenance is performed, how quickly indicated failures can be isolated and repaired, how quickly preventive maintenance tasks can be performed, and how long logistics support delays contribute to down time. Maintainability is the ability of an item to be retained in, or restored to, a specified condition when maintenance is performed by personnel having specified skill levels, using prescribed procedures and resources, at each prescribed level of maintenance and repair. "], "subsections": []}, {"section_title": "Army EAB Upgraded M-113 Effort Put on Hold", "paragraphs": ["Due to budgetary constraints, the Army reportedly planned to provide upgraded EAB M-113s to a small number of units outside the continental United States and in South Korea and Europe. In August 2017, Army officials reportedly noted \"that the amount of time and resources it would take to achieve a pure fleet solution for both ABCTs and EAB units would likely push fielding into FY 2040 and beyond, which is not a suitable course of action.\" Officials also suggested that upgrading M-113s for EAB use was \"an interim solution until we can get to the optimal solution.\"", "The Army had planned to issue a request for proposal (RFP) for upgraded M-113s in the summer of 2018. A number of vendors, including General Dynamics Land Systems (GDLS), BAE Systems, and Science Applications International Corporation (SAIC), reportedly planned to respond to the RFP.", "Reportedly, on May 21, 2018, the Army indefinitely postponed its plans to upgrade EAB M-113s and also put on hold plans to issue an RFP for upgraded M-113s."], "subsections": []}, {"section_title": "AMPV Becomes Part of the Army's Next Generation Combat Vehicle (NGCV) Program23", "paragraphs": ["In October 2018, Army leadership reportedly made the AMPV part of the Army's NGCV program, which is to be overseen by the Army's Futures Command (AFC). Previously, AMPV was overseen by the Program Executive Officer (PEO) for Ground Combat Systems (GCS), but program authority is now shared with the AFC's NGCV Cross Functional Team (CFT). Reportedly, the PEO GCS will retain acquisition legal authorities, but the CFT is to have input on requirements and acquisition schedule. The CFT is also to help prioritize corrective actions needed to address deficiencies identified during testing, as well as identify the resources that will be required."], "subsections": []}, {"section_title": "AMPV Moves Into Production and Deployment Phase of Acquisition and Selects a Vendor25", "paragraphs": ["In December 2018, the AMPV program received approval to move into the Production and Deployment phase of acquisition. BAE Systems is to start the production of the first batch of 551 of a total of 2,907 AMPVs, with initial vehicle delivery early in 2020. The Army is expected to field 258 vehicles as part of the European Deterrence Initiative (EDI) in FY2020 and two brigade sets' worth of AMPVs by the end of calendar year 2020."], "subsections": []}, {"section_title": "Echelon Above Brigade M-133 Replacement Cancelled26", "paragraphs": ["In January 2019, it was reported that the Army had decided to cancel M-113 replacement at echelons above brigade (EAB) and reprogram funding for higher priorities. At this point, it is not readily apparent how the Army plans to address its previous 1,922 EAB AMPV requirement."], "subsections": []}, {"section_title": "Potential Revised AMPV Procurement Rate27", "paragraphs": ["On March 13, 2019, Army leadership reportedly announced the Army had decided to cut funding over the next five years for 93 programs\u2014including the AMPV\u2014to increase available funding for its new modernization strategy. While the Army has yet to release its final five-year reduction plan, program officials reportedly stated that the AMPV's overall top-line requirement would likely remain unchanged, but the Army would likely slow the per-year procurement rate. "], "subsections": []}]}, {"section_title": "Other Program Issues", "paragraphs": [], "subsections": [{"section_title": "DOD Inspector General (IG) Concerns29", "paragraphs": ["An April 28, 2017, DOD IG report noted the Army has effectively managed the AMPV program, in particular keeping it within cost requirements and scheduled timeframes, but also expressed the following concerns:", "The program might not meet entry requirements for initial production and testing (Milestone C) because the Army has not fully resolved vehicle performance and design demonstration concerns. As a result of the aforementioned performance and design concerns, the AMPV could experience increased costs and schedule delays as a result of addressing the IG's concerns. Because the U.S. Army Deputy Chief of Staff, Programming (G-8) had not revised the procurement quantities to reflect changes to the Army's equipment and force structure requirements, the program's estimated total cost and Average Procurement Unit Cost is not accurate. "], "subsections": []}, {"section_title": "Government Accountability Office (GAO) 2018 Weapon Systems Annual Assessment Concerns", "paragraphs": ["An April 2018 GAO Weapon Systems Annual Assessment expressed the following concerns:", "The program has experienced development contract cost growth of over 20 percent above target cost due to continued challenges meeting logistics, performance, and production requirements. However, program officials noted that the government's official cost position for AMPV development\u2014based on the independent cost estimate prepared by the Office of Cost Assessment and Program Evaluation\u2014has not changed as it includes adequate margin to account for the cost growth to date.", "AMPV remains dependent on other programs\u2014such as the Army's Handheld, Manpack, and Small Form Fit Radios\u2014for its key communication and networking capabilities. However, these programs have experienced their own acquisition challenges delaying their availability for the AMPV program. The program is including a legacy radio platform in its production vehicle design configuration, which will, according to program officials, readily accommodate future networking capabilities provided by these other programs.", "Given the aforementioned 2017 DOD IG concerns and GAO's 2018 concerns regarding cost growth, difficulties meeting a variety of developmental requirements, and dependencies on other programs that are experiencing developmental challenges, the AMPV program will likely receive significant scrutiny and oversight to insure it remains a cost effective and viable program."], "subsections": []}, {"section_title": "Director, Operational Test and Evaluation (DOT&E) FY2018 Annual Report32", "paragraphs": ["DOT&E's FY2018 Annual Report noted the following:", "Preliminary observations of the Limited Users Test indicate the AMPV meets or exceeds its goal of replacing the M113 family of vehicles (FoV) with a more capable platform.", "The AMPV demonstrated superior power and mobility over the M113 FoV. The AMPV was able to maintain its position in the formation. The AMPV operational mission availability and reliability were far superior to the M113 FoV. The platform provides potential for growth for power demand. Having common parts among all the variants should improve overall availability. The Mission Command variant facilitates digital mission command. The Medical Treatment and Medical Evacuation variants provide improved patient care and treatment capability with a new capability of conducting treatment on the move.", "The following de\ufb01ciencies, if uncorrected, could adversely a\ufb00ect AMPV performance:", "The driver's and vehicle commander's displays would frequently lock up, and the reboots each took 10 minutes. Due to the physical size and location, the commander's weapons station degraded situational awareness of the vehicle commander. The Joint Battle Command Platform and radios in the Mission Command vehicle cannot be removed from their docking stations within the vehicle. This limits the ability of the command group to share a common operational picture when operating as a Tactical Operations Center. The capability to support analog operations is degraded without the stowage for mapboards and plotting boards. The Medical Evacuation vehicle seat stowage and litter lift are di\ufb03cult to use. (The program manager has identi\ufb01ed a design change to correct this de\ufb01ciency.) The Mortar Carrier's ammunition storage is not optimized to support the mortar system. There is water leakage from the hatch and the roof leaks, a\ufb00ecting the electronics in all variants and patient care in the medical variants. The preliminary survivability assessment identified minor vehicle design vulnerabilities that the Program Office is addressing with the vendor in order to meet survivability and force protections requirements."], "subsections": []}]}, {"section_title": "Department of Defense FY2020 AMPV Budget Request33", "paragraphs": ["The FY2020 budget request includes Research Development, Testing and Evaluation (RDT&E) and Procurement funding requests for the AMPV in both the Base and Overseas Contingency Operations (OCO) budgets, as well as FY2020 requested quantities.", "The Army notes that FY2020 OCO funding will procure 66 AMPVs to support U.S. European Command's (USEUCOM's) requirement for unit equipment sets to deter potential adversaries and support the European Deterrence Initiative (EDI)."], "subsections": []}, {"section_title": "Potential Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "The Way Ahead: Upgraded M-113s at Echelons Above Brigade (EAB)", "paragraphs": ["As previously noted, the Army's optimal solution would be to replace EAB M-113s with AMPVs, but the Army felt that given current and projected budgetary constraints, only selected EAB units outside the continental United States and in South Korea and Europe would receive AMPVs while the remainder would receive upgraded M-113s as an interim solution. Reportedly, on May 21, 2018, the Army indefinitely postponed its plans to upgrade EAB M-113s and also put on hold plans to issue an RFP for upgraded M-113s. Reportedly in January 2019, the Army decided to cancel M-113 at EAB replacement efforts. Given the frequently changing nature of the Army's plans for addressing the replacement of legacy M-113s at EAB and the decision to cancel M-113 EAB replacement, it is not unreasonable to question if the Army has a clearly defined \"way ahead\" for addressing M-113s at EAB. Will the Army simply \"leave\" M-113s at EAB and continue to maintain them, will they replaced by another vehicle, or is the Army still trying to decide on a course of action and a program strategy?"], "subsections": []}, {"section_title": "DOD Inspector General (IG), Government Accountability Office (GAO), and Director, Operational Test and Evaluation (DOT&E) Concerns", "paragraphs": ["DOD's April 2017 IG report, while acknowledging effective management of the AMPV program, also raised fundamental concerns about performance and design, as well as inaccurate procurement quantities, which could adversely impact program costs. GAO's 2018 concerns regarding cost growth, difficulties meeting a variety of developmental requirements, and dependencies on other programs that are experiencing developmental challenges suggest that programmatic issues continue. DOT&E's 2018 findings noted a number of performance concerns as well. Given these concerns, a more in-depth examination of identified AMPV program deficiencies might prove beneficial for DOD and policymakers alike."], "subsections": []}, {"section_title": "Potential Revised AMPV Procurement Rate", "paragraphs": ["As previously noted, on March 13, 2019, Army leadership reportedly announced the Army had decided to cut funding over the next five years for 93 programs\u2014including the AMPV\u2014to increase available funding for its new modernization strategy. While the Army is not expected to change its overall AMPV top-line requirement, it could slow the per- year procurement rate. Once the Army has finalized its revised modernization plan, including program cuts, it could be beneficial to provide policymakers with a revised overall AMPV procurement plan, as well as a new fielding plan for units\u2014both Active and Reserves\u2014designated to receive AMPVs. "], "subsections": []}]}]}}
{"id": "98-505", "title": "National Emergency Powers", "released_date": "2019-02-27T00:00:00", "summary": ["The President of the United States has available certain powers that may be exercised in the event that the nation is threatened by crisis, exigency, or emergency circumstances (other than natural disasters, war, or near-war situations). Such powers may be stated explicitly or implied by the Constitution, assumed by the Chief Executive to be permissible constitutionally, or inferred from or specified by statute. Through legislation, Congress has made a great many delegations of authority in this regard over the past 230 years.", "There are, however, limits and restraints upon the President in his exercise of emergency powers. With the exception of the habeas corpus clause, the Constitution makes no allowance for the suspension of any of its provisions during a national emergency. Disputes over the constitutionality or legality of the exercise of emergency powers are judicially reviewable. Both the judiciary and Congress, as co-equal branches, can restrain the executive regarding emergency powers. So can public opinion. Since 1976, the President has been subject to certain procedural formalities in utilizing some statutorily delegated emergency authority.", "The National Emergencies Act (50 U.S.C. \u00a7\u00a71601-1651) eliminated or modified some statutory grants of emergency authority, required the President to formally declare the existence of a national emergency and to specify what statutory authority activated by the declaration would be used, and provided Congress a means to countermand the President's declaration and the activated authority being sought. The development of this regulatory statute and subsequent declarations of national emergency are reviewed in this report."], "reports": {"section_title": "", "paragraphs": ["F ederal law provides a variety of powers for the President to use in response to crisis, exigency, or emergency circumstances threatening the nation. They are not limited to military or war situations. Some of these authorities, deriving from the Constitution or statutory law, are continuously available to the President with little or no qualification. Others\u2014statutory delegations from Congress\u2014exist on a standby basis and remain dormant until the President formally declares a national emergency. Congress may modify, rescind, or render dormant such delegated emergency authority.", "Until the crisis of World War I, Presidents utilized emergency powers at their own discretion. Proclamations announced the exercise of exigency authority. During World War I and thereafter, Chief Executives had available to them a growing body of standby emergency authority that became operative upon the issuance of a proclamation declaring a condition of national emergency. Sometimes such proclamations confined the matter of crisis to a specific policy sphere, and sometimes they placed no limitation whatsoever on the pronouncement. These activations of standby emergency authority remained acceptable practice until the era of the Vietnam War. In 1976, Congress curtailed this practice with the passage of the National Emergencies Act."], "subsections": [{"section_title": "Background and History", "paragraphs": ["The exercise of emergency powers had long been a concern of the classical political theorists, including the 18 th -century English philosopher John Locke, who had a strong influence upon the Founding Fathers in the United States. A preeminent exponent of a government of laws and not of men, Locke argued that occasions may arise when the executive must exert a broad discretion in meeting special exigencies or \"emergencies\" for which the legislative power provided no relief or existing law granted no necessary remedy. He did not regard this prerogative as limited to wartime or even to situations of great urgency. It was sufficient if the \"public good\" might be advanced by its exercise.", "Emergency powers were first expressed prior to the actual founding of the Republic. Between 1775 and 1781, the Continental Congress passed a series of acts and resolves that count as the first expressions of emergency authority. These instruments dealt almost exclusively with the prosecution of the Revolutionary War.", "At the Constitutional Convention of 1787, emergency powers, as such, failed to attract much attention during the course of debate over the charter for the new government. It may be argued, however, that the granting of emergency powers by Congress is implicit in its Article I, Section 8, authority to \"provide for the common Defense and general Welfare;\" the commerce clause; its war, armed forces, and militia powers; and the \"necessary and proper\" clause empowering it to make such laws as are required to fulfill the executions of \"the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.\"", "There is a tradition of constitutional interpretation that has resulted in so-called implied powers, which may be invoked in order to respond to an emergency situation. Locke seems to have anticipated this practice. Furthermore, Presidents have occasionally taken an emergency action that they assumed to be constitutionally permissible. Thus, in the American governmental experience, the exercise of emergency powers has been somewhat dependent upon the Chief Executive's view of the presidential office.", "Perhaps the President who most clearly articulated a view of his office in conformity with the Lockean position was Theodore Roosevelt. Describing what came to be called the \"stewardship\" theory of the presidency, Roosevelt wrote of his \"insistence upon the theory that the executive power was limited only by specific restrictions and prohibitions appearing in the Constitution or imposed by the Congress under its constitutional powers.\" It was his view \"that every executive officer, and above all every executive officer in high position, was a steward of the people,\" and he \"declined to adopt the view that what was imperatively necessary for the Nation could not be done by the President unless he could find some specific authorization to do it.\" Indeed, it was Roosevelt's belief that, for the President, \"it was not only his right but his duty to do anything that the needs of the Nation demanded unless such action was forbidden by the Constitution or by the laws.\"", "Opposed to this view of the presidency was Roosevelt's former Secretary of War, William Howard Taft, his personal choice for and actual successor as Chief Executive. He viewed the presidential office in more limited terms, writing \"that the President can exercise no power which cannot be fairly and reasonably traced to some specific grant of power or justly implied and included within such express grant as proper and necessary to its exercise.\" In his view, such a \"specific grant must be either in the Federal Constitution or in an act of Congress passed in pursuance thereof. There is,\" Taft concluded, \"no undefined residuum of power which he can exercise because it seems to him to be in the public interest.\"", "Between these two views of the presidency lie various gradations of opinion, resulting in perhaps as many conceptions of the office as there have been holders. One authority has summed up the situation in the following words:", "Emergency powers are not solely derived from legal sources. The extent of their invocation and use is also contingent upon the personal conception which the incumbent of the Presidential office has of the Presidency and the premises upon which he interprets his legal powers. In the last analysis, the authority of a President is largely determined by the President himself.", "Apart from the Constitution, but resulting from its prescribed procedures, there are statutory grants of power for emergency conditions. The President is authorized by Congress to take some special or extraordinary action, ostensibly to meet the problems of governing effectively in times of exigency. Sometimes these laws are of only temporary duration. The Economic Stabilization Act of 1970, for example, allowed the President to impose certain wage and price controls for about three years before it expired automatically in 1974. The statute gave the President emergency authority to address a crisis in the nation's economy.", "Many of these laws are continuously maintained or permanently available for the President's ready use in responding to an emergency. The Defense Production Act, originally adopted in 1950 to prioritize and regulate the manufacture of military material, is an example of this type of statute.", "There are various standby laws that convey special emergency powers once the President formally declares a national emergency activating them. In 1973, a Senate special committee studying emergency powers published a compilation identifying some 470 provisions of federal law delegating to the executive extraordinary authority in time of national emergency. The vast majority of them are of the standby kind\u2014dormant until activated by the President. However, formal procedures for invoking these authorities, accounting for their use, and regulating their activation and application were established by the National Emergencies Act of 1976."], "subsections": []}, {"section_title": "The Emergency Concept", "paragraphs": ["Relying upon constitutional authority or congressional delegations made at various times over the past 230 years, the President of the United States may exercise certain powers in the event that the continued existence of the nation is threatened by crisis, exigency, or emergency circumstances. What is a national emergency?", "In the simplest understanding of the term, the dictionary defines emergency as \"an unforeseen combination of circumstances or the resulting state that calls for immediate action.\" In the midst of the crisis of the Great Depression, a 1934 Supreme Court majority opinion characterized an emergency in terms of urgency and relative infrequency of occurrence as well as equivalence to a public calamity resulting from fire, flood, or like disaster not reasonably subject to anticipation. An eminent constitutional scholar, the late Edward S. Corwin, explained emergency conditions as being those that \"have not attained enough of stability or recurrency to admit of their being dealt with according to rule.\" During congressional committee hearings on emergency powers in 1973, a political scientist described an emergency in the following terms: \"It denotes the existence of conditions of varying nature, intensity and duration, which are perceived to threaten life or well-being beyond tolerable limits.\" Corwin also indicated it \"connotes the existence of conditions suddenly intensifying the degree of existing danger to life or well-being beyond that which is accepted as normal.\"", "There are at least four aspects of an emergency condition. The first is its temporal character: An emergency is sudden, unforeseen, and of unknown duration. The second is its potential gravity: An emergency is dangerous and threatening to life and well-being. The third, in terms of governmental role and authority, is the matter of perception: Who discerns this phenomenon? The Constitution may be guiding on this question, but it is not always conclusive. Fourth, there is the element of response: By definition, an emergency requires immediate action but is also unanticipated and, therefore, as Corwin notes, cannot always be \"dealt with according to rule.\" From these simple factors arise the dynamics of national emergency powers. These dynamics can be seen in the history of the exercise of emergency powers."], "subsections": []}, {"section_title": "Law and Practice", "paragraphs": ["In 1792, residents of western Pennsylvania, Virginia, and the Carolinas began forcefully opposing the collection of a federal excise tax on whiskey. Anticipating rebellious activity, Congress enacted legislation providing for the calling forth of the militia to suppress insurrections and repel invasions. Section 3 of this statute required that a presidential proclamation be issued to warn insurgents to cease their activity. If hostilities persisted, the militia could be dispatched. On August 17, 1794, President Washington issued such a proclamation. The insurgency continued. The President then took command of the forces organized to put down the rebellion.", "Here was the beginning of a pattern of policy expression and implementation regarding emergency powers. Congress legislated extraordinary or special authority for discretionary use by the President in a time of emergency. In issuing a proclamation, the Chief Executive notified Congress that he was making use of this power and also apprised other affected parties of his emergency action.", "Over the next 100 years, Congress enacted various permanent and standby laws for responding largely to military, economic, and labor emergencies. During this span of years, however, the exercise of emergency powers by President Abraham Lincoln brought the first great dispute over the authority and discretion of the Chief Executive to engage in emergency actions.", "By the time of Lincoln's inauguration (March 4, 1861), seven states of the lower South had announced their secession from the Union; the Confederate provisional government had been established (February 4, 1861); Jefferson Davis had been elected (February 9, 1861) and installed as president of the confederacy (February 18, 1861); and an army was being mobilized by the secessionists. Lincoln had a little over two months to consider his course of action.", "When the new President assumed office, Congress was not in session. For reasons of his own, Lincoln delayed calling a special meeting of the legislature but soon ventured into its constitutionally designated policy sphere. On April 19, he issued a proclamation establishing a blockade on the ports of the secessionist states, \"a measure hitherto regarded as contrary to both the Constitution and the law of nations except when the government was embroiled in a declared, foreign war.\" Congress had not been given an opportunity to consider a declaration of war.", "The next day, the President ordered the addition of 19 vessels to the navy \"for purposes of public defense.\" A short time later, the blockade was extended to the ports of Virginia and North Carolina.", "By a proclamation of May 3, Lincoln ordered that the regular army be enlarged by 22,714 men, that navy personnel be increased by 18,000, and that 42,032 volunteers be accommodated for three-year terms of service. The directive antagonized many Representatives and Senators, because Congress is specifically authorized by Article I, Section 8, of the Constitution \"to raise and support armies.\"", "In his July message to the newly assembled Congress, Lincoln suggested, \"These measures, whether strictly legal or not, were ventured upon under what appeared to be a popular and a public necessity, trusting then, as now, that Congress would readily ratify them. It is believed,\" he wrote, \"that nothing has been done beyond the constitutional competency of Congress.\"", "Congress subsequently did legislatively authorize, and thereby approve, the President's actions regarding his increasing armed forces personnel and would do the same later concerning some other questionable emergency actions. In the case of Lincoln, the opinion of scholars and experts is that \"neither Congress nor the Supreme Court exercised any effective restraint upon the President.\" The emergency actions of the Chief Executive were either unchallenged or approved by Congress and were either accepted or\u2014because of almost no opportunity to render judgment\u2014went largely without notice by the Supreme Court. The President made a quick response to the emergency at hand, a response that Congress or the courts might have rejected in law but, nonetheless, had been made in fact and with some degree of popular approval. Similar controversy would arise concerning the emergency actions of Presidents Woodrow Wilson and Franklin D. Roosevelt. Both men exercised extensive emergency powers with regard to world hostilities, and Roosevelt also used emergency authority to deal with the Great Depression. Their emergency actions, however, were largely supported by statutory delegations and a high degree of approval on the part of both Congress and the public.", "During the Wilson and Roosevelt presidencies, a major procedural development occurred in the exercise of emergency powers\u2014use of a proclamation to declare a national emergency and thereby activate all standby statutory provisions delegating authority to the President during a national emergency. The first such national emergency proclamation was issued by President Wilson on February 5, 1917. Promulgated on the authority of a statute establishing the U.S. Shipping Board, the proclamation concerned water transportation policy. It was statutorily terminated, along with a variety of other wartime measures, on March 3, 1921.", "President Franklin D. Roosevelt issued the next national emergency proclamation some 48 hours after assuming office. Proclaimed March 6, 1933, on the somewhat questionable authority of the Trading with the Enemy Act of 1917, the proclamation declared a \"bank holiday\" and halted a major class of financial transactions by closing the banks. Congress subsequently gave specific statutory support for the Chief Executive's action with the passage of the Emergency Banking Act on March 9. Upon signing this legislation into law, the President issued a second banking proclamation, based upon the authority of the new law, continuing the bank holiday until it was determined that banking institutions were capable of conducting business in accordance with new banking policy.", "Next, on September 8, 1939, President Roosevelt promulgated a proclamation of \"limited\" national emergency, though the qualifying term had no meaningful legal significance. Almost two years later, on May 27, 1941, he issued a proclamation of \"unlimited\" national emergency. This action, however, did not actually make any important new powers available to the Chief Executive in addition to those activated by the 1939 proclamation. The President's purpose in making the second proclamation was largely to apprise the American people of the worsening conflict in Europe and growing tensions in Asia.", "These two war-related proclamations of a general condition of national emergency remained operative until 1947, when certain of the provisions of law they had activated were statutorily rescinded. Then, in 1951, Congress terminated the declaration of war against Germany. In the spring of the following year, the Senate ratified the treaty of peace with Japan. Because these actions marked the end of World War II for the United States, legislation was required to keep certain emergency provisions in effect. Initially, the Emergency Powers Interim Continuation Act temporarily maintained this emergency authority. It was subsequently supplanted by the Emergency Powers Continuation Act, which kept selected emergency delegations in force until August 1953. By proclamation in April 1952, President Harry S. Truman terminated the 1939 and 1941 national emergency declarations, leaving operative only those emergency authorities continued by statutory specification.", "President Truman's 1952 termination, however, specifically exempted a December 1950 proclamation of national emergency he had issued in response to hostilities in Korea. This condition of national emergency would remain in force and unimpaired well into the era of the Vietnam War.", "Two other proclamations of national emergency would also be promulgated before Congress once again turned its attention to these matters. Faced with a postal strike, President Richard Nixon declared a national emergency in March 1970, thereby gaining permission to use units of the Ready Reserve to assist in moving the mail. President Nixon proclaimed a second national emergency in August 1971 to control the balance of payments flow by terminating temporarily certain trade agreement provisos and imposing supplemental duties on some imported goods."], "subsections": []}, {"section_title": "Congressional Concerns", "paragraphs": ["In the years following the conclusion of U.S. armed forces involvement in active military conflict in Korea, occasional expressions of concern were heard in Congress regarding the continued existence of President Truman's 1950 national emergency proclamation long after the conditions prompting its issuance had disappeared. There was some annoyance that the President was retaining extraordinary powers intended only for a time of genuine emergency and a feeling that the Chief Executive was thwarting the legislative intent of Congress by continuously failing to terminate the declared national emergency.", "Growing public and congressional displeasure with the President's exercise of his war powers and deepening U.S. involvement in hostilities in Vietnam prompted interest in a variety of related matters. For Senator Charles Mathias, interest in the question of emergency powers developed out of U.S. involvement in Vietnam and the incursion into Cambodia. Together with Senator Frank Church, he sought to establish a Senate special committee to study the implications of terminating the 1950 proclamation of national emergency that was being used to prosecute the Vietnam War \"to consider problems which might arise as the result of the termination and to consider what administrative or legislative actions might be necessary.\" Such a panel was initially chartered by S.Res. 304 as the Special Committee on the Termination of the National Emergency in June 1972, but it did not begin operations before the end of the year.", "With the convening of the 93 rd Congress in 1973, the special committee was approved again with S.Res. 9 . Upon exploring the subject matter of national emergency powers, however, the mission of the special committee became more burdensome. There was not just one proclamation of national emergency in effect but four such instruments, issued in 1933, 1950, 1970, and 1971. The United States was in a condition of national emergency four times over, and with each proclamation, the whole collection of statutorily delegated emergency powers was activated. Consequently, in 1974, with S.Res. 242 , the study panel was rechartered as the Special Committee on National Emergencies and Delegated Emergency Powers to reflect its focus upon matters larger than the 1950 emergency proclamation. Its final mandate was provided by S.Res. 10 in the 94 th Congress, although its termination date was necessarily extended briefly in 1976 by S.Res. 370 . Senators Church and Mathias co-chaired the panel.", "The Special Committee on National Emergencies and Delegated Emergency Powers produced various studies during its existence. After scrutinizing the U . S . Code and uncodified statutory emergency powers, the panel identified 470 provisions of federal law that delegated extraordinary authority to the executive in time of national emergency. Not all of them required a declaration of national emergency to be operative, but they were, nevertheless, extraordinary grants. The special committee also found that no process existed for automatically terminating the four outstanding national emergency proclamations. Thus, the panel began developing legislation containing a formula for regulating emergency declarations in the future and otherwise adjusting the body of statutorily delegated emergency powers by abolishing some provisions, relegating others to permanent status, and continuing others in a standby capacity. The panel also began preparing a report offering its findings and recommendations regarding the state of national emergency powers in the nation."], "subsections": []}, {"section_title": "The National Emergencies Act", "paragraphs": ["The special committee, in July 1974, unanimously recommended legislation establishing a procedure for the presidential declaration and congressional regulation of a national emergency. The proposal also modified various statutorily delegated emergency powers. In arriving at this reform measure, the panel consulted with various executive branch agencies regarding the significance of existing emergency statutes, recommendations for legislative action, and views as to the repeal of some provisions of emergency law.", "This recommended legislation was introduced by Senator Church for himself and others on August 22, 1974, and became S. 3957 . It was reported from the Senate Committee on Government Operations on September 30 without public hearings or amendment. The bill was subsequently discussed on the Senate floor on October 7, when it was amended and passed.", "Although a version of the reform legislation had been introduced in the House on September 16, becoming H.R. 16668 , the Committee on the Judiciary, to which the measure was referred, did not have an opportunity to consider either that bill or the Senate-adopted version due to the press of other business\u2014chiefly the impeachment of President Nixon and the nomination of Nelson Rockefeller to be Vice President of the United States. Thus, the National Emergencies Act failed to be considered on the House floor before the final adjournment of the 93 rd Congress.", "With the convening of the next Congress, the proposal was introduced in the House on February 27, 1975, becoming H.R. 3884 , and in the Senate on March 6, becoming S. 977 . House hearings occurred in March and April before the Subcommittee on Administrative Law and Governmental Relations of the Committee on the Judiciary. The bill was subsequently marked up and, on April 15, was reported in amended form to the full committee on a 4-0 vote. On May 21, the Committee on the Judiciary, on a voice vote, reported the bill with technical amendments. During the course of House debate on September 4, there was agreement to both the committee amendments and a floor amendment providing that national emergencies end automatically one year after their declaration unless the President informs Congress and the public of a continuation. The bill was then passed on a 388-5 yea and nay vote and sent to the Senate, where it was referred to the Committee on Government Operations.", "The Senate Committee on Government Operations held a hearing on H.R. 3884 on February 25, 1976, the bill was subsequently reported on August 26 with one substantive and several technical amendments. The following day, the amended bill was passed and returned to the House. On August 31, the House agreed to the Senate amendments, clearing the proposal for President Gerald Ford's signature on September 14.", "In its final report, issued in May 1976, the special committee concluded \"by reemphasizing that emergency laws and procedures in the United States have been neglected for too long, and that Congress must pass the National Emergencies Act to end a potentially dangerous situation.\" ", "Other issues identified by the special committee as deserving attention in the future, however, did not fare so well. The panel, for example, was hopeful that standing committees of both houses of Congress would review statutory emergency power provisions within their respective jurisdictions with a view to the continued need for, and possible adjustment of, such authority. Actions in this regard were probably not as ambitious as the special committee expected. A title of the Federal Civil Defense Act of 1950 granting the President or Congress power to declare a civil defense emergency in the event of an attack on the United States occurred or was anticipated expired in June 1974 after the House Committee on Rules failed to report a measure continuing the statute.", "A provision of emergency law was refined in May 1976. Legislation was enacted granting the President the authority to order certain selected members of an armed services reserve component to active duty without a declaration of war or national emergency. Previously, such an activation of military reserve personnel had been limited to a \"time of national emergency declared by the President\" or \"when otherwise authorized by law.\"", "Another refinement of emergency law occurred in 1977 when action was completed on the International Emergency Economic Powers Act (IEEPA). Reform legislation containing this statute modified a provision of the Trading with the Enemy Act of 1917, authorizing the President to regulate the nation's international and domestic finance during periods of declared war or national emergency. The enacted bill limited the President's Trading with the Enemy Act power to regulate the country's finances to times of declared war. In IEEPA, a provision conferred authority on the Chief Executive to exercise controls over international economic transactions in the future during a declared national emergency and established procedures governing the use of this power, including close consultation with Congress when declaring a national emergency to activate IEEPA. Such a declaration would be subject to congressional regulation under the procedures of the National Emergencies Act.", "Other matters identified in the final report of the special committee for congressional scrutiny included", "investigation of emergency preparedness efforts conducted by the executive branch, attention to congressional preparations for an emergency and continual review of emergency law, ending open-ended grants of authority to the executive, investigation and institution of stricter controls over delegated powers, and improving the accountability of executive decisionmaking.", "There is some public record indication that certain of these points, particularly the first and the last, have been addressed in the past two decades by congressional overseers.", "As enacted, the National Emergencies Act consisted of five titles. The first of these generally returned all standby statutory delegations of emergency power, activated by an outstanding declaration of national emergency, to a dormant state two years after the statute's approval. However, the act did not cancel the 1933, 1950, 1970, and 1971 national emergency proclamations, because the President issued them pursuant to his Article II constitutional authority. Nevertheless, it did render them ineffective by returning to dormancy the statutory authorities they had activated, thereby necessitating a new declaration to activate standby statutory emergency authorities.", "Title II provided a procedure for future declarations of national emergency by the President and prescribed arrangements for their congressional regulation. The statute established an exclusive means for declaring a national emergency. Emergency declarations were to terminate automatically after one year unless formally continued for another year by the President, but they could be terminated earlier by either the President or Congress. Originally, the prescribed method for congressional termination of a declared national emergency was a concurrent resolution adopted by both houses of Congress. This type of \"legislative veto\" was effectively invalidated by the Supreme Court in 1983. The National Emergencies Act was amended in 1985 to substitute a joint resolution as the vehicle for rescinding a national emergency declaration.", "When declaring a national emergency, the President must indicate, according to Title III, the powers and authorities being activated to respond to the exigency at hand. Certain presidential accountability and reporting requirements regarding national emergency declarations were specified in Title IV, and the repeal and continuation of various statutory provisions delegating emergency powers was accomplished in Title V."], "subsections": []}, {"section_title": "Emergency Declarations in Effect and Emergency Declarations No Longer in Effect", "paragraphs": ["Since the 1976 enactment of the National Emergencies Act, various national emergencies have been declared pursuant to its provisions. Some were subsequently revoked, while others remain in effect. Table 1 displays the number of national emergencies in effect (some may refer to these as \"active\") and the number of national emergencies no longer in effect (some may refer to these as \"inactive\"), by President. Detailed information regarding the 31 national emergencies in effect may be found in Table 2 . Similar information regarding the 22 national emergencies no longer in may be found in Table 3 .", "The second column in Table 2 and Table 3 identifies the national emergency declaration, which is either an executive order (E.O.) or a presidential proclamation (Proc.). ", " Table 3 includes declared national emergencies that are no longer in effect. "], "subsections": []}, {"section_title": "Concluding Remarks", "paragraphs": ["The development, exercise, and regulation of emergency powers, from the days of the Continental Congress to the present, reflect at least one highly discernable trend: Those authorities available to the executive in time of national crisis or exigency have, since the time of the Lincoln Administration, come to be increasingly rooted in statutory law. The discretion available to a Civil War President in his exercise of emergency power has been harnessed, to a considerable extent, in the contemporary period. ", "Due to greater reliance upon statutory expression, the range of this authority has come to be more circumscribed, and the options for its use have come to be regulated procedurally through the National Emergencies Act. Since its enactment the National Emergencies Act has not been revisited by congressional overseers. The 1976 report of the Senate Special Committee on National Emergencies suggested that the prospect remains that further improvements and reforms in this policy area might be pursued and perfected.", "An anomaly in the activation of emergency powers appears to have occurred on September 8, 2005, when President George W. Bush issued a proclamation suspending certain wage requirements of the Davis-Bacon Act in the course of the federal response to the Gulf Coast disaster resulting from Hurricane Katrina. Instead of following the historical pattern of declaring a national emergency to activate the suspension authority, the President set out the following rationale in the proclamation: \"I find that the conditions caused by Hurricane Katrina constitute a 'national emergency' within the meaning of section 3147 of title 40, United States Code.\" A more likely course of action would seemingly have been for the President to declare a national emergency pursuant to the National Emergencies Act and to specify that he was, accordingly, activating the suspension authority. Although the propriety of the President's action in this case might have been ultimately determined in the courts, the proclamation was revoked on November 3, 2005, by a proclamation in which the President cited the National Emergencies Act as authority, in part, for his action."], "subsections": []}]}}
{"id": "R41931", "title": "Mail and Wire Fraud: An Abbreviated Overview of Federal Criminal Law", "released_date": "2019-02-11T00:00:00", "summary": ["The mail and wire fraud statutes are exceptionally broad. Their scope has occasionally given the courts pause. Nevertheless, prosecutions in their name have brought to an end schemes that have bilked victims out of millions, and sometimes billions, of dollars. The statutes proscribe (1) causing the use of the mail or wire communications, including email; (2) in conjunction with a scheme to intentionally defraud another of money or property; (3) by means of a material deception. The offenses, along with attempts or conspiracies to commit them, carry a term of imprisonment of up to 30 years in some cases, followed by a term of supervised release. Offenders also face the prospect of fines, orders to make restitution, and forfeiture of their property.", "The mail and wire fraud statutes overlap with a surprising number of other federal criminal statutes. Conduct that supports a prosecution under the mail or wire fraud statutes will often support prosecution under one or more other criminal provision(s). These companion offenses include (1) those that use mail or wire fraud as an element of a separate offense, like racketeering or money laundering; (2) those that condemn fraud on some jurisdictional basis other than use of the mail or wire communications, like those that outlaw defrauding the federal government or federally insured banks; and (3) those that proscribe other deprivations of honest services (i.e., bribery and kickbacks), like the statutes that ban bribery of federal officials or in connection with federal programs.", "Among the crimes for which mail or wire fraud may serve as an element, RICO (Racketeer Influenced and Corrupt Organizations Act) outlaws employing the patterned commission of predicate offenses to conduct the affairs of an enterprise that impacts commerce. Money laundering consists of transactions involving the proceeds of a predicate offense in order to launder them or to promote further predicate offenses.", "The statutes that prohibit fraud in some form or another are the most diverse of the mail and wire fraud companions. Congress modeled some after the mail and wire fraud statutes, incorporating elements of a scheme to defraud or obtain property by false pretenses into statutes that outlaw bank fraud, health care fraud, securities fraud, and foreign labor contracting fraud. Congress designed others to protect the public fisc by proscribing false claims against the United States, conspiracies to defraud the United States by obstructing its functions, and false statements in matters within the jurisdiction of the United States and its departments and agencies.", "Federal bribery and kickback statutes populate the third class of wire and mail fraud companions. One provision bans offering or accepting a thing of value in exchange for the performance or forbearance of a federal official act. Another condemns bribery of faithless agents in connection with federally funded programs and activities. A third, the Hobbs Act, outlaws bribery as a form of extortion under the color of official right.", "The fines, prison sentences, and other consequences that follow conviction for wire and mail fraud companions vary considerably, with fines from not more than $25,000 to not more than $2 million and prison terms from not more than five years to life."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction1", "paragraphs": ["Some time ago, a federal prosecutor referred to the mail and wire fraud statutes as \"our Stradivarius, our Colt 45, our Louisville Slugger \u2026 and our true love.\" Not everyone shares the prosecutor's delight. Commentators have argued that the statutes \"have long provided prosecutors with a means by which to salvage a modest, but dubious, victory from investigations that essentially proved unfruitful.\" Federal judges have also expressed concern from time to time, observing that the \"mail and wire fraud statutes have 'been invoked to impose criminal penalties upon a staggeringly broad swath of behavior,' creating uncertainty in business negotiations and challenges to due process and federalism.\" Nevertheless, mail and wire fraud prosecutions have brought to an end schemes that bilked victims of millions, and sometimes billions, of dollars. ", "The federal mail and wire fraud statutes outlaw schemes to defraud that involve the use of mail or wire communications. Both condemn fraudulent conduct that may also come within the reach of other federal criminal statutes. Both may serve as racketeering and money laundering predicate offenses. Both are punishable by imprisonment for not more than 20 years; for not more than 30 years, if the victim is a financial institution or the offense is committed in the context of major disaster or emergency. Both entitle victims to restitution. Both may result in the forfeiture of property."], "subsections": []}, {"section_title": "Elements", "paragraphs": ["The mail and wire fraud statutes are essentially the same, except for the medium associated with the offense\u2014the mail in the case of mail fraud and wire communication in the case of wire fraud. As a consequence, the interpretation of one is ordinarily considered to apply to the other. In construction of the terms within the two, the courts will frequently abbreviate or adjust their statement of the elements of a violation to focus on the questions at issue before them. As treatment of the individual elements makes clear, however, there seems little dispute that conviction requires the government to prove (1) the use of either mail or wire communications in the foreseeable furtherance, (2) of a scheme and intent to defraud another of either property or honest services, (3) involving a material deception."], "subsections": [{"section_title": "Use of Mail or Wire Communications", "paragraphs": ["The wire fraud statute applies to anyone who \"transmits or causes to be transmitted by wire, radio, or television communication in interstate or foreign commerce any writings ... for the purpose executing [a] ... scheme or artifice.\" The mail fraud statute is similarly worded and applies to anyone who \"... for the purpose of executing [a] ... scheme or artifice ... places in any post office ... or causes to be delivered by mail ... any ... matter.\" ", "The statutes require that a mailing or wire communication be in furtherance of a scheme to defraud. The mailing or communication need not be an essential element of the scheme, as long as it \"is incident to an essential element of the scheme.\" A qualifying mailing or communication, standing alone, may be routine, innocent, or even self-defeating, because \"[t]he relevant question at all times is whether the mailing is part of the execution of the scheme as conceived by the perpetrator at the time, regardless of whether the mailing later, through hindsight, may prove to have been counterproductive.\" The element may be satisfied by mailings or communications \"designed to lull the victim into a false sense of security, postpone inquiries or complaints, or make the transaction less suspect.\" The element may also be satisfied by mailings or wire communications used to obtain the property that is the object of the fraud. ", "A defendant need not personally have mailed or wired a communication; it is enough that he \"caused\" a mailing or transmission of a wire communication in the sense that the mailing or transmission was the reasonable foreseeable consequence of his intended scheme."], "subsections": []}, {"section_title": "Scheme to Defraud", "paragraphs": ["The mail and wire fraud statutes \"both prohibit, in pertinent part, 'any scheme or artifice to defraud[,]' or to obtain money or property 'by means of false or fraudulent pretenses, representations, or promises,\" or to deprive another of the right to honest services by such means. From the beginning, Congress intended to reach a wide range of schemes to defraud, and has expanded the concept whenever doubts arose. It added the second prong\u2014obtaining money or property by false pretenses, representations, or promises\u2014after defendants had suggested that the term \"scheme to defraud\" covered false pretenses concerning present conditions but not representations or promises of future conditions. More recently, it added 18 U.S.C. \u00a7 1346 to make it clear the term \"scheme to defraud\" encompassed schemes to defraud another of the right to honest services. Even before that adornment, the words were understood to \"refer 'to wronging one in his property rights by dishonest methods or schemes,' and 'usually signify the deprivation of something of value by trick, deceit, chicane or overreaching.'\" ", "As a general rule, the crime is done when the scheme is hatched and an attendant mailing or interstate phone call or email has occurred. Thus, the statutes are said to condemn a scheme to defraud regardless of its success. It is not uncommon for the courts to declare that to demonstrate a scheme to defraud the government needs to show that the defendant's \"communications were reasonably calculated to deceive persons of ordinary prudence and comprehension.\" Even a casual reading, however, might suggest that the statutes also cover a scheme specifically designed to deceive a na\u00efve victim. Nevertheless, the courts have long acknowledged the possibility of a \"puffing\" defense, and there may be some question whether the statutes reach those schemes designed to deceive the gullible though they could not ensnare the reasonably prudent. In any event, the question may be more clearly presented in the context of the defendant's intent and the materiality of the deception, a focus on the scheme's creator rather than its victim. ", "Defrauding or to Obtain Money or Property . The mail and wire fraud statutes speak of schemes to defraud or to obtain money or property by means of false or fraudulent pretenses. The Supreme Court has said that the phrase \"to defraud\" and the phrase \"to obtain money or property\" do not represent separate crimes, but instead the phrase \"obtain money or property\" describes what constitutes a scheme to defraud. In later look-alike offenses, Congress specifically numerated the two phrases. The bank fraud statute, for example, applies to \"whoever knowingly executes \u2026 a scheme or artifice \u2013 (1) to defraud a financial institution; or (2) to obtain any of the money, funds, credits, assets, securities, or other property owned by \u2026 a financial institution, by means of false or fraudulent pretenses \u2026\" It left the mail and wire fraud statutes, however, unchanged.", "The mail and wire fraud statutes clearly protect against deprivations of tangible property. They also protect certain intangible property rights, but only those that have value in the hands of the victim of a scheme. \"To determine whether a particular interest is property for purposes of the fraud statutes, [courts] look to whether the law traditionally has recognized and enforced it as a property right.\" "], "subsections": []}, {"section_title": "Materiality", "paragraphs": ["Neither the mail nor the wire fraud statute exhibits an explicit reference to materiality. Yet materiality is an element of each offense, because at the time of the statutes' enactment, the word \"defraud\" was understood to \"require[] a misrepresentation or concealment of [a] material fact.\" Thus, other than in an honest services context, a \"scheme to defraud\" for mail or wire fraud purposes must involve a material misrepresentation of some kind. \"A misrepresentation is material if it is capable of influencing the intended victim.\""], "subsections": []}, {"section_title": "Intent", "paragraphs": ["Again, other than in the case of honest services, \"'intent to defraud' requires an intent to (1) deceive, and (2) cause some harm to result from the deceit. A defendant acts with the intent to deceive when he acts knowingly with the specific intent to deceive for the purpose of causing pecuniary loss to another or bringing about some financial gain to himself.\" ", "A defendant has a complete defense if he believes the deceptive statements or promises to be true or otherwise acts under circumstances that belie an intent to defraud. Yet, a defendant has no defense if he blinds himself to the truth. Nor is it a defense if he intends to deceive but feels his victim will ultimately profit or be unharmed. "], "subsections": []}, {"section_title": "Honest Services", "paragraphs": ["Some time ago, the Supreme Court held in McNally v. United States that the protection of the mail fraud statute, and by implication the protection of the wire fraud statute, did not extend to \"the intangible right of the citizenry to good government.\" Soon after McNally , Congress enlarged the mail and wire fraud protection to include the intangible right to honest services, by defining the \"term 'scheme or artifice to defraud' [to] include[s] a scheme or artifice to deprive another of the intangible right to honest services.\" Lest the expanded definition be found unconstitutionally vague, the Court in Skilling v. United States limited its application to cases of bribery or kickbacks. The Court in Skilling supplied only a general description of the bribery and kickbacks condemned in the honest-services statute. Subsequent lower federal courts have often looked to the general federal law relating to bribery and kickbacks for the substantive elements of honest services bribery. In this context, bribery requires \"a quid pro quo\u2014a specific intent to give \u2026 something of value in exchange for an official act.\" And an \"official act\" means no more than an officer's formal exercise of governmental power in the form of a \"decision or action on a 'question, matter, cause, suit, proceeding or controversy'\" before him.", "The definition of the word \"kickback\" quoted by the Court in Skilling has since been reassigned, and the courts have cited the dictionary definition on occasion. ", "Except for the elements of a scheme to defraud in the form of a bribe and a kickback, honest services fraud, as an adjunct of the mail and wire fraud statutes, draws its elements and the sanctions that attend the offense from the mail and wire fraud statutes."], "subsections": []}, {"section_title": "Aiding and Abetting, Attempt, and Conspiracy", "paragraphs": ["Attempting or conspiring to commit mail or wire fraud or aiding and abetting the commission of those offenses carries the same penalties as the underlying offense. \"In order to aid and abet another to commit a crime it is necessary that a defendant in some sort associate himself with the venture, that he participate in it as in something that he wishes to bring about, that he seek by his action to make it succeed.\" ", "\"Conspiracy to commit wire fraud under 18 U.S.C. \u00a7 1349 requires a jury to find that (1) two or more persons agreed to commit wire fraud and (2) the defendant willfully joined the conspiracy with the intent to further its unlawful purpose.\" As a general rule, a conspirator is liable for any other offenses that a co-conspirator commits in the foreseeable furtherance of the conspiracy. Such liability, however, extends only until the objectives of the conspiracy have been accomplished or the defendant has withdrawn from the conspiracy.", "Where attempt has been made a separate offense, as it has for mail and wire fraud, conviction ordinarily requires that the defendant commit a substantial step toward the completion of the underlying offense with the intent to commit it. It does not, however, require the attempt to have been successful. Unlike conspiracy, a defendant may not be convicted of both the substantive offense and the lesser included crime of attempt to commit it. "], "subsections": []}, {"section_title": "Sentencing", "paragraphs": ["Mail and wire fraud are each punishable by imprisonment for not more than 20 years and a fine of not more than $250,000 (not more than $500,000 for organizations), or fine of not more than $1 million and imprisonment for not more than 30 years if the victim is a financial institution or the offense was committed in relation to a natural disaster. It is also subject to a mandatory minimum two-year term of imprisonment if identify theft is used during and in furtherance of the fraud. Conviction may also result in (1) probation, (2) a term of supervised release, (3) a special assessment, (4) a restitution order, and/or (5) a forfeiture order.", "Supervised Release and Special Assessments . Supervised release is a form of parole-like supervision imposed after a term of imprisonment has been served. Although imposition of a term of supervised release is discretionary in mail and wire fraud cases, the Sentencing Guidelines recommend its imposition in all felony cases. The maximum supervised release term for wire and mail fraud generally is three years\u2014five years when the defendant is convicted of the mail or wire fraud against a financial institution that carries a 30-year maximum term of imprisonment. Release will be subject to a number of conditions, violation of which may result in a return to prison for not more than two years (not more than three years if the original crime of conviction carried a 30-year maximum). There are three mandatory conditions: (1) commit no new crimes; (2) allow a DNA sample to be taken; and (3) submit to periodic drug testing. The court may suspend the drug testing condition, although it is under no obligation to do so even though the defendant has no history of drug abuse and drug abuse played no role in the offense. ", "Most courts will impose a standard series of conditions in addition to the mandatory condition of supervised release. The Sentencing Guidelines recommend that these include the payment of any fines, restitution, and special assessments that remain unsatisfied. Defendants convicted of mail or wire fraud must pay a special assessment of $100. ", "Restitution . Restitution is ordinarily required of those convicted of mail or wire fraud. The victims entitled to restitution include those directly and proximately harmed by the defendant's crime of conviction, and \"in the case of an offense that involves as an element a scheme, conspiracy, or pattern of criminal activity,\" like mail and wire fraud, \"any person directly harmed by the defendant's conduct in the course of the scheme, conspiracy, or pattern.\" ", "Forfeiture . Property that constitutes the proceeds of mail or wire fraud is subject to confiscation by the United States. It may be confiscated pursuant to either civil forfeiture or criminal forfeiture procedures. Civil forfeiture proceedings are conducted that treat the forfeitable property as the defendant. Criminal forfeiture proceedings are conducted as part of the criminal prosecution of the property owner. "], "subsections": []}]}, {"section_title": "Related Criminal Provisions", "paragraphs": ["The mail and wire fraud statutes essentially outlaw dishonesty. Due to their breadth, misconduct that constitutes mail or wire fraud may constitute a violation of one or more other federal criminal statutes as well. This overlap occurs perhaps most often with respect to (1) crimes for which mail or wire fraud are elements (\"predicate offenses\") of another offense; (2) fraud proscribed under jurisdictional circumstances other than mail or wire use; and (3) honest services fraud in the form of bribery or kickbacks."], "subsections": []}, {"section_title": "Predicate Offense Crimes", "paragraphs": ["Some federal crimes have as an element the commission of some other federal offense. The money laundering statute, for example, outlaws laundering the proceeds of various predicate offenses. The racketeering statute outlaws the commission of a pattern of predicate offenses to operate a racketeering enterprise. Mail and wire fraud are predicate racketeering and money laundering predicate offenses. ", "RICO . The Racketeer Influenced and Corrupt Organizations (RICO) provisions outlaw acquiring or conducting the affairs of an enterprise, engaged in or whose activities affect interstate commerce, through loan sharking or the patterned commission of various other predicate offenses. The racketeering-conduct and conspiracy-to-engage-in-racketeering-conduct appear to be the RICO offenses most often built on wire or mail fraud violations. The elements of the RICO conduct offense are (1) conducting the affairs; (2) of an enterprise; (3) engaged in activities in or that impact interstate or foreign commerce; (4) through a pattern; (5) of racketeering activity. \"Racketeering activity\" means, among other things, any act that is indictable under either the mail or wire fraud statutes. As for pattern, a RICO pattern \"requires at least two acts of racketeering activity. The racketeering predicates may establish a pattern if they [were] related and \u2026 amounted to, or threatened the likelihood of, continued criminal activity.'\" The pattern of predicate offenses must be used by someone employed by or associated with a qualified enterprise to conduct or participate in its activities. \"Congress did not intend to extend RICO liability \u2026 beyond those who participated in the operation and management of an enterprise through a pattern of racketeering activity.\" Nevertheless, \"liability under \u00a7 1962(c) is not limited to upper management \u2026 An enterprise is operated not just by upper management but also by lower rung participants.\" The enterprise may be either any group of individuals, any legal entity, or any group \"associated in fact.\" \"Nevertheless, 'an association-in-fact enterprise must have at least three structural features: a purpose, relationships among those associated with the enterprise and longevity sufficient to permit those associates to pursue the enterprise's purpose.'\" Moreover, qualified enterprises are only those that \"engaged in, or the activities of which affect, interstate or foreign commerce.\" Penalties : Imprisonment for not more than 20 years and a fine of not more than $250,000 (not more than $500,000 for organizations).", "Money Laundering . Mail and wire fraud are both money laundering predicate offenses by virtue of their status as RICO predicates. The most commonly prosecuted federal money laundering statute, 18 U.S.C. \u00a71956, outlaws, among other things, knowingly engaging in a financial transaction involving the proceeds generated by a \"specified unlawful activity\" (a predicate offense) for the purpose (1) of laundering the proceeds (i.e., concealing their source or ownership), or (2) of promoting further predicating offenses. ", "To establish the concealment offense, the government must establish that \"(1) [the] defendant conducted, or attempted to conduct a financial transaction which in any way or degree affected interstate commerce or foreign commerce; (2) the financial transaction involved proceeds of illegal activity; (3) [the] defendant knew the property represented proceeds of some form of unlawful activity, [such as mail or wire fraud]; and (4) [the] defendant conducted or attempted to conduct the financial transaction knowing the transaction was designed in whole or in part to conceal or disguise the nature, the location, the source, the ownership or the control of the proceeds of specified unlawful activity.\"", "To prove the promotional offense, \"the Government must show that the defendant: (1) conducted or attempted to conduct a financial transaction; (2) which the defendant then knew involved the proceeds of unlawful activity; (3) with the intent to promote or further unlawful activity.\" Nothing in either provision suggests that the defendant must be shown to have committed the predicate offense. Moreover, simply establishing that the defendant spent or deposited the proceeds of the predicate offense is not enough without proof of an intent to promote or conceal. Penalties : Imprisonment for not more than 20 years and a fine of not more than $500,000. ", "Merely depositing the proceeds of a money laundering predicate offense does not alone constitute a violation of Section 1956. It is enough for a violation of 18 U.S.C. \u00a7 1957, however, if more than $10,000 is involved. Section 1957 uses Section 1956's definition of specified unlawful activities. Thus, mail and wire fraud violations may serve as the basis for the prosecution under Section 1957. \"Section 1957 differs from Section 1956 in two critical respects: It requires that the property have a value greater than $10,000, but it does not require that the defendant know of [the] design to conceal [or promote] aspects of the transaction or that anyone have such a design.\" Penalties: Imprisonment for not more than 10 years and a fine of not more than $250,000 (not more than $500,000) for organizations."], "subsections": []}, {"section_title": "Fraud Under Other Jurisdictional Circumstances", "paragraphs": ["This category includes the offenses that were made federal crimes because they involve fraud against the United States or because they are other frauds that share elements with the mail and wire fraud. The most prominent are the proscriptions against defrauding the United States by the submission of false claims, conspiracy to defraud the United States, and material false statements in matters within the jurisdiction of the United States. Bank fraud, health care fraud, securities and commodities fraud, and fraud in foreign labor contracting are all Chapter 63 companions of mail and wire fraud. ", "Defrauding the United States \u2014 False Claims . Section 287 outlaws the knowing submission of a false claim against the United States. \"To prove a false claim, the government must prove that (1) [the defendant] 'made and presented' to the government a claim, (2) 'the claim was false, fictitious, or fraudulent,' (3) [the defendant] knew the claim was false, fictitious, or fraudulent, and (4) 'the claim was material' to the government.\" Penalti es : Imprisonment for not more than five years and a fine of not more than $250,000 (not more than $500,000 for organizations). ", "Conspiracy to Defraud the U nited S tates . The general conspiracy statute has two parts. It outlaws conspiracies to violate the laws of the United States. More relevant here, it also outlaws conspiracies to defraud the United States. \"To convict on a charge under the 'defraud' clause, the government must show that the defendant (1) entered into an agreement (2) to obstruct a lawful government function (3) by deceitful or dishonest means and (4) committed at least one overt act in furtherance of the conspiracy.\" Thus, the \"fraud covered by the statute reaches any conspiracy for the purpose of impairing, obstructing or defeating the lawful functions of any department of the Government\" by \"deceit, craft or trickery, or at least by means that are dishonest.\" Unlike mail and wire fraud, the government need not show that the scheme was designed to deprive another of money, property, or honest services; it is enough to show that the scheme is designed to obstruct governmental functions. Penalties : Imprisonment for not more than five years and a fine of not more than $250,000 (not more than $500,000 for organizations). ", "False Statements . Section 1001 outlaws knowingly and willfully making a material false statement on a matter within the jurisdiction of the executive, legislative, or judicial branch of the federal government. A matter is material for purposes of Section 1001 when \"it has a natural tendency to influence, or is capable of influencing, the decision of\" the individual or entity to whom it is addressed. A matter is within the jurisdiction of a federal entity \"when it has the power to exercise authority in a particular matter\" and federal jurisdiction \"may exist when false statements [are] made to state or local government agencies receiving federal support or subject to federal regulation.\" Penalties : Imprisonment for not more than five years and a fine of not more than $250,000 (not more than $500,000 for organizations). ", "Fraud Elsewhere in Chapter 63. Chapter 63 contains four other fraud proscriptions in addition to mail and wire fraud: bank fraud, health care fraud, securities and commodities fraud, and fraud in foreign labor contracting. Each relies on a jurisdictional base other than use of the mail or wire communications.", "Bank Fraud . The bank fraud statute outlaws (1) schemes to defraud a federally insured financial institution, and (2) schemes to falsely obtain property from such an institution. To establish the bank-property scheme to defraud offense, \"the Government must prove: (1) the defendant knowingly executed or attempted to execute a scheme or artifice to defraud a financial institution; (2) the defendant did so with the intent to defraud a financial institution; and (3) the financial institution was federally insured.\" ", "As for the bank-custody offense, \"the government must prove (1) that a scheme existed to obtain moneys, funds, or credit in the custody of a federally-insured bank by fraud; (2) that the defendant participated in the scheme by means of material false pretenses, representations, or promises; and (3) that the defendant acted knowingly.\" Penalties : Imprisonment for not more than 30 years and a fine of not more than $1 million. ", "Health Care Fraud . The health care fraud provision follows the pattern of other Chapter 63 offenses. It condemns schemes to defraud. The schemes it proscribes include honest services fraud in the form of bribery and kickbacks. Attempts and conspiracies to violate its prohibitions carry the same penalties as the complete offense it describes. It is often prosecuted along with other related offenses. Parsed to its elements, the section declares, \"[a] Whoever [b] knowingly and willfully [c] executes or attempts to execute [d] a scheme or artifice (1) to defraud any health care benefit program, or (2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any money or property owned by, or under the custody or control of, any health care benefit program [e] in connection with the delivery of or payment for health care benefits, items, or services shall be \u2026\" Penalties : A fine of not more than $250,000 (not more than $500,000 for organizations) and (1) if death results, imprisonment for life or any term of years; (2) if serious bodily injury results, imprisonment for 20 years; (3) otherwise, imprisonment for not more than 10 years. ", "Securities and Commodities Fraud . Section 1348, the securities and commodities fraud prohibition, continues the progression of separating its defrauding feature from its obtaining-property feature. The elements of defrauding offense \"are (1) fraudulent intent, (2) a scheme or artifice to defraud, and (3) a nexus with a security.\" To prove a violation of Section 1348(2), the government must establish that the defendant (1) executed, or attempted to execute, a scheme or artifice; (2) with fraudulent intent; (3) in order to obtain money or property; (4) by material false or fraudulent pretenses, representations, or promises. Penalties : Imprisonment for not more than 25 years and fines of not more than $250,000 (not more than $500,000 for organizations). ", "Fraud in Foreign Labor Contracting . \"The substantive offense of fraud in foreign labor contracting [under 18 U.S.C. \u00a7 1351] occurs when someone: (1) recruits, solicits, or hires a person outside the United States, or causes another person to do so, or attempts to do so; (2) does so by means of materially false or fraudulent pretenses, representations or promises regarding that employment; and (3) acts knowingly and with intent to defraud.\" The offense occurs outside the United States when related to a federal contract or U.S. presence abroad. Penalties : Imprisonment for not more than five years and a fine of not more than $250,000 (not more than $500,000 for an organization). "], "subsections": []}, {"section_title": "Honest Services Fraud (Bribery and Kickbacks) Elsewhere", "paragraphs": ["After the Supreme Court's 2010 decision in Skillin g v. United States , honest services mail and wire fraud consists of bribery and kickback schemes furthered by use of the mail or wire communications. Mail and wire fraud aside, the principal bribery and kickback statutes include 18 U.S.C. \u00a7\u00a7 201(b)(1) (bribery of federal officials), 666 (bribery relating to federal programs), 1951 (extortion under color of official right); 15 U.S.C \u00a7\u00a7 78dd-1 to 78dd-3 (foreign corrupt practices); and 42 U.S.C. \u00a7 1320a-7b (Medicare/Medicaid anti-kickback). ", "Bribery of Federal Officials . Conviction for violation of Section 201(b)(1) \"requires a showing that something of value was corruptly ... offered or promised to a public official ... or corruptly ... sought ... or agreed to be received by a public official with intent ... to influence any official act ... or in return for 'being influenced in the performance of any official act.\" ", "The hallmark of the offense is a corrupt quid pro quo, \"a specific intent to give or receive something of value in exchange for an official act.\" The public officials covered include federal officers and employees, those of the District of Columbia, and those who perform tasks for or on behalf of the United States or any of its departments or agencies. The official acts that constitute the objective of the corrupt bargain include any decision or action relating to any matter coming before an individual in his official capacity. Penalti es : Imprisonment for up to 15 years, a fine of up to $250,000 (up to $500,000 for an organization). ", "Bribery and Fraud Related to Federal Programs . Section 666 outlaws both (1) fraud and (2) bribery by the faithless agents of state, local, tribal or private entities\u2014that receive more than $10,000 in federal benefits\u2014in relation to a transaction of $5,000 or more. \"A violation of Section 666(a)(1)(A) requires proof of five elements. The government must prove that: (1) a defendant was an agent of an organization, government, or agency; (2) in a one-year period that organization, government, or agency received federal benefits in excess of $10,000; (3) a defendant \u2026 obtained by fraud \u2026 ; (4) \u2026 property owned by, or in the care, custody, or control of, the organization, government, or entity; and (5) the value of that property was at least $5,000.\" ", "\"A person is guilty under \u00a7 666[(a)(1)(B)] if he, being an agent of an organization, government, or governmental agency that receives federal-program funds, corruptly solicits or demands for the benefit of any person, or accepts or agrees to accept, anything of value from any person, intending to be influenced or rewarded in connection with any business, transaction, or series of transactions of such organization, government, or agency involving anything of value of $5,000 or more.\" Penalties : Imprisonment for not more than 10 years and a fine of not more than $250,000 (not more than $500,000 for organizations). ", "Hobbs Act . The Hobbs Act, 18 U.S.C. \u00a7 1951, outlaws obtaining the property of another under \"color of official right,\" in a manner that has an effect on interstate commerce. Conviction requires the government to prove that the defendant \"(1) was a government official; (2) who accepted property to which she was not entitled; (3) knowing that she was not entitled to the property; and (4) knowing that the payment was given in return for officials acts: (5) which had at least a de minimis effect on commerce.\" Conviction does not require that the public official sought or induced payment: \"the government need only show that a public official has obtained a payment to which he was not entitled, knowing that the payment was made in return for official acts.\" Penalties : Imprisonment for not more than 20 years and a fine of not more than $250,000 (not more than $500,000 for an organization). ", "Foreign Corrupt Practices . The bribery provisions of the Foreign Corrupt Practices Act (FCPA) are three: 15 U.S.C. \u00a7\u00a7 78dd-1(trade practices by issuers), 78dd-2 (trade practices by domestic concerns), and 78dd-3 (trade practices by others within the United States). Other than the class of potential defendants, the elements of the three are comparable. They \"make[] it a crime to: (1) willfully; (2) make use of the mail or any means or instrumentality of interstate commerce; (3) corruptly; (4) in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to; (5) any foreign official; (6) for purposes of [either] influencing any act or decision of such foreign official in his official capacity [or] inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official [or] securing any improper advantage; (7) in order to assist such [corporation] in obtaining or retaining business for or with, or directing business to, any person.\" None of the three proscriptions apply to payments \"to expedite or to secure the performance of a routine governmental action,\" and each affords defendants an affirmative defense for payments that are lawful under the applicable foreign law or regulation. Penalties : Imprisonment for not more than five years and a fine of not more than $100,000 (not more than $2 million for organizations). ", "Medicare Kickbacks . The Medicare/Medicaid kickback prohibition in 42 U.S.C. 1320a-7b(b) outlaws \"knowingly and willfully [offering or paying], soliciting [or] receiving, any remuneration (including any kickback) ... (A) to induce the referral of [, or (B) the purchase with respect to] Medicare [or] Medicaid beneficiaries ... any item or service for which payment may be made in whole or in part under the Medicare [or] Medicaid programs....\" Penalties : Imprisonment for not more than five years and a fine of not more than $25,000."], "subsections": []}]}}
{"id": "R45101", "title": "Congressional Gold Medals: Background, Legislative Process, and Issues for Congress", "released_date": "2019-03-18T00:00:00", "summary": ["Senators and Representatives are frequently asked to support or sponsor proposals recognizing historic events and outstanding achievements by individuals or institutions. Among the various forms of recognition that Congress bestows, the Congressional Gold Medal is often considered the most distinguished. Through this venerable tradition\u2014the occasional commissioning of individually struck gold medals in its name\u2014Congress has expressed public gratitude on behalf of the nation for distinguished contributions for more than two centuries. Since 1776, this award, which initially was bestowed on military leaders, has also been given to such diverse individuals as Sir Winston Churchill and Bob Hope, George Washington and Robert Frost, Joe Louis and Mother Teresa of Calcutta.", "Congressional gold medal legislation generally has a specific format. Once a gold medal is authorized, it follows a specific process for design, minting, and awarding. This process includes consultation and recommendations by the Citizens Coinage Advisory Commission (CCAC) and the U.S. Commission of Fine Arts (CFA), pursuant to any statutory instructions, before the Secretary of the Treasury makes the final decision on a gold medal's design. Once the medal has been struck, a ceremony will often be scheduled to formally award the medal to the recipient.", "In recent years, the number of gold medals awarded has increased, and some have expressed interest in examining the gold medal awarding process. Should Congress want to make such changes, several individual and institutional options might be available. The individual options include decisions made by Members of Congress as to what individual or groups might be honored; potential specification of gold medal design elements; and where gold medals for groups might be housed once the award is made. The institutional options could include House, Senate, or committee rules for the consideration of gold medal legislation and whether statutory standards on the number of gold medals issued per year or per Congress might be established for gold medals."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Since the late 1700s, Congress has expressed public gratitude to individuals and groups by awarding medals and other similar decorations. The first Congressional Gold Medals were issued by the Continental Congress. Since that time, Congress has awarded gold medals to express public gratitude for distinguished contributions, dramatize the virtues of patriotism, and perpetuate the remembrance of great events. This tradition of authorizing individually struck gold medals bearing the portraits or actions of honorees is rich with history.", "Although Congress has approved legislation stipulating specific requirements for numerous other awards and decorations, there are no permanent statutory provisions specifically relating to the creation of Congressional Gold Medals. When such an award has been deemed appropriate, Congress has, by special action, provided for the creation of a personalized medal to be given in its name."], "subsections": [{"section_title": "Early Practices", "paragraphs": ["The first Congressional Gold Medals were issued by the Continental Congress. As initially conceived, Congressional Gold Medals were awards \"imbued with the conviction that only the very highest achievements [were] entitled to such a distinction, and that the value of a reward is enhanced by its rarity!\" At that time, the Continental Congress concluded there was no better way to honor \"and preserve the memory of illustrious characters and splendid events than medals\u2014whether we take into consideration the imperishable nature of the substance whence they are formed, the facility of multiplying copies, or the practice of depositing them in the cabinets of the curious.\" The first gold medals were struck in Paris under the direction of Colonel David Humphrey.", "Following a long-standing historical practice, Congress commissioned gold medals as tributes for what were considered to be the most distinguished achievements. Silver and bronze medals, and ceremonial swords, were awarded for less eminent, but still notable, accomplishments. However, only the gold medal has been continuously awarded to the present day. ", "The first Congressional Gold Medal was authorized on March 25, 1776, for George Washington, then commander of the Continental Army, for his \"wise and spirited conduct\" in bringing about British evacuation of Boston. During the next 12 years, the Continental Congress authorized an additional six gold medals for Revolutionary military leaders. Table 1 lists the Congressional Gold Medals issued by the Continental Congress, the year, the awardee, and the reason the medal was authorized.", "The gold medal conferred upon Major Henry \"Light Horse Harry\" Lee for his \"remarkable prudence\" and \"bravery\" during the surprise raid of Paulus Hook, NJ, was the first to be struck in the United States."], "subsections": []}, {"section_title": "19th Century Recipients", "paragraphs": ["Following the ratification of the Constitution, the first two Congressional Gold Medals were given in 1800 to Captain Thomas Truxtun for his gallant effort during the action between the U.S. frigate Constellation and the French ship La Vengeance and in 1805 to Commodore Edward Preble for gallantry and good conduct during the War with Tripoli. After those medals were awarded, Congress issued gold medals primarily for military achievements in the War of 1812 and the Mexican War. All told, 27 gold medals were awarded for the War of 1812, and a series of medals were awarded for expeditions led by Major General Zachary Taylor and Major General Winfield Scott in the Mexican War. General Taylor received three Congressional Gold Medals, while General Scott received one.", "In 1854, Congress began to broaden the scope of activities that merited a Congressional Gold Medal. This change was prompted by Commander Duncan N. Ingraham of the USS St. Louis 's rescue of Martin Koszta from illegal seizure and imprisonment about the Austrian war-brig Hussar . Subsequently, gold medals were issued to several individuals recognized for nonmilitary heroic activities or their work in specific fields. For example, in 1864 Cornelius Vanderbilt was honored for donating a steamship to the United States; in 1867 Cyrus W. Field was praised for his work in the laying of the transatlantic cable; and Private George F. Robinson was awarded for saving Secretary of State William H. Seward from an assassination attempt. At this time, Congress also established the Medal of Honor as a military award and increasingly focused the Congressional Gold Medal as an award for individuals and events."], "subsections": []}, {"section_title": "20th and 21st Century Recipients", "paragraphs": ["In the 20 th and 21 st centuries, Congress continued to broaden the scope of Congressional Gold Medals to include recognition of excellence in such varied fields as the arts, athletics, aviation, diplomacy, entertainment, exploration, medicine, politics, religion, and science. Several of the following individuals were the first in their specialties to be awarded gold medals:", "Composer George M. Cohan (1936) was the first entertainer to receive a gold medal, for his patriotic songs \"Over There\" and \"A Grand Old Flag.\" Wilbur and Orville Wright (1909) were the first aeronautical or space pioneers to receive a gold medal, for their achievements in demonstrating to the world the potential of aerial navigation. Lincoln Ellsworth (1926) was the first explorer honored, for his polar flight in 1925 and transpolar flight in 1926. Major Walter Reed and his associates (1928) were the first scientists honored, for discovering the cause and means of transmission of yellow fever in 1921. Vice President Alben W. Barkley (1949) was the first political honoree.", "In the late 20 th and early 21 st centuries, numerous other individuals have been honored for a variety of contributions including civil rights activism and humanitarian contributions. For a complete list of Congressional Gold Medal recipients since 1776, see the Appendix ."], "subsections": []}]}, {"section_title": "Authorizing Congressional Gold Medals", "paragraphs": ["Once a Congressional Gold Medal bill is introduced, it is typically referred to the House Committee on Financial Services or the Senate Committee on Banking, Housing, and Urban Affairs. The process for considering legislation varies between the House and Senate. "], "subsections": [{"section_title": "House of Representatives", "paragraphs": ["In the House, there are currently no chamber or committee rules regarding the procedures for gold medal bills. In some past Congresses, the House Financial Services Committee had adopted a committee rule that prohibited its Domestic Monetary Policy and Technology Subcommittee from holding a hearing on commemorative medal legislation\u2014including Congressional Gold Medals\u2014\"unless the legislation is cosponsored by at least two-thirds of the members of the House.\" Informal practices regarding cosponosrship requirements, however, may still exist."], "subsections": []}, {"section_title": "Senate", "paragraphs": ["In the Senate, the Banking, Housing, and Urban Affairs Committee in the 116 th Congress requires that at least 67 Senators cosponsor any Congressional Gold Medal bill before being considered by the committee. This committee rule presumably does not formally preclude committee consideration of a House bill referred to it. The committee rule also does not prevent the Senate from considering or passing gold medal legislation. Referred bills may be brought to the floor without committee consideration; in other cases, a bill may avoid being referred to committee at all. In current practice, many enacted gold medal bills receive no formal committee consideration. Rather, the Senate often discharges the committee of the bill by unanimous consent; however, it appears that this discharge practice only occurs after the requisite number of cosponsors sign on to a Senate bill. "], "subsections": []}, {"section_title": "Other Statutory Limitations", "paragraphs": ["Although Congress has approved legislation stipulating requirements for numerous other awards and decorations, there are no permanent statutory provisions specifically relating to the creation of Congressional Gold Medals. When a Congressional Gold Medal has been deemed appropriate, Congress has, by legislative action, provided for the creation of a medal on an ad hoc basis. Additionally, there is no statutory limit on the number of Congressional Gold Medals that may be struck in a given year."], "subsections": []}]}, {"section_title": "Sample Congressional Gold Medal Language", "paragraphs": ["Congressional Gold Medal legislation generally has certain features, including", "findings that summarize the subject's history and importance; specifications for awarding the medal; instructions, if any, for the medal's design and striking; permission to mint and sell duplicates; and certification that medals are minted pursuant to existing requirements for national medals (5 U.S.C. \u00a75111)."], "subsections": [{"section_title": "Findings", "paragraphs": ["Congressional Gold Medal legislation typically includes a section of findings. These often include historical facts about the people or groups being awarded the medal. For example, the legislation to authorize the Congressional Gold Medal to the World War II members of the \"Doolittle Tokyo Raiders\" stated the following:"], "subsections": []}, {"section_title": "Medal Presentation, Design, and Striking", "paragraphs": ["Congressional Gold Medal legislation typically includes a section that provides details on the presentation, design, and striking of the medal. For example, the legislation to authorize the Congressional Gold Medal to the Foot Soldiers who participated in Bloody Sunday, Turnaround Tuesday, or the final Selma to Montgomery Voting Rights March in March of 1965 stated the following:", "Additionally, this section can contain specific instructions to the Smithsonian, when it is the recipient of the physical gold medal, on its display and availability to be loaned to other institutions. For example, the legislation authorizing the American Fighter Aces Congressional Gold Medal stated the following:"], "subsections": []}, {"section_title": "Duplicate Medals", "paragraphs": ["Gold medal legislation also generally authorizes the Secretary of the Treasury to strike and sell duplicate medals in bronze. The duplicates are generally sold in two sizes: 1.5 inches and 3 inches. Duplicates are sold at a price which allows the U.S. Mint to cover the cost of striking the gold medal. For example, legislation authorizing the 65 th Infantry Regiment, known as the Borinqueneers, Congressional Gold Medal stated the following:"], "subsections": []}, {"section_title": "Status of Medals", "paragraphs": ["Gold medal legislation generally contains a statement that these awards are considered as national medals for the purpose of the U.S. Mint's statutory requirements for producing medals. For example, legislation authorizing the Montford Point Marines Congressional Gold Medal stated the following:"], "subsections": []}, {"section_title": "Authorization of Appropriations; Proceeds", "paragraphs": ["In some cases, authorizing legislation includes language authorizing appropriations for a Congressional Gold Medal. In these examples, Congress has authorized a specific sum from the United States Mint Public Enterprise Fund to pay for the cost of the medal. In cases where the authorization of appropriations is provided, a provision requiring that proceeds from the sale of duplicates be deposited in the same Fund is generally included. For example, legislation authorizing the Women Airforce Service Pilots Congressional Gold Medal stated the following:"], "subsections": []}]}, {"section_title": "Design of Medals", "paragraphs": ["Congressional Gold Medal designs vary for each issuance. In general, the authorizing legislation provides that the Secretary of the Treasury \"shall strike a gold medal with suitable emblems, devices, and inscriptions, to be determined by the Secretary.\" When designing a Congressional Gold Medal, the Secretary consults with the Citizens Coinage Advisory Commission (CCAC) and the U.S. Commission of Fine Arts (CFA) before determining the final design."], "subsections": [{"section_title": "Citizens Coinage Advisory Commission", "paragraphs": ["Established by P.L. 108-15 , the CCAC advises the Secretary of the Treasury on theme and design of all U.S. coins and medals. For Congressional Gold Medals, the CCAC advises the Secretary \"on any theme or design proposals relating to ... Congressional Gold Medals.\"", "The CCAC consists of 11 members appointed by the Secretary of the Treasury, with four persons appointed upon the recommendation of the congressional leadership (one each by the Speaker of the House, the House minority leader, the Senate majority leader, and the Senate minority leader). The CCAC meets several times each year to consider design suggestions for coins and medals. For each coin considered, the CCAC provides advice to the Secretary \"on thematic, technical, and design issues related to the production of coins.\" Recommendations are then published to the committee's website, at http://www.ccac.gov ."], "subsections": []}, {"section_title": "U.S. Commission of Fine Arts", "paragraphs": ["In tandem with recommendations received from the CCAC, the U.S. Mint also seeks a recommendation from the U.S. Commission of Fine Arts. Established in 1910, the CFA advises \"upon the location of statues, fountains, and monuments in the public squares, streets, and parks in the District of Columbia; the selection of models for statues, fountains, and monuments erected under the authority of the Federal Government; the selection of artists; and questions of art generally when required to do so by the President or a committee of Congress.\" This includes review of commemorative coins when they are presented by the U.S. Mint and the issuance of recommendations for a coin's design.", "For example, in March 2014, the U.S. Mint presented several alternative designs for the First Special Service Force Congressional Gold Medal. In a letter to the U.S. Mint, the CFA provided recommendations on the design for the gold medal. CFA's letter stated the following:"], "subsections": []}, {"section_title": "U.S. Mint", "paragraphs": ["After receiving advice from the CCAC and the CFA, the Secretary of the Treasury, through the U.S. Mint, finalizes the coin's design and schedules it for production. Figure 1 shows the final design of two Congressional Gold Medals: the New Frontier Gold Medal for Neil Armstrong, Michael Collins, Buzz Aldrin, and John Glenn; and the Jack Nicklaus Gold Medal."], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": ["As Members of Congress contemplate introducing legislation, and the House or the Senate potentially consider Congressional Gold Medal measures, there are several issues that could be considered. These can be divided into issues for individual Members of Congress with respect to individual Congressional Gold Medals, and issues for Congress as an institution. Individual issues include choices Members may make about which people or groups might be honored and whether specific design elements might be specified statutorily. Institutional issues might include committee or chamber rules on the consideration of Congressional Gold Medals and creating standards for the issuance of gold medals."], "subsections": [{"section_title": "Individual Considerations", "paragraphs": [], "subsections": [{"section_title": "Individuals and Groups Honored", "paragraphs": ["Some Congressional Gold Medals have honored individuals (e.g., Arnold Palmer, Muhammad Yunus), some discrete groups of individuals (e.g., General of the Army George Catlett Marshall and Fleet Admiral Ernest Joseph King, Ruth and Billy Graham), and some larger groups (e.g., military units such as Women Airforce Service Pilots [\"WASP\"], Monuments Men). In choosing whom or what to recognize, Members of Congress generally evaluate whether they believe that the individual's or group's activities merit recognition by Congress. Congressional Gold Medals are \"the highest civilian honor award program ... [to] honor national achievement in patriotic, humanitarian, and artistic endeavors.\" There are no specific criteria to determine whether or not an individual or group meets those lofty goals. Instead, each individual or group is judged on their merits by Congress should the legislation be considered."], "subsections": []}, {"section_title": "Specification of Design Elements", "paragraphs": ["Congressional Gold Medal authorizations generally do not specify design elements. Instead, they direct the Secretary of the Treasury to \"strike a gold medal with suitable emblems, devices, and inscriptions to be determined by the Secretary.\" Should Congress want to specify particular design elements, they might be included in the authorizing legislation. This would provide the Secretary of the Treasury with congressional intent on what should be incorporated into the gold medal design. Similar statutory specificity is sometimes included in commemorative coin legislation. Such specification, however, could serve to limit design choices for the gold medal and might alter the cost structure of striking the award, if the required element diverges from standard practices."], "subsections": []}, {"section_title": "Location of Medal Awarded to Groups", "paragraphs": ["Congressional Gold Medal legislation for groups generally provides that only a single gold medal is struck and specifies where it will be located after it is formally awarded. In many cases, the gold medal is given to the Smithsonian for appropriate display and where it can be made available for research. In other cases, the gold medal is provided to an organization that represents the honored group. Since most gold medal legislation contains a provision on the medal's location, a Member of Congress can help determine where the medal will be located."], "subsections": []}]}, {"section_title": "Institutional Consideration", "paragraphs": [], "subsections": [{"section_title": "Requirements for Legislative Considerations", "paragraphs": ["As discussed above under \" Authorizing Congressional Gold Medals ,\" neither the House nor Senate rules provide any restrictions specifically concerning consideration of Congressional Gold Medal legislation on the House or Senate floor. In the 116 th Congress, the Senate Committee on Banking, Housing, and Urban Affairs requires that at least 67 Senators must cosponsor any Senate Congressional Gold Medal bill before being considered by the committee. Currently, the House Financial Services Committee has not adopted any specific rules concerning committee consideration of Congressional Gold Medal legislation, although it has required a minimum number of cosponsors in past Congresses for committee consideration. ", "As demonstrated by the discontinuation of the House Financial Services Committee rule requiring a minimum number of cosponsors for committee gold medal legislation, committee rules can be changed from Congress to Congress. Should the committee want to place requirements on its consideration of gold medal legislation, the Financial Services Committee could readopt its former rule, or something similar. Adopting committee rules to require a minimum number of cosponsors might encourage bill sponsors to build support among Representatives for gold medal bills. Such a minimum requirement, however, could potentially limit the number or type of gold medal bills the committee considers. Since only the Senate Committee on Banking, Housing, and Urban Affairs has a rule that imposes a formal qualification on the potential committee consideration of gold medal legislation, the possible path forward for a bill can be different within each chamber. ", "Should the House, the Senate, or both want to adopt similar language for committee or chamber consideration of gold medal legislation, such language could be incorporated into future committee rules, into House and Senate Rules, or into law. Taking steps to formally codify the gold medal consideration process might provide sponsors with a single process for award consideration, which could make it easier for gold medal bills to meet minimum requirements for consideration across both the House and Senate. Such codification could also limit congressional flexibility and might result in fewer proposals or authorizations to comply with new standards."], "subsections": []}, {"section_title": "Statutory Standards", "paragraphs": ["Currently, there is no statutory limit to the number of Congressional Gold Medals that can be authorized. Should Congress want to place a limit on the number of gold medals awarded, standards could be adopted to provide a maximum number of gold medals authorized in any year or Congress. Congress has previously adopted similar standards for commemorative coins\u2014only two coins may be minted in any given calendar year. ", "Legislation to place a limit on the number of gold medals authorized has previously been introduced and considered in the House. During the 109 th Congress (2005-2006), H.R. 54 passed the House and would have restricted the Secretary of the Treasury from striking \"more than 2 congressional gold medals for presentation ... in any calendar year.\" Introduced by Representative Michael Castle, the stated purpose of the legislation was to \"maintain the prestige of the medal by limiting the number that may be awarded each year,\" and to \"clarify that recipients are individuals and not groups.\" Passage of the measure, he argued, would \"ensure the future integrity and true honor of the award.\" H.R. 54 did not receive further consideration in the Senate.", "While proponents of a limit on the number of gold medals issued might make arguments similar to those made by Representative Castle, opponents believe that Congress should reserve the right to authorize as many gold medals as it deems necessary, without consideration of the number struck in any calendar year. Representative Joseph Crowley in opposing the legislation told his House colleagues, \"We are rushing to act on an issue that does not represent a problem.\" \"Who that received this medal in the past,\" he asked, \"was not worthy of it?\" Further, Crowley argued that \"there are occasions when more than one person is justified to receive the medal for their honorable actions in tandem with others.\" He continued by emphasizing that had this bill already been law, \"Congress would not have been able to issue\" a Congressional Gold Medal \"to the Little Rock Nine,\" to \"President and Mrs. Reagan,\" or to \"Martin Luther King and Coretta Scott King.\""], "subsections": []}]}]}, {"section_title": "Concluding Observations", "paragraphs": ["Congressional Gold Medals have long been an important way for Congress to express public gratitude for important historical events and achievements. Congressional Gold Medals, which have been issued since the American Revolution, are \"the highest civilian honor award program ... [to] honor national achievement in patriotic, humanitarian, and artistic endeavors.\" In recent years, the number of gold medals awarded has \"soared from four or five per decade for most of its history to an average of almost twenty in the 1980s, 1990s, and 2000s.\"", "Each Congress, legislation to award Congressional Gold Medals is introduced. In the 113 th Congress (2013-2014), 52 bills were introduced, 34 in the House and 18 in the Senate, to award a gold medal. In the 114 th Congress (2015-2016), 52 bills were introduced, 38 in the House and 14 in the Senate. In the 115 th Congress (2017-2018), 55 bills were introduced, 33 in the House and 22 in the Senate.", "Based on the number of measures offered in both chambers, some Members of Congress clearly feel it is important to recognize individuals and groups for their patriotic, humanitarian, and artistic achievements. Several considerations appear important when Members decide to introduce gold medal legislation. These include who should be honored, how many medals should be awarded in a given Congress, and whether specific design elements should be prescribed for the medal design. As Congress continues to consider legislation to award future gold medals, these considerations and others will likely be important factors for issuing the award."], "subsections": [{"section_title": "Appendix. Summary of Congressional Gold Medals Awarded: 1776-2018", "paragraphs": [], "subsections": []}]}]}}
{"id": "R44452", "title": "The Selective Service System and Draft Registration: Issues for Congress", "released_date": "2019-02-27T00:00:00", "summary": ["The Military Selective Service Act (MSSA), first enacted as the Selective Service Act of 1948, provides the statutory authority for the federal government to maintain a Selective Service System (SSS) as an independent federal agency responsible for delivering appropriately qualified civilian men for induction into the Armed Forces of the United States as authorized by Congress. The annual budget for the agency is just under $23 million. One of the SSS's main functions is to maintain a database of registrants in case of a draft. The agency stores approximately 78 million records in order to verify registration status and eligibility for certain benefits that require certification of registration for eligibility. The SSS has a staff of about 124 full-time employees, complemented by a corps of volunteers and military reservists.", "The MSSA requires most males between the ages of 18 and 26 who are citizens or residents of the United States to register with Selective Service. Women in the United States have never been required to register for the draft. Men who fail to register may be subject to criminal penalties, loss of eligibility for certain federal or state employment opportunities and education benefits, and denial of security clearances. Documented or undocumented immigrants who fail to register may not be able to obtain United States citizenship. Registration compliance rates were 92% in calendar year 2016. While individuals may still register at U.S. post offices, the SSS attributes high compliance rates to a system of automatic electronic registration supported by state legislation and interagency cooperation.", "The MSSA does not currently authorize the use of a draft for induction into the Armed Forces. When the draft has been implemented, it has met some public resistance. Such resistance to the draft drives much of the opposition toward maintaining the SSS and the registration requirement. Even some who are not opposed to the government's use of conscription in a time of national need are opposed to maintaining the current SSS agency infrastructure. They argue that a stand-alone agency is unnecessary and expensive and that there are a number of alternatives that could more effectively and efficiently enable the country to reestablish conscription, if necessary. Others counter that, at the cost of $23 million annually, maintaining the SSS is a relatively inexpensive insurance policy should the draft need to be quickly reinstated. They also argue that maintaining the SSS sends a signal to potential adversaries that the United States is willing to draw on its full national resources for armed conflict if necessary.", "Some are concerned that the registration requirements are inequitable, arguing that it is unfair to men that women can voluntarily serve in all military occupations but are exempt from the registration requirement and the prospect of being drafted. In addition, some have raised concerns about the statutory penalties for failing to register and whether these penalties are more likely to be levied on vulnerable groups. Some contend that Congress should amend MSSA and associated statute to remove penalties for failing to register. Others argue that weakening or removing penalties would cause registration compliance rates to fall to unacceptably low levels. In response to these issues, Congress has established a National Commission on Military, National, and Public Service to provide research support and recommendations on the future of the SSS."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["Congress appropriates approximately $23 million annually to maintain the Selective Service agency. The United States has not used conscription to fill manpower requirements for over four decades; however, the Selective Service System and the requirement for young men to register for the draft remain today. Men who fail to register are subject to penalties in the form of lost benefits and criminal action. Some have questioned the need to maintain this agency and the registration requirements. Others have questioned whether the current requirements for registration are fair and equitable.", "This report is intended to provide Congress with information about how the Military Selective Service Act (MSSA), the Selective Service System (SSS), and associated requirements for registration have evolved over time. It explains why the United States developed the SSS, what the system looks like today, how constituents are affected by the MSSA requirements, and what the options and considerations may be for the future of the Selective Service. ", "The first section of the report provides background and history on the Military Selective Service Act, the Selective Service System, and the implementation of the draft in the United States. The second section discusses statutory registration requirements, processes for registering, and penalties for failing to register. The third section discusses the current organization, roles, and resourcing of the Selective Service System. The final section discusses policy options and consideration for Congress for the future of the MSSA and the Selective Service System.", "This report does not discuss the state of the all-volunteer force or whether it is adequate to meet our nation's current or future manpower needs. In addition, it will not provide an analysis of other options for military manpower resourcing such as universal military service or universal military training. It also does not discuss the history of the draft and draft planning for health service workers. Finally, this report does not evaluate whether the SSS, as currently structured, is adequately resourced and organized to perform its statutory mission. These questions and others will be reviewed by the National Commission on Military, National, and Public Service established by the National Defense Authorization Act (NDAA) for Fiscal Year 2017 ( P.L. 114-328 )."], "subsections": []}, {"section_title": "Background", "paragraphs": ["The United States has used federal conscription at various times since the Civil War era, primarily in times of war, but also during peacetime in the aftermath of World War II. When first adopted in 1863, national conscription was a marked departure from the traditional military policy of the United States, which from the founding era had relied on a small standing force that could be augmented by state militias in times of conflict. Conscription into the Armed Forces of the United States was used just prior to, during, and immediately after World War II (WWII). Reinstated on June 24, 1948, it remained in force until June 30, 1973. ", "Following the adoption of the all-volunteer force (AVF) in 1973, authority to induct new draftees under the Military Selective Service Act ceased. Nevertheless, a standby draft mechanism still exists to furnish manpower above and beyond that provided by the active and reserve components of the Armed Forces in the case of a major military contingency. If the federal government were to reinstate the draft, draftees would likely be required to fill all authorized positions to include casualty replacements, billets in understrength units, and new military units activated to expand the wartime force."], "subsections": [{"section_title": "1863 Enrollment Act and Civil War Conscription", "paragraphs": ["During the Civil War, due to high demand for military manpower, weaknesses in the system for calling up state militia units, and an insufficient number of volunteers for active federal service, President Abraham Lincoln signed the 1863 Enrollment Act. This marked the first instance of the federal government calling individuals into compulsory federal service through conscription. All male citizens between the ages of 20 and 45 who were capable of bearing arms were liable to be drafted. The law allowed exemptions for dependency and employment in official positions. The Enrollment Act also established a national Provost Marshal Bureau, led by a provost marshal general and was responsible for enforcing the draft. Under the act, the President had authority to establish enrollment districts and to appoint a provost marshal to each district to serve under the direction of the Secretary of War in a separate bureau under the War Department. The provost marshal general was responsible for establishing a district board for processing enrollments and was given authority under the law to make rules and regulations for the operation of the boards and to arrest draft dodgers and deserters. Government agents went door-to-door to enroll individuals, followed by a lottery in each congressional district based on district quotas.", "Some observers criticized the Enrollment Act as favoring the wealthiest citizens because it allowed for either the purchase of a substitute who would serve in the draftee's place or payment by the draftee of a fee up to $300. In addition, volunteers were offered bounties by both the federal government and some local communities. Under this system, fraud and desertions were common. Enforcement of the draft also incited rioting and violence in many cities across the United States, most famously in New York City. On July 13, 1863, the intended date of the second draft drawing in New York City, an angry mob attacked the assistant Ninth District provost marshal's office, smashing the lottery selection wheel and setting the building on fire. Several days of rioting and violence ensued until federal troops were called in to restore order. The draft call was suspended in New York City during the rioting and was not resumed until August 19, 1863. ", "The total number of men that served in the Union forces during the course of the war was 2,690,401. The number drafted was 255,373. Of the total draftees, 86,724 avoided military service by the payment of commutation, and 117,986 furnished substitutes. Volunteerism during this war was likely driven in part by the bounty system."], "subsections": []}, {"section_title": "Selective Service Act of 1917 and World War I Conscription", "paragraphs": ["After the Civil War, the federal government did not use conscription again until World War I (WWI). By then a new concept for a draft system termed \"Selective Service\" had been developed that would apportion requirements for manpower to the states and through the states to individual counties. By 1915, Europe was in all-out war; however, the United States only had a small volunteer Army of approximately 100,000 men. On April 2, 1917, President Woodrow Wilson asked Congress for a declaration of war, and on May 18, 1917, he signed an act commonly known as the Selective Service Act of 1917 into law. This new law allowed the President to draft the National Guard into federal service and made all male citizens between the ages of 21 and 31 liable for the draft. On July 15, 1917, Congress enacted a provision that all conscripted persons would be released from compulsory service within four months of a presidential proclamation of peace. In 1918, Congress extended the eligible draft age to include all males between the ages of 18 and 45. World War I was the first instance of conscription of United States citizens for overseas service.", "A key aspect of the Selective Service Act of 1917 was that it allowed the federal government to select individuals from a pool of registrants for federal service. Unlike the Civil War, a shortage of volunteers was not the primary concern in enacting this leg islation. The selective aspects of the WWI draft law were driven by concerns that indiscriminate volunteerism could adversely affect the domestic economy and industrial base. In support of the selective service law, Senator William M. Calder of New York said, \"under a volunteer system, there is no way of preventing men from leaving industries and crippling resources that are just as important as the army itself.\" ", "In contrast to the Civil War draft, the Selective Service Act of 1917 did not allow for the furnishing of substitutes or bounties for enlistment. It also provided for decentralized administration through local and district draft boards that were responsible for registering and classifying men, and calling registrants into service. The law specified that the President would appoint boards consisting of civilian members \"not connected with the Military Establishment.\" Over 4,600 such boards were established to hear and decide on claims for exemptions. The provost marshal general, at the time Major General Enoch Crowder, oversaw the operation of these boards. ", "The first draft lottery was held on July 20, 1917. Out of the 24.2 million that registered for the draft in WWI, 2.8 million were eventually inducted. While the law did not prohibit volunteers, the implementation of the selective service system alongside a volunteer system became too complex and the Army discontinued accepting volunteer enlistees by December 15, 1917. By 1919, at the end of the war, the provost marshal general was relieved from his duties, all registration activities were terminated, and all local and district boards were closed. In 1936, the Secretaries of War and the Navy created the Joint Army-Navy Selective Service Committee (JANSSC) to manage emergency mobilization planning. The committee was headed by Army Major Lewis B. Hershey.", "Between WWI and WWII, the Armed Forces shrank in numbers due to both treaty commitments and public attitudes toward a large standing force. In the interwar period, two opposing movements emerged. Some were in support of legislative provisions that would empower the President to conscript men for military service upon a declaration of war, and some called for a universal draft, universal military training, or broader authorities to conscript civilian labor in times of both war and peace. Others proposed provisions that would require a national referendum on any future use of conscription, or would forbid conscripts from serving outside the territorial borders of the United States. "], "subsections": []}, {"section_title": "The Selective Training and Service Act and World War II", "paragraphs": ["In 1940, Europe was already at war, and despite the neutrality of the United States at the time, some in Congress argued that the United States could not continue with a peacetime force while other nations were mobilizing on a massive scale. In June of 1940, President Franklin D. Roosevelt announced that he would recommend a program of universal compulsory government service for American youth (men and women). A few days later a conscription bill, modeled on the Selective Service Act of 1917, was sponsored by Senator Edward Burke and Representative James Wadsworth in their respective chambers. The bill garnered support by senior Army leaders, who expressed concerns about the ability to recruit a sufficient number of volunteers necessary to fight a major war. Some in Congress opposed to the bill argued the following:", "Regimentation of American life as provided for by the Burke-Wadsworth bill in peacetime is abhorrent to the ideals of patriotic Americans and is utterly repugnant to American democracy and American traditions ... no proof or evidence was offered to indicate that the personnel needs of the Army and Navy cannot be obtained on a voluntary basis.", "The conscription bill became the Selective Training and Service Act, and was signed into law on September 16, 1940, by Franklin D. Roosevelt. The act was the first instance of peacetime conscription in the United States and required men between aged 21 through 35 to register with local draft boards. The law required a 12-month training period for those inducted, at which time the inductees would be transferred to a reserve component of the Armed Forces for 10 years. Criminal penalties for failing to comply with registration or other duties under this act included \"imprisonment of not more than five years or a fine of not more than $10,000, or by both such fine and imprisonment.\"", "The act also gave the President the authority to establish a Selective Service System, and to appoint a Director of the Selective Service with oversight of local civilian boards. Because the image of civilian leadership was deemed important during a time of peace, in 1940 the President initially appointed Dr. Clarence Dykstra as Director of the Selective Service while also retaining his position as president of the University of Wisconsin. Due to poor health Dykstra never took up his position as Director of Selective Service. In July of 1941, the JANSSC that had been established in the interwar period became the new Selective Service headquarters and Colonel Lewis B. Hershey was appointed as the Director, a position he held until 1970, retiring with the rank of Lieutenant General. ", "In terms of the implementation of the Selective Service System, there was an emphasis on establishing an equitable lottery system administered by decentralized local draft boards as was deemed a successful approach during WWI: ", "The Selective Training and Service Act of 1940 is based on the principle that the obligation and privileges of military training and service should be shared generally in accordance with a fair and just system of compulsory military training and service.... The public expected that the lottery under the new law would be conducted as the lottery of 1917-1918 was conducted, and those charged with the administration of the Selective Service felt likewise. ", "The 6,442 district boards assigned a number from 1 to 7,836 to each registrant in their district. On October 29, 1940, the first draft lottery was held in a similar manner to the WWI draft lottery and draft inductions into the Army began on November 18, 1940. The lottery system was used for three groups of registrants, then abandoned in 1942 and not used again for the draft until 1969 during the Vietnam conflict. In the interim, draftees were inducted by local boards based on required quotas, classification, age (oldest first), and order of precedence as determined by contemporary policy.", "Although some complaints arose over inequalities and inconsistencies in the draft administration, a Gallup poll conducted in 1941 found that 93% of those polled thought the draft had been handled fairly in their community. Volunteers were allowed to serve; however, approximately 10 million of the 16 million servicemembers who served during WWII were draftees."], "subsections": [{"section_title": "Consideration of Universal Compulsory Service", "paragraphs": ["Although the Selective Training and Service Act was set to expire in 1945, at the time of drafting, some felt that the emergency conscription program should evolve into a permanent system of universal military training. In testimony before the House Appropriations Committee on June 5, 1941, General Marshall stated", "I believe that Selective Service provides the only practical and economical method of maintaining the military force that we inevitably are going to be required to have in the future, and I think, with all my heart, that Selective Service is a necessity to the maintenance of a true democracy.", "These sentiments continued at the end of the WWII, and there was a push by some to maintain compulsory military training or another program of postwar conscription. In 1945, the congressional Committee on Postwar Military Policy held a series of open hearings on compulsory military training. Those in favor of maintaining some form of conscription argued that it would provide a deterrent to future \"Hitlers and Hirohitos\" as well as build the health and character of American youth. Those opposed contended that conscription was antithetical to democratic ideals, was an inefficient mechanism for building force structure, and led to war, international distrust, and profiteering. "], "subsections": []}]}, {"section_title": "Post-World War II, the Selective Service Act of 1948", "paragraphs": ["Congress extended the Selective Training and Service Act in 1945 and 1946. In 1947, Congress repealed the act and all functions and responsibilities of the Selective Service System were transferred to the Office of Selective Service Records. This office, by law, had a limited mandate for knowledge preservation, and maintenance and storage of individual records. This restructuring essentially put the Selective Service System into a deep standby mode. ", "By 1948, the military had shrunk in size to less than 1.5 million from a peak of 12 million in 1945. Concerned about lagging recruiting efforts and the rising power of the Soviet Union, Congress authorized reinstatement of the draft in the Selective Service Act of 1948, which was signed into law by President Truman on June 24, 1948. The act was similar to previous acts authorizing the Selective Service System. It established registration requirements for males ages 19 to 26, and the same criminal penalties for fraudulent registration or evasion. It also dissolved the Office of Selective Service Records and transferred its responsibilities back to the newly established Selective Service System as an independent agency of the federal government. Under this act, the President had authority to appoint state directors of the Selective Service System. It also provided the authority to call National Guard and Reserve personnel into active duty to support the administration of state and national headquarters. "], "subsections": []}, {"section_title": "Korean War and the Universal Military Training and Service Act of 1951", "paragraphs": ["The Selective Service Act of 1948 was set to expire on June 24, 1950. Due to budget constraints and absence of an immediate threat to national security, between 1948 and 1949 conscription was only used to fill recruiting shortfalls. On June 25, 1950, war broke out between North and South Korea. Although a bill to extend the Selective Service Act of 1948 was already in conference, the Senate rushed to approve the bill on June 28 and it was signed by the President on June 30, 1950. The following year, Congress renamed the act the Universal Military Training and Service Act of 1951. The act extended the draft until July 1, 1955, and also lowered the registration age to 18. As the new name suggested, the law also contained a clause that would have obligated all eligible males to perform 12 months of military service and training within a National Security Training Corps if amended by future legislation (it was never amended). ", "The act did not alter the structure or functions of the SSS; however, it did require the Director to submit an annual report to Congress on", "the number of persons registered, the number of persons inducted, and the number of deferments granted and the basis for them.", "The United States inducted approximately 1.5 million men into the military (one-quarter of the total uniformed servicemembers) under this act in support of the Korean conflict. A draft lottery was not used in this era, rather, the Department of Defense issued draft calls, and quotas were issued to local boards. The local boards would then fill their quotas with those classified as \"1-A\", or \"eligible for military service\" by precedence as determined by policy. Public concerns with the draft at this time were equitable implementation of the draft due to the broad availability of deferments for what some saw as privileged groups. Others expressed concerns about the potential disruption of citizens' lives. ", "Between 1950 and 1964 Congress repeatedly extended the Universal Military Training and Service Act in four-year periods with minor amendments. During this time, volunteers made up approximately two-thirds of the total military force with the remainder supplemented through inductions\u2014with some limited exceptions, the Navy, Air Force, and Marines relied on volunteers almost entirely. For example, monthly draft calls in 1959 were for approximately 9,000 men out of an eligible population of about 2.2 million."], "subsections": []}, {"section_title": "The Vietnam War and Proposals for Draft Reform", "paragraphs": ["In 1964, when America became involved militarily in Vietnam, conscription was again used to mobilize manpower and augment the volunteer force. Among the criticisms of the draft system during this period were that it was inequitable and discriminatory since the chance of being drafted varied by state, by local community, and by one's economic status. In the late 1960s, public acceptance of the draft began to erode for the following reasons, inter alia : ", "Opposition to the war in Vietnam. The U.S. Army's desire for change due to discipline problems among some Vietnam draftees. Belief that the state did not have a right to impose military service on young men without consent. Belief that the draft was an unfair \"tax\" being imposed only on young men in their late teens and twenties. Perception of some observers that the draft placed an unfair burden on underprivileged members of society. Demographic change increasing the size of the eligible population for military service relative to the needs of the military. Estimations that an all-volunteer force could be fielded within acceptable budget levels.", "In response to some of these concerns and associated political pressures, President Lyndon B. Johnson issued Executive Order 11289 on July 2, 1966, establishing the National Advisory Commission on Selective Service headed by Burke Marshall. President Johnson instructed the commission to consider past, present, and prospective functioning of the Selective Service System and other systems of national service, taking into account the following factors:", "Fairness to all citizens, Military manpower requirements, Minimizing uncertainty and interference with individuals' careers and educations, National social, economic, and employment goals, and Budgetary and administrative considerations.", "The commission examined a number of potential options from requiring everyone to serve to elimination of all compulsory service. The commission's final report, In Pursuit of Equity: Who Serves When not all Serve? , was delivered to the President in February of 1967 at the time when the Selective Service law was up for renewal. The commission recommended continuing conscription but making significant changes to the Selective Service System to \"assure equal treatment for those in like circumstances.\" Among these recommended changes were (1) adopting an impartial and random selection process and order of call, (2) consolidating the local boards under centralized administration with uniform policies for classification, deferment, and exemptions, and (3) ensuring that composition of local boards was representative of the population that they served. ", "In parallel with the Presidential Commission's review, the House Armed Services Committee chartered their own review with a civilian advisory panel chaired by retired Army General Mark Clark. The Clark panel also recommended against shifting to an all-volunteer force but disagreed on the establishment of a lottery.", "In 1967, Congress extended the SSS through July 1, 1971, under the renamed Military Selective Service Act of 1967 (henceforth MSSA). While the Administration had pushed for comprehensive draft reform based on the commission's recommendations, the bill contained few of President Lyndon Johnson's proposals. In particular, the bill, as enacted, prohibited the President from establishing a random system of selection (draft lottery) without congressional approval.", "In 1969, President Richard M. Nixon called on Congress to provide the authority to institute the draft lottery system. In response, Congress amended the 1967 law, repealing the prohibition on the President's authority. On the same day, President Nixon signed Executive Order 11497 establishing the order of call for the draft lottery for men aged 19 through 25 at the end of calendar year 1969. While the draft remained contentious, in 1971 the induction authority under the MSSA was again extended through 1973. In response to concerns regarding the composition of local boards, the bill stated,", "The President is requested to appoint the membership of each local board so that to the maximum extent practicable it is proportionately representative of the race and national origin of those registrants within its district.", "The bill also included a significant pay raise for military members as a first step toward building an all-volunteer force (AVF). "], "subsections": [{"section_title": "The Gates Commission", "paragraphs": ["Two months into President Nixon's first term, he launched the President's Commission on an All-Volunteer Force, which came to be known as the Gates Commission. In its 1970 report, the commission unanimously recommended that \"the nation's best interests will be better served by an all-volunteer force, supported by an effective standby draft, than by a mixed force of volunteers and conscripts.\" The Gates Commission also recommended maintaining a Selective Service System that would be responsible for", "a register of all males who might be conscripted when essential for national security, a system for selection of inductees, specific procedures for the notification, examination, and induction of those to be conscripted, an organization to maintain the register and administer the procedures for induction, and the provision that a standby draft system may be invoked only by resolution of Congress at the request of the President.", "The last draft calls were issued in December 1972 and the statutory authority to induct expired on June 30, 1973. On January 27, 1973, Secretary of Defense Melvin R. Laird announced the end of conscription. The last man to be inducted through the draft entered the Army on June 30, 1973. ", " Table 1 shows the number of inductees and total participants for each major conflict in which the United S tates used the draft and for which data are available. More than half of the participants in WWI and nearly two-thirds of the WWII participants were draftees. About one-quarter of the participants in the Korean and Vietnam conflicts were draftees, however , it should be noted that the possibility of being drafted may have induced higher rates of volunteerism during these later conflicts."], "subsections": []}]}, {"section_title": "All-Volunteer Force (AVF) and a Standby SSS", "paragraphs": ["President Gerald Ford temporarily suspended the registration requirement through Proclamation 4360 (89 Stat. 1255) in April 1975. The MSSA was not repealed, however, and the requirement for the SSS to be ready to provide untrained manpower in a military emergency remained. This proclamation essentially put the SSS into deep standby mode. At the time there were approximately 98 full-time staff operating a pared-down field structure with a national headquarters and nine regional headquarters. In the late 1970s, some were concerned that this \"standby\" system did not have the resources or infrastructure to register, select, classify, and deliver the first inductees within 30 days from the start of an emergency mobilization.", "These concerns became even more salient when, in December 1979, the Soviet Union invaded Afghanistan. In his January 1980 State of the Union address, President Jimmy Carter announced his intention to resume draft registration requirements in the coming year. A Gallup Poll conducted in March 1980 found that 76% were in favor of a registration requirement for young men. Congress responded by providing $13.3 million in appropriations for the Selective Service System on June 25, 1980. President Carter signed Proclamation 4771 on July 2, 1980, reestablishing the requirement for all 18- to 25-year-old males to register for the Selective Service and setting out guidelines for registration. Penalties for failing to register were the same as those first established in the 1940 Selective Training and Service Act (a fine of up to $10,000 and/or a prison term of up to five years). However, unlike in previous draft registration regulations, there was no requirement for men to undergo evaluation and classification for fitness to serve. ", "The new standby SSS had five key components that are still largely in place today:", "A registration process that is reliable and efficient. An automated data processing system that could handle pre- and postmobilization requirements. A system for promulgation and distribution of orders for induction. A claims process that can quickly insure all registrants' rights to due process are protected. A field structure that can support the claims process.", "Supporters of reestablishing the registration requirement for men argued that it would send a message to the Soviet Union that the United States was prepared to act to defend its interests and also that it would cut down the mobilization time in the event of a national emergency. Some argued that registration was not enough, and advocated for a return of peacetime conscription, universal military training, or compulsory national service. ", "Organizations opposed to the reinstatement of registration requirements argued that registration forms were illegal because they required registrants to disclose their Social Security numbers. Others argued that the exemption of women in the draft law was unconstitutional. Carter's proposal to Congress included legislative language that would have given the President the authority to register women. As justification for this proposal, he stated,", "My decision to register women is a recognition of the reality that both women and men are working members of our society. It confirms what is already obvious throughout our society \u2013 that women are now providing all types of skills in every profession. The military should be no exception. [\u2026] There is no distinction possible, on the basis of ability or performance, that would allow me to exclude women from an obligation to register.", "Congress rejected the President's proposal to include women with an explanation under Title VIII of S. Rept. 96-826,", "[T]he starting point for any discussion of the appropriateness of registering women for the draft is the question of the proper role of women in combat. The principle that women should not intentionally and routinely engage in combat is fundamental, and enjoys wide support among our people. It is universally supported by military leaders who have testified before the committee, and forms the linchpin for any analysis of this problem. [\u2026] Current law and policy exclude women from being assigned to combat in our military forces, and the committee reaffirms this policy. The policy precluding the use of women in combat is, in the committee's view, the most important reason for not including women in a registration system.", "In 1981, the Supreme Court heard a challenge to the exception for women to register for Selective Service. In the Rostker v. Goldberg case, the Court held that the practice of only registering men for the draft was constitutional. In the majority opinion, Justice William Rehnquist wrote", "[t]he existence of the combat restrictions clearly indicates the basis for Congress' decision to exempt women from registration. The purpose of registration was to prepare for a draft of combat troops. Since women are excluded from combat, Congress concluded that they would not be needed in the event of a draft, and therefore decided not to register them."], "subsections": []}, {"section_title": "New Penalties for Registration Noncompliance", "paragraphs": ["The first national registration after the reinstatement of the requirement was held in 1980 through registration at local U.S. Post Offices. The registration rate for the 1980 registration was 87% within the two-week registration period and 95% through the fourth month of registrations. In 1973, the registration rates were 77% within 30 days of one's 18 th birthday as required by statute, and 90% through the fourth month. The Government Accountability Office (GAO) estimated that, of the registrations submitted, there was a final accuracy level of 98%.", "Despite initial successes in registration, there was a push by many in Congress and the Administration to maintain public awareness of the requirements and to maintain high compliance rates. On January 21, 1982, President Ronald Reagan authorized a grace period until February 28, 1982, allowing those who had not registered to do so. In 1982, the Department of Justice began prosecution of those men who willfully refused to register for selective service. In the June 1983 SSS semiannual report to Congress, the agency reported that it had referred 341 persons to the Department of Justice for investigation. At the time of the report, there were 11 indictments and 2 convictions. ", "In the same year, there was a movement in Congress to tie eligibility for federal benefits to registration requirements. National Defense Authorization bills for Fiscal Year 1983 were reported to the House and Senate floor without any proposed amendments to the MSSA. However, on May 12, 1982, the bill was amended by Senators Hayakawa and Mattingly on the Senate floor to prohibit young male adults from receiving any federal student assistance under Title IV of the Higher Education Act if they cannot certify they had registered with Selective Service. The Senate passed amendment as drafted by voice vote. Representative Jerry Solom introduced a similar amendment on the House floor. In conference committee, Members added language to direct the Secretary of Education and the Director of Selective Service to jointly develop methods for certifying registration. This provision amending the MSSA was signed into law as part of the FY1983 National Defense Authorization Act with an effective date of July 1, 1983.", "Representative Solomon also led the effort to attach similar language to the Job Training Partnership Act of 1982, which was passed on October 13, 1982. This law prohibited those who failed to register from receiving certain federal job training assistance. Congress repealed the Job Training and Partnership Act and replaced it with the Workforce Investment Act of 1998; however, the statutory language enforcing the MSSA was maintained in the new law.", "In 1985, Congress added a provision to the National Defense Authorization Act for Fiscal Year 1986 that made an individual ineligible for federal civil service appointments if he \"is not registered and knowingly and willfully did not so register before the requirement terminated or became inapplicable to the individual.\" Congress also expressed support for the peacetime registration program as a \"contribution to national security by reducing the time required for full defense mobilization,\" and as sending \"an important signal to our allies and to our potential adversaries of the United States defense commitment.\"", "On November 6, 1986, President Reagan signed into law the Immigration Reform and Control Act. This law required males between the ages of 18 and 26 who are applying for legalization under the act to register for the Selective Service if they have not already done so. In response, the Immigration and Naturalization Service (INS) and the SSS established procedures for registering young men as part of the immigration application process."], "subsections": []}, {"section_title": "Other Legislative Proposals in the Modern Era", "paragraphs": ["Between 1980 and 2019, several Members of Congress proposed a number of legislative changes to the MSSA; however, none have been enacted. Typically, such proposed changes to the MSSA have included one or more of the following options:", "Repeal the entire MSSA. Terminate the registration requirement. Reinstate draft induction authority. Defund the Selective Service System. Require women to register for the draft.", "Other proposed changes would seek to modify SSS record management or registration processes. These options are discussed in more detail later in this report. "], "subsections": []}, {"section_title": "National Commission on Military, National, and Public Service", "paragraphs": ["In the FY2017 NDAA ( P.L. 114-328 ), Congress established a National Commission on Military, National, and Public Service to help consider some of the options for the future of the MSSA. The commission is tasked not only with a review of the military selective service process, but also with proposing \"methods to increase participation in military, national, and other public service, in order to address national security and other public service needs of the Nation.\" The statutory scope of the commission is to review", "(1) The need for a military selective service process, including the continuing need for a mechanism to draft large numbers of replacement combat troops;", "(2) means by which to foster a greater attitude and ethos of service among United States youth, including an increased propensity for military service; ", "(3) the feasibility and advisability of modifying the military selective service process in order to obtain for military, national, and public service individuals with skills (such as medical, dental, and nursing skills, language skills, cyber skills, and science, technology, engineering, and mathematics (STEM) skills) for which the Nation has a critical need, without regard to age or sex; and ", "(4) the feasibility and advisability of including in the military selective service process, as so modified, an eligibility or entitlement for the receipt of one or more Federal benefits (such as educational benefits, subsidized or secured student loans, grants or hiring preferences) specified by the Commission for purposes of the review.", "Section 552 of the FY2017 NDAA also required DOD to prepare a preliminary report on the purpose and utility of the SSS to support the commission's work, to include", "(1) A detailed analysis of the current benefits derived, both directly and indirectly, from the Military Selective Service System, including\u2014 (A) the extent to which mandatory registration benefits military recruiting; (B) the extent to which a national registration capability serves as a deterrent to potential enemies of the United States; and (C) the extent to which expanding registration to include women would impact these benefits. ", "(2) An analysis of the functions currently performed by the Selective Service System that would be assumed by the Department of Defense in the absence of a national registration capability. ", "(3) An analysis of the systems, manpower, and facilities that would be needed by the Department to physically mobilize inductees in the absence of the Selective Service System. ", "(4) An analysis of the feasibility and utility of eliminating the current focus on mass mobilization of primarily combat troops in favor of a system that focuses on mobilization of all military occupational specialties, and the extent to which such a change would impact the need for both male and female inductees. ", "(5) A detailed analysis of the Department's personnel needs in the event of an emergency requiring mass mobilization, including\u2014 (A) a detailed timeline, along with the factors considered in arriving at this timeline, of when the Department would require\u2014 (i) the first inductees to report for service; (ii) the first 100,000 inductees to report for service; and (iii) the first medical personnel to report for service; and (B) an analysis of any additional critical skills that would be needed in the event of a national emergency, and a timeline for when the Department would require the first inductees to report for service. ", "(6) A list of the assumptions used by the Department when conducting its analysis in preparing the report.", "DOD submitted its congressionally mandated report in July 2017. The report noted that the department \"currently has no operational plans that envision mobilization at a level that would require conscription.\" Nevertheless, it acknowledges that, \"the readiness of the underlying systems, infrastructure, and processes to effect [a draft] \u2013 serve as a quiet but important hedge against an unknowable future.\"", "The GAO's report, released in January 2018, noted that DOD's requirements and timeline for mobilization of forces remain unchanged since 1994, despite changes to force structure, capability needs, national security environment, and strategic objectives. In particular, the report authors stated the following:", "DOD provided the personnel requirements and a timeline that was developed in 1994 and that have not been updated since. These requirements state that, in the event of a draft, the first inductees are to report to a Military Entrance Processing Station in 193 days and the first 100,000 inductees would report for service in 210 days. DOD's report states that the all-volunteer force is of adequate size and composition to meet DOD's personnel needs and it has no operational plans that envision mobilization at a level that would require a draft. Officials stated that the personnel requirements and timeline developed in 1994 are still considered realistic. Thus, they did not conduct any additional analysis to update the plans, personnel requirements, or timelines for responding to an emergency requiring mass mobilization.", "The authors stated that the GAO's 2012 recommendation that DOD \"establish a process of periodically reevaluating DOD's requirements for the Selective Service System in light of changing operating environments, threats, and strategic guidance\" remains valid.", "The National Commission on Military, National and Public Service released an interim report on their research findings on January 23, 2019. The report summarizes preliminary findings. With respect to the SSS, the commission is considering options that could", "expand the registration requirement to include women; identify individuals who possess critical skills the nation might need; call for volunteers during times of emergency using the existing system; and, incorporate reasonable changes to identify, evaluate, and protect those who object to military service, but are otherwise willing to serve.", "The commission is scheduled to continue its work through March 2020."], "subsections": []}]}, {"section_title": "Selective Service Registration", "paragraphs": ["Today, nearly all males residing in the United States\u2014U.S. citizens and documented or undocumented immigrant men\u2014are required to register with the Selective Service if they are at least 18 years old and are not yet 26 years old. Those who are required to register must do so within 30 days of their 18 th birthday unless exemptions apply as listed in Table 2 . Men born from March 29, 1957, to December 31, 1959, were never required to register because the registration program was not in effect at the time they turned 18. Individuals are not allowed to register beyond their 26 th birthday. Women are currently not required to register for the Selective Service. Federal regulations state, \" No person who is not required by selective service law or the Proclamation of the President to register shall be registered.\" All of those required to register would be considered \"available for service\" in the case of an emergency mobilization unless they were reclassified by the SSS. "], "subsections": [{"section_title": "Processes for Registration", "paragraphs": ["Almost all Selective Service registrations are completed electronically; however, registration can also be done at U.S. Post Offices and by submission of paper registrations. Most states, four territories, and the District of Columbia (D.C.) have driver's license legislation that provides for automatic Selective Service registration when obtaining a driver's license, driver's permit, or other form of identification from the Department of Motor Vehicles. In FY2017, 42% of all registrations, representing nearly 1 million young men, were conducted electronically through driver's license legislation (see Figure 1 ). ", "The SSS also has interagency agreements for registration. In cooperation with U.S. Citizenship and Immigration Services, immigrant men ages 18 through 25 who are accepted for permanent U.S. residence are registered automatically. In addition, men of registration age who apply for an immigrant visa through the Department of State are also registered. The application form for federal student aid includes a \"register me\" checkbox for those who have not yet registered for the Selective Service, which authorizes the SSS to automatically register those individuals. The SSS reports that approximately 25% of their electronic registrant data come from the Department of Education as part of the student aid application process. The SSS also has existing data-sharing relationships with the DOD and the Department of Labor.", "In FY2017, the SSS reported a 73% compliance rate for the 18-year-old year of birth (YOB) group. Registration compliance rate for the 20 through 25 YOB group was 92% in calendar year 2016, a decrease of 2% from the previous year, but above the SSS goal of 90%. Reasons for noncompliance may include lack of awareness of requirements, or purposeful avoidance. Knowingly failing to register comes with certain penalties including the following: ", "If indicted, imprisonment of not more than five years and/or fine of not more than $10,000 (increased to $250,000 in 1987 by 18 U.S.C. \u00a73571(b)(3)). Ineligibility for federal student aid. Ineligibility for appointment to a position in an executive agency. Ineligibility for federal job training benefits. Potential ineligibility for citizenship (for certain immigrants to the United States). Possible inability to obtain a security clearance.", "In addition, a large number of state legislatures as well as county and city jurisdictions have conditioned eligibility for certain government programs and benefits on SSS registration. ", "Failing to register for the Selective Service, or knowingly counseling, aiding, or abetting another to fail to comply with the MSSA, is considered a felony. Those who fail to register may have their names forwarded to the Department of Justice (DOJ). In FY2017, 184,051 names and addresses of suspected violators were provided to DOJ. In practice, there have been no criminal prosecutions for failing to register since January 1986. At that time the SSS reported a total of 20 indictments with 14 convictions. ", "Other penalties adversely affect the population required to register. For example, California estimated that between 2007 and 2014, young men in that state who failed to register were denied access to more than $99 million in federal and state financial aid and job training benefits.", "There is some relief from penalties for those who fail to register. The MSSA establishes a statute of limitations on criminal prosecutions for evading registration to five years after a fraudulent registration or failure to register, whichever is first. Also, individuals may not be denied federal benefits for failing to register if", "the requirement to register has terminated or become inapplicable to the person; and the person shows by a preponderance of the evidence that the failure of the person to register was not a knowing and willful failure to register.", "Individuals who unknowingly fail to register may ask for reconsideration from the official handling their case and may be required to submit evidence that they were unaware of their requirement to register. "], "subsections": []}]}, {"section_title": "Selective Service System", "paragraphs": ["The Selective Service System is an independent federal agency within the executive branch with headquarters located in Arlington, VA. The agency is currently maintained as an active standby organization. The statutory missions of the SSS are to maintain ", "a complete registration and classification structure capable of immediate operation in the event of a national emergency (including a structure for registration and classification of persons qualified for practice or employment in a health care occupation essential to the maintenance of the Armed Forces), and personnel adequate to reinstitute immediately the full operation of the System, including military reservists who are trained to operate such System and who can be ordered to active duty for such purpose in the event of a national emergency.", "If the SSS were activated with the authority to induct individuals, the agency would be responsible for (1) holding a national draft lottery, (2) contacting registrants who are selected via the lottery, (3) arranging transportation for selectees to Military Entrance Processing Stations (MEPS) for testing and evaluation of fitness to serve, and (4) activating a classification structure that would include area offices, local offices, and appeal boards. Local boards would also evaluate claims for exemption, postponement, or deferments. Those classified as conscientious objectors would be required to serve in a noncombatant or nonmilitary capacity. For those permitted to serve in a nonmilitary capacity, the SSS would be responsible for placing these \"alternative service workers\" with alternate employers and tracking completion of 24 months of their required service."], "subsections": [{"section_title": "Workforce and Organization", "paragraphs": ["The agency's workforce is comprised of full-time career employees, part-time military and civilian personnel, and approximately 11,000 part-time civilian volunteers. In FY2017, the agency had 124 full-time equivalent civilian positions for administration and operations across agency headquarters, the Data Management Center, and three regional headquarters offices. Part-time employees include 56 State Directors representing the 50 states, four territories, the District of Columbia, and New York City. The median GS grade for the agency is GS-11.", "The SSS maintains a list of unpaid volunteers who serve as local, district, and national appeal board members who could be activated to help decide the classification status of men seeking exemptions or deferments in the case of a draft. The Selective Service System also has positions for 175 part-time Reserve Forces Officers (RFOs) representing all branches of the Armed Forces. RFO duties include interviewing Selective Service board member candidates, training board members, participating in readiness exercises, supporting the registration public awareness effort, and maintaining space, equipment, and supplies. "], "subsections": []}, {"section_title": "Funding", "paragraphs": ["Congress appropriates funds for the SSS through the Financial Services and General Government Appropriations Act. For FY2018, Congress appropriated $22.9 million, the same as the FY2017 appropriation. The budget request for FY2019 was $26.4 million, an increase of $3.5 million over the FY2018 appropriation. Funding decreased by 10% from FY2012 to FY2013, from just under $25 million to $22 million in FY2013. Since FY2013, funding has remained fairly stable in terms of current dollars, but has decreased in terms of inflation-adjusted (real) dollars. In current dollars, funding for the SSS has been about $25 million since 1980, when the requirement to register was reinstated. In FY1977-FY1979, while the SSS was in \"deep standby\" mode, funding for the agency was between $6 million and $8 million.", "About two-thirds of the agency's annual budget goes to personnel compensation and benefits, 11% of which is Reserve Force Officer training pay and allowances. Government and commercial agency contracts and services accounted for 11% ($42.4 million) of total spending. The SSS allocated approximately $1.4 million to postage and express courier services in FY2017, and spent nearly $2 million on software and data processing systems (see Figure 2 )."], "subsections": []}, {"section_title": "Data-Sharing and Data Management", "paragraphs": ["The agency maintains data for registrants until their 85 th birthday at the Data Management Center in Palatine, IL; the center is authorized 48 full-time employees. The purpose of retaining the data for this length of time is to enable SSS to verify eligibility for registered males who apply for certain government employment or benefits. The number of records in the database is approximately 78 million. According to the SSS, this database grows by 2 million to 2.5 million records per year. The information held in this database includes registrants' full name, date of birth, street address, city, state, zip code, and Social Security number. The SSS also maintains a \"Suspected Violator Inventory System,\" which includes data on nonregistrants that the SSS has received through data-sharing agreements. The SSS uses information on this list to reach out to individuals and remind them of their obligation to register.", "Most of the registration and data-sharing is automated. The SSS both provides data to and receives data from other government agencies, including the Department of Labor, the Department of Education, the Department of State, the United States Citizenship and Immigration Services, the Department of Defense, and the Alaska Permanent Fund. Information received from these agencies by the SSS is matched with existing data and if no record exists, one is created. ", "On a monthly basis, SSS provides the Joint Advertising and Market Research Studies (JAMRS, part of DOD) new registrant names, addresses, and date of birth, and a file of individuals identified as deceased. These data are kept for three years by JAMRS and are used by DOD for recruiting purposes. Yearly, SSS provides the names, addresses, and Social Security numbers of individuals ages 18 through 25 to the U.S. Census Bureau for its intercensus estimate program. The Census Bureau keeps these data for two years. Annually, the SSS also sends the Department of Justice a list of individuals who are required to register, but have failed to do so.", "Men are required to update the Selective Service within 10 days when their address changes until January 1 of the year that they turn 26 years old. Those who register at 18 years old are likely to move at least once, if not a number of times, before their 26 th birthday. For example, a college-bound 18-year-old may move away from their parents' home to university housing, then into an off-campus apartment, and into a new home after graduation. The SSS updates addresses in its database using information from other agencies and self-reported information from individuals."], "subsections": []}]}, {"section_title": "What are Some Options for the Future of the Selective Service System?", "paragraphs": ["Although Congress has amended the MSSA a number of times, some of its main tenets\u2014the preservation of a peacetime selective service agency and a registration requirement\u2014have remained much the same since the mid-20 th century. The future of the Selective Service System is a concern for many in Congress. The registration requirements and associated penalties affect young men in every congressional district. At the same time, some see the preservation of the SSS as an important component of national security and emergency preparedness. Others have suggested that the MSSA is no longer necessary and should be repealed. Still others have suggested amendments to the MSSA to address issues of equity, efficiency, and cost."], "subsections": [{"section_title": "Arguments For and Against Repeal of MSSA", "paragraphs": ["Some form of selective service legislation has been in effect almost continuously since 1940. Repealing the MSSA and associated statute would dismantle the SSS agency infrastructure and would remove the registration requirement with its associated penalties. Efforts to repeal the Selective Service Act have been repeatedly introduced in Congress, and repeal is popular among many advocacy groups and defense scholars. ", "Those who would like to disband the SSS question whether the agency is still necessary in the modern-day context. A return to the draft is unpopular with a majority of the American public. Some argue that there is a low likelihood of the draft ever being reinstated. Even in the face of nearly a decade of conflict in Iraq and Afghanistan, DOD has maintained its ability to recruit and retain a professional volunteer force without resorting to conscription. The nature of warfare has shifted in such a way that the United States would not likely need to mobilize manpower at the rates seen in the 20 th century. Even if such high mobilization rates were needed, some question whether the Armed Forces would have the capacity and infrastructure to rapidly absorb the large numbers of untrained personnel that a draft would provide. DOD has reported that the Military Entry Processing Command (MEPCOM) can process approximately 18,000 registrants per day. These new accessions would then be sent to training centers/duty stations as identified by the Office of the Secretary of Defense.", "Some analysts have suggested that a draft, if implemented, would be an inefficient use of labor, as it would \"indiscriminately compel employment in the military regardless of an individual's skills where that individual could have much greater value to our society elsewhere.\" In addition, when conscription has been used, it has generally provided a lower-quality force in comparison with today's all-volunteer force. Others, including civil rights advocacy groups, contend that the registration requirement and conscription are an invasion of civil liberty.", "Those who advocate for suspension of all SSS activity contend that the SSS infrastructure and registrant databases could be reconstructed in due time if the need arose. In the short term, additional manpower needs might be augmented by Delayed Entry Program (DEP) participants, nonprior reservists awaiting training, and other inactive reserve manpower. A reauthorization of the draft might also encourage volunteerism, as choosing a branch of service and occupational specialty might be more preferable to the possibility of being drafted into a less favorable branch and occupation.", "Proponents of maintaining the SSS and registration requirement often cite a few key arguments. First, at approximately $23 million per year, it provides a relatively low-cost \"insurance policy\" against potential future threats that may require national mobilization beyond what could be supported by the all-volunteer force. Second, adversaries of the United States could see the disbanding of the SSS as a potential weakness, thus emboldening existing or potential enemies. Third, the registration requirement is important to maintain connections between the all-volunteer force and civil society by creating an awareness of the military and duty to serve among the nation's youth. Finally, maintaining an all-volunteer force is costly, particularly in times of conflict. Sustaining the AVF over the past decade has stretched DOD's resources. If the United States were to become involved in a sustained large-scale conflict, the compensation and benefits required to incentivize voluntary military participation by a larger segment of the population could be substantial. "], "subsections": []}, {"section_title": "Options for Amending MSSA", "paragraphs": ["Some of the options for amending the MSSA include the following:", "Repealing the registration requirement. Dissolving the SSS agency and transferring certain functions to an existing federal agency. Removing or modifying penalties for failure to register. Requiring women to register. Enhancing SSS data collection."], "subsections": [{"section_title": "Repealing the Peacetime Registration Requirement", "paragraphs": ["Congress could repeal the registration requirement and terminate the existing penalties for failing to register. Removing the registration requirement and the need to verify registration would reduce the activities of the SSS. In this instance, the agency's functions would likely be limited to historical record preservation and maintenance of standby plans and volunteer rolls.", "Some have proposed that if registrant data were needed for a future draft, they might be acquired through existing federal or state government databases. The current SSS database relies heavily on information collected by other federal and state entities for initial inputs, updates, and verification of registrants' address information. However, this data sharing is enabled by existing statutes and agency agreements that if repealed or allowed to lapse might require time and effort to reconstitute. The use of existing government or even commercial databases to develop a list of draft-eligible youth also raises concerns about a fair and equitable draft, as these lists might also exclude some draft-eligible individuals.", "In the case of a national emergency, Congress could enact a new statutory requirement for draft registration, and reconstitute the SSS (if it had been dissolved). A 1997 GAO study found that the time needed to raise the necessary infrastructure might be insufficient to respond to urgent DOD requirements. There may be other challenges in enforcing a new registration requirement in a time of national need. Currently, compliance rates for registration are relatively high, but the probability of implementing a draft is considered to be very low. If the government tried to reintroduce a registration requirement during a time when conscription were more likely, compliance rates could fall and it might be more difficult to build up a database of eligible individuals. On the other hand, some point to the SSS experience in 1980, when the the SSS reported 95% compliance rates within four months of reinstatement of the registration requirement."], "subsections": []}, {"section_title": "Transferring SSS Functions to an Existing Federal Agency", "paragraphs": ["Current law states, \"the Selective Service System should remain administratively independent of any other agency, including the Department of Defense.\" Nevertheless, Congress could amend the MSSA to transfer its functions to an existing federal agency. Such a transfer might take into account not only the SSS's value as a unique data center, but also the staff who comprise the agency at many levels, who would be needed in case of an actual draft. ", "As described previously, this staffing includes regional directors and a pool of civilian volunteers that would serve on local draft boards. This responsibility for maintaining volunteer rolls and training could also be transferred to an existing federal agency, potentially the Department of Defense, and the capability could be augmented with military reserve manpower (as is currently done). The statutory independence of the SSS with respect to DOD and the presence of local civilian boards have historically been viewed as important to the public's perception of a fair and equitable draft. To address this concern, some have proposed that administrative responsibilities could be transferred to DOD while the draft is inactive with the option of transferring all functions back to an independent agency if draft authority were reinstated. ", "Another option might be to transfer the agency and/or its functions to the Department of Homeland Security. There are potential synergies between the SSS and other DHS agencies that would play an active role in a time of national emergency. At least one agency under DHS (the U.S. Citizenship and Immigration Service) already has a role in data sharing with the SSS.", "Some suggest that suspension or transfer of SSS operations could deliver some federal budget savings. In 2012, as mandated by the National Defense Authorization Act for Fiscal Year 2012, the GAO compared the potential costs and savings of operating in a \"deep standby\" mode versus active registration. According to the report, the SSS estimated that operating in a deep standby mode would provide approximately $5 million in savings in the first year with recurring savings of $6.6 million annually. This would be a reduction of about 25% of the current budget. The transfer of SSS functions to an existing agency might have some initial implementation costs but could potentially reduce some of the overhead costs of maintaining an independent agency. "], "subsections": []}, {"section_title": "Amending or Repealing the Penalties for Failing to Register", "paragraphs": ["Finally, some argue that Congress should amend the MSSA and associated statute to remove penalties for failing to register, particularly since only men are subject to the requirements. They argue that ineligibility for federal benefits is most harmful to those with fewer financial resources who also might be least aware of their obligation to register. Nevertheless, weakening or removing penalties could affect registration compliance rates. ", "Alternatively, Congress could amend the penalties to limit the amount of time that one is ineligible for federal benefits following failure to register. For example, under current law, the statute of limitations for criminal penalties is five years following the individual's 26 th birthday or fraudulent registration. The MSSA could be amended to sunset ineligibility after a certain time period, or to reinstate eligibility for federal benefits through some other form of public service."], "subsections": []}, {"section_title": "Changing Registration Requirements to Include Women", "paragraphs": ["Women in the United States have never been required to register for the draft; however, recent DOD policy changes that have opened all military occupational specialties (MOSs) including ground combat positions to women have called into question the Selective Service exemption for women. Although the Trump Administration has not announced a formal position, in 2016, several senior DOD leaders made personal statements in favor of registering women for the draft. Some military leaders have argued that in the case of national need, it would be unwise to exclude 50% of the population from draft eligibility. ", "In a February 2019 decision, the U.S. District Court for the Southern District of Texas granted a summary judgement declaring the male-only registration requirement was unconstitutional; however, the court did not grant injunctive relief blocking the government's current male-only registration policy because the plaintiffs' summary judgment motion seeking declaratory relief failed to request it. As such, the male-only registration policy remains in place. The plaintiffs in this case, the National Coalition for Men and two men of registration age, argue that requiring only men to register constitutes sex discrimination in violation of the Fifth Amendment's equal protection clause. ", "Some women have also pushed for female registration, arguing that women cannot be equal in society as long as they are barred from full participation in all levels of the national security system and thus should be allowed to register for Selective Service. Others believe that equal access to combat jobs should oblige women to take equal responsibility for registering for Selective Service and potential assignments to combat roles should the draft be reinstated. Still others suggest that women should be obliged to enroll in the selective service system but should not be forced into combat roles in the occasion of a draft. Any exemptions for women would raise fairness concerns for men, who would not have the same opportunities to opt out of combat assignments. Making the choice not to serve in combat available to both men and women might make it difficult for the services to function, especially in the event of war or national emergency.", "Those who are opposed to a requirement for women to register suggest that it is not fair and equitable for women to be placed in the same roles as men. They argue that the average woman does not have the same physical capabilities as the average man and thus would have higher rates of injury and a lower probability of survival if forced to serve in direct ground combat roles. Some have countered that the physical standards for assignment to these roles are unlikely to be lowered on the instance of draft mobilization, ensuring that the cadre of men and women would be assigned to those roles at rates proportional to their ability to meet those standards. This approach would prevent both women and men who were unable to meet physical standards for direct ground combat occupations from those assignments. Moreover, opponents of drafting women point out that it would be militarily inefficient to draft thousands of women when only a small percentage would be physically qualified to serve in direct ground combat roles. At the same time, future wars may have requirements for other skills in noncombat fields where the percentage of individuals qualified would not be as variable by gender.", "A requirement for young women to register may have some benefits for DOD in terms of military recruiting. The address data collected by the Selective Service System and shared with DOD currently enhances recruiters' ability to identify potential enlistees and distribute marketing materials to registered young men by mail. DOD estimates that marketing materials included with SSS registration confirmation mailing\u2014or joint leads\u2014generate between 75,000-80,000 male recruiting prospects annually. DOD, through JAMRS, purchases similar databases for information about enlistment-eligible women. Although most registrations are now completed automatically through other interactions with the federal or state government, some contend that the very act of registering would make young women more aware of their citizenship duties, thus broadening the percentage of qualified women considering a career in the military. ", "From certain theological or moral perspectives, some say that it is wrong for women to serve in combat roles, and since a draft would most likely be used to fill positions for combat operations, women should be exempt from registering. These arguments resonate with a segment of the U.S. population, and polling data suggest that if women were required to register for the draft, it would significantly increase public opposition to reinstating the draft and could affect public support for engaging in any conflict that has the potential to escalate beyond the capability of the all-volunteer force. ", "Including women in the registration process may require some additional budget resources for the SSS due to increased administrative processing and public awareness needs. Currently there are about 11 million women ages 18-26 who would be eligible to register under the statutory age requirement. In January of 2016, the SSS reported to the White House Office of Management and Budget that it would need about $8.5 million more for the first year of registering women and slightly less in the following several years."], "subsections": []}, {"section_title": "Enhanced SSS Data Collection", "paragraphs": ["As previously discussed, some have suggested that the future threats that the United States may face may require rapid mobilization of those with specialized skills and experience (e.g., engineers, coders, truck drivers). Congress could expand the current SSS registration system to collect data on degrees, licenses, or other certifications. It could also be extended to include these types of experts outside of the 18- to 26-year-old age range. ", "For example, Norway operates a peacetime conscription registration system in this fashion. All Norwegian citizens in a conscription cohort (men and women, age 17) are required to fill out an online questionnaire that helps to determine their relevant skills, eligibility for, and interest in military service. Based on the results of this questionnaire, the armed forces calls in about 22,000 individuals to \"Session Part 2\" to determine fitness for service through physical and psychological tests. Selection boards choose individuals for a mandatory 12-month service obligation based on the armed forces' needs for various skills. ", "DOD has also pointed to the Health Care Professional Delivery System (HCPDS), currently a congressionally mandated standby plan , as a potential model for a registration/draft system by specialty. The HCPDS, if activated, would require registration of all health care workers between the ages of 20 and 45.", "DOD's 2017 report to Congress considered what a \"mobilization by military occupational specialty (MOS)\" might require. The benefit of establishing an enhanced registration system would be to allow rapid acquisition of personnel with necessary expertise through a targeted draft. This type of data collection could also support targeted recruiting. Should a draft ever be reinstated, available information on individual qualifications could also shorten the timeline needed to train personnel in certain specialties and could support more efficient alternative service matching with employers for those who are conscientious objectors. The challenges with pursuing this option for the SSS would be increased administration costs to maintain, update, and enforce reporting for such a database. In addition, some may oppose such a proposal due to privacy or civil liberty concerns."], "subsections": []}]}]}, {"section_title": "", "paragraphs": [], "subsections": []}]}}
{"id": "R45388", "title": "Burmese Security Forces and Personnel Implicated in Serious Human Rights Abuses and Accountability Options", "released_date": "2019-03-05T00:00:00", "summary": ["At least 17 different reports by United Nations (U.N.) entities and independent human rights organizations have been released containing allegations that certain Burmese security force officers and units committed serious human rights violations dating back to 2011. These reports name nearly 40 individuals and over 100 security units as responsible for such gross human rights violations as murder, torture, rape and other forms of sexual violence, and forced labor. Some of these individuals, including Commander-in-Chief Senior General Min Aung Hlaing, were identified in four or more of the reports. Similarly, some of the security units, in particular Infantry Division 33 and Infantry Division 99, were cited by six or more of the reports. The reports suggest that the commission of human rights abuses by Burma's security forces is pervasive, systematic, and endemic. CRS did not independently verify the credibility of these reports.", "The Trump Administration has labeled the alleged human rights violations as \"ethnic cleansing\" and has imposed \"limited targeted sanctions\" on five Burmese military officers and two military units it considers responsible for serious human rights violations against the Rohingya in Burma's Rakhine State. In August 2018, the State Department released a report summarizing the results of a survey of Rohingya refugees in Bangladesh that concluded that \"the vast majority of Rohingya refugees experienced or directly witnessed extreme violence and the destruction of their homes.\" The report also stated \"that the recent violence in northern Rakhine State was extreme, large-scale, widespread, and seemingly geared toward both terrorizing the population and driving out the Rohingya residents.\" The report, however, did not indicate if the violence constituted genocide, crimes against humanity, and/or war crimes.", "Some Members of Congress and other observers view this response as too limited, and have called on the Trump Administration to take stronger action given the severity of the human rights abuses. The 116th Congress appropriated $3.75 million in the Consolidated Appropriations Act, 2019 (P.L. 116-6) for the documentation of human rights violations against Rohingya and others in Burma. Congress has also placed restrictions and requirements on relations with Burma in previous appropriations legislation to address human rights issues.", "Many of the reports advocate for some form of accountability for the reported human rights violations, including by calling for the U.N. Security Council to refer the alleged human rights violations in Burma to the International Criminal Court (ICC) or an ad hoc international criminal tribunal for investigation and possible prosecution. China and possibly Russia are likely to oppose an ICC referral, and recent statements by President Trump and National Security Advisor John Bolton suggest the United States may also oppose such a referral. The ICC's Pre-Trial Chamber had previously ruled that the ICC's Prosecutor can begin a preliminary investigation of the war crime of forced deportation of the country's Rohingya ethnic minority into neighboring Bangladesh.", "In the interim, the United Nations Independent International Fact-Finding Mission on Myanmar (UNFFM) has recommended that an independent international mechanism (IIM) be established to collect and preserve evidence of alleged acts of genocide, crimes against humanity, and war crimes committed in Burma since 2011. The U.N. Human Rights Council has approved the formation of an IIM, and has urged U.N. Secretary-General Antonio Guterres to appoint \"the staff of the mechanism as expeditiously as possible.\"", "In addition to these measures to support some form of future criminal action against the alleged perpetrators, the UNFFM and others have expressed support for U.N. sanctions against the Burmese military and others considered responsible for the abuses. Some of the reports also call on individual nations to impose sanctions on Burma's military and its government."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Since the onset of the nation's civil war and ensuing military coup d'\u00e9tat in 1962, Burma's military, or Tatmadaw, and its associated security forces, such as the Border Guard Police and the Myanmar Police Force, have been repeatedly accused of committing murder, rape, and torture against the nation's various ethnic minorities. Between 1990 and 2008, Congress passed legislation imposing various sanctions on Burma in part due to the serious human rights violations committed by and/or authorized by the Tatmadaw. Such allegations of intentional, pervasive, and systematic abuses arose again following the forced displacement of over 700,000 Rohingya from Burma's Rakhine State in late 2017, as well as the Tatmadaw's renewed offensive against ethnic armed groups in Kachin, Karen, and Shan States (see map in the Appendix ). ", "The Trump Administration has described that Tatmadaw's assault on the Rohingya as \"ethnic cleansing\" and has applied \"limited targeted sanctions\" on five Tatmadaw officers and two military units. On December 13, 2018, the House of Representatives passed H.Res. 1091 (116 th Congress) by a vote of 394-1, stating \"the atrocities committed against the Rohingya by the Burmese military and security forces since August 2017 constitute crimes against humanity and genocide\" and calling on the Secretary of State to \"determine, based on available evidence, whether the actions by the Burmese military in northern Rakhine State in 2017 constitute crimes against humanity, genocide, or other crimes under international law.\"", "Various organizations\u2014including the United Nations Independent International Fact-Finding Mission in Myanmar (UNFFM), multiple human rights organizations, and the press\u2014have conducted investigations into allegations that Burmese security forces committed serious human rights violations in Burma's seven ethnic states since the Tatmadaw transferred power to a mixed civilian/military government in 2011. These organizations have released at least 17 reports documenting evidence that appears to support some of these allegations, and implicates specific Burmese security personnel and units as being responsible for the abuses. ", "In addition to concluding that Burmese security forces were responsible for serious human rights violations, at least two of these reports maintain that the violations were intentional, premeditated, and systemic. Certain Burmese officers and units also appear in more than one report, and in some cases, are identified as being responsible for human rights violations in more than one ethnic state and/or at different times. ", "The reports vary in their conclusions on the severity of the abuses. Some conclude that certain violations may constitute genocide; in other cases, some describe possible war crimes or crimes against humanity.", "This report compiles a list\u2014in tabular form\u2014of the Burmese security personnel and units that have been identified as responsible for serious human rights violations by one or more the following reports:", "1. Amnesty International, \"All the Civilians Suffer: Conflict, Displacement, and Abuse in Northern Myanmar,\" June 2017; 2. Amnesty International, \"We Will Destroy Everything: Military Responsibility for Crimes Against Humanity in Rakhine State, Myanmar,\" June 2018; 3. Fortify Rights, \"They Gave Them Long Swords: Preparations for Genocide and Crimes Against Humanity against Rohingya Muslims in Rakhine State, Myanmar,\" July 2018; 4. Human Rights Watch, \"All My Body Was Pain: Sexual Violence against Rohingya Women and Girls in Burma,\" November 2017; 5. Human Rights Watch, \"Massacre by the River: Burmese Army Crimes against Humanity in Tula Toli,\" December 2017; 6. Kachin Women's Association in Thailand, \"A Far Cry from Peace: Ongoing Burma Army Offensives and Abuses in Northern Burma under the NLD Government,\" November 2016; 7. Kachin Women's Association in Thailand, \"State Terror in the Kachin Hills: Burma Army Attacks against Civilians in Northern Burma,\" November 16, 2017; 8. Karen Human Rights Group, \"Ongoing Militarisation in Southeast Myanmar,\" October 2016; 9. Legal Aid Network and Kachin Women's Association in Thailand, \"Justice Delayed, Justice Denied: Seeking Truth about Sexual Violence and War Crime Case in Burma,\" January 2016; 10. Network for Human Rights Documentation\u2014Burma, \"Report on the Human Rights Situation in Burma, January\u2013December 2017,\" March 2018; 11. Physicians for Human Rights, \"Please Tell the World What They Have Done to Us: The Chut Pyin Massacre: Forensic Evidence of Violence against the Rohingya in Myanmar,\" July 2018; 12. Refugees International, \"Suffering in Shadows: Aid Restrictions and Reductions Endanger Displaced Persons in Northern Myanmar,\" December 2017; 13. Simon Lewis, Zeba Siddiqui, Clare Baldwin, and Andrew R.C. Marshall, \"Tip of the Spear,\" Reuters, June 26, 2018; 14. Ta'ang Women's Organization, \"Trained to Torture: Systematic War Crimes by the Burma Army in Ta'ang Areas of Northern Shan State (March 2011\u2013March 2016),\" June 2016; 15. United Nations Fact-Finding Mission on Myanmar, \"Report of the Independent International Fact-Finding Mission on Myanmar\" (Advanced Unedited Version), August 24, 2018; 16. Women's League of Burma, \"If They Had Hope, They Would Speak: The On-going Use of State-Sponsored Sexual Violence in Burma's Ethnic Communities,\" November 2014; and 17. Women's League of Burma, \"Long Way to Go: Continuing Violations of Human Rights and Discrimination Against Ethnic Women in Burma,\" July 2016.", "CRS did not independently confirm the veracity of the findings in these reports. ", "The UNFFM report recommends that the United Nations Security Council (UNSC) refer the human rights abuse allegations to the International Criminal Court (ICC) for investigation and possible prosecution. The report specifically identifies six Burmese military leaders\u2014Commander-in-Chief Senior General Min Aung Hlaing; Deputy Commander-in-Chief Vice Senior General Soe Win; Commander, Bureau of Special Operations-3, Lieutenant General Aung Kyaw Zaw; Commander, Western Regional Military Command, Major General Maung Maung Soe; Commander, 33 rd Light Infantry Division, Brigadier General Aung Aung; and Commander, 99 th Light Infantry Division, Brigadier General Than Oo\u2014as warranting investigation and possible prosecution by the ICC. The UNFFM also calls for the creation of ", "an independent, impartial mechanism to collect, consolidate, preserve and analyse evidence of violations of international humanitarian law and human rights violations and abuses and to prepare files to facilitate and expedite fair and independent criminal proceedings in national, regional or international courts or tribunals.", "In addition, the UNFFM recommends the UNSC \"should adopt targeted individual sanctions, including travel bans and asset freezes, against those who appear most responsible for serious crimes under international law\" and impose an arms embargo on Burma. ", "The Department of State has conducted a preliminary investigation into alleged human rights abuses in Rakhine State. According to an article in Politico , there was sharp disagreement within the State Department on whether to categorize the Tatmadaw's attacks on the Rohingya as genocide or crimes against humanity. On August 28, 2018, then-U.S. Ambassador to the United Nations Nikki Haley presented to the U.N Security Council some of the details of a then unreleased version of the State Department's report. She stated, \"The results are consistent with the recently-released UN independent international fact-finding mission on Burma.\" Among the details Haley mentioned were the following:", "The investigation involved interviews with 1,024 Rohingya refugees in camps in Bangladesh's Cox's Bazar region; 82% of the refugees witnessed the killing of a Rohingya; 51% witnessed sexual violence; and 20% witnessed violence against 100 or more people; and Burmese military and security forces were the perpetrators \"of the overwhelming majority of these crimes.\"", "On September 24, 2018, the State Department posted online a 20-page publication entitled Documentation of Atrocities in Northern Rakhine State . The State Department issued no press release or statement regarding the release of the summary. According to the publication's executive summary, \"the vast majority of Rohingya refugees experienced or directly witnessed extreme violence and the destruction of their homes.\" The summary also concluded \"that the recent violence in northern Rakhine State was extreme, large-scale, widespread, and seemingly geared toward both terrorizing the population and driving out the Rohingya residents.\" The publication is generally consistent with Ambassador Haley's statement before the UNSC, but did not indicate if the State Department considers the atrocities to be genocide, crimes against humanity, and/or war crimes. ", "On July 30, 2018, President Win Myint appointed former Philippine Deputy Foreign Minister Rosario Manalo; former Japanese Ambassador to the U.N. Kenzo Oshima; the chief coordinator of the Union Enterprise for Humanitarian Assistance, Resettlement and Development in Rakhine, Aung Tun Thet; and the former chair of Myanmar's Constitutional Tribunal, Mya Thein, to head the Independent Commission of Enquiry (ICOE), which \"will investigate the allegations of human rights violations and related issues, following the terrorist attacks by ARSA.\" President Win Myint's announcement did not indicate any deadline for the commission to complete its investigation. Deputy Commander-in-Chief Vice Senior General Soe Win reportedly said, \"the military is on standby to offer full cooperation with the commission.\"", "The ICOE visited Rakhine State on December 21, 2018, as part of its investigation. Manalo reportedly stated during the visit, \"We are gathering the truth. Fake news should not be believed. Everything should be based on evidence.\" The ICOE also set a deadline of January 31, 2019, for people to submit evidence of the commission of human rights abuses. ", "Since Burma's security forces began its \"clearance operations\" in August 2017, Commander-in-Chief Senior General Min Aung Hlaing has repeatedly denied that his troops committed human rights abuses in Rakhine State, or elsewhere in Burma. On February 15, 2019, Min Aung Hlaing told Asahi Shimbun that \"there is no certain proof that the national army was involved in the persecution\" of Rohingya.\" He also said that such accusations \"hurts the nation's dignity.\"", "Besides the United States, Australia, Canada, and the European Union have imposed sanctions on Burmese military or security officers responsible for human rights violations in Burma (see Table 1 ). The European Union placed sanctions on seven Burmese security officers on June 25, 2018, and another seven officers on December 21, 2018. On June 25, 2018, Canada placed sanctions on the same seven officers as the EU. On October 5, 2018, Australia placed financial sanctions of five Burmese security officers.", "Three people appear on all four lists\u2014Lt. General Aung Kyaw Zaw, Major General Khin Maung Soe, and Major General Maung Maung Soe. Two officers, Brigadier General Aung Aung and Brigadier General Than Oo, have been sanctioned by Australia, Canada, and the EU, but not the United States. "], "subsections": []}, {"section_title": "Burmese Security Force Officers and Units Allegedly Responsible for Human Rights Violations", "paragraphs": ["The following tables list the names of Burmese security force officers ( Table 2 ) and units ( Table 3 ) that have been identified in one or more of the reports mentioned above as being responsible for human rights violations in Burma since 2011. For purposes of this report, the \"types of responsibility\" include the following:", "Authorization \u2014Authorized and/or ordered other security personnel to commit human rights abuses on Burmese civilians; Commission \u2014Committed the human rights abuses and/or took no action to prevent the commission of human rights abuses; and Cover-up \u2014Became aware of credible allegations that security personnel under their command had committed or were committing human rights violations, but took no action to stop the further commission of human rights violations; attempted to conceal alleged human rights violations by Burmese security personnel; and/or tried to prevent or undermine investigations or prosecutions of alleged human rights violations by Burmese personnel.", "With regard to the type of human rights violation committed, this report classifies them into six categories", "Arbit rary arrest \u2014includes the arrest and/or detention of civilians without discernible evidence that the civilians had committed some crime; Attacks on civilians \u2014includes intentional assaults of civilians and attacks conducted with a disregard for the potential of causing harm to civilians; Extrajudicial killing \u2014includes the intentional killing of civilians and the killing of civilians during military attacks conducted with a disregard for the potential of causing harm to civilians; Forced labor \u2014includes forcing civilians to carry military equipment or supplies, to serve as \"human shields\" for military units, and/or to use civilians as human \"landmine detectors\"; Sexual violence \u2014includes rape, attempted rape, and other forms of sexual assault; and Torture \u2014includes torture and/or the physical abuse of civilians.", "While the military personnel and units listed in the tables have not been proven to be responsible for human rights abuses, their identification in one or more of the reports listed above may indicate that there is reason for further investigation of the allegations. Information in the tables suggests certain patterns about the human rights abuse allegations, including the following:", "Pervasive and systemi c abuse by Tatmadaw \u2014 Table 3 includes more than 100 military units, including 3 Regional Operations Commands, 6 infantry divisions, and more than 90 infantry battalions, indicating that alleged human rights abuse is not limited to a few \"troubled\" units; Geographically pervasive \u2014The reports link certain military units with similar human rights abuses in all of Burma's ethnic minority states\u2014Chin, Kachin, Karen (Kayin), Karenni (Kayah), Mon, Rakhine, and Shan; \"Trouble d \" units \u2014The reports repeatedly implicate certain units in abuses, including the following: Infantry Division 33 \u2014This unit is identified in six reports, involving a variety of alleged abuses in the States of Kachin, Rakhine and Shan; Infantry Division 99 \u2014This unit is also identified in six reports, involving a variety of alleged abuses in the States of Kachin, Rakhine, and Shan; and Infantry Battalions 324, 502, 503 and 567 \u2014These units were identified in three different reports as committing a variety of human rights abuses."], "subsections": []}, {"section_title": "Accountability Options", "paragraphs": ["The extensive list of reports alleging that Burma's security forces have committed genocide, crimes against humanity, and/or war crimes has reinforced calls for some form of accountability mechanism to investigate and possibly prosecute the perpetrators of the alleged abuses. Many of the reports and various human rights organizations have proposed various accountability mechanisms, including referral to the International Criminal Court (ICC), the creation of an ad hoc international criminal tribunal, the imposition of U.N. sanctions, and the enactment of bilateral restrictions on relations with the Burmese government and/or the Burmese military. "], "subsections": [{"section_title": "Referral to International Criminal Court (ICC)", "paragraphs": ["The Rome Statute of the International Criminal Court, which entered into force on July 1, 2002, established the procedures by which cases can be referred to the ICC's Prosecutor for investigation and possible prosecution. Bangladesh (see below) is a party to the Rome Statute; Burma is not. Article 13(b) states the ICC may exercise jurisdiction if \"one or more of such crimes appears to have been committed is referred to the Prosecutor by the Security Council acting under Chapter VII of the Charter of the United Nations.\" To date, the Security Council has referred one case under Article 13(b), that of the situation in Darfur, Sudan, in 2005.", "Under Article 27 of the U.N. Charter, nonprocedural decisions of the UNSC, including a referral of a case to the ICC, \"shall be made by an affirmative vote of nine members including the concurring votes of the permanent members.\" The five permanent members of the UNSC are China, France, Russia, the United Kingdom, and the United States; the current 10 nonpermanent members are Bolivia, Cote d'Ivoire, Equatorial Guinea, Ethiopia, Kazakhstan, Kuwait, the Netherlands, Peru, Poland, and Sweden. ", "Many observers expect China, and possibly Russia, to veto any proposed referral to the ICC. When asked if the United Kingdom would support a referral to the ICC during his visit to Burma in late September 2018, the U.K.'s Foreign Secretary Jeremy Hunt indicated that his government was considering \"a number of different options.\" France has not issued any public statement on a possible UNSC resolution to refer the case to the ICC. ", "The Trump Administration's position on the possible referral to the ICC is uncertain. In her August 25, 2018, statement to the UNSC, Ambassador Haley said, \"Here in the Security Council, we must hold those responsible for violence to account.\" She also commended Kuwait, the Netherlands, Peru, and the United Kingdom for working \"to keep the Security Council's focus on the atrocities in Burma.\" National Security Advisor John Bolton, however, gave a speech on September 10, 2018, stating the Administration's policy toward the ICC, in which he said, \"We will not cooperate with the ICC. We will provide no assistance to the ICC. We will not join the ICC. We will let the ICC die on its own. After all, for all intents and purposes, the ICC is already dead to us.\" Bolton did not make any reference the Burma situation.", "In April 2018, ICC Prosecutor Fatou Bensouda asked the ICC Pre-Trial Chamber to determine whether the Court may exercise jurisdiction over the forced deportation of Rohingya from Burma into Bangladesh, which the Prosecutor argued constituted a crime against humanity. The Prosecutor argued that because forced deportation of Rohingya occurred partially on the territory of Bangladesh (a state party to the Rome Statute), the Court may exercise jurisdiction over the crimes. On September 6, 2018, the Pre-Trial Chamber agreed, deciding that the ICC Prosecutor can begin a preliminary investigation into the situation in Bangladesh, opening the possibility of prosecuting Burmese officials. On September 18, 2018, ICC Prosecutor Bensouda announced that she was initiating the preliminary investigation, which will also take into account \"a number of alleged coercive acts\" that resulted in the forced displacement, including killings, sexual violence, enforced disappearances, and the destruction of property. Her office is to also consider if other crimes under Article 7 of the Rome Statute (\"Crimes Against Humanity\") may be applicable. A preliminary examination team from the ICC is scheduled to visit Bangladesh in March 2019. Bangladesh Prime Minister Sheikh Hasina has said that her government will cooperate with the ICC team. Burma rejected the Pre-Trial Chamber's decision, and has stated it will not assist the ICC investigation. "], "subsections": []}, {"section_title": "Creation of Ad Hoc International Criminal Tribunal (ICT)", "paragraphs": ["A possible alternative to the ICC could be the creation of an ad hoc International Criminal Tribunal (ICT) to investigate and potentially prosecute perpetrators of human rights abuses in Burma. Such a tribunal was established by the UNSC on May 25, 1993, \"for the sole purpose of prosecuting persons responsible for serious violations of international humanitarian law committed in the territory of the former Yugoslavia between 1 January 1991 and a date to be determined by the Security Council upon the restoration of peace.\" The UNSC established another ICT on November 8, 1994, \"for the sole purpose of prosecuting persons responsible for genocide and other serious violations of international humanitarian law committed in the territory of Rwanda and Rwandan citizens responsible for genocide and other such violations committed in the territory of neighbouring States, between 1 January 1994 and 31 December 1994.\" In addition, the UNSC previously has established Special Courts in Cambodia, East Timor, Lebanon, and Sierra Leone to adjudicate cases of alleged human rights violations in those four nations.", "In general, the UNSC has stipulated the scope of the International Criminal Tribunal or Special Court, including the time period to be considered. The Special Courts were set up with the support of the government of the nation in question, whereas the two ICTs were created when the government of the nation in question was unable or unwilling to undertake the criminal proceedings. "], "subsections": []}, {"section_title": "Preservation of Evidence", "paragraphs": ["On September 28, 2018, the U.N. Human Rights Council (UNHRC) approved a resolution that establishes an \"ongoing independent mechanism to collect, consolidate, preserve and analyse evidence of the most serious international crimes and violations of international law committed in Myanmar since 2011\" by a vote of 35 in favor, 3 opposed, and 7 abstentions. The three nations voting against the proposal were Burundi, China, and the Philippines. Japan was one of the seven nations that abstained. ", "The UNHRC resolution instructs the mechanism to", "Prepare files in order to facilitate and expedite fair and independent criminal proceedings, in accordance with international law standards, in national, regional or international courts or tribunals that have or may in the future have jurisdiction over these crimes, in accordance with international law. ", "The mechanism also is to have access to the information collected by the UNFFM, be able to continue to collect evidence, and be provided the capacity to document and verify relevant information and evidence. The UNHRC requested that U.N. Secretary-General Antonio Guterres appoint \"the staff of the mechanism as expeditiously as possible\" and \"allocate the resources necessary for the implementation of the present resolution.\" The resolution also extended the mandate of the UNFFM \"until the new mechanism is operational.\"", "The UNFFM had recommended the creation of \"an independent, impartial mechanism to collect, consolidate, preserve and analyze evidence of violations of international humanitarian law and human rights violations and abuses and to prepare files to facilitate and expedite fair and independent criminal proceedings in national, regional or international courts or tribunals.\" It also stated the mechanism \"could resemble the 'International, Impartial and Independent Mechanism [IIIM] to Assist in the Investigation and Prosecution of Persons Responsible for the Most Serious Crimes under International Law Committed in the Syrian Arab Republic since March 2011,' created by United Nations General Assembly resolution 71/248,\" which was adopted in December 2016. Various human rights organizations have also expressed support for the creation of such a mechanism. In December 2018, the U.N. General Assembly approved $26.7 million to fund the \"independent, impartial mechanism.\"", "The Trump Administration has not indicated its position on the establishment of an \"independent, impartial mechanism\" for Rakhine State, but it has demonstrated its support for the IIIM. In February 2018, Ambassador Haley stated the following:", "The United States has also announced that we will contribute to the International, Impartial, and Independent Mechanism on international crimes committed in Syria\u2014the IIIM. The United States strongly supports the IIIM as a valuable tool to hold the Assad regime accountable for its atrocities, including its repeated and ongoing use of chemical weapons. ", "In FY2018, the United States provided nearly $350,000 in support of the IIIM.", "The 116 th Congress appropriated funds in the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) for investigation and documentation of alleged human rights violations in Burma, but not explicitly for an \"independent, impartial mechanism.\" Section 7043(a) included the following provisions:", "Bilateral Economic Assistance.\u2014\u2026", "(B) USES.\u2014Funds appropriated under title III of this Act for assistance for Burma\u2014\u2026", "(vi) shall be made available for programs to investigate and document allegations of ethnic cleansing and other gross violations of human rights committed against the Rohingya people in Rakhine state: Provided , That such funds shall be in addition to funds otherwise made available for such purposes; ", "(vii) shall be made available for programs to investigate and document allegations of gross violations of human rights committed in Burma, particularly in areas of conflict.", "The House committee report that accompanied the act ( H.Rept. 116-9 ) allocated $3.0 million out of the $82.7 million Economic Support Fund for Burma for \"Documentation of human rights violations against Rohingya,\" and $0.75 million for \"Documentation of human rights violations in Burma.\" The report further stipulated that", "funds made available for programs to investigate and document allegations of ethnic cleansing and other gross violations of human rights committed against the Rohingya people in Rakhine state shall be made available for civil society organizations in Bangladesh and Burma. Prior to the obligation of any such funds, the Assistant Secretary for DRL shall ensure the establishment of a standard documentation format and documentation procedures for use by such organizations, and shall identify an appropriate repository for such information.", "It also specified that", "funds made available for programs to investigate and document allegations of gross violations of human rights committed in Burma shall be made available for civil society and international organizations, including those in countries bordering Burma."], "subsections": []}, {"section_title": "U.N. Sanctions", "paragraphs": ["The UNFFM and various human rights organizations have recommended that the UNSC impose sanctions on Burma independent of any ICC or ad hoc international tribunal prosecution. Among the possible U.N. sanctions proposed are a global arms embargo; travel bans and the freezing of assets of senior Burmese government and military officials; and a prohibition of trade and/or investment with businesses owned or controlled by the Burmese military, its senior officers, or their families.", "The UNSC has imposed sanctions in response to human rights violations, among other factors, in other countries, including the Central African Republic, Haiti, Rwanda, South Africa, South Sudan, Sudan, and the former Yugoslavia. The UNSC sanctions have included, in some cases, arms embargoes, travel bans, and the freezing of assets. "], "subsections": []}, {"section_title": "Bilateral Sanctions on Burma", "paragraphs": ["Another accountability option that has been suggested is for individual nations to impose appropriate sanctions on Burma. The United States currently has some restrictions on relations with Burma, and the Trump Administration has announced some additional restrictions in response to the alleged human rights abuses in Rakhine State, including the imposition of visa and economic restrictions on five Burmese military officers and two military units under the authority of the Global Magnitsky Act (see above). The Trump Administration could potentially sanction additional individuals and units it determines are responsible for serious human rights violations under the authority of the Global Magnitsky Act.", "If the Trump Administration were to determine that the alleged human rights abuses that occurred in Rakhine State or elsewhere in Burma constituted genocide, then the United States has the authority to prosecute alleged offenders under the provisions of the Human Rights Enforcement Act of 2009 ( P.L. 111-122 ; 18 U.S.C. 1091). The act criminalizes the act of genocide and subjects the offender to a possible death sentence, life in prison, and a fine of \"not more than $1,000,000.\" The act grants U.S. jurisdiction to the case under certain conditions, including if \"the alleged offender is present in the United States,\" regardless of where the offense was committed.", "The United States is a party to the Convention on the Prevention and Punishment of the Crime of Genocide. Article V of the convention states the following: ", "The Contracting Parties undertake to enact, in accordance with their respective Constitutions, the necessary legislation to give effect to the provisions of the present Convention, and, in particular, to provide effective penalties for persons guilty of genocide or any of the other acts enumerated in article III.", "Article VII requires that \"(t)he Contracting Parties pledge themselves in such cases to grant extradition in accordance with their laws and treaties in force.\" Bangladesh, Burma, and the United States are parties to the Convention.", "Prior to the events in Rakhine State, the United States had maintained several types of restrictions on relations with Burma, including", "restrictions on the issuance of visas to Burmese government and military officials; limits on bilateral and multilateral economic assistance; and prohibition on the sale of U.S. military equipment.", "In addition, Section 7043(a)(1)(C) of the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) stated that FY2019 bilateral economic assistance", "(i) may not be made available to any individual or organization if the Secretary of State has credible information that such individual or organization has committed a gross violation of human rights, including against Rohingya and other minority groups, or that advocates violence against ethnic or religious groups or individuals in Burma; and", "(ii) may not be made available to any organization or entity controlled by the armed forces of Burma.", "Other restrictions on relations are currently being waived under the authority of presidential executive orders or presidential determinations. These include", "a general ban on the import of goods from Burma; a ban on the import of Burmese jadeite and rubies, and products containing Burmese jadeite and rubies; a ban on the import of goods from certain Burmese companies; the \"freezing\" of the assets of certain Burmese nationals; a prohibition on providing financial services to certain Burmese nationals; restrictions on U.S. investments in Burma; restrictions on bilateral assistance to Burma; and restrictions on U.S. support for multilateral assistance to Burma.", "In addition, former President George H.W. Bush suspended Burma's benefits under the U.S. Generalized Systems of Preferences (GSP) program on April 13, 1989, as part of Presidential Proclamation 5955. Former President Obama restored Burma's GSP benefits on September 14, 2016, via Presidential Proclamation 9492. Any of these waived past restrictions, including the suspension of GSP benefits, could be reinstated by President Trump without the involvement of Congress. "], "subsections": []}]}, {"section_title": "Options for Congress", "paragraphs": ["Congress has various options on how it may respond to the alleged human rights violations in Burma. Legislation has been introduced to modify U.S. policy in Burma, in part to address the alleged human rights abuses. Resolutions have also been introduced expressing congressional views on events in Burma, and calling for changes in U.S. policy. Over the last few years, Congress has also included Burma-related provisions in pending appropriation legislation to shape U.S. policy in Burma. Congress has also demonstrated its ongoing interest in Burma, and the importance of U.S. policy in Burma, by holding several hearings to learn more about developments in Burma and discuss policy options. Several congressional delegations have traveled to Bangladesh and Burma to directly investigate the situation and express to Burma's leaders the importance of the human rights violations allegations to Congress. ", "Whatever additional actions or measures, if any, Congress takes to address the alleged human rights violations in Burma will likely be influenced by other elements of bilateral relations, as well as regional concerns such as China's growing influence in Southeast Asia. Some Members of Congress and the Trump Administration view Burma as undergoing a fragile and difficult transition from an oppressive military dictatorship to a potentially democratic, civilian-run federated state, and are concerned that imposing additional restrictions on relations with Burma could undermine that transition. Other Members of Congress and Administration officials see the human rights abuses in Kachin, Karen, Rakhine, and Shan States as proof that the Tatmadaw's leaders have no intention of permitting such a transition to occur. "], "subsections": [{"section_title": "Legislation", "paragraphs": ["In the 115 th Congress, two bills were introduced pertaining to U.S. policy in Burma with provisions related to the alleged human rights violations\u2014the Burma Unified through Rigorous Military Accountability (BURMA) Act of 2018 ( H.R. 5819 ) and the Burma Human Rights and Freedom Act of 2018 ( S. 2060 ). Both bills would have imposed a visa ban on senior military officers involved in human rights abuses in Burma, placed new restrictions on security assistance and military cooperation, and required U.S. opposition to international financial institution (IFI) loans to Burma if the project involves an enterprise owned or directly or indirectly controlled by the military of Burma. S. 2060 also would have required the President to review Burma's eligibility for the Generalized System of Preferences (GSP) program. ", "The House Committee on Foreign Affairs, on May 17, 2018, ordered H.R. 5819 to be reported favorably out of committee, with an amendment in the nature of a substitute, and agreed to seek consideration under suspension of the rules. The Senate Committee on Foreign Relations reported S. 2060 favorably out of committee on February 12, 2018, with an amendment in the nature of a substitute, but the bill never received floor action by the Senate. "], "subsections": []}, {"section_title": "Resolutions", "paragraphs": ["Ten separate resolutions in the House or Senate pertaining to Burma were introduced during the 115 th Congress; one passed. In the 116 th Congress, one Burma-related resolution has been introduced, S.Res. 34 , that resolves that the Senate (among other things):", "condemns the violence and displacement inflicted on Burma's Rohingya and other ethnic minorities; and urges the Secretary of State to make a determination whether the actions by the Myanmar military constitute crimes against humanity or genocide and to work with interagency partners to impose targeted sanctions on Myanmar military officials, to include Senior General Min Aung Hlaing, responsible for these heinous acts through existing authorities."], "subsections": []}, {"section_title": "Appropriations Provisions", "paragraphs": ["As previously described, the 116 th Congress included provisions in the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) placing restrictions on the provision of bilateral economic assistance, international security assistance, and multilateral assistance to Burma. Similar provisions could be included in the appropriations legislation for the Department of Defense and the Department of State for FY2020. "], "subsections": []}, {"section_title": "Hearings", "paragraphs": ["Since September 2017, Congress has held several hearings on Burma, including the following:", "A House Committee on Foreign Affairs hearing on September 26, 2018, entitled, \"Genocide Against the Burmese Rohingya.\" A House Committee on Foreign Affairs hearing on October 4, 2017, entitled, \"The Rohingya Crisis: U.S. Response to the Tragedy in Burma.\" A House Committee on Foreign Affairs Subcommittee on Asia and the Pacific hearing on September 27, 2017, entitled, \"Burma's Brutal Campaign Against the Rohingya.\" A Senate Committee on Foreign Relations hearing on October 24, 2017, entitled, \"Assessing U.S. Policy Towards Burma: Geopolitical, Economic, and Humanitarian Considerations.\" A Tom Lantos Human Rights Commission hearing on July 25, 2018, entitled, \"Victims' Rights in Burma.\"", "At all of these hearings, most of the Members of Congress present indicated that they view the acts of Burma's security forces in Rakhine State and elsewhere in Burma as either genocide or crimes against humanity. Many also stated that the Trump Administration's response to date has been inadequate given the severity of the human rights abuses. "], "subsections": []}, {"section_title": "Congressional Delegations", "paragraphs": ["Congress may also consider sending congressional delegations and staff delegations to Bangladesh and Burma to investigate the alleged human rights violations and ascertain the views of the alleged victims on what forms of accountability should be pursued. These delegations could also meet with Burmese government officials and Burmese military leaders to hear their perspectives of the human rights allegations, and to express the delegation's opinion on what measures the Burmese government and military should make to investigate and possibly prosecute those individuals, military units, and organizations that have been accused of committing genocide, crimes against humanity, and war crimes in Burma. "], "subsections": [{"section_title": "Appendix. Map of Burma", "paragraphs": [], "subsections": []}]}]}]}}
{"id": "R43429", "title": "Federal Lands and Related Resources: Overview and Selected Issues for the 116th Congress", "released_date": "2019-04-25T00:00:00", "summary": ["The Property Clause in the U.S. Constitution (Article IV, \u00a73, clause 2) grants Congress the authority to acquire, dispose of, and manage federal property. The 116th Congress faces multiple policy issues related to federal lands and natural resources. These issues include how much and which land the government should own and how lands and resources should be used and managed. These issues affect local communities, industries, ecosystems, and the nation.", "There are approximately 640 million surface acres of federally owned land in the United States. Four agencies (referred to in this report as the federal land management agencies, or FLMAs) administer approximately 608 million surface acres (~95%) of federal lands: the Forest Service (FS) in the Department of Agriculture (USDA), and the Bureau of Land Management (BLM), U.S. Fish and Wildlife Service (FWS), and National Park Service (NPS), all in the Department of the Interior (DOI). The federal estate also extends to energy and mineral resources located below ground and offshore. BLM manages the onshore subsurface mineral estate and the Bureau of Ocean Energy Management, also in DOI, manages access to approximately 1.7 billion offshore acres in federal waters on the U.S. outer continental shelf. However, not all of these onshore or offshore acres can be expected to contain extractable mineral and energy resources.", "This report introduces some of the broad themes and issues Congress has considered when addressing federal land policy and resource management. These include questions about the extent and location of the federal estate. For example, typically Congress considers both measures to authorize and fund the acquisition of additional lands and measures to convey some land out of federal ownership or management. Other issues for Congress include whether certain lands or resources should have additional protections, for example, through designation as wilderness or national monuments, or protection of endangered species and their habitat.", "Other policy questions involve how federal land should be used. Certain federal lands are considered primary- or dominant-use lands as specified in statute by Congress. For example, the dominant-use mission of the National Wildlife Refuge System is the conservation of fish, wildlife, and plant resources and associated habitats for the benefit of current and future Americans, and the dual-use mission of the National Park System is to conserve unique resources and provide for their use and enjoyment by the public. BLM and FS lands, however, have a statutory mission to balance multiple uses: recreation, grazing, timber, habitat and watershed protection, and energy production, among others. Conflicts arise as users and land managers attempt to balance these uses. Congress often addresses bills to clarify, prioritize, and alter land uses, including timber harvesting, livestock grazing, and recreation (motorized and nonmotorized). With respect to energy uses, in addition to questions about balancing energy production against other uses, other questions include how to balance traditional and alternative energy production on federal lands.", "Additional issues of debate include whether or how to charge for access and use of federal resources and lands, how to use any funds collected, and whether or how to compensate local governments for the presence of untaxed federal lands within their borders. Congress also faces questions about wildfire management on both federal and nonfederal lands, including questions of risk management and funding suppression efforts."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Federal land management decisions influence the U.S. economy, environment, and social welfare. These decisions determine how the nation's federal lands will be acquired or disposed of, developed, managed, and protected. Their impact may be local, regional, or national. This report discusses selected federal land policy issues that the 116 th Congress may consider through oversight, authorizations, or appropriations. The report also identifies CRS products that provide more detailed information. ", "The federal government manages roughly 640 million acres of surface land, approximately 28% of the 2.27 billion acres of land in the United States. Four agencies (referred to in this report as the federal land management agencies, or FLMAs) administer a total of 608 million acres (~95%) of these federal lands: the Forest Service (FS) in the Department of Agriculture (USDA), and the Bureau of Land Management (BLM), U.S. Fish and Wildlife Service (FWS), and National Park Service (NPS), all in the Department of the Interior (DOI). Most of these lands are in the West and Alaska, where the percentage of federal ownership is significantly higher than elsewhere in the nation (see Figure 1 ). In addition, the Department of Defense administers approximately 11 million acres in military bases, training ranges, and more; and numerous other agencies administer the remaining federal acreage. ", "The federal estate also extends to energy and mineral resources located below ground and offshore. BLM manages the federal onshore subsurface mineral estate. The Bureau of Ocean and Energy Management (BOEM), also in DOI, manages access to about 1.7 billion offshore acres located beyond state coastal waters, referred to as U.S. offshore areas or the outer continental shelf (OCS). Not all of these acres can be expected to contain extractable mineral and energy resources, however. ", "Federal land policy and management issues generally fall into several broad thematic questions: Should federal land be managed to produce national or local benefits? How should current uses be balanced with future resources and opportunities? Should current uses, management, and protection programs be replaced with alternatives? Who decides how federal land resources should be managed, and how are the decisions made? ", "Some stakeholders seek to maintain or enhance the federal estate, while others seek to divest the federal estate to state or private ownership. Some issues, such as forest management and fire protection, involve both federal and nonfederal (state, local, or privately owned) land. In many cases, policy positions on federal land issues do not divide along clear party lines. Instead, they may be split along the lines of rural-urban, eastern-western, and coastal-interior interests.", "Several committees in the House and Senate have jurisdiction over federal land issues. For example, issues involving the management of the national forests cross multiple committee jurisdictions, including the Committee on Agriculture and the Committee on Natural Resources in the House, and the Committee on Agriculture, Nutrition and Forestry and Committee on Energy and Natural Resources in the Senate. In addition, federal land issues are often addressed during consideration of annual appropriations for the FLMAs' programs and activities. These agencies and programs typically receive appropriations through annual Interior, Environment, and Related Agencies appropriations laws. ", "This report introduces selected federal land issues, many of which are complex and interrelated. The discussions are broad and aim to introduce the range of issues regarding federal land management, while providing references to more detailed and specific CRS products. The issues are grouped into these broad categories", "Federal Estate Ownership, Funding Issues Related to Federal Lands, Climate Policy and Federal Land Management, Energy and Minerals Resources, Forest Management, Range Management, Recreation, Other Land Designations, Species Management, and Wildfire Management.", "This report generally contains the most recent available data and estimates."], "subsections": []}, {"section_title": "Federal Estate Ownership", "paragraphs": ["Federal land ownership began when the original 13 states ceded title of some of their land to the newly formed central government. The early federal policy was to dispose of federal land to generate revenue and encourage western settlement and development. However, Congress began to withdraw, reserve, and protect federal land through the creation of national parks and forest reserves starting in the late 1800s. This \"reservation era\" laid the foundation for the current federal agencies, whose primary purpose is to manage natural resources on federal lands. The four FLMAs and BOEM were created at different times, with different missions and purposes, as discussed below.", "The ownership and use of federal lands has generated controversy since the late 1800s. One key area of debate is the extent of the federal estate, or, in other words, how much land the federal government should own. This debate includes questions about whether some federal lands should be disposed to state or private ownership, or whether additional land should be acquired for recreation, conservation, open space, or other purposes. For lands retained in federal ownership, discussion has focused on whether to curtail or expand certain land designations (e.g., national monuments proclaimed by the President or wilderness areas designated by Congress) and whether current management procedures should be changed (e.g., to allow a greater role for state and local governments or to expand economic considerations in decisionmaking). A separate issue is how to ensure the security of international borders while protecting the federal lands and resources along the border, which are managed by multiple agencies with their own missions. ", "In recent years, some states have initiated efforts to assume title to the federal lands within their borders, echoing efforts of the \"Sagebrush Rebellion\" during the 1980s. These efforts generally are in response to concerns about the amount of federal land within the state, as well as concerns about how the land is managed, fiscally and otherwise. Debates about federal land ownership\u2014including efforts to divest federal lands\u2014often hinge on constitutional principles such as the Property Clause and the Supremacy Clause. The Property Clause grants Congress authority over the lands, territories, or other property of the United States: \"the Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States.\" The Supremacy Clause establishes federal preemption over state law, meaning that where a state law conflicts with federal law, the federal law will prevail. Through these constitutional principles, the U.S. Supreme Court has described Congress's power over federal lands as \"without limitations.\" For instance, Congress could choose to transfer to states or other entities the ownership of areas of federal land, among other options."], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS Report R42346, Federal Land Ownership: Overview and Data , by Carol Hardy Vincent, Laura A. Hanson, and Carla N. Argueta.", "CRS Report R44267, State Management of Federal Lands: Frequently Asked Questions , by Carol Hardy Vincent."], "subsections": []}, {"section_title": "Agencies Managing Federal Lands", "paragraphs": ["The four FLMAs and BOEM manage most federal lands (onshore and offshore, surface and subsurface)", "Forest Service (FS) , in the Department of Agriculture, manages the 193 million acre National Forest System under a multiple-use mission, including livestock grazing, energy and mineral development, recreation, timber production, watershed protection, and wildlife and fish habitat. Balancing the multiple uses across the national forest system has sometimes led to a lack of consensus regarding management decisions and practices. Bureau of Land Management (BLM) , in the Department of the Interior (DOI), manages 246 million acres of public lands, also under a multiple-use mission of livestock grazing, energy and mineral development, recreation, timber production, watershed protection, and wildlife and fish habitat. Differences of opinion sometimes arise among and between users and land managers as a result of the multiple use opportunities on BLM lands. U.S. Fish and Wildlife Service (FWS) , in DOI, manages 89 million acres as part of the National Wildlife Refuge System (NWRS) as well as additional surface, submerged, and offshore areas. FWS manages the NWRS through a dominant-use mission\u2014to conserve plants and animals and associated habitats for the benefit of present and future generations. In addition, FWS administers each unit of the NWRS pursuant to any additional purposes specified for that unit. Other uses are permitted only to the extent that they are compatible with the conservation mission of the NWRS and any purposes identified for individual units. Determining compatibility can be challenging, but the FWS's stated mission generally has been seen to have helped reduce disagreements over refuge management and use. National Park Service (NPS) , in DOI, manages 80 million acres in the National Park System. The NPS has a dual mission\u2014to preserve unique resources and to provide for their enjoyment by the public. NPS laws, regulations, and policies emphasize the conservation of park resources in conservation/use conflicts. Tension between providing recreation and preserving resources has produced management challenges for NPS. Bureau of Ocean Management (BOEM) , also in DOI, manages energy resources in areas of the outer continental shelf (OCS) covering approximately 1.7 billion acres located beyond state waters. These areas are defined in the Submerged Lands Act and the Outer Continental Shelf Lands Act (OCSLA). BOEM's mission is to balance energy independence, environmental protection, and economic development through responsible, science-based management of offshore conventional and renewable energy resources. BOEM schedules and conducts OCS oil and gas lease sales, administers existing oil and gas leases, and issues easements and leases for deploying renewable energy technologies, among other responsibilities."], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS In Focus IF10585, The Federal Land Management Agencies , by Katie Hoover.", "CRS Report R42656, Federal Land Management Agencies and Programs: CRS Experts , by R. Eliot Crafton. ", "CRS Report R45340, Federal Land Designations: A Brief Guide , coordinated by Laura B. Comay.", "CRS In Focus IF10832, Federal and Indian Lands on the U.S.-Mexico Border , by Carol Hardy Vincent and James C. Uzel.", "CRS Report R45265, U.S. Fish and Wildlife Service: An Overview , by R. Eliot Crafton. ", "CRS Report RS20158, National Park System: Establishing New Units , by Laura B. Comay.", "CRS Report R43872, National Forest System Management: Overview, Appropriations, and Issues for Congress , by Katie Hoover."], "subsections": []}]}, {"section_title": "Agency Acquisition and Disposal Authorities", "paragraphs": ["Congress has granted the FLMAs various authorities to acquire and dispose of land. The extent of this authority differs considerably among the agencies. The BLM has relatively broad authority for both acquisitions and disposals under the Federal Land Policy and Management Act of 1976 (FLPMA). By contrast, NPS has no general authority to acquire land to create new park units or to dispose of park lands without congressional action. The FS authority to acquire lands is limited mostly to lands within or contiguous to the boundaries of a national forest, including the authority to acquire access corridors to national forests across nonfederal lands. The agency has various authorities to dispose of land, but they are relatively constrained and infrequently used. FWS has various authorities to acquire lands, but no general authority to dispose of its lands. For example, the Migratory Bird Conservation Act of 1929 grants FWS authority to acquire land for the National Wildlife Refuge System\u2014using funds from sources that include the sale of hunting and conservation stamps\u2014after state consultation and agreement.", "The current acquisition and disposal authorities form the backdrop for consideration of measures to establish, modify, or eliminate authorities, or to provide for the acquisition or disposal of particular lands. Congress also addresses acquisition and disposal policy in the context of debates on the role and goals of the federal government in owning and managing land generally. "], "subsections": [{"section_title": "CRS Product", "paragraphs": ["CRS Report RL34273, Federal Land Ownership: Acquisition and Disposal Authorities , by Carol Hardy Vincent et al."], "subsections": []}]}]}, {"section_title": "Funding Issues", "paragraphs": ["Funding for federal land and FLMA natural resource programs presents an array of issues for Congress. The FLMAs receive their discretionary appropriations through Interior, Environment, and Related Agencies appropriations laws. In addition to other questions related directly to appropriations, some funding questions relate to the Land and Water Conservation Fund (LWCF). Congress appropriates funds from the LWCF for land acquisition by federal agencies, outdoor recreation needs of states, and other purposes. Under debate are the levels, sources, and uses of funding and whether some funding should be continued as discretionary. A second set of questions relates to the compensation of states or counties for the presence of nontaxable federal lands and resources, including whether to revise or maintain existing payment programs. A third set of issues relates to the maintenance of assets by the agencies, particularly how to address their backlog of maintenance projects while achieving other government priorities. "], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS Report R44934, Interior, Environment, and Related Agencies: Overview of FY2019 Appropriations , by Carol Hardy Vincent.", "CRS Report R43822, Federal Land Management Agencies: Appropriations and Revenues , coordinated by Carol Hardy Vincent.", "CRS In Focus IF10381, Bureau of Land Management: FY2019 Appropriations , by Carol Hardy Vincent.", "CRS In Focus IF10846, U.S. Fish and Wildlife Service: FY2019 Appropriations , by R. Eliot Crafton.", "CRS In Focus IF10900, National Park Service: FY2019 Appropriations , by Laura B. Comay.", "CRS In Focus IF11178, National Park Service: FY2020 Appropriations , by Laura B. Comay. ", "CRS In Focus IF11169, Forest Service: FY2019 Appropriations and FY2020 Request , by Katie Hoover."], "subsections": []}, {"section_title": "Land and Water Conservation Fund", "paragraphs": ["The Land and Water Conservation Fund Act of 1965 was enacted to help preserve, develop, and assure access to outdoor recreation facilities to strengthen the health of U.S. citizens. The law created the Land and Water Conservation Fund in the U.S. Treasury as a funding source to implement its outdoor recreation purposes. The LWCF has been the principal source of monies for land acquisition for outdoor recreation by the four FLMAs. The LWCF also has funded a matching grant program to assist states with outdoor recreational needs and other federal programs with purposes related to lands and resources. ", "The provisions of the LWCF Act that provide for $900 million in specified revenues to be deposited in the fund annually have been permanently extended. Nearly all of the revenues are derived from oil and gas leasing in the OCS. Congress determines the level of discretionary appropriations each year, and yearly appropriations have fluctuated widely since the origin of the program. In addition to any discretionary appropriations, the state grant program receives (mandatory) permanent appropriations.", "There is a difference of opinion as to how funds in the LWCF should be allocated. Current congressional issues include deciding the amount to appropriate for land acquisition, the state grant program, and other purposes. Several other issues have been under debate, including whether to provide the fund with additional permanent appropriations; direct revenues from other activities to the LWCF; limit the use of funds for particular purposes, such as federal land acquisition; and require some of the funds to be used for certain purposes, such as facility maintenance. Another area of focus is the state grant program, with issues including the impact of anticipated increases in mandatory funding, the way in which funds are apportioned among the states, and the extent to which the grants should be competitive."], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS In Focus IF10323, Land and Water Conservation Fund (LWCF): Frequently Asked Questions Related to Provisions Scheduled to Expire on September 30, 2018 , by Carol Hardy Vincent and Bill Heniff Jr.", "CRS Report RL33531, Land and Water Conservation Fund: Overview, Funding History, and Issues , by Carol Hardy Vincent.", "CRS Report R44121, Land and Water Conservation Fund: Appropriations for \"Other Purposes , \" by Carol Hardy Vincent."], "subsections": []}]}, {"section_title": "Federal Payment and Revenue-Sharing Programs", "paragraphs": ["As a condition of statehood, most states forever waived the right to tax federal lands within their borders. However, some assert that states or counties should be compensated for services related to the presence of federal lands, such as fire protection, police cooperation, or longer roads to skirt the federal property. Under federal law, state and local governments receive payments through various programs due to the presence of federally owned land. Some of these programs are run by specific agencies and apply only to that agency's land. Many of the payment programs are based on revenue generated from specific land uses and activities, while other payment programs are based on acreage of federal land and other factors. The adequacy, coverage, equity, and sources of the payments for all of these programs are recurring issues for Congress.", "The most widely applicable onshore program, administered by DOI, applies to many types of federally owned land and is called Payments in Lieu of Taxes (PILT). Each eligible county's PILT payment is calculated using a complex formula based on five factors, including federal acreage and population. Most counties containing the lands administered by the four FLMAs are eligible for PILT payments. Counties with NPS lands receive payments primarily under PILT. Counties containing certain FWS lands are eligible to receive PILT payments, and FWS also has an additional payment program for certain refuge lands, known as the Refuge Revenue Sharing program. In addition to PILT payments, counties containing FS and BLM lands also receive payments based primarily on receipts from revenue-producing activities on their lands. Some of the payments from these other programs will be offset in the county's PILT payment in the following year. One program (Secure Rural Schools, or SRS) compensated counties with FS lands or certain BLM lands in Oregon for declining timber harvests. The authorization for the SRS program expired after FY2018, and the last authorized payments are to be disbursed in FY2019. ", "The federal government shares the revenue from mineral and energy development, both onshore and offshore. Revenue collected (rents, bonuses, and royalties) from onshore mineral and energy development is shared 50% with the states, under the Mineral Leasing Act of 1920 (less administrative costs). Alaska, however, receives 90% of all revenues collected on federal onshore leases (less administrative costs). ", "Revenue collected from offshore mineral and energy development on the outer continental shelf (OCS) is shared with the coastal states, albeit at a lower rate. The OCSLA allocates 27% of the revenue generated from certain federal offshore leases to the coastal states. Separately, the Gulf of Mexico Energy Security Act of 2006 (GOMESA; P.L. 109-432 ) provided for revenue sharing at a rate of 37.5% for four coastal states, up to a collective cap. Some coastal states have advocated for a greater share of the OCS revenues based on the impacts oil and gas projects have on coastal infrastructure and the environment, while other states and stakeholders have contended that more of the revenue should go to the general fund of the Treasury or to other federal programs. "], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS Report RL31392, PILT (Payments in Lieu of Taxes): Somewhat Simplified , by Katie Hoover.", "CRS Report R41303, Reauthorizing the Secure Rural Schools and Community Self-Determination Act of 2000 , by Katie Hoover.", "CRS Report R42404, Fish and Wildlife Service: Compensation to Local Governments , by R. Eliot Crafton.", "CRS Report R42951, The Oregon and California Railroad Lands (O&C Lands): Issues for Congress , by Katie Hoover.", "CRS Report R43891, Mineral Royalties on Federal Lands: Issues for Congress , by Marc Humphries.", "CRS Report R42439, Compensating State and Local Governments for the Tax-Exempt Status of Federal Lands: What Is Fair and Consistent? , by Katie Hoover."], "subsections": []}]}, {"section_title": "Deferred Maintenance", "paragraphs": ["The FLMAs have maintenance responsibility for their buildings, roads and trails, recreation sites, and other infrastructure. Congress continues to focus on the agencies' deferred maintenance and repairs , defined as \"maintenance and repairs that were not performed when they should have been or were scheduled to be and which are put off or delayed for a future period.\" The agencies assert that continuing to defer maintenance of facilities accelerates their rate of deterioration, increases their repair costs, and decreases their value and safety.", "Congressional and administrative attention has centered on the NPS backlog, which has continued to increase from an FY1999 estimate of $4.25 billion in nominal dollars. Currently, DOI estimates deferred maintenance for NPS for FY2017 at $11.2 billion. Nearly three-fifths of the backlogged maintenance is for roads, bridges, and trails. The other FLMAs also have maintenance backlogs. DOI estimates that deferred maintenance for FY2017 for FWS is $1.4 billion and the BLM backlog is $0.8 billion. FS estimated its backlog for FY2017 at $5.0 billion, with approximately 70% for roads, bridges, and trails. Thus, the four agencies together had a combined FY2017 backlog estimated at $18.5 billion. ", "The backlogs have been attributed to decades of funding shortfalls to address capital improvement projects. However, it is not always clear how much total funding has been provided for deferred maintenance each year because some annual presidential budget requests and appropriations documents did not identify and aggregate all funds for deferred maintenance. Currently, there is debate over the appropriate level of funds to maintain infrastructure, whether to use funds from other discretionary or mandatory programs or sources, how to balance maintenance of the existing infrastructure with the acquisition of new assets, and the priority of maintaining infrastructure relative to other government functions."], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS Report R43997, Deferred Maintenance of Federal Land Management Agencies: FY2007-FY2016 Estimates and Issues , by Carol Hardy Vincent.", "CRS Report R44924, The National Park Service's Maintenance Backlog: Frequently Asked Questions , by Laura B. Comay.", "CRS In Focus IF10987, Legislative Proposals for a National Park Service Deferred Maintenance Fund , by Laura B. Comay."], "subsections": []}]}]}, {"section_title": "Climate Policy and Federal Land Management", "paragraphs": ["Scientific evidence shows that the United States' climate has been changing in recent decades. This poses several interrelated and complex issues for the management of federal lands and their resources, in terms of mitigation, adaptation, and resiliency. Overall, climate change is introducing uncertainty about conditions previously considered relatively stable and predictable. Given the diversity of federal land and resources, concerns are wide-ranging and include invasive species, sea-level rise, wildlife habitat changes, and increased vulnerability to extreme weather events, as well as uncertainty about the effects of these changes on tourism and recreation. Some specific observed effects of climate change include a fire season that begins earlier and lasts longer in some locations, warmer winter temperatures that allow for a longer tourism season but also for various insect and disease infestations to persist in some areas, and habitat shifts that affect the status of sensitive species but may also increase forest productivity. Another concern is how climate change may affect some iconic federal lands, such as the diminishing size of the glaciers at Glacier National Park in Montana and several parks in Alaska, or the flooding of some wildlife refuges. ", "The role of the FLMAs in responding to climate change is an area under debate. Some stakeholders are concerned that a focus on climate change adaptation may divert resources and attention from other agency activities and near-term challenges. Others see future climate conditions as representing an increased risk to the effective performance of agency missions and roles. ", "A related debate concerns the impact of energy production on federal lands. Both traditional sources of energy (nonrenewable fossil fuels such as oil, gas, and coal) and alternative sources of energy (renewable fuels such as solar, wind, and geothermal) are available on some federal lands. A 2018 report from the U.S. Geological Survey estimated that greenhouse gas emissions resulting from the extraction and use of fossil fuels produced on federal lands account for, on average, approximately 24% of national emissions for carbon dioxide, 7% for methane, and 1.5% for nitrous oxide. In addition, the report estimated that carbon sequestration on federal lands offset approximately 15% of those carbon dioxide emissions over the study period, 2005 through 2014. This, along with other factors, has contributed to questions among observers about the extent to which the agencies should provide access to and promote different sources of energy production on federal lands based on the effects on climate from that production. Since fossil fuel emissions contribute to climate change, some stakeholders concerned about climate change assert that the agencies should prioritize renewable energy production on federal lands over traditional energy sources. Others assert that, even with renewable energy growth, conventional sources will continue to be needed in the foreseeable future, and that the United States should pursue a robust traditional energy program to ensure U.S. energy security and remain competitive with other nations, including continuing to make fossil fuel production available on federal lands.", "Specific legislative issues for Congress may include the extent to which the FLMAs manage in furtherance of long-term climate policy goals, and proposals to restructure or improve collaboration among the FLMAs regarding climate change activities and reporting. "], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS Report R43915, Climate Change Adaptation by Federal Agencies: An Analysis of Plans and Issues for Congress , coordinated by Jane A. Leggett."], "subsections": []}]}, {"section_title": "Energy and Mineral Resources", "paragraphs": ["Much of the onshore federal estate is open to energy and mineral exploration and development, including BLM and many FS lands. However, many NPS lands and designated wilderness areas, as well as certain other federal lands, have been specifically withdrawn from exploration and development. Most offshore federal acres on the U.S. outer continental shelf are also available for exploration and development, although BOEM has not scheduled lease sales in all available areas. Energy production on federal lands contributes to total U.S. energy production. For example, in 2017, as a percentage of total U.S. production, approximately 24% of crude oil and 13% of natural gas production came from federal lands. Coal production from federal lands has consistently accounted for about 40% of annual U.S. coal production over the past decade. ", "Federal lands also are available for renewable energy projects. Geothermal capacity on federal lands represents 40% of U.S. total geothermal electric generating capacity. Solar and wind energy potential on federal lands is growing and, based on BLM-approved projects, there is potential for 3,300 megawatts (MW) of wind and 6,300 MW of solar energy on federal lands. The first U.S. offshore wind farm began regular operations in 2016, and BOEM has issued 13 wind energy leases off the coasts of eight East Coast states.", "The 116 th Congress may continue debate over issues related to access to and availability of onshore and offshore federal lands for energy and mineral development. This discussion includes how to balance energy and mineral development with environmental protection, postproduction remediation, and other uses for those federal lands. Some would like to open more federal lands for energy development, whereas others have sought to retain or increase restrictions and withdrawals for certain areas they consider too sensitive or inappropriate for traditional and/or renewable energy development. Congress also continues to focus on the energy and mineral permitting processes, the timeline for energy and mineral development, and issues related to royalty collections. Other issues may include the federal management of split estates, which occur when the surface and subsurface rights are held by different entities."], "subsections": [{"section_title": "Onshore Resources", "paragraphs": [], "subsections": [{"section_title": "Oil and Natural Gas", "paragraphs": ["Onshore oil and natural gas produced on federal lands in 2017 accounted for 5% and 9% of total U.S. oil and gas production, respectively. Development of oil, gas, and coal on federal lands is governed primarily by the Mineral Leasing Act of 1920 (MLA). The MLA authorizes the Secretary of the Interior\u2014through BLM\u2014to lease the subsurface rights to most BLM and FS lands that contain fossil fuel deposits, with the federal government retaining title to the lands. Leases include an annual rental fee and a royalty payment generally determined by a percentage of the value or amount of the resource removed or sold from the federal land. Congress has at times debated raising the onshore royalty rate for federal oil and gas leases, which has remained at the statutory minimum of 12.5% since the enactment of the MLA in 1920. ", "Access to federal lands for energy and mineral development has been controversial. The oil and gas industry contends that entry into currently unavailable areas is necessary to ensure future domestic oil and gas supplies. Opponents maintain that the restricted lands are unique or environmentally sensitive and that the United States could realize equivalent energy gains through conservation and increased exploration on current leases or elsewhere. Another controversial issue is the permitting process and timeline, which the Energy Policy Act of 2005 (EPAct05) revised for oil and gas permits. An additional contested issue has been whether to pursue oil and gas development in the Arctic National Wildlife Refuge in northeastern Alaska. P.L. 115-97 , enacted in December 2017, provided for the establishment of an oil and gas program in the refuge. "], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS In Focus IF10127, Energy and Mineral Development on Federal Land , by Marc Humphries.", "CRS Report R42432, U.S. Crude Oil and Natural Gas Production in Federal and Nonfederal Areas , by Marc Humphries.", "CRS Report RL33872, Arctic National Wildlife Refuge (ANWR): An Overview , by Laura B. Comay, Michael Ratner, and R. Eliot Crafton.", "CRS Report R43891, Mineral Royalties on Federal Lands: Issues for Congress , by Marc Humphries."], "subsections": []}]}, {"section_title": "Coal", "paragraphs": ["Congress debates several issues regarding coal production on federal lands, including how to balance coal production against other resource values and the potential effects of coal production on issues related to climate change. Other concerns include how to assess the value of the coal resource, what is the fair market value for the coal, and what should be the government's royalty. A 2013 GAO analysis found inconsistencies in how BLM evaluated and documented federal coal leases. In addition, a 2013 DOI Inspector General report found that BLM may have violated MLA provisions by accepting below-cost bids for federal coal leases. The Obama Administration issued a new rule for the valuation of coal, which reaffirmed that the value for royalty purposes is at or near the mine site and that gross proceeds from arm's-length contracts are the best indication of market value. This rule was repealed by the Trump Administration on August 7, 2017 (to comply with Executive Order (E.O.) 13783), returning to the previous valuation rules in place. E.O. 13783 also lifted \"any and all\" moratoria on federal coal leasing put in place by the Obama Administration. "], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS Report R44922, The U.S. Coal Industry: Historical Trends and Recent Developments , by Marc Humphries."], "subsections": []}]}]}, {"section_title": "Renewable Energy on Federal Land", "paragraphs": ["Both BLM and FS manage land that is considered suitable for renewable energy generation and as such have authorized projects for geothermal, wind, solar, and biomass energy production. BLM manages the solar and wind energy programs on about 20 million acres for each program and about 800 geothermal leases on federal lands. Interest in renewable energy production comes in part from concern over the impact of emissions from fossil fuel-fired power plants and the related adoption of statewide renewable portfolio standards that require electricity producers to supply a certain minimum share (which varies by state) of electricity from renewable sources. Congressional interest in renewable energy resources on onshore federal lands has focused on whether to expand the leasing program for wind and solar projects versus maintaining the current right-of-way authorization process, and how to balance environmental concerns with the development and production of these resources. ", "Geothermal Energy . Geothermal energy is produced from heat stored under the surface of the earth. Geothermal leasing on federal lands is conducted under the authority of the Geothermal Steam Act of 1970, as amended, and is managed by BLM, in consultation with FS. Wind and Solar Energy . Development of solar and wind energy sources on BLM and FS lands is governed primarily by right-of-way authorities under Title V of FLPMA. The potential wildlife impacts from wind turbines and water supply requirements from some solar energy infrastructure remain controversial. Issues for Congress include how to manage the leasing process and whether or how to balance such projects against other land uses identified by statute. Woody Biomass. Removing woody biomass from federal lands for energy production has received special attention because of biomass's widespread availability. Proponents assert that removing biomass density on NFS and BLM lands also provides landscape benefits (e.g., improved forest resiliency, reduced risk of catastrophic wildfires). Opponents, however, identify that incentives to use wood and wood waste might increase land disturbances on federal lands, and they are concerned about related wildlife, landscape, and ecosystem impacts. Other issues include the role of the federal government in developing and supporting emerging markets for woody biomass energy production, and whether to include biomass removed from federal lands in the Renewable Fuel Standard."], "subsections": []}, {"section_title": "Locatable Minerals", "paragraphs": ["Locatable minerals include metallic minerals (e.g., gold, silver, copper), nonmetallic minerals (e.g., mica, gypsum), and other minerals generally found in the subsurface. Developing these minerals on federal lands is guided by the General Mining Law of 1872. The law, largely unchanged since enactment, grants free access to individuals and corporations to prospect for minerals in public domain lands, and allows them, upon making a discovery, to stake (or \"locate\") a claim on the deposit. A claim gives the holder the right to develop the minerals and apply for a patent to obtain full title of the land and minerals. Congress has imposed a moratorium on mining claim patents in the annual Interior appropriations laws since FY1995, but has not restricted the right to stake claims or extract minerals.", "The mining industry supports the claim-patent system, which offers the right to enter federal lands and prospect for and develop minerals. Critics consider the claim-patent system to not properly value publicly owned resources because royalty payments are not required and the amounts paid to maintain a claim and to obtain a patent are small. New mining claim location and annual claim maintenance fees are currently $37 and $155 per claim, respectively."], "subsections": []}, {"section_title": "Offshore Resources", "paragraphs": ["The federal government is responsible for managing energy resources in approximately 1.7 billion acres of offshore areas belonging to the United States (see Figure 1 ). These offshore resources are governed by the Outer Continental Shelf Lands Act of 1953 (OCSLA), as amended, and management involves balancing domestic energy demands with protection of the environment and other factors. Policymakers have debated access to ocean areas for offshore drilling, weighing factors such as regional economic needs, U.S. energy security, the vulnerability of oceans and shoreline communities to oil-spill risks, and the contribution of oil and gas drilling to climate change. Some support banning drilling in certain regions or throughout the OCS, through congressional moratoria, presidential withdrawals, and other measures. Others contend that increasing offshore oil and gas development will strengthen and diversify the nation's domestic energy portfolio and that drilling can be done in a safe manner that protects marine and coastal areas. "], "subsections": [{"section_title": "Offshore Oil and Gas Leases", "paragraphs": ["The Bureau of Ocean Energy Management administers approximately 2,600 active oil and gas leases on nearly 14 million acres on the OCS. Under the OCSLA, BOEM prepares forward-looking, five-year leasing programs to govern oil and gas lease sales. BOEM released its final leasing program for 2017-2022 in November 2016, under the Obama Administration. The program schedules 10 lease sales in the Gulf of Mexico region and 1 in the Alaska region, with no sales in the Atlantic or Pacific regions. In January 2018, under the Trump Administration, BOEM released a draft proposed program for 2019-2024, which would replace the final years of the Obama Administration program. The program proposes 12 lease sales in the Gulf of Mexico region, 19 sales in the Alaska region, 9 lease sales in the Atlantic region, and 7 lease sales in the Pacific region. The proposed sales would cover all U.S. offshore areas not prohibited from oil and gas development, including areas with both high and low levels of estimated resources. The draft proposal is the first of three program versions; under the OCSLA process, subsequent versions could remove proposed lease sales but could not add new sales. ", "Under the OCSLA, the President may withdraw unleased lands on the OCS from leasing disposition. President Obama indefinitely withdrew from leasing disposition large portions of the Arctic OCS as well as certain areas in the Atlantic region, but these withdrawals were modified by President Trump. Congress also has established leasing moratoria; for example, the GOMESA established a moratorium on preleasing, leasing, and related activity in the eastern Gulf of Mexico through June 2022.", "The 116 th Congress may consider multiple issues related to offshore oil and gas exploration, including questions about allowing or prohibiting access to ocean areas and how such changes may impact domestic energy markets and affect the risk of oil spills. Other issues concern the use of OCS revenues and the extent to which they should be shared with coastal states (see \" Federal Payment and Revenue-Sharing Programs \" section)."], "subsections": []}, {"section_title": "Offshore Renewable Energy Sources", "paragraphs": ["BOEM also is responsible for managing leases, easements, and rights-of-way to support development of energy from renewable ocean energy resources, including offshore wind, thermal power, and kinetic forces from ocean tides and waves. As of January 2019, BOEM had issued 13 offshore wind energy leases in areas off the coasts of Massachusetts, Rhode Island, Delaware, Maryland, Virginia, New York, New Jersey, and North Carolina. In December 2016, the first U.S. offshore wind farm, off the coast of Rhode Island, began regular operations. Issues for Congress include whether to take steps to facilitate the development of offshore wind and other renewables, such as through research and development, project loan guarantees, extension of federal tax credits for renewable energy production, or oversight of regulatory issues for these emerging industries."], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS Report R44504, The Bureau of Ocean Energy Management's Five-Year Program for Offshore Oil and Gas Leasing: History and Final Program for 2017-2022 , by Laura B. Comay, Marc Humphries, and Adam Vann.", "CRS Report R44692, Five-Year Program for Federal Offshore Oil and Gas Leasing: Status and Issues in Brief , by Laura B. Comay.", "CRS Report RL33404, Offshore Oil and Gas Development: Legal Framework , by Adam Vann."], "subsections": []}]}]}]}, {"section_title": "Forest Management", "paragraphs": ["Management of federal forests presents several policy questions for Congress. For instance, there are questions about the appropriate level of timber harvesting on federal forest lands, particularly FS and BLM lands, and how to balance timber harvesting against the other statutory uses and values for these federal lands. Further, Congress may debate whether or how the agencies use timber harvesting or other active forest management techniques to achieve other resource-management objectives, such as improving wildlife habitat or improving a forest's resistance and resilience to disturbance events (e.g., wildfire, ice storm). ", "FS manages 145 million acres of forests and woodlands in the National Forest System (NFS). In FY2018, approximately 2.8 billion board feet of timber and other forest products were harvested from NFS lands, at a value of $188.8 million. BLM manages approximately 38 million acres of forest and woodlands. The vast majority are public domain forests, managed under the principles of multiple use and sustained yield as established by FLPMA. The 2.6 million acres of Oregon & California (O&C) Railroad Lands in western Oregon, however, are managed under a statutory direction for permanent forest production, as well as watershed protection, recreation, and contributing to the economic stability of local communities and industries. In FY2018, approximately 177.8 million board feet of timber and other forest products were harvested from BLM lands, at a value of $41.3 million. The NPS and FWS have limited authorities to cut, sell, or dispose of timber from their lands and have established policies to do so only in certain cases, such as controlling for insect and disease outbreaks. ", "In the past few years, the ecological condition of the federal forests has been one focus of discussion. Many believe that federal forests are ecologically degraded, contending that decades of wildfire suppression and other forest-management decisions have created overgrown forests overstocked with biomass (fuels) that are susceptible to insect and disease outbreaks and can serve to increase the spread or intensity of wildfires. These observers advocate rapid action to improve forest conditions, including activities such as prescribed burning, forest thinning, salvaging dead and dying trees, and increased commercial timber production. Critics counter that authorities to reduce fuel levels are adequate, treatments that remove commercial timber degrade other ecosystem conditions and waste taxpayer dollars, and expedited processes for treatments may reduce public oversight of commercial timber harvesting. The 115 th Congress enacted several provisions intended to expedite specific forest management projects on federal land and encourage forest restoration projects across larger areas, including projects which involve nonfederal landowners. "], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS Report R45696, Forest Management Provisions Enacted in the 115th Congress , by Katie Hoover et al.", "CRS Report R45688, Timber Harvesting on Federal Lands , by Anne A. Riddle.", "CRS Report R43872, National Forest System Management: Overview, Appropriations, and Issues for Congress , by Katie Hoover.", "CRS Report R42951, The Oregon and California Railroad Lands (O&C Lands): Issues for Congress , by Katie Hoover."], "subsections": []}]}, {"section_title": "Range Management", "paragraphs": [], "subsections": [{"section_title": "Livestock Grazing", "paragraphs": ["Management of federal rangelands, particularly by BLM and FS, presents an array of policy matters for Congress. Several issues pertain to livestock grazing. There is debate about the appropriate fee that should be charged for grazing private livestock on BLM and FS lands, including what criteria should prevail in setting the fee. Today, these federal agencies charge fees under a formula established by law in 1978, then continued indefinitely through an executive order issued by President Reagan in 1986. The BLM and FS are generally charging a 2019 grazing fee of $1.35 per animal unit month (AUM) for grazing on their lands. Conservation groups, among others, generally seek increased fees to recover program costs or approximate market value, whereas livestock producers who use federal lands want to keep fees low to sustain ranching and rural economies. ", "The BLM and FS issue to ranchers permits and/or leases that specify the terms and conditions for grazing on agency lands. Permits and leases generally cover a 10-year period and may be renewed. Congress has considered whether to extend the permit/lease length (e.g., to 20 years) to strengthen the predictability and continuity of operations. Longer permit terms have been opposed because they potentially reduce the opportunities to analyze the impact of grazing on lands and resources. ", "The effect of livestock grazing on rangelands has been part of an ongoing debate on the health and productivity of rangelands. Due to concerns about the impact of grazing on rangelands, some recent measures would restrict or eliminate grazing, for instance, through voluntary retirement of permits and leases and subsequent closure of the allotments to grazing. These efforts are opposed by those who assert that ranching can benefit rangelands and who support ranching on federal lands for not only environmental but lifestyle and economic reasons. Another focus of the discussion on range health and productivity is the spread of invasive and noxious weeds. (See \" Invasive Species \" section, below.) "], "subsections": []}, {"section_title": "Wild Horses and Burros", "paragraphs": ["There is continued congressional interest in management of wild horses and burros, which are protected on BLM and FS lands under the Wild Free-Roaming Horses and Burros Act of 1971. Under the act, the agencies inventory horse and burro populations on their lands to determine appropriate management levels (AMLs). Most of the animals are on BLM lands, although both BLM and FS have populations exceeding their national AMLs. BLM estimates the maximum AML at 26,690 wild horses and burros, and it estimates population on the range at 81,951. Furthermore, off the range, BLM provides funds to care for 50,864 additional wild horses and burros in short-term corrals, long-term (pasture) holding facilities, and eco-sanctuaries. The Forest Service estimates population on lands managed by the agency at 9,300 wild horses and burros.", "The agencies are statutorily authorized to remove excess animals from the range and use a variety of methods to meet AML. This includes programs to adopt and sell animals, to care for animals off-range, to administer fertility control, and to establish ecosanctuaries. Questions for Congress include the sufficiency of these authorities and programs for managing wild horses and burros. Another controversial question is whether the agencies should humanely destroy excess animals, as required under the 1971 law, or whether Congress should continue to prohibit the BLM from using funds to slaughter healthy animals. Additional topics of discussion center on the costs of management, particularly the relatively high cost of caring for animals off-range. Other options focus on keeping animals on the range, such as by expanding areas for herds and/or changing the method for determining AML. "], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS Report RS21232, Grazing Fees: Overview and Issues , by Carol Hardy Vincent.", "CRS In Focus IF11060, Wild Horse and Burro Management: Overview of Costs , by Carol Hardy Vincent."], "subsections": []}]}]}, {"section_title": "Recreation", "paragraphs": ["The abundance and diversity of recreational uses of federal lands and waters has increased the challenge of balancing different types of recreation with each other and with other land uses. One issue is how\u2014or whether\u2014fees should be collected for recreational activities on federal lands. The Federal Lands Recreation Enhancement Act (FLREA) established a recreation fee program for the four FLMAs and the Bureau of Reclamation. The authorization ends on September 30, 2020. FLREA authorizes the agencies to charge, collect, and spend fees for recreation on their lands, with most of the money remaining at the collecting site. The 116 th Congress faces issues including whether to let lapse, extend, make permanent, or amend the program. Current oversight issues for Congress relate to various aspects of agency implementation of the fee program, including the determination of fee changes, use of collected revenue, and pace of obligation of fee collections. Supporters of the program contend that it sets fair and similar fees among agencies and keeps most fees on-site for improvements that visitors desire. Some support new or increased fees or full extension of the program to other agencies, especially the U.S. Army Corps of Engineers. Among critics, some oppose recreation fees in general. Others assert that fees are appropriate for fewer agencies or types of lands, that the fee structure should be simplified, or that more of the fees should be used to reduce agency maintenance backlogs. ", "Another contentious issue is the use of off-highway vehicles (OHVs)\u2014all-terrain vehicles, snowmobiles, personal watercraft, and others\u2014on federal lands and waters. OHV use is a popular recreational activity on BLM and FS land, while NPS and FWS have fewer lands allowing them. OHV supporters contend that the vehicles facilitate visitor access to hard-to-reach natural areas and bring economic benefits to communities serving riders. Critics raise concerns about disturbance of nonmotorized recreation and potential damage to wildlife habitat and ecosystems. Issues for Congress include broad questions of OHV access and management, as well as OHV use at individual parks, forests, conservation areas, and other federal sites.", "Access to opportunities on federal lands for hunting, fishing, and recreational shooting (e.g., at shooting ranges) is of perennial interest to Congress. Hunting and fishing are allowed on the majority of federal lands, but some contend they are unnecessarily restricted by protective designations, barriers to physical access, and agency planning processes. Others question whether opening more FLMA lands to hunting, fishing, and recreational shooting is fully consistent with good game management, public safety, other recreational uses, resource management, and the statutory purposes of the lands. Issues for Congress include questions of whether or how to balance hunting and fishing against other uses, as well as management of equipment used for hunting and fishing activities, including types of firearms and composition of ammunition and fishing tackle."], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS In Focus IF10151, Federal Lands Recreation Enhancement Act: Overview and Issues , by Carol Hardy Vincent.", "CRS Report R45103, Hunting and Fishing on Federal Lands and Waters: Overview and Issues for Congress , by R. Eliot Crafton. ", "CRS In Focus IF10746, Hunting, Fishing, and Related Issues in the 115th Congress , by R. Eliot Crafton."], "subsections": []}]}, {"section_title": "Other Land Designations", "paragraphs": ["Congress, the President, and some executive branch officials may establish individual designations on federal lands. Although many designations are unique, some have been more commonly applied, such as national recreation area, national scenic area, and national monument. Congress has conferred designations on some nonfederal lands, such as national heritage areas, to commemorate, conserve, and promote important natural, scenic, historical, cultural, and recreational resources. Congress and previous Administrations also have designated certain offshore areas as marine national monuments or sanctuaries. Controversial issues involve the types, locations, and management of such designations, and the extent to which some designations should be altered, expanded, or reduced.", "In addition, Congress has created three cross-cutting systems of federal land designations to preserve or emphasize particular values or resources, or to protect the natural conditions for biological, recreation, or scenic purposes. These systems are the National Wilderness Preservation System, the National Wild and Scenic Rivers System, and the National Trails System. The units of these systems can be on one or more agencies' lands, and the agencies manage them within parameters set in statute. "], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS Report R45340, Federal Land Designations: A Brief Guide , coordinated by Laura B. Comay.", "CRS Report RL33462, Heritage Areas: Background, Proposals, and Current Issues , by Laura B. Comay and Carol Hardy Vincent.", "CRS Report R41285, Congressionally Designated Special Management Areas in the National Forest System , by Katie Hoover."], "subsections": []}, {"section_title": "National Monuments and the Antiquities Act", "paragraphs": ["The Antiquities Act of 1906 authorizes the President to proclaim national monuments on federal lands that contain historic landmarks, historic and prehistoric structures, or other objects of natural, historic, or scientific interest. The President is to reserve \"the smallest area compatible with the proper care and management of the objects to be protected.\" Seventeen of the 20 Presidents since 1906, including President Trump, have used this authority to establish, enlarge, diminish, or make other changes to proclaimed national monuments. Congress has modified many of these proclamations, abolished some monuments, and created monuments under its own authority. ", "Since the enactment of the Antiquities Act, presidential establishment of monuments sometimes has been contentious. Most recently, the Trump Administration has reviewed and recommended changes to some proclaimed national monuments, and President Trump has modified and established some monuments. ", "Congress continues to address the role of the President in proclaiming monuments. Some seek to impose restrictions on the President's authority to proclaim monuments. Among the bills considered in recent Congresses are those to block monuments from being declared in particular states; limit the size or duration of withdrawals; require the approval of Congress, the pertinent state legislature, or the pertinent governor before a monument could be proclaimed; or require the President to follow certain procedures prior to proclaiming a new monument. ", "Others promote the President's authority to act promptly to protect valuable resources on federal lands that may be vulnerable, and they note that Presidents of both parties have used the authority for over a century. They favor the Antiquities Act in its present form, asserting that the courts have upheld monument designations and that large segments of the public support monument designations for the recreational, preservation, and economic benefits that such designations can bring. "], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS Report R41330, National Monuments and the Antiquities Act , by Carol Hardy Vincent.", "CRS Report R44988, Executive Order for Review of National Monuments: Background and Data , by Carol Hardy Vincent and Laura A. Hanson.", "CRS Report R44886, Monument Proclamations Under Executive Order Review: Comparison of Selected Provisions , by Carol Hardy Vincent and Laura A. Hanson."], "subsections": []}]}, {"section_title": "Wilderness and Roadless Areas", "paragraphs": ["In 1964, the Wilderness Act created the National Wilderness Preservation System, with statutory protections that emphasize preserving certain areas in their natural states. Units of the system can be designated only by Congress. Many bills to designate wilderness areas have been introduced in each Congress. As of March 1, 2019, there were 802 wilderness areas, totaling over 111 million acres in 44 states (and Puerto Rico) and managed by all four of the FLMAs. A wilderness designation generally prohibits commercial activities, motorized access, and human infrastructure from wilderness areas, subject to valid existing rights. Advocates propose wilderness designations to preserve the generally undeveloped conditions of the areas. Opponents see such designations as preventing certain uses and potential economic development in rural areas where such opportunities are relatively limited. ", "Designation of new wilderness areas can be controversial, and questions persist over the management of areas being considered for wilderness designation. FS reviews the wilderness potential of NFS lands during the forest planning process and recommends any identified potential wilderness areas for congressional consideration. Management activities or uses that may reduce the wilderness potential of a recommended wilderness area may be restricted. ", "Questions also persist over BLM wilderness study areas (WSAs). These WSAs are the areas BLM studied as potential wilderness and made subsequent recommendations to Congress regarding their suitability for designation as wilderness. BLM is required by FLPMA to protect the wilderness characteristics of WSAs, meaning that many uses in these areas are restricted or prohibited. Congress has designated some WSAs as wilderness, and has also included legislative language releasing BLM from the requirement to protect the wilderness characteristics of other WSAs.", "FS also manages approximately 58 million acres of lands identified as \"inventoried roadless areas.\" These lands are not part of the National Wilderness Preservation System, but certain activities\u2014such as road construction or timber harvesting\u2014are restricted on these lands, with some exceptions. The Clinton and George W. Bush Administrations each promulgated different roadless area regulations. Both were heavily litigated; however, the Clinton policy to prohibit many activities on roadless areas remains intact after the Supreme Court refused to review a lower court's 2012 decision striking down the Bush rule. In 2018, the Forest Service initiated a rulemaking process to develop a new roadless rule specific to the national forests in the state of Alaska. "], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS Report RL31447, Wilderness: Overview, Management, and Statistics , by Katie Hoover.", "CRS Report R41610, Wilderness: Issues and Legislation , by Katie Hoover and Sandra L. Johnson."], "subsections": []}]}, {"section_title": "The National Wild and Scenic Rivers System and the National Trails System", "paragraphs": ["Congress established the National Wild and Scenic Rivers System with the passage of the Wild and Scenic Rivers Act of 1968. The act established a policy of preserving designated free-flowing rivers for the benefit and enjoyment of present and future generations. River units designated as part of the system are classified and administered as wild, scenic, or recreational rivers, based on the condition of the river, the amount of development in the river or on the shorelines, and the degree of accessibility by road or trail at the time of designation. The system contains both federal and nonfederal river segments. Typically, rivers are added to the system by an act of Congress, but may also be added by state nomination with the approval of the Secretary of the Interior. As of March 1, 2019, there are more than 200 river units with roughly 13,300 miles in 40 states and Puerto Rico, administered by all four FLMAs, or by state, local, or tribal governments. ", "Designation and management of lands within river corridors has been controversial in some cases. Issues include concerns about private property rights and water rights within designated river corridors. Controversies have arisen over state or federal projects prohibited within a corridor, such as construction of major highway crossings, bridges, or other activities that may affect the flow or character of the designated river segment. The extent of local input in developing river management plans is another recurring issue. ", "The National Trails System Act of 1968 authorized a national system of trails, across federal and nonfederal lands, to provide additional outdoor recreation opportunities and to promote access to the outdoor areas and historic resources of the nation. The system today consists of four types of trails and can be found in all 50 states, the District of Columbia, and Puerto Rico. This includes 11 national scenic trails and 19 national historic trails that covers roughly 55,000 miles. In addition, almost 1,300 national recreation trails and 7 connecting-and-side trails have been established administratively as part of the system. National trails are administered by NPS, FS, and BLM, in cooperation with appropriate state and local authorities. Most recreation uses are permitted, as are other uses or facilities that do not substantially interfere with the nature and purposes of the trail. However, motorized vehicles are prohibited on many trails.", "Ongoing issues for Congress include whether to designate additional trails, whether or how to balance trail designation with other potential land uses, what activities should be permitted on trails, and what portion of trail funding should be from federal versus nonfederal sources. Some Members have expressed interest in new types of trails for the system, such as \"national discovery trails,\" which would be interstate trails connecting representative examples of metropolitan, urban, rural, and backcountry regions. "], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS Report R42614, The National Wild and Scenic Rivers System: A Brief Overview , by Sandra L. Johnson and Laura B. Comay.", "CRS Report R43868, The National Trails System: A Brief Overview , by Sandra L. Johnson and Laura B. Comay."], "subsections": []}]}, {"section_title": "National Marine Sanctuaries and Marine National Monuments", "paragraphs": ["The National Marine Sanctuaries Act (NMSA) authorizes the National Oceanic and Atmospheric Administration (NOAA) to designate specific areas for protection of their ecological, aesthetic, historical, cultural, scientific, or educational qualities. The NOAA Office of National Marine Sanctuaries serves as the trustee for the 13 national marine sanctuaries (NMSs) designated under NMSA. Sanctuaries are located in marine areas and waters under state or federal jurisdiction. Sites are designated for specific reasons, such as protecting cultural artifacts (e.g., sunken vessels), particular species (e.g., humpback whales), or unique areas and entire ecosystems (e.g., Monterey Bay). Two areas currently under consideration for designation are Mallows Bay, Potomac River, MD, and Lake Michigan, WI.", "The NMSA requires the development and implementation of management plans for each sanctuary, which provide the basis for managing or limiting incompatible activities. For most NMSs, questions related to developing or amending management plans have focused on identifying and limiting incompatible activities. ", "Five large marine national monuments have been designated by the President under the Antiquities Act, the most recent being the Northeast Canyons and Seamounts Marine National Monument in 2016, the first designated in the Atlantic Ocean. Within the monuments, the removing, taking, harvesting, possessing, injuring, or damaging of monument resources is prohibited except as provided under regulated activities. For example, some exceptions have been provided for recreational fishing and subsistence use within certain marine national monuments. All five marine national monuments are managed cooperatively by the Department of the Interior (FWS) and Department of Commerce (NOAA). ", "One of the main differences between national marine sanctuaries and marine national monuments is their designation process. While monuments are designated by presidential proclamation or through congressional legislation, the NMS designation process is an administrative action, requiring nomination, public scoping, public comment, and congressional and state review prior to the Secretary of Commerce's approval of the designation. Some stakeholders from extractive industries, such as the fishing industry, have voiced concerns that the national monument designation process does not provide opportunities to examine the tradeoffs between resource protection and resource use. On the other hand, some environmentalists have voiced concerns with the low number of NMS designations and what they see as inadequate protection of some sanctuary resources, such as fish populations. Some observers question whether the overriding purpose of the NMSA is to preserve and protect marine areas or to create multiple use management areas. Most agree that the designation and management of national marine sanctuaries and marine national monuments will continue to inspire debate over the role of marine protected areas. The Trump Administration has reviewed and recommended changes to the size and management of some marine national monuments."], "subsections": []}]}, {"section_title": "Species Management", "paragraphs": ["Each FLMA has a responsibility to manage the plant and animal resources under its purview. An agency's responsibilities may be based on widely applicable statutes or directives, including the Endangered Species Act, the Migratory Bird Treaty Act, the Fish and Wildlife Coordination Act, executive orders, and other regulations. Species management could also be based on authorities specific to each FLMA. In addition, each FLMA must work closely with state authorities to address species management issues.", "In the case of the National Wildlife Refuge System (administered by FWS), the conservation of plants and animals is the mission of the system, and other uses are allowed to the extent they are compatible with that mission and any specific purposes of an individual system unit. While most refuges are open for public enjoyment, some refuges or parts of refuges (such as island seabird colonies) might be closed to visitors to preserve natural resources. For the National Park System, resource conservation (including wildlife resources) is part of the National Park Service's dual mission, shared with the other goal of public enjoyment. The FS and BLM have multiple use missions, with species management being one of several agency responsibilities.", "The federal land management agencies do not exercise their wildlife authorities alone. Often, Congress has directed federal agencies to share management of their wildlife resources with state agencies. For example, where game species are found on federal land and hunting is generally allowed on that land, federal agencies work with states on wildlife censuses and require appropriate state licenses to hunt on the federal lands. In addition, federal agencies often cooperate with states to enhance wildlife habitat for the benefit of both jurisdictions.", "The four FLMAs do not each maintain specific data on how many acres of land are open to hunting, fishing, and recreational shooting. However, both BLM and FS are required to open lands under their administration to hunting, fishing, and recreational shooting, subject to any existing and applicable law, unless the respective Secretary specifically closes an area. Both agencies estimate that nearly all of their lands are open to these activities. FWS is required to report the number of refuges open to hunting and fishing as well as the acreage available for hunting on an annual basis. As of FY2017, there were 277 refuges open to fishing and 336 refuges open to hunting, providing access to 86 million acres for hunting. Congress frequently considers species management issues, such as balancing land and resources use, providing access to hunting and fishing on federal lands, and implementing endangered species protections. "], "subsections": [{"section_title": "Endangered Species", "paragraphs": ["The protection of endangered and threatened species\u2014under the 1973 Endangered Species Act (ESA) \u2014can be controversial due to balancing the needs for natural resources use and development and species protection. Under the ESA, all federal agencies must \"utilize their authorities in furtherance of the purposes of this Act by carrying out programs for the conservation of endangered species and threatened species listed pursuant to ... this Act.\" As a result, the FLMAs consider species listed as threatened or endangered in their land management plans, timber sales, energy or mineral leasing plans, and all other relevant aspects of their activities that might affect listed species. They consult with FWS (or NMFS, for most marine species and for anadromous fish such as salmon) about those effects. The majority of these consultations result in little or no change in the actions of the land managers. ", "Congress has considered altering ESA implementation in various ways. For example, bills were introduced in the 115 th Congress that would have redefined the process for listing a species, defined the types of data used to evaluate species, and changed the types of species that can be listed under ESA, among others. Debate has also centered on certain species, particularly where conservation of species generates conflict over resources in various habitats. Examples of these species include sage grouse (energy and other resources in sage brush habitat), grey wolves (ranching), and polar bears (energy development in northern Alaska), among others. Proposals resulting from issues regarding certain species include granting greater authority to states over whether a species may be listed, changing the listing status of a species, and creating special conditions for the treatment of a listed species. "], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS Report RL31654, The Endangered Species Act: A Primer , by Pervaze A. Sheikh.", "CRS Report RL32992, The Endangered Species Act and \"Sound Science , \" by Pervaze A. Sheikh.", "CRS Report R40787, Endangered Species Act (ESA): The Exemption Process , by Pervaze A. Sheikh."], "subsections": []}]}, {"section_title": "Invasive Species", "paragraphs": ["While habitat loss is a major factor in the decline of species, invasive species have long been considered the second-most-important factor. Invasive species\u2014nonnative or alien species that cause or are likely to cause harm to the environment, the economy, or human health upon introduction, establishment, and spread\u2014have the potential to affect habitats and people across the United States and U.S. territories, including on federal lands and waters. For example, gypsy moths have been a pest in many eastern national forests as well as Shenandoah National Park. A fungus causing white-nose syndrome has caused widespread mortality in bat populations in the central and eastern states, including those in caves on national park and national forest lands. Burmese pythons prey on native species of birds, mammals, and reptiles in south Florida, including in the Everglades National Park. Many stakeholders believe the most effective way to deal with invasive species is to prevent their introduction and spread. For species already introduced, finding effective management approaches is important, though potentially difficult or controversial. Control efforts can be complex and expensive, and may require collaboration and coordination between multiple stakeholders.", "Addressing invasive species is a responsibility shared by several federal agencies, in addition to the FLMAs. These agencies are required to plan and carry out control activities and to develop strategic plans to implement such activities. Control activities are required to manage invasive populations, prevent or inhibit the introduction and spread invasive species, and to restore impacted areas. Further, agencies must consider both ecological and economic aspects in developing their strategic plans and implementing control activities, and they must coordinate with state, local, and tribal representatives. Legislation to address the introduction and spread of invasive species as well as the impacts that arise from these species is of perennial interest to Congress. "], "subsections": [{"section_title": "CRS Product", "paragraphs": ["CRS Report R43258, Invasive Species: Major Laws and the Role of Selected Federal Agencies , by Ren\u00e9e Johnson, R. Eliot Crafton, and Harold F. Upton.", "CRS In Focus IF11011, Invasive Species: A Brief Overview , by R. Eliot Crafton and Sahar Angadjivand."], "subsections": []}]}]}, {"section_title": "Wildfire Management", "paragraphs": ["Wildfire is a concern because it can lead to loss of human life, damage communities and timber resources, and affect soils, watersheds, water quality, and wildlife. Management of wildfire\u2014an unplanned and unwanted wildland fire\u2014includes preparedness, suppression, fuel reduction, site rehabilitation, and more. A record-setting 10.1 million acres burned in 2015 due to wildfire, and 10.0 million acres burned two years later in 2017. In 2018, 8.8 million acres burned. ", "The federal government is responsible for managing wildfires that begin on federal land. FS and DOI have overseen wildfire management, with FS receiving approximately two-thirds of federal funding. Wildfire management funding\u2014including supplemental appropriations\u2014has averaged $3.8 billion annually over the last 10 years (FY2009 through FY2018), ranging from a low of $2.7 billion in FY2012 to a high of $4.9 billion in both FY2016 and FY2018.", "Congressional activity regarding wildfire management typically peaks during the fire season, and during the early part of the budget process. Legislative issues for Congress include oversight of the agencies' fire management activities and other wildland management practices that have altered fuel loads over time, and consideration of programs and processes for reducing fuel loads. Funding also is a perennial concern, particularly for suppression purposes, an activity for which costs are generally rising but vary annually and are difficult to predict. The 115 th Congress enacted a new adjustment to the discretionary spending limits for wildfire suppression operations, starting in FY2020. This means that Congress can appropriate some wildfire suppression funds\u2014subject to certain criteria\u2014effectively outside of the discretionary spending limits. There is also congressional interest in the federal roles and responsibilities for wildfire protection, response, and damages, including activities such as air tanker readiness and efficacy and liability issues. Other issues include the use of new technologies for wildfire detection and response, such as unmanned aircrafts. Another issue is the impact of the expanding wildland-urban interface (WUI), which is the area where structures (usually homes) are intermingled with or adjacent to vegetated wildlands (forests or rangelands). The proximity to vegetated landscapes puts these areas at a potential risk of experiencing wildfires and associated damage. Approximately 10% of all land within the lower 48 states is classified as WUI. "], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS In Focus IF10244, Wildfire Statistics , by Katie Hoover.", "CRS In Focus IF10732, Federal Assistance for Wildfire Response and Recovery , by Katie Hoover.", "CRS Report R44966, Wildfire Suppression Spending: Background, Issues, and Legislation in the 115th Congress , by Katie Hoover and Bruce R. Lindsay.", "CRS Report R45005, Wildfire Management Funding: Background, Issues, and FY2018 Appropriations , by Katie Hoover, Wildfire Management Funding: Background, Issues, and FY2018 Appropriations, by Katie Hoover."], "subsections": []}]}]}}
{"id": "R45168", "title": "Department of State, Foreign Operations and Related Programs: FY2019 Budget and Appropriations", "released_date": "2019-03-25T00:00:00", "summary": ["The Trump Administration submitted to Congress its FY2019 budget request on February 12, 2018. The proposal included $41.86 billion for the Department of State, Foreign Operations, and Related Programs (SFOPS). Of that amount, $13.26 billion was for State Department operations, international broadcasting, and related agencies, and $28.60 billion for foreign operations. With the enactment of the Bipartisan Budget Act of 2018 (BBA; P.L. 115-123, February 9, 2018), which raised discretionary spending limits set by the Budget Control Act of 2011 (BCA; P.L. 112-25), the Administration's FY2019 foreign affairs funding request was entirely within enduring (base) funds; no Overseas Contingency Operations (OCO) funding was included the SFOPS request for the first time since FY2012.", "The FY2019 request would have represented a 23.3% decrease in SFOPS funding compared with FY2018 actual funding levels. The proposed State and related agency funding would have been 18.7% below FY2018 funding and the foreign operations funding would have been reduced by 25.2%. In the State and related programs budget, cuts were proposed for several accounts, including the diplomatic security accounts, contributions to international organizations, and contributions for international peacekeeping activities. In the foreign operations budget, cuts would have been applied across all accounts, with disproportionately large cuts proposed for humanitarian assistance, multilateral assistance, and funding for bilateral development programs focused on agriculture, education, and democracy promotion.", "Both the House and Senate appropriations committees approved FY2019 SFOPS bills that included funding at higher levels than the Administration requested and closer to FY2018 funding. H.R. 6385, approved by the House appropriations committee on June 20, 2018, would have funded SFOPS accounts at $54.177 billion. S. 3108, approved by the Senate appropriations committee on June 21, 2018, would have provided $54.602 billion for SFOPS accounts.", "FY2019 began with seven appropriations bills, including SFOPS, unfinished. Congress and the President approved continuing resolutions to fund the affected federal agencies through December 21, 2018 at the FY2018 level (P.L. 115-245, Division C and P.L. 115-298). After December 21, a partial shutdown of the government, including SFOPS funded agencies, occurred. On January 25, 2019, an agreement was reached to continue funding for SFOPS and other appropriations that had lapsed through February 15, at the FY2018 level (P.L. 116-5). On February 14, Congress passed, and the President later signed into law, a full year omnibus appropriation that included SFOPS funding (P.L. 116-6, Division F).", "P.L. 116-6 included a total of $54.377 billion for SFOPS accounts in FY2019, a 0.3% decrease from the FY2018 funding level and about 30% more than the Administration's request. Of that enacted total, $8.0 billion, or 14.7%, was designated as OCO.", "This report provides an account-by-account comparison of the FY2019 SFOPS request, House and Senate SFOPS legislation and the final FY2019 SFOPS appropriation to FY2018 funding in Appendix A. The International Affairs (function 150) budget in Appendix B provides a similar comparison.", "This report will not be further updated unless there is further congressional activity on FY2019 appropriations."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["On February 12, 2018, the Trump Administration submitted to Congress its FY2019 budget request, which included $41.86 billion of base (or enduring) funds for the Department of State, Foreign Operations, and Related Programs (SFOPS). Of that amount, $13.26 billion would have been for State operations, international broadcasting, and related agencies and $28.60 billion for foreign operations. Comparing the request with the FY2018 actual SFOPS funding levels, the FY2019 request represented a 23.3% decrease in SFOPS funding. The proposed State and related agency funding would have been 18.7% below FY2018 funding levels, and the foreign operations funding would have been reduced by 25.2%. The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), signed into law on February 15, included a total of $54.377 billion for SFOPS accounts, a 0.3% decrease over the FY2018 funding level and about 30% more than the Administration's request. An account-by-account comparison of the SFOPS request with the FY2018 actual funding and FY2019 enacted appropriation is provided in Appendix A . International Affairs 150 function funding levels are detailed in Appendix B . A chart depicting the components of the SFOPS appropriations bill is in Appendix C . A glossary is provided in Appendix D ."], "subsections": [{"section_title": "Bipartisan Budget Act of 2018", "paragraphs": ["The appropriations process for FY2019 was shaped by the Bipartisan Budget Act of 2018 (BBA, H.R. 1892 , P.L. 115-123 ), which Congress passed on February 9, 2018. The act raised the overall revised discretionary spending limits set by the Budget Control Act of 2011 (BCA, P.L. 112-25 ) from $1.069 trillion for FY2017 to $1.208 trillion for FY2018 and to $1.244 trillion for FY2019. The BBA increased FY2019 defense funding levels by $85 billion, from $562 billion to $647 billion, and nondefense funding (including SFOPS) by $68 billion, from $529 billion to $597 billion. It also extended direct spending reductions from FY2021 in the original BCA through FY2027, as amended. "], "subsections": []}, {"section_title": "Enduring vs. Overseas Contingency Operations Request", "paragraphs": ["Every year since FY2012, the Administration has distinguished SFOPS spending as either enduring (base) funds or those to support overseas contingency operations (OCO). The OCO designation gained increased significance with enactment of the BCA, which specified that emergency or OCO funds do not count toward the spending limits established by the act. In early years of requesting OCO funds, the Obama Administration described OCO requests for \"extraordinary, but temporary, costs of the Department of State and USAID in Iraq, Afghanistan, and Pakistan.\" Syria and other countries were added in later years, and the Trump Administration expanded OCO use in its first budget request in FY2018 to be available for longer-term, core activities and more countries. For FY2019, because the BBA raised spending limits, the Administration did not seek foreign affairs OCO funds, but requested the entire SFOPS budget within base funds. The final legislation, P.L. 116-6 , included $8.0 billion designated as OCO, or about 15% of enacted SFOPS funding. For funding trends, see Table 1 ."], "subsections": []}]}, {"section_title": "Congressional Action", "paragraphs": ["House and Senate SFOPS Legislation . FY2019 SFOPS legislation was introduced and approved by the full appropriations committee in each chamber. The House legislation, H.R. 6385 , included total SFOPS funding of $54.18 billion, 0.6% lower than FY2018 funding and 29% more than requested. The Senate proposal, S. 3108 , would have provided $54.602 billion for SFOPS accounts, which is about 0.1% more than FY2018 funding and 30% more than requested. Neither bill received floor consideration in its respective chamber.", "Continuing Resolutions . On September 28, 2018, the President signed into law P.L. 115-245 , legislation which included the Continuing Appropriations Act, 2019 (CR) to continue funding for SFOPS accounts (among seven other appropriations that were not completed by the start of FY2019) at a prorated 2018 funding level through December 7, 2018. Funds designated as OCO in 2018 appropriations continued to be so designated for SFOPS in the CR. On December 3, 2018, Congress and the Administration extended funding through December 21, 2018 by enacting P.L. 115-298 . After December 21, funding lapsed and a partial shutdown of the government occurred. On January 25, an agreement was reached to continue funding for SFOPS and other appropriations that had lapsed through February 15, at the FY2018 level ( P.L. 116-5 ). ", "Enacted Legislation . On February 14 Congress passed, and the President later signed into law, a full year appropriation ( P.L. 116-6 , Division F) that included $54.38 billion in total SFOPS funding, a 0.3% decrease from the FY2018 funding level and about 30% more than the Administration's request. Of that total, $16.46 billion was for State Department operations and related agencies; $37.92 billion for foreign operations accounts. About 14.7%, or $8.0 billion, was designated as OCO."], "subsections": []}, {"section_title": "Key Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "Department of State and Related Agency Funding6", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The State Department sought to cut funding for the Department of State and Related Agency category by 19% in FY2019 from FY2018 funding levels, to $13.26 billion. Conversely, both the House and Senate committee bills sought to maintain funding near previous fiscal year levels. The House committee bill would have increased funding in this category to $16.38 billion, or 0.4% above the FY2018 funding level. The Senate committee bill would have raised funding to $16.34 billion, around $40 million less than the House committee bill and approximately 0.1% more than the FY2018 funding level. ", "Similar to the House and Senate committee bills, the FY2019 enacted appropriation ( P.L. 116-6 ) maintained funding for the State Department and Related Agency category slightly above FY2018 funding level. It provided $16.46 billion for this category, or 0.9% more than the F2018 level. ", "The State Department's request sought to fund the entirety of this category through base (or enduring) funding. Following passage of the BBA and the resulting increase in discretionary spending cap levels for FY2018 and FY2019, the State Department moved the $3.69 billion request for Overseas Contingency Operations (OCO) in this category into the base budget request. Both the House and Senate committee bills sought to retain OCO funding within the Department of State and Related Agency category. The House committee bill would have provided $3.03 billion for OCO, or around 28% less than the FY2018 figure of $4.18 billion. The Senate committee bill would have provided $4.11 billion, which constituted about 2% less than FY2018 level. While the House committee bill would have afforded approximately $1.08 billion less for OCO than the Senate committee bill, the House committee bill provided around $1.12 billion more in enduring funding ($13.35 billion) than the Senate committee bill ($12.23 billion). ", "As with the House and Senate committee bills, P.L. 116-6 retained OCO funding for the Department of State and Related Agency category. The law provided a total of $4.37 billion for OCO, or 4.5% more than the FY2018 funding level. While the law provided more for OCO than either the Senate or House committee bills, it provided less in enduring funding ($12.09 billion). ", "Areas where the State Department's proposed cuts were focused included the diplomatic security accounts (the Worldwide Security Protection programmatic allocation within the Diplomatic Programs account and, separately, the Embassy Security, Construction, and Maintenance account), Contributions to International Organizations, and Contributions for International Peacekeeping Activities. In most cases, P.L. 116-6 , in a manner similar to the House and Senate committee bills, maintained annual budget authority for these accounts closer to the FY2018 funding levels than the Administration requested (see following sections for more detailed analysis). ", "The State Department also requested $246.2 million to implement the Leadership and Modernization Impact Initiative, which serves as the implementation phase of the department's \"Redesign\" efforts. While neither the House nor the Senate committee bill directly addressed the Impact Initiative, both included provisions enabling Congress to conduct oversight of any broader reorganization efforts at the department. The enacted legislation, P.L. 116-6 , took the same approach. ", " Table 3 provides an overview of proposed changes to selected accounts within the State Department and Related Agency category. "], "subsections": []}, {"section_title": "Diplomatic Programs", "paragraphs": ["Under the State Department's budget request, the Diplomatic Programs account, which is the State Department's principal operating appropriation, would have declined by 11% from the FY2018 funding level of $8.82 billion, to $7.81 billion. According to the State Department, this account provides funding for \"core people, infrastructure, security, and programs that facilitate productive and peaceful U.S. relations\" with foreign governments and international organizations. The House and Senate committee bills would have provided $8.80 billion and $8.92 billion, respectively, for Diplomatic Programs. For FY2019 enacted, P.L. 116-6 provided $9.17 billion, or 4% more than the FY2018 funding level and 17% more than the State Department's request. ", "In Section 7081 of the Consolidated Appropriations Act, 2017 ( P.L. 115-31 ), Congress authorized the establishment of a new \"Consular and Border Security Programs\" (CBSP) account into which consular fees shall be deposited for the purposes of administering consular and border security programs. As a result, consular fees retained by the State Department to fund consular services will be credited to this new account. The State Department thus requested that Congress rename the former Diplomatic and Consular Programs account \"Diplomatic Programs.\" However, because many consular fees are generated and retained by the State Department to administer consular programs, they do not comprise part of the department's annual appropriations and therefore do not count against overall funds appropriated annually for this account. The FY2019 enacted legislation, P.L. 116-6 , authorized the renaming of Diplomatic and Consular Programs to Diplomatic Programs, as did the House and Senate committee bills. "], "subsections": [{"section_title": "Personnel", "paragraphs": ["The Diplomatic Programs account provides funds for a large share of U.S. direct hire positions, including but not limited to State Department Foreign Service and Civil Service officers. Although the Trump Administration lifted the federal hiring freeze upon issuance of OMB M-17-22 on April 12, 2017, the State Department elected to keep its own hiring freeze in place. The Department of State released guidance in May 2018 lifting the hiring freeze and allowing the department to increase staffing to December 31, 2017 levels. ", "Some Members of Congress expressed concern with the hiring freeze and the continued impacts of perceived personnel shortages at the Department of State. Both the House and Senate committee bills, and the committee reports accompanying those bills, included oversight provisions pertaining to State Department personnel levels. In this vein, Section 7073 of P.L. 116-6 required that no appropriated funds may be used to expand or reduce the size of the State Department and USAID's Civil Service, Foreign Service, eligible family member, and locally employed staff workforce from the on-board levels as of December 31, 2017 without consultation with the Committees on Appropriations and Foreign Relations of the Senate and the Committees on Appropriations and Foreign Affairs of the House of Representatives. Section 7073 also required the Secretary of State to submit reports to Congress, beginning 60 days after enactment of the law, and every 60 days thereafter until September 30, 2020, regarding the State Department's on-board personnel levels, hiring, and attrition of the Civil Service, Foreign Service, eligible family member, and locally employed staff workforce. These reports were also required to include a hiring plan for maintaining Foreign Service and Civil Service personnel numbers at not less than December 31, 2017, levels through FY2019. Among other personnel-related provisions, the joint explanatory statement accompanying this law noted that keeping personnel at these levels reflected \"minimum necessary hiring\" and encouraged the Secretary of State to work with Congress to increase hiring above such levels as appropriate. "], "subsections": []}, {"section_title": "Diversity", "paragraphs": ["The Human Resources funding category within Diplomatic Programs provides funding for the Charles B. Rangel International Affairs and Thomas R. Pickering Foreign Affairs fellowship programs to promote greater diversity in the Foreign Service, as authorized by Section 47 of the State Department Basic Authorities Act (P.L. 84-885). While Congress required the State Department to expand the number of fellows participating in the Rangel and Pickering programs by 10 apiece pursuant to Section 706 of the Department of State Authorities Act, 2017 ( P.L. 114-323 ), it has provided the department the discretion to fund these programs at levels it deems appropriate from monies appropriated for Human Resources. P.L. 116-6 , like the House and Senate committee bills, continued to provide such discretion to the State Department. In addition, the House committee report indicated support for department efforts to increase diversity in hiring, including through the Rangel and Pickering programs. It also encouraged the Secretary of State to explore more opportunities to further the goal of increasing workforce diversity. The Senate committee report recommended the continued expansion of the department's workforce diversity programs and directed that qualified graduates of the Rangel and Pickering programs shall be inducted into the Foreign Service. While neither P.L. 116-6 nor the accompanying joint explanatory statement addressed the Rangel and Pickering programs specifically or Foreign Service diversity more generally, the joint explanatory statement did not negate any of the language in the House and Senate committee reports. "], "subsections": []}, {"section_title": "Overseas Programs", "paragraphs": ["The Diplomatic Programs account also provides funding for a number of overseas programs. These include programs carried out by the Bureau of Conflict and Stabilization Operations and the department's regional bureaus. Activities of the department's Bureau of Medical Services, which is responsible for providing health care services to U.S. government employees and their families assigned to overseas posts, are also funded through this account. ", "Public diplomacy programs are among the overseas programs funded through Diplomatic Programs, which include the Global Engagement Center's (GEC's) countering state disinformation (CSD) program. According to the State Department, planned CSD activities, for which $20 million was requested, included \"coordinating U.S. government efforts in specific sub-regions; enhancing the capacity of local actors to build resilience against disinformation, including thwarting attacks on their IT systems; providing attribution of adversarial disinformation; and convening anti-disinformation practitioners, journalists, and other influencers to exchange best practices, build networks, and generate support for U.S. efforts against disinformation.\" The House committee report registered concern regarding \"foreign propaganda and disinformation that threatens United States national security, especially as carried out by China, Russia, and extremists groups\" and asserted that the GEC \"is expected to use a wide range of technologies and techniques to counter these campaigns,\" consistent with its statutory mandate. The Senate committee report recommended up to $75.4 million for the GEC, including up to $40 million for countering foreign state propaganda and disinformation. The joint explanatory statement accompanying for the FY2019-enacted legislation ( P.L. 116-6 ) included up to $55.4 million for the GEC and up to $20 million for CSD, a funding level for CSD identical to the department's request. Section 1284 of the National Defense Authorization Act for Fiscal Year 2019 ( P.L. 115-232 ) authorized the Department of Defense (DOD) to transfer not more than $60 million to the GEC for each of FY2019 and FY2020; DOD has previously transferred funds to the GEC under similar authorities. "], "subsections": []}]}, {"section_title": "Diplomatic Security", "paragraphs": ["The State Department's FY2019 budget request sought to provide approximately $5.36 billion for the department's key embassy security accounts: $3.70 billion for the Worldwide Security Protection (WSP) programmatic allocation within the Diplomatic Programs account and $1.66 billion for the Embassy Security, Construction, and Maintenance (ESCM) account. The House committee bill would have provided $3.76 billion for WSP and $2.31 billion for ESCM, for a total funding level of $6.07 billion for these accounts. While the House bill would have funded the ESCM account exclusively through the base budget, it would have provided approximately $2.38 billion of overall funding for WSP through OCO. The Senate committee bill would have provided $3.82 billion for WSP and $1.92 billion for ESCM, for a total funding level of $5.74 billion. As with the House committee measure, the Senate committee bill would have funded the ESCM account with base budget funds only. For WSP, the Senate committee measure, like the House committee bill, would provide $2.38 billion of total account funds through OCO.", "The FY2019 enacted appropriations provided a total of $4.10 billion for WSP and $1.98 billion for ESCM, for a total funding level of $6.08 billion in budget authority for these accounts. Like the House and Senate committee bills, P.L. 116-6 funded ESCM exclusively through the base budget. Of the $4.10 billion provided for WSP in the law, $2.63 billion was done so through OCO. Had the Administration's request been enacted, it would have marked a decline of 2% for WSP and 28% for ESCM relative to the FY2018 figures of approximately $3.76 billion and $2.31 billion, respectively. The enacted legislation provided 9% more funding for WSP and 15% less for ESCM relative to FY2018 levels. ", "Over the past several years, Congress has provided no-year appropriations for both WSP and ESCM, thereby authorizing the State Department to indefinitely retain appropriated funds beyond the fiscal year for which they were appropriated. As a result, the department has carried over large balances of unexpired, unobligated funds each year that it is authorized to obligate for programs within both accounts when it deems appropriate to do so. For example, for FY2018, the State Department carried over more than $7.6 billion in previously appropriated funds for ESCM. Both the House and Senate committee bills would have continued this practice with respect to WSP, and the Senate committee bill would have continued with respect to ESCM, as well. The House committee bill, if enacted, would have provided that all funds appropriated for ESCM remained available until September 30, 2023, rather than indefinitely. P.L. 116-6 provided no-year appropriations for WSP. For ESCM, the law stipulated that while funds for worldwide security upgrades and for purposes of acquisition and construction would remain available until expended, all other monies within this account (such as funds for preserving, maintaining, repairing, and planning for real property that State Department owns) would remain available only until September 30, 2023. "], "subsections": [{"section_title": "Worldwide Security Protection", "paragraphs": ["The Worldwide Security Protection (WSP) allocation within the Diplomatic Programs account supports the Bureau of Diplomatic Security's (DS's) implementation of security programs located at over 275 overseas posts and 125 domestic offices of the State Department, including a worldwide guard force protecting overseas diplomatic posts, residences, and domestic offices. ", "The State Department revisited previous assumptions for funding for the U.S. security presence, which prompted it to ask for a rescission of $301.20 million for WSP OCO funds provided through the Further Continuing and Security Assistance Appropriations Act, 2017 (SAAA) ( P.L. 114-254 ). State Department officials noted that this funding was \"intended to support diplomatic reengagements in Syria, Libya, and Yemen that were predicated on different security and political conditions.\" The department maintained that this proposed cancellation was based on evolving security and political conditions, and would not affect DS operations. While neither the House nor the Senate committee bill included a rescission, P.L. 116-6 provided for a rescission of $301.2 million of SAAA funds appropriated for Diplomatic Programs and designated them more generally for OCO. "], "subsections": []}, {"section_title": "Embassy Security, Construction, and Maintenance", "paragraphs": ["The Embassy Security, Construction, and Maintenance (ESCM) account funds the Bureau of Overseas Building Operations (OBO), which is responsible for providing U.S. diplomatic and consular missions overseas with secure, safe, and functional facilities. ", "The State Department's request included $869.54 million to provide its share of what it maintains is the $2.20 billion in annual funding that the Benghazi Accountability Review Board (ARB) recommended for the Capital Security Cost Sharing (CSCS) and Maintenance Cost Sharing (MCS) programs (the remainder of the funding is provided through consular fee revenues and contributions from other agencies). These programs are used to fund the planning, design, and construction of new overseas posts and the maintenance of existing diplomatic facilities. The House committee report maintained that funds the House bill made available for ESCM would allow for the State Department's CSCS and MCS contributions, when combined with those from other agencies and consular fees, to exceed the ARB's annual recommended funding and support \" the accelerated multi-year program to construct new secure replacement facilities for the most vulnerable embassies and consulates.\" The Senate committee bill stipulated that of funds made available for ESCM by it and prior acts making appropriations for SFOPS, not less than $1.02 billion shall be made available for the department's FY2019 CSCS and MCS contributions; the joint explanatory statement accompanying P.L. 116-6 indicated that Congress provided the same amount for this purpose for FY2019.", "In FY2019, OBO intended to fund four CSCS projects and one MCS project (see Table 4 ). The House committee report noted concern with the cost of new embassy and consulate compound projects, including ongoing projects in Beirut, Lebanon; Mexico City, Mexico; New Delhi, India; Erbil, Iraq; and Jakarta, Indonesia. Like Section 7004(h) of the House bill, as noted in the joint explanatory statement accompanying P.L. 116-6 , Congress mandated that the State Department provide more detailed reports regarding the costs of these projects than previously required.", "The State Department maintained that the \"construction of a new U.S. Embassy facility in Jerusalem is a high priority for the Administration ... planning and interagency coordination for the Jerusalem Embassy move is ongoing and the department intends to realign CSCS project funding, as necessary, to execute this project.\" It later attached a timeframe to its intent, and the United States opened a new U.S. embassy in Jerusalem in May 2018. This new embassy is located in a building that housed consular operations of the former U.S. Consulate General in Jerusalem. The State Department has said that one of its next steps would be to construct an embassy annex to the current building, while also considering options for a permanent embassy over the long term. The department could choose to draw upon the unexpired, unobligated funds previously appropriated by Congress to the ESCM account for any construction expenses related to interim and permanent embassy facilities in Jerusalem. The Senate committee report requires the Secretary of State to \"regularly inform the Committee\" on the status of plans for a permanent New Embassy Compound in Jerusalem. Neither P.L. 116-6 nor its joint explanatory statement addresses this issue or negates the Senate committee report language. "], "subsections": []}]}, {"section_title": "International Organizations", "paragraphs": ["The State Department's FY2019 budget request included a combined request of $2.29 billion for the Contributions to International Organizations (CIO) and Contributions for International Peacekeeping Activities (CIPA) accounts, a 20% reduction from the FY2018 funding levels for these accounts. The CIO account is the source for funding for annual U.S. assessed contributions to 45 international organizations, including the United Nations and its affiliated organizations and other international organizations, including the North Atlantic Treaty Organization (NATO). The State Department's FY2019 request for CIO totaled approximately $1.10 billion. Following passage of the BBA, the department increased its request for CIO by approximately $100 million to fund a higher U.S. contribution to the U.N. regular budget at a rate of 20% of the overall U.N. budget (the U.S. assessment is 22%). According to the department, U.N. assessments of U.S. contributions to the United Nations and its affiliated agencies exceeded the request for funds to pay these contributions. Therefore, if the department's request was enacted, the United States may have accumulated arrears to some organizations. ", "The Contributions for International Peacekeeping Activities (CIPA) account provides U.S. funding for U.N. peacekeeping missions around the world that the State Department says \"seek to maintain or restore international peace and security.\" The State Department's FY2019 request for CIPA totaled $1.20 billion. According to the department, this request \"reflects the Administration's commitment to seek reduced costs by reevaluating the mandates, design, and implementation of peacekeeping missions and sharing the funding burden more fairly among U.N. members.\" Under this request, no U.S. contribution would have exceeded 25% of all assessed contributions for a single operation, which is the cap established in Section 404(b) of the Foreign Relations Authorization Act, Fiscal Years 1994 and 1995 ( P.L. 103-236 ). ", "The State Department maintained that it expected that the \"unfunded portion of U.S. assessed expenses will be met through a combination of a reduction in the U.S. assessed rate of contributions, reductions in the number of U.N. peacekeeping missions, and significant reductions in the budgets of peacekeeping missions across the board.\" The department also requested that Congress provide two-year funds for CIPA (in other words, that Congress make funds available for both the fiscal year for which the funds were appropriated and the subsequent fiscal year) \"due to the demonstrated unpredictability of the requirements in this account from year to year and the nature of multi-year operations that have mandates overlapping U.S. fiscal years.\" ", "The House committee bill would have provided $1.36 billion for CIO and $1.59 billion for CIPA, for a combined total of $2.95 billion for these accounts, which was 29% higher than the department's request and 4% higher than the FY2018 funding levels. The Senate committee bill would have provided $1.44 billion for CIO and $1.68 billion for CIPA, for a combined total of $3.12 billion. This figure was 36% higher than the department's request and 9% higher than the FY2018 level. The Senate committee bill included a provision not present in recent appropriations laws mandating that funds appropriated for CIO \"are made available to pay not less than the full fiscal year 2019 United States assessment for each respective international organization.\" With regard to CIPA, both the House and Senate committee reports noted that appropriated monies were intended to support an assessed peacekeeping cost at the statutory level of 25% rather than the U.N. assessed rate for the United States of 28.4%. Both committee reports called on the department to review peacekeeping missions for cost savings and work to renegotiate rates of assessment. ", "For FY2019, P.L. 116-6 provided $1.36 billion for CIO and $1.55 billion for CIPA, for a total of $2.91 billion\u2014slightly less than both the House and Senate committee bills. This figure was still 2% higher than the FY2018 figure and 27% higher than the department's request. While the law did not include the aforementioned Senate committee bill provision regarding payment of full U.S. assessments for organizations funded through the CIO account, the law's joint explanatory statement noted that it assumed the payment of the full United States assessment for each relevant organization (with some exceptions, including organizations from which the United States has withdrawn) and required the Secretary of State to consult with the Committees on Appropriations with respect to any decision not to provide the full assessment for any such organization. With respect to CIPA, the joint explanatory statement noted that sufficient funds are provided for contributions to peacekeeping missions at the statutory level of 25%. The enacted legislation, like the House and Senate committee bills, provided a share of CIPA funds as two-year funds, as requested by the department. "], "subsections": []}, {"section_title": "Leadership and Modernization Impact Initiative", "paragraphs": ["The State Department requested $246.2 million for FY2019 to implement the Leadership and Modernization Impact Initiative (hereinafter, the Impact Initiative). The Impact Initiative constitutes the implementation phase of the State Department's \"Redesign\" project. Former Secretary Tillerson initiated the redesign in 2017 to implement Executive Order 13781 and Office of Management and Budget (OMB) Memorandum M-17-22, which aim to \"improve the efficiency, effectiveness, and accountability of the executive branch.\" ", "The Impact Initiative constitutes 16 keystone modernization projects in three focus areas: Modernizing Information Technology and Human Resources Operations; Modernizing Global Presence, and Creating and Implementing Policy; and Improving Operational Efficiencies (see Table 5 ). According to the State Department, these focus areas and modernization projects are derived from the results of the listening tour that former Secretary Tillerson launched in May 2017, which included interviews conducted with approximately 300 individuals that the department said comprised a representative cross-section of its broader workforce, and a survey completed by 35,000 department personnel that asked them to discuss the means they use to help complete the department's mission and obstacles they encounter in the process. ", "Of the $246.2 million requested, $150.0 million was requested from the IT Central Fund (which is funded through funds appropriated by Congress to the Capital Investment Fund account and, separately, expedited passport fees) and $96.2 million from the D&CP account to implement modernization projects. Proceeds from the IT Central Fund were intended to implement projects focused on IT, including modernizing existing IT infrastructure, systems, and applications based on a roadmap to be created in FY2018 and centralizing management of all WiFi networks. Funds from the D&CP account were intended to implement modernization projects focusing on Human Resources issues, including leadership development, management services consolidation, data analytics, and workforce readiness initiatives. ", "Like the House and the Senate committee bills and reports, neither P.L. 116-6 nor the joint explanatory statement accompanying the law specifically mentioned the Impact Initiative by name. However, both the law and the joint explanatory statement included provisions explicitly prohibiting the Department of State from using appropriated funds to implement a reorganization without prior consultation, notification, and reporting to Congress (for example, see Section 7073 of P.L. 116-6 ). Like the Senate committee bill, P.L. 116-6 stated that no funds appropriated for SFOPs may be used to \"downsize, downgrade, consolidate, close, move, or relocate\" the State Department's Bureau of Population, Refugees, and Migration. "], "subsections": []}]}, {"section_title": "Foreign Assistance50", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["Foreign operations accounts, together with food aid appropriated through the Agriculture appropriations bill, constitute the foreign aid component of the international affairs budget. These accounts fund bilateral economic aid, humanitarian assistance, security assistance, multilateral aid, and export promotion programs. For FY2019, the Administration requested $28.60 billion for foreign aid programs within the international affairs (function 150) budget, about 28% less than the FY2018 actual funding level. None of the requested funds were designated as OCO. The FY2019 enacted appropriation provided $37.92 billion for foreign operations account, including $3.63 billion designated as OCO. Together with food aid accounts in the Agriculture appropriation, total enacted foreign aid within the international affairs budget was $39.85 billion, or 0.7% below the FY2018 actual funding level and 39% above the FY2019 request. Table 6 shows foreign aid funding by type for FY2017 and FY2018 actual, and the FY2019 request, committee-approved legislation, and enacted legislation. ", "Account Mergers and Eliminations . The Administration aimed to simplify the foreign operations budget in part by channeling funds through fewer accounts and eliminating certain programs. These account mergers and eliminations were also proposed in the FY2018 budget request", "Under bilateral economic assistance, the Development Assistance (DA), Economic Support Fund (ESF), Assistance to Europe, Eurasia and Central Asia (AEECA) and Democracy Fund (DF) accounts were zero funded in the FY2019 request. Programs currently funded through these accounts would have been funded through a new Economic Support and Development Fund (ESDF) account. The proposed funding level for ESDF, $5.063 billion, was more than 36% below the FY2018 funding for the accounts it would have replaced. Fifteen countries that received DA, ESF, or AEECA in FY2017 would no longer have received funding from these accounts or from ESDF under the FY2019 request. Within multilateral assistance, the International Organizations & Programs (IO&P) account, which funds U.S. voluntary contributions to many U.N. entities, including UNICEF, U.N. Development Program, and UN Women, would also have been zeroed out. Budget documents suggested that some unspecified activities currently funded through IO&P could have received funding through the ESDF or other accounts. Related to humanitarian assistance, the P.L. 480 Title II food aid account in the Agriculture appropriation would have been zero-funded and all food assistance would have been funded through the International Disaster Assistance (IDA) account, which would have nevertheless declined by about 17% from FY2018 actual funding (see \" Humanitarian Assistance \" section below). The Emergency Refugee and Migration Assistance (ERMA) account would have been subsumed into the Migration and Refugee Assistance (MRA) account.", "Closeout of Inter-American Foundation and U.S.-Africa Development Foundation . The FY2019 request proposed to terminate the Inter-American Foundation (IAF) and the U.S.-Africa Development Foundation (ADF), independent entities that implement small U.S. assistance grants, often in remote communities. The Administration proposed to consolidate all small grant programs aimed at reaching the poor under USAID, as a means of improving their integration with larger development programs and U.S. foreign policy objectives, as well as improving efficiency. Funds were requested for IAF and ADF only for the purposes of an orderly closeout.", "Development Finance Institution . The Administration requested, for the first time in FY2019, the consolidation of the Overseas Private Investment Corporation (OPIC) and USAID's Development Credit Authority (DCA) into a new standalone Development Finance Institution (DFI). The request called for $96 million for administrative expenses and $38 million for credit subsidies for DFI, but assumed that these expenses would be more than offset by collections, resulting in a net income of $460 million (based on OPIC's projected offsetting collections). In addition, $56 million in ESDF funds would have been used to support DFI activities. The Administration sought congressional authority for the new standalone entity, which it described as a means of incentivizing private sector investment in development and improving the efficiency of U.S. development finance programs.", "Both the House and Senate committee bills, as well as the enacted FY2019 appropriation, rejected these account changes, with the exception of the elimination of the ERMA account, which the House bill eliminated and the Senate and final bill funded with $1 million. All the FY2019 SFOPS legislation, including P.L. 116-6 , used the same bilateral account structure used for FY2018, not a new ESDF, and funded IAF and ADF at the FY2018 levels. Prior to enactment of the final FY2019 SFOPS appropriation, Congress passed the BUILD Act ( P.L. 115-254 ), which authorized the establishment of a new International Development Finance Corporation (IDFC), consistent with the Administration's DFI proposal. The IDFC is expected to become operational near the end of FY2019, and P.L. 116-6 made FY2019 appropriations for OPIC and DCA using the same account structure as in prior years, but authorized $5 million in the OPIC noncredit account to be used for transition costs. "], "subsections": []}, {"section_title": "Top Foreign Assistance Recipients", "paragraphs": ["Top Country Recipients . Under the FY2019 request, top foreign assistance recipients would not have changed significantly, continuing to include strategic allies in the Middle East (Israel, Egypt, Jordan) and major global health and development partners in Africa (see Table 7 ). Israel would have seen an increase of $200 million from FY2017, reflecting a new 10-year security assistance Memorandum of Understanding. Zambia and Uganda would both have seen an 11% increase. All other top recipients would have seen reduced aid in FY2019 compared with FY2017 (comprehensive FY2018 country allocations were not yet available), though unallocated global health and humanitarian funds (added to the request after passage of the Bipartisan Budget Act of 2018) may have changed these totals.", " Figure 1 and Table 7 show the requested FY2019 foreign operations budget allocations by region and country.", "Under the FY2019 request, foreign assistance for every region would have been reduced compared to FY2018 funding. The Middle East and North Africa (MENA) region and Sub-Saharan Africa would continue to be the top regional recipients, together comprising nearly 80% of aid allocated by region ( Figure 2 ). Proposed cuts ranged from 61% in Europe and Eurasia to 2% in the MENA. Aid to Sub-Saharan Africa would have declined by 31%, aid to East Asia and Pacific by approximately half (51%), aid to South and Central Asia by about 4%, and aid to Western Hemisphere by 35%. ", "The House bill ( H.R. 6385 ) and accompanying report did not provide comprehensive country and regional allocations, but did specify aid levels for some countries and regional programs, including Israel ($3.300 billion), Egypt ($1.457 billion), Jordan ($1.525 billion), Ukraine ($441 million), the U.S. Strategy for Engagement in Central America ($595 million), and the Countering Russian Influence Funds ($250 million).", "The Senate bill ( S. 3108 ) and report specified aid allocations for several countries and regional programs, including Israel ($3.300 billion), Egypt ($1.082 billion), Jordan ($1.525 billion), Iraq ($429 million), West Bank & Gaza ($286 million), Afghanistan ($698 million), Pakistan ($271 million), Colombia ($391 million), Ukraine $426 million), U.S. Strategy for Engagement in Central America ($515 million) and the Countering Russian Influence Fund ($300 million).", "The enacted legislation, P.L. 116-6 , and the accompanying explanatory statement, specified FY2019 aid levels for several countries, including Israel ($3.300 billion), Egypt ($1.419 billion), Jordan ($1.525 billion), Iraq ($407 million), Colombia ($418 million), Mexico ($163 million), and Ukraine ($446 million), as well as for the U.S. Strategy for engagement in Central America ($528 million) and the Countering Russian Influence Fund ($275 million)."], "subsections": []}, {"section_title": "Budget Highlights", "paragraphs": ["The budget submission did not identify any new foreign assistance initiatives. The FY2019 request called for decreases in foreign aid funding generally while continuing to prioritize the aid sectors that have long made up the bulk of U.S. foreign assistance: global health, humanitarian, and security assistance. "], "subsections": [{"section_title": "Global Health", "paragraphs": ["The Administration requested $6.70 billion for global health programs in FY2019. This was a 23% reduction from the FY2018 funding level, yet global health programs would have increased slightly as a proportion of the foreign aid budget, from 22% of total aid in FY2018 to 23% in the FY2019 request, due to deeper proposed cuts elsewhere. HIV/AIDS programs, for which funding would have been cut about 27% from FY2018 actual levels, would have continued to make up the bulk (69%) of global health funding, as they have since the creation of the President's Emergency Plan for AIDS Relief (PEPFAR) in 2004. Family planning and reproductive health services (for which the Administration proposed no funding for FY2018) would have received $302 million, a 42% reduction from FY2018 funding. Assistance levels would have been reduced for every health sector compared to FY2018, including maternal and child health (-25%), tuberculosis (-31%), malaria (-11%), neglected tropical diseases (-25%), global health security (-0.1%, funded through a proposed repurposing of FY2015 Ebola emergency funds), and nutrition (-37%). ", "The House committee bill included $8.69 billion for global health programs, the same as FY2018 funding. While total funding would remain the same, the House proposal would have reduced funding for family planning and reproductive health by about 12% compared to FY2018, while slightly increasing funding for polio, nutrition, and maternal and child health, and more than doubling funding for global health security and emerging threats. The Senate committee bill would have funded global health programs $8.792 billion, 1.2% above the FY2018 level. No subsectors would have received reduced funding and allocations for tuberculosis, HIV/AIDS, family planning, nutrition, neglected tropical diseases and vulnerable children would all have increased slightly. While both bills included long-standing language preventing the use of appropriated funds to pay for abortions, the House bill, but not the Senate bill, also included a provision prohibiting aid to any foreign nongovernmental organizations that \"promotes or performs\" voluntary abortion, with some exceptions, regardless of the source of funding for such activities. ", "P.L. 116-6 provides $8.84 billion for global health programs for FY2019, a 1.7% increase over FY2018 funding. Every health subsector was funded at the same or slightly higher level than in FY2018."], "subsections": []}, {"section_title": "Humanitarian Assistance", "paragraphs": ["The Trump Administration's FY2019 budget request for humanitarian assistance totaled $6.358 billion, which was roughly 32% less than FY2018 actual funding ($9.37 billion) and about 22% of the total FY2019 foreign aid request. The request included $2,800.4 million for the Migration and Refugee Assistance (MRA) account (-17% from FY2018) and $3,557.4 million for the International Disaster Assistance (IDA) account (-17%) ( Figure 2 ). As in its FY2018 request, the Administration proposed to eliminate the Food for Peace (P.L. 480, Title II) and Emergency Refugee and Migration Assistance (ERMA) accounts, asserting that the activities supported through these accounts can be more efficiently and effectively funded through the IDA and MRA accounts, respectively. (Congress did not adopt the proposed changes to Food for Peace for FY2018, appropriating $1.716 billion for the account through the Agriculture appropriation, but did appropriate only $1 million for ERMA, a 98% reduction from FY2017 funding.) The Administration also sought authority to transfer and merge IDA and MRA base funds (current authority only applies to OCO-designated funds).", "The Administration described its IDA request as focused \"on crises at the forefront of U.S. security interests, such as Syria, Iraq, Yemen, Nigeria, Somalia, and South Sudan.\" The MRA request focused on \"conflict displacement in Afghanistan, Burma, Iraq, Somalia, South Sudan, Syria and Yemen,\" as well as strengthening bilateral relationships with \"key refugee hosting countries such as Kenya, Turkey, Jordan, Ethiopia and Bangladesh.\" Consistent with last year, the request suggested that the proposed funding reduction assumes that other donors will shoulder an increased share of the overall humanitarian assistance burden worldwide. ", "The House committee bills proposed $9.145 billion for humanitarian assistance accounts, about 2% less than FY2018 funding. The total included $1.5 billion for Food for Peace from the Agriculture appropriation but would not have funded the ERMA account. The Senate committee bills proposed $9.534 billion for humanitarian assistance, about 2% more than FY2018 funding. The total included $1.716 billion for Food for Peace and $1 million for the ERMA account. Neither bill included language authorizing broad transfers and mergers between the IDA and MRA base funding account, though both bills include provisions allowing for the transfer and merger of funds from several accounts, including IDA and MRA, as an extraordinary measure in response to a severe international infectious disease outbreak.", "As in FY2018, Congress did not adopt the significant humanitarian aid changes proposed by the Administration. P.L. 116-6 provided a total of $9.534 billion for humanitarian assistance in FY2019, almost level with FY2018 funding (-0.5%), of which about 21% was designated as OCO. This total included $3.434 billion in MRA funds, $1 million for ERMA, and $4.385 billion for IDA in the SFOPS division of the bill, as well as $1.716 billion for Food for Peace in the Agriculture division."], "subsections": []}, {"section_title": "Security Assistance", "paragraphs": ["The FY2019 security assistance request within foreign operations accounts totaled $7.304 billion, a 19% reduction from the FY2018 actual funding level and about 26% of the total foreign aid request. Consistent with recent years, 63% of the entire security assistance request was for FMF aid to Israel and Egypt. However, six countries were identified in the request as joint Department of Defense (DOD) and State Department security sector assistance priorities: Philippines, Vietnam, Ukraine, Lebanon, Tunisia, and Colombia.", "The International Narcotics Control and Law Enforcement (INCLE) account would have been reduced by about 36% from FY2018 actual levels, Nonproliferation, Antiterrorism, Demining and Related (NADR) by 21%, and International Military Education and Training (IMET) by about 14%. In each of these cases, the Administration described the proposed reductions as concentrating resources where they offer the most value and U.S. national security impact. As in the FY2018 request, the Peacekeeping Operations (PKO) account, which supports most non-U.N. multilateral peacekeeping and regional stability operations, including U.S. training and equipment for African militaries and funding for the U.N. Support Office in Somalia (UNSOS), would have seen the biggest reduction (-46%) under the FY2019 request. This is because Administrations generally request UNSOS funds through the CIPA account, while Congress usually funds the office through the PKO account.", "The Foreign Military Financing (FMF) account would have been reduced by 13% compared to FY2018, with specific allocations for 11 countries and a proposed $75 million Global Fund to be allocated flexibly. This was a notable change from the FY2018 FMF request, in which funds were allocated to four countries and a larger global fund, and from FY2018-enacted funding, for which allocations were specified for more than 20 countries. ", "The House committee bill would have provided $9.274 billion for security assistance, a 3% increase over FY2018 funding, with funding increases proposed for the INCLE (+7%) and FMF (+4%) accounts and a reduction proposed for the PKO account (-9%). Consistent with the request, and in contrast to recent year appropriations, no security assistance funding in the House committee bill was designated as OCO. ", "The Senate committee bill included $8.789 billion for security assistance programs, a 2.6% total decrease from FY2018 funding. The INCLE account would have increased by 2.6% while the FMF and PKO accounts would be reduced by 3% and 11%, respectively. About 16% of the security assistance funding in the Senate bill was designated as OCO.", "In the final FY2019 appropriation, P.L. 116-6 , security assistance funding totaled $9.153 billion, a 1.4% increase from FY2018. Of the total, $555 million within the PKO and FMF accounts (6% of total security funding) was designated as OCO. Funding provided for most accounts was similar to FY2018 levels, with the exception of INCLE, which increased by 9.4% in part to support increased efforts to address the flow of illegal opioids, and PKO, for which funding decreased by about 9.2%. "], "subsections": []}, {"section_title": "Economic Development Assistance", "paragraphs": ["Bilateral economic development assistance is the broad category that includes programs focused on education, agricultural development and food security, good governance and democracy promotion, microfinance, environmental management, and other sectors. While the majority of this aid is implemented by USAID, it also includes the programs carried out by the independent Millennium Challenge Corporation (MCC), Peace Corps, Inter-American Foundation and the U.S.-Africa Development Foundation. Excluding global health assistance, bilateral economic development assistance in the Administration's FY2019 request totaled $6.354 billion, a 33% reduction from FY2018 funding levels. Proposed FY2019 allocations for key sectors, compared with FY2018 levels prescribed in legislation, included the following: ", "food security, $518 million (-48% from FY2018); democracy promotion programs, $1,235 million (-47% from FY2018); and education, $512 million (-51% from FY2018).", "The Administration requested $800 million for MCC and $396 million for Peace Corps, representing cuts of 12% and 3%, respectively. As discussed above, the budget request also proposed to merge I-AF and USADF into USAID, and requested only small amounts of funding to close out their independent activities.", "The House committee bill would have provided $9.383 billion for economic development assistance and specified allocations for several development sectors, including education ($1.035 billion), conservation programs ($360 million), food security and agricultural development ($1.001 million), microenterprise and microfinance ($265 million), water and sanitation ($400 million) and democracy programs ($2.4 billion). The Senate committee bill would have provided $9.764 billion for economic development activities and specifies allocations for education ($750 million), environment and renewable energy ($943 million), food security and agricultural development ($1.001 billion), small and micro credit ($265 million), water and sanitation ($435 million), and democracy programs ($2.4 billion), among others. Both the House and Senate bills would have funded the I-AF, USADF, Peace Corp, and MCC at the FY2018 funding level, and both bills explicitly rejected the Administration's proposal to merge I-AF and USADF into USAID.", "The enacted appropriation for FY2019, P.L. 116-6 , provided about $9.239 billion for nonhealth economic development aid. Minimum allocations specified for key sectors included $1.035 billion for education (basic and higher), $285 million for biodiversity conservation, $125 million for sustainable landscapes, $1.001 billion for food security and agricultural development, $265 million to support micro and small enterprises, $67 million to combat trafficking in persons, and $435 million for water and sanitation programs. The independent agencies were all funded at the same level as in FY2018.", "Appendix A. State Department, Foreign Operations, and Related Agencies Appropriations, by Account", "Appendix B. International Affairs Budget", "The International Affairs budget, or Function 150, includes funding that is not in the Department of State, Foreign Operations, and Related Programs appropriation: foreign food aid programs (P.L. 480 Title II Food for Peace and McGovern-Dole International Food for Education and Child Nutrition programs) are in the Agriculture Appropriations, and the Foreign Claim Settlement Commission and the International Trade Commission are in the Commerce, Justice, Science appropriations. In addition, the Department of State, Foreign Operations, and Related Programs appropriation measure includes funding for certain international commissions that are not part of the International Affairs Function 150 account.", "Appendix C. SFOPS Organizational Chart", "Appendix D. Glossary"], "subsections": []}]}]}]}]}}
{"id": "R45488", "title": "LNG as a Maritime Fuel: Prospects and Policy", "released_date": "2019-02-05T00:00:00", "summary": ["The combination of growing liquefied natural gas (LNG) supplies and new requirements for less polluting fuels in the maritime shipping industry has heightened interest in LNG as a maritime fuel. The use of LNG as an engine (\"bunker\") fuel in shipping is also drawing attention from federal agencies and is beginning to emerge as an issue of interest in Congress.", "In 2008, the International Maritime Organization (IMO) announced a timeline to reduce the maximum sulfur content in vessel fuels to 0.5% by January 1, 2020. Annex VI of the International Convention for the Prevention of Pollution from Ships requires vessels to either use fuels containing less than 0.5% sulfur or install exhaust-cleaning systems (\"scrubbers\") to limit a vessel's airborne emissions of sulfur oxides to an equivalent level. An option for vessel operators to meet the IMO 2020 standards is to install LNG-fueled engines, which emit only trace amounts of sulfur. Adopting LNG engines requires more investment than installing scrubbers, but LNG-fueled engines may offset their capital costs with operating cost advantages over conventional fuels. Savings would depend on the price spread between LNG and fuel oil. Recent trends suggest that LNG may be cheaper in the long run than conventional fuels.", "LNG bunkering requires specialized infrastructure for supply, storage, and delivery to vessels. To date, the number of ports worldwide that have developed such infrastructure is limited, although growth in this area has accelerated. Early adoption of LNG bunkering is occurring in Europe where the European Union requires a core network of ports to provide LNG bunkering by 2030. LNG bunkering is also advancing in Asia, led by Singapore, the world's largest bunkering port. Asian countries, together with Australia and the United Arab Emirates, have about 10 coastal ports offering LNG bunkering, with another 15 projects in development.", "LNG bunkering in the United States currently takes place in Jacksonville, FL, and Port Fourchon, LA\u2014with a third facility under development in Tacoma, WA. Bunkering of LNG-fueled cruise ships using barges also is planned for Port Canaveral, FL. The relative locations of other U.S. ports and operating LNG terminals suggest that LNG bunkering could be within reach of every port along the Eastern Seaboard and in the Gulf of Mexico. On the West Coast, the ports of Los Angeles and Long Beach, CA, are near the Costa Azul LNG terminal in Ensenada, MX. Seattle and Tacoma are adjacent to the proposed Tacoma LNG project. Since 2015, Jones Act coastal ship operators have taken steps to transition their fleets to use cleaner burning fuels, including LNG. Shippers of dry goods to Alaska, Hawaii, and Puerto Rico have taken delivery or have ordered LNG-fueled and LNG-capable vessels from U.S. shipyards in Philadelphia, PA, and Brownsville, TX. Another company operates five LNG-powered offshore supply vessels built in Gulfport, MS.", "Depending upon LNG conversions, the global LNG bunker fuel market could grow to several billion dollars by 2030. If U.S. LNG producers were to supply a significant share of this market\u2014on the strength of comparatively low LNG production costs\u2014LNG bunkering could increase demand for U.S. natural gas production, transportation, and liquefaction. Opportunities in LNG-related shipbuilding might be more limited, as most shipbuilding occurs overseas, although domestically-constructed LNG bunkering barges could be one area of economic growth. Finally, engineering and construction firms could benefit from new opportunities to develop port infrastructure for LNG storage and transfer. However, while vessel conversion to LNG fuel may increase demand for U.S.-produced natural gas, it partially could be offset by reduced demand for U.S.-produced crude oil or refined products. Furthermore, while LNG can reduce direct emissions from vessels, fugitive emissions and environmental impacts from natural gas production and transportation could reduce overall emissions benefits. While the LNG industry has experienced few accidents, the Coast Guard has been developing new standards to address unique safety and security risks associated with LNG in vessel operations.", "The overarching consideration about LNG bunkering in the United States is uncertainty about how the global shipping fleet will adapt to the IMO sulfur standards over time. This uncertainty complicates decisions related to both private investment and public policy. Although Congress has limited ability to influence global shipping, it could influence the growth of LNG bunkering through the tax code and regulation, or through policies affecting the LNG industry or domestic shipping industry as a whole. Evaluating the potential implications of LNG bunkering within the context of broader energy and environmental policies may become an additional consideration for Congress. If LNG bunkering expands significantly, Congress also may examine the adequacy of existing measures to ensure the safety and security of LNG vessels, storage, and related facilities."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The combination of growing supplies of liquefied natural gas (LNG) and new requirements for less polluting fuels in the international maritime shipping industry has heightened interest in LNG as a maritime fuel. For decades, LNG tanker ships have been capable of burning boil-off gas from their LNG cargoes as a secondary fuel. However, using LNG as a primary fuel is a relatively new endeavor; the first LNG-powered vessel\u2014a Norwegian ferry\u2014began service in 2000. ", "Several aspects of LNG use in shipping may be of congressional interest. LNG as an engine, or \"bunker,\" fuel potentially could help the United States reduce harmful air emissions, it could create a new market for domestic natural gas, and it could create economic opportunities in domestic shipbuilding. However, U.S. ports would need specialized vessels and land-based infrastructure for LNG \"bunkering\" (vessel refueling) as well as appropriate regulatory oversight of the associated shipping and fueling operations. The storage, delivery, and use of LNG in shipping also has safety implications. These and other aspects of LNG bunkering may become legislative or oversight issues for Congress. One bill in the 115 th Congress, the Waterway LNG Parity Act of 2017 ( S. 505 ), would have imposed excise taxes on LNG used by marine vessels on inland waterways.", "This report discusses impending International Maritime Organization (IMO) standards limiting the maximum sulfur content in shipping fuels, the market conditions in which LNG may compete to become a common bunker fuel for vessel operators, and the current status of LNG bunkering globally and in the United States. A broader discussion of oil market implications is outside the scope of this report."], "subsections": []}, {"section_title": "IMO Emissions Standards and LNG", "paragraphs": ["The IMO is the United Nations organization that negotiates standards for international shipping. Its standards limiting sulfur emissions from ships, adopted in 2008, have led vessel operators to consider alternatives to petroleum-based fuels to power their ships.", "In 1973, the IMO adopted the International Convention for the Prevention of Pollution from Ships (MARPOL). Annex VI of the convention, which came into force in 2005, deals with air pollution from ships. The annex established limits on nitrogen oxide (NO x ) emissions and set a 4.5% limit on the allowable sulfur content in vessel fuels. In 2008, the IMO announced a timeline to reduce the maximum sulfur content in vessel fuels from 4.5% to 0.5% by January 1, 2020. Annex VI requires vessel operators to either use fuels containing less than 0.5% sulfur or install exhaust gas-cleaning systems (\"scrubbers\") to limit a vessel's sulfur oxide (SO x ) emissions to a level equivalent to the required sulfur limit."], "subsections": [{"section_title": "U.S. Obligations Under the IMO", "paragraphs": ["MARPOL is implemented in the United States through the Act to Prevent Pollution from Ships (). The United States effectively ratified MARPOL Annex VI in 2008 when President Bush signed the Maritime Pollution Prevention Act ( P.L. 110-280 ). The act requires that the U.S. Coast Guard and the Environmental Protection Agency (EPA) jointly enforce the Annex VI emissions standards. MARPOL's Annex VI requirements are codified at 40 C.F.R. \u00a71043. They apply to U.S.-flagged ships wherever located and to foreign-flagged ships operating in U.S. waters. "], "subsections": [{"section_title": "Emission Control Areas", "paragraphs": ["In addition to its global sulfur standards, MARPOL Annex VI provides for the establishment of Emissions Control Areas (ECAs), which are waters close to coastlines where more stringent emissions controls may be imposed. The North American ECA limits the sulfur content of bunker fuel to 0.1% of total fuel weight, an even lower bar than that set by the IMO 2020 standards. This standard is enforced by Coast Guard and EPA in waters up to 200 miles from shore. Currently, most ships operating in the North American ECA meet the emissions requirements by switching to low-sulfur fuels once they enter ECA waters. The European Union also has an ECA with a 0.1% limit on sulfur in bunker fuels, and the Chinese government is considering putting the same standard in place."], "subsections": []}]}]}, {"section_title": "Emissions Control Options for Ship Owners", "paragraphs": ["The IMO 2020 emissions requirement applies to vessels of 400 gross tons and over, which is estimated to cover about 110,000 vessels worldwide. However, analysts indicate that many of the smaller vessels in this group already burn low-sulfur fuel. Accounting for these smaller vessels, one estimate is that about 55,000 vessels currently burn high-sulfur fuel. Ship owners have two main options for meeting the emission requirements with existing engines: burn low-sulfur conventional fuel (or biofuels) or install scrubbers to clean their exhaust gases. Alternatively, ship owners may opt to install new LNG-fueled engines to comply with the IMO standard."], "subsections": [{"section_title": "Low-Sulfur Fuel Oils", "paragraphs": ["The simplest option for vessel owners to comply with the IMO sulfur standards, and the one that appears most popular, is switching to low-sulfur fuel oils or distillate fuels. Although switching to low-sulfur fuels would increase fuel costs compared to conventional, high-sulfur fuels, it would require little or no upfront capital cost and would allow ocean carriers to use existing infrastructure to bunker ships at ports. Anticipating widespread adoption of this approach, many analysts predict that the implementation of the IMO 2020 regulations will drive up demand for low-sulfur fuel and, therefore, significantly increase its price above current levels. Such a trend could also reduce demand for high-sulfur fuels, increasing the price spread between low- and high-sulfur bunkers fuels. Switching to lower-sulfur fuel could increase fuel cost across the industry by up to $60 billion in 2020 for full compliance with the IMO standards. Moreover, while it may allow vessels to meet the existing IMO sulfur standards, low-sulfur fuel does not necessarily support compliance with potential future IMO emissions standards, especially with respect to greenhouse gases (GHGs) such as carbon dioxide (CO 2 ) discussed later in this report."], "subsections": []}, {"section_title": "Scrubbers", "paragraphs": ["Scrubbers are systems which remove sulfur from a vessel's engine exhaust emissions. A ship with a scrubber would be capable of meeting the IMO 2020 standard while using conventional high-sulfur fuel. Retrofitting a scrubber on an existing engine can cost several million dollars, however, before factoring in the lost revenue from taking the ship out of service for a month for the installation. Therefore, while using a scrubber will allow a ship to continue using (currently) cheaper high-sulfur fuel, it may take years to recover the initial investment. For example, one industry study estimates that, in the case of a typical tanker, a scrubber installation could cost $4.2 million with a payback time of approximately 4.8 years. Furthermore, scrubbers installed to capture sulfur emissions might have to be further refitted or replaced to comply with any future IMO standards for GHG emissions.", "The rate of scrubber adoption could affect the financial impacts of installing them in terms of fuel costs. Scrubbers ultimately offset some or all of their initial costs because they allow vessel operators to continue using relatively inexpensive high-sulfur fuel. However, the return on investment for scrubbers depends on the relative prices of high- and low-sulfur bunker fuels. The demand\u2014and therefore, prices\u2014for low-sulfur and high-sulfur fuels will be affected by how many vessels use the respective fuels under the IMO standards that take effect in 2020. For example, limited scrubber adoption could result in more vessels demanding more low-sulfur fuel oil, creating upward pressure on low-sulfur fuel prices. Under such a scenario, scrubbers would provide greater fuel cost savings for vessels that installed them. Alternatively, high-sulfur fuel could become more costly due to refinery production cutbacks (because shippers will not be allowed to burn it without scrubbers). In this case, the economic benefits of scrubbers would be diminished.", "Given the uncertain fuel supply and demand dynamics, it is difficult for vessel operators to know how big the market distortions from scrubber installation could be or how many other operators may choose to install scrubbers. As of September 2018, there were approximately 660 ships retrofitted with scrubbers and over 600 ships under construction with plans to install scrubbers. By 2020, projecting additional construction orders, some analysts predict about 2,000 vessels could have scrubbers installed. However, even with higher demand for the technology, the ability of vessel owners to install scrubbers is constrained; analysts estimate that current maximum capacity for installing scrubbers is be between 300 to 500 ships per year."], "subsections": []}, {"section_title": "LNG-Fueled Engines", "paragraphs": ["Another option for ship owners to comply with the IMO 2020 sulfur standards is to switch to engines that burn LNG as a bunker fuel. LNG-fueled vessels emit only trace amounts of sulfur oxides in their exhaust gases\u2014well below even the 0.1% fuel-equivalent threshold in some of the ECA zones\u2014so they would be fully compliant with the IMO standards. As a secondary benefit, using LNG as an engine fuel also would reduce particulate matter (PM) emissions relative to both high- and low-sulfur marine fuel oils. Furthermore, LNG vessels have the potential to emit less CO 2 than vessels running on conventional, petroleum-based fuels. However, LNG vessels would have the potential to result in more fugitive emissions of methane, another GHG, because methane is the primary component of natural gas, further discussed below. ", "Installing an LNG-fueled engine can add around $5 million to the cost of a new ship. Retrofitting existing ships appears to be less desirable because of the extra space required for the larger fuel tanks (new ships can be designed with the larger fuel tanks). The costs of retraining crews to work with LNG engines could also factor into a vessel operator's decision about switching to LNG. However, apart from their lower emissions, LNG-fueled engines may offset their capital costs with fuel cost advantages over engines burning petroleum-derived fuels. These savings would depend on the price spread between natural gas and fuel oil\u2014which has been volatile in recent years. The likelihood that switching to LNG will produce long-term fuel costs savings relative to conventional fuels is, therefore, a critical consideration for many vessel owners."], "subsections": [{"section_title": "Jones Act Fleet Choosing LNG-Fueled Engines", "paragraphs": ["The 1920 Merchant Marine Act (known colloquially as the Jones Act) requires that vessels engaged in U.S. domestic transport be built domestically. Many newly built domestic ships receive a federal loan guarantee under the Maritime Administration's so-called \"Title XI\" program. In 2014, the program was modified to include the use of \"alternative energy technologies\" to power ships as part of the relevant criteria in evaluating a loan application. The Maritime Administration counts LNG-fueled engines as an \"alternative energy technology\" and may be more likely to approve loan applications for ships with LNG-capable engines. ", "Since the North American ECA was established in 2015, Jones Act coastal ship operators have taken steps to transition their fleets to use cleaner burning fuels, including LNG. The three Jones Act operators that ship dry goods to Alaska, Hawaii, and Puerto Rico have taken delivery or have ordered LNG-fueled and LNG-capable vessels from U.S. shipyards in Philadelphia, PA, and Brownsville, TX. Harvey Gulf International has put into service five LNG-powered offshore supply vessels that service offshore oil rigs. Some Jones Act tanker operators that have recently built or ordered vessels have chosen to install LNG-ready engines while other operators have chosen to install scrubbers on their existing fleet. Ship engines and scrubbers for the Jones Act fleet do not have to be manufactured in the United States because they are not considered an integral part of the hull or superstructure of a ship.", "Seagoing barges, known as articulated tug barges, are also a significant portion of the domestic coastal fleet, especially for moving liquid cargoes. However, these vessels traditionally have burned lower-sulfur fuels and thus the ECA has not prompted fleet conversions. IMO fuel requirements do not apply to river barges operating on the nation's inland waterway system, although this fleet potentially could be a market for LNG as fuel.", "Bunkering vessels (small tankers with hoses for refueling ships) in U.S. waters must also be Jones Act compliant. Barges are the predominant method for bunkering ships in U.S. ports. An LNG bunkering vessel for the Port of Jacksonville\u2014the first Jones Act-compliant LNG bunkering vessel to enter service in the United States\u2014was built in 2017 by Conrad Shipyards in Orange, TX."], "subsections": []}]}, {"section_title": "LNG vs. Petroleum-Based Fuel Costs", "paragraphs": ["Recent energy sector trends suggest that LNG may be cheaper in the long-run than petroleum-based, low-sulfur fuels. However, these price movements are correlated to some extent. Many existing long-term LNG contracts link LNG prices to oil prices (although such contract terms are on the decline), even in the spot market. ", "Starting in 2008, the advent of shale natural gas production dramatically decreased natural gas prices in the United States. Natural gas spot prices in the United States at the Henry Hub\u2014the largest U.S. trading hub for natural gas\u2014averaged around $3/MMBtu (million British Thermal Units) in 2018, about a quarter of the peak in average price a decade before, just prior to the shale gas boom ( Figure 1 ).", "Liquefying natural gas into LNG adds around $2/MMBtu to the production cost. Including additional producer charges and service costs would bring the total cost of LNG available at a U.S. port (based on the 2018 average price in Figure 1 ) to approximately $6/MMBtu. ", "Shipping of LNG from the United States to Asia or Europe adds from $1 to $2/MMBtu, so, based on the 2018 average cost in Figure 1 , LNG delivered to a port overseas would cost on the order of $7 to $8/MMbtu under long-term contracts, depending upon timing and location. Higher or lower prices could occur for specific long-term contracts and in the LNG spot market (i.e., for individual cargoes), based on the location and the supply and demand balance at the time. In general, the U.S. market will have the lowest-priced LNG. Northern Asia will have the highest LNG prices due to the region's comparative lack of pipeline gas supplies and its distance from LNG suppliers.", " Figure 2 compares LNG spot market prices in the Japan LNG market\u2014the highest-priced LNG market\u2014to spot prices for two common petroleum-based bunker fuels, low-sulfur gas oil and high-sulfur fuel oil. As the figure shows, over the last five years, Japan LNG generally has been cheaper than low-sulfur fuel and more expensive than high-sulfur fuel on an energy-equivalent basis (i.e., per MMbtu). However, Japan LNG and high-sulfur fuel prices converged in 2018. As the figure shows, spot prices for LNG deliveries to the Japan market fell below $6/MMBtu in 2016 from a high above $16/MMBtu in 2013. Likewise, low-sulfur gas oil prices have doubled, and high-sulfur fuel oil prices have tripled, since 2016. ", "The volatility of the bunker fuel markets and the global LNG market lead to considerable unpredictability about the relative prices among fuels going forward. LNG may become increasingly price-competitive versus low-sulfur fuel as the 2020 IMO sulfur standards take effect. As discussed above, many analysts predict prices for low-sulfur gas oil, which are already higher than those for high-sulfur fuel oil, to increase significantly after 2020 due to a standards-driven rise in demand. ", "Although fuel prices as shown in Figure 2 indicate favorable economics for LNG versus low-sulfur fuel, if prices for high-sulfur fuel oils collapse as some expect after the 2020 IMO regulations enter into force, it is possible that LNG could lose its price advantage over residual fuel oils. Likewise, the price spread between low-sulfur gasoil and high-sulfur fuel oil would increase, incentivizing more carriers to install scrubbers to capitalize on the savings in fuel costs by continuing to burn high-sulfur fuel. An additional complication is the variability of LNG prices by region. Many shipping lines are global operators seeking low-priced fuel worldwide, but unlike the global oil market, natural gas markets are regional. Because the price of LNG can vary significantly by region, the relative economics of LNG versus other bunker fuels would also vary by region.", "Another uncertainty in the market for LNG bunkering is the discrepancy between the spot price for traded LNG and the price for LNG sold as bunker fuel in ports. Added costs associated with marketing, storing and transporting LNG in bunkering operations (discussed below) would likely require ports to charge a rate for LNG bunker fuel above spot market prices. These additional overhead costs are likely to vary among ports. "], "subsections": []}, {"section_title": "Building an LNG-Fueled Fleet", "paragraphs": ["Before factoring in any effect of IMO standards on fuel prices, and assuming a favorable LNG-fuel oil price spread, it still could take years for the savings generated by using LNG to pay back the capital costs of switching fuels. Through May 2018, there were 122 LNG-powered vessels in operation and another 135 ordered or under construction. Many of the first LNG vessels delivered and ordered were Norwegian-flagged vessels, as the Norwegian government has subsidized LNG-fueled vessels with a \"NO x Fund.\" The fund provides LNG-operated ships with an exemption from the country's tax on NO x emissions. As an alternative to committing to LNG as a fuel, some vessel owners may hedge their bets by opting to install \"LNG-ready\" engines, which can burn low-sulfur fuel oil currently, but are designed to make future LNG conversion easier.", "The number of LNG ships that may be in operation by 2030 is difficult to predict. First, as noted above, growth in LNG powered vessels is likely to be driven primarily by new builds rather than retrofits. However, the shipping industry has experienced nearly a decade of vessel overcapacity and slow growth. Weak growth in the shipping industry could result in slower growth in vessel orders overall and, therefore, fewer orders for LNG-powered vessels. Of new vessels ordered, or set to be delivered, in 2018 or after, 13.5% (by tonnage) are LNG-fueled\u2014up from 1.4% in 2010. If this trend continues, demand for LNG from the shipping industry could still be relatively high, even if overall growth in the shipping industry remains slow. ", "Because LNG bunkering infrastructure among global ports is currently limited, vessels that use large amounts of fuel and travel predictable routes\u2014along which LNG is available\u2014are the most suitable for LNG fuel. For this reason, cruise ships, vehicle ferries, and container ships initially may be the most likely vessel types to adopt LNG as bunker fuel. Order books have reflected this assessment: one quarter of all cruise ships on order by tonnage at the end of 2017 were LNG-powered. Likewise, a major container ship line, CMA CGM, recently announced that it was ordering nine extra-large container ships powered by LNG. The carrier stated that the fuel tanks will displace space for \"just a few containers\" and said it intends to refuel these ships just once on their round trip voyages between Asia and Europe. ", "Conversely, LNG fuel adoption may be less likely for oil tankers. Half the global oil tanker fleet operates on the shipping spot market (also known as the \"tramp\" market), meaning that ship owners enter into contracts with cargo owners only for a single voyage. In this kind of trade, many oil tankers lack a consistent route. Having to limit spot contracts only to ports that may bunker LNG could reduce the arbitrage opportunities of tankers. Dry bulk cargo vessels (carrying grain, coal, and other commodities) also typically operate in the tramp market."], "subsections": [{"section_title": "LNG Engines and Greenhouse Gas Emissions", "paragraphs": ["LNG-powered vessels have lower direct exhaust emissions than comparable vessels using petroleum-derived fuels. However, the lifecycle\u2014or \"well-to-wake\"\u2014GHG emissions (especially of methane) and of volatile organic compound emissions from natural gas production, transportation, and liquefaction complicates the comparison. One study in 2015 concluded, \"performing a ['well-to-wake'] GHG study on LNG used as a marine fuel is more complex than previously thought. Further studies are needed ... to investigate this subject.\" A 2016 study found that the relative GHG emissions benefits of LNG versus conventional fuel oil on a \"well-to-wake\" basis was highly dependent upon fugitive methane emissions in the LNG supply chain. A 2017 study funded by NGVA Europe, an association which promotes the use of natural gas in vehicles and ships, concluded that LNG as a bunker fuel provides a 21% well-to-wake reduction in GHG emissions compared to convention fuel oil. Evaluating such studies is beyond the scope of this report, although they indicate uncertainty about environmental benefits of LNG fuel, which may require further examination.", "Despite concerns over lifecycle emissions from the natural gas supply chain, in the short term, ships that pair LNG engines with newer vessel designs could reduce onboard GHG emissions. However, whether these GHG emission reductions would be sufficient to meet the future standards could become another issue for ship owners. The IMO has set a provisional goal of reducing GHG emissions from ships by 50% by 2050. Depending upon the state of engine technology, LNG-fueled ships might become less viable if GHG limits were to be established well before 2050. Concerns about such GHG limits might lead to a decrease in orders of LNG-powered ships over time. Commercial vessels have a typical lifespan of over 20 years, so firms ordering new ships have to take into account compliance with potential standards issued decades in the future. If renewable fuels, such as biodiesel, become more available and cheaper in the coming decades, renewable fuel-powered ships may take over part of the market that LNG-powered ships could occupy. "], "subsections": []}]}]}, {"section_title": "Global Developments in LNG Bunkering", "paragraphs": ["A key requirement for ocean carriers to adopt LNG as an engine fuel is the availability of LNG bunkering facilities. Because LNG is extremely cold (-260 \u00b0F) and volatile, LNG bunkering requires specialized infrastructure for supply, storage, and fuel delivery to vessels. Depending upon the specific circumstances, LNG bunkering could require transporting LNG to a port from an offsite liquefaction facility for temporary storage at the port, or building an LNG liquefaction terminal on site. Alternatively, LNG could be delivered from offsite facilities directly to vessels in port via truck or supply vessel ( Figure 3 ). Truck-to-vessel LNG bunkering, in particular, provides some fueling capabilities without large upfront capital investments. LNG tanker trucks could also bring LNG to a storage tank built on site at the port, which could then bunker the LNG to arriving ships via pipeline. Supplying LNG using tanker trucks in this way may face capacity limitations due to truck size, road limitations, or other logistical constraints, but it has been demonstrated as a viable approach to LNG bunkering at smaller scales. The predominant method of bunkering today with high-sulfur fuel is vessel to vessel, either by a tank barge or smaller tanker. ", "The type of infrastructure needed to temporarily store (if needed) and deliver LNG within a given port would depend on the size and location of the port, as well as the types of vessels expected to bunker LNG. Truck to ship bunkering is best suited for supporting smaller and mid-sized vessels, such as ferries or offshore supply vessels (OSVs) that support offshore oil platforms. Liquefaction facilities built on site can provide the greatest capacity of any LNG bunkering option, for example, to provide fuel for large vessels in transoceanic trade. However, constructing small-scale liquefaction facilities to produce and deliver LNG on site requires considerable planning and significant capital investment, in one case on the order of $70 million for a mid-sized port. ", "Each LNG bunkering option in Figure 3 may be a viable means to begin LNG bunkering service in a given port. However, ports may face practical constraints as bunkering increases in scale. For example, a container port of significant size typically has multiple terminals, so even with an on-site liquefaction facility, it may need additional infrastructure or supply vessels for moving LNG to other port locations where a cargo ship might be berthed. There may also be port capacity and timing constraints upon the movement of LNG bunkering barges trying to refuel multiple large vessels in various locations around a crowded port. To date, the LNG bunkering operations already in place or in development are comparatively small, but scale constraints could become a factor as LNG bunkering grows and might require additional bunkering-related port investments."], "subsections": [{"section_title": "LNG Bunkering Overseas", "paragraphs": ["Early adoption of LNG bunkering occurred in Europe, where the first sulfur ECAs were created in 2006 and 2007. Through Directive 2014/94/EU, the European Union requires that a core network of marine ports be able to provide LNG bunkering by December 2025 and that a core network of inland ports provide LNG bunkering by 2030. This mandate has been promoted, in part, with European Commission funds to support LNG bunkering infrastructure development. In addition, the European Maritime Safety Agency published regulatory guidance for LNG bunkering in 2018. Over 40 European coastal ports have LNG bunkering capability currently in operation\u2014primarily at locations on the North Sea and the Baltic Sea, and in Spain, France, and Turkey. These locations include major port cities such as Rotterdam, Barcelona, Marseilles, and London. Another 50 LNG bunkering facilities at European ports are in development.", "LNG bunkering is also advancing in Asia, led by Singapore, the world's largest bunkering port. Singapore has agreed to provide $4.5 million to subsidize the construction of two LNG bunkering vessels. The Port of Singapore plans to source imported LNG at the adjacent Jurong Island LNG terminal, loading it into the bunkering vessels for ship-to-ship fueling of vessels in port. Singapore also has signed a memorandum of understanding with 10 other partners\u2014including a Japanese Ministry and the Chinese Port of Ningbo-Zhoushan\u2014to create a focus group aimed at promoting the adoption of LNG bunkering at ports around the world. In Japan, one consortium is implementing plans to begin vessel-to-vessel LNG bunkering at the Port of Keihin in Tokyo Bay by 2020. Japan's NYK line, a large ship owner, recently announced that it had reached an agreement with three Japanese utilities to add LNG bunkering to ports in Western Japan. Asian countries, together with Australia and the United Arab Emirates, currently have around 10 coastal ports offering LNG bunkering, with another 15 projects in development. ", "Some LNG bunkering operations in Europe and Asia are associated with existing LNG marine terminals, which already have LNG storage and port infrastructure in place. However, many smaller operations\u2014including most of the projects in development\u2014employ trucking, dedicated bunkering vessels, on-site liquefaction, and other means to extend LNG availability beyond the ports with major LNG terminals. LNG bunkering is not so advanced in South America, although with nine operating LNG marine terminals (one for export), and another six in development, South America also could support significant LNG bunkering operations in the near future."], "subsections": []}, {"section_title": "LNG Bunkering in the United States", "paragraphs": ["LNG bunkering in the United States currently takes place in two locations\u2014Jacksonville, FL, and Port Fourchon, LA\u2014with a third bunkering facility under development in Tacoma, WA. The LNG facilities in these ports serve the relatively small U.S.-flag domestic market. Bunkering of LNG-fueled cruise ships also is planned for Port Canaveral, FL. However, ports in North America have significant potential to expand the nation's LNG bunkering capability."], "subsections": [{"section_title": "Jacksonville, FL", "paragraphs": ["Jacksonville is the largest LNG bunkering operation at a U.S. port. One bunkering facility at the port, developed by JAX LNG, initially began truck-to-ship refueling operations in 2016 for two LNG-capable container ships. (The LNG is sourced from a liquefaction plant in Macon, GA. ) In August 2018, upon delivery of the Clean Jacksonville bunker barge, the facility began to replace truck-to-ship bunkering with ship-to-ship bunkering. In the future, the barge plans to source LNG from a new, small-scale liquefaction plant which JAX LNG is currently constructing at the port. A second facility at Jacksonville's port, operated by Eagle LNG, provides LNG bunkering sourced from a liquefaction plant in West Jacksonville. Eagle LNG also is constructing an on-site liquefaction and vessel bunkering facility in another part of the port, expected to begin service in 2019. Taken together, the JAX LNG and Eagle LNG facilities is expected to establish Jacksonville as a significant LNG-bunkering location with the capability to serve not only the domestic fleet but larger international vessels as well."], "subsections": []}, {"section_title": "Port Fourchon, LA", "paragraphs": ["In 2015, Harvey Gulf International Marine (Harvey) began LNG bunkering operations in the Gulf of Mexico to fuel its small fleet of LNG-powered offshore supply vessels serving offshore oil rigs. Harvey has since constructed a $25 million facility at its existing terminal in Port Fourchon to store and bunker LNG sourced from liquefaction plants in Alabama and Texas. The facility can provide truck-to-ship bunkering services for LNG-fueled offshore supply vessels, tank barges, and other vessels. A Harvey subsidiary has ordered two LNG bunkering barges to enable ship-to-ship fueling in the future."], "subsections": []}, {"section_title": "Tacoma, WA", "paragraphs": ["Puget Sound Energy has proposed an LNG liquefaction and bunkering facility at the Port of Tacoma, WA. Vessels traveling between Washington and Alaska typically spend the entire journey within the 200-mile North America ECA. Consequently, vessel owners operating along these routes have been interested in LNG as bunker fuel. TOTE Maritime, for example, a ship owner involved in trade between Alaska and the lower 48 states, has begun the process of retrofitting the engines of two of its container ships to be LNG-compatible.", "The proposed Tacoma LNG facility would be capable of producing up to 500,000 gallons of LNG per day and would include an 8 million gallon storage tank. The facility would serve the dual purposes of providing fuel for LNG-powered vessels and providing peak-period natural gas supplies for the local gas utility system. Its total construction cost reportedly is expected to be $310 million. Community and environmental concerns have slowed the progress of the proposal, which is still under regulatory review. Puget Sound Energy originally planned to put the LNG facility into service in late 2019; however, permitting issues appear likely to delay its opening until 2020 or later\u2014if it is eventually approved."], "subsections": []}, {"section_title": "Port Canaveral, FL", "paragraphs": ["Q-LNG Transport, a company 30% owned by Harvey, has placed orders for two LNG bunkering barges to provide ship-to-ship LNG fueling as well as \"ship-to-shore transfers to small scale marine distribution infrastructure in the U.S. Gulf of Mexico and abroad.\" Q-LNG's first barge initially is expected to provide fuel to new LNG-fueled cruise ships based in Port Canaveral (and, potentially, Miami), while service from its second barge is still uncommitted. Initial plans are for the LNG to be sourced from the Elba Island LNG import/export terminal near Savannah, GA\u2014approximately 230 nautical miles away\u2014although the company may seek to develop an on-site LNG storage facility in the future. "], "subsections": []}]}, {"section_title": "Other U.S. Ports with Potential for LNG Bunkering", "paragraphs": ["As noted above, U.S. LNG bunkering activities thus far have been limited to a handful of vessels in domestic trade and tourism. LNG bunkering for the much larger fleet of foreign-flag ships carrying U.S. imports and exports is still to be developed. As in Europe and Asia, domestic ports located near major LNG import or export terminals may serve as anchors for expanded LNG bunkering operations. Figure 4 shows existing LNG import and export terminals in North America. LNG can be liquefied from pipeline natural gas (or imported natural gas) and stored in large quantities at these facilities. The LNG can then be bunkered on site or transported to bunkering facilities elsewhere in the region by truck, rail, or barge. ", "As discussed above, the distance between Port Canaveral and Elba Island in Q-LNG's bunker sourcing plan is 230 nautical miles. Taking this distance as a measure of how far away LNG can be sourced and barged economically, it is possible to extrapolate which U.S. ports are within reach of a potential supply of LNG for vessel bunkering. Table 1 lists the top 20 U.S. container shipment ports in the United States and their proximity to existing LNG import/export terminals. Of these top 20 ports, 12 are less than 230 nautical miles from an operating LNG terminal. Distances between LNG terminals and the other East Coast ports are not much greater, suggesting that LNG for vessel bunkering could be within reach of every U.S. port along the Eastern Seaboard and in the Gulf of Mexico.", "On the West Coast, the ports of Los Angeles and Long Beach\u2014the two largest U.S. ports\u2014are relatively close to the Costa Azul LNG import terminal in Ensenada, MX. Seattle and Tacoma are far from Ensenada, but would be served by the proposed Tacoma LNG bunkering project, if constructed. LNG bunkering for Seattle and Tacoma alternatively could be sourced from an existing LNG port facility around 100 nautical miles north in Vancouver, BC, which is expanding to provide LNG bunkering services to international carriers. Alaska's existing LNG export terminal currently is inactive, but potentially could supply LNG bunker fuel in the Pacific Northwest as well. Although existing LNG import or export terminals in North America could supply LNG for regional bunkering operations, such activities would require additional investment for infrastructure such as LNG transfer facilities and bunker barges. CRS is not aware of any public announcements among the LNG terminals above to develop bunkering operations. However, at least one LNG terminal owner, Cheniere Energy, which operates LNG terminals in Louisiana and Texas, identifies vessel bunkering as one source of future LNG demand growth worldwide."], "subsections": []}, {"section_title": "U.S. Regulation of LNG Bunkering", "paragraphs": ["The IMO adopted safety standards for ships using natural gas as a bunker fuel in 2015. The standards, which took effect in 2017, apply to all new ships and conversions of ships (except LNG tankers, which have their own standards). The IMO standards address engine design, LNG storage tanks, distribution systems, and electrical systems. They also establish new training requirements for crews handling LNG and other low flashpoint fuels. As is the case for the sulfur standards, the IMO LNG safety standards apply to all IMO member nations, including the United States. In addition, a number of U.S. federal agencies, especially the Coast Guard and the Federal Energy Regulatory Commission, have jurisdiction over specific aspects of domestic LNG storage infrastructure and bunkering operations."], "subsections": [{"section_title": "Coast Guard Port Regulations", "paragraphs": ["The Coast Guard has the most prominent role in LNG bunkering, given its general authority over port operations and waterborne shipping. In 2015, the Coast Guard issued two guidelines for the handling of LNG fuel and for waterfront facilities conducting bunkering operations. In 2017, the Coast Guard issued additional guidelines to Captains of the Port, the local Coast Guard officials responsible for port areas, for conducting safe LNG bunkering simultaneously with other port operations. The guidelines advise on quantitative risk assessment of facilities bunkering LNG, which allows Captains of the Port to assess the risks posed to crews and facilities. "], "subsections": []}, {"section_title": "FERC Siting Regulations", "paragraphs": ["The Federal Energy Regulatory Commission (FERC) plays a role in LNG bunkering due to its jurisdiction over the siting of LNG import and export terminals under the Natural Gas Act of 1938. Specifically, FERC asserts approval authority over the place of entry and exit, siting, construction, and operation of new LNG terminals as well as modifications or extensions of existing LNG terminals. Notwithstanding this siting authority, FERC reportedly does not intend to assert jurisdiction over the permitting of LNG bunkering facilities, but it may require amendment of permits it has issued for LNG import or export terminals to account for bunkering operations added afterwards."], "subsections": []}, {"section_title": "Other Federal Agencies", "paragraphs": ["In addition to the Coast Guard and FERC, other federal agencies may have jurisdiction over specific aspects of LNG bunkering operations in U.S. ports under a range of statutory authorities. For example, the Pipeline and Hazardous Materials Safety Administration within the Department of Transportation regulates the safety of natural gas pipelines and certain associated LNG storage facilities (e.g., peak-shaving plants). LNG facilities also may need to comply with the Occupational Safety and Health Administration's regulations for Process Safety Management of Highly Hazardous Chemicals. Other federal agencies, including the Environmental Protection Agency, the U.S. Army Corps of Engineers, and the Transportation Security Administration, may regulate other aspects of LNG bunkering projects. CRS is not aware of new regulations to date among these agencies specifically addressing LNG bunkering."], "subsections": []}]}]}, {"section_title": "Global Development of LNG Supply", "paragraphs": ["World production of LNG has been rising rapidly over the last few years, driven by growth in the natural gas sector in new regions\u2014especially Australia and the United States. According to one industry analysis ( Figure 5 ), global LNG supply is expected to increase from 300 to 400 million metric tons per annum (MMtpa) from 2017 to 2021 based on new LNG liquefaction projects already operating or under development. An additional 150 MMtpa appears likely to come online after that. Collectively, LNG supply from these new liquefaction projects could exceed projections of demand, which would put downward pressure on LNG prices. While increases in the global supply of LNG do not necessarily translate directly into an increase in LNG available for bunkering, such increases could provide options for LNG bunkering in more ports.", "Estimating potential demand for LNG in the maritime sector is complicated and uncertain. One study of future LNG demand for bunkering, specifically, projects that LNG-powered vessels in operation and under construction as of June 2018 will require between 1.2 and 3.0 MMt of LNG per year. The study's review of several LNG consumption forecasts in the maritime sector shows a consensus projection between 20 to 30 MMt per year by 2030. This level of demand growth implies an increase in LNG-powered vessel construction from the current rate of around 120 ships per year to between 400 and 600 new builds per year. ", "If these levels were reached, they could create a significant new market for LNG suppliers. Assuming a Henry Hub spot market price of $4/MMBtu in 2030, the annual market for LNG in shipping could be worth $2.9 billion to $5.8 billion, before accounting for liquefaction and transportation charges. Some studies have projected the LNG bunkering market to be even larger and to grow more quickly. However, key variables\u2014such as the prices of Henry Hub natural gas and crude oil, the number of new vessel orders, and the future costs of emissions technology\u2014are notoriously hard to predict with accuracy. Thus, it is not assured that natural gas consumption in the maritime sector will absorb more than a small amount of the global liquefaction capacity in development."], "subsections": []}, {"section_title": "Domestic Considerations", "paragraphs": ["The IMO sulfur standards apply to ship owners globally, as does the development of new LNG supply and bunkering infrastructure. In addition to these factors, domestic LNG bunkering also may be influenced by considerations more specific to the United States. These considerations include growth of the U.S. natural gas supply, domestic shipbuilding opportunities, and LNG safety and security."], "subsections": [{"section_title": "U.S. Natural Gas Producers Seek New Markets", "paragraphs": ["Because of its leading role in global natural gas production, the United States has a particular interest in any new source of natural gas demand. According to the Energy Information Administration, the United States has been the world's top producer of natural gas since 2009, when it surpassed Russia. In 2017, increases in production outstripped increases in domestic gas consumption, leading to the United States becoming a net exporter of natural gas for the first time in nearly 60 years.", "As discussed above, North America (primarily the United States) is expected to add the most new LNG production capacity through 2030 when including projects that are operating, under construction, and likely (according to investment analysts). Past increases in U.S. LNG exports were driven by greater throughput at the Sabine Pass LNG export terminal\u2014the only operating U.S. LNG export terminal in 2017. In March 2018, the Cove Point terminal in Maryland became the second operating U.S. LNG export terminal. Four additional projects under construction or commissioning are set to nearly triple U.S. liquefaction by the end of 2019. This increase in liquefaction capacity likely will motivate LNG producers to secure new buyers. ", " Figure 6 shows estimated LNG prices for various locations around the world as of October 2018. As the figure shows, LNG prices are substantially lower in North America than in Asia, Europe, and South America. Even after adding $1.00 to $2.00/MMBtu to transport the LNG to overseas ports, LNG produced in the United States is globally competitive at these prices. If LNG from the new liquefaction capacity coming online can be produced and delivered with similar economics, the cost advantage may create an opportunity for U.S. LNG in bunker supply. There are over 400 petroleum fuel bunkering ports in the world, but 60% of bunkering in recent years has happened in six countries: Singapore, the United States, China, the United Arab Emirates, South Korea, and the Netherlands. Of these countries, only the United States is a significant LNG producer. Therefore, the United States could be a favorable source of LNG for domestic bunkering and for bunkering at the other major ports."], "subsections": []}, {"section_title": "Safety of LNG Bunkering in Ports", "paragraphs": ["While the LNG industry historically has had a good safety record, there are unique safety risks associated with LNG in vessel operations. Leakage of LNG during LNG shipping or bunkering can pose several hazards. LNG is stored at temperatures below -162 \u00b0C\u00a0(-260 \u00b0F), far below the -20\u00b0C at which the carbon steels typically used in shipbuilding become brittle. Consequently, extreme care must be taken to ensure that LNG does not drip or spill onto ship hulls or decking because it could lead to brittle fracture, seriously damaging a ship or bunkering barge.", "LNG spilled onto water can pose a more serious hazard as it will rapidly and continuously vaporize into natural gas, which could ignite. The resulting \"pool fire\" would spread as the LNG spill expands away from its source and continues evaporating. A pool fire is intense, far hotter and burning far more rapidly than oil or gasoline fires, and it cannot be extinguished; all the LNG must be consumed before it goes out. Because an LNG pool fire is so hot, its thermal radiation may injure people and damage vessels or property a considerable distance from the fire itself. Many experts agree that a large pool fire, especially on water, is the most serious LNG hazard. Leaks of boil-off gas (the small amount of LNG that vaporizes in storage) can also release natural gas into a port area and cause fires or explosions. Major releases of LNG from large LNG carriers would be most dangerous within 500 meters of the spill and would pose some risk at distances up to 1,600 meters from the spill. While a bunkering barge or a vessel using LNG for fuel contains far less LNG than large LNG carriers, LNG spills in bunkering operations could still be a significant concern. ", "Risks associated with bunkering LNG are complicated in ports seeking to engage in \"simultaneous operations\" during the bunkering process. Simultaneous operations entail loading and unloading cargo and personnel from a ship, maintenance, and other logistical operations performed while a ship is bunkering. Accidents that occur during such operations (for example, the operation of heavy machinery near pipes transporting LNG) can result in a spill of LNG which can threaten workers positioned near the site of operations."], "subsections": [{"section_title": "Security Risks of LNG Bunkering", "paragraphs": ["LNG tankers, bunkering vessels, and land-based facilities could be vulnerable to terrorism. Bunkering tanks or vessels might be physically attacked to destroy the LNG they hold\u2014and vessels might be commandeered for use as weapons against port or coastal targets. Potential terrorist attacks on LNG terminals or tankers in the United States have long been a key concern of the public and policymakers in the context of large scale LNG imports or exports because such attacks could cause catastrophic fires in ports and nearby populated areas. For example, a 2007 report by the Government Accountability Office stated that, \"the ship-based supply chain for energy commodities,\" specifically including LNG, \"remains threatened and vulnerable, and appropriate security throughout the chain is essential to ensure safe and efficient delivery.\" Affected communities and federal officials continue to express concern about the security risks of LNG. The potential risks from terrorism to LNG bunkering infrastructure may be different than those of larger LNG import or export operations due to smaller quantities of LNG involved, but the risks may become more widespread if LNG bunkering operations are established in more locations.", "The Maritime Transportation Security Act (MTSA, P.L. 107-295 ) and the International Ship and Port Facility Security Code give the Coast Guard far-ranging authority over the security of hazardous materials in maritime shipping. The Coast Guard has developed port security plans addressing how to deploy federal, state, and local resources to prevent terrorist attacks. Under the MTSA, the Coast Guard has assessed the overall vulnerability of marine vessels, their potential to transport terrorists or terror materials, and their use as potential weapons. The Coast Guard has employed these assessments to augment port security as necessary and to develop maritime security standards for LNG port facilities."], "subsections": []}]}]}, {"section_title": "Policy Implications", "paragraphs": ["The IMO's overall framework for controlling vessels emissions (MARPOL Annex VI) has been in place since 2005. While the United States, as an IMO member, is subject to the IMO's 2020 sulfur standards, the international standards apply equally to all parties and all vessels. The impacts of sulfur standards on bunker fuel have been an important consideration, but IMO member nations have agreed to the standards independent of any particular energy policies. Moreover, MARPOL Annex VI preceded the U.S. shale gas boom, so commitment to that initial IMO framework could not have anticipated United States' current role as a dominant energy producer. Any changes within the international shipping fleet to install sulfur scrubbers, fuel engines with LNG, or switch to other low sulfur fuels, are being driven primarily by market forces in fuel supply, shipbuilding, and shipping\u2014not by any particular push to favor one fuel over another. Nonetheless, given its particular status, the question arises whether the standards may create an economic opportunity for the United States, in energy or otherwise. More specifically, could international adoption of LNG as a bunker fuel create an important new market for U.S. natural gas producers, shipbuilders, or infrastructure developers?"], "subsections": [{"section_title": "U.S. Opportunities and Challenges", "paragraphs": ["As discussed above, depending upon the adoption of LNG bunkering in the global fleet, the LNG bunker fuel market could grow to several billion dollars by 2030. If U.S. LNG producers were to supply a significant share of this market\u2014on the strength of comparatively low LNG production costs\u2014LNG bunkering could increase demand for U.S. natural gas production, transportation, and liquefaction. Opportunities in LNG-related shipbuilding might be more limited, as most of this occurs overseas, with the exception of Jones Act vessels. In the latter case, demand for domestically-constructed LNG bunkering barges could be one significant area of economic growth. Engineering and construction firms could benefit from new opportunities to develop new port infrastructure for LNG storage and transfer. While likely limited in number, such port facilities could be complex, high value projects costing tens or hundreds of millions of dollars to complete. Such projects could create jobs in engineering, construction, and operation, which could be important to local communities. ", "Although LNG bunkering could present the United States with new economic opportunities, it may pose challenges as well. Rising demand for LNG in the maritime sector could increase natural gas prices for domestic consumers. In addition to being the world's largest natural gas producer, as of 2018, the United States is also the world's largest producer of crude oil and the second largest bunkering hub. Consequently, while vessel conversion to LNG bunkering may increase demand for U.S.-produced natural gas, it could be partially offset by reduced demand for U.S.-produced crude oil or refined products. Exactly how changing demand in one sector could affect the other is unclear. Furthermore, while LNG can reduce pollutant emissions from vessels, emissions and environmental impacts from increased natural gas production and transportation could increase overall emissions. Much of the net environmental impact depends upon practices in the natural gas industry, which are the subject of ongoing study and debate. Although new LNG bunkering infrastructure can create jobs, as the Tacoma LNG projects shows, the construction of such port facilities can be controversial for reasons of safety, security, and environmental impact. ", "Overarching the considerations above is uncertainty about how the global shipping fleet will adapt to the IMO sulfur standards over time. This uncertainty complicates decisions related to both private investment and public policy. LNG-fueled ships still account for only a fraction of the U.S. and global fleets, and it may take several decades for significant benefits of LNG-powered vessels to be realized. It is also possible that alternative ship fuels, including biofuels, electric engines, and hybrid engines, will become more economically viable in coming years. Given the uncertainty surrounding the future of LNG as a ship fuel, it is hard to predict the potential benefits or costs that LNG bunkering may provide to the United States."], "subsections": []}, {"section_title": "Considerations for Congress", "paragraphs": ["Until now, the private sector has added LNG-fueled vessels to fleets in the United States in a piecemeal manner under existing federal statutes and regulation. Congress could encourage the growth of LNG bunkering by various means, such as providing tax incentives to support the construction of LNG bunkering facilities and vessels, addressing any statutory or regulatory barriers to bunkering facility siting or operations, and providing funding for technical support to domestic carriers seeking to adopt LNG technology. Alternatively, Congress could seek to encourage competing bunker fuel options, such as biofuels, by incentivizing them in similar ways. In addition, Congress could also affect growth in LNG bunkering through policies affecting the LNG industry or domestic shipping industry as a whole. Changes in federal regulation related to natural gas production, or changes to the Jones Act, for example, while not directed at LNG bunkering, could nonetheless affect its economics. Therefore, evaluating the potential implications on LNG bunkering of broader energy, environmental, or economic objectives may become an additional consideration in congressional oversight and legislative initiatives. If LNG bunkering expands significantly in U.S. ports, Congress also may examine the adequacy of existing measures to ensure the safety and security of LNG vessels, storage, and related facilities."], "subsections": []}]}]}}
{"id": "R43389", "title": "The Debt Limit Since 2011", "released_date": "2019-03-05T00:00:00", "summary": ["The Constitution grants Congress the power to borrow money on the credit of the United States\u2014one part of its power of the purse\u2014and thus mandates that Congress exercise control over federal debt. Control of debt policy has at times provided Congress with a means of raising concerns regarding fiscal policies. Debates over federal fiscal policy have been especially animated in the past decade, in part because of the accumulation of federal debt in the wake of the 2007-2008 financial crisis and subsequent recession. Rising debt levels, along with continued differences in views of fiscal policy, led to a series of contentious debt limit episodes in recent years.", "The most recent suspension of the debt limit lapsed after March 1, 2019. The limit was then reset at $21.988 trillion, a level that accommodates federal obligations incurred during the suspension period. U.S. Treasury Secretary Steven Mnuchin invoked extraordinary authorities on March 4, 2019. CBO estimates that Treasury could meet federal obligations until just before or just after October 1, 2019. One private estimate suggests Treasury could cover federal payments until mid-August, if not later. Such estimates are subject to considerable uncertainty.", "The 2011 debt limit episode was resolved on August 2, 2011, when President Obama signed the Budget Control Act of 2011 (BCA; S. 365; P.L. 112-25). The BCA included provisions aimed at deficit reduction and allowing the debt limit to rise in three stages, the latter two subject to congressional disapproval. Once the BCA was enacted, a presidential certification triggered a $400 billion increase. A second certification led to a $500 billion increase on September 22, 2011, and a third, $1,200 billion increase took place on January 28, 2012.", "Federal debt again reached its limit on December 31, 2012. Extraordinary measures were again used to allow payment of government obligations until February 4, 2013, when H.R. 325, which suspended the debt limit until May 19, 2013, was signed into law (P.L. 113-3), which reset extraordinary measures. On October 16, 2013, enactment of a continuing resolution (H.R. 2775; P.L. 113-46) resolved a funding lapse and suspended the debt limit through February 7, 2014. On February 15, 2014, a measure to suspend the debt limit (S. 540; P.L. 113-83) through March 15, 2015, was enacted. On November 2, 2015, the Bipartisan Budget Act of 2015 (BBA2015; H.R. 1314; P.L. 114-74) was enacted, which suspended the debt limit through March 15, 2017, and relaxed some discretionary spending limits.", "On March 16, 2017, the debt limit was reset at $19,809 billion, and Treasury Secretary Mnuchin notified Congress that he had invoked authorities to use extraordinary measures. On September 6, 2017, an agreement on the debt limit and a continuing resolution was announced between President Trump and congressional leaders. Two days later a measure (P.L. 115-56) was enacted to implement that agreement, which included a suspension of the debt limit through December 8, 2017. Once that suspension lapsed\u2014with a new debt limit set at $20,456 billion\u2014Treasury Secretary Mnuchin invoked authorities to employ extraordinary measures, which estimates had suggested would last until early March. The debt limit issue was addressed when the Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123) was enacted on February 9, 2018. Section 30301 of the BBA 2018 suspended the debt limit through March 1, 2019.", "Total federal debt increases when the government sells debt to the public to finance budget deficits, which adds to debt held by the public, or when the federal government issues debt to certain government accounts, such as the Social Security, Medicare, and Transportation trust funds, in exchange for their reported surpluses\u2014which adds to debt held by government accounts; or when new federal loans outpace loan repayments. The sum of debt held by the public and debt held by government accounts is the total federal debt. Surpluses reduce debt held by the public, while deficits raise it."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Federal Debt Policy and the Debt Limit", "paragraphs": ["The Constitution grants Congress the power to borrow money on the credit of the United States\u2014one part of its power of the purs e\u2014and thus mandates that Congress exercise control over federal debt. Control of debt policy provides Congress with one means of expressing views on appropriate fiscal policies. ", "Before 1917 Congress typically controlled individual issues of debt. In September 1917, while raising funds for the United States' entry into World War I, Congress also imposed an aggregate limit on federal debt in addition to individual issuance limits. Over time, Congress granted Treasury Secretaries more leeway in debt management. In 1939, Congress agreed to impose an aggregate limit that gave the U.S. Treasury authority to manage the structure of federal debt.", "The statutory debt limit applies to almost all federal debt. The limit applies to federal debt held by the public (that is, debt held outside the federal government itself) and to federal debt held by the government's own accounts. Federal trust funds, such as Social Security, Medicare, Transportation, and Civil Service Retirement accounts, hold most of this internally held debt. For most federal trust funds, net inflows by law must be invested in special federal government securities. When holdings of those trust funds increase, federal debt subject to limit will therefore increase as well. The government's on-budget fiscal balance, which excludes the net surplus or deficit of the U.S. Postal Service and the Social Security program, does not directly affect debt held in government accounts.", "The change in debt held by the public is mostly determined by the government's surpluses or deficits. The net expansion of the federal government's balance sheet through loan programs also increases the government's borrowing requirements. Under federal budgetary rules, however, only the net subsidy cost of those loans is included in the calculation of deficits. "], "subsections": [{"section_title": "Current Situation", "paragraphs": ["The most recent suspension of the debt limit lapsed after March 1, 2019. The limit was then reset at $21.988 trillion, a level that accommodates federal obligations incurred during the suspension period. On March 4, 2019, the first business day after the debt limit suspension had lapsed, U.S. Treasury Secretary Steven Mnuchin invoked extraordinary authorities. Those extraordinary measures (described below in more detail), along with cash balances and incoming revenues, can be used to meet federal obligations in coming months. ", "In anticipation of the lapse of the debt limit suspension, the U.S. Treasury had announced it would stop issuing state and local government securities (SLGs) on March 1, 2019. SLGs are used by state and local governments as one way of complying with IRS anti-arbitrage rules. Issuance of SLGs is expected to resume once the current debt limit episode is resolved.", "CBO estimates that Treasury could meet federal obligations until just before or just after October 1, 2019. One estimate suggested those resources would suffice to cover federal payments until August, if not later. Another estimate of an informed Treasury market observer suggests federal payments could be made until \"just before Labor Day,\" albeit while noting substantial uncertainties. The current size of federal deficits, which are now higher than those in previous years, or economic uncertainty could affect that timing. Changes in the federal tax system and Internal Revenue Service (IRS) operations could also add uncertainties to projections of Treasury cash flows.", "In late 2017 and early 2018 the debt limit issue was tied to consideration of funding measures for FY2018. On September 8, 2017, enactment of a continuing resolution (Continuing Appropriations Act, 2018 and Supplemental Appropriations for Disaster Relief Requirements Act, 2017; P.L. 115-56 ) suspended the debt limit through December 8, 2018. Once that suspension lapsed, extraordinary measures were used to meet federal obligations. The Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123 ), enacted on February 9, 2018, included a provision (Section 30301) that suspended the debt limit through March 1, 2019. A section near the end of this report summarizes recent debt limit activity in more detail. ", "In January 2019, the House adopted Rule XXVIII that when the House approves a budget resolution, a measure to suspend the debt limit for the remainder of the fiscal year would be automatically engrossed and transmitted to the Senate."], "subsections": []}, {"section_title": "Debt Limit Suspensions", "paragraphs": ["In recent years, Congress has chosen to suspend the debt limit for a set amount of time instead of raising the debt limit by a fixed dollar amount. When a suspension ends, the debt limit is reestablished at a level that accommodates federal spending during the suspension period. The U.S. Treasury is thus left with minimal headroom under the debt limit after a suspension ends, leaving only a cash balance similar to that when the suspension began. Therefore, the Treasury Secretary typically invokes a set of extraordinary measures, which are described below. "], "subsections": []}, {"section_title": "Extraordinary Measures and Debt Issuance Suspension Periods", "paragraphs": ["Congress has authorized the Treasury Secretary to invoke a \"debt issuance suspension period,\" which triggers the availability of extraordinary measures, which are special strategies to handle cash and debt management. Actions taken in the past include suspending sales of nonmarketable debt, postponing or downsizing marketable debt auctions, and withholding receipts that would be transferred to certain government trust funds. In particular, extraordinary strategies include suspending investments in Civil Service Retirement and Disability Fund (CSRDF) and the G-Fund of the Federal Employees' Retirement System (FERS), as well as redeeming a limited amount of CSRDF securities. The Treasury Secretary is also mandated to make those funds whole after the resolution of a debt limit episode. "], "subsections": []}, {"section_title": "Timing Uncertainties", "paragraphs": ["The amount of time that extraordinary measures allow the U.S. Treasury to extend its borrowing capacity depends on the pace of deficit spending, the timing of cash receipts and outlays, and other technical factors. Tax deadlines and processing dates for some federal disbursements are scheduled, but amounts of collections and outlays depend on decisions and actions of private entities and other federal agencies, which are more difficult to predict. The effects of recent tax changes ( P.L. 115-97 ) and the possibility that further changes could occur in the 116 th Congress could also affect revenue projections. Treasury cash flow projections are therefore subject to uncertainty, which complicates attempts to estimate how long extraordinary measures would enable the federal government to meet its financial obligations. ", "Estimates calculated by others of when Treasury would reach the debt limit and how long extraordinary measures would extend federal borrowing capacity have typically been close to Treasury's estimates. The U.S. Treasury Inspector General reported in 2012 that \"the margin of error in these estimates at a 98 percent confidence level is plus or minus $18 billion for one week into the future and plus or minus $30 billion for two weeks into the future.\"", "An impending debt ceiling constraint presents more than one deadline. A first deadline is the exhaustion of borrowing capacity. The U.S. Treasury, however, could continue to meet obligations using available cash balances. As cash balances run down, however, other complications could emerge and Treasury's cash resources could fall below levels deemed prudent by outside advisors well before extraordinary measures were exhausted. Low cash balances could complicate federal debt management and Treasury auctions. The Government Accountability Office (GAO) has also noted that debt limit episodes generate severe strains for Treasury staff, especially when its room for maneuver is severely restricted. Finally, if the U.S. Treasury were to run out of cash, the Treasury Secretary would face difficult choices in how to comply simultaneously with the debt limit and the mandate to pay federal obligations in a timely fashion.", "Severe financial dislocation could result if the U.S. Treasury were unable to make timely payments. For example, repo lending arrangements, which rely heavily on Treasury securities for collateral, could become more expensive or could be disrupted. \"Repo\" is short for repurchase agreement, which provides a common means of secured lending among financial institutions. Repo lending rates rose sharply in early August 2011 during the 2011 debt limit episode, but fell to previous levels once that episode was resolved. ", "The Federal Reserve Open Market Committee indicated in an October 16, 2013, discussion that \"in the event of delayed payments on Treasury securities,\" discount window and other operations would proceed \"under the usual terms.\" That statement has been taken to imply that the Federal Reserve would be \"prepared to backstop the Treasury market in the event of a political deadlock.\" In addition, the Federal Reserve Bank of New York issued a description of contingency plans in December 2013 in the event of Treasury payment delays, but warned that such measures \"only modestly reduce, not eliminate, the operational difficulties posed by a delayed payment on Treasury debt. Indeed, even with these limited contingency practices, a temporary delayed payment on Treasury debt could cause significant damage to, and undermine confidence in, the markets for Treasury securities and other assets.\""], "subsections": []}, {"section_title": "Recent Increases in the Debt Limit", "paragraphs": [" Table 1 presents debt limit changes over the past two decades. The debt limit was modified six times from 1993 through 1997. Two of those modifications were enacted to prevent the debt limit restriction from delaying payment of Social Security benefits in March 1996 before a broader increase in the debt was passed at the end of that month. ", "After 1997, debt limit increases were unnecessary due to the appearance of federal surpluses that ran from FY1998 through FY2001. Since FY2002 the federal government has run persistent deficits, which have been ascribed to major tax cuts enacted in 2001 and 2003 and higher spending. Those deficits required a series of increases in the debt limit.", "Starting with passage of the BCA in August 2011, Congress has employed measures that have led to debt limit increases that occur some time after a law is enacted. Dates in the first column of Table 1 in general refer to dates of enactment, which do not match dates when debt limit increases have occurred. For instance, the debt limit was suspended when P.L. 113-83 was enacted on February 12, 2014, and was reestablished on March 16, 2015, when that suspension lapsed. One result of suspending the debt limit, as has been the practice in recent years, is that no fixed number appears in legislation and that a new debt limit level is set only when the suspension lapses."], "subsections": []}]}, {"section_title": "The 2011 Debt Limit Episode", "paragraphs": ["The 2011 debt limit episode attracted far more attention than other recent debt limit episodes. In mid-2011 several credit ratings agencies and investment banks expressed concerns about the consequences to the financial system and the economy if the U.S. Treasury were unable to fund federal obligations. Many economists and financial institutions stated that if the market associated Treasury securities with default risks, the effects on global capital markets could be significant.", "Debate during the 2011 debt limit episode reflected a growing concern with the fiscal sustainability of the federal government. While projections issued in 2011 indicated that federal deficits would shrink over the next half decade, deficits later in the decade were expected to rise. Without major changes in federal policies, the amount of federal debt would increase substantially. CBO has repeatedly warned that the current trajectory of federal borrowing is unsustainable and could lead to slower economic growth in the long run as debt rises as a percentage of GDP. Unless federal policies change, Congress would repeatedly face demands to raise the debt limit to accommodate the growing federal debt in order to provide the government with the means to meet its financial obligations.", "The next section provides a brief chronology of events from the 2011 debt limit episode."], "subsections": [{"section_title": "The 2011 Debt Ceiling Episode Begins", "paragraphs": ["On May 16, 2011, U.S. Treasury Secretary Timothy Geithner announced that the federal debt had reached its statutory limit and declared a debt issuance suspension period, which would allow certain extraordinary measures to extend Treasury's borrowing capacity until about August 2, 2011. Had the U.S. Treasury exhausted its borrowing authority, it could have used cash balances to meet obligations for some period of time.", "Over the course of the 2011 debt limit episode Treasury estimates of when the debt limit would begin to bind and how long extraordinary measures would suffice to meet federal obligations shifted. For instance, in April 2011 the U.S. Treasury had projected that its borrowing capacity, even using extraordinary measures, would be exhausted by about July 8, 2011. The Treasury Secretary, in a letter to Congress dated May 2, 2011, had indicated that he would declare a debt issuance suspension period on May 16, unless Congress acted beforehand, which would allow certain extraordinary measures to extend Treasury's borrowing capacity until early August 2011. On July 1, 2011, the U.S. Treasury confirmed its view that its borrowing authority would be exhausted on August 2, the date cited in Treasury Secretary Geithner's May 16, 2011, letter that invoked the debt issuance suspension period."], "subsections": [{"section_title": "Proposed Solutions in the Spring of 2011", "paragraphs": ["A bill ( H.R. 1954 ) to raise the debt limit to $16,700 billion was introduced on May 24 and was defeated in a May 31, 2011, House vote of 97 to 318. The House passed the Cut, Cap, and Balance Act of 2011 ( H.R. 2560 ; 234-190 vote) on July 19, 2011. The measure would have increased the statutory limit on federal debt from $14,294 billion to $16,700 billion once a proposal for a constitutional amendment requiring a balanced federal budget was transmitted to the states. On July 22, the Senate tabled the bill on a 51-46 vote.", "Some commentators in early 2011 suggested that cutting federal spending could slow the growth in federal debt enough to avoid an increase in the debt limit. The scale of required spending reductions, as of the middle of FY2011, would have been large. For example, at the start of the third quarter of FY2011 on April 1, 2011, federal debt was within $95 billion of its limit. According to CBO baseline estimates issued at the time, the expected deficit for the remainder of FY2011 would be about $570 billion. Reaching the end of FY2011 on September 30, 2011, without an increase in the debt limit or the use of extraordinary measures would have thus required a spending reduction of at least $570 billion, or about 85% of discretionary spending for the rest of that fiscal year.", "Some have suggested that the Fourteenth Amendment (Section 4), which states that \"(t)he validity of the public debt of the United States ... shall not be questioned,\" could provide the President with authority to ignore the statutory debt limit. President Obama rejected such claims, as did most legal analysts. "], "subsections": []}]}, {"section_title": "The Budget Control Act of 2011", "paragraphs": ["On July 25, 2011, the Budget Control Act of 2011 was introduced in different forms by both House Speaker Boehner (House Substitute Amendment to S. 627 ) and Majority Leader Reid ( S.Amdt. 581 to S. 1323 ). Subsequently, on August 2, 2011, President Obama signed into law a substantially revised compromise measure (Budget Control Act, BCA; P.L. 112-25 ), following House approval by a vote of 269-161 on August 1, 2011, and Senate approval by a vote of 74-26 on August 2, 2011. This measure included numerous provisions aimed at deficit reduction, and would allow a series of increases in the debt limit of up to $2,400 billion ($2.4 trillion) subject to certain conditions. These provisions eliminated the need for further increases in the debt limit until early 2013. ", "In particular, the BCA included major provisions that", "imposed discretionary spending caps, enforced by automatic spending reductions, referred to as a \"sequester\"; established a Joint Select Committee on Deficit Reduction, whose recommendations would be eligible for expedited consideration; required a vote on a joint resolution on a proposed constitutional amendment to mandate a balanced federal budget; and instituted a mechanism allowing for the President and Treasury Secretary to raise the debt ceiling, subject to congressional disapproval. "], "subsections": [{"section_title": "Debt Limit Increases Under the BCA", "paragraphs": ["The legislation provides a three-step procedure by which the debt limit can be increased. First, the debt limit was raised by $400 billion, to $14,694 billion on August 2, 2011, following a certification of the President that the debt was within $100 billion of its legal limit. ", "A second increase of $500 billion occurred on September 22, 2011, which was also triggered by the President's certification of August 2. The second increase, scheduled for 50 days after that certification, was subject to a joint resolution of disapproval. Because such a resolution could be vetoed, blocking a debt limit increase would be challenging. The Senate rejected a disapproval measure ( S.J.Res. 25 ) on September 8, 2011, on a 45-52 vote. The House passed a disapproval measure ( H.J.Res. 77 ) on a 232-186 vote, although the Senate declined to act on that measure. The resulting increase brought the debt limit to $15,194 billion.", "In late December 2011, the debt limit came within $100 billion of its statutory limit, which triggered a provision allowing the President to issue a certification that would lead to a third increase of $1,200 billion. By design, that increase matched budget reductions slated to be made through sequestration and related mechanisms over the FY2013-FY2021 period. That increase was also subject to a joint resolution of disapproval. The President reportedly delayed that request to allow Congress to consider a disapproval measure. On January 18, 2012, the House passed such a measure ( H.J.Res. 98 ) on a 239-176 vote. The Senate declined to take up a companion measure ( S.J.Res. 34 ) and on January 26, 2012, voted down a motion to proceed (44-52) on the House-passed measure ( H.J.Res. 98 ), thus clearing the way for the increase, resulting in a debt limit of $16,394 billion.", "The third increase could also have been triggered in two other ways. A debt limit increase of $1,500 billion would have been permitted if the states had received a balanced budget amendment for ratification. A measure ( H.J.Res. 2 ) to accomplish that, however, failed to reach the constitutionally mandated two-thirds threshold in the House in a 261\u2013165 vote held on November 18, 2011. The debt limit could also have been increased by between $1,200 billion and $1,500 billion had recommendations from the Joint Select Committee on Deficit Reduction, popularly known as the Super Committee, been reported to and passed by each chamber. If those recommendations had been estimated to achieve an amount between $1,200 billion and $1,500 billion, the debt limit increase would be matched to that figure. The Joint Select Committee, however, was unable to agree on a set of recommendations."], "subsections": []}]}]}, {"section_title": "The Debt Limit in 2013", "paragraphs": [], "subsections": [{"section_title": "Debt Limit Reached at End of December 2012", "paragraphs": ["On December 26, 2012, the U.S. Treasury stated that the debt would reach its limit on December 31 and that the Treasury Secretary would declare a debt issuance suspension period to authorize extraordinary measures (noted above, described below) that could be used to meet federal payments for approximately two months. As predicted, federal debt did reach its limit on December 31, when large biannual interest payments, in the form of Treasury securities, were made to certain trust funds. ", "The U.S. Treasury stressed that these extraordinary measures would be exhausted more quickly than in recent debt limit episodes for various technical reasons. A January 14, 2013, letter from Treasury Secretary Geithner also estimated that extraordinary measures would be exhausted sometime between mid-February or early March 2013. CBO had previously estimated that federal debt would reach its limit near the end of December 2012, and that the extraordinary measures could be used to fund government activities until mid-February or early March 2013. During the 112 th Congress, Speaker John Boehner had stated that a future debt limit increase should be linked to spending cuts of at least the same magnitude, a position that reflects the structure of the Budget Control Act. "], "subsections": []}, {"section_title": "Suspension of the Debt Limit Until May 19, 2013", "paragraphs": ["House Republicans decided on January 18, 2013, to propose a three-month suspension of the debt limit tied to a provision that would delay Members' salaries in the event that their chamber of Congress had not agreed to a budget resolution. H.R. 325 , according to its sponsor, would allow Treasury to pay bills coming due before May 18, 2013. A new debt limit would then be set on May 19. The measure would also cause salaries of Members of Congress to be held in escrow \"(i)f by April 15, 2013, a House of Congress had not agreed to\" a budget resolution. Such a provision, however, could raise constitutional issues under the Twenty-Seventh Amendment. ", "On January 23, 2013, the House passed H.R. 325 , which suspended the debt limit until May 19, 2013, on a 285-144 vote. The Senate passed the measure on January 31 on a 64-34 vote; it was then signed into law ( P.L. 113-3 ) on February 4."], "subsections": [{"section_title": "Replenishing the U.S. Treasury's Extraordinary Measures", "paragraphs": ["Once H.R. 325 was signed into law on February 4, the U.S. Treasury replenished funds that had been used to meet federal payments, thus resetting its ability to use extraordinary measures. As of February 1, 2013, the U.S. Treasury had used about $31 billion in extraordinary measures. Statutory language that grants the Treasury Secretary the authority to declare a \"debt issuance suspension period\" (DISP), which permits certain extraordinary measures, also requires that \"the Secretary of the Treasury shall immediately issue\" amounts to replenish those funds once a debt issuance suspension period (DISP) is over. A DISP extends through \"any period for which the Secretary of the Treasury determines for purposes of this subsection that the issuance of obligations of the United States may not be made without exceeding the public debt limit.\" ", "Shortly after the declaration of a new debt issuance suspension period in February 2013, Jacob Lew was confirmed as Treasury Secretary, replacing Timothy Geithner."], "subsections": []}, {"section_title": "Debt Limit Reset and Return of Extraordinary Measures in May 2013", "paragraphs": ["Once the debt limit suspension lapsed after May 18, 2013, the U.S. Treasury reset the debt limit at $16,699 billion, or $305 billion above the previous statutory limit. On May 20, 2013, the first business day after the expiration of the suspension, debt subject to limit was just $25 million below the limit.", "Some Members, as noted above, stated that H.R. 325 ( P.L. 113-3 ) was intended to prevent the U.S. Treasury from accumulating cash balances. The U.S. Treasury's operating cash balances at the start of May 20, 2013 ($34 billion), were well below balances ($60 billion) at the close of February 4, 2013, when H.R. 325 was enacted. Some experienced analysts had stated that the exact method by which the debt limit would be computed according to the provisions of P.L. 113-3 was not fully clear. The U.S. Treasury has not provided details of how it computed the debt limit after the suspension lapsed.", "Treasury Secretary Jacob Lew notified Congress on May 20, 2013, that he had declared a new debt issuance suspension period (DISP), triggering authorities that allow the Treasury Secretary to use extraordinary measures to meet federal obligations until August 2. On August 2, 2013, Secretary Lew notified Congress that the DISP would be extended to October 11, 2013. In those notifications, as well in other communications, Secretary Lew urged Congress to raise the debt limit in a \"timely fashion.\" "], "subsections": []}]}, {"section_title": "Debt Limit Forecasts in 2013", "paragraphs": ["How long the U.S. Treasury could have continued to pay federal obligations absent an increase in the debt limit depended on economic conditions, which affect tax receipts and spending on some automatic stabilizer programs, and the pace of federal spending. Stronger federal revenue collections and a slower pace of federal outlays in 2013 reduced the FY2013 deficit compared to previous years. CBO estimates for July 2013 put the total federal deficit at $606 billion in FY2013, well below the FY2012 deficit of $1,087 billion, implying a slower overall pace of borrowing. Special dividends from mortgage giants Fannie Mae and Freddie Mac also extended the U.S. Treasury's ability to meet federal obligations.", "In May 2013, the investment bank Goldman Sachs projected that, with the addition of the Fannie Mae dividend and an estimated postsuspension $16.70 trillion limit, federal borrowing capacity would be exhausted in early October. ", "Estimates of Treasury cash flows are subject to substantial uncertainty. The U.S. Treasury Inspector General reported in 2012 that \"the margin of error in these estimates at a 98 percent confidence level is plus or minus $18 billion for one week into the future and plus or minus $30 billion for two weeks into the future.\""], "subsections": [{"section_title": "Fannie Mae and Freddie Mac Dividend Payments to the U.S. Treasury", "paragraphs": ["In September 2008, Fannie Mae and Freddie Mac entered voluntary conservatorship. As part of their separate conservatorship agreements, Treasury agreed to support Fannie Mae and Freddie Mac in return for senior preferred stock that would pay dividends. Losses for Fannie Mae and Freddie Mac while in conservatorship have totaled $123 billion, although each has been profitable since the start of 2012. For a profitable firm, some past losses can offset future tax liabilities and would be recognized on its balance sheet as a \"deferred tax asset\" under standard accounting practices. Fannie Mae and Freddie Mac wrote down the value of their tax assets because their return to profitability was viewed as unlikely. ", "The return of Fannie Mae and Freddie Mac to profitability opened the possibility for a reversal of those writedowns. On May 9, 2013, Fannie Mae announced that it would reverse the writedown of its deferred tax assets. The Treasury agreements, as amended, set the dividend payments to a sweep (i.e., an automatic transfer at the end of a quarter) of Fannie Mae's and Freddie Mac's net worth. Thus a reversal of that writedown of the deferred tax assets triggered a payment of about $60 billion from Fannie Mae to the U.S. Treasury on June 28, 2013. The U.S. Treasury received $66.3 billion from Fannie Mae and Freddie Mac on that date. Fannie Mae stated that it would pay an additional $10.2 billion in September 2013. On August 7, 2013, Freddie Mac announced that it had not yet decided to write down its deferred tax assets of $28.6 billion."], "subsections": []}, {"section_title": "Treasury Secretary Lew's Message to Congress in 2013", "paragraphs": ["In May 2013, Secretary Lew had notified Congress that he expects the U.S. Treasury will be able to meet federal obligations until at least Labor Day. Some private estimates suggest that the U.S. Treasury, with the assistance of extraordinary measures, would probably be able to meet federal obligations until mid-October or November 2013. By comparison, in 2011, Treasury Secretary Geithner invoked authority to use extraordinary measures on May 16, 2011, which helped fund payments until the debt ceiling was raised on August 2, 2011.", "On August 26, 2013, Treasury Secretary Lew notified congressional leaders that the government would exhaust its ability to borrow in mid-October according to U.S. Treasury projections. At that point, the U.S. Treasury would have only an estimated $50 billion in cash to meet federal obligations. With that cash and incoming receipts, the U.S. Treasury would be able to meet obligations for some weeks after mid-October according to independent analysts, although projecting when cash balances would be exhausted is difficult. ", "On September 25, 2013, Secretary Lew sent another letter to Congress with updated forecasts of the U.S. Treasury's fiscal situation. According to those forecasts, the U.S. Treasury would exhaust its borrowing capacity no later than October 17. At that point, the U.S. Treasury would have about $30 billion in cash balances on hand to meet federal obligations. At the close of business on October 8, 2013, the U.S. Treasury had an operating cash balance of $35 billion.", "On October 3, 2013, the U.S. Treasury issued a brief outlining potential macroeconomic effects of the prospect that the federal government would be unable to pay its obligations in a timely fashion. The brief provided data on how various measures of economic confidence, asset prices, and market volatility responded to the debt limit episode in the summer of 2011."], "subsections": []}, {"section_title": "When Might the Debt Limit Have Been Binding?", "paragraphs": ["In the absence of a debt limit increase, the cash balances on hand when the U.S. Treasury's borrowing capacity ran out would then dwindle. At the close of business on October 11, 2013, the U.S. Treasury's cash balance was $35 billion. Those low cash balances, however, could raise two complications even before that point. ", "First, low cash balances could have complicated federal debt management and Treasury auctions in late October or early November. Yields for Treasury bills maturing after the October 17 date mentioned in Secretary Lew's September 25 letter have increased relative to other yields on other Treasury securities. This appeared to signal reluctance among some investors to hold Treasury securities that might be affected by debt limit complications.", "Second, repo lending, which relies heavily on Treasury securities for collateral, could become more expensive or could be disrupted. Repo lending rates rose sharply in early August 2011 during the 2011 debt limit episode, but fell to previous levels once that episode was resolved."], "subsections": []}, {"section_title": "Market Reaction to the Impending Exhaustion of Treasury's Borrowing Capacity in October 2013", "paragraphs": ["In the past, some financial markets have reacted to impending debt limit deadlines, signaling concerns about the federal government's ability to meet obligations in a timely manner. In early October 2013, the U.S. Treasury issued a brief that outlined how various measures of economic confidence, asset prices, and market volatility responded to the debt limit episode in the summer of 2011, and the prospect that the federal government might not have been able to pay its obligations in a timely fashion.", "Some investors expressed reluctance to hold Treasury securities that might be affected by debt limit complications. Fidelity Investments, J.P. Morgan Investment Management Inc., and certain other funds stated in October 2013 that they had sold holdings of Treasury securities scheduled to mature or to have coupon payments between October 16 and November 6, 2013.", "In October 2013, yields for Treasury bills maturing in the weeks after October 17\u2014when the U.S. Treasury's borrowing capacity was projected to be exhausted\u2014rose sharply relative to yields on Treasury securities maturing in 2014. Figure 1 shows secondary market yields on Treasury bills set to mature after the projected date when the Treasury's borrowing capacity would be exhausted. The horizontal axis shows days before the end of the DISP, and the vertical scale shows basis points (bps). For instance, the yield for the Treasury bill maturing October 24, 2013, rose from close to zero to 46 bps on October 15, 2013. Those yields are about 10 times larger than for similar bills that mature in calendar year 2014. A four-week Treasury bill auctioned on October 8, 2013, sold with a yield of 35 bps. By contrast, a four-week bill sold on September 4, 2013, sold with a yield of 2 bps. After enactment of a debt limit measure ( H.R. 2775 ; P.L. 113-46 ) on October 16, 2013, however, those yields returned to their previous levels."], "subsections": []}, {"section_title": "Debt Limit Issues in 2013", "paragraphs": ["Congressional consideration of federal debt policy raised several policy issues that were explored in hearings and in broader policy discussions."], "subsections": [{"section_title": "Hearings in 2013", "paragraphs": ["On January 22, 2013, the House Ways and Means Committee held hearings on the history of the debt limit and how past Congresses and Presidents have negotiated changes in the debt limit. On April 10, 2013, the House Ways and Means Subcommittee on Oversight held hearings on federal debt and fiscal management when the debt limit binds. The Joint Economic Committee held hearings on the economic costs of uncertainty linked to the debt limit on September 18, 2013.", "On October 10, 2013, the Senate Finance Committee held hearings on the debt limit and heard testimony from Treasury Secretary Jacob Lew. On the same morning, the Senate Banking Committee held hearings on the effects of a possible federal default on financial stability and economic growth, and heard testimony from heads of financial industry trade associations."], "subsections": []}, {"section_title": "Debt Prioritization and H.R. 807", "paragraphs": ["On April 30, 2013, the House Ways and Means Committee reported H.R. 807 , which would grant the Treasury Secretary the authority to borrow to fund principal and interest payments on debt held by the public and the Social Security trust funds if the debt limit were reached. The Treasury Secretary would also have had to submit weekly reports to Congress after that authority were exercised. On May 9, 2013, the House passed and amended version of H.R. 807 . The House also passed a version of H.J.Res. 59 that incorporated the text of H.R. 807 on September 20. On September 27, the Senate passed an amended version of the measure that did not contain provisions from H.R. 807 . The Obama Administration indicated that it would veto H.R. 807 or H.J.Res. 59 containing similar provisions, were either to be approved by Congress. The October 2013 debt limit measure ( H.R. 2775 ; P.L. 113-46 ) contained no payment prioritization provisions.", "H.R. 807 would have affected one aspect of the U.S. Treasury's financial management of the Social Security program, but would not alter other aspects. If the debt limit were reached, the U.S. Treasury could still face constraints that could raise challenges in financial management. The U.S. Treasury is responsible for (1) making Social Security beneficiary payments; (2) reinvesting Social Security payroll taxes and retirement contributions in special Treasury securities held by the Social Security trust fund; and (3) paying interest to the Social Security trust funds, in the form of special Treasury securities, at the end of June and December. Those special Treasury securities, either funded via Social Security payroll receipts or biannual interest payments, are subject to the debt limit. Thus, sufficient headroom under the debt limit is needed to issue those special Treasury securities. If the debt limit were reached and extraordinary measures were exhausted, the Treasury Secretary's legal requirement to reinvest Social Security receipts by issuing special Treasury securities could at times be difficult to reconcile with his legal requirement not to exceed the statutory debt limit."], "subsections": []}]}]}, {"section_title": "Resolution of the Debt Limit Issue in October 2013", "paragraphs": ["On September 25, Treasury Secretary Lew notified Congress that the government would exhaust its borrowing capacity around October 17 according to updated estimates. At that point, the U.S. Treasury would have had a projected cash balance of only $30 billion to meet federal obligations. ", "On October 16, 2013, Congress passed a continuing resolution (Continuing Appropriations Act, 2014; H.R. 2775 ; P.L. 113-46 ) that included a provision to allow a suspension of the debt limit. That measure passed the Senate on an 81-18 vote. The House then passed the measure on a 285-144 vote. The President signed the bill ( P.L. 113-46 ) early the next morning. The measure suspended the debt limit until February 8, 2014, once the President certified that the U.S. Treasury would be unable to meet existing commitments without issuing debt. The President sent congressional leaders a certification on October 17, 2013, to trigger a suspension of the debt limit through February 7, 2014.", "That suspension, however, was subject to a congressional resolution of disapproval. If a resolution of disapproval had been enacted, the debt limit suspension would end on that date. Specific expedited procedures in each chamber governed the consideration of the resolution of disapproval. The resolution, if passed, was subject to veto. A resolution of disapproval ( H.J.Res. 99 ) was passed in the House on October 20, 2013, on a 222-191 vote. A similar measure, S.J.Res. 26 , was not approved by the Senate, so the debt limit increase was not blocked.", "The debt limit suspension ended on February 7, and a limit was set to reflect the amount of debt necessary to fund government operations before the end of the suspension. The U.S. Treasury was precluded in P.L. 113-46 from accumulating excess cash reserves that might have allowed an extension of extraordinary measures.", "The debt limit provisions enacted in October 2013 resemble provisions enacted in 2011 and earlier in 2013. For example, the Budget Control Act of 2011 ( P.L. 112-25 ) also provided for a congressional resolution of disapproval of a debt limit increase. The suspension of the debt limit in H.R. 2775 resembles the suspension enacted in February 2013 ( H.R. 325 ; P.L. 113-3 )."], "subsections": []}, {"section_title": "Other Proposals Regarding the Debt Limit in October 2013", "paragraphs": ["Passage of the Continuing Appropriations Act, 2014 was preceded by other proposals to modify the debt limit. On October 8, 2013, Senate Majority Leader Reid introduced S. 1569 , a measure intended to ensure complete and timely payment of federal obligations. The measure would have extended the suspension of the debt limit enacted in February 2013 ( P.L. 113-3 ). On October 15, 2013, an announcement of a hearing on a proposal to amend the Senate amendment to H.J.Res. 59 appeared on the House Rules Committee website. That hearing, according to a subsequent announcement, was postponed that evening. The measure would extend the debt limit through February 15, 2014, and restrict the Treasury Secretary's ability to employ extraordinary measures through April 15, 2014. The measure would also extend discretionary funding at \"sequester levels\" through December 15, 2013."], "subsections": []}]}, {"section_title": "The Debt Limit in 2014", "paragraphs": ["The resolution of the debt limit episode and the ending of the federal shutdown in October 2013 set up a subsequent episode in early 2014."], "subsections": [{"section_title": "Debt Limit Forecasts in Late 2013 and 2014", "paragraphs": ["In late November 2013, CBO issued an analysis of Treasury cash flows and available extraordinary measures. Treasury, according to those estimates, might exhaust its ability to meet federal obligations in March. Because Treasury cash flows can be highly uncertain during tax refund season, CBO stated that that date could arrive as soon as February 2014 or as late as early June.", "Goldman Sachs had estimated that Treasury would probably exhaust its headroom\u2014the sum of projected cash balances and remaining borrowing authority under the debt limit\u2014in mid to late March, but might in fortuitous circumstances be able to meet its obligations until June. While Goldman Sachs and other independent forecasters noted that that the U.S. Treasury might possibly avoid running out of headroom in late March or early April, waiting until mid-March to address the debt limit could have raised serious risks for the U.S. government's financial situation."], "subsections": []}, {"section_title": "Treasury Secretary Lew Notifies Congress in Early 2014", "paragraphs": ["As the end of the debt limit suspension neared, the U.S. Treasury continued to warn Congress of the consequences on not raising the debt limit. While the Treasury could again employ extraordinary measures after the suspension ended after February 7, 2014, its ability to continue meeting federal obligations would be limited by large outflows of cash resulting from individual income tax refunds. In December 2013, the U.S. Treasury had notified congressional leaders that according to its estimates, extraordinary measures would extend its borrowing authority \"only until late February or early March 2014.\" On January 22, 2014, Secretary Lew called for an increase in the debt limit before the end of debt limit suspension on February 7, 2014, or the end of February. In the first week of February 2014, Secretary Lew stated that the U.S. Treasury could not be certain that extraordinary measures would last beyond February 27, 2014."], "subsections": []}, {"section_title": "Debt Limit Suspension Lapses in February 2014", "paragraphs": ["On February 7, 2014, the debt limit suspension ended and the U.S. Treasury reset the debt limit to $17,212 billion. On the same day, the U.S. Treasury also suspended sales of State and Local Government Series (SLGS), the first of its extraordinary measures. On February 10, Secretary Lew notified Congress that he had declared a debt issuance suspension period (DISP) that authorizes use of other extraordinary measures. In particular, during a DISP the Treasury Secretary is authorized to suspend investments in the Civil Service and Retirement and Disability Fund and the G Fund of the Federal Employees' Retirement System. The DISP was scheduled to last until February 27."], "subsections": []}, {"section_title": "Debt Limit Again Suspended Until March 2015", "paragraphs": ["Following the lapse of the debt limit suspension, Congress moved quickly to address the debt limit issue. On February 10, 2014, the House Rules Committee posted an amended version of S. 540 that would suspend the debt limit through March 15, 2015. The debt limit would be raised the following day by an amount tied to the amount of borrowing required by federal obligations during the suspension period. The U.S. Treasury would also be prohibited from creating a cash reserve above that level. The measure also would have reversed a 1% reduction in the cost-of-living adjustment for certain working-age military retirees that had been included in the Bipartisan Budget Act of 2013 (BBA; P.L. 113-67 ). In addition, sequestration of nonexempt mandatory spending would be extended from FY2023 to FY2024. CBO issued a cost estimate of the measure on February 11, 2014.", "On February 11, 2014, the House voted 221-201 to suspend the debt limit ( S. 540 ) through March 15, 2015. The amended measure included restrictions on Treasury debt management in the version reported by the Rules Committee, but omitted provisions to reverse reductions in cost-of-living adjustments to working-age military retiree pensions and an extension of nondefense mandatory sequestration. The Senate voted to concur in the House amendment the following day on a 55-43 vote. The President signed the measure ( P.L. 113-83 ) on February 15, 2014. Unlike previous measures that suspended the debt limit, a presidential certification was not required. A separate measure was also signed into law on the same day ( P.L. 113-82 ) to reverse reductions in cost-of-living adjustments to working-age military retiree pensions for those who entered the military before the beginning of 2014. "], "subsections": []}]}, {"section_title": "The Debt Limit in 2015", "paragraphs": ["The debt limit, which had been suspended through March 15, 2015, was reestablished the following day at $18,113 billion. The debt limit was raised, in essence, by the sum of payments made during the suspension period to meet federal obligations. "], "subsections": [{"section_title": "Treasury's Extraordinary Measures in 2015", "paragraphs": ["Treasury Secretary Lew sent congressional leaders a letter on March 6, 2015, stating that Treasury would suspend issuance of State and Local Government Series (SLGS) bonds on March 13, 2015, the last business day during the current debt limit suspension. SLGS are used by state and local governments to manage certain intergovernmental funds in a way that complies with federal tax laws. ", "Once the most recent debt limit suspension lapsed, Treasury Secretary Lew declared a Debt Issuance Suspension Period (DISP) on March 16, 2015, which empowered him to use extraordinary measures to meet federal fiscal obligations until July 30, 2015. On July 30, 2015, Treasury Secretary Lew sent congressional leaders a letter to invoke extraordinary powers again until the end of October. Secretary Lew indicated in a separate letter, sent the previous day, that those extraordinary measures would enable the U.S. Treasury to meet federal financial obligations \"for at least a brief additional period of time\" after the end of October. Secretary Lew sent another letter on September 10, 2015, that reiterated those points."], "subsections": []}, {"section_title": "Cash Management Changes", "paragraphs": ["In May 2015, the U.S. Treasury changed its cash management policy to adopt recommendations of the Treasury Borrowing Advisory Committee and an internal review. The new policy is intended to ensure that the U.S. Treasury could continue to meet federal obligations even if its market access were disrupted for a week or so. Treasury Secretary Lew noted that an event of the scale such as \"Hurricane Sandy, September 11, or a potential cyber-attack disruption\" might cause a lapse in market access. The new cash management policy does not affect the date when the debt limit might constrain the U.S. Treasury's ability to meet federal obligations."], "subsections": []}, {"section_title": "U.S. Treasury's Headroom Under the Debt Limit", "paragraphs": ["The U.S. Treasury's headroom under the debt limit consists of remaining amounts of funds available for extraordinary measures and available cash reserves. When federal receipts exceed federal outlays, that headroom expands, except for those receipts or outlays that are linked to intragovernmental accounts such as Social Security. The headroom gained by those receipts is exactly offset because Treasury must issue special securities to the appropriate intragovernmental trust fund, and those securities are subject to the debt limit. Conversely, when outlays are funded by such intragovernmental accounts, the increase in Treasury's headroom due to redemption of special securities is offset by Treasury's need to provide funding for that redemption either by drawing down cash balances or additional borrowing."], "subsections": [{"section_title": "How Long Would Have Extraordinary Measures Lasted in 2015?", "paragraphs": ["On October 15, 2015, Secretary Lew stated that extraordinary measures would have been exhausted \"no later than\" November 3, 2015, although a relatively small cash reserve\u2014projected at less than $30 billion\u2014would be on hand. Secretary Lew had previously stated that extraordinary measures would be exhausted about November 5, 2015.", "Independent forecasts of when extraordinary measures would be exhausted were close to the date estimated by the U.S. Treasury. One private forecast estimated Treasury's headroom under the debt limit at $38 billion on November 5, 2015. CBO, according to an October 14, 2015, report, projected that \"Treasury will begin running a very low cash balance in early November, and the extraordinary measures will be exhausted and the cash balance entirely depleted sometime during the first half of November.\" Figure 2 shows one recent independent estimate of Treasury's headroom that shows Treasury's available resources falling below $50 billion after the first few days of November 2015."], "subsections": []}, {"section_title": "Why Did the Estimated Date of Treasury's Exhaustion of Borrowing Capacity Move Up?", "paragraphs": ["Previous independent estimates of when Treasury's borrowing capacity would be exhausted suggested that leaving the debt limit at its present level would suffice until the end of November or even early December. For example, CBO's August 2015 projections had put the estimated date of exhaustion somewhere between mid-November and early December 2015.", "Lower than expected tax receipts during the fall of 2015 and higher than expected federal trust fund investments pushed the date back from what outside forecasters had expected earlier in the year. For example, net issuance of Government Account Series securities\u2014which includes special Treasury securities held by federal trust funds\u2014was about $10 billion higher on the first day of FY2016 as compared to the first day of FY2015. On October 9, 2015, the U.S. Treasury issued a summary of debt balances that provided a more detailed view of its headroom under the debt limit. According to that summary, Treasury had used $355 billion of its available $369 billion in extraordinary measures as of October 7, 2015, leaving $14 billion to meet forthcoming obligations.", "Secretary Lew noted in previous correspondence with Congress that projections of Treasury's ability to meet federal obligations were subject to significant uncertainty due to the variability of federal tax collections and expenditure patterns. While the U.S. Treasury's payment calendar, tax due dates, and securities auction schedule are generally regular and predictable, the amounts paid or received on a given day can fluctuate substantially."], "subsections": []}]}, {"section_title": "Bipartisan Budget Act of 2015 and the Resolution of the 2015 Debt Limit Episode", "paragraphs": ["Late on the night of October 26, 2015, text of the Bipartisan Budget Agreement of 2015 was issued. The proposal included a provision to suspend the debt limit until March 15, 2017. The debt limit would then come back into effect on the following day at a level reflecting the payment of federal obligations incurred during the suspension period. As with previous debt limit suspensions, the measure prohibits the U.S. Treasury from creating a cash reserve beyond amounts necessary to meet federal obligations during the suspension period. The Bipartisan Budget Act of 2015 would also increase statutory caps on discretionary spending for FY2016 and FY2017, along with measures aimed at offsetting those increases.", "On October 27, 2015, the House Rules Committee provided a summary of its provisions and put forth an amendment aimed at addressing certain scoring issues. The following day, the House concurred with a modified version of the Senate amendments to H.R. 1314 on a 266-167 vote. The Senate concurred with that version on October 30, 2015, on a 64-35 vote, sending the measure to the President, who signed it ( P.L. 114-74 ) on November 2, 2015. Enactment of the measure thus resolved the 2015 debt limit episode by suspending the debt limit until March 15, 2017. "], "subsections": []}, {"section_title": "Other Developments in 2015 and 2016", "paragraphs": ["On September 10, 2015, the House Ways and Means Committee reported H.R. 692 , which would grant the Treasury Secretary the authority to borrow to fund principal and interest payments on debt held by the public. The measure resembles H.R. 807 , which was considered in 2013 and is discussed above. The House passed H.R. 692 on October 21, 2015, by a 235-194 vote.", "The House Ways and Means Committee also reported H.R. 3442 on the same date, which would require the Treasury Secretary to appear before the House Committee on Ways and Means and the Senate Committee on Finance during a debt limit episode and to submit a report on the federal debt. ", "The U.S. Treasury submitted two reports to Congress on extraordinary measures used during the 2015 debt limit episode. The first described actions affecting the G Fund and the second described actions taken affecting the Civil Service Retirement and Disability Fund.", "In May 2015, Treasury officials announced a policy shift to maintain a larger cash balance\u2014not less than approximately $150 billion in normal circumstances\u2014that would suffice to meet federal obligations in the event of a week-long disruption of access to capital markets. During a November 2, 2016, meeting between Treasury officials and a panel of financiers, concerns were raised that the interaction of debt limit constraints in 2017 with changes in the structure of money market funds (MMFs) that have increased demand for Treasury bills could risk disruption of short-term funding markets."], "subsections": []}]}, {"section_title": "Developments in 2017 and 2018", "paragraphs": ["On March 7, 2017, CBO issued estimates that extraordinary measures could suffice to meet federal obligations until sometime in the fall of 2017. Such estimates are subject to substantial uncertainty due to changes in economic conditions, federal revenue flows, changes in the amounts and timing of federal payments, and other factors. On March 8, 2017, Treasury Secretary Mnuchin notified Congress that he would invoke authorities to use extraordinary measures after March 15, 2017, to ensure continued payment of federal obligations. On March 16, 2017, Secretary Mnuchin notified congressional leaders that he had indeed exercised those authorities. The debt limit on that date was reset at $19,809 billion. "], "subsections": [{"section_title": "Administration Officials Urge Congress to Act", "paragraphs": ["In testimony before Congress on May 24, 2017, Administration officials urged Congress to raise the debt limit before its summer recess. Office of Management and Budget (OMB) Director Mick Mulvaney stated that the federal receipts were coming in more slowly than projected, which could imply that Treasury's capacity to meet federal obligations could be exhausted sooner than previously projected. A Goldman Sachs analysis found, however, that some major categories of tax receipts had shown stronger growth. ", "On July 28, 2017, Treasury Secretary Mnuchin sent a letter to Congress stating that extraordinary measures would be used until September 29, 2017. Secretary Mnuchin's letter did not state that Treasury's cash reserves or borrowing capacity would be exhausted on that date, but he did describe the need for legislative action by that date as \"critical.\" Others had estimated that the U.S. Treasury would likely be able to meet federal obligations until sometime in early October 2017. Treasury cash balances and borrowing capacity in mid-September, however, were projected to fall well below levels the U.S. Treasury has considered prudent to maintain operations in the face of significant adverse events."], "subsections": []}, {"section_title": "Debt Limit Again Suspended in September 2017", "paragraphs": ["On September 3, 2017, Secretary Mnuchin argued that a debt limit measure should be tied to legislation responding to Hurricane Harvey, which caused extensive damage in southeast Texas. On September 6, 2017, outlines of an agreement on the debt limit and a continuing resolution were announced between President Trump and congressional leaders. The following day, the Senate, by an 80-17 vote, passed an amended version of H.R. 601 , which included an amendment ( S.Amdt. 808 ) to suspend the debt limit and provide funding for government operations through December 8, 2017, as well as supplemental appropriations for disaster relief. On September 8, 2017, the House agreed on a 316-90 vote to the amended measure, which the President signed the same day (Continuing Appropriations Act, 2018 and Supplemental Appropriations for Disaster Relief Requirements Act, 2017; P.L. 115-56 ). ", "Treasury Secretary Mnuchin invoked authorities to use extraordinary measures once that debt limit suspension lapsed after December 8, 2017. He extended those authorities on January 30, 2018, through the end of February and urged congressional leaders to act on the debt limit before that time. Secretary Mnuchin did not indicate that the U.S. Treasury would exhaust its borrowing capacity or cash reserves by that date. CBO estimates and independent analysts had suggested that those extraordinary measures would have lasted until sometime in early March. In July 2018, Secretary Mnuchin issued a report to Congress detailing its use of extraordinary measures."], "subsections": []}, {"section_title": "Debt Limit Suspension Reset on March 2, 2019", "paragraphs": ["On February 9, 2018, enactment of the Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123 ) resolved the debt limit issue until 2019. BBA 2018 employed a legislative vehicle, H.R. 1892 , which had passed in both the House and Senate in different forms in 2017. On February 9, 2018, differences in the amended measure were resolved by a vote of 71 to 28 in the Senate and a vote of 240 to 186 in the House. BBA 2018 also increased statutory caps on discretionary spending, extended funding of the government until March 23, 2018 (Section 20101), and funded certain disaster assistance programs, among other provisions.", "Section 30301 of BBA 2018 suspended the debt limit through March 1, 2019, as noted above. The limit was reset on March 2, 2019, at $21.988 trillion, a level that accommodates federal obligations during the suspension period. On the following Monday\u2014March 4, 2019\u2014Treasury Secretary Steven Mnuchin invoked extraordinary authorities by declaring a debt issuance suspension period, during which the U.S. Treasury will then use its cash balances, incoming revenues, and extraordinary measures to meet federal obligations. CBO estimated that Treasury would have financial resources to meet federal obligations until just before or just after October 1, 2019. Some private forecasts have estimated Treasury's resources would be exhausted around August 2019."], "subsections": []}]}]}}
{"id": "RL33243", "title": "Small Business Administration: A Primer on Programs and Funding", "released_date": "2019-03-26T00:00:00", "summary": ["The Small Business Administration (SBA) administers several types of programs to support small businesses, including loan guaranty and venture capital programs to enhance small business access to capital; contracting programs to increase small business opportunities in federal contracting; direct loan programs for businesses, homeowners, and renters to assist their recovery from natural disasters; and small business management and technical assistance training programs to assist business formation and expansion.", "Congressional interest in the SBA's loan, venture capital, training, and contracting programs has increased in recent years, primarily because small businesses are viewed as a means to stimulate economic activity and create jobs. Many Members of Congress also regularly receive constituent inquiries about the SBA's programs.", "This report provides an overview of the SBA's programs, including", "entrepreneurial development programs (including Small Business Development Centers, Women's Business Centers, SCORE, and Microloan Technical Assistance); disaster assistance; capital access programs (including the 7(a) loan guaranty program, the 504/Certified Development Company loan guaranty program, the Microloan program, International Trade and Export Promotion programs, and lender oversight); contracting programs (including the 8(a) Minority Small Business and Capital Ownership Development Program, the Historically Underutilized Business Zones [HUBZones] program, the Service-Disabled Veteran-Owned Small Business Program, the Women-Owned Small Business [WOSB] Federal Contract Program, and the Surety Bond Guarantee Program); SBA regional and district offices; the Office of Inspector General; the Office of Advocacy; and capital investment programs (including the Small Business Investment Company program, the New Markets Venture Capital program, the Small Business Innovation Research [SBIR] program, the Small Business Technology Transfer program [STTR], and growth accelerators).", "The report also discusses recent programmatic changes resulting from the enactment of legislation (such as P.L. 111-5, the American Recovery and Reinvestment Act of 2009, P.L. 111-240, the Small Business Jobs Act of 2010, P.L. 114-38, the Veterans Entrepreneurship Act of 2015, P.L. 114-88, the Recovery Improvements for Small Entities After Disaster Act of 2015 [RISE After Disaster Act of 2015], P.L. 115-123, the Bipartisan Budget Act of 2018, and P.L. 115-189, the Small Business 7(a) Lending Oversight Reform Act of 2018).", "In addition, it provides an overview of the SBA's budget and references other CRS reports that examine these programs in greater detail."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Established in 1953, the Small Business Administration's (SBA's) origins can be traced to the Great Depression of the 1930s and World War II, when concerns about unemployment and war production were paramount. The SBA assumed some of the functions of the Reconstruction Finance Corporation (RFC), which had been created by the federal government in 1932 to provide funding for businesses of all sizes during the Depression and later financed war production. During the early 1950s, the RFC was disbanded following charges of political favoritism in the granting of loans and contracts.", "In 1953, Congress passed the Small Business Act (P.L. 83-163), which authorized the SBA. The act specifies that the SBA's mission is to promote the interests of small businesses to enhance competition in the private marketplace:", "It is the declared policy of the Congress that the Government should aid, counsel, assist, and protect, insofar as is possible, the interests of small-business concerns in order to preserve free competitive enterprise, to insure that a fair proportion of the total purchases and contracts or subcontracts for property and services for the Government (including but not limited to contracts or subcontracts for maintenance, repair, and construction) be placed with small-business enterprises, to insure that a fair proportion of the total sales of Government property be made to such enterprises, and to maintain and strengthen the overall economy of the Nation.", "The SBA currently administers several types of programs to support small businesses, including loan guaranty and venture capital programs to enhance small business access to capital; contracting programs to increase small business opportunities in federal contracting; direct loan programs for businesses, homeowners, and renters to assist their recovery from natural disasters; and small business management and technical assistance training programs to assist business formation and expansion. Congressional interest in these programs has increased in recent years, primarily because small businesses are viewed as a means to stimulate economic activity and create jobs. Many Members of Congress also regularly receive constituent inquiries about the SBA's programs.", "This report provides an overview of the SBA's programs and funding. It also references other CRS reports that examine the SBA's programs in greater detail.", "The SBA's FY2020 congressional budget justification document includes funding and program costs for the following programs and offices:", "1. entrepreneurial development programs (including Small Business Development Centers, Women's Business Centers, SCORE, Entrepreneurial Education, Native American Outreach, PRIME, the State Trade Expansion Program, and veterans' programs); 2. disaster assistance; 3. capital access programs (including the 7(a) loan guaranty program, the 504/Certified Development Company [CDC] loan guaranty program, the Microloan program, International Trade and Export Promotion programs, and lender oversight); 4. contracting programs (including the 7(j) Management and Technical Assistance program, the 8(a) Minority Small Business and Capital Ownership Development program, the Historically Underutilized Business Zones [HUBZones] program, the Prime Contract Assistance program, the Women's Business program, the Subcontracting program, and the Surety Bond Guarantee program); 5. regional and district offices (counseling, training, and outreach services); 6. the Office of Inspector General (OIG); 7. capital investment programs (including the Small Business Investment Company [SBIC] program, the New Market Venture Capital program, the Small Business Innovation Research [SBIR] program, the Small Business Technology Transfer program [STTR], and growth accelerators); 8. the Office of Advocacy; and 9. executive direction programs (the National Women's Business Council, Office of Ombudsman, and Faith-Based Initiatives).", " Table 1 shows the SBA's estimated costs in FY2019 for these program areas. Program costs often differ from new budget authority provided in annual appropriations acts because the SBA has specified authority to carry over appropriations from previous fiscal years. The SBA also has limited, specified authority to shift appropriations among various programs."], "subsections": []}, {"section_title": "Disaster Loans", "paragraphs": [], "subsections": [{"section_title": "Overview4", "paragraphs": ["SBA disaster assistance is provided in the form of loans, not grants, which must be repaid to the federal government. The SBA's disaster loans are unique in two respects: they are the only loans made by the SBA that (1) go directly to the ultimate borrower and (2) are not limited to small businesses.", "SBA disaster loans are available to individuals, businesses, and nonprofit organizations in declared disaster areas. About 80% of the SBA's direct disaster loans are issued to individuals and households (renters and property owners) to repair and replace homes and personal property. In recent years, the SBA Disaster Loan Program has been the subject of regular congressional and media attention because of concerns expressed about the time it takes the SBA to process disaster loan applications. The SBA disbursed $401 million in disaster loans in FY2016, $889 million in FY2017, and $3.59 billion in FY2018."], "subsections": []}, {"section_title": "Types of Disaster Loans", "paragraphs": ["The SBA Disaster Loan Program includes the following categories of loans for disaster-related losses: home disaster loans, business physical disaster loans, and economic injury disaster loans."], "subsections": [{"section_title": "Disaster Loans to Homeowners, Renters, and Personal Property Owners", "paragraphs": ["Homeowners, renters, and personal property owners located in a declared disaster area (and in contiguous counties) may apply to the SBA for loans to help recover losses from a declared disaster. Only victims located in a declared disaster area (and contiguous counties) are eligible to apply for disaster loans. Disaster declarations are \"official notices recognizing that specific geographic areas have been damaged by floods and other acts of nature, riots, civil disorders, or industrial accidents such as oil spills.\" Five categories of declarations put the SBA Disaster Loan Program into effect. These include two types of presidential major disaster declarations as authorized by the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the Stafford Act) and three types of SBA declarations.", "The SBA's Home Disaster Loan Program falls into two categories: personal property loans and real property loans. These loans are limited to uninsured losses. The maximum term for SBA disaster loans is 30 years, but the law restricts businesses with credit available elsewhere to a maximum 7-year term. The SBA sets the installment payment amount and corresponding maturity based upon each borrower's ability to repay."], "subsections": []}, {"section_title": "Personal Property Loans", "paragraphs": ["A personal property loan provides a creditworthy homeowner or renter with up to $40,000 to repair or replace personal property items, such as furniture, clothing, or automobiles, damaged or lost in a disaster. These loans cover only uninsured or underinsured property and primary residences and cannot be used to replace extraordinarily expensive or irreplaceable items, such as antiques or recreational vehicles. Interest rates vary depending on whether applicants are able to obtain credit elsewhere. For applicants who can obtain credit without SBA assistance, the interest rate may not exceed 8% per year. For applicants who cannot obtain credit without SBA assistance, the interest rate may not exceed 4% per year."], "subsections": []}, {"section_title": "Real Property Loans", "paragraphs": ["A creditworthy homeowner may apply for a real property loan of up to $200,000 to repair or restore his or her primary residence to its predisaster condition. The loans may not be used to upgrade homes or build additions, unless upgrades or changes are required by city or county building codes. The interest rate for real property loans is determined in the same way as it is determined for personal property loans. "], "subsections": []}, {"section_title": "Disaster Loans to Businesses and Nonprofit Organizations", "paragraphs": ["Several types of loans, discussed below, are available to businesses and nonprofit organizations located in counties covered by a presidential disaster declaration. In certain circumstances, the SBA will also make these loans available when a governor, the Secretary of Agriculture, or the Secretary of Commerce makes a disaster declaration. Physical disaster loans are available to almost any nonprofit organization or business. Other business disaster loans are limited to small businesses."], "subsections": []}, {"section_title": "Physical Disaster Loan", "paragraphs": ["Any business or nonprofit organization, regardless of size, can apply for a physical disaster business loan of up to $2 million for repairs and replacements to real property, machinery, equipment, fixtures, inventory, and leasehold improvements that are not covered by insurance. Physical disaster loans for businesses may use up to 20% of the verified loss amount for mitigation measures in an effort to prevent loss from a similar disaster in the future. Nonprofit organizations that are rejected or approved by the SBA for less than the requested amount for a physical disaster loan are, in some circumstances, eligible for grants from the Federal Emergency Management Agency (FEMA). For applicants that can obtain credit without SBA assistance, the interest rate may not exceed 8% per year. For applicants that cannot obtain credit without SBA assistance, the interest rate may not exceed 4% per year."], "subsections": []}, {"section_title": "Economic Injury Disaster Loans", "paragraphs": ["Economic injury disaster loans (EIDLs) are limited to small businesses as defined by the SBA's size regulations, which vary from industry to industry. If the Secretary of Agriculture designates an agriculture production disaster, small farms and small cooperatives are eligible. EIDLs are available in the counties included in a presidential disaster declaration and contiguous counties. The loans are designed to provide small businesses with operating funds until those businesses recover. The maximum loan is $2 million, and the terms are the same as personal and physical disaster business loans. The loan can have a maturity of up to 30 years and has an interest rate of 4% or less."], "subsections": []}]}]}, {"section_title": "Entrepreneurial Development Programs17", "paragraphs": ["The SBA's entrepreneurial development (ED) noncredit programs provide a variety of management and training services to small businesses. Initially, the SBA provided its own management and technical assistance training programs. Over time, the SBA has come to rely increasingly on third parties to provide that training. ", "The SBA receives appropriations for seven ED programs and two ED initiatives:", "Small Business Development Centers (SBDCs); the Microloan Technical Assistance Program; Women Business Centers (WBCs); SCORE; the Program for Investment in Microentrepreneurs (PRIME); Veterans Programs (including Veterans Business Outreach Centers, Boots to Business, Veteran Women Igniting the Spirit of Entrepreneurship [VWISE], Entrepreneurship Bootcamp for Veterans with Disabilities, and Boots to Business: Reboot); the Native American Outreach Program (NAO); the Entrepreneurial Development Initiative (Regional Innovation Clusters); and the Entrepreneurship Education Initiative.", "FY2019 appropriations for these programs are $131 million for SBDCs, $31 million for the Microloan Technical Assistance Program, $18.5 million for WBCs, $11.7 million for SCORE, $5 million for PRIME, $12.7 million for Veterans Programs, $2 million for NAO, $5 million for the Entrepreneurial Development Initiative (Regional Innovation Clusters), and $3.5 million for the Entrepreneurship Education Initiative.", "Four additional programs are provided recommended funding in appropriations acts under ED programs, but are discussed in other sections of this report because of the nature of their assistance: (1) the SBA's Growth Accelerators Initiative ($2 million in FY2019) is a capital investment program and is discussed in the capital access programs section; (2) the SBA's 7(j) Technical Assistance Program ($2.8 million in FY2019) provides contacting assistance and is discussed in the contracting programs section; (3) the National Women's Business Council ($1.5 million in FY2019) is a bipartisan federal advisory council and is discussed in the executive direction programs section; and (4) the State Trade Expansion Program (STEP, $18 million in FY2019) provides grants to states to support export programs that assist small business concerns. STEP is discussed in the capital access programs' international trade and export promotion programs subsection.", "The SBA reports that over 1 million aspiring entrepreneurs and small business owners receive training from an SBA-supported resource partner each year. Some of this training is free, and some is offered at low cost.", "SBDCs provide free or low-cost assistance to small businesses using programs customized to local conditions. SBDCs support small business in marketing and business strategy, finance, technology transfer, government contracting, management, manufacturing, engineering, sales, accounting, exporting, and other topics. SBDCs are funded by grants from the SBA and matching funds. There are 63 lead SBDC service centers, one located in each state (four in Texas and six in California), the District of Columbia, Puerto Rico, the Virgin Islands, Guam, and American Samoa. These lead SBDC service centers manage more than 900 SBDC outreach locations.", "The SBA's Microloan Technical Assistance program is part of the SBA's Microloan program but receives a separate appropriation. It provides grants to Microloan intermediaries to offer management and technical training assistance to Microloan program borrowers and prospective borrowers. There are currently 147 active Microloan intermediaries serving 49 states, the District of Columbia, and Puerto Rico. ", "WBCs are similar to SBDCs, except they concentrate on assisting women entrepreneurs. There are currently 121 WBCs, with at least one WBC in most states and territories.", "SCORE was established on October 5, 1964, by then-SBA Administrator Eugene P. Foley as a national, volunteer organization, uniting more than 50 independent nonprofit organizations into a single, national nonprofit organization. SCORE's 320 chapters and more than 800 branch offices are located throughout the United States and partner with more than 11,000 volunteer counselors, who are working or retired business owners, executives, and corporate leaders, to provide management and training assistance to small businesses.", "PRIME provides SBA grants to nonprofit microenterprise development organizations or programs that have \"a demonstrated record of delivering microenterprise services to disadvantaged entrepreneurs; an intermediary; a microenterprise development organization or program that is accountable to a local community, working in conjunction with a state or local government or Indian tribe; or an Indian tribe acting on its own, if the Indian tribe can certify that no private organization or program referred to in this paragraph exists within its jurisdiction.\"", "The SBA's Office of Veterans Business Development (OVBD) administers several management and training programs to assist veteran-owned businesses, including 22 Veterans Business Outreach Centers which provide \"entrepreneurial development services such as business training, counseling and resource partner referrals to transitioning service members,\u00a0veterans,\u00a0National Guard & Reserve members and military spouses interested in starting or growing a small business.\"", "The SBA's Office of Native American Affairs provides management and technical educational assistance to Native Americans (American Indians, Alaska natives, native Hawaiians, and the indigenous people of Guam and American Samoa) to start and expand small businesses.", "The SBA reports that \"regional innovation clusters are on-the-ground collaborations between business, research, education, financing and government institutions that work to develop and grow the supply chain of a particular industry or related set of industries in a geographic region.\" The SBA has supported the Entrepreneurial Development Initiative (Regional Innovation Clusters) since FY2009, and the initiative has received recommended appropriations from Congress since FY2010.", "The SBA's Entrepreneurship Education initiative provides assistance to high-growth small businesses in underserved communities through the Emerging Leaders initiative and the SBA Learning Center. The Emerging Leaders initiative is a seven\u2010month executive leader education series consisting of \"more than 100 hours of specialized training, technical support, access to a professional network, and other resources to strengthen their businesses and promote economic development.\" At the conclusion of the training, \"participants produce a three\u2010year strategic growth action plan with benchmarks and performance targets that help them access the necessary support and resources to move forward for the next stage of business growth.\" The Learning Center is the SBA's primary online training service, which offers free online courses on business planning, marketing, government contracting, accounting, and social media, providing learners an \"opportunity to access entrepreneurship education resources through toolkits, fact sheets, infographic tip sheets, instructor guides, and audio content.\""], "subsections": []}, {"section_title": "Capital Access Programs", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The SBA has authority to make direct loans but, with the exception of disaster loans and loans to Microloan program intermediaries, has not exercised that authority since 1998. The SBA indicated that it stopped issuing direct business loans primarily because the subsidy rate was \"10 to 15 times higher\" than the subsidy rate for its loan guaranty programs. Instead of making direct loans, the SBA guarantees loans issued by approved lenders to encourage those lenders to provide loans to small businesses \"that might not otherwise obtain financing on reasonable terms and conditions.\" With few exceptions, to qualify for SBA assistance, an organization must be both a business and small."], "subsections": [{"section_title": "What Is a Business?", "paragraphs": ["To participate in any of the SBA programs, a business must meet the Small Business Act's definition of small business . This is a business that", "is organized for profit; has a place of business in the United States; operates primarily within the United States or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials, or labor; is independently owned and operated; is not dominant in its field on a national basis; and does not exceed size standards established, and updated periodically, by the SBA. ", "The business may be a sole proprietorship, partnership, corporation, or any other legal form."], "subsections": []}, {"section_title": "What Is Small?32", "paragraphs": ["The SBA uses two measures to determine if a business is small: SBA-derived industry specific size standards or a combination of the business's net worth and net income. For example, businesses participating in the SBA's 7(a) loan guaranty program are deemed small if they either meet the SBA's industry-specific size standards for firms in 1,047 industrial classifications in 18 subindustry activities described in the North American Industry Classification System (NAICS) or do not have more than $15 million in tangible net worth and not more than $5 million in average net income after federal taxes (excluding any carryover losses) for the two full fiscal years before the date of the application. All of the company's subsidiaries, parent companies, and affiliates are considered in determining if it meets the size standard.", "The SBA's industry size standards vary by industry, and they are based on one of the following four measures: the firm's (1) average annual receipts in the previous three years, (2) number of employees, (3) asset size, or (4) for refineries, a combination of number of employees and barrel per day refining capacity. Historically, the SBA has used the number of employees to determine if manufacturing and mining companies are small and average annual receipts for most other industries.", "The SBA's size standards are designed to encourage competition within each industry; they are derived through an assessment of the following four economic factors: \"average firm size, average assets size as a proxy of start-up costs and entry barriers, the 4-firm concentration ratio as a measure of industry competition, and size distribution of firms.\" The SBA also considers the ability of small businesses to compete for federal contracting opportunities and, when necessary, several secondary factors \"as they are relevant to the industries and the interests of small businesses, including technological change, competition among industries, industry growth trends, and impacts of size standard revisions on small businesses.\" "], "subsections": []}]}, {"section_title": "Loan Guarantees", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The SBA provides loan guarantees for small businesses that cannot obtain credit elsewhere. Its largest loan guaranty programs are the 7(a) loan guaranty program, the 504/CDC loan guaranty program, international trade and export promotion programs, and the Microloan program.", "The SBA's loan guaranty programs require personal guarantees from borrowers and share the risk of default with lenders by making the guaranty less than 100%. In the event of a default, the borrower owes the amount contracted less the value of any collateral liquidated. The SBA can attempt to recover the unpaid debt through administrative offset, salary offset, or IRS tax refund offset. Most types of businesses are eligible for loan guarantees, but a few are not. A list of ineligible businesses (such as insurance companies, real estate investment firms, firms involved in financial speculation or pyramid sales, and businesses involved in illegal activities) is contained in 13 C.F.R. Section 120.110. With one exception, nonprofit and charitable organizations are also ineligible.", "As shown in the following tables, most of these programs charge fees to help offset program costs, including costs related to loan defaults. In most instances, the fees are set in statute. For example, for 7(a) loans with a maturity exceeding 12 months, the SBA is authorized to charge lenders an up-front guaranty fee of up to 2% for the SBA guaranteed portion of loans of $150,000 or less, up to 3% for the SBA guaranteed portion of loans exceeding $150,000 but not more than $700,000, and up to 3.5% for the SBA guaranteed portion of loans exceeding $700,000. Lenders with a 7(a) loan that has a SBA guaranteed portion in excess of $1 million can be charged an additional fee not to exceed 0.25% of the guaranteed amount in excess of $1 million. ", "7(a) loans are also subject to an ongoing servicing fee not to exceed 0.55% of the outstanding balance of the guaranteed portion of the loan. In addition, lenders are authorized to collect fees from borrowers to offset their administrative expenses.", "In an effort to assist small business owners, in FY2019, the SBA is waiving", "the annual service fee for 7(a) loans of $150,000 or less made to small businesses located in a rural area or a HUBZone and reducing the up-front one-time guaranty fee for these loans from 2.0% to 0.6667% of the guaranteed portion of the loan in FY2019; and pursuant to P.L. 114-38 , the Veterans Entrepreneurship Act of 2015, the up-front, one-time guaranty fee on all veteran loans under the 7(a) SBAExpress program (up to and including $350,000).", "The SBA's goal is to achieve a zero subsidy rate, meaning that the appropriation of budget authority for new loan guaranties is not required. ", "As shown in Table 2 , the SBA's fees and proceeds from loan liquidations do not always generate sufficient revenue to cover loan losses, resulting in the need for additional appropriations to account for the shortfall. However, \"due to the continued improvement in performance in the loan portfolio,\" the SBA did not request funding for credit subsidies for the 7(a) and 504/CDC loan guaranty programs in FY2016-FY2019. "], "subsections": []}, {"section_title": "7(a) Loan Guaranty Program42", "paragraphs": ["The 7(a) loan guaranty program is named after the section of the Small Business Act that authorizes it. These are loans made by SBA lending partners (mostly banks but also some other financial institutions) and partially guaranteed by the SBA.", "In FY2018, the SBA approved 60,353 7(a) loans totaling nearly $25.4 billion. In FY2018, there were 1,810 active lending partners providing 7(a) loans.", "The 7(a) program's current guaranty rate is 85% for loans of $150,000 or less and 75% for loans greater than $150,000 (up to a maximum guaranty of $3.75 million\u201475% of $5 million). Although the SBA's offer to guarantee a loan provides an incentive for lenders to make the loan, lenders are not required to do so.", "Lenders are permitted to charge borrowers fees to recoup specified expenses and are allowed to charge borrowers \"a reasonable fixed interest rate\" or, with the SBA's approval, a variable interest rate. The SBA uses a multistep formula to determine the maximum allowable fixed interest rate for all 7(a) loans (with the exception of the Export Working Capital Program and Community Advantage loans) and periodically publishes that rate and the maximum allowable variable interest rate in the Federal Register .", "Maximum interest rates allowed on variable-rate 7(a) loans are pegged to either the prime rate, the 30-day London Interbank Offered Rate (LIBOR) plus 3%, or the SBA optional peg rate, which is a weighted average of rates that the federal government pays for loans with maturities similar to the guaranteed loan. The allowed spread over the prime rate, LIBOR base rate, or SBA optional peg rate depends on the loan amount and the loan's maturity (under seven years or seven years or more). The adjustment period can be no more than monthly and cannot change over the life of the loan.", " Table 3 provides information on the 7(a) program's key features, including its eligible uses, maximum loan amount, loan maturity, fixed interest rates, and guarantee fees."], "subsections": [{"section_title": "Variations on the 7(a) Program", "paragraphs": ["The 7(a) program has several specialized programs that offer streamlined and expedited loan procedures for particular groups of borrowers, including the SBAExpress program (for loans of $350,000 or less), the Export Express program (for loans of up to $500,000 for entering or expanding an existing export market), and the Community Advantage pilot program (for loans of $250,000 or less). The SBA also has a Small Loan Advantage program (for loans of $350,000 or less), but it is currently being used as the 7(a) program's model for processing loans of $350,000 or less and exists as a separate, specialized program in name only.", "The SBAExpress program was established as a pilot program by the SBA on February 27, 1995, and made permanent through legislation, subject to reauthorization, in 2004 ( P.L. 108-447 , the Consolidated Appropriations Act, 2005). The program is designed to increase the availability of credit to small businesses by permitting lenders to use their existing documentation and procedures in return for receiving a reduced SBA guarantee on loans. It provides a 50% loan guarantee on loan amounts of $350,000 or less. The loan proceeds can be used for the same purposes as the 7(a) program, except participant debt restructuring cannot exceed 50% of the project and may be used for revolving credit. The program's fees and loan terms are the same as the 7(a) program, except the term for a revolving line of credit cannot exceed seven years. ", "The Community Advantage pilot program began operations on February 15, 2011, and is limited to mission-focused lenders targeting underserved markets. Originally scheduled to cease operations on March 15, 2014, the program has been extended several times and is currently scheduled to operate through September 30, 2022. As of September 12, 2018, there were 113 approved CA lenders, 99 of which were actively making and servicing CA loans. The SBA placed a moratorium, effective October 1, 2018, on accepting new CA lender applications, primarily as a means to mitigate the risk of future loan defaults.", "Lenders must receive SBA approval to participate in these 7(a) specialized programs."], "subsections": []}, {"section_title": "Special Purpose Loan Guaranty Programs", "paragraphs": ["In addition to the 7(a) loan guaranty program, the SBA has special purpose loan guaranty programs for small businesses adjusting to the North American Free Trade Agreement (NAFTA), to support Employee Stock Ownership Program trusts, pollution control facilities, and working capital.", "Community Adjustment and Investment Program. The Community Adjustment and Investment Program (CAIP) uses federal funds to pay the fees on 7(a) and 504/CDC loans to businesses located in communities that have been adversely affected by NAFTA.", "Employee Trusts. The SBA will guarantee loans to Employee Stock Ownership Plans (ESOPs) that are used either to lend money to the employer or to purchase control from the owner. ESOPs must meet regulations established by the IRS, Department of the Treasury, and Department of Labor. These are 7(a) loans.", "Pollution Control. In 1976, the SBA was provided authorization to guarantee the payment of rentals or other amounts due under qualified contracts for pollution control facilities. P.L. 100-590 , the Small Business Reauthorization and Amendment Act of 1988, eliminated the revolving fund for pollution control guaranteed loans and transferred its remaining funds to the SBA's business loan and investment revolving fund. Since 1989, loans for pollution control have been guaranteed under the 7(a) loan guaranty program.", "CAPLines. CAPLines are five special 7(a) loan guaranty programs designed to meet the requirements of small businesses for short-term or cyclical working capital. The maximum term is five years."], "subsections": []}]}, {"section_title": "The 504/CDC Loan Guaranty Program52", "paragraphs": ["The 504/CDC loan guaranty program uses Certified Development Companies (CDCs), which are private, nonprofit corporations established to contribute to economic development within their communities. Each CDC has its own geographic territory. The program provides long-term, fixed-rate loans for major fixed assets such as land, structures, machinery, and equipment. Program loans cannot be used for working capital, inventory, or repaying debt. A commercial lender provides up to 50% of the financing package, which is secured by a senior lien. The CDC's loan of up to 40% is secured by a junior lien. The SBA backs the CDC with a guaranteed debenture. The small business must contribute at least 10% as equity.", "To participate in the program, small businesses cannot exceed $15 million in tangible net worth and cannot have average net income of more than $5 million for two full fiscal years before the date of application. Also, CDCs must intend to create or retain one job for every $75,000 of the debenture ($120,000 for small manufacturers) or meet an alternative job creation standard if they meet any one of 15 community or public policy goals.", "In FY2018, the SBA approved 5,874 504/CDC loans totaling nearly $4.8 billion. ", " Table 4 summarizes the 504/CDC loan guaranty program's key features."], "subsections": []}, {"section_title": "International Trade and Export Promotion Programs55", "paragraphs": ["Although any of SBA's loan guaranty programs can be used by firms looking to begin exporting or expanding their current exporting operations, the SBA has three loan programs that specifically focus on trade and export promotion:", "1. Export Express loan program provides working capital or fixed asset financing for firms that will begin or expand exporting. It offers a 90% guaranty on loans of $350,000 or less and a 75% guaranty on loans of $350,001 to $500,000. 2. Export Working Capital loan program provides financing to support export orders or the export transaction cycle, from purchase order to final payment. It offers a 90% guaranty of loans up to $5 million. 3. International Trade loan program provides long-term financing to support firms that are expanding because of growing export sales or have been adversely affected by imports and need to modernize to meet foreign competition. It offers a 90% guaranty on loans up to $5 million.", "In many ways, the SBA's trade and export promotion loan programs share similar characteristics with other SBA loan guaranty programs. For example, the Export Express program resembles the SBAExpress program. The SBAExpress program shares several characteristics with the standard 7(a) loan guarantee program except that the SBAExpress program has an expedited approval process, a lower maximum loan amount, and a smaller percentage of the loan guaranteed. Similarly, the Export Express program shares several of the characteristics of the standard International Trade loan program, such as an expedited approval process in exchange for a lower maximum loan amount ($500,000 compared with $5 million) and a lower percentage of guaranty.", "In addition, the SBA administers grants through the State Trade Expansion Program (STEP), which are awarded to states to execute export programs that assist small business concerns (such as a trade show exhibition, training workshops, or a foreign trade mission). Initially, the STEP program was authorized for three years and appropriated $30 million annually in FY2011 and FY2012. Congress approved $8 million in appropriations for STEP in FY2014, $17.4 million in FY2015, and $18 million annually since FY2016. "], "subsections": []}, {"section_title": "The Microloan Program58", "paragraphs": ["The Microloan program provides direct loans to qualified nonprofit intermediary Microloan lenders that, in turn, provide \"microloans\" of up to $50,000 to small businesses and nonprofit child care centers. Microloan lenders also provide marketing, management, and technical assistance to Microloan borrowers and potential borrowers. The program was authorized in 1991 as a five-year demonstration project and became operational in 1992. It was made permanent, subject to reauthorization, by P.L. 105-135 , the Small Business Reauthorization Act of 1997. Although the program is open to all small businesses, it targets new and early stage businesses in underserved markets, including borrowers with little to no credit history, low-income borrowers, and women and minority entrepreneurs in both rural and urban areas who generally do not qualify for conventional loans or other, larger SBA guaranteed loans. ", "In FY2018, 5,459 small businesses received a Microloan, totaling $76.8 million. The average Microloan was $14,071 and the average interest rate was 7.6%.", " Table 5 summarizes the Microloan program's key features."], "subsections": []}]}]}, {"section_title": "Contracting Programs61", "paragraphs": ["Several SBA programs assist small businesses in obtaining and performing federal contracts and subcontracts. These include various prime contracting programs; subcontracting programs; and other assistance (e.g., contracting technical training assistance, the federal goaling program, federal Offices of Small and Disadvantaged Business Utilization, and the Surety Bond Guarantee program)."], "subsections": [{"section_title": "Prime Contracting Programs", "paragraphs": ["Several contracting programs allow small businesses to compete only with similar firms for government contracts or receive sole-source awards in circumstances in which such awards could not be made to other firms. These programs, which give small businesses a chance to win government contracts without having to compete against larger and more experienced companies, include the following: ", "8(a) Program. The 8(a) Minority Small Business and Capital Ownership Development Program (named for the section of the Small Business Act from which it derives its authority) is for businesses owned by persons who are socially and economically disadvantaged. In addition, an individual's net worth, excluding ownership interest in the 8(a) firm and equity in his or her primary personal residence, must be less than $250,000 at the time of application to the 8(a) Program, and less than $750,000 thereafter. A firm certified by the SBA as an 8(a) firm is eligible for set-aside and sole-source contracts. The SBA also provides technical assistance and training to 8(a) firms. Firms may participate in the 8(a) Program for no more than nine years. In FY2017, the federal government awarded $27.2 billion to 8(a) firms. About $16.4 billion of that amount was awarded with an 8(a) preference ($8 billion through an 8(a) set-aside and $8.4 billion through an 8(a) sole-source award). About $4.8 billion was awarded to an 8(a) firm in open competition with other firms. The remaining $6 billion was awarded with another small business preference (e.g., set aside and sole source awards for small business generally and for HUBZone firms, women-owned small businesses, and service-disabled veteran-owned small businesses). Historically Underutilized Business Zone Program. This program assists small businesses located in Historically Underutilized Business Zones (HUBZones) through set-asides, sole-s ource awards, and price evaluation preferences in full and open competitions. The determination of whether an area is a HUBZone is based upon criteria specified in 13 C.F.R. Section 126.103. To be certified as a HUBZone small business, at least 35% of the small business's employees must generally reside in a HUBZone. In FY2017, the federal government awarded $7.53 billion to HUBZone-certified small businesses. About $1.90 billion of that amount was awarded with a HUBZone preference ($1.49 billion through a HUBZone set-aside, $65.3 million through a HUBZone sole-source award, and $346.9 million through a HUBZone price-evaluation preference). About $1.53 billion was awarded to HUBZone-certified small businesses in open competition with other firms. The remaining $4.10 billion was awarded with another small business preference (e.g., set aside and sole source awards for small business generally and for 8(a), women-owned, and service-disabled veteran-owned small businesses). Service-Disabled Veteran-Owned Small Business Program. This program assists service-disabled veteran-owned small businesses through set-asides and sole-source awards. For purposes of this program, veterans and service-related disabilities are defined as they are under the statutes governing veterans affairs. In FY2017, the federal government awarded $18.2 billion to service-disabled veteran-owned small businesses. About $6.8 billion of that amount was awarded through a service-disabled veteran-owned small business set aside award. About $4.3 billion of that amount was awarded to a service-disabled veteran-owned small business in open competition with other firms. The remaining $7.1 billion was awarded with another small business preference (e.g., set aside and sole source awards for small business generally and for HUBZone firms, 8(a) firms, and women-owned small businesses). Women-Owned Small Business Program. Under this program, contracts may be set aside for economically disadvantaged women-owned small businesses in industries in which women are underrepresented and women-owned small businesses in industries in which women are substantially underrepresented. Also, federal agencies may award sole-source contracts to women-owned small businesses so long as the award can be made at a fair and reasonable price, and the anticipated value of the contract is below $4 million ($6.5 million for manufacturing contracts). In FY2017, the federal government awarded $21.3 billion to women owned small businesses. About $648.9 million of that amount was awarded with a women owned small business preference ($580.5 million through a women owned small business set-aside and $68.4 million through a women owned small business sole-source award). About $7.0 billion of that amount was awarded to a women owned small business in open competition with other firms. The remaining $13.7 billion was awarded with another small business preference (e.g., set aside and sole source awards for small business generally and for HUBZone firms, 8(a) firms, and service-disabled veteran-owned small businesses). Other small businesses. Agencies may also set aside contracts or make sole-source awards to small businesses not participating in any other program under certain conditions."], "subsections": []}, {"section_title": "Subcontracting Programs for Small Disadvantaged Businesses", "paragraphs": ["Other federal programs promote subcontracting with small disadvantaged businesses (SDBs). SDBs include 8(a) participants and other small businesses that are at least 51% unconditionally owned and controlled by socially or economically disadvantaged individuals or groups. Individuals owning and controlling non-8(a) SDBs may have net worth of up to $750,000 (excluding ownership interests in the SDB firm and equity in their primary personal residence). Otherwise, however, SDBs must generally satisfy the same eligibility requirements as 8(a) firms, although they do not apply to the SBA to be designated SDBs in the same way that 8(a) firms do. ", "Federal agencies must negotiate \"subcontracting plans\" with the apparently successful bidder or offeror on eligible prime contracts prior to awarding the contract. Subcontracting plans set goals for the percentage of subcontract dollars to be awarded to SDBs, among others, and describe efforts that will be made to ensure that SDBs \"have an equitable opportunity to compete for subcontracts.\" Federal agencies may also consider the extent of subcontracting with SDBs in determining to whom to award a contract or give contractors \"monetary incentives\" to subcontract with SDBs. ", "As of March 25, 2019, the SBA's Dynamic Small Business Search database included 2,338 SBA-certified SDBs and 122,281 self-certified SDBs."], "subsections": []}, {"section_title": "The 7(j) Management and Technical Assistance Program", "paragraphs": ["The SBA's 7(j) Management and Technical Assistance program provides \"a wide variety of management and technical assistance to eligible individuals or concerns to meet their specific needs, including: (a) counseling and training in the areas of financing, management, accounting, bookkeeping, marketing, and operation of small business concerns; and (b) the identification and development of new business opportunities.\" Eligible individuals and businesses include \"8(a) certified firms, small disadvantaged businesses, businesses operating in areas of high unemployment, or low income or firms owned by low income individuals.\" ", "In FY2018, the 7(j) Management and Technical Assistance program assisted 6,483 small businesses."], "subsections": []}, {"section_title": "Surety Bond Guarantee Program75", "paragraphs": ["The SBA's Surety Bond Guarantee program is designed to increase small businesses' access to federal, state, and local government contracting, as well as private-sector contracts, by guaranteeing bid, performance, and payment bonds for small businesses that cannot obtain surety bonds through regular commercial channels. The program guarantees individual contracts of up to $6.5 million and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary. The SBA's guarantee ranges from not to exceed 80% to not to exceed 90% of the surety's loss if a default occurs. In FY2018, the SBA guaranteed 10,800 bid and final surety bonds with a total contract value of nearly $6.5 billion.", "A surety bond is a three-party instrument between a surety (someone who agrees to be responsible for the debt or obligation of another), a contractor, and a project owner. The agreement binds the contractor to comply with the terms and conditions of a contract. If the contractor is unable to successfully perform the contract, the surety assumes the contractor's responsibilities and ensures that the project is completed. The surety bond reduces the risk associated with contracting.", "Surety bonds are viewed as a means to encourage project owners to contract with small businesses that may not have the credit history or prior experience of larger businesses and are considered to be at greater risk of failing to comply with the contract's terms and conditions."], "subsections": []}, {"section_title": "Goaling Program", "paragraphs": ["Since 1978, federal agency heads have been required to establish federal procurement contracting goals, in consultation with the SBA, \"that realistically reflect the potential of small business concerns\" to participate in federal procurement. Each agency is required, at the conclusion of each fiscal year, to report its progress in meeting these goals to the SBA.", "In 1988, Congress authorized the President to annually establish government-wide minimum participation goals for procurement contracts awarded to small businesses and small businesses owned and controlled by socially and economically disadvantaged individuals. Congress required the government-wide minimum participation goal for small businesses to be \"not less than 20% of the total value of all prime contract awards for each fiscal year\" and \"not less than 5% of the total value of all prime contract and subcontract awards for each fiscal year\" for small businesses owned and controlled by socially and economically disadvantaged individuals.", "Each federal agency was also directed to \"have an annual goal that presents, for that agency, the maximum practicable opportunity for small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals to participate in the performance of contracts let by such agency.\" The SBA was required to report to the President annually on the attainment of these goals and to include this information in an annual report to Congress. The SBA negotiates the goals with each federal agency and establishes a \"small business eligible\" baseline for evaluating the agency's performance.", "The small business eligible baseline excludes certain contracts that the SBA has determined do not realistically reflect the potential for small business participation in federal procurement (such as those awarded to mandatory and directed sources), contracts funded predominately from agency-generated sources (i.e., nonappropriated funds), contracts not covered by Federal Acquisition Regulations, acquisitions on behalf of foreign governments, and contracts not reported in the Federal Procurement Data System (such as contracts valued below $10,000 and government procurement card purchases). These exclusions typically account for 18% to 20% of all federal prime contracts each year.", "The SBA then evaluates the agencies' performance against their negotiated goals annually, using data from the Federal Procurement Data System\u2014Next Generation, managed by the U.S. General Services Administration, to generate the small business eligible baseline. This information is compiled into the official Small Business Goaling Report, which the SBA releases annually.", "Over the years, federal government-wide procurement contracting goals have been established for small businesses generally ( P.L. 100-656 , the Business Opportunity Development Reform Act of 1988, and P.L. 105-135 , the HUBZone Act of 1997\u2014Title VI of the Small Business Reauthorization Act of 1997), small businesses owned and controlled by socially and economically disadvantaged individuals ( P.L. 100-656 , the Business Opportunity Development Reform Act of 1988), women ( P.L. 103-355 , the Federal Acquisition Streamlining Act of 1994), small businesses located within a HUBZone ( P.L. 105-135 , the HUBZone Act of 1997\u2014Title VI of the Small Business Reauthorization Act of 1997), and small businesses owned and controlled by a service disabled veteran ( P.L. 106-50 , the Veterans Entrepreneurship and Small Business Development Act of 1999). ", "The current federal small business contracting goals are", "at least 23% of the total value of all small business eligible prime contract awards to small businesses for each fiscal year, 5% of the total value of all small business eligible prime contract awards and subcontract awards to small disadvantaged businesses for each fiscal year, 5% of the total value of all small business eligible prime contract awards and subcontract awards to women-owned small businesses, 3% of the total value of all small business eligible prime contract awards and subcontract awards to HUBZone small businesses, and 3% of the total value of all small business eligible prime contract awards and subcontract awards to service-disabled veteran-owned small businesses.", "Although there are no punitive consequences for not meeting the small business procurement goals, the SBA's Small Business Goaling Report is distributed widely, receives media attention, and serves to heighten public awareness of the issue of small business contracting. For example, agency performance as reported in the SBA's Small Business Goaling Report is often cited by Members during their questioning of federal agency witnesses during congressional hearings.", "As shown in Table 6 , the FY201 7 Small Business Goaling Report , using data in the Federal Procurement Data System, indicates that federal agencies met the federal contracting goal for small businesses generally, small disadvantaged businesses, and service-disabled veteran-owned small businesses in FY2017. ", "Federal agencies awarded 23.88% of the value of their small business eligible contracts ($442.5 billion) to small businesses ($105.7 billion), 9.10% to small disadvantaged businesses ($40.2 billion), 4.71% to women-owned small businesses ($20.8 billion), 1.65% to HUBZone small businesses ($7.3 billion), and 4.05% to service-disabled veteran-owned small businesses ($17.9 billion). ", "The percentage of total reported federal contracts (without exclusions) awarded to those small businesses in FY2017 is also provided in the table for comparative purposes. "], "subsections": []}, {"section_title": "Office of Small and Disadvantaged Business Utilization", "paragraphs": ["Government agencies with procurement authority have an Office of Small and Disadvantaged Business Utilization (OSDBU) to advocate within the agency for small businesses, as well as assist small businesses in their dealings with federal agencies (e.g., obtaining payment)."], "subsections": []}]}, {"section_title": "Regional and District Offices", "paragraphs": ["As mentioned previously, the SBA provides funding to third parties, such as SBDCs, to provide management and training services to small business owners and aspiring entrepreneurs. The SBA also provides management, training, and outreach services to small business owners and aspiring entrepreneurs through its 68 district offices. These offices are overseen by the SBA Office of Field Operations and 10 regional offices.", "SBA district offices conduct more than 20,000 outreach events annually with stakeholders and resource partners that include \"lender training, government contracting, marketing events in emerging areas, and events targeted to high-growth entrepreneurial markets, such as exporting.\" SBA district offices focus \"on core SBA programs concerning contracting, capital, technical assistance, and exporting.\" They also perform annual program eligibility and compliance reviews on 100% of the 8(a) business development firms in the SBA's portfolio and each year conduct on-site examinations of about 10% of all HUBZone certified firms (529 in FY2018) to validate compliance with the HUBZone program's geographic requirement for principal offices."], "subsections": []}, {"section_title": "Office of Inspector General91", "paragraphs": ["The Office of Inspector General's (OIG's) mission is \"to improve SBA management and effectiveness, and to detect and deter fraud in the Agency's programs.\" It serves as \"an independent and objective oversight office created within the SBA by the Inspector General Act of 1978 [P.L. 95-452], as amended.\" The Inspector General, who is nominated by the President and confirmed by the Senate, directs the office. The Inspector General Act provides the OIG with the following responsibilities:", "\"promote economy, efficiency, and effectiveness in the management of SBA programs and supporting operations; conduct and supervise audits, investigations, and reviews relating to the SBA's programs and support operations; detect and prevent fraud, waste and abuse; review existing and proposed legislation and regulations and make appropriate recommendations; maintain effective working relationships with other Federal, State and local governmental agencies, and nongovernmental entities, regarding the mandated duties of the Inspector General; keep the SBA Administrator and Congress informed of serious problems and recommend corrective actions and implementation measures; comply with the audit standards of the Comptroller General; avoid duplication of Government Accountability Office (GAO) activities; and report violations of Federal criminal law to the Attorney General.\""], "subsections": []}, {"section_title": "Capital Investment Programs", "paragraphs": ["The SBA has several programs to improve small business access to capital markets, including the Small Business Investment Company program, the New Market Venture Capital Program (now inactive), two special high technology contracting programs (the Small Business Innovative Research and Small Business Technology Transfer programs), and the growth accelerators initiative."], "subsections": [{"section_title": "The Small Business Investment Company Program95", "paragraphs": ["The Small Business Investment Company (SBIC) program enhances small business access to venture capital by stimulating and supplementing \"the flow of private equity capital and long-term loan funds which small-business concerns need for the sound financing of their business operations and for their growth, expansion, and modernization, and which are not available in adequate supply.\" ", "The SBA works with 305 privately owned and managed SBICs licensed by the SBA to provide financing to small businesses with private capital the SBIC has raised and with funds the SBIC borrows at favorable rates because the SBA guarantees the debenture (loan obligation). ", "SBICs provide equity capital to small businesses in various ways, including by", "purchasing small business equity securities (e.g., stock, stock options, warrants, limited partnership interests, membership interests in a limited liability company, or joint venture interests); making loans to small businesses, either independently or in cooperation with other private or public lenders, that have a maturity of no more than 20 years; purchasing debt securities from small businesses, which may be convertible into, or have rights to purchase, equity in the small business; and subject to limitations, providing small businesses a guarantee of their monetary obligations to creditors not associated with the SBIC.", "The SBIC program currently has invested or committed about $30.1 billion in small businesses, with the SBA's share of capital at risk about $14.3 billion. In FY2018, the SBA committed to guarantee $2.52 billion in SBIC small business investments. SBICs invested another $2.98 billion from private capital for a total of $5.50 billion in financing for 1,151 small businesses."], "subsections": []}, {"section_title": "New Market Venture Capital Program103", "paragraphs": ["The now inactive New Market Venture Capital (NMVC) program encourages equity investments in small businesses in low-income areas that meet specific statistical criteria established by regulation. The program operates through public-private partnerships between the SBA and newly formed NMVC investment companies and existing Specialized Small Business Investment Companies (SSBICs) that operate under the Small Business Investment Company program.", "The NMVC program's objective is to serve the unmet equity needs of local entrepreneurs in low-income areas by providing developmental venture capital investments and technical assistance, helping to create quality employment opportunities for low-income area residents, and building wealth within those areas.", "The SBA's role is essentially the same as with the SBIC program. The SBA selects participants for the NMVC program, provides funding for their investments and operational assistance activities, and regulates their operations to ensure public policy objectives are being met. The SBA requires the companies to provide regular performance reports and have annual financial examinations by the SBA. ", "The NMVC program was appropriated $21.952 million in FY2001 to support up to $150 million in SBA-guaranteed debentures and $30 million to fund operational assistance grants for FY2001 through FY2006. The funds were provided in a lump sum in FY2001 and were to remain available until expended. In 2003, the unobligated balances of $10.5 million for the NMVC debenture subsidies and $13.75 million for operational assistance grants were rescinded. The program continued to operate, with the number and amount of financing declining as the program's initial investments expired and NMVC companies increasingly engaged only in additional follow-on financings with the small businesses in their portfolios. The NMVC program's active unpaid principal balance (which is composed of the SBA guaranteed portion and the unguaranteed portion of the NMVC companies' active unpaid principal balance) peaked at $698 million in FY2008, and then fell each year thereafter until reaching $0 in FY2018."], "subsections": []}, {"section_title": "Small Business Innovation Research Program104", "paragraphs": ["The Small Business Innovation Research (SBIR) program is designed to increase the participation of small, high technology firms in federal research and development (R&D) endeavors, provide additional opportunities for the involvement of minority and disadvantaged individuals in the R&D process, and result in the expanded commercialization of the results of federally funded R&D. Current law requires that every federal department with an R&D budget of $100 million or more establish and operate a SBIR program. Currently, 11 federal agencies participate in the SBIR program. A set percentage of that agency's applicable extramural R&D budget\u2014originally set at not less than 0.2% in FY1983 and currently not less than 3.2%\u2014is to be used to support mission-related work in small businesses.", "Agency SBIR efforts involve a three-phase process. During Phase I, awards of up to $163,952 for six months are made to evaluate a concept's scientific or technical merit and feasibility. The project must be of interest to and coincide with the mission of the supporting organization. Projects that demonstrate potential after the initial endeavor may compete for Phase II awards of up to $1.09 million, lasting one to two years. Phase II awards are for the performance of the principal R&D by the small business. Phase III funding, directed at the commercialization of the product or process, is expected to be generated in the private sector. Federal dollars may be used if the government perceives that the final technology or technique will meet public needs.", "Eight departments and three other federal agencies currently have SBIR programs, including the Departments of Agriculture, Commerce, Defense, Education, Energy, Health and Human Services, Homeland Security, and Transportation; the Environmental Protection Agency; the National Aeronautics and Space Administration (NASA); and the National Science Foundation (NSF). Each agency's SBIR activity reflects that organization's management style. Individual departments select R&D interests, administer program operations, and control financial support. Funding can be disbursed in the form of contracts, grants, or cooperative agreements. Separate agency solicitations are issued at established times.", "The SBA is responsible for establishing the broad policy and guidelines under which individual departments operate their SBIR programs. The SBA monitors and reports to Congress on the conduct of the separate departmental activities."], "subsections": []}, {"section_title": "Small Business Technology Transfer Program", "paragraphs": ["The Small Business Technology Transfer program (STTR) provides funding for research proposals that are developed and executed cooperatively between a small firm and a scientist in a nonprofit research organization and meet the mission requirements of the federal funding agency. Up to $163,952 in Phase I financing is available for approximately one year to fund the exploration of the scientific, technical, and commercial feasibility of an idea or technology. Phase II awards of up to $1.09 million may be made for two years, during which time the developer performs R&D work and begins to consider commercial potential. Agencies may issue an award exceeding these award guidelines by no more than 50%. Only Phase I award winners are considered for Phase II. Phase III funding, directed at the commercialization of the product or process, is expected to be generated in the private sector. The small business must find funding in the private sector or other non-STTR federal agency.", "The STTR program is funded by a set-aside, initially set at not less than 0.05% in FY1994 and now at not less than 0.45%, of the extramural R&D budget of departments that spend more than $1 billion per year on this effort. The Departments of Energy, Defense, and Health and Human Services participate in the STTR program, as do NASA and NSF.", "The SBA is responsible for establishing the broad policy and guidelines under which individual departments operate their STTR programs. The SBA monitors and reports to Congress on the conduct of the separate departmental activities."], "subsections": []}, {"section_title": "Growth Accelerator Initiative", "paragraphs": ["The SBA describes growth accelerators as \"organizations that help entrepreneurs start and scale their businesses.\" Growth accelerators are typically run by experienced entrepreneurs and help small businesses access seed capital and mentors. The SBA claims that growth accelerators \"help accelerate a startup company's path towards success with targeted advice on revenue growth, job, and sourcing outside funding.\" ", "The SBA's Growth Accelerator Initiative began in FY2014 when Congress recommended in its appropriations report that the initiative be provided $2.5 million. Congress subsequently recommended that it receive $4 million in FY2015, $1 million in FY2016, FY2017, and FY2018, and $2 million in FY2019. The Growth Accelerator Initiative provides $50,000 matching grants each year to universities and private sector accelerators \"to support the development of accelerators and their support of startups in parts of the country where there are fewer conventional sources of access to capital (i.e., venture capital and other investors).\""], "subsections": []}]}, {"section_title": "Office of Advocacy115", "paragraphs": ["The SBA's Office of Advocacy is \"an independent voice for small business within the federal government.\" The Chief Counsel for Advocacy, who is nominated by the President and confirmed by the Senate, directs the office. The Office of Advocacy's mission is to \"encourage policies that support the development and growth of American small businesses\" by ", "intervening early in federal agencies' regulatory development process on proposals that affect small businesses and providing Regulatory Flexibility Act compliance training to federal agency policymakers and regulatory development officials; producing research to inform policymakers and other stakeholders on the impact of federal regulatory burdens on small businesses, to document the vital role of small businesses in the economy, and to explore and explain the wide variety of issues of concern to the small business community; and fostering a two-way communication between federal agencies and the small business community."], "subsections": []}, {"section_title": "Executive Direction Programs", "paragraphs": ["The SBA's executive direction programs consist of the National Women's Business Council, the Office of Ombudsman, and Faith-Based Initiatives."], "subsections": [{"section_title": "The National Women's Business Council", "paragraphs": ["The National Women's Business Council is a bipartisan federal advisory council created to serve as an independent source of advice and counsel to the President, Congress, and the SBA on economic issues of importance to women business owners. The council's mission \"is to promote bold initiatives, policies, and programs designed to support women's business enterprises at all stages of development in the public and private sector marketplaces\u2014from start-up to success to significance.\""], "subsections": []}, {"section_title": "Office of Ombudsman119", "paragraphs": ["The National Ombudsman's mission \"is to assist small businesses when they experience excessive or unfair federal regulatory enforcement actions, such as repetitive audits or investigations, excessive fines, penalties, threats, retaliation or other unfair enforcement action by a federal agency.\" The Office of Ombudsman works with federal agencies that have regulatory authority over small businesses to provide a means for entrepreneurs to comment about enforcement activities and encourage agencies to address those concerns promptly. It also receives comments from small businesses about unfair federal compliance or enforcement activities and refers those comments to the Inspector General of the affected agency in appropriate circumstances. In addition, the National Ombudsman files an annual report with Congress and affected federal agencies that rates federal agencies based on substantiated comments received from small business owners. Affected agencies are provided an opportunity to comment on the draft version of the annual report to Congress before it is submitted."], "subsections": []}, {"section_title": "Faith-Based Initiatives", "paragraphs": ["The SBA sponsors several faith-based initiatives For example, the SBA, in cooperation with the National Association of Government Guaranteed Lenders (NAGGL), created the Business Smart Toolkit, \"a ready-to-use workshop toolkit that equips faith-based and community organizations to help new and aspiring entrepreneurs launch and build businesses that are credit ready.\""], "subsections": []}]}, {"section_title": "Legislative Activity", "paragraphs": ["During the 111 th Congress", "P.L. 111-5 , the American Recovery and Reinvestment Act of 2009 (ARRA) provided the SBA an additional $730 million in temporary funding, including $375 million to subsidize fees for the SBA's 7(a) and 504/CDC loan guaranty programs and to increase the 7(a) program's maximum loan guaranty percentage to 90% for all regular 7(a) loans through September 30, 2010, or when appropriated funding for the subsidies and loan modification was exhausted. P.L. 111-240 , the Small Business Jobs Act of 2010, authorized the Secretary of the Treasury to establish a $30 billion Small Business Lending Fund (SBLF) to encourage community banks with less than $10 billion in assets to increase their lending to small businesses (about $4.0 billion was issued) and a $1.5 billion State Small Business Credit Initiative to provide funding to participating states with small business capital access programs. The act also provided the SBA an additional $697.5 million; including $510 million to continue the SBA's fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage through December 31, 2010, and about $12 billion in tax relief for small businesses. P.L. 111-322 , the Continuing Appropriations and Surface Transportation Extensions Act, 2011, authorized the SBA to continue its fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage through March 4, 2011, or until available funding was exhausted, which occurred on January 3, 2011. ", "During the 112 th Congress, the SBA's statutory authorization expired (on July 31, 2011). Since then, the SBA has been operating under authority provided by annual appropriations acts. Prior to July 31, 2011, the SBA's authorization had been temporarily extended 15 times since 2006.", "P.L. 112-239 , the National Defense Authorization Act for Fiscal Year 2013, increased the SBA's surety bond limit from $2 million to $6.5 million (and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary); required the SBA to oversee and establish standards for most federal mentor-prot\u00e9g\u00e9 programs and establish a mentor-prot\u00e9g\u00e9 program for all small business concerns; required the SBA's Chief Counsel for Advocacy to enter into a contract with an appropriate entity to conduct an independent assessment of the small business procurement goals, including an assessment of which contracts should be subject to the goals; and addressed the SBA's recent practice of combining size standards within industrial groups as a means to reduce the complexity of its size standards by requiring the SBA to make available a justification when establishing or approving a size standard that the size standard is appropriate for each individual industry classification.", "During the 113 th Congress, P.L. 113-76 , the Consolidated Appropriations Act, 2014, increased the SBA's SBIC program's annual authorization amount to $4 billion from $3 billion. ", "During the 114 th Congress", "P.L. 114-38 , the Veterans Entrepreneurship Act of 2015, authorized and made permanent the SBA's administrative decision to waive the SBAExpress loan program's one time, up-front loan guaranty fee for veterans (and their spouse). The act also increased the 7(a) loan program's FY2015 authorization limit from $18.75 billion to $23.5 billion (later increased to $26.5 billion). P.L. 114-88 , the Recovery Improvements for Small Entities After Disaster Act of 2015 (RISE After Disaster Act of 2015), includes several provisions designed to assist individuals and small businesses affected by Hurricane Sandy in 2012, and, among other things, authorizes the SBA to provide up to two years of additional financial assistance, on a competitive basis, to SBDCs, WBCs, SCORE, or any proposed consortium of such individuals or entities to assist small businesses located in a presidentially declared major disaster area; authorizes SBDCs to provide assistance to small businesses outside the SBDC's state, without regard to geographical proximity to the SBDC, if the small business is in a presidentially declared major disaster area; and temporarily increases, for three years, the minimum disaster loan amount for which the SBA may require collateral, from $14,000 to $25,000 (or, as under existing law, any higher amount the SBA determines appropriate in the event of a disaster). P.L. 114-92 , the National Defense Authorization Act for Fiscal Year 2016, includes a provision that expands the definition of a Base Realignment and Closure Act (BRAC) military base closure area under the HUBZone program to include the lands within the external boundaries of the closed base and the census tract or nonmetropolitan county in which the lands of the closed base are wholly contained, intersect it, or are contiguous to it. This change is designed to make it easier for businesses located in those areas to meet the HUBZone program's requirement that at least 35% of its employees reside in a HUBZone area. The act also extends BRAC base closure area HUBZone eligibility from five years to not less than eight years, provides HUBZone eligibility to qualified disaster areas, and adds Native Hawaiian Organizations to the list of HUBZone eligible small business concerns. Starting one year from enactment (effective November 25, 2016), the act also adds requirements concerning the pledge of assets by individual sureties participating in the SBA's Surety Bond Guarantee Program and increases the guaranty rate from not less than 70% to not less than 90% for preferred sureties participating in that program. P.L. 114-113 , the Consolidated Appropriations Act, 2016, expands the projects eligible for refinancing under the 504/CDC loan guaranty program in any fiscal year in which the refinancing program and the 504/CDC program as a whole do not have credit subsidy costs, generally limits refinancing under this provision to no more than 50% of the dollars loaned under the 504/CDC program during the previous fiscal year, and increases the SBIC program's family of funds limit (the amount of outstanding leverage allowed for two or more SBIC licenses under common control) to $350 million from $225 million. The act also provided the 7(a) loan program a FY2016 authorization limit of $26.5 billion. P.L. 114-125 , the Trade Facilitation and Trade Enforcement Act of 2015, renamed the \"State Trade and Export Promotion\" grant initiative to the \"State Trade Expansion Program.\" P.L. 114-125 also reformed some of the program's procedures and provided $30 million in annual authorization for STEP grants from FY2016 through FY2020. In terms of program administration, P.L. 114-125 allows the SBA's Associate Administrator (AA) for International Trade to give priority to STEP proposals from states that have a relatively small share of small businesses that export or would assist rural, women-owned, and socially and economically disadvantaged small businesses and small business concerns. P.L. 114-328 , the National Defense Authorization Act for Fiscal Year 2017, authorizes the SBA to establish different size standards for various types of agricultural enterprises (previously statutorily set at not more than $750,000 in annual receipts), standardizes definitions used by the SBA and the Department of Veterans Affairs concerning service-disabled veteran owned small businesses, requires the SBA to track companies that outgrow or no longer qualify for SBA assistance due to the receipt of a federal contract or being purchased by another entity after an initial federal contract is awarded, and, among other provisions, clarifies the duties of the Offices of Small and Disadvantaged Utilization within federal agencies. ", "During the 115 th Congress", "P.L. 115-31 , the Consolidated Appropriations Act, 2017, increased the 7(a) program's authorization limit to $27.5 billion in FY2017 from $26.5 billion in FY2016. P.L. 115-56 , the Continuing Appropriations Act, 2018 and Supplemental Appropriations for Disaster Relief Requirements Act, 2017, provided the SBA an additional $450 million for disaster assistance. P.L. 115-123 , the Bipartisan Budget Act of 2018, provided the SBA an additional $1.652 billion for disaster assistance and $7.0 million to the SBA's OIG for disaster assistance oversight. P.L. 115-141 , the Consolidated Appropriations Act, 2018, increased the 7(a) program's authorization limit to $29.0 billion in FY2018. The act also relaxed requirements on Microloan intermediaries that prohibited them from spending more than 25% of their technical assistance grant funds on prospective borrowers and more than 25% of those grant funds on contracts with third parties to provide that technical assistance by increasing those percentages to 50%. P.L. 115-189 , the Small Business 7(a) Lending Oversight Reform Act of 2018, among other provisions, codified the SBA's Office of Credit Risk Management; required that office to annually undertake and report the findings of a risk analysis of the 7(a) program's loan portfolio; created a lender oversight committee within the SBA; authorized the Director of the Office of Credit Risk Management to undertake informal and formal enforcement actions against 7(a) lenders under specified conditions; redefined the credit elsewhere requirement; and authorized the SBA Administrator to increase the amount of 7(a) loans not more than once during any fiscal year to not more than 115% of the 7(a) program's authorization limit. The SBA is required to provide at least 30 days' notice of its intent to exceed the 7(a) loan program's authorization limit to the House and Senate Committees on Small Business and the House and Senate Committees on Appropriations' Subcommittees on Financial Services and General Government and may exercise this option only once per fiscal year. P.L. 115-232 , the John S. McCain National Defense Authorization Act for Fiscal Year 2019, included provisions originally in H.R. 5236 , the Main Street Employee Ownership Act of 2018, to make 7(a) loans more accessible to employee-owned small businesses (ESOPs) and cooperatives. The act clarifies that 7(a) loans to ESOPs may be made under the Preferred Lenders Program; allows the seller to remain involved as an officer, director, or key employee when the ESOP or cooperative has acquired 100% ownership of the small business; and authorizes the SBA to finance transition costs to employee ownership and waive any mandatory equity injection by the ESOP or cooperative to help finance the change of ownership. The act also directs the SBA to create outreach programs and an interagency working group to promote lending to ESOPs and cooperatives.", "During the 116 th Congress", "P.L. 116-6 , the Consolidated Appropriations Act, 2019, increased the 7(a) program's authorization limit to $30.0 billion in FY2019."], "subsections": []}, {"section_title": "Appropriations127", "paragraphs": ["The SBA's received an appropriation of $887.604 million for FY2015, $871.042 million for FY2016, $1.337 billion for FY2017, $2.360 billion for FY2018, and $715.370 million for FY2019. ", "As shown in Table 8 , the SBA's FY2019 appropriation of $715.37 million includes", "$267.50 million for salaries and expenses, $247.70 million for entrepreneurial development and noncredit programs, $155.15 million for business loan administration, $4.0 million for business loan credit subsidies (for the Microloan program), $21.9 million for Office of Inspector General, $9.12 million for the Office of Advocacy, and $10.0 million for disaster assistance."], "subsections": []}]}}
{"id": "R45554", "title": "Considerations for Implementing a Small Business Disaster Grant Program", "released_date": "2019-02-26T00:00:00", "summary": ["Throughout the years, Congress has expressed interest and concern for businesses recovering from disasters. For nearly a century, the federal government's policy for providing disaster assistance to businesses has been limited primarily to low interest loans rather than grant assistance. More recently, Congress has contemplated whether grants should be made available to small businesses after a major disaster. During this debate, some have questioned why small businesses are not eligible for disaster grants when residences, nonprofit groups, and state and local governments are eligible. In addition to concerns about equity, proponents of small business disaster grants argue that small businesses should be eligible for grant assistance because of the important role they play in the national economy. Major disasters can severely disrupt economic activity by causing immediate losses of output, income, and employment. While reports vary on the number of small businesses that fail after a disaster, even the low estimates could be considered significant. The Institute for Business and Home Safety found that 25% of businesses that close following a disaster fail to reopen, and a study on businesses in New Orleans recovering from Hurricane Katrina found that 12% of businesses remained closed 26 months after the storm. The number of failing businesses after a disaster reported by Federal Emergency Management Agency (FEMA) are higher. According to FEMA, \"roughly 40%-60% of small businesses never reopen their doors following a disaster.\"", "To some, these findings suggest that the federal government should play a greater role in business disaster recovery. As part of this expanded role, Congress could consider providing grants to businesses to help them rebuild and recover from disasters. Changing the federal government's approach to business disaster policy, however, could be complex and require some careful decisionmaking. Steps would need to be taken to avoid and remedy potential grant and loan duplication. Congress would also have to determine under what circumstances and situations the grant program would be put into effect. Eligibility requirements would need to be developed to determine under what situations and circumstances grants would be provided as well as what types of businesses should be eligible to receive grants. Similarly, Congress might consider whether grants could be used for rebuilding, mitigation, or economic loss, in addition to other recovery activities. In addition to these concerns and others, Congress may want to investigate the potential cost implications of a small business disaster grant program.", "This report examines the historical development of federal disaster assistance to help explain possible reasons why businesses are currently provided disaster loans rather than grants. This is followed by a discussion of policy considerations and options related to a potential disaster grant program for small businesses, including", "how to minimize duplication of operations and benefits; whether to authorize the program in the Small Business Act, the Stafford Act, or other statute; the potential cost implications of a small business disaster grant program; and eligibility requirements (such as business size standards, eligible activities, and grant award amounts).", "Alternatively, Congress could explore other policy options to support small businesses struggling to recover from a disaster, including", "loan forgiveness; decreased interest rates; and establishing programs to help small (and large) businesses develop disaster and business continuity plans."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Robert T. Stafford Disaster Relief and Emergency Assistance Act ( P.L. 93-288 , hereinafter the Stafford Act) authorizes the President to issue a major disaster declaration in response to natural or man-made incidents that overwhelm state, local, or tribal capacities. The declaration makes a wide range of federal activities available to support state and local efforts to respond and recover from the incident. Major disaster declarations also authorize the Federal Emergency Management Agency (FEMA) to provide grant assistance to state, local, and tribal governments, residences, and certain private nonprofit (PNP) facilities that provide critical services. ", "Businesses that suffer uninsured loss as a result of a major disaster declaration are not eligible for FEMA grant assistance, and grant assistance from other federal sources is limited. On some occasions, Congress has provided assistance to businesses through the Community Development Block Grant (CDBG) program. The CDBG program provides loans and grants to eligible businesses to help them recover from disasters as well as grants intended to attract new businesses to the disaster-stricken area. In a few cases, CDBG has also been used to compensate businesses and workers for lost wages or revenues. CDBG assistance, however, is not available for all major disasters. Rather, it is used by Congress on a case-by-case basis in response to large-scale disasters. The United States Department of Agriculture and the Department of Commerce are also authorized to provide assistance to certain types of businesses such as agricultural producers or fisheries. While these programs are important sources of assistance following a disaster, they are generally limited in scope (available for only certain types of businesses) or provide limited grant amounts. Most businesses will need to apply for a Small Business Administration (SBA) disaster loan if they want assistance from the federal government for uninsured loss resulting from a disaster.", "SBA is authorized to provide grants to SBA resource partners, including Small Business Development Centers, Women's Business Centers, and SCORE (formerly the Service Corps of Retired Executives), to provide training and other technical assistance to small businesses affected by a disaster, but is not authorized to provide direct grant assistance to businesses."], "subsections": []}, {"section_title": "Overview of SBA Business Disaster Loans", "paragraphs": ["As indicated above, federal assistance to businesses that suffer uninsured loss as a result of a disaster is mainly limited to SBA disaster loans. Disaster loans address certain types of loss and fall into two categories: (1) Business Physical Disaster Loans, and (2) Economic Injury Disaster Loans (EIDL). ", "If Congress were to replace SBA business disaster loans with a grant program, it might consider providing grants for similar types of loss. Alternatively, Congress might implement a small business disaster grant program and continue to provide loan assistance through the SBA. If that is the case, it might consider how the small business disaster grant program would complement the existing loan program. The following sections describe SBA business disaster loans in more detail. "], "subsections": [{"section_title": "Business Physical Disaster Loans", "paragraphs": ["Business Physical Disaster Loans are available to almost any business located in a declared disaster area. Business Physical Disaster Loans provide businesses up to $2 million to repair or replace damaged physical property including machinery, equipment, fixtures, inventory, and leasehold improvements that are not covered by insurance. Damaged vehicles normally used for recreational purposes may be repaired or replaced with SBA loan proceeds if the borrower can submit evidence that the vehicles were used for business purposes.", "Businesses may also apply up to 20% of the verified loss amount for mitigation measures (e.g., grading or contouring of land, relocating or elevating utilities or mechanical equipment, building retaining walls, safe rooms or similar structures designed to protect occupants from natural disasters, or installing sewer backflow valves) in an effort to prevent loss should a similar disaster occur in the future.", "Interest rates for Business Physical Disaster Loans cannot exceed 8% per annum or 4% per annum if the business cannot obtain credit elsewhere. Borrowers generally pay equal monthly installments of principal and interest starting five months from the date of the loan. Business Physical Disaster Loans can have maturities up to 30 years."], "subsections": []}, {"section_title": "Economic Injury Disaster Loans (EIDLs)", "paragraphs": ["EIDLs are available to businesses located in a declared disaster area, that have suffered substantial economic injury, are unable to obtain credit elsewhere, and are defined as small by SBA size regulations. Size standards vary according to many factors including industry type, average firm size, and start-up costs and entry barriers. Small agricultural cooperatives and most private and nonprofit organizations that have suffered substantial economic injury as the result of a declared disaster are also eligible for EIDLs.", "Businesses can secure both an EIDL and a Business Physical Disaster loan to rebuild, repair, and recover from economic loss. The combined loan amount cannot exceed $2 million. Interest rate ceilings are statutorily set at 4% per annum or less and loans can have maturities up to 30 years."], "subsections": []}]}, {"section_title": "Arguments for and Against Small Business Disaster Grants", "paragraphs": ["The following sections outline some of the arguments for and against implementing a business disaster grant program including the rationale for keeping the current federal business disaster policy the same. "], "subsections": [{"section_title": "Arguments for a Small Business Disaster Grant Program", "paragraphs": ["Throughout the years, Congress has expressed interest and concern for businesses recovering from disasters. More recently, Congress has contemplated whether grants should be made available to small businesses after major disasters. Advocates of a small business disaster grant program might argue that providing grants would address three areas of congressional concern: (1) equity, (2) small business vulnerability to disasters, and (3) protecting the economy. "], "subsections": [{"section_title": "Equity Concerns", "paragraphs": ["Over the years some have questioned why residences, nonprofit groups, and state and local governments are eligible for disaster grants but not small businesses. Some view the policy as being unfair to businesses. Providing disaster grants to businesses, they argue, would remove this disparity and make federal disaster policy more equitable and uniform across all sectors.", "Opponents of providing small business disaster grants might object to the equity argument by pointing out that businesses benefit indirectly from grants provided to state, local, and tribal governments. For instance, repairing and replacing damaged roads and bridges, debris removal, and utility restoration are commonly needed for successful business operations. It is notable too that FEMA reimburses state and local governments for debris removal\u2014even on commercial property. "], "subsections": []}, {"section_title": "Vulnerability Concerns", "paragraphs": ["Small business disaster grant advocates could also argue that studies suggest that small businesses are particularly vulnerable to disasters and many fail to fully recover. While reports vary on the number of small businesses that fail after a disaster, even the low estimates could be considered significant. According to FEMA, \"roughly 40-60% of small businesses fail to reopen following a disaster.\" The Institute for Business and Home Safety found that 25% of businesses that close following a disaster never reopen. Businesses that do recover often take a long time to resume operations. A study on businesses in New Orleans recovering from Hurricane Katrina found that 12% of businesses remained closed 26 months after the storm. The same study indicated that smaller businesses had lower reopening probabilities than larger ones. And while SBA provides low-interest disaster loans with loan maturities up to 30 years for uninsured loss, some see a 30-year loan as an additional burden to full recovery. Finally, proponents argue that the need to recover and reopen quickly is not only important to small businesses\u2014it is also important to local governments because they rely on these businesses for tax revenue. Congress could use small business disaster grants to help vulnerable businesses recover and rebuild following a disaster. "], "subsections": []}, {"section_title": "Protecting the Economy", "paragraphs": ["Advocates could also argue that grant assistance could help counteract negative economic outcomes associated with disasters by helping businesses keep people employed and recover from economic loss. When major disasters take place, they not only cause immense damage to public infrastructure, they also severely damage the stock of private capital and disrupt economic activity. The typical economic pattern following large-scale disasters consists of large immediate losses of output, income, and employment. Small businesses play a significant role in the national economy. For example, in 2013, small businesses employed 56.8 million people (48% of the private workforce) in the United States. These small firms accounted for 33.6% of the nation's total known export value and produced roughly 46% of the nation's nonfarm gross domestic product (GDP). ", "Opponents of a small business disaster grant program could point out, however, that studies suggest that market mechanisms may restore economic order without grant assistance. According to these studies, the long-term economic benefits of rebuilding from a major disaster can offset their initial economic disruption. For example, research on Hurricane Sandy recovery found that the storm initially resulted in net negative effects on state GDP, employment, income, and tax revenues. According to the study, spending on large-scale cleanup and repair efforts not only offset, but exceeded the initial economic negative effects. "], "subsections": []}]}, {"section_title": "Arguments Against Small Business Disaster Grants", "paragraphs": ["Opponents would argue there are three main reasons why disaster grants should not be provided to small businesses: (1) it might encourage businesses to become underinsured for disasters, (2) it would be costly, and (3) the Stafford Act is an inappropriate means to provide disaster grants to businesses."], "subsections": [{"section_title": "Underinsured Businesses", "paragraphs": ["Opponents could argue that small businesses are responsible for obtaining adequate insurance coverage to recover from a disaster. To them, providing grants to small businesses could create an incentive for them to be underinsured (or not obtain insurance) to cut costs. Advocates for small business disaster grants might counter argue that other sectors are also responsible for insurance coverage yet are still eligible for grant assistance."], "subsections": []}, {"section_title": "Fiscal Implications", "paragraphs": ["Opponents could also argue that providing disaster grants to small businesses could be very expensive. SBA disaster loans are designed to be repaid, and though the interest rates are relatively low and some of these loans are not repaid due to defaults, the cost to the federal government for providing loans is much less than the cost of providing grants. Grants are not repaid to the federal government."], "subsections": []}, {"section_title": "The Stafford Act", "paragraphs": ["As discussed later in this report, opponents might consider the Stafford Act to be an inappropriate vehicle for providing disaster assistance to businesses. To support this argument, they would point out that Section 101(b) of the Stafford Act states that it \"is the intent of the Congress, by this Act, to provide an orderly and continuing means of assistance by the federal government to state and local governments in carrying out their responsibilities to alleviate the suffering and damage which result from such disasters....\" They may therefore conclude that if the federal government were to provide disaster grants to businesses, those grants should be provided under the Small Business Act or some other authorization statute. ", "Elements of the arguments for and against small business disaster grants outlined above will be explored in greater detail in \" Policy Considerations and Options for Congress .\""], "subsections": []}]}]}, {"section_title": "Historical Developments", "paragraphs": ["Some question why the federal government provides grant assistance to individuals and households, state, local, and tribal governments, and nonprofit organizations, among others, but not to businesses. A review of congressional hearings, bill reports, agency reports, academic journals, and other authoritative sources did not identify specific language explaining why Congress distinguishes between the types of disaster assistance that should be provided to businesses while not applying the same restrictions to other sectors.", "It appears that current federal policy on business disaster assistance first emerged in the 1930s. At that time, the United States had no overarching federal disaster policy or permanent program in place to respond to major disasters. Response, repair, and recovery activities were generally organized and carried out under local auspices and financial assistance was typically provided by states, municipalities, churches, and other nonprofit organizations such as the American Red Cross and the Salvation Army. When Congress did provide financial assistance, it was generally on an ad hoc basis. Further, Congress wanted the measures limited to relieving \"human distress and for such things as food, clothing, shelter, medicine and hospitalization\" rather the reconstruction of buildings, businesses, or anything else. ", "The Great Depression also heightened concerns about federal costs. Thus, Congress sought to keep federal costs to a minimum by limiting assistance to individuals and households, and, to the extent possible, returning the federal expenditures back to the Treasury. ", "For example, in 1933, Congress debated whether to provide funding to the American Red Cross (the main source of disaster assistance at that time) in response to an earthquake in Long Beach California. The Red Cross sought the funding because it could not meet assistance needs through its traditional fundraising efforts. Businesses, which were already struggling because of the Great Depression, suffered a great deal of damage as a result of the incident. While sympathetic to struggling businesses, Congress was resolute that federal assistance for the earthquake be limited to immediate needs such as food and clothing. During a hearing before the Subcommittee of House Committee on Appropriations, the Vice Chairman in charge of Domestic Operations for the American Red Cross clarified that Red Cross did not have a role in business recovery:", "There will always arise the question as to business rehabilitation, businesses and factories that have been affected. Then, there is the question of the solvency or insolvency of public corporations, schools, school boards, and so forth, and the replacement of their losses. For that reason I made the statement at the outset delimiting the scope of Red Cross work to family problems as against those of business and government.", "Congress decided that it would make disaster loans available to nonprofit organizations with loan maturities not to exceed 10 years through the Reconstruction Finance Corporation (RFC). The restriction that limited loans to nonprofit organizations was removed in 1936, and RFC was \"authorized to make disaster loans to corporations, partnerships, individuals, and municipalities or other political subdivisions of states and territories.\" The RFC continued to make disaster loans available until Congress dissolved the RFC and transferred its disaster loan authority to SBA in 1953 (P.L. 83-163). ", "Around the same time, Congress passed the Federal Disaster Relief Act of 1950 (P.L. 81-875). The Disaster Relief Act established a permanent authority that committed the federal government to provide specific types of assistance to states and localities (but not businesses) following a major disaster declaration. It appears that the creation of a separate authority to provide assistance to states and localities may have placed them on a separate policy trajectory from businesses. Though interlaced to a degree, assistance to businesses remained in the form of loans, while the scope and nature of federal assistance to other entities expanded as the Disaster Relief Act was amended in the 1960s, 1970s, and replaced in the 1980s by the Stafford Act. "], "subsections": [{"section_title": "Selected Examples of Business Disaster Grants Proposals", "paragraphs": ["The long-standing policy of providing disaster loans for businesses instead of grants has been reexamined by Congress in the last decade. In recent Congresses, legislation has been introduced that would establish business disaster grant programs. These legislative attempts include: (1) the Small Business Owner Disaster Relief Act of 2008 (H.R. 6641) in the 110 th Congress, and (2) the Hurricane Harvey Small Business Recovery Grants Act (H.R. 3930) in the 115 th Congress. "], "subsections": [{"section_title": "The Small Business Owner Disaster Relief Act of 2008", "paragraphs": ["H.R. 6641 would have amended Section 406(a) of the Stafford Act to allow businesses with 25 or fewer employees to receive grants to repair, restore, or replace damaged facilities. The assistance was limited to $28,000\u2014the maximum amount of assistance a family could receive at that time under Section 408 of the Stafford Act (FEMA's Individuals and Households program). ", "H.R. 6641 was referred to the Committee on Transportation and Infrastructure, Subcommittee on Economic Development, Public Buildings and Emergency Management on July 30, 2008. A hearing on H.R. 6641 provided an opportunity for some to voice their concern over the perceived disparity in disaster assistance. For example, in his testimony before the Subcommittee, Representative Steve King of Iowa stated that \"we have structured ... federal government relief in grant form for every sector of our economy ... except for private enterprise, and the ones that are the most vulnerable are small businesses.\" Later in the hearing, Chairwoman Eleanor Holmes Norton of Washington, DC, asked: \"how are we to convince for the first time since the Stafford Act was passed ... [that] Congress faced with an extraordinary deficit that this is the time to start giving what amounts to money to private enterprises?\" To which Representative King stated: \"we have justified providing relief for not-for-profits, even some churches who qualify ... and every political subdivision\u2014city, county, state, and of course federal.\" In addition to voicing concerns about the equity of disaster assistance, the hearing also highlighted some of the challenges businesses face when recovering from a disaster, including a lack of capital, revenue gaps, and a weakened ability to generate revenue. ", "It is possible that some of the programmatic concerns would have been addressed had the bill continued to advance in the legislative process, but the measure saw no further legislative action."], "subsections": []}, {"section_title": "Hurricane Harvey Small Business Recovery Grants Act", "paragraphs": ["H.R. 3930 in the 115 th Congress would have established a temporary \"Office of Hurricane Harvey Small Business Grants\" in the SBA to provide grants to businesses that suffered substantial economic injury as a result of Hurricane Harvey. H.R. 3930 would have authorized grants up to $100,000; the SBA Administrator, however, could increase that amount to $250,000 if deemed appropriate. Businesses could use the grants for a wide-range of recovery activities including uninsured property loss, damages or destruction of physical infrastructure, overhead costs, employee wages for unperformed work, temporary relocation, and debris removal. The grants could also be used for insurance deductibles, but not to repay government loans. ", "H.R. 3930 was introduced in the House of Representatives, but saw no further legislative action."], "subsections": []}]}]}, {"section_title": "Policy Considerations and Options for Congress", "paragraphs": ["Implementing a small business disaster grant program may address congressional concerns about disaster relief equity, protecting the economy and vulnerable businesses. A business grant program, however, could have some unintended policy consequences. Some of the considerations Congress may contemplate for a potential small business disaster grant program include: (1) preventing the duplication of administrative functions and benefits; (2) the selection of the authorization statute; (3) whether (and what type of) declarations and designations will put the disaster grant program into effect; (4) what size businesses should be eligible for disaster grant assistance; and (5) the types of activities eligible for grant assistance. ", "In addition, Congress could explore alternative options to a small business disaster grant program that could also address business disaster recovery concerns including (1) loan forgiveness; (2) reduced interest rates; and (3) measures that could help small (and large) businesses develop continuity and disaster recovery plans to help them prepare for and recover from disasters. "], "subsections": [{"section_title": "Preventing Duplication of Administrative Functions and Benefits", "paragraphs": ["Preventing duplication of administrative functions and benefits would likely be of concern if Congress authorized a small business disaster grant program. Duplication of administrative functions occurs when an office or staff at two or more federal entities performs the same types of operations. This type of duplication might be addressed through program consolidation. In the context of disaster assistance, duplication of benefits occurs when compensation from multiple sources exceeds the need for a particular recovery purpose."], "subsections": [{"section_title": "Preventing Duplication of Administrative Functions", "paragraphs": ["To prevent duplication of administrative functions Congress could opt to authorize the implementation of a new small business disaster grant program by either SBA or FEMA, but not both. The selection and authorization debate could, to some extent, resemble policy discussions Congress had during FEMA's formation. In 1978, President Jimmy Carter signed Executive Order 12127 which merged many disaster-related responsibilities of separate federal agencies into FEMA. Congress determined that SBA would continue to provide disaster loans through the Disaster Loan Program rather than transfer that function to FEMA. At the 1978 hearing before a subcommittee of the Committee on Government Operations, Chairman Jack Brooks questioned the rationale for keeping the loan program outside of FEMA. According to James T. McIntyre, Director, Office of Management and Budget (OMB), the rationale was as follows:", "[O]ne of the fundamental principles underlying this proposal is that whenever possible emergency responsibilities should be an extension of the regular missions of federal agencies. I believe the Congress also subscribed to this principle in considering disaster legislation in the past. The Disaster Relief Act of 1974 provides for the direction and coordination, in disaster situations, of agencies which have programs which can be applied to meeting disaster needs. It does not provide that the coordinating agency should exercise direct operational control.... [I]f the programs ... were incorporated in the new agency we would be required to create duplicate sets of skills and resources.... [S]ince the Small Business Administration administers loan programs other than those just for disaster victims, both the SBA and the new agency [FEMA] would have to maintain separate staffs of loan officers and portfolio managers if the disaster loan function were transferred to the new Agency.... [O]ne of our basic purposes for reorganization ... would be thwarted if we were to have to maintain a duplicate staff function in two or more agencies.", "Similarly, Congress may consider whether issuing small business disaster grants either through FEMA or SBA would duplicate skills and resources in one or the other agency. Congress could examine existing administrative functions at each agency and determine which most closely aligns with a potential small business disaster grant program."], "subsections": []}, {"section_title": "Preventing Duplication of Benefits", "paragraphs": ["In addition to duplication of administrative functions, duplication of benefits is more likely to occur as more recovery resources become available. The range of resources can include insurance payouts, state and local government assistance, charitable donations from private institutions and individuals, as well as certain forms of federal assistance. While SBA disaster loans must be repaid, they are still considered a benefit. Duplication of benefits sometimes happens at the individual and household level wherein a range of resources become available to assist in the response, recovery, and rebuilding process. It could be inferred that providing businesses with disaster loans and grants could lead to the same outcome. ", "Instances of duplication could increase if businesses become eligible for loans and grants. Section 312 of the Stafford Act requires that disaster assistance is distinct and not duplicative. Under Section 312 ", "The President, in consultation with the head of each Federal agency administering any program providing financial assistance to persons, business concerns, or other entities suffering losses as a result of a major disaster or emergency, shall assure that no such person, business concern, or other entity will receive such assistance with respect to any part of such loss as to which he has received financial assistance under any other program or from insurance or any other source.", "FEMA and SBA use a computer matching agreement (CMA) in the application process to share real-time disaster assistance to prevent duplication of benefits. Despite the use of such mechanisms, duplication can still occur. Under 44 C.F.R. \u00a7206.191, a federal agency providing disaster assistance is responsible for identifying and rectifying instances of duplicative assistance. If identified, the recipient is required to repay the duplicated assistance.", "In some cases the federal government does not identify instances of duplication, and the improper payments are never recovered. In others cases, it may take a prolonged period of time to identify the duplication and the repayment notification may come as a surprise to disaster victims who did not realize they have to repay their assistance if that assistance is found to be duplicative. The payment may be an additional financial and emotional burden if the grantee has spent all of their assistance proceeds on recovery needs.", "If Congress authorizes a small business disaster grant program, it may consider conducting investigations and holding hearings to help determine which authorization statute would be best at reducing duplication of administrative functions and benefits."], "subsections": []}]}, {"section_title": "Authorization Statute", "paragraphs": ["Congress would need to identify an authorizing statute should it create a disaster grant program for businesses. Congress could decide to authorize a small business disaster grant program under the Stafford Act (as was proposed by H.R. 6641 ), the Small Business Act, or other statute. "], "subsections": [{"section_title": "Authorization Under the Stafford Act", "paragraphs": ["FEMA would most likely be solely responsible for administering a small business disaster grant program if it were authorized under the Stafford Act. Having FEMA administer the program may have a number benefits. First, FEMA already has grant processing operations in place. It might be relatively easier to expand the operations to include small businesses disaster grants rather than establishing new grant-making operations within SBA. Second, having FEMA administer the small business disaster grant program may help limit duplication of administrative functions between FEMA and SBA. Third, FEMA has an existing account called the Disaster Relief Fund (DRF) that receives annual and supplemental appropriations to fund its disaster assistance programs. DRF appropriations could be increased to pay for small business disaster grants. In contrast, Congress would likely need to make statutory changes to SBA's existing disaster loan account, or authorize a new account, if a small business disaster grant program was administered by SBA."], "subsections": []}, {"section_title": "Authorization Under the Small Business Act", "paragraphs": ["SBA would probably administer a small business disaster grant program if it were authorized under the Small Business Act. As mentioned previously, SBA currently has authority under the Small Business Act to provide grants to SBA resource partners to provide training and other technical assistance to small businesses affected by a disaster, but it does not have specific authority to provide disaster grants to businesses or individuals.", "Congress could decide to have SBA administer the program because it already has a framework in place to evaluate business disaster needs and disaster loan eligibility. Congress may need to make statutory changes to SBA's disaster loan account or authorize a new account to receive appropriations for disaster grants. Another legislative approach Congress could consider is allowing SBA to draw funds from FEMA's DRF to pay for small business disaster grants. Some may question this funding approach because it would allow SBA to draw funds from another agency's account. The funding arrangement could also be problematic if DRF became low on funds and there are competing priorities for scarce resources. "], "subsections": []}]}, {"section_title": "Declarations and Designations", "paragraphs": ["Under current laws, FEMA grants and SBA disaster loans are triggered by a \"declaration\" under the Stafford Act, an SBA declaration, or both. The type (or category) of declaration determines what types of federal assistance are made available. Declarations are a necessary, but not sufficient condition for federal disaster assistance to businesses. The types of assistance made available are further influenced by the \"designations\" contained within the declaration. Declarations and designations may have a similar influence on a small business disaster grant program. The following describes the nexus between federal disaster assistance and declarations in more detail. "], "subsections": [{"section_title": "Stafford Act Declarations", "paragraphs": ["If the current declaration framework were applied to a small business disaster grant program, relatively fewer businesses may be eligible for grant assistance if authorized under the Stafford Act compared to the Small Business Act. This is because the thresholds and criteria used to make Stafford Act declaration determinations are relatively higher than the ones used to provide disaster assistance under the Small Business Act. ", "The Stafford Act authorizes the President to issue major disaster declarations that provide states, tribes, and localities with a range of federal assistance in response to natural and human-caused incidents. Each presidential major disaster declaration includes a designation. The designation determines what FEMA grants are available for the incident. It also designates which counties are eligible for the grants. The potential types of FEMA grant assistance include (1) Public Assistance (PA) for infrastructure repair; (2) Hazard Mitigation Grant Program (HMGP) grants to lessen the effects of future disaster incidents; and (3) Individual Assistance (IA) for aid to individuals and households. Under FEMA regulations:", "The Assistant Administrator for the Disaster Assistance Directorate has been delegated authority to determine and designate the types of assistance to be made available. The initial designations will usually be announced in the declaration. Determinations by the Assistant Administrator for the Disaster Assistance Directorate of the types and extent of FEMA disaster assistance to be provided are based upon findings whether the damage involved and its effects are of such severity and magnitude as to be beyond the response capabilities of the state, the affected local governments, and other potential recipients of supplementary federal assistance. The Assistant Administrator for the Disaster Assistance Directorate may authorize all, or only particular types of, supplementary federal assistance requested by the governor.", "The \"findings\" referenced above are known as \"factors\" that are used by FEMA to evaluate a governor's or chief executive's request for a major disaster declaration and make IA and PA recommendations to the President (a full description of the factors can be located in the Appendix ). While all major disaster declarations have HMGP designations, not all declarations designate IA and PA. In rare cases, only IA and HMGP are designated. More commonly, PA and HMGP are designated (these are sometimes referred to as \"PA-only\" major disaster declarations). This is because major disasters often cause greater damage to public infrastructure relative to damaged households.", "Stafford Act declarations also trigger the SBA Disaster Loan Program and the types of loans are determined by the designation. If IA is designated, then all SBA disaster loans types are made available to eligible businesses. If PA is designated, then only private nonprofit organizations are eligible for disaster loans (see Figure 1 ). In other words, most private businesses would not be able to obtain a disaster loan under a PA-only major disaster declaration. ", "If the existing declaration framework is applied to a small business disaster grant program, then small businesses would generally be eligible for disaster grants for Stafford Act major disaster declarations that included an IA designation. By comparison, disaster loans would likely only be made available to private nonprofit organizations under a PA-only declaration. ", "Some might be concerned that too few businesses would be eligible for disaster grants if the existing declaration and designation framework were applied to a small business disaster grant program. They may also question the relevance of the IA designation because the factors used to determine IA do not evaluate business damages or economic loss. For example, it is conceivable that an incident could cause significant damage to public infrastructure and businesses but not to households. Consequently, businesses could be denied assistance because it was determined that damages to residences did not warrant assistance to individuals and households.", "There are, however, at least four reasons why some might argue that the existing declaration and designation framework should be applied to a small business disaster grant program:", "1. It could help ensure that small business disaster grants were only provided for large-scale incidents. 2. It could help limit grant costs because not all declarations would trigger small business disaster grants. 3. Applying the declaration and designation framework uniformly to the grant and loan programs would align the two programs and reduce the potential for administrative confusion or duplication. 4. Conversely, using different designations could create a perceived disparity between the loan and grant programs because some business owners may question why grants are available for some major disasters (because they are designated IA and PA), but not others (because they have PA-only designations).", "If Congress authorized a small business disaster grant program under the Stafford Act, it could consider using the existing declaration and IA designation framework used to trigger eligibility for the SBA Disaster Loan Program. This would align the implementation of the two programs and potentially smooth administrative processes and potentially limit costs.", "An alternative policy option Congress might consider is a \"business designation\" rather than existing designations to determine whether the incident warrants a grant, a loan, or both. The business designation could use a separate set of factors or criteria similar to the ones FEMA currently uses to evaluate declaration requests and make IA and PA recommendations. This could align the designation with damages that are specific to small businesses."], "subsections": []}, {"section_title": "SBA Declarations", "paragraphs": ["Congress could consider using SBA declarations to provide disaster grants to small businesses rather than Stafford Act declarations. The following describes how SBA declarations are used to make disaster loans available and examines the potential policy implications of using the same structure to provide disaster grants to small businesses.", "The SBA Administrator has authority under the Small Business Act to make two types of disaster declarations: (1) a physical disaster declaration (commonly referred to as an \"SBA declaration\"), and (2) an Economic Injury Disaster Loan (EIDL) declaration (see Figure 1 ). Each declaration could make certain forms of assistance available if SBA disaster declarations were to be applied to a small business disaster grant program:", "1. The SBA Administrator may issue a physical disaster declaration in response to a gubernatorial request for assistance. This type of declaration is often made for relatively smaller incidents. The criterion used to determine whether to issue this type of declaration is generally the presence of at least 25 homes or businesses (or some combination of the two) that have sustained uninsured losses of 40% or more in any county or other smaller political subdivision of a state or U.S. possession. When the SBA Administrator issues a physical disaster declaration, both SBA disaster loan types become available to eligible homeowners, renters, businesses of all sizes, and nonprofit organizations within the disaster area or contiguous counties and other political subdivisions (see Figure 1 ). If SBA physical disaster declarations were to be applied to a small business disaster grant program, the grants could be made available to small businesses for incidents that do not meet the damage threshold of a major disaster declaration under the Stafford Act. 2. The SBA Administrator may make an EIDL declaration when SBA receives a certification from a state governor that at least five small businesses have suffered substantial economic injury as a result of a disaster. Alternatively, the SBA Administrator may issue an EIDL declaration based on the determination of a natural disaster by the Secretary of Agriculture. The SBA Administrator may also issue an EIDL declaration based on the determination of the Secretary of Commerce that a fishery resource disaster or commercial fishery failure has occurred. Only EIDLs are available under this type of declaration (see Figure 1 ). EIDL assistance helps businesses meet financial obligations and operating expenses that could have been met had the disaster not occurred. Loan proceeds can only be used for working capital necessary to enable the business or organization to alleviate the specific economic injury and to resume normal operations. The assistance is designed to help businesses that did not suffer direct damages, but rather businesses that have suffered economic loss as a result of an incident. For example, disasters such as hurricanes can disrupt tourism. In such cases, there may have been some businesses that did not suffer direct damages, but still lost tourism revenue as a result of the hurricane. If EIDL declarations were to be applied to a small business disaster grant program, the grants could be used to provide similar economic assistance to businesses suffering from economic loss as a result of a disaster. ", "A comparison of Stafford Act declarations (including designations) and SBA declarations from 2008 to 2017 provides context to the SBA declarations outlined above. As shown in Figure 2 and Table 1 , during this period, 2,869 declarations were issued under the Stafford Act and the Small Business Act. A total of 791 declarations were issued under the Stafford Act. Of these, 194 (6.8% of total declarations) included IA and PA assistance, while 597 (20.8% of total declarations) were PA-only. ", "In contrast, during the same period, a total of 2,078 (72.4%) declarations were issued under the Small Business Act. Of these, 512 (17.8% of total declarations) were SBA physical disaster declarations, 97 (3.4%) were EIDL declarations, and 1,469 (51.2%) were EIDL declarations based on the determination of a natural disaster by the Secretary of Agriculture. There were no declarations issued during the 10-year period based on the determination of the Secretary of Commerce that a fishery resource disaster or commercial fishery failure had occurred.", "The following applies various types of declarations and designations to a potential small business disaster grant program to the above data to draw some inferences on how many businesses might get grants in certain situations.", "If the small business disaster grant program is only triggered by Stafford Act declarations that designate IA and PA, then roughly 6.8% of the declarations (194) issued in Figure 2 and Table 1 would have made disaster grants available to small businesses. That could be a concern for those who want to provide small business grants for incidents that are too small to qualify for assistance under the Stafford Act. As mentioned previously, SBA declarations often provide assistance to incidents that impact a locality or a region but do not cause enough state-wide damage to warrant a major disaster declaration under the Stafford Act. If the small business disaster grant program is triggered by the SBA Administrator issuing a physical disaster declaration, then roughly 17% of the declarations (512) issued in Figure 2 and Table 1 would have made disaster grants available to small businesses. This type of declaration could arguably make more incidents eligible for grant assistance because the 512 incidents in Figure 2 and Table 1 were presumably issued for incidents that did not meet the per capita threshold for a major disaster declaration under the Stafford Act. It should be noted, however, that the number of grants made available under an SBA Administrator physical disaster declaration would likely depend on whether the grants would only provide assistance for repairing and rebuilding damaged structure or if they would also provide assistance for economic loss. Policymakers could consider making the grants available through either an SBA Administrator physical declaration or an EIDL declaration so that the grants could be used for repairs and rebuilding or for economic loss. If so, then 2,078 declarations during the time period could have made the small business disaster grants available. It could be argued that the greatest number of businesses would benefit from small business disaster grants by applying the existing declaration framework under the combined authorities and making the grants available for either physical damages or economic loss. In other words, the same conditions under which SBA disaster loans are made available. Doing so would make small business disaster grants available in all of the declarations in Figure 2 and Table 1 with the exception of the PA-only Stafford Act declarations, under which only private nonprofit organizations are eligible (see Figure 1 ). ", "While some may favor making small business disaster grants available for a wide-range of incidents others may want to limit their use. For example, those concerned about the cost implications of a small business disaster grant program may prefer Stafford Act declarations over SBA declarations. As mentioned previously, the thresholds used to determine SBA declarations are lower and generally based on (1) at least 25 homes or businesses (or some combination of the two) sustaining uninsured losses of 40% or more in any county or other smaller political subdivision of a state or U.S. possession; or (2) at least three businesses in the disaster area sustaining uninsured losses of 40% or more of the estimated fair replacement value of the damaged property (whichever is lower). The lower thresholds help provide disaster loans for incidents that are locally damaging, but do not cause enough widespread damage to warrant a major disaster declaration.", "In contrast, the threshold used by FEMA under the Stafford Act to a recommend major disaster declaration is significantly higher. In general, public infrastructure damages must meet or exceed $1.43 per capita (based on the most recent census figures) to be recommended for major disaster assistance. Applying the per capita threshold to a small business disaster grant program could help ensure that grants are only provided in cases of large-scale disasters.", "SBA declaration thresholds might be lower than FEMA thresholds because federal costs associated with loans (which are supposed to be repaid) are less than grants. If costs are a concern, policymakers might consider using criteria similar to FEMA's per capita threshold used for major disaster declarations to issue small business disaster grants. ", "Finally, another factor to consider is whether the declaration is properly aligned with the agency administering the small business disaster grant program. For example, it could be problematic if small business disaster grants are triggered by SBA declarations but administered by FEMA. SBA would essentially be putting another agency's program into effect. Consequently, it could be argued that a small business disaster grant program should be administered by FEMA if Stafford Act declarations are used to trigger the program, or administered by SBA if SBA declarations are used to put the program into effect. "], "subsections": []}]}, {"section_title": "Eligible Recovery Activities", "paragraphs": ["The small business disaster grant program proposed by H.R. 6641 would have provided grants to \"private business damaged or destroyed by a major disaster for the repair, restoration, reconstruction, or replacement of the facility and for the associated expenses incurred by the person.\" Congress could consider similar legislative language if it authorized a small business disaster grant program, or it may wish to develop a detailed list of what damage types and economic loss amounts would be eligible for grant assistance. Similarly, Congress could also consider whether grants could be used for economic loss and/or mitigation measures. "], "subsections": [{"section_title": "Grants for Economic Loss", "paragraphs": ["As mentioned previously, in some cases a disaster can disrupt services and create economic hardship for businesses without causing structural damages. SBA EIDL provides businesses with up to $2 million in loans to help meet financial obligations and operating expenses that could have been met had the disaster not occurred. These loan proceeds can only be used for working capital necessary to enable the business or organization to alleviate the specific economic injury and to resume normal operations. Loan amounts for EIDLs are based on actual economic injury and financial needs, regardless of whether the business suffered any property damage.", "Some may suggest that small business disaster grants should be limited to small businesses that need assistance to repair and rebuild their business. Others may think that grants should also be provided for economic loss. For example, as mentioned previously H.R. 3930 authorized grants for business interruption, overhead costs, and employee wages as well as for rebuilding and repairs. If Congress were to authorize a small business disaster grant program, it may also consider whether the grants should be available for economic loss or limit them to specific types of damage. "], "subsections": []}, {"section_title": "Mitigation", "paragraphs": ["Businesses obtaining an SBA physical disaster loan may use up to 20% of the verified loss amount for mitigation measures (e.g., grading or contouring of land; relocating or elevating utilities or mechanical equipment; building retaining walls, safe rooms, or similar structures designed to protect occupants from natural disasters; or installing sewer backflow valves) in an effort to prevent loss should a similar disaster occur in the future.", "If Congress decided to allow small businesses that receive a disaster grant to use the funds for mitigation purposes, it could limit those expenditures to a percentage of the total grant amount, or it could allow the entire grant to be used for mitigation measures. ", "In addition, if Congress decided to allow disaster grants to be used for mitigation, Congress could consider whether to provide the grant prior to a disaster or without a declaration. For example, Congress could model small business mitigation grants on the Pre-Disaster Mitigation pilot program. P.L. 106-24 amended Section 7(b)(1) of the Small Business Act to include a Pre-Disaster Mitigation pilot program administered by SBA during fiscal years 2000 through 2004. The program allowed SBA to make low-interest (4% or less) fixed-rate loans of no more than $50,000 per year to small businesses to implement mitigation measures (such as relocating utilities, grading, and building retaining or sea walls) designed to protect the small business from future disaster-related damage. "], "subsections": []}]}, {"section_title": "Business Size Considerations", "paragraphs": ["Congress may consider business size as a criterion for receiving small business disaster grants as a means to target the assistance to businesses of specific sizes. One option could be using SBA's size standards. ", "The SBA uses two measures to determine if a business qualifies as small for its loan guaranty and venture capital programs: industry specific size standards or a combination of the business's net worth and net income. For example, the SBA's Small Business Investment Company (SBIC) program allows businesses to qualify as small if they meet the SBA's size standard for the industry in which the applicant is primarily engaged, or a maximum tangible net worth of not more than $19.5 million and average after-tax net income for the preceding two years of not more than $6.5 million. All of the company's subsidiaries, parent companies, and affiliates are considered in determining if it meets the size standard. For contracting purposes, firms are considered small if they meet the SBA's industry specific size standards. Overall, the SBA currently classifies about 97% of all employer firms as small. These firms represent about 30% of industry receipts.", "The SBA's industry size standards vary by industry, and are based on one of the following four measures: the firm's (1) average annual receipts in the previous three years, (2) number of employees, (3) asset size, or (4) for refineries, a combination of number of employees and barrel per day refining capacity. Historically, the SBA has used the number of employees (ranging from 50 or fewer to no more than 1,500 employees) to determine if manufacturing and mining companies are small and average annual receipts (ranging from no more than $5.5 million per year to no more than $38.5 million per year) for most other industries. ", "Congress, however, may want to limit disaster grant assistance to small businesses that have fewer employees that are particularly vulnerable to disaster. For example, it could consider providing grants only to businesses of 10 or fewer employees to target \"mom and pop shops.\" As mentioned previously, H.R. 6641 (the Small Business Owner Disaster Relief Act of 2008) would have allowed businesses with 25 or fewer employees to receive grants to repair, restore, or replace damage facilities. Based on data compiled by SBA on business disaster loan applications from FY2013 to FY2017, Figure 3 provides a rough estimate of how many businesses over a five-year period could potentially receive a small business disaster grant under several different size standards.", "Based on the FY2013 through FY2017 SBA data, if small business disaster grants were limited to businesses of 10 employees or fewer, roughly 10,000 businesses over a five-year period could be eligible for a small business disaster grant. Over that same time period, nearly 11,000 small businesses could be eligible if the cap were 25 employees or fewer employees. That number would not change substantially if the cap were 50, 75, or 100 or fewer employees (see Figure 3 ).", "Finally, SBA applications for disaster loans currently rely on self-reporting of their number of employees. Congress may consider whether this data should be verified by SBA, or if doing so might inappropriately delay the receipt of the grant. "], "subsections": [{"section_title": "Grant Amounts", "paragraphs": ["H.R. 6641 would have capped small business disaster grants at the maximum amount of assistance a family could receive from FEMA's Individuals and Households program (currently $34,900). Error! Reference source not found. and Table 2 provide cost estimates based on businesses of 25 or fewer employees that applied for disaster loans from FY2013 to FY2017. Based on the data, if disaster grants were capped at $35,000, and all of the businesses that received a loan received a grant instead, the grants would have totaled roughly $384 million. If capped at $25,000, the grants would have totaled roughly $274 million. Finally, if capped at $10,000, the grants would have totaled roughly $110 million.", "If Congress authorizes a small business disaster grant program, it could consider capping the amount based on Section 408 of the Stafford Act, or some other amount. Congress may also decide to examine business recovery costs to ensure grant amounts are appropriate for business recovery needs."], "subsections": []}]}, {"section_title": "Business Disaster Grant Pilot Program", "paragraphs": ["One potential approach Congress could consider is creating a pilot program which could be used to evaluate the program's effectiveness and costs. This information could be used to help determine if the program should be made permanent. ", "For example, Congress established a Pre-Disaster Mitigation pilot program to be administered by SBA during fiscal years 2000 through 2004 ( P.L. 106-24 ). The program authorized SBA to issue low-interest (4% or less) fixed-rate loans of no more than $50,000 per year to small businesses to implement mitigation measures (such as relocating utilities, grading, and building retaining or sea walls) designed to protect the small business from future disaster-related damage. Congress could consider implementing a similar pilot program that would provide disaster grants to small businesses over a specified period of time.", "To some, a pilot program would be a more cautious approach to implementing a small business disaster grant program. If Congress determined that the grant program was too costly or ineffective, it could decide not to reauthorize the program. "], "subsections": []}, {"section_title": "Alternatives to a Disaster Grant Program", "paragraphs": ["Some may suggest that rather than providing small businesses with disaster grants, Congress could explore alternative methods for helping small businesses recover from a disaster. Some alternative methods include loan forgiveness, decreased disaster loan interest rates, and providing assistance to help businesses develop continuity and disaster response plans."], "subsections": [{"section_title": "Loan Forgiveness and Decreased Interest Rates", "paragraphs": ["Congress could consider authorizing loan forgiveness to businesses under certain circumstances. Loan forgiveness is rare, but has been used in the past to help businesses that were having difficulty repaying their loans. For example, loan forgiveness was granted after Hurricane Betsy, when President Lyndon B. Johnson signed the Southeast Hurricane Disaster Relief Act of 1965. Section 3 of the act authorized the SBA Administrator to grant disaster loan forgiveness or issue waivers for property lost or damaged in Florida, Louisiana, and Mississippi as a result of the hurricane. The act stated that", "to the extent such loss or damage is not compensated for by insurance or otherwise, (1) shall at the borrower's option on that part of any loan in excess of $500, (A) cancel up to $1,800 of the loan, or (B) waive interest due on the loan in a total amount of not more than $1,800 over a period not to exceed three years; and (2) may lend to a privately owned school, college, or university without regard to whether the required financial assistance is otherwise available from private sources, and may waive interest payments and defer principal payments on such a loan for the first three years of the term of the loan.", "Congress could also consider reducing interest rates for businesses under specific circumstances or for specific types of disasters. Interest rate ceilings for business physical disaster loans are statutorily set at 8% per annum or 4% per annum if the applicant is unable to obtain credit elsewhere. The interest rate ceiling for EIDL is 4% per annum. Interest floors have not been established in statute. ", "Providing relief to businesses through the use of reduced interest rates or loan forgiveness as opposed to grants may have the following advantages: (1) they could provide Congress with a flexible method to provide assistance to struggling businesses that can be applied on a case-by-case basis; (2) they would likely be less expensive than grants; and (3) they may reduce the possibility of duplication of benefits between grants and loans. ", "On the other hand, it could be argued that providing relief to businesses through reduced interest rates or loan forgiveness as opposed to grants may not provide timely assistance because providing relief on a case-by-case basis would require Congress to debate and pass legislation before the relief could be provided. There may also be concern this approach could be applied too arbitrarily. "], "subsections": []}, {"section_title": "Grants for Continuity and Disaster Response Plans", "paragraphs": ["Research indicates that many businesses do not have contingency or disaster recovery plans. For example, a survey of Certified Public Accounting (CPA) firms located on Staten Island, NY, indicated that only 7% of the respondents had a formal continuity or disaster recovery plan in place prior to Hurricane Sandy and nearly 42% of those firms that had a formal continuity or disaster recovery plan admitted that they never tested their plan. Approximately 40% had an informal plan that had been discussed but not documented. More than half of the responding firms did not have a contingency or disaster recovery plan. Of those that did not have any type of a plan, 60% thought the plans were unnecessary and 20% said that establishing a plan was too time-consuming. ", "Congress could investigate methods that would incentivize businesses to develop contingency and disaster recovery plans. This could be done through new programs or through existing ones such as FEMA's Ready Business Program which is designed to help businesses plan and prepare for disasters by providing businesses various online toolkits that can help them identify their risks and develop a plan to address those risks. Congress could also investigate the extent to which the Ready Business Program is collaborating with SBA's efforts to help businesses with emergency preparedness. ", "Similarly, Congress could consider the pros and cons of providing grants to businesses to help them plan and prepare for disasters. For example, providing grants for this purpose could be more expensive than mitigation loans, but cost less than a small business disaster grant program designed to assist businesses following a disaster. Advocates for mitigation grants could further argue that providing grants for mitigation rewards businesses that take the initiative to plan ahead for potential disasters and could reduce, as least to some extent, future costs. Opponents, on the other hand, might believe that existing mitigation programs are sufficient."], "subsections": []}]}]}, {"section_title": "Concluding Observations", "paragraphs": ["Congress has contemplated how to help businesses rebuild and recover from disasters for nearly a century. Historically, the federal policy for providing disaster assistance to businesses has primarily been limited to low-interest loans. While disaster loans have been instrumental in helping business recover from incidents, over the years Congress has considered whether grant assistance might be needed in addition to, or instead of business disaster loans. ", "Changing the federal government's disaster policy approach to businesses could be complex and require careful decisionmaking. Steps would need to be taken to avoid and remedy potential grant and loan duplication. Congress would also have to determine under what circumstances and situations the grant program would be put into effect. Eligibility requirements would need to be developed to determine under what situations and circumstances grants would be provided as well as what types of business should be eligible to receive grants. Similarly, Congress might consider whether grants could be used for rebuilding, mitigation, or economic loss, in addition to other recovery activities. In addition to these concerns and others, Congress may want to investigate the potential cost implications of a small business disaster grant program. ", "Alternatively, Congress could leave the current policy in place. Those advocating no change are generally supportive of the view that federal disaster assistance should be supplemental in nature and that private insurance and access to low-interest loans should remain the primary means of helping small businesses recover after a disaster."], "subsections": [{"section_title": "Appendix. Public Assistance and Individual Assistance Factors", "paragraphs": ["Public Assistance Factors", "Estimated Cost of the Assistance", "Estimated cost of assistance is perhaps the most important factor FEMA considers when evaluating whether a governor's or chief executive's request warrants PA because it is a strong indicator of whether 'the situation is of such severity and magnitude that an effective response is beyond the capacities of the State and affected local governments.\" FEMA generally relies on two thresholds to evaluate whether to recommend PA. The first threshold is $1 million in public infrastructure damages. This threshold is set \"in the belief that even the lowest population states can cover this level of public assistance damages.\"", "The second threshold used by FEMA is determined by multiplying the state's population (according to the most recent census) by a specified statewide per capita impact indicator\u2014currently $1.43. In general, FEMA will recommend a major disaster declaration that includes PA if public infrastructure damages exceed $1 million and meet or exceed $1.43 per capita. The underlying rationale for using a per capita threshold is that tax revenues that support a state's disaster response capacity should be sufficient if damages and costs fall under the per capita amount.", "Localized Impacts", "FEMA also considers impacts to localities (e.g., counties, parishes, boroughs). While capacity to respond to, and recover from, an incident are evaluated on the state level, PA and IA are provided only to the specific counties designated in a declaration. As specified in FEMA regulations", "The Assistant Administrator for the Disaster Assistance Directorate also has been delegated authority to designate the affected areas eligible for supplementary federal assistance under the Stafford Act. These designations shall be published in the Federal Register. An affected area designated by the Assistant Administrator for the Disaster Assistance Directorate includes all local government jurisdictions within its boundaries.", "To this end, FEMA uses a countywide per capita impact indicator of $3.61 per capita in infrastructure damage to assess localized impacts. In general, it is expected that a locality that meets or exceeds the $3.61 per capita threshold will be designated by FEMA for PA funding.", "Insurance Coverage", "Insurance coverage is considered in PA determinations when reviewing a governor's or tribal chief executive's request for major disaster assistance. As part of the assessment of disaster related damage, FEMA subtracts the amount of insurance coverage that is in force or that should have been in force as required by law and regulation at the time of the disaster from the total estimated eligible cost of PA for units of government and certain private nonprofit organizations.", "Hazard Mitigation", "FEMA encourages hazard mitigation efforts by considering how previous measures may have decreased the overall damages and costs following an incident. This could include rewarding states that have a statewide building code. If the requesting state can prove, by way of cost-benefit analyses or other related estimates, that its per capita amount of infrastructure damage falls short of the statewide per capita impact threshold due to mitigation efforts, FEMA will consider that favorably in its recommendation to the President. In these instances, FEMA may also consider whether the mitigation work has been principally financed with previous FEMA disaster assistance funding through the Hazard Mitigation Grant Program (HMGP), through the Pre-Disaster Mitigation (PDM) program, or by state or local resources.", "Recent Multiple Disasters", "If a state or tribal nation has suffered multiple disasters\u2014whether declared or not\u2014in the previous 12 months, FEMA considers the financial and human toll of those recent incidents in its consideration of whether to recommend PA. For example, if a state has responded on its own to a series of tornadoes, FEMA may consider a request for a declaration more favorably than they would have otherwise.", "Programs of Other Federal Assistance", "FEMA also considers whether other federal disaster assistance is available when reviewing a major disaster request. In some cases, other federal programs are arguably more suitable for addressing the types of damage caused by an incident. For example, damage to federal-aid roads and bridges are eligible for assistance under the Emergency Relief Program of the Federal Highway Administration (FHWA). Other federal programs may have more specific authority to respond to certain types of disasters, such as damage to agricultural areas. Assistance may also be provided under authorities separate from the Stafford Act with or without a Stafford Act declaration. For example, assistance for droughts is frequently provided through authorities of the U.S. Department of Agriculture (USDA) and the Secretary of Health and Human Services (HHS) can provide assistance to states in response to a public health threat without the President's involvement via Stafford Act authorities. ", "Individual Assistance Factors", "Concentration of Damages", "According to FEMA regulations, highly concentrated damages \"generally indicate a greater need for federal assistance than widespread and scattered damages throughout a state.\" The assumption that underlies this regulation is that the local support networks available to recover from an incident are increasingly undermined as more members of those local support networks become survivors of the incident. The dispersion of damage, however, is not necessarily an indication of total individual and household needs. Rural incidents, in particular, can be more difficult to assess because damages tend to be geographically less concentrated. As mentioned under the factors considered for PA, Congress has sought to address the challenges posed by rural incidents in receiving major disaster declarations and assistance packages.", "Trauma", "FEMA regulations cite three conditions that indicate a high degree of trauma to a community: (1) large numbers of injuries and deaths; (2) large-scale disruption of normal community functions and services; and (3) emergency needs such as extended or widespread loss of power or water.", "FEMA considers the trauma caused by injuries and loss of life in determining whether IA, or specific programs under IA, is warranted in an affected area. For IA-eligible medical and funeral expenses under Section 408 of the Stafford Act, this factor can carry some weight in making a determination. ", "Large-scale disruption of normal community functions and emergency needs such as extended or widespread loss of power or water are also indicative of trauma and are considered when evaluating a governor's or chief executive's request. Assessing these indicators can be problematic because they are not currently defined in law or regulation. Consequently, discretionary judgments are significant aspects of the evaluation of IA needs for large-scale disruptions of normal community functions and extended or widespread emergency needs.", "Special Populations", "FEMA considers the unique needs of certain demographic groups within an affected area when evaluating an IA request. These \"special populations\" include low-income and elderly populations, and American Indian and Alaskan Native tribal populations. Although special populations are a distinct factor in the consideration of a governor's or chief executive's request, special populations may also contribute to the overall number of IA-eligible households in an affected area.", "Voluntary Agency Assistance ", "As with PA, FEMA considers whether state, local, or tribal governments \"can meet the needs of disaster victims\" prior to offering supplemental assistance through IA. Additionally for IA, FEMA considers the extent to which voluntary agency assistance can meet those needs.", "Insurance", "Similar to insurance coverage of public and certain private, nonprofit facilities for PA, insurance coverage of private residences is an important consideration for IA. Per FEMA regulation, \"by law, federal disaster assistance cannot duplicate insurance coverage .\" Therefore, the calculation of IA-eligible losses must deduct those losses covered by insurance.", "FEMA assumes owner-occupied homes with a mortgage are insured against many natural disasters under their homeowner insurance policies. Under that assumption, FEMA uses census data to determine homeowner insurance penetration. Further, if the home is located in a flood - prone area then purchasing insurance for those disasters is often a legal requirement if the owner h as a federally-backed mortgage. FEMA administers the N ational F lood I nsurance P rogram (NFIP) which allows officials to more directly determine the status of flood insurance in communities and the number of policies in place in an affected area. ", "Average Amount of Individual Assistance by State", "FEMA compares the total IA cost estimate from the Preliminary Damage Assessment (PDA) to the average amount of individual assistance by state. More specifically, regulations published in 1999 include a table of the average amount of IA per disaster, by state population, from July 1994 to July 1999 (reproduced as Table A-1 ). FEMA stresses that these averages are not to be used as thresholds but rather as a guide that \"may prove useful to states and voluntary agencies as they develop plans and programs to meet the needs of disaster victims.\" It should be noted that some have questioned the relevance of this factor given the amounts have not been updated since 1999 and are based on 1990 census data."], "subsections": []}]}]}}
{"id": "R45425", "title": "Budget Issues That Shaped the 2018 Farm Bill", "released_date": "2019-02-28T00:00:00", "summary": ["The farm bill is an omnibus, multiyear law that governs an array of agricultural and food programs. The farm bill has typically undergone reauthorization about every five years. The current farm bill\u2014the Agriculture Improvement Act of 2018 (P.L. 115-334), often called the \"2018 farm bill\"\u2014was enacted in December 2018 and expires in 2023.", "The farm bill provides an opportunity for Congress to choose how much support, if any, to provide for various agriculture and nutrition programs and how to allocate it among competing constituencies. Under congressional budgeting rules, many programs are assumed to continue beyond the end of a farm bill. From a budgetary perspective, this provides a baseline for comparing future spending reauthorizations, reallocations to other programs, and reductions to projected spending. Since 2000, congressional goals for the farm bill's budget have varied: The 2002 farm bill increased spending over 10 years, the 2008 farm bill was essentially budget neutral, the 2014 farm bill reduced spending, and the 2018 farm bill is budget neutral, according to the Congressional Budget Office (CBO).", "The farm bill authorizes programs in two spending categories: mandatory spending and discretionary spending. Mandatory spending is not only authorized but also actually provided via budget enforcement rules. Discretionary spending may be authorized in a farm bill but is not actually provided until budget decisions are made in a future annual appropriations act.", "The CBO baseline is a projection at a particular point in time of future federal spending on mandatory programs under current law. When a new bill is proposed that would affect mandatory spending, the cost impact (score) is measured in relation to the baseline. Changes that increase spending relative to the baseline have a positive score; those that decrease spending relative to the baseline have a negative score. Federal budget rules such as \"PayGo\" may require budgetary offsets to balance new spending so that there is no increase in the federal deficit.", "The April 2018 CBO baseline was the official benchmark to measure changes made by the 2018 farm bill. The five-year baseline was $426 billion over FY2019-FY2023 (what the 2014 farm bill would have spent had it been continued). The budgetary impact of the 2018 farm bill is measured relative to that baseline. Among its impacts are these four points:", "1. The enacted farm bill increases net outlays in the first five years by $1.8 billion, which is offset by the same amount of net reductions in outlays during the second five years. Therefore, over 10 years, the net impact is budget neutral. 2. Eight titles in the enacted law have increased outlays over the five-year period, including Farm Commodities, Conservation, Trade, Nutrition, Research, Energy, Horticulture, and Miscellaneous. Two of those titles\u2014Conservation and Nutrition\u2014have reductions in the second five years of the budget window that make them budget neutral over 10 years. 3. Most of the budget reductions at the title level that provide offsets for the increases above, especially in the 10-year budget window, are from changes in the rural development title. 4. The 2018 farm bill provides continuing funding and, in some cases, permanent baseline, for 23 of the 39 so-called programs without baseline from the 2014 farm bill.", "Projected outlays for the 2018 farm bill at enactment are $428 billion over the FY2019-FY2023 five-year life of the act. The Nutrition title and its largest program, the Supplemental Nutrition Assistance Program (SNAP), account for $326 billion (76%) of those projected outlays. The remaining 24%, $102 billion, is for agricultural programs, mostly in crop insurance (8.9%), farm commodity programs (7.3%), and conservation (6.8%). Other titles of the farm bill account for 1% of the mandatory spending, some of which are funded primarily with discretionary spending.", "Historical trends in farm bill spending show increased SNAP outlays after the 2009 recession, increased crop insurance outlays based on insurable coverage, farm commodity programs outlays that vary inversely with markets, and steadily increasing conservation program outlays that have leveled off in recent years."], "reports": {"section_title": "", "paragraphs": ["T he farm bill is an omnibus, multiyear law that governs an array of agricultural and food programs. It provides an opportunity for Congress to choose how much support to provide for agriculture and nutrition and how to allocate it among competing constituencies. The farm bill has typically undergone reauthorization about every five years. The current farm bill\u2014the Agriculture Improvement Act of 2018 ( P.L. 115-334 , H.R. 2 ), often called the \"2018 farm bill\"\u2014was enacted in December 2018 and expires in 2023.", "From its beginning in the 1930s, farm bills have focused primarily on farm commodity programs to support a handful of staple commodities\u2014corn, soybeans, wheat, cotton, rice, dairy, and sugar. In recent decades, farm bills have expanded in scope to include a Nutrition title since 1973 and since then Conservation, Horticulture, Bioenergy, Credit, Research, and Rural Development titles. ", "Budget matters increasingly influence the development of the farm bill. While other reports discuss policy issues, this report focuses on the budgetary effects across the whole farm bill."], "subsections": [{"section_title": "Farm Bills from a Budget Perspective", "paragraphs": ["One way to compare the activities covered by a farm bill is by the allocation of federal spending and, more specifically, by how much is spent in total and how a new law changes allocations or policy. Congressional Budget Office (CBO) estimates are the official measures when bills are considered and are grounded in long-standing budget laws and rules."], "subsections": [{"section_title": "Recent Historical Perspective", "paragraphs": ["Recent farm bills have faced various budget situations, including spending more under a budget surplus, cutting spending for deficit reduction, and remaining budget neutral. For example", "The 2002 farm bill (the Farm Security and Rural Investment Act of 2002, P.L. 107-171 ) was enacted under a budget surplus that allowed it to make changes that were projected to increase spending by $73 billion, or 22%, over a 10-year budget window\u2014more than half of which was for the farm commodity programs. The 2008 farm bill (the Food, Conservation, and Energy Act of 2008, P.L. 110-246 ) was officially budget neutral, though it included $10 billion of offsets over 10 years from tax-related and other provisions that allowed it to increase spending on the Nutrition, Conservation, and Disaster titles. The 2014 farm bill (the Agricultural Act of 2014, P.L. 113-79 ) was enacted under deficit reduction and budget sequestration that influenced its legislative development. It made changes that projected a net reduction of $17 billion, or 1.7%, over 10 years ($23 billion including sequestration). The 2018 farm bill (the Agriculture Improvement Act of 2018, P.L. 115-334 ) was held to a budget-neutral position over its 10-year budget window. Some budget amounts were reallocated across programs within issue areas and across titles of the farm bill, as discussed throughout this report."], "subsections": []}, {"section_title": "Types of Spending Authorizations", "paragraphs": ["Generally, farm bills authorize spending in two categories: mandatory and discretionary. From a budgetary perspective, many of the larger programs are assumed to continue beyond the end of a farm bill, even though their authorizations to operate may expire. That projection for mandatory programs, as explained below, provides funding to reauthorize programs, reallocate funding to other programs, or take offsets for deficit reduction. For other programs, funding must come by other means. This includes new programs, those without baseline, or discretionary programs.", "The Supplemental Nutrition Assistance Program (SNAP) and crop insurance have their own mandatory spending sources, but most other mandatory outlays are paid through the U.S. Department of Agriculture's (USDA) Commodity Credit Corporation (CCC).", "Discretionary spending is authorized throughout the farm bill, including most rural development, credit, and research programs, among others. Some smaller research, bioenergy, and rural development programs are authorized to receive both mandatory and discretionary funding. Most agency operations (salaries and expenses) are financed with discretionary funds. Discretionary appropriations are made separately through an annual agriculture appropriations act.", "While both types of programs are significant, mandatory programs often dominate the farm bill debate. Therefore, the majority of this report focuses on mandatory spending"], "subsections": []}, {"section_title": "Summary of Projected Outlays in the 2018 Farm Bill", "paragraphs": [" Figure 1 illustrates the distribution of the $428 billion five-year total of projected mandatory outlays at enactment for the life of the 2018 farm bill (FY2019-FY2023). Figure 2 shows program-level detail for agriculture-specific programs, particularly the Farm Commodity and Conservation titles. Table 1 presents these outlays (the fifth and 10 th columns), and how budgetary resources were reallocated across titles of the farm bill, for both the five- and 10-year budget windows. The terms baseline and score are explained in later sections of this report.", "Mandatory spending is authorized throughout the farm bill, but four titles presently account for about 99% of the mandatory farm bill spending: Commodities (7.3%), Nutrition (76%), Crop Insurance (8.9%), and Conservation (6.8%). "], "subsections": []}]}, {"section_title": "Importance of Baseline to the Farm Bill", "paragraphs": ["The Congressional Budget Office (CBO) baseline is a projection at a particular point in time of future federal spending on mandatory programs under current law. The baseline is the benchmark against which proposed changes in law are measured. The CBO develops the budget baseline under various laws and follows the supervision of the House and Senate Budget Committees. ", "When a new bill is proposed that would affect mandatory spending, the score (cost impact) is measured in relation to the baseline. Changes that increase spending relative to the baseline have a positive score; those that decrease spending relative to the baseline have a negative score.", "Having a baseline essentially gives programs built-in future funding if policymakers decide that the programs should continue\u2014that is, straightforward reauthorization would not have a scoring effect (budget neutral). ", "Once a new law is passed, the projected outlays at enactment equal the baseline plus the score . This sum becomes the budget foundation of the new law."], "subsections": [{"section_title": "Development of the Baseline", "paragraphs": ["CBO periodically projects future government spending via its budget baselines, and evaluates proposed bills via scoring estimates. The baseline incorporates domestic and international economic conditions at the time the baseline is projected. ", "Generally, a program with estimated mandatory spending in the last year of its authorization may be assumed to continue in the baseline as if there were no change in policy and it did not expire. This is the situation for most of the major, long-standing farm bill provisions such as the farm commodity programs or supplemental nutrition assistance. However, some programs do not continue in the baseline beyond the end of a farm bill because they are either", "programs with estimated mandatory spending less than a minimum $50 million scoring threshold in the last year of the farm bill, or new programs established after 1997 for which the Budget Committees have determined that mandatory spending shall not extend beyond expiration. This decision may have been made in consultation with the Agriculture Committees for a number of reasons, such as to reduce the program's 10-year cost when a farm bill is written or to prevent the program from having a continuing baseline. ", "The 2014 farm bill had 39 programs without baseline beyond FY2018 that received $2.824 billion in mandatory funding over five years."], "subsections": []}, {"section_title": "CBO Baseline: April 2018", "paragraphs": ["The CBO baseline that was used to develop the 2018 farm bill was released in April 2018 (the first and sixth data columns in Table 1 ). It projected that if the 2014 farm bill were extended, as amended as of April 2018, farm bill programs would cost $426 billion over the next five years (FY2019-FY2023) and $867 billion over the next 10 years (FY2019-2028). ", "Most of the 10-year amount, 77%, was in the Nutrition title for the Supplemental Nutrition Assistance Program (SNAP). The remaining 23%, $203 billion baseline, was for agricultural programs, mostly in crop insurance, farm commodity programs, and conservation. Other titles of the farm bill contributed about 1% of the baseline, some of which are funded primarily with discretionary spending. Table 2 presents the April 2018 baseline by farm bill title with some program-level details for select titles. "], "subsections": []}]}, {"section_title": "Scores of the 2018 Farm Bill", "paragraphs": ["The CBO score measures the budgetary impact of changes made by the 2018 farm bill. It is measured relative to its benchmark\u2014the CBO baseline. Budget enforcement procedures follow an array of federal budget rules, such as \"PayGo,\" which required budgetary offsets to balance new spending to avoid increasing the federal deficit.", "Although the farm bill is a five-year authorization\u2014the 2018 farm bill covers FY2019-FY2023\u2014budget rules required it to be scored over a 10-year budget window. Thus, when the farm bill is discussed during legislative development, it may be more often presented by its effect over the 10-year budget window than the five-year duration of the law. Separately, statements about the total cost of the farm bill may be in terms of its five-year outlays (i.e., projected spending over the five-year life of the farm bill). Both can be accurate measures of the farm bill budget depending on the context.", "CBO released several interim scores of the 2018 farm bill during the various stages of its development. These include scores of the effects of the ", "House-introduced bill ( H.R. 2 ), House-reported bill ( H.R. 2 ), Senate-reported bill ( S. 3042 ), House-passed bill ( H.R. 2 ) and the Senate-passed Amendment to H.R. 2 (the second, third, seventh and eighth columns in Table 1 ; see also the more detailed section-level scores in Appendix A ), Conference agreement for H.R. 2 (the fourth and ninth columns in Table 1 ; see also the more detailed section-level scores in Table 3 ).", "Subsequent to the House-passed score, CBO released a more detailed assessment of the farm commodity program payment limit provisions in the House-passed bill. This score did not change the amounts but explained background for the score of those provisions in greater detail."], "subsections": [{"section_title": "Summary of Title-Level Scores", "paragraphs": [" Figure 3 shows the distribution of the title-level changes (scores) in the 2018 farm bill conference agreement and the House- and Senate-passed bills that preceded it. ", "Relative to the baseline, the overall score of the 2018 farm bill is budget neutral over a 10-year period. The House-passed bill would have decreased 10-year outlays by $1.8 billion, and the Senate-passed bill was budget neutral. ", "The overall relatively small or budget-neutral net scores are the result of sometimes relatively larger increases and reductions across titles. ", "Generally, the enacted farm bill follows the scoring approach of the Senate bill more closely than the House bill. In the new law, as in the Senate-passed bill, most of the reductions are from the Rural Development title. Six titles in the law have increased outlays over the 10-year period, including Commodities, Trade, Research, Energy, Horticulture, and Miscellaneous. The House-passed bill would have made 10-year reductions in outlays in the Conservation, Nutrition, Energy, and Crop Insurance titles that the conference agreement did not adopt."], "subsections": []}, {"section_title": "Net Increases in Five-Year Outlays Are Followed by Net Decreases", "paragraphs": ["When separated into the five- and 10-year budget windows, each version of the 2018 farm bill shows a similar pattern of changes in projected outlays. Figure 4 show the scores for the first five years, the second five years, and the 10-year total for the enacted conference agreement. ", "The enacted farm bill increases net outlays in the first five years by $1.8 billion, which is offset by the same amount of net reductions in outlays during the second five years. Therefore, the 10-year net score is budget neutral. In the enacted law, the Conservation and Nutrition titles\u2014which have increases in outlays over the first five years\u2014have decreases during the second five years. Both titles are budget-neutral over the 10-year period. This may occur because of the time needed to implement changes or to make provisions more appealing in the early years despite having less baseline for a future farm bill.", "A similar pattern held for the House-passed bill ( Figure 5 ) and the Senate-passed bill ( Figure 6 ). In both of those versions, the Conservation and Nutrition titles had increases in the first five years followed by decreases in the second five years. The House-passed bill had reductions in the Nutrition title that were not retained in the conference agreement. The Senate-passed bill would have reduced baseline for the Commodities title, whereas the conference agreement is projected to increase it."], "subsections": []}, {"section_title": "Section-by-Section Scores for Some Titles Exceed Their Net Scores", "paragraphs": ["Some of the net scores for single titles presented above are the net result of increases and decreases by provisions within the same title. Sometimes, these increases or decreases are relatively large compared to the net title-level effect. These budget effects may reflect policy proposals that may not be apparent in the net title-level scores that are shown in the previous figures. For example", "In the enacted law, the Conservation title has one section with a $12.4 billion reduction over 10 years (reducing the Conservation Stewardship Program) and seven sections that add to $12.4 billion in increased spending ( Figure 7 ). In the House-passed bill, the Nutrition title had six sections that summed to a $22.0 billion reduction over 10 years (including those for work requirements) and 18 sections that added to $20.6 billion in increased spending. Similarly, the Conservation title had two sections that summed to a $12.6 billion reduction and eight sections that added to $11.8 billion in increased spending ( Figure 8 ). In the Senate-passed bill, none of the titles' section-by-section scores were as large as for the Nutrition and Conservation titles in the House bill. Nonetheless, the section-by-section scores of the Senate-passed bill showed both increases and decreases in the Conservation, Nutrition, Commodities and Miscellaneous titles ( Figure 9 ). "], "subsections": []}, {"section_title": "Outcome for the Programs Without Baseline", "paragraphs": ["For 23 of the 39 of the \"programs without baseline\" from the 2014 farm bill, the 2018 farm bill provides continuing funding and, in some cases, permanent baseline for future farm bills (see the footnotes in Table 3 ).", "Fourteen of the programs without baseline received mandatory funding during FY2019-FY2023 but no baseline beyond the end of the farm bill. Nine of the programs without baseline received mandatory funding and permanent baseline beyond the end of the farm bill. Three of these programs were combined with six others into six provisions in the 2018 farm bill.", "In addition, five provisions in the 2018 farm bill created new programs without baseline for the next farm bill."], "subsections": []}]}, {"section_title": "Projected Outlays at Enactment", "paragraphs": ["When a new law is passed, the projected cost at enactment equals the baseline plus the score . This sum becomes the foundation of the new law and may be compared to future CBO baselines as an indicator of how actual costs develop as the law is implemented and conditions change.", " Table 4 shows the result of this calculation by updating the farm bill baseline ( Table 2 ) by adding the score for programs that were changed by the farm bill ( Table 3 ). The $428 billion projected five-year total for the life of the 2018 farm bill (FY2019-FY2023) is illustrated in Figure 1 . Agriculture program-level detail is illustrated in Figure 2 .", " Table 1 summarizes these amounts by title for the five- and 10-year budget windows (the fifth and 10 th columns). SNAP accounts for 76% of the $428 billion five-year total. The remaining 24%, $102 billion of projected outlays, is for agricultural programs, mostly in crop insurance (8.9%), farm commodity programs (7.3%), and conservation (6.8%).", "Relative to historical farm bill spending, Figure 10 shows mandatory outlays for the four largest titles\u2014Nutrition, Crop Insurance, Farm Commodity Programs, and Conservation\u2014that account for 99% of projected spending in the 2018 farm bill. The figure shows the following trends:", "SNAP outlays, which compose most of the Nutrition title, increased markedly after the recession in 2009 and have been gradually decreasing since 2012. Crop insurance outlays increased steadily over the period, especially as higher market prices and program participation over the past decade have raised the value of insurable commodities. Farm commodity programs outlays generally rise and fall inversely with commodity markets. They were high after losses in the early 2000s, generally trended lower under the direct payment program, and tended to increase after a return to counter-cyclical programs in the 2014 farm bill. Conservation program outlays have grown steadily but have leveled off in recent years.", "Appendix A. Scores of House-Passed and Senate-Passed Versions of H.R. 2", "Appendix B. Discretionary Authorizations", "In addition to providing mandatory spending, various sections of the farm bill authorize appropriations that may be provided in future discretionary appropriations acts. Such \"authorizations for appropriation\" are not actual funding but are essentially an indication from the authorizing committees to the appropriations committees about funding intentions. They are subject to budget enforcement via future appropriations bills.", "Although the score of the farm bill is primarily about mandatory spending, some CBO scoring documents include an estimate of the discretionary spending that would be needed to implement provisions that have authorizations of appropriations.", "The CBO score of the conference agreement did not address discretionary authorizations. However, earlier CBO scores of the House- and Senate-passed bills did summarize the authorizations for appropriation. Overall, the similarity between the scores of these bills may be an indicator of the authorization levels in the enacted farm bill.", "For the House-passed version of the farm bill, CBO estimated that implementing the provisions of H.R. 2 that specified authorizations of appropriations would cost $24.5 billion over the five-year period FY2019-FY2023, assuming appropriation of the specified amounts. For the Senate-passed version, the amount was slightly smaller at $23.7 billion. These projections were for the whole bill and not by title. However, the earlier committee-reported scores did estimate the authorizations by title, as shown in Table B-1 . Because the totals of the chamber-passed versions remain nearly the same as the committee-reported totals, the earlier title-level estimates may be indicative of the conference agreement.", "Three titles account for about 85% of the discretionary authorizations for appropriation in the House and Senate committee-reported farm bill scores: Trade, Research, and Rural Development ( Table B-1 ). ", "Actual funding in annual Agriculture appropriations acts does not necessarily correlate to the authorization for appropriation in the farm bill. The annual authorization for appropriation provided in the 2018 farm bill is between $2 billion and $6 billion ( Table B-1 ), which for this comparison is broadly similar to nearly $7 billion in authorizations for appropriation that were in the 2014 farm bill. However, actual discretionary funding in recent Agricultural appropriations acts total in excess of $20 billion. ", "The difference is because not all of the actual appropriations have their authorization in each farm bill. For example, the Agriculture appropriations act includes funding for salaries and expenses of USDA agencies that may be permanently authorized or is not necessarily reauthorized in the farm bill. Also, jurisdiction for appropriations acts may include agencies or programs that are not in the jurisdiction of the farm bill authorizing committees (such as the roughly $6 billion appropriation for the Special Supplemental Nutrition Assistance Program for Women, Infants, and Children that is not in House Agriculture Committee jurisdiction)."], "subsections": []}]}}
{"id": "R45463", "title": "Economics of Federal User Fees", "released_date": "2019-01-22T00:00:00", "summary": ["The federal government collects various fees from businesses and households. Choosing to raise public funds via user fees, as opposed to other means such as taxes, has important administrative and economic consequences. Many fees stem from \"business-like activities,\" in which the government provides a service or benefit in return for payment. For example, many national parks charge entry fees, which then help fund maintenance projects. Such fees and charges that result from voluntary choices, such as entering a national park, are distinguished from taxes\u2014which stem from the government's sovereign power to compel payments. The Government Accountability Office (GAO) defines a user fee as a \"fee assessed to users for goods or services provided by the federal government. User fees generally apply to federal programs or activities that provide special benefits to identifiable recipients above and beyond what is normally available to the public.\"", "User fees and charges have several advantages as a means of financing public activities. They are voluntary, they connect the burden of financing activities to those who directly benefit from them, and can help decentralize decisionmaking by bypassing centralized allocation of resources. Some have expressed concerns that user fee arrangements may bypass regular congressional scrutiny and dilute Congress's power of the purse. Collections of fees and charges may also be more sensitive to economic fluctuations, which could complicate financing of programs dependent on those revenue streams.", "Many user fees or charges are classified as offsetting collections, which are deposited into expenditure accounts. Offsetting collections can be used to offset agency spending and typically require no further congressional approval to use. Other fees and charges are classified as offsetting receipts, which are collected into revenue accounts and typically require congressional authorization to be spent. User fees and charges can be classified as discretionary or mandatory spending, depending on how they are legally authorized. The levels and administration of some fees are specified in detailed statutory text, while other fees are created under broader agency authorities. Certain agencies, such as the Food and Drug Administration (FDA), have increased their reliance on user fees in past decades. Some critics have raised concerns that increased reliance on user fees could shift incentives facing those agencies.", "Some legislative proposals, such as H.R. 850 introduced in the 115th Congress, would limit or eliminate most exceptions and require most fees and charges to be deposited in the U.S. Treasury General Fund. Congress could fund agencies and activities now funded in whole or in part via user fees directly through the annual appropriations process. Such proposals would mark a departure from past practice. Statutory text governing many fees has evolved over many years and involves substantive policy decisions, often related to the industry or programmatic concerns. A general change in funding from user fees and charges to annual appropriations would likely shift the division of responsibilities between authorizing committees and appropriations committees.", "Congress may also enhance its oversight of agencies reliant on user fees by requiring more timely and detailed financial reports as well as more precise and systematic explanations of linkages between those fees and associated programs. Congress could also ask for greater transparency in fiscal data. While the Office of Management and Budget (OMB) and the U.S. Treasury Bureau of the Fiscal Service provide extensive data on user fees and charges, it is difficult to conduct governmentwide analyses using publicly available sources. Congress could mandate more detailed and more easily accessed data on user fees and charges. Additional funding may be needed to develop the capacity to issue those data."], "reports": {"section_title": "", "paragraphs": ["T he federal government collects various fees and other charges from businesses and households. Choosing to raise public funds via user fees, as opposed to other means such as taxes, has important administrative and economic consequences. Many fees stem from \"business-like activities,\" in which the government provides a service or benefit in return for payment. For example, many n ational p arks charge entry fees , which then help fund maintenance projects. Some fees are closely tied to regulatory or judicial activities, such as filing or inspection fees, which stem from the federal government's sovereign powers. Other federal fees or charges are intragovernmental transactions that do not involve the public. For example, the Office of Personnel Management (OPM) charges other federal agencies fees to cover the cost of background investigations.", "For many federal agencies, fees or user charges amount to a minimal portion of budgetary resources. Other regulatory agencies, such as the Securities and Exchange Commission (SEC), the Federal Energy Regulatory Commission (FERC), the Patent and Trademark Office (PTO), and the Federal Trade Commission (FTC), are wholly or partially funded by user fees and other nontax receipts. User fees from the public accounted for $331 billion in FY2017, about a tenth of total federal receipts ( $3.32 trillion ).", "Fees and charges generally result from voluntary choices, such as entering a national park. By contrast, the collection of taxes ultimately relies on the government's sovereign power to compel payments. Fees may not be compulsory, but not paying them may make it impossible to carry out many activities legally. For instance, without paying passport application fees and obtaining a passport, people cannot fly to other countries. Nor can businesses issue securities without paying federal filing fees.", "The statutory basis for each particular fee or user charge varies in specificity and in the degree of discretion granted to the executive branch. For example, authorizing legislation might specify in detail how certain fees are imposed and how proceeds are used. In other cases, federal agencies rely on broader authorities to impose user fees.", "User fees have several advantages as a means of financing public activities. They are voluntary, they connect the burden of financing activities to those who directly benefit from them, and they can help decentralize decisionmaking by bypassing centralized allocation of resources. At times, proposals to raise fees may encounter less political resistance than proposals to raise an equivalent sum via taxes. On the other hand, the flow of user fees and charges may reflect fluctuations in economic conditions, which may complicate the financing of government operations. Some are also concerned that funding arrangements may bypass regular congressional scrutiny and dilute Congress's power of the purse. "], "subsections": [{"section_title": "What Is a User Fee or User Charge?", "paragraphs": ["The Government Accountability Office (GAO) defines a user fee as a ", "fee assessed to users for goods or services provided by the federal government. User fees generally apply to federal programs or activities that provide special benefits to identifiable recipients above and beyond what is normally available to the public.", "The Office of Management and Budget (OMB) defines the term user charge to include transactions not normally considered fees, such as land or asset sales. OMB's budget preparation documents state that user charges include not only proceeds from selling postage stamps, electricity, and Medicare Part B premiums, but also sales of assets and natural resources, among other categories.", "The federal government, which operates on a modified cash accounting basis, does not recognize in its budgetary accounts the loss of asset values when it sells assets or natural resources, as a private firm would using typical business accounting methods. For instance, if the government were to sell oil at a price of $60 per barrel that it bought at $120 per barrel, only the current revenues would be reflected in budget accounts. A private firm would normally adjust its balance sheet to reflect a loss. ", "OMB designates whether each account receives collections associated with user charges, and that information is contained within OMB's MAX budget data system. OMB has not released data on those designations. The Budget Appendix that OMB issues annually, while not including information on that designation, does present detailed subaccount-level data that often indicate whether a federal program's budgetary resources rely on fee income. The format of the Budget Appendix, however, makes it an impractical source of data for government-wide research.", "As far as CRS can determine, a comprehensive and authoritative list of federal fees is not publicly available. Budget and financial documents from OMB and the U.S. Treasury, however, do provide detailed information on offsetting collections and offsetting receipts\u2014the budget categories that typically contain user fees and other charges\u2014as well as information on budgetary accounts. In some cases, account descriptions clearly indicate an association with one or more fees. In other cases, however, whether or not an account receives fees is unclear. For example, an account might be labeled as miscellaneous receipts, or as fines, fees, and penalties."], "subsections": [{"section_title": "Offsetting Collections and Offsetting Receipts", "paragraphs": ["User fees classified as offsetting collections, which go into expenditure accounts, generally can be used without further congressional action. Offsetting collections, as the term suggests, typically count as offsets to spending when accounts are scored to check compliance with various budgetary controls. Scorekeeping is the process of measuring the budgetary effects of legislation. For example, the Budget Control Act of 2011 ( P.L. 112-25 ) imposed caps on specified categories of discretionary budget authority. When evaluating compliance with those caps, scorekeepers (CBO, OMB, and the b udget c ommittees) subtract offsetting collections from budget authority totals.", "User fees or charges are collected into the U.S. Treasury General Fund or into special fund accounts. Offsetting receipts, which go into receipt accounts, typically require approval through appropriations acts. User fees can be classified as discretionary or mandatory spending, depending on how those fees are authorized. ", "Some payments to the federal government, such as electromagnetic spectrum auction proceeds or offshore continental shelf oil and gas leases that are classified as undistributed offsetting receipts, do not offset spending of any agency, but are recorded as reducing the federal deficit."], "subsections": []}, {"section_title": "Data Sources and Federal Analyses of User Fees and Charges", "paragraphs": ["OMB provides a discussion of budget concepts related to offsetting receipts and offsetting collections, which include the bulk of user fees and charges in terms of dollar amounts, in the President's annual budget submission. More detailed supplementary tables that summarize collections of offsetting receipts and offsetting collections are also provided online. ", "The U.S. Treasury's Bureau of the Fiscal Service issues its annual Combined Statement that reports budget data for all federal agencies at an account level as well as detailed summaries of receipts, including user fees. The Monthly Treasury Statement and a quarterly statement of offsetting receipts provide data on an ongoing basis. As the Treasury's role and responsibilities differ from those of OMB, totals from Treasury sources may not coincide with data issued by OMB due to various budgetary reporting adjustments. ", "GAO has analyzed the administration of various user fees and has set out some principles for the design of those fees ."], "subsections": []}]}, {"section_title": "The Benefit Principle", "paragraphs": ["User fees, as noted above, can tie benefits enjoyed by households or firms\u2014such as passports, access to national parks, or approvals to raise investment funds from the public\u2014to payments that can help defray public costs of providing them. An economist's rule of thumb known as the benefit principle, which suggests linking the fiscal burden of publicly provided benefits to those who enjoy those benefits, can promote fairness and efficiency. For example, many would contend that those with the opportunity to travel abroad should shoulder more of the costs of reviewing passport applications and issuing documents than those who do not. Moreover, if fees are set at levels that match the incremental cost of providing benefits, then when an agency is called to expand its work\u2014such as an uptick in demand for passports, park visits, or company registrations\u2014then those fees could fund the needed extra resources. Matching fees to incremental costs, however, is difficult where demand is irregular or unpredictable.", "OMB guidelines on user fees outline aims similar to the benefit principle, mandating that federal agencies ", "ensure that each service, sale, or use of Government goods or resources provided by an agency to specific recipients be self-sustaining; promote efficient allocation of the Nation's resources by establishing charges for special benefits provided to the recipient that are at least as great as costs to the Government of providing the special benefits; and allow the private sector to compete with the Government without disadvantage in supplying comparable services, resources, or goods where appropriate.", "OMB mandates that agencies review user fees every other year. OMB also encourages agencies seeking new authority to assess fees to \"seek to remove restraints on user charges.\"", "In some cases, federal agencies and regulated industries negotiate over user fee levels and the improvements in federal regulatory operations supported in large part by those fees. For instance, pharmaceutical companies negotiate with the Food and Drug Administration (FDA) over fees charged to review drug applications. Over time, the scope of FDA activities supported in part by fees has expanded. Some contend that the FDA's increasing reliance on user fees has tilted the agency's priorities toward industry interests and away from consumer protection responsibilities. One 2005 analysis of the FDA drug review process found that approval times decreased after legislation expanded the agency's reliance on user fees, while it found no statistically significant evidence of a decrease in one proxy measure of drug safety.", "Federal agencies such as the Federal Energy Regulatory Commission (FERC) and the Nuclear Regulatory Commission (NRC) are largely supported from amounts paid by covered industries."], "subsections": [{"section_title": "Matching Charges to Spillover Costs Can Enhance Efficiency", "paragraphs": ["The costs and benefits associated with many goods and services mainly involve buyers and sellers. For example, buying a stamp allows a correspondent to mail a letter, which leads the postal service to incur roughly similar costs. Others\u2014at least to a first approximation\u2014are not affected. For other goods, market or market-like transactions may impose costs or convey benefits on third parties. When prices paid by buyers or received by sellers do not reflect spillover costs or benefits to others, economic theory suggests levels of transactions will be inefficient, in the sense that alternative economic arrangements could make all participants\u2014at least potentially\u2014better off."], "subsections": []}, {"section_title": "Logic of Pigou Taxation May Apply to Design of User Fees and Charges", "paragraphs": ["The benefit principle is in some ways similar to the concept of Pigou taxation\u2014that taxing goods linked to negative spillovers, such as pollution, can enhance economic efficiency by diminishing those spillovers. More generally, spillovers are costs borne or benefits enjoyed by one party due to activities of another party where no voluntary exchange or market transaction occurs. Conversely, subsidizing goods or services that provide beneficial spillovers can also increase economic efficiency. For instance, some justify federal tax subsidies to home ownership on the grounds that homeowners generate positive spillovers in their neighborhoods.", "Charges aimed at limiting negative spillovers are known as Pigou taxes, after the English economist who first articulated the concept. Pigou taxation provides a more narrowly based efficiency rationale for user fees that would limit negative spillovers. Moreover, administering an excise tax imposed on Pigou tax grounds\u2014which would involve a private vendor collecting and remitting tax revenues\u2014differs from user fees and charges collected directly by a government. ", "Nonetheless, the same logic that raising the end-user price of goods linked to negative spillovers can enhance economic efficiency can be applied to the design of user fees. For instance, federal policymakers might choose to charge pharmaceutical companies application fees lower than the full cost of associated approval processes because introducing new drugs onto the market may have wider positive social benefits."], "subsections": []}, {"section_title": "Spillover Benefits Complicate Application of Benefit Principle", "paragraphs": ["The economic suitability of the benefit principle depends on whether the publicly provided benefit has meaningful spillover effects. For example, benefits generated by governments such as national defense or support for basic research are widely shared and thus, arguably, are appropriately supported by general taxation. By contrast, while the broader economy benefits from the ability of firms to raise capital in transparent and competitive markets, the chief beneficiary of having a security offering approved is the issuing firm. Similarly, a family visiting a federal park presumably benefits more than another family that stayed at home. Financing more of park maintenance through general taxation would thus involve an implicit subsidy from nonusers to users, something that reliance on user fees would mitigate. In other cases, the linkage between fees and benefits is not apparent. For example, a 2009 law ( Travel Promotion Act of 2009 , TPA; P.L. 111-145 ) imposed a $10 fee on most international air travelers from visa-waiver countries to fund tourism marketing initiatives .", "An exact match between the level of user fees and publicly provided benefits may be hard or impossible to determine in many situations. While public corporations operating on a largely commercial basis, such as the Tennessee Valley Authority, may set prices and fees much as a private firm would, many of the federal government's activities are within the public sector because past policymakers considered them to be closely associated with inherently governmental functions\u2014such as providing security\u2014or as services that the private sector would have had trouble providing, such as basic research. The U.S. Postal Service sets rates to cover nearly all of its costs according to a 2006 statutory framework . Subsidized rates for certain classes of mail users, such as the blind, reflect adaptation of pricing schemes to broader social priorities. The proper boundaries between public, private, and nonprofit sectors, of course, is an ongoing concern of policymakers. ", "In many cases, it is difficult to design fees, charges, or taxes that directly influence activities generating negative spillovers. For instance, cars and trucks generate air pollution as well as wear and tear on roadways. Excise taxes on gasoline and other fuels\u2014if set at levels that approximate the costs of pollution and road wear\u2014can motivate drivers to use roads less often when the total costs of driving, including pollution, road wear, and other costs, exceed the benefits of driving. Thus, excise taxes can be a way of using the price mechanism to induce individuals to make decisions that lead to more economically efficient outcomes. Setting excise taxes at levels that reflect all costs to third parties may involve complex estimates. For instance, while higher fuel usage implies greater use of roads and more production of air pollutants, several other factors complicate that linkage. Heavier vehicles may cause disproportionate damage to roads. Vehicles vary widely in fuel efficiency and in the volume of pollutants generated. In addition, driving also imposes congestion costs on other drivers, and those costs vary by location and time of day. One recent analysis estimated that fuel excise taxes addressed less than a third of the air-pollution-related efficiency losses. ", "While excise taxes are a public finance instrument that is distinct from user fees and charges, similar complications may be encountered. In some cases, adopting new fiscal instruments\u2014such as using road charges or tolls\u2014may prove more effective tools in increasing efficiency. In the case of transportation policy, increased economic efficiency, depending on how consumers and policymakers respond, might manifest itself in some combination of higher after-tax incomes, greater provision of publicly provided goods, cleaner air, and less-congested highways. Changes in the design of some user fees or charges might also yield analogous efficiency improvements."], "subsections": []}, {"section_title": "Other Policy Concerns", "paragraphs": ["Some observers have raised concerns that federal agencies that rely more heavily on user fees may put greater weight on the interests of those paying fees rather than the broader public interest. For instance, the U.S. Patent and Trademark Office charges application and examination fees to those seeking to obtain a patent. Certainly, the applicant would be a central beneficiary of a patent, if granted, although many others\u2014including other inventors, business competitors, and consumers\u2014might also be significantly harmed or benefited. Some contend that the Patent Office's reliance on fees motivates it to approve invalid patents . Tying patent fees narrowly to the benefits obtained by the applicant, while overlooking wider spillover effects, might then result in poor decisions. Of course, nonfinancial policy instruments, such as applicable laws, regulations, or congressional oversight, may affect outcomes more directly.", "Administrative concerns may also play a role. In some cases, where the costs of collecting fees are high relative to the costs of providing public services, imposing user fees may be a suboptimal choice of funding. For instance, federal courts collect more in PACER fees (which provide access to court documents ) than is needed to maintain the underlying computer system , with excess fees being earmarked for other court improvements. Some argue that funding that system and other court improvements with general revenues would allow broader access to court filings and related public documents, which one proposal ( H.R. 6714 introduced in the 115 th Congress ) would have implemented. Charging access fees above incremental costs\u2014which for electronic documents may be minimal\u2014can limit access to public information. Eliminating PACER user fees , however, may require Congress to shift that fiscal burden elsewhere.", "Other policy concerns also may play a role. Ability to pay among households varies widely; a national park entrance fee that one family regarded as trivial might deter another family. Policymakers may also wish to express preferences for identifiable groups, such as the elderly, children, or veterans.", "The classification of fees, charges, taxes, and even negative loan subsidy amounts hinges on budget concepts outlined above along with scorekeeping rules and precedents. In some cases, the distinctions made to categorize a given receipt might seem arbitrary to some. For example, the Travel Promotion Act fees imposed on most international air travelers convey n o special benefit on them, but are not categorized a s tax es . Refundable biofuel tax credits are counted as negative taxes in budget documents rather than as subsidy outlays. Those distinctions, however, can affect the tax treatment of those receipts. For instance, a firm can generally deduct an excise tax from its gross revenues, but typically cannot deduct a fee.", "Some governments have instituted user fees to fill shortfalls in tax revenues. The economic burden of higher fees or charges might be less obvious and therefore subject to less resistance than broad-based taxes. For example, policymakers in several states have sought to avoid increases in general taxes by increasing fee revenues. That strategy may have two downsides. First, more narrowly focused fees set at higher levels could cause greater economic distortions than smaller taxes applied to a broader base. Second, more narrowly based fees might be less stable in economic downturns. To the extent that fees diverge from the incremental costs of publicly provided services, sudden fiscal adjustments might be required."], "subsections": []}, {"section_title": "Is Privatization an Option?", "paragraphs": ["If benefits from federal operations are distributed narrowly enough to justify financing them via user fees or charges, one might ask whether those activities should be carried out by the private sector. State and local governments and the federal government have privatized many services previously provided by government. Foreign governments have also privatized provision of goods and services once delivered by the public sector. Some activities, however, may involve inherently governmental responsibilities that would be difficult to devolve to the private sector. A 1997 GAO report noted that rigorous evaluations of cost savings of privatization initiatives at the state and local government level were not common. GAO also noted that privatization increased the need for oversight and evaluation, although some local officials deemed that the \"weakest link\" in privatization initiatives. Others note that while privatization may yield efficiency gains, it may also lead to policy or operational failure."], "subsections": []}]}, {"section_title": "User Fees and the Power of the Purse", "paragraphs": ["Conflicts between executive branch agencies, which often have sought greater flexibility to use funds to respond to public priorities as they see them, and Congress, which has sought to defend its fiscal prerogatives and ability to set federal policy priorities, are long-standing. "], "subsections": [{"section_title": "The Miscellaneous Receipts Act", "paragraphs": ["In 1849, Congress sought to bolster its powers of the purse by passing the Miscellaneous Receipts Act , which required all government revenues, aside from postal sales, to be deposited into the U.S. Treasury \"at as early a day as practicable, without any abatement or deduction on account of salary, fees, costs, charges, expenses, or claim of any description whatever\u2026\" Over time, Congress set out exceptions to the modern version of the Miscellaneous Receipts Act that let agencies charge user fees, accept gifts, and collect and retain fines and penalties within specified limits or as detailed in appropriations laws."], "subsections": []}, {"section_title": "Recent Proposals on User Fees and Charges", "paragraphs": ["Some legislative proposals, such as H.R. 850 (115 th Congress) , would eliminate most exceptions and require most fees and charges to be deposited in the U.S. Treasury General Fund. Congress could fund agencies and activities directly through annual appropriations. Funding through lump-sum appropriations, as opposed to via user fees, however, might change incentives facing decisionmakers and could affect federal operations and programmatic outcomes."], "subsections": []}]}, {"section_title": "Issues and Options for Congress", "paragraphs": [], "subsections": [{"section_title": "Congressional Oversight and Control of the Federal Purse", "paragraphs": ["Congress could constrain agency discretion by requiring more user fee proceeds be either subject to annual appropriations or deposited in the U.S. Treasury General Fund, although that may limit agencies' capacity to respond to new public demands and other changing conditions, as the Government Accountability Office (GAO) has noted . Some inspectors general and congressional committees have also called for tighter, more efficient, and more consistent financial management of user fee funds. During the mid-1980s, Congress, with GAO support, conducted a comprehensive review of so-called \"backdoor spending\"\u2014an informal term for budget authority provided in laws other than appropriations acts\u2014including spending supported by user fees, which was updated in 1996 . A narrower follow-up in 2017 covering five agencies concluded that \"all entities GAO examined have policies and procedures to manage and report on their permanent funding authorities,\" but that \"some, however, could improve practices to manage funds and report information that facilitates oversight.\"", "Sweeping changes to the budgetary treatment of user fees, however, could add new pressures on the congressional appropriations process. Proposals to require that most fees be collected into the Treasury General Fund and that activities previously supported by those fees be funded by annual appropriations could create new demands on appropriations committees. Such proposals could also affect the division of responsibilities among authorizing committees and appropriations committees. Statutory texts governing many fees, including those noted above, have evolved over many years and involve substantive policy decisions, often related to industry or programmatic concerns. Congress may also enhance its oversight of agencies reliant on user fees by requiring more timely and detailed financial reports as well as more precise and systematic explanations of linkages between those fees and associated programs."], "subsections": []}, {"section_title": "Transparency", "paragraphs": ["OMB and Treasury issue extensive information on user fees and charges. Nonetheless, the format and level of detail of published data make it difficult to address some government-wide policy questions regarding user fees and charges. Congress could modify laws governing the President's budget submission (31 U.S.C. 1105) to require OMB to release data that it collects on which budget accounts receive material amounts of user fee and user charge revenues. That could allow Congress to track and analyze user fees and charges more easily. In particular, it would also provide a means to distinguish discretionary and mandatory fees and charges, which could be useful in understanding the effects or constraints imposed by budget enforcement measures. That might provide Congress with a clearer view of its fiscal options when considering budgetary measures. Mandating that OMB or other agencies provide more data would probably require additional budgetary resources to cover costs of new personnel and capabilities."], "subsections": []}, {"section_title": "Broader Policies Regarding User Fees and Charges", "paragraphs": ["Congress can promote economic efficiency and an equitable sharing of public burdens by choosing appropriate means of financing federal operations. User fees and charges, as noted above, can help tie the costs of supporting specific federal operations with those who benefit from them. Even if closely regulated industries may find federal requirements, inspections, or approval processes burdensome, they also presumably benefit from the increased demand for their products that carry the imprimatur of explicit or implicit federal approval. Federal regulation and inspection operations, however, also serve broader interests of consumers, taxpayers, and related industries. To the extent that inherently governmental responsibilities motivate federal operations, the argument for using general revenues may be stronger. If benefits of federal actions are more narrowly distributed, the case for financing operations with user fees or charges may become stronger. Of course, the structure and administration of federal inspection and regulation plays a central role in enhancing efficiency and minimizing burdens borne relative to benefits enjoyed."], "subsections": []}]}]}}
{"id": "R45712", "title": "FY2018 and FY2019 Agriculture Appropriations: International Food Aid", "released_date": "2019-05-08T00:00:00", "summary": ["The Agriculture appropriations bill\u2014formally known as the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act\u2014funds the U.S. Department of Agriculture (USDA) except for the Forest Service. This includes funding for certain U.S. international food aid programs.", "In March 2018, President Trump signed the Consolidated Appropriations Act, 2018 (P.L. 115-141), an omnibus appropriations act for FY2018, into law. In February 2019, President Trump signed the Consolidated Appropriations Act, 2019 (P.L. 116-6), an omnibus appropriations act for FY2019, into law. The FY2018 and FY2019 Agriculture Appropriations Acts\u2014Division A of P.L. 115-141 and Division B of P.L. 116-6, respectively\u2014include funding for certain U.S. international food aid programs, such as the Food for Peace (FFP) Title II Program and the McGovern-Dole International Food for Education and Child Nutrition Program. Other international food aid programs receive mandatory funding and do not rely on discretionary funding provided through annual appropriations. Congress authorizes discretionary and mandatory funding levels for international food aid programs in periodic farm bills, most recently the Agriculture Improvement Act of 2018 (P.L. 115-334).", "This analysis covers appropriations for U.S. international food aid programs that Congress funds through agriculture appropriations bills. It does not cover appropriations for international food assistance or agricultural development programs that Congress funds in State, Foreign Operations, and Related Programs (SFOPS) appropriations bills, such as the Emergency Food Security Program (EFSP) or the Feed the Future Program.", "In FY2018, Congress provided a total of $1.924 billion in funding for U.S. international food aid programs, a 7% increase from the $1.802 billion provided in FY2017. In FY2019, Congress provided $1.942 billion in funding for U.S. international food aid programs, a 1% increase from FY2018 enacted levels.", "In addition to providing funding for U.S. international food aid programs, agriculture appropriations bills may also include policy-related provisions that direct how the executive branch should carry out certain appropriations. The FY2018 and FY2019 Agriculture Appropriations Acts, as well as House and Senate Agriculture appropriations bills for those fiscal years, include policy provisions related to international food aid programs. For example, one provision directs that a certain amount of the funds appropriated for the McGovern-Dole Program be used to provide locally and regionally procured food assistance\u2014food assistance purchased in the country or region where it is to be distributed rather than in the United States."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The U.S. government administers multiple international food assistance programs that aim to alleviate hunger and improve food security in other countries. Some of these programs provide emergency assistance to people affected by conflict or natural disaster. Other programs provide nonemergency assistance to address chronic poverty and hunger, such as providing food to people during a seasonal food shortage or training parents and community health workers in nutrition. ", "Current international food assistance programs originated in 1954 with the passage of the Food for Peace Act (P.L. 83-480), also referred to as P.L. 480 . Historically, the United States has provided international food assistance primarily through in-kind a id , which ships U.S. commodities to countries in need. Congress funds in-kind food aid programs through the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act\u2014known as the Agriculture appropriations bill.", "In 2010, Congress established the Emergency Food Security Program (EFSP), which provides primarily cash-based food assistance. Cash-based assistance provides recipients with the means to acquire food, including through cash transfers, vouchers, or locally and regionally procured food \u2014food purchased in the country or region where it is to be distributed rather than from the United States. Congress funds EFSP through the International Disaster Assistance (IDA) account in the State, Foreign Operations, and Related Programs (SFOPS) appropriations bill. The IDA account also funds nonfood emergency humanitarian assistance, such as provision of shelter and health services.", "This report provides a brief overview of the international food aid-related provisions in the FY2018 and FY2019 enacted Agriculture Appropriations Acts\u2014Division A of the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) and Division B of the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ). It does not cover programs funded through the SFOPS appropriations bill."], "subsections": []}, {"section_title": "International Food Aid Programs", "paragraphs": ["Congress funds most U.S. international food aid programs with discretionary funding provided through annual appropriations bills. Some international food aid programs receive mandatory funding financed through USDA's Commodity Credit Corporation (CCC) and do not require a separate appropriation. Congress authorizes discretionary and mandatory funding levels for international food aid programs in periodic farm bills, most recently the Agriculture Improvement Act of 2018 ( P.L. 115-334 ). Table 1 lists each international food aid program that receives funding through agriculture appropriations."], "subsections": [{"section_title": "Programs Reliant on Discretionary Funding", "paragraphs": ["The Food for Peace Act of 1954 (P.L. 83-480), as amended, authorizes four international food assistance programs. The Agriculture appropriations bill provides discretionary funding for three Food for Peace (FFP) programs\u2014FFP Title I, FFP Title II, and FFP Title V\u2014which are discussed below. ", "1. FFP Title I provides concessional sales \u2014sales on credit terms below market rates\u2014of U.S. commodities to governments of developing countries and private entities. USDA administers FFP Title I. Congress has not appropriated funds for new FFP Title I sales since FY2006 but continues to appropriate funds to administer the FFP Title I loans provided before FY2006. The appropriation for FFP Title I administrative expenses also funds administrative expenses for the Food for Progress Program, which supports economic development projects. 2. FFP Title II is a donation program under which U.S. agricultural commodities are distributed to recipients in foreign countries. The U.S. Agency for International Development (USAID) administers FFP Title II. Since the mid-1980s, FFP Title II has received the majority of funds appropriated to international food aid in the Agriculture appropriations bill. 3. FFP Title V, also known as the Farmer-to-Farmer Program, finances short-term placements for U.S. volunteers to provide technical assistance to farmers in developing countries. USAID administers the Farmer-to-Farmer Program. The program does not receive direct appropriations, but receives a portion of the total funds appropriated for FFP programs. Statute requires that the program receive the greater of $15 million or 0.6% of the funds annually appropriated for FFP programs. ", "The Agriculture appropriations bill also provides funding for the McGovern-Dole International Food for Education and Child Nutrition Program. This program donates U.S. agricultural commodities to school feeding programs and pregnant or nursing mothers in qualifying countries."], "subsections": []}, {"section_title": "Programs with Mandatory Funding", "paragraphs": ["Congress has authorized certain U.S. international food aid programs to receive mandatory funding. The Food for Progress Program donates U.S. agricultural commodities to governments or organizations to be monetized \u2014sold on local markets in recipient countries to generate proceeds for economic development projects. Congress has authorized Food for Progress to receive both mandatory and discretionary funding. The program receives discretionary funding for administrative expenses through the appropriation for FFP Title I administrative expenses.", "The Bill Emerson Humanitarian Trust (BEHT) is a reserve of funds or commodities held by the CCC. USDA can use BEHT funds or commodities to supplement FFP Title II activities, especially when FFP Title II funds alone cannot meet international emergency food needs. If USDA provides aid through BEHT, Congress may appropriate funds to the CCC in a subsequent fiscal year to reimburse the CCC for the value of the released funds or commodities. USDA did not release funds or commodities from BEHT in FY2017 or FY2018, and Congress did not appropriate any BEHT reimbursement funds to the CCC in FY2018 or FY2019. "], "subsections": []}]}, {"section_title": "Administration's Recent Budget Requests", "paragraphs": ["The Trump Administration's FY2018 budget request proposed eliminating McGovern-Dole and FFP Title II and moving funding for international food aid to the IDA account within the SFOPS appropriations bill. The FY2019 budget request repeated the proposed eliminations and reorganization from the FY2018 request. It also contained a new proposal to eliminate Food for Progress. Congress did not adopt the Administration's FY2018 or FY2019 proposals to eliminate FFP Title II, McGovern-Dole, or Food for Progress. This section summarizes the FY2018 and FY2019 Administration's budget requests for U.S. international food aid programs."], "subsections": [{"section_title": "Funding Request for FY2018", "paragraphs": ["For FY2018, the Trump Administration requested discretionary funding for one international food aid program account. The Administration requested $149,000 for administrative expenses to carry out Food for Progress projects and existing FFP Title I loans. This amount would have been equal to the FY2017 enacted amount for administrative expenses.", "The FY2018 request proposed eliminating McGovern-Dole \"as part of the Administration's effort to reprioritize Federal spending.\" The Administration stated that \"in the most recent report in 2011, the [Government Accountability Office (GAO)] found weaknesses in performance monitoring, program evaluations, and prompt closeout of agreements.\" According to the GAO's Recommendations Database, USDA has taken actions to satisfy the three recommendations made in the 2011 audit, and these recommendations have been closed as of July 2015.", "The Administration also proposed eliminating FFP Title II. The Administration stated: \"There is no funding request for [FFP] Title II, as part of an Administration effort to streamline foreign assistance funding, prioritize funding, and use funding as effectively and efficiently as possible. The 2018 request includes funding for emergency food needs within the International Disaster Assistance account.\" Eliminating FFP Title II would fund the majority of U.S. international food assistance through the IDA account in the SFOPS appropriations rather than shared between IDA and the FFP Title II account in the Agriculture appropriations bill.", "The IDA account provides funding for EFSP. FFP Title II and EFSP account for the majority of U.S. international food assistance funding, representing 87% of total international food assistance outlays in FY2016. Combined FY2016 outlays for FFP Title II and EFSP totaled $2.730 billion. The Administration's FY2018 SFOPS budget request proposed that $1.511 billion of IDA funds be directed to international food assistance. This amount would have been 45% less than combined FY2016 outlays for FFP Title II and EFSP. "], "subsections": []}, {"section_title": "Funding Request for FY2019", "paragraphs": ["In its FY2019 request, the Trump Administration repeated many of its proposals from FY2018, including eliminating McGovern-Dole and FFP Title II. The Administration's FY2019 SFOPS budget request proposed $1.554 billion of IDA funds be used for emergency food assistance. This amount would be 43% less than the combined FY2016 outlays for FFP Title II and EFSP, which totaled $2.730 billion. The Administration also proposed eliminating Food for Progress, a change from its FY2018 budget request. The Administration requested $142,000 for administrative expenses to carry out existing Food for Progress projects and existing FFP Title I loans. This amount is 4.7% less than the $149,000 that Congress enacted for administrative expenses in FY2018."], "subsections": []}, {"section_title": "Potential Implications of the FY2018 and FY2019 Funding Requests", "paragraphs": ["Moving funding from FFP Title II to IDA could potentially change how the United States delivers food aid to recipient countries. Statute requires that nearly all aid distributed under FFP Title II be in-kind aid. EFSP, which Congress funds through the IDA account, does not have a statutory requirement to provide a portion of assistance as in-kind aid. EFSP can provide in-kind aid or cash-based assistance, such as direct cash transfers, vouchers, or locally and regionally procured food. Shifting international food aid funding from FFP Title II to IDA could increase the portion of food assistance provided as cash-based assistance rather than in-kind aid.", "Proposals to shift U.S. international food assistance funding from in-kind food aid to cash-based food assistance are not new. Both the Obama and George W. Bush Administrations proposed increasing the portion of U.S. international food aid delivered as cash-based assistance. Some proponents of increasing the use of cash-based assistance argue that it could improve program efficiency. However, some interested parties assert that the Trump Administration's proposed decrease in overall funding for international food assistance could result in fewer people receiving assistance and therefore counteract potential efficiency gains. Some opponents of increasing the share of food assistance that is cash-based rather than in-kind maintain that in-kind aid ensures that the United States provides high-quality food to recipients. Some opponents also assert that increasing the use of cash-based assistance could diminish support for international food aid programs among certain stakeholders, such as selected agricultural commodity groups, and potentially some lawmakers."], "subsections": []}]}, {"section_title": "Congressional Appropriations", "paragraphs": ["Both the FY2018 and FY2019 Agriculture Appropriations Acts provided funding for U.S. international food aid programs in the Foreign Assistance and Related Programs (Title V) and General Provisions (Title VII) titles. This included funding for FFP Title II and McGovern-Dole. The acts also provided funding for administrative expenses to manage existing FFP Title I loans that originated while the FFP Title I program was active. The FY2019 act also provided funding for the Food for Progress program, which typically receives only mandatory funding. Figure 1 shows funding trends for international food aid programs funded through Agriculture appropriations bills for FY2013-FY2019."], "subsections": [{"section_title": "Appropriations for FY2018", "paragraphs": ["The FY2018 Agriculture Appropriations Act (Division A of P.L. 115-141 ) provided $1.924 billion for international food aid programs, a 7% increase from the FY2017 enacted total of $1.802 billion ( Table 2 ). The FY2018 total was also an increase from the FY2018 Senate-passed ($1.807 billion) and House-passed ($1.602 billion) Agriculture appropriations bills. Congress did not adopt the Administration's FY2018 proposals to eliminate FFP Title II or McGovern-Dole.", "The FY2018 act provided $1.716 billion for FFP Title II, a 7% increase from the $1.6 billion provided in FY2017 Agriculture appropriations. In FY2017, Congress directed $300 million of IDA funds in SFOPS appropriations be transferred to the FFP Title II account in Agriculture appropriations ( P.L. 115-31 , Division J, \u00a78005(a)(1)(A)). When including this transfer of funds, FFP Title II received a total of $1.9 billion in funding in FY2017. Total FFP Title II funding of $1.716 in FY2018 would represent a 10% decrease from the FY2017 total of $1.9 billion.", "FY2018 enacted funding of $1.716 billion for FFP Title II includes $1.6 billion provided in the Foreign Assistance title and $116 million provided in the General Provisions title of the Agriculture Appropriations Act. The funding Congress provides in the Foreign Assistance title is a base amount that is often compared across fiscal years to determine whether program funding has increased or decreased. Providing additional FFP Title II funding in the General Provisions title effectively increases funding available for FFP Title II in a given fiscal year without increasing base funding in the Foreign Assistance title. ", "The FY2018 act also provided $207.6 million for McGovern-Dole, a 3% increase from the $201.6 million that Congress provided in FY2017. Congress directed that $10 million of McGovern-Dole funding be made available for local and regional procurement (LRP), a $5 million increase from the $5 million set-aside for LRP in FY2017. The FY2018 act also provided $149,000 for FFP Title I and Food for Progress administrative expenses, which was unchanged from the amount enacted for FY2017."], "subsections": []}, {"section_title": "Appropriations for FY2019", "paragraphs": ["The FY2019 Agriculture Appropriations Act (Division B of P.L. 116-6 ) provides $1.942 billion in total funding for international food aid programs, a 1% increase from the FY2018 enacted amount of $1.924 billion. The enacted total for FY2019 is also an increase from the FY2019 Senate-passed ($1.926 billion) and House-reported ($1.743 billion) Agriculture appropriations bills. Congress did not adopt the Administration's FY2019 proposals to eliminate FFP Title II, McGovern-Dole, or Food for Progress.", "The FY2019 act provides $1.716 billion for FFP Title II, equal to the FY2018 enacted amount. This includes $1.5 billion in the Foreign Assistance title and an additional $216 million in the General Provisions title. The act also provides $210.3 million for McGovern-Dole, a 1% increase from the $207.6 million provided in FY2018. The FY2019 act also directs $15 million of McGovern-Dole funding be made available for LRP, a $5 million increase from the $10 million set-aside for LRP in FY2018. ", "The FY2019 act provides $142,000 for FFP Title I and Food for Progress administrative expenses, a 5% decrease from the FY2018 enacted amount of $149,000. The act also provides $16 million for Food for Progress in the General Provisions title, including $6 million in discretionary appropriations and a $10 million Change in Mandatory Program Spending (CHIMP) increase. The FY2019 conference report states that \"this increase is a restoration of funding from reductions occurring in prior years and does not indicate support for expanding or continuing the practice of monetization in food aid programs.\" The FY2019 House-reported bill would have provided $35 million for Food for Progress. Neither the FY2018 act, the FY2019 Administration's budget request, nor the FY2019 Senate-passed bill included discretionary funding for Food for Progress. Food for Progress has not typically received discretionary appropriations; rather it has relied entirely on mandatory funding delivered through the CCC. ", " Table 2 details appropriations for international food aid programs for FY2017-FY2019, including proposed funding levels in the Administration's FY2018 and FY2019 budget requests and in the House and Senate Agriculture appropriations bills for FY2018 and FY2019."], "subsections": []}]}, {"section_title": "Policy-Related Provisions", "paragraphs": ["In addition to providing funding, the agriculture appropriations bill may contain policy-related provisions that direct how the executive branch should spend certain funds. Provisions included in appropriations bill text have the force of law but generally only for the duration of the fiscal year for which the bill provides appropriations. Policy-related provisions generally do not amend the U.S. Code . Table 3 compares select policy-related provisions pertaining to U.S. international food aid programs from the Foreign Assistance and Related Programs (Title V) and General Provisions (Title VII) titles of the FY2018 and FY2019 Agriculture Appropriations Acts.", "The explanatory statement that accompanies the appropriations act, as well as the committee reports that accompany the House and Senate committee-reported bills, can provide statements of support for certain programs or directions to federal agencies on how to spend certain funding provided in the appropriations bill. While these documents do not have the force of law, they can express congressional intent. The committee reports and explanatory statement may need to be read together to capture all of the congressional intent for a given fiscal year.", " Table 4 compares selected policy-related provisions pertaining to U.S. international food aid programs from the FY2018 and FY2019 House and Senate committee reports and explanatory statement for the FY2019 Agriculture Appropriations Act. The FY2018 column includes references to the House (H) and Senate (S) committee reports to allow for consideration of congressional intent. The explanatory statement for the FY2018 Agriculture Appropriations Act did not contain policy-related provisions pertaining to U.S. international food aid programs."], "subsections": []}]}}
{"id": "R45710", "title": "Housing Issues in the 116th Congress", "released_date": "2019-05-03T00:00:00", "summary": ["The 116th Congress may consider a variety of housing-related issues. These could include topics related to housing finance, federal housing assistance programs, and housing-related tax provisions, among other things. Particular issues that may be of interest during the Congress include the following:", "The status of Fannie Mae and Freddie Mac, two government-sponsored enterprises (GSEs) that have been in conservatorship since 2008. Congress might consider comprehensive housing finance reform legislation to resolve the status of Fannie Mae and Freddie Mac. Furthermore, a new director for the Federal Housing Finance Agency (FHFA), Fannie Mae's and Freddie Mac's regulator and conservator, was sworn in on April 15, 2019. Congress may take an interest in any administrative changes that FHFA might make to Fannie Mae and Freddie Mac under new leadership. Appropriations for federal housing programs, including programs at the Department of Housing and Urban Development (HUD) and rural housing programs administered by the U.S. Department of Agriculture (USDA), particularly in light of discretionary budget caps that are currently scheduled to decrease for FY2020. Oversight of the implementation of certain changes to federal assisted housing programs that were enacted in prior Congresses, such as expansions of HUD's Moving to Work (MTW) program and Rental Assistance Demonstration (RAD) program. Considerations related to housing and the federal response to major disasters, including oversight of the implementation of certain changes related to Federal Emergency Management Agency (FEMA) assistance that were enacted in the previous Congress. Consideration of legislation related to certain federal housing programs that provide assistance to Native Americans living in tribal areas. Consideration of legislation to extend certain temporary tax provisions that are currently expired, including housing-related provisions that provide a tax exclusion for canceled mortgage debt and allow for the deductibility of mortgage insurance premiums, respectively.", "Housing and mortgage market conditions provide context for these and other issues that Congress may consider, although housing markets are local in nature and national housing market indicators do not necessarily accurately reflect conditions in specific communities. On a national basis, some key characteristics of owner-occupied housing markets and the mortgage market in recent years include increasing housing prices, low mortgage interest rates, and home sales that have been increasing but constrained by a limited inventory of homes on the market. Key characteristics of rental housing markets include an increasing number of renters, low rental vacancy rates, and increasing rents. Rising home prices and rents that have outpaced income growth in recent years have led to policymakers and others increasingly raising concerns about the affordability of both owner-occupied and rental housing. Affordability challenges are most prominent among the lowest-income renter households, reflecting a shortage of rental housing units that are both affordable and available to this population."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The 116 th Congress may consider a variety of housing-related issues. These may involve assisted housing programs, such as those administered by the Department of Housing and Urban Development (HUD), and issues related to housing finance, among other things. Specific topics of interest may include ongoing issues such as interest in reforming the nation's housing finance system, how to prioritize appropriations for federal housing programs in a limited funding environment, oversight of the implementation of changes to certain housing programs that were enacted in prior Congresses, and the possibility of extending certain temporary housing-related tax provisions. Additional issues may emerge as the Congress progresses. ", "This report provides a high-level overview of the most prominent housing-related issues that may be of interest during the 116 th . It is meant to provide a broad overview of major issues and is not intended to provide detailed information or analysis. However, it includes references to more in-depth CRS reports on these issues where possible. "], "subsections": []}, {"section_title": "Housing and Mortgage Market Conditions", "paragraphs": ["This section provides background on housing and mortgage market conditions to provide context for the housing policy issues discussed in the remainder of the report. This discussion of market conditions is at the national level. However, it is important to be aware that local housing market conditions can vary dramatically, and national housing market trends may not reflect the conditions in a specific area. Nevertheless, national housing market indicators can provide an overall sense of general trends in housing.", "In general, rising home prices, relatively low interest rates, and rising rental costs have been prominent features of housing and mortgage markets in recent years. Although interest rates have remained low, rising house prices and rental costs that in many cases have outpaced income growth have led to increased concerns about housing affordability for both prospective homebuyers and renters. "], "subsections": [{"section_title": "Owner-Occupied Housing Markets and the Mortgage Market", "paragraphs": ["Most homebuyers take out a mortgage to purchase a home. Therefore, owner-occupied housing markets and the mortgage market are closely linked, although they are not the same. The ability of prospective homebuyers to obtain mortgages, and the costs of those mortgages, impact housing demand and affordability. The following subsections show current trends in selected owner-occupied housing and mortgage market indicators. "], "subsections": [{"section_title": "House Prices", "paragraphs": ["As shown in Figure 1 , nationally, nominal house prices have been increasing on a year-over-year basis in each quarter since the beginning of 2012, with year-over-year increases exceeding 5% for much of that time period and exceeding 6% for most quarters since mid-2016. These increases follow almost five years of house price declines in the years during and surrounding the economic recession of 2007-2009 and associated housing market turmoil. House price increases slowed somewhat during 2018, but year-over-year house prices still increased by nearly 6% during the fourth quarter of 2018. ", "House prices, and changes in house prices, vary greatly across local housing markets. Some areas of the country are experiencing rapid increases in house prices, while other areas are experiencing slower or stagnating house price growth. Similarly, prices have fully regained or even exceeded their pre-recession levels in nominal terms in many parts of the country, but in other areas prices remain below those levels. ", "House price increases affect participants in the housing market differently. Rising prices reduce affordability for prospective homebuyers, but they are generally beneficial for current homeowners due to the increased home equity that accompanies them (although rising house prices also have the potential to negatively impact affordability for current homeowners through increased property taxes)."], "subsections": []}, {"section_title": "Interest Rates", "paragraphs": ["For several years, mortgage interest rates have been low by historical standards. Lower interest rates increase mortgage affordability and make it easier for some households to purchase homes or refinance their existing mortgages.", "As shown in Figure 2 , average mortgage interest rates have been consistently below 5% since May 2010 and have been below 4% for several stretches during that time. After starting to increase somewhat in late 2017 and much of 2018, mortgage interest rates showed declines at the end of 2018 into early 2019. The average mortgage interest rate for February 2019 was 4.37%, compared to 4.46% in the previous month and 4.33% a year earlier. "], "subsections": []}, {"section_title": "Homeownership Affordability", "paragraphs": ["House prices have been rising for several years on a national basis, and mortgage interest rates, while still low by historical standards, have also risen for certain stretches. While incomes have also been rising in recent years, helping to mitigate some affordability pressures, on the whole house price increases have outpaced income increases. These trends have led to increased concerns about the affordability of owner-occupied housing. ", "Despite rising house prices, many metrics of housing affordability suggest that owner-occupied housing is currently relatively affordable. These metrics generally measure the share of income that a median-income family would need to qualify for a mortgage to purchase a median-priced home, subject to certain assumptions.\u00a0Therefore, rising incomes and, especially, interest rates that are still low by historical standards contribute to monthly mortgage payments being considered affordable under these measures despite recent house price increases. ", "However, some factors that affect housing affordability may not be captured by these metrics. For example, several of the metrics are based on certain assumptions (such as a borrower making a 20% down payment) that may not apply to many households. Furthermore, because they typically measure the affordability of monthly mortgage payments, they often do not take into account other affordability challenges that homebuyers may face, such as affording a down payment and other upfront costs of purchasing a home (costs that generally increase as home prices rise). Other factors\u2014such as the ability to qualify for a mortgage, the availability of homes on the market, and regional differences in house prices and income\u2014may also make homeownership less attainable for some households. \u00a0Some of these factors may have a bigger impact on affordability for specific demographic groups, as income trends and housing preferences are not uniform across all segments of the population. ", "Given that house price increases are showing some signs of slowing and interest rates have remained low, the affordability of owner-occupied homes may hold steady or improve. Such trends could potentially impact housing market activity, including home sales. "], "subsections": []}, {"section_title": "Home Sales", "paragraphs": ["In general, annual home sales have been increasing since 2014 and have improved from their levels during the housing market turmoil of the late 2000s, although in 2018 the overall number of home sales declined from the previous year. While home sales have been improving somewhat in recent years (prior to falling in 2018), the supply of homes on the market has generally not been keeping pace with the demand for homes, thereby limiting home sales activity and contributing to house price increases.", "Home sales include sales of both existing and newly built homes. Existing home sales generally number in the millions each year, while new home sales are usually in the hundreds of thousands.\u00a0 Figure 3 shows the annual number of existing and new home sales for each year from 1995 through 2018. Existing home sales numbered about 5.3 million in 2018, a decline from 5.5 million in 2017 (existing home sales in 2017 were the highest level since 2006). New home sales numbered about 622,000 in 2018, an increase from 614,000 in 2017 and the highest level since 2007. However, the number of new home sales remains appreciably lower than in the late 1990s and early 2000s, when they tended to be between 800,000 and 1 million per year. "], "subsections": []}, {"section_title": "Housing Inventory and Housing Starts", "paragraphs": ["The number and types of homes on the market affect home sales and home prices. On a national basis, the supply of homes on the market has been relatively low in recent years, and in general new construction has not been creating enough new homes to meet demand. However, as noted previously, national housing market indicators are not necessarily indicative of local conditions. While many areas of the country are experiencing low levels of housing inventory that contribute to higher home prices, other areas, particularly those experiencing population declines, face a different set of housing challenges, including surplus housing inventory and higher levels of vacant homes. ", "On a national basis, the inventory of homes on the market has been below historical averages in recent years, though the inventory, of new homes in particular, has begun to increase somewhat of late. Homes come onto the market through the construction of new homes and when current homeowners decide to sell their existing homes. Existing homeowners' decisions to sell their homes can be influenced by expectations about housing inventory and affordability. For example, current homeowners may choose not to sell if they are uncertain about finding new homes that meet their needs, or if their interest rates on new mortgages would be substantially higher than the interest rates on their current mortgages. New construction activity is influenced by a variety of factors including labor, materials, and other costs as well as the expected demand for new homes. ", "One measure of the amount of new construction is housing starts. Housing starts are the number of new housing units on which construction is started in a given period and are typically reported monthly as a \"seasonally adjusted annual rate.\" This means that the number of housing starts reported for a given month (1) has been adjusted to account for seasonal factors and (2) has been multiplied by 12 to reflect what the annual number of housing starts would be if the current month's pace continued for an entire year. ", " Figure 4 shows the seasonally adjusted rate of starts on one-unit homes for each month from January 1995 through December 2018. Housing starts for single-family homes fell during the housing market turmoil, reflecting decreased home purchase demand.\u00a0In recent years, levels of new construction have remained relatively low by historical standards, reflecting a variety of considerations including labor shortages and the cost of building. Housing starts have generally been increasing since about 2012, but remain well below their levels from the late 1990s through the mid-2000s. For 2018, the seasonally adjusted annual rate of housing starts averaged about 868,000. In comparison, the seasonally adjusted annual rate of housing starts exceeded 1 million from the late 1990s through the mid-2000s. ", "Furthermore, high housing construction costs have led to a greater share of new housing being built at the more expensive end of the market. To the extent that new homes are concentrated at higher price points, supply and price pressures may be exacerbated for lower-priced homes. "], "subsections": []}, {"section_title": "Mortgage Market Composition", "paragraphs": ["When a lender originates a mortgage, it can choose to hold that mortgage in its own portfolio, sell it to a private company, or sell it to Fannie Mae or Freddie Mac, two congressionally chartered government-sponsored enterprises (GSEs). Fannie Mae and Freddie Mac bundle mortgages into securities and guarantee investors' payments on those securities. Furthermore, a mortgage might be insured by a federal government agency, such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). Most FHA-insured or VA-guaranteed mortgages are included in mortgage-backed securities that are guaranteed by Ginnie Mae, another government agency. The shares of mortgages that are provided through each of these channels may be relevant to policymakers because of their implications for mortgage access and affordability as well as the federal government's exposure to risk. ", "As shown in Figure 5 , during the first three quarters of 2018, about two-thirds of the total dollar volume of mortgages originated was either backed by Fannie Mae or Freddie Mac (45%) or guaranteed by a federal agency such as FHA or VA (22%). Nearly one-third of the dollar volume of mortgages originated was held in bank portfolios, while close to 2% was included in a private-label security without government backing. ", "The shares of mortgage originations backed by Fannie Mae and Freddie Mac and held in bank portfolios are roughly similar to their respective shares in the early 2000s. The share of private-label securitization has been, and continues to be, very small since the housing market turmoil of the late 2000s, while the FHA/VA share is higher than it was in the early and mid-2000s. The share of mortgages insured by FHA or guaranteed by VA was low by historical standards during that time period as many households opted for other types of mortgages, including subprime mortgages."], "subsections": []}]}, {"section_title": "Rental Housing Markets", "paragraphs": ["As has been the case in owner-occupied housing markets, affordability has been a prominent concern in rental markets in recent years. In the years since the housing market turmoil of the late 2000s, the number and share of renter households has increased, leading to lower rental vacancy rates and higher rents in many markets. "], "subsections": [{"section_title": "Share of Renters", "paragraphs": ["The housing and mortgage market turmoil of the late 2000s led to a substantial decrease in the homeownership rate and a corresponding increase in the share of households who rent their homes. As shown in Figure 6 , the share of renters increased from about 31% in 2005 and 2006 to a high of about 36.6% in 2016, before decreasing slightly to 36.1% in 2017 and continuing to decline to 35.6% in 2018. The homeownership rate correspondingly fell from a high of 69% in the mid-2000s to 63.4% in 2016, before rising to 63.9% in 2017 and continuing to rise to 64.4% in 2018.", "The overall number of occupied housing units also increased over this time period, from nearly 110 million in 2006 to 121 million in 2018; most of this increase has been in renter-occupied units. The number of renter-occupied units increased from about 34 million in 2006 to about 43 million in 2018. The number of owner-occupied housing units fell from about 75 million units in 2006 to about 74 million in 2014, but has since increased to about 78 million units in 2018. "], "subsections": []}, {"section_title": "Rental Vacancy Rates", "paragraphs": ["The higher number and share of renter households has had implications for rental vacancy rates and rental housing costs. More renter households increases competition for rental housing, which may in turn drive up rents if there is not enough new rental housing created (whether through new construction or conversion of owner-occupied units to rental units) to meet the increased demand. ", "As shown in Figure 7 , the rental vacancy rate has generally declined in recent years and was under 7% at the end of 2018. "], "subsections": []}, {"section_title": "Rental Housing Affordability", "paragraphs": ["Rental housing affordability is impacted by a variety of factors, including the supply of rental housing units available, the characteristics of those units (e.g., age and amenities), and the demand for available units. New housing units have been added to the rental stock in recent years through both construction of new rental units and conversions of existing owner-occupied units to rental housing. However, the supply of rental housing has not necessarily kept pace with the demand, particularly among lower-cost rental units, and low vacancy rates have been especially pronounced in less-expensive units. ", "The increased demand for rental housing, as well as the concentration of new rental construction in higher-cost units, has led to increases in rents in recent years. Median renter incomes have also been increasing for the last several years, at times outpacing increases in rents. However, over the longer term, median rents have increased faster than renter incomes, reducing rental affordability. ", "Rising rental costs and renter incomes that are not keeping up with rent increases over the long term can contribute to housing affordability problems, particularly for households with lower incomes. Under one common definition, housing is considered to be affordable if a household is paying no more than 30% of its income in housing costs. Under this definition, households that pay more than 30% are considered to be cost-burdened, and those that pay more than 50% are considered to be severely cost-burdened. ", "The overall number of cost-burdened renter households has increased from 14.8 million in 2001 to 20.5 million in 2017, although the 20.5 million in 2017 represented a decrease from 20.8 million in 2016 and over 21 million in 2014 and 2015. (Over this time period, the overall number of renter households has increased as well.) While housing cost burdens can affect households of all income levels, they are most prevalent among the lowest-income households. In 2017, 83% of renter households with incomes below $15,000 experienced housing cost burdens, and 72% experienced severe cost burdens. A shortage of lower-cost rental units that are both available and affordable to extremely low-income renter households (households that earn no more than 30% of area median income), in particular, contributes to these cost burdens."], "subsections": []}]}]}, {"section_title": "Housing Issues in the 116th Congress", "paragraphs": ["A variety of housing-related issues may be of interest to the 116 th Congress, including housing finance, housing assistance programs, and housing-related tax provisions, among other things. Many of these are ongoing or perennial housing-related issues, though additional issues may emerge as the Congress progresses. "], "subsections": [{"section_title": "Status of Fannie Mae and Freddie Mac", "paragraphs": ["Two major players in the U.S. housing finance system are Fannie Mae and Freddie Mac, government-sponsored enterprises (GSEs) that were created by Congress to provide liquidity to the mortgage market. By law, Fannie Mae and Freddie Mac cannot make mortgages; rather, they are restricted to purchasing mortgages that meet certain requirements from lenders. Once the GSEs purchase a mortgage, they either package it with others into a mortgage-backed security (MBS), which they guarantee and sell to institutional investors (which can be the mortgage originator), or retain it as a portfolio investment. Fannie Mae and Freddie Mac are involved in both single-family and multifamily housing, though their single-family businesses are much larger.", "In 2008, in the midst of housing and mortgage market turmoil, Fannie Mae and Freddie Mac experienced financial trouble and entered voluntary conservatorship overseen by their regulator, the Federal Housing Finance Agency (FHFA). As part of the legal arrangements of this conservatorship, the Department of the Treasury contracted to purchase a maximum of $200 billion of new senior preferred stock from each of the GSEs; in return for this support, Fannie Mae and Freddie Mac pay dividends on this stock to Treasury. These funds become general revenues. ", "Several issues related to Fannie Mae and Freddie Mac could be of interest to the 116 th Congress. These include the potential for legislative housing finance reform, new leadership at FHFA and the potential for administrative changes to Fannie Mae and Freddie Mac, and certain issues that could affect Fannie Mae's and Freddie Mac's finances and mortgage standards, respectively. ", "For more information on Fannie Mae and Freddie Mac, see CRS Report R44525, Fannie Mae and Freddie Mac in Conservatorship: Frequently Asked Questions ."], "subsections": [{"section_title": "Potential for Legislative Housing Finance Reform", "paragraphs": ["Since Fannie Mae and Freddie Mac entered conservatorship in 2008, policymakers have largely agreed on the need for comprehensive housing finance reform legislation that would resolve the conservatorships of these GSEs and address the underlying issues that are perceived to have led to their financial trouble and conservatorships. Such legislation could eliminate Fannie Mae and Freddie Mac, possibly replacing them with other entities; retain the companies but transform their role in the housing finance system; or return them to their previous status with certain changes. In addition to addressing the role of Fannie Mae and Freddie Mac, housing finance reform legislation could potentially involve changes to the Federal Housing Administration (FHA) or other federal programs that support the mortgage market.", "While there is generally broad agreement on certain principles of housing finance reform\u2014such as increasing the private sector's role in the mortgage market, reducing government risk, and maintaining access to affordable mortgages for creditworthy households\u2014there is disagreement over how best to achieve these objectives and over the technical details of how a restructured housing finance system should operate. Since 2008, a variety of housing finance reform proposals have been put forward by Members of Congress, think tanks, and industry groups. Proposals differ on structural questions as well as on specific implementation issues, such as whether, and how, certain affordable housing requirements that currently apply to Fannie Mae and Freddie Mac would be included in a new system. ", "Previous Congresses have considered housing finance reform legislation in varying degrees. In the 113 th Congress, the House Committee on Financial Services and Senate Committee on Banking, Housing, and Urban Affairs considered different versions of comprehensive housing finance reform legislation, but none were ultimately enacted. The 114 th \u00a0Congress considered a number of more-targeted reforms to Fannie Mae and Freddie Mac, but did not actively consider comprehensive housing finance reform legislation. At the end of the 115 th Congress, the House Committee on Financial Services held a hearing on a draft housing finance reform bill released by then-Chairman Jeb Hensarling and then-Representative John Delaney, but no further action was taken on it. ", "In the 116 th Congress, Senate Committee on Banking, Housing, and Urban Affairs Chairman Mike Crapo has released an outline for potential housing finance reform legislation. The committee held hearings on March 26 and March 27, 2019 on the outline."], "subsections": []}, {"section_title": "New FHFA Director and Possible Administrative Changes to Fannie Mae and Freddie Mac", "paragraphs": ["FHFA, an independent agency, is the regulator for Fannie Mae, Freddie Mac, and the Federal Home Loan Bank System as well as the conservator for Fannie Mae and Freddie Mac. The director of FHFA is appointed by the President, subject to Senate confirmation, for a five-year term. The term of FHFA Director Mel Watt expired in January 2019. President Trump nominated Mark Calabria to be the next FHFA director. The Senate confirmed the nomination on April 4, 2019, and Dr. Calabria was sworn in on April 15, 2019. ", "FHFA has relatively wide latitude to make many changes to Fannie Mae's and Freddie Mac's operations without congressional approval, though it is subject to certain statutory constraints. In recent years, for example, FHFA has directed Fannie Mae and Freddie Mac to engage in risk-sharing transactions, develop a common securitization platform for issuing mortgage-backed securities, and undertake certain pilot programs. The prospect of new leadership at FHFA led many to speculate about possible administrative changes that FHFA could make to Fannie Mae and Freddie Mac going forward. Any such changes could potentially lead to congressional interest and oversight.", "FHFA could make many changes to Fannie Mae and Freddie Mac, including changes to the pricing of mortgages they purchase, to their underwriting standards, or to certain product offerings. It could also make changes to pilot programs, start laying the groundwork for a post-conservatorship housing finance system, or take a different implementation approach to certain affordable housing initiatives required by statute, such as Duty to Serve requirements. Because the new FHFA director has been critical of certain aspects of Fannie Mae and Freddie Mac in the past, some have expressed concerns that the new leadership could result in the agency taking steps to reduce Fannie Mae's and Freddie Mac's role in the mortgage market. ", "In March 2019, nearly 30 industry groups sent a letter to Acting Director Otting urging that FHFA proceed cautiously with any administrative changes to ensure that they do not disrupt the mortgage market. That same month, President Trump issued a memorandum directing the Secretary of the Treasury to work with other executive branch agencies to develop a plan to end the GSEs' conservatorship, among other goals."], "subsections": []}, {"section_title": "Other Issues Related to Fannie Mae and Freddie Mac", "paragraphs": ["Certain other issues related to Fannie Mae and Freddie Mac may be of interest during the 116 th Congress. A new accounting standard (current expected credit loss, or CECL) that could require the GSEs to increase their loan loss reserves goes into effect in 2020. CECL could result in Fannie Mae and Freddie Mac needing to draw on their support agreements with Treasury. ", "The Dodd-Frank Wall Street Reform and Consumer Protection Act ( P.L. 111-203 ) requires mortgage lenders to document and verify a borrower's ability to repay (ATR). If a mortgage lacks certain risky features and a lender complies with the ATR regulations, the mortgage is considered to be a qualified mortgage (QM), which provides the lender certain protections against lawsuits claiming that the ATR requirements were not met. Mortgages purchased by Fannie Mae or Freddie Mac currently have an exemption (known as the QM Patch) from the debt-to-income ratio ATR rule. This exemption expires in early 2021 (or earlier if Fannie Mae and Freddie Mac exit conservatorship before that date)."], "subsections": []}]}, {"section_title": "Appropriations for Housing Programs", "paragraphs": ["For several years, concern in Congress about federal budget deficits has led to increased interest in reducing the amount of discretionary funding provided each year through the annual appropriations process. This interest manifested most prominently in the enactment of the Budget Control Act of 2011( P.L. 112-25 ), which set enforceable limits for both mandatory and discretionary spending. The limits on discretionary spending, which have been amended and adjusted since they were first enacted, have implications for HUD's budget, the largest source of funding for direct housing assistance, because it is made up almost entirely of discretionary appropriations. In FY2020, the discretionary spending limits are slated to decrease, after having been increased in FY2018 and FY2019 by the Bipartisan Budget Act of FY2018 (BBA; P.L. 115-123 ). The nondefense discretionary cap (the one relevant for housing programs and activities) will decline by more than 9% in FY2020, absent any additional legislative changes.", "More than three-quarters of HUD's appropriations are devoted to three rental assistance programs serving more than 4 million families: the Section 8 Housing Choice Voucher (HCV) program, Section 8 project-based rental assistance, and the public housing program. Funding for the HCV program and project-based rental assistance has been increasing in recent years, largely because of the increased costs of maintaining assistance for households that are currently served by the programs. Public housing has, arguably, been underfunded (based on studies undertaken by HUD of what it should cost to operate and maintain it) for many years. Despite the large share of total HUD funding these rental assistance programs command, their combined funding levels only permit them to serve an estimated one in four eligible families, which creates long waiting lists for assistance in most communities. A similar dynamic plays out in the U.S. Department of Agriculture's Rural Housing Service budget. Demand for housing assistance exceeds the supply of subsidies, yet the vast majority of the RHS budget is devoted to maintaining assistance for current residents.", "In a budget environment with limits on discretionary spending, the pressure to provide increased funding to maintain current services for existing rental assistance programs must be balanced against the pressure from states, localities, and advocates to maintain or increase funding for other popular programs, such as HUD's Community Development Block Grant (CDBG) program, grants for homelessness assistance, and funding for Native American housing. "], "subsections": [{"section_title": "FY2020 Budget", "paragraphs": ["The Trump Administration's budget request for FY2020 proposes an 18% decrease in funding for HUD's programs and activities as compared to the prior year. It proposes to eliminate funding for several programs, including multiple HUD grant programs (CDBG, the HOME Investment Partnerships Program, and the Self-Help and Assisted Homeownership Opportunity Program (SHOP)), and to decrease funding for most other HUD programs. In proposing to eliminate the grant programs, the Administration cites budget constraints and proposes that state and local governments take on more of a role in the housing and community development activities funded by these programs. Additionally, the budget references policy changes designed to reduce the cost of federal rental assistance programs, including the Making Affordable Housing Work Act of 2018 (MAHWA) legislative proposal, released by HUD in April 2018. If enacted, the proposal would make a number of changes to the way tenant rents are calculated in HUD rental assistance programs, resulting in rent increases for assisted housing recipients, and corresponding decreases in the cost of federal subsidies. Further, it would permit local program administrators or property owners to institute work requirements for recipients. In announcing the proposal, HUD described it as setting the programs on \"a more fiscally sustainable path,\" creating administrative efficiency, and promoting self-sufficiency. Low-income housing advocates have been critical of it, particularly the effect increased rent payments may have on families.", "Beyond HUD, the Administration's FY2020 budget request for USDA's Rural Housing Service would eliminate funding for most rural housing programs, except for several loan guarantee programs. It would continue to provide funding to renew existing rental assistance, but also proposes a new minimum rent policy for tenants designed to help reduce federal subsidy costs.", "For more on HUD appropriations trends in general, see CRS Report R42542, Department of Housing and Urban Development (HUD): Funding Trends Since FY2002 . For more on the FY2020 budget environment, including discretionary spending caps, see CRS Report R44874, The Budget Control Act: Frequently Asked Questions ."], "subsections": []}]}, {"section_title": "Implementation of Housing Assistance Legislation", "paragraphs": ["Several pieces of assisted housing legislation that were enacted in prior Congresses are expected to be implemented during the 116 th Congress."], "subsections": [{"section_title": "Moving to Work (MTW) Expansion", "paragraphs": ["In the FY2016 HUD appropriations law, Congress mandated that HUD expand the Moving to Work (MTW) demonstration by 100 public housing authorities (PHAs). MTW is a waiver program that allows a limited number of participating PHAs to receive exceptions from HUD for most of the rules and regulations governing the public housing and voucher programs.\u00a0MTW has been controversial for many years, with PHAs supporting the flexibility it provides (e.g., allowing PHAs to move funding between programs), and low-income housing advocates criticizing some of the policies being adopted by PHAs (e.g., work requirements and time limits). Most recently, GAO issued a report raising concerns about HUD's oversight of MTW, including the lack of monitoring of the effects of policy changes under MTW on tenants.", "HUD was required to phase in the FY2016 expansion and evaluate any new policies adopted by participating PHAs.\u00a0Following a series of listening sessions and advisory committee meetings, and several solicitations for comment, HUD issued a solicitation of interest for the first two expansion cohorts in December 2018. As of the date of this report, no selections had yet been made for those cohorts."], "subsections": []}, {"section_title": "Rental Assistance Demonstration Expansion", "paragraphs": ["The Rental Assistance Demonstration (RAD) was an Obama Administration initiative initially designed to test the feasibility of addressing the estimated $25.6 billion backlog in unmet capital needs in the public housing program by allowing local PHAs to convert their public housing properties to either Section 8 Housing Choice Vouchers or Section 8 project-based rental assistance. PHAs are limited in their ability to mortgage, and thus raise private capital for, their public housing properties because of a federal deed restriction placed on the properties as a condition of federal assistance. When public housing properties are converted under RAD, that deed restriction is removed. As currently authorized, RAD conversions must be cost-neutral, meaning that the Section 8 rents the converted properties may receive must not result in higher subsidies than would have been received under the public housing program. Given this restriction, and without additional subsidy, not all public housing properties can use a conversion to raise private capital, potentially limiting the usefulness of a conversion for some properties. While RAD conversions have been popular with PHAs, and HUD's initial evaluations of the program have been favorable, a recent GAO study has raised questions about HUD's oversight of RAD, and about how much private funding is actually being raised for public housing through the conversions. ", "RAD, as first authorized by Congress in the FY2012 HUD appropriations law, was originally limited to 60,000 units of public housing (out of roughly 1 million units). However, Congress has since expanded the demonstration. Most recently, in FY2018, Congress raised the cap so that up to 455,000 units of public housing will be permitted to convert to Section 8 under RAD, and it further expanded the program so that Section 202 Housing for the Elderly units can also convert. Not only is HUD currently implementing the FY2018 expansion, but the President's FY2020 budget request to Congress requests that the cap on public housing RAD conversions be eliminated completely. "], "subsections": []}]}, {"section_title": "Housing and Disaster Response", "paragraphs": ["Several major disasters that have recently affected the United States have led to congressional activity related to disaster response and recovery programs. When such incidents occur, the President may authorize an emergency or major disaster declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act; P.L. 93-288 , as amended), making various housing assistance programs, including programs provided by the Federal Emergency Management Agency (FEMA) , available to disaster survivors. FEMA-provided housing assistance may include short-term, emergency sheltering accommodations under Section 403\u2014Essential Assistance\u2014of the Stafford Act (e.g., the Transitional Sheltering Assistance (TSA) program, which is intended to provide short-term hotel/motel accommodations). Interim housing needs may be met through the Individuals and Households Program (IHP) under Section 408\u2014Federal Assistance to Individuals and Households\u2014of the Stafford Act. IHP assistance may include financial (e.g., assistance to rent alternate housing accommodations ) and/or direct assistance (e.g., multi family lease and repair , Transportable Temporary Housing Units , or direct lease ) to eligible individuals and households who, as a result of an emergency or disaster, have uninsured or under-insured necessary expenses and serious needs that cannot be met through other means or forms of assistance. IHP assistance is intended to be temporary and is generally limited to a period of 18 months following the date of the declaration , but it may be extended by FEMA. "], "subsections": [{"section_title": "Implementation of Housing-Related Provisions of the Disaster Recovery Reform Act (DRRA)", "paragraphs": ["The Disaster Recovery Reform Act of 2018 (DRRA, Division D of P.L. 115-254 ), which became law on October 5, 2018, is the most comprehensive reform of FEMA's disaster assistance programs since the passage of the Sandy Recovery Improvement Act of 2013 (SRIA, Division B of P.L. 113-2 ) and, prior to that, the Post-Katrina Emergency Management Reform Act of 2006 (PKEMRA, P.L. 109-295 ). The DRRA legislation focuses on improving pre-disaster planning and mitigation, response, and recovery, and increasing FEMA accountability. As such, it amends many sections of the Stafford Act. In addition to those amendments, DRRA includes new standalone authorities and requires reports to Congress, rulemaking, and other actions.", "The 116 th Congress has expressed interest in the oversight of DRRA's implementation, including sections that amend FEMA's temporary housing assistance programs under the Stafford Act. These sections include the following: ", "DRRA Section 1211\u2014State Administration of Assistance for Direct Temporary Housing and Permanent Housing Construction\u2014amends Stafford Act Section 408(f)\u2014Federal Assistance to Individuals and Households, State Role\u2014to allow state, territorial, or tribal governments to administer Direct Temporary Housing Assistance and Permanent Housing Construction, in addition to Other Needs Assistance (ONA). It also provides a mechanism for state and local units of government to be reimbursed for locally implemented housing solutions. This provision may allow states to customize disaster housing solutions and expedite disaster recovery; however, FEMA may need to provide guidance to clarify the requirements of the application and approval process for the state, territorial, or tribal government that seeks to administer these programs. DRRA Section 1212\u2014Assistance to Individuals and Households\u2014amends Stafford Act Section 408(h)\u2014Federal Assistance to Individuals and Households, Maximum Amount of Assistance\u2014to separate the cap on the maximum amount of financial assistance eligible individuals and households may receive for housing assistance and ONA. The provision also removes financial assistance to rent alternate housing accommodations from the cap, and creates an exception for accessibility-related costs. This may better enable FEMA's disaster assistance programs to meet the recovery-related needs of individuals, including those with disabilities and others with access and functional needs, and households who experience significant damage to their primary residence and personal property as a result of an emergency or major disaster. However, there is also the potential that this change may disincentivize sufficient insurance coverage because of the new ability for eligible individuals and households to receive separate and increased housing and ONA awards that more comprehensively cover disaster-related real and personal property losses. DRRA Section 1213\u2014Multifamily Lease and Repair Assistance\u2014amends Stafford Act Section 408(c)(1)(B)\u2014Federal Assistance to Individuals and Households, Direct Assistance\u2014to expand the eligible areas for multifamily lease and repair, and remove the requirement that the value of the improvements or repairs not exceed the value of the lease agreement. This may increase housing options for disaster survivors. The Inspector General of the Department of Homeland Security must assess the use of FEMA's direct assistance authority to justify this alternative to other temporary housing options, and submit a report to Congress.", "For more information on DRRA, see CRS Insight IN11055, The Disaster Recovery Reform Act: Homeland Security Issues in the 116th Congress . Additionally, tables of deadlines associated with the implementation actions and requirements of DRRA are available upon request."], "subsections": []}]}, {"section_title": "Native American Housing Programs", "paragraphs": ["Native Americans living in tribal areas experience a variety of housing challenges. Housing conditions in tribal areas are generally worse than those for the United States as a whole, and factors such as the legal status of trust lands present additional complications for housing. In light of these challenges, and the federal government's long-standing trust relationship with tribes, certain federal housing programs provide funding specifically for housing in tribal areas."], "subsections": [{"section_title": "Tribal HUD-VASH", "paragraphs": ["The Tribal HUD-Veterans Affairs Supportive Housing (Tribal HUD-VASH) program provides rental assistance and supportive services to Native American veterans who are homeless or at risk of homelessness. Tribal HUD-VASH is modeled on the broader HUD-Veterans Affairs Supportive Housing (HUD-VASH) program, which provides rental assistance and supportive services for homeless veterans. Tribal HUD-VASH was initially created and funded through the FY2015 HUD appropriations act ( P.L. 113-235 ), and funds to renew rental assistance have been provided in subsequent appropriations acts. However, no separate authorizing legislation for Tribal HUD-VASH currently exists.", "In the 116 th Congress, a bill to codify the Tribal HUD-VASH program ( S. 257 ) was ordered to be reported favorably by the Senate Committee on Indian Affairs in February 2019. A substantively identical bill passed the Senate during the 115 th Congress ( S. 1333 ), but the House ultimately did not consider it. ", "For more information on HUD-VASH and Tribal HUD-VASH, see CRS Report RL34024, Veterans and Homelessness . "], "subsections": []}, {"section_title": "NAHASDA Reauthorization", "paragraphs": ["The main federal program that provides housing assistance to Native American tribes and Alaska Native villages is the Native American Housing Block Grant (NAHBG), which was authorized by the Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA,\u00a0 P.L. 104-330 ). NAHASDA reorganized the federal system of housing assistance for tribes while recognizing the rights of tribal self-governance and self-determination. The NAHBG provides formula funding to tribes that can be used for a range of affordable housing activities that benefit primarily low-income Native Americans or Alaska Natives living in tribal areas. A separate block grant program authorized by NAHASDA, the Native Hawaiian Housing Block Grant (NHHBG), provides funding for affordable housing activities that benefit Native Hawaiians eligible to reside on the Hawaiian Home Lands. NAHASDA also authorizes a loan guarantee program, the Title VI Loan Guarantee, for tribes to carry out eligible affordable housing activities. ", "The most recent authorization for most NAHASDA programs expired at the end of FY2013, although NAHASDA programs have generally continued to be funded in annual appropriations laws. (The NHHBG has not been reauthorized since its original authorization expired in FY2005, though it has continued to receive funding in most years. ) NAHASDA reauthorization legislation has been considered in varying degrees in the 113 th , 114 th , and 115 th Congresses but none was ultimately enacted.", "The 116 th Congress may again consider legislation to reauthorize NAHASDA. In general, tribes and Congress have been supportive of NAHASDA, though there has been some disagreement over specific provisions or policy proposals that have been included in reauthorization bills. Some of these disagreements involve debates over specific program changes that have been proposed. Others involve debate over broader issues, such as the appropriateness of providing federal funding for programs specifically for Native Hawaiians and whether such funding could be construed to provide benefits based on race. ", "For more information on NAHASDA, see CRS Report R43307, The Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA): Background and Funding . "], "subsections": []}]}, {"section_title": "Housing-Related Tax Extenders", "paragraphs": ["In the past, Congress has regularly extended a number of temporary tax provisions that address a variety of policy issues, including certain provisions related to housing. This set of temporary provisions is commonly referred to as \"tax extenders.\" Two housing-related provisions that have been included in tax extenders packages recently are (1) the exclusion for canceled mortgage debt, and (2) the deduction for mortgage insurance premiums, each of which is discussed further below.", "The most recently enacted tax extenders legislation was the Bipartisan Budget Act of 2018 ( P.L. 115-123 ) in the 115 th Congress. That law extended the exclusion for canceled mortgage debt and the ability to deduct mortgage insurance premiums through the end of 2017 (each had previously expired at the end of 2016). As of the date of this report, these provisions had not been extended beyond 2017.", "In the 116 th Congress, S. 617 , the Tax Extender and Disaster Relief Act of 2019, would extend each of these provisions through calendar year 2019. ", "For more information on tax extenders in general, see CRS Report R45347, Tax Provisions That Expired in 2017 (\"Tax Extenders\") ."], "subsections": [{"section_title": "Exclusion for Canceled Mortgage Debt", "paragraphs": ["Historically, when all or part of a taxpayer's mortgage debt has been forgiven, the forgiven amount has been included in the taxpayer's gross income for tax purposes. This income is typically referred to as canceled mortgage debt income.", "During the housing market turmoil of the late 2000s, some efforts to help troubled borrowers avoid foreclosure resulted in canceled mortgage debt. The Mortgage Forgiveness Debt Relief Act of 2007 ( P.L. 110-142 ), signed into law in December 2007, temporarily excluded qualified canceled mortgage debt income associated with a primary residence from taxation. The provision was originally effective for debt discharged before January 1, 2010, and was subsequently extended several times.", "Rationales put forth when the provision was originally enacted included minimizing hardship for distressed households, lessening the risk that nontax homeownership retention efforts would be thwarted by tax policy, and assisting in the recoveries of the housing market and overall economy. Arguments against the exclusion at the time included concerns that it makes debt forgiveness more attractive for homeowners, which could encourage homeowners to be less responsible about fulfilling debt obligations, and concerns about fairness given that the ability to realize the benefits depends on a variety of factors. More recently, because the economy, housing market, and foreclosure rates have improved significantly since the height of the housing and mortgage market turmoil, the exclusion may no longer be warranted. ", "For more information on the exclusion for canceled mortgage debt, see CRS Report RL34212, Analysis of the Tax Exclusion for Canceled Mortgage Debt Income . "], "subsections": []}, {"section_title": "Deductibility of Mortgage Insurance Premiums", "paragraphs": ["Traditionally, homeowners have been able to deduct the interest paid on their mortgage, as well as property taxes they pay, as long as they itemize their tax deductions. Beginning in 2007, homeowners could also deduct qualifying mortgage insurance premiums as a result of the Tax Relief and Health Care Act of 2006 ( P.L. 109-432 ). Specifically, homeowners could effectively treat qualifying mortgage insurance premiums as mortgage interest, thus making the premiums deductible if homeowners itemized and their adjusted gross incomes were below a specified threshold ($55,000 for single, $110,000 for married filing jointly). Originally, the deduction was to be available only for 2007, but it was subsequently extended several times.", "Two possible rationales for allowing the deduction of mortgage insurance premiums are that it assisted in the recovery of the housing market, and that it promotes homeownership. The housing market, however, has largely recovered from the market turmoil of the late 2000s, and it is not clear that the deduction has an effect on the homeownership rate. Furthermore, to the degree that owner-occupied housing is over subsidized, extending the deduction could lead to a greater misallocation of the resources that are directed toward the housing industry. "], "subsections": []}]}, {"section_title": "Housing-Related Tax Extenders", "paragraphs": ["In the past, Congress has regularly extended a number of temporary tax provisions that address a variety of policy issues, including certain provisions related to housing. This set of temporary provisions is commonly referred to as \"tax extenders.\" Two housing-related provisions that have been included in tax extenders packages recently are (1) the exclusion for canceled mortgage debt, and (2) the deduction for mortgage insurance premiums, each of which is discussed further below.", "The most recently enacted tax extenders legislation was the Bipartisan Budget Act of 2018 ( P.L. 115-123 ) in the 115 th Congress. That law extended the exclusion for canceled mortgage debt and the ability to deduct mortgage insurance premiums through the end of 2017 (each had previously expired at the end of 2016). As of the date of this report, these provisions had not been extended beyond 2017.", "In the 116 th Congress, S. 617 , the Tax Extender and Disaster Relief Act of 2019, would extend each of these provisions through calendar year 2019. ", "For more information on tax extenders in general, see CRS Report R45347, Tax Provisions That Expired in 2017 (\"Tax Extenders\") ."], "subsections": [{"section_title": "Exclusion for Canceled Mortgage Debt", "paragraphs": ["Historically, when all or part of a taxpayer's mortgage debt has been forgiven, the forgiven amount has been included in the taxpayer's gross income for tax purposes. This income is typically referred to as canceled mortgage debt income.", "During the housing market turmoil of the late 2000s, some efforts to help troubled borrowers avoid foreclosure resulted in canceled mortgage debt. The Mortgage Forgiveness Debt Relief Act of 2007 ( P.L. 110-142 ), signed into law in December 2007, temporarily excluded qualified canceled mortgage debt income associated with a primary residence from taxation. The provision was originally effective for debt discharged before January 1, 2010, and was subsequently extended several times.", "Rationales put forth when the provision was originally enacted included minimizing hardship for distressed households, lessening the risk that nontax homeownership retention efforts would be thwarted by tax policy, and assisting in the recoveries of the housing market and overall economy. Arguments against the exclusion at the time included concerns that it makes debt forgiveness more attractive for homeowners, which could encourage homeowners to be less responsible about fulfilling debt obligations, and concerns about fairness given that the ability to realize the benefits depends on a variety of factors. More recently, because the economy, housing market, and foreclosure rates have improved significantly since the height of the housing and mortgage market turmoil, the exclusion may no longer be warranted. ", "For more information on the exclusion for canceled mortgage debt, see CRS Report RL34212, Analysis of the Tax Exclusion for Canceled Mortgage Debt Income . "], "subsections": []}, {"section_title": "Deductibility of Mortgage Insurance Premiums", "paragraphs": ["Traditionally, homeowners have been able to deduct the interest paid on their mortgage, as well as property taxes they pay, as long as they itemize their tax deductions. Beginning in 2007, homeowners could also deduct qualifying mortgage insurance premiums as a result of the Tax Relief and Health Care Act of 2006 ( P.L. 109-432 ). Specifically, homeowners could effectively treat qualifying mortgage insurance premiums as mortgage interest, thus making the premiums deductible if homeowners itemized and their adjusted gross incomes were below a specified threshold ($55,000 for single, $110,000 for married filing jointly). Originally, the deduction was to be available only for 2007, but it was subsequently extended several times.", "Two possible rationales for allowing the deduction of mortgage insurance premiums are that it assisted in the recovery of the housing market, and that it promotes homeownership. The housing market, however, has largely recovered from the market turmoil of the late 2000s, and it is not clear that the deduction has an effect on the homeownership rate. Furthermore, to the degree that owner-occupied housing is over subsidized, extending the deduction could lead to a greater misallocation of the resources that are directed toward the housing industry. "], "subsections": []}]}]}]}}
{"id": "R45700", "title": "Assessing Commercial Disclosure Requirements under the First Amendment ", "released_date": "2019-04-23T00:00:00", "summary": ["Federal law contains a wide variety of disclosure requirements, including food labels, securities registrations, and disclosures about prescription drugs in direct-to-consumer advertising. These disclosure provisions require commercial actors to make statements that they otherwise might not, compelling speech and implicating the Free Speech Clause of the First Amendment. Nonetheless, while commercial disclosure requirements may regulate protected speech, that fact in and of itself does not render such provisions unconstitutional.", "The Supreme Court has historically allowed greater regulation of commercial speech than of other types of speech. Since at least the mid-1970s, however, the Supreme Court has been increasingly protective of commercial speech. This trend, along with other developments in First Amendment law, has led some commentators to question whether the Supreme Court might apply a stricter test in assessing commercial disclosure requirements in the near future. Nonetheless, governing Supreme Court precedent provides that disclosure requirements generally receive lesser judicial scrutiny when they compel only commercial speech, as opposed to noncommercial speech. In National Institute of Family and Life Advocates v. Becerra, a decision released in June 2018, the Supreme Court explained that it has applied a lower level of scrutiny to compelled disclosures under two circumstances.", "First, the Supreme Court has sometimes upheld laws that regulate commercial speech if the speech regulation is part of a larger regulatory scheme that is focused on conduct and only incidentally burdens speech. If a law is properly characterized as a regulation of conduct, rather than speech, then it may be subject to rational basis review, a deferential standard that asks only whether the regulation is a rational way to address the problem. However, it can be difficult to distinguish speech from conduct, and the Supreme Court has not frequently invoked this doctrine to uphold laws against First Amendment challenges.", "Second, the Supreme Court has sometimes applied a lower level of scrutiny to certain commercial disclosure requirements under the authority of a 1985 case, Zauderer v. Office of Disciplinary Counsel. In Zauderer, the Court upheld a disclosure requirement after noting that the challenged provision compelled only \"factual and uncontroversial information about the terms under which . . . services will be available.\" The Court said that under the circumstances, the service provider's First Amendment rights were sufficiently protected because the disclosure requirement was \"reasonably related\" to the government's interest \"in preventing deception of consumers.\" Lower courts have generally interpreted Zauderer to mean that if a commercial disclosure provision requires only \"factual and uncontroversial information\" about the goods or services being offered, it should be analyzed under rational basis review. If a commercial disclosure requirement does not qualify for review under Zauderer, then it will most likely be analyzed under the intermediate standard that generally applies to government actions that regulate commercial speech.", "Some legal scholars have argued that recent Supreme Court case law suggests the Court may subject commercial disclosure provisions to stricter scrutiny in the future, either by limiting the factual circumstances under which these two doctrines apply or by creating express exceptions to these doctrines. If a court applies a heightened level of scrutiny, it may require the government to present more evidence of the problem it is seeking to remedy and stronger justifications for choosing a disclosure requirement to achieve its purposes."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Disclosure provisions that require commercial actors to convey specified information to consumers occupy an uneasy and shifting space in First Amendment jurisprudence. The First Amendment's Free Speech Clause protects the right to speak as well as the right not to speak, and at least outside the context of commercial speech, courts generally disfavor any government action that compels speech. Indeed, the Supreme Court in 1943 described the First Amendment's protection against compelled speech as a \"fixed star in our constitutional constellation.\" Accordingly, government actions mandating speech are generally subject to strict scrutiny by courts, and will be upheld \"only if the government proves that they are narrowly tailored to serve compelling state interests.\" However, the Court has also long accepted a variety of laws that require commercial actors to make certain disclosures to consumers, confirming that Congress can compel certain disclosures, even those involving protected speech, without running afoul of the First Amendment.", "Commercial disclosure requirements have largely withstood constitutional scrutiny in part because, historically, commercial speech has received less protection under the First Amendment than other speech. The government's ability to more freely regulate commercial speech has been linked to its general authority \"to regulate commercial transactions.\" Thus, notwithstanding the fact that commercial disclosure requirements compel speech, courts generally have not analyzed such provisions under the strict scrutiny standard. Instead, courts have often employed less rigorous standards to evaluate such provisions.", "The precise nature of a court's First Amendment analysis, however, will depend on the character of the disclosure requirement at issue. In a recent decision, the Supreme Court distilled and explained its prior cases on this subject. First, the Court said that it has upheld some commercial disclosure requirements that target conduct and only incidentally burden speech. This rubric likely only applies if the disclosure provision is part of a larger scheme regulating commercial conduct. If the disclosure provision instead regulates \"speech as speech,\" it might be subject either to intermediate scrutiny, as a government regulation of commercial speech, or to something closer to rational basis review, if the disclosure provision qualifies for review under the Supreme Court's decision in Zauderer v. Office of Disciplinary Counsel . Some of the Court's recent cases, however, have suggested that in certain circumstances, disclosure requirements may be subject to heightened scrutiny.", "This report begins with a short background on how courts generally view commercial speech under the First Amendment, then reviews in more detail the possible legal frameworks for analyzing the constitutionality of commercial disclosure requirements. "], "subsections": []}, {"section_title": "First Amendment Protection of Commercial Speech", "paragraphs": ["Supreme Court precedent explaining the application of the First Amendment to commercial disclosure requirements is relatively recent. The Court did not squarely hold that purely commercial speech was entitled to any protection under the First Amendment until 1976 in Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council . The Court has defined commercial speech alternately as speech that \"does 'no more than propose a commercial transaction'\" and as \"expression related solely to the economic interests of the speaker and its audience.\" In Virginia Board of Pharmacy , the Court said that commercial speech was protected, but it also emphasized that the First Amendment did not prohibit all regulations of such speech. In particular, the Court said that it foresaw \"no obstacle\" to government regulation of \"false\" speech, or even of commercial speech that is only \"deceptive or misleading.\" ", "In subsequent cases, the Court has explained why \"regulation to assure truthfulness\" is more readily allowed in the context of commercial speech, as compared with other types of speech. While the First Amendment usually protects even untruthful speech, in order to better encourage uninhibited and robust debate, the Court has recognized that regulating \"for truthfulness\" in the commercial arena is unlikely to \"undesirably inhibit spontaneity\" because commercial speech is generally less likely to be spontaneous. Instead, it is more calculated, motivated by a \"commercial interest.\" In particular, if a particular advertisement concerns a subject in which \"the public lacks sophistication\" and cannot verify the claims, the Court has suggested that the government may have a freer hand to address such concerns.", "Four years after Virginia Board of Pharmacy , in 1980, the Supreme Court set out the standard that generally governs a court's analysis of government restrictions on commercial speech in Central Hudson Gas & Electric Corp. v. Public Service Commission . The Court first explained that commercial speech enjoys \"lesser protection\" than \"other constitutionally guaranteed expression.\" After emphasizing that First Amendment protection for commercial speech \"is based on the informational function of advertising,\" the Court said that \"there can be no constitutional objection to the suppression of commercial messages that do not accurately inform the public about lawful activity.\" Accordingly, the Court held that the government may prohibit \"forms of communication more likely to deceive the public than to inform it\" as well as \"commercial speech related to illegal activity.\" But if the regulated \"communication is neither misleading nor related to unlawful activity,\" the government's action is subject to intermediate scrutiny. Under Central Hudson 's intermediate standard, the government must prove that the government's interest is \"substantial,\" and that the regulation \"directly advances\" that interest and is \"not more extensive than is necessary to serve that interest.\"", "The Central Hudson test continues to govern the constitutional analysis of government acts that infringe on commercial speech. However, in certain circumstances, commercial speech may lose its commercial character if \"it is inextricably intertwined with otherwise fully protected speech.\" And more generally, some members of the Supreme Court have questioned whether commercial speech should categorically receive less protection under the First Amendment, suggesting that in at least some circumstances, infringements on commercial speech should instead be subject to strict scrutiny. Commentators have pointed out that, as a practical matter, Supreme Court decisions have increasingly struck down, rather than upheld, restrictions on commercial speech. ", "Also relevant to the discussion of disclosure requirements, judges and legal scholars have noted that the Court may be adjusting the role of the content neutrality doctrine with respect to commercial speech. As a general matter, if a law is \"content-based,\" in the sense that it \"target[s] speech based on its communicative content,\" it will be subject to strict scrutiny. The Supreme Court stated in Reed v. Town of Gilbert that a regulation is content-based if it \"applies to particular speech because of the topic discussed or the idea or message expressed,\" if it \"cannot be 'justified without reference to the content of the regulated speech,'\" or if it was \"adopted by the government 'because of disagreement with the message [the speech] conveys.'\" Disclosure requirements are generally considered content-based, given that they require regulated parties to speak a certain message, and outside the commercial context, ordinarily trigger the application of strict scrutiny. In Central Hudson , however, the Supreme Court explained that in the context of commercial speech, \"regulation of its content\" is permissible. And, as commentators have pointed out, \"the very category of commercial speech is a content-based category.\" ", "Nonetheless, the Court has struck down certain regulations that prohibit commercial speech solely because its content is commercial, suggesting that content neutrality might be relevant in the commercial sphere. In its 2011 decision in Sorrell v. IMS Health, Inc. , the Supreme Court considered the constitutionality of a state law prohibiting pharmacies from disclosing certain pharmacy records for marketing purposes. After observing that the law included \"content- and speaker-based restrictions on the sale, disclosure, and use of\" covered information, the Court concluded that the law was \"designed to impose a specific, content-based burden on protected expression\" because it applied specifically to marketing, a particular type of speech. Consequently, the law was subject to \"heightened judicial scrutiny,\" notwithstanding the fact that the \"burdened speech result[ed] from an economic motive\" and was therefore commercial. Ultimately, however, the Court declined to say definitively whether Central Hudson or \"a stricter form of judicial scrutiny\" should apply because, in the Court's view, the law failed to pass constitutional muster even under Central Hudson . ", "As discussed in more detail below, the shifting role of content neutrality in commercial speech doctrine holds special significance for commercial disclosure requirements: these requirements are content-based because they \"compel[] individuals to speak a particular message.\" At least one legal scholar has suggested that lower courts have read Sorrell as an expression of the Supreme Court's increasing skepticism toward restrictions on commercial speech and, since that decision, have been more likely to strike down commercial disclosure requirements. However, the Court did not expressly limit the reach of Central Hudson in Sorrell or in subsequent cases, suggesting that, at least for now, Central Hudson 's standard of review applies even when a challenged action would otherwise trigger strict scrutiny as a content-based regulation of speech. Indeed, lower courts analyzing commercial disclosure requirements usually ask whether Zauderer or Central Hudson supplies the appropriate standard of review, contemplating at most only intermediate scrutiny \u2014even in cases decided after Sorrell ."], "subsections": []}, {"section_title": "Regulation of Speech Incidental to Regulatory Scheme Targeting Conduct", "paragraphs": ["In its First Amendment jurisprudence, the Supreme Court has generally distinguished between laws that regulate conduct and laws that regulate speech. The Court has held that conduct-focused regulations will not violate the First Amendment by merely incidentally burdening speech. For instance, while the government may regulate prices, attempts to regulate \"the communication of prices\" implicate the First Amendment. To take another example, the Court has noted that pursuant to \"a ban on race-based hiring,\" a regulation \"directed at commerce or conduct,\" the government \"may require employers to remove 'White Applicants Only' signs.\" To differentiate a regulation targeting conduct from one targeting speech, the Court generally looks to the purpose of the law, asking whether the law appears to target certain content or certain speakers. As part of this inquiry, the Court may also ask whether a regulation applies because of the communicative content of the regulated party's actions.", "This distinction between speech and conduct is especially significant in the context of commercial speech, given that such speech \"occurs in an area traditionally subject to government regulation.\" Thus, in 1978, the Supreme Court said: ", "\"[I]t has never been deemed an abridgment of freedom of speech or press to make a course of conduct illegal merely because the conduct was in part initiated, evidenced, or carried out by means of language, either spoken, written, or printed.\" Numerous examples could be cited of communications that are regulated without offending the First Amendment, such as the exchange of information about securities, corporate proxy statements, the exchange of price and production information among competitors, and employers' threats of retaliation for the labor activities of employees. Each of these examples illustrates that the State does not lose its power to regulate commercial activity deemed harmful to the public whenever speech is a component of that activity.", "The Court has previously \"upheld regulations of professional conduct that incidentally burden speech.\" For example, the Court upheld an informed consent requirement in Planned Parenthood of S outheastern Pennsylvania v. Casey . The Casey challengers argued that a law requiring doctors to inform patients seeking abortions about \"the nature of the procedure, the health risks of the abortion and of childbirth, and the probable gestational age of the unborn child\" compelled doctors to speak in violation of the First Amendment. The Court rejected that argument, concluding that while \"the physician's First Amendment rights not to speak are implicated,\" this was \"only as part of the practice of medicine, subject to reasonable licensing and regulation by the State.\" ", "In National Institute of Family and Life Advocates (NIFLA) v. Becerra , the Supreme Court emphasized that the informed consent requirement upheld in Casey was part of the broader regulation of professional conduct: specifically, the practice of medicine. By contrast, the Court held that the disclosure requirement at issue in NIFLA , which required certain health facilities to provide clients with information about state-sponsored services, could not be upheld as \"an informed-consent requirement or any other regulation of professional conduct\" because it was not tied to any medical procedure. Instead, in the Court's view, the requirement \"regulate[d] speech as speech,\" as opposed to regulating speech only incidentally. ", "While the Court has made clear that the First Amendment does not prohibit such incidental regulation of commercial speech, it has not articulated one overarching standard for evaluating whether such provisions are constitutionally permissible. Its decisions in this area have considered a wide variety of government actions incidentally burdening speech, and it may be that the standard varies according to the nature of the particular speech restriction evaluated. In some cases, the Court has suggested that \"the First Amendment is not implicated by the enforcement\" of a broader regulatory scheme where the regulated conduct does not have \"a significant expressive element\" or the statute does not inevitably single out \"those engaged in expressive activity.\" In other cases where the Court has upheld a regulation that it characterized as focused on conduct rather than speech, the Court investigated the strength of the government's interest and asked whether the regulation advances that interest, suggesting that the Court subjected the regulation to some First Amendment scrutiny\u2014albeit using a relatively relaxed standard. ", "The Court has never explicitly held that a commercial disclosure requirement qualifies as a constitutionally permissible incidental restriction on commercial speech. While Planned Parenthood of Southeastern Pennsylvania v. Casey did involve a disclosure requirement, the Court did not address whether the informed consent requirement involved commercial or noncommercial speech either in Casey or when discussing that requirement in NIFLA . In NIFLA , the Court held that a state law imposing disclosure requirements on clinics providing pregnancy-related services could not be characterized as a regulation that only incidentally burdened speech because the requirement was not tied to any specific medical procedures. However, the Court never expressly stated whether it considered the disclosures to consist of commercial or noncommercial speech.", "Similarly, in Expressions Hair Design v. Schneiderman , the Court rejected the application of this doctrine without expressly characterizing the government action as a commercial disclosure requirement. In that case, the Court considered the constitutionality of a state law prohibiting sellers from imposing surcharges on customers who use credit cards. The Supreme Court rejected the argument that this law primarily \"regulated conduct, not speech,\" concluding that the law did not merely regulate pricing, but regulated the communication of prices by prohibiting merchants from posting a cash price and an additional credit card surcharge. The Court then remanded the case to the lower courts to consider the First Amendment challenges in the first instance, leaving open the question of whether the provision could be characterized as a requirement for sellers to disclose an item's credit card price, rather than as a prohibition of certain speech. ", "As these cases suggest, the Court has seemed reluctant in recent years to uphold government actions as conduct-focused regulations that merely incidentally burden speech, especially in the context of compelled disclosure requirements. Instead, the Court has distinguished the few cases upholding government acts as incidental restrictions and subjected disclosure requirements to further scrutiny. Nonetheless, the Court has left open the possibility that commercial disclosure requirements might, in the future, qualify as permissible incidental speech regulation, if they are part of a broader regulatory scheme."], "subsections": []}, {"section_title": "Regulation of Speech as Speech", "paragraphs": ["If the government regulates \"speech as speech,\" its actions will implicate the First Amendment's protections for freedom of speech and may trigger heightened standards of scrutiny. However, the First Amendment does not prescribe a single analysis for all government actions that potentially infringe on free speech protections. Instead, a court's review will depend on the nature of both the government action and the speech itself. This section first introduces the three possible levels of scrutiny a court might use to analyze a speech regulation and then explains their application to compelled commercial disclosures in more detail. "], "subsections": [{"section_title": "Three Levels of Scrutiny", "paragraphs": ["In the context of commercial disclosure requirements, there are three primary categories of First Amendment analysis that may be relevant. First, as a general rule, government actions that compel speech are usually subject to strict scrutiny. To survive strict scrutiny, the government must show that the challenged action is \"narrowly tailored to serve compelling state interests.\" Laws are unlikely to meet this \"stringent standard.\" Second, as discussed above, government actions regulating commercial speech generally receive only intermediate scrutiny. The intermediate scrutiny standard, pursuant to Central Hudson , requires a \"substantial\" state interest and requires the government to prove that the law \"directly advances\" that interest and \"is not more extensive than is necessary to serve that interest.\" This standard is less demanding than strict scrutiny, but laws may still be struck down under this test.", "The final and most lenient category\u2014one specific to commercial disclosure requirements\u2014comes from a 1985 case, Zauderer v. Office of Disciplinary Counsel . In that case, the Supreme Court considered the constitutionality of state disciplinary rules regulating attorney advertising. As relevant here, the rules required advertisements referring to contingent-fee rates to disclose how the fee would be calculated. An attorney who had been disciplined by the state for violating these provisions argued that this disclosure requirement was unconstitutional because the state failed to meet the standards set out in Central Hudson . The Court acknowledged that it had previously held that prohibitions on commercial speech were subject to heightened scrutiny under Central Hudson , and that it had \"held that in some instances compulsion to speak may be as violative of the First Amendment as prohibitions on speech.\" \"But,\" the Court said, \"[t]he interests at stake in this case are not of the same order as those\" implicated in cases involving the compulsion of noncommercial speech. ", "Instead, the Court noted that the state's provision only involved \"commercial advertising, and its prescription has taken the form of a requirement that appellant include in his advertising purely factual and uncontroversial information about the terms under which his services will be available.\" In this commercial context, the Court said that the attorney's \"constitutionally protected interest in not providing any particular factual information in his advertising is minimal,\" noting that in previous cases it had stated that states might \"appropriately require[]\" warnings or disclaimers \"in order to dissipate the possibility of consumer confusion or deception.\" Rather than applying heightened scrutiny, the Court held that under these circumstances, \"an advertiser's rights are adequately protected as long as disclosure requirements are reasonably related to the State's interest in preventing deception of consumers.\"", "The Zauderer Court did warn, however, that commercial disclosure requirements raise First Amendment concerns, observing that \"unjustified or unduly burdensome disclosure requirements might offend the First Amendment by chilling protected commercial speech.\" But the Court rejected the contention that the disclosure requirement before it was unduly burdensome. Instead, the Court concluded that \"[t]he State's position that it is deceptive to employ advertising that refers to contingent-fee arrangements without mentioning the client's liability for costs is reasonable enough to support a requirement that information regarding the client's liability for costs be disclosed.\" Although the state had not submitted evidence that clients were in fact being misled, the Court stated that \"the possibility of deception\" was \"self-evident,\" making the state's \"assumption that substantial numbers of potential clients would be . . . misled\" regarding the terms of payment reasonable."], "subsections": []}, {"section_title": "Applying Zauderer", "paragraphs": ["Zauderer sets out the most lenient of the three standards of review discussed above, and, as a result, a commercial disclosure requirement is most likely to be upheld if it is reviewed under the rubric of that case. However, the Zauderer standard of review has been interpreted to apply only to certain types of disclosure requirements. As described by the Court and discussed above, the state regulation upheld in Zauderer required \"purely factual and uncontroversial information about the terms under which [attorneys'] services [would] be available,\" and the provision was \"reasonably related to the State's interest in preventing deception of consumers.\" Subsequent cases in both the Supreme Court and the lower courts have tested the extent to which this reasonableness review applies outside of the specific factual circumstances presented in Zauderer ."], "subsections": [{"section_title": "Supreme Court Precedent", "paragraphs": ["The Supreme Court has decided whether to apply Zauderer review to government acts compelling commercial speech in three significant cases. First, in United States v. United Foods , decided in 2001, the Court invalidated a federal statute that compelled \"handlers of fresh mushrooms to fund advertising for the product.\" United Foods thus involved a compelled subsidy, rather than a compelled disclosure. The Court concluded that these statutorily compelled subsidies for government-favored speech implicated the First Amendment and that \"mandat[ing] support\" from objecting parties was \"contrary to . . . First Amendment principles.\" The Court held that Zauderer was inapplicable, noting that in the case before it, there was \"no suggestion . . . that the mandatory assessments . . . are somehow necessary to make voluntary advertisements nonmisleading for consumers.\"", "By contrast, the Court applied Zauderer in a 2010 decision, Milavetz, Gallop & Milavetz, P.A. v. United States , another case concerning attorney advertising. In that case, the Court considered an attorney's First Amendment challenges to a federal statute that required \"debt relief agencies\" to \"make certain disclosures in their advertisements.\" \"Debt relief agencies\" was a statutorily defined term covering some attorneys who provided clients with bankruptcy assistance. Among other things, agencies advertising \"bankruptcy assistance services or . . . the benefits of bankruptcy\" were required to disclose that they were \"a debt relief agency\" that \"help[ed] people file for bankruptcy relief under the Bankruptcy Code.\" Rejecting the challenger's contention that Central Hudson 's intermediate scrutiny governed the disclosure requirement, the Court held instead that \"the less exacting scrutiny described in Zauderer \" governed its review. ", "The Court concluded that the provision \"share[d] the essential features of the rule at issue in Zauderer .\" The disclosure requirement was \"intended to combat the problem of inherently misleading commercial advertisements\u2014specifically, the promise of debt relief without any reference to the possibility of filing for bankruptcy, which has inherent costs.\" Further, the law required the covered entities to provide \"only an accurate statement identifying the advertiser's legal status and the character of the assistance provided.\" As in Zauderer , where the \"possibility of deception\" was \"self-evident,\" the Court was not troubled by the lack of evidence that current advertisements were misleading. Instead, \"evidence in the congressional record demonstrating a pattern of advertisements that hold out the promise of debt relief without alerting consumers to its potential cost\" was \"adequate.\" The Court ultimately upheld the disclosure requirement as \"reasonably related to the [Government's] interest in preventing deception of consumers.\"", "Most recently, in 2018, the Court considered the application of Zauderer in NIFLA . That case involved two distinct disclosure requirements imposed by California's Reproductive Freedom, Accountability, Comprehensive Care, and Transparency Act (FACT Act), which regulated crisis pregnancy centers. First, the FACT Act required any \" licensed covered facility\" to notify clients that \"California has public programs that provide immediate free or low-cost access to comprehensive family planning services (including all FDA-approved methods of contraception), prenatal care, and abortion for eligible women,\" and give the telephone number of the local social services office. Second, any \" unlicensed covered facility\" had to provide notice that the \"facility is not licensed as a medical facility by the State of California and has no licensed medical provider who provides or directly supervises the provision of services.\"", "The Court first held that Zauderer 's reasonableness review did not apply to the licensed notice. In the Court's view, the notice was \"not limited to 'purely factual and uncontroversial information about the terms under which . . . services will be available.'\" The Court explained that the disclosure requirement \"in no way relate[d] to the services that licensed clinics provide.\" The Court said that instead, the law \"require[d] these clinics to disclose information about state -sponsored services\u2014including abortion, anything but an 'uncontroversial' topic.\" The Court ultimately held that the licensed notice could not \"survive even intermediate scrutiny.\" ", "Turning to the unlicensed notice, the Court determined that it did not need to \"decide whether the Zauderer standard applies to the unlicensed notice\" because the disclosure requirement failed scrutiny even under Zauderer . The Court said that \"under Zauderer , a disclosure requirement cannot be 'unjustified or unduly burdensome.'\" The Court interpreted this statement to require that the government prove it was seeking \"to remedy a harm that is 'potentially real, not purely hypothetical.'\" Based on the record on appeal, the Court found that California's stated interest in \"ensuring that pregnant women in California know when they are getting medical care from licensed professionals\" was \"purely hypothetical.\" Further, the Court held in the alternative that \"[e]ven if California had presented a nonhypothetical justification for the unlicensed notice, the FACT Act unduly burden[ed] protected speech\" by requiring a government statement to be placed in all advertisements, regardless of an advertisement's length or content. The Court also expressed concern that the unlicensed notice \"target[ed]\" certain speakers in imposing those burdens by focusing on \"facilities that primarily provide 'pregnancy-related' services.\""], "subsections": []}, {"section_title": "Defining a Zauderer Disclosure", "paragraphs": ["While the Supreme Court has emphasized that Zauderer 's reasonableness review is available only for certain types of compelled commercial disclosures, lower courts have disagreed on the precise circumstances required to apply Zauderer . A few requirements have emerged in the case law. First, courts agree that to qualify for review under Zauderer , a commercial disclosure requirement must compel speech that is \"factual and uncontroversial.\" Next, the disclosure must be related to the goods or services the speaker provides. Finally, courts have disagreed on the type of government interest that may be asserted to justify a Zauderer -eligible regulation: while Zauderer itself approved of the challenged disclosure requirement after concluding that the state was permissibly seeking to \"prevent[] deception of consumers,\" lower courts have sometimes applied Zauderer review even where the regulation is not specifically intended to prevent deception. ", "Before discussing the particulars of these requirements, it is worth noting that these elements are related to the Court's overarching justifications for affording the government more leeway to regulate commercial speech. The seminal Supreme Court case establishing that commercial speech is protected by the First Amendment, Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council , tied commercial speech's value to its ability to inform consumers. Critically, the Court said that governments could continue to ban false or misleading commercial speech , noting in another case that \"the public and private benefits from commercial speech derive from confidence in its accuracy and reliability.\" It was against this background that the Court in Zauderer concluded that the provision requiring the disclosure of factual information about contingent fee arrangements did not involve First Amendment interests \"of the same order as those\" involved in other cases involving the compulsion of noncommercial speech. Accordingly, the state acted reasonably by prescribing that attorneys had to include in their advertising \"purely factual and uncontroversial information about the terms under which [their] services [would] be available.\" "], "subsections": [{"section_title": "Factual and Uncontroversial", "paragraphs": ["The first element for a commercial disclosure requirement to be eligible for Zauderer review is that the government regulation must require the disclosure of \"factual and uncontroversial\" information. The two parts of Zauderer's initial requirement are often evaluated as one, although courts have sometimes pointed out that \"factual\" and \"uncontroversial,\" logically, connote two different things. Viewing the two words together, some have characterized the \"factual and uncontroversial\" requirement as distinguishing regulations that compel the disclosure of facts from those that compel individuals to state opinions or ideologies. ", "As discussed, the Supreme Court has said that the value of commercial speech largely lies in its ability to inform consumers. And in Zauderer , the Court emphasized that because protection for commercial speech is justified by its informational value, the attorney challenging the disclosure requirement had a \"minimal\" First Amendment interest \"in not providing any particular factual information in his advertising.\" As the Second Circuit has explained: ", "Commercial disclosure requirements are treated differently from restrictions on commercial speech because mandated disclosure of accurate, factual, commercial information does not offend the core First Amendment values of promoting efficient exchange of information or protecting individual liberty interests. Such disclosure furthers, rather than hinders, the First Amendment goal of the discovery of truth and contributes to the efficiency of the \"marketplace of ideas.\" Protection of the robust and free flow of accurate information is the principal First Amendment justification for protecting commercial speech, and requiring disclosure of truthful information promotes that goal. In such a case, then, less exacting scrutiny is required than where truthful, nonmisleading commercial speech is restricted.", "In this vein, the Supreme Court upheld disclosure requirements regarding the nature of contingent fee arrangements in Zauderer and statements clarifying the nature of the bankruptcy-related assistance provided by debt relief agencies in Milavetz . Lower courts have approved as \"factual and uncontroversial\" within the meaning of Zauderer a variety of other commercial disclosure requirements, including regulations requiring the disclosure of: country-of-origin information for meat; calorie information at restaurants; the fact that products contain mercury; and textual and graphic warnings about the health risks of tobacco products. ", "By contrast, in a 2015 opinion, the D.C. Circuit concluded that a federal regulation requiring firms to disclose whether their products used \"conflict minerals\" that originated \"in the Democratic Republic of the Congo or an adjoining country\" could not be characterized as factual and uncontroversial. The court said that \"[t]he label '[not] conflict free' is a metaphor that conveys moral responsibility for the Congo war. . . . An issuer, including an issuer who condemns the atrocities of the Congo war in the strongest terms, may disagree with that assessment of its moral responsibility. . . . By compelling an issuer to confess blood on its hands, the statute interferes with that exercise of the freedom of speech under the First Amendment.\"", "Similarly, the Seventh Circuit, in a 2006 opinion, held that disclosure requirements in a state law regulating sexually explicit video games were not \"factual and uncontroversial\" as required for Zauderer to apply. In relevant part, the law required \"video game retailers to place a four square-inch label with the numerals '18' on any 'sexually explicit' video game,\" and to post signs and provide brochures \"explaining the video game rating system.\" The court held first that the sticker \"ultimately communicates a subjective and highly controversial message\u2014that the game's content is sexually explicit.\" Similarly, the panel concluded that \"the message\" communicated by the signs and brochures was \"neither purely factual nor uncontroversial\" because it was \"intended to communicate that any video games in the store can be properly judged pursuant to the standards described in the . . . ratings.\"", "As mentioned above, some courts have treated \"factual\" and \"uncontroversial\" as two distinct requirements. But at times, courts have struggled to define \"controversial,\" standing alone. The D.C. Circuit has suggested that controversial must mean that a disclosure \"communicates a message that is controversial for some reason other than dispute about simple factual accuracy.\" One trial court interpreting a decision of the Second Circuit suggested that \"it is the nature of the regulation of compelled speech that controls, not the nature of the legislative debate that gave rise to its enactment.\" That court then noted that other courts had equated controversial messages with disclosures that are \"opinion-based.\" Courts have disagreed about whether a disclosure may be characterized as \"controversial\" because it is \"inflammatory\" or \"evoke[s] an emotional response.\" In NIFLA , the Supreme Court struck down the licensed notice after noting that the required disclosures related to \"abortion, anything but an 'uncontroversial' topic,\" although it did not further explain when a topic is \"uncontroversial\" for purposes of Zauderer. "], "subsections": []}, {"section_title": "Related to Speaker's Services", "paragraphs": ["Second, to be eligible for review under Zauderer , a commercial disclosure requirement must be related to the services provided by the speaker. In Zauderer itself, the Court had noted that the disputed disclosure required the attorney to provide information in his advertising \"about the terms under which his services will be available.\" By and large, lower courts, at least prior to NIFLA, had not treated this relationship to the speaker's services as a distinct requirement. The Court in NIFLA , however, said that this was a necessary prerequisite for Zauderer review and held in that case that the notice requirement for licensed clinics at issue was not \"relate[d] to the services that licensed clinics provide\" because it instead provided information \"about state -sponsored services.\" "], "subsections": []}, {"section_title": "Intended to Prevent Deception", "paragraphs": ["Judges have disagreed on whether there exists a third requirement for Zauderer review. In Zauderer itself, the Supreme Court noted that the disclosure requirements at issue in that case were intended to \"prevent[] deception of customers.\" Further, when applying Zauderer review to the bankruptcy-related disclosures at issue in Milavetz , the Court stated that the disclosures were \"intended to combat the problem of inherently misleading commercial advertisements.\" Perhaps most notably, in United Foods , the Court explained its decision not to apply Zauderer by noting that there was \"no suggestion\" that the compelled subsidies at issue in that case were \"somehow necessary to make voluntary advertisements nonmisleading for consumers.\" ", "The Supreme Court's decisions applying Zauderer have thus suggested that one factor in deciding whether to apply this \"reasonably related\" review is whether the targeted commercial speech is misleading, or whether the state's interest in requiring the disclosure is to prevent \"consumer confusion or deception.\" Nonetheless, the Court has not squarely held that this is a necessary condition for Zauderer review, and several lower courts have rejected this position. The D.C. Circuit concluded that Zauderer 's justification characterizing \"the speaker's interest in opposing forced disclosure of such information as 'minimal' seems inherently applicable beyond\" the state's \"interest in remedying deception.\" The Second Circuit has also held that Zauderer review applies more broadly. In rejecting a litigant's argument that the Supreme Court's decision in United Foods limited Zauderer only to laws intended to prevent consumer deception, the Second Circuit said that United Foods \"simply distinguishes Zauderer on the basis that the compelled speech in Zauderer was necessary to prevent deception of consumers; it does not provide that all other disclosure requirements are subject to heightened scrutiny.\""], "subsections": []}]}, {"section_title": "Zauderer Review", "paragraphs": ["If a commercial disclosure requirement involves only \"purely factual and uncontroversial information\" about the goods or services being sold, and is therefore eligible for review under Zauderer , then it will be constitutional so long as the disclosure requirement is \"reasonably related\" to the government's interest. This reasonableness review is relatively lenient, especially as compared with the standards that would otherwise apply to compelled speech. But, as emphasized in NIFLA , even under Zauderer , \"unjustified or unduly burdensome disclosure requirements might offend the First Amendment by chilling protected commercial speech.\" Lower courts had previously come to different conclusions regarding whether \"unjustified or unduly burdensome\" presented an additional inquiry, to be conducted separately from the reasonableness inquiry otherwise prescribed by Zauderer , or whether instead this inquiry was subsumed by the \"reasonably related\" inquiry. NIFLA did not entirely resolve this issue, although it did frame its analysis using the \"unjustified or unduly burdensome\" language rather than the language of rational basis review. "], "subsections": [{"section_title": "Government Interest", "paragraphs": ["In Zauderer , the Supreme Court upheld the contingent fee disclosure after concluding that the requirement was \"reasonably related to the State's interest in preventing deception of consumers.\" But as noted above, lower courts have largely concluded that Zauderer 's reasonableness review may govern the analysis even when the government asserts an interest other than preventing consumer deception. The D.C. Circuit has, so far, largely declined to articulate a clear standard for \"what type of interest might suffice.\" That court did conclude in one case that where the government's interest was \"substantial under Central Hudson 's standard,\" that would qualify as a sufficient interest under Zauderer . Perhaps taking a different approach, in a case upholding a disclosure requirement under Zauderer , the Second Circuit described the state's interest as \"legitimate and significant.\" ", "Other than \"the interest in correcting misleading or confusing commercial speech,\" the federal courts of appeals have upheld commercial disclosure requirements where the government asserted interests in food safety, preventing obesity, \"protecting human health and the environment from mercury poisoning,\" and in protecting health benefit providers \"from questionable . . . business practices.\" By contrast, the Second Circuit held in International Dairy Foods Association v. Amestoy that \"consumer curiosity alone is not a strong enough state interest to sustain the compulsion of even an accurate, factual statement.\"", "In NIFLA , the Supreme Court indicated that under Zauderer , the government must assert an interest that is \"more than 'purely hypothetical.'\" As discussed above, the State of California's justification for the notice requiring unlicensed clinics to disclose that they were unlicensed was to \"ensur[e] that pregnant women in California know when they are getting medical care from licensed professionals.\" The Court concluded that the state had \"point[ed] to nothing suggesting that pregnant women do not already know that the covered facilities are staffed by unlicensed medical professionals.\" NIFLA 's requirement that the government provide evidence supporting an asserted interest differs from the Court's approach in Zauderer itself and in Milavetz . In both Zauderer and Milavetz , the Court rejected arguments that the government had failed to present sufficient evidence to support its interest in the disclosure requirement, concluding that in both of those cases, \"the possibility of deception\" in the regulated advertisements was \"self-evident.\" Although the standard is not entirely clear, it is possible that in future cases the Court could conclude again that a particular advertisement is so obviously deceptive that the government does not need to submit significant evidence proving that the advertisements are misleading."], "subsections": []}, {"section_title": "\"Reasonably Related\"", "paragraphs": ["If the government has asserted a sufficient interest, then under Zauderer , it needs to show only that the disputed disclosure requirement is \"reasonably related\" to that interest. Describing the Supreme Court's decision in Zauderer , the D.C. Circuit has said that the \"evidentiary parsing\" required by more rigorous First Amendment tests \"is hardly necessary when the government uses a disclosure mandate to achieve a goal of informing consumers about a particular product trait, assuming of course that the reason for informing consumers qualifies as an adequate interest.\" That court further elaborated that \"[t]he self-evident tendency of a disclosure mandate to assure that recipients get the mandated information may in part explain why, where that is the goal, many such mandates have persisted for decades without anyone questioning their constitutionality.\" Similarly, the Second Circuit has observed in one case that \"while the First Amendment precludes the government from restricting commercial speech without showing that 'the harms it recites are real and that its restriction will in fact alleviate them to a material degree,'\" the First Amendment \"does not demand 'evidence or empirical data' to demonstrate the rationality of mandated disclosures in the commercial context.\" ", "Notwithstanding the suggestion that little evidence is required to show that a disclosure requirement is reasonably related to an appropriate government interest, lower courts have often relied on the government's evidence supporting the disputed requirement when they uphold the provision. This showing may be easiest where the government asserts an interest in preventing misleading speech, given \"the self-evident tendency of a disclosure mandate to assure that recipients get the mandated information.\" Additionally, courts have sometimes held that commercial disclosure requirements fail even this lenient test for rationality, particularly where the government has asserted an interest other than preventing consumer confusion. For example, in National Association of Manufacturers v. SEC , the D.C. Circuit held that a provision requiring companies to disclose whether their products were \"conflict free\" violated the First Amendment. In defending this rule, the government asserted an interest in \"ameliorat[ing] the humanitarian crisis in the [Democratic Republic of the Congo (DRC)].\" In the court's view, however, the government had failed to demonstrate that its measure would achieve this interest. The D.C. Circuit observed that the government had \"offered little substance beyond\" statements by political officials to support \"the effectiveness of the measure.\" The court assumed that the government's theory \"must be that the forced disclosure regime will [lead to boycotts that] decrease the revenue of armed groups in the DRC and their loss of revenue will end or at least diminish the humanitarian crisis there.\" But in the view of the court, this theory could not justify the regulation, as the idea was \"entirely unproven and rest[ed] on pure speculation.\"", "To take another example, the Third Circuit struck down a commercial disclosure requirement concerning attorney advertising in Dwyer v. Cappell . In that case, an attorney challenged a state regulation that prohibited attorneys from using quotations from judicial opinions in their advertising unless they presented \"the full text\" of those opinions. The state argued that such quotations were \"inherently misleading because laypersons . . . would understand them to be judicial endorsements.\" The court, however, said that even assuming \"that excerpts of judicial opinions are potentially misleading to some persons,\" the state had failed \"to explain how [an attorney's] providing a complete judicial opinion somehow dispels this assumed threat of deception.\" The court reasoned that \"providing a full judicial opinion does not reveal to a potential client that an excerpt of the same opinion is not an endorsement.\" Additionally, the court held that the disputed requirement was \"unduly burdensome,\" as it \"effectively rules out the possibility that [an attorney] can advertise with even an accurately quoted excerpt of a judicial statement about his abilities.\" And in the view of the Third Circuit, \"that type of restriction\u2014an outright ban on advertising with judicial excerpts\u2014would properly be analyzed under the heightened Central Hudson standard of scrutiny.\"", "As Dwyer suggests, courts may strike down disclosure requirements under Zauderer if the requirement is \"unduly burdensome.\" In NIFLA , the Supreme Court held that the unlicensed notice was likely unconstitutional because it \"unduly burden[ed] protected speech,\" noting that it applied to all advertisements for these licensed facilities, regardless of their content. In particular, the majority opinion highlighted one hypothetical discussed at oral argument, noting that \"a billboard for an unlicensed facility that says 'Choose Life' would have to surround that two-word statement with a 29-word statement from the government, in as many as 13 different languages.\" In this instance, the Court said, the notice would \"drown[] out the facility's own message,\" and therefore be unduly burdensome."], "subsections": []}]}]}, {"section_title": "Heightened Standards: Central Hudson and Strict Scrutiny", "paragraphs": ["If a commercial disclosure requirement is not a factual and uncontroversial disclosure related to the speaker's goods or services under Zauderer , courts will likely apply a heightened standard of review. Under prevailing Supreme Court precedent, if a provision does not qualify for Zauderer 's reasonableness review, a court may review the challenged regulation under Central Hudson . As discussed above, Central Hudson established the general standard of review for government restrictions on commercial speech. The Supreme Court described \"a four-part analysis:\"", "At the outset, we must determine whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. Next, we ask whether the asserted governmental interest is substantial. If both inquiries yield positive answers, we must determine whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest.", "The Court has described the Central Hudson test as \"intermediate\" scrutiny. If a disclosure requirement affects commercial speech but does not qualify for Zauderer review, courts have generally held that Central Hudson 's intermediate scrutiny applies. ", "However, courts have sometimes suggested that some higher standard of review, more stringent than Central Hudson 's intermediate scrutiny, should apply to commercial disclosure requirements that do not qualify for review under Zauderer . Some lower court judges have concluded that because such disclosures compel particular speech and are by definition not content-neutral, they should be evaluated under strict scrutiny. In contrast to Central Hudson review, which requires the government to show that a law is \"not more extensive than is necessary to serve\" a \"substantial\" interest, strict scrutiny \"requires the Government to prove that the restriction furthers a compelling interest and is narrowly tailored to achieve that interest.\"", "The Supreme Court has suggested\u2014but not squarely held\u2014that at least some types of commercial disclosure requirements might be subject to some form of scrutiny more strict than Central Hudson . In NIFLA , the Supreme Court considered the constitutionality of state provisions requiring crisis pregnancy centers to make certain disclosures to clients and in their advertising. The Court suggested that the provision requiring licensed facilities to disseminate notices about state-provided services might be subject to strict scrutiny as a content-based regulation of speech, but concluded that it did not need to resolve that question because the notice could not \"survive even intermediate scrutiny.\" ", "Significantly, however, the NIFLA Court never described the licensed notice as involving commercial speech. In the decision below, the Ninth Circuit had held that the notice should not be subject to strict scrutiny because it regulated \"professional speech.\" That court, like other federal courts of appeals, had recognized \"speech that occurs between professionals and their clients in the context of their professional relationship\" \"as a separate category of speech that is subject to different rules.\" The Ninth Circuit had concluded that speech that was part of the practice of a profession could be regulated by the state, subject only to intermediate scrutiny. The Court rejected this idea, saying that the First Amendment does not encompass a tradition of lower scrutiny \"for a category called 'professional speech.'\" ", "Ultimately, the Court said that it saw no \"persuasive reason\" to treat \"professional speech as a unique category that is exempt from ordinary First Amendment principles.\" To the extent that \"professional speech\" could be seen to overlap with commercial speech, this sentence could be read to suggest that commercial speech should also be subject to \"ordinary First Amendment principles.\" This suggestion would seem to conflict with prior cases saying that commercial speech occupies a \"subordinate position in the scale of First Amendment values.\" Although the NIFLA Court implicitly suggested that disclosure requirements for professionals might constitute commercial speech by evaluating the FACT Act's requirements under Zauderer and Central Hudson , it never expressly clarified whether \"professional speech\" overlaps with commercial speech.", "Because the FACT Act's requirements applied outside of the advertising context, it may be open to some debate whether these licensed notices involved commercial speech. The unlicensed notice challenged in NIFLA was required to be included in advertising, and advertisements are \"classic examples of commercial speech.\" But the unlicensed notice was also required to be posted on-site, and the state required licensed facilities to post disclosures on-site or to otherwise distribute the notice to clients directly. Further, in a similar context, at least one federal court of appeals concluded that a Baltimore ordinance requiring certain pregnancy centers to make specified disclosures regulated noncommercial speech. That court said the pregnancy centers were not motivated by economic interest or proposing a commercial transaction, but were instead \"provid[ing] free information about pregnancy, abortion, and birth control as informed by a religious and political belief.\" If the licensed disclosures in NIFLA did not regulate commercial speech, then it would be unsurprising that the Court would consider applying strict scrutiny rather than Central Hudson .", "Others, however, have pointed out that crisis pregnancy centers, even if they do not charge fees, operate \"in a marketplace where other providers generally charge fees,\" and argued that these centers \"are engaged in commercial activity by providing physical and mental health services to pregnant women.\" And more generally, some have pointed out the similarities between \"professional\" and commercial speech. The fact that the NIFLA Court did not directly address the relationship between professional and commercial speech may suggest that heightened scrutiny may be necessary with respect to some commercial disclosure requirements. Specifically, the Court did not cite the commercial speech doctrine as \"a persuasive reason for treating professional speech as a unique category that is exempt from ordinary First Amendment principles.\" At least one commentator has argued that the Court's failure to mention Central Hudson \u2014\"not even to dismiss it as . . . another inapposite exception to Reed 's general rule [of strict scrutiny]\"\u2014may suggest that the Court is seeking to limit Central Hudson 's holding that commercial speech may be more freely regulated than other speech under the First Amendment.", "Although NIFLA may not have expressly altered the framework used to evaluate commercial disclosure requirements, it may nonetheless signal that the Supreme Court will view them with more skepticism in the future. The majority opinion, authored by Justice Thomas, emphasized that \"[t]he dangers associated with content-based regulations of speech are also present in the context of professional speech.\" Even if \"professional speech\" is not coterminous with \"commercial speech,\" this statement does seem to suggest that the Court believes content neutrality principles are relevant in the commercial sphere. In dissent, Justice Breyer, viewing the majority opinion as adopting such a view, argued that the majority's approach, \"if taken literally, could radically change prior law, perhaps placing much securities law or consumer protection law at constitutional risk.\" He pointed out that \"[v]irtually every disclosure law could be considered 'content based,' for virtually every disclosure law requires individuals 'to speak a particular message.'\" ", "In response to Justice Breyer, the NIFLA majority stated that it did not \"question the legality of health and safety warnings long considered permissible, or purely factual and uncontroversial disclosures about commercial products.\" This view echoed the Court's prior statement that \"[p]urely commercial speech is more susceptible to compelled disclosure requirements.\" Following the Court's 2010 decision in Reed , in which the Court articulated a more \"precise test to determine whether speech regulations are content based,\" many lower courts had rejected the idea that content-based requirements affecting only commercial speech should be subject to strict scrutiny, even if they otherwise discriminated based on content under Reed . But because NIFLA appeared to suggest that content neutrality is relevant in the commercial sphere, it seems reasonable to think that lower courts may now be more likely to conclude that strict scrutiny could apply to content-based commercial disclosure requirements. This would be consistent with what some commentators have described as the Court's increasingly heightened scrutiny of restrictions on commercial speech.", "For now, though, Central Hudson generally continues to govern the analysis of government actions affecting lawful, non-misleading commercial speech, including commercial disclosure requirements that do not qualify for Zauderer review. As discussed, Central Hudson requires that the government prove that its interest is \"substantial,\" and that the regulation \"directly advances\" that interest and is \"not more extensive than is necessary to serve that interest.\" Government regulations are more likely to fail this more rigorous standard than the Zauderer reasonableness standard, often because a court believes there is some less restrictive means available for the government to achieve its goals. Courts will require more \"evidence of a measure's effectiveness\" under Central Hudson , as compared to Zauderer .", "However, Central Hudson is more forgiving than strict scrutiny, and courts do uphold government actions infringing on commercial speech under Central Hudson . For example, in Spirit Airlines v. Department of Transportation , the D.C. Circuit concluded that a federal regulation governing the way that airlines must display flight prices \"satisfie[d] . . . the Central Hudson test.\" In the court's view, \"[t]he government interest\u2014ensuring the accuracy of commercial information in the marketplace\u2014[was] clearly and directly advanced by a regulation requiring that the total, final price be the most prominent\" price displayed. And the regulation was \"reasonably tailored to accomplish that end\" because the rule \"simply regulate[d] the manner of disclosure.\"", "Government actions are unlikely to be upheld if a court applies strict scrutiny. Nonetheless, some scholars have argued that many disclosure requirements might survive strict scrutiny, and the Supreme Court has, in rare instances, said that the government may \"directly regulate speech to address extraordinary problems, where its regulations are appropriately tailored to resolve those problems without imposing an unnecessarily great restriction on speech.\" It is possible that a court could hold that the government has a compelling interest in protecting consumers, for example, and that particular disclosures are narrowly tailored to meet that interest. The Supreme Court has long emphasized that the government can regulate commercial activity \"deemed harmful to the public.\" But a court would likely require more proof from the government under strict scrutiny and likely would not simply accept the government's allegations as \"self-evident\" under such review."], "subsections": []}]}, {"section_title": "Considerations for Congress", "paragraphs": ["Congress has enacted a wide variety of disclosure requirements, many of which arguably compel commercial speech. For example, the Securities and Exchange Act of 1934 sets out disclosure requirements for registering securities. Federal law, among a host of other food labeling requirements, requires \"bioengineered food\" to bear a label disclosing that the food is bioengineered. Direct-to-consumer advertisements for prescription drugs must contain a series of disclosures, including the drug's name and side effects. Certain appliances must contain labels disclosing information about their energy efficiency. Bills in the 115 th and 116 th Congresses have proposed additional disclosure requirements, including a bill that would require large online platforms to disclose any studies conducted on users for the purposes of promoting engagement, and a bill that would require public companies to disclose climate-related risks.", "Recent Supreme Court precedent suggests that the Court is more closely reviewing commercial disclosure requirements, perhaps moving away from a more deferential treatment of such provisions. In NIFLA , the Court held that a disclosure requirement was likely unconstitutional under Zauderer because the government had not presented sufficient evidence to justify the measure \u2014even though in other cases, the Court had rejected similar challenges to commercial disclosure requirements, saying that the government did not need to present more evidence because the harm it sought to remedy was \"self-evident.\" Further, the Court has recently suggested that if a law regulating commercial speech discriminates on the basis of content\u2014as all disclosure requirements seemingly do \u2014then this content discrimination might subject the law to heightened scrutiny. If the Court further embraces this view, it could be a marked departure from its opinions holding that commercial speech could be regulated on the basis of its content, so long as the government's justification for the content discrimination were sufficiently related to its legitimate interests in regulating the speech.", "In concurring and dissenting opinions that have been joined by other Justices, Justice Breyer has argued that insofar as the Court's recent decisions suggest that commercial disclosure requirements should be subject to heightened scrutiny, they are inconsistent with prior case law and are not a proper application of the First Amendment. The Supreme Court said in NIFLA that it was \"not question[ing] the legality of health and safety warnings long considered permissible, or purely factual and uncontroversial disclosures about commercial products.\" And lower courts have frequently upheld commercial disclosure requirements, perhaps suggesting that disclosures of the kind cited by Justice Breyer are not in danger of wholesale invalidation under the First Amendment. However, the majority opinion in NIFLA did not clarify what kind of disclosures it would consider permissible, and its opinion made clear that disclosure requirements should be scrutinized in light of the speakers they cover and the burdens they pose. Moreover, although the NIFLA Court said that it was not questioning these disclosures' \"legality,\" it left open the possibility that these disclosure should nonetheless be subject to heightened scrutiny. This statement may mean only that the Court believes that many commercial disclosure requirements would meet a higher standard of scrutiny.", "At least one federal appellate court seems to have taken NIFLA as a signal that lower courts should more closely scrutinize commercial disclosure requirements. In American Beverage Association v. City & County of San Francisco , the Ninth Circuit, sitting en banc , relied on NIFLA to reverse a prior decision that had upheld an ordinance requiring \"health warnings on advertisements for certain sugar-sweetened beverages.\" While a panel of judges had previously concluded that the disclosure requirement was constitutional under Zauderer , the full Ninth Circuit, reviewing that decision, said: \" NIFLA requires us to reexamine how we approach a First Amendment claim concerning compelled speech.\" Namely, the court held that, in light of NIFLA , the health warnings were likely unjustified and unduly burdensome under Zauderer , noting that the regulation required the warnings to \"occupy at least 20% of those products' labels or advertisements\"\u2014but that the record showed that \"a smaller warning\u2014half the size\u2014would accomplish [the government's] stated goals.\" As such, the court held that the warnings violated the First Amendment \"by chilling protected speech.\"", "Accordingly, when Congress and federal agencies consider adopting new commercial disclosure requirements, or reauthorizing old ones, it may be wise to develop a record with more evidence demonstrating a need for the regulation. Under any level of scrutiny, courts will examine the government's asserted purpose for the legislation, as well as how closely tailored the disclosure requirement is to achieve that purpose. Under Zauderer , particularly in light of NIFLA , courts may ask for evidence to support the government's claim that the regulated speech is misleading or that the government has some other interest in regulating that speech, and will likely scrutinize the disclosure requirement to make sure it is not unduly burdensome. Under intermediate scrutiny or strict scrutiny, a court may also ask whether the government considered alternative policies that would be less restrictive of speech, examining more closely the government's justifications for choosing a disclosure requirement."], "subsections": []}]}}
{"id": "R45633", "title": "Iraq: Issues in the 116th Congress", "released_date": "2019-03-26T00:00:00", "summary": ["Iraq's government declared military victory against the Islamic State organization (IS, also ISIS/ISIL) in December 2017, but insurgent attacks by remaining IS fighters continue to threaten Iraqis as they shift their attention toward recovery and the country's political future. Approximately 5,000 U.S. troops remain in Iraq at the invitation of the Iraqi government and provide advisory and training support to Iraqi security forces. However, some Iraqi political groups are calling for U.S. and other foreign troops to depart, and they may seek to force Iraqi government action on this question during 2019.", "Elections and Politics. Iraqis held national elections in May 2018, electing members to Iraq's unicameral legislature, the 329-seat Council of Representatives (COR). Political factions spent months negotiating in a bid to identify a majority bloc of legislators to form the next government, but the distribution of seats and alignment of actors precluded the emergence of a dominant coalition. Meanwhile, protests and violence in southern Iraq highlighted some citizens' outrage with poor service delivery, lack of economic opportunity, and corruption. In October, the COR chose former Kurdistan Regional Government (KRG) Prime Minister and former Iraqi Deputy Prime Minister Barham Salih as Iraq's President. Salih, in turn, named former Oil Minister Adel Abd al Mahdi as Prime Minister-designate and directed him to assemble a slate of cabinet officials for COR approval. Abd al Mahdi is a consensus figure acceptable to rival factions, but he does not lead a party or parliamentary group of his own. COR members have confirmed most of Abd al Mahdi's cabinet nominees, but key political groups are at an impasse over certain ministries, including the Ministry of Interior and the Ministry of Defense.", "Iraqi politicians have increasingly reached across sectarian political and economic lines in recent years in an attempt to appeal to disaffected citizens, but ethnic and religious politics remain relevant and Iraqi citizens remain frustrated with government performance. Iraq's neighbors and other outsiders, including the United States, are pursuing their respective interests in Iraq, and their competition creates additional challenges for Iraqi leaders. Paramilitary forces have grown stronger and more numerous in Iraq since 2014, and have yet to be fully integrated into national security institutions. Some figures associated with the volunteer Popular Mobilization Forces (PMF) that were organized to fight the Islamic State participated in the 2018 election and won COR seats, including critics of U.S. policy who have ties to Iran and are demanding the United States withdraw its military forces.", "The Kurdistan Region. The Kurdistan Region of northern Iraq (KRI) enjoys considerable administrative autonomy under the terms of Iraq's 2005 constitution, and the KRG held legislative elections on September 30, 2018. The KRG had held a controversial advisory referendum on independence in September 2017, amplifying political tensions with the national government, which then moved to reassert security control of disputed areas that had been secured by Kurdish forces after the Islamic State's mid-2014 advance. National government security forces and Kurdish peshmerga are deployed along contested lines of control, as leaders negotiate a host of sensitive issues.", "Stabilization and Reconstruction. Daunting resettlement, stabilization, and reconstruction needs face Iraqi citizens and leaders as they look to the future. More than 4 million Iraqis uprooted during the war with the Islamic State group have returned to their home communities, but many of the estimated 1.7 million Iraqis who remain internally displaced face significant political, economic, and security barriers to safe and voluntary return. Stabilization efforts in areas recaptured from the Islamic State are underway with United Nations and other international support, but many immediate post-IS stabilization priorities and projects are underfunded. Iraqi authorities have identified $88 billion in broader reconstruction needs to be met over the next decade.", "U.S. Policy and Issues for Congress. In general, U.S. engagement in Iraq since 2011 has sought to reinforce unifying trends and avoid divisive outcomes. The Trump Administration seeks to continue to train and support Iraqi security forces, while hoping to limit negative Iranian influence. The 116th Congress is considering Administration requests for funding to provide security assistance, humanitarian relief, and foreign aid in Iraq and may debate authorities for and provide oversight of the U.S. military presence in Iraq and security cooperation and aid programs. For background, see CRS Report R45025, Iraq: Background and U.S. Policy."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["After over 15 years characterized by conflict, violence, and zero-sum political competition, Iraqis are working to open a new chapter in their country's development and are debating the future of their relationship with the United States. The Iraqi government declared military victory against the Islamic State organization in December 2017, but insurgent attacks by remaining IS fighters continue to threaten Iraqis in some areas. Iraq's security forces are rebuilding after years of intense fighting. Notwithstanding significant U.S. and international assistance, Iraq's security forces still lack some operational, intelligence, logistical, and management capabilities needed to protect their country. More than 4 million internally displaced Iraqis have returned home, but extensive stabilization and reconstruction are needed in liberated areas. An estimated 1.7 million Iraqis remain as internally displaced persons (IDPs), and Iraqi authorities have identified $88 billion in reconstruction needs over the next decade.", "U.S. and other foreign troops remain in Iraq at the invitation of the Iraqi government and provide advisory and training support to the Iraqi Security Forces (ISF), including peshmerga forces associated with the Kurdistan Regional Government (KRG). However, some Iraqi political groups\u2014including some with ties to Iran\u2014are pushing for U.S. and other foreign troops to depart; they may force formal consideration of a resolution to that effect in the Iraqi parliament. Such a resolution would likely be nonbinding (if adopted), but nevertheless could create significant political and diplomatic complications for U.S. and Iraqi leaders, and might prompt more fundamental policy reconsiderations on both sides.", "The Iranian government has viewed instability in neighboring Iraq as a threat and an opportunity since 2003, and works to influence the security sector decisions of Iraqi leaders. It also maintains ties to some armed groups in Iraq, including some units of the Popular Mobilization Forces (PMF)\u2014volunteer militias recruited to fight the Islamic State. The PMF have been recognized as an enduring component of Iraq's national security establishment pursuant to a 2016 law that calls for their integration under existing command structures and administration. U.S. officials have recognized the contributions that PMF volunteers have made to Iraq's fight against the Islamic State; they also remain wary of the potential for Iran-linked elements of the PMF to evolve into permanent proxy forces, whether they remain tied to the Iraqi state or work outside formal Iraqi government and military control. U.S. policy seeks to support the long-term development of Iraq's military, counterterrorism, and police services as alternatives to the continued use of PMF units to secure Iraq's borders, communities, and territory recaptured from the Islamic State. ", "U.S. concerns about Iranian government policies have intensified in recent years, and Iraq has become a venue for U.S.-Iranian competition. Iran's government supported insurgent attacks on U.S. forces during the U.S. presence from 2003 to 2011. Since then, U.S.-Iranian competition has remained contained and nonviolent, but there is no certainty it will remain so, as demonstrated by indirect fire attacks in 2018 on U.S. diplomatic facilities, attacks attributed by U.S. officials to Iranian proxy groups. Iraqi leaders are trying to prevent their country from being used as a battleground for regional and international rivalries and seek to build positive, nonexclusive ties to their neighbors and global powers.", "Broad U.S. efforts to put pressure on Iran extend to the Iraqi energy sector, where years of sanctions, conflict, neglect, and mismanagement have left Iraq dependent on purchases of natural gas and electricity from its Iranian neighbors. Since 2018, Iraqi leaders have sought relief from U.S. sanctions on related transactions with Iran. The Trump Administration has granted temporary permissions, and current U.S. initiatives encourage Iraq to diversify its energy relationships with its neighbors and develop more independence for its energy sector. U.S. officials promote U.S. companies as potential partners for Iraq through the expansion of domestic electricity generation capacity and the introduction of technology to capture the large amounts of natural gas that are currently flared (burned at wellheads).", "Oil production and exports are the lifeblood of Iraq's public finances and economy and have reached all-time highs. Oil export revenues provide Iraq's government with significant financial resources, but oil proceeds also have contributed to the creation of a state-centric economic model in which public sector employment and contracting have crowded out private sector activity. Public investment and reconstruction spending is financed through deficit spending, borrowing, and international aid, and Iraq's finances remain vulnerable to price changes in global oil markets. While Iraq's young, growing population and geographic location ( Table 1 ) make it an attractive market for foreign investment, bureaucratic constraints, service interruptions, corruption, and security and political concerns continue to deter some investors. The U.S. government supports Iraq's compliance with reform targets pursuant to IMF agreements and promotes an expansion of U.S.-Iraqi trade and investment ties. However, future U.S. investment prospects in Iraq may be contingent on the broader political and security relationship.", "Overall, the United States faces complicated choices in Iraq. The 2003 invasion unseated an adversarial regime, but unleashed more than a decade of violent insurgency and terrorism that divided Iraqis, while creating opportunities for Iran to strengthen its influence in Iraq and across the region. Since 2003, the United States has invested both militarily and financially in stabilizing Iraq. Since 2014, U.S. policy toward Iraq has focused on ensuring the defeat of the Islamic State as a transnational insurgent and terrorist threat. The Islamic State threat has been reduced, but Iraqi security needs remain considerable and both countries are examining the impetus and terms for continued U.S. investment in Iraq. ", "Successive U.S. Administrations have sought to keep U.S. involvement and investment minimal relative to the 2003-2011 era, pursuing U.S. interests through partnership with various entities in Iraq and the development of those partners' capabilities, rather than through extensive U.S. military deployments. U.S. economic assistance bolsters Iraq's ability to attract lending support and is aimed at improving the government's effectiveness and public financial management. The United States is the leading provider of humanitarian assistance to Iraq and also supports post-IS stabilization activities across the country through grants to United Nations agencies and other entities.", "The Trump Administration has sustained a cooperative relationship with the Iraqi government and has requested funding for FY2020 to support Iraq's stabilization and continue security training for Iraqi security forces. The size and mission of the U.S. military presence in Iraq have evolved as conditions on the ground have changed since 2017; they could change further if Iraqi officials revise their current requests for continued U.S. and international security assistance.", "The 116 th Congress has appropriated funds to provide security assistance, humanitarian relief, and foreign aid for Iraq ( P.L. 116-6 ), and is considering appropriations and authorization requests for FY2020 that would largely continue U.S. policies and programs on current terms. It remains to be seen whether Iraq and the United States will be able to pursue opportunities to build a bilateral relationship that is less defined by conflict and its aftermath. To do so, leaders on both sides will likely have to continue creatively managing unusually complex political and security challenges."], "subsections": []}, {"section_title": "Political and Security Dynamics", "paragraphs": ["Since the U.S.-led ouster of Saddam Hussein in 2003, Iraq's Shia Arab majority has exercised greater national power both in concert and in competition with the country's Sunni Arab and Kurdish minorities. While intercommunal identities and rivalries remain politically relevant, competition among Shia movements and coalition building across communal groups are now major factors in Iraqi politics. Notwithstanding their ethnic and religious diversity and political differences, many Iraqis advance similar demands for improved security, government effectiveness, and economic opportunity. Some Iraqi politicians have broadened their political and economic narratives in an attempt to appeal to disaffected citizens across the country. Years of conflict, poor service delivery, corruption, and sacrifice have strained the population's patience with the status quo, adding to the pressures that leaders face from the country's uncertain domestic and regional security environment.", "Although the Islamic State's exclusive control over distinct territories in Iraq has now ended, the U.S. intelligence community assessed in 2018 that the Islamic State \"has started\u2014and probably will maintain\u2014a robust insurgency in Iraq and Syria as part of a long-term strategy to ultimately enable the reemergence of its so-called caliphate.\" In January 2019, Director of National Intelligence Dan Coats told Congress that the Islamic State \"remains a terrorist and insurgent threat and will seek to exploit Sunni grievances with Baghdad and societal instability to eventually regain Iraqi territory against Iraqi security forces that are stretched thin.\" ", "The legacy of the war with the Islamic State strains security in Iraq in two other important ways. First, the Popular Mobilization Committee (PMC) and its militias\u2014the mostly Shia Popular Mobilization Forces (PMF) recruited to fight the Islamic State\u2014have been recognized as enduring components of Iraq's national security establishment. This is the case even as many PMF units continue to operate outside the bounds of their authorizing legislation and the control of the Prime Minister. The U.S. intelligence community considers Iran-linked Shia elements of the PMF to be the \"the primary threat to U.S. personnel\" in Iraq. ", "Second, national and KRG forces remain deployed across from each other along contested lines of control while their respective leaders are engaged in negotiations over a host of sensitive issues. Following a Kurdish referendum on independence in 2017, the Iraqi government expelled Kurdish peshmerga from some disputed territories they had secured from the Islamic State, and IS fighters now appear to be exploiting gaps in ISF and Kurdish security to survive. PMF units remain active throughout the territories in dispute between the Iraqi national government and the federally recognized Kurdistan Region of northern Iraq, with local populations in some areas opposed to the PMF presence. ", "Amid unrest in southern Iraq during late summer 2018, the State Department directed the temporary evacuation of U.S. personnel and temporary closure of the U.S. Consulate in Basra after indirect fire attacks on the consulate and the U.S. Embassy compound in Baghdad. U.S. officials attributed the attacks to Iran-backed forces and said that the United States would hold Iran accountable and would respond directly to attacks on U.S. facilities or personnel by Iran-backed entities. The incidents highlight the potential for U.S.-Iran tensions to escalate in Iraq."], "subsections": [{"section_title": "May 2018 Election, Unrest, and Government Formation", "paragraphs": ["Iraqis held national legislative elections in May 2018, electing members for four-year terms in the 329 seat Council of Representatives (COR), Iraq's unicameral legislature. Turnout was lower in the 2018 COR election than in past national elections, and reported irregularities led to a months-long recount effort that delayed certification of the results until August. Political factions spent the summer months negotiating in a bid to identify the largest bloc within the COR\u2014the parliamentary bloc charged with proposing a prime minister and new Iraqi cabinet ( Figure 2 ). ", "The distribution of seats and alignment of actors precluded the emergence of a dominant coalition. The Sa'irun (On the March) coalition led by populist Shia cleric and longtime U.S. antagonist Muqtada al Sadr's Istiqama (Integrity) list placed first in the election (54 seats), followed by the predominantly Shia Fatah (Conquest) coalition led by Hadi al Ameri of the Badr Organization (48 seats). Fatah includes several individuals formerly associated with the Popular Mobilization Committee (PMC) and its militias\u2014the mostly Shia Popular Mobilization Forces (PMF), which were recruited to fight the Islamic State. Those elected include some figures with ties to Iran (see \" The Future of the Popular Mobilization Forces \" and Figure 5 below). ", "Former Prime Minister Haider al Abadi's Nasr (Victory) coalition underperformed expectations to place third (42 seats), while former Prime Minister Nouri al Maliki's State of Law coalition, Ammar al Hakim's Hikma (Wisdom) list, and Iyad Allawi's Wataniya (National) list also won significant blocs of seats. Among Kurdish parties, the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK) won the most seats, and smaller Kurdish opposition lists protested alleged irregularities. As negotiations continued, Nasr and Sa'irun members joined with others to form the Islah (Reform) bloc in the COR, while Fatah and State of Law formed the core of a rival Bin'a (Reconstruction) bloc.", "Under an informal agreement developed through the formation of successive governments, Iraq's Prime Minister has been a Shia Arab, the President has been a Kurd, and the COR Speaker has been a Sunni Arab.", "In September, the first session of the newly elected COR was held, and members elected Mohammed al Halbousi, the Sunni Arab governor of Anbar, as COR Speaker. Hassan al Kaabi of the Sa'irun list and Bashir Hajji Haddad of the KDP were elected as First and Second Deputy Speaker, respectively. ", "In October, the COR met to elect Iraq's President, with rival Kurdish parties nominating competing candidates. COR members chose the PUK candidate\u2013former KRG Prime Minister and former Iraqi Deputy Prime Minister Barham Salih\u2014in the second round of voting. Salih, in turn, named former Oil Minister Adel Abd al Mahdi as Prime Minister-designate and directed him to assemble a slate of cabinet officials for COR approval. Abd al Mahdi is a consensus Shia Arab leader acceptable to the rival Shia groups in the Islah and Bina blocs, but he does not lead a party or parliamentary group of his own. Some observers of Iraqi politics assess Abd al Mahdi as generally pliable and unable to assert himself relative to others who have large followings or command armed factions. COR members have confirmed most of Abd al Mahdi's cabinet nominees, but the main political blocs remain at an impasse over the Ministries of Interior, Defense, and Justice. ", "As government formation talks proceeded during the summer of 2018, large protests and violence in southern Iraq highlighted some citizens' outrage with electricity and water shortages, lack of economic opportunity, and corruption. Unrest appeared to be amplified in some instances by citizens' anger about heavy-handed responses by security forces and militia groups. Dissatisfaction exploded in the southern province of Basra during August and September, culminating in several days and nights of mass demonstrations and the burning by protestors of the Iranian consulate in Basra and the offices of many leading political groups and militia movements. Arguably, the Abd al Mahdi government's success or failure in demonstrating progress on the issues that sparked the protests will be an important factor in determining its viability and longevity."], "subsections": []}, {"section_title": "Seeking the \"Enduring Defeat\" of the Islamic State", "paragraphs": ["As of March 2019, Iraqi security operations against IS fighters are ongoing in governorates in which the group formerly controlled territory or operated\u2014Anbar, Ninewa, Salah al Din, Kirkuk, and Diyala. These operations are intended to disrupt IS fighters' efforts to reestablish themselves as an organized threat and keep them separated from population centers. Press accounts and U.S. government reports describe continuing IS attacks on Iraqi Security Forces and Popular Mobilization Forces, particularly in rural areas. Independent analysts describe dynamics in parts of these governorates in which IS fighters threaten, intimidate, and kill citizens in areas at night or where Iraq's national security forces are absent. In some areas, new displacement has occurred as civilians have fled IS attacks. Overall, however violence against civilians has dropped considerably from its 2014 highs ( Figure 3 ). In cities like Mosul and Baghdad residents and visitors have enjoyed increased freedom of movement and security, although IS activity is reported in Mosul and fatal security incidents have occurred in areas near Baghdad and several other locations since January 2019 ( Figure 4 )."], "subsections": []}, {"section_title": "The Future of the Popular Mobilization Forces", "paragraphs": ["Iraq's Popular Mobilization Committee (PMC) and its associated militias\u2014the Popular Mobilization Forces (PMF)\u2014were founded in 2014 and have contributed to Iraq's fight against the Islamic State, but they have come to present an implicit challenge to the authority of the state. The PMF are largely but not solely drawn from Iraq's Shia Arab majority: Sunni, Turkmen, and Christian PMF militia also remain active. Despite expressing appreciation for PMF contributions to the fight against IS, some Iraqis and outsiders have raised concerns about the future of the PMC/PMF and some of its members' ties to Iran. ", "At issue has been the unwillingness of some PMC/PMF entities to subordinate themselves to the command of Iraq's elected government and the ongoing participation in PMC/PMF operations of groups reported to receive direct Iranian support. As noted above, the U.S. intelligence community has described Iran-linked Shia militia\u2014whether PMF or not\u2014as the \"primary threat\" to U.S. personnel in Iraq, and has suggested that the threat posed by Iran-linked groups will grow as they press for the United States to withdraw its forces from Iraq.", "Many PMF-associated groups and figures participated in the May 2018 national elections under the auspices of the Fatah coalition headed by Badr Organization leader Hadi al Ameri. Ameri and other prominent PMF-linked figures such as Asa'ib Ahl al Haq (League of the Righteous) leader Qa'is al Khazali nominally disassociated themselves from the PMC/PMF in late 2017, in line with legal prohibitions on the participation of PMC/PMF officials in politics. Nevertheless, their movements' supporters and associated units remain integral to some ongoing PMF operations, and the Fatah coalition's campaign arguably benefited from its PMF association. ", "During the election and in its aftermath, the key unresolved issue with regard to the PMC/PMF has remained the incomplete implementation of a 2016 law calling for the PMF to be incorporated as a permanent part of Iraq's national security establishment. In addition to outlining salary and benefit arrangements important to individual PMF volunteers, the law calls for all PMF units to be placed fully under the authority of the commander-in-chief (Prime Minister) and to be subject to military discipline and organization. Through early 2019, U.S. government reporting states that while some PMF units are being administered in accordance with the law, most remain outside the law's prescribed structure. This includes some units associated with Shia groups identified by U.S. government reports as receiving or as having received Iranian support. In January 2019, the U.S. intelligence community assessed that the PMC/PMF \"plan to use newfound political power gained through positions in the new government to reduce or remove the U.S. military presence while competing with the Iraqi security forces for state resources.\" ", "In general, the popularity of the PMF and broadly expressed popular respect for the sacrifices made by individual volunteers in the fight against the Islamic State create complicated political questions for Iraqi leaders. Iraqi law does not call for or foresee the dismantling of the PMC/PMF structure, and proposals to the contrary appear to be politically untenable at present. Given the ongoing role PMF units are playing in security operations against remnants of the Islamic State in some areas, rapid, wholesale redeployments of PMF units might create new opportunities for IS fighters to exploit in areas where replacement forces are not immediately available. That said, U.S. military officials report that \"competition over areas to operate and influence between the PMF and the ISF will likely result in violence, abuse, and tension in areas where both entities operate.\" "], "subsections": []}, {"section_title": "The Kurdistan Region and Relations with Baghdad", "paragraphs": ["The Kurdistan Region of northern Iraq (KRI) enjoys considerable administrative autonomy under the terms of Iraq's 2005 federal constitution, but issues concerning territory, security, energy, and revenue sharing continue to strain ties between the Kurdistan Regional Government (KRG) and the national government in Baghdad. In September 2017, the KRG held a controversial advisory referendum on independence, amplifying political tensions with the national government (see textbox below). The referendum was followed by a security crisis as Iraqi Security Forces and PMF fighters reentered some disputed territories that had been held by KRG peshmerga forces. P eshmerga fighters also withdrew from the city of Kirkuk and much of the governorate. Baghdad and the KRG have since agreed on a number of issues, including border and customs controls, the export of oil from some KRG-controlled fields, and the transfer of funds to pay the salaries of some KRG civil servants. As talks continue, the ISF and peshmerga remain deployed across from each other at various fronts throughout the disputed territories ( Figure 6 ). ", "The KRG delayed overdue legislative elections for the Kurdistan National Assembly in the wake of the referendum crisis and held them on September 30, 2018. Kurdish leaders have since been engaged in regional government formation talks while also participating in cabinet formation and budget negotiations at the national level. The KDP won a plurality (45) of the 111 KNA seats in the September 2018 election, with the Patriotic Union of Kurdistan (PUK) and smaller opposition and Islamist parties splitting the balance. With longtime KDP leader Masoud Barzani's term as president having expired in 2015, his nephew, KRG Prime Minister Nechirvan Barzani, appears set to succeed him. Masoud Barzani's son, security official Masrour Barzani, seems set to assume the KRG prime ministership.", "Since the election, factions within the PUK have appeared to have differences of opinion over KRG cabinet formation, while KDP and PUK differences have been apparent at the national level. During government formation talks in Baghdad, the KDP sought to name the Kurdish candidate for the Iraqi national presidency, but a majority of COR members instead chose Barham Salih, a PUK member. In March 2019, KDP and PUK leaders announced a four-year political agreement that reportedly includes joint commitments on the formation of the new KRG government and candidates for the Iraqi national Minister of Justice position and governorship of Kirkuk.", "U.S. officials have encouraged Kurds and other Iraqis to engage on issues of dispute and to avoid unilateral military actions. U.S. officials encourage improved security cooperation between the KRG and Baghdad, especially since IS remnants appear to be exploiting gaps created by the standoff in the disputed territories. KRG officials continue to express concern about the potential for an IS resurgence and chafe at operations by some PMF units in areas adjacent to the KRI."], "subsections": []}]}, {"section_title": "Humanitarian Issues and Stabilization", "paragraphs": [], "subsections": [{"section_title": "Humanitarian Conditions", "paragraphs": ["U.N. officials report several issues of ongoing humanitarian and protection concerns for displaced and returning populations and the host communities assisting them. With a range of needs and vulnerabilities, these populations require different forms of support, from immediate humanitarian assistance to resources for early recovery. Protection is a key priority in areas of displacement, where for example, harassment of displaced persons by armed actors and threats of forced return have occurred, as well as in areas of return. By December 2017, more Iraqis had returned to their home areas than those who had remained as internally displaced persons (IDPs) or who were becoming newly displaced. Nevertheless, humanitarian conditions remain difficult in many conflict-affected areas of Iraq. ", "As of February 28, 2019, more than 4.2 million Iraqis displaced after 2014 had returned to their districts, while more than 1.7 million individuals remained as displaced persons (IDPs). Ninewa governorate hosts the most IDPs of any single governorate (nearly one-third of the total), reflecting the lingering effects of the intense military operations against the Islamic State in Mosul and other areas during 2017 ( Table 2 ). Estimates suggest thousands of civilians were killed or wounded during the Mosul battle, which displaced more than 1 million people. ", "The Kurdistan Region of Iraq (KRI) hosts nearly 700,000 IDPs (approximately 40% of the 1.7 million remaining IDPs nationwide). IDP numbers in the KRI have declined since 2017, though not as rapidly as in some other governorates. According to IOM, conditions for IDPs in Dohuk governorate remain the most challenging in the KRI, where most IDPs live in camps or critical shelters (makeshift tents/abandoned buildings/informal settlements), according to International Organization for Migration surveys. ", "The U.N. Office for the Coordination of Humanitarian Affairs (UNOCHA) 2019 funding appeal, the Iraq Humanitarian Response Plan (HRP), anticipates that as many as 6.7 million Iraqis will require some form of humanitarian assistance in 2019 and seeks $701 million for 1.75 million of the most vulnerable Iraqis. As of March 2019, the appeal had received $6.5 million (1%). The United States was the top donor to the 2018 Iraq HRP. Since 2014, the United States has contributed nearly $2.5 billion to humanitarian relief efforts in Iraq, including more than $498 million in humanitarian support in FY2018. "], "subsections": []}, {"section_title": "Stabilization and Reconstruction", "paragraphs": ["U.S. stabilization assistance to areas of Iraq that have been liberated from the Islamic State is directed through the United Nations Development Program (UNDP)-administered Funding Facility for Stabilization (FFS) and through other channels. According to UNDP data, the FFS has received more than $830 million in resources since its inception in mid-2015, with 1,388 projects reported completed and a further 978 projects underway or planned with the support of UNDP-managed funding. ", "In January 2019, UNDP identified $426 million in stabilization program funding shortfalls in five priority areas in Ninewa, Anbar, and Salah al Din governorates \"deemed to be the most at risk to future conflict\" and \"integral for the broader stabilization of Iraq.\" The UNDP points to unexploded ordnance, customs clearance delays, and the growth in volume and scope of FFS projects as challenges to its ongoing work. ", "At a February 2018 reconstruction conference in Kuwait, Iraqi authorities described more than $88 billion in short- and medium-term reconstruction needs, spanning various sectors and different areas of the country. Countries participating in the conference offered approximately $30 billion worth of loans, investment pledges, export credit arrangements, and grants in response. The Trump Administration actively supported the participation of U.S. companies in the conference and announced its intent to pursue $3 billion in Export-Import Bank support for Iraq.", "Iraqi leaders hope to attract considerable private sector investment to help finance Iraq's reconstruction needs and underwrite a new economic chapter for the country. The size of Iraq's internal market and its advantages as a low-cost energy producer with identified infrastructure investment needs help make it attractive to investors. Overcoming persistent concerns about security, service reliability, and corruption, however, may prove challenging. The formation of the new Iraqi government and its success or failure in pursuing reforms may provide key signals to parties exploring investment opportunities."], "subsections": []}]}, {"section_title": "Economic and Fiscal Challenges", "paragraphs": ["The public finances of the national government and the KRG remain strained, amplifying the pressure on leaders working to address the country's security and service-provision challenges. The combined effects of lower global oil prices from 2014 through mid-2017, expansive public-sector liabilities, and the costs of the military campaign against the Islamic State have exacerbated national budget deficits. The IMF estimated Iraq's 2017-2018 financing needs at 19% of GDP. Oil exports provide nearly 90% of public-sector revenue in Iraq, while non-oil sector growth has been hindered over time by insecurity, weak service delivery, and corruption. The 2019 budget expands public salaries and investments. ", "Iraq's oil production and exports have increased since 2016, but fluctuations in oil prices undermined revenue gains until the latter half of 2017. Revenues have since improved, and Iraq has agreed to manage its overall oil production in line with mutually agreed Organization of the Petroleum Exporting Countries (OPEC) output limits. In February 2019, Iraq exported an average of nearly 4 million barrels per day (mbd, including KRG-administered oil exports), above the March 2019 budget's 3.9 mbd export assumption and at prices above the budget's $56 per barrel benchmark. The IMF projects modest GDP growth over the next five years and expects growth to be stronger in the non-oil sector if Iraq's implementation of agreed measures continues as oil output and exports plateau.", "Fiscal pressures are more acute in the Kurdistan region, where the fallout from the national government's response to the September 2017 referendum further strained the KRG's already weakened ability to pay salaries to its public-sector employees and security forces. The KRG's loss of control over significant oil resources in Kirkuk governorate, coupled with changes implemented by national government authorities over shipments of oil from those fields via the KRG-controlled export pipeline to Turkey, contributed to a sharp decline in revenue for the KRG during 2018. The resumption of exports from Kirkuk in late 2018, and an agreement between the KRG and Baghdad providing for the payment of some public sector salaries in exchange for KRG oil export proceed deposits in national accounts, has improved the situation as of March 2019. ", "Related issues shaped consideration of the 2018 and 2019 budgets in the COR, with Kurdish representatives criticizing the government's budget proposals to allocate the KRG a smaller percentage of funds to the KRI than the 17% benchmark reflected in previous budgets. National government officials argue that KRG resources should be based on a revised population estimate, and agreements reached for the national government to pay KRG civil service and peshmerga salaries in the 2019 budget are linked to the KRG placing 250,000 barrels per day of oil exports under federal control in exchange for financial all ocations for verified expenses. KRG oil contracts may limit the region's ability to meet this target, but the transfer of national funds to the KRG appears likely to ease fiscal pressures that had required payment limits that fueled protests."], "subsections": []}, {"section_title": "U.S. Policy and Issues in the 116th Congress", "paragraphs": [], "subsections": [{"section_title": "Security Cooperation and U.S. Training", "paragraphs": ["Iraqi military and counterterrorism operations against remnants of the Islamic State group are ongoing, and the United States military and its coalition partners continue to provide support to those efforts at the request of the Iraqi government. U.S. and coalition training efforts for various Iraqi security forces are ongoing at different locations, including in the Kurdistan region, with U.S. activities carried out pursuant to the authorities granted by Congress for the Iraq Train and Equip Program and the Office of Security Cooperation at the U.S. Embassy in Baghdad (OSC-I). From FY2015 through FY2019, Congress authorized and appropriated more than $5.8 billion for train and equip assistance in Iraq ( Table 3 ). ", "The Trump Administration is requesting an additional $745 million in FY2020 defense funding for Iraq programs under the Counter-ISIS Train and Equip Fund. The request proposes continued support to the Iraqi Counterterrorism Service (CTS), Army, Federal Police, Border Guards, Emergency Response Battalions, Energy Police, Special Forces ( Qwat Khasah ), and KRG Ministry of Peshmerga forces (see below). The request seeks $45 million for OSC-I.", "The Trump Administration, like the Obama Administration, has cited the 2001 Authorization for Use of Military Force (AUMF, P.L. 107-40 ) as the domestic legal authorization for U.S. military operations against the Islamic State in Iraq and has notified Congress of operations against the Islamic State in periodic reports on the 2002 Iraq AUMF ( P.L. 107-243 ). The U.S. government has referred to both collective and individual self-defense provisions of the U.N. Charter as the relevant international legal justifications for ongoing U.S. operations in Iraq and Syria. The U.S. military presence in Iraq is governed by an exchange of diplomatic notes that reference the security provisions of the 2008 bilateral Strategic Framework Agreement. To date, this arrangement has not required the approval of a separate security agreement by Iraq's Council of Representatives.", "U.S. military officials stopped officially reporting the size of the U.S. force in Iraq in 2017, but have confirmed that there has been a reduction in the number of U.S. military personnel and changes in U.S. capabilities in Iraq since that time. U.S. military sources have stated that the \"continued coalition presence in Iraq will be conditions-based, proportional to the need, and in coordination with the government of Iraq.\" As of March 2019, 71 U.S. troops have been killed or have died as part of Operation Inherent Resolve (OIR), and 77 have been wounded. Through September 2018, OIR operations since August 2014 had cost $28.5 billion.", "As of March 2019, U.S. and coalition forces have trained more than 190,000 Iraqi security personnel since 2014, including more than 30,000 Kurdish peshmerga . Notwithstanding these results, in September 2018, Department of Defense (DOD) officials told the DOD Inspector General that there remains \"a significant shortfall in Coalition trainers\" and confirmed that coalition forces are working to develop more capable and numerous Iraqi trainers to meet identified needs. In 2018, NATO leaders agreed to launch NATO Mission Iraq (NMI) to support Iraqi security sector reform and military professional development.", "Overall, DOD reports indicate that Iraq's security forces continue to exhibit \"systemic weaknesses\" including poor intelligence gathering and fusion, operational insecurity, ongoing corruption, reliance on coalition aircraft for air support, and overly centralized leadership, among other problems. U.S. and coalition plans for 2019 include a more intense focus on developing the capacity of various Iraqi police, border, and energy forces to hold recaptured territory. Through 2018, coalition advisers prioritized assistance to Iraqi forces conducting offensive operations against the Islamic State. In November 2018, the Lead Inspector General for Overseas Contingency Operations (LIG-OCO) questioned whether the coalition \"has sufficient advisors to support both ongoing offensive operations and to help hold forces secure areas cleared.\"", "U.S. arms transfers and security assistance to Iraq are provided with the understanding that U.S. equipment will be responsibly used by its intended recipients, and the 115 th Congress was informed about the unintended or inappropriate use of U.S.-origin defense equipment, including a now-resolved case involving the possession and use of U.S.-origin tanks by elements of the Popular Mobilization Forces."], "subsections": []}, {"section_title": "U.S. Foreign Assistance", "paragraphs": ["Since 2014, the U.S. government has provided Iraq with State Department- and USAID-administered assistance to support a range of security and economic objectives (in addition to the humanitarian assistance mentioned above). U.S. Foreign Military Financing (FMF) funds have supported the costs of continued loan-funded purchases of U.S. defense equipment and have helped fund Iraqi defense institution-building efforts. U.S. loan guarantees also have supported well-subscribed Iraqi bond issues to help Baghdad cover its fiscal deficits. Since 2014, the United States also has contributed nearly $2.5 billion to humanitarian relief efforts in Iraq, including more than $498 million in humanitarian support in FY2018. The Trump Administration also has directed additional support since 2017 to persecuted religious minority groups in Iraq, negotiating with UNDP to direct U.S. contributions to the UNDP Funding Facility for Stabilization (FFS) to the Ninewa Plains and other minority populated areas of northern Iraq (see \" Stabilization and Issues Affecting Religious and Ethnic Minorities \" below).", "The FY2019 foreign operations appropriations act ( H.J.Res. 31 , P.L. 116-6 ) appropriates $150 million in Economic Support Fund (ESF) aid, along with $250 million in FMF and other security assistance funds. Of the ESF funds, $50 million is to be made available for stabilization purposes, according to the act's explanatory statement. The act also directs funds to support transitional justice programs and accountability for genocide, crimes against humanity, and war crimes in Iraq. The Administration's FY2020 request for bilateral assistance seeks more than $165 million to continue stabilization and other nonmilitary assistance programs in Iraq ( Table 4 ).", "The United States also contributes to Iraqi programs to stabilize the Mosul Dam on the Tigris River, which remains at risk of collapse due to structural flaws, overlooked maintenance, and its compromised underlying geology. Collapse of the dam could cause deadly, catastrophic damage downstream. In September 2018, the State Department noted that Iraq is working to stabilize the dam, but judged that \"it is impossible to accurately predict the likelihood of the dam's failing.\""], "subsections": [{"section_title": "Stabilization and Issues Affecting Religious and Ethnic Minorities", "paragraphs": ["State Department reports on human rights conditions and religious freedom in Iraq have documented the difficulties faced by religious and ethnic minorities in the country for years. In some cases, these difficulties and security risks have driven members of minority groups to flee Iraq or to take shelter in different areas of the country, whether with fellow group members or in new communities. Minority groups that live in areas subject to long-running territorial disputes between Iraq's national government and the KRG face additional interference and exploitation by larger groups for political, economic, or security reasons. Members of diverse minority communities express a variety of territorial claims and administrative preferences, both among and within their own groups. While much attention is focused on potential intimidation or coercion of minorities by majority groups, disputes within and among minority communities also have the potential to generate tension and violence. ", "In October 2017, Vice President Mike Pence said in a speech that the U.S. government would direct more support to persecuted religious minority groups in the Middle East, including in Iraq. As part of this initiative, the Trump Administration has negotiated with UNDP to direct U.S. contributions to the UNDP Funding Facility for Stabilization (FFS) to the Ninewa Plains and other minority-populated areas of northern Iraq. In October 2017, USAID solicited proposals in a Broad Agency Announcement for cooperative programs \"to facilitate the safe and voluntary return of Internally Displaced Persons (IDPs) to their homes in the Ninewa plains and western Ninewa of Iraq and to encourage those who already are in their communities to remain there.\" In parallel, USAID notified Congress of its intent to obligate $14 million in FY2017 ESF-OCO for stabilization programs. ", "In January 2018, USAID officials released to UNDP a $75 million first tranche of stabilization assistance from an overall pledge of $150 million that had been announced in July 2017 and notified for planned obligation to Congress in April 2017. According to the January 2018 announcement, USAID \"renegotiated\" the contribution agreement with UNDP so that $55 million of the $75 million payment \"will address the needs of vulnerable religious and ethnic minority communities in Ninewa Province, especially those who have been victims of atrocities by ISIS\" with a focus on \"restoring services such as water, electricity, sewage, health, and education.\" USAID Administrator Mark Green visited Iraq in June 2018 and engaged with ethnic and religious minority groups in Ninewa. He also announced $10 million in awards under USAID's October 2017 proposal solicitation. At the end of the third quarter of 2018, UNDP reported that 259 projects in minority communities were complete out of 486 overall projects completed, planned, or under way in the Ninewa Plains.", "Inclusive of the January announcement, the United States has provided $216.8 million to support the FFS\u2014which remains the main international conduit for post-IS stabilization assistance in liberated areas of Iraq. According to UNDP, overall stabilization priorities for the FFS program are set by a steering committee chaired by the government of Iraq, with governorate-level Iraqi authorities directly responsible for implementation. UNDP officials report that earmarking of funding by donors \"can result in funding being directed away from areas highlighted by the Iraqi authorities as being in great need.\" In January 2019, UNDP identified $426 million in stabilization program funding shortfalls in five priority areas \"deemed to be the most at risk to future conflict\" and \"integral for the broader stabilization of Iraq.\" ", "Trump Administration requests to Congress for FY2018-FY2020 monies for Iraq programs included proposals to fund continued U.S. contributions to post-IS stabilization. Additional funds notified to Congress for U.N.-managed stabilization programs in Iraq were obligated during 2018. U.S. officials are currently seeking greater Iraqi and international contributions to stabilization efforts in Iraq and Syria."], "subsections": []}]}, {"section_title": "The United States and Iran in Iraq", "paragraphs": ["The Trump Administration seeks more proactively to challenge, contain, and roll back Iran's regional influence, while it attempts to solidify a long-term partnership with the government of Iraq and to support Iraq's sovereignty, unity, security, and economic stability. These parallel (and sometimes competing) goals may raise several policy questions for U.S. officials and Members of Congress, including ", "the makeup and viability of the Iraqi government; Iraqi leaders' approaches to Iran-backed groups and the future of militia forces mobilized to fight the Islamic State; Iraq's compliance with U.S. sanctions on Iran; the future extent and roles of the U.S. military presence in Iraq; the terms and conditions associated with U.S. security assistance to Iraqi forces; U.S. relations with Iraqi constituent groups such as the Kurds; and potential responses to U.S. efforts to contain or confront Iran-aligned entities in Iraq or elsewhere in the region.", "Iran-linked groups in Iraq have directly targeted U.S. forces in the past; some of them may be able and willing to do so again under certain circumstances. U.S. officials blamed these groups for apparent indirect attacks on U.S. diplomatic facilities in Basra and Baghdad in 2018. These attacks followed reports that Iran had transferred short-range ballistic missiles to Iran-backed militias in Iraq, reportedly including Kata'ib Hezbollah. The 115 th Congress considered proposals directing the Administration to impose U.S. sanctions on some Iran-aligned Iraqi groups, and enacted legislation containing reporting requirements focused on Iranian support to nonstate actors in Iraq and other countries. Iran has sometimes intervened in Iraq directly, including by conducting air strikes against Islamic State forces advancing on the border with Iran in 2014 and by launching missiles against Iranian Kurdish groups encamped in parts of northern Iraq in 2018.", "New or existing efforts to sideline Iran-backed groups, via sanctions or other means, might challenge Iran's influence in Iraq in ways that could serve stated U.S. government goals. The United States government has placed sanctions on some Iran-linked groups and individuals for threatening Iraq's stability and for involvement in terrorism. Some analysts have argued \"the timing and sequencing\" of sanctions \"is critical to maximizing desired effects and minimizing Tehran's ability to exploit Iraqi blowback.\"", "U.S. efforts to counter Iranian activities in Iraq and elsewhere in the region also have the potential to complicate the pursuit of other U.S. interests in Iraq, including U.S. counter-IS operations and training. When President Trump in a February 2019 interview referred to the U.S. presence in Iraq as a tool to monitor Iranian activity, several Iraqi leaders raised concerns. Iran-aligned Iraqi groups since have referred to President Trump's statements in their political campaign to force a U.S. withdrawal. ", "More broadly, U.S. confrontation with Iran and its allies in Iraq could disrupt relations among parties to the consensus government in Baghdad, or even precipitate civil conflict, undermining the U.S. goal of ensuring the stability and authority of the Iraqi government. While a wide range of Iraqi actors have ties to Iran, the nature of those ties differs, and treating these diverse groups uniformly risks ostracizing potential U.S. partners or neglecting opportunities to create divisions between these groups and Iran. ", "Just as the Administration has used sanctions to curb Iranian influence in Iraq, it also has used U.S. foreign assistance as leverage to limit Iranian involvement in Iraqi governance. As Iraqis debated government formation in 2018, the Trump Administration signaled that decisions about future U.S. assistance efforts would be shaped by the outcome of Iraqi negotiations. Specifically, the Administration stated that the assumption of authority in the new government by Iraqis perceived to be close to or controlled by Iran would prompt the United States to reconsider U.S. support. In the end, Iraqis excluded figures with close ties to Iran from cabinet positions. U.S. officials have argued that the United States does not seek to sever Iraq's relationships with neighboring Iran, but striking a balance in competing with Iran-linked groups and respecting Iraq's independence may continue to pose challenges.", "Iraq's relations with the Arab Gulf states also may shape the balance of Iranian and U.S. interests. U.S. officials have praised Saudi efforts since 2015 to reengage with the Iraqi government and support normalization of ties between the countries. In December 2015, Saudi officials reopened the kingdom's diplomatic offices in Iraq after a 25-year absence, and border crossings between the two countries have been reopened. Saudi Arabia and the other GCC states have not offered major new economic or security assistance or new debt relief initiatives to help stabilize Iraq, but actively engaged in and supported the February 2018 reconstruction conference held by Iraq in Kuwait. Saudi and other GCC state officials generally view the empowerment of Iran-linked Shia militia groups in Iraq with suspicion and, like the United States, seek to limit Iran's ability to influence political and security developments in Iraq."], "subsections": []}]}, {"section_title": "Outlook", "paragraphs": ["Negotiations among Iraqi factions following the May 2018 election have not fully resolved all questions about Iraq's future approach to U.S.-Iraqi relations. Former Prime Minister Abadi, with whom the U.S. government worked closely, could not translate his list's third-place finish into a mandate for a second term. His successor, Prime Minister Adel Abd al Mahdi, served in Abadi's government; U.S. officials have worked positively with him in the past. Nevertheless, the nature and durability of the political coalition arrangements supporting his leadership are unclear, and he lacks a strong personal electoral mandate. ", "Similarly, Iraqi President Barham Salih is familiar to U.S. officials as a leading and friendly figure among Iraqi Kurds, but he serves at a time of significant political differences among Kurds, and amid strained relations between Kurds and the national government. Salih has supported continued U.S.-Iraqi cooperation but also has rebuked some statements by U.S. officials. While Baghdad-KRG ties have improved relative to their post-2017 referendum low point, it remains possible that the national government could more strictly assert its sovereign prerogatives with regard to foreign assistance to substate entities, and/or that KRG representatives could seek expanded aid or more direct foreign support.", "As negotiations over cabinet positions conclude in Baghdad, Iraq's government is expected to debate the implementation of the national budget, reform of the water and electricity sectors, employment and anticorruption initiatives, and various national security issues. Among the latter may be proposals from some factions calling for the reduction or expulsion of U.S. and other foreign military forces from Iraq. Some Iraqi groups remain vocally critical of the remaining U.S. and coalition military presence in the country and argue that the defeat of the Islamic State's main forces means that U.S. and other foreign forces should depart. These groups also accuse the United States of seeking to undermine the Popular Mobilization Forces or to otherwise subordinate Iraq to U.S. preferences. ", "Most mainstream Iraqi political movements or leaders did not use the U.S. military presence as a major wedge issue in the run-up to or aftermath of the May 2018 election, and U.S. officials express confidence that many Iraqi military leaders and key political figures do not want to end Iraq's security partnership with the United States. Nevertheless, Members of Congress and U.S. officials face difficulties in developing policy options that can secure U.S. interests on specific issues without provoking major opposition from Iraqi constituencies. At the same time, Iraqi leaders may wonder whether the 2019 U.S. drawdown from Syria might augur a similar U.S. drawdown in Iraq. If Iraqi leaders seek to develop alternative sources of support should the United States decide to leave Iraq, then such sources could include Iran.", "Debates over U.S. military support to Iraqi national forces and substate actors in the fight against the Islamic State illustrated this dynamic, with some U.S. proposals for the provision of aid to all capable Iraqi forces facing criticism from Iraqi groups that may harbor suspicions of U.S. intentions or fear that U.S. assistance could empower their domestic rivals. To date, U.S. aid to the Kurds has been provided with the approval of the Baghdad government, though some Members of Congress have advocated for assistance to be provided directly to the KRG. U.S. concern about the unwillingness of some PMF units and armed groups to subordinate themselves to the national command authority of Iraq's elected government is another example. The strained relationship between national government and Kurdish forces along the disputed territories and the future of the Popular Mobilization Forces are issues that will doubtless recur in debates over the continuation of prevailing patterns of U.S. assistance.", "Oversight reporting to Congress suggests that DOD estimates the Iraq Security Forces are \"years, if not decades\" away from ending their \"reliance on Coalition assistance,\" and DOD expects \"a generation of Iraqi officers with continuous exposure to Coalition advisers\" would be required to establish a self-reliant Iraqi fighting force. According to the Lead Inspector General for Overseas Contingency Operations (LIG-OCO), these conditions raise \"questions about the duration of the OIR mission since the goal of that mission is defined as the 'enduring defeat' of ISIS.\"", "To achieve that goal, DOD may seek the continuation of U.S. and coalition training and advisory relationships with Iraq over a long, but as yet unspecified, period of time and on a consistent if as yet undefined scale. This may present questions to Congress about whether or how best to authorize and fund future U.S. security assistance to Iraq, and whether current bilateral agreements with the government of Iraq are sufficient and viable. The financial structure of U.S. security support efforts also could evolve. In the past, some in Congress have called for U.S. military training or other aid to Iraq to be provided on a reimbursement or loan basis, while with other major oil exporters like Saudi Arabia, long-term training activities have been funded by the recipient country through Foreign Military Sales. Iraq is already a significant FMS customer.", "It seems reasonable to expect that Iraqis will continue to assess and respond to U.S. initiatives (and those of other outsiders) primarily through the lenses of their own domestic political rivalries, anxieties, hopes, and agendas. Reconciling U.S. preferences and interests with Iraq's evolving politics and security conditions may thus require continued creativity, flexibility, and patience."], "subsections": [{"section_title": "Appendix. Select Legislation in the 116th Congress", "paragraphs": ["H.R. 571 . A bill to impose sanctions with respect to Iranian persons that threaten the peace or stability of Iraq or the Government of Iraq.", "Subject to national security waiver, the bill would direct the President to impose sanctions on \"any foreign person that the President determines knowingly commits a significant act of violence that has the direct purpose or effect of\u2014(1) threatening the peace or stability of Iraq or the Government of Iraq; (2) undermining the democratic process in Iraq; or (3) undermining significantly efforts to promote economic reconstruction and political reform in Iraq or to provide humanitarian assistance to the Iraqi people.\" ", "The bill would further require the Secretary of State to submit a determination as to whether Asa'ib Ahl al Haq, Harakat Hizballah al Nujaba, or affiliated persons and entities meet terrorist designation criteria or the sanctions criteria of the bill. The bill also would direct the Secretary of State to prepare, maintain, and publish a \"a list of armed groups, militias, or proxy forces in Iraq receiving logistical, military, or financial assistance from Iran's Revolutionary Guard Corps or over which Iran's Revolutionary Guard Corps exerts any form of control or influence.\"", "The U.S. government designated Harakat Hizballah al Nujaba pursuant to Executive Order 13224 on terrorism in March 2019. ", "A similar bill would direct the President to impose sanctions on select groups without a national security waiver ( H.R. 361 ). ", "The bill reflects amendments reported to Congress by the House Foreign Affairs Committee and endorsed by the House during the 115 th Congress ( H.R. 4591 ). ", "S.J.Res. 13 . A joint resolution to repeal the authorizations for use of military force against Iraq, and for other purposes. ", "The joint resolution would repeal the Authorization for Use of Military Force against Iraq Resolution ( P.L. 102-1 ; 105 Stat. 3; 50 U.S.C. 1541 note) of January 14, 1991, and the Authorization for Use of Military Force against Iraq Resolution of 2002 ( P.L. 107-243 ; 116 Stat. 1498; 50 U.S.C. 1541 note) of October 16, 2002."], "subsections": []}]}]}}
{"id": "R45491", "title": "Science and Technology Issues in the 116th Congress", "released_date": "2019-02-06T00:00:00", "summary": ["Science and technology (S&T) have a pervasive influence over a wide range of issues confronting the nation. Public and private research and development spur scientific and technological advancement. Such advances can drive economic growth, help address national priorities, and improve health and quality of life. The ubiquity and constantly changing nature of science and technology frequently create public policy issues of congressional interest.", "The federal government supports scientific and technological advancement directly by funding and performing research and development and indirectly by creating and maintaining policies that encourage private sector efforts. Additionally, the federal government regulates many aspects of S&T activities.", "This report briefly outlines a key set of science and technology policy issues that may come before the 116th Congress. This set is not exhaustive, however. Given the rapid pace of S&T advancement and its importance in many diverse public policy contexts, other S&T-related issues not discussed in this report may come before the 116th Congress. The selected issues are grouped into 10 categories", "Overarching S&T Policy Issues, Agriculture, Biomedical Research and Development, Climate Change Science and Water, Defense, Energy, Homeland Security, Information Technology, Physical and Material Sciences, and Space.", "Each of these categories includes concise analysis of multiple policy issues. The material presented in this report should be viewed as illustrative rather than comprehensive. Each section identifies CRS reports, when available, and the appropriate CRS experts to contact for further information and analysis."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Science and technology (S&T) play an important role in our society. Advances in science and technology can help drive economic growth and meet national priorities in public health, environmental protection, agricultural productivity, defense, and many other areas.", "Federal policies affect scientific and technological advancement on several levels. The federal government directly funds research and development (R&D) activities to achieve national goals or support national priorities, such as funding basic life science research through the National Institutes of Health (NIH) or developing new weapons systems in the Department of Defense (DOD). The federal government also establishes and maintains the legal and regulatory framework that affects S&T activities in the private sector. In addition, federal tax, trade, and education policies can have effects on private sector S&T activity. ", "This report serves as a brief introduction to many of the science and technology policy issues that may come before the 116 th Congress. Each issue section provides background information and outlines selected policy issues that may be considered. Each issue includes a heading entitled \"For Further Information\" that provides the author's name and the titles of relevant CRS reports containing more detailed policy analysis and information. Cited reports are current as of their individual publication dates, but may not reflect developments that have occurred since their publication."], "subsections": []}, {"section_title": "Overarching S&T Policy Issues", "paragraphs": ["Several issues of potential congressional interest apply to federal science and technology policy in general. This section begins with a brief introduction to the roles each branch of the federal government plays in S&T policymaking, then discusses overall federal funding of research and development. Additional sections address issues related to the emergence of disruptive technologies; the America COMPETES Act; oversight of federally supported academic research; technology transfer; the adequacy of the science and engineering workforce; science, technology, engineering, and mathematics (STEM) education; and innovation-related tax policy. "], "subsections": [{"section_title": "Federal Science and Technology Policymaking Enterprise", "paragraphs": ["The federal S&T policymaking enterprise is composed of an extensive and diverse array of stakeholders in the executive, legislative, and judicial branches. The enterprise fosters, among other things, the advancement of scientific and technical knowledge; STEM education; the application of S&T to achieve economic, national security, and other societal benefits; and the use of S&T to improve federal decisionmaking. ", "Federal responsibilities for S&T policymaking are highly decentralized. In addition to appropriating funding for S&T programs, Congress enacts laws to establish, refine, and eliminate programs, policies, regulations, regulatory agencies, and regulatory processes that rely on S&T data and analysis. However, congressional authorities related to S&T policymaking are diffuse. Many House and Senate committees have jurisdiction over important elements of S&T policy. In addition, there are dozens of informal congressional caucuses in areas of S&T policy such as research and development, specific S&T disciplines, and STEM education. ", "The President formulates annual budgets, policies, and programs for consideration by Congress; issues executive orders and directives; and directs the executive branch departments and agencies responsible for implementing S&T policies and programs. The Office of Science and Technology Policy, in the Executive Office of the President, advises the President and other Administration officials on S&T issues. ", "Executive agency responsibilities for S&T policymaking are also diffuse. Some agencies have broad S&T responsibilities (e.g., the National Science Foundation). Others use S&T to meet a specific federal mission (e.g., defense, energy, health, space). Regulatory agencies have S&T responsibilities in areas such as nuclear energy, food and drug safety, and environmental protection.", "Federal court cases and decisions often affect U.S. S&T policy. Decisions can have an impact on the development of S&T (e.g., decisions regarding the U.S. patent system); S&T-intensive industries (e.g., the break-up of AT&T in the 1980s); and the admissibility of S&T-related evidence (e.g., DNA samples).", "For Further Information", "John F. Sargent Jr., Specialist in Science and Technology Policy", "CRS Report R43935, Office of Science and Technology Policy (OSTP): History and Overview , by John F. Sargent Jr. and Dana A. Shea"], "subsections": []}, {"section_title": "Federal Funding for Research and Development", "paragraphs": ["The federal government has long supported the advancement of scientific knowledge and technological development through investments in R&D. Federal R&D funding seeks to address a broad range of national interests, including national defense, health, safety, the environment, and energy security; advance knowledge generally; develop the scientific and engineering workforce; and strengthen U.S. innovation and competitiveness. The federal government has played an important role in supporting R&D efforts which have led to scientific breakthroughs and new technologies, from jet aircraft and the internet to communications satellites and defenses against disease.", "Between FY2008 and FY2013, federal R&D funding fell from $140.1 billion to $130.9 billion, a reduction of $9.3 billion (6.6% in current dollars, 13.4% in constant dollars). The decline was a reversal of sustained growth in federal R&D funding for more than half a century, and stirred debate about the potential long-term effects on U.S. technological leadership, innovation, competitiveness, economic growth, and job creation. From FY2013 to FY2017, federal funding grew, rising to an all-time current dollar high of $155.0 billion in FY2017, the most recent annual aggregate number available. However, in constant dollars, the FY2017 level was $9.6 billion (5.6%) below its high of $169.7 billion in 2010. Concerns by some about reductions in federal R&D funding have been exacerbated by increases in the R&D investments of other nations (China, in particular); globalization of R&D and manufacturing activities; and trade deficits in advanced technology products, an area in which the United States previously ran trade surpluses (most recently in 2001). At the same time, some Members of Congress express concerns about the level of federal funding in light of the current federal fiscal condition. In addition, R&D funding decisions may be affected by differing perspectives on the appropriate role of the federal government in advancing science and technology.", "As the 116 th Congress undertakes the appropriations process it faces two overarching issues: (1) the direction in which the federal R&D investment will move in the context of increased pressure to limit discretionary spending and (2) how available funding will be prioritized and allocated. Low or negative growth in the federal government's overall R&D investment may require movement of resources across disciplines, programs, or agencies to address priorities. Congress continues to play a central role in defining the nation's R&D priorities as it makes decisions with respect to the size and distribution of aggregate, agency, and programmatic R&D funding.", "For Further Information", "John F. Sargent Jr., Specialist in Science and Technology Policy", "CRS Report R45150, Federal Research and Development (R&D) Funding: FY2019 , coordinated by John F. Sargent Jr. ", "CRS Report R44888, Federal Research and Development Funding: FY2018 , coordinated by John F. Sargent Jr. "], "subsections": []}, {"section_title": "Disruptive and Convergent Technology", "paragraphs": ["The rapid pace of technology innovation and application is substantially affecting both the global economy and human behavior. A disruptive technology can be thought of as a rapidly evolving set of innovations in any technology space that has potentially broad economic and social impacts. Two or more different technologies may be integrated to create a new, convergent technology that may also be disruptive. Consider the smartphone, perhaps the best-known example of a technology that is both disruptive and convergent. It combines a telephone, a computer, a camera, and a geolocation application into a single device. It has become so popular over the last decade that, according to some estimates, more than half of the world's population uses one. Those users average more than four hours daily on the device, predominantly for activities other than voice phone calls. ", "The emergence of such technologies has the potential to create large-scale economic and social disruptions. Smartphones and other forms of mobile computing, for example, have had large economic effects on the telecommunications sector, as well as large social impacts. ", "Among other technologies associated with major disruptions are social media, cloud computing, and data analytics (\"big data\"). Additional examples include artificial intelligence (AI), autonomous vehicles, blockchain, energy storage, gene editing, and the internet of things. The economic and social impacts of such technologies are difficult to predict and present complex facets to Congress as it responds to the opportunities and challenges those technologies pose. Not only are the paths of their development and implementation uncertain, but systematic data collection on them is sparse. ", "The complexity and pace of advancement of such technologies create policy issues and challenges of potential interest to the 116 th Congress. Questions disruptive technologies may raise include the following:", "If Congress seeks to facilitate the growth of such technologies, what options might it consider? For example, how might Congress decide which technologies to prioritize for investment? How would congressional support for research and development affect growth? What kinds of incentives might Congress consider providing? What issues do such technologies raise for international economic competition, and what are the options for congressional response? For example, if other countries are investing heavily in some potentially disruptive technologies, how might Congress balance the benefits and disadvantages to the nation of investing in the same technologies or different ones? What are the potential negative impacts of such technologies on societal goals and values, and what steps might Congress consider for prevention and mitigation? For example, how might Congress respond to public concerns about privacy and security? How might such technologies affect the U.S. workforce and economic opportunity, and what are the potential responses?", "For Further Information", "Eric A. Fischer, Senior Specialist in Science and Technology"], "subsections": []}, {"section_title": "America COMPETES Act Reauthorization", "paragraphs": ["The America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science (COMPETES) Act ( P.L. 110-69 ) was enacted in 2007. The act, a response to concerns about U.S. competitiveness, authorized certain federal research, education, and innovation-related activities. In 2010, Congress passed the America COMPETES Reauthorization Act of 2010 ( P.L. 111-358 ), extending and modifying certain provisions of the 2007 law, as well as establishing new provisions. Congressional appropriations have generally been below authorized levels, and the specific authorizations of appropriations in the 2010 act have expired. Following previous reauthorization efforts that inspired debate about such topics as the scientific peer review process, certain provisions of these acts were reauthorized and modified as part of the American Innovation and Competitiveness Act (AICA, P.L. 114-329 ), enacted at the end of the 114 th Congress. The 116 th Congress may consider additional provisions from the COMPETES acts that were not addressed through the AICA, such as expired authorizations of appropriations for the National Science Foundation (NSF) and the National Institute of Standards and Technology (NIST).", "The COMPETES acts were originally enacted to address concerns that the United States could lose its advantage in scientific and technological innovation. Economists have asserted that economic, security, and social benefits accrue preferentially to nations that lead in scientific and technological advancement and commercialization. Some analysts have suggested that historical U.S. leadership in these areas is slipping. In particular, some stakeholders have questioned the adequacy of federal funding for physical sciences and engineering research and the domestic production of scientists and engineers.", "The COMPETES acts were designed to respond, in part, to these challenges by authorizing increased funding for the NIST, NSF, and Department of Energy's Office of Science. Together, the acts also authorized certain federal STEM education activities, the Advanced Research Projects Agency-Energy (ARPA-E), and prize competitions at federal agencies, among other provisions. ", "Those who have expressed opposition to aspects of the COMPETES acts have done so from several perspectives. Some critics question the existence of a STEM labor shortage and thus the need for programs aimed at increasing the number of STEM workers. Other critics agree with the assertion of a shortage, but question whether the federal government should address it, believing that the market will make the necessary corrections to meet the demand. With respect to U.S. competitiveness, some analysts prefer alternative approaches to those proposed in the COMPETES acts, such as research tax credits or reducing regulatory costs. Other analysts object to the financial cost associated with the COMPETES acts, given concern about the federal budget deficit and debt.", "For Further Information", "Laurie A. Harris, Analyst in Science and Technology Policy", "John F. Sargent Jr., Specialist in Science and Technology Policy", "CRS Insight IN11001, Revisiting the Doubling Effort: Trends in Federal Funding for Basic Research in the Physical Sciences and Engineering , by John F. Sargent Jr. ", "CRS Report R44345, Efforts to Reauthorize the America COMPETES Act: In Brief , by John F. Sargent Jr."], "subsections": []}, {"section_title": "Technology Transfer from Federal Laboratories", "paragraphs": ["Every year, approximately one-third of the federal government's research and development spending is obligated to federal laboratories, including federally funded research and development centers, in support of agency mission requirements. The technology and expertise generated by federal laboratories may have applications beyond the immediate goals or intent of the original R&D. Over the years, Congress has established various mechanisms\u2014primarily through the Stevenson-Wydler Technology Innovation Act of 1980 ( P.L. 96-480 ) and subsequent legislation\u2014to facilitate the transfer of technology and research generated from federal laboratories to the private sector where it can be further developed and commercialized. ", "Congressional interest in promoting the transfer of technology from federal laboratories is largely based on meeting social needs and promoting economic growth to enhance the nation's welfare and security. Technology transfer from federal laboratories can occur in many forms. In some instances, it can occur through formal partnerships and joint research activities between federal laboratories and private firms, including through cooperative research and development agreements or CRADAs. In other cases, it can occur when the legal rights to government-owned patents are licensed to a private firm.", "Despite previous efforts to increase the effectiveness of technology transfer from federal laboratories to the private sector, the transfer of federal technologies remains restrained. Critics of current mechanisms argue that working with federal laboratories continues to be difficult and time-consuming. Proponents assert that federal laboratories are open and receptive to partnering with private firms, but it remains up to them to take advantage of federal laboratory technologies and capabilities. At issue is whether additional legislative initiatives and federal incentives are needed to encourage increased technology transfer from federal laboratories, or if the available resources are sufficient. ", "In December 2018, the National Institute of Standards and Technology released \"Return on Investment Initiative for Unleashing American Innovation,\" a draft paper proposing various strategies and actions to accelerate and improve the transfer of technology to the private sector, including building a more entrepreneurial R&D workforce and increasing engagement with private sector technology development experts and investors. Several of the proposed actions may require congressional approval and additional legislative authority to implement. ", "Further Information", "Marcy E. Gallo, Analyst in Science and Technology Policy ", "CRS Report R44629, Federally Funded Research and Development Centers (FFRDCs): Background and Issues for Congress , by Marcy E. Gallo "], "subsections": []}, {"section_title": "Adequacy of the U.S. Science and Engineering Workforce", "paragraphs": ["The adequacy of the U.S. science and engineering (S&E) workforce has been an ongoing concern of Congress for more than 60 years. Scientists and engineers are widely believed to be essential to U.S. technological leadership, innovation, manufacturing, and services, and thus vital to U.S. economic strength, national defense, and other societal needs. Congress has enacted many programs to support the education and development of scientists and engineers. Congress has also undertaken broad efforts to improve science, technology, engineering, and math skills to prepare a greater number of students to pursue S&E degrees. In addition, some policymakers have sought to increase the number of foreign scientists and engineers working in the United States through changes in visa and immigration policies. ", "Most experts agree that there is no authoritative definition of which occupations comprise the S&E workforce. Rather, the selection of occupations included in any particular analysis of the S&E workforce may vary depending on the objective of the analysis. The policy debate about the adequacy of the U.S. S&E workforce has focused largely on professional-level computer occupations, mathematical occupations, engineers, and physical scientists. Accordingly, much of the analytical focus has been on these occupations. However, some analyses may use a definition that includes some or all of these occupations, as well as life scientists, S&E managers, S&E technicians, social scientists, and related occupations. ", "Many policymakers, business leaders, academicians, S&E professional society analysts, economists, and others hold differing views with respect to the adequacy of the S&E workforce and related policy issues. These issues include the question of the existence of a shortage of scientists and engineers in the United States, what the nature of any such shortage might be (e.g., too few people with S&E degrees, mismatches between skills and needs), and whether the federal government should undertake policy interventions or rely upon market forces to resolve any shortages in this labor market. Among the key indicators used by labor economists to assess the existence of occupational labor shortages are employment growth, wage growth, and unemployment rates.", "For Further Information", "John F. Sargent Jr., Specialist in Science and Technology Policy ", "CRS Report R43061, The U.S. Science and Engineering Workforce: Recent, Current, and Projected Employment, Wages, and Unemployment , by John F. Sargent Jr."], "subsections": []}, {"section_title": "Science, Technology, Engineering, and Mathematics Education", "paragraphs": ["The term \"STEM education\" refers to teaching and learning in the fields of science, technology, engineering, and mathematics. Policymakers have had an enduring interest in STEM education. Popular opinion generally holds that U.S. students perform poorly in STEM subjects\u2014especially when compared to students in certain foreign education systems\u2014but the data paint a complicated picture. Over time, U.S. students appear to have made gains in some areas but may be perceived as falling behind in others. ", "Various attempts to assess the federal STEM education effort have produced different estimates of its scope and scale. These efforts have identified between 105 and 254 STEM education programs and activities across 13 to 15 federal agencies. Annual federal appropriations for STEM education are typically estimated to be in the range of $2.8 billion to $3.4 billion. ", "The national conversation about STEM education frequently develops from concerns about the U.S. science and engineering workforce. As discussed in the previous section, some observers assert that the United States faces a shortage of STEM workers; others dispute this claim. Many proponents argue that a general increase in STEM abilities among the U.S. workforce could benefit the nation in any case. On the other hand, some scholars oppose the use of education policy to increase the supply of STEM workers, either because they perceive such policies as overemphasizing the economic outcomes of education at the expense of other values (e.g., personal development or citizenship) or because they perceive the labor market as the more efficient mechanism for dealing with these issues.", "Opinions differ as well on the appropriate scope, scale, and emphasis of federal STEM education policy. Some observers prefer policies aimed at lifting the STEM achievement of all students\u2014such as teacher or faculty professional development; or changes in curriculum, standards, or pedagogy. Others emphasize policies designed to meet specific needs\u2014such as scholarships for the \"best and brightest,\" federal workforce training in areas of high demand (e.g., information technology and cybersecurity), efforts to close academic achievement gaps between various demographic groups, or programs to increase the participation of traditionally underrepresented groups in STEM fields. ", "For Further I nformation", "Boris Granovskiy, Analyst in Education Policy", "CRS Report R45223, Science, Technology, Engineering, and Mathematics (STEM) Education: An Overview , by Boris Granovskiy ", "CRS In Focus IF10654, Challenges in Cybersecurity Education and Workforce Development , by Boris Granovskiy "], "subsections": []}, {"section_title": "Tax Incentives for Technological Innovation", "paragraphs": ["The 116 th Congress may consider new federal policies to promote technological innovation, which involves the creation, development, and use of new technologies. Among the concerns fueling such an interest is what many view as inadequate growth in domestic high-paying jobs in a range of industries in recent years. Among the pathways to accelerating growth in these jobs are (1) faster rates of entrepreneurial business formation, (2) increased business investment in domestic research and development (R&D), (3) greater domestic production of products and services derived from that research, and (4) increased employer spending on training workers to acquire the skills needed to earn higher-paying jobs. The technical skills required to perform such jobs can be thought of as a critical component of the domestic climate for investment in innovation.", "Congress can directly influence the rate of high-wage job creation through adopting tax incentives for investment in R&D, worker training, and higher education. Under current federal tax law, three provisions directly affect entrepreneurial business formation and business investment in R&D: (1) an expensing allowance for research expenditures under Section 174 of the tax code (which is scheduled to switch to a five-year amortization period for that spending starting in 2022), (2) a nonrefundable tax credit for increases in research expenditures above a base amount under Section 41, and (3) a full exclusion for capital gains from the sale or exchange of qualified small business stock held by the original investor for five or more years under Section 1202. There is no federal tax incentive under current law for employer investment in worker training.", "The 2017 tax revision ( P.L. 115-97 ) substantially cut income tax rates for corporate and noncorporate business income, beginning in 2018. The new law also modified or repealed a number of tax provisions affecting business after-tax profits. Some argue that the tax cuts alone should be sufficient to increase the number of high-paying domestic jobs in a range of industries. Others are skeptical that many large U.S. employers will invest the windfall gains from the tax cuts in expanding domestic production and boosting worker wages, training, and education. In their view, many such companies (including U.S. multinational corporations) are more likely to use much of their tax savings to buy back stock, raise dividends, or acquire competing firms. ", "One previously proposed option for increasing the number of high-paying domestic jobs that the 116 th Congress may examine is the creation of a tax incentive known as a patent or innovation box. Such an incentive lowers the tax burden on income earned from the commercial use of qualified intellectual property, such as trademarks or patents. Depending on its design, a patent box could give U.S. and foreign companies investing in innovation a stronger incentive to expand their investment in U.S. R&D and production activities. Potential drawbacks to such a subsidy include its budgetary cost and the lack of a sound economic justification for a tax subsidy that benefits only companies that develop or purchase successful patented innovations, not companies that develop profitable new technologies that never are patented.", "A second option for spurring faster growth in domestic high-paying jobs is a tax incentive for employers to invest in worker training and education. Several bills were introduced in the 115 th Congress to promote employer investment in training programs such as apprenticeships and collaboration with community colleges to design courses of study targeted at the skill needs of employers. The U.S. economy benefits from an expansion in high-paying jobs only if there are enough workers to fill them. Potential drawbacks to such a tax subsidy include the likelihood it would reward employers for doing what they would do without a tax subsidy and a lack of evidence that employers systematically underinvest in worker training and education.", "For Further Information", "Gary Guenther, Analyst in Public Finance", "CRS Report RL31181, Research Tax Credit: Current Law and Policy Issues for the 114th Congress , by Gary Guenther ", "CRS Report R44829, Patent Boxes: A Primer , by Gary Guenther "], "subsections": []}]}, {"section_title": "Agriculture", "paragraphs": ["The federal government supports billions of dollars of agricultural research annually. The 116 th Congress is likely to face issues related to funding this research, a proposed relocation of the Department of Agriculture's science and economic analysis agencies, and issues arising from advances in agricultural biotechnology, including the development of cell-cultured meat. "], "subsections": [{"section_title": "Agricultural Research", "paragraphs": ["The U.S. Department of Agriculture's (USDA's) Research, Education, and Economics (REE) mission area has the primary federal responsibility of advancing scientific knowledge for agriculture. USDA-funded research spans the biological, physical, and social sciences related broadly to agriculture, food, and natural resources. ", "USDA conducts its own research and administers federal funding to states and local partners primarily through formula funds and competitive grants. The outcomes are delivered through academic and applied research findings, statistical publications, cooperative extension, and higher education. USDA's research program is funded with nearly $2.9 billion per year of discretionary funding and about $120 million of mandatory funding.", "The most recent farm bill (P.L. 115-661, Agriculture Improvement Act of 2018), enacted in December 2018, governs agricultural research programs through FY2023. In keeping with past farm bills, this farm bill reauthorizes a wide range of existing research and education provisions (e.g., funding of land grant university research) and also authorizes several new research provisions. One provision that is likely to be closely watched is the Agriculture Advanced Research and Development Authority (AGARDA) pilot program. Modeled on the Defense Advanced Research Projects Agency, AGARDA will operate under the Office of Chief Scientist to address long-term and high-risk research challenges in the agriculture and food sectors.", "For Further Information", "Tadlock Cowan, Analyst in Natural Resources and Rural Development ", "CRS Report R40819, Agricultural Research: Background and Issues , by Jim Monke", "CRS Report R45197, The House Agriculture Committee's 2018 Farm Bill (H.R. 2): A Side-by-Side Comparison with Current Law , coordinated by Mark A. McMinimy ", "CRS In Focus IF10187, Farm Bill Primer: What Is the Farm Bill? , by Ren\u00e9e Johnson and Jim Monke "], "subsections": []}, {"section_title": "The National Institute of Food and Agriculture and Economic Research Service Relocation Proposal", "paragraphs": ["In August 2018, the Secretary of Agriculture announced a reorganization of the department that included relocating the National Institute of Food and Agriculture (NIFA) and Economic Research Service (ERS) outside the National Capital Region. The Secretary has stated that he would like to complete the relocation in 2019. As two of the department's science and agricultural economic analysis agencies, such a move has prompted significant commentary within Congress and by other Washington-based scientific organizations. While nearly 135 cities have announced their interest in hosting the relocated agencies, an ongoing USDA Inspector General (IG) study is examining the department's legal and budgetary authority to execute the moves. As this IG study is completed, Congress may choose to exercise its authority to ensure that the proposed move is in accordance with federal laws and regulations. ", "For Further Information", "Tadlock Cowan, Analyst in Natural Resources and Rural Development "], "subsections": []}, {"section_title": "Agricultural Biotechnology", "paragraphs": ["The 116 th Congress may provide oversight of issues regarding bioengineered foods labeling, or foods containing bioengineered ingredients, proposed regulatory changes governing the introduction of genetically engineered (GE) plants and animals into the environment, and recent technical innovations in gene editing that could raise new regulatory issues for agricultural biotechnology. ", "The 114 th Congress passed a bill signed into law in July 2016 ( P.L. 114-216 ) to establish a \"national bioengineered food disclosure standard.\" The final rule was published in late December 2018. Food manufacturers can adopt either text, a symbol, or an electronic/digital link for identifying bioengineered foods. The disclosure act is to cover foods made through conventional genetic engineering technology, and as well as newer techniques in the definition of bioengineered foods. ", "P.L. 114-216 also required USDA to conduct a study that identifies potential technological factors that could affect consumer access to bioengineered food disclosure through electronic or digital methods such as codes on food products read by smart phones. Observers are concerned that such digital methods of disclosure could have differential impacts on those without cell phones (e.g., the elderly, low-income families) and those without access to high-speed broadband. The congressionally required study, completed in July 2017, specifically addresses the availability of wireless or cellular networks, availability of landline telephones in stores, and particular factors that might affect small retailers and rural retailers as well as consumers. With the final rule now published, the disclosure law is to be implemented by USDA's Agricultural Marketing Service. The 116 th Congress may begin to address various public issues that arise from implementing the new disclosure rule. ", "The development over the past several years of new technologies to genetically engineer plants, in particular through novel gene-editing technologies such as CRISPR-Cas9, has raised new regulatory issues. USDA currently regulates GE plants under the Plant Protection Act (PPA; 7 U.S.C. \u00a7770). However, USDA has stated that newer technologies may fall outside the purview of the PPA, and thus the department might have no regulatory jurisdiction over plants genetically engineered using these new technologies. For example, USDA's Animal and Plant Health Inspection Service (APHIS) asserted in April 2016 that the agency had no regulatory authority under the PPA and, by default, approved a mushroom variety and a waxy corn variety created through the CRISPR-Cas9 gene editing technology. The Department of Agriculture then announced in March 2018 that they had no plans to regulate plants that could otherwise have been developed through traditional breeding techniques, which characterizes some gene editing techniques. This decision raises important questions about how such genetically engineered plants are to be regulated as they are introduced. As genetically engineered plant varieties created by these newer techniques become more common, and as the public becomes more aware that these varieties are not regulated under the PPA, Congress could revisit the 1986 framework that governs U.S. biotechnology regulation. ", "For Further Information", "Tadlock Cowan, Analyst in Natural Resources and Rural Development ", "CRS In Focus IF10376, Labeling Genetically Engineered Foods: Current Legislation , by Tadlock Cowan ", "CRS Report R43518, Genetically Engineered Salmon , by Harold F. Upton and Tadlock Cowan", "CRS Report RL32809, Agricultural Biotechnology: Background, Regulation, and Policy Issues , by Tadlock Cowan ", "CRS Report RL33334, Biotechnology in Animal Agriculture: Status and Current Issues , by Tadlock Cowan ", "CRS Report R43100, Unapproved Genetically Modified Wheat Discovered in Oregon and Montana: Status and Implications , by Tadlock Cowan "], "subsections": []}, {"section_title": "Cell-Cultured Meat", "paragraphs": ["Cell-cultured meat (also referred to as cell-based meat, lab-grown meat, and clean meat) is grown in laboratories from animal cell-cultures. First developed in the early 2000s, improved technological efficiencies and reduced production costs have allowed cell-cultured meat companies, including cell-cultures from cattle, hogs, poultry, and fish, to scale up and, in some instances, move closer to commercial viability. Some cell-cultured meat innovators believe their products could be sold within a few years in certain markets and become widely available in 10 years.", "A debate about which federal agency\u2014the Department of Health and Human Services' (HHS) Food and Drug Administration (FDA) or the U.S. Department of Agriculture's (USDA) Food Safety and Inspection Service (FSIS)\u2014has regulatory jurisdiction over cell-cultured meat surfaced in early 2018. Currently, FSIS regulates meat and poultry, catfish, and egg products. FDA regulates game-meat, fish and seafood, processed meat products (containing 2%-3% meat), and shell eggs. FDA and FSIS often share overlapping responsibilities for some food products and have developed \"memoranda of understanding\" (MOU) to facilitate communication and division of responsibilities between the two agencies.", "In February 2018, the U.S. Cattlemen's Association petitioned USDA to have FSIS establish meat labeling requirements that exclude cell-cultured products. The petition requested that only meat derived directly from animals raised and slaughtered be labeled \"beef\" and \"meat.\" ", "Congress took up cell-cultured meat in April 2018 when USDA Secretary Perdue testified before the House Committee on Appropriations, stating that meat grown in laboratories would be under the sole purview of USDA, and any product labeled as meat would be under USDA jurisdiction. In May 2018, the House-reported agricultural appropriations bill ( H.R. 5961 ) included a general provision that would have required USDA \"for fiscal year 2018 and hereafter\" to regulate cell-cultured products made from cells of amenable species of livestock and poultry, as defined in the Federal Meat Inspection Act and Poultry Products Inspection Act. ", "In June 2018, FDA stated that under the Federal Food, Drug, and Cosmetic Act, FDA has jurisdiction over \"food,\" which includes \"articles used for food\" and \"articles used for components of any such article.\" Thus, according to FDA, both of the substances used in the manufacture of cell-cultured products, and the final products that will be used for food, are subject to the FDA's jurisdiction. Any substance that is intentionally added to food is considered a food additive and is subject to premarket review and approval by FDA. An exception to this requirement is when there is a consensus, among qualified experts that the substance is \"generally recognized as safe\" (GRAS) for its intended use. ", "In November 2018, a joint statement from USDA and FDA announced that both agencies \"should jointly oversee the production of cell-cultured food products derived from livestock and poultry.\" The statement further clarified that FDA would oversee cell collection, cell banks, cell growth, and the process of differentiation. USDA is to oversee the production and labeling of food products derived from the cells. This statement initiates the process of developing the regulatory framework for cell-culture meat and poultry; however, other key aspects of the regulations have yet to be announced. For example, fish, for which cell-cultured technology is being developed, is regulated by FDA, but was not mentioned in the statement. In addition, there are still questions on how to obtain premarket approval and how inspection of cell-cultured meat facilities will be conducted. Finally, the statement did not resolve the contentious issue of cell-cultured meat labeling terminology. Cell-cultured meat regulation decisions may be further clarified in the near future\u2014perhaps through a MOU between FDA and USDA. ", "For Further Information", "Sahar Angadjivand, Analyst in Agricultural Policy", "Joel L. Greene, Analyst in Agricultural Policy", "CRS In Focus IF10947, Regulation of Cell-Cultured Meat , by Joel L. Greene and Sahar Angadjivand "], "subsections": []}]}, {"section_title": "Biomedical Research and Development", "paragraphs": ["Advances in science and technology related to biomedical research and development underpin improvements in medications and treatments. Some of the biomedical R&D issues that the 116 th Congress may face include those related to the budget and oversight of the National Institutes of Health, the role the Food and Drug Administration in approving new medicines and laboratory tests, and issues related to stem cell-based medicine and genomic editing. "], "subsections": [{"section_title": "National Institutes of Health and the 21st Century Cures Act", "paragraphs": ["The National Institutes of Health is the lead federal agency conducting and supporting biomedical research. Congress provided the agency with $39 billion in funding for FY2019 for basic, clinical, and translational research in NIH's laboratories as well as in research institutions nationwide. The extramural research program (more than 80% of the NIH budget) provides grants, contracts, and training awards to support over 30,000 individuals at more than 2,500 universities, academic health centers, and research facilities across the nation. NIH represents about one fifth of total federal research and development spending, and half of non-Department of Defense research and development funding. ", "NIH is a large and complex organization made up of 27 institutes and centers (ICs). Each IC sets its own research priorities and manages its research programs in coordination with the Office of the Director (OD). The individual ICs may focus on particular diseases (e.g., The National Cancer Institute), areas of human health and development (e.g., The National Institute on Aging), scientific fields (e.g., National Institute for Environmental Health Sciences), or biomedical professions and technology (e.g., National Institute of Biomedical Imaging and Bioengineering). Congress provides separate appropriations to 24 of the 27 ICs, to OD, and to a buildings and facilities account.", "The 21 st Century Cures Act ( P.L. 114-255 ) authorized four major Innovation Projects at NIH, some conducted in partnership with other federal agencies such as the Food and Drug Administration (FDA) or Department of Defense (DOD)", "the Precision Medicine Initiative (PMI; $1.5 billion for FY2017 through FY2026), the Brain Research through Advancing Innovative Neurotechnologies (BRAIN) Initiative ($1.5 billion for FY2017 through FY2026), cancer research ($1.8 billion for FY2017 through FY2023), and regenerative medicine ($30 million for FY2017 through FY2020).", "The 116 th Congress may continue previous congressional interest and oversight of the implementation and progress of the Innovation Projects authorized by the 21 st Century Cures Act.", "For Further Information", "Kavya Sekar, Analyst in Health Policy", "Judith A. Johnson, Specialist in Biomedical Policy ", "CRS Report R41705, The National Institutes of Health (NIH): Background and Congressional Issues , by Judith A. Johnson ", "CRS Report R43341, NIH Funding: FY1994-FY2019 , by Judith A. Johnson and Kavya Sekar", "CRS Report R44720, The 21st Century Cures Act (Division A of P.L. 114-255) , coordinated by Amanda K. Sarata ", "CRS Report R44916, Public Health Service Agencies: Overview and Funding (FY2016-FY2018) , coordinated by C. Stephen Redhead and Agata Dabrowska"], "subsections": []}, {"section_title": "The Food and Drug Administration: Medical Product Innovation", "paragraphs": ["The Food and Drug Administration (FDA) regulates the safety of foods, cosmetics, and radiation-emitting products; the safety and effectiveness of drugs, biologics, and medical devices; as well as public health aspects of tobacco products. To keep pace with changes in science and emerging safety and security issues, FDA's regulations have been subject to various modifications through legislation and administrative action.", "The 21 st Century Cures Act ( P.L. 114-255 ), for example, modified FDA drug and device regulatory pathways to support innovation. Administratively, FDA has issued a series of gene therapy draft guidance documents, concomitant with NIH stepping down oversight of gene therapy human clinical trials. Innovation in this area includes gene editing-based products (e.g., CRISPR) as well as cell-based gene therapies (e.g., CAR-T therapies).", "Pursuant to the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act ( P.L. 115-271 ), FDA must meet with stakeholders and issue guidance to address the challenges of developing nonaddictive medical products for treatment of pain or addiction through regulatory mechanisms established in the 21 st Century Cures Act (e.g., application of novel clinical trial designs). Additionally, the agency launched an Innovation Challenge to incentivize the development of medical devices to detect, treat and prevent addiction and pain. ", "Medical devices are increasingly connected to the internet, hospital networks, and other medical devices, which can increase the risk of cybersecurity threats. Currently, FDA does not have explicit statutory authority pertaining to medical device cybersecurity. However, manufacturers are required to comply with Quality Systems Regulations (QSRs), which are good manufacturing practices for medical devices. QSRs may address, among other things, risk analysis, including cybersecurity risk. In October 2018, FDA entered into a Memorandum of Agreement with the Department of Homeland Security, to implement a framework for greater coordination and information sharing between the two agencies about medical device cybersecurity threats and vulnerabilities.", "For Further Information", "Agata Dabrowska, Analyst in Health Policy", "Victoria Green, Analyst in Health Policy", "Amanda Sarata, Specialist in Health Policy", "CRS Report R44576, The Food and Drug Administration (FDA) Budget: Fact Sheet , by Agata Dabrowska and Victoria R. Green ", "CRS Report R44720, The 21st Century Cures Act (Division A of P.L. 114-255) , coordinated by Amanda K. Sarata", "CRS Report R45405, The SUPPORT for Patients and Communities Act (P.L. 115-271): Food and Drug Administration and Controlled Substance Provisions , coordinated by Agata Dabrowska", "CRS Report R44824, Advanced Gene Editing: CRISPR-Cas9 , by Marcy E. Gallo et al."], "subsections": []}, {"section_title": "Oversight of Laboratory-Developed Tests (LDTs)", "paragraphs": ["In vitro diagnostics (IVD) are devices that provide information used by clinicians and patients to make health care decisions. IVDs are used in laboratory analysis of human samples and include commercial test products and instruments used in testing, among other things. Laboratory-developed tests (LDTs) are a class of IVD that is manufactured and offered within a single laboratory. Genetic tests are a type of diagnostic test that analyzes various aspects of an individual's genetic material (DNA, RNA, chromosomes, and genes). Most genetic tests are LDTs. ", "The regulation of LDTs has been the subject of debate over the past 15 years. The FDA has exercised enforcement discretion over LDT regulation, meaning that most LDTs and genetic tests have not undergone FDA premarket review nor received FDA clearance or approval for marketing. Given the growing use and complexity of LDTs and genetic tests, the FDA has revisited how LDTs should be regulated. ", "In October 2014, FDA published draft guidance on the regulation of LDTs in the Federal Register . The agency summarized the public comments it received on the guidance documents in its January 2017 discussion paper on LDTs. This discussion draft included an outline of a possible approach to LDT oversight. The agency also noted in this discussion paper that it would not issue final guidance to allow for further discussion and to \"give our congressional authorizing committees the opportunity to develop a legislative solution.\"", "Recently, various legislative approaches have been under discussion. A discussion draft bill circulated in early 2017, the \"Diagnostic Accuracy and Innovation Act (DAIA),\" was crafted with industry and other stakeholder input. It outlined a regulatory approach for IVD tests that was risk-based and flexible. FDA responded to this draft in August 2018 with a novel regulatory approach for these tests, including a mechanism for pre-certifying certain related tests to streamline premarket requirements, among other things. In December 2018, a new draft bill based on DAIA and incorporating FDA's feedback was released entitled the \"Verifying Accurate, Leading-edge, IVCT Development (VALID) Act.\" ", "For Further Information", "Amanda Sarata, Specialist in Health Policy ", "Judith Johnson, Specialist in Biomedical Policy", "CRS Report R43438, Regulation of Clinical Tests: In Vitro Diagnostic (IVD) Devices, Laboratory Developed Tests (LDTs), and Genetic Tests , by Amanda K. Sarata and Judith A. Johnson", "CRS Report RL33832, Genetic Testing: Background and Policy Issues , by Amanda K. Sarata"], "subsections": []}, {"section_title": "Stem Cells and Regenerative Medicine", "paragraphs": ["Stem cells have the unique ability to become many types of cells in the body. Scientists are exploring ways of using stem cells to create regenerative medicine therapies that repair damaged or diseased organs and restore them to normal functioning. Stem cells may either be pluripotent or multipotent. Pluripotent stem cells include embryonic stem cells or reprogrammed adult cells that have the ability to become any of the more than 200 cell types in the adult body. Multipotent stem cells have the capacity to become multiple (but not all) types of cells, usually within a particular organ system such as the blood or nervous system. Most adult stem cells are multipotent stem cells. ", "Recently, Congress has taken action to boost research and development of clinical applications for stem cells, both pluripotent and multipotent. For instance, the 21 st Century Cures Act ( P.L. 114-255 ) authorized to be appropriated $30 million for FY2017 through FY2020 for regenerative medicine research and a new designation at FDA for certain regenerative medicine therapies, eligible for expedited review. The term \"regenerative medicine therapy\" includes cell therapy, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or product. Clinical trials are underway for stem cell therapies to treat eye diseases, amyotrophic lateral sclerosis (ALS), Parkinson's disease, traumatic brain injury, and others. However, some therapies have shown safety concerns, including potential cancer risks. ", "There has also been a rise in the number of stem cell clinics offering unapproved and potentially unsafe treatments to consumers. In response, FDA has issued guidance on the regulation of therapies using human cells. FDA has also issued warning letters and taken enforcement actions against certain stem cell clinics offering unapproved treatments. Similarly, the Federal Trade Commission has filed complaints against marketing claims made by stem cell clinics. ", "The 116 th Congress may consider actions to boost research and clinical development of stem cell therapies, while ensuring the safety of such treatments. Policymakers may also consider addressing the rising use of unapproved stem cell treatments. ", "For Further Information", "Kavya Sekar, Analyst in Health Policy", "Agata Dabrowska, Analyst in Health Policy", "Judith A. Johnson, Specialist in Biomedical Policy", "Amanda Sarata, Specialist in Health Policy", "CRS Report R44720, The 21st Century Cures Act (Division A of P.L. 114-255) , coordinated by Amanda K. Sarata", "CRS Report RL33540, Stem Cell Research: Science, Federal Research Funding, and Regulatory Oversight , by Judith A. Johnson and Edward C. Liu"], "subsections": []}, {"section_title": "CRISPR: Advanced Genome Editing", "paragraphs": ["Researchers have long been searching for a reliable and simple way to make targeted changes to the genetic material of humans, animals, plants, and microorganisms. Scientists have developed a gene editing tool known as CRISPR\u2014clustered regularly interspaced short palindromic repeated DNA sequences\u2014that offers the potential for substantial improvement over previous technologies. The characteristics of CRISPR\u2014easier to use, more precise, and less costly\u2014have led many in the scientific and business communities to assert that CRISPR could lead to significant advances across a broad range of areas\u2014from medicine and public health to agriculture and the environment. ", "Over the next 5 to 10 years, the National Academy of Sciences (NAS) projects a rapid increase in the number and type of biotechnology products, many enabled by CRISPR. CRISPR has increased both the pace of development and the variety of crops being genetically modified. Scientists are also beginning to use CRISPR in human clinical trials for a variety of cancers, among other conditions. ", "While CRISPR offers a number of potential benefits it may also pose new risks and raise ethical concerns. For example, in 2018 a Chinese scientist claimed that he used CRISPR to modify human embryos creating twin girls who may be more resistant to HIV. These claims have not been published in the scientific literature and therefore have not been verified. The announcement, however, has renewed debate regarding the ethics of genetic engineering. It has also prompted discussion about how existing law and regulation in the United States apply to the conduct of this type of research, its clinical testing in humans, and specifically its potential applications in human embryos. Currently, federal funds cannot be used for research involving human embryos. Additionally, the FDA is prohibited from using federal funds to review clinical research involving the gene editing of human embryos.", "CRISPR-related approaches are also being considered by some researchers to reduce or eliminate mosquito populations that serve as the primary vector for the transmission of malaria\u2014potentially saving lives and substantially reducing medical costs. A 2016 report from NAS indicates that existing mechanisms may be inadequate to assess the potential immediate and long-term environmental and public health consequences associated with this use of the technology.", "In the 116 th Congress, policymakers might examine the potential benefits and risks associated with the use of CRISPR gene editing, including the ethical and social implications of CRISPR-related biotechnology products. Congress might also consider whether and how to address CRISPR gene editing and future biotechnology products with respect to regulation, research and development, and economic competitiveness, including ways to harmonize CRISPR-related policies of the United States with those of other countries.", "For Further Information", "Marcy E. Gallo, Analyst in Science and Technology Policy", "John F. Sargent Jr., Specialist in Science and Technology Policy", "Amanda K. Sarata, Specialist in Health Policy ", "Tadlock Cowan, Analyst in Natural Resources and Rural Development", "CRS Report R44824, Advanced Gene Editing: CRISPR-Cas9 , by Marcy E. Gallo et al."], "subsections": []}]}, {"section_title": "Climate Change Science and Water", "paragraphs": ["The 116 th Congress may consider whether and how the federal government might address climate change and issues related to water resources. Science and technology considerations permeate these deliberations and may be grouped into six interrelated topics: federal expenditures; climate change science; greenhouse gas (GHG)-related technology development and deployment; investment in infrastructure; anticipating, adapting to, and increasing resilience to the impacts of climate changes; and carbon sequestration technology. Additionally, Congress may face several issues related to ensuring reliable water quality and quantity. "], "subsections": [{"section_title": "Climate-Related S&T Expenditures and Activities by the Federal Government", "paragraphs": ["Federal funding and tax incentives for climate-related S&T reached almost $17 billion in FY2016, the last year reported to Congress by the Office of Management and Budget in response to annual appropriations directives. The funding was spread across 16 reporting agencies, though some related expenditures may not be included. Of the S&T total, approximately $6.7 billion, about 42%, were tax incentives for technology deployment. Another 45% funded \"clean energy technology,\" the large majority at the Department of Energy for R&D and deployment programs. Approximately 15% funded climate change-related science, most of which supported satellites and computing infrastructure. Congress has not thus far reduced appropriations for most climate change-related S&T programs as proposed by the President's budgets for FY2018 and FY2019. The 116 th Congress will again consider appropriations for climate change-related programs and incentives.", "For Further Information", "Jane A. Leggett, Specialist in Energy and Environmental Policy", "CRS Report R43227, Federal Climate Change Funding from FY2008 to FY2014 , by Jane A. Leggett, Richard K. Lattanzio, and Emily Bruner ", "CRS Report R45258, Energy and Water Development: FY2019 Appropriations , by Mark Holt and Corrie E. Clark", "CRS Report RS22858, Renewable Energy R&D Funding History: A Comparison with Funding for Nuclear Energy, Fossil Energy, Energy Efficiency, and Electric Systems R&D , by Corrie E. Clark ", "CRS In Focus IF10589, FY2019 Funding for CCS and Other DOE Fossil Energy R&D , by Peter Folger", "CRS In Focus IF10225, Coastal Flood Resilience: Policy, Roles, and Funds , by Nicole T. Carter, Harold F. Upton, and Francis X. McCarthy "], "subsections": []}, {"section_title": "Climate Change-Related Science", "paragraphs": ["Congress may scrutinize several recent scientific assessments\u2014domestic and international\u2014that strengthened previous assessments: Human-related emissions of greenhouse gases (GHG) are accumulating in the atmosphere, intensifying the natural greenhouse gas effect, and increasing acidity of the oceans. The latest major U.S. assessment, the Climate Science Special Report (CSSR), released in October 2017 by the U.S. Global Change Research Program (USGCRP), concluded that the increase in GHG is driving global land and ocean warming and other climate changes that are now unprecedented in the history of modern civilization. It also stated,", "[B]ased on extensive evidence, that it is extremely likely [>95% likelihood] that human activities, especially emissions of greenhouse gases [GHG] , are the dominant cause of the observed warming since the mid-20 th century . For the warming over the last century, there is no convincing alternative explanation supported by the extent of the observational evidence.", "The USGCRP's November 2018 Fourth National Climate Assessment (NCA4) concluded, inter alia , that human-induced climate change is affecting U.S. communities across the country through extreme weather events and generally warmer temperatures, more variable precipitation, and other observed trends. The NCA4 anticipates continued and increasing disruption to infrastructure, economic, and social systems, including economic disparities. Such impacts would not be distributed evenly across the United States and globally. According to its assessment, projected climate change impacts are affecting, and are virtually certain to increasingly affect, the U.S. economy, trade, and other essential U.S. interests.", "Some stakeholders, including some Members of Congress, consider that the resulting impacts of climate change in the United States and abroad are and would be modest and manageable. ", "The assessments above, and much of the observations and research on which they are founded, have resulted from decades of federal (and nonfederal) investment, amounting to tens of billions of dollars, in global change science. The USGCRP is an interagency mechanism, required by the Global Change Research Act of 1990 ( P.L. 101-606 ), that coordinates and integrates global change research across 13 government agencies. ", "The 116 th Congress may seek to understand the scientific foundations for recent U.S. and international assessments, including the data and methods that increasingly support attribution of many observed changes and extreme weather events to human-related GHG emissions. Congress may also express priorities for further scientific research. In light of the state of climate science, Congress may consider the level of appropriations for its priorities and the distribution among federal climate-related science programs. For example, deliberations may concern the balance between observations and analysis, between science to increase knowledge and to support private and public decisionmaking, and between physical and social sciences, as well as public accessibility to federally supported information. ", "For Further Information", "Jane A. Leggett, Specialist in Energy and Environmental Policy", "CRS Report R45086, Evolving Assessments of Human and Natural Contributions to Climate Change , by Jane A. Leggett "], "subsections": []}, {"section_title": "GHG-Related Technology Research, Development, Demonstration, and Deployment", "paragraphs": ["A large majority of federal climate change-related expenditures is aimed at advancing \"clean energy.\" Most human-related GHG emissions come from production, distribution, and combustion of fossil fuels, particularly for electricity generation and transportation, and are primarily emitted as carbon dioxide (CO 2 ) and methane (CH 4 ). Scientists agree that halting GHG-induced climate change would require eventually reducing net GHG emissions to near zero; the total amount of change would depend in large part on the cumulative emissions on that pathway.", "Many analysts see a decades-long path to stabilizing climate change as involving greater advance and deployment of efficiency improvements, decarbonization, and electrification of the world's economies, along with additional options in multiple sectors. Many options could potentially provide additional security and health benefits, while their costs may depend on public and private investments in research, development, demonstration, and deployment (RDD&D), as well as efforts to facilitate transitions in businesses, employment, and communities. Some see potential carbon capture, utilization, and sequestration (CCUS) technologies as key to preventing CO 2 emissions while preserving a large place for coal and other fossil fuels in the energy economy. Still others advocate for developing CO 2 removal or geoengineering technologies, along with international governance regimes, to intentionally and directly modify the climate, particularly should the climate change rapidly and adversely. The capacity to reduce GHG emissions to near zero at affordable costs, while maintaining U.S. economic growth and security, would depend on deployment of existing and demonstrated technologies supplemented by technological breakthroughs.", "Members may deliberate on the appropriate degree and means of federal support for advancing and deploying new technologies. Choices the 116 th Congress may address include:", "whether any policies should be neutral or favor selected technologies (or fuels); where federal intervention in the technology pipeline, through RDD&D, can be most cost efficient; whether policies are most effective when aimed at pushing the supply of selected technologies or incentivizing demand for low- or no-GHG technologies, or in combination; and how best to engage with the private sector and research institutions in partnerships on RDD&D.", "RDD&D funding has not been evenly distributed across technology types. Research has been intended to advance fossil fuel combustion, renewable energy (including biofuels), efficiency, storage, vehicles and their fuels, nuclear energy, and the electricity grid. Some incentives focus on \"supply-push\" of technologies (e.g., R&D funding), while others emphasize \"demand-pull\" (e.g., tax incentives for purchasers), with numerous examples suggesting that coordinated use of both could be most effective. Cleaner energy technologies can produce public health benefits in addition to climate benefits, while shifts in the energy economy can pose transitional challenges to workers and communities. The magnitude of federal expenditures for climate change technologies, the performance of federally supported programs, and priorities for policy tools and technologies may be topics for Congress, particularly in light of budget objectives.", "For Further Information", "Jane A. Leggett, Specialist in Energy and Environmental Policy", "CRS Report RS22858, Renewable Energy R&D Funding History: A Comparison with Funding for Nuclear Energy, Fossil Energy, Energy Efficiency, and Electric Systems R&D , by Corrie E. Clark ", "CRS Report R45204, Vehicle Fuel Economy and Greenhouse Gas Standards: Frequently Asked Questions , by Richard K. Lattanzio, Linda Tsang, and Bill Canis", "CRS Report R42566, Alternative Fuel and Advanced Vehicle Technology Incentives: A Summary of Federal Programs , by Lynn J. Cunningham et al.", "CRS Report R45010, Public-Private Partnerships (P3s) in Transportation , by William J. Mallett ", "CRS In Focus IF10979, Greenhouse Gas Emissions and Sinks in U.S. Agriculture , by Ren\u00e9e Johnson "], "subsections": []}, {"section_title": "Climate Change and Infrastructure", "paragraphs": ["Leaders in both chambers of Congress, as well as President Trump, are interested in federal investment in the nation's infrastructure. In evaluating options for infrastructure, two types of linkages with climate change may be important to consider simultaneously (along with numerous other factors) to optimize investments: infrastructure effects on long-term GHG emissions and potential effects of climate change on long-term infrastructure-related costs and public health and safety. For example, decisions regarding modernization of the electric grid may take account both of possible future policies to reduce GHG emissions and effects on electricity reliability in the context of more extreme weather events and an average increase in summer cooling demand. ", "The first linkage between climate change and infrastructure investment arises from the foundation that infrastructure sets for certain technological choices, and consequently, levels of future U.S. GHG emissions (and the costs of reducing them). Long-lived infrastructure may exert influence on emissions for decades into the future; Infrastructure can \"lock in\" or support flexibility for certain technological options. Infrastructure choices could make adaption to new science, technological advances, and policy priorities more or less expensive.", "Infrastructure influence on GHG emissions is particularly strong for energy supply, transportation, industry, buildings, and communities. For example, pipeline infrastructure would be critical for deployment of CCUS technologies, particularly for industrial applications. In transportation, choices among transportation modes, and choices between energy types (e.g., gasoline or biofuels or electricity) would depend in part on the availability of the refueling or charging infrastructure. Similarly, land use decisions\u2014generally made by local governments and maybe influenced by federal funding\u2014affect transportation options, which can have long-term impacts on fossil fuel consumption. For example, land use development patterns designed for private automobiles are often not readily adaptable for installation of mass transit. ", "A second linkage between climate change and infrastructure investment is the ability of infrastructure to avoid damages and offer resilience to climate changes, including extreme weather events that scientists expect to increase in frequency and strength. Because much infrastructure is intended to last for decades, projected climate changes in 2030 or 2050 that seem far off for current decisionmaking may have importance for future adequacy, safety, operating costs, and maintenance of investments. Some federal (including military) infrastructure has been severely damaged in recent extreme weather events, while nonfederal water, energy, transportation, urban, and other systems have been disrupted or experienced sustained damage. Congress may consider the merits of technical specifications or incentives to harden or increase the resiliency of long-lived infrastructure funded by the federal government, potentially providing model code or demonstrations to other decisionmakers. Policy choices could, on the one hand, increase near-term costs of building infrastructure; on the other hand, climate-related benefits could include avoiding future losses to life, damages to human health (including mental health), and higher federal outlays that could occur with projected climate change.", "For Further Information", "Jane A. Leggett, Specialist in Energy and Environmental Policy", "CRS Report R45156, The Smart Grid: Status and Outlook , by Richard J. Campbell ", "CRS Report R45105, Potential Options for Electric Power Resiliency in the U.S. Virgin Islands , by Corrie E. Clark, Richard J. Campbell, and D. Andrew Austin ", "CRS Report R44911, The Energy Savings and Industrial Competitiveness Act: S. 385 and H.R. 1443 , by Corrie E. Clark ", "CRS Report R45350, Funding and Financing Highways and Public Transportation , by Robert S. Kirk and William J. Mallett ", "CRS In Focus IF10702, Drought Response and Preparedness: Policy and Legislation , by Nicole T. Carter and Charles V. Stern ", "CRS Report R40147, Infrastructure: Green Building Overview and Issues , by Eric A. Fischer and Danielle A. Arostegui ", "CRS Report R43415, Keystone XL: Greenhouse Gas Emissions Assessments in the Final Environmental Impact Statement , by Richard K. Lattanzio "], "subsections": []}, {"section_title": "Science and Technology for Adaptation and Resilience", "paragraphs": ["In light of recent scientific assessments and federal outlays for relief and recovery following extreme weather events, some of which have been statistically linked to GHG-induced climate change, Congress may review federal programs for S&T to support adaptation or resilience to projected climate change. Some issues related to infrastructure technology are discussed above, and there are additional science and technology issues associated with adaptation and resilience. For example, technological R&D needs may include new crop seed varieties suited to emerging climate conditions, better means to manage floodwaters, advanced air conditioning technologies for buildings, wildfire management techniques, and others. Further advances in climate forecasting, particularly at the local scale, could assist assessment of vulnerabilities and preparation for opportunities and risks. Improved understanding of human behavior could assist adaptation and resilience.", "Congress may address the federal role in supporting S&T that can facilitate effective state, local, and private decisionmaking on adaptation and resilience to climate change. Federal roles may include easing access to scientific research, climate and seasonal projections, impact assessments, and adaptation decision tools. One question would be the degree to which federal financial support encourages or discourages consideration of vulnerabilities and adaptation in private, state, and local decisionmaking, as regarding flood risk mitigation or agricultural risks. Congress may also review efforts already begun to incorporate climate change projections into federal agency management of federal personnel, infrastructure, and operations. Effective agency decisions would all depend on the adequacy and appropriate use of scientific information and available technologies.", "For Further Information", "Jane A. Leggett, Specialist in Energy and Environmental Policy", "CRS Report R43915, Climate Change Adaptation by Federal Agencies: An Analysis of Plans and Issues for Congress , coordinated by Jane A. Leggett", "CRS Report R45017, Flood Resilience and Risk Reduction: Federal Assistance and Programs , by Nicole T. Carter et al. ", "CRS Report R43407, Drought in the United States: Causes and Current Understanding , by Peter Folger ", "CRS Report R43199, Energy-Water Nexus: The Energy Sector's Water Use , by Nicole T. Carter", "CRS Report R44632, Sea-Level Rise and U.S. Coasts: Science and Policy Considerations , by Peter Folger and Nicole T. Carter ", "CRS In Focus IF10728, After the Storm: Highway Reconstruction and Resilience , by Robert S. Kirk "], "subsections": []}, {"section_title": "Carbon Capture and Sequestration", "paragraphs": ["Carbon capture and sequestration (or storage)\u2014known as CCS\u2014involves capturing carbon dioxide (CO 2 ) at its source, storing it underground, or utilizing it for another purpose or product. (As noted earlier, CCS is sometimes referred to as CCUS\u2014carbon capture, utilization , and storage.) CCS could reduce the amount of CO 2 emitted from the burning of fossil fuels at large stationary sources. Carbon utilization recently has gained interest within Congress as a means for capturing CO 2 and converting it into potentially commercially viable products, such as chemicals, fuels, cements, and plastics. Direct air capture (DAC) is also an emerging technology. DAC would remove atmospheric CO 2 directly from the atmosphere.", "CCS includes three main steps: (1) capturing CO 2 ; (2) transporting CO 2 ; and (3) injecting it into the subsurface. Following injection, the CO 2 would be monitored to verify that it remains underground. Capturing CO 2 is the most costly and energy-intensive step in the process (this is sometimes referred to as the energy penalty or the parasitic load ).", "Emerging technologies for carbon utilization and DAC have energized some CCS advocates. A challenge for utilization is whether the market for products and uses is large enough so that the amount of carbon captured or removed has a measurable effect mitigating climate change. The challenge for DAC is fairly straightforward\u2014how to reduce the cost per ton of CO 2 removed. ", "Since FY2010, Congress has provided more than $5 billion total in annual appropriations for CCS activities at DOE, primarily for research and development within DOE's Office of Fossil Energy (FE). Congress provided nearly $727 million to FE R&D in FY2018 and $740 million for FY2019. The Trump Administration's FY2019 budget request would have shifted away from CCS R&D to fund other priorities. ", "Globally, two fossil-fueled power plants currently generate electricity and capture CO 2 in large quantities: the Boundary Dam plant in Canada and the Petra Nova plant in Texas. Both plants offset some of the capture costs by selling the captured CO 2 for purposes of enhanced oil recovery. The 115 th Congress enacted a tax provision (Title II, Section 41119 of P.L. 115-123 , which amended Internal Revenue Code, Section 45Q). The amendment increases the tax credit for CCS. Some stakeholders suggest that the changes to Section 45Q could be a \"game changer\" for CCS development in the United States. The 116 th Congress may explore how the 45Q tax credit is being implemented, and whether further legislative changes to the provision might be needed to accelerate deployment of CCS.", "For Further Information", "Peter Folger, Specialist in Energy and Natural Resources Policy", "CRS Report R44902, Carbon Capture and Sequestration (CCS) in the United States , by Peter Folger", "CRS Report R41325, Carbon Capture: A Technology Assessment , by Peter Folger "], "subsections": []}, {"section_title": "Water", "paragraphs": ["Reliable water quantity and quality supports the U.S. population and economy, including public and ecosystem health, agriculture, and industry (e.g., energy production, fisheries, navigation, and manufacturing). Research related to developing, using, and protecting water supplies and aquatic ecosystems is diverse. Because of this diversity, federal research activities and facilities span numerous departments, agencies, and laboratories. The federal government also funds water research through grants to universities and other researchers. In recent years, federal agencies have sponsored various prize competitions for water data, science, and technologies and developed cooperative arrangement with various entities. Drinking water contamination and recent droughts, floods, and storms also have increased interest in innovative technologies and practices (including approaches that mimic nature, often referred to as green infrastructure or nature-based infrastructure). The 116 th Congress may consider water research and technology topics which can be broadly divided into water and aquatic ecosystem information, water infrastructure and use, and water quality.", "Information on water and aquatic ecosystem information includes observations, forecasts, and associated modeling. Science and research agencies collect data remotely and in situ ; they use a wide variety of traditional and new technologies and techniques that inform water-related decisions for infrastructure, agriculture, and drinking water and wastewater services. Some of the water and ecosystem information research topics that may be before the 116 th Congress include the following:", "water monitoring infrastructure and science programs, including, water quality monitoring, stream gauges, buoys, and groundwater assessments; water-related weather, climate, and earth system science including storm surge, hurricane, rainfall, and drought forecasts and associated remote sensing investments (see \" Earth-Observing Satellites \"); water conditions in rivers and along coasts (e.g., relative sea-level rise rates); altering the operation of existing reservoirs (e.g., using seasonal forecasts for forecast-informed operations); monitoring and management of invasive species and harmful algal blooms; access to and use of water data (e.g., the Open Water Data Initiative); and coordination of the federal water science and research portfolio, including partnerships with academic and private entities. ", "Water infrastructure research encompasses how to prolong and improve the performance of existing coastal and inland water infrastructure as well as the development of next-generation infrastructure technologies. Some infrastructure and water use research topics include:", "water augmentation technologies and science to support their adoption, including stormwater capture, water reuse, brackish and seawater desalination, as well as groundwater recharge, storage, and recovery; technologies and materials for monitoring and rehabilitating aging infrastructure, such as materials selection, construction and repair techniques, and detection technologies (e.g., structural health monitors and leak detection); water efficiency technologies and practices; and technologies to enhance infrastructure resilience to droughts, floods, hurricanes, and other natural hazards.", "The quality of drinking water, surface water, and groundwater is important for public health, environmental protection, food security, and other purposes. Technologies for preventing contamination and for identifying and treating existing contamination is an ongoing research topic for the federal government. Some research topics include:", "analytical methods and treatment technologies to detect and manage emerging contaminants (e.g., cyanotoxins associated with harmful algal blooms and perfluoroalkyl substances [PFASs]); technologies to prevent and manage contamination at drinking water treatment plants and in distribution systems (e.g., real-time monitoring, treatment to minimize disinfection byproducts, and lead pipe corrosion control); and innovative technologies and practices to protect water quality, including methods for increasing resilience of drinking water systems against natural disasters, protecting drinking water sources for public water system from contamination (e.g., nature-based stormwater management, watershed management approaches, and nonpoint source pollution management).", "For Further Information", "Nicole T. Carter, Specialist in Natural Resources Policy ", "Peter Folger, Specialist in Energy and Natural Resources Policy ", "Elena H. Humphreys, Analyst in Environmental Policy", "Eva Lipiec, Analyst in Natural Resources Policy", "Anna E. Normand, Analyst in Natural Resources Policy", "Pervaze A. Sheikh, Specialist in Natural Resources Policy ", "CRS Report R43777, U.S. Geological Survey: Background, Appropriations, and Issues for Congress , by Pervaze A. Sheikh and Peter Folger ", "CRS Report R43407, Drought in the United States: Causes and Current Understanding , by Peter Folger", "CRS Report R44632, Sea-Level Rise and U.S. Coasts: Science and Policy Considerations , by Peter Folger and Nicole T. Carter ", "CRS Report R44871, Freshwater Harmful Algal Blooms: Causes, Challenges, and Policy Considerations , by Laura Gatz", "CRS Report R45259, The Federal Role in Groundwater Supply: Overview and Legislation in the 115th Congress , by Peter Folger et al.", "CRS In Focus IF10719, Forecasting Hurricanes: Role of the National Hurricane Center , by Peter Folger "], "subsections": []}]}, {"section_title": "Defense", "paragraphs": ["Science and technology play an important role in national defense. The Department of Defense (DOD) relies on a robust research and development effort to develop new military systems and improve existing systems. Issues that may come before the 116 th Congress regarding the DOD's S&T activities include budgetary concerns and the effectiveness of programs to transition R&D results into fielded products."], "subsections": [{"section_title": "Department of Defense Research and Development", "paragraphs": ["The Department of Defense spends more than $90 billion per year on research, development, testing, and evaluation (RDT&E). Roughly 80%-85% of this is spent on the design, development, and testing of specific military systems. Examples of such systems include large integrated combat platforms such as aircraft carriers, fighter jets, and tanks, among others. They also include much smaller systems such as blast gauge sensors worn by individual soldiers. The other 15%-20% of the RDT&E funding is spent on what is referred to as DOD's Science and Technology Program. The S&T Program includes activities ranging from basic science to demonstrations of new technologies in the field. The goal of DOD's RDT&E spending is to provide the knowledge and technological advances necessary to maintain U.S. military superiority. ", "DOD's RDT&E budget contains hundreds of individual line items. Congress provides oversight of the program, making adjustments to the amount of funding requested for any number of line items. These changes are based on considerations such as whether the department has adequately justified the expenditure or the need to accommodate larger budgetary adjustments. ", "RDT&E priorities and focus, including those of the S&T portion, do not change radically from year to year, though a few fundamental policy-related issues regularly attract congressional attention. These include ensuring that S&T, particularly basic research, receives sufficient funding to support next generation capabilities; seeking ways to speed the transition of technology from the laboratory to the field; and ensuring an adequate supply of S&T personnel. Additionally, the impact of budgetary constraints, including continuing resolutions, on RDT&E may be of interest to the 116 th Congress. Specifically, senior DOD officials have been describing the need to develop and implement a strategy aimed at identifying new and innovative ways to maintain the dominance of U.S. military capabilities into the future, which may require increased investment in RDT&E. ", "In addition, as federal defense-related R&D funding's share of global R&D funding has fallen from about 36% in 1960 to about 4% in 2016, some have become concerned about the ability of DOD to direct the development of leading technologies and to control which countries have access to it. Today, commercial companies in the United States and elsewhere in the world are leading development of groundbreaking technologies in fields such as artificial intelligence, autonomous vehicles and systems, and advanced robotics. DOD has sought to build institutional mechanisms (e.g., the Defense Innovation Unit) and a culture for accessing technologies from nontraditional defense contractors. DOD's ability to maintain a technology edge for U.S. forces may depend increasingly upon these external sources of innovation for its weapons and other systems.", "For Further Information", "John F. Sargent Jr., Specialist in Science and Technology Policy ", "Marcy E. Gallo, Analyst in Science and Technology Policy", "CRS Report R45403, The Global Research and Development Landscape and Implications for the Department of Defense , by John F. Sargent Jr., Marcy E. Gallo, and Moshe Schwartz", "CRS Report R44711, Department of Defense Research, Development, Test, and Evaluation (RDT&E): Appropriations Structure , by John F. Sargent Jr. ", "CRS Report R45110, Defense Science and Technology Funding , by John F. Sargent Jr. ", "CRS Report R45150, Federal Research and Development (R&D) Funding: FY2019 , coordinated by John F. Sargent Jr."], "subsections": []}]}, {"section_title": "Energy", "paragraphs": ["Energy-related science and technology issues that may come before the 116 th Congress include those related to reprocessing spent nuclear fuel, advances in nuclear energy technology, the development of biofuels and ocean energy technology, and international fusion research."], "subsections": [{"section_title": "Reprocessing of Spent Nuclear Fuel", "paragraphs": ["Spent fuel from commercial nuclear reactors contains most of the original uranium that was used to make the fuel, along with plutonium and highly radioactive lighter isotopes produced during reactor operations. A fundamental issue in nuclear policy is whether spent fuel should be \"reprocessed\" or \"recycled\" to extract plutonium and uranium for new reactor fuel, or directly disposed of without reprocessing. Proponents of nuclear power point out that spent fuel still contains substantial energy that reprocessing could recover, and that reprocessing could reduce the long-term hazard of radioactive waste. However, reprocessed plutonium can also be used in nuclear weapons, so critics of reprocessing contend that federal support for the technology could undermine U.S. nuclear weapons nonproliferation policies. The potential commercial viability of reprocessing or recycling is also an issue.", "In the 1950s and 1960s, the federal government expected that all commercial spent fuel would be reprocessed to make fuel for \"breeder reactors\" that would convert uranium into enough plutonium to fuel additional commercial breeder reactors.", "Increased concern about weapons proliferation in the 1970s and the slower-than-projected growth of nuclear power prompted President Carter to halt commercial reprocessing efforts in 1977, along with a federal demonstration breeder project. During the Reagan Administration, Congress provided funding to restart the breeder demonstration project, but then halted project funding in 1983 while continuing to fund breeder-related research and development by the Department of Energy (DOE). During the Clinton Administration, research on producing nuclear energy through reprocessing was largely halted, although some work on the technology continued for waste management purposes.", "During the George W. Bush Administration, there was renewed federal support for reprocessing, with a proposal to complete a pilot plant by the early 2020s. During the Obama Administration, plans for the pilot plant were halted and DOE's Fuel Cycle Research and Development Program was redirected toward development of technology options for a wide range of nuclear fuel cycle approaches, including direct disposal of spent fuel (the \"once through\" cycle), deep borehole disposal, and partial and full recycling. The Trump Administration proposed deep reductions in Fuel Cycle R&D in FY2018 and FY2019. However, the Consolidated Appropriations Act for 2018 ( P.L. 115-141 ) increased the program's funding from $208 million in FY2017 to $260 million in FY2018\u2014a 26% boost. Funding was increased slightly further, to $264 million, by the Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs Appropriations Act, 2019 ( P.L. 115-244 ). The level of funding for nuclear fuel cycle and waste disposal R&D may be a continuing issue in the 116 th Congress.", "Another DOE project related to reprocessing policy is the uncompleted Mixed Oxide Fuel Fabrication Facility (MFFF) at the Department's Savannah River Site in South Carolina. MFFF would produce fuel for commercial nuclear reactors using surplus nuclear weapons plutonium, as part of an agreement with Russia to reduce nuclear weapons material. Critics of the project contend that MFFF would subvert U.S. nonproliferation efforts by encouraging the use of plutonium fuel. Because of rising costs, the Obama Administration proposed to halt the MFFF project in FY2017 and pursue alternative plutonium disposition options. The Trump Administration's FY2018 budget request also called for terminating MFFF. The FY2018 National Defense Authorization Act ( P.L. 115-91 ) authorized DOE to pursue an alternative disposal option if its total costs were found to be less than half of those for completing and operating MFFF. The Consolidated Appropriations Act for 2018 conformed to the NDAA authorizing language. Energy Secretary Rick Perry certified in May 2018 that the cost saving requirement for terminating MFFF would be met. For FY2019, P.L. 115-244 appropriated $220 million, the same as the request, to begin shutting down the project. Termination of MFFF could shift the debate on plutonium disposition policy toward other options, such as dilution and disposal in a deep repository. R&D funding for such alternatives could be an issue for the 116 th Congress.", "For Further Information", "Mark Holt, Specialist in Energy Policy ", "CRS Report R42853, Nuclear Energy: Overview of Congressional Issues , by Mark Holt ", "CRS Report RL34234, Managing the Nuclear Fuel Cycle: Policy Implications of Expanding Global Access to Nuclear Power , coordinated by Mary Beth D. Nikitin", "CRS Report R43125, Mixed-Oxide Fuel Fabrication Plant and Plutonium Disposition: Management and Policy Issues , by Mark Holt and Mary Beth D. Nikitin"], "subsections": []}, {"section_title": "Advanced Nuclear Energy Technology", "paragraphs": ["All currently operating commercial nuclear power plants in the United States are based on light water reactor (LWR) technology, in which ordinary water cools the reactor and acts as a neutron moderator to help sustain the nuclear chain reaction. DOE has long conducted research and development work on other, non-LWR nuclear technologies that could have advantages in safety, waste management, and cost. A growing number of private-sector firms are pursuing commercialization of advanced nuclear technologies as well.", "Advanced nuclear energy technologies include high-temperature gas-cooled reactors, liquid metal-cooled reactors, and molten salt reactors (in which the nuclear fuel is dissolved in the coolant), among a wide range of other concepts. Many of these concepts would involve nuclear chain reactions using fast neutrons, which are not slowed by a moderator. Research on advanced reactor coolants, materials, controls, and safety is carried out by DOE's Advanced Reactor Technologies program. The program received $111.5 million for FY2019 ( P.L. 115-244 ), 51% above the Administration request. The appropriation includes $20 million for research and development on microreactors\u2014reactors with electric generating capacity of only a few megawatts, a tiny fraction of the capacity of existing commercial reactors.", "Private-sector nuclear technology companies contend that a major obstacle to commercializing advanced reactors is that the Nuclear Regulatory Commission's (NRC's) licensing process is based on existing LWR technology. They have urged NRC to develop a licensing and regulatory framework that could apply to all nuclear concepts. They also have recommended a \"staged review process\" to provide conditional NRC approval for advanced reactor designs at key milestones toward the issuance of an operating license. NRC and DOE are currently implementing the Joint Advanced Non-Light Water Reactors Licensing Initiative to adapt existing general design criteria for LWRs for use by advanced reactor license applications. Under that initiative, NRC issued \"Guidance for Developing Principal Design Criteria for Non-Light Water Reactors\" on April 9, 2018. NRC is also supporting industry efforts to develop guidance for technology-neutral reactor licensing.", "Legislation to promote advanced nuclear power technologies, the Nuclear Energy Innovation Capabilities Act of 2017 ( P.L. 115-248 ), was signed by President Trump on September 28, 2018. A major provision of the bill would authorize DOE national laboratories or other DOE-owned sites to host reactor demonstration projects sponsored fully or partly by the private sector. It would also require DOE to determine the need for a fast-neutron \"versatile\" test reactor and authorize grants to help pay for NRC licensing of advanced reactor designs. Related legislation, the Nuclear Energy Innovation and Modernization Act ( P.L. 115-439 ), was signed into law January 14, 2019. Among other provisions, it would require NRC to develop a regulatory framework that would encourage commercialization of advanced nuclear technology. Some public-private R&D on advanced nuclear technology is already being conducted at national labs under DOE's Gateway for Accelerated Innovation in Nuclear (GAIN) initiative. Congress appropriated $65 million ( P.L. 115-244 ) for early-stage development of a versatile advanced test reactor in FY2019. The 116 th Congress may consider additional legislation on advanced reactors, including funding for R&D, licensing, and demonstration.", "For Further Information", "Mark Holt, Specialist in Energy Policy", "CRS Insight IN10765, Small Modular Nuclear Reactors: Status and Issues , by Mark Holt ", "CRS Report R42853, Nuclear Energy: Overview of Congressional Issues , by Mark Holt "], "subsections": []}, {"section_title": "Biofuels", "paragraphs": ["Biofuels\u2014liquid transportation fuels produced from biomass feedstock\u2014are often described as an alternative to conventional fuels. Some see promise in producing liquid fuels from a domestic feedstock that may reduce dependence on foreign sources of oil, contribute to improving rural economies, and lower greenhouse gas emissions. Others regard biofuels as potentially causing more harm to the environment (e.g., air and water quality concerns), encouraging landowners to put more land into production, and being prohibitively expensive to produce. The debate about the feasibility of biofuels is complex, as policymakers consider a multitude of factors (e.g., feedstock costs, timeframe to reach substantial commercial-scale advanced biofuel production, environmental impact of biofuels). The debate can be even more complicated when considering that biofuels may be produced using numerous biomass feedstocks and conversion technologies. ", "Congress has expressed interest in biofuels for decades, with most of its attention on the production of \"first-generation\" biofuels (e.g., cornstarch ethanol). Farm bills have had a significant effect on biofuel research and development. Starting in 2002, the farm bills have contained an energy title with several programs focused on assisting biofuel production. In addition, the DOE Office of Energy Efficiency and Renewable Energy (EERE) supports research and development for domestic biofuel production. Congress and the Administration have debated the amount of funding both USDA and DOE should receive for biofuel initiatives. While commercial-scale production of \"first-generation\" biofuels is well established, commercial-scale production for some advanced biofuels (e.g., cellulosic ethanol) is in its infancy. ", "In 2007, Congress expanded one policy that has supported an increase in advanced biofuel production\u2014the Renewable Fuel Standard (RFS). The RFS requires U.S. transportation fuel to contain a minimum volume of biofuel, a growing percentage of which is to come from advanced biofuels. The RFS is under scrutiny for various reasons, including the Environmental Protection Agency (EPA) exercising its regulatory authority to issue a waiver and reduce the total renewable fuel volume below what was required by statute and concerns about RFS compliance. This creates significant uncertainty for certain stakeholders, with the result that some of the advanced biofuel targets are not being met. An overarching issue is that the statute may require more biofuel to be produced than can be used given the existing motor fuel distribution infrastructure and the limited fleet of passenger vehicles that are built to run on higher percentage blends of biofuels. The 116 th Congress may consider whether to modify various biofuel promotional efforts, or to maintain the status quo. ", "For Further Information", "Kelsi Bracmort, Specialist in Natural Resources and Energy Policy ", "CRS Report R43325, The Renewable Fuel Standard (RFS): An Overview , by Kelsi Bracmort ", "CRS In Focus IF10842, The Renewable Fuel Standard: Is Legislative Reform Needed? , by Kelsi Bracmort ", "CRS In Focus IF10639, Farm Bill Primer: Energy Title , by Kelsi Bracmort ", "CRS In Focus IF10661, DOE Office of Energy Efficiency and Renewable Energy: FY2017 Appropriations and the FY2018 Budget Request , by Kelsi Bracmort and Corrie E. Clark"], "subsections": []}, {"section_title": "Offshore Energy Development Technologies", "paragraphs": ["Technological innovations are key drivers of U.S. ocean energy development. They may facilitate exploration of previously inaccessible resources, provide cost efficiencies in a low-oil-price environment, address safety and environmental concerns, and enable advances in emerging sectors such as U.S. offshore wind. Private industry, universities, and government are all involved in ocean energy R&D. At the federal level, the Department of Energy and the Department of the Interior (DOI) both support ocean energy research. ", "One area of policymaker interest involves deepwater oil and gas operations. Industry interest in expanding deepwater activities, improving efficiency, and reducing costs has prompted improvements in drilling technologies and steps toward automated monitoring and maintenance. The oil and gas industry and federal regulators also have focused on safety improvements to reduce the likelihood of catastrophic oil spills in deep water. In 2016, DOI promulgated safety regulations that tighten requirements for offshore blowout preventer systems and other well control equipment. In April 2018, DOI published proposed revisions to the rule, including several changes that could reduce the cost to industry and time involved in meeting certain technological requirements. For both the original rule and the proposed revisions, stakeholders have debated the potential costs of compliance and whether the technological requirements are unnecessarily prescriptive or, conversely, not prescriptive enough to achieve safety aims. ", "Congress may also consider technology issues related to offshore drilling in the Arctic, where sea ice and infrastructure gaps pose challenges for the economic viability and safety of mineral exploration. A focus of industry R&D is on technology to extend the Arctic drilling season beyond the periods where sea ice is absent\u2014for example, by developing ice-capable mobile offshore drilling units (MODUs). DOI finalized safety regulations for Arctic exploratory drilling in 2016. President Trump's Executive Order 13795 ordered DOI to review these regulations and DOI's Fall 2018 Regulatory Agenda includes an anticipated rule revision. Some have argued that the regulations are too costly for industry and give inadequate weight to available technologies (such as those for well capping) that could reduce safety costs. Others question whether any rules or technologies can adequately ensure drilling safety in the Arctic given the environmental risks. ", "Among renewable ocean energy sources, only wind energy is poised for commercial application in U.S. waters. In December 2016, the first U.S. offshore wind farm, off of Rhode Island, began regular operations. A focus of R&D is technology to increase offshore turbine efficiency and reduce costs, including floating turbines for deep waters, where resources may be more abundant and user conflicts fewer. Other research explores improvements to electrical infrastructure, such as integrating transmission networks for multiple projects. A potential issue for Congress is whether and how to support or incentivize offshore wind development and other ocean renewables.", "For Further Information", "Laura Comay, Specialist in Natural Resources Policy ", "CRS Report R44692, Five-Year Program for Federal Offshore Oil and Gas Leasing: Status and Issues in Brief , by Laura B. Comay ", "CRS Report R42942, Deepwater Horizon Oil Spill: Recent Activities and Ongoing Developments , by Jonathan L. Ramseur", "CRS Report R41153, Changes in the Arctic: Background and Issues for Congress , coordinated by Ronald O'Rourke"], "subsections": []}, {"section_title": "ITER", "paragraphs": ["ITER (formerly known as the International Thermonuclear Experimental Reactor) is an international fusion energy research facility currently under construction in Cadarache, France. When completed, ITER is to be the world's largest fusion reactor and the first capable of producing more energy than it consumes. Although the energy output from ITER will not be harnessed to produce electricity, fusion researchers see ITER as the next step toward implementation of fusion energy as a power source.", "ITER is an international collaboration. Along with the United States, the partners are the European Union, China, India, Japan, Russia, and South Korea. The United States withdrew from the initial design phase of ITER in 1998 at congressional direction, largely because of concerns about cost and scope. The project was restructured, and the United States rejoined in 2003. The formal international agreement to build the facility was approved in 2006.", "The European Union, as host, is responsible for 45% of the construction cost, while the United States and the other participating countries are responsible for 9% each. Most of the U.S. share (which is $132 million in FY2019) is being contributed in kind, in the form of components and equipment sourced mostly from U.S. companies, universities, and national laboratories.", "The construction phase of ITER is planned for completion in 2027. Once operational, the facility is expected to have a lifespan of 15-25 years. During the operation phase, and during subsequent deactivation and decommissioning, the agreed U.S. cost share is 13%.", "In recent years, ITER management issues, schedule delays, and cost growth have sometimes led to proposals in Congress to terminate U.S. participation. A central issue is that U.S. funding for ITER may be crowding out funding for domestic fusion energy research. DOE budget documents show the cost of U.S. participation in ITER in FY2020 and beyond as \"to be determined\" once the Administration decides whether to continue participating in the project.", "In 2018, at DOE's request, the National Academies of Science, Engineering, and Medicine issued a strategic plan for fusion energy research. It recommended, first, that \"the United States should remain an ITER partner as the most cost-effective way to gain experience with a burning plasma at the scale of a power plant.\" Second, looking beyond ITER, it recommended that \"the United States should start a national program of accompanying research and technology leading to the construction of a compact pilot plant that produces electricity from fusion at the lowest possible capital cost.\" The DOE Fusion Energy Sciences Advisory Committee has also embarked on a strategic planning effort, encompassing both ITER and domestic research, with a final report anticipated in late 2020. The 116 th Congress may continue oversight of ITER's scientific progress, cost, and schedule, and may revisit the debate about whether to continue U.S. participation.", "For More Information", "Daniel Morgan, Specialist in Science and Technology Policy"], "subsections": []}]}, {"section_title": "Homeland Security", "paragraphs": ["The federal government spends billions of dollars supporting research and development to protect the homeland. Some of the issues that the 116 th Congress may consider include how the Department of Homeland Security performs research and development; federal efforts to develop and procure new medical countermeasures against chemical, biological, radiological, and nuclear agents; and federal efforts to ensure the safety and security of laboratories working with dangerous pathogens."], "subsections": [{"section_title": "R&D in the Department of Homeland Security", "paragraphs": ["The Department of Homeland Security (DHS) has identified five core missions: to prevent terrorism and enhance security, to secure and manage the borders, to enforce and administer immigration laws, to safeguard and secure cyberspace, and to ensure resilience to disasters. New technology resulting from research and development can contribute to all these goals. The Directorate of Science and Technology has primary responsibility for establishing, administering, and coordinating DHS R&D activities. The Domestic Nuclear Detection Office (DNDO) is responsible for R&D relating to nuclear and radiological threats. Several other DHS components, including the Coast Guard, also fund R&D and R&D-related activities related to their missions.", "Coordination of DHS R&D is a long-standing congressional interest. In 2012, the Government Accountability Office (GAO) concluded that because so many components of the department are involved, it is difficult for DHS to oversee R&D department-wide. In January 2014, the joint explanatory statement for the Consolidated Appropriations Act, 2014 ( P.L. 113-76 ) directed DHS to implement and report on new policies for R&D prioritization. It also directed DHS to review and implement policies and guidance for defining and overseeing R&D department-wide. In July 2014, GAO reported that DHS had updated its guidance to include a definition of R&D and was conducting R&D portfolio reviews across the department, but that it had not yet developed policy guidance for DHS-wide R&D oversight, coordination, and tracking. In December 2015, the explanatory statement for the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ) stated that DHS \"lacks a mechanism for capturing and understanding research and development (R&D) activities conducted across DHS, as well as coordinating R&D to reflect departmental priorities.\" The Common Appropriations Structure that DHS introduced in February 2016 in its FY2017 budget request includes an account titled Research and Development for each DHS component. It remains to be seen whether this change will help to address congressional concerns about DHS-wide R&D coordination.", "DHS has reorganized its R&D-related activities several times. In December 2017, it established a new Countering Weapons of Mass Destruction Office (CWMDO), consisting of DNDO, most functions of the Office of Health Affairs (OHA), and some other elements. DNDO and OHA were themselves both created, more than a decade ago, largely by reorganizing elements of the S&T Directorate. The Countering Weapons of Mass Destruction Act of 2018 ( P.L. 115-387 ) expressly authorized the establishment and activities of CWMDO. The 116 th Congress may examine the implementation of that act. ", "For Further Information", "Daniel Morgan, Specialist in Science and Technology Policy"], "subsections": []}, {"section_title": "Chemical, Biological, Radiological, and Nuclear Medical Countermeasures", "paragraphs": ["The anthrax attacks of 2001 highlighted the nation's vulnerability to biological terrorism. The federal government responded to these attacks by increasing efforts to protect civilians against chemical, biological, radiological, and nuclear (CBRN) terrorism. Effective medical countermeasures, such as drugs or vaccines, could reduce the impact of a CBRN attack. Policymakers identified a lack of such countermeasures as a challenge to responding to the CBRN threat. To address this gap, the federal government created several programs to encourage private sector development of new CBRN medical countermeasures. Despite these efforts, the federal government still lacks medical countermeasures for many CBRN threats, including Ebola.", "The Biomedical Advanced Research and Development Authority (BARDA) and Project BioShield are two key pieces of the federal efforts supporting the development and procurement of new CBRN medical countermeasures. BARDA directly funds the advanced development of countermeasures through contracts with private sector developers. Project BioShield provides a procurement mechanism to remove market uncertainty for countermeasure developers. It allows the federal government to agree to buy a countermeasure up to 10 years before the product is likely to finish development. Congress has modified these and related programs to improve their performance, efficiency, and transparency to oversight. However, some key issues remain unresolved, including those related to appropriations, interagency coordination, countermeasure prioritization and implementation of the 2018 National Biodef e nse Strategy . In addition to questions regarding the amount of funding, Congress may consider whether the appropriations are efficiently balanced throughout the research and development pipeline. Policymakers may consider whether the congressionally-mandated planning and transparency requirements have sufficiently enhanced coordination of the multiagency countermeasure development enterprise. Additionally, Congress may consider whether the countermeasure prioritization process appropriately balances the need to address traditional threats such as anthrax and smallpox with the threat posed by emerging infectious diseases such as Ebola. Finally, Congress may consider the administration's progress implementing the new National Biodefense Strategy and how it affects the medical countermeasure research and development enterprise.", "For Further Information", "Frank Gottron, Specialist in Science and Technology Policy "], "subsections": []}, {"section_title": "Microbial Pathogens in the Laboratory: Safety and Security", "paragraphs": ["In addition to its general oversight of workplace safety, the federal government addresses the safety of laboratory personnel who work with infectious microorganisms through guidance such as Biosafety in Microbiological and Biomedical Laboratories (BMBL), published by the Department of Health and Human Services (HHS) Centers for Disease Control and Prevention (CDC) and National Institutes of Health (NIH). BMBL sets \"Biosafety Levels\" for work with the highest-risk pathogens. BMBL guidance is often adopted as a requirement; for example, compliance is required of federal grant recipients.", "Biosecurity requirements, to protect the public from intentional and unintentional releases of pathogens, were first mandated by Congress in 1996, and expanded through subsequent reauthorizations. The Federal Select Agent Program (FSAP), administered jointly by CDC and the U.S. Department of Agriculture (USDA) Animal and Plant Health Inspection Service (APHIS), oversees the possession of \"select agents,\" certain biological pathogens and toxins with the potential to cause serious harm to public, animal, or plant health. All U.S. laboratory facilities\u2014including those at government agencies, universities, research institutions, and commercial entities\u2014that possess, use, or transfer select agents must register with the program and adhere to specified best practices. All persons given access to select agents must undergo background investigations conducted by the Federal Bureau of Investigation (FBI).", "Several incidents involving the mishandling of select agents in federal laboratories have occurred in recent years. For example, samples of decades-old but viable smallpox virus were found in an FDA laboratory on an NIH campus. Laboratories at CDC, one of the select agent regulatory agencies, had incidents involving the anthrax agent, a virulent avian influenza virus, and Ebola virus. Each incident was attributed, at least in part, to lapses in protocol or some other form of human error. Several incident reports have recommended improvements in the \"culture of safety\" in laboratories, standardized microbial handling practices, and better incident reporting, among other measures. Additional entities, including the House Committee on Energy and Commerce, the Comptroller General, and the HHS Inspector General have also investigated these lapses and made similar recommendations.", "The FSAP is designed to ensure the secure handling of designated pathogens while allowing important research on these pathogens to proceed. The 2018 Farm Bill amended the authority to regulate animal and plant pathogens, requiring the Secretary of Agriculture, when determining which agents to list, to consider the potential effects of such listing on animal and plant disease research. The HHS Secretary is not required to make a similar consideration when determining the list of agents that may pose a threat to public health. The 116 th Congress may choose to continue FSAP program oversight, including through committee investigations, since program reports show that occupational exposures persist in regulated facilities. Congress may also review and revise the authorities for the public health and agriculture arms of the program. The authorizations of appropriations for each expired in 2007.\u00a0", "For Further Information", "Sarah A. Lister, Specialist in Public Health and Epidemiology"], "subsections": []}]}, {"section_title": "Information Technology", "paragraphs": ["The rapid pace of advancements in information technology presents several issues for congressional policymakers, including those related to cybersecurity, artificial intelligence, broadband deployment, access to broadband networks and net neutrality, public safety networks, emergency alerting, 5G networks, the Internet of Things, federal networking R&D, and quantum information science."], "subsections": [{"section_title": "Cybersecurity", "paragraphs": ["The federal policy framework for cybersecurity is complex, including more than 50 statutes as well as presidential directives and related authorities. ", "The 116 th Congress may face a number of significant issues related to cybersecurity, in addition to the oversight of enacted laws. Among those issues are the following:", "Cybersecurity for critical infrastructure , given that most of the nation's critical infrastructure is not owned by the federal government and regulatory cybersecurity requirements vary substantially among the sectors; Prevention of and response to cybercrime , especially given its substantially international character; The relationship between cyberspace and national security , including information operations aimed at election infrastructure and political campaigns; and Federal R&D and other investments to protect information systems and networks. ", "In addition to such short- and medium-term issues, Congress may consider responses to a number of long-term challenges, including the following:", "Design\u2014 the degree to which information systems can be designed with security built in, in the face of economic obstacles and the other challenges; Incentives\u2014 ways to correct an economic incentive structure for cybersecurity that has often been called distorted or even perverse, with cybercrime widely regarded as cheap, profitable, and comparatively safe for the criminals, while cybersecurity is often considered expensive and imperfect, with uncertain economic returns; Consensus\u2014 finding consensus on a consistent and effective model for approaching cybersecurity, given stakeholders from different sectors and different work subcultures with varying needs, goals, and perspectives ; and Environment\u2014 a rapidly evolving cyberspace environment that both complicates the threat environment and may pose opportunities for shaping the direction of that evolution toward greater security, including, for example, the growth and influence of disruptive technologies (see \" Disruptive and Convergent Technology \").", "For Further Information", "Eric A. Fischer, Senior Specialist in Science and Technology ", "Chris Jaikaran, Analyst in Cybersecurity Policy", "CRS In Focus IF10559, Cybersecurity: An Introduction , by Chris Jaikaran ", "CRS Report R45127, Cybersecurity: Selected Issues for the 115th Congress , coordinated by Chris Jaikaran", "CRS Report R45142, Information Warfare: Issues for Congress , by Catherine A. Theohary ", "CRS In Focus IF10602, Cybersecurity: Federal Agency Roles , by Eric A. Fischer ", "CRS In Focus IF10677, The Designation of Election Systems as Critical Infrastructure , by Eric A. Fischer ", "CRS Report R44923, FY2018 National Defense Authorization Act: Selected Military Personnel Issues , by Kristy N. Kamarck, Lawrence Kapp, and Barbara Salazar Torreon"], "subsections": []}, {"section_title": "Artificial Intelligence", "paragraphs": ["The rapid development and growing use of artificial intelligence (AI) technologies has been of increasing interest to policymakers. Congressional activities on AI in the 115 th Congress included multiple committee hearings in both the House of Representatives and the Senate, the introduction of numerous AI-focused bills, the passage of AI provisions in legislation, and a variety of congressional briefings. Activity related to AI may continue in the 116 th Congress. ", "Generally, AI is considered to be computerized systems that work and react in ways commonly thought to require intelligence, encompassing many methodologies and applications. Common examples include machine learning, computer vision, natural language processing, and applications in such areas as robotics and autonomous vehicles. In addition to transportation, AI is already being employed across a variety of sectors, including health care, agriculture, manufacturing, and finance. Current AI technologies fall into a category called \"narrow AI,\" meaning that they are highly tailored to particular tasks. In contrast, potential future AI systems that exhibit adaptable intelligence across a range of cognitive tasks, often referred to as \"general AI,\" are unlikely to be developed for at least decades, if ever, according to most researchers. ", "Potential policy considerations for AI span cross-sector and sector-specific topics, in both the defense and nondefense spaces. For example, broad concerns have focused on workforce impacts from the implementation of AI and AI-driven automation, including potential job losses and the need for worker retraining; the balance of federal and private sector funding for AI; international competition in AI research and development (R&D) and deployment, particularly with China and Russia; the development of standards and testing for AI systems; the need for and effectiveness of federal coordination efforts in AI; and incorporation of privacy, security, transparency, and accountability considerations in AI systems. Particular considerations for AI in the defense space have included the balance of human and automated decisionmaking in military operations; how the Department of Defense engages with the private sector for defense adaptation of commercially developed AI systems and access to AI expertise; and private sector concerns about the use of AI R&D in combat situations.", "For Further Information", "Laurie A. Harris, Analyst in Science and Technology Policy ", "CRS In Focus IF10608, Overview of Artificial Intelligence , by Laurie A. Harris", "CRS In Focus IF10937, Artificial Intelligence (AI) and Education , by Joyce J. Lu and Laurie A. Harris", "CRS Report R45392, U.S. Ground Forces Robotics and Autonomous Systems (RAS) and Artificial Intelligence (AI): Considerations for Congress , coordinated by Andrew Feickert"], "subsections": []}, {"section_title": "Broadband Deployment", "paragraphs": ["Broadband\u2014whether delivered via fiber, cable modem, copper wire, satellite, or wirelessly\u2014is increasingly the technology underlying telecommunications services such as voice, video, and data. Since the initial deployment of broadband in the late 1990s, Congress has viewed broadband infrastructure deployment as a means towards improving regional economic development, and in the long term, to create jobs. According to the Federal Communications Commission's (FCC's) National Broadband Plan, the lack of adequate broadband availability is most pressing in rural America, where the costs of serving large geographical areas, coupled with low population densities, often reduce economic incentives for telecommunications providers to invest in and maintain broadband infrastructure and service. Broadband adoption also continues to be a problem, with a significant number of Americans having broadband available, but not subscribing. Populations lagging behind in broadband adoption include people with low incomes, seniors, minorities, the less-educated, nonfamily households, and the nonemployed.", "The 116 th Congress may face a range of broadband-related issues. These may include the continued transition of the telephone-era Universal Service Fund from a voice to a broadband-based focus, funding for broadband programs in the Rural Utilities Service, infrastructure legislation that may include funding and incentives for broadband buildout, the adequacy of broadband deployment data and mapping, the development of new wireless spectrum policies, and to what extent, if any, regulation is necessary to ensure an open internet. Additionally, the 116 th Congress may choose to examine the existing regulatory structure and consider possible revision of the 1996 Telecommunications Act and its underlying statute, the Communications Act of 1934. Both the convergence of telecommunications providers and markets and the transition to an Internet Protocol (IP) based network have, according to a growing number of policymakers, made it necessary to consider revising the current regulatory framework. How a possible revision might create additional incentives for investment in, deployment of, and subscribership to, our broadband infrastructure is likely to be just one of many issues under consideration.", "To the extent that Congress may consider various options for further enhancing broadband deployment, a key issue is how to develop and implement federal policies intended to increase the nation's broadband availability and adoption, while at the same time minimizing any deleterious effects that government intervention in the marketplace may have on competition and private sector investment. ", "For Further Information", "Lennard G. Kruger, Specialist in Science and Technology Policy ", "Angele A. Gilroy, Specialist in Telecommunications Policy ", "CRS Report RL30719, Broadband Internet Access and the Digital Divide: Federal Assistance Programs , by Lennard G. Kruger and Angele A. Gilroy", "CRS Report RL33816, Broadband Loan and Grant Programs in the USDA's Rural Utilities Service , by Lennard G. Kruger"], "subsections": []}, {"section_title": "Access to Broadband Networks and the Net Neutrality Debate", "paragraphs": ["Determining the appropriate framework to ensure an open internet is central to the debate over broadband access. A focal point in the policy debate centers on what, if any, steps are necessary to ensure unfettered internet access to content, services, and applications providers, as well as consumers.", "The move to place restrictions on the owners of the networks that compose and provide access to the internet, to ensure equal access and nondiscriminatory treatment, is referred to as \"net neutrality.\" While there is no single accepted definition of \"net neutrality,\" most agree that any such definition should include the general principles that owners of the networks that compose and provide access to the internet (i.e., broadband access providers) should not control how consumers lawfully use that network, and should not be able to discriminate against content provider access to that network. ", "Some policymakers contend that more specific regulatory guidelines are necessary to protect the marketplace from potential abuses which could threaten the net neutrality concept. Others contend that existing laws and policies are sufficient to deal with potential anti-competitive behavior and that additional regulations would have negative effects on the expansion and future development of the internet.", "Broadband regulation and the Federal Communications Commission's (FCC's) authority to implement such regulations is an issue of growing importance in the wide ranging policy debate over broadband access. What, if any, action should be taken to ensure net neutrality is part of the overall discussion. The FCC, in 2015, adopted rules (2015 Order) that established a comprehensive regulatory framework to address the regulation of broadband internet access providers. The 2015 Order contained among its provisions those that reclassified such services as a telecommunications service and established conduct rules for providers. However, the FCC, in December 2017, adopted new rules (2017 Order) that largely reverse the 2015 regulatory framework and shift much of the oversight from the FCC to the Federal Trade Commission and the Department of Justice. The FCC's move to adopt the 2017 Order has reopened the debate over what the appropriate framework is to ensure an open internet and whether Congress should enact legislation to establish this framework.", "A consensus on what that framework should entail remains elusive. Some Members of Congress support the less regulatory approach contained in the 2017 Order, which, they argue, will stimulate broadband investment, deployment, and innovation. Others support the regulatory framework adopted in the 2015 Order, which provides for a more stringent regulatory framework, and is needed, they state, to protect content, services, and applications providers, as well as consumers, from potential discriminatory behaviors which conflict with net neutrality principles. Still others, while supporting a framework containing specific behavioral rules to address potential anticompetitive practices, do not support the telecommunications services classification. Whether Congress will take action to amend existing law to provide guidance and more stability to FCC authority remains to be seen.", "For Further Information", "Angele A. Gilroy, Specialist in Telecommunications Policy", "CRS In Focus IF10955, Access to Broadband Networks: Net Neutrality , by Angele A. Gilroy ", "CRS Report R40616, The Net Neutrality Debate: Access to Broadband Networks , by Angele A. Gilroy"], "subsections": []}, {"section_title": "Deployment of the FirstNet Network", "paragraphs": ["The Middle Class Tax Relief and Job Creation Act of 2012 ( P.L. 112-96 ) authorized the Federal Communications Commission (FCC) to allocate spectrum to public safety use. The act also created the First Responder Network Authority (FirstNet), authorized FirstNet to establish a new, nationwide broadband network for public safety, and provided $7 billion in funding for the project. The network is intended to address the communication problems first responders experienced during September 11, 2001, whereby public safety systems were not interoperable, and responders could not communicate or coordinate an effective response. ", "Congress authorized FirstNet to enter into a public-private partnership to deploy the network. In March 2017, FirstNet selected AT&T, through a competitive bidding process, as its partner. AT&T has been deploying the network as specified in its agreement with FirstNet and state-specific plans, and public safety agencies are subscribing to FirstNet. ", "A concern for policymakers is that the FirstNet/AT&T contract and state plans contain detailed information on deployment; however both are deemed proprietary and not available for public review. Without details on how the network is being deployed in each state, and how federal resources are being used, it may be difficult for Congress to ensure the requirements of the law are being met. Given the federal investment in the project ($6.5 billion and 20 MHz of valuable broadband spectrum), and the importance of the FirstNet network to the life of safety of first responders and citizens, the 116 th Congress may consider continuing its oversight of this project.", "For Further Information", "Jill Gallagher, Analyst in Telecommunications Policy", "CRS Report R45179, The First Responder Network (FirstNet) and Next-Generation Communications for Public Safety: Issues for Congress , by Jill C. Gallagher "], "subsections": []}, {"section_title": "Emergency Alerting", "paragraphs": ["Local officials are responsible for issuing emergency alerts. Some localities use commercial alerting systems to send electronic alerts (e.g., cell phone alerts, email alerts). Others rely on the federal alerting system\u2014the Integrated Public Alert and Warning System (IPAWS), which allows local officials to send alerts across many media outlets (e.g., cell phone, television, radio). Many localities use both systems to ensure alerts are received. ", "The false alert of an incoming ballistic missile to Hawaii on January 13, 2018, raised questions about alerting roles and responsibilities. While the national alerting system\u2014IPAWS\u2014worked as intended, the roles and responsibilities for issuing alerts of incoming missiles was debated in Congress. ", "The 2017 and 2018 wildfires in California raised additional alerting issues. Several counties in California used a commercial alerting system that reached only those residents who signed up for the service (whereas IPAWS would have sent an alert to all devices in the affected area). Local officials were concerned that cell phone alerts issued through IPAWS could not be narrowly targeted, and would result in over-alerting, mass evacuation, and overcrowding on evacuation routes, which could put people and first responders in danger.", "In January 2018, the Federal Communications Commission adopted rules requiring carriers to improve geo-targeting of wireless emergency alerts (WEA)\u2014alerts to cell phones issued through IPAWS. Carriers must comply with these rules by November 30, 2019. ", "The 116 th Congress may examine roles and responsibilities for issuing different alerts, and consider policies that clarify alerting procedures. Congress may also consider investments in activities (e.g., best practices) to improve local alerting capabilities, and programs that educate individuals on the appropriate response to alerts. Lastly, Congress may examine state and local back-up alerting capabilities in the event communication systems fail, and wireless alerts cannot be delivered.", "For Further Information", "Jill Gallagher, Analyst in Telecommunications Policy", "CRS In Focus IF10816, Emergency Alerting\u2014False Alarm in Hawaii , by Jill C. Gallagher"], "subsections": []}, {"section_title": "5G Technologies", "paragraphs": ["As more people are using more data on more devices, demand for mobile data is rising. Current telecommunication networks cannot always meet consumer demands for data. Telecommunication companies are continually deploying new technologies to offer better coverage, faster speeds, more data, and new services to customers. ", "The newest technologies are called fifth-generation (5G) technologies, as they succeed 2G, 3G, and 4G systems. 5G technologies offer vastly improved speeds and greater bandwidth to meet demands for mobile data. 5G technologies enable providers to expand services to consumers (e.g., video streaming, virtual reality applications) and support new systems for industrial users (e.g., medical monitoring, industrial control systems). When fully deployed, 5G is expected to power the Internet of Things\u2014systems of interconnected devices (e.g., smart homes), and emerging technologies (e.g., autonomous vehicles). ", "5G is expected to drive the development of new technologies, support new uses by consumers and industry, and create new markets, new revenues, and new jobs. Since companies that are first to market with new technologies often capture the bulk of the new revenues, companies around the world are racing to develop and deploy 5G technologies. Recognizing the potential for economic gain, countries (i.e., central governments) are supporting the development and deployment of 5G technologies. In the United States, the federal government has allocated spectrum for 5G and streamlined cell siting regulations to speed deployment. ", "The 116 th Congress may continue to monitor U.S. competitiveness in the global 5G market, and consider policies (e.g., spectrum allocation policies) and programs that could expedite 5G deployment. In developing 5G policies, Congress may consider concerns of some local governments and individuals related to 5G deployment, including local authority over 5G cell sites, deployment of 5G to rural areas, and privacy and security of data transmitted over 5G devices and systems. ", "For Further Information", "Jill Gallagher, Analyst in Telecommunications Policy"], "subsections": []}, {"section_title": "The Internet of Things", "paragraphs": ["The Internet of Things (IoT) may continue to be a focal point of far-reaching debates during the 116 th Congress. The term refers to networks of objects with two features\u2014a unique identifier and internet connectivity. Such \"smart\" objects can form systems that communicate among themselves, usually in concert with computers, allowing automated and remote control of many independent processes and potentially transforming them into integrated systems. Such objects may include vehicles, appliances, medical devices, electric grids, transportation infrastructure, manufacturing equipment, building systems, and so forth. The IoT is increasingly impacting homes and communities, factories and cities, and nearly every sector of the economy, both domestically and globally, among them agriculture (precision farming), health (medical devices), and transportation (self-driving automobiles and unmanned aerial vehicles).", "An increasing number of these systems require access to radio frequency spectrum in order to connect to the internet or other networks. The development of 5G wireless technologies is likely to develop in tandem with the IoT, potentially expanding substantially the opportunities for growth in use of IoT devices.", "Although the full extent and nature of impacts of the IoT remain uncertain, some economic analyses predict that it will contribute trillions of dollars to economic growth over the next decade. The IoT, for example, may be able to facilitate more integrated and functional infrastructure, especially in \"smart cities,\" through improvements in transportation, utilities, and other municipal services. Sectors that may be particularly affected are agriculture, energy, government, health care, manufacturing, and transportation.", "The federal government may play an important role in enabling the development and deployment of the IoT, including R&D, standards, regulation, and support for testbeds and demonstration projects. No single federal agency has overall responsibility for the IoT. Various agencies have relevant regulatory, sector-specific, and other mission-related responsibilities, such as the Departments of Commerce, Health, Energy, Transportation, and Defense, the National Science Foundation, the Federal Communications Commission, and the Federal Trade Commission. ", "The range of issues that might be the subject of congressional activity includes the following:", "security of objects and the systems and networks to which they are connected, given especially that many IoT devices are operational technology, the compromise of which can have physical impacts (see also \" Cybersecurity \"); privacy of the information gathered and transmitted by objects; standards for the IoT, especially with respect to connectivity; transition to a new Internet Protocol (IPv6) that can handle the anticipated exponential increase in the number of IP addresses required by the IoT, along with the growth of 5G wireless; methods for updating the software used by IoT objects in response to security and other needs; energy management for IoT objects, especially those not connected to the electric grid; and the role of the federal government in development and deployment, standards, regulation, and communications, including the impact of federal rules regarding \"net neutrality.\"", "The Internet of Things represents more than devices connected through networks, and more than internet or radio frequency spectrum policy. Its growth will likely require significant changes in\u2014and coordination among\u2014many government departments and agencies.", "For Further Information", "Eric A. Fischer, Senior Specialist in Science and Technology ", "CRS Report R44227, The Internet of Things: Frequently Asked Questions , by Eric A. Fischer"], "subsections": []}, {"section_title": "Digital Services Tax", "paragraphs": ["The rise of e-commerce, social media, and big data analytics have allowed new business models to emerge as part of the \"digital economy.\" In the realm of international tax policy, though, certain types of activities and markets in the digital economy have been singled out for \"digital services taxes\" (DSTs) by some jurisdictions\u2014primarily in Europe. For example, Spain is set to implement a DST of 3% on the gross revenue derived from certain digital services (e.g., online advertising, online marketplaces, and user data tracking services) derived from users within Spain beginning in 2019. Similarly, the United Kingdom (UK) intends to implement a 2% DST on revenues from social media platforms, online marketplaces, and search engines derived from UK user activity in 2020. Both DSTs have minimum thresholds based on global total revenue and revenue from covered business activities to local users that effectively target the largest global digital economy companies. The EU is also actively considering a digital tax across all member states. ", "This issue may be of interest to Congress because the taxes appear to primarily target U.S. corporations, such as Facebook, Google, and Amazon. As such, there is opposition to unilateral efforts by foreign countries to tax the digital economy. DSTs also raise potential issues for U.S. foreign tax credit treatment under bilateral tax treaties, which are considered and ratified by the Senate. Additionally, some Members of Congress may support one of the purported justifications for DSTs (a perceived \"unfairness\" arising from the relatively low rate of tax paid by some firms in the digital economy), but would prefer alternative remedies to raise taxes or reduce tax preferences on these corporations. For example, the 2017 tax revision ( P.L. 115-97 ) enacted a new tax on global intangible low-taxed income (\"GILTI\"), which is designed to be a minimum tax on foreign-source income earned from intangible assets (e.g., patents, trade secrets). In the 115 th Congress, the \"No Tax Break for Outsourcing Act\" (H.R. 5108; S. 2459 ) would have increased the GILTI tax rate to 21% (the same as the top statutory corporate income tax rate), among other changes.", "For Further Information", "Sean Lowry, Analyst in Public Finance", "CRS Report R45186, Issues in International Corporate Taxation: The 2017 Revision (P.L. 115-97) , by Jane G. Gravelle and Donald J. Marples "], "subsections": []}, {"section_title": "Evolving Technology and Law Enforcement Investigations", "paragraphs": ["Changing technology presents opportunities and challenges for U.S. law enforcement. Some technological advances (e.g., social media) have arguably provided a wealth of information for investigators and analysts. Others have presented unique hurdles. While some feel that law enforcement now has more information available to them than ever before, others contend that law enforcement is \"going dark\" as some of their investigative capabilities are outpaced by the speed of technological change. These hurdles for law enforcement include strong, end-to-end (or what law enforcement has sometimes called \"warrant-proof\") encryption; provider limits on data retention; bounds on companies' technological capabilities to provide specific data points to law enforcement; tools facilitating anonymity online; and a landscape of mixed wireless, cellular, and other networks through which individuals and information are constantly passing. As such, law enforcement may have trouble accessing certain information they otherwise may be authorized to obtain.", "The tension between law enforcement capabilities and technological change\u2014including sometimes competing pressures for technology companies to provide data to law enforcement as well as to secure customer privacy\u2014has received congressional attention for several decades. For instance, in the 1990s the \"crypto wars\" pitted the government against technology companies, and this strain was underscored by proposals to build in vulnerabilities, or \"back doors,\" to certain encrypted communications devices as well as to restrict the export of strong encryption code. In addition, Congress passed the Communications Assistance for Law Enforcement Act (CALEA; P.L. 103-414 ) in 1994 to help law enforcement maintain their ability to execute authorized electronic surveillance as telecommunications providers turned to digital and wireless technology. More recently, there have been questions about whether CALEA should be amended to apply to a broader range of entities that provide communications services.", "The \"going dark\" debate originally focused on data in motion, or law enforcement's ability to intercept real-time communications. However, more recent technology changes have impacted law enforcement's capacity to access not only communications but stored content, or data at rest. Some officials have urged the technology community to develop a means to assist law enforcement in accessing certain data. At the same time, law enforcement entities have taken steps to bolster their technology capabilities. In addition, policymakers have been evaluating whether legislation may be an appropriate response to current law enforcement concerns involving access to communications and data.", "For Further Information", "Kristin Finklea, Specialist in Domestic Security", "CRS Report R44481, Encryption and the \"Going Dark\" Debate , by Kristin Finklea ", "CRS Report R44827, Law Enforcement Using and Disclosing Technology Vulnerabilities , by Kristin Finklea"], "subsections": []}, {"section_title": "The Networking and Information Technology Research and Development Program", "paragraphs": ["The Networking and Information Technology Research and Development (NITRD) Program is the United States' primary source of federally-funded information technology (IT) research and development in the fields of computing, networking, and software. The program evolved from the High-Performance Computing and Communications (HPCC) Program, which originated with the HPCC Program Act of 1991 ( P.L. 102-194 ); it coordinates the activities of multiple agencies conducting multi-disciplinary, multi-technology, and multi-sector R&D needs. The 21 NITRD member agencies invest approximately $5 billion annually in basic and applied R&D programs.", "Proponents of federal support of IT R&D assert that it has produced positive outcomes for the country and played a crucial role in supporting long-term research into fundamental aspects of computing. Such fundamentals may provide broad practical benefits, but generally take years to realize. Additionally, the unanticipated results of research are often as important as the anticipated results. Another aspect of government-funded IT research is that it often leads to open standards, something that many perceive as beneficial, encouraging deployment and further investment. Industry, on the other hand, is more inclined to invest in proprietary products and will diverge from a common standard when there is a potential competitive or financial advantage to do so. Supporters believe that the outcomes achieved through the various funding programs create a synergistic environment in which both fundamental and application-driven research are conducted, benefitting government, industry, academia, and the public. Critics, however, assert that the government, through its funding mechanisms, may be picking \"winners and losers\" in technological development, a role more properly residing with the market. For example, the size of the NITRD Program could encourage industry to follow the government's lead on research directions rather than selecting those directions itself.", "The NITRD Program is funded through appropriations to its individual agencies; therefore, it will be part of the continuing federal budget debate in the 116 th Congress.", "For Further Information", "Patricia Moloney Figliola, Specialist in Internet and Telecommunications Policy ", "CRS Report RL33586, The Federal Networking and Information Technology Research and Development Program: Background, Funding, and Activities , by Patricia Moloney Figliola "], "subsections": []}, {"section_title": "Quantum Information Science", "paragraphs": ["Quantum information science (QIS), which combines elements of mathematics, computer science, engineering, and physical sciences, has the potential to provide capabilities far beyond what is possible with the most advanced technologies available today. Although much of the press coverage of QIS has been devoted to quantum computing, there is more to QIS. Many experts divide QIS technologies into three application areas: sensing and metrology, communications, and computing and simulation.", "The government's interest in QIS dates back at least to the mid-1990s, when the National Institute of Standards and Technology and the DOD held their first QIS workshops. QIS is first mentioned in the FY2008 budget of what is now the Networking and Information Technology Research and Development Program and has been a component of the program since then. Today, QIS is a component of the National Strategic Computing Initiative (Executive Order 13702), which was established in 2015. More recently, in September 2018, the National Science and Technology Council (NSTC) issued the National Strategic Overview for Quantum Information Science. The policy opportunities identified in this strategic overview include\u2014", "choosing a science-first approach to QIS, creating a \"quantum-smart\" workforce, deepening engagement with the quantum industry, providing critical infrastructure, maintaining national security and economic growth, and advancing international cooperation.", "The United States is not alone in its increasing investment in QIS R&D. QIS research is also being pursued at major research centers worldwide, with China and the European Union having the largest foreign QIS programs. Further, even without explicit QIS initiatives, many other countries, including Russia, Germany, and Austria, are making strides in QIS R&D. ", "In a July 2016 report, the NSTC stated that creating a cohesive and effective U.S. QIS R&D policy would require a collaborative effort in five policy areas: institutional boundaries; education and workforce training; technology and knowledge transfer; materials and fabrication; and the level and stability of funding. These areas continue to be salient in 2019 and may provide context for developing legislation in the 116 th Congress. ", "For Further Information", "Patricia Moloney Figliola, Specialist in Internet and Telecommunications Policy ", "CRS Report R45409, Quantum Information Science: Applications, Global Research and Development, and Policy Considerations , by Patricia Moloney Figliola "], "subsections": []}]}, {"section_title": "Physical and Material Sciences", "paragraphs": ["Some of the policy issues in the physical and material sciences that the 116 th Congress may address include funding and oversight of the National Science Foundation and the multiagency initiative supporting research and development in the emerging field of nanotechnology. "], "subsections": [{"section_title": "National Science Foundation", "paragraphs": ["The National Science Foundation supports basic research and education in the nonmedical sciences and engineering and is a primary source of federal support for U.S. university research. It is also responsible for the primary share of the federal STEM education effort, both by number of programs and total investment. Enacted funding for NSF in FY2018 was $7.77 billion.", "Congress has a long-standing interest in NSF's funding levels and the prioritization and direction of such funding. At various points in NSF's history, some policymakers have pursued a policy of authorizing large increases in the NSF budget over a defined period of time (e.g., a 100% increase over seven years, sometimes referred to as a \"doubling path policy\"). Actual appropriations have rarely reached authorized levels, however, and growth in NSF's budget has slowed in recent years. Advocates of large funding increases assert that steep and fast increases in NSF funding are necessary to ensure U.S. competitiveness. Other analysts argue that steady, reliable funding increases over longer periods of time would be less disruptive to the U.S. scientific and technological enterprise. Alternatively, some policymakers seek no additional increases in NSF funding in light of the federal deficit and spending caps. Additionally, some policymakers prefer to direct federal funding to research with a more applied or mission-oriented focus than that which is typically funded at NSF. ", "In terms of congressional direction of funding, analysts and legislators have periodically debated questions about prioritizing NSF funding for the physical sciences and engineering over funding for the social, behavioral, and economic sciences, as well as expanding support for multidisciplinary funding.", "Policy issues that the 116 th Congress may continue to address include ", "the selection, funding, and management of large-scale construction projects, scientific instruments, and facilities, including the use of management fees; increased support for mid-scale research infrastructure; research reproducibility and replicability; and the effectiveness and costs of NSF's use of nonfederal personnel\u2014through the Intergovernmental Personnel Act program\u2014often called \"rotators.\" ", "Other lasting federal policy issues for the NSF focus on the balance between scientific independence and accountability to taxpayers; the geographic distribution of grants; NSF's role in broadening participation in STEM fields; support for various STEM education programs; and the production of data about the U.S. scientific and technological enterprise. ", "For Further Information", "Laurie A. Harris, Analyst in Science and Technology Policy", "CRS Report R45009, The National Science Foundation: FY2018 Appropriations and Funding History , by Laurie A. Harris"], "subsections": []}, {"section_title": "Nanotechnology and the National Nanotechnology Initiative", "paragraphs": ["Nanoscale science, engineering, and technology\u2014commonly referred to collectively as nanotechnology\u2014is believed by many to offer extraordinary economic and societal benefits. Nanotechnology R&D is directed toward the understanding and control of matter at dimensions of roughly 1 to 100 nanometers (a nanometer is one-billionth of a meter). At this size, the properties of matter can differ in fundamental and potentially useful ways from the properties of individual atoms and molecules and of bulk matter. ", "Many current applications of nanotechnology are evolutionary in nature, offering incremental improvements in existing products and generally modest economic and societal benefits. For example, nanotechnology is being used in automobile bumpers, cargo beds, and step-assists to reduce weight, increase resistance to dents and scratches, and eliminate rust; in clothes to increase stain- and wrinkle-resistance; and in sporting goods to improve performance. Other nanotechnology innovations play a central role in current applications with substantial economic value. For example, nanotechnology is a fundamental enabling technology in nearly all semiconductors and is key to improvements in chip speed, size, weight, and energy use. Similarly, nanotechnology has substantially increased the storage density of nonvolatile flash memory and computer hard drives. In the longer term, some believe that nanotechnology may deliver revolutionary advances with profound economic and societal implications, such as detection and treatment of cancer and other diseases; clean, inexpensive, renewable power through energy transformation, storage, and transmission technologies; affordable, scalable, and portable water filtration systems; self-healing materials; and high-density memory devices. ", "The development of this emerging field has been fostered by sustained public investments in nanotechnology R&D. In 2001, President Clinton launched the multi-agency National Nanotechnology Initiative (NNI) to accelerate and focus nanotechnology R&D to achieve scientific breakthroughs and to enable the development of new materials, tools, and products. More than 60 nations subsequently established programs similar to the NNI.", "Cumulatively through FY2018, Congress appropriated approximately $24.0 billion for nanotechnology R&D; for FY2019, President Trump requested $1.4 billion in funding. In 2003, Congress enacted the 21 st Century Nanotechnology Research and Development Act ( P.L. 108-153 ), providing a legislative foundation for some of the activities of the NNI, establishing programs, assigning agency responsibilities, and setting authorization levels through FY2008. Legislation was introduced in the 114 th and 115 th Congress to amend and reauthorize the act though none has been enacted into law. The 116 th Congress may continue to direct its attention primarily to three topics that may affect the realization of nanotechnology's hoped-for potential: R&D funding; U.S. competitiveness; and environmental, health, and safety concerns. ", "For Further Information", "John F. Sargent Jr., Specialist in Science and Technology Policy ", "CRS Report RL34511, Nanotechnology: A Policy Primer , by John F. Sargent Jr.", "CRS Report RL34401, The National Nanotechnology Initiative: Overview, Reauthorization, and Appropriations Issues , by John F. Sargent Jr.", "CRS Report RL34614, Nanotechnology and Environmental, Health, and Safety: Issues for Consideration , by John F. Sargent Jr."], "subsections": []}]}, {"section_title": "Space", "paragraphs": ["Congress has historically had a strong interest in space policy issues. Space topics that may come before the 116 th Congress include the funding and oversight of the National Aeronautics and Space Administration (NASA) and issues related to the commercialization of space and to Earth-observing satellites."], "subsections": [{"section_title": "NASA", "paragraphs": ["Spaceflight has attracted strong congressional interest since the establishment of NASA in 1958. Issues include the goals and strategy of NASA's human spaceflight program, the impact of constrained budgets on NASA's other missions, and the future of NASA's Earth Science program. The 116 th Congress may address these and other issues through NASA reauthorization legislation. ", "With the end of the space shuttle program in July 2011, the United States lost the capability to launch astronauts into space. Since that time, NASA has relied on Russian spacecraft for crew transport to the International Space Station (ISS). For ISS cargo transport, NASA-contracted U.S. commercial flights have been delivering payloads of supplies and equipment since October 2012.", "As directed by the NASA Authorization Act of 2010 ( P.L. 111-267 ), NASA is pursuing a two-track strategy for human spaceflight. First, for transport to low Earth orbit, including the ISS, NASA is supporting commercial development of a crew transport capability like the commercial cargo capability achieved in 2012. Commercial crew transportation services are expected to become operational in late 2019 or 2020.", "Second, for human exploration beyond Earth orbit, NASA is developing a new crew capsule called Orion and a new heavy-lift rocket called the Space Launch System (SLS). The first crewed test flight of Orion and the SLS is scheduled for 2023. Most details of the subsequent exploration missions of Orion and the SLS remain to be determined. In February 2018, NASA announced plans for a Lunar Orbital Platform\u2013Gateway (LOP-G) in lunar orbit, to be accessed via Orion and the SLS, that would serve as a platform for deep-space human exploration.", "Rapid developments in the commercial space sector may change the relationship between NASA and industry. For example, SpaceX has announced plans for commercial flights carrying passengers around the Moon and back as well as, in the longer term, to Mars. Some observers see this sort of development as potentially competing with NASA's human spaceflight plans. More broadly, the emergence of new commercial capabilities in space may present NASA with new opportunities for public-private partnerships or may shift its R&D priorities. For example, NASA has announced plans to end direct funding for the International Space Station by 2025, instead relying on a combination of public-private partnerships and commercial service contracts.", "The 2010 authorization act authorized funding increases for NASA that were not subsequently appropriated. In considering reauthorization, the 116 th Congress may examine whether reduced budget expectations require corresponding changes to planned programs. One common concern is that the cost of planned human spaceflight activities may mean less funding for other NASA missions, such as unmanned science satellites, aeronautics research, and space technology development.", "NASA's Earth Science program, in which climate research is a major focus, is of particular congressional interest. Some in Congress have argued that other NASA activities should have higher priority or that some or all of NASA's Earth Science responsibilities should be transferred to other agencies. Supporters counter that space-based Earth observations are an integral part of NASA's science mission.", "For Further Information", "Daniel Morgan, Specialist in Science and Technology Policy", "CRS Report R43419, NASA Appropriations and Authorizations: A Fact Sheet , by Daniel Morgan ", "CRS In Focus IF10828, The International Space Station (ISS) and the Administration's Proposal to End Direct NASA Funding by 2025 , by Daniel Morgan ", "CRS In Focus IF10940, The James Webb Space Telescope , by Daniel Morgan "], "subsections": []}, {"section_title": "Commercial Space", "paragraphs": ["Since the earliest days of spaceflight, U.S. companies have been involved as contractors to government agencies. Increasingly, though, space is becoming commercial. A majority of U.S. satellites are now commercially owned, providing commercial services, and launched by commercial launch providers. Congressional and public interest in space is also becoming more focused on commercial activities, such as companies developing reusable rockets or collecting business data with fleets of small Earth-imaging satellites.", "Some observers have identified a distinct \"new space\" sector of relatively new companies focused on private spaceflight at low cost. One factor driving this trend is NASA's reliance on commercial providers for access to the ISS, but \"new space\" companies are also focused on other markets. These include the launch of national security satellites for the Department of Defense, the launch of commercial satellites for U.S. and foreign companies, the provision of commercial services such as Earth imaging and satellite communications, and even space tourism.", "Multiple federal agencies regulate the commercial space industry, based on statutory authorities that were enacted separately and have evolved over time. The Federal Aviation Administration licenses commercial launch and reentry vehicles (i.e., rockets and spaceplanes) as well as commercial spaceports. The National Oceanic and Atmospheric Administration (NOAA) licenses commercial Earth remote sensing satellites. The Federal Communications Commission licenses commercial satellite communications. The Departments of Commerce and State license exports of space technology. The 115 th Congress considered, but did not enact, legislation to simplify and reform this regulatory framework. In addition, in May 2018, the Administration called for changes to the regulation of commercial space in Space Policy Directive\u20132, Streamlining Regulations on Commercial Use of Space . The 116 th Congress may continue this focus on regulatory reforms.", "How the federal government makes use of commercial space capabilities is also evolving. NASA used to own and operate the space shuttles that contractors built for it, but since 2012 it has contracted with commercial service providers to deliver cargo into orbit using their own spacecraft. DOD has its own satellite communications capabilities, but it also procures communications bandwidth from commercial satellite companies. Agencies are considering a host of new opportunities, including acquisition of weather data from commercial satellites, acquisition of science data from commercial lunar landers, and expanded commercial utilization of the ISS. The 116 th Congress may address these developments primarily through oversight of agency programs and decisions on agency budgets.", "For More Information", "Daniel Morgan, Specialist in Science and Technology Policy ", "CRS Report R45416, Commercial Space: Federal Regulation, Oversight, and Utilization , by Daniel Morgan ", "CRS Report R44708, Commercial Space Industry Launches a New Phase , by Bill Canis"], "subsections": []}, {"section_title": "Earth-Observing Satellites", "paragraphs": ["The constellation of Earth-observing satellites launched and operated by the U.S. government performs a wide range of observational and data collecting activities. These activities include measuring the change in mass of polar ice sheets, wind speeds over the oceans, land cover change, as well as the more familiar daily measurements of key atmospheric parameters that enable modern weather forecasts and storm prediction. Satellite observations of the Earth's oceans and land surface help with short-term seasonal forecasts of El Ni\u00f1o and La Ni\u00f1a conditions, which are valuable to U.S. agriculture and commodity interests; identification of the location and size of wildfires, which can assist firefighting crews and mitigation activities; as well as long-term observational data of the global climate, which are used in predictive models that help assess the degree and magnitude of current and future climate change. ", "Congress continues to be interested in the performance of NASA, NOAA, and the U.S. Geological Survey in building and operating U.S. Earth-observing satellites. Congress is particularly interested in the agencies meeting budgets and time schedules so that critical space-based observations are not missed due to delays and cost overruns. Concerns have been raised in the past by some in Congress about the possibility of a \"data gap\" in the polar-orbiting weather satellite coverage. The successful launch of the first Joint Polar Satellite System satellite JPSS-1 (now NOAA-20) on November 18, 2017, has alleviated those concerns for the near-term. Congress provided full funding, $776 million for the second polar-orbiting satellite, JPSS-2, in the FY2018 enacted appropriations. ", "On November 19, 2016, the Geostationary Operational Environmental Satellite-R (GOES-R) weather satellite launched and was placed into orbit. Renamed GOES-16, it is an advanced weather satellite with sensors that should help improve hurricane tracking and intensity forecasts, prediction and warning of severe weather events, and rainfall estimates that will lead to better flood warnings. GOES-16 also carries the first operational lightning mapper in geostationary orbit, and will better monitor space weather\u2014perturbations to the Earth's magnetic field caused by intense bursts of energy from the sun. On March 1, 2017, GOES-S successfully launched carrying the same suite of instruments as its predecessor. The satellite is in its final stage of calibration before transitioning to operation status in January 2019. Renamed GOES-17, the satellite experienced a problem with one of its key imaging instruments after launch, the Advanced Baseline Imager (ABI), which impairs its functionality. NASA has stated that despite the ABI problem, GOES-17 will provide more and better data than currently available. Both satellites represent the first two in a series of four Earth-orbiting weather satellites planned by NOAA through 2036. The 116 th Congress may continue to scrutinize budget and time schedules for polar-orbiting and geostationary satellites, as well as consider how the private sector could provide Earth-observing satellite data to supplement the current NASA NOAA, and USGS-operated satellite systems.", "For Further Information", "Peter Folger, Specialist in Energy and Natural Resources Policy", "CRS Report R44335, Minding the Data Gap: NOAA's Polar-Orbiting Weather Satellites and Strategies for Data Continuity , by Peter Folger "], "subsections": []}]}]}}
{"id": "R42580", "title": "Guatemala: Political and Socioeconomic Conditions and U.S. Relations", "released_date": "2019-03-20T00:00:00", "summary": ["Guatemala, the most populous Central American country, with a population of 16.3 million, has been consolidating its transition to democracy since the 1980s. Guatemala has a long history of internal conflict, including a 36-year civil war (1960-1996) during which the Guatemalan military held power and over 200,000 people were killed or disappeared. A democratic constitution was adopted in 1985, and a democratically elected government was inaugurated in 1986.", "President Jimmy Morales is being investigated for corruption and has survived three efforts to remove his immunity from prosecution. Morales took office in January 2016, having campaigned on an anticorruption platform. The previous president and vice president had resigned and been arrested after being implicated in a large-scale corruption scandal.", "In what many observers see as a step forward in Guatemala's democratic development, the Public Ministry's corruption and human rights abuse investigations in recent years have led to the arrest and trial of high-level government, judicial, and military officials. The Public Ministry is responsible for public prosecution and law enforcement, and works in conjunction with the United Nations-backed International Commission against Impunity in Guatemala (CICIG) to strengthen rule of law in Guatemala. As their anticorruption efforts prove effective, the circle of those feeling threatened by investigations broadens, and attacks against CICIG and the judicial system it supports broaden and intensify as well.", "Since Morales and some of his inner circle became the targets of investigations, he has ended CICIG's mandate, tried to terminate it early, and fired some of his more reformist officials. The Guatemalan Congress is moving legislation forward that would give amnesty to perpetrators of crimes against humanity, free some high-profile prisoners held for corruption, and limit the work of nongovernment organizations. Observers within Guatemala and abroad worry that Morales and the Congress are trying to protect themselves and others from corruption and other charges, and threatening the rule of law in doing so.", "Guatemala continues to face many other challenges, including insecurity, high rates of violence, and increasing rates of poverty and malnourishment. Guatemala remains a major transit country for cocaine and heroin trafficked from South America to the United States. Although Guatemala recorded record drug seizures in 2017, the lack of law enforcement and the collusion between corrupt officials and organized crime in many areas enable trafficking of illicit drugs, precursor chemicals, weapons, people, and other contraband. During Morales's first year, his administration improved tax collection, and the interior ministry reported a 5% drop in homicide rates. Morales has since fired many of the officials responsible for those advances and other reforms.", "Guatemala has the largest economy in Central America and in recent decades has had relatively stable economic growth. Despite that economic growth, Guatemala's economic inequality and poverty have increased, especially among the rural indigenous population. The Economist Intelligence Unit projects that the country's economic growth rate will likely peak in 2018-2019 at 3.2%, followed by a decrease until 2022. The World Bank calls for rapid economic growth coupled with increased public investment and pro-poor policies to improve social conditions.", "Traditionally, the United States and Guatemala have had close relations, with friction at times over human rights and civil/military issues. Guatemala and the United States have significant trade and are part of the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR). Top priorities for U.S. bilateral assistance to Guatemala include improving security, governance, and justice for citizens; improving economic growth and food security; providing access to health services; promoting better educational outcomes; and providing opportunities for out-of-school youth to reduce their desire to migrate. The U.S. Strategy for Engagement in Central America is meant to spur development and reduce illegal emigration to the United States. The Trump Administration has proposed substantially cutting funds for Guatemala, and eliminating traditional food aid and the Inter-American Foundation in its FY2018-FY2020 budget requests. Congress rejected much of those cuts in the reports to and language in the Consolidated Appropriations Acts of 2018 (P.L. 115-141), and 2019 (P.L. 116-6). Tensions between Guatemala and much of the international community have arisen over Guatemalan efforts to oust CICIG and to grant amnesty for human rights violations. The Trump Administration suspended military aid to Guatemala in March 2019 over its misuse of armored vehicles provided by the Department of Defense to combat drug trafficking.", "Bills introduced in the 116th Congress regarding Guatemala address immigration, order security, corruption and other governance issues, and include H.Res. 18, H.R. 1630, and S. 716."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Political Conditions", "paragraphs": ["President Jimmy Morales, then a relative political newcomer, ran in 2015 on a platform of governing transparently and continuing to root out corruption. He is now being investigated for corruption himself. During the election campaign, as mass protests calling for then-President P\u00e9rez Molina's resignation and an end to corruption and impunity grew, so did Morales's popular appeal. Morales framed his lack of political experience as an asset. His campaign slogan was \"Neither corrupt nor a thief.\" He won Guatemala's 2015 presidential election by a landslide with 67% of the vote. ", "Morales initially supported the International Commission against Impunity in Guatemala (CICIG), which Guatemala asked the United Nations (U.N.) to form in 2007 to help the government combat corruption, human rights violations, and other crimes. After he became a target of investigations, he said he would not renew their mandate, which ends in September 2019. The President tried to terminate CICIG early unilaterally. Many observers are concerned that Morales's efforts could undermine ongoing investigations by the Guatemalan attorney general's office and judicial proceedings, make political reform more difficult, and heighten instability in Guatemala. The Guatemalan Congress is also moving legislation that, if passed, would reverse progress made in holding government officials and others accountable for corruption and crimes against humanity.", "Guatemala faces many political and social challenges in addition to widespread corruption and impunity. Guatemala has some of the highest levels of violence, inequality, and poverty in the region, as well as the largest population. Indigenous people, about half of the population, experience higher rates of economic and social marginalization than nonindigenous citizens, and have for centuries. Almost half of the country's children are chronically malnourished. ", "Guatemala's homicide rate decreased to 26.1 per 100,000 in 2017, which nonetheless remains one of the highest rates in the region. Guatemala has a long history of internal conflict and violence, including a 36-year civil war (1960-1996). For most of that time, the Guatemalan military held power and violently repressed and violated the human rights of its citizens, especially its majority indigenous population. Reports estimate that more than 200,000 people were killed or disappeared during the conflict, with the state bearing responsibility for 93% of human rights violations. More than 83% of the victims were identified as Mayan. In 1986, Guatemala established a civilian democratic government, but military repression and human rights violations continued. Peace accords signed in 1996 ended the conflict. The United States maintained close relations with most Guatemalan governments, including the military governments, before, during, and after the civil war. ", "Since the late 1980s, Guatemala has sought to consolidate its transition from military and autocratic rule to a democracy. Democratically elected civilian governments have governed for over 30 years, but democratic institutions remain fragile due to high levels of corruption, impunity, drug trafficking, and inequitable distribution of resources. Although state institutions have investigated and arrested high-level officials, including a sitting president, for corruption, high levels of impunity in many cases continue due to intimidation of judicial officials, deliberate delays in judicial proceedings, and widespread corruption. ", "The Supreme Electoral Tribunal (TSE) investigated multiple political parties for violations of election campaign finance laws in 2014 and 2015, as part of its auditing process. As a result, the TSE dissolved two major parties, the Partido Patriota\u2014former President P\u00e9rez Molina's party\u2014and LIDER. These investigations are ongoing and may affect the 2019 elections.", "President Morales presented his General Government Policy for 2016-2020 in February 2016. The five pillars of this plan are zero tolerance for corruption, and modernization of the state; improvement in food security and nutrition; improvement in overall health and quality education; promotion of micro, small, and medium enterprises, and tourism and housing construction; and protection of the environment and natural resources.", "Halfway into his four-year term (2016-2020), however, Morales was being investigated for corruption and criticized for seemingly backing off his pledge of zero tolerance for corruption. In 2017, the president's brother and son were arrested on corruption charges. In August and September 2017, Guatemala's attorney general and CICIG announced they were seeking to lift the president's immunity from prosecution as they investigated alleged violations of campaign finance laws and bonuses paid to him by the military. Shortly thereafter, the president tried unsuccessfully to expel the head of CICIG, Commissioner Ivan Vel\u00e1squez. In 2018, his third year in office, he prevented Vel\u00e1squez from reentering the country. In January 2019 Morales tried unilaterally to terminate CICIG's mandate. The Constitutional Court ruled that he lacks the authority to do so. (See \" Efforts to Combat Impunity and Corruption ,\" below.) Various observers see Morales's moves against CICIG as part of an effort to impede anticorruption investigations against him, his relatives and associates. Morales will lose his immunity from prosecution when his term ends in January 2020. ", "A recent opinion poll found that more than 72% of the population has little or no trust in the police, and about 65% has little to no trust in the government. Conversely, 83% of the population said they supported CICIG and the Public Ministry\u2014which is headed by the attorney general\u2014making them Guatemala's most trusted institutions.", "So far, the judicial process, protests, and mass mobilizations in the wake of high-level government corruption scandals have remained peaceful. Nonetheless, tensions have heightened as President Morales's efforts to impede CICIG have escalated, and the Guatemalan Congress has tried to reduce criminal penalties for corruption and human rights violations. In January 2019, thousands of Guatemalans joined renewed public protests supporting CICIG and calling for the resignations of President Morales and members of Congress seen as protecting corrupt practices. (See \" Tension ,\" below.)", "Continued impunity, coupled with the state's failure to provide basic public services to large parts of the population and limited advances in reducing Guatemala's high poverty levels, could prolong tensions. Military-criminal enterprises and other powerful interests that have benefited from corruption and the status quo have fought against anticorruption and anti-impunity work since it began. They have threatened public prosecutors, the attorney general, and members of the judiciary. The promote legislation that would protect them from prosecution. Continued prosecution of corruption could provoke increasingly violent responses from those whose wealth or power are threatened. ", "Powerful interests also use more subtle methods to try to weaken CICIG, the Public Ministry, and groups pushing for political reform. These include tactics such as discrediting the reputations of officials, activists, and their organizations; delays or cuts in the judicial system's budget; spurious legal actions that delay trials and drain fiscal and human resources; and attempts to change CICIG's mandate or terms. A 2016 International Commission of Jurists report maintains that the Guatemalan state has responded passively to defamation campaigns and attacks on judicial independence. The report suggests that criminal allegations are fabricated against judges, community leaders, human rights defenders, and others to demobilize their anticorruption activities and silence them. Since mid-2017, those opposed to anticorruption efforts have escalated many of these tactics."], "subsections": [{"section_title": "2019 Elections", "paragraphs": ["Guatemala is scheduled to hold national elections for president, the entire 158-seat Congress, 340 mayors, and other local posts on June 16, 2019. President Morales will not be running for reelection, since the Guatemalan constitution limits presidents to one term. If no presidential candidate wins the first round with more than 50% of the vote, the top two candidates will compete in a second round on August 11. Only a few of Guatemala's 27 parties have named a presidential candidate so far; a final list is supposed to be published on March 17. As in the last elections, corruption is a major theme for voters this year. In response to public outcry over past illegal campaign financing and other electoral crimes, Guatemala adopted electoral law reforms in 2016. Eleven of the 27 parties face charges of illicit or unreported campaign financing, and several candidates face judicial proceedings. Registered candidates have immunity from prosecution.", "Former Attorney General Thelma Aldana (2014-2018) is the presidential candidate for the new Seed Movement party. Aldana has been internationally recognized for her anticorruption and judicial reform work. She, along with CICIG Commissioner Ivan Velasquez, was awarded the 2018 Right Livelihood Award, known as the \"Alternative Nobel Prize,\" for their \"innovative work in exposing abuse of power and prosecuting corruption, thus rebuilding people's trust in public institutions.\" The U.S. Departme nt of State awarded her its International Women of Courage Award in 2016. Aldana has reportedly said she is on the right wing politically, although more recently indicated that she would be interested in an \"inclusive platform that was open to people from the left and the right, to women, to immigrants, to young people, to indigenous people, to the private sector.\" The day that Aldana announced her candidacy, a Guatemalan judge ordered her arrest on charges including embezzlement. Aldana has denied wrongdoing, and said that many people in Guatemala are afraid of her continuing fight against corruption.", "Sandra Torres, a 2015 presidential candidate and former first lady, is again running for president with the National Unity of Hope (UNE) party. Public prosecutors sought to lift Torres's immunity as a presidential candidate on February 6, over $2.5 million in illicit campaign financing in 2015. Torres said, without offering evidence, that the request was a move to benefit Aldana's campaign. As mentioned above, the TSE has been investigating illegal campaign financing of the 2015 election process since 2014, and several parties have been dissolved as a result of illegal activities. ", "Zury Rios, whose father was the late Guatemalan military dictator Efrain Rios Montt, intends to run for president. Officials initially said she would not be allowed to run, and then a legal judgment ruled in her favor. ", "Some observers have expressed concern that President Morales's efforts to hinder CICIG before the elections could strengthen parties involved in corruption. CICIG helps Guatemalan institutions enforce campaign finance laws. Weakening these efforts could facilitate continued financing of politicians by drug cartels and other criminal organizations. "], "subsections": []}, {"section_title": "President Jimmy Morales's Administration", "paragraphs": ["President Morales's administration achieved a few significant reforms in the first year and a half. For example, the administration developed tax reform policies covering tax collection, the tax authority administration, and the customs office structure. Since Morales and some of his inner circle became the targets of investigations, however, he has tried to terminate CICIG and fired some of his more reformist Cabinet ministers and other officials who worked closely with CICIG and the attorney general's office, replacing them with closer allies. This has raised concerns both domestically and internationally that Morales is trying to protect himself and others from corruption charges and appears to be reversing reformist policies. ", "The tax administration (SAT), under the leadership of Juan Francisco Sol\u00f3rzano for the first two years of the Morales administration, used judicial measures and intervention to increase recovery of unpaid taxes and substantially increased tax collection. Sol\u00f3rzano, a former head of the criminal investigation unit at the attorney general's office, had the endorsement of CICIG as well as the Inter-American Development Bank, World Bank, and International Monetary Fund. Under his leadership, the SAT collected $297 million in recovered taxes in 2016 compared to $5 million in 2015. Following austerity measures in 2016 that limited government spending and decreased the deficit, the Guatemalan Congress passed an expansionary budget for 2017. This was possible in part because of increased state revenues from improved tax collection. Sol\u00f3rzano also played a key role in prominent anticorruption cases. President Morales fired Sol\u00f3rzano in January 2018.", "The interior ministry, which includes Guatemala's National Civil Police (PNC) force, oversaw a drop in the homicide rate from 27.3 homicides per 100,000 people in 2016 to 26.1 per 100,000 in 2017, the lowest rate in nine years. In February 2018, the Morales administration dismissed the three senior officials of the national police, saying it sought \"to generate more positive results to benefit citizen security and the fight against organized crime.\" A wide range of people, including human rights activists and business leaders, expressed concern at their dismissal. The country's Human Rights Ombudsman, Jord\u00e1n Rodas, said Guatemalans must be \"very alert\" to any movement that represents \"regression.\" A prominent trade association known by its acronym CACIF criticized the ouster, saying that outgoing police Director Nery Ramos had reduced crime. The U.S. Embassy in Guatemala congratulated Ramos just a few weeks before his dismissal for his team's work in reducing homicides by 10% compared to January 2017 and for the PNC's \"fight against corruption and to improve security throughout Guatemala.\"", "In response to the high level of violence over many years, a number of municipalities asked for military troops to augment their ineffective police forces; the Guatemalan government has been using a constitutional clause to have the army \"temporarily\" support the police in combating crime. Despite efforts to develop a comprehensive, whole-of-government approach to security, the previous five administrations' actions often have been reactive and dependent on the military. The Morales administration announced a two-phase plan to remove the military from citizen security operations by the end of 2017. The new plan includes shuffling military currently involved in citizen security efforts to the country's borders to control land routes used by traffickers and gangs. This would be a significant effort to comply with provisions of the 1996 peace accord calling on the army to focus solely on external threats. The interior minister who initiated the plan, Francisco Rivas, was fired by the president in January 2018. Morales said that the plan would continue, however, and military troops would be withdrawn from the streets by March 2018. ", "Morales's current Minister of the Interior, Enrique Degenhart Asturias, indicated a shift in priorities away from fighting corruption to fighting gangs. One of his first actions was to ask the Guatemalan Congress to designate criminal gangs as \"terrorist organizations.\" On August 30, 2018, the Constitutional Court ruled that the government must justify the appointment of Degenhart, and his Vice Minister, Kamilo Rivera, in response to a complaint that their actions had put the security of Guatemalans at risk. ", "Morales had already faced criticism for not acting forcefully enough on his pledge to crack down on corruption, and for his links to family and friends under investigation, before he tried to expel Commissioner Vel\u00e1squez. Then-Attorney General Aldana worked closely with the commissioner of CICIG to prosecute high-level corruption and human rights violation cases. Both said that the president initially had not interfered directly in corruption cases\u2014even those involving his family. But both also expressed disappointment that he had not spoken out in support of them and their anticorruption efforts when attacked by antireform elements. They also voiced concern that Morales has publicly portrayed himself and his family as victims of the judicial system, potentially biasing the judicial process.", "Initially, President Morales's political power was limited as a result of his own inexperience and his party's weak position in the legislature. Morales's small party, the right-wing National Convergence Front-Nation (FCN-Naci\u00f3n), won 11 of 158 seats in the legislature. The Guatemalan Congress elected an opposition member to be president of the unicameral chamber. At the beginning of Morales's term, deputies defected from other parties, bringing the FCN-Naci\u00f3n's seat total to 37. People criticized Morales for allowing the deputies to join his party just before the Congress outlawed the practice. The public prosecutor received complaints alleging that bribery motivated some defections to the FCN-Naci\u00f3n. ", "Morales has since formed an alliance able to pass legislation, however, and consolidated his support in the Congress. In 2017, the legislature twice voted against prosecutors' requests to lift the president's immunity for violations of campaign finance laws and bonuses paid to him by the military, blocking further investigations into the president's role in the scandals. The Congress tried to weaken anticorruption laws with a measure to reduce penalties for illegal campaign financing that the public dubbed the \"Pact of the Corrupt.\" Public outcry was so strong that Congress repealed the law two days after passing it. Nonetheless, the Congress elected a new leadership in February 2018, all of whom, according to the State Department, voted for that pact.", "In August 2018, the newly appointed Attorney General, Maria Consuelo Porras, submitted a third request to lift the President's immunity. The Guatemalan Congress voted again to maintain the President's immunity from prosecution. Almost half of the deputies in Congress are under investigation or have legal processes pending against them for corruption or other crimes.", "Morales has also come under fire for two contracts with an Indiana lobbying firm that reportedly has ties to U.S. Vice President Mike Pence. The firm was hired to improve relations between the U.S. and Guatemalan governments outside of normal diplomatic channels. Guatemalan politicians without the authority to act in foreign affairs signed the contracts. Morales denies knowing about the contract, though one was signed on his behalf, and only he and the foreign ministry are authorized to intervene in foreign affairs. Furthermore, observers criticize his reclusiveness with the press: he has removed journalists' access to the presidential palace, and rarely holds press conferences. ", "Morales's administration and the secretariat for Social Welfare came under scrutiny after a fire killed 41 girls in a state-run home in March 2017. The director of the shelter, the minister of Social Welfare, and his deputy were dismissed after the fire. Later that year a judge charged the former minister, his deputy, and five additional people (two police officers with abuse, and three senior members of social and child protection agencies with manslaughter or negligence). Trials against public officials charged in the case began in February 2019."], "subsections": [{"section_title": "Links Between Morales's Party and the Military", "paragraphs": ["Before the current controversy between Morales and CICIG, human rights and other observers expressed concern that Morales's party's ties to former military officers might put pressure on Morales's support of CICIG, as well as limit his government's investigation of military corruption and human rights violations. Before the new government was sworn in, then-Attorney General Aldana requested legal action against retired army colonel Edgar Ovalle, a key advisor to Morales and a legislator-elect with the FCN-Naci\u00f3n, for alleged civil war-era (1960-1996) human rights violations. After declining the request in 2016, Guatemala's Supreme Court lifted Ovalle's immunity in 2017. Ovalle fled, his whereabouts unknown since March 2017. ", "Over a dozen other military officers have been arrested on similar charges. Many of them support the FCN-Naci\u00f3n and belong to a military veterans' association, Avemilgua, which Ovalle helped found. Avemilgua members created the FCN-Naci\u00f3n in 2004, and testified in court in defense of former dictator Efrain Rios Montt in 2013. Rios Montt, found guilty in 2013 of committing genocide and crimes against humanity during the civil war, had his conviction effectively vacated a short time later. In 2016, a retrial began. In 2017, a judge ordered Rios Montt to stand trial in a different case for the massacre of 201 people between 1982 and 1983 in Dos Erres. Rios Montt died in 2018 before the trials concluded. Morales reportedly said he did not believe genocide had been committed during the war, but that crimes against humanity had.", "The Defense Ministry said in 2017 that it had been paying President Morales a substantial salary bonus since December 2016 (see \" Tension \" below). Two former presidents, Alfonso Portillo and Alvaro Colom, reportedly said they received no such bonus. Morales's former defense minister has been arrested in the case."], "subsections": []}]}, {"section_title": "Efforts to Combat Impunity and Corruption", "paragraphs": ["In what many observers see as a step forward in Guatemala's democratic development, the Public Ministry's corruption and human rights abuse investigations in recent years have led to the arrest and trial of high-level government, judicial, and military officials. They have also led to a backlash against those reform efforts, threats against the attorneys general and the head of an international commission, and a political crisis involving current President Jimmy Morales. The Public Ministry, which is headed by the Attorney General, is responsible for public prosecution and law enforcement, and has worked in conjunction with CICIG to strengthen rule of law in Guatemala. President Morales appointed a new attorney general, Maria Consuelo Porras, in May 2018, when Aldana's term expired. ", "Since 2007, CICIG has worked with the Public Ministry and the attorney general's office to reduce the country's rampant criminal impunity by strengthening Guatemala's capacity to investigate and prosecute crime. The government invited CICIG to assist with constitutional reforms and restructuring the judicial system. As a result of collaboration with CICIG, prosecutors have increased conviction rates in murder trials, and targeted corruption and organized crime linked to drug trafficking. The Guatemalan public widely supports CICIG. The United States, other governments, and international institutions have expressed broad support for the work of both the attorney general's office and CICIG over the years, and offered praise for their accomplishments. ", "A 2018 U.S. State Department report highlights these accomplishments: ", "CICIG's hundreds of investigations have resulted in charges against more than 200 current and former government officials\u2014including two recent presidents and several ministers, police chiefs, military officers, and judges. CICIG Commissioner Ivan Velasquez and [then-] AG [Thelma] Aldana forged a strong cooperative alliance to pursue many high-profile corruption cases. CICIG also builds the capacity of prosecutors, judges, and investigators working on high-profile and corruption-related cases.", "A January 2019 CICIG statement reports that the commission has supported the Public Ministry in more than 100 cases, including against former President Otto P\u00e9rez Molina and Vice President Roxana Baldetti, both of whom subsequently resigned. It also has promoted more than 34 legal reforms to strengthen transparency and judicial independence, helped identify over 60 criminal structures, and secured more than 300 convictions. A recent International Crisis Group study estimated that CICIG-backed justice reforms contributed to a 5% average annual decrease in murder rates in Guatemala from 2007 to 2017, in contrast to a 1% average annual increase in the murder rates among other countries in the region. The president-elect of El Salvador has called for a similar commission to be established in his country."], "subsections": [{"section_title": "Impeachment of a Former President, Arrest of Another", "paragraphs": ["Public Ministry investigations, coupled with mass public protests, forced the resignations of the sitting president and vice president in 2015. Then-Attorney General Aldana and CICIG exposed an extensive customs fraud network, now known as the \"La Linea\" case, at the national tax agency (SAT), leading to the arrest of dozens of people, including the previous and then-directors of the SAT. After the Guatemalan Congress lifted then-President Otto P\u00e9rez Molina's immunity so he could be investigated, the attorney general's office indicted him, Vice President Roxana Baldetti, and other officials, who then resigned. The country proceeded lawfully and peacefully to form an interim government, hold scheduled lawful elections, and elect a new president, Jimmy Morales, who took office in January 2016.", "The related corruption case implicated dozens of high-level government officials and private-sector individuals as well. The Attorney General at the time asserted that the \"La Linea\" case represented \"just a sliver of a sprawling criminal enterprise run by the state,\" which widely tolerated corruption, leading to impunity and the strengthening of criminal structures within the government. The attorney general and other observers have raised concerns about unnecessary delays in the sentencing process due to appeals and other litigation by defense teams. P\u00e9rez Molina remains in prison as his case proceeds. Baldetti was found guilty and is serving a 15\u00bd-year sentence in another case of embezzling millions of dollars from a fund for decontaminating a lake. ", "Following the historic \"La Linea\" case, more former and current high-level officials in the executive branch, the legislature, and the judicial system have been implicated in corruption cases. Three justices of the Supreme Court of Justice (CSJ) had their immunity removed to face charges of corruption and influence trafficking. In late March 2017, authorities arrested various congressional representatives for corruption. According to Transparency International, Guatemala ranked 143 rd out of 180 countries on the organization's Corruption Perceptions Index for 2017, the second-worst score in Central America, behind Nicaragua.", "Guatemalan police arrested another former president, Alvaro Colom, in February 2018. Colom was arrested along with nine former members of his cabinet, including former Finance Minister Juan Fuentes Knight, who has chaired Oxfam International since 2015. The group faces charges related to a $35 million fraud case involving a new bus system in the capital. Colom is free on bail while under investigation. He denies the charges."], "subsections": []}, {"section_title": "Tensions over President Morales's Dispute with CICIG34", "paragraphs": ["Early in his term, President Morales had reached out to policy experts and international donors for advice on fighting corruption. In April 2016, President Morales praised CICIG and formally requested its extension until 2019\u2014which the U.N. granted. Morales said previously that before he left office, he would extend CICIG's term again, until 2021. ", "In August 2017, two days after the attorney general and CICIG announced they were seeking to lift President Morales's immunity from prosecution, however, Morales declared the head of CICIG, Iv\u00e1n Vel\u00e1squez, persona non grata and ordered him expelled from the country. One of Morales's ministers resigned rather than carry out the order, and the constitutional court\u2014Guatemala's highest court\u2014blocked the order. A Guatemalan congressional committee recommended that the president lose his immunity. Two-thirds of the 158-member legislature, or 105 deputies, are needed to remove an official's immunity. On September 11, 2017, though, the Guatemalan Congress as a whole voted to protect the president from further investigation; only 25 deputies voted to remove his immunity. About 20% of the legislators are also under investigation, with more likely to become so. The legislature fell one vote short of shelving the request permanently, however, so a member of the Congress could reintroduce the question of lifting President Morales's immunity at a later date. ", "On September 13, the Guatemalan Congress passed a \"national emergency\" bill to reduce penalties for violations of campaign finance laws, and make party accountants\u2014rather than party leaders\u2014responsible for such violations. Public outcry was such that the Congress repealed the bill two days later. Thousands of protesters demanded the resignation not only of Morales, but also of the 107 legislators who voted to weaken anticorruption laws. On September 21, the Guatemalan Congress again defeated a vote to lift the president's immunity. This time, however, the number voting to rescind his immunity had risen to 70. In 2015, public protests contributed to the legislature reversing itself and rescinding the previous president's immunity. ", "Also in September 2017, Guatemala's federal auditor's office said that it was investigating a substantial salary bonus that the Defense Ministry acknowledged paying to the president since December 2016. The monthly bonus increased Morales's salary by more than a third, reportedly making him one of the most highly paid leaders in Latin America. The Attorney General again asked that Morales's immunity be lifted, this time so that her office could investigate his bonus from the army. The Congress again voted against lifting Morales's immunity from prosecution.", "Morales was losing support within his own government. Several officials were fired or resigned rather than carry out his order to expel Commissioner Velasquez. Three Cabinet ministers resigned, saying that as a result of the political crisis, \"spaces of opportunity to carry out our work programmes have rapidly closed down.\" Initially, Morales persuaded some of those officials to stay, but in January 2018 he fired several of them and replaced them with people he considered stronger allies.", "A new civic organization was launched in February 2018, the Citizens' Front against Corruption. This group of prominent businesspeople, indigenous leaders, academics, activists, and others expressed public support for both the Attorney General and CICIG Commissioner Vel\u00e1squez.", "In 2018 the President reversed on his earlier pledge, and said he would not renew CICIG's term. Morales made the announcement on August 13, flanked by members of the military. In what was widely seen as an act of intimidation, Guatemalan police deployed armored vehicles outside CICIG headquarters and embassies of the United States and other CICIG donors. The United States had provided the vehicles to the Guatemalan police for counternarcotics and border enforcement operations. Some Members of the U.S. Congress demanded Guatemala return the jeeps. Morales then barred CICIG Commissioner Vel\u00e1squez from reentering the country, in defiance of two Constitutional Court rulings that he lacks the authority to do so. ", "In January 2019, Morales unilaterally tried to end CICIG's mandate, and gave CICIG staff 24 hours to leave the country. The U.N., European Union, advocates for government transparency and human rights, and others expressed concerns over Morales's decision, and thousands of Guatemalan citizens protested the decision and again called on Morales to resign. The Morales administration is trying to impeach members of the Constitutional Court who have ruled in favor of CICIG. CICIG continued its work in compliance with the judicial finding from abroad, and in February most staff returned to Guatemala under contingency safety plans. Vel\u00e1squez and 11 investigators whose visas were revoked have not returned.", "The Trump Administration expressed support for CICIG and for Commissioner Vel\u00e1squez in 2017. In 2018, however, the Administration did not join other donors in doing so again. (See \" U.S.-Guatemalan Relations \" below.)", "Despite some differences of opinion over CICIG's efforts, many in Congress are concerned that Morales's efforts to hinder or oust CICIG could undermine objectives of the U.S. Strategy for Engagement in Central America, by undermining efforts to strengthen the rule of law and heightening instability in Guatemala. Some Members support Morales's claims that CICIG has violated Guatemala's sovereignty and maintain that the United States should end its financial support of CICIG. Other Members of Congress are calling for punitive measures against the Morales administration, including suspending foreign aid and imposing Global Magnitsky sanctions on corrupt individuals. "], "subsections": []}, {"section_title": "Prosecutions for Wartime Human Rights Violations and Efforts to Stop Them", "paragraphs": ["As noted above, the Guatemalan Truth Commission found that more than 200,000 people were killed or disappeared during the country's internal conflict. It also concluded that state forces and related paramilitary forces were responsible for 93% of documented human rights violations, and that the vast majority of victims were noncombatant civilians and Mayan.", "Guatemala was the first country to convict a former leader of genocide, when ex-dictator Rios Montt was found guilty in 2013, during the term of former Attorney General Claudia Paz y Paz. (His conviction was overturned, and he died before a retrial was concluded.)", "Then-Attorney General Aldana and CICIG made progress in pursuing justice for human rights violations that occurred during the civil war. In March 2016 they tried a historic case known as the \"Creompaz case\"\u2014the first prosecution for sexual violence committed during the civil war. A Guatemalan high-risk court convicted two former military commanders at the Sepur Zarco military base of murder, sexual violence, sexual and domestic slavery, and enforced disappearances. In March 2017, a judge sent to trial a former military chief of staff and four other high-ranking military officials accused of crimes against humanity, aggravated assault, sexual violence, and forced disappearance. Also in March, the Supreme Court ruled to remove immunity from FCN-Naci\u00f3n deputy Edgar Ovalle for his alleged involvement in the case. As noted previously, Ovalle, a key advisor to President Morales, has since disappeared. Another case dealing with forced disappearances allegedly committed by the Guatemalan military during the civil war took a dramatic turn in March 2016 when a judge seized and made public previously unknown documents detailing information about military counterinsurgency objectives, operations, and campaigns from 1983 to 1990. Since the Peace Accords were signed in 1996, the Guatemalan army had repeatedly denied such documents existed. ", "Observers have expressed concern that Morales has failed to protect human rights. During his election campaign, U.S. embassy officials expressed concern that Morales's campaign team refused to cooperate with certain elements of Guatemalan civil society, particularly human rights advocates working on the protection of children and trafficking victims, and LGBTI (lesbian, gay, bisexual, transgender, intersex) issues. Human Rights Ombudsman Rodas recently said that the Morales administration refused to meet with indigenous leaders to discuss a surge in violence against indigenous people. The Guatemalan Union of Human Rights Defenders has reportedly documented over 200 attacks against human rights defenders in Guatemala in 2018. Twenty-six indigenous people were killed in 2018, many of them activists defending indigenous rights in land and mineral conflicts.", "Proposed amnesty for crimes against humanity and reforms to penal code . Guatemalan legislators are moving a bill through their Congress that would grant amnesty to perpetrators of crimes against humanity. The bill would amend the National Reconciliation Law, which was passed after the peace accords that ended the civil war. While the original law includes amnesty for some crimes, it does not include amnesty for torture, forced disappearance, and crimes against humanity. The proposed amendment would order the release within 24 hours of people serving prison time for those crimes, including more than 30 former military officials. It would also end all current and future criminal investigations into rights abuses committed during the civil conflict. ", "Passage of the amendment requires three separate votes on the bill; the legislature passed the first vote in January 2019, the second in February. The third vote was suspended on March 13, when some members of the Congress walked out and left the session without a quorum, in the face of protests from human rights advocates, victims' groups, international organizations, and foreign governments. The G13 group of donors to Central America, including the United States, issued a statement saying that providing amnesty \"would contravene Guatemala's international obligations; would harm reconciliation efforts; and could seriously erode faith in the rule of law in Guatemala.\" The Inter-American Court of Human Rights ordered Guatemala to cease discussion of the amnesty bill and to permanently shelve it. Advocates of the bill reportedly dismissed such admonitions as interference in Guatemala's internal affairs. Because the vote was suspended, amnesty proponents can still schedule the bill for a third and final vote, and say they will do so.", "The legislature is also moving forward amendments to the penal code that could accomplish some of the same objectives of the amnesty. The bill would prevent the imprisonment of people older than 70, and limit pretrial detention to one year. Final passage of the bill, which has already passed two of the three required readings, would free many former military officers convicted of crimes against humanity, and prevent the imprisonment of others. It would also free many people convicted or charged for corruption."], "subsections": []}, {"section_title": "Judicial Reforms to Combat Corruption and the Backlash Against Them", "paragraphs": ["Various Guatemalan and international organizations consider judicial reforms necessary to solidify progress against widespread corruption and to strengthen the judicial branch so it can continue consolidating the rule of law in Guatemala. Nonetheless, forces opposed to the reforms have emerged as well.", "As anticorruption efforts prove successful, the circle of those feeling threatened by investigations broadens, and attacks against CICIG and the judicial system have intensified. The U.N. Office of the High Commissioner for Human Rights (OHCHR) issued a report in March 2017 saying it was \"seriously concerned\" about threats and attacks against various judicial authorities, including both Aldana and Judge Miguel Angel Galvez. The International Commission of Jurists noted concern about efforts to criminalize lawyers, as well as community leaders, human rights defenders, and public employees, such as Supreme Court justices.", "Civil society groups and elements of the government have called for further reforms to combat impunity. An April 2017 report from the International Commission of Jurists found that despite tackling historic cases, Guatemalan courts still show signs of irregularity and impunity, such as many judges' failure to condemn litigation that results in delays of trials. Many of the accused in the La Linea case still await sentencing three years after the scandal broke in late 2015, in part because of litigation filed by their own lawyers in what are widely seen as delaying tactics.", "According to CICIG head Iv\u00e1n Vel\u00e1squez, the work of CICIG and the attorneys general has resulted in more than 300 people either in prison, facing trial, or being charged. These include high-level officials, such as the former president and vice president, five former Cabinet ministers, three former presidents of Congress and various deputies, two former CSJ magistrates, the former president of the Instituto Guatemalteco de Seguridad Social (IGSS), two former banking superintendents, and a director of the prison service, among others. ", "President Morales spoke before the U.N. General Assembly in September 2017. He pledged to strengthen and support CICIG, but he also said Guatemala was revising the interpretation and application of its agreement with CICIG and no institution should interfere in Guatemala's administration of justice. On the same day, three of Morales's Cabinet members resigned over the political crisis instigated by the president's effort to expel CICIG's commissioner. In February 2018, Morales sent a representative to the U.N. to express his administration's concerns about CICIG.", "Many in the U.S. Congress expressed concern over President Morales's effort to expel CICIG's commissioner. The House Foreign Affairs Committee chairman at the time issued a statement reading, \"The U.S. Congress has spoken with one voice in support of the International Commission against Impunity in Guatemala. We will continue to stand with the Guatemalan people, and especially those in poverty, who are hurt most by corruption.\" ", "The Guatemalan Congress approved changes concerning judge and magistrate selection and requirements. A recent International Commission of Jurists (ICJ) report concluded that reforming the selection process of judges and separating judicial processes from administrative processes could strengthen Guatemala's judicial system. CICIG and others launched a judicial observatory of criminal justice to analyze judiciary rulings and make recommendations to improve the justice system in other ways as well.", "The ICJ found that the Guatemalan state has responded passively to defamation campaigns, attacks on judicial independence, and other forces trying to influence judges, prosecutors, and investigators. According to the director of the Guatemalan Institute of Comparative Studies in Criminal Sciences, the groups seeking to stop the reforms are the same elements that launched defamation campaigns on social media against CICIG head Iv\u00e1n Vel\u00e1squez in early 2017.", "Shortly after then-President Perez Molina was forced to resign and was arrested on corruption charges in 2015, the Guatemalan legislature took some actions to advance various types of reform. The Guatemalan Congress passed two major reform packages in 2016, for example, that were designed to streamline legislative procedures and make political and electoral system procedures more transparent and equitable. In late 2017, the legislature passed two laws intended to improve the judicial process. One created a Judicial Career Council to relieve the Supreme Court of having to address internal human resources administrative matters, and the other created a National Bank of Genetic Data to be used in judicial processes as well as a Register of Sexual Aggressors. ", "Other of its actions, however, reflect an effort to reverse or stall reform efforts. A lengthy national process produced 60 proposed amendments to the constitution and other laws to promote judicial reform. Congress did not pass an initial package of the reforms in 2016 and has not brought it up again. The most divisive proposed change was a stronger recognition and use of the indigenous justice system. Some observers express concern that the current Congress does not wish to pass the reforms due to their links to people under investigation for corruption, or because they themselves are under investigation. This latter view was reinforced by congressional actions in September 2017 preserving the president's immunity and trying to reduce penalties for violations of campaign finance laws.", "The bill amending the penal code mentioned in the previous section would free many former government officials and businesspeople facing charges for corruption, including former President Perez Molina. Many of those people were placed in pretrial detention over concerns they would flee the country. Some of their trials have not proceeded, as noted above, in part because of motions filed by their own lawyers, in what are widely viewed as delaying tactics."], "subsections": []}]}]}, {"section_title": "Economic and Social Conditions", "paragraphs": ["Guatemala enjoyed relatively stable economic growth in recent decades, and the World Bank named it a top performer in Latin America. As economic growth rates have slowed in more recent years, however, Guatemala has struggled to address its high poverty rates. The country has the largest economy in Central America, with a gross domestic product (GDP) of $75.62 billion and a per-capita income of $4,060 in 2017. The World Bank characterizes Guatemala as a lower-middle-income country, and it ranks 127 th out of 189 on the 2018 Human Development Index. ", "Guatemala's stable growth rates have not been enough to decrease some of the highest levels of economic inequality and poverty in the region. Instead, Guatemala has backtracked. After decreasing the overall poverty rate from 56% to 51% between 2000 and 2006, the rate increased to 59% in 2014, with a rate just over 79% for indigenous people, according to a national survey. Some elements of Guatemalan society and government have tried to bring about equitable development, yet its rural and indigenous populations remain socially and economically marginalized. For rural municipalities, which constitute 44% of the country, almost 8 out of 10 people live in poverty. Demonstrating the difference in economic and social conditions, literacy rates for the nonindigenous population were 88.9% for men and 83.7% for women, but rates decreased to 77.7% for indigenous men and 57.6% for indigenous women 15 years and older.", "The International Monetary Fund (IMF) concluded that Guatemala lags behind similar countries in terms of development outcomes. While the government has incorporated global Sustainable Development Goals into their national strategy, the IMF reports that the steps necessary to implement those policies \"remain largely unaddressed.\"", "Furthermore, extreme poverty increased and school enrollment decreased. Nonindigenous children average twice as many years of schooling as indigenous children. To improve social conditions, the World Bank calls for rapid economic growth coupled with increased public investment and pro-poor policies. According to the Economist Intelligence Unit (EIU), Guatemala's economic growth rate is expected to average out at 2.9% in 2019. EIU projects average growth from 2019 to 2023 at 3% but with a dip to 2.4% for 2020. The IMF concludes that slowed economic growth and rapid population growth will keep per-capita income growth too low to reduce poverty. A recent major economic analysis found that economic growth in Guatemala is \"largely a result of the strong inflow of family remittances from abroad.\"", "Factors that impede economic growth and development include corruption, limited government revenues, weak institutions, and weak transportation and energy infrastructure. A recent economic analysis concluded that corruption has a negative impact on economic activity across Central America. It also concluded that ", "... anti-corruption measures, such as those launched by the MP and CICIG help create a favorable environment for increasing economic growth in Guatemala because they reduce the avenue for corruption and strengthen the government's effectiveness as a provider of wellbeing.", "Guatemala's persistent failure to deliver services and improve the quality of education and health care contribute to a low-skilled workforce, which also limits growth. According to the U.N. Educational, Scientific, and Cultural Organization (UNESCO), Guatemalan adults had only 3.6 years of education, on average, in 2005, and \"if Guatemala had matched the regional average, it could have more than doubled [emphasis in original] its average annual [economic] growth rate between 2005 and 2010.\" Current mean years of education is 6.4 for men and for women. ", "Guatemala has the lowest tax-to-GDP ratio in the region at 12.6%, compared to 22.7% for Latin America in 2016. This is due in part to the high rate of employment in the informal economy\u2014the Instituto Nacional de Estad\u00edstica found that 71% of the population held informal employment in 2018. The percentages were even higher for women, people aged 15-24, and rural and indigenous segments of the population. Another contributing factor includes the business and elite sectors' historical resistance to paying taxes. While the tax administration improved tax collection in 2016-2017 (see \" President Jimmy Morales's Administration \"), an IMF report on Guatemala cautions that maintaining an improved rate \"will require strong and sustained political commitment,\" which previous efforts have lacked. Tax reforms in 2012, for example, gave the government tools to increase revenues through taxes, but, the same report notes, weak implementation left Guatemala \"with virtually unchanged tax-to-GDP ratio [several years] after the reform.\" The IMF has called for a tax revenue rate increase to at least 15% of GDP in order to address social, security, and infrastructure needs. ", "Land conflicts, especially those involving mining, are contentious, and often violent, in Guatemala and elsewhere throughout the region. Governments often see mines as a source of revenue, potentially for poverty reduction and social programs. Indigenous populations often object to mining under current conditions, however, because they say it violates their ancestral land rights, removes them from and/or damages their source of livelihood, and/or excludes them from the decisionmaking process as to how mine profits should be spent. Guatemala is a signatory to the Indigenous and Tribal Peoples Convention, 1989, also known as the International Labour Organization's (ILO's) Convention 169. The treaty calls on governments to consult indigenous peoples before permitting exploitation of natural resources on their land. According to a recent report by the ILO, the Guatemalan government granted 367 mining licenses between its ratification of the convention in 1996 and 2014, and held only 60 community consultations, all of which had expressed opposition to the projects. The report found that Guatemala's Constitutional Court had found such consultations nonbinding. Guatemala has not developed regulations to govern prior consultations.", "Ongoing conflicts around land use are likely to continue to delay such projects. Other types of land conflicts and evictions are related to biofuels, dams, ranching, and drug trafficking; these are also frequently violent.", "Coffee is one of Guatemala's key exports. Yet several obstacles are driving coffee farmers from the market: coffee leaf rust (a deadly fungus), extremely low coffee prices, and a drought, which has triggered increases in food prices. Smallholder farmers, with less than 7.5 acres of land, produce 80% of Central America's coffee. According to a recent NPR report, \"Some 70 percent of the farms have been affected [by the rust], and over 1.7 million coffee workers have lost their jobs. Many are leaving the coffee lands to find work elsewhere.\"", "Remittances from Guatemalans abroad boost the Guatemalan economy as they constitute over 10% of the GDP, and this percentage is forecast to grow to an average of 13.8% through 2023. Private consumption accounts for 85% of GDP. "], "subsections": []}, {"section_title": "U.S.-Guatemalan Relations", "paragraphs": ["Traditionally, the United States and Guatemala have had close relations, with friction at times over human rights and civil/military issues. According to the State Department, current U.S. policy objectives in Guatemala include addressing the underlying drivers of illegal migration; supporting the institutionalization of democracy; encouraging respect for human rights and rule of law, and the efficient functioning of CICIG; supporting broad-based economic growth and sustainable development and maintaining mutually beneficial trade and commercial relations, including ensuring that benefits of CAFTA-DR reach all sectors of Guatemalan society; cooperating to fight money laundering, corruption, narcotics trafficking, alien smuggling, trafficking in persons, and other transnational crimes; supporting Central American integration through support for resolution of border and territorial disputes; reinforcing the government's economic development and political reform plan in the Alliance for Prosperity to be self-reliant in addressing drivers of migration and illicit trafficking of goods and people; and improving Guatemala's business climate. ", "In 2017, the Trump Administration expressed support for CICIG and for Commissioner Vel\u00e1squez. In February, then-Homeland Security Secretary John Kelly met with President Morales and Commissioner Vel\u00e1squez in Guatemala, and reiterated U.S. support for the Public Ministry's and CICIG's fight against corruption. On the same day, a U.S. court indicted former Guatemalan Vice President Roxana Baldetti and former Interior Minister Mauricio Lopez Bonilla on criminal drug trafficking charges. A Guatemalan court approved a U.S. request for Baldetti's extradition in June 2017, but first she will face prosecution on four charges of corruption in Guatemalan courts. She was convicted and is serving time for one case of embezzlement there. Lopez Bonilla must first face three counts of corruption in Guatemalan courts. The United States arrested former Guatemalan presidential candidate Manu\u00e9l Baldiz\u00f3n as he entered the country in January 2018. The U.S. Embassy in Guatemala said the United States would \"return Mr. Baldiz\u00f3n to Guatemala to face justice\"; he faces charges of bribery, conspiracy and money-laundering related to helping the Odebrecht company win construction contracts in Guatemala. The Odebrecht scandal is enveloping politicians across Latin America. Baldiz\u00f3n requested asylum in the United States.", "U.S. Vice President Mike Pence, then-Secretary of State Rex Tillerson, Secretary of Commerce Wilbur Ross, then-Secretary of Homeland Security Kelly, and Secretary of the Treasury Steven Mnuchin attended meetings with President Morales, as well as his Honduran counterpart and the Salvadoran vice president, in June 2017 at the Conference on Prosperity and Security in Central America in Florida. Pence said that addressing migration to the United States requires strengthening the sending countries' economies, including through foreign assistance. Nonetheless, the Trump Administration has proposed significantly cutting aid to the region and emphasizing security over development in its budget requests. The President has sometimes threatened to cut off aid to Guatemala and the other northern triangle counties. Congress has rejected most of the Administration's proposed cuts.", "President Morales followed President Trump's lead in December 2017 in announcing his country would move its embassy in Israel to Jerusalem from Tel Aviv. The change has been widely criticized internationally. A nonbinding U.N. General Assembly resolution called for the United States to shelve its recognition of Jerusalem. Trump threatened to cut off aid to countries that supported the resolution. In February 2018, Trump met with Morales in Washington, thanking him for his support on Israel. According to the White House, Trump \"also underscored the importance of stopping illegal immigration to the United States from Guatemala and addressing Guatemala's underlying challenges to security and prosperity.\"", "In 2018, the Trump Administration did not join other commission donor countries in stating support of CICIG and the Commissioner. Secretary Pompeo spoke with President Morales on September 6, 2018, expressing continued support for \"a reformed CICIG,\" but did not report mentioning either the termination of CICIG's mandate or the barring of Vel\u00e1squez.", "In March 2019 the Administration joined other donor countries in speaking out against Guatemala's proposed amnesty bill, and suspended military aid to Guatemala over the misuse of jeeps that had been provided by the Department of Defense. "], "subsections": [{"section_title": "U.S. Foreign Assistance", "paragraphs": ["The United States has been providing assistance to Guatemala through regional initiatives: the Central American Regional Security Initiative (CARSI), for combating narcotics trafficking and preventing transnational crime; the President's Emergency Plan for AIDS Relief (PEPFAR); and Food for Peace. Currently, U.S. assistance to Guatemala is guided by the U.S. Strategy for Engagement in Central America. The various programs are integrated for a greater impact in the Western Highlands region of the country, which has the highest rates of poverty, chronic malnutrition, and out-migration in Guatemala, and in high-crime areas. According to the State Department, \"The overall objective of U.S. assistance efforts is to create effective structures and organizations sustainable by the Guatemalan government.\" While some structures, such as the attorney general's office, have greatly improved their effectiveness with U.S. and other support, other institutions remain weak.", "U.S. bilateral assistance to Guatemala complements CARSI programs and the regional Alliance for Prosperity Plan (see \" The Alliance for Prosperity and Other Regional Initiatives \" below). Economic Support and Development assistance aims to expand economic opportunities; improve governance, accountability, and transparency; strengthen the juvenile justice system; and improve living conditions in Guatemala.", "In 2014, the Obama Administration launched the U.S. Strategy for Engagement in Central America (the Strategy), a whole-of-government approach aimed at addressing the root causes of illegal immigration from the region by improving prosperity, regional economic integration, security, and governance. The Strategy complements the Plan of the Alliance for Prosperity (AFP) in the northern triangle proposed by the presidents of El Salvador, Guatemala, and Honduras (see \" The Alliance for Prosperity and Other Regional Initiatives \" below). Congress has appropriated $2.1 billion for the Strategy for FY2016-FY2018. ", "Congress placed numerous conditions on aid for Guatemala (and El Salvador and Honduras) in each of the foreign aid appropriations measures enacted since FY2016. Through the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), Congress withheld 25% of aid to the three central governments until the Secretary of State certified that conditions relating to limiting irregular migration were met. Congress conditioned another 50% of aid until the governments addressed another 12 concerns, including combating corruption; countering gangs and organized crime; increasing government revenues; supporting programs to reduce poverty and promote equitable growth; and protecting the rights of journalists, political opposition parties, and human rights defenders to operate without interference.", "The State Department certified that the three northern triangle governments met Congress's conditions in FY2016 and FY2017. The department certified that the three countries had met the first set of conditions in FY2018, but not the second set. The 2019 Consolidated Appropriations Act ( P.L. 116-6 ) maintained the legislative conditions enacted in prior years but combined them into a single certification requirement for 50% of assistance to the central government.", "The Trump Administration has proposed cutting aid to Guatemala by 36% for FY2020 compared to FY2018 and emphasizing security over development. The budget request for Central America would also reduce aid, and tip the balance toward security and away from traditional development goals\u2014such as good governance, economic growth, and social welfare. ", "The Administration's proposed budget would also eliminate traditional food aid (P.L. 480, Title II), and food aid would be provided only through the International Disaster Assistance account. Some critics are concerned that reducing nonemergency food aid could increase the already high levels of malnutrition and stunting in Guatemala. In addition, a recent study by several major international organizations found that \"there is clearly a link between food insecurity and emigration from [Guatemala, El Salvador and Honduras].\"", "The Trump Administration proposes closing down the Inter-American Foundation (IAF), an independent U.S. agency that supports grassroots development throughout Latin America, including in all three northern triangle countries, and merging it into USAID. Many IAF programs in Guatemala are in areas that have high levels of emigration to the United States; these programs aim to improve agricultural and food production; improve the livelihoods of youth, women, and indigenous people, and increase their participation in civil society and community development; and ease the transition of migrants who return to Guatemala.", "Congress rejected most of the cuts for aid to Central America proposed by the Trump Administration in its previous budgets. The FY2017 Consolidated Appropriations Act ( H.R. 244 , P.L. 115-31 ) provided just under $126 million for Guatemala as part of the $655 million for the continued implementation of the Strategy. The FY2018 Consolidated Appropriations Act ( H.R. 1625 , P.L. 115-141 ) provided less than $120 million for Guatemala as part of the $615 million for the Strategy.", "The 116 th Congress remains invested in the U.S. Strategy for Engagement in Central America. In February 2019, it passed the FY2019 Consolidated Appropriations Act ( H.J.Res. 31 , P.L. 116-6 ), including $528 million for Central America. The act did not provide specific funding amounts for individual countries, but instead gave the Department of State the authority to allocate funding among the Central American nations. The act's conference report, however, did specify $13 million in Global Health Program aid for Guatemala and $6 million for CICIG. ", "The 116 th Congress has introduced other bills that touch on perennial concerns involving Guatemala, such as immigration, border security, and governance issues. For example, H.Res. 18 , introduced in January, would express the sense of the House that the President should redirect and target foreign assistance provided to Guatemala, El Salvador, and Honduras in a manner that addresses the driving causes of illegal immigration into the United States. S. 716 and H.R. 1630 , introduced in March 2019, would impose targeted sanctions under the Global Magnitsky Human Rights Accountability Act against Guatemalan nationals found responsible for, or complicit in, acts of corruption, laundering money, or violating human rights. ", "In March 2019 the Department of Defense announced it was suspending military aid to Guatemala's Ministry of the Interior, which it said had repeatedly used armored jeeps provided by the United States \"in an incorrect way\" since August 2018, when they were deployed outside CICIG and donor embassies when Morales announced he was not renewing CICIG's mandate."], "subsections": []}, {"section_title": "The Alliance for Prosperity and Other Regional Initiatives", "paragraphs": ["In response to increased Central American immigration in 2014, the Obama Administration and some Members pressed the northern triangle governments (Guatemala, Honduras, and El Salvador) to invest more heavily in their own development and security. Later that year, the Guatemalan, Salvadoran, and Honduran governments proposed the Plan of the Alliance for Prosperity in the northern triangle with the help of the Inter-American Development Bank. The five-year, $22 billion initiative seeks to (1) stimulate the productive sector to create economic opportunities; (2) develop human capital through improved education, job training, and social protections (health care, nutrition); (3) improve public safety and access to the legal system; and (4) strengthen institutions and improve transparency to increase public trust in the state. Some observers, including some U.S. officials, criticized the initial plan for not focusing on development and poverty-reduction efforts in the poorest regions, from which the highest numbers of people emigrate. The Guatemalan Embassy says that the government has since shifted some of its programs toward those regions. ", "Guatemala, Honduras, and El Salvador launched a trinational task force to address the region's security issues in November 2016. The task force focuses on greater border protection, undertaking operations to dismantle gangs and criminal structures, taking action against human trafficking, cracking down on terrestrial drug trafficking across borders, and stopping the flow of contraband products through the northern triangle. The initiative includes increased information sharing and cooperation among the three countries' governments, as well as law enforcement and investigative agencies. ", "The governments of El Salvador, Guatemala, Honduras, and Mexico agreed on a Comprehensive Development Plan in December 2018, and met in January 2019 to begin its design. They say they intend to be the first region in the world to implement the Global Compact for Migration, which seeks to improve cooperation between countries and regions to facilitate safe, orderly, and regular international migration. Honduran Foreign Minister Maria Dolores Ag\u00fcero stated that \"[r]especting the dignity of migrant persons will be prioritized in line with international law and with special emphasis on a child's best interest and the protection of human rights, regardless of migratory status.\" Mexican Secretary of Foreign Affairs Marcelo Ebrard said the group wished to demonstrate that addressing the causes of migration is more effective than exclusion and containment measures."], "subsections": []}, {"section_title": "Trade and CAFTA-DR", "paragraphs": ["Guatemala and the United States have significant trade relations, and are part of the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), implemented in 2006. Supporters of CAFTA-DR point to reforms it spurred in transparency, customs administration, intellectual property rights, and government regulation. Critics note that the commercial balance between the two countries previously favored Guatemala, and that Guatemala already had duty-free access under the Caribbean Basin Initiative. Since CAFTA-DR, the balance has shifted in favor of the United States. The U.S. goods trade surplus with Guatemala reached $2.9 billion in 2017, a 16% increase from 2016. From 2005 (pre-CAFTA-DR) to 2017, U.S. exports to Guatemala increased by 143%, whereas Guatemalan exports to the United States increased by only 28% during the same period. President Trump has ordered reviews of U.S. trade agreements.", "Total U.S.-Guatemala trade in goods and services for 2017 reached $13.5 billion, and U.S. exports to Guatemala amounted to $8.5 billion. Mineral fuels, articles donated for relief, machinery, electrical machinery, and cereals accounted for the majority of U.S. exports. U.S. agricultural exports include corn, soybean meal, wheat, poultry, and cotton. U.S. imports from Guatemala amounted to about $4 billion, with bananas, plantains, knit apparel, woven apparel, coffee, silver, and gold accounting for the majority. Guatemala was the United States' 43 rd -largest trading partner in 2017. ", "The U.S. Labor Department initiated a dispute settlement process alleging that the Guatemalan government violated its CAFTA-DR labor commitments, the first labor rights complaint lodged under a U.S. free trade agreement. In 2011, the U.S. Trade Representative officially requested an arbitral panel. In 2017, the panel concluded that although it agreed that Guatemala had failed to enforce its labor laws effectively in certain cases, the United States had failed to prove that the lack of enforcement negatively affected trade, as required under CAFTA-DR. Some observers say the finding brings into question the effectiveness of labor regulations in U.S. free trade agreements. The Trump Administration may consider renegotiating CAFTA-DR."], "subsections": []}, {"section_title": "Counternarcotics Cooperation", "paragraphs": ["Guatemala remains a major transit country for illicit drugs, particularly cocaine, trafficked from South America to the United States. Guatemala's porous borders and lack of law enforcement presence in many areas enables minor poppy and opium production, as well as smuggling of precursor chemicals, narcotrafficking, and trafficking of weapons, people, and other contraband. Unlike former President P\u00e9rez Molina, current President Morales opposes legalization of illicit drugs. According to the State Department, in 2017 Guatemala recorded record drug seizures and arrested 106 high-profile drug traffickers. In response to increased drug consumption, Guatemala doubled its budget for domestic reduction activities. The United States provides assistance in the areas of vetted units, and a range of training, with the goal of improving the professional capabilities and integrity of Guatemala's police forces and judicial institutions. ", "The 2018 International Narcotics Control Strategy Report (INCSR) highlighted the above improvements in Guatemala's drug control and border security, but noted the following:", "Corruption levels remain high and public confidence in government institutions is low. Limited budget resources hinder the government's effectiveness. Despite Guatemala's many successes in 2017, the government needs to take additional steps to further build sustainable drug control mechanisms, including support for anti-corruption efforts, accelerated judicial processes, improved interagency cooperation, and adequate financial resources for relevant agencies and government ministries. ", "Corruption within the Guatemalan government has enabled illicit drug trafficking. The U.S. Department of Justice requested the extradition of former Interior Minister Lopez Bonilla, who oversaw the Guatemalan police and prisons under the Perez Molina administration. The Justice Department reportedly said that Lopez Bonilla received money from various drug cartels, including the notorious Los Zetas, in exchange for allowing them to operate freely across Guatemala. A U.S. court also indicted former Guatemalan Vice President Roxana Baldetti on criminal drug trafficking charges. In 2017 a Guatemalan court approved their extradition to the United States, but first they must face prosecution on multiple charges of corruption in Guatemalan courts. Baldetti was convicted and is serving time for one case in Guatemala. ", "The Trump Administration suspended military aid to Guatemala intended for police counternarcotics and border security operations task forces In March 2019. The Department of Defense announced it was ending the \"transfer of equipment and training to the task forces\" because the Interior Ministry, which oversees the police, had repeatedly misused armored jeeps provided by the United States since August 2018. (See \" Tensions over President Morales's Dispute with CICIG \" above.)"], "subsections": []}, {"section_title": "Migration Issues98", "paragraphs": ["Approximately 1.5 million U.S. residents claim Guatemalan ethnicity, and there were over 950,000 foreign-born persons from Guatemala living in the U.S. in 2017. The Pew Research Center estimates that in 2016, 575,000 of the Guatemalan foreign-born population were unauthorized (about 60%). From the 1970s to 1990s, the civil war fueled some migration. During the 2000s, migration became motivated by socioeconomic opportunities, natural disasters, social violence, and family reunification. Unlike their neighbors in the region, Honduras and El Salvador, Guatemalans have not received Temporary Protected Status (TPS), which offers immigration relief from removal under specific circumstances. ", "Some Guatemalans benefit from the Deferred Action for Child Arrivals (DACA) program, which allows people without lawful immigration status who came to the United States as children and meet certain requirements to request protection from removal for two years, subject to renewal. On September 5, 2017, the Trump Administration announced plans to phase out the DACA program. President Trump later tweeted that if Congress did not pass DACA-like legislation by early 2018, he would \"revisit\" the issue. As of the date of this report, no such legislation has been passed. Due to federal court orders, DACA renewals are once again being accepted; new applications for DACA, however, are not.", "From FY2009 to FY2014, the number of unaccompanied migrant children (sometimes referred to as Unaccompanied Alien Children, or UAC) from Guatemala apprehended at the U.S. border rose from 1,115 to 17,057, causing concern among Congress and the executive branch. In the years since, the trend has fluctuated, as the number of unaccompanied Guatemalan minors apprehended at the border decreased to 13,589 in 2015; rose to 18,913 in FY2016; fell to 14,827 in FY2017; and rose to 22,327 in FY2018.", "To offer a safer alternative to travelling to the United States to request asylum, the U.S. government launched the Central American Minors (CAM) Refugee/Parole program in December 2014. The program allowed children living in El Salvador, Guatemala, and Honduras, whose parents reside legally in the United States, to apply for legal entry to the United States. In July 2016, the U.S. government expanded the CAM program to include additional family members. According to State Department data, 45 Guatemalans left for the United States under refugee status and 31 as parolees between the program's start in December 2014 and September 2017. The Trump Administration ended the CAM program in November 2017.", "According to the U.N. High Commissioner for Refugees, 62% of unaccompanied migrant children interviewed in 2013 did not mention serious harm as a reason for leaving Guatemala, and 84% cited hopes for family reunification, increased work or study opportunities, or helping their families as motivation for coming to the United States. ", "Two Guatemalan children, 7 and 8 years old, died while in U.S. Customs and Border Protection (CBP) custody in December 2018. CBP Commissioner Kevin McAleenan subsequently issued guidelines for the agency to conduct health inspections on all children in custody, and said he was looking for ways to reduce congestion in government holding facilities, including having nongovernment organizations provide short-term housing for immigrants seeking asylum. McAleenan also said that holding facilities had been built for single adult males, not for family groups with children, and that a different approach was needed. \"We need help from Congress. We need to budget for medical care and mental health care for children in our facilities,\" he said.", "The U.S. Strategy for Engagement in Central America and the Central American Plan of the Alliance for Prosperity in the northern triangle were developed in large part as a response to the surge in immigration in 2014. They represent efforts to spur development and reduce illegal emigration to the United States. The Trump administration's proposed budgets have emphasized security over development, and substantial cuts in assistance to the region."], "subsections": []}, {"section_title": "Intercountry Adoption", "paragraphs": ["U.S. laws and policies concerning intercountry adoption are designed to ensure that all children put up for adoption are truly orphans, and have not been bought, kidnapped, or subjected to human trafficking, smuggling, or other illegal activities. Similarly, the goals of the Hague Convention on Protection of Children and Cooperation in Respect of Intercountry Adoption are to ensure transparency in adoptions to prevent human trafficking, child stealing, or child selling, and to eliminate confusion and delays caused by differences among the laws and practices of different countries. Both the United States and Guatemala are party to the convention. Because Guatemala has not yet established regulations and procedures that meet convention standards, the convention has not entered into force there.", "In FY2007, U.S. citizens adopted 4,726 children from Guatemala, more than from any other country except China (5,453 adoptions). When the convention went into effect in the United States in 2008, adoptions from Guatemala were suspended because Guatemala was not in compliance with the convention's standards. Since then, the only cases of adoptions by U.S. citizens of Guatemalan children that have been permitted are those that were already in-process on December 31, 2007. There were about 3,000 such adoption cases pending at the time. As of 2016, all but 3 cases had been resolved. According to the U.S. State Department, the Guatemalan government's priority is to continue developing its domestic adoption processes, but it is receptive to ongoing discussions. The State Department says it continues efforts to work with Guatemala to establish intercountry adoption procedures. "], "subsections": []}]}]}}
{"id": "R45665", "title": "Civil Rights at School: Agency Enforcement of Title VI of the Civil Rights Act of 1964", "released_date": "2019-04-04T00:00:00", "summary": ["Title VI of the Civil Rights Act of 1964 prohibits federally funded programs, activities, and institutions from discriminating based on race, color, or national origin. In its current form, largely unchanged since its adoption, Title VI incorporates a number of unique features. Besides barring federally funded programs from discriminating based on race, Title VI also authorizes and directs all federal funding agencies to promulgate rules effectuating that nondiscrimination mandate. Those rules were also made subject to presidential approval, an authority since delegated to the Attorney General by executive order. To enforce Title VI, agencies also have at their disposal a uniquely powerful tool: the termination or refusal to provide federal financial support to an institution or program seeking it. Although this power to withdraw federal funds was envisioned as the primary mechanism for enforcing Title VI, that authority was also hedged with a range of procedural requirements designed to spur agencies to resolve complaints against recipients through voluntary agreements.", "In the 50 years since Title VI became law much of the debate over the statute has centered on how the courts have read its two central provisions\u2014Sections 601 and 602\u2014and how federal agencies have gone about enforcing them. In the courts those debates have especially focused on what counts as unlawful \"discrimination\" under Section 601. The courts have long agreed that Title VI bars federally funded programs from intentionally singling out individuals by race for adverse treatment. In its first case involving Title VI the Supreme Court suggested that Section 601 might also reach beyond intentional discrimination to bar the use of policies with a disparate impact\u2014policies that, irrespective of the intent, impose a discriminatory effect on different racial groups. With its 2001 ruling in Alexander v Sandoval, the Court appeared to put that interpretive question to rest: Title VI directly prohibits only intentional discrimination.", "For the agencies charged with enforcing Title VI, the primary concerns have tended to be more operational and programmatic\u2014how to go about the business of reviewing and assessing particular practices under Section 602 of the statute. Section 602 authorizes and directs agencies to issue regulations \"effectuat[ing]\" Section 601. The breadth of that authority has produced a further point of uncertainty about the statute: what limits are there to funding agencies' rulemaking authority under Title VI? So far, two divergent views have emerged from the Court's decisions: (1) a largely deferential view that would give agencies leeway to issue prophylactic rules reaching conduct beyond intentional discrimination, and (2) a more exacting view under which agencies may redress only provable cases of intentional discrimination.", "Although Title VI's nondiscrimination prohibition accompanies nearly all awards of federal financial support, much of the statute's doctrine has been shaped by its use in the public schools. That doctrinal history has centered on one agency in particular: the Office for Civil Rights (OCR) in the U.S. Department of Education (ED). Title VI continues to play a central part in OCR's mission of protecting civil rights on campuses at all educational levels, and in institutions both public and private. OCR handles a large volume and variety of claims alleging race and national origin discrimination, which it administratively resolves through a series of investigative procedures laid out in its Case Processing Manual. Although the types of allegations OCR investigates vary, three major categories of complaint occupy much of its docket: disparate treatment, retaliation, and racial harassment.", "Congress has the ultimate say over how Title VI works\u2014rooted not only in its legislative power but in its authority to oversee the statute's enforcement. In recent years two questions surrounding Title VI have drawn particular congressional interest: the viability of disparate impact regulations under Section 602 and the possible inclusion of new protected classes in Section 601. No matter how Congress may choose to address those subjects, however, they are likely only to raise further questions about the future of this landmark civil rights law."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["With its adoption as part of the Civil Rights Act of 1964, Title VI invested the federal government with a uniquely powerful role in addressing race and national origin discrimination. Like other statutory provisions in the Civil Rights Act, Title VI seeks to end race discrimination among institutions and programs whose doors were otherwise open to the public\u2014especially public schools. But unlike the Civil Rights Act's better known and more heavily litigated provisions, Title VI is concerned specifically with the use of \"public funds,\" designed to ensure that federal dollars not be \"spent in any fashion which encourages, entrenches, subsidizes, or results in racial discrimination.\" And to fulfill that broad mandate, Title VI takes a distinctive approach to policing discrimination by making the promise of nondiscrimination a condition of the federal government's financial support. ", "Title VI consequently prohibits all federally funded programs, activities, and institutions from discriminating based on race, color, or national origin. Although that prohibition accompanies nearly all grants and contracts awarded by the federal government, much of Title VI's doctrine has been shaped by its use in the public schools. That doctrinal story has accordingly centered on one agency in particular: the Office for Civil Rights (OCR) in the U.S. Department of Education (ED). As this report explains, Title VI continues to play a central part in OCR's mission of protecting civil rights on campuses at all educational levels, and in institutions both public and private. ", "This report begins by briefly tracing Title VI to its historical and conceptual roots in the federal spending power, and explains how the early understanding of that power shaped the various legislative proposals that ultimately became Title VI. The report then examines the central doctrinal question behind the statute: what exactly Title VI outlawed by prohibiting \"discrimination\" among federally funded programs, and what agencies are therefore allowed to do in order to enforce that prohibition. The report then turns to ED's OCR, briefly reviewing how that agency goes about the day-to-day work of enforcing Title VI in schools, and concludes by surveying two recent developments related to Title VI, along with some considerations should Congress wish to revisit this landmark civil rights law. Because this report focuses specifically on how OCR has come to understand and enforce Title VI, it does not directly discuss litigation under the statute, whether filed by a private party or by the U.S. Department of Justice following a referral from OCR, though many of the substantive legal standards overlap."], "subsections": []}, {"section_title": "Title VI of the 1964 Civil Rights Act: Origins and Overview", "paragraphs": [], "subsections": [{"section_title": "Leveraging the Spending Power: The Origins of Title VI", "paragraphs": ["By the time Title VI was being seriously debated in 1964, its basic premise\u2014that federal dollars should not go to support programs or institutions that discriminate based on race\u2014was already familiar. In 1947, nearly a decade before the Supreme Court declared an end to the de jure segregation of the public schools in Brown v. Board of Education , President Truman's Committee on Civil Rights had already sketched out the basic pattern for Title VI, calling for \"establishment by act of Congress or executive order\" of a federal office to review \"the expenditures of all government funds,\" so that none would go to subsidize discrimination based on race, color, creed, or national origin. Several years later, in 1953, President Eisenhower was also expressing dismay at the \"discrimination in expenditure of [federal] funds as among our citizens.\" And Brown , decided the next year, put even more pressure on the federal government to begin leveraging its funds to combat discrimination \u2014first in the public schools, but possibly also on a wider scale. ", "The early years of the Kennedy Administration saw some of the first steps in that direction. Early on in his tenure, for example, Abraham Ribicoff, then the Secretary of Health, Education, and Welfare (HEW), refused to locate the department's summer teacher-training institutes at \"any college or university that declined to operate such institutes without discrimination.\" In a related decision, HEW later moved to withdraw support from segregated schooling on military bases as well. Those steps led others in the Administration, like then-Attorney General Robert Kennedy, to publicly suggest that the federal funds might be used on a wider scale, \"to persuade southern states to alter their racial practices\" more generally. ", "These early uses of the federal spending power to redress race discrimination had their limits, however. After leaving HEW for the U.S. Senate, Ribicoff explained during the floor debate over Title VI that, while at HEW, he had frequently \"found [his] authority to act was questionable, and in some instances ... limited by the explicit wording of congressional enactments.\" A number of Kennedy Administration officials evidently shared that view, with some publicly questioning whether the executive branch had authority to withhold money appropriated by Congress or condition disbursement on terms not found in underlying funding authorities. This view \"did not go unchallenged,\" as civil rights leaders made clear during the House hearings on the bill; nor has it received a definitive judicial ruling since. But with the risk of a bruising, possibly fatal, legal challenge looming over unilateral executive action, it \"became clear\" to Administration officials \"that administrative action alone could not solve the entire problem.\" ", "Congressional action, by contrast, seemed to face far fewer legal constraints. In several earlier decisions the Supreme Court had established that Congress unambiguously had the right under the Spending Clause to condition the receipt of appropriated funds on the terms of its choosing, even in areas traditionally left to the regulation of the states. Congress was therefore free to do by legislation what the executive branch could only questionably have done on its own: make nondiscrimination a condition for receiving federal financial support."], "subsections": []}, {"section_title": "Title VI: An Overview", "paragraphs": ["The final legislative resolution, reached after a period of protracted debate, was Title VI. The legislation went through a number of significant alterations from the measure originally proposed by the Kennedy Administration, many of which sought to address fears of potential administrative abuse by layering agencies' enforcement power with procedural protections for funding recipients. But the basic pattern suggested by the Committee on Civil Rights some 20 years earlier\u2014making nondiscrimination a condition for federal financial support\u2014remained the same. In its final form, largely unchanged since its adoption, Title VI incorporates five basic features relevant to this report:", "1. Nondiscrimination Mandate . Title VI bars any federally funded \"program or activity\" from discriminating against a \"person in the United States\" based on his or her \"race, color, or national origin.\" 2. Imp lementing Rules , Regulations , and Orders . All federal funding agencies are \"authorized and directed\" to promulgate rules, regulations, or orders of general applicability \"effectuat[ing]\" that nondiscrimination mandate. 3. Approval of Implementing Rules, Regulations, and Orders . Any rule, regulation, or order issued under Title VI was made subject to presidential approval, an authority since delegated to the Attorney General by executive order. 4. Agency Enforcement . To enforce Title VI an agency could resort to either of two measures: (1) the termination or refusal to provide federal financial assistance to an institution or program seeking it; or (2) \"any other means authorized by law,\" now understood to be a lawsuit brought by the Attorney General seeking a recipient's compliance with Title VI. 5. Procedural Requirements Related to Agency Enforcement . Though an agency's withdrawal of federal funds was envisioned as the primary mechanism for enforcing Title VI, that authority was hedged with a range of procedural requirements designed to spur agencies into seeking consensual resolutions with recipients.", "Each of these statutory features is explained below, including how they have come to be understood since Title VI's passage and the role they play in addressing racial discrimination at school. "], "subsections": []}]}, {"section_title": "Defining \"Discrimination\" Under Title VI", "paragraphs": ["Title VI revolves around a single sentence-long prohibition, found in Section 601 of the law, providing that \"[n]o person in the United States\" may be \"subjected to discrimination\" by a \"program or activity\" that receives federal financial assistance based on his or her \"race, color, or national origin.\" Plainly that prohibition outlaws racial \"discrimination\" in all federally funded programs. It does not define, however, the sorts of practices Title VI thereby excludes. And with the legislative history on this point inconclusive at best , the task of providing a workable definition has been left to the agencies charged with enforcing Title VI and, ultimately, to the courts. As explained below, however, with its 2001 decision in Alexander v. Sandoval , the Supreme Court appears to have put the basic interpretive question to rest: Section 601 directly prohibits only intentional discrimination ."], "subsections": [{"section_title": "Banning Intentional Discrimination (Disparate Treatment)", "paragraphs": ["Despite Title VI's basic ambiguity, the courts have long agreed that, at a minimum, Section 601 bars federally funded programs from intentionally singling out individuals for adverse treatment because of their race. This sort of intentional discrimination is commonly known as disparate or different treatment . And it can be proved in either of two ways: (1) directly, by pointing to a policy or decision that expressly singles out individuals by race, or (2) indirectly, by providing circumstantial evidence that a discriminatory motive was likelier than not responsible for the alleged mistreatment."], "subsections": [{"section_title": "Disparate Treatment: Direct Evidence", "paragraphs": ["Perhaps the clearest way a program may discriminate along racial lines is by expressly singling out individuals by race for adverse treatment. Thus, for example, a school that explicitly excludes students from an assembly by race will clearly have discriminated in this intentional sense. And because the \"discrimination\" involved appears on the face of the policy or decision itself, proving a violation of Title VI becomes that much more straightforward: to prevail, the aggrieved party generally need only establish that the discriminatory policy existed and was used against him. "], "subsections": []}, {"section_title": "Disparate Treatment: Circumstantial Evidence", "paragraphs": ["Although still litigated, over the years such facially discriminatory policies and decisions have grown less common\u2014a shift widely attributed to laws like the 1964 Civil Rights Act. As a result, the more usual case today instead involves allegations of racially motivated mistreatment under a policy or decision that, at least on its face, is race-neutral. ", "Thus, for example, an African American student might still plausibly allege that a school official discriminated against him based on his race by disciplining him more severely than his white classmates for substantially the same misconduct, even though neither the discipline policy nor the disciplining official made any mention of his race. In such cases, the \" form of the governmental action\"\u2014the literal wording of the policy used or the decisionmaker's explanation\u2014is not at issue. What matters is why the individuals alleging mistreatment received the treatment they did; whether, that is, a discriminatory intent shaped the allegedly discriminatory decision. Where the surrounding circumstances suggest that some such racial animus was likelier than not what motivated the adverse treatment, that treatment will amount to intentional discrimination, presumptively violating Title VI. "], "subsections": []}]}, {"section_title": "Banning Discriminatory Effects (Disparate Impact)", "paragraphs": ["Title VI has long been understood to bar federally funded programs from intentionally discriminating based on race. At least for the first few decades following its adoption, however, there was considerably more debate about whether Section 601 might also forbid policies that, while not purposefully discriminatory, nonetheless had a disparate effect on persons of different races. And in its first case involving Title VI\u2014 Lau v. Nichols \u2014the Supreme Court seemed to say exactly that. In its most recent encounter with disparate impact under Title VI, however, in Alexander v Sandoval , the Court squarely rejected Lau 's ruling on that point. Today, as a result, the only discrimination Title VI directly prohibits is intentional . "], "subsections": [{"section_title": "The Origin of Disparate Impact Under Title VI: Lau v. Nichols", "paragraphs": ["Lau was the Court's first encounter with Title VI, and it set the stage for much of the uncertainty about the statute that has followed. In Lau, non-English-speaking Chinese students had sued San Francisco's school system alleging that its policy of refusing bilingual or remedial English instruction effectively denied them the educational opportunities provided non-Chinese students, in violation of Title VI as well as the Equal Protection Clause of the Fourteenth Amendment. And in an unexpectedly unanimous ruling, the Court agreed\u2014albeit along two different lines of reasoning. ", "Relying \"solely\" on Section 601, five of the Justices, led by Justice Douglas, concluded that Section 601 barred discrimination \"which has [a discriminatory] effect even though no purposeful design is present.\" In that case the effect was clear: \"the Chinese-speaking minority receive[d] fewer benefits than the English-speaking majority\" from the city's schools. As recipients of federal educational dollars subject to Title VI, the school system had \"contractually\" obligated itself to reform its instructional policies to ensure the Chinese-speaking minority the same educational benefits as the English-speaking majority.", "Lau therefore seemed to imply that Section 601 directly outlawed policies with discriminatory effects , irrespective of their motivating intent\u2014a form of discrimination now commonly known as disparate impact . But the Court also mixed some uncertainty into that message. Immediately after saying that they were \"rely[ing] solely on [Section] 601\" in siding with the student plaintiffs, the majority in Lau turned to recite a regulation issued by HEW, specifically addressing what recipient school districts had to do under Title VI to ensure students with \"linguistic deficiencies\" had the same \"opportunity to obtain the education generally obtained by other students in the system.\" That discussion drew a contrasting concurrence from three other Justices, all of whom agreed that the student should prevail under a disparate impact theory, but believed that the proper basis for that theory\u2014and the result in favor of the students\u2014was HEW's regulation implementing Title VI, not Section 601 itself. In all, though, eight Justices in Lau put down a marker in favor of disparate impact under Title VI, five seemingly under Section 601. And so, whatever the vagaries in its rationale, Lau 's basic message seemed clear: Title VI barred not just intentional discrimination, but policies with a disparate impact as well."], "subsections": []}, {"section_title": "Limiting Lau", "paragraphs": ["Only a few years after handing down Lau , in its landmark ruling in Regents of the University of California v. Bakke , the Court appeared to reverse course. Bakke involved a white applicant's challenge to the affirmative action admissions policy then in use at the University of California at Davis's medical school. And like the Chinese students in Lau , Bakke objected to that policy on both constitutional and statutory grounds. To dispose of his challenge the Justices therefore had to confront the question they effectively avoided in Lau : how does Section 601's nondiscrimination mandate relate to the Fourteenth Amendment's Equal Protection Clause? None of the opinions in Bakke commanded a clear majority, but in separate opinions, five of the Justices, separately sifting through the legislative record, arrived at the same answer: Title VI's drafters intended Section 601 to \"enact[] constitutional principles,\" and nothing more. Title VI, in their view, therefore \"proscribe[d] only those racial classifications that would violate the Equal Protection Clause\" \u2014policies that the Court had already said must involve more than just a racially disparate impact, but a provable discriminatory intent as well. ", "In the decades since Bakke , the Court continued to divide over the basic ambiguity in Title VI\u2014over exactly what sort of \"discrimination\" Section 601 outlawed. By the time Title VI returned to the Court in 2001, however, with Alexander v. Sandoval , a unified five-Justice majority appeared to settle on a more definite view. ", "As Justice Scalia explained for the Sandoval majority, despite the lingering \"uncertainty regarding [Title VI's] commands,\" it seemed \"beyond dispute\" at that point that a policy with only a disparate impact did not violate Section 601. Tallying the votes in Bakke seemed to make that clear enough: on that statutory point, five Justices in Bakke explicitly agreed that Title VI should be read coextensively with the Equal Protection Clause. And as claims under that constitutional provision had already been limited to cases of provable discriminatory intent, the Sandoval majority thought it stood to reason that claims under Title VI had to be so limited as well. ", "The difficulty, however, was Lau . There, after all, the Court seemed to say that Section 601 did prohibit policies with a racially disparate impact, irrespective of whether those effects were intentional. But as the Sandoval majority saw it, Bakke had effectively resolved that difficulty as well: to the extent Lau rested on Section 601 directly\u2014rather than HEW's regulations \u2014the majority in Lau had simply misread Title VI. The only discrimination Title VI directly outlawed, according to the votes in Bakke , was intentional. As far as the Sandoval Court was concerned, to the extent Lau disagreed with Bakke , Lau had already been \"rejected.\""], "subsections": []}]}]}, {"section_title": "Regulating \"Discrimination\" Under Title VI", "paragraphs": ["In Sandoval the Court appeared to resolve the basic ambiguity in Title VI: the statute's central nondiscrimination mandate\u2014Section 601\u2014outlaws only intentional discrimination. But saying that much, the Sandoval majority also acknowledged, did not speak to whether policies with a disparate impact might still be barred by regulations issued under the rulemaking grant found in Section 602 of Title VI . Section 602, as noted, directs agencies to promulgate regulations \"to effectuate\" the antidiscrimination prohibition of Section 601 \"consistent with achievement of the objectives of the statute.\" And pursuant to that directive, all Cabinet-level federal funding agencies, along with many smaller agencies, have since issued rules and guidance under Title VI outlawing disparate impact discrimination. As this section explains, however, Sandoval seems to have placed narrower limits on what funding agencies may redress through regulations under Section 602, arguably constraining them to redress in their rulemakings the same forms of intentional discrimination outlawed by Section 601."], "subsections": [{"section_title": "Rulemaking Under Title VI: Section 602", "paragraphs": ["In the courts, and especially the Supreme Court, much of the fight over Title VI has focused on definitions\u2014what in general terms will count as unlawful \"discrimination\" under Section 601. But for the agencies charged with actually enforcing that mandate the primary concerns have tended to be more operational and programmatic: how to go about the business of reviewing and assessing particular practices under Title VI. To address those concerns, funding agencies have therefore had to look beyond the bare substantive standard in Section 601 to their rulemaking authority under Section 602. ", "Section 602 is at once a source of authority and a command, \"authoriz[ing] and direct[ing]\" every federal funding agency to \"effectuate\" Section 601's nondiscrimination mandate \"by issuing rules, regulations, or orders of general applicability consistent with\" the \"objectives\" of its underlying funding authority. Every Cabinet-level department, among many other smaller agencies, has since done so. And given DOJ's unique coordinating authority over Title VI, those funding agencies have generally followed the rules DOJ developed for HEW in 1964, including its regulation outlawing disparate impact discrimination . ", "Like the nondiscrimination provision in Section 601, the rulemaking authority provided by Section 602 was made deliberately broad. That breadth has produced a further point of uncertainty about the statute: what limits are there to agencies' rulemaking authority under Section 602? The Supreme Court, for its part, has never squarely addressed that question, nor the validity of the disparate-impact regulations in particular. And as explained below, the resulting ambiguity has yielded two contrasting views of what Section 602 will allow an agency to outlaw as unlawful \"discrimination\" under Title VI: (1) a largely deferential view that would give agencies broad leeway to issue \"broad prophylactic rules\" reaching conduct beyond intentional discrimination; and (2) a more exacting view under which agencies would be limited to redressing provable cases of intentional discrimination. "], "subsections": []}, {"section_title": "The Limits to Section 602: Two Views", "paragraphs": [], "subsections": [{"section_title": "1. The Reasonable-Relation View", "paragraphs": ["The earliest view of Title VI's rulemaking authority was also the most expansive. In his concurring opinion in Lau , Justice Stewart set out the basic theory: because Section 602 allows agencies to promulgate rules \"effectuat[ing]\" Section 601, HEW had the authority to enact any rule that broadly furthered the purpose of deterring \"discrimination\" in federally funded programs. All the courts would require, as a formal matter, is that any rules issued under Section 602 be \"reasonably related\" to the antidiscriminatory ambitions of the statute. Only two other Justices signed on to Justice Stewart's view in Lau , and it has never been adopted by a majority of the Court. But it also has never been squarely rejected by the Court either.", "This more expansive view of Section 602 appears nevertheless to rest on two arguable bases. The first comes down to basic principles of administrative law. As Justice Stewart noted in Lau , the Court has generally accorded considerable latitude to agencies authoring rules pursuant to generic rulemaking provisions, on the assumption that Congress intended to defer more particular legislative decisions to their expert judgment. And thus, when presented with such broad delegations\u2014permitting an agency, for example, to make \"such rules and regulations as may be necessary to carry out\" another statutory mandate \u2014the courts have traditionally been inclined to defer \"to the informed experience and judgment of the agency to whom Congress delegated appropriate authority.\" ", "Given its similarly expansive wording, Section 602 could be seen to embody much the same sort of broad rulemaking authority. In such cases, as Justice Stewart argued, and as some Justices later agreed, the test should be correspondingly lenient, asking only whether the agency's rule bears some reasonable relationship \"to the purposes of the enabling legislation.\" That leniency would arguably authorize an agency to issue \"broad prophylactic rules\" so long as they \"realiz[e] the vision laid out in\" Section 601\u2014as arguably would a rule outlawing policies with racially disparate impacts.", "Apart from principles of administrative law, this more expansive view of Section 602 might also find support in a constitutional analogy, based on two of the Reconstruction Amendments. As Justice Stevens pointed out in his dissent in Guardians Association v. Civil Service Commission , the Court had at one time indicated\u2014in a decision dating to \"the dawn of [the last] century\"\u2014that \"an administrative regulation's conformity to statutory authority was to be measured by the same standard as a statute's conformity to constitutional authority.\" And as it happened, only a few years before Guardians , the Court had read the Fifteenth Amendment, despite \"only prohibit[ing] purposeful racial discrimination in voting,\" to allow \"Congress [to] implement that prohibition by banning voting practices that are discriminatory in effect.\" Congress could do that, according to Justice Stevens, because the Fifteenth Amendment\u2014much like Title VI\u2014supplements its prohibition against racially discriminatory voting policies with a provision empowering Congress \"to enforce\" that prohibition \"by appropriate legislation.\" Given the structural similarity between the amendment and Title VI, Justice Stevens saw no reason why Section 602 should give federal agencies any less authority than the Fifteenth Amendment offers Congress\u2014including authority to outlaw policies with discriminatory effects.", "Justice Steven's view in Guardians , like Justice Stewart's in Lau , has never commanded a majority from the Court. That analogy may also have lost some force more recently, following the Court's arguably more restrictive decisions under the Fifteenth Amendment. But the Court has also never expressly ruled out the analogy, and it appears to be at least consistent with the way the federal courts have read another of the Reconstruction Amendments\u2014the Thirteenth, outlawing slavery and involuntary servitude. Whether that analogy would find favor among the Justices today seems at best uncertain, however, partly for the reasons discussed below."], "subsections": []}, {"section_title": "2. The View from Sandoval", "paragraphs": ["In opposition to the early expansive reading of Section 602, a number of other Justices\u2014and arguably a majority in Sandoval \u2014have suggested that regulations under Section 602 must instead fit more closely with the particular purpose of Section 601: ridding federally funded programs of intentional discrimination. Sandoval , given its posture, did not squarely address disparate impact rules under Title VI; that case concerned the right of private parties to sue under a Title VI disparate impact regulation, not the validity of the underlying regulation itself. But in a suggestive footnote in his opinion for the majority, Justice Scalia expressed some doubt that those regulations could be squared with the majority's view that Section 601 bars only intentional discrimination. ", "The majority's concern fastened less on the breadth of Section 602 than on the narrowness of Section 601. It seemed \"strange,\" Justice Scalia explained, that a rule prohibiting disparate impact could \"effectuate\" the purpose of Section 601 when that provision \"permits the very behavior that the regulations forbid.\" Or as Justice O'Connor had put the same point in her concurrence in Guardians , also involving a disparate impact claim under Title VI, it was \"difficult to fathom how the Court could uphold\" regulations outlawing discriminatory effects when, to do so, they would have to \"go well beyond \" Title VI's purpose of proscribing intentional discrimination. ", "The majority in Sandoval , like Justice O'Connor in Guardians , seemed to signal their dissatisfaction with the \"reasonably related\" test endorsed by Justice Stewart's concurrence in Lau . Neither, however, proposed a test to replace it. To do so, however, they may well have turned to a constitutional analogy of their own \u2014based not on the Fifteenth Amendment but the Fourteenth. ", "Under the Fourteenth Amendment, the Court has held that Congress may legislatively enforce that amendment's guarantees of equal protection and due process of law but in doing so may not redefine what would count as violating either . By that analogy, an agency could then clearly seek to enforce Section 601's bar against intentional discrimination by enacting prophylactic regulation \"congruent and proportional\" to redressing instances of different treatment . But the agency could not substantively amplify that prohibition by adding to the types of discrimination outlawed by Section 601\u2014as a disparate impact rule arguably would, given the Court's view in Sandoval that Section 601 does not bar a policy simply for having discriminatory effects."], "subsections": []}]}, {"section_title": "Unresolved Questions About Disparate Impact Under Section 602", "paragraphs": ["The Court has yet to squarely resolve which of these views of agencies' rulemaking authority under Section 602 is the right one. Regardless of which they choose, however, an agency arguably may still be able to defend its Title VI disparate impact regulations, depending on how it styles its enforcement under that regulation. ", "Even if Section 602 is construed narrowly to permit only regulations that address intentional discrimination, it might still be argued that Title VI allows agencies to promulgate regulations addressing disparate impact in at least some circumstances. As Justice Stevens pointed out dissenting in Sandoval , one way of looking at Title VI's disparate impact regulations is as an indirect rule against intentional discrimination\u2014only intentional discrimination in a \"more subtle form[],\" masked by an \"ostensibly race-neutral\" policy but with \"the predictable and perhaps intended consequence of materially benefitting some races at the expense of others.\" Styled that way, an agency might be able to defend its disparate impact rules as a means of \"counteract[ing] unconscious prejudices and disguised animus that escape easy classification as disparate treatment.\" In that sense, those rules would still be directed at \"uncovering discriminatory intent,\" even if only in subtler forms, such as \"covert and illicit stereotyping.\" And, for that reason, those rules would arguably also comply with Sandoval 's more exacting standard for Section 602 regulations, despite their formal focus on racial disparities. ", "Even if styled in this way, however, a disparate impact rule under Title VI would likely face further constraints. As the Court recently explained in the context of the Fair Housing Act, an agency relying on a disparate impact theory will still need to \"point to a defendant's policy or policies causing\" the \"statistical disparity\" at issue\u2014that the policy actually had racially discriminatory effects . And to make that showing, the agency may also need to satisfy a \"robust causality requirement,\" to \"ensure[] that [r]acial imbalance [] does not, without more, establish a prima facie case of disparate impact,\" protecting \"defendants from being held liable for racial disparities they did not create.\" What such a causality requirement might entail as a practical matter seems unclear at this point. Nevertheless, recasting the argument over Section 602 in these terms might help sharpen some of the debate around Title VI, by redirecting the discussion away from the abstract concerns about rulemaking authority to the more basic and concrete issue of what disparate impact liability may\u2014or may not\u2014involve. "], "subsections": []}]}, {"section_title": "Enforcing Title VI at School: The U.S. Department of Education's Office for Civil Rights", "paragraphs": ["Although Title VI applies to funds distributed by every federal agency, much of the doctrine under the statute has been shaped by its use in the public schools. That doctrinal story has accordingly centered on one agency in particular: the Office for Civil Rights (OCR), originally housed in HEW but today located in the U.S. Department of Education (ED). As the agency primarily responsible for enforcing Title VI in the public schools, as well as nearly all colleges and universities, OCR handles every year a large volume and variety of claims alleging race and national origin discrimination. Some of the most common types of those claims are discussed below, beginning first with a brief overview of how ED, as a matter of policy, processes the complaints it receives under Title VI. "], "subsections": [{"section_title": "OCR's Enforcement of Title VI", "paragraphs": ["OCR primarily enforces Title VI through its investigation and resolution of complaints. To guide its review of those complaints, OCR has published a detailed manual of procedures\u2014known as the Case Processing Manual (CPM)\u2014by which it receives, analyzes, and disposes of allegations under Title VI, among other statutes within its jurisdiction. That guidance document, described below, divides OCR's enforcement into five distinct phases:", "Jurisdictional Evaluation. At the first phase of its review, OCR evaluates an allegation for its basic sufficiency\u2014conducting an essentially jurisdictional analysis. As a part of that evaluation, OCR first examines whether an allegation has enough information in it, of the right kind. If so, OCR has to establish jurisdiction over both the subject matter of the complaint as well as the entity complained of. Thus, the allegation must state enough facts from which to infer race or national origin discrimination (subject matter jurisdiction), and the complainant must allege discrimination by a program or activity that receives ED's financial assistance (personal jurisdiction). And the allegation must also be timely: a complaint under Title VI generally must be filed with OCR within 180 calendar days of the date when the discrimination allegedly occurred. Insufficiency on any of these points may result in an allegation's dismissal without OCR's further investigation or review. ", "After determining that it has jurisdiction over an allegation and finds it otherwise suitable for review, OCR will formally open its investigation, beginning with the issuance of informational letters to both the complainant and recipient. Those letters primarily serve to notify the parties of the allegations OCR intends to investigate and the basis for its jurisdiction, including appropriate statutory and regulatory authority. The letters also apprise the parties of OCR's role in the investigation\u2014as a \"neutral fact-finder\"\u2014as well as the complainant's right to bring suit in federal court regardless of how OCR administratively resolves the complaint. ", "Facilitated Resolution. As a part of its opening letter, OCR will also inform the parties of its voluntary resolution process, called a \"Facilitated Resolution Between the Parties.\" Under that process, OCR may offer to serve as \"an impartial, confidential facilitator between the parties,\" to assist them in informally resolving the allegations before OCR formally makes any findings of its own. During those discussions OCR may accordingly suspend its investigation for up to 30 calendar days to allow negotiations to proceed in good faith; it will reinstate its investigation, however, should the parties fail to reach an agreement within that time. In no case, though, will OCR approve or otherwise endorse an agreement reached under this process, nor monitor a recipient's compliance with it. ", "Investigation. If the parties cannot voluntarily resolve the complaint through facilitated negotiation, OCR will proceed to investigate. At any time during that investigation\u2014which may involve OCR's review of school data, interviews with students and staff, or other measures\u2014the recipient may still choose to negotiate a voluntary resolution with OCR, and recent resolutions suggest that this is relatively common. In such cases, OCR will issue a resolution letter memorializing the allegations and its investigation, along with the agreement resolving them. In these cases, however, OCR will generally not make any findings on the underlying allegations. ", "In the event the recipient declines to negotiate a voluntary resolution, at the completion of its investigation OCR will issue findings on each allegation, resolving them by a preponderance of the evidence. In each case OCR will therefore explain why the evidence likelier than not supports the finding of a violation (\"non-compliance determination\") or else explain why it does not (\"insufficient evidence\"). In cases of non-compliance OCR will also propose a resolution agreement, outlining the steps for the recipient to take to resolve the allegations in question and ensure its future compliance with Title VI. A recipient generally has 90 days in which to consider and negotiate the terms of a final agreement with OCR. If the recipient and OCR fail to reach an agreement within that period, OCR will advise the recipient, by \"Letter of Impending Enforcement Action,\" that it intends to proceed to enforcement should the parties fail to reach an agreement in short order. ", "Monitoring. Once the sides have reached an acceptable resolution agreement, OCR will monitor, on an ongoing basis, the recipient's compliance with its terms. To do so, recipients generally must agree to certain reporting requirements, ensuring OCR access to \"data and other information in a timely manner\" by which it can assure the recipient's compliance. OCR also reserves the right to \"visit the recipient, interview staff and students, and request such additional reports or data as are necessary for OCR to determine whether the recipient has fulfilled the terms and obligations of the resolution agreement.\" In some instances OCR may also choose to amend or altogether end a resolution agreement \"when it learns that circumstances have arisen that substantially change, fully resolve, or render moot, some or all of the compliance concerns that were addressed by the resolution agreement.\"", "Enforcement Action. Where OCR cannot negotiate or secure compliance with an acceptable resolution agreement, it may resort to either of the two enforcement mechanisms allowed by Title VI: (1) an administrative proceeding resulting in the termination or refusal of federal funds; or (2) the referral of a complaint to DOJ for litigation. Fund termination, as noted, was envisioned as the primary mechanism for enforcing Title VI, and was once aggressively used by OCR to enforce the desegregation of southern schools. Over the past several Administrations its use appears to have waned significantly, perhaps owing to an increased reliance on resolution agreements, voluntary or otherwise, to achieve compliance."], "subsections": []}, {"section_title": "Major Areas of Administrative Enforcement", "paragraphs": ["OCR's administrative docket for Title VI is considerable, covering a wide variety of allegations involving race and national origin discrimination. Among the issues raised in those complaints, three appear especially common: different treatment, retaliation, and racial harassment. In 2016, for instance, OCR reported receiving some 2,400 total complaints raising issues under 17 general categories of Title VI violations. Of those, 976 alleged some form of different treatment, while another 569 complaints alleged race-based retaliation and a further 548 made claims of racial harassment. In 2015, OCR reported largely similar figures as well. The next section examines two recent examples of how OCR reviews complaints under Title VI, one involving a more typical allegation of indirect \"disparate treatment,\" and another posing a less typical allegation of direct discrimination."], "subsections": [{"section_title": "Different Treatment: Two Illustrations", "paragraphs": ["The single largest category of complaints OCR receives involves allegations of \"disparate treatment.\" That category covers a wide variety of conduct, covering any complaint that a recipient has singled out an individual or individuals by race for adverse treatment. Of those complaints two types are especially common: \"intentionally disciplining students differently based on race\" or else excluding them in some way. As noted, OCR will seek to confirm those allegations in either of two ways: either directly, by looking to evidence of overt discriminatory intent, or else indirectly, by establishing that any \"apparent differences in the treatment of similarly-situated students of different races\" have no legitimate, nondiscriminatory basis. And because Title VI has been read to overlap with the Equal Protection Clause, even where OCR believes a recipient has treated individuals differently by race, it still has to assess whether that treatment was a \"narrowly tailored\" means of \"meet[ing] a compelling governmental interest.\" "], "subsections": [{"section_title": "Disparate Treatment: Circumstantial Evidence", "paragraphs": ["In one recent example, OCR received a complaint from an African American student, identified only as \"Student A,\" alleging that he had been disciplined more severely than his white classmates, in violation of Title VI. As in many disciplinary cases, the student did not produce direct evidence of discrimination. And so OCR instead looked to whether there were any \"apparent differences\" in the way the school treated Student A from the way it handled \"similarly-situated students of different races,\" and if so, whether those differences had a legitimate, nondiscriminatory basis.", "In the course of its investigation, OCR uncovered what it believed were four apparent differences in the way the school treated Student A. First, the school had repeatedly recorded disciplinary warnings it gave Student A, but \"did not consistently record warnings given to similarly situated white students.\" Second, even though \"the Principal employed an informal progressive discipline policy\" that was applied to Student A, \"increasing the severity of the disciplinary consequence after each incident,\" a \"similarly situated white student who had a more extensive disciplinary history, did not face increasingly severe disciplinary consequences.\" Third, the evidence suggested that the school's principal \"responded more favorably\" to allegations made by a white student's mother than Student A's mother \"that other students were teasing him to entice him to engage in misconduct.\" And, finally, Student A had pointed to a specific case where a white male student had been treated more leniently for assaulting another student. ", "The school, for its part, sought to defend some of those decisions by pointing to differences in the students' misconduct. OCR, however, disagreed: according to its investigators, the students' files bore out no meaningful differences besides the students' race. Nor did OCR accept the school's admission that in the other cases it had simply made a mistake: the quantity, frequency, and variety of those mistakes, OCR found, \"established a pattern of unjustified, discriminatory treatment on the basis of race in the discipline administered to Student A.\" That was enough, OCR concluded, to violate Title VI and its implementing regulations. "], "subsections": []}, {"section_title": "Disparate Treatment: Direct Evidence", "paragraphs": ["Another recent case, also involving an allegation of disparate treatment, illustrates how OCR reads Title VI against the backdrop of the Equal Protection Clause. That case arose in the wake of events in Ferguson, MO, in 2014, following the fatal police shooting of an 18-year-old African American that provoked widespread protests in Ferguson and elsewhere. In response to the events there, an Illinois public school had decided to convene a special \"Black Lives Matter\" assembly, so that \"black students [could] express their frustrations\" in \"a comfortable forum.\" To do that, however, the school chose to \"limit the assembly to participation by students who self-identified as black.\" That decision, as the school district later admitted, clearly amounted to different treatment\u2014excluding some students while admitting others solely based on whether they identified as African American. That finding alone, though, did not decide the school's liability under Title VI. Instead, OCR had to go on to examine whether the school's decision would satisfy constitutional requirements\u2014whether the school had an \"interest in holding a racially exclusive assembly [that] was compelling and that the means [it] used [would] survive strict scrutiny.\" Looking to relevant constitutional precedent, OCR ultimately sided with the complainant: even though the school did have a compelling interest in holding a racially exclusive assembly, it had nevertheless failed \"to assess fully whether there were workable race-neutral alternatives\" or to \"conduct a flexible and individualized review of potential participants.\" The school had therefore violated Title VI, according to OCR. And to resume compliance, the school district agreed not to allow similarly exclusive assemblies again. "], "subsections": []}]}]}]}, {"section_title": "Considerations for Congress", "paragraphs": ["Title VI has gone largely unchanged in the 50 years since it became law. As this report has explained, the debates over the statute have therefore centered on how the courts have read its two central provisions\u2014Sections 601 and 602\u2014and how federal agencies have gone about enforcing them. But Congress has the ultimate say over how Title VI works\u2014rooted not only in its legislative power but in its authority to oversee the statute's use by federal agencies. As this section explains, recently two issues over the statute have drawn particular congressional interest: the viability of disparate impact regulations under Section 602, and the inclusion of new protected classes in Section 601.", "As explained earlier, with its 2001 decision in Alexander v. Sandoval , the Court seemed to cast doubt on the future of all disparate impact liability under Title VI as currently written, even when liability was premised on regulations issued under Section 602. In the last several months, following the release of a widely remarked report on school safety, the Trump Administration signaled that it may be rethinking altogether Title VI regulations that reach beyond intentional discrimination to address policies with a racially disparate impact. Given the continuing debate about the relation of Title VI's central provisions, Congress could opt to put down its own marker, by definitively clarifying Title VI's scope in either of two ways. On the one hand, Congress could make clear that Section 601 indeed prohibits only intentional discrimination, and that any rules under Section 602 may not find a recipient liable for discrimination absent proof of discriminatory intent. Congress, on the other hand, could expressly endorse disparate impact under Title VI by, for example, grafting that standard onto Section 601, as it has done in Title VII of the 1964 Civil Rights Act. That addition would unambiguously allow funding agencies to investigate policies and practices under Title VI based on their discriminatory effects, regardless of the underlying intent.", "In addition to clarifying the types of discrimination Title VI outlaws, Congress could also choose to revise the classes of individuals who come within its protection. One recent proposal, for example, would amend Section 601 to include \"sex (including sexual orientation and gender identity)\" along with race, color, and national origin among its protected classes. Although that or a similar amendment would clearly expand Title VI's coverage, its effects will likely hinge on how the courts choose to interpret Section 601 in light of such additions. Though a complete analysis lies beyond the scope of this report, at least two readings seem arguable. ", "On the one hand, the courts could continue to read Section 601 to \"enact[] constitutional principles,\" in which case they would presumably review claims based on sex discrimination under a heightened standard of review, while in the case of gender identity, possibly only for basic rationality. On the other hand, to the extent that an amendment introduces a statutory protection for a class of individuals not currently recognized by the Court as a constitutionally \"suspect classification,\" that addition, especially if buttressed by supporting legislative history, could suggest that Congress had decided to amend the reach of Title VI altogether, to \"independently proscribe conduct that the Constitution does not.\" "], "subsections": []}, {"section_title": "Conclusion", "paragraphs": ["In the 50 years since becoming law Title VI has played a central role in addressing racial discrimination in the nation's schools. Title VI provides that protection in a unique way: by making the promise of nondiscrimination a condition for any program or institution that receives federal financial support. For much of its history, the debates over Title VI have fastened on two basic ambiguities in the statute: the kind of \"discrimination\" Title VI was meant to outlaw and the types of rules a funding agency could issue to effectuate that prohibition. The Supreme Court appears to have definitively resolved the first of those ambiguities: because Title VI simply \"enacts constitutional principles,\" as currently written, it prohibits only intentional discrimination. And on that basis the Court has suggested, but not definitively ruled on, how it might resolve the second ambiguity as well: to effectuate Title VI's purpose, an agency may outlaw only policies resulting from a provable discriminatory intent, not simply having a racially discriminatory effect. ", "Whether the Court will turn that suggestion into a holding remains to be seen. Until then, however, federal agencies like OCR will likely continue to enforce Title VI consistent with constitutional standards that the Court has since read into the statute. In OCR's case, that enforcement work is already considerable, involving thousands of complaints every year culminating in significant resolutions across a wide range of schools and institutions of higher education. And in the background remains ED's ultimate authority under Title VI\u2014to withdraw its financial support from any program or institution that refuses to comply with the statute's command that all individuals be treated equally, regardless of their race."], "subsections": []}]}}
{"id": "RS21513", "title": "Kuwait: Governance, Security, and U.S. Policy", "released_date": "2019-03-04T00:00:00", "summary": ["Kuwait has been pivotal to the decades-long U.S. effort to secure the Persian Gulf region because of its consistent cooperation with U.S. military operations in the region and its key location in the northern Gulf. Kuwait and the United States have a formal Defense Cooperation Agreement (DCA), under which the United States maintains over 13,000 military personnel in country and prepositioned military equipment in Kuwait to project power in the region. Only Germany, Japan, and South Korea host more U.S. troops than does Kuwait, which hosts the operational command center for U.S.-led Operation Inherent Resolve (OIR) that has combatted the Islamic State.", "Kuwait usually acts in concert not only with the United States but also with allies in the Gulf Cooperation Council (GCC: Saudi Arabia, Kuwait, United Arab Emirates, Qatar, Bahrain, and Oman). Kuwait is participating militarily in the Saudi-led coalition that is trying to defeat the Shia \"Houthi\" rebel movement in Yemen, but Kuwait tends to favor mediation of regional issues over the use of military force. Kuwait is trying to mediate a resolution of the intra-GCC rift that erupted in June 2017 when Saudi Arabia and the UAE moved to isolate Qatar. Kuwait has refrained from intervening in Syria's civil war, instead hosting donor conferences for victims of the Syrian civil conflict, Iraq's recovery from the Islamic State challenge, and the effects of regional conflict on Jordan's economy. Kuwait generally supports U.S. efforts to counter Iran and has periodically arrested Kuwaiti Shias that the government says are spying for Iran, but it also engages Iran at high levels. U.S. government reports have praised recent steps by Kuwait to counter the financing of terrorism, but reports persist that wealthy Kuwaitis are still able to donate to extreme Islamist factions in the region. Kuwait has consistently engaged the post-Saddam governments in Baghdad in part to prevent any repeat of the 1990 Iraqi invasion of Kuwait.", "Experts have long assessed Kuwait's political system as a potential regional model for its successful incorporation of secular and Islamist political factions, both Shia and Sunni. However, this assessment has evolved since 2011 because Kuwait has followed other GCC states in incarcerating and revoking the citizenship of social media and other critics. Kuwait's political stability has not been in question but long-standing parliamentary opposition to the ruling Sabah family's political dominance has broadened in recent years to visible public pressure for political and economic reform. Parliamentary elections in July 2013 produced a National Assembly amenable to working with the ruling family, but the subsequent elections held in November 2016 returned to the body Islamist and liberal opponents of the Sabah family who held sway in earlier assemblies. Assembly oppositionist challenges to government policy led to a cabinet resignation in early November 2017, although the current cabinet does not differ much from the previous cabinet on key policy questions. Kuwait has increased its efforts to curb trafficking in persons over the past few years.", "Years of political paralysis contributed to economic stagnation relative to Kuwait's more economically vibrant Gulf neighbors such as Qatar and the United Arab Emirates (UAE). Like the other GCC states, Kuwait has struggled with reduced income from oil exports during 2014-2018. Kuwait receives negligible amounts of U.S. foreign assistance, and has offset some of the costs of U.S. operations in the region since Iraq's 1990 invasion of Kuwait."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Governance", "paragraphs": ["Kuwait's optimism after the 2003 fall of its nemesis, Saddam Hussein, soured after the January 15, 2006, death of Amir (ruler) Jabir Ahmad al-Jabir Al Sabah. From then until 2013, Kuwait underwent repeated political crises that produced economic stagnation. "], "subsections": [{"section_title": "Leadership Structure", "paragraphs": ["Under Kuwait's 1962 constitution, an Amir (Arabic word for prince, but which is also taken as \"ruler\") is the head of state and ruler of Kuwait. He is Commander-in-Chief of the Armed Forces, appoints all judges, and can suspend the National Assembly. The Amir appoints a Prime Minister as head of government, who in turn appoints a cabinet. The Prime Minister has always been a member of the Sabah family, and until 2003 the Prime Minister and Crown Prince/heir apparent posts were held by a single person. It is typical of Kuwaiti cabinets that most of the key ministries (defense, foreign policy, and finance) are led by Sabah family members. ", "At the time of Amir Jabir's death, his designated successor, Shaykh Sa'ad bin Abdullah Al Sabah, was infirm. A brief succession dispute among rival branches of the ruling Al Sabah family was resolved with then-Prime Minister Shaykh Sabah al-Ahmad al-Jabir Al Sabah, the younger brother of the late Amir, becoming Amir on January 29, 2006, although the long-standing tacit agreement to alternate succession between the Jabir and Salem branches of the family was suspended. Amir Sabah appointed two members of his Jabir branch as Crown Prince/heir apparent and as prime minister (Shaykh Nawwaf al-Ahmad Al Sabah and Shaykh Nasser al Muhammad al-Ahmad Al Sabah respectively). The succession dispute was unprecedented for the involvement of an elected legislature in replacing a Kuwait leader. ", "Amir Sabah tends to be more directly involved in governance than was his predecessor. He is 87 years old, but remains actively engaged in governing. Still, there reportedly is growing discussion within Al Sabah circles about the succession. The current Prime Minister, Shaykh Jabir al-Mubarak Al Sabah, has been in office since December 2011."], "subsections": []}, {"section_title": "Elected National Assembly", "paragraphs": ["The National Assembly, established by Kuwait's November 1962 constitution, is the longest-serving all-elected body among the Gulf monarchies. Fifty seats are elected, and up to 15 members of the cabinet serve in the Assembly ex-officio . The government has expanded the electorate gradually: in the 1990s, the government extended the vote to sons of naturalized Kuwaitis and Kuwaitis naturalized for at least 20 (as opposed to 30) years. Kuwaiti women obtained suffrage rights when the National Assembly passed a government bill to that effect in May 2005. In recent elections, about 400,000 Kuwaitis have been eligible to vote. ", "Kuwait's National Assembly has more scope of authority than any legislative or consultative body in the GCC states. It can draft legislation, rather than merely act on legislation introduced by the government. The Assembly does not confirm cabinet nominees (individually or en bloc), but it frequently questions ministers (\"grilling\"). It can, by simple majority, remove ministers in a vote of \"no confidence,\" and can oust a prime minister by voting \"inability to cooperate with the government.\" The Assembly reviews government decrees issued during periods of Assembly suspension. Kuwait's leaders have, on nine occasions (1976-1981, 1986-1992, 2003, 2006, 2008, 2009, 2011, 2012, and 2016), used their constitutional authority to dissolve the Assembly. Suspension mandates new elections within 60 days. Some oppositionists seek a constitutional monarchy in which an elected Assembly majority would name a Prime Minister, who would form a cabinet. "], "subsections": [{"section_title": "Political Factions in and Outside the National Assembly", "paragraphs": ["Political parties are not permitted, and factions compete in Assembly elections as \"currents,\" \"trends,\" or \"political societies.\" These factions also organize at a parallel traditional Kuwaiti forum called the diwaniyya \u2014informal evening social gatherings, hosted by elites of all ideologies. Factions in Kuwait generally group as follows. "], "subsections": [{"section_title": "Government Supporters", "paragraphs": ["\" T ribalists .\" Generally less educated but who dominate two out of the five electoral districts. At times, some tribalists in the Assembly have grouped into a faction widely referred to as \"service deputies\"\u2014members primarily focused on steering government largesse and patronage to their constituents. Shia s. Most Shias in the Assembly are Islamists, organized in a bloc called the National Islamic Alliance. These deputies tend to side with the government, perhaps out of concern about Sunni Islamists. Women . Elected women deputies have tended to align with the government. "], "subsections": []}, {"section_title": "Critics/Opponents", "paragraphs": ["\"Liberals. \" Highly educated and mostly secular elites, many of whom supported Arab nationalist movements in the 1960s and 1970s. In prior years adherents of this view banded together in the \"Kuwait Democratic Forum\" political society. Sunni Islamists . There are two major Sunni Islamist tendencies in Kuwait: supporters of the Muslim Brotherhood, and harder-line \"Salafists.\" Muslim Brotherhood supporters operate in Kuwait under a banner called the Islamic Constitutional Movement (ICM), with no record of violence. However, the government has sought to disband the Brotherhood's Kuwait charity arm, Islah . Youths . Since 2008, Kuwaiti youth groups have organized to support \"liberal\" deputies, using such names as the \"Orange Movement\" or \"Fifth Fence.\" These groups participated in street protests in Kuwait during the 2011 Arab uprisings. "], "subsections": []}]}]}, {"section_title": "Post-2006 Political Turmoil: Assembly Suspensions and Elections", "paragraphs": ["Disputes between the Al Sabah and oppositionists in the Assembly after Amir Jabir's death in 2006 manifested as repeated Assembly suspensions and elections, none of which has resolved differences over the power balance between the executive and the Assembly. "], "subsections": [{"section_title": "Elections during 2006-2009", "paragraphs": ["June 29, 2006, E lection . Five months after taking power, Amir Sabah suspended the Assembly in May 2006 to prevent oppositionists from questioning the Prime Minister over the government's refusal to reduce the number of electoral districts to 5 (from 25). The proposal sought to reduce \"vote buying\" and the effects of intratribal politics. In elections set for June 29, 2006, the opposition, backed by youths supporting the \"Orange\" banner, won 34 out of the 50 seats. Women were allowed to vote and run for the first time, but none of the 27 women won. After the election, the government reduced the number of electoral districts to 5. May 17, 2008 , Election . In March 2008, amid Assembly demands for government employee pay raises, the Amir dissolved the Assembly and set new elections for May 17, 2008. Sunni Islamists and conservative tribal leaders won 24 seats, and \"liberals\" won seven. Progovernment and other independent tribalists and Shias held the remaining 19 seats. No woman was elected. May 16, 2009 , Election . Amid an Assembly demand to question the Prime Minister for alleged misuse of public funds, the Amir suspended the Assembly and set elections for May 16, 2009. More than 20 new parliamentarians were elected, including 4 women (the first ever elected). Two votes of no confidence in the Prime Minister (in December 2009 and January 2011) failed, although the second vote was narrow (22 of the 50 Assembly deputies voted no confidence). "], "subsections": []}, {"section_title": "Arab Uprisings Intensify Political Strife", "paragraphs": ["The Arab uprisings that began in early 2011 broadened Kuwait's opposition. In January 2011, opposition deputies, supported by youths using names such as the \"Fifth Fence,\" forced the Interior Minister to resign for failing to prevent the torture to death of a man in custody. In March 2011, a Shia parliamentarian's request to \"grill\" the Foreign Minister about Kuwait's sending of naval forces to support Bahrain's Sunni minority government against a Shia-led uprising prompted a cabinet resignation and reshuffling. Following reports that two Kuwaiti banks had deposited $92 million into the accounts of several parliamentarians, thousands protested in September 2011, compelling the cabinet to adopt an anticorruption law. ", "On November 16, 2011, oppositionists in and outside the Assembly stormed the Assembly building, demanding the Prime Minister's resignation. On November 28, 2011, he did so, and the Amir appointed another royal family member, then-Defense Minister Shaykh Jabir al-Mubarak Al Sabah. He was sworn in without first naming a new cabinet, a technical constitutional breach. ", "February 2, 2012, Election . On December 6, 2011, Amir Sabah dissolved the National Assembly and set new elections for February 2, 2012 (within the mandated 60 days). About 20 opposition deputies competed as one \"Opposition Bloc,\" supported by youth leaders, advocating a fully elected government and legalization of political parties. Opposition candidates won 32 of the 50 seats, but none of the 19 woman candidates was elected. Turnout was about 62%. A leading opposition figure, Ahmad al-Sadun, returned to the Speaker post he held during 1985-1999, replacing the progovernment Jassim Al-Khurafi. The Prime Minister appointed four oppositionists to the cabinet. In June 2012, when the Assembly requested to grill the Interior Minister, the Amir exercised his authority, under Article 106 of the constitution, to suspend the Assembly for one month (renewable for two months, with the concurrence of the Assembly). December 2012 Election Triggered by Court Decision . On June 20, 2012, the constitutional court voided the December 2011 Assembly suspension on technical grounds and reinstated the May 2009 Assembly. The Amir set new elections for December 1, 2012, and decreed that each voter would cast a ballot for one candidate (per district), rather than four. In October 2012, an estimated 50,000-150,000 protesters called the decree an effort to complicate opposition efforts to forge alliances. The government responded by banning large public gatherings. A boycott by Sunni Islamist factions lowered turnout to 40% and produced a \"progovernment\" Assembly, including an unprecedented number of Shias (17). Three women were elected, as were some independent Sunni Islamists. Another Court-Triggered Election . On June 16, 2013, the Constitutional Court upheld the Amir's decree that each person would vote for only one candidate per district (see above), but dissolved the Assembly on the basis of improper technicalities in the Amir's election decree. New elections\u2014the sixth in five years\u2014were held on July 27, 2013, and eight women ran (out of 418 candidates registered). Several opposition groups, including the ICM, boycotted again, producing another progovernment Assembly that included nine Shias and several tribalists. Two women initially won seats, but a miscount deprived one of them of her seat, and the other resigned in 2014. Shaykh Jabir continued as Prime Minister, and his cabinet included one Shia and four Salafists. November 2016 Election . Public demonstrations generally subsided after 2013, and oppositionists indicated they would participate in the next Assembly elections. Citing \"circumstances in the region\" (an apparent reference to the Islamic State challenge and conflicts in Syria and Yemen), the Amir suspended the National Assembly and set new elections for November 26, 2016\u2014earlier than planned. Of the 454 candidates, 15 were women. The main opposition political societies participated, and the vote produced an Assembly roughly split between progovernment and opposition deputies. The State Department called the elections \"generally free and fair.\""], "subsections": []}, {"section_title": "Recent Developments", "paragraphs": ["Reflecting its altered balance of factions, the Assembly \"grilled\" the Prime Minister in 2017 for \"administrative regularities.\" To forestall further Assembly challenges, the Amir dissolved the cabinet in October 2017. A new government was appointed on December 11, 2017, with a policy outlook similar to that of the previous cabinet. The Amir's son was appointed First Deputy Prime Minister and Defense Minister. Two of the appointees were women\u2014the Minister of Social and Labor Affairs, and the Minister of State for Housing and for Services Affairs. The next National Assembly elections are due to be held in 2020. Elections for vacant seats are held periodically, including by-elections for two vacant seats to be held in March 2019. "], "subsections": []}]}, {"section_title": "Broader Human Rights Issues2", "paragraphs": ["On broad human rights issues, the State Department identifies the principal human rights problems in Kuwait as allegations of torture of detainees; political prisoners; restrictions on freedom of speech, including criminalization of criticism of government officials and defamation of religion; limited rights for a stateless population referred to as Bidoon s ; trafficking in persons; criminalization of male same-sex sexual activity; and reports of forced labor, especially among foreign workers. Since 2011, Kuwait's government has increasingly imprisoned and revoked the citizenship of social media critics for \"insulting the Amir,\" tarnishing Kuwait's reputation for political tolerance. In 2017, Kuwait also revived, after a four-year hiatus, the practice of executions by executing seven prisoners\u2014one of which was a member of the ruling family\u2014for capital offenses. Most were expatriates. ", "Of the 140 Gulf-based activists identified in November 2016 by Human Rights Watch as struggling against government repression, 44 are from Kuwait. Two of the most prominent independent human rights organizations in Kuwait are the Kuwait Society for Human Rights and the Kuwait Association for the Basic Evaluation of Human Rights, both of which have been allowed access to Kuwait's prisons. ", "U.S. democracy programs in Kuwait funds discussions with Kuwaiti leaders, public diplomacy, training civil society activists, enhancing the capabilities of independent Kuwaiti media, promoting women's rights, and providing a broad spectrum of educational opportunities. However, published readouts of most high-level U.S.-Kuwait meetings indicate that U.S.-Kuwait discussions focus mostly on security and regional issues. The National Endowment for Democracy, which obtains funds from the State Department, has in recent years given grants to Kuwaiti groups that promote civil society, human rights, women's rights, and the rights of noncitizens in Kuwait. "], "subsections": [{"section_title": "Women's Rights", "paragraphs": ["Women enjoy substantial, but not equal, rights in Kuwait. Women serve in national appointed positions and, since 2006, have been able to run and vote in National Assembly elections. Women in Kuwait can drive, and many women own businesses. An estimated 16% of the oil sector workforce is female. Women run several nongovernmental organizations, such as the Kuwait Women's Cultural and Social Society, dedicated to improving rights for women. ", "Still, Kuwait remains a traditional society and Islamists who want to limit women's rights have substantial influence. The law does not specifically prohibit domestic violence, although courts try such cases as assault. Kuwaiti women who marry non-Kuwaiti men cannot give their spouses or children Kuwaiti citizenship. Numerous international reports assert that violence, particularly against expatriate domestic workers, is frequent. Female police officers in public places combat sexual harassment. "], "subsections": []}, {"section_title": "Trafficking in Persons and Labor Rights5", "paragraphs": ["For eight years ending in 2015, Kuwait was designated by the State Department's Trafficking in Persons report as \"Tier Three\" (worst level). Kuwait's rating was assessed in the 2016, 2017, and 2018 reports as \"Tier 2: Watch List,\" on the grounds that it is making significant efforts to meet minimum standards for the elimination of trafficking in persons. The 2018 report credited Kuwait for implementing a labor law that prohibits employers from confiscating domestic workers' passports, increases penalties for employers who engage in unscrupulous recruiting practices, makes more aggressive efforts to investigate and prosecute traffickers, and funds a five-year national strategy to combat trafficking in persons. ", "Over many years, there have been repeated reports of beatings and rapes of domestic workers by their Kuwaiti employers, occasionally causing diplomatic difficulties for Kuwait. In July 2016, Kuwait set a minimum monthly wage for maids working in Kuwait, almost all of whom are expatriate women. In February 2018, following reports that a Filipina maid had been found dead in an apartment freezer in Kuwait, Philippines President Rodrigo Duterte barred travel by Philippines citizens to Kuwait. In April 2018, Kuwait expelled the Philippines' ambassador and recalled its ambassador from Manila. ", "Kuwait's labor laws protect the right of workers to form and join unions, conduct legal strikes, and bargain collectively, but contain significant restrictions. The government allows one trade union per occupation, but the only legal trade federation is the Kuwait Trade Union Federation (KTUF). Foreign workers, with the exception of domestic workers, are allowed to join unions. Since 2011, strikes have taken place among customs officers and employees of Kuwait Airways, and oil workers conducted a three-day strike in April 2016. In 2014, the government prevented a strike by Kuwait Petroleum Company employees by threatening to imprison strikers. "], "subsections": []}, {"section_title": "Status of Noncitizens and \"Stateless Persons\"(Bidoons)", "paragraphs": ["Non-Gulf Arabs, Asians, and stateless residents continue to face discrimination largely because of the perception that they are seeking to take advantage of generous Kuwaiti social benefits. The legal status of the approximately 100,000 stateless persons (\"bidoons,\" the Arabic word for \"without\"), who have no proof of citizenship but claim that they have lived in Kuwait for many generations, has vexed Kuwait for decades. The U.N. High Commission on Refugees (UNHCR) estimates that about 43,000 of the bidoons have a legitimate claim to citizenship. In March 2011, the government set a deadline of 2017 to resolve the status of the bidoons. That deadline was not met, although over the past few years, the government has been giving citizenship to small numbers of bidoons who were children of soldiers killed resisting the 1990 Iraqi invasion of Kuwait. In 2017, the government opened a hospital closed to noncitizens."], "subsections": []}, {"section_title": "Freedom of Expression and Media Freedoms", "paragraphs": ["Successive State Department human rights reports have asserted that the government does not always respect constitutional provisions for freedom of speech and the press. Governmental press censorship ended in 1992, fostering the growth of a vibrant press, but the Press and Publications Law establishes topics that are off limits for publication and discussion. Publishers and bloggers must be licensed by the Ministry of Information. Kuwait (and other GCC states) has increasingly used and enacted laws against the use of social media to criticize the government. Kuwait's penal code (Article 25) provides for up to five years in jail for \"objecting to the rights and authorities of the Amir or faulting him.\" In July 2015, Kuwait enacted a cybercrimes law that punishes insulting religious figures, criticizing the Amir, or harming Kuwait's relations with other countries. Since 2014, the government has revoked the citizenship of some naturalized Kuwaitis for criticizing the government, but Kuwait-born citizens cannot legally have their citizenship revoked. "], "subsections": []}, {"section_title": "Religious Freedom6", "paragraphs": ["Recent State Department religious freedom reports have noted little change in Kuwait's respect for religious freedoms. Of the 30% of Kuwait's population that are Shia Muslims, about half are Arabs originally from Saudi Arabia, and half are of Persian origin. Kuwaiti Shias are well represented in the rank and file of the military and security apparatus as well as government institutions, and are able to select their own clerics without government interference. A national unity law prohibits \"stirring sectarian strife,\" and the government continues to prosecute Sunnis for alleged violations. However, Kuwaiti Shias continue to report official discrimination, including limited access to religious education and places of worship. ", "In contrast to some of the other Gulf states, there is no registration requirement for religious groups, but all non-Muslim religious groups must obtain a license to establish an official place of worship. Religious groups are generally able to worship without interference. Members of these groups report difficulties obtaining permission to construct new facilities. Despite opposition from Kuwaiti Islamists, the government has licensed seven Christian churches to serve the approximately 750,000 Christians in Kuwait (almost all are expatriates): Protestant, Roman Catholic, Greek Catholic (Melkite), Coptic Orthodox, Armenian Orthodox, Greek Orthodox, and Anglican. Members of religions not sanctioned in the Quran\u2014including about 400 Baha'i's, 100,000 Buddhists, 100,000 Hindus, and 10,000 Sikhs\u2014are mostly noncitizens working in Kuwait. In addition to a few hundred Christians, there are some Baha'i citizens. "], "subsections": []}]}]}, {"section_title": "U.S.-Kuwait Relations and Defense Cooperation", "paragraphs": ["Kuwait was not strategically or politically close to the United States until the Iran-Iraq War (1980-1988), when Kuwait\u2014a backer of Iraq\u2014sought U.S. help against Iranian attacks. A U.S. consulate opened in Kuwait in October 1951 and was elevated to an embassy upon Kuwait's independence from Britain in 1961. Kuwait was the first Gulf state to establish relations with the Soviet Union in the 1960s, perhaps reflecting the political strength in Kuwait of relatively left-wing figures. Lawrence Robert Silverman is U.S. Ambassador to Kuwait. "], "subsections": [{"section_title": "Defense Cooperation Agreement (DCA), Strategic Dialogue, and Major Non-NATO Ally (MNNA) Status", "paragraphs": ["Iraq's invasion of Kuwait in August 1990, and the U.S. role in ending the Iraqi occupation, deepened the U.S.-Kuwait defense relationship. A formal bilateral Defense Cooperation Agreement (DCA) was signed on September 19, 1991, seven months after the U.S.-led expulsion of Iraqi forces from Kuwait in the 1991 Operation Desert Storm. The DCA had an initial duration of 10 years, but remains in effect. The text is classified, but reportedly provides for mutual discussions in the event of a crisis; joint military exercises; U.S. evaluation of, advice to, and training of Kuwaiti forces; U.S. arms sales; prepositioning of U.S. military equipment; and U.S. access to a range of Kuwaiti facilities. The DCA includes a Status of Forces Agreement (SOFA) that provides that U.S. forces in Kuwait be subject to U.S. rather than Kuwaiti law\u2014a common feature of such accords. ", "The visit of Amir Sabah to Washington, DC, on September 8, 2017, included convening of the second U.S.-Kuwait \"Strategic Dialogue,\" which reaffirmed the U.S. commitment to enhance Kuwait's military capabilities. During a December 3-5, 2017, visit to Kuwait, then-Defense Secretary James Mattis said that the U.S.-Kuwait military relationship is \"very close.\" The Amir has met with President Trump on three occasions, most recently September 5, 2018, focusing on regional issues including the U.S. concept of an anti-Iran Middle East Strategic Alliance (MESA). Another U.S.-Kuwait Strategic Dialogue meeting was to be held during Secretary of State Michael Pompeo's trip to the Gulf states in January 2019, but the Secretary was compelled to return to the United States before reaching Kuwait due to a death in his family.", "Kuwait's military has regained its pre-Iraq invasion strength of 17,000. U.S. officials say that the U.S. training and mentorship has improved the quality of the Kuwaiti military, particularly the Air Force. "], "subsections": [{"section_title": "U.S. Troops in Kuwait and Facilities Used", "paragraphs": ["Since the U.S. withdrawal from Iraq in 2011, there have been about 13,500 U.S. troops in Kuwait under the DCA \u2014constituting more than one-third of the 35,000 total U.S. forces in the Gulf. Defense Secretary Mattis noted during his December 2017 visit to Kuwait that only Germany, Japan, and South Korea host more U.S. forces than Kuwait does. The U.S. force includes Army combat troops, not purely support forces, giving the United States the capability to project ground force power in the region. Each spring, these forces participate in an annual three-week \"Eagle Resolve\" military exercise with forces from Kuwait and other GCC states. As discussed below, Kuwait hosts the headquarters for the U.S.-led operations against the Islamic State (Operation Inherent Resolve) and has made its military facilities available to coalition partners in that military campaign. ", "U.S. forces in Kuwait are stationed at several facilities that include Camp Arifjan (the main U.S. headquarters in Kuwait, 40 miles south of Kuwait City); a desert training base and firing range called Camp Buehring (near the border with Saudi Arabia); Ali al-Salem Air Base; Shaykh Ahmad al-Jabir Air Base; and a naval facility called Camp Patriot. Under the DCA, the United States maintains 2,200 Mine Resistant Ambush Protected (MRAP) vehicles in Kuwait. U.S. armor prepositioned in Kuwait was used for the 2003 invasion of Iraq. (In December 2005, U.S. forces vacated Camp Doha, the headquarters for U.S. forces in Kuwait during the 1990s.) "], "subsections": []}, {"section_title": "Major Non-NATO Ally Status", "paragraphs": ["Recognizing Kuwait's consistent and multifaceted cooperation with the United States, on April 1, 2004, the Bush Administration designated Kuwait as a \"major non-NATO ally (MNNA),\" a designation held by only one other Gulf state (Bahrain). The designation opens Kuwait to increased defense-related research and development cooperation with the United States, but does not expedite U.S. executive branch approval of arms sales to Kuwait. "], "subsections": []}]}, {"section_title": "Operational U.S.-Kuwait Defense Cooperation: 1987-2011", "paragraphs": ["The following sections discuss U.S.-Kuwait defense cooperation in recent regional conflicts. ", "Iran-Iraq War . During the Iran-Iraq War, Iran had sought to compel Kuwait to end its financial and logistical support for Iraq by striking Kuwaiti oil facilities, such as the Al Ahmadi terminal, with cruise missiles. In 1987-1988, the United States established a U.S. naval escort and tanker reflagging program to protect Kuwaiti and international shipping from Iranian naval attacks (Operation Earnest Will). As part of the skirmishes between the United States and Iran in the course of that operation, Iran attacked a Kuwaiti oil installation (Sea Island terminal). ", "Operation Desert Storm . Asserting that Kuwait was one of Iraq's key financiers during its fight against Iran in the Iran-Iraq War, Kuwait's leaders were shaken by the August 2, 1990, Iraqi invasion of Kuwait. Most experts believe that the invasion was a result of Saddam Hussein's intent to dominate the Persian Gulf. Iraq's occupation lasted until U.S.-led coalition forces of nearly 500,000 expelled Iraqi forces from Kuwait in \"Operation Desert Storm\" (January 16, 1991-February 28, 1991). Kuwait's leaders, who spent the occupation period in Saudi Arabia, were restored to power. Kuwait paid $16.059 billion to offset the U.S. incremental war costs.", "Iraq Containment Operations ( 199 1-2003 ) . After the 1991 war, about 4,000 U.S. military personnel\u2014and enough prepositioned U.S. armor to outfit two combat brigades\u2014were stationed at Kuwaiti facilities to contain Iraq. The 1992-2003 enforcement of a \"no fly zone\" over southern Iraq (Operation Southern Watch, OSW) involved 1,000 U.S. Air Force personnel deployed at Kuwaiti air bases. Kuwait contributed about $200 million per year for U.S. costs of these operations, and two-thirds of the $51 million per year U.N. budget for the 1991-2003 Iraq-Kuwait Observer Mission (UNIKOM) that monitored the Iraq-Kuwait border. Kuwait also hosted U.S. forces en route to participate in Operation Enduring Freedom in Afghanistan. ", "Operation Iraqi Freedom (OIF) and Post-Saddam Iraq . Kuwait supported the U.S. decision to militarily overthrow Saddam Hussein by hosting the bulk of the U.S. OIF force of about 250,000, as well as the other coalition troops that entered Iraq in March 2003. Kuwait closed off its entire northern half for weeks before the invasion; allowed U.S. use of two air bases, its international airport, and sea ports; and provided $266 million to support the combat. Kuwaiti forces did not enter Iraq. During 2003-2011, there were about 25,000 U.S. troops based in Kuwait, not including those deploying to Iraq, and Kuwait was the gateway for U.S. troops deploying to that war zone. According to Defense Department budget documents, Kuwait contributed about $210 million per year in similar in-kind support to help defray the costs incurred by the U.S. military personnel that rotated through Kuwait into or out of Iraq during 2003-2011. "], "subsections": [{"section_title": "Defense Cooperation with Other Countries/NATO Center", "paragraphs": ["Kuwait has supported efforts to promote greater military coordination among the GCC countries, including the GCC decision in 2013 to form a joint military command. Kuwait has also sought cooperation with other non-Arab U.S. partners. In December 2011, NATO and Kuwait began discussing opening a NATO center in Kuwait City as part of the Istanbul Cooperation Initiative (ICI) initiated in 2004. Kuwait joined the ICI in December 2004. The NATO center, formally titled the NATO-ICI Regional Center, opened on January 24, 2017, in a formal ceremony attended by NATO Secretary-General Jens Stoltenberg. On October 1, 2018, the NATO-ICI Regional Center held its first annual meeting to review the center's performance, discussing programs including maritime security, cybersecurity, and protection against the use of weapons of mass destruction. On November 26, 2018, Kuwait opened a diplomatic office at NATO. ", "In late November 2017, Kuwait signed an agreement with France to strengthen their defense cooperation. In November 2018, the two countries held ground forces exercises in Kuwait. As do the other manpower-short GCC states, Kuwait has enlisted some military help from Pakistan; in April 2014, Kuwait set up an office in Pakistan to recruit Pakistani trainers for Kuwaiti soldiers. "], "subsections": []}]}, {"section_title": "U.S. Arms Sales to Kuwait", "paragraphs": ["U.S. arms sales to Kuwait are intended, at least in part, to promote interoperability with U.S. forces. Kuwait is considered a wealthy state that can fund its own purchases. Kuwait has, in some years, received small amounts of U.S. assistance in order to qualify Kuwait for a discount to send its officers for training in the United States. As part of the U.S. effort to promote U.S. defense relations with the GCC as a whole, rather than individually, a December 16, 2013, Presidential Determination authorized U.S. defense sales to the GCC."], "subsections": [{"section_title": "Major U.S. Arms Sales to Kuwait", "paragraphs": ["U.S. arms sales have sought to enhance Kuwait's capability and the interoperability of its military with U.S. forces. Because of its ample financial resources, Kuwait is not eligible to receive U.S. excess defense articles. Major U.S. Foreign Military Sales (FMS) include the following:", "Missile Defense System s . In 1992, Kuwait bought five Patriot antimissile fire units, which were delivered by 1998. The system intercepted Iraqi missiles during the 2003 Iraq War. In July 2012, the Administration notified a sale of 60 Patriot Advanced Capability (\"PAC-3\") missiles and 20 Patriot launching stations, plus associated equipment, valued at $4.2 billion. Kuwait has not announced whether it will buy the more sophisticated Theater High Altitude Air Defense (THAAD) missile defense system that the United States has offered to the Gulf states. The United States also has deployed four U.S.-owned Patriot systems in Kuwait since the 1991 Gulf War, but the United States announced on September 26, 2018, that it was redeploying that system, as well as U.S. Patriots in Bahrain and Jordan, to areas pertinent to U.S. strategic competition with Russia and China. Combat Aircraft /F-18s . The core of Kuwait's fleet of combat aircraft is 40 F/A-18 combat aircraft Kuwait bought in 1992. In mid-2015, Kuwait asked to buy up to 40 additional F/A-18s, and the following year expressed frustration at delays in the DOD approval process, threatening to buy 28 Eurofighters instead. The Obama Administration notified to Congress on November 17, 2016, the potential sale of up to 32 F-18s to Kuwait along with support, equipment, and training. On November 28, 2016, U.S. officials stated that Kuwait had proceeded to order 28 of the jets\u2014an agreement with a value of $5 billion. Tanks . In 1993, Kuwait bought 218 M1A2 tanks at a value of $1.9 billion. Delivery was completed in 1998. On October 16, 2017, the Defense Security Cooperation Agency notified Congress of a determination to sell Kuwait new tank hulls, armament, and engines for its U.S.-made tank force, at an estimated sale value of $29 million. Apache Helicopters . In September 2002, Kuwait ordered 16 AH-64 (Apache) helicopters equipped with the Longbow fire-control system, valued at about $940 million. Kuwait reportedly is seeking to buy additional Apaches. Tactical Missiles . In 2008, Kuwait bought 120 AIM-120C-7 Advanced Medium Range Air-to-Air Missiles (AMRAAM), along with equipment and services, with a total value of $178 million. In February 2012, the Administration notified Congress of a sale of 80 AIM-9X-2 SIDEWINDER missiles and associated parts and support, with an estimated value of $105 million. On July 30, 3018, DSCA notified Congress of a potential sale to Kuwait of 300 Hellfire air-to-ground missiles, with an estimated value of $30.4 million. Kuwait already has Hellfires in its inventory, according to DSCA. DSCA announced in June 2014, that Kuwait would fund $1.7 billion for the U.S. Army Corps of Engineers to build a Kuwait Armed Forces Hospital. ", "In December 2015 Kuwait's government asked the National Assembly to approve $20 billion in additional funds for arms purchases. The funds will presumably pay for the F-18s Kuwait has ordered, as well as for additional U.S. Apache helicopters, French naval vessels and light armored vehicles, and Russian-made missile systems and heavy artillery. "], "subsections": []}, {"section_title": "International Military Education and Training (IMET)", "paragraphs": ["In some past years, Kuwait received very small amounts of funding under the International Military Education and Training (IMET) program\u2014for the primary purpose of earning Kuwait discounts on the training it pays for its officers to undergo in the United States. It received $19,000 in IMET in FY2007, $14,000 in FY2008, and $10,000 in FY2010. Approximately 200 Kuwaiti military personnel study intelligence, pilot training, and other disciplines at various U.S. military institutions. Kuwait spends a total of about $10 million per year on this program. "], "subsections": []}]}]}, {"section_title": "Foreign Policy Issues", "paragraphs": ["After the United States, Kuwait's most important alliances are with the other GCC states. Kuwait has tended to act within a GCC consensus and to try to preserve GCC unity. "], "subsections": [{"section_title": "Intra-GCC Issues", "paragraphs": ["Kuwaiti leaders argue for GCC unity as the optimal means for dealing with regional threats. Amir Sabah has been the key Gulf mediator of the intra-GCC rift that erupted in June 2017 when Saudi Arabia, UAE, and Bahrain\u2014asserting that Qatar implements policies fundamentally at odds with other GCC states\u2014broke relations with Qatar and denied it land, air, and sea access to their territories. Then-Secretary of State Rex Tillerson conducted unsuccessful \"shuttle diplomacy\" on the issue from Kuwait in July 2017. After Amir Sabah's meeting with President Trump in September 2017, President Trump brokered brief direct talks between Qatar's Amir and Saudi Arabia's heir apparent, Crown Prince Mohammad bin Salman Al Saud. Kuwait convened the annual GCC summit on December 4, 2017), but Amir Sabah adjourned it after a few hours. ", "The rift reportedly was a focus of Amir Sabah's meeting with President Trump on September 5, 2018, but, with no apparent imminent resolution of the rift, the Administration has repeatedly postponed a U.S.-GCC summit planned first planned for early 2018. Kuwait's reluctance to adopt the Saudi/UAE/Bahrain hard-line position on Qatar reportedly caused the abbreviation of the visit of Saudi Crown Prince Mohammad bin Salman Al Saud to Kuwait on September 30, 2018\u2014his first visit to a Gulf state since becoming Crown Prince. In support of a resolution of the rift, Kuwait hosted the military chiefs of staff of the GCC, Egypt, and Jordan, as well as the commander of U.S. Central Command, on September 12, 2018. Kuwait did not join Saudi Arabia, Bahrain, and UAE in withdrawing their ambassadors from Qatar for several months in 2014 over similar issues.", "Kuwait has sometimes acted militarily to defend GCC leaderships. Kuwait sent a naval unit to support the March 14, 2011, intervention of the GCC's \"Peninsula Shield\" unit to assist Bahraini security forces, but did not send ground troops into Bahrain. The Kuwaiti naval unit departed in July 2011. Kuwait's involvement came despite opposition from some Kuwaiti Shias. "], "subsections": []}, {"section_title": "Relations with Iraq", "paragraphs": ["Kuwait has built political ties to the Shia-dominated government in Iraq in order to move beyond the legacy of the Saddam era invasion of Kuwait and to prevent any Iraqi Shia-led violence in Kuwait such as occurred in the 1980s. On July 18, 2008, Kuwait named its first ambassador to Iraq since the 1990 Iraqi invasion. On January 12, 2011, then-Prime Minister Nasser became the first Kuwait Prime Minister to visit Iraq since the 1990 invasion. Then-Iraqi Prime Minister Nuri al-Maliki visited Kuwait in 2011 and 2012, paving the way for Amir Sabah's attendance at the March 27-29, 2012, Arab League summit in Baghdad that marked Iraq's return to the Arab fold. The speaker of Kuwait's National Assembly visited Iraq on February 28, 2019, to mark the anniversary of the liberation from the Iraqi invasion. ", "As part of its outreach to post-Saddam Iraq, Kuwait ran a humanitarian operation center (HOC) that gave over $550 million in assistance to Iraqis from 2003 to 2011. In 2008, Kuwait hosted a regional conference on Iraq's stability attended by the United States and Iran. In 2018, Kuwait held a conference that raised $30 billion for Iraq reconstruction to help it recover from the Islamic State challenge. ", "Some residual issues from the Iraqi invasion remain. In August 2012, the Iraqi government vowed to \"end all pending issues with Kuwait before the start of [2013]\"\u2014a statement that furthered Iraq's argument that the U.N. Security Council should remove any remaining \"Chapter 7\" (of the U.N. Charter) mandates on Iraq stemming from the invasion. During a visit to Iraq by Kuwait's Prime Minister on June 12, 2013, the two countries agreed to take the issues of still-missing Kuwaitis and Kuwaiti property out of the Chapter 7 supervision of the United Nations and replace them with alternative mechanisms, as discussed below. On December 15, 2010, the U.N. Security Council passed three resolutions\u20141956, 1957, and 1958. These resolutions ended Saddam-era sanctions against Iraq, but did not end the \"Chapter 7\" U.N. mandate on Iraq and continued the 5% automatic revenue deductions for reparations payments, discussed below.", "Reparations Payments . Until 2014, 5% of Iraq's oil revenues were devoted to funding a U.N. escrow account that, since 1991, has been compensating the victims of the Iraqi invasion of Kuwait. The U.N. Compensation Commission (UNCC), created by the post-Desert Storm U.N. resolutions, paid out about $52 billion awarded to over 100 governments and 1.5\u00a0million individual claimants by the time it ended in April 2015. As of that time, the process had paid $48 billion of that amount, leaving only about $4.6 billion left to be paid\u2014the last remaining amount due from the $14.7 billion awarded for damage to Kuwaiti oilfields during the Iraqi occupation. In 2014, the UNCC, accounting for Iraqi budget shortfalls, extended the deadline for Iraq to make the final payments to early 2016. In 2015, Kuwait extended that deadline until 2018, and Iraq paid Kuwait $90 million in April 2018. The two countries agreed to retire the remaining balance through the payment of 1.5% of Iraq's oil revenues in 2019, and 3% in each of 2020 and 2021. However, budgetary difficulties in Iraq have caused Iraq's new government to request in November 2018 that Kuwait agree to another suspension of the payments. ", "Missing Kuwaitis and Kuwaiti National Archives . The U.N. resolutions adopted in December 2010 also continued the effort, required under post-1991 war U.N. Security Council resolutions (primarily 687), to resolve the fate of the 605 Kuwaitis and third party nationals missing and presumed dead from the 1991 war, as well as that of the missing Kuwaiti national archives. A special U.N. envoy, Gennady Tarasov, was U.N. High-Level Coordinator for these issues. In September 2011 and in June 2012, Iraq called for an end to the mandate of that post and for Iraq and Kuwait to pursue the issue bilaterally. The June 16, 2013, visit of the Kuwaiti Prime Minister to Iraq\u2014which followed progress on border demarcations issues\u2014resulted in an Iraq-Kuwait joint recommendation to remove these issues of missing property and persons from the Chapter 7 U.N. mandate. That recommendation was endorsed in the U.N. Secretary-General's report of June 17, 2013. U.N. Security Council Resolution 2107 of June 27, 2013, abolished the High-Level Coordinator mandate and transferred the supervision of these issues to the U.N. Assistance Mission\u2014Iraq (UNAMI)\u2014under Chapter VI of the U.N. Charter. ", "The search process has resulted in finding the remains of 236 Kuwaitis, to date. The cases of 369 Kuwaitis remain unresolved. Kuwait has been a donor to the Iraqi Ministry of Human Rights, which is the lead Iraqi agency trying to determine the fate of the Kuwaitis. More than 10,000 trenches have been dug to search for remains, and former members of Saddam's regime have been interviewed. In February 2019, a U.N. Security Council presidential statement urged reinvigoration of the process of determining the fate of the Kuwaiti missing, noting that no human remains had been exhumed since 2004.", "As far as the Kuwaiti National Archives, U.N. reports on December 14, 2012, and June 17, 2013, say there has been no progress locating the archives. However, Annex I to the June 17, 2013, report (U.N. document S/2013/357) contains a list of all the Kuwaiti property returned to Kuwait by Iraq since 2002. In June 2012, Iraq returned to Kuwait numerous boxes of tapes from Kuwait's state radio, books belonging to Kuwait University, and keys to Kuwait's Central Bank. In November 2018, visiting Iraqi President Barham Salih brought with him to Kuwait some Kuwaiti archival material that had been found. ", "Kuwait-Iraq Border. Disputes over the Iraq-Kuwait border, some of which apparently were a factor in Iraq's 1990 invasion of Kuwait, have been mostly resolved. Under post-1991 Gulf War U.N. Security Council Resolution 833, the Council accepted the U.N.-demarcated border between them. Kuwait insisted that post-Saddam Iraqi governments formally acknowledge Iraq's commitments under that resolution to pay some of the costs of border markings and signs. As a consequence of the March 2012 Maliki visit to Kuwait, Iraq agreed to pay its portion of the costs of maintaining the border markings, and sea border markings and related issues were resolved in 2013. In 2017, Iraq ceded to Kuwait greater access to the shared Khor Abdullah waterway. ", "Other Outstanding Bilateral Disputes /Iraqi Airways . Kuwait has not forgiven about $25 billion in Saddam-era debt, but Kuwait does not appear to be pressing the Iraqi government for payment. The March 2012 Maliki visit resolved Kuwait Airways' assertion that Iraq owed Kuwait $1.2 billion for planes and parts stolen during the Iraqi invasion with agreement for Iraq to pay Kuwait $300 million in compensation, and to invest $200 million in an Iraq-Kuwait joint airline venture. Subsequent to the visit, Iraq-Kuwait direct flights resumed. ", "Threat from Iraqi Extremist Groups . Kuwait remains wary of pro-Iranian Shia militia groups operating in Iraq, most of which grew out of pro-Iranian anti-Saddam elements. The December 1983 bombings of the U.S. and French embassies in Kuwait and an attempted assassination of the Amir in May 1985 were attributed to the Iran-inspired Iraqi Da'wa (Islamic Call) Party, composed of Shias. Seventeen Da'wa activists were arrested for those attacks, and Da'wa activists hijacked a Kuwait Airlines plane in 1987. Da'wa is the party that two of Iraq's previous prime ministers headed, although the party disbanded its militia wing long ago. In July 2011, the Iran-supported militia of Shia cleric Moqtada Al Sadr rocketed Kuwait's embassy in Iraq. "], "subsections": []}, {"section_title": "Iran", "paragraphs": ["Kuwait has undertaken consistent high-level engagement with Iran, reflecting a legacy of Kuwait's perception of Iran as a counterweight to Saddam Hussein's Iraq. After 1991, Kuwait often hosted pro-Iranian anti-Saddam Iraqi Shia oppositionists for talks, even though some of these same groups had conducted attacks in Kuwait in the 1980s. Amir Sabah visited Iran in June 2014, including meetings with Iran's Supreme Leader, Ayatollah Ali Khamene'i. Iran's President Hassan Rouhani visited Kuwait and Oman in February 2017, in conjunction with Kuwait's role as a mediator in an unsuccessful attempt to establish a broader Iran-GCC dialogue. ", "Like the other GCC states, and despite engaging Iranian leaders, Kuwaiti leaders support U.S. efforts to reduce Iran's efforts to expand its influence in the region, while supporting continued implementation of the 2015 Iran nuclear agreement (Joint Comprehensive Plan of Action, JCPOA) to curb Iran's nuclear program. Kuwait has also purchased missile defense equipment that supports U.S. efforts to forge a joint GCC missile defense network against Iran, and it participates in all U.S.-led military exercises in the Persian Gulf. Kuwait enforces all U.S. sanctions against Iran, and it has not pursued a long-discussed plan to import Iranian natural gas. In January 2016, Kuwait downgraded relations with Iran over the sacking of Saudi diplomatic facilities in Tehran and Mashhad by demonstrators protesting the Saudi execution of dissident Saudi Shia cleric Nimr al Baqr Al Nimr. Kuwait recalled its Ambassador from Iran but it did not follow Saudi Arabia and Bahrain in breaking relations. In September 2018, Kuwait rebuffed Iranian entreaties to return its ambassador to Tehran.", "Amir Sabah represented Kuwait at the May 13-14, 2015, and April 21, 2016, U.S.-GCC summits in Camp David and in Riyadh respectively, during which then-President Obama reassured the GCC states of the U.S. commitment to Gulf security. Kuwait's Foreign Ministry reacted to the Trump Administration's May 8, 2018, announcement of its exit from the JCPOA by expressing \"understanding\" that U.S. suggestions for improving the accord were not adopted. Kuwaiti officials have indicated the country will join the U.S.-backed Middle East Strategic Alliance to counter Iran, if such a bloc is formed. ", "Kuwait has been vigilant in preventing Iran from undermining security inside Kuwait. In 2010, Kuwait arrested some Kuwaiti civil servants and stateless residents for allegedly helping the Qods Force of the Islamic Revolutionary Guard Corps (IRGC-QF) of Iran (the IRGC unit that supports pro-Iranian movements in the region) plot to blow up Kuwaiti energy facilities. In September 2015, Kuwait arrested 25 Kuwaiti Shias and 1 Iranian who had reportedly hidden explosives near the border with Iraq. In January 2016, a criminal court sentenced 2 of the defendants, including the Iranian (in absentia), to death, and 12 to prison terms. Another 12 were acquitted. "], "subsections": []}, {"section_title": "Syria and the Islamic State", "paragraphs": ["Kuwait joined the U.S.-led coalition against the Islamic State, along with the other GCC states, in September 2014. It has hosted the operational headquarters for Operation Inherent Resolve (OIR). \"ARCENT\"\u2014the U.S. Army component of U.S. Central Command\u2014is based in Kuwait, and the ARCENT commander serves as overall U.S. commander of OIR. Kuwait also has allowed Canada and Italy to base reconnaissance and combat aircraft in Kuwait for their participation in OIR. Unlike some of the other GCC states, Kuwait did not conduct any air operations against Islamic State forces in Syria. No GCC state deployed ground forces to Syria or Iraq, and Kuwaiti officials say the government does not fund or arm any rebel groups fighting in Syria. ", "Kuwait's leaders asserted that Syrian President Bashar Al Asad should leave office and, along with the other GCC states, Kuwait closed its embassy in Damascus in 2012. In December 2014, Kuwait allowed Syria to reopen its embassy in Kuwait to perform consular services for the approximately 140,000 Syrians living there. ", "Kuwait has focused on helping civilian victims of the conflicts in Syria and Iraq, including hosting several major donors' conferences for victims of the Syria and cochairing a donors' conference for victims of the conflict, held on April 4-5, 2017, in Brussels. It has provided over $9 billion in humanitarian support for this purpose, making Kuwait the largest single country donor to these efforts after the United States. All of Kuwait's donations have been composed mostly of donations to nine U.N. agencies and to the International Committee of the Red Cross (ICRC). Kuwait hosts about 145,000 Syrians who fled that conflict. ", "In October 2018, Kuwait joined Saudi Arabia and the UAE in finalizing a $2.5 billion donation to Jordan to help it cope with the financial burdens of hosting Syrian and Iraqi refugees. The refugees are an economic burden that likely contributed to protests in Jordan over unemployment, rising prices, and the imposition of additional income taxes. "], "subsections": []}, {"section_title": "Yemen", "paragraphs": ["After an Arab Spring-related uprising in Yemen in 2011, Kuwait and its GCC allies brokered a transition that led to the departure of longtime President Ali Abdullah Saleh in January 2012. However, the elected government of Abdu Rabbu Mansour Al Hadi fled in January 2015 under pressure from Iran-backed Zaydi Shia Houthi rebels. In 2015, Kuwait joined the Saudi-led combat against the Houthis to try to restore the Hadi government. In part because of its willingness to engage diplomatically with Iran, the key backer of the Houthis, and its membership in the GCC, since 2016 Kuwait has hosted U.N.-mediated talks between the warring sides. In July 2016, Kuwait issued an ultimatum to the two warring sides in the Yemen conflict to negotiate a resolution to the conflict by the conflict by the following month, but the maneuver was unsuccessful. Rouhani's visit to Kuwait in February 2017 was intended, at least in part, to explore potential cooperation between Iran and the GCC to resolve the Yemen conflict. "], "subsections": []}, {"section_title": "Kuwaiti Policy on Other Regional Conflicts and Issues", "paragraphs": ["Kuwait has generally acted in concert with\u2014although not always as assertively as\u2014other GCC states on regional issues that have stemmed from post-2011 unrest in the region. "], "subsections": [{"section_title": "Egypt/Muslim Brotherhood", "paragraphs": ["Kuwait adopted a position on Egypt's internal struggles that was similar to that of Saudi Arabia and UAE, but at odds with Qatar, which was a major benefactor of Egypt during the presidency of Muslim Brotherhood senior figure Mohammad Morsi. Kuwaiti leaders, as do those of Saudi Arabia and the UAE, assert that the Brotherhood in Egypt supports Brotherhood-linked oppositionists in the GCC. Since Morsi was deposed by the Egyptian military in July 2013, Kuwait has given at least $8 billion to Egypt in grant, loans, and investments, and has arrested and deported some Egyptians in Kuwait for conducting (pro-Muslim Brotherhood) political activities. Still, Kuwaiti leaders assert that differences over the Brotherhood do not justify the Saudi-led ostracism of Qatar. "], "subsections": []}, {"section_title": "Palestinian-Israeli Dispute", "paragraphs": ["For many years after the 1990 Iraqi invasion, Kuwait was at odds with then-Palestinian leader Yasir Arafat for opposing war to liberate Kuwait. Kuwait sought to punish the Palestinian leadership by expelling about 450,000 Palestinian workers from Kuwait and building ties to Hamas, a rival to Arafat's Palestine Liberation Organization (PLO). That tilt was demonstrated again in June 2018 when Kuwait circulated a draft U.N. Security Council resolution calling for an international force at the Gaza border to protect pro-Hamas demonstrators who confronted Israeli forces at the border in March 2018. ", "However, Kuwait remains staunchly critical of Israel. in line with the positions of the other GCC and Arab states, Kuwait has supported U.N. recognition of a Palestinian State and opposed the Trump Administration's recognition that Israel's capital is in Jerusalem. Kuwait's Foreign Ministers attended the U.S.-sponsored Middle East conference in Warsaw, Poland during February 13-14, 2019, during which the Arab states attending held discussions on regional topics, particularly Iran, alongside Israeli Prime Minister Benjamin Netanyahu. However, Kuwaiti officials denied that their participation indicated that they would follow the lead of Oman, UAE, and Saudi Arabia in building increasingly public ties to Israel's government. Kuwait's foreign minister visited the Old City of Jerusalem in September 2014, but the Kuwaiti government asserted it did not coordinate the visit with Israeli officials and that the Old City represents a part of Palestine that is occupied. In 2018, Kuwait used its seat on the U.N. Security Council to block U.S.-backed efforts to censure PA President Mahmoud Abbas for an anti-Semitic speech, and it blocked U.S. condemnation of Hamas attacks on Israel. In 2018, Kuwait pledged $50 million for the United Nations Relief and Works Agency (UNRWA) in part to compensate the agency for reduced U.S. donations. ", "As part of U.S.-led Israeli-Palestinian peace process negotiations, during 1992 to 1997, Kuwait attended\u2014but did not host\u2014multilateral working group talks with Israel on arms control, water resources, refugees, and other issues. In 1994, Kuwait helped persuade the other Gulf monarchies to cease enforcement of the secondary (trade with firms that deal with Israel) and tertiary (trade with firms that do business with blacklisted firms) Arab boycotts of Israel. However, Kuwait did not, as did Qatar and Oman, subsequently exchange trade offices with Israel, and it retained the Arab League boycott on trade with Israel (\"primary boycott\"). "], "subsections": []}, {"section_title": "North Korea", "paragraphs": ["As do several other GCC states, Kuwait has had a significant number of North Korean laborers working in Kuwait (about 3,000), whose earnings are mostly remitted to the North Korean government. In concert with increased U.S. pressure on North Korea in 2017 for its missile and nuclear tests, Kuwait curtailed its relationship with North Korea. On September 17, 2017, after a meeting between the Amir and President Trump, Kuwait gave North Korea's ambassador (the only North Korean ambassador in the Gulf) and four other North Korean diplomats 30 days to leave Kuwait. North Korea's embassy in Kuwait City subsequently remains open but with only four staff persons, including a charge d'affaires. Kuwait also ceased renewing visas for North Korean workers, causing them to start leaving, and it halted trade ties and direct flights between Kuwait and North Korea. "], "subsections": []}]}, {"section_title": "Domestic Terrorism and Counterterrorism Cooperation42", "paragraphs": ["Kuwait has prevented most, but not all, terrorist attacks by the Islamic State and other groups, since an attack on a mosque in Kuwait City on June 26, 2015, killed 27 persons. A local branch of the Islamic State claimed responsibility. In July 2016, Kuwait said its security forces thwarted three planned Islamic State terrorist attacks in Kuwait, including a plot to blow up a Shia mosque. On October 10, 2016, an Islamic State-inspired individual of Egyptian origin drove a truck into a vehicle carrying U.S. military personnel, but no U.S. personnel were injured or killed. In April 2017, a suspected mid-ranking leader of the Islamic State was extradited from the Philippines to Kuwait for involvement in operational planning to attack Kuwait. ", "U.S. agencies help Kuwait's counterterrorism efforts, border control, and export controls. Recent State Department fact sheets on security cooperation with Kuwait, referenced earlier, state that Kuwait's Ministry of Interior and National Guard participate in U.S. programs to work with local counterterrorism units via training and bilateral exercises. At the September 8, 2017, U.S.-Kuwait Strategic Dialogue meeting in Washington, DC, Kuwait's Ministry of Interior signed a counterterrorism information sharing arrangement with the U.S. Federal Bureau of Investigation (FBI). And, the U.S. Customs and Border Control signed an agreement to share customs information with Kuwait's director general of customs. Kuwait also has ratified a Saudi-led GCC \"Internal Security Pact\" to enhance regional counterterrorism cooperation. In April 2011, Kuwait introduced biometric fingerprinting at Kuwait International Airport and has since extended that system to land and sea entry points.", "Kuwait long sought the return of two prisoners held at the U.S. facility in Guantanamo Bay, Cuba, under accusation of belonging to Al Qaeda. Both were returned to Kuwait by January 2016. Kuwait built a rehabilitation center to reintegrate them into society after their return. "], "subsections": [{"section_title": "Terrorism Financing Issues", "paragraphs": ["The State Department report on international terrorism for 2017, cited above, contains praise for recent Kuwait government steps to counter the financing of terrorism. The report praises Kuwait's October 2017 announcement, with the GCC and the United States, of 13 terrorist designations of individuals associated with the Islam State-Yemen and Al Qaeda in the Arabian Peninsula (AQAP). The report also cites the Central Bank of Kuwait for implementing a \"same business-day\" turnaround policy for imposing U.N. terrorist financing-related sanctions, requiring Kuwaiti banks to monitor U.N. sanctions lists proactively. ", "Kuwait is a member of the Middle East North Africa Financial Action Task Force (MENAFATF), and many of the steps that Kuwait has taken to address the criticism were the product of an action plan Kuwait developed with the broader FATF to address Kuwait's weaknesses on anti-money laundering and counterterrorism financing (AML/CTF). A law Kuwait enacted in 2013 provided a legal basis to prosecute terrorism-related crimes and freeze terrorist assets. In May 2014, the Ministry of Social Affairs warned Kuwaiti citizens that the fundraising campaigns for Syrian factions were a violation of Kuwait law that requires that financial donations only go to authorized charity organizations. As of mid-2014, Kuwait has been no longer deemed deficient on AML/CFT by the FATF. In June 2015, the National Assembly passed a law that criminalized online fundraising for terrorist purposes. In 2017, Kuwait joined two counter terrorism-financing conventions, the Egmont Group and the U.S.-GCC \"Terrorist Financing Targeting Center.\" ", "Still, Kuwait's record on this issue has been mixed. Kuwaiti donors have been able, in recent years, to raise funds for various regional armed factions, including the Al Qaeda affiliate Al Nusra Front operating in Syria (which publicly severed its connection to Al Qaeda and changed its name in August 2016). The then-Under Secretary for Terrorism and Financial Intelligence of the Department of the Treasury said on March 4, 2014, that the appointment of a leading Kuwaiti donor to Al Nusra, Nayef al-Ajmi, as Minister of Justice and Minister of Islamic Endowments (Awqaf), was \"a step in the wrong direction.\" Subsequently, Ajmi resigned his government posts. On August 6, 2014, the Treasury Department imposed sanctions on two Ajmi tribe members and one other Kuwaiti under Executive Order 13224 sanctioning support for international terrorism. Two Kuwaitis were sanctioned by the United Nations Security Council for allegedly providing financial support to Al Nusra Front, and the Treasury Department sanctioned a Kuwaiti person in March 2017 under E.O 13324 for providing support to Al Nusrah Front and Al Qaeda. Earlier, in June 2008, the Department of the Treasury froze the assets of a Kuwait-based charity\u2014the Islamic Heritage Restoration Society\u2014for alleged links to Al Qaeda, under E.O. 13224. ", "The United States has, at times, provided very small amounts of aid to help Kuwait counter terrorism financing. In FY2013, about $83,000 was provided to training Kuwaiti authorities on methods to counter terrorism financing. In FY2015, about $100,000 was provided for similar purposes. ", "Countering Violent Extremism . State Department terrorism reports also praise Kuwait's programs to encourage moderation in Islam in Kuwait. The government supports a number of local counter-messaging campaigns on radio, television, and billboards. In late 2015, the government moved a \"Center for Counseling and Rehabilitation\" from Central Prison to a new facility with an expanded faculty and broadened mandate. In July 2017, the government established a new Directorate for Cybersecurity within the Higher Authority for Communication to \"fight violent extremism.\""], "subsections": []}]}]}, {"section_title": "Economic Issues", "paragraphs": ["Political infighting and the drop in oil prices since 2014 have affected Kuwait's economy, but the country is taking steps to try to reduce its economic vulnerability. Hydrocarbons sales still represent about 90% of government export revenues and about 60% of its gross domestic product (GDP). Because Kuwait requires that crude oil sell for about nearly $75 per barrel to balance its budget\u2014well above prices for most of the time since 2014\u2014Kuwait has run budget deficits of about $15 billion per year since 2015. Kuwait deferred capital infrastructure investment and reduced public sector salaries and subsidies, according to the IMF and other observers. Subsidy reductions were contemplated even before the decline in oil prices: in October 2013, Prime Minister Jabir said the subsidies system\u2014which cost the government about $17.7 billion annually\u2014had produced a \"welfare state\" and was \"unsustainable\" and must be reduced.", "On the other hand, Kuwait still has a large sovereign wealth fund, managed by the Kuwait Investment Authority, with holdings estimated at nearly $600 billion. Kuwait, which produces about 3 million barrels per day of crude oil, agreed to slightly reduce its crude oil production (by 130,000 barrels per day) as part of a November 2016 OPEC production cut agreement that remains in effect. Kuwait and Saudi Arabia, including during a September 30, 2018, visit to Kuwait by Saudi Crown Prince Mohammad bin Salman Al Saud, discussed jointly increasing production by 500,000 barrels per day by reactivating two closed fields in their joint \"neutral zone.\" The Khafji field closed in October 2014 due to environmental concerns and the Wafra field closed in May 2015 over technical issues. However, the Crown Prince's visit did not result in any announced agreement to resume production at the two fields. ", "Using National Assembly legislation that took effect in 2010, the government has moved forward with long-standing plans to privatize some state-owned industries. However, the privatization of Kuwait Airways was cancelled, despite the passage of legislation in January 2014 authorizing that privatization, in part because of opposition from the airline's workforce. ", "Political disputes also delayed movement on several major potential drivers of future growth, most notably opening Kuwait's northern oil fields to foreign investment to generate about 500,000 barrels per day of extra production. The Assembly blocked the $8.5 billion project for over 15 years because of concerns about Kuwait's sovereignty. However, a fourth oil refinery, estimated to cost $8 billion, is under construction and is scheduled to open in 2019. At an investment forum in March 2018, Kuwait announced a vision to attract foreign direct investment through development of a large \"Northern Gateway\" economic opportunity zone encompassing five natural islands in northern Kuwait. That project has since been retitled \"Silk City,\" after attracting investment from China as part of that country's region-wide Belt and Road Initiative (BRI). The project, which might involve almost $90 billion in total investment, will encompass a new airport, railways, and port facilities. Kuwait and China have formed a $10 billion \"Kuwait-China Silk Road Fund\" to finance initial stages of the expansion. The development of the northern reaches of Kuwait is part of the country's overall \"New Kuwait 2035\" economic strategy. ", "Nuclear Power. Like other Gulf states, Kuwait sees peaceful uses of nuclear energy as important to its economy, although doing so always raises fears among some in the United States, Israel, and elsewhere about the ultimate intentions of developing a nuclear program. In 2012, Kuwait formally abandoned plans announced in 2011 to build up to four nuclear power reactors. The government delegated any continuing nuclear power research to its Kuwait Institute for Scientific Research (KISR). Kuwait is cooperating with the International Atomic Energy Agency (IAEA) to ensure international oversight of any nuclear work in Kuwait. In FY2015, the United States provided about $38,000 to help train Kuwaiti personnel in nuclear security issues, and about $58,000 was provided in FY2016 for this purpose. "], "subsections": [{"section_title": "U.S.-Kuwait Economic Issues", "paragraphs": ["In 1994, Kuwait became a founding member of the World Trade Organization (WTO). In February 2004, the United States and Kuwait signed a Trade and Investment Framework Agreement (TIFA), often viewed as a prelude to a free trade agreement (FTA), which Kuwait has said it seeks. In the course of the September 8, 2017, U.S.-Kuwait Strategic Dialogue, the U.S. Department of Commerce finalized a memorandum of understanding with Kuwait's Direct Investment Promotion Authority to encourage additional investments in both countries. Kuwait gave $500 million worth of oil to U.S. states affected by Hurricane Katrina.", "The United States' imports of oil from Kuwait have been declining as U.S. oil imports have declined generally. The United States imports about 100,000 barrels per day of crude oil from Kuwait, as of mid-2018. Total U.S. exports to Kuwait were about $5.1 billion in 2017, and total U.S. imports from Kuwait in 2017 were about $3 billion. Based on figures through November 2018, U.S. exports to Kuwait in 2018 were only about half of what they were the prior year, and imports from Kuwait fell by about 25% in that time period. U.S. exports to Kuwait consist mostly of automobiles, industrial equipment, and foodstuffs. Following his meeting with Amir Sabah on September 7, 2017, President Trump stated that Kuwait had taken delivery of 10 U.S.-made Boeing 777 commercial passenger aircraft in 2017, which might account for the spike in U.S. export figures to Kuwait in 2017. "], "subsections": [{"section_title": "U.S. Assistance", "paragraphs": ["Because Kuwait's per capita GDP is very high, Kuwait receives negligible amounts of U.S. foreign assistance. The assistance Kuwait does receive is targeted to achieve selected objectives that benefit U.S. national security, including promoting civil society, and training on nuclear security and counterterrorism financing. In FY2016, about $3,000 was provided for counternarcotics programs in Kuwait. "], "subsections": []}]}]}]}}
{"id": "R43813", "title": "Colombia: Background and U.S. Relations", "released_date": "2019-02-08T00:00:00", "summary": ["A key U.S. ally in the Latin American region, Colombia endured an internal armed conflict for half a century. Drug trafficking fueled the violence by funding both left-wing and right-wing armed groups. Some analysts feared Colombia would become a failed state in the late 1990s, but the Colombian government devised a new security strategy, known as Plan Colombia, to counter the insurgencies. Originally designed as a 6-year program, Plan Colombia ultimately became a 17-year U.S.-Colombian bilateral effort. The partnership focused initially on counternarcotics and later on counterterrorism; it then broadened to include sustainable development, human rights, trade, regional security, and many other areas of cooperation. Between FY2000 and FY2016, the U.S. Congress appropriated more than $10 billion to help fund Plan Colombia and its follow-on programs. For FY2018, Congress appropriated $391.3 million in foreign aid for Colombia, including assistance to promote peace and end the conflict.", "President Juan Manuel Santos (2010-2018) made concluding a peace accord with the Revolutionary Armed Forces of Colombia (FARC)\u2014the country's largest leftist guerrilla organization\u2014his government's primary focus. Following four years of formal peace negotiations, Colombia's Congress ratified the FARC-government peace accord in November 2016. During a U.N.-monitored demobilization effort in 2017, approximately 11,000 FARC disarmed and demobilized. This figure included FARC who had been held in prison for crimes of rebellion and those making up FARC militias, who were accredited by the Colombian government as eligible to demobilize.", "On August 7, 2018, Iv\u00e1n Duque, a senator from the conservative Democratic Center party, was inaugurated to a four-year presidential term. Duque, who also worked at the Inter-American Development Bank in Washington, DC, and is Colombia's youngest president in a century, campaigned as a critic of the peace accord with the FARC. His party objected to specific measures concerning justice and political representation. Some observers maintain that his election has generated uncertainty for implementation of the accord. Shortly after taking office, Duque suspended peace talks with the National Liberation Army (ELN), the country's second-largest rebel group, which had begun under President Santos.", "Since the ratification of the peace accord, Colombia's long-term strategy has evolved from defeating insurgents to post-conflict stabilization. Many considered Plan Colombia and its successor strategies a remarkable advance, given the country's improvements in security and economic stability. Nevertheless, recent developments have called into question Colombia's progress. The FARC's demobilization has triggered open conflict among armed actors (including FARC dissidents and transnational criminal groups), which seek to control drug cultivation and trafficking, illegal mining, and other illicit businesses that the demobilized FARC abandoned. The ongoing lack of governance in remote rural areas recalls the conditions that originally gave rise to the FARC and other armed groups.", "Many observers continue to raise concerns about the country's human-rights conditions, sharp increases in coca cultivation and cocaine production, and problems stemming from the failing authoritarian government of neighboring Venezuela, which shares a nearly 1,400-mile border with Colombia. Venezuela's humanitarian crisis has set in motion an exodus of migrants, many of whom have sought temporary residence (or extended stays) in Colombia. Political upheaval has added yet more uncertainty after the United States and many other Western Hemisphere and European nations, including Colombia, called for a democratic transition in Venezuela and recognized the president of the Venezuelan National Assembly, Juan Guaid\u00f3, as the country's interim president in January 2019.", "The U.S.-Colombia Trade Promotion Agreement went into force in May 2012. The United States remains Colombia's top trade partner. After several years of annual growth exceeding 4%, one of the steadiest expansion rates in the region, Colombia grew by an estimated 2.7% in 2018. The FARC-government peace accord is projected to cost more than $40 billion to implement over 15 years, adding to the polarization over the controversial peace process.", "For additional background, see CRS In Focus IF10817, Colombia's 2018 Elections, CRS Report R44779, Colombia's Changing Approach to Drug Policy, CRS Report R42982, Colombia's Peace Process Through 2016, and CRS Report RL34470, The U.S.-Colombia Free Trade Agreement: Background and Issues."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Political and Economic Situation", "paragraphs": [], "subsections": [{"section_title": "Political Background and Colombia's Internal Conflict", "paragraphs": ["Colombia, one of the oldest democracies in the Western Hemisphere and the third most populous Latin American country, has endured a multisided civil conflict for more than five decades until President Juan Ma nuel Santos declared the conflict over in August 2017 at the end of a U.N.-monitored disarmament. According to the National Center for Historical Memory 2013 report, presented to the Colombian government as part of the peace process to end the fighting, some 220,000 Colombians died in the armed conflict through 2012, 81% of them civilians. ", "The report also provided statistics quantifying the scale of the conflict, which has taken a huge toll on Colombian society: more than 23,000 selective assassinations between 1981 and 2012; internal displacement of more than 5 million Colombians due to land seizure and violence; 27,000 kidnappings between 1970 and 2010; and 11,000 deaths or amputees from anti-personnel land mines laid primarily by Colombia's main insurgent guerrilla group, the Revolutionary Armed Forces of Colombia (FARC). To date, more than 8 million Colombians, or roughly 15% of the population, have registered as conflict victims.", "Although the violence has scarred Colombia, the country has achieved a significant turnaround. Once considered a likely candidate to become a failed state, Colombia, over the past two decades, has overcome much of the violence that had clouded its future. For example, between 2000 and 2016, Colombia saw a 94% decrease in kidnappings and a 53% reduction in homicides (below 25 per 100,000 in 2016). Coupled with success in lowering violence, Colombia has opened its economy and promoted trade, investment, and growth. Colombia has become one of Latin America's most attractive locations for foreign direct investment. Yet, after steady growth over several years, Colombia's economy slowed to 3.1% growth in 2015 and declined to 1.7% in 2017. Many analysts identified Colombia's dependence on oil and other commodity exports as the primary cause.", "Between 2012 and 2016, the Colombian government held formal peace talks with the FARC, Colombia's largest guerrilla organization. Upon taking office for a second term in August 2014, President Santos declared peace, equality, and education as his top priorities, although achieving the peace agreement remained his major focus. In August 2016, the government and FARC negotiators announced they had concluded their talks and achieved a 300-page peace agreement. The accord was subsequently narrowly defeated in a popular referendum held in early October 2016, but was revised by the Santos government and agreed to by the FARC and then ratified by the Colombian Congress at the end of November 2016. "], "subsections": [{"section_title": "Roots of the Conflict", "paragraphs": ["The Colombian conflict predates the formal founding of the FARC in 1964, as the FARC had its beginnings in the peasant self-defense groups of the 1940s and 1950s. Colombian political life has long suffered from polarization and violence based on the significant disparities and inequalities suffered by landless peasants in the country's peripheral regions. In the late 19 th century and a large part of the 20 th century, the elite Liberal and Conservative parties dominated Colombian political life. Violence and competition between the parties erupted in a period of extreme violence in Colombia, known as La Violencia , set off in 1948 by the assassination of Liberal presidential candidate Jorge Gait\u00e1n. The violence continued for the next decade. ", "After a brief military rule (1953-1958), the Liberal and Conservative parties agreed to a form of coalition governance, known as the National Front. Under the arrangement, the presidency of the country alternated between Conservatives and Liberals, each holding office in turn for four-year intervals. This form of government continued for 16 years (1958-1974). The power-sharing formula did not resolve the tension between the two historic parties, and many leftist, Marxist-inspired insurgencies took root in Colombia, including the FARC, launched in 1964, and the smaller National Liberation Army (ELN), which formed the following year. The FARC and ELN conducted kidnappings, committed serious human rights violations, and carried out a campaign of terrorist activities to pursue their goal of unseating the central government in Bogot\u00e1.", "Rightist paramilitary groups formed in the 1980s when wealthy ranchers and farmers, including drug traffickers, hired armed groups to protect them from the kidnapping and extortion plots of the FARC and ELN. In the 1990s, most of the paramilitary groups formed an umbrella organization, the United-Self Defense Forces of Colombia (AUC). The AUC massacred and assassinated suspected supporters of the insurgents and directly engaged the FARC and ELN in military battles. The Colombian military has long been accused of close collaboration with the AUC, accusations ranging from ignoring their activities to actively supporting them. Over time, the AUC became increasingly engaged in drug trafficking, and other illicit businesses. In the late 1990s and early 2000s, the U.S. government designated the FARC, ELN, and AUC as Foreign Terrorist Organizations (FTOs). The AUC was formally dissolved in a collective demobilization between 2003 and 2006 after many of its leaders stepped down. However, former paramilitaries joined armed groups (called criminal bands, or Bacrim, by the Colombian government) who continued to participate in the lucrative drug trade and commit other crimes and human rights abuses. When the FARC demobilized in 2017, other illegally armed groups began aggressive efforts to take control of former FARC territory and its criminal enterprises as FARC forces withdrew. (For more, see \" The Current Security Environment ,\" below.)"], "subsections": []}, {"section_title": "The Uribe Administration (2002-2010)", "paragraphs": ["The inability of Colombia's two dominant parties to address the root causes of violence in the country led to the election of an independent, \u00c1lvaro Uribe, in the presidential contest of 2002. Uribe, who served two terms, came to office with promises to take on the violent leftist guerrillas, address the paramilitary problem, and combat illegal drug trafficking.", "During the 1990s, Colombia had become the region's\u2014and the world's\u2014largest producer of cocaine. Peace negotiations with the FARC under the prior administration of President Andr\u00e9s Pastrana (1998-2002) had ended in failure; the FARC used a large demilitarized zone located in the central Meta department (see map, Figure 1 ) to regroup and strengthen itself. The central Colombian government granted the FARC this demilitarized zone, a traditional practice in Colombian peace negotiations, but the FARC used it to launch terror attacks, conduct operations, and increase the cultivation of coca and its processing, while failing to negotiate seriously. Many analysts, noting the FARC's strength throughout the country, feared that the Colombian state might fail and some Colombian citizens thought the FARC might at some point successfully take power. The FARC was then reportedly at the apogee of its strength, numbering an estimated 16,000 to 20,000 fighters under arms. ", "This turmoil opened the way for the aggressive strategy advocated by Uribe. At President Uribe's August 2002 inauguration, the FARC showered the event with mortar fire, signaling the group's displeasure at the election of a hardliner, who believed a military victory over the Marxist rebels was possible. In his first term (2002-2006), President Uribe sought to shore up and expand the country's military, seeking to reverse the armed forces' losses by aggressively combating the FARC. He entered into peace negotiations with the AUC. ", "President Pastrana had refused to negotiate with the rightist AUC, but Uribe promoted the process and urged the country to back a controversial Justice and Peace Law that went into effect in July 2005 and provided a framework for the AUC demobilization. By mid-2006, some 31,000 AUC paramilitary forces had demobilized. The AUC demobilization, combined with the stepped-up counternarcotics efforts of the Uribe administration and increased military victories against the FARC's irregular forces, helped to bring down violence, although a high level of human rights violations still plagued the country. Uribe became widely popular for the effectiveness of his security policies, a strategy he called \"Democratic Security.\" Uribe's popular support was evident when Colombian voters approved a referendum to amend their constitution in 2005 to permit Uribe to run for a second term. ", "Following his reelection in 2006, President Uribe continued to aggressively combat the FARC. For Uribe, 2008 was a critical year. In March 2008, the Colombian military bombed the camp of FARC's second-in-command, Raul Reyes (located inside Ecuador a short distance from the border), killing him and 25 others. Also in March, another of FARC's ruling seven-member secretariat was murdered by his security guard. In May, the FARC announced that their supreme leader and founder, Manuel Marulanda, had died of a heart attack. The near-simultaneous deaths of three of the seven most important FARC leaders were a significant blow to the organization. In July 2008, the Colombian government dramatically rescued 15 long-time FARC hostages, including three U.S. defense contractors who had been held captive since 2003 and Colombian senator and former presidential candidate Ingrid Bentancourt. The widely acclaimed, bloodless rescue further undermined FARC morale.", "Uribe's success and reputation, however, were marred by several scandals. They included the \"parapolitics\" scandal in 2006 that exposed links between illegal paramilitaries and politicians, especially prominent members of the national legislature. Subsequent scandals that came to light during Uribe's tenure included the \"false positive\" murders allegedly carried out by the military (primarily the Colombian Army) in which innocent civilians were executed and then dressed to look like guerilla fighters to increase the military's rebel body count. In 2009, the media revealed another scandal of illegal wiretapping and other surveillance by the government intelligence agency, the Department of Administrative Security (DAS), to discredit journalists, members of the judiciary, and political opponents of the Uribe government. (In early 2012, the tarnished national intelligence agency was replaced by Uribe's successor, Juan Manuel Santos.) Despite the controversies, President Uribe remained popular and his supporters urged him to run for a third term in 2010. Another referendum was proposed to alter the constitution to allow a third term; however, it was turned down by Colombia's Constitutional Court."], "subsections": []}, {"section_title": "The Santos Administration (2010-2018)", "paragraphs": ["Once it became clear that President Uribe was constitutionally ineligible to run again, Juan Manuel Santos of the pro-Uribe National Unity party (or Party of the U) quickly consolidated his preeminence in the 2010 presidential campaign. Santos, a centrist, who came from an elite family that once owned the country's largest newspaper, had served as Uribe's defense minister through 2009. In 2010, Santos campaigned on a continuation of the Uribe government's approach to security and its role encouraging free markets and economic opening, calling his reform policy \"Democratic Prosperity.\" In the May 2010 presidential race, Santos took almost twice as many votes as his nearest competitor, Antanas Mockus of the centrist Green Party, but he did not win a majority. Santos won the June runoff with 69% of the vote. Santos's \"national unity\" ruling coalition formed during his campaign included the center-right National Unity and Conservative parties, the centrist Radical Change Party, and the center-left Liberal party.", "On August 7, 2010, President Santos said in his first inauguration speech that he planned to follow in the path of President Uribe, but that \"the door to [peace] talks [with armed rebels] is not locked.\" The Santos government was determined to improve relations with Ecuador and Venezuela, which had become strained under Uribe. Santos sought to increase cooperation on cross-border coordination and counternarcotics. He attempted to reduce tensions with Venezuela that had become fraught under Uribe, who claimed that Venezuelan President Hugo Ch\u00e1vez had long harbored FARC and ELN forces.", "During his first two years in office, President Santos reorganized the executive branch and built on the market opening strategies of the Uribe administration and secured a free-trade agreement with the United States, Colombia's largest trade partner, which went into effect in May 2012. To address U.S. congressional concerns about labor relations in Colombia, including the issue of violence against labor union members, the United States and Colombia agreed to an \"Action Plan Related to Labor Rights\" (Labor Action Plan) in April 2011. Many of the steps prescribed by the plan were completed in 2011 while the U.S. Congress was considering the free trade agreement. ", "Significantly, the Santos government maintained a vigorous security strategy and struck hard at the FARC's top leadership. In September 2010, the Colombian military killed the FARC's top military commander, Victor Julio Su\u00e1rez (known as \"Mono Jojoy\"), in a bombing raid. In November 2011, the FARC's supreme leader, Guillermo Leon Saenz (aka \"Alfonso Cano\") was assassinated. He was replaced by Rodrigo Londo\u00f1o Echeverri (known as \"Timole\u00f3n Jim\u00e9nez\" or \"Timochenko\"), the group's current leader.", "While continuing the security strategy, the Santos administration began to re-orient the Colombian government's stance toward the internal armed conflict through a series of reforms. The first legislative reform that moved this new vision along, signed by President Santos in June 2011, was the Victims' and Land Restitution Law (Victims' Law), to provide comprehensive reparations to an estimated (at the time) 4 million to 5 million victims of the conflict. Reparations under the Victims' Law included monetary compensation, psycho-social support and other aid for victims, and the return of millions of hectares of stolen land to those displaced. The law was intended to process an estimated 360,000 land restitution cases. The government's implementation of this complex law began in early 2012. Between 2011 and 2016, there were more than 100,000 applications for restitution and 5,000 properties, or about 5%, were resolved by judges.", "The Victims' Law, while not a land reform measure, tackled issues of land distribution including the restitution of stolen property to displaced victims. Given the centrality of land issues to the rural peasant-based FARC, passage of the Victims' Law was a strong indicator that the Santos government shared its interest in addressing land and agrarian concerns. In June 2012, another government initiative\u2014the Peace Framework Law, also known as the Legal Framework for Peace\u2014was approved by the Colombian Congress, which signaled that congressional support for a peace process was growing.", "In August 2012, President Santos announced he had opened exploratory peace talks with the FARC and was ready to launch formal talks. The countries of Norway, Cuba, Venezuela, and Chile each held an international support role, with Norway and Cuba serving as peace talk hosts and \"guarantors.\" Following the formal start in Norway, the actual negotiations began a month later in mid-November 2012 in Cuba, where the FARC-government talks continued until their conclusion in August 2016. ", "In the midst of extended peace negotiations, Colombia's 2014 national elections presented a unique juncture for the country. During the elections, the opposition Centro Democr\u00e1tico (CD) party gained 20 seats in the Senate and 19 in the less powerful Chamber of Representatives, and its leader, former President Uribe, became a popular senator. His presence in the Senate challenged the new ruling coalition that backed President Santos. ", "During his second-term inaugural address in August 2014, President Santos declared three pillars\u2014peace, equality, and education\u2014as his focus, yet his top priority was to conclude the peace negotiations with the FARC. In February 2015, the Obama Administration provided support to the peace talks by naming Bernard Aronson, a former U.S. assistant secretary of state for Inter-American Affairs, as the U.S. Special Envoy to the Colombian peace talks. ", "Talks with the FARC concluded in August 2016. In early October, to the surprise of many, approval of the accord was narrowly defeated in a national plebiscite by less than a half percentage point of the votes cast, indicating a polarized electorate. Regardless, President Santos was awarded the Nobel Peace Prize in December 2016, in part demonstrating strong international support for the peace agreement. In response to the voters' criticisms, the Santos government and the FARC crafted a modified agreement, which they signed on November 24, 2016. Rather than presenting this agreement to a plebiscite, President Santos sent it directly to the Colombian Congress, where it was ratified on November 30, 2016. Although both chambers of Colombia's Congress approved the agreement unanimously, members of the opposition CD party criticized various provisions in the accord that they deemed inadequate and boycotted the vote. ", "The peace process was recognized as the most significant achievement of the Santos presidency and lauded outside of Colombia and throughout the region. Over the course of two terms, the President's approval ratings rose and fell rather significantly. His crowning achievement, the accord negotiated over 50 rounds of talks, covered five substantive topics: rural development and agricultural reform; political participation by the FARC; an end to the conflict, including demobilization, disarmament and reintegration; a solution to illegal drug trafficking; and justice for victims. A sixth topic provided for mechanisms to implement and monitor the peace agreement. "], "subsections": []}, {"section_title": "A New Legislature and President in 2018", "paragraphs": ["Colombians elected a new congress in March 2018 and a new president in June 2018. Because no presidential candidate won more than 50% of the vote on May 27, 2018, as required for a victory in the first round, a second-round runoff was held June 17 between the rightist candidate Iv\u00e1n Duque and the leftist candidate Gustavo Petro (see results for presidential contest, Figure 3 ). Duque was carried to victory with almost 54% of the vote. Runner-up Petro, a former mayor of Bogot\u00e1, a former Colombian Senator, and once a member of the M-19 guerilla insurgency, nevertheless did better than any leftist candidate in a presidential race in the past century; he won 8 million votes and nearly 42% of the votes cast. Around 4.2% were protest votes, signifying Colombian voters who cast blank ballots.", "Through alliance building, Duque achieved a functional majority or a \"unity\" government, which involved the Conservative Party, Santos's prior National Unity or Party of the U, joining the CD, although compromise was required to keep the two centrist parties in sync with the more conservative CD. In the new Congress, two extra seats, for the presidential and vice presidential runners up, became automatic seats in the Colombian Senate and House, due to a constitutional change in 2015, allowing presidential runner up Gustavo Petro to return to the Senate. The CD party, which gained seats in both houses in the March vote, won the majority in the Colombian Senate (see Figure 2 for seat breakouts by party).", "Duque, who was inaugurated on August 7, 2018, at the age of 42, was the youngest Colombian president elected in a century. He possessed limited experience in Colombian politics. Duque was partially educated in the United States and worked for at decade at the Inter-American Development Bank in Washington, DC. He was the handpicked candidate of former president Uribe, who vocally opposed many of Santos's policies. Disgruntled Colombians perceived Santos as an aloof president whose energy and political capital were expended accommodating an often-despised criminal group, the FARC. President Duque appeared to be technically oriented and interested in economic reform, presenting himself as a modernizer.", "During his campaign, Duque called for economic renewal and lower taxes, fighting crime, and building renewed confidence in the country's institutions through some reforms. On September 26, 2018, in a speech before the U.N. General Assembly, the new president outlined his policy objectives . Duque called for increasing legality, entrepreneurship, and fairness by (1) promoting peace; (2) combating drug trafficking and recognizing it as a global menace, and (3) fighting corruption, which he characterized as a threat to democracy. He also maintained that the humanitarian crisis in neighboring Venezuela, resulting in more than 1 million migrants fleeing to Colombia, was an emergency that threatened to destabilize the region. Duque proposed a leadership role for Colombia in denouncing the authoritarian government of President Nicol\u00e1s Maduro and containing his government's damage. By late November 2018, 1.2 million Venezuelans already present in Colombia were putting increasing pressure on the government's finances, generating a burden estimated at nearly 0.5% of the country's gross domestic product (GDP).", "President Duque, along with his vice president, Marta Luc\u00eda Ram\u00edrez, who initially ran as the Conservative Party candidate in the first round, recommended that drug policy shift back to a stricter counterdrug approach rather than a model endorsed in the peace accord, which focuses on voluntary eradication and economic support to peasant farmers to transition away from illicit drug crops. Duque campaigned on returning to spraying coca crops with the herbicide glyphosate. This would reverse Colombia's decision in mid-2015 to end aerial spraying, which had been a central\u2014albeit controversial\u2014feature of U.S.-Colombian counter-drug cooperation for two decades. ", "Colombians' concerns with corruption became particularly acute during the 2018 elections, as major scandals were revealed. Similar to many countries in the region, government officials, including Santos during his 2014 campaign for reelection and the opposition candidate during that campaign were accused of taking payoffs (bribes) from the Odebrecht firm, the Brazilian construction company that became embroiled in a region-wide corruption scandal. In December 2018, presidential runner up Gustavo Petro was accused of taking political contributions from Odebrecht in a video released by a CD senator, indicating that both the left and the right of the Colombian political spectrum has been tainted by corruption allegations.", "In June 2017, the U.S. Drug Enforcement Administration arrested Colombia's top anti-corruption official, Gustavo Moreno. In mid-September 2017, the former chief justice of Colombia's Supreme Court was arrested for his alleged role in a corruption scandal that involved other justices accused of taking bribes from Colombian congressmen, some with ties to illegal paramilitary groups. The series of corruption charges made against members of Colombia's judicial branch, politicians, and other officials made the issue a prominent one in Colombian politics and was the focus of a left-centrist candidate's campaign in the presidential contest.", "In late August 2018, an anti-corruption referendum was defeated by narrowly missing a high vote threshold by less than a half percentage point, although the actual vote favored all seven proposed changes on the ballot. President Duque endorsed the referendum and maintains he will seek to curb many of the abuses identified in the referendum through legislation that his administration will propose. ", "The Duque Administration's first budget for 2019 presented in late October 2018 was linked to an unpopular tax reform that would expand a value-added tax to cover basic food and agricultural commodities (some 36 items in the basic basket of goods, such as eggs and rice, previously exempted). The 2019 budget totals $89.7 billion, providing the education, military and police, and health sectors with the biggest increases, and reducing funding for peace accord implementation. Duque's own Democratic Center party split with him on the value-added tax, which quickly sank his approval ratings from 53% in early September 2018 to a low of 27% in November 2018, among the lowest levels in the early part of a presidential mandate in recent Colombian history."], "subsections": []}, {"section_title": "Economic Background", "paragraphs": ["Colombia's economy is the fourth largest in Latin America after Brazil, Mexico, and Argentina. The World Bank characterizes Colombia as an upper middle-income country, although its commodities-dependent economy has been hit by oil price declines and peso devaluation related to the erosion of fiscal revenue. Between 2010 and 2014, Colombia's economy grew at an average of more than 4%, but slowed to 3.1% GDP growth in 2015. In 2017, Colombia's GDP growth slowed further to 1.7%. Despite its relative economic stability, high poverty rates and inequality have contributed to social upheaval in Colombia for decades. The poverty rate in 2005 was slightly above 45%, but declined to below 27% in 2016. The issues of limited land ownership and high rural poverty rates remain a problem. ", "According to a United Nations study published in 2011, 1.2% of the population owned 52% of the land, and data revealed in 2016 that about 49% of Colombians continued to work in the informal economy. Colombia is often described as a country bifurcated between metropolitan areas with a developed, middle-income economy, and some rural areas that are poor, conflict-ridden, and weakly governed. The fruits of the growing economy have not been shared equally with this ungoverned, largely rural periphery. Frequently these more remote areas are inhabited by ethnic minorities or other disadvantaged groups, such as Afro-Colombians, indigenous populations, or landless peasants and subsistence farmers, who are vulnerable to illicit economies due to few connections to the formal economy.", "The United States is Colombia's leading trade partner. Colombia accounts for a small percentage of U.S. trade (approximately 1%), ranking 22 nd among U.S. export markets and 27 th among foreign exporters to the United States in 2017. Colombia has secured free trade agreements with the European Union, Canada, and the United States, and with most nations in Latin America. Colombian officials have worked over the past decade to increase the attractiveness of investing in Colombia, and foreign direct investment (FDI) grew by 16% between 2015 and 2016. This investment increase came not only from the extractive industries, such as petroleum and mining, but also from such areas as agricultural products, transportation, and financial services.", "Promoting more equitable growth and ending the internal conflict were twin goals of the two-term Santos administration. Unemployment, which historically has been high at over 10%, fell below that double-digit mark during Santos's first term and remained at 9.2% in 2016 but rose slightly to an estimated 9.6% in 2018. ", "Although Colombia is ranked highly for business-friendly practices and has a favorable regulatory environment that encourages trade across borders, it is still plagued by persistent corruption and an inability to effectively implement institutional reforms it has undertaken, particularly in regions where government presence is weak. According to the U.S. State Department in its analysis of national investment climates, Colombia has demonstrated a political commitment to create jobs, develop sound capital markets, and achieve a legal and regulatory system that meets international norms for transparency and consistency. ", "Despite its macroeconomic stability, several issues remain, such as a still-complicated tax system, a high corporate tax burden, and continuing piracy and counterfeiting issues. Colombia's rural-sector protestors formed strikes and blockades beginning in 2013 with demands for long-term and integrated-agricultural reform in a country with one of the most unequal patterns of land ownership. In October and November 2018, Colombian secondary and university students protested in high numbers during six large mobilizations, taking place over 60 days, to demand more funding for education. "], "subsections": []}]}, {"section_title": "Peace Accord Implementation", "paragraphs": ["The four-year peace talks between the FARC and the Santos administration started in Norway and moved to Cuba where negotiators worked through a six-point agenda during more than 50 rounds of talks that produced agreements on six major topics. The final topic\u2014verification to enact the programs outlined in the final accord\u2014all parties knew would be the most challenging, especially with a polarized public and many Colombians skeptical of whether the FARC would be held accountable for its violence and crimes during the years of conflict. ", "Some analysts have estimated that to implement the programs required by the commitments in the accord to ensure stable post-conflict development may require 15 years and cost from $30 billion to $45 billion. The country faces steep challenges to underwrite the post-accord peace programs in an era of declining revenues. While progress has been uneven, some programs (those related to drug trafficking) had external pressure to move forward quickly and some considered urgent received \"fast track\" treatment to expedite their regulation by Congress. The revised peace accord that was approved by the Colombian Congress in late 2016 was granted fast track implementation by the Colombian Constitutional Court in a ruling on December 13, 2016, particularly applied to the FARC's disarmament and demobilization. However, in May 2017, a new ruling by the high court determined that all legislation related to the implementation of the accord needed to be fully debated rather than passed in an expedited fashion, which some analysts maintain started to slow the process of implementing the accord significantly.", "The Kroc Institute for International Peace Studies at the University of Notre Dame is responsible for monitoring and implementing the agreement. It issued two interim reports in November 2017 and August 2018. At the end of the last reporting period (June 2018), the Kroc Institute estimated that 63% of the 578 peace accord commitments have begun implementation. In relation to other peace accords it had studied, the Kroc Institute found that the implementation of Colombia's accord was on course as about average, although that progress took place prior to President Duque's election.", "The first provision undertaken was the demobilization of the FARC, monitored by a U.N. mission that was approved by the U.N. Security Council to verify implementation of the accords. U.N. monitors also emptied large arm caches identified by FARC leaders, seizing the contents of more than 750 of the reported nearly 1,000 caches by the middle of 2017. With the final disarmament, President Santos declared the conflict over in mid-August 2017. The U.S. State Department reported in its Country Reports on Terrorism 201 , that by September 25, 2017, the United Nations had verified the collection of 8,994 arms, 1.7 million rounds, and more than 40 tons of explosives. The report states that the Colombian government had accredited \"roughly 11,000 ex-combatants for transition to civilian life.\"", "The FARC also revealed its hidden assets in September 2017, listing more than $330 million in mostly real estate investments. This announcement drew criticism from several analysts who note that the FARC assets are likely much greater. In July 2017, the U.N. Security Council voted to expand its mandate and launch a second mission for three years to verify the reintegration of FARC guerrillas into civil society beginning September 20, 2017.", "One of Colombia's greatest challenges continues to be ensuring security for ex-combatants and demobilized FARC. The FARC's reintegration into civil society is a charged topic because the FARC's efforts in the 1980s to start a political party, known as the Patriotic Union, or the UP by its Spanish acronym, resulted in more than 3,000 party members being killed by rightwing paramilitaries and others. As of the end of 2018, reportedly 85 FARC members and their close relatives had been killed. In addition to unmet government guarantees of security, the FARC also has criticized the government for not adequately preparing for the group's demobilization. According to observers, the government failed to provide basic resources to FARC gathered throughout the country in specially designated zones for disarmament and demobilization (later renamed reintegration zones). The demobilization areas or cantonments had been so little prepared in early 2017 that the FARC had in many cases to construct their own housing and locate food and other provisions.", "Reintegration of former combatants has proceeded slowly. The Constitutional Court's May 2017 ruling to restrict fast track, and controversy about the new court to try war crimes and other serious violations, the \"Special Jurisdiction of Peace\" led to further delays. Peace process advocates have cited limited attention to include ethnic Colombians, such as Afro-Colombian leaders and indigenous communities, into the accord's implementation, as required by the \"ethnic chapter\" of the peace accord. A U.N. deputy human rights official warned in October 2017 that after a successful demobilization it would be dangerous not to reintegrate FARC former combatants by providing them realistic options for income and delaying effective reintegration could undermine peace going forward. ", "Under the peace accord, Territorially Focused Development Programs (PDETs in Spanish) are a tool for planning and managing a broad rural development process, with the aim of transforming170 municipalities (covering 16 subregions) most affected by the armed conflict. PDETs target those municipalities in Colombia with the highest number of displacements and those that have experienced the most killings, massacres, and forced disappearances. These marginal areas generally have experienced chronic poverty, high inequality, the presence of illicit crops such as coca, and low levels of local government institutional performance. Violence and forced displacements in some of the PDET municipalities increased in the last half of 2018.", "Colombia's Constitutional Court determined in October 2017 that over the next three presidential terms (until 2030), Colombia must follow the peace accord commitments negotiated by the Santos administration and approved by the Colombian Congress in 2016. The Special Jurisdiction of Peace, set up to adjudicate the most heinous crimes of Colombia's decades-long armed conflict, began to hear cases in July 2018. However, Colombians remain skeptical of its capacity. A key challenge is the case of a FARC leader and lead negotiator in the peace process, Jes\u00fas Santrich, alleged to have committed drug trafficking crimes in 2017 after the accord was ratified, who has been jailed."], "subsections": []}, {"section_title": "The Current Security Environment", "paragraphs": ["Colombia has confronted a complex security environment of armed groups: two violent leftist insurgencies, the FARC and the ELN, and groups that succeeded the AUC following its demobilization during the Uribe administration. ", "The FARC, whittled down by the government's military campaign against it, continued to conduct a campaign of terrorist activities during peace negotiations with the government through mid-2015, but it imposed successive temporary unilateral cease-fires that significantly reduced violence levels. In August 2016, the FARC and the government concluded negotiations on a peace accord that was subsequently approved by Congress with modifications in November 2016. Authorities and some analysts maintain that since the peace accord was ratified, 5% to 10% of the FARC have become dissidents who reject the peace settlement, although other estimates suggest a higher percentage. These armed individuals remain a threat. ", "As agreed in the peace accord, the demobilized rebels transitioned to a political party that became known as the Common Alternative Revolutionary Force (retaining the acronym FARC) in September 2017. On November 1, 2017, the FARC announced their party's presidential ticket: current FARC leader Rodrigo Londo\u00f1o (aka Timochenko) for president and Imelda Daza for vice president. The FARC Party ran several candidates in congressional races but failed to win any additional congressional race for which it competed in the March 2018 legislative elections, so the automatic seats in Congress were the only ones that it filled. ", "The ELN, like the FARC, became deeply involved in the drug trade and used extortion, kidnapping, and other criminal activities to fund itself. The ELN, with diminished resources and reduced offensive capability, according to government estimates, declined to fewer than 2,000 fighters, although some analysts maintain in 2018 the forces grew as high as 3,400, including former FARC who were recruited to join the ELN as the larger rebel group demobilized. In 2015, ELN leadership began exploratory peace talks with the Santos government in Ecuador, although the ELN continued to attack oil and transportation infrastructures and conduct kidnappings and extortions, at least periodically. Formal talks with the ELN finally opened in February 2017 in Quito, Ecuador. After the talks moved to Cuba in May 2018, at the request of Ecuador's President Len\u00edn Moreno, several negotiating sessions took place. The ELN's central leadership, including Nicol\u00e1s Rodr\u00edguez Bautista (aka \"Gabino\"), arrived in Cuba to continue the talks. However, President Duque in September 2018 suspended the talks and recalled the government negotiating team. The ELN is far more regionally oriented, decentralized, and nonhierarchical in its decisionmaking than the FARC. Late in 2018, a Colombian political online magazine claimed a meeting had been held two months earlier between FARC dissident groups and the ELN in Venezuela in which the parties discussed how to increase their coordination.", "On January 17, 2019, a car bomb attack at a National Police academy in southern Bogot\u00e1 shattered illusions that Colombia's long internal conflict with insurgents was coming to an end. The bombing, allegedly carried out by an experienced ELN bomb maker, killed 20 police cadets and the bomber and injured more than 65 others. The ELN took responsibility for the attack in a statement published on January 21. Large demonstrations took place in Bogot\u00e1 protesting the return of violence to Colombia's capital city. The Duque government ended peace talks with the ELN, which had been ongoing sporadically since 2017. The Duque government then requested extradition of the ELN's delegation of negotiators to the peace talks in Cuba on terrorism charges. The Cuban government, which condemned the bombing, responded that the protocols for the peace talks required that the negotiators be returned to Colombia without arrest. The Duque government has persisted in requesting the negotiators to be extradited.", "The AUC, the loosely affiliated national umbrella organization of paramilitaries, officially disbanded a decade ago. The organization was removed from the State Department's Foreign Terrorist Organizations list in July 2014. More than 31,000 AUC members demobilized between 2003 and 2006, and many AUC leaders stepped down. However, as noted, many former AUC paramilitaries continued their illicit activities or re-armed and joined criminal groups\u2014known as Bacrim . Many observers view the Bacrim as successors to the paramilitaries, and the Colombian government has characterized these groups as the biggest threat to Colombia's security since 2011. The Bacrim do not appear to be motivated by the dream of defeating the national government, but they seek territorial control and appear to provide rudimentary justice in ungoverned parts of the country. ", "In 2013, the criminal group Los Urabe\u00f1os, launched in 2006, emerged as the dominant Bacrim. Over its lifetime, the group has been referred to as the Gaitanistas, the Clan \u00dasuga, and most recently El Clan del Golfo, growing to about 3,000 members by 2015. The Urabe\u00f1os organization is heavily involved in cocaine trafficking as well as arms trafficking, money laundering, extortion, gold mining, human trafficking, and prostitution. Early leaders of the group, such as founder Daniel Rend\u00f3n Herrera (alias \"Don Mario\") and his brother Feddy Rend\u00f3n Herrera were designated drug kingpins under the U.S. Kingpin Act in 2009 and 2010, respectively. However, because these men had been part of the AUC peace process, they could not be extradited to the United States until they had served time and paid reparations. ", "In June 2015, the Justice Department unsealed indictments against 17 alleged Urabe\u00f1os members. The Colombian government's efforts to dismantle the Urabe\u00f1os and interrupt its operations began to result in the capture of top leaders and gradually to disrupt its illicit activities. The Urabe\u00f1os faced an intense enforcement campaign by the Colombian police and military, especially after the Urabe\u00f1os reportedly advertised and paid rewards to its subcontracted assassins to murder Colombian police. In September 2017, the Urabe\u00f1os top leader, Dairo Antonio \u00dasuga (alias \"Otoniel\"), requested terms of surrender from the Santos government after the arrest of his wife and the killing or arrest of siblings and co-leaders, but this offer was never formalized. Colombia captured a vast amount of cocaine, approximately 12 metric tons, linked to the the Urabe\u00f1os in November 2017.", "Splinter groups of the large Colombian drug cartels of the 1980s and 1990s, such as the Medellin Cartel and Cali Cartel, have come and gone in Colombia, including the powerful transnational criminal organizations (TCOs) the Norte del Valle Cartel and Los Rastrajos. The U.S. Drug Enforcement Administration's 2018 National Drug Threat Assessment maintains \"large-scale Colombian TCOs\" work closely with Mexican and Central American TCOs to export large quantities of cocaine out of Colombia every year. Traditionally, the FARC and ELN had cooperated with Bacrim and other Colombian crime groups in defense of drug trafficking and other illicit activities despite the groups' ideological differences. ", "Venezuela is a major transit corridor for Colombian cocaine. According to the State Department's 2018 International Narcotics Control Strategy Report , Venezuela's porous western border with Colombia, current economic crisis, weak judicial system, sporadic international drug control cooperation, and a permissive and corrupt environment make it a preferred trafficking route for illicit drugs. A May 2018 report by Insight Crime identified more than 120 high-level Venezuelan officials who have engaged in criminal activity. The report analyzes how the Venezuelan military, particularly the National Guard, has been involved in the drug trade since 2002 and colluded with other illegally armed groups. ", "Another Bacrim, Los Rastrojos, reportedly controls important gasoline smuggling routes between Venezuela and Colombia in 2018. Similarly, in the past year, ELN guerrillas reportedly have moved from seeking safe haven in Venezuela to taking control of illicit gold mining areas near Venezuela's border with Guyana. Both the ELN, which is still engaged in armed conflict with the Colombian government, and its rival, the Popular Liberation Army (EPL), reportedly recruit Venezuelans to cultivate coca in Colombia. Human trafficking and sexual exploitation of Venezuelan migrants throughout Colombia is prevalent. Dissident FARC guerrillas are using border areas and other remote areas in the countryside to regroup and could eventually seek to consolidate into a more unified organization or coordinate with other criminal groups sheltering in Venezuela. ", "The State Department's 2017 terrorism report published in April 2018 maintained that the number of terrorist incidents in Colombia\u2014carried out by the FARC and ELN\u2014decreased significantly, by 40%, over the already much-diminished level of 2016. ELN aggression included high-impact attacks, such as launching mortars at police stations and bombing pipelines, although the report also states that ELN demobilizations and surrenders have increased."], "subsections": [{"section_title": "Instability in Venezuela Drives a Regional Migrant Crisis61", "paragraphs": ["The humanitarian crisis in Venezuela has set in motion a mass exodus of desperate migrants, who have come temporarily (or for extended stays) to Colombia. Although Venezuela has experienced hyperinflation (the highest in the world), a rapid contraction of its economy, and severe shortages of food and medicine, as of November 2018 Venezuelan President Nicol\u00e1s Maduro has refused most international humanitarian assistance. Based on estimates from the U.N. High Commissioner for Refugees (UNHCR), as of November 2018, more than 3 million Venezuelans were living outside Venezuela; of these, an estimated 2.3 million left after 2015. As conditions in Venezuela have continued to deteriorate, increasing numbers of Venezuelans have left the country. Neighboring countries, particularly Colombia, are straining to absorb a migrant population that is often malnourished and in poor health. The spread of previously eradicated diseases, such as\u00a0measles, is also a major regional concern.", "In January 2019, the Trump Administration announced backing for the president of the Venezuelan National Assembly, Juan Guaid\u00f3, as interim president of Venezuela. The Trump Administration has called for Maduro's departure, and Colombia joined many other countries in Latin America and Europe to recognize Guaid\u00f3. U.S. Secretary of State Michael Pompeo announced that the United States was prepared to provide $20 million in humanitarian assistance to the people of Venezuela. Colombia joined 11 countries in the Lima Group that declared on February 4, 2019, their desire to hasten a return to democracy in Venezuela by working with Guaid\u00f3 for a peaceful transition without the use of force. "], "subsections": []}]}, {"section_title": "Ongoing Human Rights Concerns", "paragraphs": ["Colombia's multisided internal conflict over the last half century generated a lengthy record of human rights abuses. Although it is widely recognized that Colombia's efforts to reduce violence, combat drug trafficking and terrorism, and strengthen the economy have met with success, many nongovernmental organizations (NGOs) and human rights groups continue to report significant human rights violations, including violence targeting noncombatants, that involves killings, torture, kidnappings, disappearances, forced displacements, forced recruitments, massacres, and sexual attacks.", "The Center for Historical Memory report issued to the Colombian government in July 2013 traces those responsible for human rights violations to the guerrillas (the FARC and ELN), the AUC paramilitaries and successor paramilitary groups, and the Colombian security forces. In analyzing nearly 2,000 massacres between 1980 and 2012 documented in the center's database, the report maintains that 58.9% were committed by paramilitaries, 17.3% by guerrillas, and 7.9% by public security forces. According to the U.S. State Department's annual report on human rights covering 2017, Colombia's most serious human rights abuses centered on extrajudicial and unlawful killings; torture and detentions; rape and sexual crimes. In addition to the State Department, numerous sources report regularly on human rights conditions in Colombia. (See Appendix .) ", "Colombia continues to experience murders and threats of violence against journalists, human rights defenders, labor union members, social activists such as land rights leaders, and others. Crimes of violence against women, children, Afro-Colombian and indigenous leaders, and other vulnerable groups continue at high rates. In December 2018, the U.N. special rapporteur on human rights defenders came out with strong criticism of heightened murders of human rights defenders, which he maintained were committed by hitmen paid no more than $100 per murder, according to reports he heard from activists and other community members whom he met with during a trip to Colombia. These ongoing issues reflect constraints of the Colombian judicial system to effectively prosecute crimes and overcome impunity."], "subsections": [{"section_title": "Extrajudicial Executions and \"False Positives\"", "paragraphs": ["For many years, human rights organizations have raised concerns about extrajudicial executions committed by Colombian security forces, particularly the military. In 2008, it was revealed that several young men from the impoverished community of Soacha\u2014who had been lured allegedly by military personnel from their homes to another part of the country with the promise of employment\u2014had been executed. When discovered, the Soacha murder victims had been disguised as guerrilla fighters to inflate military claims of enemy body counts, resulting in the term false positives . Following an investigation into the Soacha murders, the military quickly fired 27 soldiers and officers, including three generals, and the army's commander resigned. The Colombian prosecutor general's criminal investigations of soldiers and officers who allegedly participated in the Soacha executions have proceeded quite slowly. Some 48 of the military members eventually charged with involvement in the Soacha cases were released due to the expiration of the statute of limitations. Whereas some soldiers have received long sentences, few sergeants or colonels have been successfully prosecuted. ", "In 2009, the false positive phenomenon was investigated by the U.N.'s Special Rapporteur on Extrajudicial Executions, who issued a report that concluded with no finding that such killings were a result of an official government policy. However, the Special Rapporteur did find, \"the sheer number of cases, their geographic spread, and the diversity of military units implicated, indicate that these killings were carried out in a more or less systematic fashion by significant elements within the military.\" The majority of the cases took place between 2004 and 2008, when U.S. assistance to Colombia peaked. In recent years, the number of new alleged false positive cases declined steeply, but human rights NGOs still reported a few cases in 2012 through 2015. ", "To address the military's human rights violations, the Santos administration proposed a change to policy that did not prevail. This reform was a constitutional change to expand the jurisdiction of military courts and, it was approved by the Colombian Congress in late December 2012 by a wide margin despite controversy. Human rights groups criticized the legislation's shift in the jurisdiction over serious human rights crimes allegedly committed by Colombia's public security forces from the civilian to the military justice system. In its review of the constitutional amendment, the Colombian Constitutional Court struck down the law over procedural issues in October 2013. ", "Human Rights Watch in a 2015 report on the false positive cases noted that prosecutors in the Human Rights Unit of the Prosecutor General's Office conducted investigations into more than 3,000 false positive homicide cases allegedly committed by army personnel that resulted in about 800 convictions, mostly of lower-ranking soldiers. Only a few of those convictions involved former commanders of battalions or other tactical units, and none of the investigations of 16 active and retired army generals had produced charges. In 2016, the prosecutions against generals accused of responsibility for false positives continued, although a few were closed and 12 remained under investigation at year's end. Additionally, in October 2016, the Colombian prosecutor general indicted Santiago Uribe, the brother of former President Uribe, on charges of murder and association to commit crimes for his alleged role in the paramilitary group \"The 12 Apostols\" in the 1990s. The State Department human rights report covering 2017, maintains that during the year through July, four new cases involving \"aggravated homicide\" committed by security forces and 11 new convictions were reached for \"simple homicide\" by security force members."], "subsections": []}, {"section_title": "Human Rights Defenders and Journalists", "paragraphs": ["Although estimates diverge, the number of human rights defenders murdered in 2016 totaled 80 and another 51 in the first half of 2017, according to Somos Defensores (\"We are Defenders\"), a Colombian NGO that tracks violence against defenders and is cited by the State Department. Some groups, such as the Colombian think tank, Indepaz, say the numbers are higher, up to 117 murders in 2016. In the two years since the approval of the 2016 peace accord, social leaders, ethnic community leaders, and human rights defenders have suffered from continued high levels of violence. Human rights organizations cite the murders of more than 100 activists in 2017 and in 2018. Of the 109 human rights and civil society activists killed in 2018 through November, some were leaders of efforts to implement the 2016 peace accord. For instance, 13 social leaders were assassinated in the southwest department of Cauca in the first six months of the year, a department in Colombia with the fourth largest area devoted to coca cultivation in the country and host to several peace accord programs associated with rural development, including voluntary eradication of drug crops. Few, if any, of those accused of making threats and ordering or carrying out assassinations have been prosecuted. According to these activists, perpetrators still have little to fear of legal consequences. ", "Since early 2012, violence against land rights activists has risen sharply with the start of implementation of the Victims' Law that authorized the return of stolen land. A September 2013 report by Human Rights Watch pointing to the rise in violence against land activists and claimants maintained that the environment had turned so threatening that claimants who had received land judgments were too frightened to return, and the government had received more than 500 serious threats against claimants in less than 18 months. According to Human Rights Watch, many of the threats and killings have been conducted by paramilitary-influenced Bacrim, although they may be operating at the behest of third-party \"landowners,\" who are trying to protect their land from seizure. ", "For more than a decade, the Colombian government tried to suppress violence against groups facing extraordinary risk through the National Protection Unit (UPN) programs. Colombia's UPN provides protection measures, such as body guards and protective gear, to individuals in at-risk groups, including human rights defenders, journalists, trade unionists, and others. However, according to international and Colombian human rights groups, the UPN has been plagued by corruption issues and has inadequately supported the prosecution of those responsible for attacks. According to the State Department's Report on Human Rights Practices covering 2017, the UPN protected roughly 6,067 at-risk individuals, including 575 human rights activists, with a budget of $150 million. Journalists, a group that has traditionally received protection measures from the UPN, continue to operate in a dangerous environment in Colombia. According to the Committee to Protect Journalists (CPJ), 47 journalists have been killed in work-related circumstances since 1992. Three Ecuadorian journalists were killed by a FARC dissident group close to the border of Ecuador in 2018, leading to the end of the Colombian government's peace talks with the ELN in Ecuador and their subsequent move to Cuba.", "To help monitor and verify that human rights were respected throughout implementation of the peace accord, the government formally renewed the mandate of the U.N.'s High Commissioner of Human Rights in 2016 for three years. "], "subsections": []}, {"section_title": "Violence and Labor", "paragraphs": ["The issue of violence against the labor movement in Colombia has sparked controversy and debate for years. Many human rights groups and labor advocates have maintained that Colombia's poor record on protecting its trade union members and leaders from violence is one reason to avoid closer trade relations with Colombia. The U.S.-Colombia Free Trade Agreement (also known as the U.S.-Colombia Trade Promotion Agreement) could not be enacted without addressing the deep concern of many Members of Congress that Colombia must enforce basic labor standards and especially measures to mitigate the alleged violence against trade union members and bring perpetrators of such violence to justice. ", "In April 2011, the United States and Colombia agreed to an \"Action Plan Related to Labor Rights\" (the Labor Action Plan, LAP), which contained 37 measures that Colombia would implement to address violence, impunity, and workers' rights protection. Before the U.S.-Colombia Free Trade Agreement entered into force in April 2012, the U.S. Trade Representative determined that Colombia had met all the important milestones in the LAP to date. ", "Despite the programs launched and measures taken to implement the LAP, human rights and labor organizations claim that violence targeting labor union members continues. (Some analysts continue to debate whether labor activists are being targeted because of their union activities or for other reasons.) The Colombian government has acknowledged that violence and threats continue, but points to success in reducing violence generally and the number of homicides of labor unionists specifically. Violence levels in general are high in Colombia, but have steadily been decreasing. According to the data reported by the U.N. Office on Drugs and Crime (UNODC) in its annual homicide report, rates have decreased dramatically since 2002, when the homicide rate was at 68.9 per 100,000. The Colombian Ministry of Defense reported in 2016 that the homicide rate had declined to 24.4 per 100,000.", "In this context of an overall steady decline in homicides, the number of labor union killings has also declined. For many years, the government and the leading NGO source that tabulates these crimes did not agree on the number of labor union murders because they used different methodologies. Both sources recorded a decline, but the government generally saw a steeper decline. According to the Colombian labor rights NGO and think tank, the National Labor School ( Escuela Nacional Sindical , ENS), there has been a significant decline from 191 labor union murders in 2001 to 20 reported in 2012. In 2017, through the month of August the ENS reported 14 labor murders. Of the cases covering homicides between January 2011 and August 2017, 162 homicide cases in which victims were labor union members, were 409 convictions, 31 for cases after 2011 and 378 for cases before 2011.", "In addition, labor advocates note that tracking homicides does not capture the climate of intimidation that Colombian labor unions face. In addition to lethal attacks, trade union members encounter increased death threats, arbitrary detention, and other types of harassment. Measures to strengthen the judicial system to combat impunity for such crimes are also part of the Labor Action Plan. Nevertheless, many analysts maintain there remains a large backlog of cases yet to be investigated involving violent crimes against union members. "], "subsections": []}, {"section_title": "Internal Displacement", "paragraphs": ["The internal conflict has been the major cause of a massive displacement of the civilian population that has many societal consequences, including implications for Colombia's poverty levels and stability. Colombia has one of the largest populations of internally displaced persons (IDPs) in the world. Most estimates place the total at more than 7 million IDPs, or more than 10% of Colombia's estimated population of 49 million. This number of Colombians, forcibly displaced and impoverished as a result of the armed conflict, continues to grow and has been described by many observers as a humanitarian crisis. Indigenous and Afro-Colombian people make up an estimated 15%-22% of the Colombian population. They are, however, disproportionately represented among those displaced. The leading Colombian NGO that monitors displacement, Consultancy for Human Rights and Displacement (CODHES), reports that 36% of the victims of forced displacement nationwide in 2012 came from the country's Pacific region where Afro-Colombian and indigenous people predominate. ", "The Pacific region has marginal economic development as a result of weak central government presence and societal discrimination. (Some 84% of the land in the Pacific region is subject to collective-title rights granted to Afro-Colombian and indigenous communities. ) Illegal armed groups are active in usurping land in this region, which is valued for its proximity to a major port and drug trafficking routes, and the Afro- and indigenous communities are also caught in the middle of skirmishes between illegal groups and Colombian security forces.", "IDPs suffer stigma and poverty and are often subject to abuse and exploitation. In addition to the disproportionate representation of Colombia's ethnic communities among the displaced, other vulnerable populations, including women and children, have been disproportionally affected. Women, who make up more than half of the displaced population in Colombia, can become targets for sexual harassment, violence, and human trafficking. Displacement is driven by a number of factors, most frequently in more remote regions of the country where armed groups compete and seek to control territory or where they confront Colombian security forces. Violence that uproots people includes threatened or actual child recruitment or other forced recruitment by illegal armed groups, as well as physical, psychological, and sexual violence. Other contributing factors reported by NGOs include counternarcotics measures such as aerial spraying, illegal mining, and large-scale economic projects in rural areas. Inter-urban displacement is a growing phenomenon in cities such as Buenaventura and Medellin, which often results from violence and threats by organized crime groups. ", "The Victims' Law of 2011, which began to be implemented in 2012, is the major piece of legislation to redress Colombian displacement victims with the return of their stolen land. The historic law provides restitution of land to those IDPs who were displaced since January 1, 1991. The law aims to return land to as many as 360,000 families (impacting up to 1.5 million people) who had their land stolen. The government notes that some 50% of the land to be restituted has the presence of land mines and that the presence of illegally armed groups in areas where victims have presented their applications for land restitution has slowed implementation of the law.", "Between 2011 and 2016, 100,000 applications for land restitution were filed and approximately 5,000 properties (roughly 5% of applications) were successfully returned following judgements on the cases. With the international support from U.S. Agency for International Development (USAID) and other donors, a Victims Unit was established to coordinate the range of services for victims, including financial compensation and psychosocial services, provided by a host of government agencies. The 2011 Victims' Law is considered a model and particularly the implementation of a Victims' registry, which was supported by USAID. Through its Victims Unit, the Colombian government had provided financial reparations to over 800,000 victims and psychosocial support to 700,000 as of October 2018. ", "The Global Report on Internal Displacement from the Internal Displacement Monitoring Centre (IDMC) reported, however, displacement inside Colombia continued with more than 171,000 internally displaced in 2016. ", "As the political crisis in Venezuela has grown, a wave of refugees and migrants have come across the border into Colombia reversing an earlier trend. Venezuelans were fleeing political instability and economic turmoil in Colombia's once-wealthy neighboring nation. Venezuela's economic crisis worsened throughout 2018, prompting a sharp increase in migrants seeking to escape into Colombia. In response to the growing flood of Venezuelans, former President Santos initially announced that he would impose stricter migratory controls and deploy thousands of new security personnel along the frontier. Nevertheless, he acknowledged that Venezuela had once served as a vital escape valve for Colombian refugees fleeing their half century internal conflict, for which he was grateful. "], "subsections": []}]}, {"section_title": "Regional Relations", "paragraphs": ["Colombia shares long borders with neighboring countries, and some of these border areas have been described as porous to illegal armed groups that threaten regional security. Colombia has a 1,370-mile border with Venezuela, approximately 1,000-mile borders with both Peru and Brazil, and shorter borders with Ecuador and Panama. Much of the territory is remote and rugged and suffers from inconsistent state presence. Although all of Colombia's borders have been problematic and subject to spillover effects from Colombia's armed conflict, the most affected are Venezuela, Ecuador, and Panama.", "Over the years, Colombia's relations with Venezuela and Ecuador have been strained by Colombia's counterinsurgency operations, including cross-border military activity. The FARC and ELN insurgents have been present in shared-border regions and in some cases the insurgent groups used the neighboring countries to rest, resupply, and shelter. ", "Former President Uribe accused the former Venezuelan government of Hugo Ch\u00e1vez of harboring the FARC and ELN and maintained that he had evidence of FARC financing the 2006 political campaign of Ecuador's leftist President Rafael Correa. Relations between Ecuador and Colombia remained tense following the Colombian military bombardment of a FARC camp inside Ecuador in March 2008. Ecuador severed diplomatic relations with Colombia for 33 months. Also in 2008, Ecuador filed a suit against Colombia in the International Court of Justice (ICJ), claiming damages to Ecuadorian residents affected by spray drift from Colombia's aerial eradication of drug crops. In September 2013, Colombia reached an out-of-court settlement awarding Ecuador $15 million.", "Once in office, President Santos reestablished diplomatic ties with both countries and in his first term (2010-2014) cooperation greatly increased between Colombia and Venezuela on border and security issues and with Ecuador's Correa. However, concerns about Venezuelan links to the FARC and the continued use of Venezuela by the FARC and ELN as a safe haven to make incursions into Colombia remained an irritant in Colombian-Venezuelan relations. Nevertheless, the Venezuelan and Colombian governments committed to jointly combat narcotics trafficking and illegal armed group activities along the porous Venezuelan-Colombian border and Venezuela remained a supporting government of the FARC-government peace talks (along with Chile, Norway, and Cuba) through 2016, even after former President Ch\u00e1vez died in office in March 2013. Ecuador's government hosted exploratory talks between the ELN and the Santos government beginning in 2015, which became formal talks hosted in Quito in February 2017, although Ecuador's president requested that the talks move to Cuba in May 2018, due to a spate of border violence that could have been related to the ELN.", "For many years, the region in Panama that borders Colombia, the Darien, was host to a permanent presence of FARC soldiers who used the remote area for rest and resupply as well to transit drugs north. By 2015, according to the State Department, the FARC was no longer maintaining a permanent militarized presence in Panamanian territory, in part due to effective approaches taken by Panama's National Border Service in coordination with Colombia. Nevertheless, the remote Darien region still faces challenges from smaller drug trafficking organizations and criminal groups such as Bacrim and experiences problems with human smuggling with counterterrorism implications. "], "subsections": [{"section_title": "Colombia's Role in Training Security Personnel Abroad", "paragraphs": ["When Colombia hosted the Sixth Summit of the Americas in April 2012, President Obama and President Santos announced a new joint endeavor, the Action Plan on Regional Security Cooperation. This joint effort, built on ongoing security cooperation, addresses hemispheric challenges, such as combating transnational organized crime, bolstering counternarcotics, strengthening institutions, and fostering resilient communities. The Action Plan focuses on capacity building for security personnel in Central America and the Caribbean by Colombian security forces (both Colombian military and police). To implement the plan, Colombia undertook several hundred activities in cooperation with Panama, Costa Rica, El Salvador, Honduras, Guatemala and the Dominican Republic, and between 2013 and 2017 trained almost 17,000 individuals (see Figure 4 ). The Colombian government notes that this program grew dramatically from 34 executed activities in 2013 to 441 activities planned for 2018. ", "Colombia has increasingly trained military and police from other countries both under this partnership and other arrangements, including countries across the globe. According to the Colombian Ministry of Defense, around 80% of those trained were from Mexico, Central America, and the Caribbean. U.S. and Colombian officials maintain that the broader effort is designed to export Colombian expertise in combating crime and terrorism while promoting the rule of law and greater bilateral and multilateral law enforcement cooperation.", "Critics of the effort to \"export Colombian security successes\" maintain that human rights concerns have not been adequately addressed. Some observers question the portion of these activities that are funded by the U.S. government and want to see more transparency. In one analysis of the training, a majority of the training was provided by Colombian National Police rather than the Colombian Army, in such areas as ground, air, maritime, and river interdiction; police testimony; explosives; intelligence operations; psychological operations; and Comando JUNGLA, Colombia's elite counternarcotics police program. ", "Other analysts praise the Colombian training and maintain that U.S. assistance provided in this way has helped to improve, professionalize, and expand the Colombian military, making it the region's second largest. As that highly trained military shifts from combating the insurgency and the Colombian National Police take the dominant role in guaranteeing domestic security, Colombia may play a greater role in regional security and even in coalition efforts internationally. In September 2017, President Trump announced that he had considered designating Colombia in noncompliance with U.S. counternarcotics requirements, but noted that he had not proceeded with the step in part because of Colombian training efforts to assist others in the region with combating narcotics and related crime."], "subsections": []}]}]}, {"section_title": "U.S. Relations and Policy", "paragraphs": ["Colombia is a key U.S. ally in the region. With diplomatic relations that began in the 19 th century following Colombia's independence from Spain, the countries have enjoyed close and strong ties. Because of Colombia's prominence in the production of illegal drugs, the United States and Colombia forged a close partnership over the past 16 years. Focused initially on counternarcotics, and later counterterrorism, a program called Plan Colombia laid the foundation for a strategic partnership that has broadened to include sustainable development, human rights, trade, regional security, and many other areas of cooperation. Between FY2000 and FY2016, the U.S. Congress appropriated more than $10 billion in assistance from U.S. State Department and Department of Defense (DOD) accounts to carry out Plan Colombia and its follow-on strategies. During this time, Colombia made notable progress combating drug trafficking and terrorist activities and reestablishing government control over much of its territory. Its economic and social policies have reduced the poverty rate and its security policies have lowered the homicide rate.", "Counternarcotics policy has been the defining issue in U.S.-Colombian relations since the 1980s because of Colombia's preeminence as a source country for illicit drugs. Peru and Bolivia were the main global producers of cocaine in the 1980s and early 1990s. However, successful efforts there in reducing supply pushed cocaine production from those countries to Colombia, which soon surpassed both its Andean neighbors. The FARC and other armed groups in the country financed themselves primarily through narcotics trafficking, and that lucrative illicit trade provided the gasoline for the decades-long internal armed conflict at least since the 1990s. Colombia emerged to dominate the cocaine trade by the late 1990s. National concern about the crack cocaine epidemic and extensive drug use in the United States led to greater concern with Colombia as a source. As Colombia became the largest producer of coca leaf and the largest exporter of finished cocaine, heroin produced from Colombian-grown poppies was supplying a growing proportion of the U.S. market. Alarm over the volumes of heroin and cocaine being exported to the United States was a driving force behind U.S. support for Plan Colombia at its inception. ", "The evolution of Plan Colombia took place under changing leadership and changing conditions in both the United States and Colombia. Plan Colombia was followed by successor strategies such as the National Consolidation Plan, described below, and U.S.-Colombia policy has reached a new phase anticipating post-conflict Colombia."], "subsections": [{"section_title": "Plan Colombia and Its Follow-On Strategies", "paragraphs": ["Announced in 1999, Plan Colombia originally was a six-year strategy to end the country's decades-long armed conflict, eliminate drug trafficking, and promote development. The counternarcotics and security strategy was developed by the government of President Andr\u00e9s Pastrana in consultation with U.S. officials. Colombia and its allies in the United States realized that for the nation to gain control of drug trafficking required a stronger security presence, the rebuilding of institutions, and extending state presence where it was weak or nonexistent.", "Initially, the U.S. policy focus was on programs to reduce the production of illicit drugs. U.S. support to Plan Colombia consisted of training and equipping counternarcotics battalions in the Colombian Army and specialized units of the Colombian National Police, drug eradication programs, alternative development, and other supply reduction programs. The original 1999 plan had a goal to reduce \"the cultivation, processing, and distribution of narcotics by 50%\" over the plan's six-year timeframe. The means to achieve this ambitious goal were a special focus on eradication and alternative development; strengthening, equipping, and professionalizing the Colombian Armed Forces and the police; strengthening the judiciary; and fighting corruption. Other objectives were to protect citizens from violence, promote human rights, bolster the economy, and improve governance. U.S. officials expressed their support for the program by emphasizing its counterdrug elements (including interdiction). The focus on counternarcotics was the basis for building bipartisan support to fund the program in the U.S. Congress because some Members of Congress were leery of involvement in fighting a counterinsurgency, which they likened to the \"slippery slope\" of the war in Vietnam.", "President George W. Bush came to office in 2001 and oversaw some changes to Plan Colombia. The primary vehicle for providing U.S. support to Plan Colombia was the Andean Counterdrug Initiative, which was included in foreign operations appropriations. The Bush Administration requested new flexibility so that U.S.-provided assistance would back a \"unified campaign against narcotics trafficking, terrorist activities, and other threats to [Colombia's] national security\" due to the breakdown of peace talks between the FARC and the Pastrana government in February 2002. Congress granted this request for a unified campaign to fight drug trafficking and terrorist organizations as Members of Congress came to realize how deeply intertwined the activities of Colombia's terrorist groups were with the illicit drug trade that funded them. However, Congress prohibited U.S. personnel from directly participating in combat missions. Congress placed a legislative cap on the number of U.S. military and civilian contractor personnel who could be stationed in Colombia, although the cap was adjusted to meet needs over time. The current limit (first specified in the FY2015 National Defense Authorization Act, as amended) caps total military personnel at 800 and civilian contractors at 600, although numbers deployed have been far below the 1,400-person cap for years and now total fewer than 200.", "President Uribe (2002-2010) embraced Plan Colombia with an aggressive strategy toward the insurgent forces that prioritized citizen security. His Democratic Security Policy, implemented first in a military campaign called Plan Patriota, relied on the military to push FARC forces away from the major cities to remote rural areas and the borderlands. Like his predecessor, President Pastrana, Uribe continued to expand the Colombian military and police. He enhanced the intelligence capacity, professionalization, and coordination of the forces, in part with training provided by U.S. forces. His strategy resulted in expanded state control over national territory and a significant reduction in kidnappings, terrorist attacks, and homicides. In 2007, the Uribe administration announced a shift to a \"Policy of Consolidation of Democratic Security.\" The new doctrine was based on a \"whole-of-government\" approach to consolidate state presence in marginal areas that were historically neglected\u2014vulnerable to drug crop cultivation, violence, and control by illegal armed groups. Called a strategic leap forward by then-Defense Minister Juan Manuel Santos, in 2009 the new strategy came to be called the National Consolidation Plan (see below).", "Colombian support for Plan Colombia and for the nation's security program grew under Uribe's leadership. President Uribe levied a \"wealth tax\" to fund Colombia's security efforts, taxing the wealthiest taxpayers to fund growing defense and security expenditures. Overall U.S. expenditures on Plan Colombia were only a modest portion of what Colombians spent on their own security. By one 2009 estimate, U.S. expenditures were not more than 10% of what Colombians invested in their total security costs. In 2000, Colombia devoted less than 2% of its GDP to military and police expenditures and in 2010 that investment had grown to more than 4% of GDP. One assessment notes \"in the end there is no substitute for host country dedication and funding\" to turn around a security crisis such as Colombia faced at the beginning of the millennium. ", "In 2008, congressional support for Plan Colombia and its successor programs also shifted. Some Members of Congress believed that the balance of programming was too heavily weighted toward security. Prior to 2008, the emphasis had been on \"hard side\" security assistance (to the military and police) compared with \"soft side\" traditional development and rule of law programs. Members debated if the roughly 75%/25% mix should be realigned. Since FY2008, Congress has reduced the proportion of assistance for security-related programs and increased the proportion for economic and social aid. As Colombia's security situation improved and Colombia's economy recovered, the United States also began turning over to Colombians operational and financial responsibility for efforts formerly funded by the U.S. government. The Colombian government \"nationalized\" the training, equipping, and support for Colombian military programs, such as the counterdrug brigade, Colombian Army aviation, and the air bridge denial program. U.S. funding overall began to decline. The nationalization efforts were not intended to end U.S. assistance, but rather to gradually reduce it to pre-Plan Colombia levels, adjusted for inflation.", "A key goal of Plan Colombia was to reduce the supply of illegal drugs produced and exported by Colombia but the goals became broader over time. Bipartisan support for the policy existed through three U.S. Administrations\u2014President Bill Clinton, President George W. Bush, and President Barack Obama. Plan Colombia came to be viewed by some analysts as one of the most enduring and effective U.S. policy initiatives in the Western Hemisphere. Some have lauded the strategy as a model. In 2009, William Brownfield, then-U.S. Ambassador to Colombia, described Plan Colombia as \"the most successful nation-building exercise that the United States has associated itself with perhaps in the last 25-30 years.\" Other observers, however, were critical of the policy as it unfolded. Many in the NGO and human rights community maintained the strategy, with its emphasis on militarization and security, was inadequate for solving Colombia's persistent, underlying problems of rural violence, poverty, neglect and institutional weakness. Nevertheless, it appears that improvements in security conditions have been accompanied by substantial economic growth and a reduction in poverty levels over time. "], "subsections": [{"section_title": "National Consolidation Plan and Peace Colombia", "paragraphs": ["The National Consolidation Plan first launched during the Uribe Administration, (renamed the National Plan for Consolidation and Territorial Reconstruction), was designed to coordinate government efforts in regions where marginalization, drug trafficking, and violence converge. The whole-of-government consolidation was to integrate security, development, and counternarcotics to achieve a permanent state presence in vulnerable areas. Once security forces took control of a contested area, government agencies in housing, education, and development would regularize the presence of the state and reintegrate the municipalities of these marginalized zones into Colombia. The plan had been restructured several times by the Santos government.", "The United States supported the Colombian government's consolidation strategy through an inter-agency program called the Colombia Strategic Development Initiative (CSDI). CSDI provided U.S. assistance to \"fill gaps\" in Colombian government programming. At the U.S. Embassy in Colombia, CSDI coordinated efforts of the U.S. Agency for International Development (USAID), the State Department's Narcotics Affairs Section, the U.S. Military Group, and the Department of Justice to assist Colombia in carrying out the consolidation plan by expanding state presence and promoting economic opportunities in priority zones. It combined traditional counternarcotics assistance for eradication, interdiction, alternative development, and capacity building for the police, military, and justice sector institutions with other economic and social development initiatives.", "As the peace agreement between the FARC and the government moved forward into implementation, the focus of U.S. assistance to Colombia has shifted again. With a foundation of the work done to advance consolidation, U.S. assistance has begun to aid in post-conflict planning and support Colombia's transition to peace by building up democratic institutions, protecting human rights and racial and ethnic minorities, and promoting economic opportunity. USAID's country cooperation strategy for 2014-2018 anticipated the Colombian government reaching a negotiated agreement with the FARC, but remained flexible if an agreement was not signed. It recognized early implementation efforts, especially in the first 24 months after signature, would be critical to demonstrate or model effective practices. In the next five years, it envisioned Colombia evolving from aid recipient to provider of technical assistance to neighbors in the region.", "Consolidating state authority and presence in the rural areas with weak institutions remains a significant challenge following the FARC's disarmament in the summer of 2017. Reintegration of the FARC and possibly other insurgent forces, such as the ELN, will be expensive and delicate. In particular, critics of the consolidation efforts of the Colombian government maintain that the Santos administration often lacked the commitment to hand off targeted areas from the military to civilian-led development and achieve locally led democratic governance. Consolidation efforts suffered from low political support, disorganization at the top levels of government, and failure to administer national budgets effectively in more remote areas, among other challenges. ", "In August 2018, shortly after President Duque took office, USAID announced a framework of priorities for U.S. economic development assistance to Colombia. Some of these priorities include promoting and supporting a whole-of-government strategy to include the dismantling of organized crime; increasing the effectiveness of Colombia's security and criminal justice institutions; promoting enhanced prosperity and job creation through trade; improving the investment climate for U.S. companies; and advancing Colombia's capacity to strengthen governance and transition to sustainable peace, including reconciliation among victims, ex-combatants, and other citizens."], "subsections": []}, {"section_title": "Funding for Plan Colombia and Peace Colombia", "paragraphs": ["The U.S. Congress initially approved legislation in support of Plan Colombia in 2000, as part of the Military Construction Appropriations Act of 2001 ( P.L. 106-246 ). Plan Colombia was never authorized by Congress, but it was funded annually through appropriations. From FY2000 through FY2016, U.S. funding for Plan Colombia and its follow-on strategies exceeded $10 billion in State Department and Defense Department programs. From FY2000 to FY2009, the United States provided foreign operations assistance to Colombia through the Andean Counterdrug Program (ACP) account, formerly known as the Andean Counterdrug Initiative, and other aid accounts. In FY2008, Congress continued to fund eradication and interdiction programs through the ACP account, but funded alternative development and institution building programs through the Economic Support Fund (ESF) account. In the FY2010 request, the Obama Administration shifted ACP funds into the International Narcotics Control and Law Enforcement (INCLE) account. ", "Since FY2008, U.S. assistance has gradually declined because of tighter foreign aid budgets and nationalized Plan Colombia-related programs. In FY2014, in line with other foreign assistance reductions, funds appropriated to Colombia from State Department accounts declined to slightly below $325 million. In FY2015, Congress appropriated $300 million for bilateral assistance to Colombia in foreign operation. The FY2016 Omnibus Appropriations bill ( P.L. 114-113 ) provided Colombia from U.S. State Department and U.S. Agency for International Development accounts, slightly under $300 million, nearly identical to that appropriated in FY2015 (without P.L. 480, the Food for Peace account, the total for FY2016 was $293 million as shown in Table 1 ). In FY2017, Congress funded a program the Obama Administration had proposed called \"Peace Colombia\" to re-balance U.S. assistance to support the peace process and implementation of the accord. In May 2017, Congress approved a FY2017 omnibus appropriations measure, the Consolidated Appropriations Act, 2017 ( P.L. 115-31 ), which funded the various programs of Peace Colombia at $391.3 million. In the FY2017 legislation, Congress appropriated the following: ", "The ESF account increased to $187 million (from $134 million in FY2016) to build government presence, encourage crop substitution to replace drug crops, and provide other assistance to conflict victims, including Afro-Colombian and indigenous communities. However, only $180 million was subsequently allocated. INCLE funding increased to $143 million with a focus on manual eradication of coca crops, support for the Colombian National Police, and judicial reform efforts. INCLE funding also included $10 million for Colombian forces' training to counterparts in other countries. $38.5 million in Foreign Military Financing (FMF); and $21 million in Nonproliferation, Anti-Terrorism, Demining, and Related Programs (NADR), which was a relatively large increase from under $4 million in FY2016 to focus on the demining effort. ", "How the Trump Administration will engage with the issues of supporting post-conflict stability in Colombia has not been clearly defined by either the State Department or other executive departments. For example, the Trump Administration's proposed foreign aid budget for FY2018 would have reduced assistance to Colombia to $251 million. However, the FY2018 omnibus appropriations measure, approved by Congress in March 2018 ( P.L. 115-114 ), again included $391.3 million to support Colombia's transition to peace. The Trump Administration's FY2019 budget request for Colombia is $265 million, approximately a 32% reduction from the $391.3 million appropriated by Congress in FY2018. However, the House and Senate appropriations bills, H.R. 6385 and S. 3108 , again would support the funding level of $391.3 million. The FY2019 Administration request would reduce post-conflict recovery programs and place greater emphasis on counternarcotics and security. ", "Below, Table 1 provides account data from the annual international affairs congressional budget justification documents. The information about DOD-funded programs was provided to the Congressional Research Service by DOD analysts in December 2015 and October 2017 (and has not been updated). The breakout of DOD assistance to Colombia is shown in Table 2 .", ". Colombia also has received additional U.S. humanitarian funding to help it cope with more than 1 million Venezuelan migrants. As of September 30, 2018, U.S. government humanitarian funding for the Venezuela response totaled approximately $96.5 million for both FY2017 and FY2018 combined, of which $54.8 million was for Colombia. (Humanitarian funding is drawn primarily from the global humanitarian accounts in annual Department of State/Foreign Operations appropriations acts.) In addition, the U.S. Navy hospital ship USNS Comfort is on an 11-week medical support mission deployed through the end of 2018 to work with government partners, in part to assist with arrivals from Venezuela. In Colombia, the U.S. response aims to help the Venezuelan arrivals as well as the local Colombian communities that are hosting them. In addition to humanitarian assistance, the United States is providing $37 million in bilateral assistance to support medium- and longer-term efforts by Colombia."], "subsections": []}]}, {"section_title": "Human Rights Conditions on U.S. Assistance", "paragraphs": ["Some Members of Congress have been deeply concerned about human rights violations in Colombia\u2014especially those perpetrated by any recipients or potential recipients of U.S. assistance. In Colombia's multisided, 50-year conflict, the FARC and ELN, the paramilitaries and their successors, and Colombia's security forces have all committed serious violations. Colombians have endured generations of noncombatant killings, massacres, kidnappings, forced displacements, forced disappearances, land mine casualties, and acts of violence that violate international humanitarian law. The extent of the crimes and the backlog of human rights cases to be prosecuted have overwhelmed the Colombian judiciary, which some describe as \"inefficient\" and overburdened. The United Nations and many human rights groups maintain that although some prosecutions have gone forward, most remain unresolved and the backlog of cases has been reduced slowly. In addition to the problem of impunity for such serious crimes, continued violations remain an issue. ", "Since 2002, Congress has required in the annual foreign operations appropriations legislation that the Secretary of State certify annually to Congress that the Colombian military is severing ties to paramilitaries and that the government is investigating complaints of human rights abuses and meeting other human rights statutory criteria. (The certification criteria have evolved over time. ) For several years, certification was required before 30% of funds to the Colombian military could be released. The FY2014 appropriations legislation requires that 25% of funding under the Foreign Military Financing (FMF) program be held back pending certification by the Secretary of State. Some human rights groups have criticized the regular certification of Colombia, maintaining that evidence they have presented to the State Department has contradicted U.S. findings. However, even some critics have acknowledged the human rights conditions on military assistance to Colombia to be \"a flawed but useful tool\" because the certification process requires that the U.S. government regularly consult with Colombian and international human rights groups. Critics acknowledge that over time, conditionality can improve human rights compliance. ", "Additional tools for monitoring human rights compliance by Colombian security forces receiving U.S. assistance are the so-called \"Leahy Law\" restrictions, which Congress first passed in the late 1990s prior to the outset of Plan Colombia. First introduced by Senator Patrick Leahy, these provisions deny U.S. assistance to a foreign country's security forces if the U.S. Secretary of State has credible information that such units have committed \"a gross violation of human rights.\" The provisions apply to security assistance provided by the State Department and DOD. The Leahy Law under the State Department is authorized by the Foreign Assistance Act (FAA) of 1961, as amended, and is codified at 22 U.S.C. 2378d (\u00a7520M of the FAA). The DOD Leahy provisions, which for years applied just to DOD training, now include a broader range of assistance, as modified in the FY2014 appropriations legislation. The provision related to the Leahy Laws for DOD assistance is codified at 10 U.S.C. 362, and prohibits \"any training, equipment, or other assistance,\" to a foreign security force unit if there is credible information that the unit has committed a gross violation of human rights.", "Both the State Department and DOD Leahy provisions require the State Department to review and clear\u2014or vet\u2014foreign security forces to determine if any individual or unit is credibly believed to be guilty of a gross human rights violation. Leahy vetting is typically conducted by U.S. embassies and State Department headquarters. Reportedly on an annual basis about 1% of foreign security forces are disqualified from receiving assistance under the Leahy provisions, although many more are affected by administrative issues and are denied assistance until those conditions are resolved. Tainted security force units that are denied assistance may be remediated or cleared, but the procedures for remediation differ slightly between the DOD and State (or FAA) provisions.", "Because of the large amount of security assistance provided to Colombian forces (including the military and police), the State Department reportedly vets more candidates for assistance in Colombia than in any other country. In the late 1990s, poor human rights conditions in Colombia were a driving concern for developing the Leahy Law provisions. The U.S. Embassy in Bogot\u00e1, with nearly two decades of experience in its vetting operations, has been cited as a source of best practices for other embassies seeking to bring their operations into compliance or enhance their performance. State Department officials have cited Colombia as a model operation that has helped Colombia to improve its human rights compliance. ", "However, some human rights organizations are critical of the Leahy vetting process in Colombia, and cite the prevalence of extrajudicial executions allegedly committed by Colombian military units as evidence that these restrictions on U.S. assistance have failed to remove human rights violators from the Colombian military. A human rights nongovernmental organization, Fellowship of Reconciliation, has published reports alleging an association between false positive killings and Colombian military units vetted by the State Department to receive U.S. assistance. However, some have questioned the group's methodology. Some human rights organizations contend that the U.S. government has tolerated abusive behavior by Colombian security forces without taking action or withholding assistance."], "subsections": []}, {"section_title": "Assessing the Programs of Plan Colombia and Its Successors123", "paragraphs": ["Measured exclusively in counternarcotics terms, Plan Colombia has been a mixed success. Colombia remains the dominant producer of cocaine and in the DEA's National Drug Threat Assessment for 2017 continued to be the source for 95% of cocaine seized in the United States. Enforcement, eradication, and improved security squeezed production in Colombia, so that in 2012, Peru reemerged as the global leader in cocaine production, surpassing Colombia, for a year or so. In the early 2000s, given Colombia's predominance as the source of cocaine destined for U.S. markets and its status as the second-largest producer of heroin consumed in the United States, eradication of coca bush and opium poppy (from which heroin is derived) was an urgent priority and became the preferred tool for controlling the production of these drugs. Another critical component of the drug supply reduction effort was alternative development programs funded by the U.S. Agency for International Development (USAID) to assist illicit crop cultivators with transitioning to licit crop production and livelihoods. "], "subsections": [{"section_title": "Trends in Colombia's Coca Cultivation", "paragraphs": ["Analysts have long debated how effective Plan Colombia and its follow-on strategies were in combating illegal drugs. Although Plan Colombia failed to meet its goal of reducing the cultivation, processing, and distribution of illicit drugs by 50% in its original six-year time frame, Colombia has sustained significant reductions in coca cultivation in recent years. According to U.S. estimates, cultivation of coca declined from 167,000 hectares in 2007 to 78,000 hectares in 2012. (Poppy cultivation declined by more than 90% between 2000 and 2009.) According to U.S. government estimates, Colombia's potential production of pure cocaine fell to 170 metric tons in 2012, the lowest level in two decades. However, it started to rise slightly in 2013, and more dramatically in 2014 through 2016. In those years, cultivation of coca and production of cocaine grew significantly in part due to ending the aerial eradication of coca crops. In 2015, following a U.N. agency determination that the herbicide used to spray coca crops was probably carcinogenic, Colombia's minister of health determined that aerial eradication of coca was not consistent with requirements of Colombia's Constitutional Court. In 2016, as noted above, the U.S. DEA reported that 95% of cocaine seized in the United States originated in Colombia.", "According to U.S. Office of National Drug Control Policy, Colombia in 2017 cultivated an unprecedented 209,000 hectares of coca, from which cocaine is derived, capable of generating 921 metric tons of cocaine. The United Nations estimates for 2017, which typically differ in quantity but follow the same trends as U.S. estimates, maintained that Colombia's potential production of cocaine reached nearly 1,370 metric tons, 31% above its 2016 estimate. Even with Colombia's economic stability and improving security, cocaine exports (primarily to the U.S. market) remain a major concern for U.S. lawmakers. However, in drug interdiction, Colombia has set records for many years and is considered a strong and reliable U.S. partner. The United Nations Office on Drugs and Crime ( Table 4 ), shows Colombia cultivating 146,000 hectares of coca in 2016, a 52% increase over 2015 and another increase to 171,000 hectares, a 17% increase, in 2017. Although cocaine seizures were quite high in both years, the interdiction of cocaine was insufficient to counter the large increases in production."], "subsections": []}, {"section_title": "Drug Crop Eradication and Other Supply Control Alternatives", "paragraphs": ["Both manual eradication and aerial eradication were central components of Plan Colombia to reduce coca and poppy cultivation. Manual eradication is conducted by teams, usually security personnel, who uproot and kill the plant. Aerial eradication involves spraying the plants from aircraft with an herbicide mixture to destroy the drug crop, but it may not kill the plants. In the context of Colombia's continuing internal conflict, manual eradication was far more dangerous than aerial spraying. U.S. and Colombian policymakers recognized the dangers of manual eradication and, therefore, employed large-scale aerial spray campaigns to reduce coca crop yields, especially from large coca plantations. Colombia is the only country globally that aerially sprayed its illicit crops, and the practice has been controversial for health and environmental reasons, resulting in a Colombian decision to end aerial eradication in 2015.", "Since 2002, as a condition of fully funding the spraying program, Congress has regularly directed the State Department, after study and consultation with the U.S. Environmental Protection Agency and other relevant agencies, to certify that the spraying did not \"pose unreasonable risks or adverse effects to humans or the environment.\" This certification requirement was included most years in the annual foreign operations appropriations legislation. Some analysts have also raised questions about the monetary and collateral costs of aerial eradication compared with other drug supply control strategies, its effectiveness, and its limited effect on the U.S. retail price of cocaine.", "U.S. State Department officials attribute Colombia's decline in coca cultivation after 2007 and prior to 2013 to the persistent aerial eradication of drug crops in tandem with manual eradication where viable. Between 2009 and 2013, Colombia aerially sprayed roughly 100,000 hectares annually. In 2013, however, eradication efforts declined. Colombia aerially eradicated roughly 47,000 hectares. It manually eradicated 22,120 hectares, short of the goal of 38,500 hectares. This reduction had a number of causes: the U.S.-supported spray program was suspended in October 2013 after two U.S. contract pilots were shot down, rural protests in Colombia hindered manual and aerial eradication efforts, and security challenges limited manual eradicators working in border areas. ", "In late 2013, Ecuador won an out-of-court settlement in a case filed in 2008 before the International Court of Justice in The Hague for the negative effects of spray drift over its border with Colombia. In negotiations with the FARC, the government and the FARC provisionally agreed in May 2014 that voluntary manual eradication would be prioritized over forced eradication. Aerial eradication remained a viable tool in the government's drug control strategy, according to the agreement, but would be permitted only if voluntary and manual eradication could not be conducted safely.", "In April 2015, the Santos administration determined that glyphosate, a broad-spectrum, nonselective herbicide used commercially, but in Colombia sprayed on coca plants to eradicate them, was \"probably carcinogenic\" to humans in a review published by a World Health Organization (WHO) affiliate. In October 2015, the government ended spraying operations and began to implement a new public health approach toward illicit drugs, one that proponents suggested would reduce human rights violations. On the supply side, Colombia's new drug policy gives significant attention to expanding alternative development and licit crop substitution while intensifying interdiction efforts. The State Department in its 2015 International Narcotics Control Strategy Report (INCSR), however, warned that illicit cultivation was expanding in areas long off-limits to aerial spraying, including national parks, a buffer zone with Ecuador where aerial eradication has been restricted, and in indigenous or protected Afro-Colombian territories.", "Colombian interdiction practices are deemed some of the most effective in the world. The Colombian government reported seizing more than 207 metric tons (mt) of cocaine base in 2014 and that seizure total doubled by 2017 with capture of 442 mt of cocaine. According to the U.S. State Department's 2018 INCSR , Colombia also seized 197 mt of marijuana, 348 kilograms of heroin, and destroyed more than 3,400 cocaine base and hydrochloride labs. ", "USAID funds and runs alternative development programs in Colombia to assist communities with transitioning from a dependency on illicit crops to licit employment and livelihoods. Alternative development was once focused narrowly on crop substitution and assistance with infrastructure and marketing. Since the Colombian government's shift to a consolidation strategy, USAID has supported \"consolidation and livelihoods\" programming in 40 of the 58 strategically located, conflict-affected municipalities targeted by the government's National Consolidation Plan. To facilitate economic development, USAID funds initiatives that assist farmers and others with shifting from coca growing to licit economic opportunities. These programs are designed to strengthen small farmer producer organizations, improve their productivity, and connect them to markets. ", "Some observers maintain that poor and unsustainable outcomes from alternative development programs while the Colombian conflict was still under way resulted from ongoing insecurity and lack of timeliness or sequencing of program elements. The renewed commitment to alternative development and crop substitution in the 2016 peace accord with the FARC may be similarly challenged. Formal implementation of the peace accord on drug eradication and crop substitution began in late May 2017 with collective agreements committing communities to replace their coca crops with licit crops. In some regions, the program is extended to families who cultivate coca and also to producers of legal crops and landless harvesters. The Colombian government also committed to a combined approach of both voluntary and forced manual eradication. The government's goal set for 2017 was eradicating 100,000 hectares of coca, 50,000 through forced manual eradication and 50,000 through \"crop substitution\" accords reached with coca farming households who would voluntary eradicate.", "At the U.S.-Colombia High Level Dialogue held in Bogot\u00e1 in March 2018, a renewed commitment to the enduring partnership between the United States and Colombia was announced. A major outcome was a U.S.-Colombia pledge to reduce illegal narcotics trafficking through expanded counternarcotics cooperation. The new goal set was to reduce Colombia's estimated cocaine production and coca cultivation to 50% of current levels by 2023. In addition, a memorandum of understanding was signed to combat the illegal gold mining that funds transnational criminal organizations."], "subsections": []}, {"section_title": "New Developments Under the Duque Administration", "paragraphs": ["Although President Duque appears determined to pursue a more aggressive approach to drug policy, he has not clearly stated how his approach to counternarcotics will differ from that of his predecessor. The government may restart aerial eradication, a strategy that ended in 2015 due to the Colombian Health Ministry's concerns over cancer-causing potential of the herbicide glyphosate, but no precise plans for restarting the program have been announced in the Duque Administration's first three months in office. Experimentation with delivering glyphosate by drones (rather than planes) began in June 2018 under the Santos Administration and is continuing under the Duque government. ", "On October 1, 2018, President Duque authorized police to confiscate and destroy any quantity of drugs found on persons in possession of them, resulting in the seizure of more than 7 metric tons of drugs in less than two weeks. This enforcement measure may violate a 1994 Colombian Constitutional Court ruling, however, in which Colombians may carry small doses of drugs for personal use, including marijuana, hashish, and cocaine. Several court challenges have been filed that seek to nullify the Duque decree on constitutional grounds of protected personal use. ", "Drug trafficking continues to trigger conflict over land in Colombia while affecting the most vulnerable groups, including Afro-Colombian, peasant, and indigenous populations. Some analysts warn that national and international pressure for drug eradication could also lead to increased human rights violations, including health consequences by reviving aerial spraying of drug crops and government actions to forcibly break up demonstrations by coca producers who resist eradication. Some analysts have advocated that investments to lower drug supply need to go beyond eradication, which has not been a lasting approach to reducing drug crop cultivation. For instance, the government could provide economic and education opportunities to at-risk youth to enhance their role in peace building and to prevent their recruitment into the drug trade and other illegal activity."], "subsections": []}]}, {"section_title": "U.S.-Colombia Trade Relations, OECD, and the Pacific Alliance", "paragraphs": ["Economic relations between Colombia and the United States have deepened. The U.S.-Colombia Free Trade Agreement (FTA) entered into force in May 2012. By 2020, it will phase out all tariffs and other barriers to bilateral trade between Colombia and the United States, its largest trade partner. Since the U.S.-Colombia FTA went into force, the stock of U.S. investment in Colombia surpassed $7 billion in 2014 but dropped to $6.2 billion in 2016 (on a historical cost basis), concentrated mostly in mining and manufacturing. According to the U.S. Department of Commerce, U.S. exports to Colombia exceeded $26.8 billion in 2016 and Colombia was the 22 nd -largest market for U.S. exports; however, U.S. imports from Colombia declined between 2015 and 2016. Major U.S. exports to Colombia include oil (noncrude oil products including gasoline), machinery, cereals, organic chemicals, and plastic. Because 65% of U.S. imports from Colombia are crude oil imports, much of the decline in value was caused by the sharp fall in oil prices that began in 2014. Major U.S. imports beside crude oil, include gold, coffee, cut flowers, and fruits. ", "Congressional interest in Colombia now extends far beyond security and counternarcotics and has grown in the area of bilateral trade following implementation of the U.S.-Colombia FTA, (also known at the U.S.-Colombia Trade Promotion Agreement). Colombia is a founding member of the Pacific Alliance, along with Chile, Mexico, and Peru, and has sought to deepen trade integration and cross-border investment with its partners in the alliance while reducing trade barriers. The Pacific Alliance aims to go further by creating a common stock market, allowing for the eventual free movement of businesses and persons, and serving as an export platform to the Asia-Pacific region.", "Colombia's leadership role in the Pacific Alliance and Colombia's accession to the Organization for Economic Cooperation and Development (OECD) in May 2018, following a review of the country's macroeconomic policies and changes, are major new developments. The accession to the OECD was approved by Colombia's lower house in October 2018 and the Senate in November 2018, but it remained under final review by Colombia's Constitutional Court in early February 2019. The Santos administration pushed to meet the criteria required for OECD membership because it maintained that such recognition signified Colombia's attainment of world-class development standards and policies. Colombia has made progress on trade issues such as copyright, pharmaceuticals, fuel and trucking regulations, and labor concerns (including subcontracting methods and progress on resolving cases of violence against union activists)."], "subsections": []}]}, {"section_title": "Outlook", "paragraphs": ["Congress remains interested in Colombia's future because the country has become one of the United States' closest allies. With 17 years of investment in Colombia's security and stability, some maintain that there has already been a strong return on U.S. investment. Plan Colombia and its successor strategies broadened from counternarcotics to include humanitarian concerns, efforts to bolster democratic development and human rights protections, and trade and investment to spark growth. ", "The record expansion of Colombia's coca crop and increasing cocaine exports to the United States, however, may significantly hinder the effort to consolidate peace in Colombia and could potentially increase corruption and extortion. A significant portion of the Colombian public remains skeptical of the peace process and the FARC's role in Colombia's democracy. Other Colombians maintain that support for peace programs in Colombia is important not only to benefit former FARC or other demobilized combatants but also to fulfill promises the government made in the peace accords to the country's 8.6 million victims of the five-decade conflict.", "As President Duque concluded his first 100 days in office, his government faced overlapping challenges: (1) an upsurge in illicit drug crops, which had set records in 2016 and 2017; (2) implementation of provisions of the peace accord negotiated by former president Santos but marred by slow implementation, attacks on land and human rights activists, and projected budgetary shortfalls; (3) renewed violent competition among criminal groups in rural areas, some of which reportedly are sheltering in Venezuela; and (4) Venezuela's humanitarian crisis, which resulted in a surge of migrants fleeing to or through Colombia.", "The annual level of foreign assistance provided by the U.S. Congress for Colombia began to decline in FY2008 and then gradually increased in FY2017 and FY2018 to support peace and implementation of the FARC-government peace accord. Some Members of Congress may want to build on cooperation with Colombian partners to continue to train Central Americans and other third-country nationals in counternarcotics and security, including programs in citizen security, crime prevention and monitoring, military and police capacity building, and hostage negotiation and cybersecurity. Congress may continue to closely monitor Colombia's domestic security situation. It also may continue to oversee issues such as drug trafficking; Colombia's effort to combat other illegal armed groups such as Bacrim; the status of human rights protections; and the expansion of health, economic, environmental, energy, and educational cooperation. Congress may seek to foster Colombian leadership in the region to counter growing political instability in Venezuela. The U.S. Congress has been interested in expanding investment and trade opportunities both bilaterally with Colombia and within regional groupings, such as the Pacific Alliance. Some analysts contend that U.S.-Colombian trade improvements rest on the strength of the overall relationship between Colombia and the United States. "], "subsections": [{"section_title": "Appendix. Selected Online Human Rights Reporting on Colombia", "paragraphs": [], "subsections": []}]}]}}
{"id": "RL34498", "title": "Individual Income Tax Rates and Other Key Elements of the Federal Individual Income Tax: 1988 to 2019 Tax Years", "released_date": "2019-02-08T00:00:00", "summary": ["Statutory individual income tax rates are the tax rates that apply by law to various amounts of taxable income. Statutory rates form the basis of marginal effective and average effective tax rates, which most economists believe have a greater impact on the economic behavior of companies and individuals than do statutory rates. Marginal effective rates capture the net effect of special tax provisions on statutory rates. They differ from average effective rates, which measure someone's overall income tax burden.", "Current statutory and effective individual tax rates are the result of the Tax Reform Act of 1986 (TRA86; P.L. 99-514) and several tax laws that have been enacted since then. Of particular importance among the latter are the Omnibus Budget Reconciliation Act of 1990 (OBRA90; P.L. 101-508), the Omnibus Budget Reconciliation Act of 1993 (OBRA93; P.L. 103-66), the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA; P.L. 107-16), the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (TRUC; P.L. 111-312), the American Taxpayer Relief Act of 2012 (ATRA, P.L. 112-240), and the tax rate changes contained in the 2017 tax revision (P.L. 115-97). TRA86 altered the income tax rate structure. EGTRRA established what are referred to as the Bush-era tax cuts for individuals. TRUC extended those cuts for another two years, through 2012. ATRA permanently extended the Bush-era tax rates for taxpayers with taxable incomes below $400,000 for single filers and $450,000 for joint filers but reinstated the 39.6% top rate established by OBRA93 for taxpayers with taxable incomes equal to or above those amounts. And P.L. 115-97 lowered individual tax rates for all income groups except those subject to the 10% and 35% brackets under previous law.", "Ordinary income is taxed at seven statutory individual income tax rates, from 2018 to 2026: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. (Starting in 2026, these rates will revert to their levels in 2017.) Income from long-term capital gains and dividends is taxed at 0% for single filers with capital gains below $39,375 (below $78,750 for joint filers), 15% for single filers with capital gains between $39,375 and $434,550 (between $78,750 and $488,850 for joint filers), and 20% for single filers with capital gains above $434,550 (above $488,850 for joint filers). Since 2013, a 3.8% tax has been imposed on the lesser of net investment income received by individuals, estates, or trusts, or the amount of their modified adjusted gross incomes above $250,000 for joint filers and $125,000 for single filers. In addition, the individual alternative minimum tax (AMT), which functions like a separate income tax in that its rate structure is narrower and tax base broader than those of the regular income tax, applies to income above exemption amounts in 2019 of $111,700 for joint filers and $71,700 for single filers; the AMT taxes income at two rates: 26% and 28%.", "Tax rates and the income brackets to which they apply are not the only elements of the individual income tax that determine the tax liabilities of taxpayers. Personal exemptions, exclusions, deductions, credits, and certain other elements have an effect as well. Some of these elements are indexed for inflation. Congress added annual indexation to the individual income tax in 1981, using the Consumer Price Index for All Urban Consumers. Such a mechanism helps prevent tax increases and unintended shifts in the distribution of the tax burden that are driven by inflation alone. The indexed elements are tax rate brackets, personal exemptions and their phaseout threshold, standard deductions, the itemized deduction limitation threshold, and the exemption amounts for the AMT. Starting in 2018, these items are indexed for inflation with the Chained Consumer Price Index for All Urban Consumers.", "This report summarizes the tax brackets and other key elements of the individual income tax that help determine taxpayers' marginal and average effective tax rates going back to 1988. It will be updated to reflect indexation adjustments and changes in the taxation of individual income."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Three Commonly Used Concepts of Tax Rates and How They Differ", "paragraphs": ["In analyzing the effects of U.S. individual income tax rates, it is important to be clear about which rates are being discussed. Among tax analysts, the three most widely used measures are statutory rates (STRs), marginal effective rates (MERs), and average effective rates (AERs). Each has its own applications. Those interested in how individual income taxes affect the economic behavior of households should have a clear understanding of the ways in which the three rates differ and the implications of these differences for the economic analysis of income taxes.", "STRs are the rates prescribed by law that apply to specified ranges of taxable income. For any individual, the applicable rate depends on her/his taxable income. Since the federal income tax is progressive in nature, taxpayers with relatively low taxable incomes face lower STRs than do taxpayers with relatively high taxable incomes.", "Effective rates, by contrast, whether marginal or average, measure how STRs are affected by tax provisions that modify someone's taxable income or tax liability. A taxpayer's MER shows the percentage of an additional dollar of income that is taxed, while her/his AER indicates how much of her/his total income is taxed. In general, someone's average tax rate is lower than her/his marginal tax rate. ", "Still, for many individuals, the interaction between special provisions in the tax code and their specific financial circumstances leads to differences between their effective and statutory rates. Among the provisions that can drive a wedge between the two rates are the earned income tax credit (EITC), the alternative minimum tax (AMT), and personal exemptions and deductions. Personal circumstances that can cause MERs to diverge from STRs include the sources of income, itemized deductions, the number of children (if any) eligible for the child tax credit and the EITC, and filing status. ", "Most economists believe that taxpayers change their economic behavior in response to MERs, not to statutory rates. Drawing on a standard model of consumer behavior, they argue that a person's MER influences important decisions concerning whether and how much to work, how much to spend, and how much to save. For example, someone's MER may help determine whether he takes on an overtime shift, bargains for wages and benefits, takes a second job, or even enters the labor force. The idea that MERs help shape an individual's economic behavior can be extended to an entire tax system, including federal payroll and excise taxes and state and local taxes. A broader analysis along these lines, however, goes beyond the scope of this report."], "subsections": []}, {"section_title": "Major Legislation Affecting Individual Statutory Rates Since 1986", "paragraphs": ["The current income tax is largely a product of the Tax Reform Act of 1986 (TRA86; P.L. 99-514 ). Among other things, the act reduced the individual tax rate structure to two statutory rates: 15% and 28%. TRA86 also imposed a 5% surcharge on the taxable income of certain upper-income households, effectively adding a third marginal tax rate of 33%.", "Since the enactment of TRA86, several other major changes in the federal individual income tax rate structure have been made. The Omnibus Budget Reconciliation Act of 1990 (OBRA90; P.L. 101-508 ) eliminated the 5% surcharge and replaced it with a statutory rate of 31%. In addition, OBRA90 imposed a limit on the amount of itemized deductions upper-income households could claim and accelerated the phaseout of personal exemptions for upper-income households. These provisions had the effect of raising effective tax rates above statutory tax rates for affected taxpayers.", "The Omnibus Budget Reconciliation Act of 1993 (OBRA93; P.L. 103-66 ) added two new statutory rates at the upper end of the income scale: 36% and 39.6%. It also delayed the indexation of the two new tax brackets for one year and permanently extended the limitation on itemized deductions and the accelerated phaseout of the personal exemption from OBRA90.", "Eight years later, the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA; P.L. 107-16 ) added a new 10% statutory rate. It also included a phased-in reduction in the top four statutory rates to 25%, 28%, 33%, and 35%. Several other provisions of the act modified the tax brackets and limitations on personal exemptions and deductions for higher-income taxpayers. ", "The Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA; P.L. 108-27 ), the Working Families Tax Relief Act of 2004 (WFTRA; P.L. 108-311 ), and the Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA; P.L. 109-222 ) collectively accelerated and extended the tax rate reductions enacted under EGTRRA through 2010. ", "Under a last-minute agreement between President Obama and congressional leaders from both parties, Congress extended the Bush-era individual income tax cuts through 2012 under the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (TRUC; P.L. 111-312 ). ", "Facing the unwanted prospect of an across-the-board increase in all STRs, the 112 th Congress permanently extended (through the American Taxpayer Relief Act of 2012 [ATRA; P.L. 112-240 ]) each of the Bush-era STRs, with one exception: the top rate increased from 35% to 39.6%. ", "Six years passed before Congress made another significant change in individual income tax rates. Through P.L. 115-97 , often referred to as the Tax Cuts and Jobs Act, Congress temporarily reduced five of the seven individual income tax rates under prior law. For tax years beginning after December 31, 2017, and before January 1, 2026, individual income tax rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%; they are set to return to the levels that applied in 2017, for tax years beginning on or after January 1, 2026. ", "Each act is described in greater detail below."], "subsections": [{"section_title": "Tax Reform Act of 1986", "paragraphs": ["Among its many changes, TRA86 simplified the individual income tax rate structure for tax years after 1987 by replacing the 14 nonzero statutory rates that applied to the 1985 and 1986 tax years with two such rates: 15% and 28%. Table 3 shows the key elements of the 1988 tax rate structure. These rates applied to capital income as well as to labor income. ", "Although TRA86 established only two statutory individual marginal income tax rates, it included a 5% surcharge on the taxable income of certain upper-income households. This surcharge effectively created a third statutory tax rate of 33% (a 28% statutory tax rate plus a 5% surcharge).", "Because the surcharge phased in over a certain range of income and then phased out as income increased, statutory tax rates rose to 33% but then fell back to 28%, producing what was known as an income tax rate \"bubble.\" The intent of the surcharge was two-fold: (1) to prevent TRA86 from changing the distribution of the income tax burden among income groups, relative to the distribution under pre-1986 tax law, and (2) to meet specific revenue targets.", "More specifically, the surcharge was designed to eliminate the tax benefits of both the 15% tax bracket and the personal exemption for upper-income households. For joint returns in 1988, the phaseout of the 15% tax rate started when taxable income exceeded $71,900 and ended when it reached $149,250. For single returns, the 15% tax bracket phased out when taxable income was between $47,050 and $97,620. For heads of households, the phaseout occurred when taxable income fell in the range of $67,200 to $134,930. ", "The phaseout of the personal exemption started immediately after the phaseout of the 15% tax bracket and occurred sequentially for each exemption. This meant that the taxable income range over which the 5% surcharge offset personal exemptions depended on the number of personal exemptions claimed on the tax return. For example, on a joint return claiming two personal exemptions, the 5% surcharge would apply to taxable income between $149,250 and $171,090 ($149,250 plus two times $10,920). On a joint return with four personal exemptions, the 5% surcharge would apply to taxable income between $149,250 and $192,930 ($149,250 plus four times $10,920).", "To demonstrate how the 5% surcharge worked to \"phase out\" the tax benefits of the 15% tax bracket, consider the following example based on joint returns for 1988. The difference between taxing the first $29,750 of taxable income at 28% instead of 15% was $3,867.50 (obtained as $29,750 multiplied by 13%, the difference between 28% and 15%). Five percent of the difference between the upper and lower phaseout limits also equaled $3,867.50 ($149,250 less $71,900 multiplied by 5%). Hence, assessing the 5% surcharge on taxable income between $78,400 and $162,770 was equivalent to taxing the first $32,450 of taxable income at 28% rather than 15%."], "subsections": []}, {"section_title": "Omnibus Budget Reconciliation Act of 1990", "paragraphs": ["OBRA90 created a three-tiered statutory marginal income tax rate structure. The rates were 15%, 28%, and 31% and applied to tax years beginning in 1991 and thereafter (see Table 5 ). OBRA90 eliminated the tax rate bubble created by TRA86, and replaced it with a limitation on itemized deductions and a new approach to phasing out the tax benefits of the personal exemption for upper-income households.", "OBRA90 also reintroduced a tax-rate differential for capital gains income. The act limited the tax on capital gains income to a maximum of 28%, starting in 1991. Under TRA86, capital gains was treated as ordinary income and taxed at regular rates that peaked at 33%.", "OBRA90's limitation on itemized deductions was based on a taxpayer's adjusted gross income (AGI). For tax years starting in 1991 to 1995, allowable deductions were reduced by 3% of the amount by which a taxpayer's AGI exceeded $100,000 (or $50,000 in the case of married couples filing separate returns). For example, if a taxpayer's AGI in 1991 was $110,000, then his itemized deductions would have been reduced by $300 ($110,000 less $100,000 multiplied by .03). This provision effectively raised the marginal income tax rate of affected taxpayers by approximately one percentage point. A dollar of income in excess of $100,000 was taxed as if it were $1.03, since in addition to the tax on an extra dollar of income, the taxpayer lost a tax deduction by giving up $0.03 of itemized deductions.", "This limitation was scheduled to expire after tax year 1995 under OBRA90, but was later extended. Allowable deductions for medical expenses, casualty and theft losses, and investment interest were not subject to this limitation. For tax years after 1991, the $100,000 threshold was indexed for inflation.", "OBRA90 phased out the tax benefits of the personal exemption for higher-income households. Each personal exemption was phased out by a factor of 2% for each $2,500 (or fraction thereof) by which a taxpayer's AGI exceeded a given threshold amount. In 1991, the threshold amounts were $150,000 for a joint return, $100,000 for a single return, and $125,000 for a head-of- household return. Starting in 1992, these amounts were indexed for inflation. The phaseout provision was scheduled to expire at the end of 1995.", "A simple example illustrated how the personal exemption phaseout increased the tax burden on affected taxpayers. In 1991, a joint household whose AGI was $183,000 would have lost 28% of their total personal exemptions. The AGI amount in excess of the threshold in this instance would have been $33,000, or $183,000 AGI minus the $150,000 threshold limit. The $33,000 excess divided by $2,500 would produce a factor of 13.2, which when rounded up would equal 14. This figure is multiplied by 2% to arrive at the final disallowance amount of 28%. Hence, if the family had claimed two personal exemptions, which at $2,150 each would have totaled $4,300, they would have been allowed to deduct $3,096 ($4,300 total personal exemptions less the $1,204 disallowance, which is 28% of the total)."], "subsections": []}, {"section_title": "Omnibus Budget Reconciliation Act of 1993", "paragraphs": ["OBRA93 made several changes in the individual marginal income tax rate structure. First, it added two new marginal tax rates, 36% and 39.6%, at the upper end of the income spectrum. The 39.6% tax bracket was the result of adding a 10% surtax to the 36% rate for taxpayers with taxable incomes over $250,000 in 1993. ", "Although OBRA93 was enacted in August 1993, the increase in the top marginal tax rates was made effective retroactively to January 1, 1993. Affected taxpayers, however, were not assessed penalties for underpayment of 1993 taxes resulting from the tax rate increase. Taxpayers were also allowed to pay any additional 1993 taxes in three equal installments over a two-year period.", "Second, OBRA93 delayed indexation of the new top marginal income tax brackets for one year. Hence, the nominal dollar tax brackets for the 36% and 39.6% marginal tax rates remained at the same level for both tax years 1993 and 1994.", "Finally, OBRA93 made permanent both the itemized deduction limitation and the phaseout of the tax benefits from personal exemptions."], "subsections": []}, {"section_title": "Economic Growth and Tax Relief Reconciliation Act of 2001", "paragraphs": ["EGTRRA made several major changes to the marginal tax rate structure. Many of the act's provisions were set to phase in over a period of time, but subsequent legislation, described in the next section, overrode the schedule originally set by EGTRRA. All of the EGTRRA provisions, as amended, were set to expire at the end of 2010.", "First, the 2001 act created a new 10% bracket. It applied, beginning in tax year 2002, to the first $12,000 of taxable income for married couples filing jointly, the first $10,000 of taxable income for heads of households, and the first $6,000 of taxable income for single individuals. For tax year 2001, the act created a \"rate reduction tax credit,\" mimicking the effects of the 10% tax rate bracket for most taxpayers.", "EGTRRA gradually phased in and expanded the bracket over several years, but in 2003-2007, these provisions of EGTRRA were accelerated by subsequent legislation. In 2008, EGTRRA became effective again, setting the 10% marginal tax rate bracket at $7,000 for single filers and $14,000 for joint filers. Starting with tax year 2009, these bracket amounts were indexed for inflation.", "Second, the 2001 act gradually reduced the top four marginal income tax rates. Under prior income tax law, the top four marginal tax rates were 28%, 31%, 36%, and 39.6%. When fully phased in, the 2001 act reduced the top four marginal income tax rates to 25%, 28%, 33%, and 35%. Once again, under EGTRRA the reductions were scheduled to take place in 2001 through 2006, but subsequent legislation accelerated the EGTRRA phase-in schedule.", "Third, EGTRRA also repealed the limitation on itemized deductions and personal exemptions for high-income taxpayers. The repeal was phased in between 2006 and 2009. The limitation was completely repealed for 2010, but it was scheduled to reappear again in 2011, once the EGTRRA's tax cuts expire.", "Fourth, some of the act's measures designed to reduce the marriage penalty affected the rate bracket structure. The act increased the income range of the 15% tax bracket for married couples filing joint returns to twice the income range of the 15% tax bracket for single returns. Under EGTRRA, this provision was scheduled to phase in from 2005 to 2008, but subsequent legislation accelerated the phase-in. Under EGTRRA, the upper dollar limit of the 15% tax bracket for joint returns was set at 180% of the upper dollar limit of the 15% tax bracket for single returns in 2005, 187% of that limit in 2006, 193% of that limit in 2007, and 200% of that limit in 2008 and subsequent years.", "Finally, the 2001 act increased the standard deduction for joint returns to twice the size of the standard deduction for single returns. The change was scheduled to be phased in over a five-year period, 2005 to 2009, but it was accelerated by the subsequent bills as well. This had the effect of raising the lower income threshold of the lowest tax bracket for married taxpayers."], "subsections": []}, {"section_title": "Jobs and Growth Tax Relief Reconciliation Act of 2003", "paragraphs": ["JGTRRA accelerated several changes to the individual income tax rate structure that were first enacted under EGTRRA. It moved forward to 2003 the tax rate reductions, the expansion of the 10% tax bracket, and the widening of the 15% tax bracket for joint returns to make it double the width of the 15% tax bracket for single returns. Under EGTRRA, some of these changes would not have been fully phased in until 2009.", "JGTRRA also lowered the tax rates for long-term capital gains and dividends. It reduced the top rate to 15%, and allowed a rate of 0% for certain low-income taxpayers."], "subsections": []}, {"section_title": "Working Families Tax Relief Act of 2004", "paragraphs": ["WFTRA extended several tax provisions of JGTRRA that were scheduled to expire at the end of 2004. It extended the expansion of the 10% income tax bracket through 2007, at which point EGTRRA's relevant provisions would be fully phased in, maintaining a constant amount of tax relief.", "WFTRA also extended marriage penalty relief under EGTRRA from 2005 to 2008. The standard deduction for a married couple filing jointly was set to be equal to double the standard deduction for an unmarried single filer over that period. In addition, the act made the size of the 15% tax bracket for joint filers double that of the tax bracket for single filers from 2005 to 2007. As a result, in both cases, the marriage penalty relief extended from 2005 to 2010, before ending under the EGTRRA sunset provision."], "subsections": []}, {"section_title": "Tax Increase Prevention and Reconciliation Act of 2005", "paragraphs": ["The reductions in tax rates for long-term capital gains and dividends under JGTRRA were set to expire at the end of 2008; TIPRA extended them through the end of 2010."], "subsections": []}, {"section_title": "Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010", "paragraphs": ["A last-minute agreement in 2010 between President Obama and congressional leaders of both parties cleared the way for an extension of all the Bush-era individual tax cuts through the end of 2012. TRUC served as the legislative vehicle for the extension."], "subsections": []}, {"section_title": "American Taxpayer Relief Act of 2012", "paragraphs": ["Facing a reversion of each statutory individual income tax rate to its level before the enactment of EGTRRA starting January 1, 2013, Congress and President Obama agreed on legislation (ATRA) to extend permanently each of the Bush-era rates and restore the top marginal tax rate to its pre-EGTRRA level of 39.6%. ", "The act also permanently extended the repeal of the phaseout of the personal exemption included in EGTRRA, but it restricted the repeal of the phaseout to taxpayers with AGIs of $250,000 or less for single filers and $300,000 or less for married couples filing jointly. Taxpayers with AGIs above these inflation-adjusted amounts were subject to the phaseout. The same rule applied to the repeal under EGTRRA of the Pease limitation on the amount of itemized deductions an upper-income taxpayer could take."], "subsections": []}, {"section_title": "P.L. 115-97", "paragraphs": ["Individual marginal income tax rates did not change after ATRA until the enactment of P.L. 115-97 in December 2017. The act made significant changes to a number of individual income tax provisions, including individual tax rates and the standard deduction. For tax years beginning in 2018 and ending before 2027, the individual income tax rate structure consists of seven brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. (The rates are scheduled to revert to their levels in 2017 starting in 2026.) For individuals receiving income from passthrough businesses (i.e., partnerships, S corporations, and sole proprietorships), the current rates can be adjusted downward as a result of a new deduction under Section 199A; the deduction is equal to up to 20% of a noncorporate business owner's qualified income from a qualified trade or business.", "The 2017 tax revision also made the following changes in these key elements of the individual income tax for the 2018 to 2025 tax years: ", "It terminated the personal exemption (which was $4,050 in 2017). It increased the standard deduction (which is indexed for inflation using the chained consumer price index for urban consumers) for nonitemizers to $24,000 for joint filers and $18,000 for head-of-household filers, and $12,000 for single filers, from 2018 to 2025. It eliminated the deduction for miscellaneous expenses from 2018 through 2025. It suspended the overall limit on itemized deductions for certain high-income taxpayers."], "subsections": []}]}, {"section_title": "Effects of Inflation on Income Tax Liabilities", "paragraphs": ["During periods of relatively high inflation, a progressive income tax based on tax brackets set in nominal dollars can lead to automatic tax increases, and these increases can lead to unintended changes in the overall distribution of the tax burden by income class. This is because nominal incomes rise faster than real incomes, all other things being equal. As a result, tax burdens for taxpayers become larger than what lawmakers had intended when they established existing statutory tax rates. In the absence of indexation of the elements of the tax code determining the tax burdens of individuals, an increasing share of taxpayers will face growing tax liabilities because their nominal incomes are rising, irrespective of what happens to their real incomes.", "The effects of inflation on income tax liabilities can be substantial, even in periods of low inflation, such as the last two decades. According to the Bureau of Labor Statistics, $1,000 in November 1988 had the buying power of $2,095.08 in November 2018. Year-to-year changes can be negligible, but over a decade or so, those changes can add up to make a substantial difference through the power of compounding.", "A simplified hypothetical example illustrates the impact that a lack of indexation can have over time for the tax burdens (as measured by the average income tax rate) of individual taxpayers. The results are summarized in Table 1 . Assume that the individual income tax structure from 1988 applied without indexation (or any other changes) in 2017. Also assume that a household with a husband, wife, and two children had an adjusted gross income (AGI) of $35,000 in 1988, was eligible for no tax credits, and filed a joint tax return. If the family took the standard deduction, then its taxable income would have been $22,200 ($35,000 minus the standard deduction of $5,000 and four personal exemptions at $1,950 apiece), and its tax liability would have been $3,330. As a result, the household's average tax rate was 9.5% ($3,330 divided by $35,000 income) in 1988.", "Next consider what would happen to the household's tax burden in 2017 if the family's income had kept up with inflation but the 1988 tax structure had remained in place, with no indexation for inflation. The family's AGI would have been $71,766: $35,000 x 2.05 (the rise in the general price level as measured by the Consumer Price Index for all Urban Consumers (CPI-U) from 1988 to 2017). Its taxable income would have been $58,966; its tax liability would have totaled $12,643; and its average tax rate would have reached 17.6%. ", "So in the absence of the indexation of the key income tax elements when the family's AGI rose in step with the rate of consumer inflation, keeping the buying power of its income constant, the family's income tax burden increased by 85% from 1988 to 2017. This difference exemplifies what is known as \"bracket creep,\" an effect that is accelerated during periods of high inflation.", "Under an indexed individual income tax, however, the household would have experienced no change in their tax burden. With an inflation adjustment equal to the rise in the CPI-U, the value of the standard deduction for a joint return would have increased from $5,000 in 1988 to $10,252 in 2017, and the personal exemption for each family member would have increased from $1,950 to $3,998. Under these circumstances, the family's 2017 taxable income would have been $45,522 ($71,766 in income less the inflation-adjusted standard deduction and four personal exemptions). Tax brackets would have adjusted as well. Based on this taxable income and the adjusted brackets, their income tax liability would have been $6,828, yielding an average tax rate of 9.5%, the same as in 1988. While the nominal household's amount of income and tax owed rose, the value of both in 1988 dollars stayed approximately the same.", "Congress added indexation to the individual income tax as a part of the package of statutory tax rate reductions included in the Economic Recovery Tax Act of 1981. The U.S. rate of inflation was exceptionally high at the time, and this condition influenced congressional deliberations on the benefits of tax indexation. As the Joint Committee on Taxation noted in its explanation of the act:", "The Congress believed that \"automatic\" tax increases resulting from the effects of inflation were unfair to taxpayers, since their tax burden as a percentage of income could increase during intervals between tax reduction legislation, with an adverse effect on incentives to work and invest. In addition, the Federal Government was provided with an automatic increase in its aggregate revenue, which in turn created pressure for further spending.", "Since 1981, the list of indexed elements has gradually expanded and now includes more than three dozen tax items. TRA86 extended indexation to some newly created tax provisions, including the standard deductions for the elderly and the blind and the EITC. EGTRRA indexed the phaseout amounts for the EITC, starting in 2008.", " Table 2 lists the major indexed tax items and notes the first year of the adjustment. ", "Indexing may compound the complexity of the individual income tax, but, given its benefits to taxpayers over time, this effect is arguably a minor matter. The year-to-year changes in dollar amounts are usually small, so taxpayers seldom, if ever, face unexpected changes that might materially affect them. On the revenue side, of course, indexing results in lower government receipts.", "But some key elements of the tax remain unadjusted for inflation. One such element is the child tax credit. Under current law, the amount of the credit itself and the phaseout thresholds for higher-income taxpayers are not adjusted for inflation. But the earned income threshold used in calculating the credit's refundable amount has been adjusted for inflation since 2001. Consequently, under current law, inflation erodes the value of the credit and reduces the number of eligible taxpayers over time. Another element not indexed for inflation is the threshold amounts for determining who pays the 3.8% tax on net investment income that was added in 2013."], "subsections": []}, {"section_title": "The Mechanics of Indexation", "paragraphs": ["Most elements are indexed using the technical calculation described below. In some instances, the calculation methodology differs somewhat. Examples include the EITC or transportation benefits. The variations are insignificant, as long as they do not lead to systematic deviations from the actual rate of inflation.", "The adjustment for tax years before 2019 was based on the percentage by which the average Consumer Price Index for All Urban Consumers (CPI-U) in the 12 months ending on August 31 of the preceding year exceeded the average CPI-U during a 12-month base period. Not all indexed tax elements used the same base period, as shown in Table 2 .", "With the exception of the EITC, inflation adjustments were rounded down to the nearest multiple of $50. Although rounding down affected the accuracy of any given year's inflation adjustment, the effect was not cumulative since each year's adjustment reflected the total inflation that occurred between the adjustment year and the base period.", "For example, the adjustment factor for the personal exemption in 2017 was calculated as follows. By law, the base period for this factor was September 1987 through August 1988, when the average CPI-U was 116.6. The average CPI-U for September 2015 through August 2016, on which the 2017 value is based, was 238.6. Thus, the inflation adjustment factor in 2017 was 2.05 (238.6/116.6). This factor was then applied to $2,000, the value of the exemption in 1989, resulting in a personal exemption of $4,080 for the 2017 tax year. Rounding this number down to the nearest multiple of $50 produced the final value of the exemption in 2017: $4,050.", "For tax years beginning after December 31, 2018, a different consumer price index will be used to adjust the values of income tax elements subject to indexation. Under a provision of P.L. 115-97 , the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) replaces the CPI-U for this purpose. ", "Both indices were designed by the Bureau of Labor Statistics (BLS) to measure price changes faced by the average urban consumer. Each of them tracks the prices of about 80,000 goods and services each month in cities throughout the United States. The BLS bases the indices on a fixed basket of goods and services obtained from a survey of the spending patterns of 7,000 American families. The survey determines which goods and services go into the basket and how much weight should be assigned to each item in calculating the overall change in prices. The market basket for the CPI-U is revised every two years.", "Many analysts have argued that the CPI-U overstates rises in the cost of living because it does not fully account for the changes consumers make in their buying patterns when the price of one item in the market basket goes up or the price of another goes down. When this tendency to substitute lower-priced items for other items whose prices have increased is ignored, the impact on consumers of inflation is overstated.", "The chained CPI-U is better at capturing changes in consumer spending patterns tied to price increases or decreases. This is because it compares details about what a consumer buys in the period before a price change with details about what he/she buys in the period after the change. In essence, the BLS calculates one measure of inflation for the first-period basket and a second measure of inflation for the second-period basket and then takes the average. The basket after the price change may contain different amounts of some items, as consumers respond to increases or decreases in the prices of other items in the same categories. For instance, the second-period basket may include more chicken than the first-period basket did when the price of beef increases while the price of chicken remains unchanged. This substitution softens the impact of the price rise for beef on the overall measure of inflation. The chained CPI-U does this every month, creating an index that links these changes from month to month. As a result, the index reflects shifts in consumer buying patterns between months and between basket items. It also leads to lower estimates of the rate of increase in the cost of living over time, since the chained CPI-U is built around the tendency of consumers in general to purchase lower-priced items that can be substituted for items whose prices have risen. From 2000 to 2012, the annual average for the chained CPI-U rose by 29.4%. In the same period, the CPI-U's annual average increased by 33.3%.", "Many analysts have noted that using the chained CPI-U to adjust the amount of individual income tax elements for inflation has one significant drawback: the index is revised several times, while the CPI-U is never revised. A final reading for the chained CPI-U is released between 10 and 16 months after its initial release. Consequently, starting in 2018, tax elements that are adjusted for inflation are indexed to a preliminary estimate that could be significantly revised. ", "Switching to the chained CPI-U to adjust key tax elements for inflation is likely to result in more bracket creep than would occur if the elements were still adjusted for inflation using the CPI-U. Since the chained CPI-U increases more slowly than the CPI-U, tax bracket thresholds are likely to rise by smaller amounts from one year to the next. More individual taxpayers will be pushed into higher tax brackets than they would be if the CPI-U were still used for inflation adjustment. One significant result is an increase in federal tax revenue over time. The Joint Committee on Taxation has estimated that the revenue gain from switching to the chained CPI-U will total $134 billion from FY2018 to FY2027.", "Since the onset of the Great Recession in late 2007, the annual U.S. inflation rate has fluctuated between -0.4% and 3.2%, as measured by the CPI-U. Negative inflation, or deflation, occurred in 2009 relative to 2008. Deflation denotes a decrease in the general price level. As a result, the inflation adjustments in 2010 were very small or nonexistent. Several other federal programs experienced similar situations, even though they do not use the same indexing methodology. For example, there was no cost-of-living adjustment for Social Security benefits in 2010.", "If the United States were to experience a period of sustained deflation, the income tax elements could decline in constant dollars. By law, however, the elements cannot fall below their base-year values. Since their current values are much higher than their base values, which were established years ago in some cases, and the near-term outlook for inflation is projecting rates below 3%, this limitation is unlikely to come into play anytime soon for most indexed elements."], "subsections": []}, {"section_title": "Tax Rate Schedules for the 1988 Through 2019 Tax Years", "paragraphs": ["The following tables present the personal exemption amounts, standard deductions, and statutory marginal tax rates schedules for each tax year from 1988 through 2019."], "subsections": []}]}}
{"id": "R45626", "title": "Older Americans Act: Senior Community Service Employment Program", "released_date": "2019-03-21T00:00:00", "summary": ["The Senior Community Service Employment Program (SCSEP) authorizes the Department of Labor (DOL) to make grants to support part-time community service employment opportunities for eligible individuals age 55 or over. In FY2019, appropriations for SCSEP programs were $400 million and supported approximately 41,000 positions. DOL may also refer to the SCSEP program as Community Service Employment for Older Americans (CSEOA)", "SCSEP is authorized by Title V of the Older Americans Act (OAA). The Older Americans Act Reauthorization Act of 2016 (P.L. 114-144) authorized appropriations for OAA programs for FY2017 through FY2019. In FY2019, SCSEP appropriations accounted for about 20% of the funding under the OAA.", "The bulk of SCSEP appropriations support two primary grant streams: one to national nonprofit organizations and one to state agencies. In the most recent program year, approximately 78% of formula grant funds were allocated to national grantees and about 22% were allocated to state grantees. Both the national organizations and state grantees subgrant funds to host agencies that provide the actual community service employment opportunities to participants.", "Host agencies are responsible for recruiting eligible participants. To be eligible for the program, prospective participants must be at least age 55, low-income, and unemployed. Federal law requires host agencies to give preference to prospective participants who demonstrate additional barriers to employment such as having a disability or being at risk of homelessness.", "Program participants work part-time in community service jobs, including employment at schools, libraries, social service organizations, or senior-serving organizations. Program participants earn the higher of minimum wage or the typical wage for the job in which they are employed. An individual may typically participate in the program for a cumulative total of no more than 48 months.", "During orientation, participants receive an assessment of their skills, interests, capabilities, and needs. This assessment informs the development of an individual employment plan (IEP). A participant's IEP is updated throughout their participation in the program.", "Grantees are subject to a performance accountability system. Performance metrics generally relate to participants' unsubsidized employment and earnings after exiting the program. In addition to outcome-based metrics, grantees are also assessed on participants' total number of hours of service and whether the grantee served participants with barriers to employment. Grantees that do not meet negotiated levels of performance may become ineligible for subsequent grants."], "reports": {"section_title": "", "paragraphs": ["T he Senior Community Service Employment Program (SCSEP) authorizes the Department of Labor (DOL) to make grants to support part-time community service employment opportunities for eligible individuals who are age 55 or over and have limited employment prospects. Participation in the program is temporary, with the goal of transitioning participants to unsubsidized employment.", "In FY2019, appropriations for the SCSEP program were $400 million and supported approximately 41,000 positions. SCSEP appropriations accounted for approximately 20% of total Older Americans Act funding in FY2019."], "subsections": [{"section_title": "Authorization, Administration, and Terminology", "paragraphs": ["SCSEP is authorized by Title V of the Older Americans Act of 1965, as amended (OAA; 42 U.S.C. 3056 et seq.) Since enactment of the OAA, Congress has reauthorized and amended the act numerous times. Most recently, the Older Americans Act Reauthorization Act of 2016 ( P.L. 114-144 ) authorized appropriations for OAA programs for FY2017 through FY2019, and made other changes to the act.", "Prior to the 2016 OAA reauthorization, the OAA Amendments of 2006 ( P.L. 109-365 ) reauthorized all programs under the act through FY2011. Although the authorizations of appropriations under the OAA expired at the end of FY2011, Congress continued to appropriate funding for OAA-authorized activities through FY2016.", "Grants under the program are administered by the Employment and Training Administration (ETA) at the Department of Labor (DOL). (References to the Secretary in this report refer to the Secretary of Labor, unless otherwise specified.) SCSEP is the only OAA program administered by DOL. Other OAA programs are administered by the Administration for Community Living (ACL) at the Department of Health and Human Services (HHS). ", "SCSEP is supported by discretionary appropriations under the DOL-HHS appropriations bill. SCSEP programs operate on DOL's program year (PY), which operates nine months behind the fiscal year. Activities in a given program year are supported by funding from the corresponding fiscal year. For example, PY2017 ran from July 1, 2017, through June 30, 2018, and was supported by FY2017 appropriations.", "Programs administered under Title V of the OAA may also be referred to as the Community Service Employment for Older Americans (CSEOA) programs. DOL uses the CSEOA and SCSEP terminology interchangeably."], "subsections": []}, {"section_title": "Grant Structure and Funding Formulas", "paragraphs": ["From its total appropriation, the OAA establishes three reservations: (1) up to 1.5% for DOL-selected pilots, demonstration, and evaluation projects; (2) a fixed percentage of 0.75% for the territories of Guam, American Samoa, the U.S. Virgin Islands, and the Northern Mariana Islands; and (3) a portion determined by the Secretary for activities that support eligible individuals who are American Indian and Pacific Islander/Asian American. The remaining funds are allocated to formula grants.", "Title V supports formula grants to both national organizations (\"national grantees\") and state agencies (\"state grantees\"). National grantees are typically nonprofit organizations that operate in more than one state. State grantees are state government agencies. State grantee agencies are typically housed in a state's workforce unit or aging unit.", "In PY2018, approximately 78% of funds for formula grants ($298 million) were distributed among national grantees. There are about 15-20 national grantee organizations, including AARP and the National Council on Aging. About 22% of PY2018 funds for grants ($84 million) were allocated to state agencies. Both national grantees and state grantees subgrant funds to partner organizations that work with host agencies that provide the actual employment (see Figure 1 )."], "subsections": [{"section_title": "Funding Formula and Hold Harmless Provision", "paragraphs": ["The OAA specifies that in years where funds available for formula grants exceed the \"funds necessary to maintain the fiscal year 2000 level of activities supported by grantees,\" the excess funds are allotted using a series of formulas that are directly correlated to the number of persons age 55 and over in the state and inversely correlated to the per capita income of the state. Thus, the formulas favor states with larger populations of persons age 55 or over and states with lower per capita incomes. The law contains hold harmless provisions that specify that in years where funds are less than their FY2000 level, funds are awarded proportionately \"to maintain their fiscal year 2000 level of activities.\"", "The last year in which funds were allocated using the formula was PY2010. Since then, funding for grants has consistently been below the FY2000 level (see Table 1 ). As such, specific grant levels have varied but each state's relative share of grants funds has been proportionate to its FY2000 levels and a consistent share of the funding has been allocated to national grantees in each state as well as each state agency.", "The OAA defines a state's allotment (and corresponding hold harmless share of funding) as the sum of the allotment for national grants in the state and the grant to the state agency. The proportion of each state's total funding that comes from grants to national organizations versus grants to the state agency varies somewhat."], "subsections": []}]}, {"section_title": "State Plans and Integration with WIOA9", "paragraphs": ["As a condition of receiving SCSEP funds, each state's governor must develop and submit a state plan to DOL. The plan can be an independent document or part of a combined plan with the state's activities under the Workforce Innovation and Opportunity Act (WIOA), the primary federal workforce development legislation authorizing workforce services for the broader population.", "Whether the SCSEP plan is independent or part of a combined plan, it must provide information on individuals in the state who will be eligible for the program as well as the localities most in need of services. The plan must be developed in consultation with the state WIOA agency, national grantees operating in the state, and other stakeholders. The state plan must describe how the activities under SCSEP will be coordinated with activities under WIOA and how the state will minimize duplication between Title V and WIOA."], "subsections": []}, {"section_title": "Responsibilities of Host Agencies and Activities of Participants", "paragraphs": ["Grantees that receive funds directly from DOL typically allocate funds to subgrantees and/or host agencies that provide the actual work site placements and part-time community service employment. "], "subsections": [{"section_title": "Recruitment and Participant Eligibility", "paragraphs": ["Host agencies are responsible for recruiting program participants. To be eligible for the program, a prospective participant must be age 55 or older, unemployed, and a member of a family with income of not more than 125% of the poverty level ($15,613 for a family size of one in 2019). Statute specifies that priority will be given to prospective participants who demonstrate additional barriers to employment. Specifically, an individual may receive priority if the individual", "is 65 years of age or older; has a disability; has limited English proficiency or low literacy skills; resides in a rural area; is a veteran; has low employment prospects; has failed to find employment after utilizing services provided under Title I of the Workforce Innovation and Opportunity Act; or is homeless or at risk for homelessness.", "As is the case with other DOL programs, eligible veterans receive priority of service in the SCSEP program."], "subsections": []}, {"section_title": "Participant Employment and Related Activities", "paragraphs": ["The OAA allows host agencies to employ program participants part-time in a variety of community service activities, including (but not limited to) social, health, welfare, and educational services as well as conservation and community beautification activities. Some participants may be employed at senior centers and other facets of the Aging Network established by the OAA, such as an Area Agency on Aging.", "Program participants are paid by the host agency. Participants must earn the highest of (1) the federal minimum wage, (2) the prevailing minimum wage in the state or locality in which the participant works, or (3) the prevailing rate for individuals employed in similar occupations by the same employer.", "Title V of the OAA does not establish a definition for \"part-time\" and federal policy does not limit the number of hours participants can work. In establishing the cost per authorized position, however, Title V establishes a formula that includes the federal minimum wage \"multiplied by the number of hours equal to the product of 21 hours and 52 weeks.\"", "As part of program orientation, the subgrantee or host agency is responsible for assessing the participant, including the participant's skills, interests, needs, and potential for unsubsidized employment. Using information from this assessment, the grantee works with the participant to develop an individual employment plan (IEP) that includes a post-service objective (including employment, if appropriate) and the timeline for achievement of that objective.", "In addition to employment, grantee organizations may also provide training and supportive services. These services can include (but are not limited to) costs of transportation, health and medical services, special job-related or personal counseling, and work-related incidentals such as eyeglasses or work shoes.", "Individual participants are typically limited to an aggregate maximum of 48 months of participation in the program. Grantees are required to manage programs such that the average duration of participation for all participants does not exceed 27 months. This cap may be increased to an average of 36 months in certain circumstances such as high unemployment in the service area.", "SCSEP participants are not federal employees. Regulations specify that grantees are responsible for determining whether or not a participant qualifies as an employee of the grantee, subgrantee, or host agency under applicable laws."], "subsections": []}, {"section_title": "Financial Responsibilities of Grantees", "paragraphs": ["Grantees must match SCSEP grants such that federal funds account for no more than 90% of the project cost. DOL may waive match requirements in cases of emergency or disaster projects or projects in economically depressed areas.", "At least 75% of federal grants must be used to pay wages and legally required benefits for program participants. In limited cases, this requirement may be reduced to 65% if the program allocates a certain portion of funds to training and supportive services. In most circumstances, grantees may not use more than 13.5% of their federal grant for administrative expenses."], "subsections": []}]}, {"section_title": "Performance Accountability", "paragraphs": ["Federal law establishes six core indicators for CSEOA grantees. Three of the six CSEOA indicators focus on unsubsidized employment and earnings after participation in the program. The performance indicators are", "1. hours (in the aggregate) of community service employment; 2. the percentage of project participants who are in unsubsidized employment during the second quarter after exit from the project; 3. the percentage of project participants who are in unsubsidized employment during the fourth quarter after exit from the project; 4. the median earnings of project participants who are in unsubsidized employment during the second quarter after exit from the project; 5. indicators of effectiveness in serving employers, host agencies, and project participants; and 6. the number of eligible individuals served, including the number of participating individuals with demonstrated barriers to employment.", "Indicators 2-4 are largely based on the performance accountability indicators for the general workforce programs under WIOA. Indicators 1, 5, and 6 do not have direct analogues in the WIOA performance accountability system.", "The current performance accountability measures were established by the Older Americans Act Reauthorization Act of 2016 ( P.L. 114-144 ). Grantees started reporting performance under these metrics beginning in PY2018, starting July 1, 2018. ", "Grantees negotiate expected performance levels with DOL. Negotiating performance levels at the grantee level allows the expected performance levels to reflect the types of participants a particular grantee serves or the environment in which it operates (e.g., the grantee serves a disproportionate number of high-need participants or operates in an area with a high rate of unemployment.) Performance accountability is assessed at the level of the grantee (i.e., the entity that receives funding directly from DOL). Grantees are responsible for oversight of subgrantees and host agencies.", "Regulations establish that performance is measured as a percentage of the negotiated level of performance. For example, if a grantee negotiates a performance rate of 50% of participants in unsubsidized employment in the second quarter after exit and 48% of the program participants subsequently meet that standard, the grantee has reached 96% of its agreed-upon level of performance. Performance in the range of 80% to 100% constitutes meeting the core level of performance. ", "If a national or state grantee fails to meets its negotiated level of performance, the grantee must receive technical assistance from DOL and submit a corrective action plan. If a national grantee fails to meet expected levels of performance for four consecutive years, the grantee may not compete in the subsequent grant competition. If a state grantee fails to meet the expected levels of performance for three consecutive program years, the state must conduct a competition to award its formula funds to a new grantee."], "subsections": []}, {"section_title": "Program Data and Reports", "paragraphs": ["DOL makes available several reports with SCSEP participation data. Data are reported by program year. Reports currently made available by DOL include the following:", "Aggregate and Individual Performance Reports . These reports include the performance of each national grantee and state agency relative to the negotiated levels of performance. Nationwide Quarterly Progress . These reports include total participation as well as data on demographics and participants' demonstrated barriers to employment. Service to Minority Individuals . These reports include information on the participation and outcomes of minorities for each grantee. The reports are required under Section 515 of the OAA. "], "subsections": []}]}}
{"id": "R41916", "title": "The U.S. Export Control System and the Export Control Reform Initiative", "released_date": "2019-04-05T00:00:00", "summary": ["Difficulty with striking an appropriate balance between national security and export competitiveness has made the subject of export controls controversial for decades. Through the Arms Export Control Act (AECA), the International Emergency Economic Powers Act (IEEPA), the Export Controls Act of 2018 (ECA), and other authorities, the United States restricts the export of defense articles; dual-use goods and technology; certain nuclear materials and technology; and items that would assist in the proliferation of nuclear, chemical, and biological weapons or the missile technology used to deliver them. U.S. export controls are also used to restrict exports to certain countries on which the United States imposes economic sanctions. The ECA legislates dual-use controls.", "The U.S. export control system is diffused among several different licensing and enforcement agencies. Exports of dual-use goods and technologies\u2014as well as some military items\u2014are licensed by the Department of Commerce, munitions are licensed by the Department of State, and restrictions on exports based on U.S. sanctions are administered by the U.S. Department of the Treasury. Administrative enforcement of export controls is conducted by these agencies, while criminal penalties are issued by units of the Department of Homeland Security and the Department of Justice.", "Aspects of the U.S. export control system have long been criticized by exporters, nonproliferation advocates, allies, and other stakeholders as being too rigorous, insufficiently rigorous, cumbersome, obsolete, inefficient, or combinations of these descriptions. In August 2009, the Barack Obama Administration launched a comprehensive review of the U.S. export control system. In April 2010, then-Defense Secretary Robert M. Gates proposed an outline of a new system based on four singularities", "a single export control licensing agency for dual-use, munitions exports, and Treasury-administered embargoes, a unified control list, a single primary enforcement coordination agency, and a single integrated information technology (IT) system.", "The rationalization of the two control lists was the Obama Administration's focus. The Administration made no specific proposals concerning the single licensing agency, although the Administration implemented some elements of a future single system, such as a consolidated screening list and harmonization of certain licensing policies."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview of the U.S. Export Control System", "paragraphs": ["The United States restricts the export of defense articles; dual-use goods and technology; certain nuclear materials and technology; and items that would assist in the development of nuclear, chemical, and biological weapons or the missile technology used to deliver them. A defense item is defined by regulation as one that \"[m]eets the criteria of a defense article or defense service on the U.S. Munitions List\" or \"[p]rovides the equivalent performance capabilities of a defense article\" on that list. Dual-use goods are commodities, software, or technologies that have both civilian and military applications.", "The United States also controls certain exports in adherence to several multilateral nonproliferation control regimes. In addition, U.S. export controls are used to restrict exports to certain countries on which the United States imposes economic sanctions, such as Cuba, Iran, and Syria. Through the Export Controls Act of 2018 (ECA), the Arms Export Control Act (AECA), the International Emergency Economic Powers Act (IEEPA), and other authorities, Congress has delegated, in the context of broad statutory power, to the executive branch its express constitutional authority to regulate foreign commerce by controlling exports. ", "Various aspects of the U.S. export control system have long been criticized by exporters, nonproliferation advocates, allies, and other stakeholders as being too restrictive, insufficiently restrictive, cumbersome, obsolete, inefficient, or any combination of these descriptions. Some contend that such controls overly restrict U.S. exports and make firms less competitive. Others argue that U.S. defense and foreign policy considerations should trump commercial concerns. In January 2007, the Government Accountability Office (GAO) designated government programs designed to protect critical technologies, including the U.S. export control system, as a \"high-risk\" area warranting a \"strategic reexamination of existing programs to identify needed changes.\" GAO's report named poor coordination among export control agencies, disagreements over commodity jurisdiction between the Departments of State and Commerce, unnecessary delays and inefficiencies in the license application process, and a lack of systematic evaluative mechanisms to determine the effectiveness of export controls. A 2017 GAO report cited \"progress\" with regard to improving the export control system, but added that ", "government-wide challenges remain, including the need to adopt a more consistent leadership approach, improve coordination among programs, address weaknesses in individual programs, and implement export control reform .", "The 2019 version of the GAO report noted improvements in the export control system, but still cited the need for further action. ", "On August 13, 2009, President Barack Obama announced the launch of a comprehensive review of the U.S. export control system; then-Secretary of Defense Robert M. Gates announced key elements of the Administration's agenda for reform in an April 2010 speech, with additional elaborations in subsequent months. Former Secretary Gates proposed a four-pronged approach that would establish", "a single export control licensing agency for both dual-use, munitions and exports licensed to embargoed destinations; a unified control list; a single enforcement coordination agency; and a single integrated information technology system, which would include a single database of sanctioned and denied parties.", "This section describes the characteristics of the dual-use, munitions, and nuclear controls. The information contained in this section also appears in chart form in Appendix A ."], "subsections": [{"section_title": "The Dual-Use System", "paragraphs": [], "subsections": [{"section_title": "Export Controls Act of 2018", "paragraphs": ["The Export Controls Act of 2018 (ECA; P.L. 115-232 , Subtitle B, Part I), which became law on August 13, 2018, provides broad, detailed legislative authority for the President to implement dual-use export controls. The law repeals the Export Administration Act EAA of 1979 (EAA; P.L. 96-72 ), which was the underlying statutory authority for dual-use export controls until it expired in 2001. After the EAA's expiration, the export control system created pursuant to that law was continued by a presidential declaration of a national emergency and the invocation of the International Emergency Economic Powers Act (IEEPA; P.L. 95-223 ). The ECA directs the President to implement the EAA nonproliferation sanctions provisions pursuant to IEEPA.", "The ECA, which has no expiration date, requires the President to control \"the export, reexport, and in-country transfer of items subject to the jurisdiction of the United States, whether by United States persons or by foreign persons,\" as well as ", "the activities of United States persons, wherever located, relating to specific (A) nuclear explosive devices; (B) missiles; (C) chemical or biological weapons; (D) whole plants for chemical weapons precursors; (E) foreign maritime nuclear projects; and (F) foreign military intelligence services.", "The ECA requires the Secretary of Commerce to \"establish and maintain a list\" of controlled items and \"foreign persons and end-uses that are determined to be a threat to the national security and foreign policy of the United States\"; require export licenses; \"prohibit unauthorized exports, reexports, and in-country transfers of controlled items\"; and \"monitor shipments and other means of transfer.\""], "subsections": []}, {"section_title": "Administration", "paragraphs": ["The Bureau of Industry and Security (BIS) in the Department of Commerce administers the export licensing and enforcement functions of the dual-use export control system. The Ronald Reagan Administration detached those functions from the International Trade Administration (ITA) in 1985 in order to separate them from the export promotion functions of that agency within the Department of Commerce. BIS also enforces U.S. antiboycott regulations concerning the Arab League boycott against Israel."], "subsections": []}, {"section_title": "Implementing Regulations", "paragraphs": ["The ECA is implemented by the Export Administration Regulations (EAR; 15 C.F.R. 730 et seq). As noted above, the EAR were continued under IEEPA's authority when the EAA was expired. The EAR set forth licensing policy for goods and destinations, the applications process used by exporters, and the CCL, which is the list of specific commodities, technologies, and software controlled by the EAR. The CCL has 10 categories", "nuclear materials, facilities, and equipment; materials, organisms, microorganisms, and toxins; materials processing; electronics; computers; telecommunications and information security; lasers and sensors; navigation and avionics; marine; and propulsion systems, space vehicles, and related equipment. ", "Each of these categories is further divided into functional groups: equipment, assemblies, and components; test, inspection, and production equipment; materials; software; and technology. Each controlled item has an export control classification number (ECCN) based on the above categories and functional groups. Each ECCN is accompanied by a description of the item and the reason for control. In addition to discrete items on the CCL, nearly all U.S.-origin items are \"subject to the EAR\"; such items may be restricted to a destination based on the end-use or end-user of the product. For example, a commodity that is not on the CCL may be denied if the good is destined for a military end-use or an entity known to be engaged in weapons proliferation."], "subsections": []}, {"section_title": "Licensing Policy", "paragraphs": ["The EAR set out the licensing policy for dual-use and certain military items; the regulations control items for reasons of national security, foreign policy, or short supply. National security controls are based on a common multilateral control list; however, the designation of countries to which those controls are applied is based on U.S. policy. Foreign policy controls may be unilateral or multilateral in nature. The EAR unilaterally control items for antiterrorism, regional stability, or crime control purposes. Antiterrorism controls proscribe nearly all exports to North Korea and the four countries designated as state sponsors of terrorism by the Secretary of State\u2014Cuba, Iran, Sudan, and Syria. These regulations also impose foreign policy controls on encryption items and on hot section technology, which is \"for the development, production, or overhaul of commercial aircraft engines, components, and systems.\" The EAR include \"enhanced controls\" on hot section technology and require a license \"for exports and reexports to all destinations, except Canada.\" The U.S. government reviews license applications for such technology \"on a case-by-case basis to determine whether the proposed export or reexport is consistent with U.S. national security and foreign policy interests.\" Foreign policy-based controls are also based on adherence to multilateral nonproliferation control regimes, such as the Nuclear Suppliers' Group, the Australia Group (chemical and biological precursors), and the Missile Technology Control Regime (MTCR).", "The EAR set out timelines for the consideration of dual-use licenses and the process for resolving interagency disputes. Within nine days of receipt, Commerce must refer the license to other agencies (State, Defense, and Energy, as appropriate), grant the license, deny it, seek additional information, or return it to the applicant. If Commerce refers the license to other agencies, the agency to which it is referred must recommend that the application be approved or denied within 30 days. The EAR provide a dispute resolution process for a dissenting agency to appeal an adverse decision. The entire licensing process, to include the dispute resolution process, is designed to be completed within 90 days. This process is depicted graphically in Appendix B .", "BIS noted in its Fiscal Year 2017 Budget Submission that its increased responsibility for exports as a result of export control reform has increased the burden on the bureau's licensing and enforcement functions."], "subsections": []}, {"section_title": "Enforcement and Penalties", "paragraphs": ["For criminal penalties, the ECA sanctions individuals up to $1 million or up to 20 years imprisonment, or both, per violation. This law also provides for civil penalties; for each violation, individuals may be fined up $300,000 \"or an amount that is twice the value of the transaction that is the basis of the violation with respect to which the penalty is imposed, whichever is greater.\" Such penalties may also include revocation of export licenses and prohibitions on the offender's ability to export. Enforcement is carried out by the Office of Export Enforcement (OEE) at BIS. OEE's headquarters is in Washington, DC, and the office has 10 offices outside of Washington, DC. U.S. field offices, as well as export control officers in seven foreign countries. OEE is authorized to carry out investigations domestically and works with DHS to conduct investigations overseas. The office, along with in-country U.S. embassy officials overseas, also conducts prelicense checks and postshipment verifications. "], "subsections": []}]}, {"section_title": "Military Export Controls", "paragraphs": [], "subsections": [{"section_title": "Arms Export Control Act (AECA)", "paragraphs": ["The AECA of 1976 (P.L. 90-629) provides the President with the statutory authority to control the export of defense articles and services. The AECA also contains the statutory authority for the Foreign Military Sales (FMS) program, under which the U.S. government sells U.S. defense equipment, services, and training on a government-to-government basis. The law also specifies criteria for Direct Commercial Sales (DCS), whereby eligible foreign governments and international organizations purchase some defense articles and services directly from U.S. firms.", "The AECA sets out foreign and national policy objectives for international defense cooperation and military export controls. Section 3(a) of the AECA specifies the general criteria for countries or international organizations to be eligible to receive U.S. defense articles and defense services provided under the act. The law also sets express conditions on the uses to which these defense articles may be put. Section 4 of the AECA states that U.S. defense articles and defense services shall be sold to friendly countries \"solely\" for use in \"internal security\"; for use in \"legitimate self-defense\"; to enable the recipient to participate in \"regional or collective arrangements or measures consistent with the Charter of the United Nations\"; to enable the recipient to participate in \"collective measures requested by the United Nations for the purpose of maintaining or restoring international peace and security\"; and to enable the foreign military forces \"in less developed countries to construct public works and to engage in other activities helpful to the economic and social development of such friendly countries.\" "], "subsections": [{"section_title": "Congressional Requirements", "paragraphs": ["A prominent feature of the AECA is the requirement for congressional consideration of certain foreign defense sales proposed by the President. This procedure includes consideration of proposals to sell major defense equipment and services, or to retransfer such military items to other countries. The procedure is triggered by a formal report to Congress under Section 36 of the AECA. In general, the executive branch, after complying with the terms of the applicable section of U.S. law (usually those contained in the AECA), is free to proceed with the sale unless Congress passes legislation prohibiting or modifying the proposed sale.", "Under Section 36(b) of the ACEA, Congress must be formally notified 30 calendar days before the Administration can take the final steps to conclude a government-to-government foreign military sale or issue an export license for commercial sales of major defense equipment valued at $14 million or more, defense articles or services valued at $50 million or more, or design and construction services valued at $200 million or more. In the case of such sales to NATO member states Japan, Australia, or New Zealand, Congress must be formally notified 15 calendar days before the Administration can proceed with the sale. However, the prior notice thresholds are higher for Japan, Australia, and New Zealand. These higher thresholds are $25 million for the sale, enhancement, or upgrading of major defense equipment; $100 million for the sale, enhancement, or upgrading of defense articles and defense services; and $300 million for the sale, enhancement, or upgrading of design and construction services, so long as such sales to these countries do not include or involve sales to a country outside of this group of nations. "], "subsections": []}]}, {"section_title": "Licensing Policy", "paragraphs": ["The International Traffic in Arms Regulations (ITAR) set out licensing policy for exports (and temporary imports) of U.S. Munitions List (USML) items. A license is required for the export of nearly all items on the USML. There is a limited license exemption for USML items for Canada because the United States considers Canada to be part of the U.S. defense industrial base. In addition, the United States has treaties with the United Kingdom and Australia to exempt certain defense articles from licensing obligations to approved end-users in those countries; the Senate gave its advice and consent to ratification of these treaties in 2010. Unlike some Commerce Department dual-use controls, licensing requirements are based on the nature of the article and not the end-use or end-user of the item. The United States implements a range of prohibitions on munitions exports to countries unilaterally or based on adherence to United Nations (U.N.) arms embargoes. In addition, any firm engaged in manufacturing, exporting, or brokering any item on the USML must register with the Directorate of Defense Trade Controls (DDTC) at the State Department and pay a yearly fee whether or not the firm seeks to export during the year."], "subsections": []}, {"section_title": "Administration", "paragraphs": ["Exports of defense goods and services are administered by DDTC, which is a component of the Department of State's Bureau of Political-Military Affairs and consists of four offices: Management, Policy, Licensing, and Compliance. DDTC also processes commodity jurisdiction requests, which determine the regulatory regime to which an item is subject.", "Critics of the defense trade system had previously decried the delays and backlogs in processing license applications at DDTC. A National Security Presidential Directive (NSPD-56), signed by President Bush on January 22, 2008, directed that the review and adjudication of defense trade licenses submitted under ITAR are to be completed within 60 days, except where six \"national security exceptions apply.\" Previously, except for the congressional notification procedures discussed above, DDTC had no defined timeline for the application process. "], "subsections": []}, {"section_title": "Enforcement and Penalties", "paragraphs": ["The AECA provides for criminal penalties of up to $1 million or 20 years of imprisonment, or both, for each violation. The AECA also authorizes civil penalties of up to $500,000 and debarment from future exports. Civil penalties increase annually pursuant to Section 701 of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 ( P.L. 114-74 ). DDTC has an enforcement staff and works with the Defense Security Service and the Customs and Border Protection and Immigration and Customs Enforcement (ICE) units at the Department of Homeland Security (DHS). In addition to adjudicating civil cases, DDTC assists DHS and the Department of Justice (DOJ) in pursuing criminal investigations and prosecutions. DDTC also coordinates the Blue Lantern end-use monitoring program, in which in-country U.S. embassy officials conduct prelicense checks and postshipment verifications of items transferred via DCS. The Department of Defense's Defense Security Cooperation Agency manages the department's Golden Sentry program, which performs an analogous function for FMS transfers. "], "subsections": []}]}, {"section_title": "Nuclear Controls13", "paragraphs": ["A subset of the above-mentioned dual-use and military controls are controls on nuclear items and technology. Controls on nuclear goods and technology are derived from the Atomic Energy Act of 1954 (P.L. 83-703), as amended, as well as from the ECA and the AECA. Controls on nuclear exports are divided among several agencies, based on the product or service being exported. The Nuclear Regulatory Commission (NRC) regulates exports of nuclear facilities and material. The NRC licensing policy and control list are located at 10 C.F.R. 110. BIS licenses \"outside the core\" civilian power plant equipment and maintains the Nuclear Referral List as part of the CCL. The Department of Energy authorizes the export of nuclear technology. DDTC exercises licensing authority over nuclear items in defense articles under the ITAR."], "subsections": []}, {"section_title": "Defense Technology Security Administration (DTSA)", "paragraphs": ["A Department of Defense (DOD) Field Activity under the Under Secretary of Defense for Policy, DTSA coordinates the technical and national security review of direct commercial sales export licenses and commodity jurisdiction requests received from the Departments of Commerce and State. It develops the recommendation of DOD on these referred export licenses or commodity jurisdictions based on input provided by the various DOD departments and agencies and represents DOD in the interagency dispute resolution process. Not all licenses from DDTC or BIS are referred to DTSA; memorandums of understanding govern the types of licenses referred from each agency. DTSA coordinates the DOD position with regard to proposed changes to the ITAR and the EAR. It also represents DOD in the interagency process responsible for compliance with multinational export control regimes. "], "subsections": []}, {"section_title": "Enforcement of U.S. Export Controls", "paragraphs": ["Enforcement of the U.S. export control system is undertaken by the agencies responsible for export licensing, the Department of Homeland Security (DHS), the Department of Justice (DOJ) (National Security Division and the Federal Bureau of Investigation [FBI]), and the Defense Criminal Investigative Service (DCIS). Their activities can be summarized as follows:", "Offi ce of Export Enforcement (OEE) of the Bureau of Industry and Security (BIS) , Department of Commerce . OEE investigates criminal and administrative violations of the dual-use export control regime. OEE is authorized to conduct domestic investigations and works with ICE on investigations of export control violations overseas. OEE refers civil violations to the Office of Chief Counsel of BIS and criminal violations to DOJ. Office of Defense Trade Compliance (ODTC) in DDTC , Department of State . ODTC primarily administers civil enforcement actions, including charging letters and consent agreements, policies of denial, debarments, transaction exceptions, and reinstatements. ODTC provides agency support to investigations and criminal enforcement actions primarily conducted by ICE and the FBI. Office of Enforcement, Nuclear Regulatory Commission (NRC) . Investigates export control violations of nuclear facilities and material licensed by the NRC's Office of International Programs. The Office of Enforcement refers criminal violations to DOJ. ICE , Department of Homeland Security . As with its predecessor at the U.S. Customs Service, ICE has been the lead agency for criminal export enforcement activities. The Counter-Proliferation Investigations Unit investigates violations of dual-use and munitions export controls, exports to sanctioned countries, and violations of economic embargoes. ICE supplements and provides enforcement capacity to the export licensing agencies (BIS and DDTC) and undertakes investigations based on its own and other agency intelligence. In addition, export controls are enforced at the port of departure by DHS Customs and Border Protection. National Security Division of DOJ . The counterespionage section of this division undertakes criminal prosecutions resulting from investigations conducted by the licensing agencies, ICE, and the FBI. An October 2007 DOJ National Export Enforcement Initiative established task forces between the licensing and enforcement agencies and U.S. Attorney's Offices in 20 cities to coordinate export control prosecutions and has facilitated new counterproliferation coordination among law enforcement agencies, export licensing agencies, and the intelligence community. FBI . The FBI's Weapons of Mass Destruction Directorate receives and analyzes intelligence regarding proliferation networks, provides specialized training on counterproliferation for the National Export Enforcement Initiative, and cooperates with above-mentioned investigative partners and export licensing agencies. DCIS , Department of Defense . DCIS is the criminal investigative arm of the Inspector General of DOD. Among its varied activities, DCIS investigates the transfer of sensitive defense technologies to proscribed nations and criminal elements."], "subsections": []}, {"section_title": "Multilateral Control Regimes", "paragraphs": ["In addition to U.S. controls, internationally there are four major multilateral control regimes: the Australia Group, the Missile Technology Control Regime (MTCR), the Nuclear Suppliers Group (NSG), and the Wassenaar Arrangement. The Commerce Department observed on December 9, 2010, that \"[m]ost items on the CCL are controlled in accordance with the United States' commitments\" to four major multilateral export control regimes. In addition to the controls described in the box below, all of these regimes have catch-all controls, which allow for the control of nonlisted items if they are to be used for a military or proliferation-related purpose.", "The Arms Export Control Act requires the Secretary of State to maintain, as part of the USML, \"a list of all items on the MTCR Annex\" that are not controlled as a dual-use item. The AECA requires the executive branch to control nuclear-related items, but the law does not explicitly require that these items be the same as those controlled by the NSG."], "subsections": []}]}, {"section_title": "President Obama's Export Control Initiative", "paragraphs": ["On August 13, 2009, President Obama announced the launch of a comprehensive review of the U.S. export control system. Then-Defense Secretary Robert M. Gates announced key elements of the Administration's agenda for reform in a speech on April 20, 2010, with additional elaborations in subsequent months. Former Secretary Gates proposed a four-pronged approach that would create a single primary export control licensing agency for both dual-use and munitions exports; adopt a unified control list; establish a single enforcement coordination agency; and create a single integrated information technology system, which would include a single database of sanctioned and denied parties.", "The Administration's blueprint envisioned that these changes would be implemented in three phases, with the final phase requiring legislative action. Phase I would undertake preparatory work to harmonize the Commerce Control List (CCL) with the U.S. Munitions List (USML). This phase would also develop standardized licensing processes among the control agencies; it would also create an \"Enforcement Fusion Center\" to synchronize enforcement, along with a single electronic gateway to access the licensing system. Phase II would implement a harmonized licensing system with two identically-structured tiered control lists, potentially allowing for a reduction in the amount of licenses required by the system. This phase would include moving certain items from the USML to the CCL, for which congressional notification would be required; examining unilateral controls on certain items; and undertaking consultations with multilateral control regime partners to add or remove multilateral controls on certain items. ", "Under the proposal, the new export control system would debut in Phase III, which would establish a single licensing agency; merge the two harmonized, tiered control lists, with mechanisms for review and updating; merge the two primary export control enforcement agencies, OEE and ICE; and operationalize a single IT system for licensing and enforcement. Changes in agency structure would require legislation.", "In a February 2011 speech, then-BIS Assistant Secretary Kevin Wolf elucidated seven principles driving the Administration's export control reform efforts", "Controls should focus on a small core set of key items that can pose a serious national security or intelligence threat to the United States and its interests; Controls should be fully coordinated with the multilateral export control regimes in order to be effective; Unilateral controls must address an existing legal or foreign policy objective; Control lists must clearly identify which items are controlled and be easily updated as technology emerges, matures, or becomes widely available; Licensing processes must be predictable and timely; Enforcement capabilities must be enhanced to address noncompliance and increase capacity to interdict unapproved transfers; and Controls must address counterterrorism policy and the need to export items that support homeland security priorities."], "subsections": [{"section_title": "The Four Singularities", "paragraphs": [], "subsections": [{"section_title": "A Single Licensing Agency", "paragraphs": ["In his speech introducing the Administration's reform efforts, then-Secretary Gates described the bureaucratic structure of the U.S. export control system as a \"byzantine amalgam of authorities, roles, and missions scattered around different parts of the federal government.\" As noted above, licensing is divided among the Department of Commerce for dual-use and certain military items, the Department of State for munitions, the Department of the Treasury for certain sanctions, and the Nuclear Regulatory Commission and Department of Energy for certain nuclear materials and technologies. These entities operate under different statutory authorities and enforce different regulations. While there are mechanisms in place for license referrals and to address licensing disagreements, critics have long maintained that the multi-agency structure contributes to institutional disputes among the different agencies responsible for export control licensing. Having one licensing system would also end disputes about commodity jurisdiction over a given item.", "On June 30, 2010, then-National Security Adviser General Jim Jones announced that the Obama Administration intended to create an independent licensing agency with Cabinet members from existing control agencies serving as a board of directors. While that Administration did not provide specific details, this new agency is expected to take over the licensing functions of BIS, DDTC, and OFAC; this agency would likely house the civil and administrative enforcement functions of BIS and DDTC. The Obama Administration did not propose moving licensing procedures of the NRC for nuclear materials and of the Department of Energy for nuclear-related technology; an Obama Administration official attributed this decision to the relatively small volume of licensing undertaken by these agencies as well as by the small universe of exporters.", "General Jones argued that a unified licensing structure would end the situation in which no agency knew the total of export licenses granted or denied by the U.S. government. Under current referral processes, dual-use and certain military items licenses are referred by BIS to the Department of Defense, the Department of State (Economic Energy and Business Bureau [EEB], International Security and Non-Proliferation Bureau, and the regional bureaus), and the Department of Energy for review. However, BIS licenses are not referred to DDTC. DDTC refers munitions licenses to DOD and to the above-mentioned bureaus at State, and in some instances to Energy, but not to BIS. Some OFAC licenses are referred only to State's EEB. As a result, situations have arisen whereby licenses requested by the same exporter to the same destination have been approved by one license agency and denied by another.", "Brian Nilsson, then-Deputy Assistant Secretary of State for Defense Trade Controls, indicated during a February 2016 hearing that that the single information technology system in use by the Departments of Commerce, Energy, and State (see below) has begun to address the lack of agencies' visibility regarding license information. Yet, interagency policy differences may continue to exist because agencies would continue to refer licenses to ensure continued checks and balances."], "subsections": [{"section_title": "Dual-Nationals", "paragraphs": ["An issue concerning dual-nationals may provide an example of the effort that will be necessary to create a unified export control system. The White House announced on March 11, 2010, that it would take action to eliminate \"obstacles to exporting to companies employing dual nationals.\" Specifically, the Obama Administration announced that it would \"begin to harmonize\" conflicting standards used by the Departments of Commerce and State to determine a foreign person's nationality\u2014a step that these departments must take in order to make certain export control decisions. ", "The Commerce Department, according to a 2010 Government Accountability Office (GAO) report, determines \"nationality for release of technology to a foreign national\" based on that person's \"most recent citizenship or permanent residence.\" The State Department, however, considered not only a foreign national's current citizenship status, but also their country of birth if it differs from the person's country of citizenship or permanent residency. Even if a foreign entity is approved for a manufacturing license agreement or a technical assistance agreement with a U.S. firm, the State Department must approve the transfer of technical data, defense services, and defense articles to dual nationals and third-party nationals employed by the foreign entity. \"If a person's country of birth is prohibited from receiving U.S. arms, as are China, Iran, and North Korea, State [collected] additional information to confirm that the individual has no significant ties to his or her country of birth,\" according to the GAO. However, the State Department stopped using \"country of birth\" as of 2015, although the department does \"consider all current and former citizenships, in addition to current permanent residency.\"", "Both the State Department and private-sector experts argue that these requirements are contentious because, in addition to being administratively burdensome, they are a potential employment discrimination issue in other countries; in order to comply with the regulations, non-U.S. employers may need to limit employment opportunities in potential violation of their countries' employment laws.", "After publishing a proposed rule on August 11, 2010, the State Department published a final rule on May 16, 2011, amending the ITAR to allow the transfer of defense articles and technical data to dual or third-party nationals who are \"bona fide, regular employees, directly employed by the foreign consignee or end-user.\" Such transfers ", "must take place completely within the physical territory of the country where the end-user is located, where the governmental entity or international organization conducts official business, or where the consignee operates, and be within the scope of an approved export license, other export authorization, or license exemption. ", "The end user or consignee must take a variety of measures designed to prevent the diversion of any exports; the final rule includes a requirement for the end user to screen employees for \"substantive contacts with restricted or prohibited countries\" listed in the ITAR. The rule, which became effective on August 15, 2011, also explains that, although \"nationality does not, in and of itself, prohibit access to defense articles or defense services, an employee that has substantive contacts\" with persons from prohibited countries \"shall be presumed to raise a risk of diversion,\" unless the State Department determines otherwise. It is worth noting that, according to the State Department, \"most diversions of U.S. Munitions List ... items appear to occur outside the scope of approved licenses, not within foreign companies or organizations providing access to properly screened dual national or third country national employees.\""], "subsections": []}]}, {"section_title": "The Single Control List", "paragraphs": ["The Obama Administration concentrated on rationalizing the control lists to form the basis from which other reforms will flow. The Administration first worked to transform the current USML from a \"negative list\" characterized by general descriptions of articles and design-intent-based criteria to one resembling the current CCL, a \"positive\" list of dual-use items that are controlled according to objective criteria or parameters. This is being done through the \"bright line\" process to determine which items should be controlled as dual-use goods and which should be controlled as munitions. The bright line is being determined at the commodity level, based on technical specification and military needs, and is not an overarching concept or framework. The Obama Administration argued that the bright line is necessary, in part, because of the USML's current reliance on design intent (i.e., whether an item was \"specifically designed, modified, or adapted\" for military use) and its catch-all controls of parts and components of these items. While the CCL is described as more \"positive,\" it too contains entries containing the term \"specially designed\" for a specific purpose that may need to be modified to conform to bright line standards.", "Each category of the USML has been screened by an interagency team led by DOD; proposed rewrites to each USML category, including certain items proposed to be moved to the CCL, have been published as proposed rulemakings. Originally, each of the items on the resulting USML list was to have been assigned to a tier to determine its level of control. The Obama Administration created three tiers applicable to both the CCL and the USML to categorize a different level of control. However, the Administration postponed this process, reportedly because it would have been necessary to decide on the tiers for all USML items prior to publishing any revised USML categories. Deputy Assistant Secretary Nilsson testified that the Obama Administration prioritized revising the categories which have the greatest effect on U.S. military interoperability with allied governments.", "To date, the executive branch has completed transferring items in the following categories from the USML to the CCL: ", "Category IV (launch vehicles, missiles, rockets, torpedoes, bombs, mines, and other military explosive devices; Category V (explosives and energetic materials, propellants, incendiary agents and their constituents); Category VI (vessels of war and naval equipment); Category VII (tanks and military vehicles); Category VIII (aircraft and associated equipment); Category IX (military training equipment); Category X (protective personal equipment and shelters); Category XI (military electronics); Category XII (fire control, range finder, optical and guidance and control equipment); Category XIII (auxiliary military equipment); Category XIV (toxicological agents, including chemical agents, biological agents, and associated equipment); Category XV(spacecraft and related articles); Category XVI (nuclear weapons related articles); Category XVIII (directed energy weapons); and Category XX (submersible vessels and oceanic equipment).", "The State Department also created a new USML Category XIX (gas turbine engines). Then-Deputy Assistant Secretary Nilsson stated in September 2017 that items would not be moved from USML Categories I-III (firearms, close assault weapons and combat shotguns, guns and armament, ammunition/ordnance) to the CCL until 2018. The executive branch posted proposed rules concerning movement of items from these categories on May 14, 2018. On February 8, 2019, Representative Norma Torres introduced H.R. 1134 , the Prevent Crime and Terrorism Act of 2019, which would prohibit the President from removing \"any item\" from \"category I, II, or III\" of the USML. Similarly, on February 12, 2019, Senator Robert Menendez introduced S. 459 , the Stopping the Traffic in Overseas Proliferation of Ghost Guns Act, which states that \"the President may not remove any firearm, or technical information relating to such firearm\" from the USML.", "A final rule on a new \"0Y521\" classification series became effective on April 12, 2013. This series is used for items that are neither identified under an existing ECCN nor controlled under an existing U.S. or multilateral export control regime, but warrant control for foreign policy reasons or because they could provide a significant military or intelligence advantage. According to the EAR, such items \"are typically emerging technologies.\" BIS has subsequently added new items to this series. Items so classified \"must be re-classified under another ECCN within one calendar year from the date they are listed\" in the relevant part of the EAR. If they are not reclassified, the items \"are designated as EAR99 items unless either the CCL is amended to impose a control on such items under another ECCN or the ECCN 0Y521 classification is extended.\" BIS may extend this classification \"for two one-year periods, provided that the U.S. Government has submitted a proposal to the relevant multilateral regime(s) to obtain multilateral controls over the item.\" BIS may further extend the classification \"only if the Under Secretary for Industry and Security makes a determination that such extension is in the national security or foreign policy interests of the United States.\"", "According to the Obama Administration, the USML would contain \"only those items that provide at least a significant military or intelligence applicability that warrant the controls the AECA requires.\" The reconstituted Munitions List may then be aligned with the CCL by adopting its A-E commodity organization structure and adding two additional categories: F and G for ITAR specific controls. As a result of this alignment, each USML category will be divided into seven groups: A\u2014equipment, assemblies, and components; B\u2014test, inspection, and production equipment; C\u2014materials; D\u2014software; E\u2014technology; F\u2014defense services; and G\u2014manufacturing and production authorizations."], "subsections": [{"section_title": "\"600 Series\"", "paragraphs": ["As a result of the bright line process, the Obama Administration moved some USML items to the CCL. Under Section 38(f) of the AECA, the President may not remove any article from the USML until 30 days after providing notice to the House Foreign Affairs Committee, and the Senate Foreign Relations Committee, including a description of the nature of any subsequent controls on the item. Section 38(f)(6) of the AECA requires that \"any major defense equipment\" on the 600 series \"shall continue to be subject to\" several \"notification and reporting requirements\" of the AECA and the Foreign Assistance Act of 1961 (P.L. 87-195).", "In order to comply with Section 38(f), the manner in which USML items transferred to the CCL are to be controlled is described in a proposed rulemaking on July 15, 2011, and is part of the \"mega rule\" issued on April 16, 2013. It involves the creation of a \"600 Series\" subcategory of Export Control Classification Numbers (ECCNs) for each category on the CCL. This new series is populated by items that are judged not to need the relatively-stricter controls mandated under the USML. Items moved to the CCL in this manner require a license to all destinations except Canada. All items controlled pursuant to multilateral control regimes retain their existing controls. In addition, \"600 Series\" items will be subject to a general policy of denial to countries subject to a U.S. or U.N. arms embargo. Such items are also subject to the prohibition on Defense Department procurement of \"goods and services\" on the USML \"from any Communist Chinese military company\" mandated by the National Defense Authorization Act for Fiscal Year 2006 ( P.L. 109-163 ).", "The rule also places restrictions on the extent to which certain license exceptions can be applied. End-use items transferred to the 600 Series would be eligible for the recently announced Strategic Trade Authorization (STA) license exception (described below) only after a determination is jointly made by the State, Defense, and Commerce Departments that such an exception should be made available for the item in question. Most parts, components, and accessories transferred under this process would be automatically eligible for an STA license exception for exports to the governments of STA-eligible countries. Items expressly defined as \"less significant\" would be eligible for a license exception for destinations other than those controlled for antiterrorism reasons. \"600 Series\" items would also be eligible for other preexisting license exceptions.", "The U.S. control status of parts and components also is addressed by the 600 Series. Under the EAR, the license requirement is based on the finished product, generally without regard to its parts and components. However, a foreign product containing more than 25% controlled U.S. content (10% controlled U.S. content in the case of a transaction to a country identified as a state sponsor of terrorism) may require a reexport license from the United States. However, for ITAR-controlled items, DDTC has employed a jurisdictional interpretation known as a \"see-through\" rule, which subjects to ITAR control U.S.-origin parts and components incorporated into end products manufactured overseas. For items migrating to the 600 Series, a 25% rule applies, but no de minimus amount would apply to embargoed destinations."], "subsections": []}, {"section_title": "\"Specially Designed\"", "paragraphs": ["To facilitate the transfer of items from the USML to the CCL, the Obama Administration proposed a new definition of \"specially designed.\" As noted above, the Administration sought to move away from the design-intent standard of the USML and the use of the catch-all phrase \"specifically designed\" for military use to subject parts and components to ITAR jurisdiction. The Obama Administration argued that new definition was necessary because \"specifically designed\" in the USML did not have the same meaning as the term \"specially designed\" which appears in the CCL and also in various multilateral control lists. The Administration also argued that removing the term(s) entirely by enumerating each part and component being moved from the USML to the CCL was infeasible. ", "The Obama Administration published its final rule on the definition of \"specially designed\" on April 16, 2013. Some have dubbed the two-part definition as a \"catch and release\" approach because the first part may capture an item as specially designed for military use and the second part may release the item from control under the definition if it does not qualify under certain parameters. Under the first part of the regulation, an item qualifies as specially designed if", "(1) As a result of \"development\" has properties peculiarly responsible for achieving or exceeding the performance levels, characteristics, or functions in the relevant ECCN or U.S. Munitions List (USML) paragraph; or ", "(2) Is a \"part,\" \"component,\" \"accessory,\" \"attachment,\" or \"software\" for use in or with a commodity or defense article 'enumerated' or otherwise described on the CCL or the USML. ", "Under the regulation, if neither of these criteria apply to an item, then the item is not specially designed. If one or more of these criteria describes an item, the item is potentially qualified as specially designed and is subject to the following six exclusions. The item is excluded from being specially designed if it", "(1) Has been identified to be in an ECCN paragraph that does not contain \"specially designed\" as a control parameter or as an EAR99 item in a commodity jurisdiction (CJ) determination or interagency-cleared commodity classification (CCATS);", "(2) Is, regardless of 'form' or 'fit,' a fastener ( e.g. , screw, bolt, nut, nut plate, stud, insert, clip, rivet, pin), washer, spacer, insulator, grommet, bushing, spring, wire, solder;", "(3) Has the same function, performance capabilities, and the same or 'equivalent' form and fit, as a commodity or software used in or with an item that: ", "(i) Is or was in \"production\" ( i.e. , not in \"development\"); and ", "(ii) Is either not 'enumerated' on the CCL or USML, or is described in an ECCN controlled only for Anti-Terrorism (AT) reasons;", "(4) Was or is being developed with \"knowledge\" that it would be for use in or with commodities or software (i) described in an ECCN and (ii) also commodities or software either not 'enumerated' on the CCL or the USML (e.g., EAR99 commodities or software) or commodities or software described in an ECCN controlled only for Anti-Terrorism (AT) reasons;", "(5) Was or is being developed as a general purpose commodity or software, i.e., with no \"knowledge\" for use in or with a particular commodity (e.g., an F/A-18 or HMMWV) or type of commodity (e.g., an aircraft or machine tool); or ", "(6) Was or is being developed with \"knowledge\" that it would be for use in or with commodities or software described (i) in an ECCN controlled for AT-only reasons and also EAR99 commodities or software; or (ii) exclusively for use in or with EAR99 commodities or software.\"", "Under this decision approach, the item is potentially \"caught\" as specially designed by the first two criteria, but it may be \"released\" from that definition if any of the six subsequent qualifiers apply. The Commerce regulations apply to the \"600 series\" of items moved from the USML. The proposed regulation to define specially designed in the ITAR as a replacement for the currently utilized \"specifically designed\" is similar in nature. ", "In a speech on July 17, 2012, then-BIS Assistant Secretary Kevin Wolf acknowledged that the specially designed concept is \"inherently difficult to apply in reality,\" and that it is \"not consistent with the \"ultimate goal of creating a truly positive, objective list of controlled items.\" However, he noted that, concurrent with this approach, BIS also published an advanced notice of proposed rulemaking in June 2012 seeking comments on the feasibility of enumerating or positively identifying each item determined classified as specially designed on the CCL."], "subsections": []}, {"section_title": "Strategic Trade Authorization License Exception", "paragraphs": ["In 2011, the Obama Administration devised a new license exception known as the Strategic Trade Authorization (STA), which was designed to facilitate transfers to low-risk countries and to promote interoperability to allies in the field. To be eligible, exporters must provide notification to BIS of the transaction and a destination control statement notifying the foreign consignee of the exception's safeguard requirements; exporters must also obtain from the foreign consignee a statement acknowledging the consignee's understanding and willingness to comply with the requirements of the license exception. STA-eligible recipients of U.S. munitions items contained on the CCL are not allowed to reexport such items without a license. Such recipients are also prohibited from reexporting \"STA-eligible items to any destination outside the STA-eligible countries.\" ", "Under the final rulemaking, STA is available to 2 groups consisting of 44 countries. To a group of 36 countries made up of NATO partners and members of all 4 multilateral nonproliferation control regimes, dual-use items controlled for national security (NS), chemical or biological weapons, nuclear nonproliferation, regional stability, crime control, or significant items (hot section jet technology) are eligible for an STA. This includes almost all items on the CCL that are not controlled for statutory reasons. An additional eight countries are eligible for exports, reexports, or transfers controlled for NS-only and that are not designated as STA-excluded. The United States-Israel Strategic Partnership Act of 2014 ( P.L. 113-296 ) requires the President, \"consistent with the commitments of the United States under international arrangements,\" to \"take steps\" to move Israel from the second list of countries to the first list of countries. However, Israel's STA status does not appear to have changed. An August 3, 2018, Commerce Department rule moved India from the second list of countries to the first list of countries.", "Dual-use items controlled for missile technology, chemical weapons, short supply, or surreptitious listening are not be eligible for export under an STA. Certain implements of execution and torture, pathogens and toxins, software and technology for \"hot-sections\" of aero gas-turbine engines, and encryption have also been excluded from the STA. "], "subsections": []}]}, {"section_title": "The Single Enforcement Structure", "paragraphs": ["The third singularity involves the creation of a streamlined export enforcement system. Under Phase I of the new approach, a single export \"fusion center\" would be created to \"coordinate and de-conflict investigations, serve as a central point of contact for coordinating export control enforcement with Intelligence Community activities, and synchronize overlapping outreach programs.\" On November 9, 2010, the Obama Administration issued Executive Order 13558, which created the Export Enforcement Coordination Center (EECC). The center officially opened in March 2012 within the Department of Homeland Security and replaced and expanded on the functions of the existing National Export Enforcement Coordination Network in ICE. It consists of a director from the Department of Homeland Security and two deputies appointed from the Departments of Commerce and Justice, with an intelligence community liaison designated by the Director of National Intelligence.", "The center functions as the primary forum to coordinate export control enforcement efforts among the Departments of State, the Treasury, Commerce, Defense, Justice, Energy, and Homeland Security and the Director of National Intelligence and to resolve potential conflicts in criminal and administrative export control enforcement. The center is also able to screen all license applications. Previously, the OEE at BIS was the only entity that could screen dual-use licenses, whereas ICE could screen licenses from DDTC and OFAC. The unit will also establish government-wide statistical tracking capabilities for criminal and administrative enforcement activities. Also in March 2012, an Information Triage Unit was established in the Department of Commerce to serve as an information gathering and screening unit among law enforcement agencies, the intelligence community, and the export licensing agencies. The unit is designed to serve as a central point to disseminate relevant information for each license application prior to decisionmaking.", "There may be weaknesses in the EECC's mission execution. \"[P]rocedures for coordination between the investigative export control enforcement agencies and the intelligence community have not been finalized,\" according to a March 2019 GAO report, which adds that the center's \"lack of formal coordination\" limits its effectiveness and has stalled \"its efforts to develop standard operating procedures.\" Absent such coordination, the center \"is limited in its ability to realize its full potential to facilitate enhanced coordination and intelligence sharing.\"", "The EECC is not to be confused with the National Export Control Coordinator, housed in the Justice Department, which is \"responsible for ensuring full coordination between the Justice Department and the many other US law enforcement, licensing, and intelligence agencies that play a role in export enforcement.\" The role of the coordinator has been described as the chief prosecutor of export control enforcement with the authority to determine which cases to bring for criminal prosecution. ", "The Donald Trump Administration may request the movement of the BIS Office of Export Enforcement to ICE. Currently, ICE conducts investigations and criminal enforcement for DDTC and OFAC, and by virtue of its authority under the IEEPA, it shares dual-use investigations with OEE. Removal of OEE to ICE will end this overlap of authority. The Obama Administration envisioned that a consolidated licensing agency would continue to have authority over administrative enforcement actions."], "subsections": []}, {"section_title": "A Single Information Technology System", "paragraphs": ["The fourth singularity is the creation of a single information technology system for administering the export control system. The Departments of Commerce, State, and Defense have begun using the USXPORTS database, originally used by the Department of Defense to track referred license applications. The reform effort envisions that USEXPORTS will become the platform for a proposed single export license application form to be used by State, Commerce, and the Treasury's Office of Foreign Assets Control. The Department of Energy, Immigration and Customs Enforcement, and the Export Coordination Enforcement Center are also to use the database. ", "The Obama Administration's plan called for the adoption of USXPORTS first for internal communications such as license referrals, while exporters would continue to use the existing SNAP-R and D-Trade electronic license filing portals. The Obama Administration indicated that eventually it wanted to facilitate interoperability between the license portals, the internal system, and Customs' Automated Export System (AES), the information system that tracks actual movement of goods.", "In conjunction with the single IT system, the Obama Administration developed a single license application form. To make this possible, the Administration standardized certain definitions between the different regulations, such as the use of the term \"technology\" in the EAR as opposed to the term \"technical data\" used in the ITAR. To assist in compliance with U.S. export regulations, the Obama Administration also compiled a consolidated screening list of over 24,000 entities from existing Commerce, Treasury, and State Department screening lists. The list consolidates the BIS Denied Person List, Unverified List, and Entity List; the Department of State's Nonproliferation Sanctions List; the Directorate of Defense Trade Controls Debarred List; and the Office of Foreign Assets Control Specially Designated Nationals List."], "subsections": []}, {"section_title": "Encryption", "paragraphs": ["While not announced as part of the four singularities, the Obama Administration proposed reforming encryption controls as one of the first deliverables in the export control reform process. The Administration announced on March 11, 2010, that it would change a filing requirement for exporters of products with encryption capabilities. At the time, exporters of such products were required to file for a technical review by the Commerce Department, a process that, according to the White House announcement, could take \"between 30-60 days.\" The announcement advocated replacing this process with \"a more efficient one-time notification-and-ship process,\" which would ensure that the \"U.S. government still receives information it needs for its national security requirements while facilitating U.S. exports and innovation for new products and new technologies.\"", "The Commerce Department announced on June 25, 2010, that it was amending the Export Administration Regulations (EAR) as \"the first step in the President's effort to reform U.S. encryption export controls.\" As described by the Commerce Department's Bureau of Industry and Security, the amendment to the EAR includes", "replacing, for encryption products \"of lesser national security concern,\" the \"30-day waiting requirement for a technical review\" with a \"provision that allows immediate authorization to export and reexport these products\" after the exporter submits an electronic encryption registration to BIS; similarly replacing the 30-day requirement for most mass-market encryption products; an \"overarching note to exclude particular products that use cryptography from being controlled as 'information security' items\"\u2014a measure that implements changes approved by the Wassenaar Arrangement members in December 2009; this regulatory change eliminates controls under the CCL on \"[m]any items in which the use of encryption is ancillary to the primary function of the item\"; and a provision that makes most encryption technology eligible for export and reexport to nongovernmental end-users in countries other than those of \"greater national security concern.\"", "According to the June 2010 announcement of the EAR amendment, the United States \"will also review other issues related to encryption controls.\" Decontrolling additional items would require approval by the members of the Wassenaar Arrangement. ", "Appendix A. Basic Export Control Characteristics", "Appendix B. Dual-Use Export Licensing Process", "Appendix C. List of Acronyms", "AECA\u2014Arms Export Control Act", "AES\u2014Automated Export System", "BIS\u2014Bureau of Industry and Security, Department of Commerce", "CBP\u2014Customs and Border Protection, Department of Homeland Security", "CCL\u2014Commerce Control List", "CML\u2014Commerce Munitions List", "CPI\u2014Counter-Proliferation Investigations", "DCIS\u2014Defense Criminal Investigation Service", "DDTC\u2014Directorate of Defense Trade Controls, Department of State", "DHS\u2014Department of Homeland Security", "DOJ\u2014Department of Justice", "DTSA\u2014Defense Technology Security Administration", "EAA\u2014Export Administration Act", "EAR\u2014Export Administration Regulations", "ECCN\u2014Export Control Classification Number", "EECC\u2014Export Enforcement Coordination Center", "EEB\u2014Economic, Energy, and Business Bureau, Department of State", "FP\u2014Foreign Policy Controls", "GAO\u2014Governmental Accountability Office", "IEEPA\u2014International Emergency Economic Powers Act", "ICE\u2014Immigration and Customs Enforcement Agency, Department of Homeland Security", "ISN\u2014International Security and Nonproliferation Bureau, Department of State", "ITA\u2014International Trade Administration, Department of Commerce", "ITAR\u2014International Traffic in Arms Regulations", "MTCR\u2014Missile Technology Control Regime", "NRC\u2014Nuclear Regulatory Commission", "NS\u2014National Security Controls", "NSG\u2014Nuclear Suppliers Group", "OEE\u2014Office of Export Enforcement", "ODTC\u2014Office of Defense Trade Compliance, DDTC", "OFAC\u2014Office of Foreign Assets Control, Department of the Treasury", "SI\u2014Significant Items Controls", "SL\u2014Surreptitious Listening Controls", "SS\u2014Short Supply Controls", "STA\u2014Strategic Trade Authorization", "USML\u2014U.S. Munitions List "], "subsections": []}]}]}]}}
{"id": "R43792", "title": "State Minimum Wages: An Overview", "released_date": "2019-01-25T00:00:00", "summary": ["The Fair Labor Standards Act (FLSA), enacted in 1938, is the federal legislation that establishes the general minimum wage that must be paid to all covered workers. While the FLSA mandates broad minimum wage coverage, states have the option of establishing minimum wage rates that are different from those set in it. Under the provisions of the FLSA, an individual is generally covered by the higher of the state or federal minimum wage.", "As of 2019, minimum wage rates are above the federal rate of $7.25 per hour in 29 states and the District of Columbia, ranging from $0.25 to $6.75 above the federal rate. Another 14 states have minimum wage rates equal to the federal rate. The remaining 7 states have minimum wage rates below the federal rate or do not have a state minimum wage requirement. In the states with no minimum wage requirements or wages lower than the federal minimum wage, only individuals who are not covered by the FLSA are subject to those lower rates.", "In any given year, the exact number of states with a minimum wage rate above the federal rate may vary, depending on the interaction between the federal rate and the mechanisms in place to adjust the state minimum wage. Adjusting minimum wage rates is typically done in one of two ways: (1) legislatively scheduled rate increases that may include one or several increments; (2) a measure of inflation to index the value of the minimum wage to the general change in prices.", "Of the 29 states and the District of Columbia with minimum wage rates above the federal rate, 9 currently have no scheduled increases beyond 2019, 3 states have legislatively scheduled rate increases after 2019, and 17 states and the District of Columbia have scheduled increases through a combination of planned increases and current- or future-year indexation of state minimum wage rates to a measure of inflation.", "Because the federal and state minimum wage rates change at various times and in various increments, the share of the labor force for which the federal rate is the binding wage floor has changed over time. Since 1981, there have been three series of increases in the federal minimum wage rate\u20141990-1991, 1996-1997, and 2007-2009. During that same period, there have been numerous changes in state minimum wage policies. As a result of those interactions, the share of the U.S. civilian labor force living in states in which the federal minimum wage is the floor has fluctuated but generally declined, and is about 39% as of 2018."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Fair Labor Standards Act (FLSA), enacted in 1938, is the federal legislation that establishes the general minimum wage that must be paid to all covered workers. The FLSA mandates broad minimum wage coverage. It also specifies certain categories of workers who are not covered by general FLSA wage standards, such as workers with disabilities or certain youth workers.", "In 1938, the FLSA established a minimum wage of $0.25 per hour. The minimum wage provisions of the FLSA have been amended numerous times since then, typically to expand coverage or raise the wage rate. Since its establishment, the minimum wage rate has been raised 22 separate times. The most recent change was enacted through P.L. 110-28 in 2007, which increased the minimum wage from $5.15 per hour to its current rate of $7.25 per hour in three steps (the final step occurring in 2009).", "States generally have three options in setting their minimum wage policies: (1) they can set their own minimum wage provisions that differ from those in the FLSA, (2) they can explicitly tie their minimum wage provisions to the FLSA, or (3) they can include no specific minimum wage provisions in state law.", "This report begins with a brief discussion of FLSA minimum wage coverage. It then provides a summary of state minimum wage laws, followed by an examination of rates and mechanisms of adjustments in states with minimum wage levels above the FLSA rate ( Table 1 provides summary data). Next, the report discusses the interaction of federal and state minimum wages over time, and finally, the Appendix provides detailed information on the major components of minimum wage policies in all 50 states and the District of Columbia.", "The state policies covered in this report include currently effective policies and policies enacted with an effective date at some point in 2019. While most states' scheduled state minimum wage rate changes (due to inflation adjustments or statutorily scheduled changes) occurred on January 1 of each year, a few states have rate increases scheduled for later in the year. Effective dates of rate increases are noted in Table 1 and in the Appendix ."], "subsections": []}, {"section_title": "The FLSA Minimum Wage", "paragraphs": ["The FLSA extends two types of minimum wage coverage to individuals: \"enterprise coverage\" and \"individual coverage.\" An individual is covered if they meet the criteria for either category."], "subsections": [{"section_title": "Enterprise Coverage", "paragraphs": ["To be covered by the FLSA at the enterprise or business level, an enterprise must have at least two employees and annual sales or \"business done\" of at least $500,000. Annual sales or business done includes all business activities that can be measured in dollars. Thus, for example, retailers are covered by the FLSA if their annual sales are at least $500,000. In non-sales cases, a measure other than sales must be used to determine business done. For example, for enterprises engaged in leasing property, gross amounts paid by tenants for property rental will be considered business done for purposes of determining enterprise coverage.", "In addition, regardless of the dollar volume of business, the FLSA applies to hospitals or other institutions primarily providing medical or nursing care for residents; schools (preschool through institutions of higher education); and federal, state, and local governments.", "Thus, regardless of how enterprise coverage is determined (by business done or by specified institutional type), all employees of a covered enterprise are considered to be covered by the FLSA."], "subsections": []}, {"section_title": "Individual Coverage", "paragraphs": ["Although an enterprise may not be subject to minimum wage requirements if it has less than $500,000 in annual sales or business done, employees of the enterprise may be covered if they are individually engaged in interstate commerce or in the production of goods for interstate commerce. To be engaged in interstate commerce\u2014the definition of which is fairly broad\u2014employees must produce goods (or have indirect input to the production of those goods) that will be shipped out of the state of production, travel to other states for work, make phone calls or send emails to persons in other states, handle records that are involved in interstate transactions, or provide services to buildings (e.g., janitorial work) in which goods are produced for shipment outside of the state.", "While individual coverage is broad under the FLSA, there are also specific exemptions from the federal rate, including individuals with disabilities; youth workers; tipped workers; and executive, administrative, and professional workers, among others."], "subsections": []}, {"section_title": "FLSA Minimum Wage Rates", "paragraphs": ["In 1938, the FLSA established a minimum wage of $0.25 per hour. The minimum wage provisions of the FLSA have been amended numerous times since then, typically for the purpose of expanding coverage or raising the wage rate. Since its establishment, the minimum wage rate has been raised 22 separate times. The most recent change was enacted in 2007 ( P.L. 110-28 ), which increased the minimum wage from $5.15 per hour to its current rate of $7.25 per hour in three steps.", " Figure 1 shows the nominal and real (inflation-adjusted) value of the federal minimum wage from its enactment in 1938 through 2018. The real value of the minimum wage generally rose from 1938 to 1968, after which it has generally fallen in real terms, with some brief increases in value following periodic statutory rate changes. From an initial rate of $0.25 per hour in 1938 ($4.43 in inflation-adjusted terms), the minimum wage increased to $1.60 per hour in 1968 ($11.50 in inflation-adjusted terms, a peak value to date). The real value of the minimum wage has fallen by $1.20 since it was increased to $7.25 in 2009."], "subsections": []}]}, {"section_title": "Minimum Wage Policies in the States", "paragraphs": ["State policymakers may also choose to set labor standards that are different from federal statutes. The FLSA establishes that if a state enacts minimum wage, overtime, or child labor laws more protective of employees than those provided in the FLSA, then state law applies. In the case of minimum wages, this means FLSA-covered workers are entitled to the higher state minimum wage in those states with rates above the federal minimum. On the other hand, FLSA-covered workers would receive the FLSA minimum wage in states that have set minimum wages lower than the federal rate. Given the generally broad minimum wage coverage of the FLSA, it is likely that most workers in states with minimum wages below the federal rate are covered by the FLSA rate.", "In 2019, the range of state minimum wage rates is as follows:", "29 states and the District of Columbia have enacted minimum wage rates above the federal rate of $7.25 per hour; 2 states have minimum wage rates below the federal rate; 5 states have no state minimum wage requirement; and the remaining 14 states have minimum wage rates equal to the federal rate.", "In the states with no minimum wage requirements or wages lower than the federal minimum wage, only individuals who are not covered by the FLSA are subject to those lower rates.", "The Appendix provides detailed information on state minimum wage policy in all 50 states and the District of Columbia, including the legislation authorizing the state minimum wage and the relevant legislative language regarding the rate and mechanism of adjustment.", "The remainder of this report focuses on states with minimum wages above the federal rate."], "subsections": []}, {"section_title": "Rates and Mechanisms of Adjustment", "paragraphs": ["In states with minimum wage rates above the federal rate, variation occurs mainly across two dimensions: the rate and the mechanism of adjustment to the rate. This section (including data in Table 1 ) summarizes these two dimensions for the states with rates currently above the federal minimum. State rates range from $0.25 to $6.75 above the federal rate, with a majority of these states using some sort of inflation measure to index the state minimum wage."], "subsections": [{"section_title": "Rates", "paragraphs": ["In the 29 states and the District of Columbia with minimum wage rates above the federal rate in 2019, minimum hourly rates range from $7.50 per hour in New Mexico to $12.00 per hour in Massachusetts and Washington and $14.00 in the District of Columbia. Of the states with minimum wage rates above $7.25:", "3 states have minimum wages within $1 of the federal rate of $7.25 per hour; 10 states have rates between $1.00 and $2.00 per hour above the federal rate; and 16 states and the District of Columbia have rates greater than $2.00 per hour above the federal rate (i.e., $9.26 or higher).", " Figure 2 shows the geographic and rate dispersion of state minimum wages. In terms of coverage, a majority of the civilian labor force is in states with a minimum wage rate above the federal rate of $7.25. Specifically, the 29 states and the District of Columbia with minimum wage rates above $7.25 represent about 61% of the total civilian labor force, which means the federal rate is the wage floor in states representing 39% of the labor force."], "subsections": []}, {"section_title": "Mechanisms for Future Adjustments", "paragraphs": ["In any given year, the exact number of states with a minimum wage rate above the federal rate may vary, depending on what mechanism is in place to adjust the state minimum wage. Some states specifically set rates above the federal rate. Other states have rates above the federal minimum wage because the state minimum wage rate is indexed to a measure of inflation or is increased in legislatively scheduled increments, and thus the state rate changes even if the federal minimum wage stays unchanged.", "Below are the two main approaches to regulating the adjustment of state minimum wage rates in states with rates above the federal minimum: legislatively scheduled increases and indexing to inflation. In this section, states are counted by the primary method of adjustment. While most states use only one of these methods, some states combine a series of scheduled increases followed by indexing the state rate to a measure of inflation. In these cases, states are counted as \"indexing to inflation,\" as that is the long-term mechanism of adjustment in place."], "subsections": [{"section_title": "Legislatively Scheduled Increases", "paragraphs": ["If a state adopts a minimum wage higher than the federal rate, the state legislature may specify a single rate in the enacting legislation and then choose not to address future rates. In these cases, the only mechanism for future rate changes is future legislative action. Alternatively, a state may specify future rates in legislation through a given date. Rhode Island in 2017, for example, set a rate of $10.10 per hour beginning January 1, 2018, and $10.50 beginning January 1, 2019. After the final increase, the rate will remain at $10.50 per hour until further legislative action. This is the same approach taken in the most recent federal minimum wage increase ( P.L. 110-28 ), which increased the minimum wage from $5.15 an hour in 2007 to $7.25 per hour in 2009 in three phases. Of the 29 states and the District of Columbia with minimum wage rates above the federal rate, 9 currently have no scheduled increases beyond 2019, while Arkansas, Massachusetts, and Michigan have legislatively scheduled rate increases after 2019."], "subsections": []}, {"section_title": "Indexing to Inflation", "paragraphs": ["If a minimum wage rate is established as a fixed amount and not increased, its value will erode over time due to inflation. For this reason, several states have attempted to maintain the value of the minimum wage over time by indexing the rate to some measure of inflation. This mechanism provides for automatic changes in the minimum wage over time and does not require legislative action to make annual adjustments.", "Currently, nine states index state minimum wages to a measure of inflation. In addition, another eight states and the District of Columbia are scheduled in a future year to index state minimum wage rates to a measure of inflation. Thus, of the total of 17 states and the District of Columbia that currently or are scheduled to index minimum wage rates,", "seven states\u2014Arizona, Montana, Nevada, New York, Oregon, South Dakota, and Vermont\u2014index the state minimum wage to the national Consumer Price Index for All Urban Consumers (CPI-U); five states\u2014California, Missouri, New Jersey, Ohio, and Washington\u2014index the state minimum wage to the national Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W); two states\u2014Alaska and Colorado\u2014and the District of Columbia use a subnational version of the CPI-U to index the state minimum wage; two states\u2014Florida and Maine\u2014use a regional version of the CPI-W to index the minimum wage; and one state (Minnesota) uses the implicit price deflator for personal consumption expenditures (PCE) to index the minimum wage."], "subsections": []}, {"section_title": "Reference to the Federal Rate", "paragraphs": ["While scheduled increases and indexation are the two main ways that states adjust their minimum wage rates, a few states also add a reference to the federal minimum wage rate as a possible mechanism of adjustment. Thus any time the federal rate changes, the state rate may change. Currently, Alaska, Connecticut, the District of Columbia, and Massachusetts use this federal reference to supplement their primary mechanisms of adjusting state minimum wage rates.", "In Alaska, the state minimum wage rate is indexed to the CPI-U for Anchorage Metropolitan Statistical Area. However, Alaska state law requires that the state minimum wage must be at least $1.00 per hour higher than the federal rate. So it is possible that a federal wage increase could trigger an increase in the Alaska minimum wage, but the main mechanism is indexation to inflation. Although Connecticut does not currently include scheduled rate increases in the minimum wage, Connecticut state law requires that the state rate must exceed the federal minimum wage rate by 0.5% if the federal rate becomes greater than or equal to the state rate. The District of Columbia's minimum wage rate is the higher of the level required by the District of Columbia statute or the federal rate plus $1.00. Starting in 2021, the District of Columbia minimum wage will be indexed to inflation and the reference to the federal rate will no longer be in effect. While Massachusetts law includes scheduled rate increases in the minimum wage through 2023, the law also requires that the state rate must be at least $0.50 above federal minimum wage rate."], "subsections": []}]}]}, {"section_title": "Trends in State Minimum Wages", "paragraphs": ["Because federal and state minimum wages do not change in regular intervals or by regular increments, the number of states and the share of the labor force covered by higher minimum wages changes annually. In general, during periods in which the federal minimum wage remains constant, more states enact higher minimum wages and the share of the workforce for which the federal rate serves as the floor likewise decreases. When the federal rate increases, some state rates become equal to or less than the federal rate.", " Table 1 presents a snapshot of minimum wage rates in the 29 states and the District of Columbia with minimum wages above the federal rate from 2018 through 2024, while Figure 3 shows the changes in the coverage of the federal minimum wage. Specifically, Figure 3 plots the percentage of the civilian labor force residing in states in which the federal wage serves as the floor. If no state had a minimum wage above the federal rate, then the federal minimum wage would be the floor for states in which 100% of the labor force resides. Similarly, if every state had a minimum wage above the current rate of $7.25, then the federal rate would not be binding for the labor force. Instead the interaction of federal and state rates has led to the federal minimum wage playing a fluctuating, but generally decreasing, role in establishing a wage floor for the civilian labor force, particularly during periods in which the federal rate is not increased.", "Examining the specific time periods around changes in the federal minimum wage (see Figure 1 for the history of federal minimum wage rate changes), data in Figure 3 show a general trend toward a lower share of the labor force being covered by the federal minimum wage only. Federal rate increases in 2007 through 2009 mitigated this reduction, as did earlier changes in the federal rate.", "In the period from 1983 through 1989, the federal minimum wage remained constant at $3.35 per hour. Prior to the federal increases in 1990 and 1991, the number of states with higher minimum wages rose from 3 in 1984 to 16 in 1989 and the share of the U.S. civilian labor force in states for which the federal rate was the floor fell from 98% to 70%. Following a two-step federal increase in 1990 and 1991 from $3.35 to $4.25 per hour, the number of states with higher minimum wages fell to 8 in 1992, which meant that the federal rate was the floor for states comprising 92% of the civilian labor force. The next federal minimum wage increase occurred in two steps in 1996 and 1997, increasing from $4.25 to $5.15 per hour. Prior to that increase, in 1995, there were 10 states, representing 10% of the civilian labor force, with minimum wages above the federal rate. After the second increase in 1997, the number of states with higher minimum wages dropped to 8, but the share of the labor force in states for which the federal rate served as a floor decreased to 82%. The federal minimum wage did not increase after 1997 until 2007. During much of that period the number of states with higher minimum wages stayed somewhat steady, increasing from 8 (comprising 18% of the civilian labor force) in 1998 to 12 (comprising 21% of the civilian labor force) in 2003. However, by 2006, 22 states representing 50% of the civilian labor force had minimum wage rates above the federal rate. This increase was due in part to a few populous states, such as Florida, Michigan, and New York, adopting minimum wage rates above the federal rate in this period. Following the three-step increase in the federal minimum wage from $5.15 to the current $7.25 (2007-2009), 15 states, comprising 33% of the civilian labor force, had rates above the federal minimum wage in 2010. By 2019, this rose to 29 states and the District of Columbia, which means that the federal rate is the wage floor in states representing 39% of the civilian labor force."], "subsections": [{"section_title": "Appendix. Selected Characteristics of State Minimum Wage Policies", "paragraphs": ["For the 29 states and the District of Columbia with state minimum wage rates above the federal rate as of 2019, Table 1 and much of the text above summarizes information on those states' minimum wage policies, highlighting minimum wage rates and mechanisms used to establish and adjust wage rates. As discussed previously, for those states with current or scheduled minimum wages above the federal rate, three main mechanisms are in place to adjust future rates: (1) scheduled increases, (2) indexation to inflation, or (3) reference to the federal rate plus an add-on (i.e., a state minimum wage is a percentage or dollar amount above the federal rate). For the 21 states with minimum wage rates equal to or below the federal rate, however, there are no mechanisms in place to move rates above the federal rate. Thus, the main difference within this group of states is the relationship of the state rate, if any, to the federal rate.", "For those 21 states with minimum wages equal to or below the federal rate, the state rate may be set in four ways:", "No state minimum wage provisions: In five states\u2014Alabama, Louisiana, Mississippi, South Carolina, and Tennessee\u2014there are no provisions for state minimum wage rates. In practice, this means that most workers in these states are covered by the FLSA minimum wage provisions since coverage is generally broad. State minimum wage provisions with no reference to the FLSA: Five states have state minimum wage rates but do not reference the FLSA. Two of these states\u2014Georgia and Wyoming\u2014have state rates below $7.25, while three of these states\u2014Kansas, North Dakota, and Wisconsin\u2014have rates equal to $7.25. However, because there is no reference to the FLSA rate or other provision for adjustment in any of these states, the state rate does not change unless the state policy is changed. State minimum wage equals the FLSA rate: Six states\u2014Idaho, Indiana, New Hampshire, Oklahoma, Texas, and Virginia\u2014set the state rate equal to the FLSA rate. Thus, when the FLSA rate changes, the state rates in these six states change to equal the FLSA rate. State minimum wage equals FLSA rate if FLSA is greater: In four states\u2014Iowa, Kentucky, North Carolina, and Pennsylvania\u2014the state rate is specified separately but includes a provision to equal the FLSA rate if the latter is above the state specified rate. ", " Table A-1 provides detailed information about minimum wage policies in the 50 states and the District of Columbia, including those summarized in a more concise manner in Table 1 . "], "subsections": []}]}]}}
{"id": "RL31055", "title": "House Offset Amendments to Appropriations Bills: Procedural Considerations", "released_date": "2019-02-06T00:00:00", "summary": ["One of the most common methods for changing spending priorities in appropriations bills on the House floor is through offset amendments. House offset amendments may generally change spending priorities in a pending appropriations measure by increasing spending for certain activities (or creating spending for new activities not previously included in the bill) and offsetting the increase with funding decreases in other activities in the bill. Offset amendments are needed to avoid points of order under Sections 302(f) and 311(a) of the Congressional Budget Act, enforcing certain spending ceilings affecting regular appropriations bills, continuing resolutions (CRs), and supplemental appropriations measures (supplementals). In addition, amendments to general appropriations bills that would increase total spending provided in the bill must be entirely offset.", "Two types of House offset amendments are considered in the Committee of the Whole House on the State of the Union (Committee of the Whole): clause 2(f) and reachback (or fetchback) amendments. As provided under House Rule XXI, clause 2(f) offset amendments consist of two or more amendments considered together (or en bloc) that would change amounts by directly adding text or changing text in the body of the bill. Taken as a whole, the amendment does not increase the amount of funding in the pending bill. Such amendments (1) must provide offsets in both new budget authority and outlays, (2) can only include language transferring appropriations in the bill, and (3) may contain certain unauthorized appropriations.", "Reachback offset amendments are generally offered at the end of the bill and change funding amounts in the pending bill by reference. These amendments (1) must provide offsets in new budget authority, but not necessarily outlays; (2) may add new appropriations (and spending set-asides within certain restrictions); (3) cannot include unauthorized appropriations; and (4) may provide across-the-board spending reductions as offsets.", "Parliamentary rules governing consideration of offset amendments may be suspended or waived, typically by House adoption of a special rule but also by unanimous consent.", "The advantages of clause 2(f) amendments over reachback amendments are that clause 2(f) amendments may contain certain unauthorized appropriations and are typically considered before reachback amendments, sometimes limiting offset opportunities for reachback amendments. The main advantages of reachback amendments are that they may not have to offset outlays, may add new appropriations, and may include across-the-board spending reductions."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["One of the most common methods for redistributing spending priorities in appropriations bills on the House floor is through offset amendments. House offset amendments generally change spending priorities in a pending appropriations measure by increasing spending for certain activities (or creating spending for new activities not previously included in the bill) and offsetting the increase(s) by decreasing or striking funding for other activities in the bill. For example, an amendment increasing funding for one agency funded in the bill by $3 million and decreasing funding for another agency by the same amount in the same bill would be an offset amendment.", "These amendments may transfer funds between two activities or among several activities. In addition, certain offset amendments may reduce funding with across-the-board spending reductions.", "Representatives use offset amendments for a variety of reasons, including to (1) ensure that proposals increasing funding for certain activities in any appropriations measure do not violate parliamentary rules enforcing certain spending ceilings; (2) comply with the prohibition against increasing total spending in a general appropriations bill; (3) garner support for efforts to reduce funding for certain activities by transferring those funds to popular programs; and (4) provide a focal point for discussion of a particular issue.", "This report is an introduction to selected House rules and practices governing the consideration of offset amendments to appropriations measures considered in the Committee of the Whole House on the State of the Union (or Committee of the Whole). It analyzes the parliamentary context providing the need for offset amendments; the two types of offset amendments, clause 2(f) and reachback (or fetchback) offset amendments, including procedural factors regarding each; and the mechanisms for waiving House rules. The report concludes with highlights on the procedural advantages of each offset amendment type.", "This report is not an official statement of House procedures. The House Parliamentarian advises the presiding officer on procedural issues regarding offset amendments and other matters. Although this report provides useful background information, it should not be considered a substitute for consultation with the Parliamentarian on specific procedural problems and opportunities."], "subsections": []}, {"section_title": "Parliamentary Context", "paragraphs": ["Offset amendments are needed to ensure amendments increasing funding for certain activities in a regular appropriations bill, supplemental appropriations bill, or continuing resolution do not also cause spending ceilings associated with the annual budget resolution to be exceeded. Additionally, a separate order of the House prohibits amendments increasing the total spending level in a general appropriations bill."], "subsections": [{"section_title": "Spending Ceilings and Offset Amendments", "paragraphs": ["Under the Congressional Budget Act of 1974, as amended, Congress typically considers an annual budget resolution each spring. These measures are under the jurisdiction of the House and Senate Budget Committees. Each budget resolution establishes, in part, total new budget authority and outlay ceilings for federal government activities for the upcoming fiscal year. Once these figures are finalized, under Section 302(a) of the Congressional Budget Act, the new budget authority and outlays are required to be allocated among the House committees with jurisdiction over spending, and each committee is given specific spending ceilings (referred to as the 302(a) allocations ). The House Appropriations Committee receives separate allocations for discretionary and direct spending and, in turn, is required under Section 302(b) to subdivide its 302(a) allocations among its 12 appropriations subcommittees, providing each subcommittee with its spending ceiling ( 302(b) subdivisions ). In the case of the Appropriations Committee, these allocations are only established for the upcoming fiscal year because appropriations measures are annual.", "Two Congressional Budget Act points of order, under Sections 302(f) and 311(a), enforce selected spending ceilings. The 302(f) point of order prohibits, in part, floor consideration of any committee-reported appropriations measure and related amendments providing new budget authority for the upcoming fiscal year that would cause the applicable 302(a) or 302(b) allocations of new budget authority for that fiscal year to be exceeded. In effect, the application of this point of order on appropriations legislation is generally limited to discretionary spending. If, for example, the 302(b) subdivision in new discretionary budget authority for a fiscal year is $24 billion and the reported bill would provide the same amount for the same fiscal year, any amendment proposing an increase in new discretionary budget authority for activities in the bill (or creating new discretionary budget authority) would cause the 302(b) limit for that bill to be exceeded, triggering the 302(f) point of order. An offset amendment, however, that also includes a commensurate decrease in new discretionary budget authority for activities in the bill would not prevent a violation of the rule.", "The second rule, the 311(a) point of order, prohibits, in part, floor consideration of any committee-reported appropriations measure and related amendments providing new budget authority for the upcoming fiscal year that would cause the applicable total budget authority and outlay ceilings in the budget resolution for that fiscal year to be exceeded. As the amounts of all the spending measures considered in the House accumulate, they could potentially reach or exceed these ceilings. This point of order would typically affect the last spending bills to be considered, such as supplemental appropriations measures or the last regular appropriations bills.", "If a Representative raises a point of order that an amendment violates either rule and the presiding officer sustains the point of order, the amendment falls.", "Appropriations measures considered on the House floor are typically at or just below the level of the subcommittee's 302(b) subdivision and, in some cases, the committee's 302(a) allocation and the total spending ceiling as well."], "subsections": []}, {"section_title": "Appropriations Measures: Selected Content", "paragraphs": ["The structure of appropriations measures has a direct impact on the form of offset amendments. Because regular appropriations bills and supplementals generally include several lump-sum and line-item appropriations, adding a new appropriation or increasing funding for an appropriation in the bill typically requires an offset. The procedural necessity of an offset for a funding set-aside within a lump-sum appropriation is dependent on the structure of the appropriation in the bill."], "subsections": [{"section_title": "Lump-Sum and Line-Item Appropriations", "paragraphs": ["Regular appropriations bills and supplemental appropriations measures generally contain numerous unnumbered paragraphs. Most paragraphs provide a lump-sum amount (usually an appropriation) for similar programs, projects, or activities. Such paragraphs are referred to as lump-sum appropriations . A few paragraphs may provide an appropriation for a single program or project, referred to as a line-item appropriation . Most appropriations paragraphs correspond to a unique budget account.", "The total net spending levels provided in an appropriations bill include all lump-sum and line-item appropriations, rescissions, and other provisions affecting spending. An amendment increasing a lump-sum or line-item appropriation as well as adding a new appropriation to a general appropriations bill would violate Section 3(d)(3) unless it was accompanied by a commensurate offset regardless of the level of spending in the measure. In addition, appropriations bills initially considered on the House floor are typically near or at the level of the subcommittee's 302(b) subdivision and, in some cases (particularly supplementals), the committee's 302(a) allocation and the total spending ceilings as well. An amendment increasing a lump-sum or line-item appropriation, therefore, could increase the amount of funding in the bill, causing it to exceed these ceilings. As a result, such an amendment typically requires an offset for it to be in order."], "subsections": []}, {"section_title": "Funding Set-Asides", "paragraphs": ["Within a lump-sum appropriation, separate amounts are sometimes included in the bill that set aside spending for specified programs, projects, or activities (for purposes of this report, they are referred to as funding set-asides ).", "An amendment proposing to increase (or create) a funding set-aside in a lump-sum appropriation that has been entirely set aside in the bill would procedurally require a commensurate offset. In the example below, the three set-asides total $200 million, which is the total lump-sum amount. An amendment proposing an increase in any of the three set-asides that does not include an offset in one of the other set-asides would require an increase of the lump-sum amount.", "For necessary expenses, including salaries and related expenses, of the Executive Office for YYY, to implement program activities, $200,000,000, of which $100,000,000 is for the yellow program, $50,000,000 for the green program, and $50,000,000 for the blue program.", "By contrast, certain set-aside amendments would not increase lump-sum amounts. If a bill contains a lump-sum amount with no set-asides, for example, an amendment designating part (or all) of the funds for a particular purpose would not increase spending. In cases in which the lump-sum appropriation includes a set-aside(s) that does not affect the entire amount, an amendment setting aside only the remaining funds or a portion of those funds would also not increase spending. If enacted, the effect of either case would be reductions in funding for activities that were not set aside to accommodate funding in the bill that was specified as set-asides. To avoid such reductions, amendments may include offsets from other appropriations in the bill."], "subsections": []}]}]}, {"section_title": "Types of Offset Amendments", "paragraphs": ["There are two types of offset amendments, clause 2(f) and reachback (or fetchback) amendments, available during consideration of regular and supplemental appropriations bills in the Committee of the Whole. Clause 2(f) refers to clause 2(f) of House Rule XXI, which establishes some of the parliamentary procedures governing the consideration of such amendments."], "subsections": [{"section_title": "Clause 2(f) Offset Amendments", "paragraphs": ["Clause 2(f) offset amendments consist of two or more amendments considered together (or en bloc) that would change amounts by directly adding text or changing text in the body of the bill. Reachback offset amendments , by contrast, are generally offered at the end of the bill, that change funding amounts by reference. The clause 2(f) offset amendment transfers appropriations among objects in the pending bill and, taken as a whole, does not cause the bill to exceed the total new budget authority or outlay levels already provided in the bill. ", "An example of a clause 2(f) offset amendment follows. This amendment would have decreased the lump-sum appropriation for the Bureau of the Census, Periodic Censuses and Programs account by $10 million; increased the lump-sum appropriation for the Office of Justice Programs, State and Local Law Enforcement Assistance account by $10 million; and increased a set-aside within the latter appropriation for the Southwest Border Prosecutor Initiative by the same amount.", "Page 6, line 23, after t he dollar amount insert \"(reduced by $10,000,000).\"", "Page 42, line 8, after the dollar amount insert \"(increased by $10,000,000).\"", "Page 43, line 8, after the dollar amount insert \"(increased by $10,000,000).\"", "These offset amendments typically change a spending level by inserting after the amount a parenthetic increase or decrease (see example above). Under House rules, an amendment generally cannot amend previously amended text. Changing a monetary figure by a parenthetic increase or decrease placed after the amount text, rather than changing the amount in the text, however, is allowed.", "Under House rules, clause 2(f) offset amendments must be offered when the first portion of the bill to be amended is pending. In practice, however, they may be offered at other times if no Member objects. In the Committee of the Whole, appropriations bills are generally read for amendment sequentially by paragraph. After the reading clerk reads or designates a paragraph, the presiding officer entertains any points of order against that paragraph, and then Members may propose amendments to it. After the clerk has designated or begun reading the next paragraph, amendments to the former paragraph are not in order.", "Prior to consideration of a proposed clause 2(f) offset amendment, the presiding officer asks if any Member wants to raise a point of order against any provision the en bloc amendment would change. If a point of order against such a provision is sustained, the provision is stricken from the bill and is no longer amendable. Therefore, the offset amendment would fall as well, unless appropriately modified or amended by unanimous consent.", "There are four additional procedural implications regarding clause 2(f) offset amendments. These amendments (1) must offset any increase in both budget authority and outlays, (2) can only include language transferring appropriations, (3) may contain certain unauthorized appropriations, and (4) are exempt from a \"demand for a division of the question.\""], "subsections": [{"section_title": "Must Offset Both Budget Authority and Outlays", "paragraphs": ["Under clause 2(f) of House Rule XXI, any spending increases in a clause 2(f) offset amendment must be offset by commensurate reductions in both new budget authority and outlays. The 302(f) point of order enforcing 302(a) and 302(b) allocations and Section 3(d)(3) only apply to budget authority. The spending increases and decreases contained in an offset amendment must be provided in the same fiscal year, the year of the pending appropriations bill.", "Offset amendments providing equal increases and decreases in new budget authority might not produce equal amounts of outlays in the same fiscal year. The amount of resulting outlays may vary among different accounts because the length of time needed to complete the activities funded may differ. It takes less time to purchase office supplies than to complete construction of an aircraft carrier. For example, in Table 1 , the distribution of outlays from $20 million in new budget authority varies between two accounts.", "Based on historical spending practices, the Congressional Budget Office (CBO) each year estimates the speed at which outlays from each appropriation will occur, referred to as the spendout rates (or outlay rates ). A spendout rate is the rate at which budget authority is expected to be spent (outlays) in a fiscal year. In the example in Table 1 , the FY2017 spending rate for the operating expenses account is 90%, whereas the rate for the construction account is 10%.", "The varying spendout rates of appropriations sometimes complicate efforts to increase budget authority. In the example in Table 2 , increasing FY2017 budget authority for an operating expenses account by $20 million produces $18 million in outlays. Decreasing a construction account by the same amount in budget authority, however, produces only $2 million in outlays. Under this scenario, reductions in three accounts produce the $18 million in outlays needed to fund the $20 million budget authority increase in operating expenses. By contrast, increasing the construction account by $20 million in budget authority would be easier because only $2 million in outlays would be required.", "Representatives (or their staff) routinely ask CBO to estimate the budgetary effects of their clause 2(f) offset amendments for informational purposes. If a point of order is raised under clause 2(f), the chair relies on determinations made by the House Appropriations Committee as to the budgetary effects of the amendment."], "subsections": []}, {"section_title": "Can Only Include Language Transferring Appropriations", "paragraphs": ["Clause 2(f) offset amendments are, in part, amendments \"proposing only to transfer appropriations among objects in the bill\" by directly changing dollar amounts. Provisions that would not be considered \"transferring appropriations\" include adding a new lump-sum appropriation or spending set-aside, changing the amount of a rescission, providing an across-the-board spending reduction, or reaching back to provisions in the bill the House has already considered."], "subsections": []}, {"section_title": "May Contain Certain Unauthorized Appropriations", "paragraphs": ["Clause 2(a) of House Rule XXI generally prohibits unauthorized appropriations in certain committee-reported appropriations bills and amendments to such bills. Certain amendments, such as clause 2(f) offset amendments, however, may increase the level of funding for certain unauthorized appropriations already in the bill.", "Under clause 2(a), appropriations must generally be for purposes authorized by prior enactment of legislation concerning a program (or an agency, account, project, or activity). An \"[a]uthorization for a program may be derived from a specific law providing authority for that particular program or from a more general existing law\u2014'organic law'\u2014authorizing appropriations for such programs.\" Authorizations of subsequent appropriations may be permanent or they may be multi-year or annual, expiring at the end of a specific time period.", "The rule prohibits floor consideration of appropriations for a purpose or program whose authorization has expired or whose budget authority exceeds the ceiling authorized, if any. Appropriations violating these restrictions are unauthorized appropriations .", "Appropriations bills frequently include unauthorized appropriations. Such appropriations are allowed to remain in an appropriations bill when the House adopts a special rule waiving points of order against the appropriation or, less frequently, when no one raises a point of order against it. Under House precedents, a germane amendment that merely perfects an unauthorized appropriation permitted to remain in the bill is allowed. An example would be an amendment that would only increase the unauthorized amount and would do so by either amending the amount text or by inserting a parenthetical increase after the amount (such as an en bloc clause 2(f) offset amendment). One scenario for providing such funding would follow the following steps:", "1. An authorization act provided an authorization of appropriations of $2 million for program yellow through FY2016; as of the close of FY2016, the entire amount of the authorization had expired. 2. Subsequently, an FY2017 regular appropriations bill provides an unauthorized appropriation of $2 million for program yellow. 3. The House adopts a special rule waiving clause 2(a) of House Rule XXI against all provisions in the bill, allowing the above appropriation to remain. 4. A clause 2(f) offset amendment parenthetically increasing the unauthorized appropriation by $1 million for program yellow is allowed.", "Although clause 2(f) offset amendments may increase an unauthorized appropriation, they remain subject to budget authority and the outlay offset requirements of clause 2(f) of House Rule XXI.", "A clause 2(f) amendment may not propose to increase an \"authorized appropriation\" in an appropriations bill beyond the authorized level. For example, if an authorization act included a $2 million authorization for FY2017 and the regular appropriations bill provided that amount, an offset amendment increasing the amount above that level would be prohibited."], "subsections": []}, {"section_title": "Exempt from a \"Demand for a Division of the Question\"", "paragraphs": ["Under clause 2(f) of House Rule XXI, these amendments are not subject to a \"demand for a division of the question in the House or in the Committee of the Whole.\" That is, a Member cannot demand separate consideration of two or more provisions in such en bloc amendments. Instead. the House must consider the amendment as a whole."], "subsections": []}]}, {"section_title": "Reachback Offset Amendments", "paragraphs": ["Reachback (or fetchback ) offset amendments add a new section (or title), typically at the end of an appropriations measure, that reaches back to change amounts previously considered by reference. For example, the following amendment inserted a new section at the end of the committee-reported FY2008 Labor, Health and Human Services, and Education regular appropriations bill ( H.R. 3043 , 110 th Congress):", "Title VI\u2014Additional General Provisions", "Sec. 601. The amounts otherwise provided by this Act are revised by reducing the amount made available for the \"Department of Labor, Employment and Training Administration, Training and Employment Services\", by increasing the amount made available for the \"National Institutes of Health, National Cancer Institute\", and by increasing the amount made available for the \"National Institutes of Health, National Institute of Neurological Disorders and Stroke\" by $49,000,000, $10,000,000, and $10,000,000, respectively.", "Prior to adoption of Section 3(d)(3) of H.Res. 5 (112 th Congress), reachback amendments to general appropriations bills could have been offered that increased spending provided in the bill as long as they did not violate the 302(f) and 311(a) points of order. ", "Reachback amendments", "must offset budget authority, but not necessarily outlays; may add new lump-sum appropriations and set-asides, subject to certain restrictions; may not include unauthorized appropriations; must be drafted to avoid a demand for a division of the question; and may provide across-the-board spending reductions as offsets."], "subsections": [{"section_title": "Must Offset Budget Authority But Not Necessarily Outlays", "paragraphs": ["Under the 3(d)(3) and 302(f) points of order, only budget authority offsets are needed; but the 311(a) point of order applies to both new budget authority and outlays. Generally, the most restrictive points of order are those under 3(d)(3) and 302(f) enforcing the 302(b) subdivisions, which both enforce only budget authority. Furthermore, only the last spending measures considered for a fiscal year, such as supplementals or the last regular bills, are likely to breach the overall spending limit and violate the 311(a) point of order. For reachback amendments, budget authority offsets are generally the primary procedural concern.", "Opponents of a reachback amendment may, however, raise the lack of outlay offsets as a concern for policy reasons. They may also argue that the resulting outlay increases might present a procedural problem for the bill in the Senate or in conference.", "In the case of reachback amendments that also provide sufficient new budget authority reductions to offset any outlay increases, Representatives (or their staff) routinely ask CBO to estimate the outlay effect of their amendments. The spending increases and decreases contained in an offset amendment must be provided in the same fiscal year, the year of the pending appropriations bill."], "subsections": []}, {"section_title": "May Add New Appropriations (and Set-Asides)", "paragraphs": ["Reachback amendments may contain new appropriations and set-asides for certain activities not already included in the bill. Such new appropriations and set-asides must be germane to the bill.", "Under clause 7 of House Rule XVI, all amendments must be germane to the pending bill. That is, they may not add new subject matter to the bill. Reachback amendments offered at the end of the bill must be germane to the bill, and those offered at the end of a title must be germane to the title. Regular appropriations measures generally have broad subject matter, which may provide flexibility for reachback amendments.", "Set-asides may not, however, violate a House rule prohibiting legislation on a general appropriations bill (or legislation). Clause 2(b) of House Rule XXI prohibits legislation in committee-reported general appropriations bills, and clause 2(c) prohibits legislation in amendments to those measures. For purposes of this rule, legislation refers to any provision in a general appropriations bill or related amendment that changes existing law, such as proposals amending or repealing existing law or creating new law. The following are examples of legislative language: abolishing a department, agency, or program; providing, changing, limiting, or waiving an authorization; or proposing new rescissions in the appropriations bill.", "One of the guiding principles in interpreting this prohibition is that an amendment designating funds may not interfere with an executive branch official's statutory authority. For example, such amendments may not significantly alter the official's discretion. Language doing so changes existing law and is therefore prohibited. For example, if an authorization law provides an agency head with the authority to make decisions allocating funds within a particular lump-sum appropriation, an amendment proposing a new set-aside would alter the agency head's authority and would thus be out of order.", "In cases where a new set-aside would violate the rules, an amendment sponsor frequently does not include the set-aside in the amendment; instead, the sponsor merely discusses that set-aside in terms of intent and expectation during debate on the amendment. This approach is used to avoid the point of order against the amendment. The amendment's sponsor may also urge conferees to include the set-aside in any subsequent conference report.", "Recent House practice has also included amendments for which both the increase and the offset apply to the same provision in an appropriation bill. These amendments use the form of en bloc offset amendments in order to allow Members the opportunity to discuss a new set aside or other agency guidance without changing the overall level of funding provided in the bill. At the end of consideration, such amendments are withdrawn by unanimous consent."], "subsections": []}, {"section_title": "May Not Include Unauthorized Appropriations", "paragraphs": ["Under clause 2(a) of House Rule XXI, new appropriations and set-asides included in amendments must be proposed for authorized purposes. All new set-asides must also be proposed to authorized lump-sum appropriations.", "In contrast to clause 2(f) offset amendments, reachback amendments may not increase unauthorized appropriations permitted to remain in the bill because they do not change the text of the bill. The section added by a reachback amendment is considered adding a further unauthorized appropriation, as opposed to merely perfecting the text."], "subsections": []}, {"section_title": "Must Be Drafted to Avoid a \"Demand for a Division of the Question\"", "paragraphs": ["Under clause 5 of House Rule XVI, a Member may demand separate consideration of two or more individual portions of an amendment if each portion identified, when standing alone, is a separate, substantive proposition and is grammatically separate \"so that if one proposition is rejected a separate proposition will logically remain.\"", "Because reachback amendments are potentially subject to a demand for a division of the question, if the presiding officer rules that an amendment is divisible, each divided portion of the amendment will be considered separately and subject to separate debate and amendment, as well as a separate vote.", "Members often demand a division of the question on an amendment to more easily defeat one or more of the portions of that amendment separately. For example, a majority of Members might be opposed to the portion of an offset amendment that decreases funds for a particular program. One of them might demand a division of the question that, if granted, would allow a separate vote on the funding decrease portion of the amendment. Even if the amendment as a whole was not subject to a point of order, once one portion is defeated the remainder may be subject to the Section 3(d)(3) or Congressional Budget Act points of order."], "subsections": []}, {"section_title": "May Provide Across-the-Board Spending Reductions as Offsets", "paragraphs": ["Reachback amendments may include as an offset across-the-board spending cuts. Clause 2(f) amendments may only directly change amounts in the bill."], "subsections": []}]}]}, {"section_title": "Procedural Considerations", "paragraphs": ["Parliamentary rules may be suspended or waived to consider offset amendments that violate these rules, typically by House adoption of a special rule. However, this approach has been used infrequently.", "There are certain procedural advantages of clause 2(f) amendments over reachback amendments and vice versa."], "subsections": [{"section_title": "Opportunities to Waive Parliamentary Rules", "paragraphs": ["There are generally three limited opportunities to suspend or waive the rules governing consideration of an offset amendment: (1) if no one raises a point of order; (2) if the House adopts a special rule explicitly waiving points of order against the amendment; or (3) if the House agrees by unanimous consent to waive the rules. Otherwise, if the presiding officer sustains a point of order against an amendment for violating the parliamentary rules previously discussed, the amendment falls.", "First, House rules are not generally self-enforcing. A Representative must raise a point of order that an amendment violates a specific rule. If no one opposes an amendment, a point of order does not have to be raised.", "Second, under current practice, the House Rules Committee usually reports a special rule setting additional procedural parameters for the consideration of appropriations measures. The House typically adopts the special rule and then considers the particular appropriations measure pursuant to it. If an offset amendment would violate one or more parliamentary rules, the sponsor may ask the Rules Committee to include a waiver protecting the amendment from the point(s) of order. Special rules generally do not provide special protection for offset amendments to appropriations bills.", "Third, a Member might ask to consider an amendment violating the rules by unanimous consent. A single Member, however, can prevent such consideration by simply objecting to the unanimous consent request.", "To attain their policy objectives, sponsors of offset amendments generally select either a clause 2(f) or reachback amendment and work within the rules governing their consideration."], "subsections": []}, {"section_title": "Selected Procedural Advantages of Clause 2(f) Amendments", "paragraphs": [], "subsections": [{"section_title": "May Include Unauthorized Appropriations", "paragraphs": ["Appropriations bills typically include some unauthorized appropriations. Generally, the House Rules Committee reports a special rule adopted by the House, waiving the prohibition against unauthorized appropriations for most or all unauthorized appropriations in a reported bill. Clause 2(f) amendments can increase those unauthorized appropriations allowed to remain. Reachback amendments, however, can only increase authorized appropriations in the bill to their authorized level (if there is one).", "In some cases, entire bills or significant portions of bills have consisted of unauthorized appropriations. As a result, reachback amendments could not increase those amounts. For example, many of the lump-sum appropriations provided in the committee-reported regular defense appropriations bills have typically been unauthorized because of the timing of consideration of the annual defense authorization bill. The House has adopted special rules regarding each bill waiving the application of clause 2 of House Rule XXI. As a result, clause 2(f) amendments to those bills were in order, but reachback amendments were limited to the few, if any, authorized appropriations."], "subsections": []}, {"section_title": "Considered Earlier", "paragraphs": ["The timing of clause 2(f) amendments is sometimes an advantage over reachback amendments because clause 2(f) amendments are offered earlier in a bill's consideration. By the time reachback amendments are considered, there may be fewer politically appealing offset options available. Amendments, including clause 2(f) amendments, may have already been adopted that reduced the account a reachback amendment sponsor selected for offsets. The account might be reduced to a point where there is no support for further reductions."], "subsections": []}]}, {"section_title": "Selected Procedural Advantages of Reachback Amendments", "paragraphs": [], "subsections": [{"section_title": "May Add New Lump-Sum Appropriations or Set-Asides", "paragraphs": ["Reachback amendments may add new lump-sum appropriations and set-asides within certain restrictions. Clause 2(f) amendments, by contrast, are limited to transferring appropriations among objects already in the bill."], "subsections": []}, {"section_title": "May Provide Across-the-Board Cuts in Spending", "paragraphs": ["Reachback amendments may include as an offset an across-the-board spending cut, but clause 2(f) amendments may only directly change amounts in the bill."], "subsections": []}, {"section_title": "May Not Necessarily Have to Offset Outlays", "paragraphs": ["Another limited advantage of reachback amendments is that for most appropriations bills, reachback amendments must offset only new budget authority. Clause 2(f) amendments must offset both new budget authority and outlays. In practice, however, this advantage of reachback amendments over clause 2(f) amendments is limited because sponsors sometimes provide offsets in both budget authority and outlays to garner political support for reachback amendments."], "subsections": []}]}]}]}}
{"id": "R45546", "title": "Management of the Colorado River: Water Allocations, Drought, and the Federal Role", "released_date": "2019-05-17T00:00:00", "summary": ["The Colorado River Basin covers more than 246,000 square miles in seven U.S. states (Wyoming, Colorado, Utah, New Mexico, Arizona, Nevada, and California) and Mexico. Pursuant to federal law, the Bureau of Reclamation (part of the Department of the Interior) manages much of the basin's water supplies. Colorado River water is used primarily for agricultural irrigation and municipal and industrial (M&I) uses, but it also is important for power production, fish and wildlife, and recreational uses.", "In recent years, consumptive uses of Colorado River water have exceeded natural flows. This causes an imbalance in the basin's available supplies and competing demands. A drought in the basin dating to 2000 has raised the prospect of water delivery curtailments and decreased hydropower production, among other things. In the future, observers expect that increasing demand for supplies, coupled with the effects of climate change, will further increase the strain on the basin's limited water supplies.", "River Management", "The Law of the River is the commonly used shorthand for the multiple laws, court decisions, and other documents governing Colorado River operations. The foundational document of the Law of the River is the Colorado River Compact of 1922. Pursuant to the compact, the basin states established a framework to apportion the water supplies between the Upper and Lower Basins of the Colorado River, with the dividing line between the two basins at Lee Ferry, AZ (near the Utah border). The Upper and Lower Basins each were allocated 7.5 million acre-feet (MAF) annually under the Colorado River Compact; an additional 1.5 MAF in annual flows was made available to Mexico under a 1944 treaty. Future agreements and court decisions addressed numerous other issues (including intrastate allocations of flows), and subsequent federal legislation provided authority and funding for federal facilities that allowed users to develop their allocations. A Supreme Court ruling also confirmed that Congress designated the Secretary of the Interior as the water master for the Lower Basin, a role in which the federal government manages the delivery of all water below Hoover Dam.", "Reclamation and basin stakeholders closely track the status of two large reservoirs\u2014Lake Powell in the Upper Basin and Lake Mead in the Lower Basin\u2014as an indicator of basin storage conditions. Under recent guidelines, dam releases from these facilities are tied to specific water storage levels. For Lake Mead, the first tier of \"shortage,\" under which Arizona's and Nevada's allocations would be decreased, would be triggered if Lake Mead's January 1 elevation is expected to fall below 1,075 feet above mean sea level. As of early 2019, Reclamation projected that there was a 69% chance of a shortage condition at Lake Mead in 2020; there was also a lesser chance of Lake Powell reaching critically low levels. Improved hydrology in early 2019 may decrease the chances of shortage in the immediate future.", "Drought Contingency Plans", "Despite previous efforts to alleviate future shortages, the basin's hydrological outlook has generally worsened in recent years. After several years of negotiations, in early 2019 Reclamation and the basin states transmitted to Congress additional plans to alleviate stress on basin water supplies. These plans, known as the drought contingency plans (DCPs) for the Upper and Lower Basins, were authorized by Congress in April 2019 in the Colorado River Drought Contingency Plan Authorization Act (P.L. 116-14). The DCPs among other things obligate Lower Basin states to additional water supply cutbacks at specified storage levels (i.e., cutbacks beyond previous curtailment plans), commit Reclamation to additional water conservation efforts, and coordinate Upper Basin operations to protect Lake Powell storage levels and hydropower generation.", "Congressional Role", "Congress plays a multifaceted role in federal management of the Colorado River basin. Congress funds and oversees management of basin facilities, including operations and programs to protect and restore endangered species. It has also enacted and continues to consider Indian water rights settlements involving Colorado River waters and development of new water storage facilities in the basin. In addition, Congress has approved funding to mitigate water shortages and conserve basin water supplies and has enacted new authorities to combat drought and its effects on basin water users (i.e., the DCPs and other related efforts)."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["From its headwaters in Colorado and Wyoming to its terminus in the Gulf of California, the Colorado River Basin covers more than 246,000 square miles. The river runs through seven U.S. states (Wyoming, Colorado, Utah, New Mexico, Arizona, Nevada, and California) and Mexico. Pursuant to federal law, the Bureau of Reclamation (Reclamation, part of the Department of the Interior [DOI]) plays a prominent role in the management of the basin's waters. In the Lower Basin (i.e., Arizona, Nevada, and California), Reclamation also serves as water master on behalf of the Secretary of the Interior, a role that elevates the status of the federal government in basin water management. The federal role in the management of Colorado River water is magnified by the multiple federally owned and operated water storage and conveyance facilities in the basin, which provide low-cost water and hydropower supplies to water users. ", "Colorado River water is used primarily for agricultural irrigation and municipal and industrial (M&I) purposes. The river's flow and stored water also are important for power production, fish and wildlife, and recreation, among other uses. A majority (70%) of basin water supplies are used to irrigate 5.5 million acres of land; basin waters also provide M&I water supplies to nearly 40 million people. Much of the area that depends on the river for water supplies is outside of the drainage area for the Colorado River Basin. Storage and conveyance facilities on the Colorado River provide trans-basin diversions that serve areas such as Cheyenne, WY; multiple cities in Colorado's Front Range (e.g., Fort Collins, Denver, Boulder, and Colorado Springs, CO); Provo, UT; Albuquerque and Santa Fe, NM; and Los Angeles, San Diego, and the Imperial Valley in Southern California ( Figure 1 ). Colorado River hydropower facilities can provide up to 42 gigawatts of electrical power per year. The river also provides habitat for a wide range of species, including several federally endangered species. It flows through 7 national wildlife refuges and 11 National Park Service (NPS) units; these and other areas of the river support important recreational opportunities.", "Precipitation and runoff in the basin are highly variable. Water conditions on the river depend largely on snowmelt in the basin's northern areas. Observed data (1906-2018) show that natural flows in the Colorado River Basin in the 20 th century averaged about 14.8 million acre-feet (MAF) annually. Flows have dipped significantly during the current drought, which dates to 2000; natural flows from 2000 to 2018 averaged approximately 12.4 MAF per year . In 2018, Reclamation estimated that the 19-year period from 2000 to 2018 was the driest period in more than 100 years of record keeping. The dry conditions are consistent with prior droughts in the basin that were identified through tree ring studies; some of these droughts lasted for decades. Climate change impacts, including warmer temperatures and altered precipitation patterns, may further increase the likelihood of prolonged drought in the basin.", "Pursuant to the multiple compacts, federal laws, court decisions and decrees, contracts, and regulatory guidelines governing Colorado River operations (collectively known as the Law of the River ), Congress and the federal government play a prominent role in the management of the Colorado River. Specifically, Congress funds and oversees Reclamation's management of Colorado River Basin facilities, including facility operations and programs to protect and restore endangered species. Congress has also approved and continues to actively consider Indian water rights settlements involving Colorado River waters, and development of new and expanded water storage in the basin. In addition, Congress has approved funding to mitigate drought and stretch basin water supplies and has considered new authorities for Reclamation to combat drought and enter into agreements with states and Colorado River contractors.", "This report provides background on management of the Colorado River, including a discussion of trends and agreements since 2000. It also discusses the congressional role in the management of basin waters. "], "subsections": []}, {"section_title": "The Law of the River: Foundational Documents and Programs", "paragraphs": ["In the latter part of the 19 th century, interested parties in the Colorado River Basin began to recognize that local interests alone could not solve the challenges associated with development of the Colorado River. Plans conceived by parties in California's Imperial Valley to divert water from the mainstream of the Colorado River were thwarted because these proposals were subject to the sovereignty of both the United States and Mexico. The river also presented engineering challenges, such as deep canyons and erratic water flows, and economic hurdles that prevented local or state groups from building the necessary storage facilities and canals to provide an adequate water supply. Because local or state groups could not resolve these \"national problems,\" Congress considered ideas to control the Colorado River and resolve potential conflicts between the states. Thus, in an effort to resolve these conflicts and prevent litigation, Congress gave its consent for the states and Reclamation to enter into an agreement to apportion Colorado River water supplies in 1921. ", "The below sections discuss the resulting agreement, the Colorado River Compact, and other documents and agreements that form the basis of the Law of the River, which governs Colorado River operations."], "subsections": [{"section_title": "Colorado River Compact", "paragraphs": ["The Colorado River Compact of 1922, negotiated by the seven basin states and the federal government, was signed by all but one basin state (Arizona). Under the compact, the states established a framework to apportion the water supplies between the Upper Basin and the Lower Basin, with the dividing line between the two basins at Lee Ferry, AZ, near the Utah border. Each basin was apportioned 7.5 MAF annually for beneficial consumptive use, and the Lower Basin was given the right to increase its beneficial consumptive use by an additional 1 MAF annually. The agreement also required Upper Basin states to deliver to the Lower Basin a total of 75 MAF over each 10-year period, thus allowing for averaging over time to make up for low-flow years. The compact did not address inter- or intrastate allocations of water (which it left to future agreements and legislation), nor did it address water to be made available to Mexico, the river's natural terminus; this matter was addressed in subsequent international agreements. The compact was not to become binding until it had been approved by the legislatures of each of the signatory states and by Congress. "], "subsections": []}, {"section_title": "Boulder Canyon Project Act", "paragraphs": ["Congress approved and modified the Colorado River Compact in the Boulder Canyon Project Act (BCPA) of 1928. The act ratified the 1922 compact, authorized the construction of a federal facility to impound water in the Lower Basin (Boulder Dam, later renamed Hoover Dam) and related facilities to deliver water in Southern California (e.g., the All-American Canal, which delivers Colorado River water to California's Imperial Valley), and apportioned the Lower Basin's 7.5 MAF per year among the three Lower Basin states. It provided 4.4 MAF per year to California, 2.8 MAF to Arizona, and 300,000 acre-feet (AF) to Nevada, with the states to divide any surplus waters among them. It also directed the Secretary of the Interior to serve as the sole contracting authority for Colorado River water use in the Lower Basin and authorized several storage projects for study in the Upper Basin. ", "Congress's approval of the compact in the BCPA was conditioned on a number of factors, including ratification by California and five other states (thereby allowing the compact to become effective without Arizona's concurrence), and California agreeing by act of its legislature to limit its water use to 4.4 MAF per year and not more than half of any surplus waters. California met this requirement by passing the California Limitation Act of March 4, 1929. "], "subsections": []}, {"section_title": "Arizona Ratification and Arizona v. California Decision", "paragraphs": ["Arizona did not ratify the Colorado River Compact until 1944, at which time the state began to pursue a federal project to bring Colorado River water to its primary population centers in Phoenix and Tucson. California opposed the project, arguing that under the doctrine of prior appropriation, California's historical use of the river trumped Arizona's rights to the Arizona allotment. California also argued that Colorado River apportionments under the BCPA included water developed on Colorado River tributaries, whereas Arizona claimed, among other things, that these apportionments included the river's mainstream waters only. ", "In 1952, Arizona filed suit in the U.S. Supreme Court to settle the issue. Eleven years later, in the 1963 Arizona v. California decision, the Supreme Court ruled in favor of Arizona, finding that Congress had intended to apportion the mainstream of the Colorado River and that California and Arizona each would receive one-half of surplus flows. The same Supreme Court decision held that Section 5 of the BCPA controlled the apportionment of waters among Lower Basin States, and that the BCPA (and not the law of prior appropriation) controlled the apportionment of water among Lower Basin states. The ruling was notable for its directive to forgo traditional Reclamation deference to state law under the Reclamation Act of 1902, and formed the basis for the Secretary of the Interior's unique role as water master for the Lower Basin. The decision also held that Native American reservations on the Colorado River were entitled to priority under the BCPA. Later decrees by the Supreme Court in 1964 and 1979 supplemented the 1963 decision.", "Following the Arizona v. California decision, Congress eventually authorized Arizona's conveyance project for Colorado River water, the Central Arizona Project (CAP), in the Colorado River Basin Project Act of 1968 (CRBPA). As a condition for California's support of the project, Arizona agreed that, in the event of shortage conditions, California's 4.4 MAF has priority over CAP water supplies."], "subsections": []}, {"section_title": "1944 U.S.-Mexico Water Treaty27", "paragraphs": ["In 1944, the United States signed a water treaty with Mexico (1944 U.S.-Mexico Water Treaty) to guide how the two countries share the waters of the Colorado River and the Rio Grande. The treaty established water allocations for the two countries and created a governance framework (the International Boundary and Water Commission) to resolve disputes arising from the treaty's execution. The treaty requires the United States to provide Mexico with 1.5 MAF of water annually, plus an additional 200,000 AF when a surplus is declared. During drought, the United States may reduce deliveries to Mexico in similar proportion to reductions of U.S. consumptive uses. The treaty has been supplemented by additional agreements between the United States and Mexico, known as m inutes ."], "subsections": []}, {"section_title": "Upper Basin Compact and Colorado River Storage Project Authorizations", "paragraphs": ["Projects originally authorized for study in the Upper Basin under BCPA were not allowed to move forward until the Upper Basin states determined their individual water allocations, which they did under the Upper Colorado River Basin Compact of 1948. The Upper Basin Compact established Colorado (where the largest share of runoff to the river originates) as the largest entitlement holder in the Upper Basin, with rights to 51.75% of any Upper Basin flows after Colorado River Compact obligations to the Lower Basin have been met. Other states also received percentage-based allocations, including Wyoming (14%), New Mexico (11.25%), and Utah (23%). Arizona was allocated 50,000 AF in addition to its Lower Basin apportionment, in recognition of the small portion of the state in the Upper Basin. Basin allocations by state following approval of the Upper Basin Compact (i.e., the allocations that generally guide current water deliveries) are shown below in Figure 2 . The Upper Basin Compact also established the Upper Colorado River Commission, which coordinates operations and positions among Upper Basin states.", "Subsequent federal legislation paved the way for development of Upper Basin allocations. The Colorado River Storage Project (CRSP) Act of 1956 authorized storage reservoirs and dams in the Upper Basin, including the Glen Canyon, Flaming Gorge, Navajo, and Curecanti Dams. The act also established the Upper Colorado River Basin Fund, which receives revenues collected in connection with the projects, to be made available for defraying the project's costs of operation, maintenance, and emergency expenditures. ", "In addition to the aforementioned authorization of CAP in Arizona, the 1968 CRBPA amended CRSP to authorize several additional Upper Basin projects (e.g., the Animas La Plata and Central Utah projects) as CRSP participating projects. It also directed that the Secretary of the Interior propose operational criteria for Colorado River Storage Project units (including the releases of water from Lake Powell) that prioritize (1) Treaty Obligations to Mexico, (2) the Colorado River Compact requirement for the Upper Basin to deliver 75 MAF to Lower Basin states over any 10-year period, and (3) carryover storage to meet these needs. The CRBPA also established the Upper Colorado River Basin Fund and the Lower Colorado River Basin Development Fund, both of which were authorized to utilize revenues from power generation from relevant Upper and Lower Basin facilities to fund certain expenses in the sub-basins."], "subsections": []}]}, {"section_title": "Water Storage and Operations", "paragraphs": ["Due to the basin's large water storage projects, basin water users are able to store as much as 60 MAF, or about four times the Colorado River's annual flows. Thus, storage and operations in the basin receive considerable attention, particularly at the basin's two largest dams and their storage reservoirs: Glen Canyon Dam/Lake Powell in the Upper Basin (26.2 MAF of storage capacity) and Hoover Dam/Lake Mead in the Lower Basin (26.1 MAF). The status of these projects is of interest to basin stakeholders and observers and is monitored closely by Reclamation. ", "Glen Canyon Dam, completed in 1963, provides the linchpin for Upper Basin storage and regulates flows from the Upper Basin to the Lower Basin, pursuant to the Colorado River Compact. It also generates approximately 5 billion kilowatt hours (KWh) of electricity per year, which the Western Area Power Administration (WAPA) supplies to 5.8 million customers in Upper Basin States. Other significant storage in the Upper Basin includes the initial \"units\" of the CRSP: the Aspinall Unit in Colorado (including Blue Mesa, Crystal, and Morrow Point dams on the Gunnison River, with combined storage capacity of more than 1 MAF), the Flaming Gorge Unit in Utah (including Flaming Gorge Dam on the Green River, with a capacity of 3.78 MAF), and the Navajo Unit in New Mexico (including Navajo Dam on the San Juan River, with a capacity of 1 MAF). The Upper Basin is also home to 16 \"participating\" projects which are authorized to use water for irrigation, municipal and industrial uses, and other purposes. ", "In the Lower Basin, Hoover Dam, completed in 1936, provides the majority of the Lower Basin's storage and generates about 4.2 billion KWh of electricity per year for customers in California, Arizona, and Nevada. Also important for Lower Basin Operations are Davis Dam/Lake Mohave, which regulates flows to Mexico under the 1944 Treaty, and Parker Dam/Lake Havasu, which impounds water for diversion into the Colorado River Aqueduct (thereby allowing for deliveries to urban areas in southern California) and CAP (allowing for diversion to users in Arizona). Further downstream on the Arizona/California border, Imperial Dam (a diversion dam) diverts Colorado River water to the All-American Canal for use in California's Imperial and Coachella Valleys."], "subsections": [{"section_title": "Annual Operating Plans", "paragraphs": ["Reclamation monitors Colorado River reservoir levels and projects them 24 months into the future in monthly studies (called 24-month studies ). The studies take into account forecasted hydrology, reservoir operations, and diversion and consumptive use schedules to model a single scenario of reservoir conditions. The studies inform operating decisions by Reclamation looking one to two years into the future. They express water storage conditions at Lake Mead and Lake Powell in terms of elevation, as feet above mean sea level (ft).", "In addition to the 24-month studies, the CRBPA requires the Secretary to transmit to Congress and the governors of the basin states, by January 1 of each year, a report describing the actual operation for the preceding water year and the projected operation for the coming year. This report is commonly referred to as the annual operating plan (AOP). The AOP's projected January 1 water conditions for the upcoming calendar year establish a baseline for future annual operations. ", "Since the adoption of guidelines by Reclamation and basin states in 2007 (see below section, \" 2007 Interim Guidelines \"), operations of the Hoover and Glen Canyon Dams have been tied to specific pool elevations at Lake Mead and Lake Powell. For Lake Mead, the first level of shortage (1 st Tier Shortage Condition), under which Arizona and Nevada's allocations would be decreased, would be triggered if Lake Mead falls below 1,075 ft. For Lake Powell, releases under tiered operations are based on storage levels in both Lake Powell and Lake Mead (specific delivery curtailments based on lake levels similar to Lake Mead have not been adopted). ", "As of January 2019, Reclamation predicted that Lake Mead's 2019 elevation would remain above 1,075 ft (approximately 9.6 MAF of storage) and that Lake Powell would remain at its prior year level (i.e., the Upper Elevation Balancing Tier) during 2019. However, Reclamation also projected that there was a 69% chance of a 1 st Tier Shortage Condition at Lake Mead beginning in January 2020. Reclamation predicted a small (3%) chance of Lake Powell dropping to 3,490 feet, or minimum power pool (i.e., a level beyond which hydropower could not be generated) by 2020; the chance of this occurring by 2022 was greater (15%). Improved hydrology for 2019 may decrease the likelihood of shortage in the immediate future."], "subsections": []}]}, {"section_title": "Mitigating the Environmental Effects of Colorado River Basin Development", "paragraphs": ["Construction of most of the Colorado River's water supply infrastructure predated major federal environmental protection statutes, such as the National Environmental Policy Act (NEPA; 42 U.S.C. \u00a7\u00a74321 et seq. ) and the Endangered Species Act (ESA; 87 Stat. 884, 16 U.S.C. \u00a7\u00a71531-1544). Thus, many of the environmental impacts associated with the development of basin resources were not originally taken into account. Over time, multiple efforts have been initiated to mitigate these effects. Some of the highest-profile efforts have been associated with water quality (in particular, salinity control) and the effects of facility operations on endangered species. "], "subsections": [{"section_title": "Salinity Control", "paragraphs": ["Salinity and water quality are long-standing issues in the Colorado River Basin. Parts of the Upper Basin are covered by salt-bearing shale (which increases salt content in water inflows), and salinity content increases as the river flows downstream due to both natural leaching and return flows from agricultural irrigation. The 1944 U.S.-Mexico Water Treaty did not set water quality or salinity standards in the Colorado River Basin. However, after years of dispute between the United States and Mexico regarding the salinity of the water reaching Mexico's border, the two countries reached an agreement on August 30, 1973, with the signing of Minute 242 of the International Boundary and Water Commission. The agreement guarantees Mexico that the average salinity of its treaty deliveries will be no more than 115 parts per million higher than the salt content of the water diverted to the All-American Canal at Imperial Dam in Southern California. To control the salinity of Colorado River water in accordance with this agreement, Congress passed the Colorado River Basin Salinity Control Act of 1974 ( P.L. 93-320 ), which authorized desalting and salinity control facilities to improve Colorado River water quality. The most prominent of these facilities is the Yuma Desalting Plant, which was largely completed in 1992 but has never operated at capacity. In 1974, the seven basin states also established water quality standards for salinity through the Colorado River Basin Salinity Control Forum."], "subsections": []}, {"section_title": "Endangered Species Efforts and Habitat Improvements", "paragraphs": ["Congress enacted the ESA in 1973. As basin species became listed in accordance with the act, federal agencies and nonfederal stakeholders consulted with the U.S. Fish and Wildlife Service (FWS) to address the conservation of the listed species. As a result of these consultations, several major programs have been developed to protect and restore fish species on the Colorado River and its tributaries. Summaries of some of the key programs are below."], "subsections": [{"section_title": "Upper Colorado Endangered Fish Recovery Program", "paragraphs": ["The Upper Colorado Endangered Fish Recovery Program was established in 1988 to assist in the recovery of four species of endangered fish in the Upper Colorado River Basin. Congress authorized this program in P.L. 106-392 . The program is implemented through several stakeholders under a cooperative agreement signed by the governors of Colorado, Utah, and Wyoming; DOI; and the Administrator of WAPA. The recovery goals of the program are to reduce threats to species and improve their status so they are eventually delisted from the ESA. Some of the actions taken in the past include providing adequate instream flows for fish and their habitat, restoring habitat, reducing nonnative fish, augmenting fish populations with stocked fish, and conducting research and monitoring. Reclamation is the lead federal agency for the program and provides the majority of federal funds for implementation. It is also funded through a portion of Upper Basin hydropower revenues from WAPA; FWS; the states of Colorado, Wyoming, and Utah; and water users, among others. "], "subsections": []}, {"section_title": "San Juan River Basin Recovery Implementation Program", "paragraphs": ["The San Juan River Basin Recovery Implementation Program was established in 1992 to assist in the recovery of ESA-listed fish species on the San Juan River, the Colorado's largest tributary. The program is concerned with the recovery of the Razorback sucker ( Xyrauchen texanus ) and Colorado pikeminnow ( Ptychocheilus Lucius ). Congress authorized this program in P.L. 106-392 with the aim to protect the genetic integrity and population of listed species, conserve and restore habitat (including water quality), reduce nonnative species, and monitor species. The Recovery Program is coordinated by FWS. Reclamation is responsible for operating the Animas-La Plata Project and Navajo Dam on the San Juan River in a way that reduces effects on the fish populations. The program is funded by a portion of revenues from power generation, Reclamation, participating states, and the Bureau of Indian Affairs. Recovery efforts for listed fish are coordinated with the Upper Colorado River Program discussed above."], "subsections": []}, {"section_title": "Glen Canyon Dam Adaptive Management Program", "paragraphs": ["The Glen Canyon Dam Adaptive Management Program was established in 1997 in response to a directive from Congress under the Grand Canyon Protection Act of 1992 ( P.L. 102-575 ) to operate Glen Canyon Dam \"in such a manner as to protect, mitigate adverse impacts to, and improve the values for which Grand Canyon National Park and Glen Canyon National Recreation Area were established.\" This program uses experiments to determine how water flows affect natural resources south of the dam. Reclamation is in charge of modifying flows for experiments, and the U.S. Geological Survey conducts monitoring and other studies to evaluate the effects of the flows. The results are expected to better inform managers how to provide water deliveries and conserve species. The majority of program funding comes from hydropower revenues generated at Glen Canyon Dam."], "subsections": []}, {"section_title": "Lower Colorado Multi-Species Conservation Program (MSCP)", "paragraphs": ["The MSCP is a multistakeholder initiative to conserve 27 species (8 listed under ESA) along the Lower Colorado River while maintaining water and power supplies for farmers, tribes, industries, and urban residents. The MSCP began in 2005 and is planned to last for at least 50 years. The MSCP was created through consultation under ESA. To achieve compliance under ESA, federal entities involved in managing water supplies in the Lower Colorado River met with resource agencies from Arizona, California, and Nevada; Native American Tribes; environmental groups; and recreation interests to develop a program to conserve species along a portion of the Colorado River. A biological opinion (BiOp) issued by the FWS in 1997 served as a basis for the program. Modifications to the 1997 BiOp were made in 2002, and in 2005, the BiOp was renewed for 50 years. Nonfederal entities received an incidental take permit under Section 10(a) of the ESA for their activities in 2005 and shortly thereafter implemented a habitat conservation plan. ", "The objective of the MSCP is to create habitat for listed species, augment the populations of species listed under ESA, maintain current and future water diversions and power production, and abide by the incidental take authorizations for listed species under the ESA. The estimated total cost of the program over its lifetime is approximately $626 million in 2003 dollars ($882 million in 2018 dollars) and is to be split evenly between Reclamation (50%) and the states of California, Nevada, and Arizona (who collectively fund the remaining 50%). The management and implementation of the MSCP is the responsibility of Reclamation, in consultation with a steering committee of stakeholders. "], "subsections": []}]}]}, {"section_title": "Tribal Water Rights", "paragraphs": ["Twenty-two federally recognized tribes in the Colorado River Basin have quantified water diversion rights that have been confirmed by court decree or final settlement. These tribes collectively possess rights to 2.9 MAF per year of Colorado River water. However, as of 2015, these tribes typically were using just over half of their quantified rights. Additionally, 13 other basin tribes have reserved water rights claims that have yet to be resolved. Increased water use by tribes with existing water rights, and/or future settlement of claims and additional consumptive use of basin waters by other tribes, is likely to exacerbate the competition for basin water resources. ", "The potential for increased use of tribal water rights (which, once ratified, are counted toward state-specific allocations where the tribal reservation is located) has been studied in recent years. In 2014, Reclamation, working with a group of 10 tribes with significant reserved water rights claims on the Colorado River, initiated a study known as the 10 Tribes Study . The study, published in 2018, estimated that, cumulatively, the 10 tribes could have reserved water rights (including unresolved claims) to divert nearly 2.8 MAF per year. Of these water rights, approximately 2 MAF per year were decreed and an additional 785,273 AF (mostly in the Upper Basin) remained unresolved. The report estimated that, overall, the 10 tribes are diverting (i.e., making use of) almost 1.5 MAF of their 2.8 MAF in resolved and unresolved claims. Table 1 shows these figures at the basin and sub-basin levels. According to the study, the majority of unresolved claims in the Upper Basin are associated with the Ute Tribe in Utah (370,370 AF per year), the Navajo Nation in Utah (314,926 AF), and the Navajo Nation in the Upper Basin in Arizona (77,049 AF)."], "subsections": []}, {"section_title": "Drought and the Supply/Demand Imbalance in the Colorado River Basin", "paragraphs": ["When the Colorado River Compact was originally approved, it was assumed based on the historical record that average annual flows on the river were 16.4 MAF per year. According to Reclamation data, from 1906 to 2018, observed natural flows on the river at Lee Ferry, AZ\u2014the common point of measurement for observed basin flows\u2014averaged 14.8 MAF annually. Natural flows from 2000 to 2018 (i.e., during the ongoing drought) averaged considerably less than that\u201412.4 MAF annually. While natural flows have trended down, consumptive use in the basin has grown and has regularly exceeded natural flows since 2000. From 1971 to 2015, average total consumptive use grew from 13 MAF to over 15 MAF annually. Combined, the two trends have caused a significant drawdown of basin storage levels ( Figure 3 ).", "From 2009 to 2015, the largest consumptive water use occurred in the Lower Basin (7.5 MAF per year), while Upper Basin consumptive use averaged about 3.8 MAF annually. Use of Treaty water by Mexico (1.5 MAF per year) and evaporative loss from reservoirs (approximately 2 MAF per year) in both basins also factored significantly into total basin consumptive use. Notably, consumptive use in the Lower Basin, combined with mandatory releases to Mexico, regularly exceeds the mandatory 8.23 MAF per year that must be released from the Upper Basin to the Lower Basin and Mexico pursuant to Reclamation requirements. This imbalance between Lower Basin inflows and use, known as the structural deficit , causes additional stress on basin storage. ", "The current drought in the basin has included some of the lowest flows on record. According to Reclamation, the 19-year period from 2000 to 2018 was the driest period in more than 100 years of record keeping. Observers have pointed out that flows in some recent years have been lower than would be expected given the amount of precipitation that has occurred, and have noted that warmer temperatures appear to be a significant contributor to these diminished flows. Based on these and other observations, some have argued that Colorado River flows are unlikely to return to 20 th century averages, and that future water supply risk is high."], "subsections": [{"section_title": "2012 Reclamation Study", "paragraphs": ["A 2012 study by Reclamation projected a long-term imbalance in supply and demand in the Colorado River Basin. In the study, Reclamation noted that the basin had thus far avoided serious impacts on water supplies due to the significant storage within the system, coupled with the fact that some Upper Basin states have yet to fully develop the use of their allocations. However, Reclamation projected that in the coming half century, flows would decrease by an average of 9% at Lee Ferry and drought would increase in frequency and duration. At the same time, Reclamation projected that demand for basin water supplies would increase, with annual consumptive use projected to rise from 15 MAF to 18.1-20.4 MAF by 2050, depending on population growth. A range of 64%-76% of the growth in demand was expected to come from increased M&I demand. ", "Reclamation's 2012 study also posited several potential ways to alleviate future shortages in the basin, such as alternative water supplies, demand management, drought action plans, water banking, and water transfer/markets. Some of these options already are being pursued. In particular, some states have become increasingly active in banking unused Colorado River surface water supplies, including through groundwater banks or storage of unused surface waters in Lake Mead (see below section, \" 2007 Interim Guidelines \"). "], "subsections": []}]}, {"section_title": "Developments and Agreements Since 2000", "paragraphs": ["Drought conditions throughout the basin have raised concerns about potential negative impacts on water supplies. Concerns center on uncertainty that might result if the Secretary of the Interior were to determine that a shortage condition exists in the Lower Basin, and that related curtailments were warranted. Some in Upper Basin States are also concerned about the potential for a c ompact call of Lower Basin states on Upper Basin states. Drought and other uncertainties related to water rights priorities (e.g., potential tribal water rights claims) spurred the development of several efforts that generally attempted to relieve pressure on basin water supplies, stabilize storage levels, and provide assurances of available water supplies. Some of the most prominent developments since the year 2000 (i.e., the beginning of the current drought) are discussed below."], "subsections": [{"section_title": "2003 Quantitative Settlement Agreement", "paragraphs": ["Prior to the 2003 QSA, California had been using approximately 5.2 MAF of Colorado River on average each year (with most of its excess water use attributed to urban areas). Under the QSA, an agreement between several California water districts and DOI, California agreed to reduce its use to the required 4.4 MAF under the Law of the River. It sought to accomplish this aim by quantifying Colorado River entitlement levels of several water contractors; authorizing efforts to conserve additional water supplies (e.g., the lining of the All-American Canal); and providing for several large-scale, long-term agriculture-to-urban water transfers. The QSA also committed the state to a path for restoration and mitigation related to the Salton Sea, a water body in Southern California that was historically sustained by Colorado River irrigation runoff from the Imperial and Coachella Valleys. ", "A related agreement between Reclamation and the Lower Basin states, the Inadvertent Overrun and Payback Policy (IOPP), went into effect concurrently with the QSA in 2004. IOPP is an administrative mechanism that provides an accounting of inadvertent overruns in consumptive use compared to the annual entitlements of water users in the Lower Basin. These overruns must be \"paid back\" in the calendar year following the overruns, and the paybacks must be made only from \"extraordinary conservation measures\" above and beyond normal consumptive use."], "subsections": []}, {"section_title": "2004 Arizona Water Settlements Act", "paragraphs": ["The 2004 Arizona Water Settlements Act ( P.L. 108-451 , AWSA) significantly altered the allocation of CAP water in Arizona and set the stage for some of the cutbacks in the state that are currently under discussion. It ratified three water rights settlements (one in each title) between the federal government and the State of Arizona, the Gila River Indian Community (GRIC), and the Tohono O'odham Nation, respectively. For the state and its CAP water users, the settlement resolved a final repayment cost for CAP by reducing the water users' reimbursable repayment obligation from about $2.3 billion to $1.65 billion. Additionally, Arizona agreed to new tribal and non-tribal allocations of CAP water so that approximately half of CAP's annual allotment would be available to Indian tribes in Arizona, at a higher priority than most other uses. The tribal communities were authorized to lease the water so long as the water remains within the state via the state's water banking authority. The act also authorized funds to cover the cost of infrastructure required to deliver the water to the Indian communities, much of it derived from power receipts accruing to the Lower Colorado River Basin Development Fund. "], "subsections": []}, {"section_title": "2007 Interim Guidelines/Coordinated Operations for Lake Powell and Lake Mead", "paragraphs": ["Another significant development in the basin was the 2007 adoption of the Colorado River Interim Guidelines for Lower Basin Shortages and the Coordinated Operations for Lake Powell and Lake Mead (2007 Interim Guidelines). Development of the agreement began in 2005, when, in response to drought in the Southwest and the decline in basin water storage (and a record low point in Lake Powell of 33% active capacity), the Secretary of the Interior instructed Reclamation to develop coordinated strategies for Colorado River reservoir operations during drought or shortages. The resulting guidelines included criteria for releases from Lakes Mead and Powell determined by \"trigger levels\" in both reservoirs, as well as a schedule of Lower Basin curtailments at different operational tiers ( Table 2 ). Under the guidelines, Arizona and Nevada, which have junior rights to California, would face reduced allocations if Lake Mead elevations dropped below 1,075 ft. At the time, it was thought that the 2007 Guidelines would significantly reduce the risk of Lake Mead falling to 1,025 feet. The guidelines are considered \"interim\" because they were scheduled to expire in 20 years (i.e., at the end of 2026).", "The 2007 agreement also included for the first time a mechanism by which parties in the Lower Basin were able to store conserved water in Lake Mead, known as Intentionally Created Surplus (ICS). Reclamation accounts for this water annually, and the users storing the water may access the surplus in future years, in accordance with the Law of the River. From 2013 to 2017, the portion of Lake Mead water in storage that was classified as ICS ranged from a low of 711,864 AF in 2015 to a high of 1.261 MAF in 2017 ( Figure 4 ). "], "subsections": []}, {"section_title": "Pilot System Conservation Program", "paragraphs": ["In 2014, Reclamation and several major basin water supply agencies (Central Arizona Water Conservation District, Southern Nevada Water Authority, Metropolitan Water District of Southern California, and Denver Water) executed a memorandum of understanding to provide funding for voluntary conservation projects and reductions of water use. These activities had the goal of developing new system water , to be applied toward storage in Lake Mead, by the end of 2019. Congress formally authorized federal participation in these efforts in the Energy and Water Development and Related Agencies Appropriations Act, 2015 ( P.L. 113-235 , Division D ), with an initial sunset date for the authority at the end of FY2018. The Energy and Water Development and Related Agencies Appropriations Act, 2019 ( P.L. 115-244 , Division A ) extended the authority through the end of FY2022, with the stipulation that Upper Basin agreements could not proceed without the participation of the Upper Basin states through the Upper Colorado River Commission. As of mid-2018, Reclamation estimated that the program had resulted in a total of 194,000 AF of system water conserved. These savings were carried out through 64 projects conserving 47,000 AF in the Upper Basin and 11 projects conserving 147,000 AF in the Lower Basin. "], "subsections": []}, {"section_title": "Minute 319 and Minute 323 Agreements with Mexico87", "paragraphs": ["In 2017, the United States and Mexico signed Minute 323, which extended and replaced elements of a previous agreement, Minute 319, signed in 2012. Minute 323 included, among other things, options for Mexico to hold water in reserve in U.S. reservoirs for emergencies and water conservation efforts, as well as U.S. commitments for flows to support the ecological health of the Colorado River Delta. It also extended initial Mexican cutback commitments made under Minute 319 (which were similar in structure to the 2007 cutbacks negotiated for Lower Basin states) and established a Binational Water Scarcity Contingency Plan that included additional cutbacks that would be triggered if drought contingency plans (DCPs) are approved by U.S. basin states (see following section, \" 2019 Drought Contingency Plans \")."], "subsections": []}]}, {"section_title": "2019 Drought Contingency Plans", "paragraphs": ["Ongoing drought conditions and the potential for water supply shortages prompted discussions and negotiations focused on how to conserve additional basin water supplies. After several years of negotiations, on March 19, 2019, Reclamation and the Colorado River Basin states finalized DCPs for both the Upper Basin and the Lower Basin. These plans required final authorization by Congress to be implemented. Following House and Senate hearings on the DCPs in early April, on April 16, 2019, Congress authorized the DCP agreements in the Colorado River Drought Contingency Plan Authorization Act ( P.L. 116-14 ). Each of the basin-level DCPs is discussed below in more detail."], "subsections": [{"section_title": "Upper Basin Drought Contingency Plan", "paragraphs": ["The Upper Basin DCP aims to protect against Lake Powell reaching critically low elevations; it also authorizes storage of conserved water in the Upper Basin that could help establish the foundation for a water use reduction effort (i.e., a \"Demand Management Program\") that may be developed in the future. Under the Upper Basin DCP, the Upper Basin states agree to operate system units to keep the surface of Lake Powell above 3,525 ft, which is 35 ft above the minimum elevation needed to run the dam's hydroelectric plant. Other large Upper Basin reservoirs (e.g., Navajo Reservoir, Blue Mesa Reservoir, and Flaming Gorge Reservoir) would be operated to protect the targeted Lake Powell elevation, potentially through drawdown of their own storage. If established by the states, an Upper Basin DCP Demand Management Program would likely entail willing seller/buyer agreements allowing for temporary paid reductions in water use that would provide for more storage volume in Lake Powell.", "Reclamation and other observers have stated their belief that these efforts will significantly decrease the risk of Lake Powell's elevation falling below 3,490 ft, an elevation at which significantly reduced hydropower generation is possible."], "subsections": []}, {"section_title": "Lower Basin Drought Contingency Plan", "paragraphs": ["The Lower Basin DCP is designed to require Arizona, California, and Nevada to curtail use and thereby contribute additional water to Lake Mead storage at predetermined \"trigger\" elevations, while also creating additional flexibility to incentivize voluntary conservation of water to be stored in Lake Mead, thereby increasing lake levels. Under the DCP, Nevada and Arizona (which were already set to have their supplies curtailed beginning at 1,075 ft under the 2007 Interim Guidelines) are to contribute additional supplies to maintain higher lake levels (i.e., beyond previous commitments). The reductions of supply would reach their maximums when reservoir levels drop below 1,045 ft. At the same time, the Lower Basin DCP would, for the first time, include commitments for delivery cutbacks by California. These cutbacks would begin with 200,000 AF (4.5%) in reductions at Lake Mead elevations of 1,040-1,045 ft, and would increase to as much as 350,000 AF (7.9%) at elevations of 1,025 ft or lower. ", "The curtailments in the Lower Basin DCP are in addition to those agreed to under the 2007 Interim Guidelines and under Minute 323 with Mexico. Specific and cumulative reductions are shown in Table 2 . In addition to the state-level reductions, under the Lower Basin DCP, Reclamation also would agree to pursue efforts to add 100,000 AF or more of system water within the basin. Some of the largest and most controversial reductions under the Lower Basin DCP would occur in Arizona, where pursuant to previous changes under the 2004 AWSA, a large group of agricultural users would face major cutbacks to their CAP water supplies.", "Reclamation has noted that the Lower Basin DCP significantly decreases the chance of Lake Mead elevations falling below 1,020 ft, which would be a critically low level. Some parties have pointed out that although the DCP is unlikely to prevent a shortage from being declared at 1,075 ft, it would slow the rate at which the lake recedes thereafter. Combined with the commitments from Mexico, total planned cutbacks under shortage scenarios (i.e., all commitments to date, combined) would reduce Lower Basin consumptive use by 241,000 AF to 1.375 MAF per year, depending on Lake Mead's elevation."], "subsections": []}, {"section_title": "Drought Contingency Plan Opposition", "paragraphs": ["Although the DCPs and the related negotiations were widely praised, some expressed concerns related to the implementation of the DCPs as they relate to federal and state environmental laws. Most Colorado River contractors supported the agreements, but one major basin contractor, Imperial Irrigation District (IID, a major holder of Colorado River water rights in Southern California), did not approve the DCPs. IID has argued that the DCPs will further degrade the Salton Sea, a shrinking and ecologically degraded water body in southern California that relies on drainage flows from lands irrigated using Colorado River water. Following enactment of the DCPs, IID filed suit in state court alleging that state approval of the DCPs violated the California Environmental Quality Act. Others have questioned whether federal implementation of the DCPs without a new or supplemental Environmental Impact Statement might violate federal law, such as NEPA."], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "Funding and Oversight of Existing Facilities and Programs", "paragraphs": ["The principal role of Congress as it relates to storage facilities on the Colorado River is funding and oversight of facility operations, construction, and programs to protect and restore endangered species (e.g., Glen Canyon Dam Adaptive Management Program and the Upper Colorado River Endangered Fish Program). In the Upper Basin, Colorado River facilities include the 17 active participating units in the Colorado River Storage Projects, as well as the Navajo-Gallup Water Supply Project. In the Lower Basin, major facilities include the Salt River Project and Theodore Roosevelt Dam, Hoover Dam and All-American Canal, Yuma and Gila Projects, Parker-Davis Project, Central Arizona Project, and Robert B. Griffith Project (now Southern Nevada Water System).", "Congressional appropriations in support of Colorado River projects and programs typically account for a portion of overall project budgets. For example, the Lower Colorado Region's FY2017 operating budget was $517 million; $119.8 million of this total was provided by discretionary appropriations, and the remainder of funding came from power revenues (which are made available without further appropriation) and nonfederal partners. In recent years, Congress has also authorized and appropriated funding that has targeted the Colorado River Basin in general (i.e., the Pilot System Conservation Plan). Congress may choose to extend or amend these and other authorities specific to the basin. ", "While discretionary appropriations for the Colorado River are of regular interest to Congress, Congress may also be asked to weigh in on Colorado River funding that is not subject to regular appropriations. For instance, in the coming years, the Lower Colorado River Basin Development Fund is projected to face a decrease in revenues and may thus have less funding available for congressionally established funding priorities for the Development Fund."], "subsections": []}, {"section_title": "Indian Water Rights Settlements and Plans for New and Augmented Water Storage", "paragraphs": ["Congress has previously approved Indian water rights settlements associated with more than 2\u00a0MAF of tribal diversion rights on the Colorado River. Only a portion of this water has been developed. Congress likely will face the decision of whether to fund development of previously authorized infrastructure associated with Indian water rights settlements in the Colorado River Basin. For example, the ongoing Navajo-Gallup Water Supply Project is being built to serve the Jicarilla Apache Nation, the Navajo Nation, and the City of Gallup, New Mexico. Congress may also be asked to consider new settlements that may result in tribal rights to more Colorado River water. For example, in the 116 th Congress, H.R. 244 would authorize the Navajo Nation Water Settlement in Utah. ", "In addition to development of new tribal water supplies, some states in the Upper Basin have indicated their intent to further develop their Colorado River water entitlements. For example, in the 115 th Congress, Section 4310 of America's Water Infrastructure Act ( P.L. 115-270 ) authorized the Secretary of the Interior to enter into an agreement with the State of Wyoming whereby the state would fund a project to add erosion control to Fontenelle Reservoir in the Upper Basin. The project would allow the state to potentially utilize an additional 80,000 acre-feet of water storage on the Green River, a tributary of the Colorado River. "], "subsections": []}, {"section_title": "Drought Contingency Plan Implementation", "paragraphs": ["Congress may remain interested in implementation of the DCPs, including their success or failure at stemming further Colorado River cutbacks and the extent to which the plans comply with federal environmental laws such as NEPA. Similarly, Congress may be interested in the overall hydrologic status of the Colorado River Basin, as well as future efforts to plan for increased demand in the basin and stretch limited basin water supplies."], "subsections": []}]}]}}
{"id": "R45656", "title": "America\u2019s Water Infrastructure Act of 2018 (P.L. 115-270): Drinking Water Provisions", "released_date": "2019-03-28T00:00:00", "summary": ["Congress has long deliberated on the condition of drinking water infrastructure and drinking water quality as well as the financial and technical challenges some public water systems face in ensuring the delivery of safe and adequate water supplies. Several events and circumstances\u2014including source water contamination incidents; water infrastructure damage from natural disasters, such as hurricanes; detection of elevated lead levels in tap water in various cities and schools; and the nationwide need to repair or replace aging drinking water infrastructure\u2014have increased national attention to these issues. America's Water Infrastructure Act of 2018 (AWIA; P.L. 115-270), enacted on October 23, 2018, contains provisions that seek to address these and other water infrastructure concerns.", "Overall, AWIA authorizes various water infrastructure projects and activities for several federal agencies. Title I of AWIA, \"Water Resources Development Act of 2018,\" authorizes water resource development activities for the U.S. Army Corps of Engineers (USACE). Title II of AWIA constitutes the most comprehensive amendments to the Safe Drinking Water Act (SDWA) since 1996. Title III primarily includes provisions that address hydropower-related activities of the Federal Energy Regulatory Commission. Among its provisions, Title IV amends U.S. Environmental Protection Agency (EPA)-administered water infrastructure programs and several Clean Water Act authorities.", "This report focuses on the drinking water provisions of Title II and Title IV of AWIA, which authorize appropriations for several drinking water and wastewater infrastructure programs for projects that promote compliance, address aging drinking water infrastructure and lead in school drinking water, and increase drinking water infrastructure resilience to natural hazards.", "Title II amends SDWA to help communities achieve SDWA compliance, revise the Drinking Water State Revolving Fund (DWSRF) program, reauthorize appropriations for the DWSRF program, and increase emphasis on assisting disadvantaged communities. Provisions in Title II also revise emergency notification and planning requirements; authorize the use of DWSRF funds for the assessment and protection of drinking water sources; identify options intended to develop public water systems' technical, managerial, and financial capacity; and improve consumer confidence in public drinking water supplies. Title II authorizes a supplemental DWSRF appropriation for disaster assistance for public water systems in certain areas under certain conditions. Other provisions authorize new grant programs to reduce lead contamination in school drinking water, improve drinking water infrastructure for specified Indian tribes, respond to contamination of small and disadvantaged communities' drinking water sources, and improve the sustainability and resilience of small and disadvantaged communities' drinking water systems.", "Title IV addresses several other water quality and infrastructure issues by authorizing and revising activities and programs for the EPA and other federal agencies. Title IV extends, authorizes, and amends drinking-water-related activities and programs administered by EPA. Specifically, these provisions authorize WaterSense, an EPA-initiated voluntary water efficiency labeling program, and revise the Water Instructure Finance and Innovation Act (WIFIA) financial assistance program. The WIFIA program provides credit assistance for water infrastructure projects. Other provisions authorize grant programs for innovative water technology and for water sector workforce development. Title IV also amends the Clean Water Act to expand a municipal sewer overflow grant program to include stormwater management projects, reauthorize appropriations for that program, and direct EPA to establish a task force for stormwater management.", "With AWIA, the 115th Congress passed an omnibus water infrastructure and project authorization bill that affects several federal agencies. The act includes several provisions related to drinking water, with overarching themes involving drinking water infrastructure affordability and water system compliance capacity and sustainability."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Congress has long deliberated on drinking water quality and infrastructure, which have been brought to the forefront of national attention by several events. Such events include the detection of elevated lead levels in tap water in Flint, MI, and other cities; hurricanes and other natural disasters that damaged or destroyed community drinking water infrastructure; and local source water contamination events (e.g., chemical spills and algal blooms).", "Representatives of state drinking water agencies, private sector engineers, and others report that much of the nation's drinking water infrastructure is deteriorating, threatening public health, and increasing operations and maintenance costs. In 2012, the American Water Works Association (AWWA) reported that much of the drinking water infrastructure (more than 1 million miles of buried pipe) was constructed in the 19 th and 20 th centuries and is nearing the end of its useful life. While disagreement exists over the scope and costs of improvement and replacements, estimates of the funding needs are substantial.", "In March 2018, the U.S. Environmental Protection Agency (EPA) issued its sixth Drinking Water Infrastructure Needs Survey and Assessment. In this survey, EPA estimated that public water systems would need to invest $472.60 billion for drinking water capital improvements over the next 20 years to achieve compliance and ensure the provision of safe drinking water. Although all projects identified in the needs survey would promote health objectives, EPA reported that 12% of the 20-year estimated need was directly attributed to statutory compliance. The majority (88%) of needs are for ongoing investments, such as repair of aging drinking water infrastructure.", "In 2012, AWWA conducted a broader drinking water infrastructure survey that reported that the costs to replace aging drinking water infrastructure and expand water service to growing populations will increase to more than $1 trillion over the next 25 years. ", "Communities nationwide may face financial challenges as they manage the need to repair or replace aging drinking water infrastructure. As of early 2019, EPA's database indicated that some 50,000 public water systems in the United States regularly serve 25 or more of the same individuals. About 80% of these community water systems are relatively small, serving 3,300 or fewer people. These small systems have a narrow rate base from which to finance drinking water infrastructure improvements. In addition, older cities may face declining populations and declining utility revenues from which utilities can finance drinking water infrastructure repairs. In 2012, AWWA estimated that the costs to address aging drinking water infrastructure may as much as triple household water bills. Due to these financing concerns, communities may be challenged to protect water supplies, respond to contamination incidents, and afford projects to repair or replace aging drinking water infrastructure. ", "Congress deliberated on several of these drinking water infrastructure issues while developing America's Water Infrastructure Act of 2018 (AWIA; P.L. 115-270 ), enacted on October 23, 2018. Title I of the act, \"The Water Resource Development Act of 2018,\" authorizes a wide variety of water resource and infrastructure policies, programs, and projects for the U.S. Army Corps of Engineers (USACE). Water Resource Development Act bills are often considered on a biennial schedule and have primarily addressed USACE projects. Title III of AWIA primarily addresses hydropower activities of the Federal Energy Regulatory Commission. Title II and IV of the act include provisions that address EPA water infrastructure programs and other authorities. ", "This report analyzes the drinking water provisions of Title II and IV rather than providing a comprehensive summary of AWIA. ", "Title II constitutes the most comprehensive reauthorization of the Safe Drinking Water Act (SDWA) since 1996. It amends SDWA to promote compliance with SDWA requirements, reauthorize appropriations for the Drinking Water State Revolving Fund (DWSRF) program, expand program eligibilities, increase emphasis on assisting disadvantaged communities, make SDWA compliance more affordable, and improve consumer confidence in public water supplies. Title II also authorizes new grant programs to reduce lead contamination in school drinking water, assist small and disadvantaged communities, and develop public water system resilience, among other purposes. ", "Title IV addresses several other water quality and infrastructure issues by authorizing and revising activities and programs for EPA, the Bureau of Reclamation within the Department of the Interior, and other federal agencies. Title IV of AWIA extends, authorizes, and amends drinking-water-related activities and provisions administered by EPA. Specifically, these provisions authorize a water efficiency program and activities and revise the Water Infrastructure Finance Innovation Act (WIFIA) program, which provides credit assistance for water infrastructure projects. Title IV of AWIA also includes several amendments to the Clean Water Act to address stormwater by expanding a municipal sewer overflow grant programs to include stormwater management projects, reauthorizing appropriations for said municipal sewer overflow grant program, and directing EPA to establish a task force for stormwater management. ", "The first section of this report provides select legislative background on AWIA. The second section describes the reauthorizations, revisions, and additions to SDWA. The third section discusses a provision in AWIA that addresses requirements that apply to federal financial assistance for drinking water improvements. The fourth section describes a provision in AWIA that addresses assistance for drinking water repairs in disaster areas. The fifth section includes the revisions in AWIA to federal water infrastructure financial assistance programs. The final section provides a discussion of the provisions of AWIA that address water efficiency. In addition, the appendices contain tables of ", "plans, reports, and regulations required by AWIA; cross-references of the AWIA provisions, provisions in SDWA, and the U.S. Code citations; and summaries of the other EPA-related provisions of AWIA that are not discussed in this report, such as the stormwater provisions in Title IV. "], "subsections": [{"section_title": "AWIA: Legislative Development and Background", "paragraphs": ["Drinking water infrastructure and related topics received congressional attention during the 115 th Congress. AWIA combines provisions from several bills that the 115 th Congress considered. Numerous bills were introduced to amend SDWA to address drinking water regulation and infrastructures issues, with particular focus on the technical, managerial, and financial challenges facing small and disadvantaged communities. ", "AWIA Title II, entitled Drinking Water System Improvement, broadly parallels the Drinking Water System Improvement Act of 2017 ( H.R. 3387 ; H.Rept. 115-380 ). This SDWA reauthorization bill would have authorized activities and revised existing law to improve water systems' technical, managerial, financial capacity, and consumer confidence and facilitate communities' access to financial assistance for drinking water infrastructure improvements. In addition, this bill would have reauthorized appropriations for a key drinking water infrastructure financial assistance program and revised that program to help communities access assistance.", "Congress also considered the USACE-focused Water Resources Development Act of 2018 ( H.R. 8 ) in the House and, in the Senate, America's Water Infrastructure Act ( S. 2800 ), a broader water resources infrastructure bill that included revisions to water infrastructure programs administered by EPA. Both bills contained provisions that would have authorized USACE projects and studies for water resource development, including flood control, navigation improvements, and aquatic ecosystem restoration activities. ", "The House incorporated selected provisions of H.R. 3387 , H.R. 8 , and S. 2800 into S. 3021 . S. 3021 , as amended and renamed, passed the House on September 13, 2018. The Senate agreed to the House amendments to S. 3021 and passed the bill on October 10, 2018. The President signed the bill on October 23, 2018, and it became P.L. 115-270 .", "Table 1 identifies the amounts authorized to be appropriated in the drinking-water-related provisions of AWIA. For a summary of deadlines for reports, regulations, and other activities related to drinking water as provided for in AWIA, see Appendix A ."], "subsections": []}]}, {"section_title": "AWIA Amendments to the Safe Drinking Water Act", "paragraphs": ["Several provisions of AWIA Title II, \"Drinking Water System Improvement,\" amend SDWA to revise existing drinking water programs, reauthorize appropriations, and establish new drinking water infrastructure grant programs.", "SDWA authorizes the regulation of contaminants in public water systems. Enacted in 1974, the act was last broadly amended in 1996. The act is implemented through programs that (1) establish national primary drinking water regulations and monitoring and reporting requirements for contaminants present in water delivered by public water systems, (2) promote water system compliance through technical and financial assistance and capacity development programs, and (3) address public water systems' preparedness for emergencies. The act established a federal-state partnership in which states, tribes, and territories may be delegated primary implementation and enforcement authority (i.e., primacy) for the drinking water program. ", "One key component of SDWA is the requirement that EPA establish national primary drinking water regulations for contaminants that may adversely affect human health and are likely to be present in public water supplies. EPA has issued regulations for more than 90 contaminants. These include numerical standards or treatment techniques for drinking water disinfectants and their byproducts, microorganisms, radionuclides, organic chemicals, and inorganic chemicals.", "The SDWA Amendments of 1996 ( P.L. 104-182 ) reauthorized appropriations for most SDWA programs through FY2003. Although the authority has expired for most appropriations, Congress has continued to appropriate funds for the ongoing SDWA programs. Even though the authorization of appropriations may expire, program authority (i.e., an agency's \"enabling\" authority) does not expire unless there is a \"sunset\" date for that authority or if Congress repeals it through subsequent laws. "], "subsections": [{"section_title": "Drinking Water State Revolving Fund Program", "paragraphs": ["Authorized in 1996, the DWSRF program provides federal financial assistance to communities to finance drinking water infrastructure improvements. SDWA Section 1452 authorizes EPA to make annual grants to states to capitalize their state revolving loan fund. The statute requires states to provide a 20% match. States may use DWSRF financing for public water system projects needed to comply with federal drinking water standards and address risks to human health. The primary type of DWSRF financial assistance are low interest rate loans. SDWA Section 1452 authorizes states to provide additional subsidization (including forgiveness of principal) to disadvantaged communities. The federal capitalization grants together with state funds (e.g., state match, loan repayments, leveraged bonds, and other state sources) are intended to build a sustainable source of drinking water infrastructure funding for the state. The authorization of appropriation for DWSRF expired in FY2003. Congress has continued to provide funds for the DWSRF program through annual appropriations.", "From FY1997 through FY2018, Congress appropriated over $23.33 billion for the DWSRF program. The appropriation for DWSRF program generally ranged between $820.0 million in FY2000 and $1.39 billion in FY2010. ", "Table 2 includes historical appropriations for the DWSRF program."], "subsections": [{"section_title": "DWSRF Program Revisions (AWIA Sections 2002, 2015, and 2022)", "paragraphs": ["AWIA makes the most substantial revisions to the DWSRF provisions of SDWA since the program was authorized in 1996. These revisions expand the eligible uses of DWSRF financial assistance, provide states with additional flexibility to administer the DWSRF program, and include provisions intended to make DWSRF assistance more accessible to public water systems. ", "AWIA Section 2015(a) amends SDWA to expressly state that DWSRF funds can be used for projects to replace or rehabilitate aging treatment, storage, or distribution systems. Under EPA guidance, these replacement and rehabilitation projects have been eligible for financial assistance from the DWSRF if needed to protect public health. According to EPA's needs survey, this category of projects accounts for 66.1% of the estimated drinking water infrastructure need. Prior to AWIA, these activities were not previously explicitly identified in statute.", "Section 2015 also revises existing DWSRF provisions that address financial assistance for disadvantaged communities. These amendments increase the portion of a state's capitalization grant that states may dedicate to additional subsidization and extend the amortization period for loans made to disadvantaged communities. Before AWIA, states could use 30% of their annual capitalization grants to subsidize loans for disadvantaged communities. Section 2015(c) of AWIA increases that proportion to 35% while conditionally requiring states to use at least 6% of their capitalization grant for these subsidies. The section also amends the SDWA DWSRF provisions to extend the amortization period for loans made to disadvantaged communities from 30 to 40 years. ", "Section 2015(d) of AWIA also extends the repayment and amortization period for all projects financed by the DWSRF. Previously, SDWA required DWSRF financing recipients to pay the initial principal and interest payments within one year of project completion. This amendment extends the date of that initial payment to 18 months after project completion. This section also authorizes the extension of the amortization period for projects that receive DWSRF assistance from 20 to 30 years.", "Section 2015(e) requires EPA to evaluate and include the cost to replace lead service lines in the drinking water infrastructure needs survey, which EPA completes every four years. EPA uses the needs survey to allot the DWSRF appropriation among the states. In conducting the needs survey, EPA has not previously requested that public water systems report the cost to replace these lines. AWIA specifies that the cost to replace lead lines must be included in the needs survey (to the extent practicable), which may potentially affect some states' allotments of DWSRF capitalization grants.", "Section 2015(g) of AWIA requires EPA to gather specified information on DWSRF administration from state drinking water administrators and report to Congress on best practices for implementing the DWSRF to facilitate the application process and to improve DWSRF financial management and sustainability. "], "subsections": [{"section_title": "Source Water Assessment and Protection", "paragraphs": ["In 1996, Congress added source water assessment provisions to SDWA to encourage protection of drinking water sources. Section 1453 required states to develop source water assessment programs that delineate areas from which public water systems receive water and identify the origins of regulated contaminants to determine threats to water systems. States were authorized to fund these activities from 10% of their DWSRF capitalization grant for FY1996 and FY1997. Section 2015(f) of AWIA removes this fiscal year limitation and accordingly authorizes states to use a portion of their capitalization grant to fund these source water assessments or update an existing source water assessment.", "The 1996 SDWA amendments required states to conduct source water assessments as a condition of adopting modified monitoring requirements. However, the 1996 amendments did not authorize states to fund implementation of source water protection plans from their DWSRF capitalization grants. AWIA Section 2002 authorizes states to fund implementation of surface drinking water sources protection efforts and activities from the 10% set-aside of a state's annual DWSRF capitalization grant. ", "Source water protection is also addressed in the \" Protecting Source Water \" section of this report."], "subsections": []}, {"section_title": "Federal Cross-Cutting Requirements for DWSRF-financed Projects", "paragraphs": ["Recipients of DWSRF financial assistance must comply with cross-cutting requirements, which are other federal laws or executive orders that apply to certain federal financial assistance programs. Examples of federal cross-cutting requirements include environmental laws such as the National Environmental Policy Act and Endangered Species Act, executive orders on equal employment opportunities, and the National Historic Preservation Act. AWIA specifies two such requirements for DWSRF-financed projects: the use of American iron and steel and compliance with Davis-Bacon prevailing wage law.", "Section 2022 of AWIA renews the requirement to use American iron and steel products in DWSRF-financed projects for FY2019-FY2023. Previously, Congress has required American iron and steel for DWSRF-financed projects for specified fiscal years. The Water Infrastructure Innovation for the Nation (WIIN) Act ( P.L. 114-322 ) amended SDWA to require the use of American iron and steel for FY2017. In the American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ), Congress provided supplemental appropriations for the DWSRF and first required the use of \"Buy American\" iron and steel in projects financed from that supplemental appropriation. Since FY2014, Congress has regularly required the use of American iron and steel for DWSRF-financed projects through appropriations acts. ", "AWIA Section 2015(b) amends SDWA to add Davis-Bacon prevailing wage requirements for projects that receive DWSRF assistance. Since 2009, Congress has often applied Davis-Bacon prevailing wage requirements to funds for DWSRF-financed projects through annual appropriations acts. "], "subsections": []}]}, {"section_title": "Reauthorization of Drinking Water State Revolving Fund Capitalization Grants (AWIA Section 2023)", "paragraphs": ["AWIA Section 2023 amends SDWA to reauthorize DWSRF capitalization grants for FY2019-FY2021. The authorization of appropriations for the DWSRF are approximately", "$1.17 billion in FY2019, $1.30 billion in FY2020, and $1.95 billion in FY2021. ", "Appropriations for the DWSRF capitalization grants were $863.2 million for each of FY2016 and FY2017 and $1.16 billion for FY2018. The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), included $1.16 billion for DWSRF capitalization grants in FY2019. For a summary of historical DWSRF appropriation levels, see ", "Table 2 . "], "subsections": []}]}, {"section_title": "Drinking Water Grant Programs", "paragraphs": ["AWIA addresses several drinking water infrastructure issues by revising an existing grant program and authorizing additional grant programs. These grant programs are intended to (1) reduce lead in school drinking water, (2) support state responses to contamination or threats of contamination of drinking water supplies that may pose substantial endangerment to underserved communities, (3) assist disadvantaged communities in improving drinking water infrastructure resilience to natural hazards, and (4) improve drinking water systems serving Indian tribes in specified areas. "], "subsections": [{"section_title": "Voluntary School and Child Care Program Lead Testing Grant Program (AWIA Section 2006(a))", "paragraphs": ["Section 2006 of AWIA revises an existing grant program to address the sources of lead contamination in drinking water at schools. The 2016 WIIN Act repealed and replaced SDWA Section 1464(d) to direct EPA to establish the Voluntary School and Child Care Program Lead Testing Grant Program. This grant program provides funds to test for lead in drinking water at schools and child care programs through local education agencies (LEAs). The WIIN act authorized annual appropriations of $20.0 million for FY2017 through FY2021 for this grant program. The 115 th Congress appropriated $20.0 million for this grant program for FY2018 in the Consolidated Appropriations Act, 2018 (Section 430 of Title IV of P.L. 115-141 ). ", "Section 2006(a) of AWIA authorizes a $5.0 million increase (from $20.0 million to $25.0 million) in the amount authorized to be appropriated for the existing Voluntary School and Child Care Program Lead Testing Grant Program in FY2020 and FY2021. The Consolidated Appropriations Act, 2019, included a FY2019 appropriation of $25 million to support this grant program. Section 2006 also amends SDWA Section 1464(d) and directs EPA to give grant priority to LEAs in low-income areas.", "This provision requires EPA to provide technical assistance to lead testing grant recipients. The technical assistance may help identify opportunities to remediate lead contamination if found during the lead testing. Specifically, Section 2006(a) states that the technical assistance may include identification of (1) the source of lead contamination at the school or child care program, (2) state and federal grant programs to eliminate the source of lead contamination, (3) financing options for eliminating the source of lead contamination, and (4) nonprofit and other organizations to help the grantee eliminate the source of lead contamination. "], "subsections": []}, {"section_title": "Drinking Water Fountain Replacement for Schools (AWIA Section 2006(b))", "paragraphs": ["Section 2006(b) of AWIA establishes the Drinking Water Fountain Replacement for Schools program. This section requires EPA to implement a drinking water fountain replacement grant program for water fountains manufactured prior to 1988. EPA must prioritize grants based on LEAs' economic needs. This section authorizes the annual appropriation of $5.0 million for this grant program for FY2019-FY2021. "], "subsections": []}, {"section_title": "Drinking Water System Infrastructure Resilience and Sustainability Program (AWIA Section 2005(4))", "paragraphs": ["AWIA Section 2005 amends SDWA Section 1459A to authorize EPA to establish the Drinking Water System Infrastructure Resilience and Sustainability Program, which is a new grant program for small and disadvantaged public water systems. This section authorizes EPA to award grant funds to eligible public water systems for projects that increase resilience to natural hazards, including hydrologic changes. Eligible projects include those that increase water use efficiency, enhance water supply through watershed management or desalination, and increase energy efficiency in the conveyance or treatment of drinking water. This section authorizes appropriations of $4.0 million for each of FY2019 and FY2020 for this program."], "subsections": []}, {"section_title": "Grants to Respond to Imminent and Substantial Endangerment (AWIA Section 2005)", "paragraphs": ["Section 2005 also revises SDWA Section 1459A to add an EPA-administered grant program to help states assist underserved communities to respond to imminent and substantial contamination. This section authorizes EPA to make grants to requesting states to assist communities when contaminants are present in and pose an imminent and substantial threat to their public water system or underground drinking water sources and when EPA or a court of competent jurisdiction determines that the appropriate authorities have not responded in a sufficient manner. This section also authorizes EPA to recover funds from grant recipients who are found to have caused or contributed to the contamination addressed by the grant program. SDWA Section 1459A authorizes appropriations of $60.0 million to support this and other grant programs for small and disadvantaged communities authorized therein. "], "subsections": []}, {"section_title": "Drinking Water Infrastructure for Indians Tribes (AWIA Section 2001)", "paragraphs": ["Section 2001 of AWIA authorizes a new grant program at EPA for public water systems that serve federally recognized Indian tribes. Section 2001 directs EPA\u2014subject to appropriations\u2014to establish a drinking water infrastructure grant program for 20 eligible projects (10 projects in the Upper Missouri River Basin and 10 projects in the Upper Rio Grande River Basin) to improve water quality, water pressure, or water services. One of the 10 projects in the Upper Missouri River Basin must serve two or more tribes. To be eligible, the public water system must either be on a reservation or serve a federally recognized Indian tribe. Section 2001 authorizes an appropriation $20.0 million annually from FY2019 to FY2022 to support this program. "], "subsections": []}]}, {"section_title": "State Program Administration Grants (AWIA Section 2014)", "paragraphs": ["SDWA authorizes EPA to make grants to primacy states and territories to implement the public water system supervision program (PWSS). Although the authorization of appropriation for PWSS grants expired in FY2003, Congress has continued to appropriate funds for this program. While the appropriation amount has changed over time, since FY2014, Congress appropriated about $101 million annually for grants to states to support the PWSS program. States also use set-asides from the DWSRF capitalization grants and other state resources (e.g., state general funds and/or state-established fee programs) to support the PWSS program.", "In 2013, state drinking water administrators estimated that the states would require an additional $308.0 million per year to support the PWSS program. They attribute this funding gap to increased workload for water system supervision for an increased number of regulated contaminants. ", "Section 2014 of AWIA reauthorizes appropriations for the PWSS program for FY2020 and FY2021, increasing the authorized appropriation from $100.0 million to $125.0 million for these two fiscal years. "], "subsections": []}, {"section_title": "Information to Consumers", "paragraphs": ["Several provisions of AWIA amend SDWA to address consumer access to compliance data and the transparency of drinking water quality information. These provisions seek to increase the understandability of drinking water quality information provided to consumers, notify consumers more frequently about their drinking water quality, and expand existing monitoring requirements to gather additional data on occurrence of unregulated contaminants. "], "subsections": [{"section_title": "Improved Consumer Confidence Reports (AWIA Section 2008)", "paragraphs": ["Prior to AWIA, SDWA required public water systems to provide their customers with an annual consumer confidence report on their drinking water quality and SDWA compliance. Section 1414(c) of SDWA required public water system operators in the consumer confidence reports to include the level of regulated contaminants and their associated maximum contaminant level or action level.", "Section 2008 of AWIA revises the requirements for data included in the consumer confidence report. AWIA directs public water system operators to also report exceedances resulting in a treatment technique, other occurrences that required corrective action, corrosion control efforts, and any violations of SDWA that occurred during the monitoring period. The collection of this additional information expands the information captured in the consumer confidence report to include lead exceedances and associated lead treatment techniques. ", "AWIA Section 2008 also increases the frequency that operators of large public water systems (serving more than 10,000 consumers) produce and distribute consumer confidence reports from annually to biannually. This section also expressly authorizes public water system operators to transmit the consumer confidence report electronically."], "subsections": []}, {"section_title": "Strategic Plan to Address Compliance Monitoring Data (AWIA Section 2011)", "paragraphs": ["Section 2011 of AWIA requires EPA to develop a strategic plan to improve the accuracy and availability of monitoring data shared between public water systems, the primacy states, and EPA. The strategic plan must identify barriers to (1) ensuring the accuracy of reported data, (2) submitting data electronically, and (3) retrieving reported data. The plan must also recommend economically feasible and practical ways to transmit monitoring data. "], "subsections": []}, {"section_title": "Monitoring for Unregulated Contaminants (AWIA Section 2021)", "paragraphs": ["The 1996 amendments authorized a monitoring program for unregulated contaminants in public water supplies. The act requires EPA, every five years, to promulgate a rule requiring certain public water systems to monitor for up to 30 unregulated contaminants. Unregulated Contaminant Monitoring Rules (UCMRs) are used to gather national occurrence data to inform EPA's review of contaminants that may warrant regulation. For example, a 2012 UCMR (UCMR 3) required systems to test their water for the presence of six poly- and perfluoroalkyl substances, including perfluorooctanoic acid and perfluorooctanesulfonic acid. Prior to enactment of AWIA, SDWA required monitoring by all large public water systems (serving more than 10,000 consumers) and a representative sample of small public water systems (serving 10,000 consumers or fewer). For the 800 small public water systems sampled in UCMR 3, EPA funded the monitoring costs. AWIA Section 2021(b) reauthorized $10.0 million to be appropriated for each year for FY2019-FY2021 for this program. The authority to appropriate funds for the unregulated contaminant monitoring program expired in FY2003, although Congress has continued to appropriate funds for the program. ", "Section 2021(a) of AWIA expands unregulated contaminant monitoring requirements to include public water systems serving 3,300-10,000 individuals\u2014subject to the availability of appropriations for this purpose and lab capacity. This requirement enters into effect three years after the enactment date of AWIA (i.e., October 23, 2021). This section authorizes $15.0 million to be appropriated for each year from FY2019 through FY2021 to support the expanded monitoring. ", "Requiring monitoring by a larger number of public water systems for unregulated contaminants is intended to provide a more comprehensive assessment of the occurrence of unregulated contaminants in public water supplies. As of December 2018, EPA's database indicated that more than 5,000 public water systems serve from 3,301 to 10,000 individuals. This subset of systems serves more than 30 million individuals in total. The monitoring by these additional systems would provide more occurrence data to inform EPA's determination of whether a particular contaminant warrants a nationwide regulation."], "subsections": []}]}, {"section_title": "Compliance Capacity Development", "paragraphs": ["The 1996 SDWA amendments authorized programs to assist public water systems with SDWA compliance. Technical assistance, operator certification, and other programs seek to improve the technical, managerial, and financial capacity of public water systems to achieve and maintain compliance with drinking water regulations. Other provisions authorize incentives for SDWA compliance by encouraging consolidation of public water systems. AWIA authorizes new programs and revises authorities to further support and enhance public water system capacity to comply with SDWA."], "subsections": [{"section_title": "Asset Management (AWIA Section 2012)", "paragraphs": ["AWIA Section 2012 amends SDWA capacity development provisions (SDWA \u00a71420). This provision directs states to revise their capacity development strategies to include a description of how they will encourage public water systems to develop asset management plans. Asset management is a budgetary and planning process that public water systems may undertake to evaluate their capital assets and plan the maintenance of their infrastructure (e.g., pumps, motors, and piping) to ensure that the water system can fund the costs. Some urban water utilities and other stakeholders argue that asset management can help lower the overall operation and maintenance costs, as it may lead to fewer infrastructure failure incidents (e.g., pipe ruptures). Asset management is not statutorily required. EPA has issued educational materials and provided training for water systems that choose to develop an asset management plan. EPA and the U.S. Department of Agriculture (USDA) have also provided support to assist small water utilities with asset management. ", "This section further amends SDWA Section 1420 to require states to demonstrate their progress in encouraging public water systems to develop asset management plans. Every five years, EPA must review and update (if necessary) the asset management materials that EPA makes available. According to the House Energy and Commerce Committee Report ( H.Rept. 115-380 ), such asset management technical assistance will improve the economic sustainability of public water systems."], "subsections": []}, {"section_title": "Consolidation by Management Contract (AWIA Section 2009)", "paragraphs": ["Some public water systems may lack the technical, managerial, and financial capacity to meet regulatory standards, fund drinking water repairs or upgrades, identify or access source water, and manage budgetary constraints. Among other strategies, such systems may address these challenges by consolidating with or transferring ownership to another water system where feasible. EPA states that this type of restructuring can be effective in returning noncompliant public water systems to SDWA compliance or building technical, managerial, and financial capacity.", "The SDWA amendments of 1996 amended SDWA enforcement provisions to authorize limited enforcement relief as an incentive for noncompliant public water systems to consolidate with other systems. If a system faces a particular compliance violation, SDWA Section 1414(h) authorizes public water systems to submit a plan to primacy states or EPA for the physical consolidation or the consolidation of management and administrative functions with another public water system or the transfer of ownership of a public water system. If the plan to consolidate or transfer ownership is approved by a primacy state or EPA, enforcement action against that public water system for the specified violation would not be taken for two years.", "Section 2009 of AWIA provides that, in addition to the physical or management consolidation or transfer of ownership, a public water system may also submit a plan to execute a contractual agreement with another public water system to manage the noncompliant public water system."], "subsections": []}, {"section_title": "Consolidation Assessments (AWIA Section 2010)", "paragraphs": ["Section 2010 of AWIA authorizes primacy states or EPA to require, under certain circumstances, public water systems to assess options for consolidation or transfer of ownership. This section specifies that the required assessments be proportionate to the size of public water system. Therefore, a small public water system would complete an assessment that is less complex than a larger system. Any public water systems that consolidate, as a result of an assessment, are eligible for financial assistance from the DWSRF. ", "This section also provides limited liability protection for the owner or operator who has a state-approved consolidation plan. In the consolidation plan, the owner or operator of public water system must identify any potential or existing liabilities from specific violations and their available assets. This section limits the liability of a consolidating system to the amount of its assets and to the liabilities identified in the plan. This section also requires EPA to promulgate regulations to implement these provisions."], "subsections": []}, {"section_title": "Intractable Water Systems (AWIA Section 2003)", "paragraphs": ["Section 2003 of AWIA defines intractable water system as a public water system serving fewer than 1,000 individuals that the owner or operator effectively abandoned for a range of reasons, including financial default, significant noncompliance with SDWA, or failure to maintain facilities. Section 2003 directs EPA, in collaboration with the USDA and the U.S. Department of Health and Human Services, to conduct a study on these systems to gather more information about intractable water systems and barriers to deliver potable water."], "subsections": []}, {"section_title": "Water Infrastructure Workforce Development (AWIA Section 4304)", "paragraphs": ["Section 4304 of AWIA seeks to address concerns about the rate for replacing workers by establishing a water-specific workforce development competitive grant program. While estimates vary, the increasing rate of retirement among water sector employees has generated interest in water sector workforce development. A 2010 report from AWWA and the Water Research Foundation estimated that 30%-50% of water sector employees will retire over the following 10 years. Similarly, the Department of Labor's Bureau of Labor Statistics projected that annually 8.2% of water operators will need to be replaced between 2016 and 2026. In 2018, the U.S. Government Accountability Office (GAO) also concluded that EPA could take additional steps to address water sector workforce development and succession planning. ", "Section 4304 directs EPA, in consultation with USDA, to establish the Innovative Water Infrastructure Workforce Development program. It authorizes EPA to award grants to institutions of higher education, nonprofit organizations, or labor organizations for a wide range of activities including bridge programs for water utilities, educational programs to increase public awareness of career opportunities in the water sector, and leadership development. This section authorizes appropriations of $1.0 million annually for FY2019 and FY2020 to support this grant program."], "subsections": []}]}, {"section_title": "Protecting Source Water", "paragraphs": ["As noted in the \" Source Water Assessment and Protection \" section of this report, AWIA makes other amendments to the DWSRF provisions related to source water. It authorizes the use of DWSRF set-asides for source water assessment and protection activities. In addition, AWIA reauthorizes appropriations to a source water program and revises certain notification requirements to better enable public water systems to know of and respond to contamination. "], "subsections": [{"section_title": "Source Water Petition Programs (AWIA Section 2016)", "paragraphs": ["Section 2016 of AWIA reauthorizes $5.0 million in annual appropriations for FY2020 and FY2021 to support the source water protection partnership petition program (SDWA \u00a71454). SDWA Section 1454 authorized states to establish this program, in which public water system operators and the community members request state assistance to form a voluntary partnership to prevent source water degradation. The authorization of appropriation for this program had expired in FY2003. "], "subsections": []}, {"section_title": "Planning for and Responding to Chemical Releases (AWIA Section 2018)", "paragraphs": ["AWIA Section 2018 amends the Emergency Planning and Community Right-to-Know Act of 1986 (EPCRA; P.L. 99-499 ) to enhance awareness among community water system operators of", "a hazardous substance or an extremely hazardous substance released into the drinking water source of the water system and a broader group of hazardous chemicals stored at facilities located near their water system to help facilitate emergency preparedness in the event of a release. ", "EPCRA Section 312 is intended to enhance emergency preparedness in an event of a chemical release. This provision requires a facility operator or owner to report hazardous chemicals present at their site in excess of certain thresholds to the State Emergency Response Commission (SERC), relevant Local Emergency Planning Committee (LEPC), and the local fire department with jurisdiction over the facility. Section 312(e) authorizes any person to request specified information about chemicals stored at a specified facility from that SERC or LEPC. Section 304 of EPCRA addresses notification when a release occurs. This provision requires a facility operator or owner to notify the SERC and the relevant LEPC of releases of a smaller subset of hazardous chemicals, specifically hazardous substances and other extremely hazardous substances. EPCRA Section 325 authorizes EPA to fine facility owners or operators if they do not comply with these emergency planning and release notification requirements, in addition to other requirements in EPCRA. ", "Section 2018 of AWIA amends EPCRA Section 304 to require the SERC to notify the state drinking water agency of releases of hazardous substances and other extremely hazardous substances. This provision requires the state drinking water agency in turn to forward the notice to community water systems with source waters that are affected by the release. In states where EPA retains SDWA primacy, AWIA Section 2018 requires the SERC to provide notice to community water systems with source waters affected by the release of hazardous substances and extremely hazardous substances as defined by EPCRA. The EPCRA provisions added by AWIA would not change a facility owner or operator's reporting requirements, and EPCRA enforcement provisions apply only to facility owners or operators. ", "In addition, Section 2018 amends EPCRA Section 312 to expressly authorize community water systems operators to request information on hazardous chemicals at facilities from SERC or LEPC. Access to this information existed in EPCRA prior to this amendment, but AWIA Section 2018 amends EPCRA to expressly include community water systems."], "subsections": []}]}, {"section_title": "Public Water System Resilience and Sustainability (AWIA Section 2013)", "paragraphs": ["AWIA Section 2013 amends SDWA to address the resilience and sustainability of water systems to both natural and intentional threats. This provision replaces SDWA Section 1433, which was added by the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 ( P.L. 107-188 ; Title IV). Prior to AWIA, SDWA Section 1433 required water systems to assess their vulnerabilities to terrorist or other intentional acts and, based on the assessment, prepare emergency response plans. The statute required public water system operators to certify their assessments by a specified deadline but did not require public water systems to update their risk assessments or emergency response plans. ", "Extreme weather events, such as hurricanes and wildfires, may require an emergency response to repair drinking water quality and supply. Accordingly, some stakeholders have testified that drinking water systems should address the risks of weather events and other natural hazards in their assessment and planning deliberations. EPA, with water partners, has developed tools and provided training and technical assistance to water utilities to increase their resilience to extreme weather events.", "AWIA Section 2013 expands the risk types addressed in a public water system's assessment to include risks of natural hazards and malevolent acts. In addition, community water systems are required to evaluate the resilience of their current physical infrastructure and their management practices, including financial capacity to respond to these risks. Based on the assessment, public water systems must also develop emergency response plans that address the risks and resilience issues that systems may face. Public water systems serving 3,300 or more persons must review their assessments every five years and update them if needed. This provision requires public water systems to coordinate with the relevant LEPC when preparing or revising a risk assessment or emergency response plan. The assessments and response plans are voluntary for public water systems serving fewer than 3,300 people. These public water systems must certify their assessments and submit the certifications to EPA by deadlines specific to the communities' size. ", "To facilitate compliance with this section, Section 2013 authorized public water systems to use technical standards developed by third-party organizations to structure the assessment and plans. Federal agencies were first authorized to use technical standards developed by third-party organizations, when appropriate, in 1995. Some argue that this alternative route to compliance may help minimize federal administrative burdens while recognizing the efforts of third-party organizations in developing assessment and planning standards. Section 2013 authorized $25.0 million to be appropriated each year for FY2020 and FY2021 for EPA to make grants to public water systems to plan or implement projects to address their system's resiliency.", "AWIA Section 2013 requires EPA to issue guidance and provide technical assistance on conducting assessments and preparing emergency response plans for public water systems serving fewer than 3,300 individuals. Section 2013 authorizes appropriations of $10.0 million for grants to public water systems serving fewer than 3,300 people and grants to nonprofit organizations to support these activities. "], "subsections": []}, {"section_title": "Review of Technologies (AWIA Section 2017)", "paragraphs": ["Section 2017 of AWIA adds SDWA Section 1459D to require EPA to review approaches or technologies that help ensure physical integrity of drinking water systems, address contamination, develop alternative water sources, and facilitate source water protection. In conducting this review, EPA is required to evaluate equipment and technologies for their cost, efficacy, and availability. The review of technologies explicitly includes approaches related to distribution systems (e.g., leak prevention, corrosion control, metering), intelligent systems that address the distribution systems, point-of-entry or point-of-use devices, real-time contaminant monitoring, and non-traditional sources of water. This section authorizes appropriation of $10.0 million in FY2019 for this purpose."], "subsections": []}]}, {"section_title": "Report on Federal Cross-Cutting Requirements (AWIA Section 2019)", "paragraphs": ["AWIA Section 2019 requires GAO to report to Congress on any duplicative or substantially similar requirements of state and local environmental law to federal cross-cutting requirements. ", "In 2015, GAO concluded that the existing federal financing mechanisms to rehabilitate or replace aging water infrastructure are complex and that small water systems lack the technical expertise to apply for federal financial assistance. Regarding federal cross-cutting requirements, GAO reported that water systems often face duplicative state requirements when applying for financial assistance for drinking water infrastructure. Representatives of public water systems have testified that compliance with federal cross-cutting requirements is burdensome, as DWSRF projects must often comply with similar state and local requirements."], "subsections": []}, {"section_title": "Disaster Assistance (AWIA Section 2020)", "paragraphs": ["Section 2020 of AWIA authorizes the appropriation of $100.0 million, available for 24 months, for grants to certain public water systems in specified disaster areas. Section 2020 of AWIA allows additional subsidization (e.g., grants, forgiveness of loan principal, negative interest rate loans, or zero-interest rate loans) for eligible public water systems regardless of whether they meet the statutory designation of disadvantaged. Section 2020(a)(3) defines eligible public water system as a water system that (1) serves an area for which the President declared a major disaster (after January 1, 2017) and provided disaster assistance or (2) is capable of extending drinking water services to underserved areas. Projects eligible for these subsidies are those that restore or increase compliance with national drinking water standards, including expanding drinking water service to underserved areas.", "To access this subsidization, this section requires states to submit a supplemental intended use plan with relevant information on the public water system project, the intended use of the funds, estimated cost, and projected start date. This section also exempts Puerto Rico from the 20% state-match for any funds received under this section, which is generally required by SDWA Section 1452(e)."], "subsections": []}, {"section_title": "Water Infrastructure Finance and Innovation Act (WIFIA) Program", "paragraphs": ["The Water Resources Reform and Development Act of 2014 ( P.L. 113-121 ) included WIFIA, which authorized both EPA and USACE to administer a five-year pilot program to help finance a broad range of water infrastructure projects. The EPA-administered WIFIA program provides credit assistance (e.g., direct loans) to eligible entities for different types of drinking water and wastewater infrastructure projects (e.g., desalination or water recharge). Eligible projects for EPA-administered assistance from WIFIA include projects that are eligible for the Clean Water State Revolving Fund (CWSRF) and the DWSRF. However unlike the DWSRF, WIFIA-financed projects generally need not be associated with SDWA compliance or public health goals. Qualifying projects for WIFIA assistance must generally cost $20.0 million or more. In an effort to encourage nonfederal and private sector financing, WIFIA assistance generally cannot exceed 49% of project costs.", "In FY2017, Congress appropriated $25.0 million to cover EPA's subsidy costs of WIFIA loans and $5.0 million for administrative purposes. For FY2018, Congress provided $63.0 million for the EPA-administered WIFIA program in the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ). Of this amount, Congress directed $55.0 million for WIFIA projects, which EPA estimated would be leveraged into $5.50 billion of credit assistance. EPA began issuing loans in 2018. The Consolidated Appropriations Act, 2019, included $60.0 million to cover EPA's subsidy costs of WIFIA loans and $8.0 million to support program administration. These appropriations are available until expended. "], "subsections": [{"section_title": "WIFIA Program Revisions (AWIA Section 4201)", "paragraphs": ["Section 4201 of AWIA amends WIFIA provisions to remove the pilot designation from the program, reauthorizes appropriations, and revises provisions related to program administration. Section 4201 authorizes appropriations of $50.0 million each year for FY2020 and FY2021 for EPA. This section increases the amount of appropriations that EPA can use for administrative purposes, including technical assistance for projects, from $2.2 million to $5 million. AWIA prohibits repayment of WIFIA assistance from the federal grants that fund the CWSRF and the DWSRF.", "Several revisions to the WIFIA program address state finance authorities' use of WIFIA financial assistance. AWIA authorizes an additional $5 million to be appropriated (under certain conditions, discussed below) for WIFIA to provide credit assistance to state finance authorities to support combined projects eligible for assistance from the CWSRF and DWSRF. When this additional appropriation is made, Section 4201(b) of AWIA authorizes state financing authorities to use WIFIA financial assistance to cover 100% of project costs. As discussed earlier, WIFIA financing generally supports up to 49% of project costs. ", "The additional $5.0 million appropriation is available only to the extent that both the CWSRF and the DWSRF are funded at FY2018 levels or 105% or more of the previous year's funding, whichever is greater, and when EPA receives at least $50.0 million in WIFIA appropriations. ", "Section 4201(b)(2) of AWIA clarifies that state finance authorities cannot pass WIFIA application fees on to parties that utilize the credit assistance. Prior to AWIA, WIFIA projects required two letters of credit from rating agencies. Section 4201(a)(2) of AWIA authorizes projects from state finance authorities to supply one letter of credit. In addition, AWIA requires EPA to review and approve or provide guidance on WIFIA projects submitted by state finance authorities within 180 days of submittal. ", "AWIA Section 4201authorizes EPA to enter into agreements with other relevant agencies authorized to provide WIFIA assistance to allow EPA to administer the WIFIA program for another authorized agency. Relatedly, Section 4301 of AWIA specifically directs EPA and the commissioner of the Bureau of Reclamation to enter into such an agreement. Such agreements may help prevent the duplication of WIFIA-related administrative functions across federal agencies. ", "AWIA also requires GAO to report to Congress within three years of enactment on all projects that receive WIFIA assistance."], "subsections": []}]}, {"section_title": "WaterSense (AWIA Section 4306)", "paragraphs": ["Initiated by EPA in 2006, WaterSense is a voluntary labeling program that identifies and promotes water-efficient products, buildings, and services. Prior to the enactment of AWIA, WaterSense was not explicitly authorized in law. It is similar to the Department of Energy's (DOE) EnergyStar voluntary labeling program to promote energy efficiency.", "Section 4306 of AWIA amends the Energy Policy Act of 2005 ( P.L. 109-58 ) to establish the WaterSense program at EPA. Section 4306 authorizes EPA to establish specifications that products and services must meet to earn a WaterSense label, some of which differ from the original program. AWIA stipulates that products and services earning the WaterSense label must reduce water use, decrease strain on water systems, conserve energy, and preserve water resources. Section 4306 requires EPA to set detailed performance criteria for water efficiency. Every six years, EPA must review the water efficiency criteria and update them as necessary. AWIA authorizes EPA to establish the WaterSense performance criteria based on technical specifications and testing protocols of relevant voluntary consensus standards organizations. It also requires EPA to consider reviewing and revising WaterSense performance criteria established prior to January 1, 2012, by December 31, 2019. ", "Section 4306 establishes EPA's oversight responsibilities for the WaterSense program. These responsibilities include auditing the use of the WaterSense label, testing protocols, and managing the accreditation process for WaterSense certification bodies. This section directs EPA and DOE to coordinate to prevent duplicative or conflicting requirements in the WaterSense and EnergyStar programs. ", "AWIA explicitly requires the inclusion of certain products and services in the WaterSense program. These include irrigation technologies and services, point-of-use water treatment devices, plumbing products, water reuse and recycling technologies, various landscaping and gardening products and services, whole house humidifiers, and water-efficient buildings. "], "subsections": []}, {"section_title": "Innovative Water Technology Grant Program (AWIA Section 2007)", "paragraphs": ["Section 2007 of AWIA directs EPA to administer a competitive grant program to accelerate the development of innovative water technology that addresses drinking water supply, quality, treatment or security. Among the selection criteria for grants, EPA must prioritize projects that provide additional drinking water supplies with minimal environmental impact. ", "Eligible grant recipients include research institutions, regional water organizations, nonprofit organizations, and institutions of higher education, which can partner with private entities. The maximum single grant award for any one recipient is $5.0 million. Grant recipients may use these grants for developing, testing, or deploying water technologies or providing technical assistance to deploy existing innovative water technologies. EPA must submit a report to Congress that details advancements in water technology associated with this grant program. This section authorizes $10.0 million to be appropriated each year for FY2019 and FY2020 to support this grant program. "], "subsections": []}, {"section_title": "Conclusion", "paragraphs": ["With AWIA, the 115 th Congress passed an omnibus water infrastructure and project authorization bill that affects several federal agencies. The act includes the most comprehensive amendments to the Safe Drinking Water Act since 1996, with overarching themes involving drinking water infrastructure affordability and water system compliance capacity and sustainability. The amendments authorize new competitive grant programs and activities that are broadly intended to help communities afford drinking water infrastructure improvements needed to achieve compliance with federal drinking water standards and protect public health. Other new SDWA programs authorize grants for projects and activities that (1) improve drinking water system sustainability and resiliency, (2) develop water system capacity to respond to contamination or other events, and (3) address lead in school drinking water. ", "AWIA's DWSRF provisions constitute the first major revision of the program since its establishment in 1996. As with the competitive grant programs, these revisions are intended to facilitate communities' access to DWSRF financial assistance. Among other purposes, AWIA's DWSRF revisions authorize the use of DWSRF funds for (1) source water protection activities, (2) providing additional financing flexibility for public water systems, (3) replacing and repairing aging infrastructure, and (4) increasing subsidies for disadvantaged communities. ", "AWIA authorizes additional water infrastructure assistance with revisions to the WIFIA program. In addition to making the program permanent, AWIA authorizes an additional appropriation for WIFIA assistance under certain conditions. These revisions further authorize EPA to partner with Bureau of Reclamation and other relevant agencies to allow for implementation of WIFIA credit assistance for a broader range of eligible water infrastructure projects. ", "Appendix A. Reports, Plans, and Regulations in AWIA ( P.L. 115-270 )", "Appendix B. Cross Reference: AWIA, SDWA, and U.S. Code Sections", "Appendix C. Other EPA-Related Provisions of\u00a0AWIA"], "subsections": []}]}}
{"id": "R43244", "title": "Women in Congress: Statistics and Brief Overview", "released_date": "2019-04-09T00:00:00", "summary": ["A record 131 women currently serve in the 116th Congress. There are 106 women serving in the House (including Delegates and the Resident Commissioner), 91 Democrats and 15 Republicans. There are 25 women in the Senate, 17 Democrats and 8 Republicans.", "These 131 women surpass the previous record of 115 women at the close of the 115th Congress. The numbers of women serving fluctuated during the 115th Congress; there were 109 women initially sworn in, 5 women subsequently elected to the House, 2 appointed to the Senate, and 1 woman in the House who died in office.", "The very first woman elected to Congress was Representative Jeannette Rankin (R-MT, served 1917-1919 and 1941-1943). The first woman to serve in the Senate was Rebecca Latimer Felton (D-GA). She was appointed in 1922 and served for only one day. Hattie Caraway (D-AR, served 1931-1945) was the first Senator to succeed her husband and the first woman elected to a six-year Senate term.", "A total of 365 women have ever been elected or appointed to Congress, including 247 Democrats and 118 Republicans. These figures include six nonvoting Delegates (one each from Guam, Hawaii, the District of Columbia, and American Samoa, and two from the U.S. Virgin Islands), as well as one Resident Commissioner from Puerto Rico. Of these,", "309 (211 Democrats, 98 Republicans) women have been elected only to the House of Representatives; 40 (25 Democrats, 15 Republicans) women have been elected or appointed only to the Senate; 16 (11 Democrats, 5 Republicans) women have served in both houses; 47 African American women have served in Congress (2 in the Senate, 45 in the House), including 25 serving in the 116th Congress; 13 Asian Pacific American women have served in Congress (10 in the House, 1 in the Senate, and 2 in both the House and Senate), including 10 in the 116th Congress; 20 Hispanic women have served in Congress (including 1 in the Senate), including 15 in the 116th Congress; and 2 American Indian women, both currently serving in the House, have served in Congress.", "In the 116th Congress, eight women serve as committee chairs (six in the House, two in the Senate).", "This report includes historical information, including the number of women in Congress over time; means of entry to Congress; comparisons to international and state legislatures; records for tenure; firsts for women in Congress; women in leadership; African American, Asian Pacific American, Hispanic, and American Indian women in Congress; as well as a brief overview of research questions related to the role and impact of women in Congress. The Appendix provides details on the total number of women who have served in each Congress, including information on changes within a Congress. The numbers in the report may be affected by the time periods used when tallying any particular number. The text and notes throughout the report provide details on time periods used for the tallies and the currency of the information.", "For additional biographical information\u2014including the committee assignments, dates of service, listings by Congress and state, and (for Representatives) congressional districts of the 365 women who have been elected or appointed to Congress\u2014see CRS Report RL30261, Women in Congress, 1917-2019: Service Dates and Committee Assignments by Member, and Lists by State and Congress, by Jennifer E. Manning and Ida A. Brudnick."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Including the first woman to serve in 1917, a total of 365 women have been elected or appointed to serve in the U.S. Congress. That first woman was Jeannette Rankin (R-MT), who was elected on November 9, 1916, to the 65 th Congress (1917-March 4, 1919). ", " Table 1 details this service by women in the House, Senate, and both chambers.", "The 116 th Congress began with 131 women. Table 2 shows that women account for", "23.7% of voting Members in the House and Senate (127 of 535); 24.2% of total Members in the House and Senate (131 of 541, including the Delegates and Resident Commissioner); 23.4% of voting Representatives in the House (102 of 435); 24.0% of total Members in the House (106 of 441, including the Delegates and Resident Commissioner); and 25.0% of the Senate.", "This report includes historical information, including the (1) number and percentage of women in Congress over time; (2) means of entry to Congress; (3) comparisons to international and state legislatures; (4) records for tenure; (5) firsts for women in Congress; (6) African American, Asian Pacific, Hispanic American, and American Indian women in Congress; and (7) women in leadership. It also provides a brief overview of research questions related to the role and impact of women in Congress. ", "For additional biographical information\u2014including the names, committee assignments, dates of service, listings by Congress and state, and (for Representatives) congressional districts of the women who have served in Congress\u2014see CRS Report RL30261, Women in Congress, 1917-2019: Service Dates and Committee Assignments by Member, and Lists by State and Congress , by Jennifer E. Manning and Ida A. Brudnick. ", "Since the 65 th Congress (1917-1918), the number of women serving in Congress generally increased incrementally, and on a few occasions, decreased. In an exception to these incremental changes, the elections in 1992, which came to be known popularly as the \"Year of the Woman,\" represented a jump in the number of women in Congress. As a result of this 1992 election, whereas the 102 nd Congress (1991-1992) concluded with 34 women, on the first day of the 103 rd Congress (1993-1994), the number of women in Congress increased 58.8%, to 54 women. More recently, the 115 th Congress concluded with 115 women, and on the first day of the 116 th Congress, the number of women in Congress increased 13.9%, to 131 women.", " Figure 1 shows the changes in the number of women serving in each Congress. For a table listing the total number of women who have served in each Congress, including information on turnover within a Congress, please see Table A-2 in the Appendix .", " Figure 2 shows division of men and women in Congress historically and in the 116 th Congress. ", "As seen in Figure 3 , 49 states (all except Vermont), 4 territories (American Samoa, Guam, Puerto Rico, and the U.S. Virgin Islands), and the District of Columbia have been represented by a woman in Congress at some time since 1917.", "Four states (Alaska, Mississippi, North Dakota, and Vermont) have never elected a woman to the House.", "Eighteen states have never been represented by a female Senator. Fourteen states have been represented by one female Senator, 12 have sent two, and 6 states have sent three. "], "subsections": []}, {"section_title": "How Women Enter Congress: Regular Elections, Special Elections, and Appointments", "paragraphs": ["Pursuant to Article I, Section 2, clause 4 of the U.S. Constitution, all Representatives enter office through election, even those who enter after a seat becomes open during a Congress. By contrast, the Seventeenth Amendment to the Constitution, which was ratified on April 8, 1913, gives state legislatures the option to empower governors to fill Senate vacancies by temporary appointment.", "The 56 women who have served in the Senate entered initially through three different routes:", "34 entered through regularly scheduled elections, 17 were appointed to unexpired terms, and 5 were elected by special election. ", "As Figure 4 shows, approximately 70% (39) of all women who have served in the Senate initially entered Senate service by winning an election (regular or special). Approximately 30% of women Senators entered the Senate initially through an appointment. Of the 17 women who entered by appointment, 10 served less than one year. ", "Since the ratification of the Seventeenth Amendment to the Constitution in 1913, nine years prior to the first appointment of a woman to fill a Senate vacancy, 200 Senators have been appointed. Of these appointees, 91.5% (183) have been men, and 8.5% (17) were women."], "subsections": []}, {"section_title": "Women in Congress as Compared with Women in Other Legislative Bodies", "paragraphs": [], "subsections": [{"section_title": "International Perspective", "paragraphs": ["The current total percentage of voting female representation in Congress (23.7%) is slightly lower than averages of female representation in other countries. According to the Inter-Parliamentary Union (IPU), as of January 1, 2019, women represented 24.3% of national legislative seats (both houses) across the entire world. In the IPU database of worldwide female representation, the United States ties for 78 th worldwide for women in the lower chamber. The Nordic countries (Sweden, Iceland, Finland, Denmark, and Norway) lead the world regionally with 42.3% female representation in national legislatures. "], "subsections": []}, {"section_title": "State-House Perspective", "paragraphs": ["The percentage of women in Congress also is lower than the percentage of women holding seats in state legislatures. According to the Center for American Women and Politics, in 2019, \"2,117, or 28.7% of the 7,383 state legislators in the United States are women. Women currently hold 504, or 25.6%, of the 1,972 state senate seats and 1,613, or 29.8%, of the 5,411 state house or assembly seats.\" Across the 50 states, the total seats held by women range from 13.8% in Mississippi to 50.8% in Nevada.", "Since the beginning of the 92 nd Congress (1971-1972), the first Congress for which comparative state legislature data are available, the total percentage of women in state legislatures has eclipsed the percentage of women in Congress (see Figure 5 ). The greatest disparity between the percentages of female voting representation in state legislatures as compared with Congress occurred in the early 1990s, when women comprised 6.0% of the total Congress in the 102 nd Congress (1991-1992), but 18.3% of state legislatures in 1991. The gap has since narrowed. "], "subsections": []}]}, {"section_title": "Female Election Firsts in Congress", "paragraphs": ["First woman elected to Congress. Representative Jeannette Rankin (R-MT, 1917-1919, 1941-1943). First woman to serve in the Senate. Rebecca Latimer Felton (D-GA) was appointed in 1922 to fill the unexpired term of a Senator who had died in office. In addition to being the first female Senator, Mrs. Felton holds two other Senate records. Her tenure in the Senate remains the shortest ever (one day), and, at the age of 87, she is the oldest person ever to begin Senate service. First woman to succeed her spouse in the Senate and also the first female initially elected to a full six-year term. Hattie Caraway (D-AR, 1931-1945) was first appointed in 1931 to fill the vacancy caused by the death of her husband, Thaddeus H. Caraway (D-AR, House, 1913-1921; Senate, 1921-1931), and then was subsequently elected to two six-year terms. First woman elected to the Senate without having first been appointed to serve in that body and first woman to serve in both houses of Congress . Margaret Chase Smith (R-ME) was elected to the Senate and served from January 3, 1949, until January 3, 1973. She had previously served in the House (June 3, 1940, to January 3, 1949). First woman elected to the Senate without first having been elected to the House or having been elected or appointed to fill an unexpired Senate term. Nancy Landon Kassebaum (R-KS, 1979-1997). First woman elected Speaker of the House. As Speaker of the House in the 110 th and 111 th Congresses (2007-2010), Nancy Pelosi held the highest position of leadership ever by a woman in the U.S. government. She was elected Speaker again at the beginning of the 116 th Congress. "], "subsections": []}, {"section_title": "Records for Length of Service", "paragraphs": ["Longest total length of service by a woman in Congress. Senator Barbara Mikulski (D-MD), who served from January 3, 1977, to January 3, 2017, holds this record (40 years, 10 of which were spent in the House). On March 17, 2012, Senator Mikulski surpassed the record previously held by Edith Nourse Rogers (R-MA). Longest length of service by a woman in the House. On March 18, 2018, currently serving Representative Marcy Kaptur (D-OH) surpassed the record previously held by Representative Rogers. Representative Kaptur has been serving in the House since January 3, 1983 (36 years). Representative Rogers served in the House for 35 years, from June 25, 1925, until her death on September 10, 1960. Longest length of service by a woman in the Senate. Senator Mikulski also holds the record for length of Senate service by a woman (30 years). In January 2011, she broke the service record previously held by Senator Margaret Chase Smith (R-ME), who served 24 years in the Senate and 8.6 years in the House."], "subsections": []}, {"section_title": "Women Who Have Served in Both Houses", "paragraphs": ["Sixteen women have served in both the House of Representatives and the Senate.", "Margaret Chase Smith (R-ME) was the first such woman, as well as the first woman elected to the Senate without first having been elected or appointed to fill a vacant Senate seat. She was first elected to the House to fill the vacancy caused by the death of her husband (Clyde Smith, R-ME, 1937-1940), and she served from June 10, 1940, until January 3, 1949, when she began her Senate service. She served in the Senate until January 3, 1973."], "subsections": []}, {"section_title": "African American Women in Congress", "paragraphs": ["Twenty-five African American women serve in the 116 th Congress, including 2 Delegates, a record number. The previous record number was 21, including 2 Delegates, serving at the end of the 115 th Congress. ", "A total of 47 African American women have served in Congress. The first was Representative Shirley Chisholm (D-NY, 1969-1983). Senator Carol Moseley-Braun (D-IL, 1993-1999) was the first African American woman to have served in the Senate. The African American women Members of the 116 th Congress are listed in Table 3 ."], "subsections": []}, {"section_title": "Asian Pacific American Women in Congress", "paragraphs": ["Ten Asian Pacific American women serve in the 116 th Congress. Patsy Mink (D-HI), who served in the House from 1965-1977 and again from 1990-2002, was the first of 13 Asian Pacific American women to serve in Congress. Mazie Hirono (D-HI) is the first Asian Pacific American woman to serve in both the House and Senate."], "subsections": []}, {"section_title": "Hispanic Women in Congress", "paragraphs": ["Twenty Hispanic or Latino women have served in Congress, all but one in the House, and 15 of them, a record number, serve in the 116 th Congress. Representative Ileana Ros-Lehtinen (R-FL, 1989-2018) is the first Hispanic woman to serve in Congress, and Catherine Cortez Masto (D-NV, 2017-present) is the first Hispanic woman Senator. "], "subsections": []}, {"section_title": "American Indian (Native American) Women in Congress", "paragraphs": ["Representatives Sharice Davids (D-KS) and Deb Haaland (D-NM), both first elected to the 116 th Congress, are the first female enrolled members of federally recognized tribes to serve in Congress."], "subsections": []}, {"section_title": "Women Who Have Served in Party Leadership Positions19", "paragraphs": ["A number of women in Congress, listed in Table 6 , have held positions in their party's leadership. House Speaker Nancy Pelosi (D-CA) holds the highest position of leadership in the U.S. government ever held by a woman. As Speaker of the House in the 116 th Congress, she is second in the line of succession for the presidency. She also served as Speaker in the 110 th and 111 th Congresses. In the 108 th , 109 th , and 112 th -115 th Congresses, she was elected the House Democratic leader. Previously, Representative Pelosi was elected House Democratic whip, in the 107 th Congress, on October 10, 2001, effective January 15, 2002. She was also the first woman nominated to be Speaker of the House. Senator Margaret Chase Smith (R-ME), chair of the Senate Republican Conference from 1967 to 1972, holds the Senate record for the highest, as well as first, leadership position held by a female Senator. The first woman Member to be elected to any party leadership position was Chase Going Woodhouse (D-CT), who served as House Democratic Caucus Secretary in the 81 st Congress (1949-1950)."], "subsections": []}, {"section_title": "Women and Leadership of Congressional Committees", "paragraphs": ["As chair of the House Expenditures in the Post Office Department Committee (67 th -68 th Congresses), Mae Ella Nolan was the first woman to chair any congressional committee. As chair of the Senate Enrolled Bills Committee (73 rd -78 th Congresses), Hattie Caraway was the first woman to chair a Senate committee. In total, ", "26 women have chaired a House committee (including select committees); 14 women have chaired a Senate committee (including select committees); 1 female Senator has chaired two joint committees (related to her service on a standing committee); and 2 female Representatives have chaired a joint committee.", "In the 116 th Congress, there are currently nine committees led by women: five standing committees in the House, one standing committee in the Senate, one select committee in the House, one select committee in the Senate, and one joint committee."], "subsections": []}, {"section_title": "Women in Congress: Examinations of their Role and Impact", "paragraphs": ["As the number of women in Congress has increased in recent decades, and following the large increase in women following the 1992 elections in particular, numerous studies of Congress have examined the role and impact of these women. ", "Central to these studies have been questions about the following:", "The legislative behavior of women in Congress, including whether the legislative behavior of female Members differs from their male counterparts. For example, what has the increase in women in Congress meant for descriptive representation (i.e., when representatives and those represented share demographic characteristics, such as representation of women by women) and substantive representation (i.e., representation of policy preferences and a linkage to policy outcomes)? This also includes examinations of whether women Members sponsor more \"women's issues bills\" or speak more frequently on the House floor about women. These examinations also include questions regarding whether there are any differences in roll call voting behavior between men and women Members of Congress, with a focus on successive Members in the same district, in the same party, or in the chamber overall. The \"effectiveness\" of female legislators, particularly in comparison to male legislators. These studies have examined bill sponsorship and cosponsorship; women's success in shepherding sponsored bills or amendments into law; committee work; success in securing federal funds; consensus building activities and efforts to form coalitions; effectiveness while in the majority and minority; and their impact on the institution overall. The path that leads women to run for office, comparative success rates of female compared with male candidates, and career trajectory once in Congress. This includes professional backgrounds and experience, barriers to entry, and fundraising; the so-called widow effect, in which many women first secured entry to Congress following the death of a spouse; and reelection efforts and influences on decisions regarding voluntary retirement or pursuing other office."], "subsections": [{"section_title": "Appendix. Total Number of Women Who Served in Each Congress", "paragraphs": [], "subsections": []}]}]}}
{"id": "R43625", "title": "SBA Office of Advocacy: Overview, History, and Current Issues", "released_date": "2019-04-10T00:00:00", "summary": ["The Office of Advocacy (Advocacy) is an \"independent\" office within the U.S. Small Business Administration (SBA) that advances \"the views and concerns of small businesses before Congress, the White House, federal agencies, the federal courts, and state and local policymakers as appropriate.\" The Chief Counsel for Advocacy (Chief Counsel) directs the office and is appointed by the President from civilian life with the advice and consent of the Senate.", "Advocacy is a relatively small office with a relatively large mandate\u2014to represent the interests of small business in the regulatory process, provide Regulatory Flexibility Act (RFA) compliance training to federal regulatory officials, produce and promote small business economic research to inform policymakers and other stakeholders concerning the impact of federal regulatory burdens on small businesses and the role of small businesses in the economy, and facilitate small business outreach across the federal government.", "This report examines Advocacy's origins and the expansion of its responsibilities over time; describes its organizational structure, funding, functions, and current activities; and discusses recent legislative efforts to further enhance its authority. For example, during the 115th Congress, the House passed H.R. 5, the Regulatory Accountability Act of 2017 (Title III, Small Business Regulatory Flexibility Improvements Act), which would have expanded Advocacy's responsibilities. It would have revised and enhanced requirements for federal agency notification of the Chief Counsel prior to the publication of any proposed rule; expanded the required use of small business advocacy review panels from three federal agencies to all federal agencies, including independent regulatory agencies; empowered the Chief Counsel to issue rules governing federal agency compliance with the RFA; specifically authorized the Chief Counsel to file comments on any notice of proposed rulemaking, not just when the RFA is concerned; and transferred size standard determinations for purposes other than the Small Business Act and the Small Business Investment Act of 1958 from the SBA's Administrator to the Chief Counsel. The House passed similar legislation during the 114th Congress (H.R. 527).", "The analysis suggests that Advocacy faces several challenges.", "Advocacy, generally recognized as being an independent office, is housed within the much larger SBA which, given their statutorily overlapping missions as advocates for small businesses, makes it more difficult for stakeholders to recognize Advocacy as the definitive voice for small businesses. Chief Counsels tend to have relatively short tenures, creating continuity problems for Advocacy. The RFA does not define significant economic impact or substantial number of small entities, two key terms for triggering Advocacy's role under the RFA. The lack of clarity concerning these key terms makes it difficult for Advocacy to objectively determine agency compliance with the RFA and to train federal regulatory officials in how to come into compliance with the act. Advocacy often finds itself involved in ideological and partisan disputes concerning the outcome of federal regulatory policies for which it does not have the final say. Advocacy's ability to produce and promote economic research on small businesses and to engage in outreach activities, particularly outreach activities not directly related to its RFA role, is constrained by its relatively limited budgetary resources."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Office of Advocacy (Advocacy) is an \"independent\" office within the U.S. Small Business Administration (SBA) that is responsible for advancing \"the views and concerns of small businesses before Congress, the White House, federal agencies, the federal courts, and state and local policymakers as appropriate.\" The Chief Counsel for Advocacy (Chief Counsel) directs the office and is appointed by the President from civilian life with the advice and consent of the Senate. The Chief Counsel and Advocacy support the development and growth of American small businesses by ", "\"intervening early in federal agencies' regulatory development processes on proposals that affect small entities and providing Regulatory Flexibility Act compliance training to federal agency policymakers and regulatory development officials; producing research to inform policymakers and other stakeholders on the impact of federal regulatory burdens on small businesses, to document the vital role of small businesses in the economy, and to explore and explain the wide variety of issues of concern to the small business community; and fostering a two-way communication between federal agencies and the small business community.\"", "Advocacy has 55 staff members and received an appropriation of $9.120 million for FY2019.", "Advocacy's responsibilities have expanded over time, and legislation has been introduced in recent Congresses to increase its authority still further. For example, during the 115 th Congress, the House passed H.R. 5 , the Regulatory Accountability Act of 2017 (Title III, Small Business Regulatory Flexibility Improvements Act), by a vote of 238-183. The bill would have, among other provisions,", "revised and enhanced requirements for federal agency notification of the Chief Counsel prior to the publication of any proposed rule; expanded the required use of small business advocacy review panels from three federal agencies to all federal agencies, including independent regulatory agencies; empowered the Chief Counsel to issue rules governing federal agency compliance with the RFA; specifically authorized the Chief Counsel to file comments on any notice of proposed rulemaking, not just when the RFA is concerned; and transferred size standard determinations for purposes other than the Small Business Act and the Small Business Investment Act of 1958 from the SBA's Administrator to the Chief Counsel.", "During the 113 th Congress, these provisions were included in H.R. 2542 , the Regulatory Flexibility Improvements Act of 2013, and were later included in H.R. 2804 , the Achieving Less Excess in Regulation and Requiring Transparency Act of 2014 (ALERRT Act of 2014), which the House passed on February 27, 2014, and in H.R. 4 , the Jobs for America Act (of 2014), which the House passed on September 18, 2014. During the 114 th Congress, these provisions were included in H.R. 527 , the Small Business Regulatory Flexibility Improvements Act of 2015, which was passed by the House on February 5, 2015. ", "More recently, S. 83 , the Advocacy Empowerment Act of 2019, would empower the Chief Counsel to issue rules governing federal agency compliance with the RFA.", "In addition, during the 114 th Congress, S. 2847 , the Prove It Act of 2016, which was reported by the Senate Committee on Small Business and Entrepreneurship, would have authorized the Chief Counsel to request the Office of Management and Budget's (OMB's) Office of Information and Regulatory Affairs (OIRA) to review any federal agency certification that a proposed rule, if promulgated, will not have a significant economic impact on a substantial number of small entities and, as a result, is not required to submit a regulatory flexibility analysis of the rule. If it is determined that the proposed rule would, if promulgated, have a significant economic impact on a substantial number of small entities, the federal agency would then be required to perform both an initial and a final regulatory flexibility analysis for the rule. The bill was reintroduced during the 115 th Congress ( S. 2014 , the Prove It Act of 2017).", "This report examines Advocacy's origins and the expansion of its responsibilities over time; describes its organizational structure, funding, functions, and current activities; and discusses recent legislative efforts to further enhance its authority."], "subsections": []}, {"section_title": "Advocacy's Origins", "paragraphs": ["The Small Business Act of 1953 (P.L. 83-163, as amended) authorized the SBA and directed the agency to \"aid, counsel, assist, and protect, insofar as is possible, the interests of small-business concerns.\" The SBA provided this advocacy function primarily through its administration of small business loan guaranty programs, contracting assistance programs, and management and training programs. The SBA Administrator serves as the lead advocate for small businesses within the federal government."], "subsections": [{"section_title": "Office of Chief Counsel for Advocacy", "paragraphs": ["During the early 1970s, several small business organizations indicated at congressional hearings that they were not wholly satisfied with the SBA's advocacy efforts, especially in achieving regulatory relief for small businesses. Congress responded to these concerns by approving legislation ( P.L. 93-386 , the Small Business Amendments of 1974) authorizing the SBA Administrator to create an Office of Chief Counsel for Advocacy and to appoint a Chief Counsel for Advocacy. The Chief Counsel was to serve as a focal point for the agency's advocacy efforts. ", "P.L. 93-386 provided the Chief Counsel five duties:", "1. serve as a focal point for the receipt of complaints, criticisms, and suggestions concerning the policies and activities of the Administration and any other federal agency that affects small businesses; 2. counsel small businesses on how to resolve questions and problems concerning the relationship of the small business to the federal government; 3. develop proposals for changes in the policies and activities of any agency of the federal government that will better fulfill the purposes of the Small Business Act and communicate such proposals to the appropriate federal agencies; 4. represent the views and interests of small businesses before other federal agencies whose policies and activities may affect small businesses; and 5. enlist the cooperation and assistance of public and private agencies, businesses, and other organizations in disseminating information about the programs and services provided by the federal government, which are of benefit to small businesses, and information on how small businesses can participate in or make use of such programs and services.", "The SBA created the Office of Chief Counsel for Advocacy in October 1974, and designated each of the SBA's regional, district, and branch office directors as the advocacy director for their area. The Office of Chief Counsel was placed under the Office of Advocacy, Planning and Research, which was headed by an Assistant Administrator. Anthony Stasio, a long-time, career manager within the SBA, was named the first Chief Counsel. Three deputy advocate positions were subsequently created and staffed: deputy advocate for Advisory Councils, deputy advocate for Government Relations, and deputy advocate for Small Business Organizations. The SBA's Office of Chief Counsel for Advocacy was fully operational as of March 1, 1975. "], "subsections": []}, {"section_title": "An \"Independent\" Office of Advocacy", "paragraphs": ["As the Office of Advocacy began operations, several small business organizations lobbied Congress to provide the Chief Counsel greater independence from the SBA's Administrator. They argued that the SBA's Administrator reports to the White House and is subject to the OMB Director's influence. In their view, OMB, at that time, was more attuned to promoting the interests of large businesses than it was to promoting the interests of small businesses. ", "Congress responded to these concerns by passing P.L. 94-305 , to amend the Small Business Act and Small Business Investment Act of 1958. Enacted on June 4, 1976, Title II of the act enhanced the Chief Counsel's authority by requiring the Office of Advocacy to be established as a separate, stand-alone office within the SBA and by requiring the Chief Counsel to be appointed from civilian life by the President, by and with the advice and consent of the Senate.", "P.L. 94-305 also", "retained Advocacy's five duties as identified in P.L. 93-386 ; specified that one of Advocacy's primary functions was to examine the role of small business in the American economy and the problems faced by small businesses and to recommend specific measures to address those problems; empowered the Chief Counsel, after consultation with and subject to the approval of the SBA Administrator, to employ and fix the compensation of necessary staff, without going through the normal competitive procedures directed by federal law and the Office of Personnel Management; specified that the Chief Counsel could obtain expert advice and other services, and hold hearings; directed each federal department, agency, and instrumentality to furnish the Chief Counsel with reports and information deemed by the Chief Counsel as necessary to carry out his or her functions; ordered the Chief Counsel to provide Congress, the President, and the SBA with information concerning his or her activities; and authorized to be appropriated $1 million for Advocacy, with any appropriated funds remaining available until expended.", "It was at this time that the word independent began to be used to describe the Chief Counsel and the Office of Advocacy. However, Advocacy remained a part of the SBA and subject to the sitting Administration's influence. For example, at that time, Advocacy's budget was provided through the SBA's salaries and expenses account, which was approved by the SBA Administrator; Advocacy's annual staffing allotment was subject to the SBA Administrator's approval; and some senior staff within Advocacy were vetted by the White House personnel office prior to hiring. "], "subsections": []}, {"section_title": "Advocacy's Regulatory Oversight Role Expanded", "paragraphs": ["Advocacy's duties were further expanded following enactment of P.L. 96-354 , the Regulatory Flexibility Act of 1980 (RFA, as amended). The RFA ", "establishes in law the principle that government agencies must analyze the effects of their regulatory actions on small entities\u2212small businesses, small nonprofits, and small governments\u2212and consider alternatives that would be effective in achieving their regulatory objectives without unduly burdening these small entities. Advocacy has the responsibility of overseeing and facilitating federal agency compliance.", "The RFA's sponsors argued that federal agencies should be required to examine the impact of regulations on small businesses because federal regulations tend to be \"uniform in design, permit little discretion in their implementation, and place a disproportionate burden upon small businesses, small organizations and small governmental bodies.\" As Alfred Dougherty Jr., director of the Federal Trade Commission's Bureau of Competition, testified at a congressional hearing:", "First, even if actual regulatory costs are equal between competing large and small firms, small firms have fewer units of output over which to spread such costs and must include in the price of each unit a larger component of regulatory cost. Second, where small firms have smaller actual regulatory costs than large firms (as is generally the case), small firms remain at a competitive disadvantage because they are unable to take advantage of the \"economies of scale\" of regulatory compliance. Large firms generally already have extensive \"in-house\" data compilation and reporting systems and specialized staff accountants, lawyers and managers whose primary function is regulatory compliance. Small firms, by comparison, must either hire additional personnel or purchase expensive consulting services in order to acquire the necessary regulatory expertise. ", "Economist Milton Kafoglis, a member of the President Jimmy Carter's Council on Wage and Price Stability, testified that ", "There seem to be clear economies of scale imposed by most regulatory endeavors. Uniform application of regulatory requirements thus seems to increase the size [of the] firm that can effectively compete. The cost curve of the firm is shifted upward \u2026 [with] the small firms' cost curve shifting more than that of the dominant firms [thus] the share of the dominant firm will increase while that of small firms will decrease. As a result, industrial concentration will have increased. This \u2026 suggests that the \"small business\" [regulatory] problem goes beyond mere sympathy for the small businessman, but strikes at the heart of the established national policy of maintaining competition and mitigating monopoly.", "As discussed below, the RFA requires federal agencies to assess the impact of their forthcoming regulations on s mall entities , which the act defines as small businesses, small governmental jurisdictions, and certain small not-for-profit organizations. The Chief Counsel is responsible for monitoring and reporting agencies' compliance with the act's provisions. The Chief Counsel also reviews and comments on proposed regulations and may appear as amicus curiae (i.e., friend of the court) in any court action to review a rule."], "subsections": []}, {"section_title": "Advocacy's Independent Status Enhanced", "paragraphs": ["P.L. 111-240 , the Small Business Jobs Act of 2010, further enhanced Advocacy's independence by ending the practice of including Advocacy's budget in the SBA's Salaries and Expenses' Executive Direction account. Instead, the President is required to provide a separate statement of the amount of appropriations requested for Advocacy, \"which shall be designated in a separate account in the General Fund of the Treasury.\" The Small Business Jobs Act also requires the SBA Administrator to provide Advocacy with \"appropriate and adequate office space at central and field office locations, together with such equipment, operating budget, and communications facilities and services as may be necessary, and shall provide necessary maintenance services for such offices and the equipment and facilities located in such offices.\" ", "In recognition of its enhanced independence and separate appropriations account, Advocacy, for the first time, issued its own congressional budget justification document and annual performance report as part of the Obama Administration's FY2013 budget request. That document was presented in a new appendix accompanying the SBA's congressional budget justification document and annual performance report. Advocacy has continued to issue its own budget justification document in each of the Administration's subsequent budget requests."], "subsections": []}]}, {"section_title": "Current Organizational Structure and Funding", "paragraphs": ["As mentioned previously, Advocacy currently has 55 staff members: 4, including the Chief Counsel, in the Office of the Chief Counsel; 16 in the Office of Interagency Affairs (regulatory staff); 9 in the Office of Economic Research; 6 in the Office of Information; 13 in the Office of Regional Affairs (regional advocates); and 7 in the Administrative Support Branch. The Office of Advocacy's organizational chart is presented below, with its anticipated staffing level.", "Advocacy received an appropriation of $9.120 million for FY2019. Staff salaries and benefits account for about 95% of Advocacy's budget, with the remainder used for economic research grants and direct expenses, such as subscriptions, travel, training, and office supplies. "], "subsections": []}, {"section_title": "Advocacy and Federal Regulations", "paragraphs": ["Advocacy is responsible for monitoring and reporting on federal agency compliance with the RFA (5 U.S.C. \u00a7\u00a7601-612) and Executive Order 13272, Proper Consideration of Small Entities in Agency Rulemaking (August 13, 2002). Advocacy also comments on proposed rules and participates in small business advocacy review panels, among other activities."], "subsections": [{"section_title": "The RFA", "paragraphs": ["As mentioned previously, the RFA (as amended) requires federal agencies to assess the impact of their forthcoming regulations on small entities, which the act defines as including small businesses, small governmental jurisdictions, and certain small not-for-profit organizations. According to Advocacy, the RFA", "does not seek preferential treatment for small entities, require agencies to adopt regulations that impose the least burden on small entities, or mandate exemptions for small entities. Rather, it requires agencies to examine public policy issues using an analytical process that identifies, among other things, barriers to small business competitiveness and seeks a level playing field for small entities, not an unfair advantage.", "Under the RFA, Cabinet departments and independent agencies as well as independent regulatory agencies must prepare a regulatory flexibility analysis at the time certain proposed and final rules are issued. The analysis must describe, among other things, (1) the reasons why the regulatory action is being considered; (2) the small entities to which the proposed rule will apply and, where feasible, an estimate of their number; (3) the projected reporting, recordkeeping, and other compliance requirements of the proposed rule; and (4) any significant alternatives to the rule that would accomplish the statutory objectives while minimizing the impact on small entities.", "However, these analytical requirements are not triggered if the head of the issuing agency certifies that the proposed rule would not have a \"significant economic impact on a substantial number of small entities.\" The RFA does not define significant economic impact or substantial number of small entities . As a result, federal agencies have substantial discretion regarding when the act's analytical requirements are initiated. In addition, the RFA's analytical requirements do not apply to final rules for which the agency does not publish a proposed rule.", "The RFA also requires federal agencies to", "publish a \"regulatory flexibility agenda\" each April and October in the Federal Registe r , listing regulations that the agency expects to propose or promulgate which are likely to have a significant economic impact on a substantial number of small entities; provide their regulatory flexibility agenda to the Chief Counsel and to small businesses or their representatives; retrospectively review rules that have or will have a significant impact within 10 years of their promulgation to determine whether they should be continued without change or should be amended or rescinded to minimize their impact on small entities; and ensure that small entities have an opportunity to participate in the rulemaking process. ", "In addition, the Environmental Protection Agency (EPA), Occupational Safety and Health Administration (OSHA), and the Consumer Financial Protection Bureau (CFPB) are required to convene a small business advocacy review panel (sometimes referred to as SBREFA panels) whenever they are developing a rule that is anticipated to have a significant economic impact on a substantial number of small entities. These panels consist of a representative or representatives from the rulemaking agency, OMB's Office of Information and Regulatory Affairs (OIRA), and the Chief Counsel. Information and advice from small entity representatives are solicited to assist the panel in understanding the ramifications of the proposed rule. The panel must be convened and complete its report, with recommendations, within a 60-day period. Finally, the RFA encourages the issuing agency to modify the proposed rule or initial regulatory flexibility analysis as appropriate, based on the information received from the panel. ", "The RFA also requires the Chief Counsel to monitor and report at least annually on agencies' compliance with the act. The Chief Counsel accomplishes this primarily by reviewing and commenting on proposed regulations and by participating in small business advocacy review panels. In addition, the Chief Counsel may appear as amicus curiae (i.e., friend of the court) in any court action to review a rule."], "subsections": []}, {"section_title": "Executive Order 13272", "paragraphs": ["Executive Order 13272, Proper Consideration of Small Entities in Agency Rulemaking (August 13, 2002), requires federal agencies to make information publicly available concerning how they will comply with the RFA's statutory mandates. It also requires federal agencies to send to Advocacy copies of any draft regulations that may have an impact on a substantial number of small entities. Agencies must send these draft regulations to Advocacy at the same time the draft rules are sent to OIRA for review, or at a reasonable time prior to their publication in the Federal Register . Agencies must consider Advocacy's comments on the proposed rule and must address these comments in the final rule published in the Federal Register .", "Executive Order 13272 requires Advocacy to", "notify federal agencies concerning how to comply with the RFA, which is accomplished primarily through Advocacy's periodic publication of A Guide for Government Agencies: How to Comply with the Regulatory Flexibility Act and through Advocacy's compliance training program; report annually on federal agency compliance with the executive order, which is accomplished primarily through Advocacy's annual publication of Report on the Regulatory Flexibility Act ; and train federal regulatory agencies in how to comply with the RFA, which is accomplished through Advocacy's compliance training program. "], "subsections": []}, {"section_title": "Advocacy's Regulatory Activities", "paragraphs": ["Advocacy provided 17 official public comment letters to 20 federal agencies on a variety of proposed rules in FY2018. It also hosted 23 roundtable discussions in 16 states on proposed rules and regulatory topics. These roundtable discussions provided stakeholders an opportunity to share their views concerning the impact of proposed rules. Advocacy also provided training on RFA compliance to 132 federal officials at 6 rule-writing agencies. ", "Each year, Advocacy provides an estimate of the regulatory cost savings its activities provide to small businesses in the form \"of foregone capital or annual compliance costs that otherwise would have been required in the first year of a rule's implementation.\" These estimates are based primarily on estimates from the federal agencies promulgating the rules, and, in some instances, from industry estimates. ", "Estimating the costs and benefits of federal regulations is methodologically challenging. For example, researchers must determine the baseline for measurement (i.e., what effects would have occurred in the absence of the regulation) and many regulatory cost estimates are based on aggregating the results of regulatory studies conducted years earlier. These studies often use different methods and vary in quality, making conclusions drawn from them problematic. Some observers, including OMB, doubt whether an accurate measure of total regulatory costs and benefits is possible. Moreover, in the case of Advocacy, estimating regulatory cost savings from its activities is even more challenging because it is nearly impossible to determine what changes to these regulations would have been made during the review and comment period if Advocacy did not exist.", "Advocacy reported that its intervention in rules that were made final resulted in regulatory cost savings on behalf of small businesses of $255.3 million in FY2018."], "subsections": []}]}, {"section_title": "Producing and Promoting Research on Small Businesses", "paragraphs": ["Advocacy's Office of Economic Research \"assembles and uses data and other information from many different sources to develop data products that are as timely and actionable as possible.\" These products typically relate \"to the role that small businesses play in the nation's economy, including the availability of credit, the effects of regulations and taxation, the role of firms owned by women, minority and veteran entrepreneurs, factors that influence entrepreneurship, innovation and other issues of concern to small businesses.\" ", "In addition to sponsoring and conducting research on small business, Advocacy maintains web pages with links to ", "state economic profiles, which are compiled annually by Office of Advocacy staff and provide information concerning small businesses in the state, such as number of small businesses in the state, the number of people employed by those small businesses in the state, and various demographic information concerning the small business owners in the state; firm size economic data, which are compiled by Advocacy staff from the U.S. Bureau of the Census and the U.S. Bureau of Labor Statistics and provide information concerning various owner and business characteristics, such as the number of firms, number of establishments, employment, and annual payroll by the employment size of the business and by location and industry; quarterly economic bulletins, which are authored by Advocacy staff to examine trends in small business employment and lending; research projects which have been authored by Office of Advocacy staff, either by choice or by congressional mandate, and by others sponsored by Advocacy; fact sheets, which are authored by Office of Advocacy staff, covering various topics, such as gender differences in financing, the availability of health insurance among small businesses, and credit card financing; issue briefs, which are authored by Advocacy staff, covering various topics, such as veteran business owners and access to capital for women- and minority-owned businesses; and major sources of data collected by the federal government concerning small business.", "Advocacy also provides funding to the Census Bureau to support the generation of business data by firm size; publishes \"The Small Business Advocate,\" a newsletter summarizing Advocacy's research endeavors, which has more than 36,000 online subscribers; and publishes \"The Small Business Economy,\" an annual report on the status of small businesses and their role in the national economy. "], "subsections": [{"section_title": "Advocacy's Research Activities", "paragraphs": ["Advocacy published 20 contract and internal research and data reports in FY2018. These reports covered a variety of issues, including crowdfunding, the regulatory development process, nonemployer businesses, and state rankings by small business economic indicators.", "In addition, Advocacy's economic research staff sponsored six \"Small Business Economic Research Forums.\" These forums provide economists and researchers an opportunity \"to discuss a key economic topic\" and help \"to keep Advocacy's staff up-to-date on the latest data and research from other agencies and researchers.\""], "subsections": []}]}, {"section_title": "Promoting Small Business Outreach", "paragraphs": ["As mentioned previously, Advocacy engages in outreach activities related to its role with the RFA. For example, in FY2016, Advocacy participated in seven small business advocacy review panels (one with the Occupational Safety and Health Administration, two with the Consumer Financial Protection Bureau, and four with the Environmental Protection Agency) and one in FY2018 (with the Occupational Safety and Health Administration). In each case, Advocacy provided outreach to small business owners interested in sharing their views concerning the agency's proposed rule. ", "Advocacy also regularly sponsors roundtable discussions, conferences, and symposia to provide small business owners an opportunity to share their views on issues of concerns to them. For example, Advocacy's regional advocates regularly \"interact directly with small businesses, small business trade associations, governors and state legislatures to educate them about the benefits of regulatory flexibility and testify at state-level legislation hearings on small business issues when requested to do so.\" Regional advocates also \"work closely with the ten Regional Fairness Boards in their respective regions to develop information for the SBA's National Ombudsman, as provided for by the Small Business Regulatory Enforcement Fairness Act and alert businesses in their respective regions about regulatory proposals that could affect them.\" ", "The Chief Counsel also meets regularly with business organizations and trade associations, and participates in Advocacy roundtable discussions, conferences, and symposia. Advocacy's economists provide economic presentations at academic conferences, trade association meetings, think tank events, and other government-sponsored events. "], "subsections": [{"section_title": "Advocacy's Outreach Activities", "paragraphs": ["Advocacy's regional advocates participated in 523 outreach events in FY2018. Advocacy's economists also made 18 presentations to academic, media, or other small business policy-related audiences."], "subsections": []}]}, {"section_title": "Current Congressional Issues", "paragraphs": ["As has been discussed, Advocacy's responsibilities have expanded over time. During the 115 th Congress, H.R. 5 , the Regulatory Accountability Act of 2017 (Title III, Small Business Regulatory Flexibility Improvements Act) was passed by the House. The bill would have increased Advocacy's authority still further. Specifically, H.R. 5 would have", "revised and enhanced requirements for federal agency notification of the Chief Counsel prior to the publication of any proposed rule; expanded the required use of small business advocacy review panels from three federal agencies to all federal agencies, including independent regulatory agencies; empowered the Chief Counsel to issue rules governing federal agency compliance with the RFA; specifically authorized the Chief Counsel to file comments on any notice of proposed rulemaking, not just when the RFA is concerned; and transferred size standard determinations for purposes other than the Small Business Act and the Small Business Investment Act of 1958 from the SBA's Administrator to the Chief Counsel."], "subsections": [{"section_title": "Arguments for Expanding Advocacy's Authority", "paragraphs": ["Advocates of expanding Advocacy's authority and role under the RFA argue that legislation is necessary to \"close loopholes [in the RFA] and more effectively reduce the disproportionate burden that over-regulation places on small entities, thereby enhancing job creation and hastening economic recovery.\" They argue that ", "recent regulatory expansions and the future threat of further excessive federal regulation\u2014such as under the waves of regulation occurring to implement the Patient Protection and Affordable Care Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act\u2014have created immense regulatory burdens and uncertainty for the economy, chilling job creation, investment and economic growth and suppressing America's economic freedom and standing among the world's economies. These effects are particularly burdensome on small businesses\u2014and since start-up firms are the source of net job creation in the U.S. economy it is only logical that the impact of these effects on small businesses contributes substantially to the economy's inability to create sufficient levels of new jobs. ", "Advocates of expanding the Office of Advocacy's authority also note that the Government Accountability Office (GAO) has found that the lack of a uniform definition for the terms significant economic impact , and substantial number of small entities contributes to inconsistent compliance with the RFA across federal agencies. They argue that GAO's findings are further evidence that the RFA needs to be amended."], "subsections": []}, {"section_title": "Arguments Against Expanding Advocacy's Authority", "paragraphs": ["Opponents of expanding Advocacy's authority and role under the RFA argue that the provisions being advocated are part of an \"ongoing attack on federal regulation,\" presented under the guise of \"pro-small business rhetoric, which will erect significant barriers to rulemaking that will hinder the promulgation of critical public health and safety protections.\" They argue that these provisions are ", "(1) based on the false premise that regulatory costs stifle economic growth and job creation; (2) threatens public health and safety by severely undermining federal agency rulemaking; (3) imposes additional duties on agencies while failing to provide for any additional resources to meet such burdens, and (4) allows more opportunities for industry to delay or defeat proposed rulemakings.", "Opponents also argue that these provisions", "do nothing to alleviate the purported burden on small entities of complying with federal regulations. In fact, it includes no provision that offers assistance to small entities, whether through subsidies, government guaranteed loans, preferential tax treatment for small firms, or fully funded compliance assistance offices. Instead, the bill merely aggrandizes the power of the SBA's Office of Advocacy and of the professional lobbying class in Washington."], "subsections": []}]}, {"section_title": "Concluding Observations", "paragraphs": ["The SBA's Office of Advocacy is a relatively small office with a relatively large mandate\u2014to represent the interests of small business in the regulatory process, produce and promote small business economic research, and facilitate small business outreach across the federal government. It faces several challenges.", "First, Advocacy is generally recognized as being an independent office, but it is housed within the SBA and remains subject to its influence through (1) its proximity to the agency and its organizational culture; (2) the budgetary process, which provides the SBA Administrator a role, albeit recently reduced, in determining Advocacy's budget; and (3) the sheer size of the SBA (more than 5,000 employees and an annual budget exceeding $700 million) relative to Advocacy which, given their statutorily overlapping missions as advocates for small businesses, makes it more difficult than would otherwise be the case for stakeholders to recognize Advocacy as the definitive voice for small businesses. ", "Second, Chief Counsels tend to have relatively short tenures (three years, eight years, one year, seven years, six years, four years, and one year). When they leave office, there have often been delays in naming a successor, creating continuity problems for Advocacy. For example, the position was filled on an interim basis by Claudia Rodgers, a long-time Advocacy senior staff member, from January 2015 (following Winslow Sargeant's departure) until Darryl L. DePriest's Senate confirmation on December 10, 2015. DePriest left office in January 2017. Major L. Clark, III, previously Assistant Chief Counsel for Procurement Policy for Advocacy, is currently filling the Chief Counsel's position on an interim basis. Chief Counsels leave office for various reasons, such as a change in Administration or for more lucrative positions in the private sector. ", "Third, one of Advocacy's primary functions is to monitor and report on federal agency compliance with the RFA, provide comments on proposed rules, and train federal regulatory officials to assist them in complying with the RFA's provisions. However, as GAO has noted, the RFA does not define significant economic impact or substantial number of small entities , two key terms for triggering Advocacy's role under the RFA. The lack of clarity concerning these key terms makes it difficult for Advocacy to objectively determine agency compliance with the RFA and also makes it more difficult for Advocacy to train federal regulatory officials in how to come into compliance with the act. GAO and others have recommended that Congress clarify the meaning of these terms. However, the RFA's original authors purposely decided not to provide a precise definition for these terms. They argued that the varying missions and constituencies served by federal agencies necessitated the provision of discretion to allow federal agencies to \"determine what is significant to their programs and particular constituencies.\"", "Fourth, Advocacy is subject to criticism from those who believe that it should be more aggressive in preventing federal regulations (i.e., from those who generally oppose federal regulations, especially regulations related to environmental issues and health care reform) and from those who believe that it should be less aggressive in this regard (i.e., from those who generally view federal regulations favorably, especially in addressing environmental and workplace safety issues). Thus, Advocacy often finds itself involved in ideological and partisan disputes concerning the outcome of federal regulatory policies for which it does not have the final say.", "Finally, Advocacy's relatively limited budget restricts its ability to produce and promote economic research on small businesses and to engage in outreach activities, particularly outreach activities not directly related to its RFA role. It could be argued that Advocacy does not need additional resources for these endeavors because the SBA engages in these same activities. Once again, this reflects the challenges the Office of Advocacy faces as an independent office operating within a much larger federal agency with an overlapping mission."], "subsections": []}]}}
{"id": "R45549", "title": "The State and Local Role in Election Administration: Duties and Structures", "released_date": "2019-03-04T00:00:00", "summary": ["The administration of elections in the United States is highly decentralized. Elections are primarily administered by thousands of state and local systems rather than a single, unified national system.", "States and localities share responsibility for most election administration duties. Exactly how responsibilities are assigned at the state and local levels varies both between and within states, but there are some general patterns in the distribution of duties. States typically have primary responsibility for making decisions about the rules of elections (policymaking). Localities typically have primary responsibility for conducting elections in accordance with those rules (implementation). Localities, with varying contributions from states, typically also have primary responsibility for paying for the activities and resources required to conduct elections (funding).", "The structures of the state and local systems that conduct elections also vary between and within states. Common variations include differences related to the leadership of the system, the relationship between local election officials and the state, and the population size and density of the jurisdiction the system serves. The leadership of a state or local election system may be elected or appointed, and both the leaders and the methods used to select them may be partisan, bipartisan, or nonpartisan. State officials may have more or less direct influence over local election officials, and the extent of their influence may be affected by other structural features of the state's election systems, such as the methods used to select local officials. Finally, larger election jurisdictions have different administrative advantages and challenges than smaller ones, and more urban jurisdictions have different advantages and challenges than more rural ones. These differences between jurisdictions may be reflected in structural features of the election systems that serve them, such as how the systems allocate resources and where they find specialized expertise.", "Understanding the duties and structures of state and local election systems may be relevant to Congress for at least two reasons. First, the way state and local election systems work can affect how well federal action on election administration serves its intended purposes. The effectiveness of federal action depends in part on how it is implemented. How it is implemented can depend, in turn, on how the state and local election systems that implement it work. Second, Congress can make or incentivize changes to the way state and local election systems work. Congress has a number of policy tools it can use to affect the administration of federal elections. The use of these tools can\u2014either intentionally or unintentionally\u2014affect the state and local election systems that administer federal elections."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Election administration attracted significant attention in 2000, when issues with the vote count delayed the results of the presidential race. Administrative issues have also been reported in subsequent election cycles. For example, issues with voter registration were reported in multiple states in 2016 and 2018.", "Some responses to such reports focus on the rules of elections. The Help America Vote Act of 2002 (HAVA; P.L. 107-252 ; 116 Stat. 1666), for example, requires states to establish a uniform standard of what counts as a vote for each voting system they use (52 U.S.C. \u00a721081(a)(6)), and bills have been introduced in recent Congresses to change how voter registration is handled.", "Other responses focus on the systems that apply election rules. In the United States, that typically means state and local systems. The administration of elections in the United States is highly decentralized. Elections are primarily administered by thousands of state and local systems rather than a single, unified national system.", "Understanding how those state and local systems work may be relevant to Congress for at least two reasons. First, the way state and local election systems work can affect how well federal action on election administration serves its intended purposes. Most federal action on election administration is carried out by state and local election systems. Interactions between the workings of those systems and federal actions can help determine how effective the federal actions are at achieving their objectives.", "Second, Congress can require or encourage changes to the way state and local election systems work. Congress has a number of tools for influencing election administration policy. The use of these tools can\u2014either intentionally or unintentionally\u2014affect the workings of the state and local systems that administer federal elections.", "This report is intended to help Congress understand how state and local election systems work and how their workings might relate to federal activity on election administration. It starts by describing the distribution of election administration duties at the state and local levels and the structures of the state and local systems that conduct elections. It then uses examples from past federal action on election administration to illustrate some of the ways the duties and structures of state and local election systems interact with federal activity. It closes by introducing some considerations that may be relevant to Members interested in election administration."], "subsections": [{"section_title": "Scope and Format of the Report", "paragraphs": ["This report focuses on the administration of federal elections in the states by executive and legislative branches of state and local government. Much of the discussion applies to nonfederal as well as federal elections, but the report is intended explicitly to address only federal elections. The report also does not cover the federal role in administering federal elections, election administration in the U.S. territories, the role of law enforcement and the courts in election administration, or issues of constitutional or legal interpretation.", "The typical federal election process has three main parts: voter registration, vote casting, and vote counting. This report focuses on those three parts of the process rather than on other aspects of campaigns and elections, such as campaign finance and redistricting.", "Finally, the way federal elections are administered varies between and within states. A full accounting of the variations is beyond the scope of this report. Instead, the report describes general patterns and illustrates them with examples. Examples appear in text boxes like the box below, which describes the role the text boxes play in the report in more detail."], "subsections": []}]}, {"section_title": "Distribution of State and Local Election Administration Duties", "paragraphs": ["Election administration involves making decisions about the rules of elections, such as whether voters should be able to register online, whether they should be required to show photo identification at the polls, and whether election results should be audited. It also involves conducting elections in accordance with those decisions and paying for the activities and resources required to conduct them.", "These three election administration duties can be described as", "policymaking, implementation, and funding.", "This section describes some common patterns in the distribution of these duties at the state and local levels."], "subsections": [{"section_title": "Policymaking", "paragraphs": ["In the U.S. system, states generally play the primary decisionmaking role in election administration. State legislatures, with input from their governors, can make state laws about the administration of elections and make or initiate election administration amendments to their state constitutions. State laws and constitutions can also delegate or defer responsibility for decisions about the administration of elections to other state or local officials and to voters.", "The U.S. Constitution also provides for a federal role with respect to decisionmaking about elections, and Congress has exercised such powers in a number of instances. For more information about federal laws governing the state and local conduct of federal elections, see the Appendix .", "Box 1 uses examples from voter registration to illustrate a number of these approaches to policymaking. It starts with a discussion of a registration policy enacted by the federal government and then describes an adjustment to the policy made, respectively, by a state legislature on the recommendation of a state executive branch official, by state executive branch officials, and by voters.", "State and local officials may be granted decisionmaking authority explicitly by a variety of constitutional provisions, laws, charters, ordinances, and regulations at multiple levels of government. They may also be left discretion over policy details that are not specified in legislative or regulatory text. For example, states may set out general guidelines for voting technology and ballot design but leave decisions about exactly which machines to buy or how to lay out ballots to local officials.", "Voters have a say in election administration measures that are referred to the ballot by their state legislatures. Some states also offer citizen initiatives or popular referendums, which voters can use to propose their own state election administration statutes or state constitutional amendments or to repeal or affirm election administration laws adopted by their state legislatures. Table 1 lists the citizen initiative and popular referendum options available to voters in states that offer such mechanisms, as presented by the Initiative & Referendum Institute at the University of Southern California in January 2019.", "Box 2 uses examples from the November 2018 election to illustrate how states and voters have used ballot measures to make election administration policy. It describes a statewide proposal to enact automatic voter registration in Nevada that was initiated by citizens, and a statewide proposal to enact a voter ID requirement in North Carolina that was referred to the ballot by the state legislature."], "subsections": []}, {"section_title": "", "paragraphs": [], "subsections": []}, {"section_title": "Implementation", "paragraphs": ["Early U.S. elections were conducted almost entirely locally. Some states have departed from that tradition. For example, in Alaska, the state conducts elections above the borough level, and, in Delaware, all elections are conducted by the state.", "Congress has also shifted some responsibility for conducting elections to the state level. For example, the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA; P.L. 99-410 ; 100 Stat. 924) requires states to designate a single state office to provide absent uniformed services and overseas voters with information about voter registration and absentee voting (52 U.S.C. \u00a720302(b)). The NVRA requires states to designate a chief state election official to coordinate state responsibilities under the act (52 U.S.C. \u00a720509), and HAVA requires chief state election officials to implement statewide voter registration lists and oversee development of plans for use of federal election administration funding (52 U.S.C. \u00a721083(a)(1)(A); 52 U.S.C. \u00a721005(a)).", "However, the day-to-day implementation of election administration policy is still mostly handled by localities. For example, localities typically add eligible voters to the voter rolls; design and print ballots; recruit and train poll workers; select and prepare polling places; store and transport voting equipment; and count, canvass, and report election results.", "The level of locality primarily responsible for conducting elections is typically the county, but there are some exceptions. The New England states, which have a strong tradition of township government, tend to assign primary responsibility to municipalities. Some states also split implementation duties between counties and municipalities.", "Responsibility for implementing election administration policy may also be divided between offices or agencies at the same level of local government. For example, according to one scholarly source, as of 2015, localities in about one-third of states split responsibility for conducting elections between two or more offices or agencies. Table 2 lists the states identified by those scholars."], "subsections": []}, {"section_title": "Funding", "paragraphs": ["Election administration involves both intermittent and ongoing costs. Intermittent costs include irregular expenses like the costs of acquiring voting equipment. Ongoing costs include expenses that are linked to and recur with each individual election, such as the costs of printing ballots, paying poll workers, and transporting voting equipment to polling places, as well as expenses that are incurred whether or not there is an election, such as the costs of training election officials, maintaining voter registration lists, and providing IT support for online voter registration systems.", "The federal government does not supply ongoing funding to states and localities to conduct elections. To date, Congress has authorized significant federal funding for state and local election administration in one bill: HAVA. HAVA authorized $3.65 billion for three main types of formula-based payments to states as well as additional funding for a number of smaller grant and payment programs (52 U.S.C. \u00a7\u00a720901-20906; 52 U.S.C. \u00a7\u00a721001-21072). Congress appropriated most of the $3.65 billion for the three types of formula-based payments between FY2003 and FY2010 and appropriated an additional $380 million in March 2018.", "That means states and localities are responsible for most of the costs of conducting federal elections. Localities typically assume primary responsibility for those costs, with states contributing to varying degrees. All states have supplied or committed to supplying matching funds as required to receive federal HAVA funds (52 U.S.C. \u00a721003(b)(5)(a)). All states but North Dakota, which does not have voter registration, have also contributed to establishing and maintaining the statewide voter registration lists required by HAVA (52 U.S.C. \u00a721083(a)).", "State contributions to other costs vary. Many states used HAVA funding to help replace or update voting technology, and some have put additional money from state coffers toward those expenses. Table 3 lists state contributions to the costs of acquiring voting equipment, as reported by the U.S. Government Accountability Office (GAO) in 2018.", " Table 4 provides information from the same report about states' contributions to the costs of maintaining and operating voting equipment. As GAO uses the terms in the survey, operation costs \"include things such as poll worker labor to set up equipment, postage for mailing absentee or vote-by-mail ballots, paper and printing supplies for paper ballots or voter-verified paper trails, and electricity to operate equipment during elections.\" Maintenance costs \"include things such as labor to conduct maintenance between elections of any equipment hardware and software as well as any required parts.\"", "Some states cover or contribute to the costs of training local election officials, and some share election-specific costs, such as printing ballots and transporting voting equipment. Box 3 uses five examples of cost-sharing arrangements for election-specific costs of federal elections to illustrate the range of approaches states have taken to such arrangements."], "subsections": []}]}, {"section_title": "Structures of State and Local Election Implementation Systems", "paragraphs": ["The structures of the state and local systems that conduct federal elections vary both between and within states. Common variations include differences related to the", "leadership of the election system; relationship between local election officials and the state; and population size and density of the jurisdiction served by the system.", "This section describes these structural variations."], "subsections": [{"section_title": "Leadership", "paragraphs": ["The state and local election systems that conduct federal elections may be led by an individual, such as the state secretary of state or a town or county clerk; a group, such as a state elections commission or a county board of elections; or a combination of individuals or groups, such as a state secretary of state and state board of elections, or a city clerk and city registrar of voters.", "Election system leadership may be chosen by voters or appointed by an authority such as the governor or state legislature. The selection method\u2014and the leaders themselves\u2014may be partisan, bipartisan, or nonpartisan.", "Federal law requires states to designate a chief election official to carry out certain tasks. Table 5 lists the titles of chief state election officials, as reported to CRS by the EAC, and the methods of selecting them, as listed by the National Association of Secretaries of State (NASS) and the National Association of State Legislatures (NCSL).", "The leadership types and selection methods of local election systems may vary within a state. Box 4 uses examples from Florida and Wisconsin to illustrate such variations. It describes the different causes of variation in the two states and a recent change in Florida to a more uniform selection process.", "The leadership structures of both state and local systems can also change over time. Box 5 uses the two states from Box 4 to illustrate the types of changes states might make, how they might make them, and how frequently they might make them. It describes one change that was approved by voters as a ballot measure and a number of others that were enacted legislatively."], "subsections": []}, {"section_title": "State-Local Relationship", "paragraphs": ["Another way in which the structures of election systems can vary is in the relationship between local election officials and the state. Some local election officials operate largely independently, whereas others rely on state officials or resources for some, most, or all basic functions. For example, as noted in \" Funding ,\" states may provide some or all of the training for local election officials. As described in more detail in \" Jurisdiction Size and Density ,\" local election officials who serve smaller or more rural jurisdictions may also depend on their states to provide specialized expertise, such as legal or technical know-how.", "States also have varying types and degrees of influence over local election officials. Choices about other structural features, such as the method used to select the leadership of local election systems, can shape this aspect of the state-local relationship. For example, in some states, state officials appoint and can remove local election officials.", "State officials in other states may have other options for influencing local officials. For example, state officials may have the power to initiate legal action against local officials, to provide or withhold funding for local election administration, or to certify and decertify voting systems. However, they tend to have less control over how local officials perform their election administration duties than state officials with appointment and removal authority. As described in more detail in \" Compliance with Federal Requirements ,\" this dynamic may be especially pronounced for local officials who are popularly elected. Such officials are accountable primarily to voters rather than to the state."], "subsections": []}, {"section_title": "Jurisdiction Size and Density", "paragraphs": ["Other structural variations between election systems derive from differences in the population size and density of the jurisdictions they serve. Some election jurisdictions reported serving fewer than 100 eligible registered voters in the 2016 election, for example, whereas Los Angeles County reported serving 6.8 million. The eligible registered voters in that county alone reportedly outnumbered the eligible registrants in each of 40 other states.", "Election jurisdictions also differ in population density. For example, Los Angeles County is an urban center, and many small jurisdictions are rural.", "Jurisdictions with different population sizes and densities have different election administration advantages and face different administrative challenges. For example, voter registration list maintenance is typically more straightforward in small jurisdictions because their lists are shorter and election officials are more likely to know registrants personally. Meanwhile, large jurisdictions tend to have larger tax bases and more resources.", "Those differences between jurisdictions may be reflected in the internal structures of the election systems that serve them. One example of such a structural difference is the size and specialization of the system's staff. Larger jurisdictions, which typically have more personnel, may have much of the specialized expertise they need in-house. Smaller jurisdictions, which may have only one part-time employee dedicated to election administration, are more likely to rely on outside expertise. For example, according to law professors Steven F. Huefner, Daniel P. Tokaji, and Edward B. Foley, smaller jurisdictions in Illinois have looked to state attorneys for election law expertise and to voting equipment vendors for technical support.", "Another type of difference related to jurisdiction size and density is variation in the allocation of system resources. A study prepared for the U.S. Election Assistance Commission in 2013 found that election officials in rural jurisdictions were more likely than their urban counterparts to use paid print advertising for voter outreach. Election officials in urban jurisdictions were more likely to use websites and social media.", "Small jurisdictions may also allocate a larger share of their resources to meeting state and federal requirements than larger jurisdictions because there are often fixed start-up costs to required changes, and smaller jurisdictions may be less equipped to capitalize on economies of scale. For example, political scientists Heather M. Creek and Kimberly A. Karnes report, \"There is a minimum cost to the acquisition and maintenance of voting technology that applies whether the district is purchasing 5 or 500 machines.\""], "subsections": []}]}, {"section_title": "Interactions with the Federal Role in Election Administration", "paragraphs": ["The duties and structures of state and local election systems can affect the implementation of federal election administration laws. Perhaps as a result, Congress has specified how states and localities should distribute certain election administration duties and structure certain elements of their election systems. Changes to the duties and structures of state and local election systems have sometimes also been side effects of other federal activity on election administration."], "subsections": [{"section_title": "Selected Effects of State and Local Duties and Structures on Federal Action", "paragraphs": ["This section provides examples of ways in which the distribution of election administration duties at the state and local levels and the structures of state and local election systems can affect the implementation of federal election administration law. These examples include federal efforts to affect the administration of elections through (1) requirements, (2) funding, and (3) information sharing."], "subsections": [{"section_title": "Compliance with Federal Requirements", "paragraphs": ["Congress can use requirements to regulate how states and localities administer certain aspects of federal elections. How well such requirements serve their intended purposes depends in part on how closely states and localities comply with them. ", "How closely states and localities comply with federal requirements may, in turn, be affected by the duties and structures of the state and local election systems that implement them. For example, UOCAVA assigns responsibility for complying with some of its requirements to the states (52 U.S.C. \u00a720302), but the tasks required for compliance are often handled by local officials. One scholar, law professor Justin Weinstein-Tull, indicates that this means that the officials who are held liable for compliance with UOCAVA requirements may differ from the officials who take or fail to take the actions needed to comply.", "Box 6 provides an illustration of this phenomenon as reported by state officials in Alabama."], "subsections": []}, {"section_title": "Timeliness and Tailoring of Federal Funding", "paragraphs": ["The federal government can provide funding for state and local election administration, which may be conditional on the adoption of certain election administration policies or practices. How well such funding serves its intended purposes may depend in part on how timely it is and how well-tailored it is to its objectives.", "Duties and structures of state and local election systems may affect how quickly federal funding is claimed and used and how well the uses to which it is put serve federal objectives. For example, HAVA has authorized payments to states to meet its requirements (52 U.S.C. \u00a721007). It has directed those payments to be disbursed to states (52 U.S.C. \u00a721001(a)) and charged chief state election officials with overseeing decisions about how to spend them (52 U.S.C. \u00a721005(a)).", "State election officials run federal elections in some states, but those states are the exception. As noted in \" Implementation \" and \" Funding ,\" most states assign election administration implementation and funding duties to local officials. That means that the officials who receive HAVA funding and are charged with overseeing decisions about how to use it often differ from the officials who conduct and pay for the activities and resources it is intended to fund.", "That has had at least two reported consequences. First, in some cases, it has reportedly delayed access to or use of some HAVA funds. Directing HAVA funding to states introduces opportunities for state-level delays, such as decisions by state officials to wait to claim the funds or requirements in state law to obtain approval to do so. ", "Second, some local officials have stated the view that their states' shares of HAVA funding were not put to what they considered the areas of greatest need. Box 7 provides examples of such consequences as described by state and local officials in Nevada, Minnesota, and Virginia."], "subsections": []}, {"section_title": "Timeliness of Federal Information Sharing", "paragraphs": ["Congress can require or facilitate information sharing with states and localities by federal agencies. As with funding, the effectiveness of federal information sharing may depend in part on how timely it is.", "How quickly federal agencies share information with the appropriate state and local officials may be affected by the distribution of election administration duties at the state and federal levels. Box 8 provides an example of such an effect reported by NASS."], "subsections": []}]}, {"section_title": "Selected Effects of Federal Action on State and Local Duties and Structures", "paragraphs": ["Past federal action has resulted in both intentional and unintentional changes to state and local election systems. Some federal laws include provisions that are specifically designed to establish certain responsibilities for election administration at the state level. For example, the NVRA requires states to designate chief state election officials to coordinate state responsibilities under the act (52 U.S.C. \u00a720509), and HAVA charges chief state election officials with implementing a statewide voter registration system (52 U.S.C. \u00a721083(a)(1)(A)).", "Federal regulation has reportedly also had the side effect of shifting the distribution of other election administration duties. For example, the agency-based registration requirements in the NVRA divide voter registration responsibilities between traditional election offices and offices that had not historically been involved in election administration, such as motor vehicle and public assistance agencies (52 U.S.C. \u00a720504; 52 U.S.C. \u00a720506). According to Hale, Montjoy, and Brown, \"the need to pass implementing legislation and the complexity of legal and technical requirements\" in federal laws such as HAVA and the NVRA has also \"led many states to grant new or additional rule-making power\" to their chief state election officials."], "subsections": []}]}, {"section_title": "Potential Considerations for Congress", "paragraphs": ["Congress has considered legislation\u2014some of which has been enacted and some of which has not\u2014that would change election rules or the state and local systems that implement them. The interactions between the duties and structures of state and local election systems and past federal actions suggest some considerations that may be relevant to future congressional consideration of proposals that would affect the administration of federal elections. The following questions may be of interest to Members as they consider making changes to election administration or maintaining current rules and structures:", "How would any proposed change interact with the duties and structures of state and local election systems? Would the duties and structures of state and local election systems make a proposed change difficult to implement? Would the design of a proposed change need to be adjusted to accommodate variations between or within states? Which of the policy tools available to Congress is best suited to achieving the purpose of a proposed change? For example, would it be more effective to advance a proposed change with a federal requirement, or incentivize it via federal funding? How might the nature of the state and local system inform a proposed change? For example, if it is a federal requirement, who is charged with compliance; who is responsible for the tasks required for compliance; and what is the relationship between the two? If it is federal funding, to whom should it be distributed, and who should be involved in making decisions about how to use it? Would a proposed change have the effect, either intentionally or unintentionally, of altering the duties or structures of state or local election systems? If so, what are the advantages and disadvantages of such changes? Are there complications with a proposed change that are not specifically related to election administration? For example, could there be federalism-related issues with intervening in the relationships between states and their political subdivisions? "], "subsections": [{"section_title": "Appendix. Selected Federal Statutes Governing State and Local Administration of Federal Elections", "paragraphs": [], "subsections": []}]}]}}
{"id": "R40094", "title": "Iran\u2019s Nuclear Program: Tehran\u2019s Compliance with International Obligations", "released_date": "2019-04-01T00:00:00", "summary": ["Several U.N. Security Council resolutions adopted between 2006 and 2010 required Iran to cooperate fully with the International Atomic Energy Agency's (IAEA's) investigation of its nuclear activities, suspend its uranium enrichment program, suspend its construction of a heavy-water reactor and related projects, and ratify the Additional Protocol to its IAEA safeguards agreement. However, Tehran has implemented various restrictions on, and provided the IAEA with additional information about, its nuclear program pursuant to the July 2015 Joint Comprehensive Plan of Action (JCPOA), which Tehran concluded with China, France, Germany, Russia, the United Kingdom, and the United States. On the JCPOA's Implementation Day, which took place on January 16, 2016, all of the previous resolutions' requirements were terminated. The nuclear Nonproliferation Treaty (NPT) and U.N. Security Council Resolution 2231, which the Council adopted on July 20, 2015, compose the current legal framework governing Iran's nuclear program. Iran has complied with the JCPOA and resolution.", "Iran and the IAEA agreed in August 2007 on a work plan to clarify outstanding questions regarding Tehran's nuclear program. The IAEA had essentially resolved most of these issues, but for several years the agency still had questions concerning \"possible military dimensions to Iran's nuclear programme.\" A December 2, 2015, report to the IAEA Board of Governors from agency Director General Yukiya Amano contains the IAEA's \"final assessment on the resolution\" of the outstanding issues.", "This report provides a brief overview of Iran's nuclear program and describes the legal basis for the actions taken by the IAEA board and the Security Council. It will be updated as events warrant."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Iran ratified the nuclear Nonproliferation Treaty (NPT) in 1970. Article III of the treaty requires non-nuclear-weapon states-parties to accept comprehensive International Atomic Energy Agency (IAEA) safeguards; Tehran concluded a comprehensive safeguards agreement with the IAEA in 1974. In 2002, the agency began investigating allegations that Iran had conducted clandestine nuclear activities; the IAEA ultimately reported that some of these activities had violated Tehran's safeguards agreement. Following more than three years of investigation, the IAEA Board of Governors referred the matter to the U.N. Security Council in February 2006. Since then, the council adopted six resolutions requiring Iran to take steps to alleviate international concerns about its nuclear program. This report provides a brief overview of Iran's nuclear program and describes the legal basis for the actions taken by the IAEA board and the Security Council.", "For more detailed information about Iran's nuclear program, see CRS Report RL34544, Iran's Nuclear Program: Status , by Paul K. Kerr. For more information about the July 2015 Joint Comprehensive Plan of Action (JCPOA) concerning Iran's nuclear program, see CRS Report R43333, Iran Nuclear Agreement , by Kenneth Katzman and Paul K. Kerr. "], "subsections": [{"section_title": "Background", "paragraphs": ["Iran's nuclear program has generated widespread concern that Tehran is pursuing nuclear weapons. Tehran's construction of gas centrifuge uranium enrichment facilities has been the main source of proliferation concern. Gas centrifuges enrich uranium by spinning uranium hexafluoride gas at high speeds to increase the concentration of the uranium-235 isotope. Such centrifuges can produce both low-enriched uranium (LEU), which can be used in nuclear power reactors, and highly enriched uranium (HEU), which is one of the two types of fissile material used in nuclear weapons. HEU can also be used as fuel in certain types of nuclear reactors. Iran also has a uranium conversion facility, which converts uranium oxide into several compounds, including uranium hexafluoride. Tehran claims that it wants to produce LEU for its current and future power reactors.", "Iran's construction of a reactor moderated by heavy water has also been a source of concern. Although Tehran says that the reactor, which Iran is building at Arak, is intended for the production of medical isotopes, it was a proliferation concern because the reactor's spent fuel would have contained plutonium well-suited for use in nuclear weapons. In order to be used in nuclear weapons, however, plutonium must be separated from the spent fuel\u2014a procedure called \"reprocessing.\" Iran has said that it will not engage in reprocessing. Pursuant to the Joint Comprehensive Plan of Action (JCPOA), which Iran concluded in July 2015 with China, France, Germany, Russia, the United Kingdom, and the United States (collectively known as the \"P5+1\"), Tehran has rendered the Arak reactor's original core inoperable. Iran has also begun to fulfill a JCPOA requirement to redesign and rebuild the Arak reactor based on a design agreed to by the P5+1 so that it will not produce weapons-grade plutonium. The agreement also requires Iran to export the spent fuel from this reactor and all other nuclear reactors. ", "Iran and the IAEA agreed in August 2007 on a work plan to clarify the outstanding questions regarding Tehran's nuclear program. Most of these questions, which had contributed to suspicions that Iran had been pursuing a nuclear weapons program, were subsequently resolved. Then-IAEA Director General Mohamed ElBaradei, however, told the IAEA board June 2, 2008, that there was \"one remaining major [unresolved] issue,\" which concerns questions regarding \"possible military dimensions to Iran's nuclear programme.\" The IAEA agency did not make any substantive progress on these matters for some time. ", "Tehran has questioned the authenticity of some of the evidence underlying the agency's concerns and maintains that it has not done any work on nuclear weapons. Iran also expressed concern to the IAEA that resolving some of these issues would require agency inspectors to have \"access to sensitive information related to its conventional military and missile related activities.\" The IAEA, according to a September 2008 report from ElBaradei, stated its willingness to discuss with Iran ", "modalities that could enable Iran to demonstrate credibly that the activities referred to in the documentation are not nuclear related, as Iran asserts, while protecting sensitive information related to its conventional military activities.", "Indeed, the agency made several specific proposals, but Tehran did not provide the requested information. ", "The IAEA Board of Governors adopted a resolution on November 18, 2011, stating that \"it is essential\" for Iran and the IAEA \"to intensify their dialogue aiming at the urgent resolution of all outstanding substantive issues.\" IAEA and Iranian officials met 10 times between January 2012 and May 2013 to discuss what the agency termed a \"structured approach to the clarification of all outstanding issues related to Iran's nuclear programme.\" However, during an October 2013 meeting, IAEA officials and their Iranian counterparts decided to adopt a \"new approach\" to resolving these issues. Iran signed a joint statement with the IAEA on November 11, 2013, describing a \"Framework for Cooperation.\" According to the statement, Iran and the IAEA agreed to \"strengthen their cooperation and dialogue aimed at ensuring the exclusively peaceful nature of Iran's nuclear programme through the resolution of all outstanding issues that have not already been resolved by the IAEA.\" Iran subsequently provided the agency with information about several of the outstanding issues. Iran later agreed in May 2014 to provide information to the IAEA by August 25, 2014, about five additional issues, including alleged Iranian research on high explosives and \"studies made and/or papers published in Iran in relation to neutron transport and associated modelling and calculations and their alleged application to compressed materials.\" Iran subsequently provided information about four of these issues. ", "According to the JCPOA, Iran was to \"complete\" a series of steps set out in an Iran-IAEA \"Roadmap for Clarification of Past and Present Outstanding Issues.\" According to IAEA Director General Yukiya Amano, this road map set out \"a process\" under a November 24, 2013, Joint Plan of Action between Iran and the P5+1, \"to enable the Agency, with the cooperation of Iran, to make an assessment of issues relating to possible military dimensions to Iran's nuclear programme.\" According to a December 2, 2015, report from Amano to the IAEA Board of Governors, \"[a]ll the activities contained in the road-map were implemented in accordance with the agreed schedule.\" The road map required Amano to present this report, which contains the agency's \"final assessment on the resolution\" of the aforementioned outstanding issues. ", "In response, the board adopted a resolution on December 15, 2015, that notes Iran's cooperation with the road map and \"further notes that this closes the Board's consideration\" of the \"outstanding issues regarding Iran's nuclear programme.\" Since the IAEA has verified that Iran has taken the steps required for Implementation Day to take effect, the board is no longer focused on Iran's compliance with past Security Council resolutions and past issues concerning Iran's safeguards agreement. Instead, the board is focused on monitoring and verifying Iran's JCPOA implementation \"in light of\" United Nations Security Council Resolution 2231, which the Council adopted on July 20, 2015. This latter resolution requests the IAEA Director General \"to undertake the necessary verification and monitoring of Iran's nuclear-related commitments for the full duration of those commitments under the JCPOA.\"", "The December 2015 IAEA resolution requests the Director General to issue quarterly reports to the board regarding Iran's \"implementation of its relevant commitments under the JCPOA for the full duration of those commitments.\" The Director General is also to report to the Board of Governors and the Security Council \"at any time if the Director General has reasonable grounds to believe there is an issue of concern\" regarding Tehran's compliance with its JCPOA or safeguards obligations. The JCPOA and Resolution 2231 also contain a variety of reporting provisions for the IAEA. For example, the resolution requests the agency's Director General", "to provide regular updates to the IAEA Board of Governors and, as appropriate, in parallel to the Security Council on Iran's implementation of its commitments under the JCPOA and also to report to the IAEA Board of Governors and in parallel to the Security Council at any time if the Director General has reasonable grounds to believe there is an issue of concern directly affecting fulfilment of JCPOA commitments.", "Several U.N. Security Council Resolutions required Iran to cooperate fully with the IAEA's investigation of its nuclear activities, suspend its uranium enrichment program, suspend its construction of a heavy-water reactor and related projects, and ratify the Additional Protocol to its IAEA safeguards agreement. Tehran has signed, but not ratified, its Additional Protocol. Resolution 1929, which the council adopted in June 2010, contains these requirements and also required Tehran to refrain from \"any activity related to ballistic missiles capable of delivering nuclear weapons.\" Iran has also continued its extensive ballistic missile program. Resolution 1929 also required Iran to comply with the modified Code 3.1 of its subsidiary arrangements. (See \" Potential Noncompliance Since September 2005 .\") Iran did not take any of these steps prior to concluding the JCPOA, but did limit and reverse some aspects of its nuclear program since the government began implementing the November 2013 Joint Plan of Action. Moreover, pursuant to the Joint Plan of Action and its November 2013 agreement with the IAEA, Iran provided some information to the agency required by the modified Code 3.1.", "Pursuant to the JCPOA, Tehran has since implemented additional restrictions on its uranium enrichment program and heavy-water reactor program, as well as begun implementing its additional protocol and the modified Code 3.1. On the JCPOA's Implementation Day, which took place on January 16, 2016, all of the previous Security Council resolutions' requirements were terminated pursuant to U.N. Security Council Resolution 2231, which along with the NPT, composes the current legal framework governing Iran's nuclear program. Although the IAEA reports findings of its inspection and monitoring activities and the JCPOA-established Joint Commission monitors the parties' implementation of the agreement, compliance determinations are national decisions. \"Iran continued to adhere\" to its JCPOA commitments during 2017, according to an April 2018 State Department report covering that period. All official reports and statements from the United Nations, European Union, the IAEA, and the non-U.S. participating governments also indicate that Iran has complied with the JCPOA and related Resolution 2231 requirements.", "The most recent report from IAEA Director General Amano states that the IAEA has continued verification and monitoring of the restrictions described in Section T of the JCPOA, which prohibits a number of nuclear weapons-related activities. The agreement, as noted, describes arrangements for agency inspectors to gain access to Iranian sites, including military sites, other than those that Tehran has declared to the agency, \"if the IAEA has concerns regarding undeclared nuclear materials or activities, or activities inconsistent with\" the JCPOA. The agreement also provides for alternative means to clarify the matter. The IAEA has not reported whether it has requested access to any Iranian military facilities, but the agency has a number of methods other than inspections, such as analyzing open-source information and receiving intelligence briefings from governments, to monitor Iranian compliance with these and other JCPOA commitments. According to the April 2018 State Department report ", "[t]he IAEA continues to exercise its full authorities in pursuing any new safeguards-relevant or JCPOA-related information in Iran, including any new concerns regarding weaponization should they arise, through implementation of Iran's Safeguards Agreement, Additional Protocol, and the enhanced transparency and verification measures contained in the JCPOA.", "There are no apparent disputes between Iran and the IAEA with respect to Iranian cooperation with the agency. Amano noted in an October 2, 2018, statement that the IAEA has been able to access \"all the sites and locations in Iran which\" agency inspectors \"needed to visit.\" Similarly, a February 2019 report from Amano states that the IAEA \"has conducted complementary accesses under the Additional Protocol to all the sites and locations in Iran which it needed to visit.\""], "subsections": []}, {"section_title": "Iran and the IAEA", "paragraphs": ["As noted, Iran is a party to the NPT and has concluded a comprehensive safeguards agreement with the agency. Such agreements are designed to enable the IAEA to detect the diversion of nuclear material from peaceful purposes to nuclear weapons uses, as well as to detect undeclared nuclear activities and material. Safeguards include agency inspections and monitoring of declared nuclear facilities. Although comprehensive safeguards agreements give the IAEA the authority \"to verify the absence of undeclared nuclear material and activities, the tools available to it to do so, under such agreements, are limited,\" according to the agency. ", "As a practical matter, the IAEA's ability to inspect and monitor nuclear facilities, as well as obtain information, in a particular country pursuant to that government's comprehensive safeguards agreement is limited to facilities and activities that have been declared by the government. Additional Protocols to IAEA comprehensive safeguards agreements increase the agency's ability to investigate undeclared nuclear facilities and activities by increasing the IAEA's authority to inspect certain nuclear-related facilities and demand information from member states. Iran signed such a protocol in December 2003 and agreed to implement the agreement pending ratification. Tehran stopped adhering to its Additional Protocol in 2006.", "The IAEA's authority to investigate nuclear-weapons-related activity is limited. Then Director General ElBaradei explained in a 2005 interview that the IAEA does not have \"an all-encompassing mandate to look for every computer study on weaponization. Our mandate is to make sure that all nuclear materials in a country are declared to us.\" Similarly, a February 2006 report from ElBaradei to the IAEA board stated that \"absent some nexus to nuclear material the agency's legal authority to pursue the verification of possible nuclear weapons related activity is limited.\" There is no requirement that there be any nexus to nuclear material in order for the IAEA to request access to a facility, but there are disagreements among IAEA member states regarding the extent of the agency's rights to access locations where there is no reason to suspect the presence of nuclear material. Such disagreements could play a role if the IAEA Board is required to consider a request for special inspections in Iran or another country (see Appendix B ). Therefore, the closer the connection between nuclear material and the location in question, the more likely the Board would be to approve such an inspection.", "The current public controversy over Iran's nuclear program began in August 2002, when the National Council of Resistance on Iran (NCRI), an Iranian exile group, revealed information during a press conference (some of which later proved to be accurate) that Tehran had built nuclear-related facilities that it had not revealed to the IAEA. The United States had been aware of at least some of these activities, according to knowledgeable former officials. Prior to the NCRI's revelations, the IAEA had expressed concerns that Iran had not been providing the agency with all relevant information about its nuclear programs, but had never found Tehran in violation of its safeguards agreement.", "In fall 2002, the IAEA began to investigate Iran's nuclear activities at the sites named by the NCRI; inspectors visited the sites the following February. Adopting its first resolution on the matter in September 2003, the IAEA board called on Tehran to increase its cooperation with the agency's investigation, suspend its uranium enrichment activities, and \"unconditionally sign, ratify and fully implement\" an Additional Protocol.", "In October 2003, Iran concluded a voluntary agreement with France, Germany, and the United Kingdom, collectively known as the \"E3,\" to suspend its enrichment activities, sign and implement an Additional Protocol to its IAEA safeguards agreement, and comply fully with the IAEA's investigation. As a result, the agency's board decided to refrain from referring the matter to the U.N. Security Council. As noted, Tehran signed this Additional Protocol in December 2003, but has never ratified it.", "Ultimately, the IAEA's investigation, as well as information Iran provided after the October 2003 agreement, revealed that Iran had engaged in a variety of clandestine nuclear-related activities, some of which violated the country's safeguards agreement (see Appendix A ). After October 2003, Iran continued some of its enrichment-related activities, but Tehran and the E3 agreed in November 2004 to a more detailed suspension agreement. However, Iran resumed uranium conversion in August 2005 under the leadership of then-President Mahmoud Ahmadinejad, who had been elected two months earlier.", "On September 24, 2005, the IAEA Board of Governors adopted a resolution (GOV/2005/77) that, for the first time, found Iran to be in noncompliance with its IAEA safeguards agreement. The board, however, did not refer Iran to the Security Council, choosing instead to give Tehran additional time to comply with the board's demands. The resolution urged Iran", "to implement transparency measures including access to individuals, documentation relating to procurement, dual use equipment, certain military owned workshops, and research and development locations; to reestablish full and sustained suspension of all enrichment-related activity; to reconsider the construction of the research reactor moderated by heavy water; to ratify promptly and implement in full the Additional Protocol; and to continue to act in accordance with the provisions of the Additional Protocol.", "No international legal obligations required Tehran to take these steps. But ElBaradei's September 2008 report asserted that, without Iranian implementation of such \"transparency measures,\" the IAEA would \"not be in a position to progress in its verification of the absence of undeclared nuclear material and activities in Iran.\"", "Iran announced in January 2006 that it would resume research and development on its centrifuges at Natanz. The next month, the IAEA Board of Governors referred Iran's case to the U.N. Security Council. Tehran announced shortly after that it would stop implementing its Additional Protocol. (For details, see \" Iran and the U.N. Security Council \" below.)"], "subsections": [{"section_title": "Potential Noncompliance Since September 2005", "paragraphs": ["Iran further scaled back its cooperation with the IAEA in March 2007, when the government told the agency that it would stop complying with a portion of the subsidiary arrangements for its IAEA safeguards agreement. That provision (called the modified code 3.1), to which Iran agreed in February 2003, requires Tehran to provide design information for new nuclear facilities \"as soon as the decision to construct, or to authorize construction, of such a facility has been taken, whichever is earlier.\" Beginning in March 2007, Iran argued that it was only obligated to adhere to the previous notification provisions of its subsidiary arrangements, which required Tehran to provide design information for a new facility 180 days before introducing nuclear material into it. ", "This decision constituted the basis for Iran's stated rationale for its subsequent refusal to provide the IAEA with some information concerning its nuclear program. For example, Tehran had refused to provide updated design information for the heavy-water reactor under construction at Arak. As part of the November 2013 Joint Plan of Action, Iran submitted this information to the IAEA on February 12, 2014. Similarly, Tehran had refused to provide the IAEA with design information for a reactor that Iran intends to construct at Darkhovin. Although Iran provided the agency with preliminary design information about the Darkhovin reactor in a September 22, 2009, letter, the IAEA requested Tehran to \"provide additional clarifications\" of the information, according to a November 2009 report. Amano reported in September 2010 that Iran had \"provided only limited design information with respect to\" the reactor. IAEA reports since 2012 do not appear to address this issue.", "Tehran also argued, based on its March 2007 decision, that its failure to notify the IAEA before September 2009 that it has been constructing a gas-centrifuge uranium enrichment facility, called the Fordow facility, near the city of Qom was consistent with the government's safeguards obligations. Exactly when Iran decided to construct the facility is unclear. Amano reported in May 2012 that the IAEA has requested information from Iran regarding the Fordow construction decision. But Tehran, according to Amano's November 2015 report, has not yet provided all of this information. Subsequent reports from Amano have not addressed the issue.", "Both the 2007 decision, which the IAEA asked Iran to \"reconsider,\" and Tehran's refusal to provide the design information appear to be inconsistent with the government's safeguards obligations. Although Article 39 of Iran's safeguards agreement states that the subsidiary arrangements \"may be extended or changed by agreement between\" Iran and the IAEA, the agreement does not provide for a unilateral modification or suspension of any portion of those arrangements. Moreover, the IAEA legal adviser explained in a March 2009 statement that Tehran's failure to provide design information for the reactors is \"inconsistent with\" Iran's obligations under its subsidiary arrangements. The adviser, however, added that \"it is difficult to conclude that\" Tehran's refusal to provide the information \"in itself constitutes noncompliance with, or a breach of\" Iran's safeguards agreement. Nevertheless, a November 2009 report from ElBaradei described Tehran's failures both to notify the agency of the decision to begin constructing the Fordow facility, as well as to provide the relevant design information in a timely fashion, as \"inconsistent with\" Iran's safeguards obligations. The report similarly described Iran's delay in providing design information for the Darkhovin reactor. ", "Iran may also have violated its safeguards agreement if it decided to construct other new nuclear facilities without informing the IAEA. The agency has investigated whether Iran has made such decisions. For example, the IAEA has asked the government for information about Iranian statements that the government is planning to construct new uranium enrichment facilities, is designing a nuclear reactor similar to a research reactor located in Tehran, is producing fuel for four new research reactors, and is planning to construct additional nuclear power reactors. Pursuant to its November 2013 agreement with the IAEA, Iran has provided at least some of this information to the agency.", "Iran's March 2007 decision regarding the provision of information to the IAEA also formed the basis for Tehran's refusal until August 2009 to allow agency inspectors to verify design information for the Arak reactor. This action also appeared to be inconsistent with Tehran's safeguards agreement. Article 48 of that agreement states that the IAEA \"may send inspectors to facilities to verify the design information provided to the Agency\"; in fact, the agency has a \"continuing right\" to do so, according to a November 2008 report from ElBaradei. Moreover, the legal adviser's statement characterized Iran's refusal to allow IAEA inspectors to verify the Arak reactor's design information as \"inconsistent with\" Tehran's obligations under its safeguards agreement. IAEA inspectors visited the reactor facility in August 2009 to verify design information, according to a report ElBaradei issued the same month. Inspectors have visited the facility several more times, according to reports from Amano.", "In addition to the lapses described above, Iran's failure to notify the IAEA of its decision to produce enriched uranium containing a maximum of 20% uranium-235 in time for agency inspectors to adjust their safeguards procedures may, according to a February 2010 report from Amano, have violated Iran's IAEA safeguards agreement. Article 45 of that agreement requires that Tehran notify the IAEA \"with design information in respect of a modification relevant for safeguards purposes sufficiently in advance for the safeguards procedures to be adjusted when necessary,\" according to Amano's report, which describes Iran's enrichment decision as \"clearly relevant for safeguards purposes.\"", "The IAEA board has neither formally found that any of the Iranian actions described above are in noncompliance with Tehran's safeguards agreement, nor referred these issues to the U.N. Security Council. The IAEA board adopted a resolution on November 27, 2009, that described Iran's failure to notify the agency of the Fordow facility as \"inconsistent with\" the subsidiary arrangements under Iran's safeguards agreement, but this statement did not constitute a formal finding of noncompliance. A September 13, 2012, IAEA board resolution expressed \"serious concern\" that Tehran has not complied with the obligations described in IAEA Board of Governors and U.N. Security Council resolutions, but the September resolution did not contain a formal finding of noncompliance."], "subsections": []}]}, {"section_title": "Iran and the U.N. Security Council", "paragraphs": ["As noted, Iran announced in January 2006 that it would resume research and development on its centrifuges at Natanz. In response, the IAEA board adopted a resolution (GOV/2006/14) on February 4, 2006, referring the matter to the Security Council and reiterating its call for Iran to take the measures specified in the September resolution. Two days later, Tehran announced that it would stop implementing its Additional Protocol.", "On March 29, 2006, the U.N. Security Council President issued a statement, which was not legally binding, that called on Iran to \"take the steps required\" by the February IAEA board resolution. The council subsequently adopted six resolutions concerning Iran's nuclear program: 1696 (July 2006), 1737 (December 2006), 1747 (March 2007), 1803 (March 2008), 1835 (September 2008), and 1929 (June 2010). The second, third, fourth, and sixth resolutions imposed a variety of restrictions on Iran.", "Resolution 1696 was the first to place legally binding Security Council requirements on Iran with respect to its nuclear program. That resolution made mandatory the IAEA-demanded suspension and called on Tehran to implement the transparency measures called for by the IAEA board's February 2006 resolution. Resolution 1737 reiterated these requirements but expanded the suspension's scope to include \"work on all heavy water-related projects.\" It is worth noting that the Security Council has acknowledged (in Resolution 1803, for example) Iran's rights under Article IV of the NPT, which states that parties to the treaty have \"the inalienable right ... to develop research, production and use of nuclear energy for peaceful Purposes.\" As noted, Resolution 1929 also required Tehran to refrain from \"any activity related to ballistic missiles capable of delivering nuclear weapons\" and to comply with the modified Code 3.1 of its subsidiary arrangement.", "Resolution 2231, which the U.N. Security Council adopted on July 20, 2015, states that all of the previous resolutions' requirements would be terminated when the council receives a report from the IAEA stating that Iran has implemented the nuclear-related measures by Implementation Day, as described by the July 2015 Joint Comprehensive Plan of Action. As noted, Implementation Day took place on January 16, 2016. Resolution 2231 also \"reaffirms that Iran shall cooperate fully as the IAEA requests to be able to resolve all outstanding issues, as identified in IAEA reports.\" The IAEA Board of Governors' December 2015 resolution noted that the board had closed its consideration of the \"outstanding issues regarding Iran's nuclear programme.\"", "The JCPOA spells out a process for Iran or the P5+1 to resolve disputes over alleged breaches of their JCPOA commitments pursuant to the agreement. Both the JCPOA and Resolution 2231 contain a \"snap back\" mechanism to reimpose sanctions should Iran fail to resolve satisfactorily a P5+1 claim regarding Iranian JCPOA noncompliance. This mechanism provides that any permanent UN Security Council member would be able to veto a Security Council resolution that would preserve U.N. sanctions relief in the event of Iranian noncompliance. The JCPOA specifies that, in such a case, \"the provisions of the old U.N. Security Council resolutions would be re-imposed, unless the U.N. Security Council decides otherwise.\" The other P5+1 states are able to invoke this mechanism, but whether the United States may do so is unclear because Resolution 2231 provides that only a \"JCPOA participant state\" may bring a noncompliance finding to the Security Council; U.S. officials have stated that the United States is no longer participating in the agreement."], "subsections": []}]}, {"section_title": "Authority for IAEA and U.N. Security Council Actions", "paragraphs": ["The legal authority for the actions taken by the IAEA Board of Governors and the U.N. Security Council is found in both the IAEA Statute and the U.N. Charter. The following sections discuss the relevant portions of those documents."], "subsections": [{"section_title": "IAEA Statute48", "paragraphs": ["Two sections of the IAEA Statute explain what the agency should do if an IAEA member state is found to be in noncompliance with its safeguards agreement. Article III B. 4. of the statute states that the IAEA is to submit annual reports to the U.N. General Assembly and, \"when appropriate,\" to the U.N. Security Council. If \"there should arise questions that are within the competence of the Security Council,\" the article adds, the IAEA \"shall notify the Security Council, as the organ bearing the main responsibility for the maintenance of international peace and security.\"", "Additionally, Article XII C. states that IAEA inspectors are to report noncompliance issues to the agency's Director General, who is to report the matter to the IAEA Board of Governors. The board is then to \"call upon the recipient State or States to remedy forthwith any non-compliance which it finds to have occurred,\" as well as \"report the non-compliance to all members and to the Security Council and General Assembly of the United Nations.\"", "In the case of Iran, the September 24, 2005, IAEA board resolution (GOV/2005/77) stated that the board", "found that Iran's many failures and breaches of its obligations to comply with its NPT Safeguards Agreement, as detailed in GOV/2003/75 [a November 2003 report from then-Director General ElBaradei], constitute non compliance in the context of Article XII.C of the Agency's Statute;", "According to the resolution, the board also found", "that the history of concealment of Iran's nuclear activities referred to in the Director General's report [GOV/2003/75], the nature of these activities, issues brought to light in the course of the Agency's verification of declarations made by Iran since September 2002 and the resulting absence of confidence that Iran's nuclear programme is exclusively for peaceful purposes have given rise to questions that are within the competence of the Security Council, as the organ bearing the main responsibility for the maintenance of international peace and security.", "ElBaradei issued the report cited by the resolution, GOV/2003/75, in November 2003. It described a variety of Iranian nuclear activities, which are detailed in Appendix A , that violated Tehran's safeguards agreement. ElBaradei subsequently reported that Iran has taken corrective measures to address these safeguards breaches. As noted above, the 2005 resolution called on Iran to take a variety of actions that Tehran was not legally required to implement."], "subsections": []}, {"section_title": "U.N. Charter and the Security Council", "paragraphs": ["Several articles of the U.N. Charter, which is a treaty, describe the Security Council's authority to impose requirements and sanctions on Iran. Article 24 confers on the council \"primary responsibility for the maintenance of international peace and security.\" The article also states that the \"specific powers granted to the Security Council for the discharge of these duties are laid down\" in several chapters of the charter, including Chapter VII, which describes the actions that the council may take in response to \"threats to the peace, breaches of the peace, and acts of aggression.\"", "Chapter VII of the charter contains three articles relevant to the Iran case. Security Council resolutions that made mandatory the IAEA's demands concerning Iran's nuclear program invoked Chapter VII. Article 39 of that chapter states that the council", "shall determine the existence of any threat to the peace, breach of the peace, or act of aggression and shall make recommendations, or decide what measures shall be taken in accordance with Articles 41 and 42, to maintain or restore international peace and security.", "Resolution 1696 invoked Article 40 of Chapter VII \"in order to make mandatory the suspension required by the IAEA.\" As noted, that resolution did not impose any sanctions on Iran. Article 40 states that", "the Security Council may, before making the recommendations or deciding upon the measures provided for in Article 39 [of Chapter VII], call upon the parties concerned to comply with such provisional measures as it deems necessary or desirable.", "Resolutions 1737, 1747, 1803, and 1929, which did impose sanctions, invoked Article 41 of Chapter VII. According to Article 41, the Security Council", "may decide what measures not involving the use of armed force are to be employed to give effect to its decisions, and it may call upon the Members of the United Nations to apply such measures. These may include complete or partial interruption of economic relations and of rail, sea, air, postal, telegraphic, radio, and other means of communication, and the severance of diplomatic relations.", "As noted, Security Council resolution 1835 did not impose new sanctions, but reaffirmed the previous resolutions and called on Iran to comply with them. ", "It is worth noting that Article 25 of the U.N. Charter obligates U.N. members \"to accept and carry out the decisions of the Security Council.\" Moreover, Article 103 of the Charter states that ", "[i]n the event of a conflict between the obligations of the Members of the United Nations under the present Charter and their obligations under any other international agreement, their obligations under the present Charter shall prevail.", "The IAEA also has an obligation to cooperate with the Security Council, \"[b]y virtue of its Relationship Agreement with the United Nations.\" As noted, Security Council Resolution 2231 requests the IAEA Director General \"to undertake the necessary verification and monitoring of Iran's nuclear-related commitments for the full duration of those commitments under the JCPOA.\""], "subsections": []}]}, {"section_title": "Has Iran Violated the NPT?53", "paragraphs": ["Whether Iran has violated the NPT is unclear. The treaty does not contain a mechanism for determining that a state-party has violated its obligations. Moreover, there does not appear to be a formal procedure for determining such violations. An NPT Review Conference would, however, be one venue for NPT states-parties to make such a determination.", "The U.N. Security Council has never declared Iran to be in violation of the NPT; neither the council nor the U.N. General Assembly has a responsibility to adjudicate treaty violations. However, the lack of a ruling by the council on Iran's compliance with the NPT has apparently had little practical effect because, as noted, the council has taken action in response to the IAEA Board of Governors' determination that Iran has violated its safeguards agreement.", "Iran's violations of its safeguards agreement appear to constitute violations of Article III, which requires NPT non-nuclear-weapon states-parties to accept IAEA safeguards, in accordance with the agency's statue, \"for the exclusive purpose of verification of the fulfillment of its obligations assumed under this Treaty with a view to preventing diversion of nuclear energy from peaceful uses to nuclear weapons or other nuclear explosive devices.\"", "Tehran may also have violated provisions of Article II which state that non-nuclear-weapon states-parties shall not \"manufacture or otherwise acquire nuclear weapons or other nuclear explosive devices\" or \"seek or receive any assistance in the manufacture of nuclear weapons or other nuclear explosive devices.\"", "As noted, the IAEA investigated evidence of what then-IAEA Director General Mohamed ElBaradei described in June 2008 as \"possible military dimensions to Iran's nuclear programme.\" Such activities may indicate that Tehran has violated both Article II provisions described above. Moreover, a November 2007 National Intelligence Estimate (NIE) stated that \"until fall 2003, Iranian military entities were working under government direction to develop nuclear weapons.\" This past program could be a violation of Article II, although the estimate does not provide any detail about the program. Nevertheless, the IAEA has never reported that Iran has attempted to develop nuclear weapons. ", "Despite the lack of such an IAEA conclusion, a 2005 State Department report regarding states' compliance with nonproliferation agreements argued that the country had violated Article II of the NPT:", "The breadth of Iran's nuclear development efforts, the secrecy and deceptions with which they have been conducted for nearly 20 years, its redundant and surreptitious procurement channels, Iran's persistent failure to comply with its obligations to report to the IAEA and to apply safeguards to such activities, and the lack of a reasonable economic justification for this program leads us to conclude that Iran is pursuing an effort to manufacture nuclear weapons, and has sought and received assistance in this effort in violation of Article II of the NPT.", "The report also stated that Iran's \"weapons program combines elements\" of Tehran's declared nuclear activities, as well as suspected \"undeclared fuel cycle and other activities that may exist, including those that may be run solely by the military.\"", "The State Department's 2005 reasoning appears to be based on an interpretation of the NPT which holds that a wide scope of nuclear activities could constitute violations of Article II. The 2005 report states that assessments regarding Article II compliance \"must look at the totality of the facts, including judgments as to\" a state-party's \"purpose in undertaking the nuclear activities in question.\" The report also includes a list of activities which could constitute such noncompliance. ", "The 2005 State Department report cites testimony from then-Arms Control and Disarmament Agency Director William Foster during a 1968 Senate Foreign Relations Committee hearing. Foster stated that \"facts indicating that the purpose of a particular activity was the acquisition of a nuclear explosive device would tend to show non-compliance\" with Article II. He gave two examples: \"the construction of an experimental or prototype nuclear explosive device\" and \"the production of components which could only have relevance\" to such a device. However, Foster also noted that a variety of other activities could also violate Article II, adding that the United States believed it impossible \"to formulate a comprehensive definition or interpretation.\"", "It is worth noting that the 2005 State Department report's arguments appear to rely heavily on the notion that a state's apparent intentions underlying certain nuclear-related activities can be used to determine violations of Article II. This interpretation is not shared by all experts. The 2005 report \"primarily reflected activities from January 2002 through December 2003.\" Whether the State Department assesses that Iran has violated Article II since then is unclear. A version of the report released in 2010, which primarily reflected activities from January 1, 2004, through December 31, 2008, states that \"the issues underlying\" the 2005 report's conclusion regarding Iran's Article II compliance \"remain unresolved.\" Subsequent versions of the report reiterated the 2010 report's assessment until 2016, when the State Department assessed that \"previous issues leading to NPT noncompliance findings [regarding Iran] had been resolved.\" As noted, the 2007 NIE assessed that Iran halted its nuclear weapons program in 2003; subsequent U.S. official statements have consistently reiterated that Tehran has not yet decided to build nuclear weapons. The United Kingdom's then-Foreign Secretary William Hague would not say whether Iran had violated Article II when asked by a Member of Parliament in March 2012.", "Appendix A. Iranian Noncompliance with Its IAEA Safeguards Agreement", "The November 2003 report (GOV/2003/75) from IAEA Director General ElBaradei to the agency's Board of Governors details what the September 2005 board resolution described as \"Iran's many failures and breaches of its obligations to comply with its safeguards agreement.\"", "The report stated that", "Iran has failed in a number of instances over an extended period of time to meet its obligations under its Safeguards Agreement with respect to the reporting of nuclear material and its processing and use, as well as the declaration of facilities where such material has been processed and stored.", "The report detailed some of these failures and referenced other failures described in two earlier reports (GOV/2003/40 and GOV/2003/63) from ElBaradei to the IAEA board.", "According to GOV/2003/40, Iran failed to declare the following activities to the agency:", "The importation of natural uranium, and its subsequent transfer for further processing. The processing and use of the imported natural uranium, including the production and loss of nuclear material, and the production and transfer of resulting waste.", "Additionally, Iran failed to", "declare the facilities where nuclear material (including the waste) was received, stored, and processed; provide in a timely manner updated design information for a research reactor located in Tehran; as well as provide in a timely manner information on two waste storage sites.", "GOV/2003/63 stated that Iran failed to report uranium conversion experiments to the IAEA. According to GOV/2003/75, Iran failed to report the following activities to the IAEA:", "The use of imported natural uranium hexafluoride for the testing of centrifuges, as well as the subsequent production of enriched and depleted uranium. The importation of natural uranium metal and its subsequent transfer for use in laser enrichment experiments, including the production of enriched uranium, the loss of nuclear material during these operations, and the production and transfer of resulting waste. The production of a variety of nuclear compounds from several different imported nuclear materials, and the production and transfer of resulting wastes. The production of uranium targets and their irradiation in the Tehran Research Reactor, the subsequent processing of those targets (including the separation of plutonium), the production and transfer of resulting waste, and the storage of unprocessed irradiated targets.", "Iran also failed to provide the agency with design information for a variety of nuclear-related facilities, according to the report. These included the following:", "A centrifuge testing facility. Two laser laboratories and locations where resulting wastes were processed. Facilities involved in the production of a variety of nuclear compounds. The Tehran Research Reactor (with respect to the irradiation of uranium targets), the hot cell facility where the plutonium separation took place, as well as the relevant waste handling facility.", "Additionally, the report cited Iran's \"failure on many occasions to co-operate to facilitate the implementation of safeguards, through concealment\" of its nuclear activities.", "Appendix B. IAEA Special Inspections", "As noted, Iran's obligations under its Additional Protocol to provide access to certain locations are unclear; Tehran may refuse to grant the IAEA access to certain facilities. In such a case, the IAEA Director General could call for a special inspection; the inspection could require approval from the IAEA Board of Governors. According to the IAEA, an inspection is deemed to be special when it is in addition to IAEA routine inspections or \"involves access to information or locations\" that have not been identified to the IAEA as part of the agency's implementation of safeguards in that country. Such inspections \"are foreseen in all Agency safeguards agreements, principally as a means for the Agency to resolve unforeseen verification problems,\" according to a 1991 IAEA document. Paragraph 73 of the model safeguards agreement, INFCIRC 153, states that comprehensive safeguards agreements should provide for the IAEA's ability to \"make special inspections,\" subject to certain procedures, if the agency ", "considers that information made available by the State, including explanations from the State and information obtained from routine inspections, is not adequate for the Agency to fulfill its responsibilities under the Agreement. ", "According to the 1991 document, a special inspection could be triggered by the IAEA's receipt of \"plausible information, which is not adequately explained by the State or otherwise resolved\" by other IAEA inspections that the country has \"nuclear material in a nuclear activity\" outside of IAEA safeguards, or that the state has an undeclared nuclear facility that it had been required to report to the agency. ", "The IAEA Director General \"has the authority ... to determine the need for, and to direct the carrying out of, special inspections,\" according to another 1991 IAEA paper. In the event that the IAEA argues for a special inspection in a country, the agency and the government \"must hold immediate consultations,\" according to the 1991 paper. Any dispute regarding the inspection request must be resolved according to dispute settlement provisions described in INFCIRC 153. However, paragraph 18 of INFCIRC 153 states that", "if the Board, upon report of the Director General, decides that an action by the State is essential and urgent in order to ensure verification that nuclear material subject to safeguards under the Agreement is not diverted to nuclear weapons or other nuclear explosive devices the Board shall be able to call upon the State to take the required action without delay, irrespective of whether procedures for the settlement of a dispute have been invoked.", "If the state refuses the inspection, the IAEA Board of Governors can take action according to paragraph 19 of INFCIRC 153, including reporting the matter to the U.N. Security Council.", "Appendix C. Extended Remarks by William Foster Regarding Possible NPT Article II Violations", "On July 10, 1968, then-Arms Control and Disarmament Agency Director William Foster testified before the Senate Foreign Relations Committee about the NPT. In response to a question regarding the type of nuclear activities prohibited by Article II of the treaty, Foster supplied the following statement:", "Extension of Remarks by Mr. Foster in Response to Question Regarding Nuclear Explosive Devices", "The treaty articles in question are Article II, in which non-nuclear-weapon parties undertake \"not to manufacture or otherwise acquire nuclear weapons or other nuclear explosive devices,\" and Article IV, which provides that nothing in the Treaty is to be interpreted as affecting the right of all Parties to the Treaty \"to develop research, production and use of nuclear energy for peaceful purposes\u2026in conformity with Articles I and II of this Treaty.\" In the course of the negotiation of the Treaty, United States representatives were asked their views on what would constitute the \"manufacture\" of a nuclear weapon or other nuclear explosive device under Article II of the draft treaty. Our reply was as follows:", "\"While the general intent of this provision seems clear, and its application to cases such as those discussed below should present little difficulty, the United States believe [sic] it is not possible at this time to formulate a comprehensive definition or interpretation. There are many hypothetical situations which might be imagined and it is doubtful that any general definition or interpretation, unrelated to specific fact situations could satisfactorily deal with all such situations.", "\"Some general observations can be made with respect to the question of whether or not a specific activity constitutes prohibited manufacture under the proposed treaty. For example, facts indicating that the purpose of a particular activity was the acquisition of a nuclear explosive device would tend to show non-compliance. (Thus, the construction of an experimental or prototype nuclear explosive device would be covered by the term 'manufacture' as would be the production of components which could only have relevance to a nuclear explosive device.) Again, while the placing of a particular activity under safeguards would not, in and of itself, settle the question of whether that activity was in compliance with the treaty, it would of course be helpful in allaying any suspicion of non-compliance.", "\"It may be useful to point out, for illustrative purposes, several activities which the United States would not consider per se to be violations of the prohibitions in Article II. Neither uranium enrichment nor the stockpiling of fissionable material in connection with a peaceful program would violate Article II so long as these activities were safeguarded under Article III. Also clearly permitted would be the development, under safeguards, of plutonium fueled power reactors, including research on the properties of metallic plutonium, nor would Article II interfere with the development or use of fast breeder reactors under safeguards.\""], "subsections": []}]}}
{"id": "R45111", "title": "The Joint Select Committee on Budget and Appropriations Process Reform", "released_date": "2019-03-26T00:00:00", "summary": ["The Bipartisan Budget Act of 2018 (P.L. 115-123), signed into law on February 9, 2018, created a joint select committee of the House and Senate. The Joint Select Committee on Budget and Appropriations Process Reform was to be made up of 16 Members from the House and Senate\u20144 chosen by each of the chambers' party leaders. The act charged the joint select committee with formulating recommendations and legislative language to \"significantly reform the budget and appropriations process.\" The law directed the committee to make a report no later than November 30, 2018, to be submitted, along with legislative language, to the President, the Speaker of the House, and the majority and minority leaders of the House and Senate.", "The act included procedures intended to allow the Senate to reach a timely vote on the question of whether or not to consider any legislation embodying the recommendations of the joint select committee. Under the terms of the act, the Senate would be able to vote on a motion to proceed to consider any reported joint committee bill before the conclusion of the 115th Congress (2017-2018). Consideration of the motion to proceed (and all debatable motions and appeals in connection therewith) was to be limited to 10 hours, equally divided and controlled by the majority and minority leaders (or their designees) with support of at least three-fifths of the Senate (60 votes if there is no more than one vacancy) necessary to approve the motion. The act did not specify any procedures governing consideration of the bill once the Senate had agreed to take it up. There were also no provisions in the act concerning the consideration of the recommendations of the joint select committee in the House nor any provisions concerning resolving any differences between the House and Senate. Such actions would have occurred under the regular procedures of each chamber.", "During its lifespan, the joint select committee held five days of hearings, taking testimony from 12 outside witnesses and 27 Members, including then-Speaker of the House Paul Ryan and then-House Minority Leader Nancy Pelosi.", "Formal and informal discussions among committee members resulted in draft legislation to be considered in a markup that concluded on November 29, 2018. The chief recommendation in the draft provided for the budget resolution to be adopted for a two-year cycle rather than the current annual cycle. By unanimous consent, the committee members applied a voting rule for the adoption of amendments consistent with the rule required by the act for final adoption of any recommendations requiring separate majorities of the appointees from each party. The final vote on reporting the bill as amended was not agreed to by a roll-call vote of one aye and seven noes of the Members appointed by the Speaker of the House and the Senate majority leader and seven ayes and zero noes of the Members appointed by the House minority leader and the Senate minority leader."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "What Was the Joint Select Committee and Why Was It Created?", "paragraphs": ["On February 9, 2018, President Trump signed the Bipartisan Budget Act of 2018 into law ( P.L. 115-123 ). Subtitle B of Title IV provided for the creation of a Joint Select Committee on Budget and Appropriations Process Reform. The creation of this committee echoed a number of special panels created by Congress in the past in order to study and make recommendations on various issues unconstrained by existing committee jurisdictions. Prior examples include committees tasked with studying a wide spectrum of issues, including both budget process\u2014such as the Joint Committee to Study Budget Control (created by P.L. 92-599)\u2014and other topics, such as the Senate Select Committee to Study Governmental Operations with Respect to Intelligence Activities (also known as the Church Committee after its chairman, Senator Frank Church, created by S.Res. 2 , 94 th Congress)."], "subsections": []}, {"section_title": "What Was the Authority and Jurisdiction of the Joint Select Committee?", "paragraphs": ["The act directed the joint select committee to \"provide recommendations and legislative language that will significantly reform the budget and appropriations process.\""], "subsections": []}, {"section_title": "What Was the Membership of the Committee?", "paragraphs": ["The act required that the committee be composed of 16 members, with 4 members appointed by each of the Speaker of the House, the minority leader of the House, the majority leader of the Senate, and the minority leader of the Senate. Members were appointed to serve for the life of the committee, with any vacancy to be filled within 14 calendar days.", "The act further stated that the committee would be led by cochairs. One cochair was to be appointed jointly by the Speaker of the House and the majority leader of the Senate, with the other cochair to be appointed jointly by the House and Senate minority leaders.", "The four members of the joint select committee appointed by then-Speaker Paul Ryan were House Budget Committee Chairman Steve Womack (who served as committee cochair), House Rules Committee Chairman Pete Sessions, and Representatives Rob Woodall and Jodey Arrington. The four members appointed by then-House Minority Leader Nancy Pelosi were House Appropriations Committee ranking member Nita M. Lowey (who served as committee cochair), House Budget Committee ranking member John Yarmuth, and Representatives Lucille Roybal-Allard and Derek Kilmer. ", "The four members appointed by Senate Majority Leader Mitch McConnell were Senators Roy Blunt, David Perdue, James Lankford, and Joni Ernst. The four members appointed by Senate Minority Leader Charles Schumer were Senators Sheldon Whitehouse, Michael Bennet, Brian Schatz, and Mazie Hirono.", "Under the act, the joint select committee terminated on December 31, 2018."], "subsections": []}, {"section_title": "How Was the Committee Staffed and Funded?", "paragraphs": ["Federal agencies (including legislative branch agencies) were tasked with providing technical assistance to the committee if requested in writing by the cochairs, and employees of the legislative branch could be detailed to the committee on a nonreimbursable basis consistent with the rules and regulations of the Senate.", "The act provided an authorization for use of not more than $500,000 from the appropriations account for ''Expenses of Inquiries and Investigations'' of the Senate with such sums to be disbursed by the Secretary of the Senate, in accordance with Senate rules and procedures, upon vouchers signed by the joint panel's cochairs."], "subsections": []}, {"section_title": "What Were the Responsibilities of the Committee?", "paragraphs": [], "subsections": [{"section_title": "Meetings and Hearings", "paragraphs": ["The committee was required to hold its first meeting not later than 30 calendar days after the date of enactment, with the cochairs of the committee required to provide an agenda to committee members at least 48 hours in advance of any meeting. The initial organizing meeting was held on March 7, 2018, with additional working group meetings held on August 22, September 13, and September 26, 2018, and a markup held on November 15, 27, and 29, 2018.", "The committee was also authorized and expected to hold hearings and take testimony from witnesses. Each cochair was entitled to select an equal number of witnesses for each hearing. Witnesses appearing before the committee were required to file a written statement of proposed testimony at least two calendar days before his or her appearance.", "The law specified that nine members of the committee would constitute a quorum for purposes of voting and meeting, and five members of the committee would constitute a quorum for holding hearings."], "subsections": []}, {"section_title": "Report and Recommendations", "paragraphs": ["The act stated that the committee provide recommendations and legislative language to significantly reform the budget and appropriations process. The committee was required to vote by November 30, 2018, on (1) a report containing a detailed statement of the findings, conclusions, and recommendations of the committee and (2) proposed legislative language to carry out those recommendations.", "The text of any report and proposed legislative language were required to be made publicly available in electronic form at least 24 hours prior to its consideration by the joint select committee. The act required the report and the proposed legislative language to be approved by a majority of each of (1) the committee members appointed by the Speaker of the House and the majority leader of the Senate and (2) the committee members appointed by the House and Senate minority leaders. The law specified that nine members of the committee would constitute a quorum for purposes of voting, with no proxy voting permitted.", "If the committee voted to report recommendations and legislative language, members were to be allowed the opportunity to file supplemental, minority, or additional views to be included in a committee report."], "subsections": []}]}, {"section_title": "What Was to Happen Once the Committee Reported?", "paragraphs": ["Under the act, if the committee had approved a report and legislative language, it would have been required to make them available to the public \"promptly\" and submit them to the President, the Vice President, the Speaker of the House, and the majority and minority leaders of each chamber within 15 calendar days of approval.", "Upon receipt of proposed legislative language, the Senate majority leader (or his designee) was required to introduce it in the Senate (by request) on the next day on which the Senate was in session. There were no provisions in the law concerning the introduction of the recommendations of the joint select committee in the House."], "subsections": []}, {"section_title": "Were There Procedures Established for Congressional Consideration of the Committee's Recommendations?", "paragraphs": ["The Bipartisan Budget Act established certain unique procedures for Senate consideration of any legislative language reported by the joint select committee. These procedures were intended to allow the Senate to reach a timely vote on the question of whether or not to consider legislation embodying the recommendations of the joint select committee, but the act did not specify any procedures governing consideration of the bill once the Senate agreed to take it up. There were no provisions in the act concerning the consideration of the recommendations of the joint select committee in the House. There were also no provisions concerning resolving any differences between the House and Senate or the consideration of a veto message from the President. Such actions would have occurred under the regular procedures of each chamber."], "subsections": [{"section_title": "Committee Consideration in the Senate", "paragraphs": ["Once any recommendations of the joint select committee were introduced in the Senate, the bill would be referred to the Senate Committee on the Budget, which was required to report the bill favorably, unfavorably, or without recommendation within seven session days\u2014but without any revisions. If the Budget Committee failed to report the bill within that period, it would be automatically discharged from consideration of the bill, and the bill would be placed on the Senate Calendar of Business."], "subsections": []}, {"section_title": "The Motion to Proceed in the Senate", "paragraphs": ["Not later than two days of Senate session after a joint committee bill was reported or discharged from the Budget Committee, the majority leader (or his designee) could move to proceed to consider it. Should the majority leader (or his designee) not make such a motion within two session days, any Senator could do so.", "The motion to consider a joint committee bill\u2014and all debatable motions and appeals in connection with the motion\u2014would be considered for a maximum of 10 hours, evenly divided between the majority leader and the minority leader (or their designees). A nondebatable motion to further limit debate would be in order and would require a vote of three-fifths of all Senators\u201460 votes if there is not more than one vacancy\u2014to pass.", "In order for the recommendations of the joint select committee to be considered by the full Senate, the act required that the motion to proceed be agreed to by a vote of three-fifths of all Senators\u201460 votes if there is not more than one vacancy.", "The act further specified that all points of order against the motion to proceed are waived and that a motion to postpone the motion to proceed or a motion to reconsider a vote on it are not in order.", "Finally, the act directed that not later than the last day of the 115 th Congress (2017-2018), the Senate must vote on a motion to proceed to a bill containing recommendations of the joint select committee."], "subsections": []}, {"section_title": "Floor Consideration in the Senate", "paragraphs": ["If the Senate approved the motion to proceed, the joint committee bill could then be considered under the regular rules of the Senate, meaning that it would be fully debatable and fully amendable (possibly including by nongermane amendments) and that cloture might need to be invoked on one or more questions (requiring the support of three-fifths of all Senators) in order to reach a final vote."], "subsections": []}]}, {"section_title": "What Did the Committee Do?", "paragraphs": [], "subsections": [{"section_title": "Committee Hearings24", "paragraphs": ["The joint select committee held five days of public hearings.", "April 17: current challenges facing the budget and appropriations process in Congress and possibilities for improvement; May 9: challenges of the current procedural framework, particularly as it relates to the ability of Members to work effectively and in a bipartisan manner regardless of political dynamics; May 24: the role of the budget resolution and possible options to bolster its impact and influence on subsequent budgetary actions; June 27: testimony heard from 27 Members of the House and Senate (and written statements received from 5 others), including Speaker of the House Paul Ryan and Hou se Minority Leader, Nancy Pelosi; July 17: former Members' historical perspective on enacting budgetary legislation in the context of the challenges presented by both the politics and the framework of the budget and appropriations process."], "subsections": []}, {"section_title": "Committee Markup", "paragraphs": ["The committee held multiple meetings, both formal and informal, to provide its members a forum to discuss reforms to the budget and appropriations process. These meetings\u2014including working sessions on August 22, September 13, and September 26, 2018\u2014provided the basis for the recommendations that were subsequently incorporated into draft legislation to be considered by the committee as the cochair's mark.", "The cochair's mark included a recommendation that the budget resolution be adopted for a two-year cycle rather than the current annual cycle. The draft also addressed a number of related concerns, such as allowing reconciliation instructions for both years of a biennium, providing for a revision of the budget resolution in the second session of a Congress to update it for scoring purposes, and revising the requirements concerning the submission and content of the President's budget in the second year of a biennium. The recommendations also provided for a change in the membership of the Senate Budget Committee to be comprised of eight members from the majority and seven members from the minority, including the chairs and ranking members from the Appropriations and Finance Committees, and for the House and Senate Budget Committees to hold a joint hearing on the fiscal state of the nation.", "On November 15, 2018, the committee began marking up the draft legislation. In that markup, the committee agreed by unanimous consent to apply a voting rule for the adoption of amendments consistent with the rule required by the act for final adoption of any recommendations. This agreement required separate majorities of the appointees from each party. The markup continued on November 27 and 29. The final vote on reporting the draft bill, as amended, was not agreed to by a roll-call vote of one aye and seven noes of the Members appointed by the Speaker of the House and the Senate majority leader and seven ayes and zero noes of the Members appointed by the House minority leader and the Senate minority leader."], "subsections": []}]}]}}
{"id": "RL32760", "title": "The Temporary Assistance for Needy Families (TANF) Block Grant: Responses to Frequently Asked Questions", "released_date": "2019-04-12T00:00:00", "summary": ["The Temporary Assistance for Needy Families (TANF) block grant funds a wide range of benefits and services for low-income families with children. TANF was created in the 1996 welfare reform law (P.L. 104-193). This report responds to some frequently asked questions about TANF; it does not describe TANF rules (see, instead, CRS Report RL32748, The Temporary Assistance for Needy Families (TANF) Block Grant: A Primer on TANF Financing and Federal Requirements, by Gene Falk).", "TANF Funding and Expenditures. TANF provides fixed funding for the 50 states, the District of Columbia, the territories, and American Indian tribes. The basic block grant totals $16.5 billion per year. States are also required in total to contribute, from their own funds, at least $10.3 billion annually under a maintenance-of-effort (MOE) requirement.", "Though TANF is best known for funding cash assistance payments for needy families with children, the block grant and MOE funds are used for a wide variety of benefits and activities. In FY2017, expenditures on basic assistance totaled $7.1 billion\u201423% of total federal TANF and MOE dollars. Basic assistance is often\u2014but not exclusively\u2014paid as cash. In addition to funding basic assistance, TANF also contributes funds for child care and services for children who have been, or are at risk of being, abused and neglected. Some states also count expenditures in prekindergarten programs toward the MOE requirement.", "The TANF Assistance Caseload. A total of 1.2 million families, composed of 3.1 million recipients, received TANF- or MOE-funded assistance in September 2018. The bulk of the \"recipients\" were children\u20142.3 million in that month. The assistance caseload is heterogeneous. The type of family once thought of as the \"typical\" assistance family\u2014one with an unemployed adult recipient\u2014accounted for 32% of all families on the rolls in FY2016. Additionally, 31% of cash assistance families had an employed adult, while 38% of all TANF families were \"child-only\" and had no adult recipient. Child-only families include those with disabled adults receiving Supplemental Security Income (SSI), adults who are nonparents (e.g., grandparents, aunts, uncles) caring for children, and families consisting of citizen children and ineligible noncitizen parents.", "Cash Assistance Benefits. TANF cash benefit amounts are set by states. In July 2017, the maximum monthly benefit for a family of three ranged from $1,021 in New Hampshire to $170 in Mississippi. Only New Hampshire (at 60% of the federal poverty guidelines) had a maximum TANF cash assistance amount for this sized family in excess of 50% of poverty-level income.", "Work Requirements. TANF's main federal work requirement is actually a performance measure that applies to the states. States determine the work rules that apply to individual recipients. TANF law requires states to engage 50% of all families and 90% of two-parent families with work-eligible individuals in work activities, though these standards can be reduced by \"credits.\" Therefore, the effective standards states face are often less than the 50% or 90% targets, and vary by state. In FY2017, states achieved, on average, an all-family participation rate of 53.0% and a two-parent rate of 69.5%. In FY2017, two jurisdictions did not meet the all-family participation standard: Nevada and Guam. This is a reduction from FY2012, when 16 states did not meet that standard. In FY2017, nine jurisdictions did not meet the two-parent standard. States that do not meet work standards are at risk of being penalized by a reduction in their block grant."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides responses to frequently asked questions about the Temporary Assistance for Needy Families (TANF) block grant. It is intended to serve as a quick reference to provide easy access to information and data. Appendix B presents a series of tables with state-level data. This report does not provide information on TANF program rules (for a discussion of TANF rules, see CRS Report RL32748, The Temporary Assistance for Needy Families (TANF) Block Grant: A Primer on TANF Financing and Federal Requirements , by Gene Falk). "], "subsections": []}, {"section_title": "Funding and Expenditures", "paragraphs": [], "subsections": [{"section_title": "What Is TANF's Funding Status?", "paragraphs": ["On January 24, 2019, the President signed legislation ( P.L. 116-4 ) that funds TANF and related programs through June 30, 2019. The legislation permits states to receive their quarterly TANF grants for the 2 nd quarter (January through March) and 3 rd quarter (April through June) of FY2019. Additional legislation would be required to pay TANF grants in the final quarter (July through September) of FY2019."], "subsections": []}, {"section_title": "How Are State TANF Programs Funded?", "paragraphs": ["TANF programs are funded through a combination of federal and state funds. In FY2018, TANF has two federal grants to states. The bulk of the TANF funding is in a basic block grant to the states, totaling $16.5 billion for the 50 states, the District of Columbia, Puerto Rico, Guam, the Virgin Islands, and American Indian tribes. There is also a contingency fund available that provides extra federal funds to states that meet certain conditions. ", "Additionally, states are required to expend a minimum amount of their own funds for TANF and TANF-related activities under what is known as the maintenance of effort (MOE) requirement. States are required to spend at least 75% of what they spent in FY1994 on TANF's predecessor programs. The minimum MOE amount, in total, is $10.3 billion per year for the 50 states, the District of Columbia, and the territories."], "subsections": []}, {"section_title": "How Much Has the Value of the TANF Basic Block Grant Changed Over Time?", "paragraphs": ["TANF was created in the 1996 welfare reform law, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA, P.L. 104-193 ). A TANF basic block grant amount\u2014both nationally and for each state\u2014was established in the 1996 welfare reform law. The amount established in that law for the 50 states, District of Columbia, territories, and tribes was $16.6 billion in total. From FY1997 through FY2016, that amount remained the same. It was not adjusted for changes that occur over time, such as inflation, the size of the TANF assistance caseload, or changes in the poverty population. During this period, the real (inflation-adjusted) value of the block grant declined by one-third (33.1%). Beginning with FY2017, the state family assistance grant was reduced by 0.33% from its historical levels to finance TANF-related research and technical assistance. The reduced block grant amount is $16.5 billion. ", " Table 1 shows the state family assistance grant, in both nominal (actual) and real (inflation-adjusted) dollars for each year, FY1997 through FY2018. In real (inflation-adjusted) terms, the FY2018 block grant was 36% below its value in FY1997."], "subsections": []}, {"section_title": "How Have States Used TANF Funds?", "paragraphs": [" Figure 1 shows the uses of federal TANF grants to states and state MOE funds in FY2017. In FY2017, a total of $31.1 billion of both federal TANF and state MOE expenditures were either expended or transferred to other block grant programs. Basic assistance\u2014ongoing benefits to families to meet basic needs\u2014represented 23% ($7.1 billion) of total FY2017 TANF and MOE dollars. ", "TANF is a major contributor of child care funding. In FY2017, $5 billion (16% of all TANF and MOE funds) were either expended on child care or transferred to the child care block grant (the Child Care and Development Fund, or CCDF). TANF work-related activities (including education and training) were the third-largest TANF and MOE spending category at $3.3 billion, or 11% of total TANF and MOE funds. TANF also helps low-wage parents by helping to finance state refundable tax credits, such as state add-ons to the Earned Income Tax Credit (EITC). TANF and MOE expenditures on refundable tax credits in FY2017 totaled $2.8 billion, or 9% of total TANF and MOE spending.", "TANF is also a major contributor to the child welfare system, which provides foster care, adoption assistance, and services to families with children who either have experienced or are at risk of experiencing child abuse or neglect, spending about $2.2 billion on such activities. TANF and MOE funds also help fund state prekindergarten (pre-K) programs, with total FY2017 expenditures for that category also at $2.5 billion. TANF and MOE funds are also used for short-term and emergency benefits and a wide range of other social services. ", "For state-specific information on the use of TANF funds, see Table B-1 and Table B-2 ."], "subsections": []}, {"section_title": "How Much of the TANF Grant Has Gone Unspent?", "paragraphs": ["TANF law permits states to \"reserve\" unused funds without time limit. This permits flexibility in timing of the use of TANF funds, including the ability to \"save\" funds for unexpected occurrences that might increase costs (such as recessions or natural disasters).", "At the end of FY2017 (September 30, 2017, the most recent data currently available), a total of $5.1 billion of federal TANF funding remained neither transferred nor spent. However, some of these unspent funds represent monies that states had already committed to spend later. At the end of FY2017, states had made such commitments to spend\u2014that is, had obligated\u2014a total of $1.8 billion. At the end of FY2017, states had $3.3 billion of \"unobligated balances.\" These funds are available to states to make new spending commitments. Table B-3 shows unspent TANF funds by\u00a0state."], "subsections": []}]}, {"section_title": "The Caseload", "paragraphs": [], "subsections": [{"section_title": "How Many Families Receive TANF- or MOE-Funded Benefits and Services?", "paragraphs": ["This number is not known. Federal TANF reporting requirements focus on families receiving only ongoing assistance . There is no complete reporting on families receiving other TANF benefits and services. ", "Assistance is defined as benefits provided to families to meet ongoing, basic needs. It is most often paid in cash. However, some states use TANF or MOE funds to provide an \"earnings supplement\" to working parents added to monthly Supplemental Nutrition Assistance Program (SNAP) allotments. These \"earnings supplements\" are paid separately from the regular TANF cash assistance program. Additionally, TANF MOE dollars are used to fund food assistance for immigrants barred from regular SNAP benefits in certain states. These forms of nutrition aid meet an ongoing need, and thus are considered TANF assistance.", "As discussed in a previous section of this report, TANF basic assistance accounts for about 24% of all TANF expenditures. Therefore, the federal reporting requirements that pertain to families receiving \"assistance\" are likely to undercount the number of families receiving any TANF-funded benefit or service."], "subsections": []}, {"section_title": "How Many Families and People Currently Receive TANF- or MOE-Funded \"Assistance\"?", "paragraphs": [" Table 2 provides assistance caseload information. A total of 1.2 million families, composed of 3.1 million recipients, received TANF- or MOE-funded assistance in September 2018. The bulk of the \"recipients\" were children\u20142.3 million in that month. For state-by-state assistance caseloads, see Table B-4 ."], "subsections": []}, {"section_title": "How Does the Current Assistance Caseload Level Compare with Historical Levels?", "paragraphs": [" Figure 2 provides a long-term historical perspective on the number of families receiving assistance from TANF or its predecessor program, from July 1959 to September 2017. The shaded areas of the figure represent months when the national economy was in recession. Though the health of the national economy has affected the trend in the cash assistance caseload, the long-term trend in receipt of cash assistance does not follow a classic countercyclical pattern. Such a pattern would have the caseload rise during economic slumps, and then fall again during periods of economic growth. Factors other than the health of the economy (demographic trends, policy changes) also have influenced the caseload trend.", "The figure shows two periods of sustained caseload increases: the period from the mid-1960s to the mid-1970s and a second period from 1988 to 1994. The number of families receiving assistance peaked in March 1994 at 5.1 million families. The assistance caseload fell rapidly in the late 1990s (after the 1996 welfare reform law) before leveling off in 2001. In 2004, the caseload began another decline, albeit at a slower pace than in the late 1990s. During the recent 2007-2009 recession and its aftermath, the caseload began to rise from 1.7 million families in August 2008, peaking in December 2010 at close to 2.0 million families. By September 2018, the assistance caseload had declined to 1.2 million families.", " Table B-5 shows recent trends in the number of cash assistance families by state. "], "subsections": []}, {"section_title": "What Are the Characteristics of Families Receiving TANF Assistance?", "paragraphs": ["Before PRWORA, the \"typical\" family receiving assistance has been headed by a single parent (usually the mother) with one or two children. That single parent has also typically been unemployed. However, over the past 20 years the assistance caseload decline has occurred together with a major shift in the composition of the rolls. Figure 3 shows the change in the size and composition of the assistance caseload under both AFDC (1988 and 1994) and TANF. In FY1988, an estimated 84% of AFDC families were headed by an unemployed adult recipient. In FY2016, families with an unemployed adult recipient represented 32% of all cash assistance families. This decline occurred, in large part, as the number of families headed by unemployed adult recipients declined more rapidly than other components of the assistance caseload. In FY1994, a monthly average of 3.8 million families per month who received AFDC cash assistance had adult recipients who were not working. In FY2016, a monthly average of 485,000 families per month had adult recipients or work-eligible individuals, with no adult recipient or work-eligible individual working.", "With the decline in families headed by unemployed adults, the share of the caseload represented by families with employed adults and \"child only\" families has increased. In FY2017, families with all adult recipients unemployed and families with employed adult recipients each represented 31% of all assistance families. The latter category includes families in \"earnings supplement\" programs separate from the regular TANF cash assistance program. \"Child-only\" families are those where no adult recipient receives benefits in their own right; the family receives benefits on behalf of its children. The share of the caseload that was child-only in FY2017 was 38%. In FY2017, families with a nonrecipient, nonparent relative (grandparents, aunts, uncles) represented 14% of all assistance families. Families with ineligible, noncitizen adults or adults who have not reported their citizenship status made up 9% of the assistance caseload in that year. Families where the parent received Supplemental Security Income (SSI) and the children received TANF made up 9% of all assistance families in FY2017."], "subsections": []}]}, {"section_title": "TANF Cash Benefits: How Much Does a Family Receive in TANF Cash Per Month?", "paragraphs": ["There are no federal rules that help determine the amount of TANF cash benefits paid to a family. (There are also no federal rules that require states to use TANF to pay cash benefits, though all states do so.) Benefit amounts are determined solely by the states.", "Most states base TANF cash benefit amounts on family size, paying larger cash benefits to larger families on the presumption that they have greater financial needs. The maximum monthly cash benefit is usually paid to a family that receives no other income (e.g., no earned or unearned income) and complies with program rules. Families with income other than TANF often are paid a reduced benefit. Moreover, some families are financially sanctioned for not meeting a program requirement (e.g., a work requirement), and are also paid a lower benefit.", " Figure 4 shows the maximum monthly TANF cash benefit by state for a single mother caring for two children (family of three) in July 2016. The benefit amounts shown are those for a single-parent family with two children. For a family of three, the maximum TANF benefit paid in July 2017 varied from $170 per month in Mississippi to $1,201 per month in New Hampshire. The map shows a regional pattern to the maximum monthly benefit paid, with lower benefit amounts in the South than in other regions. Only New Hampshire (at 60% of the federal poverty guidelines) had a maximum TANF cash assistance amount for this sized family in excess of 50% of poverty-level income."], "subsections": []}, {"section_title": "TANF Work Participation Standards", "paragraphs": ["TANF's main federal work requirement is actually a performance measure that applies to the states, rather than individual recipients. States determine the work rules that apply to individual recipients."], "subsections": [{"section_title": "What Is the TANF Work Participation Standard States Must Meet?", "paragraphs": ["The TANF statute requires states to have 50% of their caseload meet standards of participation in work or activities\u2014that is, a family member must be in specified activities for a minimum number of hours. There is a separate participation standard that applies to the two-parent portion of a state's caseload, requiring 90% of the state's two-parent caseload to meet participation standards. ", "However, the statutory work participation standards are reduced by a \"caseload reduction credit.\" The caseload reduction credit reduces the participation standard one percentage point for each percentage point decline in a state's caseload. Additionally, under a regulatory provision, a state may get \"extra\" credit for caseload reduction if it spends more than required under the TANF MOE. Therefore, the effective standards states face are often less than the 50% and 90% targets, and vary by state and by year.", "States that do not meet the TANF work participation standard are at risk of being penalized through a reduction in their block grant. However, penalties can be forgiven if a state claims, and the Secretary of HHS finds, that it had \"reasonable cause\" for not meeting the standard. Penalties can also be forgiven for states that enter into \"corrective compliance plans,\" and subsequently meet the work standard."], "subsections": []}, {"section_title": "Have There Been Changes in the Work Participation Rules Enacted Since the 1996 Welfare Reform Law?", "paragraphs": ["The 50% and 90% target standards that states face, as well as the caseload reduction credit, date back to the 1996 welfare reform law. However, the Deficit Reduction Act of 2005 (DRA, P.L. 109-171 ) made several changes to the work participation rules effective in FY2007", "The caseload reduction credit was changed to measure caseload reduction from FY2005, rather than the original law's FY1995. The work participation standards were broadened to include families receiving cash aid in \"separate state programs.\" Separate state programs are programs run with state funds, distinct from a state's \"TANF program,\" but with expenditures countable toward the TANF MOE. HHS was instructed to provide definition to the allowable TANF work activities listed in law. HHS was also required to define what is meant by a \"work-eligible\" individual, expanding the number of families that are included in the work participation calculation. States were required to develop plans and procedures to verify work activities.", "The American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5 ), a law enacted in response to the sharp economic downturn of 2007-2009, held states \"harmless\" for caseload increases affecting the work participation standards for FY2009 through FY2011. It did so by allowing states to \"freeze\" caseload reduction credits at pre-recession levels through the FY2011 standards."], "subsections": []}, {"section_title": "What Work Participation Rates Have the States Achieved?", "paragraphs": ["HHS computes two work participation rates for each state that are then compared with the effective (after-credit) standard to determine if it has met the TANF work standard. An \"all-families\" work participation rate is computed and compared with the all-families effective standard (50% minus the state's caseload reduction credit). HHS also computes a two-parent work participation rate that is compared with the two-parent effective standard (90% minus the state's caseload reduction credit).", " Figure 5 shows the national average all-families work participation rate for FY2002 through FY2017. For the period FY2002 through FY2011, states achieved an average all-families work participation rate hovering around 30%. The work participation rate increased since then. In FY2016, it exceeded 50% for the first time since TANF was established. However, it is important to note that the increase in the work participation rate has not come from an increase in the number of recipients in regular TANF assistance programs who are either working or in job preparation activities. This increase stems mostly from states creating new \"earnings supplement\" programs that use TANF funds to aid working parents in the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) or who have left the regular TANF assistance programs for work."], "subsections": []}, {"section_title": "How Many Jurisdictions Did Not Meet the All-Families Standard?", "paragraphs": [" Figure 6 shows which states did not meet the TANF all-families work participation standards from FY2006 through FY2017. Before FY2007, the first year that DRA was effective, only a few jurisdictions did not meet TANF all-families work participation standards. However, in FY2007, 15 jurisdictions did not meet the all-families standard. This number declined to 9 in FY2008 and 8 in FY2009. ", "In FY2012, despite the uptick in the national average work participation rate, 16 states did not meet the all-family standard, the largest number of states that did not meet their participation standards in any one year since the enactment of TANF. FY2012 was the year that ARRA's \"freeze\" of the caseload reduction credit expired, and states were generally required to meet higher standards than in previous years.", "The number of jurisdictions that did not meet the all-families standard declined over the FY2012 to FY2017 period. In FY2017, two jurisdictions did not meet the all-family participation standard: Nevada and Guam."], "subsections": []}, {"section_title": "Have States Met the Two-Parent Work Participation Standard?", "paragraphs": ["In addition to meeting a work standard for all families, TANF also imposes a second standard\u201490%\u2014for the two-parent portion of its cash assistance caseload. This standard can also be lowered by caseload reduction. ", " Figure 7 shows whether each state met its two-parent work participation standard for FY2006 through FY2017. However, the display on the table is more complex than that for reporting whether a state met or did not meet its \"all family\" rate. ", "A substantial number of states have reported no two-parent families subject to the work participation standard. These states are denoted on the table with an \"NA,\" indicating that the two-parent standard was not applicable to the state in that year. Before the changes made by the DRA were effective, a number of states had their two-parent families in separate state programs that were not included in the work participation calculation. When DRA brought families receiving assistance in separate state programs into the work participation rate calculations, a number of states moved these families into solely state-funded programs. These are state-funded programs with expenditures not countable toward the TANF maintenance of effort requirement, and hence are outside of TANF's rules.", "For states with two-parent families in their caseloads, the table reports \"Yes\" for states that met the two-parent standard, and \"No\" for states that did not meet the two-parent standard. Of the 28 jurisdictions that had two-parent families in their FY2017 TANF work participation calculation, 19 met the standard and 9 did not. ", "Appendix A. Supplementary Tables", "Appendix B. State Tables"], "subsections": []}]}]}}
{"id": "R43470", "title": "Selected Agency Budget Justifications for FY2020", "released_date": "2019-04-10T00:00:00", "summary": ["This report provides a convenient listing of online FY2020 agency budget justification submissions for all 15 executive branch departments and 9 selected independent agencies. In most cases, budget justifications contain more detailed descriptions of the proposals and programs that are provided in the President's budget submissions.", "This report will be updated to reflect the current budget justifications submissions for the forthcoming fiscal year."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Budget justifications are detailed written materials, data, and supporting documents provided by federal agencies that expand upon and support the President's yearly budget submission to Congress. In form and content, the justifications may vary by agency. The Office of Management and Budget (OMB) provides yearly instructions to agencies for producing materials to be included in the President's budget submission and agency budget justifications. Each summer, OMB issues these instructions as part of a document entitled, Circular No. A-11: Preparation, Submission, and Execution of the Budget .", "The release of budget justifications occurs soon after the release of the President's annual budget submission and in advance of congressional hearings on agency budget requests. Agencies submit budget justifications to the appropriations subcommittees to support agency testimony and inform congressional deliberations. Beginning with the FY2008 executive budget cycle, agencies have also been required to post their congressional budget justification materials on the internet within two weeks of transmittal to Congress."], "subsections": []}, {"section_title": "Online Access to Budget Justifications", "paragraphs": ["Website links to FY2020 budget justification documents for each of the 15 executive departments and 9 selected independent agencies are provided below. The organization of the materials on agency websites can vary, therefore brief guidance for navigating to FY2020-specific materials is provided below the links as appropriate. In addition, links to historical information from prior fiscal years may also appear or be available through the cited websites."], "subsections": [{"section_title": "Executive Departments", "paragraphs": ["Department of Agriculture https://www.obpa.usda.gov/explan_notes.html", "Th e webs ite i ncludes links to historical budget justification materials back to FY2008.", "Department of Commerce https://www.commerce.gov/about/budget-and-performance/FY-2020-congressional-bureau-justification ", "Historical Department of Commerce budget justification materials back to FY2009 and Budget in Brief documents . http://www.osec.doc.gov/bmi/budget/default.htm", "Department of Defense http://comptroller.defense.gov/Budget-Materials/ ", "Th e webs ite includes an index of links to historical Department of Defense budget justification materials back to FY1998 in the banner section at the top of the site .", "Department of Education https://www2.ed.gov/about/overview/budget/budget20/index.html", "Historical Department of Education budget justifica tion materials back to FY2011 . https://www2.ed.gov/about/overview/budget/news.html?src=rt", "Department of Energy https://www.energy.gov/cfo/downloads/fy-2020-budget-justification ", "Historical Department of Energy budget justifica tion materials back to FY2005 ; scroll to the bottom of the website . https://www.energy.gov/cfo/listings/budget-justification-supporting-documents", "Department of Health and Human Services https://www.hhs.gov/about/budget/index.html", "Historical Department of Health and Human Services budget justification materials back to FY2009 are available toward the bottom of the website.", "Department of Homeland Security https://www.dhs.gov/dhs-budget", "Historical Department of Homeland Security budget justification materials back to FY2010 and budget-related materials back to FY2003 are available toward the bottom of the website.", "Department of Housing and Urban Development https://www.hud.gov/program_offices/cfo/reports/fy20_CJ", "Historical Department of Housing and Urban Development budget justification materials back to FY1998. https://www.hud.gov/program_offices/cfo/budget .", "Department of the Interior https://www.doi.gov/budget/appropriations/2020", "Historical Department of the Interior budget justifica tion materials back to FY2001 . https://www.doi.gov/budget/appropriations/ .", "Department of Justice https://www.justice.gov/doj/fy-2020-congressional-budget-submission", "Historical Department of Justice budget justification materials back to FY2015. http://www.justice.gov/doj/budget-and-performance .", "Department of Labor https://www.dol.gov/general/budget", "Historical DOL budget justification materials back to FY2008; under \"Past Budgets\" heading. https://www.dol.gov/general/aboutdol ", "Department of State https://www.state.gov/s/d/rm/rls/ebs/index.htm", "Historical Department of State budget justifica tion materials back to FY2015 are available on the same site .", "Department of Transportation https://www.transportation.gov/budget", "Historical Department of Transportation budget justification materials back to FY2009; under \"Budget Estimates\" heading. https://www.transportation.gov/mission/budget/dot-budget-and-performance-documents ", "Department of the Treasury https://www.treasury.gov/about/budget-performance/Pages/cj-index.aspx", "Historical Department of the Treasury budget justification materials back to FY2007 and budget-related materials back to FY2007 are available by scrolling down on the website.", "Department of Veterans Affairs https://www.va.gov/budget/products.asp", "Historical Department of Veterans Affairs budget justification materials back to FY2008 are available toward the bottom of the website."], "subsections": []}, {"section_title": "Selected Independent Agencies", "paragraphs": ["Environmental Protection Agency https://www.epa.gov/planandbudget/fy-2020-justification-appropriation-estimates-committee-appropriations", "FY2019 EPA (prior year) budget justification materials. https://www.epa.gov/planandbudget/fy-2019-justification-appropriation-estimates-committee-appropriations", "Other historical EPA budget justification materials back to FY2011; toward the bottom of the website under \"Justification of Appropriations for Committee on Appropriations\" heading. https://www.epa.gov/planandbudget/archive ", "National Aeronautics and Space Administration https://www.nasa.gov/news/budget/index.html", "Historical NASA budget justification materials back to FY2004 and selected materials back to FY1997 are available toward the bottom of the website under \"Previous Years' Budget Requests\" heading.", "Agency for International Development https://www.usaid.gov/results-and-data/budget-spending/cong r essional-budget-justification/fy2020 ", "Historical AID budget justification materials back to FY2001. https://www.usaid.gov/results-and-data/budget-spending/congressional-budget-justification", "General Services Administration https://www.gsa.gov/reference/reports/budget-performance/annual-budget-requests", "Previous GSA budget justification materials back to FY2006 are also available on the website.", "National Science Foundation https://www.nsf.gov/about/budget/fy2020/index.jsp", "Historical NSF budget justification materials back to FY1996. https://www.nsf.gov/about/budget/", "Nuclear Regulatory Commission https://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr1100/v35/", "Historical NRC budget justification materials back to FY2011. https://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr1100/", "Office of Personnel Management https://www.opm.gov/about-us/budget-pe r formance/budgets/#url=Congressional-Budget-Justification ", "Historical budget justification materials back to FY2007 are also available on th e website.", "Small Business Administration https://www.sba.gov/document/report\u2014congressional-budget-justification-annual-performance-report ", "This site also has links by fiscal year to annual budget justification and performance report materials back to FY2010 .", "Social Security Administration https://www.ssa.gov/budget/", "Historical budget justification materials back to FY20 08 are available via the tabs at the top of th e website. "], "subsections": []}, {"section_title": "Additional Information", "paragraphs": ["Policy analysis for each of the 12 regular appropriations bills is available via the Congressional Research Service (CRS) Appropriations Status Table by clicking on the corresponding CRS report for each bill at http://www.crs.gov/AppropriationsStatusTable/Index . Additional budget submissions to Congress for subagencies or quasi-government agencies may also be available online. A more extensive listing of federal agencies and offices is available in the current U.S. Government Manual at https://www.govinfo.gov/content/pkg/GOVMAN-2018-12-03/pdf/GOVMAN-2018-12-03.pdf ."], "subsections": []}]}]}}
{"id": "R45622", "title": "Judicial Nomination Statistics and Analysis: U.S. District and Circuit Courts, 1977-2018", "released_date": "2019-03-21T00:00:00", "summary": ["In recent decades, the process for appointing judges to the U.S. circuit courts of appeals and the U.S. district courts has been of continuing Senate interest. The President and the Senate share responsibility for making these appointments. Pursuant to the Constitution's Appointments Clause, the President nominates persons to fill federal judgeships, with the appointment of each nominee also requiring Senate confirmation. Although not mentioned in the Constitution, an important role is also played midway in the appointment process by the Senate Judiciary Committee.", "The statistics presented in this report reflect congressional interest in issues related to the confirmation process for lower federal court nominees. Statistics are provided for each stage of the nomination and confirmation process\u2014from the frequency of judicial vacancies that require a presidential nomination for a judgeship to be filled to the frequency of roll call votes (rather than the use of unanimous consent or voice votes) to confirm judicial nominees. Statistics are also provided related to the length of the confirmation process itself. Additional statistics provided relate to the demographic characteristics of circuit and district court nominees confirmed by the Senate.", "The period covered by the report, 1977 through 2018, includes every Administration from the Carter presidency to the first two years of the Trump presidency. This period also includes every Congress from the 95th (1977-1978) through the 115th (2017-2018).", "Because the statistics presented for the Trump presidency are for the first two years of his Administration (while statistics for other presidencies reflect each President's entire Administration, whether four or eight years), the statistics presented for the Trump presidency may be different at the conclusion of his Administration.", "This report will be next updated by CRS at the conclusion of the 116th Congress."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Under the Appointments Clause of the Constitution, the President and the Senate share responsibility for making appointments to the Supreme Court, as well as to various lower courts of the federal judiciary. While the President nominates persons to fill federal judgeships, the appointment of each nominee also requires Senate confirmation. ", "Historically, the vast majority of appointments to federal judgeships (other than to the Supreme Court) have typically not involved much public disagreement between the President and the Senate or between the parties within the Senate. Debate in the Senate over particular lower court nominees, or over the lower court appointment process itself, was uncommon. Typically, such nominations were both reported out of the Judiciary Committee and confirmed by the Senate without any recorded opposition. ", "In recent decades, however, appointments to two kinds of lower federal courts\u2014the U.S. circuit courts of appeals and the U.S. district courts\u2014have often been the focus of heightened Senate interest and debate, as has the process itself for appointing judges to these courts. ", "Given congressional interest in the subject, this report provides statistics and analysis related to the nomination and confirmation of U.S. circuit and district court judges from 1977 (the beginning of the Carter presidency) through 2018 (the second year of the Trump presidency). ", "The report's exclusive focus are the U.S. circuit courts of appeals and U.S. district courts. Excluded from the scope of the report are the U.S. Supreme Court; the U.S. Court of International Trade; the U.S. Court of Federal Claims; and territorial district courts (e.g., the District Court of Guam)."], "subsections": []}, {"section_title": "Overview of the U.S. Courts of Appeals and U.S. District Courts", "paragraphs": [], "subsections": [{"section_title": "U.S. Circuit Courts", "paragraphs": ["The U.S. courts of appeals, or circuit courts, take appeals from federal district court decisions and are also empowered to review the decisions of many administrative agencies. Cases presented to the courts of appeals are generally considered by judges sitting in three-member panels. Courts within the courts of appeals system are often called \"circuit courts\" (e.g., the First Circuit Court of Appeals is also referred to as the \"First Circuit\"), because the nation is divided into 12 geographic circuits, each with a U.S. court of appeals. One additional nationwide circuit, the U.S. Court of Appeals for the Federal Circuit, has specialized subject matter jurisdiction. ", "Altogether, 179 judgeships for these 13 courts of appeals are currently authorized by law (167 for the 12 regional U.S. courts of appeals and 12 for the U.S. Court of Appeals for the Federal Circuit). The First Circuit (comprising Maine, Massachusetts, New Hampshire, Rhode Island, and Puerto Rico) has the fewest number of authorized appellate court judgeships, 6, while the Ninth Circuit (comprising Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington) has the most, 29."], "subsections": []}, {"section_title": "U.S. District Courts", "paragraphs": ["U.S. district courts are the federal trial courts of general jurisdiction. There are 91 Article III district courts: 89 in the 50 states, plus 1 in the District of Columbia and 1 more in Puerto Rico. Each state has at least one U.S. district court, while some states (specifically California, New York, and Texas) have as many as four. ", "Altogether, 673 Article III U.S. district court judgeships are currently authorized by law. Congress has authorized between 1 and 28 judgeships for each district court. The Eastern District of Oklahoma (Muskogee) has 1 authorized judgeship, the smallest number among Article III district courts, while the Southern District of New York (Manhattan) and the Central District of California (Los Angeles) each have 28 judgeships, the most among Article III district courts."], "subsections": []}]}, {"section_title": "U.S. Circuit and District Court Vacancies", "paragraphs": ["Opportunities for a President to make circuit and district court appointments arise when judgeships are vacant or are scheduled to become vacant. Various factors influence the number of such opportunities a President will have during his tenure in office, including the frequency with which judicial departures occur; whether any new judgeships are statutorily created by Congress (which consequently provide a President with the opportunity to nominate individuals to the new judgeships); the number of judicial nominations submitted by a President; and the speed by which the Senate considers such nominations.", " Table 1 reports the percentage of U.S. circuit and district court judgeships that were vacant on January 1 immediately prior to the beginning of each new Congress and four-year presidential term from 1977 through 2017.", "Overall, during this period, the median percentage of circuit court judgeships that were vacant immediately prior to the start of a new Congress was 8.9%. The median percentage of district court judgeships that were vacant immediately prior to the start of a new Congress was 7.2%.", "As shown by the table, the percentage of U.S. circuit judgeships that were vacant was highest at the beginning of the 96 th Congress, 28.8%, and lowest at the beginning of the 98 th Congress, 3.5%. The percentage of U.S. district court judgeships that were vacant was also highest at the beginning of the 96 th Congress, 24.7%, and lowest at the beginning of the 109 th Congress, 3.1%.", "The percentage of judgeships that are vacant at the beginning of a presidency is influenced, in part, by the extent to which the preceding President's nominees were approved by the Senate during the final year or two of his term. For example, most recently, at the beginning of the Trump presidency, the percentage of U.S. district court judgeships that were vacant was 12.8%. This was due, in part, to the comparatively small number of district court nominations confirmed by the Senate during the final two years of the Obama presidency."], "subsections": []}, {"section_title": "Number and Percentage of Nominees Confirmed", "paragraphs": ["Various factors influence the number and percentage of judicial nominees confirmed during any given presidency or Congress. These factors include, but are not limited to, the frequency with which judges depart the bench; the speed with which a presidential Administration vets and selects nominees for vacant judgeships; whether a President is of the same political party as the majority party in the Senate; whether a congressional session coincides with a presidential election year; and the point in a congressional session when nominations arrive in the Senate."], "subsections": [{"section_title": "By Presidency", "paragraphs": ["As shown by Table 2 , the number of U.S. circuit court nominees confirmed during a completed presidency ranged from a high of 83 during the Reagan presidency to a low of 42 during the single four-year term of George H. W. Bush. Of two-term Presidents, the high ranged from a high of 83 (Reagan) to a low of 55 during the Obama presidency.", "In terms of the percentage of circuit court nominees confirmed during a completed presidency, which takes into account the number of circuit court nominations submitted to the Senate, the greatest percentage of nominees were confirmed during the Carter presidency (93.3%), and the smallest percentage were confirmed during the George W. Bush presidency (71.8%). Of two-term Presidents, the high ranged from 88.3% during the Reagan presidency to a low of 71.8% (George W. Bush).", "The number of U.S. district court nominees confirmed during a completed presidency ranged from a high of 305 during the Clinton presidency to a low of 148 during the single four-year term of George H. W. Bush. Of two-term Presidents, the high ranged from a high of 305 (Clinton) to a low of 261 during the George W. Bush presidency.", "In terms of the percentage of district court nominees confirmed during a completed presidency, which takes into account the number of district court nominations submitted to the Senate, the greatest percentage of nominees were confirmed during the Reagan presidency (94.8%), and the smallest percentage were confirmed during the George H. W. Bush presidency (77.1%). Of two-term Presidents, the high ranged from 94.8% (Reagan) to a low of 83.2% during the Obama presidency."], "subsections": []}, {"section_title": "By Congress", "paragraphs": ["The median number of U.S. circuit court nominees confirmed during a Congress, from the 95 th through the 115 th , was 17 (while the median number of circuit court nominations submitted to the Senate was 26). And as shown by Table 3 , the number of U.S. circuit court nominees confirmed during this same period ranged from a low of 2 (during the 114 th Congress, 2015-2016) to a high of 44 (during the 96 th Congress, 1979-1980).", "The median percentage of circuit court nominees confirmed during a Congress, from the 95 th through the 115 th , was 65.4%. The smallest percentage of circuit court nominees, 22.2%, were confirmed during the 114 th Congress (2015-2016). All (100%) of the circuit court nominations submitted to the Senate during the 95 th and 99 th Congresses (1977-1978 and 1985-1986, respectively) were confirmed by the Senate. ", "The median number of U.S. district court nominees confirmed during a Congress, from the 95 th through the 115 th , was 66 (while the median number of district court nominations submitted to the Senate was 85). The number of nominees confirmed ranged from a low of 18 (during the 114 th Congress, 2015-2016) to a high of 154 (during the 96 th Congress, 1979-1980).", "The median percentage of district court nominees confirmed during a Congress, from the 95 th through the 115 th , was 84.0%. The smallest percentage confirmed during this period was 29.5% (during the 114 th Congress, 2015-2016) and the greatest percentage confirmed was 98.6% (during the 97 th Congress, 1981-1982)."], "subsections": [{"section_title": "Influence of Unified and Divided Party Control", "paragraphs": ["In general, both a greater number and percentage of circuit and district court nominees were confirmed during Congresses in which the party of the President was the same as the majority party in the Senate. During Congresses in which there was unified party control (i.e., the party of the President and the majority party in the Senate were the same), the median number of circuit court nominees confirmed was approximately 18, and the median percentage of nominees confirmed was 80.0%. In contrast, during Congresses in which there was divided party control (i.e., the party of the President was different than the majority party in the Senate), the median number of circuit court nominees confirmed was 16, and the median percentage of nominees confirmed was 59.7%.", "During Congresses in which there was unified party control, the median number of district court nominees confirmed was approximately 76, and the median percentage of nominees confirmed was 89.5%. In contrast, during Congresses in which there was divided party control, the median number of district court nominees confirmed was 60, and the median percentage of nominees confirmed was 73.1%."], "subsections": []}]}]}, {"section_title": "Multiple Nominations of the Same Person Prior to Final Action by the Senate", "paragraphs": ["Over the last several presidencies, it has become increasingly common for a President to nominate an individual two or more times to a U.S. circuit or district court judgeship prior to final action on the nomination by the Senate (irrespective of whether the Senate ultimately approved the nomination). Consequently, the percentage of nominees confirmed during a presidency who were nominated two or more times prior to being approved by the Senate has also increased in recent years."], "subsections": [{"section_title": "U.S. Circuit Court Nominees", "paragraphs": ["As shown by Table 4 , the total number of circuit court nominees who were nominated two or more times prior to final action, whether confirmed or not, ranged from a low of 1 (during the Carter and George H. W. Bush presidencies) to a high of 39 (during the George W. Bush presidency). ", "The number of circuit court nominees who were nominated more than once and ultimately confirmed by the Senate ranged from a low of 0 (during the George H. W. Bush presidency) to a high of 28 (during the George W. Bush presidency). And the number of nominees who were nominated more than once but not confirmed by the Senate ranged from a low of 0 (during the Carter presidency) to a high of 11 (during the George W. Bush presidency).", "Overall, of the six presidencies listed in Table 4 , President George W. Bush had the greatest percentage of confirmed circuit court nominees who were nominated more than once prior to being confirmed by the Senate (45.9%). ", "Most recently, during the Obama presidency, the percentage of confirmed circuit court nominees who were nominated more than once prior to being approved by the Senate declined to 36.4% (representing the second-highest percentage of circuit court nominees nominated more than once prior to Senate approval)."], "subsections": []}, {"section_title": "U.S. District Court Nominees", "paragraphs": ["As shown by Table 5 , the total number of district court nominees who were nominated two or more times prior to final action ranged from a low of 3 (during the George H. W. Bush presidency) to a high of 111 (during the Obama presidency).", "The number of district court nominees who were nominated more than once and ultimately confirmed by the Senate ranged from a low of 2 (during the George H. W. Bush presidency) to a high of 104 (during the Obama presidency). And the number of nominees who were nominated more than once but not confirmed by the Senate ranged from a low of 1 (during the Carter and George H. W. Bush presidencies) to a high of 9 (during the Clinton presidency).", "Overall, of the six presidencies listed in Table 5 , President Obama had the greatest percentage of confirmed district court nominees who were nominated more than once prior to being confirmed by the Senate (38.8%). This was an increase from the George W. Bush presidency, when 23.8% of district court nominees were nominated more than once prior to being confirmed (which represents the second-highest percentage of district court nominees nominated more than once prior to Senate approval)."], "subsections": []}]}, {"section_title": "Nominees Whose Nominations Were Returned at the End of a Congress", "paragraphs": [" Table 6 provides data related to the number of U.S. circuit and district court nominees whose nominations were returned by the Senate to the President at the end of each Congress, from the 95 th through the 115 th . The table also indicates how many of these nominees had been given a hearing (or not) by the Judiciary Committee as well as how many had their nominations reported by the committee and pending on the Executive Calendar prior to being returned to the President.", "For a Congress that did not coincide with the last two years of a presidency, it was not uncommon for a nominee whose nomination was returned at the end of it to be resubmitted during a subsequent Congress and eventually be approved by the Senate. For a Congress, however, that did coincide with the last two years of a presidency, a nominee whose nomination was returned at the end of it was not confirmed by the Senate."], "subsections": [{"section_title": "U.S. Circuit Court Nominees", "paragraphs": ["The median number of U.S. circuit court nominees whose nominations were returned to a President at the end of a Congress during this period was 8, while the median number of district court nominees whose nominations were returned at the end of a Congress was 13. For the 13 most recent Congr esses (corresponding to Congresses during the Clinton, George W. Bush, Obama, and Trump presidencies), the median number of circuit court nominees whose nominations were returned to a President at the end of a Congress was 9, while the median number of district court nominations returned was 20.", "No circuit court nominees had nominations returned at the end of the 95 th Congress (during the Carter presidency) or during the 99 th Congress (during the Reagan presidency). ", "The 106 th Congress, during the Clinton presidency, had the greatest number of circuit court nominees whose nominations were returned at the end of a Congress (17)\u2014followed by the 107 th and 108 th Congresses, both during the George W. Bush presidency, when 15 circuit court nominations were returned at the end of each Congress. ", "The greatest percentage of circuit court nominees who had nominations returned, as a percentage of all nominees who were nominated during a Congress, occurred at the end of the 114 th Congress during the Obama presidency (seven of nine nominations, or 77.8%, were returned)."], "subsections": []}, {"section_title": "U.S. District Court Nominees", "paragraphs": ["A single district court nominee had a nomination returned at the end of each of the 95 th and 97 th Congresses during the Carter and Reagan presidencies, respectively. ", "The 115 th Congress had the greatest number of district court nominees whose nominations were returned at the end of a Congress (56). ", "The smallest percentage of district court nominees who had nominations returned, as a percentage of all nominees who were nominated during a Congress, occurred at the end of the 97 th Congress, 1981-1982, during the Reagan presidency (1 of 69, or 1.4%, were returned).", "The greatest percentage of district court nominees who had nominations returned, as a percentage of all nominees who were nominated during a Congress, occurred at the end of the 114 th Congress, 2015-2016, during the Obama presidency (43 of 61 nominations, or 70.5%, were returned).", " Table 6 does not indicate when, during a Congress, a President submitted nominations to the Senate. If nominations are submitted for the first time relatively late in a Congress, it may not give the Senate adequate time to act on them prior to adjournment. "], "subsections": []}]}, {"section_title": "Time from Nomination to Confirmation", "paragraphs": ["This section provides, for nominees confirmed by the Senate from 1977 through 2018, the median number of days from nomination to confirmation by presidency and by Congress. In general, the length of time from when a President nominates an individual to a vacant circuit or district court judgeship to when the Senate approves that nomination has steadily increased, for most nominees, since 1977. ", "In addition to the general increase in the length of time of the confirmation process itself, an individual nominee might experience a relatively longer period of time from nomination to confirmation due to opposition to the nomination by the nonpresidential party in the Senate; committee and floor scheduling decisions unrelated to partisan opposition to the nomination; and delays in receiving requested background information from the nominee."], "subsections": [{"section_title": "By Presidency", "paragraphs": ["As shown by Table 7 , the median number of days from nomination to confirmation for U.S. circuit court nominees for completed presidencies ranged from a low of 45.0 days during the Reagan presidency to a high of 229.0 days during the Obama presidency.", "Following the Reagan presidency, the median number of days from nomination to confirmation increased during each successive completed presidency (increasing to 83.0 days during the George H. W. Bush presidency, 139.0 days during the Clinton presidency, 216.0 days during the George W. Bush presidency, and 229.0 days during the Obama presidency). ", "The first two years of the Trump presidency, with a median of 140.5 days, represent a decline in this trend.", "If the average, rather than the median, is used to measure the length of time a President's circuit court nominees waited from nomination to confirmation, the average number of days from nomination to confirmation for completed presidencies ranged from a low of 68.7 days during the Reagan presidency to a high of 350.6 days during the George W. Bush presidency.", "For completed presidencies, the median number of days from nomination to confirmation for U.S. district court nominees ranged from a low of 41.0 days during the Reagan presidency to a high of 215.0 days during the Obama presidency.", "Following the Reagan presidency, the median number of days from nomination to confirmation increased during each successive completed presidency (increasing to 93.0 days during the George H. W. Bush presidency, 99.0 days during the Clinton presidency, 141.0 days during the George W. Bush presidency, and to 215.0 days during the Obama presidency). ", "The first two years of the Trump presidency, with a median of 235.0 days, represented a continuation of this upward trend."], "subsections": [{"section_title": "U.S. Circuit Court Nominees", "paragraphs": [" Figure 1 shows, for each U.S. circuit court nominee who was confirmed from 1977 through 2018, the number of days from when that individual was first nominated to when he or she was confirmed by the Senate. The particular circuit court nominee who waited the longest period of time from nomination to confirmation is also labeled for each presidency. "], "subsections": [{"section_title": "365 or More Days from Nomination to Confirmation", "paragraphs": ["As shown by the figure, there was a notable increase after the George H. W. Bush presidency in the number of nominees who waited one year or more from nomination to confirmation. During the Carter, Reagan, and George H. W. Bush presidencies, no circuit court nominees waited 365 days or more to be confirmed. ", "During the Clinton presidency, there were 12 circuit court nominees who waited one year or more to be confirmed. The number of circuit court nominees who waited at least 365 days to be confirmed increased further, to a high of 18, during the George W. Bush presidency. During the Obama presidency, there were 8 circuit court nominees who waited at least one year to be confirmed. ", "During the first two years of the Trump presidency, none of the 30 circuit court nominees whose nominations were confirmed by the Senate waited at least 365 days to be confirmed.", "Overall, 18% of President Clinton's circuit court nominees waited at least 365 days to be confirmed, 30% of President George W. Bush's nominees waited at least this long (the highest among the six completed presidencies), and 15% of President Obama's nominees waited at least 365 days."], "subsections": []}, {"section_title": "90 or Fewer Days from Nomination to Confirmation", "paragraphs": ["During the Carter and Reagan presidencies, 47 and 63 circuit court nominees, respectively, waited 90 or fewer days from nomination to confirmation. During the George H. W. Bush presidency, 24 circuit court nominees waited 90 or fewer days to confirmation. President Clinton had 18 circuit court nominees confirmed within 90 days (i.e., within approximately three months) of being nominated, while President George W. Bush had 11 such nominees. President Obama had 2 circuit court nominees confirmed within three months of being nominated (the lowest number among the completed presidencies).", "During the first two years of the Trump presidency, eight circuit court nominees were confirmed within 90 or fewer days of being nominated.", "Overall, 84% of President Carter's circuit court nominees were confirmed within 90 days of being nominated. During the Reagan presidency, 76% of circuit court nominees were confirmed within 90 days of nomination, while during the George H. W. Bush presidency 57% of circuit court nominees were confirmed within this time frame. ", "During the Clinton presidency, the percentage of circuit court nominees approved by the Senate within 90 days fell below half of all circuit court nominees confirmed (to 26%). The percentage of nominees confirmed in 90 or fewer days decreased further during both the George W. Bush presidency (to 16%) and the Obama presidency (to 4%, the lowest percentage among the six completed presidencies).", "During the first two years of the Trump presidency, 27% of circuit court nominees were confirmed within 90 days of being nominated."], "subsections": []}]}, {"section_title": "U.S. District Court Nominees", "paragraphs": [" Figure 2 shows, for each U.S. district court nominee who was confirmed from 1977 through 2018, the number of days from when that individual was first nominated to when he or she was confirmed by the Senate. The particular district court nominee who waited the longest period of time from nomination to confirmation is also labeled for each presidency."], "subsections": [{"section_title": "365 or More Days from Nomination to Confirmation", "paragraphs": ["As shown by the figure, there was a notable increase after the George H. W. Bush presidency in the number of nominees who waited one year or more from nomination to confirmation. During the Carter and Reagan presidencies, a combined total of five district court nominees waited 365 days or more to be confirmed. No district court nominees during the George H. W. Bush presidency waited 365 or more days from nomination to confirmation.", "During the Clinton presidency, there were 14 district court nominees who waited one year or more to be confirmed. The number of district court nominees who waited at least 365 days to be confirmed increased further, to a high of 17, during the George W. Bush presidency. During the Obama presidency, there were 16 district court nominees who waited at least 365 days to be confirmed (which was the second highest among the completed presidencies).", "During the first two years of the Trump presidency, there were six district court nominees who waited at least 365 days from nomination to confirmation.", "Overall, 5% of President Clinton's district court nominees waited at least 365 days to be confirmed, 7% of President George W. Bush's nominees waited at least this long, and 6% of President Obama's nominees waited at least 365 days. ", "During the first two years of the Trump presidency, 11% of district court nominees waited at least 365 days from nomination to confirmation."], "subsections": []}, {"section_title": "90 or Fewer Days from Nomination to Confirmation", "paragraphs": ["During the Carter and Reagan presidencies, 157 and 234 district court nominees, respectively, waited 90 or fewer days from nomination to confirmation. During the George H. W. Bush presidency, 72 district court nominees waited 90 or fewer days to confirmation. President Clinton had 129 district court nominees confirmed within 90 days (i.e., within approximately three months) of being nominated, while President George W. Bush had 41 such nominees. President Obama had five district court nominees, the fewest of any completed presidency, confirmed within three months of being nominated.", "During the first two years of the Trump presidency, two district court nominees were confirmed within 90 or fewer days of being nominated.", "Overall, 78% of President Carter's district court nominees were confirmed within 90 days of being nominated. During the Reagan presidency, 81% of district court nominees were confirmed within 90 days of nomination, while during the George H. W. Bush presidency 49% of district nominees were confirmed within this time frame. ", "During the Clinton and George W. Bush presidencies, the percentage of district court nominees approved by the Senate within 90 days declined further to 42% and 16%, respectively. During the Obama presidency, the percentage of nominees confirmed in 90 or fewer days was 2% (the lowest percentage of the completed presidencies).", "During the first two years of the Trump presidency, 4% of district court nominees were confirmed within 90 days of being nominated."], "subsections": []}]}]}, {"section_title": "By Congress", "paragraphs": [" Table 8 reports the median number of days from nomination to confirmation for U.S. circuit and district court nominees whose nominations were approved by the Senate from the 95 th Congress through the 115 th Congress. "], "subsections": [{"section_title": "U.S. Circuit Court Nominees", "paragraphs": ["For circuit court nominees, the median number of days from nomination to confirmation ranged from a low of 28.0 days during the 97 th Congress (1981-1982) to a high of 331.0 days during the 114 th Congress (2015-2016). The second-shortest median number of days from nomination to confirmation was 29.0 days during the 95 th Congress (1977-1978), while the second-highest median number of days was 281.5 days during the 109 th Congress (2005-2006).", "The median number of days from nomination to confirmation for U.S. circuit court nominees stayed above 200 days from the 106 th through 114 th Congresses. In contrast, for the 115 th Congress, the median number of days from nomination to confirmation (140.5 days, or 4.6 months) declined to its lowest point since the 103 rd Congress.", "If the average, rather than the median, is used to measure the length of time circuit court nominees waited from nomination to confirmation, the average number of days from nomination to confirmation ranged from a low of 32.6 days during the 95 th Congress to a high of 562.9 days during the 109 th Congress. Additionally, the average time from nomination to confirmation for U.S. circuit court nominees increases by more than 30 days, relative to the median, for the 106 th Congress (to 373.9 days); 105 th Congress (303.1 days); 108 th Congress (287.2 days); 113 th Congress (281.2 days); and 110 th Congress (268.8 days). "], "subsections": []}, {"section_title": "U.S. District Court Nominees", "paragraphs": ["For U.S. district court nominees, the median number of days from nomination to confirmation ranged from a low of 26.0 days during the 98 th Congress (1983-1984) to a high of 299.5 days during the 114 th Congress (2015-2016). The second-shortest median was 30.0 days during the 97 th Congress (1981-1982), while the second-longest median was 235.0 days during the 115 th Congress (2017-2018).", "The median number of days from nomination to confirmation during the 115 th Congress was the fourth consecutive Congress for which the median wait time from nomination to confirmation for district court nominees was greater than 200 days. The first Congress during which the median wait time for district court nominees exceeded 200 days was the 112 th Congress (2011-2012).", " Figure 3 displays the overall trends in the median number of days from nomination to confirmation for U.S. circuit and district court nominees who were confirmed from the 95 th Congress through the 115 th Congress (and also indicates the corresponding presidency for each Congress during this period). ", "For circuit court nominees, the five greatest increases in the number of median days from nomination to confirmation occurred during the 114 th Congress (an increase of 102.0 days from the 113 th Congress); the 109 th Congress (an increase of 80.5 days from the 108 th Congress); 100 th Congress (an increase of 73.0 days from the 99 th Congress); 104 th Congress (an increase of 68.0 days from the 103 rd Congress); and the 107 th Congress (an increase of 52.0 days from the 106 th Congress).", "Most recently, from the 114 th to 115 th Congress, the median number of days from nomination to confirmation for U.S. circuit court nominees declined from 331.0 to 140.5 days.", "For district court nominees, the five greatest increases in the number of median days from nomination to confirmation occurred during the 114 th Congress (an increase of 96.5 days from the 113 th Congress); 112 th Congress (an increase of 85.0 days from the 111 th Congress); 110 th Congress (an increase of 67.0 days from the 109 th Congress); 100 th Congress (an increase of 57.0 days from the 99 th Congress); and the 102 nd Congress (an increase of 45.5 days from the 101 st Congress).", "Most recently, from the 114 th to 115 th Congress, the median number of days from nomination to confirmation for U.S. district court nominees declined from 299.5 to 235.0 days."], "subsections": []}]}]}, {"section_title": "Time from Nomination to Committee Hearing", "paragraphs": ["The President customarily transmits a circuit or district court nomination to the Senate in the form of a written nomination message. Once received, the nomination is numbered by the Senate executive clerk, read on the floor, and then immediately referred to the Judiciary Committee.", "The Judiciary Committee's processing of the nomination typically consists of three phases\u2014a prehearing phase, the holding of a hearing on the nomination, and voting on whether to report the nomination to the Senate. During a hearing on the nomination, lower court nominees engage in a question-and-answer session with members of the Senate Judiciary Committee. The hearing typically is held for more than one judicial nominee at a time.", "From 1977 through 2018, the median length of time from when an individual was first nominated to a circuit court judgeship to when he or she received a hearing by the Judiciary Committee was 63.0 days (or 2.1 months). During this same period, the median length of time from when an individual was nominated to a district court judgeship to when he or she received a hearing was also 63.0 days.", "As shown in Table 9 , the median length of time from nomination to committee hearing for circuit and district court nominees has, however, varied across presidencies. For individuals nominated during more recent presidencies, the length of time from nomination to committee hearing has been relatively longer than the median for all nominees from 1977 through 2018.", "The median number of days from nomination to committee hearing for U.S. circuit court nominees ranged from a low of 23.0 days (during the Reagan presidency) to a high of 154.0 days (during the George W. Bush presidency). ", "For the first two years of the Trump presidency, the median number of days from nomination to hearing for U.S. circuit court nominees was 69.0 days.", "The median number of days from nomination to committee hearing for U.S. district court nominees ranged from a low of 22.0 days (during the Reagan presidency) to a high of 87.5 days (during the George W. Bush presidency). ", "For the first two years of the Trump presidency, the median number of days from nomination to hearing for U.S. district court nominees was 77.0 days."], "subsections": []}, {"section_title": "Time from Committee Report to Confirmation", "paragraphs": ["After a nominee receives a hearing by the Judiciary Committee, she awaits a vote by the committee on whether her nomination will be reported to the Senate as a whole. If the nomination is not put to the committee for a vote, or if the committee votes against reporting it (i.e., rejects the nomination), the nomination will not move forward, ultimately failing to receive Senate confirmation.", "The committee, in reporting a nomination to the Senate as a whole, has three options\u2014to report a nomination favorably, unfavorably, or without recommendation. Almost always, when the committee votes on a nomination, it votes to report favorably. The committee, however, may vote (as it has done in the past, but only on rare occasions) to report unfavorably or without recommendation. Such a vote advances the nomination for Senate consideration despite the lack of majority support for it in committee. After it is reported by the Judiciary Committee, a circuit or district court nomination is listed on the Executive Calendar and is eligible for floor consideration.", "The nominees who are included in this part of the analysis all had their nominations reported by the Judiciary Committee (i.e., their nominations advanced to the full Senate for consideration) and were confirmed by the Senate.", "From 1977 through 2018, the median length of time from when an individual who was nominated to a circuit court judgeship had his nomination reported by the Judiciary Committee to when he was confirmed by the Senate was 9.0 days. During this same period, the median length of time from when a district court nominee had his nomination reported to when he was confirmed was 8.0 days.", "There was, however, variation during this period across presidencies in how long circuit and district court nominees waited to be confirmed once their nominations were reported by the Judiciary Committee\u2014with nominees during more recent presidencies waiting longer to be confirmed once their nominations were reported by the committee. ", "As shown by Table 10 , for completed presidencies, the median number of days from committee report to confirmation for U.S. circuit court nominees ranged from a low of 1.0 day (during the George H. W. Bush presidency) to a high of 98.0 days (during the Obama presidency).", "For the first two years of the Trump presidency, the median number of days from committee report to confirmation was 26.0 days.", "For completed presidencies, the median number of days from committee report to confirmation for U.S. district court nominees ranged from a low of 1.0 day (during the George H. W. Bush presidency) to a high of 84.0 days (during the Obama presidency). ", "For the first two years of the Trump presidency, the median number of days from committee report to confirmation for U.S. district court nominees was 133.0 days."], "subsections": []}, {"section_title": "Ratings by the American Bar Association for Confirmed Nominees", "paragraphs": ["Since 1953, every presidential Administration, except those of George W. Bush and Donald Trump, has sought prenomination evaluations of its candidates for district and circuit court judgeships by the American Bar Association (ABA). ", "The committee that performs this evaluation, the ABA's Standing Committee on the Federal Judiciary, is made up of 15 lawyers with various professional experiences. The stated objective of the committee is to assist the White House in assessing whether prospective judicial nominees should be nominated. It seeks to do so by providing what it describes as an \"impartial peer-review evaluation\" of each candidate's professional qualifications. This evaluation, according to the committee, focuses strictly on a candidate's \"integrity, professional competence and judicial temperament\" and does not take into account the candidate's \"philosophy, political affiliation or ideology.\" In evaluating professional competence, the committee assesses the prospective nominee's \"intellectual capacity, judgment, writing and analytical abilities, knowledge of the law, and breadth of professional experience.\"", "Following the multistep evaluation process by the committee, a nominee is given an official rating of \"well qualified,\" \"qualified,\" or \"not qualified.\" A rating is provided strictly on an advisory basis; it is solely in the President's discretion as to how much weight to place on a judicial candidate's ABA rating in deciding whether to nominate him or her.", "As shown by Table 11 , there is some variation across presidencies in the percentage of confirmed U.S. circuit and district court nominees who received a particular rating by the ABA. For U.S. circuit court nominees for completed presidencies, the percentage who received a well qualified rating ranged from a low of 56.6% during the Reagan presidency to a high of 80.0% during the Obama presidency. ", "During the first two years of the Trump presidency, 80.0% of confirmed circuit court nominees also received a well qualified rating. ", "None of the completed presidencies listed in the table had any confirmed circuit court nominees who were rated as not qualified by the ABA. ", "During the first two years of the Trump presidency, two circuit court nominees were rated as not qualified (comprising 6.7% of the circuit court nominees confirmed during this period).", "For confirmed U.S. district court nominees, the percentage who received a well qualified rating ranged from a low of 51.0% during the Carter presidency to a high of 69.3% during the George W. Bush presidency. During the first two years of the Trump presidency, 62.3% of confirmed district court nominees received a well qualified rating. ", "For completed presidencies during which at least one confirmed district court nominee was rated as not qualified, the percentage of nominees who received such a rating ranged from a high of 1.5% of all confirmed nominees during the Carter and George W. Bush presidencies to a low of 1.3% of such nominees during the Clinton presidency. During the first two years of the Trump presidency, 3.8% of confirmed district court nominees received a rating of not qualified."], "subsections": []}, {"section_title": "Frequency of Roll Call Votes for Confirmed Nominees", "paragraphs": ["The Senate may confirm nominations by unanimous consent, voice vote, or by recorded roll call vote. When the question of whether to confirm a nomination is put to the Senate, a roll call vote will be taken on the nomination if the Senate has ordered \"the yeas and nays.\" The support of 11 Senators is necessary to order the roll call.", "Historically, the Senate confirmed most U.S. circuit and district court nominations by unanimous consent or by voice vote. As shown by Figure 4 , however, using roll call votes to confirm nominees has become much more common during recent presidencies. ", "A relatively small percentage of circuit court nominees were confirmed by roll call vote during the Carter, Reagan, and George H. W. Bush presidencies. Specifically, 7.1%, 6.0%, and 2.4% of circuit court nominees were confirmed by roll call during each of these three presidencies, respectively.", "Additionally, only one district court nominee was confirmed by roll call vote during each of the Carter and Reagan presidencies, and no district court nominees were confirmed by roll call vote during George H. W. Bush's presidency.", "Confirmation by roll call vote became more common during the Clinton presidency, with nearly one-quarter, 24.6%, of circuit court nominees and 10.5% of district court nominees receiving roll call votes at the time of Senate confirmation.", "It was not, however, until the George W. Bush presidency that a majority of lower court nominees were approved using roll call votes, with 80.3% of circuit court nominees and 54.0% of district court nominees confirmed in this way. This trend continued under President Obama, with 89.1% of circuit court nominees and 64.6% of district court nominees being confirmed by roll call vote.", "During the first two years of the Trump presidency, all U.S. circuit court nominees were confirmed using roll call votes, representing an increase from recent years in the frequency of using roll call votes to confirm circuit court nominees. In contrast, 50.9% of district court nominees were confirmed by roll call vote, representing a decrease from recent years in the frequency of using roll call votes to confirm district court nominees. "], "subsections": [{"section_title": "Number of Nay Votes Received", "paragraphs": ["The increased frequency with which roll call votes have been used to confirm U.S. circuit and district court nominations has not always been correlated with Senators using roll call votes to express opposition to a nominee by voting against his or her nomination. As shown by Figure 5 , there is notable variation in the number of nay votes received by circuit and district court nominations when they have been confirmed by roll call vote. ", "The figure shows the number of nominations that received zero nay votes at the time of confirmation. For nominations that received at least one nay vote, the roll call data are presented using five ranges to reflect the number of nay votes received by a President's nominees: (1) 1 to 10 nay votes; (2) 11 to 20 nay votes; (3) 21 to 30 nay votes; (4) 31 to 40 nay votes; and (5) more than 40 nay votes.", "During the Clinton presidency, 12 (75.0%) of 16 circuit court nominees who were confirmed by roll call vote received at least one nay vote (with 9, or 56.2%, receiving more than 20 nay votes). Of the 32 district court nominees who were confirmed by roll call vote, 18 (56.2%) received at least one nay vote. ", "In contrast to the Clinton presidency, a majority of the circuit and district court nominees approved by roll call vote during the George W. Bush and Obama presidencies were confirmed after having received zero nay votes. During the Bush presidency, 30 (61.2%) of 49 circuit court nominees confirmed by roll call votes received zero nay votes. For the 141 district court nominees confirmed by roll call vote, 136 (96.4%) received zero nay votes.", "During the Obama presidency, 26 (53.1%) of 49 circuit court nominees confirmed by roll call vote received zero nay votes. For the 173 district court nominees confirmed by roll call vote, 95 (54.9%) received zero nay votes.", "During the first two years of the Trump presidency, 18 (60.0%) of 30 circuit court nominees approved by roll call vote were confirmed with more than 40 nay votes. In contrast, 2 (6.7%) were confirmed with zero nay votes. For district court nominees, 17 (63.0%) of 27 confirmed by roll call vote received at least one nay vote (while 10, or 37.0%, received zero nay votes). Of the 17 who received at least one nay vote, a plurality (5, or 29.4%) received more than 40 nay votes."], "subsections": []}]}, {"section_title": "Demographic Characteristics of Confirmed Nominees", "paragraphs": ["This section provides data related to the gender and race of U.S. circuit and district court nominees confirmed by the Senate during each presidency since the Carter Administration. These particular demographic characteristics of judicial nominees are of ongoing interest to Congress. Such interest is demonstrated especially at the time circuit and district court nominations are considered by the Senate. For example, floor statements by Senators in support of circuit or district court nominees frequently emphasize the particular demographic characteristics of nominees who would enhance the diversity of the federal judiciary. "], "subsections": [{"section_title": "Gender", "paragraphs": ["As shown by Figure 6 , for completed presidencies, the percentage of confirmed U.S. circuit court nominees who were women ranged from a low of 7.2% during the Reagan presidency to a high of 43.6% during the Obama presidency. ", "For district court nominees, the percentage of confirmed nominees who were women ranged from a low of 8.3% during the Reagan presidency to a high of 41.0% during the Obama presidency. ", "During the first two years of the Trump presidency, 20.0% of confirmed U.S. circuit court nominees were women, while 26.4% of confirmed district court nominees were women."], "subsections": []}, {"section_title": "Race", "paragraphs": [" Figure 7 shows the percentage of each President's confirmed U.S. circuit and district court nominees who were African American, Asian American, Hispanic, and white."], "subsections": [{"section_title": "Confirmed African American Nominees", "paragraphs": ["For completed presidencies, the percentage of confirmed U.S. circuit court nominees who were African American ranged from a low of 1.2% during the Reagan presidency to a high of 16.4% during the Obama presidency. ", "During the first two years of the Trump presidency, no confirmed circuit court nominees were African American.", "For completed presidencies, the percentage of confirmed U.S. district court nominees who were African American ranged from a low of 2.1% during the Reagan presidency to a high of 18.7% during the Obama presidency. ", "During the first two years of the Trump presidency, 1.9% of confirmed district court nominees were African American."], "subsections": []}, {"section_title": "Confirmed Asian American Nominees", "paragraphs": ["For completed presidencies, there were no Asian American circuit court judges appointed during the Reagan, George H. W. Bush, or George W. Bush presidencies. The greatest percentage was appointed during the Obama presidency (7.3%).", "During the first two years of the Trump presidency, 10.0% of confirmed circuit court nominees were Asian American.", "For past presidencies, there were no Asian American district court judges appointed during the George H. W. Bush presidency. The greatest percentage was appointed during the Obama presidency (5.2%).", "During the first two years of the Trump presidency, 3.8% of confirmed district court nominees were Asian American."], "subsections": []}, {"section_title": "Confirmed Hispanic Nominees", "paragraphs": ["For completed presidencies, the percentage of confirmed U.S. circuit court nominees who were Hispanic ranged from a low of 1.2% during the Reagan presidency to a high of 10.9% during the Obama presidency. ", "During the first two years of the Trump presidency, no confirmed circuit court nominees were Hispanic.", "For completed presidencies, the percentage of confirmed U.S. district court nominees who were Hispanic ranged from a low of 4.1% during the George H. W. Bush presidency to a high of 10.3% during the George W. Bush presidency. ", "During the first two years of the Trump presidency, 1.9% of confirmed district court nominees were Hispanic."], "subsections": []}]}]}]}}
{"id": "R41909", "title": "Multiyear Procurement (MYP) and Block Buy Contracting in Defense Acquisition: Background and Issues for Congress", "released_date": "2019-04-30T00:00:00", "summary": ["Multiyear procurement (MYP) and block buy contracting (BBC) are special contracting mechanisms that Congress permits the Department of Defense (DOD) to use for a limited number of defense acquisition programs. Compared to the standard or default approach of annual contracting, MYP and BBC have the potential for reducing weapon procurement costs by a few or several percent.", "Under annual contracting, DOD uses one or more contracts for each year's worth of procurement of a given kind of item. Under MYP, DOD instead uses a single contract for two to five years' worth of procurement of a given kind of item without having to exercise a contract option for each year after the first year. DOD needs congressional approval for each use of MYP. There is a permanent statute governing MYP contracting\u201410 U.S.C. 2306b. Under this statute, a program must meet several criteria to qualify for MYP.", "Compared with estimated costs under annual contracting, estimated savings for programs being proposed for MYP have ranged from less than 5% to more than 15%, depending on the particulars of the program in question, with many estimates falling in the range of 5% to 10%. In practice, actual savings from using MYP rather than annual contracting can be difficult to observe or verify because of cost growth during the execution of the contract due to changes in the program independent of the use of MYP rather than annual contracting.", "BBC is similar to MYP in that it permits DOD to use a single contract for more than one year's worth of procurement of a given kind of item without having to exercise a contract option for each year after the first year. BBC is also similar to MYP in that DOD needs congressional approval for each use of BBC. BBC differs from MYP in the following ways:", "There is no permanent statute governing the use of BBC. There is no requirement that BBC be approved in both a DOD appropriations act and an act other than a DOD appropriations act. Programs being considered for BBC do not need to meet any legal criteria to qualify for BBC, because there is no permanent statute governing the use of BBC that establishes such criteria. A BBC contract can cover more than five years of planned procurements. Economic order quantity (EOQ) authority\u2014the authority to bring forward selected key components of the items to be procured under the contract and purchase the components in batch form during the first year or two of the contract\u2014does not come automatically as part of BBC authority because there is no permanent statute governing the use of BBC that includes EOQ authority as an automatic feature. BBC contracts are less likely to include cancellation penalties.", "Potential issues for Congress concerning MYP and BBC include whether to use MYP and BBC in the future more frequently, less frequently, or about as frequently as they are currently used; whether to create a permanent statute to govern the use of BBC, analogous to the permanent statute that governs the use of MYP; and whether the Coast Guard should begin making use of MYP and BBC."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": [], "subsections": [{"section_title": "Issues for Congress", "paragraphs": ["This report provides background information and issues for Congress on multiyear procurement (MYP) and block buy contracting (BBC), which are special contracting mechanisms that Congress permits the Department of Defense (DOD) to use for a limited number of defense acquisition programs. Compared to the standard or default approach of annual contracting, MYP and BBC have the potential for reducing weapon procurement costs by a few or several percent.", "Potential issues for Congress concerning MYP and BBC include whether to use MYP and BBC in the future more frequently, less frequently, or about as frequently as they are currently used; whether to create a permanent statute to govern the use of BBC, analogous to the permanent statute that governs the use of MYP; and whether the Coast Guard should begin making use of MYP and BBC. Congress's decisions on these issues could affect defense acquisition practices, defense funding requirements, and the defense industrial base."], "subsections": []}, {"section_title": "Terminology and Scope of Report", "paragraphs": [], "subsections": [{"section_title": "An Air Force \"Block Buy\" That Is Not Discussed in This Report", "paragraphs": ["A contract that the Air Force has for the procurement of Evolved Expendable Launch Vehicle (EELV) Launch Services (ELS) has sometimes been referred to as a block buy, but it is not an example of block buy contracting as discussed in this report. The Air Force in this instance is using the term block buy to mean something different. This report does not discuss the ELS contract. (For additional discussion, see \" Terminology Alert: Block Buy Contracting vs. Block Buys \" below.)"], "subsections": []}, {"section_title": "Contracting Mechanisms and Funding Approaches", "paragraphs": ["In discussing MYP, BBC, and incremental funding, it can be helpful to distinguish contracting mechanisms from funding approaches. The two are often mixed together in discussions of DOD acquisition, sometimes leading to confusion. Stated briefly", "Funding approaches are ways that Congress can appropriate funding for weapon procurement programs, so that DOD can then put them under contract. Examples of funding approaches include traditional full funding (the standard or default approach), incremental funding, and advance appropriations. Any of these funding approaches might make use of advance procurement (AP) funding. Contracting mechanisms are ways for DOD to contract for the procurement of weapons systems, once funding for those systems has been appropriated by Congress. Examples of contracting mechanisms include annual contracting (the standard or default DOD approach), MYP, and BBC. Contracting mechanisms can materially change the total procurement cost of a ship.", "The use of a particular funding approach in a defense acquisition program does not dictate the use of a particular contracting mechanism. Defense acquisition programs consequently can be implemented using various combinations of funding approaches and contracting mechanisms. Most DOD weapon acquisition programs use a combination of traditional full funding and annual contracting. A few programs, particularly certain Navy shipbuilding programs, use incremental funding as their funding approach. A limited number of DOD programs use MYP as their contracting approach, and to date three Navy shipbuilding programs have used BBC as their contracting approach. The situation is summarized in Table 1 .", "This report focuses on the contracting approaches of MYP and BBC and how they compare to annual contracting. Other CRS reports discuss the funding approaches of traditional full funding, incremental funding, and advance appropriations."], "subsections": []}]}]}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "Multiyear Procurement (MYP)", "paragraphs": [], "subsections": [{"section_title": "MYP in Brief", "paragraphs": ["What is MYP, and how does it differ from annual contracting? MYP, also known as multiyear contracting, is an alternative to the standard or default DOD approach of annual contracting. Under annual contracting, DOD uses one or more contracts for each year's worth of procurement of a given kind of item. Under MYP, DOD instead uses a single contract for two to five years' worth of procurement of a given kind of item, without having to exercise a contract option for each year after the first year. DOD needs congressional approval for each use of MYP.", "To illustrate the basic difference between MYP and annual contracting, consider a hypothetical DOD program to procure 20 single-engine aircraft of a certain kind over the 5-year period FY2018-FY2022, at a rate of 4 aircraft per year:", "Under annual contracting , DOD would issue one or more contracts for each year's procurement of four aircraft. After Congress funds the procurement of the first four aircraft in FY2018, DOD would issue one or more contracts (or exercise a contract option) for those four aircraft. The next year, after Congress funds the procurement of the next four aircraft in FY2019, DOD would issue one or more contracts (or exercise a contract option) for those four aircraft, and so on. Under MYP , DOD would issue one contract covering all 20 aircraft to be procured during the 5-year period FY2018-FY2022. DOD would award this contract in FY2018, at the beginning of the five-year period, following congressional approval to use MYP for the program, and congressional appropriation of the FY2018 funding for the program. To continue the implementation of the contract over the next four years, DOD would request the FY2019 funding for the program as part of DOD's proposed FY2019 budget, the FY2020 funding as part of DOD's proposed FY2020 budget, and so on."], "subsections": []}, {"section_title": "Potential Savings Under MYP", "paragraphs": ["How much can MYP save? Compared with estimated costs under annual contracting, estimated savings for programs being proposed for MYP have ranged from less than 5% to more than 15%, depending on the particulars of the program in question, with many estimates falling in the range of 5% to 10%. In practice, actual savings from using MYP rather than annual contracting can be difficult to observe or verify because of cost growth during the execution of the contract that was caused by developments independent of the use of MYP rather than annual contracting.", "A February 2012 briefing by the Cost Assessment and Program Evaluation (CAPE) office within the Office of the Secretary of Defense (OSD) states that \"MYP savings analysis is difficult due to the lack of actual costs on the alternative acquisition path, i.e., the path not taken.\" The briefing states that CAPE up to that point had assessed MYP savings for four aircraft procurement programs\u2014F/A-18E/F strike fighters, H-60 helicopters, V-22 tilt-rotor aircraft, and CH-47F helicopters\u2014and that CAPE's assessed savings ranged from 2% to 8%.", "A 2008 Government Accountability Office (GAO) report stated that", "DOD does not have a formal mechanism for tracking multiyear results against original expectations and makes few efforts to validate whether actual savings were achieved by multiyear procurement. It does not maintain comprehensive central records and historical information that could be used to enhance oversight and knowledge about multiyear performance to inform and improve future multiyear procurement (MYP) candidates. DOD and defense research centers officials said it is difficult to assess results because of the lack of historical information on multiyear contracts, comparable annual costs, and the dynamic acquisition environment.", "How does MYP potentially save money? Compared to annual contracting, using MYP can in principle reduce the cost of the weapons being procured in two primary ways:", "Contractor optimization of workforce and production facilities . An MYP contract gives the contractor (e.g., an airplane manufacturer or shipbuilder) confidence that a multiyear stream of business of a known volume will very likely materialize. This confidence can permit the contractor to make investments in the firm's workforce and production facilities that are intended to optimize the facility for the production of the items being procured under the contract. Such investments can include payments for retaining or training workers, or for building, expanding, or modernizing production facilities. Under annual contracting, the manufacturer might not have enough confidence about its future stream of business to make these kinds of investments, or might be unable to convince its parent firm to finance them. E conomic order quan tity (EOQ) purchases of selected long-leadtime components. Under an MYP contract, DOD is permitted to bring forward selected key components of the items to be procured under the contract and to purchase the components in batch form during the first year or two of the contract. In the hypothetical example introduced earlier, using MYP could permit DOD to purchase, say, the 20 engines for the 20 aircraft in the first year or two of the 5-year contract. Procuring selected components in this manner under an MYP contract is called an economic order quantity (EOQ) purchase. EOQ purchases can reduce the procurement cost of the weapons being procured under the MYP contract by allowing the manufacturers of components to take maximum advantage of production economies of scale that are possible with batch orders.", "What gives the contractor confidence that the multiyear stream of business will materialize? At least two things give the contractor confidence that DOD will not terminate an MYP contract and that the multiyear stream of business consequently will materialize:", "For a program to qualify for MYP, DOD must certify, among other things, that the minimum need for the items to be purchased is expected to remain substantially unchanged during the contract in terms of production rate, procurement rate, and total quantities. Perhaps more important to the contractor, MYP contracts include a cancellation penalty intended to reimburse a contractor for costs that the contractor has incurred (i.e., investments the contractor has made) in anticipation of the work covered under the MYP contract. The undesirability of paying a cancellation penalty acts as a disincentive for the government against canceling the contract. (And if the contract is canceled, the cancellation penalty helps to make the contractor whole.)"], "subsections": []}, {"section_title": "Permanent Statute Governing MYP", "paragraphs": ["Is there a permanent statute governing MYP contracting? There is a permanent statute governing MYP contracting\u201410 U.S.C. 2306b. The statute was created by Section 909 of the FY1982 Department of Defense Authorization Act ( S. 815 / P.L. 97-86 of December 1, 1981), revised and reorganized by Section 1022 of the Federal Acquisition Streamlining Act of 1994 ( S. 1587 / P.L. 103-355 of October 13, 1994), and further amended on several occasions since. For the text of 10 U.S.C. 2306b, see Appendix A . DOD's use of MYP contracting is further governed by DOD acquisition regulations.", "Under this statute, what criteria must a program meet to qualify for MYP? 10 U.S.C. 2306b(a) states that to qualify for MYP, a program must meet several criteria, including the following:", "Significant savings. DOD must estimate that using an MYP contract would result in \"significant savings\" compared with using annual contracting. Realistic cost estimates . DOD's estimates of the cost of the MYP contract and the anticipated savings must be realistic. Stable need for the items. DOD must expect that its minimum need for the items will remain substantially unchanged during the contract in terms of production rate, procurement rate, and total quantities. Stable design for the items . The design for the items to be acquired must be stable, and the technical risks associated with the items must not be excessive.", "10 U.S.C. includes provisions requiring the Secretary of Defense or certain other DOD officials to find, determine, or certify that these and other statutory requirements for using MYP contracts have been met, and provisions requiring the heads of DOD agencies to provide written notifications of certain things to the congressional defense committees 30 days before awarding or initiating an MYP contract, or 10 days before terminating one. 10 U.S.C. 2306b also requires DOD MYP contracts to be fixed-price type contracts.", "What is meant by \" significant savings\"? The amount of savings required under 10 U.S.C. 2306b to qualify for using an MYP contract has changed over time; the requirement was changed from \"substantial savings\" to \"significant savings\" by Section 811 of the FY2016 National Defense Authorization Act ( S. 1356 / P.L. 114-92 of November 25, 2015). The joint explanatory statement for the FY2016 National Defense Authorization Act states the following regarding Section 811:", "Amendment relating to multiyear contract authority for acquisition of property (sec. 811)", "The House bill contained a provision (sec. 806) that would strike the existing requirement that the head of an agency must determine that substantial savings would be achieved before entering into a multiyear contract.", "The Senate amendment contained no similar provision.", "The Senate recedes with an amendment that would require that significant savings would be achieved before entering into a multiyear contract.", "The conferees agree that the government should seek to maximize savings whenever it pursues multiyear procurement. However, the conferees also agree that significant savings (estimated to be greater than $250.0 million), and other benefits, may be achieved even if it does not equate to a minimum of 10 percent savings over the cost of an annual contract. The conferees expect a request for authority to enter into a multiyear contract will include (1) the estimated cost savings, (2) the minimum quantity needed, (3) confirmation that the design is stable and the technical risks are not excessive, and (4) any other rationale for entering into such a contract.", "In addition, 10 U.S.C. 2306b states the following:", "If for any fiscal year a multiyear contract to be entered into under this section is authorized by law for a particular procurement program and that authorization is subject to certain conditions established by law (including a condition as to cost savings to be achieved under the multiyear contract in comparison to specified other contracts) and if it appears (after negotiations with contractors) that such savings cannot be achieved, but that significant savings could nevertheless be achieved through the use of a multiyear contract rather than specified other contracts, the President may submit to Congress a request for relief from the specified cost savings that must be achieved through multiyear contracting for that program. Any such request by the President shall include details about the request for a multiyear contract, including details about the negotiated contract terms and conditions.", "What is meant by \"stable design\"? The term \"stable design\" is generally understood to mean that the design for the items to be procured is not expected to change substantially during the period of the contract. Having a stable design is generally demonstrated by having already built at least a few items to that design (or in the case of a shipbuilding program, at least one ship to that design) and concluding, through testing and operation of those items, that the design does not require any substantial changes during the period of the contract."], "subsections": []}, {"section_title": "Potential Consequences of Not Fully Funding an MYP Contract", "paragraphs": ["What happens if Congress does not provide the annual funding requested by DOD to continue the implementation of the contract? If Congress does not provide the funding requested by DOD to continue the implementation of an MYP contract, DOD would be required to renegotiate, suspend, or terminate the contract. Terminating the contract could require the government to pay a cancellation penalty to the contractor. Renegotiating or suspending the contract could also have a financial impact."], "subsections": []}, {"section_title": "Effect on Flexibility for Making Procurement Changes", "paragraphs": ["What effect does using MYP have on flexibility for making procurement changes? A principal potential disadvantage of using MYP is that it can reduce Congress's and DOD's flexibility for making changes (especially reductions) in procurement programs in future years in response to changing strategic or budgetary circumstances, at least without incurring cancellation penalties. In general, the greater the portion of DOD's procurement account that is executed under MYP contracts, the greater the potential loss of flexibility. The use of MYP for executing some portion of the DOD procurement account means that if policymakers in future years decide to reduce procurement spending below previously planned levels, the spending reduction might fall more heavily on procurement programs that do not use MYP, which in turn might result in a less-than-optimally balanced DOD procurement effort."], "subsections": []}, {"section_title": "Congressional Approval", "paragraphs": ["How does Congress approve the use of MYP? Congress approves the use of MYP on a case-by-case basis, typically in response to requests by DOD. Congressional approval for DOD MYP contracts with a value of more than $500 million must occur in two places: an annual DOD appropriations act and an act other than the annual DOD appropriations act.", "In annual DOD appropriations acts, the provision permitting the use of MYP for one or more defense acquisition programs is typically included in the title containing general provisions, which typically is Title VIII. As shown in Table B-2 , since FY2011, it has been Section 8010.", "An annual national defense authorization act (NDAA) is usually the act other than an appropriations act in which provisions granting authority for using MYP contracting on individual defense acquisition programs are included. Such provisions typically occur in Title I of the NDAA, the title covering procurement programs.", "Provisions in which Congress approves the use of MYP for a particular defense acquisition program may include specific conditions for that program in addition to the requirements and conditions of 10 U.S.C. 2306b."], "subsections": []}, {"section_title": "Frequency of Use of MYP", "paragraphs": ["How often is MYP used? MYP is used for a limited number of DOD acquisition programs. As shown in the Appendix B , annual DOD appropriations acts since FY1990 typically have approved the use of MYP for zero to a few DOD programs each year.", "An August 28, 2017, press report states the following:", "The Pentagon's portfolio of active multiyear procurement contracts is on track to taper from $10.7 billion in fiscal year 2017\u2014or more than 8 percent of DOD procurement spending\u2014to $1.2 billion by FY-19, according to data recently compiled by the Pentagon comptroller for lawmakers.", "However, there are potential new block-buy deals in the works, including several large Navy deals.", "According to the Multiyear Procurement Contracts Report for FY-17, which includes data current as of June 27, seven major defense acquisition programs are being purchased through multiyear procurement contracts, collectively obligating the U.S. government to spend $16 billion across the five-year spending plan with $14.5 billion of the commitments lashed to FY-17 and FY-18.", "In an interview published on January 13, 2014, Sean Stackley, the Assistant Secretary of the Navy for Research, Development, and Acquisition (i.e., the Navy's acquisition executive), stated the following:", "What the industrial base clamors for is stability, so they can plan, invest, train their work force. It gives them the ability in working with say, the Street [Wall Street], to better predict their own performance, then meet expectations in the same fashion we try to meet our expectations with the Hill.", "It's emblematic of stability that we've got more multiyear programs in the Department of the Navy than the rest of the Department of Defense combined. We've been able to harvest from that significant savings, and that has been key to solving some of our budget problems. It's allowed us in certain cases to put the savings right back into other programs tied to requirements.", "A February 2012 briefing by the Cost Assessment and Program Evaluation (CAPE) office within the Office of the Secretary of Defense (OSD) shows that the total dollar value of DOD MYP contracts has remained more or less stable between FY2000 and FY2012 at roughly $7 billion to $13 billion per year. The briefing shows that since the total size of DOD's procurement budget has increased during this period, the portion of DOD's total procurement budget accounted for by programs using MYP contracts has declined from about 17% in FY2000 to less than 8% in FY2012. The briefing also shows that the Navy makes more use of MYP contracts than does the Army or Air Force, and that the Air Force made very little use of MYP in FY2010-FY2012.", "A 2008 Government Accountability Office (GAO) report stated the following:", "Although DOD had been entering into multiyear contracts on a limited basis prior to the 1980s, the Department of Defense Authorization Act, [for fiscal year] 1982, codified the authority for DOD to procure on a multiyear basis major weapon systems that meet certain criteria. Since that time, DOD has annually submitted various weapon systems as multiyear procurement candidates for congressional authorization. Over the past 25 years, Congress has authorized the use of multiyear procurement for approximately 140 acquisition programs, including some systems approved more than once."], "subsections": []}]}, {"section_title": "Block Buy Contracting (BBC)", "paragraphs": [], "subsections": [{"section_title": "BBC in Brief", "paragraphs": ["What is BBC, and how does it compare to MYP? BBC is similar to MYP in that it permits DOD to use a single contract for more than one year's worth of procurement of a given kind of item without having to exercise a contract option for each year after the first year. BBC is also similar to MYP in that DOD needs congressional approval for each use of BBC.", "BBC differs from MYP in the following ways:", "There is no permanent statute governing the use of BBC. There is no requirement that BBC be approved in both a DOD appropriations act and an act other than a DOD appropriations act. Programs being considered for BBC do not need to meet any legal criteria to qualify for BBC because there is no permanent statute governing the use of BBC that establishes such criteria. A BBC contract can cover more than five years of planned procurements. The BBC contracts that were used by the Navy for procuring Littoral Combat Ships (LCSs), for example, covered a period of seven years (FY2010-FY2016). Economic order quantity (EOQ) authority does not come automatically as part of BBC authority because there is no permanent statute governing the use of BBC that includes EOQ authority as an automatic feature. To provide EOQ authority as part of a BBC contract, the provision granting authority for using BBC in a program may need to state explicitly that the authority to use BBC includes the authority to use EOQ. BBC contracts are less likely to include cancellation penalties.", "Given the one key similarity between BBC and MYP (the use of a single contract for more than one year's worth of procurement), and the various differences between BBC and MYP, BBC might be thought of as a less formal stepchild of MYP.", "When and why was BBC invented? BBC was invented by Section 121(b) of the FY1998 National Defense Authorization Act ( H.R. 1119 / P.L. 105-85 of November 18, 1997), which granted the Navy the authority to use a single contract for the procurement of the first four Virginia (SSN-774) class attack submarines. The 4 boats were scheduled to be procured during the 5-year period FY1998-FY2002 in annual quantities of 1-1-0-1-1. Congress provided the authority granted in Section 121(b) at least in part to reduce the combined procurement cost of the four submarines. Using MYP was not an option for the Virginia-class program at that time because the Navy had not even begun, let alone finished, construction of the first Virginia-class submarine, and consequently could not demonstrate that it had a stable design for the program.", "When Section 121(b) was enacted, there was no name for the contracting authority it provided. The term block buy contracting came into use later, when observers needed a term to refer to the kind of contracting authority that Congress authorized in Section 121(b). As discussed in the next section, this can cause confusion, because the term block buy was already being used in discussions of DOD acquisition to refer to something else."], "subsections": []}, {"section_title": "Terminology Alert: Block Buy Contracting vs. Block Buys", "paragraphs": ["What's the difference between block buy cont r acting and block buys? In discussions of defense procurement, the term \"block buy\" by itself (without \"contracting\" at the end) is sometimes used to refer to something quite different from block buy contracting\u2014namely, the simple act of funding the procurement of more than one copy of an item in a single year, particularly when no more than one item of that kind might normally be funded in a single year. For example, when Congress funded the procurement of two aircraft carriers in FY1983, and another two in FY1988, these acts were each referred to as block buys, because aircraft carriers are normally procured one at a time, several years apart from one another. This alternate meaning of the term block buy predates by many years the emergence of the term block buy contracting.", "The term block buy is still used in this alternate manner, which can lead to confusion in discussions of defense procurement. For example, for FY2017, the Air Force requested funding for procuring five Evolved Expendable Launch Vehicles (EELVs) for its EELV Launch Services (ELS) program. ", "At the same time, Navy officials sometimes refer to the use of block buy contracts for the first four Virginia-class submarines, and in the LCS program, as block buys, when they might be more specifically referred to as instances of block buy contract ing ."], "subsections": []}, {"section_title": "Potential Savings Under BBC", "paragraphs": ["How much can BBC save, compared with MYP? BBC can reduce the unit procurement costs of ships by amounts less than or perhaps comparable to those of MYP, if the authority granted for using BBC explicitly includes authority for making economic order quantity (EOQ) purchases of components. If the authority granted for using BBC does not explicitly include authority for making EOQ purchases, then the savings from BBC will be less. Potential savings under BBC might also be less than those under MYP if the BBC contract does not include a cancellation penalty, or includes one that is more limited than typically found in an MYP contract, because this might give the contractor less confidence than would be the case under an MYP contract that the future stream of business will materialize as planned, which in turn might reduce the amount of money the contractor invests to optimize its workforce and production facilities for producing the items to be procured under the contract."], "subsections": []}, {"section_title": "Frequency of Use of BBC", "paragraphs": ["How frequently has BBC been used? Since its use at the start of the Virginia-class program, BBC has been used very rarely. The Navy did not use it again in a shipbuilding program until December 2010, when it awarded two block buy contracts, each covering 10 LCSs to be procured over the six-year period FY2010-FY2015, to the two LCS builders. (Each contract was later amended to include an 11 th ship in FY2016, making for a total of 22 ships under the two contracts.) A third example is the John Lewis (TAO-205) class oiler program, in which the Navy is using a block buy contract to procure the first six ships in the program.", "A fourth example, arguably, is the Air Force's KC-46 aerial refueling tanker program, which is employing a fixed price incentive fee (FPIF) development contract that includes a \"back end\" commitment to procure certain minimum numbers of KC-46s in certain fiscal years."], "subsections": []}, {"section_title": "Using BBC Rather than MYP", "paragraphs": ["When might BBC be suitable as an alternative to MYP? BBC might be particularly suitable as an alternative to MYP in cases where using a multiyear contract can reduce costs, but the program in question cannot meet all the statutory criteria needed to qualify for MYP. As shown in the case of the first four Virginia-class boats, this can occur at or near the start of a procurement program, when design stability has not been demonstrated through the production of at least a few of the items to be procured (or, for a shipbuilding program, at least one ship)."], "subsections": []}]}, {"section_title": "MYP and BBC vs. Contracts with Options", "paragraphs": ["What i s the difference between an MYP or block buy contract and a contract with options? The military services sometimes use contracts with options to procure multiple copies of an item that are procured over a period of several years. The Navy, for example, used a contract with options to procure Lewis and Clark (TAKE-1) class dry cargo ships that were procured over a period of several years. A contract with options can be viewed as somewhat similar to an MYP or block buy contract in that a single contract is used to procure several years' worth of procurement of a given kind of item.", "There is, however, a key difference between an MYP or block buy contract and a contract with options: In a contract with options, the service is under no obligation to exercise any of the options, and a service can choose to not exercise an option without having to make a penalty payment to the contractor. In contrast, in an MYP or block buy contract, the service is under an obligation to continue implementing the contract beyond the first year, provided that Congress appropriates the necessary funds. If the service chooses to terminate an MYP or block buy contract, and does so as a termination for government convenience rather than as a termination for contractor default, then the contractor can, under the contract's termination for convenience clause, seek a payment from the government for cost incurred for work that is complete or in process at the time of termination, and may include the cost of some of the investments made in anticipation of the MYP or block buy contract being fully implemented. The contractor can do this even if the MYP or block buy contract does not elsewhere include a provision for a cancellation penalty.", "As a result of this key difference, although a contract with options looks like a multiyear contract, it operates more like a series of annual contracts, and it cannot achieve the kinds of savings that are possible under MYP and BBC."], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": ["Potential issues for Congress concerning MYP and BBC include whether to use MYP and BBC in the future more frequently, less frequently, or about as frequently as they are currently used; and whether to create a permanent statute to govern the use of BBC, analogous to the permanent statute that governs the use of MYP."], "subsections": [{"section_title": "Frequency of Using MYP and BBC", "paragraphs": ["Should MYP and BBC in the future be used more frequently, less frequently, or about as frequently as they are currently used? Supporters of using MYP and BBC more frequently in the future might argue the following:", "Since MYP and BBC can reduce procurement costs, making greater use of MYP and BBC can help DOD get more value out of its available procurement funding. This can be particularly important if DOD's budget in real (i.e., inflation-adjusted) terms remains flat or declines in coming years, as many observers anticipate. The risks of using MYP have been reduced by Section 811 of the FY2008 National Defense Authorization Act ( H.R. 4986 / P.L. 110-181 of January 28, 2008), which amended 10 U.S.C. 2306b to strengthen the process for ensuring that programs proposed for MYP meet certain criteria (see \" Permanent Statute Governing MYP \"). Since the value of MYP contracts equated to less than 8% of DOD's procurement budget in FY2012, compared to about 17% of DOD's procurement budget in FY2000, MYP likely could be used more frequently without exceeding past experience regarding the share of DOD's procurement budget accounted for by MYP contracts.", "Supporters of using MYP and BBC less frequently in the future, or at least no more frequently than now, might argue the following:", "Using MYP and BBC more frequently would further reduce Congress's and DOD's flexibility for making changes in DOD procurement programs in future years in response to changing strategic or budgetary circumstances. The risks of reducing flexibility in this regard are increased now because of uncertainties in the current strategic environment and because efforts to reduce federal budget deficits could include reducing DOD spending, which could lead to a reassessment of U.S. defense strategy and associated DOD acquisition programs. Since actual savings from using MYP and BBC rather than annual contracting can be difficult to observe or verify, it is not clear that the financial benefits of using MYP or BBC more frequently in the future would be worth the resulting further reduction in Congress's and DOD's flexibility for making changes in procurement programs in future years in response to changing strategic or budgetary circumstances."], "subsections": []}, {"section_title": "Permanent Statute for BBC", "paragraphs": ["Should Congress create a permanent statute to govern the use of BBC, analogous to the permanent statute (10 U.S.C. 2306b) that governs the use of MYP? Supporters of creating a permanent statute to govern the use of BBC might argue the following:", "Such a statute could encourage greater use of BBC, and thereby increase savings in DOD procurement programs by giving BBC contracting a formal legal standing and by establishing a clear process for DOD program managers to use in assessing whether their programs might be considered suitable for BBC. Such a statute could make BBC more advantageous by including a provision that automatically grants EOQ authority to programs using BBC, as well as provisions establishing qualifying criteria and other conditions intended to reduce the risks of using BBC.", "Opponents of creating a permanent statute to govern the use of BBC might argue the following:", "A key advantage of BBC is that it is not governed by a permanent statute. The lack of such a statute gives DOD and Congress full flexibility in determining when and how to use BBC for programs that may not qualify for MYP, but for which a multiyear contract of some kind might produce substantial savings. Such a statute could encourage DOD program managers to pursue their programs using BBC rather than MYP. This could reduce discipline in DOD multiyear contracting if the qualifying criteria in the BBC statute are less demanding than the qualifying criteria in 10 U.S.C. 2306b."], "subsections": []}, {"section_title": "Coast Guard Use of MYP and BBC", "paragraphs": ["Should the Coast Guard should begin making use of MYP and BBC? Although the Coast Guard is part of the Department of Homeland Security (DHS), the Coast Guard is a military service and a branch of the U.S. Armed Forces at all times (14 U.S.C. 1), and 10 U.S.C. 2306b provides authority for using MYP not only to DOD, but also to the Coast Guard (and the National Aeronautics and Space Administration as well). In addition, Section 311 of the Frank LoBiondo Coast Guard Authorization Act of 2018 ( S. 140 / P.L. 115-282 of December 4, 2018) provides permanent authority for the Coast Guard to use block buy contracting with EOQ purchases of components in its major acquisition programs. The authority is now codified at 14 U.S.C. 1137.", "As discussed earlier in this report, the Navy in recent years has made extensive use of MYP and BBC in its ship and aircraft acquisition programs, reducing the collective costs of those programs, the Navy estimates, by billions of dollars. The Coast Guard, like the Navy, procures ships and aircraft. In contrast to the Navy, however, the Coast Guard has never used MYP or BBC in its ship or aircraft acquisition programs. Instead, the Coast has tended to use contracts with options. As discussed earlier, although a contract with options looks like a multiyear contract, it operates more like a series of annual contracts, and it cannot achieve the kinds of savings that are possible under MYP and BBC.", "CRS in recent years has testified and reported on the possibility of using BBC or MYP in Coast Guard ship acquisition programs, particularly the Coast Guard's 25-ship Offshore Patrol Cutter (OPC) program and the Coast Guard's three-ship polar icebreaker program. CRS estimates that using multiyear contracting rather than contracts with options for the entire 25-ship OPC program could reduce the cost of the OPC program by about $1 billion. The OPC program is the Coast Guard's top-priority acquisition program, and it represents a once-in-a-generation opportunity to reduce the acquisition cost of a Coast Guard acquisition program by an estimated $1 billion. CRS also estimates that using BBC for a three-ship polar icebreaker program could reduce the cost of that program by upwards of $150 million. The Coast Guard has expressed some interest in using BBC in the polar icebreaker program, but its baseline acquisition strategy for that program, like its current acquisition strategy for the OPC program, is to use a contract with options."], "subsections": []}]}, {"section_title": "Legislative Activity for FY2020", "paragraphs": [], "subsections": [{"section_title": "DOD FY2020 Proposals for New MYP and Block Buy Contracts", "paragraphs": ["As part of its FY2020 budget submission, the Department of Defense is proposing continued funding for implementing several MYP contracts initiated in fiscal years prior to FY2020, but it has not highlighted any requests for authority for new MYP or block buy contracts for major acquisition programs that would begin in FY2020.", "Appendix A. Text of 10 U.S.C. 2306b", "The text of 10 U.S.C. 2306b as of April 29, 2019, is as follows:", "\u00a72306b. Multiyear contracts: acquisition of property", "(a) In General.-To the extent that funds are otherwise available for obligation, the head of an agency may enter into multiyear contracts for the purchase of property whenever the head of that agency finds each of the following:", "(1) That the use of such a contract will result in significant savings of the total anticipated costs of carrying out the program through annual contracts.", "(2) That the minimum need for the property to be purchased is expected to remain substantially unchanged during the contemplated contract period in terms of production rate, procurement rate, and total quantities.", "(3) That there is a reasonable expectation that throughout the contemplated contract period the head of the agency will request funding for the contract at the level required to avoid contract cancellation.", "(4) That there is a stable design for the property to be acquired and that the technical risks associated with such property are not excessive.", "(5) That the estimates of both the cost of the contract and the anticipated cost avoidance through the use of a multiyear contract are realistic.", "(6) In the case of a purchase by the Department of Defense, that the use of such a contract will promote the national security of the United States.", "(7) In the case of a contract in an amount equal to or greater than $500,000,000, that the conditions required by subparagraphs (C) through (F) of subsection (i)(3) will be met, in accordance with the Secretary's certification and determination under such subsection, by such contract.", "(b) Regulations.-(1) Each official named in paragraph (2) shall prescribe acquisition regulations for the agency or agencies under the jurisdiction of such official to promote the use of multiyear contracting as authorized by subsection (a) in a manner that will allow the most efficient use of multiyear contracting.", "(2)(A) The Secretary of Defense shall prescribe the regulations applicable to the Department of Defense.", "(B) The Secretary of Homeland Security shall prescribe the regulations applicable to the Coast Guard, except that the regulations prescribed by the Secretary of Defense shall apply to the Coast Guard when it is operating as a service in the Navy.", "(C) The Administrator of the National Aeronautics and Space Administration shall prescribe the regulations applicable to the National Aeronautics and Space Administration.", "(c) Contract Cancellations.-The regulations may provide for cancellation provisions in multiyear contracts to the extent that such provisions are necessary and in the best interests of the United States. The cancellation provisions may include consideration of both recurring and nonrecurring costs of the contractor associated with the production of the items to be delivered under the contract.", "(d) Participation by Subcontractors, Vendors, and Suppliers.-In order to broaden the defense industrial base, the regulations shall provide that, to the extent practicable-", "(1) multiyear contracting under subsection (a) shall be used in such a manner as to seek, retain, and promote the use under such contracts of companies that are subcontractors, vendors, or suppliers; and", "(2) upon accrual of any payment or other benefit under such a multiyear contract to any subcontractor, vendor, or supplier company participating in such contract, such payment or benefit shall be delivered to such company in the most expeditious manner practicable.", "(e) Protection of Existing Authority.-The regulations shall provide that, to the extent practicable, the administration of this section, and of the regulations prescribed under this section, shall not be carried out in a manner to preclude or curtail the existing ability of an agency-", "(1) to provide for competition in the production of items to be delivered under such a contract; or", "(2) to provide for termination of a prime contract the performance of which is deficient with respect to cost, quality, or schedule.", "(f) Cancellation or Termination for Insufficient Funding.-In the event funds are not made available for the continuation of a contract made under this section into a subsequent fiscal year, the contract shall be canceled or terminated. The costs of cancellation or termination may be paid from-", "(1) appropriations originally available for the performance of the contract concerned;", "(2) appropriations currently available for procurement of the type of property concerned, and not otherwise obligated; or", "(3) funds appropriated for those payments.", "(g) Contract Cancellation Ceilings Exceeding $100,000,000.-(1) Before any contract described in subsection (a) that contains a clause setting forth a cancellation ceiling in excess of $100,000,000 may be awarded, the head of the agency concerned shall give written notification of the proposed contract and of the proposed cancellation ceiling for that contract to the congressional defense committees, and such contract may not then be awarded until the end of a period of 30 days beginning on the date of such notification.", "(2) In the case of a contract described in subsection (a) with a cancellation ceiling described in paragraph (1), if the budget for the contract does not include proposed funding for the costs of contract cancellation up to the cancellation ceiling established in the contract, the head of the agency concerned shall, as part of the certification required by subsection (i)(1)(A),1 give written notification to the congressional defense committees of-", "(A) the cancellation ceiling amounts planned for each program year in the proposed multiyear procurement contract, together with the reasons for the amounts planned;", "(B) the extent to which costs of contract cancellation are not included in the budget for the contract; and", "(C) a financial risk assessment of not including budgeting for costs of contract cancellation.", "(h) Defense Acquisitions of Weapon Systems.-In the case of the Department of Defense, the authority under subsection (a) includes authority to enter into the following multiyear contracts in accordance with this section:", "(1) A multiyear contract for the purchase of a weapon system, items and services associated with a weapon system, and logistics support for a weapon system.", "(2) A multiyear contract for advance procurement of components, parts, and materials necessary to the manufacture of a weapon system, including a multiyear contract for such advance procurement that is entered into in order to achieve economic-lot purchases and more efficient production rates.", "(i) Defense Acquisitions Specifically Authorized by Law.-(1) In the case of the Department of Defense, a multiyear contract in an amount equal to or greater than $500,000,000 may not be entered into under this section unless the contract is specifically authorized by law in an Act other than an appropriations Act.", "(2) In submitting a request for a specific authorization by law to carry out a defense acquisition program using multiyear contract authority under this section, the Secretary of Defense shall include in the request the following:", "(A) A report containing preliminary findings of the agency head required in paragraphs (1) through (6) of subsection (a), together with the basis for such findings.", "(B) Confirmation that the preliminary findings of the agency head under subparagraph (A) were supported by a preliminary cost analysis performed by the Director of Cost Assessment and Program Evaluation.", "(3) A multiyear contract may not be entered into under this section for a defense acquisition program that has been specifically authorized by law to be carried out using multiyear contract authority unless the Secretary of Defense certifies in writing, not later than 30 days before entry into the contract, that each of the following conditions is satisfied:", "(A) The Secretary has determined that each of the requirements in paragraphs (1) through (6) of subsection (a) will be met by such contract and has provided the basis for such determination to the congressional defense committees.", "(B) The Secretary's determination under subparagraph (A) was made after completion of a cost analysis conducted on the basis of section 2334(e)(2) 1 of this title, and the analysis supports the determination.", "(C) The system being acquired pursuant to such contract has not been determined to have experienced cost growth in excess of the critical cost growth threshold pursuant to section 2433(d) of this title within 5 years prior to the date the Secretary anticipates such contract (or a contract for advance procurement entered into consistent with the authorization for such contract) will be awarded.", "(D) A sufficient number of end items of the system being acquired under such contract have been delivered at or within the most current estimates of the program acquisition unit cost or procurement unit cost for such system to determine that current estimates of such unit costs are realistic.", "(E) During the fiscal year in which such contract is to be awarded, sufficient funds will be available to perform the contract in such fiscal year, and the future-years defense program for such fiscal year will include the funding required to execute the program without cancellation.", "(F) The contract is a fixed price type contract.", "(G) The proposed multiyear contract provides for production at not less than minimum economic rates given the existing tooling and facilities.", "(4) If for any fiscal year a multiyear contract to be entered into under this section is authorized by law for a particular procurement program and that authorization is subject to certain conditions established by law (including a condition as to cost savings to be achieved under the multiyear contract in comparison to specified other contracts) and if it appears (after negotiations with contractors) that such savings cannot be achieved, but that significant savings could nevertheless be achieved through the use of a multiyear contract rather than specified other contracts, the President may submit to Congress a request for relief from the specified cost savings that must be achieved through multiyear contracting for that program. Any such request by the President shall include details about the request for a multiyear contract, including details about the negotiated contract terms and conditions.", "(5)(A) The Secretary may obligate funds for procurement of an end item under a multiyear contract for the purchase of property only for procurement of a complete and usable end item.", "(B) The Secretary may obligate funds appropriated for any fiscal year for advance procurement under a contract for the purchase of property only for the procurement of those long-lead items necessary in order to meet a planned delivery schedule for complete major end items that are programmed under the contract to be acquired with funds appropriated for a subsequent fiscal year (including an economic order quantity of such long-lead items when authorized by law).", "(6) The Secretary may make the certification under paragraph (3) notwithstanding the fact that one or more of the conditions of such certification are not met, if the Secretary determines that, due to exceptional circumstances, proceeding with a multiyear contract under this section is in the best interest of the Department of Defense and the Secretary provides the basis for such determination with the certification.", "(7) The Secretary may not delegate the authority to make the certification under paragraph (3) or the determination under paragraph (6) to an official below the level of Under Secretary of Defense for Acquisition, Technology, and Logistics.", "(j) Defense Contract Options for Varying Quantities.-The Secretary of Defense may instruct the Secretary of the military department concerned to incorporate into a proposed multiyear contract negotiated priced options for varying the quantities of end items to be procured over the period of the contract.", "(k) Multiyear Contract Defined.-For the purposes of this section, a multiyear contract is a contract for the purchase of property for more than one, but not more than five, program years. Such a contract may provide that performance under the contract during the second and subsequent years of the contract is contingent upon the appropriation of funds and (if it does so provide) may provide for a cancellation payment to be made to the contractor if such appropriations are not made.", "(l) Various Additional Requirements With Respect to Multiyear Defense Contracts.-(1)(A) The head of an agency may not initiate a contract described in subparagraph (B) unless the congressional defense committees are notified of the proposed contract at least 30 days in advance of the award of the proposed contract.", "(B) Subparagraph (A) applies to the following contracts:", "(i) A multiyear contract-", "(I) that employs economic order quantity procurement in excess of $20,000,000 in any one year of the contract; or", "(II) that includes an unfunded contingent liability in excess of $20,000,000.", "(ii) Any contract for advance procurement leading to a multiyear contract that employs economic order quantity procurement in excess of $20,000,000 in any one year.", "(2) The head of an agency may not initiate a multiyear contract for which the economic order quantity advance procurement is not funded at least to the limits of the Government's liability.", "(3) The head of an agency may not initiate a multiyear procurement contract for any system (or component thereof) if the value of the multiyear contract would exceed $500,000,000 unless authority for the contract is specifically provided in an appropriations Act.", "(4) Each report required by paragraph (5) with respect to a contract (or contract extension) shall contain the following:", "(A) The amount of total obligational authority under the contract (or contract extension) and the percentage that such amount represents of-", "(i) the applicable procurement account; and", "(ii) the agency procurement total.", "(B) The amount of total obligational authority under all multiyear procurements of the agency concerned (determined without regard to the amount of the multiyear contract (or contract extension)) under multiyear contracts in effect at the time the report is submitted and the percentage that such amount represents of-", "(i) the applicable procurement account; and", "(ii) the agency procurement total.", "(C) The amount equal to the sum of the amounts under subparagraphs (A) and (B), and the percentage that such amount represents of-", "(i) the applicable procurement account; and", "(ii) the agency procurement total.", "(D) The amount of total obligational authority under all Department of Defense multiyear procurements (determined without regard to the amount of the multiyear contract (or contract extension)), including any multiyear contract (or contract extension) that has been authorized by the Congress but not yet entered into, and the percentage that such amount represents of the procurement accounts of the Department of Defense treated in the aggregate.", "(5) The head of an agency may not enter into a multiyear contract (or extend an existing multiyear contract), the value of which would exceed $500,000,000 (when entered into or when extended, as the case may be), until the Secretary of Defense submits to the congressional defense committees a report containing the information described in paragraph (4) with respect to the contract (or contract extension).", "(6) The head of an agency may not terminate a multiyear procurement contract until 10 days after the date on which notice of the proposed termination is provided to the congressional defense committees.", "(7) The execution of multiyear contracting authority shall require the use of a present value analysis to determine lowest cost compared to an annual procurement.", "(8) This subsection does not apply to the National Aeronautics and Space Administration or to the Coast Guard.", "(9) In this subsection:", "(A) The term \"applicable procurement account\" means, with respect to a multiyear procurement contract (or contract extension), the appropriation account from which payments to execute the contract will be made.", "(B) The term \"agency procurement total\" means the procurement accounts of the agency entering into a multiyear procurement contract (or contract extension) treated in the aggregate.", "(m) Increased Funding and Reprogramming Requests.-Any request for increased funding for the procurement of a major system under a multiyear contract authorized under this section shall be accompanied by an explanation of how the request for increased funding affects the determinations made by the Secretary under subsection (i).", "Appendix B. Programs Approved for MYP in Annual DOD Appropriations Acts Since FY1990", "This appendix presents, in two tables, programs approved for MYP in annual DOD appropriations acts since FY1990. Table B-1 covers FY2011 to the present, and Table B-2 covers FY1990 through FY2010."], "subsections": []}]}]}}
{"id": "R44201", "title": "DOT\u2019s Federal Pipeline Safety Program: Background and Key Issues for Congress", "released_date": "2019-03-29T00:00:00", "summary": ["The U.S. energy pipeline network is composed of approximately 3 million miles of pipeline transporting natural gas, oil, and other hazardous liquids. Recent incidents in California, Pennsylvania, Massachusetts, and other states have drawn criticism from stakeholders and have raised concerns in Congress about pipeline safety. The Department of Energy's (DOE's) 2015 Quadrennial Energy Review also highlighted pipeline safety as an issue for the nation's energy infrastructure. Recent incident statistics suggest there is opportunity for safety improvement.", "The federal pipeline safety program is administered by the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA), which relies heavily on state partnerships for inspection and enforcement of its regulations. PHMSA's pipeline safety program is authorized through FY2019. For FY2019, PHMSA's estimated budget authority is approximately $164 million\u2014more than double the agency's budget authority in FY2008 (not adjusted for inflation). Much of PHMSA's funding is for inspectors. However, due to private sector competition, the agency faces persistent challenges recruiting and retaining the staff for which it is funded. The Trump Administration's requested budget authority for PHMSA is approximately $151 million for FY2020, roughly 8% less than the FY2019 amount. The request would only slightly reduce PHMSA staffing but proposes cuts in state grants that could impact staffing at state pipeline safety agencies. In the wake of major incidents involving facilities under state jurisdiction, some state programs have come under scrutiny regarding their effectiveness and oversight by PHMSA.", "Congress has used past reauthorizations to impose various mandates on PHMSA regarding standards, studies, and other elements of pipeline safety regulation. The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (P.L. 112-90) and the PIPES Act of 2016 (P.L. 114-183) together included 61 such mandates. As of March 5, 2019, according to PHMSA, the agency had completed 34 of 42 mandates under P.L. 112-90 and 16 of 19 mandates under P.L. 114-183. PHMSA also has not satisfied a number of safety recommendations from the National Transportation Safety Board (NTSB). Some in Congress are concerned that major mandates and NTSB recommendations remain unfulfilled.", "The NTSB highlighted aging pipelines as a particular concern in its 2019-2020 Most Wanted List of Transportation Safety Improvements. Likewise, Congress has ongoing interest in the safety of older transmission pipelines and in the replacement of leaky and deteriorating cast iron pipe in natural gas distribution systems. Recent accidents involving older pipelines and related infrastructure may refocus attention on PHMSA's regulation of pipe replacement (currently voluntary), pipeline modernization projects and work packages, older pipeline records, safety management systems, and other issues related to aging pipelines.", "Ongoing physical and cyber threats against the nation's pipelines since passage of the PIPES Act have heightened concerns about pipeline security risks. Although the Transportation Security Administration (TSA) has the primary statutory authority over pipeline security, pipeline safety and security are intertwined\u2014and PHMSA is involved in both. Under the terms of a 2006 agreement, PHMSA and TSA are directed to work together \"to delineate clear lines of authority \u2026 in the area of transportation security.\" While PHMSA reports ongoing cooperation with TSA, questions remain about what this cooperation entails and the ongoing roles of the two agencies.", "In addition to these specific issues, Congress may assess how the various elements of U.S. pipeline safety and security fit together in the nation's overall approach to protect the public and the environment. This approach involves federal and state agencies, pipeline associations, large and small pipeline operators, and local communities. Reviewing how these various groups work together to achieve common goals could be an overarching consideration for Congress."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The U.S. energy pipeline network is integral to the nation's energy supply and provides vital links to other critical infrastructure, such as power plants, airports, and military bases. These pipelines are geographically widespread, running alternately through remote and densely populated regions\u2014from Arctic Alaska to the Gulf of Mexico and nearly everywhere in between. Because these pipelines carry volatile, flammable, or toxic materials, they have the potential to injure the public, destroy pr operty, and damage the environment. Although they are generally an efficient and comparatively safe means of transport, pipeline systems are nonetheless vulnerable to accidents, operational failure, and malicious attacks. A series of accidents in California, Pennsylvania, and Massachusetts, among other places, have demonstrated this vulnerability and have heightened congressional concern about U.S. pipeline safety. The Department of Energy's first Quadrennial Energy Review (QER), released in 2015, also highlighted pipeline safety as a growing concern for the nation's energy infrastructure.", "The federal pipeline safety program resides primarily within the Department of Transportation's (DOT's) Pipeline and Hazardous Materials Safety Administration (PHMSA), although its inspection and enforcement activities rely heavily upon partnerships with the states. Together, the federal and state pipeline safety agencies administer a comprehensive set of regulatory authorities which has changed significantly over the last decade and continues to do so. The federal pipeline safety program is authorized through the fiscal year ending September 30, 2019, under the Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (PIPES Act; P.L. 114-183 ) signed by President Obama on June 22, 2016.", "This report reviews the history of federal programs for pipeline safety, discusses significant safety concerns, and summarizes recent developments focusing on key policy issues. It discusses the roles of other federal agencies involved in pipeline safety and security, including their relationship with PHMSA. Although pipeline security is not mainly under PHMSA's jurisdiction, the report examines the agency's past role in pipeline security and its recent activities working on security-related issues with other agencies."], "subsections": [{"section_title": "The U.S. Pipeline Network", "paragraphs": ["The U.S. energy pipeline network is composed of approximately 3 million miles of pipeline transporting natural gas, oil, and hazardous liquids ( Table 1 ). Of the nation's approximately half million miles of long-distance transmission pipeline, roughly 215,000 miles carry hazardous liquids\u2014over two thirds of the nation's crude oil and refined petroleum products, along with other products. The U.S. natural gas pipeline network consists of around 300,000 miles of inter state and intra state transmission. It also contains some 240,000 miles of field and gathering pipeline, which connect gas extraction wells to processing facilities. However, with 7% of gathering lines currently under federal regulation (discussed later in this report), the total mileage of U.S. gathering lines is not known more precisely. Few state agencies collect this information. The natural gas transmission pipelines feed around 2.2 million miles of regional pipelines in some 1,500 local distribution networks serving over 69 million customers. Natural gas pipelines also connect to 152 active liquefied natural gas (LNG) storage sites, as well as underground storage facilities, both of which can augment pipeline gas supplies during peak demand periods."], "subsections": []}]}, {"section_title": "Safety in the Pipeline Industry", "paragraphs": ["Uncontrolled pipeline releases can result from a variety of causes, including third-party excavation, corrosion, mechanical failure, control system failure, operator error, and malicious acts. Natural forces, such as floods and earthquakes, can also damage pipelines. Taken as a whole, releases from pipelines cause few annual injuries or fatalities compared to other product transportation modes. According to PHMSA statistics, there were, on average, 12 deaths and 66 injuries annually caused by 32 pipeline incidents in all U.S. pipeline systems from 2009 through 2018. After steady decline between 2009 and 2013, the average incident count increased and recently shows no clear trend ( Figure 1 ). A total of 40 serious pipeline incidents was reported for 2018.", "Apart from injury to people, some accidents may cause environmental damage or other physical impacts, which may be significant, particularly in the case of oil spills or fires. PHMSA requires the reporting of such incidents involving", "$50,000 or more in total costs, measured in 1984 dollars, highly volatile liquid releases of 5 barrels or more or other liquid releases of 50 barrels or more, or liquid releases resulting in an unintentional fire or explosion.", "On average there were 260 such \"significant\" incidents (not involving injury or fatality) per year from 2009 through 2018. As with serious incidents, there is no clear trend for pipeline incidents affecting only the environment or property over the last five years ( Figure 2 ). It should be noted that federally regulated pipeline mileage overall rose approximately 7% over this period; neither the annual statistics for injury nor environmental incidents are adjusted on a per-mile basis. ", "Although pipeline releases have caused relatively few fatalities in absolute numbers, a single pipeline accident can be catastrophic in terms of public safety and environmental damage. Notable pipeline and pipeline-related incidents over the last decade include the following:", "2010 \u2015A pipeline spill in Marshall, MI, released 19,500 barrels of crude oil into a tributary of the Kalamazoo River. 2010 \u2014An explosion caused by a natural gas pipeline in San Bruno, CA, killed 8 people, injured 60 others, and destroyed 37 homes. 2011\u2015 An explosion caused by a natural gas pipeline in Allentown, PA, killed 5 people, damaged 50 buildings, and caused 500 people to be evacuated. 2011 \u2015A pipeline spill near Laurel, MT, released an estimated 1,000 barrels of crude oil into the Yellowstone River. 2012 \u2014An explosion caused by a natural gas pipeline in Springfield, MA, injured 21 people and damaged over a dozen buildings. 2013 \u2014An oil pipeline spill in Mayflower, AK, spilled 5,000 barrels of crude oil in a residential community causing 22 homes to be evacuated. 2014 \u2014An explosion caused by a natural gas distribution pipeline in New York City killed 8 people, injured 50 others, and destroyed two 5-story buildings. 2015 \u2014A pipeline in Santa Barbara County, CA, spilled 3,400 barrels of crude oil, including 500 barrels reaching Refugio State Beach on the Pacific Ocean. 2015 \u2014 The Aliso Canyon underground natural gas storage facility in Los Angeles County, CA, released 5.4 billion cubic feet of gas, causing the temporary relocation of over 2,000 households and two schools in Porter Ranch. 2016 \u2014An explosion caused by a natural gas distribution pipeline in Canton, OH, killed one person, injured 11 others, and damaged over 50 buildings. 201 8 \u2014Explosions and fires caused by natural gas distribution pipelines in the Merrimack Valley, MA, killed one person, injured 21 others, damaged 131 structures, and required 30,000 residents to evacuate. ", "Such incidents have generated persistent scrutiny of pipeline regulation and have increased state and community activity related to pipeline safety."], "subsections": []}, {"section_title": "Federal Agencies in Pipeline Safety", "paragraphs": ["Three federal agencies play the most significant roles in the formulation, administration, and oversight of pipeline safety regulations in the United States. As stated above, PHMSA has the primary responsibility for the promulgation and enforcement of federal pipeline safety standards. The Federal Energy Regulatory Commission (FERC) is not operationally involved in pipeline safety but examines safety issues under its siting authority for interstate natural gas pipelines. The National Transportation Safety Board (NTSB) investigates transportation accidents\u2014including pipeline accidents\u2014and issues associated safety recommendations. These agency roles are discussed in the following sections. "], "subsections": [{"section_title": "Pipeline and Hazardous Materials Safety Administration", "paragraphs": ["The Natural Gas Pipeline Safety Act of 1968 (P.L. 90-481) and the Hazardous Liquid Pipeline Act of 1979 ( P.L. 96-129 ) are two of the principal early acts establishing the federal role in pipeline safety. Under both statutes, the Transportation Secretary is given primary authority to regulate key aspects of interstate pipeline safety: design, construction, operation and maintenance, and spill response planning. Pipeline safety regulations are covered in Title 49 of the Code of Federal Regulations ."], "subsections": [{"section_title": "PHMSA Organization and Funding", "paragraphs": ["As of March 8, 2019, PHMSA employed 290 full-time equivalent (FTE) staff in its Office of Pipeline Safety (OPS)\u2014including 145 regional inspectors\u2014and in DOT offices outside of OPS that also support pipeline safety functions. Those staff include attorneys, data analysts, information technology specialists, and regulatory specialists required for certain enforcement actions, promulgating regulations, issuing pipeline safety grants, and issuing agreements for pipeline safety research and development.", "In addition to federal staff, PHMSA's enabling legislation allows the agency to delegate authority to intra state pipeline safety offices, and allows state offices to act as \"agents\" administering inter state pipeline safety programs (excluding enforcement) for those sections of inter state pipelines within their boundaries. According to the DOT, \"PHMSA leans heavily on state inspectors for the vast network of intrastate lines.\" A few states serve as agents for inspection of interstate pipelines as well. There were approximately 380 state pipeline safety inspectors in 2018.", "PHMSA's pipeline safety program is funded primarily by user fees assessed on a per-mile basis on each regulated pipeline operator. The agency's total annual budget authority has grown fairly steadily since 2001, with the largest increase in FY2015 ( Figure 3 ). For FY2019, PHMSA's estimated budget authority is approximately $164 million\u2014more than double the agency's budget authority in FY2008 (not adjusted for inflation). The Trump Administration's requested budget authority for PHMSA is approximately $151 million for FY2020, roughly 8% less than the FY2019 budget authority, with proposed reductions primarily in contract programs, research and development, and grants to states."], "subsections": []}, {"section_title": "PHMSA's Regulatory Activities", "paragraphs": ["PHMSA uses a variety of strategies to promote compliance with its safety standards. The agency conducts programmatic inspections of management systems, procedures, and processes; conducts physical inspections of facilities and construction projects; investigates safety incidents; and maintains a dialogue with pipeline operators. The agency clarifies its regulatory expectations through published protocols and regulatory orders, guidance manuals, and public meetings. PHMSA relies upon a range of enforcement actions, including administrative actions such as corrective action orders (CAOs) and civil penalties, to ensure that operators correct safety violations and take measures to preclude future safety problems.", "From 2014 through 2018, PHMSA initiated 943 enforcement actions against pipeline operators. Of these cases, 348 resulted in safety orders to operators. Civil penalties proposed by PHMSA for safety violations during this period totaled approximately $24.2 million. PHMSA also conducts accident investigations and system-wide reviews focusing on high-risk operational or procedural problems and areas of the pipeline near sensitive environmental areas, high-density populations, or navigable waters.", "Since 1997, PHMSA has increasingly required industry's implementation of \"integrity management\" programs on pipeline segments near \"high consequence areas.\" Integrity management provides for continual evaluation of pipeline condition; assessment of risks to the pipeline; inspection or testing; data analysis; and follow-up repair; as well as preventive or mitigative actions. High consequence areas (HCAs) include population centers, commercially navigable waters, and environmentally sensitive areas, such as drinking water supplies or ecological reserves. The integrity management approach prioritizes resources to locations of highest consequence rather than applying uniform treatment to the entire pipeline network. PHMSA made integrity management programs mandatory for most oil pipeline operators with 500 or more miles of regulated pipeline as of March 31, 2001 (49 C.F.R. \u00a7195). Congress subsequently mandated the expansion of integrity management to natural gas pipelines, along with other significant changes to federal pipeline safety requirements, through a series of agency budget reauthorizations as discussed below."], "subsections": []}, {"section_title": "PHMSA Reauthorization and Pipeline Safety Statutes", "paragraphs": ["The PIPES Act of 2016 was preceded by a series of periodic pipeline safety statutes, each of which reauthorized funding for PHMSA's pipeline safety program and included other provisions related to PHMSA's authorities, administration, or regulatory activities. "], "subsections": [{"section_title": "Pipeline Safety Improvement Act of 2002", "paragraphs": ["On December 12, 2002, President George W. Bush signed into law the Pipeline Safety Improvement Act of 2002 ( P.L. 107-355 ). The act strengthened federal pipeline safety programs, state oversight of pipeline operators, and public education regarding pipeline safety. Among other provisions, P.L. 107-355 required operators of regulated natural gas pipelines in high-consequence areas to conduct risk analysis and implement integrity management programs similar to those required for oil pipelines. The act authorized DOT to order safety actions for pipelines with potential safety problems and increased violation penalties. The act streamlined the permitting process for emergency pipeline restoration by establishing an interagency committee, including the DOT, the Environmental Protection Agency, the Bureau of Land Management, the Federal Energy Regulatory Commission, and other agencies, to ensure coordinated review and permitting of pipeline repairs. The act required DOT to study ways to limit pipeline safety risks from population encroachment and ways to preserve environmental resources in pipeline rights-of-way. P.L. 107-355 also included provisions for public education, grants for community pipeline safety studies, \"whistle blower\" and other employee protection, employee qualification programs, and mapping data submission."], "subsections": []}, {"section_title": "Pipeline Inspection, Protection, Enforcement, and Safety Act of 2006", "paragraphs": ["On December 29, 2006, President Bush signed into law the Pipeline Inspection, Protection, Enforcement and Safety Act of 2006 ( P.L. 109-468 ). The main provisions of the act address pipeline damage prevention, integrity management, corrosion control, and enforcement transparency. The act created a national focus on pipeline damage prevention through grants to states for improving damage prevention programs, establishing 811 as the national \"call before you dig\" one-call telephone number, and giving PHMSA limited \"backstop\" authority to conduct civil enforcement against one-call violators in states that have failed to conduct such enforcement. The act mandated the promulgation by PHMSA of minimum standards for integrity management programs for natural gas distribution pipelines. It also mandated a review of the adequacy of federal pipeline safety regulations related to internal corrosion control, and required PHMSA to increase the transparency of enforcement actions by issuing monthly summaries, including violation and penalty information, and a mechanism for pipeline operators to make response information available to the public."], "subsections": []}, {"section_title": "Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011", "paragraphs": ["On January 3, 2012, President Obama signed the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (Pipeline Safety Act, P.L. 112-90 ). The act contains a broad range of provisions addressing pipeline safety. Among the most significant are provisions to increase the number of federal pipeline safety inspectors, require automatic shutoff valves for transmission pipelines, mandate verification of maximum allowable operating pressure for gas transmission pipelines, increase civil penalties for pipeline safety violations, and mandate reviews of diluted bitumen pipeline regulation. Altogether, the act imposed 42 mandates on PHMSA regarding studies, rules, maps, and other elements of the federal pipeline safety program. P.L. 112-90 authorized the federal pipeline safety program through the fiscal year ending September 30, 2015."], "subsections": []}, {"section_title": "Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2016", "paragraphs": ["On June 22, 2016, President Obama signed the Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (PIPES Act, P.L. 114-183 ). As noted earlier, the act authorizes the federal pipeline safety program through FY2019. Among its other provisions, the act requires PHMSA to promulgate federal safety standards for underground natural gas storage facilities and grants PHMSA emergency order authority to address urgent \"industry-wide safety conditions\" without prior notice. The act also requires PHMSA to report regularly on the progress of outstanding statutory mandates, which are discussed later in this report."], "subsections": []}]}]}, {"section_title": "Federal Energy Regulatory Commission", "paragraphs": ["One area related to pipeline safety not under PHMSA's primary jurisdiction is the siting approval of interstate natural gas pipelines, which is the responsibility of the Federal Energy Regulatory Commission (FERC). Companies building interstate natural gas pipelines must first obtain from FERC certificates of public convenience and necessity. (FERC does not oversee oil pipeline construction.) FERC must also approve the abandonment of gas facility use and services. These approvals may include safety provisions with respect to pipeline routing, safety standards, and other factors. In particular, pipeline and aboveground facilities associated with a proposed pipeline project must be designed in accordance with PHMSA's safety standards regarding material selection and qualification, design requirements, and protection from corrosion.", "FERC and PHMSA cooperate on pipeline safety-related matters according to a Memorandum of Understanding (MOU) signed in 1993. According to the MOU, PHMSA agrees to", "promptly alert FERC when safety activities may impact commission responsibilities, notify FERC of major accidents or significant enforcement actions involving pipelines under FERC's jurisdiction, refer to FERC complaints and inquiries by state and local governments and the public about environmental or certificate matters related to FERC-jurisdictional pipelines, and when requested by FERC, review draft mitigation conditions considered by the commission for potential conflicts with PHMSA's regulations.", "Under the MOU, FERC agrees to", "promptly alert PHMSA when the commission learns of an existing or potential safety problem involving natural gas transmission facilities, notify PHMSA of future pipeline construction, periodically provide PHMSA with updates to the environmental compliance inspection schedule, and coordinate site inspections, upon request, with PHMSA officials, notify PHMSA when significant safety issues have been raised during the preparation of environmental assessments or environmental impact statements for pipeline projects, and refer to PHMSA complaints and inquiries made by state and local governments and the public involving safety matters related to FERC-jurisdictional pipelines.", "FERC may also serve as a member of PHMSA's Technical Pipeline Safety Standards Committee which determines whether proposed safety regulations are technically feasible, reasonable, cost-effective, and practicable.", "In April 2015, FERC issued a policy statement to provide \"greater certainty regarding the ability of interstate natural gas pipelines to recover the costs of modernizing their facilities and infrastructure to enhance the efficient and safe operation of their systems.\" FERC's policy statement was motivated by the commission's expectation that governmental safety and environmental initiatives could soon cause greater safety and reliability costs for interstate gas pipeline systems. "], "subsections": []}, {"section_title": "National Transportation Safety Board", "paragraphs": ["The National Transportation Safety Board (NTSB) is an independent federal agency charged with determining the probable cause of transportation incidents\u2014including pipeline releases\u2014and promoting transportation safety. The board's experts investigate significant incidents, develop factual records, and issue safety recommendations to prevent similar events from reoccurring. The NTSB has no statutory authority to regulate transportation, however, and it does not perform cost-benefit analyses of regulatory changes; its safety recommendations to industry or government agencies are not mandatory. Nonetheless, because of the board's strong reputation for thoroughness and objectivity, over 82% of the NTSB's safety recommendations have been implemented across all transportation modes. In the pipeline sector, specifically, the NTSB's safety recommendations have led to changes in pipeline safety regulation regarding one-call systems before excavation (\"Call Before You Dig\"), use of pipeline internal inspection devices, facility response plan effectiveness, hydrostatic pressure testing of older pipelines, and other pipeline safety improvements."], "subsections": [{"section_title": "San Bruno Pipeline Incident Investigation", "paragraphs": ["In August 2011, the NTSB issued preliminary findings and recommendations from its investigation of the San Bruno Pipeline incident. The investigation included testimony from pipeline company officials, government agency officials (PHMSA, state, and local), as well as testimony from other pipeline experts and stakeholders. The investigation determined that the pipeline ruptured due to a faulty weld in a pipeline section constructed in 1956. In addition to specifics about the San Bruno incident, the hearing addressed more general pipeline issues, including public awareness initiatives, pipeline technology, and oversight of pipeline safety by federal and state regulators. The NTSB's findings were highly critical of the pipeline operator (Pacific Gas and Electric, PG&E) as well as both the state and federal pipeline safety regulators. The board concluded that \"the multiple and recurring deficiencies in PG&E operational practices indicate a systemic problem\" with respect to its pipeline safety program. The board further concluded that ", "the pipeline safety regulator within the state of California, failed to detect the inadequacies in PG&E's integrity management program and that the Pipeline and Hazardous Materials Safety Administration integrity management inspection protocols need improvement. Because the Pipeline and Hazardous Materials Safety Administration has not incorporated the use of effective and meaningful metrics as part of its guidance for performance-based management pipeline safety programs, its oversight of state public utility commissions regulating gas transmission and hazardous liquid pipelines could be improved.", "In an opening statement about the San Bruno incident report, the NTSB chairman summarized the board's findings as \"troubling revelations \u2026 about a company that exploited weaknesses in a lax system of oversight and government agencies that placed a blind trust in operators to the detriment of public safety.\" The NTSB's final incident report concluded \"that PHMSA's enforcement program and its monitoring of state oversight programs have been weak and have resulted in the lack of effective Federal oversight and state oversight.\" ", "The NTSB issued 39 recommendations stemming from its San Bruno incident investigation, including 20 recommendations to the Secretary of Transportation and PHMSA. These recommendations included the following:", "conducting audits to assess the effectiveness of PHMSA's oversight of performance-based pipeline safety programs and state pipeline safety program certification, requiring pipeline operators to provide system-specific information to the emergency response agencies of the communities in which pipelines are located, requiring that automatic shutoff valves or remote control valves be installed in high consequence areas and in class 3 and 4 locations, requiring that all natural gas transmission pipelines constructed before 1970 be subjected to a hydrostatic pressure test that incorporates a pressure spike test, requiring that all natural gas transmission pipelines be configured so as to accommodate internal inspection tools, with priority given to older pipelines, and revising PHMSA's integrity management protocol to incorporate meaningful metrics, set performance goals for pipeline operators, and require operators to regularly assess the effectiveness of their programs using meaningful metrics."], "subsections": []}, {"section_title": "Marshall, MI, Pipeline Incident Investigation", "paragraphs": ["In July 2012, the NTSB issued the final report of its investigation of the Marshall, MI, oil pipeline spill. In addition to finding management and operation failures by the pipeline operator, the report was critical of PHMSA for inadequate regulatory requirements and oversight of crack defects in pipelines, inadequate regulatory requirements for emergency response plans, generally, and inadequate review and approval of the response plan for this particular pipeline. The NTSB issued eight recommendations to the Secretary of Transportation and PHMSA, including", "auditing the business practices of PHMSA's onshore pipeline facility response plan programs, including reviews of response plans and drill programs, to correct deficiencies, allocating sufficient resources to ensure that PHMSA's facility response plan program meets all of the requirements of the Oil Pollution Act of 1990, clarifying and strengthening federal regulation related to the identification and repair of pipeline crack defects, issuing advisory bulletins to all hazardous liquid and natural gas pipeline operators describing the circumstances of the accident in Marshall, asking them to take appropriate action to eliminate similar deficiencies, to identify deficiencies in facility response plans, and to update these plans as necessary, developing requirements for team training of control center staff involved in pipeline operations similar to those used in other transportation modes, strengthening operator qualification requirements, and harmonizing onshore oil pipeline response planning requirements with those of the U.S. Coast Guard and the U.S. Environmental Protection Agency for oil and petroleum products facilities to ensure that operators have adequate resources for worst-case discharges."], "subsections": []}, {"section_title": "Merrimack Valley Pipeline Incident Investigation", "paragraphs": ["In October 2018, the NTSB issued a preliminary report of its investigation into the Merrimack Valley natural gas fires and explosions, which affected the communities of Lawrence, Andover, and North Andover, MA. The report concluded, based on an initial investigation, that the natural gas releases were caused by excessive pressure in a local distribution main during a cast iron pipeline replacement project. Due to an erroneous work order, pipeline workers improperly bypassed critical pipeline pressure-sensing lines. Without an accurate sensor signal from the bypassed pipeline segment, the pipeline pressure regulators allowed high-pressure gas into the distribution lines supplying homes and businesses\u2014many of which failed and released natural gas as a result. The NTSB's formal incident investigation continues, so the agency has not yet released a final accident report. However, in response to its initial findings, the NTSB made a preliminary recommendation to the Commonwealth of Massachusetts to eliminate its professional engineer license exemption for public utility work and to require a professional engineer's seal on public utility engineering drawings. The NTSB also made recommendations to the natural gas distribution utility regarding its design and operating practices. It made no recommendations to PHMSA."], "subsections": []}, {"section_title": "Other Investigations", "paragraphs": ["The NTSB has made recommendations to PHMSA as a result of other pipeline incident investigations. Detailed discussion of NTSB findings and recommendations, including those described above, are publicly available in the NTSB's docket management system. In addition, in January 2015, the NTSB released a safety study examining integrity management of natural gas transmission pipelines in high consequence areas. The study identified several areas of potential safety improvement among such facilities", "expanding and improving PHMSA guidance to both operators and inspectors for the development, implementation, and inspection of operators' integrity management programs, expanding the use of in-line inspection, especially for intrastate pipelines, eliminating the use of direct assessment as the sole integrity assessment method, evaluating the effectiveness of the approved risk assessment approaches, strengthening aspects of inspector training, developing minimum professional qualification criteria for all personnel involved in integrity management programs, and improving data collection and reporting, including geospatial data.", "PHMSA maintains a list of NTSB's pipeline safety recommendations directed at the agency which are currently open. As of September 11, 2018, there were 25 open recommendations dating back to 2011. In many cases, NTSB has classified these recommendations as \"Open\u2014Acceptable Response\" because they are being incorporated satisfactorily in ongoing PHMSA rulemakings, further discussed below. However, a few recommendations are classified as \"Open\u2014Unacceptable response,\" because NTSB is not satisfied with PHMSA's actions to implement them."], "subsections": []}]}]}, {"section_title": "PHMSA's Role in Pipeline Security", "paragraphs": ["Pipeline safety and security are distinct issues involving different threats, statutory authorities, and regulatory frameworks. Nonetheless, pipeline safety and security are intertwined in some respects\u2014and PHMSA is involved in both.", "The Department of Transportation played the leading role in pipeline security through the late 1990s. Presidential Decision Directive 63 (PDD-63), issued during the Clinton Administration, assigned lead responsibility for pipeline security to DOT. These responsibilities fell to the Office of Pipeline Safety, at that time a part of DOT's Research and Special Programs Administration, because the agency was already addressing some elements of pipeline security in its role as safety regulator. The DOT's pipeline (and LNG) safety regulations already included provisions related to physical security, such as requirements to protect surface facilities (e.g., pumping stations) from vandalism and unauthorized entry. Other regulations required continuing surveillance, patrolling pipeline rights-of-way, damage prevention, and emergency procedures.", "In the early 2000s, OPS conducted a vulnerability assessment to identify critical pipeline facilities and worked with industry groups and state pipeline safety organizations \"to assess the industry's readiness to prepare for, withstand and respond to a terrorist attack.... \" Together with DOE and state pipeline agencies, OPS promoted the development of consensus standards for security measures tiered to correspond with the five levels of threat warnings issued by the Office of Homeland Security. OPS also developed protocols for inspections of critical facilities to ensure that operators implemented appropriate security practices. To convey emergency information and warnings, OPS established a variety of communication links to key staff at the most critical pipeline facilities throughout the country. OPS also began identifying near-term technology to enhance deterrence, detection, response, and recovery, and began seeking to advance public and private sector planning for response and recovery.", "On September 5, 2002, OPS circulated formal guidance developed in cooperation with the pipeline industry associations defining the agency's security program recommendations and implementation expectations. This guidance recommended that operators identify critical facilities, develop security plans consistent with prior trade association security guidance, implement these plans, and review them annually. While the guidance was voluntary, OPS expected compliance and informed operators of its intent to begin reviewing security programs and to test their effectiveness."], "subsections": [{"section_title": "PHMSA Cooperation with TSA", "paragraphs": ["In November 2001, President Bush signed the Aviation and Transportation Security Act ( P.L. 107-71 ) establishing the Transportation Security Administration (TSA) within DOT. According to TSA, the act placed DOT's pipeline security authority (under PDD-63) within TSA. The act specified for TSA a range of duties and powers related to general transportation security, such as intelligence management, threat assessment, mitigation, security measure oversight, and enforcement. On November 25, 2002, President Bush signed the Homeland Security Act of 2002 ( P.L. 107-296 ) creating the Department of Homeland Security (DHS). Among other provisions, the act transferred the Transportation Security Administration from DOT to DHS (\u00a7403). On December 17, 2003, President Bush issued Homeland Security Presidential Directive 7 (HSPD-7), clarifying executive agency responsibilities for identifying, prioritizing, and protecting critical infrastructure. HSPD-7 maintained DHS as the lead agency for pipeline security (paragraph 15), and instructed DOT to \"collaborate in regulating the transportation of hazardous materials by all modes (including pipelines)\" (paragraph 22h).", "In 2004, the DOT and DHS entered into a memorandum of understanding concerning their respective security roles in all modes of transportation. The MOU notes that DHS has the primary responsibility for transportation security with support from the DOT, and establishes a general framework for cooperation and coordination. The MOU states that \"specific tasks and areas of responsibility that are appropriate for cooperation will be documented in annexes ... individually approved and signed by appropriate representatives of DHS and DOT.\" On August 9, 2006, the departments signed an annex \"to delineate clear lines of authority and responsibility and promote communications, efficiency, and nonduplication of effort through cooperation and collaboration between the parties in the area of transportation security.\"", "In January 2007, the PHMSA Administrator testified before Congress that the agency had established a joint working group with TSA \"to improve interagency coordination on transportation security and safety matters, and to develop and advance plans for improving transportation security,\" presumably including pipeline security. According to TSA, the working group developed a multiyear action plan specifically delineating roles, responsibilities, resources and actions to execute 11 program elements: identification of critical infrastructure/key resources, and risk assessments; strategic planning; developing regulations and guidelines; conducting inspections and enforcement; providing technical support; sharing information during emergencies; communications; stakeholder relations; research and development; legislative matters; and budgeting.", "P.L. 109-468 required the DOT Inspector General (IG) to assess the pipeline security actions taken by the DOT in implementing its 2004 MOU with the DHS (\u00a723). The Inspector General published this assessment in May 2008. The IG report stated,", "PHMSA and TSA have taken initial steps toward formulating an action plan to implement the provisions of the pipeline security annex.... However, further actions need to be taken with a sense of urgency because the current situation is far from an \"end state\" for enhancing the security of the Nation's pipelines.", "The report recommended that PHMSA and TSA finalize and execute their security annex action plan, clarify their respective roles, and jointly develop a pipeline security strategy that maximizes the effectiveness of their respective capabilities and efforts. According to TSA, working with PHMSA \"improved drastically\" after the release of the IG report; the two agencies began to maintain daily contact, share information in a timely manner, and collaborate on security guidelines and incident response planning. Consistent with this assertion, in March 2010, TSA published a Pipeline Security and Incident Recovery Protocol Plan which lays out in detail the separate and cooperative responsibilities of the two agencies with respect to a pipeline security incident. Among other notes, the plan states,", "DOT has statutory tools that may be useful during a security incident, such as special permits, safety orders, and corrective action orders. DOT/PHMSA also has access to the Regional Emergency Transportation Coordinator (RETCO) Program\u2026. Each RETCO manages regional DOT emergency preparedness and response activities in the assigned region on behalf of the Secretary of Transportation.", "The plan also refers to the establishment of an Interagency Threat Coordination Committee established by TSA and PHMSA to organize and communicate developing threat information among federal agencies that may have responsibility for pipeline incident response. ", "DOT has continued to cooperate with TSA on pipeline security in recent years. For example, TSA coordinated with DOT and other agencies to address ongoing vandalism and sabotage against critical pipelines by environmental activists in 2016. In April 2016, the Director of TSA's Surface Division testified about her agency's relationship with DOT:", "TSA and DOT co-chair the Pipeline Government Coordinating Council to facilitate information sharing and coordinate on activities including security assessments, training, and exercises. TSA and DOT's Pipeline and Hazardous Materials Safety Administration (PHMSA) work together to integrate pipeline safety and security priorities, as measures installed by pipeline owners and operators often benefit both safety and security.", "In December 2016, PHMSA issued an Advisory Bulletin \"in coordination with\" TSA regarding cybersecurity threats to pipeline Supervisory Control and Data Acquisition (SCADA) systems. In July 2017, the two agencies collaborated on a web-based portal to facilitate sharing sensitive but unclassified incident information among federal agencies with pipeline responsibilities. In February 2018, the Director of TSA's Surface Division again testified about cooperation with PHMSA, stating \"TSA works closely with [PHMSA] for incident response and monitoring of pipeline systems,\" although she did not provide specific examples."], "subsections": []}]}, {"section_title": "Key Policy Issues", "paragraphs": ["The 116 th Congress may focus on several key issues in its continuing oversight of federal pipeline safety and as it considers PHMSA's reauthorization, including incomplete statutory mandates, adequacy of PHMSA staffing, state program oversight, aging pipeline infrastructure, and PHMSA's role in pipeline security. These issues are discussed in the following sections."], "subsections": [{"section_title": "Overdue PHMSA Statutory Mandates", "paragraphs": ["Congress has used reauthorizations to impose on PHMSA various mandates regarding standards, studies, and other elements of pipeline safety regulation\u2014usually in response to major pipeline accidents. The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 ( P.L. 112-90 ) and the PIPES Act of 2016 ( P.L. 114-183 ) together included 61 such mandates. As of March 5, 2019, according to PHMSA, the agency had completed 34 of 42 mandates under P.L. 112-90 and 16 of 19 mandates under P.L. 114-183 . Some Members of Congress are concerned that major mandates remain unfulfilled years beyond the deadlines specified in statute. They have expressed frustration with PHMSA's failure to fulfill its statutory obligations, arguing that it delays important new regulations, undermines public confidence in pipeline safety, and does not allow Congress to evaluate the effectiveness of prior mandates as it considers PHMSA's next reauthorization. Among the overdue mandates, Congress has focused on several key regulations (rules) with potentially significant impacts on pipeline operations nationwide. "], "subsections": [{"section_title": "Safety of Gas Transmission Pipelines Rule", "paragraphs": ["This rulemaking would require operators to (1) reconfirm pipeline maximum allowable operating pressure and (2) test the material strength of previously untested gas transmission pipelines in high-consequence areas ( P.L. 112-90 \u00a723(c-d)). The statutory deadline for PHMSA to finalize these two rules was July 3, 2013. The rulemaking also would address the expansion of \"integrity management\" programs for gas transmission pipelines beyond high-consequence areas ( P.L. 112-90 \u00a75(f)). Integrity management provides for continual evaluation of pipeline condition; assessment of risks; inspection or testing; data analysis; and follow-up repair; as well as preventive or mitigative actions. The deadline for PHMSA to finalize the integrity management provisions was January 3, 2015. The rulemaking also would address the application of existing regulations to currently unregulated gathering lines ( P.L. 112-90 \u00a721(c)). ", "PHMSA issued a Notice of Proposed R ule making incorporating the above provisions, and other requirements, on June 7, 2016. However, PHMSA subsequently decided to split its efforts into three separate rulemakings to facilitate completion. PHMSA anticipates publication of a final rule for the maximum allowable operating pressure and material testing provisions in July 2019. PHMSA anticipates publication of separate final rules for the integrity management provisions and for the gathering line provisions in December 2019. "], "subsections": []}, {"section_title": "Safety of Hazardous Liquids Pipelines Rule", "paragraphs": ["Among other requirements, this rulemaking would require leak detection systems, where practicable, for hazardous liquids (i.e., oil and refined fuel) pipelines and would set standards for leak detection capability ( P.L. 112-90 \u00a78(b)). It also would address the expansion of integrity management for liquids pipelines beyond high-consequence areas ( P.L. 112-90 \u00a75(f)). The deadlines for PHMSA to finalize these rules were, respectively, January 3, 2014, and January 3, 2015. The rulemaking also would require additional integrity assessment measures for certain underwater onshore liquids pipelines ( P.L. 114-183 \u00a725). PHMSA issued a prepublication final rule on January 13, 2017, but withdrew it on January 24, 2017, for further review in compliance with the \"Memorandum for the Heads of Executive Departments and Agencies\" issued by the White House. PHMSA anticipates publication of a final rule in May 2019 ."], "subsections": []}, {"section_title": "Amendments to Parts 192 and 195", "paragraphs": ["This rulemaking, which refers to Title 49 of the Code of Federal Regulations, involves requirements for pipeline valve installation and minimum rupture detection standards. These measures are intended to enhance the ability of pipeline operators to quickly stop the flow of a commodity (e.g., oil) in case of an unintended release by installing automatic or remote-controlled valves ( P.L. 112-90 \u00a74). The rulemaking also would outline performance standards for pipeline rupture detection ( P.L. 112-90 \u00a78(b)). The deadline for PHMSA to finalize these rules was January 3, 2014. PHMSA anticipates issuing a proposed rule in August 2019."], "subsections": []}, {"section_title": "Underground Natural Gas Storage Facilities", "paragraphs": ["This rulemaking would set minimum federal safety standards for underground natural gas storage facilities ( P.L. 114-183 \u00a712). The deadline for PHMSA to finalize this rule was June 22, 2018. PHMSA issued an interim final rule on December 19, 2016. However, the agency temporarily suspended certain enforcement actions on June 20, 2017, and re opened the rule to public comment until November 20, 2017. DOT anticipates publishing the final rule in August 2019 ."], "subsections": []}, {"section_title": "Emergency Order Authority", "paragraphs": ["This rulemaking would implement PHMSA's new authority to issue emergency orders, which would apply to all operators and/or pipeline systems to abate an imminent hazard ( P.L. 114-183 \u00a716). The deadline for PHMSA to finalize this rule was March 22, 2017. The agency issued an interim final rule on October 14, 2016. PHMSA anticipates publication of a final rule in March 2019. "], "subsections": []}, {"section_title": "PHMSA Rulemaking Oversight and Agency Response", "paragraphs": ["In response to questions during a 2015 hearing about overdue statutory mandates, a PHMSA official testified that rulemaking delays at that time did not reflect a lack of commitment but rather their complexity, the agency's rulemaking process, and limited staff resources. A 2016 audit report by the DOT Inspector General concluded that PHMSA lacked \"sufficient processes, guidance, and oversight for implementing mandates\" in a timely manner. On June 21, 2018, the current PHMSA administrator testified that the agency had adequate staffing and funding for its rulemaking activities and was working to streamline the agency's rulemaking process to accelerate finalization of the overdue rules. He stated that PHMSA would prioritize rulemaking in three areas: the safety of hazardous liquid pipelines, the safety of gas transmission and gathering pipelines, and pipeline rupture detection and automatic shutoff valves."], "subsections": []}]}, {"section_title": "Staffing Resources for Pipeline Safety", "paragraphs": ["The U.S. pipeline safety program employs a combination of federal and state staff to implement and enforce federal pipeline safety regulations. To date, PHMSA has relied heavily on state agencies for pipeline inspections, with over 70% of inspectors being state employees. As the PHMSA administrator remarked in 2018, ", "PHMSA faces a manpower issue. It is obvious that an agency that employs about 536 people cannot oversee 2.7 million miles of pipeline all by itself. In fact, PHMSA makes no attempt to do so. Most actual safety inspections are performed by our state partners.", "Nonetheless, some in Congress have criticized inspector staffing at PHMSA for being insufficient to cover pipelines under the agency's jurisdiction. In considering PHMSA staff levels, issues of interest have been the number of federal inspectors and the agency's historical use of staff funding."], "subsections": [{"section_title": "PHMSA Inspection and Enforcement Staff", "paragraphs": ["In FY2019, PHMSA is funded for 308 full-time equivalent (FTE) employees in pipeline safety. As noted earlier, PHMSA employed 290 full-time equivalent staff in pipeline safety, including 145 inspectors, as of March 8, 2019. According to PHMSA officials, the agency continues hiring and anticipates employing additional staff in the second half of the fiscal year. While t he President's request ed budget authority for PHMSA's pipeline safety program in FY2020 is less than the FY2019 budget authority , it projects only a small reduction in funded staff . The budget includes an estimate of 306 FTEs for FY2020 , two fewer FTEs than the prior year . According to PHMSA, these two positions , which support pipeline safety data anal ysis and information technology, are to be transferred to DOT's Office of the Chief Information Officer as part of a centralization of all systems and technology within that office.", "If PHMSA's pipeline safety staffing were to be funded at the level of the President's FY2020 budget request, it would maintain the significant increase in PHMSA staff funding (mostly for inspectors) appropriated since FY2014 ( Figure 4 ). However, to the extent it reduces funding for grants available to the states, it potentially could reduce the number of staff in state pipeline safety agencies. It would also be a step back, in terms of funding, from the long-term expansion of PHMSA's pipeline safety program begun over 20 years ago in response to a series of pipeline accidents, the terrorist attacks of 9/11, implementation of PHMSA's integrity management regulations, and the boom in U.S. shale gas and oil production.", "PHMSA officials have offered a number of reasons for the persistent shortfall in inspector staffing. These reasons include a scarcity of qualified inspector job applicants, delays in the federal hiring process during which applicants accept other job offers, and PHMSA inspector turnover\u2014especially to pipeline companies, which often hire away PHMSA inspectors for their corporate safety programs. Because PHMSA pipeline inspectors are extensively trained by the agency (typically for two years before being allowed to operate independently), they are highly valued by pipeline operators seeking to comply with federal safety regulations. The agency has stated that it is challenged by industry recruitment of the same candidates it is recruiting, especially with the rapid development of unconventional oil and gas shales, for which the skill sets PHMSA seeks (primarily engineers) have been in high demand. A 2017 DOT Inspector General (IG) report supported PHMSA's assertions about industry-specific hiring challenges and confirmed \"a significant gap between private industry and Federal salaries for the types of engineers PHMSA hires.\"", "To overcome its pipeline inspector hiring challenges, PHMSA has implemented a \"robust recruitment and outreach strategy\" that includes certain noncompetitive hiring authorities (e.g., Veterans Employment Opportunities Act) and a fellows program. The agency also has offered recruitment, relocation and retention incentives, and a student loan repayment program. In addition to posting vacancy announcements on USAJOBS, PHMSA has posted job announcements using social media (Twitter and LinkedIn), has conducted outreach to professional organizations and veterans groups, and has attended career fairs and on-campus hiring events. PHMSA states that it has been \"working hard to hire and retain inspector staff\" but continues to experience staff losses due to an aging workforce and continued difficulty hiring and retaining engineers and technical staff because of competition from the oil and natural gas industry.", "Although PHMSA has taken concrete actions in recent years to shore up its workforce, there may still be room for improvement. Notably, the IG report concluded in 2017 that PHMSA did \"not have a current workforce management plan or fully use retention tools,\" although the agency had improved how it integrates new employees in the agency. According to the IG, PHMSA concurred with the report's workforce management recommendations and proposed appropriate action plans. On a related issue, a 2018 study by the Government Accountability Office (GAO) reports that \"PHMSA has not planned for future workforce needs for interstate pipeline inspections,\" and, in particular, has not assessed the resources and benefits available from its state partners. The GAO concluded that without this type of forward-looking analysis, \"PHMSA cannot proactively plan for future inspection needs to ensure that federal and state resources are in place to provide effective oversight of interstate pipelines.\" According to GAO, PHMSA has concurred with its recommendation to develop a workforce plan for interstate pipeline inspections. What impact PHMSA's subsequent actions may have on its staff recruitment, retention, and deployment is an open question."], "subsections": []}, {"section_title": "Direct-Hire Authority", "paragraphs": ["One specific remedy PHMSA has pursued in its efforts to recruit pipeline inspectors is to seek direct-hire authority (DHA) from the Office of Personnel Management (OPM). This authority can expedite hiring, for example, by eliminating competitive rating and ranking, or not requiring veterans' preference. OPM can grant DHA to federal agencies in cases of critical hiring need or a severe shortage of candidates.", "In its 2013 appropriations report, the House Appropriations Committee stated ", "The Committee is aware of several challenges PHMSA faces in hiring pipeline safety inspectors. One such challenge is the delay caused by the federal hiring process, which is compounded by other market dynamics. The Committee encourages the Office of Personnel Management to give strong consideration to PHMSA's request for direct-hire authority for its pipeline safety inspection and enforcement personnel. Such authority may enable PHMSA to increase its personnel to authorized levels and thereby demonstrate the need for additional resources.", "The same language appears in the committee's 2014 appropriations report. Consistent with the committee's recommendations, PHMSA applied to the OPM for direct-hire authority in April 2015 but was denied. According to PHMSA, the OPM informed agency officials of the denial verbally, but did not provide a formal, written explanation for the denial at the time.", "In 2016, the PHMSA administrator reiterated the agency's desire for DHA, stating that it \"would complement our recruitment efforts by reducing the agency's time to hire from more than 100 days to less than 30 days.\" P.L. 114-183 did not grant PHMSA direct-hire authority, but did allow the agency to apply to the OPM for it upon identification of a period of macroeconomic and pipeline industry conditions creating difficulty in filling pipeline safety job vacancies (\u00a79b). However, the aforementioned IG report concluded that direct hire authority might not provide PHMSA with the needed tools to recruit staff more effectively. According to the IG, while this authority might speed hiring of new employees, \"it is not clear how it alone would resolve long-standing staffing challenges such as competing with a well-paying industry over a limited talent pool.\""], "subsections": []}]}, {"section_title": "State Pipeline Safety Program Oversight", "paragraphs": ["In the wake of several major safety incidents involving facilities under the jurisdiction of state pipeline safety regulators, some state programs have come under scrutiny regarding their overall effectiveness. After the San Bruno pipeline incident, the California state pipeline safety program\u2014which had regulatory responsibility for the pipeline that ruptured\u2014was criticized by the NTSB for its failure to detect the pipeline's problems. The NTSB was also critical of PHMSA's oversight of the state because the agency had not \"incorporated the use of effective and meaningful metrics as part of its guidance for performance-based management\" of state pipeline safety programs. A 2014 investigation by the DOT Office of Inspector General assessed the effectiveness of PHMSA's state program oversight as recommended by the NTSB. The IG report stated", "PHMSA's oversight of State pipeline safety programs is not sufficient to ensure States comply with program evaluation requirements and properly use suspension grant funds. Lapses in oversight have resulted in undisclosed safety weaknesses in State programs.", "The IG report recommended that PHMSA \"take actions to further refine its policies and procedures for managing the program, including its guidelines to the States and improve its oversight to ensure States fulfill their role in pipeline safety.\" The report made seven specific programmatic recommendations to achieve these goals. In its response to a draft version of the IG report, PHMSA officials concurred or partially concurred with all of the IG reports' recommendations, describing actions it had taken to address the IG's concerns. The IG report therefore considered all but two of its recommendations resolved, but urged PHMSA to reconsider and clarify its response to the remaining two recommendations. These recommendations pertained to PHMSA's staffing formula and its annual evaluations of inspection procedures among the states.", "The Aliso Canyon and Merrimack Valley incidents again focused attention on the oversight and effectiveness of state pipeline safety programs. For example, during the Aliso Canyon incident, PHMSA expressed concern to state regulators about aspects of the state's safety oversight, including its review of historical well records showing facility anomalies and requirements for safety contingency plans to protect workers, the public, and property. A subsequent federal interagency task force concluded that \"the practices for monitoring and assessing leaks and leak potential at the Aliso Canyon facility were inadequate to maintain safe operations.\" In the Merrimack Valley case, state legislators reportedly criticized Massachusetts' pipeline safety regulators for insufficient staffing and inadequate oversight of pipeline facilities. However, PHMSA's annual evaluation of the state's pipeline safety program\u2014conducted the month before the natural gas releases\u2014gave the state program a rating of 97.4 out of 100 maximum points. PHMSA's evaluation did note a shortfall in inspector staffing, which could impact the agency's inspection schedule, and that the state agency was working to hire additional inspectors. In light of these incidents, and the IG's prior recommendations, Congress may reexamine the adequacy of PHMSA's oversight of its state pipeline safety partners."], "subsections": []}, {"section_title": "Aging Pipeline Infrastructure", "paragraphs": ["The NTSB listed the safe shipment of hazardous materials by pipeline among its 2019-2020 Most Wanted List of Transportation Safety Improvements , stating \"as infrastructure ages, the risk to the public from pipeline ruptures also grows.\" Likewise, Congress has ongoing concern about the safety of older transmission pipelines\u2014a key factor in San Bruno\u2014and in the replacement of leaky and deteriorating cast iron pipe in natural gas distribution systems\u2014a key factor in Merrimack Valley. The construction work in Merrimack Valley, which led to the natural gas release, was part of a cast iron pipe replacement project. (Age was also a factor in the failure of the well casing which led to the uncontrolled natural gas release at the Aliso Canyon facility.) According to the American Gas Association and other stakeholders, antiquated cast iron pipes in natural gas distribution systems, many over 50 years old, \"have long been recognized as warranting attention in terms of management, replacement and/or reconditioning.\" Old distribution pipes have also been identified as a significant source of methane leakage, which poses safety risks and contributes to U.S. greenhouse gas emissions. In April 2015, then-Secretary of Energy Ernest Moniz reportedly stated that safety and environmental risks from old, leaky distribution lines were \"a big issue.\" ", "Natural gas distribution system operators all have ongoing programs for the replacement of antiquated pipes in their systems, although some are constrained by state regulators who face challenges considering significant rate increases to pay for these upgrades. According to the Department of Energy, the total cost of replacing cast iron and bare steel distribution pipes is approximately $270 billion. Practical barriers, such as urban excavation and disruption of gas supplies, also limit annual replacement. Although the federal role in natural gas distribution systems is limited, because they are under state jurisdiction, there have been prior proposals in Congress and in the QER to provide federal support for the management and replacement of old cast iron pipe.", "The Pipeline Safety Act mandated a survey (with follow-up every two years thereafter) of pipeline operator progress in adopting and implementing plans for the management and replacement of cast iron pipes (\u00a77(a)). The Merrimack Valley incident may refocus attention on PHMSA's regulation of pipe replacement (currently voluntary), pipeline modernization projects and work packages, older pipeline records, safety management systems, and other issues related to aging pipelines. Congress also may examine the industry's overall progress in addressing the safety of antiquated distribution lines and opportunities for federal support of those efforts."], "subsections": []}, {"section_title": "PHMSA and Pipeline Security", "paragraphs": ["Ongoing physical and cyber threats against the nation's pipelines since passage of the PIPES Act have heightened concerns about the security risks to these pipelines. In a December 2018 study , GAO stated that since the terrorist attacks of September 11, 2001, \"new threats to the nation's pipeline systems have evolved to include sabotage by environmental activists and cyber attack or intrusion by nations.\" Recent oversight of federal pipeline security activities has included discussion of PHMSA's role in pipeline security.", "While PHMSA reports cooperation with TSA in pipeline security under the terms of the pipeline security annex and subsequent collaboration, questions remain regarding exactly what this cooperation entails and the ongoing roles of the two agencies. Congress has considered in the past whether the TSA-PHMSA pipeline security annex optimally aligns staff resources and capabilities across both agencies to fulfill the nation's overall pipeline safety and security missions. More recently, some in the pipeline industry have questioned PHMSA's focus on, and ongoing commitment to, pipeline security issues, especially in cybersecurity. ", "In the 116 th Congress, the Pipeline and LNG Facility Cybersecurity Preparedness Act ( H.R. 370 , S. 300 ) would require the Secretary of Energy to enhance coordination among \"appropriate Federal agencies,\" state government agencies, and the energy sector in pipeline security; coordinate incident response and recovery; support the development of pipeline cybersecurity applications, technologies, demonstration projects, and training curricula; and provide technical tools for pipeline security. What role PHMSA might play in any future pipeline security initiatives, and what resources it might require to perform that role, may be a consideration for Congress."], "subsections": []}]}, {"section_title": "Conclusion", "paragraphs": ["Both government and industry have taken numerous steps to improve pipeline safety over the last 10 years. In 2016, the Association of Oil Pipe Lines stated that \"the oil and natural gas industry is committed to achieving zero incidents throughout our operations.\" Likewise, the American Gas Association, which represents investor-owned natural gas distribution companies, recently stated that \"safety is the core value for America's natural gas utilities.\" Nonetheless, major oil and natural gas pipeline accidents continue to occur. Both Congress and the NTSB have called for additional regulatory measures to reduce the likelihood of future pipeline accidents.", "Past PHMSA reauthorizations included expansive pipeline safety mandates, such as requirements for the agency to impose integrity management programs, significantly increase inspector staffing, or regulate underground natural storage. In light of the most recent pipeline accidents or security incidents, Congress may consider new regulatory mandates on PHMSA or may impose new requirements directly on the pipeline industry. However, a number of broad pipeline safety rulemakings and many NTSB recommendations remain outstanding, and others have not been in place for long, so their effectiveness in improving pipeline safety have yet to be determined. As Congress continues its oversight of the federal pipeline safety program, an important focus may be the practical effects of the many changes being made to particular aspects of PHMSA's pipeline safety regulations.", "In addition to the specific issues highlighted in this report, Congress may assess how the various elements of U.S. pipeline safety activity fit together in the nation's overall strategy to protect the public and the environment. Pipeline safety necessarily involves various groups: federal and state agencies, pipeline associations, large and small pipeline operators, and local communities. Reviewing how these groups work together to achieve common goals could be an overarching concern for Congress."], "subsections": []}]}}
{"id": "RS21363", "title": "Legislative Procedure and Process Resources for Congressional Staff", "released_date": "2019-01-10T00:00:00", "summary": ["Written for congressional staff, this report identifies and provides details on how to obtain information on legislative procedures and process in the House and Senate. It provides references to selected CRS products and offers information on the CRS legislative institutes. A listing of selected supplementary materials is also provided.", "This report will be updated as new information is available."], "reports": {"section_title": "", "paragraphs": ["A basic understanding of legislative procedure and processes is essential for congressional staff. Gaining familiarity with the key publications and websites listed in this report will assist congressional staff in obtaining this understanding, as well as providing a bibliography of sources to which staff ma y refer as questions arise in their work"], "subsections": [{"section_title": "House and Senate Sources", "paragraphs": ["Congressional staff can find official overviews and explanatory information on the House's \"Legislative Process\" website at http://clerk.house.gov/legislative/legprocess.aspx and on the Senate's \"Legislative Process\" website at http://www.senate.gov/pagelayout/legislative/d_three_sections_with_teasers/process.htm .", "Reference sources on the rules and procedure of the House and Senate are listed below."], "subsections": []}, {"section_title": "House Rules and Procedure", "paragraphs": ["Constitution, Jefferson's Manual, and Rules of the House of Representatives . Washington: GPO, 2017.", "https://www.govinfo.gov/app/collection/hman ", "This publication, often referred to as House Rules and Manual , is prepared for each Congress by the House Parliamentarian and is issued as a House document, most recently for the 115 th Congress as H.Doc. 114-192. It includes the text of the Constitution; the rules of the House and currently relevant portions of Jefferson's Manual of Parliamentary Practice ; a portion of the Congressional Budget Act; and other statutory provisions that operate as procedural rules. Copies are distributed to House offices and are also available from the House Legislative Resource Center.", "House Practice: A Guide to the Rules, Precedents, and Procedures of the House . Washington: GPO, 2017.", "https://www.govinfo.gov/content/pkg/GPO-HPRACTICE-115/pdf/GPO-HPRACTICE-115.pdf", "This one-volume publication prepared by William Holmes Brown and updated by Charles W. Johnson, John V. Sullivan, and Thomas J. Wickham, Jr., all former House Parliamentarians, provides more current summary information on House rules and selected precedents than Procedure in the U.S. House of Representatives (see next entry). Organized alphabetically by topic, it reflects changes in the House rules and procedure adopted as of the 115 th Congress. This publication is sometimes referred to as Brown's. The Office of the House Parliamentarian has a limited number of copies to distribute to House offices upon request.", "Procedure in the U.S. House of Representatives, 97 th Congress: A Summary of the Modern Precedents and Practices of the House, 86 th Congress-97 th Congress . Washington: GPO, 1982.", "Frequently referred to as Deschler's Procedure , after a former Parliamentarian of the House, this one-volume work summarizes House procedure and provides a cumulated, condensed version of House precedents from 1959 to 1980. A 1986 supplement, Procedure in the United States House of Representatives: Annotations of the Precedents of the House for the 97 th , 98 th , and 99 th Congresses , covers 1981 through 1986. Both publications are out of print. These one-volume publications are not available on the Internet, but the full text of several related multivolume sets of House precedents\u2014 Deschler's Precedents of the U.S. House of Representatives , Cannon's Precedents , and Hinds' Precedents \u2014are all available in the \"Precedents of the U.S. House of Representatives\" section of the Government Publishing Office's (GPO's) website at https://www.govinfo.gov/collection/precedents-of-the-house?path=/GPO/Precedents%20of%20the%20U.S.%20House%20of%20Representatives ."], "subsections": []}, {"section_title": "Senate Rules and Procedure", "paragraphs": ["Senate Manual . Washington: GPO, 2014.", "https://www.govinfo.gov/app/collection/sman ", "This manual, prepared periodically by the Senate Committee on Rules and Administration, contains the standing rules, orders, laws, and resolutions affecting the Senate, as well as copies of historical U.S. documents and selected statistics on the Senate and other government entities. Issued as S.Doc. 1, copies are distributed to Senate offices and are available from the Senate document room. A current edition of just the Standing Rules of the Senate is available on the committee's website at https://www.rules.senate.gov/rules-of-the-senate .", "Riddick, Floyd M. and Alan S. Frumin. Riddick's Senate Procedure: Precedents and Practices . Washington: GPO, 1992.", "https://www.govinfo.gov/collection/riddicks-senate-procedure?path=/GPO/Riddick%2527s%20Senate%20Procedure ", "This publication was revised and updated in 1992 by Floyd M. Riddick, who was then the Parliamentarian of the Senate, and published as S.Doc. 101-28. Organized alphabetically by topic, it contains currently applicable rulings by the presiding officer and practices related to Senate procedure. An appendix has suggested forms for various procedures, for example, offering motions or filing conference reports. Some of the most frequently used chapters of Riddick's Senate Procedure are available in an expanded format in the \"Electronic Senate Precedents\" section of the Senate's WEBSTER intranet site at http://webster.senate.gov/precedents .", "Senate Cloture Rule . Washington: GPO, 2011.", "https://www.govinfo.gov/content/pkg/CPRT-112SPRT66046/pdf/CPRT-112SPRT66046.pdf", "This committee print (S.Prt. 112-31) was prepared for the Senate Committee on Rules and Administration by the Congressional Research Service (CRS). It includes lists of selected filibusters, tables of cloture votes, a legislative history of the cloture rule, and a bibliography. CRS has a limited number of copies available for distribution to offices upon request. Lists of cloture motions and votes from the 65 th Congress (1917-1918) forward are also available on the Senate website at http://www.senate.gov/pagelayout/reference/cloture_motions/clotureCounts.htm ."], "subsections": []}, {"section_title": "Primers on the Legislative Process and Related Documents", "paragraphs": ["Our American Government . Washington: GPO, 2003. (H.Doc. 108-94)", "https://www.govinfo.gov/content/pkg/CDOC-108hdoc94/pdf/CDOC-108hdoc94.pdf ", "This revised version of the popular introductory guide is written in a question-and-answer format that covers a broad range of topics dealing with the legislative, executive, and judicial branches of our government. The appendixes contain a glossary of legislative terms and a selective bibliography. Copies of each new edition are distributed to congressional offices. Members of Congress can also obtain printed copies of the current edition from the House Legislative Resource Center and the Senate Document Room.", "The Constitution of the United States of America As Amended: Unratified Amendments: Analytical Index . Washington: GPO, 2007. (H.Doc. 110-50)", "https://www.govinfo.gov/content/pkg/CDOC-110hdoc50/pdf/CDOC-110hdoc50.pdf ", "This document contains the text of the Constitution, its amendments, and a useful index to the Constitution and amendments.", "The Constitution of the United States of America: Analysis and Interpretation . Washington: GPO, 2017. (H.Doc. 112-9)", "https://www.govinfo.gov/collection/constitution-annotated?path=/GPO/Constitution%20of%20the%20United%20States%20of%20America%253A%20Analysis%20and%20Interpretation .", "Popularly known as the Constitution Annotated , this document contains legal analysis and interpretation of each section of the U.S. Constitution and is updated regularly by CRS. It is available to congressional staff on the CRS website at http://www.crs.gov/conan/constitutionannotated , and to the public through GPO (see link above). For the public version, the most recent edition is listed at the top of the webpage.", "Dove, Robert B. Enactment of a Law: Procedural Steps in the Legislative Process. Washington: GPO, 1982.", "https://www.congress.gov/resources/display/content/Enactment+of+a+Law+-+Learn+About+the+Legislative+Process ", "http://www.senate.gov/legislative/common/briefing/Enactment_law.htm", "Prepared by Robert B. Dove in 1982, who was then the Senate Parliamentarian, this primer on the legislative process traces procedures used in the Senate and the House of Representatives. No printed copies are available, but it was updated online in 1997. It is available on Congress.gov and on the Senate website.", "Sullivan, John V. How Our Laws Are Made . Washington: GPO, 2007. (H.Doc. 110-49)", "https://www.congress.gov/resources/display/content/How+Our+Laws+Are+Made+-+Learn+About+the+Legislative+Process", "https://www.govinfo.gov/content/pkg/CDOC-110hdoc49/pdf/CDOC-110hdoc49.pdf ", "This pamphlet outlines stages in the legislative process and explains the uses of various publications, which track that process. It is prepared by the Parliamentarian of the House in consultation with the Parliamentarian of the Senate. This guide is updated periodically. Copies of new editions are distributed to congressional offices and can also be obtained from the House Legislative Resource Center and the Senate Document Room."], "subsections": []}, {"section_title": "CRS Sources", "paragraphs": ["CRS has a variety of resources and services on legislative procedure available to Members of Congress and their staff."], "subsections": [{"section_title": "CRS Website", "paragraphs": ["The CRS website is available at http://www.crs.gov . Congressional staff may obtain useful CRS materials on the \"Legislative Reference Sources\" page at http://www.crs.gov/resources/Pages/LegReference-Committees.aspx and legislative procedure from the \"Congressional Process, Administration, & Elections\" page at http://www.crs.gov/iap/congressional-process-administration-and-elections . The latter page includes short fact sheets on House and Senate procedure as well as materials on the budget process and on congressional oversight."], "subsections": []}, {"section_title": "Selected CRS Reports", "paragraphs": ["CRS Report 98-812, Amendments Between the Houses: A Brief Overview , by Elizabeth Rybicki and James V. Saturno.", "CRS Report 98-728, Bills, Resolutions, Nominations, and Treaties: Characteristics, Requirements, and Uses , by Richard S. Beth.", "CRS Report 98-242, Committee Jurisdiction and Referral in the Senate , by Judy Schneider.", "CRS Report RS20147, Committee of the Whole: An Introduction , by Judy Schneider.", "CRS Report RS20794, The Committee System in the U.S. Congress , by Judy Schneider.", "CRS Report 98-736, Floor Consideration of Conference Reports in the House , by James V. Saturno.", "CRS Report RS20200, General Debate in Committee of the Whole , by Judy Schneider.", "CRS Report RL30945, House and Senate Rules of Procedure: A Comparison , by Judy Schneider.", "CRS Report 98-339, House Committee Hearings: Scheduling and Notification , by Christopher M. Davis.", "CRS Report 98-175, House Committee Jurisdiction and Referral: Rules and Practice , by Judy Schneider.", "CRS Report RS20308, House Committee Markups: Commonly Used Motions and Requests , by Judy Schneider.", "CRS Report 98-309, House Legislative Procedures: Published Sources of Information , by Megan S. Lynch. ", "CRS Report R44001, Introducing a House Bill or Resolution , by Mark J. Oleszek. ", "CRS Report R44195, Introducing a Senate Bill or Resolution , by Mark J. Oleszek.", "CRS Report 98-721, Introduction to the Federal Budget Process , coordinated by James V. Saturno.", "CRS Report R42843, Introduction to the Legislative Process in the U.S. Congress , by Valerie Heitshusen.", "CRS Report 98-425, Invoking Cloture in the Senate , by Christopher M. Davis.", "CRS Report 95-563, The Legislative Process on the House Floor: An Introduction , by Christopher M. Davis.", "CRS Report 96-548, The Legislative Process on the Senate Floor: An Introduction , by Valerie Heitshusen.", "CRS Report RL30787, Parliamentary Reference Sources: House of Representatives , by Richard S. Beth and Megan S. Lynch.", "CRS Report RL30788, Parliamentary Reference Sources: Senate , by Megan S. Lynch and Richard S. Beth.", "CRS Report 98-143, Procedural Distinctions Between the House and the Committee of the Whole , by Judy Schneider.", "CRS Report 98-337, Senate Committee Hearings: Scheduling and Notification , by Valerie Heitshusen. ", "CRS Report 98-308, Senate Legislative Procedures: Published Sources of Information , by Christopher M. Davis.", "CRS Report 98-612, Special Rules and Options for Regulating the Amending Process , by Megan S. Lynch.", "CRS Report RS22477, Sponsorship and Cosponsorship of House Bills , by Mark J. Oleszek. ", "CRS Report 98-279, Sponsorship and Cosponsorship of Senate Bills , by Mark J. Oleszek. "], "subsections": []}, {"section_title": "CRS Legislative Procedure Classes", "paragraphs": ["In addition to legislative procedure material, CRS offers several programs on legislative procedure for congressional staff. Legislative staff can attend Congress: An Introduction to Process and Resources , an introductory CRS program designed for and offered only to permanent, professional congressional staff who seek a foundation for understanding the legislative process and the resources available to monitor it. This CRS program is offered 10 or more times a year and is the prerequisite for the Advanced Legislative Process Institute . More information is available on the CRS website at http://www.crs.gov/Events/TrainingPrograms or by telephone at [phone number scrubbed].", "CRS also offers a monthly introductory class, Legislative Concept s , to House staff and interns. Information is available on HouseNet ( http://housenet.house.gov ) under \"Campus\", then under \"Congressional Staff Academy.\"", "Legislative staff members are also invited to attend the CRS Budget Process Institutes. The introductory Overview of the Federal Budget Process is offered several times each year and provides an introduction to federal budgeting procedures, particularly procedures used in Congress. The following six advanced institutes are offered during the year at times when they are most relevant to congressional staff:", "Budget Resolutions and Budget Enforcement Appropriations Process Consideration of Appropriations Bills in the House Consideration of Appropriation Bills in the Senate President and the Budget, and Continuing Resolutions", "Event dates and registration forms for CRS programs and institutes can be found on the CRS website at http://www.crs.gov/programs/Pages/eventscal.aspx ."], "subsections": []}]}, {"section_title": "Supplementary Materials", "paragraphs": ["Congress A to Z. 6 th ed. Washington: CQ Press, 2014.", "Congress.gov Legislative Glossary. Written by CRS analysts and available to the public at https://www.congress.gov/help/legislative-glossary . ", "Davidson, Roger H., Frances E. Lee, and Walter J. Oleszek. Congress and Its Members . 16 th ed. Washington: CQ Press, 2017.", "Congressional Quarterly's Guide to Congress. 7 th ed. Washington: CQ Press, 2012.", "Koempel, Michael L., and Judy Schneider. Congressional Deskbook: the Practical and Comprehensive Guide to Congress. Alexandria, VA: TheCapitol.Net, 2012.", "Kravitz, Walter. Congressional Quarterly's American Congressional Dictionary. 3 rd ed. Washington, CQ Press, 2001. Available to congressional offices in an updated and expanded edition on the CRS website at https://www.govinfo.gov/app/collection/sman .", "Oleszek, Walter J., Mark J. Oleszek, Elizabeth Rybicki, and Bill Heniff, Jr. Congressional Procedures and the Policy Process. 10 th ed. Washington: CQ Press, 2016.", "Tiefer, Charles. Congressional Practice and Procedure: A Reference, Research, and Legislative Guide . New York: Greenwood Publishing Group, 1989.", "United States Senate Glossary , at https://www.senate.gov/reference/glossary.htm .", "CRS Video WVB00003, An Act of Congress , by Walter J. Oleszek. A 58 minute video about the enactment of legislation, available at http://www.crs.gov/video/detail/WVB00003 . ", "The Legislative Process video series on Congress.gov. Nine brief video clips explaining the legislative process, written by CRS analysts and available to the public at https://www.congress.gov/legislative-process . "], "subsections": []}, {"section_title": "Where to Obtain Print Publications", "paragraphs": ["Some of the works on legislative procedure listed in this report are produced by GPO and may be obtained through its Congressional Liaison Office at http://www.gpo.gov/congressional/ .", "Other publications are only available from congressional sources, such as the House and Senate Parliamentarians, for congressional office use, and those listed in the \" Supplementary Materials \" section may be purchased from bookstores or publishers."], "subsections": []}]}}
{"id": "R45687", "title": "South Africa: Current Issues, Economy, and U.S. Relations", "released_date": "2019-04-12T00:00:00", "summary": ["South Africa is a majority black, multiracial country of nearly 58 million people. It has cordial relations with the United States, notwithstanding some occasional strains, and is the largest U.S. trade partner in Africa. South African President Cyril Ramaphosa is spearheading efforts to address years of weak economic growth and multiple corruption scandals under his predecessor, Jacob Zuma. These issues helped spur Zuma's resignation in early 2018\u2014prior to a likely vote of no confidence by parliament\u2014and led to the election of Ramaphosa, who was selected to lead the African National Congress (ANC) party in late 2017. If the ANC wins a majority in forthcoming elections in May 2019, as polls suggest is probable, he will likely remain president.", "Corruption linked to Zuma and a network of business and political associates was reportedly so systematic that it was dubbed \"state capture.\" Multiple efforts to address this problem are underway, including a high-profile commission of judicial inquiry. Zuma is also being tried on charges linked to a 1990s-era arms procurement scandal. Broader challenges include high levels of poverty, social inequality, and unemployment, and unequal access to public services. Such problems disproportionately affect the generally poor black majority, the main victims of apartheid\u2014a codified system of racial bias that ended in 1994, when the first universal suffrage elections were held. Unequal access to land is a particularly sensitive issue. State land redistribution efforts have sought to ensure greater access to land by blacks and other historically disadvantaged groups, but progress has been slow. In 2018, pressure to speed this process prompted the government to launch an ongoing effort to amend the constitution to permit uncompensated land expropriation. South Africa also struggles with violent crime, labor unrest, and protests over public service delivery and corruption.", "South Africa has the most diversified and industrialized economy in Africa, but has suffered years of anemic growth attributable to a range of international and domestic factors. The Ramaphosa administration has made economic growth a priority, and is pursuing a range of efforts to reduce unemployment, poverty, and socioeconomic inequality; improve education and healthcare; and unite a socioeconomically, geographically, and racially divided society. It is also seeking to attract $100 billion in new investment over five years and has elicited at least $55 billion to date.", "Congress played a leading international role in efforts to end apartheid, although some South African decisionmakers appear to harbor abiding resentments toward the United States as a result of the Reagan Administration's approach to achieving this goal and its posture toward the ANC. Contemporary U.S.-South African ties are cordial, based on shared democratic values and often-concordant views on regional development goals. The two countries maintain a bilateral strategic dialogue, and the United States provides substantial aid to South Africa, primarily to combat the country's HIV/AIDS epidemic. U.S.-South African views regularly diverge, however, on international policy matters (e.g., Palestinian statehood, and responses to Iran and Venezuela). There have also been periodic trade frictions; in 2015-2016 the two countries had a poultry and meat trade dispute and in 2018 the Trump Administration imposed tariffs on U.S. imports of steel and aluminum, including from South Africa. South Africa was later exempted from many of these tariffs, but prospective U.S. tariffs on autos and auto parts could spur renewed strains. The Trump Administration has not otherwise pursued any major changes in the bilateral relationship. An August 2018 tweet by President Trump alleging that South Africa's government was seizing white-owned farmland and that large numbers of farmers were being killed, however, drew criticism from the South African government.", "U.S.-South African relations arguably have the potential to deepen, although such an outcome might require dedicated efforts by the two sides. If President Ramaphosa demonstrates concrete progress in reasserting the rule of law and turning around the ailing economy, following substantial deterioration in these areas under former President Zuma, the country may become more attractive as a U.S. partner. Greater cooperation and collaboration can be envisioned regarding bilateral trade and investment, responses to political-military and development challenges in Africa, educational and cultural exchange, and technical cooperation in multiple areas. In recent years, South Africa-related congressional activity has mainly focused on U.S. healthcare assistance, trade issues, and consultations during periodic congressional travel to the country. Given South Africa's economic and political influence with in Africa and on African and developing country positions in multilateral contexts\u2014which do not always dovetail with those of the United States\u2014some Members of Congress may see a need to expand the scope and broaden the focus of congressional and other U.S. engagement with South Africa."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["South Africa is a majority black, multiracial country of nearly 58 million people. South African President Cyril Ramaphosa was elected by the parliament in February 2018 after his predecessor, Jacob Zuma, resigned. Zuma did so under the threat of a parliamentary no confidence vote after defying a decision by leaders of his African National Congress (ANC) removing him as its national presidential nominee. The ANC, the majority party in parliament, replaced Zuma with then-Vice President Ramaphosa, whom the ANC elected as its leader in late 2017. Zuma had faced intense pressure to step down after years of weak economic growth and multiple corruption scandals under his tenure. Ramaphosa is leading a reform agenda to address these challenges. He is serving out the rest of Zuma's term, which ends in May 2019, and is eligible to run for two additional five-year terms of his own. Local and international expectations of him are high, but he faces diverse fiscal, structural, and political challenges."], "subsections": []}, {"section_title": "U.S. Relations", "paragraphs": ["U.S.-South Africa ties are cordial, based in part on shared democratic values and broad bilateral accord on regional development goals, and the State Department describes South Africa as a strategic U.S partner. U.S. high-level bilateral engagement with South Africa is not, however, as frequent or as multifaceted as that with some other U.S. strategic country partners. South Africa has also not been the focus of substantial congressional legislative attention in recent years. In general, as set out below, South Africa-related congressional activity has mainly focused on U.S. healthcare assistance, trade issues, and consultations during periodic congressional travel to the country. Given South Africa's economic and political influence in Africa and on African and developing country positions in multilateral contexts\u2014which often do not align with those of the United States\u2014some Members of Congress may see a scope for increased congressional and other U.S. engagement with South Africa.", "There is a large U.S. diplomatic presence in South Africa, which has periodically hosted high-level U.S. leadership visits, including two presidential visits by former President Barack Obama. South Africa has been a top African recipient of U.S. assistance for years. For over a decade, such assistance has centered primarily on healthcare, notably HIV/AIDS-related programs implemented under the U.S. President's Emergency Plan for AIDS Relief (PEPFAR), announced by President George W. Bush in 2003. The United States has also supported South African-implemented development and crisis response activities in other African countries. In 2010, the Obama Administration and the South African government initiated a U.S.-South African Strategic Partnership. While it remains in effect, a biennial dialogue that accompanied the partnership was last held in 2015. The partnership has focused on cooperation in such areas as health, education, food security, law enforcement, trade, investment, and energy, all long-standing U.S. priorities.", "Since 2014, South Africa has been the largest U.S. trade partner in Africa. South Africa is also a key regional export and investment destination for U.S. firms. South Africa has long enjoyed a significant trade surplus in goods with the United States, but there is a substantial U.S. surplus in trade in services. In general, while U.S.-South African economic ties are positive, trade has been a source of occasional friction. Differences over foreign policy issues also periodically roil ties. South African officials are critical of Israel's policies toward the Palestinians, for instance, and South Africa maintains cordial relations with Iran, a key U.S. adversary. There have also been divergences on other issues, as illustrated by a lack of congruence between South African and U.S. votes in the United Nations, and regarding responses to the crisis in Venezuela. South Africa also opposed the Trump Administration's decision to withdraw the United States from the U.N. Framework Convention on Climate Change, a shift from the general bilateral policy congruence that prevailed on this issue during the Obama Administration. ", "South African officials have periodically made remarks suggesting anti-U.S. biases. Anti-U.S. rhetoric, when it occurs, may be influenced by historic grievances over U.S. policy toward the ANC during the era of apartheid\u2014a codified, state-enforced system of racial segregation and socioeconomic and legal discrimination favoring the white minority that was operational until the early 1990s. During the anti-apartheid struggle, the Reagan Administration categorized the ANC as a terrorist organization and President Reagan vetoed the Comprehensive Anti-Apartheid Act of 1986 ( P.L. 99-440 ). The Reagan Administration had sought to promote change within the apartheid regime\u2014with which it shared anti-communist goals\u2014by engaging it in a dialogue-based approach dubbed \"constructive engagement.\"", "The Trump Administration has not pursued any major changes in bilateral ties, but in late 2018, President Trump acted to fill the post of U.S. ambassador to South Africa, vacant since late 2016, by nominating South African-born luxury handbag designer Lana Marks to the position. The Senate did not act on her nomination by the end of the 115 th Congress; she was renominated in early 2019. In early 2017, President Trump spoke to President Zuma by telephone on \"ways to expand\" trade and advance bilateral cooperation in other areas, including counter-terrorism and, according to the South African government, multilateral and African peace and stability issues. ", "No notable new engagement has since occurred, but in August 2018, President Trump sparked controversy in South Africa and among some U.S. observers after posting a tweet on land reform. It stated that the South African Government was \"seizing land from white farmers\" and referred to \"farm seizures and expropriations and the large scale killing of farmers.\" His comments drew criticism and were questioned on factual and other grounds by U.S. and South African commentators and by the South African government. While the South African government is pursuing efforts to change the constitution to allow for the uncompensated expropriation of land, such expropriation was not underway in 2018. ", "Congress has long played an active role in U.S.-South African relations. This was particularly true during the struggle against apartheid, from the late 1960s until the first universal franchise vote in 1994. Starting in the 1960s, Congress sought to induce democratic change by repeatedly imposing conditions and restrictions on U.S. relations with the apartheid regime. These actions culminated in Congress's passage of the sanctions-focused Comprehensive Anti-Apartheid Act of 1986 ( P.L. 99-440 )\u2014an action that overrode President Reagan's veto. Congressional attention toward South Africa remained strong during its continuing transition over the following decade. In recent years, congressional engagement with South Africa has mainly focused on oversight of foreign aid program\u2014particularly South Africa's relative progress in building its capacity to address its HIV/AIDS crisis and gradually assuming greater responsibility for HIV program financing and implementation, key goals under PEPFAR.", "Efforts to bolster trade and investment ties with South Africa, as with Africa generally, have also drawn attention in recent congresses. In 2015 and 2016, congressional action, including Congress's mandating of a special review of South Africa's eligibility for U.S. trade benefits, helped to resolve a poultry and meat-related trade dispute. Several Members also sought to reverse the Trump Administration's 2018 application of steel and aluminum tariffs to South Africa, which had raised concerns in the country. No South Africa-centered bills have been introduced in the 116 th Congress, and none were introduced in the 115 th Congress, apart from three commemorative resolutions. Members periodically travel to South Africa to foster such aims as improved bilateral and U.S.-Africa ties and enhanced trade and investment relations."], "subsections": [{"section_title": "U.S. Assistance11", "paragraphs": ["According to the State Department's FY2019 foreign aid budget request,", "South Africa is a key player for U.S. engagement in Africa and a critical partner to boost U.S. trade and economic growth, improve regional security, and mitigate public health crises. South Africa is the economic and security anchor of the region but grapples with political and socioeconomic challenges, including high-level corruption and poor accountability, a slowing economy, high youth unemployment, critical levels of violent crime, a weak education system, a high rate of HIV/AIDS, water scarcity, and wildlife trafficking. South Africa continues to work with the United States to address the region's social and economic challenges [\u2026].", "The Trump Administration requested $172.1 million for South Africa for FY2020, a 70.7% decrease relative to the actual FY2018 total of $586.6 million, and a 66.3% decrease relative to the FY2019 requested level of $510.5 million. Aid trends are shown in Figure 1 and Table 1 .", "Since 1994, South Africa has been a top African recipient of U.S. State Department and U.S. Agency for International Development (USAID) aid, the vast majority devoted to PEPFAR and other health programs, including responses to the tuberculosis epidemic and efforts to end child and maternal deaths. After the enactment of the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 ( P.L. 108-25 )\u2014which authorized PEPFAR programs and funding\u2014aid rose to nearly $580 million in FY2010. Aid levels then declined to a low of $286 million in FY2014 before rising again, to a peak of nearly $587 million in FY2018. Cumulative FY2004 through FY2018 PEPFAR funding in South Africa totaled $6.26 billion. The Trump Administration proposed to use the bulk of $500 million in requested Global Health Program PEPFAR funds in FY2019 to maintain current levels of HIV/AIDS antiretroviral drug treatment access through support for direct service delivery and treatment services. ", "The State Department has proposed to cut PEPFAR funding by 67.6% in FY2020, to $161.8 million, after issuing sharp criticism of the PEPFAR in South Africa in its FY2019 PEPFAR Country Operational Plan \"Planning Level Letter.\" While praising a number of successes under the U.S. PEPFAR partnership with the South African government and commending efforts to improve the program, the letter, by U.S. Global AIDS Coordinator and U.S. Special Representative for Global Health Diplomacy Deborah L. Birx, took note of \"several fundamental problems in PEPFAR's core treatment program in South Africa.\" The letter stated", "Despite a significant infusion of resources by the U.S. government especially over the last three years, progress has been grossly sub-optimal and insufficient to reach epidemic control, including the targets of the Surge Plan [an effort to accelerate HIV testing, treatment, and retention]. The PEPFAR program has demonstrated extremely poor performance in ensuring every person who is started on treatment is retained, particularly from FY 2017 to FY 2018 where results have been relatively stagnant at 479,912 to 481,014 respectively, despite an increase in resources. In fact, the PEPFAR program lost more people on treatment than it gained in FY 2018. Across PEPFAR/South Africa programming, FY 2018 overspending and underperformance at the partner level is a program management and oversight issue. [..] The full expenditure of PEPFAR resources without improvement of results is unacceptable. This represents a serious, continued problem and program failure\u2013linkage and retention must improve in South Africa now in COP 2018 implementation.", "Other recent-year U.S. development aid for South Africa has supported programs focusing on", "basic education; civil society capacity-building aimed at fostering accountable and responsive governance and public service delivery advocacy, and support for the office of the Public Protector [a public ombudsman; see below]; business-government cooperation in support of development; and support for sexual assault and gender-based-violence victims. ", "The USAID-led, South Africa-based Power Africa initiative also supports energy projects in South Africa and USAID provides indirect credit for small enterprise activity. Through its Africa Private Capital Group, USAID also facilitates development-focused financing, including though efforts to foster local municipal bond and pension fund investment in public goods and services. It has also provided support for development-centered policymaking. USAID also administers the Trilateral Assistance Program (discussed below), under which the United States supports South African foreign aid efforts in Africa. South Africa has served as a \"Strategic Partner\" under the Feed the Future U.S. global food security and agricultural development initiative by providing agricultural technical assistance to other African countries. South Africa also participates in the joint State Department/USAID Young African Leaders Initiative, which helps develop the leadership skills of young business, civic, and public sector professionals.", "Most U.S. development assistance programs in South Africa are administered by the State Department or USAID. These agencies sometimes collaborate with and transfer funds to other, technically specialized U.S. agencies, notably the U.S. Centers for Disease Control and Prevention (CDC), which plays a key technical role in PEPFAR implementation. U.S. export promotion agencies also periodically provide loans, credit guarantees, or other financial services to U.S. firms aimed at boosting U.S. exports and fostering development and economic growth. There is a Peace Corps program in South Africa and the small U.S. African Development Agency (USADF) provides a few grants in South Africa. Some project-centered grant aid is also provided to civil society entities, and South Africa periodically benefits from U.S. regional programs focused on such issues as environmental management and trade capacity-building. U.S. trade and export promotion agencies are also active in South Africa. ", "Security cooperation efforts are diverse but are funded at far lower levels than development programs. In FY2017 and prior years, International Narcotics Control and Law Enforcement (INCLE) funds were used for law enforcement and criminal justice technical support. Except in FY2018, Nonproliferation, Antiterrorism, Demining and Related Programs (NADR)-Export Control and Related Border Security (EXBS) funds have supported technical training relating to trade and border control, with a focus on controlling trade in military and dual-use technologies. The International Military Education and Training (IMET) program is long-standing, and in past years Foreign Military Financing (FMF) aid has supported the South African military's capacity to respond to regional crises and participate in peacekeeping. This has included past-year funding technical support and training for U.S.-sourced South African military C-130 aircraft. Since 2005, South Africa has received peacekeeping training under the U.S. Africa Contingency Operations Training and Assistance program (ACOTA), a component of the Global Peace Operations Initiative (GPOI, a multi-country State Department training program) and other U.S. military professionalization programs. South African troops also regularly join their U.S counterparts in military training exercises. There is a South Africa-New York National Guard State Partnership Program, and the U.S. Department of Defense also regularly supports South Africa's biennial African Aerospace Defense Exhibition."], "subsections": []}]}, {"section_title": "Country Overview", "paragraphs": ["South Africa is influential on the African continent due to its investment and political engagement in many African countries and its active role and leadership within the inter-governmental African Union (AU). It also has one of the largest, most diverse and developed economies, and has made substantial progress in spurring post-apartheid socioeconomic transformation. For summary data on the country, see Figure 2 . Many negative socioeconomic effects of apartheid persist, however.", "Apartheid ended after a tumultuous negotiated transition, between 1990 and 1994, when South Africa introduced a system of universal suffrage and multi-party democracy\u2014after a decades-long struggle by the ANC and other anti-apartheid groups. Following the release of long-imprisoned ANC leader Nelson Mandela and the ANC's legalization in 1990, political dialogue led to an interim constitution in 1993 and elections in 1994, in which Mandela was elected president. Further post-electoral negotiations led to the adoption in 1996 of a new constitution and the creation of the Truth and Reconciliation Commission (TRC, in operation until 2002). The TRC documented crimes and human rights abuses by the apartheid regime and anti-apartheid forces from 1960 until 1994, and oversaw processes of restorative justice, accountability, and assistance for victims of such abuses. It has since served as a model for similar efforts around the world. Mandela died in 2013.", "The ANC currently holds 249 of 400 National Assembly seats. It has held a parliamentary majority since the first post-apartheid elections in 1994 and, since the National Assembly elects the president, also controlled the executive branch. Successive ANC-led governments have sought to redress the effects of apartheid, notably through efforts to improve the social welfare of the black majority and by promoting a pan-racial, multiethnic national identity. While racial relations have improved, divisions remain; references to race in politics and social media sometimes spur heated debate, and racially motivated criminal acts periodically occur.", "Despite diverse investments and policies aimed at overcoming the negative effects of apartheid, many of its most damaging socioeconomic effects endure, posing persistent, profound challenges for development and governance. Among these are high levels of poverty, social inequality, and unemployment, as well as unequal access to education, municipal services, and other resources. Such problems disproportionately affect the black population. Racial disparities have gradually declined, but most black South Africans live in poverty and their average per capita incomes are roughly one-sixth as large as those of the historically privileged white minority.", "Income and consumption distribution are notably unequal. Recent measures suggest the wealthiest top 10% and top 20% in South Africa enjoy the highest share of income of any country. South Africa's GINI coefficient\u2014a measure of income or consumption inequality\u2014is consistently among the highest globally, and is often the highest. There are also significant regional, rural-urban, and intra-racial socioeconomic disparities. Large segments of the poor majority lack access to decent housing and adequate infrastructure services (e.g., electricity and water), especially in rural areas and in the vast, high-density informal settlements surrounding most cities. Known as townships, such settlements are populated mostly by poor black and mixed race \"coloured\" inhabitants. Lack of legal property ownership sometimes subjects township dwellers to municipal squatter eviction and slum clearance operations. ", "There is also extreme racial disparity in access to land, despite implementation of land redistribution and restitution initiatives since 1994. Under such programs, the state has purchased large amounts of land intended to be transferred to populations that had limited or no ability to own land under the apartheid system\u2014primarily those of black, \"coloured\" or Indian descent. While, black ownership and other access to land has risen markedly in some provinces since 1994, redistribution and restitution processes have been slow and resulted in les extensive transfers than initially projected. As a result, the small minority white population continues to own over 70% of land nationally. This has spurred growing demands for uncompensated state expropriation of private land and pushed the ANC to pursue an ongoing effort to amend the constitution to permit such expropriation.", "South Africa also faces a range of other socioeconomic challenges. Labor strikes and unrest are common, particularly in the mining sector. Rates of violent crime\u2014notably murder and rape, along with gender violence more broadly, and gun crime\u2014are high. The causes are diverse. South Africa also faces criminal justice system capacity challenges. Although the country has a relatively well-resourced national police force, there are periodic reports of vigilante mob justice, and police sometimes use heavy-handed, abusive tactics to respond to crime and public unrest. Several police leaders have been implicated in professional misconduct inquiries or corruption.", "South Africa also faces broad challenges to social cohesion linked to grievances and fractures stemming from socioeconomic inequality and marginalization, social biases, and criminal activity. Examples include periodic xenophobic mob attacks on African immigrants and their businesses, crime-motivated attacks on white farmers, and frequent de facto residential racial and socioeconomic segregation. While many of the poor live in townships, the wealthy, including many whites, often live in gated, highly secured communities.", "Another key challenge is South Africa's high HIV prevalence. Statistics South Africa, a state agency, estimates that 18.99% of adults were HIV-positive in 2018, up from 2017 (18.88%). Despite this moderate increase, which is partially attributable to increased survival rates due to improved access to anti-retroviral treatment, there has been a steady decline in the annual growth rate of HIV prevalence (total cases) and incidence (new infections). National efforts to counter HIV have received considerable international support, notably under U.S. PEPFAR programs. ", "Citizens' expectations and their demands for rapid socioeconomic transformation have exceeded what the South African state has been able to provide, due to fiscal, technical, and governance shortfalls. Despite large investments in housing, services, infrastructure, and state technical capacities, public goods and services delivery rates and quality have often been inadequate. This has spurred frequent, sometimes violent demonstrations. While known as service protests, they center on many issues, including local public corruption and cronyism, and can have political repercussions. In April 2018, President Ramaphosa cut short an overseas trip to address a spate of interrelated unrest that featured service delivery protests, attacks on foreigners, anger over alleged corruption by the affected province's then-Premier (governor), and clashes between local rival ANC members. In 2015 and 2016, South Africa also experienced mass student protests, some violent, over university education costs and alleged institutional racism in higher education. The current government is implementing a pledge, made just before the end of the Zuma administration, to fund free higher education for the poor and freeze certain other fees.", "Despite such challenges, and indications of an increased politicization of the state bureaucracy under Zuma, many national state agencies (e.g., the central bank, the statistical agency, the courts, some ministries, and the treasury) possess substantial institutional and technical capacity. South Africa ranked second globally on the International Budget Partnership's 2017 Open Budget Index , a measure of public budget transparency. While some state-owned enterprises (SOE) are struggling to recover from reported mismanagement and malfeasance under Zuma, these entities manage large, sophisticated national transport, telecommunication, energy, and other infrastructure systems. The state also administers a large welfare system that supported about 17.6 million grants as of September 2018 and had a 2017/2018 annual budget of about $10.5 billion. It is viewed by many observers as a key anti-poverty tool, albeit a costly one that is expected to grow in size and expense. Despite its role in helping to reduce extreme poverty, the system's administration has been the subject of considerable controversy in recent years."], "subsections": []}, {"section_title": "Politics and Governance", "paragraphs": ["The ANC party is ideologically leftist, but in practice it has melded pragmatic support for private sector-led growth with state-centric economic planning under what it terms the \"developmental state\" model. The ANC's political credibility is largely founded on its leading role in the anti-apartheid struggle and its efforts to end South Africa's deep-rooted, enduring social inequalities. It has struggled to build on this legacy, however, amid the country's persistent challenges. Increasingly, voters appear to be judging the ANC on its current performance, and it faces a growing number of opposition parties. Nevertheless, notwithstanding a marginal loss of electoral strength in recent elections, it has maintained its parliamentary dominance. Rivalry within the ANC at the provincial and local levels\u2014often regarding appointments to local state bodies and the selection of slates of delegates to national party decision-making bodies\u2014is often fierce, and numerous cases has led to political assassinations.", "National Assembly elections take place under a party-list proportional representation system, in which voters select a party and each party allocates its share of elected seats according to an internal party list. As a result, internal ANC politics and leadership selections play a key role in national politics. The most important ANC post is that of party president, since the ANC usually nominates its party leader to serve as national president. The Congress of South African Trade Unions (COSATU) and the South African Communist Party (SACP) also exert influence within the ANC. They do so through a compact called the Tripartite Alliance, under which the ANC appoints top members of COSATU and the SACP to party leadership and state posts, and the latter organizations do not independently contest elections. The Alliance weakened during Zuma's tenure due to SACP and COSATU criticism of Zuma, intra-COSATU splits linked to the emergence of new unions, and discontent within the ANC's labor constituency.", "The Democratic Alliance (DA) is the second-largest party in parliament, with 89 of 400 National Assembly seats. The DA has its origins in various historical liberal-leaning party coalitions. For many years, its leaders were predominantly white, but it has built an increasingly strong base among blacks. Now led by a charismatic young black leader, Mmusi Maimane, the DA has often confronted the ANC in parliament, at times in league with the Economic Freedom Fighters (EFF), a populist hard-left party centered on black empowerment.", "The EFF was formed in 2013 by a former dissident ANC Youth League leader, Julius Malema, and won 25 seats in the 2014 elections, becoming the third-largest party. Malema, a political firebrand, is a former key Zuma supporter who later broke with Zuma. The ANC expelled him in 2012, and he became one of Zuma's most vocal critics, notably regarding corruption\u2014though he and his EFF co-founder have themselves faced corruption allegations. The EFF styles itself as a workers' party and draws its support from socioeconomically marginalized groups (e.g., jobless youth, low-wage workers, and poor communities). The EFF operates as a disruptive force, both in its radical policy proposals and through its often-boisterous obstruction of parliamentary proceedings.", "The Inkatha Freedom Party, with origins in Zulu-dominated KwaZulu-Natal province, was a fierce ANC rival during the end of the anti-apartheid period. It is now a self-described centrist party and holds 10 seats, making it South Africa's fourth largest political party. The remaining 27 seats are distributed among nine small parties. ", "A key target campaign demographic for all parties is the \"Born Free\" generation, those born in 1994 or later, who make up roughly 47% of the population and about 14% of the eligible electorate. They share discontent over corruption, public services, and poverty with their older counterparts, and suffer even higher unemployment rates, but they are reportedly less engaged in formal politics and vote at lower rates than older citizens."], "subsections": [{"section_title": "Checks and Balances", "paragraphs": ["During Zuma's presidency, both the DA and the EFF, as well as private foundations and NGOs, sought to use the courts as a check on executive power by regularly suing state officials, including Zuma. These suits, relating to alleged executive branch overreach, agency malfeasance, and illicit actions, were often successful. In March 2016, for instance, the Constitutional Court ruled that Zuma had failed to uphold the constitution by defying a binding recommendation by the Public Protector that he partially reimburse the state for the cost of a state-funded upgrade to his private compound, a matter of long-standing controversy. The ruling was used as the basis for a DA impeachment motion against Zuma that failed but was seen as a political blow against Zuma. In a separate case, also brought by the DA, a High Court panel ordered in April 2016 that the National Prosecuting Authority (NPA) review its 2009 decision to dismiss a 1990s arms purchasing corruption case against Zuma (see below). The Zuma administration faced a third legal setback in March 2016, when the Supreme Court of Appeal ruled that the government had unlawfully ignored a court order\u2014and violated local and international law obligations\u2014by not detaining then-Sudanese President Omar Al Bashir when he attended a mid-2015 African Union (AU) summit in South Africa. Bashir faces an International Criminal Court (ICC) arrest warrant. The government subsequently initiated an effort to formally withdraw South Africa as a party to the ICC. This spurred further litigation. In early 2017, a court determined that the withdrawal was unconstitutional.", "Former Public Protector Thuli Madonsela also repeatedly issued reports that documented alleged acts of malfeasance, non-compliance with laws and regulations, corruption, and operational shortcomings by the executive branch and state agencies under its purview. Her reports also ordered corrective actions. Most notably, in late 2016, she issued State of Capture , a highly critical report centering on Zuma and the Guptas, a family of business owners that reportedly maintained very close and allegedly often corrupt relations with Zuma and a network of his political and business associates (see below). The report alleged that these actors had engaged in extensive high-level state malfeasance, and mandated the establishment of the now-ongoing judicial commission of inquiry. Zuma fought an unsuccessful legal battle to prevent the report's release, claiming that Madonsela had violated his due process rights. The clash was closely watched, as it was seen as a test of Madonsela's transformation of her office into a key independent institutional check on executive power."], "subsections": []}, {"section_title": "Ramaphosa Administration", "paragraphs": ["The parliament elected Ramaphosa national president a day after Zuma's February 2018 resignation. Ramaphosa\u2014an ex-labor leader turned corporate leader, anti-apartheid activist, and former close associate of Nelson Mandela\u2014assumed the post after also narrowly winning a highly contentious late 2017 ANC party leadership election based largely on his pledge to fight corruption and heal the economy. His victory resulted in the defeat of the influential ANC faction linked to Zuma and its favored candidate, Nkosazana Dlamini-Zuma (Zuma's ex-wife and a former government minister and African Union Commission chair). Analysts speculated that if she had been elected, she might have enabled Zuma to remain national president until general elections in 2019 and potentially helped to avert his prosecution for corruption. ", "President Ramaphosa's priorities are to reverse what many observers contend was a marked, extensive deterioration in governance under Zuma and to enhance state agency operational efficacy, especially with regard to state-owned enterprises (SOEs). Another key goal is to spur faster, more inclusive economic growth by stimulating public and private investment in order to create jobs, enhance social services and infrastructure, and expand gross domestic product (GDP). Particular emphases include \"transformation\" efforts aimed at expanding and equalizing access to economic opportunities, particularly for the black population. Efforts in this vein include small business promotion, preferential state procurement, and actions to boost industrial growth. Additional priorities are reform and growth in mining and trade, along with efforts to attract local and international investment, spur digital sector growth, and expand agricultural production.", "The Ramaphosa administration backs a proposed constitutional amendment to permit the expropriation of private land without compensation for redistribution to victims of apartheid-era discrimination and land seizures. In early 2018, the parliament provisionally endorsed this goal, which the ANC had adopted as a party policy in late 2017. In late 2018, after holding nationwide hearings, a parliamentary constitutional review committee formally recommended the adoption of this change. Parliament endorsed the recommendation and appointed a committee to craft and introduce the amendment. This effort is highly controversial. It has raised fears that such seizures would primarily target white minority farmers, who own most farmland, and sparked concern that it might cause international investors to question the security of private property ownership in South Africa. Ramaphosa, seeking to dampen such fears, has contended that expropriation would apply mainly in cases involving \"unused land, derelict buildings, purely speculative land holdings, or\u2026 where occupiers have strong historical rights and title holders do not occupy or use their land, such as labour tenancy, informal settlements and abandoned inner-city buildings.\""], "subsections": []}, {"section_title": "Governance Reform and Accountability", "paragraphs": ["Public Enterprises Minister Pravin Gordhan\u2014who twice served as finance minister under Zuma but clashed fiercely with him\u2014is spearheading efforts to strengthen State-owned enterprise (SOE) governance and efficacy. President Ramaphosa is directly involved in these efforts; in April 2018, he ordered probes into irregularities and mismanagement at two major SOEs: Eskom, the national power utility, and Transnet, a transport and logistics firm. His administration also replaced these SOEs' boards, along with that of Denel, an important but ailing defense sector SOE. In late 2018, Ramaphosa also fired the head of the tax service\u2014a key Zuma ally and Gordhan foe\u2014after earlier suspending him and appointing a commission of inquiry into alleged malfeasance at the agency. A separate parliamentary commission also probed systematic irregularities at Eskom.", "Broader state investigations into and accountability for an allegedly widespread, deep-seated pattern of alleged corruption and influence peddling under Zuma, known locally as \"state capture,\" also continue to roil politics and draw intense public attention. State capture refers, in particular, to the activities of a network of Zuma-allied ANC and business associates, notably the Guptas, an Indian \u00e9migr\u00e9 family that accumulated a range of business holdings after arriving in South Africa in the 1990s. This network allegedly participated in corrupt high-level state-business collusion to influence and even control state enterprises and other agency decisions, contracts, regulatory processes, and fiscal assets to advance their financial and political interests.", "Ongoing, high-profile hearings by a judicial commission of inquiry into state capture are a key component of such investigations. Several separate commissions of inquiry have also examined or are probing alleged malfeasance at several state agencies and the politicization of state security agencies. Zuma established the judicial commission in early 2018, as ordered by a court, after he had earlier resisted doing so. While its proceedings center on developments during his administration, the matters under consideration remain key issues of current policymaking concern. Witnesses have implicated the Guptas in efforts to influence state agency decisions and top official appointments under Zuma, which the Guptas have denied. The inquiry has revealed evidence of systematic corruption by other actors, notably Bosasa, a public and prison services provider. Its contracts were cancelled and its leaders arrested after hearings in early 2019. To supplement the work of the various commissions of inquiry, in February 2019, President Ramaphosa appointed a special tribunal to fast-track recovery of public assets lost to graft.", "The hearings could reveal evidence leading to new charges against Zuma and the Guptas, who reportedly fled to Dubai, from where the government tried to extradite them. They could also bring renewed negative attention to the ANC ahead of the 2019 election. The proceedings could also shape the current political environment and undermine Ramaphosa's standing, should members of his administration be implicated in malfeasance. Finance Minister Nhlanhla Nene, a once-reputed anti-Zuma reformer, resigned after testifying to having links to the Guptas. His successor is Tito Mboweni, a business executive and former head of the central bank, whose appointment drew business support. In late 2018, Minister of Home Affairs Malusi Gigaba\u2014a close Zuma ally who was popular within the ANC and whom Ramaphosa had retained\u2014resigned over a perjury accusation and a sex tape scandal.", "Meanwhile, Zuma is being tried on 16 charges of fraud, corruption, racketeering, and money laundering in a long-running corruption case centering on a 1990s-era state arms deal scandal. Zuma fended off the case for years, allegedly aided by the National Prosecuting Authority (NPA). In March 2018, however, the NPA was forced to reinstate the charges after an appeals court upheld a 2016 High Court ruling that the NPA's dismissal in 2009 of the case against Zuma had been \"irrational\" and made under political pressure. The trial is likely to proceed for months, including during elections in 2019, with possible implications for the ANC's prospects. The NPA's alleged improper favoritism toward Zuma drew substantial attention, notably under its former Director, Shaun Abrahams, but also under several of his Zuma-appointed predecessors. In August 2018, a court voided Abrahams's appointment in a case linked to litigation over his predecessors' appointments. In late 2018, Ramaphosa appointed Shamila Batohi, a career prosecutor and former International Criminal Court legal adviser, to head the NPA. She is expected to actively pursue state capture and public agency malfeasance cases. Hours prior to Batohi's appointment, the NPA provisionally withdrew a key criminal case against the Guptas."], "subsections": [{"section_title": "Ramaphosa: Political Prospects", "paragraphs": ["President Ramaphosa took power slightly more than a year prior to South Africa's forthcoming May 2019 elections, which present him with both challenges and opportunities. If his administration can show significant economic and governance improvements, he may be able to consolidate his power within the ANC and unify the now-splintered party. He may also be able to sideline the opposition, as he has arguably already done by appropriating one of their key political themes: fighting corruption within the ANC. Ramaphosa's ability to pursue his agenda, however, may be constrained by divisions within the top tiers of the ANC and a need to cooperate with powerful state and party allies of Zuma, some of whom face corruption allegations. Some of these actors have sought to obstruct his reform efforts and blunt his political prospects. Public anger over poor public services and continuing economic malaise also pose challenges for Ramaphosa. Nevertheless, although some press reports caution that he faces substantial political headwinds, opinion polls and many press accounts suggest that he enjoys substantial popularity. "], "subsections": []}]}]}, {"section_title": "The Economy", "paragraphs": ["South Africa has the most diversified, industrialized economy in Africa. It also has one of the top-five-highest GDPs per capita ($6,560 in 2018) in sub-Saharan Africa, and is one of very few upper-middle-income countries in the region. As earlier noted, however, income distribution is highly unequal. South Africa is a top producer of mined raw and processed commodities (e.g., platinum, steel, gold, diamonds, and coal). Other major industries include automobile, chemical, textile, and food manufacturing. These sectors, part of an overall industrial base that contributed just under 26% of GDP in 2017, are important sources of jobs. There are also well-developed tourism, financial, energy, legal, communications, and transport sectors, which are part of an overall services sector that contributed nearly 62% of GDP in 2017. Recent GDP trends are provided in Table 2 . South Africa regularly hosts large global development and business events, and South African firms are active across Africa, particularly in the mobile phone, retail, and financial sectors. Some also operate internationally, and the Johannesburg Stock Exchange is among the 20 largest global bourses. South Africa is also a famed wine producer and exports diverse agricultural products, but only about 10% of its land is arable and agriculture makes up less than 3% of GDP. ", "Despite its substantial economic strength, South Africa's annual GDP growth, which stood in the 5% range in the mid-2000s, has slowed. It dropped from almost 2.5% in 2013 to under 0.6% in 2016. Despite a rise to 1.3% in 2017, the International Monetary Fund (IMF) projects a decline to 0.8% in 2018. While the nominal value of GDP has slowly risen in constant local Rand terms since 2010, exchange rate volatility has caused the value of GDP in dollars to fluctuate greatly, which has major implications for the country's terms of trade, international debt servicing, and integration into global manufacturing chains. In dollar terms, GDP fell from a peak of $417 billion in 2011 to $296 billion in 2016, as the Rand weakened sharply against the dollar, before rising to $349 billion in 2017, as the Rand appreciated.", "Global factors contributing to low growth in recent years have included weak investor confidence\u2014attributed to uncertain economic policy trends and alleged poor governance under Zuma\u2014and periods of weak prices and sluggish global demand for key commodity exports, especially to China. While weak commodity prices may hurt South African export earnings, they can also reduce the cost of raw material imports used by many local producers, including exporters. ", "South Africa has a generally open foreign direct investment (FDI) regime, although investors face high taxes, currency exchange volatility, substantial regulatory burdens, large locally entrenched firms, and Black Economic Empowerment policy compliance costs (see below). Moreover, some foreign investors have expressed discontent over the enactment in late 2015 of a law known as the Protection of Investment Act, which removed most special FDI rights and requires foreign investors to settle most disputes through the South African legal system. This has raised concern about potentially unequal treatment under the law and the possibility of expropriation, which South African law permits in some narrow instances.", "FDI flows into South Africa have dropped sharply in recent years. They totaled $1.3 billion in 2017, down from $8.3 billion in 2013 and a peak of $9.2 billion in 2008. Meanwhile, outward flows have risen sharply, and were valued at more than five times the worth of inflows in 2017. See Table 3 for information on summary trade and FDI trends. The auto industry has been an important source of job-intensive FDI; South Africa has long hosted Ford plants, and other automakers (e.g., Toyota, BMW, and Nissan) have announced significant manufacturing capacity investments in recent years. Rail locomotive manufacturing has also attracted FDI.", "The World Economic Forum (WEF) ranked South Africa as the second most competitive economy in 2018 in sub-Saharan Africa (after Mauritius), but assesses it as 67 th globally. The WEF cites as economic strengths South Africa's large market size, relatively good infrastructure, advanced financial system, and innovation capability, but views its research and development capacities as inadequate. The country's World Bank Doing Business 2018 rankings (82 nd globally and fourth in Africa) are middling, and its ranking has dropped over the past decade. The survey also suggests that ease of doing business varies within sub-regions of the country, and that national improvements are possible.", "South Africa's private sector is relatively dynamic, although firms face a highly unionized labor force, rigid labor laws and, in some industries, sector-wide wage and working condition agreements negotiated between large firms and unions. Such factors arguably tend to protect incumbent jobholders, reduce labor market flexibility, and limit formal sector economic opportunities for the unemployed and poor\u2014thus contributing to the country's chronically high unemployment rates. South Africa has long had a minimum wage in select sectors, but has only recently enacted a general minimum wage law. Sectoral labor agreements have mixed outcomes. They can help firms and industry groups to maintain predictable and stable labor costs and work rules, but often favor the incumbent firms and unions who negotiate them. Oligopolies in some sectors also hinder competition and spur high prices for some locally produced goods.", "There are also skill and geographical mismatches between labor demand and supplies, and low skill levels in some segments of the labor force. This is, in part, an enduring legacy of population and economic controls and discriminatory education and training patterns under apartheid. Chronically high unemployment may also suggest that the labor pool is under-utilized, whether due to skills deficits or a lack of jobs, which may undercut income earning, spending, demand, and other economic growth potentials. Information and communication (ICT) adoption rates are low and uneven, and education quality ranks poorly in international comparisons, despite large investments in the sector, which has negative impacts on workforce capabilities. ", "Key tools for reversing structural racial disparities are Black Economic Empowerment (BEE) policies, which seek to promote racial equality and economic inclusion using market-based incentives. As a condition of obtaining public contracts, private firms must also comply with BEE requirements, in particular a scorecard-based system ranking firms by factors such as racial inclusiveness in ownership and management, investment in skills development for historically disadvantage persons, and prioritization of commercial ties with other BEE-compliant firms. BEE policies can impose compliance costs on firms and limit hiring choices, and have been criticized in some instances for favoring the interests of middle- and upper-income blacks.", "The private sector also faces state competition, as state-owned firms enjoy regulatory preferences in some sectors, even though their performance has often been poor. According to the IMF, SOEs", "play a major role, often with limited competition, in providing key products/services, such as power, telecommunications, and transportation (e.g., ports, airways). Their performance thus affects not only the public finances and the borrowing costs of the whole economy, but also economic growth and job creation through the cost of important inputs for a wide range of businesses and households. [\u2026G]enerally, there is a need to allow private firms to compete on a more equal footing with large SOEs. ", "South Africa's sovereign credit ratings are low and have fallen sharply in recent years. Rising public deficits and debt are also a challenge. Other domestic factors hindering growth include social service delivery challenges and unmet infrastructure needs, which undercut productivity potentials and hurt South Africa's attractiveness as an investment destination. Electricity generation deficits and plant maintenance delays have led to periodic rolling power blackouts (see below). The country also has faced several recent droughts, including one that resulted in extreme water shortages in Cape Town, a global tourist destination with a population of 3.7 million people. Continuing water shortage challenges are likely.", "Ramaphosa has been spearheading an initiative to attract $100 billion worth of new investment over five years. As of October 2018, the government had solicited $55 billion in FDI commitments. Local and foreign firms reportedly pledged $20 billion worth of cross-sectoral investments during the government-led South Africa Investment Conference in late October 2018. This augmented more than $35 billion in prior investment commitments, mostly from China, Saudi Arabia, the UK, and the United Arab Emirates.", "The government is also continuing a range of efforts to reduce unemployment, poverty, and socioeconomic inequality, to improve education and healthcare, and to unite a geographically and racially divided society. Such actions are guided by the 20-year National Development Plan (NDP). Crafted by a Ramaphosa-headed commission and issued under Zuma, it is supplemented by multiple shorter-term, sector-specific plans. The NDP emphasizes investments in social services and state operational capacities. It fosters efforts to boost employment and incomes, including labor-intensive growth strategies and state investment in large-scale infrastructure, especially in the transport, communications, and power sectors. NDP implementation has been hampered by the poor governance and policy inconsistency under Zuma, the intractability and extensive scope of the country's challenges, and financing limitations."], "subsections": [{"section_title": "Energy and Natural Resource Issues", "paragraphs": ["Energy issues\u2014particularly electrical power sector challenges\u2014are a sensitive political topic, as they have the potential to influence the economy and political prospects for the ANC and have in some cases been tied to state capture allegations.", "Power Sector . Periodic rolling electricity blackouts caused by power generation shortages due to plant maintenance shortfalls and breakdowns are a key energy challenge. They are attributable to multiple factors, including years-long delays and overspending on the construction of two massive new coal-fired plants. Other factors include poor performance by the state-owned national power utility, Eskom. It suffers from massive debt, low credit ratings, and chronic liquidity problems, and has been plagued by reported mismanagement and malfeasance, including in relation to questionable Gupta-related coal and uranium supply deals. This has spurred substantial public and opposition party ire and government criticism, especially when Eskom has requested power rate hikes. Eskom has also drawn criticism for continuing to rely heavily on coal, despite pledging to expand renewable power generation, a government-supported goal.", "Eskom's generation shortfalls are a key policy challenge because they affect economy-wide productivity, and its $30 billion in state-backed debt hurts the country's sovereign debt rating and ability to borrow. Amidst worsening power shortages, the government plans to fund a three-year, $4.9 billion restructuring of Eskom that is to split it into three state-owned entities focused on generation, transmission and distribution respectively. Eskom had sought the transfer of some Eskom debt to the general public debt ledger, and recently won part of a requested 15% rate increase, despite mining industry opposition.", "Nuclear Power Generation. South Africa is the only African country with a commercial nuclear power plant. The Zuma administration planned to increase the county's 51,309 MW of power generation capacity by 9,600 megawatts (MW) by 2030 by constructing six to eight new nuclear power plants. It pursued pre-bid negotiations with firms from Russia, France, China, the United States, and South Korea, all countries that had signed bilateral commercial nuclear cooperation agreements with South Africa. The project's estimated cost ranged widely, between $30 billion and $100 billion. Cost and environmental concerns spurred substantial opposition to the plan, as did opacity surrounding pre-bid negotiations with Russia. ", "Due to the lack of concrete cost estimates, the Treasury refused to authorize the release of a formal vendor request for proposals. Leaked details regarding accords with Russia and its Rosatom SOE suggested that a deal would have strongly favored Russian SOE financial interests. Broader concern grew after reports that Shiva Uranium\u2014a firm controversially acquired by the Guptas\u2014was in the running to produce fuel for the plants, amid indications of possible initial procurement irregularities. In April 2017, the High Court invalidated the nascent procurement process on procedural grounds. It also voided bilateral pre-procurement agreements with Russia and broad nuclear technical cooperation agreements with the United States (signed in 1995) and South Korea (signed in 2010). The court's ruling essentially required the government to begin its procurement effort anew. The Ramaphosa administration, while remaining open to a mix of energy source options, has not expressed support for an expansion of nuclear power in South Africa. Russia, however, is actively pressing for a new nuclear power deal with South Africa.", "Natural Gas. The prospect of significant domestic natural gas production from hydraulic fracturing of natural gas-rich shale (\"fracking\") is also hotly debated. Supporters see natural gas as a less polluting alternative to coal, South Africa's main electricity generation fuel, and local gas production as a way to reduce reliance on energy imports and generate jobs. Opponents, especially farmers, have cited possible contamination and overuse of water resources, notably in the environmentally sensitive semi-desert Karoo region, where most of an estimated 390 trillion cubic feet of recoverable shale gas reserves are located. Such concerns spurred a 2011 moratorium on exploration. It was later lifted, but a 2017 High Court ruling invalidated national fracking regulations. The Ramaphosa administration has pledged to fast-track applications and regulatory requirements to enable new exploration.", "Mining. Mining sector reform is another focus of debate. In 2017, the Zuma administration issued a draft mining charter\u2014a document setting out industry-wide policy requirements with the aim of increasing black economic participation and benefit. It drew widespread industry concern. The charter would have required renewed compliance with a black mine ownership share quota of 30% if current black owners sold or transferred their shares in a mining asset. It would also have required firms to give partial in-kind ownership rights to mine workers and nearby community groups, and pay them dividends. The Ramaphosa administration revised and later adopted a new charter that allows firms to remain compliant with black ownership requirements once they are met\u2014even if black ownership shares fall below the 30% threshold. It also permits firms to make payment in place of worker and community shares and recover the value of such shares, eliminates dividends for such owners, and requires compliance with BEE regulations for mining firms involved in public procurement transactions."], "subsections": []}]}, {"section_title": "U.S. Trade and Investment Issues", "paragraphs": ["South Africa has been the largest U.S. trade partner in Africa since 2014, though its global significance is relatively moderate. In 2017, it was the 35 th -largest source of U.S. imports and the 43 rd -largest U.S. export destination globally. Bilateral trade in goods in 2017 totaled $13 billion ($5 billion in U.S. exports and $8 billion in U.S. imports), down from a peak of $16.7 billion in 2011, while trade in services in 2017 totaled $4.8 billion ($2.9 billion in U.S. exports and $1.9 billion in U.S. imports). In 2017, the stock of U.S. FDI in South Africa stood at $7.34 billion, and centered on manufacturing (51%), notably of chemicals and food, professional and technical services (9.6%), and wholesale trade (8%). South African FDI stock in the United States totaled $4.1 billion. ", "A U.S.-South Africa Trade and Investment Framework Agreement (TIFA) signed in 2012 facilitates bilateral trade and investment dialogues, and there is a bilateral tax enforcement and cooperation treaty, and a double taxation treaty. South Africa also is eligible for duty-free benefits under the African Growth and Opportunity Act (AGOA, P.L. 106-200 , Title I, reauthorized in 2015 for 10 years under P.L. 114-27 ), but not for special AGOA apparel benefits. Its $2.9 billion in AGOA exports to the United States in 2017 (21% of all such exports) made it the largest non-oil-focused AGOA beneficiary and the second largest overall, although the value of its exports under AGOA has fallen since peaking at $3.6 billion in 2013. An April 2018 U.S. International Trade Commission study, U.S. Trade and Investment with Sub-Saharan Africa: Recent Developments , found potential for significantly greater bilateral trade in a range of goods.", "During the 2015 AGOA reauthorization debate, various stakeholders raised questions about South Africa's continued AGOA eligibility. Two issues drew particular attention. The first was concern over South Africa's reciprocal trade agreements with other advanced economies, in particular the European Union (EU). Some in the U.S. private sector argued that the agreement places them at a competitive disadvantage vis-\u00e0-vis EU firms, as it gives the latter preferential tariff treatment in South Africa. (In contrast, AGOA gives South African firms preferential access to U.S. markets, but does not give U.S. firms reciprocal access to South African markets.) AGOA eligibility criteria include rules on reciprocal third-party agreements, but no country has lost its eligibility under these criteria. The second issue was concern over the large size and advanced character of South Africa's economy\u2014particularly relative to its African peers\u2014which some have argued make it a U.S. competitor in some sectors. South Africa is the only country to make significant use of AGOA in the export of advanced manufactured products, in particular motor vehicles and related parts. In 2017, South Africa's auto exports under AGOA were worth $1.2 billion and comprised over a fourth of all African non-oil exports under the program.", "Some stakeholders cited these two issues to argue that stricter income requirements were needed to ensure that AGOA benefits target the least-developed countries in Africa, and to encourage South Africa to negotiate a reciprocal U.S. trade agreement. Others contended, conversely, that South Africa's exports of high-value items show that AGOA preferences were working as intended, by helping to improve South Africa's economic development. They also asserted that removing South Africa from AGOA might undermine intra-regional trade, since South Africa is a key trade partner of many other African countries, which AGOA is designed to encourage. While no significant changes were made affecting South Africa's AGOA eligibility, these issues may continue to draw congressional scrutiny. South African import restrictions on certain agriculture products also temporarily threatened its AGOA eligibility\u2014both before and after the 2015 AGOA reauthorization\u2014and led to a bilateral trade dispute. It focused on South African anti-dumping duties and other restrictions on imports of certain U.S. poultry, pork, and beef products. The dispute was resolved in 2016, when South Africa lifted these restrictions following intensive bilateral engagement initiated under an out-of-cycle 2015 review of South Africa's eligibility.", "The Trump Administration's use of Section 232 of the Trade Expansion Act of 1962 (P.L. 87-794, as amended) to impose tariffs have roiled bilateral trade ties. In March 2018, the Trump Administration imposed additional U.S. tariffs on steel (25%) and aluminum (10%) under Section 232. In 2017, U.S. imports from South Africa of affected steel and aluminum products were worth $279 million and $340 million, respectively. In September, several Members of Congress requested an exemption from these tariffs for South Africa, which had unsuccessfully sought their removal. In October, the South African government reported that the Trump Administration had granted Section 232 duty exclusions for U.S. imports of 161 aluminum and 36 steel products, largely allaying South African concerns. The action came in response to U.S. firms' requests for these exclusions, which are for products not produced in the United States in sufficient amounts or of satisfactory quality, according to the Commerce Department. ", "An additional U.S. Section 232 investigation on autos and auto parts could result in the imposition of additional U.S. tariffs on such products\u2014reportedly up to 25%\u2014including from South Africa. In July 2018, a South African government representative argued against such tariffs on a variety of grounds at a U.S. Commerce Department hearing on the matter. On February 17, 2019, the Commerce Department submitted a report on its investigation to President Trump. He has 90 days to act on recommendations in the report, which were not publicly disclosed.", "Other issues with implications for South Africa's AGOA participation include intellectual property concerns set out by the U.S.-based International Intellectual Property Alliance (IIPA), regarding South Africa's 2017 Copyright Amendment Bill. The IIPA testified at an August 2018 U.S. Trade Representative annual AGOA eligibility review hearing that the bill would weaken IPR holders' rights, make South Africa noncompliant with AGOA and other international IPR agreements, impose burdens on IPR holders, and disincentivize intellectual property development. South Africa's government, academics, and the U.S. and Europe-based Computer and Communications Industry Association disputed such claims. The National Assembly passed the bill in late 2018 and it now must be considered by the upper house. South Africa's move to expropriate land without compensation could also potentially affect South Africa's AGOA eligibility, although there are no overt signs of such a shift. A range of other issues with implications for U.S. investment in South Africa are addressed in the State Department's annual Investment Climate Statements publication."], "subsections": []}, {"section_title": "Foreign Policy Issues", "paragraphs": ["U.S.-South Africa bilateral relations are generally friendly, although there are periodic differences over foreign policy issues. While there is often broad U.S.-South African accord on selected multilateral issues (e.g., nuclear proliferation), African regional development goals and, in some cases, responses to political or military crises in the region, in multilateral fora, South Africa backs developing country positions that are at times inconsistent with stated U.S. interests. South Africa has also criticized some U.S.-backed international interventions (e.g., in Iraq and Libya) and taken stances toward Cuba, the Palestinian cause, and Iran that are at odds with U.S. positions. It has also forged increasingly close economic ties with China. Such ties may be viewed negatively by the Trump Administration; it has alleged that Chinese activities in Africa are \"corrupting elites, dominating extractive industries, and locking countries into unsustainable and opaque debts and commitments.\""], "subsections": [{"section_title": "South African Efforts in Africa", "paragraphs": ["Sub-Saharan Africa is a key focus of South African foreign policy. Its regional activities are multifaceted, but focus on investment; peacekeeping, stabilization, and conflict mediation; and the economic and other development priorities of the African Union (AU) and other sub-regional organizations (e.g., the Southern African Development Community or SADC). It also often helps coordinate or represent African views in multilateral fora on such issues as climate change, African peace and security issues, U.N.-African cooperation, and developing country priorities. South Africa is serving as a non-permanent member of the U.N. Security Council during 2019 and 2020; some analysts see this as affording South Africa with an opportunity to revitalize its international role following what some see as a period of foreign policy drift under Zuma.", "Regional Efforts. South Africa played key roles in the formation of the African Union (AU) and the establishment of the New Partnership for Africa's Development (NEPAD), the AU's strategic socioeconomic development policy framework. It hosts the NEPAD Planning and Coordinating Agency, now being transformed into the permanent AU Development Agency. In late 2018, South Africa ratified the AU-backed African Continental Free Trade Area (AfCFTA), an emergent free trade area intended to increase intra-African trade among as many as 49 AU member states by sharply reducing tariffs. Former South African Foreign Affairs Minister Nkosazana Dlamini-Zuma served as Chair of the African Union Commission from 2012 to 2017, although her tenure received mixed reviews. President Ramaphosa is currently the First Vice Chairperson of the AU, which he is slated to chair in 2020.", "Migration, Conflict Resolution, and Peacekeeping . South Africa hosts roughly 273,000 refugees, asylum-seekers, stateless persons, and other populations of international humanitarian concern, as well as many economic migrants. Most of these populations are from Africa. South Africa has repeatedly sought to resolve the political crises and halt or mitigate armed conflicts that contribute to these and other population flows and humanitarian emergencies across the African continent. It has been particularly active in this respect in southern Africa, on behalf of SADC\u2014as in Zimbabwe, after violent, internationally questioned elections in 2008, and in Lesotho, in response to repeated periods of political instability. Since 2009, former South African President Thabo Mbeki has chaired the African Union High Level Implementation Panel on Sudan and South Sudan (AUHIP). South Africa has also played mediating roles in conflicts in Cote d'Ivoire, the Democratic Republic of the Congo (DRC), Burundi, and elsewhere.", "South Africa has also long deployed uniformed personnel to U.N. peacekeeping operations and contributed troops to periodic AU military interventions. As of January 2019, there were 1,171 South African troops, police, and experts serving with U.N. peacekeeping missions in South Sudan, Darfur, Sudan, and DRC. In DRC, South Africa helped spearhead the formation of the Force Intervention Brigade, a special U.N. peacekeeping unit authorized to carry out contingent offensive operations in coordination with the DRC military to counter armed groups in DRC's highly unstable east. ", "South Africa's Foreign A id and U.S. Cooperation . To advance its policy goals across the continent, South Africa is endeavoring to establish a foreign aid agency, the South African Development Partnership Agency (SADPA), but progress has been slow and limited since the plan was announced in 2009. SADPA is intended to coordinate South Africa's foreign aid, with a focus on other African countries regarding democracy and good governance, conflict prevention, development, and other ends. These are all priorities of South Africa's current foreign aid mechanism, the African Renaissance Fund (ARF), which the Department of International Relations and Co-operation administers, along with multilateral agency and initiative funding. SADPA and a SADPA Fund would replace the ARF. Multiple other state agencies also administer foreign aid programs, although reporting on aid levels and program activities is fragmentary.", "Since 2005, the United States has partnered with South Africa under the USAID-administered Trilateral Assistance Program (TAP). TAP seeks to promote U.S. regional goals by leveraging South Africa's \"democratic systems, regulatory practices, and innovative scientific research\" to tackle development, natural disaster, and security challenges in Africa. It provides training, exchange programs, and funding to support South Africa's provision of technical development assistance to other African countries. TAP projects have addressed such issues as constitution-making in South Sudan, food security in Mozambique, adjudication of gender-based violence in Malawi and Angola, and climate change responses and water conservation in southern Africa."], "subsections": []}, {"section_title": "China and the BRICS", "paragraphs": ["South Africa established diplomatic relations with China in 1998, after severing ties with Taiwan, and the two countries maintain close political, trade, and investment ties. China is South Africa's largest trade partner. Bilateral relations take place under a 2010 comprehensive strategic partnership pact and a host of subsidiary cooperation agreements. The most recent such agreements were signed in September 2018 during a heads of state summit of the Forum on China-Africa Cooperation (FOCAC). Held in Beijing, it was co-hosted by China and South Africa, which hosted the prior FOCAC summit in 2015. The 2018 summit followed the 10 th summit of the Brazil, Russia, India, China, and South Africa (BRICS) cooperation group, hosted by South Africa July 2018. In 2014, the BRICS established the New Development Bank (NDB) to finance infrastructure and sustainable development efforts, which include ongoing South African projects worth $680 million, focusing on clean energy development, transport infrastructure, and renewable energy transmission.", "During a state visit to China by President Ramaphosa alongside the FOCAC 2018 summit, China reportedly agreed to provide $10 billion in financing for South Africa, adding to $14.7 billion in investments pledged by China during the BRICS summit. This financing is to fund a South African state economic stimulus package and infrastructure and industrial development projects. The government has not made public the terms and conditions of the deal; the opposition Democratic Alliance (DA) has pledged to request these details. In October 2018, the DA also threatened to sue for the details of a separate R33 billion ($2.2 billion) China Development Bank (CDB) loan to the state utility, ESKOM. The DA fears that these loans will increase South Africa's indebtedness to China. The transparency of Chinese loans has also drawn concern. ", "Other notable China-South African business transactions include a May 2018 commitment by nine large Chinese firms, including SOE affiliates, to invest $10 billion in a South African special economic zone, and a possible $900 million purchase of Chevron's South Africa and Botswana assets by Sinopec, a Chinese oil and gas SOE. In 2016, Chinese auto SOE Beijing Automotive International Corp. invested $759 million in a vehicle-production facility. As of late 2017, Chinese investment stock in South Africa reportedly exceeded $25 billion."], "subsections": []}, {"section_title": "Middle East Issues", "paragraphs": ["South Africa maintains cordial relations with multiple Middle East countries, including Iran, Saudi Arabia, and the United Arab Emirates (UAE). These ties have recently attracted attention in light of reported pledges by the latter two countries to invest $10 billion each in South Africa, and because South Africa's Denel arms manufacturing SOE could be the target of these investments. South Africa has exported arms to Saudi Arabia and the UAE in recent years, and the Saudi military has reportedly used those arms in attacks in the ongoing war in Yemen. Such attacks have killed or injured thousands of Yemeni civilians, and analysts have suggested that these exports may violate South African human-rights-related controls on arms sales. Closer relations with Riyadh have the potential to affect long-standing South African relations with Iran\u2014which take place through a bilateral Joint Commission of Cooperation created in 1995 and multiple cooperative agreements\u2014as well as South Africa's reported role as a back-channel intermediary between Iran and Saudi Arabia regarding the war in Yemen."], "subsections": []}]}, {"section_title": "Outlook", "paragraphs": ["South Africa experienced a rise in alleged corruption and deterioration in economic performance during the Zuma administration. Since taking office in early 2018, President Ramaphosa has taken steps to reverse these trends. Multiple inquiries into public sector corruption and malfeasance are under way, along with efforts to reform SOEs. The ultimate success of these efforts will depend on the degree to which public sector agency performance improves, guilty parties are successfully prosecuted, and management and regulatory reforms are implemented. ", "Such efforts are likely to be politically challenging for Ramaphosa, since they may threaten the influence of some top ANC party members and state office holders with ties to former president Zuma, who retains clout within the ANC. Ramaphosa also faces pressure from the political left on issues such as land reform and planned expropriation of land. He will have to balance such pressures with the demands of private property owners and investors. His relative power to pursue policy and institutional reforms will also depend, in part, on the success of the ANC in the May 2019 elections and his degree of influence within the party.", "Reversing a long-anemic pattern of growth will also likely prove challenging. Ramaphosa has made some progress, eliciting substantial investment pledges, initiating a youth employment scheme, and pushing reforms that may allow SOEs to contribute substantially more to economic growth. Many of the reasons for the weak growth, however, are structural, long-term phenomena that are not amenable to quick fixes. Nevertheless, South Africa's economy is large and diversified, and may have the capacity to expand moderately in the coming years, notably if the large pool of unemployed can be better integrated into the economy.", "If South Africa can make positive economic progress, there is potential for increased international trade, including trade with the United States\u2014although additional U.S. trade restrictions, particularly potential Section 232 tariffs on autos and parts, could hinder trade growth. Because of its market size and economic position, South Africa is well placed to grow as a key U.S. investment and export destination in Africa. This may also be aided by ongoing U.S. government and private sector efforts to expand trade and investment ties\u2014including by tapping opportunities created by South Africa's long-term infrastructure investment efforts.", "There is also possible scope for greater U.S.-African cooperation regarding development in South Africa and the sub-continent more broadly, as demonstrated by South Africa's role as a strategic partner under the Feed the Future and TAP programs. USAID's Power Africa program is based in South Africa and could potentially play a role in helping South Africa to address its electrical sector challenges. South Africa could also provide a source of partnership and potential investment targets for the emergent U.S. International Development Finance Corporation. While there have been occasional strains in U.S.-South African relations on some international issues, South Africa's two-year membership on the U.N. Security Council could also provide a springboard for greater bilateral cooperation on international matters of interest to both countries."], "subsections": []}]}}
{"id": "R45460", "title": "Coastal Zone Management Act (CZMA): Overview and Issues for Congress", "released_date": "2019-01-15T00:00:00", "summary": ["Congress enacted the Coastal Zone Management Act (CZMA; P.L. 92-583, 16 U.S.C. \u00a7\u00a71451-1466) in 1972 and has amended the act 11 times, most recently in 2009. CZMA sets up a national framework for states and territories to consider and manage coastal resources. If a state or territory chooses to develop a coastal zone management program and the program is approved, the state or territory (1) becomes eligible for several federal grants and (2) can perform reviews of federal agency actions in coastal areas (known as federal consistency determination reviews).", "Each level of government plays a role in coastal management under CZMA. At the federal level, the National Oceanic and Atmospheric Administration's (NOAA's) Office for Coastal Management (OCM) in the Department of Commerce implements CZMA's national policies and provisions. OCM administers CZMA under several national programs; the National Coastal Zone Management Program (NCZMP) is the focus of this report. To participate in the NCZMP, states and territories (hereinafter referred to as states) must adhere to guidelines set out in CZMA and related regulations. States determine the details of their coastal management programs (CMPs), including the boundaries of their coastal zones, issues of most interest to the state, and policies to address these issues, among other factors. Local governments then implement the approved CMPs, often through land use regulations.", "The Secretary of Commerce must approve state CMPs. Once the Secretary approves a state's CMP, the state is eligible to receive the NCZMP's benefits and is referred to as a participant in the program (16 U.S.C. \u00a71455). Participation in the NCZMP provides several advantages to participants, including eligibility for federal grant programs and the right to review federal actions for consistency with state coastal policies. Thirty-five states and territories (including states surrounding the Great Lakes, American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the Virgin Islands) are eligible to participate. Although all 35 eligible states have at some point chosen to participate, 34 are currently part of the NCZMP.", "Since 1972, NOAA has allocated over $2 billion in coastal zone management-related grants to eligible coastal states. States have received amounts ranging from $13 million to over $106 million in grant funding, depending on factors such as how long the state has been a part of the NCZMP, the state's size and population, and extent of the state's applications to grant programs.", "CZMA consistency provisions (Section 307) require federal actions that have reasonably foreseeable effects on coastal uses or resources to be consistent with the enforceable policies of a participant's approved CMP. These actions may occur in the state's approved coastal zone or in federal or out-of-state waters (which may cause interstate coastal effects). Federal agencies or applicants proposing to perform these federal actions must submit a consistency determination to the potentially affected participant, certifying that the actions are consistent with state coastal policies and providing participants the opportunity to review their determinations (16 U.S.C. \u00a71456).", "The 116th Congress may consider changes to CZMA. These changes may address issues such as growing population and infrastructure needs and changing environmental conditions along the coast, questions about the effectiveness of CZMA implementation, and expired authorization of appropriations for CZMA grant programs. Some of these concerns were addressed in proposed legislation in the 115th Congress, such as legislation to expand grant programs to cover more topics and affected groups, and may be addressed in the 116th Congress."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Congress enacted the Coastal Zone Management Act (CZMA; P.L. 92-583 , 16 U.S.C. \u00a7\u00a71451-1466) in 1972 and has amended the act 11 times, most recently in 2009. Congress deliberated and passed the act at a time when concern about environmental degradation spurred passage of many of the nation's environmental statutes. CZMA sets up a national framework for states and territories to consider and manage coastal resources. If a state or territory chooses to develop a coastal management program and the program is approved, the state or territory (1) becomes eligible for several federal grants and (2) can perform reviews of federal agency actions in coastal areas (known as federal consistency determination reviews ).", "Since 1972, many of the trends that called congressional attention to coastal management have continued. Over a third of the U.S. population lived in shoreline counties in 2010, with more expected by 2020 as people continue to migrate to coastal areas to take advantage of economic opportunities, retire, and pursue recreational interests. Coastal areas are also home to economic sectors such as fishing, transportation, defense, offshore energy, and tourism and to natural resources such as estuaries, beach systems, and wetlands. The shoreline likely will continue to be affected by pressures to develop and preserve areas, large-scale events (e.g., hurricanes and tsunamis), and long-term changes (e.g., relative sea level, changes in rainfall, wetland loss, and increased temperatures). In addition to responding to these pressures, Congress may continue to consider whether CZMA is being effectively implemented and whether changes should be made to CZMA grant programs. ", "This report provides a review of CZMA with a specific focus on the National Coastal Zone Management Program (NCZMP). The report discusses how and why states and territories may choose to participate in the national program (namely to access federal grant programs and undertake federal consistency determination reviews) and recent issues for Congress. The appendixes include information about amendments to CZMA over time and section-by-section summaries of current CZMA provisions. "], "subsections": []}, {"section_title": "Coastal Zone Management Act", "paragraphs": ["Congress enacted CZMA \"to establish a national policy and develop a national program for the management, beneficial use, protection, and development of the land and water resources of the nation's coastal zones.\" Although CZMA has been amended 11 times ( Appendix A ), the national policies as declared by Congress have stayed relatively consistent over time. They currently include the following six policies:", "1. to preserve, protect, develop, and, if possible, restore or enhance coastal resources; 2. to encourage and assist states and territories to effectively exercise their development and management responsibilities in the coastal zone, giving full consideration to ecological, cultural, historic, and aesthetic values as well as the needs for compatible economic development; 3. to encourage the preparation of special area management plans to protect significant natural resources, support reasonable coastal-dependent economic growth, and improve protection of life and property; 4. to encourage the participation and cooperation of the public, state and local governments, interstate and other regional agencies, and federal agencies to carry out CZMA; 5. to encourage coordination and cooperation with and among appropriate federal, state, and local agencies, and international organizations, in collection, analysis, and dissemination of coastal management information and research; and 6. to respond to changing circumstances affecting the coastal environment and resources and their management by encouraging states and territories to consider ocean uses that may affect the coastal zone.", "Under CZMA, each level of government plays a role in coastal management. At the federal level, the National Oceanic and Atmospheric Administration's (NOAA's) Office for Coastal Management (OCM) in the Department of Commerce (DOC) implements CZMA's national policies and provisions. To participate in the NCZMP, states must adhere to guidelines as set in statute and related regulations. States and territories, however, determine the details of their coastal management programs (CMPs), including the boundaries of their coastal zones, issues of most interest to the state, and policies to address these issues, among other factors. Local governments implement the approved CMPs, often through land use regulations. "], "subsections": []}, {"section_title": "National Coastal Zone Management Program", "paragraphs": ["OCM administers CZMA provisions under four national programs: NCZMP, National Estuarine Research Reserve System (NERRS), and Digital Coast. This report focuses on the NCZMP. The NCZMP encourages interested coastal states and territories (hereinafter referred to as states ) to work with NOAA to develop and implement coastal zone management programs. To join, states must develop CMPs pursuant to CZMA and federal regulations. States that join the NCZMP are eligible for several federal grants and have the right to review federal actions for consistency with state coastal policies."], "subsections": [{"section_title": "How States and Territories Become Part of the NCZMP", "paragraphs": ["If a state chooses to become part of the NCZMP, it must develop a CMP pursuant CZMA Section 306 and NOAA regulations. CMPs must contain \"a broad class of policies for ... resource protection, management of coastal development, and simplification of governmental processes.\" ", "The Secretary of Commerce (the Secretary) must conclude that the state has completed certain tasks (e.g., included required program elements and coordinated with local and regional agencies) to approve the CMP. Once the Secretary approves the state's CMP, the state is eligible to receive the NCZMP's benefits and is referred to as a participant of the national program. The Secretary is expected to evaluate participants at least once every three years to determine whether they are working toward their stated plans. ", "Thirty-five states and territories (including states surrounding the Great Lakes, American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the Virgin Islands) are eligible to participate. Although all 35 eligible states and territories have at some point chosen to participate, 34 are currently part of the NCZMP. "], "subsections": []}, {"section_title": "Why States and Territories May Choose to Join the NCZMP", "paragraphs": ["Participation in the NCZMP provides various benefits to participants, including access to several federal grant programs and the right to review federal actions for consistency with state coastal policies. These provisions have been mainstays of CZMA since its development and enactment. "], "subsections": [{"section_title": "Access to Federal Grant Programs", "paragraphs": ["Coastal states or territories with approved CMPs are eligible to apply for federal grants for coastal zone management. Grant programs have changed over time to reflect congressional priorities and have included grants for program development, coastal energy impacts, and research and technical assistance. Currently, CZMA authorizes the Secretary of Commerce to provide grants related to program administration (Section 306), coastal resource improvement (Section 306A), coastal and estuarine land conservation (Section 307A), coastal enhancement objectives (Section 309), technical assistance (Section 310), and coastal nonpoint pollution control (Section 6217) ( Table 1 ). ", "Since 1972, NOAA has allocated over $2 billion in coastal zone management-related grants to eligible coastal states and territories ( Figure 1 ). NOAA disbursed the majority of the funds under Sections 306 and 306A grant programs. All 35 coastal states and territories received a portion of the funds since 1972, including Alaska, which is not currently a part of the NCZMP. States have received amounts ranging from $13 million to over $106 million in grant funding, depending on factors such as how long the state has been a part of the NCZMP, the state's size and population, and the extent of its success in competitive grant programs.", "In FY2017, Congress appropriated $85 million to NOAA for coastal management grants. Of that total, NOAA allocated nearly $58 million for Section 306 grants, with smaller amounts awarded for Sections 306A, 309, and 310 grants or withdrawn via government-wide rescissions and Department of Commerce NOAA assessments. The current CZMA grant program authorizations of appropriations have expired, but Congress has continued to fund the programs (see \" Authorization of Appropriations for CZMA Grant Programs \" for a longer discussion of the topic). "], "subsections": []}, {"section_title": "Federal Consistency Determination Review", "paragraphs": ["CZMA Section 307 requires federal actions that have reasonably foreseeable effects on coastal uses or resources to be consistent with the enforceable policies of a participant's approved CMP. These actions may occur in the state's approved coastal zone or in federal or out-of-state waters (which may cause interstate coastal effects). Federal agencies or applicants proposing to perform these federal actions must submit a consistency determination to the potentially affected participant to consider whether the actions are consistent with state coastal policies.", "Legislation and NOAA regulation have defined several terms related to consistency review, including the following:", "Coastal zone is defined as the coastal waters and adjacent shorelands, strongly influenced by each other, and includes islands, transitional and intertidal areas, salt marshes, wetlands, and beaches. The zone extends in Great Lakes waters to the international boundary and in other areas seaward to the outer limit of the state title and ownership under various acts, such as the Submerged Lands Act. The zone extends inland from the shorelines only to the extent necessary to control shorelands and to control those geographical areas that are likely to be affected by or vulnerable to sea level rise. Identification of the coastal zone boundaries is a required part of an approved CMP. ", "Effect on coastal use or resource refers to \"any reasonable foreseeable effect on any coastal use or resource resulting from a federal agency activity or federal license or permit activity,\" including federal assistance to state and local governments. Effects may be environmental or impact coastal use; may be direct or secondary; and may result from the incremental impact of past, current, or future actions. The determination of whether the action will have a reasonably foreseeable effect is also known as the effects test.", "Enforceable policies are \"state policies which are legally binding through constitutional provisions, laws, regulations, land use plans, ordinances, or judicial or administrative decisions, by which a state exerts control over private and public land and water uses and natural resources of the coastal zone.\" ", "Federal actions include federal agency activities, federal license or permit activities, outer continental shelf plans, and federal assistance to state and local governments. NOAA requires participants to submit lists of federal actions that are subject to consistency determination reviews and their general geographic areas. ", "Interstate coastal effect refers to any reasonably foreseeable effect resulting from a federal action occurring in one state on any coastal use or resource of another state that has an approved CMP. Effects may be environmental or impact coastal use; may be direct or secondary; and may result from the incremental impact of past, current, or future actions. A state must identify a list of federal actions in other states for approval by NOAA to perform interstate consistency determination reviews. ", "Participant reviews of federal actions are context-specific and depend on the location and action in question, with different rights and responsibilities assigned to the federal agency, applicants, and participants involved. Details of the action\u2014such as which party determines the foreseeable effects, the length of the participant review period, the effect of a participant's objection to the action, and the available conflict resolution or appeals options\u2014depend on the federal action in question ( Table 2 ).", "Resolutions to participant objections to consistency determinations depend on the federal action in question, as follows:", "Federal agency activities and development projects: If a participant objects to a federal agency's consistency determination, the participant may request mediation from the Secretary of Commerce or OCM. Regardless of the mediation outcomes, the federal agency may proceed with its activities or development projects if the agency provides a legal basis for being consistent to the maximum extent practicable , or the agency has concluded that its proposed action is fully consistent with the participant's enforceable policies. Federal license or permit activities, outer continental shelf plans, and federal assistance to state and local governments: If the participant objects to the consistency certification, the federal agency cannot authorize the action unless the Secretary of Commerce overrides the objection. The applicant may appeal to the Secretary, who then will review the administrative record and may override a participant's objection if he or she finds that the action is consistent with the objectives of CZMA or is necessary for national security. For example, in 2008, the Secretary of Commerce overrode Maryland's objection to an applicant's consistency determination, finding that \"the project [was] consistent with the objectives of CZMA.\" ", "According to NOAA, participants review thousands of federal consistency determination each year, with more than half of the reviews being for federal license or permit activities. Remaining reviews are, in descending order, federal agency activities and development projects, federal financial assistance activities, and outer continental shelf plans. Over time, participants have concurred with 93% to 95% of the federal consistency determinations they have reviewed. The high concurrence rate may indicate that participants, federal agencies, and applicants often have negotiated project modifications or alternatives before the formal review process.", "Since the first CMP was approved in 1978, 45 consistency decisions have been subject to secretarial appeals, most recently in 2014 ( Figure 2 ). Of the 45 appeals, the Secretary overrode participant objections in 14 cases and agreed with the participant in the other 31 cases. An additional 65 appeals have been settled or withdrawn after they reached the secretarial level but before a determination was made, and 33 additional requests for appeals were dismissed or overridden on procedural grounds. As of April 2018, there were no appeals pending before the Secretary of Commerce. "], "subsections": []}]}]}, {"section_title": "Issues for Congress", "paragraphs": ["Congress may continue to consider the effects of natural and man-made changes on the coast, the effectiveness of CZMA implementation, and the expired CZMA grant program authorizations of appropriations. These concerns have been considered in previous Congresses and/or have been recently raised by government agencies and various coastal stakeholders. "], "subsections": [{"section_title": "Changes Along the Coast", "paragraphs": ["Congress may continue to examine CZMA in light of continued population and infrastructure growth along the coast, as well as coastal hazards such as flooding and erosion. According to the 2010 census, coastal shoreline counties were home to over 123 million people (39% of the U.S. population), and were expected to grow by another 10 million people by 2020. The ocean and Great Lakes economy accounted for 2.3% of total employment and contributed $320 billion to the total U.S. gross domestic product in 2015. Much of the population and infrastructure growth has occurred in shoreline communities amid ecosystems such as beaches, reefs, sea grasses, wetlands, estuaries, and deltas. The combination of built and natural systems has been and likely will continue to be affected by changes in sea level (and its impacts, such as higher tides, greater storm surge, saltwater intrusion, erosion, etc.), local rainfall, increasing water and air temperatures, and ocean acidification, among other factors. ", "Several bills to amend CZMA would have addressed some of these changes. In the 115 th Congress, Members proposed bills focused on climate change preparedness or adaptation (e.g., H.R. 3533 and H.R. 4426 ) and \"working waterfronts\" (e.g., H.R. 1176 ). Other proposals would have expanded CZMA grant programs to locations (the District of Columbia, e.g., S. 3146 and H.R. 2540 ) and groups (Indian tribes, e.g., H.R. 2607 ) currently not eligible to apply to the grant programs. In previous Congresses, other bills proposed additional grant programs related to offshore activities, such as renewable energy siting surveys (e.g., H.R. 1690 , 111 th Congress), responses to oil spills and other disasters related to outer continental shelf energy activity (e.g., H.R. 3757 , 112 th Congress), aquaculture siting (e.g., H.R. 2046 , 104 th Congress), harmful algal blooms (e.g., H.R. 4235 , 105 th Congress), and Great Lakes restoration (e.g., S. 2337 , 108 th Congress). Some scholars have argued for substantial revision or improvements to CZMA to account for changes along the coast. "], "subsections": []}, {"section_title": "Effectiveness of CZMA Implementation", "paragraphs": ["Congress may examine how NOAA has implemented CZMA and whether changes to the agency, the law, or the law's implementation are necessary. The effectiveness of CZMA implementation, specifically the NCZMP, has been evaluated since the law's enactment by a variety of entities, including the Department of Commerce inspector general, the Office of Management and Budget, the Government Accountability Office (GAO), and scholars. Evaluations have noted a range of issues, from monitoring and measuring the success of the program as a whole to issues concerning specific grant programs. ", "GAO reported several issues with NOAA's implementation of CZMA and program evaluation in a 2014 report, including limitations to the coastal zone management performance measurement system, weaknesses in NOAA's method for selecting stakeholders for state program evaluations, and the agency's limited use of collected performance data. NOAA agreed with the recommendations. It is unclear whether NOAA has completed changes to address GAO's recommendations fully. In a separate 2016 study, GAO surveyed state coastal zone managers about the actions NOAA was taking under CZMA to support state efforts to make marine coastal ecosystems more resilient to climate change. GAO found that state coastal zone managers \"generally had positive views of the actions NOAA [was] taking.\"", "Some have argued that the implementation of some CZMA programs has been inadequate. For example, some have questioned whether Section 6217 provisions have been properly implemented. Section 6217 of the Coastal Zone Reauthorization Amendments Act ( P.L. 101-508 ) amended CZMA to establish the Coastal Nonpoint Pollution Control Program (CNPCP). The CNPCP requires coastal states with approved CMPs to reduce polluted runoff to coastal waters through coastal nonpoint pollution control programs that include specific land-based measures. NOAA and the Environmental Protection Agency (EPA) jointly administer the CNPCP. Under Section 6217(c)(3), participants that fail to submit \"approvable programs\" lose a portion of their allotted funding under CZMA Section 306. Most participants received conditional approval between 1997 and 1998, and the majority have since received final approval. Several states have yet to receive final approval, including Alabama, Hawaii, Illinois, Indiana, Louisiana, Michigan, Mississippi, Ohio, Oregon, Texas, and Washington. In 2009 and 2016, a private organization sued NOAA and EPA for continuing to grant funds to Oregon and Washington, respectively. According to NOAA, the agency and EPA currently are working with the conditionally approved states to address the programs' remaining conditions. "], "subsections": []}, {"section_title": "Authorization of Appropriations for CZMA Grant Programs", "paragraphs": ["Although Congress has continued to appropriate funding for CZMA grant programs, the program's authorizations of appropriations have expired. Current CZMA coastal zone management grant programs were last authorized for appropriations in the following years: ", "Section 306 (Administrative Grants): FY1999; Section 306A (Coastal Resource Improvement Grants): FY1999; Section 307A (Coastal and Estuarine Land Conservation Program): FY2013; Section 309 (Coastal Zone Enhancement Grants): FY1999; and Section 6217 (Coastal Nonpoint Pollution Control Program): FY1995.", "Since 1995, two pieces of legislation have been enacted to reauthorize appropriations for a CZMA grant program ( P.L. 104-150 in 1996, which reauthorized appropriations for Sections 306, 306A, and 309 grant programs, and P.L. 111-11 in 2009, which established and authorized appropriations for the Section 307A grant program). Introduced pieces of legislation have proposed to reauthorize and increase appropriations for Sections 306, 306A, and 309 grant programs (e.g., S. 1142 in the 104 th Congress and S. 3038 in the 114 th Congress) or add additional authorizations for new grant programs (e.g., H.R. 3533 in the 115 th Congress and H.R. 1690 in the 111 th Congress). ", "Congress appropriated $75 million to the NCZMP for \"coastal zone management grants\" in FY2018, despite the expired authorizations of appropriations. In FY2019, as in FY2018, NOAA has proposed to eliminate all coastal management grants. According to the FY2019 budget proposal, NOAA would \"continue to support states' participation in the National CZM program by reviewing and supporting implementation of states' management plans, supporting Federal consistency reviews, and providing technical assistance services.\" ", "Some stakeholders have contended that financial assistance to states from the NCZMP is important and more funding is necessary. For example, in a 2016 GAO survey, state coastal zone managers stated that \"financial assistance provided by NOAA [was] critical\" and that \"the amount of financial assistance available [was] insufficient to address states' needs in implementing projects.\" NOAA officials also have stated that financial assistance for coastal zone management is in high demand. For example, the NOAA Regional Coastal Resilience grant program, administered under Section 310, received 132 applications requesting $105 million in FY2015; $4.5 million was available for grants. Others argue that funding should not be appropriated to the grant programs, as noted above, making the authorizations for appropriations no longer necessary. ", "Appendix A. Coastal Zone Management Act of 1972 (CZMA) and Its Amendments", "Appendix B. Section-by-Section Summaries"], "subsections": []}]}]}}
{"id": "RS20530", "title": "FHA-Insured Home Loans: An Overview", "released_date": "2019-01-16T00:00:00", "summary": ["The Federal Housing Administration (FHA), an agency of the Department of Housing and Urban Development (HUD), was created by the National Housing Act of 1934. FHA insures private lenders against the possibility of borrowers defaulting on mortgages that meet certain criteria, thereby expanding the availability of mortgage credit beyond what may be available otherwise. If the borrower defaults on the mortgage, FHA is to repay the lender the remaining amount owed.", "A household that obtains an FHA-insured mortgage must meet FHA's eligibility and underwriting standards, including showing that it has sufficient income to repay a mortgage. FHA requires a minimum down payment of 3.5% from most borrowers, which is lower than the down payment required for many other types of mortgages. FHA-insured mortgages cannot exceed a statutory maximum mortgage amount, which varies by area and is based on area median house prices but cannot exceed a specified ceiling in high-cost areas. (The ceiling is set at $726,525 in high-cost areas in calendar year 2019.) Borrowers are charged fees, called mortgage insurance premiums, in exchange for the insurance.", "In FY2018, FHA insured over 1 million new mortgages (including both home purchase and refinance mortgages) with a combined principal balance of $209 billion.", "FHA's share of the mortgage market tends to vary with economic conditions and other factors. In the aftermath of the housing market turmoil that began around 2007 and a related contraction of mortgage lending, FHA insured a larger share of mortgages than it had in the preceding years. Its overall share of the mortgage market increased from about 3% in calendar year 2005 to a peak of 21% in 2009. Since that time, FHA's share of the mortgage market has decreased somewhat, though it remains higher than it was in the early 2000s. In calendar year 2017, FHA's overall share of the mortgage market was about 17%.", "FHA-insured mortgages, like all mortgages, experienced increased default rates during the housing downturn that began around 2007, leading to concerns about the stability of the FHA insurance fund for single-family mortgages, the Mutual Mortgage Insurance Fund (MMI Fund). In response to these concerns, FHA adopted a number of policy changes in an attempt to limit risk to the MMI Fund. These changes have included raising the fees that it charges and making changes to certain eligibility criteria for FHA-insured loans."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Federal Housing Administration (FHA) is an agency of the Department of Housing and Urban Development (HUD) that insures private mortgage lenders against the possibility of borrowers defaulting on certain mortgage loans. If a mortgage borrower defaults on a mortgage\u2014that is, does not repay the mortgage as promised\u2014and the home goes to foreclosure, FHA is to pay the lender the remaining amount that the borrower owes. FHA insurance protects the lender, rather than the borrower, in the event of borrower default; a borrower who defaults on an FHA-insured mortgage will still experience the consequences of foreclosure. To be eligible for FHA insurance, the mortgage must be originated by a lender that has been approved by FHA, and the mortgage and the borrower must meet certain criteria.", "FHA is one of three government agencies that provide insurance or guarantees on certain home mortgages made by private lenders, along with the Department of Veterans Affairs (VA) and the United States Department of Agriculture (USDA). Of these federal mortgage insurance programs, FHA is the most broadly targeted. Unlike VA- and USDA-insured mortgages, the availability of FHA-insured mortgages is not limited by factors such as veteran status, income, or whether the property is located in a rural area. However, the availability or attractiveness of FHA-insured mortgages may be limited by other factors, such as the maximum mortgage amount that FHA will insure, the fees that it charges for insurance, and its eligibility standards. ", "This report provides background on FHA's history and market role and an overview of the basic eligibility and underwriting criteria for FHA-insured home loans. It also provides data on the number and dollar volume of mortgages that FHA insures, along with data on FHA's market share in recent years. It does not go into detail on the financial status of the FHA mortgage insurance fund. For information on FHA's financial position, see CRS Report R42875, FHA Single-Family Mortgage Insurance: Financial Status of the Mutual Mortgage Insurance Fund (MMI Fund) ."], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "History", "paragraphs": ["The Federal Housing Administration was created by the National Housing Act of 1934, during the Great Depression, to encourage lending for housing and to stimulate the construction industry. Prior to the creation of FHA, few mortgages exceeded 50% of the property's value and most mortgages were written for terms of five years or less. Furthermore, mortgages were typically not structured to be fully repaid by the end of the loan term; rather, at the end of the five-year term, the remaining loan balance had to be paid in a lump sum or the mortgage had to be renegotiated. During the Great Depression, lenders were unable or unwilling to refinance many of the loans that became due. Thus, many borrowers lost their homes through foreclosure, and lenders lost money because property values were falling. Lenders became wary of the mortgage market.", "FHA institutionalized a new idea: 20-year mortgages on which the loan would be completely repaid at the end of the loan term. If borrowers defaulted, FHA insured that the lender would be fully repaid. By standardizing mortgage instruments and setting certain standards for mortgages, the creation of FHA was meant to instill confidence in the mortgage market and, in turn, help to stimulate investment in housing and the overall economy. Eventually, lenders began to make long-term mortgages without FHA insurance if borrowers made significant down payments. Over time, 15- and 30-year mortgages have become standard mortgage products. ", "When the Department of Housing and Urban Development (HUD) was created in 1965, FHA became part of HUD. Today, FHA is intended to facilitate access to affordable mortgages for some households who otherwise might not be well-served by the private market. Furthermore, it facilitates access to mortgages during economic or mortgage market downturns by continuing to insure mortgages when the availability of mortgage credit has otherwise tightened. For this reason, it is said to play a \"countercyclical\" role in the mortgage market\u2014that is, it tends to insure more mortgages when the mortgage market or overall economy is weak, and fewer mortgages when the economy is strong and other types of mortgages are more readily available. "], "subsections": []}, {"section_title": "Current Role", "paragraphs": [], "subsections": [{"section_title": "Facilitating Access to Mortgage Credit", "paragraphs": ["Some prospective homebuyers may have the income to sustain monthly mortgage payments but lack the funds to make a large down payment or otherwise have difficulty obtaining a mortgage. Borrowers with small down payments, weaker credit histories, or other characteristics that increase their credit risk might find it difficult to obtain a mortgage at an affordable interest rate or to qualify for a mortgage at all. This has raised a policy concern that some borrowers with the income to repay a mortgage might be unable to obtain affordable mortgages. FHA mortgage insurance is intended to make lenders more willing to offer affordable mortgages to these borrowers by insuring the lender against the possibility of borrower default. ", "FHA-insured loans have lower down payment requirements than most conventional mortgages. (Conventional mortgages are mortgages that are not insured by FHA or guaranteed by another government agency, such as VA or USDA. ) Because saving for a down payment is often the biggest barrier to homeownership for first-time homebuyers and lower- or moderate-income homebuyers, the smaller down payment requirement for FHA-insured loans may allow some households to obtain a mortgage earlier than they otherwise could. (Borrowers with down payments of less than 20% could also obtain non-FHA mortgages with private mortgage insurance. See the nearby text box on \"FHA and Private Mortgage Insurance.\") FHA-insured mortgages also have less stringent requirements related to credit history than many conventional loans. This might make FHA-insured mortgages attractive to borrowers without traditional credit histories or with weaker credit histories, who would either find it difficult to take out a mortgage absent FHA insurance or may find it more expensive to do so.", "FHA-insured mortgages play a particularly large role for first-time homebuyers, low- and moderate-income households, and minorities. For example, 83% of FHA-insured mortgages made to purchase a home (rather than to refinance an existing mortgage) in FY2018 were obtained by first-time homebuyers. Over one-third of all FHA loans (both purchase and refinance loans) were obtained by minority households, and FHA-insured mortgages accounted for about 57% of all forward mortgages made to low- or moderate-income borrowers during the year. ", "Since FHA-insured mortgages are often obtained by borrowers who cannot make large down payments or those with weaker credit histories, some have questioned whether FHA-insured mortgages are similar to subprime mortgages. Like subprime mortgages, FHA-insured mortgages are often obtained by borrowers with lower credit scores, though some borrowers with higher credit scores also obtain FHA-insured mortgages. However, FHA-insured mortgages are prohibited from carrying the full range of features that many subprime mortgages could carry. For example, FHA-insured loans must be fully documented, and they cannot include features such as negative amortization. (FHA mortgages can include adjustable interest rates.) Some of these types of features appear to have contributed to high default and foreclosure rates on subprime mortgages. Nevertheless, some have suggested that FHA-insured mortgages are too risky, and that they can harm borrowers by providing mortgages that often have a higher likelihood of default than other mortgages due to combinations of risk factors such as low down payments and lower credit scores. "], "subsections": []}, {"section_title": "Countercyclical Role", "paragraphs": ["Traditionally, FHA plays a countercyclical role in the mortgage market, meaning that it tends to insure more mortgages when mortgage credit markets are tight and fewer mortgages when mortgage credit is more widely available. A major reason for this is that FHA continues to insure mortgages that meet its standards even during market downturns or in regions experiencing economic turmoil. When the economy is weak and lenders and private mortgage insurers tighten credit standards and reduce lending activity, FHA-insured mortgages may be the only mortgages available to some borrowers, or may have more favorable terms than mortgages that lenders are willing to make without FHA insurance. When the economy is strong and mortgage credit is more widely available, many borrowers may find it easier to qualify for affordable conventional mortgages. "], "subsections": []}]}]}, {"section_title": "Features of FHA-Insured Mortgages", "paragraphs": ["This section briefly describes some of the major features of FHA-insured mortgages for purchasing or refinancing a single-family home. Single-family homes are defined as properties with one to four separate dwelling units. "], "subsections": [{"section_title": "Eligibility and Underwriting Guidelines", "paragraphs": ["FHA-insured loans are available to borrowers who intend to be owner-occupants and who can demonstrate the ability to repay the loan according to the terms of the contract. FHA-insured loans must be underwritten in accordance with accepted practices of prudent lending institutions and FHA requirements. Lenders must examine factors such as the applicant's credit, financial status, monthly shelter expenses, funds required for closing expenses, effective monthly income, and debts and obligations. In general, individuals who have previously been subject to a mortgage foreclosure are not eligible for FHA-insured loans for at least three years after the foreclosure.", "As a general rule, the applicant's prospective mortgage payment should not exceed 31% of gross effective monthly income. The applicant's total obligations, including the proposed housing expenses, should not exceed 43% of gross effective monthly income. If these ratios are not met, the borrower may be able to present the presence of certain compensating factors, such as cash reserves, in order to qualify for an FHA-insured loan.", "Since October 4, 2010, FHA has required a minimum credit score of 500, and has required higher down payments from borrowers with credit scores below 580 than from borrowers with credit scores above that threshold. See the \" Down Payment \" section for more information on down payment requirements for FHA-insured loans."], "subsections": []}, {"section_title": "Owner Occupancy", "paragraphs": ["In general, borrowers must intend to occupy the property as a principal residence. "], "subsections": []}, {"section_title": "Eligible Loan Purposes", "paragraphs": ["FHA-insured loans may be used to purchase one-family detached homes, townhomes, rowhouses, two- to four-unit buildings, manufactured homes and lots, and condominiums in developments approved by FHA. FHA-insured loans may also be obtained to build a home; to repair, alter, or improve a home; to refinance an existing home loan; to simultaneously purchase and improve a home; or to make certain energy efficiency or weatherization improvements in conjunction with a home purchase or mortgage refinance."], "subsections": []}, {"section_title": "Loan Term", "paragraphs": ["FHA-insured mortgages may be obtained with loan terms of up to 30 years. "], "subsections": []}, {"section_title": "Interest Rates", "paragraphs": ["The interest rate on an FHA-insured loan is negotiated between the borrower and lender. The borrower has the option of selecting a loan with an interest rate that is fixed for the life of the loan or one on which the rate may be adjusted annually."], "subsections": []}, {"section_title": "Down Payment", "paragraphs": ["FHA requires a lower down payment than many other types of mortgages. Under changes made by the Housing and Economic Recovery Act of 2008 (HERA, P.L. 110-289 ), borrowers are required to contribute at least 3.5% in cash or its equivalent to the cost of acquiring a property with an FHA-insured mortgage. (Prior law had required borrowers to contribute at least 3% in cash or its equivalent.) Prohibited sources of the required funds include the home seller, any entity that financially benefits from the transaction, and any third party that is directly or indirectly reimbursed by the seller or by anyone that would financially benefit from the transaction. HUD has interpreted the 3.5% cash contribution as a down payment requirement and has specified that contributions toward closing costs cannot be counted toward it. ", "Since October 4, 2010, FHA has required a 10% down payment from borrowers with credit scores between 500 and 579, while borrowers with credit scores of 580 or above are still required to make a down payment of at least 3.5%. FHA no longer insures loans made to borrowers with credit scores below 500. "], "subsections": []}, {"section_title": "Maximum Mortgage Amount", "paragraphs": ["There is no income limit for borrowers seeking FHA-insured loans. However, FHA-insured mortgages cannot exceed a maximum mortgage amount set by law. The maximum mortgage amounts allowed for FHA-insured loans vary by area, based on a percentage of area median home prices. Different limits are in effect for one-unit, two-unit, three-unit, and four-unit properties. The limits are subject to a statutory floor and ceiling; that is, the maximum mortgage amount that FHA will insure in a given area cannot be lower than the floor, nor can it be higher than the ceiling. ", "In 2008, Congress temporarily increased the maximum mortgage amounts in response to turmoil in the housing and mortgage markets, with the intention of allowing more households to qualify for FHA-insured mortgages during a period of tighter credit availability. New permanent maximum mortgage amounts were later established by the Housing and Economic Recovery Act of 2008. The maximum mortgage amounts established by HERA were higher than the previous permanent limits, but in many cases lower than the temporarily increased limits. However, the higher temporary limits were extended for several years, until they expired at the end of calendar year 2013. ", "Since January 1, 2014, the maximum mortgage amounts have been set at the permanent HERA levels. For a one-unit home, HERA established the maximum mortgage amounts at 115% of area median home prices, with a floor set at 65% of the Freddie Mac conforming loan limit and a ceiling set at 150% of the Freddie Mac conforming loan limit. For calendar year 2019, the floor is $314,827 and the ceiling is $726,525. (That is, FHA will insure mortgages with principal balances up to $314,827 in all areas of the country. In higher-cost areas, it will insure mortgages with principal balances up to 115% of the area median home price, up to a cap of $726,525 in the highest-cost areas.) These maximum mortgage amounts, and the maximum mortgage amounts for 2-4 unit homes, are shown in Table 1 ."], "subsections": []}, {"section_title": "Mortgage Insurance Fees (Premiums)", "paragraphs": ["Borrowers of FHA-insured loans pay an up-front mortgage insurance premium (MIP) and annual mortgage insurance premiums in exchange for FHA insurance. These premiums are set as a percentage of the loan amount. The maximum amounts that FHA is allowed to charge for the annual and the upfront premiums are set in statute. However, since these are maximum amounts, HUD has the discretion to set the premiums at lower levels. "], "subsections": [{"section_title": "Up-Front Mortgage Insurance Premiums", "paragraphs": ["The maximum up-front premium that FHA may charge is 3% of the mortgage amount, or 2.75% of the mortgage amount for a first-time homebuyer who has received homeownership counseling. Currently, FHA is charging the same up-front premiums to first-time homebuyers who receive homeownership counseling and all other borrowers. ", "Since April 9, 2012, HUD has set the up-front premium at 1.75% of the loan amount, whether or not the borrower is a first-time homebuyer who received homeownership counseling. This premium applies to most single-family mortgages."], "subsections": []}, {"section_title": "Annual Mortgage Insurance Premiums", "paragraphs": ["The amount of the maximum annual premium varies based on the loan's initial loan-to-value ratio. For most loans, (1) if the loan-to-value ratio is above 95%, the maximum annual premium is 1.55% of the loan balance, and (2) if the loan-to-value ratio is 95% or below, the maximum annual premium is 1.5% of the loan balance. ", "FHA increased the actual annual premiums that it charges several times in recent years in order to bring more money into the FHA insurance fund and ensure that it has sufficient funds to pay for defaulted loans. However, in January 2015, FHA announced a decrease in the annual premium for most single-family loans. For most FHA case numbers assigned on or after January 26, 2015, the annual premiums are 0.85% of the outstanding loan balance if the initial loan-to-value ratio is above 95% and 0.80% of the outstanding loan balance if the initial loan-to-value ratio is 95% or below. This is a decrease from 1.35% and 1.30%, respectively, which is what FHA had been charging from April 1, 2013, until January 26, 2015. These premiums apply to most single-family mortgages; FHA charges different annual premiums in certain circumstances, including for loans with shorter loan terms or higher principal balances.", " Table 2 shows the up-front and annual mortgage insurance premiums that have been in effect for most loans since January 26, 2015. "], "subsections": []}, {"section_title": "Premium Refunds and Cancellations", "paragraphs": ["In the past, if borrowers prepaid their loans, they may have been due refunds of part of the up-front insurance premium that was not \"earned\" by FHA. The refund amount depended on when the mortgage closed and declined as the loan matured. The Consolidated Appropriations Act 2005 ( P.L. 108-447 ) amended the National Housing Act to provide that, for mortgages insured on or after December 8, 2004, borrowers are not eligible for refunds of up-front mortgage insurance premiums except when borrowers are refinancing existing FHA-insured loans with new FHA-insured loans. After three years, the entire up-front insurance premium paid by borrowers who refinance existing FHA-insured loans with new FHA-insured loans is considered \"earned\" by FHA, and these borrowers are not eligible for any refunds. ", "The annual mortgage insurance premiums are not refundable. However, beginning with loans closed on or after January 1, 2001, FHA had followed a policy of automatically cancelling the annual mortgage insurance premium when, based on the initial amortization schedule, the loan balance reached 78% of the initial property value. However, for loans with FHA case numbers assigned on or after June 3, 2013, FHA will continue to charge the annual mortgage insurance premium for the life of the loan for most mortgages. This change responded to concerns about the financial status of the FHA insurance fund. FHA has stated that, since it continues to insure the entire remaining mortgage amount for the life of the loan, and since premiums were cancelled on the basis of the loan amortizing to a percentage of the initial property value rather than the current value of the home, FHA has at times had to pay insurance claims on defaulted mortgages where the borrowers were no longer paying annual mortgage insurance premiums."], "subsections": []}]}, {"section_title": "Options for FHA-Insured Loans in Default", "paragraphs": ["An FHA-insured mortgage is considered delinquent any time a payment is due and not paid. Once the borrower is 30 days late in making a payment, the mortgage is considered to be in default. In general, mortgage servicers may initiate foreclosure on an FHA-insured loan when three monthly installments are due and unpaid, and they must initiate foreclosure when six monthly installments are due and unpaid, except when prohibited by law. ", "A program of loss mitigation strategies was authorized by Congress in 1996 to minimize the number of FHA loans entering foreclosure, and has since been revised and expanded to include additional loss mitigation options. Prior to initiating foreclosure, mortgage servicers must attempt to make contact with borrowers and evaluate whether they qualify for any of these loss mitigation options. The options must be considered in a specific order, and specific eligibility criteria apply to each option. Some loss mitigation options, referred to as home retention options, are intended to help borrowers remain in their homes. Other loss mitigation options, referred to as home disposition options, will result in the borrower losing his or her home, but avoiding some of the costs of foreclosure. The loss mitigation options that servicers are instructed to pursue on FHA-insured loans are summarized in Table 3 . ", "Additional loss mitigation options are available for certain populations of borrowers. For example, defaulted borrowers in military service may be eligible to suspend the principal portion of monthly payments and pay only interest for the period of military service, plus three months. On resumption of payment, loan payments are adjusted so that the loan will be paid in full according to the original amortization. Certain loss mitigation options are also available in areas affected by presidentially declared major disasters. "], "subsections": []}]}, {"section_title": "Program Funding", "paragraphs": ["FHA's single-family mortgage insurance program is funded through FHA's Mutual Mortgage Insurance Fund (MMI Fund). Cash flows into the MMI Fund primarily from insurance premiums and proceeds from the sale of foreclosed homes. Cash flows out of the MMI Fund primarily to pay claims to lenders for mortgages that have defaulted. ", "This section provides a brief overview of (1) how the FHA-insured mortgages insured under the MMI Fund are accounted for in the federal budget and (2) the MMI Fund's compliance with a statutory capital ratio requirement. For more detailed information on the financial status of the MMI Fund, see CRS Report R42875, FHA Single-Family Mortgage Insurance: Financial Status of the Mutual Mortgage Insurance Fund (MMI Fund) . "], "subsections": [{"section_title": "FHA Home Loans in the Federal Budget", "paragraphs": ["The Federal Credit Reform Act of 1990 (FCRA) specifies the way in which the costs of federal loan guarantees, including FHA-insured loans, are recorded in the federal budget. The FCRA requires that the estimated lifetime cost of guaranteed loans (in net present value terms) be recorded in the federal budget in the year that the loans are insured. When the present value of the lifetime cash flows associated with the guaranteed loans is expected to result in more money coming into the account than flowing out of it, the program is said to generate negative credit subsidy. When the present value of the lifetime cash flows associated with the guaranteed loans is expected to result in less money coming into the account than flowing out of it, the program is said to generate positive credit subsidy. Programs that generate negative credit subsidy result in offsetting receipts for the federal government, while programs that generate positive credit subsidy require an appropriation to cover the cost of new loan guarantees. ", "The MMI Fund has historically been estimated to generate negative credit subsidy in the year that the loans are insured and therefore has not required appropriations to cover the expected costs of loans to be insured. The MMI Fund does receive appropriations to cover salaries and administrative contract expenses.", "The amount of money that loans insured in a given year actually earn for or cost the government over the course of their lifetime is likely to be different from the original credit subsidy estimates. Therefore, each year as part of the annual budget process, each prior year's credit subsidy rates are re-estimated based on the actual performance of the loans and other factors, such as updated economic projections. These re-estimates affect the way in which funds are held in the MMI Fund's two primary accounts: the Financing Account and the Capital Reserve Account.\u00a0The Financing Account holds funds to cover \u00a0expected \u00a0future costs of FHA-insured loans. The Capital Reserve Account holds additional funds to cover any additional unexpected future costs. Funds are transferred between the two accounts each year on the basis of the re-estimated credit subsidy rates to ensure that enough is held in the Financing Account to cover updated projections of expected costs of insured loans.\u00a0", "If FHA ever needs to transfer more funds to the Financing Account than it has in the Capital Reserve Account, it can receive funds from Treasury to make this transfer under existing authority and without any additional congressional action. This occurred for the first time at the end of FY2013, when FHA received $1.7 billion from Treasury to make a required transfer of funds between the accounts. The funds that FHA received from Treasury did not need to be spent immediately, but were to be held in the Financing Account and used to pay insurance claims, if necessary, only after the remaining funds in the Financing Account were spent. The MMI Fund has not needed any additional funds from Treasury to make required transfers of funds between the two accounts since that time."], "subsections": []}, {"section_title": "The Capital Ratio", "paragraphs": ["The MMI Fund is also required by statute to maintain a capital ratio of at least 2%, which is intended to ensure that the fund is able to withstand some increases in the costs of loans guaranteed under the insurance fund. The capital ratio measures the amount of funds that the MMI Fund currently has on hand, plus the net present value of the expected future cash flows associated with the mortgages that FHA currently insures (e.g., the amounts it expects to earn through premiums and lose through claims paid). It then expresses this amount as a percentage of the total dollar volume of mortgages that FHA currently insures. In other words, the capital ratio is a measure of the amount of funds that would remain in the MMI Fund after all expected future cash flows on the loans that it currently insures have been realized, assuming that FHA did not insure any more loans going forward.", "Beginning in FY2009, and for several years thereafter, the capital ratio was estimated to be below this mandated 2% level. The capital ratio again exceeded the 2% threshold in FY2015, when it was estimated to be 2.07%. This represented an improvement from an estimated capital ratio of 0.41% at the end of FY2014, and from negative estimated capital ratios at the ends of FY2013 and FY2012. The capital ratio has remained above 2% since that time, and was estimated to be 2.76% in FY2018. ", "A low or negative capital ratio does not in itself trigger any special assistance from Treasury, but it raises concerns that FHA could need assistance in order to continue to hold enough funds in the Financing Account to cover expected future losses. In the years since the housing market turmoil that began around 2007, FHA has taken a number of steps designed to strengthen the insurance fund. These steps have included increasing the mortgage insurance premiums charged to borrowers; strengthening underwriting requirements, such as by instituting higher down payment requirements for borrowers with the lowest credit scores; and increasing oversight of FHA-approved lenders. "], "subsections": []}]}, {"section_title": "Program Activity", "paragraphs": [], "subsections": [{"section_title": "Number of Mortgages Insured", "paragraphs": ["The number of new mortgages insured by FHA in a given year depends on a variety of factors. In general, the number of new mortgages insured by FHA increased during the housing market turmoil (and resulting contraction of mortgage credit) that began around 2007, reaching a peak of 1.8 million mortgages in FY2009 before beginning to decrease somewhat. FY2014 was the only year since FY2007 that FHA insured fewer than 1 million new mortgages. ", "As shown in Table 4 , FHA insured just over 1 million new single-family purchase and refinance mortgages in FY2018. Together, these mortgages had an initial loan balance of $209 billion. About 77% (776,284) of the mortgages were for home purchases, while about 23% (238,325) were for refinancing an existing mortgage. The overall number of mortgages insured by FHA in FY2018 represented a decrease from FY2017, when it insured 1.25 million mortgages. ", "Many FHA-insured mortgages are obtained by first-time homebuyers, lower-and moderate-income homebuyers, and minority homebuyers. Of the home purchase mortgages insured by FHA in FY2018, about 83% were made to first-time homebuyers. Over a third of all mortgages (both for home purchases and refinances) insured by FHA in FY2018 were made to minority borrowers. ", "As shown in Table 5 , at the end of FY2018 FHA was insuring a total of over 8 million single-family loans that together had an outstanding balance of nearly $1.2 trillion. Since it was first established in 1934, FHA has insured a total of over 47.5 million home\u00a0loans."], "subsections": []}, {"section_title": "Market Share", "paragraphs": [], "subsections": [{"section_title": "Measuring Market Share", "paragraphs": ["FHA's share of the mortgage market is the amount of mortgages that are insured by FHA compared to the total amount of mortgages originated or outstanding in a given time period. FHA's market share can be measured in a number of different ways. Therefore, when evaluating FHA's market share, it is important to recognize which of several different figures is being reported.", "First, FHA's share of the mortgage market can be computed as the number of FHA-insured mortgages divided by the total number of mortgages, or as the dollar volume of FHA-insured mortgages divided by the total dollar volume of mortgages. ", "Furthermore, FHA's market share is sometimes reported as a share of all mortgages , and sometimes only as a share of home purchase mortgages (as opposed to both mortgages made to purchase a home and mortgages made to refinance an existing mortgage). ", "A market share figure can be reported as a share of all mortgages originated within a specific time period , such as a given year, or as a share of all mortgages outstanding at a point in time , regardless of when they were originated. ", "Finally, FHA's market share is sometimes also reported as a share of the total number of mortgages that have some kind of mortgage insurance (including mortgages with private mortgage insurance and mortgages insured by another government agency) rather than as a share of all mortgages regardless of whether or not they have mortgage insurance."], "subsections": []}, {"section_title": "FHA's Share of the Mortgage Market", "paragraphs": ["FHA's market share tends to fluctuate in response to economic conditions and other factors. Between calendar years 1996 and 2002, FHA's market share averaged about 14% of the home purchase mortgage market and about 11% of the overall mortgage market (both home purchase mortgages and refinance mortgages), as measured by number of mortgages. However, by 2005 FHA's market share had fallen to less than 5% of home-purchase mortgages and about 3% of the overall mortgage market. Subsequently, as economic conditions worsened and mortgage credit tightened in response to housing market turmoil that began around 2007, FHA's market share rose sharply, peaking at over 30% of home-purchase mortgages in 2009 and 2010, and over 20% of all mortgages (including both home purchases and refinances) in 2009. In 2017, FHA insured 19.5% of new home purchase mortgages and about 16.7% of new mortgages overall, a small decrease compared to its market share in 2016.", " Figure 1 shows FHA's market share as a percentage of the total number of new mortgages originated for each calendar year between 1996 and 2017. As described, FHA's market share can be measured in a number of different ways. The figure shows FHA's share of (1) all newly originated mortgages, (2) just newly originated purchase mortgages, and (3) just newly originated refinance mortgages. FHA's share of home purchase mortgages tends to be the highest, largely because borrowers who refinance are more likely to have built up a greater amount of equity in their homes and, therefore, might be more likely to obtain conventional mortgages. For the number of mortgages insured by FHA in each year calendar since 1996, see the Appendix .", "The increase in FHA's market share after 2007 was due to a variety of factors related to the housing market turmoil and broader economic instability that was taking place at the time. Housing and economic conditions led many banks to limit their lending activities, including lending for mortgages. Similarly, private mortgage insurance companies, facing steep losses from past mortgages, began tightening the underwriting criteria for mortgages that they would insure. Furthermore, in 2008 Congress increased the maximum mortgage amounts that FHA can insure, which may have made FHA-insured mortgages a more viable option for some borrowers in certain areas.", "More recently, FHA's market share has decreased somewhat from its peak during the housing market turmoil, although it generally remains somewhat higher than it was in the late 1990s and early 2000s. A number of factors may have contributed to this decrease, including lower loan limits in some high-cost areas, higher mortgage insurance premiums, and greater availability of non-FHA-insured mortgages. While not the focus of this report, the appropriate market share for FHA has been a subject of ongoing debate among policymakers. It is likely to continue to be a topic of debate, both in the context of policies specifically related to FHA as well as part of broader debate about the future of the U.S. housing finance system. "], "subsections": [{"section_title": "Appendix. FHA's Market Share Since 1996", "paragraphs": [" Table A-1 provides data on the number of mortgages insured by FHA in each calendar year since 1996, along with FHA's overall market share in each calendar year."], "subsections": []}]}]}]}]}}
{"id": "R45715", "title": "Federal Research and Development (R&D) Funding: FY2020", "released_date": "2019-05-09T00:00:00", "summary": ["President Trump's budget request for FY2020 includes approximately $134.1 billion for research and development (R&D). Several FY2019 appropriations bills had not been enacted at the time the President's FY2020 budget was prepared; therefore, the President's budget included the FY2018 actual funding levels, 2019 annualized continuing resolution (CR) levels, and the FY2020 request levels. On February 15, 2019, Congress enacted the Consolidated Appropriations Act, 2019 (P.L. 116-6). This act included each of the remaining appropriations acts, completing the FY2019 appropriations process. The act also rendered the CR levels identified in the budget no longer relevant, though for some agencies the exact amount of R&D funding in the act remained uncertain. The analysis of government-wide R&D funding in this report compares the President's request for FY2020 to the FY2018 level. For agencies for which the FY2019 R&D funding levels are known, individual agency analyses in this report compare the FY2020 request to FY2019 enacted levels. For agencies for which the FY2019 R&D funding levels remain unknown, individual agency analyses in this report compare the FY2020 request to FY2018 actual levels; when the FY2019 levels become available, these sections will be updated to compare the FY2020 request to FY2019 enacted amounts. As of the date of this report, the House had not completed action on any of the 12 regular appropriations bills for FY2020; nor had the Senate.", "In FY2018, OMB adopted a change to the definition of development, applying a more narrow treatment it describes as \"experimental development.\" This change was intended to harmonize the reporting of U.S. R&D funding data with the approach used by other nations. The new definition is used in this report. Under the new definition of R&D (applied to both FY2018 and FY2020 figures), President Trump is requesting approximately $134.1 billion for R&D for FY2020, a decrease of $1.7 billion (1.2%) from the FY2018 level. Adjusted for inflation, the President's FY2020 R&D request represents a decrease of 5.1% below the FY2018 level.", "Funding for R&D is concentrated in a few departments and agencies. In FY2018, eight federal agencies received 96.3% of total federal R&D funding, with the Department of Defense (DOD, 38.6%) and the Department of Health and Human Services (HHS, 27.2%) combined accounting for nearly two-thirds of all federal R&D funding. The same eight agencies account for 97.2% of the FY2020 request, with DOD accounting for 44.3% and HHS for 25.1%", "Under the President's FY2020 budget request, most federal agencies would see their R&D funding decline. The primary exception is the Department of Defense. DOD's requested R&D funding for FY2020 is $7.1 billion (13.5%) above the FY2018 level. The Departments of Transportation and Veterans Affairs would see small increases in R&D funding. Among the agencies with the largest proposed reductions in R&D funding in the FY2020 budget compared to the FY2018 actual levels are the Department of Energy ($2.8 billion, 15.8%), the National Science Foundation ($567 million, 9.0%), and National Aeronautics and Space Administration ($475 million, 4.0%).", "The President's FY2020 budget request would reduce funding for basic research by $1.5 billion (4.0%), applied research by $4.3 billion (10.5%), and facilities and equipment by $0.5 billion (12.8%), while increasing funding for development by $4.5 billion (8.3%).", "President Trump's FY2020 budget is largely silent on funding levels for multiagency R&D initiatives. However, some activities supporting these initiatives are discussed in agency budget justifications and are reported in the agency analyses in this report.", "The request represents the President's R&D priorities. Congress may opt to agree with none, part, or all of the request, and it may express different priorities through the appropriations process. In recent years, Congress has completed the annual appropriations process after the start of the fiscal year. Completing the process after the start of the fiscal year and the accompanying use of continuing resolutions can affect agencies' execution of their R&D budgets, including the delay or cancellation of planned R&D activities and the acquisition of R&D-related equipment."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The 116 th Congress continues its interest in U.S. research and development (R&D) and in evaluating support for federal R&D activities. The federal government has played an important role in supporting R&D efforts that have led to scientific breakthroughs and new technologies, from jet aircraft and the internet to communications satellites, shale gas extraction, and defenses against disease. In recent years, widespread concerns about the federal debt, recent and projected federal budget deficits, and federal budget caps have driven difficult decisions about the prioritization of R&D, both in the context of the entire federal budget and among competing needs within the federal R&D portfolio. Increases in the budget caps for FY2018 and FY2019 reduced some of the pressure affecting these decisions, but the concerns remain and the caps for FY2020 have not been increased.", "The U.S. government supports a broad range of scientific and engineering R&D. Its purposes include specific concerns such as addressing national defense, health, safety, the environment, and energy security; advancing knowledge generally; developing the scientific and engineering workforce; and strengthening U.S. innovation and competitiveness in the global economy. Most of the R&D funded by the federal government is performed in support of the unique missions of individual funding agencies.", "The federal R&D budget is an aggregation of the R&D activities of these agencies. There is no single, centralized source of R&D funds. Agency R&D budgets are developed internally as part of each agency's overall budget development process. R&D funding may be included either in accounts that are entirely devoted to R&D or in accounts that include funding for non-R&D activities. Agency budgets are subjected to review, revision, and approval by the Office of Management and Budget (OMB) and become part of the President's annual budget submission to Congress. The federal R&D budget is then calculated by aggregating the R&D activities of each federal agency. ", "Congress plays a central role in defining the nation's R&D priorities as it makes decisions about the level and allocation of R&D funding\u2014overall, within agencies, and for specific programs. In recent years, some Members of Congress have expressed concerns about the level of federal spending (for R&D and for other purposes) in light of the federal deficit and debt. Other Members of Congress have expressed support for increased federal spending for R&D as an investment in the nation's future competitiveness. As Congress acts to complete the FY2020 appropriations process, it faces two overarching issues: the amount of the federal budget to be spent on federal R&D and the prioritization and allocation of the available funding.", "This report begins with a discussion of the overall level of R&D in President Trump's FY2020 budget request, followed by analyses of R&D funding in the request from a variety of perspectives and for selected multiagency R&D initiatives. The remainder of the report discusses and analyzes the R&D budget requests of selected federal departments and agencies that, collectively, account for approximately 99% of total federal R&D funding. ", "Selected terms associated with federal R&D funding are defined in the text box on the next page. Appendix A provides a list of acronyms and abbreviations."], "subsections": []}, {"section_title": "The President's FY2020 Budget Request", "paragraphs": ["On March 11, 2019, President Trump released his proposed FY2020 budget. He provided additional details the following week. ", "Completion of the FY2019 budget process on February 15, 2019, more than four months after the start of FY2019, as well as a government shutdown, led to both a delay in the scheduled release of the President's FY2020 budget request, and the use by the Office of Management and Budget of a mix of estimated continuing appropriations act FY2019 funding levels (generally, for agencies whose FY2019 appropriations were enacted after the start of FY2019) and enacted FY2019 funding levels (generally, for agencies whose appropriations were enacted prior to the start of FY2019). As a result, the aggregate (total) FY2019 R&D funding levels for all agencies in the Analytical Perspectives addendum to the President's FY2020 budget are estimated \"using FY 2019 enacted appropriations where available and annualized Continuing Resolution [levels] for agencies without enacted appropriations prior to Feb. 15, 2019.\" With enactment of the remaining FY2019 appropriations acts in the Consolidated Appropriations Act, 2019 (P.L. 116-6), the Administration's estimated aggregate R&D funding level no longer accurately reflects total enacted FY2019 R&D funding. OMB has not issued a document with comprehensive R&D figures for each agency or in aggregate. ", "Therefore, the analysis of government-wide R&D funding in this report, as well as of some of the individual agency analyses, compares the President's request for FY2020 to the FY2018 actual level. As information about the agencies' FY2019 R&D levels becomes available, the agency sections of this report will be updated to reflect that information and to make comparisons to the President's FY2020 request. ", "President Trump is proposing approximately $134.1 billion for R&D for FY2020, a decrease of $1.7 billion (1.2%) below the FY2018 level of $135.8 billion. Adjusted for inflation, the President's FY2020 R&D request represents a constant-dollar decrease of 5.2% from the FY2018 actual level.", "The President's request includes continued R&D funding for existing single-agency and multiagency programs and activities, as well as new initiatives. This report provides government-wide, multiagency, and individual agency analyses of the President's FY2020 request as it relates to R&D and related activities. Additional information and analysis will be included as the House and Senate act on the President's budget request through appropriations bills."], "subsections": []}, {"section_title": "Federal R&D Funding Perspectives", "paragraphs": ["Federal R&D funding can be analyzed from a variety of perspectives that provide different insights. The following sections examine the data by agency, by the character of the work supported, and by a combination of these two perspectives."], "subsections": [{"section_title": "Federal R&D by Agency", "paragraphs": ["Congress makes decisions about R&D funding through the authorization and appropriations processes primarily from the perspective of individual agencies and programs. Table 1 provides data on R&D funding by agency for FY2018 (actual), FY2019 (enacted, for selected agencies), and FY2020 (request). Enacted data for FY2019 is provided only for agencies whose FY2019 appropriations process was completed before the FY2020 budget request was finalized. ", "Under the request, eight federal agencies would receive more than 97% of total federal R&D funding in FY2020: the Department of Defense, 44.3%; Department of Health and Human Services (HHS), primarily the National Institutes of Health (NIH), 25.1%; Department of Energy (DOE), 11.0%; National Aeronautics and Space Administration, 8.4%; National Science Foundation (NSF), 4.3%; Department of Agriculture (USDA), 1.8%; Department of Commerce (DOC), 1.3%; and Department of Veterans Affairs (VA), 1.0%. This report provides an analysis of the R&D budget requests for these agencies, as well as for the Department of Homeland Security (DHS), Department of the Interior (DOI), Department of Transportation (DOT), and Environmental Protection Agency (EPA). ", "All but three federal agencies would see their R&D funding decrease under the President's FY2020 request compared to FY2018. The only agencies with increased R&D funding in FY2020 relative to the FY2018 level would be DOD (up $7.077 billion, 13.5%), VA (up $39 million, 3.0%), and DOT (up $33 million, 3.2%). The agencies with largest R&D funding declines in the FY2020 request compared to FY2018 (as measured in dollars) would occur in the budgets of HHS (down $3.249 billion, 8.8%), DOE (down $2.764 billion, 15.8%), NSF (down $567 million, 29.7%), and NASA (down $475 million, 4.0%). ", "Among agencies for which FY2019 enacted funding is shown in the President's budget, FY2020 R&D funding would increase only for DOD (up $3.631 billion, 6.5%). HHS R&D funding would decline by $4.954 billion (12.8%). DOE R&D funding would decline by $3.075 billion (17.3%). VA R&D funding would decline by $17 million (1.3%). Department of Education R&D funding would decline by $34 million (13.2%). See Table 1 ."], "subsections": []}, {"section_title": "Federal R&D by Character of Work, Facilities, and Equipment", "paragraphs": ["Federal R&D funding can also be examined by the character of work it supports\u2014basic research, applied research, or development\u2014and by funding provided for construction of R&D facilities and acquisition of major R&D equipment. (See Table 2 .) President Trump's FY2020 request includes $35.164 billion for basic research, down $1.452 billion (4.0%) from FY2018; $40.707 billion for applied research, down $4.264 billion (10.5%); $59.108 billion for development, up $4.543 billion (8.3%); and $3.382 billion for facilities and equipment, down $495 million (12.8%). "], "subsections": []}, {"section_title": "Federal Role in U.S. R&D by Character of Work", "paragraphs": ["A primary policy justification for public investments in basic research and for incentives (e.g., tax credits) for the private sector to conduct research is the view, widely held by economists, that the private sector will, left on its own, underinvest in basic research from a societal perspective. The usual argument for this view is that the social returns (i.e., the benefits to society at large) exceed the private returns (i.e., the benefits accruing to the private investor, such as increased revenues or higher stock value). Other factors that may inhibit corporate investment in basic research include long time horizons for achieving commercial applications (diminishing the potential returns due to the time value of money), high levels of technical risk/uncertainty, shareholder demands for shorter-term returns, and asymmetric and imperfect information. ", "The federal government is the nation's largest supporter of basic research, funding 42% of U.S. basic research in 2017. Business funded 30% of U.S. basic research in 2017, with state governments, universities, and other nonprofit organizations funding the remaining 29%. For U.S. applied research, business is the primary funder, accounting for an estimated 55% in 2017, while the federal government accounted for an estimated 33%. State governments, universities, and other nonprofit organizations funded the remaining 12%. Business also provides the vast majority of U.S. funding for development. Business accounted for 85% of development funding in 2017, while the federal government provided 13%. State governments, universities, and other nonprofit organizations funded the remaining 2% (see Figure 1 )."], "subsections": []}, {"section_title": "Federal R&D by Agency and Character of Work Combined", "paragraphs": ["Federal R&D funding can also be viewed from the combined perspective of each agency's contribution to basic research, applied research, development, and facilities and equipment. Table 3 lists the three agencies with the most funding in each of these categories as proposed in the President's FY2020 budget. The overall federal R&D budget reflects a wide range of national priorities, including supporting advances in spaceflight, developing new and affordable sources of energy, and understanding and deterring terrorist groups. These priorities and the mission of each individual agency contribute to the composition of that agency's R&D spending (i.e., the allocation among basic research, applied research, development, and facilities and equipment). In the President's FY2020 budget request, the Department of Health and Human Services, primarily NIH, would account for nearly half (47.7%) of all federal funding for basic research. HHS would also be the largest federal funder of applied research, accounting for about 45.6% of all federally funded applied research in the President's FY2020 budget request. DOD would be the primary federal funder of development, accounting for 87.4% of total federal development funding in the President's FY2020 budget request. DOE would be the primary federal funder of facilities and equipment, accounting for 50.5% of total federal facilities and equipment funding in the President's FY2020 budget request."], "subsections": []}]}, {"section_title": "Multiagency R&D Initiatives", "paragraphs": ["For many years, presidential budgets have reported on multiagency R&D initiatives. Often, they have also provided details of agency funding for these initiatives. Some of these efforts have a statutory basis\u2014for example, the Networking and Information Technology Research and Development (NITRD) program, the National Nanotechnology Initiative (NNI), and the U.S. Global Change Research Program (USGCRP). These programs generally produce annual budget supplements identifying objectives, activities, funding levels, and other information, usually published shortly after the presidential budget release. Other multiagency R&D initiatives have operated at the discretion of the President without such a basis and may be eliminated at the discretion of the President. President Trump's FY2020 budget is largely silent on funding levels for these efforts and whether any or all of the nonstatutory initiatives will continue. Some activities related to these initiatives are discussed in agency budget justifications and may be addressed in the agency analyses later in this report. This section provides available multiagency information on these initiatives and will be updated as additional information becomes available."], "subsections": [{"section_title": "Networking and Information Technology Research and Development Program (NITRD)", "paragraphs": ["Established by the High-Performance Computing Act of 1991 ( P.L. 102-194 ), the Networking and Information Technology Research and Development program is the primary mechanism by which the federal government coordinates its unclassified networking and information technology R&D investments in areas such as supercomputing, high-speed networking, cybersecurity, software engineering, and information management. In FY2019, 21 agencies are NITRD members; nonmember agencies also participate in NITRD activities. NITRD efforts are coordinated by the National Science and Technology Council (NSTC) Subcommittee on Networking and Information Technology Research and Development.", "P.L. 102-194 , as reauthorized by the American Innovation and Competitiveness Act of 2017 ( P.L. 114-329 ), requires the director of NITRD to prepare an annual report to be delivered to Congress along with the President's budget request. This annual report is to include, among other things, detailed information on the program's budget for the current and previous fiscal years, and the proposed budget for the next fiscal year. The latest annual report was published in August 2018 and related to the FY2019 budget request. President Trump requested $5,277.6 million for NITRD research in FY2019. In FY2017, NITRD funding was $5,126.4 million. The President's FY2020 budget does not identify aggregate funding levels for NITRD for FY2018 (actual), FY2019 (estimate), or FY2020 (request). The FY2020 NSF budget request includes $1.20 billion in NITRD funding for FY2020, a decrease of $98.2 million (7.6%) from FY2018 (actual).", "For additional information on the NITRD program, see CRS Report RL33586, The Federal Networking and Information Technology Research and Development Program: Background, Funding, and Activities , by Patricia Moloney Figliola. Additional NITRD information also can be obtained at https://www.nitrd.gov ."], "subsections": []}, {"section_title": "U.S. Global Change Research Program (USGCRP)", "paragraphs": ["The U.S. Global Change Research Program coordinates and integrates federal research and applications to understand, assess, predict, and respond to human-induced and natural processes of global change. The program seeks to advance global climate change science and to \"build a knowledge base that informs human responses to climate and global change through coordinated and integrated Federal programs of research, education, communication, and decision support.\" In FY2018, 13 departments and agencies participated in the USGCRP. USGCRP efforts are coordinated by the NSTC Subcommittee on Global Change Research. Each agency develops and carries out its activities as its contribution to the USGCRP, and funds are appropriated to each agency for those activities; those activities may or may not be identified as associated with the USGCRP in the President's annual budget proposal or each agency's budget justification to Congress.", "The Global Change Research Act of 1990 (GCRA) (P.L. 101-606) requires each federal agency or department involved in global change research to report annually to Congress on each element of its proposed global change research activities, as well as the portion of its budget request allocated to each element of the program. The President is also required to identify those activities and the annual global change research budget in the President's annual budget request to Congress. Some, but not all, participating agencies provide the required information in their budget justifications.", "In addition, in almost each of the past 17 years, language in appropriations laws has required the President to submit a comprehensive report to the appropriations committees \"describing in detail all Federal agency funding, domestic and international, for climate change programs, projects, and activities \u2026 including an accounting of funding by agency\u2026.\" The President's most recent report was submitted in January 2017 for the FY2017 request. This section will be updated when the USGCRP updates its budget information. ", "The President's FY2020 budget does not identify aggregate funding levels for USGCRP for FY2018 (actual), FY2019 (estimate), or the FY2020 (request). Without budget reports pursuant to the GCRP Act or appropriations laws, the budget authority or expenditures publicly reported by agencies is generally insufficient to independently build a complete and consistent estimate of funding for the USGCRP. Below are results of CRS research for selected agencies, which incompletely represent federal funding in recent years thats support the USGCRP.", "The President's FY2020 budget does not identify aggregate funding levels for USGCRP for FY2018 (actual), FY2019 (estimate), or the FY2020 (request). Without budget reports pursuant to the GCRP Act or appropriations laws, the budget authority or expenditures publicly reported by agencies is generally insufficient to independently build a complete and consistent estimate of funding for the USGCRP. Table 5 presents results of CRS research for selected agencies, which incompletely represent federal funding in recent years that supports the USGCRP. ", "For additional information on the USGCRP, see CRS Report R43227, Federal Climate Change Funding from FY2008 to FY2014 , by Jane A. Leggett, Richard K. Lattanzio, and Emily Bruner. Additional USGCRP information also can be obtained at http://www.globalchange.gov ."], "subsections": []}, {"section_title": "National Nanotechnology Initiative (NNI)", "paragraphs": ["Launched in FY2001, the National Nanotechnology Initiative is a multiagency R&D initiative to advance understanding and control of matter at the nanoscale, where the physical, chemical, and biological properties of materials differ in fundamental and useful ways from the properties of individual atoms or bulk matter. In 2003, Congress enacted the 21 st Century Nanotechnology Research and Development Act ( P.L. 108-153 ), providing a legislative foundation for some of the activities of the NNI. NNI efforts are coordinated by the NSTC Subcommittee on Nanoscale Science, Engineering, and Technology (NSET). In FY2019, the President's request included NNI funding for 16 federal departments and independent agencies and commissions with budgets dedicated to nanotechnology R&D. The NSET includes other federal departments and independent agencies and commissions with responsibilities for health, safety, and environmental regulation; trade; education; intellectual property; international relations; and other areas that might affect or be affected by nanotechnology. ", "P.L. 108-153 requires the NSTC to prepare an annual report to be delivered to Congress at the time the President's budget request is sent to Congress. This annual report is to include detailed information on the program's budget for the current fiscal year and the program's proposed budget for the next fiscal year, as well as additional information and data related to the performance of the program. The latest annual report was published in August 2018. President Trump requested $1,395.6 million for NNI research in FY2019. In FY2017, NNI funding was $1,552.3 million. The President's FY2020 budget does not identify aggregate funding levels for NNI for FY2018 (actual), FY2019 (enacted), or FY2020 (request). The NSF budget request includes $389 million in NNI funding for FY2020, $179 million (31.4%) less than in FY2018.", "For additional information on the NNI, see CRS Report RL34401, The National Nanotechnology Initiative: Overview, Reauthorization, and Appropriations Issues , by John F. Sargent Jr. Additional NNI information also can be obtained at http://www.nano.gov ."], "subsections": []}, {"section_title": "American Artificial Intelligence Initiative", "paragraphs": ["In February 2019, President Trump signed Executive Order 13859 establishing an American Artificial Intelligence Initiative to accelerate national leadership in artificial intelligence (AI). Among other things, the EO directs the heads of implementing agencies that perform or fund R&D to consider AI as an agency R&D priority, in accordance with their missions and consistent with applicable law. In particular, the EO directs the Secretaries of Defense, Commerce, Health and Human Services, and Energy, the Administrator of the National Aeronautics and Space Administration, and the Director of the National Science Foundation to prioritize the allocation of high-performance computing resources for AI-related applications through increased assignment of discretionary funding and any other appropriate mechanisms. According to Analytical Perspectives, the President's FY2020 budget would provide approximately $850 million for this initiative to the Department of Energy, National Institutes of Health, National Institute of Standards and Technology, and National Science Foundation."], "subsections": [{"section_title": "National Quantum Initiative", "paragraphs": ["In December 2018, President Trump signed the National Quantum Initiative Act (P.L. 115-368) establishing a National Quantum Initiative with the stated purpose of ensuring \"the continued leadership of the United States in quantum information science [QIS] and its technology applications.\" The act requires the establishment of a 10-year plan to accelerate the development of QIS and technology applications. According to Analytical Perspectives , the President's FY2020 budget includes approximately $430 million for this initiative at DOD, DOE, NIST, and NSF."], "subsections": []}]}, {"section_title": "Other Initiatives", "paragraphs": ["A number of presidential initiatives without statutory foundations were in operation at the end of the Obama Administration, but have not been addressed explicitly in President Trump's FY2018, FY2019, or FY2020 budgets. Two of these are part of the Advanced Manufacturing Partnership (AMP): the National Robotics Initiative (NRI) and Manufacturing USA (formerly known as the National Network for Manufacturing Innovation or NNMI). ", "According to Analytical Perspectives , the President's FY2020 budget ", "prioritizes R&D aimed at advances in manufacturing and the integration of those advances into the domestic supply chain to reduce U.S. reliance on foreign sources of critical products. Budget priorities include intelligent manufacturing systems, materials and processing technologies, advances in semiconductor design and fabrication, and innovations in food and agricultural manufacturing.", "Other initiatives include the Cancer Moonshot, the Brain Research through Advancing Innovative Neurotechnologies (BRAIN) Initiative, the Precision Medicine Initiative (PMI), the Materials Genome Initiative (MGI), and an effort to double federal funding for clean energy R&D. Some of the activities of these initiatives are discussed in agency budget justifications and the agency analyses later in this report."], "subsections": []}]}, {"section_title": "FY2020 Appropriations Status", "paragraphs": ["The remainder of this report provides a more in-depth analysis of R&D in 12 federal departments and agencies that, in aggregate, receive nearly 99% of total federal R&D funding. Agencies are presented in order of the size of their FY2020 R&D budget requests, with the largest presented first. ", "Annual appropriations for these agencies are provided through 9 of the 12 regular appropriations bills. For each agency covered in this report, Table 7 shows the corresponding regular appropriations bill that provides primary funding for the agency, including its R&D activities. ", "Because of the way that agencies report budget data to Congress, it can be difficult to identify the portion that is R&D. Consequently, R&D data presented in the agency analyses in this report may differ from R&D data in the President's budget or otherwise provided by OMB. ", "Funding for R&D is often included in appropriations line items that also include non-R&D activities; therefore, in such cases, it may not be possible to identify precisely how much of the funding provided in appropriations laws is allocated to R&D specifically. In general, R&D funding levels are known only after departments and agencies allocate their appropriations to specific activities and report those figures. ", "As of the date of this report, the House had completed action on none of the 12 regular appropriations bills for FY2020; the Senate had completed action on none of the bills. None of the 12 had been enacted as law.", "This report will be updated as Congress takes additional actions to complete the FY2020 appropriations process. ", "In addition to this report, CRS produces individual reports on each of the appropriations bills. These reports can be accessed via the CRS website at http://www.crs.gov/iap/appropriations . Also, the status of each appropriations bill is available on the CRS web page, Status Table of Appropriations , available at http://www.crs.gov/AppropriationsStatusTable/Index . "], "subsections": []}, {"section_title": "Department of Defense21", "paragraphs": ["The mission of the Department of Defense is to provide \"the military forces needed to deter war and ensure our nation's security.\" Congress supports research and development activities at DOD primarily through the department's Research, Development, Test, and Evaluation (RDT&E) funding. These funds support the development of the nation's future military hardware and software and the science and technology base upon which those products rely.", "Most of what DOD spends on RDT&E is appropriated in Title IV of the annual defense appropriations bill. (See Table 8 .) However, RDT&E funds are also appropriated in other parts of the bill. For example, RDT&E funds are appropriated as part of the Defense Health Program, the Chemical Agents and Munitions Destruction Program, and the National Defense Sealift Fund. The Defense Health Program (DHP) supports the delivery of health care to DOD personnel and their families. DHP funds (including the RDT&E funds) are requested through the Defense-wide Operations and Maintenance appropriations request. The program's RDT&E funds support congressionally directed research on breast, prostate, and ovarian cancer; traumatic brain injuries; orthotics and prosthetics; and other medical conditions. Congress appropriates funds for this program in Title VI (Other Department of Defense Programs) of the defense appropriations bill. The Chemical Agents and Munitions Destruction Program supports activities to destroy the U.S. inventory of lethal chemical agents and munitions to avoid future risks and costs associated with storage. Funds for this program are requested through the Defense-wide Procurement appropriations request. Congress appropriates funds for this program also in Title VI. The National Defense Sealift Fund supports the procurement, operation and maintenance, and research and development associated with the nation's naval reserve fleet and supports a U.S. flagged merchant fleet that can serve in time of need. In some fiscal years, RDT&E funding for this effort is requested in the Navy's Procurement request and appropriated in Title V (Revolving and Management Funds) of the appropriations bill.", "RDT&E funds also have been requested and appropriated as part of DOD's separate funding to support efforts in what the George W. Bush Administration termed the Global War on Terror (GWOT) and what the Obama and Trump Administrations have referred to as Overseas Contingency Operations (OCO). In appropriations bills, the term Overseas Contingency Operations/Global War on Terror (OCO/GWOT) has been used; President Trump's FY2020 budget uses the term Overseas Contingency Operations. Typically, the RDT&E funds appropriated for OCO activities go to specified Program Elements (PEs) in Title IV. ", "According to the Comptroller of the Department of Defense, the FY2020 OCO request is divided into three requirement categories\u2014direct war, enduring, and OCO for base. For purposes of this report, these categories of OCO funding requests will be reported collectively.", "In addition, OCO/GWOT-related requests/appropriations have included money for a number of transfer funds. In the past, these have included the Iraqi Freedom Fund (IFF), the Iraqi Security Forces Fund, the Afghanistan Security Forces Fund, and the Pakistan Counterinsurgency Capability Fund. Congress typically has made a single appropriation into each such fund and authorized the Secretary to make transfers to other accounts, including RDT&E, at his discretion. These transfers are eventually reflected in Title IV prior-year funding figures. ", "For FY2020, the Trump Administration is requesting $104.294 billion for DOD's Title IV RDT&E PEs (base plus OCO), $8.334 billion (8.7%) above the enacted FY2019 level. (See Table 8 .) In addition, the request includes $732.3 million in RDT&E through the Defense Health Program (DHP; down $1.447 billion, 66.4% from FY2019), $875.9 million in RDT&E through the Chemical Agents and Munitions Destruction program (down $10.8 million, 1.2% from FY2019), and $3.0 million for the Inspector General for RDT&E-related activities (down $1.0 million, 25.4% from FY2019). The FY2020 budget included no RDT&E funding via the National Defense Sealift Fund, the same as the FY2019 enacted level. ", "RDT&E funding can be analyzed in different ways. RDT&E funding can be characterized organizationally. Each of military department requests and receives its own RDT&E funding. So, too, do various DOD agencies (e.g., the Missile Defense Agency and the Defense Advanced Research Projects Agency), collectively aggregated within the Defense-Wide account. RDT&E funding also can be characterized by budget activity (i.e., the type of RDT&E supported). Those budget activities designated as 6.1, 6.2, and 6.3 (basic research, applied research, and advanced technology development, respectively) constitute what is called DOD's Science and Technology program (S&T) and represent the more research-oriented part of the RDT&E program. Budget activities 6.4 and 6.5 focus on the development of specific weapon systems or components for which an operational need has been determined and an acquisition program established. Budget activity 6.6 provides management support, including support for test and evaluation facilities. Budget activity 6.7 supports the development of system improvements in existing operational systems.", "Many congressional policymakers are particularly interested in DOD S&T program funding since these funds support the development of new technologies and the underlying science. Some in the defense community see ensuring adequate support for S&T activities as imperative to maintaining U.S. military superiority into the future. The knowledge generated at this stage of development may also contribute to advances in commercial technologies. The FY2020 request for Title IV S&T funding (base plus OCO) is $14.135 billion, $1.524 billion (9.7%) below the FY2019 enacted level. Within the S&T program, basic research (6.1) receives special attention, particularly by the nation's universities. DOD is not a large supporter of basic research when compared to NIH or NSF. However, over half of DOD's basic research budget is spent at universities. The Trump Administration is requesting $2.320 billion for DOD basic research for FY2020, $208.4 million (8.2%) below the FY2019 enacted level. DOD is a substantial source of federal funds for university R&D in certain fields, such as aerospace, aeronautical, and astronautical engineering (40%); electrical, electronic, and communications engineering (39%); mechanical engineering (28%); computer and information sciences (28%); and materials science (25%). "], "subsections": []}, {"section_title": "Department of Health and Human Services", "paragraphs": ["The mission of the Department of Health and Human Services (HHS) is \"to enhance and protect the health and well-being of all Americans ... by providing for effective health and human services and fostering advances in medicine, public health, and social services.\" This section focuses on HHS research and development funded through the National Institutes of Health, an HHS agency that accounts for nearly 97% of total HHS R&D funding. Other HHS agencies that provide funding for R&D include the Centers for Disease Control and Prevention (CDC), Centers for Medicare and Medicaid Services (CMS), Food and Drug Administration (FDA), Agency for Healthcare Research and Quality (AHRQ), Health Resources and Services Administration (HRSA), and Administration for Children and Families (ACF); additional R&D funding is attributed to departmental management."], "subsections": [{"section_title": "National Institutes of Health29", "paragraphs": ["NIH is the primary agency of the federal government charged with performing and supporting biomedical and behavioral research. It also has major roles in training biomedical researchers and disseminating health information. The NIH mission is \"to seek fundamental knowledge about the nature and behavior of living systems and the application of that knowledge to enhance health, lengthen life, and reduce illness and disability.\" The agency consists of the NIH Office of the Director (OD) and 27 institutes and centers (ICs).", "The OD sets overall policy for NIH and coordinates the programs and activities of all NIH components, particularly in areas of research that involve multiple institutes. The ICs focus on particular diseases (e.g., National Cancer Institute), areas of human health and development (e.g., National Institute on Aging), or scientific research fields or support (e.g., National Center for Advancing Translational Sciences). Each IC plans and manages its own research programs in coordination with OD. As shown in Table 9 , separate appropriations are provided to 24 of the 27 ICs, as well as to OD, the Innovation Account (established by the 21 st Century Cures Act, P.L. 114-255), and an intramural Buildings and Facilities account. The other three centers, which perform centralized support services, are funded through the other ICs.", "NIH supports and conducts a wide range of basic and clinical research, research training, and health information dissemination across all fields of biomedical and behavioral sciences. According to NIH, about 10% of the NIH budget supports intramural research projects conducted by the nearly 6,000 NIH federal scientists, most of whom are located on the NIH campus in Bethesda, MD. More than 80% of NIH's budget goes to the extramural research community in the form of grants, contracts, and other awards. This funding supports research performed by more than 300,000 nonfederal scientists and technical personnel who work at more than 2,500 universities, hospitals, medical schools, and other research institutions. ", "Funding for NIH comes primarily from the annual Labor, HHS, and Education (LHHS) appropriations act, with an additional amount for Superfund-related activities from the Interior/Environment appropriations act. Those two appropriations acts provide NIH's discretionary budget authority. In addition, NIH has received mandatory funding of $150 million annually provided in the Public Health Service Act (PHSA), Section 330B, for a special program on type 1 diabetes research. Some funding is also transferred to NIH pursuant to the \"PHS Evaluation Tap\" Transfer authority. The total funding available for NIH activities, taking account of add-ons and PHS tap transfers, is known as the NIH program level.", "President Trump's FY2020 budget request would provide NIH a total program level of $34.368 billion, a decrease of $4.941 billion (12.6%) compared with FY2019 enacted levels. The proposed FY2020 program level total would include $33.410 billion provided through LHHS appropriations (including the full amount authorized by the 21 st Century Cures Act); $741 million from the PHS evaluation transfer; $66.581 million provided through Interior/Environment appropriations for Superfund-related activities; and $150 million in proposed funding for the mandatory type 1 diabetes program. Under the FY2020 budget proposal, all existing ICs and budget activity lines, except for Buildings and Facilities, would receive a decrease compared to FY2019 enacted levels (see Table 9 ). The Buildings and Facilities appropriation of $200 million would not change from FY2019 to FY2020.", "Additionally, the FY2020 Budget Request proposes consolidating the Agency for Healthcare Research and Quality into NIH, forming a 28 th IC\u2014the National Institute for Research on Safety and Quality (NIRSQ). The creation of a new NIH institute would require an amendment to PHSA Section 401(d), which specifies that \"[i]n the National Institutes of Health, the number of national research institutes and national centers may not exceed a total of 27.\" Under the request, NISRQ would receive $256 million in funding for FY2020. ", "The main funding mechanism NIH uses to support extramural research is research project grants (RPGs), which are competitive, peer-reviewed, and largely investigator-initiated. Historically, over 50% of the NIH budget is used to support RPGs, which include salaries for investigators and research staff. The FY2020 budget proposes to reduce the average cost of RPGs by capping the percentage of an investigator's salary that can be paid with grant funds to 90%. ", "The FY2020 Trump budget proposal includes $150 million in mandatory funding for research on type 1 diabetes authorized under the PHS Act Section 330B within the budget of the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK). For this proposal, Congress and the President would need to enact legislation to extend the special diabetes program funding, because under current law, no new funding will be available for this program after September 30, 2019. Additionally, the FY2020 program level request includes $741 million in funding transferred to NIH by the PHS evaluation tap. Discretionary funding for certain programs at NIH and other HHS agencies that are authorized under the PHS Act can be subject to an assessment under Section 241 of the PHS Act (42 U.S.C. \u00a7238j). This provision authorizes the Secretary to use a portion of eligible appropriations to study the effectiveness of federal health programs and to identify improvements. Although the PHS Act limits the tap to no more than 1% of eligible appropriations, in recent years, annual LHHS appropriations acts have specified a higher amount (2.5% in FY2019) and have also typically directed specific amounts of funding from the tap for transfer to a number of HHS programs. The assessment has the effect of redistributing appropriated funds for specific purposes among PHS and other HHS agencies. NIH, with the largest budget among the PHS agencies, has historically been the largest \"donor\" of program evaluation funds; until recently, it had been a relatively minor recipient. Provisions in recent LHHS appropriations acts have directed specific tap transfers to NIH, making NIH a net recipient of tap funds. ", "The FY2020 NIH budget request also includes $492 million made available through the 21 st Century Cures Act (see text box below; hereinafter referred to as \"The Cures Act\"). The Cures Act ( P.L. 114-255 ) specifies that $149 million is for the Precision Medicine Initiative, $140 million is for the BRAIN Initiative, $195 million is for cancer research, and $8 million is for research on regenerative medicine for FY2020.", "The President's FY2020 budget identifies several research priorities for NIH in the coming year. The overview below outlines some of these priority themes in the budget request. ", "1. Confronting the Opioids Crisis", "The request includes $1.3 billion designated for opioids and pain research across NIH, with $500 million of the total for the Helping to End Addiction Long-Term (HEAL) initiative. The HEAL Initiative, launched in April 2018, aims to accelerate the development of new medications and devices to treat opioid addiction. In addition, NIH plans to support research on neonatal abstinence syndrome, chronic pain, and other opioids-related issues.", "2. Pediatric Research", "The FY2020 request proposes $50 million in designated funding for a pediatric cancer initiative. The initiative, designed to complement existing pediatric cancer research, would aggregate data on pediatric cancer cases and coordinate existing datasets to create a \"comprehensive, shared resource to support research on childhood cancer in all its forms.\" The request also designates $15 million for the Institutional Development Award (IDeA) States Pediatric Clinical Trials Network to support pediatric clinical studies, such as on the \"dosing, safety, and efficacy of drugs that are commonly prescribed to children.\"", "3. Supporting the Next Generation of Researchers", "The request would provide $100 million in dedicated funding for the Next Generation Researchers Initiative, which aims to support new and early stage scientists in attaining their first NIH grants. Through the program, NIH ICs are to create funding pathways and other strategies targeted at new and early-stage scientists, and would be required to collect data and evaluate their outcomes. ", "4. Ending the HIV Epidemic", "As a part of a proposed HHS wide plan, \"Ending the HIV Epidemic: A Plan for America,\" the FY2020 request designates $6 million in funding to Centers for AIDS Research to collect data and inform HHS on best practices for the initiative. The goal for the plan is to reduce new infections by 75% in the next 5 years, and by 90% in the next 10 years. ", "5. New Technologies and Biomedical Research", "NIH plans to continue to support biomedical innovations using new technologies, including for diagnosis, monitoring, and treatment. An example includes a smartphone-based system for people with diabetes to monitor blood glucose levels. NIH also aims to accelerate scientific discovery through new data science methods. In June 2018, NIH released a Strategic Plan for Data Science, with an agency-wide plan for increasing and improving its use of large biomedical datasets. In addition, NIH plans to convene a new working group on artificial intelligence, machine learning, and biomedical research. ", "Along with the above priorities, the President's budget request identifies ongoing support related to precision medicine, universal flu vaccine, and NIH buildings and facilities. "], "subsections": []}]}, {"section_title": "Department of Energy53", "paragraphs": ["The Department of Energy (DOE) was established in 1977 by the Department of Energy Organization Act ( P.L. 95-91 ), which combined energy-related programs from a variety of agencies with defense-related nuclear programs that dated back to the Manhattan Project. Today, DOE conducts basic scientific research in fields ranging from nuclear physics to the biological and environmental sciences; basic and applied R&D relating to energy production and use; and R&D on nuclear weapons, nuclear nonproliferation, and defense nuclear reactors. The department has a system of 17 national laboratories around the country, mostly operated by contractors, that together account for about 40% of all DOE expenditures.", "The Administration's FY2020 budget request for DOE includes about $12.783 billion for R&D and related activities, including programs in three broad categories: science, national security, and energy. This request is 18.6% less than the enacted FY2019 amount of $15.712 billion. (See Table 10 for details.)", "The request for the DOE Office of Science is $5.546 billion, a decrease of 15.8% from the FY2019 appropriation of $6.585 billion. Funding would decrease for each of the office's six major research programs. In Basic Energy Sciences, almost half the proposed decrease would result from the approaching end of construction on the Linac Coherent Light Source II (no funding requested for FY2020, down from $129 million in FY2019). Funding for Biological and Environmental Research would decrease by $211 million (29.9%), with reductions concentrated in the Earth and Environmental Systems Sciences subprogram. In Advanced Scientific Computing Research, the Office of Science Exascale Computing Project would receive $189 million, down 18.9% from $233 million in FY2019. Funding for Fusion Energy Sciences would decrease by $161 million (28.6%), including a $25 million (18.9%) decrease in the U.S. contribution to construction of the International Thermonuclear Experimental Reactor (ITER), a fusion energy demonstration and research facility in France. ", "The request for DOE national security R&D is $4.925 billion, an increase of 11.8% from $4.406 billion in FY2019. Funding for Weapons Activities RDT&E would increase 37.9%, including an increase of $123 million for Advanced Simulation and Computing and an increase of $95 million (190.3%) for Enhanced Capabilities for Subcritical Experiments. In Defense Nuclear Nonproliferation R&D, reactor conversion activities would transfer to a non-R&D account; excluding this accounting change, funding for the remaining program would increase by 3.8%. Funding for the Naval Reactors program would decrease by 7.8% overall, with increases for operations, infrastructure, and technology development offset by previously planned decreases in funding for construction and two major multiyear projects.", "The request for DOE energy R&D is $2.313 billion, a decrease of 51.0% from $4.721 billion in FY2019. Many of the proposed reductions in this category are similar to the Administration's FY2019 budget proposals. Funding for energy efficiency and renewable energy R&D would decrease by 66.3%, with reductions in all major research areas and a shift in emphasis toward early-stage R&D rather than later-stage development and deployment. Funding for fossil energy R&D would decrease by 24.1%, with reductions focused particularly on coal carbon capture and storage ($69 million, down from $199 million in FY2019) and natural gas technologies ($11 million, down from $51 million in FY2019). The request for fuel cycle R&D is $90 million (down from $264 million in FY2019), and nuclear energy would decrease by 37.9%, with no funding requested for the Integrated University Program ($5 million in FY2019) or the Supercritical Transformational Electric Power (STEP) R&D initiative ($5 million in FY2019). The Advanced Research Projects Agency-Energy (ARPA-E), which is intended to advance high-impact energy technologies that have too much technical and financial uncertainty to attract near-term private-sector investment, would be terminated."], "subsections": []}, {"section_title": "National Aeronautics and Space Administration55", "paragraphs": ["The National Aeronautics and Space Administration (NASA) was created in 1958 by the National Aeronautics and Space Act (P.L. 85-568) to conduct civilian space and aeronautics activities. NASA has research programs in planetary science, Earth science, heliophysics, astrophysics, and aeronautics, as well as development programs for future human spacecraft and for multipurpose space technology such as advanced propulsion systems. In addition, NASA operates the International Space Station (ISS) as a facility for R&D and other purposes.", "The Administration is requesting about $17.845 billion for NASA R&D in FY2020. This is 0.1% less than FY2019 funding of about $17.865 billion. For a breakdown of these amounts, see Table 11 . NASA R&D funding comes through five accounts: Science; Aeronautics; Space Technology (called Exploration Technology in the Administration's budget request); Exploration (Deep Space Exploration Systems in the request); and the ISS, Commercial Crew, and Commercial Low Earth Orbit (LEO) Development portions of Space Operations (called LEO and Spaceflight Operations in the request).", "The FY2020 request for Science is $6.304 billion, a decrease of 8.7% from FY2019. Within this total, funding for Earth Science would decrease by $151 million (7.8%); funding for Planetary Science would decrease by $136 million (4.9%); and funding for Astrophysics would decrease by $347 million (29.1%). The request for Earth Science includes no funding for the Pre-Aerosol, Clouds, and Ocean Ecosystem (PACE) mission or the Climate Absolute Radiance and Refractivity Observatory (CLARREO) Pathfinder mission. PACE and CLARREO Pathfinder were also proposed for termination in the FY2018 and FY2019 budgets but were funded by Congress. The request for Planetary Science includes $593 million for a mission to Jupiter's moon Europa, but in contrast to prior congressional direction, the mission would launch on a commercial rocket and would not include a lander. The Planetary Science request also includes $210 million for the Lunar Discovery and Exploration program, initiated in FY2019, to fund public-private partnerships for research using commercial lunar landers. The request for Astrophysics does not include funding for the Wide Field Infrared Space Telescope (WFIRST, $312 million in FY2019). The proposed increase of $48 million for the James Webb Space Telescope (JWST) would provide $155 million more for JWST in FY2020 than was projected in the FY2019 budget; this change reflects previously announced cost increases and schedule delays.", "The FY2020 request for Aeronautics is $667 million, a decrease of 8.0% from FY2019. The request includes $104 million for the Low Boom Flight Demonstrator program, intended to demonstrate quiet supersonic flight.", "The FY2020 request for Exploration Technology (currently Space Technology) is $1.014 billion, an increase of 9.4% from FY2019. The request proposes $119 million for a mostly new Lunar Surface Innovation Initiative. It proposes $45 million for a restructured In-Space Robotic Servicing program, down from $180 million for the RESTORE-L robotic servicing mission in FY2019.", "The FY2020 request for Deep Space Exploration Systems (currently Exploration) is $5.022 billion, a decrease of 0.6% from FY2019. This account funds development of the Orion Multipurpose Crew Vehicle and the Space Launch System (SLS) heavy-lift rocket, the capsule and launch vehicle mandated by the NASA Authorization Act of 2010 for future human exploration beyond Earth orbit. The first test flight of SLS carrying Orion but no crew (known as EM-1) is now expected no earlier than June 2020. The first flight of Orion and the SLS with a crew on board (known as EM-2) is expected by April 2023. Funding for Orion, the SLS, and related ground systems (collectively known as Exploration Systems Development) would decrease by $651 million (15.9%). The account also funds Exploration R&D, which would increase by $622 million (64.9%). The request for Exploration R&D includes $821 million for a platform in lunar orbit (known as the Gateway) to serve as a test bed for deep space human exploration capabilities.", "In the LEO and Spaceflight Operations account (currently Space Operations), the request for Commercial Crew is $102 million, a decrease of 41.1% from FY2019; the request for the ISS is $1.458 billion; and the request for Commercial LEO Development, a new program in FY2019, is $150 million (an increase of 275.0%). The reduction in Commercial Crew funding reflects the expected transition of commercial crew activities from development to operations: the first post-certification crewed flight to the ISS is planned for late FY2019. The Commercial LEO Development program is intended to stimulate a commercial space economy in low Earth orbit, including the commercial provision of NASA's requirements for research and technology demonstration after the proposed end of direct ISS funding in 2025."], "subsections": []}, {"section_title": "National Science Foundation57", "paragraphs": ["The National Science Foundation supports basic research and education in the nonmedical sciences and engineering. Congress established the foundation as an independent federal agency in 1950 and directed it to \"promote the progress of science; to advance the national health, prosperity, and welfare; to secure the national defense; and for other purposes.\" The NSF is a primary source of federal support for U.S. university research, especially in mathematics and computer science. It is also responsible for significant shares of the federal science, technology, engineering, and mathematics (STEM) education program portfolio and federal STEM student aid and support.", "NSF has six appropriations accounts: Research and Related Activities (RRA, the main research account), Education and Human Resources (EHR, the main education account), Major Research Equipment and Facilities Construction (MREFC), Agency Operations and Award Management (AOAM), the National Science Board (NSB), and the Office of Inspector General (OIG). Appropriations are generally provided at the account level, while program-specific direction may be included in appropriations acts, or accompanying conference reports or explanatory statements. ", "Because final FY2019 funding was not available at the time the FY2020 budget request was prepared, requested R&D funding is compared to the FY2018 actual funding. FY2019 funding levels, enacted February 15, 2019, are included for reference. These amounts are available only at the account level; FY2019 R&D breakouts and subaccount funding amounts are not yet available for comparison.", "Funding for R&D is included in the RRA, EHR, and MREFC accounts. (The RRA and EHR accounts also include non-R&D funding.) Together, these three accounts comprise 95% of the total requested funding for NSF. Actual R&D obligations for each account are known after NSF allocates funding appropriations to specific activities and reports those figures. The budget request specifies R&D funding for the conduct of research, including basic and applied research, and for physical assets, including R&D facilities and major equipment. Funding amounts for FY2018 actual and FY2020 requested levels are reported by account, including amounts for R&D conduct and physical assets where applicable, in Table 12 .", "Overall . The Administration is requesting $7.07 billion for the NSF in FY2020, $1.01 billion (12.5%) less than the FY2019 enacted amount, and $752 million (9.6%) less than the FY2018 actual amount. The request would decrease budget authority in three accounts relative to the FY2018 enacted level: RRA by $717.4 million (11.2%), EHR by $80.4 million (8.9%), and NSB by $200,000 (4.7%). The request would increase budget authority for the MREFC account by $36.9 million (19.8%) and provide slight increases to the AOAM (2.6%, $8.4 million) and OIG (1.7%, $260,000) accounts. Overall, NSF estimates that, under the FY2020 request, agency-wide funding rates (i.e., the percentage of submitted proposals that are successfully awarded funding) would decrease slightly from 24% to 23%, with 1,317 fewer new competitive awards, compared to FY2018.", "As a proportion of NSF's total funding, R&D activities account for approximately 81%. For FY2020, $5.72 billion is requested for R&D activities, a 10% decrease from FY2018 actual funding for R&D of $6.36 billion. The total request includes $5.22 billion (91%) for the conduct of R&D, and $506 million (9%) for R&D facilities and major equipment. Of funding requested for the conduct of R&D, 87% is requested for basic research, and 13% for applied research. Overall funding for R&D facilities and major equipment supports not only the construction and acquisition phases, funded through MREFC ($223 million requested), but also the planning, design, and postconstruction operations and maintenance, funded through RRA ($282 million requested).", "Research . The Administration seeks $5.66 billion for RRA in FY2020, an $857 million (13.1%) decrease compared to the FY2019 enacted funding, and a $717 million (11.2%) decrease compared to FY2018 actual funding. Compared to the FY2018 actual levels, the FY2020 request includes decreases for 8 of the 10 RRA subaccounts. The largest percentage decrease would go to the Office of Polar Programs (19.6%, $98.3 million decrease). The largest percentage increase would go to the U.S. Arctic Research Commission account (6.3%, $90,000 increase). The FY2020 request also includes $151 million for the RRA Established Program to Stimulate Competitive Research (EPSCoR) program, a $19.4 million (11.3%) decrease compared to FY2018 actual funding.", "Within the RRA account, the FY2020 request includes $5.08 billion for R&D, a decrease of $634 million (11.1%) compared to the FY2018 actual amount. Of this amount, the majority ($4.80 billion, 94%) is requested for the conduct of research, including $4.38 billion for basic research and $417 million for applied research.", "Education . The FY2020 request for the EHR account is $86.5 million (9.5%) less than the FY2019 enacted amount and $80.4 million (8.9%) less than the FY2018 actual level. By program division, the Division of Human Resource Development would receive an increase of $15.6 million (9.6%) over the FY2018 actual level. The divisions of research on learning in formal and informal settings, graduate education, and undergraduate education would receive decreases of 20.4% ($182 million requested), 5.5% ($244 million requested), and 13.8% ($219 million requested), respectively.", "EHR programs of particular interest to congressional policymakers include the Graduate Research Fellowship Program (GRFP) and National Research Traineeship (NRT) programs. The FY2020 request for GRFP is $257 million, a reduction of $27.9 million (9.8%) from the FY2018 actual level. The FY2020 request for NRT is $49.5 million, a $4.3 million (8.0%) decrease from FY2018.", "Within EHR, requested funding for R&D is $420 million, which is $37.7 million (8.2%) less than the FY2018 actual funding amount and accounts for approximately 7.3% of the agency's total R&D request. All of the requested funding would support the conduct of R&D, including $150 million for basic research and $270 million for applied research.", "Construction . The MREFC account supports large construction projects and scientific instruments, with all of the funding supporting R&D facilities. The Administration is seeking $223 million for MREFC in FY2020, $36.9 million (19.8%) more than the FY2018 enacted amount, and $72.5 million (24.5%) less than the FY2018 actual amount. ", "Requested MREFC funding would support continued construction of the Large Synoptic Survey Telescope (LSST, $46.3 million requested, 5.1% decrease from FY2019 enacted) and Antarctic Infrastructure Modernization for Science (AIMS, $97.9 million requested, 5.6% decrease from FY2019 enacted). The request includes $33.0 million for upgrades to the Large Hadron Collider in Switzerland, which would represent the first year of a five-year project. Additionally, $45.0 million is requested for Mid-scale Research Infrastructure projects in the $20 million to $70 million range; this is a new funding line-item in the MREFC account meant to manage support for upgrades to major facilities and stand-alone projects in this range as a portfolio.", "Other initiatives . The FY2019 NSF budget request includes funding for three multiagency initiatives. This funding is included in multiple NSF appropriations accounts, and R&D amounts are not separately provided. The National Nanotechnology Initiative would receive $389 million, $179 million (31.4%) less than in FY2018. The Networking and Information Technology Research and Development program would receive $1.20 billion, a decrease of $98.2 million (7.6%). The U.S. Global Change Research Program would receive $224 million, $30.0 million (11.8%) less than in FY2018."], "subsections": []}, {"section_title": "Department of Agriculture62", "paragraphs": ["The U.S. Department of Agriculture (USDA) was created in 1862, in part to support agricultural research in an expanding, agriculturally dependent country. Today, USDA conducts intramural research at federal facilities with federally employed scientists and supports external research at universities and other facilities through competitive grants and formula-based funding. The breadth of contemporary USDA research spans traditional agricultural production techniques, organic and sustainable agriculture, bioenergy, nutrition needs and food composition, food safety, animal and plant health, pest and disease management, economic decisionmaking, and other social sciences affecting consumers, farmers, and rural communities. ", "Four agencies carry out USDA's intramural research and education activities, grouped together into the Research, Education, and Economics (REE) mission area. The agencies involved are the Agricultural Research Service (ARS), National Institute of Food and Agriculture (NIFA), National Agricultural Statistics Service (NASS), and Economic Research Service (ERS).", "The FY2019 enacted appropriation ( P.L. 116-6 ) provides a total of $3,424.1 million in discretionary spending for the four agencies. The Administration is requesting a total of $2,868.7 million for the four agencies in FY2020, a 16.2% reduction ($555.4 million). Most of that year-over-year reduction (78%) is attributable to the reduced request for ARS salaries and expenses and the ARS buildings and facilities account (see Table 13 ). The remainder of the year-over-year reduction comes from decreases in certain research and education, extension, and integrated activities in NIFA, as well as in NASS and ERS. In addition to discretionary appropriations, agricultural research is funded by state matching contributions and private donations or grants, as well as certain mandatory funding authorized by the farm bill. USDA's FY2019 enacted discretionary appropriations and the Administration's FY2020 request for the four research agencies are discussed below. "], "subsections": [{"section_title": "Agricultural Research Service", "paragraphs": ["The Agricultural Research Service is USDA's in-house basic and applied research agency. It operates approximately 90 laboratories nationwide with about 6,600 employees. ARS laboratories focus on efficient food and fiber production, development of new products and uses for agricultural commodities, development of effective controls for pest management, and support of USDA regulatory and technical assistance programs. ARS also operates the National Agricultural Library, one of the department's primary information repositories for food, agriculture, and natural resource sciences.", "For FY2019, P.L. 116-6 provides $1,303.3 billion for ARS salaries and expenses and $381.2 million for buildings and facilities. The Administration is requesting $1,203.5 billion for ARS salaries and expenses for FY2020, a decrease of $99.8 million (7.6%) from the FY2019 appropriation. For FY2020, the request for the buildings and facilities account is $50.0 million ( Table 13 ).", "ARS will assume ownership of the National Bio and Agro-Defense Facility (NBAF) in FY2019 from the Department of Homeland Security (DHS). The FY2019 enacted bill provides $10.6 million to address one-time costs associated with the transfer of the science program from the Plum Island Animal Disease Center to NBAF, and $42.0 million to address stand-up activities and other initial costs to operate and maintain the new facility. NBAF is expected to be fully operational by December 31, 2022. From the total salaries and expenses appropriation for FY2020, the Administration is requesting $13.1 million for NBAF. The FY2019 enacted bill provides an additional $5.0 million for ARS to increase research efforts on foreign animal diseases, and an additional $2.0 million to expand research on resilient dryland farming. ", "FY2019 conference report language ( H.Rept. 116-9 ) criticized ARS for not reporting a single specific negative finding by Animal and Plant Health Inspection Service (APHIS) inspections of ARS research facilities that use animals as research subjects. The report noted that numerous violations had been found involving death and serious health issues of animal subjects, and directed ARS to submit a report within 60 days of enactment covering all violations found by APHIS and the actions taken to prevent them from recurring. ", "P.L. 116-9 does not support the Administration's request to terminate or redirect various ARS research programs, or the closure of ARS research locations. "], "subsections": []}, {"section_title": "National Institute of Food and Agriculture", "paragraphs": ["The National Institute of Food and Agriculture (NIFA) provides federal funding for research, education, and extension projects conducted in partnership with State Agricultural Experiment Stations, the State Cooperative Extension System, land grant universities, colleges, and other research and education institutions, as well as individual researchers. These partnerships include the 1862 land-grant institutions, 1890 historically black colleges and universities (HBCUs) established by the Morrill Acts, the 1994 tribal land-grant colleges, and Hispanic-serving institutions. Federal funds enhance research capacity at universities and institutions through statutory formula funding, competitive awards, and grants.", "For FY2019, P.L. 116-6 provides $1,471.3 billion in discretionary spending for NIFA activities. The Administration's FY2020 request for NIFA is $1,391.7 billion, a reduction of $79.6 million (5.4%) from FY2019 ( Table 13 ). The enacted bill provides $259.0 million to support Hatch Act formula funding for 1862 land grant university research and education activities. For FY2020, the Administration is requesting $243.2 million for Hatch Act funding, a 6.1% reduction. For Evans-Allen formula funding to the 19 HBCUs, the FY2019 bill provides $58.0 million for research and $19.3 million for education grants. The Administration requests $53.8 million in Evans-Allen funding for FY2020 (7.2% reduction from FY2019), and $18.7 million for education grants. For research grants to the 1994 Tribal institutions, and for education grants to Alaska Native and Native Hawaiian-Serving institutions, the FY2019 appropriation provides $3.8 and $3.2 million, respectively. For FY2020, the Administration requests $3.4 million for the 1994 Tribal institutions, and $0 for education grants to the Alaska Native and Native Hawaiian-Serving institutions.", "For McIntire-Stennis cooperative forestry research support, P.L. 116-6 provides $36.0 million for FY2019. The Administration is requesting $28.9 million for FY2020, approximately 20% less than FY2019. The FY2019 appropriation also provides $37.0 million for the Sustainable Agriculture Research and Education program. The Administration requests a reduction of $18.0 million (48.6%) for the program in FY2020.", "The FY2019 enacted bill provides $415.0 million for the Agriculture and Food Research Initiative (AFRI)\u2014USDA's flagship competitive research grants program. The Administration is requesting $500.0 million for the program in FY2020, a 20.5% increase over FY2019. This budget item currently represents about 30% of the total NIFA discretionary budget. ", "For Cooperative Extension support at 1862 land grant universities under the Smith-Lever Act, Sections (b) and (c) formula funding for FY2019, the enacted appropriation provides a total of $315.0 million for these extension activities. The Administration requests $299.4 million for these programs in FY2020. The Smith-Lever Sections (b) and (c) programs include extension services at the HBCUs and the 1994 Tribal colleges, faculty improvement grants to HBCUs, and women and minorities in STEM fields, among other programs. ", "P.L. 116-6 provides $86.6 million for Smith-Lever 3(d) activities, including food and nutrition education, new technologies for agricultural extension, and children, youth, and families at risk. For FY2020, the Administration is requesting $58.1 million for Smith-Lever Section 3(d) funding, $55.1 million of which would support the Expanded Food and Nutrition Education Program, and $3.0 million would support Federally-Recognized Tribes Extension Program for programs on American Indian Reservations and Tribal jurisdictions. The Administration is requesting $0 funding in FY2020 for other Smith-Lever Section 3(d) programs. "], "subsections": []}, {"section_title": "National Agricultural Statistics Service", "paragraphs": ["The National Agricultural Statistics Service conducts the quinquennial Census of Agriculture and provides official statistics on agricultural production and indicators of the economic and environmental status of the farm sector. ", "For FY2019, P.L. 116-6 provides $174.5 million to NASS, of which up to $45.3 million is reserved to support the 2017 Census of Agriculture. The enacted bill also provides $600,000 for the Geospatial Improvement Initiative and an increase of $500,000 for the Floriculture Crops Report. The Administration is requesting $163.0 million for NASS in FY2020, and up to $45.3 million to support the 2017 Census. Results of the 2017 Census of Agriculture were released on April 11, 2019."], "subsections": []}, {"section_title": "Economic Research Service", "paragraphs": ["The Economic Research Service supports economic and social science analysis about agriculture, rural development, food, commodity markets, and the environment. It also collects and disseminates data concerning USDA programs and policies. ERS is one of 13 \"principal statistical agencies\" of the Federal Statistical System of the United States.", "For FY2019, P.L. 116-6 provides $86.8 million for ERS activities. The Administration has requested $60.5 million for ERS in FY2020, a 30.3% decrease. "], "subsections": []}]}, {"section_title": "Department of Commerce", "paragraphs": ["Two agencies of the Department of Commerce have major R&D programs: the National Institute of Standards and Technology (NIST) and the National Oceanic and Atmospheric Administration (NOAA). "], "subsections": [{"section_title": "National Institute of Standards and Technology67", "paragraphs": ["The mission of the National Institute of Standards and Technology is \"to promote U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology in ways that enhance economic security and improve our quality of life.\" NIST research provides measurement, calibration, and quality assurance methods and techniques that support U.S. commerce, technological progress, product reliability, manufacturing processes, and public safety. NIST's responsibilities include the development, maintenance, and custodial retention of the national standards of measurement; providing the means and methods for making measurements consistent with those standards; and ensuring the compatibility of U.S. national measurement standards with those of other nations.", "The President is requesting $686.8 million for NIST in FY2020, a decrease of $298.7 million (30.3%) from the FY2019 enacted appropriation of $985.5 million. (See Table 14 .) NIST discretionary funding is provided through three accounts: Scientific and Technical Research and Services (STRS), Industrial Technology Services (ITS), and Construction of Research Facilities (CRF). ", "The President's FY2020 request includes $611.7 million for R&D, standards coordination, and related services in the STRS account, a decrease of $112.8 million (15.6%) from the FY2019 level.", "The FY2020 request would provide $15.2 million for the ITS account, down $139.8 million (90.2%) from FY2019. Within the ITS account, the request would provide no funding for the Manufacturing Extension Partnership (MEP) program, a reduction of $140.0 million from FY2019; MEP centers in each state would be required to become entirely self-supporting. In his FY2019 request, President Trump proposed ending federal funding for MEP; in his FY2018 request, the President sought $6.0 million \"for an orderly shutdown of the program.\" The request provides $15.2 million provided for Manufacturing USA (also referred to as the National Network for Manufacturing Innovation or NNMI), slightly higher than the FY2019 level of $15.0 million. Of these funds, approximately $10 million would be for continued support of the NIST-sponsored National Institute for Innovation in Manufacturing Biopharmaceuticals (NIIMBL), with the balance (approximately $5 million) to be used for coordination of the Manufacturing USA network.", "The President is requesting $59.9 million for the NIST CRF account for FY2020, down $46.1 million (43.5%) from the FY2019 enacted level. "], "subsections": []}, {"section_title": "National Oceanic and Atmospheric Administration73", "paragraphs": ["The National Oceanic and Atmospheric Administration (NOAA) conducts scientific research in areas such as ecosystems, climate, global climate change, weather, and oceans; collects and provides data on the oceans and atmosphere; and manages coastal and marine organisms and environments. NOAA was created in 1970 by Reorganization Plan No. 4. The reorganization was intended to unify elements of the nation's environmental programs and to provide a systematic approach for monitoring, analyzing, and protecting the environment. ", "NOAA's administrative structure is organized by six line offices that reflect its diverse mission: the National Ocean Service (NOS); National Marine Fisheries Service (NMFS); National Environmental Satellite, Data, and Information Service (NESDIS); National Weather Service (NWS); Office of Oceanic and Atmospheric Research (OAR); and the Office of Marine and Aviation Operations (OMAO). The line offices are supported by an additional office, Mission Support, which provides cross-cutting administrative functions related to planning, information technology, human resources, and infrastructure. Congress provides most of the discretionary funding for the line offices and Mission Support through two accounts: (1) Operations, Research, and Facilities, and (2) Procurement, Acquisition, and Construction.", "In 2010, NOAA published its Next Generation Strategic Plan . The strategic plan is organized into four categories of long-term goals including (1) climate adaptation and mitigation, (2) a weather-ready nation, (3) healthy oceans, and (4) resilient coastal communities and economies. The strategic plan also lists three groups of enterprise objectives related to (1) stakeholder engagement, (2) data and observations, and (3) integrated environmental modeling. The strategic plan serves as a guide for NOAA's five-year R&D plan. The most recent five-year R&D plan was published in 2013, and includes R&D objectives to reach strategic plan goals and objectives and targets to track progress toward R&D objectives over time. ", "One of the main challenges identified in the NOAA R&D plan is the need to integrate the diverse perspectives and professional expertise required by the agency's mission. The plan states that \"holistically understanding the earth system is not only understanding its individual components, but understanding and interpreting the way each of the components interact and behave as an integrated composite that is more than the sum of its parts.\"", "For FY2020, President Trump requested $651.1 million in R&D funding for NOAA, a decrease of $286.9 million (30.6%) below the FY2019 enacted level of $938.0 million. For FY2019, Congress enacted $540.3 million for research (57.6% of total R&D funding), $162.5 million for development (17.3%), and $235.2 million for R&D equipment (25.1%). The enacted FY2019 total R&D amount was 17.0% of NOAA's total discretionary budget authority of $5.509 billion. In FY2020, the President is requesting $352.3 million for research (54.1% of total R&D funding), $106.3 million for development (16.3%), and $192.6 million for R&D equipment (29.6%). The President's request for total R&D is 14.1% of NOAA's total discretionary budget authority request of $4.622 billion.", " Table 15 provides R&D funding levels for FY2019 enacted and the Administration's FY2020 request for each NOAA office. OAR accounts for the majority of R&D in most years. The President is requesting $335.1 million for OAR R&D in FY2020, a decrease of $196.2 million (36.9%) below the FY2019 enacted funding level of $531.4 million. ", "OAR conducts research in three major areas: (1) weather and air chemistry; (2) climate; and (3) oceans, coasts, and the Great Lakes. A significant portion of these efforts is implemented through NOAA laboratories and cooperative research institutes. NOAA supports 16 cooperative research institutes and 10 NOAA laboratories in OAR's three research areas. The President's FY2020 request would fund the cooperative institutes and laboratories at $169.6 million, $13.1 million (7.2%) less than the FY2019 enacted funding level of $182.8 million. ", "Among other R&D activities, the President's FY2019 request would also reduce funding to the National Sea Grant College Program. The National Sea Grant College Program is composed of 33 university-based state programs and supports scientific research and stakeholder engagement to identify and solve problems faced by coastal communities. The President's FY2020 request would terminate federal support of the National Sea Grant College Program and its related Marine Aquaculture Research program. In FY2019, Congress appropriated $68.0 million to the National Sea Grant College Program and $12.0 million to the Marine Aquaculture Research program. "], "subsections": []}]}, {"section_title": "Department of the Interior88", "paragraphs": ["The Department of the Interior (DOI) was created to conserve and manage the nation's natural resources and cultural heritage, to provide scientific and other information about those resources, and to uphold \"the nation's trust responsibilities or special commitments to American Indians, Alaska Natives, and affiliated island communities to help them prosper.\" DOI has a wide range of responsibilities including, among other things, mapping, geological, hydrological, and biological science; migratory bird, wildlife, and endangered species conservation; surface-mined lands protection and restoration; and historic preservation.", "Because final FY2019 funding was not available at the time the FY2020 budget was prepared, requested R&D funding is compared to the FY2018 actual funding.", "The Administration is requesting $12.6 billion in net discretionary funding for DOI in FY2020. Of that amount, $757 million is requested for R&D funding, $148 million (16.3%) below the FY2018 actual level of $905 million. Of the President's FY2020 DOI R&D funding request, 8.9% is for basic research, 73.3% is for applied research, and 17.8% is for development. The U.S. Geological Survey (USGS) is the only DOI component that conducts basic research.", "Funding for DOI R&D is generally included in appropriations line items that also include non-R&D activities. How much of the funding provided in appropriations legislation is allocated to R&D specifically is unclear unless funding is provided at the precise level of the request. In general, R&D funding levels are known only after DOI components allocate their appropriations to specific activities and report those figures."], "subsections": [{"section_title": "U.S. Geological Survey", "paragraphs": ["The USGS accounts for approximately two-thirds of all DOI R&D funding. A single appropriations account, Surveys, Investigations, and Research (SIR), provides all USGS funding. USGS R&D is conducted under seven SIR activity/program areas: Ecosystems; Land Resources; Energy, Minerals, and Environmental Health; Natural Hazards; Water Resources; Core Science Systems; and Science Support.", "The President's total FY2020 budget request for USGS is $984 million. Of this amount, $481 million would be for R&D, a decrease of $119 million (19.8%) from the FY2018 enacted level of $600 million."], "subsections": []}, {"section_title": "Other DOI Components", "paragraphs": ["The President's FY2020 request also includes R&D funding for the following DOI components:", "Bureau of Reclamation (BOR): $84.0 million in applied research and development funding for FY2020, down $26.4 million (23.9%) from FY2018. Bureau of Ocean Energy Management (BOEM): $100.4 million in applied research and development funding for FY2020, up $22.1 million (28.2%) from FY2018\u2014the only component that would receive an increase in R&D funding. Fish and Wildlife Service (FWS): $15.5 million in applied research for FY2020, down $17.2 million (52.5%) from FY2018. National Park Service (NPS): $25.9 million in applied research and development for FY2020, down $1.1 million (4.2%) from FY2018. Bureau of Safety and Environmental Enforcement (BSEE): $24.5 million in applied research for FY2020, down $2.2 million (8.2%) from FY2018. Bureau of Land Management (BLM): $19.0 million in applied research and development for FY2020, down $1.9 million (9.0%) from FY2018. Bureau of Indian Affairs (BIA): $5.0 million in applied research for FY2020, equal to the actual amount from FY2018. Wildland Fire Management (WFM): No funding requested for R&D for FY2020, down $3.0 million (100.0%) from FY2018. Office of Surface Mining Reclamation and Enforcement (OSMRE): $1.5 million in applied research for FY2020, up $970,000 (190%) from FY2018.", " Table 16 summarizes FY2018 actual R&D funding and the President's FY2020 R&D funding request for DOI components."], "subsections": []}]}, {"section_title": "Department of Veterans Affairs96", "paragraphs": ["The Department of Veterans Affairs (VA) operates and maintains a national health care delivery system to provide eligible veterans with medical care, benefits, and social support. As part of the agency's mission, it seeks to advance medical R&D in areas most relevant to the diseases and conditions that affect the health care needs of veterans.", "The President is proposing $1.4 billion for VA R&D in FY2020, an increase of $12 million (1%) from FY2019. (See Table 17 .) VA R&D is funded through two accounts\u2014the Medical and Prosthetic Research account and the Medical Care Support account. The Medical Care Support account also includes non-R&D funding, and the amount of funding that will be allocated to support R&D through appropriations legislation is unclear unless funding is provided at the precise level of the request. In general, R&D funding levels from the Medical Care Support account are only known after the VA allocates its appropriations to specific activities and reports those figures. The Medical Care Support account provides administrative and other support for VA researchers and R&D projects, including infrastructure maintenance. The FY2020 request includes $762 million for VA's Medical and Prosthetic Research account, a decrease of $17 million (2%), and $648 million in funding for research supported by the agency's Medical Care Support account, an increase of $29 million (5%). ", "According to the President's request, FY2020 strategic priorities for VA R&D include increasing the access of veterans to clinical trials; increasing the transfer and translation of VA R&D; and \"transforming VA data into a national resource\" by reducing the time and effort needed to appropriately access, properly understand, and effectively use VA data for research. Clinical priorities for VA R&D in FY2020 include efforts to treat veterans at risk of suicide and research to address chronic pain and opioid addiction, posttraumatic stress disorder, traumatic brain injury, and Gulf War illness.", "The Medical and Prosthetics R&D program is an intramural program managed by the Veteran Health Administration's Office of Research and Development (ORD) and conducted at VA Medical Centers and VA-approved sites nationwide. According to ORD, the mission of VA R&D is \"to improve Veterans' health and well-being via basic, translational, clinical, health services, and rehabilitative research and to apply scientific knowledge to develop effective individualized care solutions for Veterans.\" ORD consists of four main research services each headed by a director:", "Biomedical Laboratory R&D conducts preclinical research to understand life processes at the molecular, genomic, and physiological levels. Clinical Science R&D supports clinical trials and other human subjects research to determine the feasibility and effectiveness of new treatments such as drugs, therapies, or devices, compare existing therapies, and improve clinical care and practice. Health Services R&D conducts studies to identify and promote effective and efficient strategies to improve the quality and accessibility of the VA health system and patient outcomes, and to minimize health care costs. Rehabilitation R&D conducts research and develops novel approaches to improving the quality of life of impaired and disabled veterans.", "In addition to intramural support, VA researchers are eligible to obtain funding for their research from extramural sources, including other federal agencies, private foundations and health organizations, and commercial entities. According to the President's FY2020 budget request, these additional R&D resources are estimated at $570 million in FY2020. However, unlike other federal agencies, such as the National Institutes of Health and the Department of Defense, VA does not have the authority to support extramural R&D by providing research grants to colleges, universities, or other non-VA entities. ", " Table 17 summarizes R&D program funding for VA in the Medical and Prosthetic Research and the Medical Care Support accounts. Table 18 details amounts to be spent in Designated Research Areas (DRAs), which VA describes as \"areas of importance to our veteran patient population.\" Funding for research projects that span multiple areas may be included in several DRAs; thus, the amounts in Table 18 total to more than the appropriation or request for VA R&D."], "subsections": []}, {"section_title": "Department of Transportation98", "paragraphs": ["The Department of Transportation (DOT) was established by the Department of Transportation Act (P.L. 89-670) on October 15, 1966. The primary purposes of DOT research and development activities as defined by Section 6019 of the Fixing America's Surface Transportation Act ( P.L. 114-94 ) are improving mobility of people and goods; reducing congestion; promoting safety; improving the durability and extending the life of transportation infrastructure; preserving the environment; and preserving the existing transportation system.", "Funding for DOT R&D is generally included in appropriations line items that also include non-R&D activities. The amount of the funding provided by appropriations legislation that is allocated to R&D is unclear unless funding is provided at the precise level of the request. In general, R&D funding levels are known only after DOT agencies allocate their final appropriations to specific activities and report those figures.", "The Administration is requesting $1.089 billion for DOT R&D activities and facilities in FY2020, a decrease of $5.8 million (0.5%) from FY2019. (See Table 19 .) Three DOT agencies\u2014the Federal Aviation Administration (FAA), the Federal Highway Administration (FHWA), and the National Highway Traffic Safety Administration (NHTSA)\u2014would account for over 90% of DOT R&D under the FY2020 request."], "subsections": [{"section_title": "Federal Aviation Administration", "paragraphs": ["The President's FY2020 request of $512.3 million for R&D activities and facilities at FAA would be an increase of $10.4 million (2.1%) from FY2019. The request includes $120 million for the agency's Research, Engineering, and Development (RE&D) account, a reduction of $71.1 million (37.2%) from FY2019. Funding within the RE&D account seeks to improve aircraft safety through research in fields such as fire safety, advanced materials, propulsion systems, aircraft icing, and continued airworthiness, in addition to safety research related to unmanned aircraft systems and the integration of commercial space operations into the national airspace. "], "subsections": []}, {"section_title": "Federal Highway Administration", "paragraphs": ["According to the President's budget request ", "FHWA's contributions to researching and implementing transformative innovations and technologies are changing the way roads, bridges, and other facilities are planned, designed, built, managed, and maintained across the country to be more responsive to current and future needs. ", "The President's request of $420 million for R&D activities and facilities at FHWA would be an increase of $39 million (10.2%) from FY2019. The request includes $125 million for FHWA's Highway Research and Development program, which seeks to improve safety, enhance the design and construction of transportation infrastructure, provide data and analysis for decision-making, and reduce congestion. The program supports highway research in such areas as the impact of automated driving systems, infrastructure durability, resilience, and environmental sustainability, and the factors that contribute to death and injury related to roadway design, construction, and maintenance. The request also includes $100 million for research to facilitate the development of a connected, integrated, and automated transportation system under the agency's Intelligent Transportation Systems program. "], "subsections": []}, {"section_title": "National Highway Traffic Safety Administration", "paragraphs": ["The President is requesting $62.1 million in R&D and R&D facilities funding in FY2020 for NHTSA, $13.8 million (18.2%) below FY2019. NHTSA R&D focuses on automation and the study of human machine interfaces, advanced vehicle safety technology, ways of improving vehicle crashworthiness and crash avoidance, reducing unsafe driving behaviors, and alternative fuels vehicle safety."], "subsections": []}, {"section_title": "Other DOT Components", "paragraphs": ["R&D activities are also supported by several other DOT components or agencies (see Table 19 ). The President's FY2020 request includes DOT R&D and R&D facilities funding for ", "the Federal Railroad Administration (FRA), totaling $23.1 million, $21.6 million (48.3%) below the FY2019 level of $44.6 million; the Federal Transit Administration (FTA), totaling $28 million, $2 million (6.7%) below the FY2019 level of $30 million; the Pipeline and Hazardous Materials Safety Administration (PHMSA), totaling $21.5 million, $3 million (12.1%) below the FY2019 level of $24.5 million; the Office of the Secretary (OST), totaling $13.1 million, $14.8 million (53.2%) below the FY2019 level of $27.9 million; and the Federal Motor Carrier Safety Administration (FMCSA), totaling $9.1 million, the same amount as FY2019."], "subsections": []}]}, {"section_title": "Department of Homeland Security100", "paragraphs": ["The Department of Homeland Security (DHS) has identified five core missions: to prevent terrorism and enhance security, to secure and manage the borders, to enforce and administer immigration laws, to safeguard and secure cyberspace, and to ensure resilience to disasters. New technology resulting from research and development can contribute to achieving all these goals. The Directorate of Science and Technology (S&T) has primary responsibility for establishing, administering, and coordinating DHS R&D activities. Other components, such as the Countering Weapons of Mass Destruction Office, the U.S. Coast Guard, and the Transportation Security Administration, conduct R&D relating to their specific missions.", "The President's FY2020 budget request for DHS includes $438 million for activities identified as R&D. This would be a reduction of 31.6% from $640 million in FY2019. The total includes $303 million for the S&T Directorate and smaller amounts for six other DHS components. See Table 20 .", "The S&T Directorate performs R&D in several laboratories of its own and funds R&D performed by the DOE national laboratories, industry, universities, and others. It also conducts testing and other technology-related activities in support of acquisitions by other DHS components. The Administration's FY2020 request of $303 million for the S&T Directorate R&D account is a decrease of 40.7% from $511 million in FY2019. The request includes no funding for cybersecurity R&D ($89.1 million in FY2019), which would instead be conducted in the Cybersecurity Infrastructure Security Agency ($31 million for R&D in the FY2020 request, up from $13 million in FY2019). The remaining thrust areas in the S&T Directorate's Research, Development, and Innovation budget line would all decrease, by amounts ranging from 12.1% (Counter Terrorist) to 40.4% (Border Security). Funding for University Centers of Excellence would decrease from $37 million in FY2019 to $18 million in FY2020.", "In addition to its R&D account, the S&T Directorate receives funding for laboratory facilities and other R&D-related expenses through its Operations and Support account (not shown in the table). In this account, the FY2020 request for Laboratory Facilities is $116 million, down 4.9% from $122 million in FY2019. The Laboratory Facilities request includes no funding for the National Urban Security Technology Laboratory, which the Administration proposes to close, or for the National Bio and Agro-Defense Facility (NBAF), which the S&T Directorate is building using previously appropriated funds but will transfer to the USDA once it becomes operational. Requested funding in Laboratory Facilities for the National Biodefense Analysis and Countermeasures Center (NBACC) is $29 million, the same as in FY2019.", "The request for R&D in the Countering Weapons of Mass Destruction Office is $68 million, down from $83 million in FY2019."], "subsections": []}, {"section_title": "Environmental Protection Agency101", "paragraphs": ["The U.S. Environmental Protection Agency (EPA), the federal regulatory agency responsible for administering a number of environmental pollution control laws, funds a broad range of R&D activities to provide scientific tools and knowledge that support decisions relating to preventing, regulating, and abating environmental pollution. Since FY2006, Congress has funded EPA through the Interior, Environment, and Related Agencies appropriations acts.", "Appropriations for EPA R&D are generally included in line-items that also include non-R&D activities. Annual appropriations bills and the accompanying committee reports do not identify precisely how much funding provided in appropriations bills is allocated to EPA R&D alone. EPA determines its R&D funding levels in operation through allocating its appropriations to specific activities and reporting those amounts. ", "The agency's Science and Technology (S&T) appropriations account funds much of EPA's scientific research activities, which include R&D conducted by the agency at its own laboratories and facilities, and R&D and related scientific research conducted by universities, foundations, and other nonfederal entities that receive EPA grants. The S&T account receives a base appropriation and a transfer from the Hazardous Substance Superfund (Superfund) account for research on more effective methods remediating contaminated sites.", "EPA's Office of Research and Development (ORD) is the primary manager of R&D at EPA headquarters and laboratories around the country, as well as external R&D. A large portion of the S&T account funds EPA R&D activities managed by ORD, including research grants. Programs implemented by other offices within EPA also may have a research component, but the research component is not necessarily the primary focus of the program.", "As with the President's FY2019 budget request, the FY2020 request proposes reductions and eliminations of funding for FY2020 across a number of EPA programs and activities. The President's FY2020 request includes a total of $6.07 billion for EPA, $2.78 billion (31%) less than the total $8.85 billion FY2019 enacted appropriations for EPA (after rescissions) provided in Titles II and IV of Division E of the Consolidated Appropriations Act, FY2019 ( P.L. 116-6 ), and $123.4 million (2%) less than the FY2019 request of $6.19 billion for EPA. The reductions proposed in the FY2020 request are distributed across EPA operational functions and activities as well as grants for states, tribes, and local governments. With the exception of the Building and Facilities account, the President's FY2020 request proposes funding reductions below FY2019 enacted levels for the nine other EPA appropriations accounts, although funding for some program areas within the accounts would remain constant or increase. Some Members of Congress expressed concerns regarding proposed reductions of funding for EPA scientific research programs during hearings on the President's FY2020 budget request.", "Including a $17.8 million transfer from the Superfund account, the President's FY2020 budget request proposes $480.8 million for EPA's S&T account, $241.1 million (33.4%) less than the FY2019 enacted $722.0 million which includes a $15.5 million transfer and $11.3 million account specific rescissions. The FY2020 request would provide an increase (3.1%) compared to the FY2019 request of $466.4 million, which includes a $17.4 million transfer. The President's FY2020 request proposes a rescission for EPA but does not specify a rescission within the S&T or other appropriations accounts. This accounting difference does not allow for direct comparisons of funding within EPA's S&T account including specific rescissions. ", " Table 21 at the end of this section includes the President's FY2020 request for program areas and activities within EPA's S&T account as presented in EPA's FY20 20 Congressional Budget Justification compared to the FY2019 enacted appropriations as reported in the Conference Report ( H.Rept. 116-9 ) accompanying the FY2019 consolidated appropriations that includes the Department of Interior, Environment, and Related Agencies appropriations. ", "Consistent with other recent House and Senate Appropriations Committee reports and explanatory statements, the conference report H.Rept. 116-9 accompanying the FY2019 enacted appropriations did not specify funding for all subprogram areas reported in EPA's budget justification. S&T subprogram areas not reported in congressional reports and statements are noted in the Table 21 as \"NR\" (not reported). Additionally, the President's FY2018, FY2019, and FY2020 requests and EPA's congressional budget justifications have modified the titles for some of the program areas relative to previous Administrations' budget requests and congressional committee reports' presentations. The House and Senate Appropriations Committees have generally adopted the modified program area titles as presented in the recent budget requests.", "During House and Senate Committee hearings regarding the President's FY2020 budget request for EPA, Members generally did not support a number of the proposed reductions and eliminations of funding for EPA, including proposed reductions in funding for scientific research programs. Reductions proposed in the FY2020 budget request below the FY2019 enacted levels were distributed across EPA operational functions and activities as well as grants for states, tribes, and local governments.", "As shown in Table 21 , with few exceptions the requested FY2020 amount for the S&T account for individual EPA program area and activity line items would be less than the FY2019 enacted appropriations. The FY2020 request did not propose to completely eliminate funding for the broader program areas; however, eliminations (no funding is requested for FY2020) are proposed for line-item activities below the program areas as indicated in Table 21 . These program areas include", "Atmospheric Protection Program (formerly GHG [greenhouse gas] Reporting Program and Climate Protection Program), Indoor Air Radon Program, and Reduce Risks from Indoor Air. ", "For other program areas, proposed reductions in funding included eliminations of certain programs. For example, the proposed reduction in funding for Research: Air and Energy, Research: Safe and Sustainable Water Resources, Research: Sustainable and Healthy Communities, and Research: Chemical Safety and Sustainability program areas for FY2020 included the proposed elimination of funding for the Science to Achieve Results (STAR) program.", "P.L. 116-6 included $5.0 million for Research: National Priorities within the S&T account for FY2019, an increase compared to $4.1 million included for FY2018. As in the previous Administration's fiscal year requests, the President's FY2020 budget request did not include funding for Research: National Priorities.", "In addition to clarifying certain funding allocations within the S&T account and consistent with the prior fiscal year appropriations committee reports and explanatory statements, H.Rept. 116-9 provided additional guidance for certain program areas and activities within the S&T account for FY2019. Topics expressly referenced included", "Alternative Testing;", "Computational Toxicology;", "Enhanced Aquifer Use;", "Integrated Risk Information System (IRIS);", "Nanomaterials Research;", "Innovative Research Partnerships;", "Intramural Animal Testing;", "Science to Achieve Results (STAR) Grants;", "Harmful Algal Blooms; ", "Water Distribution Systems; and ", "Water Security Test Beds.", "The size and structure of the agency's workforce, as was the case during consideration for the FY2018 and FY2019 appropriations, has been a topic of debate during congressional committee hearings regarding EPA's FY2020 appropriations. Workforce reshaping was introduced in the FY2018 request and described as agency-wide organizational restructuring, \"reprioritization of agency activities,\" and reallocation of resources. The FY2020 request for the Operations and Administration program area within the S&T account includes $6.0 million for agency workforce reshaping and efforts to improve the management of EPA's laboratories. As with the FY2018 enacted appropriations, P.L. 116-6 did not fund the President's FY2019 request for EPA workforce reshaping for FY2019.", "EPA's reported proposed reorganizing strategies, potentially impacting certain aspects of EPA's Office of Research Development (ORD) and the operations of the EPA Office of the Science Advisor (OSA), as well as current EPA laboratories including the National Exposure Research Laboratory (NERL), the National Health and Environmental Effects Research Laboratory (NHEERL), and the National Risk Management Research Laboratory (NRMRL), have also been of interest to some Members of Congress.", "Appendix A. Acronyms and Abbreviations", "Appendix B. CRS Contacts for Agency R&D", "The following table lists the primary CRS experts on R&D funding for the agencies covered in this report."], "subsections": []}]}}
{"id": "RL34619", "title": "Use of the Capitol Rotunda, Capitol Grounds, and Emancipation Hall: Concurrent Resolutions, 101st to 115th Congresses", "released_date": "2019-01-28T00:00:00", "summary": ["The Capitol Rotunda and the Capitol Grounds have been used as the setting for a variety of events, ranging from memorial ceremonies and the reception of foreign dignitaries to the presentation of awards and the hosting of public competitions. This report identifies and categorizes uses of the Capitol Rotunda and Capitol Grounds authorized by concurrent resolutions since the 101st Congress.", "In most cases, use of the Capitol Rotunda requires a concurrent resolution agreed to by both the House and Senate. A concurrent resolution for the use of the Rotunda typically identifies the event and date for which use is authorized. Often, the resolution also directs physical preparations to be carried out under the supervision of the Architect of the Capitol.", "Ninety-nine concurrent resolutions were agreed to by the House and the Senate authorizing the use of the Rotunda between the 101st and the 115th Congresses. These resolutions can be divided into seven categories: (1) commemoration ceremonies; (2) Congressional Gold Medal ceremonies; (3) artwork unveilings; (4) presidential inauguration activities; (5) receptions or ceremonies honoring living people; (6) persons lying in state or honor; and (7) prayer vigils.", "Use of the Capitol Grounds can be authorized either by the passage of a concurrent resolution or through an application process with the Capitol Police. A concurrent resolution is typically needed for events longer than 24 hours in duration, for events that require vehicles on the Capitol Grounds for setup, for events requiring electronics on the Lower West Terrace of the Capitol, and for events where a large number of Members will be in attendance. The Capitol Police's special events office handles permits and approval for all other events.", "One hundred twelve concurrent resolutions were agreed to by the House and the Senate authorizing the use of the Capitol Grounds between the 101st and the 115th Congresses. These resolutions can be divided into four categories: (1) events sponsored by nonfederal-government groups; (2) memorial services; (3) events sponsored by the federal government; and (4) award and dedication ceremonies.", "Upon the completion and opening of the Capitol Visitor Center (CVC) during the 110th Congress, Emancipation Hall of the CVC became available for use in the same manner as the Rotunda and Capitol Grounds. Use of Emancipation Hall requires the passage of a resolution agreed to by both houses of Congress authorizing its use. These resolutions can be divided into four categories: (1) commemoration ceremonies, (2) congressional gold medal ceremonies, (3) artwork unveilings, and (4) presidential inauguration activities. As of the date of this report, 43 concurrent resolutions authorizing the use of Emancipation Hall have been agreed to.", "This report will be updated at the end of each session of Congress."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Both the Capitol Rotunda and the Capitol Grounds have been used as the setting for a variety of events, ranging from memorial ceremonies and the reception of foreign dignitaries to the presentation of awards and the hosting of public competitions. This report identifies and categorizes uses of the Capitol Rotunda and Capitol Grounds authorized by concurrent resolutions since the 101 st Congress.", "In most cases, use of the Capitol Rotunda requires a concurrent resolution agreed to by both the House and Senate. A concurrent resolution for the use of the Rotunda typically identifies the event and date for which use is authorized. Often, the resolution also directs physical preparations to be carried out \"in accordance with such conditions as the Architect of the Capitol may provide.\"", "Use of the Capitol Grounds requires either the passage of a concurrent resolution or permit approval from the Capitol Police. Events that entail the use of the West Front Steps of the Capitol, electricity on the Lower West Terrace of the Capitol, require more than 24 hours from setup to cleanup, require vehicles on Capitol Grounds for setup, or will have a large number of Members in attendance typically require a concurrent resolution. All other events can typically be issued permits by the U.S. Capitol Police.", "Upon the completion and opening of the Capitol Visitor Center (CVC) during the 110 th Congress, Emancipation Hall of the CVC became available for use in the same manner as the Rotunda and Capitol Grounds. Use of Emancipation Hall requires the passage of a resolution agreed to by both houses of Congress authorizing its use.", "Additionally, Congress has provided an ongoing authorization for holiday concerts on Capitol Grounds. Held on Memorial Day, the Fourth of July, and Labor Day, these concerts feature the National Symphony Orchestra and are free and open to the public."], "subsections": []}, {"section_title": "Concurrent Resolutions for Use of the Rotunda", "paragraphs": [], "subsections": [{"section_title": "Methodology", "paragraphs": ["A database search was conducted using Congress.gov for the 101 st through the 115 th Congresses (1989-2018). The search was conducted by running a query across all agreed-to concurrent resolutions using the subject term \"rotunda.\" The results of the search were then examined individually to differentiate resolutions for the use of the Rotunda from references to it in otherwise unrelated legislation."], "subsections": []}, {"section_title": "Results", "paragraphs": ["The search identified a total of 99 concurrent resolutions that were agreed to by the House and Senate. Between the 101 st Congress and the 115 th Congress, the House and Senate agreed to between one and nine concurrent resolutions per Congress that authorized the use of the Rotunda. Table 1 reports the total number of resolutions agreed to in each Congress.", " Appendix A , which lists the results of the database search, provides the following information for each concurrent resolution: the Congress in which the resolution was introduced, the resolution number, and the subject of the resolution.", "Concurrent resolutions authorizing the use of the Rotunda can be divided into seven categories: (1) commemoration ceremonies; (2) Congressional Gold Medal ceremonies; (3) artwork unveilings; (4) presidential inauguration activities; (5) receptions or ceremonies honoring living people; (6) persons lying in state or honor; and (7) prayer vigils. The following sections provide a brief explanation of each category and examples of activities. Table 2 contains the number of concurrent resolutions agreed to by Congress since 1989, by category."], "subsections": [{"section_title": "Commemoration Ceremonies", "paragraphs": ["The largest percentage of concurrent resolutions (34.3%) authorized the use of the Rotunda for a commemoration ceremony, often of an historical event. For example, concurrent resolutions authorizing the use of the Rotunda for a ceremony as part of the commemoration of the days of remembrance of victims of the Holocaust were passed during each Congress. In recent Congresses, resolutions were also agreed to for Rotunda ceremonies to commemorate the 60 th anniversary of the integration of the U.S. Armed Forces, the 200 th birthday of Constantino Brumidi, the 50 th anniversary of President John F. Kennedy's inauguration, and the 50 th anniversary of the Civil Rights Act of 1964."], "subsections": []}, {"section_title": "Congressional Gold Medal Ceremonies", "paragraphs": ["Ceremonies to award Congressional Gold Medals account for 24.2% of the concurrent resolutions for the use of the Rotunda agreed to since the 101 st Congress. These award ceremonies include presentations of Congressional Gold Medals to Rosa Parks, cartoonist Charles M. Schulz, the Tuskegee Airmen, and other recipients."], "subsections": []}, {"section_title": "Artwork Unveilings", "paragraphs": ["Since the 101 st Congress, 15.2% of concurrent resolutions have been agreed to for the use of the Rotunda for ceremonies to unveil artwork. These have included unveiling ceremonies for portrait busts of former Vice Presidents, as well as presentation ceremonies of statues prior to placement in Statuary Hall."], "subsections": []}, {"section_title": "Presidential Inaugural Activities", "paragraphs": ["In preparation for the quadrennial Presidential inauguration activities that take place at the Capitol, concurrent resolutions were passed during the 102 nd , 104 th , 106 th , 108 th , 110 th , 112 th , 113 th , and 115 th Congresses. These resolutions have authorized the Joint Congressional Committee on Inaugural Ceremonies to use the Rotunda \"in connection with the proceedings and ceremonies conducted for the inauguration of the President-elect and the Vice President-elect of the United States.\" Since the 101 st Congress, 10.1% of concurrent resolutions have authorized the use of the Rotunda for inaugural activities."], "subsections": []}, {"section_title": "Receiving or Honoring Living Persons", "paragraphs": ["Since the 101 st Congress, 6.1% of concurrent resolutions have authorized the use of the Rotunda for the purposes of receiving foreign dignitaries or honoring a living person. For example, during the 102 nd Congress, use of the Rotunda was authorized for a ceremony and reception for the Dalai Lama. During the 105 th Congress, use of the Rotunda was authorized for a ceremony honoring Mother Teresa. During the 114 th Congress, the use of the Rotunda was authorized for events surrounding the visit by His Holiness Pope Francis to address a joint session of Congress."], "subsections": []}, {"section_title": "Persons Lying in State or Honor", "paragraphs": ["Use of the Rotunda for individuals to lie in state or honor accounted for 8.1% of Rotunda events authorized by concurrent resolution. These events have included President Reagan, Senator Claude Pepper, and Senator Daniel K. Inouye lying in state; Rosa Parks lying in honor; and the memorial service for Detective John Michael Gibson and Private First Class Jacob Joseph Chestnut of the U.S. Capitol Police. In the 115 th Congress, one individual\u2014Reverend Billy Graham\u2014lay in honor, while two\u2014Senator John McCain and President George H.W. Bush\u2014lay in state."], "subsections": []}, {"section_title": "Prayer Vigils", "paragraphs": ["On two occasions during the 107 th Congress (2.0%), concurrent resolutions were agreed to for the use of the Rotunda for prayer vigils. H.Con.Res. 233 authorized the use of the Rotunda for a prayer vigil in memory of those who lost their lives on September 11, 2001. S.Con.Res. 83 authorized the use of the Rotunda for a ceremony as part of a National Day of Reconciliation."], "subsections": []}]}]}, {"section_title": "Concurrent Resolutions for Use of the Capitol Grounds", "paragraphs": [], "subsections": [{"section_title": "Methodology", "paragraphs": ["A database search was conducted using Congress.gov for the 101 st to the 115 th Congresses (1989-2019). The search was conducted by running a query using the subject term \"Capitol Grounds.\" The results of the search were then examined individually to differentiate resolutions for the use of the Capitol Grounds from references to it in otherwise unrelated legislation. The uses of the Capitol Grounds identified here are restricted to those authorized by concurrent resolution of the House and Senate."], "subsections": []}, {"section_title": "Results", "paragraphs": ["The search identified a total 112 concurrent resolutions that were agreed to by the House and Senate. Between the 101 st Congress and the 115 th Congress, the House and Senate agreed to between 3 and 14 concurrent resolutions per Congress that authorized the use of the Capitol Grounds. Table 3 reports the total number of resolutions agreed to in each Congress.", " Appendix B , which lists the results of the database search, provides the following information for each concurrent resolution: the Congress in which the resolution was introduced, the resolution number, and the subject of the resolution.", "Concurrent resolutions authorizing the use of the Capitol Grounds can be divided into one of four categories: (1) events sponsored by nonfederal-government groups; (2) memorial services; (3) events sponsored by the federal government; and (4) award and dedication ceremonies. The following sections provide a brief explanation of each category with examples of the types of activities concurrent resolutions provided for on the Capitol Grounds. Table 4 contains the number of concurrent resolutions agreed to by Congress since 1989 by category."], "subsections": [{"section_title": "Nonfederal-Government-Sponsored Events", "paragraphs": ["The largest percentage of concurrent resolutions agreed to (65.5%) authorized events that are sponsored by nonfederal-government entities. For example, concurrent resolutions authorizing the use of the Capitol Grounds for the Greater Washington Soap Box Derby and the District of Columbia Special Olympics Law Enforcement Torch Relay are typically agreed to each Congress."], "subsections": []}, {"section_title": "Memorial Services", "paragraphs": ["Memorial services held on the Capitol Grounds account for 23% of the concurrent resolutions passed since the 101 st Congress. Each year since 1989, the House and Senate have agreed to a concurrent resolution allowing the National Peace Officers' Memorial Service to be conducted on Capitol Grounds. The ceremony honors law enforcement officers who gave their lives in the line of duty during the previous year."], "subsections": []}, {"section_title": "Federal Government Sponsored Events", "paragraphs": ["Events sponsored by the federal government compose 8.8% of events on the Capitol Grounds authorized by concurrent resolution. These events have included authorizing the John F. Kennedy Center for the Performing Arts to hold performances on the East Front of the Capitol, allowing the National Book Festival to run programs on the Capitol Grounds, and authorizing a celebration for the Library of Congress's 200 th birthday."], "subsections": []}, {"section_title": "Award and Dedication Ceremonies", "paragraphs": ["Award and dedication ceremonies account for 2.7% of events authorized by concurrent resolution for the Capitol Grounds. Since 1989, three award and dedication ceremonies have been authorized through concurrent resolution. In the 106 th Congress (1999-2001), Congress authorized the use of the Capitol Grounds for the dedication of the Japanese-American Memorial to Patriotism; in the 108 th Congress (2003-2005), the dedication ceremony for the National World War II Memorial was authorized for the Capitol Grounds; and in the 110 th Congress (2007-2009), the presentation ceremony for the Congressional Gold Medal awarded to Tenzin Gyatso, the Fourteenth Dalai Lama, took place on the Capitol Grounds."], "subsections": []}]}]}, {"section_title": "Use of Emancipation Hall of the Capitol Visitor Center", "paragraphs": ["Upon the completion and opening of the Capitol Visitor Center (CVC) during the 110 th Congress, Emancipation Hall of the CVC became available for use in the same manner as the Rotunda and Capitol Grounds. Use of Emancipation Hall requires the passage of a resolution agreed to by both houses of Congress authorizing its use.", "The first concurrent resolution authorizing the use of Emancipation Hall was agreed to during the 110 th Congress. It provided for the use of the Hall in connection with \"ceremonies and activities held in connection with the opening of the Capitol Visitor Center to the public.\" Consistent with previous resolutions authorizing the use of the Rotunda, the concurrent resolution for the use of Emancipation Hall directed that physical preparations be carried out \"in accordance with such conditions as the Architect of the Capitol may provide.\""], "subsections": [{"section_title": "Methodology", "paragraphs": ["A database search was conducted using Congress.gov for the 110 th through the 115 th Congresses (2007-2017). The search was conducted by running a query using the subject term \"Emancipation Hall.\" The uses of Emancipation Hall identified here are restricted to those authorized by concurrent resolution of the House and Senate."], "subsections": []}, {"section_title": "Results", "paragraphs": ["The search identified a total 43 concurrent resolutions that were agreed to by the House and Senate. Between the 110 th Congress and the 115 th Congress, the House and Senate agreed to between 1 and 15 concurrent resolutions per Congress that authorized the use of Emancipation Hall. Table 5 reports the total number of resolutions agreed to in each Congress.", " Appendix C , which lists the results of the database search, provides the following information for each concurrent resolution: the Congress in which the resolution was introduced, the resolution number, and the subject of the resolution.", "Concurrent resolutions authorizing the use of Emancipation Hall can be divided into one of four categories: (1) commemoration ceremonies, (2) congressional gold medal ceremonies, (3) artwork unveilings, and (4) presidential inauguration activities. The following sections provide a brief explanation of each category with examples of the types of activities concurrent resolutions provided for on Emancipation Hall. Table 6 contains the number of concurrent resolution agreed to by Congress since 2007 by category."], "subsections": [{"section_title": "Commemoration Ceremonies", "paragraphs": ["The largest percentage of concurrent resolutions agreed to (46.5%) authorized the use of Emancipation Hall for commemoration ceremonies. For example, concurrent resolutions authorizing the use of Emancipation Hall are agreed to annually to celebrate the birthday of King Kamehameha."], "subsections": []}, {"section_title": "Congressional Gold Medal Ceremonies", "paragraphs": ["Ceremonies to award Congressional Gold Medals account for 32.6% of the concurrent resolutions for the use of Emancipation Hall agreed to since the 110 th Congress. These award ceremonies include presentations of Congressional Gold Medals to Women Air Force Service Pilots, the Montford Point Marines, and Native American Code Talkers."], "subsections": []}, {"section_title": "Artwork Unveilings", "paragraphs": ["Since the 110 th Congress, 11.6% of concurrent resolutions have been agreed to for the use of Emancipation Hall for ceremonies to unveil artwork. These have included unveiling ceremonies for a bust of Sojourner Truth, a marker acknowledging the role of slaves in building the Capitol, a statue of Frederick Douglass, and the American Prisoners of War/Missing in Action (POW/MIA) Chair of Honor."], "subsections": []}, {"section_title": "Presidential Inauguration Activities", "paragraphs": ["Since Emancipation Hall opened in the middle of the 110 th Congress, Congress has also utilized the space for inaugural activities. Just like the resolutions authorizing the use of the Rotunda for inaugural activities, these resolutions have authorized the Joint Congressional Committee on Inaugural Ceremonies to use Emancipation Hall \"in connection with the proceedings and ceremonies conducted for the inauguration of the President-elect and the Vice President-elect of the United States.\" Since the 110 th Congress, 9.3% of concurrent resolutions have authorized the use of the Rotunda for inaugural activities.", "Appendix A. Concurrent Resolutions for the Use of the Capitol Rotunda", "Appendix B. Concurrent Resolutions for the Use of the Capitol Grounds", "Appendix C. Concurrent Resolutions Agreed to for the Use of Emancipation Hall"], "subsections": []}]}]}]}}
{"id": "RS21852", "title": "The United Arab Emirates (UAE): Issues for U.S. Policy", "released_date": "2019-05-03T00:00:00", "summary": ["The United Arab Emirates (UAE) is a significant U.S. partner in Gulf security, helping to address multiple regional threats by hosting about 5,000 U.S. military personnel at UAE military facilities under a bilateral defense cooperation agreement (DCA). The UAE is a significant buyer of U.S. military equipment, including sophisticated missile defenses, and it reportedly wants to buy the F-35 combat aircraft. The alliance is expected to continue after UAE President Shaykh Khalifa bin Zayid Al Nuhayyan, who suffered an incapacitating stroke in January 2014, is succeeded by his younger brother and de-facto UAE leader Shaykh Muhammad bin Zayid Al Nuhayyan.", "Advised and armed by the United States, the UAE military has become sufficiently capable that the country is able to, and is, asserting itself in the region, including militarily. The UAE is part of a Saudi-led military effort to pressure the Iran-backed Zaidi Shia Houthi rebels in Yemen, an effort to which the United States provides logistical support but which has produced criticism over the effects of the war on Yemen's civilians. UAE forces, alongside U.S. special operations forces, also are combatting Al Qaeda's affiliate in that country. UAE forces have built up several bases in East African countries to train allied forces and facilitate UAE operations in Yemen. The UAE is supporting an anti-Islamist commander based in eastern Libya, Khalifa Hafter, who in April 2019 launched an assault to capture Tripoli from a U.N.-backed government based there. The UAE has sought to counteract criticism by expanding its long-standing donations of assistance to regional and international organizations and economically strapped countries.", "The UAE's opposition to Muslim Brotherhood-linked regional organizations as regional and domestic threats has driven UAE policy toward Egypt, Syria, the Palestinian territories, and other countries. The UAE's stance has contributed to a major rift with Qatar, another member of the Gulf Cooperation Council alliance (GCC: Saudi Arabia, Kuwait, UAE, Bahrain, Qatar, and Oman), but which supports Brotherhood-related groups as Islamists willing to work within established political processes. In June 2017, the UAE joined Saudi Arabia in isolating Qatar until it adopts policies closer to those of the three GCC states on the Brotherhood and other issues, including on Iran, where the UAE and the Trump Administration share a policy of strongly pressuring Iran economically and politically. U.S. mediation efforts have failed to resolve the intra-GCC rift, to date. The October 2018 killing by Saudi agents of a U.S.-based Saudi journalist at the Saudi consulate in Istanbul has added to criticism of UAE leaders for their close strategic alliance with Saudi Arabia's Crown Prince Mohammad bin Salman Al Saud.", "The UAE's relatively open borders and economy have won praise from advocates of expanded freedoms in the Middle East. The UAE is considered among the wealthiest countries in the world, in part because of the small population that requires services, and the wealth has helped the government maintain popular support. In 2006, the government established a limited voting process for half of the 40 seats in its quasi-legislative body, the Federal National Council (FNC). The most recent such vote was held in October 2015, and resulted in the selection of a woman as speaker of the FNC. However, the country remains under the control of a small circle of leaders. And, since the Arab Spring uprisings, the government has become more wary of the potential for regional conflicts to affect domestic stability and has suppressed domestic opponents. The country sought to showcase its continued commitment to pluralism by hosting a visit by Pope Francis in February 2019.", "In part to cope with the effects of reduced prices for crude oil during 2014-2018, the government has created new ministries tasked with formulating economic and social strategies that, among other objectives, can attract the support of the country's youth. Any U.S. assistance to the UAE has been very small in dollar amounts and intended mainly to qualify the UAE for inclusion in training and other programs that benefit UAE security."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Governance, Human Rights, and Reform", "paragraphs": ["The United Arab Emirates (UAE) is a federation of seven emirates (principalities): Abu Dhabi, the oil-rich federation capital; Dubai, a large commercial hub; and the five smaller and less wealthy emirates of Sharjah, Ajman, Fujayrah, Umm al-Qaywayn, and Ras al-Khaymah. Sharjah and Ras al-Khaymah have a common ruling family\u2014leaders of the Al Qawasim tribe. After Britain announced in 1968 that it would no longer ensure security in the Gulf, six \"Trucial States\" formed the UAE federation in December 1971; Ras al-Khaymah joined in 1972. The federation's last major leadership transition occurred in November 2004, upon the death of the first UAE president and ruler of Abu Dhabi, Shaykh Zayid bin Sultan Al Nuhayyan. ", "Shaykh Zayid's eldest son, Shaykh Khalifa bin Zayid al-Nuhayyan, born in 1948, was elevated from Crown Prince to ruler of Abu Dhabi upon Zayid's death. In keeping with a long-standing agreement among the seven emirates, Khalifa was subsequently selected as UAE president by the leaders of all the emirates, who collectively comprise the \"Federal Supreme Council.\" The ruler of Dubai traditionally serves concurrently as Vice President and Prime Minister of the UAE; that position has been held by Shaykh Mohammad bin Rashid Al Maktum, architect of Dubai's modernization drive, since the death of his elder brother Shaykh Maktum bin Rashid Al Maktum in January 2006. The Federal Supreme Council meets four times per year to establish general policy guidelines, although the leaders of the emirates consult frequently with each other. ", "UAE leadership posts almost always change only in the event of death of an incumbent. The leadership of the UAE was put into doubt by Shaykh Khalifa's stroke on January 24, 2014. He has not appeared publicly since and reportedly is incapacitated, but, in order not to cause turmoil within ruling circles, there is unlikely to be a formal succession as long as he remains alive. His younger brother and the third son of Shaykh Zayid, Crown Prince Shaykh Mohammad bin Zayid al-Nuhayyan (born in 1961), is almost certain to succeed him in all posts. Shaykh Mohammad had been assuming day-to-day governing responsibilities prior to Khalifa's stroke and has been de facto leader since. He and Shaykh Mohammad bin Rashid of Dubai have long been considered the key strategists of UAE foreign and defense policy. ", "Several senior UAE officials are also brothers of Shaykh Mohammad bin Zayid, including Foreign Minister Abdullah bin Zayid, deputy Prime Minister Mansur bin Zayid, deputy Prime Minister and Minister of Interior Sayf bin Zayid, and National Security Advisor Shaykh Tahnoun bin Zayid. In 2017, Shaykh Mohammad appointed his son, Khalid bin Mohammad, as deputy National Security Adviser. ", "As shown in the table above, each emirate has its own leader. The five smaller emirates, often called the \"northern emirates,\" tend to be more politically and religiously conservative and homogenous than are Abu Dhabi and Dubai, which are urban amalgams populated by many Arab, South Asian, and European expatriates. "], "subsections": [{"section_title": "Governance Issues", "paragraphs": ["UAE leaders argue that the country's social tolerance and distribution of national wealth have rendered the bulk of the population satisfied with the political system, and that Emiratis are able to express their concerns directly to the country's leaders through traditional consultative mechanisms. Most prominent among these channels are the open majlis (councils) held by many UAE leaders. UAE officials maintain that Western-style political parties and elections for a legislature or other representative body would aggravate schisms among tribes and clans, cause Islamist factions to become radical, and open UAE politics to regional influence. UAE officials have stated that the UAE's end goal is not to form a multiparty system, arguing that this model does not correspond with UAE cultural or historical development. Such assertions appear, at least in part, to signal that the country will work to prohibit the development of factions linked to regional Islamist movements or to regimes in the region. UAE law prohibits political parties. "], "subsections": [{"section_title": "Federal National Council (FNC) and FNC Elections", "paragraphs": ["The UAE has provided for some formal popular representation through a 40-seat Federal National Council (FNC)\u2014a body that can review and recommend, but not enact or veto, legislation. The FNC can question, but not remove, ministers and it conducts such questionings regularly. Its sessions are open to the public. The seat distribution of the FNC is weighted in favor of Abu Dhabi and Dubai, which each hold eight seats. Sharjah and Ras al-Khaymah have six each, and the others each have four. The government has not implemented calls, such as were expressed in a March 2011 petition signed by 160 UAE intellectuals, to transform the FNC into an all-elected body with full legislative powers. Each emirate also has its own appointed consultative council.", "First FNC Vote s . In 2006, the UAE leadership apparently assessed that it had fallen too far behind its Gulf neighbors on political reform and relented to the suggestion to make at least part of the FNC seats elective. In December 2006, the government instituted a limited election process for half of the FNC seats, with the other 20 FNC seats remaining appointed. The Election Commission approved a small \"electorate\" of about 6,600 persons, of which about 20% were women. Out of the 452 candidates for the 20 elected seats, there were 65 female candidates. Only one woman was elected (from Abu Dhabi), but another seven were given appointed seats. ", "The September 24, 2011, FNC election was held in the context of the \"Arab spring\" uprisings, with an expanded electorate (129,000), nearly half of which were female. There were 468 candidates for the 20 seats, including 85 women. However, there was little campaigning, and turnout was about 25%, which UAE officials called disappointing. Of the 20 winners, only one was female. Other winners were elected largely along tribal lines. Of the 20 appointed seats, 6 were women. The government selected a woman, Amal al-Qubaisi, to be deputy speaker\u2014the first woman to hold as high a position in a GCC representative body.", "The 2015 elections were again for half the FNC, but the electorate was expanded to 225,000 voters, about double that in 2011. The 2015 process included \"early voting\" and out of country voting, culminating on \"election day\" of October 3, 2015. There were 330 candidates (somewhat lower than in 2011), including 74 women (almost as many as in 2011). Turnout was 35%, which government officials stated was a more satisfactory turnout than in 2011. One woman was elected, as happened in 2011. Of the 20 appointed seats, eight were women. Of those, Abu Dhabi representative Ms. Amal al-Qubaisi, was promoted to speaker. ", "The next FNC elections are to be held in the fall of 2019. UAE officials assert that there are plans to eventually make all 40 seats elected, but likely not in the 2019 vote. In December 2018, the UAE leadership decreed that, as of the 2019 election, half of the FNC members will be women \u2013 a quota presumably be achieved by appointing enough women to constitute half of the body, after accounting for those elected. A National Election Committee has been meeting to review procedures, particularly the use of technology for voter screening, for the upcoming election."], "subsections": []}, {"section_title": "Muslim Brotherhood and other Opposition", "paragraphs": ["There has been little evident clamor for major political reform, but some UAE intellectuals, businessmen, students, and others have agitated for greater political space. During the 2011 \"Arab Spring\" uprisings, some UAE youth tried unsuccessfully to use social media to organize a public protest in March 2011. Five high-profile activists\u2014the so-called \"UAE-5\"\u2014were put on trial in November 2011. They were convicted and their sentences were commuted.", "The government has particularly targeted for arrest Islamists linked to the Muslim Brotherhood organization, which UAE leaders named in 2014 as one of 85 \"terrorist organizations\"(a list that included Al Qaeda and the Islamic State). The UAE affiliate of the Brotherhood is the Islah (Reform) organization, which emerged in 1974 as an offshoot of the Muslim Brotherhood and attracts followers mostly from the less wealthy and more religiously conservative northern emirates. UAE officials accuse Islah of being funded by the main Brotherhood chapter in Egypt. ", "The government stepped up its crackdown on Islah in 2012, the year that Muslim Brotherhood figure Mohammad Morsi was elected president of Egypt. UAE authorities arrested and revoked the citizenship of several senior Islah members, including a member of the Ras al-Khaymah ruling family. In July 2013, the UAE State Security Court convicted and sentenced 69 out of 94 UAE nationals (\"UAE-94\")\u2014Islamists arrested during 2011-2013\u2014for trying to overthrow the UAE government. In June 2014, 30 persons, of which 20 are Egyptian nationals, were convicted for connections to the Muslim Brotherhood organization in Egypt. A Saudi-UAE list of \"persons to be isolated,\" released in connection with the June 2017 intra-GCC dispute, included Muslim Brotherhood-linked Egyptian cleric Yusuf Qaradawi, who resides in Qatar. The disagreements between Qatar and the UAE and other GCC states over the Muslim Brotherhood and other political Islamist movements are discussed further in the section on foreign policy. "], "subsections": []}, {"section_title": "Other Government Responses", "paragraphs": ["The government has also addressed domestic opposition with reforms and economic incentives. In 2011, the government invested $1.5\u00a0billion in utilities infrastructure of the poorer, northern emirates; raised military pensions; and began subsidizing some foods. In 2013, a \"new look\" cabinet included several young figures. Cabinet reshuffles in February 2016 and October 2017 added more young ministers, many of them female, and established minister of state positions for \"tolerance,\" \"happiness,\" artificial intelligence, and food security. Other reforms included formation of an Emirates Foundation for Schools, run by an independent board of directors; limiting the mandate of the Ministry of Health to a focus on disease prevention; and creating a science council with a mandate to promote a new generation of Emirati scientists. "], "subsections": []}, {"section_title": "U.S. Democracy Promotion Efforts and UAE Restrictions", "paragraphs": ["Human rights observers assert that U.S. officials downplay criticism of the UAE's human rights record because of the U.S.-UAE strategic alliance. U.S. officials assert that they continue to promote democracy, rule of law, independent media, and civil society in the UAE through State Department programs that are tolerated by the UAE government. Such programs have included the broader Middle East Partnership Initiative (MEPI), which has its headquarters for the Gulf region located at the U.S. Embassy in Abu Dhabi. ", "On the other hand, the UAE government has expelled some U.S. and European-sponsored democracy promotion efforts that the government asserted were too intrusive into UAE politics. In 2012, the government ordered closed the offices in the UAE of the National Democratic Institute (NDI) and the Germany-based Konrad Adenauer Foundation. No U.S. funding for democracy promotion in UAE has been provided in recent years. "], "subsections": []}]}, {"section_title": "Other Human Rights-Related Issues7", "paragraphs": ["Recent State Department human rights reports and reports by independent groups such as Human Rights Watch assert that there are a variety of human rights problems in the UAE including: unverified reports of torture, government restrictions of freedoms of speech and assembly, and lack of judicial independence. UAE organizations that monitor the government's human rights performance include the Jurists' Association's Human Rights Committee, the Emirates Human Rights Association (EHRA), and the Emirates Center for Human Rights (ECHR), but their degree of independence is uncertain. In a January 2018 U.N. Human Rights Council Universal Periodic Review, UAE officials highlighted that they had formed a new human rights commission under international standards known as the \"Paris Principles\"\u2014a response to reports that British police were investigating UAE officials suspected of torturing Qatari nationals. ", "According to the State Department, there are an estimated 20,000 to 100,000 stateless persons in the UAE (\"Bidoon\"). Most Bidoon lacked citizenship because they did not have the preferred tribal affiliation when the country was founded. They lack accepted forms of identification and their movements within the UAE or internationally are restricted. "], "subsections": [{"section_title": "Media and Research Institute Freedoms", "paragraphs": ["The UAE government has increased restrictions on media usage, particularly social media, since the 2011 Arab uprisings, tempering its former commitment to free and open media. A 2012 \"cybercrimes decree\" (Federal Legal Decree No. 5/2012) established a legal basis to prosecute and jail people who use information technology to promote dissent. It provides for imprisonment for using information technology to \"incite actions that endanger state security or infringe on the public order,\" and for life imprisonment for anyone using such technology to advocate the overthrow of the government. In May 2015, the government enacted an Anti-Discrimination Law, which criminalizes the publication of \"provocative\" political or religious material. Several activists have been jailed for violating the decree, including Ahmed Mansoor, who was arrested in 2018 for \"defaming\" the country on social media. On December 31, 2018, a UAE court upheld his 10-year prison sentence and fine of $272,000. ", "A \"National Media Council\" (NMC) directly oversees all media content, and provisions governing media licensing do not clearly articulate government standards in evaluating license applications. Restrictions do not apply to the \"Free Zones\" in UAE in which foreign media operate. However, some media organizations report that the government has banned some journalists from entering the country, and prohibited distribution of books and articles that highlight human rights abuses. ", "The country has also become less welcoming of research institutes, several of which had opened in UAE in the 1990s. The government applied increasingly strict criteria to renewing the licenses of some research institutes and some left the UAE as a result. In November 2012, the UAE ordered out the Rand Corporation, and UAE officials have denied entry to some academics and human rights organizations representatives who have been critical of the UAE's human rights record. On the other hand, some new UAE-run think tanks have opened or become increasingly active in recent years, including the Emirates Policy Center and the TRENDS Institute. "], "subsections": []}, {"section_title": "Justice/Rule of Law", "paragraphs": ["The UAE constitution provides for an independent judiciary, but court decisions are subject to review and overrule by political leaders. UAE judicial institutions include Sharia (Islamic law) courts that adjudicate criminal and family law matters, and civil courts that adjudicate civil matters. The civil court system, based on French and Egyptian legal systems, was established in 1973 when a Federal Supreme Court was inaugurated. This court, which consists of a president and a five judges appointed by the UAE leadership, adjudicates disputes between emirates or between an emirate and the UAE federal government; the constitutionality of federal and other laws; conflicts of jurisdiction between the federal and local judicial authorities; and crimes affecting the UAE federation. It also interprets the provisions of the constitution and questions ministers and senior federal officials for official misconduct. A 2012 amendment to the UAE constitution set up a \"Federal Judicial Council\" chaired by the UAE president, which human rights groups asserted reflected increased political influence over the judiciary. Foreign nationals hold positions in the judiciary, making them subject to being threatened with deportation for judgments against Emiratis. In 2010, a UAE court acquitted the UAE president's brother of torturing an Afghan merchant, ruling that he was not liable because he was affected by prescription drugs.", "The UAE justice system has often come under criticism in cases involving expatriates. Western expatriates have sometimes been arrested for sexual activity on beaches. In 2007, human rights groups criticized the conservative-dominated justice system for threatening to prosecute a 15-year-old French expatriate for homosexuality, a crime in UAE, when he was raped by two UAE men; the UAE men were later sentenced for sexual assault and kidnapping. In August 2012, a 78-year-old pediatrician from South Africa was imprisoned for two months for alleged issues of malpractice related to his six-week service as a doctor in Abu Dhabi in 2002 and he was prevented from leaving the UAE until June 2013. In May 2018, UAE authorities detained a British academic, Matthew Hedges, on charges of \"spying for a foreign state.\" He was sentenced to life imprisonment in November but shortly thereafter, following expressions of outrage from British and other world leaders, was pardoned by the leadership. "], "subsections": []}, {"section_title": "Women's Rights", "paragraphs": ["Women's political rights have expanded steadily. As of December 2011, UAE women are allowed to pass on their citizenship to their children\u2014the first GCC state to allow this. However, UAE women are still at a legal disadvantage relative to men, for example in divorce cases and other family law issues. The penal code allows men to use physical means, including violence, against female family members. Many domestic service jobs are performed by migrant women, and they are denied basic legal protections such as limits to work hours.", "Recent cabinet reshuffles have greatly increased the number of female ministers. Seven women are in the FNC, one is now its speaker, and, as noted, the FNC will have women as half its members after the 2019 vote. About 10% of the UAE diplomatic corps is female, whereas there were no female diplomats prior to 2001. The UAE Air Force has several female fighter pilots. "], "subsections": []}, {"section_title": "Religious Freedom11", "paragraphs": ["The UAE constitution provides for freedom of religion but also declares Islam as the official religion. The death penalty for conversion from Islam remains in law, but is not known to be enforced. In practice, non-Muslims in UAE are free to practice their religion. ", "UAE officials boast of the country's religious tolerance by citing the 40 churches in the UAE, of a variety of denominations. In 2016 the government donated additional lands for the building of more churches, as well as some new Hindu and Sikh temples. In January 2017, the Ministry hosted an event for 30 Christian leaders from nine denominations located throughout the Gulf; the event took place at the site of an early Christian monastery on Sir Bani Yas Island in Abu Dhabi. In November 2017, the Abu Dhabi Department of Justice signed an agreement with Christian leadership to allow churches to handle non-Islamic marriages and divorces. In September 2016, Shaykh Mohammad bin Zayid met with Pope Francis in the Vatican and invited him to visit. The visit took place during February 3-5, 2019, and enabled the UAE\u2014at a time of widespread criticism of its intervention in Yemen\u2014to showcase its commitment to religious tolerance, and the Pope to advocate for the creation of more churches in the UAE to better accommodate the approximately 1 million Christians in the country, almost all of whom are expatriates. The papal visit was the first such trip to the Gulf region. There are no Jewish synagogues or Buddhist temples.", "The Shia Muslim minority, which is about 15% of the citizen population and is concentrated largely in Dubai emirate, is free to worship and maintain its own mosques. However, Shia mosques receive no government funds and there are no Shias in top federal posts. At times, the government has acted against non-UAE Shia Muslims because of their perceived support for Iran and Iran's regional allies. The government has at times closed Shia schools and prohibited the holding of conferences for international Shias. The government has deported some foreign Shias in recent years. "], "subsections": []}, {"section_title": "Labor Rights and Trafficking in Persons", "paragraphs": ["UAE law prohibits all forms of compulsory labor, but enforcement is inconsistent. On several occasions, foreign laborers working on large construction projects have conducted strikes to protest poor working conditions and nonpayment of wages. There have been numerous and persistent allegations that foreign workers are housed in cramped \"labor camp\" conditions, have their passports held, are denied wages or paid late, are forced to work long hours, are deported for lodging complaints, and are subjected to many other abuses. In May 2014, the government arrested foreign laborers striking to protest many of the conditions discussed above in the course of building a facility for New York University's (NYU's) branch in Abu Dhabi. NYU apologized to the workers for being excluded from a labor \"code of conduct\" that covers migrant workers in the UAE and compensated several hundred of them. The government has put in place a \"Wages Protection System,\" an electronic salary payments system that requires companies with more than 100 workers to pay workers via approved banks and other financial institutions, thereby facilitating timely payment of agreed wages. ", "The Ministry of Human Resources and Emiratization (MOHRE, formerly the Labor Ministry) has addressed problems such as those above by penalizing employers and requiring that workers' salaries be deposited directly in banks. In 2011 the UAE reformed its \"kafala\" system to allow migrant workers to more easily switch employers, producing higher earnings by immigrant laborers in the country. "], "subsections": [{"section_title": "Trafficking in Persons14", "paragraphs": ["The UAE is considered a \"destination country\" for women trafficked from Asia and the former Soviet Union. The Trafficking in Persons report for 2018, for the eighth year in a row, rated the UAE as \"Tier 2.\" The rating is based on the assessment that the UAE does not meet the minimum standards for eliminating human trafficking, but is taking significant efforts to do so. The 2018 State Department report credits the UAE with implementing reforms that reduce forced labor among foreign workers in the private sector, instituting direct governmental oversight of domestic laborers, increasing the number of labor trafficking prosecutions, and funding and implementing a national action plan to combat trafficking in persons. UAE authorities continue to prosecute and punish sex trafficking offenders. In March 2015, the government put into effect amendments to victim protection clauses of Federal Law 51 of 2006 on Combating Human Trafficking Crimes.", "Since 2013, the UAE government, through its \"National Committee to Combat Human Trafficking,\" has assisted human trafficking victims, including through shelters in several UAE emirates. The government opened its first shelter for male sexual trafficking victims in 2013. The government assists victims of human trafficking through a human rights office at Dubai International Airport. An issue in previous years was trafficking of young boys as camel jockeys, a concern alleviated with repatriation of many of those trafficked and the use of robot jockeys."], "subsections": []}]}]}]}, {"section_title": "Foreign Policy and Defense Issues", "paragraphs": ["Despite its small population and territorial size, the UAE is increasingly attempting to influence regional outcomes. Its assertiveness has been enhanced by the training, arms, and advice the country has received from its close security partnership with the United States, forged during the 1980-1988 Iran-Iraq war and strengthened after the 1990 Iraqi invasion of Kuwait. The UAE and the five other members of the Gulf Cooperation Council (GCC: Saudi Arabia, Kuwait, Qatar, Bahrain, and Oman) also have close defense ties to the United States. The alliance was formed in late 1981 in response to the Iran-Iraq war, during which the GCC states gave extensive financial and political backing to Iraq. ", "The UAE and Saudi Arabia are closely aligned, particularly in their assertion that Islamist movements including the Muslim Brotherhood pose a significant threat. UAE leaders have publicly defended Saudi Crown Prince Mohammad bin Salman Al Saud against criticism caused by the Saudi killing of U.S.-based Saudi journalist Jamal Kashoggi at the Saudi consulate in Istanbul on October 2, 2018. The Saudi-UAE alliance has contributed to a fracturing of the GCC since the June 5, 2017, move by the two, joined by Bahrain, Egypt, and a few other Muslim states, to isolate Qatar by denying it land, sea, and air access to their territories. The UAE and Saudi Arabia asserted that Qatar supports Iran and Muslim Brotherhood-related movements, although many experts assert that Saudi Arabia and the UAE sought primarily to limit Qatar's foreign policy independence. The rift has, to date, defied mediation efforts by U.S. officials and caused repeated postponements of a U.S.-GCC summit\u2014first planned for May 2018\u2014that is to formally unveil a U.S.-led \"Middle East Strategic Alliance\" (MESA) to counter Iran. Some press accounts refer to the MESA as an \"Arab NATO,\" which was to consist of the GCC states, Jordan, and Egypt. However, the plan suffered a setback in April 2019 when Egypt said it would not join a MESA, possibly as a protest of the Administration's strong support for Israeli Prime Minister Benjamin Netanyahu. ", "Among other consequences of the intra-GCC rift, in December 2017, Saudi Arabia and the UAE announced the formation of a \"joint cooperation committee\" as a subgroup of the GCC. The rift has scuttled long-standing GCC plans to establish a joint military command and joint naval force to be based in Bahrain, supported by an Abu Dhabi-based \"Gulf Academy for Strategic and Security Studies.\" Saudi Arabia, possibly as an overture, formally invited the Amir of Qatar to the GCC summit of December 7-9, 2018, but the Amir did not attend. Yet, the UAE and Saudi Arabia have allowed Qatari commanders to participate in joint GCC security meetings, suggesting that the UAE and Saudi Arabia do not want the Trump Administration to assess them as harming U.S. security interests in the Gulf. ", "The broader issues dividing Qatar and some of its neighbors had caused rifts in the past, although not as extended as the current crisis. In March 2014, the UAE, Saudi Arabia, and Bahrain recalled their ambassadors from Qatar, but that dispute was resolved in November 2014 following an agreement that the GCC countries will not undermine each other's interests. ", "Despite its strategic alliance with Saudi Arabia, the UAE has had border disputes and other disagreements with the Kingdom. A 1974 \"Treaty of Jeddah\" with Saudi Arabia formalized Saudi access to the Persian Gulf via a corridor running through UAE, in return for UAE gaining formal control of villages in the Buraymi oasis area. In March 2011, the UAE contributed 500 police officers to a Saudi-led GCC military intervention in Bahrain to support the Al Khalifa regime against a Shia-led uprising. At least some of the UAE force remained after that time, and one UAE police officer was killed in a bombing in Manama in March 2014. "], "subsections": [{"section_title": "Iran", "paragraphs": ["UAE leaders assert that Iran is a threat to the UAE and the region and must be countered assertively. UAE leaders publicly backed the July 2015 Iran nuclear agreement (Joint Comprehensive Plan of Action, JCPOA), while simultaneously expressing reservations that the pact would reduce the U.S. interest in countering Iran's regional activities. UAE leaders strongly support the Trump Administration's characterization of Iran as a major U.S. adversary, its May 2018 withdrawal from the JCPOA, and its reimposition of all U.S. sanctions on Iran. UAE officials have committed, along with Saudi leaders and others, to ensure that the global oil market remains well supplied to support the April 2019 U.S. decision to sanction countries that continue to import Iranian oil. UAE leaders have explained the UAE intervention in Yemen, discussed further below, primarily as an effort to counter Iran's regional ambitions. ", "In January 2016, the UAE withdrew its ambassador from Iran in solidarity with Saudi Arabia's breaking relations with Iran over issues related to the Saudi execution of a dissident Shia cleric. Because of Hezbollah's affiliation with Iran, in February 2016, the UAE barred its nationals from travelling to Lebanon, downgraded its diplomatic relations with Lebanon, and joined the other GCC states in a declaration that Hezbollah is a terrorist organization. UAE policy in east Africa, Yemen, Syria, and elsewhere is driven largely by the UAE objective of weakening Iran. ", "Some UAE officials assert that the large Iranian-origin community in Dubai emirate (estimated at 400,000 persons) could pose a \"fifth column\" threat to UAE stability. Dubai leaders express less concern about Iranian-origin residents, asserting that this population is a product of long-standing UAE-Iran commercial ties. The extensive Iranian commercial presence in the UAE also gives the United States ample opportunity to enlist the UAE in sanctioning Iran. In 2010, when international sanctions on Iran tightened dramatically, the UAE government directed its banks to limit transactions with Iran, even though a decline in UAE-Iran trade harmed the powerful UAE trading community. "], "subsections": [{"section_title": "Gulf Islands Dispute", "paragraphs": ["An additional complication in UAE-Iran relations is a dispute over several Persian Gulf islands. In 1971, Iran, then ruled by the U.S.-backed Shah, seized the Greater and Lesser Tunb islands from the emirate of Ras al-Khaymah, and intimidated the emirate of Sharjah to reach an agreement for shared control of another island, Abu Musa. In April 1992, Iran asserted complete control of Abu Musa. The UAE has called for peaceful resolution of the issue through direct negotiations, referral to the International Court of Justice, or through another agreed forum. The United States takes no position on the sovereignty of the islands, and supports the UAE's call to negotiate the dispute. In October 2008\u2014after the UAE protested Iran's opening in August 2008 of administrative and maritime security offices on Abu Musa\u2014the UAE and Iran established a joint commission to resolve the dispute. The dispute flared again in 2012, when then-President Ahmadinejad visited Abu Musa and spoke to the inhabitants there, an action that UAE officials said undermined diplomacy on the issue, including the appointment of negotiators. Iran incurred further UAE criticism with a May 2012 visit to Abu Musa by then-Islamic Revolutionary Guard Corps (IRGC) Commander-in-Chief Mohammad Ali Jafari. In 2014, the two countries discussed a possible solution under which Iran might cede control of the disputed islands in exchange for rights to the seabed around them. Iran reduced its presence on Abu Musa as a confidence-building measure. No discussions have been reported in recent years."], "subsections": []}]}, {"section_title": "Policy Toward and Intervention in Regional Conflicts", "paragraphs": ["Since the 2011 Arab uprisings, the UAE has become more active in the region, including through the use of its own military forces and its development of regional military facilities from which to project power. The UAE's capabilities have been enhanced by the many years of defense cooperation with the United States. The UAE's opposition to the Muslim Brotherhood generally drives its policies toward countries where Brotherhood-linked groups are prominent. "], "subsections": [{"section_title": "Egypt", "paragraphs": ["In line with opposition to the Muslim Brotherhood, the UAE supported the Egyptian military's 2013 toppling of Muslim Brotherhood figure Mohammad Morsi, who was elected president in 2012. The UAE has given Egypt over $20 billion in assistance (including loans, grants, and investments) since the ouster of Morsi. UAE officials denied that they had blocked a potential competitor to President Sisi in March 2018 elections from leaving UAE to return to Egypt. "], "subsections": []}, {"section_title": "Libya", "paragraphs": ["Intra-GCC differences\u2014as well as differences between the UAE and U.S. policy\u2014have manifested in post-Qadhafi Libya. In 2011, several GCC states, including the UAE, conducted air strikes and armed some Libyan rebels to help overthrow then-Libyan leader Muammar Qadhafi. In post-Qadhafi Libya, the UAE and Qatar support rival groups in the highly fractured country. The UAE, possibly in violation of U.N. Security Council resolutions on Libya, reportedly provides arms in support of Field Marshal Khalifa Hafter and his Libyan National Army (LNA) movement and reportedly continues to support operations at an airbase in eastern Libya from which pro-LNA forces fly air strikes. Hafter, a former commander in the Libyan armed forces, has refused to recognize the authority of the U.N.-backed Government of National Accord (GNA) and leads a coalition of military personnel and militias that has fought Islamist groups and some GNA-aligned forces. In July 2018, press reports claimed that UAE-based entities had signed agreements with Hafter-aligned oil authorities in eastern Libya to export Libyan oil in violation of U.N. Security Council resolutions. Other outside actors, including Russia, have given Hafter some backing as well. These actors have backed Hafter's April 2019 advance on Tripoli as an attempt to unify Libya and counter Islamist militia groups that back the GNA. ", "In August 2014, the UAE and Egypt carried out an air strike in Libya against a Muslim Brotherhood-linked Islamist militia that reportedly enjoyed support from Qatar. The United States criticized the strike as detracting from Libyan stability."], "subsections": []}, {"section_title": "Islamic State/Syria Conflict26", "paragraphs": ["The UAE is a member of the U.S.-led coalition against the Islamic State organization. During 2014-2015, it conducted more strikes in Syria against Islamic State positions than any country except the United States, and was the only Arab state that the United States permitted to command strikes there. The UAE also hosted other forces participating in the anti-Islamic State effort, including French jets stationed at Al Dhafra Air Base and 600 forces from Australia. ", "The GCC states, including the UAE, at first sought to help oust Assad in part to strategically weaken Assad's ally, Iran. The UAE contributed to a multilateral pool of funds to buy arms for approved rebel groups in Syria. After Russia's intervention in Syria in 2015, the UAE accepted Assad's eventual victory. In recognition of Russia's predominant position in Syria, and its growing involvement in the region more generally, de facto UAE leader Mohammad bin Zayid has engaged Russian leaders with increasing frequency. On December 27, 2018, and in the wake of President Trump's announcement that a substantial portion of the 2,000 U.S. troops in Syria would be withdrawn, the UAE reopened its embassy in Damascus. UAE officials explained the move as an effort to reassert Arab influence in counter to Iran's presence in Syria. It is unclear whether the UAE will invest in any reconstruction in Syria. ", "The UAE has also sought to alleviate suffering from the Syria crisis through donations to Syrian refugees and grants to Jordan to help it cope with the Syrian refugees that have fled there. In 2018, the UAE, Saudi Arabia, and Kuwait provided $2.5 billion to help stabilize Jordan's finances. The UAE portion was about $833 million. UAE forces also have participated in annual military exercises in Jordan intended to help protect Jordan from Syria conflict spillover."], "subsections": []}, {"section_title": "Iraq", "paragraphs": ["The GCC states all supported Iraq against Iran in the 1980-1988 Iran-Iraq war, and all broke relations with Iraq after it invaded Kuwait in 1990s. No Arab state, including the UAE, participated in the U.S.-led invasion that overthrew Saddam Hussein in 2003. In 2008, the UAE posted an ambassador to Iraq, wrote off $7 billion in Iraqi debt, and Shaykh Mohammad bin Zayid visited the country. It opened a consulate in the Kurdish region of Iraq in 2012. However, the relationship deteriorated as the Shia-dominated government of former Prime Minister Nuri al-Maliki (2006-2014) marginalized Sunnis. UAE officials welcomed the change of leadership in Iraq to Prime Minster Haydar Al Abadi in August 2014 and hosted him in December 2014. Still, the UAE and other GCC states did not conduct anti-Islamic State air operations in Iraq, possibly because of the Iraqi government's close relations with Tehran. ", "Since mid-2017, Saudi Arabia and the UAE have improved ties to Iraq's Shia leaders to dilute Iranian influence there. The UAE and Germany jointly run a fund to pay for coalition efforts to reconstruct and stabilize areas of Iraq liberated from the Islamic State. The UAE donated $50 million to the fund in late 2016, and UAE companies have separately invested in housing and other projects in Iraq. The UAE-Germany cooperation reprises their joint cooperation in Iraq during 2003-2011, in which the UAE provided facilities for Germany to train Iraqi police and the UAE provided over $200 million for Iraq reconstruction, including for hospitals and medical treatment in the UAE for Iraqi children. "], "subsections": []}, {"section_title": "Yemen34", "paragraphs": ["In Yemen, another state roiled by the 2011 Arab uprisings, the UAE has intervened militarily since early 2015 with military personnel, armor, and airstrikes, in close partnership with Saudi Arabia, against the Zaydi Shia \"Houthi\" faction. The Saudi-led coalition asserts that the intervention was required to roll back the regional influence of Iran, which has supplied the Houthis with arms, including short-range ballistic and cruise missiles the Houthis have fired on the UAE and Saudi Arabia and their ships in the vital Bab el Mandeb Strait. In October 2016, the Houthis used anti-ship cruise missiles to damage a UAE Navy logistics ship in the Bab el Mandeb Strait. Since the UAE intervened, nearly 150 UAE soldiers have died. ", "The Saudi and UAE-led intervention in Yemen has precipitated widespread international criticism of the two countries over the humanitarian effects of the war and other alleged abuses. In June 2017, UAE officials denied allegations by human rights organizations that UAE forces were maintaining a secret network of prisons in Yemen in which detainees were being severely abused. In early 2019, press investigations indicated that the UAE was arming some anti-Houthi militia commanders that were, and may still be, linked to Al Qaeda and/or the Islamic State. Some of these reports also indicate that some U.S. armor supplied to the UAE might have fallen into the hands of the Houthis. ", "In an attempt to address critics, the UAE has highlighted the country's humanitarian aid to the people of Yemen in the context of the conflict. The UAE has provided $4 billion to Yemen, of which about $1.25 billion was provided in 2018, according to official UAE media. However, some of the total aid figure represents infrastructure investments, not grant aid.", "Criticism of the Arab coalition war effort has produced increasing congressional opposition to the U.S. logistical support provided to the effort, which included intelligence and aerial refueling under a cross-servicing agreement, as well as related arms sales and some direct U.S. military action to prevent Iranian weapons flows to the Houthis. In November 2018, the United States ended the refueling for coalition aircraft. But, fallout from the Kashoggi killing propelled additional congressional efforts to cease U.S. support for the coalition Yemen effort. For information on Congressional initiatives on the Yemen issues, see: CRS Report R45046, Congress and the War in Yemen: Oversight and Legislation 2015-2019 , by Jeremy M. Sharp and Christopher M. Blanchard. ", "Separately, the UAE works closely with U.S. forces and with local Yemeni communities to counter the local faction of Al Qaeda\u2014Al Qaeda in the Arabian Peninsula (AQAP). U.S. Special Operations Forces in Yemen reportedly worked with the UAE to defeat AQAP fighters at the port of Mukalla in April 2016, in the process killing the leader of the Yemeni branch of the Muslim Brotherhood. In January 2017, the Trump Administration authorized a raid in concert with some UAE special forces on allies of AQAP, an operation in which one U.S. soldier was killed. In August 2017, UAE and U.S. forces reportedly advised about 2,000 Yemen government forces conducting an operation against AQAP sanctuaries in Shabwa Province. Some experts assert that the UAE is promoting separatism in south Yemen and exercises significant control over governance in areas where UAE forces operate. In early March 2019, a UAE led operation, assisted by the United States, rescued an American hostage in Yemen, Danny Lavone Burch, who had been held by a gang with some ties to Al Qaeda. Congressional criticism of UAE operations in Yemen has not extended to the anti-AQAP mission. "], "subsections": [{"section_title": "Related UAE Power Projection Capabilities/East Africa", "paragraphs": ["The UAE has been using its financial and military assets to be able to project power into Yemen as well as to counter Iranian influence more broadly. Another pillar of the UAE's effort to counter Iran has been to establish military bases and support friendly leaders and factions in several East African countries. During 2015, UAE forces deployed to Djibouti to support the intervention in Yemen, but in mid-2015 a UAE-Djibouti dispute over funding arrangements caused UAE (and Saudi) forces to begin using facilities in Eritrea to stage and to train pro-government Yemeni forces\u2014a relationship that might violate a U.N. embargo on Eritrea. Perhaps to solidify its relations with Eritrea, the UAE helped broker a rapprochement between Eritrea and Ethiopia, which culminated in a trilateral (Ethiopia-Eritrea-UAE) summit in Abu Dhabi on July 24, 2018. The summit came one month after the UAE pledged to give Ethiopia $3 billion in investments. Yet, during a visit to the United States in late July 2018, the Prime Minister of Ethiopia, Abiy Ahmed, said he had rejected a UAE offer to build an Islamic center in Ethiopia and downplayed the UAE role in brokering the rapprochement. The UAE reportedly will be investing in energy infrastructure linking the two countries. ", "Also in 2015, the UAE expanded its partnership with the fragile government in Somalia to open a new center at which a few hundred UAE special forces trained Somali commandos to counter terrorist groups, particularly Al Shabab. The UAE also established a base at the port of Berbera, in the breakaway region of Somaliland, triggering a legal complaint from the government of Somalia in February 2017. The 30-year basing agreement reportedly includes UAE training for Somaliland military and police forces. However, the rift with the government in Mogadishu led to a termination of the UAE training mission in Somalia in early 2018. In early July 2018, the European Union accused the UAE of \"destabilizing\" Somalia, referring to UAE pressure on Somalia to join the boycott of Qatar.", "The UAE has cooperated with the Saudi-led effort to persuade Sudan's leaders to realign with the GCC countries and forgo its erstwhile alliance with Iran. Sudanese troops have joined the Arab coalition effort in Yemen and Sudan's then-leader, Omar Hassan al-Bashir, visited the UAE in February 2017. In April 2019, Bashir was ousted by military colleagues in response to a popular uprising. In late April 2019, the UAE and Saudi Arabia pledged $3 billion in aid to Sudan, although the two were criticized for supplying funds to Sudan even though the military has said it will not transfer authority to civilian rule for two years. "], "subsections": []}]}, {"section_title": "Afghanistan", "paragraphs": ["The UAE has assisted the U.S.-led mission to stabilize Afghanistan by allowing the use of its military facilities for U.S. operations there and by deploying a 250-person contingent of Presidential Guard forces, since 2003, in the restive south. During 2012-2014, the UAE deployed six F-16s for close air support missions there. The UAE also has donated several hundred million dollars of humanitarian and development aid to Afghanistan since the fall of the Taliban regime. The risks of the involvement were evident in January 2017 when five UAE diplomats were killed by a bomb during their visit to the governor's compound in Qandahar. The UAE Ambassador survived. In mid-December 2018, the UAE hosted meetings between Taliban representatives, U.S. officials, and officials from several regional stakeholder countries to discuss a possible political settlement in Afghanistan.", "Before the September 11, 2001, attacks on the United States, the UAE apparently did not perceive the Taliban movement as a major threat. The UAE was one of only three countries (Pakistan and Saudi Arabia were the others) that recognized the Taliban during 1996-2001 as the government of Afghanistan, even though the Taliban regime was harboring Al Qaeda leaders. "], "subsections": []}, {"section_title": "Israeli-Palestinian Dispute", "paragraphs": ["The UAE has no formal diplomatic relations with Israel, but UAE troops did not participate militarily in any major Arab-Israeli war (two of which - 1948 and 1967 - occurred before the UAE was formed). Unlike Qatar and Oman, the UAE did not host multilateral Arab-Israeli working groups on regional issues during 1994-1998. In 2007, the UAE joined Saudi Arabia, Egypt, and Jordan in a \"quartet\" of Arab states to assist U.S. diplomacy on Israeli-Palestinian issues, and it attended the Annapolis summit on the issue that year. ", "In recent years, Israel and the UAE have informally aligned against Iran and there are consistent reports of quiet diplomatic cooperation and security cooperation, including reported 2018 visits to Tel Aviv by UAE security officials. Israeli diplomats have attended multilateral meetings in the UAE, such as the January 2014 conference of the 144-country International Renewable Energy Agency (IRENA), attended by Israel's Minister of National Infrastructure, Energy, and Water. In November 2015, the UAE gave Israel permission to establish a diplomatic office in Abu Dhabi to facilitate Israel's participation in IRENA. The interactions indicate that the UAE has set aside its recriminations over an Israeli assassination of Hamas figure Mahmoud al-Mabhouh at a hotel in Dubai in 2010.", "There apparently are unspecified levels of Israel-UAE bilateral trade, even though the UAE formally claims it is enforcing the Arab League primary boycott of Israel. In 1994, the UAE joined with the other Gulf monarchies in ending enforcement of the Arab League's secondary and tertiary boycotts (boycotts of companies doing business with Israel and on companies that deal with companies that do business with Israel). In August 2018, the head of state-owned Dubai Ports World, which has ties with Israeli shipping company Zim Integrated Shipping Services Ltd. and other Israeli firms, visited Israel. ", "The UAE has deferred to Saudi Arabia in formulating Arab or GCC proposals to resolve the Israeli-Palestinian dispute. And the UAE position on that issue aligns with other Arab states, for example in support of the Palestinian Authority (PA) bid for statehood recognition and opposition to the Trump Administration's 2018 recognition that Israel's capital is in Jerusalem and 2019 recognition of Israeli sovereignty on the Golan Heights. Yet, the government reportedly is poised to support a Trump Administration Israel-Palestinian peace plan that purportedly is far less favorable toward the Palestinians than were previous peace proposals. ", "In line with UAE animosity toward Muslim Brotherhood-related movements, the UAE does not support Hamas but rather its rival, the Fatah faction of the Palestine Liberation Organization, which runs the West Palestinian Authority (PA) based on the West Bank. In June 2015, the UAE donated $12 million to help the Gaza victims of war with Israel, channeling the funds through Fatah, not Hamas. The UAE also hosts and financially backs senior PLO official Mohammad Dahlan, hoping to propel him to succeed PA President Mahmoud Abbas. ", "According to the UAE government, the UAE has provided over $500 million to humanitarian projects for Palestinian refugees in the Palestinian territories and in Syria, sending the funds through the U.N. Relief and Works Agency (UNRWA). In April 2018, the UAE contributed $50 million to UNRWA to help it compensate for a shortfall in its operating funds caused by the Trump Administration cessation of funding to the agency. The UAE in the past funded a housing project in Rafah, in the Gaza Strip, called \"Shaykh Khalifa City.\" "], "subsections": []}]}, {"section_title": "UAE Foreign Aid54", "paragraphs": ["The UAE asserts that it has provided billions of dollars in international aid through its government and through funds controlled by royal family members and other elites. Among initiatives outside the Near East and South Asia region are the following: ", "The Abu Dhabi Fund for Development (ADFD), established in 1971, has distributed over $4 billion for more than 200 projects spanning 53 countries. The UAE provided $100 million for victims of the December 2004 tsunami in the Indian Ocean. During 2011-2012, UAE foundations responded to U.N. appeals for aid to the victims of a drought in East Africa and provided about $2 million for victims of conflict in Somalia. In October 2013, the UAE reopened a UAE embassy in Mogadishu, in part to facilitate the delivery of relief to Somalis. The UAE has donated for disaster relief and for health care facilities in the United States, including: $100 million to assist New Orleans after Hurricane Katrina; $150 million to Children's National Medical Center in Washington, DC; $5 million to the reconstruction of the new pediatric health care wing at St. John's Mercy Hospital in Joplin, MO, in the wake of the May 2011 tornado there; and $10 million to assist with the reconstruction and recovery efforts of communities affected by Hurricane Sandy in 2013. In 2012, Johns Hopkins officials unveiled the Sheikh Zayid Cardiovascular and Critical Care Tower, funded by a UAE donation. In December 2018, the UAE announced it would increase its contribution to the U.N. Central Emergency Relief Fund to $5 million in 2019, from $1.75 million provided in 2018. "], "subsections": []}, {"section_title": "Defense Cooperation with the United States", "paragraphs": ["The UAE's ability to project power in the region is a product of many years of U.S.-UAE defense cooperation that includes U.S. arms sales and training, strategic planning, and joint exercises and operations. The UAE's armed forces are small\u2014approximately 50,000 personnel\u2014but they have participated in several U.S.-led military operations, including Somalia (1992), the Balkans (late 1990s), Afghanistan (since 2003), Libya (2011), and Syria (2014-2015). Some experts say the UAE has joined U.S.-led operations to further invest the United States in UAE security and increase UAE influence over U.S. policy. The UAE reportedly has also augmented its manpower by recruiting foreign nationals and hiring U.S. and other security experts to build militias and mercenary forces that supplement UAE national forces. "], "subsections": [{"section_title": "Defense Cooperation Agreement (DCA) and U.S. Forces in UAE", "paragraphs": ["The United States and UAE have established a \"Defense Cooperation Framework\" to develop joint strategic approaches to regional disputes and conflicts and to better integrate U.S. capabilities with those of the UAE. The Framework includes UAE development of a defense plan that will facilitate joint U.S.-UAE planning in case of attack on the UAE. In accordance with the Framework, the two countries have established a \"Joint Military Dialogue\" (JMD) to identify shared security objectives and consult on a wide range of strategic issues. The fourth U.S.-UAE JMD was help on April 11, 2019. ", "The Framework builds on the July 25, 1994, bilateral Defense Cooperation Agreement (DCA), the text of which is classified. The DCA was accompanied by a separate \"Status of Forces Agreement\" (SOFA) giving U.S. military personnel in UAE certain legal immunities, but several incidents reportedly caused the UAE to void the SOFA and to agree with the United States to handle legal incidents on a \"case-by-case basis.\" On May 15, 2017, Secretary of Defense James Mattis and Shaykh Mohammad bin Zayid confirmed that the United States and the UAE had concluded a new DCA with a 15-year duration. In accordance with the DCA ", "The United States stations about 5,000 U.S. military personnel at several UAE facilities including Jebel Ali port (between Dubai and Abu Dhabi), Al Dhafra Air Base (near Abu Dhabi), and naval facilities at Fujairah. Jebel Ali, capable of handling aircraft carriers, is the U.S. Navy's busiest port of call. The U.S. forces in UAE support U.S. operations in Afghanistan, combat the Islamic State, deter Iran, try to intercept terrorists, and combat smuggling and illicit shipments of weaponry or proliferation-related equipment. The number of U.S. forces currently in UAE is much higher than the 800 U.S. personnel there prior to the 2003 U.S. intervention in Iraq. The United States stations combat and other aircraft. About 3,500 of the U.S. contingent are Air Force personnel deployed at Al Dhafra air base. The facility at first only hosted U.S. surveillance aircraft such as the U-2 and the KC-10 refueling aircraft, but the UAE later permitted the stationing of F-15s; the \"Stealth\" F-22 Raptor; and the Global Hawk and the AWACS (Airborne Warning and Control System). Dhafra is the only overseas base for F-22s. In April 2019, the United States deployed the F-35 combat aircraft to Al Dhafra \u2013 the first such U.S. deployment of that aircraft in the Middle East region. The United States trains UAE forces. About 600-800 UAE military personnel study and train in the United States each year, mostly through the Foreign Military Sales program, through which the UAE buys most of its U.S.-made arms. The quality of the UAE force has, by all accounts, benefitted substantially from the U.S. training. U.S. military officers say that UAE fighter pilots, operators of HAWK surface-to-air missile batteries, and special operations forces are highly proficient and have demonstrated their effectiveness in recent combat missions, particularly against AQAP in Yemen. Since 2000, the UAE has hosted a \"Joint Air Warfare Center\" (AWC) where UAE and U.S. forces conduct joint exercises on early warning, air and missile defense, and logistics. Since 2009, UAE Air Force personnel have participated in yearly Desert Falcon exercises at Nellis Air Force Base in Nevada. Within a broader GCC context, joint statements issued after a 2015 and a 2016 U.S.-GCC summit at Camp David announced a new U.S.-GCC strategic partnership in which the United States pledged to (1) facilitate U.S. arms transfers to the GCC states; (2) increase U.S.-GCC cooperation on maritime security, cybersecurity, and counterterrorism; (3) organize additional large-scale joint military exercises and U.S. training; (4) help realize a long-discussed concept of a Gulf-wide ballistic missile defense capability; and (5) U.S.-GCC military exercises and U.S. training for GCC special forces. "], "subsections": []}, {"section_title": "U.S. and Other Arms Sales", "paragraphs": ["U.S. officials assert that arms sales to the UAE enhance U.S. security by building up indigenous GCC capabilities and promoting interoperability. UAE representatives assert that the country would like to work out a mechanism with the United States under which requests for munitions and arms purchases could receive expedited U.S. consideration. Some options might include designating the UAE as a \"Major Non-NATO Ally\" (MNNA), or a mechanism UAE officials say they prefer: legislation that would declare the UAE a key U.S. defense partner. Two Gulf states\u2014Kuwait and Bahrain\u2014are designated as MNNAs. Yet, the United States' preference to work with the GCC as a bloc rather than country-by-country was enshrined in a December 16, 2013, Presidential Determination to allow defense sales to the GCC as a bloc. Some defense sales to the UAE might be contingent on the UAE's joining the Missile Technology Control Regime (MTCR), which UAE officials say they are considering trying to do. The UAE does not receive U.S. aid to purchase U.S. weaponry. On the other hand, congressional opposition to further U.S. support for UAE operations in Yemen could mean that U.S. arms sales to the UAE will halt or slow. ", "Among major FMS programs with or potential sales to the UAE", "F-16 Program . In 2000, the UAE purchased 80 U.S. F-16 aircraft, equipped with the Advanced Medium Range Air to Air Missile (AMRAAM) and the High Speed Anti-Radiation Missile (HARM), at a value of about $8 billion. Congress did not block the sale, although some Members questioned the AMRAAM as an introduction of the weapon into the Gulf. In April 2013, the United States sold the UAE an additional 30 F-16s and associated \"standoff\" air-to-ground munitions, in conjunction with similar weapons sales to Israel and Saudi Arabia, which U.S. officials indicated were intended to signal resolve to Iran. The UAE also has about 60 French-made Mirage 2000 warplanes, and is reportedly considering buying French-made Rafales and the Boeing F/A-18. F-35 . UAE officials and industry sources say the country wants to buy two dozen of the advanced F-35 \"Joint Strike Fighter,\" asserting that possessing the most sophisticated U.S. aircraft enhances interoperability with U.S. air operations. Even though Israel and the UAE are aligned on many regional policies, U.S. officials have said that the United States would not sell the aircraft to the UAE before Israel receives the weapon; delivery to Israel is expected to begin in late 2016. That apparently is an effort to enforce U.S. law that requires maintaining Israel's \"Qualitative Military Edge\" (QME) in the region. However, it was reported in November 2017 that the Trump Administration agreed to preliminary talks on future UAE procurement of the F-35. JDAMs and other Precision-Guided Munitions . The United States has sold the UAE precision-guided missiles for the F-16s, including 20 of the advanced ATM-84 SLAM-ER Telemetry missile and 5,000 GBU-39/B \"bunker buster\" bombs. (The sale of the SLAM-ER to UAE was the first sale of that weapon to a Gulf state.) In 2008, the United States sold the UAE an unspecified number of Join Direct Attack Munitions (JDAM) kits (which convert gravity bombs to precision-guided bombs) worth about $326 million. In 2011, the United States sold the UAE an additional 4,900 JDAM kits at an estimated value of $304 million. On several occasions in 2015, the United States sold the UAE precision-guided munitions (Guided Bomb Units\u2014GBU-31s and GBU-12s) and resupplied it with JDAMs for use against the Islamic State and the Houthi rebellion in Yemen. However, some recent sales of such munitions have been held up by Congress in 2018 and 2019 over concerns about the humanitarian effects of the Yemen war. Apache Helicopters . On November 4, 2010, the Defense Security Cooperation Agency (DSCA) notified Congress of two potential sales, including a $5 billion sale of AH-64 Apache helicopters (30 helicopters, remanufactured to Block III configuration). Missiles. The UAE reportedly possesses a small number (six) of Scud -B ballistic missiles obtained from a non-U.S. suppliers . The United States does not supply or assist the UAE with ballistic missile technology, in part because the country is not an adherent of the Missile Technology Control Regime (MTCR). UAE officials say the country is considering trying to join that convention. Drone s. At a UAE defense show in 2013, the UAE agreed to a commercial sale, worth about $200 million, for Predator X-P unmanned aerial vehicles (UAVs), although they are unarmed and for surveillance only. The system arrived in 2017. Were the UAE to join the MTCR, it might be eligible to buy a U.S.-made armed drone, such as the \"Guardian,\" the sale of which to non-MTCR countries is precluded because it is an MTCR \"Category One\" system. The UAE also reportedly has some Chinese-made UAVs. High Mobility Artillery Rocket System (HIMARS) . In September 2006, the United States sold UAE High Mobility Artillery Rocket Systems (HIMARS) and Army Tactical Missile Systems (ATACMs), valued at about $750 million. Tanks . UAE forces still use primarily 380 French-made Leclerc tanks. "], "subsections": [{"section_title": "Missile and Rocket Defenses", "paragraphs": ["A long-standing U.S. objective\u2014and a driving force behind the formation of the \"U.S.-GCC Strategic Cooperation Forum\" formed in March 2012\u2014has been to organize a coordinated Gulf-wide ballistic missile defense (BMD) network. This objective has taken on greater urgency in the United States and in the Gulf as Iran's missile capability has advanced and Iran has supplied short-range missiles to the Houthis and other allies. ", "The UAE hosts an Integrated Air and Missile Defense (IAMD) Center\u2014a training facility to enhance intra-GCC and U.S.-GCC missile defense cooperation. A U.S. sale to the UAE of the Patriot Advanced Capability 3 (PAC-3) missile defense system, with an estimated value of $9 billion value, was announced in December 2007. In 2008, the United States sold the UAE vehicle-mounted \"Stinger\" antiaircraft systems with an estimated value of $737 million. In 2016, the Administration notified Congress of a potential sale of \"Large Aircraft Infrared Countermeasures\" to protect UAE head of state aircraft against missile threats.", "On May 11, 2017, the Administration notified a potential sale to the UAE of 60 PAC-3 and 100 Patriot Guidance Enhanced Missile-Tactical (GEM-T) missiles, with a total estimated value of about $2 billion. Because these are defensive systems, the sale was not affected by the June 26, 2017, commitment (rescinded in early 2018) by then-Senate Foreign Relations Committee Chairman Senator Bob Corker to withhold informal clearances on sales of \"lethal military equipment\" to the GCC states until there is a path to the resolution of the intra-GCC dispute. ", "THAAD. The UAE was the first GCC state to order the Terminal High Altitude Air Defense System (THAAD), the first sale ever of that sophisticated missile defense system, with an estimated value of about $7 billion. The delivery and training process for the UAE's THAAD system took place in late 2015. "], "subsections": []}]}, {"section_title": "UAE Defense Cooperation with Other Powers", "paragraphs": ["Despite expressing no concerns about any interruption or diminution of its defense ties to the United States, the UAE has sought to diversify its defense partnerships. In 2004, the UAE joined NATO's \"Istanbul Cooperation Initiative,\" later gaining \"observer\" status in NATO. In 2011, the UAE sent an Ambassador to NATO under that organization's revised alliance policy. In 2017, NATO established a liaison office in Abu Dhabi under the auspices of the embassy of Denmark. ", "Since well before the formation of the anti-Islamic State coalition, the UAE has been hosting other countries' forces. In January 2008 the UAE and France signed an agreement to allow a French military presence in UAE. The facilities used\u2014collectively termed Camp De La Paix (\"Peace Camp\")\u2014were inaugurated during a French presidential visit in May 2009. It includes a 900-foot section of the Zayid Port for use by the French navy; an installation at Dhafra Air Base used by France's air force; and a barracks at an Abu Dhabi military camp that houses about 400 French military personnel. ", "India's Prime Minister, Narendra Modi, visited the UAE in August 2015, the first such visit by an Indian leader since 1981. The visit included a strategic component in light of India's naval exercises with GCC countries in recent years. Crown Prince Mohammad bin Zayid made a reciprocal visit to India in January 2017, during which the two countries signed a \"Comprehensive Strategic Partnership Agreement.\" ", "The UAE relationship with Russia has attracted significant attention. In February 2017, press reports indicated that the UAE and Russia might jointly develop a combat aircraft based on the Soviet-era MiG-29. The collaboration\u2014with a partner that is acting against the UAE's interests in Syria and other parts of the region\u2014appeared as an acknowledgment by the UAE of Russia's growing role in the region. The UAE might also be attempting to engage Russia in defense cooperation in order to perhaps try to steer Russian policy in Syria or enlist Russian cooperation in settling regional conflicts. ", "Significant differences between the UAE and United States emerged in 2015 over apparent purchases of weapons by the UAE's Al Mutlaq Technology Company of weapons from North Korea. The North Korean supplier is said to be Korea Mining Development Trading Corporation (Komid), which has been sanctioned by the United States for its involvement in North Korean strategic programs. "], "subsections": []}]}, {"section_title": "Cooperation against Terrorism and Proliferation", "paragraphs": ["The UAE cooperates with U.S. counterterrorism and counterproliferation policies in the region, not only through operations against terrorist groups but also in seeking to preventing the movement of terrorists, pirates, human traffickers, and proliferation-related technology through UAE borders and waters. ", "U.S. programs, which have sometimes included providing small amounts of counterterrorism assistance, have helped build the UAE's capacity to enforce its borders and financial controls. In FY2015, about $400,000 in DOD funds were provided to the UAE to assist its counternarcotics capability, and about $300,000 in similar funding was provided in FY2016. In FY2015, about $260,000 in State Department funds were provided to the UAE to build its capacity to counter terrorism financing (see below). About $310,000 in such funding was provided in FY2016. "], "subsections": [{"section_title": "International Terrorism Issues78", "paragraphs": ["During the mid-1990s, some Al Qaeda activists reportedly were able to move through the UAE, and two of the September 11, 2001, hijackers were UAE nationals who reportedly used UAE-based financial networks. Since then, State Department reports on terrorism have credited the UAE with making significant efforts against terrorism and terrorism financing, and with continuing to foil potential terrorist attacks within the UAE. UAE authorities have arrested and prosecuted Al Qaeda and Islamic State operatives; denounced terror attacks; improved border security; instituted programs to counter violent extremism; instituted laws to block suspect financial transactions; criminalized use of the internet by terrorist groups; and strengthened its bureaucracy and legal framework to combat terrorism. Human rights groups allege that UAE counterterrorism law is often used against domestic political dissidents. In 2014, the government, with FNC concurrence, enacted a revised counterterrorism law that makes it easier to prosecute, and increases penalties for, planning acts of terrorism, and authorizes the UAE cabinet to set up lists of designated terrorist organizations and persons. ", "The UAE cochairs the anti-Islamic State-related \"Coalition Communications Working Group\" along with the United States and Britain. At the December 2014 GCC summit, the leaders announced the creation of a regional police force to be headquartered in Abu Dhabi. The UAE has also joined the Saudi-initiated GCC \"Security Pact\" that requires increased information-sharing and cooperation among the GCC states on internal security threats.", "Among notable UAE counterterrorism actions, in October 2010, UAE authorities assisted in foiling an Al Qaeda in the Arabian Peninsula plot to send bombs to the United States. In December 2012, the UAE, working with Saudi Arabia, arrested members of an alleged terrorist cell plotting attacks in the United States. In April 2013, UAE authorities arrested seven non-UAE Arab nationals allegedly affiliated with Al Qaeda. In 2014, the UAE tried nine people on charges of supporting the Al Nusrah Front (renamed Front for the Conquest of Syria), an Al Qaeda-linked faction of Syrian rebels that is named by the United States as a Foreign Terrorist Organization (FTO). UAE authorities failed to prevent a December 1, 2014, killing of an American teacher by a 38-year-old Emirati woman who allegedly had visited extremist websites, although they defused a bomb she planted outside the home of an American doctor. In 2015, the UAE arrested and prosecuted, or deported, numerous individuals who allegedly planned to join the Islamic State or commit terrorism in the UAE. In March 2016, UAE courts convicted 30 out of 41 individuals (38 of whom were UAE citizens) belonging to a group called Shabab al Manara of plotting terrorist attacks in the UAE. Facilities and assets of the group were closed or seized. ", "Yet, the United States and the UAE sometimes differ on whether some groups are terrorist organizations. For example, the 85 groups that the UAE government designates as terrorist organizations include some U.S.- and Europe-based groups that represent Muslims in those societies and which neither the United States nor any European government accuses of terrorism. These groups include the U.S.-based Muslim American Society and Council on American-Islamic Relations (CAIR); the Muslim Association of Sweden; the Federation of Islamic Organizations in Europe; and the U.K.-based Islamic Relief. The United States Embassy in Abu Dhabi questioned the UAE government about why it designated these groups. The UAE also identifies as terrorist groups several organizations that the United States has not designated as terrorist groups, including the Houthis in Yemen and the Afghan Taliban. The UAE, as noted above, also considers the Muslim Brotherhood as a terrorist group; the Trump Administration reportedly considered designating it as a foreign terrorist organization (FTO). ", "Antit errorism Financing and Money Laundering (A ML/CFT ) . The UAE Central Bank's Financial Intelligence Unit is credited in State Department terrorism reports with providing training programs to UAE financial institutions on money laundering and terrorism financing, and making mandatory the registration of informal financial transmittal networks ( hawala s ). In September 2012, the FBI Legal Attache established a suboffice at the U.S. consulate in Dubai to assist with joint efforts against terrorism and terrorism financing. In June 2014 the UAE set up a financial task force to better prevent use of UAE financial institutions by terrorist organizations. In October 2014, the country adopted a law (Federal Law No. 9) to strengthen a 2002 anti-money-laundering law. On October 29, 2018, the government announced it replaced a 2002 anti-money-laundering law with a new law that raises the country's anti-money-laundering and counter-terrorism financing rules to international standards.", "The country is a member of the Middle East and North Africa Financial Actions Task Force (MENAFATF), a FATF-style regional body, and it chairs the MENAFATF's Training and Typologies Working Group. The UAE is a participant in the Counter-Islamic State Finance Group chaired by Italy, Saudi Arabia, and the United States. In May 2017, the UAE joined the U.S.-GCC Terrorist Financing Targeting Center based in Riyadh. In October 2017, the members of the center designated as terrorists several AQAP and Islamic State-Yemen individuals and entities. ", "Countering Violent Extremism . In 2011, the UAE founded the Global Counterterrorism Forum (GCTF) along with the United States and Turkey. In December 2012, during a meeting of the GCTF, the UAE-based \"International Center of Excellence for Countering Violent Extremism,\" known as Hedayah (\"guidance\"), was inaugurated. The government partners with the U.S. government to run the Sawab Center, an online counter-Islamic State messaging hub. The center, which has an annual budget of about $6 million and a staff of 14, is an institution for training, dialogue, collaboration, and research to counter violent extremism. Its priority is to work to prevent educational institutions from becoming breeding grounds for violent extremism. It also promotes information sharing so that police organizations around the world can receive information from family members who report on relatives who have become radicalized. Several UAE-based think tanks, including the Emirates Center for Strategic Studies and Research (ECSSR), the Emirates Policy Center, the TRENDS Institute, the Tabah Foundation, and the Future Institute for Advanced Research and Statuies, also conducted seminars on confronting terrorism and violent extremism. ", "Transfers from Guantanamo . The UAE has cooperated with U.S. efforts to reduce the detainee population at the U.S. prison facility in Guantanamo Bay, Cuba. In November 2015, the Department of Defense transferred five Yemeni detainees from the facility to the UAE. In August 2016, another 15 Guantanamo detainees (12 Yemenis and 3 Afghans) were transferred to the UAE, the biggest single Guantanamo transfer to date. The day before it left office in January 2017, the Obama Administration transferred another three to the UAE. "], "subsections": []}, {"section_title": "Port and Border Controls", "paragraphs": ["The UAE has signed on to several U.S. efforts to prevent proliferation and terrorism. These include the Container Security Initiative, aimed at screening U.S.-bound containerized cargo transiting Dubai ports, and the UAE has cooperated with all U.S. measures designed to protect aircraft bound for the United States. Several U.S. Customs and Border Protection officers, colocated with the Dubai Customs Intelligence Unit at Port Rashid in Dubai, inspect U.S.-bound containers, many of them apparently originating in Iran. The UAE is also a party to the Proliferation Security Initiative, the Megaports Initiative designed to prevent terrorists from using major ports to ship illicit material, and the Customs-Trade Partnership against Terrorism. In 2013, a \"preclearance facility\" was established at the Abu Dhabi International Airport for travelers boarding direct flights to the United States. The UAE government supports the Department of Homeland Security's programs to secure any UAE-to-U.S. flights, including collecting passenger information and employing retina-screening systems. "], "subsections": []}, {"section_title": "Export Controls", "paragraphs": ["The UAE effort to prevent the reexport of advanced technology, particularly to Iran, has improved considerably since 2010. As a GCC member, the UAE participates in the U.S.-GCC Counter-proliferation Workshop. Taking advantage of geographic proximity and the presence of many Iranian firms in Dubai emirate, numerous Iranian entities involved in Iran's weapons and technology programs maintained offices in Dubai. In connection with revelations of illicit sales of nuclear technology to Iran, Libya, and North Korea by Pakistan's nuclear scientist A.Q. Khan, Dubai was named as a key transfer point for Khan's shipments of nuclear components. Two Dubai-based companies, SMB Computers and Gulf Technical Industries, were apparently involved in transshipping components. In 2004, the United States sanctioned a UAE firm, Elmstone Service and Trading FZE, for selling weapons-related technology to Iran, under the Iran-Syria Non-Proliferation Act ( P.L. 106-178 ). In 2006, the Commerce Department's Bureau of Industry and Security (BIS) imposed a licensing requirement on U.S. exports to Mayrow General Trading Company and related UAE-based companies after Mayrow allegedly transshipped devices used to make improvised explosive devices (IED) in Iraq and Afghanistan. ", "In February 2007 the Bush Administration threatened to characterize the UAE as a \"Destination of Diversion Control\" and to restrict the export of certain technologies to it. A June 2010 Iran sanctions law, the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA, P.L. 111-195 ), formally authorizes countries to be designated as Destinations of Diversion Control and subject to U.S. sanctions. The UAE avoided any such designation by strengthening its export control regime, including a September 2007 law, enacted with FNC concurrence, that tightened export controls. UAE authorities used that law to shut down 40 foreign and UAE firms allegedly involved in dual use exports to Iran and other countries. In September 2012 the UAE (and Bahrain) impounded shipments to Iran of items that Iran could use for its nuclear program. ", "The issue of leakage of technology has sometimes caused U.S. criticism or questioning of UAE investment deals. In December 2008, some Members of Congress called for a review by the interagency Committee on Foreign Investment in the United States (CFIUS) of a proposed joint venture between Advanced Micro Devices and Advanced Technology Investment Co. of Abu Dhabi for the potential for technology transfers. In February 2006, CFIUS approved the takeover by the Dubai-owned Dubai Ports World company of a British firm that manages six U.S. port facilities. Congress, concerned that the takeover might weaken U.S. port security, opposed it in P.L. 109-234 , causing the company to divest assets involved in U.S. port operations. "], "subsections": []}]}]}, {"section_title": "Nuclear Agreement and Other Technology Issues88", "paragraphs": ["The UAE announced in 2008 that it would acquire its first nuclear power reactors to satisfy projected increases in domestic electricity demand. As a condition of receiving U.S. nuclear technology, the United States and the UAE reached an agreement that commits the UAE officials to strict standards that ensure that its nuclear program can only be used for peaceful purposes. Among those commitments is to refrain from domestic uranium enrichment or reprocessing spent nuclear reactor fuel\u2014both processes could produce fissile material for nuclear weapons. The Obama Administration signed an agreement for the United States to assist the program, subject to conditions specified in Section 123 of the Atomic Energy Act of 1954 [42 U.S.C. 2153(b)], on May 21, 2009 (and submitted to Congress that day). Some in Congress expressed concerns about the potential for leakage of technology to Iran as well as the potential for regional proliferation of nuclear technology, but several congressional resolutions approving the agreement ( S.J.Res. 18 and H.J.Res. 60 ) were introduced, as was one disapproving ( H.J.Res. 55 ). No measure blocking the agreement was enacted within 90 days of the submission of the agreement to Congress, and the \"1-2-3 Agreement\" entered into force on December 17, 2009. The International Atomic Energy Agency announced in December 2011 that a group of experts that reviewed the UAE's regulatory framework for the program found \"noted good practices\" and provided suggestions to the Federal Authority for Nuclear Regulation, the UAE's nuclear regulatory authority. Still, reflecting the fact that a Saudi nuclear program might not be bound by the same restrictions that the UAE committed to, UAE officials reportedly told U.S. officials in October 2015 that they no longer consider themselves bound by the pledge that the country would not enrich uranium. ", "A number of U.S. and European firms have secured administrative and financial advisory contracts with the program. In January 2010, the Emirates Nuclear Energy Corporation (ENEC), the institution that is administering the program, announced that it had chosen the Korea Electric Power Corporation (KEPCO of South Korea) to construct the first of four APR1400 nuclear reactors that would sell electricity to the Abu Dhabi Water and Electricity Authority. The first plant is undergoing preoperational testing. The other three are to be operational by 2020. ", "The United States gives the UAE small amounts of assistance to help safeguard its nuclear program and prevent illicit exports of technology from it. For FY2015, the Department of Energy provided the country with about $370,000 for such purposes, and for FY2016, about $220,000 was provided for those programs. ", "On other technology issues, in July 2014 the UAE announced it will form a \"UAE Space Agency\" that, by 2021, is to launch an unmanned spaceship that will probe Mars. The government plans to send its first astronaut to the International Space Station in April 2019. "], "subsections": []}, {"section_title": "Economic Issues", "paragraphs": ["The UAE, a member of the World Trade Organization (WTO), has developed a free market economy, but its financial institutions are weakly regulated. As have the other GCC states that have long depended on exports of hydrocarbons, the UAE has announced plans and policies (\"Vision 2021\") to try to further diversify its economy to a \"post-oil\" era. Dubai emirate, in particular, has long pursued an economic strategy based on attracting investors to construct luxurious and sometimes futuristic projects that provide jobs and attract tourism and publicity. ", "The country is also accepting investment by China under that country's \"Belt and Road Initiative\" (BRI) intended to better connect China economically to other parts of Asia, Central Asia, the Middle East, and Africa.in April 2019, the UAE and China signed deals worth $3.4 billion, most of which will be invested to store and ship Chinese products from the UAE port of Jebel Ali. ", "To help it weather the effect of the sharp drop in oil prices since mid-2014, the government cut some subsidies and raised capital on international markets, including an April 2016 bond offering of $5 billion and an October 2017 bond offering of about $10 billion. The government budget was only slightly in deficit 2017 and 2018, and, coupled with the bond offerings, the UAE has been able to avoid drawing down its $600 billion in various sovereign wealth funds overseen by the Emirates Investment Authority (EIA). "], "subsections": [{"section_title": "Oil and Gas Sector and \"Clean Energy\" Initiatives", "paragraphs": ["The key factor in the UAE's wealth is that it exports large amounts of crude oil while having a small population that receives benefits and services. The UAE exports nearly as much oil as Iraq, while its citizen population is a small fraction of that of Iraq. Abu Dhabi has 80% of the federation's proven oil reserves of about 100 billion barrels, enough for over 100 years of exports at the current production rate of about 2.9 million barrels per day (mbd). Of that, over 2.2 mbd are exported, and the UAE has as much as 500,000 bpd of spare capacity. UAE representatives indicated in late October 2018 that they might increase production to over 3 mbd, but the subsequent sharp drop in world oil prices and OPEC agreement in November 2018 to cut production has likely forestalled any UAE production increase.", "The United States imports negligible amounts of UAE crude oil; the largest share of UAE oil goes to Japan and China. The UAE has vast quantities of natural gas but consumes more than it produces. It has entered into an arrangement (Dolphin Energy) with neighboring countries under which a pipeline carries natural gas from the large gas exporter, Qatar, to the UAE and on to Oman. However, the political differences with Qatar have contributed to UAE evaluation of renewable and other alternatives to relying on Qatar-supplied natural gas. ", "The UAE is trying to secure its oil export routes against any threat by Iran to close the strategic Strait of Hormuz, through which the UAE and other major oil exporters transport their oil exports. In July 2012, the UAE loaded its first tanker of oil following completion of the Abu Dhabi Crude Oil Pipeline (ADCOP) which terminates in the emirate of Fujairah, on the Gulf of Oman. The line, which cost $3 billion, can transport 1.5 million barrels per day of crude oil\u2014about half of UAE production. The UAE is planning a large refinery near that terminal, and possibly a second oil pipeline, to secure its oil exports and value-added petroleum products. ", "The UAE government is also attempting to plan for a time when the developed world is no longer reliant on oil imports. The government has set a target of using 21% renewable energy sources by 2021. It has funded \"Masdar City\"\u2014a planned city, the first phase of which was completed in 2015, that relies only on renewable energy sources and features driverless taxis. "], "subsections": []}, {"section_title": "U.S.-UAE Trade and Trade Promotion Discussions", "paragraphs": ["U.S. trade with the UAE is a significant issue because the UAE is the largest market for U.S. exports to the Middle East. Over 1,000 U.S. companies have offices there and there are over 60,000 Americans working in UAE. U.S. exports to the UAE in 2017 totaled about $20 billion, about 10% less than in 2016. U.S. imports from UAE for 2017 totaled about $4.3 billion, about 20% higher than in 2016. U.S. exports to the UAE were roughly the same as for 2017 (about $20 billion), but imports were somewhat higher ($5 billion, as compared to $4.2 billion in 2017). Goods sold to UAE are mostly commercial aircraft, industrial machinery and materials, and other high-value items. ", "On November 15, 2004, the Bush Administration notified Congress it had begun negotiating a free trade agreement (FTA) with the UAE. Several rounds of talks were held prior to the June 2007 expiration of Administration \"trade promotion authority.\" The FTA talks were later replaced by a U.S.-UAE \"Economic Policy Dialogue,\" between major U.S. and UAE economic agencies. The dialogue, consisting of two meetings per year, began in late 2011 and also included discussion of reform of UAE export controls. In addition, as part of the GCC, the UAE negotiated with the United States a September 2012 \"GCC-U.S. Framework Agreement on Trade, Economic, Investment, and Technical Cooperation\"\u2014a GCC-wide trade and investment framework agreement (TIFA). The agreement was negotiated by the U.S. Trade Representative (USTR)."], "subsections": []}, {"section_title": "U.S. Assistance to the UAE", "paragraphs": ["As noted, because of the UAE's relative wealth, it receives only very small amounts of U.S. foreign assistance. Amounts provided for counternarcotics, counterterrorism financing, and nuclear security are broken down in the sections above. For FY2016, total U.S. aid to the UAE was about $1.15 million. For FY2015, U.S. assistance to the UAE totaled about $840,000. "], "subsections": [{"section_title": "\"Open Skies\" Issue", "paragraphs": ["In 2015, several U.S. airlines asserted that two UAE airlines, Emirates Air (Dubai-based) and Etihad Air (Abu Dhabi-based), as well as Qatar Airways, had an unfair competitive advantage because of alleged receipt of subsidies from their respective governments. The U.S. airlines asserted that the \"Open Skies Agreement\" that the UAE and Qatar have with the United States should be renegotiated so as to limit the access of the three Gulf-based airlines to U.S. routes. The airlines assert they are not subsidized and instead create substantial numbers of jobs for American workers building and serving their aircraft and operations in the United States. UAE officials assert that the country will not agree to renegotiate the Open Skies Agreement. The Obama Administration declined to renegotiate the agreement and President Trump, following a February 2017 meeting with U.S. airline executives, did not indicate any change to that stance. "], "subsections": []}]}]}]}}
{"id": "R45719", "title": "Marijuana Use and Highway Safety", "released_date": "2019-05-14T00:00:00", "summary": ["A growing number of Americans report that they use marijuana. Most states now allow the use of marijuana for treatment of medical conditions. Ten states and the District of Columbia, representing a quarter of the U.S. population, have decriminalized the recreational use of marijuana, and other states are considering following suit.", "As the opportunity for legal use of marijuana grows, there is concern about the impact of marijuana usage on highway safety. In a 2018 survey, the majority of state highway safety officers considered drugged driving an issue at least as important as driving while impaired by alcohol (which is associated with over 10,000 highway deaths each year). As of May 2019, 18 states have enacted laws declaring that a specified concentration of THC in a driver's body constitutes evidence of impairment and is inherently illegal (referred to as per se laws), similar to the .08% blood alcohol content (BAC) standard of alcohol impairment.", "Advocates of loosening restrictions on marijuana often compare marijuana usage to drinking alcohol, which may contribute to some stakeholders viewing marijuana use and driving as similar to alcohol's impairment of driving. Research studies indicate that marijuana's effects on drivers' performance may vary from the effects of alcohol, in ways that challenge dealing with marijuana impairment and driving similarly to alcohol-impaired driving.", "Alcohol is a nervous system depressant that is absorbed into the blood and metabolized by the body fairly quickly, such that there is little trace of alcohol after 24 hours. Its impairing effects have been extensively studied over many decades, and the association between levels of alcohol consumption and degrees of impairment is well-established. By contrast, marijuana is a nervous system stimulant. It contains over 500 chemical compounds, only one of which, tetrahydrocannabinol (THC), is significantly psychoactive. Its effects are felt quickly after smoking, but more slowly when consumed in other forms (e.g., in food). It is metabolized quickly, but the body can store THC in fat cells, so that traces of THC can be found up to several weeks after consumption. Its impairing effects have been the subject of limited study, due in part to its status as a controlled substance under federal law.", "Although laboratory studies have shown that marijuana consumption can affect a person's response times and motor performance, studies of the impact of marijuana consumption on a driver's risk of being involved in a crash have produced conflicting results, with some studies finding little or no increased risk of a crash from marijuana usage. Levels of impairment that can be identified in laboratory settings may not have a significant impact in real world settings, where many variables affect the likelihood of a crash occurring. Research studies have been unable to consistently correlate levels of marijuana consumption, or THC in a person's body, and levels of impairment. Thus some researchers, and the National Highway Traffic Safety Administration, have observed that using a measure of THC as evidence of a driver's impairment is not supported by scientific evidence to date.", "Congress, state legislatures, and other decisionmakers may address the topic of marijuana use and driver impairment through various policy options, including whether or not to support additional research on the impact of marijuana on driver performance and on measurement techniques for marijuana impairment, as well as training for law enforcement on identifying marijuana impairment. Other deliberations may address federal regulations on marijuana use and testing for transportation safety-sensitive employees."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["A growing number of Americans report that they use marijuana. As more states decriminalize the use of marijuana, the question of what impact marijuana usage has on the risk of a driver being involved in a motor vehicle crash has become more pertinent. In a survey, the majority of state highway safety offices rated drugged driving an issue at least as important as driving while impaired by alcohol. ", "When faced with the issue of driver impairment due to marijuana, some stakeholders tend to approach the issue using the analogy of driver impairment due to alcohol. However, there are important differences between the two substances. The fact that alcohol reduces a user's ability to think clearly and to perform physical tasks has been known for decades. Extensive research has established correlations between the extent of alcohol consumption and impairment, including drivers' reaction times. Much less research has been done on marijuana. Marijuana is a more complex substance than alcohol. It is absorbed in the body differently from alcohol; it affects the body in different ways from alcohol; tests for its presence in the body produce more complicated results than tests for the presence of alcohol; and correlating its effects with its levels in the body is much more complicated than for alcohol.", "That marijuana usage increases a driver's risk of crashing is not clearly established. Studies of marijuana's impact on a driver's performance have thus far found that, while marijuana usage can measurably affect a driver's performance in a laboratory setting, that effect may not translate into an increased likelihood of the driver being involved in a motor vehicle crash in a real-world setting, where many other variables affect the risk of a crash. Some studies of actual crashes have estimated a small increase in the risk of crash involvement as a result of marijuana usage, while others have estimated little or no increase in the likelihood of a crash from using marijuana.", "This CRS report addresses various aspects of the issue of marijuana-impaired driving, including patterns of marijuana use, the relationship and detection of marijuana use and driver impairment, and related state law and law enforcement challenges. The report also references the congressionally required July 2017 report by the Department of Transportation's National Highway Traffic Safety Administration (NHTSA), Marijuana-Impaired Driving: A Report to Congress (hereinafter referred to as NHTSA's 2017 Marijuana-Impaired Driving Report to Congress), as well as other studies and research."], "subsections": []}, {"section_title": "Patterns of Marijuana Use", "paragraphs": ["Marijuana is a variety of the Cannabis sativa plant, and contains hundreds of chemical compounds. Two significant compounds found in marijuana are tetrahydrocannabinol (THC), the primary psychoactive compound, and cannabidiol (CBD); CBD is being tested for medicinal purposes, and is not itself psychoactive.", "Marijuana use has been recorded for millennia. In the 20 th century, the sale, possession, and use of marijuana were made illegal in most countries, including the United States. In recent years, however, the trend appears to be moving toward acceptance of marijuana usage. In public opinion polls, the percentage of Americans favoring legalization of marijuana has increased significantly. As of May 2019 33 states and the District of Columbia have enacted laws legalizing marijuana use under certain conditions, generally for medicinal purposes. Since Colorado and Washington State legalized recreational marijuana in 2012, the number of states in which recreational use of marijuana is permitted has grown to 10, plus the District of Columbia. These jurisdictions are home to one-quarter of the U.S. population. In addition to states that have legalized recreational marijuana use, another 23 states and Puerto Rico allow marijuana to be used for treating medical conditions (\"medical marijuana\"). Several other states are considering legalizing recreational use of marijuana. ", "Since 2002, the Substance Abuse and Mental Health Services Administration in the U.S. Department of Health and Human Services has conducted an annual, nationally representative survey of substance use among individuals ages 12 and older. The percentage of individuals age 18 and older who self-report marijuana use in the previous month has grown slowly but steadily since 2008. Self-reported use is highest among young adults (ages 18-25) compared to all other age groups; it rose from 16.6% to 22.1% between 2008 and 2017. Self-reported use among adults age 26 and older rose from 4.2% to 7.9% over the same period. This study does not break out usage patterns by state, but other studies have found that reported usage has increased in virtually all states, both in those that have loosened restrictions on marijuana usage and those that have not. Thus, the impact of a state's treatment of marijuana on the extent of marijuana usage is not clear. Some observers have speculated that states' loosening of restrictions on marijuana usage might lead to increased usage. But the fact that usage by adults appears to be increasing in both states that have and those that have not loosened restrictions suggests that other factors may also be involved.", "NHTSA has sponsored a periodic roadside survey of alcohol use among drivers for decades. The last two surveys (2007 and 2013-2014) also looked at drug use. In the 2013-2014 survey, 12.7% of drivers in the nighttime sample tested positive for THC, up from 8.7% in the 2007 survey. NHTSA did not report concentrations of THC and did not attempt to evaluate impairment. The data do not permit state-level comparisons. "], "subsections": []}, {"section_title": "What Is Impaired Driving?", "paragraphs": ["Driving is among the most dangerous activities the average person engages in. It involves piloting a multiton vehicle at relatively high speeds, usually surrounded by many other such vehicles, and often bicyclists and pedestrians as well. A moment's inattention can, but usually does not, result in a crash. Crashes are usually not serious: the vast majority of crashes result only in damage to the vehicles involved. But in a significant percentage of crashes, one or more people are injured (29.3%), and in a fraction of crashes, people die (0.5%).", "Because of the potential danger to the public posed by drivers, all 50 states, the District of Columbia, and Puerto Rico have laws barring driving while impaired. Impairment involves driving performance that is degraded from its \"normal\" level by some cause. Many things can impair a driver's performance including alcohol, other drugs, fatigue, distraction, and emotional states such as fear or anger. Some state laws against impaired driving require that the state prove that a driver's impairment was caused by the substance or behavior at issue. Other state laws, known as per se laws, provide that a driver is automatically guilty of driving while impaired if specified levels of a potentially impairing substance are found in his or her body (e.g., blood alcohol content (BAC) of .08% or higher, or, in some states, THC in the blood; see Table 1 ). "], "subsections": [{"section_title": "Detecting Impairment", "paragraphs": ["Currently, detecting marijuana impairment through a standardized test is more complicated than detecting alcohol impairment. Evaluating impairment due to alcohol is relatively straightforward. Alcohol is a central nervous system depressant, the effects of which have been extensively observed and studied for a century. It is a liquid that enters the bloodstream quickly and is metabolized (converted into other substances) by the body fairly quickly. Alcohol in the body can be measured in a person's breath, blood, or urine. A person's BAC peaks within an hour after drinking, and declines gradually and linearly after that. The degree of impairment at various BAC levels is fairly well-established, and many studies have established that a driver's risk of being involved in a crash increases as the driver's BAC level increases. ", "In the United States, congressional encouragement has led every state to legislate that a driver whose BAC is .08% or higher is too impaired to drive legally. However, studies indicate there is some degree of impairment at far lower levels of BAC. In several European countries, driving with a BAC of .05% or higher is prohibited, and the State of Utah recently lowered its per se impaired BAC level to .05%. In the United States, commercial truck drivers are barred from performing safety-sensitive functions (such as driving) at a BAC of .04%. Relatively simple tests, such as breath analysis conducted by a police officer at the roadside or analysis of blood or urine samples taken in a clinic, can determine whether an individual's BAC exceeds the legal threshold. Since every state has a law prohibiting driving with a specific BAC level, such tests can be presented as evidence of impairment in court.", "Detecting impairment due to use of marijuana is more difficult. The body metabolizes marijuana differently from alcohol. The level of THC (the psychoactive ingredient of marijuana) in the body drops quickly within an hour after usage, yet traces of THC (nonpsychoactive metabolites) can still be found in the body weeks after usage of marijuana. There is as yet no scientifically demonstrated correlation between levels of THC and degrees of impairment of driver performance, and epidemiological studies disagree as to whether marijuana use by a driver results in increased crash risk. "], "subsections": []}]}, {"section_title": "Marijuana's Impact on Driver Crash Risk", "paragraphs": ["Relatively few studies have been done of the effect of marijuana use on driver performance. This is due, in part, to the requirements that must be met to use marijuana in studies due to its status as a controlled substance under federal law and many state laws. Another factor complicating studies of marijuana's effects on drivers is that the potency of THC in marijuana (i.e., the concentration of THC) can vary from one plant to another. The marijuana produced by the only approved source of marijuana for federally funded research is considered by some researchers to be low quality (potency). Also, the way in which marijuana is processed can affect the potency of the product, and the way the user chooses to ingest marijuana may affect the level of THC in the body.", "The lack of correlation between both marijuana consumption and the level of THC in a person's system and THC levels and driver impairment reduces the usefulness of rule-of-thumb guides of impairment. In contrast, many drivers use rules-of-thumb to guide their alcohol consumption. While emphasizing that even low levels of alcohol consumption can cause drivers to be impaired, tables published on the internet suggest that two drinks may place a 120-pound female in breach of the 0.08% BAC threshold and leave a 160-pound male with \"driving skills significantly affected.\" The National Transportation Safety Board has advised that \"about 2 alcoholic drinks\" within an hour will cause a 160-pound male to experience decline in visual functions and in the ability to perform two tasks at the same time. Based on current knowledge and enforcement capabilities, it is not possible to articulate a similarly simple level or rate of marijuana consumption and a corresponding effect on driving ability. "], "subsections": [{"section_title": "Studies of Crash Risk Associated With Marijuana Usage", "paragraphs": ["To date, results from studies that have examined the association between marijuana use and crash risk have been inconsistent. As described in the 2017 NHTSA report to Congress, one study estimated the increased crash risk from marijuana usage at 1.83 times that of an unimpaired driver, while another study found no association between risk of being involved in a crash and marijuana use. Other studies have estimated the increased crash risk for drivers testing positive for marijuana at between zero and three times that for unimpaired drivers, roughly comparable to the increased crash risk of having a blood alcohol content of between .01% and .05%, well below the legal per se impaired level of .08 BAC. For purposes of comparison, a driver with a BAC of .08% is considered to be five to 20 times more likely to be involved in a crash than an unimpaired driver.", "In NHTSA's 2017 Marijuana-Impaired Driving Report to Congress, NHTSA's survey of the research literature found differences between driving by subjects dosed with alcohol and subjects dosed with marijuana. Marijuana-dosed subjects driving in a simulator or in an instrumented vehicle on a closed course tended to drive below the speed limit, to allow a greater distance between themselves and vehicles ahead of them, and to take fewer risks than when they were not under the influence of marijuana. The study authors hypothesized that the subjects felt effects of the marijuana and were consciously altering their driving behavior to compensate. By contrast, subjects who were dosed with alcohol tended to drive faster than the speed limit, to follow leading cars more closely, and to generally drive in a riskier fashion than when they were not under the influence of alcohol. The NHTSA report includes the caveat that impacts on driving performance that can be measured under controlled conditions may or may not be significant under real-world conditions. NHTSA states that while laboratory studies are useful in identifying how substances affect the performance of driving tasks, only epidemiological studies (i.e., studies that look at actual crashes and the factors involved) are useful in predicting their impact on real-world crash risk. Relatively few epidemiological studies of marijuana usage and crash risk have been conducted, and the few that have been conducted have generally found low or no increased risk of crashes from marijuana use.", "In reports examining many aspects of marijuana use and its effects, the National Academy of Sciences (NAS) in a 2017 report and the National Institutes of Health in a 2018 report reference various studies on the impact of marijuana consumption on driver performance to state that cannabis use prior to driving increases the risk of being involved in a motor vehicle accident. For example, the NAS committee that produced the 2017 report looked at systematic reviews of driving under the influence of marijuana and at recently published primary literature. The NAS committee's report concluded, \"There is substantial evidence of a statistical association between cannabis use and increased risk of motor vehicle crashes.\" ", "Several factors complicate the effort to determine what, if any, impact marijuana usage has on the likelihood of being involved in a crash. Chief among these factors is the distinction between correlation (things that occur together) and causation (one thing that causes another thing). A driver who has been involved in a crash may have used marijuana shortly before the crash; that correlation (marijuana usage and crash involvement) does not alone prove causation (that the marijuana usage was the cause of the driver being involved in a crash). For example, in the United States the population group with the highest rate of motor vehicle crashes, by far, is young male drivers (generally defined as those between the ages of 16 and 19). Young males are also the population group with the highest prevalence of marijuana use. When a young male driver is involved in a motor vehicle crash, and has recently used marijuana, it is difficult to separate the role, if any, of the effects of marijuana usage from the other factors that may contribute to the exceptionally high rate of crash involvement of young male drivers."], "subsections": []}]}, {"section_title": "Law Enforcement", "paragraphs": ["An impaired driving arrest typically begins with a law enforcement officer stopping a driver for a traffic violation or observing a driver at a crash scene or a checkpoint. If the officer suspects that the driver is impaired by alcohol, based on the driver's behavior and signs such as the odor of alcohol or other evidence of its presence, the officer may administer a field sobriety test or preliminary breath test to check for alcohol impairment. Training for the Standard Field Sobriety Test for alcohol impairment is usually included in basic police academy courses. The test includes 1) a driver heel-to-toe walk and turn test, and 2) a driver one-leg standing test. ", "Law enforcement officers often are not trained in recognizing impairment from marijuana or other drugs. NHTSA, with input from law enforcement organizations, has developed two training programs for law enforcement officers to recognize drug impairment in drivers during roadside stops. ", "Advanced Roadside Impaired Driving Enforcement (ARIDE) is a 16-hour course providing basic information on drug impairment, including indications of impairment from both marijuana and other opioids. From 2009 through 2015, around 8% of the nation's patrol officers received ARIDE training. Drug Recognition Experts (DRE) are trained not only to identify impairment by drugs but also to differentiate between categories of drugs. DRE training consists of 72 hours of classroom training and 40 to 60 hours of fieldwork. This represents a considerable investment of resources on the part of the trainee's organization, since it takes the officer away from regular duties for three to four weeks. As of 2016, around 1% of the nation's patrol officers were active DREs. In evaluating drivers suspected of impairment, DREs administer a 12-step evaluation lasting around 90 minutes. This is not a roadside test; the DRE testing protocol calls for the testing to be done in a controlled environment. Adherence to the protocol is important for the validity of the results. "], "subsections": [{"section_title": "Tests for Marijuana Use", "paragraphs": ["Urine, hair follicles, blood, and saliva can be tested for evidence of THC and its metabolites. At present THC cannot be measured accurately in a person's breath. ", "Blood tests are considered the gold standard in establishing the presence of marijuana for impaired driving cases. To conduct a blood test of a driver suspected of driving under the influence of marijuana, police typically must obtain a search warrant and have the blood drawn by a nurse or person licensed to draw blood (phlebotomist). Testing of oral fluid can readily detect the presence of marijuana or its metabolites, and such testing is less complicated than blood testing. It may require a search warrant. Devices that can not only collect but also test oral fluids at the point of arrest (i.e., in the field) are available, but their accuracy and reliability have been questioned. Marijuana can be found in oral fluids as a result of environmental exposure. Hair testing is of little reliability for drug-impaired driving enforcement, as THC can be found in hair months after usage, so a positive result cannot be used to establish usage around the time of driving. THC in hair follicles can result from environmental exposure to second-hand smoke rather than direct consumption of marijuana. Also, the use of hair products can affect test results. Urine testing cannot be reliably used to establish drug use around the time of driving, as THC and its metabolites can be detected in urine for days, or even weeks, after usage.", "The decision as to whether a driver who tests positive for marijuana should be arrested or charged with driving while impaired is not straightforward, because tests for the presence of marijuana in a driver's body are inadequate to determine impairment. The value of testing a person for the presence of alcohol lies largely in the well-established link between levels of alcohol in a person's blood and impairing effects associated with that blood alcohol content. Similar links between levels of THC in a person's body and levels of impairment have not been established.", "The concentration of THC in a person's blood rises rapidly after consumption, then drops rapidly, within an hour or two. Impairing effects appear rapidly, but may remain for some time. Consequently, tests that show the amount of THC in the subject's body are poor indicators of impairment, how recently a person has used marijuana, or whether the person used marijuana or was simply exposed to second-hand smoke. Moreover, tests can show the presence of metabolites of THC, which themselves are not impairing, for weeks after consumption. Also, studies indicate that individuals can adapt to the impairing effects of marijuana, such that a level of THC that could indicate impairment in an occasional marijuana user may not have the same impairment effect on an experienced user."], "subsections": []}, {"section_title": "State Laws Regarding Marijuana and Impaired Driving", "paragraphs": ["Some states have \" per se \" (\"in itself\") laws that make it illegal for a driver to have more than a certain concentration of THC in his or her system. In some other states, it is illegal for a person to drive with any trace of marijuana (\"zero tolerance\") in his or her system (see Table 1 ). ", "Drivers have challenged convictions under per se marijuana impairment laws, with differing results. Some courts, acknowledging the testimony of experts that there is, at present, no reliable test to indicate impairment from marijuana, have nevertheless supported a state's per se standard as a reasonable effort to combat impaired driving in the absence of effective measurements of impairment. Other courts have overturned per se convictions on various grounds (e.g., that while the state legislation included all metabolites of marijuana, it was not reasonable to convict a driver of impairment when the driver tested positive for a metabolite that does not have an impairing effect)."], "subsections": []}, {"section_title": "Federal Regulations Governing Testing for Drug Use", "paragraphs": ["Marijuana possession and usage remain illegal under federal law. In addition, people holding certain jobs, including federal employees and transportation workers in safety-sensitive positions (such as airline pilots, aircraft maintenance personnel, railroad engineers, ship captains, commercial truck drivers, and bus drivers), are prohibited from consuming any amount of marijuana, regardless of state laws.", "Federal regulations require that transportation workers in safety-sensitive positions be tested for alcohol and certain drugs before beginning work for a new employer, if they are involved in a serious crash, and also at random. Safety-sensitive workers who appear to be under the influence of drugs or alcohol while at work can be tested immediately. Those who test positive must be evaluated by a substance abuse professional, complete counseling or treatment as prescribed by the evaluator, undergo a follow-up evaluation, and be tested again before returning to their safety-sensitive work. Those who return to safety-sensitive work after a positive test must be tested at least six times with no advance notice in the following 12 months. The follow-up period of intensive testing can be extended an additional four years. Approximately 12 million transportation workers are subject to these rules.", "In 2009, the U.S. Department of Transportation stated that it is \"unacceptable for any safety-sensitive employee subject to drug testing under the Department of Transportation's drug testing regulations to use marijuana.\" Regardless of many states having legalized more uses of marijuana, safety-sensitive employees remain subject to drug testing and may lose their jobs for marijuana use that is legal under state law. "], "subsections": []}]}, {"section_title": "Options for Congress", "paragraphs": ["There are several subjects on which better information may aid policymaking around the issue of marijuana and impairment. These include", "continued research into whether a quantitative standard can be established that correlates the level of THC in a person's body and the level of impairment, and better data on the prevalence of marijuana use by drivers, especially among drivers involved in crashes and drivers arrested for impaired driving.", "Currently, most states do not distinguish in their records whether drivers arrested for impaired driving are impaired by alcohol or other substances. Substance-specific impaired driving data could be of particular use in analyzing prelegalization and post-legalization data within a state and differences across states with different legal treatment of marijuana use.", "Given that currently the most reliable means of detecting impairment among drivers who have used marijuana is by observation of physiological, cognitive, and psychomotor indicators by law enforcement officers, another policy option is additional support for training of law enforcement officers in detecting impairment. To improve the handling of drug-impaired driving cases, the Governors Highway Safety Association has recommended that prosecutors and judges assigned to drug-impaired driving cases receive training in the issue.", "Among the roughly 12 million transportation workers whose safety-sensitive status subjects them to federally mandated drug testing, federal regulations provide no opportunity for legal use of marijuana, regardless of the status of marijuana under state law. As previously discussed, regulations that apply to safety-sensitive employees do provide an avenue for an employee who has tested positive to regain a safety-sensitive position. CRS could not identify any data on how many safety-sensitive transportation employees have lost their jobs as a result of positive tests for marijuana use. Considering the length of time that marijuana is detectable in the body after usage, and the uncertainty about the impairing effect of marijuana on driving performance, Congress and other federal policymakers may elect to reexamine the rationale for testing all safety-sensitive transportation workers for marijuana usage. Alternatively, Congress and federal policymakers may opt to maintain the status quo until more research results become available."], "subsections": []}]}}
{"id": "RL32341", "title": "Assistance to Firefighters Program: Distribution of Fire Grant Funding", "released_date": "2019-04-25T00:00:00", "summary": ["The Assistance to Firefighters Grant (AFG) Program, also known as fire grants or the FIRE Act grant program, was established by Title XVII of the FY2001 National Defense Authorization Act (P.L. 106-398). Currently administered by the Federal Emergency Management Agency (FEMA), Department of Homeland Security (DHS), the program provides federal grants directly to local fire departments and unaffiliated Emergency Medical Services (EMS) organizations to help address a variety of equipment, training, and other firefighter-related and EMS needs. AFG also supports fire prevention projects and firefighter health and safety research and development through the Firefighter Prevention and Safety (FP&S) grant program. A related program is the Staffing for Adequate Fire and Emergency Response Firefighters (SAFER) program, which provides grants for hiring, recruiting, and retaining firefighters.", "The fire grant program is now in its 19th year. AFG assistance is distributed to career, volunteer, combination, and paid-on-call fire departments serving urban, suburban, and rural areas. There is no set geographical formula for the distribution of fire grants\u2014fire departments throughout the nation apply, and award decisions are made by a peer panel based on the merits of the application and the needs of the community.", "On January 3, 2018, the President signed the United States Fire Administration, AFG, and SAFER Program Reauthorization Act of 2017 (P.L. 115-98). P.L. 115-98 extends the AFG and SAFER authorizations through FY2023; extends the sunset provisions for AFG and SAFER through September 30, 2024; provides that the U.S. Fire Administration (USFA) may develop and make widely available an online training course on AFG and SAFER grant administration; expands SAFER hiring grant eligibility to cover the conversion of part-time or paid-on-call firefighters to full-time firefighters; directs FEMA, acting through the Administrator of USFA, to develop and implement a grant monitoring and oversight framework to mitigate and minimize risks of fraud, waste, abuse, and mismanagement related to the AFG and SAFER grant programs; and makes various technical corrections to the AFG and SAFER statute.", "The Consolidated Appropriations Act, 2019 (P.L. 116-6) provided $700 million for firefighter assistance in FY2019, including $350 million for AFG and $350 million for SAFER. For FY2020, the Administration requested $688.688 million for firefighter assistance, including $344.344 million for AFG and $344.344 million for SAFER. This is the same amount the Administration requested in its FY2019 budget proposal and a 1.6% reduction from the FY2019 appropriation.", "A continuing issue for the 116th Congress is how equitably and effectively grants are being distributed and used to protect the health and safety of the public and firefighting personnel against fire and fire-related hazards. Another continuing issue is budget appropriations for AFG and SAFER. As is the case with many federal programs, concerns over the federal budget deficit could impact budget levels for AFG and SAFER. At the same time, firefighter assistance budgets will likely receive heightened scrutiny from the fire service community, given the local budgetary shortfalls that many fire departments may face."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["Firefighting activities are traditionally the responsibility of states and local communities. As such, funding for firefighters is provided mostly by state and local governments. During the 1990s, shortfalls in state and local budgets, coupled with increased responsibilities of local fire departments, led many in the fire community to call for additional financial support from the federal government. Although federally funded training programs existed (and continue to exist) through the National Fire Academy, and although federal money was available to first responders for counterterrorism tra ining and equipment through the Department of Justice, there did not exist a dedicated program, exclusively for firefighters, which provided federal money directly to local fire departments to help address a wide variety of equipment, training, and other firefighter-related needs."], "subsections": []}, {"section_title": "Assistance to Firefighters Grant Program", "paragraphs": ["During the 106 th Congress, many in the fire community asserted that local fire departments require and deserve greater support from the federal government. The Assistance to Firefighters Grant Program (AFG), also known as fire grants or the FIRE Act grant program, was established by Title XVII of the FY2001 Floyd D. Spence National Defense Authorization Act ( P.L. 106-398 ). Currently administered by the Federal Emergency Management Agency (FEMA) in the Department of Homeland Security (DHS), the program provides federal grants directly to local fire departments and unaffiliated Emergency Medical Services (EMS) organizations to help address a variety of equipment, training, and other firefighter-related and EMS needs. AFG also supports fire prevention projects and firefighter health and safety research and development through the Firefighter Prevention and Safety (FP&S) grant program, which is funded at not less than 10% of the annual appropriation for AFG.", "Since its establishment, the Assistance to Firefighters Grant program has been reauthorized three times. The first reauthorization was Title XXXVI of the FY2005 Ronald W. Reagan National Defense Authorization Act ( P.L. 108-375 ), which authorized the program through FY2009. The second reauthorization was Title XVIII, Subtitle A of the FY2013 National Defense Authorization Act ( P.L. 112-239 ), which authorized the program through FY2017 and modified program rules for disbursing grant money. The third and current reauthorization is the United States Fire Administration, AFG, and SAFER Program Reauthorization Act of 2017 ( P.L. 115-98 ), which authorizes the program through FY2023."], "subsections": [{"section_title": "Fire Grants Reauthorization Act of 2012", "paragraphs": ["On January 2, 2013, President Obama signed P.L. 112-239 , the FY2013 National Defense Authorization Act. Title XVIII, Subtitle A is the Fire Grants Reauthorization Act of 2012, which authorized the fire grant program through FY2017 and made significant changes in how grant money would be disbursed. Table 1 provides a summary of key provisions of the 2012 reauthorization, and provides a comparison with the previously existing statute."], "subsections": []}, {"section_title": "Fire Grants Reauthorization in the 115th Congress", "paragraphs": ["With the authorizations of both the AFG and SAFER programs expiring on September 30, 2017, and with sunset dates for both programs of January 2, 2018, the 115 th Congress considered reauthorization legislation."], "subsections": [{"section_title": "Senate", "paragraphs": ["On April 5, 2017, S. 829 , the AFG and SAFER Program Reauthorization Act of 2017 was introduced by Senator McCain and referred to the Committee on Homeland Security and Governmental Affairs. On May 17, 2017, the committee ordered S. 829 to be reported ( S.Rept. 115-128 ) with an amendment in the nature of a substitute. On August 2, 2017, the Senate passed S. 829 by unanimous consent."], "subsections": []}, {"section_title": "House", "paragraphs": ["On July 12, 2017, the House Subcommittee on Research and Technology, Committee on Science, Space and Technology, held a hearing entitled U.S. Fire Administration and Fire Grant Programs Reauthorization: Examining Effectiveness and Priorities . Testimony was heard from the USFA acting administrator and from fire service organizations.", "On December 15, 2017, H.R. 4661 , the United States Fire Administration, AFG, and SAFER Program Reauthorization Act of 2017, was introduced by Representative Comstock. H.R. 4661 was identical to the Senate-passed S. 829 , except that while S. 829 repealed the sunset provisions for AFG and SAFER, H.R. 4661 extended the sunset dates to September 30, 2024. Additionally, H.R. 4661 reauthorized the USFA through FY2023. ", "On December 18, 2017, the House passed H.R. 4661 by voice vote under suspension of the rules. On December 21, 2017, the Senate passed H.R. 4661 without amendment by unanimous consent.", "Other legislation related to the fire act reauthorization included H.R. 3881 , the AFG and SAFER Program Reauthorization Act of 2017, introduced by Representative Pascrell, which was identical to S. 829 as passed by the Senate; and H.R. 1571 , the Fire Department Proper Response and Equipment Prioritization Act, which was introduced by Representative Herrera-Beutler and would amend the FIRE Act statute to direct FEMA to give high-priority consideration to grants providing for planning, training, and equipment to firefighters for crude oil-by-rail and ethanol-by-rail derailment and incident response."], "subsections": []}]}, {"section_title": "United States Fire Administration, AFG, and SAFER Program Reauthorization Act of 2017 (P.L. 115-98)", "paragraphs": ["On January 3, 2018, the President signed the United States Fire Administration, AFG, and SAFER Program Reauthorization Act of 2017 ( P.L. 115-98 ). P.L. 115-98", "extends the AFG and SAFER authorizations through FY2023; extends the sunset provisions for AFG and SAFER through September 30, 2024; extends the USFA authorization through FY2023; provides that the U.S. Fire Administration in FEMA may develop and make widely available an online training course on AFG and SAFER grant administration; expands SAFER hiring grant eligibility to cover the conversion of part-time or paid-on-call firefighters to full-time firefighters; directs FEMA, acting through the Administrator of USFA, to develop and implement a grant monitoring and oversight framework to mitigate and minimize risks of fraud, waste, abuse, and mismanagement related to the AFG and SAFER grant programs; and makes various technical corrections to the AFG and SAFER statute."], "subsections": []}, {"section_title": "Appropriations", "paragraphs": ["From FY2001 through FY2003, the Assistance to Firefighters Grant (AFG) Program (as part of USFA/FEMA) received its primary appropriation through the VA-HUD-Independent Agencies Appropriation Act. In FY2004, the Assistance to Firefighters Program began to receive its annual appropriation through the House and Senate Appropriations Subcommittees on Homeland Security.", "The fire grant program is in its 19 th year. Table 2 shows the appropriations history for firefighter assistance, including AFG, SAFER, and the Fire Station Construction Grants (SCG) provided in the American Recovery and Reinvestment Act of 2009 (ARRA). Table 3 shows recent and proposed appropriated funding for the AFG and SAFER grant programs."], "subsections": [{"section_title": "FY2017", "paragraphs": ["For FY2017, the Obama Administration requested $335 million for AFG and $335 million for SAFER, a reduction of $10 million for each program from the FY2016 enacted level. The budget justification stated that the proposed reduction in AFG and SAFER \"reflects FEMA's successful investments in prior year grants awarded.\"", "Under the proposed budget, the AFG and SAFER grant accounts would be transferred to the Preparedness and Protection activity under FEMA's broader \"Federal Assistance\" account. According to the budget request, Federal Assistance programs will \"assist Federal agencies, States, Local, Tribal, and Territorial jurisdictions to mitigate, prepare for and recover from terrorism and natural disasters.\" ", "On May 26, 2016, the Senate Appropriations Committee approved S. 3001 , the Department of Homeland Security Act, 2017. The Senate bill would provide $680 million for firefighter assistance, including $340 million for AFG and $340 million for SAFER. The committee maintained a separate budget account for Firefighter Assistance and did not transfer that budget account to the Federal Assistance account as proposed in the Administration budget request. In the accompanying report ( S.Rept. 114-68 ), the committee directed DHS to continue the present practice of funding applications according to local priorities and those established by the USFA, and to continue direct funding to fire departments and the peer review process. The committee stated its expectation that funding for rural fire departments remain consistent with their previous five-year history, and directed FEMA to brief the committee if there is a fluctuation. ", "On June 22, 2016, the House Appropriations Committee approved its version of the Department of Homeland Security Appropriations Act, 2017. Unlike the Senate, the House Committee did transfer the Firefighter Assistance budget account into a broader Federal Assistance account in FEMA. The bill provided $690 million for firefighter assistance, including $345 million for AFG and $345 million for SAFER. In the committee report, the committee directed FEMA to continue administering the fire grants programs as directed in prior year committee reports, and encouraged FEMA to ensure that the formulas used for equipment accurately reflect current costs. ", "The Consolidated Appropriations Act, 2017 ( P.L. 115-31 ) provided $690 million for firefighter assistance in FY2017, including $345 million for AFG and $345 million for SAFER. Money is to remain available through September 30, FY2018. The firefighter assistance account was transferred to FEMA's broader Federal Assistance account."], "subsections": []}, {"section_title": "FY2018", "paragraphs": ["For FY2018, the Administration requested $688.688 million for firefighter assistance, including $344.344 million for AFG and $344.344 million for SAFER, slightly below the FY2017 level. AFG and SAFER are under Grants in the Federal Assistance budget account.", "On July 18, 2017, the House Appropriations Committee approved the Department of Homeland Security Appropriations Act, 2018 ( H.R. 3355 ; H.Rept. 115-239 ). The bill provided $690 million for firefighter assistance under the Federal Assistance budget account, including $345 million for AFG and $345 million for SAFER. In the bill report, the committee encouraged FEMA to give high-priority consideration to grants providing for planning, training, and equipment to firefighters for crude oil-by-rail and ethanol-by-rail derailment and incident response. ", "On September 14, 2017, the House passed H.R. 3354 , a FY2018 omnibus appropriations bill that includes funding for AFG and SAFER. During floor consideration, the House adopted an amendment offered by Representative Kildee that added $20 million to SAFER; thus H.R. 3354 would provide $345 million for AFG and $365 million for SAFER.", "The Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) provided $700 million for firefighter assistance in FY2018, including $350 million for AFG and $350 million for SAFER. Money is to remain available through September 30, 2019."], "subsections": []}, {"section_title": "FY2019", "paragraphs": ["For FY2019, the Administration requested $688.688 million for firefighter assistance, including $344.344 million for AFG and $344.344 million for SAFER.", "On June 21, 2018, the Senate Appropriations Committee approved S. 3109 , the Department of Homeland Security Act, 2019 ( S.Rept. 115-283 ). The Senate bill would have provided $700 million for firefighter assistance, including $350 million for AFG and $350 million for SAFER.", "On July 25, 2018, the House Appropriations Committee approved its version of the FY2019 Homeland Security appropriations bill ( H.R. 6776 ; H.Rept. 115-948 ). The House bill would also have provided $700 million for firefighter assistance, including $350 million for AFG and $350 million for SAFER. In the bill report, the committee encouraged FEMA to give high priority consideration to grants providing for planning, training, and equipment to firefighters for crude oil-by-rail and ethanol-by-rail derailment and incident response. The committee also encouraged FEMA to \"provide technical assistance, and work more closely with those communities that are underserved or underrepresented,\" and to rate Source Capture Exhaust Extraction Systems as \"high priority\" under the AFG program.", "The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provided $700 million for firefighter assistance in FY2019, including $350 million for AFG and $350 million for SAFER, with funds to remain available through September 30, 2020. "], "subsections": []}, {"section_title": "FY2020", "paragraphs": ["For FY2020, the Administration requested $688.688 million for firefighter assistance, including $344.344 million for AFG and $344.344 million for SAFER. This is the same amount the Administration requested in its FY2019 budget proposal and a 1.6% reduction from the FY2019 appropriation. "], "subsections": []}]}]}, {"section_title": "Fire Station Construction Grants in the ARRA", "paragraphs": ["Since its inception, the traditional fire grant program has provided money specifically for health- and safety-related modifications of fire stations, but has not funded major upgrades, renovations, or construction. The American Recovery and Reinvestment Act (ARRA) of 2009 ( P.L. 111-5 ) provided an additional $210 million in firefighter assistance grants for modifying, upgrading, or constructing state and local nonfederal fire stations, provided that 5% be set aside for program administration, and provided that no grant shall exceed $15 million. The conference report ( H.Rept. 111-16 ) cited DHS estimates that this spending would create 2,000 jobs. The ARRA also included a provision (\u00a7603) that waived the matching requirement for SAFER grants funded by appropriations in FY2009 and FY2010.", "The application period for ARRA Assistance to Firefighters Fire Station Construction Grants (SCG) opened on June 11 and closed on July 10, 2009. There is no cost share requirement for SCG grants. Eligible applicants are nonfederal fire departments that provide fire protection services to local communities. Ineligible applicants include federal fire departments, EMS or rescue organizations, airport fire departments, for-profit fire departments, fire training centers, emergency communications centers, auxiliaries and fire service organizations or associations, and search and rescue teams or similar organizations without fire suppression responsibilities. ", "DHS/FEMA received 6,025 SCG applications for $9.9 billion in federal funds. As of October 1, 2010, 119 SCG grants were awarded, totaling $207.461 million to fire departments within the United States. A complete list of SCG awards is available at http://www.fema.gov/rules-tools/assistance-firefighters-station-construction-grants ."], "subsections": []}, {"section_title": "SAFER Grants", "paragraphs": ["In response to concerns over the adequacy of firefighter staffing, the 108 th Congress enacted the Staffing for Adequate Fire and Emergency Response (SAFER) Act as Section 1057 of the FY2004 National Defense Authorization Act ( P.L. 108-136 ; signed into law November 24, 2003). The SAFER grant program is codified as Section 34 of the Federal Fire Prevention and Control Act of 1974 (15 U.S.C. 2229a). The SAFER Act authorizes grants to career, volunteer, and combination fire departments for the purpose of increasing the number of firefighters to help communities meet industry minimum standards and attain 24-hour staffing to provide adequate protection from fire and fire-related hazards. Also authorized are grants to volunteer fire departments for activities related to the recruitment and retention of volunteers. For more information on the SAFER program, see CRS Report RL33375, Staffing for Adequate Fire and Emergency Response: The SAFER Grant Program , by Lennard G. Kruger."], "subsections": []}, {"section_title": "Program Evaluation", "paragraphs": ["On May 13, 2003, the U.S. Fire Administration (USFA) released the first independent evaluation of the Assistance to Firefighters Program. Conducted by the U.S. Department of Agriculture's Leadership Development Academy Executive Potential Program, the survey study presented a number of recommendations and concluded overall that the program was \"highly effective in improving the readiness and capabilities of firefighters across the nation.\" Another evaluation of the fire grant program was released by the DHS Office of Inspector General in September 2003. The report concluded that the program \"succeeded in achieving a balanced distribution of funding through a competitive grant process,\" and made a number of specific recommendations for improving the program.", "At the request of DHS, the National Academy of Public Administration conducted a study to help identify potential new strategic directions for the Assistance to Firefighters Grant program and to provide advice on how to effectively plan, manage, and measure program accomplishments. Released in April 2007, the report recommended consideration of new strategic directions related to national preparedness, prevention vs. response, social equity, regional cooperation, and emergency medical response. According to the report, the \"challenge for the AFG program will be to support a gradual shift in direction without losing major strengths of its current management approach\u2014including industry driven priority setting and its well-respected peer review process.\"", "The Consolidated Appropriations Act of 2008 ( P.L. 110-161 ), in the accompanying Joint Explanatory Statement, directed the Government Accountability Office (GAO) to review the application and award process for fire and SAFER grants. Additionally, FEMA was directed to peer review grant applications that best address the program's priorities and criteria as established by FEMA and the fire service. Those criteria necessary for peer-review must be included in the grant application package. Applicants whose grant applications are not reviewed must receive an official notification detailing why the application did not meet the criteria for review. Applications must be rank-ordered, and funded following the rank order.", "In October 2009, GAO sent a report to Congress finding that FEMA has met most statutory requirements for awarding fire grants. GAO recommended that FEMA establish a procedure to track EMS awards, ensure that grant priorities are better aligned with application questions and scoring values, and provide specific feedback to rejected applicants.", "During 2014 and 2015, the DHS Office of the Inspector General (OIG) conducted an audit of AFG grants for fiscal years 2010 through 2012. On June 9, 2016, the DHS OIG released its report finding that 64% of AFG grant recipients over that period did not comply with grant guidance and requirements to prevent waste, fraud, and abuse of grant funds. The report recommended that FEMA's Grant Programs Directorate develop and implement an organizational framework to manage the risk of fraud, waste, abuse, and mismanagement. According to the report, FEMA has concurred with the OIG findings and has taken corrective actions to resolve the recommendations. ", "Meanwhile, the Fire Grants Reauthorization Act of 2012 ( P.L. 112-239 ) directed GAO to prepare a report to Congress that includes an assessment of the effect of the changes made by P.L. 112-239 on the effectiveness, relative allocation, accountability, and administration of the fire grants. GAO was also directed to evaluate the extent to which those changes have enabled grant recipients to mitigate fire and fire-related and other hazards more effectively. In September 2016, GAO released its report, entitled Fire Grants: FEMA Could Enhance Program Administration and Performance Assessment. The report concluded that FEMA's fire grant policies and the awards made in FY2013 and FY2014 generally reflected the changes to the fire grant statute made by P.L. 112-239 , and that FEMA enhanced its assessment of program performance by establishing and reporting on measures of effectiveness of the grants. However, GAO also concluded that those performance measures do not include measurable performance targets linked to AFG and SAFER program goals, and that \"aligning the fire grants programs' use of data on, and definitions of, critical infrastructure to award fire grants and assess program performance with the more objective, quantitative approach used by DHS and GPD [the Grants Program Directorate] for other programs and nonfire preparedness grants could enhance GPD's efforts to integrate the fire grants program into larger national preparedness efforts and more objectively assess the impact of fire grants.\"", "In November 2016, the National Fire Protection Association (NFPA) released its Fourth Needs Assessment of the U.S. Fire Service , which seeks to identify gaps and needs in the fire service, and assesses the extent to which fire grants target those gaps and needs. According to the study:", "For respondent departments, fire service needs are extensive across the board, and in nearly every area of need, the smaller the community protected, the greater the need.", "While some needs have declined, many others have been constant or have shown an increase. Gaps remain across the board in staffing, training, facilities, apparatus, personal protective equipment, and health and wellness. Evidence of the need for staffing engines; training for structural firefighting, Hazmat and wildland firefighting; and updated SCBA and personal protective clothing is concerning.", "Roles and responsibilities of the fire service are expanding apparently at the same time appears that resources are being cut. EMS and Hazmat are now common responsibilities while active shooter response, enhanced technical rescue and wildland-urban interface firefighting are up and coming challenges for many departments.", "AFG and SAFER grant funds are targeted towards areas of need. As other resources are cut back, more departments turn towards these grants for support. If anything, these grant programs should grow in order to address the considerable multifaceted need that continues in the fire service."], "subsections": []}, {"section_title": "Distribution of Fire Grants", "paragraphs": ["The AFG statute prescribes different purposes for which fire grant money may be used. These are training firefighting personnel; creating rapid intervention teams; certifying fire inspectors and building inspectors whose responsibilities include fire safety inspections and who are associated with a fire department; establishing wellness and fitness programs, including mental health programs; funding emergency medical services (EMS) provided by fire departments and nonaffiliated EMS organizations; acquiring firefighting vehicles; acquiring firefighting equipment; acquiring personal protective equipment; modifying fire stations, fire training facilities, and other facilities for health and safety; educating the public about arson prevention and detection; providing incentives for the recruitment and retention of volunteer firefighters; and supporting other activities as FEMA determines appropriate. FEMA has the discretion to decide which of those purposes will be funded for a given grant year. This decision is based on a Criteria Development Panel, composed of fire service and EMS representatives, which annually recommends criteria for awarding grants.", "Since the program commenced in FY2001, the majority of fire grant funding has been used by fire departments to purchase firefighting equipment, personal protective equipment, and firefighting vehicles. Eligible applicants are limited primarily to fire departments (defined as an agency or organization that has a formally recognized arrangement with a state, local, or tribal authority to provide fire suppression, fire prevention, and rescue services to a population within a fixed geographical area). Emergency Medical Services (EMS) activities (at least 3.5% of annual AFG funding) are eligible for fire grants, including a limited number (no more than 2%) to nonfire department EMS organizations not affiliated with hospitals. ", "Additionally, a separate competition is held for fire prevention and firefighter safety research and development grants, which are available to fire departments; national, state, local, tribal, or nonprofit organizations recognized for their fire safety or prevention expertise; and to institutions of higher education, national fire service organizations, or national fire safety organizations to establish and operate fire safety research centers. For official program and application guidelines, frequently asked questions, the latest awards announcements, and other information, see the Assistance to Firefighters Grant program web page at http://www.fema.gov/welcome-assistance-firefighters-grant-program .", "The FIRE Act statute provides overall guidelines on how fire grant money will be distributed. Previously, the law directed that volunteer and combination departments receive a proportion of the total grant funding that is not less than the proportion of the U.S. population that those departments protect (34% for combination, 21% for all-volunteer). Reflecting concerns that career fire departments (which are primarily in urban and suburban areas) were not receiving adequate levels of funding, the Fire Grants Authorization Act of 2012 altered the distribution formula, directing that not less than 25% of annual AFG funding go to career fire departments, not less than 25% to volunteer fire departments, not less than 25% to combination and paid-on-call fire departments, and not less than 10% for open competition among career, volunteer, combination, and paid-on-call fire departments. Additionally, P.L. 112-239 raised award caps (up to $9 million) and lowered matching requirements for fire departments serving higher population areas. ", "There is no set geographical formula for the distribution of fire grants\u2014fire departments throughout the nation apply, and award decisions are made by a peer panel based on the merits of the application and the needs of the community. However, in evaluating applications, FEMA may take into consideration the type of department (paid, volunteer, or combination), geographic location, and type of community served (e.g., urban, suburban, or rural). ", "In an effort to maximize the diversity of awardees, the geographic location of an applicant (using states as the basic geographic unit) is used as a deciding factor in cases where applicants have similar qualifications. Table 4 shows a state-by-state breakdown of fire grant funding for FY2001 through FY2017, while Table 5 shows a state-by-state breakdown of SAFER grant funding for FY2005 through FY2017. Table 6 shows the percentage distribution of AFG grant funds by type of department (career, combination, volunteer, paid-on-call) for FY2009 through FY2014, while Table 7 shows the percentage distribution of AFG grant funds by community service area (urban, suburban, rural) for FY2009 through FY2014."], "subsections": []}, {"section_title": "Impact of 2018-2019 Government Shutdown", "paragraphs": ["Firefighter assistance grants were impacted by the partial government shutdown. FEMA personnel who administer the grants were furloughed. For all three grant programs (AFG, SAFER, and FP&S) the application and awards process was delayed. For the 2018 awards round, the application windows for AFG and FP&S closed in October and December 2018, respectively, but the processing of those applications could not move forward. The opening of the 2018 round application window for SAFER grants was also delayed. ", "For grants already awarded (in the 2017 and previous rounds), grant recipients periodically draw down funds, either to reimburse expenditures already incurred, or in immediate advance of those expenditures. Grant recipients were unable to draw down funds during the shutdown, which may have disrupted the ability of the grantees to continue grant-funded activities, including personnel costs covered by SAFER grant awards, which extend for three years. This disruption may continue after the government shutdown has resolved due to a backlog of payment requests that need to be processed once furloughed FEMA grant personnel return to work."], "subsections": []}, {"section_title": "Issues in the 116th Congress", "paragraphs": ["AFG assistance is distributed to career, volunteer, combination, and paid-on-call fire departments serving urban, suburban, and rural areas. A continuing issue is how equitably and effectively grants are being distributed and used to protect the health and safety of the public and firefighting personnel against fire and fire-related hazards.", "Another issue for Congress is whether AFG should be expanded to allow additional eligible uses of AFG grants. For example, H.R. 1823 , the Help Ensure Responders Overdosing Emerge Safely Act of 2019, would amend the Federal Fire Prevention and Control Act of 1974 to include as an eligible use of AFG grants, \"to provide opioid receptor antagonists, including naloxone, to firefighters, paramedics, emergency medical service workers, and other first responders for personal use.\"", "Finally, a continuing issue is budget appropriations for AFG and SAFER. As is the case with many federal programs, concerns over the federal budget deficit could impact budget levels for AFG and SAFER. At the same time, firefighter assistance budgets will likely receive heightened scrutiny from the fire service community, given the local budgetary shortfalls that many fire departments may face. "], "subsections": []}]}}
{"id": "R45631", "title": "Data Protection Law: An Overview", "released_date": "2019-03-25T00:00:00", "summary": ["Recent high-profile data breaches and other concerns about how third parties protect the privacy of individuals in the digital age have raised national concerns over legal protections of Americans' electronic data. Intentional intrusions into government and private computer networks and inadequate corporate privacy and cybersecurity practices have exposed the personal information of millions of Americans to unwanted recipients. At the same time, internet connectivity has increased and varied in form in recent years. Americans now transmit their personal data on the internet at an exponentially higher rate than in the past, and their data are collected, cultivated, and maintained by a growing number of both \"consumer facing\" and \"behind the scenes\" actors such as data brokers. As a consequence, the privacy, cybersecurity and protection of personal data have emerged as a major issue for congressional consideration.", "Despite the rise in interest in data protection, the legislative paradigms governing cybersecurity and data privacy are complex and technical, and lack uniformity at the federal level. The constitutional \"right to privacy\" developed over the course of the 20th century, but this right generally guards only against government intrusions and does little to shield the average internet user from private actors. At the federal statutory level, there are a number of statutes that protect individuals' personal data or concern cybersecurity, including the Gramm-Leach-Bliley Act, Health Insurance Portability and Accountability Act, Children's Online Privacy Protection Act, and others. And a number of different agencies, including the Federal Trade Commission (FTC), the Consumer Finance Protection Bureau (CFPB), and the Department of Health and Human Services (HHS), enforce these laws. But these statutes primarily regulate certain industries and subcategories of data. The FTC fills in some of the statutory gaps by enforcing a broad prohibition against unfair and deceptive data protection practices. But no single federal law comprehensively regulates the collection and use of consumers' personal data. Seeking a more fulsome data protection system, some governments\u2014such as California and the European Union (EU)\u2014have recently enacted privacy laws regulating nearly all forms of personal data within their jurisdictional reach. Some argue that Congress should consider creating similar protections in federal law, but others have criticized the EU and California approaches as being overly prescriptive and burdensome.", "Should the 116th Congress consider a comprehensive federal data protection law, its legislative proposals may involve numerous decision points and legal considerations. Points of consideration may include the conceptual framework of the law (i.e., whether it is prescriptive or outcome-based), the scope of the law and its definition of protected information, and the role of the FTC or other federal enforcement agency. Further, if Congress wants to allow individuals to enforce data protection laws and seek remedies for the violations of such laws in court, it must account for standing requirements in Article III, Section 2 of the Constitution. Federal preemption also raises complex legal questions\u2014not only of whether to preempt state law, but what form of preemption Congress should employ. Finally, from a First Amendment perspective, Supreme Court jurisprudence suggests that while some privacy, cybersecurity, or data security regulations are permissible, any federal law that restricts protected speech, particularly if it targets specific speakers or content, may be subject to more stringent review by a reviewing court."], "reports": {"section_title": "", "paragraphs": ["R ecent high-profile data breaches and privacy violations have raised national concerns over the legal protections that apply to Americans' electronic data. While some concern over data protection stems from how the government might utilize such data, mounting worries have centered on how the private sector controls digital information, the focus of this report. Inadequate corporate privacy practices and intentional intrusions into private computer networks have exposed the personal information of millions of Americans. At the same time, internet connectivity has increased and varied in form in recent years, expanding from personal computers and mobile phones to everyday objects such as home appliances, \"smart\" speakers, vehicles, and other internet-connected devices. ", "Americans now transmit their personal data on the internet at an exponentially higher rate than the past. Along with the increased connectivity, a growing number of \"consumer facing\" actors (such as websites) and \"behind the scenes\" actors (such as data brokers and advertising companies) collect, maintain, and use consumers' information. While this data collection can benefit consumers\u2014for instance, by allowing companies to offer them more tailored products\u2014it also raises privacy concerns, as consumers often cannot control how these entities use their data. As a consequence, the protection of personal data has emerged as a major issue for congressional consideration. ", "Despite the increased interest in data protection, the legal paradigms governing the security and privacy of personal data are complex and technical, and lack uniformity at the federal level. The Supreme Court has recognized that the Constitution provides various rights protecting individual privacy, but these rights generally guard only against government intrusions and do little to prevent private actors from abusing personal data online. At the federal statutory level, while there are a number of data protection statutes, they primarily regulate certain industries and subcategories of data. The Federal Trade Commission (FTC) fills in some of the statutory gaps by enforcing the federal prohibition against unfair and deceptive data protection practices. But no single federal law comprehensively regulates the collection and use of personal data.", "In contrast to the \"patchwork\" nature of federal law, some state and foreign governments have enacted more comprehensive data protection legislation. Some analysts suggest these laws, which include the European Union's (EU's) General Data Protection Regulation (GDPR) and state laws such as the California Consumer Privacy Act (CCPA), will create increasingly overlapping and uneven data protection regimes. This fragmented legal landscape coupled with concerns that existing federal laws are inadequate has led many stakeholders to argue that the federal government should assume a larger role in data protection policy. However, at present, there is no consensus as to what, if any, role the federal government should play, and any legislative efforts at data protection are likely to implicate unique legal concerns such as preemption, standing, and First Amendment rights, among other issues. ", "This report examines the current U.S. legal landscape governing data protection, contrasting the current patchwork of federal data protection laws with the more comprehensive regulatory models in the CCPA and GDPR. The report also examines potential legal considerations for the 116th Congress should it consider crafting more comprehensive federal data protection legislation. The report lastly contains an Appendix , which contains a table summarizing the federal data protection laws discussed in the report."], "subsections": [{"section_title": "Origins of American Privacy Protections", "paragraphs": [], "subsections": [{"section_title": "The Common Law and the Privacy Torts", "paragraphs": ["Historically, the common law in the United States had little need to protect privacy\u2014as one commentator has observed, \"[s]olitude was readily available in colonial America.\" Although common law had long protected against eavesdropping and trespass, these protections said little to nothing about individual rights to privacy, per se. Over time, gradual changes in the technological and social environment caused a shift in the law. In 1890, Louis Brandeis and Samuel Warren published a groundbreaking article in the Harvard Law Review entitled The Right to Privacy . Reacting to the proliferation of the press and advancements in technology such as more advanced cameras, the article argued that the law should protect individuals' \"right to privacy\" and shield them from intrusion from other individuals. The authors defined this emergent right as the \"right to be let alone.\" Scholars have argued that this article created a \"revolution\" in the development of the common law. ", "In the century that followed Brandeis's and Warren's seminal article, most states recognized the so-called \"privacy torts\"\u2014intrusion upon seclusion, public disclosure of private facts, false light or \"publicity,\" and appropriation. These torts revolve around the central idea that individuals should be able to lead, \"to some reasonable extent, a secluded and private life.\" The Supreme Court described this evolution of privacy tort law as part of a \"strong tide\" in the twentieth century toward the \"so-called right of privacy\" in the states. ", "Despite this \"strong tide,\" some scholars have argued that these torts, which were developed largely in the mid-twentieth century, are inadequate to face the privacy and data protection problems of today. Furthermore, some states do not accept all four of these torts or have narrowed and limited the applicability of the torts so as to reduce their effectiveness. As discussed in greater detail below, state common law provides some other remedies and protections relevant to data protection, via tort and contract law. However, while all of this state common law may have some influence on data protection, the impact of this judge-made doctrine is unlikely to be uniform, as courts' application of these laws will likely vary based on the particular facts of the cases in which they are applied and the precedents established in the various states. "], "subsections": []}, {"section_title": "Constitutional Protections and the Right to Privacy", "paragraphs": ["As reflected in the common law's limited remedies, at the time of the founding, concerns about privacy focused mainly on protecting private individuals from government intrusion rather than on protecting private individuals from intrusion by others. Accordingly, the Constitution's Bill of Rights protects individual privacy from government intrusion in a handful of ways and does little to protect from non-governmental actors. Some provisions protect privacy in a relatively narrow sphere, such as the Third Amendment's protection against the quartering of soldiers in private homes or the Fifth Amendment's protection against self-incrimination. The most general and direct protection of individual privacy is contained in the Fourth Amendment, which states that \"[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated . . .\" ", "For more than 100 years, the Fourth Amendment was generally read to prohibit only entry into private places rather than to provide general right to privacy. However, alongside the developments in the common law, constitutional law evolved over time to place a greater emphasis on protecting an individual's personal privacy. In particular, in 1967, the Supreme Court in Katz v. United States explained that the Fourth Amendment, while not creating a general \"right to privacy,\" nonetheless protected \"people, not places,\" and guarded individual privacy against certain types of governmental intrusion. This principle has continued to evolve over time, and has come to protect, to some extent, individuals' interest in their digital privacy. For example, in the 2018 case of Carpenter v. United States , the Supreme Court concluded that the Fourth Amendment's protection of privacy extended to protecting some information from government intrusion even where that information was shared with a third party. In Carpenter , the Court concluded that individuals maintain an expectation of privacy, protected by the Fourth Amendment, in the record of their movements as recorded by their cellular provider. Carpenter distinguished earlier cases which had relied upon the principle that information shared with third parties was generally not subject to Fourth Amendment scrutiny, concluding that \"an individual maintains a legitimate expectation of privacy in the record of his physical movements as captured through [his cellular phone].\" The Court's holding means that, in the future, the government must obtain a warrant supported by probable cause to obtain this information. The Fourth Amendment thus provides a limited bulwark against government intrusion into digital privacy.", "In addition to the protection provided by the Fourth Amendment, in the 1960s and 1970s, the Court concluded that the Fourteenth Amendment's guarantee of \"liberty\" implied the existence of a more general right of privacy, protecting individuals from government intrusion even outside the \"search and seizure\" context. In the 1977 case Whalen v. Roe , the Supreme Court explained that this constitutional right of privacy \"in fact involve[s] at least two different kinds of interests. One is the individual interest in avoiding disclosure of personal matters, and another is the interest in independence in making certain kinds of important decisions.\" The second of these interests relates primarily to individual rights concerning the \"intimacies of [persons'] physical relationship,\" as well as the right to abortion, and has little connection to data protection. However, the first of the interests listed in Whalen could potentially relate to data protection. This interest, the right to avoid certain disclosures, has come to be known as the right to \"informational privacy.\" ", "Despite its broad expression in Whalen , every Supreme Court case to consider the informational privacy right has rejected the constitutional claim and upheld the government program alleged to have infringed on the right. In Whalen itself, physicians and patients challenged a New York law that required the recording of the names and addresses of all persons who had obtained certain drugs for which there was both a lawful and unlawful market. Although the Court acknowledged that the statute \"threaten[ed] to impair . . . [the plaintiffs'] interest in the nondisclosure of private information,\" the Court observed that the disclosures were an \"essential part of modern medical practice\" and the New York law had protections in place against unwarranted disclosure that showed a \"proper concern\" for the protection of privacy. Together, the Court found these factors sufficient to uphold the law. In the wake of Whalen and Nixon v. Administrator of General Services \u2014a case decided the same year as Whalen that also considered the right to informational privacy\u2014courts have struggled to articulate the precise contours of the right. The most recent Supreme Court case to consider the right to informational privacy, NASA v. Nelson , went so far as to suggest that the right might not exist, \"assuming without deciding\" that the right existed in the course of rejecting the constitutional claim challenge to a government background check program for hiring. Despite the Supreme Court's lack of clarity about the right to informational privacy, \"most federal circuit courts\" recognize the right to various extents.", "All of the constitutional rights involving privacy, like the common law privacy torts, focus on public disclosure of private facts. This focus limits their potential influence on modern data privacy debates, which extends beyond the disclosure issue to more broadly concern how data is collected, protected, and used. Perhaps more importantly, whatever the reach of the constitutional right to privacy, the \"state action doctrine\" prevents it from being influential outside the realm of government action. Under this doctrine, only government action is subject to scrutiny under the Constitution, but purely private conduct is not proscribed, \"no matter how unfair that conduct may be.\" As a result, neither the common nor constitutional law provides a complete framework for considering many of the potential threats to digital privacy and consumer data. Rather, the most important data protection standards come from statutory law."], "subsections": []}]}, {"section_title": "Federal Data Protection Law", "paragraphs": ["Given the inherent limitations in common law and constitutional protections, Congress has enacted a number of federal laws designed to provide statutory protections of individuals' personal information. In contrast with the scheme prevalent in Europe and some other countries, rather than a single comprehensive law, the United States has a \"patchwork\" of federal laws that govern companies' data protection practices. ", "These laws vary considerably in their purpose and scope. Most impose data protection obligations on specific industry participants\u2014such as financial institutions, health care entities, and communications common carriers\u2014or specific types of data, such as children's data. Other laws, however, supplement the Constitution's limited privacy protections and apply similar principles to private entities. The Stored Communications Act (SCA), for instance, generally prohibits the unauthorized access or disclosure of certain electronic communications stored by internet service providers. Lastly, some laws prohibit broad categories of conduct that, while not confined to data protection, limit how companies may handle personal data. Most notably, the Federal Trade Commission Act (FTC Act) prohibits \"unfair or deceptive acts or practices.\" As some scholars have pointed out, the FTC has used its authority under the FTC Act to develop norms and principles that effectively fill in the gaps left by other privacy statutes.", "These laws are organized below, beginning with those most narrowly focused on discrete industries and moving toward more generally applicable laws. In light of its gap-filling function, this section lastly discusses the FTC Act\u2014along with the Consumer Financial Protection Act (CFPA), which covers similar types of conduct. The Appendix to this report contains a table summarizing the federal data protection laws discussed."], "subsections": [{"section_title": "Gramm-Leach-Bliley Act (GLBA)", "paragraphs": ["The Gramm-Leach-Bliley Act (GLBA) imposes several data protection obligations on financial institutions. These obligations are centered on a category of data called \"consumer\" \"nonpublic personal information\" (NPI), and generally relate to: (1) sharing NPI with third parties, (2) providing privacy notices to consumers, and (3) securing NPI from unauthorized access.", "First, unless an exception applies, GLBA and its implementing regulations prohibit financial institutions from sharing NPI with non-affiliated third parties unless they first provide the consumers with notice and an opportunity to \"opt-out.\" Furthermore, financial institutions are prohibited altogether from sharing account numbers or credit card numbers to third parties for use in direct marketing. Second, financial institutions must provide \"clear and conspicuous\" initial and annual notices to customers describing their privacy \"policies and practices.\" These notices must include, among other things, the categories of NPI collected and disclosed, the categories of third parties with which the financial institution shares NPI, and policies and practices with respect to protecting the confidentiality and security of NPI. Third, GLBA and its implementing regulations (often referred to as the \"Safeguards Rule\" ) require financial institutions to maintain \"administrative, technical, and physical safeguards\" to \"insure the security and confidentiality\" of \"customer\" (as opposed to \"consumer\") NPI, and to protect against \"any anticipated threats or hazards\" or \"unauthorized access\" to such information. Financial institutions regulated by federal banking agencies are further required to implement a program for responding to the unauthorized access of customer NPI. ", "The Consumer Financial Protection Bureau (CFPB), FTC, and federal banking agencies share civil enforcement authority for GLBA's privacy provisions. However, the CFPB has no enforcement authority over GLBA's data security provisions. Under the data security provisions, federal banking regulators have exclusive enforcement authority for depository institutions, and the FTC has exclusive enforcement authority for all non-depository institutions. GLBA does not specify any civil remedies for violations of the Act, but agencies can seek remedies based on the authorities provided in their enabling statutes, as discussed below. GLBA also imposes criminal liability on those who \"knowingly and intentionally\" obtain or disclose \"customer information\" through false or fraudulent statements or representations. Criminal liability can result in fines and up to five years' imprisonment. GLBA does not contain a private right of action that would allow affected individuals to sue violators. "], "subsections": []}, {"section_title": "Health Insurance Portability and Accountability Act (HIPAA)", "paragraphs": ["Under the Health Insurance Portability and Accountability Act (HIPAA), the Department of Health and Human Services (HHS) has enacted regulations protecting a category of medical information called \"protected health information\" (PHI). These regulations apply to health care providers, health plans, and health care clearinghouses (covered entities), as well as certain \"business associates\" of such entities. The HIPAA regulations generally speak to covered entities': (1) use or sharing of PHI, (2) disclosure of information to consumers, (3) safeguards for securing PHI, and (4) notification of consumers following a breach of PHI.", "First, with respect to sharing, HIPAA's privacy regulations generally prohibit covered entities from using PHI or sharing it with third parties without patient consent, unless such information is being used or shared for treatment, payment, or \"health care operations\" purposes, or unless another exception applies. Covered entities generally may not make treatment or services conditional on an individual providing consent. Second, with respect to consumer disclosures, covered entities must provide individuals with \"adequate notice of the uses and disclosures of [PHI] that may be made by the covered entity, and of the individual's rights and the covered entity's legal duties with respect to [PHI].\" These notices must be provided upon consumer request, and covered entities maintaining websites discussing their services or benefits must \"prominently post\" the notices on their websites. Furthermore, an individual has the right to request that a covered entity provide him with a copy of his PHI that is maintained by the covered entity. In some cases, an individual may also request that the covered entity provide information regarding specific disclosures of the individual's PHI, including the dates, recipients, and purposes of the disclosures. Third, with respect to data security, covered entities must maintain safeguards to prevent threats or hazards to the security of electronic PHI. Lastly, HIPAA regulations contain a data breach notification requirement, requiring covered entities to, among other things, notify the affected individuals within 60 calendar days after discovering a breach of \"unsecured\" PHI. ", "Violations of HIPAA's privacy requirements can result in criminal or civil enforcement. HHS possesses civil enforcement authority and may impose civil penalties, with the amount varying based on the level of culpability. The Department of Justice has criminal enforcement authority and may seek fines or imprisonment against a person who, in violation of HIPAA's privacy requirements, \"knowingly\" obtains or discloses \"individually identifiable health information\" or \"uses or causes to be used a unique health identifier.\" HIPAA does not, however, contain a private right of action that would allow aggrieved individuals to sue alleged violators. "], "subsections": []}, {"section_title": "Fair Credit Reporting Act (FCRA)", "paragraphs": ["The Fair Credit Reporting Act (FCRA) covers the collection and use of information bearing on a consumer's creditworthiness. FCRA and its implementing regulations govern the activities of three categories of entities: (1) credit reporting agencies (CRAs), (2) entities furnishing information to CRAs (furnishers), and (3) individuals who use credit reports issued by CRAs (users). In contrast to HIPAA or GLBA, there are no privacy provisions in FCRA requiring entities to provide notice to a consumer or to obtain his opt-in or opt-out consent before collecting or disclosing the consumer's data to third parties. FCRA further has no data security provisions requiring entities to maintain safeguards to protect consumer information from unauthorized access. Rather, FCRA's requirements generally focus on ensuring that the consumer information reported by CRAs and furnishers is accurate and that it is used only for certain permissible purposes.", "With respect to accuracy, CRAs must maintain reasonable procedures to ensure the accuracy of information used in \"consumer reports.\" CRAs must further exclude adverse information, such as \"accounts placed in collection\" or civil judgements, from consumer reports after a certain amount of time has elapsed. Furnishers must similarly establish reasonable policies and procedures to ensure the accuracy of the information reported to CRAs and may not furnish to a CRA any consumer information if they have reasonable cause to believe that information is inaccurate. Consumers also have the right to review the information CRAs have collected on them to ensure such information is accurate. CRAs must disclose information contained in a consumer's file upon the consumer's request, as well as the sources of the information and the identity of those who have recently procured consumer reports on the consumer. Should a consumer dispute the accuracy of any information in his file, CRAs and furnishers must reinvestigate the accuracy of the contested information. ", "In addition to the accuracy requirements, under FCRA consumer reports may be used only for certain permissible purposes such as credit transactions. Accordingly, a CRA may generally furnish consumer reports to a user only if it \"has a reason to believe\" the user intends to use it for a permissible purpose. Likewise, users may \"use or obtain a consumer report\" only for a permissible purpose. Along with the permissible purpose requirement, users must further notify consumers of any \"adverse action\" taken against the consumer based on the report. Adverse actions include refusing to grant credit on substantially the terms requested, reducing insurance coverage, and denying employment. ", "The FTC and the CFPB share civil enforcement authority over FCRA, with each agency possessing enforcement authority over entities subject to their respective jurisdictions. In addition to government enforcement, FCRA provides a private right of action for consumers injured by willful or negligent violations of the Act. Consumers bringing such actions for negligent violations of the Act may recover actual damages, attorney's fees, and other litigation costs. For willful violations, consumers may recover either actual damages or statutory damages ranging from $100 to $1,000, attorney's fees, other litigation costs, and \"such amount of punitive damages as the court may allow.\" FCRA also imposes criminal liability on any individual who knowingly and willfully obtains consumer information from a CRA under false pretenses and on any officer or employee of a CRA who knowingly and willfully provides consumer information to a person not authorized to receive that information. "], "subsections": []}, {"section_title": "The Communications Act", "paragraphs": ["The Communications Act of 1934 (Communications Act or Act), as amended, established the Federal Communications Commission (FCC) and provides a \"comprehensive scheme\" for the regulation of interstate communication. Most relevant to this report, the Communications Act includes data protection provisions applicable to common carriers, cable operators, and satellite carriers."], "subsections": [{"section_title": "Common Carriers", "paragraphs": ["The Telecommunications Act of 1996 amended the Communications Act to impose data privacy and data security requirements on entities acting as common carriers. Generally, common carrier activities include telephone and telegraph services but exclude radio broadcasting, television broadcasting, provision of cable television, and provision of broadband internet. The privacy and security requirements imposed on entities acting as common carriers are primarily centered on a category of information referred to as \"customer proprietary network information (CPNI).\" CPNI is defined as information relating to the \"quantity, technical configuration, type, destination, location, and amount of use of a telecommunications service subscribed to by any customer of a telecommunications carrier,\" and is \"made available to the carrier by the customer solely by virtue of the carrier-customer relationship.\" ", "Section 222(c) of the Communications Act and the FCC's implementing regulations set forth carriers' obligations regarding CPNI. These provisions cover three main issues. First, carriers must comply with certain use and disclosure rules. Section 222(c) imposes a general rule that carriers may not \"use, disclose, or permit access to\" \"individually identifiable\" CPNI without customer approval, unless a particular exception applies. Before a carrier may solicit a customer for approval to use or disclose their CPNI, it must notify customers of their legal rights regarding CPNI and provide information regarding the carrier's use and disclosure of CPNI. Second, carriers must implement certain safeguards to ensure the proper use and disclosure of CPNI. These safeguards must include, among other things, a system by which the \"status of a customer's CPNI approval can be clearly established\" prior to its use, employee training on the authorized use of CPNI, and \"reasonable measures\" to discover and protect against attempts to gain unauthorized access to CPNI.\" Lastly, carriers must comply with data breach requirements. Following a \"breach\" of customers' CPNI, a carrier must disclose such a breach to law enforcement authorities no later than seven days following a \"reasonable determination of the breach.\" After it has \"completed the process of notifying law enforcement,\" it must notify customers whose CPNI has been breached.", "In addition to the CPNI requirements, the Communications Act contains three other potentially relevant data privacy and security provisions pertaining to common carriers. First, Section 222(a) of the Act states that carriers must \"protect the confidentiality of proprietary information\" of \"customers.\" Second, Section 201(b) of the Act declares unlawful \"any charge, practice, classification, and regulation\" in connection with a carrier's communication service that is \"unjust or unreasonable.\" Lastly, Section 202(a) provides that it shall \"be unlawful for any common carrier to make any unjust or unreasonable discrimination in charges, practices, classification, regulations, facilities, or services . . . .\" ", "In a 2016 rule, which was subsequently overturned pursuant to the Congressional Review Act, the FCC attempted to rely on these three provisions to regulate a broad category of data called \"customer proprietary information\" (customer PI). While customer PI is not defined in the statute, the FCC's 2016 rule defined it broadly to include CPNI, as well as other \"personally identifiable information\" and the \"content of communications.\" The FCC reasoned that Section 222(a) imposes a general duty, independent from Section 222(c), on carriers to protect the confidentiality of customer PI. It further maintained that Sections 201(b) and 202(a) provide independent \"backstop authority\" to ensure that no gaps are formed in commercial data privacy and security practices, similar to the FTC's authority under the FTC Act. However, given that Congress overturned the 2016 rule, the FCC may be prohibited under the CRA from relying on these three provisions to regulate data privacy and security. Under the CRA, the FCC may not reissue the rule in \"substantially the same form\" or issue a \"new rule that is substantially the same\" as the overturned rule \"unless the reissued or new rule is specifically authorized by a law enacted after the date of the joint resolution disapproving the original rule.\" ", "The FCC is empowered to enforce civil violations of the Communications Act's provisions, including its common carrier provisions. The FCC may impose a \"forfeiture penalty\" against any person who \"willfully or repeatedly\" violates the Act or the FCC's implementing regulations. The Communications Act further imposes criminal penalties on those who \"willfully and knowingly\" violate the statute or the FCC's implementing regulations. Along with its general civil and criminal provisions, the Communications Act provides a private right of action for those aggrieved by violations of its common carrier provisions; in such actions, plaintiffs may seek actual damages and reasonable attorney's fees."], "subsections": []}, {"section_title": "Cable Operators and Satellite Carriers", "paragraphs": ["In addition to common carriers, the Communications Act imposes a number of data privacy and security requirements on how \"cable operators\" and \"satellite carriers\" (i.e., covered entities) treat their subscribers' \"personally identifiable information\" (PII). These requirements relate to: (1) data collection and disclosure; (2) subscribers' access to, and correction of, their data; (3) data destruction; (4) privacy policy notification; and (5) data security. ", "First, covered entities must obtain the \"prior written or electronic consent\" of a subscriber before collecting the subscriber's PII or disclosing it to third parties. There are several exceptions to this consent requirement. Among other things, covered entities may collect a subscriber's PII in order to obtain information necessary to render service to the subscriber, and they may disclose a subscriber's PII if the disclosure is necessary to \"render or conduct a legitimate business activity\" related to the service they provide. Second, covered entities must provide subscribers, at \"reasonable times and a convenient place,\" with access to all of their PII \"collected and maintained,\" and they must further provide subscribers a reasonable opportunity to correct any error in such information. Third, covered entities are obligated to destroy PII if it is \"no longer necessary for the purpose for which it is was collected\" and there are \"no pending requests or orders for access to such information.\" Fourth, covered entities must provide subscribers with a privacy policy notice at the \"time of entering into an agreement\" for services and \"at least once a year thereafter.\" These notices must describe, among other things: (1) the nature of the subscriber's PII that has been, or will be, collected, (2) the nature, frequency, and purpose of any disclosure of such information and the types of persons to whom the disclosure is made, and (3)\u00a0the times and place at which the subscriber may have access to such information. Lastly, the Communications Act imposes a general data security requirement on covered entities; they must \"take such actions as are necessary to prevent unauthorized access to [PII] by a person other than the subscriber\" or the covered entity.", "The Communications Act provides a private right of action for \"[a]ny person aggrieved by any act\" of a covered entity in violation of these requirements. In such actions, a court may award actual damages, punitive damages, and reasonable attorneys' fees and other litigation costs. Additionally, covered entities violating these provisions may be subject to FCC civil enforcement and criminal penalties that, as previously noted, are generally applicable to violations of the Communications Act."], "subsections": []}]}, {"section_title": "Video Privacy Protection Act", "paragraphs": ["The Video Privacy Protection Act (VPPA) was enacted in 1988 in order to \"preserve personal privacy with respect to the rental, purchase, or delivery of video tapes or similar audio visual materials.\" The VPPA does not have any data security provisions requiring entities to maintain safeguards to protect consumer information from unauthorized access. However, it does have privacy provisions restricting when covered entities can share certain consumer information. Specifically, the VPPA prohibits \"video tape service providers\" \u2014a term that includes both digital video streaming services and brick-and-mortar video rental stores \u2014from knowingly disclosing PII concerning any \"consumer\" without that consumer's opt-in consent. The VPPA provides several exceptions to this general rule. In particular, video tape service providers may disclose PII to \"any person if the disclosure is incident to the ordinary course of business.\" Providers may also disclose PII if the disclosure solely includes a consumer's name and address and does not identify the \"title, description, or subject matter of any video tapes or other audio visual material,\" and the consumer has been provided with an opportunity to opt out of such disclosure. The VPPA does not empower any federal agency to enforce violations of the Act and there are no criminal penalties for violations, but it does provide for a private right of action for persons aggrieved by the Act. In such actions, courts may award actual damages, punitive damages, preliminary and equitable relief, and reasonable attorneys' fees and other litigation costs. "], "subsections": []}, {"section_title": "Family Educational Rights and Privacy Act (FERPA)", "paragraphs": ["The Family Educational Rights and Privacy Act of 1974 (FERPA) creates privacy protections for student education records. \"Education records\" are defined broadly to generally include any \"materials which contain information directly related to a student\" and are \"maintained by an educational agency or institution.\" FERPA defines an \"educational agency or institution\" to include \"any public or private agency or institution which is the recipient of funds under any applicable program.\" FERPA generally requires that any \"educational agency or institution\" (i.e., covered entities) give parents or, depending on their age, the student (1) control over the disclosure of the student's educational records, (2) an opportunity to review those records, and (3) an opportunity to challenge them as inaccurate. ", "First, with respect to disclosure, covered entities must not have a \"policy or practice\" of permitting the release of education records or \"personally identifiable information contained therein\" without the consent of the parent or the adult student. This consent requirement is subject to certain exceptions. Among other things, covered entities may disclose educational records to (1) certain \"authorized representatives,\" (2) school officials with a \"legitimate educational interest,\" or (3) \"organizations conducting studies\" for covered entities \"for the purpose of developing, validating, or administering predictive tests, administering student aid programs, and improving instructions.\" Covered entities may also disclose the information without consent if it constitutes \"directory information\" and the entity has given notice and a \"reasonable period of time\" to opt out of the disclosure. Second, in addition to the disclosure obligations, covered entities must not have a \"policy of denying\" or \"effectively prevent[ing]\" parents or an adult student from inspecting and reviewing the underlying educational records. Covered entities must further \"establish appropriate procedures\" to grant parents' review requests \"within a reasonable period of time, but in no case more than forty-five days after the request has been made.\" Lastly, covered entities must provide an \"opportunity for a hearing\" to challenge the contents of the student's education records as \"inaccurate, misleading, or otherwise in violation of the privacy rights of students.\" Covered entities must further \"provide an opportunity for the correction or deletion of any such inaccurate, misleading or otherwise inappropriate data contained therein and to insert into such records a written explanation of the parents respecting the content of such records.\" ", "Parents or adult students who believe that their rights under FERPA have been violated may file a complaint with the Department of Education. FERPA authorizes the Secretary of Education to \"take appropriate actions,\" which may include withholding federal education funds, issuing a \"cease and desist order,\" or terminating eligibility to receive any federal education funding. FERPA does not, however, contain any criminal provisions or a private right of action."], "subsections": []}, {"section_title": "Federal Securities Laws", "paragraphs": ["While federal securities statutes and regulations do not explicitly address data protection, two requirements under these laws have implications for how companies prevent and respond to data breaches.", "First, federal securities laws may require companies to adopt controls designed to protect against data breaches. Under Section 13(b)(2)(B) of the Securities and Exchange Act of 1934 (Exchange Act), public companies and certain other companies are required to \"devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances\" that \"transactions are executed in accordance with management's general or specific authorization,\" and that \"access to assets is permitted only in accordance with management's general or specific authorization.\" In a recent report, the Securities and Exchange Commission (SEC) suggested that, in order to comply with this requirement, companies should consider \"cyber-related threats\" when formulating accounting controls. The report discussed the SEC's investigation of companies that wrongly transferred millions of dollars in response to fraudulent emails, generally noting that \"companies should pay particular attention to the obligations imposed by Section 13(b)(2)(B)\" in light of the \"risks associated with today's ever expanding digital interconnectedness.\" ", "Second, federal securities laws may require companies to discuss data breaches when making required disclosures under securities laws. The Exchange Act, Securities Act of 1933 (Securities Act), and their implementing regulations require certain companies to file a number of disclosures with the SEC. Specifically, the Securities Act requires companies issuing securities in a public offering to file detailed statements registering the offering (registration statements), and the Exchange Act requires public companies to file periodic reports on an annual, quarterly, and ongoing basis. These filings must contain certain categories of information, such as a description of the most significant factors that make investing in the company speculative or risky (known as \"risk factors\") and a description of any \"events, trends, or uncertainties that are reasonably likely to have a material effect on its results of operations, liquidity, or financial condition . . . .\" Further, when making these filings, or any other statements in connection with the purchase or sale of a security, companies are required to include any \"material\" information necessary to make the statements made therein \"not misleading.\" In interpretive guidance issued in February 2018, the SEC indicated that, pursuant to these obligations, companies may be required to disclose in their filings cyber incidents such as data breaches. ", "The SEC can enforce violations of the Securities Act and the Exchange Act, including the accounting controls requirement and the disclosure requirements, through civil actions filed in court or administrative \"cease and desist\" proceedings. The SEC may seek civil penalties, disgorgement, and injunctive relief (in civil actions) or a cease and desist order (in administrative proceedings). Furthermore, under both the Exchange Act and the Securities Act, individuals aggrieved by a company's misrepresentation or omission of a material fact in connection with the purchase or sale of a security may sue the company for actual damages incurred by the individual. There is not, however, a private right of action for violations of the Exchange Act's accounting controls requirement. Lastly, in addition to civil enforcement, both the Securities Act and the Exchange Act impose criminal liability; any person who \"willfully\" violates the acts or their implementing regulations may be subject to fines and imprisonment. "], "subsections": []}, {"section_title": "Children's Online Privacy Protection Act (COPPA)", "paragraphs": ["The Children's Online Privacy Protection Act (COPPA) and the FTC's implementing regulations regulate the online collection and use of children's information. Specifically, COPPA's requirements apply to: (1) any \"operator\" of a website or online service that is \"directed to children,\" or (2) any operator that has any \"actual knowledge that it is collecting personal information from a child\" (i.e., covered operators). Covered operators must comply with various requirements regarding data collection and use, privacy policy notifications, and data security.", "First, COPPA and the FTC's implementing regulations prohibit covered operators from collecting or using \"personal information\" from children under the age of thirteen without first obtaining parental consent. Such consent must be \"verifiable\" and must occur before the information is collected. Second, covered operators must provide parents with direct notice of their privacy policies, describing their data collection and sharing policies. Covered operators must further post a \"prominent and clearly labeled link\" to an online notice of its privacy policies at the home page of its website and at each area of the website in which it collects personal information from children. Lastly, covered operators that have collected information from children must establish and maintain \"reasonable procedures\" to protect the \"confidentiality, security, and integrity\" of the information, including ensuring that the information is provided only to third parties that will similarly protect the information. They must also comply with certain data retention and deletion requirements. Under COPPA's safe harbor provisions, covered operators will be deemed to have satisfied these requirements if they follow self-regulatory guidelines the FTC has approved.", "COPPA provides that violations of the FTC's implementing regulations will be treated as \"a violation of a rule defining an unfair or deceptive act or practice\" under the FTC Act. Under the FTC Act, as discussed in more detail below, the FTC has authority to enforce violations of such rules by seeking penalties or equitable relief. COPPA also authorizes state attorneys general to enforce violations affecting residents of their states. COPPA does not contain any criminal penalties or any provision expressly providing a private right of action."], "subsections": []}, {"section_title": "Electronic Communications Privacy Act (ECPA)", "paragraphs": ["The Electronic Communications Privacy Act (ECPA) was enacted in 1986, and is composed of three acts: the Wiretap Act, the Stored Communications Act (SCA), and the Pen Register Act. Much of ECPA is directed at law enforcement, providing \"Fourth Amendment like privacy protections\" to electronic communications. However, ECPA's three acts also contain privacy obligations relevant to non-governmental actors. ECPA is perhaps the most comprehensive federal law on electronic privacy, as it is not sector-specific, and many of its provisions apply to a wide range of private and public actors. Nevertheless, its impact on online privacy practices has been limited. As some commentators have observed, ECPA \"was designed to regulate wiretapping and electronic snooping rather than commercial data gathering,\" and litigants attempting to apply ECPA to online data collection have generally been unsuccessful.", "The Wiretap Act applies to the interception of a communication in transit. A person violates the Act if, among other acts, he \"intentionally intercepts . . . any wire, oral, or electronic communication.\" The Wiretap Act defines an \"electronic communication\" broadly, and courts have held that the term includes information conveyed over the internet. Several thresholds must be met for an act to qualify as an unlawful \"interception.\" Of particular relevance are three threshold issues. First, the communication must be acquired contemporaneously with the transmission of the communication. Consequently, there is no \"interception\" where the communication in question is in storage. Furthermore, the acquired information must relate to the \"contents\" of the communication, defined as information concerning the \"substance, purport, or meaning of that communication.\" As a result, while the Act applies to information like the header or body of an email, the Act does not apply to non-substantive information automatically generated about the characteristics of the communication, such as IP addresses. Third, individuals do not violate the Wiretap Act if they are a \"party to the communication\" or received \"prior consent\" from one of the parties to the communication. The party-to-the-communication and consent exceptions have been subject to significant litigation; in particular, courts have often relied on the exceptions to dismiss suits alleging Wiretap Act violations due to online tracking, holding that websites or third-party advertisers who tracked users' online activity were either parties to the communication or received consent from a party to the communication.", "The SCA prohibits the improper access or disclosure of certain electronic communications in storage. With respect to improper access, a person violates the SCA if he obtains an \"electronic communication\" in \"electronic storage\" from \"a facility through which an electronic communication service is provided\" by either: (1) \"intentionally access[ing] [the facility] without authorization\" or (2)\u00a0\"intentionally exceed[ing] an authorization.\" Although the statute does not define the term \"facility,\" most courts have held that the term is limited to a location where network service providers store communications. However, courts have differed over whether a personal computer is a \"facility.\" Most courts have excluded personal computers from the reach of the SCA, but some have disagreed. ", "With respect to improper disclosure, the SCA generally prohibits entities providing \"electronic communication services\" or \"remote computing services\" from knowingly divulging the contents of a communication while holding the communication in electronic storage. Similar to the Wiretap Act, the SCA's access and disclosure prohibitions are subject to certain exceptions. In particular, individuals do not violate the SCA if they are the sender or intended recipient of the communication or when a party to the communication consents to the access or disclosure. As with the Wiretap Act, courts have relied on these two exceptions to dismiss suits under the SCA related to online tracking.", "The Pen Register Act prohibits the installation of a \"pen register\" or \"trap and trace device\" without a court order. A pen register is a \"device or process\" that \"records or decodes\" outgoing \"dialing, routing, addressing, or signaling information,\" and a trap and trace device is a \"device or process\" that \"captures the incoming . . . dialing, routing, addressing, and signaling information.\" In contrast to the Wiretap Act, the Pen Register Act applies to the capture of non-content information, as the definitions of pen registers and trap and trace devices both exclude any device or process that captures the \"contents of any communication.\" Furthermore, the Pen Register Act prohibits only the use of a pen register or trap and trace device and does not separately prohibit the disclosure of non-content information obtained through such use. The statute does, however, have several exceptions similar to those contained in the Wiretap Act and SCA. Among other things, providers of an electronic or wire communication service will not violate the Act when they use a pen register or trap and trace device in order to \"protect their rights or property\" or \"where the consent of the user of that service has been obtained.\"", "The Wiretap Act and the SCA both provide for private rights of action. Persons aggrieved by violations of either act may bring a civil action for damages, equitable relief, and reasonable attorney's fees. For actions under the Wiretap Act, damages are the greater of: (1) actual damages suffered by the plaintiff, or (2) \"statutory damages of whichever is the greater of $100 a day for each day of violation or $10,000.\" For actions under the SCA, damages are \"the sum of the actual damages suffered by the plaintiff and the profits made by the violator,\" provided that all successful plaintiffs are entitled to receive at least $1,000. Violations of the Wiretap Act and SCA are also subject to criminal prosecution and can result in fines and imprisonment. In contrast, the Pen Register Act does not provide for a private right of action, but knowing violations can result in criminal fines and imprisonment. "], "subsections": []}, {"section_title": "Computer Fraud and Abuse Act (CFAA)", "paragraphs": ["The Computer Fraud and Abuse Act (CFAA) was originally intended as a computer hacking statute and is centrally concerned with prohibiting unauthorized intrusions into computers, rather than addressing other data protection issues such as the collection or use of data. Specifically, the CFAA imposes liability when a person \"intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains . . . information from any protected computer.\" A \"protected computer\" is broadly defined as any computer used in or affecting interstate commerce or communications, functionally allowing the statute to apply to any computer that is connected to the internet.", "Violations of the CFAA are subject to criminal prosecution and can result in fines and imprisonment. The CFAA also allows for a private right of action, allowing aggrieved individuals to seek actual damages and equitable relief, such as an injunction against the defendant. As with ECPA, internet users have attempted to use this private right of action to sue companies tracking their online activity, arguing that companies' use of tracking devices constitutes an unauthorized access of their computers. In this vein, CFAA is theoretically a more generous statute than ECPA for such claims because it requires authorization from the owner of the computer (i.e., the user), rather than allowing any party to a communication (i.e., either the user or the website visited by the user) to give consent to the access. In practice, however, such claims have typically been dismissed due to plaintiffs' failure to meet CFAA's damages threshold. Specifically, as a threshold to bring a private right of action, a plaintiff must show damages in excess of $5,000 or another specific type of damages such as physical injury or impairment to medical care."], "subsections": []}, {"section_title": "Federal Trade Commission Act (FTC Act)", "paragraphs": ["The FTC Act has emerged as a critical law relevant to data privacy and security. As some commentators have noted, the FTC has used its authority under the Act to become the \"go-to agency for privacy,\" effectively filling in gaps left by the aforementioned federal statutes. While the FTC Act was originally enacted in 1914 to strengthen competition law, the 1938 Wheeler-Lea amendment revised Section 5 of the Act to prohibit a broad range of unscrupulous or misleading practices harmful to consumers. The Act gives the FTC jurisdiction over most individuals and entities, although there are several exemptions. For instance, the FTC Act exempts common carriers, nonprofits, and financial institutions such as banks, savings and loan institutions, and federal credit unions.", "The key provision of the FTC Act, Section 5, declares unlawful \"unfair or deceptive acts or practices\" (UDAP) \"in or affecting commerce.\" The statute provides that an act or practice is \"unfair\" only if it \"causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition.\" While the statute does not define \"deceptive,\" the FTC has clarified in guidance that an act or practice is to be considered deceptive if it involves a material \"representation, omission, or practice that is likely to mislead [a] consumer\" who is \"acting reasonably in the circumstances.\" Under the FTC Act, the agency may enact rules defining specific acts or practices as UDAPs, often referred to as \"trade regulation rules\" (TRRs) or \"Magnuson-Moss\" rulemaking. However, to enact TRRs the FTC must comply with several procedures that are not required under the notice-and-comment rulemaking procedures set forth in Section 553 of the Administrative Procedure Act (APA), which are the default rulemaking procedures for federal agencies. Among other things, these additional procedures require the FTC to publish an advance notice of proposed rulemaking (ANPRM), give interested persons an opportunity for an informal hearing, and issue a statement accompanying the rule regarding the \"prevalence of the acts or practices treated by the rule.\" Consequently, the FTC rarely uses its TRR rulemaking authority and has not enacted any TRRs regarding data protection. Rather, as discussed further below, the agency largely uses enforcement actions to signal the types of acts and practices it considers to be impermissible UDAPs.", "The FTC has brought hundreds of enforcement actions against companies alleging deceptive or unfair data protection practices. Most of these actions result in companies entering into consent decrees requiring the companies to take certain measures to prevent any further violations. While these consent decrees are not legally binding on those who are not a party to them, they are significant because they reflect the type of practices that the FTC views as \"unfair\" or \"deceptive.\" Indeed, some scholars view the principles arising from them as a type of \"common law of privacy.\" Given the uniquely important role FTC enforcement plays in the U.S. data protection landscape, it is worth noting the types of data protection practices the FTC has viewed as \"unfair\" or \"deceptive.\" ", "Perhaps the most settled principle of the FTC's \"common law of privacy\" is that companies are bound by their data privacy and data security promises. The FTC has taken the position that companies act deceptively when they gather, use, or disclose personal information in a way that contradicts their posted privacy policy or other statements, or when they fail to adequately protect personal information from unauthorized access despite promises that that they would do so. In addition to broken promises, the FTC has alleged that companies act deceptively when they make false representations in order to induce disclosure of personal information. For example, in FTC v. Sun Spectrum Commc'ns Org., Inc. , the FTC alleged that several telemarketers acted \"deceptively\" by misrepresenting themselves as a credit card company and requesting personal information from individuals, ostensibly for the purpose of providing non-existent credit cards to the individuals. The FTC has further maintained that companies act deceptively when their privacy policies or other statements provide insufficient notice of their privacy practices. For instance, in In the Matter of Sears Holdings Management Co. , the FTC alleged that Sears acted deceptively by failing to disclose the extent to which downloadable software would monitor users' internet activity, merely telling users that it would track their \"online browsing.\"", "Along with \"deceptive claims,\" the FTC has also alleged that certain data privacy or data security practices may be \"unfair.\" Specifically, the FTC has maintained that it is unfair for a company to retroactively apply a materially revised privacy policy to personal data that it collected under a previous policy. The FTC has also taken the position that certain default privacy settings are unfair. In the case FTC v. Frostwire , for example, the FTC alleged that a peer-to-peer file sharing application had unfair privacy settings because, immediately upon installation, the application would share the personal files stored on users' devices unless the users went through a burdensome process of unchecking many pre-checked boxes. With respect to data security, the FTC has more recently maintained that a company's failure to safeguard personal data may be \"unfair,\" even if the company did not contradict its privacy policy or other statements. While at least one court has agreed that such conduct may be \"unfair\" under the FTC Act, a recent U.S. Court of Appeals for the Eleventh Circuit case, LabMD v. FTC , suggests that any FTC cease and desist order based on a company's \"unfair\" data security measures must allege specific data failures and specific remedies. In LabMD , the court noted that the FTC's order \"contain[ed] no prohibitions\" but \"command[ed] [the company] to overhaul and replace its data-security program to meet an indeterminable standard of reasonableness.\" The court concluded that such an order was unenforceable, reasoning that the order \"effectually charge[d] the district court [enforcing the order] with managing the overhaul.\" The court further suggested that penalizing a company for failing to comply with an imprecise standard \"may constitute a denial of due process\" because it would not give the company fair notice of the prohibited conduct. Ultimately, while LabMD did not decide whether inadequate data security measures may be \"unfair\" under the FTC Act, the decision is nevertheless a potentially significant limitation on the FTC's ability to remedy such violations of the statute. ", "LabMD is also a notable case because it adds to the relatively sparse case law on the FTC Act's \"unfair or deceptive\" prohibition. As mentioned, the large majority of the FTC enforcement actions are settled, with parties entering into consent decrees. To the extent FTC allegations are contested, the FTC may either commence administrative enforcement proceedings or civil litigation against alleged violators. In an administrative enforcement proceeding, an Administrative Law Judge (ALJ) hears the FTC's complaint and may issue a cease and desist order prohibiting the respondent from engaging in wrongful conduct. In civil litigation, the FTC may seek equitable relief, such as injunctions or disgorgement, when a party \"is violating, or is about to violate,\" the FTC Act. The FTC may only seek civil penalties, however, if the party has violated a cease and desist order, consent decree, or a TRR. The FTC Act does not provide a private right of action, and it does not impose any criminal penalties for violations of Section 5. "], "subsections": []}, {"section_title": "Consumer Financial Protection Act (CFPA)", "paragraphs": ["Similar to the FTC Act, the CFPA prohibits covered entities from engaging in certain unfair, deceptive, or abusive acts. Enacted in 2010 as Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPA created the Consumer Financial Protection Bureau (CFPB) as an independent agency within the Federal Reserve System. The Act gives the CFPB certain \"organic\" authorities, including the authority to take any action to prevent any \"covered person\" from \"committing or engaging in an unfair, deceptive, or abusive act or practice\" (UDAAP) in connection with offering or providing a \"consumer financial product or service.\" ", "The CFPB's UDAAP authority under the CFPA is very similar to the FTC's UDAP authority under the FTC Act; indeed, the CFPA contains the same definition of \"unfair\" as in the FTC Act, and the CFPB has adopted the FTC's definition of \"deceptive\" acts or practices. However, there are several important differences. First, the CFPA's UDAAP prohibition includes \"abusive\" practices, as well as unfair or deceptive ones. An act or practice is abusive if it either (1) \"materially interferes with the ability of a consumer to understand a term or condition of a consumer financial product or service\" or (2) \"takes unreasonable advantage of\" a consumer's (a)\u00a0lack of understanding, (b) inability to protect her own interest in selecting or using a consumer financial product or service, or (c) reasonable reliance on a covered person to act in her interest. While abusive conduct may also be unfair or deceptive, abusiveness is a separate standard that may cover additional conduct. Second, the CFPA prohibits UDAAPs only in connection with offering or providing a \"consumer financial product or service.\" A product or service meets this standard if it is one of the specific financial product or services listed in the CFPA and is offered or provided to consumers primarily for personal, family, or household purposes. Lastly, the CFPA applies only to \"covered persons\" or \"service providers.\" The statute defines \"covered persons\" as persons who offer or provide a consumer financial product or service, and it defines \"service providers\" as those who provide a \"material service\" to a \"covered person\" in connection with offering or providing a consumer financial product or service. ", "As some commentators have noted, the CFPB could follow in the FTC's footsteps and use its UDAAP authority to regulate data protection. However, the CFPB has generally been inactive in the data privacy and security space. Indeed, to date, it has brought only one such enforcement action, which involved allegations that an online payment platform, Dwolla, Inc., made deceptive statements regarding its data security practices and the safety of its online payments system. To the extent it does use its authority, the CFPB has some powerful procedural advantages in comparison with the FTC. In particular, the CFPB can enact rules identifying and prohibiting particular UDAAP violations through the standard APA rulemaking process, whereas the FTC must follow the more burdensome Magnuson-Moss rulemaking procedures. Regarding enforcement, the CFPA authorizes the CFPB to bring civil or administrative enforcement actions against entities engaging in UDAAPs. Unlike the FTC, the CFPB can seek civil penalties in all such enforcement actions, as well as equitable relief such as disgorgement or injunctions. However, as with the FTC Act, the CFPA does not provide a private right of action that would allow adversely affected individuals to sue companies violating the Act. The statute also does not impose any criminal penalties for UDAAP violations. "], "subsections": []}]}, {"section_title": "State Data Protection Law", "paragraphs": ["Adding to the complex federal patchwork of data protection statutes are the laws of the fifty states. First and foremost, major regulators of privacy and data protection in the states include the courts, via tort and contract law. With respect to tort law, in addition to the \"privacy\" causes of action that developed at the state level during the early 20th century (discussed above), negligence and other state tort law claims serve as a means to regulate businesses that are injured from data security issues or otherwise fail to protect their customers from foreseeable harm. Contracts, implied contracts, and other commercial causes of action can also form important bulwarks for privacy. The common law, however, is not perfect: it is subject to variability from state to state, and within states, from judge to judge and jury to jury.", "In addition to the common law, most states have their own statutory framework which may affect data protection and the use of data by private entities. For example, many states have a consumer protection law, sometimes prohibiting unfair or deceptive practices, often referred to as \"little FTC Acts.\" These laws, like the FTC Act, are increasingly being used to address privacy matters. In addition, each state has passed a data breach response law, requiring some form of response or imposing liability on companies in the event of a breach of their data security. ", "While an examination of every state data security law is beyond the scope of this report, at least one state has undertaken a general and ambitious effort to regulate data security. Specifically, the California Consumer Privacy Act (CCPA), enacted in 2018, has captured significant attention. "], "subsections": [{"section_title": "The California Consumer Privacy Act (CCPA)", "paragraphs": [], "subsections": [{"section_title": "The CCPA's Scope", "paragraphs": ["Unlike the federal patchwork provisions, neither the method of data collection nor the industry that the business operates in limits the potential application of the CCPA. Instead, the CCPA applies to any company that collects the personal information of Californians, is for-profit, does business in California, and satisfies a basic set of thresholds. Analysts have suggested that these thresholds are low enough that the law could reach a considerable number of even \"relatively small\" businesses with websites accessible in California.", "The CCPA also does not distinguish between the sources of the data that comes within its scope. Rather, the CCPA regulates all \"personal information,\" which, by the CCPA's definition, covers nearly any information a business would collect from a consumer. The law does not require the presence of any individual identifier, such as a name or address, for data to fall within the meaning of personal information. Rather, the CCPA broadly defines personal information as \"information that identifies, relates to, describes, or is capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household.\" Following this definition, the CCPA provides some telling illustrations of what constitutes personal information, including any \"electronic network activity [such as] browsing history, search history, and information regarding a consumer's interaction with an Internet Web site, application, or advertisement\" and \"inferences drawn from any of\" this information. "], "subsections": []}, {"section_title": "The CCPA's Provisions and Requirements", "paragraphs": ["The CCPA provides consumers with three main \"rights.\" The first of these is a \" right to know \" the information that businesses have collected or sold about them. This right requires that businesses must, in advance of any collection, \"inform [by mail or electronically] consumers as to the categories of personal information to be collected and the purposes\" to which the information will be put. Second, the CCPA provides consumers with the \" right to opt out \" of the sale of a consumer's information. Under the new law, businesses must inform consumers of this right, and if a consumer so affirmatively opts out, the business cannot again sell the consumer's information unless the consumer subsequently provides the business express authorization. Finally, the CCPA gives consumers the right, in certain circumstances, to request that a business delete any information collected about the consumer (i.e., \" right to delete \"). Under the law, a business that receives such a request must delete the information collected and direct its \"service providers\" to do the same."], "subsections": []}, {"section_title": "Remedies, Liabilities, and Fines", "paragraphs": ["The primary means to enforce the CCPA are actions brought by the California Attorney General. According to the statute, businesses that fail to provide the protections required by the CCPA and fail to cure those violations within 30 days are liable for civil penalties of up to $7,500 per violation. Penalties or settlements collected under the CCPA are to be deposited with the newly created Consumer Privacy Fund, the funds for which are used only to offset costs incurred in connection with the administration of the CCPA. While the CCPA provides for a private cause of action, allowing for individual and class action lawsuits against businesses, this cause of action is only available in the case of a consumer whose \"nonencrypted or nonredacted personal information\" is subject to \"unauthorized access and exfiltration, theft, or disclosure\" as a result of a failure to \"implement and maintain reasonable security procedures.\" Further, such actions can be brought only if a consumer provides a business with 30 days' written notice and provides the business with opportunity to cure the violation, unless the consumer suffered actual pecuniary damages. The statute does not specify how a business could \"cure\" a violation of this type. Consumers may obtain damages under this section of no less than $100 and no more than $750 \"per incident,\" or actual damages, whichever is greater, as well as injunctive relief. "], "subsections": []}]}, {"section_title": "The CCPA and the 116th Congress", "paragraphs": ["Statements by some Members of Congress during Congressional hearings have already noted the CCPA's likely importance to future federal legislative efforts. Further, some outside commentators have argued explicitly that the CCPA should be preempted by a future federal law. These statements may be motivated by the likely fact that, if left intact, the California law could shape industry and consumer concerns both inside and outside California. First, the law is likely to be the \"first in a long line of similar pieces of legislation,\" all of which may model themselves after the CCPA, or will have to respond to its impact. Second, even though the statute is the product of a single state, its broad jurisdictional reach would bring companies throughout the United States and from around the world into its sweep. These factors combined are likely to make the CCPA important to federal legislators. Furthermore, some of the provisions of the California law could form a model for future federal regulation\u2014although along those lines, another potential model it has to compete with is Europe's GDPR. "], "subsections": []}]}, {"section_title": "The EU's General Data Protection Regulation (GDPR)", "paragraphs": ["In addition to U.S. states like California, some foreign nations have enacted comprehensive data protection legislation. The EU, in particular, has long applied a more wide-ranging data protection regulatory scheme. Whereas privacy principles in the U.S. Constitution focus on government intrusions into private life and U.S. data privacy statutes generally are sector-specific, European privacy regulations have generally concerned any entity's accumulation of large amounts of data. As a result, foundational EU treaties provide individuals with a general right to \"protection of personal data\" from all potential interferences. The objective of the EU's most recent data privacy legislation\u2014the GDPR\u2014is to safeguard this right to personal data protection, while ensuring that data moves freely within the EU."], "subsections": [{"section_title": "European Data Privacy Laws and the Lead-Up to the GDPR", "paragraphs": ["Beginning in the 1970s, individual European countries began enacting broad, omnibus national statutes concerning data protection, privacy, and information practices. Although these domestic laws shared certain features, their differing data privacy and protection standards occasionally impeded the free flow of information between European countries. As a consequence, the EU attempted to harmonize its various national privacy laws by adopting an EU-wide data privacy and protection initiative\u2014the 1995 Directive on the Protection of Individuals with Regard to the Processing of Personal Data and on the Free Movement of Such Data (Data Protection Directive).", "While the Data Protection Directive applied on an EU-wide basis, EU law authorized each member-nation to implement the directive's requirements into the country's national law. By 2012, the European Commission\u2014the executive body of the EU \u2014came to view differing implementations of the Data Protection Directive at the national level as problematic. The Commission concluded that a single regulation should be developed in order to eliminate the fragmentation and administrative burdens created by the directive-based system. The Commission also sought to bring EU law up to date with developments in technology and globalization that changed the way data is collected, accessed, and used. In pursuit of these goals, the EU developed and adopted the GDPR, which replaced the 1995 Data Protection Directive and went into effect on May 25, 2018."], "subsections": []}, {"section_title": "GDPR Provisions and Requirements", "paragraphs": [], "subsections": [{"section_title": "Scope and Territorial Reach", "paragraphs": ["The GDPR regulates the processing of personal data that meet its territoriality requirements, discussed below. Processing includes collection, use, storage, organization, disclosure or any other operation or set of operations performed on personal data, unless an exception applies. Personal data is defined as any information relating to an identified or identifiable person, and it can include names, identification numbers, location data, IP addresses, cookies, and any other information through which an individual can be directly or indirectly identified. The GDPR applies different requirements for controllers and processors of personal data. In general, a controller determines the purposes and means of processing personal data, and a processor is responsible for processing data on behalf of a controller.", "From a territorial perspective, the GDPR applies to organizations that have an \"establishment\" in the EU and that process personal data in the context of the activities of that establishment. The GDPR does not define \"establishment,\" but states that it \"implies the effective and real exercise of activity through stable arrangements.\" In a pre-GDPR case, the Court of Justice of the European Union stated that the concept of establishment under the 1995 Data Protection Directive extended \"to any real and effective activity\u2014even a minimal one\u2014exercised through stable arrangements.\" Entities that meet the establishment requirement are subject to the GDPR even if their data processing activities take place outside the EU. The GDPR also applies to non-EU-established entities that offer goods or services to individuals in the EU or monitor individuals' behavior in the EU. Because many businesses with an online presence offer goods and services to EU individuals, the GDPR applies to many businesses outside the EU. "], "subsections": []}, {"section_title": "Key Principles", "paragraphs": ["The GDPR lays out seven guiding principles for the processing of personal data. While these principles are not \"hard and fast rules\" themselves, they inform the interpretation of the GDPR and its more concrete requirements, discussed below."], "subsections": []}, {"section_title": "Bases for Processing and Consent Requirements", "paragraphs": ["The GDPR requires data controllers and processors to have a lawful basis to process personal data. The regulation delineates six possible legal bases: (1) consent; (2) performance of contract; (3) compliance with a legal obligations; (4) protection of the \"vital interests\" (i.e., the life) of the data subject or another individual; (5) tasks carried out in the public interest (e.g., by a government entity); and (6) the \"legitimate interests\" of the controller or a third party, unless the fundamental rights and freedom of the data subject override those interests. Commentators describe the \"legitimate interests\" category as the most flexible and as the potential basis for a host of common activities, such as processing carried out in the normal course of business, provided that the processing is not unethical, unlawful, or otherwise illegitimate. When data processing is premised on consent, the consent must be freely given, specific, informed, and unambiguous, and it can be withdrawn at any time. Additional consent requirements and restrictions apply to especially sensitive data, such as children's information and data that reveals ethnic origins, political opinions, religious beliefs, union status, sexual orientation, health information, and criminal histories."], "subsections": []}, {"section_title": "Individual Rights and Corresponding Obligations", "paragraphs": ["The GDPR provides a series of rights to individuals and corresponding obligations for data controllers, unless an exception applies. "], "subsections": []}, {"section_title": "Data Governance and Security", "paragraphs": ["The GDPR requires organizations to implement a range of measures designed to ensure and demonstrate that they are in compliance with the regulation. When proportionate in relation to the processing activities, such measures may include adopting and implementing data protection policies and taking a \"data protection by design and default\" approach whereby the organization implements compliance measures into all stages of data processing. Measures may also include the following: ", "establishing GDPR-conforming contracts with data processors; maintaining records of processing activities; conducting impact assessments on personal data use that is likely to risk individual rights and freedoms; appointing a data protection officer; and adhering to relevant codes of conduct and compliance certification schemes. ", "The GDPR also requires controllers and processors to implement technical and organizational measures to ensure a level of data security that is \"appropriate to the risk\" presented by the data processing. In implementing data security measures, organizations must consider the \"state of the art, the costs of implementation,\" the nature, scope, and context, and purposes of processing, and the likelihood and potential severity of an infringement on individual rights if data security were to be violated. The GDPR does not impose a \"one-size-fits-all\" requirement for data security, and security measures that are \"appropriate\" (and therefore mandatory) will depend on the specific circumstances and risks. For example, a company with an extensive network system that holds a large amount of sensitive or confidential information presents greater risk, and therefore must install more rigorous data security protections than an entity that holds less data. ", "When appropriate, organizations should consider encryption and pseudonymization \u2014the processing of personal data such that the data can no longer be attributed to a specific individual. Security measures should ensure the confidentiality, integrity, and resilience of processing systems; be able to restore access to personal data in the event of an incident; and include a process for testing security effectiveness. "], "subsections": []}, {"section_title": "Data Breach Notifications", "paragraphs": ["In the event of a personal data breach, the GDPR requires controllers to notify the designated EU government authority \"without undue delay\" and no later than 72 hours after learning of the breach, unless the breach is \"unlikely to result in a risk to the rights and freedoms of natural persons.\" For example, whereas a company must report the theft of a customer database that contains information that could be used for future identity fraud given the high level of risk to individuals, it may not need to report the loss of more innocuous data, such as a directory of staff office phone numbers. When notification to the government is required, the notification must describe the nature and likely consequences of the breach, identify measures to address the breach, and identify the employee responding to the incident. When data processors experience a breach, they must notify the controller without undue delay.", "In addition to governmental notification, controllers must notify the individuals whose data has been compromised if the breach is likely to result in a \"high risk to the rights and freedoms\" of individuals. The \"high risk\" threshold is higher than the threshold for notifying the government authority, but it could met in circumstances when individuals may need to take steps to protect themselves from the effects of a data breach. According to the United Kingdom's data protection regulatory authority, for example, a hospital that disclosed patient medical records as a result of a data breach may present a \"high risk\" to individuals, but a university that accidentally deleted, but was able to re-create, an alumni contact information database may not meet the mandatory individual reporting threshold. ", "Notification to the individual must describe the breach in clear and plain language and contain at least the same information as provided in the governmental notifications. Notification to the individual is not required in the following cases:", "the controller implemented appropriate technical and organizational protection measures, such as encryption, that will render the data unintelligible; the controller took subsequent measures that will ensure that the high risk to individual rights and freedom are no longer likely to materialize; or individual notifications would involve disproportionate efforts, in which case the controller must provide public notice of the breach.", "Regardless of whether notification is required, controllers must document all data breaches so that government supervisory authorities can verify compliance at a later date. "], "subsections": []}, {"section_title": "Data Transfer Outside the EU", "paragraphs": ["The EU has long regulated the transfer of data from EU member states to foreign countries, and the GDPR continues to restrict such international data transfers. Like the 1995 Data Protection Directive, the GDPR authorizes data transfer from within the EU to a non-EU country if the receiving country ensures an adequate level of protection for personal data. To meet this requirement, the non-EU country must offer a level of protection that is \"essentially equivalent to that ensured\" by the GDPR. If the European Commission previously made an adequacy decision under the Data Protection Directive's legal framework, that decision remains in force under the GDPR. ", "U.S. and EU officials previously developed a legal framework\u2014the U.S.-EU Privacy Shield\u2014for protecting transatlantic data flow into the United States. Under the Privacy Shield framework, U.S.-based organizations self-certify to the International Trade Administration in the Department of Commerce that they will comply with the framework's requirements for protecting personal data by complying with, among other provisions, notice requirements, data retention limits, security requirements, and data processing purpose principles. In 2016, the European Commission concluded that the Privacy Shield framework provided adequate protections under the Data Protection Directive. That adequacy determination continues to apply under the GDPR, although the European Commission annually reviews whether the Privacy Shield framework continues to provide an adequate level of protection. ", "In the absence of an adequacy decision from the European Commission, the GDPR permits data transfers outside the EU when (1) the recipient of the data has itself established appropriate safeguards , and (2) effective legal remedies exist for individuals to enforce their data privacy and protection rights. Appropriate safeguards include: a legally binding agreement between public authorities or bodies; binding corporate rules; standard contract clauses adopted by the European Commission; and approved codes of conduct and certification mechanisms. U.S. companies that do not participate in Privacy Shield often must rely on standard contract clauses to be able to receive data from the EU. ", "The GDPR also identifies a list of circumstances in which data may be transferred outside the EU even without appropriate safeguards or an adequacy decision. These circumstances include, among other reasons, when: an individual has provided informed consent; transfer is necessary for the performance of certain contracts involving the data subject; or the transfer is necessary for important reasons of public interests."], "subsections": []}, {"section_title": "Remedies, Liability, and Fines", "paragraphs": ["One of the most commented-upon aspects of the GDPR is its high ceiling for administrative fines. For the most serious infractions of the GDPR, regulatory bodies within individual EU countries may impose fines up to 20 million euro (approximately $22 million) or 4% of global revenue, whichever is higher, for certain violations of the GDPR. The GDPR also provides tools for individuals to enforce compliance with its terms. Individuals whose personal data is processed in a way that does not comport with the GDPR may lodge a complaint with regulatory authorities. Individuals also have the right to an \"effective judicial remedy\" (i.e., to pursue a lawsuit) against the responsible data processor or controller, and individuals may obtain compensation for their damages from data processors or controllers. "], "subsections": []}]}, {"section_title": "The GDPR and the 116th Congress", "paragraphs": ["The GDPR may be relevant to the 116th Congress' consideration of data protection initiatives in several ways. Because the GDPR applies to U.S. companies that offer goods and services to individuals in the EU, many U.S. companies have developed new data protection practices in an effort to comply with its requirements. Other businesses reported that they withdrew from the European market rather than attempt to obtain compliance GDPR. For those companies that remained in the European market, some have stated that they will apply their GDPR-compliant practices on a company-wide basis rather than changing their model only when doing business in the EU. Consequently, the GDPR already directly impacts the data protection practices of some U.S. companies.", "The GDPR also has served as a prototype for comprehensive data protection legislation in other governments. For example, commentators have described China's Personal Information Security Specification, which defines technical standards related to the collection, storage, use, transfer, and disclosure of personal information, as modeled on the GDPR. And the CCPA includes elements similar to the GDPR, such as an enumeration of individual rights related to data privacy. If this trend continues, GDPR-like data protection laws may become more commonplace internationally.", "Finally, some argue that Congress should consider enacting comprehensive federal data protection legislation similar to the GDPR. As discussed below, however, other observers and some officials in the Trump Administration have criticized the GDPR, describing the regulation as overly prescriptive and likely to result in negative unintended consequences. Regardless of the merits of these positions, the GDPR may remain a focal point of discussion in the debate over whether the United States should develop a more comprehensive data protection policy."], "subsections": []}]}, {"section_title": "The Trump Administration's Proposed Data Privacy Policy Framework", "paragraphs": ["Although some commentators argue that the federal government should supplement the current patchwork of federal data protection laws with more comprehensive legislation modeled on the CCPA or GDPR, some Trump Administration officials have criticized these legislative approaches and questioned whether they will improve data privacy outcomes. The Administration has argued that many comprehensive data privacy models have resulted in \"long, legal, regulator-focused privacy policies and check boxes, which only help a very small number of users[.]\" Rather than pursuing a prescriptive model in which the government defines (or prescribes) data protection rules, the Trump Administration advocates for what it describes as an outcome-based approach whereby the government focuses on the \"outcomes of organizational practices, rather than on dictating what those practices should be.\" ", "In September 2018, the National Telecommunications and Information Administration (NTIA) in the Department of Commerce issued a request for public comments on the Trump Administration's efforts to develop an outcome-based approach to advancing consumer privacy that also protects prosperity and innovation. According to NTIA, changes in technology have led consumers to conclude that they are losing control over their personal information, while at the same time that foreign and state privacy laws have led to a fragmented regulatory landscape that disincentives innovation. Accordingly, NTIA is attempting to develop a set of \"user-centric\" privacy outcomes and goals that would underpin the protections that should be produced by any federal actions related to consumer privacy. ", "NTIA's proposed policy focuses on a set of outcomes that the Trump Administration seeks to achieve:", "In addition to identifying desired outcomes, NTIA's request for public comments states that the Trump Administration is in the process of developing \"high-level goals for Federal action\" related to data privacy. NTIA's proposed privacy framework shares certain elements of prescriptive legal regimes like the GDPR and CCPA. Common features include a right to withdraw consent to certain uses of personal data; accountability for third-party vendors and servicers; and a right to access, amend, complete, correct, or delete personal data. But NTIA's request for public comments does not specifically describe how the Trump Administration intends to accomplish its outcomes and goals. Instead, it states that NTIA \"understand[s] that there is considerable work to be done to achieve\" the identified objectives. The comment period closed on November 9, 2018, and NTIA received input from more than 200 individuals and entities."], "subsections": []}, {"section_title": "Considerations for Congress", "paragraphs": ["The debate over whether Congress should consider federal legislation regulating data protection implicates numerous legal variables and options. \"Data protection\" itself is an expansive concept that melds the fields of data privacy (i.e., how to control the collection, use, and dissemination of personal information) and data security (i.e., how to protect personal information from unauthorized access or use and respond to such unauthorized access or use). There is no single model for data protection legislation in existing federal, state, or foreign law. For example, some state laws focus solely on data security or address a particular security concern, such as data breach notifications. Other state laws isolate a single privacy-related issue, such as the transparency of data brokers\u2014companies that aggregate and sell consumers' information, but that often do not have a direct commercial relationship with consumers.", "Recent data protection laws such as the CCPA and GDPR appear to indicate a trend toward combining data privacy and security into unified legislative initiatives. These unified data protection paradigms typically are structured on two related features: (1) an enumeration of statutory rights given to individuals related to their personal information and (2) the creation of legal duties imposed on the private entities that possess personal information. The specific list and nature of rights and duties differ depending on the legislation, and some have proposed to define new rights in federal legislation that do not have a clear analog in existing state or foreign law. Consequently, at present, there is no agreed-upon menu of data protection rights and obligations that could be included in federal legislation. ", "Although data protection laws and proposals are constantly evolving, some frequently discussed legal rights include: ", "the right to know what personal data is being collected, used, and disseminated, and how those activities are occurring; the right to control the use and dissemination of personal data, which may include the right to opt out or withhold consent to the collection or sharing of such data; the right to review personal data that has been collected and to delete or correct inaccurate information; the right to obtain a portable copy of personal data; the right to object to improper activities related to personal data; and the right to learn when a data breach occurs;", "Commonly discussed obligations for companies that collect, use, and disseminate personal data include rules defining: ", "how data is collected from individuals; how companies use data internally; how data is disseminated or disclosed to third parties; what information companies must give individuals related to their data; how data is kept secure; when breaches of security must be reported; the accuracy of data; and reporting requirements to ensure accountability and compliance. ", "Whether to enact federal data protection legislation that includes one or more of these rights and obligations has been the subject of a complex policy debate and multiple hearings in recent Congresses. Part of the legislative debate concerns how to enforce such rights and obligation and raises questions over the role of federal agencies, state attorneys general, and private citizen suits. In addition, some elements of the data protection proposals and models could implicate legal concerns and constitutional limitations. While the policy debate is outside the scope of this report, the following sections discuss legal considerations relevant to federal data protection proposals that the 116th Congress may choose to consider. These sections begin by analyzing legal issues related to the internal structure and definition of data protection-related rights and obligations and then move outward toward an examination of external legal constraints. "], "subsections": [{"section_title": "Prescriptive Versus Outcome-Based Approach", "paragraphs": ["A primary conceptual point of debate concerning data protection legislation is whether to utilize the so-called \"prescriptive\" method or an \"outcome-based\" approach to achieve a particular law's objectives. Under the prescriptive approach, the government defines data protection rules and requires regulated individuals and entities to comply with those rules. Both the GDPR and CCPA use a prescriptive approach, and some legislation proposed in the 116th Congress would use this method by delineating certain data protection requirements. The Trump Administration, however, has argued that a prescriptive approach can stymie innovation and result in compliance checklists without providing measurable privacy benefits. As an alternative methodology, the Administration advocated for what it described as an outcome-based approach whereby the government focuses on the outcomes of organizational practices, rather than defining the practices themselves. Some federal information technology laws, such as the Federal Information Security Management Act (FISMA), use an outcome-oriented approach to achieve federal objectives, although agency implementation of such laws may become prescriptive in nature. The Administration has not specified how it intends to achieve its desired data protection goals without prescribing data protection rules, but additional direction appears to be forthcoming, according to the NTIA's request for public comment. "], "subsections": []}, {"section_title": "Defining Protected Information and Addressing Statutory Overlap", "paragraphs": ["Another issue that may be considered in crafting federal data protection policy is how to define the contours of the data that the federal government proposes to protect or the specific entities or industries that it proposes to regulate. The patchwork of existing data protection statutes define protected information in a variety of ways, many of which depend on the context of the law. For example, HIPAA is limited to \"protected health information\" and GLBA governs \"financial information\" that is personally identifiable but not publicly available. By contrast, GDPR and CCPA regulate all \"personal\" information\u2014a term defined in both laws as information that is associated with a particular individual or is capable of being associated with an individual. Some federal data proposals would apply a similar scope to those of the GDPR and CCPA. If enacted, such broad data protection laws have the potential to create multiple layers of federal data protection requirements: (1) general data protection requirements for \"personal\" information and (2) sector-specific requirements for data regulated by the existing \"patchwork\" of data protection laws. Other legislative proposals have sought to avoid dual layers of regulations by stating that the proposed data protection requirements would not apply to individuals or entities covered by certain existing federal privacy laws."], "subsections": []}, {"section_title": "Agency Enforcement", "paragraphs": ["Agency enforcement is another key issue to consider when crafting any future federal data protection legislation. As discussed, under the current patchwork of federal data protection laws, there are multiple federal agencies responsible for enforcing the myriad federal statutory protections, such as the FTC, CFPB, FCC, and HHS. Of these agencies, the FTC is often viewed\u2014by industry representatives, privacy advocates, and FTC commissioners themselves \u2014as the appropriate primary enforcer of any future national data protection legislation, given its significant privacy experience. ", "There are, however, several relevant legal constraints on the FTC's enforcement authority. First, the FTC generally lacks the ability to issue fines for first-time offenses. In UDAP enforcement actions, the FTC may issue civil penalties only in certain limited circumstances, such as when a person violates a consent decree or a cease and desist order. Consequently, the FTC often enters into consent decrees addressing a broad range of conduct, such as a company's data security practices, seeking penalties for violations of those decrees. However, as the LabMD case discussed earlier in this report suggests, if the FTC imposes penalties based on imprecise legal standards provided in a rule or order, the Due Process Clause of the Fifth Amendment may constrain the agency's authority. Second, the plain text of the FTC Act deprives the FTC of jurisdiction over several categories of entities, including banks, common carriers, and nonprofits. Third, the FTC generally lacks authority to issue rules under the APA's notice-and-comment process that is typically used by agencies to issue regulations. Rather, the FTC must use a more burdensome\u2014and, consequently, rarely used\u2014process under the Magnuson-Moss Warranty Act.", "As some FTC Commissioners and commentators have noted, these legal limitations may be significant in determining the appropriate federal enforcement provisions in any national data security legislation. While Congress may not be able to legislate around constitutional constraints, future legislation could address some of these limitations\u2014for instance, by allowing the FTC to seek penalties for first-time violations of rules, expanding its jurisdictions to include currently excluded entities, or providing the FTC notice-and-comment rulemaking authority under the APA. These current legal constraints on FTC authority may also be relevant in determining whether national legislation should allow private causes of action or enforcement authority for state attorneys general, as some commentators have suggested that private causes of action and enforcement by state attorneys general are essential supplements to FTC enforcement."], "subsections": []}, {"section_title": "Private Rights of Action and Standing", "paragraphs": ["Legislation involving privacy may propose to allow individuals to seek private remedy for violations in the courts. Congress may seek to establish a private right of action allowing a private plaintiff to bring an action against a third party based directly on that party's violation of a public statute. As it has done with many sector-specific privacy laws, Congress, in a data protection statute, could provide not only for this right, but also for specific remedies beyond compensatory damages, such as statutory damages or even treble damages for injured individuals. However, it may be very difficult to prove that someone has been harmed in a clear way by many of the violations that might occur under a hypothetical data protection and privacy regime. Victims of data breaches and other privacy violations, generally speaking, do not experience clear and immediate pecuniary or reputational harm. This obstacle might threaten not only a consumer's ability to obtain monetary relief, but also could run up against the limits of the federal courts' \"judicial power\" under Article III of the U.S. Constitution.", "Article III extends the judicial power of the federal courts to only \"cases\" and \"controversies.\" As part of that limitation, the Supreme Court has stated that courts may adjudicate a case only where a litigant possesses Article III standing. A party seeking relief from a federal court must establish standing. Specifically, the party must show that he has a genuine stake in the relief sought because he has personally suffered (or will suffer): (1) a concrete, particularized and actual or imminent injury; (2) that is traceable to the allegedly unlawful actions of the opposing party; and (3) that is\u00a0redressable by a favorable judicial decision. These requirements, particularly the requirement of \"imminence,\" form significant barriers for lawsuits based on data protection. Imminence, according to the Supreme Court in Clapper v. Amnesty International , requires that alleged injury be \" certainly impending \" to constitute injury-in-fact. Speculation and assumptions cannot be the basis of standing. This reasoning has caused courts to dismiss data breach claims where plaintiffs cannot show actual misuse of data, but can only speculate that future thieves may someday cause them direct harm.", "These requirements are constitutional in nature and apply regardless of whether a statute purports to give a party a right to sue. This constitutional requirement limits Congress' ability to use private rights of action as an enforcement mechanism for federal rights, as the recent Supreme Court case Spokeo, Inc. v. Robins illustrates. Spokeo involved a Federal Credit Reporting Act (FCRA) lawsuit brought by Thomas Robins against a website operator that allowed users to search for particular individuals and obtain personal information harvested from a variety of databases. Robins alleged that Spokeo's information about him was incorrect, in violation of the FCRA requirement that consumer reporting agencies \"follow reasonable procedures to assure maximum possible accuracy\" of consumer reports. As discussed earlier in this report, FCRA provides for a private right of action making any person who willfully fails to comply with its requirements liable to individuals for, among other remedies, statutory damages. The lower court understood that Robins did not specifically allege any actual damages he had suffered, such as the loss of money resulting from Spokeo's actions. Nonetheless, the court concluded that the plaintiff had standing to seek statutory damages because his injury was sufficiently particular to him\u2014FCRA had created a statutory right for Robins and his personal interest was sufficient for standing. ", "The Supreme Court disagreed with the lower court, however, explaining that the lower court had erred by eliding the difference between Article III's \"concreteness\" and \"particularization\" requirements. Specifically, the Court concluded that a plaintiff must demonstrate a concrete injury separate from a particularized injury, meaning that plaintiffs must show that their injury \"actually exist[s].\" While tangible injuries, like monetary loss, are typically concrete, a plaintiff with an \"intangible injury\" must show that it is \"real\" and not \"abstract\" in order to demonstrate concreteness. For example, the Spokeo Court suggested that the mere publication of an incorrect zip code, although it could violate FCRA, would not be a sufficiently concrete injury for standing purposes. As a result, the Court remanded the case to the lower court to determine if the injury alleged in the case was both particularized and concrete.", "Spokeo does not eliminate Congress' role in creating standing where it might not otherwise exist. The Supreme Court explained that the concreteness requirement is \"grounded in historical practice\" and, as a result, Congress' judgment on whether an intangible harm is sufficiently concrete can be \"instructive.\" However, as Spokeo explained, Congress cannot elevate every privacy violation to the status of a concrete injury. Both before and after Spokeo , the lower courts have resolved standing disputes in lawsuits involving privacy and data protection, where parties argue about whether particular injuries are sufficiently concrete for purpose of Article III. Congress can possibly resolve some of these disputes by elevating some otherwise intangible injuries to concrete status. But Spokeo illustrates that there may be a residuum of harmless privacy violations for which Congress cannot provide a judicial remedy."], "subsections": []}, {"section_title": "Preemption", "paragraphs": ["Another legal issue Congress may need to consider with respect to any federal program involving data protection and privacy is how to structure the federal-state regime\u2014that is, how to balance whatever federal program is enacted with the programs and policies in the states. Federal law, under the Supremacy Clause, has the power to preempt or displace state law. As discussed above, there are a host of different state privacy laws, and some states have begun to legislate aggressively in this area. The CCPA in particular represents a state law that is likely to have a national effect. Ultimately, unless Congress chooses to occupy the entire field of data protection law, it is likely that the state laws will end up continuing to have a role in this area. Further, given that the states are likely to continue to experiment with legislation, the CCPA being a prime example, it is likely that preemption will be a highly significant issue in the debate over future federal privacy legislation. ", "As the Supreme Court has recently explained, preemption can take three forms: \"conflict,\" \"express,\" and \"field.\" Conflict preemption requires any state laws that conflict with a valid federal law to be without effect. Conflict preemption can occur when it is impossible for a private party to simultaneously comply with both federal and state requirements, or when state law amounts to an obstacle to the accomplishment of the full purposes of Congress. Express preemption occurs when Congress expresses its intent in the text of the statute as to which state laws are displaced under the federal scheme. Finally, field preemption occurs when federal law occupies a 'field' of regulation \"so comprehensively that it has left no room for supplementary state legislation.\" Ultimately, the preemptive scope of any federal data protection legislation will turn on the \"purpose\" of Congress and the specific language used to effectuate that purpose. ", "If Congress seeks to adopt a relatively comprehensive system for data protection, perhaps the most obvious means to preempt a broad swath of state regulation would be to do so \"expressly\" within the text of the statute by including a specific preemption provision in the law. For example, several existing federal statutes expressly preempt all state law that \"relate to\" a particular subject matter. The Supreme Court has held that this \"related to\" language encompasses any state law with a \"connection with, or reference to\" the subject matter referenced. Similar language can be used to displace all state laws in the digital data privacy sphere to promote a more uniform scheme.", "Congress could alternatively take a more modest approach to state law. For example, Congress could enact a data protection framework that expressly preserves state laws in some ways and preempts them in others. A number of federal statutes preempt state laws that impose standards \"different from\" or \"in addition to\" federal standards, or allow the regulator in charge of the federal scheme some authority to approve certain state regulations. These approaches would generally leave intact state schemes parallel to or narrower than the federal scheme. For example, a statute could permit a state to provide for additional liability or different remedies for violation of a federal standard. Congress could do the same with federal data protection legislation, using statutory language to try to ensure the protection of the provisions of state law that it sought to preserve."], "subsections": []}, {"section_title": "First Amendment", "paragraphs": ["Although legislation on data protection could take many forms, several approaches that would seek to regulate the collection, use, and dissemination of personal information online may have to confront possible limitations imposed by the First Amendment of the U.S. Constitution. The First Amendment guarantees, among other rights, \"freedom of speech.\" Scholars have split on how the First Amendment should be applied to proposed regulation in the data protection sphere. In one line of thinking, data constitutes speech, and regulation of this speech, even in the commercial context, should be viewed skeptically. Other scholars have argued that an expansive approach would limit the government's ability to regulate ordinary commercial activity, expanding the First Amendment beyond its proper role. This scholarly debate informs the discussion, but does not provide clear guidance on how to consider any particular proposed regulation.", "The Supreme Court has never interpreted the First Amendment as prohibiting all regulation of communication. Instead, when confronting a First Amendment challenge to a regulation, a court asks a series of questions in order to determine whether a particular law or rule runs afoul of the complicated thicket of case law that has developed in this area. The first question courts face when considering a First Amendment challenge is whether the challenged regulation involves speech or mere non-expressive conduct. As the Supreme Court has explained, simply because regulated activity involves \"communication\" does not mean that it comes within the ambit of the First Amendment. Where speech is merely a \"component\" of regulated activity, the government generally can regulate that activity without inviting First Amendment scrutiny. For example, \"a law against treason\u2026is violated by telling the enemy the Nation's defense secrets,\" but that does not bring the law within the ambit of First Amendment scrutiny. ", "Assuming the regulation implicates speech rather than conduct, it typically must pass First Amendment scrutiny. However, not all regulations are subject to the same level of scrutiny. Rather, the Court has applied different tiers of scrutiny to different types of regulations. For example, the Court has long considered political and ideological speech at the \"core\" of the First Amendment\u2014as a result, laws which implicate such speech generally are subject to strict scrutiny. Pursuant to this standard, the government must show that such laws are narrowly tailored to serve a compelling state interest. By contrast, the Court has historically applied less rigorous scrutiny to laws regulating \"commercial speech.\" Commercial speech is subject to a lower level of scrutiny known as the Central Hudson test, which generally requires the government to show only that its interest is \"substantial\" and that the regulation \"directly advances the governmental interest asserted\" without being \"more extensive than necessary to serve that interest.\"", "These principles have provided general guidance to lower courts in deciding cases that intersect with data protection, but implicit disagreements between these courts have repeatedly demonstrated the difficulty in striking the balance between First Amendment interests and data-protection regulation. For example, in 2001 in Trans Union Corp. v. FTC , the D.C. Circuit upheld an FTC order that prohibited Trans Union from selling marketing lists containing the names and addresses of individuals. The court assumed that disclosing or using the marketing lists was speech, not conduct, but concluded that the FTC's restrictions on the sale of the marketing lists generally concerned \"no public issue,\" and, as such, was subject to \"reduced constitutional protection.\" The court derived its \"no public issue\" rule from the Supreme Court's case law on defamation, which generally views speech that is solely in the private interest of the speaker as being subject to lower First Amendment protection from defamation suits than speech regarding matters of a public concern. Applying this \"reduced constitutional protection\" to the context of Trans Union's marketing lists, the court determined that the regulations were appropriately tailored. While the Trans Union court did not cite to Central Hudson , other courts have gone on to apply similar reasoning to uphold data protection laws from constitutional challenge under the ambit of Central Hudson 's commercial speech test.", "In contrast with the relatively lenient approach applied to a privacy regulation in Trans Union , in U.S. West v. FCC , the Tenth Circuit struck down FCC regulations on the use and disclosure of Consumer Proprietary Network Information (CPNI). The regulations stated that telecommunications carriers could use or disclose CPNI only for the purpose of marketing products to customers if the customer opted in to this use. The court determined that these provisions regulated commercial speech because they limited the ability of carriers to engage in consumer marketing. Applying Central Hudson , the court held that although the government alleged a general interest in protecting consumer privacy, this interest was insufficient to justify the regulations. The panel ruled that the regulations did not materially advance a substantial state interest because the government failed to tie the regulations to specific and real harm, supported by evidence. The court also concluded that a narrower regulation, such as a consumer opt-out, could have served the same general purpose. ", "After the Tenth Circuit's decision in U.S. West , the FCC responded by making minor changes to its regulations, maintaining some elements of the opt-in procedure for the use of CPNI and reissuing them with a new record. After this reissuance, the D.C. Circuit considered these modified-but-similar regulations in a 2009 case. In that case, the D.C. Circuit upheld the regulations without attaching much significance to the FCC's changes, and apparently implicitly disagreeing with the Tenth Circuit about both the importance of the privacy interest at stake and whether the opt-in procedure was proportional to that interest. ", "The Supreme Court's first major examination of the First Amendment in this context came in 2011. That year, the Court decided Sorrell v. IMS Health, Inc. , a case that is likely to be critical to understanding the limits of any future data protection legislation. In Sorrell , the Court considered the constitutionality of a Vermont law that restricted certain sales, disclosures, and uses of pharmacy records. Pharmaceutical manufacturers and data miners challenged this statute on the grounds that it prohibited them from using these records in marketing, thereby imposing what they viewed to be an unconstitutional restriction on their protected expression.", "Vermont first argued that its law should be upheld because the \"sales, transfer, and use of prescriber-identifying information\" was mere conduct and not speech. The Court explained that, as a general matter, \"the creation and dissemination of information are speech within the meaning of the First Amendment,\" and thus there was \"a strong argument that prescriber identifying information is speech for First Amendment purposes.\" Ultimately, however, the Court stopped short of fully embracing this conclusion, merely explaining that it did not matter whether the actual transfer of prescriber-identifying information was speech because the law nonetheless impermissibly sought to regulate the content of speech\u2014the marketing that used that data, as well as the identities of speakers\u2014by regulating an input to that speech. As the Court explained, the Vermont law was like \"a law prohibiting trade magazines from purchasing or using ink.\" ", "Second, Vermont argued that, even if it was regulating speech, its regulations passed the lower level of scrutiny applicable to commercial speech. The Court disagreed. The Court explained that the Vermont law enacted \"content- and speaker-based restrictions on the sale, disclosure and use of prescriber identifying information\" because it specifically targeted pharmaceutical manufacturers and prohibited certain types of pharmaceutical marketing. As the Court stated in a previous case, \"[c]ontent-based regulations are presumptively invalid\" because they \"raise[] the specter that the Government may effectively drive certain ideas or viewpoints from the marketplace.\" Further, the Sorrell Court observed that the legislature's stated purpose was to diminish the effectiveness of marketing by certain drug manufacturers, in particular those that promoted brand-name drugs, suggesting to the Court that the Vermont law went \"beyond mere content discrimination, to actual viewpoint discrimination.\" As a result, the Court concluded that some form of \"heightened scrutiny\" applied. Nevertheless, the Court reasoned that, even if Central Hudson 's less rigorous standard of scrutiny applied, the law failed to meet that standard because its justification in protecting physician privacy was not supported by the law's reach in allowing prescriber-identifying information's use \"for any reason save\" marketing purposes.", "Most of the lower courts outside the data protection and privacy context that have considered Sorrell have held that Sorrell 's reference to \"heightened scrutiny\" did not override the Central Hudson test in commercial speech cases, even where those cases include content- or speaker- based restrictions. Others, however, have held that content- and speaker-based restrictions must comport with something more rigorous than the traditional Central Hudson test, but it is not clear what this new standard requires or where it leads to a different outcome than Central Hudson . As a result, while Sorrell 's impact on privacy and data protection regulation has been considered by a few courts, no consensus exists on the impact it will have. However, a few commentators have observed that the case will likely have an important effect on the future of privacy regulation, if nothing else, by having all but concluded that First Amendment principles apply to the regulation of the collection, disclosure, and use of personally identifiable information as speech, not conduct.", "With respect to such future regulation, policymakers will likely want, at the minimum, to meet the Central Hudson requirement of ensuring that any restrictions on the creation, disclosure or use of information are justified by a substantial interest and that the regulations are no more extensive than necessary to further that interest. To illustrate, the Court in Sorrell identified HIPAA as a permissible \"privacy\" regulation because it allowed \"the information's sale or disclosure in only a few narrow and well-justified circumstances.\" This dictum suggests that Congress is able to regulate in the data protection sphere as long as it avoids the pitfalls of the law in Sorrell . However, it may not always be easy to determine whether any given law involves speaker or content discrimination. In Sorrell itself, for instance, three dissenting Justices argued that the content and speaker discrimination that took place under the Vermont law was inevitable in any economic regulation. As a result, resolving these issues as data privacy legislation becomes more complex is likely to create new challenges for legislators."], "subsections": []}]}, {"section_title": "Conclusion", "paragraphs": ["The current legal landscape governing data protection in the United States is complex and highly technical, but so too are the legal issues implicated by proposals to create unified federal data protection policy. Except in extreme incidents and cases of government access to personal data, the \"right to privacy\" that developed in the common law and constitutional doctrine provide few safeguards for the average internet user. Although Congress has enacted a number of laws designed to augment individual's data protection rights, the current patchwork of federal law generally is limited to specific industry participants, specific types of data, or data practices that are unfair or deceptive. This patchwork approach also extends to certain state laws. Seeking a more comprehensive data protection system, some governments\u2014such as California and the EU\u2014have enacted wide-ranging laws regulating many forms of personal data. Some argue that Congress should consider creating similar protections in federal law, but others have criticized the EU's and California's approach to data protection. ", "Should the 116th Congress consider a comprehensive federal data protection program, its legislative proposals may involve numerous decision points and legal considerations. An initial decision point is the scope and nature of any legislative proposal. There are numerous data protection issues that could be addressed in any future legislation, and different possible approaches for addressing those issues (such as using a \"prescriptive\" or \"outcome-based\" approach). Other decision points may include defining the scope of any protected information and determining the extent to which any future legislation should be enforced by a federal agency. Further, to the extent Congress wants to allow individuals to enforce data protection laws and seek remedies for the violations of such laws in court, it must account for Article III's standing requirements. Under the Supreme Court's 2016 Spokeo Inc. v. Robins decision, plaintiffs must experience more than a \"bare procedural violation\" of a federal privacy law to satisfy Article III and to sue to rectify a violation of that law. Federal preemption also raises complex legal questions\u2014not only of whether to preempt state law, but what form of preemption Congress should employ. Finally, from a First Amendment perspective, Supreme Court jurisprudence suggests that while some \"privacy\" regulations are permissible, any federal law that restricts protected speech, particularly if it targets specific speakers or content, may be subject to more stringent review by a reviewing court."], "subsections": [{"section_title": "Appendix. Summary of Federal Data Protection Laws", "paragraphs": [], "subsections": []}]}]}}
{"id": "R45451", "title": "Clean Air Act Issues in the 116th Congress", "released_date": "2019-04-18T00:00:00", "summary": ["Review and rollback of Clean Air Act rules to regulate greenhouse gas (GHG) emissions from power plants, cars and trucks, and the oil and gas sector has been a major focus of the Trump Administration since it took office in 2017. On March 28, 2017, President Trump signed Executive Order 13783, to require the review of regulations and policies that \"burden the development or use of domestically produced energy resources.\" The E.O. directed the U.S. Environmental Protection Agency (EPA) to review the Clean Power Plan (CPP), which set limits on GHG emissions from existing power plants, and several other regulations for consistency with policies that the E.O. enumerates, and as soon as practicable, to \"suspend, revise, or rescind the guidance, or publish for notice and comment proposed rules suspending, revising, or rescinding those rules.\" GHG rules for new power plants, for cars and trucks, and for methane emissions from the oil and gas industry, in addition to the CPP, are subject to the executive order and are under review at EPA, as well as being challenged in the courts.", "The CPP, which was promulgated by the Obama Administration's EPA in 2015 and would limit GHG emissions from existing fossil-fueled power plants, has been one focus of debate. The Trump Administration's EPA has proposed to repeal the CPP and replace it with the Affordable Clean Energy rule (ACE), a rule that defines the \"best system of emission reduction\" for coal-fired power plant GHGs as efficiency improvement technologies. As proposed, the CPP repeal and ACE rules would remove federal numerical carbon dioxide (CO2) emission limits for existing coal- and natural gas-fired power plants, eliminating one backstop on power plant GHG emissions. Final agency action on ACE is expected later this year. Some Members of Congress have submitted comments to EPA on the ACE proposal. Congress may be interested in conducting oversight of the ACE rule.", "Clean Air Act GHG standards for cars and light trucks are the subject of another EPA review. An August 2018 proposal would freeze EPA's GHG standards for new cars and light trucks at the level required in model year (MY) 2020. Current regulations, promulgated in 2012 and reaffirmed in January 2017, set increasingly stringent emission standards through MY2025. The EPA proposal would cause a projected increase in vehicle fuel consumption of about a half million barrels of gasoline per day (equivalent to about 186,000 metric tons of carbon dioxide per day) when fully implemented, according to EPA and the Department of Transportation. The proposal would also withdraw California's Clean Air Act waiver for new vehicle GHG standards applicable to MY2021-MY2025. The California standards have been adopted by 12 other states and cover about 35% of the new vehicle market.", "Following promulgation of these or other Clean Air Act regulations, Congress could address the issues through legislation affirming, modifying, or overturning them. The threat of a filibuster, requiring 60 votes to proceed, however, has generally prevented Senate action. In the 116th Congress, the new majority in the House has indicated a greater interest in addressing climate change issues rather than rolling back regulations. One result may be a new focus on oversight of agency actions to address climate change and its impacts.", "The 116th Congress may also be interested in issues related to EPA air quality standards for what are called \"conventional\" or \"criteria\" pollutants. EPA faces statutory deadlines to complete reviews of the National Ambient Air Quality Standards (NAAQS) for the two most widespread of this group: ozone and particulate matter (PM). The agency has proposed to speed up the review process, while simultaneously eliminating the scientific review panels that have historically assisted agency staff in conducting the reviews. The Clean Air Act has minimal requirements for how the agency is to conduct NAAQS reviews, leaving the details to the EPA Administrator. Nevertheless, congressional oversight is considered possible as EPA moves forward with the ozone and PM reviews.", "Other issues Congress might consider include air toxics regulations (e.g., the Mercury and Air Toxics rule for power plants), standards for new residential wood heaters, and the Renewable Fuel Standard."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Review of Clean Air Act regulations issued under the Obama Administration, with the possibility of their modification or repeal, has been a major focus of the Trump Administration since it took office in 2017. The U.S. Environmental Protection Agency (EPA) has conducted these reviews as part of the Trump Administration's \"regulatory reform\" initiative under which the Administration has directed federal agencies to evaluate existing regulations and identify those that should be considered for replacement, repeal, or modification. In addition, Executive Order (E.O.) 13783 has directed EPA and other federal agencies to review existing regulations and policies that \"potentially burden the development or use of domestically produced energy resources\" for consistency with policies that the E.O. enumerates, and as soon as practicable, to \"suspend, revise, or rescind the guidance, or publish for notice and comment proposed rules suspending, revising, or rescinding those rules.\" EPA rules to regulate greenhouse gas (GHG) emissions from power plants, cars and trucks, and the oil and gas sector have been of particular interest. "], "subsections": []}, {"section_title": "EPA's Greenhouse Gas Regulations", "paragraphs": ["EPAs regulatory actions to limit GHG emissions have relied on authority that Congress granted the agency in the Clean Air Act (CAA) Amendments of 1970. Since 2007, the Supreme Court has ruled on two separate occasions that the CAA, as amended, authorizes EPA to set standards for GHG emissions. In the first case, Massachusetts v. EPA , the Court held that GHGs are air pollutants within the CAA's definition of that term and that EPA must regulate their emissions from motor vehicles if the agency finds that such emissions cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare. Following the Court's decision, in 2009, the agency made an endangerment finding. In the second case, American Electric Power, Inc. v. Connecticut , the Court held that corporations cannot be sued for GHG emissions under federal common law, because the CAA delegates the management of carbon dioxide and other GHG emissions to EPA: \"... Congress delegated to EPA the decision whether and how to regulate carbon-dioxide emissions from power plants; the delegation is what displaces federal common law.\" ", "EPA's GHG regulations have focused on six gases or groups of gases that multiple scientific studies have linked to climate change. Of the six gases, carbon dioxide (CO 2 ), which is produced by combustion of fossil fuels and is the most prevalent, accounts for about 80% of annual emissions of the combined group when measured as CO 2 equivalents.", "Of the GHG emission standards promulgated by EPA, four sets of standards, which have had the broadest impacts, are discussed below: those for power plants, the oil and gas industry, trucks, and light-duty vehicles (the latter two topics are combined under the heading \" Standards for Motor Vehicles \"). EPA finalized GHG standards for power plants in August 2015; set GHG emission standards for oil and gas industry sources in June 2016; finalized a second round of GHG standards for trucks in August 2016; and completed a Mid-Term Evaluation (MTE) of the already promulgated GHG standards for model years 2022-2025 light-duty vehicles (cars and light trucks) in January 2017. Most of these rules are under review at EPA; the agency has proposed repeal or modification in several cases."], "subsections": [{"section_title": "Standards for Power Plants (Clean Power Plan and NSPS)", "paragraphs": ["The electricity sector has historically accounted for the largest percentage of anthropogenic U.S. CO 2 emissions, though transportation activities have more recently accounted for a slightly larger share. In 2017, the electricity sector accounted for 27.5% of total U.S. GHG emissions and transportation activities accounted for 28.9%. EPA finalized GHG (CO 2 ) emission standards under CAA Section 111 for new, existing, and modified fossil-fueled power plants in August 2015. The standards would primarily affect coal-fired units, which emit twice the amount of CO 2 that would be emitted by an equivalent natural gas combined cycle (NGCC) electric generating unit. The final rules were controversial: EPA received more than 4 million public comments as it considered the proposed standards for existing units, by far the most comments on a rulemaking in the agency's 48-year history. ", "The Clean Power Plan (CPP), which is the rule for existing units, would set state-specific goals for CO 2 emissions or emission rates from existing fossil-fueled power plants. EPA established different goals for each state based on three \"building blocks\": improved efficiency at coal-fired power plants; substitution of NGCC generation for coal-fired power; and zero-emission power generation from increased renewable energy, such as wind or solar. The goals would be phased in, beginning in 2022, with final average emission rates for each state to be reached by 2030. ", "Independently of the CPP, the period since its proposal in 2014 has seen rapid changes in the electric power industry. Coal-fired power plants have been retired in record numbers and cleaner sources of electric power (both renewable and natural-gas-fired) have taken their place. Coal, which accounted for 39% of electric power generation in 2014, declined to 28% of the total in 2018; natural gas generation rose from 28% to 35% of the total, and wind and solar from 7% to 11% in the same period. ", "As a result of this shift in power sources, emissions of CO 2 from the electric power sector have declined faster than would have been required by the CPP. Cheap and abundant natural gas, state and federal incentives to develop wind and solar power, and tighter EPA standards for non-CO 2 emissions from coal-fired power plants have all played a role in this transition. ", "New Source Performance Standards (NSPS) for new and modified power plants, promulgated at the same time as the CPP, would affect fewer plants, but they too are controversial, because of the technology the rule assumed could be used to reduce emissions at new coal-fired units. As promulgated in 2015, the NSPS would have relied in part on carbon capture and sequestration (CCS) technology to reduce emissions by about 20% compared to the emissions of a state-of-the-art coal-fired plant without CCS. Critics stated that CCS is a costly and unproven technology, and because of this, the NSPS would effectively have prohibited the construction of new coal-fired plants. No operating commercial U.S. power plant was capturing and storing CO 2 as of the date the rule was promulgated. (The first commercial CCS facility in the United States, the Petra Nova project at the W.A. Parish Generating Station in Texas, came on line in 2016.) For additional information on the Clean Power Plan and the 2015 NSPS, see CRS Report R44744, Clean Air Act Issues in the 115th Congress: In Brief .", "Implementation of the CPP has been stayed by the Supreme Court since February 2016, pending the completion of judicial review. Prior to the stay, challenges to the rule were filed with the U.S. Court of Appeals for the D.C. Circuit by more than 100 parties, including 27 states. These challenges were consolidated into a single case, West Virginia v. EPA . The D.C. Circuit heard oral argument in the case in September 2016; as of this writing, the court has not issued a decision. (For a discussion of the legal issues, see CRS Report R44480, Clean Power Plan: Legal Background and Pending Litigation in West Virginia v. EPA .) The NSPS have also been challenged ( North Dakota v. EPA ). EPA requested (and the court granted) a pause in that litigation to give EPA time to conduct a review.", "Under the Trump Administration, EPA has reviewed both the CPP and the NSPS. This review concluded, among other things, that the CPP exceeded EPA's statutory authority by using measures that applied to the power sector as a whole rather than measures carried out within an individual facility. The agency therefore proposed repeal of the CPP on October 16, 2017, and a rule to replace it (the Affordable Clean Energy (ACE) rule) on August 21, 2018. The ACE rule would apply a narrower interpretation than the CPP of the best system of emission reduction (BSER), defining it as on-site heat rate improvements for existing coal-fired units. The rule would not establish a numeric performance standard for existing coal-fired units. Instead, EPA proposed a list of candidate technologies that would constitute the BSER. The ACE rule does not establish BSER for other types of existing power plants, such as natural gas single cycle or combined cycle plants or petroleum-fired plants. ", "EPA proposed two additional actions in ACE\u2014one to revise regulations that implement CAA Section 111(d) and another to modify an applicability determination for a CAA preconstruction permitting program for new and modified stationary sources, known as New Source Review (NSR). The former seeks to codify EPA's current legal interpretation that states have broad discretion to establish emission standards consistent with BSER. The latter would revise the NSR applicability test for certain power plants and, according to EPA, prevent NSR from discouraging the installation of energy-efficiency measures. (For more information about the ACE proposal, see CRS Report R45393, EPA's Affordable Clean Energy Proposal .)", "The agency also proposed to revise the NSPS on December 6, 2018. In the December 2018 proposal, EPA determined that the BSER for newly constructed coal-fired units would be the most efficient demonstrated steam cycle in combination with the best operating practices. This proposed BSER would replace the determination from the 2015 rule, which identified the BSER as partial carbon capture and storage. According to the agency, \"the primary reason for this proposed revision is the high costs and limited geographic availability of CCS.\"", "Another issue of interest to Congress relates to the agency's legal basis for the 2015 NSPS, including EPA's conclusion in 2015 that power plants emit a significant amount of CO 2 . Prior to the power sector GHG rules, EPA made two findings under CAA Section 202: (1) that GHGs currently in the atmosphere potentially endanger public health and welfare and (2) that new motor vehicle emissions cause or contribute to that pollution. These findings are collectively referred to as the endangerment finding. The endangerment finding triggered EPA's duty under CAA Section 202(a) to promulgate emission standards for new motor vehicles.", "In the 2015 NSPS rule, EPA concluded that it did not need to make a separate endangerment finding under Section 111, which directs EPA to list categories of stationary sources that cause or contribute significantly to \"air pollution which may reasonably be anticipated to endanger public health or welfare.\" EPA reasoned that because power plants had been listed previously under Section 111, it was unnecessary to make an additional endangerment finding for a new pollutant emitted by a listed source category. The agency also argued that, even if it were required to make a finding, electric generating units (EGUs) would meet that endangerment requirement given the significant amount of CO 2 emitted from the source category.", "While neither ACE nor the 2018 NSPS rule proposes to reconsider the endangerment finding or the conclusions related to the endangerment finding in the 2015 NSPS, the 2018 NSPS requested comments on these issues, \"either as a general matter or specifically applied to GHG emissions.\" For example, EPA noted that power sector GHG emissions are declining and requested comment on whether EPA has \"a rational basis for regulating CO 2 emissions from new coal-fired\" units. EPA also requested comment on whether the CAA requires the agency to make an endangerment finding once for a source category or if the act requires EPA to make a new endangerment finding each time it regulates an additional pollutant from a listed source category.", "The NSPS revision and repeal and replacement of the CPP are still at the proposal stage. Revising, repealing, or replacing a promulgated rule require the agency to follow the administrative steps involved in proposing and promulgating a new rule, including allowing public comment, and responding to significant comments upon promulgation of a final rule. Following promulgation, the repeal action, revisions, and replacement rules are subject to judicial review. A large group of stakeholders, including some states, are seen as likely to oppose the changes associated with repealing the CPP and replacing it with ACE.", "The EPA and judicial processes could be short-circuited by Congress, through legislation overturning, modifying, or affirming the CPP or NSPS. Congressional action is considered unlikely, however, as the threat of a filibuster, requiring 60 votes to proceed, could prevent Senate action. ", "The new House majority has expressed a strong interest in addressing climate change. As a result, oversight hearings are considered likely as EPA finalizes actions on the ACE rule and NSPS."], "subsections": []}, {"section_title": "Standards for the Oil and Gas Industry", "paragraphs": ["On June 3, 2016, EPA promulgated a suite of New Source Performance Standards (NSPS) under CAA Section 111 to set controls for the first time on methane emissions from sources in the crude oil and natural gas production sector and the natural gas transmission and storage sector. The rule builds on the agency's 2012 NSPS for volatile organic compound (VOC) emissions and would extend controls for methane and VOC emissions beyond the existing requirements to include new or modified hydraulically fractured oil wells, pneumatic pumps, compressor stations, and leak detection and repair at well sites, gathering and boosting stations, and processing plants. The Obama Administration stated that the rule was a key component under the \"Climate Action Plan,\" and that the plan's Strategy to Reduce Methane Emissions was needed to set the United States on track to achieve the Administration's goal to cut methane emissions from the oil and gas sector by 40%-45% from 2012 levels by 2025, and to reduce all domestic GHG emissions by 26%-28% from 2005 levels by 2025. ", "Methane\u2014the key constituent of natural gas\u2014is a potent greenhouse gas with a global warming potential (GWP) more than 25 times greater than that of carbon dioxide (CO 2 ). According to EPA's Inventory of U.S. Greenhouse Gas Emissions and Sinks , methane is the second most prevalent GHG emitted in the United States from human activities, and over 25% of those emissions come from oil production and the production, transmission, and distribution of natural gas. ", "EPA projected that the standards for new, reconstructed, and modified sources would reduce methane emissions by 510,000 tons in 2025, the equivalent of reducing 11 million metric tons of CO 2 . In conjunction with the proposal, EPA conducted a Regulatory Impact Analysis (RIA) that looked at the illustrative benefits and costs of the proposed NSPS: in 2025, EPA estimated the rule will have costs of $530 million and climate benefits of $690 million (in constant 2012 dollars). The rule would also reduce emissions of VOCs and hazardous air pollutants (HAPs). EPA was not able to quantify the benefits of the VOC/HAP reductions. ", "The methane rule is among the rules subject to review under E.O. 13783, signed by President Trump on March 28, 2017. Section 7 of the E.O. directed EPA to review the rule for consistency with policies that the E.O. enumerates, and, if appropriate, as soon as practicable, to \"suspend, revise, or rescind the guidance, or publish for notice and comment proposed rules suspending, revising, or rescinding those rules.\" ", "On March 12, 2018, EPA published a final rule to make two \"narrow\" revisions to the 2016 NSPS. The rule removes the requirement that leaking components be repaired during unplanned or emergency shutdowns and provides separate monitoring requirements for well sites located on the Alaskan North Slope. ", "On October 15, 2018, EPA proposed a larger set of amendments to the 2016 NSPS. The proposed changes would decrease the frequency for monitoring fugitive emissions at well sites and compressor stations; decrease the schedule for making repairs; expand the technical infeasibility provision for pneumatic pumps to all well sites; and amend the professional engineer certification requirements to allow for in-house engineers. Upon the proposal's release, the agency stated that it \"continues to consider broad policy issues in the 2016 rule, including the regulation of greenhouse gases in the oil and natural gas sector,\" and that \"these issues will be addressed in a separate proposal at a later date.\" The comment period for the proposed amendments closed on December 17, 2018. (For more discussion, see CRS Report R42986, Methane and Other Air Pollution Issues in Natural Gas Systems , by Richard K. Lattanzio.)"], "subsections": []}, {"section_title": "Standards for Motor Vehicles", "paragraphs": ["Controversy regarding GHG standards promulgated by the Obama EPA for new motor vehicles has surfaced under the Trump Administration. In May 2009, President Obama reached agreement with major U.S. and foreign auto manufacturers, the state of California (which has separate authority to set motor vehicle emission standards, if EPA grants a waiver), and other stakeholders regarding the substance of GHG emission and related fuel economy standards. A second round of standards for cars and light trucks, promulgated in October 2012, was also preceded by an agreement with the auto industry and key stakeholders. Under the agreements, EPA, the U.S. Department of Transportation (DOT, which has authority to set fuel economy standards), and California would establish \"One National Program\" for GHG emissions and fuel economy. The auto industry supported national standards, in part, to avoid having to meet standards on a state-by-state basis. ", "The second round of GHG standards for cars and light trucks is being phased in over model years (MY) 2017-2025. It would reduce GHG emissions from new light-duty vehicles (i.e., cars, SUVs, crossovers, minivans, and most pickup trucks) by about 50% compared to 2010 levels, and average fuel economy will rise to nearly 50 miles per gallon (mpg) when fully phased in, in 2025. As part of the rulemaking, EPA made a commitment to conduct a Mid-Term Evaluation (MTE) for the MY2022-2025 standards by April 2018. The agency deemed an MTE appropriate given the long time frame at issue, with the final standards taking effect as long as 12 years after promulgation. Through the MTE, EPA was to determine whether the standards for MYs 2022-2025 were still appropriate given the latest available data and information, with the option of strengthening, weakening, or retaining the standards as promulgated. ", "On November 30, 2016, EPA released a proposed determination under the MTE stating that the MY2022-2025 standards remained appropriate and that a rulemaking to change them was not warranted. EPA based its findings on a Technical Support Document, a previously released Draft Technical Assessment Report (which was issued jointly by EPA, DOT, and the California Air Resources Board [CARB]), and input from the auto industry and other stakeholders. The proposed determination opened a public comment period that ran through December 30, 2016. On January 12, 2017, the EPA Administrator made a final determination to retain the MY2022-2025 standards as originally promulgated. ", "The final action arguably accelerated the timeline for the MTE (which called for a final determination by April 2018), and EPA announced it separately from any DOT or California announcement. EPA noted its \"discretion\" in issuing a final determination, saying that the agency \"recognizes that long-term regulatory certainty and stability are important for the automotive industry and will contribute to the continued success of the national program.\" Some auto manufacturer associations and other industry groups criticized the results of EPA's review and reportedly vowed to work with the Trump Administration to revisit EPA's determination. These groups sought actions such as easing the MY2022-2025 requirements or better aligning DOT's and EPA's standards.", "The Trump Administration reopened the MTE in mid-March 2017. On April 2, 2018, EPA released a revised final determination, stating that the MY2022-2025 standards are \"not appropriate in light of the record before EPA and, therefore, should be revised.\" The notice stated that the January 2017 final determination was based on \"outdated information, and that more recent information suggests that the current standards may be too stringent.\"", "Following the revised final determination, on August 24, 2018, EPA and DOT proposed amendments to the existing fuel economy and GHG emission standards. The proposal offers eight alternatives. The agencies' preferred alternative, if finalized, is to retain the existing standards through MY2020 and then to freeze the standards at this level for both programs through MY2026. The preferred alternative also removes the current CO 2 equivalent air conditioning refrigerant leakage, nitrous oxide, and methane requirements after MY2020. The proposed standards would lead to an estimated average fuel economy of 37 mpg for MY2020-2026 vehicles, causing a projected increase in fuel consumption of about 0.5 million barrels per day (equivalent to about 186,000 metric tons of carbon dioxide per day), according to EPA and DOT. The agencies project a net benefit from revising the standards, relying on new estimates of compliance costs, fatalities, and injuries. The proposed standards were subject to public comment for 60 days following their publication in the Federal Register . Until the new rulemaking is completed, the standards promulgated in 2012 remain in effect. (For additional information, see CRS Report R45204, Vehicle Fuel Economy and Greenhouse Gas Standards: Frequently Asked Questions , by Richard K. Lattanzio, Linda Tsang, and Bill Canis.)", "Further, under the proposal, EPA aims to withdraw California's CAA preemption waiver for its vehicle GHG standards applicable to MYs 2021-2025. DOT contends that the Energy Policy and Conservation Act of 1975 (EPCA), which authorizes the department's fuel economy standards, preempts California's GHG emission standards. DOT argues that state laws regulating or prohibiting tailpipe CO 2 emissions are related to fuel economy and can therefore be preempted under EPCA. The agencies accepted comments on the proposal through October 26, 2018.", "EPA and DOT have also promulgated joint GHG emission and fuel economy standards for medium- and heavy-duty trucks, which have generally been supported by the trucking industry and truck and engine manufacturers. This rule was finalized on August 16, 2016. The new standards cover MYs 2018-2027 for certain trailers and MYs 2021-2027 for semi-trucks, large pickup trucks, vans, and all types and sizes of buses and work trucks. According to EPA, ", "The Phase 2 standards are expected to lower CO 2 emissions by approximately 1.1 billion metric tons, save vehicle owners fuel costs of about $170 billion, and reduce oil consumption by up to 2 billion barrels over the lifetime of the vehicles sold under the program. ", "In the Regulatory Impact Analysis accompanying the rule's promulgation, EPA projected the total cost of the Phase 2 standards at $29-$31 billion over the lifetime of MY2018-2029 trucks. The standards would increase the cost of a long haul tractor-trailer by as much as $13,500 in MY2027, according to the agency; but the buyer would recoup the investment in fuel-efficient technology in less than two years through fuel savings. In EPA's analysis, fuel consumption of 2027 model tractor-trailers will decline by 34% as a result of the rule. ", "In general, the truck standards have been well received. The American Trucking Associations, for example, described themselves as \"cautiously optimistic\" that the rule would achieve its targets: \"We are pleased that our concerns such as adequate lead-time for technology development, national harmonization of standards, and flexibility for manufacturers have been heard and included in the final rule.\" The Truck and Engine Manufacturers Association highlighted its work providing input to assure that EPA and DOT established a single national program, and concluded: \"A vitally important outcome is that EPA and DOT have collaborated to issue a single final rule that includes a harmonized approach to greenhouse gas reductions and fuel efficiency improvements.\" ", "Neither group filed a petition for judicial review of the rule. The only challengers were the Truck Trailer Manufacturers Association and the Racing Enthusiasts and Suppliers Coalition. In April 2017, EPA took steps to review the rule, asking the D.C. Circuit Court of Appeals to hold the legal challenge ( Truck Trailer Manufacturers Association v. EPA ) in abeyance while EPA conducts a review of the standards. The court granted EPA's request on May 8, 2017. On October 27, 2017, the D.C. Circuit Court granted the Truck Trailer Manufacturers Association's request to stay certain requirements for trailers pending the judicial review of the medium- and heavy-duty vehicles rule. The rest of the rule remains in effect. (For additional information, see CRS In Focus IF10927, Phase 2 Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles , by Richard K. Lattanzio.)", "The truck rule also established emission standards for vehicles manufactured from \"glider kits\" (truck bodies produced without a new engine, transmission, or rear axle). On November 16, 2017, EPA proposed a repeal of the emission standards and other requirements on heavy-duty glider vehicles, glider engines, and glider kits based on a proposed interpretation of the CAA. EPA's proposed repeal has not been finalized, and efforts to expedite the proposal or provide regulatory relief to the industry have been met with resistance from a number of states, environmental groups, and stakeholders in the trucking sector. EPA's fall 2018 regulatory agenda characterizes its glider rulemaking as a \"long-term action,\" which is defined as a measure for which the agency \"does not expect to have a regulatory action within\" a year of publishing the agenda. (For additional information, see CRS Report R45286, Glider Kit, Engine, and Vehicle Regulations , by Richard K. Lattanzio and Sean Lowry.)"], "subsections": []}]}, {"section_title": "Air Quality Standards", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["Air quality has improved substantially since the passage of the CAA in 1970. Annual emissions of the six air pollutants for which EPA has set national ambient air quality standards (NAAQS)\u2014ozone, particulate matter, sulfur dioxide, carbon monoxide, nitrogen dioxide, and lead\u2014have declined by more than 70%, despite major increases in population, motor vehicle miles traveled, and economic activity. Nevertheless, the goal of clean air continues to elude many areas, in part because evolving scientific understanding of the health effects of air pollution has caused EPA to tighten standards for most of these pollutants. Congress anticipated that the understanding of air pollution's effects on public health and welfare would change with time, and it required, in Section 109(d) of the act, that EPA review the NAAQS at five-year intervals and revise them, as appropriate.", "The most widespread air quality problems involve ozone and fine particles (often referred to as \"smog\" and \"soot,\" respectively). A 2013 study by researchers at the Massachusetts Institute of Technology concluded that emissions of particulate matter (PM) and ozone caused 210,000 premature deaths in the United States in 2005. Many other studies have found links between air pollution, illness, and premature mortality, as well. EPA summarizes these studies in what are called Integrated Science Assessments (ISAs) and Risk Analyses when it reviews a NAAQS. The most recent ISA for particulate matter\u2014a draft version that EPA published as part of the PM NAAQS review currently underway\u2014concludes that there is a \"causal relationship\" between total mortality and both short-term and long-term exposure to PM. The most recent ozone ISA states that there is \"likely to be a causal relationship\" between short-term exposures to ozone and total mortality.", "With input from the states, EPA identifies areas where concentrations of pollution exceed the NAAQS following its promulgation. As of March 31, 2019, 124 million people lived in areas classified as \"nonattainment\" for the current ozone NAAQS; 23 million lived in areas that were nonattainment for the current fine particulate matter (PM 2.5 ) NAAQS.", " Figure 1 identifies areas that had not attained one or more of the NAAQS as of March 31, 2019."], "subsections": []}, {"section_title": "EPA's Review of the NAAQS", "paragraphs": ["EPA's statutorily mandated reviews of the ozone and particulate matter NAAQS are underway and may be more contentious than usual. The CAA has minimal requirements for how the agency is to conduct NAAQS reviews, leaving the details to the EPA Administrator. Congress may undertake oversight, as EPA moves forward with these reviews.", "EPA also intends to streamline NAAQS reviews and obtain Clean Air Scientific Advisory Committee (CASAC) advice regarding background pollution and potential adverse effects from NAAQS compliance strategies. In October 2018, EPA made an unprecedented change and eliminated the pollutant-specific scientific review panels, which have historically helped agency staff conduct the five-year reviews. Specifically, EPA disbanded the Particulate Matter Review Panel, which was appointed in 2015, and stated that it would not form an Ozone Review Panel. Instead, the seven-member CASAC is to lead \"the review of science for any necessary changes\" to the ozone or particulate matter NAAQS. Since then, however, some members of CASAC have raised concerns about this approach. In April 2019, the CASAC recommended that EPA either \"reappoint the previous CASAC [particulate matter] panel or appoint a panel with similar expertise.\" Others, including former members of CASAC and previous ozone review panels, stated that the current CASAC lacks the depth and breadth of expertise required for the ozone review. Additional stakeholder views\u2014in particular, those that may support this particular change\u2014are not readily available."], "subsections": [{"section_title": "2020 Review of the Ozone NAAQS", "paragraphs": ["Since 2008, review of the NAAQS for ozone has sparked recurrent controversy. In 2008, EPA promulgated a more stringent ozone NAAQS, and for the first time ever, the Administrator chose a health-based standard outside the range recommended by the independent scientific review committee established by the CAA. In 2015, EPA strengthened the ozone NAAQS again.", "The final ozone standards were released on October 1, 2015, and appeared in the Federal Register , October 26, 2015. Areas of the United States exceeding the new NAAQS were identified on May 1 and July 17, 2018. The standards have been challenged in court; the D.C. Circuit Court of Appeals heard oral argument in the case on December 18, 2018.", "The 2015 revision sets more stringent standards than the 2008 ozone NAAQS, lowering both the primary (health-based) and secondary (welfare-based) standards from 75 parts per billion (ppb)\u2014the level set in 2008\u2014to 70 ppb. EPA has identified 52 nonattainment areas with a combined population of 124 million, where air quality exceeds the 2015 NAAQS: 201 counties or partial counties in 22 states, the District of Columbia, and 2 tribal areas. EPA's analysis of the rule's potential effects\u2014undertaken when the rule was promulgated\u2014showed all but 14 of the nonattainment counties could reach attainment with a 70 ppb ozone NAAQS by 2025 as a result of already promulgated standards for power plants, motor vehicles, gasoline, and other emission sources. ", "EPA estimated the cost of meeting a 70 ppb ozone standard in all states except California at $1.4 billion annually in 2025. Because most areas in California would have until the 2030s to reach attainment, EPA provided separate cost estimates for California ($0.8 billion in 2038). These cost estimates are substantially less than widely circulated estimates from the National Association of Manufacturers (NAM) and other industry sources. (For a discussion of the differences, see CRS Report R43092, Implementing EPA's 2015 Ozone Air Quality Standards .)", "EPA faces a statutory deadline of October 2020 to complete a review of the ozone NAAQS and decide whether to modify or retain it. As previously noted, the agency announced plans to speed up the review process and declined to convene a scientific review panel specific to ozone. EPA is expected to grapple with issues raised during the 2015 ozone review, such as background ozone. In addition, EPA stated that it intends to seek CASAC advice regarding potential adverse effects from NAAQS compliance strategies."], "subsections": []}, {"section_title": "2020 Review of Particulate Matter NAAQS", "paragraphs": ["EPA completed its most recent review of the particulate matter NAAQS in late 2012 and promulgated revisions to strengthen the standards. During the 2012 particulate matter review, congressional deliberations focused on the regulatory costs associated with implementing more stringent standards as well as the potential impacts on economic growth, employment, and consumers. Some Members of Congress also raised concerns about potential impacts that more stringent particulate matter standards may have on industry and agricultural operations. For more information about the 2012 revision and related congressional deliberations, see CRS Report R42934, Air Quality: EPA's 2013 Changes to the Particulate Matter (PM) Standard .", "EPA initiated the current particulate matter review in 2014. In October 2018, EPA released a draft version of its ISA for Particulate Matter to CASAC for review and public comment. The ISA, which summarizes the scientific literature published since the last NAAQS review, serves as the scientific basis for reviewing the NAAQS. ", "The CASAC's review of the particulate matter ISA is ongoing. In April 2019, CASAC found that EPA's Draft ISA did \"not provide a sufficiently comprehensive, systematic assessment of the available science relevant to understanding the health impacts of exposure to particulate matter,\" and recommended \"substantial revisions\" to the Draft ISA. As previously noted, the CASAC also recommended that EPA reconvene a particulate matter review panel. EPA's response to these recommendations is not yet available. EPA stated that it intends to complete the particulate matter NAAQS review by December 2020."], "subsections": []}]}]}, {"section_title": "Other Issues", "paragraphs": ["Other issues are likely to arise as EPA continues to review CAA regulations. The agency is reviewing additional regulations, among them air toxics rules applicable to power plants, brick and ceramic kilns, and industrial sources of ethylene oxide as well as NSPS rules applicable to particulate matter from wood heaters. In addition, the Renewable Fuel Standard program may be of interest to Congress, in particular Renewable Fuel Standard management, the potential impacts such management could have on the associated stakeholders, and related biofuel matters. "], "subsections": [{"section_title": "Air Toxics Regulations", "paragraphs": ["The CAA directs EPA to promulgate emission standards for sources of the 187 hazardous air pollutants, informally referred as \"air toxics,\" that are listed in Section 112(b). In general, these standards, known as National Emission Standards for Hazardous Air Pollutants (NESHAPs), require major sources to meet numeric emission limits that have been achieved in practice by the best performing similar sources. These standards are generally referred to as Maximum Achievable Control Technology (MACT) standards. EPA is to \"review, and revise as necessary\" the emission standards promulgated under Section 112(d) at least every eight years. The remainder of this section highlights some of the air toxic standards that have garnered interest in the 116 th Congress. "], "subsections": [{"section_title": "Revision of Brick and Clay Standards", "paragraphs": ["EPA promulgated MACT standards for brick, structural clay, and ceramic clay kilns in 2015 that may garner interest in the 116 th Congress. The 2015 rulemaking established emission standards for mercury, particulate matter, acid gases, dioxins, and furans. EPA estimated the cost of the rule at $25 million annually, with monetized co-benefits three to eight times the cost. The Brick Industry Association called the proposal \"a much more reasonable rule than the one EPA first envisioned several years ago,\" but they and others have continued to express concerns regarding the cost and achievability of the standards. Environmental groups and an association of state air pollution officials are concerned for different reasons: in their view, EPA improperly set standards under a section of the CAA that allows an alternative to the MACT requirement that generally applies to hazardous air pollutant standards. After reviewing petitions filed by industry groups and environmental groups, the D.C. Circuit in 2018 ordered EPA to revise the 2015 standards but did not vacate them."], "subsections": []}, {"section_title": "Review of Ethylene Oxide Standards", "paragraphs": ["EPA's most recent National Air Toxics Assessment (NATA)\u2014published in August 2018\u2014concluded that ethylene oxide is carcinogenic to humans and that it \"significantly contributes to potential elevated cancer risks\" in some areas of the country. EPA subsequently announced it is \"addressing ethylene oxide\" based on the NATA results. EPA has begun to review the NESHAP for miscellaneous organic chemical manufacturing (\"MON\"), an industrial source category that includes facilities emitting ethylene oxide. EPA is under a court order to complete the MON NESHAP review by March 2020. ", "Additional NESHAP regulations apply to sources of ethylene oxide. EPA has stated that it will \"take a closer look\" at these NEHSAPs, starting with the commercial sterilizers source category.\" EPA reported that it anticipates proposing any necessary revisions for the commercial sterilizer NESHAP in mid-2019 and that it will publish schedules for other rules as they are determined. Regardless of the NATA findings on ethylene oxide, the CAA requires EPA to \"review, and revise as necessary\" the NESHAPs promulgated under CAA 112(d) at least every eight years. EPA has not met the statutory deadline for periodic reviews of various NESHAPs, including the MON NESHAP and the commercial sterilization NESHAP, which were both due in 2014.", "Legislative proposals introduced in the 116 th Congress would require EPA to update NESHAPs applicable to ethylene oxide. For example, S. 458 would, among other things, direct EPA to update the MON and commercial sterilization NESHAPs within 180 days. Similarly, H.R. 1152 would, among other things, require EPA to revise the MON and commercial sterilization NESHAPs within 180 days, and to base the revision on an EPA report, \"Evaluation of the Inhalation Carcinogenicity of Ethylene Oxide.\" "], "subsections": []}, {"section_title": "Mercury from Power Plants", "paragraphs": ["EPA is reviewing the benefit-cost analysis it prepared in 2011 for the Mercury and Air Toxics (MATS) rule, raising questions about whether the agency will take additional action on the rulemaking in 2019. Promulgated in February 2012, the MATS rule established MACT standards under Section 112 of the CAA to reduce mercury and acid gases from most existing coal- and oil-fired power plants. EPA's 2011 analysis estimated that the annual benefits of the MATS rule, including the avoidance of up to 11,000 premature deaths annually, would be between $37 billion and $90 billion. Virtually all of the avoided deaths and monetized benefits come from the rule's effect on emissions of particulates, rather than from identified effects of reducing mercury and air toxics exposure. Numerous parties petitioned the courts for review of the rule, contending in part that EPA had failed to conduct a benefit-cost analysis in its initial determination that control of air toxics from electric power plants was \"appropriate and necessary.\" In June 2015, the Supreme Court agreed with the petitioners, remanding the rule to the D.C. Circuit for further consideration. ", "EPA prepared a supplemental \"appropriate and necessary\" finding based on the agency's review of the 2012 rule's estimated costs in 2016. The 2016 supplemental finding concluded that it is appropriate and necessary to regulate air toxics, including mercury, from power plants after including a consideration of the costs. ", "As of this writing, the MATS rule remains in effect and litigation remains on hold, at the agency's request. In late 2018, however, EPA proposed to reverse the 2016 finding that it is appropriate and necessary to regulate air toxics under Section 112 (\"2018 A&N proposal\"). The proposal, even when finalized, would not revoke the mercury and acid gas emissions limits established in the 2012 MATS rule. That would require a separate regulatory action, which EPA has not proposed. ", "Some Members of Congress and various stakeholder groups have raised concerns about the 2018 A&N proposal and advised against further actions that would revoke the MATS standards. For example, a bipartisan group of U.S. Senators wrote to EPA to \"strongly oppose any action that could lead to the undoing\" of the 2012 MATS rule and requested the agency withdraw the 2018 A&N proposal. A group of power sector trade organizations\u2014representing all U.S. investor-owned electric companies, over 2,000 community-owned, not-for-profit electric utilities, over 900 not-for-profit electric utilities, and others\u2014wrote to \"urge that EPA leave the underlying MATS rule in place and effective\" and \"take no action that would jeopardize\" the industry's estimated $18 billion investment in the MATS rule. ", "Not all stakeholders have disagreed with the 2018 A&N proposal, however. Murray Energy Corporation, which describes itself as the largest privately owned U.S. coal company, testified that \"MATS should never have been adopted\" and \"urge[d] EPA to take the only reasonable action flowing from its repudiation of the legal basis for MATS, and rescind the [2012 MATS] rule immediately.\" ", "While it is unclear whether EPA will take additional action on the MATS standards, the 2018 A&N proposal reveals changes in EPA's interpretation of the CAA and use of benefit-cost analysis. EPA's analysis for the 2018 A&N proposal excludes co-benefits\u2014the human health benefits from reductions in pollutants not targeted by MATS\u2014from its consideration of whether MATS is \"appropriate and necessary\" under CAA Section 112(n). With this exclusion, the 2018 analysis finds that monetized costs outweigh monetized benefit estimates by several orders of magnitude. (For additional discussion, see CRS In Focus IF11078, EPA Reconsiders Basis for Mercury and Air Toxics Standards , by Kate C. Shouse.)"], "subsections": []}]}, {"section_title": "New Source Performance Standards for Wood Heaters", "paragraphs": ["In 2015, EPA published final emission standards for new residential wood heaters, including wood stoves, pellet stoves, hydronic heaters, and forced air furnaces. The 2015 wood heater regulations generated a substantial amount of interest, particularly in areas where wood is used as a heating fuel. House and Senate hearings in the 115 th Congress highlighted concerns about inadequate time to demonstrate compliance with emission standards by the 2020 deadline. Others have expressed concerns about the air quality impacts of delaying the 2020 deadline. On March 7, 2018, the House passed H.R. 1917 , which would have delayed implementation of the standards for three years. ", "More recently, EPA proposed to add a two-year \"sell-through\" period for new hydronic heaters and forced-air furnaces. Specifically, EPA's proposal would allow all affected new hydronic heaters and forced-air furnaces that are manufactured or imported before the May 2020 deadline to be sold at retail through May 2022. In addition, EPA published an advance notice of proposed rulemaking (ANPR) in late 2018 on new residential wood heaters, new residential hydronic heaters, and new residential air furnaces. The 2018 ANPR does not propose specific changes to the standards, but it requests comments on various regulatory issues \"in order to inform future rulemaking to improve these standards and related test methods.\" Citing stakeholder feedback about ways to improve implementation of the 2015 NSPS, EPA requested comment on 10 topics, including the cost and feasibility of meeting the emission limits that become effective in 2020, the timing of the 2020 compliance date, and test methods used for certification. (For additional information on the wood heater rule, see CRS Report R43489, EPA's Wood Stove / Wood Heater Regulations: Frequently Asked Questions , by James E. McCarthy and Kate C. Shouse.)"], "subsections": []}, {"section_title": "Renewable Fuel Standard", "paragraphs": ["The Renewable Fuel Standard (RFS) is a mandate that requires U.S. transportation fuel to contain a minimum volume of renewable fuel. The RFS is an amendment of the CAA, having been established by the Energy Policy Act of 2005 ( P.L. 109-58 ; EPAct05) and expanded in 2007 by the Energy Independence and Security Act ( P.L. 110-140 ; EISA). It is a volume mandate that increases annually, starting with 4 billion gallons in 2006 and ascending to 36 billion gallons in 2022, with the EPA determining the volume amounts post-2022. Renewable fuels that may be applied toward the mandate include transportation fuel, jet fuel, and heating oil. To be eligible as a renewable fuel under the RFS, fuels must meet certain environmental and biomass feedstock criteria. Thus far, the predominant fuel used to meet the mandate has been corn starch ethanol. ", "At issue for Congress are RFS management, the potential impacts such management could have on the associated stakeholders, and related biofuel matters. The topics of interest include small refinery exemptions under the RFS, the year-round sale of E15, RFS compliance and compliance costs, the RFS \"reset,\" and approval of advanced biofuel pathways for the RFS (e.g., renewable electricity). The associated stakeholders include renewable fuel producers, agricultural producers, the petroleum industry, and environmental organizations, among others. ", "One legislative proposal specific to the RFS has been introduced in the 116 th Congress\u2014 H.R. 104 , the Leave Ethanol Volumes at Existing Levels Act or LEVEL Act\u2014which would decrease the amount of biofuel that must be contained in gasoline and would eliminate the advanced biofuel portion of the mandate. Other legislation was introduced in the 115 th Congress and may be reintroduced in the 116 th Congress. (For further information, contact Kelsi Bracmort, Specialist in Natural Resources and Energy Policy, and see CRS Report R43325, The Renewable Fuel Standard (RFS): An Overview , by Kelsi Bracmort.)"], "subsections": []}]}]}}
{"id": "RS20348", "title": "Federal Funding Gaps: A Brief Overview", "released_date": "2019-02-04T00:00:00", "summary": ["The Antideficiency Act (31 U.S.C. 1341-1342, 1511-1519) generally bars the obligation of funds in the absence of appropriations. Exceptions are made under the act, including for activities involving \"the safety of human life or the protection of property.\" The interval during the fiscal year when appropriations for a particular project or activity are not enacted into law, either in the form of a regular appropriations act or a continuing resolution (CR), is referred to as a funding gap or funding lapse. Although funding gaps may occur at the start of the fiscal year, they may also occur any time a CR expires and another CR (or the regular appropriations bill) is not enacted immediately thereafter. Multiple funding gaps may occur within a fiscal year.", "When a funding gap occurs, federal agencies are generally required to begin a shutdown of the affected projects and activities, which includes the prompt furlough of non-excepted personnel. The general practice of the federal government after the shutdown has ended has been to retroactively pay furloughed employees for the time they missed, as well as employees who were required to come to work.", "Although a shutdown may be the result of a funding gap, the two events should be distinguished. This is because a funding gap may result in a total shutdown of all affected projects or activities in some instances but not others. For example, when funding gaps are of a short duration, agencies may not have enough time to complete a shutdown of affected projects and activities before funding is restored. In addition, the Office of Management and Budget has previously indicated that a shutdown of agency operations within the first day of the funding gap may be postponed if a resolution appears to be imminent.", "Since FY1977, 20 funding gaps occurred, ranging in duration from 1 day to 34 full days. These funding gaps are listed in Table 1. About half of these funding gaps were brief (i.e., three days or less in duration). Notably, many of the funding gaps do not appear to have resulted in a \"shutdown.\" Prior to the issuance of the opinions in 1980 and early 1981 by then-Attorney General Benjamin Civiletti, while agencies tended to curtail some operations in response to a funding gap, they often \"continued to operate during periods of expired funding.\" In addition, some of the funding gaps after the Civiletti opinions did not result in a completion of shutdown operations due to both the funding gap's short duration and an expectation that appropriations would soon be enacted. Some of the funding gaps during this period, however, did have a broader impact on affected government operations, even if only for a matter of hours.", "Two funding gaps occurred in FY1996, amounting to 5 days and 21 days. The chronology of regular and continuing appropriations enacted during FY1996 is illustrated in Figure 1.", "At the beginning of FY2014 (October 1, 2013), none of the regular appropriations bills had been enacted, so a government-wide funding gap occurred. It concluded on October 17, 2013, after lasting 16 full days.", "During FY2018, there was a funding gap when a CR covering all of the regular appropriations bills expired on January 19, 2018. It concluded on January 22, 2018, after lasting two full days.", "The most recent funding gap occurred during FY2019, when a CR covering federal agencies and activities funded in 7 of the 12 regular appropriations bills expired on December 21, 2018. It concluded on January 25, 2019, after lasting 34 full days.", "For a general discussion of federal government shutdowns, see CRS Report RL34680, Shutdown of the Federal Government: Causes, Processes, and Effects, coordinated by Clinton T. Brass."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["The routine activities of most federal agencies are funded annually by one or more of the regular appropriations acts. When action on the regular appropriations acts is delayed, a continuing appropriations act, also sometimes referred to as a continuing resolution or CR, may be used to provide interim budget authority.", "Since the federal fiscal year was shifted to October 1-September 30 beginning with FY1977, all of the regular appropriations acts have been enacted by the beginning of the fiscal year in only four instances (FY1977, FY1989, FY1995, and FY1997), although CRs were not needed for interim funding in one of these fiscal years. CRs were enacted for FY1977 but only to fund certain unauthorized programs whose funding had been excluded from the regular appropriations acts.", "The Antideficiency Act (31 U.S.C. 1341-1342, 1511-1519) generally bars the obligation or expenditure of federal funds in the absence of appropriations. The interval during a fiscal year when appropriations for a particular project or activity are not enacted into law, either in the form of a regular appropriations act or a CR, is referred to as a funding gap or funding lapse . Although funding gaps may occur at the start of the fiscal year, they may also occur any time a CR expires and another CR (or the relevant regular appropriations bill) is not enacted immediately thereafter. Multiple funding gaps may occur within a fiscal year.", "In 1980 and early 1981, then-Attorney General Benjamin Civiletti issued opinions in two letters to the President that have been put into effect through guidance provided to federal agencies under various Office of Management and Budget (OMB) circulars clarifying the limits of federal government activities upon the occurrence of a funding gap. ", "The Civiletti letters state that, in general, the Antideficiency Act requires that if Congress has enacted no appropriation beyond a specified period, the agency may make no contracts and obligate no further funds except as \"authorized by law.\" In addition, because no statute generally permits federal agencies to incur obligations without appropriations for the pay of employees, the Antideficiency Act does not, in general, authorize agencies to employ the services of their employees upon a lapse in appropriations, but it does permit agencies to fulfill certain legal obligations connected with the orderly termination of agency operations.", "The second letter, from January 1981, discusses the more complex problem of interpretation presented with respect to obligational authorities that are \"authorized by law\" but not manifested in appropriations acts. In a few cases, Congress has expressly authorized agencies to incur obligations without regard to available appropriations. More often, it is necessary to inquire under what circumstances statutes that vest particular functions in government agencies imply authority to create obligations for the accomplishment of those functions despite a lack of current appropriations. It is under this guidance that exceptions may be made for activities involving \"the safety of human life or the protection of property.\"", "As a consequence of these guidelines, when a funding gap occurs, executive agencies begin a shutdown of the affected projects and activities, including the furlough of non-excepted personnel. The general practice of the federal government after the shutdown has ended has been to retroactively pay furloughed employees for the time they missed, as well as employees who were required to come to work.", "Under current practice, although a shutdown may be the result of a funding gap, the two events should be distinguished. This is because a funding gap may result in a shutdown of all affected projects or activities in some instances but not in others. For example, when a funding gap is of a short duration, agencies may not have enough time to complete a shutdown of affected projects and activities before funding is restored. In addition, the Office of Management and Budget has previously indicated that a shutdown of agency operations within the first day of a funding gap may be postponed if it appears that an additional CR or regular appropriations act is likely to be enacted that same day.", "To avoid funding gaps, proposals have previously been offered to establish an \"automatic continuing resolution\" (ACR) that would provide a fallback source of funding authority for activities, at a specified formula or level, in the event that timely enactment of appropriations is disrupted. Funding would become available automatically and remain available as long as needed so that a funding gap would not occur. Although the House and Senate have considered ACR proposals in the past, none has been enacted into law on a permanent basis."], "subsections": []}, {"section_title": "Funding Gaps Since FY1977", "paragraphs": ["As illustrated in Table 1 , there have been 20 funding gaps since FY1977. The enactment of a CR on the day after the budget authority in the previous CR expired, which has occurred in several instances, is not counted in this report as involving a funding gap because there was no full day for which there was no available budget authority. For example, between FY2000 and FY2018, \"next-day\" CRs were enacted on 21 occasions.", "A majority of the funding gaps occurred between FY1977 and FY1995. During this period of 19 fiscal years, 15 funding gaps occurred.", "Multiple funding gaps have occurred during a single fiscal year in four instances: (1) three gaps covering a total of 28 days in FY1978, (2) two gaps covering a total of four days in FY1983, (3)\u00a0two gaps covering a total of three days in FY1985, and (4) two gaps covering a total of 26 days in FY1996.", "Seven of the funding gaps commenced with the beginning of the fiscal year on October 1. The remaining 13 funding gaps occurred at least more than one day after the fiscal year had begun. Ten of the funding gaps ended in October, four ended in November, three ended in December, and three ended in January.", "Funding gaps have ranged in duration from 1 to 34 full days. Six of the 8 lengthiest funding gaps, lasting between 8 days and 17 days, occurred between FY1977 and FY1980\u2014before the Civiletti opinions were issued and for which there was no government shutdown. Between 1980 and 1990, the duration of funding gaps was generally shorter, typically ranging from one day to three days. In most cases these occurred over a weekend with only limited impact in the form of government shutdown activities.", "Notably, many of the funding gaps that have occurred since FY1977 do not appear to have resulted in a \"shutdown.\" Prior to the issuance of the Civiletti opinions, the expectation was that agencies would not shut down during a funding gap. Continuing resolutions typically included language ratifying obligations incurred prior to the resolution's enactment. For example, the first CR for FY1980 provided", "All obligations incurred in anticipation of the appropriations and authority provided in this joint resolution are hereby ratified and confirmed if otherwise in accordance with the provisions of the joint resolution.", "Thus, while agencies tended to curtail some operations in response to a funding gap, they often \"continued to operate during periods of expired funding.\" In addition, some of the funding gaps after the Civiletti opinions did not result in a completion of shutdown operations due to both a funding gap's short duration and an expectation that appropriations would soon be enacted. For example, during the three-day FY1984 funding gap, \"no disruption to government services\" reportedly occurred, due to both the three-day holiday weekend and the expectation that the President would soon sign into law appropriations passed by the House and Senate during that weekend. ", "Some of the funding gaps during this period, however, did have a broader impact on affected government operations, even if only for a matter of hours. For example, in response to the one-day funding gap that occurred on October 4, 1984, a furlough of non-excepted personnel for part of that day was reportedly implemented. It should be noted that when most of these funding gaps occurred, one or more regular appropriations measures had been enacted, so any effects were not felt government-wide. For example, the three funding gaps in FY1978 were limited to activities funded in the Departments of Labor and Health, Education, and Welfare Appropriations Act. Similarly, 8 of 13 regular appropriations acts had been enacted prior to the three-day funding gap in FY1984.", "The most recent funding gaps\u2014two in FY1996, one in FY2014, one in FY2018, and one in FY2019\u2014all resulted in widespread cessation of non-excepted activities and furlough of associated personnel. The legislative history of these funding gaps are summarized below."], "subsections": [{"section_title": "FY1996", "paragraphs": ["The two FY1996 funding gaps occurred between November 13 and 19, 1995, and December 15, 1995, through January 6, 1996. The chronology of regular and continuing appropriations enacted during that fiscal year is illustrated in Figure 1 . In the lead-up to the first funding gap, only 3 out of the 13 regular appropriations acts had been signed into law, and budget authority, which had been provided by a CR since the start of the fiscal year, expired at the end of the day on November 13. On this same day, President Clinton vetoed a CR that would have extended budget authority through December 1, 1995, because of the Medicare premium increases contained within the measure. The ensuing funding gap reportedly resulted in the furlough of an estimated 800,000 federal workers. After five days, a deal was reached to end the shutdown and extend funding through December 15. Agencies that had been zeroed out in pending appropriations bills were funded at a rate of 75% of FY1995 budget authority. All other agencies were funded at the lower of the House- or Senate-passed level of funding contained in the FY1996 full-year appropriations bills. The CR also included an agreement between President Clinton and Congress regarding future negotiations to lower the budget deficit within seven years.", "During the first FY1996 funding gap and prior to the second one, an additional four regular appropriations measures were enacted, and three others were vetoed. The negotiations on the six remaining bills were unsuccessful before the budget authority provided in the CR expired at the end of the day on December 15, 1995. Reportedly, about 280,000 executive branch employees were furloughed during the funding gap between December 15, 1995, and January 6, 1996. A CR to provide benefits for veterans and welfare recipients and to keep the District of Columbia government operating was passed and signed into law on December 22, 1995. The shutdown officially ended on January 6, 1996, when the first of a series of CRs to reopen affected agencies and provide budget authority through January 26, 1996, was enacted."], "subsections": []}, {"section_title": "FY2014", "paragraphs": ["This funding gap commenced at the beginning of FY2014 on October 1, 2013. None of the 12 regular appropriations bills for FY2014 was enacted prior to the beginning of the funding gap. Nor had a CR to provide budget authority for the projects and activities covered by those 12 bills been enacted. On September 30, however, an ACR was enacted to cover FY2014 pay and allowances for (1) certain members of the Armed Forces, (2) certain Department of Defense (DOD) civilian personnel, and (3) other specified DOD and Department of Homeland Security contractors ( H.R. 3210 ; P.L. 113-39 , 113 th Congress).", "At the beginning of this 16-day funding gap, more than 800,000 executive branch employees were reportedly furloughed. This number was reduced during the course of the funding gap due to the implementation of P.L. 113-39 and other redeterminations of whether certain employees were excepted from furlough. Prior to the resolution of the funding gap, congressional action on appropriations was generally limited to a number of narrow CRs to provide funding for certain programs or classes of individuals. Of these, only the Department of Defense Survivor Benefits Continuing Appropriations Resolution of 2014 ( H.J.Res. 91 ; P.L. 113-44 ) was enacted into law. ", "On October 16, 2013, the Senate passed H.R. 2775 , which had been previously passed by the House on September 12, with an amendment. This amendment, in part, provided interim continuing appropriations for the previous year's programs and activities through January 15, 2014. Later that same day, the House agreed to the Senate amendment to H.R. 2775 . The CR was signed into law on October 17, 2013 ( P.L. 113-46 ), thus ending the funding gap."], "subsections": []}, {"section_title": "FY2018", "paragraphs": ["At the beginning of FY2018, none of the 12 regular appropriations bills had been enacted, so the federal government operated under a series of CRs. The first, P.L. 115-56 , provided government-wide funding through December 8, 2017. The second, P.L. 115-90 , extended funding through December 22, and the third, P.L. 115-96 , extended it through January 19, 2018. In the absence of agreement on legislation that would further extend the period of these CRs, however, a funding gap began with the expiration of P.L. 115-96 at midnight on January 19. A furlough of federal personnel began over the weekend and continued through Monday of the next week, ending with enactment of a fourth CR, P.L. 115-120 , on January 22."], "subsections": []}, {"section_title": "FY2019", "paragraphs": ["At the beginning of FY2019, 5 of the 12 regular appropriations bills had been enacted in two consolidated appropriations bills. The remaining seven regular appropriations bills were funded under two CRs. The first CR, P.L. 115-245 , provided funding through December 7, 2018. The second CR, P.L. 115-298 , extended funding through December 21, 2018. When no agreement was reached on legislation to further extend the period of these CRs, a funding gap began with the expiration of P.L. 115-298 at midnight on December 21, 2018. Because of this funding gap, federal agencies and activities funded in these seven regular appropriations bills were required to shut down.", "The funding gap ended when a CR, P.L. 116-5 , was signed into law on January 25, 2019, which ended the partial government shutdown and allowed government departments and agencies to reopen. The funding gap lasted 34 full days."], "subsections": []}]}]}}
{"id": "RL33546", "title": "Jordan: Background and U.S. Relations", "released_date": "2019-04-09T00:00:00", "summary": ["The Hashemite Kingdom of Jordan is considered a key U.S. partner in the Middle East. Although the United States and Jordan have never been linked by a formal treaty, they have cooperated on a number of regional and international issues over the years. Jordan's strategic importance to the United States is evident given ongoing instability in neighboring Syria and Iraq, Jordan's 1994 peace treaty with Israel, and uncertainty over the trajectory of Palestinian politics. Jordan also is a longtime U.S. partner in global counterterrorism operations. U.S.-Jordanian military, intelligence, and diplomatic cooperation seeks to empower political moderates, reduce sectarian conflict, and eliminate terrorist threats.", "U.S. officials frequently express their support for Jordan. U.S. support, in particular, has helped Jordan address serious vulnerabilities, both internal and external. Jordan's small size and lack of major economic resources have made it dependent on aid from Western and various Arab sources. President Trump has acknowledged Jordan's role as a key U.S. partner in countering the Islamic State, as many U.S. policymakers advocate for continued robust U.S. assistance to the kingdom.", "Annual aid to Jordan has nearly quadrupled in historical terms over the last 15 years. The United States has provided economic and military aid to Jordan since 1951 and 1957, respectively. Total bilateral U.S. aid (overseen by the Departments of State and Defense) to Jordan through FY2017 amounted to approximately $20.4 billion. Jordan also hosts over 2,000 U.S. troops.", "Public dissatisfaction with the economy is a pressing concern for the monarchy. In 2018, widespread protests erupted throughout the kingdom in opposition to a draft tax bill and price hikes on fuel and electricity. Though peaceful, the protests drew immediate international attention because of their scale. Since then, the government has frozen or softened the proposed fiscal measures, but also has continued to work with the International Monetary Fund (IMF) on fiscal reforms to address a public debt that has ballooned to 96.4% of Gross Domestic Product (GDP).", "As the Trump Administration has enacted changes to long-standing U.S. policies on Israel and the Palestinians, which the Palestinians have criticized as unfairly punitive and biased toward Israel, Jordan has found itself in a difficult political position. While King Abdullah II seeks to maintain strong relations with the United States, he rules over a country where the issue of Palestinian rights resonates with much of the population; more than half of all Jordanian citizens originate from either the West Bank or the area now comprising the state of Israel. In trying to balance U.S.-Jordanian relations with Palestinian concerns, King Abdullah II has refrained from directly criticizing the Trump Administration on its recent moves, while urging the international community to return to the goal of a two-state solution that would ultimately lead to an independent Palestinian state with East Jerusalem as its capital.", "The 116th Congress may consider legislation pertaining to U.S. relations with Jordan. On February 18, 2016, President Obama signed the United States-Jordan Defense Cooperation Act of 2015 (P.L. 114-123), which authorizes expedited review and an increased value threshold for proposed arms sales to Jordan for a period of three years. It amended the Arms Export Control Act to give Jordan temporarily the same preferential treatment U.S. law bestows upon NATO members and Australia, Israel, Japan, New Zealand, and South Korea. S. 28, the United States-Jordan Defense Cooperation Extension Act, would reauthorize the United States-Jordan Defense Cooperation Act (22 U.S.C. 275) through December 31, 2022."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview and Recent Developments", "paragraphs": ["Since assuming the throne from his late father on February 7, 1999, Jordan's 57-year-old monarch King Abdullah II bin Al Hussein (hereinafter King Abdullah II) has maintained Jordan's stability and strong ties to the United States. ", "Although commentators frequently caution that Jordan's stability is fragile, the monarchy has remained resilient owing to a number of factors. These include a strong sense of social cohesion, strong support for the government from both Western powers and the Gulf Arab monarchies, and an internal security apparatus that is highly capable and, according to human rights groups, uses vague and broad criminal provisions in the legal system to dissuade dissent.", "Despite this resilience, Jordanians are becoming increasingly restless over economic conditions, corruption, and lack of political reform. In 2018, real GDP growth was 2.8%, while unemployment stood at 18.5%, and was likely much higher among young workers. Publicized allegations of high-level corruption include cases against several private- and public-sector elites for conspiring to illegally manufacture cigarettes. Weekly protests have been recurring in Amman, though they have not been as large as summer 2018 protests over tax hikes. Additionally, many Jordanians have turned to social media to express their dissatisfaction with the status quo; the kingdom has one of the highest worldwide rates of social media usage among emerging economies. According to one former high-ranking Jordanian official, \"Loyalty is overwhelming in Jordan but that doesn't mean there are no pockets here and there that are against even the monarchy. And they are negligible, yes, but through social media they will have a ... big voice.\"", "King Abdullah II and his government have developed a multifaceted approach for responding to public discontent. In recent months, the king has made several public appearances without a security detail, probably in an effort to increase his visibility and interaction with the population. After prominent people criticized the response to corruption concerns, Jordan decided to televise the trial of those accused in the cigarette scandal mentioned above\u2014a rarity in Jordan's justice system. The government also has withdrawn controversial amendments to the 2015 cybercrime law. According to Jordanian activists and international nongovernmental organizations, the amendments would have seriously curtailed freedom of expression online.", "Jordan may be addressing public discontent and bolstering nationalist sentiment at home by stoking tensions with Israel in support of the Palestinian cause. In late 2018, the king announced (via Twitter) that his government would not renew a provision in its 1994 peace treaty with Israel that allowed Israel access to the Jordanian territories of Baqoura and Al Ghumar, which are agricultural areas in northern and southern Jordan, respectively. According to one Jordanian commentator, \"Domestically, the King's decision is a much-needed shot in the arm for the government at a time when it is facing public pressure over its unpopular economic policies.\"", "Several months later, Jordan expanded the membership of the Islamic Waqf Council (Islamic custodial trust), which Jordan appoints to oversee the administration of Jerusalem's Temple Mount (known by Muslims as the Haram al Sharif or Noble Sanctuary) and its holy sites. The Islamic Waqf Council, which had been made up of 11 individuals with close ties to the monarchy, was expanded to 18, including several officials from the Palestinian Authority. The newly expanded council immediately defied a 16-year Israeli ban on Muslim worship at the Bab al Rahma building on the Temple Mount. Israel responded by arresting worshippers and activists while also temporarily banning several leaders of the council from accessing the Temple Mount. In March 2019, King Abdullah II spoke in the industrial city of Zarqa, where he stated, \"To me, Jerusalem is a red line, and all my people are with me.... No one can pressure Jordan on this matter, and the answer will be no. All Jordanians stand with me on Jerusalem.\"", "These types of steps for appeasing an increasingly restive public arguably are vital for the government of Jordan, which has limited financial options for addressing discontent. Although the government has continued to work with the International Monetary Fund (IMF) on fiscal reforms, public debt has ballooned to 95% of Gross Domestic Product (GDP), and most of the government's budget is dedicated to salaries, pensions, and debt servicing, leaving few additional options to fund public sector job programs. King Abdullah II recently traveled to the United Kingdom, where UK officials pledged to partially guarantee a $1.9 billion World Bank loan to Jordan. In summer 2018, Gulf countries pledged $2.5 billion to Jordan in combined grants and loans. "], "subsections": []}, {"section_title": "Country Background", "paragraphs": ["Although the United States and Jordan have never been linked by a formal treaty, they have cooperated on a number of regional and international issues for decades. Jordan's small size and lack of major economic resources have made it dependent on aid from Western and various Arab sources. U.S. support, in particular, has helped Jordan deal with serious vulnerabilities, both internal and external. Jordan's geographic position, wedged between Israel, Syria, Iraq, and Saudi Arabia, has made it vulnerable to the strategic designs of its powerful neighbors, but has also given Jordan an important role as a buffer between these countries in their largely adversarial relations with one another. ", "Jordan, created by colonial powers after World War I, initially consisted of desert or semidesert territory east of the Jordan River, inhabited largely by people of Bedouin tribal background. The establishment of the state of Israel in 1948 brought large numbers of Palestinian refugees to Jordan, which subsequently unilaterally annexed a Palestinian enclave west of the Jordan River known as the West Bank. The original \"East Bank\" Jordanians, though probably no longer a majority in Jordan, remain predominant in the country's political and military establishments and form the bedrock of support for the Jordanian monarchy. Jordanians of Palestinian origin comprise an estimated 55% to 70% of the population and generally tend to gravitate toward the private sector due to their alleged general exclusion from certain public-sector and military positions."], "subsections": [{"section_title": "The Hashemite Royal Family", "paragraphs": ["Jordan is a hereditary constitutional monarchy under the prestigious Hashemite family, which claims descent from the Prophet Muhammad. King Abdullah II (age 57) has ruled the country since 1999, when he succeeded to the throne upon the death of his father, the late King Hussein, after a 47-year reign. Educated largely in Britain and the United States, King Abdullah II had earlier pursued a military career, ultimately serving as commander of Jordan's Special Operations Forces with the rank of major general. The king's son, Prince Hussein bin Abdullah (born in 1994), is the designated crown prince.", "The king appoints a prime minister to head the government and the Council of Ministers (cabinet). On average, Jordanian governments last no more than 15 months before they are dissolved by royal decree. The king also appoints all judges and is commander of the armed forces."], "subsections": []}, {"section_title": "Political System and Key Institutions", "paragraphs": ["The Jordanian constitution, most recently amended in 2016, gives the king broad executive powers. The king appoints the prime minister and may dismiss him or accept his resignation. He also has the sole power to appoint the crown prince, senior military leaders, justices of the constitutional court, and all 75 members of the senate, as well as cabinet ministers. The constitution enables the king to dissolve both houses of parliament and postpone lower house elections for two years. The king can circumvent parliament through a constitutional mechanism that allows provisional legislation to be issued by the cabinet when parliament is not sitting or has been dissolved. The king also must approve laws before they can take effect, although a two-thirds majority of both houses of parliament can modify legislation. The king also can issue royal decrees, which are not subject to parliamentary scrutiny. The king commands the armed forces, declares war, and ratifies treaties. Finally, Article 195 of the Jordanian Penal Code prohibits insulting the dignity of the king (l\u00e8se-majest\u00e9), with criminal penalties of one to three years in prison.", "Jordan's constitution provides for an independent judiciary. According to Article 97, \"Judges are independent, and in the exercise of their judicial functions they are subject to no authority other than that of the law.\" Jordan has three main types of courts: civil courts, special courts (some of which are military/state security courts), and religious courts. In Jordan, state security courts administered by military (and civilian) judges handle criminal cases involving espionage, bribery of public officials, trafficking in narcotics or weapons, black marketeering, and \"security offenses.\" The king may appoint and dismiss judges by decree, though in practice a palace-appointed Higher Judicial Council manages court appointments, promotions, transfers, and retirements.", "Although King Abdullah II in 2013 laid out a vision of Jordan's gradual transition from a constitutional monarchy into a full-fledged parliamentary democracy, in reality, successive Jordanian parliaments have mostly complied with the policies laid out by the Royal Court. The legislative branch's independence has been curtailed not only by a legal system that rests authority largely in the hands of the monarch, but also by electoral laws designed to produce propalace majorities with each new election. Due to frequent gerrymandering in which electoral districts arguably are drawn to favor more rural progovernment constituencies over densely populated urban areas, parliamentary elections have produced large progovernment majorities dominated by representatives of prominent tribal families. In addition, voter turnout tends to be much higher in progovernment areas since many East Bank Jordanians depend on family/tribal connections as a means to access patronage jobs."], "subsections": []}]}, {"section_title": "The Economy", "paragraphs": ["With few natural resources and a small industrial base, Jordan has an economy that depends heavily on external aid, tourism, expatriate worker remittances, and the service sector. Among the long-standing problems Jordan faces are poverty, corruption, slow economic growth, and high levels of unemployment. The government is by far the largest employer, with between one-third and two-thirds of all workers on the state's payroll. These public sector jobs, along with government-subsidized food and fuel, have long been part of the Jordanian government's \"social contract\" with its citizens.", "In the past decade, this arrangement between state and citizen has become more strained. When oil prices skyrocketed between 2007 and 2008, the government had to increase its borrowing in order to continue fuel subsidies. The 2008 global financial crisis was another shock to Jordan's economic system, as it depressed worker remittances from expatriates. The unrest that spread across the region in 2011 further exacerbated Jordan's economic woes, as the influx of hundreds of thousands of Syrian refugees increased demand for state services and resources. Moreover, tourist activity, trade, and foreign investment decreased in Jordan after 2011 due to regional instability. ", "Finally, Jordan, like many other countries, has experienced uneven economic growth, with higher growth in the urban core of the capital Amman and stagnation in the historically poorer and more rural areas of southern Jordan. According to the Economist Intelligence Unit , Amman is the most expensive Arab city and the 25 th -most expensive city to live in globally.", "Popular economic grievances have spurred the most vociferous protests in Jordan. Youth unemployment is high, as it is elsewhere in the Middle East, and providing better economic opportunities for young Jordanians outside of Amman is a major challenge. Large-scale agriculture is not sustainable because of water shortages, so government officials are generally left providing young workers with low-wage, relatively unproductive civil service jobs. How the Jordanian education system and economy can respond to the needs of its youth has been and will continue to be one of the defining domestic challenges for the kingdom in the years ahead. "], "subsections": [{"section_title": "2018 Public Protests and International Response", "paragraphs": ["Over the past year, Jordan's efforts to cut spending and raise revenue have faced significant public resistance. In 2016, the IMF and Jordan reached a three-year, $723 million extended fund facility (EFF) agreement that commits Jordan to improving the business environment for the private sector, reducing budget expenditures, and reforming the tax code. As a result, in 2017 Jordan enacted a Value Added Tax (VAT) on common goods to raise revenue in line with IMF-mandated reforms. ", "To comply further with IMF-mandated reforms, the Jordanian government drafted a new tax bill to increase personal income taxes and thus raise government revenue and ease the public debt burden. The draft tax bill would have lowered the minimum taxable income level in order to expand the tax base from 4.5% of workers to 10%. It also would have raised corporate taxes on banks and reclassified tax evasion as a felony rather than a misdemeanor.", "In late May 2018, as the bill drew closer to passage and after an IMF team visited Jordan to review its economic reform plan, demonstrations began across the country. On May 30, Jordanian unions and professional associations held a massive general strike against the tax bill and were joined by many younger protesters who denounced recent price hikes on fuel and electricity. Days later, King Abdullah II ordered the government to freeze a 5.5% increase in the price of fuel and a 19% increase in electricity prices. For days, protests continued throughout the country, with some protesters calling for parliament to be dissolved and the political system to be reformed. ", "On June 4, Prime Minister Hani Mulki resigned, and King Abdullah II appointed Education Minister and former World Bank economist Omar Razzaz as prime minister. A change in prime minister is considered fairly routine in Jordanian politics, and protesters decried it as an insufficient response to their demands. Large-scale demonstrations continued for two more days, and on June 7 the government announced that it was withdrawing the bill from immediate consideration and sending it back to parliament for revision. ", "On June 11, Kuwait, the United Arab Emirates, and Saudi Arabia held a summit in Mecca, Saudi Arabia, where they collectively pledged $2.5 billion for Jordan. The aid included a $1 billion deposit at the Central Bank of Jordan. The IMF supported the Jordanian government's decision to revise the tax bill, noting that fiscal reforms should not come at the expense of political stability. ", "This was not the first time that the Jordanian monarchy backtracked on reforms in the face of public pressure. In 1989, 1996, and 2012, Jordanian monarchs responded to mass demonstrations with limited political reforms (new elections and electoral laws, constitutional amendments, anticorruption measures) that did not fundamentally alter the political system. In times of crisis, the government often appeals for Jordanian unity, while calling the opposition divisive or even disloyal. King Abdullah II's turn toward the Gulf for a financial bailout also has precedents. In 2012, at the height of unrest in the Middle East, the Gulf Cooperation Council countries pledged $5 billion to Jordan. ", "In fall 2018, the Jordanian government proposed a new draft tax bill which raises personal and family exemptions for the poorest citizens. The Gulf monarchies also followed through with their $2.5 billion pledge to Jordan, providing (as mentioned above) $1 billion in central bank deposits, $600 million in loan guarantees, $750 million in direct budgetary support (spread over five years), and $150 million for school construction. In December 2018, parliament approved final modifications to the law, and personal income tax rates were adjusted to ensure that the poorest taxpayers were not adversely affected.", "Beyond the Gulf Arab monarchies, the international community also has increased efforts to boost economic growth in Jordan. In February 2019, the United Kingdom hosted an international donor's conference for Jordan, referred to as The London Initiative 2019. At the conference, donors (UK, France, Japan, and the European Investment Bank) pledged $2.6 billion to Jordan spread over several years. At the conference, the World Bank also announced that pending final approval, it intended to provide $1.9 billion in concessional loans to Jordan over the next two years. "], "subsections": []}]}, {"section_title": "Syrian Refugees in Jordan", "paragraphs": ["Since 2011, the influx of Syrian refugees has placed tremendous strain on Jordan's government and local economies, especially in the northern governorates of Mafraq, Irbid, Ar Ramtha, and Zarqa. Due to Jordan's low population, it has one of the highest per capita refugee rates in the world. As of March 2019, the United Nations High Commissioner for Refugees (UNHCR) estimates that there are 670,238 registered Syrian refugees in Jordan; 83% of all Syrian refugees live in urban areas, while the remaining 17% live in three camps\u2014Azraq, Zaatari, and the Emirati Jordanian Camp (Mrajeeb al Fhood). ", "Another 41,000 refugees are stranded in the desert along the northeastern Jordanian area bordering Syria and Iraq, known as Rukban. Though most of the refugees stranded at Rukban are women and children, a June 2016 IS terrorist attack near the border led Jordanian authorities to close the area, and access to Rukban is sporadic. In 2018, Syrian government forces reestablished control of southern Syria and often have prevented U.N. food shipments from reaching Rukban. Rukban is located within a 35-mile, U.S.-established \"de-confliction zone\" surrounding U.S. forces based at the At Tanf garrison near the Syrian-Iraqi-Jordanian triborder area.", "In recent months, Syrian and Russian reports have accused the United States of using refugees stranded at Rukban as \"human shields\" to protect the U.S. garrison at At Tanf from being attacked. In response, the U.S. Department of Defense issued a statement in March 2019, saying \"Despite Syrian and Russian propaganda to the contrary, the United States is not restricting the movement of IDPs into or out of the camp at Rukban. The United States fully supports a process to allow IDPs freedom of movement that is free from coercion and allows for safe, voluntary, and dignified departures for those wishing to leave Rukban.\" According to the United Nations: ", "Discussions are ongoing with the main parties involved, including the Government of Syria, the Russian Federation, the United States and the Government of Jordan to further clarify the process and to address the concerns that have been raised by people in Rukban. The United Nations continues to reiterate the importance of a carefully planned, principled approach that ensures respect for core protection standards and does not expose vulnerable, and in many cases traumatized, displaced people to additional harm. All movements must be voluntary, safe, well-informed and dignified, with humanitarian access assured throughout. In parallel, the United Nations also continues to strongly advocate for additional humanitarian assistance for those who remain in Rukban. "], "subsections": [{"section_title": "Water Scarcity and Israeli-Jordanian-Palestinian Water Deal", "paragraphs": ["Jordan is among the most water-poor nations in the world and ranks among the 10 countries with the lowest rate of renewable fresh water per capita. According to the Jordan Water Project at Stanford University, Jordan's increase in water scarcity over the last 60 years is attributable to an approximate 5.5-fold population increase since 1962, a decrease in the flow of the Yarmouk River due to the building of dams upstream in Syria, gradual declines in rainfall by an average of 0.4 mm/year since 1995, and depleting groundwater resources due to overuse. The illegal construction of thousands of private wells also has led to unsustainable groundwater extraction. The large influx of Syrian refugees has heightened water demand in the north and, according to USAID, \"many communities in Jordan have long experienced tensions over water scarcity even before the arrival of 657,433 registered Syrian refugees in the last five years.\"", "To secure new sources of fresh water, Jordan has pursued water cooperative projects with its neighbors. On December 9, 2013, Israel, Jordan, and the Palestinian Authority signed a regional water agreement (officially known as the Memorandum of Understanding on the Red-Dead Sea Conveyance Project, see Figure 5 ) to pave the way for the Red-Dead Canal, a multibillion-dollar project to address declining water levels in the Dead Sea. The agreement was essentially a commitment to a water swap, whereby half of the water pumped from the Red Sea is to be desalinated in a plant to be constructed in Aqaba, Jordan. Some of this water is to then be used in southern Jordan. The rest is to be sold to Israel for use in the Negev Desert. In return, Israel is to sell fresh water from the Sea of Galilee to northern Jordan and sell the Palestinian Authority discounted fresh water produced by existing Israeli desalination plants on the Mediterranean. The other half of the water pumped from the Red Sea (or possibly the leftover brine from desalination) is to be channeled to the Dead Sea. The exact allocations of swapped water were not part of the 2013 MOU and were left to future negotiations. ", "In 2017, with Trump Administration officials seemingly committed to reviving the moribund Israeli-Palestinian peace process, U.S. officials focused on finalizing the terms of the 2013 MOU. In July 2017, the White House announced that U.S. Special Representative for International Negotiations Jason Greenblatt had \"successfully supported the Israeli and Palestinian efforts to bridge the gaps and reach an agreement,\" with the Israeli government agreeing to sell the Palestinian Authority (PA) 32 million cubic meters (MCM) of fresh water. ", "However, one 2018 report indicated that some Israeli officials may have had misgivings about the project and were seeking to pull out of the deal. According to one unnamed U.S. official cited by the report, \"The United States told Israel that the U.S. supports the project and expects Israel to live up to its obligations under the Red-Dead agreement or find a suitable alternative that is acceptable to Israel and Jordan.\" In January 2019, Israel's Minister for Regional Cooperation Tzachi Hanegbi told Bloomberg News that he expects the Israeli cabinet to approve the Red Sea-Dead Sea project and that Israel and Jordan will each pledge $40 million per year to the project for 25 years.", "Congress has supported the Red-Dead Sea Conveyance Project. P.L. 114-113 , the FY2016 Omnibus Appropriations Act, specifies that $100 million in Economic Support Funds (ESF) be set aside for water sector support for Jordan, to support the Red Sea-Dead Sea water project. In September 2016, USAID notified Congress that it intended to spend $100 million in FY2016 ESF-Overseas Contingency Operations (OCO) assistance on Phase One of the project."], "subsections": []}]}, {"section_title": "U.S. Relations", "paragraphs": ["U.S. officials frequently express their support for Jordan. President Trump has acknowledged Jordan's role as a key U.S. partner in countering the Islamic State, as many U.S. policymakers advocate for continued robust U.S. assistance to the kingdom. Annual aid to Jordan has nearly quadrupled in historical terms over the last 15 years. Jordan also hosts U.S. troops. According to President Trump's December 2018 War Powers Resolution Report to Congress, \"At the request of the Government of Jordan, approximately 2,795 United States military personnel are deployed to Jordan to support Defeat-ISIS operations, enhance Jordan's security, and promote regional stability.\"", "The Trump Administration has enacted changes to long-standing U.S. policies on Israel and the Palestinians, which Palestinians have criticized as unfairly punitive and biased toward Israel, and Jordan has found itself in a difficult political position. While King Abdullah II seeks to maintain strong relations with the United States, the issue of Palestinian rights resonates with much of the Jordanian population; more than half of all Jordanian citizens originate from either the West Bank or the area now comprising the state of Israel. In trying to balance U.S.-Jordanian relations with concern for Palestinian rights, King Abdullah II has refrained from directly criticizing the Trump Administration, while urging the international community to return to the goal of a two-state solution that would ultimately lead to an independent Palestinian state with East Jerusalem as its capital."], "subsections": []}, {"section_title": "U.S. Foreign Assistance to Jordan", "paragraphs": ["The United States has provided economic and military aid to Jordan since 1951 and 1957, respectively. Total bilateral U.S. aid (overseen by the Departments of State and Defense) to Jordan through FY2017 amounted to approximately $20.4 billion. Jordan also has received hundreds of millions in additional military aid since FY2014 channeled through the Defense Department's various security assistance accounts. Currently, Jordan is the third-largest recipient of annual U.S. foreign aid globally, after Afghanistan and Israel."], "subsections": [{"section_title": "U.S.-Jordanian Agreement on Foreign Assistance", "paragraphs": ["On February 14, 2018, the United States and Jordan signed a new Memorandum of Understanding (or MOU) on U.S. foreign assistance to Jordan. The MOU, the third such agreement between the United and Jordan, commits the United States to provide $1.275 billion per year in bilateral foreign assistance over a five-year period for a total of $6.375 billion (FY2018-FY2022). This latest MOU represents a 27% increase in the U.S. commitment to Jordan above the previous iteration and is the first five-year MOU with the kingdom. The previous two MOU agreements had been in effect for three years."], "subsections": []}, {"section_title": "Economic Assistance", "paragraphs": ["The United States provides economic aid to Jordan for (1) budgetary support (cash transfer), (2) USAID programs in Jordan, and (3) loan guarantees. The cash transfer portion of U.S. economic assistance to Jordan is the largest amount of budget support given to any U.S. foreign aid recipient worldwide. In November 2018, USAID notified Congress that it intended to obligate a record $745 million in FY2018 ESF (base and OCO) for a cash transfer to Jordan. U.S. cash assistance is provided in order to help the kingdom with foreign debt payments, Syrian refugee support, and fuel import costs (Jordan is almost entirely reliant on imports for its domestic energy needs). According to USAID, ESF cash transfer funds are deposited in a single tranche into a U.S.-domiciled interest-bearing account and are not commingled with other funds. ", "USAID programs in Jordan focus on a variety of sectors including democracy assistance, water conservation, and education (particularly building and renovating public schools). In the democracy sector, U.S. assistance has supported capacity-building programs for the parliament's support offices, the Jordanian Judicial Council, the Judicial Institute, and the Ministry of Justice. The International Republican Institute and the National Democratic Institute also have received U.S. grants to train, among other groups, the Jordanian Independent Election Commission (IEC), Jordanian political parties, and members of parliament. In the water sector, the bulk of U.S. economic assistance is devoted to optimizing the management of scarce water resources. As mentioned above, Jordan is one of the most water-deprived countries in the world. USAID subsidizes several waste treatment and water distribution projects in the Jordanian cities of Amman, Mafraq, Aqaba, and Irbid.", "U.S. Sovereign Loan Guarantees (or LGs) allow recipient governments (in this case Jordan) to issue debt securities that are fully guaranteed by the United States government in capital markets, effectively subsidizing the cost for governments of accessing financing. Since 2013, Congress has authorized LGs for Jordan and appropriated $413 million in ESF (the \"subsidy cost\") to support three separate tranches, enabling Jordan to borrow a total of $3.75 billion at concessional lending rates. "], "subsections": []}, {"section_title": "Humanitarian Assistance for Syrian Refugees in Jordan", "paragraphs": ["The U.S. State Department estimates that, since large-scale U.S. aid to Syrian refugees began in FY2012, it has allocated more than $1.3 billion in humanitarian assistance from global accounts for programs in Jordan to meet the needs of Syrian refugees and, indirectly, to ease the burden on Jordan. According to the State Department, U.S. humanitarian assistance is provided both as cash assistance to refugees and through programs to meet their basic needs, such as child health care, education, water, and sanitation. According to USAID, U.S. humanitarian assistance funds are enabling UNICEF to provide health assistance for around 40,000 Syrians sheltering at the informal Rukban and Hadalat settlements along the Syria-Jordan border berm, including water trucking, the rehabilitation of a water borehole, and installation of a water treatment unit in Hadalat. "], "subsections": []}, {"section_title": "Military Assistance", "paragraphs": ["U.S.-Jordanian military cooperation is a key component in bilateral relations. U.S. military assistance is primarily directed toward enabling the Jordanian military to procure and maintain U.S.-origin conventional weapons systems. According to the State Department, Jordan receives one of the largest allocations of International Military Education and Training (IMET) funding worldwide, and IMET graduates in Jordan include \"King Abdullah II, the Chairman of the Joint Chiefs of Staff, the Vice Chairman, the Air Force commander, the Special Forces commander, and numerous other commanders.\""], "subsections": [{"section_title": "Foreign Military Financing (FMF) and DOD Security Assistance", "paragraphs": ["FMF overseen by the State Department is designed to support the Jordanian armed forces' multiyear (usually five-year) procurement plans, while DOD-administered security assistance supports ad hoc defense systems to respond to immediate threats and other contingencies. FMF may be used to purchase new equipment (e.g., precision-guided munitions, night vision) or to sustain previous acquisitions (e.g., Blackhawk helicopters, AT-802 fixed-wing aircraft). FMF grants have enabled the Royal Jordanian Air Force to procure munitions for its F-16 fighter aircraft and a fleet of 28 UH-60 Blackhawk helicopters. ", "As a result of the Syrian civil war and U.S. Operation Inherent Resolve against the Islamic State, the United States has increased military aid to Jordan and channeled these increases through DOD-managed accounts. Although Jordan still receives the bulk of U.S. military aid through the FMF account, Congress has authorized defense appropriations to strengthen Jordan's border security. Since FY2015, total DOD security cooperation funding for Jordan has amounted to $887.7 million. "], "subsections": []}, {"section_title": "Excess Defense Articles", "paragraphs": ["In 1996, the United States granted Jordan Major Non-NATO Ally (MNNA) status, a designation that, among other things, makes Jordan eligible to receive excess U.S. defense articles, training, and loans of equipment for cooperative research and development. In the last five years, excess U.S. defense articles provided to Jordan include two C-130 aircraft, HAWK MEI-23E missiles, and cargo trucks."], "subsections": []}]}]}]}}
{"id": "R45122", "title": "Afghanistan: Background and U.S. Policy In Brief", "released_date": "2019-05-01T00:00:00", "summary": ["Afghanistan has been a central U.S. foreign policy concern since 2001, when the United States, in response to the terrorist attacks of September 11, 2001, led a military campaign against Al Qaeda and the Taliban government that harbored and supported it. In the intervening 17 years, the United States has suffered around 2,400 fatalities in Afghanistan (including seven in 2019 to date) and Congress has appropriated approximately $133 billion for reconstruction there. In that time, an elected Afghan government has replaced the Taliban, and nearly every measure of human development has improved, although future prospects of those measures remain mixed. The fundamental objective of U.S. efforts in Afghanistan is \"preventing any further attacks on the United States by terrorists enjoying safe haven or support in Afghanistan.\"", "In early 2019, U.S. military engagement in Afghanistan appears closer to ending than perhaps ever before as U.S. officials negotiate directly with Taliban interlocutors on the issues of counterterrorism and the presence of U.S. troops. However, U.S. negotiators caution that talks are still at a preliminary stage, and Afghan government representatives have not been directly involved. Lead U.S. negotiator Zalmay Khalilzad insists that the United States seeks a comprehensive peace agreement but some worry that the United States will prioritize a military withdrawal over a complex political settlement that preserves some of the social, political, and humanitarian gains made since 2001. It remains unclear what kind of political arrangement could satisfy both Kabul and the Taliban to the extent that the latter fully abandons armed struggle.", "Press reports in December 2018 and early 2019 indicate that the Trump Administration may be considering withdrawing some U.S. forces, though U.S. officials maintain that no policy decision has been made to reduce U.S. force levels. Many observers assess that a full-scale U.S. withdrawal would lead to the collapse of the Afghan government and perhaps even the reestablishment of Taliban control. By many measures, the Taliban are in a stronger military position now than at any point since 2001, though at least some once-public metrics related to the conduct of the war have been classified or are no longer produced (including district-level territorial and population control assessments, as of the April 30, 2019, quarterly report from the Special Inspector General for Afghanistan Reconstruction). Underlying the negotiations is the unsettled state of Afghan politics, which is a major complicating factor: Afghanistan held inconclusive parliamentary elections in October 2018 and the all-important presidential election, originally slated for April 2019, has been postponed twice and is now scheduled for September 2019.", "For background information and analysis on the history of congressional engagement with Afghanistan and U.S. policy there, as well as a summary of recent Afghanistan-related legislative proposals, see CRS Report R45329, Afghanistan: Legislation in the 115th Congress, by Clayton Thomas."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The U.S. and Afghan governments, along with partner countries, remain engaged in combat with a robust Taliban-led insurgency. W hile U.S. military officials maintain that Afghan forces are \"resilient\" against the Taliban, by some measures insurgents are in control of or contesting more territory today than at any point since 2001. The conflict also involves an array of other armed groups, including active affiliates of both Al Qaeda (AQ) and the Islamic State (IS, also known as ISIS, ISIL, or by the Arabic acronym Da'esh ). Since early 2015, the NATO-led mission in Afghanistan, known as \"Resolute Support Mission\" (RSM), has focused on training, advising, and assisting Afghan government forces; combat operations by U.S. counterterrorism forces, along with some partner forces, also continue. These two \"complementary missions\" make up Operation Freedom's Sentinel (OFS).", "Simultaneously, the United States is engaged in an aggressive diplomatic effort to end the war, most notably through direct talks with Taliban representatives (a dramatic reversal of U.S. policy). A draft framework, in which the Taliban would prohibit terrorist groups from operating on Afghan soil in return for the eventual withdrawal of U.S. forces, was reached between U.S. and Taliban negotiators in January 2019, though lead U.S. negotiator Zalmay Khalilzad insists that \"nothing is agreed until everything is agreed.\" Negotiations do not, as of May 2019, directly involve representatives of the Afghan government, leading some to worry that the United States will prioritize a military withdrawal over a complex political settlement that preserves some of the social, political, and humanitarian gains made since 2001. ", "Underlying the negotiations is the unsettled state of Afghan politics, which is a major complicating factor: Afghanistan held inconclusive parliamentary elections in October 2018 and the all-important presidential election, originally scheduled for April 2019, has now been postponed twice until September 2019. The Afghan government has made some progress in reducing corruption and implementing its budgetary commitments, but faces domestic criticism for its failure to guarantee security and prevent insurgent gains.", "The United States has contributed approximately $133 billion in various forms of aid to Afghanistan over the past decade and a half, from building up and sustaining the Afghan National Defense and Security Forces (ANDSF) to economic development. This assistance has increased Afghan government capacity, but prospects for stability in Afghanistan appear distant. Some U.S. policymakers still hope that the country's largely underdeveloped natural resources and/or geographic position at the crossroads of future global trade routes might improve the economic life of the country, and, by extension, its social and political dynamics as well. Nevertheless, Afghanistan's economic and political outlook remains uncertain, if not negative, in light of ongoing hostilities. "], "subsections": []}, {"section_title": "U.S.-Taliban Negotiations", "paragraphs": ["In August 2017, President Trump announced what he termed a new South Asia strategy in a nationally-televised address. Many Afghan and U.S. observers interpreted the speech and the policies it promised (expanded targeting authorities for U.S. forces, greater pressure on Pakistan, a modest increase in the number of U.S. and international troops) as a sign of renewed U.S. commitment. However, after less than a year of continued military stalemate, the Trump Administration in July 2018 reportedly ordered the start of direct talks with the Taliban that did not include the Afghan government. This represented a dramatic reversal of U.S. policy, which had previously been to support an \"Afghan-led, Afghan-owned\" peace process. ", "In September 2018, Secretary of State Mike Pompeo appointed former U.S. Ambassador to Afghanistan Zalmay Khalilzad to the newly-created post of Special Representative for Afghanistan Reconciliation; Khalilzad has since met several times with Taliban representatives in Doha, Qatar (where the group maintains a political office). He has also had consultations with the Afghan, Pakistani, and other regional governments. ", "After a six-day series of negotiations in Doha in late January 2019, Khalilzad stated that, \"The Taliban have committed, to our satisfaction, to do what is necessary that would prevent Afghanistan from ever becoming a platform for international terrorist groups or individuals,\" in return for which U.S. forces would eventually fully withdraw from the country. Khalilzad later cautioned that \"we made significant progress on two vital issues: counter terrorism and troop withdrawal. That doesn't mean we're done. We're not even finished with these issues yet, and there is still work to be done on other vital issues like intra-Afghan dialogue and a complete ceasefire.\" After a longer series of talks that ended on March 12, 2019, Khalilzad announced that an agreement \"in draft\" had been reached on counterterrorism assurances and U.S. troop withdrawal. He noted that after the agreement is finalized, \"the Taliban and other Afghans, including the government, will begin intra-Afghan negotiations on a political settlement and comprehensive ceasefire.\"", "The Taliban have long refused to negotiate with representatives of the Afghan government, which they characterize as a corrupt and illegitimate puppet of foreign powers, and Kabul is not directly involved in the ongoing U.S.-Taliban negotiations. Some observers have criticized that arrangement; former U.S. Ambassador to Afghanistan Ryan Crocker argued that by not insisting on the inclusion of the Afghan government in these negotiations \"we have ourselves delegitimized the government we claim to support,\" and advocated that the U.S. halt talks until the Taliban agree to include the Afghan government. ", "Afghan President Ashraf Ghani has promised that his government will not accept any settlement that limits Afghans' rights. In a January 2019 televised address, he further warned that any agreement to withdraw U.S. forces that did not include Kabul's participation could lead to \"catastrophe,\" pointing to the 1990s-era civil strife following the fall of the Soviet-backed government that led to the rise of the Taliban. President Ghani's concern about being excluded from the talks surfaced in mid-March when his national security advisor accused Khalilzad of \"delegitimizing the Afghan government and weakening it,\" and harboring political ambitions within Afghanistan, leading to a shark rebuke from the State Department. According to a former State Department official, \"The real issue is not the personality of an American diplomat; the real issue is a policy divergence.\"", "It remains unclear what kind of political arrangement could satisfy both Kabul and the Taliban to the extent that the latter fully abandons armed struggle in pursuit of its goals. The Taliban have recently given some more conciliatory signs, with one spokesman saying the group is \"not seeking a monopoly on power.\" Still, many Afghans, especially women, who remember Taliban rule and oppose the group's tactics and beliefs, remain wary. "], "subsections": []}, {"section_title": "Afghan Political Situation", "paragraphs": ["The unsettled state of Afghan politics is a major complicating factor for current negotiations. The leadership partnership (referred to as the national unity government) between President Ashraf Ghani and Chief Executive Officer (CEO) Abdullah Abdullah, which was brokered by the United States in the wake of the disputed 2014 election, has encountered challenges but remains intact. However, a trend in Afghan society and governance that worries some observers is increasing political fragmentation along ethnic lines. Such fractures have long existed in Afghanistan but were relatively muted during Hamid Karzai's presidency. These divisions are sometimes seen as a driving force behind some of the political upheavals that have challenged Ghani's government. ", "Afghanistan held parliamentary elections in October 2018 that were marred by logistical, administrative, and security problems; results are still, as of May 2019, incomplete, though the new parliament was inaugurated in April 2019. The all-important presidential election, originally scheduled for April 2019, has now been postponed twice, until September 2019. It is unclear to what extent, if any, those delays are related to ongoing U.S.-Taliban talks. U.S. officials have denied that the establishment of an interim government is part of their negotiations with the Taliban, but some observers speculate that such an arrangement (which Ghani has rejected) might be necessary to accommodate the reentry of Taliban figures into public life and facilitate the establishment of a new political system, which a putative settlement might require. "], "subsections": []}, {"section_title": "Military and Security Situation", "paragraphs": ["Since early 2015, the NATO-led mission in Afghanistan of 17,000 troops, known as \"Resolute Support Mission\" (RSM), has focused on training, advising, and assisting Afghan government forces. Combat operations by U.S. forces also continue and have increased in number since 2017. These two \"complementary missions\" comprise Operation Freedom's Sentinel (OFS). There are around 14,000 U.S. troops in Afghanistan, of which approximately 8,500 are part of RSM. The remaining 8,400 troops of RSM come from 38 partner countries. ", "Since at least early 2017, U.S. military officials have publicly stated that the conflict is \"largely stalemated.\" Arguably complicating that assessment, the extent of territory controlled or contested by the Taliban has steadily grown in recent years by most measures (see Figure 1 ). In its January 30, 2019, report, the Special Inspector General for Afghanistan Reconstruction (SIGAR) reported that the share of districts under government control or influence fell to 53.8%, as of October 2018. This figure, which marks a slight decline from previous reports, is the lowest recorded by SIGAR since tracking began in November 2015; 12% of districts are under insurgent control or influence, with the remaining 34% contested. ", "According to SIGAR's April 30, 2019, quarterly report, the U.S. military is \"no longer producing its district-level stability assessments of Afghan government and insurgent control and influence.\" This information, which was in every previous SIGAR quarterly report going back to January 2016, estimated the extent of Taliban control and influence in terms of both territory and population, and was accompanied by charts portraying those trends over time along with a color-coded map of control/influence by district (see Figure 2 ). SIGAR reports that it was told by the U.S. military that the assessment is no longer being produced because it \"was of limited decision-making value to the [U.S.] Commander.\"", "While the Taliban retain the ability to conduct high-profile urban attacks, they also demonstrate considerable tactical capabilities. Reports indicate that ANDSF fatalities have averaged 30-40 a day in recent months, and President Ghani stated in January 2019 that over 45,000 security personnel had paid \"the ultimate sacrifice\" since he took office in September 2014. Insider attacks on U.S. and coalition forces by Afghan nationals are a sporadic, but persistent, problem\u2014several U.S. servicemen died in such attacks in 2018, as did 85 Afghan soldiers. In October 2018, General Miller was present at an attack inside the Kandahar governor's compound by a Taliban infiltrator who killed a number of provincial officials, including the powerful police chief Abdul Raziq; Miller was unhurt but another U.S. general was wounded. ", "Beyond the Taliban, a significant share of U.S. operations are aimed at the local Islamic State affiliate, known as Islamic State-Khorasan Province (ISKP, also known as ISIS-K), although there is debate over the degree of threat the group poses. ISKP and Taliban forces have sometimes fought over control of territory or because of political or other differences. U.S. officials are reportedly tracking attempts by IS fighters fleeing Iraq and Syria to enter Afghanistan, which may represent a more permissive operating environment. ISKP also has claimed responsibility for a number of large-scale attacks, many targeting Afghanistan's Shia minority. The UN reports that Al Qaeda, while degraded in Afghanistan and facing competition from ISKP, \"remains a longer-term threat.\""], "subsections": [{"section_title": "ANDSF Development and Deployment", "paragraphs": ["The effectiveness of the ANDSF is key to the security of Afghanistan. As of March 2019, SIGAR reports that Congress has appropriated at least $83.3 billion for Afghan security since 2002. Since 2014, the United States generally has provided around 75% of the estimated $5-6 billion a year to fund the ANDSF, with the balance coming from U.S. partners ($1 billion annually) and the Afghan government ($500 million).", "Concerns about the ANDSF raised by SIGAR, the Department of Defense, and others include ", "absenteeism, the fact that about 35% of the force does not reenlist each year, and the potential for rapid recruitment to dilute the force's quality; widespread illiteracy within the force; credible allegations of child sexual abuse and other potential human rights abuses; and casualty rates often described as unsustainable.", "Key metrics related to ANDSF performance, including casualties, attrition rates, and personnel strength, were classified by U.S. Forces-Afghanistan (USFOR-A) starting with the October 2017 SIGAR quarterly report, citing a request from the Afghan government. Although SIGAR had previously published those metrics as part of its quarterly reports, they remain withheld. In both legislation and public statements, some Members have expressed concern over the decline in the types and amount of information provided by the executive branch."], "subsections": []}, {"section_title": "U.S. Troop Levels and Authorities", "paragraphs": ["At a February 2017 Senate Armed Services Committee hearing, then-mission commander of Resolute Support Mission General Nicholson indicated that the United States had a \"shortfall of a few thousand\" troops that, if filled, could help break the \"stalemate.\" In June 2017, President Trump delegated to then-Secretary Mattis the authority to set force levels, reportedly limited to around 3,500 additional troops, in June 2017; Secretary Mattis signed orders to deploy them in September 2017. Those additional forces put the total number of U.S. troops in the country at around 14,000. ", "Some reports in late 2018 and early 2019 indicate that President Trump may be contemplating ordering the withdrawal of some U.S. forces from Afghanistan. Still, U.S. officials maintain that no policy decision has been made to reduce U.S. force levels. During a visit to Kabul on February 11, 2019, Acting Secretary of Defense Patrick Shanahan stated \"I have not been directed to step down our forces in Afghanistan.\" Also in February 2019, the Senate passed S. 1 , which includes language (Section 408) warning against a \"precipitous withdrawal\" of U.S. forces from Afghanistan and Syria.", "Additionally, U.S. forces now have broader authority to operate independently of Afghan forces and \"attack the enemy across the breadth and depth of the battle space,\" expanding the list of targets to include those related to \"revenue streams, support infrastructure, training bases, infiltration lanes.\" This was demonstrated in a series of operations, beginning in the fall of 2017, against Taliban drug labs. These operations, often highlighted by U.S. officials, sought to degrade what is widely viewed as one of the Taliban's most important sources of revenue, namely the cultivation, production, and trafficking of narcotics. Some have questioned the impact of that campaign, which came to an end in late 2018. In November 2018, the United Nations reported that the total area used for poppy cultivation in 2018 was 263,000 hectares, the second-highest level recorded since monitoring began in 1994. "], "subsections": []}]}, {"section_title": "Regional Dynamics: Pakistan and Other Neighbors", "paragraphs": ["Regional dynamics, and the involvement of outside powers, are central to the conflict in Afghanistan. The neighboring state widely considered most important in this regard is Pakistan, which has played an active, and by many accounts negative, role in Afghan affairs for decades. President Trump has directly accused Pakistan of \"housing the very terrorists that we are fighting.\" Afghan leaders, along with U.S. military commanders, attribute much of the insurgency's power and longevity either directly or indirectly to Pakistan. Experts debate the extent to which Pakistan is committed to Afghan stability or is attempting to exert control in Afghanistan through ties to insurgent groups, most notably the Haqqani Network, a U.S.-designated Foreign Terrorist Organization (FTO) that has become an official, semiautonomous component of the Taliban. U.S. officials have repeatedly identified militant safe havens in Pakistan as a threat to security in Afghanistan, though some observers question the validity of that charge in light of the Taliban's increased territorial control within Afghanistan itself. ", "Pakistan may view a weak and destabilized Afghanistan as preferable to a strong, unified Afghan state (particularly one led by a Pashtun-dominated government in Kabul; Pakistan has a large and restive Pashtun minority). However, at least some Pakistani leaders have stated that instability in Afghanistan could rebound to Pakistan's detriment; Pakistan has struggled with indigenous Islamist militants of its own. Afghanistan-Pakistan relations are further complicated by the large Afghan refugee population in Pakistan and a long-standing border dispute over which violence has broken out on several occasions. Pakistan sees Afghanistan as potentially providing strategic depth against India, but may also anticipate that improved relations with Afghanistan's leadership could limit India's influence in Afghanistan. Indian interest in Afghanistan stems largely from India's broader regional rivalry with Pakistan, which impedes Indian efforts to establish stronger and more direct commercial and political relations with Central Asia.", "In his August 2017 speech, President Trump announced what he characterized as a new approach to Pakistan, saying, \"We can no longer be silent about Pakistan's safe havens for terrorist organizations, the Taliban, and other groups that pose a threat to the region and beyond.\" He also, however, praised Pakistan as a \"valued partner,\" citing the close U.S.-Pakistani military relationship. In January 2018, the Trump Administration announced plans to suspend security assistance to Pakistan, a decision that has affected billions of dollars in aid. In February 2019, CENTCOM Commander General Joseph Votel stated, \"Pakistan has not taken concrete actions against the safe havens of violent extremist organizations inside its borders,\" but praised Pakistan for some \"positive steps\" in assisting Special Representative Khalilzad's reconciliation efforts.", "Afghanistan largely maintains cordial ties with its other neighbors, including the post-Soviet states of Central Asia, though some warn that rising instability in Afghanistan may complicate those relations. In the past two years, multiple U.S. commanders have warned of increased levels of assistance, and perhaps even material support, for the Taliban from Russia and Iran, both of which cite IS presence in Afghanistan to justify their activities. \u00a0Both nations were opposed to the Taliban government of the late 1990s, but reportedly see the Taliban as a useful point of leverage vis-a-vis the United States. Afghanistan may also represent a growing priority for China in the context of broader Chinese aspirations in Asia and globally. ", "President Trump mentioned neither Iran nor Russia in his August 2017 speech, and it is unclear how, if at all, the U.S. approach to them might have changed as part of the new strategy.\u00a0Afghanistan may also represent a growing priority for China in the context of broader Chinese aspirations in Asia and globally. In his speech, President Trump did encourage India to play a greater role in Afghan economic development; this, along with other Administration messaging, has compounded Pakistani concerns over Indian activity in Afghanistan. India has been the largest regional contributor to Afghan reconstruction, but New Delhi has not shown an inclination to pursue a deeper defense relationship with Kabul. "], "subsections": []}, {"section_title": "Economy and U.S. Aid", "paragraphs": ["Economic development is pivotal to Afghanistan's long-term stability, though indicators of future growth are mixed. Decades of war have stunted the development of most domestic industries, including mining. The economy has also been hurt by a steep decrease in the amount of aid provided by international donors. Afghanistan's Gross Domestic Product (GDP) has grown an average of 7% per year since 2003, but growth slowed to 2% in 2013 due to aid cutbacks and political uncertainty about the post-2014 security situation. Since 2015, Afghanistan has experienced a \"slight recovery\" with growth of between 2% and 3% in 2016 and 2017, though the increase in the poverty rate (55% living below the national poverty line in 2016-2017 compared to 38% in 2012-2013) complicates that picture. A severe drought affecting northern and western Afghanistan has compounded economic and humanitarian challenges. Social conditions in Afghanistan remain equally mixed. On issues ranging from human trafficking to religious freedom to women's rights, Afghanistan has, by all accounts, made significant progress since 2001, but future prospects in these areas remain uncertain. ", "Congress has appropriated more than $132 billion in aid for Afghanistan since FY2002, with about 63% for security and 28% for development (and the remainder for civilian operations and humanitarian aid). The Administration's FY2020 budget requests $4.8 billion for the ANDSF, $400 million in Economic Support Funds, and smaller amounts to help the Afghan government with tasks like combating narcotics trafficking. This is down slightly from both the FY2019 request as well as the FY2018 enacted level of about $5.5 billion in total funding for Afghanistan (down from nearly $17 billion in FY2010). These figures do not include the cost of U.S. combat operations (including related regional support activities), which was estimated at a total of $745 billion since FY2001 as of December 2018, according to the DOD's quarterly Cost of War report, with approximately $45 billion requested for each of FY2018 and FY2019. In its FY2020 budget request, the Pentagon identified $18.6 billion in direct war costs in Afghanistan and $35.3 billion in \"enduring theater requirements and related missions,\" though it is unclear how much of this latter figure is for Afghanistan versus other theaters."], "subsections": []}, {"section_title": "Outlook", "paragraphs": ["Insurgent and terrorist groups have demonstrated considerable capabilities in 2018 and 2019, throwing into sharp relief the daunting security challenges that the Afghan government and its U.S. and international partners face. At the same time, hopes for a negotiated settlement have risen, inspired by developments such as the June 2018 nationwide cease-fire and, more importantly, direct U.S.-Taliban talks, though the prospects for such negotiations to deliver a settlement are uncertain. ", "U.S. policy has sought to force the Taliban to negotiate with the Afghan government by compelling the group to conclude that continued military struggle is futile in light of combined U.S., NATO, and ANDSF capabilities. It is still unclear, however, how the Taliban perceives its fortunes; given the group's recent battlefield gains, one observer has said that \"the group has little reason to commit to a peace process: it is on a winning streak.\" ", "Observers differ on whether the Taliban pose an existential threat to the Afghan government, given the current military balance. That dynamic could change if the United States alters the level or nature of its troop deployments in Afghanistan or funding for the ANDSF. President Ghani has said, \"[W]e will not be able to support our army for six months without U.S. [financial] support.\" Notwithstanding direct U.S. support, Afghan political dynamics, particularly the willingness of political actors to directly challenge the legitimacy and authority of the central government, even by extralegal means, may pose a serious threat to Afghan stability in 2019 and beyond, regardless of Taliban military capabilities.", "A potential collapse of the Afghan military and/or the government that commands it could have significant implications for the United States, particularly given the nature of negotiated security arrangements. Regardless of how likely the Taliban would be to gain full control over all, or even most, of the country, the breakdown of social order and the fracturing of the country into fiefdoms controlled by paramilitary commanders and their respective militias may be plausible, even probable. Afghanistan experienced a similar situation nearly thirty years ago. Though Soviet troops withdrew from Afghanistan by February 1989, Soviet aid continued, sustaining the communist government in Kabul for nearly three years. However, the dissolution of the Soviet Union in December 1991 ended that aid, and a coalition of mujahedin forces overturned the government in April 1992. Almost immediately, mujahedin commanders turned against each other, leading to a complex civil war during which the Taliban was founded, grew, and took control of most of the country, eventually offering sanctuary to Al Qaeda. While the Taliban and Al Qaeda are still \"closely allied\" according to the UN, Taliban forces have clashed repeatedly with the Afghan Islamic State affiliate. Under a more unstable future scenario, alliances and relationships among extremist groups could evolve or security conditions could change, offering new opportunities to transnational terrorist groups whether directly or by default.", "After more than 17 years of war, Members of Congress and other U.S. policymakers may reassess notions of what \"victory\" in Afghanistan looks like, examining the array of potential outcomes, how these outcomes might harm or benefit U.S. interests, and the relative levels of U.S. engagement and investment required to attain them. The present condition, which is essentially a stalemate that has existed for several years, could persist; some argue that the United States \"has the capacity to sustain its commitment to Afghanistan for some time to come\" at current levels. Others counter that \"the threat in Afghanistan doesn't warrant a continued U.S. military presence and the associated costs\u2014which are not inconsequential.\"", "The Trump Administration has described U.S. policy in Afghanistan as \"grounded in the fundamental objective of preventing any further attacks on the United States by terrorists enjoying safe haven or support in Afghanistan.\" For years, some analysts have challenged that line of reasoning, describing it as a strategic \"myth\" and arguing that \"the safe haven fallacy is an argument for endless war based on unwarranted worst-case scenario assumptions.\" Some of these analysts and others dismiss what they see as a disproportionate focus on the military effort, citing evidence that \"the terror threat to Americans remains low\" to argue that \"a strategy that emphasizes military power will continue to fail.\" As many have observed, increased political instability, fueled by questions about the central government's authority and competence and rising ethnic tensions, may pose as serious a threat to Afghanistan as the Taliban does. ", "In light of these internal political dynamics, Members of Congress may examine how the United States can leverage its assets, influence, and experience in Afghanistan, as well as those of Afghanistan's neighbors and international organizations, to encourage more equal, inclusive, and effective governance. Congress could also seek to help shape the U.S. approach to potential negotiations around amending the constitution or otherwise altering the highly centralized Afghan political system, e.g., through legislation and public statements. Core issues for Congress include its role in authorizing, appropriating funds for, and overseeing U.S. military activities, aid, and regional policy implementation."], "subsections": []}]}}
{"id": "R41136", "title": "Cyprus: Reunification Proving Elusive", "released_date": "2019-04-15T00:00:00", "summary": ["Four months into 2019, unification talks intended to end the division of Cyprus after 55 years as a politically separated nation and 45 years as a physically divided country have remained suspended since July 2017. Attempts by the United Nations to find common ground between the two Cypriot communities to resume the negotiations have not been successful. The talks have fallen victim to the realities of five decades of separation and both sides' inability to make the necessary concessions to reach a final settlement. As a result, the long-sought bizonal, bicommunal, federal solution for the island has remained elusive and may no longer be attainable.", "Cyprus negotiations typically exhibit periodic levels of optimism, quickly tempered by the political reality that difficult times between Greek and Turkish Cypriots always lay ahead. In June 2018, in an attempt to jump-start the talks, U.N. Secretary-General Antonio Guterres appointed Jane Holl Lute as his new adviser for Cyprus. Her mission was to consult with the two Cypriot leaders, Nicos Anastasiades and Mustafa Akinci, and the three guarantor parties (Greece, Turkey, and Great Britain) to determine if sufficient conditions existed to resume U.N.-hosted negotiations and, if so, to prepare a comprehensive \"terms of reference\" document by the end of 2018. This document was supposed to include a version of a 2017 \"framework\" proposed by Guterres, previous \"convergences\" both sides had reportedly reached on many issues, and a proposed road map for how the negotiations would proceed.", "Lute conducted her first consultations in September 2018 and a second round in October. Although the talks reportedly were \"productive,\" they did not result in an agreement to resume the talks and Lute announced she would have to return to the island in early 2019, reaffirming the difficulty many thought she would encounter in trying to reach agreement on the provisions of the \"terms of reference.\" Lute's initial return in January 2019 was short and inconclusive.", "Subsequently, Lute returned to meet with Anastasiades and Akinci on April 7. What Lute apparently found was that both sides were seemingly farther apart. Aside from the long-standing disagreement on security guarantees, a big sticking point was Akinci's insistence that the Turkish Cypriots have political equality, demanding that on all issues taken up at any new federal level, a positive Turkish Cypriot vote would be necessary. Anastasiades expressed a willingness to discuss Akinci's proposal for some issues but rejected the demand claiming, it would give the Turkish Cypriots an absolute veto over all policy issues, potentially resulting in gridlock. At the same time, Anastasiades resurrected an old proposal that the new government be a cross between a presidential system, in which the president would be a Greek Cypriot, and a parliamentary system in which a prime minister would rotate between the two communities. Akinci rejected this proposal, claiming it reinforced his view that the Greek Cypriots will always see the Turkish Cypriots as a minority and not a coequal partner.", "Lute's fourth attempt failed to achieve an agreement between the two Cypriot leaders on how to restart the talks and suggested that negotiations were likely to remain suspended indefinitely.", "The United States historically has held an \"honest broker\" approach to achieving a just, equitable, and lasting settlement of the Cyprus issue. However, some observers have seen recent actions within Congress and the Administration in support of Cyprus's unfettered energy development in the Eastern Mediterranean and lifting of restrictions on arms sales to Cyprus as an admission by the United States that an equitable solution has become more difficult. These policy directions also suggest that U.S. interests in the Eastern Mediterranean have moved on to security and energy concerns for which closer relations with the Republic of Cyprus have become a higher priority.", "This report provides an overview of the negotiations' history and a description of some of the issues involved in those talks."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background1", "paragraphs": ["The Republic of Cyprus gained its independence from Great Britain in 1960. At the time, the population living on the island was approximately 77% Greek ethnic origin and roughly 18% Turkish ethnic origin. (This figure has changed over the years, as an influx of mainland Turks have settled in the north.) Maronite Christians, Armenians, and others constituted the remainder. At independence, the republic's constitution defined elaborate power-sharing arrangements between the two main Cypriot groups. It required a Greek Cypriot president and a Turkish Cypriot vice president, each elected by his own community. Simultaneously, a Treaty of Guarantee signed by Britain, Greece, and Turkey ensured the new republic's territorial integrity, and a Treaty of Alliance between the republic, Greece, and Turkey provided for Greek and Turkish soldiers to help defend the island. However, at that time, the two major communities aspired to different futures for Cyprus: most Greek Cypriots favored union of the entire island with Greece ( enosis ), whereas Turkish Cypriots preferred to partition the island ( taksim ) and possibly unite the Turkish Cypriot zone with Turkey.", "Cyprus's success as a new, stable republic lasted from 1960 to 1963. In 1963, after President (and Greek Orthodox Archbishop) Makarios III proposed constitutional modifications that favored the majority Greek Cypriot community, relations between the two communities deteriorated, with Turkish Cypriots increasingly consolidating into enclaves in larger towns, mostly in the north of the island, for safety. In 1964, Turkish Cypriots withdrew from most national institutions and began to administer their own affairs. Intercommunal violence began to increase between 1963 and 1964 and continued to escalate in the ensuing years. Outside mediation and pressure, including by the United States, appeared to prevent Turkey from intervening militarily on behalf of the Turkish Cypriots. On March 4, 1964, the United Nations Security Council authorized the establishment of the United Nations Peacekeeping Force in Cyprus (UNFICYP) to control the violence and act as a buffer between the two communities. UNFICYP became operational on March 27, 1964, and still carries out its mission today.", "In 1974, a military junta in power in Athens supported a coup against President Makarios, replacing him with a more hard-line supporter of enosis . In July 1974, Turkey, citing the 1960 Treaty of Guarantee as a legal basis for its move to defend the Turkish Cypriots, deployed military forces to the island in two separate actions. By August 25, 1974, Turkey had taken control of more than one-third of the island. This military intervention had many ramifications. Foremost was the physical separation of the island; widespread dislocation of both the Greek and the Turkish Cypriot populations and related governance, refugee, and property problems; and what the Greek Cypriots refer to as the continued occupation of the island.", "After the conflict subsided and a fragile peace took root, Turkish Cypriots pursued a solution to the conflict that would keep the two communities separate in two states under the government of either a confederation or a stronger central federal government. In February 1975, the Turkish Cypriots declared their government the Turkish Federated State of Cyprus (TFSC). In 1983, Turkish Cypriot leader Rauf Denktash declared the Turkish Republic of Northern Cyprus (TRNC)\u2014a move considered by some to be a unilateral declaration of independence. At the time, Denktash argued that creation of an independent state was a necessary precondition for a federation with the Greek Cypriots. However, he ruled out a merger with Turkey and pledged cooperation with U.N.-brokered settlement efforts. Thirty-five years later, only Turkey has recognized the TRNC.", "Between 1974 and 2002, there were numerous, unsuccessful rounds of U.N.-sponsored direct and indirect negotiations to achieve a settlement. Negotiations focused on reconciling the two sides' interests and reestablishing a central government. They foundered on definitions of goals and ways to implement a federal solution. Turkish Cypriots emphasized bizonality and the political equality of the two communities, preferring two nearly autonomous societies with limited contact. Greek Cypriots emphasized the freedoms of movement, property, and settlement throughout the island. The two parties also differed on the means of achieving a federation: Greek Cypriots wanted their internationally recognized national government to devolve power to the Turkish Cypriots, who would then rejoin a Cypriot republic. For the Turkish Cypriots, two entities would join, for the first time, in a new federation. These differences in views also affected the resolution of issues such as property claims, citizenship of mainland Turks who had settled on the island, and other legal issues. These differences in views continue to plague the negotiations today."], "subsections": [{"section_title": "Annan Plan", "paragraphs": ["Negotiations for a final solution to the Cyprus issue appeared to take a dramatic and positive step forward when on November 11, 2002, then-U.N. Secretary-General Kofi Annan presented a draft of \"The Basis for Agreement on a Comprehensive Settlement of the Cyprus Problem,\" commonly referred to as the Annan Plan. The plan called for, among many provisions, a \"common state\" government with a single international legal personality that would participate in foreign and European Union relations. Two politically equal component states would address much of the daily responsibilities of government in their respective communities. The Annan Plan was a comprehensive approach and, of necessity, addressed highly controversial issues for both sides. ", "Over the course of the following 16 months, difficult negotiations ensued. Turkish Cypriot leader Denktash was replaced as chief negotiator by a more prosettlement figure, newly elected \"prime minister\" Mehmet Ali Talat. Republic of Cyprus President Glafkos Clerides was replaced through an election with, according to some observers, a more skeptical president, Tassos Papadopoulos. The Annan Plan itself was revised several times in an attempt to reach compromises demanded by both sides. Complicating the matter even more, on April 16, 2003, the Republic of Cyprus signed an accession treaty with the European Union (EU) to become a member of the EU on May 1, 2004, whether or not there was a settlement and a reunited Cyprus. ", "Finally, after numerous meetings and negotiations, and despite a lack of a firm agreement but sensing that further negotiations would produce little else, on March 29, 2004, Secretary-General Annan released his \"final revised plan\" and announced that the plan would be put to referenda simultaneously in both north and south Cyprus on April 24, 2004. The Turkish Cypriot leadership split, with Denktash urging rejection and Talat urging support. Greek Cypriot President Papadopoulos, to the dismay of the U.N., EU, and United States, but for reasons he argued were legitimate concerns of the Greek Cypriot community, urged the Greek Cypriots to reject the referenda. On April 24, what remaining hope existed for a solution to the crisis on Cyprus was dashed as 76% of Greek Cypriot voters rejected the plan, while 65% of Turkish Cypriot voters accepted it. In his May 28, 2004, report following the vote, Annan said that \"the Greek Cypriots' vote must be respected, but they need to demonstrate willingness to resolve the Cyprus problem through a bicommunal, bizonal federation and to articulate their concerns about security and implementation of the Plan with 'clarity and finality.'\""], "subsections": []}, {"section_title": "The Christofias-Talat Negotiations: 2008-2010", "paragraphs": ["As early as 2004, Talat, as Turkish Cypriot \"prime minister,\" was credited with helping convince the Turkish Cypriots to support the Annan Plan and had been seen as perhaps the one Turkish Cypriot leader who could move the Greek Cypriots toward a more acceptable solution for both sides. For his efforts at the time, Talat, on April 17, 2005, was elected \"president\" of the unrecognized TRNC over the National Unity Party's (UBP) candidate, Dr. Dervis Eroglu, receiving 55.6% of the vote in a field of nine. ", "For roughly the next four years, to little avail, Cyprus muddled through a series of offers and counteroffers to restart serious negotiations even as the Greek Cypriots solidified their new status as a member of the EU, a status not extended to the Turkish Cypriots despite an EU pledge to try to help end the isolation of the north.", "On February 24, 2008, Demetris Christofias of the Progressive Party of Working People (AKEL) was elected to a five-year term as president of the Republic of Cyprus. Christofias was educated in the Soviet Union and was a fluent Russian speaker. He joined the communist-rooted AKEL party at the age of 14 and rose through its ranks to become leader in 1988. Christofias was elected president of the Cypriot House of Representatives in 2001 and won reelection in 2006. ", "Christofias's election had the backing of the Democratic (DIKO) Party and the Socialist (EDEK) Party. Christofias, in part, tailored his campaign to opposing what he believed was an uncompromising approach toward the Turkish Cypriots by his opponent, incumbent President Papadopoulos, and the stagnation in the attempt to reach a just settlement of the Cyprus problem. Although serious differences existed between the Greek Cypriot and Turkish Cypriot sides over a final settlement, Christofias took the outcome of the vote as a sign that Greek Cypriots wanted to try once again for an end to the division of the island. In his inaugural address, President Christofias expressed the hope of achieving a \"just, viable, and functional solution\" to the Cyprus problem. He said that he sought to restore the unity of the island as a federal, bizonal, bicommunal republic; to exclude any rights of military intervention; and to provide for the withdrawal of Turkish troops and, ultimately, the demilitarization of the island. Christofias also reaffirmed that the 2004 Annan Plan, which he himself opposed at the time, was null and void and could not be the basis for a future settlement.", "After Christofias's election, Turkish Cypriot leader Talat, a long-time acquaintance of Christofias, declared that \"a solution in Cyprus is possible by the end of 2008.\" He also declared that \"the goal was to establish a new partnership state in Cyprus, based on the political equality of the two peoples and the equal status of two constituent states.\" While the negotiations between Christofias and Talat appeared to get off to a fast start, the differences in positions quickly became apparent, and the talks, although held on a regular basis, soon began to bog down. Talat wanted to pursue negotiations on the basis of the provisions of the old Annan Plan, while Christofias, mindful of the Greek Cypriot rejection of that plan, was keen to avoid references to it. Old differences quickly resurfaced. As the negotiations dragged on well into 2009, it appeared that impatience, frustration, and uncertainty were beginning to mount against both Christofias in the south and Talat in the north. ", "By the end of 2009, perspectives on both sides of the island began to change. Some suggested that the Greek Cypriots sensed that the talks would not produce a desired outcome before the April 2010 elections in the north, in which Talat, running for reelection, was trailing in the polls to Eroglu. If Talat lost, it was argued, the negotiations were likely to have to begin anew with an entirely different Turkish Cypriot leadership. Under that scenario, many Greek Cypriots, including members within the political parties of the governing coalition, seemed leery of weakening their hand by offering further concessions. Some Turkish Cypriots, on the other hand, appeared to think that the Greek Cypriot side would not offer Talat a negotiated settlement, betting from the opinion polls in the north that Eroglu would win the April elections and would pull back from serious negotiations, at least for a while as he consolidated his new government and reordered Turkish Cypriot strategy. The Greek Cypriots could then blame the anticipated hard-liners in the north and their presumed patrons in Ankara if the talks collapsed. ", "As the negotiations entered 2010, it appeared that the window of opportunity to reach a final settlement, at least between Christofias and Talat, was closing fast. Despite the fact that the two sides had been in negotiations for almost 18 months and in close to 60 meetings, they appeared to have had very little to show for their efforts. In his New Year message to the Greek Cypriots, Christofias suggested that while some progress had been made in a few areas, the two sides were not close to a settlement. The intensive dialogue between Christofias and Talat resumed on January 11, 2010, but after three sessions the talks seemed to have reached a standstill, with the gap between the respective positions of President Christofias and Talat on many of the tougher issues seeming to be insurmountable. ", "The last formal negotiating session between Christofias and Talat concluded on March 30, 2010, with no new developments. In the run-up to the final session there was some speculation that both sides would issue a joint statement assessing the negotiations up to that point and perhaps even announcing some of the areas in which convergences between Christofias and Talat had been achieved. Speculation was that Talat had wanted something positive to take into the final days of the election campaign and had presented Christofias a report summarizing what the Turkish Cypriots understood to have been achieved. Christofias, however, was already under pressure from his coalition partner, DIKO, and former coalition partner, EDEK, not to issue such a statement, which could have been interpreted as an interim agreement. ", "On March 30, 2010, Christofias and Talat issued a short statement suggesting that they had indeed made some progress in governance and power sharing, EU matters, and the economy, but they did not go beyond that. On April 1, Talat, feeling he needed to say more to his Turkish Cypriot constituents about the negotiations, held a press conference at which he outlined his understandings of what he and Christofias had achieved to that point. Christofias would neither confirm nor deny what Talat had presented. "], "subsections": []}, {"section_title": "A New Era: Christofias and Eroglu", "paragraphs": ["On April 18, 2010, Talat lost his reelection bid to his rival Dervis Eroglu of the UBP. Observers believe Talat's defeat was due to a combination of his failure to secure a settlement of the Cyprus problem after almost two years and his inability to convince the EU and others to help end what the Turkish Cypriots believed was the economic isolation of the north. Some observers also noted that an overwhelming number of mainland Turks who had settled in the north and who continued to identify more with mainland Turkey had little interest in unification with Greek Cyprus and supported Eroglu because they believed his views were consistent with theirs. ", "Eroglu, then a 72-year-old physician and long-time politician, won the election with just over 50% of the vote. Eroglu was seen as having a combative style and hard-line views similar to former Turkish Cypriot leader Rauf Denktash, particularly in seeking more autonomy for each community. Eroglu also headed a party in which some of its followers had advocated a permanently divided island and international recognition for the TRNC. It was reported that during the campaign Eroglu may have suggested that perhaps Cyprus should consider a kind of \"soft divorce\" similar to what the Slovaks and Czechs did when they separated. During the campaign, Eroglu also criticized Talat for what he thought were too many concessions to the Greek Cypriot side, including the agreement that a reunited Cyprus would hold a single sovereignty through which both sides would reunite. Nevertheless, even while criticizing Talat's positions, Eroglu insisted that negotiations would continue under his presidency. Upon assuming his new office, Eroglu wrote a letter to U.N. Secretary-General Ban Ki-moon expressing his willingness to resume the negotiations under the good offices of the U.N. and at the point where the negotiations between Talat and Christofias had left off. Despite Eroglu's position regarding the resumption of talks, most political elements on the Greek Cypriot side saw Eroglu's election as a negative development and expressed their skepticism as to what the future would hold.", "On May 26, 2010, President Christofias and Turkish Cypriot leader Eroglu held their first formal negotiating session. The meeting was held under the auspices of the U.N. Secretary-General's special adviser on Cyprus, Alexander Downer. Almost immediately, a controversy arose when it was reported that Downer read a statement from U.N. Secretary-General Ban congratulating the parties for starting the talks again from where they left off (including the confirmation of existing convergences agreed to by Christofias and Talat), for agreeing to abide by U.N. Security Council resolutions on Cyprus, and for suggesting that a final agreement could be reached in the coming months. ", "Downer's statement immediately drew criticism from several of the Greek Cypriot political parties that were concerned that the references to the convergences arrived at by Christofias and Talat were being considered as agreements by the U.N., a position not shared by the Greek Cypriots. On the other hand, apparently after the May 26 meeting, Eroglu made a statement that the Turkish Cypriots would not be bound by the statement of the U.N. Secretary-General, especially with regard to previous U.N. Security Council resolutions, some of which did include calls for Turkey to withdraw its troops from Cyprus. While Eroglu was trying to clarify that he accepted U.N. resolutions on the parameters of the negotiations, some in the Greek Cypriot leadership seem to question whether Eroglu was trying to redefine the basis under which he would proceed with the negotiations.", "When the talks resumed in May 2010, Christofias and Eroglu, along with several technical committees and working groups with representatives from both sides, met regularly but made no apparent progress. In September, in an interview with Greek Cypriot press, Eroglu expressed his frustration with the process and accused the Greek Cypriots of treating Turkish Cypriot positions with contempt. He apparently suggested that Christofias needed to inform the Greek Cypriot people that any final solution would involve pain on both sides but also had to minimize social upheaval, especially among the Turkish Cypriot community. When asked what pain Eroglu was prepared to accept, however, he stated that it would not include giving up the Turkish Republic of Northern Cyprus or its flag or sending mainland Turks who settled in the north back to Turkey. In October 2010, Turkish press reported that Eroglu appeared so frustrated with the negotiations that he suggested that Turkish Cypriots had become fed up and no longer believed in the possibility of a mutually agreeable settlement. \"As time passes,\" he said, \"the willingness of the two communities to live together is diminishing.\" For his part, Christofias told the U.N. Secretary-General in September 2010 that both sides were not coming closer to a settlement and that Turkey, given its own domestic and regional problems, \"was not ready to solve the Cyprus problem.\"", "Although assessments of the negotiations appeared to grow more pessimistic, additional sessions were held through the end of December. Talks were then suspended while Eroglu tended to medical problems. While both sides continued to talk and continued to pledge to seek a solution, neither side had indicated whether progress was being made or that any compromises were possible. On January 1, 2011, Christofias declared his disappointment over the passing of another year without a settlement and accused Turkey of not making any effort to promote a solution to the Cyprus issue.", "In mid-April 2011, the Republic of Cyprus entered into a parliamentary election period that concluded on May 22. The outcome of the elections did not seem to suggest that the negotiating position of Christofias would require changes. Although opposition to what was perceived to be Christofias's concessions to the north was voiced during the campaign, none of the three parties with the most hard-line views\u2014EDEK, the pro-Europe EVROKO party, and DIKO\u2014increased its vote share. The impact of the elections would later prove problematic for the negotiations. Similarly, in national elections held in Turkey in June, Cyprus was barely an issue among the competing parties. After the election there was some speculation that then-Turkish Prime Minister Recep Tayyip Erdogan, having won another five-year term, might have been prepared to inject some positive new energy into the Cyprus negotiations in order to help Turkey's flagging accession negotiations with the EU. Later this seemed to have been a misreading of the prime minister's intentions. "], "subsections": []}, {"section_title": "New Year, Continued Stalemate, End of the Talks", "paragraphs": ["Throughout 2011, Christofias and Eroglu continued their futile negotiations, which also included two meetings with U.N. Secretary-General Ban in another attempt by the U.N. to boost momentum for the talks. Ban insisted that the negotiations be stepped up and that the three would meet on October 30 to assess what progress had been achieved. The U.N. would then be prepared to organize an international conference to discuss security-related issues as Turkey suggested. This would be followed by plans to hold referenda on a final solution in both the north and south by the spring of 2012. The hope among some was that by intensifying the negotiations and reaching a solution by the end of 2011, a potentially reunified Cyprus would be prepared to assume the rotating presidency of the EU on July 1, 2012. By the fall of 2011, both sides seemed to have lost a clear urgency to achieve a final solution. Trying to reach a negotiated settlement by the end of October became impractical.", "As 2011 ended, pessimism abounded, with many feeling that what had not been accomplished in the previous two years could become very difficult to achieve in 2012 as the Republic of Cyprus entered into full preparation for its EU presidency. Many felt that unless there was a major breakthrough in the negotiations by early 2012, the talks would become even more stalemated and could culminate in a potential dramatic turn of events by the summer. ", "Doubts about the prospects of a solution acceptable to both sides were also raised with the release of a public opinion poll that apparently found a growing negative climate and public discontent on the island, an increased ambivalence on the part of Turkish Cypriots, and a possible shift toward a no vote for reunification among Greek Cypriots. The poll also found that society on both sides needed to begin a very public discussion of the parameters of the negotiations and that confidence-building measures were needed to be implemented to increase the levels of trust in the peace process.", "As 2012 began, both sides were again preparing to travel to New York for a fifth meeting with Ban to assess the progress of the negotiations. Ban had asked both Christofias and Eroglu to come to New York on January 22-24 with significant offers in the areas of governance, economy, and EU affairs so that the \"Greentree 2\" meeting could facilitate a final deal that would allow the U.N. to convene an international conference in the spring to resolve security-related issues and allow referenda on a final agreement in both the north and south by early summer of 2012. ", "It appeared, however, that even before arriving in New York, neither Christofias nor Eroglu was willing or able to make necessary concessions on the difficult issues of property rights, security, territory, mainland Turks who had \"settled\" in the north, or citizenship\u2014areas where both sides had long-held and very different positions. The uncertainty of what could be achieved prompted Christofias to question whether the meeting should take place at all. The lack of any progress to that point led some in the Greek Cypriot opposition to suggest the meeting be cancelled and warned Christofias not to accept any deadlines or U.N. arbitration or agree to an international conference without explicit agreements on internal issues. ", "Nevertheless, Greentree 2 took place, and it was reported that both sides had submitted to Ban extensive proposals that each felt could provide the basis for a solution. The Greentree meetings concluded without any new agreement to end the stalemate and led an apparently frustrated Ban to say that he would wait until he received a progress report from his special adviser at the end of March 2012 before deciding whether to convene an international conference, despite Christofias's opposition to any such decision. ", "Christofias and Eroglu resumed their direct negotiations in mid-February, but it appeared unlikely that the stalemate could be broken at that point and that the potential for any agreement looked to be delayed\u2014not only until after the EU presidency in the latter half of 2012, but also until after the February 2013 national elections in the republic. In early April, it was reported that the Turkish Cypriot side had suggested that the U.N.-sponsored talks be terminated once the republic assumed the EU presidency on July 1, 2012. This prompted President Christofias to respond that Turkish Cypriots were no longer interested in a solution, even though, as Christofias suggested, the talks could continue during the EU presidency, as the two issues were not related. ", "In May 2012, and with the EU presidency fast approaching, Christofias understood that the talks could not have achieved anything positive, and although he insisted that the negotiations could have continued during the EU presidency, the U.N. did not. U.N. special envoy Alexander Downer then announced that Ban had decided not to call for an international conference on Cyprus due to the lack of agreement on core domestic issues and further stated that the U.N. would no longer host the leaders' \"unproductive\" talks. Downer said that the U.N. would reconvene the meetings \"when there was a clear indication that both sides had something substantial to conclude.\" ", "By mid-2012, the convergence of several factors led to the suspension of the talks. One factor was Christofias's intent to make the republic's presidency of the EU a success. Christofias clearly did not want a divisive debate over what would have probably been an unpopular agreement\u2014even if he and Eroglu could have negotiated a settlement\u2014to detract from or ultimately overshadow the Cyprus EU presidency. Eroglu's pronouncement that he would not meet directly with President Christofias during the six-month EU presidency, despite the fact that the settlement negotiations were not part of the presidency's mandate, was also a factor. The emergence of the fiscal and budget crisis in Cyprus brought on in the aftermath of the larger Eurozone crisis also contributed to the demise of the negotiations. Christofias realized that managing a serious fiscal crisis and the presidency of the EU simultaneously would leave, in reality, little time for him to continue any regular negotiations with Eroglu. ", "On May 14, 2012, recognizing his own internal political realities and reverting back to an earlier statement that he would not seek reelection if he was not able to resolve the Cyprus problem, President Christofias announced that he would not seek reelection in 2013, stating that \"there are no reasonable hopes for a solution to the Cyprus problem or for substantial further progress in the remaining months of our presidency.\" ", "By the end of May 2012, the U.N.-sponsored talks, having essentially reached a stalemate, were formally suspended. Neither Christofias nor Eroglu strongly objected to the U.N. decision. While both sides blamed the other for a lack of progress on an agreement, the reaction to the downgrading of the talks appeared to be muted among both the political leaders and the general publics in both communities.", "In early June, Kudret Ozersay, then the chief adviser to Eroglu for the negotiations, resigned, further signaling that the talks, even at the technical level, would not continue at the same pace. However, Ozersay was soon replaced by Osman Ertu\u011f as chief negotiator."], "subsections": []}, {"section_title": "Elections 2013: The Anastasiades Government and New Talks", "paragraphs": ["In January 2013, the Republic of Cyprus entered a period of national elections. With Christofias out of the picture, Nicos Anastasiades of the center-right, democratic DISY party, with the backing of the conservative DIKO and EVROKO parties, emerged as the leader in early public opinion polls. DIKO had been part of the previous Christofias-led government but withdrew from the coalition in disagreement over some of the positions Christofias took in the negotiations with the Turkish Cypriots. Anastasiades's closest challenge came from the AKEL party itself, led by Stavros Malas. Although Anastasiades took the largest number of first round votes, he was forced into a runoff with Malas but eventually emerged victorious. During the campaign, neither candidate offered many concrete proposals regarding the negotiations with the Turkish Cypriots, as the fiscal and budget crisis took center stage. ", "Anastasiades, who had backed the 2004 Annan Plan for a Cyprus settlement, appeared cautious about his intentions other than calling for a settlement, perhaps not wanting to cause a public rift with his DIKO and EVROKO allies, who had opposed the Annan Plan. While foreclosing new discussions based on the old Annan Plan, Anastasiades had suggested that the basis of future talks would have to be broad understandings reached in 1977 and 1979 between the Greek and Turkish Cypriot leadership at the time as well as a 2006 set of principles agreed to by former Cypriot leaders. He also suggested that as president he would not be directly involved in the day-to-day negotiations but would, in time, appoint someone as his representative and principal negotiator.", "Upon being sworn in as president, Anastasiades did reach out to the Turkish Cypriots, referring to them as citizens of Cyprus but not giving any clear signal as to his timetable for restarting the negotiations. On the other hand, Yiannakis Omirou, then-leader of the parliament, stated that a new national policy was necessary: \"We need to denounce the Turkish stance to the international and European community and redefine the Cyprus problem as a problem of invasion, occupation and violation of international law.\" The new policy, Omirou went on, \"must set out the framework for a Cyprus solution and use Cyprus's EU membership and Turkey's EU prospects to exert pressure on Ankara to terminate the island's occupation and accept a solution, in accordance with international and European law.\"", "Initially, the Turkish Cypriots appeared cautious about which negotiating partner they expected to see across the table if and when the talks resumed. Would it be Anastasiades, who earlier was sympathetic to many of the provisions of the Annan Plan, or a different negotiator, who was critical of the previous government's negotiating positions and had teamed with what the Turkish Cypriots believed to be hard-line partners who either withdrew from the previous government coalition in part because of the reported \"concessions\" being offered by Christofias or were consistently critical of the previous government's approach? The Turkish Cypriots had also seemed to set a new standard regarding their own status as a prelude for resuming the talks. Eroglu had stated that the talks could not resume automatically from where they left off and had begun referring to the two \"states,\" a \"new dynamic,\" a \"new negotiating table,\" and a timetable for concluding whatever talks did resume.", "Even as Anastasiades was being inaugurated, he had to turn his attention to the serious domestic banking and fiscal crises facing the republic. At the same time, Turkish Cypriot and Turkish leadership began to publicly pressure Anastasiades to restart the settlement talks as soon as possible, although it appeared that the Turkish Cypriot side was not proposing any significant compromises or new ideas that would move the talks forward. This prompted Anastasiades to respond that he would not be forced to the bargaining table during this period of economic turmoil and was committed to first addressing the government's fiscal crisis. ", "In mid-May, Foreign Minister Ioannis Kasoulides traveled to New York and Washington to assure everyone that the leadership of the republic was indeed interested in resuming the negotiations but that they needed time to get a handle on the economic crisis on the island. He also made it clear that the Anastasiades administration would not be bound by any previous convergences discussed between his predecessor Christofias and Eroglu and would not agree to any definitive timetable to conclude the talks. Kasoulides also floated the old idea, previously rejected by the Turkish Cypriots (and opposed by some Greek Cypriots who wanted a comprehensive agreement), that as a confidence-building measure on the part of Turkey, the abandoned town of Verosha should be returned to \"its rightful owners.\" In exchange, the Turkish Cypriots could be permitted to use the port of Famagusta for direct trade with Europe under the supervision of the EU. Turkish Cypriots also traveled to Washington with a more upbeat message that 2014 would be a good year to reach an agreement.", "The Turkish Cypriots, however, rejected the return of Verosha and began speaking more publicly and more often of \"the realities on the island,\" referring to two separate coequal states as well as timetables for concluding the talks. Eroglu had stated that \"while there is a Greek Cypriot administration in the South, there is the TRNC state in the North.\" Ankara, for its part, had already suggested that while it was ready to say \"yes\" to a negotiated solution, a two-state option was viable if talks could not restart and produce a solution in a timely fashion.", "Eroglu stated in December 2012 that \"the Cyprus problem cannot be solved under existing conditions\" and that \"a possible settlement of the Cyprus issue could be viable only if it is based on the existing realities on the island,\" which acknowledges that \"there were two different people having two separate languages, religions, nationality and origin and two different states\" and that \"certainly it was possible to find a solution to make these two people live together, however people should bear in mind, it is [not] realistic to establish one state from two separate states.\" ", "In late May 2013, Anastasiades and Eroglu finally met, and Anastasiades restated his support for the resumption of the talks but again indicated that the talks could not restart until perhaps October 2013. In July, the Greek Cypriot National Council took the day-to-day responsibility for the negotiations out of the hands of the president, as had been the practice since 2008, and appointed Ambassador Andreas Mavroyiannis of the Foreign Ministry as the Greek Cypriot negotiator. This action increased speculation that the Greek Cypriots were close to proposing that preliminary discussions begin with the goal of resuming the formal negotiations.", "Throughout the remainder of 2013 and into the beginning of 2014, both sides repeatedly argued over how to restart the talks despite repeated assurances from both sides that they remained committed to restarting the negotiations. Through that period, neither side had been willing to reach agreement on the language of what the Greek Cypriots insisted should be a \"joint statement\" redefining a set of negotiating goals or outcomes that both sides would strive to achieve. The Turkish Cypriots initially rejected the idea that such an opening statement was necessary but then decided to negotiate language they could be comfortable with. Negotiations between Mavroyiannis and Osman Ertu\u011f took almost six months to conclude.", "On February 8, 2014, after what appeared to be a significant intervention by the United States, the Cyprus press reported that an agreement on the language of a \"joint declaration\" had been reached and that Anastasiades and Eroglu would meet right away to relaunch the negotiations. This was further confirmed when the \"joint statement\" was released to the public a few days later. The Declaration, which to some became the most comprehensive agreed document on the Cyprus question since the High Level Agreements of 1977 and 1979 or the Annan Plan of 2004, now serves as the basis of the current negotiations.", "The agreement on the language of the joint statement, however, did not come without a political price for Anastasiades. On February 27, the leader of the government's coalition partner, DIKO, Nicolas Papadopoulos, announced that it was leaving the government in disagreement over the way President Anastasiades was handling the negotiations, much as they did when they quit the Christofias government. It appeared that Papadopoulos\u2014whose father, former President Tassos Papadopoulos, had opposed the Annan Plan\u2014was concerned that Anastasiades had tacitly accepted some of the past convergences that DIKO had opposed. The fact that the joint statement referred only to a \"united\" Cyprus and not the Republic of Cyprus may have again suggested to DIKO that Anastasiades had come too close to accepting an autonomous Turkish Cypriot state over which the Greek Cypriots would have little or no authority or jurisdiction. ", "Curiously, Ertu\u011f left his post as negotiator after the Declaration was announced but continued to serve as Ero\u011flu's spokesperson. The Turkish Cypriots then reappointed former negotiator Kudret Ozersay, one seen as more willing to seek accommodation, as their representative to the talks. Negotiations resumed between Mavroyiannis and Ozersay, with Anastasiades and Eroglu meeting periodically. It remained unclear exactly where the starting point for each of the \"chapters\" of issues to be negotiated had been set. Both sides had earlier insisted that they would not be bound by past convergences thought to have been achieved in previous negotiations. However, the February joint statement referred to the fact that only \"unresolved\" issues would be on the table, suggesting that perhaps some previous agreements had, in fact, been accepted. ", "Such a long disagreement first over the need for, and then the language of, the joint statement indicated to many observers that it would continue to be difficult to reach a final solution, particularly in 2014, which marked the 40 th anniversary of the 1974 deployment of Turkish military forces to the island and the 10 th anniversary of the Greek Cypriot vote against the Annan Plan, events that would be observed in very different ways on each side of the island. The pessimism surrounding the potential continuation of the stalemate prompted one well-respected Washington think tank to suggest that a permanent separation of the two sides might become inevitable and that serious consideration should be given to such a possible outcome. ", "The talks did resume in 2014, with Anastasiades and Eroglu meeting several times. In early July, Eroglu was said to have submitted a \"roadmap\" toward a settlement, which included a national referendum to be held by the end of 2014. This was apparently rejected by Anastasiades. Later in July it was reported that the Greek Cypriots had tabled a 17-point plan addressing their positions on issues for a future agreement while the Turkish Cypriots submitted a 15-point counterproposal. Both proposals were apparently rejected. Not only was there disagreement on how to go forward, but there had been reports that both sides had actually backtracked on several issues (see below). These and other reported roadblocks to the negotiations prompted Greek Prime Minister Antonis Samaras to say in July that no \"significant progress\" had been made and the Turkish Cypriot official for foreign affairs, Ozdil Nami, to suggest \"the peace talks were finished.\" ", "The last meeting between Anastasiades and Eroglu before a break for the summer was held on July 26 and was reportedly a somewhat tense session, with Anastasiades expressing his frustration with the Turkish Cypriot side. In late August, the United Nations named Norwegian diplomat Espen Barth Eide as the Secretary-General's new special adviser on Cyprus. The talks, hosted by Eide, resumed in September, and when Anastasiades and Eroglu renewed their meetings on September 21, Turkish Cypriot negotiator Kudret Ozersay stated that he felt that \"real negotiations are starting now.\" Unfortunately, Ozersay's optimism did not last very long. Near the end of September, Turkey, sensing an increased interaction among the Republic of Cyprus, Greece, Israel, and Egypt over energy resources in the Eastern Mediterranean, decided, in what was seen as a provocative act, to move its own seismic exploration vessel into the Republic of Cyprus's exclusive economic zone (EEZ) off the southern coast of the island. Turkey then issued what was referred to as a \"navigational telex\" (NAVTEX) stating that the seismic operations could last until April 2015 unless the Turkish Cypriots were given more of a role in decisions regarding the island's natural resources, specifically energy. Reacting to Turkey's decision to establish a presence in the Cypriot EEZ, President Anastasiades announced in October that he was withdrawing from the settlement negotiations and declared that the talks would not resume until the Turkish seismic vessel was withdrawn from Cyprus's EEZ and the NAVTEX was rescinded. By March 2015, the seismic ship had moved to the port of Famagusta, but the NAVTEX had not been withdrawn.", "Although the Greek Cypriots insisted that all of the island would eventually benefit from any resources exploited in the waters off the coast, they pointed out that energy, under the provisions of the joint statement agreed to earlier, would be considered a \"federal-level\" issue and would become part of the dialogue once an agreement was reached. The Turkish Cypriots, for their part, demanded that energy issues become part of the formal settlement negotiations once they resumed. In late October 2014, with the negotiations suspended, Turkish Cypriot negotiator Ozersay was replaced by Ergun Olgun. The suspension of the talks, precipitated for some by an unnecessary action and a possible overreaction, again raised serious doubts regarding the commitment of both sides to achieve a solution that left one former British foreign secretary stating that \"the international community should accept the reality that there is division and that you have partition.\" ", "Through the first four months of 2015, the talks remained in suspension with Anastasiades continuing to hold that Turkey would have to withdraw its seismic ship, rescind the NAVTEX issued in January, and stop threatening existing energy exploration activities off the southern coast of Cyprus. Some believed that political pressure from what would be his normal domestic political allies had forced Anastasiades into a corner, preventing him from backing down from this demand despite some domestic and international pressure to do so. Others believed he was under pressure to hold off on the talks until the national elections in the north, scheduled for April 19, were concluded. ", "By mid-April 2015, Turkey had removed its seismic vessel from Cyprus and did not renew the NAVTEX. However, the election campaign in the north had begun, and both sides accepted the fact that the negotiations would not resume until after the elections. "], "subsections": []}, {"section_title": "Elections 2015: Akinci and the Resumption of the Negotiations", "paragraphs": ["On April 19, Turkish Cypriots went to the polls to elect a new \"president.\" Seven candidates were on the ballot. The incumbent, Dervis Ergolu, emerged with a thin margin of votes over the runner up, Mustafa Akinci, but did not win enough to avoid a second round of voting. On April 26, in the second round of voting, Mustafa Akinci of the small, center-left, Communal Democratic Party (TDA) won the election to become the new leader of the Turkish Cypriots, defeating Eroglu with 60% of the votes. Akinci, a three-time \"mayor\" of the Turkish Cypriot-administered half of Nicosia, immediately announced that the negotiations would resume as soon as possible in May and that it was his intention to conclude a settlement agreement by the end of 2015. In congratulating Akinci on his election, Anastasiades confirmed that he, too, looked forward to restarting the negotiations as soon as possible. ", "Akinci leads a small political party that played little, if any, role in previous governments or the past negotiation process. His candidacy initially was criticized by some who claimed he was inexperienced. For others, Akinci entered the negotiations unencumbered with any preconditions for the talks or for a settlement. However, while Akinci controlled the \"presidency,\" his party did not control the government. Akinci also did not initially meet with all of the other Turkish Cypriot political parties, and he seemed determined to rely on the business and nongovernmental organization (NGO) communities to help develop and articulate his negotiating positions.", "It did not take long for the two sides to meet. On May 11, 2015, the U.N. Special Envoy hosted a dinner for the two leaders in what was described as a relaxed and positive setting. Akinci quickly named Ozdil Nami, the former \"foreign minister\" in the Eroglu government, as the new negotiator for the Turkish Cypriot side. On May 17, 2015, Anastasiades and Akinci held their first formal negotiating session. On May 23, the two leaders took the unprecedented step of walking together down Ledra Street, the symbolic dividing line of the island, in a show of solidarity and hope that this time things would be different. This was the first time that a president of the republic stepped onto territory normally referred to as \"occupied\" land. Since then, the two leaders have met regularly, including an intensified series of meetings in August and September 2016.", "The reaction to Akinci among some, although not all, Greek Cypriots appeared to be positive but restrained, with a somewhat upbeat \"wait-and-see\" attitude prevailing. Many appeared to be relieved that Eroglu and his hard-line approach to the negotiations were gone. With little in the way of determined political opponents acting as a restraint on his negotiating strategy, some felt that Akinci would be more willing to compromise on some of the issues Eroglu would not budge on. On the other hand, not knowing where Akinci's support for a final deal would actually come from, some were not sure exactly what Akinci could compromise on. In August 2015, Akinci held a round of visits and discussions with the political parties, NGOs, and the business community apparently to assess exactly how much leeway he had for compromise. ", "Turkey was another factor for Akinci. Akinci was not seen as a favorite of Ankara during the elections, and Ankara was likely surprised with the margin of his victory. The government in Ankara offered the obligatory congratulations to Akinci, and Turkey's President Erdogan visited the island to meet with the new leader. In fact, it was reported in the Turkish press that Akinci and Turkish President Erdogan had exchanged some unpleasant words immediately after the election. In his victory statement, Akinci reiterated his campaign position that the status of the relationship between Turkey and Turkish Cyprus should change. \"It should be a relationship of brothers/sisters, not a relationship of a motherland and her child,\" he had said. This provoked a somewhat angry response from Erdogan and led the Turkish press to question the future of Turkey's support for the negotiations. In an editorial in the April 28, 2015, edition of the Hurriyet Daily News , the author suggested that ", "Ak\u0131nc\u0131 has been away from active politics for more than a decade. His team is mostly composed of young people unaware of the delicacies and history of the Cyprus problem. Anastasiades might try to score an easy victory. If the Cyprus talks between the \"novice\" Ak\u0131nc\u0131 team and a ravenous Anastasiades team somehow agree on a deal that favored the demands of the Greek Cypriots, Akinci could dangerously risk fundamental demands of the Turkish Cypriots, forcing the whole process to be derailed in a manner very difficult to revive with extreme effort. ", "In an August 2015 interview, Emine Colak, the former Turkish Cypriot \"foreign minister,\" indicated that Turkey was not trying to manipulate the peace talks and seemed, for the moment, content to let the Turkish Cypriots negotiate their own agreement. Some observers attributed this \"hands-off\" approach by Turkey as a reason why a positive atmosphere had surrounded the talks and why some concrete progress seemed to have been made. ", "Over the summer and fall of 2015, as the negotiations continued on a regular pace, several new \"confidence-building\" measures were initiated. The two leaders agreed on the opening of a new border crossing at Deryneia, and for the first time in 40 years, electricity connections between the two sides were reestablished. Returning Verosha to the Greek Cypriots continued to be a confidence-building measure that Anastasiades endorsed, but that issue was mostly deferred by Akinci. ", "Despite the positive atmosphere surrounding the talks, there were words of caution, particularly from Greek Cypriots, who reminded everyone that there was still a lot of ground to cover. For instance, in early September 2015 several Greek Cypriot political parties officially rejected the notion of a bizonal, bicommunal federation as a part of the solution to the Cyprus problem and criticized reported convergences on population size in the north, the rotating presidency, and particularly Turkey's security role. ", "The concerns expressed by the Greek Cypriot opposition were not just reserved for Anastasiades. In late December 2015, Akinci, in an interview on Turkish television, seemed to outline some very basic bottom lines, referred to as his \"wish list,\" on the issues under negotiation. The reaction to Akinci's comments drew swift and negative reaction from several Greek Cypriot political leaders, suggesting that trouble for the talks was brewing just below the surface. Former House Speaker Yiannakis Omirou described Akinci's remarks as \"highly indicative of the Turkish side's intentions,\" and said \"Turkey effectively seeks to legalize the results of its 1974 invasion. He [Akinci] continues to support the preservation of Turkey's role as a guarantor, and insists on unacceptable views on political equality and rotating presidency.\" For some in the opposition, this was a warning to Anastasiades that he should seriously rethink his views if he had made any concessions on those issues.", "During 2016, the road to a settlement remained difficult and, beyond the negotiators themselves, became somewhat more complicated. Internally, in the north, disputes among the political parties in early 2016 forced the more \"friendly-to-Akinci\" government coalition to collapse. A new, more conservative Turkish Cypriot coalition government formed that did not include representatives from Akinci's party or parties from the previous coalition. The government was led by \"Prime Minister\" Huseyin Ozgurgun, whose support for the negotiations went from lukewarm to marked by serious doubts. Ozgurgun became more critical of the talks and spoke out forcefully in favor of retaining Turkish security guarantees. In an August 2016 interview, Ozgurgun reminded observers that Akinci's negotiating team did not include any representatives from the government, suggesting that the government and the negotiators were \"disconnected.\" The government also included \"Deputy Prime Minister\" Serdar Denktash, the son of the former icon of the Turkish Cypriots. Some believed that he retained his father's hard-line skepticism of any deal and had suggested that if an agreement was not reached by the end of 2016, a referendum should be held in the north to determine whether the Turkish Cypriots wanted the negotiations to continue in 2017. Such a referendum idea was dropped as the negotiations entered 2017. Then-\"Foreign Minister\" Tashsin Ertugruloglu, who opposed the Annan Plan, also had become more public in expressing the view that no agreement could be achieved. These three influential figures eventually became a political problem for Akinci as negotiations toward a tentative agreement were pursued. ", "In the south, elections were held in spring 2016 for the Greek Cypriot House of Representatives. The two largest parties, the governing DISY party and the pro-settlement AKEL, lost some ground, and for the first time a nationalist/populist party (ELAM) entered the House. This party was seen by some as an offshoot of the radical right Golden Dawn in Greece. Although small in number, like several of the other parties, ELAM is skeptical of any power-sharing arrangement with the Turkish Cypriots. In addition to ELAM, in September 2016, the DIKO and Green parties suggested that the parliament pass a resolution stating that no agreement could include \"foreign guarantees\" and \"foreign troops.\" DIKO's chairman reportedly stated that there no longer was confidence in the president.", "Despite the internal political developments, both sides proceeded with the negotiations through 2016. The mood appeared to be as positive and constructive as it had ever been, at least among the negotiators, with more frequent references to being farther along on the road to a settlement than in the past. There were also more positive stories in the international press and significant expressions of support for the negotiations from many world capitals, indicating perhaps that progress was actually being achieved.", "Despite the level of optimism displayed by the leaders of the two sides, many recalled a similarly hopeful atmosphere in early 2008, after Christofias was elected president on a campaign filled with commitments of a quick conclusion to the negotiations. At that time, Turkish Cypriot leader Ali Talat declared that because he and Christofias shared the same vision of a future for Cyprus, the two could overcome years of disagreement and mistrust and that the negotiations could conclude within six months. Akinci's declarations regarding a quick settlement by the end of 2015 raised expectations, but that deadline, never accepted by Anastasiades, was missed\u2014as, subsequently, was the end of 2016 target. ", "To most observers, the two leaders seemed to have come closer to reaching a settlement than at any time since 2004, when the Annan Plan for a settlement and unification of the island was actually voted on (and ultimately rejected by the Greek Cypriots). ", "However, the normal frustrations that inevitably appear in these negotiations again mounted over the two sides' inability to establish an end point at which time an agreement\u2014not perfect, but acceptable to both sides\u2014would be reached. Some Turkish Cypriot leaders, including Akinci, had begun to suggest that the round of talks in 2016 could be the last if an agreement was not reached. ", "By the beginning of August 2016, both sides had insisted that significant convergences acceptable to both leaders had been reached on many issues. At this point, the leaders again raised the possibility of reaching an agreement by the end of 2016. Such a timetable would have allowed them to hold referenda in both communities by spring 2017, possibly before the next presidential election cycle began in the republic. ", "Having agreed to try to reach a settlement by the end of 2016, Anastasiades and Akinci accelerated their negotiations after a short early August recess. In late August and early September, eight intense sessions were held in advance of the U.N. General Assembly's annual meeting in mid-September. The idea was to achieve enough progress by then on many of the basic issues that both sides would then ask the U.N. Secretary-General to convene a five-party conference (with the two Cypriot communities and the security guarantee countries, Greece, Turkey, and the UK) in December to discuss the issue of security guarantees and finalize an agreement. ", "Although no five-party conference was announced at the U.N. meeting, the two leaders returned to Cyprus and agreed to another series of accelerated sessions in October and November, to further address the issue of territory and to move to a multiparty conference on security guarantees with the intention of finalizing an agreement. ", "Despite the progress in areas such as economic affairs, EU affairs, citizenship, and governance structures, serious differences on a rotating presidency, territory, and the sensitive chapter on security guarantees\u2014the first time these issues had been formally discussed since the 2004 Annan Plan\u2014remained wide enough to prevent an actual agreement from being achieved during those sessions. "], "subsections": [{"section_title": "Mont Pelerin", "paragraphs": ["In November 2016, both sides agreed to travel to Mont Pelerin, Switzerland, to further address the more difficult issue of territory and to move to an agreement on holding a five-party conference on security guarantees. During the first week of the Mont Pelerin talks, which began on November 8, progress was reported on several issues and maps depicting what both sides thought should be the new boundaries of the new constituent states were discussed. ", "Disagreement over the amount of territory both sides would eventually claim and the number of displaced persons (mostly Greek Cypriots) who would be allowed to return to the new territories brought the talks to a standstill. The Greek Cypriots demanded that some 90,000 displaced Greek Cypriots be returned to new territory that would come under Greek Cypriot administration. The Turkish Cypriots insisted that the number be closer to 65,000. Faced with the loss of territory and a potential influx of Greek Cypriots into areas once controlled by the Turkish Cypriots, Akinci suggested that no deal on territorial adjustment could be made without a discussion and agreement on security guarantees. ", "President Anatasiades rejected the security-guarantee demand, noting that the Mont Pelerin sessions were only intended to reach an agreement on territorial adjustment and, if accomplished, a discussion of the security issues would be held. Amid this disagreement, the meetings were suspended for one week while both sides consulted with their advisers. Apparently, during this time, Ankara reiterated that the Turkish Cypriots should not agree to any territorial concessions without security guarantees, which could only be agreed to in a five-party or a multiparty conference to include Turkey. When the talks reconvened on November 20 and 21, 2016, no agreement could be reached, as the Turkish Cypriots insisted on a date for a five-party conference and maintained that both territory and security be included in those talks. The Greek Cypriots refused to agree to set a date for the five-party conference, and the talks ended.", "Both sides returned to Cyprus to reflect on the negotiations and to decide how to proceed. The Greek Cypriots wanted the resumption of the talks to begin where the Mont Pelerin talks on territory ended, including the presentation of maps defining new territorial boundaries. The Turkish Cypriots insisted that the talks could only restart if the Greek Cypriots agreed to a formal date for a five-party conference on territory and guarantees. ", "Not wanting to lose the momentum achieved at that point or to have the talks end, Anastasiades and Akinci on December 1, 2016, after a dinner hosted by U.N. Special Adviser on Cyprus Espen Barth Eide, agreed to meet as necessary in December 2016 and early January 2017. The goal was to bridge the gaps and resolve the disagreements that existed on most issues. In agreeing to the additional meetings, both sides set a timetable that included the following:", "After the additional meetings, the leaders would meet in Geneva on January 9, 2017, to discuss and wrap up all pending issues, outside of territory and security. On January 11, 2017, the two sides would present their respective proposed maps for a territorial adjustment. A five-party conference with the participation of the guarantor powers would be convened on January 12, 2017, to discuss and settle both the territory issue and the future of security guarantees, paving the way for a final agreement.", "These new developments again reinforced the observation that Anastasiades and Akinci still felt that a final agreement looked to be achievable. Both leaders subsequently instructed their negotiators to meet regularly and agreed to meet with each other as necessary until January 9, 2017, when the negotiations would reconvene in Geneva. After the missed opportunity at Mont Pelerin, Anastasiades's decision to resume the talks was not without additional controversy. In December 2016, after the announcement that the talks would resume, the leaders of DIKO, EDEK, the Citizens Alliance, and the Greens criticized Anastasiades's decision to accept an international conference on guarantees before resolving the other issues, as he had promised. Anastasiades reportedly was accused of giving in to Akinci's demand for a five-party conference on security without having achieved any territorial adjustments. The Citizens Alliance leader, Lillikas, supposedly asked for Anastasiades's resignation."], "subsections": []}, {"section_title": "Geneva Conference", "paragraphs": ["On January 9, 2017, Anastasiades and Akinci, accompanied by their negotiating teams, leaders of the major political parties, and EU representation, convened in Geneva, Switzerland, to begin what was hoped to be the final phase of the negotiations. The meeting also ushered in a new, historic element of the talks in that the guarantor nations, including Turkey, would be present at the negotiating table.", "For some, it was curious that Turkey agreed to go to Geneva while Ankara worked through a controversial constitutional referendum at home. Ankara had to be aware that any security concessions in which Turkey was required to withdraw its military forces or forego its right to defend northern Cyprus, at the demand of the Greek Cypriots or Greece, could have been interpreted as weakness, even as Ankara was trying to keep Iran's influence at bay and to negotiate with Moscow over Syria and with the United States over the Kurds. However, once Turkey agreed to attend the Geneva conference, the Greek Cypriots could have used any Turkish refusal to offer meaningful compromises on security and guarantees to prove that Turkey was not interested in seeking a fair solution. ", "Ankara's decision led some to wonder if its presence at Geneva was merely intended to reinforce Akinci's earlier demands that Anastasiades agree to such a conference or to demonstrate that Turkey, despite Greek Cypriot claims that Ankara was not interested in a solution, was indeed willing to continue negotiations. However, Turkey's apparent opposition to certain territorial concessions that Akinci may have offered seemed to complicate the negotiations at a critical time. It is conceivable that Ankara's strategy to inject new complications at Geneva could have been Turkey's attempt to stall the negotiations and build international pressure on the Greek Cypriots to compromise, even on an interim basis, on Turkish troops and guarantees, which would have allowed Turkey's military a face-saving exit from Cyprus and would have reassured the Turkish Cypriots that they would still be protected. ", "The Geneva meetings apparently began on a positive note with what was reported to be a convergence on the sticking point of a rotating presidency and even more public references to a \"United Federal Cyprus.\" Nevertheless, on January 11, 2017, when both sides presented their proposed maps for territorial adjustment to the U.N., the negotiations appeared to veer off course. Although the differences in the amount of territory each side demanded came within approximately 1% of each other, the symbolism of the differences was notable. Each side found the other's demands to be unacceptable. For instance, the Greek Cypriot map included the return of Morphou, whereas the Turkish Cypriot map did not. ", "After failing to accept each other's territorial demands, the negotiations ran into additional problems on January 12, 2017, when the five-party negotiations convened. Ankara rejected the Greek Cypriot territorial demand and insisted that Turkey's security role in the north be preserved; Greece insisted that Turkey's security role end. Other issues, including political equity concerns expressed by the Turkish Cypriots and Turkey's curious demand that the EU's four freedoms (movement of people, goods, services, and property rights), implied in any solution, also be applied to Turkish citizens living in the north, became sticking points. Apparently realizing that the security-guarantee issue and Turkey's future role in the north would not be resolved, and with Anastasiades's rejection of the introduction of the four freedoms proposal, Turkish Foreign Minister Mevlut Cavusoglu departed Geneva. The conference ended, with some questioning why Turkey even attended the meeting. Both sides returned to Cyprus empty-handed and disappointed.", "Although the Geneva talks came to a surprising and disappointing end, with each side blaming the other, Anastasiades and Akinci would not let the failure to make any significant progress end the momentum for which they had been praised earlier in the conference. The leaders agreed to establish a working group of technical experts to continue ironing out differences and prepare for new meetings later in January or February 2017. That working group returned to Mont Pelerin for two days of what Greek Cypriot negotiator Mavroyiannis described as very positive discussions. ", "Once again, Anastasiades and Akinci were unable to overcome some of the barriers that have blocked their ability to secure a final agreement. In addition, the strong statements voiced by both Greece and Turkey regarding security guarantees raised concern among some that the negotiations had, in part, been taken out of Cypriots' hands and put into the Turkey-Greece relationship. ", "Equally important to the two sides' inability to overcome long-standing differences was the fact that political opposition to the two leaders' negotiating positions had begun to increase. Some in the opposition feared that Anastasiades had come under pressure from the international community to accept only a reduced Turkish military presence in the north and some form of right of intervention. Some complained that U.N. Adviser Eide was favoring the Turkish Cypriot view of \"reduce but not remove\" Turkish troops or security guarantees. Although opponents of the talks on both sides were invited to Geneva, four of the five major Greek Cypriot political parties took issue with Anastasiades over his positions. Akinci fared no better, with leaders of the Turkish Cypriot government apparently objecting to the map he presented. The opposition forces were so effective at making their views known that Anastasiades had to ask his detractors to calm down and Akinci asked his people to have patience. "], "subsections": []}]}, {"section_title": "Talks Suspended, Uncertain Times", "paragraphs": ["The two sides' inability to make discernable progress toward a final solution at both Mont Pelerin and Geneva underscored the difficulties of reaching agreement on both territorial adjustments and security guarantees. Turkey's injection of the four freedoms issue could have been an attempt by Ankara to stall the negotiations until after the April referendum in Turkey, while Akinci still wanted Anastasiades to step back from his reported comments that the Turkish Cypriots had to face the fact of a minority status on the island. Nevertheless, as was the case after the failure of Mont Pelerin, both sides anticipated that the two leaders' good relationship would allow negotiations to resume, at least between the Cypriots, after a short time of reflection. ", "The talks did resume on January 27, 2017, and two additional sessions were held in the beginning of February. During that time, the discussions focused on the four freedoms issue and on how and when a possible second Geneva conference could be convened. Anastasiades continued to refuse to discuss the four freedoms and called on the EU to support his position that only the EU could make that decision once an agreement was reached and the north entered the EU. Akinci, for his part, suggested that a new Geneva conference could be held by the end of March 2017, although many thought that unlikely given the mid-April referendum in Turkey. ", "On February 13, however, the negotiations hit a wall. That day, the Greek Cypriot parliament approved a proposal submitted by the right-wing ELAM political party to introduce an annual event in the form of a reading and discussion in public schools to mark the January 1950 referendum on enosis (the union of Cyprus with Greece). Nineteen members of parliament from five parties voted in favor of the proposal, 16 AKEL MPs voted against, and DISY MPs abstained.\u00a0Akinci was livid that Anastasiades's party did not oppose the legislation and demanded that Anastasiades take action to retract the resolution. Akinci notified the Greek Cypriots that the meeting of the technical negotiators scheduled for the next day would be canceled.", "When the two leaders met for their regularly scheduled meeting on February 16, 2017, Akinci insisted that Anastasiades reverse the parliament's decision on a commemoration of the 1950 referendum, claiming the enosis issue underscored Turkish Cypriot concerns for their safety and security after a settlement and reinforced the argument for why Turkish troops should remain in the north.\u00a0When Anastasiades reacted by trying to downplay the legislation's significance, a debate ensued. Reportedly, Anastasiades left the room for a break and, when he returned, found that Akinci had left the meeting. Both sides blamed each other for walking out of the meeting.", "Over the next eight weeks, no meetings were held between Anastasiades and Akinci despite efforts by U.N. Special Adviser Eide and others to jumpstart the talks. Akinci stated that he would not return to the table until the enosis issue was retracted. In an interview with Anastasiades, the president said he hoped the Turkish Cypriot side and Turkey would reconsider the suspension and return to the negotiating table but he did not expect this to happen before the April referendum in Turkey. ", "While the talks were suspended, each side continued to blame the other for ending the negotiations, and each claimed that it was ready to resume discussions. Although Akinci and other Turkish Cypriot leaders were clearly angry over the enosis issue, some believe Akinci also was stalling on behalf of Turkey, since Ankara could not negotiate on security guarantees and troop deployments until after the vote on the constitutional referendum in Turkey. ", "Eventually, the Greek Cypriot parliament took action to partially reverse the enosis requirement by turning the decisions over how the Greek Cypriot school system would address the historical event to the Education Ministry. Although some in the north complained that this was not enough, and many in the south complained that the government had capitulated to the Turkish Cypriots, Akinci felt Anastasiades had made the effort to diffuse the tension and agreed to return to the talks.", "On April 11, 2017, after eight weeks of suspended negotiations, both sides agreed to resume the talks and scheduled additional meetings throughout May. ", "Although it is unclear whether any additional progress was made during the renewed negotiations, both sides did eventually begin to discuss the possible need for a new conference on Cyprus in Geneva that would again include the guarantor powers. However, there was prolonged disagreement over the conditions and issues to be addressed at a second conference. The Turkish Cypriots argued that Anastasiades placed preconditions on the meeting and that all outstanding issues should be tackled simultaneously. The Greek Cypriots appeared to want Geneva II to reverse the order of issues to be discussed, with negotiations on territory and security guarantees held first; if those negotiations were successful, the remaining issues in all negotiating chapters would then subsequently be resolved. Both sides agreed that a Geneva II conference would continue until all issues were resolved or until it was agreed that no solution was possible."], "subsections": [{"section_title": "Crans Montana\u2014The Last Negotiation?", "paragraphs": ["When the talk of a \"Geneva II\" conference began to run into trouble as both sides debated whether either side was setting preconditions that had to be met before any session could be convened, U.N. Secretary-General Antonio Guterres invited both Anastasiades and Akinci to New York for a June 4 dinner discussion on the viability of a second U.N.-hosted session in Geneva. After the dinner, both sides announced that a new conference would take place beginning June 28 at Crans Montana, just outside Geneva, with the purpose of finalizing an agreement, including on security guarantees and territory. Guterres also announced that U.N. Special Adviser Eide would prepare a common document to guide the discussions on security and guarantees, after consulting with the two Cypriot sides and the guarantor nations.", "After leaving New York, Anastasiades traveled to Washington, DC, to meet with Vice President Pence and others to discuss expectations of the upcoming Crans Montana conference. He also appeared to be interested in seeking a U.S. commitment to speak to Ankara in support of finding the necessary compromises needed to secure an agreement. Speaking to a group at the German Marshall Fund, Anastasiades again raised the idea of creating an international police force that would provide the necessary security guarantees sought by the Turkish Cypriots until the provisions of any final agreement were fully implemented and the north was fully integrated into the EU structures. When he earlier offered this proposal, Anastasiades indicated that Greek, Turkish, or UK forces could be part of the multinational force. However, some had suggested that a possible compromise on the concept of a multinational security force could allow Turkish military police or other security forces to be part of such a force but perhaps only if those forces remained in the north and would be under operational command of a third party, such as the U.N., the United States or NATO. ", "Following the announcement of the new conference in Crans Montana, U.N. Special Adviser Eide contacted officials of Greece, Turkey, the UK, and the two Cypriot parties to collect the \"bottom line\" positions of all sides on the security guarantee and troop level issues. Eide suggested he would discuss the outline of his findings with Anastasiades and Akinci, as well as the level of compromise each side may have been willing to entertain to reach an agreement. Eide hoped to present his document not as an official U.N. document but as a \"working roadmap\" to what the five parties would negotiate at Geneva. Presumably, Eide considered including other options for providing security, such as a multinational security force. Simultaneously, the other unresolved \"domestic\" issues would be discussed. ", "Observers of the negotiations were relieved that both sides, along with the three guarantor parties, particularly Turkey, were willing to resume at Crans Montana what had begun at Geneva in January. Others, however, remained skeptical of what actually could be accomplished, as there appeared to be little or no change in the positions on security guarantees and troops on either side. In addition, both Cypriot sides seemed to have changed their strategies for this new conference. It seemed clear at the outset that Anastasiades wanted to reach an agreement on the elimination of Turkish security guarantees and the removal of Turkish troops first; otherwise it would likely provide little political advantage for him to reach agreement on any other issues. For Akinci, it appeared that if he could win enough concessions on issues such as political equality and a rotating presidency, and could be comfortable as a coequal partner in the future of Cyprus, he might have been able to help Turkey make the necessary concessions on security that Ankara may not have been willing to accept otherwise. ", "In the election-charged atmosphere in Greek Cyprus, not everyone was pleased with the outcome. Anastasiades's political opponents accused him of abandoning all the preconditions he set for convening a new conference, including the debate on security and territory as a matter of priority. They also accused him of delegating to the U.N. the role of preparing a document on security, therefore giving up the Cypriot ownership of the process and placing the most crucial issue in the hands of Special Adviser Eide, who many felt had a biased attitude favoring Turkey.", "Before the opening session of the Crans Montana conference, controversy arose over the security-related \"roadmap\" U.N. Special Adviser Eide was preparing. In one report, Anastasiades apparently objected to some of the provisions, suggesting they were not points put forward by the Greek Cypriots and that he would not discuss the document in its current form. Eide apparently then abandoned the idea of tabling the discussion paper.", "On June 28, 2017, the Crans Montana conference opened, with both sides putting forward their long-held positions on security and their differences on the domestic issues. Almost immediately, and predictably, the talks became deadlocked over the security issues. The original plan for the conference called for U.N. Secretary-General Guterres to arrive in Crans Montana on June 30 to review the progress and hold additional meetings with the leaders. After arriving in Crans Montana and facing a deadlocked conference, Guterres apparently issued what was referred to as a \"non-paper\" addressing six points that he felt needed to be resolved and instructed the two sides to develop a package of proposals in response to his \"framework\" over the July 1-2 weekend. Guterres said he would return to Crans Montana if the proposals appeared to generate positive movement in the negotiations. "], "subsections": []}]}, {"section_title": "Negotiations Collapse\u2014Talks Suspended", "paragraphs": ["On July 3, 2017, both sides presented their counterproposals, which they claimed represented concessions from their previous positions. Turkey insisted that security guarantees under the existing treaties be retained but appeared to offer a proposal that included the withdrawal of most Turkish military forces. A small contingent of both Greek and Turkish forces would remain and their continued deployment would be reviewed in 15 years. The Greek Cypriots insisted that the Treaty of Guarantee be abolished, that most Turkish forces be withdrawn immediately, and\u2014although a small contingent (less than 1,000 each) of Greek and Turkish forces could initially be deployed\u2014that there had to be a clear, short sunset date for those forces to leave. Turkish Foreign Minister Cavusoglu stated that Turkey could not accept a \"zero guarantees, zero troops\" option and apparently warned that this would be the final conference and that a settlement had to be reached. ", "After several days of talks, little movement was achieved. It was reported that positions may have even hardened between July 3 and July 7, with Turkey insisting on a larger force to remain permanently and the Greek Cypriots withdrawing their proposal for a limited contingency force. Apparently there were also disagreements on several of the governance issues, such as the rotating presidency, the return of the town of Morphu to Greek Cypriot administration, and the rights of former and current owners of property located in the north.", "On July 7, 2017, U.N. Secretary-General Guterres acknowledged the failure of the negotiations to reach an agreement and announced that the conference would be closed. Guterres indicated that Special Adviser Eide would present a summary report to the Secretary-General and that the Secretary-General would issue a final assessment later in the year."], "subsections": [{"section_title": "The Guterres \"Framework\"", "paragraphs": ["Secretary-General Guterres's proposed \"framework\" set out six points for discussion. On security , the Guterres paper seemed to suggest that both sides \"must begin to recognize that in Cyprus a new security system was needed and not a continuation of the existing one.\" On t roops , Guterres suggested \"that there should be a rapid reduction from the first day, gradually decreasing within an agreed timetable to numbers that would be in line with the old Treaty of Alliance: 950 Greek officers, non-commissioned officers and men, and 650 Turkish officers, non-commissioned officers and men.\" On territory , Guterres's document says the Turkish Cypriot side needs to adjust the map to address some concerns of the Greek side. On equality , the framework seems to suggest that Turkish nationals living on Cyprus should have a quota that is equitable and that a further discussion is needed on what \"equitable\" means. On property , the framework suggests that in areas that would be returned to Greek Cypriot administration, the rightful owner would have preferential treatment, but not 100%.\u00a0In areas that would remain under Turkish Cypriot administration, preferential treatment would be given to current users, but not 100%. And finally, on p ower sharing , Guterres suggested that the issue needed to be discussed further, particularly on the issue of the rotating presidency.", "On September 28, 2017, Guterres issued his report. While offering a fairly positive assessment of the level of \"convergences\" both sides had made on each of the six negotiating chapters, his assessment seemed to indicate that only the economic chapter may have been ready to be closed, while the others still had issues to be worked out. In his conclusion, Guterres stated, \"I am convinced that the prospects of finally pushing this process 'over the finishing line' will remain elusive without the strongest of political will, courage and determination, mutual trust and a readiness on the part of all parties to take calculated risks in the last and most difficult mile of the negotiations.\" In the end, he said a \"historic opportunity was missed.\" Guterres, however, reiterated that the U.N. would be available to continue to host future discussions, if and when both sides were ready.", "In stating their assessments of the conference, both Cypriot sides blamed each other for refusing to make concessions. The Greek Cypriots and Greece also placed blame on Ankara. President Anastasiades indicated that he was ready to resume the negotiations, and, despite Guterres's assertion that this was not the end of the road, several news outlets reported that comments by Turkish Foreign Minister Cavusoglu suggested a Turkish decision to abandon the U.N. framework (bizonal, bicommunal federation) as a solution to the Cyprus problem and to move on to a \"Plan B.\" Several in the Turkish Cypriot government also echoed the theme that negotiations under the current U.N. structure were over. Others pointed out that Akinci may have suggested that the solution of a federation was not possible and that the Turkish Cypriot community would continue to improve its international relations with Turkey's assistance. \u00a0On August 5, 2017, it was reported that in a speech, Akinci suggested that the only solution now may be for two separate states to exist as neighbors, both in the EU. ", "In a late September meeting at the International Republican Institute in Washington, then-Turkish Cypriot \"foreign minister\" Tashsin Ertugruloglu stated that the Turkish Cypriots have moved on to a new view that any future negotiations must be based on two states, and that a solution could only include a confederation. More interesting for some at the meeting was Ertugruloglu's suggestion that he could envision establishing an autonomous republic where the Turkish Cypriots would leave authority on foreign affairs and defense to Turkey while the Turkish Cypriots would self-govern internally. Ertugruloglu's comments were met with a good deal of opposition in Cyprus, including from some Turkish Cypriots. ", "The suspension of the negotiations in July 2017 carried over into 2018 (referred to as a period of reflection) as both sides prepared to hold national elections. The 2017 introduction in the Greek Cypriot parliament of the controversial proposal to recognize the 1950 enosis referendum by several opposition political parties posed a serious challenge to Anastasiades and the negotiations. When the election campaign began, some observers felt Anastasiades could again come under a good deal of pressure from his presidential opponents for his failure to gain an acceptable outcome at Crans Montana and his role in squelching the enosis effort. Some believed that entire episode raised the issue of trust with Akinci. During the election campaign, negative views about the negotiation framework were expressed by several Greek Cypriot presidential candidates who questioned the continuation of the goal of a bizonal, bicommunal, federal solution. ", "Many in the north who once looked favorably on Anastasiades's efforts to seek a solution began to feel that the election campaign would leave Anastasiades little room to argue for a settlement if he were reelected. ", "Anastasiades was reelected president after a second round of voting. Unlike when Anastasiades was first elected as a pro-Annan Plan leader, however, this time many Turkish Cypriots, including Akinci, apparently did not anticipate much of a change in the positions Anastasiades had taken during the negotiations. Akinci then stated that the negotiations could not resume under the same U.N. parameters that existed before the collapse of the talks, which he believed had yielded little return. Akinci raised the issue of political equality and demanded a deadline as preconditions for the resumption of talks. Most observers believed the bizonal, bicommunal approach was still valid, but it was unclear whether the new framework raised by Akinci meant a simple review and public agreement on how both sides defined a bizonal, bicommunal federal solution or whether Akinci had begun to shift to a looser \"confederation\" approach with two separate states. It also was unclear how existing U.N. parameters could be changed. ", "Immediately after the elections in the south, parliamentary elections took place in February 2018 in the north. The election outcome resulted in a new four-party coalition government that some believed would likely be more supportive of Akinci's efforts to renegotiate a new approach to a solution with Anastasiades than the previous government, which was led by those opposed to an agreement or skeptical that an acceptable agreement could be achieved. The new government included two former Turkish Cypriot negotiators, Ozdil Nami (the most recent negotiator) and Kudret Ozersay.", "The negotiations, however, did not resume immediately after the elections. Anastasiades restated his readiness to restart negotiations and invited Akinci to meet with him informally to discuss the road ahead. Akinci signaled his intention to meet with Anastasiades but only to try to determine exactly what Anastasiades wanted to negotiate and how long it might take. Akinici reiterated his view that the framework of the negotiations had to change. In the interim, tensions over the issue of energy resources spiked, forcing both sides to delay any new meeting.", "During March and early April 2018, as both sides struggled over the issue of resuming negotiations, they seemed to consider the idea that any new negotiations should begin with the governance issues. In an April 2018 interview in Politis , Greek Cypriot negotiator Mavroyiannis admitted there were differences in every negotiating chapter but that the Greek Cypriot side had accepted the effective participation of the Turkish Cypriots in a council of ministers, the parliament, an equally divided senate, and the judiciary.\u00a0Mavroyiannis also suggested the Greek Cypriots could accept a rotating presidency, but only with a single ticket and weighted voting. Akinci suggested that the issue of a rotating presidency, among others, had not been resolved.", "On April 16, 2018, the two leaders sat down over the course of three hours of meetings and dinner, hosted by the U.N., to discuss the road ahead for the negotiations. Expectations were low, and after the meeting both sides acknowledged that no progress had been made with respect to changes in positions or if and when the negotiations would resume. Each side suggested the other needed a change in attitude for any new negotiations to be successful. ", "In May 2018, Akinci, despite his earlier comments regarding a new format for the talks, suggested negotiations could possibly resume from where they left off at Crans Montana if both sides agreed to adopt as a strategic agreement the six-point framework presented by U.N. Secretary-General Guterres on June 30, 2017. Anastasiades rejected a strategic agreement approach, and both sides broke into an extended disagreement over which Guterres document of July the other side was referring to as the framework to be used. Some observers, however, believed that if resuming the talks where they left off at Crans Montana meant starting with the security issues, then the talks were unlikely to resume. ", "Other issues also complicated the talks' resumption. In April 2018, Turkish Foreign Minister Cavusoglu visited the north and suggested the Turkish Cypriots consider negotiating for a \"confederation\" of two equal states instead of a federation. In May, Cavusoglu again stated that the talks should shift to a confederation or even a \"two-state\" approach. Akinci apparently did not embrace this approach, and the Greek Cypriots rejected it outright, arguing that it did not fall within the agreed framework of a bizonal, bicommunal federation. "], "subsections": []}]}, {"section_title": "U.N. Attempts to Break the Deadlock", "paragraphs": ["In an attempt to assess the two sides' interest in resuming the negotiations and break the stalemate, U.N. Secretary-General Antonio Guterres in July 2018 appointed Jane Holl Lute as his new special adviser to Cyprus. Lute's mission was to consult not only with the two Cypriot leaders but also with Athens, Ankara, and London to assess their perspectives on the future of the Cyprus problem and to determine if sufficient conditions existed for the negotiations to resume. It was unclear why U.N. Representative Elizabeth Spehar's earlier meetings with both leaders could not have helped the Secretary-General make a determination on both sides' political will to restart the negotiations. Nevertheless, Lute conducted a first round of consultations and presented her report to the Secretary-General in September 2018. Lute apparently found some positive aspects but no clear indication that the two sides were ready to resume the negotiations. At the U.N. General Assembly session in September, Guterres met with both Cypriot leaders but apparently found no changes in what Lute had reported. Guterres then submitted a report of Lute's findings to the Security Council. ", "The Secretary-General's report did not break any new ground and essentially restated the option that his July 2017 six-point \"framework\" presented at Crans Montana should be used as the starting point. The Security Council recommended that the U.N. not abandon the negotiations, if possible. At the time, observers, despite what they may have believed were less-than-optimal conditions for resuming the negotiations, likely assumed that neither Cypriot leader was willing to walk away from the negotiations or that the Secretary-General had not foreseen any potential new hurdles to the eventual resumption of talks. With no apparent progress and little leverage, Guterres suggested that both sides, despite the most recent one-year \"period of reflection,\" take another time-out to consider a comprehensive negotiating plan and be ready to negotiate a solution when the U.N. felt the time was ripe to host the talks once again. ", "In mid-October 2018, Anastasiades and Akinci agreed to meet informally to discuss the possible road ahead. Although they could not find common ground on which to restart the talks, Secretary-General Guterres saw a new opportunity to move the process. He ordered Lute to follow up on the Anastasiades/Akinci meeting and conduct yet another round of consultations with the two Cypriot leaders and the three guarantor countries. This time, however, the Secretary-General tasked Lute to determine during her consultations whether there were grounds for the two leaders to accept what Guterres referred to as a \"terms of reference\" document that would include his original 2017 six-point framework, those issues on which both sides previously agreed \"convergences\" had been reached, and a road map for when and how new negotiations would be launched. ", "Lute was given until the end of December 2018 to meet with the principals and construct the terms of reference document. Some thought Lute's deadline was too ambitious, as it was unclear, despite having the Guterres framework for over a year, whether either side would agree to the provisions of the six-point framework (both had expressed objections to parts of it in the past) or whether both sides, despite years of negotiation, could agree on what constituted previous convergences. Observers noted that it took Anastasiades and Eroglu almost nine months in 2013-2014 to reach an agreement on a simple joint statement defining a set of negotiating goals or outcomes that both sides would strive to achieve once they restarted the talks. Some observers also suggested that both Cypriot leaders may have been wary of agreeing to the Guterres terms of reference process, as any agreed document could be interpreted by some as coming close to an interim agreement. Thus, from the beginning, finding agreement as to what would constitute the document was to be a major challenge for Lute. ", "At the same time, and for reasons that remain unclear, in fall 2018 Anastasiades surprised many by publicly suggesting consideration of an undefined, \"loose,\" or \"decentralized\" federation in which the two constituent states that would emerge under such a federation would have more powers than what had been discussed previously. Anastasiades also has suggested holding a conference in Cyprus to discuss the various parameters of his idea of a decentralized federation. In addition, some reports indicated he was not ruling out discussion of a confederation, which led several of Anastasiades's political opponents to suggest he was even considering a two-state solution. Some Turkish Cypriots expressed skepticism of Anastasiades's suggestion of a decentralized federation, seeing it as either a delaying tactic or a way to reach a settlement without giving the Turkish Cypriots the political equality they sought at any federal level.", "After Lute concluded her second round of consultations with all parties in mid-December, it apparently had become clear, once again, just how difficult this approach had become. Lute concluded she would have to return to the island in early January 2019 for further consultations. Lute's plan upon returning to Cyprus was to ask the two leaders to review her proposed ideas for a terms of reference document and agree to these terms as the basis upon which new negotiations would begin. It was clear that such an agreement would be difficult to achieve, and in fact Lute's return in early January was short-lived, as no agreement was reached.", "In April, Lute once again travelled to the island to gauge whether her consultations should continue and to determine the possibility of restarting the negotiations. When she arrived on April 7 she found an adamant Akinci insisting that restarting the formal negotiations could not happen until Turkish Cypriots achieved political equality, demanding that on all issues addressed at the federal level, at least one positive Turkish Cypriot vote would be necessary for the issue to go forward. Anastasiades rejected the idea that a positive Turkish Cypriot voted would be needed for all issues, claiming such a requirement could result in gridlock, but apparently did concede that on certain issues, he was willing to consider such a requirement. ", "For his part, Anastasiades resurrected an older concept of creating a mixed presidential/parliamentary system of government at the federal level that would include a president, who would be a Greek Cypriot, and a prime minister that would rotate between the two communities. Akinci rejected that proposal and criticized Anastasiades for backtracking on agreed \"convergences\" by dropping the idea of a rotating president, and for his unwillingness to accept the Turkish Cypriots as coequal partners in government. Other Turkish Cypriot political leaders criticized the proposal as creating a Greek Cypriot state.", "For Lute, four failed attempts to have both sides agree to a terms of reference document that she could present to Secretary-General Guterres as a starting point for resuming the negotiations lead some to note that resuming the negotiations was apparently no closer to being achieved than it was in June 2018. "], "subsections": []}]}, {"section_title": "Issues39", "paragraphs": ["Throughout much of the recent history of the Cyprus negotiations, both sides have periodically reported that various levels of convergences had been reached, mostly on the issues of EU affairs, governance, economics, citizenship, and how to resolve and compensate for disputed property. As intensely as the Cyprus negotiations have been followed in the press and by outside observers, it has always been difficult to determine with any specificity exactly what either side means by the term convergences when referring to agreements on the issues under negotiation. The negotiations are conducted under the principle that \"nothing is agreed until everything is agreed\"; thus, the term convergences has been used to describe likely agreement without admitting that agreements have actually been reached until all issues have been resolved.", "In his April 1, 2010, press conference, former Turkish Cypriot leader Talat stated that 31 \"joint documents\" had been prepared addressing a range of issues. It appeared that both sides agreed in principle that the new federal government would have powers over external relations, EU policies, citizenship, budget matters, and economic coordination. Within these, for instance, was apparently an understanding that one side would hold the portfolio of the foreign minister and the other side would hold the EU portfolio. Still another point had the equal constituent states covering most of the remainder of the governance issues. These convergences seemed to have been written into the later 2014 joint statement between Anastasiades and Akinci. It also appeared that the two sides had agreed on a Senate, equally represented, and a House proportionally represented based on population. There was also reportedly a convergence on a new judicial court that would have equal Turkish and Greek Cypriot representation and an agreement that Cyprus would be represented in the European Parliament by four Greek and two Turkish Cypriot members of parliament. A federal supreme court also was identified in the joint statement. Apparently, on April 15, 2018, in an interview in the Greek Cypriot Politis , Greek Cypriot negotiator Mavroyiannis confirmed that many of these convergences had been reached.", "When Anastasiades and Akinci began their negotiations, it was not clear specifically what the starting point of the negotiations had been beyond the joint statement issued in 2014. Eroglu apparently drew some pretty strong red lines around some issues, and Akinci initially had not appeared, at least publically, to have adopted or refuted any particular positions advocated by Eroglu, although many expected that to happen on some issues. Although reports out of Cyprus by the end of 2016 suggested that more than 90% of the governance, power sharing, economy, and European Union issues had fallen under the term convergences, other reports indicated that many technical issues remained unresolved. In his September 2017 report on his mission of good offices in Cyprus, U.N. Secretary-General Guterres appeared to reaffirm that these convergences had been reached. ", "One issue both sides continued to differ over was how a new, united Cyprus would be created. The Greek Cypriots assumed that the new unified state would evolve from the existing Republic of Cyprus. The Turkish Cypriots wanted the new state to be based on two equal \"founding states.\" Eroglu had reiterated that he was not prepared to give up the TRNC. The Turkish Cypriots also wanted the new entity referred to as something other than the \"Republic of Cyprus.\" The joint statement agreed to by Anastasiades and Eroglu in 2014 simply referred to a \"united\" Cyprus, not a united \"Republic of Cyprus.\" The Anastasiades/Akinci talks initially seemed to suggest that the new entity could be referred to as something such as the \"Federal or United Republic of Cyprus,\" but it was unclear how the two sides would get there. In mid-December 2015, Anastasiades stated that \"no one was aiming to abolish the Republic of Cyprus,\" rather \"what we are pursuing is the evolution of the Republic of Cyprus into a bizonal, bicommunal federation.\" ", "In public statements, including in Washington in summer 2016, then-Turkish Cypriot \"foreign minister\" Ertugruloglu and others suggested that no agreement could be signed between the leadership of a \"Republic of Cyprus\" and the leader of the Turkish Cypriot \"community.\" For Ertugruloglu, it appeared that sovereign equality was not the same as political equality, suggesting that the Turkish Cypriots could not accept an agreement unless it was signed by two equal sovereign leaders, implying that recognition of the Turkish Republic of Northern Cyprus was a requirement for a final agreement. In response, then-Greek Cypriot government spokesman Nicos Christodoulides said under no circumstances can \"the regime in the occupied areas be upgraded since it is the product of an illegal action.\" In late 2016, as both sides talked about convening a five-party conference to settle the issue of security and to sign a new agreement, controversy erupted over whether the Greek Cypriots would be represented as the republic. Anastasiades stated that the Republic of Cyprus, as a signatory to the Treaty of Guarantee, had to be represented at the conference. During the Geneva talks in January 2017, the term \"United Federal Cyprus\" appeared in numerous references to the federal entity that would be created by an agreement. In addition, the Turkish Cypriots apparently also raised the idea that political equality had to include equality for Turkish Cypriots in the new federal entity and that they could not accept a \"minority\" status or representation in any new federal entity. ", "More recently, the Turkish Cypriots championed the concept of \"effective participation,\" meaning that on any decision taken at the new federal level, there would have to be at least one positive Turkish Cypriot vote in favor of the decision for that decision to take effect. Anastasiades suggested this would effectively give the Turkish Cypriots a veto over every decision that its representatives did not agree with. When the Crans Montana conference began, it appeared that Anastasiades and Akinci may have worked out an understanding on both the issues of political equality and effective participation, but such a convergence was not made public. In April 2018, Anastasiades appeared to have suggested that codecision could not be accepted. Since then, Akinci has continuously demanded agreement on political equality for the Turkish Cypriots, suggesting this issue remains unresolved.", "One highly sensitive issue under the governance chapter involves that of a rotating president and vice president for an elected term. The Greek Cypriots reportedly had proposed the direct election of a president and vice president on the same ticket with weighted cross-community voting for a six-year term. The president would be a Greek Cypriot for four years, and the vice president would be a Turkish Cypriot; they would then rotate offices, with the Turkish Cypriot becoming president for two years. Turkish Cypriots initially proposed that the executive have two alternating presidents elected by the Senate. Turkish Cypriots were opposed to a single list of Greek Cypriot and Turkish Cypriot candidates to be elected by all of the people of Cyprus principally because Greek Cypriots, by virtue of their majority, could in effect elect the Turkish Cypriot candidate of their preference. At some point, former Turkish Cypriot leader Talat seemed to have made a significant concession in agreeing to accept the Greek position for the election of a president and vice president but only with a weighted cross-community system to address the Turkish Cypriot concerns over the power of the Greek Cypriot majority to elect the Turkish Cypriot candidate, even though he continued to have doubts about direct popular voting. ", "Although the idea of a rotating presidency was not new, opposition to the proposal was, and continues to be, vocal on the Greek Cypriot side, as many Greek Cypriots apparently could not accept the idea of being governed by a representative what many believe is still the Turkish Cypriot minority. It had been reported that in July 2014, Anastasiades retreated on the notion of a rotating presidency, proposing the old idea that future presidents be Greek Cypriots and future vice presidents be Turkish Cypriots elected directly by all voters. The Turkish Cypriots rejected the proposal. Akinci, in early August 2016 and subsequently on numerous times, suggested that a rotating presidency elected with weighted voting was a must in order to have political equality. ", "Although a rotating presidency would apply only to the federal entity and would have limited authority over the daily lives of most citizens in either community, several Greek Cypriot political parties continue to oppose the concept. Greek Cypriot Archbishop Chrysostomos stated his opposition to a rotating presidency, saying that no population of only 18% should be permitted to elect the president.", "During the Geneva conference, it was reported that a five-year rotating presidency would be created with the Greek Cypriots holding the office for approximately a little over three years and a Turkish Cypriot for just under two years. However, other iterations of the convergence also had arisen. It was reported that at Crans Montana, Anastasiades had held out a concession on the rotating president in return for a Turkish concession on security guarantees. In April 2018, Akinci reiterated that the issue of a rotating presidency had not been resolved and was an absolute requirement on a 2:1 basis. Akinci stated that Anastasiades had not reconciled this matter with the Greek Cypriots. ", "The presidency, however, was only one of several sticking points. For instance, the question of which community would hold the portfolio of foreign minister and how external policy would be made also was controversial, as both sides hold different views on, for instance, Turkey. It also was unclear how a new Turkish Cypriot state could maintain traditional ties to Ankara or the Greek Cypriot state could maintain ties to Athens in light of long-held hostility toward both Greece and Turkey. ", "The thorny and emotional issue of property had been the focus of a significant debate between by Anastasiades and Akinci. As a result of the ethnic strife of the 1960s and the deployment of Turkish military forces on the island in 1974, it was estimated that over 150,000 Greek Cypriots living in the north were forced south and close to 50,000 Turkish Cypriots living in the south fled to the north, with both communities leaving behind large amounts of vacated property, especially in the north. Greek Cypriots had long insisted that the original and legal owners who lost properties in the north must have the right to decide how to deal with their property, whether through recovery, exchange, or compensation. Turkish Cypriots believe that the current inhabitant of a property must have priority and that the issue should be resolved through compensation, exchange of alternate property, or restitution. To try to help resolve some of the property issues, the Turkish Cypriots established the Immovable Property Commission (IPC) to hear cases related to Greek Cypriot property claims in the north. The Greek Cypriots initially rejected the IPC. Only a few private Greek property owners have filed claims for compensation with the IPC, and funding for the IPC has become controversial in the north. ", "Although the gap in the respective Cypriot positions on property had been wide, it appeared that positive movement had been achieved by 2017. In July 2015, Anastasiades and Akinci seemed to agree that former property owners would be offered various choices regarding their claims that would allow all involved to be fairly compensated. For the Turkish Cypriots, however, only a limited number of Greek Cypriots would be permitted to return to or take actual ownership of their properties. However, it appeared that any settlement might involve between \u20ac25 billion and \u20ac30 billion, a price tag the new \"federal\" entity might not be able to afford. At Crans Montana, U.N. Secretary-General Guterres's six-point framework proposed that in areas that would be returned to Greek Cypriot administration, the rightful owner would have preferential treatment.\u00a0In areas that would remain under Turkish Cypriot administration, current users would have preferential treatment. ", "The question of overall territory that would come under the jurisdiction of the two equal states remains in dispute. The Turkish Cypriot side of the \"green line\" currently includes approximately 37% of the island and includes several areas that had been inhabited almost entirely by Greek Cypriots before the 1974 division, such as Varosha, Morphou, and Karpas. Greek Cypriots have long wanted all of that territory returned, which would leave the Turkish Cypriot side controlling about 28% of the territory. At the time, Christofias resurrected an older proposal that would have the Turkish side return the uninhabited city of Varosha to Greek Cyprus in exchange for opening the seaport of Famagusta for use by the Turkish Cypriots to conduct international trade. The port would be operated by the EU and a joint Greek/Turkish Cypriot administration, thus allowing direct trade between northern Cyprus and the EU. The European Parliament declined to consider an EU Commission initiative to permit direct trade on technical grounds, but its 2011 report on Turkey's EU accession progress (introduced in parliament in 2012) called for that very trade-off offered by Christofias. ", "After the 2013 Greek Cypriot elections, President Anastasiades resurrected the proposal in the form of a \"confidence-building\" measure to test the sincerity of the Turkish Cypriots and Turkey to move forward in the negotiations. In early August 2014, it was reported that Anastasiades had upped the ante by suggesting that no agreement could be reached unless the town of Morphou was also returned to the republic. The Turkish Cypriots quickly rejected the idea, saying the town would not be returned. After Turkish Cypriot leader Akinci took office, Anastasiades again included the Varosha/Famagusta option as a confidence-building measure. As in the past, Akinci rejected the return of Morphou as part of a final settlement. Understanding the sensitivity of this issue for both leaders, Akinci had suggested that the discussions of territorial adjustments be held off the island and away from potential leaks that could set off a firestorm of protests from either side.", "At the November 2016 meetings at Mont Pelerin, Switzerland, the two sides agreed to discuss three issues regarding territory: percentage of land to be administered by each constituent state, the number of Greek Cypriots who would be allowed to return to the new territories given back to the Greek Cypriots, and the shoreline. Following Mont Pelerin, both sides, in agreeing to meet in Geneva in January 2017, agreed to present maps indicating their proposals for a territorial adjustment. ", "As noted, the Turkish Cypriots administer approximately 37% of the island. At Geneva, the Greek Cypriots proposed long-standing views that the boundaries be redrawn such that the Turkish Cypriots would control approximately 28.2% of the island and that some 90,000 displaced Greek Cypriots could return to those areas gained back by the Greek Cypriots. Some of the territory\u2014such as the cities of Verosha, parts of Famagusta, and Morphou\u2014would come under direct control of the Greek Cypriots whereas other areas that once had large Greek Cypriot populations would either come under control of the Greek Cypriots or become \"enclaves\" under the administration of the new federal government. The Greek Cypriots also wanted additional shoreline along the east coast of the island, including part of Karpas. ", "The Turkish Cypriots insisted on controlling at least 29.2% of the island, with as straight of a border between the two constituent states as possible; no enclaves; and only 65,000-72,000 returning Greek Cypriots. The Turkish Cypriots also expressed a willingness to meet the Greek Cypriot demand for more shoreline, but only if the new shoreline territory was made into state parks so that no new Greek Cypriot communities could settle in those areas.", "On all three points, the leaders failed to reach an agreement at Mont Pelerin and again in Geneva in January 2017. For the first time at Geneva, both sides had presented maps outlining the territorial concessions they were prepared to make. However, when the Turkish Cypriot representatives rejected the return of Morphou, which was included in the Greek Cypriot map, and insisted that additional territory, including the area of Kokkina, be added to Morphou and remain under Turkish Cypriot jurisdiction in exchange for Verosha and parts of Famagusta, the discussions broke down. Both sides apparently withdrew their maps.", "At Crans Montana, it was reported that Akinci appeared willing to return part but not all of the town of Morphu to the Greek Cypriots but that Akinci wanted to retain additional territory that the Greek Cypriots had requested be returned.", "In July 2010, President Christofias, seeking to unlock the stalemate on territory, tabled a citizenship proposal that would have linked property, territory, and the number of citizens permitted to reside in the north into one agreement. The offer included an agreement to allow 50,000 mainland Turks who had settled in the north to remain in the north. Eroglu had indicated that any final solution could not result in significant social upheaval in north Cyprus, meaning that significant numbers of citizens of the north, whether from the mainland or not, could not be forced to leave, and only a small number of Greek Cypriots would be permitted to return to property in the north. Eroglu rejected the offer from Christofias, stating that \"no one on Cyprus is any longer a refugee\" and that sending mainland Turkish settlers back to Turkey was not something he could agree to. Eroglu had also reiterated in his talks with Anastasiades that the number of mainland Turks who had settled in the north and who would be allowed to remain on the island would have to be higher than previously discussed. ", "After the joint statement was agreed to in February 2014, Turkish Cypriot representatives were reported to have stated that no citizens of the north would be required to leave the country. In a talk given at the Woodrow Wilson Center in Washington, DC, on February 28, 2014, the then-Cyprus ambassador to the United States speculated that a resolution of the Cyprus problem could conceivably allow for mainland Turks, who came to the island as long ago as 40 years and had established clear roots in the north, to remain on the island. ", "Akinci, perhaps not wishing to antagonize what had become a majority of the population in the north, initially stayed away from this issue. However, apparently through the negotiations he and Anastasiades may have agreed to at least set population sizes in both of the \"constituent\" states that would emerge as part of an agreement. The population for the Turkish Cypriots was apparently set at 220,000, although Akinci seemed to want another 50,000, while the Greek Cypriot population would be approximately 802,000. This ratio, while including a sizable number of mainland Turks who have since become citizens in the north, would be close to the ratio of the island's population in 1960. Nevertheless, several of the Greek Cypriot political parties appear to remain opposed to any agreement that would allow a large number of \"settlers\" to remain on the island. ", "In the summer of 2016, there were reports that Ankara had wanted the Turkish Cypriot government to speed up the process of \"citizenship\" for more of the mainland Turks living in the north. In August, some news accounts in the media claimed that the Ozgurgun government was trying to rush citizenship for around 26,000 additional mainland Turks before a final agreement was reached. Greek Cypriot political parties jumped on the news and claimed Ozgurgun was trying to sabotage the negotiations. In January 2017, it was reported that Turkish Deputy Prime Minister Turkes stated that there were some 300,000 Turkish Cypriots in the north so the population sizes of the two constituent states would have to be adjusted. In May 2017, Anastasiades reportedly told a meeting of the Greek Cypriot National Council that Akinci had retreated from previous convergences, including accepting a 4:1 ratio of populations.", "In his September 2017 report to the Security Council, Secretary-General Guterres stated that the \"sensitive issue of citizenship, with its links to other key aspects, including the exercise of civil and political rights in the future united Cyprus, was almost completely concluded, with only certain details left to be agreed.\"", "Next to the property and territory issues, the issues of security guarantees and Turkish troop deployments continue to be the most difficult bridges to cross. These issues became real stumbling blocks as the two sides met in Geneva in January 2017 and at Crans Montana in July 2017, and they resulted in the collapse of both meetings. The Greek Cypriots long have argued that all Turkish military forces would have to leave the island, beginning immediately after an agreement was adopted. They argue that the U.N. or the EU can offer security guarantees to all citizens in the two member states. Therefore, once the entire island became part of the EU, the Greek Cypriots see no reason for guarantees from third countries, such as Turkey, Greece, or the United Kingdom. By contrast, Turkish Cypriots and Turkey long had maintained that the 1960 Treaties of Guarantee and Alliance must be retained in some form in any settlement, because, without guarantees, the Turkish Cypriots would feel insecure based on their history with ethnic violence on the island in the 1960s. They continuously point out that the U.N. had forces on the island even before the 1974 violence that were unable to prevent the military coup against the Makarios government or to protect the Turkish Cypriot population. They argue that the Greek Cypriots maintain a 12,000-man, fully armed National Guard, while the Turkish Cypriot security forces are smaller and less well equipped and have to rely on the presence of the Turkish military for security. Eroglu had stated on several past occasions that \"the security guarantees with Motherland Turkey could not be changed.\" After the February 2014 joint statement was agreed to, it was reported that Eroglu had again stated that Turkish troops would not leave the island. ", "It remained unclear for a while whether Akinci held the traditional Turkish hard line. He clearly did not want to antagonize Ankara over this issue by going too far into the negotiating process without including Turkey, but he also appeared to have not gone out of his way to focus on the issue. Some suggested that Akinci, while not wanting to abandon the Treaty of Guarantee altogether, may have been willing to adjust the provisions regarding when or under what pretext Turkey could intervene in northern Cyprus in the future and to include the gradual withdrawal of most Turkish military forces, leaving only a small garrison on the island. In one August 2016 news article, it was suggested that Anastasiades had put forward the option that a multinational police force, made up of U.N. or EU personnel with some Turkish police, could be created to support the new federal entity. The Turkish Cypriots and Turkey rejected the idea. ", "In the lead-up to the Mont Pelerin and Geneva conferences, most of the public demands for continued Turkish security guarantees and military presence in the north came from former \"foreign minister\" Ozgurgun and others in the Turkish Cypriot government who had stated that no agreement could be accepted without the guarantees. Ozgurgun reportedly stated that in conversations with Akinci, he was assured that Turkey must continue to play a role in the security of the north. Nevertheless, as the negotiators at Geneva opened the security guarantees \"chapter,\" the rhetoric increased. Greek Cypriots, and Greece, continued to insist that no guarantees were necessary and, on their part, no agreement could be accepted that would allow Turkey to intervene on the island or to retain a military presence there. In April 2016, the Greek foreign minister reportedly suggested that no final agreement on Cyprus could be achieved until all Turkish military forces agreed to leave the island. With the two sides dug in, compromise seemed unrealistic.", "Once formal talks on security were begun in late fall 2016, both Cypriot sides appeared to soften their positions. In November 2016, Athens and Ankara agreed to begin bilateral discussions over the future of the guarantees in advance of a meeting between the respective prime ministers and any five-party conference on the issue. According to some sources, although Turkey appeared willing to discuss a revised agreement on security, Ankara initially did not want to discuss the abolition of the guarantees or the complete withdrawal of the Turkish troops from Cyprus. Ankara apparently raised the idea of the establishment of a military base in the north and suggested that the timetable for the reduction of the Turkish military on the island could be 10-15 years.\u00a0The Greek Cypriots would not accept such provisions but reportedly may have proposed that a small contingent of Turkish troops could remain, but only for a short period of time. ", "At Geneva, Turkey, clearly keeping in mind the fate of its own constitutional reform referendum in April, took a hard line on the issues of continued Turkish security guarantees and troops on the island. The Greek Cypriots and Greece took a similar hard line in opposition to Turkey's continued presence. Apparently, at Geneva, Anastasiades reoffered his proposal for an international police force, this time, however, noting that Greek, Turkish, or UK forces would not be part of that multinational force. Turkey and the Turkish Cypriots rejected the idea again. Russia and others also suggested that the U.N. Security Council could serve as the initial guarantors of security, but that too was brushed aside. At Geneva, the EU was fully represented by the Commission President and the High Representative for Foreign and Security Policy, with each offering assurances that any solution could be adequately implemented and enforced by the EU. Nevertheless, the EU was not able to convince either Ankara or the Turkish Cypriots that it could guarantee the security and fair treatment of the Turkish Cypriot community, even though the north would become fully integrated into the united Cyprus under EU law. The lack of any appreciable progress on the security issue, in part, resulted in the January 12, 2017, session in Geneva being cut short without a resolution.", "The February 2017 dispute over the introduction of the enosis legislation in the Greek Cypriot Assembly (see above) led Akinci to complain that the enosis issue underscored Turkish Cypriot concerns for their safety and security after a settlement and reinforced the argument for why some level of Turkish troops should remain in the north as well as the need for some type of guarantees for Turkey to assist the Turkish Cypriots, if conditions changed on the island.\u00a0", "During the suspension of the talks between February and April 2017, U.N. Special Adviser Eide was reported to have been working out the details of some kind of bridging compromise between the two positions on security as a way to move the talks forward until after a solution was agreed and implementation begun. When the two sides announced that a new conference would be held in late June 2017 at Crans Montana, it was also revealed that Eide would prepare a security \"roadmap\" from which all five parties could negotiate. The Eide proposal would not be issued as a formal U.N. proposal but as a working paper that would outline the various positions each side had taken on the issue of security guarantees and the possible compromises that could be accepted. Although Eide consulted with the guarantor parties and the two Cypriot leaders, Anastasiades apparently objected to parts of the Eide document and the paper was not presented.", "At Crans Montana, the same security issues quickly forced the negotiations into deadlock. Although Turkey appeared ready to discuss the removal of most of its troops after an agreement was reached, Ankara rejected any \"zero troops, zero guarantees\" option and insisted on maintaining a small contingent of forces on the island for at least 15 years, when the issue would be revisited. Turkey refused to agree to any changes to its right to intervene in the north, although the Turkish Cypriots appeared to indicate some flexibility by Ankara on this as the presence of a contingent of Turkish military forces on the island could be used to respond to any problems incurred by the Turkish Cypriots during the implementation of an agreement. The Greek Cypriots and Greece held to their positions that the Treaty of Guarantee be abolished, although Greece suggested a new \"treaty of Friendship\" between Greece, Turkey, and Cyprus, which apparently would allow for consultations on complaints that implementation of the agreement was not being fulfilled from either Cypriot side. Greece and the Greek Cypriots again insisted that all Turkish troops be withdrawn from the island, although Anastasiades may have appeared ready to accept a small contingent of Turkish troops to remain on the island but only if that provision included a date for the final withdrawal of the remaining Turkish troops. ", "The Crans Montana talks clearly proved that the differences between the two sides on these two security issues had become too high a barrier to be the starting point, or focus, for any new round of negotiations. For many, these issues should be reserved until all the outstanding governance issues have been resolved and an international conference on security can be established again. By July 2018, it appeared that both sides had set the need for concessions regarding the security-related issues as a precondition for resuming the talks. The Greek Cypriots once again insisted that Turkey change its position on retaining troops and security guarantees, and the Turkish Cypriots and Ankara have argued that Anastasiades drop his \"zero troops, zero guarantees\" position. ", "In mid-December 2018, when U.N. Special Adviser Jane Holl Lute met with Turkish Foreign Minister Mevlut Cavusoglu, he reportedly said that those who dream of zero guarantees and zero troops should let it go, as such a thing will never happen. "], "subsections": [{"section_title": "Energy", "paragraphs": ["The introduction of the issue of energy resources resulted in yet another complication in the talks and has stalled the negotiations at times. The energy dispute has led to accusations, threats, and further distrust between the republic, the Turkish Cypriots, and Ankara. Initially, some observers thought the energy issue could have become a rallying point for stepped-up and hopefully successful negotiations in which both sides would enjoy the economic benefits of the newly found resources. However, the atmosphere quickly became poisoned. For some, the energy issue has become not only another lost opportunity but also the issue that has doomed the talks altogether. ", "For the Greek Cypriots, exploiting energy resources offered a potential financial windfall that could help the Cypriot economy and establish Cyprus as an important energy hub for Europe. The Turkish Cypriots, arguing that the energy resources belonged to all of Cyprus, feared the loss of significant revenue to their economy as long as the Greek Cypriots refused to include them until a solution to the division of Cyprus was concluded. For Ankara, insisting that the Turkish Cypriots be involved in the decisionmaking process may have been seen as the only practical way to preserve Turkey's position as a main supplier of non-Russian gas to Europe. Ankara supported the conclusions of some in the industry that the fastest and least expensive route to transport Israeli and Cypriot gas to Europe was via a pipeline through Turkey.", "For Eroglu, the energy issue had to be a part of the negotiations. The Greek Cypriots rejected such a proposal, stating that energy issues would be dealt with under any new \"federal\" system agreed to in the negotiations. Akinci, at first, seemed reluctant to press this issue, apparently accepting Anastasiades's promises that energy wealth would be shared by both sides and how that would be accomplished would be left to another time once a settlement was agreed. However, in July 2016, after the republic announced that it would proceed with the issuance of new licenses for additional gas exploration in the Cyprus EEZ, and in August 2016 when it was announced that the republic and Egypt would sign an agreement that could allow Cypriot gas to be shipped to Egypt in the future, both Turkey and the Turkish Cypriots raised objections, with some claiming these actions would harm the settlement negotiations. At Geneva, and despite the news that the French energy corporation, Total, would begin additional exploration in summer 2017 and that Cyprus, Greece, Israel, and Italy would renew discussions of a possible gas pipeline to Europe via Greece, the issue did not seem to impede discussions of the other, more immediate issues. ", "After the Geneva conference, Energy Ministers from the Republic of Cyprus, Israel, Greece, and Italy unveiled plans for an East Mediterranean pipeline running all the way from Israel to the coast of Greece and on to Italy. Total also announced that it would begin a new round of exploration in Cypriot waters during the first few weeks of July 2017. As expected, Turkey and the Turkish Cypriots reacted negatively, with Ankara threatening to take actions if the drilling commenced before an agreement on the Cyprus issue was achieved. ", "As the Crans Montana talks approached, the energy issue again came into play . In May 2017, Akinci stated that the next several months would be crucial in part because of the expected launch of new hydrocarbon exploration activities off the coast of south Cyprus. Turkey stated that it would begin its own exploration in two areas in Cypriot waters that Turkey claims are part of its EEZ and announced that a series of military exercises in the region had been scheduled for July. Some observers believed that Turkey's actions and Akinci's comments were an attempt to pressure Anastasiades to delay the exploration, particularly if the Crans Montana negotiations showed some promise. Others felt this move could set the stage for another confrontation between Turkey and the Republic of Cyprus. ", "When the Crans Montana conference collapsed, French energy firm Total moved its drilling platform, the West Capella, to its drilling site and commenced drilling in mid-July 2017. Ankara reiterated its objections, and Turkey issued a new NAVTEX reserving an area southwest of Cyprus for naval exercises with live ammunition. In the end, Total completed its drilling without incident. This new round of exploration apparently resulted in negligible findings. The Greek Cypriots had also approved additional drilling in 2018 by Total and Italy's ENI as well as by Exxon/Qatar. The ENI group began new drilling on December 31, 2017, in a new area. In February 2018, ENI announced that the drilling had produced a significant find of gas. ENI then announced it would move its drilling platform, Saipem 12000, to another area that is also claimed by Turkey. On February 11, Turkish warships appeared in the waters off the southern coast of Cyprus and attempted to impede the movement of Saipem 12000 to the disputed area. The Greek Cypriots, supported by the EU and others, reacted negatively to Turkey's activity. ", "Over the course of February and March, both Akinci and Ankara restated that the resources around the island belonged to all Cypriots and that the republic should halt further exploration and drilling unless the Turkish Cypriots were included in the planning and decisionmaking, a demand again rejected by Anastasiades. Turkey stepped up its military threats and indicated it would begin its own drilling inside one or two of the disputed blocks in the Cypriot EEZ. Some believe Turkey was concerned that the new gas finds could be significant enough to encourage the Greek Cypriots and others to move forward with various shipping and pipeline options that would exclude the possibility that the gas could eventually be piped across Turkey to Europe. Others felt the Greek Cypriots were trying to apply maximum pressure on the Turkish Cypriots to agree to compromise on several issues demanded by the Greek Cypriots as part of an eventual solution. ", "The United States and the EU both intervened, restating the republic's right to explore for natural resources in its EEZ but asking both the Greek and Turkish Cypriots to tone down the rhetoric and for Turkey not to provoke additional tensions over the energy issue. In a March 15, 2018, press conference welcoming the visit to Cyprus of U.S. Assistant Secretary of State for Europe and Eurasia Wess Mitchell, U.S. Ambassador Cathleen Doherty stated that while the United States supported the republic's right to exploratory activities in its EEZ, the island's energy resources should be fairly shared between both communities in the context of an overall settlement. The Ambassador said that even if the drilling located additional gas deposits, it may not be possible or feasible to commercialize those deposits right away, as costs associated with extraction and transportation may not make the resources viable. She noted that it could take several years, even decades, before all the conditions were right for revenues to begin flowing. In the interim, Ambassador Doherty intimated that the two sides and Turkey should stop the feuding and focus on a solution to the island's division. Assistant Secretary Mitchell, in a summer 2018 speech at the Heritage Foundation, reiterated the U.S. position and stated that Turkey should tone down its provocations in the waters south of Cyprus. He restated that view one week later at a hearing before the Senate Foreign Relations Committee.", "In November 2018, the energy partnership of Exxon-Mobil/Qatar Petroleum began gas exploration in block 10 of the Cypriot EEZ. Turkey revived its warnings about unilateral exploitation of the resources and announced its intentions to begin drilling in waters that both Ankara and Cyprus claim are part of their respective EEZs. In early 2019, Exxon-Mobile announced that it had found significant gas deposits and would continue to explore the feasibility of extraction.", "Up until the end of 2018, tensions between the United States and Turkey had threatened to play out over the drilling issue. A slight thaw in U.S.-Turkish relations restrained Turkey from taking any negative actions against Exxon-Mobile's early exploration. However, as Turkey deploys two drilling platforms in the same commercial blocks, tensions could spike again."], "subsections": []}]}, {"section_title": "Assessment", "paragraphs": ["When Mustafa Akinci was elected as leader of the Turkish Cypriots in 2015, many believed the window of opportunity for a permanent settlement of the Cyprus problem, for all intents closed by Ergolu, had been reopened. As \"mayor\" of the Turkish Cypriot portion of Nicosia, Akinci had been praised for working cooperatively with his Greek Cypriot counterparts on a number of infrastructure projects, leading some to take a positive view of the possibilities of a settlement between Anastasiades and Akinci. ", "While the political environment on both sides of the island immediately after the election of Akinci had taken on a positive air, with predictions that the negotiations could conclude quickly, the scene reminded Cyprus observers of the 2008 election of Christofias and the almost giddy atmosphere that arose over a possible quick solution to the division of the island with Turkish Cypriot leader Talat. Akinci, much as Talat had with Christofias, declared that he and Anastasiades were of the same generation and could relate more easily to each other and better understand the measures that both sides would have to take to achieve a solution. ", "Negotiations between Anastasiades and Akinci, once begun, got off to a fast start. For many, the first 20 months of the Anastasiades/Akinci era went well. Both leaders seemed to enjoy meeting with each other and doing public events together in a show of solidarity. The positive atmosphere of the negotiations raised hope among some that these two leaders might just reach a settlement. And, although the issues that have separated the two communities and prevented a solution for more than 44 years have long been clearly defined and repeatedly presented and debated by both sides, the chemistry between Anastasiades and Akinci, seen by many as an improvement over the Anastasiades/Eroglu relationship, seemed to allow the leaders to overcome some of the traditional barriers to a settlement more effectively than previous attempts by Cypriot leaders. ", "However, as the talks progressed, with more references to agreed convergences , both Anastasiades and Akinci, as those before them had experienced, began to hear public controversy and criticism of the negotiations emerge from the skeptics and opponents of an agreement. ", "Despite the inevitable level of domestic opposition in both communities and the inability to reach concrete agreements on several governance issues, as well as the security and guarantees issues, Anastasiades and Akinci, at least publicly, seemed determined to continue to seek a solution. The intensity of the negotiations beginning in fall 2016 and continuing through Mont Pelerin and Geneva in 2017 earned both leaders international praise for their commitment and persistence.", "To most observers, the fact that Anastasiades and Akinci appeared to have come closer to reaching a settlement by early 2017 than at any time since 2004, and that both sides, plus Greece and Turkey, were willing, after the failure at Geneva, to come together again at Crans Montana for another attempt to resolve their differences, seemed to support the growing optimism. Indeed, although a solution for that final settlement remained elusive, the negotiators maintained a level of optimism that a breakthrough was possible. ", "The failure of the Crans Montana conference, despite the framework presented by U.N. Secretary-General Guterres, appeared to be directly related to the disagreement over security issues. Ankara appeared unwilling to accept the replacement of Turkish security guarantees with guarantees from the EU or an interim international security force, despite the fact that some Turkish troops that might have remained under a compromise could have provided security to the Turkish Cypriots during the time the agreement was being implemented. It also appeared Ankara was not willing to forego its geostrategic interests and influence over the island by accepting a longer-term \"zero guarantees, zero troops\" option. Ankara insisted that some level of troops would remain on the island either permanently or at least for several years, a condition that they knew Anastasiades would continue to reject. Ankara's determination to build a permanent naval base in North Cyprus, raised again in December 2018, seemed to affirm this view.", "By summer 2018, however, Akinci indicated that he and Anastasiades no longer shared the same vision of what constituted a bizonal, bicommunal federation or whether such a form of government was even desirable at this point. Reports suggested that several governance issues long thought to have been part of the oft referred convergences , such as the rotating presidency, Turkish Cypriot codecision power, political equality, and the population mix in the north, not only appeared to remain unresolved but also may have been pulled back from the status of convergences. Some observers believed that if the two sides could not find common agreement on the governance issues, then arguing over troops and security, as seen at Geneva and Crans Montana, was a futile exercise. ", "In appointing Jane Holl Lute as his new adviser in July 2018, it appeared that Secretary-General Guterres specifically intended to challenge the sincerity of both sides to return to the negotiations. Guterres also appeared to have adopted Akinci's demand for a results-oriented negotiation, first by making it clear that both sides would have to agree to a \"terms of reference\" document that Lute would draft and then by not letting the talks become open-ended by allowing the terms of reference document, once presented, to be renegotiated. ", "The approach initially seemed to work: Anastasiades reportedly believed the terms of reference could reinforce his position that Turkish military forces would have to withdraw from the island and future security guarantees for the island would have to take another form. Akinci apparently saw some support for his demand for political equality for Turkish Cypriots. ", "Nevertheless, acceptance of the terms of reference would require the restoration of trust between the two leaders, between the Greek Cypriots and Ankara, and perhaps between Ankara and Akinci. As Lute started on her mission, it was unclear whether such trust could be restored. Akinci indicated he was no longer sure what type of solution Anastasiades was looking for and made it clear again that he could not accept changes to the security issues. Anastasiades apparently could not agree to how the Turkish Cypriots defined political equality. ", "Further complicating Lute's task was the fact that the political mindset surrounding the talks began to change, actually pointing both sides in opposite directions. In mid-fall 2018, Anastasiades surprised many by suggesting that both sides might consider some form of a \"decentralized\" federation. His proposal seemed to suggest that the two constituent states that would emerge under such a working agreement would have more powers than what had been discussed previously, even though he was slow in defining what those additional powers might be. It also was reported that Anastasiades suggested holding a conference in Cyprus to discuss the various parameters of either a decentralized federation or perhaps even a confederation. ", "This proposal resulted in the atmosphere becoming muddled. Some thought that after meeting with Turkish Foreign Minister Cavusoglu at the U.N. in New York, Anastasiades may have become convinced that Ankara would no longer accept a federal solution and that Anastasiades was looking for an acceptable middle ground. Some others assumed that Anastasiades was trying to buy time in the hope that the gas exploration being conducted by Exxon-Mobile and others would produce positive results, thus putting more pressure on the Turkish Cypriots to cut a deal in time to guarantee they would share in the potential revenues generated by the additional gas finds.", "Akinci expressed skepticism of Anastasiades's proposal, seeing it as undermining his support for a federal solution and a way to try to reach a settlement without giving the Turkish Cypriots the political equality they sought at any federal level. Anastasiades also came under heavy criticism from his political opponents, particularly the leadership of the AKEL party, for what they claimed was an abandonment of the goal of a federal solution.", "More importantly, when some Turkish and Turkish Cypriot government officials who had begun to sour on a federal solution, particularly Foreign Minister Ozersay, insisted the government should have a say in the negotiations, Akinci saw a growing challenge to his position. Ersin Tatar, the newly elected head of the opposition National Unity Party (UBP), indicated his party would not support a federal solution and would not be bound by Akinci's decisions. Tatar apparently threw his support behind a \"two-state\" solution. Some also pointed out that the decision by several of the original pro-federal solution political parties not to publicly defend Akinci had left him isolated. Some suggested that Akinci and Ankara were no longer on the same page. ", "By contrast, observers who saw Ankara attempting to sideline Akinci and move beyond a federal solution saw the infighting as a ploy to buy more time for Turkey to get through local elections in March and perhaps even the May European Parliament elections. In this strategy, the resumption of negotiations would not even be considered until at least June 2019.", "When the apparent rift between Akinci, Ozersay, and others became increasingly public, threatening Turkish Cypriot unity, Turkish Foreign Minister Cavasoglu traveled to Cyprus in late January 2019, apparently to bring all sides together and to try to end the public squabbling. Cavasoglu reiterated that Ankara wanted a permanent solution, no matter what it was, but that the Greek Cypriots had to determine what outcome they were willing to negotiate to achieve. ", "At the same time, some observers questioned whether special adviser Lute's mission could actually succeed, as it appeared that disagreement on several issues would not likely help achieve agreement on her eventual terms of reference document. For instance, Anastasiades did not accept a definition of political equality for the Turkish Cypriots favored by Akinci. Nor would he reverse his long-held position and accept a target deadline to conclude the talks. Cavasoglu's December 2018 comment that those who dream of an option with zero guarantees and zero troops should let it go, as such a thing will never happen, suggested that the Guterres framework, in which Turkish troops would begin to leave the island after an agreement is reached, could jeopardize the entire terms of reference from the start.", "These questions resulted Lute's inability to craft a terms of reference document by the end of 2018, and she stated she would have to return to the island for another round of consultations in early 2019. When she returned in early 2019, the rift between Anastasiades and Akinci centered on the issue of Turkish Cypriot political equality. Akinci demanded his proposal be accepted as a condition for resuming the negotiations. The idea was again rejected by Anastasiades. Subsequently, Lute found little basis for continuing her consultations and decided to meet with the guarantor powers. ", "Although the Greek and Turkish foreign ministers agreed to hold their own consultations on security, Lute saw no likely breakthrough between Anastasiades and Akinci. Nevertheless, Lute agreed to return to the island on April 7 for yet another round of consultations with the two leaders. ", "When Lute returned, she apparently found both sides seemingly farther apart. Aside from the long-standing disagreements between the two Cypriot sides, particularly on security and troops, a big sticking point was Akinci's insistence that the Turkish Cypriots have political equality in the new federal government rather than holding a minority status. Akinci repeated his demand that if a solution would result in two equal constituent states, under a federal structure, then the Turkish Cypriots should hold equal power on issues taken up at the federal level that would involve both constituent states. He proposed that on all issues there must be a positive Turkish Cypriot vote. Anastasiades again rejected that approach, claiming it would give the Turkish Cypriots an absolute veto over all policy issues and would subject Cyprus to the demands of Ankara, potentially resulting in gridlock. Anastasiades, however, apparently did express a willingness to discuss Akinci's proposal, but only for some issues. At the same time, Anastasiades resurrected an old proposal that the new government be a cross between a presidential system, in which the president would be a Greek Cypriot, and a parliamentary system in which a prime minister would rotate between the two communities. Akinci rejected this proposal, arguing that it reinforced his view that the Greek Cypriots will always see the Turkish Cypriots as a minority and not a coequal partner. Other Turkish Cypriot officials claimed this was an attempt by Anastasiades to establish a Greek Cypriot state on the island. ", "Lute's fourth return to Cyprus again failed to achieve an agreement between the two Cypriot leaders on a \"terms of reference\" document that would become the basis for restarting the negotiations and suggested that negotiations were unlikely to resume anytime soon. Secretary-General Guterres will now have to decide how to proceed. Continuing with the Lute mission without a chance of being successful may seem fruitless. Even if Anastasiades and Akinci could compromise on some form of an agreement on the definition of political equality for the Turkish Cypriots, questions still remain on what type of final governmental structure would be addressed, specifically, is the long-sought bizonal, bicommunal, federal solution for the island still attainable?", "The Guterres framework suggests that a new security framework was needed, particularly one that does not envision Turkey's automatic right to unilaterally intervene on the island. Would Ankara eventually accept that concept? Could Akinci argue successfully to his citizens that the new federal structure, loose or otherwise, with some version of political equality for the Turkish Cypriotst, the guarantees of EU law, and a more robust U.N. peacekeeping force in place, might be enough to argue for a new security arrangement regarding Turkish troops or Turkish security guarantees? Could either side accept a future NATO-led peacekeeping force, in which Turkish and Greek troops could participate as a reassurance to both sides? History might indicate a continued \"no\" to these questions.", "At the same time, relations between Turkey and the Greek Cypriots have become so tense over the energy exploration issue that neither side appears capable of backing down from its security demands, leaving little room for optimism that any kind of a solution can be achieved. Many also wonder whether either leader could sell any agreement to his community at this point.", "Some longtime observers of the negotiations in the international community expressed deep concern for the direction the dispute has taken since Crans Montana. For instance, in late 2017, the Business Monitor Internatio nal, part of the Fitch Group, downgraded its assessment of a new unification deal from slim to extremely remote. Its 2018 forecast likely will not have changed.", "Former British Foreign Secretary Jack Straw in 2017 restated a previous assessment that \"from the Greek Cypriot point of view, conceding political equality with the Turkish Cypriots means giving power away. But absent a real incentive for both sides\" to actually reach an agreement, \"the reality is\u00a0that no Greek Cypriot leader will ever be able to get their electorate behind a deal. The status quo for the south is simply too comfortable.\" ", "At this point, and despite the effort being put forward by U.N. Secretary-General Guterres to restart the negotiations, a final settlement for Cyprus remains elusive."], "subsections": []}]}}
{"id": "RL33741", "title": "Navy Littoral Combat Ship (LCS) Program: Background and Issues for Congress", "released_date": "2019-05-17T00:00:00", "summary": ["The Navy began procuring a small surface combatant called the Littoral Combat Ship (LCS) in FY2005, and a total of 35 LCSs have been procured through FY2019, including three in FY2019. The total of 35 LCSs is three more than the 32 the Navy says are required under its 355-ship force-level goal. The Navy wants FY2019 to be the final year of LCS procurement, and it has not requested the procurement of any additional LCSs in its FY2020 budget submission.", "The Navy wants to shift procurement of small surface combatants in FY2020 to a new frigate called the FFG(X). The Navy's proposed FY2020 budget requests funding for the procurement of the first FFG(X). Five industry teams are currently competing for the FFG(X) program. Two of these teams are offering designs for the FFG(X) that are modified versions of the two LCS designs that the Navy has procured in prior years. The other three industry teams are offering designs for the FFG(X) that are based on other existing ship designs. One of these three other industry teams is proposing to build its design at one of the LCS shipyards. The Navy plans to announce the outcome of the FFG(X) competition in the fourth quarter of FY2020. The FFG(X) program is covered in detail in another CRS report.", "The Navy's 355-ship force-level goal is the result of a Force Structure Analysis (FSA) that the Navy conducted in 2016. The 2016 FSA established a force-level goal for a 355-ship Navy with 52 small surface combatants, including 32 LCSs and 20 frigates. The Navy conducts a new or updated FSA every few years, and is currently conducting a new FSA that is scheduled to be completed by the end of 2019. Navy officials have stated that this new FSA will likely not reduce the required number of small surface combatants, and might increase it. Navy officials have also suggested that the Navy in coming years may shift to a new fleet architecture that will include, among other thing, a larger proportion of small surface combatants.", "The LCS is a relatively inexpensive surface combatant equipped with modular mission packages. The LCS program includes two very different LCS designs. One, called the LCS-1 or Freedom-class design, was developed by an industry team led by Lockheed. The other, called the LCS-2 or Independence-class design, was developed by an industry team that was then led by General Dynamics. LCS procurement has been divided more or less evenly between the two designs. The LCS-1 design is built at the Marinette Marine shipyard at Marinette, WI, with Lockheed as the prime contractor. The LCS-2 design is built at the Austal USA shipyard at Mobile, AL, with Austal USA as the prime contractor.", "The LCS program has been controversial over the years due to past cost growth, design and construction issues with the first LCSs, concerns over the survivability of LCSs (i.e., their ability to withstand battle damage), concerns over whether LCSs are sufficiently armed and would be able to perform their stated missions effectively, and concerns over the development and testing of the modular mission packages for LCSs. The Navy's execution of the program has been a matter of congressional oversight attention for several years.", "A current issue for Congress is whether to procure any LCSs in FY2020, and if so, how many. Opponents could argue that the total number of LCSs procured in prior years exceeds the Navy's stated requirement, and that adding funding to the Navy's FY2020 shipbuilding account for procuring one or more additional LCSs could reduce FY2020 funding for other Navy programs. Supporters could argue that procuring additional LCSs in FY2020 could provide a hedge against delays in the FFG(X) program and help the Navy achieve its small surface combatant force-level goal more quickly. Another issue for Congress concerns future workloads and employment levels at the two LCS shipyards if one or both of these yards are not involved in building FFG(X)s."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides background information and issues for Congress on the Navy's Littoral Combat Ship (LCS) program. A total of 35 LCSs have been procured through FY2019. The Navy wants FY2019 to be the final year of LCS procurement, and it has not requested the procurement of any additional LCSs in its FY2020 budget submission.", "The Navy wants to shift procurement of small surface combatants in FY2020 from the LCS to a new frigate called the FFG(X). The Navy's proposed FY2020 budget requests funding for the procurement of the first FFG(X). The FFG(X) program is covered in detail in CRS Report R44972, Navy Frigate (FFG[X]) Program: Background and Issues for Congress , by Ronald O'Rourke.", "A current issue for Congress regarding the LCS program is whether to procure any additional LCSs in FY2020, and if so, how many. Another issue for Congress concerns future workloads and employment levels at the two LCS shipyards if one or both of these yards are not involved in building FFG(X)s. Congress's decisions on the LCS program will affect Navy capabilities and funding requirements, and the shipbuilding industrial base.", "For an overview of the strategic and budgetary context in which the LCS program and other Navy shipbuilding programs may be considered, see CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress , by Ronald O'Rourke."], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "Navy's Force of Small Surface Combatants (SSCs)", "paragraphs": [], "subsections": [{"section_title": "SSC Definition", "paragraphs": ["In discussing its force-level goals and 30-year shipbuilding plans, the Navy organizes its surface combatants into large surface combatants (LSCs), meaning the Navy's cruisers and destroyers, and small surface combatants (SSCs), meaning the Navy's frigates, LCSs, mine warfare ships, and patrol craft. SSCs are smaller, less capable in some respects, and individually less expensive to procure, operate, and support than LSCs. SSCs can operate in conjunction with LSCs and other Navy ships, particularly in higher-threat operating environments, or independently, particularly in lower-threat operating environments."], "subsections": []}, {"section_title": "SSC Force Levels", "paragraphs": ["In December 2016, the Navy released a goal to achieve and maintain a Navy of 355 ships, including 52 SSCs, of which 32 are to be LCSs and 20 are to be FFG(X)s. Although patrol craft are SSCs, they do not count toward the 52-ship SSC force-level goal, because patrol craft are not considered battle force ships, which are the kind of ships that count toward the quoted size of the Navy and the Navy's force-level goal.", "At the end of FY2018, the Navy's force of SSCs totaled 27 battle force ships, including 0 frigates, 16 LCSs, and 11 mine warfare ships. Under the Navy's FY2020 30-year (FY2020-FY2049) shipbuilding plan, the SSC force is to grow to 52 ships (34 LCSs and 18 FFG[X]s) in FY2034, reach a peak of 62 ships (30 LCSs, 20 FFG[X]s, and 12 SSCs of a future design) in FY2040, and then decline to 50 ships (20 FFG[X]s and 30 SSCs of a future design) in FY2049."], "subsections": []}]}, {"section_title": "LCS Program", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The LCS is a relatively inexpensive Navy surface combatant that is to be equipped with modular \"plug-and-fight\" mission packages, including unmanned vehicles (UVs). The Navy announced the start of the LCS program on November 1, 2001. The first LCS was procured in FY2005, and a total of 35 have been procured through FY2018, including three in FY2019. As noted above, of the 35 that have been procured through FY2019, 16 had entered service as of the end of FY2018. ", "The LCS was designed to operate in contested littoral waters in conjunction with other Navy forces. The LCS's primary missions are antisubmarine warfare (ASW), mine countermeasures (MCM), and surface warfare (SUW) against small boats (including so-called \"swarm boats\"), particularly in littoral (i.e., near-shore) waters. The LCS program includes the development and procurement of ASW, MCM, and SUW modular mission packages. Additional potential missions for LCSs include peacetime engagement and partnership-building operations; intelligence, surveillance, and reconnaissance (ISR) operations; maritime security and intercept operations (including anti-piracy operations); support of Marines or special operations forces; and homeland defense operations. An LCS might perform these missions at any time, regardless of its installed mission package, although an installed mission package might enhance an LCS's ability to perform some of these missions.", "The LCS program has been controversial over the years due to past cost growth, design and construction issues with the first LCSs, concerns over the survivability of LCSs (i.e., their ability to withstand battle damage), concerns over whether LCSs are sufficiently armed and would be able to perform their stated missions effectively, and concerns over the development and testing of the modular mission packages for LCSs. The LCS program has been modified or restructured several times over the years, in part to address these issues. The Navy's execution of the program has been a matter of congressional oversight attention for several years, particularly for a period of about 10 years starting around 2007, when significant cost growth in the program came to light."], "subsections": []}, {"section_title": "Annual Procurement Quantities", "paragraphs": [" Table 1 shows past annual procurement quantities for LCSs. The Navy wants FY2019 to be the final year of LCS procurement, and it has not requested the procurement of any additional LCSs in its FY2020 budget submission."], "subsections": []}, {"section_title": "Two Designs Built by Two Shipyards", "paragraphs": ["The LCS program includes two very different LCS designs (see Figure 1 ). One, called the LCS-1 or Freedom-class design, was developed by an industry team led by Lockheed. The other, called the LCS-2 or Independence-class design, was developed by an industry team that was then led by General Dynamics. The LCS-1 design is based on a steel semi-planing monohull (with an aluminum superstructure), while the LCS-2 design is based on an all-aluminum trimaran hull. The two LCS designs also use different built-in combat systems (i.e., different collections of built-in sensors, computers, software, and tactical displays) that were designed by each industry team. The Navy states that both LCS designs meet the Key Performance Parameters (KPPs) for the LCS program.", "LCS procurement has been divided more or less evenly between the two designs. The LCS-1 design is built at the Fincantieri/Marinette Marine shipyard at Marinette, WI, with Lockheed as the prime contractor; these ships are designated LCS-1, LCS-3, LCS-5, and so on. The LCS-2 design is built at the Austal USA shipyard at Mobile, AL, with Austal USA as the prime contractor; these ships are designated LCS-2, LCS-4, LCS-6, and so on."], "subsections": []}, {"section_title": "Two Block Buy Contracts for Ships 5-26", "paragraphs": ["Ships 1 through 4 in the program were procured with single-ship contracts. The next 22 ships in the program (ships 5 through 26) were procured under two 10-ship block buy contracts that the Navy awarded to the two LCS builders in December 2010, and which were later extended in each case to include an 11 th ship. The Navy sought and received legislative authority from Congress in 2010 to award these block buy contracts."], "subsections": []}, {"section_title": "Modular Mission Packages", "paragraphs": ["Current Navy plans call for procuring a total of 44 LCS mission packages (10 ASW, 24 MCM, and 10 SUW). The Navy has not announced whether the figure of 44 mission packages will be adjusted upward to account for the procurement of a total of 35 rather than 32 LCSs. LCS mission packages have been under development since the early days of the LCS program. The Navy's plan is to develop and deploy initial versions of these packages, followed by development and procurement of more capable versions. The development, testing, and certification of LCS mission packages has been a significant and continuing oversight issue for Congress for the LCS program. The Navy states that", "The Navy achieved Initial Operating Capability (IOC) of the final component of the SUW Mission Package (MP), the Surface to Surface Missile module. The Navy worked with the Director, Operational Test and Evaluation to improve the test design, employ best practices, and make data driven decisions. The team jointly delivered a fully compliant test outcome, while simultaneously reducing the number of developmental test and operational test raid events. As a result, the Department reduced costs while completing operational tests of the SUW MP two months early. The ASW Mission Package Pre-Production Test Article was delivered in November 2018 and ASW MP conducted end-to-end testing at the Navy's Atlantic Undersea Test and Evaluation Center in January 2019. All of the MCM Mission Package aviation systems have reached IOC and are being delivered to the Fleet. The modular nature of the Mission Packages enables the Navy to deliver these capabilities now, while continuing to mature the remainder of the systems. Additionally, the Navy continues to evaluate employment of the MCM Mission Package off of Vessels of Opportunity."], "subsections": []}, {"section_title": "Manning and Deployment", "paragraphs": ["The LCS employs automation to achieve a reduced-sized crew. An LCS with an embarked MCM mission package and an aviation detachment to operate the ship's embarked aircraft might total about 88 sailors, compared to more than 200 for a Navy frigate and more than 300 for a Navy cruiser or destroyer. In general, most LCSs are to be operated with alternating dual crews so as to increase the percentage of time they can be deployed. For additional information on the manning and deployment of LCSs, see Appendix A ."], "subsections": []}, {"section_title": "Potential Foreign Sales", "paragraphs": ["Industry has marketed various modified versions of the LCS to potential foreign buyers. Saudi Arabia has purchased four modified LCSs."], "subsections": []}, {"section_title": "FY2020 Funding Request", "paragraphs": ["The Navy wants FY2019 to be the final year of LCS procurement, and it has not requested any finding for the procurement of additional LCSs in its FY2020 budget submission. The Navy's proposed FY2020 does request $14 million in procurement funding to cover cost growth on LCSs procured in prior fiscal years. And as shown in Table 2 in the \" Legislative Activity for FY2020 \" section of this report, the Navy's proposed FY2020 budget requests funding for the procurement of LCS mission packages. The Navy's FY2020 budget submission estimates the combined procurement cost of the three LCSs procured in FY2019 at $1,571.2 million, or an average of about $523.7 million each."], "subsections": []}]}]}, {"section_title": "Issues for Congress for FY2020", "paragraphs": [], "subsections": [{"section_title": "Procurement of LCSs in FY2020", "paragraphs": ["One issue for Congress is whether to procure any LCSs in FY2020, and if so, how many. As noted above, the Navy wants FY2019 to be the final year of LCS procurement, and it has not requested the procurement of any additional LCSs in its FY2020 budget submission.", "Opponents of procuring one or more LCSs in FY2020 could argue that the total number of LCSs procured in prior years exceeds the Navy's stated requirement, and that adding funding to the Navy's FY2020 shipbuilding account for procuring one or more additional LCSs could reduce FY2020 funding for other Navy programs. Supporters of procuring one or more LCSs could argue that it could provide a hedge against delays in the FFG(X) program and help the Navy achieve its small surface combatant force-level goal more quickly."], "subsections": []}, {"section_title": "Future Workloads and Employment Levels at the Two LCS Shipyards", "paragraphs": ["Another issue for Congress concerns future workloads and employment levels at the two LCS shipyards if one or both of these yards are not involved in building FFG(X)s. As noted earlier, the Navy wants to shift procurement of small surface combatants in FY2020 to a new frigate called the FFG(X). The Navy's proposed FY2020 budget requests funding for the procurement of the first FFG(X). Five industry teams are currently competing for the FFG(X) program. Two of these teams are offering designs for the FFG(X) that are modified versions of the two LCS designs that the Navy has procured in prior years. The other three industry teams are offering designs for the FFG(X) that are based on other existing ship designs. One of these three other industry teams is proposing to build its design at the LCS-1 shipyard. The Navy plans to announce the outcome of the FFG(X) competition in the fourth quarter of FY2020. The FFG(X) program is covered in detail in CRS Report R44972, Navy Frigate (FFG[X]) Program: Background and Issues for Congress , by Ronald O'Rourke.", "If a design proposed for construction at one of the LCS shipyards is chosen as the winner of the FFG(X) competition, then other things held equal (e.g., without the addition of new work other than building LCSs), workloads and employment levels at the other LCS shipyard (the one not chosen for the FFG(X) program), as well as supplier firms associated with that other LCS shipyard, would decline over time as the other LCS shipyard's backlog of prior-year-funded LCSs is completed and not replaced with new FFG(X) work. If no design proposed for construction at an LCS shipyard is chosen as the FFG(X)\u2014that is, if the winner of the FFG(X) competition is a design to be built at a shipyard other than the two LCS shipyards\u2014then other things held equal, employment levels at both LCS shipyards and their supplier firms would decline over time as their backlogs of prior-year-funded LCSs are completed and not replaced with FFG(X) work.", "The Navy's current baseline plan for the FFG(X) program is to build FFG(X)s at a single shipyard. One possible alternative would be to build FFG(X)s at two or three shipyards, including one or both of the LCS shipyards. One possible approach for doing this, for example, would be to select a winner in the FFG(X) competition and begin procuring that design in FY2020, as the Navy currently plans, but also build FFG(X)s at one or both of the LCS yards. Supporters of this option might argue that it could", "boost FFG(X) production from the currently planned two ships per year to as many as many as four to six ships per year, substantially accelerating the date for attaining the Navy's small surface combatant force-level goal; permit the Navy to use competition (either competition for quantity at the margin, or competition for profit [i.e., Profit Related to Offers, or PRO, bidding]) to help restrain FFG(X) prices and ensure production quality and on-time deliveries; and complicate adversary defense planning by presenting potential adversaries with multiple FFG(X) designs, each with its own specific operating characteristics.", "Opponents of this plan might argue that it could", "weaken the FFG(X) competition by offering the winner a smaller prospective number of FFG(X)s and essentially guaranteeing the LCSs yard that they will build some number of FFG(X)s; substantially increase annual FFG(X) procurement funding requirements so as to procure as many as four to six FFG(X)s per year rather than two per year, which in a situation of finite Department of Defense (DOD) funding could require offsetting reductions in other Navy or DOD programs; and reduce production economies of scale in the FFG(X) program by dividing FFG(X) among two or three designs, and increase downstream Navy FFG(X) operation and support (O&S) costs by requiring the Navy to maintain two or three FFG(X) logistics support systems.", "Another possible alternative to the Navy's plan to end LCS procurement in FY2019 and shift to FFG(X) procurement starting in FY2020 would be would be to select a winner in the FFG(X) competition and begin procuring that design in FY2020, as the Navy currently plans, but shift Navy shipbuilding work at one of the LCS yards (if the other wins the FFG(X) competition) or at both of the LCS yards (if neither wins the FFG(X) competition) to the production of sections of larger Navy ships (such as DDG-51 destroyers or amphibious ships) that undergo final assembly at other shipyards. Under this option, in other words, one or both of the LCS yards would be converted into feeder yards supporting the production of larger Navy ships that undergo final assembly at other shipyards. This option might help maintain workloads and employment levels at one or both of the LCS yards, and might alleviate capacity constraints at other shipyards, permitting certain parts of the Navy's 355-ship force-level objective to be achieved sooner. The concept of feeder yards in naval shipbuilding was examined at length in a 2011 RAND report."], "subsections": []}, {"section_title": "Navy Plans for Retrofitting LCSs with Additional Weapons", "paragraphs": ["Another issue for Congress concerns the Navy's plans for retrofitting LCSs with additional weapons, so as to give them capabilities more like those of the FFG(X). The Navy states that it \"is beginning to retrofit an Over the Horizon Weapon System (OTH WS) on all LCS for increased lethality. The award in May 2018 of the Naval Strike Missile contract for OTH WS brings a technologically mature weapons system and extends the offensive capability of the ship.\""], "subsections": []}, {"section_title": "Survivability, Lethality, Technical Risk, and Test and Evaluation Issues", "paragraphs": ["A broad oversight area for Congress for the LCS program for the past several years concerns survivability, lethality, technical risk, and test and evaluation issues relating to LCSs and their mission packages. Over the years, the annual report from DOD's Director, Operational Test and Evaluation (DOT&E) has contained extensive comments, many of them very critical, regarding numerous aspects of LCSs and LCS mission packages. DOT&E's January 2018 report for FY2017 contains such comments. Similarly, over the years, GAO has provided numerous reports and testimony about the LCS program that have raised a variety of issues with the program. GAO also provides a summary assessment of risk in the LCS mission packages in an annual report it publishes that surveys selected DOD weapon acquisition programs. A July 25, 2018, DOD Inspector General (IG) report on LCS MCM mission package systems stated that \"the Navy declared IOC [initial operational capability] for the three MCM mission package systems reviewed prior to demonstrating that the systems were effective and suitable for their intended operational uses.\""], "subsections": []}]}, {"section_title": "Legislative Activity for FY2020", "paragraphs": [], "subsections": [{"section_title": "Summary of Congressional Action on FY2020 Funding Request", "paragraphs": [" Table 2 summarizes congressional action on the Navy's FY2020 procurement funding request for the LCS program.", "Appendix A. Manning and Deployment of LCSs", "This appendix provides additional background information on the manning and deployment of LCSs.", "The Navy originally planned to maintain three crews for each two LCSs, and to keep one of those two LCSs forward deployed\u2014an approach Navy officials referred to as the 3-2-1 plan. Under this plan, LCSs were to be deployed at forward station (such as Singapore) for 16 months at a time, and crews were to rotate on and off deployed ships at 4- to 6-month intervals. The 3-2-1 plan was intended to permit the Navy to maintain 50% of the LCS force in deployed status at any given time\u2014a greater percentage than would be possible under the traditional approach of maintaining one crew for each LCS and deploying LCSs for seven months at a time. The Navy planned to forward-station three LCSs in Singapore and additional LCSs at another Western Pacific location, such as Sasebo, Japan, and at Bahrain.", "In September 2016, the Navy announced a new plan for crewing and operating the first 28 LCSs. Key elements of the new plan include the following:", "the first four LCSs (LCSs 1 through 4) will each by operated by a single crew and be dedicated to testing and evaluating LCS mission packages (though they could be deployed as fleet assets if needed on a limited basis); the other 24 LCSs (LCSs 5 through 28) will be divided into six divisions (i.e., groups) of four ships each; three of the divisions (i.e., 12 of the 24 ships), all of them built to the LCS-1 design, will be homeported at Mayport, FL; the other three divisions (i.e., the remaining 12 ships), all of them built to the LCS-2 design, will be homeported at San Diego, CA; among the three divisions on each coast, one division will focus on MCM, one will focus on ASW, and one will focus on SUW; in each of the six divisions, one ship will be a designated training ship, and will focus on training and certifying the crews of the other three ships in the division; the other three ships in each division will each be operated by dual crews (i.e., Blue and Gold crews), like the Navy's ballistic missile submarines; the crews for the 24 ships in the six divisions will be permanently fused with their associated mission package crews\u2014the distinction between core crew and mission package crew will be eliminated; the 24 ships in the six divisions will experience changes in their mission packages (and thus in their mission orientations) infrequently, if at all; and at program maturity (i.e., by about FY2023), 13 of the 24 ships in the six divisions (i.e., more than 50%) are to be forward stationed at any given point for periods of 24 months, with 3 at Singapore, 3 at another Western Pacific location, such as Sasebo, Japan, and 7 at Bahrain.", "The Navy states that this crewing and operating plan is intended to", "reduce disruptions to the deployment cycles of the 24 LCSs in the six divisions that under the 3-2-1 plan would have been caused by the need to test and evaluate LCS mission packages; improve training and proficiency of LCS crews; enhance each LCS crew's sense of ownership of (and thus responsibility for taking good care of) the ship on which it operates; and achieve a percentage of LCSs in deployed status, and numbers of forward-stationed LCSs, similar to or greater than what the Navy aimed to achieve under the 3-2-1 plan.", "The Navy further states that as the fleet continues to accumulate experience in operating and maintaining LCSs, elements of this new plan might be modified.", "Appendix B. Defense-Acquisition Policy Lessons", "In reviewing the LCS program, one possible question concerns what defense-acquisition policy lessons, if any, the program may offer to policymakers, particularly in terms of the rapid acquisition strategy that the Navy pursued for the LCS program, which aimed at reducing acquisition cycle time (i.e., the amount of time between starting the program and getting the first ship into service).", "One possible perspective is that the LCS program demonstrated that reducing acquisition cycle time can be done. Supporters of this perspective might argue that under a traditional Navy ship acquisition approach, the Navy might have spent five or six years developing a design for a new frigate or corvette, and perhaps another five years building the lead ship, for a total acquisition cycle time of perhaps 10 to 11 years. For a program announced in November 2001, this would have resulted in the first ship entering service in between late 2011 and late 2012. In contrast, supporters of this perspective might argue, LCS-1 entered service on November 8, 2008, about seven years after the program was announced, and LCS-2 entered service on January 16, 2010, a little more than eight years after the program announced. Supporters of this perspective might argue that this reduction in acquisition cycle time was accomplished even though the LCS incorporates major innovations compared to previous larger Navy surface combatants in terms of reduced crew size, \"plug-and fight\" mission package modularity, high-speed propulsion, and (in the case of LCS-2) hull form and hull materials.", "Another possible perspective is that the LCS program demonstrated the risks or consequences of attempting to reduce acquisition cycle time. Supporters of this perspective might argue that the program's rapid acquisition strategy resulted in design-construction concurrency (i.e., building the lead ships before their designs were fully developed), a practice long known to increase risks in defense acquisition programs. Supporters of this perspective might argue that the cost growth, design issues, and construction-quality issues experienced by the first LCSs were due in substantial part to design-construction concurrency, and that these problems embarrassed the Navy and reduced the Navy's credibility in defending other acquisition programs. They might argue that the challenges the Navy faces today in terms of developing an LCS concept of operations (CONOPS), LCS manning and training policies, and LCS maintenance and logistics plans were increased by the rapid acquisition strategy, because these matters were partly deferred to later years (i.e., to today) while the Navy moved to put LCSs into production. Supporters of this perspective might argue that the costs of the rapid acquisition strategy are not offset by very much in terms of a true reduction in acquisition cycle time, because the first LCS to be equipped with a mission package that had reached IOC (initial operational capability) did not occur until late FY2014\u2014almost 13 years after the LCS program was announced. Supporters of this perspective could argue that the Navy could have avoided many of the program's early problems and current challenges\u2014and could have had a fully equipped first ship enter service in 2011 or 2012\u2014if it had instead pursued a traditional acquisition approach for a new frigate or corvette. They could argue that the LCS program validated, for defense acquisition, the guideline from the world of business management that if an effort aims at obtaining something fast, cheap, and good, it will succeed in getting no more than two of these things, or, more simply, that the LCS program validated the general saying that haste makes waste.", "A third possible perspective is that the LCS program offers few if any defense-acquisition policy lessons because the LCS differs so much from other Navy ships and the Navy (and DOD generally) consequently is unlikely to attempt a program like the LCS in the future. Supporters of this perspective might argue that the risks of design-construction concurrency have long been known, and that the experience of the LCS program did not provide a new lesson in this regard so much as a reminder of an old one. They might argue that the cost growth and construction delays experienced by LCS-1 were caused not simply by the program's rapid acquisition strategy, but by a variety of factors, including an incorrectly made reduction gear from a supplier firm that forced the shipbuilder to build the lead ship in a significantly revised and suboptimal construction sequence."], "subsections": []}]}]}}
{"id": "R45695", "title": "U.S. Geological Survey (USGS) Streamgaging Network: Overview and Issues for Congress", "released_date": "2019-04-18T00:00:00", "summary": ["Streamgages are fixed structures at streams, rivers, lakes, and reservoirs that measure water level and related streamflow\u2014the amount of water flowing through a water body over time. The U.S. Geological Survey (USGS) in the Department of the Interior operates streamgages in every state, the District of Columbia, and the territories of Puerto Rico and Guam. The USGS Streamgaging Network encompasses 10,300 streamgages, which record water levels or streamflow for at least a portion of the year. Approximately 8,200 of these streamgages measure streamflow year round as part of the National Streamflow Network. The USGS also deploys temporary rapid deployment gages to measure water levels during storm events, and select streamgages measure water quality.", "Streamgages provide foundational information for diverse applications that affect a variety of constituents. The USGS disseminates streamgage data free to the public and responds to over 670 million requests annually. Direct users of streamgage data include a variety of agencies at all levels of government, private companies, scientific institutions, and recreationists. Data from streamgages inform real-time decisionmaking and long-term planning on issues such as water management and energy development, infrastructure design, water compacts, water science research, flood mapping and forecasting, water quality, ecosystem management, and recreational safety.", "Congress has provided the USGS with authority and appropriations to conduct surveys of streamflow since establishing the first hydrological survey in 1889. Many streamgages are operated cooperatively with nonfederal partners, who approach the USGS and sign joint-funding agreements to share the cost of streamgages and data collection. The USGS Cooperative Matching Funds (CMF) Program provides up to a 50% match with tribal, regional, state, and local partners, as authorized by 43 U.S.C. \u00a750. The average nonfederal cost-share contribution has increased from 50% in the early 1990s to 63% in FY2018. In the early 2000s, the USGS designated federal priority streamgage (FPS) locations based on five identified national needs. The SECURE Water Act of 2009 (Title IX, Subtitle F, of P.L. 111-11) directed the USGS to operate by FY2019 no less than 4,700 federally funded streamgages. In FY2018, 3,640 of the 4,760 FPSs designated by the USGS were operational, with 52% of their funding from the USGS.", "Congressional appropriations and agreements with 1,400 nonfederal partners funded USGS streamgages at $189.5 million in FY2018. The USGS share included $24.7 million for FPSs and $29.8 million for cooperative streamgages through CMF. A dozen other federal agencies provided $40.7 million. Nonfederal partners, mostly affiliated with CMF, provided $94.3 million. In FY2019, Congress appropriated level funding for FPS and CMF streamgages. Congress directed an additional $8.5 million to pilot a Next Generation Integrated Water Observing System (NextGen), establishing dense networks of streamgages in representative watersheds in order to model streamflow in analogous watersheds. The President's budget request for FY2020 does not include NextGen system funding and would reduce CMF for streamgages by $250,000.", "The USGS uses appropriated funding to develop and maintain the USGS Streamgaging Network. The USGS and numerous stakeholders have raised funding considerations including user needs, priorities of partners, federal coverage, infrastructure repair, disaster response, inflation, and technological advances. Some stakeholders advocate for maintaining or expanding the network. Others may argue that Congress should consider reducing the network in order to prioritize other activities and that other entities operate streamgages tailored to localized needs. Congress might also consider whether to invest in streamgage restoration and new technologies.", "Congress may consider outlining the future direction for the USGS Streamgaging Network through oversight or legislation. As the USGS faces a deadline by the SECURE Water Act of 2009 to operate no less than 4,700 FPSs by FY2019, Congress directed the USGS through appropriations legislation to invest in the NextGen system. Congress may consider such policy options as pursuing both the FPS mandate and the NextGen system simultaneously, amending the SECURE Water Act of 2009, and the relative emphasis of the NextGen system."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Streamgages measure water level and related streamflow at streams, rivers, lakes, and reservoirs across the country. Streamgages provide foundational information for diverse applications that affect a variety of constituents. Congress has supported a national streamgage program for 130 years. These streamgages operate in every state, the District of Columbia, and the territories of Puerto Rico and Guam; therefore, national streamgage operations garner interest from many Members of Congress. Data fro m streamgages informs real-time decisionmaking and long-term planning on issues such as hazard preparations and response, infrastructure design, water use allocations, ecosystem management, and recreation. Direct users of streamgage data include a variety of agencies from all levels of government, utility companies, consulting firms, scientific institutions, and recreationists.", "Streamgages are operated across the globe with national programs in North America, Europe, Australia, and Brazil, among others. In the United States, the U.S. Geological Survey (USGS), the Department of the Interior's (DOI's) lead scientific agency, manages the USGS Streamgaging Network ( Figure 1 ). The network encompasses 10,300 streamgages that record water height or streamflow for at least a portion of the year. Approximately 8,200 of these streamgages measure streamflow year-round and are part of the National Streamflow Network. This subnetwork includes 3,640 Federal Priority Streamgages (FPSs), which Congress and the USGS designated as national priorities (see section on \" Federal Priority Streamgages \"). Some entities, such as state governments, operate their own streamgages separate from the USGS Streamgaging Network. ", "Congressional appropriations and agreements with approximately 1,400 nonfederal partners funded the USGS Streamgaging Network at $189.5 million in FY2018. Some streamgages are funded solely through congressional appropriations for the USGS and other federal agencies, such as the U.S. Army Corps of Engineers (USACE), Bureau of Reclamation (Reclamation), and Department of Defense (DOD). Much of the USGS Streamgaging Network is funded cooperatively. Interested parties sign funding agreements with the USGS to share the cost of streamgages and data collection. The USGS Cooperative Matching Funds Program (CMF) provides up to a 50% match with tribal, regional, state, and local partners (see section on \" Cooperative Matching Funds Program \"). Other federal agencies, nonfederal governments, and nongovernmental entities may provide reimbursable funding for streamgages in the USGS Streamgaging Network without contributed funds from the USGS. ", "Evolving federal policies and user needs from diverse stakeholders have shaped the size, organization, and function of the USGS streamgage program. This report provides an overview of federal streamgages by describing the function of a streamgage, the data available from streamgage measurements, and the uses of streamgage information. The report also outlines the structure and funding of the USGS Streamgaging Network and discusses potential issues for Congress, such as funding priorities and the future structure of the nation's streamgage network. "], "subsections": []}, {"section_title": "What Is a Streamgage?", "paragraphs": ["A streamgage's primary purpose is to collect data on water levels and streamflow (the amount of water flowing through a river or stream over time). Streamgages estimate streamflow based on (1) continuous measurements of stage height (the height of the water surface) and (2) periodic measurements of streamflow, or discharge, in the channel and floodplains. USGS measurements are used to create rating curves, in order to convert continuously measured stage heights into estimates of streamflow. Selected streamgages may provide additional measurements, such as measurements of water quality (see box on \"Supergages\").", "Streamgages house instruments to measure, store, and transmit stream stage height ( Figure 2 ). Stage height is usually transmitted every hour, or more frequently at 5 to 15 minute intervals for emergency or priority streamgages. Most streamgages transmit data by satellite to USGS computers; the data then are provided online to the public. Numerous streamgages also have cameras that capture and transmit photos of streamflow conditions.", "Periodic streamflow measurements require USGS personnel to measure discharge at various sections across the stream. Streamflow measurements are made every six to eight weeks to capture a range of stage heights and streamflows, especially at high and low stage heights. Repeated measurements allow scientists to capture changes to the channel from vegetation growth, sedimentation, or erosion, which can affect the relationship between stage height and streamflow. ", "The USGS National Water Information System (NWIS) receives and converts all stream height data from USGS streamgages into streamflow estimates. An example of streamgage data from NWIS is shown in Figure 3 for a site capturing peak streamflow during a hurricane event. The free and publicly accessible data are frequently accessed online or by request to users. For example, the agency responded to over 670 million requests for streamflow and water level information in 2018. The NWIS website is the main repository for current and historical streamflow data, in addition to other water information. Tools such as WaterWatch summarize the current conditions of the nation's streams and watersheds through maps, graphs, and tables by comparing real-time streamflow conditions to historic streamflow from streamgages with records of 30 years or more. "], "subsections": []}, {"section_title": "Streamgage Uses", "paragraphs": ["The USGS Streamgaging Network provides streamflow information to assist during natural and man-made disasters, such as flooding and drought, and to inform economic and statutory water management decisions, such as the allocation of water supplies for irrigation. Individual streamgages in the network also can serve multiple uses. For example, a streamgage intentionally established for the purpose of reservoir management may provide data to inform water quality standards, habitat assessments, and recreational activities. Additionally, the value of a single streamgage is enhanced by the operation of the entire network, particularly for research, modeling, and forecasting.", "Streamgages were first established in the United States to inform water use and infrastructure planning\u2014applications that benefit from continuous, long-term hydrologic records (see box on \"Evolution of Streamgage Uses\"). Long and continuous periods of data are used to construct baselines for water conditions and to identify deviations in the amount and timing of streamflow caused by changes in land use, water use, and climate. Some stakeholders contend that the value of streamflow records increases over time, with at least 20 years of continuous coverage needed for many applications. ", "Technological advances allowing access to streamflow information in real time have expanded the uses of streamgages. Real-time forecasting and operational decisionmaking are used in many applications of streamflow data. Web and phone applications also have facilitated increased public use of water information. "], "subsections": [{"section_title": "Examples of Streamgage Uses", "paragraphs": ["Streamgage data is used for a wide range of applications, including supporting activities of federal agencies. There are also a variety of streamgages tailored for specific purposes. The following is a noncomprehensive selection of streamgage uses to illustrate the scope of applications.", "W ater M anagement and Energy D evelopment . USACE, Reclamation, and various state and local water management agencies use streamgages to inform the design and operation of thousands of water management projects across the nation. Timely streamflow information helps water managers make daily operational decisions as they balance water requirements for municipal, industrial, and agricultural uses. Energy production and mineral extraction operations also rely on continuous streamflow measurements to comply with environmental, water quality, or temperature requirements. For example, the Federal Energy Regulatory Commission (FERC) requires hydropower companies to support USGS streamflow and water-level monitoring as part of their FERC licensing process. ", "Infrastructure Design . Transportation agencies use streamflow data to develop regional flow frequency curves for the design of bridges and culverts, stream stability measures, and analysis of bridge scour\u2014the leading cause of bridge failure. Without adequate information, some observers contend that engineers may overdesign structures, resulting in greater costs, or may not make proper allowances for floods, compromising public safety. ", "Interstate and International Water Rights . Federal streamgages are used to collect streamflow information at U.S. borders and between states. Streamgage data informs interstate compacts, Supreme Court decrees, and international treaties (e.g., under the purview of the International Boundary and Water Commission and the International Joint Commission). ", "Water Science Research . Many federal agencies depend on consistent, long-term data from streamgages to conduct water research and modeling (e.g., USACE, National Oceanic and Atmospheric Administration [NOAA], Environmental Protection Agency [EPA], DOI, U.S. Department of Agriculture [USDA], and National Aeronautic and Space Administration [NASA]). To monitor climate trends and ecological patterns, the USGS distinguishes a subset of streamgages that are largely unaffected by development to serve as benchmarks for natural conditions. ", "Flood Mapping . The Federal Emergency Management Agency (FEMA) uses floodplain maps to establish flood risk zones and requires flood insurance through the National Flood Insurance Program (NFIP) for properties with a 1% annual chance of flooding. Long-term streamflow records are used to determine 1% annual chance flood flows and to develop water surface profiles to map areas at risk of flooding. The USGS often works with FEMA to produce new inundation maps after streamgages record new streamflow peaks from weather events such as hurricanes. ", "Emergency F orecasting and Response. Streamgages inform flood forecasting and emergency response to protect lives and property. Real-time data from more than 3,600 streamgages allow NOAA's National Weather Service (NWS) river forecasters to model watershed response, project future streamflows, forecast monthly to seasonal water availability, and issue appropriate flood watches and warnings (see box on \"National Water Model\"). Flood warnings provide lead time for emergency response agencies, such as FEMA, to take effective action in advance of rising waters. In addition, the USDA National Resource Conservation Service (NRCS) uses streamgages to forecast flows for water supply, drought management and response, hydroelectric production, irrigation, and navigation in western states. ", "Water Q uality . Streamflow data is important for measuring water quality and developing water quality standards for sediments, pathogens, metals, nutrients (e.g., nitrogen and phosphorus), and organic compounds (e.g., pesticides). At select streamgages, the USGS also operates instruments recording water quality data (see box on \"Supergages\"). Section 303(d) of the Clean Water Act requires states to develop total maximum daily load (TMDL) management plans for water bodies determined to be water quality impaired by one or more pollutants. When determining TMDL levels for specific pollutants, agencies may consider historic streamflow data, along with other factors, in their evaluations. Agencies may use current flow conditions when determining the proper release of wastewater to ensure compliance with TMDL standards and National Discharge Elimination System permitting. ", "Ecosystem Management and Species . Some water users and resource agencies use streamflow data to meet the flow requirements needed to protect endangered or threatened fish and wildlife under the Endangered Species Act (16 U.S.C. \u00a71531 et seq.). Natural resource agencies, such as the U.S. Fish and Wildlife Service (FWS), collect streamflow data to understand how threatened and endangered species respond to flow variations. The USGS operates streamgages to monitor ecosystem restoration progress, such as restoration of the Chesapeake Bay watershed.", "Recreation . Real-time streamgage data can help individuals and tourism businesses assess stream conditions for recreational outings. USGS data can be used to decide if conditions are suitable for recreational activities such as fishing, boating, and rafting. The USGS also partners with the National Park Service (NPS) to provide water science and data to help manage parks and to enhance interpretive programs."], "subsections": []}]}, {"section_title": "Network Structure", "paragraphs": ["The USGS Streamgaging Network is part of the Groundwater and Streamflow Information Program under the USGS Water Resources mission area. The President's budget request for FY2020 proposes a restructuring of the mission area to create a Water Observing Systems Program that would combine the USGS Streamgaging Network and other water observation programs. The primary operators of streamgages are the regional and state USGS Water Science Centers, which maintain hydrologic data collection and conduct water research in the region. ", "Approximately 8,200 of the 10,300 USGS streamgages measure year-round streamflow (National Streamflow Network; see Figure 4 ), with the rest only measuring stage height or measuring streamflow on a seasonal basis. USGS streamgages are also differentiated based on cooperative funding (CMF) and federal interest (FPSs)."], "subsections": [{"section_title": "Cooperative Matching Funds Program", "paragraphs": ["Much of the streamgaging program has been cooperative in nature as interested parties sign funding agreements to share the cost of streamgages and data collection. Through CMF, the USGS funds up to a 50% match with tribal, regional, state, and local partners. In 2018, CMF supported 5,345 streamgages (52% of the USGS Streamgaging Network).", "The first cooperative agreement began in 1895 with the Kansas Board of Irrigation Survey and Experiment (now known as the Division of Water Resources of the Kansas Department of Agriculture). Funds from cooperative entities steadily increased in the early 20 th century. Congress passed legislation in 1928 stipulating that the USGS can share up to 50% of the costs for water resources investigations carried out in cooperation with tribes, states, and municipalities (see Figure 5 ). In 2016, this Federal-State Cooperative Water Program was renamed the Cooperative Matching Funds Program (CMF), which provides cooperative funding for programs across the USGS Water Mission Area.", "To participate in the CMF, potential partners approach the USGS to discuss the need for a specific streamgage. The USGS determines its feasibility based on available funds and program priorities. If the USGS deems establishing the streamgage is feasible, the USGS and cooperator sign a joint funding agreement (JFA), which is a standard agreement that specifies how much each party will contribute to funding the streamgage and the payment schedule for the cooperator. These agreements span five years or less. During the agreement, the cost-share generally remains the same, but there is flexibility to alter the cost-share on an annual basis for multi-year agreements. Once a streamgage is operating, if a partner can no longer contribute funds, the USGS seeks to work with other partners that use the streamgage to augment funding. The USGS provides a website identifying streamgages that are in danger of being discontinued or converted to a reduced level of service due to lack of funding. The website also identifies streamgages that have been discontinued or are being supported by a new funding source. ", "Approximately 3,700 of the 10,300 USGS streamgages (36%) are funded by nonfederal and federal partners without matching funds from the USGS (i.e., not with CMF). Nonfederal partners sign JFAs, and federal partners share interagency agreements with the USGS (except USACE which uses a military interdepartmental purchase request). These gages are part of the USGS Streamgaging Network and are operated in accordance with the quality control and public access standards created by the USGS, with the agency assuming liability responsibility for the streamgages. ", "Public and private entities may also elect to own and operate streamgages tailored to their specific needs and not affiliated with the USGS. These independent streamgages may differ in various ways compared to streamgages in the USGS Streamgaging Network (e.g., capital and operating costs, operating periods, measurement capabilities, and data standards and platforms). "], "subsections": []}, {"section_title": "Federal Priority Streamgages", "paragraphs": ["The SECURE Water Act of 2009 (Title IX, Subtitle F of P.L. 111-11 ) directs the USGS to operate a reliable set of federally funded streamgages. The law requires the USGS to fund no fewer than 4,700 sites complete with flood-hardened infrastructure, water quality sensors, and modernized telemetry by FY2019. Originally titled the National Streamflow Information Program (NSIP), the USGS now designates these streamgages as FPSs. Out of the 4,760 FPS locations identified by the USGS, 3,640 sites were operational in 2018. In FY2018, the USGS share of funding was $24.7 million for FPSs. ", "The idea of a federally sustained set of streamgages arose in the late 20 th century when audits revealed the number of streamgages declining after peaking in the 1970s (see decrease in Figure 5 ). In a 1998 report to Congress, the USGS stated that the streamgage program was in decline because of an absolute loss of streamgages, especially those with a long record, and asserted that the loss was due to partners discontinuing funding. Partners also had developed different needs for streamflow information. The USGS proposed the creation of an entirely federally funded NSIP to ensure a stable \"backbone\" network of streamgages to meet national needs. The USGS used five national needs to determine the number and location of these streamgage sites: ", "1. Meeting legal and treaty obligations on interstate and international waters. 2. Forecasting flow for NWS and NRCS. 3. Measuring river basin outflows to calculate regional water balances. 4. Monitoring benchmark watersheds for long-term trends in natural flows. 5. Measuring flow for water quality needs. ", "The original design included 4,300 active, previously discontinued, or proposed streamgage locations. The proposed program was to be fully federally funded, conduct intense data collection during floods and droughts, provide regional and national assessments of streamflow characteristics, enhance information delivery, and conduct methods development and research.", "The SECURE Water Act of 2009 authorized the NSIP to conform to the USGS plan as reviewed by the National Research Council. The law required the program to fund no fewer than 4,700 sites by FY2019. The law also directed the program to determine the relationship between long-term streamflow dynamics and climate change, to incorporate principals of adaptive management to assess program objectives, and to integrate data collection activities of other federal agencies (i.e., NOAA's National Drought Information System) and appropriate state water resource agencies."], "subsections": []}]}, {"section_title": "Network Funding", "paragraphs": ["In FY2018, congressional appropriations and nonfederal partners provided $189.5 million for the USGS Streamgaging Network ( Figure 6 ). The USGS share included $24.7 million for FPSs and $29.8 million for CMF. Other federal agencies provided $40.7 million ( Table 1 ). Nonfederal partners, mostly affiliated with the CMF program, provided $94.3 million.", "The appropriations bill for the Interior, Environment, and Related Agencies funds the USGS share of the USGS Streamgaging Network. Funding for streamgages is included in the Groundwater and Streamflow Information Program under the USGS Water Resources Mission Area. The line item includes funding for the streamgage network and groundwater monitoring activities, as well as other activities. Congress provided $74.2 million in FY2018 and $82.7 million in FY2019 for the Groundwater and Streamflow Information Program. While maintaining level funding for FPS and CMF streamgages in FY2019, Congress directed increased funding of $8.5 million for the deployment and operation of NextGen water observing equipment. ", "The President's budget request for FY2020 proposes creating a new Water Observing Systems Program combining the Groundwater and Streamflow Information Program and elements of the National Water Quality program focused on observations of surface water and groundwater. The President's FY2020 budget requests $105.1 million for the proposed program, a decrease of $7.5 million compared to $112.5 million of FY2018 funding for a similar structure. The budget request would maintain funding for active FPS locations and provide no funding for the NextGen system. For CMF, the request proposes a decrease of $500,000 for Tribal Water, which would result in a loss of $250,000 for CMF streamgages, and a decrease of $717,000 for Urban Waters Federal Partnership, which would reduce water quality monitoring at select streamgages.", "Other federal agencies contribute to whole or partial funding of streamgages for agency purposes ( Table 1 ). Since FY2012, funding from other federal agencies has doubled from $19.9 million to $40.7 million in nominal dollars. This increase may be due to meeting inflation and other streamgage cost increases; to new needs for monitoring data with existing cooperators (e.g., USACE in the Savannah and Jacksonville Harbor expansion projects); and to the introduction of additional funding partners (e.g., the EPA) that are supporting new streamgages. ", "Nonfederal partners funded approximately half the costs of the USGS Streamgaging Network from FY2012 to FY2018. Cooperative partners include tribal, regional, state, and local agencies related to natural resources, water management, environmental quality, transportation, and regional and city planning. Irrigation districts, riverkeeper partnerships, and utility agencies and companies also fund the program. Contributions by nongovernmental partners to streamgages are very limited (1% in FY2018) and are not eligible for cost-sharing through the USGS CMF program."], "subsections": [{"section_title": "USGS Funding Trends", "paragraphs": ["From FY2003 to FY2019, USGS funding for FPS streamgages increased from $11.7 million to $24.7 million (in 2018 dollars; Figure 7 ). However, USGS funding has not met the SECURE Water Act of 2009 mandate for an entirely federally funded suite of not fewer than 4,700 streamgage sites. In FY2018, 35% of FPSs were funded solely by the USGS FPS program funds. The USGS must rely on other federal agencies or nonfederal partners to fund the rest of the FPSs: 27% were funded by a combination of USGS CMF and partner funds, 24% were funded by a combination of other federal agencies and nonfederal partners, and 14% were funded solely by other federal agencies (not the USGS).", "USGS funding for CMF has remained relatively level, ranging from $27.5 million to $30.7 million (in 2018 dollars) over 15 years, aside from a drop in FY2007 ( Figure 7 ). For the entire USGS Streamgaging Network, the nonfederal cost-share contribution has increased from near 50% in the early 1990s to an average of about 63% in FY2018. With CMF appropriations remaining level, and demand for streamgages from stakeholders rising, the USGS cost-share available has declined. Cost-share commitments for long-term streamgages are generally renewed at consistent percentages, but JFAs for newer streamgages may include less contribution from the USGS. Increasingly, the USGS may opt to only provide matching funds for installation and operation in the first year, with the agreement that the partner provides full funding in subsequent years."], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": ["Congress may consider funding levels and policy priorities for the USGS Streamgaging Network. Congressional appropriations may affect the size of the network and the design of streamgages. Congress may provide direction regarding the policy priorities when considering the mandates of the SECURE Water Act of 2009 and initiating the NextGen system. "], "subsections": [{"section_title": "Funding Considerations", "paragraphs": ["Congress determines the amount of federal funding for the USGS Streamgaging Network and may direct its allocation to FPS, CMF, and other initiatives. The USGS and numerous stakeholders have raised funding considerations including user needs, priorities of partners, federal coverage, infrastructure repair, disaster response, inflation, and technological advances. Congress may consider whether to maintain, decrease, or expand the network, and whether to invest in streamgage restoration and modernization."], "subsections": [{"section_title": "Addressing the Size of the Network", "paragraphs": ["The USGS uses appropriated funding to develop and maintain the USGS Streamgaging Network. While some stakeholders advocate for maintaining or expanding the network, others may argue that Congress should consider reducing the network in order to prioritize other activities. "], "subsections": [{"section_title": "Maintaining the Network", "paragraphs": ["Congress may provide funding to maintain existing streamgages. The Administration continues to request funding for the Groundwater and Streamflow Information Program, which funds the USGS Streamgaging Network. The FY2020 budget request states that \"one of the highest goals of the USGS is to maintain long-term stability of a 'Federal needs backbone network' for long-term tracking and forecasting/modeling of streamflow conditions.\" Some stakeholders may advocate to maintain the current network as it provides hydrologic information for diverse applications (see section on \" Streamgage Uses \"). The FY2020 budget requests FPS funding at FY2019 enacted levels. If inflation increases costs, level funding may not fully maintain the current operations of FPSs. In addition, 71% of the network, including some FPSs, are funded by other federal and nonfederal partners, which makes those streamgages potentially vulnerable for discontinuation. According to the Government Accountability Office, maintaining streamgages through partners can be a challenge due to both the changing priorities and financial limitations of the partners. "], "subsections": []}, {"section_title": "Reducing the Network Size", "paragraphs": ["Congress may consider reducing the network, either for FPSs, cooperative streamgages, or both. The USGS has discontinued some streamgages because of other funding priorities or because cooperators decided to no longer fund them and alternative funding was not available for the operating costs. Closures may affect individual streamgages or a collection of streamgages. The Administration requested reductions for the Groundwater and Streamflow Information Program in FY2018, FY2019, and FY2020 compared to previous congressional appropriations. For FY2018, the Administration requested a decrease of $742,000 for the Groundwater and Streamflow Information Program, which the budget justification said would diminish the USGS's ability to execute its core activities including strengthening the national streamgaging and groundwater monitoring networks. For FY2019, the proposed reduction included a decrease of $160,000 for U.S.-Canada Transboundary Streamgages. The FY2019 and FY2020 requests proposed a decrease for Tribal Water CMF, which would result in a loss of CMF funding for select streamgages. Congress did not make these cuts in FY2018 and FY2019, and is considering appropriations for FY2020. ", "Reducing the USGS Streamgaging Network could alleviate federal spending on streamgages and allow other entities to operate streamgages tailored to their needs. On the other hand, discontinuing currently operational streamgages may result loss of data acquisition, discontinuation of long-term datasets, and decreased coverage in some basins. Some stakeholders have proposed that entities with specific needs build and operate their own streamgages separate from the USGS network. Some states, such as California and Oregon, already operate their own streamgaging networks. This approach may contain some challenges (e.g., the data may be of higher or lower quality, the data be restricted for public use, or the host may use different standards). However, if individual streamgages were operated at the same level of quality as USGS streamgages, the USGS could incorporate such data into the NWIS network. Some also argue that disparate data sets could be available on a shared platform with USGS streamgages; such a platform could include information on methods of collection, quality, and accuracy. "], "subsections": []}, {"section_title": "Network Expansion", "paragraphs": ["Congress may increase funding to expand the network, which could include establishing the remaining locations for FPS, providing more funds for cooperative streamgages, or pursuing new initiatives like the NextGen system. ", "Congress mandated completion of a national network of no less than 4,700 streamgages in the SECURE Water Act of 2009. At the close of FY2018, 3,640 of the 4,760 FPSs designated by the USGS were operational, with 52% of their funding coming from the USGS. The USGS estimates that $125 million in additional funding each year would be needed to complete the network; however, an average of only about $25 million (in 2018 dollars) was appropriated annually for FPSs between FY2014 and FY2019. While some stakeholders have advocated for Congress to provide full appropriations for FPSs to meet the mandate based on network needs, Congress may consider other funding priorities (e.g., the NextGen system). Congress may also consider if other federal agencies and nonfederal cooperative partners could provide more funding for FPSs. These entities may not be interested in financing some of the designated streamgages in the FPS network, particularly those in isolated river basins with little anthropogenic activity. ", "Some stakeholders advocate for more federal funding to expand the cooperative part of the network, which addresses more localized needs. Some may argue against more federal funding for cooperative streamgages as it lacks a direct statutory mandate (unlike FPSs). Others have proposed increasing nontraditional funding sources for streamgages. They suggest that businesses, homeowner associations, non-for-profit organizations, academic institutions, and other nontraditional entities could provide funding for streamgaging; therefore, increasing the amount of nonfederal investment. Contributions by nongovernmental partners to streamgages are currently relatively limited (1% in FY2018) and are not eligible for federal matching funds. Congress could potentially encourage wider participation by nontraditional partners through such means as authorizing cooperative matching opportunities for public-private partnerships. Traditional stakeholders may oppose making matching funds available to entities not currently eligible, which could result in more competition for limited funds. ", "Congress increased the Groundwater and Streamflow Information Program appropriations by $1.5 million in FY2018 and $8.5 million in FY2019. These increases were directed to streamgages for the NextGen system (see section on \" NextGen System \"). Congress may consider expanding the network through the NextGen system based on results from the pilot project. Increases solely directed to the NextGen system may intensify funding constraints for FPSs and CMF streamgages."], "subsections": []}]}, {"section_title": "Restoration of Streamgages", "paragraphs": ["Streamgages are vulnerable to hazards if not properly hardened. The SECURE Water Act directed the USGS to ensure all FPSs were flood hardened by FY2019. According to the USGS, structural restoration is usually funded because of emergencies; for example, disaster supplemental appropriations may provide funds for hardening streamgages, or funds are diverted from operational budgets to repair affected streamgages. The 2017 hurricane season resulted in damage to more than 100 streamgages. In response, Congress provided $4.6 million in the Bipartisan Budget Act of 2018 to repair, replace, and restore these streamgages and recover their data, and for hydrologists to reconstruct stream channel measurements. When the USGS does not receive disaster supplemental funding from Congress, the agency is not reimbursed for funding it redirects in order to provide around-the-clock monitoring during the events and equipment repair during and after the events. Some stakeholders have advocated for Congress to provide funds specifically for strengthening and restoring infrastructure, especially to withstand natural disasters. These stakeholders estimate that $238 million is needed to update half of the streamgages in the network to enable them to withstand major flood events and to meet new data transmitting requirements. Under budget constraints, increases in congressional appropriations are often prioritized to maintain or expand the network instead of restoration. "], "subsections": []}, {"section_title": "Modernizing the USGS Streamgaging Network", "paragraphs": ["Congress might consider investments in new technologies for the USGS Streamgaging Network. While regarded as reliable, many of the current streamgage operations are based on labor-intensive and more expensive techniques. Some stakeholders suggest that investing in modern technological and computational capabilities could provide enhanced streamflow information with reduced costs. Others raise that these approaches may not provide the quality and consistency of data expected of USGS streamgages and may reduce funds available for existing operations."], "subsections": [{"section_title": "Telemetry and Information Infrastructure", "paragraphs": ["The SECURE Water Act of 2009 directed the USGS to equip all FPSs with modernized telemetry systems by FY2019. According to stakeholders, the current U.S. streamgage telemetry and information infrastructure may be vulnerable to failure, and the existing data collection platforms and computer networks might eventually be inefficient for real-time and detailed data. In September 2018, an error in telemetry equipment resulted in an outage of 11% of the network. The USGS stated that redundancy in telemetry using cellular signals or camera streaming could have alleviated the problem, which affected the network for weeks. The IMAGES Act of 2018 ( H.R. 4905 ) introduced in the 115 th Congress would have directed FEMA to work with USGS to modernize hardware and increase the speed of data transmittal, but the legislation did not specify funding amounts. Some stakeholders have suggested a figure of $112 million as the amount needed to upgrade the enterprise data management systems, information technology infrastructure, and real-time data delivery capabilities. Past increases of appropriations for streamgages have prioritized continued operation and network expansion over technological improvements. To mitigate costs for such upgrades, federal science agencies are considering cloud computing that could also benefit cloud providers if other users develop applications on the cloud network using the data already hosted there. The FY2020 budget request for the USGS outlines enhancement and modernization of NWIS with a centralized platform meeting the Federal Cloud First Computing Strategy. Some argue that Congress should fund alternative data infrastructure to ensure capacity and reliability of increased data while reducing the cost, though others may argue these strategies are not ready for full implementation."], "subsections": []}, {"section_title": "NextGen System", "paragraphs": ["The USGS suggests that modern models and computational methods to estimate streamflow in ungaged or sparsely gaged basins may provide an alternative approach to conventional streamgaging. These methods require more observational data, particularly for reference river basins, than that provided by the current streamgage network. In an effort to assess this approach, the USGS initiated a NextGen system pilot project in the Delaware River Basin with $1.5 million in FY2018 ( Figure 8 ), and the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provided $8.5 million for the NextGen system. Reports accompanying FY2019 Interior appropriations bills by the House and Senate in the 115 th Congress addressed the NextGen system. The Senate committee report encouraged the USGS to have a cost-effective strategy for the NextGen system ( S.Rept. 115-276 ), and the House committee report directed the USGS to provide the committee with a report on the NextGen system, explaining the limitations of the current water monitoring system, the enhancements and modernization needed, and costs to implement the system over a 10-year period and operate and maintain the system ( H.Rept. 115-765 ). The USGS says the funding will allow further the NextGen system implementation in the Delaware River Basin; continued progress in modernizing USGS data infrastructure; and the selection of the next basin. Advances by the NextGen system to estimate streamflow at ungagged locations based on modeling of highly measured reference basins could also result in reduced need for streamgages, lower costs, and expansion of coverage of streamflow data. Others may suggest that modeling streamflow may not provide adequate data as physical measurements, and initiating the NextGen system may result in decreased funding available for traditional operations."], "subsections": []}, {"section_title": "Innovation", "paragraphs": ["Congress may also consider directing the USGS to pursue innovative observation technologies: satellite-based or airborne platforms, ultrasound sensors for river stage-height measurement, radar technology for stream velocity, and autonomous vehicles for Light Detection and Ranging (LIDAR) and other types of remote sensing. The USGS is currently evaluating combining cameras and radars with advanced imagery analysis and installing these combined technologies on drone platforms to collect streamflow in difficult or inaccessible areas. Data coverage could also potentially increase with high-density sensing and sensor networks that use miniaturization, artificial intelligence, and economy of scale. Statistical advances to estimate streamflow at locations without streamgages could also result in reduced need for streamgages. Some suggest that such technologies may eventually satisfy streamflow information needs at lower cost, while others caution that advanced technologies may not provide as robust and reliable data as traditional methods. "], "subsections": []}]}]}, {"section_title": "Balancing Policy Options", "paragraphs": ["Congress may consider outlining the future direction for the USGS Streamgaging Network through oversight or legislation. At the close of FY2018, 3,640 of the 4,760 FPS locations designated by the USGS were operational, with 52% of their funding coming from the USGS. As the USGS faces a deadline by the SECURE Water Act of 2009 to operate no less than 4,700 FPSs by FY2019, Congress directed the USGS through appropriations legislation to invest in the NextGen system. Congress may consider pursuing both the FPS mandate and the NextGen system, amending the SECURE Water Act of 2009 to facilitate completion of FPSs, or replacing the FPS mandate with the Next Gen system. "], "subsections": [{"section_title": "Pursuing Both the FPS Mandate and the NextGen System", "paragraphs": ["Congress may consider pursuing both FPS coverage and the NextGen system. This approach could allow the USGS to meet the SECURE Water Act mandate while fully exploring new methods to obtain streamflow information. Financial constraints may limit this approach and pursuing both initiatives simultaneously may result in duplication of resources and coverage. "], "subsections": []}, {"section_title": "Amending the SECURE Water Act of 2009", "paragraphs": ["Congress may consider revising the SECURE Water Act of 2009 to facilitate completion of FPSs (i.e., extending the deadline for FPSs, reassessing the program goals, and changing the number of FPSs). Extending the mandate may provide more time to complete the FPS network. Some suggest that the national interests have evolved and the national goals and FPS locations should be reassessed. For example, monitoring streamflow for ecological purposes was not considered in the original design but has become an increased priority. The SECURE Water Act of 2009 directed the USGS to incorporate principles of adaptive management by conducting period reviews of the FPSs to assess whether the law's objectives were being adequately addressed. An analysis of the network could reveal whether some currently funded FPS sites are no longer in the national interest and funding could be reallocated to complete other sites. Changes in the national goals may also result in the discontinuation of long-term streamgages or the need for new streamgages, and coverage may increase or decrease in various river basins. "], "subsections": []}, {"section_title": "Replacing the FPS Network with NextGen System", "paragraphs": ["Congress may consider replacing FPSs with the NextGen system by authorizing the NextGen system as a pilot program or broader program. For example, the Weather Research and Forecasting Innovation Act of 2017 ( P.L. 115-25 ) required NOAA to conduct a pilot program for commercial weather data. The act stipulated program criteria, authorization of appropriations, reporting requirements, and future directs for NOAA based on the success of the pilot program. Congress could provide similar mandates in legislation including which basins are chosen for NextGen system improvements and whether the basins are determined by an external study, the Administration, or Congress. While some acknowledge new streamgaging approaches are forthcoming, others may suggest that modeling streamflow may not provide as adequate data compared to traditional streamgages and altering the network design may result in loss of coverage at specific sites or across basins."], "subsections": []}]}]}]}}
{"id": "R44656", "title": "USDA\u2019s Actively Engaged in Farming (AEF) Requirement", "released_date": "2019-03-07T00:00:00", "summary": ["In 1987, Congress enacted what is commonly known as the Farm Program Payments Integrity Act (Omnibus Budget Reconciliation Act of 1987, P.L. 100-203, \u00a7\u00a71301-1307), which requires that an individual or legal entity be \"actively engaged in farming\" (AEF) to be eligible for federal commodity revenue support programs. AEF requirements apply equally to U.S. citizens, resident aliens, and foreign entities. Designing a transparent and comprehensive AEF definition has proven difficult and has evolved over the years. The current set of laws and rules governing farm program eligibility\u2014for both family and nonfamily members on farm operations\u2014remain subject to considerable scrutiny and criticism from both rural and farm advocacy groups as well as certain Members of Congress. In particular, critics contend that current U.S. Department of Agriculture (USDA) eligibility criteria\u2014especially for providing active personal management\u2014remain broad and subjective and may represent a low threshold to qualify for payments, thus facilitating the creation of new farm operation members simply to expand an operation's farm payment receipts.", "Three major categories of legal entities are subject to AEF requirement for program payment eligibility: an individual, a partnership, and a corporation.", "An individual must meet three specific AEF criteria. First, independently and separately from other individuals with an interest in the farm business, the person makes a significant contribution to the operation of: (a) capital, equipment, or land; and (b) active personal labor and/or active personal management. Second, the person's share of profits or losses is commensurate with his/her contribution to the farming operation. Third, the person shares in the risk of loss from the farming operation.", "An individual that meets the AEF criteria is eligible for farm program payments but subject to annual payment limits. If a married person meets the AEF requirements, any spouse will also be considered to have met the AEF requirements, thus effectively doubling the individual payment limit. Also, every family member 18 years or older who receives income based on the farm's operating results is deemed to meet the AEF requirements and is eligible for a separate payment limit. Another exception to AEF requirements is made for landowners provided they receive income based on the farm's operating results.", "A general partnership is an association of multiple persons whereby each member is treated separately and individually for purposes of determining eligibility and payment limits. A partnership's potential payment limit is equal to the limit for a single person times the number of persons or legal entities that comprise the operation's ownership and meet the AEF requirements. Thus, adding a new member can potentially provide an additional payment limit. A corporation is an association of joint owners that is treated as a single person for purposes of determining eligibility and payment limits, provided that the entity meets the AEF and other eligibility criteria. Adding a new member generally does not affect a corporation's payment limit but only increases the number of members that can share a single payment limit.", "In accordance with a provision in the 2014 farm bill (P.L. 113-79; \u00a71604), USDA added more specificity to the role that a nonfamily member of a partnership or joint venture must play to qualify for farm program benefits. However, considerable issues remain that may be of interest to Congress. Long-standing concerns remain that some farm operations are organized to overcome program payment limits and maximize the amount of their farm program payments. In particular, some advocacy groups suggest that USDA's new rule did not go far enough in tightening AEF criteria and that it continues to allow for a high number of farm managers and associated payment limits for both family and nonfamily farm operations."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The U.S. Department of Agriculture (USDA), under the authority of Congress as enunciated in periodic farm legislation, provides support to the U.S. farm economy through a variety of federal farm programs. Direct support can often involve the transfer of billions of dollars each year. For example, USDA's Commodity Credit Corporation (CCC) outlays on farm support programs have averaged $13.7 billion per year from 1996 through 2017. ", "Program payments vary across commodities and regions as well as by size of farm operations. This variation has generated considerable interest\u2014by both the general public and Congress\u2014in who is eligible to participate in farm programs and, thus, may receive payments. The concern over program eligibility also derives, in part, from instances where farm payments have accrued to individuals who have never engaged in farming. ", "Program eligibility requirements and payment limits are central to how many U.S. farm programs operate and how support dollars are distributed across the nation. In particular, eligibility requirements and payment limits determine who receives federal farm program payments and how much they receive. A number of statutory and regulatory requirements govern federal farm program eligibility for benefits under various programs. A key aspect of eligibility for major farm revenue support programs is the requirement that a person be \"actively engaged in farming\" (AEF)\u2014that is, that a person contribute either labor or management time (or both) to the farm's operation. Not all farm programs are subject to the same AEF criteria, and the criteria often apply differently based on the type of legal entity owning the farm operation. "], "subsections": [{"section_title": "Report Overview", "paragraphs": ["This is the first of two reports on the subject of program eligibility and payment limits. This report focuses on current requirements to successfully be determined as AEF and thus eligible for certain farm program payments. Another report (CRS Report R44739, U.S. Farm Program Eligibility and Payment Limits ) focuses on farm program payment limits, conservation compliance, and adjusted gross income (AGI) restrictions. ", "This report begins by briefly discussing the historical development of congressional efforts to define and tighten eligibility criteria for farm program payments. This is followed by a description of all of the key terms and concepts involved in defining a farm business and farm program payment recipient, including the three major types of farm business organizations (sole proprietorship, partnership, and corporation). Then the report discusses current requirements used to define a person or entity as being \"actively engaged in farming\" (AEF) by type of legal entity. This is followed by a description of a 2015 USDA rule\u2014released subsequent to the 2014 farm bill ( P.L. 113-79 )\u2014that clarifies what constitutes AEF for nonfamily members of a farming operation, how more than one nonfamily person may qualify as an active farm manager (subject to a limit of three farm managers), and the recordkeeping requirements necessary to meet this new criteria. Finally, the report discusses several issues that may be of potential interest to Congress concerning regulations governing the implementation and monitoring of AEF criteria.", "A 2014 discussion of farm program payment limit and eligibility issues by farmdoc daily states:", "Payment limits are a technical and legal issue. Any decision on the number of entities receiving payments should be made with due diligence, including careful consideration of the business and legal implications, and should be discussed with both the Farm Service Agency (FSA) and a lawyer who is an expert on payment limits.", "This report is not a legal brief, nor does it represent a CRS legal analysis. Nor does this report intend to discuss the merits, or lack thereof, of federal farm program payments. Given its complexities, a review of U.S. farm program eligibility and annual payment limit policy can facilitate a conceptual understanding of issues of potential interest to Congress."], "subsections": []}]}, {"section_title": "Congressional Efforts to Tighten Eligibility Criteria", "paragraphs": ["The initial attempt to restrict payments to actual farmers was in 1987, when Congress enacted what is commonly known as the Farm Program Payments Integrity Act (Omnibus Budget Reconciliation Act of 1987, P.L. 100-203 , \u00a7\u00a71301-1307). According to the Government Accountability Office (GAO), Congress was motivated to pass the Farm Program Payments Integrity Act after hearing several concerns about farm payments going to individuals not involved in farming. This law required that an individual or entity meet AEF criteria to receive farm commodity payments. ", "Since their establishment, AEF criteria have been a requirement for payment eligibility for most farm revenue support programs. Since 1996, an average of about $9 billion per year in farm support program payments have been subject to the AEF criteria. Thus, significant taxpayer resources are at stake. However, designing a transparent and comprehensive definition of what it means to be AEF has proven difficult. ", "In 2004, GAO contended that USDA regulations failed to specify a measurable standard for what constituted \"a significant contribution of active personal management.\" Furthermore, GAO argued that, by not specifying such a measurable standard, USDA allowed individuals with little or no involvement in a farming operation to qualify for payments. ", "As a consequence of such criticism, the definition of AEF has evolved over the years as Congress and USDA\u2014via its regulatory powers\u2014have attempted to tighten payment eligibility criteria. For example, the 2008 farm bill ( P.L. 110-246 ) added more specificity to the definition of person and legal entity . It limited qualifying payments via direct attribution to persons or legal entities with ownership interests in joint ventures that pooled the resources of multiple payment recipients. It also expanded a separate payment limit to the spouses of qualifying farm payment recipients. Yet GAO continued to argue that further specificity was needed for AEF criteria.", "The 2014 farm bill ( P.L. 113-79 , \u00a71604) required USDA, in new regulations, to add more specificity to the role that a nonfamily producer who is a member of a legal entity\u2014primarily a partnership or joint venture\u2014must have to qualify for farm program benefits. ", "In general, family farms receive special treatment in which every adult family member 18 years or older who receives income based on the farm's operating results is deemed to meet the AEF requirements. Prior to the 2018 farm bill, family membership was based on lineal ascendants or descendants but was also extended to siblings and spouses. The 2018 farm bill (\u00a71703) further extended the definition of family member to include first cousins, nieces, and nephews. As a result, the current set of laws and rules governing farm program eligibility\u2014particularly for family members of a farm operation\u2014remain subject to considerable scrutiny and criticism from both rural and farm advocacy groups as well as certain Members of Congress. Critics contend that current USDA eligibility criteria\u2014especially for providing active personal management\u2014remain broad and subjective and may represent a low threshold to qualify for payments, thus facilitating the creation of partnership members to increase the farm business's payment limit and expand its farm payment receipts. "], "subsections": []}, {"section_title": "Three Principal Farm Business Categories", "paragraphs": ["Many types of farm business entities own and operate some sort of agricultural production activity. For purposes of determining the extent to which the participants of a farm operation qualify as potential farm program participants, three major categories are considered ( Table 1 ).", "1. Sole proprietorship or family farm . The farm business is run by a single operator or multiple adult family members\u2014the linkage being common family lineage\u2014where each qualifying member is subject to an individual payment limit. Thus, a family farm potentially qualifies for an additional payment limit for each family member (18 years or older) associated with the principal operator who participates in the farming operation. Family farm or sole proprietorships comprised nearly 87% of U.S. farm operations in 2012. 2. Joint operation . Each member is treated separately and individually for purposes of determining eligibility and payment limits. Thus, a partnership's potential payment limit is equal to the number of qualifying members (plus any special exemptions such as spouses) times the individual payment limit. 3. Corporation. A legally defined association of joint owners or shareholders that is treated as a single person for purposes of determining eligibility and payment limits. This includes corporations, limited liability companies, and similar entities. Most incorporated farm operations are family held.", "These three categories represent over 98% of U.S. farm operations ( Table 1 ). Special rules exist for evaluating both the eligibility of and relevant payment limits for institutional and other exceptional types of potential legal entities. However, because of their small number (less than 2% of U.S. farm operations) and unique nature, they are not discussed further in this report."], "subsections": []}, {"section_title": "Identification", "paragraphs": ["Generally, program eligibility begins with identification of participants. Identifying who or what is participating and therefore how payments may be attributed is the cornerstone to most farm program eligibility. To be eligible to receive any farm program payment, every person or legal entity\u2014including both U.S. and non-U.S. citizens\u2014must provide a name and address, and have either a social security number (SSN) in the case of a person, or a Taxpayer Identification Number (TIN) or Employee Identification Number (EIN) in the case of a legal entity with multiple persons having ownership interests. In this latter situation, each person with an interest must have a TIN or EIN and must declare an interest share in the joint entity using the requisite USDA forms. ", "All participants in programs subject to payment eligibility and payment limitation requirements must submit to USDA two completed forms. The first, CCC-901 (Members' Information), identifies the participating persons and/or entities (through four levels of attribution if needed) and their interest share in the operation. The second form, CCC-902 (Farm Operating Plan), identifies the nature of each person's or entity's stake\u2014that is, capital, land, equipment, active personal labor, or active personal management\u2014in the operation. These forms need be submitted only once (not annually) but must be kept current in regard to any change in the farming operation. Critical changes to a farming operation might include adding a new family member, changing the land rental status from cash basis to share basis, purchasing additional base acres equivalent to at least 20% of the previous base, or substantially altering the interest share of capital or equipment contributed to the farm operation. This information is critical in determining the extent to which each person is actively engaged in the farming operation as described below."], "subsections": []}, {"section_title": "AEF Requirement", "paragraphs": ["AEF criteria are a required component of eligibility for payments under the principal revenue support programs of the 2018 farm bill, including the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs and benefits under the Marketing Assistance Loan (MAL) program. In addition, two direct payment programs established by the Secretary of Agriculture under the authority of the Commodity Credit Corporation Charter Act require that payment recipients meet all AEF criteria\u2014the Cotton Ginning Cost-Share program and the Market Facilitation Program. Finally, benefits under the Trade Adjustment Assistance for Farmers also require that participants meet AEF requirements.", "To be eligible for payments under any of these programs, participants\u2014individuals as well as other types of legal entities\u2014must meet specific requirements concerning their \"active participation\" in the farming operation. In contrast, AEF criteria are not applicable for other farm programs including crop insurance and conservation programs ( Table 4 ).", "The AEF requirements apply equally to U.S. citizens, resident aliens, and foreign entities. This section briefly reviews the specific requirements for each type of legal entity to qualify as AEF."], "subsections": [{"section_title": "AEF Criteria: Person", "paragraphs": ["To understand what it means to be AEF, consider first the case of a single producer. The 2014 farm bill (\u00a71111) defined a producer as an owner, operator, landlord, tenant, or sharecropper that shares in the risk of producing a crop and is entitled to a share of the crop that is produced on the farm. The 2018 farm bill retained this definition of a producer.", "A person, as an individual producer, must meet the following three AEF criteria: ", "P1. The person, independently and separately from other individuals with an interest in the farm business, makes a significant contribution to the operation of: ", "a. capital, equipment, or land; and ", "b. active personal labor, active personal management, or a combination of personal labor and active personal management;", "P2. The person's share of profits or losses is commensurate with his/her contribution to the farming operation; and", "P3. The person shares in the risk of loss from the farming operation.", "However, with respect to the latter two criteria (P2 and P3), USDA has generally interpreted them as having been met if a person or entity participating in a farm program receives income based on the farm's operating results and, thus shares in the profits and losses from the crop. The criteria for meeting ownership or rental control of farm assets (P1.a.) are straightforward. The active personal labor and/or management requirement (P1.b.) are described in more detail below. "], "subsections": [{"section_title": "Active Personal Labor", "paragraphs": ["\"Active personal labor\" means personally providing physical activities necessary in a farming operation, including activities involved in land preparation, planting, cultivating, harvesting, and marketing of agricultural commodities in the farming operation. Other physical activities include those required to establish and maintain conserving cover crops on Conservation Reserve Program acreages and those physical activities necessary in livestock operations. The personal labor contribution by an individual must be at least the smaller of 1,000 hours annually or 50% of the total hours needed to conduct a farming operation comparable in size to the individual's ownership interest in the operation."], "subsections": []}, {"section_title": "Active Personal Management", "paragraphs": ["The requirement for active personal management is less specific. For an individual it means personally providing and participating in management activities \"critical to the profitability of the farming operation.\" Such management activities may be performed under one or more of the following categories: ", "Capital (which includes arranging financing and managing capital), acquiring equipment, acquiring land and negotiating leases, managing insurance, and managing participation in USDA programs; Labor (which includes hiring and managing of hired labor); and Agronomics and marketing (which includes selecting crops and making planting decisions), acquiring and purchasing crop inputs, managing crops and making harvest decisions, and pricing and marketing of crop production.", "The GAO, in a 2013 report to Congress, pointed out that this broad definition of active personal management made it very difficult for USDA to determine whether individual contributions are significant. Furthermore, GAO suggested that, under this broad definition, management responsibilities could be distributed among farm operation members so as to increase the number of individuals who can claim eligibility for payments based on management contributions. ", "In terms of evaluating an individual's eligibility for program payments, the \"active\" personal labor requirement clearly implies that a person must be routinely \"on site\" to undertake physical activities in support of the farming operation. The \"active\" personal management requirement is less clear on physical location and potentially allows a person to make significant contributions of active personal management without physically visiting the farming operation. "], "subsections": []}, {"section_title": "Exceptions for Spouses", "paragraphs": ["Current law allows for special treatment of a spouse. If one spouse is determined to be actively engaged in farming, then the other spouse shall also be determined to have met the requirement. Thus, a married farmer and spouse qualify for a doubling of the individual payment limit. "], "subsections": []}, {"section_title": "Exceptions for Adult Family Members", "paragraphs": ["Family membership in a farm business is defined by being a sibling, spouse, lineal ancestor (e.g., great-grandparent, grandparent, or parent), lineal descendant (e.g., son, daughter, grandchild, or great-grandchild), niece, nephew, or cousin of the principal operator. Every adult family member 18 years or older who receives income based on the farm's operating results is deemed to meet the AEF requirements."], "subsections": []}, {"section_title": "Exceptions for Landowners", "paragraphs": ["An exception is also made for landowners who may forgo the AEF labor and management requirement and still be deemed in compliance with all AEF requirements if the landowner receives income based on the farm's operating results and, thus, shares in the risk of profits (P2) and losses (P3) from the crop."], "subsections": []}, {"section_title": "Failure to Meet AEF Criteria for a Person", "paragraphs": ["Any person or legal entity that does not satisfy the AEF requirements will not be eligible for farm program benefits under relevant programs. For example, a landowner who rents farmland to another farming operation for a fixed rental rate (i.e., under a fixed cash-rental arrangement) would bear no risk nor be subject to any potential loss from the farming operation. In other words, the landowner would fail to meet AEF criteria P2 and P3 described earlier. In such cases, the landowner would not be eligible for the relevant farm program benefits. Similarly, a landlord who rents land to a farming operation for a share of the crop that is guaranteed in volume or value independent of the actual harvest results would also not bear any risk and, thus, not be eligible for farm program benefits."], "subsections": []}]}, {"section_title": "AEF Criteria: Joint Operation", "paragraphs": ["In the case of a joint operation, the amount of farm payments that can be earned in a year depends on the number of qualifying members and their ownership share. Each partner or member must separately meet all of the AEF criteria required for a person. In particular, each partner or member with an ownership interest must contribute active personal labor and/or active personal management to the farming operation (but subject to certain exemptions, such as the spousal and landlord exceptions listed above). The contribution must be identifiable and documentable, separate and distinct from the contributions made by any other partner or member, and critical to the profitability of the farming operation. ", "Since a partnership's potential payment limit is equal to the number of qualifying members (plus qualifying exemptions) times the individual payment limit, the partnership's total limit could be expanded by the addition of each new qualifying member. Similarly, the partnership's total limit could be reduced by one individual payment limit for each member that fails to meet the AEF requirements and any other eligibility criteria. ", "There is an exception to the AEF criteria for certain partnerships. When a partnership owns all of the land it uses for farming (i.e., no land is rented), then its members are automatically deemed to be actively engaged in farming, provided that the partners receive income based on the farm's operating results and, thus, share in the risk of profits and losses from the crop."], "subsections": [{"section_title": "Nonfamily Members in a Joint Operation", "paragraphs": ["In the case of a nonfamily member of a joint venture seeking to satisfy AEF criteria, his or her individual labor and management contributions must be recorded in a special log to verify that a \"significant contribution\" has been achieved. This is described later in this report in the section entitled \" Recordkeeping Requirement of Personal Hours Worked .\""], "subsections": []}]}, {"section_title": "AEF Criteria: Corporation", "paragraphs": ["In the case of a corporation or similar entity with multiple owners (or shareholders), the entity is essentially treated as a single individual. It is considered as \"actively engaged in farming\" with respect to a farming operation if:", "C1.The corporation makes a significant contribution of capital, equipment, or land (or a combination thereof);", "C2.Each member with an ownership interest in the corporate entity makes a significant contribution of personal labor or active personal management\u2014whether compensated or not\u2014to the operation that are:", "a. performed on a regular basis;", "b. identifiable and documentable; and ", "c. separate and distinct from such contributions of other members;", "C3.The collective contribution of corporate members is significant and commensurate with contributions to the farming operation; and ", "C4.The corporation also meets the AEF criteria cited above for a person of (P2) sharing commensurate profits or losses, and (P3) bearing commensurate risk.", "If any member of the corporation fails to meet the labor and management requirements of C2 above, then any program payment or benefit to the corporation will be reduced by an amount commensurate with the ownership share held by that member. An exception to this requirement applies if (a) at least 50% of the entity's stock is held by members that are \"actively engaged in providing labor or management,\" and (b) the total annual farm program payments received collectively by the stockholders or members of the entity is less than one payment limitation. ", "There is an additional exception to the AEF criteria for certain corporate entities. When a corporation owns all of the land it uses for farming (i.e., no land is rented), then the corporation is automatically deemed to meet the AEF criteria provided the corporation receives income based on the farm's operating results and, thus, shares in the risk of profits and losses from the crop."], "subsections": []}, {"section_title": "AEF-Related Farm Payments by Farm Type", "paragraphs": ["When considering institutional recipients of farm payments subject to AEF criteria (i.e., ignoring family and individual payment recipients and recipients of farm payments not subject to AEF criteria), USDA data for 2015 suggests that there were 95,417 qualifying institutional arrangements ( Table 2 )."], "subsections": []}]}, {"section_title": "New AEF Rule: Nonfamily Member Compliance", "paragraphs": ["A nonfamily member of a farming operation is, by default, anyone who fails to meet the criteria of family membership. The 2014 farm bill (\u00a71604) required USDA to add more specificity to the role that a nonfamily producer who is a member of a legal entity\u2014primarily a partnership or joint venture\u2014must play to qualify for farm program benefits. In the rule, USDA was directed to explicitly", "1. Define what constitutes a \" significant contribution of active personal management \" for the purpose of payment eligibility. 2. Consider limits on the number of persons per farming operation who may be considered actively engaged in farming based on a significant contribution of active personal management . Such consideration should take into account: the size, nature, and management requirements of a farming operation; the changing nature of active personal management due to advancements of farming operations; and the degree to which these new regulations will adversely impact the long-term viability of the farming operation. 3. Exclude operations comprised solely of family members from these provisions. 4. Include a plan for monitoring the status of compliance reviews.", "The resulting USDA rule, published on December 16, 2015, specifies how legal entities comprised, either entirely or in part, of nonfamily members may be determined eligible for payments, based on a contribution of active personal management. The provisions of this rule do not apply to persons or entities comprised entirely of family members. It is noteworthy that, based on 2012 evidence in Table 1 , nonfamily farm operations comprise a relatively small share (less than 9%) of total farm operations. USDA estimated that the rule's limit on the number of farm managers could affect around 1,400 general partnerships and joint ventures, reducing USDA outlays (and benefits to producers) by about $50 million total for crop years 2016 through 2018, with an annual impact of $4 million to $38 million.", "As a result of the rule, several additional requirements now apply to nonfamily farming operations seeking to qualify more than one farm manager. Specifically, in addition to the existing AEF requirements, a limit is placed on the number of nonfamily members of a farming operation that can be qualified as a farm manager. Also, an additional recordkeeping requirement now applies for each member of such farming operations contributing any active personal management."], "subsections": [{"section_title": "Limit on Number of Nonfamily Farm Managers", "paragraphs": ["This rule restricts the number of nonfamily farm managers per farming operation to o ne f arm m anager , with the following exceptions:", "Two f arm m anagers permissible . If one person of the farming operation meets the AEF requirements by making a contribution of active personal management, and that farming operation seeks to qualify a second farm manager, the farming operation must also meet the requirement that it is either a large operation or a complex operation. T hree f arm m anagers permissible . To qualify a total of three farm managers, the operation is required to meet the requirements for both size and complexity. No m ore t han t hree f arm m anagers . Under no circumstances is a nonfamily farming operation allowed to qualify more than three persons as farm managers."], "subsections": []}, {"section_title": "Recordkeeping Requirement of Personal Hours Worked", "paragraphs": ["If a farming operation (comprised, in part, of nonfamily members) seeks to qualify one or more nonfamily farm managers as actively engaged in farming, then all persons that provide any management to the farming operation are required to maintain contemporaneous records or activity logs of their management activities, including the management activities that may not qualify as active personal management under this rule. Specifically, activity logs must include information about the location of where the management activity was performed (either on-site or remote) and the time expended or duration of the management and/or labor (see below) performed for the farming operation. In addition, a person's contributions must be identifiable and documentable, separate and distinct from the contributions of other members of the farm operation, and critical to the profitability of the farming operation. "], "subsections": []}, {"section_title": "Active Personal Management: Significant Contribution Redefined", "paragraphs": ["The new definition for a significant contribution of active personal management (for nonfamily members only) requires an annual contribution of 500 hours of management or at least 25% of the total management required for that operation. Eligible management activities must be performed under one or more of the management categories listed earlier in the report section entitled \" Active Personal Management .\"", "The final rule also takes into consideration all of the actions of the farming operation associated with the financing. Passive management activities such as attendance at board meetings or on conference calls, or watching commodity markets or input markets (without making trades), are not considered as making a significant contribution of active personal management."], "subsections": []}, {"section_title": "Significant Combinations of Labor and Management", "paragraphs": ["The final rule, in response to public comment on the difficulty in discriminating between management and labor for farming operations, expanded the measurable standard of what constitutes a significant contribution to include a potential combination of both active personal labor and active personal management. A minimum hourly requirement for a significant contribution of active personal labor of 1,000 hours was established and joined with the hourly standard of 500 hours adopted for defining a significant contribution of active personal management. USDA published a table showing the qualifying minimum combinations of hours contributed to management and labor activities. The table includes five minimum thresholds of combined hours, ranging from 550 hours with predominantly management-identified hours to 950 hours with predominantly labor-identified hours."], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": ["Since 1987, when Congress first introduced the term \"actively engaged in farming\" and required that an individual or entity meet AEF criteria to receive farm program payments, U.S. legislators have continued their efforts to limit payments to those who are actual farmers. However, long-standing concerns remain that some farm operations are organized to overcome program payment limits and maximize the amount of their farm program payments. In particular, some advocacy groups suggest that USDA's new rule did not go far enough in tightening AEF criteria and that it continues to allow for a high number of farm managers and associated payment limits for both family and nonfamily farm operations. These concerns include the lack of specificity in eligibility criteria that continues to allow for as many as three nonfamily farm managers (each, plus their spouses, qualifying for a full payment limit) and no limit on the number of potential farm managers from family-held farm operations. This is noteworthy because family-operated farm businesses represent over 91% of all farm operations. ", "As an example of the lack of specificity, critics point out that the 2014 farm bill provision (\u00a71604) permits exceptions under the rationale of \"concern for the long-term viability\" of the farming operation. Furthermore, critics contend that, under the current monitoring system, it can be difficult for USDA to verify the management claims of farm operation partners. Several of these concerns are briefly described here. "], "subsections": [{"section_title": "GAO Studies: Program Eligibility, Monitoring, and Enforcement", "paragraphs": ["GAO has undertaken several studies of program eligibility and of USDA efforts to monitor and enforce program payment limits. GAO has cited three principal hindrances to USDA oversight and enforcement of AEF regulations for members\u2014both family and nonfamily alike\u2014of a farming operation that claim AEF compliance by providing active personal management: (1) the definition of active personal management is broad and can be interpreted to include many potential activities, (2) requirements of what constitutes significant contributions of management are subjective, and (3) it is difficult to verify individuals' evidence of claimed contributions of active personal management and personal labor\u2014often depending on interviews with individual payment recipients. ", "GAO has said that the three concerns cited above prevent USDA from rigorously enforcing payment eligibility criteria. As a result, large farm operations can distribute various management activities among a partnership's members so as to increase the number of individuals who can claim eligibility for payments based on different types of management contributions. Furthermore, broad regulations allow members to claim that they are making a significant management contribution without physically visiting the farming operation. Thus, the federal government risks distributing payments to individuals who may have little actual involvement in farming operations.", "In a 2010 regulation, USDA recognized that it has the regulatory authority to tighten eligibility criteria but that it is unlikely to use that authority unless explicitly directed to do so by Congress:", "The definition of what constitutes a significant contribution is provided by regulation, not by statute and could be changed. We recognize the difficulty in determining the significance of a management contribution under the current definition and the desirability of a measurable, quantifiable standard. However, unlike labor, the significance of a management contribution is not appropriately measured by the amount of time a person spends doing the claimed contribution. The current regulatory definition of a significant contribution of active personal management has been in effect for over 20 years; Congress has not mandated a more restrictive definition during that time, including in the 2008 Farm Bill.", "As a result, GAO stated that \"it appears unlikely that FSA will change its regulatory definition of active personal management in view of its 2010 statements in the Federal Register .\" ", "USDA data from 2015 ( Table 3 ) demonstrated that partnerships and joint ventures with larger numbers of members relied more heavily on active personal management criteria to meet AEF qualifications. ", "Congress\u2014in the 2014 farm bill (\u00a71604)\u2014explicitly directed USDA to design new regulations for AEF criteria but only for nonfamily members of farming operations. Furthermore, Congress directed that the new AEF criteria avoid any new regulatory obligations that would add to any paperwork or management burden of family farm operations. USDA released the rule in 2015."], "subsections": []}, {"section_title": "Limit on Number of Allowable Farm Managers", "paragraphs": ["Under the 2014 farm bill and 2015 USDA rule, a farm operation\u2014operated primarily by nonfamily members\u2014that meets both the size and complexity criteria discussed above could qualify three farm managers (and potentially their spouses) in addition to those persons qualifying under the personal labor criteria. Thus, a large nonfamily farming operation could have a payment limit that is over $1 million per year. Family-managed farm operations have no limit on the number of potential qualifying members and, thus, on the overall payment limit. ", "Members of Congress may be interested in reviewing the number of farm managers allowed, possibly by establishing an explicit limit on the number a farming operation could claim. For example, everyone on a farm operation who qualifies as a working farmer (i.e., provides land, capital, or equipment and meets the personal labor requirement) could remain eligible to participate in farm programs and receive program payments. However, a restriction could be developed whereby only a single farm manager would be eligible to qualify without providing any farm labor. The spouses of the qualifying persons\u2014both workers and manager\u2014could continue to qualify for payments. "], "subsections": []}, {"section_title": "Potential Long-Term Viability Exclusion", "paragraphs": ["The 2014 farm bill (\u00a71604(b)(3)) instructed USDA to consider the extent to which new regulations would \"adversely impact\" the long-term viability of the farming operation. The basis for determining whether a \"significant contribution\" of managerial activity has occurred is a subjective assessment. Some wonder whether it might negate any farm manager limit\u2014even on nonfamily farm operations\u2014since one could argue that all farm managers are critical for a farm's long-term viability."], "subsections": []}, {"section_title": "Qualifying Family Members", "paragraphs": ["The farm manager restrictions related to the 2015 USDA regulation are relevant only for nonfamily members of a farming operation. The 2014 farm bill (\u00a71604(c)) explicitly directs USDA to not apply any new restrictions to farm operations comprised solely of family members. An adult family member is considered actively engaged in farming if he or she receives income based on the farm's operating results. It is assumed that such a family member meets any input or labor requirements, and no recordkeeping is required to verify that sufficient labor hours have been worked on the farm operation or that sufficient managerial time has been made."], "subsections": []}, {"section_title": "Congressional Monitoring", "paragraphs": ["Various Members of Congress will likely be interested in monitoring the success of USDA's efforts to impose new payment disciplines on nonfamily participants while preventing new management burdens on family farms. Furthermore, they will likely be interested in the extent, if any, to which large farm operations are able to avoid eligibility and payment requirements. "], "subsections": []}]}]}}
{"id": "R43960", "title": "Yemen: Civil War and Regional Intervention", "released_date": "2019-03-21T00:00:00", "summary": ["This report provides information on the ongoing crisis in Yemen. Now in its fifth year, the war in Yemen shows no signs of abating. The war has killed thousands of Yemenis, including combatants as well as civilians, and has significantly damaged the country's infrastructure. The difficulty of accessing certain areas of Yemen has made it problematic for governments and aid agencies to count the war's casualties. One U.S. and European-funded organization, the Armed Conflict Location & Event Data Project (ACLED), estimates that 60,000 Yemenis have been killed since January 2016.", "Though fighting continues along several fronts, on December 13, 2018, Special Envoy of the United Nations Secretary-General for Yemen Martin Griffiths brokered a cease-fire centered on the besieged Red Sea port city of Hudaydah, Yemen's largest port. As part of the deal, the coalition and the Houthis agreed to redeploy their forces outside Hudaydah city and port. The United Nations agreed to chair a Redeployment Coordination Committee (RCC) to monitor the cease-fire and redeployment. On January 16, the United Nations Security Council (UNSCR) passed UNSCR 2452, which authorized (for a six-month period) the creation of the United Nations Mission to support the Hudaydah Agreement (UNMHA), of which the RCC is a significant component. As of late March 2019, the Stockholm Agreement remains unfulfilled, although U.N. officials claim that the parties have made \"significant progress towards an agreement to implement phase one of the redeployments of the Hudayda agreement.\"", "Although both the Obama and Trump Administrations have called for a political solution to the conflict, the two sides in Yemen appear to fundamentally disagree over the framework for a potential political solution. The Saudi-led coalition demands that the Houthi militia disarm, relinquish its heavy weaponry (ballistic missiles and rockets), and return control of the capital, Sanaa, to the internationally recognized government of President Abdu Rabbu Mansour Hadi, who is in exile in Saudi Arabia. The coalition asserts that there remains international consensus for these demands, insisting that the conditions laid out in United Nations Security Council Resolution (UNSCR) 2216 (April 2015) should form the basis for a solution to the conflict. The Houthis reject UNSCR 2216 and seem determined to outlast their opponents while consolidating their control over northern Yemen. Since the December 2017 Houthi killing of former President Ali Abdullah Saleh, a former Houthi ally, there is no apparent single Yemeni rival to challenge Houthi rule in northern Yemen. Armed groups, including Islamist extremists, operate in other parts of the country, and rival political movements and trends advance competing visions for the long-term reestablishment of national governance in the country. The reconciliation of Yemeni factions and the redefinition of the country's political system, security sector, and social contract will likely require years of additional diplomatic engagement.", "According to the United Nations, Yemen's humanitarian crisis is the worst in the world, with close to 80% of Yemen's population of nearly 30 million needing some form of assistance. Two-thirds of the population is considered food insecure; one-third is suffering from extreme levels of hunger; and the United Nations estimates that 230 out of Yemen's 333 districts are at risk of famine. In sum, the United Nations notes that humanitarian assistance is \"increasingly becoming the only lifeline for millions of Yemenis.\"", "For additional information on Yemen, including a summary of relevant legislation, please see CRS Report R45046, Congress and the War in Yemen: Oversight and Legislation 2015-2019, by Jeremy M. Sharp and Christopher M. Blanchard."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["Central governance in Yemen, embodied by the decades-long rule of former President Ali Abdullah Saleh, began to unravel in 2011, when political unrest broke out throughout the Arab world. Popular youth protests in Yemen were gradually supplanted by political elites jockeying to replace then-President Saleh. Ultimately, infighting among various centers of Yemeni political power broke out in the capital, and government authority throughout the country eroded. Soon, militias associated with Al Qaeda in the Arabian Peninsula (AQAP) seized territory in one southern province. Concerned that the political unrest and resulting security vacuum were strengthening terrorist elements, the United States, Saudi Arabia, and other members of the international community attempted to broker a political compromise. A transition plan was brokered, and in 2012 former Vice President Abdu Rabbu Mansour Hadi became president. ", "With the support of the United States, Saudi Arabia, and the United Nations Security Council, President Hadi attempted to reform Yemen's political system. Throughout 2013, key players convened a National Dialogue Conference aimed at reaching broad national consensus on a new political order. However, in January 2014 it ended without agreement.", "One antigovernment group in particular, the northern Yemeni Houthi movement, sought to use military force to reshape the political order. Within weeks of the National Dialogue Conference concluding, it launched a military offensive against various tribal allies of President Hadi. The Houthi were joined by the forces still loyal to former President Saleh, creating an alliance of convenience that was a formidable opponent to President Hadi and his allies.", "In 2014, Houthi militants took over the capital of Sanaa (also spelled Sana'a) and violated several power-sharing arrangements. In 2015, Houthi forces advanced southward from the capital all the way to Aden on the Arabian Sea. In March 2015, after President Hadi, who had fled to Saudi Arabia, appealed for international intervention, Saudi Arabia and a hastily assembled international coalition launched a military offensive aimed at restoring Hadi's rule and evicting Houthi fighters from the capital and other major cities. ", "In April 2015, the United Nations Security Council passed Resolution (UNSCR) 2216 demanding that Houthi-Saleh forces end their use of violence and that all Yemeni parties avoid \"further unilateral actions that could undermine the political transition in Yemen.\" The United States agreed to provide limited assistance to the coalition military operations, assistance which has evolved over time in response to conditions in the conflict and in light of congressional scrutiny.", "In early December 2017, the Houthi-Saleh alliance unraveled, culminating in the killing of former President Saleh on December 4, 2017. Since Saleh's death, the coalition has made military gains, advancing northward along the Red Sea coast toward the port of Hudaydah (also spelled Hodeidah, Hudayda). Nevertheless, Houthi forces remain ensconced in northern Yemen and remain in control of the capital.", "The war has exacerbated a humanitarian crisis in Yemen that began in 2011; as of January 2019, over half of the population required emergency food assistance. Access restrictions to certain areas of Yemen make it problematic for governments and aid agencies to count the war's casualties. One U.S. and European-funded organization, the Armed Conflict Location & Event Data Project (ACLED), estimates that 60,000 Yemenis have been killed since January 2016. UNHCR estimates that 3.9 million Yemenis were displaced internally as of January 2019. ", "In January 2019, the United Nations Panel of Experts on Yemen released their annual report covering 2018. This report noted that Yemen continues to \"slide towards humanitarian and economic catastrophe.\" Though the actual ground war remains confined to \"relatively small areas,\" the effect of the conflict on the economy, as well as the growing presence of armed groups and deep-rooted corruption, has impacted ordinary Yemenis within both Houthi-held areas and liberated areas. "], "subsections": []}, {"section_title": "Stockholm Agreement and Hudaydah Cease-Fire", "paragraphs": ["On December 6, 2018, the warring parties to the conflict in Yemen convened in Sweden under the auspices of the United Nations to discuss various de-escalation proposals and a possible road map to a comprehensive peace settlement. The talks were the first formal negotiations since 2016. After a week of negotiations, all sides agreed to the Stockholm Agreement, which consists of three components: a cease-fire around the port city of Hudaydah, a prisoner swap, and a statement of understanding that all sides would form a committee to discuss the war-torn city Taiz.", "Though fighting continues along several fronts, on December 13, 2018, Special Envoy of the United Nations Secretary-General for Yemen Martin Griffiths brokered a cease-fire centered on the besieged Red Sea port city of Hudaydah, Yemen's largest port. As part of the deal, the coalition and the Houthis agreed to redeploy their forces outside Hudaydah city and port. The United Nations agreed to chair a Redeployment Coordination Committee (RCC) to monitor the cease-fire and redeployment. ", "On January 16, the United Nations Security Council (UNSCR) passed UNSCR 2452, which authorized (for a 6-month period) the creation of the United Nations Mission to support the Hudaydah Agreement (UNMHA), of which the RCC was a significant component. ", "For nearly two months, implementation of the Stockholm Agreement stalled. According to U.N. Special Envoy Griffiths, \"The initial timelines were rather ambitious\u2026.We are dealing with a complex situation on the ground.\" The Stockholm Agreement did not specify which local actors were to assume responsibility for security in Hudaydah after both parties redeployed.", "On February 17, the United Nations announced that \"The parties reached an agreement on Phase 1 of the mutual redeployment of forces\" whereby the Houthis would withdraw from Hudaydah port and the Saudi-led coalition would move out of the eastern outskirts of Hudaydah city. Still, the warring parties have yet to agree on the identities of local police forces to take over security in Hudaydah. As of March 2019, the parties had made \"significant progress towards an agreement to implement phase one of the redeployments of the Hudayda agreement.\"", "Until a final redeployment is reached, the Houthis remain ensconced in Hudaydah, with barricades, trenches and roadblocks still present throughout the city. The Houthis want local coast guard units to assume control. The coalition claims, however, that the leaders of the local coast guards are loyal to the Houthis, and U.N. observers may have difficulty in verifying the neutrality of security personnel in Hudaydah. U.N. officials have reported to the Security Council that the Houthis fear that a withdrawal from Hudaydah will make their forces vulnerable to attack by the coalition.", "Meanwhile, in Jordan, several meetings between the Houthis and the Hadi government have taken place over a planned prisoner exchange as called for in the Stockholm Agreement. Although some exchanges of wounded personnel and prisoners have taken place, the talks have not produced a comprehensive agreement to date.", "Overall, many observers remain skeptical that the cease-fire reflects a broader impulse to end the war, seeing it instead as a means of easing international pressure on the coalition. Since the signing of the Stockholm Agreement, the Saudi-led coalition has conducted airstrikes in Sanaa in retaliation for a Houthi drone attack against a Yemeni military parade. In late January, artillery fire struck a camp for internally displaced people in Yemen's northwestern Hajjah province, killing eight civilians and wounding 30 others. According to reporting by the United Nations, implementation of the Stockholm Agreement has been hindered by an overall lack of trust and a reluctance to make operational concessions outside of a comprehensive political agreement."], "subsections": []}, {"section_title": "Recent U.S. Policy", "paragraphs": ["In 2019, the Trump Administration has continued to support United Nations-led efforts in addressing the humanitarian situation and working toward a comprehensive peace in Yemen. At the same time, the United States has continued to cooperate with Saudi Arabia and the UAE in countering terrorism and attempting to limit Iran's influence in Yemen. For the Trump Administration, U.S. officials have supported the continued defense of Saudi Arabia against Houthi missile and rocket strikes, while also openly calling on coalition members to use air power judiciously to minimize civilian casualties. After ending U.S. refueling support at the coalition's request in November 2018, the Administration has argued against congressional attempts to block arms sales or to end or condition U.S. assistance, arguing that continued U.S. assistance is more likely to achieve the objectives of limiting civilian casualties and maintaining strategic ties to Gulf partners than a punitive approach. ", "To address congressional concerns over errant coalition airstrikes against Yemeni civilians, on November 11, 2018, the United States halted in-flight refueling support for coalition aircraft at the request of the coalition. A month later, then-U.S. Ambassador-designate to Yemen Christopher Henzel noted in his Senate confirmation hearing that ", "\"At our urging, the Saudi-led coalition has incorporated the no-strike list into its target development procedures, stopped the use of cluster munitions, changed its rules of engagement to incorporate U.S. recommendations, and established the Joint Incident Assessment team. The United States will continue to press the coalition and the Republic of Yemen government to minimize civilian casualties and expand urgent humanitarian efforts throughout the country.\"", "In early February 2019, CENTCOM Commander General Joseph Votel testified before the Senate Armed Services Committee regarding the U.S. role in assisting Saudi Arabia. General Votel remarked that:", "The United States will continue to support our regional partners developing processes and procedures to counter ballistic missiles (CBM) and counter unmanned armed aerial systems (C-UAS) to help mitigate threats to civilian populations and critical infrastructure\u2026. We continue to share our own experiences and processes in an effort to improve Saudi Arabia's operational performance and reduce civilian casualties. CENTCOM's security cooperation with Saudi Arabia remains a critical link in our efforts to strengthen partners in the region and meet current and future challenges. The work of U.S. advisors is essential to the success of our mission, and Saudi Arabia underwrites the lion's share of their presence. ", "In February 2019, CNN reported that Saudi Arabia and the UAE had provided U.S. military equipment (armored vehicles) to local Yemeni units fighting the Houthis in possible violation of end-user foreign military sale or direct commercial sale agreements. The coalition has denied these charges, while the U.S. State Department has said that it is \"seeking additional information\" on the issue. ", "At the February 2019 Ministerial to Promote a Future of Peace and Security in the Middle East in Warsaw, Poland, members of the self-described \"quad\" (United States, United Kingdom, Saudi Arabia, and the United Arab Emirates) met to coordinate their policy toward the Yemen conflict. The quad emphasized the importance of implementing the Stockholm Agreement, the problematic role Iran plays in arming and financing the Houthis, and the need for additional humanitarian assistance. The foreign ministers comprising the quad also \"expressed full support for Saudi Arabia and its legitimate national security concerns and called for an immediate end to such attacks by Houthi forces and their allies.\"", "On February 13, 2019, the House passed (248-177) H.J.Res. 37 , a joint resolution \"Directing the removal of United States Armed Forces from hostilities in the Republic of Yemen that have not been authorized by Congress.\" Prior to its passage by the House, the White House issued a Statement of Administration Policy in which the Administration argued that \"the premise of the joint resolution is flawed\" because the United States has provided only \"limited support to member countries of the Saudi-led coalition\" and U.S. forces providing such intelligence and logistics support are not engaged in hostilities. As amended and passed by the House, Section 4 of H.J.Res. 37 includes a rule of construction stating that \"Nothing in this joint resolution may be construed to influence or disrupt any intelligence, counterintelligence, or investigative activities conducted by, or in conjunction with, the United States Government\u2026\" ", "The Senate companion resolution, S.J.Res. 7 , was introduced on January 30, 2019 and passed by the Senate (54-46) on March 13, 2019. As amended, S.J.Res. 7 includes rules of construction stating that \"nothing in this joint resolution may be construed to influence or disrupt any intelligence, counterintelligence or investigative activities relating to threats in or emanating from Yemen conducted by, or in conjunction with, the United States Government\u2026\" (Section 4) and that \"nothing in this joint resolution may be construed as authorizing the use of military force\" (Section 7).", "On February 7, 2019, Ranking Member on the Senate Foreign Relations Committee Senator Robert Menendez introduced S. 398 , the Saudi Arabia Accountability and Yemen Act of 2019. This bill, which was originally introduced in the 115 th Congress, would, among other things, require the end of in-flight refueling for Saudi-led coalition operations in Yemen, suspend certain arms sales to the kingdom, sanction persons blocking humanitarian access in Yemen, and sanction persons supporting the Houthis in Yemen."], "subsections": [{"section_title": "Iranian Support to the Houthis", "paragraphs": ["Although Houthi militia forces most likely do not depend on Iran for all of their armaments, financing, and manpower, many observers agree that Iran and its Lebanese ally Hezbollah have aided Houthi forces with advice, training, and arms shipments. In 2016, one unnamed Hezbollah commander interviewed about his group's support for the Houthis remarked \"After we are done with Syria, we will start with Yemen, Hezbollah is already there.... Who do you think fires Tochka missiles into Saudi Arabia? It's not the Houthis in their sandals, it's us.\" In repeated public statements by high-level Saudi officials, Saudi Arabia has cited Iran's illicit support for the Houthis as proof that Iran is to blame for the Yemen conflict. Reports and allegations of Iranian involvement in Yemen have become more frequent as the war has continued, and from Iran's perspective, aiding the Houthis would seem to be a relatively low-cost way of keeping Saudi Arabia mired in the Yemen conflict. However, Iran had few institutionalized links to the Houthis before the civil conflict broke out in 2015, and questions remain about the degree to which Iran and its allies can control or influence Houthi behavior. At present, Iranian aid to the Houthis does not appear to match the scale of its commitments to proxies in other parts of the Middle East, such as in Syria, Lebanon, and Iraq.", "Prior to the 2015 conflict, the central government in Yemen had acquired variants of Scud-B missiles from the Soviet Union and North Korea. The Houthis took control of these missiles as part of their seizure of the capital. Since 2016, the Houthis have been firing what they call the \"Burkan\" short-range ballistic missile (claimed range of 500-620 miles) into Saudi Arabia (the latest version is the Burkan-2H). In November 2017, after the Houthis fired a Burkan-2H deep into Saudi Arabian territory, the Saudi-led coalition and U.S. officials said that the Burkan-2H is an Iran-manufactured Qaim missile.", "In January 2018, the United Nations Panel of Experts on Yemen concluded that Iran was in noncompliance with UNSCR 2216 for failing to prevent the transfer to Houthi forces of Iranian-made short-range ballistic missiles. On February 26, 2018, Russia vetoed a draft U.N. Security Council resolution that would have expressed U.N. concern that Iran is in noncompliance with the international arms embargo created by UNSCR 2216. ", "In summer 2018, the United Nations Panel of Experts on Yemen provided a confidential report to the United Nations Security Council suggesting that Iran may be continuing to violate the international arms embargo by supplying the Houthis with advanced weaponry. After the U.N. experts visited Saudi Arabia and inspected debris from missiles fired by the Houthis, their report noted that these weapons showed \"characteristics similar to weapons systems known to be produced in the Islamic Republic of Iran\" and that there was a \"high probability\" that the missiles were manufactured outside of Yemen, shipped in sections to the country, and reassembled by the Houthis. ", "In May 2018, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) designated five Iranian individuals who have \"provided ballistic missile-related technical expertise to Yemen's Houthis, and who have transferred weapons not seen in Yemen prior to the current conflict, on behalf of the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF).\"", "In testimony to the Senate Select Committee on Intelligence in January 2019, Director of National Intelligence Daniel Coats stated: ", "In Yemen, Iran's support to the Huthis, including supplying ballistic missiles, risks escalating the conflict and poses a serious threat to US partners and interests in the region. Iran continues to provide support that enables Huthi attacks against shipping near the Bab el Mandeb Strait and land-based targets deep inside Saudi Arabia and the UAE, using ballistic missiles and UAVs.", "The U.N. Panel of Experts on Yemen reported in January 2019 that the panel \"has traced the supply to the Houthis of unmanned aerial vehicles and a mixing machine for rocket fuel and found that individuals and entities of Iranian origin have funded the purchase.\" "], "subsections": []}, {"section_title": "Saudi Arabia and U.S. Support for the Coalition", "paragraphs": ["For Saudi Arabia, according to one prominent analyst, the Houthis embody what Iran seeks to achieve across the Arab world: that is, the cultivation of an armed nonstate, non-Sunni actor who can pressure Iran's adversaries both politically and militarily (akin to Hezbollah in Lebanon). A decade before the current conflict began in 2015, Saudi Arabia supported the central government of Yemen in various military campaigns against a Houthi insurgency which began in 2004. ", "In 2014, when Houthi militants took over the capital and violated several power-sharing arrangements, Saudi leaders expressed increasing alarm about Houthi advances. In March 2015, after President Hadi, who had fled to Saudi Arabia, appealed for international intervention, Saudi Arabia quickly assembled an international coalition and launched a military offensive aimed at restoring Hadi's rule and evicting Houthi fighters from the capital and other major cities. Saudi-led coalition forces began conducting air strikes against Houthi-Saleh forces and imposed strict limits on sea and air traffic to Yemen. ", "From the outset, Saudi leaders sought material and military support from the United States for the campaign. In March 2015, President Obama authorized \"the provision of logistical and intelligence support to GCC-led military operations,\" and the Obama Administration announced that the United States would establish \"a Joint Planning Cell with Saudi Arabia to coordinate U.S. military and intelligence support.\" U.S. CENTCOM personnel were deployed to provide related support, and U.S. mid-air refueling of coalition aircraft began in April 2015 and ended in November 2018.", "In the years since, the Saudi military and its coalition partners have provided advice and military support to a range of pro-Hadi forces inside Yemen, while waging a persistent air campaign against the Houthis and their allies. Saudi ground forces and Special Forces have conducted limited cross-border operations, and Saudi naval forces limit the entry and exit of vessels from Yemen's ports. Separately, a United Nations Verification and Inspection Mechanism (UNVIM) has operated since May 2016 to assist in validating commercial sea and air traffic in support of the arms embargo imposed by Resolution 2216.", "According to President Trump's December 2018 letter to Congress consistent with the War Powers Resolution, U.S. Armed Forces, \"in a non-combat role,\" ", "continued to provide military advice and limited information, logistics, and other support to regional forces combatting the Houthi insurgency in Yemen; however, aerial refueling of regional forces' aircraft ended in November 2018. United States forces are present in Saudi Arabia for this purpose. Such support does not involve United States Armed Forces in hostilities with the Houthis for the purposes of the War Powers Resolution."], "subsections": []}]}, {"section_title": "U.S. Counterterrorism Operations in Yemen", "paragraphs": ["As the Saudi-led coalition's campaign against the Houthis continues and Yemen fragments, the United States has sustained counterterrorism operations against Al Qaeda in the Arabian Peninsula (AQAP) and various affiliates of the Islamic State. In total, CENTCOM conducted 36 air strikes in Yemen in 2018. According to President Trump's December 2018 letter to Congress consistent with the War Powers Resolution, \"a small number of United States military personnel are deployed to Yemen to conduct operations against al-Qa'ida in the Arabian Peninsula (AQAP) and ISIS\u2011Yemen.\" In December 2018, General Frank McKenzie testified before the Senate Armed Services Committee stating that \"they [AQAP] have an aspiration to attack the United States. They are prevented from generating that only because of the direct pressure that remains on them. So that is a clear, unequivocal national interest of the United States.\"", "Some observers contend that AQAP's power inside Yemen has diminished considerably as a result of losses sustained from U.S. counterterrorism operations and of competing Yemeni factions vying for supremacy. According to Gregory D. Johnsen, resident scholar at the Arabia Foundation, \"AQAP is weaker now than it has been at any point since it was formed in 2009.\" ", "In August 2018, U.S. officials claimed that one of the most high-value targets in the AQAP organization, bomb maker Ibrahim al Asiri, had been killed in a U.S. air strike last year. Asiri was a Saudi national who was believed to have created the explosive devices used in the 2009 Christmas Day attempted bombing of Northwest Airlines Flight 253, in a 2009 attack against former Saudi Arabian intelligence chief Mohammed bin Nayef, and in the October 2010 air cargo packages destined for Jewish sites in Chicago.", "In January 2019, U.S. officials confirmed that Jamal al-Badawi, an al Qaeda operative involved in the October 2000 bombing of the USS Cole in Aden, was killed in a precision strike in Marib governorate on January 1. Al-Badawi had been indicted by a federal grand jury in 2003 for the murder of U.S. nationals and U.S. military personnel.", "To date, two American soldiers have died in the ongoing U.S. counterterrorism campaign against AQAP and other terrorists inside Yemen. In January 2017, Ryan Owens, a Navy SEAL, died during a counterterrorism raid in which between 4 and 12 Yemeni civilians also were killed, including several children, one of whom was a U.S. citizen. The raid was the Trump Administration's first acknowledged counterterror operation. In August 2017, Emil Rivera-Lopez, a member of the elite 160th Special Operation Aviation Regiment, died when his Black Hawk helicopter crashed off the coast of Yemen during a training exercise."], "subsections": []}, {"section_title": "Yemen's Humanitarian Crisis", "paragraphs": [], "subsections": [{"section_title": "Humanitarian Conditions and Assistance", "paragraphs": ["According to the United Nations, Yemen's humanitarian crisis is the worst in the world, with close to 80% of Yemen's population of nearly 30 million needing some form of assistance. The U.N.Office for the Coordination of Humanitarian Affairs (OCHA) estimates that two-thirds of the population is food insecure, one-third are suffering from extreme levels of hunger, and 230 out of Yemen's 333 districts were at risk of famine as of January 2019. In sum, the United Nations notes that humanitarian assistance is \"increasingly becoming the only lifeline for millions of Yemenis.\" ", "As noted above, on February 17, the parties to the conflict began to implement the Stockholm Agreement. The deal calls for main roads to reopen from Hudaydah to Sanaa and Taiz and humanitarian access to the Red Sea Mills grain storage facility, which holds enough grain to provide food for 3.7 million Yemenis for a month. Access to the Mills has been cut off since September 2018.", "On February 26 in Geneva, the United Nations and the Governments of Sweden and Switzerland hosted the third annual pledging conference for the crisis in Yemen. Saudi Arabia and the UAE each pledged $750 million. For 2019, the United Nations is seeking $4 billion from donors for programs in Yemen. The 2018 humanitarian appeal sought a little over $3 billion, of which donors have provided $2.58 billion to date. The United States, Saudi Arabia, the United Arab Emirates, and Kuwait combined accounted for 66.8% of all contributions to the 2018 appeal.", "Between FY2018 and FY2019, the United States has provided $720.8 million in emergency humanitarian aid for Yemen. Most of these funds ($498 million) are provided through USAID's Office of Food for Peace to support the World Food Programme in Yemen. Since March 2015, the United States has been the largest contributor of humanitarian aid to Yemen, with more than $1.71 billion in U.S. funding provided since FY2015. The United States provided a total of $566.2 million in humanitarian assistance in FY2018. Funds were provided to international aid organizations from USAID's Office of Foreign Disaster Assistance (OFDA), USAID's Food for Peace (FFP), and the U.S. Department of State's Bureau of Population, Refugees, and Migration (State/PRM).", "Humanitarian conditions continue to be undermined both by economic disruptions caused by the fracturing of the country's financial system and by access constraints imposed by parties to the conflict."], "subsections": []}, {"section_title": "Food Insecurity and the Depreciation of Yemen's Currency", "paragraphs": ["Remote regions of northern Yemen deep in Houthi territory are often the most challenging areas in which to deliver food aid. In most other parts of the country, food is available for purchase in the marketplace but prices are unaffordable for wide swaths of the population. According to the Food and Agriculture Organization of the United Nations, \"The average cost of the minimum survival food basket\u2014comprised of the minimum items required for a household to survive for one month\u2014remains more than 110 percent higher than prior to the conflict's escalation in March 2015.\"", "One cause of inflationary prices is the depreciation of the national currency (rial). Yemen has two competing central banks, one in Sanaa (run by the Houthis) and one in Aden (run by the Hadi government). The Houthis in Sanaa have depleted the original central bank's foreign currency reserves and have been unable to pay public sector salaries. The central bank in Aden has liberally printed money, which has driven down the value of the rial. According to the Economist Intelligence Unit's outlook for 2019, \"rapid currency depreciation for most of 2018 significantly increased the price of imports [most Yemeni food is imported], and, despite a rally in the rial in late 2018, is a trend that is likely to continue throughout the forecast period as the Aden-based authorities continue to print money...\" In 2018, Saudi Arabia agreed to lend $2 billion with the central bank in Aden to help the Hadi government finance food imports. However, according to one report, as of November 2018, \"only a little over $170 million had been authorized for payment.\""], "subsections": []}, {"section_title": "Restrictions on the Flow of Commercial Goods and Humanitarian Aid", "paragraphs": ["One of the key aspects of the 2015 United Nations Security Council Resolution (UNSCR) 2216 is that it authorizes member states to prevent the transfer or sale of arms to the Houthis and also allows Yemen's neighbors to inspect cargo suspected of carrying arms to Houthi fighters. In March 2015, the Saudi-led coalition imposed a naval and aerial blockade on Yemen, and ships seeking entry to Yemeni ports required coalition inspection, leading to delays in the off-loading of goods and increased insurance and related shipping costs. Since Yemen relies on foreign imports for as much as 90% of its food supply, disruptions to the importation of food exacerbate already strained humanitarian conditions resulting from war.", "To expedite the importation of goods while adhering to the arms embargo, the European Union, Netherlands, New Zealand, the United Kingdom, and the United States formed the U.N. Verification and Inspection Mechanism (UNVIM), a U.N.-led operation designed to inspect incoming sea cargo to Yemen for illicit weapons. UNVIM, which began operating in February 2016, can inspect cargo while also ensuring that humanitarian aid is delivered in a timely manner.", "However, Saudi officials argue that coalition-imposed restrictions and strict inspections of goods and vessels bound for Yemen are still required because of Iranian weapons smuggling to Houthi forces. Saudi officials similarly argue that the delivery of goods to ports and territory under Houthi control creates opportunities for Houthi forces to redirect or otherwise exploit shipments for their material or financial benefit.", "According to the latest reporting from United Nations Office for the Coordination of Humanitarian Affairs (U.N.OCHA), over the last several months, the volume of cargo discharged at Hudaydah and Saleef ports dropped, and now is 20% less than when the conflict began in 2015."], "subsections": []}, {"section_title": "Water, Sanitation, and Hygiene (WASH)", "paragraphs": ["Yemen is experiencing the world's largest ongoing cholera outbreak. Since late 2016, there have been more than 1.3 million suspected cholera cases and nearly 2,800 associated deaths. Cholera is a diarrheal infection that is contracted by ingesting food or water contaminated with the bacterium Vibrio cholerae . Yemen's water and sanitation infrastructure have been devastated by the war. Basic municipal services such as garbage collection have deteriorated and, as a result, waste has gone uncollected in many areas, polluting water supplies and contributing to the cholera outbreak. In addition, international human rights organizations have accused the Saudi-led coalition of conducting air strikes that have unlawfully targeted civilian infrastructure, such as water wells, bottling facilities, health facilities, and water treatment plants. ", "Humanitarian organizations working in the WASH sector have improved cholera prevention and reduced the frequency of new cases, but have not eliminated the crisis. According to U.N.OCHA's 2019 Yemen Humanitarian Needs Overview, \"Public water and sanitation systems require increased support to provide minimum services and avoid collapse. Some 22 per cent of rural and 46 per cent of urban populations are connected to partially functioning public water networks, and lack of electricity or public revenue creates significant reliance on humanitarian support.\" As of January 2019, 17.8 million people in Yemen are living without access to safe water and sanitation, and 19.7 million lack access to adequate health care."], "subsections": []}]}, {"section_title": "Where is the Yemen Conflict Heading?", "paragraphs": ["While the Stockholm Agreement has the potential to lead to a broader, nation-wide cease-fire, the longer it takes to implement, the greater risk of the agreement's collapse and the prospect for renewed conflict in Hudaydah. Although fighting has continued along several fronts since December 2018, the Stockholm Agreement has provided the Saudi-led coalition with the possibility of gradually extricating itself its intervention in Yemen. If the cease-fire collapses, then the coalition would have to weigh the benefits of trying to evict the Houthis from Hudaydah militarily with the humanitarian costs to the Yemeni people and the reputational damage it would incur within the international community. ", "Even if the United Nations is able to make progress toward a comprehensive peace agreement, Yemen is still beset by multiple political conflicts and violence. In the south, regional secessionists are at odds with what remains of President Hadi's internationally recognized government. In the partially Houthi-besieged city of Taiz, Yemen's third-largest city, rival militias backed by the coalition have engaged in internecine warfare and have been accused by human rights groups of committing war crimes. ", "Many key questions about the future of Yemen remain unanswered. In the context of the current Houthi-Saudi-led coalition conflict, few observers have insight into whether or under what conditions the Houthis might be willing to relinquish their heavy or advanced weaponry used to threaten Saudi Arabia, the United Arab Emirates, and maritime shipping. Iran, now involved in Yemen in new ways, may prove unwilling to sever ties that vex its Saudi adversaries. Political and military compromise between the coalition and the Houthis could bring fighting to an end, but might also entrench an anti-U.S. and anti-Saudi Houthi movement as a leading force in a new order in Yemen.", "The complexity of Yemen's internal politics and the short-term need to resolve the current conflict have overshadowed domestic and international consideration of what the future of Yemeni governance may be. Overall, the prospects for returning to a unified Yemen appear dim. According to the United Nations Panel of Experts on Yemen, \"The authority of the legitimate Government of Yemen has now eroded to the point that it is doubtful whether it will ever be able to reunite Yemen as a single country.\" While the country's unity is a relatively recent historical phenomenon (dating to 1990), the international community had widely supported the reform of Yemen's political system under a unified government just a few years ago. In 2013, Yemenis from across the political spectrum convened a National Dialogue Conference aimed at reaching broad national consensus on a new political order. However, in January 2014 it ended without agreement, and the Houthis launched a war. ", "The failure of the 2013 National Dialogue Conference aimed at reaching broad national consensus on a new political order continues to violently reverberate throughout Yemen. If some semblance of normalcy is to return to the country, local players will have to return to addressing key issues, such as the power of a central government, the devolution of power to regional authorities, and the composition of national security forces. The longer these issues remain unresolved, the greater the prospect for Yemen's dissolution into competing self-declared autonomous regions."], "subsections": []}]}}
{"id": "R44519", "title": "Overseas Contingency Operations Funding: Background and Status", "released_date": "2019-01-15T00:00:00", "summary": ["Congressional interest in Overseas Contingency Operation (OCO) funding has continued as Members debate ways of funding priorities without breaching discretionary spending limits set in law.", "Since the terrorist attacks of September 11, 2001, Congress has appropriated approximately $2 trillion in discretionary budget authority designated as emergency requirements or for Overseas Contingency Operations/Global War on Terrorism (OCO/GWOT) in support of the broad U.S. government response to the 9/11 attacks and for other related international affairs activities. This figure amounts to approximately 9.4% of total discretionary spending during this period.", "Congress has used supplemental appropriation acts or designated funding for emergency requirements or OCO/GWOT\u2014or both\u2014in statute. These funds are not subject to limits on discretionary spending in congressional budget resolutions or to the statutory discretionary spending limits established by the Budget Control Act of 2011 (BCA; P.L. 112-125). The Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA; P.L. 99-177) allows emergency funding to be excluded from budget control limits. The BCA added the OCO/GWOT designation to the BBEDCA exemption, thereby providing Congress and the President with an alternate way to exclude funding from the BCA spending limits.", "While there is no overall statutory limit on the amount of emergency or OCO/GWOT spending, both Congress and the President have fundamental roles in determining how much of the spending to provide each fiscal year. Congress must designate any such funding in statute on an account-by-account basis. The President is also required to designate it as such after it is appropriated to be available for expenditure. Debate over what should constitute OCO/GWOT or emergency activities and expenses has shifted over time, reflecting differing viewpoints about the extent, nature, and duration of U.S. military operations in Afghanistan, Iraq, Syria, and elsewhere. Funding designated for OCO/GWOT has also been used to fund base-budget requirements of the DOD and State Department and to prevent or respond to crises abroad, including armed conflict, as well as human-caused and natural disasters.", "Some defense officials and policymakers argue OCO funding allows for flexible response to contingencies, and provides a \"safety valve\" to the spending caps and threat of sequestration\u2014the automatic cancellation of budget authority largely through across-the-board reductions of nonexempt programs and activities\u2014under the BCA. Critics, however, have described OCO/GWOT as a loophole or \"gimmick\"\u2014morphing from an account for replacing combat losses of equipment, resupplying expended munitions, and transporting troops through war zones, to a \"slush fund\" for activities unrelated to contingency operations.", "Congress appropriated approximately $103 billion for OCO in FY2017 (8.5% of all discretionary appropriations), $78 billion for OCO in FY2018 (5.5% of all discretionary appropriations), and $68.8 billion for OCO so far in FY2019. Discretionary appropriations for FY2019 are not yet final; a continuing resolution expired December 21, 2018.", "Following passage of the Bipartisan Budget Act of 2018 (P.L. 115-123), which raised discretionary budget caps for defense and foreign affairs agencies in FY2018 and FY2019, the Administration proposed shifting some OCO funding into the base, or regular, budget. Although Congress has generally not followed Administration requests for reduced funding for foreign affairs and domestic activities and has increased funding for defense, the President has asked cabinet secretaries to propose spending cuts of 5% in FY2020. Such proposals, if requested in a budget submission, may create difficult choices for Congress in FY2020 and FY2021\u2014the final two years of the BCA discretionary spending limits. Congress's decisions on OCO/GWOT designations will affect how much agency funding is available for military operations and foreign affairs activities overseas, how much is subject to the BCA caps, and how much is incorporated into regular budgets and long-term budget projections."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides background information and potential oversight issues for Congress on war-related and other international emergency or contingency-designated funding since FY2001.", "Since the terrorist attacks of September 11, 2001, Congress has appropriated approximately $2 trillion in discretionary budget authority designated for emergencies or OCO/GWOT in support of the broad U.S. government response to the 9/11 attacks and for other related international affairs activities. This figure includes $1.8 trillion for the Department of Defense (DOD), $154 billion for the Department of State and U.S. Agency for International Development (USAID), and $3 billion for the Department of Homeland Security (DHS) and Coast Guard (see Figure 1 ).", "This CRS report is meant to serve as a reference on certain funding designated as emergency requirement s or for Overseas Contingency Ope rations/Global War on Terrorism (OCO/GWOT), as well as related budgetary and policy issues. It does not provide an estimate of war costs within the OCO/GWOT account (all of which may not be for activities associated with war or defense) or such costs in the DOD base budget or other agency funding (which may be related to war activities, such as the cost of health care for combat veterans).", "For additional information on the FY2019 budget and related issues, see CRS Report R45202, The Federal Budget: Overview and Issues for FY2019 and Beyond , by [author name scrubbed]; CRS In Focus IF10942, FY2019 National Defense Authorization Act: An Overview of H.R. 5515 , by [author name scrubbed] and [author name scrubbed]; and CRS Report R45168, Department of State, Foreign Operations and Related Programs: FY2019 Budget and Appropriations , by [author name scrubbed], [author name scrubbed], and [author name scrubbed].", "For additional information on the Budget Control Act as amended, see CRS Report R44874, The Budget Control Act: Frequently Asked Questions , by [author name scrubbed] and [author name scrubbed], and CRS Report R44039, The Defense Budget and the Budget Control Act: Frequently Asked Questions , by [author name scrubbed].", "For additional information on U.S. policy in Afghanistan and the Middle East, see CRS Report R45122, Afghanistan: Background and U.S. Policy , by [author name scrubbed], CRS Report R45096, Iraq: Issues in the 115th Congress , by [author name scrubbed], and CRS Report RL33487, Armed Conflict in Syria: Overview and U.S. Response , coordinated by [author name scrubbed]."], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "Increase in War-Related Appropriations after 9/11", "paragraphs": ["Congress may consider one or more supplemental appropriations bills (colloquially called supplementals) for a fiscal year to provide funding for unforeseen needs (such as a response to a national security threat or a natural disaster), or to increase appropriations for other activities that have already been funded. Supplemental appropriations measures generally provide additional funding for selected activities over and above the amount provided through annual or continuing appropriations.", "Throughout the 20 th century, Congress relied on supplemental appropriations to fund war-related activities, particularly in the period immediately following the start of hostilities. For example, in 1951, a year after the start of the Korean War, Congress approved DOD supplemental appropriations totaling $32.8 billion ($268 billion in constant FY2019 dollars). In 1952, DOD supplemental appropriations totaled just $1.4 billion ($11 billion in constant FY2019), as the base budget incorporated costs related to the war effort. A similar pattern occurred, to varying degrees, during the Vietnam War and 1990-1991 Gulf War.", "During the post-9/11 conflicts, primarily conducted in Afghanistan and Iraq but also in other countries, Congress has, for an extended period and to a much greater degree than in previous conflicts in the 20 th century, appropriated supplemental and specially designated funding over and above the base DOD budget\u2014that is, funding for planned or regularly occurring costs to man, train, and equip the military force. Since FY2001, DOD funding designated for OCO/GWOT has averaged 17% of the department's total budget authority (see Figure 2 ). By comparison, during the conflict in Vietnam\u2014the only other to last more than a decade\u2014DOD funding designated for non-base activities averaged 6% of the department's total budget authority.", "Supplemental appropriations can provide flexibility for policymakers to address demands that arise after funding has been appropriated. However, that flexibility has caused some to question whether supplementals should only be used to respond to unforeseen events, or whether they should also provide funding for activities that could reasonably be covered in regular appropriations acts."], "subsections": []}, {"section_title": "Shift from Emergency Supplementals to Contingency Funding", "paragraphs": ["Congress used supplemental appropriations to provide funds for defense and foreign affairs activities related to operations in Afghanistan and Iraq following 9/11, and each subsequent fiscal year through FY2010. Initially understood as reflecting needs that were not anticipated during the regular appropriations cycle, supplemental appropriations were generally enacted as requested, and almost always designated as emergency requirements.", "Beginning in FY2004, DOD received some of its war-related funding in its regular annual appropriations; these funds were designated as emergency. When funding needs for war and non-war-related activities were higher than anticipated, the Bush Administration submitted supplemental requests.", "In the FY2011 appropriations cycle, the Obama Administration moved away from submitting supplemental appropriations requests to Congress for war-related activities and used the regular budget and appropriation process to fund operations. This approach implied that while the funds might be war-related, they largely supported predictable ongoing activities rather than unanticipated needs. In concert with this change in budgetary approach, the Obama Administration began formally using the term Overseas Contingency Op erations in place of the Bush Administration's term Global War on Terror . Both the Obama and Trump Administrations requested that OCO funding be designated in a manner that would effectively exempt such funding from the BCA limits on discretionary defense spending.", "Currently, there is no overall procedural or statutory limit on the amount of emergency or OCO/GWOT-designated spending that may be appropriated on an annual basis. Both Congress and the President have roles in determining how much emergency or OCO/GWOT spending is provided to federal agencies each fiscal year. Such spending must be designated as such within the President's budget request for congressional consideration. The President must separately designate the spending after Congress enacts appropriations for it to be available for expenditure."], "subsections": [{"section_title": "Designation of Funding as Emergency or OCO/GWOT", "paragraphs": ["The emergency funding designation predated the OCO/GWOT designation. Through definitions statutorily established by the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA; P.L. 99-177 ), spending designated as emergency requirements is for \"unanticipated\" purposes, such as those that are \"sudden ... urgent ... unforeseen ... and temporary.\" The BBEDCA does not further specify the types of activities that are eligible for that designation. Thus, any discretionary funding designated by Congress and the President as being for an emergency is effectively exempted from certain statutory and procedural budget enforcement mechanisms, such as the BCA limits on discretionary spending.", "Debate of what should constitute OCO/GWOT or emergency activities and expenses has shifted over time, reflecting differing viewpoints about the extent, nature, and duration of U.S. military operations in Afghanistan, Iraq, Syria, and elsewhere. Over the years, both Congress and the President have at times adopted more, and at times less, expansive definitions of such designations to accommodate the strategic, budgetary, and political needs of the moment.", "Prior to February 2009, U.S. operations in response to the 9/11 attacks were collectively referred to as the Global War on Terror , or GWOT. Between September 2001 and February 2009, there was no separate budgetary designation for GWOT funds\u2014instead, funding associated with those operations was designated as an emergency requirement.", "The term OCO was not applied to the post-9/11 military operations in Iraq and Afghanistan until 2009. In February 2009, the Obama Administration released A New Era of Responsibili ty: Renewing America's Promise , a presidential fiscal policy document. That document did not mention or reference GWOT; instead, it used the term OCO in reference to ongoing military operations in Iraq and Afghanistan. The first request for emergency funding for OCO\u2014not GWOT\u2014was delivered to Congress in April 2009. Since the FY2010 budget cycle, DOD has requested both base budget and OCO funding as part of its annual budget submission to Congress.", "Beginning with the National Defense Authorization Act for Fiscal Year 2010 (NDAA; P.L. 111-84 ), the annual defense authorization bills have referenced the authorization of additional appropriations for OCO rather than the names of U.S. military operations conducted primarily in Afghanistan and Iraq. In 2011, the BCA ( P.L. 112-125 ) amended the BBEDCA to create the Overseas Contingency Ope rations/Global War on Terrorism designation, which provided Congress and the President with an alternate way to exempt funding from the BCA caps without using the emergency designation. Beginning with the Consolidated Appropriations Act, 2012 ( P.L. 112-74 ), annual appropriations bills have referenced the OCO/GWOT designation.", "The foreign affairs agencies began formally requesting OCO/GWOT funding in FY2012, distinguishing between what is referred to as enduring, ongoing or base costs versus any extraordinary, temporary costs of the State Department and USAID in supporting ongoing U.S. operations and policies in Iraq, Afghanistan, and Pakistan. Congress, having used OCO/GWOT exemption for DOD, adopted this approach for foreign affairs, though its uses for State, Foreign Operations, and Related Programs (SFOPS) activities have never been permanently defined in statute. For the first foreign affairs OCO/GWOT appropriation, in FY2012, funds were provided for a wide range of recipient countries beyond the countries in the President's request, including Yemen, Somalia, Kenya, and the Philippines. In addition to country-specific uses, OCO/GWOT-designated funds were also appropriated for the Global Security Contingency Fund."], "subsections": []}]}, {"section_title": "OCO and the Budget Control Act (BCA)", "paragraphs": ["All budgetary legislation is subject to a set of enforcement procedures associated with the Congressional Budget Act of 1974 ( P.L. 93-344 ), as well as other rules, such as those imposed by the Budget Control Act of 2011 ( P.L. 112-125 ) as amended. Those rules provide mechanisms to enforce both procedural and statutory limits on discretionary spending."], "subsections": [{"section_title": "The Budget Control Act of 201121", "paragraphs": ["Enacted on August 2, 2011, the BCA as amended sets limits on defense and nondefense spending. As part of an agreement to increase the statutory limit on public debt, the BCA aimed to reduce annual federal budget deficits by a total of at least $2.1 trillion from FY2012 through FY2021, with approximately half of the savings to come from defense.", "The spending limits (or caps ) apply separately to defense and nondefense discretionary budget authority. The caps are enforced by a mechanism called sequestration . Sequestration automatically cancels previously enacted appropriations (a form of budget authority) by an amount necessary to reach prespecified levels. The BCA effectively exempted certain types of discretionary spending from the statutory limits, including funding designated for OCO/GWOT.", "As a result, Congress and the President have designated funding for OCO to support activities that, in previous times, had been funded within the base budget. This was done, in part, as a response to the discretionary spending limits enacted by the BCA. By designating funding for OCO for certain activities not directly related to contingency operations, Congress and the President can effectively continue to increase topline defense, foreign affairs, and other related discretionary spending without triggering sequestration.", "Congress has repeatedly amended the legislation to raise the spending limits (thus lowering its deficit-reduction effect by corresponding amounts). Congress has passed four bills that revised the automatic spending caps initially established by the BCA, including the following:", "American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240 ); Bipartisan Budget Act of 2013 (BBA 2013; P.L. 113-67 ); Bipartisan Budget Act of 2015 (BBA 2015; P.L. 114-74 ); and Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123 )."], "subsections": []}, {"section_title": "The Bipartisan Budget Act of 2018", "paragraphs": ["On February 9, 2018, three days before President Donald Trump submitted his FY2019 budget request, Congress passed the Bipartisan Budget Act of 2018 (BBA 2018, P.L. 115-123 ). The act raised the discretionary spending limits set by the BCA from $1.069 trillion for FY2017 to $1.208 trillion for FY2018 and to $1.244 trillion for FY2019. The BBA 2018 increased FY2019 discretionary defense funding levels (excluding OCO) by the largest amounts to date\u2014$85 billion, from $562 billion to $647 billion, and nondefense funding (including SFOPS) by $68 billion, from $529 billion to $597 billion. It did not change discretionary spending limits for FY2020 and FY2021."], "subsections": []}, {"section_title": "OCO Funds for Non-War DOD Activities", "paragraphs": ["DOD documents indicate the department in recent years has used OCO funding for activities viewed as unrelated to war.", "For example, the department's FY2019 budget request estimates $358 billion in OCO funding from FY2015 through FY2019. Of that amount, DOD categorizes $68 billion (19%) for activities unrelated to operations in Afghanistan, Iraq, and Syria. These activities are described as \"EDI/Non-War,\" referring in part to the European Deterrence Initiative, and \"Base-to-OCO,\" referring to OCO funding used for base-budget requirements.", "Similarly, a DOD Cost of War report from June 2018 shows $1.8 trillion in war-related appropriations from FY2001 through FY2018 for operations primarily conducted in Afghanistan, Iraq, and Syria. Of that total, DOD categorizes $219 billion (12%) as other than \"war funds.\" These funds are described as \"Classified,\" \"Modularity,\" \"Fuel (non-war),\" \"Noble Eagle (Base),\" and \"Non-War.\"", "International affairs agencies also began increasing the share of their budgets designated for OCO, and applying the designation to an increasing range of activities apparently unrelated to conflicts. OCO as a share of the international affairs budget grew from about 21% in FY2012 to nearly 35% in FY2017. Unlike DOD, however, the State Department and USAID have not specified whether any OCO-designated funds are considered part of the agencies' base budgets."], "subsections": []}, {"section_title": "Previous Proposal to Move OCO Funding to Base Budget", "paragraphs": ["According to a DOD budget document from FY2016, the Obama Administration planned to \"transition all enduring costs currently funded in the OCO budget to the base budget beginning in 2017 and ending by 2020.\" The plan was to describe \"which OCO costs should endure as the United States shifts from major combat operations, how the Administration will budget for the uncertainty surrounding unforeseen future crises, and the implications for the base budgets of DOD, the Intelligence Community, and State/OIP. This transition will not be possible if the sequester-level discretionary spending caps remain in place.\" The BCA remained in effect and OCO funding was used for base-budget requirements."], "subsections": []}, {"section_title": "OCO: Safety Valve, Slush Fund, or Practical Solution?", "paragraphs": ["Some defense officials and policymakers say OCO funding enables a flexible and timely response to an emergency or contingency and provides a political and fiscal safety valve to the BCA caps and threat of sequestration. They say if OCO funding were not used in such a manner and discretionary spending limits remained in place, DOD and other federal agencies would be forced to cut base budgets and revise strategic priorities. For example, former Defense Secretary Jim Mattis has said if Congress allows the FY2020 and FY2021 defense spending caps to take effect, the 2018 National Defense Strategy, which calls for the United States to bolster its military advantage against potential competitors such as Russia and China, \"is not sustainable.\"", "Critics, including Acting White House Chief of Staff Mick Mulvaney, have described the OCO account as a \"slush fund\" for military and foreign affairs spending unrelated to contingency operations. Mulvaney, former director of the White House Office of Management and Budget (OMB), has described the use of OCO funding for base budget requirements as \"budget gimmicks.\" Critics argue what was once generally restricted to a fund for replacing combat losses of equipment, resupplying expended munitions, transporting troops to and through war zones, and distributing foreign aid to frontline states has \"ballooned into an ambiguous part of the budget to which government financiers increasingly turn to pay for other, at times unrelated, costs.\"", "OMB criteria for OCO funding include the combat losses of ground vehicles, aircraft, and other equipment; replenishment of munitions expended in combat operations; facilities and infrastructure in the theater of operations; transport of personnel, equipment, and supplies to and from the theater; among other items and activities.", "Determining which activities are directly related, tangentially related, or unrelated to war operations is often a point of debate. Some have questioned the use of OCO funding to purchase F-35 fighter jets: \"It is jumping the shark.... There's no pretense that it has anything to do with the region.\" Others have argued it makes sense for the military to use OCO funding to purchase new aircraft to replace planes used in current conflicts and no longer in production: \"What are the conditions that are making the combatant commanders and those with train/equip authority to say, 'We need more of this?'\""], "subsections": []}]}, {"section_title": "GWOT/OCO Appropriations by Agency, FY2001-FY2019", "paragraphs": ["Congress has appropriated approximately $2 trillion in discretionary budget authority for war-related and other international emergency or contingency-designated activities since 9/11. This figure is a CRS estimate of funding designated for emergencies or OCO/GWOT in support of the broad U.S. government response to the 9/11 attacks, as well as other foreign affairs activities, from FY2001 through FY2019. This includes $1.8 trillion for DOD, $154 billion for the Department of State and USAID, and $3 billion for DHS and the Coast Guard (see Table 1 ). These figures do not include emergency-designated funding appropriated in this period for domestic programs, such as disaster response."], "subsections": [{"section_title": "DOD", "paragraphs": [], "subsections": [{"section_title": "OCO/GWOT Funding as a Share of the DOD Budget", "paragraphs": ["From FY2001 through FY2009, DOD received $1.8 trillion in appropriations for OCO/GWOT, or approximately 17% of the department's total discretionary budget authority of $10.8 trillion during the period.", "The department's OCO/GWOT funding peaked in FY2008 both in terms of nominal dollars, at $186.9 billion, and as a share of its discretionary budget, at 28.1% (see Figure 3 ), after the Bush Administration surged additional U.S. military personnel to Iraq. The department's OCO funding also increased as a share of its discretionary spending from FY2009 to FY2010 following the Obama Administration's deployment of more U.S. military personnel to Afghanistan, and again in FY2017 following enactment of legislation in response to the Trump Administration's request for additional appropriations.", "In FY2019, the department's OCO/GWOT funding totaled $68.8 billion, or 10% of its discretionary spending."], "subsections": []}, {"section_title": "OCO, Base Budget Comparisons by Appropriations Title, Military Service", "paragraphs": ["In terms of appropriations titles, more than two-thirds of OCO/GWOT funding since FY2001 has been for Operation and Maintenance (O&M)\u2014nearly double the percentage of base budget funding for O&M over the same period (see Figure 4 ). O&M funds pay for the operating costs of the military such as fuel, maintenance to repair facilities and equipment, and the mobilization of forces. DOD describes \"war-related operational costs\" as operations, training, overseas facilities and base support, equipment maintenance, communications, and replacement of combat losses and enhancements.", "In terms of the military services, more than half (55%) of OCO/GWOT funding since FY2001 has gone to the Army\u2014more than double the percentage of base budget funding for the service during this period (see Figure 5 ). Emergency appropriations were initially provided as general \"defense-wide\" appropriations. Beginning in FY2003, as operations evolved and planning developed, allocations increased and were specifically provided for the services."], "subsections": []}, {"section_title": "Trends in OCO Funding and Troop Levels", "paragraphs": ["OCO funding for DOD has not decreased at the same rate as the number of U.S. troops in Afghanistan, Iraq, and Syria has decreased. For example, the number of U.S. military personnel in Afghanistan, Iraq, and Syria decreased from a peak of 187,000 personnel in FY2008 (including 148,000 in Iraq and 39,000 in Afghanistan) to an assumed level of nearly 18,000 personnel in FY2019 (including 11,958 personnel in Afghanistan and 5,765 personnel in Iraq and Syria)\u2014a decline of approximately 169,000 personnel (90%). Meanwhile, OCO funding decreased from a peak of $187 billion in FY2008 to $69 billion in FY2019\u2014a decline of approximately $118 billion (63%).", "While the number of U.S. forces in Afghanistan, Iraq, and Syria has decreased since FY2009, the number of U.S. troops deployed or stationed elsewhere to support those personnel has fallen by a lesser degree and, in recent years, remained relatively steady. For example, the number of support forces\u2014that is, personnel from units and forces operating outside of Afghanistan, Iraq, Syria, and other countries (including those stationed in the continental United States or otherwise mobilized) decreased from 112,000 personnel in FY2009 to an assumed level of 76,073 personnel in FY2019\u2014a decline of 35,927 personnel (32%). In addition, when these support forces are combined with in-country force levels, the total force level decreases by a percentage more similar to the OCO budget, from 297,000 personnel in FY2009 to an assumed level of 93,796 personnel in FY2019\u2014a decline of 203,204 personnel (68%) (see Figure 6 ).", "Some of these support forces serve in U.S. Central Command's area of responsibility, which includes 20 countries in West Asia, North Africa, and Central Asia, and whose forward headquarters is based in Al Udeid Air Base in Qatar.", "According to DOD, the reason OCO funding has not fallen in proportion to the number of U.S. troops in Afghanistan, Iraq, and Syria is \"due to the fixed, and often inelastic, costs of infrastructure, support requirements, and in-theater presence to support contingency operations.\" For example, in FY2019, the department requested $20 billion in OCO funding for \"in-theater support\"\u2014nearly 30% of the OCO request and more than any other functional category. ", "However, some analysts have noted the U.S. military's fixed costs in Afghanistan remained relatively stable at roughly $7 billion a year from FY2005 through FY2013 until after the BCA went into effect\u2014and have since increased to roughly $32 billion a year, suggesting \"that roughly $25 billion in 'enduring' or base budget costs migrated into the Afghanistan budget, effectively circumventing the budget caps. The actual funding needed for operations in Afghanistan is roughly $20 billion in FY2019.\""], "subsections": []}, {"section_title": "DOD Criteria for Contingency Operations", "paragraphs": ["Title 10, Section 101, of the United States Code, defines a contingency operation as any Secretary of Defense-designated military operation \"in which members of the armed forces are or may become involved in military actions, operations, or hostilities against an enemy of the United States or against an opposing military force.\" Since the 1990s NATO intervention in the Balkans, DOD Financial Management Regulations (FMR) have defined contingency operations costs as those expenses necessary to cover incremental costs \"that would not have been incurred had the contingency operation not been supported.\" Such incremental costs would not include, for example, base pay for troops or planned equipment modernization, as those expenditures are normal peacetime needs of the DOD.", "In September 2010, the Office of Management and Budget (OMB), in collaboration with DOD, issued criteria for the department to use in making war/overseas contingency operations funding requests (see Appendix A ).", "In January 2017, the Government Accountability Office (GAO) concluded the criteria for deciding whether items belong in the base budget or OCO funding \"are outdated and do not address the full scope of activities\" in the budget request. \"For example, they do not address geographic areas such as Syria and Libya, where DOD has begun military operations; DOD's deterrence and counterterrorism initiatives; or requests for OCO funding to support requirements not related to ongoing contingency operations\" it states.", "Section 1524 of the National Defense Authorization Act for Fiscal Year 2018 ( P.L. 115-91 ), directed the Secretary of Defense to \"update the guidelines regarding the budget items that may be covered by overseas contingency operations accounts.\""], "subsections": []}, {"section_title": "Costs of Major DOD Contingency Operations", "paragraphs": ["Congress has enacted legislation directing DOD to compile reports on the costs of certain contingency operations.", "Section 1266 of the National Defense Authorization Act for Fiscal Year 2018 ( P.L. 115-91 ) directs the Secretary of Defense to submit the Department of Defense Supplemental and Cost of War Execution report, known as the Cost of War report, on a quarterly basis to the congressional defense committees and the GAO: \"Not later than 45 days after the end of each fiscal year quarter, the Secretary of Defense shall submit to the congressional defense committees and the Comptroller General of the United States the Department of Defense Supplemental and Cost of War Execution report for such fiscal year quarter.\"", "The conference report accompanying the Department of Defense and Labor, Health and Human Services, and Education Appropriations Act, 2019 and Continuing Appropriations Act, 2019 ( P.L. 115-245 ) requires DOD to report incremental costs for operations in Afghanistan, Iraq, and other countries in the U.S. Central Command area of responsibility and directs:", "the Secretary of Defense to continue to report incremental costs for all named operations in the Central Command Area of Responsibility on a quarterly basis and to submit, also on a quarterly basis, commitment, obligation, and expenditure data for the Afghanistan Security Forces Fund, the Counter-Islamic State of Iraq and Syria Train and Equip Fund, and for all security cooperation programs funded under the Defense Security Cooperation Agency in the Operation and Maintenance, Defense-Wide Account.", "DOD's June 2018 Cost of War report to Congress details $1.5 trillion in obligations associated with certain contingency operations from FY2001 through FY2018. That figure includes $757.1 billion for those conducted primarily in Iraq\u2014Operation Iraqi Freedom (OIF), Operation New Dawn (OND), and Operation Inherent Resolve (OIR); $727.7 billion for those conducted primarily in Afghanistan\u2014Operation Enduring Freedom (OEF) and Operation Freedom's Sentinel (OFS); and $27.8 billion for those conducted primarily in the United States (see Table 2 and Figure 7 )."], "subsections": []}, {"section_title": "Limitations to Cost of War Data", "paragraphs": ["DOD's quarterly Cost of War reports are intended to provide Congress, GAO, and other stakeholders insight into the how the department obligates war-related appropriations. The reports include base and OCO obligations related to war activities, as well as obligation data broken down by certain major operations, service, component, agency, and appropriation. ", "However, as GAO has noted, \"the proportion of OCO appropriations not associated with specific operations identified in the statutory Cost of War reporting requirement has trended upward\" in part because the criteria DOD uses for making OCO funding requests is outdated and not always used.", "More recently, the June 2018 Cost of War report does not appear to reference three recently classified overseas contingency operations targeting militants affiliated with al-Qaeda and the Islamic State of Iraq and Syria (ISIS): Operation Yukon Journey in the Middle East, Northwest Africa Counterterrorism, and East Africa Counterterrorism. ", "Some observers have noted other limitations to Cost of War reports, such as incomplete accounting of costs, limited distribution of the documents and underlying data, and formatting that makes it difficult to reconcile the data with information contained in budget justification documents."], "subsections": []}]}, {"section_title": "State/USAID", "paragraphs": ["Between FY2001 and FY2018, Congress appropriated a total of $154 billion in OCO funds for State Department and USAID. For FY2018 (the most recent full-year appropriations for foreign affairs agencies), OCO funding amounted to 22% of the total appropriations for State Department, Foreign Operations and Related Programs appropriation.", "The Obama Administration's FY2012 International Affairs budget request was the first to include a request for OCO funds for \"extraordinary and temporary costs of operations in Iraq, Afghanistan, and Pakistan.\" At the time, the Administration indicated that the use of this designation was intended to provide a transparent, whole-of-government approach to the exceptional war-related costs incurred in those three countries, thus better aligning the associated military and civilian costs. This first foreign affairs OCO request identified the significant resource demands placed on the State Department as a result of the transitions from military-led to civilian-led missions in Iraq and Afghanistan, as well as the importance of a stable Pakistan for the U.S. effort in Afghanistan.", "The FY2012 foreign affairs OCO request included: ", "for Iraq, funding for the U.S. Embassy in Baghdad, consulates throughout Iraq, security costs in light of the then-planned U.S. military withdrawal, a then-planned civilian-led Police Development and Criminal Justice Program, military and development assistance in Iraq, and oversight of U.S. foreign assistance through the Special Inspector General for Iraq Reconstruction; for Afghanistan, funding to strengthen the Afghan government and build institutional capacity, support State/USAID and other U.S. government agency civilians deployed in Afghanistan, provide short-term economic assistance to address counterinsurgency and stabilization efforts, and provide oversight of U.S. foreign assistance programs in Afghanistan through the Office of the Special Inspector General for Afghanistan Reconstruction; and for Pakistan, funding to support U.S. diplomatic presence and diplomatic security in Pakistan, provide Pakistan Counterinsurgency Capability Funds (PCCF) to train and equip Pakistani forces to eliminate insurgent sanctuaries and promote stability and security in neighboring Afghanistan and the region.", "In subsequent years, the Administration designated certain State Department activities in Syria and other peacekeeping activities as OCO, and Congress accepted and broadened this expanded use of OCO in annual appropriations. In the FY2017 budget request, the Administration further broadened its use of State OCO funds, applying the designation to funds for countering Russian aggression, counterterrorism, humanitarian assistance, and aid to Africa. In addition to OCO funds requested through the normal appropriations process, the Administration in recent years requested emergency supplemental funding (designated as OCO) to support State/USAID efforts in countering the Islamic State and to respond to global health threats such as the Ebola and Zika viruses.", "For FY2019, the Trump Administration requested no OCO/GWOT funding for the Department of State and USAID, although the FY2019 House and Senate SFOPS bills ( H.R. 6385 and S. 3108 , 115 th Congress) would have appropriated approximately $8 billion in OCO-designated funding for various priorities.", "The estimated $154.1 billion in emergency and OCO/GWOT appropriations enacted to date for State/USAID includes major non-war-related programs, such as aid for the 2004 tsunami along Indian Ocean coasts, 2010 earthquake in Haiti, 2013 Ebola outbreak in West Africa, and 2015 worldwide outbreak of the Zika virus; as well as diplomatic operations (e.g., paying staff, providing security, and building and maintaining embassies). OCO/GWOT has also funded a variety of foreign aid programs, ranging from the Economic Support Fund to counter-narcotics in Afghanistan, Pakistan, and Iraq, among other activities in other countries.", " Figure 8 depicts the emergency or OCO appropriations for foreign affairs activities. Since 2012, when the OCO designation was first used for foreign affairs, more OCO funds have been appropriated than were requested each year, and those have also been authorized to be used in additional countries."], "subsections": []}, {"section_title": "DHS (USCG)60", "paragraphs": ["Since January 2002, approximately $3 billion of post-9/11 emergency and OCO-designated funding has been provided to the U.S. Coast Guard (USCG) for its traditional homeland security missions and for USCG operations in support of U.S. Navy activities. This funding has been provided at various times as either an appropriation to the Coast Guard's operating expenses accounts, or as a transfer from Navy accounts to the Coast Guard.", "Open-source information on the use of those funds has varied. One FY2009 supplemental appropriations request included funding as a transfer, with the intent of funding \"Coast Guard operations in support of OIF and OEF, as well as other classified activities.\" The FY2017 OCO request for annual appropriations for Navy Operations and Maintenance included $163 million for Coast Guard operational support for the deployment of patrol boats to the Northern Arabian Gulf and a port security unit to Guantanamo Bay, among other pay and equipment expenses."], "subsections": []}]}]}, {"section_title": "FY2019 OCO Funding", "paragraphs": [], "subsections": [{"section_title": "President's FY2019 OCO Request", "paragraphs": [], "subsections": [{"section_title": "Budget Deal Prompts OCO-to-Base Shift", "paragraphs": ["The Trump Administration initially requested a total of $89 billion in OCO funding for FY2019. All the funding was requested by DOD.", "In an amendment to the budget after Congress raised the BCA spending caps as part of the Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123 ), the Administration removed the OCO designation from $20 billion of the funding, in effect, shifting that amount into the DOD base budget request.", "In a statement on the budget amendment, Mulvaney said the request fixes \"long-time budget gimmicks\" in which OCO funding has been used for base budget requirements. Beginning in FY2020, \"the Administration proposes returning to OCO's original purpose by shifting certain costs funded in OCO to the base budget where they belong,\" he wrote."], "subsections": []}, {"section_title": "OCO Funding by Operation", "paragraphs": ["Of the revised amount of $69 billion requested for DOD OCO funding in FY2019:", "$46.3 billion (67%) was for Operation Freedom's Sentinel (OFS) in Afghanistan and related missions; $13 billion (22%) for Operation Inherent Resolve (OIR) in Iraq and Syria and related missions; $4.8 billion (9%) for the European Deterrence Initiative (EDI) to boost the U.S. military presence in eastern Europe to deter Russian military aggression; and $0.9 billion (1%) for security cooperation (see Figure 9 ).", "The FY2019 OCO budget assumes a total force level (average annual troop strength) of 93,796 personnel. That figure includes:", "11,958 primarily in Afghanistan (OFS); 5,765 primarily in Iraq and Syria (OIR); 59,463 for in-theater support; and 16,610 primarily in the continental United States (CONUS) or otherwise mobilized (see Figure 10 ).", "The number of personnel actually in-country or in-theater at any given time may exceed or fall below those assumed levels. The FY2019 force level assumes an increase of 3,153 personnel (3.5%) from the FY2018 assumed level, all of which is assumed for in-theater support. (For analysis of troop level and budget trends, see the section, \" Trends in OCO Funding and Troop Levels ,\" earlier in this report.)", "As previously discussed, DOD acknowledges \"OCO funding has not declined at the same rate as the in-country troop strength \u2026 due to the fixed, and often inelastic, costs of infrastructure, support requirements, and in-theater presence to support contingency operations.\" The departments lists the following as OCO cost drivers:", "In-theater support, including infrastructure costs like command, control, communications, computers, and intelligence (C4I) and base operations for U.S. Central Command (CENTCOM) locations; Persistent demand for combat support such as intelligence, surveillance, and reconnaissance (ISR) assets used to enhance force protection; Equipment reset, which lags troop level changes and procurement of contingency-focused assets like munitions, unmanned aerial vehicles and force protection capabilities that may not be linked directly to in-country operations; and International programs and deterrence activities, which are linked to U.S. engagement in contingency operations and support U.S. interests but are not directly proportional to U.S. troop presence."], "subsections": []}, {"section_title": "OCO Funding by Functional Category", "paragraphs": ["DOD also breaks down the FY2019 OCO budget request by functional category (see Table 3 ). By this measure, the largest portion of OCO funding was $20 billion for in-theater support, followed by operations and force protection (including the incremental cost of military operations in Afghanistan, Iraq, Syria, and other countries), at $14.7 billion; and unspecified classified programs, at $9.9 billion.", "According to the Congressional Budget Office (CBO), approximately $47 billion (68%) of the FY2019 OCO budget request consists of enduring activities\u2014that is, \"those that would probably continue in the absence of overseas conflicts\"\u2014that could be funded in the DOD base budget. CBO associates enduring activities with the following DOD functional categories: in-theater support, classified programs, equipment reset and readiness, European Deterrence Initiative, security cooperation, and joint improvised-threat defeat."], "subsections": []}, {"section_title": "Differing OCO Projections", "paragraphs": ["Executive Branch budget documents for FY2019 show differing projections for how much OCO would be apportioned over the Future Years Defense Program (also known as the FYDP, pronounced \"fiddip,\" the five-year period from FY2019 through FY2023). For example, Table 1-11 in DOD's National Defense Budget Estimates for FY2019, citing OMB data, projects five-year OCO funding at $359 billion. However, Table 1-9 of the same document puts the figure at $149 billion after assuming a higher amount of OCO funding shifting into the base budget.", "According to OMB, the President's initial FY2019 budget request projected increasing caps on defense discretionary base budget authority by $84 billion (15%) to $660 billion in FY2020 and by $87 billion (15%) to $677 billion in FY2021. It also projected defense funding for Overseas Contingency Operations (OCO) totaling $73 billion in FY2020 and $66 billion in FY2021. Thus, projected defense discretionary funding would total $733 billion in FY2020 and $743 billion in FY2021.", "FY2019 DOD budget documents show the same defense discretionary topline for FY2020 and FY2021. But they list an \"Outyears Placeholder for OCO\" of $20 billion in fiscal years FY2020-FY2023, and an \"OCO to Base\" amount of $53 billion in FY2020 and $45.8 billion in each year from FY2021-FY2023. The documents do not break down what accounts or activities are included in these amounts.", "The emergence of any new contingencies or conflicts would likely change DOD assumptions about OCO needs."], "subsections": []}]}, {"section_title": "Congressional Action on the FY2019 OCO Request and Appropriations", "paragraphs": ["Congress has appropriated a total of $68.8 billion for DOD OCO funding in FY2019, including the following amounts:", "$67.9 billion in defense funds provided in the Department of Defense and Labor, Health and Human Services, and Education Appropriations Act, 2019 and Continuing Appropriations Act, 2019 ( P.L. 115-245 ), which Congress passed on September 26, 2018; and $921 million in defense funds provided in the Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs Appropriations Act, 2019 ( P.L. 115-244 ), which Congress passed on September, 21, 2018.", "For the Department of State and USAID, as well as the Department of Homeland Security and U.S. Coast Guard, FY2019 OCO levels have not yet been determined. They remain at prorated FY2018 levels because of continuing resolutions (CR) to fund certain agencies through December 21, 2018.", "The FY2019 House and Senate SFOPS bills ( H.R. 6385 and S. 3108 , 115 th Congress) would have appropriated approximately $8 billion in OCO-designated funding for various priorities. The House committee-reported version of the Homeland Security appropriations bill ( H.R. 6776 , 115 th Congress) would not have appropriated any OCO/GWOT funding for the Coast Guard, while the Senate committee-reported version of the bill ( S. 3109 , 115 th Congress) would have appropriated $165 million for OCO/GWOT funding for the Coast Guard."], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "How Could the BCA Affect Future OCO Levels?", "paragraphs": ["Any decision by the 116 th Congress to change discretionary defense and nondefense spending limits that remain in effect for FY2020 and FY2021 under the Budget Control Act (BCA; P.L. 112-25 ) could impact future OCO funding levels.", "Lawmakers may consider the following questions:", "Will Congress keep the BCA as is and rely on OCO funding that is not subject to the caps to meet agency requirements? Will Congress repeal the BCA and use less OCO funding? Will Congress amend the BCA limits for future years and continue to use OCO funding, as it has in the past? Will Congress significantly reduce DOD and international affairs funding to stay within the BCA caps and not use OCO funding?", "In a November 2018 report, the National Defense Strategy Commission, a bipartisan panel created by Congress, issued recommendations related to OCO and the BCA. Recommendation No. 24 states, \"Congress should eliminate the final two years of caps under the BCA.\" Recommendation 29 states, \"To better prepare for major-power competition, Congress should gradually integrate OCO spending back into the base Pentagon budget. This also requires a dollar-for-dollar increase in the BCA spending caps, should they remain in force, so that this transfer does not result in an overall spending cut.\""], "subsections": []}, {"section_title": "Will Congress Continue to Use OCO for State/USAID?", "paragraphs": ["Both House and Senate FY2019 committee-reported appropriations bills from the 115 th Congress included about $8 billion in OCO funding for State/USAID. It remains to be seen if the 116 th Congress will pass this OCO level as requested or extend the continuing resolution."], "subsections": []}, {"section_title": "How Much Would Defense Spending Caps Increase under the Administration's Budget Plans?", "paragraphs": ["Congress could enact legislation to authorize and appropriate a level of base and OCO spending to meet current or revised discretionary defense spending caps in any number of ways. ", "In FY2019 budget documents from OMB and DOD, the Trump Administration projected increasing defense spending in FY2020 and FY2021 beyond the statutory limits of the Budget Control Act of 2011 ( P.L. 112-25 ), but by differing amounts based on differing OCO projections. These figures serve as possible scenarios or options for Congress to consider."], "subsections": [{"section_title": "FY2020 Projections", "paragraphs": ["According to OMB budget documents, the President's initial FY2019 budget request projected $733 billion in defense discretionary spending in FY2020, including a base budget of $660 billion (which assumes an $84 billion, or 15%, increase in the BCA defense cap\u2014or repeal of the legislation altogether) and an OCO defense budget of $73 billion (see Figure 11 ).", "According to DOD budget documents, the President's revised FY2019 budget request projected $733 billion in defense discretionary spending in FY2020, including a base budget of $713 billion (which assumes a $137 billion, or 24%, increase in the BCA defense cap\u2014what would be the largest increase to the BCA defense caps yet\u2014or repeal of the legislation altogether) and an OCO budget of $20 billion.", "Alternatively, assuming no change in the cap and congressional support for the Administration's projected $733 billion topline in FY2020, Congress could keep the BCA defense cap unchanged at $576 billion and designate an additional $157 billion for OCO."], "subsections": []}, {"section_title": "FY2021 Projections", "paragraphs": ["According to OMB budget documents, the President's initial FY2019 budget request projected $743 billion in defense discretionary spending in FY2021, including a base budget of $677 billion (which assumes an $87 billion, or 15%, increase in the BCA defense cap\u2014or repeal of the legislation altogether) and an OCO budget of $66 billion (see Figure 11 ).", "According to DOD budget documents, the President's revised FY2019 budget request projected $743 billion in defense discretionary spending in FY2021, including a base budget of $723 billion (which assumes a $133 billion, or 23%, increase in the BCA defense cap\u2014or repeal of the legislation altogether) and an OCO budget of $20 billion.", "Alternatively, assuming no change in the cap and congressional support for the Administration's projected $743 billion topline in FY2020, Congress could keep the BCA defense cap unchanged at $590 billion and designate an additional $153 billion for OCO."], "subsections": []}, {"section_title": "Flat FYDP?", "paragraphs": ["As previously discussed, these figures would change with different toplines for the national defense budget function (050). ", "Former Defense Secretary Jim Mattis and the National Defense Strategy Commission have recommended that Congress increase the defense budget between 3% and 5% a year above inflation (\"real growth\") to meet U.S. strategic goals.", "President Donald Trump has said the discretionary defense spending request would total $700 billion in FY2020, a decrease of 2% in nominal terms from FY2019. Trump said, \"We know what the budget\u2014the new budget is for the Defense Department. It will probably be $700 billion.\" However, some media outlets have since reported that the President intends to request a discretionary defense budget of $750 billion in FY2020.", "Senator James Inhofe, chairman of the Senate Armed Services Committee, and Representative Mac Thornberry, ranking member of the House Armed Services Committees in the 116 th Congress, have argued, \"Any cut in the defense budget would be a senseless step backward.\" Thornberry has also said transferring recurring OCO costs into the regular budget \"makes sense \u2026 it makes for more predictable budgeting, but it's all about what happens on the topline.\" Representative Adam Smith, chairman of the House Armed Services Committee in the 116 th Congress, has said of the defense budget: \"I think the number is too high, and it's certainly not going to be there in the future \u2026 We've got a debt, we've got a deficit, we've got infrastructure problems, we've got healthcare, education\u2014there's a whole lot that is necessary to make our country safe, secure, and prosperous.\" ", "Acting Defense Secretary Patrick Shanahan has talked about a flat topline for national defense: \"When you look at the $700 billion, it's not just for one year drop down, [or] a phase, it's a drop and then held constant\" over the FYDP. Under Secretary of Defense (Comptroller)/Chief Financial Officer David Norquist, who is also performing the duties of the Deputy Secretary of Defense, at one time was reportedly preparing two budgets for FY2020\u2014one assuming $733 billion for national defense and another assuming $700 billion.", "An analyst has noted \"returning enduring OCO costs to the base budget, particularly a vast majority of those enduring costs over a short period as DOD has outlined, could significantly complicate an agreement between congressional Democrats and Republicans to increase both the defense and nondefense BCA budget caps for FY2020 and FY2021.\""], "subsections": []}]}, {"section_title": "How Much OCO Funding Could Shift to the DOD Base Budget?", "paragraphs": ["As analyst noted, \"OCO has become an even less-defined pot of money \u2026 Congress needs to properly question the DOD budget planners on the future of OCO.\"", "In a January 2017 report, GAO concluded, \"Without a reliable estimate of DOD's enduring OCO costs, decision makers will not have a complete picture of the department's future funding needs or be able to make informed choices and trade-offs in budget formulation and decision making.\"", "The department states it has not fully estimated those costs in part because of the BCA. In a response to GAO, DOD wrote, \"Developing reliable estimates of enduring OCO costs is an important first step to any future effort to transition enduring OCO costs to the base budget. In the context of such an effort, the Department would consider developing and reporting formal estimates of those costs. However, until there is sufficient relief from the budgetary caps established in the Budget Control Act of 2011, the Department will need OCO to finance counterterrorism operations, in particular [OFS] and [OIR].\"", "In an October 2018 report, the Congressional Budget Office estimated OCO funding for DOD enduring activities\u2014that is, those that would probably continue in the absence of overseas conflicts\u2014totaled more than $50 billion a year (in 2019 dollars) from 2006 to 2018\u2014and are projected to total about $47 billion a year starting in FY2020.", "This figure appears to be consistent with projections published by DOD. According to the department's FY2019 budget documents, DOD projected $53 billion for \"OCO to Base\" in FY2020 and $45.8 billion for \"OCO to Base\" for FY2021 through FY2023."], "subsections": []}, {"section_title": "How Does OCO Funding Affect Defense Planning?", "paragraphs": ["Some analysts have concluded:", "Uncertainty created by current reliance on OCO, particularly to fund base budget needs, could be detrimental to national security on three levels: (a) by undermining budget controls and contributing thereby to larger deficits, (b) by generating insecurity in the defense workforce and in defense suppliers, and (c) by creating long-term uncertainty in defense planning. The alternative, transitioning longer-term OCO expenses to the base budget, could be achieved through a combination of increased budget caps, targeted cuts in inefficient Defense programs, and increased revenues.", "For example, a potential enduring activity in the OCO budget is the European Deterrence Initiative (EDI). It was previously known as the European Reassurance Initiative (ERI), an effort that began in June 2014 to increase the number of U.S. military personnel and prepositioned equipment in Central and Eastern Europe intended in part to reassure NATO allies after Russia's military seized Crimea. As some analysts have noted, \"Because it is in the OCO part of the budget request, EDI funding does not include a projection for how much funding will be allocated in future years, which can create uncertainty in the minds of allies and adversaries alike about the U.S. military's commitment to the program.\" On the other hand, some contend that it is precisely EDI's flexibility that allows the commander of European Command to quickly respond to changing security and posture needs in Europe, and ensure that monies intended for European deterrence will not be redirected to other DOD priorities.", "In its November 2018 report, the National Defense Strategy Commission quoted the late military strategist Bernard Brodie, who wrote \"strategy wears a dollar sign.\" The panel concluded that relying on OCO funding to increase the defense budget \"is not the way to provide adequate and stable resources\" for the type of great power competition outlined in the Secretary of Defense's 2018 National Defense Strategy (NDS), which calls for the United States to bolster its competitive military advantage relative to threats posed by China and Russia:", "Because of budgetary constraints imposed by the BCA, lawmakers and the Department of Defense have increasingly relied upon the overseas contingency operations (OCO) fund to pay for warfighting operations in the greater Middle East, as well as other activities and initiatives. Yet this approach to resourcing has produced problems and distortions of its own. For one thing, the amount of money devoted to OCO since the BCA was enacted no longer corresponds to warfighting operations in the greater Middle East. Furthermore, such operations are no longer a top priority as articulated in the NDS. Finally, reorienting the military toward high-end competition and conflict will require new capabilities beyond the current program of record. OCO is not the way to provide adequate and stable resources for such a long-term endeavor, given its lack of predictability and the limitations on what OCO funds can be used to buy.\"", "Appendix A. Statutes, Guidance, and Regulations", "The designation of funding as emergency requirements or for Overseas Contingency Operations/Global War on Terrorism (OCO/GWOT) is governed by several statues as well as Office of Management and Budget (OMB) guidance and the Department of Defense (DOD) Financial Management Regulation (FMR).", "The Balanced Budget and Emergency Deficit Control Act (BBEDCA) of 1985 ", "BBEDCA, as amended, includes the statutory definitions of emergency and unanticipated as they relate to budget enforcement through sequestration. The act also allows for appropriations to be designated by Congress and the President as emergency requirements or for Overseas Contingency Operations/Global War on Terrorism . Such appropriations are effectively exempt from the statutory discretionary spending limits.", "Title 10, United States Code\u2014Armed Forces", "10 U.S.C. 101\u2014Definitions", "Section 101 provides definitions of terms applicable to Title 10. While it does not define overseas contingency operations, it does include a definition of a contingency operations .", "Administration and Internal Guidance ", "In addition to statutory requirements, the DOD and the Department of State are subject to guidance on OCO spending from the Administration. In October 2006 , under the Bush Administration, then-Deputy Secretary of Defense Gordon England directed the services to break with long-standing DOD regulatory policies and expand their request for supplemental funding to reflect incremental costs related to the \"longer war on terror.\" There was no specific definition for the \"longer war on terror,\" now one of the core missions of the DOD.", "In February 2009, at the beginning of the Obama Administration, the Office of Management and Budget (OMB) issued updated budget guidance that required DOD to move some OCO costs back into the base budget. However, within six months of issuing the new criteria, officials waived restrictions related to pay and that would have prohibited end-strength growth. In a letter from OMB to the then-Under Secretary of Defense (Comptroller) Robert Hale, the agency characterized its 2009 criteria as \"very successful\" for delineating base and OCO spending but stated, \"This update clarifies language, eliminates areas of confusion and provides guidance for areas previously unanticipated.\" GAO subsequently reported that the revised guidance significantly changed the criteria used to build the fiscal year 2010 OCO funding request by:", "specifying stricter definitions for repair and procurement of equipment; limiting applicability of OCO funds for RDT&E; excluding pay and allowances for end-strength above the level requested in the budget; excluding enduring family support initiatives; and excluding base realignment and closures (BRAC) amounts.", "OMB again revised its guidance in September 2010 following a number of GAO reports that had concluded DOD reporting on OCO costs was of \"questionable reliability,\" due in part to imprecisely defined financial management regulations related to OCO spending. ", "(as of September 9, 2010)", "Source: Letter from Steven M. Kosiak, Associate Director for Defense and Foreign Affairs, OMB, to Robert Hale, Under Secretary of Defense, Comptroller, \"Revised War Funding Criteria,\" September 9, 2010. ", "DOD Financial Management Regulations ", "DOD incorporated the September 2010 OMB criteria for war costs into the Financial Management Regulation. Table 1 includes the general cost categories DOD uses in accounting for costs of contingency operations. ", "Appendix B. Transfer Authorities, Special Purpose Accounts", "In addition to the supplemental appropriations and emergency or OCO/GWOT designation, the Department of Defense and the Department of State also have the authority to shift funds from one budget account to another in response to operational needs.", "For DOD, these transfers (sometimes called reprogramings ) are statutorily authorized by 10 U.S.C. 2214\u2014Transfer of funds: procedures and limitations. This authority allows the Secretary of Defense to reallocate funds for higher priority items, based on unforeseen military requirements, after receiving written approval from the four congressional defense committees. DOD may also reprogram funds within an account from one activity to another, as long as the general purpose for the use of those funds remains unchanged. Specific limits to transfer or reprogramming authorities have also been added to these general authorities through provisions in annual defense authorization and appropriation acts. The FY2019 defense appropriations bill sets the base budget transfer cap at $4 billion and the OCO transfer cap at $2 billion.", "The Department of State's OCO transfer authority has been provided in appropriations acts and has specifically authorized the Administration to transfer OCO funds only to other OCO funds within Title VIII SFOPS appropriations, not between OCO and base accounts. The transfer authority is capped, specified by account, and requires regular congressional notification procedures. ", "Overseas Contingency Operations Transfer Fund (OCOTF) ", "The OCOTF was established for DOD in FY1997 as a no year transfer account (meaning amounts are available until expended) in order to provide additional flexibility to meet operational requirements. Transfers from the OCOTF are processed using existing reprogramming procedures. A quarterly report is submitted to the congressional oversight committees, documenting all transfers from the OCOTF to DOD components base budget accounts. Beginning in FY2002, funds to support Southwest Asia, Kosovo, and Bosnia contingency requirements were appropriated directly to DOD components' Operation and Maintenance (O&M) and Military Personnel accounts rather than to the OCOTF for later disbursement. FY2014 was the last year the Administration requested a direct appropriation to the OCOTF.", "Contingency Operations Funded in the DOD Base Budget ", "As first mandated by section 8091 of the Department of Defense Appropriations Act, 2008 ( P.L. 110-116 ), Congress has required DOD to provide separate annual budget justification documents detailing the costs of U.S. armed forces' participation in all named contingency operations where the total cost of the operation exceeds $100 million or is staffed by more than 1,000 U.S. military personnel.", "Funding for certain DOD contingency operations has been moved to the base budget request, and is no longer designated as emergency or OCO/GWOT requirements. This movement of funding from the OCO request to the base budget request typically occurs as the operational activities of an enduring contingency operation evolve over time and DOD determines that certain elements of the associated military operations have become stable enough to be planned, financed, and executed within the base budget. For example, funding for Operation Noble Eagle, which provides fighter aircraft on 24/7 alert at several U.S. military bases, was moved from the GWOT request to the base budget request in 2005.", "Contingency operations and other activities funded wholly or in part through DOD's base budget have included: ", "NATO Operations in the Balkans . The U.S. Army and U.S. Air Force provide support to the North Atlantic Treaty Organization-led operations in the Balkans region. Most U.S. forces are deployed to Kosovo in support of the NATO-led Kosovo Force (KFOR). A small number of U.S. personnel are deployed to the NATO headquarters in Sarajevo in Bosnia and Herzegovina; Joint Task Force - Bravo . U.S. forces support this task force, which operates from Soto Cano Air Base in Honduras and supports joint, combined, and interagency exercises and operations in Central America to counter the influence of transnational organized crime; carry out humanitarian assistance and disaster relief; and build military capacity with regional partners and allied nations to promote regional cooperation and security; Operation Juniper Shield. Previously known as Operation Enduring Freedom-Trans Sahara (OEF-TS), this operation supports efforts to defeat violent extremist organizations in East Africa. This operation also provides military-to-military engagement with partner African countries, as well as readiness for crisis response and evacuation of U.S. military, diplomatic, and civilian personnel; Operation Noble Eagle . This operation funds the continuing efforts to defend the United States from airborne attacks, maintain the sovereignty of the United States airspace, and defend critical U.S. facilities from potentially hostile threats or unconventional attacks; Operation Enduring Freedom- Horn of Africa . This operation was established to support efforts to defeat violent extremist organizations in East Africa; provide military-to-military engagement with partner African countries, as well as readiness for crisis response and evacuation of U.S. military, diplomatic, and civilian personnel throughout East Africa; Operation Enduring Freedom- Caribbean and Central America . A U.S. regional military operation initiated in 2008, under the operational control of Special Operations Command-South, this operation was established to focus on counterterrorism to support DOD's overall military objectives and the larger fight against terrorism. Operation Observant Compass . This operation was established to support the deployment of approximately 100 U.S. military personnel assisting the Ugandan People's Defense Force and neighboring partner African countries in countering the Lord's Resistance Army operations. Operation Spartan Shield. This operation was established to support ongoing U.S. Central Command missions.", "Other Congressionally Authorized Funds or Programs ", "Through the OCO authorization and appropriation process, Congress has created numerous funds and programs that are designed to finance specific overseas contingency operations-related activities that do not fit into traditional budgetary accounts. Many of these funds and programs are supplied with amounts that are available until expended\u2014however, authorization for the specified fund or program has an expiration date, thereby requiring further congressional action for reauthorization of affected funds or programs. Congress has also provided increased transfer authority to provide greater flexibility for U.S. government activities in situations that are typically unpredictable. Examples of these types of congressionally authorized OCO programs or funds have included:", "Afghan istan Security Forces Fund (ASFF) and Counter-ISIS Train and Equip Fund (CTEF) . These funds were established to provide funding and support for the training, equipping, and expansion of selected military and security forces in support of U.S. objectives; Counterterrorism Partnership s Fund . This fund was established to provide funding and support to partner nations engaged in counterterrorism and crisis response activities; Command er's Emergency Response Program. This program was established to support infrastructure improvements, such as road repair and construction and enable military commanders on the ground to respond to urgent humanitarian relief and reconstruction needs by undertaking activities that will immediately aid local populations and assist U.S. forces in maintaining security gains; Joint Improvised Explosive Device (IEDs) Defeat Fund . This fund was established to coordinate and focus all counter-IED efforts, including ongoing research and development, throughout DOD. Due to the enduring nature of the threat, DOD began moving associated funding to the base budget in FY2010; Mine Resistant Ambush Protected Vehicle (MRAP) Fund . This fund was intended to expedite the procurement and deployment of MRAPs to Iraq and Afghanistan; European Deterrence Initiative (EDI) . Initially the European Reassurance Initiative (ERI), this effort was established to provide funding and support to NATO allies and partners to \"reassure allies of the U.S. commitment to their security and territorial integrity as members of the NATO Alliance, provide near-term flexibility and responsiveness to the evolving concerns of our allies and partners in Europe, especially Central and Eastern Europe, and help increase the capability and readiness of U.S. allies and partners;\" Global Security Contingency Fund . This fund was established to provide funding for the Department of State and the Department of Defense \"to facilitate an interagency approach to confronting security challenges;\" Complex Crise s Fund . This fund was established to provide funding through the State Department and USAID \"to help prevent crises and promote recovery in post-conflict situations during unforeseen political, social, or economic challenges that threaten regional security;\" Migration and Refugee Assistance Fund . This fund was established to provide funding to respond to refugee crises in Africa, the Near East, South and Central Asia, and Europe and Eurasia; and Ukraine Security Assistance Initiative . This initiative was established to provide assistance, including training, equipment, lethal weapons, of a defensive nature; logistics support; supplies and services; sustainment; and intelligence support to the military and national security forces of Ukraine."], "subsections": []}]}, {"section_title": "Acknowledgements", "paragraphs": ["This is an update to a report originally co-authored by [author name scrubbed], former CRS Specialist in Defense Readiness and Infrastructure. It references research previously compiled by [author name scrubbed], former CRS Specialist in U.S. Defense Policy and Budget; Christopher Mann, Analyst in Defense Policy and Trade; [author name scrubbed], Analyst in U.S. Defense Acquisition Policy; [author name scrubbed], CRS Specialist on Congress and the Legislative Process; and [author name scrubbed], CRS Analyst in Public Finance. [author name scrubbed], Research Assistant, helped compile the graphics."], "subsections": []}]}}
{"id": "R42695", "title": "SBA Veterans Assistance Programs: An Analysis of Contemporary Issues", "released_date": "2019-03-01T00:00:00", "summary": ["Several federal agencies, including the Small Business Administration (SBA), provide training and other assistance to veterans seeking civilian employment. For example, the Department of Defense (DOD), in cooperation with the SBA, Department of Labor, Department of Veterans Affairs, and several other federal agencies, operates the Transition Goals Plans Success program (Transition GPS), which provides employment information and entrepreneurship training to exiting military servicemembers to assist them in transitioning from the military to the civilian labor force.", "In recent years, the unemployment rate among veterans as a whole has generally been similar to or lower than the unemployment rate for nonveterans 18 years and older. However, veterans who have left the military since September 2001 have experienced higher unemployment than other veterans and, in some years, higher unemployment than nonveterans. As a result, Congress has focused much of its attention on finding ways to assist veterans who have left the military since September 2001.", "The SBA provides management and technical assistance services to more than 100,000 veterans each year through its various management and technical assistance training partners (e.g., Small Business Development Centers, Women's Business Centers [WBCs], Service Corps of Retired Executives [SCORE], and Veterans Business Outreach Centers [VBOCs]). The SBA's Office of Veterans Business Development (OVBD) also administers several programs to assist veterans, including the Operation Boots to Business: From Service to Startup initiative, which is part of DOD's Transition GPS program.", "The expansion of federal employment training programs targeted at specific populations, such as women and veterans, has led some Members and organizations to ask if these programs should be consolidated. In their view, eliminating program duplication among federal business assistance programs across federal agencies, and within the SBA, would result in lower costs and improved services. Others argue that keeping these business assistance programs separate enables them to offer services that match the unique needs of various underserved populations, such as veterans. In their view, instead of considering program consolidation as a policy option, the focus should be on improving communication and cooperation among the federal agencies providing assistance to entrepreneurs.", "This report opens with an examination of the economic circumstances of veteran-owned businesses drawn from the Bureau of the Census's 2012 Survey of Business Owners (SBO). It then provides a brief overview of veterans' employment experiences, comparing unemployment and labor force participation rates for veterans, veterans who have left the military since September 2001, and nonveterans. The report also describes employment assistance programs offered by several federal agencies to assist veterans in their transition from the military to the civilian labor force and examines, in greater detail, the SBA's veteran business development programs, the SBA's efforts to assist veterans' access to capital, and the SBA's veteran contracting programs. It also discusses the SBA's Military Reservist Economic Injury Disaster Loan program and P.L. 114-38, the Veterans Entrepreneurship Act of 2015, which authorized and made permanent the SBA's recent practice of waiving the SBAExpress loan program's one time, up-front loan guarantee fee for veterans (and their spouse)."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "SBA Assistance for Veterans", "paragraphs": ["The Small Business Administration (SBA) administers several programs to support small business owners and prospective entrepreneurs. For example, it provides education programs to assist with business formation and expansion; loan guaranty programs to enhance small business owners' access to capital; and programs to increase small business opportunities in federal contracting, including oversight of the service-disabled veteran-owned small business federal procurement goaling program. The SBA also provides direct loans for owners of businesses of all sizes, homeowners, and renters to assist their recovery from natural disasters.", "The Military Reservist Economic Injury Disaster Loan (MREIDL) program is also of interest to veterans. It provides direct loans of up to $2 million to small business owners who are not able to obtain credit elsewhere meet ordinary and necessary operating expenses that they could have met but are not able to because an essential employee has been called up to active duty in his or her role as a military reservist or member of the National Guard due to a period of military conflict.", "The SBA provides management and technical assistance to more than 100,000 veterans each year through its various training partners (e.g., Small Business Development Centers, Women's Business Centers, SCORE [formerly the Service Corps of Retired Executives], and Veterans Business Outreach Centers [VBOCs]). In addition, the SBA's Office of Veterans Business Development (OVBD) administers several programs to assist veteran-owned small businesses. ", "The SBA's OVBD received an appropriation of $12.7 million for FY2018.", "The SBA has always assisted veteran small business owners and aspiring veteran entrepreneurs. In recent years, they have focused increased attention on assisting veterans transition from the military to the civilian labor force. For example, the SBA's OVBD, in partnership with Syracuse University, launched the Operation Boots to Business: From Service to Startup initiative for transitioning servicemembers in July 2012. The program consists of a two-day introductory course on entrepreneurship followed by an eight-week, online course to prepare servicemenmbers and military spouses \"for post-service career success as business owners.\"", "Congress provided the SBA's OVBD an additional $7 million in FY2014 to expand the Boots to Business initiative \"nationwide to the 250,000 yearly transitioning servicemembers in all branches of the military.\" The initiative's two-day Introduction to Entrepreneurship course is currently offered at 213 military institutions worldwide and is \"a standard portion of the curricula offered at the revised Transition Assistance Program (TAP) to servicemembers.\" TAP is administered by the Department of Defense (DOD) in cooperation with the Department of Labor (DOL), Department of Veterans Affairs (VA), Department of Education (DOE), Department of Homeland Security (DHS), Office of Personnel Management (OPM), and the SBA. ", "Congress has approved additional appropriations to continue the initiative, and it was expanded in 2014 to include veterans of all eras, active duty servicemembers (including National Guard and Reserves), and their partner or spouse via the Boots to Business: Reboot initiative. In FY2017, 17,320 servicemembers participated in the Boots to Business program. ", "During the 114 th Congress, legislation was introduced and reported favorably by the Senate Committee on Small Business and Entrepreneurship to provide the Boots to Business initiative statutory authorization ( S. 1866 , the Veterans Small Business Ownership Improvements Act of 2015). Similar legislation was introduced during the 115 th Congress ( S. 121 , the Veterans Small Business Ownership Improvements Act, and H.R. 5193 , the Veteran Entrepreneurship Training Act of 2018). To date, nearly 70,000 servicemembers have participated in the initiative.", "The expansion of federal employment training programs targeted at specific populations, such as women and veterans, has led some Members and organizations to ask if these programs should be consolidated. In their view, eliminating program duplication among federal business assistance programs across federal agencies, and within the SBA, would lower costs and improve services. Others argue that keeping these business assistance programs separate enables them to offer services that match the unique needs of underserved populations, such as veterans. Instead of consolidating these programs, their focus is on improving communication and cooperation among the federal agencies providing assistance to entrepreneurs.", "This report examines the economic circumstances of veteran-owned businesses drawn from the Bureau of the Census's 2012 Survey of Business Owners (SBO). It also provides a brief overview of veterans' employment experiences, comparing unemployment and labor force participation rates for veterans, veterans who have left the military since September 2001, and nonveterans. The report also describes employment assistance programs offered by several federal agencies to assist veterans transitioning from the military to the civilian labor force and examines, in greater detail, the SBA's veteran business development programs, the SBA's efforts to enhance veterans' access to capital, and the SBA's veteran contracting programs. ", "It also discusses the SBA's Military Reservist Economic Injury Disaster Loan program and P.L. 114-38 , the Veterans Entrepreneurship Act of 2015, which authorized and made permanent the SBA's recent practice of waiving the SBAExpress loan program's one time, up-front loan guarantee fee for veterans (and their spouse)."], "subsections": []}, {"section_title": "An Economic Profile of Veteran-Owned Businesses", "paragraphs": ["From 1972 to 2012, the U.S. Bureau of the Census's SBO was sent every five years, for years ending in \"2\" and \"7,\" to a stratified random sample of nonfarm businesses in the United States that file Internal Revenue Service tax forms as individual proprietorships, partnerships, or any type of corporation, and with receipts of $1,000 or more. It asked for information about the cha racteristics of the businesses and their owners. About 66% of the 1.75 million businesses that received the 2012 SBO responded. The SBO provided \"the only comprehensive, regularly collected source of information on selected economic and demographic characteristics for businesses and business owners by gender, ethnicity, race, and veteran status.\"", "The SBO provided estimates of the number of employer and nonemployer firms and their sales and receipts, annual payroll, and employment. Data aggregates were provided by gender, ethnicity, race, and veteran status for the United States by North American Industry Classification System (NAICS) classification; the kind of business; and state, metropolitan and micropolitan statistical area, and county. This information was combined with data collected through the Census Bureau's main economic census and administrative records to provide a variety of searchable data products on Census's website, https://www.census.gov/programs-surveys/sbo.html , including the most detailed economic information available on veterans and veteran-owned firms.", "The Census Bureau has discontinued the SBO and is currently collecting data on business receipts, payroll, and employment by demographic characteristics, such as gender, ethnicity, race, and veteran status through its new, annual American Business Survey (ABS). The first set of data from the ABS is scheduled to be released in December 2019. Although now somewhat dated, the 2012 SBO provides the most detailed economic information available on veterans and veteran-owned firms. "], "subsections": [{"section_title": "Demographics", "paragraphs": ["The Bureau of the Census estimates that in 2012 about 9.2% of nonfarm firms in the United States (2.54 million of 27.62 million) were owned by veterans. Four states had more than 100,000 veteran-owned firms: California (254,873), Texas (215,217), Florida (187,074), and New York (138,670). Of the 2.54 million veteran-owned, nonfarm firms in 2012,", "82.3% (2.09 million) had no paid employees and 17.7% (450,807) had paid employees. This ratio is similar to comparable national figures of 80.4% (22.20 million) with no paid employees and 19.6% (5.42 million) with paid employees. 84.3% (2.14 million) were owned by a male, 15.1% were owned by a female (384,549), and 0.6% (14,035) were owned equally by a male and a female. Veteran-owned firms were more likely than other firms in 2012 to be owned by a male. The comparable national figures are 54.3% (14.99 million) were owned by a male, 36.0% (9.93 million) were owned by a female, and 9.0% (2.50 million) were owned equally by a male and a female. 85.1% (2.16 million) were owned by a Caucasian, 10.7% (270,702) were owned by an African American, 2.1% (52,933) were owned by an Asian, 1.3% (34,174) were owned by an American Indian or Alaska Indian, 0.3% (7,011) were owned by a native Hawaiian or other Pacific Islander, and 2.2% (56,091) were owned by \"some other race.\" Veteran-owned firms were somewhat more likely than other firms in 2012 to be owned by a Caucasian and somewhat less likely to be owned by an Asian. The comparable national figures for 2012 are 78.7% (21.74 million) were owned by a Caucasian, 9.4% (2.59 million) were owned by an African American, 7.0% (1.94 million) were owned by an Asian, 1.0% (274,238) were owned by an American Indian or Alaska Indian, 0.2% (55,077) were owned by a native Hawaiian or other Pacific Islander, and 4.3% (1.18 million) were owned by \"some other race.\" 3.3% (76,250 of the 2,299,501 reporting) were owned by an individual under the age of 35, 22.6% (520,472) were owned by an individual aged 35 to 54, and 74.5% (1,712,779) were owned by an individual aged 55 or older. Veteran-owned firms were more likely than other firms in 2012 to be owned by an individual aged 55 or older. The comparable national figures (minus veterans) for 2012 are 14.7% (2,943,446 of the 19,990,309 reporting) of nonfarm firms were owned by an individual under the age of 35; 48.1% (9,613,854) were owned by an individual aged 35 to 54; and 37.2% (7,433,009) were owned by an individual aged 55 or older. 7.3% (167,052 of the 2,292,035 reporting) were owned by an individual who reported that he or she had a service-connected disability.", "In addition, 99.8% of veteran-owned employer firms (441,799) had fewer than 500 employees and 0.2% (686) had at least 500 employees. This ratio is similar to comparable national figures for 2012, according to which 99.7% (5.41 million) had fewer than 500 employees and 0.3% (17,724) had at least 500 employees."], "subsections": []}, {"section_title": "Employment, Payroll, and Sales/Receipts", "paragraphs": ["In 2012, veteran-owned firms employed more than 5.5 million persons, reported a total payroll of $220.8 billion, and generated more than $1.47 trillion in total sales/receipts.", "Veteran-owned employer firms", "employed 5.5 million persons (about 4.8% of total U.S. employment); reported a total payroll of $220.8 billion (about 4.2% of total U.S. payroll); generated $1.375 trillion in total sales/receipts (about 4.2% of total U.S. receipts); and had average sales/receipts of $3.1 million.", "Veteran-owned nonemployer firms", "generated 6.4% ($94.5 billion) of the total sales/receipts generated by veteran-owned firms; and had average sales/receipts of $45,198.", "The comparable national figures for sales/receipts in 2012 were $6.0 million for employer firms and $47,679 for nonemployer firms."], "subsections": []}, {"section_title": "Access to Capital", "paragraphs": ["As shown in Table 1 , in 2012, veterans most frequently used personal or family savings to start or acquire a business (886,471 veterans, or 59.4% of respondents), followed by a personal or business credit card (148,856 veterans, or 10.0% of respondents), a business loan from a bank or financial institution (116,045 veterans, or 7.8% of respondents), and personal or family assets other than the owner's savings (92,748 veterans, or 6.2% of respondents).", "As shown in Table 2 , the source of capital most frequently used by veterans to expand or make capital improvements to an existing business in 2012 was personal or family savings (313,296 veterans, or 20.8% of respondents). The next most frequently used source of capital to expand or make capital improvements to an existing business was a personal or business credit card (114,815 veterans, or 7.6% of respondents), followed by business profits or assets (82,182 veterans, or 5.5% of respondents), and a government-guaranteed business loan from a bank or financial institution (64,499 veterans, or 4.3% of respondents)."], "subsections": []}]}, {"section_title": "Veterans' Employment Data", "paragraphs": ["The Department of Labor's Bureau of Labor Statistics (BLS) provides monthly updates of the employment status of the nation's veterans. The BLS reports that as of January 2019, there were about 19.0 million veterans. There were 9.4 million veterans in the civilian labor force (i.e., they were either employed or unemployed and available for work, except for temporary illness, and had made specific efforts to find employment sometime during the four-week period ending with the reference week). Of those veterans in the civilian labor force, about 9.0 million were employed and about 344,000 were unemployed.", "In recent years, the unemployment rate among veterans as a whole has generally been lower than the unemployment rate for nonveterans 18 years and older. However, veterans who have left the military since September 2001 have experienced higher unemployment than other veterans and, in some years, higher than nonveterans as well. In January 2019, the unemployment rate for nonveterans 18 years and older was 4.3%, which was higher than for veterans as a whole (3.7%), for veterans who left the military prior to September 2001 (3.3%), and for veterans who left the military since September 2001 (4.2%). ", "Veterans who have left the military since September 2001 also have a higher labor force participation rate (78.0%) than other veterans (40.0%) and nonveterans aged 18 and older (62.7%). The higher labor force participation rate for veterans who left the military since September 2001 was not wholly unexpected. They entered the civilian workforce more recently and have had less time to develop a reason (e.g., health issue, family responsibility, discouragement, retirement) to withdraw from the civilian workforce than other veterans and nonveterans aged 18 and older.", "The lower labor force participation rate for other veterans was also not wholly unexpected. They entered the civilian workforce earlier and have had more time to develop a reason to withdraw from the civilian workforce than veterans who left the military since September 2001 and nonveterans aged 18 and older."], "subsections": []}, {"section_title": "Veterans' Employment and Business Development Programs", "paragraphs": ["Several federal agencies, including the SBA, sponsor employment and business development programs to assist veterans in their transition from the military into the civilian labor force. As discussed, the expansion of federal employment and business development training programs targeted at specific populations, such as women and veterans, has led some Members and organizations to ask if these programs should be consolidated. Others question if the level of communication and coordination among federal agencies administering these programs has been sufficient to ensure the programs are being administered in the most efficient and effective manner."], "subsections": [{"section_title": "The SBA's Veterans Business Development Programs", "paragraphs": ["In an effort to assist veteran entrepreneurs, the SBA has either provided or supported management and technical assistance training for veteran-owned small businesses since its formation as an agency. The SBA provides management and technical assistance to more than 100,000 veterans each year through its various training partners (e.g., Small Business Development Centers, Women's Business Centers, SCORE [formerly the Service Corps of Retired Executives], and Veterans Business Outreach Centers [VBOCs]). ", "In addition, the SBA's OVBD administers several programs to assist veteran-owned businesses, including", "the Entrepreneurship Bootcamp for Veterans with Disabilities Consortium of Universities, which provides \"experiential training in entrepreneurship and small business management to post-9/11 veterans with disabilities\" at eight universities; the Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE) program, administered through a cooperative agreement with Syracuse University, which offers women veterans a 15-day, online course focused on entrepreneurship skills and the \"language of business,\" followed by a 3-day conference (offered twice a year at varying locations) in which participants \"are exposed to successful entrepreneurs and CEOs of Fortune 500 companies and leaders in government\" and participate in courses on business planning, marketing, accounting and finance, operations and production, human resources, and work-life balance; the Operation Endure and Grow Program, administered through a cooperative agreement with Syracuse University, which offers an eight-week online training program \"focused on the fundamentals of launching and/or growing a small business\" and is available to National Guard members and reservists and their family members; the Boots to Business initiative, which is \"an elective track within the Department of Defense's revised Training Assistance Program called Transition Goals, Plans, Success (Transition GPS) and has three parts: the Entrepreneurship Track Overview \u2014a 10-minute introductory video shown during the mandatory five-day Transition GPS course which introduces entrepreneurship as a post-service career option; Introduction to Entrepreneurship \u2014a two-day classroom course on entrepreneurship and business fundamentals offered as one of the three Transition GPS elective tracks; and Foundations of Entrepreneurship \u2014an eight-week, instructor-led online course that offers in-depth instruction on the elements of a business plan and tips and techniques for starting a business\"; the Boots to Business: Reboot initiative, which expanded the Boots to Business initiative in 2014 to include veterans of all eras, active duty servicemembers (including National Guard and Reserves), and their partner/spouse; the Veterans Institute for Procurement (VIP) program, which is designed to increase the ability of veteran-owned businesses to win government contracts by providing \"an accelerator-like, in-residence educational training program for owners, principals, and executives of veteran-owned businesses, consisting of a three-day comprehensive certification program instructed by professional service experts, government officials, and agency representatives\"; and the VBOC program, which provides veterans and their spouse management and technical assistance training at 22 locations, including assistance with the Boots to Business initiatives, the development and maintenance of a five-year business plan, and referrals to other SBA resource partners when appropriate for additional training or mentoring services.", "The SBA also continues to work closely with the Interagency Task Force for Veterans Small Business Development, which was established by executive order on April 26, 2010, held its first public meeting on October 15, 2010, and issued its first report on November 1, 2011, to identify \"gaps in ensuring that transitioning military members who are interested in owning a small business get needed assistance and training.\" The task force's second report, issued on November 29, 2012, focused on progress made since the initial report. The task force continues to meet on a quarterly basis to foster communication and monitor agency progress in assisting transitioning servicemembers."], "subsections": []}, {"section_title": "Congressional Issues: Duplication of Services", "paragraphs": ["The SBA's OVBD, which serves as the SBA's focal point for its veteran assistance programs, was created by P.L. 106-50 , the Veterans Entrepreneurship and Small Business Development Act of 1999. The act addressed congressional concerns that the United States generally, and the SBA in particular, was not, at that time, doing enough to meet the needs of veteran entrepreneurs, especially service-disabled veteran entrepreneurs. At that time, several Members of Congress argued that \"the needs of veterans have been diminished systematically at the SBA\" as evidenced by the agency's elimination of direct loans, including direct loans to veterans, in 1995; and a decline in the SBA's \"training and counseling for veterans \u2026 from 38,775 total counseling sessions for veterans in 1993 to 29,821 sessions in 1998.\" To address these concerns, the act authorized the establishment of the federally chartered National Veterans Business Development Corporation (known as the Veterans Corporation and reconstituted, without a federal charter, in 2012 as Veteranscorp.org). Its mission is to", "(1) expand the provision of and improve access to technical assistance regarding entrepreneurship for the Nation's veterans; and (2) to assist veterans, including service-disabled veterans, with the formation and expansion of small business concerns by working with and organizing public and private resources, including those of the Small Business Administration, the Department of Veterans Affairs, the Department of Labor, the Department of Commerce, the Department of Defense, the Service Corps of Retired Executives\u2026, the Small Business Development Centers\u2026, and the business development staffs of each department and agency of the United States.", "P.L. 106-50 reemphasized the SBA's responsibility \"to reach out to and include veterans in its programs providing financial and technical assistance.\" It included veterans as a target group for the SBA's 7(a), 504 Certified Development Company (504/CDC), and Microloan lending programs. It also required the SBA to enter into a memorandum of understanding with SCORE to, among other things, establish \"a program to coordinate counseling and training regarding entrepreneurship to veterans through the chapters of SCORE throughout the United States.\" In addition, it directed the SBA to enter into a memorandum of understanding with small business development centers, the VA, and the National Veterans Business Development Corporation \"with respect to entrepreneurial assistance to veterans, including service-disabled veterans.\" The act specified that the following services were to be provided:", "(1) Conducting of studies and research, and the distribution of information generated by such studies and research, on the formation, management, financing, marketing, and operation of small business concerns by veterans.", "(2) Provision of training and counseling to veterans concerning the formation, management, financing, marketing, and operation of small business concerns.", "(3) Provision of management and technical assistance to the owners and operators of small business concerns regarding international markets, the promotion of exports, and the transfer of technology.", "(4) Provision of assistance and information to veterans regarding procurement opportunities with Federal, State, and local agencies, especially such agencies funded in whole or in part with Federal funds.", "(5) Establishment of an information clearinghouse to collect and distribute information, including by electronic means, on the assistance programs of Federal, State, and local governments, and of the private sector, including information on office locations, key personnel, telephone numbers, mail and electronic addresses, and contracting and subcontracting opportunities.", "(6) Provision of Internet or other distance learning academic instruction for veterans in business subjects, including accounting, marketing, and business fundamentals.", "(7) Compilation of a list of small business concerns owned and controlled by service-disabled veterans that provide products or services that could be procured by the United States and delivery of such list to each department and agency of the United States. Such list shall be delivered in hard copy and electronic form and shall include the name and address of each such small business concern and the products or services that it provides.", "The SBA's OVBD was established to address these statutory requirements by promoting \"veterans' small business ownership by conducting comprehensive outreach, through program and policy development and implementation, ombudsman support, coordinated agency initiatives, and direct assistance to veterans, service-disabled veterans, reserve and National Guard members, and discharging active duty service members and their families.\"", "As mentioned previously, the OVBD provides, or supports third parties to provide, management and technical assistance training services to more than 100,000 veterans each year. These services are provided ", "through funded SBA district office outreach; OVBD-developed and distributed materials; websites; partnering with DOD [Department of Defense], DOL [Department of Labor] and universities; agreements with regional veterans business outreach centers; direct guidance, training and assistance to Agency veteran customers; and through enhancements to intra-agency programs used by the military and veteran communities.", "The expansion of the SBA's veteran outreach efforts has led some Members and organizations to ask if the nation's veterans might be better served if some of the veteran employment and business development programs offered by federal agencies were consolidated. For example, as mentioned previously, DOD, in cooperation with several federal agencies, operates the recently revised Transition Assistance Program, Transition GPS, which provides employment information and training to exiting servicemembers to assist them in transitioning from the military into the civilian labor force. In addition, DOL's Jobs for Veterans State Grants program provides states funding for Disabled Veterans' Outreach Program specialists and Local Veterans' Employment Representatives to provide outreach and assistance to veterans, and their spouses, seeking employment. DOL also administers the Veterans Workforce Investment Program, which provides grants to fund programs operated by eligible state and local government workforce investment boards, state and local government agencies, and private nonprofit organizations to provide various services designed to assist veterans' transitions into the civilian labor force. The DOL-administered Homeless Veterans Reintegration Program provides grants to fund programs operated by eligible state and local government workforce investment boards, state and local government agencies, and private nonprofit organizations that provide various services designed to assist homeless veterans achieve meaningful employment and to aid in the development of a service delivery system to address problems facing homeless veterans.", "Advocates of consolidating veteran employment and business development programs argue that eliminating program duplication among federal agencies would result in lower costs and improved services. For example, H.R. 4072 , the Consolidating Veteran Employment Services for Improved Performance Act of 2012, which was introduced during the 112 th Congress and ordered to be reported by the House Committee on Veterans' Affairs on April 27, 2012, would have transferred several veteran employment training programs from the DOL to the VA.", "In addition, in 2011, 2012, 2013, 2014, and 2015, the House Committee on Small Business, in its \"Views and Estimates\" letter to the House Committee on the Budget, recommended that funding for the SBA's VBOCs be either eliminated or transferred to the Department of Veterans Affairs because, as it stated in 2012, \"the SBA already provides significant assistance to veterans who are seeking to start or already operate small businesses. The VBOCs duplicate services already available from the SBA, other entrepreneurial development partners and programs available from the Department of Veterans Affairs.\" In 2014, the House Committee on Small Business also recommended that if additional funds were to be provided to VBOCs, those funds should come from the SBA's Boots to Business initiative.", "Advocates of consolidating federal veteran employment and business development programs cite U.S. Government Accountability Office (GAO) reports that have characterized the broader category of federal support for entrepreneurs, including veteran entrepreneurs, as fragmented and having overlapping missions. For example, in 2012, GAO identified 53 programs within the SBA and the Departments of Commerce, Housing and Urban Development, and Agriculture designed to support entrepreneurs, including 36 programs that provide entrepreneurs technical assistance, such as business training, counseling, and research and development support. GAO found that \"the overlap among these programs raise[s] questions about whether a fragmented system is the most effective way to support entrepreneurs\" and suggested agencies should \"determine whether there are more efficient ways to continue to serve the unique needs of entrepreneurs, including consolidating programs.\"", "Instead of consolidating programs, some argue that improved communication and cooperation among the federal agencies providing entrepreneur support programs, and among the SBA's management and technical assistance training resource partners, would enhance program efficiencies while preserving the ability of these programs to offer services that match the unique needs of various underserved populations, such as veterans. For example, during the 111 th Congress, the House passed H.R. 2352 , the Job Creation Through Entrepreneurship Act of 2009, on May 20, 2009, by a vote of 406-15. The Senate did not take action on the bill. In its committee report accompanying the bill, the House Committee on Small Business concluded at that time that", "each ED [Entrepreneurial Development] program has a unique mandate and service delivery approach that is customized to its particular clients. However, as a network, the programs have established local connections and resources that benefit entrepreneurs within a region. Enhanced coordination among this network is critical to make the most of scarce resources available for small firms. It can also ensure that best practices are shared amongst providers that have similar goals but work within different contexts.", "The bill was designed to enhance oversight and coordination of the SBA's management and technical assistance training programs by requiring the SBA to coordinate these programs \"with State and local economic development agencies and other federal agencies as appropriate\" and to \"report annually to Congress, in consultation with other federal departments and agencies as appropriate, on opportunities to foster coordination, limit duplication, and improve program delivery for federal entrepreneurial development activities.\"", "In a related development, as mentioned previously, the Obama Administration formed the Interagency Task Force for Veterans Small Business Development by executive order on April 26, 2010. The SBA's representative chairs the task force, which is composed of senior representatives from seven federal agencies and four representatives from veterans' organizations. One of the task force's goals is to improve \"collaboration, integration and focus across federal agencies, key programs (e.g., the Transition Assistance Program), veterans' service organizations, states, and academia.\"", "On November 1, 2011, the task force issued 18 recommendations, including recommendations designed to increase and augment federal entrepreneurial training and technical assistance programs offered to veterans. For example, it recommended the development of a \"standardized, national entrepreneurship training program specifically for veterans\" that \"could utilize expert local instructors, including academics and successful small business owners, to provide training in skills used to create and grow entrepreneurial ventures and small business. The national program could provide engaging training modules and workshops dedicated to the basics of launching a business.\" The task force also recommended the development of a web portal \"that allows veterans to access entrepreneurship resources from across the government.\" Since then, the task force has met quarterly and its annual reports document its efforts to address the 18 recommendations."], "subsections": []}]}, {"section_title": "Veterans' Access to Capital", "paragraphs": ["The SBA administers several loan guaranty programs, including the 7(a) and the 504/CDC programs, to encourage lenders to provide loans to small businesses \"that might not otherwise obtain financing on reasonable terms and conditions.\""], "subsections": [{"section_title": "SBA's 7(a) Loan Guaranty Program", "paragraphs": ["The SBA's 7(a) loan guaranty program is considered the agency's flagship loan guaranty program. Its name is derived from Section 7(a) of the Small Business Act of 1953 (P.L. 83-163, as amended), which authorizes the SBA to provide business loans to American small businesses.", "The 7(a) program provides SBA-approved lenders a guaranty of up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000, up to the program's maximum gross loan amount of $5 million (up to $3.75 million maximum guaranty). In FY2018, the average approved 7(a) loan amount was $420,401.", "Proceeds from 7(a) loans may be used to establish a new business or to assist in the operation, acquisition, or expansion of an existing business. Specific uses include to acquire land (by purchase or lease); improve a site (e.g., grading, streets, parking lots, and landscaping); purchase, convert, expand, or renovate one or more existing buildings; construct one or more new buildings; acquire (by purchase or lease) and install fixed assets; purchase inventory, supplies, and raw materials; finance working capital; and refinance certain outstanding debts. The 7(a) program's loan maturity for working capital, machinery, and equipment (not to exceed the life of the equipment) is typically 5 years to 10 years, and the loan maturity for real estate is up to 25 years. Interest rates are negotiated between the borrower and lender but are subject to maximum rates.", "As shown in Table 3 , the number and amount of veteran 7(a) loan approvals have generally increased since FY2012. In FY2018, the SBA approved 60,353 7(a) loans totaling nearly $25.4 billion, including 3,084 loans to veterans (5.3%) totaling $969 million (3.8%). In FY2018, the average approved veteran 7(a) loan amount was $314,360."], "subsections": []}, {"section_title": "SBA's 504/CDC Loan Guaranty Program", "paragraphs": ["The SBA's 504/CDC loan guaranty program is administered through nonprofit certified development companies (CDCs). It provides long-term fixed rate financing for major fixed assets, such as land, buildings, equipment, and machinery. Of the total project costs, a third-party lender must provide at least 50% of the financing, the CDC provides up to 40% of the financing through a 100% SBA-guaranteed debenture, and the applicant provides at least 10% of the financing. The 504/CDC program's name is derived from Section 504 of the Small Business Investment Act of 1958 (P.L. 85-699, as amended), which provides the most recent authorization for the sale of 504/CDC debentures. In FY2018, the average approved 504/CDC loan amount was $806,324.", "As shown in Table 4 , in recent years, the amount of veteran 504/CDC loan approvals peaked in FY2012, declined in FY2013 and FY2014, increased in FY2015, FY2016, and FY2017, and declined somewhat in FY2018. ", "In FY2018, the SBA approved 5,874 504/CDC loans totaling $4.75 billion, including 158 loans to veterans (2.7%) totaling $95 million (2.0%). In FY2018, the average approved veteran 504/CDC loan amount was $601,202."], "subsections": []}, {"section_title": "SBA's 7(a) Loan Guaranty Subprograms and Fee Waivers", "paragraphs": ["The SBA administers several 7(a) loan guaranty subprograms that offer streamlined and expedited loan procedures to encourage lenders to provide loans to specific groups of borrowers identified by the SBA as having difficulty accessing capital. In the past, the Patriot Express program (2007-2013) encouraged lenders to provide loans to veterans and their spouses. It provided loans of up to $500,000 (with a guaranty of up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000).", "The SBA considered the Patriot Express program a success, but some veterans' organizations expressed concern that many veterans, especially during and immediately following the Great Recession (December 2007 to June 2009), experienced difficulty finding lenders willing to provide them Patriot Express loans. In addition, GAO reported in September 2013 that with the exception of loans approved in 2007, Patriot Express loans defaulted at a higher rate than regular 7(a) loans and loans made under the SBAExpress program (a 7(a) loan guaranty subprogram offering streamlined borrower application and lender approval procedures). Over its history, the Patriot Express program disbursed 9,414 loans totaling more than $791 million.", "On January 1, 2014, the SBA implemented a new, streamlined application process for 7(a) loans of $350,000 or less. As part of an overall effort to streamline and simplify its loan application process, the SBA also eliminated several 7(a) subprograms, including the Patriot Express program. In anticipation of ending the Patriot Express program, the SBA announced on November 8, 2013, that it would waive the up-front, one-time loan guaranty fee for loans to a veteran or veteran's spouse under the SBAExpress program from January 1, 2014, through the end of FY2014 (called the Veterans Advantage Program). ", "The SBA announced that this fee waiver was part \"of SBA's broader efforts to make sure that veterans have the tools they need to start and grow a business.\" The Obama Administration continued this fee waiver for veterans through the end of FY2015. ", "During the 113 th Congress, S. 2143 , the Veterans Entrepreneurship Act, would have authorized and made the Veterans Advantage Program's fee waiver permanent. P.L. 113-235 , the Consolidated and Further Continuing Appropriations Act, 2015, provided statutory authorization for the fee waiver for FY2015.", "During the 114 th Congress, P.L. 114-38 , the Veterans Entrepreneurship Act of 2015, authorized and made the SBA's practice of waiving the SBAExpress loan program's one time, up-front guaranty fee for veterans (and their spouse) permanent beginning on or after October 1, 2015, except during any upcoming fiscal year for which the President's budget, submitted to Congress, includes a cost for the 7(a) program, in its entirety, that is above zero. The SBA has waived this fee every year since then.", "The SBAExpress program is designed to increase the availability of credit to small businesses by permitting lenders to use their existing documentation and procedures in return for receiving a reduced SBA guaranty on loans. It provides a 50% loan guaranty on loan amounts up to $350,000. In FY2018, the SBA approved 27,794 SBAExpress loans (46.1% of total 7(a) program loan approvals) totaling $1.98 billion (7.8% of total 7(a) program amount approvals).", "The SBA also waived the up-front, one-time loan guaranty fee for smaller 7(a) loans (including those to veterans) in FY2014, FY2015, FY2016, FY2017, and FY2018; and is waiving the annual service fee for 7(a) loans of $150,000 or less made to small businesses located in a rural area or a HUBZone and reduce the up-front one-time guaranty fee for these loans from 2.0% to 0.6667% of the guaranteed portion of the loan in FY2019.", "In FY2015 and FY2016, the SBA also waived 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans exceeding $150,000. In FY2017, the SBA waived 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $150,001 to $500,000. In FY2018, the SBA waived 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $150,001 to $350,000. "], "subsections": []}, {"section_title": "Congressional Issues: Access", "paragraphs": ["As mentioned previously, the SBA has indicated in both testimony at congressional hearings and in press releases that it viewed the Patriot Express program and its own overall effort to enhance veterans' access to capital as a success. For example, when the SBA announced its veterans' fee waiver for the SBAExpress program, it also announced that its lending to veteran-owned small businesses had nearly doubled since 2009 and that \"in FY2013, SBA supported $1.86 billion in loans for 3,094 veteran-owned small businesses.\"", "Congressional testimony provided by various veteran service organizations provides a somewhat different perspective. The SBA's self-evaluation of its success in assisting veterans access capital has focused primarily on the agency's efforts to streamline the loan application approval process (e.g., minimizing paperwork requirements and reducing the time necessary for the SBA to review and approve applications submitted by local lenders) and aggregate lending amounts (e.g., the number and amount of loans approved). In contrast, veteran service organizations focus primarily on program outcomes, especially the likelihood of a veteran being approved for a SBA loan by a local lender. For example, a representative of the American Legion testified at a congressional hearing in 2010 that, at that time, being turned down for a SBA Patriot Express loan by a private lender \"is probably the largest, most frequent complaint that we receive from our business owners.\" At that same congressional hearing, a representative of the Vietnam Veterans of America testified in response to that statement that \"I would have to concur \u2026 in talking with some of the veterans with regard to the Patriot Express Loan, they are having difficulties also to acquire that capital. The rationale seems to be \u2026 the banks in general seem to be tightening the credit, their lending practices, so that is \u2026 what we are hearing.\" More recently, GAO reported in 2013 that \"selected loan recipients, lenders, and veteran service organizations said that a low awareness of the Patriot Express program among the military community was among the most frequently cited challenges.\"", "No empirical assessments of veterans' experiences with either the SBA's Patriot Express or SBAExpress loan programs exist that would be useful for determining the relative ease or difficulty for veteran-owned small business owners of accessing capital through the SBA's loan programs. Since 2010, many lenders report that they have eased their credit standards, at least somewhat, for small business loans, suggesting the experiences of veterans seeking a SBA loan guaranty today may be improved compared with their experiences in 2010. However, GAO found in 2013 that many veterans were not fully aware of the SBA's Patriot Express program and that \"over half of the Patriot Express loan recipients, six of the eight lenders, and two veteran service organizations \u2026 said that [the] SBA could do more to increase outreach to veteran entrepreneurs and better market the program to the military community.\" GAO reported that low awareness of the SBA's Patriot Express program and the SBA's participating lenders were a continuing challenge for the SBA.", "One option to provide additional information concerning veterans' experiences with the SBA's lenders would be to survey veterans who have received a SBA guaranteed loan. The survey could include questions concerning these veterans' views of the programs, including the application process. However, obtaining a comprehensive list of veterans to survey who have been turned down for a SBA guaranteed loan by a private lender would be difficult given privacy concerns.", "In a related development concerning veterans' access to capital, legislation was introduced during the 114 th Congress ( S. 1870 , the Veterans Entrepreneurial Transition Act of 2015, and its House companion bill, H.R. 3248 ) to authorize a three-year pilot program, administered by the SBA, to provide grants to no more than 250 GI-Bill benefit-eligible veterans to start or acquire a qualifying business. The grant amount would have been calculated according to a formula related to the unused portion of the recipient's GI-Bill benefits. Recipients would have been required to complete specified training and meet other program requirements, such as having an approved business plan. S. 1870 was ordered to be reported with an amendment in the nature of a substitute by the Senate Committee on Small Business and Entrepreneurship on July 29, 2015. ", "In addition, H.R. 5698 , the Strengthening Technical Assistance, Resources, and Training to Unleash the Potential of Veterans Act of 2016 (STARTUP Vets Act of 2016), and its companion bill in the Senate, S. 2273 , would have authorized the SBA to provide up to $1.5 million in grants annually \"from amounts made available to the Office of Veterans Business Development\" to organizations to create and operate business incubators and accelerators that provide technical assistance and training to veterans (including their spouse and dependents) to enable them \"to effectively transfer relevant skills to launch and accelerate small business concerns owned and controlled by covered individuals; and to create an avenue for high-performing covered individuals to meet and collaborate on business ideas.\"", "During the 115 th Congress, S. 1056 , the Veteran Small Business Export Promotion Act, and H.R. 2835 , To amend the Small Business Act, would have permanently waived \"the guarantee fee for loans of not more than $150,000 provided to veterans and spouses of veterans under the [SBA's] Export Working Capital, International Trade, and Export Express programs.\" "], "subsections": []}]}, {"section_title": "Federal Contracting Goals for Service-Disabled Veteran-Owned Small Businesses", "paragraphs": ["Since 1978, federal agency heads have been required to establish federal procurement contracting goals, in consultation with the SBA, \"that realistically reflect the potential of small business concerns\" to participate in federal procurement. Each agency is required, at the conclusion of each fiscal year, to report its progress in meeting the goals to the SBA. The SBA negotiates the goals with each federal agency and establishes a small business eligible baseline for evaluating the agency's performance. ", "The small business eligible baseline excludes certain contracts that the SBA has determined do not realistically reflect the potential for small business participation in federal procurement, such as contracts awarded to mandatory and directed sources, awarded and performed overseas, funded predominately from agency-generated sources, not covered by Federal Acquisition Regulations, and not reported in the Federal Procurement Data System (e.g., contracts or government procurement card purchases valued less than $3,000). These exclusions typically account for 18% to 20% of all federal prime contracts each year. ", "The SBA then evaluates the agencies' performance against their negotiated goals annually, using data from the Federal Procurement Data System\u2013Next Generation, managed by the U.S. General Services Administration, to generate the small business eligible baseline. This information is compiled into the official Small Business Goaling Report, which the SBA releases annually.", "Over the years, federal government-wide procurement contracting goals have been established for small businesses generally ( P.L. 100-656 , the Business Opportunity Development Reform Act of 1988, and P.L. 105-135 , the HUBZone Act of 1997\u2014Title VI of the Small Business Reauthorization Act of 1997); small businesses owned and controlled by socially and economically disadvantaged individuals ( P.L. 100-656 ); women ( P.L. 103-355 , the Federal Acquisition Streamlining Act of 1994); small businesses located within a Historically Underutilized Business Zone, or HUBZone ( P.L. 105-135 ); and small businesses owned and controlled by a service-disabled veteran ( P.L. 106-50 , the Veterans Entrepreneurship and Small Business Development Act of 1999).", "The current federal small business contracting goals are", "at least 23% of the total value of all small business eligible prime contract awards to small businesses for each fiscal year; 5% of the total value of all small business eligible prime contract awards and subcontract awards to small disadvantaged businesses for each fiscal year; 5% of the total value of all small business eligible prime contract awards and subcontract awards to women-owned small businesses; 3% of the total value of all small business eligible prime contract awards and subcontract awards to HUBZone small businesses; and 3% of the total value of all small business eligible prime contract awards and subcontract awards to service-disabled veteran-owned small businesses.", "There are no punitive consequences for not meeting the small business procurement goals. However, the SBA's Small Business Goaling Report is distributed widely, receives media attention, and heightens public awareness of the issue of small business contracting. For example, agency performance as reported in the SBA's report is often cited by Members during their questioning of federal agency witnesses in congressional hearings.", "As shown in Table 5 , the FY2017 Small Business Goaling Report , using data in the Federal Procurement Data System, indicates that federal agencies met the federal contracting goal for small businesses generally, small disadvantaged businesses, and service-disabled veteran-owned small businesses in FY2017. ", "Federal agencies awarded 23.88% of the value of their small business eligible contracts ($442.5 billion) to small businesses ($105.7 billion), 9.10% to small disadvantaged businesses ($40.2 billion), 4.71% to women-owned small businesses ($20.8 billion), 1.65% to HUBZone small businesses ($7.3 billion), and 4.05% to service-disabled veteran-owned small businesses ($17.9 billion). ", "The percentage of total reported federal contracts (without exclusions) awarded to those small businesses in FY2017 is also provided in the table for comparative purposes.", "In a related development, on November 17, 2015, the House passed H.R. 1694 , the Fairness to Veterans for Infrastructure Investment Act of 2015. The bill would have revised the requirement that 10% of the award of contracts for federal-aid highway, federal public transportation, and highway safety research and development programs be set-aside for small businesses owned and controlled by socially and economically disadvantaged individuals. The bill would have required the set-aside to include veteran-owned small businesses.", "In another related development, the U.S. Supreme Court's decision in Kingdomware Technologies, Inc. v. United States (decided on June 16, 2016) requiring the VA to grant VOSBs certain preferences when awarding procurement contracts could result in the VA awarding additional contracts to VOSBs.", "In addition, the prevention of fraud in federal small business contracting programs, and in the SBA's loan programs as well, has been a priority for both Congress and the SBA for many years, primarily because reports of fraud in these programs emerge with some regularity. Of particular interest to veterans, GAO has found that \"the lack of an effective government-wide fraud-prevention program\" has left the service-disabled veteran-owned small business program \"vulnerable to fraud and abuse.\" ", "Under the Small Business Act, a small business owned and controlled by a service-disabled veteran can qualify for a federal government procurement set-aside (a procurement in which only certain businesses may compete) or a sole-source award (awards proposed or made after soliciting and negotiating with only one source) if the small business is at least 51% unconditionally and directly owned and controlled by one or more service-disabled veteran. A veteran is defined as a person who has served \"in the active military, naval, or air service, and who was discharged or released under conditions other than dishonorable.\" A disability is service related when it \"was incurred or aggravated ... in [the] line of duty in the active military, naval, or air service.\"", "Federal agencies may set aside procurements for service-disabled veteran-owned small businesses only if the contracting officer reasonably expects that offers will be received from at least two responsible small businesses and the award will be made at a fair market price (commonly known as the \"rule of two\" because of the focus on there being at least two small businesses involved).", "Federal agencies may award sole contracts to service-disabled veteran-owned small businesses when (1) the contracting officer does not reasonably expect that two or more service-disabled veteran-owned small businesses will submit offers; (2) the anticipated award will not exceed $4.0 million ($6.5 million for manufacturing contracts); and (3) the award can be made at a fair and reasonable price. Otherwise, sole-source awards may only be made to service-disabled veteran-owned small businesses under other authority, such as the Competition in Contracting Act. Service-disabled veteran-owned small businesses are not eligible for price evaluation preferences in unrestricted competitions.", "The VA is statutorily required to establish annual goals for the awarding of VA contracts to both service-disabled veteran-owned small businesses and small businesses owned by other veterans. The VA is authorized to use \"other than competitive procedures\" in meeting these goals. For example, it may award any contract whose value is below the simplified acquisition threshold (generally $250,000 ) to a veteran-owned business on a sole-source basis, and it may also make sole-source awards of contracts whose value (including options) is between $250,000 and $5 million, provided that certain conditions are met. When these conditions are not met, the VA is generally required to set aside the contract for service-disabled or other veteran-owned small businesses.", "Service-disabled veteran-owned small businesses can generally self-certify as to their eligibility for contracting preferences available under the Small Business Act. However, in an effort to address fraud in VA contracting, veteran-owned and service-disabled veteran-owned small businesses must be listed in the VA's VetBiz database and have their eligibility verified by the VA to be eligible for preferences in certain VA contracts.", "Firms that fraudulently misrepresent their size or status have long been subject to civil and criminal penalties under Section 16 of the Small Business Act; SBA regulations implementing Section 16; and other provisions of law, such as the False Claims Act, Fraud and False Statements Act, Program Fraud Civil Remedies Act, and Contract Disputes Act.", "Several bills were introduced during the 112 th Congress to address fraud in small business contracting programs in various ways. Of particular interest to veterans, S. 3572 , the Restoring Tax and Regulatory Certainty to Small Businesses Act of 2012, and S. 633 , the Small Business Contracting Fraud Prevention Act of 2011, would have, among other changes, amended Section 16 of the Small Business Act to expressly include service-disabled veteran-owned small businesses among the types of small businesses subject to penalties for fraud under that section . The bills would also have required service-disabled veteran-owned small businesses to register in the VA's VetBiz database, or any successor database, and have their status verified by the VA to be eligible for contracting preferences for service-disabled veteran-owned small businesses under the Small Business Act.", "In addition, during the 113 th Congress, S. 2334 , the Improving Opportunities for Service-Disabled Veteran-Owned Small Businesses Act of 2013, and its companion bill in the House, H.R. 2882 , and H.R. 4435 , the Howard P. \"Buck\" McKeon National Defense Authorization Act for Fiscal Year 2015, which was passed by the House on May 22, 2014, included a provision that would have authorized the transfer of the VetBiz database's administration and the verification of service-disabled veteran owned small businesses from the VA to the SBA.", "Advocates of requiring service-disabled veteran-owned small businesses to register in the VetBiz database and have their status verified by the VA (or the SBA) to be eligible for contracting preferences under the Small Business Act argue that doing so would reduce fraud. As then-Senator Snowe stated on the Senate floor when she introduced S. 633 , \"Our legislation attempts to remedy the spate of illegitimate firms siphoning away contracts from the rightful businesses trying to compete within the SBA's contracting programs.\"", "Others worry that requiring service-disabled veteran-owned small businesses to register in the VetBiz database and have their status verified by the VA (or the SBA) to be eligible for contracting preferences under the Small Business Act may add to the paperwork burdens of small businesses. They seek alternative ways to address the need to reduce fraud in federal small business procurement programs that do not increase the paperwork requirements of small businesses. Still others note that the effectiveness of any change to prevent fraud in veteran-owned and service-disabled veteran-owned small business procurement programs largely depends upon how the change is implemented. For example, in July 2011, the VA's Office of Inspector General concluded that the VA's implementation of its veteran-owned and service-disabled veteran-owned small business procurement fraud prevention programs needed improvement:", "We project that VA awarded ineligible businesses at least 1,400 VOSB [Veteran Owned Small Business] and SDVOSB [Service-Disabled Veteran Owned Small Business] contracts valued at $500 million annually and that it will award about $2.5 billion in VOSB and SDVOSB contracts to ineligible businesses over the next 5 years if it does not strengthen oversight and verification procedures. VA and the Office of Small and Disadvantaged Business Utilization (OSDBU) need to improve contracting officer oversight, document reviews, completion of site visits for \"high-risk\" businesses, and the accuracy of VetBiz Vendor Information Pages information. "], "subsections": []}, {"section_title": "The Military Reservist Economic Injury Disaster Loan Program", "paragraphs": ["P.L. 106-50 , the Veterans Entrepreneurship and Small Business Development Act of 1999, signed into law on August 17, 1999, authorized the SBA's Military Reservist Economic Injury Disaster Loan (MREIDL) program. The SBA published the final rule establishing the program in the Federal Register on July 25, 2001, with an effective date of August 24, 2001.", "The Senate Committee on Small Business provided, in its committee report on the Veterans Entrepreneurship and Small Business Development Act of 1999, the following reasons for supporting the authorization of the MREIDL Program:", "During and after the Persian Gulf War in the early 1990's, the Committee heard from reservists whose businesses were harmed, severely crippled, or even lost, by their absence. Problems faced by reservists called to active duty and their small businesses were of a varied nature and included cash-flow problems, difficulties with training an appropriate alternate manager on very short notice to run the business during the period of service, lost clientele upon return, and on occasion, bankruptcy. These hardships can occur during a period of national emergency or during a period of contingency operation when troops are deployed overseas.", "To help such reservists and their small businesses, the Committee seeks to provide credit and management assistance to small businesses when an essential employee (i.e., an owner, manager or vital member of the business' staff) is a reservist called to active duty. The Committee believes that financial assistance in the form of loans, loan deferrals and managerial guidance are effective ways to minimize the adverse financial demands of the call to active duty. They not only ameliorate financial difficulties but also strengthen small businesses.", "The House Committee on Small Business also supported the program's authorization, indicating in its committee report that the program", "will also fulfill a long unmet need to assist our military reservists who are small business owners. Often these individuals, called to service at short notice, come back from fighting to protect our freedoms only to find their businesses in shambles. H.R. 1568 will establish loan deferrals, technical and managerial assistance, and loan programs for these citizen soldiers so that while they risk their lives they need not risk their livelihoods.", "As mentioned previously, the SBA provides direct loans for owners of businesses of all sizes, homeowners, and renters to assist their recovery from natural disasters. The SBA's MREIDL program provides disaster assistance in the form of direct loans of up to $2 million to help small business owners who are not able to obtain credit elsewhere to (1) meet ordinary and necessary operating expenses that they could have met but are not able to meet; or (2) enable them to market, produce, or provide products or services ordinarily marketed, produced, or provided by the business that cannot be done because an essential employee has been called up to active duty in his or her role as a military reservist or member of the National Guard due to a period of military conflict. Under specified circumstances, the SBA may waive the $2 million limit (e.g., the small business is in immediate danger of going out of business, is a major source of employment, employs 10% or more of the workforce within the commuting area in which the business is located).", "P.L. 106-50 defines an essential employee as \"an individual who is employed by a small business concern and whose managerial or technical expertise is critical to the successful day-to-day operations of that small business concern.\" The act defines a military conflict as (1) a period of war declared by Congress; or (2) a period of national emergency declared by Congress or the President; or (3) a period of contingency operation. A contingency operation is designated by the Secretary of Defense as an operation in which our military may become involved in military actions, operations, or hostilities (peacekeeping operations).", "The SBA is authorized to make such disaster loans either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis. The loan term may be up to a maximum of 30 years and is determined by the SBA in accordance with the borrower's ability to repay the loan. The loan's interest rate is the SBA's published interest rate for an Economic Injury Disaster Loan at the time the application for assistance is approved by the SBA. Economic Injury Disaster Loan interest rates may not exceed 4%.", "The SBA is not required by law to require collateral on disaster loans. However, the SBA has established collateral requirements for disaster loans based on \"a balance between protection of the Agency's interest as a creditor and as a provider of disaster assistance.\" The SBA generally does not require collateral to secure a MREIDL loan of $50,000 or less. Larger loan amounts require collateral, but the SBA will not decline a request for a MREIDL loan for a lack of collateral if the SBA is reasonably certain the borrower can repay the loan.", "The SBA disbursed one MREIDL loan in FY2014, none in FY2015, three in FY2016, and three in FY2017. Since the MREIDL's inception through December 31, 2017, the SBA has disbursed 352 MREIDL loans amounting to $32.97 million. Of these 352 loans, 85 loans (24.2% of the total number of MREIDL loans disbursed), amounting to $7.8 million (23.8% of the total amount of MREIDL loans disbursed), have been charged off (a declaration that the debt is unlikely to be collected) by the SBA.", "Because the MREIDL program is relatively small and noncontroversial, this report does not present a discussion of the congressional issues affecting the program."], "subsections": []}, {"section_title": "Concluding Observations", "paragraphs": ["Congress has demonstrated a continuing interest in federal programs designed to assist veterans transition from military to civilian life. For example, the SBA's veteran business development programs, loan guaranty programs, and federal procurement programs for small businesses generally, including service-disabled veteran-owned small businesses, have all been subject to congressional hearings during the past several Congresses. Also, as has been discussed, several bills have been introduced in recent Congresses to address the SBA's management of these programs and fraud.", "Given the many factors that influence business success, measuring the effectiveness of the SBA's veteran assistance programs, especially the programs' effect on veteran job retention and creation, is both complicated and challenging. For example, it is difficult to determine with any degree of precision or certainty the extent to which any changes in the success of a small business result primarily from that business's participation in the SBA's programs or from changes in the broader economy. That task is made even more challenging by the absence of performance outcome measures that could serve as a guide. In most instances, the SBA uses program performance measures that focus on indicators that are primarily output related, such as the number and amount of loans approved for veteran-owned small businesses and the number and amount of federal contracts awarded to service-disabled veteran-owned small businesses.", "Both GAO and the SBA's Office of Inspector General have recommended that the SBA adopt more outcome-related performance measures for the SBA's loan guaranty programs, such as tracking the number of borrowers that remain in business after receiving a SBA guaranteed loan to measure the extent to which the SBA contributed to their ability to stay in business. Other performance-oriented measures that Congress might also consider include requiring the SBA to survey veterans who participate in its business development programs or who have received a SBA guaranteed loan. This survey could provide information related to the difficulty the veterans experienced in obtaining a loan from the private sector, their experiences with the SBA's loan application process, and the role the SBA loan had in creating or retaining jobs. The SBA could also survey service-disabled veteran-owned small businesses that were awarded a federal contract to determine the extent to which the SBA was instrumental in their receiving the award and the extent to which the award contributed to their ability to create jobs or expand their scope of operations."], "subsections": []}]}}
{"id": "R43783", "title": "School Meals Programs and Other USDA Child Nutrition Programs: A Primer", "released_date": "2019-02-11T00:00:00", "summary": ["The \"child nutrition programs\" refer to the U.S. Department of Agriculture's Food and Nutrition Service (USDA-FNS) programs that provide food for children in school or institutional settings. The best known programs, which serve the largest number of children, are the school meals programs: the National School Lunch Program (NSLP) and the School Breakfast Program (SBP). The child nutrition programs also include the Child and Adult Care Food Program (CACFP), which provides meals and snacks in day care and after school settings; the Summer Food Service Program (SFSP), which provides food during the summer months; the Special Milk Program (SMP), which supports milk for schools that do not participate in NSLP or SBP; and the Fresh Fruit and Vegetable Program (FFVP), which funds fruit and vegetable snacks in select elementary schools.", "Funding: The vast majority of the child nutrition programs account is considered mandatory spending, with trace amounts of discretionary funding for certain related activities. Referred to as open-ended, \"appropriated entitlements,\" funding is provided through the annual appropriations process; however, the level of spending is controlled by benefit and eligibility criteria in federal law and dependent on the resulting levels of participation. Federal cash funding (in the form of per-meal reimbursements) and USDA commodity food support is guaranteed to schools and other providers based on the number of meals or snacks served and participant category (e.g., free meals for poor children get higher subsidies).", "Participation: The child nutrition programs serve children of varying ages and in different institutional settings. The NSLP and SBP have the broadest reach, serving qualifying children of all ages in school settings. Other child nutrition programs serve more-narrow populations. CACFP, for example, provides meals and snacks to children in early childhood and after-school settings among other venues. Programs generally provide some subsidy for all food served but a larger federal reimbursement for food served to children from low-income households.", "Administration: Responsibility for child nutrition programs is divided between the federal government, states, and localities. The state agency and type of local provider differs by program. In the NSLP and SBP, schools and school districts (\"school food authorities\") administer the program. Meanwhile, SFSP (and sometimes CACFP) uses a model in which sponsor organizations handle administrative responsibilities for a number of sites that serve meals.", "Reauthorization: The underlying laws covering the child nutrition programs were last reauthorized in the Healthy, Hunger-Free Kids Act of 2010 (HHFKA, P.L. 111-296, enacted December 13, 2010). This law made significant changes to child nutrition programs, including increasing federal financing for school lunches, expanding access to community eligibility and direct certification options for schools, and expanding eligibility options for home child care providers. The law also required an update to school meal nutrition guidelines as well as new guidelines for food served outside the meal programs (e.g., snacks sold in vending machines and cafeteria a la carte lines).", "Current Issues: The 114th Congress began but did not complete a 2016 child nutrition reauthorization, and there was no significant legislative activity with regard to reauthorization in the 115th Congress. However, the vast majority of operations and activities continue with funding provided by appropriations laws. Current issues in the child nutrition programs are discussed in CRS Report R45486, Child Nutrition Programs: Current Issues."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction and Background", "paragraphs": ["The federal child nutrition programs provide assistance to schools and other institutions in the form of cash, commodity food, and administrative support (such as technical assistance and administrative funding) based on the provision of meals and snacks to children. In general, these programs were created (and amended over time) to both improve children's nutrition and provide support to the agriculture economy. ", "Today, the child nutrition programs refer primarily to the following meal, snack, and milk reimbursement programs (these and other acronyms are listed in Appendix A ):", "National School Lunch Program (NSLP) (Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.)); School Breakfast Program (SBP) (Child Nutrition Act, Section 4 (42 U.S.C. 1773)); Child and Adult Care Food Program (CACFP) (Richard B. Russell National School Lunch Act, Section 17 (42 U.S.C. 1766)); Summer Food Service Program (SFSP) (Richard B. Russell National School Lunch Act, Section 13 (42 U.S.C. 1761)); and Special Milk Program (SMP) (Child Nutrition Act, Section 3 (42 U.S.C. 1772)). ", "The programs provide financial support and/or foods to the institutions that prepare meals and snacks served outside of the home (unlike other food assistance programs such as the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program) where benefits are used to purchase food for home consumption). Though exact eligibility rules and pricing vary by program, in general the amount of federal reimbursement is greater for meals served to qualifying low-income individuals or at qualifying institutions, although most programs provide some subsidy for all food served. Participating children receive subsidized meals and snacks, which may be free or at reduced price. Forthcoming sections discuss how program-specific eligibility rules and funding operate. ", "This report describes how each program operates under current law, focusing on eligibility rules, participation, and funding. This introductory section describes some of the background and principles that generally apply to all of the programs; subsequent sections go into further detail on the workings of each. ", "Unless stated otherwise, participation and funding data come from USDA-FNS's \"Keydata Reports.\" "], "subsections": [{"section_title": "Authorization and Reauthorization", "paragraphs": ["The child nutrition programs are most often dated back to the 1946 enactment of the National School Lunch Act, which created the National School Lunch Program, albeit in a different form than it operates today. Most of the child nutrition programs do not date back to 1946; they were added and amended in the decades to follow as policymakers expanded child nutrition programs' institutional settings and meals provided: ", "The Special Milk Program was created in 1954, regularly extended, and made permanent in 1970. The School Breakfast Program was piloted in 1966, regularly extended, and eventually made permanent in 1975. A program for child care settings and summer programs was piloted in 1968, with separate programs authorized in 1975 and then made permanent in 1978. These are now the Child and Adult Care Food Program and Summer Food Service Program. The Fresh Fruit and Vegetable Program began as a pilot in 2002, was made permanent in 2004, and was expanded nationwide in 2008.", "The programs are now authorized under three major federal statutes: the Richard B. Russell National School Lunch Act (originally enacted as the National School Lunch Act in 1946), the Child Nutrition Act (originally enacted in 1966), and Section 32 of the act of August 24, 1935 (7 U.S.C. 612c). Congressional jurisdiction over the underlying three laws has typically been exercised by the Senate Agriculture, Nutrition, and Forestry Committee; the House Education and the Workforce Committee; and, to a limited extent (relating to commodity food assistance and Section 32 issues), the House Agriculture Committee. ", "Congress periodically reviews and reauthorizes expiring authorities under these laws. The child nutrition programs were most recently reauthorized in 2010 through the Healthy, Hunger-Free Kids Act of 2010 (HHFKA, P.L. 111-296 ); some of the authorities created or extended in that law expired on September 30, 2015. WIC (the Special Supplemental Nutrition Program for Women, Infants, and Children) is also typically reauthorized with the child nutrition programs. WIC is not one of the child nutrition programs and is not discussed in this report. ", "The 114 th Congress began but did not complete a 2016 child nutrition reauthorization (see CRS Report R44373, Tracking the Next Child Nutrition Reauthorization: An Overview ). There was no significant legislative activity with regard to reauthorization in the 115 th Congress."], "subsections": []}, {"section_title": "Program Administration: Federal, State, and Local", "paragraphs": ["The U.S. Department of Agriculture's Food and Nutrition Service (USDA-FNS) administers the programs at the federal level. The programs are operated by a wide variety of local public and private providers and the degree of direct state involvement differs by program and state. At the state level, education, health, social services, and agriculture departments all have roles; at a minimum, they are responsible for approving and overseeing local providers such as schools, summer program sponsors, and child care centers and day care homes, as well as making sure they receive the federal support they are due. At the local level, program benefits are provided to millions of children (e.g., there were 30.0 million in the National School Lunch Program, the largest of the programs, in FY2017), through some 100,000 public and private schools and residential child care institutions, nearly 170,000 child care centers and family day care homes, and just over 50,000 summer program sites.", "All programs are available in the 50 states and the District of Columbia. Virtually all operate in Puerto Rico, Guam, and the Virgin Islands (and, in differing versions, in the Northern Marianas and American Samoa). "], "subsections": []}, {"section_title": "Funding Overview", "paragraphs": ["This section summarizes the nature and extent to which the programs' funding is mandatory and discretionary, including a discussion of appropriated entitlement status. Table 3 lists child nutrition program and related expenditures."], "subsections": [{"section_title": "Open-Ended, Appropriated Entitlement Funding", "paragraphs": ["Most spending for child nutrition programs is provided in annual appropriations acts to fulfill the legal financial obligation established by the authorizing laws. That is, the level of spending for such programs, referred to as appropriated mandatory spending, is not controlled through the annual appropriations process, but instead is derived from the benefit and eligibility criteria specified in the authorizing laws. The appropriated mandatory funding is treated as mandatory spending. Further, if Congress does not appropriate the funds necessary to fund the program, eligible entities may have legal recourse. Congress typically considers the Administration's forecast for program needs in its appropriations decisions. For the majority of funding discussed in this report, the formula that controls the funding is not capped and fluctuates based on the reimbursement rates and the number of meals/snacks served in the programs. "], "subsections": [{"section_title": "Cash Reimbursements and Commodity Foods", "paragraphs": ["In the meal service programs, such as the National School Lunch Program, School Breakfast Program, summer programs, and assistance for child care centers and day care homes, federal aid is provided in the form of statutorily set subsidies (reimbursements) paid for each meal/snack served that meets federal nutrition guidelines. Although all (including full-price) meals/snacks served by participating providers are subsidized, those served free or at a reduced price to lower-income children are supported at higher rates. All federal meal/snack subsidy rates are indexed annually (each July) for inflation, as are the income eligibility thresholds for free and reduced-price meals/snacks. Subsequent sections discuss how a specific program's eligibility and reimbursements work. ", "Most subsidies are cash payments to schools or other providers, but a smaller portion of aid is provided in the form of USDA-purchased commodity foods . Laws for three child nutrition programs (NSLP, CACFP, and SFSP) require the provision of commodity foods (or in some cases allow cash in lieu of commodity foods). ", "Meal and snack service entails nonfood costs. Federal child nutrition per-meal/snack subsidies may be used to cover local providers' administrative and operating costs. However, the separate direct federal payments for administrative/operating costs (\"State Administrative Expenses,\" discussed in the \" Related Programs, Initiatives, and Support\u00a0Activities \" section) are limited. "], "subsections": []}]}, {"section_title": "Other Federal Funding", "paragraphs": ["In addition to the open-ended, appropriated entitlement funds summarized above, the child nutrition programs' funding also includes certain other mandatory funding and a limited amount of discretionary funding. Some of the activities discussed in \" Related Programs, Initiatives, and Support\u00a0Activities ,\" such as Team Nutrition, are provided for with discretionary funding.", "Aside from the annually appropriated funding, the child nutrition programs are also supported by certain permanent appropriations and transfers. Notably, funding for the Fresh Fruit and Vegetable Program is funded by a transfer from USDA's Section 32 program, a permanent appropriation of 30% of the previous year's customs receipts. "], "subsections": []}, {"section_title": "State, Local, and Participant Funds", "paragraphs": ["Federal subsidies do not necessarily cover the full cost of the meals and snacks offered by providers. States and localities help cover program costs, as do children's families by paying charges for nonfree or reduced-price meals/snacks. There is a nonfederal cost-sharing requirement for the school meals programs (discussed below), and some states supplement school funding through additional state per-meal reimbursements or other prescribed financing arrangements. "], "subsections": []}]}, {"section_title": "Child Nutrition Programs at a Glance", "paragraphs": ["Subsequent sections of this report delve into the details of how each of the child nutrition programs support the service of meals and snacks in institutional settings; first, it is useful to take a broader perspective of primary program elements. Table 1 is a top-level look at the different programs that displays distinguishing characteristics (what meals are provided, in what settings, to what ages) and recent program spending."], "subsections": []}, {"section_title": "Links to Resources", "paragraphs": ["Other relevant CRS reports in this area include", "CRS In Focus IF10266, An Introduction to Child Nutrition Reauthorization CRS Report R45486, Child Nutrition Programs: Current Issues CRS Report R42353, Domestic Food Assistance: Summary of Programs CRS Report R41354, Child Nutrition and WIC Reauthorization: P.L. 111-296 (summarizes the Healthy, Hunger-Free Kids Act of 2010) CRS Report R44373, Tracking the Next Child Nutrition Reauthorization: An Overview CRS Report R44588, Agriculture and Related Agencies: FY2017 Appropriations CRS Report RL34081, Farm and Food Support Under USDA's Section 32 Program", "Other relevant resources include ", "USDA-FNS's website, https://www.fns.usda.gov/school-meals/child-nutrition-programs USDA-FNS's Healthy, Hunger-Free Kids Act page, http://www.fns.usda.gov/school-meals/healthy-hunger-free-kids-act The FNS page of the Federal Register , https://www.federalregister.gov/agencies/food-and-nutrition-service"], "subsections": []}]}, {"section_title": "School Meals Programs", "paragraphs": ["This section discusses the school meals programs: the National School Lunch Program (NSLP) and the School Breakfast Program (SBP). Principles and concepts common to both programs are discussed first; subsections then discuss features and data unique to the NSLP and SBP, respectively."], "subsections": [{"section_title": "General Characteristics", "paragraphs": ["The federal school meals programs provide federal support in the form of cash assistance and USDA commodity foods; both are provided according to statutory formulas based on the number of reimbursable meals served in schools. The subsidized meals are served by both public and private nonprofit elementary and secondary schools and residential child care institutions (RCCIs) that opt to enroll and guarantee to offer free or reduced-price meals to eligible low-income children. Both cash and commodity support to participating schools are calculated based on the number and price of meals served (e.g., lunch or breakfast, free or full price), but once the aid is received by the school it is used to support the overall school meal service budget, as determined by the school. This report focuses on the federal reimbursements and funding, but it should be noted that some states have provided state financing through additional state-specific funding.", "Federal law does not require schools to participate in the school meals programs. However, some states have mandated that schools provide lunch and/or breakfast, and some of these states require that their schools do so through NSLP and/or SBP. The program is open to public and private schools. ", "A reimbursable meal requires compliance with federal school nutrition standards, which have changed throughout the history of the program based on nutritional science and children's nutritional needs. Food items not served as a complete meal meeting nutrition standards (e.g., a la carte offerings) are not reimbursable meals, and therefore are not eligible for federal per-meal, per-snack reimbursements. Following rulemaking to implement provisions in the Healthy, Hunger-Free Kids Act of 2010 ( P.L. 111-296 ), USDA updated the nutrition standards for reimbursable meals in January 2012 (see \" Nutrition Standards \" for more information). Schools serving meals that meet the updated nutrition standards are eligible for an increased reimbursement of 6 cents per lunch. ", "USDA-FNS administers the school meals programs federally, and state agencies (typically state departments of education) oversee and transmit reimbursements through agreements with school food authorities (SFAs) (typically local educational agencies (LEAs); usually these are school districts). Figure 1 provides an overview of the roles and relationships between these levels of government.", "There is a cost-sharing requirement for the programs, which amounts to a contribution of approximately $200 million from the states. There also are states that choose to supplement federal reimbursements with their own state reimbursements. "], "subsections": []}, {"section_title": "School Meals Eligibility Rules", "paragraphs": ["The school meals programs and related funding do not serve only low-income children. All students can receive a meal at a NSLP- or SBP-participating school, but how much the child pays for the meal and/or how much of a federal reimbursement the state receives will depend largely on whether the child qualifies for a \"free,\" \"reduced-price,\" or \"paid\" (i.e., advertised price) meal. Both NSLP and SBP use the same household income eligibility criteria and categorical eligibility rules. States and schools receive the largest reimbursements for free meals, smaller reimbursements for reduced-price meals, and the smallest (but still some federal financial support) for the full-price meals.", "There are three pathways through which a child can become certified to receive a free or reduced-price meal:", "1. Household income eligibility for free and reduced-price meals (information typically collected via household application), 2. Categorical (or automatic) eligibility for free meals (information collected via household application or a direct certification process), and 3. School-wide free meals under the Community Eligibility Provision (CEP) , an option for eligible schools that is based on the share of students identified as eligible for free meals.", "Each of these pathways is discussed in more detail below."], "subsections": [{"section_title": "Income Eligibility", "paragraphs": ["The income eligibility thresholds (shown in Table 2 ) are based on multipliers of the federal poverty guidelines. As the poverty guidelines are updated every year, so are the eligibility thresholds for NSLP and SBP. ", "Free Meals: Children receive free meals if they have household income at or below 130% of the federal poverty guidelines; these meals receive the highest subsidy rate. (Reimbursements are approximately $3.30 per lunch served, less for breakfast.) Reduced-Price Meals: Children may receive reduced-price meals (charges of no more than 40 cents for a lunch or 30 cents for a breakfast) if their household income is above 130% and less than or equal to 185% of the federal poverty guidelines; these meals receive a subsidy rate that is 40 cents (NSLP) or 30 cents (SBP) below the free meal rate. (Reimbursements are approximately $2.90 per lunch served.) Paid Meals: A comparatively small per-meal reimbursement is provided for full-price or paid meals served to children whose families do not apply for assistance or whose family income does not qualify them for free or reduced-price meals. The paid meal price is set by the school but must comply with federal regulations. (Reimbursements are approximately 30 cents per lunch served.)", "The above reimbursement rates are approximate; exact current-year federal reimbursement rates for NSLP and SBP are listed in Table B -1 and Table B -3 , respectively. ", "Households complete paper or online applications that collect relevant income and household size data, so that the school district can determine if children in the household are eligible for free meals, reduced-price meals, or neither.", "Though these income guidelines primarily influence funding and administration of NSLP and SBP, they also affect the eligibility rules for the SFSP, CACFP, and SMP (described further in subsequent sections)."], "subsections": []}, {"section_title": "Categorical Eligibility", "paragraphs": ["In addition to the eligibility thresholds listed above, the school meals programs also convey eligibility for free meals based on household participation in certain other need-tested programs or children's specified vulnerabilities (e.g., foster children). Per Section 12 of the National School Lunch Act, \"a child shall be considered automatically eligible for a free lunch and breakfast ... without further application or eligibility determination, if the child is\"", "in a household receiving benefits through SNAP (Supplemental Nutrition Assistance Program); FDPIR (Food Distribution Program on Indian Reservations, a program that operates in lieu of SNAP on some Indian reservations) benefits; or TANF (Temporary Assistance for Needy Families) cash assistance; enrolled in Head Start; in foster care; a migrant; a runaway; or homeless.", "For meals served to students certified in the above categories, the state/school receive a reimbursement at the free meal amount and children receive a free meal. (See Table B -1 and Table B -3 for school year 2018-2019 rates.)", "Some school districts collect information for these categorical eligibility rules via paper application. Others conduct a process called direct certification \u2014a proactive process where government agencies typically cross-check their program rolls and certify a household's children for free school meals without the household having to complete a school meals application. ", "Prior to 2004, states had the option to conduct direct certification of SNAP (then, the Food Stamp Program), TANF, and FDPIR participants. In the 2004 child nutrition reauthorization ( P.L. 108-265 ), states were required under federal law to conduct direct certification for SNAP participants, with nationwide implementation taking effect in school year 2008-2009. Conducting direct certification for TANF and FDPIR remains at the state's discretion.", "The Healthy, Hunger-Free Kids Act of 2010 (HHFKA; P.L. 111-296 ) made further policy changes to expand direct certification (discussed further in the next section). One of those changes was the initiation of a demonstration project to look at expanding categorical eligibility and direct certification to some Medicaid households. The law also funded performance incentive grants for high-performing states and authorized correcting action planning for low-performing states in direct certification activities. ", "Under SNAP direct certification rules generally, schools enter into agreements with SNAP agencies to certify children in SNAP households as eligible for free school meals without requiring a separate application from the family. Direct certification systems match student enrollment lists against SNAP agency records, eliminating the need for action by the child's parents or guardians. Direct certification allows schools to make use of SNAP's more in-depth eligibility certification process; this can reduce errors that may occur in school lunch application eligibility procedures that are otherwise used. From a program access perspective, direct certification also reduces the number of applications a household must complete.", " Figure 2 , created by GAO and published in a May 2014 report, provides an overview of how school districts certify students for free and reduced-price meals under the income-based and category-based rules, via applications and direct certification. A USDA-FNS study of school year 2014-2015 estimates that 11.1 million students receiving free meals were directly certified\u201468% of all categorically eligible students receiving free meals."], "subsections": []}, {"section_title": "Community Eligibility Provision (CEP)", "paragraphs": ["HHFKA also authorized the school meals Community Eligibility Provision (CEP), an option in NSLP and SBP law that allows eligible schools and school districts to offer free meals to all enrolled students based on the percentage of their students who are identified as automatically eligible from nonhousehold application sources (primarily direct certification through other programs). ", "Based on the statutory parameters, USDA-FNS piloted CEP in various states over three school years and it expanded nationwide in school year 2014-2015. Eligible LEAs have until June 30 of each year to notify USDA-FNS if they will participate in CEP. According to a database maintained by the Food Research and Action Center, just over 20,700 schools in more than 3,500 school districts (LEAs) participated in CEP in SY2016-2017, an increase of approximately 2,500 schools compared to SY2015-2016.", "For a school (or school district, or group of schools within a district) to provide free meals to all children", "the school(s) must be eligible for CEP based on the share (40% or greater) of enrolled children that can be identified as categorically (or automatically) eligible for free meals, and the school must opt-in to CEP. ", "Though CEP schools serve free meals to all students, they are not reimbursed at the \"free meal\" rate for every meal. Instead, the law provides a funding formula: the percentage of students identified as automatically eligible (the \"identified student percentage\" or ISP) is multiplied by a factor of 1.6 to estimate the proportion of students who would be eligible for free or reduced-price meals had they been certified via application. The result is the percentage of meals served that will be reimbursed at the free meal rate, with the remainder reimbursed at the far lower paid meal rate. For example, if a CEP school identifies that 40% of students are eligible for free meals, then 64% of the meals served will be reimbursed at the free meal rate and 36% at the paid meal rate. Schools that identify 62.5% or more students as eligible for free meals receive the free meal reimbursement for all meals served.", "Some of the considerations that may impact a school's decision to participate in CEP include whether the new funding formula would be beneficial for their school meal budget; an interest in reducing paperwork for families and schools; and an interest in providing more free meals, including meals to students who have not participated in the program before."], "subsections": []}]}, {"section_title": "Nutrition Standards", "paragraphs": [], "subsections": [{"section_title": "School Meals", "paragraphs": ["The Healthy, Hunger-Free Kids Act of 2010 (HHFKA; P.L. 111-296 ) set in motion changes to the nutrition standards for school meals, requiring USDA to update the standards within a certain timeframe. The law required that the revised standards be based on recommendations from the Institute of Medicine (IOM) (now the Health and Medicine Division) at the National Academy of Sciences. The law also provided increased federal subsidies (6 cents per lunch) for schools meeting the new requirements and funding for technical assistance related to implementation. ", "USDA published the final regulations in January 2012. The final rule sought to align school meal patterns with the 2010 Dietary Guidelines for Americans, and, generally consistent with IOM's recommendations, increased the amount of fruits, vegetables, whole grains, and low-fat or fat-free milk in school meals. The regulations also included calorie maximums and sodium limits to phase in over time, among other requirements. ", "The nutrition standards largely took effect in SY2012-2013 for lunches and in SY2013-2014 for breakfasts. A few other requirements were scheduled to phase in over multiple school years. Some schools experienced difficulty implementing the new guidelines, and Congress and USDA have made changes to the 2012 final rule's whole grain, sodium, and milk requirements. For SY2019-2020 and onwards, schools are operating under a final rule published December 12, 2018."], "subsections": []}, {"section_title": "Competitive Foods", "paragraphs": ["The HHFKA also gave USDA the authority to regulate other foods in the school nutrition environment. Sometimes called \"competitive foods,\" these include foods and drinks sold in a la carte lines, vending machines, snack bars and concession stands, and fundraisers. ", "Relying on recommendations made by a 2007 IOM report, USDA-FNS promulgated a proposed rule and then an interim final rule in June 2013, which went into effect for SY2014-2015. The interim final rule created nutrition guidelines for all non-meal foods and beverages that are sold during the school day (defined as midnight until 30 minutes after dismissal). The final rule, published on July 29, 2016, maintained the interim final rules with minor modifications. Under the final standards, these foods must meet whole-grain requirements; have certain primary ingredients; and meet calorie, sodium, and fat limits, among other requirements. Schools are limited to a list of no- and low-calorie beverages they may sell (with larger portion sizes and caffeine allowed in high schools). ", "There are no limits on fundraisers selling foods that meet the interim final rule's guidelines. Fundraisers outside of the school day are not subject to the guidelines. HHFKA and the interim final rule provide states with discretion to exempt infrequent fundraisers selling foods or beverages that do not meet the nutrition standards.", "The rule does not limit foods brought from home, only foods sold at school during the school day. The federal standards are minimum standards; states and school districts are permitted to issue more stringent policies. "], "subsections": []}]}, {"section_title": "National School Lunch Program (NSLP)", "paragraphs": ["In FY2017, NSLP subsidized 4.9 billion lunches to children in close to 96,000 schools and 3,200 residential child care institutions (RCCIs). Average daily participation was 30.0 million students (58% of children enrolled in participating schools and RCCIs). Of the participating students, 66.7% (20.0 million) received free lunches and 6.5% (2.0 million) received reduced-price lunches. The remainder were served full-price meals, though schools still receive a reimbursement for these meals. Figure 3 shows FY2017 participation data.", "FY2017 federal school lunch costs totaled approximately $13.6 billion (see Table 3 for the various components of this total). The vast majority of this funding is for per-meal reimbursements for free and reduced-price lunches.", "The HHFKA also provided an additional 6-cent per-lunch reimbursement to schools that provide meals that meet the updated nutritional guidelines requirements. This bonus is not provided for breakfast, but funds may be used to support schools' breakfast programs. NSLP lunch reimbursement rates are listed in Table B -1 .", "In addition to federal cash subsidies, schools participating in NSLP receive USDA-acquired commodity food s . Schools are entitled to a specific, inflation-indexed value of USDA commodity foods for each lunch they serve. Also, schools may receive donations of bonus commodities acquired by USDA in support of the farm economy. In FY2017, the value of federal commodity food aid to schools totaled nearly $1.4 billion. The per-meal rate for commodity food assistance is included in Table B-4 .", "While the vast majority of NSLP funding is for lunches served during the school day, NSLP may also be used to support snack service during the school year and to serve meals during the summer. These features are discussed in subsequent sections, \" Summer Meals \" and \" After-School Meals and Snacks: CACFP,\u00a0NSLP Options .\" Reimbursement rates for snacks are listed in Table B -2 ."], "subsections": []}, {"section_title": "School Breakfast Program (SBP)", "paragraphs": ["The School Breakfast Program (SBP) provides per-meal cash subsidies for breakfasts served in schools. Participating schools receive subsidies based on their status as a severe need or nonsevere need institution. Schools can qualify as a severe need school if 40% or more of their lunches are served free or at reduced prices. See Table B -3 for SBP reimbursement rates.", " Figure 4 displays SBP participation data for FY2017. In that year, SBP subsidized over 2.4 billion breakfasts in over 88,000 schools and nearly 3,200 RCCIs. Average daily participation was 14.7 million children (30.1% of the students enrolled in participating schools and RCCIs). The majority of meals served through SBP are free or reduced-price. Of the participating students, 79.1% (11.6 million) received free meals and 5.7% (835,000) purchased reduced-price meals. Federal school breakfast costs for the fiscal year totaled approximately $4.3 billion (see Table 3 for the various components of this total).", "Significantly fewer schools and students participate in SBP than in NSLP. Participation in SBP tends to be lower for several reasons, including the traditionally required early arrival by students in order to receive a meal and eat before school starts. Some schools offer (and anti-hunger groups have encouraged) models of breakfast service that can result in greater SBP participation, such as Breakfast in the Classroom, where meals are delivered in the classroom; \"grab and go\" carts, where students receive a bagged breakfast that they bring to class, or serving breakfast later in the day in middle and high schools. ", "Unlike NSLP, commodity food assistance is not a formal part of SBP funding; however, commodities provided through NSLP may be used for school breakfasts as well."], "subsections": []}]}, {"section_title": "Other Child Nutrition Programs", "paragraphs": ["In addition to the school meals programs discussed above, other federal child nutrition programs provide federal subsidies and commodity food assistance for schools and other institutions that offer meals and snacks to children in early childhood, summer, and after-school settings. This assistance is provided to (1) schools and other governmental institutions, (2) private for-profit and nonprofit child care centers, (3) family/group day care homes, and (4) nongovernmental institutions/organizations that offer outside-of-school programs for children. (Although this report focuses on the programs that serve children, one child nutrition program (CACFP) also serves day care centers for chronically impaired adults and elderly persons under the same general per-meal/snack subsidy terms.) The programs in the sections to follow serve comparatively fewer children and spend comparatively fewer federal funds than the school meal programs. "], "subsections": [{"section_title": "Child and Adult Care Food Program (CACFP)", "paragraphs": ["CACFP subsidizes meals and snacks served in early childhood, day care, and after-school settings. CACFP provides subsidies for meals and snacks served at participating nonresidential child care centers, family day care homes, and (to a lesser extent) adult day care centers. The program also provides assistance for meals served at after-school programs. CACFP reimbursements are available for meals and snacks served to children age 12 or under, migrant children age 15 or under, children with disabilities of any age, and, in the case of adult care centers, chronically impaired and elderly adults. Children in early childhood settings are the overwhelming majority of those served by the program. ", "CACFP provides federal reimbursements for breakfasts, lunches, suppers, and snacks served in participating centers (facilities or institutions) or day care homes (private homes). The eligibility and funding rules for CACFP meals and snacks depend first on whether the participating institution is a center or a day care home (the next two sections discuss the rules specific to centers and day care homes). According to FY2017 CACFP data, child care centers have an average daily attendance of about 56 children per center, day care homes have an average daily attendance of approximately 7 children per home, and adult day care centers typically care for an average of 48 chronically ill or elderly adults per center. ", "Providers must demonstrate that they comply with government-established standards for other child care programs. Like in school meals, federal assistance is made up overwhelmingly of cash reimbursements calculated based on the number of meals/snacks served and federal per-meal/snack reimbursements rates, but a far smaller share of federal aid (4.3% in FY2017) is in the form of federal USDA commodity foods (or cash in lieu of foods). Federal CACFP reimbursements flow to individual providers either directly from the administering state agency (this is the case with many child/adult care centers able to handle their own CACFP administrative functions) or through \"sponsors\" who oversee and provide administrative support for a number of local providers (this is the case with some child/adult care centers and with all day care homes). ", "In FY2017, total CACFP spending was over $3.5 billion, including cash reimbursement, commodity food assistance, and costs for sponsor audits. (See Table 3 for a further breakdown of CACFP costs.) This total also includes the after-school meals and snacks provided through CACFP's \"at-risk after-school\" pathway; this aspect of the program is discussed later in \" After-School Meals and Snacks: CACFP,\u00a0NSLP Options .\""], "subsections": [{"section_title": "CACFP Nutrition Standards", "paragraphs": ["As with school foods, the HHFKA required USDA to update CACFP's meal patterns. USDA's final rule revised the meal patterns for both meals served in child care centers and day care homes, as well as preschool meals served through the NSLP and SBP, effective October 1, 2017. For infants (under 12 months of age), the new meal patterns eliminated juice, supported breastfeeding, and set guidelines for the introduction of solid foods, among other changes. For children ages one and older, the new meal patterns increased whole grains, fruits and vegetables, and low-fat and fat-free milk; limited sugar in cereals and yogurts; and prohibited frying, among other requirements. "], "subsections": []}, {"section_title": "CACFP at Centers", "paragraphs": [], "subsections": [{"section_title": "Participation", "paragraphs": ["Child care centers in CACFP can be (1) public or private nonprofit centers, (2) Head Start centers, (3) for-profit proprietary centers (if they meet certain requirements as to the proportion of low-income children they enroll), and (4) shelters for homeless families. Adult day care centers include public or private nonprofit centers and for-profit proprietary centers (if they meet minimum requirements related to serving low-income disabled and elderly adults). In FY2017, over 65,000 child care centers with an average daily attendance of over 3.6 million children participated in CACFP. Over 2,700 adult care centers served nearly 132,000 adults through CACFP. "], "subsections": []}, {"section_title": "Eligibility and Administration", "paragraphs": ["Participating centers may receive daily reimbursements for up to either two meals and one snack or one meal and two snacks for each participant, so long as the meals and snacks meet federal nutrition standards. ", "The eligibility rules for CACFP centers largely track those of NSLP: children in households at or below 130% of the current poverty line qualify for free meals/snacks while those between 130% and 185% of poverty qualify for reduced-price meals/snacks (see Table 2 ). In addition, participation in the same categorical eligibility programs as NSLP as well as foster child status convey eligibility for free meals in CACFP. Like school meals, eligibility is determined through paper applications or direct certification processes.", "Like school meals, all meals and snacks served in the centers are federally subsidized to some degree, even those that are paid. Different reimbursement amounts are provided for breakfasts, lunches/suppers, and snacks, and reimbursement rates are set in law and indexed for inflation annually. The largest subsidies are paid for meals and snacks served to participants with family income below 130% of the federal poverty income guidelines (the income limit for free school meals), and the smallest to those who have not met a means test. See Table B -5 for current CACFP center reimbursement rates. ", "Unlike school meals, CACFP institutions are less likely to collect per-meal payments. Although federal assistance for day care centers differentiates by household income, centers have discretion on their pricing of meals. Centers may adjust their regular fees (tuition) to account for federal payments, but CACFP itself does not regulate these fees. In addition, centers can charge families separately for meals/snacks, so long as there are no charges for children meeting free-meal/snack income tests and limited charges for those meeting reduced-price income tests.", "Independent centers are those without sponsors handling administrative responsibilities. These centers must pay for administrative costs associated with CACFP out of nonfederal funds or a portion of their meal subsidy payments. For centers with sponsors, the sponsors may retain a proportion of the meal reimbursement payments they receive on behalf of their centers to cover such costs. "], "subsections": []}]}, {"section_title": "CACFP for Day Care Homes", "paragraphs": [], "subsections": [{"section_title": "Participation", "paragraphs": ["CACFP-supported day care homes serve a smaller number of children than CACFP-supported centers , both in terms of the total number of children served and the average number of children per facility. Roughly 17% of children in CACFP (approximately 757,000 in FY2017 average daily attendance) are served through day care homes. In FY2017, approximately 103,000 homes (with just over 700 sponsors) received CACFP support."], "subsections": []}, {"section_title": "Eligibility and Reimbursement", "paragraphs": ["As with centers, payments to day care homes are provided for up to either two meals and one snack or one meal and two snacks a day for each child. Unlike centers, day care homes must participate under the auspices of a public or, more often, private nonprofit sponsor that typically has 100 or more homes under its supervision. CACFP day care home sponsors receive monthly administrative payments based on the number of homes for which they are responsible. ", "Federal reimbursements for family day care homes differ by the home's status as \"Tier I\" or \"Tier II.\" Unlike centers, day care homes receive cash reimbursements (but not commodity foods) that generally are not based on the child participants' household income. Instead, there are two distinct, annually indexed reimbursement rates that are based on area or operator eligibility criteria", "Tier I homes are located in low-income areas (defined as areas in which at least 50% of school-age and enrolled children qualify for free or reduced-price meals) or operated by low-income providers whose household income meets the free or reduced-price income standards. They receive higher subsidies for each meal/snack they serve. Tier II (lower) rates are by default those for homes that do not qualify for Tier I rates; however, Tier II providers may seek the higher Tier I subsidy rates for individual low-income children for whom financial information is collected and verified. (See Table B-6 for current Tier I and Tier II reimbursement rates.)", "Additionally, HHFKA introduced a number of additional ways (as compared to prior law) by which family day care homes can qualify as low-income and get Tier I rates for the entire home or for individual children. ", "As with centers, there is no requirement that meals/snacks specifically identified as free or reduced-price be offered; however, unlike centers, federal rules prohibit any separate meal charges. "], "subsections": []}]}]}, {"section_title": "Summer Meals", "paragraphs": ["Current law SFSP and the NSLP/SBP Seamless Summer Option provide meals in congregate settings nationwide; the related Summer Electronic Benefits Transfer (SEBTC or Summer EBT) demonstration project is an alternative to congregate settings. "], "subsections": [{"section_title": "Summer Food Service Program (SFSP)", "paragraphs": ["SFSP supports meals for children during the summer months. The program provides assistance to local public institutions and private nonprofit service institutions running summer youth/recreation programs, summer feeding projects, and camps. Assistance is primarily in the form of cash reimbursements for each meal or snack served; however, federally donated commodity foods are also offered. Participating service institutions are often entities that provide ongoing year-round service to the community including schools, local governments, camps, colleges and universities in the National Youth Sports program, and private nonprofit organizations like churches. ", "Similar to the CACFP model, sponsors are institutions that manage the food preparation, financial, and administrative responsibilities of SFSP. Sites are the places where food is served and eaten. At times, a sponsor may also be a site. State agencies authorize sponsors, monitor and inspect sponsors and sites, and implement USDA policy. Unlike CACFP, sponsors are required for an institution's participation in SFSP as a site."], "subsections": [{"section_title": "Participation", "paragraphs": ["In FY2017, nearly 5,500 sponsors with 50,000 food service sites participated in the SFSP and served an average of approximately 2.7 million children daily (according to July data). ", "Participation of sites and children in SFSP has increased in recent years. Program costs for FY2017 totaled over $485 million, including cash assistance, commodity foods, administrative cost assistance, and health inspection costs."], "subsections": []}, {"section_title": "Eligibility and Administration", "paragraphs": ["There are several options for eligibility and meal/snack service for SFSP sponsors (and their sites)", "Open sites provide summer food to all children in the community. These sites are certified based on area eligibility measures, where 50% or more of area children have family income that would make them eligible for free or reduced-price school meals (see Table 2 ). Closed or Enrolled sites provide summer meals/snacks free to all children enrolled at the site. The eligibility test for these sites is that 50% or more of the children enrolled in the sponsor's program must be eligible for free or reduced-price school meals based on household income. Closed/enrolled sites may also become eligible based on area eligibility measures noted above. Summer camps (that are not enrolled sites) receive subsidies only for those children with household eligibility for free or reduced-price school meals. Other programs specified in law , such as the National Youth Sports Program and centers for homeless or migrant children. ", "Summer sponsors get operating cost (food, storage, labor) subsidies for all meals/snacks they serve\u2014up to one meal and one snack, or two meals per child per day. In addition, sponsors receive payments for administrative costs, and states are provided with subsidies for administrative costs and health and meal-quality inspections. See Table B -7 for current SFSP reimbursement rates. Actual payments vary slightly (e.g., by about 5 cents for lunches) depending on the location of the site (e.g., rural vs. urban) and whether meals are prepared on-site or by a vendor."], "subsections": []}]}, {"section_title": "School Meals' Seamless Summer Option64", "paragraphs": ["Although SFSP is the child nutrition program most associated with providing meals during summer months, it is not the only program option for providing these meals and snacks. The Seamless Summer Option, run through NSLP or SBP programs, is also a means through which food can be provided to students during summer months. Much like SFSP, Seamless Summer operates in summer sites (summer camps, sports programs, churches, private nonprofit organizations, etc.) and for a similar duration of time. Unlike SFSP, schools are the only eligible sponsors , although schools may operate the program at other sites. Reimbursement rates for Seamless Summer meals are the same as current NSLP/SBP rates. "], "subsections": []}, {"section_title": "Summer EBT for Children Demonstration", "paragraphs": ["Beginning in summer 2011 and (as of the date of this report) each summer since, USDA-FNS has operated Summer Electronic Benefit Transfer for Children (SEBTC or \"Summer EBT\") demonstration projects in a limited number of states and Indian Tribal Organizations (ITOs). These Summer EBT projects provide electronic food benefits over summer months to households with children eligible for free or reduced-price school meals. Depending on the site and year, either $30 or $60 per month is provided, through a WIC or SNAP EBT card model. In the demonstration projects, these benefits were provided as a supplement to the Summer Food Service Program (SFSP) meals available in congregate settings.", "Summer EBT and other alternatives to congregate meals through SFSP were first authorized and funded by the FY2010 appropriations law ( P.L. 111-80 ). Although a number of alternatives were tested and evaluated, findings from Summer EBT were among the most promising, and Congress provided subsequent funding. Summer EBT evaluations showed significant impacts on reducing child food insecurity and improving nutritional intake. \u00a0Summer EBT was funded by P.L. 111-80 in the summers from 2011 to 2014. Projects have continued to operate and were annually funded by FY2015-FY2018 appropriations; most recently, the FY2018 appropriations law ( P.L. 115-141 ) provided $28 million. According to USDA-FNS, in summer 2016 Summer EBT served over 209,000 children in nine states and two tribal nations\u2014an increase from the 11,400 children served when the demonstration began in summer 2011. "], "subsections": []}]}, {"section_title": "Special Milk Program (SMP)", "paragraphs": ["Schools (and institutions like summer camps and child care facilities) that are not already participating in the other child nutrition programs can participate in the Special Milk Program. Schools may also administer SMP for their part-day sessions for kindergartners or pre-kindergartners.", "Under SMP, participating institutions provide milk to children for free and/or at a subsidized paid price, depending on how the enrolled institution opts to administer the program (see Table B -8 for current Special Milk reimbursement rates for each of these options)", "An institution that only sells milk will receive the same per-half pint federal reimbursement for each milk sold (approximately 20 cents). An institution that sells milk and provides free milk to eligible children (income eligibility is the same as free school meals, see Table 2 ), receives a reimbursement for the milk sold (approximately 20 cents) and a higher reimbursement for the free milks. An institution that does not sell milk provides milk free to all children and receives the same reimbursement for all milk (approximately 20 cents). This option is sometimes called nonpricing.", "In FY2017, over 41 million half-pints were subsidized, 9.5% of which were served free. Federal expenditures for this program were approximately $8.3 million in FY2017. "], "subsections": []}, {"section_title": "Fresh Fruit and Vegetable Program (FFVP)", "paragraphs": ["States receive formula grants through the Fresh Fruit and Vegetable Program, under which state-selected schools receive funds to purchase and distribute fresh fruit and vegetable snacks to all children in attendance (regardless of family income). Money is distributed by a formula under which about half the funding is distributed equally to each state and the remainder is allocated by state population. States select participating schools (with an emphasis on those with a higher proportion of low-income children) and set annual per-student grant amounts (between $50 and $75). ", "Funding is set by law at $150 million for school year 2011-2012 and inflation-indexed for every year after. In FY2017, states used approximately $184 million in FFVP funds. FFVP is funded by a mandatory transfer of funds from USDA's Section 32 program\u2014a permanent appropriation of 30% of the previous year's customs receipts. This transfer is required by FFVP's authorizing laws (Section 19 of the Richard B. Russell National School Lunch Act and Section 4304 of P.L. 110-246 ). Up until FY2018's law, annual appropriations laws delayed a portion of the funds to the next fiscal year.", "After a pilot period, the Child Nutrition and WIC Reauthorization Act of 2004 ( P.L. 108-265 ) permanently authorized and funded FFVP for a limited number of states and Indian reservations. In recent years, FFVP has been amended by omnibus farm bill laws rather than through child nutrition reauthorizations. The 2008 farm bill ( P.L. 110-246 ) expanded FFVP's mandatory funding, specifically providing funds through Section 32, and enabled all states to participate in the program. The 2014 farm bill ( P.L. 113-79 ) essentially made no changes to this program but did include, and fund at $5 million in FY2014, a pilot project that requires USDA to test offering frozen, dried, and canned fruits and vegetables and publish an evaluation of the pilot. Four states (Alaska, Delaware, Kansas, and Maine) participated in the pilot in SY2014-2015 and the evaluation was published in 2017. Other proposals to expand fruits and vegetables offered in FFVP have been introduced in both the 114 th and 115 th Congress."], "subsections": []}]}, {"section_title": "Other Topics", "paragraphs": [], "subsections": [{"section_title": "After-School Meals and Snacks: CACFP, NSLP Options", "paragraphs": ["Two of the child nutrition programs discussed in previous sections, the National School Lunch Program (NSLP) and Child and Adult Care Food Program (CACFP), provide federal support for snacks and meals served during after-school programs. ", "NSLP provides reimbursements for after-school snacks; however, this option is open only to schools that already participate in NSLP. These schools may operate after-school snack-only programs during the school year, and can do so in two ways: (1) if low-income area eligibility criteria are met, provide free snacks in lower-income areas; or (2) if area eligibility criteria are not met, offer free, reduced-price, or fully paid-for snacks, based on household income eligibility (like lunches in NSLP). The vast majority of snacks provided through this program are through the first option. Through this program, approximately 206 million snacks were served in FY2017 (a daily average of nearly 1.3 million). This compares with nearly 4.9 billion lunches served (a daily average of 27.8 million).", "CACFP provides assistance for after-school food in two ways. First, centers and homes that participate in CACFP and provide after-school care may participate in traditional CACFP (the eligibility and administration described earlier). Second, centers in areas where at least half the children in the community are eligible for free or reduced-price school meals can opt to participate in the CACFP At-Risk Afterschool program, which provides free snacks and suppers. Expansion of the At-Risk After-School meals program was a major policy change included in HHFKA. Prior to the law, 13 states were permitted to offer CACFP At-Risk After-School meals (instead of just a snack); the law allowed all CACFP state agencies to offer such meals. In FY2017, the At-Risk Afterschool program served a total of approximately 242.6 million free meals and snacks to a daily average of more than 1.7 million children. "], "subsections": []}, {"section_title": "Related Programs, Initiatives, and Support Activities", "paragraphs": ["Federal child nutrition laws authorize and program funding supports a range of additional programs, initiatives, and activities. ", "Through State Administrative Expenses funding, states are entitled to federal grants to help cover administrative and oversight/monitoring costs associated with child nutrition programs. The national amount each year is equal to about 2% of child nutrition reimbursements. The majority of this money is allocated to states based on their share of spending on the covered programs; about 15% is allocated under a discretionary formula granting each state additional amounts for CACFP, commodity distribution, and Administrative Review efforts. In addition, states receive payments for their role in overseeing summer programs (about 2.5% of their summer program aid). States are free to apportion their federal administrative expense payments among child nutrition initiatives (including commodity distribution activities) as they see fit, and appropriated funding is available to states for two years. State Administrative Expense spending in FY2017 totaled approximately $279 million.", "Team Nutrition is a USDA-FNS program that includes a variety of school meals initiatives around nutrition education and the nutritional content of the foods children eat in schools. This includes Team Nutrition Training Grants, which provide funding to state agencies for training and technical assistance, such as help implementing USDA's nutrition requirements and the Dietary Guidelines for Americans. From 2004 to 2018, Team Nutrition also included the HealthierUS Schools Challenge (HUSSC), which originated in the 2004 reauthorization of the Child Nutrition Act. HUSSC was a voluntary certification initiative designed to recognize schools that have created a healthy school environment through the promotion of nutrition and physical activity. ", "Farm-to-school programs broadly refer to \"efforts that bring regionally and locally produced foods into school cafeterias,\" with a focus on enhancing child nutrition. The goals of these efforts include increasing fruit and vegetable consumption among students, supporting local farmers and rural communities, and providing nutrition and agriculture education to school districts and farmers. HHFKA amended existing child nutrition programs to establish mandatory funding of $5 million per year for competitive farm-to-school grants that support schools and nonprofit entities in establishing farm-to-school programs that improve a school's access to locally produced foods. The FY2018 appropriations law provided an additional $5 million in discretionary funding to remain available until expended. Grants may be used for training, supporting operations, planning, purchasing equipment, developing school gardens, developing partnerships, and implementing farm-to-school programs. USDA's Office of Community Food Systems provides additional resources on farm-to-school issues. ", "Through an Administrative Review process (formerly referred to as Coordinated Review Effort (CRE)), USDA-FNS, in cooperation with state agencies, conducts periodic on-site NSLP school compliance and accountability evaluations to improve management and identify administrative, subsidy claim, and meal quality problems. State agencies are required to conduct administrative reviews of all school food authorities (SFAs) that operate the NSLP under their jurisdiction at least once during a three-year review cycle. Federal Administrative Review expenditures were approximately $9.9 million in FY2017. ", "USDA-FNS and state agencies conduct many other child nutrition program support activities for which dedicated funding is provided. Among other examples, there is the Institute of Child Nutrition (ICN), which provides technical assistance, instruction, and materials related to nutrition and food service management; it receives $5 million a year in mandatory funding appropriated in statute. ICN is located at the University of Mississippi. USDA-FNS provides training on food safety education. Funding is also provided for USDA-FNS to conduct studies, provide training and technical assistance, and oversee payment accuracy. ", "Appendix A. Acronyms Used in This Report ", "Appendix B. Per-meal or Per-snack Reimbursement Rates for Child Nutrition Programs", "This appendix lists the specific reimbursement rates discussed in the earlier sections of the report. Reimbursement rates are adjusted for inflation for each school or calendar year according to terms laid out in the programs' authorizing laws. Each year, the new rates are announced in the Federal Register . "], "subsections": []}]}]}}
{"id": "R45493", "title": "The World Oil Market and U.S. Policy: Background and Select Issues for Congress", "released_date": "2019-04-23T00:00:00", "summary": ["The United States, as the largest consumer and producer of oil, plays a major role in the world market. Policy decisions can affect the price of oil and petroleum products (e.g., gasoline) for U.S. consumers and companies operating in U.S. oil production, transportation, and refining sectors. Congress considers policies that can affect the world oil market, including trade, sanctions, protection of trade routes, the Strategic Petroleum Reserve (SPR), and alternative fuel standards.", "Technological advancements, supportive policies, and other aspects of the U.S. oil industry have reversed a multidecade downward trend in U.S. oil production. In 2018, U.S. oil production nearly doubled compared to 2008. The United States is also the number one consumer of crude oil and refined petroleum products in the world. The pricing of crude oil contributes to the price consumers pay for petroleum products in the United States.", "Congress has maintained an interest in oil policy. Following the 1973 Organization of Arab Petroleum Exporting Countries (OAPEC) oil embargo, Congress passed the Energy Policy and Conservation Act of 1975 (EPCA; P.L. 94-163). In response to rapid price escalation and perceived scarcity, the EPCA, among many other things, restricted U.S. produced crude oil exports. As the oil sector evolved, Congress has amended the EPCA. The Consolidated Appropriations Act, 2016 (P.L. 114-113) repealed Section 103 of the EPCA removing any restrictions to crude oil exports.", "Supply, demand, price, and other factors all combine and interact with one another to create the world oil market. Saudi Arabia, historically, has been the world's leading oil producer and along with the Organization of the Petroleum Exporting Counties (OPEC) has held enough spare capacity to influence global oil supply and prices. World oil demand typically follows world economic conditions. Oil prices are set in the world market and are primarily a function of supply and demand fundamentals, but also a number of other factors, such as quality, location, and transport infrastructure availability (e.g., pipelines). While the world oil market historically follows the world economy, supply generally does not follow demand smoothly and this results in price volatility. As economies grow, so too does the demand for crude oil and petroleum products, including fuels, paints, lubricants, and plastics. China and India are forecasted by the International Energy Agency (IEA) to contribute a large portion of oil demand growth, representing around 20% of total world demand by 2023. Asia, by IEA's forecast, will remain a net importer of crude oil through 2023.", "Oil policy can be influential as a response to or in anticipation of undesirable international behavior or as a means to bring balance and stability to an otherwise volatile market. OPEC, especially in conjunction with other major producers (e.g., Russia), can exert influence on the oil market. Several bills introduced in the 115th Congress addressed the U.S. relationship with OPEC, such as the No Oil Producing and Exporting Cartels (NOPEC) Act of 2018 (H.R. 5904 and S. 3214). The United States has utilized the oil market as a political tool. National oil companies (NOCs) operate under government ownership or are companies under influence by national governments. The United States, by placing sanctions on crude oil and crude oil-related industries, can send a message to those governments (e.g., Iran). Physical threats to oil supply still exist, particularly along certain trade routes. For instance, roughly 24% of the world oil market transited the Strait of Hormuz in the first half of 2018. A disruption to world supply along trade routes could permeate into geopolitical relationships, secondary industries (e.g., petrochemicals, agriculture), and the economy at large.", "The United States plays a multifaceted role in the world oil market, which may affect policy decisions for Congress. Congress has in the past enacted legislation to promote a stable, reliable supply of oil. For example, the EPCA created the SPR and established the Corporate Average Fuel Economy (CAFE) standard for vehicles, in part, as strategies to reduce U.S. exposure to future supply disruptions. Additionally, Congress has enacted legislation to diversify transportation fuels, including tax credits for electric vehicles and the Renewable Fuel Standard. As the oil market continues to evolve, Congress may want to consider these and other major policy options that could include international trade policies, infrastructure, diversification of transportation fuels, and funding in research and development."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The international oil market has influenced U.S. domestic and foreign policy decisions for decades. The United States plays a significant role in the world oil market, not only as the top consumer of crude oil and petroleum products, but also as the largest producer. The U.S. Energy Information Administration (EIA) estimated that the United States surpassed Russia and Saudi Arabia as the world's number one crude oil producer in 2018. U.S. production is at an all-time high as a result of technological advancements and policy. Despite the recent surge in U.S. oil production, the United States remained a net importer of oil in 2018. ", "Oil availability associates with energy independence and energy security more than any other fuel. Supply, demand, the strength of currencies, and other factors link crude oil to the world market to determine the price. Because the United States is a top consumer and producer of oil, it has the ability to influence this world market. Trade agreements, regulation, sanctions, and unpredictable events all contribute to the flow of oil in the world market. Congress may consider policies that affect the world oil market, including sanctions, alternative fuel standards, emission controls, use of electric vehicles, and protection of international trade routes. ", "This report provides an introduction to the U.S. and world oil markets, with an overview of supply and demand, price considerations, and trade flows. The report also includes analysis on selected examples of international conditions that in the past have affected policy decisions in the United States. This report does not focus on trade associated with the entire crude oil and petroleum product value chain, the history of imports and exports, or provide an in-depth country trade balance analysis. The potential impacts of the world oil market on the climate and the environment are not within the scope of this report."], "subsections": []}, {"section_title": "U.S. Oil Market", "paragraphs": ["The United States has abundant reserves of various natural resources, including crude oil in both conventional and unconventional deposits, such as shale. Technological advancements and new policies have changed the outlook for oil production in the United States from perceived scarcity to abundance. The United States, both the top oil producer and the world's greatest consumer of crude oil and petroleum products (e.g., gasoline), remains a net oil importer. "], "subsections": [{"section_title": "U.S. Supply", "paragraphs": ["The availability of the crude oil resource and more specifically the \"proved\" reserves limits the economic production, or supply. Proved reserves are identified, undeveloped resources in the ground that are both technically and economically recoverable under existing economic and operating conditions. This measurement can fluctuate depending on a number of factors such as technology costs, new discoveries, and local and international oil prices. ", "By the end of 2017, the United States had 39.2 billion barrels of proved reserves of oil, according to the U.S. Energy Information Administration (EIA). U.S. oil production has seen steady growth through the deployment of new oil extraction technologies. Production nearly doubled from around 5 million barrels per day (Mb/d) in 2008 to just over 10 Mb/d in 2018. In a world context, in September 2018, the EIA estimated that the United States surpassed Russia and Saudi Arabia as the number one crude oil producer. ", "In 2018, nearly 3 Mb/d of U.S. crude oil production came from shale formations within the Permian basin, located in west Texas and southeastern New Mexico. The United States produces primarily light, sweet crude oil. In 2017, light, sweet crude oil accounted for over half of all U.S. production, primarily from the Bakken shale formation in North Dakota and Montana and the Permian Basin. ", "Hydraulic fracturing and horizontal drilling technologies largely drove the production growth of the past decade. Hydraulic fracturing allows crude oil trapped inside \"tight\" rock formations to be released. Fluid forced under high pressure into the formation fractures it, creating fissures through which the oil can flow. Horizontal drilling requires a single vertical wellbore at the surface and then drills out horizontally underground across numerous points of extraction. The use of these technologies has raised environmental concerns, particularly involving possible ground water contamination and earthquakes. "], "subsections": []}, {"section_title": "U.S. Demand", "paragraphs": ["The United States is the number one consumer of crude oil and refined petroleum products such as gasoline, diesel fuel, and aviation fuel. As Table 1 indicates, crude oil is both a raw ingredient for transportation fuels and a petrochemical feedstock to produce heating oil, lubricants, and other products. Due to this versatility, the price and supply of crude oil can directly affect other industries. ", " Figure 1 shows that U.S. crude oil and petroleum product supplied in 2017 was on average 19.96 Mb/d\u2014which was 20% of total world consumption. According to EIA, consumption is inferred from measurements of products supplied. Domestic crude oil production in 2017 was 9.35 Mb/d. While the United States is at record levels of production, current U.S. production is not meeting U.S. consumption. This supply/demand gap is filled by imports (a constant, but sometimes not dependable source), natural gas liquids, and, if necessary, drawing down commercial crude oil stockpiles or from the Strategic Petroleum Reserve. ", "The demand for crude oil and petroleum products links closely to economic conditions. Consumers use petroleum products for everyday needs, such as driving, making crude oil and petroleum products relatively inelastic. While the economy is often a reliable driver of petroleum product consumption, so too is policy. In 2007, Congress passed the Energy Independence and Security Act ( P.L. 110-140 ), which directed the National Highway Traffic Safety Administration to promulgate new fuel economy standards to increase vehicle fleet efficiency. These standards demonstrate how federal policy choices can influence crude oil consumption in transportation."], "subsections": []}, {"section_title": "U.S. Prices", "paragraphs": ["Several different characteristics of oil determine the price of crude oil. Crude oil quality is one factor that determines a price. Lighter, sweeter crude oil prices, for example, are generally higher than heavy, sour crudes oils, because refineries (see textbox about refineries above) use lighter, sweeter crude oils to produce higher-value petroleum products, such as gasoline and diesel fuel. ", "The spot price and future price are other ways to measure the price of crude oils. The spot market (i.e., where assets are traded for immediate delivery) has a benchmark representing trade of that crude oil. In the United States, the most commonly referenced benchmark is known as West Texas Intermediate or WTI. This benchmark is the price at which oil is traded on the spot market in Cushing, OK. Several world crude oils serve as price benchmarks for other crude oils. Other world reference price benchmarks for crude oil include Brent (Europe) and Dubai Crude. These price benchmarks often differ from one another (known as a spread) and reflect the varying type and quality of the oil, regional market conditions, infrastructure limitations, and transportation costs. ", "Crude oil prices commonly reported in newspapers are those of crude oil futures tied to a benchmark. Futures deal in the trade using contracts for the future delivery of oil, known as the futures market. The oil futures market provides customers the opportunity to hedge risk from price volatility, by contracting a price for production in the future. ", "The pricing of crude oil contributes to the price consumers pay for petroleum products in the United States. Gasoline, for example, closely follows the trends in WTI and Brent. As illustrated by Figure 2 , with the costs of refining, distribution, and taxes relatively stable, changes in crude price drive changes in gasoline price.", "The Permian Basin produces a significant amount of light, sweet crude at relatively low cost, because of its unique geologic structure. At the Permian Basin, according to the EIA, \"operators can continue to drill through several tight oil layers and increase production even with sustained West Texas Intermediate (WTI) crude oil prices below $50 per barrel (bbl).\" While also cost competitive, production from the Bakken and Eagle Ford (south Texas) formations may be more economic with sustained prices above $50/bbl (at 2018 infrastructure, market, technology, and cost conditions). In 2017, WTI crude oil averaged $50.80/bbl, down from an average of $99.67/bbl in 2008."], "subsections": []}, {"section_title": "U.S. Oil Trade", "paragraphs": ["The 1970s began the era of limited oil availability and rising oil prices. Following the 1973 Organization of Arab Petroleum Exporting Countries (OAPEC) oil embargo, Congress passed the Energy Policy and Conservation Act of 1975 (EPCA; P.L. 94-163 ). The EPCA, among many other things, restricted U.S. produced crude oil exports. Since its passage, crude oil exports occurred only in certain circumstances. For example, in 1985, President Reagan found it in the national interest to lift export restrictions on U.S. produced crude oil to Canada, following Canada's decision to remove price and volume controls on exports to the United States. ", "The oil sector in the United States has gone through several transformations since the 1970s. Trade policy with respect to oil has undergone significant changes in recent years to accommodate technological and world developments. U.S. crude oil and petroleum product gross imports have declined from average all-time highs of over 13 Mb/d in 2005 to 10 Mb/d average in 2017 ( Figure 3 ). As the U.S. oil market moved toward higher production levels, policies that were put in place during a time of rapidly rising prices and perceived resource scarcity came into question. Consequently, in December 2015, Congress passed the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ), which repealed Section 103 of the EPCA ( P.L. 94-163 ), removing any restrictions to crude oil exports. ", "Crude oil and petroleum product imports from Canada have steadily increased since the 1980s. The United States, in 2017, imported roughly 4 Mb/d (or 40% of all U.S. crude oil and petroleum product imports) on average from Canada. In 2013, Canada surpassed the Organization of the Petroleum Exporting Countries (OPEC) as the number one supplier to the United States (see Figure 3 ). Much of Canada's crude oil exports go to the United States. If imports from Canada continue to grow, infrastructure demands will increase. According to the EIA, over half of Canada's production comes from oil sands (a gritty, semisolid form of petroleum) that, once separated from the sand and clay, is a heavy, viscous crude oil. A majority of Canada's crude oils usually end up in the Midwest due to pipeline capacity limitations to the Gulf of Mexico. ", "As mentioned above, not all crude oils are the same and refineries generally process different types of crude oil. In the United States, over half of all crude oil produced is light and sweet, while much of the U.S. refinery capacity processes heavy, sour crude oil grades. Prior to 2015, light, sweet crude oils were discounted domestically, sometimes by as much as $30/bbl, because of infrastructure constraints. With export restrictions removed, producers are now able to sell crude oil to the world market, not eliminating the discount, but lowering it.", "While U.S crude oil and petroleum product imports are declining, exports are breaking records. The EIA estimates that the United States exported around 7 Mb/d of crude oil and products combined in 2018 ( Figure 4 ). EIA further projects that, in most modeling cases, the United States will become a net petroleum exporter around 2030. As Figure 4 indicates, from 2017 to 2018, gross imports remained constant while exports increased, reducing net imports. Top destinations for U.S. crude oil and petroleum product exports include Mexico, Canada, China, Brazil, and Japan. According to EIA data, these five countries received about half of all U.S. oil exports in 2017. On average, Mexico imported 1 Mb/d of U.S. crude oil and petroleum products in 2017 (nearly double from 2013 levels), due to Mexico's decreased production coupled with rising demand. Mexico has not kept up refining to meet domestic demand. In 2016, Mexico became a net oil importer from the United States for the first time. U.S. gasoline exports in 2018 were more than half of Mexico's gasoline consumption."], "subsections": []}]}, {"section_title": "World Oil Market", "paragraphs": ["In general, the world oil market determines the price and supply of oil and petroleum products for U.S. consumers, which may impact policy decisions by Congress. In January 2019, the World Bank projected world gross domestic product growth of 2.9% in 2019 and 2.8% in 2020-2021. As developing economies grow, so too does their demand for fuel and consumer goods, including paints, lubricants, and plastics\u2014many dependent on crude oil. Meanwhile, many countries are also trying to reduce greenhouse gas emissions, diversify their fuel mix, and enhance energy security and independence. ", "The world oil market historically follows the world economy as it grows or declines. Supply generally does not follow demand smoothly, and this results in price volatility. For example, supply bottlenecks can constrain open trade, which can conflate prices and access. The Government of Alberta instituted a crude oil curtailment policy in January 2019, as crude producers faced export infrastructure bottlenecks. The inability to export excess production had caused storage to increase to 35 million barrels of crude oil (nearly double the historical amount) for the Canadian province. Further, prices declined during this period of overproduction to $11.43/bbl from $58.49. ", "In addition to economic growth or decline, the world oil supply is influenced by a number of drivers, including project investments, the price of oil, demand forecasts, and geopolitics. Oil producers attempt to match world demand projections by making new production investments and replacing exhausted or uncompetitive production sites."], "subsections": [{"section_title": "World Supply", "paragraphs": ["The EIA estimated the world's proved reserves in 2017 at approximately 1,645 billion barrels of oil. The world supplied approximately 98 Mb/d of petroleum and other liquids; this equates to roughly 50 years of production at 2017 levels. As noted above, proved reserves incorporates crude oil prices, domestic fiscal conditions, geology, and the technology available to economically produce from the reserve base. Often suppliers make decisions to maximize revenue without causing a corresponding decrease in demand. Similarly, volatility in oil prices can create swings in revenue that can disrupt or enable development plans among producers. Venezuela, according to EIA, holds the world's largest proved reserves at 301 billion barrels of oil in 2017, followed by Saudi Arabia (266 billion barrels) and Canada (170 billion barrels).", "Proved reserves do not necessarily correlate with production levels. Venezuela, for example, has significantly decreased its crude oil production (due in part to a lack of investment and other contributing factors) while the United States has become the number one producer. The EIA estimated that the United States surpassed Russia and Saudi Arabia as the world's number one crude oil producer in 2018. National oil companies (NOCs) dominate Russian and Saudi Arabian oil production. NOCs operate under government ownership or are companies under influence by national governments. In contrast, oil companies in the U.S. private sector operate autonomously. ", "Saudi Arabia, historically the world's leading oil producer and a member of OPEC, has held enough spare capacity to influence the market when it has deemed it necessary. In September 2018, Saudi Arabia held an estimated 1.5 Mb/d of crude oil spare capacity, or 72% of world spare capacity. Spare capacity allows for swift adjustments to crude oil output that can affect the world oil market.", "OPEC, through crude oil policy decisions, can influence the world's oil supply and as a result crude oil prices. OPEC is an organization of oil-producing nations that together represent nearly 40% of world oil production (see Figure 5 ). Saudi Arabia, a founding member of OPEC, holds the largest share of OPEC production. Although not an OPEC member, Russia recently has coordinated with OPEC on oil supply decisions, which can have a profound effect on the world market. For example, Russia is a participating country to the Declaration of Cooperation, an agreement between OPEC and non-OPEC countries to adjust world oil market production. ", "OPEC countries, particularly Saudi Arabia, often maintain varying levels of spare oil capacity. Those with the greatest spare capacity may be referred to as \"swing producers,\" as they may have the ability to more easily influence the oil market. Swing producers may use their spare capacity to bring balance to an often unstable market, but also may have the power to manipulate the price of oil by either flooding the market (causing downward pressure on price) or by reducing supply (resulting in an increase in price). ", "While OPEC dominates oil production, other non-OPEC countries will gain market share contributing to world supply growth through 2023. The International Energy Agency (IEA) estimates that the United States, Brazil, and Canada will provide the majority of world supply growth. Iraq, Iran, Norway, the United Arab Emirates, and Libya also are expected to contribute to oil supply growth through 2023, but to a smaller degree. Total non-OPEC supply growth is expected to increase by 5.2 Mb/d by 2023, accounting for 81% of 6.4 Mb/d of total world oil capacity growth during this period. ", "While the EIA projects the United States, Brazil, and Canada to drive supply growth through 2023, a number of other countries may experience production declines. China, Mexico, and Venezuela have seen comparatively lower production for the past three years as a result of lower investments and other contributing factors. Venezuelan crude oil production has trended downward since 1998 from approximately 3.4 Mb/d to 2 Mb/d in 2018, with IEA forecasting continued declines to as low as 1 Mb/d through 2023. ", "The IEA reports that globally new oil discoveries fell to a record low in 2017 with 4 billion barrels of new crude oil reserves discovered. Producers consider world demand growth forecasts when making investment decisions. If the prospects for increasing oil consumption appear minimal or if the price outlook looks uneconomical, then producers may be more hesitant to invest in new fields. Producers, however, are looking at ways to make existing mature fields more productive, as well as increasing production of alternatives to crude oil, such as biofuels. Mature fields with production that is declining or nearing retirement may not necessarily be fully exhausted, but rather, oil extraction costs may be at a point that is no longer profitable in the world market. "], "subsections": []}, {"section_title": "World Demand", "paragraphs": ["In 2018, world oil product demand was 99.2 Mb/d, and IEA projects that this will increase to 104.7 Mb/d by 2023. Countries seeing the strongest gains economically may also see growth in their demand for oil. The IEA projects China and India to contribute to a large portion of oil demand growth, representing around 20% of total world demand. IEA projects China's oil demand to grow from 12.5 Mb/d in 2017 to 14.4 Mb/d in 2023. India's demand projection is to grow by about 0.2 Mb/d annually to total demand of 5.9 Mb/d in 2023. As demonstrated by Figure 6 , IEA projects relatively flat demand growth for the United States through 2023.", "Several forecasts estimate that the transportation sector will continue to dominate oil demand. For example, British Petroleum (BP) estimates that transportation will comprise over half of world oil demand through 2040. IEA projects transportation sectors will represent 6.4 Mb/d of the 9.6 Mb/d total oil demand growth from 2017 through 2030. In addition to transportation, the IEA projects petrochemicals (e.g., a chemical product derived from petroleum refining) to contribute to nearly one-third of that total demand growth, at 3.2 Mb/d.", "Oil demand forecasting for the transportation sector is subject to policy, regulation, and technological development (e.g., electric vehicles). Some countries or international organizations may enact regulations to increase efficiency or to diversify the fuel mix. For example, the International Maritime Organization has set a new world limit of sulfur content in fuel oil used in ships (0.5% down from 3.5%) beginning in 2020. It remains to be seen whether this limit will impact the overall oil market, but crude oils already low in sulfur content may be in higher demand. The shipping industry may even look toward alternative fuels, such as biofuels or liquefied natural gas (LNG, which has negligible sulfur emissions), depending on price and availability. Shippers could also install \"scrubbers\" (e.g., exhaust cleaning systems) onboard to reduce the sulfur emissions and avoid switching fuels. ", "Petrochemicals contribute to the manufacture of many everyday household items (e.g., paints, lubricants, cars, and plastics). The increase in availability of lighter crude oils in the United States (along with natural gas production in the form of natural gas liquids) contributes to this production industry. Crude oils of this quality can more easily produce ethane, a feedstock once processed becomes ethylene, most commonly used in the making of plastics. Efficiency gains and environmental policy considerations may affect forecasted petrochemical demand growth. ", "Forecast models predicting world oil demand rely on assumptions and can provide divergent results. Projections are highly dependent on their methodologies, assumptions, and available data. For instance, the IEA has multiple scenarios for forecasting (e.g., \"Sustainable Development,\" \"Current Policies,\" and \"New Policies\"), and each scenario results in different forecasts of future oil demand. In the Sustainable Development scenario, oil demand peaks (i.e., reaches its highest point) around 2020 and begins to decline through 2040, whereas the Current Policies scenario sees strong oil demand growth through 2040. Fuel efficiency standards, alternative fuels, and other policies can all contribute to varying oil demand forecasts across all sectors. These different forecast scenarios illustrate the complexity of oil demand, as well as the effect policy can have on\u00a0it. "], "subsections": []}, {"section_title": "World Prices and Factors", "paragraphs": ["Oil prices in the world market are determined fundamentally by supply and demand, which in turn depend on a number of other factors, such as currency exchange rates, the condition of the world economy, investments, and political environments. The market fluctuates over time with numerous often unforeseen circumstances, but responds to decisions and events occurring today.", "As mentioned above, various hubs price and trade oil in different regions all over the world. These hubs, despite location, trade oil in the U.S. dollar (as is the case with many other commodities), as it serves as a reserve currency for the world economy. As a result, the U.S. dollar and the price of oil have had an inverse relationship, in which a weak dollar has made oil more attractive for purchase to buyers holding other currencies. However, in March 2018, China launched its first crude oil futures contract in Shanghai pegged to the Chinese yuan. As a recent development, it remains to be seen how this will impact oil trade. In the first six months of the Shanghai futures, trade volumes have surpassed the Dubai Mercantile Exchange's oil contract.", "As Figure 7 demonstrates, several events have correlated to drastic changes in the oil sector. In late 2014, the price of oil decreased from a period of high prices (around $100/bbl in real 2010 dollars) to an annual average low (under $40/bbl in real 2010 dollars), causing producers to reconsider investments in new locations with higher production costs. The price decline was in part due to an oversupplied market, furthered by an OPEC decision to maintain production levels in November 2014, in part to defend market share. OPEC decisions, political destabilization, financial crisis, and war are some of the world events that can affect the supply and price of oil. Geopolitical events resulted in changes to the price of oil, just as the price of oil elicited changes in foreign policy. "], "subsections": []}, {"section_title": "World Trade Volumes", "paragraphs": ["The IEA Oil 2018 report forecasts an almost near parity between domestic production and consumption in the Americas (down to -0.5 Mb/d) in 2023, while Asia's oil trade deficit (led by China's imports) may increase to about -25.3 Mb/d in 2023 ( Figure 8 ). Middle Eastern (ME), Former Soviet Union (FSU), and European crude oil balances, according to IEA projections, will see only marginal changes\u2014a slight increase in exports for ME and FSU, a slight decrease in imports for Europe ( Figure 8 ). Furthermore, the IEA projects that Latin America may see a slight drop in exports as Venezuela continues to decline in production. In Africa, Nigeria and Egypt may increase domestic consumption, while Angola continues to decline. The IEA also forecasts countries in the Organisation for Economic Co-operation and Development (OECD) on average to trend toward import reduction, as a result of efficiency gains, emissions policies, and fuel diversification (e.g., natural gas in power generation in place of diesel).", "According to IEA, Asia will increase imports 3.7 Mb/d by 2023. China's projection alone sees an increase in net imports of crude oil from just over 8 Mb/d in 2017 to 10 Mb/d in 2023. China's imports are likely to continue coming from current trading partners, but at higher volumes, with Russia being the top exporter to China. Largely due to an extensive pipeline infrastructure network, Russia exports oil directly to China. Two recently completed Russian pipelines now have a total capacity of 0.6 Mb/d to China. ", "The IEA projects the United States, Norway, Brazil, and Canada to provide the largest new non-OPEC crude exports to the world market. The IEA projects Europe to reduce oil imports and diversify its imports away from reliance on Russia, bringing more imports of crude oil from the United States. According to the IEA, Brazil may increase exports by about 1 Mb/d and offset some of the reduction from Venezuela. Meanwhile, the IEA estimates that Canadian producers may be able to increase exports, but face transportation bottlenecks, limiting their export capacity. The largest outlet for Canadian crude is the United States, either via pipeline or rail. Should the United States reach capacity limits, Canadian producers may have to consider new opportunities. The United States, however, may continue to import Canadian heavy crude oil and export U.S. light crude oil. Canadian producers are attempting to bring oil via pipeline to its west coast for marine export to meet the growing demand in Asia. However, Canadian producers face opposition from environmental groups and from the provincial and local government, resulting in challenges for pipeline approvals. "], "subsections": []}]}, {"section_title": "Policy Considerations", "paragraphs": ["While the oil market directly affects the economy, oil-related policy has the power to influence geopolitics and can be utilized as a tool to influence other countries. Oil policy can be influential in a number of ways, for instance as a response to or in anticipation of undesirable international behavior or as a means to bring balance and stability to an otherwise volatile market. Decisions about energy conservation, environmental protection, and protection of strategic resources can also affect a country's oil supply and demand. The United States plays a multifaceted role in the world oil market, which may affect Congress's policy decisions."], "subsections": [{"section_title": "International Policy Measures", "paragraphs": [], "subsections": [{"section_title": "Role of OPEC", "paragraphs": ["As noted, individual countries or events may be able to affect the oil market. OPEC, especially in conjunction with other major producers (e.g., Russia), can exert a greater influence. OPEC produces 40% of world crude oil and maintains enough spare capacity to affect the market. ", "In November 2016, OPEC, Russia, and other non-OPEC members committed to reduce the supply of oil in the world market due to low prices. Since the production cuts began prices increased from around $45/bbl in January 2015 to $84/bbl in October of 2018. Overall, OPEC has exceeded the original production cuts of 1.2 Mb/d agreed to in November 2016, reaching 147% compliance in May 2018. Since 2017, the schedule and quota for production cuts has shifted, as the non-OPEC group has not been in full compliance, while other OPEC members have reached targets and even in some cases have exceeded them. In June 2018, recognizing this overcompliance and rising oil prices, OPEC and Russia agreed to increase production back to 100% group-level compliance with the November 2016 target. Prices have since declined to around $50/bbl in early January 2019. "], "subsections": []}, {"section_title": "Addressing OPEC's Market Influence", "paragraphs": ["OPEC's coordinated effort to adjust the world supply of oil has an effect on price. OPEC's spare capacity and willingness to adjust production levels gives the organization the ability to exert such influence. Several bills introduced in the 115 th Congress addressed the U.S. relationship with OPEC, including the United States Commission on the Organization of Petroleum Exporting Countries Act of 2017 ( H.R. 545 ); the OPEC Accountability Act of 2018 ( S. 2929 ); and the No Oil Producing and Exporting Cartels (NOPEC) Act of 2018 ( H.R. 5904 and S. 3214 ). Both the House and the Senate NOPEC bills would have amended antitrust law, known as the Sherman Act, to make oil cartels illegal and prosecutable by the U.S. Department of Justice. NOPEC would have revoked the sovereign immunity historically applied to OPEC members, allowing the United States to sue for collusion. It would have made production and price manipulation illegal. Similar bills have been introduced in other Congresses, but were not enacted. ", "Some private sector entities expressed opposition to H.R. 5904 and S. 3214 . For instance, on August 22, 2018, the American Petroleum Institute (API) issued a letter to Congress opposing NOPEC. It stated the legislation may have unintended consequences for the U.S. oil and gas sectors and expressed concerns for U.S. diplomatic and military interests, reciprocal action by OPEC countries. Low oil prices are not necessarily ideal for all U.S. stakeholders throughout the oil supply chain. For example, refiners prefer lower oil prices since they are buying crude oil; however, U.S. producers (depending on their costs of extraction, transportation, etc.) may find extraction of crude oil uneconomic below a certain price. The pressure from these various stakeholders and their effect on government policy is an important factor in the oil market."], "subsections": []}, {"section_title": "Oil-Targeted International Sanctions", "paragraphs": ["Members of Congress and Presidents have sought to use oil policy as a foreign policy tool. Historically, Congress and the executive branch have placed sanctions on crude oil, the banking and the financial sectors, and other oil-related sectors in order to communicate favor or disfavor to the governments of certain countries. Often, oil-targeted sanctions have been on selected countries with NOCs, which finance and support government operations. Congress also has used sanctions against individuals, entities, and governments as a response to undesirable international behavior. For example, the 115 th Congress passed the Countering America's Adversaries through Sanctions Act of 2017 ( P.L. 115-44 ), which established requirements for, and granted the President authority to impose, sanctions on Iran, Russia, and North Korea."], "subsections": [{"section_title": "Russia Sanctions", "paragraphs": ["In 2014, in response to Russia's invasion and annexation of Ukraine's Crimea region and Russia's subsequent support of separatists in eastern Ukraine, the United States imposed sanctions on over 600 individuals, entities, and vessels. President Barack Obama, in initiating economic sanctions on Russian individuals, declared that these activities in Ukraine \"threaten its peace, security, stability, sovereignty, and territorial integrity\" and constitute a threat to U.S. national security. The United States worked with the European Union to amplify the effect of sanctions on Russia and since 2014 has widened their scope in response to election interference, illegal trade with North Korea, and other activities. ", "The Russia sanctions target several different sectors, including energy, and specifically oil production. Known as \"sectoral sanctions,\" they include restrictions on (1) financing to specific oil companies, and (2) engagement (trade, technology, support, etc.) in certain kinds of oil projects (shale, Arctic offshore, deepwater, etc.) under the directive of Executive Order 13662 and the Ukraine Freedom Support Act of 2014 ( P.L. 113-272 ), as amended. Since 2014, the success of these sectoral sanctions has been difficult to ascertain, as the price of oil sharply declined during the same time period. Furthermore, Russia enacted changes in its tax system and devalued the ruble. Russian economic growth correlates with oil prices. The price collapse likely had an effect on Russia, as economic growth slowed and even contracted by 2.5% in 2015. With the price of oil strengthening, so too did Russia's economy, which grew by 1.5% in 2017. However, the technology-related sanctions aim to have a longer-term effect on Russian oil production by limiting access to U.S. and EU technology. The overall effect of these technological sanctions on Russian oil production may take years to come to fruition."], "subsections": []}, {"section_title": "Iran Sanctions", "paragraphs": ["The United States has been utilizing sanctions on Iran for decades as part of an ongoing policy strategy to compel Iran to cease supporting terrorism, to provide transparency of Iran's nuclear program, and to limit strategic power in the Middle East. Starting midyear 2012, the United States and the European Union together enforced sanctions on Iran. These hindered Iran's economy and cut crude production by around 1 Mb/d through 2015, according to EIA ( Figure 9 ). In 2016, these sanctions were lifted, and Iran increased its crude production back to presanctions levels of just under 4 Mb/d.", "In May 2018, the Trump Administration announced its intention to withdraw from the Joint Comprehensive Plan of Action (which relieved Iran of the 2012-2015 sanctions). In August 2018, the Administration announced that sanctions would be resumed. Overall, these reinstated sanctions, although not adopted worldwide, have had an effect on the Iranian economy, as companies have moved to comply to avoid U.S. penalties for dealing with Iran. Iran's crude oil exports fell to their lowest in 2.5 years in September 2018 to 1.72 Mb/d. ", "On November 5, 2018, China, India, Italy, Greece, Japan, South Korea, Taiwan, and Turkey were issued waivers to the Iranian oil sanctions with an expiration date set for May 2, 2019. The Trump Administration announced on April 23, 2019, that waivers would no longer be issued or extended beyond May 2. Secretary of State Mike Pompeo stated in a press release that this is to \"apply maximum pressure on the Iranian regime until its leaders change their destructive behavior, respect the rights of the Iranian people, and return to the negotiating table.\" Iran's exports fell to just around 1 Mb/d in April 2019."], "subsections": []}, {"section_title": "Venezuela Sanctions", "paragraphs": ["Venezuela has experienced production declines for many reasons, including sanctions. For years, the Venezuelan government has used revenues from the NOC Petr\u00f3leos de Venezuela, S.A (PdVSA) to pay for social services and support government spending. When the price of oil collapsed, Venezuela's lack of investment, corruption, and a lack of technical expertise led to oil production declines from roughly 2.5 Mb/d in 2015 to IEA estimates of around 1.5 Mb/d in 2018. ", "For over a decade the United States has imposed a range of sanctions on the Venezuelan government. The Trump Administration imposed sanctions restricting Venezuela's access to U.S. financial markets in August 2017, increasing fiscal pressure on the government. On March 21, 2018, through E.O. 13827, \"Taking Additional Steps to Address the Situation in Venezuela,\" the Administration expanded on 2017 sanctions. Furthermore, on January 25, 2019, the Administration updated the executive orders by broadening \"the definition of the term 'Government of Venezuela' to include persons that have acted, or have purported to act, on behalf of the Government of Venezuela.\" Under these updates, U.S. consumers can continue to purchase Venezuelan crude oil until April 28, 2019, but the payments will be held in blocked accounts. ", "A prohibition on U.S. crude oil imports from Venezuela could result in a shock to the world oil market and a constraint in the world oil supply system, resulting in U.S. Gulf Coast refineries experiencing higher oil prices. However, this initial shock may be short term, as the market would eventually find alternative sources."], "subsections": []}]}, {"section_title": "Protection of Trade Routes", "paragraphs": ["While the oil market has changed in the past 40 years, physical threats to oil supply still exist, particularly along certain trade routes. Bottlenecks or disruptions along routes can affect the supply of oil and ultimately the price consumers pay. This section will highlight some examples.", "A key waterway for the transit of oil and natural gas is the Strait of Hormuz in the Persian Gulf. This juncture is the only passage in the Persian Gulf with access to the open ocean and is surrounded by some of the world's largest oil-producing countries. Roughly 24% of the world oil market, almost 22 Mb/d of crude oil and petroleum products, transited the Strait of Hormuz in the first half of 2018. Saudi Arabia has other outlets for oil exports, including the Red Sea; however, the Bab al-Mandeb Strait (where the Red Sea and the Gulf of Aden meet just along the shores of Djibouti, across from Yemen) is another choke point. Saudi Arabia in the summer of 2018 temporarily announced a suspension of oil shipments (roughly 500,000-700,000 barrels per day) through the Bab al-Mandeb Strait after two ships were attacked by Yemen's Houthis. As introduced in the House, a previous version of the National Defense Authorization Act (NDAA) for Fiscal Year 2018 ( P.L. 115-91 ) included language specific to defending critical choke points of interest to national security in the Persian Gulf. While P.L. 115-91 as enacted did not include this language, the House Committee on Armed Services, in H.Rept. 115-200 , stressed that the U.S. military should maintain capabilities to \"ensure freedom of navigation at the Bab al Mandab Strait and the Strait of Hormuz.\" ", "The political relationships of the United States with Iran, Saudi Arabia, other members of OPEC, and China have been strategically important when considering legislation that may affect the security of supply along major oil trade routes. Though most of the oil that flows through the Strait of Hormuz goes to Asia, the world oil market is integrated, so a disruption anywhere can contribute to higher oil prices everywhere. If a major disruption were to occur, depending on the size and cause, the supply shock to the international oil market would likely put upward pressure on oil prices. Some possible examples include escalating war in Yemen; armed confrontation with Iran; and increased tensions over Chinese control in South China Sea. The impact of oil price increases on other economic sectors is difficult to ascertain and challenging to predict, given the pervasive role of oil and oil-based products in the world economy. Despite a new era of abundance for the United States, a massive disruption to world supply along trade routes could permeate into geopolitical relationships, secondary industries (e.g., petrochemicals, agriculture), and the economy at large."], "subsections": []}]}, {"section_title": "Selected Domestic Policy Measures", "paragraphs": ["Congress over many years has enacted several laws intended to secure the nation's oil supply. The 1970s was an especially busy time for Congress in this area. Largely in response to the OAPEC oil embargo and exhausted U.S. spare capacity, Congress considered security-of-supply policy options. This time period initiated the perception of energy scarcity in the United States. Since then, Congress has continuously demonstrated interest in the oil market. This section identifies some of the ways in which Congress has addressed oil consumption and security. "], "subsections": [{"section_title": "Creation of the Strategic Petroleum Reserve", "paragraphs": ["In response to the 1973 OAPEC oil embargo, the United States entered into the International Energy Program in 1974, an agreement that requires all members to hold a 90-day supply of petroleum (based on the previous year's net imports) for emergency use. The following year, Congress passed the EPCA of 1975 ( P.L. 94-163 ), which authorized the creation of the SPR to address emergency supply shortages. The SPR originally was an up to 1 billion barrel petroleum reserve (a combination of crude oil, home heating oil, and gasoline), located around the Gulf of Mexico and in the Northeast. Congress, in 1990, amended the EPCA ( P.L. 101-383 ) to authorize the President to initiate SPR drawdowns during times of economic stress, not necessarily considered an emergency. Congress has also authorized sales form the SPR for various purposes. Its current inventory is around 650 million barrels. Today the SPR's role has expanded to ensure ready oil supplies during natural disasters and to help stabilize the oil market."], "subsections": []}, {"section_title": "Corporate Average Fuel Economy Standards", "paragraphs": ["The EPCA of 1975 also established Corporate Average Fuel Economy (CAFE) standards that began in model year (MY) 1978 for passenger cars and for light trucks in MY 1979. CAFE standards require auto manufacturers to meet miles-per-gallon fuel economy targets for passenger vehicles and light trucks sold in the United States. If a manufacturer fails to do so, it is subject to financial penalties. ", "Vehicle miles per gallon have increased significantly since the institution of CAFE standards. For example, according to the Department of Energy's 2018 Transportation Energy Data Book, starting in 1978, passenger vehicle fuel use dropped from around 80 billion gallons of gasoline to just above 69 billion in 1982. Conversely, the number of registered vehicles increased from 116 million to 123 million during the same time period. While the number of registered passenger vehicles increased, the number of miles driven per vehicle stayed relatively flat (around 9,000 miles per vehicle) throughout the time period. ", "In August 2018, the Environmental Protection Agency and the National Highway Traffic Safety Administration proposed amendments to CAFE standards. These proposed amendments offer eight alternatives for MY 2021-2026. The agencies' preferred alternative is to retain the existing standards through MY 2020 and then to freeze the standards at this level for both programs through MY 2026."], "subsections": []}, {"section_title": "Electric Vehicles", "paragraphs": ["Congress has passed several laws establishing tax credits for plug-in electric vehicles (EVs). The Energy Improvement and Extension Act of 2008, enacted as Division B of P.L. 110-343 , established the credit for plug-in EVs. As first enacted, the credit phased out once 250,000 credit-eligible vehicles were sold. The plug-in EV phaseout threshold changed from a 250,000-vehicle limit to a 200,000-vehicle per manufacturer limit in the American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ).", "EVs may play an important role in the future of oil as the transportation sector diversifies fuel sources. In the United States, EVs had less than 4% market share in 2017. Competitive gasoline prices and the often higher cost of initial purchase for EVs may be factors contributing to the relatively slow growth in market share for EVs. In the 115 th Congress, there were proposals to extend, as well as proposals to repeal, the plug-in EV tax credit."], "subsections": []}, {"section_title": "Renewable Fuel Standard", "paragraphs": ["In 2005, Congress established the Renewable Fuel Standard (RFS) with the passage of the Energy Policy Act ( P.L. 109-58 ), and expanded it in 2007 with the Energy Independence and Security Act ( P.L. 110-140 ). The RFS requires transportation fuel to contain an increasing amount of renewable fuels, including conventional biofuel, advanced biofuel, cellulosic biofuel, and biomass-based diesel. At the time, transportation sector fuel diversity was negligible; the stronger the reliance of an economic sector on one fuel source, the more at risk it is to fuel supply disruptions. The RFS, in concept, intends to provide some diversification to transportation fuels away from a strong reliance on traditional gasoline or diesel derived from crude oil. Additionally, the focus on agriculture-derived fuels would support the U.S. biofuel industry and could reduce greenhouse gas emissions compared to traditional gasoline and diesel. Implementing the RFS has been challenging due to a number of factors (e.g., infrastructure, technology, and limited federal assistance). Some Members of Congress have expressed concerns about whether or not to amend or repeal the RFS."], "subsections": []}]}]}, {"section_title": "Other Considerations", "paragraphs": ["This report has reviewed select policy issues from the full suite of legislative measures that may influence the world oil market. Domestically, for example, Congress could enact legislation to increase or reduce production by opening areas or restricting certain technologies. Furthermore, emissions controls and emissions-related policies could play a pivotal role in the world oil market. For instance, the Bipartisan Budget Act of 2018 ( P.L. 115-123 ) expanded the 45Q tax credit from $10 to $35 per ton of carbon dioxide (CO 2 ) for use in enhanced oil recovery. The 45Q tax credit demonstrated an interest in utilizing CO 2 emissions, while at the same time expanding oil production in the United States. Furthermore, oil tends to affect many other sectors of the economy and vice versa. Policy changes in one sector could have intended or unintended consequences for the oil market. For instance, tariffs on steel could affect production transportation costs. Other major policy considerations could include international trade policies, infrastructure, diversification of transportation fuels, and funding in research and development. "], "subsections": []}]}}
{"id": "R42838", "title": "Family Violence Prevention and Services Act (FVPSA): Background and Funding", "released_date": "2019-04-04T00:00:00", "summary": ["Family violence broadly refers to acts of physical and sexual violence perpetrated by individuals against family members. The federal government has responded to various forms of family violence, including violence involving spouses and other intimate partners, children, and the elderly. The focus of this report is on the federal response to domestic violence under the Family Violence Prevention and Services Act (FVPSA). \"Domestic violence\" is used in the report to describe violence among intimate partners, including those involved in dating relationships. Generally speaking, victims tend to be women, although a sizable share of men are also victimized. A 2015 survey conducted by the Centers for Disease Control and Prevention (CDC) found that approximately one-third of women and men had experienced sexual violence, physical violence, and/or stalking in their lifetimes. It showed that women were more likely than men to have experienced contact sexual violence (18% vs. 8%), stalking (10% vs. 2%), and severe physical violence (21% vs. 15%). Women were also more likely than men to report an impact related to partner violence over their lifetimes (25% vs 11%). Such impacts included having injuries, being fearful, being concerned for their safety, missing work or school, needing medical care, or needing help from law enforcement.", "Throughout much of the 20th century, domestic violence remained a hidden problem. Victims, or survivors, of this abuse often endured physical and emotional abuse in silence out of fear of retaliation by their spouses or partners. In the 1970s, former battered women, civic organizations, and professionals began to open shelters and provide services to abused women and their children. As a result of these efforts and greater national attention to domestic violence, Congress conducted a series of hearings in the early 1980s to understand the scope of domestic violence and explore possible responses. FVPSA was enacted in 1984 (Title III of P.L. 98-457), and has been reauthorized seven times, most recently by the CAPTA Reauthorization Act of 2010 (P.L. 111-320).", "FVPSA authorizes three primary sets of activities, all of which are administered by the U.S. Department of Health and Human Services (HHS). These activities are authorized through FY2015, per P.L. 113-320, and funds have continually been appropriated in each subsequent year. FY2019 funding is $180 million. First, a national domestic violence hotline receives calls for assistance related to this violence. The hotline provides crisis intervention and counseling, maintains a database of service providers throughout the United States and the territories, and provides referrals for victims and others affected by domestic violence. Second, FVPSA funds efforts to prevent domestic violence through a program known as Domestic Violence Prevention Enhancement and Leadership Through Allies (DELTA). The program supports efforts in selected communities to prevent domestic violence. Third, FVPSA supports direct services for victims and their families, including victims in underserved and minority communities and children exposed to domestic violence. Most of this funding is awarded via grants to states, territories, and tribes, which then distribute the funds to local domestic violence service organizations. These organizations provide shelter and a number of services\u2014counseling, referrals, development of safety plans, advocacy, legal advocacy, and other services. This funding also supports state domestic violence coalitions that provide training and support for service providers, and national resource centers that provide training and technical assistance on various domestic violence issues for a variety of stakeholders.", "FVPSA was the first federal law to address domestic violence. Since the law was enacted, it has continued to have a primary focus on providing shelter and services for survivors and has increasingly provided support to children exposed to domestic violence and teen dating violence. With the enactment of the Violence Against Women Act of 1994 (VAWA, P.L. 103-322), the federal response to domestic violence has expanded to include investigating and prosecuting crimes and providing additional services to victims and abusers. VAWA activities are administered by multiple federal agencies."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides an overview of the federal response to domestic violence\u2014defined broadly to include acts of physical and nonphysical violence against spouses and other intimate partners\u2014through the Family Violence Prevention and Services Act (FVPSA). FVPSA programs are carried out by the U.S. Department of Health and Human Services' (HHS's) Administration for Children and Families (ACF) and the Centers for Disease Control and Prevention (CDC). ACF administers most FVPSA programming, including grants to states, territories, and Indian tribes to support local organizations that provide immediate shelter and related assistance for victims of domestic violence and their children. ACF also provides funding for a national domestic violence hotline that responds to calls, texts, and web-based chats from individuals seeking assistance. The funding for ACF also supports state domestic violence coalitions that provide training for and advocacy on behalf of domestic violence providers within each state, as well as multiple resource centers that provide training and technical assistance on various domestic violence issues for a variety of stakeholders. The CDC funds efforts to prevent domestic violence through a program known as Domestic Violence Prevention Enhancement and Leadership Through Allies (DELTA). The House Committee on Education and Labor and the Senate Health, Education, Labor and Pension (HELP) Committee have exercised jurisdiction over FVPSA.", "The report begins with background on the definitions of domestic violence and related terms. This background section also describes the risk factors for domestic violence and estimates of the number of victims. The next section of the report addresses the history leading up to the enactment of FVPSA, and the major components of the act: a national domestic violence hotline, support for domestic violence shelters and nonresidential services, and community-based responses to prevent domestic violence. The report then discusses efforts under FVPSA to assist children and youth exposed to domestic violence, including teen dating violence. ", "Finally, the report provides an overview of FVPSA's interaction with other federal laws, including the Child Abuse Prevention and Treatment Act (CAPTA) and the Violence Against Women Act of 1994 (VAWA, P.L. 103-322 ). FVPSA was the first federal law to address domestic violence, with a focus on providing shelter and services for survivors; however, since the enactment of VAWA in 1994, the federal response to domestic violence has expanded to involve multiple departments and activities that include investigating and prosecuting crimes and providing additional services to victims and abusers. FVPSA also includes provisions that encourage or require program administrators to coordinate FVPSA programs with related programs and research carried out by other federal agencies. The appendices provide further detail about FVPSA-related definitions and funding, and statistics related to domestic violence victimization."], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "Definitions", "paragraphs": ["The FVPSA statute focuses on \"family violence,\" which can involve many types of family relationships and forms of violence. FVPSA defines the term as acts of violence or threatened acts of violence, including forced detention, that result in physical injury against individuals (including elderly individuals) who are legally related by blood or marriage and/or live in the same household. This definition focuses on physical forms of violence and is limited to abusers and victims who live together or are related by blood or marriage; however, researchers and others generally agree that family violence is broad enough to include nonphysical violence and physical violence that occurs outside of an intimate relationship. Such a definition can encompass a range of scenarios\u2014rape and other forms of sexual violence committed by a current or former spouse or intimate partner who may or may not live in the same household; stalking by a current or former spouse or partner; abuse and neglect of elderly family members and children; and psychologically tormenting and controlling a spouse, intimate partner, or other member of the household. ", "While family violence can encompass child abuse and elder abuse, FVPSA programs focus on individuals abused by their spouses and other intimate partners. Further, FVPSA references the terms \"domestic violence\" and \"dating violence\" as they are defined under VAWA, and discusses these terms alongside family violence. (The FVPSA regulations also define these terms as generally consistent with VAWA, but recognize that the term \"dating violence\" encompasses additional acts.) The VAWA definition of \"domestic violence\" encompasses forms of intimate partner violence\u2014involving current and former spouses or individuals who are similarly situated to a spouse, cohabiting individuals, and parents of children in common\u2014that are outlawed under state or local laws. VAWA defines \"dating violence\" as violence committed by a person who has been in a social relationship of a romantic or intimate nature with the victim; and where the existence of such a relationship is determined based on consideration of the length of the relationship, the type of relationship, and the frequency of interaction between the individuals involved. ( Appendix A provides a summary of these and related terms as they are defined in statute.)", "The federal government responds to child abuse and elder abuse through a variety of separate programs. Federal law authorizes and funds a range of activities to prevent and respond to child abuse and neglect under Titles IV-B and IV-E of the Social Security Act and CAPTA. Separately, the Older Americans Act (OAA), the major federal vehicle for the delivery of social and nutrition services for older persons, has authorized projects to address elder abuse. In addition, the OAA authorizes, and the federal government funds, the National Center on Elder Abuse . The center provides information to the public and professionals regarding elder abuse prevention activities, and provides training and technical assistance to state elder abuse agencies and to community-based organizations. The Social Services Block Grant, as amended, also includes elder justice provisions, including several grant programs and other activities to promote the safety and well-being of older Americans. "], "subsections": []}, {"section_title": "Risk Factors for Domestic Violence", "paragraphs": ["The evidence base on domestic violence does not point strongly to any one reason that it is perpetrated, in part because of the difficulty in measuring social conditions (e.g., status of women, gender norms, and socioeconomic status, among others) that can influence this violence. Still, the research literature has identified two underlying influences: the unequal position of women and the normalization of violence, both in society and some relationships. Certain risk variables are often associated with\u2014but not necessarily the causes\u2014of domestic violence. Such factors include a pattern of problem drinking, poverty and economic conditions, and early parenthood. For example, substance abuse often precedes incidents of domestic violence. A U.S. Department of Justice (DOJ) study found that substance abuse tracked closely with homicide, attempted homicide, or the most severe violent incidents of abuse perpetrated against an intimate partner. Among men who killed or attempted to kill their intimate partners, over 80% were problem drinkers in the year preceding the incident. "], "subsections": []}, {"section_title": "Profiles of Survivors", "paragraphs": ["Estimating the number of individuals involved in domestic violence is complicated by the varying definitions of the term and methodologies for collecting data. For example, some research counts a boyfriend or girlfriend as a family relationship while other research does not; still other surveys are limited to specific types of violence and whether violence is reported to police. Certain studies focus more broadly on various types of violence or more narrowly on violence committed among intimate partners. In addition, domestic violence is generally believed to be underreported. Survivors may be reluctant to disclose their victimization because of shame, embarrassment, fear, or belief that they may not receive support from law enforcement. ", "Overall, two studies\u2014the National Intimate Partner and Sexual Violence Survey (NISVS) and the National Crime Victimization Survey (NCVS)\u2014show that violence involving intimate partners is not uncommon, and that both women and men are victimized sexually, physically, and psychologically. Women tend to first be victimized at a younger age than men. Further, minority women and men tend to be victimized at higher rates than their white counterparts."], "subsections": [{"section_title": "National Intimate Partner and Sexual Violence Survey", "paragraphs": ["NISVS provides information on the prevalence of domestic violence among individuals during their lifetimes and in the past 12 months prior to the survey. The CDC conducted the study annually in each of 2010-2012 and in 2015. The survey examines multiple aspects of intimate partner violence\u2014including contact sexual violence, which encompasses rape and other acts; physical violence, including slapping, kicking, and more severe acts like being burned; and stalking, which is a pattern of harassing or threatening tactics. Select findings from the study are summarized in Table B-1 . Generally, the 2015 survey found that women and men were victimized at about the same rate over their lifetime. Over one-third (36%) of women and more than one-third (34%) of men in the United States reported that they experienced sexual violence, physical violence, and/or stalking by an intimate partner in their lifetimes. However, women were more likely than men to experience certain types of intimate partner violence, including contact sexual violence (18% vs. 8%), stalking (10% vs. 2%), and severe physical violence (21% vs. 15%). Women were also much more likely than men to report an impact related to partner violence over their lifetimes (25% vs 11%). Such impacts included having injuries, being fearful, being concerned for their safety, missing work or school, needing medical care, or needing help from law enforcement.", "Women and men of color, particularly individuals who are multiracial, tended to experience domestic violence at higher lifetime rates. As reported in the 2010 NISVS, women who are multiracial (57%) were most likely to report contact sexual violence, physical violence, and/or stalking by an intimate partner, followed by American Indian or Alaska Native women (48%), black women (45%), white women (37%), Hispanic women of any race (34%), and Asian or Pacific Islander women (18%). Among men, those who were black (40%) and multiracial (39%) were more likely to experience intimate partner violence than white (32%) and Hispanic (29%) men; estimates were not reported for American Indian or Alaska Native or Asian or Pacific Islander males because the data were unreliable."], "subsections": [{"section_title": "Special Populations", "paragraphs": ["The 2010 NISVS examined the prevalence of this violence based on how adult respondents identified their sexual orientation (heterosexual or straight, gay or lesbian, or bisexual). The study found that overall, bisexual women had significantly higher lifetime prevalence of sexual violence, physical violence, and stalking by an intimate partner when compared to both lesbian and heterosexual women. ", "The 2010 NISVS also surveyed women on active duty in the military and the wives of active duty men. These women were asked to respond to whether they experienced intimate partner violence over their lifetime and during the four years prior to the survey. The study found that the majority of women affiliated with the military were significantly less likely to be victims of intimate partner violence compared to women in the general population. However, active duty women who were deployed during the three years prior to the survey were significantly more likely to have experienced intimate partner violence during this period and over their lifetime compared to active duty women who were not deployed. Among those who deployed, 12% had been victims of physical violence, rape, or stalking by an intimate partner during the past three years and 35% had experienced victimization over their lifetime. This is compared to 10% (during the past three years) and 28% (lifetime prevalence) of women who had not deployed. "], "subsections": []}]}, {"section_title": "National Crime Victimization Survey", "paragraphs": ["The National Crime Victimization Survey is a survey coordinated by DOJ's Bureau of Justice Statistics within the Office of Justice Programs. NCVS surveys a nationally representative sample of households. It is the primary source of information on the characteristics of criminal nonfatal victimization and on the number and types of crimes that may or may not be reported to law enforcement authorities. NCVS surveyed respondents about whether they have been victims of a violent crime, including rape/sexual assault, robbery, aggravated assault, and simple assault; and for victims, the relationship to the perpetrator. The survey reports the share of crimes that are committed by an intimate partner (current or former spouses, boyfriends, or girlfriends), other family members, friends/acquaintances, or strangers. The survey found that nearly 600,000 individuals were victims of intimate partner violence in 2016. An earlier NCVS study examined changes in the rate of intimate partner violence over time. The study found that the number of female victims of domestic violence declined from 1.8 million in 1994 to about 621,000 in 2011. Over this period, the rate of serious intimate partner violence\u2014rape or sexual assault, robbery, and aggravated assault\u2014declined by 72% for females and 64% for males. Approximately 4% of females and 8% of males who were victimized by intimate partners were shot at, stabbed, or hit with a weapon over the period from 2002 through 2011."], "subsections": []}]}, {"section_title": "Effects of Domestic Violence", "paragraphs": ["Domestic violence is associated with multiple negative outcomes for victims, including mental and emotional distress and health effects. The 2015 NISVS study found that these effects appeared to be greater for women. About 1 in 4 women (25.1%) and 1 in 10 men (10.9%) who experienced sexual violence, physical violence, and/or stalking by an intimate partner in their lifetime reported at least one impact as a result of this violence, including being fearful; being concerned for their safety or having an injury or need for medical care; needing help from law enforcement; missing at least one day of work; or missing at least one day of school. "], "subsections": []}]}, {"section_title": "Domestic Violence: Development of the Issue", "paragraphs": ["Early marriage laws in the United States permitted men to hit their wives, and throughout much of the 20 th century family violence remained a hidden problem. Victims, mostly women, often endured physical and emotional abuse in silence. These victims were hesitant to seek help because of fear of retaliation by their spouses/partners and concerns about leaving their homes, children, and neighborhoods behind. Women were worried that they would be perceived as deviant or mentally unstable or would be unable to get by financially. In addition, victims were often blamed for their abuse, based on stereotypical notions of women (e.g., demanding, aggressive, and frigid, among other characteristics). ", "In the 1960s, shelters and services for victims of domestic violence became available on a limited basis; however, these services were not always targeted specifically to victims per se. Social service and religious organizations provided temporary housing for displaced persons generally, which could include homeless and abused women. In addition, a small number of organizations provided services to abused women who were married to alcoholic men. Beginning in the 1970s, the \"battered women's movement\" began to emerge; it sought to heighten awareness of women who were abused by spouses and partners. The movement developed from influences both abroad and within the United States. In England, the first battered women's shelter, Chiswick Women's Aid, galvanized support to establish similar types of services. In addition, the feminist movement in the United States increasingly brought greater national attention to the issue. ", "As part of the battered women's movement, former battered women, civic organizations, and professionals opened shelters and began to provide services to victims, primarily abused women and their children. Shelters were most often located in old homes, at Young Women's Christian Association (YWCA) centers, or housed in institutional settings, such as motels or abandoned orphanages. ", "In addition to providing shelter, groups in the battered women's movement organized coalitions to combine resources for public education on the issue, support groups for victims, and services that were lacking. For example, the YWCA and Women in Crisis Can Act formed a hotline for abused women in Chicago. These and other groups convened the Chicago Abused Women's Coalition to address concerns about services for battered women. The coalition spoke to hundreds of community groups and professional agencies about battered women's stories, explained the significance of violence, detailed how violence becomes sanctioned, dispelled common myths, and challenged community members to provide funding and other support to assist abused women. The coalition mobilized around passage of a state law to protect women and require police training on domestic violence, among other accomplishments.", "Based on a survey in the late 1970s, 111 shelters were believed to be operating across all states and in urban, suburban, and rural communities. These shelters generally reported that they provided a safe and secure environment for abused women and their children, emotional support and counseling for abused women, and information on legal rights and assistance with housing, among other supports. Approximately 90 of these shelters fielded over 110,000 calls for assistance in a given year. ", "Around this same time, the public became increasingly aware of domestic violence. In 1983, Time magazine published an article, \"Wife Beating: The Silent Crime,\" as part of a series of articles on violence in the United States. The article stated: \"There is nothing new about wife beating\u2026. What is new is that in the U.S. wife beating is no longer widely accepted as an inevitable and private matter. The change in attitude, while far from complete, has come about in the past 10 to 15 years as part of the profound transformation of ideas about the roles and rights of women in society.\" In 1984, then-U.S. Attorney General Benjamin Civiletti established the Department of Justice Task Force on Family Violence, which issued a report examining the scope and impact of domestic violence in America. The report also provided recommendations to improve the nation's law enforcement, criminal justice, and community response to offenses that were previously considered \"family\u00a0matters.\" "], "subsections": [{"section_title": "Congressional Response", "paragraphs": ["Largely as a result of efforts by advocates and the Justice Department, Congress began to take an interest in domestic violence issues. The House Select Committee on Children, Youth, and Families conducted a series of hearings in 1983 and 1984 on child abuse and family violence throughout the country, to understand the scope of family violence better and explore possible federal responses to the problem. The committee heard from victims, domestic violence service providers, researchers, law enforcement officials, and other stakeholders about the possible number of victims and the need for additional victim services. In 1984, the Family Violence Prevention and Services Act (FVPSA) was enacted as Title III of the Child Abuse Amendments of 1984 ( P.L. 98-457 ). Title I of that law amended the Child Abuse Prevention and Treatment Act (CAPTA), and most of the seven subsequent reauthorizations of FVPSA have occurred as part of legislation that reauthorized CAPTA. This includes the most recent reauthorization ( P.L. 111-320 ), which extended funding authority for FVPSA through FY2015. As discussed later in this report, Congress subsequently broadened the federal response to domestic violence with the enactment of the Violence Against Women Act of 1994."], "subsections": []}]}, {"section_title": "FVPSA Overview", "paragraphs": ["As originally enacted, FVPSA included both a social service and law enforcement response to preventing and responding to domestic violence. Grants were authorized for states, territories, and Indian tribes to establish and expand programs to prevent domestic violence and provide shelter for victims. In addition, the law authorized grants to provide training and technical assistance to law enforcement personnel, and this funding was ultimately used to train law enforcement personnel throughout the country. From FY1986 through FY1994, funding for these grants was transferred from HHS to DOJ, which carried out the grants under the Office for Victims of Crime (OVC). DOJ funded 23 projects to train law enforcement officers on domestic violence policies and response procedures, with approximately 16,000 law enforcement officers and other justice system personnel from 25 states receiving this training. The training emphasized officers as participants working with other agencies, victims, and community groups in a coordinated response to domestic violence. Over time, FVPSA was expanded to include support of other activities, including state domestic violence coalitions and grants that focus on prevention activities; however, authorization of funding for FVPSA law enforcement training grants was discontinued in 1992, just before the Violence Against Women Act of 1994 authorized a similar purpose. Specifically, VAWA authorizes training and support of law enforcement officials under the Services, Training, Officers, and Prosecutors (STOP) Grant program. ", "As outlined in Figure 1 , FVPSA currently authorizes three major activities: domestic violence prevention activities under a program known as DELTA; the national domestic violence hotline; and domestic violence shelters, services, and program support. The CDC administers the DELTA program. The Family and Youth Services Bureau (FYSB) in HHS/ACF administers funding for the hotline and the domestic violence shelters and support."], "subsections": []}, {"section_title": "Funding", "paragraphs": ["Authorization of funding under FVPSA has been extended multiple times, most recently through FY2015 by the CAPTA Reauthorization Act of 2010 ( P.L. 111-320 ). Congress has appropriated funding in subsequent years. Table 1 includes actual funding from FY1993 to FY2018, which includes reductions in some years, and appropriated funding for FY2019 for the three major FVPSA activities. Congress appropriated just over $180 million for FY2019, the highest total to date. "], "subsections": []}, {"section_title": "Domestic Violence Prevention Enhancement and Leadership Through Alliances (DELTA)34", "paragraphs": ["Since 1994, FVPSA has authorized the HHS Secretary to award cooperative agreements to state domestic violence coalitions that coordinate local community projects to prevent domestic violence, including such violence involving youth. Congress first awarded funding for prevention activities in FY1996 under a pilot program carried out by the Centers for Disease Control and Prevention. The pilot program was formalized in 2002 under a program now known as the Domestic Violence Prevention Enhancement and Leadership Through Alliances (DELTA) program. The focus of DELTA is preventing domestic violence before it occurs, rather than responding once it happens or working to prevent its recurrence. The program has had four iterations:", "DELTA, which was funded from FY1996 through FY2012 and involved 14 states; DELTA Prep, which extended from FY2008 through FY2012 and involved 19 states that had not received the initial DELTA funds; DELTA FOCUS, which extended from FY2013 through FY2017 and involved 10 states, all of which had previously received funding under DELTA or DELTA Prep; and DELTA Impact, which began with FY2018 and involves 10 states, all of which except one has previously received DELTA funding. ", "As originally implemented, the program provided funding and technical assistance to 14 state domestic violence coalitions to support local efforts to carry out prevention strategies and work at the state level to oversee these strategies. Local prevention efforts were referred to as coordinated community responses (CCRs). The CCRs were led by domestic violence organizations and other stakeholders across multiple sectors, including law enforcement, public health, and faith-based organizations. For example, the Michigan Coalition Against Domestic and Sexual Violence supported two CCRs\u2014the Arab Community Center for Economic and Social Services and the Lakeshore Alliance Against Domestic and Sexual Violence\u2014that focused on faith-based initiatives. Both CCRs held forums that provided resources and information about the roles of faith leaders in preventing the first-time occurrence of domestic violence. The 14 state domestic violence coalitions developed five- to eight-year domestic violence prevention plans known as Intimate Partner Violence Prevention Plans. These plans were developed with multiple stakeholders, and they discuss the strategies needed to prevent first-time perpetration or victimization and to build the capacity to implement these strategies. The CDC issued a brief that summarizes the plans and identifies the successes and challenges for state domestic violence coalitions in supporting and enhancing intimate partner violence prevention efforts. Overall, the report found that states improved their capacity to respond to intimate partner violence through evidence-based planning and implementation strategies."], "subsections": [{"section_title": "DELTA Prep", "paragraphs": ["DELTA Prep was a project that extended from FY2008 through FY2012, and was a collaborative effort among the CDC, the CDC Foundation, and the Robert Wood Johnson Foundation. Through DELTA Prep, the CDC extended the DELTA Program to 19 states that did not receive the initial DELTA funds. State and community leaders in these other states received training and assistance in building prevention strategies, based on the work of the 14 state domestic violence coalitions that received DELTA funds. DELTA Prep states integrated primary prevention strategies into their work and the work of their partners, and built leadership for domestic violence prevention in their states. "], "subsections": []}, {"section_title": "DELTA FOCUS", "paragraphs": ["DELTA FOCUS (Focusing on Outcomes for Communities United within States) continued earlier DELTA work. From FY2013 through FY2017, DELTA FOCUS funded 10 state domestic violence coalition grantees to implement and evaluate strategies to prevent domestic violence. Funding was provided by the coalitions to 18 community response teams that engaged in carrying out these strategies. DELTA FOCUS differed from DELTA and DELTA Prep by placing greater emphasis on implementing prevention strategies rather than building capacity for prevention. DELTA FOCUS also put more emphasis on evaluating the program to help build evidence about effective interventions. "], "subsections": []}, {"section_title": "DELTA Impact", "paragraphs": ["DELTA Impact, which began in FY2018, provides funding to 10 state domestic violence coalitions. This grant supports community response teams in decreasing domestic violence risk factors and increasing protective factors by implementing prevention activities that are based on the best available evidence. Grantees are implementing and evaluating policy efforts under three broad strategies to address domestic violence prevention: (1) engaging influential adults and peers, including by engaging men and boys as allies in prevention; (2) creating protective environments, such as improving school climates and safety; and (3) strengthening economic supports for families."], "subsections": []}]}, {"section_title": "National Domestic Violence Hotline41", "paragraphs": ["As amended by the Violence Against Women Act (VAWA) of 1994, FVPSA directs the HHS Secretary to award a grant to one or more private entities to operate a 24-hour, national, toll-free hotline for domestic violence. Since 1996, HHS has competitively awarded a cooperative agreement to the National Council on Family Violence in Texas to operate the National Domestic Violence Hotline (hereinafter, hotline). The agreement was most recently awarded for a five-year period that extends through the end of FY2020.", "FVPSA requires that the hotline provide information and assistance to adult and youth victims of domestic violence, family and household members of victims of such violence, and \"persons affected by victimization.\" This includes support related to domestic violence, children exposed to domestic violence, sexual assault, intervention programs for abusive partners, and related issues. As required under FVPSA, the hotline carries out multiple activities:", "It employs, trains, and supervises personnel to answer incoming calls; provides counseling and referral services; and directly connects callers to service providers. In FY2018, the hotline received about 23,000 calls each month and responded to 74% of all calls. It also had an average of nearly 4,000 online chats on a monthly basis. HHS reported that some calls were missed due to increased media coverage of domestic violence, increased Spanish chat services, and forwarding of calls from local domestic violence hotlines due to severe weather. It maintains a database of domestic violence services for victims throughout the United States, including information on the availability of shelter and services. It provides assistance to meet the needs of special populations, including underserved populations, individuals with disabilities, and youth victims of domestic violence and dating violence. The hotline provides access to personnel for callers with limited English proficiency and persons who are deaf and hard of hearing. ", "Since 2007, the hotline has operated a separate helpline for youth victims of domestic violence, the National Dating Abuse Helpline (known as loveisrespect.org), which is funded through the appropriation for the hotline. This helpline offers real-time support primarily from peer advocates trained to provide support, information, and advocacy to those involved in abusive dating relationships, as well as others who support victims. In FY2018, the helpline received a monthly average of about 2,400 calls; 4,000 online chats; and nearly 1,300 texts.", "A 2019 study of these two lines examined a number of their features, including who contacts the lines, the study needs and demographic characteristics of those contacts, how contacts reach the lines, and the type of support they receive. The study found that nearly half (48%) the contacts were victims/survivors and another 39% did not identify themselves. The remaining contacts were from family/friends, abusers, and service providers. According to the study, the service most commonly provided to contactors was emotional support and contactors valued this support highly. The National Domestic Violence Hotline has collaborated with the National Indigenous Women's Resource Center to develop and fund the StrongHearts Native Helpline for Native American survivors of domestic abuse. The helpline uses the technology and infrastructure of the hotline, and draws from the National Indigenous Women's Resource Center to provide Native-centered, culturally appropriate services for survivors and others. "], "subsections": []}, {"section_title": "Overview of Shelter, Services, and Support", "paragraphs": ["Funding for shelter, support services, and program support (hereinafter, shelter and services) encompasses multiple activities: formula grants to states and territories; grants to tribes; state domestic violence coalitions; national and special issue resource centers, including those that provide technical assistance; specialized services for abused parents and children exposed to domestic violence; and program support and administration. Figure 2 shows FY2018 allocations for activities included as part of shelter, support services, and program support. ", "The following sections of the report provide further information about grants to states, territories, and tribes; and state domestic violence coalitions. In addition, the report provides information about national and special issue resource centers. The section of the report on services for children and youth exposed to domestic violence includes information about FY2018 and earlier support for specialized services for abused parents and children exposed to domestic violence."], "subsections": [{"section_title": "Formula Grants to States, Territories, and Tribes", "paragraphs": ["No less than 70% of FVPSA appropriations for shelter and services must be awarded to states and territories through a formula grant. The formula grant supports the establishment, maintenance, and expansion of programs and projects to prevent incidents of domestic violence and to provide shelter and supportive services to victims of domestic violence. Each of the territories\u2014Guam, American Samoa, U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands\u2014receives no less than one-eighth of 1% of the appropriation, or, in combination, about one-half of 1% of the total amount appropriated. Of the remaining funds, states (including the District of Columbia and Puerto Rico) receive a base allotment of $600,000 and additional funding based on their relative share of the U.S. population. Appendix C provides formula funding for FY2018 and FY2019 by state and territory. ", "In addition, no less than 10% of FVPSA appropriations for shelter and services are awarded to Indian tribes. Indian tribes have the option to authorize a tribal organization or a nonprofit private organization to submit an application for and to administer FVPSA funds. ", "In applying for grant funding, states and territories (hereinafter, states) must make certain assurances pertaining to the use and distribution of funds and to victims. Nearly all of the same requirements that pertain to states and territories also pertain to tribes."], "subsections": [{"section_title": "Selected Grant Conditions Pertaining to Use and Distribution of Funds49", "paragraphs": ["States may use up to 5% of their grant funding for state administrative costs. The remainder of the funds are used to make subgrants to eligible entities for community-based projects (hereinafter, subgrantees) that meet the goals of the grant program. No less than 70% of subgrant funding is to be used to provide temporary shelter and related supportive services, which include the physical space in which victims reside as well as the expenses of running shelter facilities. No less than 25% of subgrant funding is to be used for the following supportive services and prevention services: ", "assisting in the development of safety plans, and supporting efforts of victims to make decisions about their ongoing safety and well-being; providing individual and group counseling, peer support groups, and referrals to community-based services to assist victims and their dependents in recovering from the effects of domestic violence; providing services, training, technical assistance, and outreach to increase awareness of domestic violence and increase the accessibility of these services; providing culturally and linguistically appropriate services; providing services for children exposed to domestic violence, including age-appropriate counseling, supportive services, and services for the nonabusing parent that support that parent's role as caregiver (which may include services that work with the nonabusing parent and child together); providing advocacy, case management services, and information and referral services concerning issues related to domestic violence intervention and prevention, including providing assistance in accessing federal and state financial assistance programs; legal advocacy; medical advocacy, including provision of referrals for appropriate health care services (but not reimbursement for any health care services); assistance in locating and securing safe and affordable permanent housing and homelessness prevention services; and transportation, child care, respite care, job training and employment services, financial literacy services and education, financial planning, and related economic empowerment services; providing parenting and other educational services for victims and their dependents; and providing prevention services, including outreach to underserved populations. ", "States must also provide assurances that they will consult with and facilitate the participation of state domestic violence coalitions in planning and monitoring the distribution of grants and administering the grants (the role of state domestic violence coalitions is subsequently discussed further). States must describe how they will involve community-based organizations, whose primary purpose is to provide culturally appropriate services to underserved populations, including how such organizations can assist states in meeting the needs of these populations. States must further provide assurances that they have laws or procedures in place to bar an abuser from a shared household or a household of the abused persons, which may include eviction laws or procedures, where appropriate. Such laws or procedures are generally enforced by civil protection orders, or restraining orders to limit the perpetrators' physical proximity to the victim.", "In funding subgrantees, states must \"give special emphasis\" to supporting community-based projects of \"demonstrated effectiveness\" carried out by nonprofit organizations that operate shelters for victims of domestic violence and their dependents; or that provide counseling, advocacy, and self-help services to victims. States have discretion in how they allocate their funding, so long as they provide assurances that grant funding will be distributed equitably within the state and between urban and rural areas of the state.", "Subgrantees that receive funding must provide a nonfederal match\u2014of not less than $1 for every $5 of federal funding\u2014directly from the state or through donations from public or private entities. The matching funds can be in cash or in kind. Further, federal funds made available to a state must supplement, and not supplant, other federal, state, and local public funds expended on services for victims of domestic violence.", "States have two years to spend funds. For example, funds allotted for FY2019 may be spent in FY2019 or FY2020. The HHS Secretary is authorized to reallocate the funds of a state, by the end of the sixth month of a fiscal year that funds are appropriated, if the state fails to meet the requirements of the grant. The Secretary must notify the state if its application for funds has not met these requirements. State domestic violence coalitions are permitted to help determine whether states are in compliance with these provisions. States are allowed six months to correct any deficiencies in their application. "], "subsections": []}, {"section_title": "Selected Grant Conditions Pertaining to Victims54", "paragraphs": ["In FY2017, programs funded by grants for states and tribes supported over 240,000 clients in residential settings and more than 1 million clients in nonresidential settings. Nearly 93% of clients reported that they had improved knowledge of planning for their safety. Also in FY2017, programs were not able to meet 226,000 requests for shelter. ", "The grant for states addresses the individual characteristics and privacy of participants and shelters. Both states and subgrantees funded under FVPSA may not deny individuals from participating in support programs on the basis of disability, sex, race, color, national origin, or religion (this also applies to FPVSA-funded activities generally). In addition, states and subgrantees may not impose income eligibility requirements on individuals participating in these programs. Further, states and subgrantees must protect the confidentiality and privacy of victims and their families to help ensure their safety. These entities are prohibited from disclosing any personally identifying information collected about services requested, and from revealing personally identifying information without the consent of the individual, as specified in the law. If disclosing the identity of the individual is compelled by statutory or court mandate, states and subgrantees must make reasonable attempts to notify victims, and they must take steps to protect the privacy and safety of the individual. ", "States and subgrantees may share information that has been aggregated and does not identify individuals, and information that has been generated by law enforcement and/or prosecutors and courts pertaining to protective orders or law enforcement and prosecutorial purposes. In addition, the location of confidential shelters may not be made public, except with written authorization of the person(s) operating the shelter. Subgrantees may not provide direct payment to any victim of domestic violence or the dependent(s) of the victim. Further, victims must be provided shelter and services on a voluntary basis. In other words, providers cannot compel or force individuals to come to a shelter, participate in counseling, etc."], "subsections": []}]}, {"section_title": "State Domestic Violence Coalitions56", "paragraphs": ["Since 1992, FVPSA has authorized funding for state domestic violence coalitions (SDVCs). A SDVC is defined under the act as a statewide nongovernmental, nonprofit private domestic violence organization that (1) has a membership that includes a majority of the primary-purpose domestic violence service providers in the state; (2) has board membership that is representative of domestic violence service providers, and that may include representatives of the communities in which the services are being provided; (3) has as its purpose to provide education, support, and technical assistance to such service providers so they can maintain shelter and supportive services for victims of domestic violence and their dependents; and (4) serves as an information clearinghouse and resource center on domestic violence for the state and supports the development of policies, protocols, and procedures to enhance domestic violence intervention and prevention in the state. ", "Funding for SDVCs is available for each of the 50 states, the District of Columbia, Puerto Rico, and four territories (American Samoa, Guam, Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands). Each jurisdiction has one SDVC, and these coalitions are designated by HHS. Funding is divided evenly among these 56 jurisdictions. SDVCs must use FVPSA funding for specific activities, as follows:", "working with local domestic violence service programs and providers of direct services to encourage appropriate and comprehensive responses to domestic violence against adults or youth within the state, including providing training and technical assistance and conducting needs assessments; participating in planning and monitoring the distribution of subgrants and subgrant funds within the state under the grant program for states and territories; working in collaboration with service providers and community-based organizations to address the needs of domestic violence victims and their dependents who are members of racial and ethnic minority populations and underserved populations; collaborating with and providing information to entities in such fields as housing, health care, mental health, social welfare, or business to support the development and implementation of effective policies, protocols, and programs that address the safety and support needs of adult and youth victims of domestic\u00a0violence; encouraging appropriate responses to cases of domestic violence against adult and youth victims, including by working with judicial and law enforcement agencies; working with family law judges, criminal court judges, child protective service agencies, and children's advocates to develop appropriate responses to child custody and visitation issues in cases of children exposed to domestic violence, and in cases where this violence is concurrent with child abuse; providing information to the public about prevention of domestic violence and dating violence, including information targeted to underserved populations; and collaborating with Indian tribes and tribal organizations (and Native Hawaiian groups or communities) to address the needs of Indian (including Alaska Native) and Native Hawaiian victims of domestic dating violence, as applicable in the state."], "subsections": []}, {"section_title": "Training and Technical Assistance Centers", "paragraphs": ["As originally enacted, FVPSA authorized a national information and research clearinghouse on the prevention of domestic violence. As part of the act's reauthorization in 1992, the language about the clearinghouse was struck and replaced with authorization for resource centers on domestic violence, including special issue resource centers to address key areas of domestic violence. Reauthorization of FVPSA in 2010 added authorization for a national resource center on American Indian women and three culturally specific resources, which had previously been funded through discretionary funds. The 2010 law also authorized special issue resource centers that provide training and technical assistance on domestic violence intervention and prevention topics and state resource centers to address disparities in domestic violence in states with high proportions of Indian (including Alaska Native) or Native Hawaiian populations. ", "In total, HHS administers grants for 14 training and technical assistance centers that are funded by the FVPSA appropriation for shelter, services, and support. The purpose of these resource centers is to provide information, training, and technical assistance on domestic violence issues. This assistance is provided by nonprofit organizations and other entities to multiple stakeholders\u2014individuals, organizations, governmental entities, and communities\u2014so that they can improve their capacity for preventing and responding to domestic violence. "], "subsections": []}]}, {"section_title": "Teen Dating Violence", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["Teenagers may be exposed to violence in their dating relationships. The CDC reports that on an annual basis, 1 in 9 female teens and 1 in 13 male teens experienced physical dating violence involving a person who hurts or tries to hurt a partner by hitting, kicking, or using another type of physical force. Further, over 1 in 7 female teens and nearly 1 in 19 male teens reported experiencing sexual dating violence in the last year, which includes forcing or attempting to force a partner to take part in a sexual act, sexual touching, or a nonphysical sexual event (e.g., sexting) when the partner does not or cannot consent. ", "The FVPSA statute references dating violence throughout and uses the definition of \"dating violence\" that is in VAWA. The term is defined as violence committed by a person who is or has been in a social relationship of a romantic or intimate nature with the victim, and where the existence of the relationship is determined based on the length, type, and frequency of interaction between the persons in it. ", "Domestic violence shelters and supportive services funded by FVPSA are intended for adult victims and their children if they accompany the adult into shelter. The law does not explicitly authorize supports for youth victims of dating violence who are unaccompanied by their parents; however, the law does not limit eligibility for shelter and services based on age. Access to domestic violence shelters and supports for teen victims, including protective orders against abusers, varies by state. The primary source of support for teen victims under FVPSA is provided via the National Domestic Violence Hotline. The hotline includes the loveisrespect helpline and related online resources. Youth victims can call, chat, or text with peer advocates for support. The loveisrespect website includes a variety of materials that address signs of abuse and resources for getting help. "], "subsections": []}]}, {"section_title": "Children Exposed to Domestic Violence", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["FVPSA references children exposed to domestic violence, but does not define related terminology. According to the research literature, this exposure can include children who see and/or hear violent acts, are present for the aftermath (e.g., seeing bruises on a mother's body, moving to a shelter), or live in a house where domestic violence occurs, regardless of whether they see and/or hear the violence. A frequently cited estimate is that between 10% and 20% of children (approximately 7 million to 10 million children) are exposed to adult domestic violence each year. The literature about the impact of domestic violence is evolving. The effects of domestic violence on children can range from little or no effect to severe psychological harm and physical effects, depending on the type and severity of abuse and protective factors, among other variables. ", "Multiple FVPSA activities address children exposed to domestic and related violence:", "One of the purposes of the formula grant program for states is to provide specialized services (e.g., counseling, advocacy, and other assistance) for these children. The National Resource Center on Domestic Violence is directed to offer domestic violence programs and research that include both victims and their children exposed to domestic violence. The national resource center that addresses mental health and trauma issues is required to address victims of domestic violence and their children who are exposed to this violence. State domestic violence coalitions must, among other activities, work with the legal system, child protective services, and children's advocates to develop appropriate responses to child custody and visitation issues in cases involving children exposed to domestic violence.", "In addition to these provisions, the FVPSA statute authorizes funding for specialized services for abused parents and their children. FVPSA activities for children exposed to domestic violence have also been funded through discretionary funding and funding leveraged through a semipostal stamp."], "subsections": []}, {"section_title": "Specialized Services for Abused Parents and Their Children/Expanding Services for Children and Youth Exposed to Domestic Violence69", "paragraphs": ["Since 2003, FVPSA has specified that funding must be set aside for activities to address children exposed to domestic violence if the appropriation for shelter, victim services, and program support exceeds $130 million. Under current law, if funding is triggered, HHS must first reserve not less than 25% of funding above $130 million to make grants to a local agency, nonprofit organization, or tribal organization with a demonstrated record of serving victims of domestic violence and their children. These funds are intended to expand the capacity of service programs and community-based programs to prevent future domestic violence by addressing the needs of children exposed to domestic violence. Funding has exceeded $130 million in FY2010 and FY2014 through FY2019.", "In FY2010, funding for shelter and services was just over $130 million. HHS reserved the excess funding as well as FVPSA discretionary funding (under shelter, victim services, and program support) to fund specialized services for children through an initiative known as Expanding Services for Children and Youth Exposed to Domestic Violence. HHS also used discretionary money to fund the initiative in FY2011 and FY2012. Total funding for the initiative was $2.5 million. This funding was awarded to five grantees\u2014four state domestic violence coalitions and one national technical assistance provider\u2014to expand supports to children, youth, and parents exposed to domestic violence and build strategies for serving this population. For example, the Alaska Network on Domestic Violence and Sexual Assault, the state domestic violence coalition for Alaska, used the funding to improve coordination between domestic violence agencies and the child welfare system. Their work involved developing an integrated training curriculum and policies, and creation of a multidisciplinary team of child welfare and domestic violence stakeholders in four communities.", "Funding again exceeded $130 million in each of FY2014 through FY2019, thereby triggering the set-aside. In FY2014 and FY2015, HHS directed the extra funding for shelter, services, and support. In FY2016 through FY2018, HHS provided funding for specialized services for abused parents and their children and expects to continue such funding for FY2019. Of the approximately $20 million in excess funding for each of these three years, approximately $5.0 million to $5.6 million was allocated in each year for these services. This recent funding has been allocated to 12 grantees to provide direct services under the grant, Specialized Services for Abused Parents and their Children (SSPAC). Grantees include domestic violence coalitions and other entities. They are working to alleviate trauma experienced by children who are exposed to domestic violence, support enhanced relationships between these children and their parents, and improve systemic responses to such families. A separate grant of $500,000 annually\u2014known as Expanding Services to Children, Youth, and Abused Parents (ESCYAP)\u2014has been awarded to the nonprofit organization Futures Without Violence to provide training and technical assistance to the 12 grantees and facilitate coordination among them. "], "subsections": []}]}, {"section_title": "FVPSA Interaction with Other Federal Laws", "paragraphs": ["In addition to the Child Abuse Prevention and Treatment Act (CAPTA), FVPSA has been reauthorized by VAWA and shares some of that law's purposes. In addition, FVPSA interacts with the Victims of Crime Act (VOCA) because some FVPSA-funded programs receive VOCA funding to provide legal and other assistance to victims. Further, FVPSA includes provisions that encourage or require HHS to coordinate FVPSA programs with related programs and research carried out by other federal agencies. "], "subsections": [{"section_title": "Child Abuse and Neglect", "paragraphs": ["FVPSA does not focus on child abuse per se; however, in enacting FVPSA as part of the 1984 amendments to CAPTA, some Members of Congress and other stakeholders noted that child abuse and neglect and intimate partner violence are not isolated problems, and can arise simultaneously. The research literature has focused on this association. In a national study of children in families who come into contact with a public child welfare agency through an investigation of child abuse and neglect, investigative caseworkers identified 28% of the children's households as having a history of domestic violence against the caregiver and 12% of those caregivers as being in active domestic violence situations. Further, about 1 out of 10 of the child cases of maltreatment reported included domestic violence.", "CAPTA provides funding to states to improve their child protective services (CPS) systems. It requires states, as a condition of receiving certain CAPTA funds, to describe their policies to enhance and promote collaboration between child protective service and domestic violence agencies, among other social service providers. Other federal efforts also address the association between domestic violence and child abuse. For example, the Maternal, Infant, and Early Childhood Home Visiting (MIECHV) program supports efforts to improve the outcomes of young children living in communities with concentrations of domestic violence or child maltreatment, among other factors. The program provides grants to states, territories, and tribes for the support of evidence-based early childhood home visiting programs that provide in-home visits by health or social service professionals with at-risk families.", "Separately, the Family Connection Grants program, authorized under Title IV-B of the Social Security Act, provided funding from FY2009 through FY2014 to public child welfare agencies and nonprofit private organizations to help children\u2014whether they are in foster care or at risk of entering foster care\u2014connect (or reconnect) with birth parents or other extended kin. The funds were used to establish or support certain activities, including family group decisionmaking meetings that enable families to develop plans that nurture children and protect them from abuse and neglect, and, when appropriate, to safely facilitate connecting children exposed to domestic violence to relevant services and reconnecting them with the abused parent. ", "In addition, HHS and the Department of Justice supported the Greenbook Initiative in the early 2000s. The Greenbook was developed from the efforts of the National Council of Juvenile and Family Court Judges, which convened family court judges and experts on child maltreatment and domestic violence. In 1999, this group developed guidelines for child welfare agencies, domestic violence providers, and dependency courts in responding to domestic violence and child abuse in a publication that came to be known as the Greenbook. Soon after, HHS and DOJ funded efforts in six communities to address domestic violence and child maltreatment by implementing guidelines from the Greenbook. The HHS-led Federal Interagency Working Group on Child Abuse and Neglect includes a Domestic Violence Subcommittee. The committee focuses on interagency initiatives that address children exposed to domestic violence and promoting information exchange and joint planning among federal agencies."], "subsections": []}, {"section_title": "Violence Against Women Act (VAWA)86", "paragraphs": ["FVPSA has twice been amended by VAWA. Both FVPSA and VAWA are the primary vehicles for federal support to prevent and respond to domestic violence, including children and youth who are exposed to this violence; however, FVPSA has a more singular focus on prevention and services for victims, while VAWA's unique contributions are more focused on law enforcement and legal response to domestic violence.", "VAWA was enacted in 1994 after Congress held a series of hearings on the causes and effects of domestic and other forms of violence against women. Some Members of Congress and others asserted that communities needed a more comprehensive response to violence against women generally\u2014not just against intimate partners\u2014and that perpetrators should face harsher penalties. The shortfalls of legal response and the need for a change in attitudes toward violence against women were reasons cited for the passage of the law. Since VAWA's enactment, the federal response to domestic violence has expanded to involve multiple departments and activities that include investigating and prosecuting crimes, providing additional services to victims and abusers, and educating the criminal justice system and other stakeholders about violence against women.", "Although VAWA also addresses other forms of violence against women and provides a broader response to domestic violence, some VAWA programs have a similar purpose to those carried out under FVPSA. Congress currently funds VAWA grant programs that address the needs of victims of domestic violence. These programs also provide support to victims of sexual assault, dating violence, and stalking. For example, like the FVPSA grant program for states, territories, and tribes, VAWA's STOP (Services, Training, Officers, Prosecutors) Violence Against Women Formula Grant program provides services to victims of domestic and dating violence (and sexual assault and stalking) that include victim advocacy designed to help victims obtain needed resources or services, crisis intervention, and advocacy in navigating the criminal and/or civil legal system. Of STOP funds appropriated, 30% must be allocated to victim services. STOP grants also support activities that are not funded under FVPSA, including for law enforcement, courts, and prosecution efforts. Another VAWA program, Transitional Housing Assistance Grants for Victims of Domestic Violence, provides transitional housing services for victims, with the goal of moving them into permanent housing. Through the grant program to states, territories, and tribes, FVPSA provides immediate and short-term shelter to victims of domestic violence and authorizes service providers to assist with locating and securing safe and affordable permanent housing and homelessness prevention services. "], "subsections": []}, {"section_title": "Victims of Crime Act (VOCA)", "paragraphs": ["FVPSA requires that entities receiving funds under the grant programs for states, territories, and tribes use a certain share of funding for selected activities, including assistance in accessing other federal and state financial assistance programs. One source of federal finance assistance for victims of domestic violence is the Crime Victims Fund (CVF), authorized under the Victims of Crime Act (VOCA) and administered by the Department of Justice's Office of Victims of Crime (OVC). Within the CVF, funds are available for victims of domestic violence through the Victim Compensation Formula Grants program and Victims Assistance Formula Grants program. The Victims Compensation Grants may be used to reimburse victims of crime for out-of-pocket expenses such as medical and mental health counseling expenses, lost wages, funeral and burial costs, and other costs (except property loss) authorized in a state's compensation statute. In recent years, approximately 40% of all claims filed were for victims of domestic violence. The Victims Assistance Formula Grants may be used to provide grants to state crime victim assistance programs to administer funds for state and community-based victim service program operations. The grants support direct services to victims of crime including information and referral services, crisis counseling, temporary housing, criminal justice advocacy support, and other assistance needs. In recent years, approximately 50% of victims served by these grants were victims of domestic violence. "], "subsections": []}]}, {"section_title": "Federal Coordination", "paragraphs": ["Both FVPSA, which is administered within HHS, and VAWA, which is largely administered within DOJ, require federal agencies to coordinate their efforts to respond to domestic violence. For example, FVPSA authorizes the HHS Secretary to coordinate programs within HHS and to \"seek to coordinate\" those programs \"with programs administered by other federal agencies, that involve or affect efforts to prevent family violence, domestic violence, and dating violence or the provision of assistance for adults and youth victims of family violence, domestic violence, or dating violence.\" In addition, FVPSA directs HHS to assign employees to coordinate research efforts on family and related violence within HHS and research carried out by other federal agencies. Similarly, VAWA requires the Attorney General to consult with stakeholders in establishing a task force\u2014comprised of representatives from relevant federal agencies\u2014to coordinate research on domestic violence and to report to Congress on any overlapping or duplication of efforts on domestic violence issues.", "In 1995, HHS and DOJ convened the first meeting of the National Advisory Council on Violence Against Women. The purpose of the council was to promote greater awareness of violence against women and to advise the federal government on domestic violence issues. Since that time, the two departments have convened subsequent committees to carry out similar work. In 2010, then-Attorney General Eric Holder rechartered the National Advisory Committee on Violence Against Women, which had previously been established in 2006 under his predecessor. As stated in the charter, the committee is intended to provide the Attorney General and the HHS Secretary with policy advice on improving the nation's response to violence against women and coordinating stakeholders at the federal, state, and local levels in this response, with a focus on identifying and implementing successful interventions for children and teens who witness and/or are victimized by intimate partner and sexual violence. ", "Separately, the director for FVPSA programs and the deputy director of HHS's Office on Women's Health provide leadership to the HHS Steering Committee on Violence Against Women. This committee supports collaborative efforts to address violence against women and their children, and includes representatives from the CDC and other HHS agencies. The members of the committee have established links with professional societies in the health and social service fields to increase attention on women's health and violence issues. In addition to these collaborative activities, multiple federal agencies participate in the Federal Interagency Workgroup on Teen Dating Violence, which was convened in 2006 to share information and coordinate teen dating violence program, policy, and research activities to combat teen dating violence from a public health perspective. The workgroup has funded a project to incorporate adolescents in the process for developing a research agenda to address teen dating violence. Finally, the Office of the Vice President (under Joe Biden) coordinated federal efforts to end violence against women, including by convening Cabinet-level officials to address issues concerning domestic and other forms of violence against women.", "Appendix A. Definitions", "Appendix B. Prevalence and Effects of Domestic Violence", "Appendix C. State and Territory Funding for Selected FVPSA Services"], "subsections": [{"section_title": "Appendix.", "paragraphs": [], "subsections": []}]}]}}
{"id": "RS22954", "title": "The Unemployment Trust Fund (UTF): State Insolvency and Federal Loans to States", "released_date": "2019-01-30T00:00:00", "summary": ["Although states have a great deal of autonomy in how they establish and run their unemployment insurance programs, federal law requires states to pay Unemployment Compensation (UC) benefits promptly as provided under state law. During some recessions, current taxes and reserve balances may be insufficient to cover state obligations for UC benefits. States may borrow funds from the federal loan account within the Unemployment Trust Fund (UTF) to meet UC benefit obligations.", "This report summarizes how insolvent states may borrow funds from the UTF loan account to meet their UC benefit obligations. It includes the manner in which states must repay federal UTF loans. It also provides details on how the UTF loans may trigger potential interest accrual and explains the timetable for increased net Federal Unemployment Taxes Act (FUTA) taxes if the funds are not repaid promptly.", "Outstanding loans listed by state may be found at the Department of Labor's (DOL's) website, https://oui.doleta.gov/unemploy/budget.asp."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Unemployment Compensation, Unemployment Taxes, and a State's Obligation to Pay Benefits", "paragraphs": ["Unemployment Compensation (UC) is a joint federal-state program financed by federal payroll taxes under the Federal Unemployment Tax Act (FUTA) and by state payroll taxes under State Unemployment Tax Acts (SUTA). These revenues are deposited into the appropriate account within the federal Unemployment Trust Fund (UTF).", "Originally, the intent of the UC program, among other goals, was to help counter economic fluctuations such as recessions. This intent is reflected in the current UC program's funding and benefit structure. When the economy grows, UC program revenue rises through increased tax revenues. At the same time, UC program spending falls because fewer workers are unemployed. The effect of collecting more taxes while decreasing spending on benefits dampens demand in the economy. It also creates a surplus of funds, or a reserve fund , for the UC program to draw upon during a recession. These reserve balances are credited in the state's account within the UTF. During an economic slowdown or recession, UC tax revenue falls and UC program spending rises as more workers lose their jobs and receive UC benefits. The increased amount of UC payments to unemployed workers dampens the economic effect of lost earnings by injecting additional funds into the economy."], "subsections": [{"section_title": "State and Federal Unemployment Taxes", "paragraphs": [], "subsections": [{"section_title": "State Unemployment Taxes", "paragraphs": ["States levy their own payroll taxes (SUTA) on employers to fund regular UC benefits and the state share (50%) of the Extended Benefit (EB) program. Federal laws and regulations provide broad guidelines for these state taxes. Each state deposits its SUTA revenue into its account within the UTF.", "SUTA revenue finances UC benefits. Generally, when economic activity is robust and increasing, SUTA revenue is greater than a state's UC expenditures. As a result, the state's reserves within the UTF grow. This trend is reversed during economic recessions and during the early economic recovery period, when the state's reserves are drawn down and new SUTA revenue does not always make up the shortfall.", "If the recession is deep enough and if SUTA revenue is inadequate for long periods of time, states may have insufficient funds to pay for UC benefits. Federal law, which requires states to pay these benefits, provides a loan mechanism within the UTF framework that an insolvent state may opt to use to meet its UC benefit payment obligations. States must pay back these loans. If the loans are not paid back quickly (depending on the timing of the beginning of the loan period), states may face interest charges and the states' employers may face increased net FUTA rates until the loans are repaid.", "In the years immediately following the most recent recession, many states had insufficient SUTA revenue and UTF account balances to pay UC benefits. "], "subsections": []}, {"section_title": "Federal Unemployment Taxes", "paragraphs": ["All FUTA revenue is deposited into the Employment Security Administration Account (ESAA) within the UTF. Federal unemployment taxes pay for the federal share of EB (50%) and for administrative grants to the states. Additionally, through the federal loan account within the UTF, FUTA funds may be loaned to insolvent states to assist the payment of the states' UC obligations."], "subsections": [{"section_title": "Net FUTA Rate Is 0.6%", "paragraphs": ["FUTA imposes a 6.0% gross federal unemployment tax rate on the first $7,000 paid annually by employers to each employee. Employers in states with programs approved by the U.S. Labor Secretary and with no outstanding federal loans may credit up to 5.4 percentage points of state unemployment taxes paid against the 6.0% tax rate, making the minimum net federal unemployment tax rate 0.6%.", "Because most employees earn more than the $7,000 taxable wage ceiling in a calendar year, the FUTA tax typically is $42 per worker per year ($7,000 \u00d7 0.6%), or just over 2 cents per hour for a full-time, year-round worker."], "subsections": []}]}]}, {"section_title": "States Required to Pay UC Benefits", "paragraphs": ["States have a great deal of autonomy in how they establish and run their unemployment insurance programs. However, the framework established by federal laws is clear and requires states to promptly pay the UC benefits as provided under state law.", "In budgetary terms, UC benefits are an entitlement (although the program is financed by a dedicated tax imposed on employers and not by general revenue). Thus, even if a recession hits a given state and, as a result, that state's trust fund account is depleted, the state remains legally required to continue paying benefits. To do so, the state might borrow money either from the dedicated loan account within the UTF or from outside sources.", "If the state chooses to borrow funds from the UTF, not only will the state be required to continue paying benefits, it also will be required to repay the funds (plus any interest due) it has borrowed from the federal loan account within a few years. Such states may need to raise taxes on their employers or reduce UC benefit levels, actions that dampen economic growth, job creation, and consumer demand. In short, states have strong incentives to keep adequate funds in their trust fund accounts.", "If the state borrows from sources outside the UTF, the state would not be subject to the loan restrictions described below. Instead, the state would be subject to the terms within that outside loan agreement, which might offer a different (more favorable) interest rate or repayment schedule but may include fees to establish the loan."], "subsections": []}]}, {"section_title": "Funds Available for Loans to States Within the UTF", "paragraphs": ["The Federal Unemployment Account (FUA) is the federal loan account within the UTF. The FUA is primarily funded from the statutory transfer of excess revenue from the Extended Unemployment Compensation Account (EUCA) being deposited into the FUA. ", "If needed, the FUA may borrow funds from other federal accounts within the UTF or from the general fund of the U.S. Treasury. From FY2009 to FY2015, the FUA had to borrow funds from the U.S. Treasury to finance loans to the state accounts.", "1. Revenue from additional FUTA taxes paid by employers when a reduced credit against federal unemployment taxes exists because the state has an outstanding unpaid loan from FUA is deposited into the FUA. (See the discussion below on \" Federal Tax Increases on Outstanding Loans Through Credit\u00a0Reductions \" for a more detailed explanation of these additional taxes.) 2. Federal law allows the FUA to borrow available funds from the other federal (EUCA and ESAA) accounts within the UTF. 3. Federal law also authorizes appropriations as loans from the general fund of the U.S. Treasury if balances in the federal accounts are insufficient to cover their expenditures. (For example, if the states' borrowing needs exceed the available FUA balance.) Such appropriations require discretionary action by Congress and the President."], "subsections": []}, {"section_title": "Mechanism for Receiving a Loan from the UTF", "paragraphs": ["Once a state recognizes that it does not have sufficient funds to pay UC benefits, the mechanism for receiving a loan from the UTF is straightforward. The state's governor (or the governor's designee) must submit a letter requesting that the U.S. Labor Secretary advance funds to the state account within the UTF. Once the loan is approved by the U.S. Labor Secretary, the funds are placed into the state account in monthly increments."], "subsections": []}, {"section_title": "Loan Repayment", "paragraphs": ["States with outstanding loans from the UTF must repay them fully by the November 10 following the second consecutive January 1 on which the state has an outstanding loan. If the outstanding loan is not repaid by that time, the state will face an effective federal tax increase. Thus, a state may have approximately 22 months (if borrowing began on January 1) to 34 months (if borrowing began on January 2) to repay the loan without a federal tax increase, depending on when it obtained the outstanding loan. ", "As of January 29, 2019, approximately $68.3 million in federal UTF loans to the states were outstanding. A current list of states with outstanding loans may be found at the Department of Labor's (DOL's) website, https://oui.doleta.gov/unemploy/budget.asp ."], "subsections": [{"section_title": "Federal Tax Increases on Outstanding Loans Through Credit Reductions", "paragraphs": ["If the state does not repay a loan by November 10 of the second year, the state becomes subject to a reduction in the amount of state unemployment tax credit applied against the federal unemployment tax beginning with the preceding January 1 until the state repays the loan fully. Depending on the duration of the loan and certain other measures, one or more of three different credit reductions may be required. These reductions are fully catalogued in Table 1 . At the height of the period following the most recent recession (2011), 20 states and the Virgin Islands faced increased FUTA rates because of outstanding UTF loans. "], "subsections": [{"section_title": "Basic Credit Reduction", "paragraphs": ["The credit reduction is initially a 0.3 percentage point reduction for the year beginning with the calendar year in which the second consecutive January 1 passes during which the loan is outstanding and increases by a 0.3 percentage point reduction for each year there is an outstanding loan. For example, in the first year, the credit reduction results in the net federal tax rate increasing from 0.6% to 0.9%\u2014an additional $21 for each employee; in the second year, it would increase to 1.2%\u2014a cumulative additional $42 for each employee."], "subsections": []}, {"section_title": "Additional Credit Reductions: 2.7 Add-on and Benefit-Cost Ratio Add-on", "paragraphs": ["Two potential other credit reductions exist (in addition to the cumulative 0.3 percentage point increases) during the ensuing calendar years in which a state has an outstanding loan: ", "1. Beginning in the third year, the 2.7 add-on uses a statutory formula that takes into consideration the average annual wages and average employment contribution rate. 2. Beginning in the fifth year, the Benefit-Cost Ratio (BCR) add-on replaces the 2.7 add-on and uses the five-year benefit-cost rate as well as average wages in its calculation. ", " Table 1 presents these reductions and the subsequent net FUTA tax faced by state employers as a result of these unpaid loans. If any January 1 passes without an outstanding balance, the year count starts over with the next loan. DOL maintains a list of potential reduced credit states at http://workforcesecurity.doleta.gov/unemploy/docs/reduced_credit_states.xlsx . "], "subsections": []}, {"section_title": "Avoiding Some or All of the Credit Reduction", "paragraphs": ["Section 272 of P.L. 97-248 allows a delinquent state the option of repaying\u2014on or before November 9\u2014a portion of its outstanding loans each year through transfer of a specified amount from its account in the UTF to the FUA.", "If the state complies with all the requirements listed below, the potential credit reduction is avoided (there is no reduction):", "The state must repay all loans for the most recent one-year period ending on November 9, plus the potential additional taxes that would have been imposed for the tax year based upon a state tax credit reduction. The state must have sufficient amounts in the state account of the UTF to pay all compensation for the last quarter of that calendar year without receiving a loan. The state also must have altered its state law to increase the net solvency of its account with the UTF.", "From 2011 through 2014, South Carolina met these requirements. As a result, employers in South Carolina were not subject to a state tax credit reduction in the calculation of their FUTA taxes. (Generally, employers in South Carolina would have paid more in state unemployment taxes to meet these requirements.)"], "subsections": [{"section_title": "Avoiding Credit Reduction: Cap", "paragraphs": ["Once a state begins to have a credit reduction, the state may apply to have the reductions capped if the state meets four criteria:", "No legislative or other action in 12 months ending September 30 has been taken to decrease the state's unemployment tax effort. (A state cannot actively decrease its expected state unemployment tax revenue from current law.) No legislative or other action has been taken to decrease the net solvency of the state's trust fund account. (For example, the state would not be allowed to actively increase the average UC benefit amount from current law requirements.) Average state unemployment tax rate on total wages must exceed the five-year average benefit-cost rate on total wages. Balance of outstanding loans as of September 30 must not be greater than the balance three years before."], "subsections": []}, {"section_title": "Waiving the BCR Add-on", "paragraphs": ["The BCR add-on may be waived if the Secretary of Labor determines the state did not take legislative or other actions to decrease the net solvency of the state's trust fund account. The 2.7 add-on would then replace the BCR add-on."], "subsections": []}]}, {"section_title": "Revenue from Credit Reductions Reduces State UTF Loans", "paragraphs": ["The additional federal taxes attributable to the credit reduction are applied against the state's outstanding UTF loan. Thus, although technically employers are paying additional FUTA taxes, the additional tax pays off a state's debt. The state's employers will pay the additional federal taxes resulting from the credit reduction no later than January 31 of the next calendar year."], "subsections": []}]}]}, {"section_title": "Interest Charges on Loans", "paragraphs": ["Since April 1, 1982 ( P.L. 97-35 as amended), states have been charged interest on new loans that are not repaid by the end of the fiscal year in which they were obtained. (Before April 1, 1982, states could receive these loans interest free.) ", "The interest is the same rate as that paid by the federal government on state reserves in the UTF for the quarter ending December 31 of the preceding year but not higher than 10% per annum. The interest rate for calendar year loans is determined by Section 1202(b)(4) of the Social Security Act. The interest rate for a calendar year is the earnings yield on the UTF for the quarter ending December 31 of the previous calendar year. The U.S. Treasury Department calculated the fourth-quarter earnings yield in 2018 to be 2.3081%. Thus, loans made in calendar year 2019 are subject to an interest rate of 2.3081%.", "States may not pay the interest directly or indirectly from SUTA revenue or funds in their state account within the UTF. If a state does not repay the interest, or if it pays the interest with funds from SUTA taxes, DOL is required by federal law to refuse to certify that state's program as being in compliance with federal law. Not being in compliance with federal unemployment law would mean that the state would not be eligible to receive administrative grants and employers in that state would not receive the state unemployment tax credit in the calculation of their federal unemployment taxes. ", "States may borrow funds without interest from the UTF during the year. To receive these interest-free loans, the states must meet five conditions:", "1. The states must repay the loans by September 30.", "2. For those repaid (by September 30) loans to maintain their interest-free status, there cannot be any loans made to that state in October, November, or December of the calendar year of such an interest-free loan. If loans are made in the last quarter of the calendar year, the \"interest-free\" loans made in the previous fiscal year will retroactively accrue interest charges.", "3. The states must meet funding goals relating to their account in the UTF, established under regulations issued by DOL.", "In addition to these first three requirements, the phase-in of two new requirements began in 2014. The full effect of the requirements began in 2019. ", "4. States must have had at least one year in the past five calendar years before the year in which advances are taken in which the Average High Cost Multiple (AHCM) was greater than or equal to 1.0. ", "5. Additionally, states must meet two criteria for maintenance-of-tax effort in every year from the most recent year the AHCM was at least 1.0 and the year in which loans are taken.", "a. The average state unemployment tax rate (total state unemployment tax amount collected over total taxable wages) was at least 80% of the prior year's rate. ", "b. The average state unemployment tax rate was at least 75% of the average benefit-cost ratio over the preceding five calendar years, where the benefit-cost ratio for a year is defined as the amount of benefits and interest paid in the year divided by the total covered wages paid in the year."], "subsections": []}, {"section_title": "Status of Outstanding Loans, Accrued Interest Owed, and State Tax Credit Reductions", "paragraphs": [" Table 2 lists outstanding state loans. (At this time, only the U.S. Virgin Islands has an outstanding loan.) The table also includes information on accrued interest payments for FY2019. The third column provides information on whether the state was subject to a credit reduction for tax year 2018. The last column provides the net FUTA tax faced by employers in each state that had an outstanding loan. "], "subsections": []}]}}
{"id": "R45294", "title": "HUD FY2019 Appropriations: In Brief ", "released_date": "2019-04-02T00:00:00", "summary": ["The programs and activities of the Department of Housing and Urban Development (HUD) are designed primarily to address housing problems faced by households with very low incomes or other special housing needs and to expand access to homeownership. Nearly all of the department's budget comes from discretionary appropriations provided each year in the annual appropriations acts, typically as a part of the Transportation, HUD, and Related Agencies appropriations bill (THUD).", "On February 12, 2018, the Trump Administration submitted its FY2019 budget request to Congress, including $41.4 billion in gross new budget authority for HUD (not accounting for savings from offsets or rescissions). That is about $11.3 billion (21.5%) less than was provided in FY2018. Most of that reduction ($7.7 billion) is attributable to proposed program eliminations, including Community Development Block Grants (CDBG), the HOME Investment Partnerships grant program, Public Housing Capital Funding, Choice Neighborhoods grants, and the programs funded in the Self-Help Homeownership Opportunity Program (SHOP) account.", "On May 23, 2018, the House Appropriations Committee approved its version of a FY2019 THUD appropriations bill ( H.R. 6072 ; H.Rept. 115-750 ), which proposed $53.2 billion in gross funding for HUD. This was about 29% more in gross funding than was requested by the President and slightly more (1%) than was provided in FY2018. The bill did not include the program eliminations proposed by the President, and instead proposed to fund CDBG and the Public Housing Capital Fund at FY2018 levels while reducing funding for the HOME and SHOP accounts (-12% and -7%, respectively).", "On August 1, 2018, the Senate approved H.R. 6147 , the Financial Services Appropriations bill, which had been amended to include the Senate Appropriations Committee-approved version of a FY2019 THUD appropriations bill ( S. 3023 , incorporated as Division D), along with three other appropriations bills. It included more than $54 billion in gross funding for HUD. This is 30% more in gross funding than was requested by the President, and about 2.5% more than was provided in FY2018. Like H.R. 6072 , the Senate-passed bill did not include the President's proposed program eliminations, and instead proposed to fund those programs at their prior-year levels.", "Final FY2019 appropriations were not completed before the start of the fiscal year. Funding for HUD and most other federal agencies was continued under a series of continuing resolutions until December 21, 2018, at which point funding lapsed and a partial government shutdown commenced. It continued until January 25, 2019, when another short-term continuing resolution was enacted. Final FY2019 HUD appropriations were enacted on February 15, 2019 as a part of the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ).", "Appropriations for Selected HUD Accounts, FY2018-FY2019 (dollars in millions)"], "reports": {"section_title": "", "paragraphs": ["M ost of the funding for the activities of the Department of Housing and Urban Development (HUD) comes from discretionary appropriations provided each year in annual appropriations acts, typically as a part of the Transportation, HUD, and Related Agencies appropriations bill (THUD). ", "HUD's programs are designed primarily to address housing problems faced by households with very low incomes or other special housing needs and to expand access to homeownership. Three main rental assistance programs\u2014Section 8 tenant-based rental assistance (which funds Section 8 Housing Choice Vouchers), Section 8 project-based rental assistance, and public housing\u2014account for the majority of the department's funding (about 78% of total HUD appropriations in FY2018; see Figure 1 ). All three programs provide deep subsidies allowing low-income recipients to pay below-market, income-based rents. Additional, smaller programs are targeted specifically to persons who are elderly and persons with disabilities.", "Two flexible block grant programs\u2014the HOME Investment Partnerships grant program and the Community Development Block Grant (CDBG) program\u2014help states and local governments finance a variety of housing and community development activities designed to serve low-income families. Following disasters, special supplemental CDBG disaster recovery (CDBG-DR) grants are funded by Congress to help communities rebuild damaged housing and community infrastructure. Native American tribes receive their own direct housing grants through the Native American Housing Block Grant.", "Other, more-specialized grant programs help communities meet the needs of homeless persons, through the Homeless Assistance Grants and the Continuum of Care and Emergency Solutions Grants programs, as well as those living with HIV/AIDS. Additional programs fund fair housing enforcement activities and healthy homes activities, including lead-based paint hazard identification and remediation.", "HUD's Federal Housing Administration (FHA) insures mortgages made by lenders to homebuyers with low down payments and to developers of multifamily rental buildings containing relatively affordable units. FHA collects fees from insured borrowers, which are used to sustain its insurance funds. Surplus FHA funds have been used to offset the cost of the HUD\u00a0budget. ", "This In Brief report tracks progress on FY2019 HUD appropriations and provides detailed account-level, and in some cases subaccount-level, funding information ( Table 1 ) as well as a discussion of selected key issues. ", "For more information about the Transportation, HUD, and Related Agencies appropriations bill see CRS Report R45487, Transportation, Housing and Urban Development, and Related Agencies (THUD) Appropriations for FY2019: In Brief , by Maggie McCarty and David Randall Peterman. For more information on trends in HUD funding, see CRS Report R42542, Department of Housing and Urban Development (HUD): Funding Trends Since FY2002 . ", "Figure 1. Composition of HUD's Budget, FY2018Gross Budget AuthoritySource: Prepared by CRS, based on data in Table 1.Notes: Primary rental assistance programs include Tenant-based Rental Assistance (Housing Choice Voucher Program), Public Housing Capital Fund, Public Housing Operating Fund, Choice Neighborhoods, Family Self Sufficiency Program, and Project-based Rental Assistance. Formula grants include CDBG, HOME, Homeless Assistance Grants, Housing for Persons with AIDS (HOPWA), and Native American Housing Block Grants. Other programs and activities encompass the remainder of HUD accounts."], "subsections": [{"section_title": "Status of Appropriations", "paragraphs": ["The FY2019 appropriations process spanned two Congresses, both of which took action, as summarized below."], "subsections": [{"section_title": "Action in the 115th Congress", "paragraphs": [], "subsections": [{"section_title": "President's Budget", "paragraphs": ["On February 12, 2018, the Trump Administration submitted its FY2019 budget request to Congress. The budget request was released before final FY2018 appropriations were enacted and shortly after enactment of the Bipartisan Budget Act of FY2018 (BBA; P.L. 115-123 ), which, among other things, increased the statutory limits on discretionary spending for FY2018 and FY2019. ", "The President's FY2019 request proposed $41.4 billion in gross discretionary appropriations for HUD, which is the amount of new budget authority available for HUD programs and activities, not accounting for savings from offsets and other sources. That amount is about $11.3 billion (21.5%) less than was provided in FY2018. Most of that reduction ($7.7 billion) is attributable to program eliminations proposed by the President, including CDBG, HOME, Public Housing Capital Funding, Choice Neighborhoods grants, and the programs funded in the Self-Help Homeownership Opportunity Program (SHOP) account."], "subsections": []}, {"section_title": "House Action", "paragraphs": ["On May 23, 2018, the House Appropriations Committee approved its version of a FY2019 THUD appropriations bill ( H.R. 6072 ; H.Rept. 115-750 ), about a week after THUD subcommittee approval (May 16, 2018). The bill included $53.2 billion in gross funding for HUD, or $43.7 billion after accounting for savings from offsets and rescissions. This is about 29% more in gross funding than was requested by the President and slightly more (1%) than was provided in FY2018. The bill did not include the program eliminations proposed by the President, and instead funded CDBG and the Public Housing Capital Fund at FY2018 levels while reducing funding for the HOME and SHOP accounts (-12% and -7%, respectively). "], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["On June 7, 2018, the Senate Appropriations Committee approved its version of a FY2019 THUD appropriations bill ( S. 3023 ; S.Rept. 115-268 ), two days after THUD subcommittee approval. It included more than $54 billion in gross funding for HUD, or $44.5 billion after accounting for savings from offsets and rescissions. This is 30% more in gross funding than was requested by the President, and about 2.5% more than was provided in FY2018. Like the House committee-passed bill, S. 3023 did not include the President's proposed program eliminations, and instead proposed funding those programs at their prior-year levels.", "On August 1, 2018, the Senate approved H.R. 6147 , the Financial Services Appropriations bill, which was amended to include four regular appropriations acts, including the text of S. 3023 as Division D. Several HUD-related amendments were approved during floor consideration, none of which changed funding levels. "], "subsections": []}, {"section_title": "Continuing Resolutions and Funding Lapse", "paragraphs": ["On September 28, 2018, a continuing resolution (CR) through December 7, 2018, was enacted as part of a consolidated full-year Defense and Labor, Health and Human Services, and Education spending bill ( P.L. 115-245 , Division C). The CR covered the agencies and activities generally funded under seven regular FY2019 appropriations bills that had not been enacted before the end of the fiscal year, including THUD.", "On December 7, 2018, the previous CR was extended through December 21, 2018 ( P.L. 115-298 ).", "No further funding action was completed before the expiration of the CR on December 21, 2018, and a funding lapse affecting the unfunded portions of the federal government, including HUD, commenced on December 22, 2018."], "subsections": []}]}, {"section_title": "116th Congress", "paragraphs": [], "subsections": [{"section_title": "Legislative Action During the Funding Lapse", "paragraphs": ["Following the start of the 116 th Congress and during the funding lapse, the House passed several full-year THUD funding bills, none of which were taken up in the Senate. These include the following:", "H.R. 21 , an omnibus funding bill, which included THUD language identical to that which had passed the Senate in the 115 th Congress in H.R. 6147 ; H.R. 267 , a standalone THUD bill, again containing language identical to the 115 th Congress Senate-passed THUD language; and H.R. 648 , an omnibus funding bill containing provisions and funding levels characterized by the chairwoman of the House Appropriations Committee as reflecting House-Senate conference negotiations on H.R. 6147 from the 115 th Congress. (The Transportation, HUD, and Related Agencies Appropriations Act of 2019 was included as Division F.)", "On January 16, 2019, the House passed H.R. 268 , a supplemental appropriations bill. As passed by the House, the bill would have provided supplemental appropriations to HUD (as well as other agencies) in response to the major disasters of 2018. The bill also contained CR provisions to extend regular appropriations through February 8, 2019, for agencies and programs affected by the funding lapse.", "On January 24, 2019, the Senate considered H.R. 268 , the supplemental appropriations bill that previously passed the House. One amendment, S.Amdt. 5 , offered by Senator Shelby, included additional funding for border security, as well as full-year appropriations for those agencies affected by the funding lapse. The THUD provisions in Division G were identical to those that had passed the Senate in the 115 th Congress in H.R. 6147 . The Senate voted not to invoke cloture on S.Amdt. 5 on January 24, 2019."], "subsections": []}, {"section_title": "Enactment of Third Continuing Resolution", "paragraphs": ["Late on January 25, 2019, a CR ( H.J.Res. 28 ; P.L. 116-5 ) was enacted, providing funding through February 15, 2019, for THUD and the six other funding bills that had not received full-year funding, allowing HUD and the other agencies that had been subject to the funding lapse to resume full operations."], "subsections": []}, {"section_title": "Enactment of Full-Year Appropriations", "paragraphs": ["On February 15, 2019, the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) was enacted providing full-year appropriations for the remaining agencies that had lacked full-year appropriations. The Transportation, HUD, and Related Agencies Appropriations Act of 2019 was included as Division G and its text mirrored that of H.R. 648 ."], "subsections": []}]}]}, {"section_title": "Selected Issues", "paragraphs": [], "subsections": [{"section_title": "Housing Choice Voucher Renewal Funding", "paragraphs": ["The cost of renewing existing Section 8 Housing Choice Vouchers is generally one of the most high-profile HUD funding issues each year. It is the largest single expense in the largest account (the tenant-based rental assistance account) in HUD's budget. All of the roughly 2 million portable rental vouchers that are currently authorized and in use are funded annually, so for the low-income families currently renting housing with their vouchers to continue to receive assistance (i.e., renew their leases at the end of the year), new funding is needed each year. ", "If the amount ultimately provided proves to be less than the amount needed to fund all vouchers currently in use, then several things may happen. The Public Housing Authorities (PHAs)\u2014the state-chartered entities that administer the program at the local level\u2014with reserve funding from prior years, may spend some of those reserves to maintain current services. PHAs without reserve funding may apply to HUD for a share of the set-aside funding that is generally provided in the annual appropriations acts to the department and allowed to be used to prevent termination of assistance. And PHAs may undertake cost-saving measures, such as not reissuing vouchers to families on their waiting lists when currently assisted families leave the program. Conversely, if the amount is greater than the amount needed to renew existing vouchers, PHAs may be able to serve additional families from their waiting lists.", "Although the President's budget request, the House committee-reported HUD appropriations bill, and the Senate bill all included different funding levels for voucher renewals for FY2019, each purported to provide enough to fund all vouchers currently in use. The final FY2019 enacted funding level was $22.598 billion, an amount between the House committee-reported and Senate-passed levels. Advocacy groups have estimated that the amount provided will be enough at least to renew all existing voucher holders' leases, as well as potentially serve some additional families."], "subsections": []}, {"section_title": "Funding for Public Housing", "paragraphs": ["The low-rent public housing program houses approximately 1 million families in properties owned by local PHAs but subsidized by the federal government. PHAs' budgets for public housing are made up of rent paid by tenants and formula grant funding from the federal government to make up the difference between the rents collected from tenants and the cost of maintaining the properties. The two primary formula funding programs are Operating Fund program and Capital Fund program. Additionally, PHAs may apply for competitive Choice Neighborhood Initiative grants.", "The largest source of federal funding to support the low-rent public housing program is provided through the public housing Operating Fund account. Operating funds are allocated to PHAs according to a formula that estimates what it should cost PHAs to maintain their public housing properties based on the characteristics of those properties. When the amount of appropriations provided is insufficient to fully fund the amount PHAs qualify for under the formula, their allocation is prorated. Assuming the Operating Fund formula accurately reflects the costs of maintaining public housing, less than full funding means PHAs either will not be able to meet their full operating needs (e.g., maintenance, staffing, services for residents) or will have to spend down reserves they may have accumulated or seek other sources of funding.", "According to HUD's Congressional Budget Justifications, the amount requested in the President's budget for the Operating Fund for FY2019 (a 28% decrease from FY2018) would be sufficient to fund an estimated 54% of PHAs' formula eligibility in CY2019 (the program runs on a calendar year basis). Both the House committee-passed bill and the Senate bill proposed more funding than requested, but neither proposed the full amount the President's budget estimated would be needed to fully fund PHAs' formula eligibility in CY2019. The final HUD appropriations law provided $4.65 billion for operating funding in FY2019, which is more than the House committee-passed bill, but less than the Senate level. While it is not expected to fund 100% of formula eligibility in CY2019, the funding increase may result in a higher proration level than CY2018.", "The other major source of federal funding for public housing is the Capital Fund. Capital Fund formula grants are used to meet the major modernization needs of public housing, beyond the day-to-day maintenance expenses included among operating expenses. The most recent national assessment of public housing capital needs sponsored by HUD found that inadequate funding had resulted in a backlog of about $25.6 billion in capital/modernization needs across the public housing stock, with new needs accruing nationally at a rate of about $3.4 billion per year.", "For FY2019, the President's budget requested no funding for the Capital Fund, citing federal fiscal constraints and a desire to \"strategically reduce the footprint of Public Housing.\" Both the House committee bill and the Senate bill would have provided funding for the Capital Fund, with H.Rept. 115-750 explicitly stating that it rejected the Administration's proposed strategic reduction of public housing. The final FY2019 appropriations law provided $2.775 billion for the Capital Fund, a $25 million increase over FY2018 funding. That $25 million is provided as a set-aside to provide grants to PHAs to address lead hazards in public housing.", "Similarly, the Administration's budget requested no new funding for competitive Choice Neighborhoods grants that are used to redevelop distressed public housing and other assisted housing. Both the House committee bill and the Senate bill proposed to fund the program. The House committee bill proposed even funding with FY2018 ($150 million) and the Senate bill proposed a decrease in funding relative to FY2018 (a reduction of $50 million, or 33%). The final FY2019 appropriations law funded the account at the FY2018 level of $150 million."], "subsections": []}, {"section_title": "Funding for HUD Grant Programs", "paragraphs": ["The President's budget request included a proposal to eliminate funding for several HUD grant programs that support various affordable housing and community development activities. Most notable among these are HUD's two largest block grant programs for states and localities, CDBG and HOME, as well as competitive grants funded in the SHOP account (i.e., funding for sweat-equity programs, like Habitat for Humanity, and certain capacity building programs). These grant programs were also slated for elimination in the President's FY2018 budget request, although they were ultimately funded in FY2018.", "The press release accompanying the budget request suggested that the activities funded by these grant programs should be devolved to the state and local levels. Both the House committee bill and the Senate bill would have continued funding for these programs. The House committee bill would have provided level funding for CDBG, but funding reductions for the other accounts. The Senate bill would have provided level funding for all three accounts. Like the House committee and Senate bills, the final FY2019 appropriations law continued funding for all three accounts. In the case of CDBG and SHOP, it provided level funding with FY2018 at $3.365 billion and $54 million, respectively; in the case of HOME, the FY2019 law decreased funding by 8.2% relative to FY2018, bringing it down to $1.250 billion."], "subsections": []}, {"section_title": "FHA and Ginnie Mae Offsets", "paragraphs": ["Under the terms of the Budget Control Act, as amended, discretionary appropriations are generally subject to limits, or caps, on the amount of funding that can be provided in a fiscal year. In addition, the annual appropriations bills also are individually subject to limits on the funding within them that are associated with the annual congressional budget resolution. Congressional appropriators can keep these bills within their respective limits in a number of ways, including by providing less funding for certain purposes to allow for increases elsewhere in the bill. In certain circumstances, appropriators also can credit \"offsetting collections\" or \"offsetting receipts\" against the funding in the bill, thereby lowering the net amount of budget authority in that bill.", "In the THUD bill, the largest source of these offsets is generally the Federal Housing Administration (FHA).\u00a0FHA generates offsetting receipts when estimates suggest that the loans that it will insure during the fiscal year are expected to collect more in fees paid by borrowers than will be needed to pay default claims to lenders over the life of those loans. \u00a0While usually not as large a source, the Government National Mortgage Association (GNMA), or Ginnie Mae, generally provides significant offsets within the THUD bill as well. GNMA guarantees mortgage-backed securities made up of government-insured mortgages (such as FHA-insured mortgages) and similarly generates offsetting receipts when the associated fees it collects are estimated to exceed any payments made on its guarantee.", "The amount of offsets available from FHA and GNMA varies from year to year based on estimates of the amount of mortgages that FHA will insure, and that GNMA will guarantee, in a given year and how much those mortgages are expected to earn for the government. These estimates, in turn, are based on expectations about the housing market, the economy, the credit quality of borrowers, and relevant fee levels, most of which are factors outside of the immediate control of policymakers. If the amount of available offsets increases from one year to the next, then additional funds could be appropriated relative to the prior year's funding level while still maintaining the same overall net level of budget authority. If the amount of offsets decreases, however, then less funding would need to be appropriated relative to the prior year to avoid increasing the overall net level of budget authority, all else equal.", "For FY2019, the Congressional Budget Office (CBO) estimated that offsetting receipts available from FHA would be lower than in FY2018 ($7.6 billion compared to $8.3 billion) while the amount of offsets available from Ginnie Mae would be higher (about $2 billion compared to $1.7 billion). The total combined amount of offsets, then, was estimated at about $500 million less in FY2019 as compared to the prior year. As a result of this lower amount of offsets, the increase in net budget authority proposed in both the House committee bill and the Senate bill, as well as that ultimately provided by the final FY2019 appropriations law, as compared to FY2018 is greater than the increase in gross appropriations for HUD programs and activities. "], "subsections": []}]}]}}
{"id": "R45548", "title": "The Power Marketing Administrations: Background and Current Issues", "released_date": "2019-03-01T00:00:00", "summary": ["The federal government, through the Department of Energy, operates four regional power marketing administrations (PMAs), created by statute: the Bonneville Power Administration (BPA), the Southeastern Power Administration (SEPA), the Southwestern Power Administration (SWPA), and the Western Area Power Administration (WAPA). Each PMA operates in a distinct geographic area. Congressional interest in the PMAs has included diverse issues such as rate setting, cost and compliance associated with the Endangered Species Act (ESA; P.L. 93-205; 16 U.S.C. \u00a7\u00a71531 et seq.), and questions of privatization of these federal agencies.", "In general, the PMAs came into being because of the government's need to dispose of electric power produced by dams constructed largely for irrigation, flood control, or other purposes, and to achieve small community and farm electrification\u2014that is, providing service to customers whom it would not have been profitable for a private utility to serve. With minor exceptions, these agencies market the electric power produced by federal dams constructed, owned, and operated by the U.S. Army Corps of Engineers (Corps) and the Bureau of Reclamation (BOR). By statute, PMAs must give preference to public utility districts and cooperatives (e.g., \"preference customers\"), and sell their power at cost-based rates set at the lowest possible rate consistent with sound business principles. The Federal Energy Regulatory Commission regulates PMA rates to ensure that they are set high enough to repay the U.S. Treasury for the portion of federal facility costs allocated to hydropower beneficiaries.", "With energy and capacity markets changing in the western United States (especially with the growing need to integrate increasing amounts of variable renewable sources), and the development of the Energy Imbalance Market in the West, BPA and WAPA may have to adapt their plans with regard to generation needs and how transmission systems are developed.", "In 2018, the Trump Administration proposed to sell the transmission assets (lines, towers, substations, and/or rights of way) owned and operated by the federal Power Marketing Administrations. The proposal suggested that \"eliminating or reducing\" the federal government's role in owning and operating transmission assets, and increasing the private sector's role, would \"encourage a more efficient allocation of economic resources and mitigate unnecessary risk to taxpayers.\" The resulting PMA entities would then contract with other utilities to provide transmission services for the delivery of federal power, similar to what SEPA does currently. Reportedly, the proposed sale of PMA assets was dropped after opposition to the plan emerged from stakeholders. Under Section 208 of the Urgent Supplemental Appropriations Act, 1986 (P.L. 99-349), the executive branch is prohibited from spending funds to study or draft proposals to transfer from federal control any portion of the assets of the PMAs unless specifically authorized by Congress.", "Environmental, fishing, and tribal advocates have sued the federal government over concerns that operating rules for hydropower dams on the Columbia and Snake Rivers (i.e., the National Marine Fisheries Service Biological Opinion) are inadequate to ensure survival of species threatened or endangered under the ESA. In 2016, a federal judge overturned a previous management plan for the dams, finding that it would not be sufficient to protect salmon runs, and ordered a new management plan that could include removing the dams. However, in 2018, President Trump issued a Presidential Memorandum accelerating the process for a new management plan, requiring the biological opinion to be ready by 2020.", "Since FY2011, power revenues associated with the PMAs have been classified as discretionary offsetting receipts (i.e., receipts that are available for spending by the PMAs), thus the agencies are sometimes noted as having a \"net-zero\" spending authority. Only the capital expenses of WAPA and SWPA require appropriations from Congress."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The federal government, through the Department of Energy, operates four regional power marketing administrations (PMAs), created by statute: the Bonneville Power Administration (BPA), the Southeastern Power Administration (SEPA), the Southwestern Power Administration (SWPA), and the Western Area Power Administration (WAPA). Each PMA operates in a distinct geographic area of the coterminous United States (see Figure 1 ). Congressional interest in the PMAs has included diverse issues such as rate setting, cost and compliance associated with the Endangered Species Act (ESA; P.L. 93-205 ; 16 U.S.C. \u00a7\u00a71531 et seq.), and questions of privatization of these federal agencies.", "In general, the PMAs came into being because of the government's need to dispose of electric power produced by federal dams constructed largely for irrigation, flood control, or other purposes, and to achieve small community and farm electrification\u2014that is, providing service to customers whom it would not have been profitable for a private utility to serve. With minor exceptions, these agencies market the electric power produced by federal dams constructed, owned, and operated by the Corps of Engineers (Corps) and the U.S. Bureau of Reclamation (BOR). PMAs must give preference to public utility districts and cooperatives (e.g., \"preference customers\"), selling their power at cost-based rates set at the lowest possible rate consistent with sound business principles. The Federal Energy Regulatory Commission (FERC) regulates PMA rates to ensure that they are set high enough to repay the U.S. Treasury on schedule for the portion of federal facility costs that have been allocated to hydropower beneficiaries.", "Since FY2011, power revenues associated with the PMAs have been classified as discretionary offsetting receipts (i.e., receipts that are available for spending by the PMAs), thus the agencies are sometimes noted as having a \"net-zero\" spending authority. Only the capital expenses of WAPA and SWPA require appropriations from Congress.", "Each PMA also has unique elements and regional issues that affect its business. They are discussed in alphabetical order."], "subsections": []}, {"section_title": "Bonneville Power Administration", "paragraphs": ["Created by the Bonneville Project Act of 1937 (16 U.S.C. \u00a7832) just before the completion of two large dams in the Pacific Northwest\u2014Bonneville Dam in 1938 and Grand Coulee Dam in 1941\u2014BPA was the first PMA. Though it serves a smaller geographical area, BPA is on par with WAPA (which serves the largest area) in the size of its transmission system. The agency operates and maintains about 75% of the high voltage transmission lines in its service territory, which includes Idaho, Oregon, Washington, western Montana and small parts of eastern Montana, California, Nevada, Utah, and Wyoming. BPA also markets wholesale electricity from 31 federally owned hydropower facilities in the Northwest. These generation facilities are owned both by the Corps and BOR.", "BPA differs from the other three PMAs in that it is self-financed: it receives no federal appropriations. Since passage of the Federal Columbia River Transmission System Act of 1974 (16 U.S.C. \u00a7838), BPA has covered its operating costs through power rates set to ensure repayment to the Treasury of capital and interest on funds used to construct the Columbia River power system. BPA also has permanent Treasury borrowing authority, which it may use for capital on large projects. This money is repaid with interest, through power sales. ", "As of 2018, BPA had $5.53 billion of bonds outstanding to the U.S. Treasury, with BPA's current borrowing authority capped by Congress at $7.70 billion. BPA has also looked at other financing options as it approaches its debt limit, looking at nonfederal debt refinancing, lease-purchases, and other asset management strategies."], "subsections": [{"section_title": "Current Issues", "paragraphs": ["BPA has initiated strategies and a financial plan to address a changing power generation and demand market, as it endeavors to meet its mandate for cost-based electric power rates. These plans are outlined in its Strategic Plan for 2018 to 2023, and address goals from financial health to infrastructure modernization."], "subsections": [{"section_title": "Cost Competitiveness", "paragraphs": ["Wholesale power prices in the United States are generally trending downward, while BPA's firm power rates have trended upward. BPA repays its funding from the U.S. Treasury largely through electricity sales to customers. While BPA generates its electricity from hydropower (which is traditionally one of the lower-cost means of power generation), increasing amounts of renewable electricity from growing wind and solar capacity installations in the Pacific Northwest are challenging BPA's price competitiveness, and perhaps its ability to repay its debts in a timely manner."], "subsections": []}, {"section_title": "Regional Cooperation Debt", "paragraphs": ["In 2014, BPA entered into the Regional Cooperation Agreement (RCA) with the State of Washington to address the debt of Energy Northwest, a \"joint action agency formed by the Washington state legislature in 1957\" to manage public power utility costs. Energy Northwest owns and operates four electric power generation facilities: White Bluffs Solar Station, Packwood Lake Hydroelectric Project, Nine Canyon Wind Project, and the Columbia Generating Station. ", "The Regional Cooperation debt is \"the issuance of new bonds by Energy Northwest to refund outstanding bonds shortly before their maturities when substantial principal repayments were and are due.\" According to BPA, this allows for \"integrated debt management\" for the combined total debt portfolios of BPA and Energy Northwest, with a net effect reducing the \"weighted average interest rate and the maturity of BPA's overall debt portfolio\" over the life of the program. This refinancing, according to BPA, has enabled BPA to prepay higher-interest-rate federal obligations, and has \"preserved or restored U.S. Treasury borrowing authority.\" However, the debt service of the RCA is \"borne by BPA ratepayers through BPA rates.\" ", "BPA estimates that the \"aggregate potential principal amount\" of RCA refunding through bonds issued in fiscal years 2019 through 2030 could exceed $4.0 billion."], "subsections": []}, {"section_title": "Grid Balancing Role and Infrastructure Modernization", "paragraphs": ["BPA is responsible for maintaining and modernizing the generation and transmission infrastructure of its systems, and preserving and enhancing its physical and cybersecurity. With energy and capacity markets changing in the western United States (especially with the growing need to integrate increasing amounts of variable renewable sources), and the development of the Energy Imbalance Market (EIM) in the West, BPA is considering whether to join the EIM, and how this might affect its operations and customers. "], "subsections": []}, {"section_title": "Dams and Fish Endangerment", "paragraphs": ["Environmental, fishing, and tribal advocates have sued the federal government over concerns that operating rules for hydropower dams on the Columbia and Snake Rivers (i.e., operations consistent with the National Marine Fisheries Service Biological Opinion) are inadequate to ensure survival of species threatened or endangered under the Endangered Species Act. In addition, several environmental groups filed a lawsuit blaming the dams for warm river waters in summer 2015 that resulted in the deaths of about 250,000 adult sockeye salmon migrating up the Columbia and Snake Rivers. Some of these parties have sought to remove the four lower dams on the Snake River to ensure survival of some salmon and steelhead species. In 2016, a federal judge overturned a previous management plan for the dams, finding that it would not be sufficient to protect salmon runs, and ordered a new management plan that could include removing the dams. ", "However, in 2018, President Trump issued a Presidential Memorandum accelerating the process for a new management plan, requiring the biological opinion to be ready by 2020. The memorandum ordered the Secretary of the Interior and the Secretary of Commerce \"to appropriately suspend, revise, or rescind any regulations or procedures that unduly burden\" water infrastructure projects so they \"are better able to meet the demands of their authorized purposes.\" How this will affect the fish endangerment finding is unclear at this time."], "subsections": []}]}]}, {"section_title": "Southeastern Power Administration", "paragraphs": ["The Southeastern Power Administration was created in 1950 by the Secretary of the Interior to carry out the functions assigned to the Secretary by the Flood Control Act of 1944 (P.L. 78-534) in 11 states (Alabama, Florida, Georgia, Illinois, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia). SEPA is unique among the four PMAs in two ways. It is the smallest PMA, with just over 40 employees, and, unlike the other three agencies, SEPA does not operate or maintain any transmission facilities, and thus contracts with other utilities for transmitting the federal power it markets to more than 12 million consumers. "], "subsections": [{"section_title": "Current Issues", "paragraphs": ["Southeastern markets approximately 3,400 MW of power produced at 22 multipurpose water projects, operated and maintained by the Corps. SEPA's facilities are aging; for instance, in 2018 it reported that its Cumberland System customers have agreed to fund $1.2 billion of planned rehabilitations of the nine hydroelectric facilities in the Corps' Nashville District.", "According to SEPA, it has an overcapacity issue. Projections for electricity load growth (in consultation with its preference customers) made before the 2008 economic downturn reportedly led to SEPA acquiring additional capacity it currently does not use. As a result, municipalities and electric cooperatives in SEPA's service area will have to make economic decisions regarding how to handle this excess capacity. As of 2018, at least one preference customer has terminated its contract with SEPA due to this issue."], "subsections": []}]}, {"section_title": "Southwestern Power Administration", "paragraphs": ["Section 5 of the Flood Control Act of 1944 (P.L. 78-534) established the Southwestern Power Administration. SWPA markets hydroelectric power in Arkansas, Kansas, Louisiana, Missouri, Oklahoma, and Texas from 24 multipurpose Corps dams with a combined capacity of 2,194 MW. SWPA serves more than 100 preference customer utilities with more than 8 million end-use customers. The agency manages nearly 1,400 miles of high-voltage transmission lines. ", "SWPA is the only U.S. electrical balancing area supported solely by hydroelectric generation, and its use of the reservoirs and river systems within the SWPA marketing area must be balanced with flood control and other required uses so that the power needs of its customers can be met. SWPA states that it uses alternative financing and offsetting collection authorities to fund expenses and purchase power to help SWPA meet its obligations while minimizing congressional appropriations. "], "subsections": [{"section_title": "Current Issues", "paragraphs": ["Periodically, SWPA has been challenged by low water conditions. It has a rain-based water supply\u2014rather than one that is snow-based, like the mountain snowpack water supply of WAPA and BPA\u2014and sells power from a comparatively small reservoir system which stores that water. Extended dry periods sometimes mean that SWPA must purchase replacement power and energy to meet its contractual obligations. This means that SWPA requires congressional authority to use its revenues from power sales over the long term\u2014across high and low water years.", "Prior year balances have been available to Southwestern so that we are financially prepared and able to achieve rate stability for our customers. This authority is critical to operating our program according to sound business principles. Southwestern's program is funded by authority to use receipts, alternative financing, and other authorities approved by Congress, including appropriations, which represent only 6.5% of Southwestern's total program."], "subsections": []}]}, {"section_title": "Western Area Power Administration", "paragraphs": ["Created by the Department of Energy Organization Act of 1977 ( P.L. 95-91 ), WAPA is the newest and largest of the PMAs in terms of service area. WAPA's service area covers 1.3 million square miles, and its power\u2014transmitted by a high voltage grid over 17,000 miles long\u2014serves customers in 15 western states. WAPA markets and transmits hydropower from 56 federal dams operated by BOR, and the Corps. It also sells hydropower power produced by facilities administered by the International Boundary and Water Commission, and markets the United States' 24.3% share (547 megawatts) of the coal-fired Navajo Generating Station in Arizona. In addition to the types of public bodies traditionally served as preference customers by the other PMAs, WAPA has developed a policy to give preference to Native American tribes regardless of their utility status. "], "subsections": [{"section_title": "Current Issues", "paragraphs": ["WAPA has been working with other regional entities to address the changing electric power needs of its customers. In 2014, WAPA published its Strategic Roadmap 2024, titled \"Powering the Energy Frontier.\" The document is intended to serve as WAPA's strategic plan to guide the agency's actions for the next 10 years. However, according to some, the developing Energy Imbalance Market in the West may provide additional options for WAPA to address transmission development needs to balance regional generation and demand. "], "subsections": [{"section_title": "Transmission Congestion", "paragraphs": ["An issue of continuing importance to WAPA is its role in relieving transmission congestion within its marketing area. There are a number of constrained transmission paths in the West whose limited capacity to transfer power may reduce the ability of utilities to serve electric loads on a seasonal or ongoing basis. "], "subsections": []}, {"section_title": "Building Transmission to Access Renewable Energy", "paragraphs": ["In 2009, Section 402 of the American Recovery and Reinvestment Act ( P.L. 111-5 ) amended the Hoover Power Plant Act of 1984 to give WAPA authority to borrow up to $3.25 billion from the U.S. Treasury to pursue transmission projects that integrate renewable generation sources into the electric transmission grid. The law provides authority to construct and upgrade transmission lines to help deliver renewable resources to market. Western created the Transmission Infrastructure Program, also known as TIP, to implement this new initiative. Several transmission projects have been initiated under the program. Previous budget proposals and legislation have proposed repealing WAPA's loan authority, but to date, none of these proposals have been enacted."], "subsections": []}, {"section_title": "WAPA Region Joins the Southwest Power Pool", "paragraphs": ["In 2015, WAPA's Upper Great Plains (UGP) region joined the Southwest Power Pool (SPP), a Regional Transmission Organization (RTO). Under the operating agreement with SPP, WAPA was required to transfer functional control of UGP's eligible transmission facilities to SPP. WAPA is the first PMA to formally join an RTO, and states that benefits to date from joining SPP have significantly exceeded the original estimate of $11.5 million per year. WAPA reports that two of its other regions are considering joining SPP."], "subsections": []}, {"section_title": "Hydrology and Water Power", "paragraphs": ["For Water Year 2017, WAPA reported that it delivered 26,148 gigawatt-hours of hydroelectric power to its customers, which is 101% of average annual power sales.", "The West has been experiencing periodic droughts for a number of years, resulting in lower snowmelts and less water in storage and available for power generation. To help smooth the resulting annual differences, a \"drought-adder\" reduction program has been implemented in recent years.", "A drought-adder charge was levied to help repay deferred drought costs accrued during the 2000s in the Rocky Mountain and Upper Great Plains regions. The balance was paid a year ahead of schedule and, as of this year, has resulted in $40 million annual savings for more than 50 percent of WAPA's customers in Colorado, Wyoming, Montana, Kansas, Nebraska, the Dakotas and the western sections of Minnesota and Iowa. This is the second year that 417 of WAPA's customers, out of 700, have had a rate reduction. ", "The drought-adder component of the rate remains available to WAPA to adjust to the variable hydropower resource\u2014a lasting risk if drought conditions persist in WAPA's territory. Moderate to extreme drought conditions have been reported in parts of the western United States. "], "subsections": []}]}]}, {"section_title": "Proposed Power Marketing Administration Reforms", "paragraphs": ["In addition to issues specific to individual PMAs, some recent proposals have applied to multiple PMAs. In 2018, the Trump Administration proposed to sell the transmission assets owned and operated by the federal Power Marketing Administrations.", "The proposal suggested that \"eliminating or reducing\" the federal government's role in owning and operating transmission assets and increasing the private sector role would \"encourage a more efficient allocation of economic resources and mitigate unnecessary risk to taxpayers.\" The proposal calls for federal transmission infrastructure assets (lines, towers, substations, and/or rights of way) to be sold, with the private sector and/or state and local entities potentially taking over the transmission functions now provided by the PMAs.", "The Federal entities that would result after such sales could contract with other utilities to provide transmission service for the delivery of Federal power just as the Southeastern Power Administration, which does not own transmission lines, already does.", "The proposal reports that according to the Administration's FY2019 budget justification, the sale of federal transmission assets would result in a net budgetary savings of $9.5 billion, in total, over a 10-year window.", "Reportedly, the Administration dropped the plan due to stakeholder opposition, with the Department of Energy stating that such a sale of PMA transmission assets would not proceed unless directed by Congress.", "Proposals to sell all or part of the PMAs are not new, and have been made in some form by almost every President since Reagan. However, Congress has sought to prevent executive branch alterations of PMA structures and authority. Under Section 208 of the Urgent Supplemental Appropriations Act, 1986 ( P.L. 99-349 ), the executive branch is prohibited from spending funds to study or draft proposals to transfer from federal control any portion of the assets of the PMAs unless specifically authorized by Congress.", "The Trump Administration divestment proposal could have had an indirect impact on the original congressional intent for the PMAs to provide electricity at the lowest possible cost. This in turn could require changes to the following provisions: ", "Flood Control Act of 1944, as amended (FCA; 16 U.S.C. \u00a7825s et seq. ); The 1937 Bonneville Project Act (BPA; 16 U.S.C. \u00a7832c ); and The Reclamation Project Act of 1939 (RPA; 43 U.S.C. \u00a7485h(c)) .", "These laws also stipulate a preference of public bodies for the sale of federal power. Selling federally owned transmission assets could potentially affect the \"lowest possible\" rates of sale, and the statutory preference for publicly or cooperatively owned utilities to be the vehicle for sale of electric power produced by federal facilities."], "subsections": []}]}}
{"id": "R44533", "title": "Qatar: Governance, Security, and U.S. Policy", "released_date": "2019-04-11T00:00:00", "summary": ["The State of Qatar has employed its ample financial resources to exert regional influence separate from and independent of Saudi Arabia, the de facto leader of the Gulf Cooperation Council (GCC: Saudi Arabia, Kuwait, Qatar, United Arab Emirates, Bahrain, and Oman), an alliance of six Gulf monarchies. Qatar has intervened in several regional conflicts, including in Syria and Libya, and has engaged both Sunni Islamist and Iran-backed Shiite groups in Lebanon, Sudan, the Gaza Strip, Iraq, and Afghanistan. Qatar has maintained consistent dialogue with Iran while also supporting U.S. and GCC efforts to limit Iran's regional influence.", "Qatar's independent policies, which include supporting regional Muslim Brotherhood organizations and hosting a global media network often critical of Arab leaders called Al Jazeera, have caused a backlash against Qatar by Saudi Arabia and some other GCC members. A rift within the GCC opened on June 5, 2017, when Saudi Arabia, the UAE, and Bahrain, joined by Egypt and a few other governments, severed relations with Qatar and imposed limits on the entry and transit of Qatari nationals and vessels in their territories, waters, and airspace. The Trump Administration has sought, unsuccessfully to date, to mediate a resolution of the dispute. The rift has hindered U.S. efforts to hold another U.S.-GCC summit that would formalize a new \"Middle East Strategic Alliance\" of the United States, the GCC, and other Sunni-led countries in the region to counter Iran and other regional threats. Qatar has countered the Saudi-led pressure with new arms buys and deepening relations with Turkey and Iran.", "As do the other GCC leaders, Qatar's leaders have looked to the United States to guarantee their external security since the 1980s. Since 1992, the United States and Qatar have had a formal Defense Cooperation Agreement (DCA) that reportedly addresses a U.S. troop presence in Qatar, consideration of U.S. arms sales to Qatar, U.S. training, and other defense cooperation. Under the DCA, Qatar hosts about 13,000 U.S. forces and the regional headquarters for U.S. Central Command (CENTCOM) at various military facilities, including the large Al Udeid Air Base. U.S. forces in Qatar participate in all U.S. operations in the region. Qatar is a significant buyer of U.S.-made weaponry, including combat aircraft. In January 2018, Qatar and the United States inaugurated a \"Strategic Dialogue\" to strengthen the U.S.-Qatar defense partnership, which Qatar says might include permanent U.S. basing there. The second iteration of the dialogue, in January 2019, resulted in a U.S.-Qatar memorandum of understanding to expand Al Udeid Air Base to improve and expand accommodation for U.S. military personnel. Qatar signed a broad memorandum of understanding with the United States in 2017 to cooperate against international terrorism. That MOU appeared intended to counter assertions that Qatar's ties to regional Islamist movements support terrorism.", "The voluntary relinquishing of power in 2013 by Qatar's former Amir (ruler), Shaykh Hamad bin Khalifa Al Thani, departed from GCC patterns of governance in which leaders generally remain in power for life. However, Qatar is the only one of the smaller GCC states that has not yet held elections for a legislative body. U.S. and international reports criticize Qatar for failing to adhere to international standards of labor rights practices, but credit it for taking steps in 2018 to improve the conditions for expatriate workers.", "As are the other GCC states, Qatar is wrestling with the fluctuations in global hydrocarbons prices since 2014, now compounded by the Saudi-led embargo. Qatar is positioned to weather these headwinds because of its small population and substantial financial reserves. But, Qatar shares with virtually all the other GCC states a lack of economic diversification and reliance on revenues from sales of hydrocarbon products. On December 3, 2018, Qatar announced it would withdraw from the OPEC oil cartel in order to focus on its natural gas export sector."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Brief History", "paragraphs": ["Prior to 1867, Qatar was ruled by the family of the leaders of neighboring Bahrain, the Al Khalifa. That year, an uprising in the territory led the United Kingdom, then the main Western power in the Persian Gulf region, to install a leading Qatari family, the Al Thani, to rule over what is now Qatar. The Al Thani family claims descent from the central Arabian tribe of Banu Tamim, the tribe to which Shaykh Muhammad ibn Abd Al Wahhab, the founder of Wahhabism, belonged. Thus, Qatar officially subscribes to Wahhabism, a conservative Islamic tradition that it shares with Saudi Arabia. ", "In 1916, in the aftermath of World War I and the demise of the Ottoman Empire, Qatar and Britain signed an agreement under which Qatar formally became a British protectorate. In 1971, after Britain announced it would no longer exercise responsibility for Persian Gulf security, Qatar and Bahrain considered joining with the seven emirates (principalities) that were then called the \"Trucial States\" to form the United Arab Emirates. However, Qatar and Bahrain decided to become independent rather than join that union. The UAE was separately formed in late 1971. Qatar adopted its first written constitution in April 1970 and became fully independent on September 1, 1971. The United States opened an embassy in Doha in 1973. The last U.S. Ambassador to Qatar, Dana Shell Smith, resigned from that post in June 2017, reportedly over disagreements with the Trump Administration. Mary Catherine Phee has been nominated as a replacement. "], "subsections": []}, {"section_title": "Governance", "paragraphs": ["Qatar's governing structure approximates that of the other GCC states. The country is led by a hereditary Amir (literally \"prince,\" but interpreted as \"ruler\"), Shaykh Tamim bin Hamad Al Thani. He became ruler in June 2013 when his father, Amir Hamad bin Khalifa Al Thani, relinquished power voluntarily. The Amir governs through a prime minister, who is a member of the Al Thani family, and a cabinet, several of whom are members of the Al Thani family or of prominent allied families. Amir Tamim serves concurrently as Minister of Defense, although most of the defense policy functions are performed by the Minister of State for Defense, a position with less authority than that of full minister. In November 2014, Amir Tamim appointed a younger brother, Shaykh Abdullah bin Hamad, to be deputy Amir and the heir apparent. The Prime Minister, Shaykh Abdullah bin Nasir bin Khalifa Al Thani, also serves as Interior Minister. ", "There is dissent within the Al Thani family\u2014mostly from those of lineages linked to ousted former Qatari rulers\u2014but no significant challenge to Tamim's rule is evident. There were no significant protests in Qatar during the \"Arab Spring\" uprising of 2011 or since. Political parties are banned, and unlike in Kuwait and Bahrain, there are no well-defined \"political societies\" that act as the equivalent of parties. Political disagreements in Qatar are aired mainly in private as part of a process of consensus building in which the leadership tries to balance the interests of the various families and other constituencies. ", "Then-Amir Hamad put a revised constitution to a public referendum on April 29, 2003, achieving a 98% vote in favor. Nevertheless, it left in place significant limitations: for example, it affirms that Qatar is a hereditary emirate. Some Western experts also criticize Qatar's constitution for specifying Islamic law as the main source of legislation. The constitution stipulates that elections will be held for 30 of the 45 seats of the country's Advisory Council ( Majlis Ash-Shura ), a national legislative body, but elections have been repeatedly delayed. The elected Council is also to have broader powers, including the ability to remove ministers (two-thirds majority vote), to approve a national budget, and to draft and vote on proposed legislation that can become law (two-thirds majority vote and concurrence by the Amir). In 2008, it was agreed that naturalized Qataris who have been citizens for at least 10 years will be eligible to vote, and those whose fathers were born in Qatar will be eligible to run. Qatar is the only GCC state other than Saudi Arabia not to have held elections for any seats in a legislative body. ", "The country holds elections for a 29-seat Central Municipal Council. Elections for the fourth Council (each serving a four-year term) were held on May 13, 2015. The Central Municipal Council advises the Minister of Municipality and Urban Affairs on local public services. Voter registration and turnout\u201421,735 voters registered out of an estimate 150,000 eligible voters, and 15,171 of those voted\u2014were lower than expected, suggesting that citizens viewed the Council as lacking influence. The State Department stated that \"observers considered [the municipal council elections] free and fair.\""], "subsections": [{"section_title": "Human Rights Issues7", "paragraphs": ["Recent State Department reports identify the most significant human rights problems in the country as limits on the ability of citizens to choose their government in free and fair elections; restrictions on freedoms of assembly and association, including prohibitions on political parties and labor unions; restrictions on the rights of expatriate workers; and criminalization of consensual same-sex sexual activity. ", "A nominally independent, government-funded National Human Rights Committee (NHRC) investigates allegations of human rights abuses in the country. It is under the authority of the Qatar Foundation that was founded and is still run by the Amir's mother, Shaykha Moza. The NHRC also monitors the situation of about 1,000-2,000 stateless residents (\" bidoons \"), who are able to register for public services but cannot own property or travel freely to other GCC countries. Although the constitution provides for an independent judiciary, the Amir, based on recommended selections from the Supreme Judicial Council, appoints all judges, who hold their positions at his discretion."], "subsections": [{"section_title": "Freedom of Expression", "paragraphs": ["As have the other GCC states, Qatar has, since the 2011 \"Arab Spring\" uprisings, issued new laws that restrict freedom of expression and increase penalties for criticizing the ruling establishment. In 2014, the government approved a new cybercrimes law that provides for up to three years in prison for anyone convicted of threatening Qatar's security or of spreading \"false news.\" A November 2015 law increased penalties for removing or expressing contempt at the national flag or the GCC flag. In July 2017, the country held a national conference on freedom of expression at which, according to the State Department, members of international human rights organizations were able to criticize the country's human rights record.", "Al Jazeera. The government owns and continues to partially fund the Al Jazeera satellite television network, which has evolved into a global media conglomerate that features debates on controversial issues, as well as criticism of some Arab leaders. The State Department quotes \"some observers and former Al Jazeera employees\" as alleging that the government \"influences\" Al Jazeera content. Some Members of Congress have asserted that Al Jazeera is an arm of the Qatar government and that its U.S. bureau should be required to register under the Foreign Agents Registration Act (FARA). "], "subsections": []}, {"section_title": "Women's Rights", "paragraphs": ["According to the State Department, social and legal discrimination against women continues, despite the constitutional assertion of equality. No specific law criminalizes domestic violence, and a national housing law discriminates against women married to noncitizen men and divorced women. The laws criminalizes rape. Court testimony by women carries half the weight of that of a man. On the other hand, women in Qatar drive and own property, and constitute about 15% of business owners and more than a third of the overall workforce, including in professional positions. ", "Women serve in public office, such as minister of public health, chair of the Qatar Foundation, head of the General Authority for Museums, permanent representative to the United Nations, and ambassadors to Croatia and the Holy See. In November 2017, the Amir appointed four women to the national consultative council for the first time in the legislative body's history. However, most of the other small GCC states have more than one female minister. "], "subsections": []}, {"section_title": "Trafficking in Persons and Labor Issues11", "paragraphs": ["The State Department's Trafficking in Persons report for 2018 upgraded Qatar's ranking to Tier 2 from Tier 2: Watch List, on the basis that the government has made significant efforts to comply with the minimum standards for the elimination of trafficking over the past year. Qatar enacted a Domestic Worker Law to better protect domestic workers and, in recent years, it also established a coordinating body to oversee and facilitate anti-trafficking initiatives and enacting a law that reforms the sponsorship system to significantly reduce vulnerability to forced labor. ", "But Qatar remains a destination country for men and women subjected to forced labor and, to a much lesser extent, forced prostitution. Female domestic workers are particularly vulnerable to trafficking due to their isolation in private residences and lack of protection under Qatari labor laws. In the course of the January 2018 U.S.-Qatar \"Strategic Dialogue,\" the two countries signed a memorandum of understanding to create a framework to combat trafficking in persons. ", "The State Department assesses Qatar's labor rights as not adequately protecting the rights of workers to form and join independent unions, conduct legal strikes, or bargain collectively. Qatari law does not prohibit antiunion discrimination or provide for reinstatement of workers fired for union activity. The single permitted trade union, the General Union of Workers of Qatar, is assessed as \"not functioning.\" International scrutiny of Qatar's labor practices has increased as Qatar makes preparations to host the 2022 FIFA World Cup soccer tournament; additional engineers, construction workers, and other laborers have been hired to work in Qatar. Some workers report not being paid for work and a lack of dispute resolution, causing salary delays or nonpayment. Some human rights groups have criticized Qatar for allowing outdoor work (primarily construction) in very hot weather. ", "Yet, the State Department credits the country with taking steps to protect labor rights, including for expatriate workers. In December 2016, a labor reform went into effect that offers greater protections for foreign workers by changing the \" kafala \" system (sponsorship requirement for foreign workers) to enable employees to switch employers at the end of their labor contracts rather than having to leave Qatar when their contracts end. In 2018, the government established and is funding several housing sites to replace unsafe temporary housing for expatriate workers. The government also has stepped up arrests and prosecutions of individuals for suspected labor law violations, and has increased its cooperation with the ILO to take in worker complaints and better inform expatriate workers of their rights. "], "subsections": []}, {"section_title": "Religious Freedom14", "paragraphs": ["Qatar's constitution stipulates that Islam is the state religion and Islamic law is \"a main source of legislation,\" but Qatari laws incorporate secular legal traditions as well as Islamic law. The law recognizes only Islam, Christianity, and Judaism. The overwhelming majority (as much as 95%) of Qatari citizens are Sunni Muslims, possibly explaining why there have been no signs of sectarian schisms within the citizenry. The government permits eight registered Christian denominations to worship publicly at the Mesaymir Religious Complex (commonly referred to as \"Church City\"), and it has allowed the Evangelical Churches Alliance of Qatar to build a church.", "Jews and adherents of unrecognized religions\u2014such as Hindus, Buddhists, and Baha'is\u2014are allowed to worship privately but do not have authorized facilities in which to practice their religions. Qatari officials state that they are open to considering the creation of dedicated worship spaces for Hindus, Jews, and Buddhists and that any organized, non-Muslim religious group could use the same process as Christians to apply for official registration. Members of at least one group reportedly filed for land in previous years to build their own complex but received no response from the government."], "subsections": []}]}]}, {"section_title": "Foreign Policy", "paragraphs": ["Qatar uses its financial resources to implement a foreign policy that engages a wide range of regional actors, including those that are at odds with each other. Qatari officials periodically meet with Israeli officials while at the same hosting leaders of the Palestinian militant group, Hamas. Qatar maintains consistent ties to Iran while at the same time hosting U.S. forces that contain Iran's military power. Qatar hosts an office of the Afghan Taliban movement that facilitates U.S.-Taliban talks. Its policies have enabled Qatar to mediate some regional conflicts and to obtain the freedom of captives held by regional armed groups. Yet, Qatar often backs regional actors at odds with those backed by de facto GCC leader Saudi Arabia and other GCC states, causing Saudi Arabia and its close allies in the GCC to accuse Qatar of undermining the other GCC countries. As have some of the other GCC states, Qatar has shown an increasing willingness to use its own military forces to try to shape the outcome of regional conflicts."], "subsections": [{"section_title": "Qatar and the Intra-GCC Dispute", "paragraphs": ["A consistent source of friction within the GCC has been Qatar's embrace of Muslim Brotherhood movements as representing a moderate political Islamist movement that can foster regional stability. Qatar hosts Islamists who adhere to the Brotherhood's traditions, including the aging, outspoken Egyptian cleric Yusuf al-Qaradawi. In 2013-2014, differences over this and other issues widened to the point where Saudi Arabia, UAE, and Bahrain withdrew their ambassadors from Doha in March 2014, accusing Qatar of supporting \"terrorism.\" The Ambassadors returned in November 2014 in exchange for a reported pledge by Qatar to fully implement a November 2013 \"Riyadh Agreement\" that committed Qatar to noninterference in the affairs of other GCC states and to refrain from supporting Muslim Brotherhood-linked organizations. ", "These differences erupted again following the May 20-22, 2017, visit of President Donald Trump to Saudi Arabia, during which expressed substantial support for Saudi leaders. On June 5, 2017, Saudi Arabia, UAE, and Bahrain, joined by Egypt and a few other Muslim countries, severed diplomatic relations with Qatar, expelled Qatar's diplomats, recalled their ambassadors, and imposed limits on the entry and transit of Qatari nationals and vessels in their territories, waters, and airspace. They also accused Qatar of supporting terrorist groups and Iran. ", "On June 22, 2017, the Saudi-led group presented Qatar with 13 demands, including closing Al Jazeera, severing relations with the Muslim Brotherhood, scaling back relations with Iran, closing a Turkish military base in Qatar, and paying reparations for its actions. Amir Tamim expressed openness to negotiations but said it would not \"surrender\" its sovereignty. The Saudi-led group subsequently reframed its demands as six \"principles,\" among which were for Qatar to \"combat extremism and terrorism\" and prevent their financing, suspend \"all acts of provocation,\" fully comply with the commitments Qatar made in 2013 and 2014 (see above), and refrain \"from interfering in the internal affairs of states.\" ", "President Trump initially responded to the crisis by echoing the Saudi-led criticism of Qatar's policies, but later sought to settle the rift. Then-Secretary of State Rex Tillerson, working with Kuwait, took the lead within the Trump Administration to mediating the dispute, including by conducting \"shuttle diplomacy\" in the region during July 10-13, 2017. President Trump facilitated a phone call between Amir Tamim and Saudi Crown Prince Mohammad bin Salman on September 9, 2017, but the direct dialogue faltered over a dispute about which leader had initiated the talks. No subsequent meetings between President Trump and the leaders of the parties to the dispute, or subsequent actions or proposals, have produced any significant progress toward resolution of the rift. Secretary of State Pompeo's visit to the Gulf states in January 2019 produced no evident movement, and the U.S. envoy who was assigned to work on this issue, General Anthony Zinni (retired), resigned as envoy in early January 2019. ", "Yet, there are signs that Saudi Arabia and the UAE, facing criticism over the Kashoggi issue and their involvement in Yemen, might want to de-escalate the dispute. Qatari forces and commanders have been participating in GCC \"Gulf Shield\" military exercises and command meetings in Saudi Arabia and other GCC states. Amir Tamim was invited by Saudi Arabia to the annual GCC summit in Dammam, Saudi Arabia, during December 7-9, 2018, but he did not attend. ", "Qatar asserts that the blockading countries are seeking to change Qatar's leadership and might take military action to force Qatar to accept their demands. In December 2017, Saudi Arabia \"permanently\" closed its Salwa border crossing into Qatar, and some press reports say that Saudi Arabia is contemplating building a canal that would physically separate its territory from that of Qatar. Qatari officials assert that the country's ample wealth is enabling it to limit the economic effects of the Saudi-led move, but that the blockade has separated families and caused other social disruptions. Qataris reportedly have rallied around their leadership to resist Saudi-led demands. ", "The dispute has to date thwarted U.S. efforts to assemble the a new \"Middle East Strategic Alliance\" to counter Iran and regional terrorist groups. This alliance \u2013 to consist of the United States, the GCC countries, and other Sunni-led states, is reportedly to be formally unveiled at U.S.-GCC summit that has been repeatedly postponed since early 2018 and is not scheduled. The MESA has also been hampered by the global criticism of Saudi de facto leader Crown Prince Mohammad bin Salman for his possible involvement in the October 2018 killing of U.S.-based Saudi journalist Jamal Kashoggi at the Saudi consulate in Istanbul, and Egypt's April 2019 decision to refrain from joining the Alliance.", "Qatar's disputes with other GCC countries have come despite the resolution in 2011 of a long-standing territorial dispute between Qatar and Bahrain, dating back to the 18 th century, when the ruling families of both countries controlled parts of the Arabian peninsula. Qatar and Bahrain referred the dispute to the International Court of Justice (ICJ) in 1991 after clashes in 1986 in which Qatar landed military personnel on a disputed man-made reef (Fasht al-Dibal). In March 2001, the ICJ sided with Bahrain on the central dispute over the Hawar Islands, but with Qatar on ownership of the Fasht al-Dibal reef and the town of Zubara on the Qatari mainland, where some members of the ruling Al Khalifa family of Bahrain are buried. Two smaller islands, Janan and Hadd Janan, were awarded to Qatar. Qatar accepted the ruling as binding."], "subsections": []}, {"section_title": "Iran", "paragraphs": ["Even though the Saudi-led bloc asserts that Qatar had close relations with Iran, Qatar has long helped counter Iran strategically. Qatar enforced international sanctions against Iran during 2010-2016, and no Qatar-based entity has been designated by the United States as an Iran sanctions violator. Amir Tamim attended both U.S.-GCC summits (May 2015 at Camp David and April 2016 in Saudi Arabia) that addressed GCC concerns about the July 2015 U.S.-led multilateral agreement on Iran's nuclear program (Joint Comprehensive Plan of Action, JCPOA). Qatar withdrew its Ambassador from Tehran in January 2016 in solidarity with Saudi Arabia over the Saudi execution of a dissident Shiite cleric, and Qatar joined the February 2016 GCC declaration that Lebanese Hezbollah is a terrorist group. ", "Yet Qatari leaders have always argued that dialogue with Iran is key to reducing regional tensions. Qatar and Iran have shared a large natural gas field in the Persian Gulf without incident, although some Iranian officials have occasionally accused Qatar of cheating on the arrangement. In February 2010, as Crown Prince, Shaykh Tamim, visited Iran for talks with Iranian leaders, and as Amir, he has maintained direct contact with Iran's President Hassan Rouhani. ", "Apparently perceiving that the June 2017 intra-GCC rift provided an opportunity to drive a wedge within the GCC, Iran supported Qatar in the dispute and has exported additional foodstuffs to Qatar to help it compensate for the cutoff of Saudi food exports. It has permitted Qatar Airways to overfly its airspace in light of the Saudi, UAE, and Bahraini denial of their airspace to that carrier. In August 2017, Qatar formally restored full diplomatic relations with Iran. Qatar did not directly support the May 8, 2018, U.S. withdrawal from the JCPOA, instead issuing a statement hoping that efforts to \"denuclearize\" the region will not lead to \"escalation.\"", "Saudi official statements also cited Qatar's alleged support for pro-Iranian dissidents in Bahrain as part of the justification for isolating Qatar in June 2017. Contributing to that Saudi perception was Qatar's brokering in 2008 of the \"Doha Agreement\" to resolve a political crisis in Lebanon that led to clashes between Lebanon government forces and Hezbollah. Qatar's role as a mediator stemmed, at least in part, from Qatar's role in helping reconstruct Lebanon after the 2006 Israel-Hezbollah war, and from then-Amir Hamad's postwar visit to Hezbollah strongholds in Lebanon. Further fueling Saudi and UAE suspicions was a 2017 Qatari payment to certain Iraqi Shiite militia factions of several hundred million dollars to release Qatari citizens, including royal family members, who were kidnapped in 2016 while falcon hunting in southern Iraq."], "subsections": []}, {"section_title": "Egypt", "paragraphs": ["In Egypt, after the fall of Egyptian President Hosni Mubarak in 2011, a Muslim Brotherhood-linked figure, Muhammad Morsi, won presidential elections in 2012. Qatar contributed about $5 billion in aid, aggravating a split between Qatar and the other GCC states over the Muslim Brotherhood. Saudi Arabia and the UAE backed Morsi's ouster by Egypt's military in 2013. Because of its support for Morsi, Qatar's relations with former military leader and now President Abdel Fattah el-Sisi have been strained, and Egypt joined the 2017 Saudi-led move against Qatar."], "subsections": []}, {"section_title": "Libya", "paragraphs": ["In Libya, Qatar joined the United States and several GCC and other partner countries in air operations to help oust Qadhafi in 2011. Subsequently, however, Qatar has supported Muslim Brotherhood-linked factions in Libya opposed by the UAE, Egypt, and Saudi Arabia. This difference in approaches in Libya among the GCC states contributed to the intra-GCC rift. As of April 2019, it appears that the UAE and Egypt-backed ex-military commander Khalifa Hifter, who has consolidated his control of much of Libya over the past four years, is poised to reunite the country by force. "], "subsections": []}, {"section_title": "Yemen", "paragraphs": ["In 2015, Qatar joined the Saudi-led military coalition that is battling Iran-backed Zaidi Shiite Houthi rebels in Yemen, including conducting air strikes against Houthi and allied positions. This was a departure from Qatar's 2006-2007 failed efforts to mediate between the Houthis and the government of President Ali Abdullah Saleh, who left office in 2012 following an \"Arab Spring\"-related uprising in Yemen. In September 2015, Qatar deployed about 1,000 military personnel, along with armor, to Yemen. Four Qatar soldiers were killed fighting there. As a result of the intra-GCC rift, in mid-2017 Qatar withdrew from the Saudi-led military effort in Yemen."], "subsections": []}, {"section_title": "Syria, Iraq, and Anti-Islamic State Operations", "paragraphs": ["In Syria, Qatar provided funds and weaponry to rebels fighting the regime of President Bashar Al Asad, including those, such as Ahrar Al Sham, that competed with and sometimes fought anti-Asad factions supported by Saudi Arabia and the UAE. Qatar also built ties to Jabhat al Nusra (JAN), an Al Qaeda affiliate that was designated by the United States as a Foreign Terrorist Organization (FTO), although Qatari officials assert that their intent was to induce the group to sever its ties to Al Qaeda, which it formally did in July 2016. Qatari mediation also obtained the release of Lebanese and Western prisoners captured by that group. However, Asad regime recent gains in Syria likely render Qatar's involvement moot. Qatar has not, to date, followed Kuwait or Bahrain in reopening its embassy in Damascus; its Foreign Minister stated in January 2019 that Qatar saw \"no reason\" to do so. According to the State Department, Qatar has allowed 20,000 Syrians fleeing the civil war there to retain residency in Qatar. ", "Qatar is a member of the U.S.-led coalition combating the Islamic State. In 2014, Qatar flew some airstrikes in Syria against Islamic State positions. However, after several weeks, the coalition ceased identifying Qatar as a participant in coalition strikes inside Syria. Neither Qatar nor any other GCC state participated in coalition air operations against the Islamic State inside Iraq. In April 2017, Qatar reportedly paid ransom to obtain the release of 26 Qatari ruling family members abducted Iraqi Shia militiamen while on a hunting trip in southern Iraq in 2015. The Iraqi government said in June 2017 that it, not Shia fighters, received the ransom."], "subsections": []}, {"section_title": "Lebanon", "paragraphs": ["Qatar has sought to exert some influence in Lebanon, possibly as a counterweight to that exerted by Saudi Arabia. In January 2019, Amir Tamim was one of the few regional leaders to attend an Arab League summit held in Beirut. In late January 2019, Qatar announced a $500 million investment in Lebanon government bonds to support that country's ailing economy."], "subsections": []}, {"section_title": "Israeli-Palestinian Issues/Hamas", "paragraphs": ["Qatar has attempted to play a role in Israeli-Palestinian peace negotiations by engaging all parties. In directly engaging Israel, in 1996, then-Amir Hamad hosted a visit by then-Prime Minister of Israel Shimon Peres and allowed Israel to open a formal trade office in Doha\u2014going beyond the GCC's dropping in 1998 of the secondary Arab League boycott of Israel. In April 2008, then-Foreign Minister Tzipi Livni attended the government-sponsored Doha Forum and met with Amir Hamad. Qatar ordered the Israeli offices in Doha closed in January 2009 at the height of an Israel-Hamas conflict and the offices have not formally reopened. Still, small levels of direct Israel-Qatar trade reportedly continue; Israeli exports to Qatar consist mostly of machinery and technology, and imports from Qatar are primarily plastics. Amir Tamim regularly accuses Israel of abuses against the Palestinians and expresses consistent support for Palestinian efforts for full United Nations membership and recognition, while at the same time backing negotiations between the Palestinians and Israel. ", "Qatar has also engaged the Islamist group Hamas, a Muslim Brotherhood offshoot that has exercised de facto control of the Gaza Strip since 2007. Qatari officials assert that their engagement with Hamas can help broker reconciliation between Hamas and the Fatah-led Palestinian Authority (PA). U.S. officials have told Members of Congress that Qatar's leverage over Hamas can be helpful to reducing conflict between Hamas and Israel and that Qatar has pledged that none of its assistance to the Palestinians goes to Hamas. Qatar reportedly asked former Hamas political bureau chief Khalid Meshal to leave Qatar after the intra-GCC rift erupted, apparently to accommodate the blockading states. Qatar's critics assert that Hamas leaders are too often featured on Al Jazeera and that Qatar's relations with Hamas constitute support for a terrorist organization. In the 115 th Congress, the Palestinian International Terrorism Support Act of 2017 ( H.R. 2712 ), which was ordered to be reported to the full House on November 15, 2017, appeared directed at Qatar by sanctioning foreign governments determined to be providing financial or other material support to Hamas or its leaders. ", "As have the other Gulf states, Qatar has sought to compensate for a curtailment of U.S. contributions to the U.N. Relief Works Agency (UNRWA). In April 2018, Qatar donated $50 million to that agency. In December 2018, Qatar reached a two-year agreement with UNRWA to donate to that agency's programs in education and health care. "], "subsections": []}, {"section_title": "Afghanistan/Taliban Office", "paragraphs": ["Qatari forces did not join any U.S.-led operations inside Afghanistan, but its facilities and forces support U.S. operations there, and Qatar has brokered talks between the United States and Taliban representatives. Unlike Saudi Arabia and UAE, Qatar did not recognize the Taliban as the legitimate government of Kabul when the movement ruled during 1996-2001. In June 2013, the Taliban opened a representative office in Qatar, but it violated U.S.-Qatar-Taliban understandings by raising a flag of the former Taliban regime on the building and Qatar, at U.S. request, immediately closed the office. Taliban officials remained in Qatar, and revived U.S.-Taliban talks led to the May 31, 2014, exchange of captured U.S. soldier Bowe Bergdahl for five Taliban figures held by the United States at the prison facility in Guantanamo Bay, Cuba. The five were banned from traveling outside Qatar until there is an agreed solution that would ensure that they could not rejoin the Taliban insurgency. In November 2018, the five joined the Taliban representative office in Doha. ", "Qatar permitted the Taliban office in Qatar to formally reopen in 2015. Deputy Assistant Secretary of State for South and Central Asia Alice Wells met with Taliban figures from the office in Doha in July 2018 for discussions about a future peace settlement in Afghanistan. Since mid-2018, further talks, with increasing levels of intensity, have taken place in Doha between Taliban negotiators and the U.S. envoy for Afghanistan, Ambassador Zalmay Khalilzad. ", "Qatar might also have some contacts with the Haqqani Network, a U.S.-designated Foreign Terrorist Organization (FTO) that is allied with the Taliban. In January 2016, Qatari mediation reportedly caused the Haqqani Network to release a Canadian hostage, Colin Rutherford. The mediation did not, as Qatar had hoped, lead to the freedom of the Coleman family, also held by that group, who were rescued from the group by a U.S. and Pakistani operation in October 2016. ", "In January 2018, Qatar's air force completed the first two flights of its C-17 (Globemaster) cargo aircraft to Afghanistan and back. According to then-Defense Secretary Mattis, the flights provided logistical support to the NATO \"counterterrorism\" campaign there. "], "subsections": []}, {"section_title": "Other Qatari Relationships and Mediation Efforts39", "paragraphs": ["Somewhat outside the traditional Middle East: ", "Qatar has played an active role in mediating conflict over Sudan's Darfur region. In 2010, Qatar, including through grants and promises of investment, helped broker a series of agreements, collectively known as the Doha Agreements, between the government and various rebel factions. In March 2018, Qatar and Sudan signed an agreement to jointly invest $4 billion to develop the Red Sea port of Suakin off Sudan's coast. Qatar has forged relationships with several countries in Central Asia, possibly in an effort to shape energy routes in the region. Amir Tamim has exchanged leadership visits with the President of Turkmenistan, Gurbanguly Berdymukhamedov in 2016 and 2017. The two countries are major world gas suppliers. The leader of Tajikistan, Imamali Rahmonov, visited Doha in February 2017 to reportedly discuss Qatari investment and other joint projects. Qatar funded a large portion of a $100 million mosque in Dushanbe, which purports to be the largest mosque in Central Asia. "], "subsections": []}]}, {"section_title": "U.S.-Qatar Defense and Security Cooperation", "paragraphs": ["U.S.-Qatar defense and security relations are long-standing and extensive\u2014a characterization emphasized by senior U.S. officials in the course of the two U.S.-Qatar \"Strategic Dialogue\" sessions\u2014in Washington, DC, in January 2018, and in Doha in January 2019. Senior U.S. officials have praised Qatar as \"a longtime friend and military partner for peace and stability in the Middle East and a supporter of NATO's mission in Afghanistan.\" ", "The U.S-Qatar defense relationship emerged during the 1980-1988 Iran-Iraq war. The six Gulf monarchies formed the GCC in late 1981 and collectively backed Iraq against the threat posed by Iran in that war, despite their political and ideological differences with Iraq's Saddam Hussein. In the latter stages of that war, Iran attacked international shipping in the Gulf and some Gulf state oil loading facilities, but none in Qatar. ", "After Iraq invaded GCC member Kuwait in August 1990, the GCC participated in the U.S.-led military coalition that expelled Iraq from Kuwait in February 1991. In January 1991, Qatari armored forces helped coalition troops defeat an Iraqi attack on the Saudi town of Khafji. The Qatari participation in that war ended U.S.-Qatar strains over Qatar's illicit procurement in the late 1980s of U.S.-made \"Stinger\" shoulder-held antiaircraft missiles. U.S.-Qatar defense relations subsequently deepened and the two countries signed a formal defense cooperation agreement (DCA). U.S. Central Command (CENTCOM) Commander General Joseph Votel testified on February 27, 2018, that U.S. operations have not been affected by the intra-GCC rift.", "Qatar, one of the wealthiest states in the world on a per capita gross domestic product (GDP) basis, receives virtually no U.S. military assistance. At times, small amounts of U.S. aid have been provided to help Qatar develop capabilities to prevent smuggling and the movement of terrorists or proliferation-related gear into Qatar or around its waterways. "], "subsections": [{"section_title": "Defense Cooperation Agreement (DCA)", "paragraphs": ["The United States and Qatar signed a formal defense cooperation agreement (DCA) on June 23, 1992. The DCA was renewed for 10 years, reportedly with some modifications, in December 2013. The text of the pact is classified, but it reportedly addresses U.S. military access to Qatari military facilities, prepositioning of U.S. armor and other military equipment, and U.S. training of Qatar's military forces. ", "Up to 13,000 U.S. troops are deployed at the various facilities in Qatar. Most are U.S. Air Force personnel based at the large Al Udeid air base southwest of Doha, working as part of the Coalition Forward Air Component Command (CFACC). The U.S. personnel deployed to Qatar participate in U.S. operations such as Operation Inherent Resolve (OIR) against the Islamic State organization and Operation Freedom's Sentinel in Afghanistan, and they provide a substantial capability against Iran. ", "The U.S. Army component of U.S. Central Command prepositions armor (enough to outfit one brigade) at Camp As Sayliyah outside Doha. U.S. armor stationed in Qatar was deployed in Operation Iraqi Freedom that removed Saddam Hussein from power in Iraq in 2003. ", "The DCA also reportedly addresses U.S. training of Qatar's military. Qatar's force of about 12,000 is the smallest in the region except for Bahrain. Of that force, about 8,500 are ground forces, 1,800 are naval forces, and 1,500 are air forces. A 2014 law mandates four months (three months for students) of military training for males between the ages of 18 and 35, with a reserve commitment of 10 years (up to age 40). General Votel's February 2018 testimony, referenced above, stated that Qatar is seeking to expand its military both in size and capacity. "], "subsections": [{"section_title": "Al Udeid Expansion/Permanent U.S. Basing in Qatar?46", "paragraphs": ["Since 2002, Qatar has contributed over $8 billion to support U.S. and coalition operations at Al Udeid. The air field, which also hosts the forward headquarters for CENTCOM, has been steadily expanded and enhanced not only with Qatari funding but also about $450 million in U.S. military construction funding since 2003. In March 2018, the State Department approved the sale to Qatar of equipment, with an estimated value of about $200 million, to upgrade the Air Operation Center at Al Udeid.", "The January 2018 Strategic Dialogue resulted in a number of U.S.-Qatar announcements of expanded defense and security cooperation, including Qatari offers to fund capital expenditures that offer the possibility of an \"enduring\" U.S. military presence in Qatar and to discuss the possibility of \"permanent [U.S.] basing\" there. To enable an enduring U.S. presence, Qatar is expanding and enhance Al Udeid over the next two decades\u2014an effort that would facilitate an enduring U.S. presence there. On July 24, 2018, the U.S. and Qatari military attended a groundbreaking ceremony for the Al Udeid expansion, which will include over 200 housing units for families of officers and expansion of the base's ramps and cargo facilities. On January 24, 2019, in the course of the second U.S.-Qatar Strategic Dialogue, the Qatar Ministry of Defense and the U.S. Department of Defense signed a memorandum of understanding that DOD referred to as a \"positive step towards the eventual formalization of Qatar's commitment to support sustainment costs and future infrastructure costs at [Al Udeid Air Base].\" Qatar has also extended the Hamad Port to be able to accommodate U.S. Navy operations were there a U.S. decision to base such operations in Qatar. "], "subsections": []}]}, {"section_title": "U.S. Arms Sales to Qatar", "paragraphs": ["Qatar's forces continue to field mostly French-made equipment, such as the AMX-30 main battle tank, but Qatar is increasingly shifting its weaponry mix to U.S.-made equipment. According to General Votel's February 27, 2018, testimony, Qatar is currently the second-largest U.S. Foreign Military Sales (FMS) customer, with $25 billion in new FMS cases. And, Qatar is \"on track\" to surpass $40 billion in the next five years with additional FMS purchases. The joint statement of the U.S.-Qatar Strategic Dialogue in January 2018 said that Qatari FMS purchases had resulted in over 110,000 American jobs and the sustainment of critical U.S. military capabilities. ", "Tanks. Qatar's 30 main battle tanks are French-made AMX-30s. In 2015, Germany exported several \"Leopard 2\" tanks to Qatar. Qatar has not purchased U.S.-made tanks, to date. Combat Aircraft. Qatar currently has only 18 combat aircraft, of which 12 are French-made Mirage 2000s. To redress that deficiency, in 2013 Qatar submitted a letter of request to purchase 72 U.S.-made F-15s. After a long delay reportedly linked to the U.S. commitment to Israel's \"Qualitative Military Edge\" (QME), on November 17, 2016, the Defense Security Cooperation Agency (DSCA) notified Congress of the potential sale, which has an estimated value of $21 billion. The FY2016 National Defense Authorization Act (Section 1278 of P.L. 114-92 ) required a DoD briefing for Congress on the sale, including its effect on Israel's QME. On June 14, 2017, the United States and Qatar signed an agreement for a reported 36 of the F-15 fighters, which predated (and therefore were not covered by) then-Senate Foreign Relations Committee Chairman Senator Bob Corker's June 26, 2017 announcement that he would not provide informal concurrence to arms sales to the GCC countries until the intra-GCC rift was resolved. That blanket hold was dropped on February 8, 2018. In December 2017, the Defense Department announced that Qatar would buy the second group of 36 F-15s under the sale agreement. Deliveries of all aircraft are to be completed by the end of 2022. Qatar signed a $7 billion agreement in May 2015 to purchase 24 French-made Rafale aircraft, and, in September 2017, a \"Statement of Intent\" with Britain to purchase 24 Typhoon combat aircraft. Heli copters . In 2012, the United States sold Qatar AH-64 Apache attack helicopters and related equipment; UH-60 M Blackhawk helicopters; and MH-60 Seahawk helicopters. The total potential value of the sales was estimated at about $6.6 billion, of which about half consisted of the Apache sale. On April 9, 2018, DSCA announced that the State Department had approved a sale to Qatar of 5,000 Advanced Precision Kill Weapons Systems II Guidance Sections for use on its Apache fleet, with an estimated sale value of $300 million. Short-Range Missile and Rocket Systems. Qatar is not known to have any extended-range missiles, but various suppliers have provided the country with short-range systems that can be used primarily in ground operations. During 2012-2013, the United States sold Qatar Hellfire air-to-ground missiles, Javelin guided missiles, the M142 High Mobility Artillery Rocket System (HIMARS), the Army Tactical Missile System (ATACMS), and the M31A1 Guided Multiple Launch Rocket System (GMLRS). The total potential value of the sales was estimated at about $665 million. On April 22, 2016, the Defense Security Cooperation Agency notified to Congress a potential sale to Qatar of 252 RIM-116C Rolling Airframe Tactical Missiles and 2 RIM 116C-2 Rolling Airframe Telemetry Missiles, plus associated equipment and support, with an estimated sale value of $260 million. On May 26, 2016, DSCA notified to Congress an additional sale of 10 Javelin launch units and 50 Javelin missiles, with an estimated value of $20 million. On November 27, 2018, DSCA notified Congress of a State Department approval of a commercial sale by Raytheon of 40 National Advanced Surface-to-Air Missile Systems (NADSAMS) at an estimated value of $215 million. Ballistic Missiles . At its national day parade in Doha in mid-December 2017, the Qatari military displayed its newly purchased SY 400-BP-12A ballistic missile, which has a 120-mile range and is considered suited to a surface attack mission. The display was widely viewed as an effort to demonstrate to the Saudi-led bloc Qatar's capabilities to resist concerted pressure. Ballistic Missile Defense (BMD) Systems . Qatar has purchased various U.S.-made BMD systems, consistent with U.S. efforts to promote a coordinated Gulf missile defense capability against Iran's missile arsenal. In 2012, the United States sold Qatar Patriot Configuration 3 (PAC-3, made by Raytheon) fire units and missiles at an estimated value of nearly $10 billion. Also that year, the United States agreed to sell Qatar the Terminal High Altitude Area Air Defense (THAAD), the most sophisticated ground-based missile defense system the United States has made available for sale. However, because of Qatar's budget difficulties and operational concerns, the THAAD sale has not been finalized. In February 2017, Raytheon concluded an agreement to sell Qatar an early warning radar system to improve the capabilities of its existing missile defense systems, with an estimated value of $1.1 billion. In December 2017, the Defense Department awarded Raytheon a $150 million contract to provide Qatar with services and support for its PAC-3 system. Naval Vessels . In August 2016, DSCA transmitted a proposed sale to Qatar of an unspecified number of U.S.-made Mk-V fast patrol boats, along with other equipment, with a total estimated value of about $124 million. In August 2017, Qatar finalized a purchase from Italy of four multirole corvette ships, two fast patrol missile ships, and an amphibious logistics ship, with an estimated value of over $5 billion. "], "subsections": []}, {"section_title": "Other Defense Partnerships", "paragraphs": ["Qatar has also developed relations with NATO under the \"Istanbul Cooperation Initiative\" (ICI). Qatar's Ambassador to Belgium serves as the interlocutor with NATO, the headquarters of which is based near Brussels. In June 2018, Qatar's Defense Minister said that his country's long-term strategic \"ambition\" is to join NATO. "], "subsections": [{"section_title": "France", "paragraphs": ["As noted above, Qatar has historically bought most of its major combat systems from France. On March 28, 2019, French Prime Minister Edouard Phillipe visited Doha and signed with Qatar's Defense and Interior Minister five agreements to boost ties. The agreements focused on defense information exchange, cooperation to combat cybercrime, and culture and education agreements. "], "subsections": []}, {"section_title": "Turkey", "paragraphs": ["Qatar's defense relationship with Turkey has become an element in Qatar's efforts to resist the Saudi-led pressure in the intra-GCC crisis. In 2014, Qatar allowed Turkey\u2014a country that, like Qatar, often supports Muslim Brotherhood\u2014to open a military base (Tariq bin Ziyad base) in Qatar, an initiative that might have contributed to Turkey's support for Qatar in the June 2017 intra-GCC rift. One of the \"13 demands\" of the Saudi-led bloc has been that Qatar close the Turkish base in Qatar\u2014a demand Qatari officials say will not be met. Turkey has demonstrated its support for Qatar by sending additional troops there and conducting joint exercises in August 2017 and by increasing food exports to replace those previously provided by Saudi Arabia. Turkey further added to its Qatar troop contingent in December 2017. "], "subsections": []}, {"section_title": "Russia", "paragraphs": ["Qatar has broadened its relationship with Russia since early 2016 in conjunction with efforts to resolve the conflict in Syria and in recognition of Russia's heightened role in the region. One of Qatar's sovereign wealth funds has increased its investments in Russia, particularly in its large Rosneft energy firm. Amir Tamim has made several visits to Russia, the latest of which was in March 2018. During the visit, it was announced that Qatar Airways would buy a 25% stake in the Vnukovo International Airport, one of Moscow's airports.", "Qatar is also reportedly considering buying the S-400 sophisticated air defense system. Qatar-Russia discussions about the purchase have apparently caused a degree of alarm among the Saudi-led states, with Saudi Arabia going so far as to threaten military action against Qatar if it buys the system. Saudi officials also reportedly asked French President Emmanuel Macron to persuade Qatar not to buy the weapon. Were Qatar to purchase the S-400, it might be subject to U.S. sanctions under Section 231 of the Countering America's Adversaries through Sanctions Act ( P.L. 115-44 ). That section sanctions persons or entities that conduct transactions with Russia's defense or intelligence sector. It mandates the imposition of several sanctions that might include restrictions on certain exports to Qatar, restrictions on Qatari banking activities in the United States, restrictions on Qatari acquisition of property in the United States, and a ban on U.S. investments in any Qatari sovereign debt. "], "subsections": []}]}, {"section_title": "Counterterrorism Cooperation63", "paragraphs": ["U.S.-Qatar's cooperation against groups that both countries agree are terrorist groups, such as the Islamic State organization, is extensive. However, some groups that the United States considers as terrorist organizations, such as Hamas, are considered by Qatar to be Arab movements pursuing legitimate goals. Perhaps in part as a means to attract U.S. support in the context of the intra-GCC rift, on July 10, 2017, Qatar's foreign minister and then-Secretary Tillerson signed in Doha a Memorandum of Understanding on broad U.S.-Qatar counterterrorism cooperation, including but going beyond just combatting terrorism financing. The United States and Qatar held a Counterterrorism Dialogue on November 8, 2017, in which they reaffirmed progress on implementing the MoU. The joint statement of the January 2018 Strategic Dialogue noted \"positive progress\" under the July 2017 MoU, and thanked Qatar for its action to counter terrorism. The statement also noted the recent conclusion of a memorandum of understanding between the U.S. Attorney General and his Qatari counterpart on the fight against terrorism and its financing and combating cybercrime. ", "In an effort to implement the U.S.-Qatar MoU, and perhaps also as a gesture to the blockading states, on March 22, 2018, the Qatar Ministry of Interior issued list of 19 individuals and eight entities that it considers as \"terrorists.\" The list includes 10 persons who are also are also named as terrorists by the blockading GCC states. On April 2-5, 2018, Qatar held a conference attended by international experts and security professionals from 42 countries. ", "Qatar participates in the State Department's Antiterrorism Assistance (ATA) program to boost domestic security capabilities, and it has continued to participate in and host Global Counterterrorism Forum events. Under the ATA program, participating countries are provided with U.S. training and advice on equipment and techniques to prevent terrorists from entering or moving across their borders. However, Qatari agencies such as the State Security Bureau and the Ministry of Interior have limited manpower and are reliant on nationals from third countries to fill law enforcement positions\u2014a limitation Qatar has tried to address by employing U.S. and other Western-supplied high technology. ", "In the past, at least one high-ranking Qatari official provided support to Al Qaeda figures residing in or transiting Qatar, including suspected September 11, 2001, attacks mastermind Khalid Shaykh Mohammad. None of the September 11 hijackers was a Qatari national."], "subsections": [{"section_title": "Terrorism Financing Issues", "paragraphs": ["U.S. officials have stated that Qatar is taking steps to prevent terrorism financing and the movement of suspected terrorists into or through Qatar. The country is a member of the Middle East North Africa Financial Action Task Force (MENAFATF), a regional financial action task force that coordinates efforts combatting money laundering and terrorism financing. In 2014, the Amir approved Law Number 14, the \"Cybercrime Prevention Law,\" which criminalized terrorism-linked cyber offenses, and clarified that it is illegal to use an information network to contact a terrorist organization or raise funds for terrorist groups, or to promote the ideology of terrorist organizations. In 2017, the country passed updated terrorism financing legislation. ", "In February 2017, Qatar hosted a meeting of the \"Egmont Group\" global working group consisting of 152 country Financial Intelligence Units. Qatar is a member of the Terrorist Financing Targeting Center (TFTC), a U.S.-GCC initiative announced during President Trump's May 2017 visit to Saudi Arabia. In October 2017, and despite the intra-GCC rift, Qatar joined the United States and other TFTC countries in designating terrorists affiliated with Al Qaeda and ISIS. The State Department's 2017 report on international terrorism says that, in 2017, Qatar took sweeping measures to monitor and restrict the overseas activities of Qatari charities. ", "According to the State Department's report on international terrorism for 2015, entities and individuals within Qatar continue to serve as a source of financial support for terrorist and violent extremist groups, particularly regional Al Qa'ida affiliates such as the Nusrah Front.\" The State Department report for 2017 stated: \"While the Government of Qatar has made progress on countering the financing of terrorism, terrorist financiers within the country are still able to exploit Qatar's informal financial system.\" The United States has imposed sanctions on several persons living in Qatar, including Qatari nationals, for allegedly raising funds or making donations to both Al Qaeda and the Islamic State. "], "subsections": []}, {"section_title": "Countering Violent Extremism", "paragraphs": ["Qatar has hosted workshops on developing plans to counter violent extremism and has participated in similar sessions hosted by the UAE's Hedayat Center that focuses on that issue. Also in 2015, Qatar pledged funding to the U.N. Office on Drugs and Crime (UNODC) to help address violent extremism and radicalization among youth and vulnerable populations. However, some experts have noted that the government has violated a pledge to the United States not to allow Qatari preachers to conduct what some consider religious incitement in mosques in Education City, where several U.S. universities have branches. Education City was established by the Qatar Foundation, which is at the core of Qatar's strategy to counter violent extremism through investment in education. "], "subsections": []}]}]}, {"section_title": "Economic Issues", "paragraphs": ["Even before the June 2017 intra-GCC rift, Qatar had been wrestling with the economic effects of the fall in world energy prices since mid-2014\u2014a development that has caused GCC economic growth to slow, their budgets to fall into deficit, and the balance of their ample sovereign wealth funds to decline. Oil and gas reserves have made Qatar the country with the world's highest per capita income. Qatar is a member of the Organization of the Petroleum Exporting Countries (OPEC), along with other GCC states Saudi Arabia, Kuwait, and UAE and other countries. However, on December 3, 2018, Qatar announced it would withdraw from OPEC in early 2019 in order to focus on its more high-priority natural gas exports. Some observers attributed the decision, at least in part, to the ongoing intra-GCC rift, insofar as rival Saudi Arabia is considered the dominant actor within OPEC. ", "The economic impact on Qatar of the June 2017 intra-GCC rift is difficult to discern. About 40% of Qatar's food was imported from Saudi Arabia precrisis, and there were reports of runs on stocks of food when the blockade began. However, the government's ample financial resources enabled it to quickly arrange substitute sources of goods primarily from Turkey, Iran, and India. The effects on Qatar's growing international air carrier, Qatar Airways, have been significant because of the prohibition on its overflying the blockading states. In November 2017, Iran and Turkey signed a deal with Qatar to facilitate the mutual transiting of goods.", "Qatar's main sovereign wealth fund, run by the Qatar Investment Authority (QIA), as well as funds held by the Central Bank, total about $350 billion, according to Qatar's Central Bank governor in July 2017, giving the country a substantial cushion to weather its financial demands. QIA's investments consist of real estate and other relatively illiquid holdings, such as interest in London's Canary Wharf project. In May 2016, Qatar offered $9 billion in bonds as a means of raising funds without drawing down its investment holdings. In April 2018, the country raised $12 billion in another, larger, bond issue. Qatar also has cut some subsidies to address its budgetary shortfalls. In early October 2017, it was reported that QIA is considering divesting a large portion of its overseas assets and investing the funds locally\u2014a move that is at least partly attributable to the economic pressures of the intra-GCC rift. ", "The intra-GCC rift has not harmed Qatar's ability to earn substantial funds from energy exports. Oil and gas still account for 92% of Qatar's export earnings, and 56% of government revenues. Proven oil reserves of about 25 billion barrels are far less than those of Saudi Arabia and Kuwait, but enough to enable Qatar to continue its current levels of oil production (about 700,000 barrels per day) for over 50 years. Its proven reserves of natural gas exceed 25 trillion cubic meters, about 13% of the world's total and third largest in the world. Along with Kuwait and UAE, in November 2016 Qatar agreed to a modest oil production cut (about 30,000 barrels per day) as part of an OPEC-wide production cut intended to raise world crude oil prices.", "Qatar is the world's largest supplier of liquefied natural gas (LNG), which is exported from the large Ras Laffan processing site north of Doha. That facility has been built up with U.S.-made equipment, much of which was exported with the help of about $1 billion in Export-Import Bank loan guarantees. Qatar is a member and hosts the headquarters of the Gas Exporting Countries Forum (GECF), which is a nascent natural gas cartel and includes Iran and Russia, among other countries. State-run Qatar Petroleum is a major investor in the emerging U.S. LNG export market, with a 70% stake (Exxon-Mobil and Conoco-Phillips are minority stakeholders) in an LNG terminal in Texas that is seeking U.S. government approval to expand the facility to the point where it can export over 15 million tons of LNG per year. In June 2018, Qatar Petroleum bought a 30% state in an Exxon-Mobil-run development of an onshore shale natural gas basin in Argentina (Vaca Muerta). ", "Qatar is the source of the gas supplies for the Dolphin Gas Project established by the UAE in 1999 and which became operational in 2007. The project involves production and processing of natural gas from Qatar's offshore North Field, which is connected to Iran's South Pars Field (see Figure 2 ), and transportation of the processed gas by subsea pipeline to the UAE and Oman. Its gas industry gives Qatar some counter leverage against the Saudi-led group, but Qatar has said it will not reduce its gas supplies under existing agreements with other GCC states. Both the UAE and Qatar have filed complaints at the WTO over their boycotting each other's goods; the United States reportedly has backed the UAE's arguments that the WTO does not have the authority to adjudicate issues of national security. ", "Because prices of hydrocarbon exports have fallen dramatically since mid-2014, in 2016 Qatar ran its first budget deficit (about $13 billion). As have other GCC rulers, Qatari leaders assert publicly that the country needs to diversify its economy, that generous benefits and subsidies need to be reduced, and that government must operate more efficiently. At the same time, the leadership apparently seeks to minimize the effect of any cutbacks on Qatari citizens. Still, if oil prices remain far below their 2014 levels and the intra-GCC rift continues much further, it is likely that many Qatari citizens will be required to seek employment in the private sector, which they generally have shunned in favor of less demanding jobs in the government. ", "The national development strategy from 2011 to 2016 focused on Qatar's housing, water, roads, airports, and shipping infrastructure in part to promote economic diversification, as well as to prepare to host the 2022 FIFA World Cup soccer tournament, investing as much as $200 billion. In Doha, the result has been a construction boom, which by some reports has outpaced the capacity of the government to manage, and perhaps fund. A metro transportation system is under construction in Doha. "], "subsections": [{"section_title": "U.S.-Qatar Economic Relations", "paragraphs": ["In contrast to the two least wealthy GCC states (Bahrain and Oman), which have free trade agreements with the United States, Qatar and the United States have not negotiated an FTA. However, in April 2004, the United States and Qatar signed a Trade and Investment Framework Agreement (TIFA). Qatar has used the benefits of the more limited agreement to undertake large investments in the United States, including the City Center project in Washington, DC. Also, several U.S. universities and other institutions, such as Cornell University, Carnegie Mellon University, Georgetown University, Brookings Institution, and Rand Corporation, have established branches and offices at the Qatar Foundation's Education City outside Doha. In 2005, Qatar donated $100 million to the victims of Hurricane Katrina. The joint statement of the January 2018 U.S.-Qatar Strategic Dialogue \"recognized\" QIA's commitment of $45 billion in future investments in U.S. companies and real estate. ", "According to the U.S. Census Bureau's \"Foreign Trade Statistics\" compilation, the United States exported $4.9 billion in goods to Qatar in 2016 (about $600 million higher than 2015), and imported $1.16 billion worth of Qatari goods in 2016, slightly less than in 2015. U.S. exports to Qatar for 2017 ran about 40% less than the 2016 level, but U.S. imports from Qatar were about the same as in 2016. U.S. exports to Qatar rebounded to $4.4 billion in 2018 and imports were about $1.57 billion. U.S. exports to Qatar consist mainly of aircraft, machinery, and information technology. U.S. imports from Qatar consist mainly of petroleum products, but U.S. imports of Qatar's crude oil or natural gas have declined to negligible levels in recent years, reflecting the significant increase in U.S. domestic production of those commodities.", "Qatar's growing airline, Qatar Airways, is a major buyer of U.S. commercial aircraft. In October 2016, the airline agreed to purchase from Boeing up to another 100 passenger jets with an estimated value of $18 billion\u2014likely about $10 billion if standard industry discounts are applied. However, some U.S. airlines challenged Qatar Airways' benefits under a U.S.-Qatar \"open skies\" agreement. The U.S. carriers asserted that the airline's privileges under that agreement should be revoked because the airline's aircraft purchases are subsidized by Qatar's government, giving it an unfair competitive advantage. The Obama Administration did not reopen that agreement in response to the complaints, nor did the Trump Administration. However, the United States and Qatar reached a set of \"understandings\" on civil aviation on January 29, 2018, committing Qatar Airways to financial transparency and containing some limitations on the airline's ability to pick up passengers in Europe for flights to the United States. Some assert that Qatar Airway's 2018 purchase of Air Italy might represent a violation of those limitations. "], "subsections": [{"section_title": "U.S. Assistance", "paragraphs": ["As one of the wealthiest countries per capita in the world, Qatar gets negligible amounts of U.S. assistance. In FY2016, the United States spent about $100,000 on programs in Qatar, about two-thirds of which was for counternarcotics programming. In FY2015, the United States spent $35,000 on programs in Qatar, of which two-thirds was for counternarcotics. "], "subsections": []}]}]}]}}
{"id": "R45508", "title": "Selected International Insurance Issues in the 116th Congress", "released_date": "2019-02-14T00:00:00", "summary": ["The growth of the international insurance market and trade in insurance products and services has created opportunities and new policy issues for U.S. insurers, Congress, and the U.S. financial system. Insurance regulation is centered on the states, with the federal government having a limited role. Although the risks of loss and the regulation may be local, the business of insurance, as with many financial services, has an increasingly substantial international component as companies and investors look to grow and diversify.", "The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act", "The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank; P.L. 111-203) enhanced the federal role in insurance markets through several provisions, including the Financial Stability Oversight Council's (FSOC's) ability to designate insurers as systemically important financial institutions (SIFIs); Federal Reserve oversight of SIFIs and insurers with depository affiliates; and the creation of a Federal Insurance Office (FIO) inside the Department of the Treasury. Alongside FIO, Dodd-Frank defined a new class of international insurance agreements called covered agreements for recognition of prudential measures which the FIO and the United States Trade Representative (USTR) may negotiate with foreign entities. Although not a regulator, FIO has the authority to monitor the insurance industry and limited power to preempt state laws in conjunction with covered agreements. Dodd-Frank requires congressional consultations and a 90-day layover period for covered agreements, but such agreements do not require congressional approval.", "International Insurance Stakeholders and Concerns", "The international response to the financial crisis included the creation of a Financial Stability Board (FSB), largely made up of various countries' financial regulators, and increasing the focus of the International Association of Insurance Supervisors (IAIS) on creating regulatory standards, especially relating to insurer capital levels. The Federal Reserve and the FIO have assumed roles in the IAIS, whereas previously the individual states and the U.S. National Association of Insurance Commissioners (NAIC) had been the only U.S. members. Any agreements reached under the FSB or IAIS would have no legal impact in the United States until adopted in regulation by federal or state regulators or enacted into federal or state statute. Congress has little direct role in international regulatory cooperation agreements such as those reached at the FSB or IAIS, but past hearings and proposed legislation has addressed these issues.", "The federal involvement in insurance issues has created frictions both among the federal entities and between the states and the federal entities, and it has been a subject of congressional hearings and legislation. The first covered agreement, between the United States and the European Union (EU), went into effect on September 22, 2017. The agreement was largely rejected by the states and the NAIC, with the insurance industry split in its support, or lack thereof, for the agreement. Treasury and USTR announced a second covered agreement, with the United Kingdom (UK), on December 11, 2018.", "Congressional Outlook", "The recently negotiated U.S.-UK covered agreement is currently in the 90-day layover period giving the 116th Congress the opportunity to conduct oversight or pass legislation affecting the agreement. Past Congresses have been interested in revisiting the Dodd-Frank authorities that created covered agreements and the current Congress may consider similar legislation. The potential impact of international organizations and standards on the U.S. insurance markets and the potential for new trade agreements may also be of congressional concern."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["U.S. insurers and Congress face new policy issues and questions related to the opportunities and risks presented by the growth in the international insurance market and trade in insurance products.", "Insurance is often seen as a localized product and U.S. insurance regulation has addressed this through a state-centric regulatory system. The McCarran-Ferguson Act, passed by Congress in 1945, gives primacy to the individual states, and every state has its own insurance regulator and state laws governing insurance. Although the risks of loss and the regulation may be local, the business of insurance, as with many financial services, has an increasingly substantial international component as companies look to grow and diversify. ", "The international aspects of insurance have spurred the creation of a variety of entities and measures, both domestic and foreign, to facilitate the trade and regulation of insurance services. Financial services have been addressed in a number of U.S. trade agreements going back to the North American Free Trade Agreement (NAFTA) in 1994. The International Association of Insurance Supervisors (IAIS) was created more than 20 years ago, largely under the impetus of the U.S. National Association of Insurance Commissioners (NAIC), to promote cooperation and exchange of information among insurance supervisors, including development of regulatory standards. The 2007-2009 financial crisis sparked further international developments, with heads of state of the G-20 nations creating the Financial Stability Board (FSB).", "The postcrisis 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) altered the U.S. insurance regulatory system, particularly as it relates to international issues. With the states continuing as the primary insurance regulators, following Dodd-Frank, the Federal Reserve exercised holding company oversight over insurers who owned a bank subsidiary or who were designated for enhanced supervision (popularly known as systemically important financial institutions or SIFIs) by the new Financial Stability Oversight Council (FSOC). The FSOC includes a presidentially appointed, independent voting member with insurance expertise as well as a state regulator as a nonvoting member. The Federal Reserve, already a major actor in efforts at the FSB and the Basel Committee on Banking Supervision, thus became a significant insurance supervisor and joined the IAIS shortly thereafter. Dodd-Frank also created a new Federal Insurance Office (FIO). The FIO is not a federal insurance regulator, but is tasked with representing the United States in international fora and, along with the United States Trade Representative (USTR), can negotiate international covered agreements relating to insurance prudential measures. The FIO also became a member of the IAIS and is participating significantly in IAIS efforts to create insurance capital standards. ", "The new federal involvement in insurance issues, both domestic and international, has created frictions both among the federal entities and between the states and the federal entities, and has been a subject of both congressional hearings and proposed legislation.", "This report discusses trade in insurance services and summarizes the various international entities and agreements affecting the regulation of and trade in insurance. It then addresses particular issues and controversies in greater depth, including the concluded U.S.-EU covered agreement, pending U.S.-UK covered agreement, and issues relating to international insurance standards. It includes an Appendix addressing legislation in the 115 th Congress. "], "subsections": []}, {"section_title": "International Insurance Trade", "paragraphs": ["In 2017, total U.S. services accounted for $798 billion of U.S. exports and $542 billion of U.S. imports, creating a surplus of $255 billion. In financial services generally, the United States runs a substantial trade surplus, exporting $110 billion and importing $29 billion. In contrast, the United States imported nearly $51 billion in insurance services and exported $18 billion in 2017, mostly due to firms' reliance on foreign reinsurance. This deficit has dropped from its peak in 2009, but U.S. insurance services trade has been consistently in deficit for many years (see Figure 1 ). ", "Global performance by insurance brokers and agencies is concentrated, with Europe, North America, and North Asia accounting for 88.6% of total written premiums. Overall, the North American and European domestic insurance markets are highly competitive and there are fewer suppliers and less competition in the Asia-Pacific region. ", "A third of U.S. insurance services exports are with Asia-Pacific, with Japan accounting for 14% of total U.S. insurance exports in 2017 (see Figure 2 ). Bermuda and the United Kingdom each account for another 15% of U.S. international insurance exports. Industry analysts note that although the current level of trade is relatively low for industry segments such as property, casualty, and direct insurance, it is rising as companies seek new markets for growth and risk diversification. The property casualty market declined from 2013 to 2018, in part due to intensifying natural disasters; however, moving forward, that market is expected to grow due to demand in emerging markets. "], "subsections": [{"section_title": "Insurance in U.S. Free Trade Agreements", "paragraphs": ["Services, including financial and insurance services, are traded internationally in accordance with trade agreements negotiated by the USTR on behalf of the United States, similar to trade in goods. As a member of the World Trade Organization (WTO), the United States helped lead the conclusion of negotiations on the General Agreement on Trade in Services (GATS) in 1994, thus creating the first and only multilateral framework of principles and rules for government policies and regulations affecting trade in services among the 164 WTO countries. The GATS provides the foundational floor on which rules in other agreements on services, including U.S. free trade agreements (FTAs), are based. Core GATS principles include most-favored nation (MFN), transparency, and national treatment. As part of the GATS negotiations, WTO members also agreed to binding market access commitments on a positive list basis in which each member specified the sectors covered by its commitments. For insurance services, the United States submitted its schedule of market access and national treatment commitments, as well as exceptions, under GATS to allow foreign companies to compete in the United States in accordance with the U.S. state-based system.", "The GATS Financial S ervices Annex applies to \" all insurance and insurance-related services, and all banking and other financial services (excluding insurance) .\" The Annex defines insurance services as follows:", "(i.) Direct insurance (including co-insurance):", "(A.) life", "(B.) non-life", "(ii.) Reinsurance and retrocession;", "(iii.) Insurance intermediation, such as brokerage and agency;", "(iv.) Services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services.", "The annex excludes \"services supplied in the exe rcise of governmental authority,\" such as central banks, Social Security, or public pension plans. In the U.S. Schedule of Specific Commitments, the United States lists market access and national treatment limitations that constrain foreign companies' access in line with state laws. These include clarifying which states have no mechanism for licensing initial entry of non-U.S. insurance companies except under certain circumstances and which states require U.S. citizenship for boards of directors. ", "Furthermore, the GATS and U.S. FTAs explicitly protect prudential financial regulation . The prudential exception within the GATS allows members to take \" measures for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier, or to ensure the integrity and stability of the financial system ,\" even if those measures do not comply with the agreement. ", "Most U.S. FTAs contain a chapter on financial services that builds on the commitments under GATS (\"WTO-plus\"). Like GATS, these chapters exclude government-provided public services. In addition to market access, national treatment, and MFN obligations, FTAs include WTO-plus obligations, such as increased transparency by providing interested persons from one party the opportunity to comment on proposed regulations of another party; allowing foreign providers to supply new financial services if domestic companies are permitted to do so; and providing access to public payment and clearing systems. Each FTA chapter defines the specific financial and insurance services covered and incorporates relevant provisions in other FTA chapters, such as Investment and Cross-Border Services."], "subsections": [{"section_title": "The Proposed U.S.-Mexico-Canada Agreement", "paragraphs": ["On November 30, 2018, President Trump and the leaders of Canada and Mexico signed the United States-Mexico-Canada Trade Agreement (USMCA) to update and revise the North American Free Trade Agreement (NAFTA). Still subject to congressional approval, the proposed USMCA contains several differences from NAFTA and is seen as representing the Trump Administration's approach to trade agreements. The proposed agreement has some similarities and differences from the proposed Trans-Pacific Partnership (TPP), which was negotiated under the Obama Administration and from which the United States withdrew in 2017. Given that the TPP also included both Mexico and Canada, many observers saw it as a template for the NAFTA renegotiations on certain issues.", "Like the TPP, the financial services chapter in the proposed USMCA reflects the growing trade in insurance and is an example of extensive and enforceable \"WTO-plus\" commitments. Compared with NAFTA, the proposed agreement clarifies the coverage of insurance services and contains a specific new provision on expedited availability of insurance services and transparency requirements designed to ensure the use of good regulatory practices to better enable U.S. firms to do business in those markets. In contrast to NAFTA, the proposed USMCA would apply both national treatment and market access obligations to cross-border supply of insurance services.", "The USMCA provisions on cross-border data flows are stronger than similar provisions in recent U.S. FTAs. They would, for example, prohibit the use of data or computing localization requirements for financial services. Canada would have one year to comply with the ban, and it would need to remove existing localization requirements that have been a trade barrier for U.S. firms seeking to do business in Canada. Many provisions in the USMCA Digital Trade chapter are relevant to the insurance industry, such as permitting electronic signatures, protecting source code and algorithms, promoting cybersecurity, and allowing cross-border data flows. ", "By contrast, some changes in the investor-state dispute settlement system (ISDS) provide a narrower scope than in TPP or NAFTA, and ISDS would apply only to certain U.S. or Mexican covered investments, excluding Canada completely. Changes in the state-to-state dispute settlement system also may limit its effectiveness for the insurance sector in certain situations. These changes have raised concerns among insurance companies.", "Similar to other trade agreements, the proposed USMCA would establish a Committee on Financial Services and provide for consultations between the parties on ongoing implementation and other issues of interest."], "subsections": []}]}]}, {"section_title": "Covered Agreements", "paragraphs": ["In comparison to trade agreements, a covered agreement is a relatively new form of an international agreement, established along with the FIO in Title V of the Dodd-Frank Act. The statute defines a covered agreement as a type of international insurance or reinsurance agreement for recognition of prudential measures that the FIO and the USTR negotiate on a bilateral or multilateral basis. FIO has no regulatory authority over the insurance industry, which is generally regulated by the individual states. This is a significant contrast to, for example, federal financial regulators, such as the Federal Reserve or the Securities and Exchange Commission (SEC), that might enter into international regulatory agreements at the Basel Committee on Banking Supervision or the International Organization of Securities Commissions, respectively. After such agreements are reached, the Federal Reserve or SEC would generally then implement the agreements under its regulatory authority using the federal rulemaking process. ", "Although the FIO lacks regulatory authority, some state laws may be preempted if the FIO director determines that a state measure (1) is inconsistent with a covered agreement and (2) results in less favorable treatment for foreign insurers. The statute limits the preemption with the following provision:", "(j) Savings Provisions. \u2014 Nothing in this section shall\u2014", "(1) preempt\u2014", "(A) any State insurance measure that governs any insurer's rates, premiums, underwriting, or sales practices;", "(B) any State coverage requirements for insurance;", "(C) the application of the antitrust laws of any State to the business of insurance; or", "(D) any State insurance measure governing the capital or solvency of an insurer, except to the extent that such State insurance measure results in less favorable treatment of a non-United State insurer than a United States insurer.", "Further strictures are placed on the FIO determination, including notice to the states involved and to congressional committees; public notice and comment in the Federal Register ; and the specific application of the Administrative Procedure Act, including de novo determination by courts in a judicial review. Although there is no legal precedent interpreting the covered agreement statute, it appears that these provisions would narrow the breadth of any covered agreement, particularly compared with other international agreements reached by federal financial regulators. International agreements have been undertaken without direct congressional direction under agencies' existing regulatory authorities. These authorities are then implemented through the regulatory rulemaking process, which may, in some cases, preempt state laws and regulations. Although the FIO and the USTR must consult with Congress on covered agreement negotiations, the statute does not require specific authorization or approval from Congress for a covered agreement. It does, however, require a 90-day layover period."], "subsections": [{"section_title": "Covered Agreements and Trade Agreements: Key Differences", "paragraphs": ["Although the goals of a covered agreement and aspects of trade agreements may be similar\u2014market access and regulatory compatibility\u2014the role of Congress is different in each instance. Congress has direct constitutional authority over foreign commerce, while Congress has given itself a consultative role in insurance negotiations through the Dodd-Frank Act.", "The U.S. Constitution assigns express authority over foreign trade to Congress. Article I, Section 8, of the Constitution gives Congress the power to \"regulate commerce with foreign nations\" and to \"lay and collect taxes, duties, imposts, and excises.\" U.S. trade agreements such as the North American Free Trade Agreement (NAFTA), WTO agreements, and bilateral FTAs have been approved by majority vote of each house rather than by two-thirds vote of the Senate\u2014that is, they have been treated as congressional-executive agreements rather than as treaties. This practice contrasts with the covered agreements, defined by Dodd-Frank (see above), which require congressional notification and a 90-day layover. The layover time could give Congress time to act on the agreement if Congress chooses, but congressional action is not required for a covered agreement to take effect. In further contrast, as mentioned previously, international agreements entered into by federal financial regulators, such as the Basel Capital accords in banking, have no specific congressional notification requirements, but must be implemented through the rulemaking process."], "subsections": [{"section_title": "Trade Promotion Authority", "paragraphs": ["U.S. bilateral, regional, and free trade agreements are conducted under the auspices of Trade Promotion Authority (TPA). TPA is the time-limited authority that Congress uses to set U.S. trade negotiating objectives, establish notification and consultation requirements, and allow implementing bills for certain reciprocal trade agreements to be considered under expedited procedures, provided certain statutory requirements are met.", "As noted above, the Dodd-Frank Act requires that the FIO or the Treasury Secretary and the USTR notify and consult with Congress before and during negotiations on a covered agreement. In addition, it requires the submission of the agreement and a layover period of 90 days, but does not require congressional approval.", "By contrast, legislation implementing FTAs must be approved by Congress. Under TPA, the President must fulfill notification and consultative requirements in order to begin negotiations and during negotiations. Once the negotiations are concluded, the President must notify Congress 90 days prior to signing the agreement. After the agreement is signed, there are additional reporting requirements to disclose texts and release the U.S. International Trade Commission's economic assessment of the agreement. The introduction of implementing legislation sets off a 90-legislative-day maximum period of time for congressional consideration, and the legislation is accompanied by additional reports. If these notification and consultation procedures are not met to the satisfaction of Congress, procedures are available to remove expedited treatment from the implementing legislation."], "subsections": []}, {"section_title": "State Role", "paragraphs": ["As discussed above, the FIO and the USTR jointly negotiate covered agreements, with the states having a consultative role set in the statute. In international trade agreements the USTR is the lead U.S. negotiator, with representatives from executive branch agencies participating to provide expertise. In addition to consultations within the executive branch under an interagency process, USTR formally consults with state governments and regulators through the Intergovernmental Policy Advisory Committee on Trade (IGPAC) as part of the USTR advisory committee system for trade negotiations. USTR's Office of Intergovernmental Affairs and Public Engagement (IAPE) manages the advisory committees and provides outreach to official state points of contact, governors, legislatures, and associations on all trade issues of interest to states.", "The USTR cannot make commitments on behalf of U.S. states in trade negotiations. This can be a source of frustration for negotiating partners who seek market openings at the state level. As part of trade negotiations, USTR may try to persuade individual states to make regulatory changes, but USTR is limited to what state regulators voluntarily consent to do. In general, state laws and state insurance regulations are explicitly exempted from trade negotiations. For example, in the proposed USMCA agreement, the United States listed measures for which the FTA obligations would not apply, including \"All existing non-conforming measures of all states of the United States, the District of Columbia, and Puerto Rico.\" In contrast, as explained above, in the context of a covered agreement, FIO and USTR may make limited commitments that result in preempting some state laws and regulations. "], "subsections": []}, {"section_title": "Enforcing Trade Agreements and Covered Agreements", "paragraphs": ["In general, international trade agreements are binding agreements. If a party to a trade agreement believes another party has adopted a law, regulation, or practice that violates the commitments under the trade agreement, the party may initiate dispute settlement proceedings under the agreement's dispute settlement provisions, which may differ for each agreement. Each party to a trade agreement has an obligation to comply with dispute resolution rulings or potentially face withdrawal of certain benefits under the agreement. Dodd-Frank does not specify how disagreements might be resolved in covered agreements, thus each covered agreement would need to clarify the dispute resolution process."], "subsections": []}, {"section_title": "Regulatory Cooperation", "paragraphs": ["As discussed, U.S. FTAs include market access commitments and rules and disciplines governing financial services measures, such as nondiscrimination and transparency obligations. Although FTAs customarily establish a Financial Services Committee composed of each party's regulators to oversee implementation of the agreement and provide a forum for communication, U.S. FTAs to date exclude regulatory cooperation commitments for the financial services sector, though this is subject to change in future trade agreements. ", "On October 16, 2018, the Trump Administration notified Congress, under Trade Promotion Authority (TPA), of its intent to enter trade agreement negotiations with the European Union (EU), its largest overall trade and investment partner. The negotiating objectives published by USTR include to \"expand competitive market opportunities for U.S. financial service suppliers to obtain fairer and more open conditions of financial services trade\" and \"improve transparency and predictability in the EU's financial services regulatory procedures, and ensure that the EU's financial regulatory measures are administered in an equitable manner.\" The EU member states are currently discussing the scope of the EU negotiating mandate, and U.S.-EU preparatory talks have been ongoing. In prior trade agreement negotiations between the two sides, the EU sought to include regulatory cooperation issues that could have addressed some of the same matters as the recent U.S.-EU covered agreement (see below). Some Members of Congress supported this position, whereas U.S. financial regulators opposed the inclusion at that time. ", "During the prior negotiations, the United States and the EU agreed to establish the Joint U.S.-EU Financial Regulatory Forum, which has met regularly. U.S. participants include representatives of the Treasury Department, Federal Reserve, Commodity Futures Trading Commission (CFTC), Federal Deposit Insurance Corporation (FDIC), SEC, and Office of the Comptroller of the Currency (OCC). The forum meetings include discussions of financial regulatory reforms, agency priorities, assessments of the cross-border impact of regulation, and cooperation efforts on specific financial issues. "], "subsections": []}]}, {"section_title": "U.S.-EU Covered Agreement", "paragraphs": ["On September 22, 2017, the United States and European Union signed the first bilateral insurance covered agreement. The covered agreement had been submitted to the House Committees on Financial Services and Ways and Means and the Senate Committees on Banking, Housing, and Urban Affairs and Finance on January 13, 2017. As noted above, a 90-day layover period is mandated in statute to allow Congress to review the agreement. The House Financial Services Committee Subcommittee on Housing and Insurance and the Senate Committee on Banking, Housing, and Urban Affairs each held a hearing on the agreement, but no legislative action affecting the agreement occurred. ", "To address concerns among U.S. insurance firms that their market access to the EU would become limited due to changes in EU regulatory policy, in November 2015, the Obama Administration notified Congress regarding plans to begin negotiations with the EU on a covered agreement. Expressed goals for the negotiations included (1) achieving recognition of the U.S. regulatory system by the EU, particularly through an \"equivalency\" determination by the EU that would allow U.S. insurers and reinsurers to operate throughout the EU without increased regulatory burdens, and (2) obtaining uniform treatment of EU-based reinsurers operating in the United States, particularly with respect to collateral requirements. The issue of equivalency for U.S. regulation is a relatively new one, as Solvency II only came into effect at the beginning of 2016 (see \" The European Union, Solvency II, and Equivalency \" below), whereas the question of reinsurance collateral has been a concern of the EU for many years (see \" Reinsurance Collateral \" below). The covered agreement negotiations also sought to facilitate the exchange of confidential information among supervisors across borders.", "According to the USTR and Treasury, the bilateral agreement", "allows U.S. and EU insurers to rely on their home country regulators for worldwide prudential insurance group supervision when operating in either market; eliminates collateral and local presence requirements for reinsurers meeting certain solvency and market conduct conditions; and encourages information sharing between insurance supervisors.", "The proposal sets time lines for each side to make the necessary changes and allows either side to not apply the agreement if the other side falls short on full implementation. Unlike the goals expressed to Congress when negotiations began, the agreement does not explicitly call for equivalency recognition of the U.S. insurance regulatory system by the EU. However, the agreement's provisions on group supervision would seem to meet the same goal of reducing the regulatory burden on U.S. insurers operating inside the EU. The proposal goes beyond a previous state-level proposal on reinsurance collateral requirements put forth by the NAIC and adopted by many states, and allows for the possibility of federal preemption if states are not in compliance.", "Several U.S. industry groups welcomed the agreement, including the American Insurance Association (AIA), the Reinsurance Association of America, and the American Council of Life Insurers (ACLI) . The AIA's senior vice president and general counsel noted that, \"when negotiations began, U.S. insurance and reinsurance groups were facing growing obstacles to their ability to do business in Europe, but this agreement removes those barriers\u2014affirming not only each other's regulatory systems, but also their commitments to non-discriminatory treatment and open, reciprocal, competitive insurance markets.\" ", "State regulators and state lawmakers , respectively represented by the NAIC and National Council of Insurance Legislators (NCOIL), expressed concern with the agreement due to the limited state involvement in the negotiation process and the potential federal preemption of state laws and regulations. NCOIL expressed disappointment with the final signing, stating \"this agreement is an intrusion by both the federal government and international regulatory authorities into the U.S. state based regulation of insurance regulation.\" Some insurers also question the utility of the agreement, with the president of the National Association of Mutual Insurance Companies (NAMIC) seeing ambiguity that \"will result in confusion and potentially endless negotiations with Europe on insurance regulation.\" As mentioned, the agreement includes a review after an initial implementation period, at which time either the United States or EU may pull out of the agreement."], "subsections": [{"section_title": "Reinsurance Collateral", "paragraphs": ["The covered agreement aims to address EU concerns regarding U.S. state regulatory requirements that reinsurance issued by non-U.S. or alien reinsurers must be backed by collateral deposited in the United States. In the past, this requirement was generally for a 100% collateral deposit. Non-U.S. reinsurers long resisted this requirement, pointing out, among other arguments, that U.S. reinsurers do not have any collateral requirements in many foreign countries and that the current regulations do not recognize when an alien reinsurer cedes some of the risk back to a U.S. reinsurer. Formerly, the NAIC and the individual states declined to reduce collateral requirements, citing fears of unpaid claims from non-U.S. reinsurers and an inability to collect judgments in courts overseas. This stance, however, has changed in recent years.", "In 2010, an NAIC Task Force approved recommendations to reduce required collateral based on the financial strength of the reinsurer involved and recognition of the insurer's domiciliary regulator as a qualified jurisdiction. The NAIC, in November 2011, adopted this proposal as a model law and accompanying model regulation. To take effect, however, these changes must be made to state law and regulation by the individual state legislatures and insurance regulators. The reinsurance models are part of the NAIC accreditation standards, and all states are expected to adopt them by 2019.", "According to information provided to CRS by the NAIC, as of December 2018, 49 states have adopted the model law and 42 have adopted the accompanying regulation. To date, 29 reinsurers have been approved by the states as certified reinsurers for reduction in collateral requirements. To receive the reduced collateral requirements, the reinsurer's home jurisdiction must also be reviewed and listed on the NAIC List of Qualified Jurisdictions. As of January 2019, seven jurisdictions have been approved.", "The state actions addressing reinsurance collateral requirements, however, have not fully met concerns of foreign insurers regarding the issue. Non-U.S. reinsurers reportedly would like a single standard across the United States that would eliminate, not just reduce, collateral requirements. This desire was a significant part of the EU's expressed motivation to enter into covered agreement negotiations. A Council of the EU representative indicated that \"an agreement with the U.S. will greatly facilitate trade in reinsurance and related activities\" and would \"enable us, for instance, to recognize each other's prudential rules and help supervisors exchange information.\""], "subsections": []}, {"section_title": "The European Union, Solvency II, and Equivalency", "paragraphs": ["The covered agreement also aims to assist U.S. insurers concerned with potential regulatory burdens in relation to EU market requirements that went into effect in 2016. The European Union's Solvency II is part of a project aimed at transforming the EU into a single market for financial services, including insurance. In some ways, Solvency II is purely an internal EU project designed to more closely harmonize laws among the EU countries. However, as part of the Solvency II project, new equivalency determinations of foreign jurisdictions are to be made by the EU. An equivalency determination would allow insurers from a foreign jurisdiction to operate throughout the EU as do EU insurers. If the U.S. system of state-centered supervision of insurers were not judged to be \"equivalent\" to the EU insurance supervision, U.S. insurers could face more difficulty in operating in EU markets. Past suggestions have been made that an EU regulatory change might serve as \"a useful tool in international trade negotiations as it could help improve access for European reinsurers to foreign markets,\" such as the United States. A June 6, 2014, letter from the European Commission to FIO and the NAIC drew an explicit connection between an equivalency designation applying to the United States and the U.S. removal of reinsurance capital requirements that the states place on non-U.S. reinsurers.", "Solvency II came into effect in the EU at the beginning of 2016. The EU has granted provisional equivalence to the United States along with five other countries and equivalence to three countries. The grant of provisional U.S. equivalence, however, applies only to capital requirements of EU insurers with U.S. operations, and U.S. insurers had reported experiencing difficulties with their operation in EU countries prior to the signing of the covered agreement."], "subsections": []}]}, {"section_title": "The U.S.-UK Covered Agreement", "paragraphs": ["Following the 2016 referendum on the United Kingdom remaining in the European Union (popularly known as Brexit ), the UK is scheduled to leave the EU by March 29, 2019. The future status and terms of the UK withdrawal from the EU is highly uncertain. Withdrawal from the EU may leave the UK outside the scope of any existing EU international agreements, including the U.S.-EU covered agreement. Thus, insurance trade between the United States and the UK could be negatively affected. As noted, the UK is an important market for U.S. firms, accounting for more than half of U.S. insurance exports in 2017.", "The United States and UK negotiated a separate covered agreement to address the potential disruption to insurance trade under Brexit. Announced on December 11, 2018, the substantive provisions of the U.S.-UK agreement mirror those in the U.S.-EU covered agreement\u2014reinsurance capital and local presence requirements are to be eliminated and home country regulation is to be recognized for worldwide group supervision. According to the USTR and Treasury Department, the bilateral agreement aims to provide \"regulatory certainty and market continuity\" for U.S. and UK firms operating in the two markets. The Administration submitted the final text to Congress on December 11, 2018, starting the 90-day layover period for Congress to review the agreement prior to signature. The agreement implicitly recognizes the uncertainty regarding Brexit and will not come into effect until both parties provide notification that their internal procedures have been completed with the UK specifically taking account \"of its obligations arising in respect of any agreement between the EU and the UK pursuant to Article 50 of the Treaty on European Union.\"", "The U.S.-UK covered agreement has been welcomed by most insurance stakeholders for addressing the uncertainty surrounding Brexit. For example, although the NAIC continues to have \"concerns with the covered agreement mechanism, [the NAIC does] not object to its use in this instance to replicate consistent treatment for the UK.\"", "In addition to the covered agreement, on October 16, 2018, the Administration formally notified Congress of its intent to enter into negotiations of a bilateral U.S.-UK free trade agreement. Whether an agreement would include financial services regulatory cooperation is unclear, and the United States and the UK would not be able to start formal trade negotiations until the UK officially leaves the EU. "], "subsections": []}, {"section_title": "Future Covered Agreements", "paragraphs": ["The U.S.-EU and U.S.-UK covered agreements as negotiated apply only to the jurisdictions that are party to the respective agreements. The United States, however, engages in a significant amount of trade in insurance services with other countries. Depending on what changes might be made to state insurance laws, reinsurers from other countries such as Bermuda or Japan could continue to face collateral requirements when offering products in the United States while competing with EU reinsurers free from such requirements. ", "Two primary policy approaches are being considered to address concerns regarding an uneven playing field between European and non-European reinsurers. It would be possible to negotiate additional covered agreements with non-European jurisdictions, as was done with the UK. In addition to the negotiation of new covered agreements, state laws enacted in response to the U.S.-EU covered agreement might themselves remove reinsurance collateral requirements for all or some non-EU jurisdictions. The NAIC is in the process of adopting an updated model law regarding reinsurance collateral, which would do this for a subset of \"qualified jurisdictions\" including Japan, Bermuda, and Switzerland."], "subsections": []}]}, {"section_title": "International Insurance Entities", "paragraphs": ["Outside of international trade negotiations and agreements, two separate but interrelated entities have the most significant impact on international insurance issues in the United States: the Financial Stability Board and the International Association of Insurance Supervisors."], "subsections": [{"section_title": "The Financial Stability Board", "paragraphs": ["The FSB was established in April 2009 by G-20 nations to help strengthen the global financial system following the 2008 financial crisis. The FSB's functions include assessing vulnerabilities to the global financial system; coordinating with financial authorities of member nations; and recommending measures to protect and strengthen the global financial system. The FSB's members comprise financial regulatory agencies of G-20 nations. U.S. FSB members are the Department of the Treasury, the Federal Reserve, and the SEC; no insurance-focused representative from the United States is included. The FSB's recommendations and decisions are not legally binding on any of its member nations. Rather, the FSB \"operates by moral suasion and peer pressure, in order to set internationally agreed policies and minimum standards that its members commit to implementing at national level.\""], "subsections": []}, {"section_title": "The International Association of Insurance Supervisors", "paragraphs": ["The IAIS, created in 1994, is the international standard-setting body, establishing a variety of guidance documents and conducting educational efforts for the insurance sector. Its mission is \"to promote effective and globally consistent supervision of the insurance industry.\" The IAIS is primarily made up of insurance regulators worldwide with most jurisdictions having membership. U.S. members include all the individual states, the NAIC, the Federal Reserve, and the Federal Insurance Office. FIO and the Federal Reserve became IAIS members only after the passage of the Dodd-Frank Act. These U.S. members serve on many IAIS committees and working groups and have held various committee positions, past and present. An NAIC representative serves as chair of the IAIS Policy Development Committee, which plays a central role in drafting IAIS-proposed standards; the FIO director previously served as chair of this committee's prior incarnation, the IAIS Financial Stability and Technical Committee. The NAIC coordinates individual state participation in IAIS committees and working groups. According to the NAIC, three NAIC members serve on the IAIS Executive Committee, including one as vice chair; three serve on the Policy Development Committee; and three serve on the Macroprudential Committee. The NAIC's 56 members have 15 votes in the IAIS general meetings, with the NAIC designating which of its members may exercise their votes.", " Figure 3 provides a graphical representation of the relationships between international entities and their U.S. members."], "subsections": []}]}, {"section_title": "International Insurance Standards and Designations", "paragraphs": ["As part of its monitoring of global financial stability, the FSB has designated a number of financial institutions as globally systemically important. An FSB designation is meant to indicate that the failure of an individual institution could have a negative impact on the global financial system. Initially, the designation focused on global systemically important banks (G-SIBs) , but it also encompasses global systemically important insurers (G-SIIs), and nonbank noninsurer global systemically important financial institutions (NBNI G-SIFIs) , such as large asset managers, broker-dealers, and hedge funds. Designated institutions are expected to meet higher qualitative and quantitative regulatory and capital standards to help ensure their stability during a crisis. Although the FSB designations may be similar in intent to the designations done under the FSOC in the United States, FSB designations are a separate process with somewhat different criteria.", "In 2016, the FSB designated nine G-SIIs, including three U.S. insurers (AIG, MetLife, and Prudential Financial). The FSB also had requested that the IAIS develop capital standards and other regulatory measures to apply to G-SIIs as well as Internationally Active Insurance Groups (IAIGs), a wider set of insurers that fall short of the G-SII designation. In 2017, the FSB did not publish a new G-SII list, allowing the 2016 list to continue to be in effect. In 2018, the FSB decided not to identify G-SIIs, and it may suspend or discontinue the identification of G-SIIs depending on a new IAIS \"holistic framework\" to address systemic risk based on specific activities rather than individual firm designations.", "In addition to the standards addressing systemic risk, the IAIS is developing a general Common Framework for the Supervision of Internationally Active Insurance Groups (ComFrame). ComFrame encompasses a range of supervisory standards, particularly capital standards for IAIGs. The ComFrame process dates to 2010; currently, a public comment period has ended for a draft of the overall framework and a \"2.0\" version of specific insurance capital standards, with additional consultations continuing and formal adoption scheduled at the end of 2019. "], "subsections": [{"section_title": "Implementation of International Standards", "paragraphs": ["In general, actions undertaken by international bodies, such as the FSB's designations of G-SIIs or adoption of capital standards by the IAIS, have no immediate effect on the regulatory system within the United States. To be implemented, such standards must be adopted by regulators in the United States or enacted into law if regulators do not already have sufficient legal authority to adopt the standards. In many cases, it is expected that members of such international bodies will adopt the agreed-to standards. For example, the Basel Committee on Bank Supervision (BCBS) charter includes among the members' responsibilities that they commit to \"implement and apply BCBS standards in their domestic jurisdictions within the pre-defined timeframe established by the Committee.\" In some situations, the translation from international standard to national implementation may be relatively straightforward because the agencies agreeing to the international standards are the same agencies that have the authority to implement the standards at home.", "The mix of federal and state authorities over insurance in the United States, however, has the potential to complicate the adoption of international standards, such as the IAIS's capital standards that are under development. In the case of insurance, the U.S. representation at the IAIS includes (1) the NAIC, which collectively represents the U.S. state regulators, but has no regulatory authority of its own; (2) the 56 different states and territories, which collectively regulate the entire U.S. insurance market, but individually oversee only individual states and territories; (3) the Federal Reserve, which has holding company oversight only over designated systemically significant insurers and insurers with depository subsidiaries; and (4) the FIO, which has authority to monitor and report but no specific regulatory authority. Thus, it is possible for a situation to develop where some part of the U.S. representation at the IAIS may agree to particular policies or standards without agreement by the entity having authority to actually implement the policies or standards that are being agreed to."], "subsections": []}, {"section_title": "Moral Suasion and Market Pressures", "paragraphs": ["Although international standards may not be self-executing, nations may still face pressures to implement these standards. For example, the International Monetary Fund performs a Financial Sector Assessment Program (FSAP) of many countries every five years. In the latest FSAPs from 2010 and 2015, the judgments and recommendations offered regarding the U.S. insurance regulatory system compared U.S. laws and regulations to core principles adopted by the IAIS. Although U.S. regulators generally accept the IAIS core principles, the FSAP does note that state regulators specifically \"disagree with a few of the ratings ascribed to certain\" core principles and the states \"do not believe that each of the proposed regulatory reforms recommended in the Report is warranted, or would necessarily result in more effective supervision.\"", "Pressure may also derive from internationally active market participants, including both domestic and foreign firms. Companies operating in different jurisdictions incur costs adapting to different regulatory environments. To minimize these costs, companies may pressure jurisdictions to adopt similar rules. Even if one country's rules might be more favorable to the company seen in the abstract, it may still be more efficient for a company if all the countries adopt slightly less favorable, but substantially similar, rules. Thus, for example, a U.S. company operating in multiple countries might favor adoption of U.S. regulations similar to international standards to simplify business operations, even if it finds the U.S. regulations generally preferable. "], "subsections": []}, {"section_title": "Specific Policy Concerns with International Standards", "paragraphs": ["Those concerned about potential international insurance standards often raise the possibility that these standards may be \"bank-like\" and thus inappropriate for application to insurers. A primary concern in this regard is the treatment of financial groups. In banking regulation, a group holding company is expected, if not legally required, to provide financial assistance to subsidiaries if necessary. In addition, safety and soundness regulations may be applied at a group-wide level. A somewhat similar focus on the group-wide level is also found in the EU's Solvency II and in possible future IAIS standards. Within U.S. insurance regulation, however, state regulators in the United States historically have focused on the individual legal entities and on ensuring that the specific subsidiaries have sufficient capital to fulfill the promises inherent in the contracts made with policyholders. Since the financial crisis, the U.S. regulators have increased oversight at the overall group level, but the possible movement of capital between subsidiaries remains an issue. The NAIC has indicated specifically that \"it is critical that the free flow of capital (i.e., assets) across a group should not jeopardize the financial strength of any insurer in the group.\" A group-wide approach that facilitates capital movement among subsidiaries could potentially improve financial stability as a whole if it prevents a large financial firm from becoming insolvent in the short run. It also could provide protection for individual policyholders if it results in additional resources being made available to pay immediate claims. Potential movement of capital within groups, however, could also potentially reduce financial stability if it were to cause customers to doubt the payment of future claims and thus promote panic or contagion. Free movement of capital across subsidiaries could also harm policyholders in the future if it results in insufficient capital to pay such claims."], "subsections": []}]}, {"section_title": "Congressional Outlook", "paragraphs": ["The 116 th Congress faces an immediate issue regarding the U.S.-UK covered agreement. This agreement is currently in its statutory 90-day layover period (which began December 11, 2018) before it can take effect. Congress could enact legislation directly affecting the agreement, conduct hearings or other oversight mechanisms, or allow the covered agreement to take effect without direct action. ", "The U.S.-UK covered agreement may not be the only international insurance issue before this Congress. With expected continued growth in the international insurance market and differences in regulatory approaches, the frictions between U.S. and foreign regulators as well as between state and federal regulators seem likely to continue. Congress may choose to address these issues in multiple ways including, for example,", "amending Dodd-Frank and the statutory role of FIO and the USTR in international insurance negotiations; legislating an increased role for states in U.S. representation to international insurance regulatory entities; endorsing international insurance standards and legislating their adoption by states; encouraging additional covered agreements to address the countries not covered by the current ones; or encouraging the inclusion of insurance services as part of negotiations of potential free trade agreements."], "subsections": [{"section_title": "Appendix. Legislation in the 115th Congress", "paragraphs": ["The following summarizes legislation addressing international insurance issues in the 115 th Congress. Legislation is ordered according to the stage to which it advanced in the legislative process.", "Economic Growth, Regulatory Relief, and Consumer Protection Act ( P.L. 115-174 / S. 2155 )", "S. 2155 was introduced by Senator Michael Crapo and 19 cosponsors on November 16, 2017. The bill, covering a broad range of financial services provisions largely dealing with noninsurance issues, was marked up and reported on a vote of 16-7 by the Senate Committee on Banking, Housing, and Urban Affairs in December 2017. A new section was added during the Senate committee markup with language similar to S. 1360 (discussed below). S. 2155 passed the Senate by a vote of 67-31 on March 14, 2018. The House passed S. 2155 without amendment on May 22, 2018, and the President signed the bill into P.L. 115-174 on May 24, 2018. ", "Section 211 of P.L. 115-174 finds that the Treasury, Federal Reserve, and FIO director shall support transparency in international insurance fora and shall \"achieve consensus positions with State insurance regulators through the [NAIC]\" when taking positions in international fora. It creates an \"Insurance Policy Advisory Committee on International Capital Standards and Other Insurance Issues\" at the Federal Reserve made up of 21 members with expertise on various aspects of insurance. The Federal Reserve and the Department of the Treasury are to complete an annual report and to provide testimony on the ongoing discussions at the IAIS through 2022, and the Federal Reserve and FIO are to complete a study and report, along with the opportunity for public comment and review by the Government Accountability Office (GAO), on the impact of international capital standards or other proposals prior to agreeing to such standards. Unlike S. 1360 , however, the enacted law does not have specific requirements on the final text of any international capital standard. After signing S. 2155 , the President released a statement indicating that the congressional directions in the findings contravene the President's \"exclusive constitutional authority to determine the time, scope, and objectives of international negotiations\" but that the President will \"give careful and respectful consideration to the preferences expressed by the Congress in section 211(a) and will consult with State officials as appropriate.\"", "International Insurance Standards Act ( H.R. 4537 / S. 488 , Title XIV)", "Representative Sean Duffy, along with seven cosponsors, introduced H.R. 4537 on December 4, 2017. (A substantially similar bill, H.R. 3762 , was previously introduced and addressed in an October 24, 2017, hearing by the House Financial Services' Subcommittee on Housing and Insurance.) H.R. 4537 was marked up and ordered reported on a vote of 56-4 by the House Committee on Financial Services on December 12-13, 2017. It was reported ( H.Rept. 115-804 ) on July 3, 2018. The House considered a further amended version on July 10, 2018, and passed it under suspension of the rule by a voice vote. H.R. 4537 was not taken up by the Senate in the 115 th Congress.", "S. 488 originally was introduced by Senator Pat Toomey as the Encouraging Employee Ownership Act, increasing the threshold for disclosure relating to compensatory benefit plans. After Senate passage on September 11, 2017, it was taken up in the House and amended with a number of different provisions, mostly focusing on securities regulation. Title XIV of the amended version of S. 488 , however, was nearly identical to H.R. 4537 as it passed the House. The House-passed version of S. 488 was not taken up by the Senate in the 115 th Congress.", "H.R. 4537 as passed by the House and S. 488 as passed by the House would have instituted a number of requirements relating to international insurance standards and insurance covered agreements. U.S. federal representatives in international fora would have been directed not to agree to any proposal that does not recognize the U.S. system as satisfying that proposal. Such representatives would have been required to consult and coordinate with the state insurance regulators and with Congress prior to and during negotiations and to submit a report to Congress prior to entering into an agreement.", "With regard to future covered agreements, the bill would have required U.S. negotiators to provide congressional access to negotiating texts and to \"closely consult and coordinate with State insurance commissioners.\" Future covered agreements were to be submitted to Congress for possible disapproval under \"fast track\" legislative provisions. The Congressional Budget Office's cost estimate on H.R. 4537 as reported from committee found that,", "Any budgetary effects of enacting H.R. 4537 would depend, in part, on how often the United States negotiates international insurance agreements and how frequently the negotiators must consult and coordinate with state insurance commissioners. CBO has no basis for predicting that frequency but expects that the cost of such consultations would be less than $500,000 per year.", "International Insurance Capital Standards Accountability Act of 2017 ( S. 1360 )", "S. 1360 was introduced by Senator Dean Heller with cosponsor Senator Jon Tester on June 14, 2017, and referred to the Senate Committee on Banking, Housing, and Urban Affairs. Similar language to S. 1360 was added to P.L. 115-174 / S. 2155 as discussed above.", "S. 1360 would have created an \"Insurance Policy Advisory Committee on International Capital Standards and Other Insurance Issues\" at the Federal Reserve made up of 11 members with expertise on various aspects of insurance. It would have required both an annual report and testimony from the Federal Reserve and the Department of the Treasury on the ongoing discussions at the IAIS through 2020. The Federal Reserve and FIO would have been required to complete a study and report, along with the opportunity for public comment and review by GAO, on the impact of international capital standards or other proposals prior to agreeing to such standards. Any final text of an international capital standard would have been required to be published in the Federal Register for comment and could not have been inconsistent with either state or Federal Reserve capital standards for insurers.", "International Insurance Standards Act of 2017 ( H.R. 3762 )", "H.R. 3762 was introduced by Representative Sean Duffy with cosponsor Representative Denny Heck on September 13, 2017. It was addressed in an October 24, 2017, hearing by the House Financial Services' Subcommittee on Housing and Insurance, but it was not the subject of further committee action. The sponsor introduced an identically titled and substantially similar bill, H.R. 4537 , which was ordered reported by the House Committee on Financial Services on December 13, 2017. See the above section on H.R. 4537 for more information on the bill.", "Federal Insurance Office Reform Act of 2017 ( H.R. 3861 )", "H.R. 3861 was introduced by Representative Sean Duffy with cosponsor Representative Denny Heck on September 28, 2017. It was addressed in an October 24, 2017, hearing by the House Financial Services' Subcommittee on Housing and Insurance, but it was not the subject of further action.", "H.R. 3861 would have amended the Dodd-Frank Act provisions creating the Federal Insurance Office, generally limiting the focus and size of FIO. It would have placed FIO specifically within the Office of International Affairs and narrowed its function in international issues to representing the Treasury rather than all of the United States. It also would have required FIO to reach a consensus with the states on international matters. The bill would have removed FIO's authority to collect and analyze information from insurers, including its subpoena power, and to issue reports with this information. Under the bill, the authority to preempt state laws pursuant to covered agreements would have rested with the Secretary of the Treasury, and FIO would have been limited to five employees."], "subsections": []}]}]}}
{"id": "RS22937", "title": "Nuclear Cooperation with Other Countries: A Primer", "released_date": "2019-04-15T00:00:00", "summary": ["In order for the United States to engage in significant civilian nuclear cooperation with other states, it must conclude a framework agreement that meets specific requirements under Section 123 of the Atomic Energy Act (AEA). Significant nuclear cooperation includes the export of reactors, critical parts of reactors, and reactor fuel. The AEA also provides for export control licensing procedures and criteria for terminating cooperation. Congressional review is required for Section 123 agreements; the AEA establishes special parliamentary procedures by which Congress may act on a proposed agreement."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "What Is a \"Section 123\" Agreement?", "paragraphs": ["Under existing law (Atomic Energy Act [AEA] of 1954, as amended [P.L. 83-703; 42 U.S.C. \u00a72153 et seq.]), all significant U.S. nuclear cooperation with other countries requires a peaceful nuclear cooperation agreement. Significant nuclear cooperation includes the transfer of U.S.-origin special nuclear material subject to licensing for commercial, medical, and industrial purposes, and the export of reactors and critical parts of reactors. Section 123 agreements are required for the export of commodities under NRC export licensing authority (10 C.F.R. 110).", "Such agreements, which are \"congressional-executive agreements\" requiring congressional approval, do not guarantee that cooperation will take place or that nuclear material will be transferred, but rather set the terms of reference and authorize cooperation. The AEA includes requirements for an agreement's content, conditions for the President to exempt an agreement from those requirements, presidential determinations and other supporting information to be submitted to Congress, conditions affecting the implementation of an agreement once it takes effect, and procedures for Congress to consider and approve the agreement.", "Section 123 of the AEA requires that any agreement for nuclear cooperation meet nine nonproliferation criteria and that the President submit any such agreement to the House Committee on Foreign Affairs and the Senate Committee on Foreign Relations. The Department of State is required to provide the President with an unclassified Nuclear Proliferation Assessment Statement (NPAS), which the President is to submit, along with the agreement, to those two committees. The State Department is also required to provide a classified annex to the NPAS, prepared in consultation with the Director of National Intelligence. The NPAS is meant to explain how the agreement meets the AEA nonproliferation requirements. The President must also make a written determination \"that the performance of the proposed agreement will promote and will not constitute an unreasonable risk to, the common defense and security.\""], "subsections": [{"section_title": "Requirements Under the Atomic Energy Act", "paragraphs": ["Section 123 of the AEA specifies the necessary steps for engaging in nuclear cooperation with another country.", "Section 123a. states that the proposed agreement is to include the terms, conditions, duration, nature, and scope of cooperation and lists nine criteria that the agreement must meet. It also contains provisions for the President to exempt an agreement from any of several criteria described in that section and includes details on the kinds of information the executive branch must provide to Congress. Section 123b. specifies the process for submitting the text of the agreement to Congress. Section 123c. specifies the procedure for congressional approval of cooperation agreements that are limited in scope (e.g., do not transfer nuclear material or cover reactors larger than 5 megawatts electric [MWe]). This report does not discuss such agreements. Section 123d. specifies the procedure for congressional approval of agreements that do cover significant nuclear cooperation (transfer of nuclear material or reactors larger than 5 MWe), including exempted agreements.", "Section 123a., paragraphs (1) through (9), lists nine criteria that an agreement with a nonnuclear weapon state must meet unless the President determines an exemption is necessary. These include guarantees that", "safeguards on transferred nuclear material and equipment continue in perpetuity; International Atomic Energy Agency (IAEA) comprehensive safeguards are applied in nonnuclear weapon states; nothing transferred is used for any nuclear explosive device or for any other military purpose; the United States has the right to demand the return of transferred nuclear materials and equipment, as well as any special nuclear material produced through their use, if the cooperating state detonates a nuclear explosive device or terminates or abrogates an IAEA safeguards agreement; there is no retransfer of material or classified data without U.S. consent; physical security on nuclear material is maintained; there is no enrichment or reprocessing by the recipient state of transferred nuclear material or nuclear material produced with materials or facilities transferred pursuant to the agreement without prior approval; storage for transferred plutonium and highly enriched uranium is approved in advance by the United States; and any material or facility produced or constructed through use of special nuclear technology transferred under the cooperation agreement is subject to all of the above requirements.", "Although some experts have advocated requiring governments to forgo enrichment and reprocessing (a nonproliferation commitment sometimes referred to as the \"Gold Standard\") as a condition for concluding a nuclear cooperation agreement, the Atomic Energy Act does not include such a requirement (see Appendix B ). "], "subsections": []}, {"section_title": "Exempted vs. Nonexempted Agreements", "paragraphs": ["The President may exempt an agreement for cooperation from any of the requirements in Section 123a. if he determines that the requirement would be \"seriously prejudicial to the achievement of U.S. nonproliferation objectives or otherwise jeopardize the common defense and security.\" The AEA provides different requirements, conditions, and procedures for exempt and nonexempt agreements. To date, all of the Section 123 agreements in force are nonexempt agreements. Prior to the adoption of P.L. 109-401 , the Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006, the President would have needed to exempt the nuclear cooperation agreement with India from some requirements of Section 123a. However, P.L. 109-401 exempted nuclear cooperation with India from some of the AEA's requirements. "], "subsections": []}]}, {"section_title": "Congressional Review", "paragraphs": ["Under the AEA, Congress has the opportunity to review a nuclear cooperation agreement for two time periods totaling 90 days of continuous session. The President must submit the text of the proposed agreement, along with required supporting documents (including the unclassified NPAS) to the House Foreign Affairs Committee and the Senate Foreign Relations Committee. The President is to consult with the committees \"for a period of not less than 30 days of continuous session.\" After this period of consultation, the President is to submit the agreement to Congress, along with the classified annex to the NPAS and a statement of his approval of the agreement and determination that it will not damage U.S. national security interests. This action begins the second period, which consists of 60 days of continuous session. In practice, the President has sent the agreement to Congress at the beginning of the full 90-day period, which begins on the date of transmittal. Typically, the 60-day period has immediately followed the expiration of the 30-day period. The President transmits the text of the proposed agreement along with a letter of support with a national security determination, the unclassified NPAS, its classified annex, and letters of support for the agreement from the Secretary of State and the Nuclear Regulatory Commission.", "If the President has not exempted the agreement from any requirements of Section 123a., it may enter into force after the end of the 60-day period unless, during that time, Congress adopts a joint resolution disapproving the agreement and the resolution becomes law. If the agreement is an exempted agreement, Congress must adopt a joint resolution of approval and it must become law by the end of the 60-day period or the agreement may not enter into force. At the beginning of this 60-day period, joint resolutions of approval or disapproval, as appropriate, are to be automatically introduced in each house. During this period, the committees are to hold hearings on the proposed agreement and \"submit a report to their respective bodies recommending whether it should be approved or disapproved.\" If either committee has not reported the requisite joint resolution of approval or disapproval by the end of 45 days, it is automatically discharged from further consideration of the measure. After the joint resolution is reported or discharged, Congress is to consider it under expedited procedures, as established by Section 130.i. of the AEA. Congress has used procedures outside the above-described process to adopt legislation approving some nuclear cooperation agreements (see Appendix C ). ", "Section 202 of P.L. 110-369 , the United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act, which President Bush signed into law October 8, 2008, amended Section 123 of the AEA to require the President to keep the Senate Foreign Relations Committee and the House Foreign Affairs Committee \"fully and currently informed of any initiative or negotiations relating to a new or amended agreement for peaceful nuclear cooperation.\""], "subsections": []}, {"section_title": "Export Licensing", "paragraphs": ["The AEA sets out procedures for licensing exports to states with which the United States has nuclear cooperation agreements. (Sections 126, 127, and 128 codified as amended at 42 U.S.C. 2155, 2156, 2157.) Each export of nuclear material, equipment, or technology requires a specific export license or other authorization. The Nuclear Regulatory Commission (NRC) is required to meet criteria in Sections 127 and 128 in authorizing export licenses. These criteria are as follows:", "Application of IAEA safeguards to any material or facilities proposed to be exported, material or facilities previously exported, and to any special nuclear material used in or produced through the use thereof (these are not full-scope safeguards, but safeguards required under Article III.2 of the nuclear Nonproliferation Treaty [NPT]). Nothing exported can be used for any nuclear explosive device or for research on or development of any nuclear explosive device. Recipient states must have adequate physical security on \"such material or facilities proposed to be exported and to any special nuclear material used in or produced through the use thereof.\" Recipient states are not to retransfer exported nuclear materials, facilities, sensitive nuclear technology, or \"special nuclear material produced through the use of such material\" without prior U.S. approval. Recipient states may not reprocess or alter in form or content exported nuclear material or special nuclear material produced though the use of exported nuclear material without prior U.S. approval. The foregoing conditions must be applied to any nuclear material or equipment that is produced or constructed under the jurisdiction of the recipient by or through the use of any exported sensitive nuclear technology. Section 128 requires that recipient nonnuclear weapon states must have full-scope IAEA safeguards.", "The President must judge that the proposed export or exemption will \"not be inimical to the common defense and security\" or that any export of that type \"would not be inimical to the common defense and security because it lacks significance for nuclear explosive purposes.\" The executive branch may also consider other factors, such as \"whether the license or exemption will materially advance the nonproliferation policy of the United States by encouraging the recipient nation to adhere\" to the NPT; whether \"failure to issue the license or grant the exemption would otherwise be seriously prejudicial\" to U.S. nonproliferation objectives; and whether the recipient nation has agreed to conditions identical to those laid out in Section 127.", "Section 126b.(2) contains a provision for the President to authorize an export in the event that the NRC deems that the export would not meet Section 127 and 128 criteria. The President must determine \"that failure to approve an export would be seriously prejudicial to the achievement of U.S. nonproliferation objectives or otherwise jeopardize the common defense and security.\" In that case, the President would submit his executive order, along with a detailed assessment and other documentation, to Congress for 60 days of continuous session. After 60 days of continuous session, the export would go through unless Congress were to adopt a concurrent resolution of disapproval.", "Section 128b.(2) contains a provision for the President to waive termination of exports by notifying Congress that the state has adopted full-scope safeguards or that the state has made significant progress toward adopting such safeguards, or that U.S. foreign policy interests dictate reconsideration. Such a determination would become effective unless Congress were to adopt a concurrent resolution of disapproval within 60 days of continuous session.", "Additionally, Section 129b.(1) forbids the export of \"nuclear materials and equipment or sensitive nuclear technology\" to any country designated as a state sponsor of terrorism. Section 129b.(3) allows the President to waive this provision."], "subsections": [{"section_title": "Iran-Related Restrictions", "paragraphs": ["The Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) of 2010 ( P.L. 111-195 ), which became law July 1, 2010, contains additional restrictions on licensing nuclear exports to countries with entities that have been sanctioned for conducting certain types of nuclear weapons-related transactions with Iran. Section 102a.(2)(A) of the law states that \"no license may be issued for the export, and no approval may be given for the transfer or retransfer\" of \"any nuclear material, facilities, components, or other goods, services, or technology that are or would be subject to an agreement for cooperation between the United States\" and such countries. Section 102 a.(2)(B), however, allows the President to waive these restrictions. Section 102a.(2)(C) allows the President to authorize licenses for nuclear exports \"on a case-by-case basis\" to entities (which have not been sanctioned) in countries subject to the restrictions described above."], "subsections": []}]}, {"section_title": "Subsequent Arrangements", "paragraphs": ["Section 131 of the AEA details procedures for subsequent arrangements to nuclear cooperation agreements concluded pursuant to Section 123. Such arrangements are required for forms of nuclear cooperation requiring additional congressional approval, such as transfers of nuclear material or technology and recipient states' enrichment or reprocessing of nuclear materials transferred pursuant to the agreement. Subsequent arrangements may also include arrangements for physical security, storage, or disposition of spent nuclear fuel; the application of safeguards on nuclear materials or equipment; or \"any other arrangement which the President finds to be important from the standpoint of preventing proliferation.\"", "Before entering into a subsequent arrangement, the Secretary of Energy must publish in the Federal Register a determination that the arrangement \"will not be inimical to the common defense and security.\" A proposed subsequent arrangement shall not take effect before 15 days after publication of both this determination and notice of the proposed arrangement. The Secretary of State is required to prepare an unclassified Nuclear Proliferation Assessment Statement (NPAS) if, \"in the view of\" the Secretary of State, Secretary of Energy, Secretary of Defense, or the Nuclear Regulatory Commission, a proposed subsequent arrangement \"might significantly contribute to proliferation.\" The Secretary of State is to submit the NPAS to the Secretary of Energy within 60 days of receiving a copy of the proposed subsequent arrangement. The President may waive the 60-day requirement if the Secretary of State so requests, but must notify both the House Foreign Affairs Committee and Senate Foreign Relations Committee of any such waiver and the justification for it. The Secretary of Energy may not enter into the subsequent arrangement before receiving the NPAS. ", "Section 131 specifies requirements for certain types of subsequent arrangements. Section 131b. describes procedures for the executive branch to follow before entering into a subsequent arrangement involving the reprocessing of U.S.-origin nuclear material or nuclear material produced with U.S.-supplied nuclear technology. These procedures also cover subsequent arrangements allowing the retransfer of such material to a \"third country for reprocessing\" or \"the subsequent retransfer\" of more than 500 grams of any plutonium produced by reprocessing such material. The Secretary of Energy must provide both the House Foreign Affairs Committee and Senate Foreign Relations Committee with a report describing the reasons for entering into the arrangement. Additionally, 15 days of continuous session must elapse before the Secretary may enter into the arrangement, unless the President judges that \"an emergency exists due to unforeseen circumstances requiring immediate entry\" into the arrangement. In such a case, the waiting period would be 15 calendar days. ", "If a subsequent arrangement described in the above paragraph involves a facility that has not processed spent nuclear reactor fuel prior to March 10, 1978 (when the Nuclear Nonproliferation Act of 1978 was enacted), the Secretaries of State and Energy must judge that the arrangement \"will not result in a significant increase of the risk of proliferation.\" In making this judgment, the Secretaries are to give \"foremost consideration ... to whether or not the reprocessing or retransfer will take place under conditions that will ensure timely warning to the United States of any diversion well in advance of the time at which the non-nuclear weapon state could transform the diverted material into a nuclear explosive device.\" For a subsequent arrangement involving reprocessing in a facility that has processed spent nuclear reactor fuel prior to March 10, 1978, the Secretary of Energy will \"attempt to ensure\" that reprocessing \"shall take place under conditions\" that would satisfy the timely-warning conditions described above. Section 131f. specifies procedures for congressional approval of subsequent arrangements involving the storage or disposition of foreign spent nuclear fuel in the United States.", "Section 133 states that, before approving a subsequent arrangement involving certain transfers of special nuclear material, the Secretary of Energy must consult with the Secretary of Defense \"on whether the physical protection of that material during the export or transfer will be adequate to deter theft, sabotage, and other acts of international terrorism which would result in the diversion of that material.\" If the Secretary of Defense determines that \"the export or transfer might be subject to a genuine terrorist threat,\" that Secretary is required to provide a written risk assessment of the risk and a \"description of the actions\" that he or she \"considers necessary to upgrade physical protection measures.\""], "subsections": [{"section_title": "Examples of Subsequent Arrangements", "paragraphs": [], "subsections": [{"section_title": "U.S.-Japan Agreement", "paragraphs": ["The first test of the subsequent arrangement provisions came in August 1978, when the Department of Energy informed the House and Senate foreign relations committees of a Japanese request for approval of the transfer of spent fuel assemblies from Japan to the United Kingdom for reprocessing. This was the first \"subsequent arrangement\" approved. The United States and Japan entered into similar arrangements until 1988, when the two governments revised their nuclear cooperation agreement. That agreement included an \"implementing agreement,\" which provided 30-year advance consent for the transfer of spent fuel from Japan to Europe for reprocessing. While controversial, Congress did not block the nuclear cooperation agreement.", "A subsequent arrangement was also necessary for the sea transport from Europe to Japan of plutonium that had been separated from the Japanese spent fuel. The Department of Energy approved a Japanese request for 30-year advance consent for the sea transport of plutonium. It was submitted to Congress as a subsequent arrangement, and took effect in October 1988."], "subsections": []}, {"section_title": "U.S.-India Agreement", "paragraphs": ["The U.S. nuclear cooperation agreement with India grants New Delhi consent to reprocess nuclear material transferred pursuant to the agreement, as well as \"nuclear material and by-product material used in or produced through the use of nuclear material, non-nuclear material, or equipment so transferred.\" However, the agreement also includes a requirement that India first build a new national reprocessing facility to be operated under IAEA safeguards. The two countries signed a subsequent arrangement July 30, 2010, which governs the procedures for operating two new reprocessing facilities in India. The agreement also describes procedures for U.S. officials to inspect and receive information about physical protection measures at the new facilities. The arrangement would not have taken effect if Congress had adopted a joint resolution of disapproval within 30 days of continuous session; Congress did not adopt such a resolution. If India were to construct any additional facilities to reprocess fuel from U.S.-supplied reactors, a new subsequent arrangement would need to be submitted to Congress. "], "subsections": []}]}]}, {"section_title": "Termination of Cooperation", "paragraphs": ["Section 129a. of the AEA requires that the United States end exports of nuclear materials and equipment or sensitive nuclear technology to any nonnuclear weapon state that, after March 10, 1978, the President determines to have detonated a nuclear explosive device; terminated or abrogated IAEA safeguards; materially violated an IAEA safeguards agreement; or engaged in activities involving source or special nuclear material and having \"direct significance\" for the manufacture or acquisition of nuclear explosive devices, and \"has failed to take steps which, in the President's judgment, represent sufficient progress toward terminating such activities.\"", "Section 129a. also requires that the United States halt exports to any nation the President determines to have materially violated the terms of an agreement for cooperation with the United States; assisted, encouraged, or induced any nonnuclear weapon state to obtain nuclear explosives or the materials and technologies needed to manufacture them; or retransferred or entered into an agreement for exporting reprocessing equipment, materials, or technology to a nonnuclear weapon state, unless in connection with an international agreement to which the United States subscribes.", "The President can waive termination of exports if he determines that \"cessation of such exports would be seriously prejudicial to the achievement of United States nonproliferation objectives or otherwise jeopardize the common defense and security.\" The President must submit his determination to Congress, which is then referred to the House Committee on Foreign Affairs and the Senate Foreign Relations Committee for 60 days of continuous session. The determination becomes effective unless Congress adopts a joint resolution opposing the determination. "], "subsections": []}, {"section_title": "Part 810 Agreements", "paragraphs": ["Section 57.b. (2) of the Atomic Energy Act allows for limited forms of nuclear cooperation related to the \"development or production of any special nuclear material outside of the United States\" if that activity has been authorized by the Secretary of Energy following a determination that it \"will not be inimical to the interest of the United States.\" The Secretary may only make such a finding with \"the concurrence of the Department of State, and after consultation with the Nuclear Regulatory Commission [NRC], the Department of Commerce, and the Department of Defense.\" Authorizations of such activities are also known as \"Part 810 authorizations,\" after 10 Code of Federal Regulations (C.F.R.) Part 810. Part 810 regulations describe activities that are \"generally authorized\" by the Secretary of Energy and activities that require \"specific authorization\" by the Secretary. Some \"generally authorized activities\" are limited to a list of \"generally authorized destinations.\" These regulations also detail \"reporting requirements for authorized activities.\"", "Part 810 authorizations mostly involve unclassified nuclear technology transfer and services, such as nuclear reactor designs, nuclear facility operational information and training, and nuclear fuel fabrication. Such an authorization is not required for exports of components and materials licensed by NRC governed by 10 C.F.R. Part 110. Civilian nuclear cooperation agreements under Section 123 of the Atomic Energy Act of 1954, as amended (hereinafter Atomic Energy Act or AEA), are not required for an 810 authorization or for transmission of nuclear-related information, except for restricted data. Such agreements are, however, required for such forms of nuclear cooperation as the transfer of U.S.-origin special nuclear material subject to licensing for commercial, medical, and industrial purposes; the export of reactors and critical parts of reactors; and other commodities under NRC export licensing authority (10 C.F.R. 110). The NRC may also authorize activities governed by Part 810 authorizations under a 123 agreement or under a subsequent arrangement to such an agreement. ", "It is worth noting that Part 810.9 includes \"[w]hether the United States has an agreement for cooperation in force covering exports to the country or entity involved\" as a factor for the Secretary of Energy to use in determining that an activity \"will not be inimical to the interest [sic] of the United States.\" Moreover, the list of \"generally authorized destinations\" is \"based principally on the United States agreements for civil nuclear cooperation,\" according to guidance from the National Nuclear Security Administration."], "subsections": []}, {"section_title": "Recent Legislative Activity", "paragraphs": [], "subsections": [{"section_title": "S. 3785/H.R. 7350", "paragraphs": ["On December 19, 2018, Senators Markey and Rubio introduced S. 3785 , the No Nuclear Weapons for Saudi Arabia Act of 2018, and Representatives Sherman and Messer introduced the companion bill, H.R. 7350 . The bills would require a joint resolution of approval for a 123 agreement with Saudi Arabia. In addition, the bills' text includes the sense of Congress that no 123 agreement should be approved until Saudi Arabia has \"been truthful and transparent with regard to the death of Jamal Khashoggi\" and prosecuted those responsible, \"renounced uranium enrichment and reprocessing on its territory,\" concluded an IAEA Additional Protocol, and made \"substantial progress on the protection of human rights, including the release of political prisoners.\" The bills require the President to submit a report assessing progress on the above actions along with a proposed agreement. The text also includes a statement of policy that the United States should oppose sales of nuclear technology to Saudi Arabia through the Nuclear Suppliers Group (NSG) until Saudi Arabia has renounced enrichment and reprocessing. "], "subsections": []}, {"section_title": "H.R. 7351", "paragraphs": ["On December 19, 2018, Representative Brad Sherman introduced H.R. 7351 , the Nuclear Cooperation Agreements Reform Act of 2018, which would amend the Atomic Energy Act to require nonexempt nuclear cooperation agreements to include several additional provisions. These provisions include a legally binding \"commitment\" from the cooperating government stipulating that \"no enrichment or reprocessing activities, or acquisition or construction of such facilities, [would] occur within the territory over which the cooperating party exercises sovereignty\"; \"a guaranty by the cooperating party that no nationals of a third country\" would be \"permitted access to any reactor, related equipment, or sensitive materials transferred under\" the agreement without prior U.S. consent; a \"commitment to maintain\" or enact \"a legal regime providing for adequate protection from civil liability that will allow for the participation of United States suppliers in any effort by the country to develop civilian nuclear power\"; and a stipulation that the United States can demand the return of transferred items if the cooperating government \"violates or abrogates any provision\" of its IAEA safeguards agreement. ", "H.R. 7351 would also require a cooperating party to sign, ratify, and implement an Additional Protocol to its IAEA safeguards agreement; implement a number of export control-related measures; comply with \"all United Nations conventions to which the United States is a party and all [UN] Security Council resolutions regarding the prevention of the proliferation of weapons of mass destruction\"; and be party to, as well as fully implement, \"the provisions and guidelines\" of the Biological Weapons Convention and the Chemical Weapons Convention, as well as \"all other international agreements to which the United States is a party regarding the export of nuclear, chemical, biological, and advanced conventional weapons, including missiles and other delivery systems.\" In addition, the bill would prohibit nuclear cooperation agreements with a country designated as a Destination of Diversion Concern pursuant to the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 ( P.L. 111-195 ). The bill would also prohibit such agreements with a country that is not \"closely cooperating with the United States to prevent state sponsors of terrorism\" from \"acquiring or developing\" nuclear, chemical, or biological (NBC) weapons \"or related technologies\" or \"destabilizing numbers and types of advanced conventional weapons.\" ", "H.R. 7351 would also limit the duration of a nuclear cooperation agreement to 15 years, as well as prohibit nuclear-related exports to a country identified in the most recent version of a report mandated by the National Defense Authorization Act for Fiscal Year 1998 ( P.L. 105-85 ) as possessing or seeking to \"acquire or develop\" NBC weapons, ballistic missiles, or cruise missiles. Moreover, the bill would amend the AEA's congressional notification provisions concerning ongoing nuclear cooperation agreement negotiations by requiring the President to \"consult\" with the Senate Foreign Relations Committee and the House Foreign Affairs Committee ", "concerning such initiative or negotiations beginning not later than 15 calendar days after the initiation of any such negotiations, or the receipt or transmission of a draft agreement, whichever occurs first, and monthly thereafter until such time as the negotiations are concluded.", "These consultations would include the provision of \"current working drafts and proposed text put forward for negotiation by the parties for inclusion in such agreement.\"", "The bill would also require the President to submit a report to the House Foreign Affairs and Senate Foreign Relations Committees \"on the extent to which each country that engages in civil nuclear exports ... requires nuclear nonproliferation requirements as conditions for export comparable to those\" in the AEA as amended by the bill, which would also stipulate that the report include \"the extent to which the exports of each such country incorporate United States-origin components, technology, or materials that require United States approval for re-export\"; \"the civil nuclear-related trade and investments in the United States by any entity from each such country\"; and a list of \"any United States grant, concessionary loan or loan guarantee, or any other incentive or inducement to any such country or entity related to nuclear exports or investments in the United States.\"", "H.R. 7351 contains provisions concerning U.S. foreign assistance. For example, the bill would prohibit \"assistance (other than humanitarian assistance) under any provision of law ... to a country that has withdrawn\" from the NPT. H.R. 7351 would also require the United States to \"seek the return of any material, equipment, or components transferred under\" a nuclear cooperation agreement with such a country, as well as the return of any \"special fissionable material produced through the use\" of such transferred items. In addition, the bill would prohibit any assistance", "under the Foreign Assistance Act of 1961 [FAA], the Arms Export Control Act [AECA], the Foreign Military Sales Act [FMSA], the Food for Peace Act, the Peace Corps Act, or the Export-Import Bank Act of 1945 to any country if the Secretary of State determines that the government of the country has repeatedly provided support for acts of proliferation of equipment, technology, or materials to support the design, acquisition, manufacture, or use of weapons of mass destruction or the acquisition or development of missiles to carry such weapons.", "This section of the bill includes a reporting requirement and a presidential waiver provision. H.R. 7351 would also require the U.S. government to \"take into consideration whether\" proposed recipients of assistance pursuant to the AECA, FAA, or FMSA, have Additional Protocols to their IAEA safeguards agreements. The bill would also permit joint resolutions approving nuclear cooperation agreements to \"include any other provisions to accompany such proposed agreement for cooperation.'' Lastly, H.R. 7351 would require Congress to enact a joint resolution of approval for subsequent arrangements to nuclear cooperation agreements.", "Appendix A. Key Dates for Bilateral Civilian Nuclear Cooperation (\"Section 123\") Agreements", "Appendix B. Enrichment and Reprocessing Restrictions", "Although some experts have advocated requiring governments to forgo enrichment and reprocessing (a nonproliferation commitment sometimes referred to as the \"Gold Standard\") as a condition for concluding a nuclear cooperation agreement, the Atomic Energy Act (AEA) does not include such a requirement. In recent years, the United States has attempted to persuade certain countries with which it is negotiating nuclear cooperation agreements to forgo enrichment and reprocessing and conclude Additional Protocols to their International Atomic Energy Agency (IAEA) safeguards agreements; past U.S. nuclear cooperation agreements have not included these additional components. The AEA does mandate that U.S. nuclear cooperation agreements require U.S. consent for any \"alteration in form or content\" (to include enrichment or reprocessing) of U.S.-origin material or any material processed in a plant containing transferred U.S. nuclear technology. Such agreements also require U.S. consent for any retransfer of material or technology.", "The United States has argued that its December 2009 nuclear cooperation agreement with the United Arab Emirates (UAE) could set a useful precedent for mitigating the dangers of nuclear proliferation. For example, President Barack Obama's May 21, 2009, letter transmitting the agreement to Congress argued that the agreement had \"the potential to serve as a model for other countries in the region that wish to pursue responsible nuclear energy development.\" Similarly, then-State Department spokesperson P.J. Crowley described the agreement as \"the gold standard\" during an August 5, 2010, press briefing, although the Obama Administration generally did not use this term when describing its nuclear cooperation policies.", "The U.S.-UAE agreement's status as a potential model is grounded in two nonproliferation provisions not found in other U.S. nuclear cooperation agreements. First, the agreement requires the country to bring into force the Additional Protocol to its safeguards agreement before the United States licenses \"exports of nuclear material, equipment, components, or technology\" pursuant to the agreement. Second, the agreement states that the UAE", "shall not possess sensitive nuclear facilities within its territory or otherwise engage in activities within its territory for, or relating to, the enrichment or reprocessing of material, or for the alteration in form or content (except by irradiation or further irradiation or, if agreed by the Parties, post-irradiation examination) of plutonium, uranium 233, high enriched uranium, or irradiated source or special fissionable material.", "The U.S.-UAE agreement also provides the United States with the right to terminate nuclear cooperation and to require the return of any nuclear \"material, equipment or components ... and any special fissionable material produced through their use\" if, after the agreement's entry into force, the UAE \"possesses sensitive nuclear facilities within its territory or otherwise engages in activities within its territory relating to enrichment of uranium or reprocessing of nuclear fuel.\"", "Notwithstanding its characterization of the U.S.-UAE agreement, the Obama Administration announced in December 2013 after an interagency review that renouncing domestic enrichment and reprocessing would not be a prerequisite to concluding a nuclear cooperation agreement for all countries, and each partner country would be considered individually. The U.S. nuclear cooperation agreement with Vietnam, which the two governments concluded in 2014, did not include a provision requiring the country to forgo enrichment and reprocessing, although the agreement's preamble includes a political commitment stating that Vietnam intends to rely on international markets for its nuclear fuel supply, rather than acquiring sensitive nuclear technologies.", "Appendix C. Nuclear Cooperation Agreements Approved Outside Atomic Energy Act Process", "Congress has used legislation to approve nuclear cooperation agreements that did not use the legislative process mandated by the Atomic Energy Act (AEA) of 1954, as amended. ", "Australia", "On May 5, 2010, President Barack Obama submitted a renewed U.S.-Australia nuclear cooperation agreement to Congress for approval. H.R. 6411 , which the House adopted on November 30, 2010, would have approved the agreement even if there had not been sufficient legislative days remaining in the 111 th Congress; the Senate did not adopt its version of the bill ( S. 3844 ). These bills were not needed because the 111 th Congress contained a sufficient number of days for the agreement to enter into force. ", "China", "In 1985, President Ronald Reagan submitted the first U.S.-China nuclear cooperation agreement to Congress, which adopted a joint resolution, P.L. 99-183 , requiring that the President make certain nonproliferation-related certifications in order for the agreement to be implemented. P.L. 99-183 required a presidential certification and a report followed by a period of 30 days of continuous session of Congress. P.L. 101-246 , the Foreign Relations Authorization Act for Fiscal Years 1990 and 1991, imposed sanctions on China, including suspending nuclear cooperation and requiring an additional presidential certification on Beijing's nuclear nonproliferation assurances. Before a summit with China, President William Clinton on January 12, 1998, signed the required certifications regarding China's nuclear nonproliferation policy and practices. Clinton also issued a certification and waived a sanction imposed under P.L. 101-246 . Congressional review ended on March 18, 1998, allowing the agreement to be implemented.", "India", "P.L. 109-401 , which became law on December 18, 2006, permitted the President to waive several provisions of the AEA with respect to a nuclear cooperation agreement with India. On September 10, 2008, President George W. Bush submitted to Congress a determination that P.L. 109-401 's requirements for such an agreement to proceed had been met. President Bush signed P.L. 110-369 , which approved the agreement, into law on October 8, 2008.", "Norway", "The President submitted an extension of the U.S.-Norway nuclear cooperation agreement to Congress on June 14, 2016. P.L. 114-320 , which became law on December 16, 2016, approved the agreement \"[n]otwithstanding the provisions for congressional consideration\" in the AEA, thereby addressing concerns that that there was an insufficient number of legislative days remaining in the 114 th Congress for congressional consideration. "], "subsections": []}]}]}}
{"id": "R41352", "title": "Small Business Management and Technical Assistance Training Programs", "released_date": "2019-04-04T00:00:00", "summary": ["The Small Business Administration (SBA) has provided technical and managerial assistance to small businesses since it began operations in 1953. Initially, the SBA provided its own small business management and technical assistance training programs. Over time, the SBA has relied increasingly on third parties to provide that training.", "Congressional interest in the SBA's management and technical assistance training programs ($226.7 million in FY2019) has increased in recent years, primarily because these programs are viewed as a means to assist small businesses create and retain jobs. These programs fund about \"14,000 resource partners,\" including 63 lead small business development centers (SBDCs) and nearly 900 SBDC local outreach locations, 128 women's business centers (WBCs), and 350 chapters of the mentoring program, SCORE. The SBA reports that more than 1.2 million aspiring entrepreneurs and small business owners receive training from an SBA-supported resource partner each year.", "The Department of Commerce also provides management and technical assistance training for small businesses. For example, its Minority Business Development Agency provides training to minority business owners to assist them in obtaining contracts and financial awards.", "Some have argued that the SBA could improve program efficiency by eliminating duplication of services across federal agencies and improving cooperation and coordination among the SBA's resource partners. Congress has also explored ways to improve the SBA's measurement of these programs' effectiveness.", "This report examines the historical development of federal small business management and technical assistance training programs; describes their current structures, operations, and budgets; and assesses their administration and oversight and the measures used to determine their effectiveness. It also discusses legislation to improve program performance, including", "P.L. 114-88, the Recovery Improvements for Small Entities After Disaster Act of 2015 (RISE After Disaster Act of 2015), which, among other things, authorizes the SBA to provide up to two years of additional funding to its resource partners to assist small businesses located in a presidentially declared major disaster area and authorizes SBDCs to provide assistance outside the SBDC's state, without regard to geographical proximity to the SBDC, if the small business is in a presidentially declared major disaster area. This assistance can be provided \"for a period of not more than two years after the date on which the President\" has declared the area a major disaster; and P.L. 115-141, the Consolidated Appropriations Act of 2018, among other provisions, relaxed requirements that Microloan intermediaries may spend no more than 25% of Microloan technical assistance grant funds on prospective borrowers and no more than 25% of those funds on contracts with third parties to provide that technical assistance by increasing those percentages to no more than 50%."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Federal Management and Technical Assistance Training Programs", "paragraphs": ["The Small Business Administration (SBA) administers several programs to support small businesses, including loan guaranty programs to enhance small business access to capital; programs to increase small business opportunities in federal contracting; direct loans for businesses, homeowners, and renters to assist their recovery from natural disasters; and access to entrepreneurial education to assist with business formation and expansion. The SBA has provided \"technical and managerial aides to small-business concerns, by advising and counseling on matters in connection with government procurement and on policies, principles and practices of good management\" since it began operations in 1953. ", "Initially, the SBA provided its own management and technical assistance training programs. Over time, the SBA has relied increasingly on third parties to provide that training. More than 1.2 million aspiring entrepreneurs and small business owners receive training from an SBA-supported resource partner each year.", "The SBA has argued that its support of management and technical assistance training for small businesses has contributed \"to the long-term success of these businesses and their ability to grow and create jobs.\" It currently provides financial support to about 14,000 resource partners, including 63 small business development centers (SBDCs) and nearly 900 SBDC local outreach locations, 128 women's business centers (WBCs), and 350 chapters of the mentoring program, SCORE (Service Corps of Retired Executives).", "The SBA receives an annual appropriation for entrepreneurial development/noncredit programs collectively (currently $247.7 million). The SBA uses these funds for its management and training programs ($226.7 million in FY2019), administration of the HUBZone program ($3.0 million), and the State Trade and Export Promotion program ($18.0 million). Congress specifies the appropriation amount for SBDCs (currently $131.0 million) and the Microloan Technical Assistance Program (currently $31.0 million) in its annual appropriation act and includes recommended appropriation amounts for the SBA's other management and training programs in either the explanatory statement or the committee report accompanying the appropriations act. The SBA is not legally required to adhere to the recommended amounts but has traditionally done so in the past.", " Table 1 shows the appropriation amounts Congress specified for SBDCs and the Microloan Technical Assistance Program and the appropriation amounts Congress recommended for the SBA's other management and training programs in FY2015 ($198.6 million), FY2016 ($210.1 million), FY2017 ($224.1 million), FY2018 ($226.1 million), and FY2019 ($226.7 million). ", "The Department of Commerce also provides management and technical assistance training for small businesses. For example, the Department of Commerce's Minority Business Development Agency (MBDA) provides training to minority business owners to assist them in obtaining contracts and financial awards. In addition, the Department of Commerce's Economic Development Administration's Local Technical Assistance Program promotes efforts to build and expand local organizational capacity in economically distressed areas. As part of that effort, it funds projects that focus on technical or market feasibility studies of economic development projects or programs, which often include consultation with small businesses.", "For many years, a recurring theme at congressional hearings concerning the SBA's management and technical assistance training programs has been the perceived need to improve program efficiency by eliminating duplication of services and increasing cooperation and coordination both within and among its training resource partners. For example, the Obama Administration recommended in its FY2012-FY2017 budget recommendations that funding for the PRIME technical assistance program end. The Administration argued that PRIME overlaps and duplicates \"the technical assistance provided by SBA's microlending intermediaries.\" The Trump Administration has also requested the program's elimination.", "The House Committee on Small Business has argued that the SBA's various management and technical assistance training programs should be \"folded into the mission of the SBDC program or their responsibilities should be taken over by other agencies\" because they \"overlap each other and duplicate the educational services provided by other agencies.\" Congress has also explored ways to improve the SBA's measurement of these programs' effectiveness.", "This report examines the historical development of federal small business management and technical assistance training programs; describes their current structures, operations, and budgets; and assesses their administration and oversight, including measures used to determine their effectiveness.", "This report also examines legislation to improve SBA program performance and oversight, including", "P.L. 114-88 , the Recovery Improvements for Small Entities After Disaster Act of 2015 (RISE After Disaster Act of 2015), which, among other things, authorizes the SBA to provide up to two years of additional financial assistance, on a competitive basis, to SBDCs, WBCs, SCORE, or any proposed consortium of such individuals or entities to assist small businesses located in a presidentially declared major disaster area and authorizes SBDCs to provide assistance to small businesses outside the SBDC's state, without regard to geographical proximity to the SBDC, if the small business is in a presidentially declared major disaster area. This assistance can be provided \"for a period of not more than two years after the date on which the President\" has declared the area a major disaster; and P.L. 115-141 , the Consolidated Appropriations Act of 2018, among other provisions, relaxed requirements that Microloan intermediaries may spend no more than 25% of Microloan technical assistance grant funds on prospective borrowers and no more than 25% of those funds on contracts with third parties to provide that technical assistance by increasing those percentages to no more than 50% (originally in H.R. 2056 , the Microloan Modernization Act of 2017, and S. 526 , the Microloan Modernization Act of 2018).", "In addition, it discusses H.R. 1774 , the Developing the Next Generation of Small Businesses Act of 2017, which was introduced during the 115 th Congress. The bill would have required the SBA to only use authorized entrepreneurial development programs (SCORE, WBCs, SBDCs, etc.) to deliver specified entrepreneurial development services; added data collection and reporting requirements for SBDCs; authorized to be appropriated $21.75 million for WBCs for each of FY2018-FY2021 (WBCs were appropriated $18.0 million in FY2018); increased the WBC annual grant award from not more than $150,000 to not more than $185,000 (adjusted annually to reflect change in inflation); authorized the award of an additional $65,000 to WBCs under specified circumstances; authorized the SBA to waive, in whole or in part, the WBC nonfederal matching requirement for up to two consecutive fiscal years under specified circumstances; modified SCORE program requirements with respect to the role of participating volunteers, program plans and goals, and reporting; and added language concerning the provision and reporting of online counseling by SCORE."], "subsections": []}, {"section_title": "SBA Management and Technical Assistance Training Programs", "paragraphs": ["The SBA supports a number of management and technical assistance training programs, including the following:", "Small Business Development Center Grants Program, Microloan Technical Assistance Program, Women's Business Center Grants Program, Veterans Business Development Programs, SCORE (Service Corps of Retired Executives), PRIME Technical Assistance Program, 7(j) Technical Assistance Program, Native American Outreach Program, and Several initiatives, including the Entrepreneurial Development Initiative (Regional Innovation Clusters), Boots to Business, Entrepreneurial Education, and Growth Accelerators.", "The legislative history and current operating structures, functions, and budget for each of these programs is presented in this report. In addition, if the data are available, the program's performance based on outcome-based measures, such as their effect on small business formation, survivability, and expansion, and on job creation and retention, is also presented. Also, a brief description of each of these programs is provided in the Appendix ."], "subsections": [{"section_title": "Small Business Development Centers", "paragraphs": ["In 1976, the SBA created the University Business Development Center pilot program to establish small business centers within universities to provide counseling and training for small businesses. The first center was founded at California State Polytechnic University at Pomona in December 1976. Seven more centers were funded over the next six months at universities in seven different states. By 1979, 16 SBDCs received SBA funding and were providing management and technical training assistance to small businesses.", "The SBDC program was provided statutory authorization by P.L. 96-302 , the Small Business Development Center Act of 1980. SBDCs were to \"rely on the private sector primarily, and the university community, in partnership with the SBA and its other programs, to fill gaps in making quality management assistance available to the small business owner.\" Although most SBDCs continued to be affiliated with universities, the legislation authorized the SBA to provide funding ", "to any State government or any agency thereof, any regional entity, any State-chartered development, credit or finance corporation, any public or private institution of higher education, including but not limited to any land-grant college or university, any college or school of business, engineering, commerce, or agriculture, community college or junior college, or to any entity formed by two or more of the above entities.", "SBDC funding is allocated on a pro rata basis among the states (defined to include the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, and American Samoa) by a statutory formula \"based on the percentage of the population of each State, as compared to the population of the United States.\" If, as is currently the case, SBDC funding exceeds $90 million, the minimum funding level is \"the sum of $500,000, plus a percentage of $500,000 equal to the percentage amount by which the amount made available exceeds $90 million.\"", "In 1984, P.L. 98-395 , the Small Business Development Center Improvement Act of 1984, required SBDCs, as a condition of receiving SBA funding, to contribute a matching amount equal to the grant amount, and that the match must be provided by nonfederal sources and be comprised of not less than 50% cash and not more than 50% of indirect costs and in-kind contributions. It also required SBDCs to have an advisory board and a full-time director who has authority to make expenditures under the center's budget. It also required the SBA to implement a program of onsite evaluations for each SBDC and to make those evaluations at least once every two years.", "Today, the SBA provides grants to SBDCs that are \"hosted by leading universities, colleges, and state economic development agencies\" to deliver management and technical assistance training \"to small businesses and nascent entrepreneurs (pre-venture) in order to promote growth, expansion, innovation, increased productivity and management improvement.\" These services are delivered, in most instances, on a nonfee, one-on-one confidential counseling basis and are administered by 63 lead service centers, one located in each state (four in Texas and six in California), the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and American Samoa. These lead centers manage nearly 900 service centers located throughout the United States and the territories.", "As shown in Table 2 , SBDCs provided technical assistance training services to 443,376 clients in FY2018 (250,926 clients received training and 192,450 clients were advised), and assisted in forming 14,422 new businesses.", "SBDCs received an appropriation of $115.0 million in FY2015, $117.0 million in FY2016, $125.0 million in FY2017, $130.0 million in FY2018, and $131.0 million in FY2019 (see Table 1 ). The Trump Administration requested $110.0 million for the program in FY2018 and $110.0 million in FY2019. ", "In addition, as mentioned earlier, P.L. 114-88 expanded the role of SBDCs by, among other things", "authorizing the SBA to provide up to two years of additional financial assistance, on a competitive basis, to SBDCs, WBCs, SCORE, or any proposed consortium of such individuals or entities to assist small businesses located in a presidentially declared major disaster area; and authorizing SBDCs to provide assistance to small businesses outside the SBDC's state, without regard to geographical proximity to the SBDC, if the small business is located in a presidentially declared major disaster area. This assistance can be provided \"for a period of not more than two years after the date on which the President\" has declared the area a major disaster.", "As part of its legislative mandate to evaluate each SBDC, in 2003, the SBA's Office of Entrepreneurial Development designed \"a multi-year time series study to assess the impact of the programs it offers to small businesses.\" The survey has been administered annually in partnership with a private firm.", "The 2014 survey was sent to 70,262 SBDC clients who had received five or more hours of counseling assistance in calendar year 2012. The survey was administered in the spring and summer of 2013. A total of 10,407 surveys (14.8% return rate) were completed either by mail, email, or the internet.", "The 2014 survey indicated that, of the SBDC clients ", "90.7% reported that the services they received from SBDC counselors were beneficial; 87.8% reported that the knowledge and expertise of their SBDC counselor was excellent (66.0%) or above average (21.8%); 86.2% reported that their overall working relationship with their SBDC counselor was excellent (68.9%) or above average (17.3%); and 94.4% reported that they would recommend that other businesspersons contact the SBDC."], "subsections": [{"section_title": "Legislation", "paragraphs": ["As mentioned previously, P.L. 114-88 , among other things, authorizes the SBA to provide up to two years of additional funding to its management and training resource partners to assist small businesses located in a presidentially declared major disaster area and authorizes SBDCs to provide assistance outside the SBDC's state, without regard to geographical proximity to the SBDC, if the small business is in a presidentially declared major disaster area. This assistance can be provided \"for a period of not more than two years after the date on which the President\" has declared the area a major disaster.", "Also, H.R. 1774 , the Developing the Next Generation of Small Businesses Act of 2017, introduced during the 115 th Congress, among other provisions, would have required the SBA to only use authorized entrepreneurial development programs (SCORE, WBCs, SBDCs, etc.) \"to deliver entrepreneurial development services, entrepreneurial education, support for the development and maintenance of clusters, or business training\" and would have added SBDC data collection and reporting requirements. Similar legislation was introduced during the 114 th Congress ( H.R. 207 and S. 999 ). "], "subsections": []}]}, {"section_title": "Microloan Technical Assistance Program", "paragraphs": ["Congress authorized the SBA's Microloan lending program in 1991 ( P.L. 102-140 , the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1992) to address the perceived disadvantages faced by women, low-income, veteran, and minority entrepreneurs and business owners gaining access to capital for starting or expanding their business. The program became operational in 1992. Its stated purpose is", "to assist women, low-income, veteran ... and minority entrepreneurs and business owners and other individuals possessing the capability to operate successful business concerns; to assist small business concerns in those areas suffering from a lack of credit due to economic downturns; ... to make loans to eligible intermediaries to enable such intermediaries to provide small-scale loans, particularly loans in amounts averaging not more than $10,000, to start-up, newly established, or growing small business concerns for working capital or the acquisition of materials, supplies, or equipment; [and] to make grants to eligible intermediaries that, together with non-Federal matching funds, will enable such intermediaries to provide intensive marketing, management, and technical assistance to microloan borrowers.", "Initially, the SBA's Microloan program was authorized as a five-year demonstration project. It was made permanent, subject to reauthorization, by P.L. 105-135 , the Small Business Reauthorization Act of 1997.", "The SBA's Microloan Technical Assistance Program, which is affiliated with the SBA's Microloan lending program but receives a separate appropriation, provides grants to Microloan intermediaries to provide management and technical training assistance to Microloan program borrowers and prospective borrowers. There are currently 147 active Microloan intermediaries serving 49 states, the District of Columbia, and Puerto Rico.", "Intermediaries are eligible to receive a Microloan technical assistance grant \"of not more than 25% of the total outstanding balance of loans made to it\" under the Microloan program. Grant funds may be used only to provide marketing, management, and technical assistance to Microloan borrowers, except that no more than 50% of the funds may be used to provide such assistance to prospective Microloan borrowers and no more than 50% of the funds may be awarded to third parties to provide that technical assistance. Grant funds also may be used to attend required training.", "In most instances, intermediaries must contribute, solely from nonfederal sources, an amount equal to 25% of the grant amount. In addition to cash or other direct funding, the contribution may include indirect costs or in-kind contributions paid for under nonfederal programs. ", "The SBA does not require Microloan borrowers to participate in the Microloan Technical Assistance Program. However, intermediaries typically require Microloan borrowers to participate in the training program as a condition of the receipt of a microloan. Combining loan and intensive management and technical assistance training is one of the Microloan program's distinguishing features.", "As shown in Table 3 , the Microloan Technical Assistance Program provided counseling services to 21,800 small businesses in FY2018 and there were 147 grant eligible microloan intermediaries. ", "The program was appropriated $22.3 million in FY2015, $25.0 million in FY2016, and $31.0 million in FY2017, FY2018, and FY2019 (see Table 1 ). The Trump Administration requested $25.0 million for the program in FY2018 and $25.0 million in FY2019. "], "subsections": [{"section_title": "Legislation", "paragraphs": ["As mentioned previously, P.L. 115-141 , among other provisions, relaxed requirements that Microloan intermediaries may spend no more than 25% of Microloan technical assistance grant funds on prospective borrowers and no more than 25% of those funds on contracts with third parties to provide that technical assistance by increasing those percentages to no more than 50%. These provisions were originally in H.R. 2056 and S. 526 .", "During the 114 th Congress, H.R. 2670 and S. 1857 (its Senate companion bill) would have required the SBA administrator to establish a rule enabling intermediaries to apply for a waiver to the requirement that no more than 25% of Microloan technical assistance grant funds may be used to provide technical assistance to prospective borrowers."], "subsections": []}]}, {"section_title": "Women's Business Centers", "paragraphs": ["The Women's Business Center (WBC) Renewable Grant Program was initially established by P.L. 100-533 , the Women's Business Ownership Act of 1988, as the Women's Business Demonstration Pilot Program. The act directed the SBA to provide financial assistance to private, nonprofit organizations to conduct demonstration projects giving financial, management, and marketing assistance to small businesses, including start-up businesses, owned and controlled by women. Since its inception, the program has targeted the needs of socially and economically disadvantaged women. The WBC program was expanded and provided permanent legislative status by P.L. 109-108 , the Science, State, Justice, Commerce, and Related Agencies Appropriations Act, 2006.", "Since the program's inception, the SBA has awarded WBCs a grant of up to $150,000 per year. Initially, the grant was awarded for one year, with the possibility of being renewed twice, for a total of up to three years. As a condition of the receipt of funds, the WBC was required to raise at least one nonfederal dollar for each two federal dollars during the grant's first year (1:2), one nonfederal dollar for each federal dollar during year two (1:1), and two nonfederal dollars for each federal dollar during year three (2:1). Over the years, Congress has extended the length of the WBC program's grant award and reduced the program's matching requirement.", "Today, WBC initial grants are awarded for up to five years, consisting of a base period of 12 months from the date of the award and four 12-month option periods. The SBA determines if the option periods are exercised and makes that determination subject to the continuation of program authority, the availability of funds, and the recipient organization's compliance with federal law, SBA regulations, and the terms and conditions specified in a cooperative agreement. WBCs that successfully complete the initial five-year grant period may apply for an unlimited number of three-year funding intervals.", "During their initial five-year grant period, WBCs are now required to provide a nonfederal match of one nonfederal dollar for each two federal dollars in years one and two (1:2), and one nonfederal dollar for each federal dollar in years three, four and five (1:1). After the initial five-year grant period, the matching requirement in subsequent three-year funding intervals is not more than 50% of federal funding (1:1). The nonfederal match may consist of cash, in-kind, and program income.", "Today, there are 128 WBCs located throughout most of the United States and the territories. As shown in Table 4 , WBCs provided assistance to 151,861 clients in FY2018 (123,680 clients received technical assistance training services and 28,181 clients were advised), and assisted in the formation of 11,687 new businesses. ", "Congress recommended that the WBC program receive $15.0 million in FY2015, $17.0 million in FY2016, $18.0 million in FY2017, $18.0 million in FY2018, and $18.5 million in FY2019 (see Table 1 ). The Trump Administration requested $16.0 million for the program for FY2018 and $16.0 million for FY2019. ", "P.L. 105-135 required the SBA to \"develop and implement an annual programmatic and financial examination of each\" WBC. As part of its legislative mandate to implement an annual programmatic and financial examination of each WBC, the SBA's Office of Entrepreneurial Development includes WBCs in its previously mentioned multiyear time series study of its programs.", "Data from the SBA's 2014 client survey concerning WBCs are not yet available. The firm administering the 2013 survey of SBA management and training clients contacted 2,997 WBC clients and received 529 completed surveys (17.7% return rate). The survey indicated that ", "80% of WBC clients reported that the services they received from counselors were useful or very useful, 2% had no opinion, and 18% reported that the services they received from counselors were somewhat useful or not useful; 61% of WBC clients reported that they changed their management practices/strategies as a result of the assistance they received; and the top five changes to management practices involved their business plan (56%), marketing plan (46%), general management (36%), cash flow analysis (31%), and financial strategy (30%). "], "subsections": [{"section_title": "Legislation", "paragraphs": ["As mentioned earlier, P.L. 114-88 expanded the role of WBCs by authorizing the SBA to provide up to two years of additional financial assistance, on a competitive basis, to SBDCs, WBCs, SCORE, or any proposed consortium of such individuals or entities to assist small businesses located in a presidentially declared major disaster area.", "In addition, H.R. 1774 , introduced during the 115 th Congress, would have required the SBA to use only authorized entrepreneurial development programs (SCORE, WBCs, SBDCs, etc.) to deliver specified entrepreneurial development services; authorized to be appropriated $21.75 million for WBCs for each of FY2018-FY2021 (WBCs received $18.0 million in FY2018); increased the WBC annual grant award from not more than $150,000 to not more than $185,000 (adjusted annually to reflect change in inflation); authorized the award of an additional $65,000 to WBCs under specified circumstances; and authorized the SBA to waive, in whole or in part, the WBC nonfederal matching requirement for up to two consecutive fiscal years under specified circumstances. Similar legislation was introduced during the 114 th Congress ( H.R. 207 and S. 2126 )."], "subsections": []}]}, {"section_title": "Veterans Business Development Programs", "paragraphs": ["The SBA has supported management and technical assistance training for veteran-owned small businesses since its formation as an agency. However, during the 1990s, some in Congress noted that a direct loan program for veterans was eliminated by the SBA in 1995 and that the \"training and counseling for veterans dropped from 38,775 total counseling sessions for veterans in 1993 to 29,821 sessions in 1998.\" Concerned that \"the needs of veterans have been diminished systematically at the SBA,\" Congress adopted P.L. 106-50 , the Veterans Entrepreneurship and Small Business Development Act of 1999. ", "The act reemphasized the SBA's responsibility \"to reach out to and include veterans in its programs providing financial and technical assistance.\" It also included veterans as a target group for the SBA's 7(a), 504/CDC, and Microloan programs. In addition, it required the SBA to enter into a memorandum of understanding with SCORE to, among other things, establish \"a program to coordinate counseling and training regarding entrepreneurship to veterans through the chapters of SCORE throughout the United States.\" The act also directed the SBA to enter into a memorandum of understanding with SBDCs, the Department of Veteran Affairs, and the National Veterans Business Development Corporation \"with respect to entrepreneurial assistance to veterans, including service-disabled veterans.\" It specified, among other things, that the SBA conduct and distribute studies on the formation, management, financing, marketing, and operation of small business concerns by veterans; provide training and counseling on these topics to veterans; assist veterans regarding procurement opportunities with federal, state, and local agencies, especially agencies funded in whole or in part with federal funds; and provide internet or other distance-learning academic instruction for veterans in business subjects, including accounting, marketing, and business fundamentals.", "The SBA's Office of Veterans Business Development (OVBD) was established to address these statutory requirements. The OVBD currently administers several management and training programs to assist veteran-owned businesses, including the following:", "The Entrepreneurship Bootcamp for Veterans with Disabilities Consortium of Universities provides \"experiential training in entrepreneurship and small business management to post-9/11 veterans with disabilities\" at eight universities. The Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE) program, administered through a cooperative agreement with Syracuse University, offers women veterans a 15-day, online course on entrepreneurship skills and the \"language of business,\" followed by a 3-day conference (offered twice a year at varying locations) in which participants \"are exposed to successful entrepreneurs and CEOs of Fortune 500 companies and leaders in government\" and participate in courses on business planning, marketing, accounting and finance, operations and production, human resources, and work-life balance. The Operation Endure and Grow Program, administered through a cooperative agreement with Syracuse University, offers an eight-week online training program on \"the fundamentals of launching and/or growing a small business\" and is available to National Guard and reservists and their family members. The Boots to Business program (started in 2012), which is \"an elective track within the Department of Defense's revised Training Assistance Program called Transition Goals, Plans, Success (Transition GPS) and has three parts: the Entrepreneurship Track Overview\u2014a 10-minute introductory video shown during the mandatory five-day Transition GPS course which introduces entrepreneurship as a post-service career option; Introduction to Entrepreneurship\u2014a two-day classroom course on entrepreneurship and business fundamentals offered as one of the three Transition GPS elective tracks; and Foundations of Entrepreneurship\u2014an eight-week, instructor-led online course that offers in-depth instruction on the elements of a business plan and tips and techniques for starting a business.\" The Boots to Business Reboot program (started in 2014) assists veterans who have already transitioned to civilian life. The Veterans Business Outreach Centers (VBOC) program provides veterans and their spouses management and technical assistance training at 22 locations, including assistance with the Boots to Business program, the development and maintenance of a five-year business plan, and referrals to other SBA resource partners when appropriate for additional training or mentoring services. ", "Prior to FY2016, Congress recommended appropriations for VBOCs and the Boots to Business initiative. Funding for the OVBD's other veterans assistance programs was provided through the SBA's salaries and expenses account.", "Starting in FY2016, Congress has recommended a single amount for all OVBD programs (currently $12.7 million) (see Table 1 ). The Trump Administration requested $11.25 million for these programs in FY2018 and $11.25 million in FY2019. ", "As shown in Table 5 , VBOCs trained or advised 51,945 veterans in FY2018 and 17,167 veterans participated in the Boots to Business Initiative. "], "subsections": []}, {"section_title": "SCORE (Service Corps of Retired Executives)", "paragraphs": ["The SBA has partnered with various voluntary business and professional service organizations to provide management and technical assistance training to small businesses since the 1950s. On October 5, 1964, using authority under the Small Business Act to provide \"technical and managerial aids to small business concerns\" in cooperation with \"educational and other nonprofit organizations, associations, and institutions,\" then-SBA Administrator Eugene P. Foley officially launched SCORE (Service Corps of Retired Executives) as a national, volunteer organization with 2,000 members, uniting more than 50 independent nonprofit organizations into a single, national nonprofit organization. Since then, the SBA has provided financial assistance to SCORE to provide training to small business owners and prospective owners.", "Over the years, Congress has authorized the SBA to take certain actions relating to SCORE. For example, P.L. 89-754, the Demonstration Cities and Metropolitan Development Act of 1966, authorized the SBA to permit members of nonprofit organizations use of the SBA's office facilities and services. P.L. 90-104, the Small Business Act Amendments of 1967, added the authority to pay travel and subsistence expenses \"incurred at the request of the Administration in connection with travel to a point more than fifty miles distant from the home of that individual in providing gratuitous services to small businessmen\" or \"in connection with attendance at meetings sponsored by the Administration.\" P.L. 93-113 , the Domestic Volunteer Service Act of 1973, was the first statute to mention SCORE directly, providing the Director of ACTION authority to work with SCORE to \"expand the application of their expertise beyond Small Business Administration clients.\" P.L. 95-510 , a bill to amend the Small Business Act, provided the SBA explicit statutory authorization to work with SCORE (Section 8(b)(1)(B)). P.L. 106-554 , the Consolidated Appropriations Act, 2001 (Section 1(a)(9)\u2014the Small Business Reauthorization Act of 2000) authorized SCORE to solicit cash and in-kind contributions from the private sector to be used to carry out its functions.", "The SBA currently provides grants to SCORE to provide in-person mentoring, online training, and \"nearly 9,000 local training workshops annually\" to small businesses. SCORE's 350 chapters and more than 800 branch offices are located throughout the United States and partner with more than 11,000 volunteer counselors, who are working or retired\u00a0business owners, executives and corporate leaders, to provide management and training assistance to small businesses \"at no charge or at very low cost.\"", "As shown in Table 6 , SCORE's volunteer network of business professionals provided assistance to 686,208 clients in FY2018 (559,805 clients received technical assistance training services and 126,403 client received counseling services).", "Congress recommended that SCORE receive $8.0 million in FY2015, $10.5 million in FY2016 and FY2017, $11.5 million in FY2018, and $11.7 million in FY2019 (see Table 1 ). The Trump Administration requested $9.9 million for the program in FY2018 and FY2019. ", "The SBA Office of Entrepreneurial Development includes SCORE in its multiyear time series study to assess its programs' effectiveness. The 2014 survey was sent to 124,612 SCORE clients who had a valid email address and received at least one mentoring session in any form (telephone, online/email, in-person, or other form) during FY2013 (October 2012-September 2013). The survey was initially distributed by email, and telephone calls were used as a follow-up to ensure at least 30 responses were received from each responding SCORE chapter. The survey was administered between October 2013 and December 2013. A total of 13,548 surveys (10.9% return rate) were completed either by email or telephone, representing 318 of SCORE's then-330 chapters.", "The 2014 survey indicated that, of the SCORE clients ", "60.9% reported that they strongly agreed (32.2%) or agreed (28.7%) with the following statement: SCORE is important to my success; 44.8% reported that they strongly agreed (18.4%) or agreed (26.4%) with the following statement: As a result of working with SCORE, I have changed my business strategies or practices; 32.6% reported that they strongly agreed (12.1%) or agreed (20.5%) with the following statement: Working with SCORE helped me add employees in the past year; and 51.8% reported that they strongly agreed (17.0%) or agreed (34.8%) with the following statement: Working with SCORE helped me grow my business revenue. "], "subsections": [{"section_title": "Legislation", "paragraphs": ["As mentioned earlier, P.L. 114-88 expanded SCORE's role by authorizing the SBA to provide up to two years of additional financial assistance, on a competitive basis, to SBDCs, WBCs, SCORE, or any proposed consortium of such individuals or entities to assist small businesses located in a presidentially declared major disaster area.", "In addition, H.R. 1774 , introduced during the 115 th Congress, would have required the SBA to use only authorized entrepreneurial development programs (SCORE, WBCs, SBDCs, etc.) to deliver specified entrepreneurial development services; modified SCORE program requirements with respect to the role of participating volunteers, program plans and goals, and reporting; and added language concerning the provision and reporting of online counseling by SCORE. Similar legislation was introduced during the 114 th Congress ( H.R. 207 , H.R. 4788 , and S. 1000 )."], "subsections": []}]}, {"section_title": "Program for Investment in Micro-entrepreneurs (PRIME)", "paragraphs": ["P.L. 106-102 , the Gramm-Leach-Bliley Act (of 1999) (Subtitle C\u2014Microenterprise Technical Assistance and Capacity Building Program), amended P.L. 103-325 , the Riegle Community Development and Regulatory Improvement Act of 1994, to authorize the SBA to \"establish a microenterprise technical assistance and capacity building grant program.\" The program was to \"provide assistance from the Administration in the form of grants\" to", "nonprofit microenterprise development organizations or programs (or a group or collaborative thereof) that has a demonstrated record of delivering microenterprise services to disadvantaged entrepreneurs; an intermediary; a microenterprise development organization or program that is accountable to a local community, working in conjunction with a state or local government or Indian tribe; or an Indian tribe acting on its own, if the Indian tribe can certify that no private organization or program referred to in this paragraph exists within its jurisdiction.\"", "The SBA was directed \"to ensure that not less than 50% of the grants \u2026 are used to benefit very low-income persons, including those residing on Indian reservations.\" It was also directed to", "(1) provide training and technical assistance to disadvantaged entrepreneurs; (2) provide training and capacity building services to microenterprise development organizations and programs and groups of such organizations to assist such organizations and programs in developing microenterprise training and services; (3) aid in researching and developing the best practices in the field of microenterprise and technical assistance programs for disadvantaged entrepreneurs; and (4) for such other activities as the Administrator determines are consistent with the purposes of this subtitle.", "The SBA's PRIME program was designed to meet these legislative requirements by providing assistance to organizations that \"help low-income entrepreneurs who lack sufficient training and education to gain access to capital to establish and expand their small businesses.\" The program offers four types of grants: ", "Technical Assistance Grants support training and technical assistance to disadvantaged microentrepreneurs, Capacity Building Grants support training and capacity building services to microenterprise development organizations and programs to assist them in developing microenterprise training and services, Research and Development Grants support the development and sharing of best practices in the field of microenterprise development and technical assistance programs for disadvantaged microentrepreneurs, and Discretionary Grants support other activities determined to be consistent with these purposes.", "Grants are awarded on an annual basis. Applicants may be approved for option year funding for up to four subsequent years. Award amounts vary depending on the availability of funds. However, no single grantee may receive more than $250,000 or 10% of the total funds made available for the program in a single fiscal year, whichever is less. The minimum grant award for technical assistance and capacity building grants is $50,000. There is no minimum grant award amount for research and development or discretionary grants. The SBA typically awards at least 75% of the grant funds for technical assistance, at least 15% for capacity building, and the remainder for research and development or discretionary activities.", "Recipients must match 50% of the funding from nonfederal sources. Revenue from fees, grants, and gifts; income from loan sources; and in-kind resources from nonfederal public or private sources may be used to comply with the matching requirement. SBA regulations indicate that \"applicants or grantees with severe constraints on available sources of matching funds may request that the Administrator or designee reduce or eliminate the matching requirements.\" Any reductions or eliminations must not exceed 10% of the aggregate of all PRIME grant funds made available by SBA in any fiscal year. ", "Table 7 provides the number and amount of PRIME awards from FY2014 to FY2018. ", "Congress has recommended that the PRIME program receive $5.0 million in each fiscal year since FY2015 (see Table 1 ).", "As mentioned previously, the Obama Administration recommended in its FY2012-FY2017 budget requests that funding for the PRIME program be eliminated. It argued that the PRIME program overlaps and duplicates the SBA's Microloan Technical Assistance Program. The Trump Administration requested that the program receive no funding in FY2018 and FY2019."], "subsections": []}, {"section_title": "7(j) Management and Technical Assistance Program", "paragraphs": ["Using what it viewed as broad statutory powers granted under Section 8(a) of the Small Business Act of 1958, as amended, the SBA issued regulations in 1970 creating the 8(a) contracting program to \"assist small concerns owned by disadvantaged persons to become self-sufficient, viable businesses capable of competing effectively in the market place.\" Using its statutory authority under Section 7(j) of the Small Business Act to provide management and technical assistance through contracts, grants, and cooperative agreement to qualified service providers, the regulations specified that \"the SBA may provide technical and management assistance to assist in the performance of the subcontracts.\"", "On October 24, 1978, P.L. 95-507 , to amend the Small Business Act and the Small Business Investment Act of 1958, provided the SBA explicit statutory authority to extend financial, management, technical, and other services to socially and economically disadvantaged small businesses. The SBA's current regulations indicate that the 7(j) Management and Technical Assistance Program, named after the section of the Small Business Act of 1958, as amended, authorizing the SBA to provide management and technical assistance training, will, \"through its private sector service providers\" deliver \"a wide variety of management and technical assistance to eligible individuals or concerns to meet their specific needs, including: (a) counseling and training in the areas of financing, management, accounting, bookkeeping, marketing, and operation of small business concerns; and (b) the identification and development of new business opportunities.\" Eligible individuals and businesses include \"8(a) certified firms, small disadvantaged businesses, businesses operating in areas of high unemployment, or low income or firms owned by low income individuals.\" ", "As shown on Table 8 , the 7(j) program assisted 6,483 small business owners in FY2018. ", "Congress has recommended that the 7(j) program receive $2.8 million in each fiscal year since FY2015 (see Table 1 ). The Trump Administration requested $2.8 million for the program in FY2018 and FY2019."], "subsections": []}, {"section_title": "Native American Outreach Program", "paragraphs": ["The SBA established the Office of Native American Affairs in 1994 to \"address the unique needs of America's First people.\" It oversees the Native American Outreach Program, which provides management and technical educational assistance to American Indians, Alaska Natives, Native Hawaiians, and \"the indigenous people of Guam and American Samoa \u2026 to promote entity-owned and individual 8(a) certification, government contracting, entrepreneurial education, and capital access.\" The program's management and technical assistance services are available to members of these groups living in most areas of the nation. However, \"for Native Americans living in much of Indian Country, actual reservations communities where the land is held in trust by the U.S. federal government, SBA loan guaranties and technical assistance services are not available.\"", "In FY2018, the SBA's Office of Native American Affairs assisted 1,549 small businesses. It provided workshops on business development and financial literacy, training webinars, incubator training, and online classes for Native American entrepreneurs.", "Congress has recommended that the Native American Outreach Program receive $2.0 million in each fiscal year since FY2015 (see Table 1 ). The Trump Administration requested $1.5 million for the program in FY2018 and FY2019."], "subsections": []}, {"section_title": "SBA Initiatives", "paragraphs": ["In addition to the Boots to Business initiative discussed under \" Veterans Business Development Programs ,\" Congress has recommended appropriations for the following three Obama Administration management and training initiatives: the Entrepreneurial Development Initiative (Regional Innovation Clusters), Entrepreneurial Education, and Growth Accelerators."], "subsections": [{"section_title": "Entrepreneurial Development Initiative (Regional Innovation Clusters)", "paragraphs": ["The SBA has supported regional innovation clusters since FY2009, when it partnered with small business suppliers working in the field of robotics in Michigan. In FY2010, the SBA was involved in the rollouts of two additional clusters: another robotics cluster in southeast Virginia and a cluster involving a partnership with the Department of Energy and several other federal agencies with the goal of developing a regional cluster in energy efficiency homes and businesses. In FY2011, SBA awarded funds to 10 regional innovation clusters. In FY2012, these clusters \"spurred $48 million in private capital raised through venture and angel capital sources, $6.5 million in early stage investment from SBIR [Small Business Innovation Research program] and STTR [Small Business Technology Transfer program] awards, and over $217 million in contracts or subcontracts from the federal government.\" ", "President Obama requested, and Congress recommended, an appropriation of $5.0 million for the SBA's Entrepreneurial Development Initiative (Regional Innovation Clusters) in FY2014. Congress recommended that the program receive $6.0 million in FY2015, $6.0 million in FY2016, and $5.0 million in each fiscal year since FY2017 (see Table 1 ). The Trump Administration requested that the program receive no funds in FY2018 and in FY2019.", "The SBA reports that there are currently 56 federally supported regional innovation clusters, with the SBA directly involved in 40 of them.", "The SBA describes regional innovation clusters as \"on-the-ground collaborations between business, research, education, financing and government institutions that work to develop and grow a particular industry or related set of industries in a particular geographic region.\" Targeted activities for the 40 clusters currently being supported by the SBA include \"business development, intellectual property matters, export and import development, finance, marketing, commercialization of new technology and federal and private-sector supply chain opportunities.\""], "subsections": []}, {"section_title": "Entrepreneurial Education", "paragraphs": ["The SBA started its Entrepreneurship Education initiative in 2008. At that time, it was called the Emerging 200 Underserved initiative (E200), reflecting the initiative's provision of assistance to 200 inner city small businesses. In FY2009, it was renamed the Emerging Leaders initiative to reflect the SBA's decision to increase the number of small businesses participating in the initiative. It was renamed the Entrepreneurial Education initiative in FY2013, and it is funded under that name in appropriation acts, but the SBA, and others, often still call it the Emerging Leaders Initiative. The initiative currently ", "offers high\u2010growth small businesses in underserved communities a seven\u2010month executive leader education series that elevates their growth trajectory, creates jobs, and contributes to the economic well\u2010being of their local communities. Participants receive more than 100 hours of specialized training, technical resources, a professional networking system, and other resources to strengthen their business model and promote economic development within urban communities. At the conclusion of the training, participants produce a three\u2010year strategic growth action plan with benchmarks and performance targets that help them access the necessary support and resources to move forward for the next stage of business growth.", "The Entrepreneurial Education initiative was initially offered in 10 communities (Albuquerque, Atlanta, Baltimore, Boston, Chicago, Des Moines, Memphis, Milwaukee, New Orleans, and Philadelphia) and provided training to 200 inner city small businesses. The program was funded through the SBA's Office of Entrepreneurship Education. Since the initiative's inception, the SBA has requested separate appropriations to fund and expand the initiative. In FY2012, the initiative offered training in 27 communities, with more than 450 small businesses participating.", "The Obama Administration requested $40.0 million in its FY2014 budget request to sponsor entrepreneur training in 40 locations and to create an online entrepreneurship training program. Congress included the Entrepreneurship Education initiative in its list of SBA entrepreneurial development/noncredit programs to be funded in FY2014. This was the first time that the initiative was included in the list. In the explanatory statement accompanying the Consolidated Appropriations Act, 2014, Congress recommended that the initiative receive $5.0 million in FY2014. Congress recommended that the program receive $7.0 million in FY2015, $10.0 million in FY2016 and FY2017, $6.0 million in FY2018, and $3.5 million in FY2019 (see Table 1 ). The Trump Administration requested $2.0 million for the program in FY2018 and FY2019.", "The Entrepreneurship Education initiative was offered in 60 cities in FY2018 and served more than 800 small business owners. These owners are required to have been in business for at least three years, have annual revenue of at least $400,000, and have at least one employee, other than the owner, to participate in the initiative. There is no cost to the participants. "], "subsections": []}, {"section_title": "Growth Accelerators", "paragraphs": ["The SBA describes growth accelerators as \"organizations that help entrepreneurs start and scale their businesses.\" Growth accelerators are typically run by experienced entrepreneurs and help small businesses access seed capital and mentors. The SBA claims that growth accelerators \"help accelerate a startup company's path towards success with targeted advice on revenue growth, job, and sourcing outside funding.\" ", "In FY2012, the SBA sponsored several meetings with university officials and faculty, entrepreneurs, and representatives of growth accelerators to discuss mentoring and how to best assist \"high-growth\" entrepreneurs. These meetings \"culminated with a White House event co\u2010hosted by the SBA and the Department of Commerce to help formalize the network of universities and accelerators, provide a series of 'train the trainers' events on various government programs that benefit high\u2010growth entrepreneurs, and provide a playbook of best practices on engaging universities on innovation and entrepreneurship.\" ", "In FY2014, the Obama Administration requested $5.0 million, and Congress recommended an appropriation of $2.5 million, for the growth accelerator initiative. The Obama Administration proposed to use the funding to provide matching grants to universities and private sector accelerators \"to start a new accelerator program (based on successful models) or scale an existing program.\" The Obama Administration also indicated that it planned to request funding for five years ($25 million in total funding) and feature a required 4:1 private-sector match. However, because it received half of its budget request ($2.5 million), the SBA decided to reconsider the program's requirements. As part of that reconsideration, the SBA decided to drop the 4:1 private-sector match in an effort to enable the program to have a larger effect. ", "The SBA announced the availability of 50 growth accelerator grants of $50,000 each on May 12, 2014, and received more than 800 applications by the August 2, 2014, deadline. The 50 awards were announced in September 2014. ", "Congress recommended that the program receive $4.0 million in FY2015, $1.0 million in FY2016, FY2017, and FY2018, and $2 million in FY2019 (see Table 1 ). Congress also directed the SBA in its explanatory statements accompanying P.L. 113-235 and P.L. 114-113 to \"require $4 of matching funds for every $1 awarded under the growth accelerators program.\" The Trump Administration requested that the program receive no funding in FY2018 and FY2019.", "The SBA announced the award of 80 growth accelerator grants of $50,000 each on August 4, 2015 ($4.0 million), 68 growth accelerator grants of $50,000 each on August 31, 2016 ($3.4 million), and 20 growth accelerator grants of $50,000 each on October 30, 2017 ($1 million). ", "The SBA did not issue a competitive announcement for Growth Accelerator awards in FY2018. The SBA plans to make Growth Accelerator awards in FY2019 using both the FY2018 and FY2019 funding amounts. "], "subsections": []}]}]}, {"section_title": "Department of Commerce Small Business Management and Technical Assistance Training Programs", "paragraphs": ["As mentioned previously, the Department of Commerce's Minority Business Development Agency (MBDA) provides training to minority business owners to assist them in obtaining contracts and financial awards. In addition, the Department of Commerce's Economic Development Administration's Local Technical Assistance Program promotes efforts to build and expand local organizational capacity in distressed areas. As part of that effort, it funds projects that focus on technical or market feasibility studies of economic development projects or programs, which often include consultation with small businesses."], "subsections": [{"section_title": "The Minority Business Development Agency", "paragraphs": ["The MBDA was established by President Richard M. Nixon by Executive Order 11625, issued on October 13, 1971, and published in the Federal Register the next day. It clarified the authority of the Secretary of Commerce to", "implement federal policy in support of the minority business enterprise program, provide additional technical and management assistance to disadvantaged businesses, assist in demonstration projects, and coordinate the participation of all federal departments and agencies in an increased minority enterprise effort.", "The MBDA received an appropriation of $30.0 million in FY2015, $32.0 million in FY2016, $34.0 million in FY2017, $39.0 million in FY2018, and $40 million in FY2019. The Trump Administration requested $6.0 million to close the agency in FY2018 and a reduction to $10.0 million in FY2019.", "As part of its mission, the MBDA seeks to train minority business owners to become first- or second-tier suppliers to private corporations and the federal government. Progress is measured in the business's increased gross receipts, number of employees, and size and scale of the firms associated with minority business enterprises.", "The MBDA reported that in FY2015 it helped to create and retain 36,896 jobs and assisted minority-owned and operated businesses in obtaining more than $5.9 billion in contracts and capital awards."], "subsections": []}, {"section_title": "The EDA Local Technical Assistance Program", "paragraphs": ["P.L. 89-186, the Public Works and Economic Development Act of 1965, authorized the Department of Commerce's Economic Development Administration (EDA) to provide financial assistance to economically distressed areas in the United States that are characterized by high levels of unemployment and low per-capita income. The EDA currently administers seven Economic Development Assistance Programs (EDAPs) that award matching grants for public works, economic adjustment, planning, technical assistance, research and evaluation, trade adjustment assistance, and global climate change mitigation. ", "Grants awarded under the EDA's Local Technical Assistance Program are designed to help solve specific economic development problems, respond to development opportunities, and build and expand local organizational capacity in distressed areas. The majority of local technical assistance projects focus on technical or market feasibility studies of economic development projects or programs, including consultation with small businesses. The EDA's Local Technical Assistance Program received an appropriation of $11.0 million in FY2015, $10.5 million in FY2016, $9.0 million in FY2017, and $9.5 million in FY2018 and FY2019. The Trump Administration requested $30.0 million to close the EDA in FY2018 and $14.9 million to close it in FY2019."], "subsections": []}]}, {"section_title": "Congressional Issues", "paragraphs": ["For many years, a recurring theme at congressional hearings concerning the SBA's management and technical assistance training programs has been the perceived need to improve program efficiency by eliminating duplication of services or increasing cooperation and coordination both within and among SCORE, WBCs, and SBDCs. For example, the House Committee on Small Business has argued that the SBA's various management and technical assistance training programs should be \"folded into the mission of the SBDC program or their responsibilities should be taken over by other agencies\" because they \"overlap each other and duplicate the educational services provided by other agencies.\" ", "In addition, as mentioned previously, the Obama Administration recommended that the PRIME program be eliminated, arguing that it overlaps and duplicates the SBA's Microloan Technical Assistance Program. The Trump Administration has also recommended that the PRIME program, the Growth Accelerators Initiative, and the Entrepreneurial Development Initiative (Regional Innovation Clusters) be eliminated because they overlap private-sector \"mechanisms to foster local business development and investment\" or are \"duplicative of other federal programs.\"", "In contrast, Congress has approved continued funding for these programs and the Boots to Business and Boots to Business: Reboot initiatives. In recent years, Congress has also explored ways to improve the SBA's measurement of its management and training programs' effectiveness."], "subsections": [{"section_title": "Program Administration", "paragraphs": ["In 2007, the U.S. Government Accountability Office (GAO) was asked to assess the SBA's oversight of WBCs and the coordination and duplication of services among the SBA's management and technical training assistance programs. GAO found that", "As described in the terms of the SBA award, WBCs are required to coordinate with local SBDCs and SCORE chapters. In addition, SBA officials told us that they expected district offices to ensure that the programs did not duplicate each other. However, based on our review, WBCs lacked guidance and information from SBA on how to successfully carry out their coordination efforts. Most of the WBCs that we spoke with explained that in some situations they referred clients to an SBDC or SCORE counselor, and some WBCs also took steps to more actively coordinate with local SBDCs and SCORE chapters to avoid duplication and leverage resources. We learned that WBCs used a variety of approaches to facilitate coordination, such as memorandums of understanding, information-sharing meetings, and co-locating staff and services. However, some WBCs told us that they faced challenges in coordinating services with SBDC and SCORE, in part because the programs have similar performance measures, and this could result in competition among the service providers in some locations. We also found that on some occasions SBA encouraged WBCs to provide services that were similar to services already provided by SBDCs in their district. Such challenges thwart coordination efforts and could increase the risk of duplication in some geographic areas.", "Some organizations have argued that the SBA's management and technical assistance training programs should be merged. For example, the U.S. Women's Chamber of Commerce argued that", "over the last 50 years, the SBA entrepreneurial development system has grown into a fragmented array of programs, which has resulted in a disorganized, overlapping, and [in] efficient delivery of service through a system that is ill-prepared to effectively address the challenges of our economy\u2026.", "if we are to serve the needs of American entrepreneurs, we must commit to a top to bottom restructuring of the delivery of the entrepreneurial services of the SBA. The myriad of entrepreneurial development programs should be unified into one centrally managed organization that has the flexibility to provide services when and where they are needed. ", "These organizations argue that merging the SBA's management and technical assistance training programs would provide greater coordination of services and \"one clear channel for assistance\" that \"is paramount to the average business owner seeking help.\" Advocates of merging the SBA's management and technical assistance training programs often mention merging them into the SBDC Program because, in their view, it has the advantage of having a broader connection to mainstream resources and its locations are \"greater and more diverse\" than other SBA management and technical assistance training programs.", "Others argue that providing separate management and training assistance programs for specific groups is the best means to ensure that those groups' unique challenges are recognized and their unique needs are met. For example, when asked at a congressional hearing about the rationale for having separate management and technical assistance training programs for specific groups, a representative of the Association of Women's Business Centers stated,", "I think that there is tremendous rationale for having different programs\u2026. The women's business center programs really target a very different kind of population than the SBDCs.\u2026 We serve very different clientele\u2026. We create a very different culture at the women's business center. We really have made it a welcoming place where \u2026 they feel comfortable.\u2026 And it's very important to me that the woman have a place where they feel comfortable \u2026 and where they see other women like themselves who are aspiring to reach their dreams.", "At another congressional hearing, the Association of Women's Business Centers' executive director argued that \"the new three-year funding arrangement\" for WBCs had enabled them to \"concentrate on better serving their clients and growing their programs\" and that WBCs should be provided continued and expanded funding because they provide effective services:", "We know that when our program performance is measured against any other enterprise assistance program, we will meet or exceed any performance measures. Indeed, the SBA's own client-based performance reviews have shown our clients to be just as satisfied or in some cases more satisfied with the services they have received compared to the SBA's other entrepreneurial development efforts. ", "Instead of merging programs, some argue that improved communication among the SBA's management and technical assistance training resource partners and enhanced SBA program oversight is needed. For example, during the 111 th Congress, the House passed H.R. 2352 , the Job Creation Through Entrepreneurship Act of 2009, on May 20, 2009, by a vote of 406-15. The Senate did not take action on the bill. In its committee report accompanying the bill, the House Committee on Small Business concluded that ", "Each ED [Entrepreneurial Development] program has a unique mandate and service delivery approach that is customized to its particular clients. However, as a network, the programs have established local connections and resources that benefit entrepreneurs within a region. Enhanced coordination among this network is critical to make the most of scarce resources available for small firms. It can also ensure that best practices are shared amongst providers that have similar goals but work within different contexts.", "In an effort to enhance the oversight and coordination of the SBA's management and technical assistance training programs, the Job Creation Through Entrepreneurship Act of 2009 would have required the SBA to", "create a new online, multilingual distance training and education program that was fully integrated into the SBA's existing management and technical assistance training programs and \"allows entrepreneurs and small business owners the opportunity to exchange technical assistance through the sharing of information.\" coordinate its management and technical assistance training programs \"with State and local economic development agencies and other federal agencies as appropriate.\" \"report annually to Congress, in consultation with other federal departments and agencies as appropriate, on opportunities to foster coordination, limit duplication, and improve program delivery for federal entrepreneurial development activities.\"", "During the 112 th Congress, S. 3442 , the SUCCESS Act of 2012, and S. 3572 , the Restoring Tax and Regulatory Certainty to Small Businesses Act of 2012, sought to address the coordination issue by requiring the SBA, in consultation with other federal departments and agencies, to submit an annual report to Congress \"describing opportunities to foster coordination of, limit duplication among, and improve program delivery for federal entrepreneurial development programs.\" The SUCCESS Act of 2012 was referred to the Senate Committee on Small Business and Entrepreneurship, which held hearings on the bill. The Restoring Tax and Regulatory Certainty to Small Businesses Act of 2012 was referred to the Senate Committee on Finance.", "There has also been some discussion of merging SBA's small business management and training programs with business management and training programs offered by other federal agencies, both as a means to improve program performance and to achieve savings. For example, P.L. 111-139 , Increasing the Statutory Limit on the Public Debt, requires GAO to \"conduct routine investigations to identify programs, agencies, offices, and initiatives with duplicative goals and activities within Departments and governmentwide and report annually to Congress on the findings.\" GAO identified 51 programmatic areas in its 2012 annual report on federal duplication \"where programs may be able to achieve greater efficiencies or become more effective in providing government services.\" GAO identified management and training assistance provided to businesses by the SBA and the Departments of Commerce, Housing and Urban Development, and Agriculture as one of these areas. GAO identified 53 business management and technical assistance programs sponsored by the SBA and these three departments. GAO reported that \"the number of programs that support entrepreneurs\u201453\u2014and the overlap among these programs raise questions about whether a fragmented system is the most effective way to support entrepreneurs. By exploring alternatives, agencies may be able to determine whether there are more efficient ways to continue to serve the unique needs of entrepreneurs, including consolidating various programs.\" ", "As mentioned previously, the House Committee on Small Business has argued that \"given tight budgetary constraints\" the SBA's various management and technical assistance training programs \"should be folded into the mission of the SBDC program or their responsibilities should be taken over by other agencies.\" The House Committee on Small Business has also indicated its opposition to the Obama Administration's increased use of, and requests for increased funding for, management and training initiatives. For example, Representative Sam Graves, then-chair of the House Committee on Small Business, indicated in his opening remarks at a congressional hearing in April 2014 that ", "Despite reports that the federal government is riddled with redundant [management and training] programs for entrepreneurs, the SBA has increasingly spawned its own entrepreneurial development initiatives. In doing so, the SBA has repeatedly requested increased funding for its own initiatives while allowing funding for statutorily authorized programs, such as SBDCs, to remain static.\u2026 I continue to question the necessity of these initiatives given the potential overlap with both private and public sector efforts already in existence. ", "In addition, as mentioned previously, H.R. 1774 would, among other provisions, require the SBA to only use authorized entrepreneurial development programs (SCORE, WBCs, SBDCs, etc.) to deliver specified entrepreneurial development services."], "subsections": []}, {"section_title": "Program Evaluation", "paragraphs": ["GAO noted in its 2007 assessment of the SBA's management and technical assistance training programs that, in addition to its annual survey of WBC, SBDC, and SCORE participants, the SBA requires WBCs to provide quarterly performance reports that include \"the WBCs' actual accomplishments, compared with their performance goals for the reporting period; actual budget expenditures, compared with an estimated budget; cost of client fees; success stories; and names of WBC personnel and board members.\" GAO also noted that WBCs are also required to issue fourth quarter performance reports that \"also include a summary of the year's activities and economic impact data that the WBCs collect from their clients, such as number of business start-ups, number of jobs created, and gross receipts.\" SBDCs have similar reporting requirements.", "In recent years, Congress has considered requiring the SBA to expand its use of outcome-based measures to determine the effectiveness of its management and technical training assistance programs. For example, during the 111 th Congress, the previously mentioned Job Creation Through Entrepreneurship Act of 2009 would have required the SBA to create \"outcome-based measures of the amount of job creation or economic activity generated in the local community as a result of efforts made and services provided by each women's business center.\" It would also have required the SBA to \"develop and implement a consistent data collection process to cover all entrepreneurial development programs\" including \"data relating to job creation, performance, and any other data determined appropriate by the Administrator with respect to the Administration's entrepreneurial development programs.\" ", "During the 112 th Congress, the SUCCESS Act of 2012 and Restoring Tax and Regulatory Certainty to Small Businesses Act of 2012 would have required the SBA to \"promulgate a rule to develop and implement a consistent data collection process for the entrepreneurial development programs\" that included data \"relating to job creation and performance and any other data determined appropriate by the Administrator.\" ", "During the 114 th Congress, H.R. 207 would have required the SBA to issue an annual report concerning \"all entrepreneurial development activities undertaken in the current fiscal year.\" This report would include a description and operating details for each program and activity; operating circulars, manuals, and standard operating procedures for each program and activity; a description of the process used to award grants under each program and activity; a list of all awardees, contractors, and vendors and the amount of awards provided for the current fiscal year for each program and activity; the amount of funding obligated for the current fiscal year for each program and activity; and the names and titles for those individuals responsible for each program and activity. This legislative language was reintroduced during the 115 th Congress in H.R. 1774 , the Developing the Next Generation of Small Businesses Act of 2017. "], "subsections": []}]}, {"section_title": "Concluding Observations", "paragraphs": ["Congressional interest in the federal government's small business management and technical assistance training programs has increased in recent years. One of the reasons for the heightened level of interest in these programs is that small business has led job formation and retention during previous economic recoveries. It has been argued that effective small business management and technical assistance training programs are needed if small businesses are to lead job creation and retention during the current economic recovery. As then-Representative Heath Shuler stated during a congressional hearing in 2009:", "We often talk about the role that small business plays in the creation of jobs and with good reason. Small firms generate between 60 and 80 percent of new positions. Following the recession in the mid-1990s, they created 3.8 million jobs\u2026. we could use that growth today. But unfortunately, many firms are struggling to make ends meet. Let's allow them to hire new workers. In the face of historic economic challenges, we should be investing in America's job creators. SBA's Entrepreneurial Development Programs, or ED, do just that. Of all the tools in the small business toolbox, these are some of the most critical. They help small firms do everything from draft business plans to access capital.", "The general consensus is that federal management and technical assistance training programs serve an important purpose and, for the most part, are providing needed services that are not available elsewhere. As Karen Mills, then-SBA administrator, stated during a press interview in 2010:", "We find that our counseling operations are equally important as our credit operations because small businesses really need help and advice, and when they get it, they tend to have more sales and more profits and more longevity, and they hire more people. So we have looked forward and said, \"How do we get all the tools small businesses need into their hands?\" Maybe they want to export. Maybe they want to know how to use broadband. Maybe they are veterans who are coming back and want to start a business or grow their business. Our job is to make sure all that information and opportunity is accessible for small businesses so they can do what they do, which is keep our economy strong.", "There is also a general consensus that making federal management and technical assistance training programs more effective and responsive to the needs of small business would assist the national economic recovery. However, there are disagreements over how to achieve that goal.", "Some advocate (1) increasing funding for existing programs to enable them to provide additional training opportunities for small businesses while, at the same time, maintaining separate training programs for specific demographic groups as a means to ensure that those groups' specific needs are met; (2) requiring the SBA to make more extensive use of outcome-based measures to better determine the programs' effect on small business formation and retention, job creation and retention, and the generation of wealth; and (3) temporarily reducing or eliminating federal matching requirements to enable SBA's management and technical assistance training resource partners to focus greater attention to service delivery and less to fund raising. Others argue for a merger of existing programs to reduce costs and improve program efficiency, to focus available resources on augmenting the capacity of SBDCs to meet the needs of all small business groups, and require the SBA to make more extensive use of outcome-based performance measures to determine program effectiveness.", "No case studies or empirical data are available concerning the efficiencies that might be gained by merging the SBA's management and technical assistance training programs. Advocates argue that merging the programs would improve communications, reduce confusion by business owners seeking assistance by ensuring that all small business management and technical assistance training centers serve all small business owners and aspiring entrepreneurs, lead to more sustainable and predictable funding for the programs from nonfederal sources, and result in more consistent and standard operating procedures throughout the country. Opponents argue that any gains in program efficiency that might be realized would be more than offset by the loss of targeted services for constituencies that often require different information and training to meet their unique challenges and needs."], "subsections": [{"section_title": "Appendix. Brief Descriptions of SBA Management and Technical Assistance Training Programs", "paragraphs": [], "subsections": []}]}]}}
{"id": "R45662", "title": "FY2018 State Grants Under Title I-A of the Elementary and Secondary Education Act (ESEA)", "released_date": "2019-04-01T00:00:00", "summary": ["The Elementary and Secondary Education Act (ESEA), most recently comprehensively amended by the Every Student Succeeds Act (ESSA; P.L. 114-95), is the primary source of federal aid to K-12 education. The Title I-A program is the largest grant program authorized under the ESEA and was funded at $15.8 billion for FY2018. It is designed to provide supplementary educational and related services to low-achieving and other students attending elementary and secondary schools with relatively high concentrations of students from low-income families.", "Under current law, the U.S. Department of Education (ED) determines Title I-A grants to local educational agencies (LEAs) based on four separate funding formulas: Basic Grants, Concentration Grants, Targeted Grants, and Education Finance Incentive Grants (EFIG). The four Title I-A formulas have somewhat distinct allocation patterns, providing varying shares of allocated funds to different types of states. Thus, for some states, certain formulas are more favorable than others.", "This report provides FY2018 state grant amounts under each of the four formulas used to determine Title I-A grants. Overall, California received the largest FY2018 Title I-A grant amount ($2.0 billion, or 12.76% of total Title I-A grants). Wyoming received the smallest FY2018 Title I-A grant amount ($35.9 million, or 0.23% of total Title I-A grants)."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Elementary and Secondary Education Act (ESEA), most recently comprehensively amended by the Every Student Succeeds Act (ESSA; P.L. 114-95 ), is the primary source of federal aid to elementary and secondary education. Title I-A is the largest program in the ESEA, funded at $15.8 billion for FY2018. Title I-A is designed to provide supplementary educational and related services to low-achieving and other students attending elementary and secondary schools with relatively high concentrations of students from low-income families. The U.S. Department of Education (ED) determines Title I-A grants to local educational agencies (LEAs) based on four separate funding formulas: Basic Grants, Concentration Grants, Targeted Grants, and Education Finance Incentive Grants (EFIG).", "This report provides estimated FY2018 state grant amounts under each of the four formulas used to determine Title I-A grants. For a general overview of the Title I-A formulas, see CRS Report R44164, ESEA Title I-A Formulas: In Brief . For a more detailed discussion of the Title I-A formulas, see CRS Report R44461, Allocation of Funds Under Title I-A of the Elementary and Secondary Education Act ."], "subsections": []}, {"section_title": "Methodology", "paragraphs": ["Under Title I-A, funds are allocated to LEAs via state educational agencies (SEAs) using the four Title I-A formulas. Annual appropriations bills specify portions of each year's Title I-A appropriation to be allocated to LEAs and states under each of the formulas. In FY2018, about 41% of Title I-A appropriations were allocated through the Basic Grants formula, 9% through the Concentration Grants formula, and 25% each through the Targeted Grants and EFIG formulas. Once funds reach LEAs, the amounts allocated under the four formulas are combined and used jointly.", "For each formula, a maximum grant is calculated by multiplying a \"formula child count,\" consisting primarily of estimated numbers of school-age children living in families in poverty, by an \"expenditure factor\" based on state average per pupil expenditures for public elementary and secondary education. In some of the Title I-A formulas, additional factors are multiplied by the formula child count and expenditure factor to determine a maximum grant amount. These maximum grants are then reduced to equal the level of available appropriations for each formula, taking into account a variety of state and LEA minimum grant provisions. In general, LEAs must have a minimum number of formula children and/or a minimum formula child rate to be eligible to receive a grant under a specific Title I-A formula. Some LEAs may qualify for a grant under only one formula, while other LEAs may be eligible to receive grants under multiple formulas.", "Under three of the formulas\u2014Basic, Concentration, and Targeted Grants\u2014funds are initially calculated at the LEA level. State grants are the total of allocations for all LEAs in the state, adjusted for state minimum grant provisions. Under EFIG, grants are first calculated for each state overall and then are subsequently suballocated to LEAs within the state using a different formula. ", "FY2018 grants included in this report were calculated by ED. The percentage share of funds allocated under each of the Title I-A formulas was calculated by CRS for each state by dividing the total grant received by the total amount allocated under each formula. "], "subsections": []}, {"section_title": "FY2018 Title I-A Grants", "paragraphs": [" Table 1 provides each state's estimated grant amount and percentage share of funds allocated under each of the Title I-A formulas for FY2018. Total Title I-A grants for each state, calculated by summing the state level grant for each of the four formulas, are also shown in Table 1 .", "Overall, California received the largest total Title I-A grant amount ($2.0 billion) and, as a result, the largest percentage share (12.76%) of Title I-A grants. Wyoming received the smallest total Title I-A grant amount ($35.9 million) and, as a result, the smallest percentage share (0.23%) of Title I-A grants.", "In general, grant amounts for states vary among formulas due to the different allocation amounts for the formulas. For example, the Basic Grant formula receives a greater share of overall Title I-A appropriations than the Concentration Grant formula, so states generally receive higher estimated grant amounts under the Basic Grant formula than under the Concentration Grant formula.", "Among states, Title I-A grant amounts and the percentage shares of funds vary due to the different characteristics of each state. For example, Texas has a larger population of children included in the formula calculations than North Carolina and, therefore, is estimated to receive a higher estimated grant amount and larger share of Title I-A funds. ", "Within a state, the percentage share of funds allocated may vary by formula, as certain formulas are more favorable to certain types of states (e.g., EFIG is generally more favorable to states with comparatively equal levels of spending per pupil among their LEAs). If a state's share of a given Title I-A formula exceeds its share of overall Title I-A funds, this is generally an indication that this particular formula is more favorable to the state than formulas under which the state's share of funds is below its overall share of Title I-A funds. For example, Florida, Nevada, New York, and Texas are estimated to receive a higher percentage share of Targeted Grants than of overall Title I-A funds, indicating that the Targeted Grant formula is more favorable to them than other Title I-A formulas may be. At the same time, all four states are estimated to receive a smaller percentage share of Basic Grants than of overall Title I-A funds, indicating that the Basic Grant formula is less favorable to them than other Title I-A formulas may be. ", "In states that are estimated to receive a minimum grant under all four formulas (North Dakota, South Dakota, Vermont, and Wyoming), the shares under the Targeted Grant and EFIG formulas are greater than under the Basic Grant or Concentration Grant formulas, due to higher state minimums under these formulas. If a state received the minimum grant under a given Title I-A formula, the grant amount is denoted with an asterisk (*) in Table 1 . "], "subsections": []}]}}
{"id": "R45629", "title": "Federal Firearms Laws: Overview and Selected Legal Issues for the 116th Congress", "released_date": "2019-03-25T00:00:00", "summary": ["Firearms regulation is an area of shared authority among federal, state, and local governments. Individual states have enacted a diverse range of laws relating to the possession, registration, and carrying of firearms, among other things. Federal law establishes a regulatory framework for the lawful manufacture, sale, and possession of firearms at the national level. The federal framework generally serves as a floor for permissible firearm use and transactions, leaving states free to supplement with additional restrictions so long as they do not conflict with federal law.", "Federal laws regulating firearms date back roughly a century, and over time lawmakers have established more stringent requirements for the transfer, possession, and transportation of firearms. The two principal federal firearms laws currently in force are the National Firearms Act of 1934 (NFA) and the Gun Control Act of 1968 (GCA), as amended. The NFA was the first major piece of federal legislation regulating the sale and possession of firearms. Through a taxation and registration scheme, the law sought to curb the rise of violence connected to organized crime by targeting the types of weapons that (at the time of passage) were commonly used by gang members. Congress passed the GCA in the wake of the assassinations of Dr. Martin Luther King Jr. and Senator Robert Kennedy to prevent firearm possession by prohibited persons and to help law enforcement stem increasing crime rates. The GCA is a complex statutory regime that has been supplemented regularly in the decades since its inception. Broadly speaking, the GCA, as amended, regulates the manufacture, transfer, and possession of firearms, extending to categories of weapons that fall outside the scope of the NFA. In general terms, the GCA sets forth who can\u2014and cannot\u2014sell, purchase, and possess firearms, how those sales and purchases may lawfully take place, what firearms may lawfully be possessed, and where firearm possession may be restricted. The Brady Handgun Violence Prevention Act amended the GCA to require a background check for many, but not all, firearms transfers.", "Numerous constitutional considerations may inform congressional proposals to modify the current framework for regulating firearms sales and possession. Although Congress has broad constitutional authority to regulate firearms, any firearm measure must be rooted in one of Congress's enumerated powers. In enacting firearms laws, Congress has typically invoked its tax, commerce, and spending powers. For example, the NFA invokes Congress's tax power, and many GCA provisions invoke Congress's commerce power. Additionally, Congress has used its spending power to incentivize states, through offering grant money, to provide comprehensive records to the FBI's National Instant Background Check System (NICS).", "When exercising its enumerated powers, Congress nevertheless must be mindful of other constitutional restraints. Congress may want to look to the Supreme Court's Second Amendment jurisprudence\u2014chiefly, District of Columbia v. Heller\u2014when imposing any firearm restriction. In Heller, the Supreme Court held that the Second Amendment provides an individual right to keep and bear arms for lawful purposes. Further, the Due Process Clause of the Fifth Amendment limits Congress's ability to deprive a person of any constitutionally protected interest, such as Second Amendment firearms rights, and rights in property, such as firearms and accessories. Moreover, when enacting measures seeking to limit state firearm schemes, Congress may want to consider the federalism limits inherent in the Constitution's system of dual sovereignty, such as the anti-commandeering doctrine.", "These constitutional considerations are relevant to the scope of legislation that the 115th and 116th Congresses have considered to amend the existing federal statutory framework of firearms regulation. Among other things, such legislation has focused on issues arising from the dissemination of 3D-printed and untraceable firearms, gaps in the collection of records for background checks of prospective firearm purchasers, restrictions on certain types of firearms and accessories, possession of firearms by the mentally ill, interstate reciprocity for lawful concealed carry of firearms, and laws permitting courts to order that firearms be temporarily removed from persons deemed to be a risk to themselves or others."], "reports": {"section_title": "", "paragraphs": ["F irearms have a unique significance in American society. Millions own or use firearms for numerous lawful purposes, such as hunting and protecting themselves in the home. Still, firearms annually cause tens of thousands of injuries and deaths, including in high-profile mass shootings. The widespread lawful and unlawful uses of firearms have prompted vigorous debate over wheth er further firearm regulation would be effective or appropriate. And framing the policy debate are legal issues stemming from the existing federal framework of firearms laws and the constitutional constraints that may cabin Congress's ability to legislate in this area. ", "Firearms regulation at the federal level has grown more expansive over time, setting rules for the lawful manufacture, sale, and possession of firearms at the national level. These federal firearms laws mostly serve as a baseline that states can (and sometimes do) supplement, and Congress regularly considers legislation to address perceived gaps in these laws. Proposals to modify the current federal framework for regulating firearms may be informed by numerous constitutional considerations, including the scope of the Second Amendment right to keep and bear arms and the need to ground legislation in one of Congress's enumerated powers. ", "This report provides an overview of the development of federal firearms laws and the major components of the current statutory regimes governing firearms. It then describes the constitutional considerations that may impact Congress's ability to enact firearms laws. Finally, this report describes selected topical areas where the 115 th and 116 th Congresses have considered legislation to amend the existing federal framework regulating firearms, highlighting some of the constitutional issues that may arise in those areas. "], "subsections": [{"section_title": "Historical Overview of Major Federal Firearms Laws", "paragraphs": ["Federal laws regulating firearms date back roughly a century, and over time lawmakers have established more stringent requirements for the transfer, possession, and transportation of firearms. Though not a regulation of firearms per se, an excise tax was levied on imported firearms and ammunition beginning in 1919. In 1927, a federal law was enacted prohibiting the use of the U.S. Postal Service to ship concealable firearms. Then, \"[s]purred by the bloody 'Tommy gun' era\" of the 1920s and early 1930s, Congress passed the National Firearms Act of 1934 (NFA), which established a stringent taxation and registration scheme for specified weapons associated with the Prohibition-fueled gang violence of the time.", "A few years later, Congress enacted the Federal Firearms Act of 1938 (FFA), which created a licensing scheme for the manufacture, importation, and sale of firearms and established limited categories of persons who could not possess firearms. The FFA eventually was superseded, however, by the more comprehensive Gun Control Act of 1968 (GCA). In addition to expanding the FFA's licensing scheme and categories of prohibited persons\u2014which largely had been restricted to certain criminals\u2014the GCA augmented the criminal penalties available for violations and established procedures for obtaining relief from firearm disabilities. ", "Since the GCA's passage, intervening legislation has amended the regulatory regime significantly. For instance, the Firearm Owners' Protection Act of 1986 (FOPA) carved out exceptions to the felony firearm prohibition for certain crimes, repealed certain regulations pertaining to ammunition, expressly prohibited the creation of a national gun registry, added additional categories of persons who are barred from possessing firearms, prohibited the private possession of machineguns manufactured on or after the date of FOPA's enactment, and further expanded the available criminal penalties for violations, among other things. Additionally, the Brady Handgun Violence Protection Act of 1993 (Brady Act) mandated that the Attorney General create a background check system\u2014the National Instant Criminal Background Check System (NICS)\u2014which queries various government records that could indicate that a prospective transferee is ineligible to receive a firearm. The Brady Act further required that a background check be run for many, but not all, proposed firearms transfers before they can be completed. And the Gun-Free School Zones Act added a provision to the GCA that, subject to certain exceptions, bans firearms in statutorily defined school zones. ", "In 1994, Congress also imposed a 10-year moratorium on the manufacture, transfer, or possession of \"semiautomatic assault weapons,\" as defined in the act, and large capacity ammunition feeding devices, but the ban was permitted to expire in 2004. Finally, some piecemeal legislation in recent years has sought to protect lawful firearm owners, manufacturers, or dealers in certain ways. For example, the Protection of Lawful Commerce in Arms Act, enacted in 2005, grants civil immunity to firearm manufacturers, dealers, and importers when weapons made or sold by them are misused by others. "], "subsections": []}, {"section_title": "Federal Statutory Framework", "paragraphs": ["Firearms regulation in the United States is an area of shared authority among federal, state, and local governments. Individual states have enacted a variety of laws relating to the possession, registration, and carrying of firearms, among other things. However, federal law establishes a baseline regulatory framework that state and local laws may not contradict. Thus, the current collection of federal firearms laws may be thought of as a regulatory floor that sets out, at the federal level, the minimum requirements for lawful manufacture, sale, and possession of firearms. The two principal federal firearms laws currently in force are the NFA and the GCA, as amended. The Department of Justice's Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) is the principal agency charged with administering these laws. "], "subsections": [{"section_title": "National Firearms Act of 1934", "paragraphs": ["The NFA was the first major piece of federal legislation regulating the sale and possession of firearms. Through a taxation and registration scheme, the law sought to curb the rise of violence connected to organized crime by targeting the types of weapons that (at the time of passage) were commonly used by gang members. "], "subsections": [{"section_title": "Weapons Covered", "paragraphs": ["In its current form, the NFA regulates the manufacture, transfer, and possession of certain enumerated weapons deemed to be \"particularly dangerous\" : (1) short-barreled shotguns, defined as having a barrel length under 18 inches; (2) short-barreled rifles, defined as having a barrel length under 16 inches; (3) modified shotguns or rifles with an overall length under 26 inches; (4) machineguns, defined as weapons\u2014including frames or receivers\u2014that shoot \"automatically more than one shot, without manual reloading, by a single function of the trigger,\" as well as parts intended to convert other weapons into machineguns; (5) silencers; (6) \"destructive devices,\" including bombs, grenades, rockets, and mines; and finally (7) a catchall category of \"any other weapon\" that is \"capable of being concealed on the person from which a shot can be discharged through the energy of an explosive,\" among other things. The NFA explicitly exempts from regulation antique firearms and other devices that are primarily \"collector's item[s]\" not likely to be used as weapons."], "subsections": []}, {"section_title": "Registration and Identification", "paragraphs": ["All NFA firearms that are produced or imported\u2014as well as their manufacturers, dealers, or importers\u2014must be authorized by and registered with the Attorney General (previously, the Secretary of the Treasury). Any transfer of an NFA firearm must likewise be accompanied by a registration in the name of the transferee. The registrations of all NFA firearms not in the possession or under the control of the United States are maintained in a central registry, and all persons possessing NFA firearms must retain proof that such firearms have been registered.", "Any NFA firearm that is produced or imported must be identifiable, with firearms that are not destructive devices bearing, among other things, a serial number that \"may not be readily removed, obliterated, or altered.\""], "subsections": []}, {"section_title": "Taxation", "paragraphs": ["Every importer, manufacturer, and dealer in NFA firearms must pay an annual \"special (occupational) tax for each place of business,\" and a separate tax must also be paid for each firearm made. Upon transfer of an NFA firearm, the transferor is subject to a tax of a varying amount depending on whether the firearm to be transferred falls under the catchall category of \"any other weapon.\" A number of tax exemptions exist. Most notably, firearms made by or transferred to the United States, any state, any political subdivision of a state, or any official police organization engaged in criminal investigations are exempted, as are firearms made by or transferred between qualified manufacturers or dealers."], "subsections": []}, {"section_title": "Penalties", "paragraphs": ["A person who violates or fails to comply with the requirements of the NFA is subject to a fine of up to $10,000, imprisonment for up to 10 years, or both. Firearms involved in violations are also subject to forfeiture.", "To be criminally culpable for a violation of the NFA, one generally must have knowledge of the features of the firearm that make it a \"firearm\" under the statute, but one need not know that such a firearm is unregistered. ", "As originally enacted, a person compelled by the NFA to disclose possession through registration could then be prosecuted if the registration reflected that the person was barred by other legal provisions from possessing firearms. However, the Supreme Court ruled in Haynes v. United States that this forced disclosure of potentially incriminating information violated the Fifth Amendment to the U.S. Constitution, which provides in part that no person \"shall be compelled in any criminal case to be a witness against himself[.]\" Haynes prompted Congress to amend the statute to make clear, among other things, that no information from registration records that are required to be submitted or retained by a natural person may be used as evidence against that person in a criminal proceeding for a violation of law occurring prior to or concurrently with the filing of the records, unless the prosecution relates to the furnishing of false information. As amended, the Court has rejected a subsequent challenge to the NFA on Fifth Amendment grounds. "], "subsections": []}]}, {"section_title": "Gun Control Act of 1968", "paragraphs": ["Congress passed the GCA in the wake of the assassinations of Dr. Martin Luther King Jr. and Senator Robert Kennedy to \"keep firearms out of the hands of those not legally entitled to possess them because of age, criminal background, or incompetency and to assist law enforcement authorities in the states and their subdivisions in combating the increasing prevalence of crime in the United States.\" Among other things, the statute represented \"a Congressional attempt to stem the traffic in dangerous weapons being used in an increasing number of crimes involving personal injury.\" As enacted, the GCA expanded the existing licensing scheme for the manufacture, importation, and sale of firearms and augmented a previously enacted prohibition on the possession of firearms by certain categories of persons (including felons and \"mental defective[s]\"). It also supplemented available criminal penalties and established procedures for obtaining relief from firearms disabilities.", "The GCA today is not a single statute but rather a complex statutory regime that has been supplemented regularly in the decades since its inception. Broadly speaking, the GCA, as amended, regulates the manufacture, transfer, and possession of firearms, extending to categories of weapons that fall outside the scope of the NFA. In general terms, the GCA sets forth who can\u2014and cannot\u2014sell, purchase, and possess firearms; how those sales and purchases may lawfully take place; what firearms may lawfully be possessed; and where firearm possession may be restricted. Major components of the GCA and related supplementing statutes are discussed below, focusing on (1) licensing requirements for firearm manufacturers and dealers, (2) prohibitions on firearm possession, (3) background checks for firearm purchases, (4) interstate firearm sales and transfers, and (5) penalties."], "subsections": [{"section_title": "Licensing of Firearm Manufacturers and Dealers", "paragraphs": ["The GCA regulates the manufacture and sale of firearms by requiring persons and organizations \"engaged in the [firearms] business\"\u2014that is, importers, manufacturers, and dealers\u2014to obtain a license from the federal government and pay an annual fee. These persons and entities are commonly known as Federal Firearm Licensees, or FFLs. Applicants must meet various requirements to become FFLs, including being at least 21 years of age, maintaining a premises from which to conduct business that meets safety standards, and certifying compliance with applicable state and local laws. Upon licensing, FFLs are subject to recordkeeping and reporting obligations with respect to the disposition of firearms to non-FFLs and must identify imported or manufactured firearms by means of a serial number, among other things. FFLs also must comply with background-check requirements and certain other transfer restrictions discussed in more detail below. An FFL who willfully violates any provision of the GCA or implementing regulations may, after notice and opportunity for hearing, have his or her license revoked. In this context, a \"willful\" violation means that the FFL purposefully disregarded or was plainly indifferent to his or her known legal obligation. ", "A key question with respect to the GCA's licensing regime is what it means to be \"engaged in the [firearms] business.\" Manufacturers are considered to be \"engaged in the business\" if they \"devote time, attention, and labor to manufacturing firearms as a regular course of trade or business with the principal objective of livelihood and profit through the sale or distribution of firearms manufactured.\" And dealers are considered to be \"engaged in the business\" if they \"devote[] time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms.\" A person is not \"engaged in the business\" of dealing in firearms, however, if that person \"makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms.\" Accordingly, if a person falls within this definitional exclusion, he or she is not subject to the licensing regime and other FFL requirements, such as conducting background checks.", "There have been a number of court decisions shedding further light on what it means to be \"engaged in the business\" of dealing in firearms under the GCA, which is a fact-specific question that is dependent on the particular circumstances of the case. Even though the statute mandates that, to require a license, the dealer's principal objective in selling firearms must be livelihood and profit, courts have recognized that firearms sales need not be the person's sole source of income or main occupation. Instead, relevant factors include (1) the quantity and frequency of firearms sales; (2) sale location; (3) how the sales occurred; (4) the defendant's behavior before, during, and after the sales; (5) the type of firearms sold and prices charged; and (6) the defendant's intent at the time of the sales. At least one federal appellate court appears to apply a broad standard, requiring the government to prove only that the defendant holds himself out as a source of firearms. Furthermore, because the number of firearms sold is typically only one of many factors courts consider, convictions under the GCA for unlawfully dealing in firearms without a license have been sustained for as few as two or four firearms sales."], "subsections": []}, {"section_title": "Prohibitions on Firearm Possession", "paragraphs": ["The GCA regulates firearm possession in several ways. Principally, the statute establishes categories of persons who, because of risk-related characteristics, may not possess firearms. Possession of certain types of firearms, as well as possession of firearms in certain locations , also are restricted."], "subsections": [{"section_title": "Prohibited Persons", "paragraphs": ["Under the GCA, it is unlawful for a person who falls into at least one of nine categories to ship, transport, possess, or receive any firearms or ammunition. Specifically, a person is prohibited if he or she", "is a felon (i.e., someone who has been convicted in any court of a crime punishable by a term of imprisonment exceeding one year); is a fugitive from justice; is an unlawful user of, or is addicted to, any controlled substance; has been adjudicated as a \"mental defective\" or committed to a mental institution; has been admitted to the United States pursuant to a nonimmigrant visa or is an unlawfully present alien; has been dishonorably discharged from the Armed Forces; has renounced his or her U.S. citizenship; is subject to a court order preventing that person from harassing, stalking, or threatening an intimate partner (or that partner's child) or engaging in other conduct that would cause the partner to reasonably fear bodily injury to himself or herself or the child; or has been convicted in any court of a misdemeanor crime of domestic violence.", "A separate GCA provision prohibits anyone\u2014not just FFLs\u2014from selling or otherwise disposing of a firearm if that person knows or has \"reasonable cause\" to believe that the prospective recipient fits into any of the above categories. ", "Additionally, a person under indictment for a crime punishable by a term of imprisonment exceeding one year is not barred by the GCA from possessing a firearm but may not receive, ship, or transport a firearm. In other words, a person who has been charged with a felony need not forfeit already-owned firearms, but he or she may not acquire new ones while the charges are pending. The GCA also places significant restrictions on the transfer to, and possession of, firearms by persons under the age of 18.", "Because a number of the terms in the individual prohibitions of Section 922(g) are not defined by statute, the contours of some of the prohibitions have had to be fleshed out by regulations and judicial construction. Some of the interpretative issues raised with respect to these prohibitions are discussed briefly below.", "\" Possession \" by a prohibited person . For possession of a firearm by a prohibited person to be unlawful, that possession may be \"actual\" or \"constructive.\" Actual possession occurs when a person exercises physical control over a firearm. Constructive possession exists when a person has the power to exercise dominion and control over a firearm directly or through others. For example, actual possession may be found when, during a traffic stop, a police officer pats down the driver and discovers a firearm in the driver's waistband. Constructive possession, on the other hand, may be found when, during a traffic stop, an officer observes a firearm not on the driver's person but elsewhere inside the vehicle. ", "Although proximity to a firearm, alone, is insufficient to establish constructive possession, the totality of the circumstances\u2014including other evidence of a connection to the firearm, movements implying control, or the defendant's activities before and after the discovery\u2014is used to establish constructive possession.", "Persons prohibited due to a conviction for a felony or misdemeanor crime of domestic violence \"in any court . \" The prohibitions on possession of a firearm by a person convicted of a felony or a misdemeanor crime of domestic violence \"in any court,\" which are among the most frequently enforced prohibitions in the statute, raise the question of what constitutes \"any court.\" Initially, federal courts took an expansive view of the term. For instance, in holding that a military court-martial is a court within the meaning of the GCA, a 1997 opinion from the Seventh Circuit Court of Appeals used the dictionary definition of the word any :", "Looking to section 922(g)(1), we find nothing that defines or limits the term \"court,\" only a requirement that a conviction have been \"in any court\" in the course of prohibiting possession of firearms by a felon. Certainly \"any court\" includes a military court, the adjective \"any\" expanding the term \"court\" to include \"one or some indiscriminately of whatever kind\"; \"one that is selected without restriction or limitation of choice\"; or \"all.\" ", "Additionally, some federal courts had concluded that a conviction in \"any court,\" for the purposes of determining a firearm disability, included convictions in foreign courts. But in resolving a circuit split over this issue, the Supreme Court interpreted the phrase to cover only domestic convictions in its 2005 ruling Small v. United States . In a 5-4 decision, the Court adopted a more limited interpretation of the GCA's reference to \"any\" court than employed by the Seventh Circuit and other lower courts. In reaching its conclusion, the Court applied the legal presumption that \"Congress ordinarily intends its statutes to have domestic, not extraterritorial application.\" The Court ruled that this presumption against extraterritorial application was particularly relevant to the GCA, given the many potential differences between foreign and domestic convictions and \"the potential unfairness of preventing those with inapt foreign convictions from possessing guns.\" The Court additionally reasoned that nothing in the GCA's text or legislative history suggests that the act was intended to allow foreign convictions to give rise to a firearms disability.", "Although the Supreme Court's opinion in Small abrogated lower court rulings holding that foreign convictions serve as a predicate offense for the GCA's firearm ban for felons, the opinion did not directly disturb earlier rulings holding that U.S. military convictions count for the ban. And a conviction by a court-martial does not appear to raise any of the concerns mentioned by the Supreme Court in Small about foreign convictions. Federal courts have not found tension with Small when analyzing the related issue of whether a court-martial conviction is encompassed by the term any court in statutes that provide heightened penalties for certain repeat offenders. For instance, the Eighth Circuit opined that courts-martial proceedings maintain a connection to the U.S. government, given that they were created by Congress and are governed by federal statute. And the Fourth Circuit reasoned that, although there are some differences between courts-martial and civilian courts, they do not \"rise to the level of contrasts between domestic and foreign courts that Small highlighted.\" Accordingly, a conviction by a court-martial for a crime punishable by a term exceeding one year or a misdemeanor crime of domestic violence likely would qualify as a conviction in \"any court\" for the purposes of the GCA's firearm disqualifiers.", "Prohibition applicable to nonimmigrant visa holders . With respect to the prohibition for aliens admitted to the United States pursuant to nonimmigrant visas, the terms of the provision do not explicitly prohibit firearm possession for aliens otherwise admitted (e.g., those admitted on an immigrant visa, through the Visa Waiver Program, as refugees, or without a visa for brief visits for business or tourism by Canadian citizens and certain residents of the Caribbean islands). Initially, ATF interpreted the GCA provision barring firearm possession for aliens admitted on nonimmigrant visas as encompassing all foreign nationals in nonimmigrant status in the United States, including those categories of nonimmigrant aliens who do not need a visa to enter the United States. ATF reasoned that Congress intended for the prohibition to cover all nonimmigrant aliens, given that a nonimmigrant visa is needed for fewer than 50% of nonimmigrants entering the United States and merely \"facilitates travel\" rather than conferring nonimmigrant status. However, the DOJ's Office of Legal Counsel (OLC) overruled ATF's interpretation in 2011. \"The text is clear,\" OLC said, \"the provision applies only to nonimmigrant aliens who must have visas to be admitted , not to all aliens with nonimmigrant status.\" Additionally, OLC rejected ATF's contention that \"applying the [firearm] prohibit[ion] to only a particular subset of nonimmigrants would produce 'irrational' results.\" Rather, OLC opined that Congress could have rationally concluded that nonimmigrants eligible for admission without a visa are less of a public safety risk or that nonimmigrants on brief visits to the United States may be less likely to purchase a firearm. In response, ATF issued a final rule imposing the firearm prohibition on only those nonimmigrants admitted to the United States with a nonimmigrant visa. ATF further announced that \"[n]onimmigrant aliens lawfully admitted to the United States without a visa, pursuant either to the Visa Waiver Program or other exemptions from visa requirements, will not be prohibited from \u2026 possessing firearms.\"", "Prohibition applicable to those who unlawfully use or are addicted to a controlled substance . The prohibition on firearm possession by those who unlawfully use or are addicted to controlled substances also raises the question of what it means to be an \"unlawful user\" or \"addicted.\" Regulations define the terms as including those who have \"lost the power of self-control with reference to the use of [a] controlled substance,\" as well as \"current user[s]\" of a controlled substance \"in a manner other than as prescribed by a licensed physician.\" The regulations make clear that one need not be using a controlled substance \"at the precise time\" a firearm is sought so long as use has occurred \"recently enough to indicate that the individual is actively engaged in such conduct.\" Prosecutions and court decisions appear to focus on the term unlawful user , which establishes a lower disability threshold than \"addict[].\" Cases interpreting the term \"typically discuss two concepts: contemporaneousness and regularity,\" requiring that there be some \"pattern\" and \"recency\" of controlled-substance use. For this reason, the prohibition appears to be temporary\u2014that is, one may \"regain his right to possess a firearm simply by ending his drug abuse.\"", "Prohibition applicable to a person \"adjudicated as a mental defective\" or \"committed to a mental institutio n.\" The GCA is likewise silent as to the meaning of the terms adjudicated as a mental defective and committed to a mental institution for purposes of that prohibition. The term adjudicated as a mental defective has been interpreted in federal regulations, however, as:", "(a) A determination by a court, board, commission, or other lawful authority that a person, as a result of marked subnormal intelligence, or mental illness, incompetency, condition, or disease:", "(1) Is a danger to himself or to others; or ", "(2) Lacks the capacity to manage his own affairs.", "(b) The term shall include\u2014(1) a finding of insanity by a court in a criminal case, and (2) those persons found incompetent to stand trial or found not guilty by lack of mental responsibility [under the Uniform Code of Military Justice].", "Prior to the issuance of the regulatory definition, at least one court had construed the term mental defective narrowly, encompassing only those who have \"never possessed a normal degree of intellectual capacity\" and excluding persons with \"faculties which were originally normal [but which] have been impaired by mental disease.\" ", "The term committed to a mental institution has also been interpreted in regulations as including a \"formal commitment\" for \"mental defectiveness,\" mental illness, or \"other reasons, such as drug use\" by a \"court, board, commission, or other lawful authority\" that is \"involuntary.\" Whether a person has been formally and involuntarily committed appears to be fact-specific and dependent on state law. "], "subsections": []}, {"section_title": "Prohibited Firearms", "paragraphs": ["Federal law generally does not bar the possession or sale of particular types of firearms, with two major caveats currently in effect. First, the Firearm Protection Owners' Act of 1986 amended the GCA to prohibit the transfer and possession of machineguns. This prohibition does not apply, however, to (1) the transfer to or from, or possession by (or under the authority of) federal or state authorities; and (2) the transfer or possession of a machinegun lawfully possessed before the effective date of the act (May 19, 1986). In response to the 2017 mass shooting in Las Vegas, ATF recently amended the regulatory definition of machinegun for purposes of the NFA and GCA to include bump-stock-type devices, i.e., devices that \"allow a shooter of a semiautomatic firearm to initiate a continuous firing cycle with a single pull of the trigger.\" The amended definition is effective as of March 26, 2019, rendering possession of bump-stock-type devices illegal (subject to exceptions) as of that date pursuant to the machinegun prohibition.", "Second, the Undetectable Firearms Act of 1988 (UFA) banned the manufacture, importation, possession, transfer, or receipt of firearms that are undetectable by x-ray machines or metal detectors at security checkpoints. The UFA has recently come under renewed scrutiny amid litigation over the dissemination of 3D-printed firearm designs that potentially could undermine the statute's requirements. ", "Though most other types of firearms are lawful, possession of particular firearms may be prohibited based on external factors or the status of the possessor. For instance, it is unlawful to knowingly receive, possess, conceal, store, barter, sell, dispose of, or transport in interstate or foreign commerce any stolen firearm or stolen ammunition. Receipt, possession, and transportation of firearms that have had the importer's or manufacturer's serial number removed or altered are likewise prohibited. ", "Additionally, juveniles\u2014that is, persons under 18 years of age\u2014are barred from knowingly possessing handguns and handgun ammunition, and others may not knowingly transfer such items to them. However, exception is made for, among other things, temporary transfers in the course of employment, ranching or farming activities or for target practice, hunting, or a safety course; possession in the line of duty by juvenile members of the Armed Forces or national guard; transfers of title by inheritance; and possession in defense of the juvenile or another against an intruder into certain residences. ", "Beyond firearms themselves, the GCA prohibits any person from manufacturing or importing armor-piercing ammunition and any manufacturer or importer from selling or delivering such ammunition unless (1) the ammunition is for the use of the U.S. government, a state, or a political subdivision of a state; (2) the ammunition is to be exported; or (3) the ammunition is to be tested or used for experimentation as authorized by the Attorney General. A person who possesses armor-piercing ammunition with a firearm \"during and in relation to the commission of a crime of violence or drug trafficking crime\" is also subject to separate criminal sentencing provisions. Finally, a person who has been convicted of a felony crime of violence is barred from purchasing, owning, or possessing body armor unless the person has obtained prior written certification from his or her employer that the body armor is needed \"for the safe performance of lawful business activity\" and the armor's use is limited to the course of such performance. "], "subsections": []}, {"section_title": "Prohibited Places", "paragraphs": ["The GCA prohibits the possession of firearms in certain locations. For instance, subject to exceptions, firearms may not be possessed in a \"Federal facility,\" defined as a building (or part of a building) owned or leased by the federal government where federal employees are regularly present for performing their official employment. Additionally, loaded firearms are largely banned on federal land managed by the Army Corps of Engineers with exceptions for law enforcement, certain hunting and fishing activities, use at authorized shooting ranges, and with permission from the district commander. Firearms may generally be carried on most other kinds of federal lands, however, so long as the carrier is not otherwise prohibited by federal law from possessing a firearm and is complying with relevant local firearm laws. ", "The Gun-Free School Zones Act (GFSZA) also amended the GCA to prohibit the knowing possession or discharge of a firearm in a school zone subject to exceptions for law enforcement and possession or discharge on private property not part of school grounds, among other things. As originally enacted, the GFSZA prohibited possession or discharge of any firearm in a school zone. The Supreme Court ruled in United States v. Lopez , however, that such a prohibition exceeded Congress's constitutional authority under the Commerce Clause. In response, Congress amended the statute in 1996 to make clear that it applies only to firearms that have \"moved in or that otherwise affect[] interstate or foreign commerce.\" Though the Supreme Court has not reconsidered the amended GFSZA, lower courts have generally upheld it on the basis of the added textual link to commerce. "], "subsections": []}, {"section_title": "Exceptions and Relief from Disability", "paragraphs": ["Several exceptions are set out in 18 U.S.C. \u00a7 925 to the firearm possession and transfer restrictions found elsewhere in the GCA. These exceptions primarily relate to firearms intended for the use of federal, state, or local governments or active duty military personnel. But Section 925 also authorizes a person who is barred by the GCA from possessing, transporting, or receiving firearms or ammunition to \"make application to the Attorney General for relief\" from the disability. The Attorney General has discretion to grant relief if the applicant establishes \"to his satisfaction\" that relief would not be contrary to the public interest and that the \"circumstances regarding the disability, and the applicant's record and reputation, are such that the applicant will not be likely to act in a manner dangerous to public safety.\" Review of the Attorney General's decision is available in federal district court. This relief-from-disability process has been essentially defunct since 1992, however, as Congress has annually included a provision in ATF appropriations measures prohibiting the expenditure of funds to act on petitions by individuals.", "Nevertheless, the NICS Improvement Amendments Act of 2007 (NIAA) established, as relevant here, alternative mechanisms for obtaining relief from one of the GCA's firearm disabilities: the disability based on adjudication as a \"mental defective\" or commitment to a mental institution. Under NIAA, federal departments or agencies making determinations pertinent to that disability\u2014for example, the Department of Veterans Affairs (VA) \u2014must establish programs permitting affected persons to apply for relief. Applications must be acted on within one year, and judicial review is available. Further, the statute encourages states to create similar programs through conditional grants. If an application for relief is granted under one of these programs, the adjudication or commitment \"is deemed not to have occurred\" for purposes of the GCA, meaning that the firearm prohibition no longer applies. As of December 2017, some three dozen states had enacted qualifying relief programs."], "subsections": []}]}, {"section_title": "Background Checks for Firearm Purchases", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The Brady Act requires FFLs\u2014but not private parties who make occasional firearm sales from personal collections or as a hobby\u2014to conduct background checks on prospective firearm purchasers who are not licensed dealers themselves in order to ensure that the purchasers are not prohibited from acquiring firearms under federal or state law. To implement the Brady Act, the FBI created the National Instant Criminal Background Check System (NICS), which launched in 1998. Between the enactment of the Brady Act and the launch of NICS, a set of interim provisions required background checks to be conducted through \"the chief law enforcement officer of the place of residence of the transferee,\" but the Supreme Court struck down those provisions as an unconstitutional usurpation of state executive prerogatives. Today, the NICS background check is completed either by a state \"point of contact\" (in states that have voluntarily agreed to provide that service) or, otherwise, by the FBI.", "Through NICS, FFLs can determine whether a prospective firearm purchaser is disqualified from receiving a firearm. NICS is comprised of three FBI-maintained databases", "The National Crime Information Center Database (NCIC) contains crime data related to persons and property, including persons subject to protective orders, fugitive records, and aliens who have been deported or are deportable because of committing certain crimes. The Interstate Identification Index System (III) contains criminal history information for persons who have been arrested or indicted for any federal or state felony or serious misdemeanor. The NICS Index was created solely for NICS checks and is a catchall index housing records that do not fit under NCIC or III, including mental health and immigration records.", "Because the three NICS databases rely on record submissions from multiple federal entities and voluntary submissions from individual states, they are not comprehensive catalogues of the records that could identify a person as being prohibited from possessing or purchasing a firearm. As discussed below, Congress has sought on multiple occasions to improve the processes by which records are collected and to make the databases more comprehensive. ", "Generally, the NICS check will quickly tell the dealer whether the sale may or may not proceed, or if it must be delayed for further investigation. If a dealer receives a response that the sale must be delayed, and the NICS check does not further alert the dealer as to whether the prospective purchaser is disqualified within three business days, the sale may proceed at the dealer's discretion. However, the FFL must still verify the transferee's identity by examining a valid identification document. The extent to which NICS examiners continue to investigate delayed requests after the three-day period is unclear, but if an FFL receives a \"denied\" response after the third day and after the firearm has already been transferred, the FFL \"should notify\" the NICS Section of ATF that the transfer was completed.", "An FFL who receives a NICS response denying a transfer will not see the reason for the denial, but the prospective transferee may request the reason from the denying agency (either the FBI or the state or local agency in a point-of-contact state). The denying agency must provide the reason or reasons, in writing, within five business days of receiving the request.", "Prospective transferees who are denied firearms on the basis of a NICS background check have multiple avenues to challenge the denial. First, the prospective transferee may challenge the accuracy of a record on which the denial was based or assert that his or her right to possess a firearm has been restored by appealing to the denying agency. Second, if that agency cannot resolve the appeal, the prospective transferee may apply for correction of the record directly to the agency that originated the record. If a record is corrected as the result of an appeal, the prospective transferee and relevant agencies are to be notified, and the record is to be corrected in NICS. At this point, the contested firearm transfer may go forward if there are no other disqualifying records, though the FFL will be required to query NICS again if too much time has elapsed since the initial background check. Finally, as an alternative to the agency appeals process, a prospective firearm transferee may contest the accuracy or validity of a disqualifying record in court by bringing an action against the United States or the relevant state or political subdivision, as applicable.", "Although NICS records of approved firearms transfers containing transferees' identifying information are destroyed within 24 hours, transferees who may be subject to repeated, erroneous denials because of similarities in name or identifying information to prohibited persons may consent to the FBI's retention of their personal information in a \"Voluntary Appeal File\" for use in preventing \"the future erroneous denial or extended delay by the NICS of a firearm transfer.\""], "subsections": []}, {"section_title": "NICS Improvement Amendments Act of 2007 (NIAA)", "paragraphs": ["In an attempt to improve access to records concerning persons prohibited from possessing or receiving firearms because of mental illness, restraining orders, and misdemeanor domestic violence convictions, Congress passed the NIAA in early 2008. With respect to federal records, the statute (among other things) imposes a requirement that federal departments and agencies provide information in records pertaining to prohibited persons on a quarterly basis. ", "With respect to state records, NIAA authorizes monetary incentives and penalties tied to submitting records to NICS. First, a state that provides at least 90% of its relevant records is eligible under NIAA for a waiver of a 10% matching requirement connected to an existing state grant program for upgrading criminal history and criminal justice record systems (among other things). To remain eligible for the waiver, a state must biannually certify that at least 90% of records have been made electronically available to the Attorney General. As another incentive, the statute directs the Attorney General to withhold, subject to waiver, up to 5% of funds available from the Edward Byrne Memorial Justice Assistance Grant Program (which provides federal funds for local law enforcement initiatives) if a state provides less than 90% of its available prohibiting records. NIAA also establishes additional grant programs that provide states with money to establish or update information and identification technologies for firearms eligibility determinations, automate record systems, and transmit to NICS the targeted prohibiting records."], "subsections": []}, {"section_title": "Fix NICS Act of 2018", "paragraphs": ["The recently enacted Fix NICS Act (Fix NICS) aims to further increase federal and state submission of prohibiting records to NICS through additional incentive and accountability measures. At the federal level, departments and agencies must semiannually certify whether they are submitting all prohibiting records on at least a quarterly basis. Federal departments and agencies also must each create an \"implementation plan\" within one year that is designed to \"ensure maximum coordination and automated reporting or making available of records to the Attorney General,\" and \"the verification of the accuracy of those records,\" with annual benchmarks. The Attorney General is to publish and semiannually submit to Congress the names of departments and agencies that fail to submit the required certification, fail to certify compliance with the reporting obligation, fail to create an implementation plan, or fail to obtain substantial compliance with the implementation plan. Political appointees within a federal department or agency that fail to either certify compliance or substantially comply with an implementation plan will be ineligible for bonus pay.", "At the state level, Fix NICS reauthorizes some of the grant programs established or utilized by NIAA and ties monetary incentives and preferences under those programs to state creation and substantial compliance with implementation plans like those required of federal departments and agencies. Names of states that do not achieve substantial compliance with their implementation plans are to be published by the Attorney General, while those states determined to be in substantial compliance will receive affirmative preference in Bureau of Justice Assistance discretionary grant applications."], "subsections": []}]}, {"section_title": "Interstate Firearm Sales and Transfers", "paragraphs": ["The GCA strictly limits the interstate transfer of firearms to non-FFLs. This limitation takes several forms. First, a non-FFL is barred from directly selling or transferring any firearm to any person (other than an FFL) whom the transferor knows or has reason to believe is not a resident of the state in which the transferor resides. Second, FFLs are prohibited from selling or shipping firearms directly to non-FFLs in other states, but FFLs may make in-person, over-the-counter sales of long guns (i.e., shotguns or rifles) to qualified individuals who are out-of-state residents so long as the sales fully comply with the legal conditions of both states. Handguns may be sold only to persons who are residents of the state in which the FFL's premises are located. Non-FFLs who lawfully purchase long guns from out-of-state dealers may transport those firearms back into their states of residence, but such persons are otherwise prohibited from directly transporting into or receiving in their states of residence any firearms purchased or obtained outside the state. ", "Despite the substantial restrictions on interstate firearm sales, federal law ensures that lawful firearm owners may transport their weapons between jurisdictions where it is legal to \"possess and carry\" them without incurring criminal liability under inconsistent state or local laws so long as the firearms are transported in a specified manner. Current or retired law enforcement officers who meet certain requirements are also entitled to carry concealed firearms throughout the United States regardless of restrictions under state or local law."], "subsections": []}, {"section_title": "Penalties", "paragraphs": ["Violations of many of the prohibitions contained in the GCA and supplementing statutes are punishable as felonies, subjecting violators to criminal fines and statutory imprisonment ranges of varying lengths. Increased penalties are also tied to transporting or receiving firearms in interstate or foreign commerce with intent to use the firearms (or with knowledge they will be used) to commit separate felony crimes, as well as using, carrying, or possessing firearms in connection with \"any crime of violence or drug trafficking crime.\"", "A person thrice convicted of a \"violent felony or a serious drug offense,\" committed on different occasions, who subsequently possesses or receives a firearm unlawfully is likewise subject to a heightened mandatory minimum sentence of imprisonment. However, the Supreme Court has partially struck down as unconstitutionally vague the definition of the term violent felony , which includes (among other things) any offense involving \"conduct that presents a serious potential risk of physical injury to another.\" In response, past Congresses have considered legislation that would link the heightened penalty instead to prior \"serious felony\" convictions, with the term serious felony being tied to the authorized or imposed sentence of imprisonment. ", "In a 1986 amendment, FOPA added an explicit mens rea , or intent, requirement to the GCA's penalty provisions. Accordingly, the GCA now imposes its criminal penalties for either knowing or willful violations, depending on the provision. A violation is made knowingly when the person knows the facts that establish the offense. Under this standard, the government need not prove that the defendant knew his behavior was illegal. This is so, according to the Supreme Court, because of the \"background presumption that every citizen knows the law,\" thus making it \"unnecessary to adduce specific evidence to prove that 'an evil-meaning mind' directed the 'evil-doing hand.'\" Further, to prosecute unlawful possession of a firearm under 18 U.S.C. \u00a7 922(g), the federal courts of appeals have consistently concluded that the government must prove only that the defendant knowingly possessed a firearm but not that he had knowledge of the circumstances disqualifying him from possessing a firearm. For example, a prosecutor may prove a knowing violation of 18 U.S.C. \u00a7\u00a0922(g)(1)\u2014the GCA provision that bars felons from possessing firearms\u2014by establishing only that the defendant knew that he possessed a firearm but not that he knew of his status as a felon at the time he possessed the firearm. However, in January 2019, the Supreme Court granted certiorari in Rehaif v. United States in order to determine whether this interpretation of the GCA is correct or whether the \"knowing\" requirement must apply to both possession and disqualifying status. Argument in the case is set for April 23, 2019. ", "For willful violations, there is a heightened intent requirement: A violation is willful when the actor knows that the conduct is unlawful. However, for the act to be willful, the actor need not have specific knowledge of provisions of the law he is breaking. Instead, the person must act only \"with knowledge that his conduct [is] unlawful.\"", "Depending on proof of the requisite mens rea , firearms or ammunition involved in certain violations of the GCA or other federal criminal laws are subject to seizure and forfeiture."], "subsections": []}]}]}, {"section_title": "Constitutional Considerations", "paragraphs": ["Numerous constitutional considerations may inform congressional proposals to modify the current framework for regulating firearms sales and possession. Although Congress has broad constitutional authority to regulate firearms, any firearm measure must be rooted in one of Congress's enumerated powers. In enacting firearms laws, Congress has typically invoked its tax, commerce, and spending powers. Still, when exercising those enumerated powers, Congress must be mindful of other constitutional restraints, such as those flowing from the Second Amendment, the Fifth Amendment's Due Process Clause, and principles of federalism. This section provides an overview of the primary powers Congress has invoked to enact firearms measures and then addresses the constitutional constraints that independently could limit Congress's ability to regulate firearms. "], "subsections": [{"section_title": "Constitutional Source of Authority to Enact Firearms Measures", "paragraphs": [], "subsections": [{"section_title": "Tax Power", "paragraphs": ["Article I of the Constitution, which enumerates powers of Congress, declares that \"[t]he Congress shall have Power To lay and collect Taxes.\" This broad power enables Congress to tax many activities that it could not directly regulate. Still, \"[e]very tax is in some measure regulatory\" by creating \"an economic impediment to the activity taxed as compared with others not taxed.\" Because a tax can shape behavior, when imposing a tax Congress may be motivated by an objective other than raising revenue, like limiting the supply of certain firearms. And provisions of a tax measure that go beyond the actual collection of the tax, such as penalty provisions, are considered lawful so long as they are reasonably related to the exercise of Congress's tax power and not \"extraneous to any tax need.\" Congress's tax power is not without limitation, however. While the Supreme Court often will \"decline[] to closely examine the regulatory motive or effect of revenue-raising measures,\" the Court has indicated that it will step in when a tax measure is \"so punitive\" that it \"loses its character as [a tax] and becomes a mere penalty with the characteristics of regulation and punishment.\"", "Congress invoked its tax power when enacting the NFA. Within a few years of its enactment, in 1937, the Supreme Court upheld the NFA as a lawful exercise of Congress's tax power in Sonzinsky v. United States . Notwithstanding the NFA's deterrent purpose, the Court opined that \"a tax is not any the less a tax because it has a regulatory affect.\" The Court further concluded that the NFA's registration requirements were \"obviously supportable as in aid of a revenue purpose,\" and, the Court added, the tax produced \"some revenue.\" More recently, in 2018 the Tenth Circuit, relying on Sonzinsky , upheld the NFA's taxing and registration scheme as a valid exercise of Congress's tax power in a challenge to the NFA's regulation of firearm silencers. The Tenth Circuit rejected the defendants' argument that the NFA, in modern times, is \"far more of a gun- control measure than a gun- tax measure.\" The defendants had principally argued that, because the NFA taxes collect no net revenue, \"the NFA's taxing purpose disappear[ed], leaving only its regulatory effect,\" thus rendering the tax unconstitutional. But the Tenth Circuit declined to create a heightened constitutional requirement for Congress's tax power that would require a tax to produce net revenue, pointing to the Supreme Court's continued emphasis, since Sonzinsky , on whether a tax measure collects \"some\" gross revenue, no matter how small. "], "subsections": []}, {"section_title": "Commerce Clause Power", "paragraphs": ["The Constitution grants Congress the power \"to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.\" The Commerce Clause, as interpreted by the Supreme Court, authorizes Congress to regulate three categories of activities related to interstate commerce: (1) \"channels\" of interstate commerce, like highways and hotels; (2) \"instrumentalities of interstate commerce, or persons or things in interstate commerce,\" such as motor vehicles and goods that are shipped; and (3) \"activities that substantially affect interstate commerce,\" which include intrastate activities (such as robbery) \"that might, through repetition elsewhere,\" substantially affect interstate commerce. ", "Congress has relied on the Commerce Clause as a constitutional basis for GCA provisions restricting the manufacture, import, sale, transfer, and possession of firearms, and the Supreme Court has reviewed a number of these regulations. Early cases mainly involved statutory interpretation, centering on what conduct the statutory prohibitions reached. Only the most recent case\u2014 United States v. Lopez \u2014directly addressed the scope of Congress's Commerce Clause power to regulate firearms. For example, in the 1971 ruling United States v. Bass , the Supreme Court analyzed the scope of a law enacted as part of Title VII of the Omnibus Crime Control and Safe Streets Act of 1968, which made it a federal crime for a felon to \"receive[], possess[], or transport[] in commerce o r affecting commerce ... any firearm.\" (A similar provision is found in the current version of the GCA. ) In Bass , the Court held that the language \"in commerce or affecting commerce\" applied to all three listed activities\u2014receiving, possessing, and transporting\u2014and not just the last one. In resolving the textual ambiguity this way, the Court in part relied on federalism principles (discussed in more detail infra ), reasoning that if the statute had reached \"mere possession,\" wholly untethered to interstate commerce, the provision would have \"dramatically intrud[ed] upon traditional state criminal jurisdiction.\" In light of the Court's interpretation of the statute, it declined to opine on whether the Commerce Clause could provide a basis for Congress to regulate the \"mere possession\" of a firearm. ", "A few years later, in Scarborough v. United States , the Supreme Court reviewed the same provision to determine when the firearm must travel in interstate commerce for the possession ban to apply to felons. The Court ultimately concluded that the criminal provision applied to any felon who possessed a firearm that had \"at some time\" traveled in interstate commerce. In rejecting the defendant's contention that the possession itself must be contemporaneous with interstate commerce, the Court pointed to contrary legislative intent. In particular, the Court concluded that the legislative history \"supports the view that Congress sought to rule broadly to keep guns out of the hands of those who have demonstrated that 'they may not be trusted to possess a firearm without becoming a threat to society,'\" without \"any concern with either the movement of the gun or the possessor or with the time of acquisition.\"", "Similarly, in Barrett v. United States , the Supreme Court analyzed the scope of the interstate commerce nexus in a GCA provision that made it unlawful for certain categories of persons, such as felons, \"to receive any firearm or ammunition which has been shipped or transported in interstate or foreign commerce.\" The Court concluded that the term to receive applies to the intrastate acquisition of a firearm if that firearm previously had been transported in interstate commerce (e.g., from the manufacturer to the distributor to the dealer). The Court reasoned that the language \"has been\" shipped or transported in interstate commerce \"denot[es] an act that has been completed\" and thus applies \"to a firearm that already has completed its interstate journey and has come to rest in the dealer's showcase at the time of its purchase and receipt by the felon.\" Finally, the Court commented that interpreting the provision to apply only to interstate receipts \"would remove from the statute the most usual transaction, namely, the felon's purchase or receipt from his local dealer,\" and that interpretation, in the Court's view, would contravene Congress's \"concern with keeping firearms out of the hands of categories of potentially irresponsible persons.\"", "Most recently, in its 1995 opinion United States v. Lopez , the Supreme Court reviewed\u2014and invalidated\u2014the GFSZA, which criminalized the possession of a firearm in a school zone but contained no explicit nexus to interstate commerce. The government had argued that firearm possession in a school zone may cause violent crime, which could affect the national economy by (1) handicapping the educational process, which would generate a \"less productive citizenry,\" and (2) spawning substantial financial losses \"spread throughout the population\" through insurance costs and the \"reduce[d] willingness of individuals to travel to areas within the country that are perceived to be unsafe.\" The Court rejected these arguments, opining that if the Commerce Clause could reach such activity, it essentially would authorize a federal police power, a constitutional power the Framers declined to give to the federal government. Without finding a substantial effect on interstate commerce, the Court further concluded that the law exceeded Congress's power under the Commerce Clause because \"[t]he Act neither regulate[d] a commercial activity nor contain[ed] a requirement that the possession be connected in any way to interstate commerce.\" Congress subsequently amended the provision to provide expressly that, for the possession of a firearm in a school zone to be a federal crime, the government must show that the firearm \"moved in or ... otherwise affects interstate or foreign commerce.\" This amended version of the statute has been upheld by lower courts against constitutional challenges. "], "subsections": []}, {"section_title": "Spending Power", "paragraphs": ["Article I grants Congress broad authority to enact legislation for the \"general welfare\" through its spending power. When invoking this power, Congress can place conditions on funds distributed to the states that require those accepting the funds to take certain actions that Congress otherwise could not directly compel the states to perform. Still, the Supreme Court has articulated several limitations on Congress's power to attach conditions to the receipt of federal funds\u2014namely, any condition", "must be written unambiguously, so that state lawmakers understand the full consequences of accepting or declining funds; must be germane to the federal interest in the particular program to which the money is directed; cannot induce the recipient states to engage in an activity that would independently violate the Constitution; and cannot be \"so coercive as to pass the point at which pressure turns into compulsion.\"", "Arguably, the most difficult limitation to glean is whether a spending condition is unduly coercive. Two Supreme Court opinions exploring the bounds within which Congress must stay offer some guidance. First, in South Dakota v. Dole , the Supreme Court upheld a 1984 congressional measure designed to encourage states to raise the minimum drinking age to 21. To achieve this result, Congress directed the Secretary of Transportation to withhold 5% of certain federal highway grant funds from states with a lower minimum drinking age. In upholding the spending condition, the Court concluded that a state stood to lose only \"a relatively small percentage of certain federal highway funds,\" which the Court further described as \"relatively mild encouragement.\" Second, and more recently, in National Federation of Independent Business v. Sebelius ( NFIB ), the Supreme Court struck down a provision of the Patient Protection and Affordable Care Act of 2010 (ACA) that purported to withhold Medicaid funding from states that did not expand their Medicaid programs. Unlike in Dole , in NFIB the Court concluded that the financial condition placed on the states in the ACA (withholding all federal Medicaid funding, which, according to the Court, typically totals about 20% of a state's entire budget) was akin to \"a gun to the head\" and thus unlawfully coercive."], "subsections": []}]}, {"section_title": "Constitutional Constraints on Congress's Ability to Regulate Firearms", "paragraphs": [], "subsections": [{"section_title": "The Second Amendment", "paragraphs": ["The Second Amendment states that \"[a] well-regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear arms, shall not be infringed.\" In District of Columbia v. Heller , the Supreme Court held that the Second Amendment guarantees an individual right to possess firearms for historically lawful purposes. Since Heller , the Supreme Court has substantively opined on the Second Amendment one other time, holding in McDonald v. City of Chicago that the Second Amendment right is incorporated through the Fourteenth Amendment to apply to the states. During the upcoming October 2019 term, the Supreme Court is scheduled to review a Second Amendment challenge to a New York City firearm licensing provision in New York Rifle & Pistol Association v. City of New York . That ruling may provide further guidance for Congress in crafting legislation that comports with the Second Amendment. ", "In Heller the Supreme Court did not elaborate on the full extent of the Second Amendment right. But a number of takeaways may be distilled from the Court's opinion. First, the Court concluded that the Second Amendment codified a pre-existing individual right to keep and bear arms for lawful purposes, such as self-defense and hunting, unrelated to militia activities. Second, the Court singled out the handgun as the weapon that \"the American people have considered ... to be the quintessential self-defense weapon.\" But the Court clarified that, \"[l]ike most rights, the right secured by the Second Amendment is not unlimited\" and further announced that \"nothing in our opinion should be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons and the mentally ill, or laws forbidding the carrying of firearms in sensitive places such as schools and government buildings, or laws imposing conditions and qualifications on the commercial sale of firearms,\" among other \"presumptively lawful\" regulations. Additionally, as for the kind of weapons that may obtain Second Amendment protection, the Court opined that the Second Amendment's coverage is limited to weapons \"in common use at the time\" that the reviewing court is examining a particular firearm; the conclusion, the Court added, \"is fairly supported by the historical tradition of prohibiting the carrying of dangerous and unusual weapons.\"", "Since Heller , the circuit courts have largely been applying a two-step inquiry, drawn from the discussion in Heller , to determine whether a particular law is constitutional. First, courts ask whether the challenged law burdens conduct protected by the Second Amendment. If so, courts next ask whether, under some type of means-end scrutiny, the law is constitutional under that standard of review. To date, no federal appellate court has invalidated on Second Amendment grounds any provision of the GCA or NFA. Nonetheless, when considering proposals to expand federal firearm restrictions, Congress may want to consider whether the expansion would fit within the parameters established in Heller and subsequent jurisprudence as permissible under the Second Amendment. "], "subsections": []}, {"section_title": "Due Process", "paragraphs": ["The Due Process Clause of the Fifth Amendment provides that \"[n]o person shall be ... deprived of life, liberty, or property, without due process of law.\" \"The touchstone of due process is protection of the individual against arbitrary action of government.\" The Due Process Clause has a substantive and procedural component, described below, and may become relevant in the context on firearms regulation if the government deprives a person of constitutionally protected liberty interest (e.g., a right to keep and bear arms under the Second Amendment) or property interest (e.g., a firearm license).", "The substantive component of the Due Process Clause prohibits \"the exercise of power without any reasonable justification in the service of a legitimate governmental objective.\" As relevant here, a substantive due process violation may occur when a legislative measure infringes on a fundamental right. But \"[w]here a particular [constitutional] Amendment provides an explicit textual source of constitutional protection against a particular sort of government behavior,\" like the Second Amendment, \"that Amendment, not the more generalized notion of 'substantive due process,' must be the guide for analyzing\" such claims. Accordingly, it appears that in the event the government deprives a person of the right to keep and bear arms\u2014the potential result of an overly stringent federal firearms measure\u2014the touchtone of a reviewing court's constitutional analysis would be the Second Amendment rather than the substantive component of the Due Process Clause.", "Still, the Due Process Clause also requires that the government afford persons with adequate procedures when depriving them of a constitutionally protected interest. This \"[p]rocedural due process imposes constraints on governmental decisions which deprive individuals of 'liberty' or 'property' interests within the meaning of the Due Process Clause of the Fifth ... Amendment.\" Examining procedural due process involves a two-step inquiry. First, a court asks whether the government has interfered with a protected liberty or property interest. In the context of federal firearms regulations, at least two constitutionally protected interests could be affected: (1) the fundamental liberty interest in a person's right to keep and bear arms, granted by the Second Amendment (i.e., the right to purchase and possess firearms for lawful purposes), and (2) the property interest in a government-issued firearms license (e.g., if the person is an FFL whose license is revoked by the government). ", "If the government has deprived a person of one of these constitutionally protected interests, courts ask, second, whether the government, in deciding whether to make the deprivation, used constitutionally sufficient procedures. Adequate due process generally requires notice of the deprivation and an opportunity to be heard before a neutral party. This constitutional requirement, the Supreme Court says, is meant to be \"flexible and calls for such procedural protections as the particular situation demands.\" Accordingly, the appropriate process due\u2014i.e., the type of notice, the manner and time of a hearing regarding the deprivation, and the identity of the decisionmaker\u2014will vary based on the specific circumstances at hand. To determine what procedures should be applied to a deprivation of a constitutionally protected interest, courts apply the balancing test outlined in Mathews v. Eldridge. This test requires courts to weigh three factors: (1) the private interest affected; (2) the risk of an erroneous deprivation of that interest through the procedures used; and (3) the government's interest. ", "Accordingly, although substantive due process concerns surrounding firearms measures may fuse with the Second Amendment concerns identified above, the procedural component of the Due Process Clause raises independent considerations for Congress. For instance, procedural due process may be relevant to congressional consideration of firearm measures that may result in the revocation or inability to obtain a license to own, purchase, or sell a firearm. Accordingly, when considering a firearms licensing measure, Congress may want to keep in mind the standards and procedures for obtaining and revoking such a license to ensure that due process is supplied. "], "subsections": []}, {"section_title": "Federalism", "paragraphs": ["The Constitution establishes a system of dual sovereignty in which \"both the National and State Government have elements of sovereignty the other is bound to respect.\" For instance, the Constitution explicitly grants certain legislative powers to Congress in Article I and then reserves all other legislative powers for the states to exercise. Both the federal government and the states regulate firearms, and two federalism principles particularly inform this shared policymaking role: the preemption and anti-commandeering doctrines. ", "The preemption doctrine derives from the Constitution's Supremacy Clause, which declares that \"the Laws of the United States ... shall be the supreme Law of the Land.\" Congress, through legislation lawfully enacted pursuant to an independent source of constitutional authority, may \"preempt\" (i.e., invalidate) state law. The Supreme Court has articulated that the doctrine operates as follows: \"Congress enacts a law that imposes restrictions or confers rights on private actors; a state law confers or imposes restrictions that conflict with the federal law; and therefore the federal law takes precedence and the state law is preempted.\" In other words, whenever states and the federal government regulate in the same area, like firearms, and the state and federal measures conflict, the conflict is to be resolved in favor of the federal government. ", "Notwithstanding the supremacy of federal law, the anti-commandeering doctrine bars the federal government from directly regulating the states. The doctrine is \"the expression of a fundamental structural decision incorporated into the Constitution\" to limit Congress's authority, including \"to withhold from Congress the power to issue orders directly to the States.\" Accordingly, Congress cannot direct the states to enact a particular measure, nor can it conscript state employees, or those of its political subdivisions, to enforce a federal regulatory program. Similarly, the federal government cannot prohibit a state from enacting new laws. As a result, the federal government cannot require the states to enforce a particular federal firearm regulatory regime. In Printz v. United States , for example, the Supreme Court struck down under the anti-commandeering doctrine certain interim provisions of the Brady Act. The relevant provisions required state and local law enforcement officers to conduct background checks on prospective handgun purchasers. The Court held that a federal mandate requiring state and local law enforcement to perform background checks on prospective handgun purchasers violated constitutional principles of federalism \"by conscripting the State's officers directly\" to enforce a federal regulatory scheme."], "subsections": []}]}]}, {"section_title": "Select Legal Issues for the 116th Congress", "paragraphs": ["Federal firearms regulation has been a subject of continuous interest for Congress. A range of proposals have been in this and past Congresses. Some seek to ease federal firearms restrictions or facilitate state reciprocity in the treatment of persons authorized to carry firearms by another state; others seek greater restrictions on the federal laws concerning the possession, transfer, or sale of firearms or the expansion of background checks for firearm purchases. These various approaches, in turn, prompt various constitutional questions, including Congress's constitutional authority to legislate on such matters and whether the proposed measures comport with the Second Amendment and other constitutional constraints. This section discusses several congressional proposals related to 3D-printed firearms, background checks, mental illness, particular firearms and accessories (e.g., semiautomatic assault weapons, bump stocks, silencers), and \"red flag\" laws and identifies related constitutional questions. "], "subsections": [{"section_title": "3D-Printed Firearms", "paragraphs": ["Under the Undetectable Firearms Act of 1988 (UFA), it is unlawful for any person to manufacture, import, sell, ship, deliver, possess, transfer, or receive a firearm (1) that, after removal of grips, stocks, and magazines, is not detectable by walk-through metal detectors; or (2) any major component of which does not generate an accurate image when scanned by the types of x-ray machines commonly used at airports. These prohibitions grew out of a concern that the increasing use of lightweight, noncorrosive plastics as a substitute for metal in firearm-component manufacturing would lead to the proliferation of firearms not detectable at security checkpoints. ", "Despite the prohibitions in the UFA, the advent of 3D-printing technology and its application to firearms has prompted concern about a new wave of undetectable, plastic guns that technically comply with the statute and could fall into the wrong hands. A high-profile example of a design for such a gun is the \"Liberator\" pistol, plans for which were first disseminated in 2013 by Defense Distributed\u2014a nonprofit \"private defense firm\" and FFL. According to media reports, the design for the Liberator allows for the 3D-printing of a functioning pistol that is almost entirely plastic, with the only metal components being a small firing pin and a removable piece of steel that is included specifically to make the design compliant with the UFA. In other words, the irrelevance of the steel block to the firearm's functionality potentially could allow bad actors to produce operable and concealable plastic firearms that would not be caught by metal detectors. ", "With respect to Defense Distributed specifically, years of litigation over the company's online dissemination of computer files for 3D-printed nonmetallic firearms has mostly stymied the company's efforts to share its files on the internet. Most recently, a federal district court in Washington entered an order that effectively bars Defense Distributed from making its disputed files available online for the duration of the ongoing lawsuit in that jurisdiction. Nevertheless, the company's continuing efforts to spread its designs for nonmetallic firearms have raised novel constitutional questions without easy answers, including (1) whether First Amendment free speech protections extend to computer code (which could bring Defense Distributed's activities within the amendment's scope), and (2) whether the Second Amendment protects the right to make arms as a necessary precursor to keeping and bearing them. ", "Faced with the long-simmering dispute over dissemination of 3D-printed gun files and the possibly incomplete protections of the UFA, the 115 th and 116 th Congresses have considered legislation addressing the online spread of 3D-printed gun files and the possession of 3D-printed guns themselves. For instance, the 3D-Printed Gun Safety Act of 2018 would have made it unlawful to \"intentionally publish\" on the internet \"digital instructions ... that can automatically program\" a 3D printer or similar device to produce or complete a firearm. Perhaps with First Amendment concerns in mind, the bill's \"Findings\" section stated that Congress's intention was not \"to regulate the rights of computer programmers\" but was instead \"to curb the pernicious effects of untraceable\u2014and potentially undetectable\u2014firearms.\" Other legislation would appear to have banned firearm assembly kits or firearm components that might be produced with a 3D printer either by amending the definition of firearm in the GCA or by bringing such items within the purview of the Consumer Product Safety Act. The Untraceable Firearms Act of 2018 additionally would have expanded serial number requirements, extended the UFA to firearms lacking detectable major components, and clarified that manufacturing firearms under the GCA includes 3D printing, among other things. Finally, a bill introduced in the 115 th Congress would have amended the GCA to prohibit the manufacture of firearms or components by means of a 3D printer and the transfer or possession of any such items."], "subsections": []}, {"section_title": "Background Checks", "paragraphs": ["The 116 th Congress began with a push in the House to expand firearm background checks. Two House bills were passed in February 2019: (1) H.R. 8, the Bipartisan Background Checks Act of 2019, and (2) H.R. 1112 , the Enhanced Background Checks Act of 2019. ", "If enacted, H.R. 8 would expand background checks to capture many private transfers between non-FFLs, subject to enumerated exceptions. (A similar bill has been introduced in the Senate. ) One question the bill raises is whether it may be lawfully enacted under one of Congress's Article I powers. The bill's accompanying constitutional authority statement does not specify which Article I power Congress is invoking to enact the measure, but the bill may be an attempt to exercise Congress's commerce power. Although the bill does not use the word commerce , other GCA provisions lack an explicit textual hook to the Commerce Clause. Courts reviewing other federal firearms law without a textual hook have upheld those measures after distinguishing them from the firearm possession law struck down in Lopez . Accordingly, the constitutionality of H.R. 8, as a lawful enactment under the Commerce Clause, may depend on the ability to distinguish it from the flaws the Supreme Court identified in Lopez .", "H.R. 1112 would amend the so-called \"default proceed\" process that allows an FFL to transfer a firearm when the NICS check has not been completed within three business days. The bill provides a mechanism for a transfer to occur if the FFL does not receive instructions from the NICS system on whether to proceed with or deny a proposed transaction within 10 business days. If the transferee wishes to proceed with the sale in such cases, he or she must file a petition (electronically or via first-class mail) to the Attorney General certifying that the transferee does not believe he or she is prohibited from acquiring the firearm. If a response is not provided within 10 business days, the FFL would be allowed to proceed with the transfer. The committee report accompanying the bill appears to construe these 10-day periods as occurring in succession rather than concurrently (i.e., the delay period might last up to 20 business days). Because the bill potentially could delay a sale to a law-abiding citizen up to 20 business days, there may be questions about whether those persons have received adequate procedural due process in the short-term deprivation of a constitutionally protected interest. Because the temporary deprivation (i.e., the inability to purchase a firearm for self-defense) would occur before a firearm may be transferred to the prospective purchaser, a reviewing court would be tasked with determining whether post-deprivation proceedings\u2014meaning proceedings that take place after a person has been deprived of a constitutionally protected interest\u2014are constitutionally permissible. Typically, due process requires that a person be given an opportunity to be heard before the deprivation of a protected interest may occur; in that case there are pre-deprivation hearings. But the Supreme Court has recognized in circumstances in which the government \"must act quickly, or where it would be impractical to provide pre-deprivation process, post-deprivation process satisfies the requirements of the Due Process Clause.\""], "subsections": []}, {"section_title": "Concealed Carry Reciprocity", "paragraphs": ["Some Members of Congress have proposed measures that would require states to recognize concealed carry privileges afforded by other states. Both S. 69, the Constitutional Carry Reciprocity Act of 2019, and H.R. 38 , the Concealed Carry Reciprocity Act of 2019, if enacted, would allow persons who are eligible to carry a concealed handgun in one state to lawfully carry a handgun in other states that have a concealed-carry regime for their residents without regard to differences in the states' eligibility requirements for concealed carry. Both bills purport to preempt state laws to varying degrees. Whether these preemption provisions are considered to be valid likely will depend on whether the bills, as a whole, are interpreted to \"confer[] on private entities ... a federal right to engage in certain conduct,\" i.e., carrying a concealed handgun, \"subject only to certain (federal) constraints.\"", "H.R. 38 also contains a civil-suit provision that would authorize a private right of action against any person, state, or local government entity that interferes with a concealed-carry right that the bill establishes. Because the bill seeks to abrogate the states' Eleventh Amendment immunity from suit in federal court, several questions need to be answered, the first being what exception to Eleventh Amendment immunity the bill is invoking. Given that the bill cites the Second Amendment as the constitutional source of authority, it is possible that the bill seeks to invoke Congress's enforcement power under Section Five of the Fourteenth Amendment. Section Five of the Fourteenth Amendment enables Congress to abrogate a state's Eleventh Amendment immunity through legislation designed to enforce the Fourteenth Amendment's protections. And the Second Amendment is made enforceable on the states via the Fourteenth Amendment. If Congress, indeed, intends to invoke its Section Five power, a second question raised is whether legislation designed to remedy or deter state violations of the Second Amendment would be a permissible exercise of Congress's Section Five enforcement power. And assuming that Congress could lawfully exercise its Section Five power to enforce violations of Second Amendment rights, a third question would be whether the Second Amendment protects the right to carry a concealed handgun\u2014an issue that has divided the federal appellate courts. "], "subsections": []}, {"section_title": "Mental Illness", "paragraphs": ["As described previously, a person who has been \"adjudicated as a mental defective\" or \"committed to a mental institution\" is barred by federal law from transporting, possessing, or receiving firearms or ammunition. Both regulatory and judicial interpretations of these terms have focused on the need for a formal decision by an authoritative body like a court or board after an adjudicative hearing, as broader interpretations could raise constitutional due process and Second Amendment concerns. Nevertheless, the prohibition\u2014even construed narrowly\u2014has been criticized in some quarters as unconstitutional given its effectively permanent nature or as stigmatizing mental illness and unfairly painting as dangerous individuals who are more likely to be victims than perpetrators of violent crime. At the same time, some observers have, in response to past mass shootings, called for even stricter limits on possession of firearms by the mentally ill. For its part, the 115 th Congress considered bills that would have both broadened and narrowed the existing firearm prohibition. Some legislation would have, among other things, adopted the narrow understanding that an adjudication or commitment for purposes of the firearm prohibition must stem from an order or finding of an \"adjudicative body\" after a hearing and that the order or finding may impose only a temporary disability. Other legislation would have added temporary firearm prohibitions for persons assessed by mental health professionals to pose a risk of danger to others. ", "Apart from constitutional and interpretive issues, commentators have highlighted the challenges of collecting comprehensive mental health records for use in NICS background checks, contending that the 2007 Virginia Tech shooting could have been avoided if the gunman's prior state mental health adjudication had been reported. One challenge specific to collecting mental health records is that many such records are held by state or local agencies that may believe patient information must remain confidential pursuant to the Health Insurance Portability and Accountability Act (HIPAA). To combat this perception, the Department of Health and Human Services issued a rule in 2016 that expressly allows specified state entities to report limited information otherwise covered by HIPAA to NICS or to another entity that reports to NICS. As noted above, Congress has also sought to improve mental health record reporting at the state level through NIAA, which (among other things) funds state efforts to develop systems for accurate and complete reporting. ", "NICS reporting of mental health records at the federal level has raised somewhat different issues. Although federal agencies are generally required to report mental health adjudication records for background check purposes, NIAA makes clear that federal departments and agencies may not furnish such records if the relevant adjudication has been set aside or the person has been found to be \"rehabilitated,\" among other things. Additionally, the Department of Veterans Affairs (VA), which appears to supply the vast majority of federal mental health records to NICS, has for years provided records of beneficiaries who are appointed fiduciaries to manage their financial affairs based on a VA determination that the beneficiaries are \"mentally incompetent\"; concern that this practice may unfairly deprive veterans of their right to possess firearms, however, led to the introduction of legislation in the 115 th Congress that would have ensured that veterans for whom fiduciaries are appointed are not considered \"adjudicated as a mental defective\" unless a judicial authority has issued an order or finding \"that such person is a danger to himself or herself or others.\" A final rule published by the Social Security Administration (SSA) in December 2016, which specified similar conditions for SSA reporting of disability program beneficiaries who were appointed a representative payee, was also vacated by Congress through a Congressional Review Act resolution early in 2017."], "subsections": []}, {"section_title": "Particular Firearms and Accessories", "paragraphs": ["Numerous proposals have been made over the years to limit or expand the ability to possess certain kinds of firearms and accessories. For example, bills have targeted limiting the possession of semiautomatic \"assault weapons,\" large-capacity ammunition feeding devices, and bump stocks. Conversely, other bills have proposed decreasing regulations on firearm silencers. ", "There has been continued interest in tightening the regulation of semiautomatic \"assault weapons\" since the 1994 ban expired in 2004. Some proposals seek to reinstate and expand upon the former assault weapon ban. Congress has also considered bringing certain semiautomatic firearms under the more-stringent NFA's regulatory scheme. Further, some Members of Congress have proposed to make it unlawful for an FFL to sell or transfer to any person under 21 years old certain semiautomatic rifles; currently, anyone age 18 or older may purchase such rifles from an FFL. Banning the possession of these kinds of firearms entirely or by a subset of the population may raise Second Amendment questions, such as the extent to which the Second Amendment protects the right of all persons to bear specific arms other than handguns in the home for self-defense. To date every federal appellate court that has reviewed a state or local semiautomatic assault weapon ban has rejected Second Amendment challenges to those laws. Nor has a federal appellate court sustained a challenge to the current federal law that prohibits the sale of handguns to persons under 21 years old. ", "There have also been proposals to ban \"bump stock\" devices, which can be attached to a semiautomatic firearm and allow it to effectively mimic the firing capability of a fully automatic weapon. After it was discovered that the assailant behind the Las Vegas, Nevada, mass shooting in October 2017 used one of these firearm accessories, ATF initiated the process of regulating them. ATF published a final rule the next year, on December 26, 2018, banning the transfer and possession of all bump stock devices, effective March 26, 2019. Litigation seeking to enjoin the rule before its effective date followed. The plaintiffs challenged the rulemaking process and the rule itself. Codifying the ban through legislation would avoid the challenges to the rulemaking process but could potentially be subject to constitutional challenge under the Takings Clause, which forbids \"private property [to] be taken for public use, without just compensation.\" In this vein, takings lawsuits for compensation under the Tucker Act or Little Tucker Act potentially could be brought by persons who owned bump stock devices before the effective date of any statutory ban. Still, these constitutional concerns could be alleviated by creating a grandfather clause for bump stocks that were lawfully owned before the effective date of any bump stock ban.", "Additionally, there have been congressional efforts to deregulate firearm silencers, which are currently regulated under the NFA and GCA. In the SHUSH Acts, as introduced in the House and Senate, some Members have proposed measures that, if enacted, would eliminate the federal regulation of firearm silencers entirely. These bills also seek to preempt state and local laws that impose a tax on the making, transferring, possessing, or transporting of a firearm silencer as well as those that require marking, recordkeeping, or registering the same. Less expansive proposals purport only to remove silencers from NFA regulation. Thus, if the bills were enacted, silencers would not be subject to the NFA's tax and registration requirements but would still be subject to all GCA firearm regulations. Still, this proposal contains the same preemption provisions as the more comprehensive SHUSH Acts. All three bills may raise questions about whether the preemption provisions are constitutionally valid, as Congress can only preempt state and local measures when those measures conflict with a federal regulation covering the same activity. As relevant here, though, Congress, as part of a deregulation measure, may expressly prohibit states from further regulating the same activity \"[t]o ensure that the States would not undo federal deregulation with regulation of their own.\" "], "subsections": []}, {"section_title": "\"Red Flag\" Laws", "paragraphs": ["Somewhat related to mental health firearm restrictions are proposals for so-called \"red flag\" laws, which generally permit courts to issue temporary orders barring particular persons from possessing guns based on some showing of imminent danger or a risk of misuse. Following the February 2018 school shooting in Parkland, Florida, a number of states proposed or passed red-flag laws, and legislation has been introduced in the 116 th Congress on the subject. Disagreement over various proposals has largely turned on the stringency of the showing that must be made to obtain an order, the persons who may seek an order, whether an initial order may be obtained without the presence of the gun owner, and the length of the resultant firearm disability. ", "Red-flag legislation may raise questions as to whether such measures run afoul of the Second Amendment and deprive gun owners (or prospective gun owners) of constitutionally protected interests without due process of law. However, proponents of such laws assert that they are an effective and needed means of averting gun violence before it happens and that hearing and review procedures are constitutionally adequate. Were a court to consider a constitutional challenge to a red-flag measure under the Second Amendment or Due Process Clause, the outcome potentially could depend on (1) the court's conception of the scope of the right to keep and bear arms in light of Heller and (2) the weight ascribed by the court to the three Mathews v. Eldridge factors based on the particular procedures of the measure at issue."], "subsections": []}]}]}}
{"id": "R44599", "title": "Heroin Trafficking in the United States", "released_date": "2019-02-14T00:00:00", "summary": ["Over the past several years, the nation has seen an uptick in the use and abuse of opioids\u2014both prescription opioids and non-prescription opioids such as heroin. In 2016, there were an estimated 948,000 individuals (0.4% of the 12 and older population) who reported using heroin within the past year\u2014up from 0.2% to 0.3% of this population reporting use in the previous decade. In addition to an increase in heroin use over the past several years, there has been a simultaneous increase in its availability in the United States. The increase in availability has been fueled by a number of factors, including increased production and trafficking of heroin\u2014principally by Mexican criminal networks.", "Mexican transnational criminal organizations are the major suppliers and key producers of most illegal drugs smuggled into the United States. They have been increasing their share of the U.S. drug market\u2014particularly with respect to heroin\u2014even though the United States still receives some heroin from South America and, to a lesser extent, Southwest Asia. To facilitate the distribution and sale of drugs in the United States, Mexican drug traffickers have formed relationships with U.S. gangs.", "Heroin seizures across the country, as well as those at the Southwest border, have generally increased over the past decade. Nationwide heroin seizures reached 7,979 kg in 2017, with 3,090 kg (39%) seized at the Southwest border. This is up from about 2,000 kg seized at the Southwest border a decade prior. Further, there has been an increase in federal arrests and sentences for heroin-related crimes. For instance, the Drug Enforcement Administration made 5,408 heroin-related arrests in 2017\u2014up from about 2,500 a decade prior. In addition, U.S. Sentencing Commission data indicate that from 2007 to 2017, there was a general increase in the number of individuals sentenced for heroin trafficking offenses in U.S. District Courts.", "The federal government\u2014specifically, law enforcement\u2014relies on a number of tools and initiatives to counter heroin trafficking. Many of these efforts focus on drug trafficking broadly and prioritize the greatest drug trafficking threats in a given area, whether those threats come from trafficking heroin or other illicit drugs or substances.", "Going forward, there are a number of issues policymakers may consider as they address heroin trafficking. For instance, what is known about drug trafficking is contingent on data surrounding poppy cultivation, heroin production, and product inflows into the United States. Given that these are often based on snapshots of knowledge from disparate sources, Congress may question how these data are collected and their adequacy. In addition, Congress may examine current law enforcement efforts to dismantle heroin trafficking networks and prosecute their leaders. Policymakers may also look at existing federal strategies on drug control and transnational crime to evaluate whether they are able to target the heroin trafficking threat effectively."], "reports": {"section_title": "", "paragraphs": ["I n the midst of ongoing concerns about illicit drug use and abuse, there has been heightened attention to the issue of opioid abuse\u2014including both prescription opioids and nonprescription opioids such as heroin. The increased attention to opioid abuse and addiction first centered on the abuse of prescription painkillers. According to the Substance Abuse and Mental Health Services Administration (SAMHSA), about 3.3 million individuals were current (at least once in the past month) nonmedical users of prescription pain relievers such as OxyContin in 2016. Mirroring the nation's concern about prescription drug abuse, there has been corresponding unease regarding the rise in heroin abuse. ", "According to the 2016 National Survey on Drug Use and Health, there were an estimated 948,000 individuals (0.4% of the 12 and older population) who reported using heroin within the past year\u2014up from 0.2% to 0.3% of this population reporting use in the previous decade. In addition, about 626,000 individuals (0.2% of the 12 and older population) had a heroin use disorder in 2016. While this is similar to the proportion of the 12 and older population with a heroin use disorder from 2011 to 2015, it is significantly greater than the proportion from 2002 to 2010. Further, heroin overdose deaths increased by about 20% nationally between 2015 and 2016, and the Midwest and Northeast regions have been highlighted as areas of particular concern. ", "In addition to increases in heroin use and abuse, there has been a simultaneous increase in its availability in the United States over the past decade. This has been fueled by a number of factors, including increased production and trafficking of heroin\u2014principally by Mexican criminal networks. Mexican drug traffickers have been expanding their control of the U.S. heroin market, though the United States still receives some heroin from South America and Southwest Asia as well. Notably, while the majority of the world's opium is produced in Afghanistan, only a small proportion of that feeds the U.S. heroin market.", "Policymakers may want to examine U.S. efforts to counter heroin trafficking as a means of addressing opioid abuse in the United States. This report provides an overview of heroin trafficking into and within the United States. It includes a discussion of links between the trafficking of heroin and the illicit movement of related substances such as controlled prescription opioids and synthetic substances like fentanyl. The report also outlines existing U.S. efforts to counter heroin trafficking and possible congressional considerations going forward."], "subsections": [{"section_title": "Heroin Traffickers", "paragraphs": ["Mexican transnational criminal organizations (TCOs) \"remain the greatest criminal drug threat to the United States; no other group is currently positioned to challenge them.\" They are the major suppliers and key producers of most illegal drugs smuggled into the United States, and they have been increasing their share of the U.S. drug market\u2014particularly with respect to heroin. The Drug Enforcement Administration (DEA) notes that the Southwest border \"remains the primary entry point for heroin into the United States.\" Mexican TCOs control the flow of heroin across the border, the majority of which \"is through [privately owned vehicles] entering the United States at legal ports of entry, followed by tractor-trailers, where the heroin is co-mingled with legal goods.\"", "Mexican criminal networks have not always featured so prominently (or broadly) in the U.S. heroin market. Historically, Colombian criminal organizations controlled heroin markets in the Midwest and on the East Coast. Now, supply for these markets also comes directly from Mexican traffickers. The DEA indicates that \"[s]ince 2015 most of the heroin sold in the U.S. is from Mexico.\" Mexican poppy cultivation reportedly increased by 35% from 2016 to 2017; officials project that the estimated 44,100 hectares cultivated in 2017 allowed for about 111 metric tons of pure heroin production.", "The DEA has observed that \"[t]he increased role of Mexican traffickers is affecting heroin trafficking patterns.\" Historically, Mexican-produced black tar and brown powder heroin have been consumed in markets west of the Mississippi River, while markets east of the Mississippi have consumed more white powder heroin from South America. However, as the Mexican traffickers have taken on a larger role in the U.S. heroin market and have developed techniques to produce white powder heroin, they have moved their white powder heroin into both eastern and western U.S. markets.", "To facilitate the distribution and local sale of drugs in the United States, Mexican drug traffickers have sometimes formed relationships with U.S. gangs. Trafficking and distribution of illicit drugs is a primary source of revenue for these gangs and among the most common of their criminal activities. Gangs may work with a variety of drug trafficking organizations, and are often involved in selling multiple types of drugs besides heroin or other opioids. "], "subsections": [{"section_title": "Heroin Seizures", "paragraphs": ["The majority of heroin making its way to the United States originates in Mexico and, to a lesser degree, Colombia. The amount of heroin seized across the United States, including at the Southwest border, has generally increased over the past decade, as illustrated in Figure 1 . Nationwide heroin seizures reached 7,979 kg in 2017, with 3,090 kg (39%) seized at the Southwest border. ", "The United Nations Office on Drugs and Crime (UNODC) has outlined how seizure data can be used in combination with data on drug prices and purity to help serve as a drug market indicator. The UNODC notes that \"[f]alling seizures in combination with rising drug prices and falling purity levels may suggest a decline in overall drug supply, while rising seizures in combination with falling drug prices and rising purity levels are usually considered a good indicator of an increase in drug supply.\"", "The UNODC's model can be applied to heroin seizure data to help assess the scope of the heroin market in the United States. Notably, heroin seizures have generally been increasing, as illustrated in Figure 1 . In addition, the average purity of retail-level heroin has been between 31% and 39% from 2012 to 2016; while the purity has fluctuated somewhat, it has remained elevated relative to levels in the 1980s. And while the retail-level price per gram has vacillated over the past couple of decades, it has remained lower than prices in the 1980s. This combination of seizures, purity, and price could indicate that there is an increased heroin supply for the U.S. market. Experts have noted an increase in Mexican heroin production, which is primarily destined for the United States. ", "The increase in seizures, however, may reflect more than just increases in the heroin supply and demand in the U.S. market. This could also be driven by factors such as enhanced U.S. law enforcement efforts to interdict and seize the contraband and/or by less stringent efforts by traffickers and buyers to conceal the drugs."], "subsections": []}, {"section_title": "Arrests and Prosecutions", "paragraphs": ["Data from the DEA indicate that many of their heroin-related arrests are for trafficking-related offenses. In 2017, the DEA made 5,408 heroin-related arrests. The bulk of these were made for conspiracy (35%), distribution (24%), possession with intent (23%), and simple possession (11%). Other offense categories for which a much smaller proportion of arrests were made include importation, manufacture, RICO (Racketeer Influenced and Corrupt Organization), and CCE (continuing criminal enterprise). In other words, more of these heroin-related arrests were for offenses that may be considered to fall under the umbrella of trafficking rather than simple possession. DEA heroin arrest data indicate that since remaining relatively flat in the mid-2000s, overall heroin arrests generally increased through 2015 before declining through 2017 (see Figure 2 ).", "The U.S. Sentencing Commission reports that 2,658 individuals were sentenced for heroin trafficking offenses in U.S. District Courts in FY2017. While this was a decrease from FY2016, the number of individuals sentenced for heroin trafficking has generally moved upward over the past decade. FY2017 data indicate that of the 19,240 cases involving individuals sentenced for drug trafficking offenses, 2,658 (13.8%) involved individuals who were sentenced for heroin trafficking. That amounts to 4% of all cases sentenced in U.S. District Courts. (See Figure 3 .)"], "subsections": []}, {"section_title": "Links to Related Substances", "paragraphs": [], "subsections": [{"section_title": "Prescription Opioids", "paragraphs": ["Some have theorized that prescription opioid abuse may lead to, or be a \"gateway\" for, abuse of nonprescription opioids such as heroin. Results from one SAMHSA study indicate that the \"recent (12 months preceding interview) heroin incidence rate was 19 times higher among those who reported prior nonmedical pain reliever (NMPR) use than among those who did not (0.39% vs. 0.02%).\" However, while \"four out of five recent heroin initiates (79.5%) previously used NMPR ... the vast majority of NMPR users have not progressed to heroin use.\" The 2016 National Heroin Threat Assessment Summary notes that about 4% of individuals who abuse prescription drugs will go on to use heroin. ", "One factor that may sway opioid abusers' shifts from prescription opioids to heroin may be the cost. If users cannot afford prescription opioids, they may switch to heroin as a lower-cost alternative. While estimates vary, some have noted that an 80 mg pill of OxyContin (a prescription opioid containing oxycodone) can cost $80 on the street; a bag of heroin can cost $5-$10. The DEA reported that drug trafficking organizations have responded to the demand for lower cost opioids by sometimes shifting heroin trafficking operations to areas with higher prevalence of nonmedical prescription drug use."], "subsections": []}, {"section_title": "Fentanyl", "paragraphs": ["Fentanyl is a synthetic opioid that is approximately 50 times stronger than heroin and 100 times more potent than morphine. There are both legal and illegal forms of fentanyl. Legal fentanyl has pharmaceutical uses for treating post-operative pain and chronic pain associated with late stage cancer, and illicit fentanyl is sold on the black market and used/abused in similar ways as other opioid drugs. ", "Most cases of fentanyl-related overdoses are associated with non-pharmaceutical, illegal fentanyl ; non-pharmaceutical fentanyl is often mixed with heroin and/or other drugs, sometimes without the consumer's knowledge. Some have purported that fentanyl is easier to mix with white powder heroin than with the black tar variety. As such, there have reportedly been more fentanyl-related overdose deaths in U.S. markets fueled by white powder heroin than those dominated by the black tar form. However, this could change as distributors are finding ways to incorporate fentanyl into the black tar heroin.", "Non-pharmaceutical fentanyl found in the United States is manufactured in China and Mexico. It is trafficked into the United States across the Southwest border or delivered through mail couriers directly from China, or from China through Canada. In addition, fentanyl-related substances\u2014substances that are in the fentanyl chemical family but have minor variations in chemical structure\u2014may be attractive to traffickers because the analogs are often unscheduled or unregulated. Like fentanyl, they can be sold as, or mixed in with, heroin or pressed into counterfeit pills. ", "The DEA indicates that the majority of seized fentanyl samples analyzed involved fentanyl in powder form. However, law enforcement is concerned about the risks from fentanyl being pressed into counterfeit pills, in part, because there are more abusers of prescription pain pills than of heroin. As such, fentanyl pressed into counterfeit pills could ultimately affect a larger population of individuals."], "subsections": []}]}, {"section_title": "U.S. Heroin Trafficking Enforcement Efforts", "paragraphs": ["The United States confronts the drug problem through a combination of efforts targeting both the supply of and demand for drugs. As such, the Administration has directed resources into the areas of law enforcement initiatives, prevention, and treatment. In targeting one element of the drug problem\u2014trafficking\u2014U.S. efforts have centered on law enforcement initiatives. ", "There are a number of federal law enforcement activities aimed specifically at (or which may be tailored to) curbing heroin trafficking. This section contains a snapshot of some of these efforts."], "subsections": [{"section_title": "DEA 360 Strategy", "paragraphs": ["The DEA has developed a 360 Strategy aimed at \"tackling the cycle of violence and addiction generated by the link between drug cartels, violent gangs, and the rising problem of prescription opioid and heroin abuse.\" The strategy was launched in November 2015 as a pilot program in Pittsburgh, PA, and has since expanded to other cities. It leverages federal, state, and local law enforcement, diversion control, and community outreach organizations. As the program is relatively new, there have only been anecdotal reports of the operations that fall under the 360 Strategy framework, and an outcome evaluation of the strategy has not been conducted."], "subsections": []}, {"section_title": "Heroin and Fentanyl Signature Programs", "paragraphs": ["The DEA operates a heroin signature program (HSP) and a heroin domestic monitor program (HDMP), with the goal of identifying the geographic source of heroin found in the United States. The HSP analyzes wholesale-level samples of \"heroin seized at U.S. ports of entry (POEs), all non-POE heroin exhibits weighing more than one kilogram, randomly chosen samples, and special requests for analysis.\" Chemical analysis of a given heroin sample can identify its \"signature,\" which indicates a particular heroin production process that has been linked to a specific geographic source region. The HDMP assesses the signature source of retail-level heroin seized in the United States. This program samples retail-level heroin seized in 27 cities across the country and provides data on the price, purity, and geographic source of the heroin. The results from the HSP and HDMP can be used to help understand trafficking and distribution patterns throughout the country. The HSP started in 1977, and the HDMP began in 1979.", "The HSP tests about 600-900 heroin samples annually. In 2016, the HSP tested 744 samples from seizures totaling 1,632 kg\u2014slightly more than 22% of the total heroin seized that year. Of the heroin analyzed in the HSP in 2016, 86% was identified as originating from Mexico, 10% was inconclusive, 4% was from South America, and less than 1% was from Southwest Asia. Wholesale-level Mexican white powder heroin produced with South American techniques had an average purity of 82%. Data from the HDMP indicate that retail-level Mexican white powder heroin produced with South American techniques had an average purity of 39.7% in 2016.", "The DEA has also started a Fentanyl Signature Profiling Program (FSPP), analyzing samples from fentanyl seizures to help \"identify the international and domestic trafficking networks responsible for many of the drugs fueling the opioid crisis.\" In 2017, the FSPP analyzed 520 fentanyl powder samples from seizures totaling 960 kg of fentanyl. While the average purity was 5%, the DEA has indicated that fentanyl shipped directly from China often has purity levels above 90%, while fentanyl trafficked over the Southwest border from Mexico often has purity levels below 10%."], "subsections": []}, {"section_title": "HIDTA", "paragraphs": ["The High Intensity Drug Trafficking Areas (HIDTA) program provides assistance to law enforcement agencies\u2014at the federal, state, local, and tribal levels\u2014that are operating in regions of the United States that have been deemed critical drug trafficking areas. There are 29 designated HIDTAs throughout the United States and its territories. Administered by the Office of National Drug Control Policy (ONDCP), the program aims to reduce drug production and trafficking through four means:", "promoting coordination and information sharing between federal, state, local, and tribal law enforcement; bolstering intelligence sharing between federal, state, local, and tribal law enforcement; providing reliable intelligence to law enforcement agencies such that they may be better equipped to design effective enforcement operations and strategies; and promoting coordinated law enforcement strategies that rely upon available resources to reduce illegal drug supplies not only in a given area, but throughout the country.", "The HIDTA program does not mandate that all regional HIDTAs focus on the same drug threat\u2014such as heroin trafficking; rather, funds can be used to support the most pressing drug threats in the region. As such, when heroin trafficking is found to be a top priority in a HIDTA region, funds may be used to support initiatives targeting it. ", "In 2015, ONDCP launched the Heroin Response Strategy (HRS), \"a multi-HIDTA, cross-disciplinary approach that develops partnerships among public safety and public health agencies at the Federal, state and local levels to reduce drug overdose fatalities and disrupt trafficking in illicit opioids.\" Within the HRS, a Public Health and Public Safety Network coordinates teams of drug intelligence officers and public health analysts in each state. The HRS not only provides information to these participating entities on drug trafficking and use, but it has \"developed and disseminated prevention activities, including a parent helpline and online materials.\" "], "subsections": []}, {"section_title": "Organized Crime Drug Enforcement Task Forces (OCDETF)", "paragraphs": ["The OCDETF program targets\u2014with the intent to disrupt and dismantle\u2014major drug trafficking and money laundering organizations. Federal agencies that participate in the OCDETF program include the DEA; Federal Bureau of Investigation (FBI); Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF); U.S. Marshals; Internal Revenue Service (IRS); U.S. Immigration and Customs Enforcement (ICE); U.S. Coast Guard (USCG); Offices of the U.S. Attorneys; and the Department of Justice's (DOJ's) Criminal Division. These federal agencies also collaborate with state and local law enforcement on task forces. There are 14 OCDETF strike forces around the country and an OCDETF Fusion Center that gathers and analyzes intelligence and information to support OCDETF operations. The OCDETFs target those organizations that have been identified on the Consolidated Priority Organization Targets (CPOT) List, the \"most wanted\" list for leaders of drug trafficking and money laundering organizations. During FY2017, 20% (932) of active OCDETF investigations were linked to valid CPOTs. Notably, 50% of the FY2017 CPOT investigations involved heroin trafficking. "], "subsections": []}, {"section_title": "COPS Anti-Heroin Task Force Program", "paragraphs": ["Within DOJ, the Community Oriented Policing Services (COPS) Office's Anti-Heroin Task Force (AHTF) Program provides funding assistance to state law enforcement agencies to investigate illicit activities related to the trafficking or distribution of heroin or diverted prescription opioids. While the AHTF program is not a federal enforcement program, it is a federal grant program that exclusively provides money targeted specifically for heroin trafficking enforcement efforts. Funds cannot be used for treatment or other purposes because the program focuses on trafficking and distribution. Further, the program focuses its funding on state law enforcement agencies with multi-jurisdictional reach and interdisciplinary team structures\u2014such as task forces. For FY2017, grants were awarded to entities in eight states."], "subsections": []}]}]}, {"section_title": "Going Forward", "paragraphs": [], "subsections": [{"section_title": "Adequacy of Data on Heroin Flows", "paragraphs": ["What is known about heroin trafficking flows is contingent on a number of factors surrounding the collection and reporting of these data, which are both multifaceted and incomplete. Data on various elements (e.g., production, price, purity, seizures, etc.) can help provide insight into the landscape of heroin trafficking, though these data are sometimes imprecise. ", "For example, as the bulk of heroin consumed in the United States has been traced to Mexico, one central piece of data in understanding trafficking flows to the United States is the total potential production in the source countries. The United Nations Office on Drugs and Crime has noted, however, that \"[o]nly partial information about the extent of opium poppy cultivation and heroin production in the Americas is available.\" The DEA's 201 8 National Drug Threat Assessment estimates that Mexico may have cultivated 44,100 hectares of opium poppy in 2017, potentially yielding 111 metric tons of pure heroin. This is 38% higher than the estimated production in 2016. In the past, officials have noted that crop yield data are unreliable, and it is unclear whether the newer data are more reliable. Even with these questions about the data's reliability, U.S. officials state that production of heroin in Mexico has increased. While much of Mexican-produced heroin is reportedly destined for the United States, that proportion is unknown.", "In addition, it is unknown how much pure heroin is making its way into the United States. Data on seizures are available, but these reflect an unknown portion of total drugs traversing U.S. borders. In addition, as noted, officials have estimated heroin availability in the United States based, in part, on estimated production, known seizures, and the price and purity of select samples of wholesale and retail-level heroin, but these numbers collectively represent an imprecise picture of heroin trafficking. Policymakers may, in their oversight of efforts to counter the flow of heroin into the country, assess means to bolster the accuracy and completeness of data."], "subsections": []}, {"section_title": "Prioritizing Heroin Trafficking Enforcement", "paragraphs": ["Over the past few years, officials have repeatedly referred to heroin as a top drug threat in the United States. The 201 8 National Drug Threat Assessmen t notes that heroin is one of the most significant drug threats. This is largely based on the health risks\u2014overdose and death\u2014posed by these substances. Nationally, however, federal law enforcement seizures of heroin have generally increased in the past several years, as illustrated in Figure 1 . Policymakers may question whether federal enforcement efforts prioritize curbing heroin trafficking to an extent commensurate with the reported threat of the drug. While seizures have generally increased both along the Southwest border and throughout the country, it is unclear whether enforcement efforts should, or are able to, increasingly target heroin trafficking networks.", "In addition, law enforcement data indicate that there have been changes in heroin trafficking patterns along the Southwest border. For instance, from 2016 to 2017 heroin trafficking, by weight, increased 238% in the El Centro corridor, 174% in the Del Rio corridor, and 104% in the Yuma corridor, while it declined in other areas such as the Rio Grande Valley (by 24%). Policymakers may ask if heroin enforcement efforts are nimble and able to respond (and if so, how) to shifts in heroin trafficking patterns and maximize seizures in the areas where heroin flows are increasing.", "ONDCP has noted that the \"responsibility for curbing heroin production and trafficking lies primarily with the source countries.\" Policymakers may examine the balance of resources targeted toward domestic efforts to reduce drug trafficking through interdiction and prosecution relative to resources dedicated to eradication, alternative economic development, and other options abroad."], "subsections": []}, {"section_title": "Evaluating Goals and Outcomes of U.S. Strategies", "paragraphs": ["The United States has a number of strategies and initiatives targeting illicit drugs. While they do not all focus on drug trafficking per se\u2014or even more specifically, heroin trafficking\u2014their goals include reducing drug trafficking. Policymakers may evaluate whether these strategies and initiatives are sufficient to effectively respond to the threat of heroin trafficking in the United States as well as to the role heroin trafficking may play in the opioid epidemic. If not, how might a strategy look that focuses specifically on heroin/opioid trafficking, and would such a strategy be nimble enough to counter the constantly evolving drug trafficking threats facing the United States? Examples of existing efforts are outlined here."], "subsections": [{"section_title": "National Drug Control Strategy", "paragraphs": ["ONDCP is charged with coordinating federal drug control policy. In doing so, ONDCP is responsible for producing the annual National Drug Control Strategy (strategy), the purpose of which is to outline a plan to reduce illicit drug consumption in the United States and the consequences of such use. The most recent strategy was released in 2016. The 2016 strategy prioritizes seven approaches to reduce both illicit drug use and its consequences:", "preventing drug use in U.S. communities; seeking early intervention opportunities in health care; increasing access to treatment and supporting recovery; reforming the criminal justice system to better address substance use disorders; disrupting domestic drug trafficking and production; bolstering international partnerships; and improving information systems for analysis, assessment, and management.", "Each of these approaches is based on several principles and fosters certain federal drug control activities. While these approaches and principles are not necessarily directed at countering heroin trafficking, they focus on confronting the top drug threats, which have in recent years involved heroin trafficking and its role in the opioid epidemic. Notably, the 2016 strategy identified the greatest drug threat to the United States as \"the continuing opioid epidemic, which began with the overprescribing of powerful long-acting, time-released opioid medications \u2026 [and] was further complicated by a sharp increase in the supply and subsequent use of high purity, low cost heroin produced in Mexico and Colombia and the trafficking of illicitly produced fentanyl.\" It is unclear whether the Trump Administration will release a strategy or how prominently countering heroin trafficking as it contributes to the opioid epidemic may feature in that strategy. "], "subsections": []}, {"section_title": "National Southwest Border Counternarcotics Strategy", "paragraphs": ["The National Southwest Border Counternarcotics Strategy (NSBCS) was first launched in 2009, and it outlines domestic and transnational efforts to reduce the flow of illegal drugs, money, and contraband across the Southwest border. It has a number of strategic objectives:", "enhance intelligence and information sharing capabilities and processes; reduce the flow of drugs, drug proceeds, and associated instruments of crime that cross the Southwest border; develop strong, resilient communities that resist criminal activity and promote healthy lifestyles; disrupt and dismantle TCOs operating along the Southwest border; stem the flow of illicit proceeds across the Southwest border; and enhance U.S.-Mexican-Central American cooperation on joint counterdrug efforts.", "The 2016 NSBCS focuses on drug trafficking broadly, noting that the Southwest border is the primary entry point for many illegal drugs arriving in the United States. Nonetheless, it mentions that \"the threat posed by heroin in the United States is serious and continues to intensify.\" The objectives and action items, however, target the broader array of drug and criminal threats at the border. It is unclear whether the Trump Administration will use the NSBCS, modify it, or develop other measures and strategies to counter the threats\u2014including those posed by heroin trafficking\u2014at the Southwest border."], "subsections": []}, {"section_title": "National Strategy to Combat Transnational Organized Crime", "paragraphs": ["In July 2011, the Obama Administration released the Strategy to Combat Transnational Organized Crime: Addressing Converging Threats to National Security . The strategy provided the federal government's first broad conceptualization of \"transnational organized crime,\" highlighting it as a national security concern. It highlights 10 primary categories of threats posed by transnational organized crime, one of which is the expansion of drug trafficking. Additionally, the strategy outlines six key priority actions to counter threats posed by transnational organized crime:", "taking shared responsibility and identifying what actions the United States can take to protect against the threat and impact of transnational organized crime; enhancing intelligence and information sharing; protecting the financial system and strategic markets; strengthening interdiction, investigations, and prosecutions; disrupting drug trafficking and its facilitation of other transnational threats; and building international capacity, cooperation, and partnerships.", "While this strategy is not tailored solely to drug trafficking (or more specifically, heroin trafficking) activities of criminal networks, it includes a discussion of the threat. Additionally, the strategy notes that a number of the threats outlined in the strategy may be facilitated by drug trafficking and the proceeds generated by those activities. For instance, the illicit drugs trade is at times linked to crimes such as weapons trafficking or human trafficking. Similar to the case with the NSBCS, it is unclear whether the Trump Administration will rely upon this strategy either broadly or more specifically to counter heroin trafficking. "], "subsections": []}, {"section_title": "Executive Orders", "paragraphs": ["The Trump Administration has issued executive orders that could affect federal efforts to counter heroin trafficking, though they do not focus solely on them. For instance, the executive order Enforcing Federal Law with Respect to Transnational Criminal Organizations and Preventing International Trafficking , issued in February 2017, relies in part on the Threat Mitigation Working Group\u2014which was established as part of the Strategy to Combat Transnational Organized Crime\u2014to, among other things, support and bolster U.S. efforts to counter criminal organizations. However, the executive order does not speak to the larger strategy or specific efforts to counter heroin trafficking. In addition, President Trump issued the executive order Establishing the President's Commission on Combating Drug Addiction and the Opioid Crisis in March 2017. The commission's final report recommended a number of actions, including providing enhanced penalties for the trafficking of fentanyl and its analogues as well as bolstering tools and technologies to detect fentanyl before it enters the United States."], "subsections": []}, {"section_title": "National Heroin Task Force", "paragraphs": ["The National Heroin Task Force was convened by DOJ and ONDCP in March 2015 pursuant to P.L. 113-235 . The task force examined the Administration's efforts to tackle the heroin epidemic from various angles including criminal enforcement, prevention, and substance use disorder treatment and recovery services, and it developed a set of recommendations to \"curtail the escalating overdose epidemic and death rates.\" The report's recommendations target the public safety and public health aspects of the opioid epidemic, and several specifically address countering heroin trafficking.", "The task force suggested, for instance, that the federal government prioritize prosecutions of heroin distributors and enhance investigation and prosecution techniques to target the heroin supply chain\u2014particularly when the drug caused a death. The report noted that identifying the source of particularly potent heroin and cutting off the flow of heroin from the source may ultimately save lives. It also noted that prominent prosecutions of distributors and traffickers can help serve as a deterrent to other potential drug dealers.", "The task force also recommended using coordinated, real time data sharing to disrupt drug supply and to focus prevention, treatment, and intervention resources on the areas that need them most. It highlights the HIDTA program and the OCDETF program as examples of task forces that can be leveraged for information sharing purposes; while these programs have information sharing capacities, it is unclear how rapidly this sharing could be executed to fulfill the task force's recommendation of striving for \"real time\" information sharing."], "subsections": []}]}]}]}}
{"id": "R44844", "title": "SBA\u2019s \u201c8(a) Program\u201d: Overview, History, and Current Issues", "released_date": "2019-04-17T00:00:00", "summary": ["The Minority Small Business and Capital Ownership Development Program\u2014commonly known as the \"8(a) Program\"\u2014provides participating small businesses with training, technical assistance, and contracting opportunities in the form of set-aside and sole-source awards. A set-aside award is a contract in which only certain contractors may compete, whereas a sole-source award is a contract awarded, or proposed for award, without competition. In FY2017, 3,421 8(a) firms were awarded more than $27.1 billion in federal contracts, including $8.0 billion in 8(a) set-aside awards and $8.4 billion in 8(a) sole-source awards. Other programs provide similar assistance to other types of small businesses (e.g., women-owned, HUBZone, and service-disabled veteran-owned).", "8(a) Program eligibility is generally limited to small businesses \"unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and citizens of and residing in the United States\" that demonstrate \"potential for success.\"", "Members of certain racial and ethnic groups are presumed to be socially disadvantaged, although individuals who do not belong to these groups may prove they are also socially disadvantaged. To be economically disadvantaged, an individual must have a net worth of less than $250,000 (excluding ownership in the 8(a) firm and equity in his or her primary residence) at the time of entry into the program. This amount increases to $750,000 for continuing eligibility. In determining whether an applicant has good character, the SBA takes into account any criminal conduct, violations of SBA regulations, or debarment or suspension from federal contracting. For a firm to demonstrate potential for success, it generally must have been in business in its primary industry classification for two years immediately prior to applying to the program. However, small businesses owned by Alaska Native Corporations, Community Development Corporations, Indian tribes, and Native Hawaiian Organizations are eligible to participate in the 8(a) Program under somewhat different terms. Each of these terms is further defined by the Small Business Act, Small Business Administration (SBA) regulations, and judicial and administrative decisions.", "This report examines the 8(a) Program's historical development, key requirements, administrative structures and operations, and the SBA's oversight of 8(a) firms. It also discusses two SBA programs designed to support 8(a) firms, the 7(j) Management and Technical Assistance Program and the 8(a) Mentor-Prot\u00e9g\u00e9 Program, and provides various program statistics. It concludes with an analysis of the following current 8(a) Program issues:", "The SBA's decision to address recent declines in the number of program participants by revising and streamlining the program's application process, an action which the SBA's Office of Inspector General (SBA OIG) reports \"may erode core safeguards that prevented questionable firms from entering the 8(a) Program.\" Reported variation in 8(a) Program service delivery. Reported deficiencies in the oversight of 8(a) Program participant's continuing eligibility. Disagreements concerning the financial thresholds used to determine economic disadvantage, including the SBA's decision to exclude equity in a primary residence from the calculation of an individual's net worth. The adequacy of the performance measures used to evaluate the program's effectiveness in meeting its statutory goals."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Minority Small Business and Capital Ownership Development Program\u2014commonly known as the \"8(a) Program\"\u2014provides participating small businesses with training and technical assistance designed to enhance their ability to compete effectively in the private marketplace. One of the program's major benefits is that 8(a) firms can receive federal contracting preferences in the form of set-aside and sole-source awards. A set-aside award is a contract in which only certain contractors may compete, whereas a sole-source award is a contract awarded, or proposed for award, without competition. As a business development program, its overall goal is for 8(a) firms to graduate from the program and continue to do well in a competitive business environment.", "8(a) Program eligibility is generally limited to small businesses which are \"unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and citizens of and residing in the United States\" and demonstrate \"potential for success.\" However, small businesses owned by Alaska Native Corporations (ANCs), Community Development Corporations (CDCs), Indian tribes, and Native Hawaiian Organizations (NHOs) are also eligible to participate in the 8(a) Program under somewhat different terms. In FY2017, 3,421 8(a) firms were awarded more than $27.1 billion in federal contracts, including $8.0 billion in 8(a) set-aside awards and $8.4 billion in 8(a) sole-source awards. Other programs provide similar assistance to other types of small businesses (e.g., women-owned, HUBZone, and service-disabled veteran-owned).", "Congress has a perennial interest in small business programs, including the 8(a) Program. As stated in the Small Business Act ", "It is the declared policy of the Congress that the Government should aid, counsel, assist, and protect, insofar as is possible, the interests of small-business concerns in order to preserve free competitive enterprise, to insure that a fair proportion of the total purchases and contracts or subcontracts for property and services for the Government (including but not limited to contracts or subcontracts for maintenance, repair, and construction) be placed with small-business enterprises, to insure that a fair proportion of the total sales of Government property be made to such enterprises, and to maintain and strengthen the overall economy of the Nation. ", "The Small Business Act also indicates \"that the opportunity for full participation in our free enterprise system by socially and economically disadvantaged persons is essential if we are to obtain social and economic equality for such persons and improve the functioning of our national economy.\" To help achieve these goals, the 8(a) Program's stated statutory purposes are to ", "(A) promote the business development of small business concerns owned and controlled by socially and economically disadvantaged individuals so that such concerns can compete on an equal basis in the American economy;", "(B) promote the competitive viability of such concerns in the marketplace by providing such available contract, financial, technical, and management assistance as may be necessary; and", "(C) clarify and expand the program for the procurement by the United States of articles, supplies, services, materials, and construction work from small business concerns owned by socially and economically disadvantaged individuals.", "Recent Congresses have had particular interest in the 8(a) Program largely because of its effects on minority-owned small businesses and small businesses' overall role in job creation. ", "8(a) business development assistance has many forms, including business counseling and mentoring, both in online and traditional face-to-face settings; access to capital and surety bond guarantees; contract marketing guidance; and assistance with acquiring federal government surplus property. In addition, the Small Business Administration (SBA) reviews and certifies eligible clients; assigns SBA personnel (Business Opportunity Specialists, BOSs) to monitor and measure each firm's progress through annual reviews, business planning collaboration, and systematic evaluations; helps to identify potential contract opportunities; and markets each firm's technical capabilities to federal agency procurement officials. ", "This report examines the 8(a) Program's historical development, key requirements, administrative structures and operations, and the SBA's oversight of 8(a) firms. It also discusses two SBA programs designed to support 8(a) firms, the 7(j) Management and Technical Assistance Program and the 8(a) Mentor-Prot\u00e9g\u00e9 Program, and provides various program statistics. ", "It concludes with an analysis of the following current 8(a) Program issues:", "The SBA's decision to address recent declines in the number of program participants by revising and streamlining the program's application process, an action which the SBA's Office of Inspector General (SBA OIG) reports \"may erode core safeguards that prevented questionable firms from entering the 8(a) Program.\" Reported variation in 8(a) Program service delivery. Reported deficiencies in the oversight of 8(a) Program participant's continuing eligibility. Disagreements concerning the financial thresholds used to determine economic disadvantage, including the SBA's decision to exclude equity in a primary residence from the calculation of an individual's net worth. The adequacy of the performance measures used to evaluate the program's effectiveness in meeting its statutory goals."], "subsections": []}, {"section_title": "Historical Development", "paragraphs": [], "subsections": [{"section_title": "Program Origins", "paragraphs": ["The current 8(a) Program is the result of the merger of two distinct types of federal programs: those seeking to assist small businesses in general and those seeking to assist racial and ethnic minorities. The merger first occurred, as a matter of executive branch practice, in 1967 and was given a statutory basis in 1978. "], "subsections": [{"section_title": "Federal Programs for Small Businesses", "paragraphs": ["In 1942, Congress first authorized a federal agency to enter into prime contracts with other agencies and subcontract with small businesses for the performance of these contracts. The agency was the Smaller War Plants Corporation (SWPC), which was partly created for this purpose, and Congress gave it these powers to ameliorate small businesses' financial difficulties while \"mobiliz[ing] the productive facilities of small business in the interest of successful prosecution of the war.\" The SWPC's subcontracting authority expired along with the SWPC at the end of the World War II. However, in 1951, at the start of the Korean War, Congress created the Small Defense Plants Administration (SDPA), which was generally given the same powers that the SWPC had exercised. Two years later, in 1953, Congress transferred the SDPA's subcontracting authorities, among others, to the newly created SBA, with the intent that the SBA would exercise these powers in peacetime, as well as in wartime. When the Small Business Act of 1958 transformed the SBA into a permanent agency, this subcontracting authority was included in Section 8(a) of the act. At its inception, the SBA's subcontracting authority was not limited to small businesses owned and controlled by the socially and economically disadvantaged. Under the original Section 8(a), the SBA could contract with any \"small-business concerns or others,\" but it reportedly seldom, if ever, employed this subcontracting authority, focusing instead upon its loan and other programs."], "subsections": []}, {"section_title": "Federal Programs for Racial and Ethnic Minorities", "paragraphs": ["Federal programs for racial and ethnic minorities began developing at approximately the same time as those for small businesses, although there was initially no explicit overlap between them. The earliest programs were created by executive orders, beginning with President Franklin Roosevelt's order on June 25, 1941, requiring that all federal agencies include a clause in defense-related contracts prohibiting contractors from discriminating on the basis of \"race, creed, color, or national origin.\" Subsequent Presidents followed Roosevelt's example, issuing a number of executive orders seeking to improve the employment opportunities for various racial and ethnic groups. These executive branch initiatives took on new importance after the Kerner Commission's report on the causes of the 1966 urban riots concluded that African Americans would need \"special encouragement\" to enter the economic mainstream. ", "Presidents Lyndon Johnson and Richard Nixon laid foundations for the present 8(a) Program in the hope of providing such \"encouragement.\" Johnson created the President's Test Cities Program (PTCP), which involved a small-scale use of the SBA's authority under Section 8(a) to award contracts to firms willing to locate in urban areas and hire unemployed individuals, largely African Americans, or sponsor minority-owned businesses by providing capital or management assistance. However, under the PTCP, small businesses did not have to be minority-owned to receive subcontracts under Section 8(a). Nixon's program was larger and focused more specifically on minority-owned small businesses. During the Nixon Administration, the SBA promulgated its earliest regulations for the 8(a) Program. In 1970, the first of these regulations articulated the SBA's policy of using Section 8(a) to \"assist small concerns owned by disadvantaged persons to become self-sufficient, viable businesses capable of competing effectively in the market place.\" A later regulation, promulgated in 1973, defined disadvantaged persons as including, but not limited to, \"black Americans, Spanish-Americans, oriental Americans, Eskimos, and Aleuts.\" However, the SBA lacked explicit statutory authority for focusing its 8(a) Program on minority-owned businesses until 1978, although courts generally rejected challenges alleging that SBA's implementation of the program was unauthorized because it was \"not specifically mentioned in statute.\""], "subsections": []}, {"section_title": "1978 Amendments to the Small Business Act and Subsequent Regulations", "paragraphs": ["In 1978, Congress amended the Small Business Act to give the SBA express statutory authority for its 8(a) Program for minority-owned businesses. Under the 1978 amendments, the SBA can only subcontract under Section 8(a) with \"socially and economically disadvantaged small business concerns,\" or businesses that are least 51% owned by one or more socially and economically disadvantaged individuals and whose management and daily operations are controlled by such individual(s).", "The 1978 amendments established a basic definition of socially disadvantaged individuals , which included those who have been \"subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.\" They also included congressional findings that \"Black Americans, Hispanic Americans, Native Americans, and other minorities\" are socially disadvantaged. Thus, if an individual was a member of one of these groups, he or she was presumed to be socially disadvantaged. Otherwise, the amendments were generally seen to grant the SBA discretion to recognize additional groups or individuals as socially disadvantaged based upon criteria promulgated in regulations. Under these regulations, which include a three-part test for determining whether minority groups not mentioned in the amendment's findings are disadvantaged, the SBA recognized the racial or ethnic groups listed in Table 1 as socially disadvantaged for 8(a) purposes. The regulations also established standards of evidence to be met by individuals demonstrating personal disadvantage and procedures for rebutting the presumption of social disadvantage accorded to members of recognized minority groups.", "The 1978 amendments also defined economically disadvantaged individuals , for purposes of the 8(a) Program, as \"those socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged.\" In 1989, the SBA established by regulation that personal net worth of less than $250,000 at the time of entry into the program ($750,000 for continuing eligibility) constitutes economic disadvantage. As will be discussed, these financial thresholds have not been adjusted for inflation."], "subsections": []}]}, {"section_title": "Adding \"Disadvantaged\" Groups", "paragraphs": ["Although the 8(a) Program was originally established for the benefit of disadvantaged individuals , in the 1980s, Congress expanded the program to include small businesses owned by four disadvantaged groups . ", "The first owner-group to be included was Community Development Corporations (CDCs). A CDC is", "a nonprofit organization responsible to residents of the area it serves which is receiving financial assistance under part A of this subchapter [42 U.S.C. \u00a7\u00a79805 et seq .] and any organization more than 50 percent of which is owned by such an organization, or otherwise controlled by such an organization, or designated by such an organization for the purpose of this subchapter [42 U.S.C. \u00a7\u00a79801 et seq .].", "Congress created CDCs with the Community Economic Development Act of 1981 and instructed the SBA to issue regulations ensuring that CDCs could participate in the 8(a) Program.", "In 1986, two additional owner-groups, Indian tribes and Alaska Native Corporations (ANCs), became eligible for the program when Congress passed legislation providing that firms owned by Indian tribes, which include ANCs, were to be deemed socially disadvantaged for 8(a) Program purposes. In 1992, ANCs were further deemed to be \"economically disadvantaged.\"", "The final owner-group, Native Hawaiian Organizations (NHOs), was recognized in 1988. An NHO is defined as", "any community service organization serving Native Hawaiians in the State of Hawaii which (A) is a nonprofit corporation that has filed articles of incorporation with the director (or the designee thereof) of the Hawaii Department of Commerce and Consumer Affairs, or any successor agency, (B) is controlled by Native Hawaiians, and (C) whose business activities will principally benefit such Native Hawaiians."], "subsections": []}]}, {"section_title": "Program Requirements", "paragraphs": ["Detailed statutory and regulatory requirements govern 8(a) Program eligibility, set-aside and sole-source awards, and related issues. These requirements are generally the same for all 8(a) firms, although there are instances where there are \"special rules\" for group-owned 8(a) firms. An Appendix to this report compares the requirements applicable to individual owners of 8(a) firms to those applicable to groups owning 8(a) firms (i.e., ANCs, CDCs, NHOs, and Indian tribes)."], "subsections": [{"section_title": "General Requirements", "paragraphs": [], "subsections": [{"section_title": "Program Eligibility", "paragraphs": ["As mentioned previously, 8(a) Program eligibility is limited to \"small business[es] which [are] unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and citizens of and residing in the United States, and which demonstrates potential for success.\" Each of these terms is defined by the Small Business Act; SBA regulations; and judicial and administrative decisions. The eligibility requirements are the same at the time of entry into the program and throughout the program unless otherwise noted. "], "subsections": [{"section_title": "Business", "paragraphs": ["Except for small agricultural cooperatives, a business is a for-profit entity that has a place of business located in the United States and operates primarily within the United States or makes a significant contribution to the U.S. economy by paying taxes or using American products, materials, or labor. For 8(a) Program purposes, businesses are individual proprietorships, partnerships, limited liability companies, corporations, joint ventures, associations, trusts, or cooperatives."], "subsections": []}, {"section_title": "Small", "paragraphs": ["A business is small if it is independently owned and operated; is not dominant in its field of operations; and meets any definitions or standards established by the SBA Administrator. These standards focus primarily upon the size of the business as measured by the number of employees or average annual receipts (gross income for sole proprietorships), but they also take into account the size of other businesses within the same industry. For example, businesses in the field of scheduled passenger air transportation are small if they have 1,500 or fewer employees, whereas those in the data processing field are small if they have average annual receipts of $32.5 million or less. ", "Affiliations among businesses, or relationships allowing one party control or the power of control over another, generally count in size determinations, with the SBA considering \"the receipts, employees, or other measure of size of the concern whose size is at issue and all of its domestic and foreign affiliates, regardless of whether the affiliates are organized for profit.\" Businesses can thus be determined to be other than small because of their involvement in joint ventures, subcontracting arrangements, or franchise or license agreements, among other things, provided that their income or personnel numbers, plus those of their affiliate(s), are over the pertinent size threshold. "], "subsections": []}, {"section_title": "Unconditionally Owned and Controlled", "paragraphs": ["8(a) firms must be \"at least 51% unconditionally and directly owned by one or more socially and economically disadvantaged individuals who are citizens of the United States\" unless they are owned by an ANC, CDC, NHO, or Indian tribe. Ownership is unconditional when it is not subject to any conditions precedent or subsequent, executory agreements, voting trusts, restrictions on or assignments of voting rights, or other arrangements that could cause the benefits of ownership to go to another entity. Ownership is direct when the disadvantaged individuals own the business in their own right and not through an intermediary (e.g., ownership by another business entity or by a trust that is owned and controlled by one or more disadvantaged individuals). Non-disadvantaged individuals and nonparticipant businesses that own at least 10% of an 8(a) business may generally own no more than 10% to 20% of any other 8(a) firm. Nonparticipant businesses that earn the majority of their revenue in the same or similar line of business are likewise barred from owning more than 10% (increasing to 20%-30% in certain circumstances) of another 8(a) firm. ", "In addition, 8(a) firms must be controlled by one or more disadvantaged individuals. \"Control is not the same as ownership\" and includes both strategic policy setting and day-to-day management and administration of business operations. Management and daily business operations must be conducted by one or more disadvantaged individuals unless the 8(a) business is owned by an ANC, CDC, NHO, or Indian tribe. These individuals must have managerial experience \"of the extent and complexity needed to run the concern\" and generally must devote themselves full-time to the business \"during the normal working hours of firms in the same or similar line of business.\" A disadvantaged individual must hold the highest officer position within the business. Non-disadvantaged individuals may otherwise be involved in the management of an 8(a) business, or may be stockholders, partners, limited liability members, officers, or directors of an 8(a) business. However, non-disadvantaged individuals may not exercise actual control or have the power to control the firm or its disadvantaged owner(s), or receive compensation greater than that of the highest-paid officer (usually the chief executive officer or president) without the SBA's approval. "], "subsections": []}, {"section_title": "Socially Disadvantaged Individual", "paragraphs": ["Socially disadvantaged individuals are \"those who have been subjected to racial or ethnic prejudice or cultural bias within American society because of their identities as members of groups and without regard to their individual qualities.\" Members of designated groups, listed in Table 1 , are entitled to a rebuttable presumption of social disadvantage for 8(a) Program purposes, although this presumption can be overcome with \"credible evidence to the contrary.\" Individuals who are not designated-group members must prove they are socially disadvantaged by a preponderance of the evidence. Such individuals must show (1) at least one objective distinguishing feature that has contributed to social disadvantage (e.g., race, ethnic origin, gender, physical handicap, long-term residence in an environment isolated from mainstream American society); (2) personal experiences of substantial and chronic social disadvantage in American society; and (3) negative impact on entry into or advancement in the business world. In assessing the third factor, the SBA will consider all relevant evidence the applicant produces, but must consider the applicant's education, employment, and business history to see if the totality of the circumstances shows disadvantage. Groups not included in Table 1 may obtain eligibility by demonstrating disadvantage by a preponderance of the evidence."], "subsections": []}, {"section_title": "Economically Disadvantaged Individual", "paragraphs": ["Economically disadvantaged individuals are \"socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same or similar line of business who are not socially disadvantaged.\" Individuals claiming economic disadvantage must submit financial documentation for eligibility purposes. The SBA will examine the individual's personal income for the past three years, their net worth, and the fair market value of their assets. However, principal ownership in a prospective or current 8(a) business is generally excluded when calculating net worth, as is equity in individuals' primary residence. For initial eligibility, applicants must have a net worth of less than $250,000. For continued eligibility, net worth must be less than $750,000."], "subsections": []}, {"section_title": "Good Character", "paragraphs": ["In determining whether an applicant to, or participant in, the 8(a) Program possesses good character , the SBA considers any criminal conduct, violations of SBA regulations, current debarment or suspension from government contracting, managers or key employees who lack business integrity, and the knowing submission of false information to the SBA. "], "subsections": []}, {"section_title": "Demonstrated Potential for Success", "paragraphs": ["For a firm to have demonstrated potential for success, it generally must have been in business in its primary industry classification for at least two full years immediately prior to the date of its application to the 8(a) Program. However, the SBA may grant a waiver allowing firms that have been in business for less than two years to enter the program under specified circumstances."], "subsections": []}]}, {"section_title": "Set-Asides and Sole-Source Awards Under Section 8(a)", "paragraphs": ["Section 8(a) of the Small Business Act authorizes agencies to award contracts for goods or services, or to perform construction work, to the SBA for subcontracting to 8(a) firms. The act also authorizes the SBA to delegate the function of executing contracts to the procuring agencies and often does so. ", "A set-aside award is a contract awarded in which only certain contractors may compete, whereas a sole-source award is a contract awarded, or proposed for award, without competition. The Competition in Contracting Act (CICA) generally requires federal agencies to allow full and open competition through the use of competitive procedures when procuring goods or services. However, set-aside and sole-source awards to 8(a) firms are permissible under CICA under certain circumstances. In fact, an 8(a) set-aside is a recognized competitive procedure. Agencies are effectively encouraged to subcontract through the 8(a) Program because there are government-wide and agency-specific goals regarding the percentage of procurement dollars awarded to small disadvantaged businesses, which include 8(a) firms (the current government-wide goal is 5% of all small business eligible federal contracts)."], "subsections": [{"section_title": "Discretion to Subcontract Through the 8(a) Program", "paragraphs": ["There are few limits on agency discretion to subcontract through the 8(a) Program. However, the SBA is prohibited by regulation from accepting procurements for award under Section 8(a) when", "1. the procuring agency issued a solicitation for or otherwise expressed publicly a clear intent to reserve the procurement as a set-aside for small businesses not participating in the program prior to offering the requirement to the SBA for award as an 8(a) contract; 2. the procuring agency competed the requirement among 8(a) firms prior to offering the requirement to the SBA and receiving the SBA's acceptance of it; or 3. the SBA makes a written determination that \"acceptance of the procurement for 8(a) award would have an adverse impact on an individual small business, a group of small businesses located in a specific geographical location, or other small business programs.\"", "In addition, the SBA is barred from awarding an 8(a) contract, either via a set-aside or on a sole-source basis, \"if the price of the contract results in a cost to the contracting agency which exceeds a fair market price.\" ", "Otherwise, agency officials may offer contracts to the SBA \"in [their] discretion,\" and the SBA may accept requirements for the 8(a) Program \"whenever it determines such action is necessary or appropriate.\" The courts and the Government Accountability Office (GAO) will generally not hear protests of agencies' determinations regarding whether to procure specific requirements through the 8(a) Program unless it can be shown that government officials acted in bad faith or contrary to federal law."], "subsections": []}, {"section_title": "Monetary Thresholds and Subcontracting Mechanisms", "paragraphs": ["Once the SBA has accepted a contract for the 8(a) Program, the contract is awarded through either a set-aside or on a sole-source basis, with the contract amount generally determining the acquisition method used. When the contract's anticipated total value, including any options, is less than $4 million ($7 million for manufacturing contracts), the contract is normally awarded without competition. In contrast, when the contract's anticipated value exceeds these thresholds, the contract generally must be awarded via a set-aside with competition limited to 8(a) firms so long as there is a reasonable expectation that at least two eligible and responsible 8(a) firms will submit offers and the award can be made at fair market price. Sole-source awards of contracts valued at $4 million ($7 million or more for manufacturing contracts) may be made only when (1) there is not a reasonable expectation that at least two eligible and responsible 8(a) firms will submit offers at a fair market price or (2) the SBA accepts the requirement on behalf of an 8(a) firm owned by an Indian tribe, an ANC or, in the case of Department of Defense contracts, an NHO. Requirements valued at more than $4 million ($7 million for manufacturing contracts) cannot be divided into several acquisitions at lesser amounts in order to make sole-source awards. ", "In addition, the Federal Acquisition Regulatory Council has the responsibility of adjusting each acquisition-related dollar threshold (including those for the 8(a) Program), on October 1, of each year that is evenly divisible by five. The next adjustment for inflation will take place on October 1, 2020."], "subsections": []}]}, {"section_title": "Other Requirements", "paragraphs": ["Other key 8(a) Program requirements include the following: ", "Inability to protest an 8(a) firm's eligibility for an award . When the SBA makes or proposes an award to an 8(a) firm, the firm's eligibility cannot be challenged or protested as part of the solicitation or proposed contract award. Instead, information concerning a firm's eligibility must be submitted to the SBA in accordance with separate requirements contained in Section 124.517 of Title 13 of the Code of Federal Regulations . Nine-year m aximum participation. Firms may participate in the program for no more than nine years from the date of their admission, although they may be terminated or graduate from the program before nine years have passed. One-time eligibility . Once a firm or a disadvantaged individual upon whom a firm's eligibility was based has exited the program after participating in it for any length of time, neither the firm nor the individual is generally eligible to participate in the program again. Firms are considered identical for purposes of program eligibility when at least 50% of the assets of one firm are the same as those of another firm. Ownership l imit ation s on family members of current or former 8(a) firm owners . Individuals generally may not use their disadvantaged status to qualify a firm for the program if the individual has an immediate family member who is using, or has used, the disadvantaged status to qualify a firm for the program. Award Limit ations. In general, 8(a) firms may not receive additional 8(a) sole-source awards once they have been awarded a combined total of competitive and sole-source awards in excess of $100 million, in the case of firms whose size is based on their number of employees, or in excess of an amount equivalent to the lesser of (1) $100 million or (2) five times the size standard for the industry, in the case of firms whose size is based on their revenues. In addition, 8(a) firms in the transitional stage , or the last five years of participation, must achieve annual targets for the amount of revenues they receive from non-8(a) sources. These targets increase over time, with firms required to attain 15% of their revenue from non-8(a) sources in the fifth year, 25% in the sixth year, 35% in the seventh year, 45% in the eight year, and 55% in the ninth year. Firms that do not display the relevant percentages of revenue from non-8(a) sources are ineligible for sole-source 8(a) contracts \"unless and until\" they correct the situation. Subcontracting Limitations . Federal subcontracting limitations require small businesses receiving contracts under set-asides to perform work that equals certain minimum percentages of the amount paid under the contract. Specifically, small businesses must generally perform at least 50% of the costs of the contract incurred for personnel with its own employees, in the case of service contracts; and at least 50% of the cost of manufacturing supplies or products (excluding the cost of materials), in the case of manufacturing contracts."], "subsections": []}]}, {"section_title": "Requirements for Tribally, ANC-, NHO-, and CDC-Owned Firms", "paragraphs": ["Tribes, Alaska Native Corporations (ANCs), Native Hawaiian Organizations (NHOs) or Community Development Corporations (CDCs) themselves generally do not participate in the 8(a) Program. Rather, businesses that are at least 51% owned by such entities participate in the program, although the rules governing their participation are somewhat different from those for the program generally. "], "subsections": [{"section_title": "Program Eligibility", "paragraphs": [], "subsections": [{"section_title": "Small", "paragraphs": ["Firms owned by Indian tribes, ANCs, NHOs, and CDCs must be deemed small under the SBA's size standards. However, certain affiliations with the owning entity or other business enterprises of that entity are excluded in size determinations unless the SBA Administrator determines that a small business owned by an ANC, CDC, NHO, or Indian tribe \"[has] obtained, or [is] likely to obtain, a substantial unfair competitive advantage within an industry category\" because of such exclusions. Other affiliations of small businesses owned by ANCs, CDCs, NHOs, and Indian tribes may be included in size determinations, and ANC-owned firms, in particular, have been subjected to early graduation from the 8(a) Program because they exceeded size standards."], "subsections": []}, {"section_title": "Business", "paragraphs": ["Firms owned by ANCs, CDCs, NHOs, and Indian tribes must be \"businesses\" under the SBA's definition. Although ANCs themselves may be for-profit or nonprofit, ANC-owned businesses must be for-profit to participate in the program. "], "subsections": []}, {"section_title": "Unconditionally Owned and Controlled", "paragraphs": ["Firms owned by ANCs, CDCs, NHOs, or Indian tribes must be unconditionally owned and substantially controlled by the ANC, CDC, NHO, or Indian tribe, respectively. However, under SBA regulations, tribally or ANC-owned firms may be managed by individuals who are not members of the tribe or Alaska Natives if the firm can demonstrate:", "that the Tribe [or ANC] can hire and fire those individuals, that it will retain control of all management decisions common to boards of directors, including strategic planning, budget approval, and the employment and compensation of officers, and that a written management development plan exists which shows how Tribal members will develop managerial skills sufficient to manage the concern or similar Tribally-owned concerns in the future. ", "NHO-owned firms must demonstrate that the NHO controls the board of directors. However, the individual who is responsible for the NHO-owned firm's day-to-day management need not establish personal social and economic disadvantage. CDCs are to be managed and have their daily operations conducted by individuals with \"managerial experience of an extent and complexity needed to run the [firm].\""], "subsections": []}, {"section_title": "Socially Disadvantaged", "paragraphs": ["As owners of prospective or current 8(a) firms, Indian tribes, ANCs, NHOs, and CDCs are all presumed to be socially disadvantaged. "], "subsections": []}, {"section_title": "Economically Disadvantaged", "paragraphs": ["By statute, ANCs are deemed to be economically disadvantaged, and CDCs are similarly treated as economically disadvantaged. In contrast, Indian tribes and NHOs must establish economic disadvantage. Indian tribes must present data on, among other things, the number of tribe members; the tribe members' unemployment rate and per capita income; the percentage of the local Indian population above the poverty level; the tribe's access to capital and assets as disclosed in current financial statements; and all businesses wholly or partially owned by tribal enterprises or affiliates, as well as their primary industry classification. Effective August 24, 2016, NHOs establish economic disadvantage in the same manner as Indian tribes. Prior to this revision, the SBA considered \"the individual economic status of NHO's members,\" the majority of whom had to qualify as economically disadvantaged, under the same standards as individual applicants to the program.", "Once a tribe or NHO has established that it is economically disadvantaged for purposes of one 8(a) business, it need not reestablish economic disadvantage in order to have other businesses certified for the program unless the Director of the Office of Business Development requires it to do so. "], "subsections": []}, {"section_title": "Good Character", "paragraphs": ["The SBA's regulations governing tribally and ANC-owned 8(a) firms explicitly state that the good character requirement applies only to officers or directors of the firm, or shareholders owning more than a 20% interest. NHO-owned firms may be subject to the same requirements in practice. With CDC-owned firms, the firm itself and \"all of its principals\" must have good character."], "subsections": []}, {"section_title": "Demonstrated Potential for Success", "paragraphs": ["Firms owned by ANCs, CDCs, NHOs, and Indian tribes may provide evidence of potential for success in several ways:", "1. The firm has been in business for at least two years, as shown by individual or consolidated income tax returns for each of the two previous tax years showing operating revenues in the primary industry in which the firm seeks certification. 2. The individuals who will manage and control the firm's daily operations have substantial technical and management experience; the firm has a record of successful performance on government or other contracts in its primary industry category; and the firm has adequate capital to sustain its operations and carry out its business plan. 3. The owner-group has made a firm written commitment to support the firm's operations and has the financial ability to do so.", "The first of these ways for demonstrating potential for success is the same for individually owned firms, and the second arguably corresponds to the circumstances in which the SBA may waive the requirement that individually owned firms have been in business for at least two years. There is no equivalent to the third way for individually owned firms, and some commentators have suggested that this provision could \"benefit ANCs [and other owner groups] by allowing more expeditious and effortless access to 8(a) contracts for new concerns without having to staff new subsidiaries with experienced management.\""], "subsections": []}, {"section_title": "Report of Benefits for Firms Owned By ANCs, Indian Tribes, NHOs, and CDCs", "paragraphs": ["8(a) firms owned by ANCs, CDCs, NHOs, and Indian tribes must submit information with its annual financial statement to the SBA showing", "how the Tribe, ANC, NHO or CDC has provided benefits to the Tribal or native members and/or the Tribal, native or other community due to the Tribe's/ANC's/NHO's/CDC's participation in the 8(a) \u2026 program through one or more firms. This data includes information relating to funding cultural programs, employment assistance, jobs, scholarships, internships, subsistence activities, and other services provided by the Tribe, ANC, NHO or CDC to the affected community."], "subsections": []}]}, {"section_title": "Set-Asides and Sole-Source Awards", "paragraphs": ["Similar to other participants, firms owned by ANCs, CDCs, NHOs, and Indian tribes are eligible for 8(a) set-asides and may receive sole-source awards valued at less than $4 million ($7 million for manufacturing contracts). However, firms owned by ANCs and Indian tribes can also receive sole-source awards in excess of $4 million ($7 million for manufacturing contracts) even when contracting officers reasonably expect that at least two eligible and responsible 8(a) firms will submit offers and the award can be made at fair market price. NHO-owned firms may receive sole-source awards from the Department of Defense under the same conditions. "], "subsections": []}, {"section_title": "Other Requirements", "paragraphs": ["Firms owned by ANCs, CDCs, NHOs, and Indian tribes are governed by the same regulations as other 8(a) firms in which certain of the \"other requirements\" are involved, including (1) inability to protest an 8(a) firm's eligibility for an award; (2) maximum of nine years in the program (for individual firms); and (3) limits on subcontracting. However, requirements for such firms differ somewhat from those for other 8(a) firms, including the one-time eligibility for the 8(a) Program; limits on majority ownership of 8(a) firms; and limits on the amount of 8(a) contracts that a firm may receive. Firms owned by ANCs, CDCs, NHOs, and Indian tribes may participate in the 8(a) Program only one time. However, unlike the disadvantaged individuals upon whom other firms' eligibility for the 8(a) Program is based, ANCs, CDCs, NHOs, and Indian tribes may confer program eligibility upon firms on multiple occasions and for an indefinite period. In addition, ANCs, CDCs, NHOs, and Indian tribes may not own 51% or more of another firm that \"either at the time of application or within the previous two years,\" obtains the majority of its revenue from the same \"primary\" industry as the applicant. However, there are no limits on the number of firms they may own that operate in other primary industries. Moreover, ANCs, CDCs, NHOs, and Indian tribes may own multiple firms that earn less than 50% of their revenue in the same \"secondary\" industries. Finally, firms owned by ANCs, CDCs, NHOs, and Indian tribes may continue to receive additional sole-source awards even after they have received a combined total of competitive and sole-source 8(a) contracts in excess of the dollar amount set forth in Section 124.519 of Title 13 of the Code of Federal Regulations . Individually owned firms may not exceed this threshold. However, firms owned by any of these four types of entities are subject to the same requirements regarding the percentages of revenue received from non-8(a) sources at various stages of their participation in the program as other 8(a) firms. "], "subsections": []}]}]}, {"section_title": "Organizational Structure", "paragraphs": ["The SBA's Office of Business Development (BD), housed within the Office of Government Contracts and Business Development, oversees the 8(a) Program. BD has three offices: the Office of Certification and Eligibility (OCE), the Office of Management and Technical Assistance (OMTA); and the Office of Program Review (OPR). Their functions are provided in the footnote below.", "Applications for the 8(a) Program are processed at one of two central office duty stations (CODS), one located in San Francisco, CA, and the other in Philadelphia, PA. Applicants apply to the CODS that serve the territory where the applicant's principal place of business is located. Business Opportunity Specialists (BOSs) work directly with 8(a) firms in district offices under the general supervision of the SBA's Office of Field Operations (OFO). Although BOSs report to the SBA's OFO, they interact extensively with BD, which is located in the SBA's headquarters building in Washington, DC. As will be discussed, GAO and others have argued that this overlapping organizational structure may \"create programmatic challenges.\""], "subsections": []}, {"section_title": "The Application Process", "paragraphs": ["Prior to applying for certification, firms must complete all requirements for contracting with the federal government (e.g., get a free D-U-N-S number\u2014a unique nine-digit identification number of each physical business location from Dun and Bradstreet; obtain a free tax identification number or employer identification number from the Internal Revenue Service; create a profile in the federal System for Award Management, and get a free SBA general login system user ID). ", "The SBA's district office staff generally encourage potential 8(a) Program applicants \"to attend an information session to obtain information regarding the program and its eligibility criteria prior to filing an application \u2026 [and] also refer the applicant to SBA's website for forms, specific eligibility criteria, pertinent regulatory sections in the Code of Federal Regulations, and overall information on the program.\"", "In an attempt to encourage more applicants, the SBA revised and streamlined the 8(a) Program's application process in 2016 by accepting online applications only (hard copy applications are no longer accepted) and eliminating the requirement for a wet signature application; a completed IRS Form 4506T, Request for Copy or Transcript of Tax Form, in every case; and narrative statements in support of the applicants' claims of economic disadvantage. That determination is now based solely on an analysis of objective financial data relating to the individual's net worth, income and total assets. In addition, to prevent what it viewed as unnecessary delays for minor infractions that may have \"occurred many years ago\" and may have \"nothing to do with the individual's business integrity,\" the SBA made optional the automatic suspension of consideration and referral to the SBA OIG of all applications with adverse information regarding the applicant's or any of its principals' possible criminal conduct.", "Despite these changes, applicants still have a relatively long list of supporting documents (and required SBA Forms) that they must submit, including the following:", "Signed and dated federal income tax returns for the firm and all individuals that either own more than 10% of the firm or have a key position in the firm for the past three years preceding the date of application (including all forms, statements, schedules and attachments). The firm's financial statements, balance sheet, and profit and loss statements for the past three years (including the most recent balance sheet, current within 90 days of application). A completed personal financial statement form (from all principals and their spouses), including a list of all assets, liabilities, real estate and other personal property, including transferred assets, information on delinquent federal obligations, past due taxes or liens, bankruptcy filings and pending civil lawsuits, and a list of any SBA loans for the firm and other businesses owned by the principal(s). A list or chart of the firm's current and past federal and nonfederal contracts within the most recently completed fiscal year. A list of any lease agreements. Proof of signature authority on the firm's bank account(s) (i.e., signature card(s) for firm bank account(s) or letter from the bank). Documented proof of contributions: (1) used to acquire ownership (for each owner), (2) of any transfer of assets to or from the firm, and (3) of any transfer of assets to or from any of the firm's owners over the past two years. State filings (signed, dated and stamped by the state where the firm does business) and certificate of good standing. List of any foreign corporation filings. Articles of incorporation, articles of organization, any DBA (\"doing business as\") filings, governing documents signed by the principals, bylaws, operating agreements, partnership agreements, and meeting minutes. Any stock certificates and ledgers. Proof of social disadvantage from majority owners and firm managers. Background information and personal information from all principals, including a resume, a completed Statement of Personal History form, proof of U.S. citizenship or naturalization, duties within the firm and time devotion, a list of other business interests and time devotion, and the nature of outside employment and time devotion. Documentation addressing how the firm meets specified objectives, if it is applying for a two-year waiver.", "As mentioned previously, applications are processed at the San Francisco or Philadelphia CODS. In general, the SBA processes an application and issues a decision letter within 90 days of the receipt of an application package. The processing time will be suspended only if an applicant is referred to the SBA OIG, for a formal size determination, or both.", "Applicants are notified within 15 days of receipt whether the application package is complete or incomplete. The SBA will not process an incomplete application. Complete means that the application is ready to be processed. ", "A BOS, at one of the CODS, initially reviews the application. If, during the eligibility review process, it is determined that an application is incomplete, the BOS may request additional information or clarification \"via a delivery method that tracks delivery and provides return receipt capability.\" The applicant must provide the requested information within five calendar days of receipt of the request. Failure to meet the deadline may result in the applicant's ineligibility to participate in the program. However, a request for additional information does not stop the 90-day processing clock. \"Once the requested information is provided, the case may require priority handling in order for the CODS to complete the eligibility review within the required timeframe.\"", "After the initial review, the BOS submits the case file, the BOS analysis, and a decision letter to the CODS' chief for review. The chief examines the BOS analysis and decision letter to verify that all required steps and regulations have been properly applied. Upon completing the examination, the chief returns the case file and attachments to the BOS along with any applicable comments and recommendations.", "The BOS then makes any changes or corrections to the analysis or decision letter as requested by the chief. The chief then signs and returns the case file to the processing BOS. The chief makes his or her recommendation in the electronic application system (which is equivalent to transmitting it to the OCE's director, who approves or declines the application largely based on the CODS' review).", "After the OCE review, the associate administrator for Business Development (AA/BD) ultimately approves or declines the application in writing. The electronic application system notifies the firm by issuing an approval or declination letter. All declination letters must clearly explain the reason(s) why the firm was found to be ineligible, including a direct reference to regulatory provisions that the applicant failed to satisfy. The letter must also include the applicant's right to request reconsideration and, if applicable, to appeal the decision to the SBA's Office of Hearings and Appeals.", "As discussed below in the \"Current Issues\" section, the SBA and others have identified the application process, and its relatively high rate of rejection, as an impediment to the 8(a) Program's growth."], "subsections": []}, {"section_title": "Business Opportunity Specialists and Reporting Requirements", "paragraphs": ["BOSs assist both prospective and existing 8(a) firms with questions related to the application process, required forms, and the program's various eligibility, reporting, and performance requirements. BOSs also provide general business development assistance, assist with the firm's planning and establishment of goals, work with the firm as it develops and submits its required business plan, and ensure that the firm is on track regarding anticipated business growth. BOSs \"on-going responsibility is to assist the Participant in developing its business to the fullest extent possible so that it attains competitive viability during its program participation term, and maintains viability thereafter.\" As directed, BOSs accomplish this by (1) helping the firm identify its strengths and weaknesses; (2) providing advice, counsel, and guidance in the areas of marketing to the federal government, prime contracting, and contract administration; (3) referring the firm to appropriate internal and external resources for assistance in technical, management, and financial matters; and (4) monitoring the firm's progress in the program and its compliance with program requirements.", "8(a) firms must demonstrate program compliance by reporting specific information to the SBA on an as needed, periodic, or requested basis. Much of the reporting is accomplished through the required annual review, which focuses on the firm and its business development, and the continuing eligibility review. ", "The annual review requires numerous forms and documentation, including the following:", "Form 1450\u20148(a) Annual Update Review (information about the firm, including its tenure in the program, current financial data, business development targets, loans and other sources of capital, and applicable bonding information); Form 1623\u2014Certification Regarding Debarment, Suspension, and Other Responsibility Matters Primary Covered Transactions (detailed information regarding any debarments, suspensions, or other potentially adverse matters); Form 1790\u2014Representatives Used and Compensation Paid for Services in Connection with Obtaining Federal Contracts (required semiannually, includes a list of any agents, representatives, accountants, consultants, etc. that receive fees, commissions, or compensation of any kind to assist the firm in obtaining or seeking federal contracts); Form 912\u2014Statement of Personal History (information related to claiming disadvantaged status for all officers, directors, general partners, managing members, and holders of more than 10% ownership in the firm); and Form 413\u2014Personal Financial Statement (information concerning the owner's and their spouse's personal net worth).", "8(a) firms are also required to provide any updates or modifications to their business plan. If the firm participates in the 8(a) Mentor-Prot\u00e9g\u00e9 Program (see below) it must provide \"a narrative report detailing the contracts it has had with its mentor and benefits it has received from the mentor/prot\u00e9g\u00e9 relationship.\" In addition, the firm must provide a report for each 8(a) contract performed during the year \"explaining how the performance of work requirements are being met for the contract, including any 8(a) contracts performed as a joint venture.\"", "In 2010, GAO reported that the district staff's \"dual role of advocacy for and monitoring of the firms may have contributed in part to the retention of ineligible firms.\" In response, in 2012, the SBA shifted responsibility for processing the continued eligibility portion of the required annual review from BOSs located in the SBA district offices to its Washington, DC, office. While BOSs continue to perform other components of the annual review, \"shifting the responsibility for processing continued eligibility to headquarters was designed to eliminate conflict of interest for district offices associated with performing both assistance and oversight roles.\" ", "8(a) firms may leave the program by any of the following means:", "voluntary withdrawal; voluntary early graduation (where the firm voluntarily decides to leave the program after the SBA has determined that the firm has substantially achieved its business plan's targets, objectives, and goals and has demonstrated the ability to compete in the marketplace without program assistance); involuntary early graduation (where the SBA requires a firm to leave the program because it has determined that the firm has substantially achieved its business plan's targets, objectives, and goals and has demonstrated the ability to compete in the marketplace without program assistance; or one or more of the disadvantaged owners upon whom the firm's eligibility is based are no longer economically disadvantaged); termination for good cause; expiration of the program term (maximum of nine years) without meeting the SBA's graduation requirements; or graduation at the expiration of the program term."], "subsections": []}, {"section_title": "7(j) Management and Technical Assistance Program", "paragraphs": ["The SBA's 7(j) Management and Technical Assistance Program assists 8(a) firms by providing management and technical assistance training. The program's origin dates back to 1970 when the SBA issued regulations creating the 8(a) contracting program to \"assist small concerns owned by disadvantaged persons to become self-sufficient, viable businesses capable of competing effectively in the market place.\" Using its statutory authority under Section 7(j) of the Small Business Act to provide management and technical assistance through contracts, grants, and cooperative agreements to qualified service providers, the regulations specified that \"the SBA may provide technical and management assistance to assist in the performance of the subcontracts.\"", "On October 24, 1978, P.L. 95-507 , To amend the Small Business Act and the Small Business Investment Act of 1958, provided the SBA explicit statutory authority to extend financial, management, technical, and other services to socially and economically disadvantaged small businesses. The SBA's current regulations indicate that the 7(j) Management and Technical Assistance Program will, \"through its private sector service providers [deliver] a wide variety of management and technical assistance to eligible individuals or concerns to meet their specific needs, including: (a) counseling and training in the areas of financing, management, accounting, bookkeeping, marketing, and operation of small business concerns; and (b) the identification and development of new business opportunities.\" Eligible individuals and businesses include \"8(a) certified firms, small disadvantaged businesses, businesses operating in areas of high unemployment or low income, or small businesses owned by low income individuals.\" ", "As shown in Table 2 , 6,483 small businesses received 7(j) program assistance in FY2018. The SBA has been marketing the 7(j) program to 8(a) firms in an effort increase awareness of the program, to help those small businesses \"better prepare themselves for federal contracting opportunities,\" and to retain 8(a) firms in the 8(a) program.", " Table 2 also shows the amount of total administrative resources the SBA provides the 7(j) program each year."], "subsections": []}, {"section_title": "8(a) Mentor-Prot\u00e9g\u00e9 Program183", "paragraphs": ["The SBA established the 8(a) Mentor-Prot\u00e9g\u00e9 Program on July 30, 1998. The program is designed to \"enhance the capabilities\" of 8(a) firms and \"improve [their] ability to successfully compete for contracts\" by providing various forms of assistance, including technical or management training, financial assistance in the form of equity investments or loans, subcontracts, trade education, and assistance in performing prime contracts with the federal government through joint venture agreements.", "Although the SBA established the 8(a) Mentor-Prot\u00e9g\u00e9 Program and SBA rules govern participation in the program, the 8(a) Mentor-Prot\u00e9g\u00e9 Program is government-wide in the sense that firms may enjoy the benefits of participation in the program while performing the contracts of any federal agency. In fact, when agencies that do not have their own mentor-prot\u00e9g\u00e9 programs are involved, the 8(a) Mentor-Prot\u00e9g\u00e9 Program may be referred to as if it were that agency's program.", "The SBA's Office of Business Development (BD) administers the 8(a) Mentor-Prot\u00e9g\u00e9 Program. This makes it somewhat different from agency-specific mentor-prot\u00e9g\u00e9 programs, which are generally administered by the agency's Office of Small and Disadvantaged Business Utilization (OSDBU) and may involve coordination with agency contracting offices.", "SBA regulations govern various aspects of the 8(a) Mentor-Prot\u00e9g\u00e9 Program, including who may qualify as a mentor or prot\u00e9g\u00e9, the content of written agreements between mentors and prot\u00e9g\u00e9s, and the SBA's evaluation of the mentor-prot\u00e9g\u00e9 relationship. For example, mentors must be for-profit concerns that demonstrate a commitment and the ability to assist developing 8(a) firms, including large firms, other small businesses, firms that have graduated from the program, and other 8(a) firms that are in the transitional stage , or final five years of the program. Only SBA approved firms may serve as mentors, and each mentor must (1) demonstrate that it \"is capable of carrying out its responsibilities to assist the prot\u00e9g\u00e9 firm under the proposed mentor-prot\u00e9g\u00e9 agreement\"; (2) possess good character; (3) not be debarred or suspended from government contracting; and (4) be able to \"impart value to a prot\u00e9g\u00e9 firm due to lessons learned and practical experienced gained because of the [8(a) program], or through its knowledge of general business operations and government contracting.\"", "Prot\u00e9g\u00e9s, in turn, are required to be small businesses owned and controlled by socially and economically disadvantaged individuals that are in good standing in the 8(a) Program. Prot\u00e9g\u00e9s must also qualify as small for the size standard corresponding to their primary (or, under specified circumstances, their secondary) North American Industry (NAICS) code and demonstrate how the business development assistance to be received through the mentor-prot\u00e9g\u00e9 relationship would advance the goals and objectives set forth in their business plans. ", "Mentors are generally expected to have only one prot\u00e9g\u00e9 at a time. However, mentors may have up to three prot\u00e9g\u00e9s at one time provided they can demonstrate that \"the additional mentor/prot\u00e9g\u00e9 relationship[s] will not adversely affect the development of either prot\u00e9g\u00e9 firm.\" Similarly, prot\u00e9g\u00e9s are expected to have one mentor at a time. However, prot\u00e9g\u00e9s may, under specified circumstances, have two mentors.", "Mentors and prot\u00e9g\u00e9s are required to enter a written agreement, approved by the SBA's AA/BD which sets forth the prot\u00e9g\u00e9's needs and describes the mentor's assistance. This agreement generally obligates the mentor to furnish assistance to the prot\u00e9g\u00e9 for at least one year, although it does allow either mentor or prot\u00e9g\u00e9 to terminate the agreement with 30 days' advance notice to the other party and the SBA. ", "Unless rescinded in writing, the mentor-prot\u00e9g\u00e9 agreement automatically renews for another year. The term of a mentor-prot\u00e9g\u00e9 agreement is limited to three years but may be extended for a second three-year period.", "The 8(a) Mentor-Prot\u00e9g\u00e9 Program is intended to benefit both mentors and prot\u00e9g\u00e9s. Serving as a mentor to an 8(a) firm counts toward any subcontracting requirements to which the mentor firm may be subject under Section 8(d) of the Small Business Act. Section 8(d) requires that all federal contractors awarded a contract valued in excess of $700,000 ($1.5 million for construction contracts) that offers subcontracting possibilities agree to a \"subcontracting plan\" that ensures small businesses have \"the maximum practicable opportunity to participate in [contract] performance.\" ", "In addition, in certain circumstances, mentors may form joint ventures with their prot\u00e9g\u00e9s that are eligible to be awarded an 8(a) contract or another contract set aside for small businesses. Mentor firms and joint ventures involving mentor firms would otherwise generally be ineligible for such contracts because they would not qualify as small under SBA regulations. Mentor firms may also acquire an equity interest of up to 40% in the prot\u00e9g\u00e9 firm in order to help the prot\u00e9g\u00e9 firm raise capital. Because mentor firms are not 8(a) participants, they would generally be prohibited from owning more than 10%-20% of an 8(a) firm. However, their participation in the 8(a) Mentor-Prot\u00e9g\u00e9 Program permits them to acquire a larger ownership share.", "Prot\u00e9g\u00e9s not only receive various forms of assistance from their mentors, but also may generally retain their status as \"small businesses\" while doing so. If they received similar assistance from entities other than their mentors, they could risk being found to be other than \"small\" because of how the SBA determines size. The SBA combines the gross income of the firm, or the number of its employees, with those of its \"affiliates\" when determining whether the firm is small, and the SBA could potentially find that firms are affiliates because of assistance such as that which mentors provide to prot\u00e9g\u00e9s. However, SBA regulations provide that \"[n]o determination of affiliation or control may be found between a prot\u00e9g\u00e9 firm and its mentor based on the mentor-prot\u00e9g\u00e9 agreement or any assistance provided pursuant to the agreement.\"", "As of September 30, 2017, there were\u00a0314 active 8(a) mentor-prot\u00e9g\u00e9 agreements."], "subsections": []}, {"section_title": "8(a) Program Statistics", "paragraphs": ["As shown in Table 3 , the number of 8(a) firms assisted by SBA Business Opportunity Specialists (BOS) has declined somewhat since FY2010, the number of federal contracts awarded to 8(a) firms increased from 3,421 in FY2017 to 3,709 in FY2018, and the 8(a) program's administrative costs have increased. ", "As shown in Table 4 , in FY2017, 8(a) firms were awarded $27.167 billion in federal contracts (5.14% of all federal contracts awarded). Of that amount, these firms received $7.971 billion through an 8(a) set-aside award, $8.445 billion through an 8(a) sole-source award, and $6.110 billion through either open competition or with another small business preference applied (e.g., small business set-aside and HUBZone set-aside or sole-source award).", "From FY2010 through FY2017, 8(a) firms were awarded, on average, approximately 5.45% of the total amount of federal contracts awarded, ranging from a low of 4.97% of all federal contracts in FY2011 to a high of 6.11% in FY2014. ", "During this period, 8(a) firms received about $214.902 billion in federal contracts: $58.609 billion through an 8(a) set-aside (27.2% of all 8(a) contracts), $73.544 billion through an 8(a) sole-source award (34.3% of all 8(a) contracts), and $82.749 billion through either open competition or with another small business preference applied (38.5% of all 8(a) contracts). "], "subsections": []}, {"section_title": "Current Issues", "paragraphs": ["The SBA faces several challenges concerning the 8(a) Program, including a recent decline in participation, reported variation in program service delivery, disagreements related to the program's financial thresholds used to determine economic disadvantage, and concerns related to the performance measures used to evaluate the program's success."], "subsections": [{"section_title": "Declining Participation", "paragraphs": ["Noting that the number of certified 8(a) firms had declined from 2010 to 2015, the SBA announced in 2015 that it was establishing a goal to \"increase the number of approved firms\" in the program by 5% in FY2016 and FY2017. In an effort to achieve this goal and increase 8(a) Program retention, the SBA", "initiated a pilot program to streamline the program's application process; increased its marketing of the 7(j) Management and Training Assistance Program to 8(a) firms; increased its efforts to expand the 8(a) Mentor-Prot\u00e9g\u00e9 Program by streamlining that program's application process, shortening its application response time from 45 days to 10 days, and initiating an annual mentor-prot\u00e9g\u00e9 conference to help 8(a) firms become more knowledgeable about the potential benefits of joint ventures and the various rules and compliance requirements for mentor-prot\u00e9g\u00e9 agreements.", "The SBA presented four reasons to streamline the program's application process: ", "1. Although regulatory guidance provides the SBA approximately 90 days to process a complete application, several firms endured delays that extended anywhere from six months to several years. 2. Nearly three-quarters of 8(a) applications are initially rejected due to incomplete or missing documentation. 3. Less than half of complete applications are approved. 4. The SBA's low rate of approval has led to an industry of third party firms that charge 8(a) applicants from $5,000 to $75,000 to prepare the application and respond to the SBA's processors. The SBA argued that some of these firms are taking advantage of applicants, and regardless of the amount paid, there is no guaranteed approval because the approval rate is consistently less than 50%. ", "The SBA reported that it certified 568 applicants to the 8(a) Program in FY2015 (before the streamlined process), 911 in FY2016 (after the streamlined process was instituted on a pilot basis), and 557 in FY2017. The agency declared the pilot streamlined application process a success. However, the SBA's OIG has argued that shortening the review process by eliminating required documents may erode core safeguards that prevented questionable firms from entering the program:", "Federal prosecutors have told OIG that it would be difficult for them to describe SBA, the procuring agency, or honest 8(a) competitors as fraud victims when SBA is perceived not to have exercised proper due diligence in admitting firms' into the 8(a) Program. Although SBA's efforts to increase the participation in the 8(a) Program is commendable, SBA still needs to ensure that only eligible firms are admitted into the program, and the documentation supporting 8(a) Program application approvals is maintained in a method ensuring clear eligibility of the applicant. ", "In a related development, a recent SBA OIG audit of the 8(a) Program's application determination process found that the SBA did not always document why the AA/BD approved applications even though lower-level \"reviewers [had] identified one or more eligibility issues\" with the applications. The OIG concluded that this lack of documentation resulted in \"potentially ineligible firms\" being accepted into the program. To address this situation, the SBA agreed with the OIG's recommendation to clearly document, in its Business Development Management Information System (BDMIS) which tracks 8(a) Program applications, justifications for approval when they differ from that of lower-level reviewers. The SBA asserted that this lack of documentation was not an indication that ineligible firms were being certified into the program without adequate review."], "subsections": []}, {"section_title": "Reported Variation in Service Delivery", "paragraphs": ["Witnesses at congressional hearings have reported that common Business Opportunity Specialists (BOS) practices, including the interpretation and implementation of standardized policies and procedures, vary from SBA district office to SBA district office and across state lines. Some Members of Congress have argued that \"many of the problems with \u2026 BOS advocates are compounded by the fact that\" the position's responsibilities are not laid out in statute. Instead, they argue, the position's responsibilities \"have been left to develop with SOPs [Standard Operating Procedures] and common practices.\" They have also asserted that BOSs are \"often pulled by their district offices to help with other small business programs rather than overseeing the 8(a) participants as intended.\"", "During the 115 th Congress, P.L. 115-91 , the National Defense Authorization Act for Fiscal Year 2018, among other provisions, amended the Small Business Act to clarify the responsibilities of Business Opportunity Specialists by providing them a statutory list of duties.", "Those concerned about variation in 8(a) Program service delivery also note that a 2010 GAO report found a \"breakdown in communication between SBA district offices and headquarters \u2026 that resulted in inconsistencies in the way district offices delivered the program.\" In addition, in 2015, GAO indicated that the SBA's overlapping organizational structure may contribute to variation in 8(a) Program service delivery:", "SBA's organizational structure often results in working relationships between headquarters and field offices that differ from reporting relationships, potentially posing programmatic challenges. District officials work with program offices at SBA's headquarters to implement the agency's programs, but these officials report to regional administrators, who themselves report to the Office of Field Operations. For example, \u2026 business opportunity specialists in the district offices work with the Office of Government Contracting and Business Development at SBA headquarters to assist small businesses with securing government contracts but report to district office management. ", "During the 114 th Congress, legislation ( H.R. 4341 ) was introduced to require GAO to review the SBA's Office of Government Contracting and Business Development (GCBD) and make recommendations to address several administrative concerns, including issues related to the SBA's organizational overlap. ", "In a related development, GAO reported that a \"skill gap\" among BOSs may also contribute to the possibility of variation in the program's service delivery. ", "GAO noted that the SBA's Office of Field Operations (OFO) revised its field office operations in 2012 following a 2010 review of all position descriptions to ensure that the descriptions aligned with the SBA's strategic plan and district office strategic plans. The SBA informed GAO that it undertook this review because district office staff were given new responsibilities after the SBA moved loan processing from district offices to loan processing centers in 2004. Before the review, district office staff had two principal program delivery positions, lender relations specialist and business development specialist. As a result of the review, descriptions for both of these positions were rewritten and the business development position was split into two separate positions, economic development specialist and business opportunity specialist. The skills and competencies for the new position descriptions focused on the change in the district office's function from loan processing to program compliance and community outreach. Staff were retrained for the rewritten positions. ", "The SBA reported that the change in the position descriptions created a \"skill gap\" because employees who were originally required to have a financial background for loan processing were now required to have different skills, such as a marketing background and interpersonal skills needed for assisting and overseeing 8(a) firms and conducting outreach to small businesses.", "The SBA informed GAO that the skill gap was particularly pronounced among 885 employees in two job series, GS-1101 and GS-1102, including BOSs, economic development specialists, and procurement staff, and that despite its efforts to address this skill gap through training and offering early retirement and separation incentives in FY2012 and FY2014 in an effort to restructure its personnel, \"the competency gap remains.\" The SBA also noted that its skill gap had been compounded by recent changes in job requirements and new initiatives that require new skill sets for its employees. For example, P.L. 114-92 , the National Defense Authorization Act of FY2016, requires BOSs to obtain federal acquisition certification in contracting as a prerequisite for employment.", "Arguably, the SBA's relatively recent issuance of a new 300-page SOP (effective September 2016) for the Office of Business Development, which oversees the 8(a) Program, may help to address the reported skill gap. The new SOP provides all SBA staff, including BOSs, specific guidance concerning their roles and responsibilities in 8(a) Program service delivery. "], "subsections": []}, {"section_title": "Oversight of 8(a) Program Participant's Continuing Eligibility", "paragraphs": ["As mentioned previously, two SBA offices, the GCBD and the OFO, share responsibility for overseeing the 8(a) Program. Within GCBD, BOSs assigned to the Office of Certification and Eligibility (OCE) evaluate all 8(a) program applications and conduct continuing eligibility reviews of \"high-risk\" or \"complex\" 8(a) firms, including those firms with total 8(a) revenue exceeding $10 million, are part of a joint venture, are party to a mentor-prot\u00e9g\u00e9 agreement, or are an entity-owned firm such as an Alaska Native Corporation, and those that are requested from district office field staff. However, an SBA OIG audit found that the OCE reviewed the continuing eligibility of less than half of the firms identified as high risk in FY2016 (352 of 859 firms, or 41%) and in FY2017 (350 of 798 firms, or 44%). ", "Within OFO, BOSs in each of the SBA's 68 district offices work directly with their assigned 8(a) firms and, among other duties, conduct annual reviews of those firms' progress toward achieving the targets, objectives, and goals set forth in their business development plan. According to the 8(a) Program's Standard Operating Procedures (SOP) manual, BOSs in each of the SBA's 68 district offices conduct continuing eligibility reviews for all 8(a) firms not reviewed by the GCBD to ensure their compliance with all continuing eligibility requirements during the annual review process. However, in practice, the SBA OIG's audit found that district office BOSs assess continuing eligibility as part of the annual review process for all 8(a) firms, including those deemed to be high risk or complex.", "The SBA is also required to review the participant's continuing eligibility \"upon receipt of specific and credible information alleging that a participant no longer meets the eligibility requirements.\" Generally, the SBA receives this information from the SBA OIG's Hotline. However, the SBA OIG's audit found that the OCE did not conduct continuing eligibility reviews for any of the 44 OIG Hotline complaints that were referred to the GCBD from October 1, 2015, through May 4, 2017. In addition, GCBD did not inform district office BOSs of complaints filed against firms within their purview. As a result, district office BOSs took no action regarding the complaints.", "The SBA OIG's audit reviewed the continuing eligibility of two samples of 8(a) firms to determine whether the SBA's continuing eligibility review process \"consistently identify ineligible firms enrolled in the program\": the 15 individually owned 8(a) firms with the highest set-aside dollars in FY2016 that were scheduled to have continuing eligibility reviews within the first half of FY2017 and 10 individually owned 8(a) firms that were identified as being ineligible in Hotline complaints received between October 1, 2015, and May 4, 2017. ", "The SBA OIG found that \"despite OCE and district offices having shared responsibility for assessing 8(a) firms' continuing eligibility, they did not detect that 4 of the 15 individually-owned 8(a) firms we reviewed were ineligible for the 8(a) Program,\" and \"our review of the 10 firms referred by the OIG Hotline revealed that they were all ineligible for the 8(a) program, based on issues such as excessive income and lack of good character.\" In addition, the SBA OIG found that the SBA had identified eligibility concerns through its annual reviews and continuing eligibility reviews for 6 of the 15 individually owned 8(a) firms the OIG had reviewed, but \"did not take timely action to remove these firms from the 8(a) Program or document resolution of eligibility issues.\"", "The SBA OIG concluded that 20 of the 25 firms it reviewed should have been removed from the 8(a) Program and made 11 recommendations \"to improve the overall management and effectiveness\" of the 8(a) Program's continuing eligibility review process. SBA management agreed with seven of the recommendations, partially agreed to the other four recommendations, and indicated that it would conduct continuing eligibility reviews for the firms identified in the SBA OIG's audit as ineligible and take appropriate action."], "subsections": []}, {"section_title": "Financial Thresholds for Economic Disadvantaged Status", "paragraphs": ["Section 8(a)(6)(A) of the Small Business Act defines economically disadvantaged individuals as \"socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged.\" In determining the degree of diminished credit and capital opportunities, Section 8(a)(6)(A) authorizes the SBA to \"consider, but not be limited to, the assets and net worth of such socially disadvantaged individual.\" ", "As mentioned previously, in 1989, the SBA established by regulation that personal net worth of less than $250,000 at the time of entry into the program (and $750,000 for continuing eligibility) constitutes economic disadvantage. ", "Some Members of Congress have argued that these financial thresholds should be increased or periodically adjusted for inflation. During the 112 th Congress, H.R. 3754 , the Not Too Small to Succeed in Business Act of 2011, would have increased these thresholds to $750,000 for 8(a) Program admission and $2.25 million for continued participation after admission. H.R. 2424 , the Expanding Opportunities for Main Street Act of 2011, would have amended Section 8(a)(6)(A) by inserting after \"disadvantaged individual\" the following: \"For purposes of this section, an individual having a net worth of more than $1,500,000 is not economically disadvantaged.\" Legislation with provisions similar to those in H.R. 2424 was also introduced during the 113 th Congress ( H.R. 2550 , the Minority Small Business Enhancement Act of 2013, and H.R. 2551 , the Expanding Opportunities for Main Street Act of 2013).", "Advocates for increasing the program's personal net worth threshold noted that the Department of Transportation (DOT) increased the personal net worth threshold for determining eligibility for the Disadvantaged Business Enterprise (DBE) program in 2011 to account for inflation. The DBE threshold was increased from $750,000 (which was set by DOT in 1999, and was based on the 8(a) Program's $750,000 threshold) to $1.32 million. DBE firms, which are provided special consideration in the awarding of federal transportation contracts, argued that the limit penalized success and imposed \"a glass ceiling on the growth and competitiveness of DBE firms.\" Opponents argued that the $1.32 million limit was too high and would include business owners who were not truly disadvantaged and that raising the limit would favor larger, established, and richer DBEs at the expense of smaller, start-up firms because the larger companies would be able to stay in the program longer. ", "More recently, the SBA's OIG has argued that the SBA's 1989 decision to exclude equity in a primary residence from an individual's net worth calculation \"serves as a loophole allowing affluent business owners to shelter wealth in personal real estate, while taking advantage of a program designed to help the socially and economically disadvantaged.\""], "subsections": []}, {"section_title": "Measuring Program Success", "paragraphs": ["Pursuant to P.L. 100-656 , the Business Opportunity Development Reform Act of 1988, the SBA is required to \"develop and implement a process for the systematic collection of data on the operations of the [8(a)] Program\" and to report this data, not later than April 30 of each year, to Congress. The act requires the report to include the following:", "The average personal net worth of individuals who own and control concerns that were initially certified for program participation during the immediately preceding fiscal year and the dollar distribution of each of these individual's net worth, at $50,000 increments. A description and estimate of the benefits and costs that have accrued to the economy and the federal government in the immediately preceding fiscal year due to the operations of those business concerns that were performing 8(a) contracts. A compilation and evaluation of those business concerns that have exited the program during the immediately preceding three fiscal years, including the number of concerns actively engaged in business operations, those that have ceased or substantially curtailed operations, including the reasons for such actions, and those concerns that have been acquired by other firms or organizations owned and controlled by other than socially and economically disadvantaged individuals. For those businesses that have continued operations after they exited from the program, the SBA Administrator is required to separately detail the benefits and costs that have accrued to the economy during the immediately preceding fiscal year due to their operations. A listing of all program participants during the preceding fiscal year identifying, by state and region, for each firm: the concern's name, the race or ethnicity, and gender of the disadvantaged owners, the dollar value of all contracts received in the preceding year, the dollar amount of advance payments received by each concern pursuant to contracts awarded under Section 8(a), and a description including (if appropriate) an estimate of the dollar value of all benefits and loans received during such year. The total dollar value of 8(a) contracts and options awarded during the preceding fiscal year and such amount expressed as a percentage of total sales of all firms participating in the program during such year; and of firms in each of the nine years of program participation. A description of additional resources or program authorities required to provide the types of services needed over the next two-year period to service the expected portfolio of 8(a) certified firms. The total dollar value of 8(a) contracts and options, at such dollar increments as the SBA Administrator deems appropriate, for each four digit standard industrial classification code under which such contracts and options were classified.", "The SBA's FY2014 report (the latest one available) indicated that 8(a) firms \"contributed an estimated 158,018 jobs to the Nation's economy,\" and that 2,209 of the 2,288 firms that had exited and completed the program during the three preceding fiscal years (October 1, 2010 through September 30, 2013) were still active, 45 had ceased operations, and 34 did not have data available for determining their status as reported by Dun and Bradstreet. Of the active firms, \"two were acquired by another firm or organization owned and controlled by other than socially and economically disadvantages individuals and 144 firms were substantially curtailed within the past three years.\" In addition, the 2,209 still active firms reported FY2014 revenue of approximately $5.49 billion and provided jobs for approximately 70,330 persons. ", "In 2000, GAO recommended that the SBA augment its data collection activities by periodically surveying a nationwide sample of 8(a) firms. GAO argued that a survey would improve the SBA's ability to determine how well the program is working, further arguing that \"at a minimum, the survey should assess whether SBA assistance is meeting the firms' expectations and needs.\"", "The SBA currently contracts with a third-party to conduct an annual client satisfaction survey of small businesses that have received management training and technical assistance from Small Business Development Centers, SCORE, and Women Business Centers. The survey's objective is to measure these programs' impact \"on the creation, financial development and survival of client firms.\" The wording of many of that survey's questions, which focus on client satisfaction and the programs' impact on client behavior and economic success, could prove useful should the SBA decide to conduct a nationwide survey of 8(a) firms. "], "subsections": [{"section_title": "Appendix. Comparison of the Requirements Pertaining to Different Types of 8(a) Firms", "paragraphs": [], "subsections": []}]}]}]}}
{"id": "R41759", "title": "Past Government Shutdowns: Key Resources", "released_date": "2019-02-07T00:00:00", "summary": ["When federal government agencies and programs lack budget authority after the expiration of either full-year or interim appropriations, they experience a \"funding gap.\" Under the Antideficiency Act (31 U.S.C. \u00a7\u00a71341 et seq.), they must cease operations, except in certain circumstances when continued activities are authorized by law. When there is a funding gap that affects many federal entities, the situation is often referred to as a government shutdown. In the past, there have occasionally been funding gaps that led to government shutdowns, one of which lasted 21 days, from December 16, 1995, to January 6, 1996. A shutdown occurred at the beginning of FY2014 (October 1, 2013) and lasted for a total of 16 days. Subsequently, two comparatively brief shutdowns occurred during FY2018, in January and February 2018, respectively. The longest shutdown occurred in FY2019\u2014beginning at the end of the day on December 21, 2018, and lasting 35 days.", "The relevant laws that govern shutdowns have remained relatively constant in recent decades. However, agencies and officials may exercise some discretion in how they interpret the laws, and circumstances that confront agencies and officials may differ over time. Consequently, it is difficult to predict what might happen in the event of a future shutdown. Still, information about past events may offer some insight into possible outcomes and help inform future deliberations.", "This report provides an annotated list of historical documents and other resources related to several past government shutdowns. Sources for these documents and resources include the Congressional Research Service (CRS), Government Accountability Office (GAO), House and Senate Committees, Office of Management and Budget (OMB), Office of Personnel Management (OPM), and Executive Office of the President. When possible, the report includes links to full-text documents.", "For more information about federal government shutdowns and funding gaps, see CRS Report RL34680, Shutdown of the Federal Government: Causes, Processes, and Effects, coordinated by Clinton T. Brass. For more information about funding gaps, see CRS Report RS20348, Federal Funding Gaps: A Brief Overview, by James V. Saturno.", "This report will be updated as additional resources are identified."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides historical documents and other resources related to past government shutdowns, along with brief annotations that describe the contents of the documents. The report includes links to full-text documents when available. There is limited information and guidance related to shutdowns, and it is difficult to predict what might happen in the event of one, but information about past events may help inform future deliberations.", "The following annotated resources are meant to guide readers to relevant materials from governmental and selected nongovernmental sources."], "subsections": []}, {"section_title": "Congressional Research Service Products", "paragraphs": ["The following select CRS products include information related to past government shutdowns."], "subsections": [{"section_title": "CRS Products", "paragraphs": ["CRS Report RL34680, Shutdown of the Federal Government: Causes, Processes, and Effects , coordinated by Clinton T. Brass.", "This report discusses the causes, processes, and effects of federal government shutdowns, including potential issues for Congress.", "CRS Report RS20348, Federal Funding Gaps: A Brief Overview , by James V. Saturno ", "This report provides a discussion of funding gaps in recent decades and a more detailed chronology of legislative actions and funding gaps that led to the two shutdowns of FY1996 and the single shutdown of FY2014.", "CRS Report R43292, The FY2014 Government Shutdown: Economic Effects , by Marc Labonte", "This report discusses the effects of the FY2014 government shutdown on the economy and financial markets. It also reviews third-party estimates of the effects of the shutdown on the economy.", "CRS Report R43250, CRS Resources on the FY2014 Funding Gap, Shutdown, and Status of Appropriations , by Justin Murray", "This brief report includes short annotations and links to CRS products related to the October 2013 government shutdown. ", "CRS Legal Sidebar LSB10243, How a Government Shutdown Affects Government Contracts, by David H. Carpenter", "This Legal Sidebar briefly covers potential effects of a shutdown on new and existing contracts.", "CRS In Focus, IF11079, National Park Service: Issues Related to a Government Shutdown, by Laura B. Comay and Carol Hardy Vincent This In Focus covers the National Parks Service and topics such as the accessibility and funding for limited operations during a government shutdown. CRS Insight, CRS Insight IN11011, Economic Effects of the FY2019 Government Shutdown, by Marc Labonte This Insight briefly covers the FY2019 shutdown and its effects on economic activity and employment. CRS Insight, CRS Insight IN11020, Federal Grants to State and Local Governments: Issues Raised by the Partial Government Shutdown, by Natalie Keegan This Insight briefly covers the FY2019 shutdown and its effect on the timing and payment of grant awards."], "subsections": []}]}, {"section_title": "Government Accountability Office", "paragraphs": ["The U.S. Government Accountability Office (GAO) has published reports related to past and potential shutdowns. The following documents investigate possible issues and provide historical context surrounding government shutdowns.", "U.S. Government Accountability Office, Government Shutdown: Three Departments Reporting Varying Degrees of Impacts on Operations, Grants, and Contracts , GAO-15-86, November 14, 2014, available at https://www.gao.gov/products/GAO-15-86 .", "GAO reviewed how the 2013 shutdown affected some operations and services at three departments: the Departments of Energy, Health and Human Services (HHS), and Transportation (DOT). GAO selected these three departments for review based on the value of grants and contracts, the percentage of employees expected to be furloughed, and the potential for longer-term effects.", "GAO recommended that the Office of Management and Budget (OMB) instruct agencies to document lessons learned in planning for and implementing a shutdown, as well as for resuming activities following a shutdown should a funding gap longer than five days occur in the future. OMB staff did not state whether they agreed or disagreed with the recommendation.", "U.S. General Accounting Office, Cost of the Recent Partial Shutdown of Government Offices , PAD-82-24, December 10, 1981, available at http://www.gao.gov/products/PAD-82-24 .", "According to GAO, this report was completed \"in response to congressional requests,\" for which \"GAO contacted 13 cabinet departments and 12 selected agencies and offices to obtain information about the costs of a 1981 partial shutdown of government offices.\" It includes cost estimates, background information about the costs, and GAO recommendations to Congress concerning agency operations in the event of a government shutdown.", "U.S. General Accounting Office, Funding Gaps Jeopardize Federal Government Operations , PAD-81-31, March 3, 1981, available at http://www.gao.gov/products/PAD-81-31 .", "According to GAO, as of March 1981, \"interruptions in federal agency funding at the beginning of the fiscal year (FY) and operations on continuing resolutions have become the norm rather than the exception.\" For years, many federal agencies continued to operate during a funding gap, while \"minimizing all nonessential operations and obligations, believing that Congress did not intend that agencies close down\" while waiting for the enactment of annual appropriations acts or continuing resolutions. During the FY1981 appropriations process, the President requested opinions on the Antideficiency Act from the then-U.S. Attorney General, Benjamin Civiletti. In two memoranda issued in 1980 and 1981, the Attorney General stated that the act required agencies to terminate all operations when their current appropriations expired. According to GAO, agencies were uncertain how to respond to the Attorney General's opinion and what activities they would be able to continue if appropriations expired. This GAO report outlines some of the problems surrounding late appropriations and funding gaps. It also includes Attorney General Civiletti's opinions within Appendices IV and VIII.", "U.S. General Accounting Office, Government Shutdown: Funding Lapse Furlough Information , GGD-96-52R, December 1, 1995, available at http://www.gao.gov/products/GGD-96-52R .", "GAO was asked to provide available information on the numbers of federal employees who might have been subject to furlough in the event of a second shutdown in 1995. GAO provided numbers that were based on plans provided by the Office of Management and Budget (OMB) to GAO in October 1995. The numbers included within this document do not represent actual furloughs. The numbers represent planned furloughs in advance of the two shutdowns, which occurred later in November and December\u2013January.", "U.S. General Accounting Office, Government Shutdown: Permanent Funding Lapse Legislation Needed , GGD-91-76, June 6, 1991, available at http://www.gao.gov/products/GGD-91-76 .", "In 1990, GAO issued a questionnaire to government agencies in an attempt to measure the effects of a partial shutdown which occurred on Columbus Day weekend. This report also includes estimates on the effects of a hypothetical three-day shutdown during a nonholiday workweek."], "subsections": []}, {"section_title": "House and Senate Committee Prints and Hearings", "paragraphs": [], "subsections": [{"section_title": "Committee Prints", "paragraphs": ["The following committee print includes historical information on a past government shutdown.", "U.S. Congress, House Committee on Post Office and Civil Service, Cost of Shutting Down Federal Government on November, 23, 1981 , committee print, 97 th Congress, 2 nd session, March 25, 1982 (Washington: GPO, 1982), available at http://hdl.handle.net/2027/pur1.32754077662413 .", "This committee print assessed the cost of the November 23, 1981, shutdown of federal offices resulting from a presidential veto of a continuing resolution for FY1982. The committee print includes individual federal departments' and agencies' shutdown impact assessments that were collected by GAO (pp. 73-212). It also includes cost estimates, an OMB memorandum, and a presidential veto statement."], "subsections": []}, {"section_title": "Hearings", "paragraphs": ["The following are congressional hearings that include historical information on past shutdowns. Some of these hearings include items for the record such as OMB memoranda. ", "U.S. Congress, House and Senate Committees on the Budget, Effects of Potential Government Shutdown , hearing, 104 th Congress, 1 st session, September 19, 1995 (Washington: GPO, 1995), available at http://www.archive.org/stream/effectsofpotenti00unit .", "This hearing took place before the November 1995 shutdown, and it examined potential scenarios if a shutdown were to occur. The hearing includes testimony from Walter Dellinger, Assistant Attorney General, U.S. Department of Justice, and Alice M. Rivlin, Director, OMB. The hearing includes additional materials such as articles, letters from the Federal Reserve System, and a memo from Walter Dellinger to Alice Rivlin.", "U.S. Congress, House Committee on Government Reform and Oversight, Subcommittee on Civil Service, Government Shutdown I: What's Essential ?, hearings, 104 th Congress, 1 st session, December 6, and 14, 1995 (Washington: GPO 1997), available at http://www.gpo.gov/fdsys/pkg/CHRG-104hhrg23275/pdf/CHRG-104hhrg23275.pdf .", "These hearings were held in December 1995 and generally covered the November 1995 shutdown. Because the hearings were not published until 1997, some additional information related to the December 1995-January 1996 government shutdown is included.", "U.S. Congress, House Committee on Resources, State Service Donations in Budgetary Shutdowns , hearing, 104 th Congress, 1 st session, December 5, 1995 (Washington: GPO 1996), available at http://www.archive.org/stream/stateservicedona00unit .", "The hearing was held to consider legislation that would have directed the Department of the Interior to accept donations of assistance from state governments' employee services for operating national parks and wildlife refuges during federal government shutdowns.", "U.S. Congress, House Committee on Oversight and Government Reform, As Difficult As Possible: The National Park Service's Implementation of the Government Shutdown , hearing, 113 th Congress, 1 st session, October 16, 2013. Available at http://www.gpo.gov/fdsys/pkg/CHRG-113hhrg88621/pdf/CHRG-113hhrg88621.pdf .", "The hearing was held during the October 2013 shutdown and looked at the National Park Service's implementation of the government shutdown.", "U.S. Congress, House Committee on Veterans' Affairs. Effect of Government Shutdown on VA Benefits and Services to Veteran s , hearing, 113 th Congress, 1 st session, October 9, 2013. Available at http://www.gpo.gov/fdsys/pkg/CHRG-113hhrg85863/pdf/CHRG-113hhrg85863.pdf . ", "The hearing was held during the October 2013 shutdown and focused on the impact of the shutdown on benefits payments and services for veterans.", "U.S. Congress, Senate Committee on Commerce, Science, and Transportation. Impacts of the Government Shutdown on Our Economic Security , hearing, 113 th Congress, 1 st session, October 11, 2013. Available at http://www.gpo.gov/fdsys/pkg/CHRG-113shrg93946/pdf/CHRG-113shrg93946.pdf . ", "The hearing was held during the October 2013 shutdown and focused on the possible and emerging economic and other impacts related to the shutdown. ", "U.S. Congress, Senate Committee on Small Business and Entrepreneurship. Small Businesses Speak: Surviving the Government Shutdown? , hearing, 113 th Congress, 1 st session, October 15, 2013. Available at http://www.gpo.gov/fdsys/pkg/CHRG-113shrg87989/pdf/CHRG-113shrg87989.pdf .", "The hearing was held during the October 2013 shutdown and it examined the impacts the shutdown was having on small businesses.", "U.S. Congress, House Committee on Armed Services, Subcommittee on Readiness. The Interpretation of H.R. 3210 : 'Pay Our Military Act', hearing, 113 th Congress, 1 st session, October 10, 2013. Available at http://www.gpo.gov/fdsys/pkg/CHRG-113hhrg85325/pdf/CHRG-113hhrg85325.pdf .", "The hearing was held during the October 2013 shutdown, and it examined interpretations of H.R. 3210 , the Pay Our Military Act, which ultimately was enacted as P.L. 113-39 .", "U.S. Congress, Senate Joint Economic Committee. The Way Forward: Long-Term Fiscal Responsibility and Economic Growth , hearing, 113 th Congress, 1 st session, October 11, 2013. Available at http://www.gpo.gov/fdsys/pkg/CHRG-113shrg85408/pdf/CHRG-113shrg85408.pdf .", "The hearing was held during the October 2013 shutdown. The hearing examined policy options for ending the shutdown and addressing the debt ceiling, and it also reviewed potential solutions to promote fiscal sustainability and economic growth."], "subsections": []}]}, {"section_title": "Office of Management and Budget", "paragraphs": [], "subsections": [{"section_title": "Guidance Documents for Agencies", "paragraphs": ["OMB documents and guidance regarding potential or actual funding gaps and shutdowns may provide insights into current and future practices. The Office of Personnel Management (OPM) has provided links to copies of previous OMB bulletins and memoranda for reference. This website, entitled Pay & Leave Furlough Guidance: Shutdown Furlough , is available at http://www.opm.gov/policy-data-oversight/pay-leave/furlough-guidance/#url=Shutdown-Furlough .", "Some of the OMB documents include the following. ", "OMB Bulletin No. 80-14, Shutdown of Agency Operations Upon Failure by the Congress to Enact Appropriations , August 28, 1980 (citing the 1980 Civiletti opinion and requiring agencies to develop shutdown plans); OMB Memorandum, Agency Operations in the Absence of Appropriations , November 17, 1981 (referencing OMB Bulletin No. 80-14; stating the 1981 Civiletti opinion remains in effect; and providing examples of \"excepted activities\" that may be continued under a funding gap); OMB Bulletin No. 80-14, Supplement No. 1, Agency Operations in the Absence of Appropriations , August 20, 1982 (\"updating\" OMB Bulletin No. 80-14 and newly requiring agencies to submit contingency plans for review by OMB); OMB Memorandum M-91-02, Agency Operations in the Absence of Appropriations , October 5, 1990 (referencing OMB Bulletin No. 80-14; stating that OMB Bulletin No. 80-14 was \"amended\" by the OMB Memorandum of November 17, 1981; stating the 1981 Civiletti opinion remains in effect; and directing agencies how to respond to an anticipated funding gap that would begin during the weekend); OMB Memorandum M-95-18, Agency Plans for Operations During Funding Hiatus , August 22, 1995 (referencing OMB Bulletin No. 80-14, as amended; citing the 1981 Civiletti opinion; transmitting to agencies a 1995 Office of Legal Counsel opinion as an \"update\" to the 1981 Civiletti opinion; and directing agencies to send updated contingency plans to OMB); and OMB Memorandum M-13-22, Planning for Agency Operations during a Potential Lapse in Appropriations , September 17, 2013 (citing Section 124 of Circular A-11 and providing guidance and coordinating efforts to facilitate contingency planning in accordance with the Antideficiency Act). OMB Memorandum M-18-05, Planning for Agency Operations during a Potential Lapse in Appropriations , January 19, 2018 (citing Section 124 of Circular A-11 and providing guidance and coordinating efforts to facilitate contingency planning in accordance with the Antideficiency Act).", "OMB also provides agencies with annual instructions in Circular No. A-11 on how to prepare for and operate during a funding gap.", "U.S. Executive Office of the President, Office of Management and Budget, Circular No. A-11: Preparation, Submission, and Execution of the Budget , June 2018, Section 124, available at https://www.whitehouse.gov/wp-content/uploads/2018/06/s124.pdf .", "The circular establishes two \"policies\" regarding the absence of appropriations: (1) a prohibition on incurring obligations unless the obligations are otherwise authorized by law and (2) permission to incur obligations \"as necessary for orderly termination of an agency's functions,\" but prohibition of any disbursement (i.e., payment).", "The circular also directs agency heads to develop and maintain shutdown plans, which are to be submitted to OMB at a minimum every two years starting August 1, 2015, and also when revised to reflect certain changes in circumstances. Agency heads are to use the Civiletti opinions, a 1995 Department of Justice, Office of Legal Counsel opinion, and the circular to \"decide what agency activities are excepted or otherwise legally authorized to continue during a lapse in appropriations.\""], "subsections": []}, {"section_title": "Agency Contingency Plans", "paragraphs": ["OMB has a website with links to agency shutdown contingency plans arranged by agency. This website, entitled \"Agency Contingency Plans,\" is available at https://www.whitehouse.gov/omb/information-for-agencies/Agency-Contingency-Plans ."], "subsections": []}, {"section_title": "Impacts and Costs of Shutdowns", "paragraphs": [], "subsections": [{"section_title": "FY1996", "paragraphs": ["The hearing entitled Government Shutdown I: What's Essential ?, includes some estimates related to the December 1995\u2013January 1996 shutdowns. The hearing includes an OMB letter with information about the effects of the shutdowns and counts of employees who were excepted and not excepted from furlough, pp. 266-270 and 272-274. This hearing is available at http://www.gpo.gov/fdsys/pkg/CHRG-104hhrg23275/pdf/CHRG-104hhrg23275.pdf ."], "subsections": []}, {"section_title": "FY2014", "paragraphs": ["OMB released a report on November 7, 2013, with some estimates on the cost of the October 2013 shutdown. The report includes information on federal employee furloughs, economic effects of the shutdown, and some impact estimates related to select programs. This report is available at http://web.archive.org/web/20140701035515/http://www.whitehouse.gov/sites/default/files/omb/reports/impacts-and-costs-of-october-2013-federal-government-shutdown-report.pdf . "], "subsections": []}, {"section_title": "FY2019", "paragraphs": ["The Congressional Budget Office (CBO) released a report on January 28, 2019, with some estimates of effects of the December-January partial government shutdown. The report includes estimates related to the shutdown's effect on discretionary spending, economic activity and GDP. The report is available at https://www.cbo.gov/publication/54937 . "], "subsections": []}]}]}, {"section_title": "Office of Personnel Management", "paragraphs": ["OPM has some information publicly available on the internet related to government shutdowns and furloughs.", "U.S. Office of Personnel Management, Pay & Leave Furlough Guidance , available at https://www.opm.gov/policy-data-oversight/pay-leave/furlough-guidance/#url=Shutdown-Furlough .", "This website includes links to guidance related to administrative and shutdown furloughs. The shutdown portion of this website includes the following additional references to historical guidance including ", "U.S. Office of Personnel Management, Memorandum to Agencies on Retroactive Pay and Other Matters , October 17, 2013; U.S. Office of Personnel Management, Information on Paychecks for September 22 through October 5, 2013 Pay Period; U.S. Office of Personnel Management, Guidance for Shutdown Furloughs , September 2015; U.S. Chief Human Capital Council, Memorandum for Heads of Executive Departments and Agencies . Fact Sheet: Pay and Benefits Information for Employees Affected by the Lapse in Appropriations. January 23, 2019; U.S. Chief Human Capital Council, Memorandum for Heads of Executive Departments and Agencies. Government Fair Treatment Act of 2019 , January 23, 2019; U.S. Chief Human Capital Council, Memorandum for Heads of Executive Departments and Agencies. Telework and other Workplace Flexibilities for Excepted Employees during a Lapse in Appropriations . January 23, 2019."], "subsections": []}, {"section_title": "Presidential Materials", "paragraphs": ["The following documents are from the National Archives and Records Administration (NARA) and current Administration websites. These documents cover statements made by Presidents and Administration officials during government shutdowns and are arranged by date."], "subsections": [{"section_title": "Presidential Statements Related to FY1996 Shutdowns", "paragraphs": [], "subsections": [{"section_title": "The November 1995 Shutdown", "paragraphs": ["Historical Context . The November 1995 shutdown began on November 14, 1995, and ended on November 19, 1995. An estimated 800,000 federal employees were furloughed during the five full days of the shutdown. The furlough action was due to the expiration of a continuing resolution ( P.L. 104-31 ), which funded the government through November 13, 1995. On November 13, President William Clinton vetoed a second continuing resolution ( H.J.Res. 115 ) and a debt limit extension bill ( H.R. 2586 ) and instructed agencies to begin shutdown operations. The following presidential statements occurred during this time period.", "U.S. President (Clinton), November 13, 1995, President's Message to Congress on Continuing Resolution Veto , available at https://clintonwhitehouse6.archives.gov/1995/11/1995-11-13-president-message-to-congress-on-continuing-res-veto.html . U.S. President (Clinton), November 14, 1995, Statement by the President on Government Shutdown , available at https://clintonwhitehouse6.archives.gov/1995/11/1995-11-14-for-the-record-president-on-government-shutdown.html . U.S. President (Clinton), November 17, 1995, Transmittal to Congress of Presidential C.R ., available at https://clintonwhitehouse6.archives.gov/1995/11/1995-11-17-transmittal-to-congress-of-presidential-cr.html . U.S. President (Clinton), November 18, 1995, Radio Address by the President to the Nation , available at https://clintonwhitehouse6.archives.gov/1995/11/1995-11-18-radio-address-by-the-president-to-the-nation.html . U.S. President (Clinton), November 19, 1995, Statement by the President on Budget Agreement , available at https://clintonwhitehouse6.archives.gov/1995/11/1995-11-19-statement-by-the-president-on-budget-agreement.html ."], "subsections": []}, {"section_title": "The December 1995-January 1996 Shutdown", "paragraphs": ["Historical Context . The December 1995-January 1996 shutdown began on December 16, 1995, and ended on January 6, 1996. The shutdown was triggered by the expiration of a continuing funding resolution enacted on November 20, 1995 ( P.L. 104-56 ), which funded the government through December 15, 1995. This shutdown officially ended on January 6, with the passage of three continuing resolutions (CRs) ( P.L. 104-91 , P.L. 104-92 , and P.L. 104-94 ). There were five additional short-term continuing resolutions needed to prevent further funding gaps from occurring through April 26, 1996, when the Omnibus Consolidated Rescissions and Appropriations Act of 1996 ( P.L. 104-134 ) was enacted to fund any agencies or programs not yet funded through FY1996. The following presidential statements occurred during the time period of December 15, 1995, through January 6, 1996.", "U.S. President (Clinton), December 15, 1995, Statement by the President on Budget Negotiations , available at https://clintonwhitehouse6.archives.gov/1995/12/1995-12-15-president-statement-on-budget-negotiations.html . U.S. President (Clinton), December 16, 1995, Radio Address by the President to the Nation , available at https://clintonwhitehouse6.archives.gov/1995/12/1995-12-16-radio-address-by-the-president-to-the-nation.html . U.S. President (Clinton), December 18, 1995, Statement by the President on the Budget , available at https://clintonwhitehouse6.archives.gov/1995/12/1995-12-18-statement-by-the-president-on-the-budget.html . U.S. President (Clinton), December 22, 1995, Statement by the President on Signing House Joint Res. 136 , available at https://clintonwhitehouse6.archives.gov/1995/12/1995-12-22-president-statement-on-signing-house-joint-res.html . U.S. President (Clinton), December 23, 1995, Radio Address by the President to the Nation , available at https://clintonwhitehouse6.archives.gov/1995/12/1995-12-23-radio-address-by-the-president-to-the-nation.html . U.S. President (Clinton), January 4, 1996, Statement by the President on House Joint Resolution 153 , available at https://clintonwhitehouse6.archives.gov/1996/01/1996-01-04-president-statement-on-house-joint-resolution.html . U.S. President (Clinton), January 6, 1996, Statement by the President on Balanced Budget Proposal , available at https://clintonwhitehouse6.archives.gov/1996/01/1996-01-06-president-remarks-on-balanced-budget-proposal.html . U.S. President (Clinton), January 6, 1996, Statement by the President in Signing H.R. 1358 , available at https://clintonwhitehouse6.archives.gov/1996/01/1996-01-06-president-statement-in-signing-hr.html . U.S. President (Clinton), January 6, 1996, Statement by the President in Signing H.R. 1643 , available at https://clintonwhitehouse6.archives.gov/1996/01/1996-01-06-president-statement-in-signing-hr-a.html . U.S. President (Clinton), January 6, 1996, Radio Address by the President to the Nation , available at https://clintonwhitehouse6.archives.gov/1996/01/1996-01-06-radio-address-by-the-president-to-the-nation.html ."], "subsections": []}]}, {"section_title": "Presidential Statements Related to FY2014 Shutdown", "paragraphs": ["Historical Context . A shutdown occurred at the beginning of FY2014 (October 1, 2013) and lasted for a total of 16 full days. At the beginning of the fiscal year, none of the 12 regular appropriations bills for FY2014 were enacted. In addition, a continuing resolution to provide temporary funding for the previous year's projects and activities had also not been enacted. On September 30, however, an automatic continuing resolution was enacted that covered FY2014 pay and allowances for (1) certain members of the Armed Forces, (2) certain Department of Defense (DOD) civilian personnel, and (3) other specified DOD and Department of Homeland Security contractors ( P.L. 113-39 ). ", "A continuing resolution was signed into law ( P.L. 113-46 ) on October 17, 2013, which ended the shutdown and allowed government departments and agencies to reopen. The following presidential statements occurred during the time period of September 30, 2013, through October 19, 2013, and included discussion of the shutdown.", "U.S. President (Obama), September 30, 2013, Statement by the President , available at https://obamawhitehouse.archives.gov/the-press-office/2013/09/30/statement-president . U.S. President (Obama), September 30, 2013, Weekly Address: Averting a Government Shutdown and Expanding Access to Affordable Healthcare , available at https://obamawhitehouse.archives.gov/blog/2013/09/28/weekly-address-averting-government-shutdown-and-expanding-access-affordable-healthca . U.S. President (Obama), October 1, 2013, Remarks by the President on the Affordable Care Act and the Government Shutdown , available at https://obamawhitehouse.archives.gov/the-press-office/2013/10/01/remarks-president-affordable-care-act-and-government-shutdown . U.S. President (Obama), October 3, 2013, Remarks by the President on the Government Shutdown, available at https://obamawhitehouse.archives.gov/the-press-office/2013/10/03/remarks-president-government-shutdown . U.S. President (Obama), October 5, 2013, Weekly Address: End This Government Shutdown , available at https://obamawhitehouse.archives.gov/blog/2013/10/05/your-weekly-address-end-government-shutdown . U.S. President (Obama), October 7, 2013, Remarks by the President at FEMA Headquarters, available at https://obamawhitehouse.archives.gov/the-press-office/2013/10/07/remarks-president-fema-headquarters . U.S. President (Obama), October 12, 2013, Weekly Address: Let's Get Back to the Work of the American People , available at https://obamawhitehouse.archives.gov/blog/2013/10/12/weekly-address-let-s-get-back-work-american-people . U.S. President (Obama), October 16, 2013, Statement by the President of the United States, available at https://obamawhitehouse.archives.gov/the-press-office/2013/10/16/statement-president-united-states . U.S. President (Obama), October 17, 2013, Remarks by the President on the Reopening of the Government , available at https://obamawhitehouse.archives.gov/the-press-office/2013/10/17/remarks-president-reopening-government . U.S. President (Obama), October 19, 2013, Weekly Address: Working Together on Behalf of the American People, available at https://obamawhitehouse.archives.gov/blog/2013/10/19/weekly-address-working-together-behalf-american-people ."], "subsections": []}, {"section_title": "Presidential and Administration Statements Related to the FY2018 Shutdown", "paragraphs": ["Historical Context. At the beginning of FY2018, none of the 12 regular appropriations bills had been enacted, so the federal government operated under a series of CRs. The first, P.L. 115-56 , provided government-wide funding through December 8, 2017. The second, P.L. 115-90 , extended funding through December 22, and the third, P.L. 115-96 , extended it through January 19, 2018. ", "In the absence of agreement on legislation that would further extend the period of these CRs, a funding gap began with the expiration of P.L. 115-96 at midnight on January 19. A furlough of federal personnel began over the weekend and continued through Monday of the following week, ending with enactment of a fourth CR, P.L. 115-120 , on January 22.", "The following presidential and Trump Administration statements occurred during the time period of January 19, 2018, through January 22, 2018, and included discussion of the shutdown.", "January19, 2018, Press Briefing by OMB Director Mick Mulvaney and Legislative Affairs Director Marc Short on the Potential Government Shutdown, available at https://www.whitehouse.gov/briefings-statements/press-briefing-by-omb-director-mick-mulvaney-and-legislative-affairs-director-marc-short-on-the-potential-government-shutdown01192018/ .", "January 20, 2018, Press Briefing by OMB Director Mick Mulvaney and Legislative Affairs Director Marc Short on the Government Shutdown , available at https://www.whitehouse.gov/briefings-statements/press-briefing-omb-director-mick-mulvaney-legislative-affairs-director-marc-short-government-shutdown/ .", "U.S. President (Trump) January 22, 2018, Statement from President Donald J. Trump , available at https://www.whitehouse.gov/briefings-statements/statement-president-donald-j-trump-8/ .", "January 22, 2018, Press Briefing by Press Secretary Sarah Sanders available at https://www.whitehouse.gov/briefings-statements/press-briefing-press-secretary-sarah-sanders-012218/ ."], "subsections": []}, {"section_title": "Presidential Statements Related to FY2019 Shutdown", "paragraphs": ["Historical Context. The December 2018-January 2019 partial government shutdown began on December 22, 2018, and ended on January 25, 2019. At the beginning of FY2019 (October 1, 2018), five of the 12 regular appropriations bills had been enacted in consolidated appropriations bills and the other seven appropriations bills were funded under two CRs. The first CR , P.L. 115-245 , provided funding for these remaining seven appropriations bills through December 7, 2018. The second CR, P.L. 115-298 , extended funding for these seven appropriations bills through December 21, 2018. When no agreement was reached on legislation to further extend the period of these CRs for the remaining seven appropriations bills, a funding gap began with the expiration of the funding in P.L. 115-298 at midnight at the end of the day on December 21, 2018. ", "The funding gap ended when a CR was signed into law on January 25, 2019, which ended the partial government shutdown and allowed government departments and agencies to reopen. The partial government shutdown lasted 35 days making it the longest shutdown in history, compared with other shutdowns that have occurred since key Department of Justice opinions were issued in 1980 and 1981. The following presidential statements occurred during the time period of December 21, 2019, through January 25, 2019, and included discussion of the shutdown.", "U.S. President (Trump), December 27, 2018, Remarks by President Trump in Christmas Video Teleconference with Members of the Military , available at https://www.whitehouse.gov/briefings-statements/remarks-president-trump-christmas-video-teleconference-members-military/ .", "U.S. President (Trump), January 4, 2019, Remarks by President Trump After Meeting with Congressional Leadership on Border Security , available at https://www.whitehouse.gov/briefings-statements/remarks-president-trump-meeting-congressional-leadership-border-security/ . U.S. President (Trump), January 8, 2019, President Donald J. Trump's Address to the Nation on the Crisis at the Border , available at https://www.whitehouse.gov/briefings-statements/president-donald-j-trumps-address-nation-crisis-border/ . U.S. President (Trump), January 11, 2019, Remarks by President Trump During Briefing at the Rio Grande Valley U.S.-Mexico Border , available at https://www.whitehouse.gov/briefings-statements/remarks-president-trump-briefing-rio-grande-valley-u-s-mexico-border/ . January 11, 2019, Remarks by Vice President Pence Before Meet-and-Greet with U.S. Customs and Border Patrol Employees , available at https://www.whitehouse.gov/briefings-statements/remarks-vice-president-pence-meet-greet-u-s-customs-border-patrol-employees/ . U.S. President (Trump), January 25, 2019, Remarks by President Trump on the Government Shutdown , available at https://www.whitehouse.gov/briefings-statements/remarks-president-trump-government-shutdown/ ."], "subsections": []}]}]}}
{"id": "R44121", "title": "Land and Water Conservation Fund: Appropriations for \u201cOther Purposes\u201d", "released_date": "2019-05-14T00:00:00", "summary": ["The Land and Water Conservation Fund (LWCF) Act of 1965 (P.L. 88-578) created the LWCF in the Treasury as a funding source to implement the outdoor recreation goals set out by the act. The LWCF Act authorizes the fund to receive $900 million annually, with the monies available only if appropriated by Congress (i.e., discretionary appropriations). The fund also receives mandatory appropriations under the Gulf of Mexico Energy Security Act of 2006 (GOMESA). The level of annual appropriations for the LWCF has varied since the origin of the fund in FY1965.", "The LWCF Act outlines uses of the fund for federal and state purposes. Of the total made available through appropriations or deposits under GOMESA, not less than 40% is to be used for \"federal purposes\" and not less than 40% is to be used to provide \"financial assistance to states.\" The act lists the federal purposes for which the President is to allot LWCF funds \"unless otherwise allotted in the appropriation Act making them available.\" These purposes primarily relate to acquisition of lands and waters (and interests therein) by the federal government. With regard to state purposes, the act authorizes a matching grant program to states for outdoor recreation purposes. Throughout the LWCF's history, appropriations acts typically have provided funds for land acquisition and outdoor recreational grants to states.", "Beginning in FY1998, appropriations also have been provided each year (except FY1999) to fund other purposes related to natural resources. The extent to which the LWCF should be used for purposes other than federal land acquisition and outdoor recreation grants to states, and which other purposes should be funded from the LWCF, continue to be the subject of legislation and debate in Congress. In the past few decades, Presidents have sought LWCF funds for a variety of other purposes. Congress chooses which if any of these requests to fund, and has chosen programs not sought by the President for a particular year. Among other programs, appropriations have been provided for facility maintenance of the land management agencies, ecosystem restoration, the Historic Preservation Fund, the Payments in Lieu of Taxes program, the Forest Legacy Program, State and Tribal Wildlife Grants (under the Fish and Wildlife Service), the Cooperative Endangered Species Conservation Fund, U.S. Geological Survey science and cooperative programs, and Bureau of Indian Affairs Indian Land and Water Claim Settlements.", "Since FY1998, a total of $2.7 billion has been appropriated for other purposes, of a total LWCF appropriation of $18.9 billion over the history of the fund. The Fish and Wildlife Service and the Forest Service have received the largest shares of the total appropriations for other purposes, about $1.4 billion (53%) and $1.0.billion (38%), respectively, from FY1998 to FY2019. Several agencies shared the remaining $0.2 billion (9%) of the appropriations.", "Both the dollar amounts and the percentages of annual LWCF appropriations for other purposes have varied widely since FY1998. The dollar amounts have ranged from $0 in FY1999 to $456.0 million in FY2001. The percentage of annual funds provided for other purposes ranged from 0% in FY1999 to a high of 59% in both FY2006 and FY2007. In some years, the appropriation for other purposes was significantly less than the Administration requested. For instance, for FY2008, the George W. Bush Administration sought $313.1 million; the appropriation was $101.3 million. The appropriation for other purposes last exceeded $100.0 million in FY2010, and most recently was $93.3 million, in FY2019.", "Prior to FY2008, several other purposes typically were funded each year from LWCF. Since FY2008, funds have been appropriated annually only for grants under two programs: Forest Legacy and Cooperative Endangered Species Conservation Fund. These two programs and a third grant program\u2014State and Tribal Wildlife Grants\u2014have received more than three-quarters ($2.1 billion, 79%) of the total appropriation for other purposes since FY1998."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Land and Water Conservation Fund (LWCF) Act of 1965 was enacted to \"assist in preserving, developing, and assuring accessibility to ... outdoor recreation resources.\" Two main goals of the law were to facilitate participation in recreation and \"to strengthen the health and vitality\" of U.S. citizens. To accomplish these goals, purposes of the law included \"providing funds\" for federal land acquisition and for federal assistance to states generally related to outdoor recreation. ", "The fund is authorized to receive $900 million in revenues annually under the LWCF Act. Each year the fund accrues revenues at this level. The fund accumulates the majority of its revenues from oil and gas leases on the Outer Continental Shelf (OCS). It also accumulates revenues from the federal motorboat fuel tax and surplus property sales. However, revenues that accrue under the LWCF Act are available only if appropriated by Congress through the discretionary appropriations process. ", "The LWCF receives additional revenue (beyond the $900 million) from OCS leasing under the Gulf of Mexico Energy Security Act of 2006 (GOMESA). Unlike revenues under the LWCF Act, GOMESA revenues are mandatory appropriations (and thus are not subject to annual appropriation by Congress). They can be used only for grants to states for outdoor recreation purposes. ", "The overall level of annual appropriations (discretionary and mandatory combined) has varied widely since the fund's origin in FY1965. Of the total revenues that have accrued throughout the program's history ($40.9 billion), less than half have been appropriated ($18.9 billion) through FY2019. Thus, the unappropriated balance in the fund is estimated at $22.0 billion through FY2019. ", "The LWCF Act outlines uses of the fund for federal and state purposes. It states that of the total made available to the fund, not less than 40% is to be used for \"federal purposes\" and not less than 40% is to be used to provide \"financial assistance to states.\" The act lists the federal purposes for which the President is to allot LWCF funds \"unless otherwise allotted in the appropriation Act making them available.\" These purposes primarily relate to the acquisition of lands and waters (and interests therein) by the federal government. With regard to state purposes, the act authorizes a matching grant program to states for outdoor recreation purposes. ", "In practice, over the history of the LWCF, appropriations acts have provided funding for three general purposes. First, for each year since FY1965, appropriations for land acquisition have been provided to some or all of the major federal land management agencies\u2014the Bureau of Land Management (BLM), Fish and Wildlife Service (FWS), National Park Service (NPS), and Forest Service (FS). Second, for nearly every year since FY1965, appropriations have funded the outdoor recreation matching grant program, to assist states in recreational planning, acquiring recreational lands and waters, and developing outdoor recreational facilities. Third, beginning in FY1998, appropriations from the LWCF have been provided each year, except FY1999, to fund other federal programs with related natural resource purposes. Hereinafter, the third type of appropriations is referred to as funding other purposes .", "The $18.9 billion appropriated from the fund through FY2019 has been allocated in different proportions among federal land acquisition, the state grant program, and other purposes. The largest portion of the total\u2014$11.4 billion\u2014has been appropriated for federal land acquisition. The state grant program has received the second-largest portion, $4.8 billion. Other purposes have received the remaining $2.7 billion. Appendix A shows the total LWCF appropriation for other purposes.", "Congress continues to consider the extent to which the LWCF should fund purposes other than federal land acquisition and outdoor recreation grants to states. Some traditional LWCF advocates and beneficiaries have expressed concern about expanding the use of the funds, particularly if such expansion results in lower appropriations for land acquisition and outdoor recreation grants to states. Some Members of Congress, Presidents, and stakeholders have supported funding other purposes in order to draw on the balance in the fund for policy priorities, to shift the focus of the fund from land acquisition, or to achieve other goals. ", "A number of measures introduced in recent Congresses sought to authorize funding from the LWCF for various other purposes. These measures were not enacted. They included proposals to specify an amount or percentage of funding for two programs that are currently funded by the LWCF\u2014the Forest Legacy Program and Cooperative Endangered Species Conservation grants\u2014although the LWCF Act does not specifically authorize this funding. Other proposals sought to authorize programs or activities that have not been funded by LWCF in the past, or that have been rarely funded by LWCF in the past. For instance, one 115 th Congress bill would have authorized LWCF funding for certain programs and activities of the major land management agencies, including deferred maintenance, critical infrastructure, visitor services, and clean-up efforts; the Payments in Lieu of Taxes Program; and certain offshore energy exploration, innovation, and education activities. As another example, one 115 th Congress bill proposed to authorize LWCF funding for financial assistance from the Secretary of Housing and Urban Development for park and recreation infrastructure projects. ", "The balance of this report discusses the other purposes for which LWCF appropriations have been provided throughout the fund's history. It identifies the amount of funding contained in annual appropriations laws for other purposes and the types of purposes for which funds have been appropriated."], "subsections": []}, {"section_title": "LWCF Appropriations for Other Purposes", "paragraphs": [], "subsections": [{"section_title": "Level of Funding", "paragraphs": ["A total of $72.0 million was appropriated from the LWCF for other purposes in FY1998, the first year in which LWCF was used to fund other purposes. The total included $60.0 million for maintenance needs of the four land management agencies and $12.0 million for rehabilitation and maintenance of the Beartooth Highway (in Wyoming and Montana). In FY1998, total LWCF appropriations had spiked to approximately $969 million from the FY1997 level of about $159 million. ", "Both the dollar amounts and the percentages of annual LWCF appropriations for other purposes have varied widely since FY1998. (See Appendix B .) Over the most recent 10 years, LWCF appropriations for other purposes fluctuated, declining overall from $132.5 million in FY2010 to $93.3 million in FY2019 (in current dollars). However, the FY2019 level was the highest appropriation since FY2010. ", "Beginning in FY2011, appropriations for other purposes in each year have been less than $100 million, as was the case for FY1998-FY2000. Appropriations for other purposes were at their lowest dollar amount in FY1999, when no funds for other purposes were appropriated. The next-lowest dollar value was provided for FY2000, when a total of $20.0 million was appropriated for three purposes: Elwha River Ecosystem restoration (in Washington), deferred maintenance of the NPS, and the FS Forest Legacy program.", "By contrast, from FY2001 to FY2010, appropriations for other purposes exceeded $100 million in each year. In fact, during four of these years (FY2004-FY2007), the annual appropriation was between $200 million and $225 million. The appropriation surpassed $400 million in another year during the period. Specifically, the $456.0 million appropriation in FY2001 was more than double the amount provided for other purposes in any other year. These appropriations were used to fund more than a dozen programs in the Clinton Administration's Lands Legacy Initiative. In that year, total LWCF appropriations exceeded the annual authorization level, totaling nearly $1 billion. This record level of funding was provided partly in response to President Clinton's Lands Legacy Initiative, which sought $1.4 billion for about two dozen resource-protection programs, including the LWCF. It also was provided partly in response to some congressional interest in securing increased and more certain funding for the LWCF. ", "The highest percentage of annual funds provided for other purposes occurred in FY2006 and FY2007 (59% in both years), in response to President George W. Bush's request for funding for an array of programs. For instance, in FY2007 the Bush Administration sought funding from the LWCF for 15 programs in addition to land acquisition and state grants. For that year, the appropriation for five other purposes was $216.1 million, out of a total LWCF appropriation of $366.1 million.", "In some years, the appropriation for other purposes was significantly less than the Administration requested. For example, for FY2008 the Bush Administration sought $313.1 million for other purposes, or 83% of the total request of $378.7 million. The FY2008 appropriation for other purposes was $101.3 million, or 40% of the LWCF total of $255.1 million.", "The $2.7 billion appropriated from the LWCF from FY1998 to FY2019 for other purposes represents 27% of the $10.0 billion total appropriations from LWCF during the period. FWS and FS have received the largest shares of the appropriations for other purposes, about $1.4 billion (53%) and $1.0 billion (38%), respectively. BLM, NPS, the U.S. Geological Survey, and the Bureau of Indian Affairs have shared the remaining $0.2 billion (9%) of the appropriations for other purposes. (See Figure 1 .) "], "subsections": []}, {"section_title": "Types of Purposes", "paragraphs": ["Because there is no set of other purposes specified in the LWCF Act to be funded from the LWCF, presidents have sought funds for a variety of purposes. Congress has chosen which of these requests to fund from the LWCF, and whether to fund any additional programs from the LWCF not suggested by the President. Appropriations for other purposes have been provided for more than a dozen diverse natural resource-related programs, including facility maintenance of the land management agencies, ecosystem restoration, the Historic Preservation Fund, the Payments in Lieu of Taxes program, the FS Forest Legacy program, FWS State and Tribal Wildlife Grants, the FWS Cooperative Endangered Species Conservation Fund, U.S. Geological Survey science and cooperative programs, and Bureau of Indian Affairs Indian Land and Water Claim Settlements. (See Appendix A .)", "Although in earlier years several other purposes typically were funded from LWCF, since FY2008, funds have been appropriated annually only for grants under two programs: Forest Legacy and Cooperative Endangered Species Conservation Fund. (See Appendix B and Figure 2 . ) The total appropriation from LWCF for these two programs (since FY1998) is $1.7 billion, or 63% of all appropriations for other purposes ($2.7 billion). These two programs and a third grant program funded prior to FY2008 from LWCF\u2014FWS State and Tribal Wildlife Grants\u2014have received more than three-quarters ($2.1 billion, 79%) of the total appropriations for other purposes. The appropriations through FY2019 are $944.4 million for Forest Legacy (35% of the other purposes total), $753.3 million for Cooperative Endangered Species Conservation Fund (28% of total), and $448.5 million for State and Tribal Wildlife Grants (17% of total). ", "Grants under the Forest Legacy program are used to acquire lands or conservation easements to preserve private forests threatened by conversion to non-forest uses, such as agriculture or residences. FS provides matching grants to states through a competitive process that requires state approval and then national approval and ranking. The ranking is based on the importance of the project (potential public benefits from protection), the likelihood of the forest's conversion to non-forest uses, and the strategic relevance of the project, among other factors. The program is implemented primarily through state partners, usually state forestry agencies. State partners generally acquire, hold, and administer the easements or land purchases, although the federal government also may do so. ", "The Cooperative Endangered Species Conservation Fund provides grants \"for species and habitat conservation actions on non-Federal lands, including habitat acquisition, conservation planning, habitat restoration, status surveys, captive propagation and reintroduction, research, and education.\" In addition to appropriations from LWCF, the Cooperative Endangered Species Conservation Fund typically receives additional appropriations. In recent years, the appropriations from LWCF generally have been used for two types of land acquisition grants provided to state and territories on a matching basis. Recovery land acquisition grants have been made for acquisition of habitats in support of species recovery goals and objectives. Habitat conservation plan land acquisition grants have been made for acquisition of lands that are associated with habitat conservation plans.", "State and Tribal Wildlife Grants are provided to states, territories, and tribes to develop and implement programs for the benefit of fish and wildlife and their habitats, including nongame species. State and Tribal Wildlife Grants received funding from the LWCF for FY2001-FY2007; subsequently, funding has been provided from the General Fund of the U.S. Treasury. Currently, the largest portion of the program is for formula grants to states and territories on a matching basis. Funds from the formula grants may be used to develop state conservation plans and to implement specific conservation projects. Smaller amounts of funding have been appropriated for competitive grants to states and territories, and to tribal governments. The competitive grant programs do not have matching requirements. ", " Appendix A shows the total LWCF appropriations for other purposes summed from FY1998 to FY2019. Appendix B shows the other purposes that received LWCF appropriations each year, the amount of LWCF appropriations for each purpose, and the total annual appropriations for other purposes.", "Appendix A. Total LWCF Appropriations for Other Purposes ", "Appendix B. Annual LWCF Appropriations for Other Purposes "], "subsections": []}]}]}}
{"id": "RS22350", "title": "Railroad Retirement Board: Retirement, Survivor, Disability, Unemployment, and Sickness Benefits", "released_date": "2019-03-01T00:00:00", "summary": ["The Railroad Retirement Board (RRB), an independent federal agency, administers retirement, survivor, disability, unemployment, and sickness insurance for railroad workers and their families. During FY2017, the RRB paid nearly $12.5 billion in retirement, disability, and survivor benefits to approximately 548,000 beneficiaries and paid $105.4 million in unemployment and sickness benefits to approximately 28,000 claimants. Of the total $12.5 billion benefit payments in the same fiscal year, 60.0% was paid to retired workers, 8.0% to disabled workers, 14.4% to spouses, and 16.8% to survivors.", "The Railroad Retirement Act (RRA) authorizes retirement, disability, and survivor benefits for railroad workers and their families. RRA is financed primarily by payroll taxes, financial interchanges from Social Security, and transfers from the National Railroad Retirement Investment Trust (NRRIT). Railroad retirement payroll taxes have two tiers: the Tier I tax is essentially the same as the Social Security payroll tax and the Tier II tax is set each year based on the railroad retirement system's asset balances, benefit payments, and administrative costs. In FY2017, the gross RRA funding was about $12.7 billion.", "Railroad retirement annuities are also divided into two tiers. Tier I annuities are designed to be nearly equivalent to Social Security benefits and are based on both railroad retirement and Social Security-covered employment. However, Tier I annuities are more generous than Social Security benefits in certain situations. For example, at the age of 60, railroad workers with at least 30 years of covered railroad work may receive unreduced retirement annuities. Tier II annuities are similar to private pensions and based solely on covered railroad service. Tier II annuities are paid in addition to Tier I annuities.", "Railroad disability annuities may be payable to totally disabled railroad workers who are permanently disabled from all work and occupational disabled workers who are found to be permanently disabled from their regular railroad occupations. Eligible spouses and survivors of railroad workers may receive a certain portion of Tier I and Tier II benefits, but divorced spouses and surviving divorced spouses are eligible for only a certain portion of Tier I benefits.", "The Railroad Unemployment Insurance Act (RUIA) authorizes unemployment and sickness benefits for railroad workers. RUIA is financed solely by railroad employers, whose contributions are based on the taxable earnings of their employees. Eligibility for railroad unemployment and sickness benefits is based on recent railroad service and earnings. The maximum daily unemployment and sickness benefit payable in the benefit year that began July 1, 2018, is $77, and the maximum benefit for a biweekly claim is $770. Normal benefits are paid for up to 26 weeks in a benefit year. The railroad unemployment and sickness system remains affected by sequestration, as unemployment benefits will continue to be reduced through at least September 30, 2019."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Railroad Retirement Board (RRB), an independent federal agency, administers retirement, survivor, disability, unemployment, and sickness insurance for railroad workers and their families under the Railroad Retirement Act (RRA) and the Railroad Unemployment Insurance Act (RUIA). These acts cover workers who are employed by railroads engaged in interstate commerce and related subsidiaries, railroad associations, and railroad labor organizations. Lifelong railroad workers receive railroad retirement benefits instead of Social Security benefits; railroad workers with nonrailroad experience receive benefits either from railroad retirement or Social Security, depending on the length of their railroad service.", "The number of railroad workers has been declining since the 1950s, although the rate of decline has been irregular and recent years have seen increases in railroad employment after reaching an all-time low of 215,000 workers in January 2010. Recently, railroad employment peaked in April 2015 to 253,000 workers, the highest level since November 1999, and then declined through FY2017, falling to 221,000 workers. The total number of beneficiaries under the RRA and RUIA decreased from 623,000 in FY2008 to 574,000 in FY2017, and total benefit payments increased from $10.1 billion to $12.6 billion during the same time. During FY2017, the RRB paid nearly $12.5 billion in retirement, disability, and survivor benefits to approximately 548,000 beneficiaries. Almost $105.4 million in unemployment and sickness benefits were paid to approximately 28,000 claimants.", "This report explains the programs under RRA and RUIA, including how each program is financed, the eligibility rules, and the types of benefits available to railroad workers and family members. It also discusses how railroad retirement relates to the Social Security system. For a quick overview of this topic, see CRS In Focus IF10481, Railroad Retirement Board: Retirement, Survivor, Disability, Unemployment, and Sickness Benefits . "], "subsections": []}, {"section_title": "Railroad Retirement, Survivor, and Disability Benefits", "paragraphs": ["The RRA authorizes retirement, survivor, and disability benefits for railroad workers and their families. In December 2017, there were a total of 526,100 RRA beneficiaries, decreasing from 672,400 in 2001. This decline might partly result from the decline in railroad employment in the past five decades. The average monthly benefit for each beneficiary was about $1,986 in 2017, which increased from $1,043 in 2001, reflecting the growth in average wages and prices (see Figure 1 ). "], "subsections": [{"section_title": "Financing", "paragraphs": ["The railroad retirement, disability, and survivor program is mainly financed by payroll taxes, financial interchanges from Social Security, and transfers from the National Railroad Retirement Investment Trust (NRRIT) (see Figure 2 ), all of which accounted for 93.9% of the $12.7 billion gross funding of the RRA program during FY2017. The remaining 6.1% of the program was financed by federal income taxes levied on railroad retirement benefits, interest on investment and other revenue, and general appropriations to pay the costs of phasing out vested dual benefits.", "Payroll taxes, which provided 47.0% of gross RRA funding in FY2017, are the largest funding source for railroad retirement, survivor, and disability benefits. Railroad retirement payroll taxes are divided into two tiers\u2014Tier I and Tier II taxes. The Tier I tax is the same as the Social Security payroll tax: railroad employers and employees each pay 6.2% on earnings up to $132,900 in 2019. The Tier II tax is set each year based on the railroad retirement system's asset balances, benefit payments, and administrative costs. In 2019, the Tier II tax is 13.1% for employers and 4.9% for employees on earnings up to $98,700. Tier II taxes are used to finance Tier II benefits, the portion of Tier I benefits in excess of Social Security retirement benefits (such as unreduced early retirement benefits for railroad employees with at least 30 years of railroad service), and supplemental annuities. ", "Tier I payroll taxes are deposited in the Social Security Equivalent Benefit Account (SSEBA), which pays the Social Security level of benefits and administrative expenses allocable to those benefits. The SSEBA also receives or pays the financial interchange transfers between the railroad retirement and Social Security systems. The financial interchange with Social Security provided 32.6% of gross RRA funding in FY2017. The purpose of the financial interchange is to place the Social Security trust funds in the same position they would have been in, if railroad employment had been covered under Social Security since that program's inception.", "Tier II tax revenues that are not needed to pay current benefits or associated administrative costs are held in the National Railroad Retirement Investment Trust (NRRIT), which is invested in both government securities and private equities. NRRIT transfers provide another revenue source for railroad benefits, and they were 14.3% of gross RRA funding in FY2017. Prior to the Railroad Retirement and Survivors' Improvement Act of 2001 ( P.L. 107-90 ), surplus railroad retirement assets could only be invested in U.S. government securities\u2014just as the Social Security trust funds must be invested in securities issued or guaranteed by the U.S. government. The 2001 act established the NRRIT to manage and invest the assets in the Railroad Retirement Account in the same way that the assets of private-sector and most state and local government pension plans are invested. The remainder of the railroad retirement system's assets, such as assets in SSEBA, continues to be invested solely in U.S. government-issued or -granted securities. ", "The combined fair market value of Tier II taxes and NRRIT assets is designed to maintain four to six years' worth of RRB benefits and administrative expenses. To maintain this balance, the Railroad Retirement Tier II tax rates automatically adjust as needed. This tax adjustment does not require congressional action, according to Section 204 of the 2001 act. "], "subsections": []}, {"section_title": "Eligibility and Types of Benefits", "paragraphs": ["To be insured for railroad benefits, a worker must generally have at least 10 years of covered railroad work or 5 years performed after 1995 and \"insured status\" under Social Security rules (generally 40 earnings credits) based on combined railroad retirement and Social Security-covered earnings. An insured railroad worker's family may be entitled to receive railroad retirement benefits. If a worker does not qualify for railroad retirement benefits, his or her railroad work counts toward Social Security benefits. Of the total $12.5 billion benefit payments during FY2017, 60.0% (or $7.5 billion) were paid in retirement annuities to retired workers, 8.0% (or $1.0 billion) in disability annuities, 14.4% (or $1.8 billion) in spouse annuities, and 16.8% (or $2.1 billion) in survivor annuities."], "subsections": [{"section_title": "Tier I Retirement Annuities", "paragraphs": ["Tier I annuities are designed to be nearly equivalent to Social Security Old Age, Survivors, and Disability Insurance benefits. Tier I annuities are calculated using the Social Security benefit formula and are based on both railroad retirement and Social Security-covered employment. However, Tier I annuities are more generous than Social Security benefits in certain situation. For example, at the age of 60, railroad workers with at least 30 years of covered railroad work may receive unreduced retirement annuities. At the full retirement age (FRA), which is gradually increasing from 65 to 67 for Social Security and railroad retirement beneficiaries, insured workers with fewer than 30 years of service may receive full retirement ann uities. Alternatively, workers with fewer than 30 years of service may, starting at the age of 62, receive annuities that have been reduced actuarially for the additional years the worker is expected to spend in retirement. Tier I benefit reductions for early retirement are similar to those in the Social Security system. As the FRA rises, so will the reduction for early retirement. If a railroad employee delays retirement past FRA, Tier I annuities are increased by a certain percentage for each month up until the age of 70, which is identical to the benefit increase provided by Delayed Retirement Credits under the Social Security system. ", "In general, Social Security benefits are subtracted from Tier I annuities, because work covered by Social Security is counted toward Tier I annuities. Beneficiaries insured by both systems receive a single check from the RRB. Railroad retirement annuities may also be reduced for certain pensions earned through federal, state, and local government work that is not covered by Social Security. For early retirees who continue to work for a nonrailroad employer while receiving the retirement benefit during the year prior to FRA, Tier I benefits are reduced by $1 for every $2 earned above an exempt amount ($17,040 in 2018). After Tier I benefits are first paid, they increase annually with a cost-of-living adjustment (COLA) in the same manner as Social Security benefits.", "Retirement annuities are not payable to workers who continue to work in a covered railroad job or who return to railroad work after retirement. "], "subsections": []}, {"section_title": "Tier II Retirement Annuities", "paragraphs": ["Tier II retirement annuities are paid in addition to Tier I annuities and any private pension and retirement saving plans offered by railroad employers. They are similar to private pensions and based solely on covered railroad service. Tier II annuities for current retirees are equal to seven-tenths of 1% of the employee's average monthly earnings in the 60 months of highest earnings, times the total number of years of railroad service. Tier II annuities are increased annually by 32.5% of the Social Security COLA.", "Tier II annuities are not (in contrast to Tier I annuities) reduced if a worker receives Social Security benefits or a government pension that was not covered by Social Security. For railroad retirees and spouses who work for their last pre-retirement nonrailroad employer while receiving retirement benefits, Tier II annuities are reduced by $1 for every $2 earned, capped at 50% of the Tier II annuity. There is no cap to the earnings-related reduction in railroad Tier I or Social Security benefits. In addition, the earnings-related reduction applies to all Tier II beneficiaries regardless of age, whereas for railroad Tier I and Social Security benefits, the earnings-related reduction applies only until the beneficiary reaches FRA."], "subsections": []}, {"section_title": "Other Retired Worker Benefits: Supplemental Annuities and Vested Dual Benefits", "paragraphs": ["Tier II payroll taxes also finance a supplemental annuity program. Supplemental annuities are payable to employees first hired before October 1981, aged 60 with at least 30 years of covered railroad service or aged 65 and older with at least 25 years of covered railroad service, and a current connection with the railroad industry. ", "In addition, general revenues finance a vested dual benefit for those who were insured for both railroad retirement and Social Security in 1974 when the two-tier railroad retirement benefit structure was established. Neither supplemental annuities nor vested dual benefits are adjusted for changes in the cost of living during retirement. Supplemental annuities are subject to the same earnings reductions as Tier II benefits; vested dual benefits are subject to the same earnings reductions as Tier I benefits."], "subsections": []}, {"section_title": "Disability Annuities", "paragraphs": ["Railroad workers may be eligible for disability annuities if they become disabled regardless of whether the disability is caused by railroad work. The RRB determines whether a worker is disabled based on the medical evidence provided during the application process. Railroad workers found to be totally and permanently disabled from all work may be eligible for Tier I benefits at any age if the worker has at least 10 years of railroad service. Totally disabled workers may also receive Tier II benefits at the age of 62 if they have 10 or more years of service. Occupational disability annuities are also payable to workers found to be permanently disabled from their regular railroad occupations, if the worker is at least 60 years old with 10 years of service (or any age with 20 years of service), and with a current connection to the railroad industry. A five-month waiting period after the onset of disability is required before any disability annuity can be payable.", "Disability annuities are not payable if a worker is currently employed in a covered railroad job. Disability benefits are suspended if a beneficiary earns more than a certain amount after deducting certain disability-related work expenses. The Tier I portion of disability benefits may be reduced for the receipt of workers compensation or government disability benefits."], "subsections": []}, {"section_title": "Spouse Annuities", "paragraphs": ["In any month that a worker collects a railroad retirement or disability annuity, his or her spouse may also be eligible for a spousal annuity equal to or greater than the benefit he or she would have received if the worker's railroad work had been covered by Social Security. A spouse is eligible for a spousal annuity when he or she reaches the same minimum age required for the worker (i.e., either at the age of 60 or 62, depending on years of the worker's service). At any age, a spouse may be eligible for a spousal annuity if he or she cares for the worker's unmarried child under the age of 18 (or a child of any age that was disabled before the age of 22). An individual must have been married to the railroad worker for at least one year before he or she applies for the spousal annuities, with certain exceptions. A qualifying spouse receives 50% of the worker's Tier I benefit before any reductions (or, if higher, a Social Security benefit based on his or her own earnings). Spouses may also receive 45% of the worker's Tier II benefit before any reductions. ", "Divorced spouses of retired or disabled railroad workers may also be eligible for spousal annuities. A divorced spouse may receive 50% of the worker's Tier I benefit before reductions, but no Tier II benefits. To qualify, the former spouse must have been married to the worker for at least 10 years and must not currently be married (remarriages if any must have terminated); both the worker and former spouse must be at least 62 years old.", "For spouses, as for railroad workers, Social Security benefits are subtracted from Tier I annuities. The Tier I portion of a spouse annuity may also be reduced for receipt of any pension from government employment not covered by Social Security based on the spouse's own earnings. Spouses are subject to reductions based on the primary worker's earnings as well as on their own earnings. For example, for early retirement, spouses are subject to different benefit reductions from workers. Finally, spouse annuities are reduced by the amount of any railroad benefits earned based on their own work."], "subsections": []}, {"section_title": "Survivor Annuities", "paragraphs": ["After the worker's death, surviving spouses, former spouses, children, and other dependents may be eligible to receive survivor annuities, which are paid in addition to any private life insurance offered by railroad employers. To be insured for survivor annuities, the worker must have had a current connection with the railroad industry at the time of death. Railroad survivor annuities are generally higher than comparable Social Security benefits because railroad workers' families may be entitled to Tier II annuities as well as Tier I annuities (as noted above, Tier I annuities are equivalent to Social Security benefits). In cases where no monthly survivor annuities are paid, a lump-sum payment may be made to certain survivors.", "The widows and widowers of railroad workers may be eligible to receive survivor annuities. At FRA, a surviving spouse may be eligible for 100% of the worker's Tier I annuity (or his or her own Social Security or railroad retirement Tier I benefit, if higher). The widow(er) may also receive up to 100% of the worker's Tier II annuity. As early as the age of 60 (or age 50, if disabled), widows and widowers may receive reduced survivor annuities. A qualifying widow(er) must have been married to the deceased railroad worker for at least nine months, with certain exceptions. At any age, a widow(er) caring for a deceased worker's child under the age of 18 may receive a survivor annuity equal to 75% of the worker's Tier I annuity, as well as up to 100% of the worker's Tier II annuity. Widow(er)s who are the natural or adoptive parent of the deceased worker's child do not have to meet the length of marriage requirement. ", "Survivor annuities may also be payable to a surviving divorced spouse or remarried widow(er). To qualify for benefits, a surviving divorced spouse has to be married to the employee for at least 10 years and is unmarried or remarried after age 60 (age 50 for disabled surviving divorced spouse). A surviving divorced spouse who is unmarried can qualify for benefits at any age if caring for the employee's child who is under age 16 or disabled. Benefits are limited to the amounts Social Security would pay (Tier I only) and therefore are less than the amount of the survivor annuity otherwise payable. ", "Railroad workers' children may also receive survivor annuities. To qualify, a child must be unmarried and under the age of 18 (or 19 if still in high school). Disabled adult children may qualify if their disability began before the age of 22. Eligible children receive 75% of the worker's Tier I annuity and 15% of the worker's Tier II annuity. In addition, if a worker's parent was dependent on the worker for at least half of the parent's support, he or she may receive 82.5% of the worker's Tier I annuity and 35% of the worker's Tier II annuity after reaching age 60.", "Survivor annuities are not payable to a current railroad employee, and survivor annuities are reduced by any railroad retirement benefit the survivor has earned through his or her own railroad work. Survivors receive the same reductions as retired workers for Social Security benefit receipt; they also have reductions from government pension receipts that are not covered by Social Security. A family maximum applies to survivor benefits, usually applicable when three or more survivors receive benefits on a worker's record (not counting divorced spouses).", "In summary, Table 1 provides data on railroad retirement, survivor, and disability annuities as of June 2018."], "subsections": []}]}]}, {"section_title": "Railroad Unemployment and Sickness Benefits", "paragraphs": ["Railroad workers may qualify for daily unemployment and sickness benefits under the Railroad Unemployment Insurance Act (RUIA). These monetary benefits are paid in addition to any paid leave or private insurance an employee may have. For sickness benefits, a worker must be unable to work because of illness or injury. Sickness benefits are distinct from disability benefits because they are intended to cover a finite, temporary period of time. Workers may not earn any money while receiving unemployment or sickness benefits.", " Figure 3 displays the monthly number of beneficiaries with unemployment and sickness benefits from January 2002 to July 2018, respectively. Although the number of sickness beneficiaries stayed relatively stable over time, the number of unemployment insurance beneficiaries increased significantly during and after the most recent economic recession from 2007 to 2009. "], "subsections": [{"section_title": "Financing", "paragraphs": ["Railroad unemployment and sickness benefits are financed solely by railroad employers' payroll taxes, based on the taxable earnings of their employees. Employers' tax rates depend on the past rates of unemployment and employees' sickness claims. For calendar year 2018, the employer tax rate ranges from 2.2% to 12.0% on the first $1,560 of each employee's monthly earnings. ", "The payroll tax proceeds not needed immediately for unemployment and sickness insurance benefits or operating expenses are deposited in the Railroad Unemployment Insurance Account maintained by the Treasury. This account, together with similar unemployment insurance accounts for each state, forms a Federal Unemployment Insurance Trust Fund whose deposits are invested in U.S. government securities, and the Railroad Unemployment Insurance Account receives interest based on these deposits. During FY2017, payroll tax contributions from railroad employers totaled $126.4 million and interest income was about $4 million. ", "The RUIA provides for employers to pay a surcharge if the Railroad Unemployment Insurance Account falls below an indexed threshold amount. The surcharge is added to the employer's tax rate. However, the total tax rate plus the surcharge cannot exceed the maximum rate of 12.0%, unless the surcharge is 3.5%, in which case the maximum tax rate is increased to 12.5%. From 2004 through 2010, the surcharge was 1.5%. The surcharge in 2011 was 2.5% and 1.5% in 2012 with no surcharges in 2013 or 2014. The surcharge in 2018 was 1.5%, the same as the level in the past three years."], "subsections": []}, {"section_title": "Eligibility and Benefits", "paragraphs": ["Eligibility for railroad unemployment and sickness benefits is based on recent railroad service and earnings. The annual benefit year begins on July 1. Eligibility is based on work in the prior year, or the base year. To qualify in the benefit year beginning July 1, 2018, railroad workers must have base year earnings of $3,862.50 in calendar year 2017, counting no more than $1,545 per month. New railroad workers must also have at least five months of covered railroad work in the base year. To receive unemployment benefits, a worker must be ready, willing, and able to work.", "The maximum daily unemployment and sickness benefit payable in the benefit year that began July 1, 2018, is $77, and the maximum benefit for a biweekly claim is $770. However, due to sequestration pursuant to the Budget Control Act of 2011 ( P.L. 112-25 , as amended), the maximum daily benefit of $77 is reduced by 6.2% to $72.23 and the maximum biweekly benefit is reduced by 6.2% to $722.26 through September 30, 2019. Railroad workers receive these benefits only to the extent that they are higher than other benefits they receive under the RRA, the Social Security Act, or certain other public programs, including workers compensation. ", "Unemployment and sickness beneficiaries may receive normal benefits for up to 26 weeks in a benefit year or until the benefits they receive equal their creditable earnings in the base year if sooner. Employees with at least 10 years of covered railroad service may qualify for extended benefits for 13 weeks after they have exhausted normal benefits. Table 2 displays the number and average weekly amount of RUIA benefits paid in June 2018. ", "Workers who apply for unemployment benefits are automatically enrolled in a free job placement service operated by railroad employers and the RRB. "], "subsections": []}]}]}}
{"id": "R42566", "title": "Alternative Fuel and Advanced Vehicle Technology Incentives: A Summary of Federal Programs", "released_date": "2019-02-26T00:00:00", "summary": ["A wide array of federal incentives supports the development and deployment of alternatives to conventional fuels and engines in transportation. These incentives include tax deductions and credits for vehicle purchases and the installation of refueling systems, federal grants for conversion of older vehicles to newer technologies, mandates for the use of biofuels, and incentives for manufacturers to produce alternative fuel vehicles. The current array of incentives for alternative fuels and related technologies does not reflect a single, comprehensive strategy, but rather an aggregative approach to a range of discrete public policy issues, including goals of reducing petroleum consumption and import dependence, improving environmental quality, expanding domestic manufacturing, and promoting agriculture and rural development.", "Current federal programs are administered by five key agencies: Department of the Treasury (Treasury), Department of Energy (DOE), Department of Transportation (DOT), Environmental Protection Agency (EPA), and the U.S. Department of Agriculture (USDA). The incentives and programs described in this report are organized by the responsible agency.", "Treasury (through the Internal Revenue Service, IRS) administers tax credits and deductions for alternative fuel and advanced technology vehicle purchases, expansion of alternative fuel refueling infrastructure, and incentives for the production and/or distribution of alternative fuels. Many of these incentives have expired in recent years. DOE (mainly through the Office of Energy Efficiency and Renewable Energy, EERE) administers research and development (R&D) programs for advanced fuels and transportation technology, grant programs to deploy alternative fuels and vehicles, and a loan program to promote domestic manufacturing of high-efficiency vehicles. DOT (mainly through the Federal Highway Administration, FHWA, and Federal Transit Administration, FTA) administers grant programs to deploy \"clean fuel\" buses and other alternative fuel vehicles. DOT (through the National Highway Traffic Safety Administration, NHTSA) also administers federal Corporate Average Fuel Economy (CAFE) standards, which include incentives for production of alternative fuel vehicles. EPA (mainly through the Office of Transportation and Air Quality, OTAQ) administers the Renewable Fuel Standard, which mandates the use of biofuels in transportation. EPA also administers grant programs to replace older diesel engines with newer technology. USDA (mainly through the Rural Business-Cooperative Service, RBS) administers grant, loan, and loan guarantee programs to expand agricultural production of biofuel feedstocks, conduct R&D on biofuels and bioenergy, and establish and expand facilities to produce biofuels, bioenergy, and bioproducts."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["A range of federal incentives supports the development and deployment of alternatives to conventional fuels and engines in transportation. These incentives include tax deductions and credits for vehicle purchases and the installation of refueling systems, federal grants for conversion of older vehicles to newer technologies, mandates for the use of biofuels, and incentives for manufacturers to produce alternative fuel vehicles. Some of these incentives have expired in recent years when their authorizations expired.", "Many of the policy choices presented for alternative fuel and advanced vehicle technologies originated as a response to the nation's interest in reducing petroleum imports, a goal first articulated at the time of the two oil embargoes imposed by the Organization of Petroleum Exporting Countries (OPEC) in the 1970s. While President Richard Nixon is often cited as the first President to call for \"energy independence,\" successive Presidents and Congresses have made efforts to reduce petroleum import dependence as well.", "As shown in Figure 1 , since peaking in 2005, net U.S. oil imports have fallen by 70%. Factors in this reversal include the last recession, which reduced domestic demand, followed by a rise in the supply of U.S. oil and oil alternatives due to increased private sector investment and federal incentives, some of which are cited in this report. In addition, the United States has become a net exporter of petroleum products (while it remains a net importer of crude oil). With declining U.S. import dependence, reliance on petroleum and petroleum products may be less of a factor in promoting alternative fuels and alternative fuel vehicles in the future. ", "In addition to concerns over petroleum import dependence, other factors also have driven policy on alternative fuels and advanced vehicle technologies. Federal incentives do not reflect a single, comprehensive strategy but rather an aggregative approach to a range of discrete public policy issues, including improving environmental quality, expanding domestic manufacturing, and promoting agriculture and rural development."], "subsections": []}, {"section_title": "Factors Behind Alternative Fuels and Technologies Incentives", "paragraphs": ["While a reliance on foreign sources of petroleum was an overriding concern for much of the past 40 years, other factors, such as rural development, promotion of domestic manufacturing, and environmental concerns, have also shaped congressional interest in alternative fuels and technologies. A variety of programs affecting the development and commercialization of alternative fuels and technologies have been proposed and enacted, each with its own benefits and drawbacks. (This report does not evaluate the effectiveness of alternative fuel programs and incentives.) Alternative fuels programs can be generally classified into six categories: expanding domestic ethanol production; establishing other alternative fuels; encouraging the purchase of nonpetroleum vehicles; reducing fuel consumption and greenhouse gas emissions; supporting U.S. vehicle manufacturing; and funding U.S. highways."], "subsections": [{"section_title": "Developing Domestic Ethanol Production", "paragraphs": ["Ethanol has been seen as a homegrown alternative to imported oil. A number of programs were put in place to encourage its domestic development (instead of importing from other ethanol producers, such as Brazil). To spur establishment of this domestic industry, Congress has enacted a number of laws, which are beneficial to states that have a large concentration of corn growers (corn being the raw material feedstock in most U.S. ethanol). Many of the incentives for ethanol production have been included in farm-related legislation and appropriations acts and hence have been administered by the U.S. Department of Agriculture (USDA), or in tax provisions administered by the Internal Revenue Service (IRS). The volumetric ethanol excise tax credit (VEETC) provided a tax credit to gasoline suppliers who blended ethanol with gasoline. The small ethanol producer tax credit provided a limited additional credit for small ethanol producers. Both credits expired at the end of 2011. Since 2005, petroleum refiners and importers have been required to supply biofuels as a share of their gasoline and diesel supply. This mandate, the Renewable Fuel Standard (RFS), has been an impetus for expanded production and use of ethanol and other biofuels. "], "subsections": []}, {"section_title": "Establishing Other New Alternative Fuels", "paragraphs": ["In addition to ethanol, Congress has sought to spur development of other alternative fuels, such as biodiesel, cellulosic biofuel, hydrogen, liquefied petroleum gas (LPG), compressed natural gas (CNG), and liquefied natural gas (LNG). Some of these fuels have been supported through tax credits (such as the biodiesel tax credit), federal mandates (mainly the RFS), and R&D programs (such as the Biomass Research and Development Initiative, which provides grants for new technologies leading to the commercialization of biofuels). "], "subsections": []}, {"section_title": "Encouraging the Purchase of Nonpetroleum Vehicles", "paragraphs": ["Congress has enacted laws which seek to boost consumer adoption by providing tax credits for the purchase of some vehicles that consume far less petroleum than conventional vehicles, or that do not consume petroleum at all. These tax credit programs generally are limited in duration as a way to encourage early adopters to take a risk on new kinds of vehicles. The proponents contend that once a significant number of such new cars and trucks are on the road, additional buyers would be attracted to them, the increased volume would result in lower prices, and the tax credits would no longer be needed. Currently, a credit is available for the purchase of plug-in electric vehicles. Expired credits include incentives for hybrid vehicles, fuel cell vehicles, advanced lean burn technology vehicles, and certain alternative fuel vehicles. Congress has also enacted tax credits to spur the expansion of infrastructure to fuel such vehicles, although these credits have likewise expired."], "subsections": []}, {"section_title": "Reducing Fuel Consumption and Vehicle Emissions", "paragraphs": ["Several agencies, including the Environmental Protection Agency (EPA) and the Department of Transportation (DOT), have been mandated by statute to address concerns over fuel consumption and vehicle emissions through programs for alternative fuels. The most significant and long-standing program to reduce vehicle fuel consumption is the Corporate Average Fuel Economy (CAFE) program administered by DOT. Under CAFE, each manufacturer's fleet must meet specific miles-per-gallon standards for passenger vehicles and light trucks. If a manufacturer fails to do so, it is subject to financial penalties. Manufacturers can accrue credits toward meeting CAFE standards for the production and sale of certain types of alternative fuel vehicles. A joint rulemaking process between DOT and EPA links future CAFE standards with greenhouse gas (GHG) standards promulgated under EPA's Clean Air Act authority. DOT also established the Congestion Mitigation and Air Quality Improvement Program (CMAQ) to fund programs that intended to reduce emissions in urban areas that exceed certain air quality standards. At EPA, the Diesel Emission Reduction Act (DERA) was implemented with a goal of reducing diesel emissions by funding and implementing new technologies. In addition, EPA's RFS mandates the use of renewable fuels for transportation. Under the RFS, some classes of biofuels must achieve GHG emission reductions relative to gasoline. "], "subsections": []}, {"section_title": "Supporting U.S. Motor Vehicle Manufacturing", "paragraphs": ["The Department of Energy (DOE), in partnership with U.S. automakers, federal labs, and academic institutions, has funded and overseen research and development programs on vehicle electrification for decades, in particular research focused on how to produce economical batteries that extend electric vehicle range. These R&D programs were supplemented in the American Recovery and Reinvestment Act (ARRA; P.L. 111-5 ) to include grants to U.S.-based companies for facilities to manufacture advanced battery systems, component manufacturers, and software designers to boost domestic production and international competitiveness. The Advanced Technology Vehicles Manufacturing (ATVM) loan program at DOE, established by the Energy Independence and Security Act of 2007 ( P.L. 110-140 ), has supported manufacturing plant investments to enable the development of technologies to reduce petroleum consumption, including the manufacture of electric and hybrid vehicles, although no new loans have been approved since 2011."], "subsections": []}, {"section_title": "Highway Funding and Fuels Taxes", "paragraphs": ["As described below (see \" Motor Fuel Excise Taxes \"), one of the earliest fuels-related federal programs is the motor vehicle fuels excise tax first passed in the Highway Revenue Act of 1956 to fund construction and maintenance of the interstate highway system. Originally, only gasoline and diesel were taxed, but as newer fuels became available (such as ethanol and compressed natural gas), they were added to the federal revenue program, but often at lower tax rates than gasoline or diesel. Lower tax burdens for some fuels or vehicles may effectively incentivize those choices over conventional options. However, lower tax burdens for these vehicles and fuels could compromise federal highway revenue. The vehicles responsible for lower tax revenues include traditional internal combustion engine vehicles with higher mileage per gallon as well as new technology electric and hybrid cars."], "subsections": []}]}, {"section_title": "Structure and Content of the Report", "paragraphs": ["The federal tax incentives and programs discussed in this report aim to support the development and deployment of alternative fuels. There is no central coordination of how these incentives interact. In general, they are independently administered by separate federal agencies, including five agencies: Department of the Treasury, DOE, DOT, EPA, and USDA.", "This report focuses strictly on programs that directly support alternative fuels or advanced vehicles. It does not address more general programs (e.g., general manufacturing loans, rural development loans), or programs that have been authorized but never funded. The programs are presented by agency, starting with those that generally address the above factors, followed by those that are fuel- or technology-specific. Programs that expired or were repealed on or after December 31, 2017, are included in Appendix A , Recently Expired or Repealed Programs. Congress may explore whether to reinstate these expired programs or establish similar programs.", " Appendix B contains four tables:", "1. a summary of the programs discussed in the body of the report, listed by agency ( Table B-1 ); 2. a listing of programs and incentives for alternative fuels, by fuel type ( Table B-2 ); 3. a listing of programs and incentives for advanced technology vehicles, by vehicle type ( Table B-3 ); and 4. a listing of recently expired programs by agency ( Table B-4 )."], "subsections": []}, {"section_title": "Current Federal Incentives", "paragraphs": [], "subsections": [{"section_title": "Department of the Treasury", "paragraphs": [], "subsections": [{"section_title": "Idle Reduction Equipment Tax Exemption6", "paragraphs": [], "subsections": []}, {"section_title": "Motor Fuel Excise Taxes10", "paragraphs": [], "subsections": []}, {"section_title": "Plug-In Electric Drive Vehicle Credit15", "paragraphs": [], "subsections": []}]}, {"section_title": "Department of Energy", "paragraphs": [], "subsections": [{"section_title": "Advanced Technology Vehicles Manufacturing Loan Program (ATVM)", "paragraphs": [], "subsections": []}, {"section_title": "Bioenergy Technologies Program (formerly the Biomass and Biorefinery Systems R&D Program)", "paragraphs": [], "subsections": []}, {"section_title": "Clean Cities Program", "paragraphs": [], "subsections": []}, {"section_title": "Hydrogen and Fuel Cell Technologies Program", "paragraphs": [], "subsections": []}, {"section_title": "Vehicle Technologies Program (VTP)", "paragraphs": [], "subsections": []}]}, {"section_title": "Department of Transportation", "paragraphs": [], "subsections": [{"section_title": "Congestion Mitigation and Air Quality Improvement Program", "paragraphs": [], "subsections": []}, {"section_title": "Corporate Average Fuel Economy Program Alternative Fuel Vehicle Credits", "paragraphs": [], "subsections": []}, {"section_title": "Low or No Emission Vehicle Program", "paragraphs": [], "subsections": []}]}, {"section_title": "Environmental Protection Agency", "paragraphs": [], "subsections": [{"section_title": "National Clean Diesel Campaign", "paragraphs": [], "subsections": []}, {"section_title": "Renewable Fuel Standard", "paragraphs": [], "subsections": []}]}, {"section_title": "Department of Agriculture19", "paragraphs": [], "subsections": [{"section_title": "Bioenergy Program for Advanced Biofuels20", "paragraphs": [], "subsections": []}, {"section_title": "Biomass Crop Assistance Program (BCAP; \u00a79011)21", "paragraphs": [], "subsections": []}, {"section_title": "Biomass Research and Development (BRDI)22", "paragraphs": [], "subsections": []}, {"section_title": "Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program (formerly the Biorefinery Assistance Program)24", "paragraphs": [], "subsections": []}, {"section_title": "Rural Energy for America Program (REAP) Grants and Loans25", "paragraphs": ["Appendix A. Recently Expired or Repealed Programs ", "Alternative Fuel Refueling Property Credit ", "Alternative Motor Vehicle Credit ", "Biodiesel or Renewable Diesel Income Tax Credit", "Biodiesel or Renewable Diesel Mixture Tax Credit", "Incentives for Alternative Fuel and Alternative Fuel Mixtures ", "Plug-In Electric Vehicle Credit (Two- or Three-Wheeled)", "Repowering Assistance Program ", "Second Generation Biofuel Producer Credit (previously the Credit for Production of Cellulosic and Algae-Based Biofuel) ", "Small Agri-Biodiesel Producer Credit ", "Special Depreciation Allowance for Second Generation (Cellulosic and Algae-Based) Biofuel Plant Property ", "Appendix B. Summary Tables", "Appendix B contains four tables", "Table B-1 provides a summary of the programs discussed in the body of the report, listed by agency; Table B-2 lists programs and incentives for alternative fuels, by fuel type; Table B-3 lists programs and incentives for advanced technology vehicles, by vehicle type; and Table B-4 lists programs by agency that have expired or were repealed since December 31, 2017."], "subsections": []}]}]}]}}
{"id": "R45652", "title": "Assessing NATO\u2019s Value", "released_date": "2019-03-28T00:00:00", "summary": ["On April 4, 2019, foreign ministers from the 29 member states of the North Atlantic Treaty Organization (NATO) are to gather in Washington, DC, to mark the 70th anniversary of the North Atlantic Treaty (also known as the Washington Treaty). NATO Secretary General Jens Stoltenberg is to address a joint session of Congress on April 3, 2019, the first ever to do so. Congress was instrumental in creating NATO in 1949 and has played a critical role in shaping U.S. policy toward the alliance ever since.", "A key goal of the 70th anniversary meeting will be to highlight NATO's past successes and present a unified vision for its future. The United States was the driving proponent of NATO's creation and has been the unquestioned leader of the alliance as it has evolved from a collective defense organization of 12 members focused on deterring the Soviet Union to a globally engaged security organization of 29 members. Successive U.S. Administrations have viewed U.S. leadership of NATO as a cornerstone of U.S. national security strategy. Proponents of NATO cite numerous benefits to the United States, including", "peace, stability, conflict prevention, and deterrence in Europe; treaty-based defense and security support from 28 allies, including many of the world's most advanced militaries; an unrivaled platform for constructing and operating international military coalitions; U.S. military bases in strategically important locations; and economic stability in the world's largest trade and investment marketplace.", "On the other hand, NATO's critics argue that European reliance on U.S. security guarantees have fostered an imbalanced and unsustainable \"burdensharing\" arrangement by which the United States carries an unfair share of the responsibility for ensuring European security. Critics cite the following costs to the United States of its leadership of NATO:", "loss of autonomy; heightened risks to U.S. forces; continued European military dependence on the United States; provoking Russia; and a negative budgetary impact.", "The anniversary meeting comes at a tense time for NATO, as the allies have struggled to present a unified response to vocal criticism from U.S. President Donald Trump. President Trump has admonished European allies for failing to meet agreed NATO defense spending targets and has repeatedly questioned NATO's value to the United States. Although he is not the first U.S. president to press the allies to increase defense spending, none has done so as stridently and none has called into question the U.S. commitment to NATO as openly or to the same extent as Trump. The President's criticisms have provoked mixed reactions in the United States, with NATO supporters, including many Members of Congress, reaffirming the U.S. commitment to NATO, and others reevaluating the costs and benefits of long-standing U.S. leadership of the alliance.", "Trump Administration officials stress that they remain committed to NATO and to upholding European security. They underscore that Congress has supported the Administration's requests to increase funding for U.S. defense activities in Europe such as the European Deterrence Initiative. President Trump's supporters also argue that his forceful statements have succeeded in securing defense spending increases by European allies that were not forthcoming under his predecessors.", "While many Members of Congress have criticized specific developments within NATO\u2014regarding burdensharing, for example\u2014Congress as a whole has demonstrated consistent bipartisan support for NATO. During the Trump Administration, congressional support has at times been viewed as an effort to reassure allies troubled by President Trump's criticisms of the alliance. During the Trump Administration, both chambers of Congress have passed legislation expressly reaffirming U.S. support (H.Res. 397; H.R. 5515/P.L. 115-232; H.Res. 256), including legislation passed by the House in January 2019 (H.R. 676) seeking to limit the president's ability to withdraw from NATO unilaterally (similar legislation, S.J.Res. 4, has been introduced in the Senate). Some analysts portrayed the bipartisan House-Senate invitation to Secretary General Stoltenberg to address a joint session as an additional demonstration of NATO's importance to the Congress."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The United States was the driving proponent of NATO's creation in 1949 and has been the unquestioned leader of the alliance as it has evolved from a regionally focused collective defense organization of 12 members to a globally engaged security organization of 29 members. Successive U.S. Administrations have viewed U.S. leadership of NATO as a cornerstone of U.S. national security strategy, bringing benefits ranging from peace and stability in Europe to the political and military support of 28 allies, including many of the world's most advanced militaries. ", "For almost as long as NATO has been in existence, it also has faced criticism. One chief concern of critics in the United States, including some Members of Congress, has been that European allies' reliance on U.S. security guarantees have fostered an imbalanced and unsustainable \"burdensharing\" arrangement by which the United States carries an unfair share of the responsibility for ensuring European security. President Donald Trump has amplified these concerns, and his assertions that NATO is a \"bad deal\" have caused some analysts and policymakers to reassess the costs and benefits to the United States of its long-standing leadership of the alliance.", "Although successive U.S. presidents have called on the allies to increase defense spending, none has done so as stridently as President Trump. He is also the first U.S. president to publicly suggest that the United States could modify its commitment to NATO should the allies fail to meet agreed defense spending targets. Trump Administration officials stress that the United States remains committed to NATO, as articulated in the Administration's National Security and Defense Strategies. They highlight the Administration's successful efforts in 2017 and 2018 to substantially increase funding for the U.S. force presence in Europe. President Trump's supporters, including some Members of Congress, also argue that Trump's forceful statements have succeeded in securing defense spending increases across the alliance that were not forthcoming under his predecessors. ", "Nevertheless, many supporters of NATO, including some allied governments, continue to question the President's commitment to the alliance and worry that his condemnations could damage NATO cohesion and credibility. In the face of these concerns, Congress has demonstrated significant bipartisan support for NATO and U.S. leadership of the alliance. In January 2019, following reports that the President has considered seeking to withdraw the United States from NATO, the House of Representatives passed legislation reaffirming U.S. support for the alliance and limiting the President's authority to withdraw ( H.R. 676 , passed by a vote of 357-22); similar legislation has been introduced in the Senate (S.J.Res. 4). ", "Many analysts view the bipartisan, House-Senate invitation to NATO Secretary General Jens Stoltenberg to address a joint session of Congress on April 3, 2019, as an additional sign of continued congressional support. At the same time, Congress continues to assess NATO's utility and value to the United States and some Members are concerned about several key challenges that continue to face the alliance, including burdensharing, managing relations with Russia, and divergent threat perceptions within the alliance.", "This report provides context for ongoing discussions about NATO's value to the United States and the extent to which NATO serves U.S. strategic interests. A historical overview focuses on the perceived benefits to the United States of NATO membership from NATO's founding to the present day. Sections on burdensharing and Russia address key challenges facing the alliance. The report concludes with a discussion of U.S. policy and considerations for Congress. An appendix provides data on defense spending by NATO members. "], "subsections": []}, {"section_title": "Historical Context: NATO's Evolution4", "paragraphs": ["Broadly speaking, NATO has evolved through four phases since its inception in 1949: ", "t he Cold War era between 1949 and 1991; t he post-Cold War transformation of the 1990s , marked by the start of NATO enlargement to former Warsaw Pact countries and debates over \"out-of-area\" military operations prompted by wars in the Western Balkans; t he post-September 11, 2001 , focus on crisis management and stabilizing Afghanistan; and s ince 2014, a renewed focus on deterring Russia and heightened concern about threats emanating from the Middle East and North Africa. ", "NATO's current Strategic Concept, adopted in 2010, articulates three broad activities for NATO: collective defense, crisis management, and cooperative security. The far-reaching nature of these priorities reflects both the increasingly complex global security environment and the diverse range of threat perceptions inherent in an alliance of 29 members. Some observers express concern that NATO may lack the collective political will and the requisite military capacities to fulfill these objectives, which in turn could lead to an erosion of political and public support for the alliance. Others counter that despite such concerns, NATO's capacity to enhance security for its member states remains unparalleled and that the alliance has demonstrated flexibility in adapting to meet a wide range of evolving security threats. "], "subsections": [{"section_title": "The Cold War: Defending Against the Soviet Union", "paragraphs": ["In the aftermath of World War II, the United States designed NATO to provide a framework for coordinating U.S., Canadian, and West European defense against the threat from the Soviet Union and the Warsaw Pact. NATO's foundational mutual defense clause\u2014enshrined in Article 5 of NATO's founding North Atlantic Treaty\u2014sought to prevent both further Soviet expansion and the U.S.S.R's ability to fracture the alliance (see text box). An additional objective was to bind the formerly warring European states (including France, the UK, Italy, and, crucially, West Germany) in a security arrangement that could prevent the outbreak of future hostilities among them. As NATO's first Secretary General, Lord Ismay reportedly quipped, NATO was created \"to keep the Soviet Union out, the Americans in, and the Germans down.\" ", "Throughout the Cold War, U.S. leaders assessed that the strategic benefits of defending Western Europe from an expansionist Soviet Union, building interoperable European militaries, and preventing renewed hostilities among Western European states outweighed the cost of maintaining a vast U.S. military presence in Europe that included more than 400,000 U.S. troops as well as U.S. nuclear weapons. For European allies, the benefits of the U.S. security umbrella were perceived largely as outweighing the costs of hosting U.S. military facilities, fulfilling defense and other requirements determined by the United States, and a loss of strategic autonomy. "], "subsections": []}, {"section_title": "The 1990s: Enlargement, the \"Peace Dividend,\" and \"Out-of-Area\" Operations", "paragraphs": ["With the fall of the Berlin Wall in 1989, the subsequent reunification of Germany, and the collapse of the Soviet Union, some in NATO questioned whether or in what form NATO should continue to exist. The United States and other allied leaders determined that the alliance could still play an important role in fulfilling shared security objectives beyond Cold War territorial defense. Chiefly, the allies agreed to a new nonconfrontational posture based on a drawdown of military forces and pursuit of partnership with former adversaries in the Warsaw Pact. A focus on spreading peace, stability, and democracy throughout Europe led to the accession of 10 new member states in 1999 and 2004 (see Figure 1 ). Although NATO and Russia took the first steps toward partnership during this period, leaders in Moscow remained uneasy with NATO and would later characterize NATO enlargement towards Russian borders as a major security threat.", "The wars in the Western Balkans in the 1990s spurred debate within NATO about so-called \"out of area\" operations. During the Cold War, NATO's military posture had been limited to defending allied territory. The United States and other allies now argued that to remain relevant, NATO must be prepared to confront security threats outside of alliance territory\u2014\"out of area or out of business\" became NATO's de facto mantra. NATO's military intervention in the Western Balkans\u2014beginning in Bosnia in 1995\u2014was a first step in this direction and a monumental one for Germany, which had been constitutionally barred from deploying its forces abroad since World War II. At the behest of the United States, NATO's 1999 Strategic Concept articulated a broader definition of security and identified new security threats, including terrorism, ethnic conflict, human rights abuses, political instability, and the spread of nuclear, biological, and chemical weapons. ", "At the same time, the changed European security environment and the so-called \"peace dividend\" marked the beginning of reductions in European defense spending and military capabilities that created tensions in later years. The United States also embarked on a sharp reduction of U.S. forces in Europe."], "subsections": []}, {"section_title": "Terrorist Attacks of September 11, 2001: NATO in Afghanistan", "paragraphs": ["The September 11, 2001, terrorist attacks on the United States were another pivotal moment in NATO's evolution. For the first and only time, the allies invoked NATO's Article 5 mutual defense clause and offered military assistance to the United States in responding to the attacks. Over the next 13 years, Canada and the European allies would join the United States to lead military operations in Afghanistan in what became by far the longest and most expansive operation in NATO history. As of March 2019, almost one-third of the fatalities suffered by coalition forces in Afghanistan have been from NATO members and partner countries other than the United States. In 2011, the high point of the NATO mission in Afghanistan, about 40,000 of the 130,000 troops deployed to the mission were from non-U.S. NATO countries and partners. ", "Many analysts viewed the significant allied support of the United States following 9/11 as a powerful testament of NATO's enduring strength. The extent of European support could be considered especially remarkable given that many European publics were opposed to, or at best skeptical of, the war in Afghanistan and did not view the Taliban or Al Qaeda as imminent threats to Europe. Canada and the European allies also took on greater responsibilities in Afghanistan despite U.S. reluctance to involve NATO in initial military operations, and despite an acrimonious split between many European governments and the George W. Bush Administration over the U.S.-led war in Iraq. Many analysts point out that the United States only turned to NATO to take on a greater burden in Afghanistan after having launched military operations against Iraq in 2003. They argue that the United States would have been severely challenged to carry out both missions simultaneously without NATO support in Afghanistan.", "Despite the unprecedented show of solidarity following the September 11 attacks, NATO operations in Afghanistan also exposed significant disparities in allied military capabilities and in allies' willingness to engage in combat operations. U.S. officials, including many Members of Congress, consistently criticized the European allies, and especially Germany, for shortfalls in capabilities and for national \"caveats\" that limited the scope of allied military engagement. The United States led a renewed push for the allies to increase defense spending and develop military capabilities to better respond to the new security environment, including \"out-of-area\" stabilization and counter-insurgency operations. The allies first adopted, albeit informally, the 2% of GDP defense spending guideline at NATO's 2006 summit in Prague. "], "subsections": []}, {"section_title": "Back to the Future: Russia's Annexation of Crimea and Renewed Deterrence", "paragraphs": ["Russia's annexation of Crimea in 2014 and subsequent invasion of eastern Ukraine upended NATO's post-Cold War transformation into a more globally oriented security organization. Since 2014, the alliance has taken major steps to strengthen its territorial defense capabilities and deter Russia. NATO's renewed focus on collective defense and deterrence has created some tensions within the alliance, particularly between those member states that perceive Russia as an acute threat and those that favor engagement with Russia over confrontation. In addition, heightened fears about instability in the Middle East and North Africa have exposed differences between those allies more concerned about security threats from NATO's south and those that continue to prioritize deterring and managing Russia. ", "Reflecting the broadening security priorities of its member states, NATO has launched a range of initiatives, including a more robust military presence in its eastern member states and counterterrorism efforts in the Middle East and North Africa. NATO has established an Enhanced Forward Presence (EFP) of about 4,500 troops in the three Baltic States and Poland, increased military exercises and training activities in Central and Eastern Europe, and created new NATO command structures in six Central and Eastern European countries. As part of broader efforts to confront terrorist threats posed by instability in the Middle East and North Africa, NATO has launched a training mission in Iraq. The allies remain heavily invested in seeking to bring long-term stability to Afghanistan, including through a train-and-assist mission of about 17,000 (8,500 non-U.S.) soldiers. NATO continues to maintain a security force of 3,800 troops in Kosovo and also is seeking to develop more robust cyber defense capabilities and address the need to more effectively confront so-called hybrid warfare. ", "Most analysts agree, however, that while NATO has never been more engaged in such a broad range of security efforts, its activities continue to expose significant shortfalls, both in its deterrent posture and in broader crisis management efforts. "], "subsections": []}]}, {"section_title": "The Burdensharing Debate", "paragraphs": ["Since NATO's creation in 1949, the United States has been viewed as the unrivaled leader of the alliance. The United States continues to be the world's preeminent military power and U.S. defense spending long has been significantly higher than those of any other NATO ally. As early as the 1950s, however, U.S. political and military leaders\u2014including some Members of Congress\u2014expressed concern about European dependence on the U.S. security umbrella in Europe and the longer-term political and military implications of this dependence. To promote a more equitable sharing of the transatlantic security burden, Members of Congress and other U.S. leaders have focused most often on seeking to compel European allies to increase their national defense budgets in order to take on a greater share of the security burden. In the 1980s, for example, the U.S. Congress enacted legislation that would place a cap on U.S. force strength in Europe if the allies did not meet a target to grow national defense budgets annually by a rate of 3% higher than inflation.", "More recently, the allies have agreed to ensure that national defense budgets reach at least 2% of GDP by 2024 (discussed in more detail below). Analysts on both sides of the Atlantic have argued, however, that a relatively narrow focus on defense inputs (i.e., the size of defense budgets) could be wasted if not accompanied by an equal, if not greater, focus on defense outputs (i.e., military capabilities and the effectiveness of contributions to NATO missions and activities). The alliance's target to devote at least 20% of each member's national defense expenditure to new equipment and related research and development reflects this goal. ", "NATO Secretary General Jens Stoltenberg also has emphasized a broader approach to measuring contributions to the alliance, using a metric of \"cash, capabilities, and contributions.\" Others add that such a broader assessment of allied contributions would be more appropriate given NATO's wide-ranging strategic objectives, some of which may require capabilities beyond the military sphere. "], "subsections": [{"section_title": "Cash: National Defense Budgets, the 2% Guideline, and NATO's Common Fund", "paragraphs": ["NATO members contribute financially to the alliance in various ways. The most fundamental way is by funding, in members' individual national defense budgets, the development of military capabilities that could support NATO missions and the deployment of their respective armed forces. ", "NATO member states also fund NATO's annual budget of about $2. 6 billion by contributing to NATO's so-called \"common funds .\" National contributions to the common funds pay for the day-to-day operations of NATO headquarters, as well as some collective NATO military assets and infrastructure. According to NATO, in 2018, the U.S. share of NATO's common-funded budgets was about 22% , or about $570 million, followed by Germany (15%), France (11%), and the United Kingdom (UK; 10%).", "In 2006, NATO members agreed informally to aim to spend at least 2% of gross domestic product (GDP) on national defense budgets annually and to devote at least 20% of national defense expenditure to procuring new equipment and related research and development. These targets were formalized at NATO's 2014 Wales Summit, when the allies pledged to \" halt any decline in defence expenditure\" and to \"aim to move towards the 2% guideline within a decade. \" ", "The 2% and 20% spending targets are intended to guide national defense spending by individual NATO members; they do not refer to contributions made directly to NATO nor would all defense spending increases necessarily be devoted solely to meet NATO goals. For example, although the United States spends about 3.4% of GDP on defense, a relatively small portion of this spending goes to NATO and European security as the U.S. defense budget supports U.S. military engagements throughout the world. ", "Most analysts agree that the 2% spending figure \"does not represent any type of critical threshold or 'tipping point' in terms of defens e capabilities, \" and NATO does not impose sanctions on countries that fail to meet the target. However, the target is considered politically and symbolically important. ", "U.S. and NATO officials say they are encouraged by a steady rise in defense spending since the 2014 Wales Summit (See Figure 2 ). Whereas three allies met the 2% guideline in 2014, NATO estimates that seven allies met the target in 2018 (see Table A-1 ). Sixteen allies have submitted plans to meet the 2% and 20% targets by 2024. President Trump and others continue to criticize those NATO members perceived to be reluctant to achieve defense spending targets, however. This includes Europe's largest economy, Germany, which currently spends about 1.25% of GDP on defense and does not plan to reach 2% of GDP by 2024.", "According to NATO defense spending figures, if every ally were to meet the 2% benchmark, the aggregate sum of NATO members' national defense budgets would increase by about $100 billion (from about $988 billion). Although most analysts agree that such an increase could benefit the alliance significantly, many stress that how additional resources are invested is equally, if not more, important . Critics note, for example, that an ally spending less than 2% of GDP on defense could have more modern, effective military capabilities than an ally that meets the 2% target but allocates most of that funding to personnel costs and relatively little to procurement and modernization. "], "subsections": []}, {"section_title": "Capabilities: The 20% Guideline", "paragraphs": ["NATO proponents point out that despite long-standing criticisms of European defense spending levels, the forces of key European allies still rank among the most capable militaries in the world; this assessment remains particularly true for the UK and France, which rank sixth and seventh, respectively in global defense expenditure (Germany ranks ninth). In 2018, total defense spending by European allies is expected to amount to about $282 billion (compared to about $685 billion for the United States), funding close to 1.8 million military personnel (compared to 1.3 million U.S. military personnel). ", "Critics contend that defense spending in Europe is often inefficient, with disproportionately high personnel costs coming at the expense of much-needed research, development, and procurement and what they view as a considerable amount of duplication. They point to significant, long-standing shortfalls in key military capabilities, including strategic air- and sealift; air-to-air refueling; and intelligence, surveillance, and reconnaissance (ISR). NATO military planners also have sought to address so-called readiness shortfalls by urging allies to shorten the time it would take to mobilize and deploy forces. With respect to duplication, NATO officials lament that taken together, European countries have 17 different types of main battle tanks, 13 different types of air-to-air missiles, and 29 different types of naval frigates. ", "In an effort to address these concerns, in 2014, the allies adopted the aforementioned guideline calling for 20% of member states' national defense budgets to be allocated to the procurement of new equipment and related research and development, considered to be a key indicator of the pace of military modernization. NATO leaders say they are encouraged by allied progress toward achieving this target: whereas four allies met the 20% target in 2013, 16 allies met the target in 2018 (see Table A-1 ). ", "NATO officials have long sought to ensure that the national defense spending priorities of member states reflect the broader strategic priorities of the alliance. As these priorities have shifted, so too have its capabilities requirements. To this end, the alliance conducts a Defense Planning Process in order to harmonize national and NATO defense planning efforts to provide the required forces and capabilities in the most efficient way. These planning efforts also reflect the fact that among the NATO members only the United States, France, and the UK aspire to develop the full range of military capabilities necessary to maintain a global military footprint. ", "In light of this reality, NATO and U.S. leaders have promoted defense cooperation initiatives, including the pooling and sharing of national resources and joint acquisition of shared capabilities, aimed at stretching existing defense resources further. Analysts argue that the European defense industry remains fractured and compartmentalized along national lines; many believe that European defense efforts would benefit from a more cooperative consolidation of defense-industrial production and procurement as well as more transatlantic defense industrial cooperation. Progress on these fronts have been limited, however, with critics charging that national governments often remain more committed to protecting domestic constituencies than making substantive progress in joint capabilities development. ", "Shifting strategic priorities present an additional challenge to long-term defense planning. In the two decades following the end of the Cold War, NATO defense planners promoted military modernization plans aimed at moving away from the large, heavily armored forces that were required for Cold War territorial defense to smaller, more agile forces that could be deployed across the globe. Some allies eliminated capabilities such as tanks (the Netherlands) and submarines (Denmark) that were thought to be outdated and unnecessary. Renewed concerns about Russian aggression have caused some analysts and policymakers to question those decisions, and have prompted reevaluations of capabilities targets in many European countries. "], "subsections": []}, {"section_title": "Contributions to NATO Missions", "paragraphs": ["Allied contributions to NATO operations are another key factor often considered when assessing burdensharing dynamics in the alliance. Since the end of the Cold War, NATO allies and partner countries have contributed to a range of NATO-led military operations across the globe, including in the Western Balkans, Afghanistan, the Mediterranean Sea, the Middle East, and Eastern Europe. Many in Europe and Canada view their contributions to NATO operations in Afghanistan as an unparalleled demonstration of solidarity with the United States and a testament to the value they can provide in achieving shared security objectives. Some analysts also point out that to meet the costs of maintaining continuous deployments to Afghanistan, many member states delayed needed defense modernization efforts. Ongoing contributions often cited by European allies include the following: ", "Afghanistan . More than 100,000 troops from Canada and European NATO members have served in the country since 2001, when U.S.-led military operations commenced. At the height of NATO-led operations in the country, over 40,000 non-U.S. allies and partner country personnel were deployed to the mission. As of March 2019, Canada and the European allies had suffered approximately 1,050 of the 3,561 of coalition fatalities suffered in Afghanistan. Since 2007, non-U.S. allies and NATO partners have committed more than $2.6 billion to the Afghan National Army Trust Fund. As of February 2019, approximately 8,500 of the 17,000 troops deployed to NATO's follow-on train-and-assist mission in Afghanistan are from European NATO member states or NATO partner countries (including 1,300 from Germany, 1,100 from the UK, and 895 from Italy). NATO deterrence and collective defense efforts . Since 2014, European allies and Canada have contributed forces and capabilities to bolster deterrence and collective defense initiatives. This includes leading three of the four battlegroups of NATO's Enhanced Forward Presence in Poland and the Baltic States, commanding NATO's Baltic Air Policing Mission, contributing to NATO's standing naval forces in the Baltic and Black Seas, AWACS patrols over Eastern Europe, command of the NATO Response Force and Very High Readiness Joint Task Force, and hosting new NATO command and control facilities in Central and Eastern Europe. Kosovo . Since 1999, tens of thousands of non-U.S. allies have contributed to NATO's Kosovo Force (KFOR) to maintain security and stability in Kosovo. As of February 2019, non-U.S. allies and NATO partner countries contributed about 3,000 of the 3,500 KFOR troops.", "NATO operations also have exposed significant disparities in allied military capabilities, especially between the United States and the other allies. In most, if not all, NATO military interventions, European allies and Canada have depended on the United States to provide key capabilities such as air- and sea-lift, refueling, and ISR. In some cases, the United States has filled more basic shortfalls, in munitions for example. ", "NATO's 2011 military intervention in Libya, Operation Unified Protector (OUP), highlighted these shortfalls. Although OUP was the first NATO mission in which the United States did not lead military operations, the six allies carrying out NATO airstrikes\u2014Belgium, Canada, Denmark, France, Norway, and the UK\u2014faced munition and other shortfalls relatively early on. Then-Secretary of Defense Robert Gates encapsulated U.S. frustration when he stated, \"the mightiest military alliance in history is only 11 weeks into an operation against a poorly armed regime in a sparsely populated country \u2013 yet many allies are beginning to run short of munitions, requiring the U.S., once more, to make up the difference.\" "], "subsections": []}]}, {"section_title": "Managing Relations with Russia", "paragraphs": ["Russia's annexation of Crimea and subsequent invasion of Eastern Ukraine in 2014 prompted a sweeping reassessment of NATO's post-Cold War efforts to build a cooperative relationship with Moscow. In the words of then-NATO Deputy Secretary General Alexander Vershbow, \"For 20 years, the security of the Euro-Atlantic region has been based on the premise that we do not face an adversary to our east. That premise is now in doubt.\" Since 2014, Russia also has increased its military activities in northern Europe, particularly through reportedly deploying nuclear-capable missiles to Kaliningrad, enhancing its air patrolling activities close to allied airspace, and increasing its naval presence in the Baltic Sea, the Arctic Ocean, and the North Sea. ", "In response to Russian aggression in Ukraine, NATO has moved to implement what its leadership characterized as the greatest reinforcement of NATO's collective defense since the end of the Cold War. Although the allies have continued to support and contribute to NATO deterrence initiatives, some express concern about the effectiveness and sustainability of these efforts. Many analysts, including the authors of a February 2016 report by the RAND Corporation, contend that \"as presently postured, NATO cannot successfully defend the territory of its most exposed members.\" Some allies, including Poland and the Baltic States, have urged a more robust allied military presence in the region to \"make it plain that crossing NATO's borders is not an option.\" ", "Others, including leaders in Western European countries like Germany and Italy, have stressed the importance of a dual-track approach to Russia that complements deterrence with dialogue. For these allies, efforts to rebuild cooperative relations with Moscow may be given as much attention as efforts to deter Russia. Accordingly, NATO continues to resist calls to permanently deploy troops in countries that joined after the collapse of the Soviet Union due to concerns in these member states that this would violate the terms of the 1997 NATO-Russia Founding Act; NATO's Enhanced Forward Presence has been referred to as \"continuous,\" but rotational. Former German Foreign Minister (and current German President) Frank-Walter Steinmeier encapsulated concerns about NATO's deterrence posture in 2016 when he likened a military exercise of NATO member states and partner countries taking place in Poland to \"saber-rattling and war cries.\" He added, \"whoever believes that a symbolic tank parade on the alliance's eastern border will bring security, is mistaken.\" NATO and U.S. officials subsequently rebutted Steinmeier's comments. ", "Discussions over NATO's strategic posture could continue to be marked by these divergent views over the threat posed by Russia and by debate over the appropriate role for NATO in addressing the wide-ranging security challenges emanating from the Middle East and North Africa (MENA). On threats from the MENA region, several allies are reluctant to endorse a bigger role for NATO in issues\u2014such as terrorism and migration\u2014on which the European Union (EU) has traditionally taken the lead. Furthermore, many analysts contend that significant budgetary and political constraints facing many allied governments could limit NATO's capacity to deter Russia while addressing security threats to NATO's south."], "subsections": []}, {"section_title": "U.S. Policy: Shifting U.S. Priorities and the Benefits and Costs of NATO Membership", "paragraphs": ["Since NATO's founding, successive U.S. Administrations have viewed U.S. membership in, and leadership of, NATO as a key pillar of U.S. national security strategy. As outlined above, throughout NATO's evolution, U.S. leadership has given the United States a strong voice in formulating strategic objectives for NATO that align with U.S. national security objectives. U.S. military objectives in Europe also have shifted over time, especially since the end of the Cold War. Today, about 74,000 U.S. military service members, including two Brigade Combat Teams (BCTs), are stationed in Europe, compared to more than 400,000 troops at the height of the Cold War. ", "Throughout the 1990s and 2000s, United States European Command (EUCOM) shifted its activities in Europe to non-warfighting missions, including building defense capacity and capability in former Warsaw Pact states and logistically supporting other U.S. combatant commands. Events in recent years, particularly Russia's actions in Ukraine since 2014 and increased military activities near NATO borders, have tested the strategic assumptions underpinning EUCOM's posture.", "While President Trump has criticized NATO, his Administration's National Security Strategy and National Defense Strategy both identify European security and stability as key U.S. national security interests and emphasize the U.S. commitment to NATO and Article 5. Administration officials and many Members of Congress underscore that the Administration has requested significant increases in funding for U.S. military deployments in Europe under the European Deterrence Initiative (EDI, previously known as the European Reassurance Initiative, or ERI). ", "Proponents of NATO argue that U.S. membership in and leadership of NATO brings a range of important benefits to the United States. These include, but are not limited to, the following:", "Peace, stability, conflict prevention, and deterrence . Many analysts believe that NATO has played a vital role in keeping the peace in Europe for the last 70 years and preventing a repeat of the two World Wars of the first half of the 20 th century. NATO proponents add that a divided NATO with a less committed United States could benefit Russia's widely acknowledged efforts to undermine NATO and the EU. Treaty-based defense and security support from 28 allies, including many of t he world's most advanced militaries , including a nuclear deterrent and missile defense systems based in Europe. Despite the criticisms of European defense spending trends, non-U.S. allies still possess significant military capabilities, which they have deployed in support of U.S. security objectives. An u nrivaled platform for constructing and operating international military coalitions. Through its history, NATO has developed an integrated command structure to carry out collective defense and crisis management operations that is unprecedented in terms of size, scale, and complexity. This includes advancing allied interoperability by designing command and control systems, holding multinational training exercises, and creating policies for standardizing equipment amongst its members. U.S. military bases in strategically important locations. U.S. leadership of NATO has allowed the United States to station U.S. forces in Europe at bases that enable quicker air, sea, and land access to other locations of strategic importance, including the Middle East and Africa. Economic stability. The EU, which includes 22 NATO allies, is the United States' largest trade and investment partner. By promoting security and stability in Europe, NATO helps protect this extensive economic relationship that accounts for 46% of global GDP.", "Nevertheless, questions about the value of NATO to the United States have led some to reassess the benefits and costs of U.S. membership. Critics of NATO highlight a number of costs incurred by the United States\u2014both qualitative and quantitative\u2014due to its leadership of NATO. These include the following:", "Loss of autonomy. Whether at the strategic or the operational level, forging agreement with 28 other governments is undoubtedly more difficult than maintaining full national control. Analysts note, for example, that U.S. military planners' negative experience working with European counterparts during the NATO intervention in Kosovo in 1999 (European allies' reportedly rejected bombing targets proposed by U.S. commanders) was a key factor behind the U.S. decision to conduct initial military operations in Afghanistan outside the NATO command structure. Some have argued that ad hoc coalitions of like-minded allies under unified U.S. command could be more desirable than working within established NATO structures. Heightened risks to U.S. forces. Some critics argue that the Article 5 commitment to defend a NATO ally in the event of an attack could draw the United States into a conflict that it might otherwise avoid. Others note that Article 5 commits an ally to respond to an attack by \"taking such action as it deems necessary.\" Continued European dependence. Some critics contend that European allies' dependence on the U.S. security guarantee limits their incentive to invest in defense capabilities that would make them more capable partners for the United States. At the same time, President Trump's criticisms of NATO and individual allies have caused some in Europe to question the United States' continued reliance as a security partner. Provoking Russia . Some critics of NATO argue that NATO's post-Cold War enlargement to include former members of the Warsaw Pact and the Baltic states represented an unnecessary and counter-productive provocation of Russia and ensured long-term rivalry between Russia and \"the West.\" A negative b udgetary impact. U.S membership in NATO carries with it certain financial commitments, including annual contributions to NATO's Common Fund (about $570 million in 2018). The U.S. missile defense capability in Europe is also under NATO command, and the United States contributes an estimated $800 million annually to additional NATO capabilities such as Allied Ground Surveillance and strategic airlift. ", "Although the United States could potentially reduce its military footprint in Europe, analysts point out that without a reduction in overall U.S. force structure, the Department of Defense would still cover the costs of redeployed personnel. Additionally, as noted above, U.S. military bases in Europe offer strategic and logistical advantages beyond enabling U.S. commitments to NATO. "], "subsections": [{"section_title": "Considerations for Congress", "paragraphs": ["Congress was instrumental in creating NATO in 1949 and has played a critical role in shaping U.S. policy toward the alliance ever since. While many Members of Congress have criticized specific developments within NATO\u2014regarding burdensharing, for example\u2014Congress as a whole has consistently demonstrated strong bipartisan support for active U.S. leadership of and support for NATO. This support has manifested itself through an array of congressional action including financial support through the authorization and appropriations processes and legislation enabling NATO enlargement and NATO military operations and deterrence efforts. Congress also has been at the forefront of the burdensharing debate within NATO since the alliance's inception and has often called on U.S. Administrations to do more to secure increased allied commitments to NATO. ", "Congressional support for NATO has traditionally served to buttress broader U.S. policy toward the alliance. During the Trump Administration, however, demonstrations of congressional support for NATO have at times been viewed more as an effort to reassure allies about the U.S. commitment to NATO after President Trump's criticisms of the alliance. Trump Administration officials stress that the Administration remains strongly committed to NATO and to European security (as articulated in the National Security and Defense strategies), and Congress has supported the Administration's requests to increase funding for key U.S. defense activities in Europe such as the European Deterrence Initiative. ", "Nevertheless, during the Trump Administration both chambers of Congress have passed legislation expressly reaffirming U.S. support for NATO at times when some allies have questioned the President's commitment. This includes legislation passed by the House in January 2019 ( H.R. 676 , see below) seeking to limit the president's ability to unilaterally withdraw from NATO; similar legislation has been introduced in the Senate (S.J.Res. 4). Some analysts portrayed House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell's joint invitation to NATO Secretary General Jens Stoltenberg to address a joint session of Congress on April 3, 2019, in commemoration of NATO's 70 th anniversary as an additional demonstration of NATO's importance to the Congress. Examples of legislation in support of NATO passed in Congress since 2017 include the following: ", "H.Res. 397 (115 th Congress) , Solemnly reaffirming the commitment of the United States to NATO's principle of collective defense as enumerated in Article 5 of the North Atlantic Treaty. Passed by the House by a vote of 423-4 on June 27, 2017. H.R. 5515 / P.L. 115-232 (115 th Congress) , John S. McCain National Defense Authorization Act for FY2019 . After the Senate agreed to go to conference with the House on H.R. 5515 , Senator Reed (RI) made a motion to instruct conferees to reaffirm the commitment of the United States to NATO. The Senate agreed to the motion by a vote of 97-2. H.Res. 256 (115 th Congress) , Expressing support for NATO and the countries of Central and Eastern Europe. Passed by the House by unanimous consent on July 11, 2018. H.R. 676 (116 th Congress) , NATO Support Act . Passed by the House by a vote of 357-22 on January 22, 2019. The bill prohibits the appropriation or use of funds to withdraw the United States from NATO.", "Although Congress has expressed consistent bipartisan support for NATO and its cornerstone Article 5 mutual defense commitment, congressional hearings on NATO in the 115 th and 116 th Congresses have reflected disagreement on the impact President Trump is having on the alliance. Some in Congress argue that President Trump's criticism of allied defense spending levels has spurred recent defense spending increases by NATO members that were not forthcoming under prior Administrations despite long-standing U.S. concern. They point out that NATO Secretary General Jens Stoltenberg has acknowledged that President Trump \"is having an impact\" in securing $41 billion of additional defense spending by European allies and Canada since 2016. ", "Others in Congress counter that President Trump's admonition of U.S. allies and his questioning of NATO's utility has damaged essential relationships and undermined NATO's credibility and cohesion. They contend that doubts about the U.S. commitment to NATO could embolden adversaries, including Russia, and ultimately weaken the commitment of other allies to the alliance. Some analysts argue that European allies who feel belittled by the U.S. president might be less likely to support future NATO operations advocated by the United States. Critics also tend to downplay President Trump's role in securing recent defense spending increases by NATO allies. They argue that Russian aggression in Europe has been a greater factor behind rising defense budgets, particularly in Central and Eastern Europe. ", "Despite disagreement over President Trump's impact on the alliance, most Members of Congress continue to express support for robust U.S. leadership of NATO, in particular to address potential threats posed by Russia. Many Members have called for enhanced NATO and U.S. military responses to Russian aggression in Ukraine and others have advocated stronger European contributions to collective defense measures in Europe. Congressional consideration of EDI could enable further examination of U.S. force posture in Europe and the U.S. capacity and willingness to uphold its collective defense commitments. Deliberations could also highlight longer-standing concerns about European contributions to NATO security and defense measures. ", "In light of these considerations, Members of Congress could focus on several key questions regarding NATO's future. These might include the following: ", "addressing the strategic value of NATO to the United States and the leadership role of the United States within NATO; examining whether the alliance should adopt a new strategic concept that better reflects views of the security threat posed by Russia and new and emerging threats in the cyber and hybrid warfare domains (NATO's current strategic concept was adopted in 2010); examining NATO's capacity and willingness to address other security threats to the Euro-Atlantic region, including from the Middle East and North Africa, posed by challenges such as terrorism and migration; examining the possible consequences of member states' failure to meet agreed defense spending targets; assessing U.S. force posture in Europe and the willingness of European allies to contribute to NATO deterrence efforts and U.S. defense initiatives in Europe such as the ballistic missile defense program and EDI; revisiting the allies' commitment to NATO's stated \"open door\" policy on enlargement, especially with respect to the membership aspirations of Georgia and Ukraine; and developing a NATO strategy toward China, particularly given U.S. and other allies' concerns about the security ramifications of increased Chinese investment in Europe. "], "subsections": [{"section_title": "Appendix. Additional Defense Spending Information", "paragraphs": [], "subsections": []}]}]}]}}
{"id": "R45295", "title": "Financial Services and General Government (FSGG) FY2019 Appropriations: Overview", "released_date": "2019-05-07T00:00:00", "summary": ["The Financial Services and General Government (FSGG) appropriations bill includes funding for the Department of the Treasury, the Executive Office of the President (EOP), the judiciary, the District of Columbia, and more than two dozen independent agencies. The House and Senate FSGG bills fund the same agencies, with one exception. The Commodity Futures Trading Commission (CFTC) is usually funded through the Agriculture appropriations bill in the House and the FSGG bill in the Senate.", "President Trump submitted his FY2019 budget request on February 12, 2018. The request included a total of $49.1 billion for agencies funded through the FSGG appropriations bill, including $282 million for the CFTC. The $49.1 billion figure includes $3 billion for a legislative provision on government-wide transfers (Section 737).", "The 115th Congress House and Senate Committees on Appropriations reported FSGG appropriations bills (H.R. 6258, H.Rept. 115-792 and S. 3107, S.Rept. 115-281) and both houses passed different versions of a broader bill (H.R. 6147) that would have provided FY2019 appropriations. The House-passed H.R. 6147 would have provided a combined total of $45.9 billion for the FSGG agencies, while the Senate-passed H.R. 6147 would have provided $45.7 billion. In both cases, the largest differences compared to the President's request were in the funding for the General Services Administration (GSA), the funding for the Executive Office of the President, and the absence of the Section 737 provision on government-wide transfers in both bills. No full-year FY2019 FSGG bill was enacted prior to the end of FY2018. The FSGG agencies were provided continuing appropriations until December 7, 2018, in P.L. 115-245 and until December 21, 2018, in P.L. 115-298. No final bill was enacted, and funding for FSGG agencies, along with much of the rest of the government, lapsed on December 22, 2018. No further appropriations occurred prior to the 116th Congress.", "In the 116th Congress, the House of Representatives passed H.R. 21, which contained six full FY2019 appropriations bills, including FSGG provisions nearly identical to those passed by the Senate in the 115th Congress on January 3, 2019. On January 23, 2019, the House passed H.R. 648, also containing six appropriations bills, which was reportedly based on a potential conference report from the 115th Congress and would have provided $46.0 billion for FSGG appropriations. (Neither of these bills provided full-year funding for the Department of Homeland Security.) The Senate did not act on either of these bills.", "On February 14, 2019, both the House and the Senate passed a conference report (H.Rept. 116-9) for H.J.Res. 31, containing seven appropriations bills providing full FY2019 funding for the government's operations that had not been previously funded, including FSGG provisions nearly identical to H.R. 648. The President signed the resolution on February 15, 2019, enacting it into law as P.L. 116-6. The law provides $45.7 billion in the FSGG appropriations portion (Division D), which includes the funding for the CFTC. This is $3.4 billion less than the President's request, with the bulk of this due to the absence of the Section 737 transfer authority in P.L. 116-6. Other notable differences include the funding for GSA and the Executive Office of the President.", "Although financial services are a major focus of the FSGG appropriations bills, these bills do not include funding for many financial regulatory agencies, which are funded outside of the appropriations process. The FSGG bills have, however, often contained additional legislative provisions relating to such agencies, as is the case with H.R. 6258/H.R. 6147 in the 115th Congress, whose Title IX contained language from a number of different bills relating to financial regulation. P.L. 116-6 did not contain this language."], "reports": {"section_title": "", "paragraphs": ["T he Financial Services and General Government (FSGG) appropriations bill includes funding for the Department of the Treasury (Title I), the Executive Office of the President (EOP; Title II), the judiciary (Title III), the District of Columbia (Title IV), and more than two dozen independent agencies (Title V). The bill typically funds mandatory retirement accounts in Title VI, which also contains additional general provisions applying to the funding provided to agencies through the FSGG bill. Title VII typically contains general provisions applying government-wide. The FSGG bill has also often contained provisions relating to the U.S. policy toward Cuba.", "The House and Senate FSGG bills fund the same agencies, with one exception. The Commodity Futures Trading Commission (CFTC) is funded through the Agriculture appropriations bill in the House and the FSGG bill in the Senate. Where the CFTC is funded upon enactment depends on which chamber originated the law, which typically alternates annually. Thus, the enacted amounts for the CFTC typically are in the Agriculture appropriations bill one year and FSGG the following year. ", "This structure has existed in its current form since the 2007 reorganization of the House and Senate Committees on Appropriations. Although financial services are a major focus of the bill, the FSGG appropriations bill does not include funding for many financial regulatory agencies, which are instead funded outside of the appropriations process. It is not uncommon for legislative provisions addressing various financial regulatory issues to be included in titles at the end of the bill."], "subsections": [{"section_title": "Administration and Congressional Action", "paragraphs": [], "subsections": [{"section_title": "115th Congress", "paragraphs": ["President Trump submitted his FY2019 budget request on February 12, 2018. The request included a total of $49.1 billion for agencies funded through the FSGG appropriations bill, including $282 million for the CFTC. This total included a proposed legislative provision on government-wide transfer authority in Section 737, which was estimated at $3 billion by the appropriations committees.", "The House Committee on Appropriations reported a Financial Services and General Government Appropriations Act, 2019 ( H.R. 6258 , H.Rept. 115-792 ) on June 15, 2018. Total FY2019 funding in the reported bill would have beeen $45.7 billion, with another $255 million for the CFTC included in the Agriculture appropriations bill ( H.R. 5961 , H.Rept. 115-706 ). The combined total of $45.9 billion would have been about $3.2 billion below the President's FY2019 request, with the largest differences in the funding for the General Services Administration (GSA) and in language relating to government-wide transfers that was requested by the President but not included in the legislation (Section 737). ", "H.R. 6258 was included as Division B of H.R. 6147 , the Interior appropriations bill, when it was considered by the House of Representatives beginning on July 17, 2018. The bill was amended numerous times, shifting funding among FSGG agencies but not changing the FSGG totals. H.R. 6147 passed the House on July 19, 2018.", "The Senate Committee on Appropriations reported a Financial Services and General Government Appropriations Act, 2019 ( S. 3107 , S.Rept. 115-281 ) on June 28, 2018. Funding in S. 3107 totaled $45.9 billion, about $3.2 billion below the President's FY2019 request, with the largest differences in the funding for the GSA and in the government-wide transfers requested language (Section 737).", "The Senate began floor consideration of H.R. 6147 on July 24, 2018, including the text of S. 3107 as Division B of the amendment in the nature of a substitute ( S.Amdt. 3399 ). The amendment also included three other appropriations bills. The amended version of H.R. 6147 was passed by the Senate on August 1, 2018.", "The conference committee on H.R. 6147 convened on September 13, 2018. No conference report was reported, however, prior to the end of the fiscal year. Instead, Division C of P.L. 115-245 , enacted on September 28, 2018, generally provided for continuing appropriations at FY2018 levels for the FSGG agencies through December 7, 2018. A further continuing resolution ( P.L. 115-298 ) was passed providing funding through December 21, 2018. No additional appropriations were passed in the 115 th Congress, leading to a funding lapse for the FSGG agencies as well as those funded in six other appropriations bills beginning on December 22, 2018."], "subsections": []}, {"section_title": "116th Congress", "paragraphs": ["The House of Representatives passed two consolidated appropriations bills in January 2019. H.R. 21 \u2014which contained six full FY2019 appropriations bills, including FSGG provisions nearly identical to those passed by the Senate in the 115 th Congress\u2014passed on January 3, 2019. H.R. 21 would have provided a total of $45.9 billion for the FSGG agencies, with the CFTC funding included with FSGG funding in Division B, following the Senate structure. On January 23, 2019, the House passed H.R. 648 , also containing the same six full FY2019 appropriations bills, which was reportedly based on a potential conference report from the 115 th Congress. H.R. 648 would have provided $46.0 billion for the FSGG agencies, with the FSGG portion\u2014including CFTC funding\u2014in Division C. Neither of these bills included the financial regulatory provisions in Title IX of the House-passed bill in the 115 th Congress. The Senate did not act on either of these bills. ", "On February 14, 2019, the House and the Senate agreed to a conference report ( H.Rept. 116-9 ) on H.J.Res 31 , the Consolidated Appropriations Act, 2019, containing seven appropriations bills. This act provides full FY2019 funding for the government's operations that had not been previously funded, including FSGG provisions nearly identical to H.R. 648 , but located in Division D. The primary substantive differences were in the Department of the Treasury Forfeiture Fund and in funding for GSA. The President signed the resolution on February 15, 2019, enacting it into law as P.L. 116-6 .", "P.L. 116-6 included $45.7 billion in FSGG funding, including the CFTC. It did not include the Title IX financial regulatory provisions passed by the House in the 115 th Congress. The final total was approximately $3.4 billion less than the President's request, with most of the difference coming from the Section 737 transfer authority, which was not included by Congress. Other notable differences included the funding for the GSA and the Executive Office of the President.", " Table 1 below reflects the status of FSGG appropriations measures at key points in the appropriations process across the 115 th and 116 th Congresses. Table 2 lists the broad amounts requested by the President and included in the various FSGG bills, largely by title, and Table 3 details the amounts for the independent agencies. Specific columns in Table 2 and Table 3 are FSGG agencies' enacted amounts for FY2018, the President's FY2019 request, the FY2019 amounts from the 115 th Congress bills ( H.R. 6147 as passed by the House and H.R. 6147 as passed by the Senate), the FY2019 amounts from the 116 th Congress House-passed bills ( H.R. 21 and H.R. 648 ), and the final FY2019 enacted amounts from P.L. 116-6 ."], "subsections": []}]}, {"section_title": "Financial Regulatory Agencies and FSGG Appropriations", "paragraphs": ["Although financial services are a focus of the FSGG bill, the bill does not actually include funding for the regulation of much of the financial services industry. Financial services as an industry is often subdivided into banking, insurance, and securities. Federal regulation of the banking industry is divided among the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), the Office of Comptroller of the Currency (OCC), and the Bureau of Consumer Financial Protection (generally known as the Consumer Financial Protection Bureau, or CFPB). In addition, credit unions, which operate similarly to many banks, are regulated by the National Credit Union Administration (NCUA). None of these agencies receives its primary funding through the appropriations process, with only the FDIC inspector general and a small NCUA-operated program currently funded in the FSGG bill. ", "Insurance is generally regulated at the state level, with some Federal Reserve oversight at the holding company level. There is a relatively small Federal Insurance Office (FIO) inside the Treasury, which is funded through the Departmental Offices account, but FIO has no regulatory authority.", "Federal securities regulation is divided between the Securities and Exchange Commission (SEC) and the CFTC, both of which are funded through appropriations. The CFTC funding is a relatively straightforward appropriation from the general fund, whereas the SEC funding is provided by the FSGG bill, but then offset through fees collected by the SEC. ", "Although funding for many financial regulatory agencies may not be provided by the FSGG bill, legislative provisions affecting financial regulation in general and some of these agencies specifically have often been included in FSGG bills. In the 115 th Congress, H.R. 6258 and H.R. 6147 as passed by the House included many provisions, particularly in Title IX, that would have amended the 2010 Dodd-Frank Act and other statutes relating to the regulation of financial institutions and the authority and funding of financial regulators. Many of these provisions were included in other legislation, notably H.R. 10 , which passed the House on June 8, 2017, and S. 488 as amended by the House, which passed the House on July 17, 2018, though neither of these bills were enacted in the 115 th Congress. Of particular interest from the appropriations perspective, H.R. 6258 and H.R. 6147 as passed by the House would have brought the CFPB under the FSGG bill instead of receiving funding from outside of the appropriations process, as is currently the case. S. 3107 and H.R. 6147 as passed by the Senate did not include similar provisions affecting the CFPB or other aspects of financial regulation as in Title IX of the House bills.", "In the 116 th Congress, the bills passed by the House ( H.R. 21 and H.R. 648 ) did not include financial regulatory provisions similar to those in the 115 th Congress House-passed bill, and neither did the enacted P.L. 116-6 ."], "subsections": []}, {"section_title": "Committee Structure and Scope", "paragraphs": ["The House and Senate Committees on Appropriations reorganized their subcommittee structures in early 2007. Each chamber created a new Financial Services and General Government Subcommittee. In the House, the FSGG Subcommittee's jurisdiction is primarily composed of agencies that had been under the jurisdiction of the Subcommittee on Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies, commonly referred to as TTHUD. In addition, the House FSGG Subcommittee was assigned four independent agencies that had been under the jurisdiction of the Science, State, Justice, Commerce, and Related Agencies Subcommittee: the Federal Communications Commission (FCC), the Federal Trade Commission (FTC), the SEC, and the Small Business Administration (SBA).", "In the Senate, the new FSGG Subcommittee's jurisdiction is a combination of agencies from the jurisdiction of three previously existing subcommittees. Most of the agencies that had been under the jurisdiction of the Transportation, Treasury, the Judiciary, and Housing and Urban Development, and Related Agencies Subcommittee were assigned to the FSGG subcommittee. In addition, the District of Columbia, which had its own subcommittee in the 109 th Congress, was placed under the purview of the FSGG Subcommittee, as were four independent agencies that had been under the jurisdiction of the Commerce, Justice, Science, and Related Agencies Subcommittee: the FCC, FTC, SEC, and SBA. As a result of this reorganization, the House and Senate FSGG Subcommittees have nearly identical jurisdictions, except that the CFTC is under the jurisdiction of the FSGG Subcommittee in the Senate and the Agriculture Subcommittee in the House."], "subsections": []}, {"section_title": "CRS FSGG Appropriations Experts", "paragraphs": [" Table 4 below lists various departments and agencies funded through FSGG appropriations and the CRS experts' names pertaining to these departments and agencies."], "subsections": []}]}}
{"id": "R45577", "title": "Strategic Petroleum Reserve: Mandated Sales and Reform", "released_date": "2019-04-16T00:00:00", "summary": ["The Strategic Petroleum Reserve (SPR), administered by the Department of Energy (DOE), has played a role in U.S. energy policy for over 40 years. Over that time, its primary focus has changed from its original intent as world oil market conditions have changed. Originally intended to offset the market power of cartels and prevent economic damage from oil supply disruption, it has become primarily a tool for combatting the fuel market effects of domestic natural disasters like hurricanes. Most recently, U.S. net imports of oil and petroleum products have decreased as a result of the increase in domestic oil production. Because of lower reliance on imports, some stakeholders see less need for an oil stockpile, and view the SPR more as a mechanism for providing funding for a wide variety of legislative purposes, ranging from health care, to highways, and general purpose revenues. Over this period, the SPR has expanded its potential usefulness to cover all of these purposes.", "As a member of the International Energy Agency (IEA) and a participant in the International Energy Program established by the IEA, the United States, as are all net-importer nations in the IEA, is required to hold the equivalent of 90 days of its net imports of oil and petroleum products as a reserve stock. As a result of relatively stable U.S. oil consumption and rapidly increasing production, and declining net imports, available oil stocks held in the SPR now are almost double the 90-day requirement.", "While the SPR has recently seen relatively little use in combatting oil supply disruptions caused by political and military instability, or even natural disasters, it has provided a source of funding for a variety of legislative initiatives. These mandated sales from the SPR have committed almost 260 million barrels of oil for sale by FY2027, leaving less than 400 million barrels of uncommitted oil reserves. Determining whether further reductions can be made from the reserve while maintaining its ability to carry out its designed purpose is a key energy policy question. The extreme variant of this question is whether a reserve is required at all, or whether privately held stocks, as practiced by most European countries, are adequate to meet international commitments.", "Legislation in the 115th Congress, H.R. 6511, sought to maintain the SPR facility and infrastructure, while reducing operating and maintenance costs, by renting unused storage capacity in the reserve to private companies and foreign nations. As of this writing, no bills have been introduced in the 116th Congress modifying the SPR."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Strategic Petroleum Reserve (SPR), administered by the Department of Energy (DOE), has been a part of U.S. oil security policy for over 40 years. Originally intended as a reserve to replace oil that might be withdrawn from the world market to forward political purposes and objectives, its rationale has evolved with the changing world oil market and the role of the United States in the market. In addition to replacing oil lost to political turmoil, as in Libya in 2011, in recent years it has been more commonly used to replace oil supplies curtailed due to natural disasters, mainly hurricanes. The effects of hurricanes, especially those of the magnitude of Katrina, Rita, and others, has threatened to disrupt oil production, refining, and distribution, creating potential economic dislocation. Use of oil from the SPR has helped to minimize the economic effect of those events. ", "Since 2010, the oil market in the United States has been transformed. Low growth in petroleum product demand, rapidly increasing domestic oil production, and falling net imports of crude oil and petroleum products have reduced U.S. dependence on foreign oil suppliers. At the same time, export sources on the world market have expanded, reducing the ability of any one exporter, or group of exporters, to manipulate the market.", "As the U.S. oil position in the world oil market has strengthened, some have questioned whether the SPR should be either downsized to reflect current supply and demand balances, or even eliminated entirely. Since 2015, Congress has passed legislation which mandates the sale of SPR oil to fund a variety of government activities. For some, a question exists as to how much oil might be withdrawn from the Reserve while still maintaining an adequate oil \"safety net.\" Others question whether the evolving world oil market requires the United States to maintain any government-owned reserve holdings. ", "Enacted legislation to date has mandated the sale of over 250 million barrels of oil from the SPR, a situation that brings up another policy issue. If there is less oil in the SPR, what might be done with the \"excess capacity\" inevitably created? The government may be able to reduce the operating costs of the SPR by leasing reserve capacity freed by mandated sales. ", "This report addresses the questions of mandated sales and \"right sizing\" the SPR, as well as strategies to make optimal use of the reduced need for oil storage capacity."], "subsections": []}, {"section_title": "A Brief History of the SPR", "paragraphs": ["The SPR was authorized by the Energy Policy and Conservation Act (EPCA, P.L. 94-163 ) of 1975. The intent was to establish a petroleum reserve of 1 billion barrels that could prevent the economic dislocation caused by the Organization of Arab Petroleum Exporting Countries (OAPEC) 1973/1974 embargo of oil sales to the United States and other countries. That event, in retaliation against the United States' support for Israel in the 1973 Arab-Israeli War, came at an important transition point in U.S. petroleum markets. U.S. production of crude oil had reached a then-peak in 1970 at about 9.4 million barrels per day (mm/d) and was considered likely to be in long-term decline. It was also believed that U.S. oil consumption would likely continue to increase. These supply and demand trends seemed to guarantee that U.S. oil dependence on the world oil market through increasing imports would continue to grow. ", "Although the original intent of EPCA was to create a reserve of 1 billion barrels of crude oil, the SPR only reached its original design capacity of 750 million barrels in 1991. Available storage capacity was reduced to the current 726.7 million barrels with the closure of the Weeks Island facility due to structural damage in 1996. The SPR was filled to near its maximum capacity at 726.6 million barrels on December 27, 2009. That total represents the largest amount of oil ever held in the SPR. In 2011, 30 million barrels of oil was sold from the reserve in conjunction with the loss of Libyan oil exports due to the political and military upheaval in that country. ", "Over its history, the SPR has expanded to include the Northeast Home Heating Oil Reserve (NEHHOR) as well as the 1-million-barrel Northeast Gasoline Supply Reserve (NGSR) located on the U.S. East Coast. The NEHHOR was created to support and stabilize the essentially regional demand for home heating oil in New England. The NGSR was set up in the wake of Hurricane Sandy in 2012. That hurricane caused disruption of gasoline supply deliveries due mainly to electric power disruption and flooding. ", "Gasoline is less amenable to long-term storage than crude oil. While crude oil may be stored with little observed deterioration for periods in excess of five years, the storage life of gasoline is shorter. Typical gasoline blended with 10% ethanol may have a shelf life in storage of approximately three months. The short shelf life of gasoline requires active supply management of the NGSR."], "subsections": []}, {"section_title": "International Energy Agency (IEA) Obligations", "paragraphs": ["The IEA was established in November 1974, with a broad mandate on energy security and energy policy coordination among member countries during energy-related emergencies. Strategic stock holdings are one of the policies included in the agency's International Energy Program (IEP). IEA member countries, including the United States, have committed to maintaining stocks of crude oil and petroleum products equivalent to 90 days of their previous year's net imports; developing programs for demand restraint in the event of emergencies; and agreeing to participate in an allocation of oil deliveries program to balance shortages among IEA member nations. For example, in 2011, the United States participated in a coordinated IEA oil stock drawdown in response to the withdrawal of Libyan oil exports from the market as a result of political and military turmoil in that country. ", "The SPR at its current holdings of 649.1 million barrels of crude oil satisfies the U.S. strategic stock holding requirement. Based on 2017 net import levels of 3.768 mmb/d, the SPR holds over 170 days of net imports of crude oil and petroleum products. Considered in another way, the net import level of 3.768 mmb/d, when multiplied by 90 days required stocks, implies a need for the United States to hold about 340 million barrels in the SPR. The difference between actual SPR holding and the implied holdings required to meet the IEA requirements has given rise to the viewpoint that U.S. reserve oil holdings are in excess of those needed and might be sold on the market. ", "At the full drawdown rate, the SPR can deliver 4.4 mmb/d of crude oil for 90 days, dropping to a rate of 3.8 mmb/d for an additional 30 days, and dropping further in drawdown rate for up to 180 days as stocks deplete. These drawdown rates are those likely to be associated with a total, or major, curtailment of potential imports from the world market, an unlikely scenario given the large portion of U.S. imports obtained from Canada, Mexico, and Venezuela, until recently.", "According to the IEA, only the United States, the Czech Republic, and New Zealand meet their stock requirements using solely government-owned emergency oil and petroleum product stocks. Other nations meet their stock requirements through holding private industry or agency stocks or portions in combination. It is also possible, under IEA rules, for a nation to hold its IEA required oil reserves outside its borders. This could create a demand for SPR unused capacity by nations that have a shortage of domestic oil storage facilities. ", "Total U.S. oil stocks, including both commercial and publicly held stocks, of both crude oil and petroleum products, are generally in excess of 1.9 billion barrels on a monthly basis, far in excess of IEA requirements. "], "subsections": []}, {"section_title": "Recent SPR Exchange/Sales Activity", "paragraphs": ["The most recent emergency release of SPR oil was in 2011 due to the Libyan export curtailment. At that time, the United States and other members of the IEA decided to release 60 million barrels of oil onto the world market. The U.S. obligation was set at 30 million barrels. In June 2011, competitive offers were solicited for the purchase of selling oil to be delivered by the end of August 2011.", "In addition to selling oil, the SPR can enter into exchange agreements. Exchange agreements, which are similar to loans, allow for delivery of oil from the SPR with return of the oil in kind, plus a premium, by a set future date. For example, in August and September 2017, following Hurricane Harvey, 5.2 million barrels of oil was delivered to Gulf Coast refineries to offset fuel shortages as a result damage and flooding. All of the original 5.2 million barrels plus the premium was returned by February 2018. ", "In 2014, a test sale was undertaken to evaluate SPR drawdown and sales procedure capabilities. Between March and May 2014, 4.62 million barrels was delivered by pipeline to successful bidders, and 0.38 million barrels was delivered via marine transportation."], "subsections": []}, {"section_title": "Mandated Sales", "paragraphs": ["Beginning in 2015, the debate over whether the SPR storage balance was too large given the evolving nature of U.S. oil production, consumption, and net imports resulted in Congress mandating the sale of SPR oil. The sales revenue accrued through SPR sales was allocated to a variety of uses; however, energy policy, or security, was not among them. ", "The legislation that mandated SPR oil sales includes the Bipartisan Budget Act of 2015 ( P.L. 114-74 ), the FAST Act of 2015 ( P.L. 114-94 ), the 21 st Century Cures Act of 2016 ( P.L. 114-255 ), the 2017 Tax Revision ( P.L. 115-97 ), the Bipartisan Budget Act of 2018 ( P.L. 115-123 ), and the Consolidated Appropriations Act, 2018. Broadly considered, this legislation requires oil to be sold from the reserve over the period FY2017 through FY2027.", " Table 1 presents mandated SPR sales data.", "The data in Table 1 show that while the 21 st Century Cures Act draws revenues from SPR sales during the three-year period 2017 through 2019, and the Balanced Budget Act of 2015 mandates SPR sales from 2018 through 2025, and the Consolidated Appropriations Act, 2018, mandates SPR sales in 2020 and 2021, the remaining legislation is oriented toward out-year sales, 2023 to 2027. This pattern of SPR sales might be important, because while it is likely that the favorable position of the United States with respect to oil production and imports will continue in the near-term, less certainty can be associated with a long-term perspective. Forecasting oil demand and supply is far from accurate, and when expected demand or supply respectively exceeds, or falls short of, expectations, the result is likely to be price volatility. Price volatility in the oil market can result in economic disruptions and slowdowns. ", "As per Section 510 of the 21 st Century Cures Act, the DOE offered 10 million barrels of SPR oil for sale in FY2017. A total of 9.89 million barrels of oil was delivered in FY2017, earning over $449 million, an average price of over $45 per barrel. DOE offered 9 million barrels of SPR oil sold in FY2018, earning approximately $522 million at an average price of over $58 per barrel. ", "The Balanced Budget Act of 2015, Section 404, authorizes the DOE to sell up to $2 billion of SPR crude oil for fiscal years 2017 through 2020. A total of 6.28 million barrels was sold in FY2017, earning $323.2 million. In FY2018, DOE offered 5 million barrels of SPR oil for sale, yielding approximately $290 million.", "The legislation that directs sales from the SPR is not time coordinated. Possible problems could result from uncoordinated sales exceeding an amount consistent with energy security. However, the cited legislation generally has built-in \"safety valve\" language that ensures that SPR sales do not cause the United States to violate its international commitments, or allow the SPR holdings to fall below a specified value. In the case of P.L. 115-123 this value is set at 350 million barrels. ", "Determining the optimal level of oil holdings in the SPR is likely to remain controversial. Analytical tools common in public policy analysis, such as cost-benefit analysis, dynamic programming, or other optimization techniques depend on determining the value of variables that are highly uncertain in this case. The responsiveness of the adjustment of oil quantities on both the demand and the supply sides of the market, the price volatility of oil, and the probabilities of different degrees of political/military disruption in the oil market are all uncertain. ", "The SPR might be thought of as an insurance policy where fixed payments are made over time to avoid the large negative costs associated with low-probability events. For example, if conflict in the Persian Gulf resulted in the Strait of Hormuz being closed for a period of time, large volumes of Persian Gulf oil would likely be withdrawn from the world market. The reality of reduced oil supply coupled with expectations and speculation on the futures markets would likely result in an increasing and volatile oil price. Significant price increases, coupled with supply shortages could result in significant disruption of consuming and importing nations' economies. Reduced economic growth, rising unemployment, and inflation are likely consequences.", "With respect to this example, an analysis of the appropriate size of the SPR might focus on values such as the risk tolerance of society with respect to bearing the consequences of an event of a given particular magnitude. Set against these values might be the cost of maintaining the SPR, which might be taken as an \"insurance premium.\" In this case, the optimal strategy might be to minimize the cost of insurance as well as the probability that the negative event might occur. However, complications might still arise in transforming the theoretical analysis into a consistent practical decision guide.", "Additional reform factors that could be considered, beyond the size of the SPR, might include the mix of crude oils held in reserve as well as the infrastructure available to deliver reserve crudes to the market. "], "subsections": []}, {"section_title": "SPR Facilities Reform", "paragraphs": ["A consequence of the fixed capacity of the SPR in conjunction with mandated sales from the reserve is the appearance of underutilized capacity. In the 115 th Congress, the House passed legislation to reform the SPR to include commercial leasing of storage capacity as well as leasing of capacity to foreign governments. H.R. 6511 would have authorized the Secretary of Energy to develop a leasing program and establish a pilot program for the leasing of storage and related facilities.", "The most important benefit of leasing excess SPR capacity is the receipt of fees to \"fully compensate the United States for all costs of storage, and removals of petroleum products (including the proportionate cost of replacement facilities necessitated as a result of withdrawals) incurred by the United States as a result of such lease.\" These fees can help offset the facilities operation and maintenance costs of the reserve, which were $233 million in FY2017.", "While leasing excess reserve capacity provides the United States the benefit of reducing the cost of the energy security insurance the reserve provides, potential problems might exist. Commercial clients' usage patterns may not match the physical capabilities of SPR facilities. The salt domes that contain SPR crude oil are suitable for long-term oil storage and they may be less suitable for short-term injections and withdrawals. Oil is drawn from the SPR storage caverns by injecting brine into the caverns and causing the contained oil to rise, and then exit, the facility. Frequent brine injection and withdrawal could result in accelerated structural deterioration of the caverns.", "Commercial oil companies are more likely to store oil for the short-term, rather than as a long-term security stock. Commercial stocks are typically part of a supply chain that holds stocks only until they can be shipped to refineries or other facilities for processing. In addition, emergency withdrawals of SPR oil may interfere with commercial withdrawals unless extraction and shipping infrastructure at the SPR is enhanced. ", "Leasing of excess SPR capacity to foreign governments for oil reserve storage is less likely to be associated with the short-term problems identified with commercial leasing. ", "In addition to the H.R. 6511 reform approach, some have called for partial, or total, elimination of the reserve. This approach usually cites the broader, more transparent nature of the world oil market compared to the 1970s, the large commercial stock holdings in the United States, or the existence of derivative market strategies available to firms, not available in the 1970s, which might be used to mitigate oil supply shocks. ", "Beyond partial or total liquidation of the reserve, analysts have developed other alternatives. Inventory monetization is a generally risk-free approach, generating revenues to cover expenses by monetizing a portion of the idle oil balances in the SPR. This approach uses options markets to generate revenues.", "For example, suppose the oil futures market was in backwardation, a condition whereby the price of oil today is higher than the price a year from now by $3 per barrel. The government could sell crude oil paper contracts at today's price and purchase an equivalent number of barrels of crude a year from now at the lower future price. If this strategy were undertaken with perhaps 100 million barrels of SPR oil, the net revenue would be $300 million minus expenses and fees, an amount well in excess of yearly SPR operations and maintenance costs. If, in the example, the relative prices over time were reversed, and the future price was higher than the current price the government would buy oil now and simultaneously sell oil in the future, again profiting by the amount of the spread between the two prices. These purchases and sales are all on paper, no oil is actually required to leave the reserve, and the transactions are taken at the same time, locking in a profit with essentially potentially very low risk. A drawback of this approach is that the volume of government purchases and sales might be large enough to influence the market prices, or interfere with private sector traders."], "subsections": []}, {"section_title": "Conclusion", "paragraphs": ["The SPR has met many challenges. First conceived as protection against the \"weaponization\" of oil in the 1970s, it later became a safeguard against the disruption caused by domestic natural disasters. Most recently the Reserve has served as a source of funding for a variety of programs and activities. In each case, while its range of application has expanded, it still maintained its ability to respond to its original requirements.", "Evolving oil market conditions have raised the question of whether the SPR can be further downsized, or even eliminated. Even if changing market conditions have made the reserve's rationale less compelling in the current environment than in the past, the SPR can provide a component of energy security policy as well as meeting other policy needs. "], "subsections": []}]}}
{"id": "R45583", "title": "Membership of the 116th Congress: A Profile", "released_date": "2019-03-07T00:00:00", "summary": ["This report presents a profile of the membership of the 116th Congress (2019-2020) as of March 7, 2019. Statistical information is included on selected characteristics of Members, including data on party affiliation, average age, occupation, education, length of congressional service, religious affiliation, gender, ethnicity, foreign birth, and military service.", "In the House of Representatives, there are 239 Democrats (including 4 Delegates), 199 Republicans (including 1 Delegate and the Resident Commissioner of Puerto Rico), and 3 vacant seats. The Senate has 53 Republicans, 45 Democrats, and 2 Independents, who both caucus with the Democrats. Additionally", "The average age of Members of the House at the beginning of the 116th Congress was 57.6 years; of Senators, 62.9 years. The overwhelming majority, 96%, of Members of Congress have a college education. The dominant professions of Members are public service/politics, business, and law. Most Members identify as Christians, and the collective majority of these affiliate with a Protestant denomination. Roman Catholics account for the largest single religious denomination, and numerous other affiliations are represented, including Jewish, Mormon, Buddhist, Muslim, Hindu, Greek Orthodox, Pentecostal Christian, Unitarian Universalist, and Adventist. The average length of service for Representatives at the beginning of the 116th Congress was 8.6 years (4.3 House terms); for Senators, 10.1 years (1.7 Senate terms). A record 131 women serve in the 116th Congress: 106 in the House, including 3 Delegates and the Resident Commissioner, and 25 in the Senate. There are 55 African American Members of the House and 3 in the Senate. This House number includes two Delegates. There are 50 Hispanic or Latino Members (a record number) serving: 45 in the House, including 2 Delegates and the Resident Commissioner, and 5 in the Senate. There are 20 Members (14 Representatives, 3 Delegates, and 3 Senators) who are Asian Americans, Indian Americans, or Pacific Islander Americans. This is also a record number. A record four American Indians (Native Americans) serve in the House.", "The portions of this report covering political party affiliation, gender, ethnicity, and vacant seats may be updated as events warrant. The remainder of the report will not be updated."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview and Total Members in History", "paragraphs": ["Congress is composed of 541 individuals from the 50 states, the District of Columbia, Guam, the U.S. Virgin Islands, American Samoa, the Northern Mariana Islands, and Puerto Rico. Since 1789, 12,343 individuals have served as either Representatives (11,037 individuals) or as Senators (1,983 individuals). Of these individuals, 677 have served in both chambers. An additional 178 individuals have served in the House in the roles of territorial Delegates or Resident Commissioners.", "The following is a profile of the 116 th Congress (2019-2020)."], "subsections": []}, {"section_title": "Party Breakdown", "paragraphs": ["In the 116 th Congress, the current party alignments as of March 7, 2019, are as follows:", "House of Representatives: 239 Democrats (including 4 Delegates), 199 Republicans (including 1 Delegate and the Resident Commissioner of Puerto Rico), and 3 vacant seats. Senate: 53 Republicans, 45 Democrats, and 2 Independents, who both caucus with the Democrats."], "subsections": []}, {"section_title": "Age", "paragraphs": ["The average age at the beginning of the 116 th Congress was 57.6 years for Representatives and 62.9 years for Senators.", " Table 1 shows the average ages at the beginning of the 116 th and three previous Congresses.", "The U.S. Constitution requires Representatives to be at least 25 years old when they take office. The youngest Representative in the 116 th Congress, and the youngest woman ever to serve in Congress, is Alexandria Ocasio-Cortez (D-NY), born October 13, 1989, who was 29 at the beginning of the 116 th Congress. The oldest Representative is Don Young (R-AK), born June 9, 1933, who was 85.", "Senators must be at least 30 years old when they take office. The youngest Senator in the 116 th Congress is Josh Hawley (R-MO), born December 31, 1979, who was 39 at the beginning of the Congress. The oldest Senator in the 116 th Congress is Dianne Feinstein (D-CA), born June 22, 1933, who was 85. "], "subsections": []}, {"section_title": "Occupations", "paragraphs": ["According to data on occupations in the CQ New Members Guide , in the 116 th Congress law ties with public service/politics as the most commonly declared profession of Senators, followed by business; for Representatives, public service/politics is first, closely followed by business, then law.", " Table 2 uses data from the CQ Member Profiles to present the occupational categories most frequently listed as prior careers of Members of the 116 th Congress.", "A closer look at the range of prior occupations and previously held public offices of Members of the House and Senate at the beginning of the 116 th Congress, as listed in their CQ Member Profiles , also shows the following:", "50 Senators with previous House service; 95 Members have worked in education, including teachers, professors, instructors, school fundraisers, counselors, administrators, or coaches (75 in the House, including 2 delegates, 20 in the Senate); 3 physicians in the Senate, 13 physicians in the House, plus 5 dentists and 3 veterinarians; 2 psychologists (all in the House), an optometrist (in the Senate), a pharmacist (in the House), and 2 nurses and 1 physician assistant (in the House); 7 ordained ministers, all in the House; 41 former mayors (34 in the House, 7 in the Senate); 13 former state governors (12 in the Senate, 1 in the House) and 7 lieutenant governors (4 in the Senate, 3 in the House); 16 former judges (all but 1 in the House) and 42 prosecutors (10 in the Senate, 32 in the House) who have served in city, county, state, federal, or military capacities; 2 former Cabinet Secretaries (1 in each chamber), and 3 Ambassadors (all in the House); 246 former state or territorial legislators (43 in the Senate, 203 in the House, including 2 Delegates and the Resident Commissioner from Puerto Rico); at least 89 former congressional staffers (19 in the Senate, 70 in the House, including 3 Delegates), as well as 6 congressional pages (3 in the House and 3 in the Senate); 3 sheriffs, 1 police chief and 3 other police officers, 1 firefighter, 3 CIA employees, and 1 FBI agent (all in the House); 3 Peace Corps volunteers, all in the House; 1 physicist and 1 chemist, both in the House; 11 engineers (10 in the House and 1 in the Senate); 20 public relations or communications professionals (4 in the Senate, 16 in the House), and 10 accountants (2 in the Senate and 8 in the House); 6 software company executives in the House and 2 in the Senate; 19 management consultants (5 in the Senate, 14 in the House), 5 car dealership owners (all in the House), and 4 venture capitalists (2 in the House, 2 in the Senate); 12 bankers or bank executives (3 in the Senate, 9 in the House), 29 veterans of the real estate industry (4 in the Senate, 25 in the House), and 10 Members who have worked in the construction industry (1 in the Senate, 9 in the House); 6 social workers (2 in the Senate, 4 in the House) and 3 union representatives (all in the House); 13 nonprofit executives in the House; 3 radio talk show hosts (1 in the Senate, 2 in the House); 4 radio or television broadcasters, managers, or owners (all in the House); 6 reporters or journalists (1 in the Senate, 5 in the House), a public television producer in the House, and a newspaper publisher in each chamber; 21 insurance agents or executives (4 in the Senate, 17 in the House) and 4 Members who have worked with stocks or bonds (all in the House); 1 artist, 1 book publisher, and 2 speechwriters (all in the House), and 1 documentary filmmaker in the Senate; 6 restaurateurs (5 in the House, 1 in the Senate), as well as 2 coffee shop owners, 1 wine store owner, and 1 whiskey distiller (all in the House); 27 farmers, ranchers, or cattle farm owners (5 in the Senate, 22 in the House); 1 almond orchard owner and vintner, as well as a forester and a fruit orchard worker (all in the House); 1 flight attendant and 1 pilot, both in the House; 3 professional football players, 1 hockey player, 1 baseball player, and 1 mixed martial arts fighter (all in the House); and 9 current members of the military reserves (8 in the House, 1 in the Senate) and 7 current members of the National Guard (all in the House).", "Other occupations listed in the CQ Member Profiles include emergency dispatcher, letter carrier, animal nutrition specialist, cake decorator, waiter, electrician, rodeo announcer, carpenter, computer systems analyst, software engineer, R&D lab executive, and explosives expert."], "subsections": []}, {"section_title": "Education", "paragraphs": ["As has been true in recent Congresses, the vast majority of Members (94.8% of House Members and 100% of Senators) at the beginning of the 116 th Congress hold bachelor's degrees. Sixty-eight percent of House Members and 77% of Senators hold educational degrees beyond a bachelor's. The CQ Member Profiles at the beginning of the 116 th Congress indicate the following:", "17 Members of the House have no educational degree beyond a high school diploma; 6 Members of the House have associate's degrees as their highest degrees; 99 Members of the House and 18 Senators earned a master's degree as their highest attained degrees; 161 Members of the House (36.6% of the House) and 53 Senators (53% of the Senate) hold law degrees; 21 Representatives and 4 Senators have doctoral (Ph.D., D.Phil., Ed.D., or D.\u00a0Min) degrees; and 21 Members of the House and 4 Senators have medical degrees.", "By comparison, approximately 35 years ago in the 99 th Congress (1985-1986), 85% of House Members and 88% of Senators held bachelor's degrees. Approximately 45 years ago, in the 94 th Congress (1975-1976), 82% of House Members and 88% of Senators held bachelor's degrees. About 60 years ago, in the 87 th Congress (1961-1962), 76% of House Members and 76% of Senators held bachelor's degrees. ", "Five Representatives and one Senator are graduates of the U.S. Military Academy, two Representatives and one Senator graduated from the U.S. Naval Academy, and one Senator graduated from the U.S. Air Force Academy. Five Representatives and one Senator were Rhodes Scholars, two Representatives were Fulbright Scholars, two Representatives were Marshall Scholars, and two Representatives and one Senator were Truman Scholars."], "subsections": []}, {"section_title": "Congressional Service", "paragraphs": ["The average length of service for Representatives at the beginning of the 116 th Congress was 8.6 years (4.3 House terms); for Senators, 10.1 years (1.7 Senate terms).", "At the beginning of the 116 th Congress, 90 of the House Members, including the Resident Commissioner for Puerto Rico (20.4% of the total House Membership), had first been elected to the House in November 2018, and 9 of the Senators (9% of the total Senate membership) had first been elected to the Senate in November 2018. These numbers are higher than at the beginning of the 115 th Congress, when 11.8% of the House and 7% of the Senate were newly elected \"freshmen.\"", "At the beginning of the 116 th Congress, 144 House Members, including 1 Delegate and the Resident Commissioner (32.7% of House Members), had no more than two years of House experience, and 19 Senators (19% of Senators) had no more than two years of Senate experience.", "For more historical information on the tenure of Members of Congress, see CRS Report R41545, Congressional Careers: Service Tenure and Patterns of Member Service, 1789-2019 , by William T. Egar and Amber Hope Wilhelm."], "subsections": []}, {"section_title": "Religion", "paragraphs": ["Ninety-seven percent of the Members of the 116 th Congress report an affiliation with a specific religion.", "Statistics gathered by the Pew Research Center on Religion and Public Life, which studies the religious affiliation of Representatives and Senators, and CQ at the beginning of the 116 th Congress showed the following:", "54.9% of Members (233 in the House, 60 in the Senate) are Protestant, with Baptist as the most represented denomination, followed by Methodist; 30.5% of Members (141 in the House, 22 in the Senate) are Catholic; 6.4% of Members (26 in the House, 8 in the Senate) are Jewish; 1.9% of Members (6 in the House, 4 in the Senate) are Mormon (Church of Jesus Christ of Latter-day Saints); 2 Members (1 in the House, 1 in the Senate) are Buddhist, 3 Representatives are Muslim, and 3 Representatives are Hindu; and other religious affiliations represented include Greek Orthodox, Pentecostal Christian, Unitarian Universalist, and Adventist."], "subsections": []}, {"section_title": "Gender and Ethnicity", "paragraphs": [], "subsections": [{"section_title": "Women Members", "paragraphs": ["A record 131 women Members (24.2% of the total membership) serve in the 116 th Congress, 22 more than at the beginning of the 115 th Congress. One hundred six women, including 3 Delegates as well as the Resident Commissioner, serve in the House and 25 in the Senate. Of the 106 women in the House, 91 are Democrats, including 2 of the Delegates, and 15 are Republicans, including 1 Delegate as well as the Resident Commissioner. Of the 25 women in the Senate, 17 are Democrats and 8 are Republicans. ", "By comparison, approximately 35 years ago in the 99 th Congress (1985-1986), 23 women served in the House, and 2 in the Senate. Approximately 45 years ago, in the 94 th Congress (1975-1976), there were 19 women in the House, and none in the Senate."], "subsections": []}, {"section_title": "African American Members", "paragraphs": ["There are a record 58 African American Members (10.7% of the total membership) in the 116 th Congress, 6 more than at the beginning of the 115 th Congress. Fifty-five serve in the House, including two Delegates, and three serve in the Senate. This number includes one Representative, as well as one Senator, who are of African American and Asian ancestry, and two Representatives who are of African American and Hispanic ancestry. In this report, each of these four Members is counted as belonging to two ethnic groups. Fifty-four of the African American House Members, including two Delegates, are Democrats, and one is a Republican. Two of the Senators are Democrats and one is Republican. Twenty-four African American women, including two Delegates, serve in the House, and one serves in the Senate. ", "By comparison, approximately 35 years ago in the 99 th Congress (1985-1986), 21 African American Members served in the House, and none in the Senate. About 60 years ago, in the 87 th Congress (1961-1962), there were 4 African American Members of Congress, all serving in the House."], "subsections": []}, {"section_title": "Hispanic/Latino American Members", "paragraphs": ["There are 50 Hispanic or Latino Members in the 116 th Congress, 9.2% of the total membership and a record number. Forty-five serve in the House, including two delegates and the Resident Commissioner, and 5 in the Senate. These numbers include two House Members who are also of Asian descent, and two House Members also of African ancestry; these Members are counted in both ethnic categories in this report. Of the Members of the House, 37 are Democrats (including 2 Delegates) and 8 are Republicans (including the Resident Commissioner). Fourteen are women, including the Resident Commissioner. Of the five Hispanic Senators (three Republicans, two Democrats), one is a woman. By comparison, approximately 35 years ago in the 99 th Congress (1985-1986), 14 Hispanic or Latino Members served in Congress. All 14 were male Members of the House. "], "subsections": []}, {"section_title": "Asian/Pacific Islander American Members", "paragraphs": ["A record 20 Members of the 116 th Congress (3.8% of the total membership) are of Asian, South Asian, or Pacific Islander ancestry. Seventeen of them (16 Democrats, 1 Republican) serve in the House, and 3 (all Democrats) serve in the Senate. These numbers include one House Member and one Senator who are also of African American ancestry, and another House Member of Hispanic ancestry; these Members are counted in both ethnic categories in this report. Of those serving in the House, three are Delegates. Ten of the Asian, Pacific Islander, or South Asian American Members are female: seven in the House, and all three in the Senate. By comparison, approximately 35 years ago in the 99 th Congress (1985-1986), there were five Asian/Pacific Islander Americans in the House, and two in the Senate. "], "subsections": []}, {"section_title": "American Indian Members", "paragraphs": ["There are four American Indian (Native American) Members of the 116 th Congress; two of each party, all in the House. This is two more than in the 115 th Congress, and a record number."], "subsections": []}, {"section_title": "Foreign Birth", "paragraphs": ["Twenty-four Representatives and five Senators (5.3% of the 116 th Congress) were born outside the United States. Their places of birth include Canada, Cuba, Ecuador, Germany, Japan, Peru, and India. Some of these Members were born to American citizens working or serving abroad. The U.S. Constitution requires that Representatives be citizens for seven years and Senators be citizens for nine years before they take office."], "subsections": []}, {"section_title": "Military Service", "paragraphs": ["At the beginning of the 116 th Congress, there were 96 individuals (17.8% of the total membership) who had served or were serving in the military, 6 fewer than at the beginning of the 115 th Congress (102 Members). According to lists compiled by CQ , the House as of January 2019 had 78 veterans (including 4 female Members, as well as 1 Delegate); the Senate had 18 veterans, including 3 women. These Members served in the Vietnam War, the Persian Gulf War, and combat or peacekeeping missions in Afghanistan, Iraq, and Kosovo, as well as during times of peace. Eight House Members and one Senator are still serving in the reserves, and seven House Members are still serving in the National Guard. Four of the seven female veterans are combat veterans.", "The number of veterans in the 116 th Congress reflects the trend of steady decline in recent decades in the number of Members who have served in the military. For example, 64% of the Members of the 97 th Congress (1981-1982) were veterans, and in the 92 nd Congress (1971-1972), 73% of the Members were veterans.", "For summary information on the demographics of Members in selected past Congresses, including age trends, occupational backgrounds, military veteran status, and educational attainment, see CRS Report R42365, Representatives and Senators: Trends in Member Characteristics Since 1945 , coordinated by R. Eric Petersen. "], "subsections": []}]}]}}
{"id": "R45335", "title": "Trade Related Agencies: FY2019 Appropriations, Commerce, Justice, Science and Related Agencies (CJS)", "released_date": "2019-03-28T00:00:00", "summary": ["The Consolidated Appropriations Act, 2019 (P.L. 116-6), was signed into law on February 15, 2019. The act included a total of $647.0 million in funding for three trade-related agencies under the Commerce, Justice, Science and Related Agencies (CJS) account\u2014the International Trade Administration (ITA), the U.S. International Trade Commission (USITC), and the office of the United States Trade Representative (USTR). This represents a 0.2% decrease from FY2018 appropriations. For FY2019, the Consolidated Appropriations Act, 2019, included $484.0 million in direct appropriations for ITA (a 0.4% increase from the FY2018 appropriation), $95.0 million in funding for USITC (a 1.4% increase), and a total of $68.0 million for USTR (a 0.2% decrease).", "The Administration's Request", "On February 12, 2018, the Trump Administration submitted its FY2019 budget request to Congress. The FY2019 proposal included a total of $590.8 million for the three CJS trade-related agencies, an 8.9% decrease from FY2018 total appropriated amounts for these agencies. The Administration requested reducing funding for all three trade-related agencies. For FY2019, the request included $440.1 million in direct funding for ITA (an 8.7% decrease from the FY2018 appropriation), $87.6 million for USITC (a 6.5% decrease), and $63.0 million for USTR (a 13.2% decrease).", "Congressional Actions", "In the spring of 2018, the House and Senate reported FY2019 CJS appropriations bills, which included proposed funding for ITA, USITC, and USTR. The reported bills did not adopt many of the Administration's budget reductions, and instead proposed funding levels that were more similar to the FY2018-enacted amounts.", "The House Committee on Appropriations reported H.R. 5952 on May 17, 2018. The House proposal recommended a total of $647.6 million for the three CJS trade-related agencies. This proposal was $56.8 million more (9.6%) than the Administration's request, and $0.7 million less (-0.1%) than the FY2018-enacted legislation. The House committee proposed $480.0 million in direct funding for ITA, $95.0 million for USTIC, and a total of $72.6 million for USTR, comprised of $57.6 million for salaries and expenses and an additional $15.0 million from the Trade Enforcement Trust Fund for trade enforcement activities as authorized by the Trade Facilitation and Trade Enforcement Act of 2015 (P.L. 114-125).", "The Senate Committee on Appropriations reported S. 3072 on June 14, 2018. The Senate committee-reported proposal recommended a total of $655.6 million for the three CJS trade-related agencies. This is $64.8 million (11.0%) more than the Administration's request and $7.3 million (1.1%) more than the FY2018-enacted appropriations. The Senate committee proposed $488.0 million in direct funding for ITA, $95 million for USITC, and a total of $72.6 million for USTR, comprised of $57.6 million for salaries and expenses and an additional $15.0 million from the Trade Enforcement Trust Fund for trade enforcement activities.", "After three continuing resolutions and a three-week lapse in funding, Congress passed the Consolidated Appropriations Act. 2019 (P.L. 116-6), which was signed into law on February 15, 2019. The act included a total of $647.0 million in funding for the three trade-related agencies, which represented a 0.2% decrease from FY2018 funding levels."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides an overview of the FY2019 budget request and appropriations for the International Trade Administration (ITA), the U.S. International Trade Commission (USITC), and the Office of the United States Trade Representative (USTR). These three trade-related agencies are funded through the annual Commerce, Justice, Science, and Related Agencies (CJS) appropriations. This report also provides a review of these trade agencies' programs.", "When comparing the Administration's FY2019 request with FY2018 funding, one may want to consider that the Administration formulated its FY2019 budget request before full-year appropriations for FY2018 were enacted. In this report, FY2018 funding levels reflect the amounts appropriated in the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), enacted on March 23, 2018.", "The Consolidated Appropriations Act, 2018, provided $482.0 million in direct funding for ITA, $93.7 million for USTIC, and a total of $72.6 million for USTR for FY2018. The FY2018 appropriation for the three CJS trade-related agencies totaled $648.3 million. ", "The Consolidated Appropriations Act, 2019, provided $484.0 million in direct appropriations for ITA, $95.0 million in funding for USITC, and a total of $68.0 million for USTR. The FY2019 appropriations for three CJS trade-related agencies totaled $647.0 million, a 0.2% decrease from FY2018 appropriations.", "See the Appendix for enacted budget authority for the trade-related agencies for FY2009-FY2019."], "subsections": []}, {"section_title": "The Administration's FY2019 Budget Request", "paragraphs": ["The President submitted his FY2019 budget request to Congress on February 12, 2018. In it, the Administration requested a total of $590.8 million for the three CJS trade-related agencies (see Table 1 ). This request represented an 8.9% decrease in funding from the FY2018 appropriated amount. The request included reduced funding for all three trade agencies: $440.1 million in direct funding for ITA (an 8.7% decrease from the FY2018 appropriation), $87.6 million for USITC (a 6.5% decrease), and $63.0 million for USTR (a 13.2% decrease). ", "Despite the proposed overall decrease in funding for CJS trade-related agencies, the Administration proposed increasing some trade enforcement activities within ITA and USTR. For ITA, the Administration proposed increasing trade enforcement activities while reducing funding for certain export promotion activities. For USTR, the Administration requested funds to increase staffing; however, the request did not include a request for funding to be drawn from the Trade Enforcement Trust Fund. (For a description of the \" Trade Enforcement Trust Fund ,\" see section below.) The President's budget did not provide a rationale for requesting a decrease in funding for USITC. A more detailed overview of these agencies' FY2019 budget requests is provided below."], "subsections": []}, {"section_title": "Congressional Actions", "paragraphs": ["The House and Senate Appropriations Committees reported their CJS appropriation bills in the spring of 2018. Both committees largely declined the budget cuts requested by the Administration for these three trade agencies. (See Table 1 .)", "The House Committee on Appropriations reported H.R. 5952 on May 17, 2018. The House committee bill included a total of $647.6 million for the three trade-related agencies, which was $56.8 million more (9.6%) than the Administration's request and $0.7 million less (-0.1%) than the FY2018-enacted amount. The House committee recommended $480.0 million in direct funding for ITA, $95.0 million for USTIC, and a total of $72.6 million for USTR. ", "The Senate Committee on Appropriations reported S. 3072 on June 14, 2018. The Senate bill included a total of $655.6 million for the three agencies, which was $64.8 million (11.0%) more than the Administration's request and $7.3 million (1.1%) more than the FY2018-enacted appropriation. The Senate committee recommended $488.0 million in direct funding for ITA, $95.0 million for USITC, and a total of $72.6 million for USTR. ", "Through February 15, 2019, the CJS trade-related agencies operated under continuing resolutions (CR)\u2014with the exception of a three-week lapse in funding when agencies halted most operations.", "Congress passed final FY2019 appropriations in the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), which was signed into law on February 15, 2019. The act included a total of $647.0 million in funding for the three trade-related agencies\u2014a 0.2% decrease from FY2018 appropriations. For FY2019, the Consolidated Appropriations Act, 2019, included $484.0 million in direct appropriations for ITA (a 0.4% increase from the FY2018 appropriation), $95.0 million in funding for USITC (a 1.4% increase), and a total of $68.0 million for USTR (a 0.2% decrease)."], "subsections": []}, {"section_title": "International Trade Administration (ITA)", "paragraphs": ["Within the Department of Commerce, ITA's mission is to improve U.S. prosperity by strengthening the competitiveness of U.S. industry, promoting trade and investment, and ensuring compliance with trade laws and agreements. ITA provides export promotion services; works to enforce and ensure compliance with trade laws and agreements; administers trade remedies such as antidumping and countervailing duties; and provides analytical support for ongoing trade negotiations. ", "ITA went through a major organizational change in October 2013 in which it consolidated four organizational units into three more functionally aligned units: (1) Global Markets; (2) Industry and Analysis; and (3) Enforcement and Compliance. ITA also has a fourth organizational unit, the Executive and Administrative Directorate, which is responsible for providing policy leadership, information technology support, and administration services for all of ITA. ( Table A-1 shows budget amounts for ITA by unit between FY2009 and FY2019.)", "For FY2019, the Administration requested $440.1 million for ITA in direct funding, with an additional $11.0 million to be collected in user fees, for a total of $451.1 million in authorized spending. The request for direct funding represents a $41.9 million decrease (-8.7%) from the FY2018-enacted amount ($482.0 million). ", "According to ITA's budget justification, the Administration proposed increasing ITA's enforcement and compliance efforts in FY2019, while deemphasizing other initiatives, such as export promotion. The Administration specifically proposed closing some domestic and international offices of the United States and Foreign Commercial Service (US&FCS).", "The House committee-reported H.R. 5952 proposed $480.0 million for ITA in direct funding, with an additional $11.0 million to be collected from user fees, for a total of $491.0 million in authorized spending. The amount in direct funding proposed by the House Committee on Appropriations was $39.9 million (9.1%) more than the Administration's request and $2.0 million less (-0.4%) than the FY2018-enacted amount.", "The Senate committee-reported S. 3072 included $488.0 million in direct funding for ITA, with an additional $11.0 million in user fees, for a total of $499.0 million in authorized spending. The amount in direct funding proposed by the Senate Committee on Appropriations was $47.9 million (10.9%) more than the Administration's request and $6.0 million (1.2%) more than the FY2018-enacted amount.", "The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provided $484.0 million in direct appropriations for ITA, with an additional $11.0 million to be collected in user fees, for a total of $495.0 in authorized spending. The act provided $2 million more (0.4%) in direct appropriations for ITA than the FY2018-enacted amount and $43.9 million more (10.0%) than the Administration's request. "], "subsections": [{"section_title": "Global Markets Unit", "paragraphs": ["ITA's Global Markets (GM) unit is a combination of the United States and Foreign Commercial Service (US&FCS) unit, a program that provides export promotion services to U.S. businesses, and SelectUSA, a program that works to attract foreign investment into the United States. Through US&FCS, GM promotes U.S. exports by helping U.S. exporters research foreign markets and identify opportunities abroad. GM's country and regional experts\u2015in domestic and overseas offices\u2014help to advise U.S. companies on market access, local standards, and regulations. The unit also helps to make connections through business-to-business trade shows, fairs, and missions. GM is designed to advance U.S. commercial interests by engaging with foreign governments and U.S. businesses, identifying and resolving market barriers, and leading efforts that advocate for U.S. firms with foreign governments. Through its SelectUSA program, the GM unit also promotes the United States as a destination for foreign investment. (For more on SelectUSA, see section below, \" SelectUSA Program .\")", "For FY2019, the Administration proposed reducing funding for the Global Markets unit. The Administration requested $276.5 million for Global Markets in direct funding, a 13.4% decrease from the FY2018-enacted appropriation. In its FY2019 budget submission, ITA proposed \"rescaling export promotion\" activities in the GM unit by reducing staff and its domestic and overseas offices, with a total reduction of 133 positions. The budget submission did not indicate how many or which domestic and overseas offices it was proposing to close. ", "The House and Senate Appropriation Committees did not adopt the proposed cuts.", "The House Appropriations Committee recommended $319.0 million for the Global Markets unit for FY2019. This was $42.5 million (15.4%) more than the Administration's request. According to the committee report, \"the recommendation does not adopt the proposal to reduce U.S. and Foreign Commercial Service staff or close overseas offices or U.S. Export Assistance Centers.\"", "The Senate Appropriations Committee report did not provide an exact funding amount, but recommended that ITA \"fund US&FCS, and its core mission of export promotion, at the highest possible level in fiscal year 2019, and at no less than the amount provided in fiscal year 2018.\" Like the House committee, the Senate committee did not adopt the Administration's proposal to close offices. The Senate committee report specifically noted, \"No offices shall be closed in fiscal year 2019 unless the Committee approves a reprogramming request to close such office or offices. Additionally, the Committee will not approve requests to close any domestic offices, called U.S. Export Assistance Centers, if such Center is the only one located in a given State.\"", "According to the conference report accompanying the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), the final agreement for FY2019 appropriations included \"no less than $320 million\" in funding for Global Markets and required ITA to report quarterly to the Committees on staffing levels within the US&FCS."], "subsections": []}, {"section_title": "Industry and Analysis", "paragraphs": ["ITA's Industry and Analysis unit brings together ITA's industry, trade, and economic experts to advance the competitiveness of U.S. industries through the development and execution of international trade and investment policies, export promotion strategies, and investment promotion. It develops economic and international policy analysis to improve market access for U.S. businesses, and designs and implements trade and investment promotion programs. The unit serves as the primary liaison between U.S. industries and the federal government on trade and investment promotion. It administers programs that support small and medium-sized enterprises, such as the Market Development Cooperator Program.", "For FY2019, the Administration requested $52.3 million for Industry and Analysis. The request is $3.4 million less than the FY2018 funding level. The Administration proposed refocusing some of the unit's priorities away from export promotion and toward trade enforcement. Specifically, the Administration proposed reducing activities related to trade missions, the International Buyer Program, and certified trade fairs, and eliminating Market Development Cooperator Program grants.", "The House committee proposed $52.0 million for Industry and Analysis. This represented $0.3 million less (-0.5%) than the Administration's request.", "The Senate committee-reported bill did not include a specific recommendation for Industry and Analysis.", "The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), did not provide an exact funding guidance for Industry and Analysis."], "subsections": []}, {"section_title": "Enforcement and Compliance", "paragraphs": ["The mission of ITA's Enforcement and Compliance unit is to enforce U.S. trade laws and ensure compliance with negotiated international trade agreements. It is responsible for enforcing U.S. antidumping and countervailing duty (AD/CVD) laws; overseeing a variety of programs and policies regarding the enforcement and administration of U.S. trade remedy laws; assisting U.S. industry and businesses with unfair trade matters; and administering the Foreign Trade Zone program and other U.S. import programs. ", "For FY2019, the Administration requested $90.6 million for the Enforcement and Compliance unit, an increase of $3.1 million (3.6%) from the FY2018-enacted amount. For the requested increase in funding, ITA cited the unit's increasing number of AD/CVD investigations, its new focus on self-initiating AD/CVD cases, and the increased workload due to the tariffs and investigations initiated through Section 232 of the Trade Expansion Act of 1962. ", "The House Appropriations Committee proposed $85.5 million for Enforcement and Compliance. The House committee proposal represented $2.1 million less (-2.3%) than the Administration's request, and $1.0 million (1.1%) more than the FY2018-enacted amount .", "The Senate Committee on Appropriations recommended $91.5 million for Enforcement and Compliance. The Senate recommendation represented $0.9 million more than the Administration's request and $4.0 million more than the 2018-enacted amount. The Senate committee report noted that the committee was supportive of the Administration's request to self-initiate AD/CVD cases.", "For FY2019 appropriations, the conference report accompanying the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), included $88.5 million for Enforcement and Compliance. This amount was $1.0 million more (1.1%) than the FY2018 funding, and $2.1 million less (-2.1%) than the Administration's request. "], "subsections": []}]}, {"section_title": "U.S. International Trade Commission (USITC)", "paragraphs": ["USITC is an independent, quasi-judicial agency responsible for conducting trade-related investigations and providing independent technical advice related to U.S. international trade policy to Congress, the President, and the USTR. The commission (1) investigates and determines whether imports injure a domestic industry or violate U.S. intellectual property rights; (2) provides independent tariff, trade, and competitiveness-related analysis to the President and Congress; and (3) maintains the U.S. tariff schedule. USITC also serves as a federal resource for trade data and other trade policy information. It makes most of its information and analyses available to the public to promote understanding of competitiveness, international trade issues, and the role that international trade plays in the U.S. economy. ", "In addition to the President's budget request for the commission, USITC also has bypass authority to submit its budget directly to Congress without revision by the President, pursuant to Section 175 of the Trade Act of 1975. ", "For FY2019, the President requested $87.6 million for USITC, which represented a $6.1 million decrease (-6.5%) from the FY2018-enacted amount ($93.7 million). While the President requested a decrease in funding for USITC, the commission's independent budget submission\u2014sent directly to Congress without revision by the President\u2014requested $97.5 million for FY2019, an increase of $3.8 million (4.0%) from the FY2018-enacted amount. USITC cited the increasing number of import injury cases in the previous five years and projected that the caseload would increase further in FY2019.", "Both the House and Senate committee-reported bills recommended $95.0 million for USITC. This amount was $7.4 million (8.4%) more than the President's request and $1.3 million (1.4%) more than the FY2018-enacted amount.", "The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), provided $95.0 million for USITC, which was $7.4 million (8.4%) more than the President's request and $1.3 million (1.4%) more than the FY2018-enacted amount."], "subsections": []}, {"section_title": "Office of the U.S. Trade Representative (USTR)", "paragraphs": ["USTR, located in the Executive Office of the President, is responsible for developing and coordinating U.S. international trade and direct investment policies. USTR is the President's chief negotiator for international trade agreements, including commodity and direct investment negotiations. It negotiates directly with foreign governments to create trade agreements, resolve disputes, and participate in global trade policy organizations such as the World Trade Organization. It also meets with business groups, policymakers, and public interest groups on trade policy issues. In 2018, USTR led the negotiations for the modernization of the North American Free Trade Agreement (NAFTA) and the investigations into Chinese intellectual property practices.", "In addition to direct appropriations for USTR, supplementary funding for the agency is available through the congressionally established Trade Enforcement Trust Fund. For more detail on the trust fund, see section \" Trade Enforcement Trust Fund ,\" below.", "For FY2019, the Administration requested $63.0 million for USTR's salaries and expenses, and no additional funding from the Trade Enforcement Trust Fund. The request represents a $9.6 million decrease (-13.2%) from the FY2018-enacted amounts ($72.6 million).", "In the Administration's budget request, USTR outlined the Trump Administration's \"aggressive trade agenda,\" and its goals of \"(1) defending U.S. national sovereignty over trade policy; (2) strictly enforcing U.S. trade laws; (3) using all possible sources of leverage to encourage other countries to open their markets to U.S. exports of goods and services, and protecting U.S. intellectual property rights; and (4) negotiating better trade deals with countries in key markets around the world.\"", "Both the House and Senate committee-reported bills recommended a total of $72.6 million for USTR for FY2019. These proposals included $57.6 million for USTR's salaries and expenses and $15.0 million from the Trade Enforcement Trust Fund for enforcement activities authorized in Section 611 of the Trade Facilitation and Trade Enforcement Act of 2015 ( P.L. 114-125 ). The total proposals were $9.6 million (15.2%) more than the Administration's request, and were equal to the FY2018-enacted amount.", "The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), provided a total of $63.0 million for USTR, which included $53.0 million in salaries and expenses for USTR and an additional $15.0 million to be derived from the Trade Enforcement Trust Fund. The total funding was $4.6 million less (-6.3%) than the FY2018 appropriated amount."], "subsections": []}, {"section_title": "Selected Trade-Related Programs and Activities", "paragraphs": ["Over the past decade, Congress has provided funding for specific trade-related programs, including (1) China trade enforcement and compliance activities; (2) trade promotion and attracting foreign direct investment to the United States through ITA's SelectUSA program; and (3) trade enforcement activities through the Trade Enforcement Trust Fund and the Interagency Center on Trade Implementation, Monitoring, and Enforcement (ICTIME, formerly the Interagency Trade Enforcement Center (ITEC))."], "subsections": [{"section_title": "China Trade Enforcement and Compliance Activities", "paragraphs": ["Since 2004, Congress has dedicated some of ITA's funding to AD/CVD enforcement and compliance activities with respect to China and other nonmarket economies. ITA's Office of China Compliance was established by the Consolidated Appropriations Act of 2004 ( P.L. 108-199 ). Its primary role has been to enforce U.S. AD/CVD laws and to develop and implement other policies and programs aimed at countering unfair foreign trade practices in China. ITA's China Countervailing Duty Group was established in FY2009 to accommodate the workload that resulted from the application of countervailing duty law to imports from nonmarket economy countries.", "The Office of China Compliance is within the Enforcement and Compliance unit at ITA. ITA's FY2019 budget justification did not provide a breakdown of funding for its China AD/CVD activities.", "Both the House and Senate committee-reported bills included $16.4 million from ITA's funding for China AD/CVD enforcement and compliance activities for FY2019. ", "The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), provided $16.4 million from ITA's funding for China AD/CVD enforcement and compliance activities for FY2019. This amount was equal to the FY2018-enacted amount."], "subsections": []}, {"section_title": "SelectUSA Program", "paragraphs": ["SelectUSA was created in 2011 and is now part of ITA's Global Markets unit. It coordinates investment-related resources across more than 20 federal agencies to (1) promote the United States as an investment market and (2) address investor climate concerns that may impede investment in the United States. The program serves as an information resource for international investors and advocates for U.S. cities, states, and regions as investment destinations.", "ITA's budget justification did not provide a breakdown for requested funding for SelectUSA.", "The House committee-reported bill did not propose a specific funding amount for SelectUSA. ", "The Senate committee report recommended $10.0 million in funding for SelectUSA, an amount equal to the FY2018-enacted amount. The Senate Committee on Appropriation proposed making funding contingent on (1) SelectUSA updating its protocol to ensure that its programs did not encourage foreign investments by state-owned entities into the United States and (2) SelectUSA reporting its updated protocol to the committee within 30 days of enactment of the bill.", "According to the conference report accompanying the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), the final agreement adopted the Senate committee report language regarding SelectUSA. "], "subsections": []}, {"section_title": "Survey of International Air Travelers (SIAT)", "paragraphs": ["ITA's Survey of International Air Travelers (SIAT) gathers statistics about air passenger travelers in the United States. These statistics are used across federal agencies, for a variety of purposes, such as to estimate the contribution of international travel to the economy, develop public policy on the travel industry, and forecast staffing needs at consulates and ports of entry. ", "The Administration requested $5.0 million for FY2019 for SIAT to expand the survey and data collection. The Administration proposed that \"$5 million in fee revenues collected from the surcharge on international travelers utilizing the Electronic System for Travel Authorization (ESTA) be redirected to fully fund the SIAT.\"", "The House committee-reported bill did not include a specific recommendation for SIAT.", "According to the Senate committee report, the Senate Committee on Appropriations did not adopt the Administration's proposal to seek alternative funding sources for SIAT and \"direct[ed] ITA to continue funding SIAT out of its base budget. Within funds provided, ITA [was] encouraged to increase the sample size for SIAT.\"", "The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), and the accompanying conference report did not provide specific language regarding SIAT."], "subsections": []}, {"section_title": "Trade Enforcement Trust Fund (TETF)", "paragraphs": ["In order to provide additional funding for USTR's trade enforcement activities, Congress established the Trade Enforcement Trust Fund (TETF) in 2016. In Section 611 of the Trade Facilitation and Trade Enforcement Act of 2015 ( P.L. 114-125 ), Congress set up the trust fund and outlined authorized uses of the funds. According to Section 611(d), USTR can use funds from the TETF to monitor and enforce trade agreements and WTO commitments and to support trade capacity-building assistance to help partner countries meet their free-trade agreement obligations and commitments. USTR can also transfer funds to select federal agencies for trade enforcement activities authorized in Section 611(d) of the Trade Facilitation and Trade Enforcement Act of 2015.", "For FY2019, the Administration requested no funding to be derived from the TETF; the FY2018-enacted amount was $15.0 million. ", "Both the House and Senate committee bills proposed $15.0 million from the TETF for enforcement activities authorized in Section 611 of the Trade Facilitation and Trade Enforcement Act of 2015. These proposals were equal to the FY2018-enacted amount. ", "The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), provided $15.0 million to be derived from the TETF for USTR, for enforcement activities authorized in Section 611 of the Trade Facilitation and Trade Enforcement Act of 2015. This amount is equal to the FY2018-enacted amount."], "subsections": []}, {"section_title": "Implementation, Monitoring, and Enforcement (ICTIME, formerly the Interagency Trade Enforcement Center [ITEC])", "paragraphs": ["ITEC was established by executive order in 2012 to take a \"whole-of-government\" approach to monitoring and enforcing U.S. trade rights by using expertise from across the federal government. In 2016, the ITEC was succeeded by ICTIME, which Congress established through the Trade Facilitation and Trade Enforcement Act of 2015 ( P.L. 114-125 ). The executive-established ITEC received its funding through ITA; funding for ICTIME is now appropriated through USTR.", "ICTIME's purpose is to advance U.S. trade policy through strengthened and coordinated enforcement of U.S. trade rights. ICTIME investigates potential disputes under the auspices of the World Trade Organization; inspects potential disputes pursuant to bilateral and regional trade agreements to which the United States is a party; and carries out the functions of USTR with respect to the monitoring and enforcement of trade agreements to which the United States is a party. USTR and ITA work closely within the ICTIME to identify issues and develop information in areas of economic importance to U.S. industries. ", "The USTR's budget justification did not provide a breakdown for requested funding for ICTIME.", "The House and Senate committee-reported bills did not include a specific funding amount for ICTIME. The Senate committee report did note that the Senate committee supports ICTIME within the funds provided for USTR.", "The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) and the accompanying conference report also did not provide specific language regarding ICTIME."], "subsections": [{"section_title": "Appendix. Budget Authority Tables", "paragraphs": [], "subsections": []}]}]}]}}
{"id": "R44981", "title": "NAFTA Renegotiation and the Proposed United States-Mexico-Canada Agreement (USMCA)", "released_date": "2019-02-26T00:00:00", "summary": ["The 116th Congress faces policy issues related to the Trump Administration's renegotiation of the North American Free Trade Agreement (NAFTA) and the proposed United States-Mexico-Canada Agreement (USMCA). On May 18, 2017, the Trump Administration sent a 90-day notification to Congress of its intent to begin talks with Canada and Mexico to renegotiate and modernize NAFTA, as required by the 2015 Trade Promotion Authority (TPA). Talks officially began on August 16, 2017. Negotiations were concluded on September 30, 2018. The proposed USMCA was signed on November 30, 2018. The agreement must be approved by Congress and ratified by the governments of Mexico and Canada before it can enter into force.", "The first NAFTA negotiations were launched in 1992 under President George H.W. Bush and continued under President William J. Clinton, who signed the implementing legislation on December 8, 1991 (P.L. 103-182). NAFTA entered into force on January 1, 1994. It is particularly significant because it was the most comprehensive free trade agreement (FTA) negotiated at the time, contained several groundbreaking provisions, and was the first of a new generation of U.S. FTAs later negotiated. Congress played a major role during its consideration and, after contentious and comprehensive debate, ultimately approved legislation to implement the agreement.", "NAFTA established trade liberalization commitments and set new rules and disciplines for future FTAs on issues important to the United States, including intellectual property rights protection, services trade, dispute settlement procedures, investment, labor, and environment. NAFTA's market-opening provisions gradually eliminated nearly all tariff and most nontariff barriers on merchandise trade. At the time of NAFTA negotiations, average applied U.S. duties on imports from Mexico were 2.07%, while U.S. businesses faced average tariffs of 10%, in addition to nontariff and investment barriers, in Mexico. The U.S.-Canada FTA had been in effect since 1989.", "The proposed USMCA, comprising 34 chapters and 12 side letters, retains most of NAFTA's market opening measures and most of its chapters, while making notable changes to auto rules of origin, dispute settlement provisions, government procurement, investment, and intellectual property rights (IPR) protection. It also modernizes provisions in services, labor, and the environment. New trade issues, such as digital trade, state-owned enterprises, anticorruption, and currency misalignment, are also addressed. Key issues for Congress in regard to the proposed USMCA include the constitutional authority of Congress over international trade, its role in revising, approving, or withdrawing from the agreement, U.S. negotiating objectives and the extent to which the proposed agreement makes progress in meeting them as required under TPA. Congress may also consider the agreement's impact on U.S. industries, the U.S. economy, and broader U.S. trade relations with Canada and Mexico.", "The timing for congressional consideration of the proposed USMCA is unclear in part because of the TPA timeline and also because of issues of interest and concern voiced by Congress, including the level of enforceable labor provisions, auto rules of origin, and investor-state dispute settlement. Some policymakers have stated that the path forward to passage of the USMCA by Congress is uncertain partially because the three countries have yet to resolve disputes over U.S. steel and aluminum tariffs imposed by the Trump Administration. The United States, Canada, and Mexico are currently in a trade dispute over U.S. actions under Section 232 of the Trade Act of 1962 to impose tariffs on such imports due to national security concerns. In response to the U.S. action, Mexico and Canada initiated World Trade Organization dispute settlement proceedings and retaliated against certain U.S. exports. The conclusion of the proposed USMCA did not resolve the Section 232 tariff dispute. The U.S. business community, industry groups, and some congressional leaders have publicly stated that the tariff issue must be resolved before the USMCA could enter into force."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The 116 th Congress, in both its legislative and oversight capacities, faces numerous trade policy issues related to the North American Free Trade Agreement (NAFTA) renegotiations and the proposed United States-Mexico-Canada Agreement (USMCA). On May 18, 2017, the Trump Administration sent a 90-day notification to Congress of its intent to begin talks with Canada and Mexico to renegotiate and modernize NAFTA, as required by the 2015 Trade Promotion Authority (TPA). Talks officially began on August 16, 2017. On September 30, 2018, leaders from the United States, Canada, and Mexico announced the conclusion of the negotiations for a modernized NAFTA, which would now be called the USMCA. On November 30, 2018, the proposed USMCA was signed by President Donald J. Trump, then President Enrique Pe\u00f1a Nieto of Mexico, and Canadian Prime Minister Justin Trudeau. President Trump stated his intention to withdraw from or renegotiate NAFTA during his election campaign and has hinted at the possibility of NAFTA withdrawal since he entered into office. ", "Key issues for Congress in regard to the consideration of the proposed USMCA include the constitutional authority of Congress over international trade, its role in revising, approving, or withdrawing from the agreement, U.S. negotiating objectives and the extent to which the proposed agreement makes progress in meeting them as required under TPA. Congress may also consider the agreement's impact on U.S. industries, the U.S. economy, and broader U.S. trade relations with Canada and Mexico, two of the United States' largest trading partners. ", "The proposed USMCA, if approved by Congress, would revise some key provisions such as auto rules of origin, which, some argue roll back longstanding U.S. FTA provisions. On the other hand, it establish new updated provisions in areas such as digital trade and intellectual property rights. A key question for Congress may be whether the agreement strikes the right balance overall. ", "After numerous rounds of negotiations, on August 31, 2018, after the United States and Mexico announced a preliminary U.S.-Mexico agreement, President Trump notified Congress of his intention to \"enter into a trade agreement with Mexico \u2013 and with Canada if it is willing.\" On September 30, 2018, U.S. Trade Representative (USTR) Robert Lighthizer announced that the three countries had reached an agreement on a USMCA trade deal that would revise, modernize, and replace NAFTA upon ratification.", "Canada, in its negotiating objectives, pledged to make NAFTA more \"progressive\" by strengthening labor and environmental provisions, adding a new chapter on indigenous rights, reforming the investor-state dispute settlement process, and protecting Canada's supply-management system for dairy and poultry, among other objectives. Mexico's set of negotiating objectives prioritized free trade of goods and services, and included provisions to update NAFTA, such as working toward \"inclusive and responsible\" trade by incorporating cooperation mechanisms in areas related to labor standards, anticorruption, and the environment, as well as strengthening energy security by enhancing NAFTA's chapter on energy. ", "While the USTR's NAFTA negotiating objectives included many goals consistent with TPA, USTR also sought, for the first time in U.S. trade negotiations, to reduce the U.S. trade deficit with NAFTA countries, among other specific objectives. U.S. objectives appeared to seek to \"rebalance the benefits\" of the agreement, echoing President Trump's statements that NAFTA has been a \"disaster\" and the \"worst agreement ever negotiated.\" Some U.S. negotiating positions could be seen to have the explicit or implicit goal of promoting U.S. economic sovereignty and/or rolling back previous liberalization commitments in specific areas, such as reviewing and potentially sunsetting the agreement every five years, questioning the validity of binational dispute settlement, enhancing government procurement restrictions, and increasing U.S. and North American content in the auto rules of origin. Trump Administration officials also spoke of unraveling the North American and global supply chains as a way of attempting to divert trade and investment from Canada and Mexico to the United States. Mexican and Canadian negotiators viewed such proposals as counterproductive to the spirit and mutual economic benefits of NAFTA and repeated their positions to modernize NAFTA with provisions such as those in the proposed Trans-Pacific Partnership (TPP). The differences between views on modernizing the agreement and U.S. proposals led to perceived tensions in the negotiations. ", "The proposed USMCA presents an opportunity to incorporate elements of more recent FTAs that have entered into force or were negotiated, such as the U.S.-Korea FTA (KORUS) and the proposed TPP. The U.S. and global economies have changed significantly since NAFTA entered into force 25 years ago, especially due to technology advances. The widespread use of the commercial internet, for example, has dramatically affected consumer habits, commercial activities such as e-commerce and supply chain management. Negotiators also sought updated provisions in other areas such as intellectual property rights (IPR), labor, and the environment. The increased role of state-led or supported firms in trade competition with private sector firms is also a new issue of debate and focus of new rules-setting.", "Many economists and business representatives generally look to maintain and strengthen the trade and investment relationship with Canada and Mexico under NAFTA or the proposed USMCA, and to further improve overall relations and economic integration within the region. However, labor groups and some consumer-advocacy groups argue that NAFTA resulted in outsourcing and lower wages that have had a negative effect on the U.S. economy. Some proponents and critics of NAFTA agree that NAFTA should be modernized, but have contrasting views on how to revise the agreement. ", "This report provides a brief overview of NAFTA and the role of Congress in the renegotiation process, and discusses key provisions in the proposed USMCA, as well as issues related to the negotiations. It also provides a discussion of policy implications for Congress going forward. It will not examine existing NAFTA provisions and economic relations in depth. For more information on these issues, please see CRS Report R42965, The North American Free Trade Agreement (NAFTA) , by M. Angeles Villarreal and Ian F. Fergusson."], "subsections": []}, {"section_title": "NAFTA Overview", "paragraphs": ["NAFTA negotiations were first launched under President George H. W. Bush. President William J. Clinton signed into law the NAFTA Implementation Act on December 8, 1993 ( P.L. 103-182 ). NAFTA entered into force on January 1, 1994. It is significant because it was the first FTA among two wealthy countries and a lower-income country and because it established trade liberalization commitments that led the way in setting new rules for future trade agreements on issues important to the United States. These include provisions on intellectual property rights (IPR) protection, services trade, agriculture, dispute settlement procedures, investment, labor, and the environment. NAFTA addressed policy issues that were new to FTAs and was influential in concluding major multilateral trade negotiations under the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO). The United States now has 14 FTAs with 20 countries. ", "NAFTA's market-opening provisions gradually eliminated nearly all tariff and most nontariff barriers on goods and services produced and traded within North America. At the start of NAFTA, average applied U.S. duties on imports from Mexico were 2.07% and over 50% of U.S. imports from Mexico entered duty free. In contrast, the United States faced higher tariff, nontariff, and investment barriers in Mexico. Trade among NAFTA partners has more than tripled since the agreement entered into force, forming integrated production chains among all three countries. Many trade policy experts and economists give credit to NAFTA for expanding trade and economic linkages among the parties, creating more efficient production processes, increasing the availability of lower-priced and greater choice of consumer goods, and improving living standards and working conditions. Others blame NAFTA and subsequent U.S. FTAs for disappointing employment trends, a decline in average U.S. wages, and for not having done enough to improve labor standards and environmental conditions abroad. ", "Another important element of NAFTA is that it helped \"lock in\" trade and investment liberalization efforts taking place at the time, especially in Mexico. NAFTA was instrumental in developing closer U.S. relations with both Mexico and Canada and it may have accelerated ongoing trade and investment trends. At the time that NAFTA was implemented, the U.S.-Canada Free Trade Agreement (CUSFTA) was already in effect and U.S. tariffs on most Mexican goods were low, while Mexico had the highest level of trade barriers among the three countries. From the 1930s through part of the 1980s, Mexico maintained a strong protectionist trade policy in an effort to be independent of any foreign power and as a means to promote domestic-led industrialization. In 1991, for example, U.S. businesses were very restricted in investing in Mexico. Under Mexico's restrictive Law to Promote Mexican Investment and Regulate Foreign Investment , about a third of Mexican economic activity was not open to majority foreign ownership. Mexico's failed protectionist policies did not result in increased income levels or economic growth, and the income disparity with the United States remains large, even after NAFTA .", "NAFTA coincided with Mexico's unilateral trade liberalization efforts. After NAFTA, the United States and Canada gained greater access to the Mexican market, which was the fastest-growing major export market for U.S. goods and services at the time. NAFTA also opened up the U.S. market to increased imports from Mexico and Canada, creating one of the largest free trade areas in the world. Since NAFTA, the three countries have made efforts to cooperate on issues of mutual interest, including trade and investment, and also in other, broader aspects of the relationship, such as regulatory cooperation, industrial competitiveness, trade facilitation, border environmental cooperation, and security."], "subsections": [{"section_title": "Key NAFTA Provisions", "paragraphs": ["Some key NAFTA provisions include tariff and nontariff trade liberalization, rules of origin, commitments on services trade and foreign investment, IPR protection, government procurement rules, and dispute resolution. Labor and environmental provisions are included in separate NAFTA side agreements. NAFTA provisions and rules governing trade were groundbreaking in a number of areas, particularly in regard to enforceable rules and disciplines that were included in a trade agreement for the first time. There were almost no FTAs in place worldwide at the time, and NAFTA influenced subsequent agreements negotiated by the United States and other countries, especially at the multilateral level in light of the then-pending Uruguay Round of major multilateral trade liberalization negotiations.", "The market-opening provisions of the agreement gradually eliminated nearly all tariffs and most nontariff barriers on goods produced and traded within North America, mostly over a period of 10 years after it entered into force. Some tariffs were eliminated immediately, while others were phased out in various schedules of 5 to 15 years. Most of the market-opening measures from NAFTA resulted in the removal of tariffs and quotas applied by Mexico on imports from the United States and Canada. The average applied U.S. duty for all imports from Mexico was 2.07% in 1993. Moreover, many Mexican products entered the United States duty-free under the U.S. Generalized System of Preferences (GSP). In 1993, over 50% of U.S. imports from Mexico entered the United States duty-free. In contrast, the United States faced considerably higher tariffs and substantial nontariff barriers on exports to Mexico. In 1993, Mexico's average applied tariff on all imports from the United States was 10% (Canada's average tariff on U.S. goods was 0.37%). Non-tariff barriers also affected U.S.-Mexico trade, such as sanitary and phytosanitary (SPS) rules, Mexican import licensing requirements, and U.S. marketing orders. The market opening that occurred after NAFTA is likely a factor in the significance of trade for Mexico's economy. In 1994, Mexico's exports and imports equaled 14% and 18%, respectively, of GDP, while in 2017, these percentages increased to 37% and 39%. For the United States, trade is less significant for the economy, with the value of imports and exports equaling 15% and 12%, respectively, of GDP in 2017 (see Table 1 ). ", "NAFTA rules, disciplines and nontariff provisions include the following:", "Agri c ulture. NAFTA eliminated tariffs and tariff-rate quotas (TRQs) on most agricultural products. It maintains TRQs with high over-quota tariffs for U.S. exports of dairy, poultry, and egg products to Canada. NAFTA addressed sanitary and phytosanitary (SPS) measures and other types of agricultural non-tariff barriers. SPS regulations are often regarded by agricultural exporters as one of the greatest challenges in trade, often resulting in increased costs and product loss and disrupting integrated supply chains. Investment . NAFTA removed significant investment barriers in Mexico, ensured basic protections for NAFTA investors, and provided a mechanism for the settlement of disputes between investors and a NAFTA country. NAFTA provided for national and \"nondiscriminatory treatment\" for foreign investment by NAFTA parties in certain sectors of other NAFTA countries. The agreement included country-specific liberalization commitments and exceptions to national treatment. Exemptions from NAFTA included the energy sector in Mexico, in which the Mexican government reserved the right to prohibit private investment or foreign participation. Services Trade . NAFTA services provisions established a set of basic rules and obligations in services trade among partner countries. The agreement granted services providers certain rights concerning nondiscriminatory treatment, cross-border sales and entry, investment, and access to information. However, there were certain exclusions and reservations by each country. These included maritime shipping (United States), film and publishing (Canada), and oil and gas drilling (Mexico). NAFTA liberalized certain service sectors in Mexico, particularly financial services, which significantly opened its banking sector. Financial and Telecommunications S ervices . Under NAFTA, Canada extended an exemption granted to the United States, under the CUSFTA, to Mexico in which Mexican banks would not be subject to Canadian investment restrictions. In turn, Mexico agreed to permit financial firms from another NAFTA country to establish financial institutions in Mexico, subject to certain market-share limits applied during a transition period ending by the year 2000. In telecommunications, NAFTA partners agreed to exclude provision of, but not the use of, basic telecommunications services. NAFTA granted a \"bill of rights\" for the providers and users of telecommunications services, including access to public telecommunications services; connection to private lines that reflect economic costs and available on a flat-rate pricing basis; and the right to choose, purchase, or lease terminal equipment best suited to their needs. NAFTA did not require parties to authorize a person of another NAFTA country to provide or operate telecommunications transport networks or services. Nor did it bar a party from maintaining a monopoly provider of public networks or services, such as Telmex, Mexico's dominant telecommunications company. Intellectual Property Rights (IPR) Protection . NAFTA was the first U.S. FTA to include IPR protection provisions. It built upon the then-ongoing Uruguay Round negotiations that would create the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement in the WTO and on various existing international intellectual property treaties. The agreement set specific enforceable commitments by NAFTA parties regarding the protection of copyrights, patents, trademarks, and trade secrets, among other provisions. Dispute Resolution . NAFTA's provisions for preventing and settling disputes regarding enforcement of commitments under the agreement were built upon provisions in the CUSFTA. NAFTA created a system of arbitration for resolving disputes that included initial consultations, taking the issue to the NAFTA Trade Commission, or going through arbitral panel proceedings. NAFTA included separate dispute settlement provisions for addressing disputes related to investment and over antidumping and countervailing duty determinations. Government Procurement . NAFTA opened up a significant portion of federal government procurement in each country on a nondiscriminatory basis to suppliers from other NAFTA countries for goods and services. It contains some limitations for procurement by state-owned enterprises. Labor and Environment . NAFTA marked the first time that labor and environmental provisions were associated with an FTA. For many, it represented an opportunity for establishing a new type of relationship among NAFTA partners. Labor and environmental provisions were included in separate side agreements. They included language to promote cooperation on labor and environmental matters as well as provisions to address a party's failure to enforce its own labor and environmental laws. Perhaps most notable were the side agreements' dispute settlement processes that, as a last resort, may impose monetary assessments and sanctions to address a party's failure to enforce its laws."], "subsections": []}, {"section_title": "Trade Trends", "paragraphs": ["U.S. trade with NAFTA partners increased rapidly once the agreement took effect, increasing more rapidly than trade with most other countries. U.S. total merchandise imports from NAFTA partners increased from $151 billion in 1993 to $614 billion in 2017 (307%), while merchandise exports increased from $142 billion to $525 billion (270%) (see Figure 1 ). The United States had a trade deficit with Canada and Mexico of $89.6 billion in 2017, compared to a deficit of $9.1 billion in 1993. Services trade with NAFTA partners has also increased. The United States had a services trade surplus with Canada and Mexico of $31.4 billion in 2016 (see Figure 2 )."], "subsections": [{"section_title": "Trade in Oil and Gas", "paragraphs": ["Trade in oil and gas is a significant component of trilateral trade, accounting for 7.2% of total U.S. merchandise trade with Canada and Mexico in 2017. As shown in Figure 3 , U.S. oil and gas exports to Canada and Mexico increased from $0.9 billion in 1997 to $13.4 billion in 2017, while imports increased from $22.3 billion to $69.0 billion. If oil and gas products are excluded from the trade balance, the deficit with NAFTA partners is lower than the overall trade deficit. In 2017, the total U.S. merchandise trade deficit with Canada and Mexico was $88.6 billion, while the merchandise deficit without oil and gas products was a significantly lower $33.0 billion."], "subsections": []}, {"section_title": "Trade in Value Added", "paragraphs": ["Conventional measures of international trade do not always reflect the flows of goods and services within global production chains. For example, some auto trade experts claim that auto parts and components may cross the borders of NAFTA countries as many as eight times before being installed in a final assembly plant in a NAFTA country. Traditional trade statistics include the value of the parts every time they cross the border and count the value multiple times. The Organization for Economic Co-operation and Development (OECD) and the World Trade Organization (WTO) developed a Trade in Value Added (TiVA) database, which presents indicators that provide insight into domestic and foreign value added content of gross exports by an exporting industry. These statistics provide a more detailed picture of the location where value is added during the various stages of production. U.S. trade with Canada and Mexico is diverse and complex since a final good sold in the market could have a combination of value added from all three countries, or from other trading partners. The most recent TiVA data available (2011) for trade in goods and services indicate that the conventional measurement puts the total U.S. trade deficit (including goods and services) with NAFTA countries at $135 billion, while the TiVA methodology puts the deficit at $79.8 billion (see Figure 4 )."], "subsections": []}, {"section_title": "Merchandise Trade in Selected Industries", "paragraphs": ["NAFTA removed Mexico's protectionist policies in the auto sector and was instrumental in the integration of the motor vehicle industry in all three countries. The sector experienced some of the most significant changes in trade following the agreement. Motor vehicles and motor vehicle parts rank first among leading exports to and imports from NAFTA countries as shown in Figure 5 . Agriculture trade also expanded after NAFTA, but to a lesser degree than the motor vehicle industry. The trade balance in agriculture also has a far lower trade deficit. Trade trends by sector indicate that NAFTA achieved many of the trade and economic benefits that proponents claimed it would bring, although there have been adjustment costs. It is difficult to isolate the effects of NAFTA to quantify the effects on trade in specific industries because other factors, such as economic growth and currency fluctuations, also affect trade. "], "subsections": []}]}, {"section_title": "U.S. Investment with Canada and Mexico", "paragraphs": ["Foreign direct investment (FDI) has been an integral part of the economic relationship between the United States and NAFTA partners for many years. Two-way investment between Canada and the United States has increased markedly since NAFTA, both in terms of the stock and flow of investment. The United States is the largest single investor in Canada with a stock of FDI into Canada reaching $391.2 billion in 2017, up from a stock of $69.9 billion in 1993 (see Figure 6 ). U.S. investment represents about half of the total stock of FDI in Canada from global investors. The United States was the largest destination for Canadian FDI in 2017 with a stock of $453.1 billion, a significant increase from $40.4 billion in 1993. These trends highlight the changing view of FDI among Canadians, from one that could be considered fearful or hostile to FDI as vehicles of foreign control over the Canadian economy, to one that is more welcoming of new jobs and technologies that result from FDI.", "In Mexico, the United States is the largest source of FDI. The stock of U.S. FDI in Mexico increased from $15.2 billion in 1993 to $109.7 billion in 2017 (see Figure 6 ). Total FDI in Mexico dropped 19% in 2015, mainly due to a decline in investment in the services sector and automotive industry. Other countries in Latin America also experienced similar declines in FDI in 2015. Some economists contend that Mexico's recent economic reforms have added resilience to the Mexican economy and that greater economic growth and investment in Mexico would occur over time as a result. Mexican FDI in the United States, while substantially lower than U.S. investment in Mexico, has also increased rapidly, from $1.2 billion in 1993 to $18.0 billion in 2017."], "subsections": []}]}, {"section_title": "NAFTA Renegotiation Process and TPA", "paragraphs": ["Under Article II of the Constitution, the President has the authority, with the advice and consent of the Senate, to make treaties. Under Article I, Section 8, Congress has the authority to lay and collect duties, and to regulate foreign commerce. The President may seek expedited treatment of the implementing legislation of a renegotiated NAFTA under the Bipartisan Comprehensive Trade Promotion and Accountability Act of 2015 (TPA). NAFTA provides, \"The Parties may agree on any modification of or addition to this Agreement. When so agreed, and approved in accordance with the applicable legal procedures of each party, a modification or addition shall constitute an integral part of the agreement.\" ", "Under TPA, the President must consult with Congress before giving the required 90-day notice of his intention to start negotiations. The Trump Administration's consultations included meetings between U.S. Trade Representative Robert Lighthizer and members of the House Ways and Means Committee and Senate Finance Committee and with members of the House and Senate Advisory Groups on Negotiations. The Office of the United States Trade Representative (USTR) held public hearings and has received more than 12,000 public comments on NAFTA renegotiation.", "In order to use the expedited procedures of TPA, the President must notify and consult with Congress before initiating and during negotiations, and adhere to several reporting requirements following the conclusion of any negotiations resulting in an agreement. The President must conduct the negotiations based on the negotiating objectives set forth by Congress in the 2015 TPA authority. See box below for the dates on which these requirements were or are expected to be met. "], "subsections": []}, {"section_title": "Trade Deficit Reduction", "paragraphs": ["The Trump Administration, for the first time in the negotiating objectives of an FTA, indicated its aim to improve the U.S. trade balance and reduce the trade deficit with NAFTA countries in the renegotiation of NAFTA. The trade balance with NAFTA partners has fluctuated since the agreement entered into force, increasing from $9.1 billion in 1993 to $89.6 billion in 2017. President Trump and some officials within his Administration believe that trade deficits are detrimental to the U.S. economy. USTR Robert Lighthizer stated after the second round of negotiations that while he wanted to negotiate an agreement that is approved by Congress, he also wanted to bring down the trade deficit, as part of his mission, in order to help American workers and farmers. Other critics of NAFTA also argue that U.S. free trade agreements (FTAs) have contributed to rising trade deficits with some trade partners. ", "Economists generally argue that it is not feasible to use trade agreement provisions as a tool to decrease the deficit because trade imbalances are determined by underlying macroeconomic fundamentals, such as a savings-investment imbalance in which the demand for capital in the U.S. economy outstrips the amount of gross savings supplied by households, firms, and the government sector. According to some economists, a more constructive alternative would be to help strengthen Mexico's economy and boost Mexico's imports from the United States. Others contend that FTAs are likely to affect the composition of trade among trade partners, but have little impact on the overall size of the trade deficit. They argue that trade balances are incomplete measures of the comprehensive nature of economic relations between the United States and its trading partners, and maintain that trade imbalances are determined by macroeconomic fundamentals and not by trade policy. ", "From this perspective, it is not clear how the Administration would expect to reduce the trade deficit through the proposed USMCA."], "subsections": []}, {"section_title": "Proposed USMCA", "paragraphs": ["The proposed USMCA, comprising 34 chapters and 12 side letters, retains most of NAFTA's chapters, making notable changes to market access provisions for autos and agriculture products, and to rules and disciplines, such as on investment, government procurement, and IPR. New issues, such as digital trade, state-owned enterprises, anticorruption, and currency misalignment, are also addressed. Because NAFTA is 25 years old, the proposed USMCA could be viewed as an opportunity to include obligations not currently covered in the original text, such as digital trade or more enforceable labor and environmental provisions. The following selective topics provide an overview of proposed USMCA provisions and a comparison to existing NAFTA provisions. "], "subsections": [{"section_title": "Rules of Origin", "paragraphs": ["Rules of origin in NAFTA and other FTAs help ensure that the benefits of the FTA are granted only to goods produced by the parties that are signatories to the FTAs rather than to goods made wholly or in large part in other countries. If a U.S. import does not meet NAFTA rules-of-origin requirements, it will enter the United States under another import program or at U.S. MFN tariff rates. In 2017, 53% of U.S. imports from Canada and Mexico entered duty-free under NAFTA, while 47% entered under normal trade relations. In the case of NAFTA, most goods that contain materials from non-NAFTA countries may also be considered as North American if the materials are sufficiently transformed in the NAFTA region to go through a Harmonized Tariff Schedule (HTS) change in tariff classification (called a \"tariff shift\"). In many cases, goods must have a minimum level of North American content in addition to undergoing a tariff shift. Regional value content may be calculated using either the \"transaction-value\" or the \"net-cost\" method. The transaction-value method, which is simpler, is based on the price of the good, while the net-cost method is based on the total cost of the good less the costs of royalties, sales promotion, and packing and shipping. Producers generally have the option to choose which method they use, with some exceptions, such as the motor vehicle industry, which must use the net-cost method. ", "The U.S. proposal on tightening rules of origin in the motor vehicle industry was viewed as one of the more contentious issues in the negotiations. Please see section below on the \" Motor Vehicle Industry \" for a discussion of the auto rules of origin.", "NAFTA's rules of origin requirements state that if the transaction value method is used, not less than 60 per cent if the good must be of North American content for a good to receive NAFTA benefits. If the net cost method is used, not less than 50 percent if the value of the good must be of North American content. The proposed USMCA maintains these percentages for general imports. As noted below, certain industries such as the motor vehicle industry have specific rules of origin requirements."], "subsections": []}, {"section_title": "Motor Vehicle Industry", "paragraphs": ["NAFTA phased out U.S. tariffs on motor vehicle imports from Mexico and Mexican tariffs on U.S. and Canadian products as long as they met the rules of origin requirements of 62.5% North American content for autos, light trucks, engines and transmissions; and 60% for automotive parts. Some tariffs were eliminated immediately, while others were phased out in periods over 5 to 10 years. The agreement phased out Mexico's restrictive auto decrees, which for many years imposed high import tariffs and investment restrictions in Mexico's auto sector, and opened the Mexican motor vehicle sector to trade with and investment from the United States. ", "NAFTA and the elimination of Mexican trade barriers liberalized North American motor vehicle trade and was instrumental in the integration of the North American motor vehicle industry. North American motor vehicle manufacturing is now highly integrated, with major Asia- and Europe-based automakers constructing their own supply chains within the region. The major recent growth in the North American market occurred largely in Mexico, which now accounts for about 20% of total continental vehicle production. In general, recent investments in U.S. and Canadian assembly plants have involved modernization or expansion of existing facilities, while Mexico has seen new assembly plants. ", "The proposed USMCA would tighten auto rules of origin by including", "new motor vehicle rules of origin and procedures, including product-specific rules, and requiring 75% North American content; for the first time in a trade agreement, wage requirements stipulating 40%-45% of North American auto content be made by workers earning at least $16 per hour; a requirement that 70% of a vehicle's steel and aluminum must originate in North America; and a provision aiming to streamline the enforcement of manufacturers' rules of origin certification requirements. ", "In addition, side letters would exempt from potential Section 232 tariffs, which are being investigated by the Department of Commerce , the following items from Canada and Mexico:", "2.6 million passenger vehicles each from Canada and Mexico on an annual basis; light trucks imported from Canada or Mexico; and auto part imports amounting to U.S. $32.4 billion from Canada and U.S. $108 billion from Mexico in declared customs value in any calendar year.", "During the negotiations, vehicle and parts manufacturers generally supported retaining the current rules of origin under NAFTA, whereas labor groups sought to require a higher percentage of regional content, which they believe would reduce the share of parts produced in non-NAFTA countries. Some observers state that \"it is unclear\" whether the auto rules of origin in the proposed USMCA meet the requirements under the World Trade Organization's Article XXIV of the General Agreement on Tariffs and Trade. Article XXIV states that duties and other commerce regulations between parties of a customs union \"should not on the whole be higher or more restrictive\" than the rate of the duties and regulations \"applicable in the constituent territories prior to the formation of such union.\"", "Some economists and other experts believe that the higher North American content requirement in the proposed USMCA could have unintended consequences. They contend that trade in motor vehicles within North America may not be able to meet the new requirements and would be ineligible for USMCA benefits. Such experts say that it would be more cost efficient for manufacturers of motor vehicles and motor vehicle parts to pay the MFN tariff of about 2.5%, rather than meet the cumbersome rules-of-origin requirements. They argue that a change in rules poses a significant risk to North American auto production, because it is likely that manufacturers would not have the supply to meet the new rules and would not be able to remain competitive in the market. Auto manufacturers in Mexico are concerned that they may lose market share to Asian manufacturers. For example, because the rules of origin in the U.S.-South Korea FTA are much lower than those in the USMCA, it is possible that motor vehicle producers would shift production to South Korea, especially in light trucks. ", "Even with these concerns, motor vehicle producers, in general, support the conclusion of the negotiations for the proposed USMCA and its ratification. Some automakers say that complying with the new rules of origin may be cumbersome, but probably manageable. Some also contend that production in the United States has the potential to increase under the agreement, although it is not clear whether this would translate into more U.S. jobs. Auto industry representatives reacted favorably to the conclusion of the negotiations and generally agree with changes modernizing the agreement, such as updating border customs procedures (i.e., trade facilitation measures), digital trade provisions, and IPR protection. ", "The United Auto Workers union (UAW) called for the renegotiation of NAFTA to provide more benefits to workers in all three signatory countries. The UAW supports a strengthening of labor and environmental provisions, ensuring \"fair\" trade among all NAFTA parties through more enforceable provisions, and enhancing provisions on worker rights protection. After the announcement of the proposed USMCA, the UAW issued a statement that it would need time to evaluate the details of the agreement before determining whether the \"agreement will protect our UAW jobs and the living standards of all Americans.\""], "subsections": []}, {"section_title": "Agriculture65", "paragraphs": ["NAFTA's agriculture provisions include tariff and quota elimination, sanitary and phytosanitary (SPS) measures, rules of origin, and grade and quality standards. NAFTA set separate bilateral undertakings on cross-border trade in agriculture, one between Canada and Mexico, and the other between Mexico and the United States. As a general matter, CUSFTA provisions continued to apply on trade with Canada. Under CUSFTA, Canada excluded dairy, poultry, and eggs for tariff elimination. In return, the United States excluded dairy, sugar, cotton, tobacco, peanuts, and peanut butter. Although NAFTA resulted in tariff elimination for most agricultural products and redefined import quotas for some commodities as tariff-rate quotas (TRQs), some products are still subject to high above-quota tariffs, such as U.S. dairy and poultry exports to Canada. Canada maintains a supply-management system for these sectors that effectively limits U.S. market access. These products were also exempt from Canada-Mexico trade liberalization. NAFTA also addressed SPS measures and other types of nontariff barriers that may limit agricultural trade. SPS regulations continue to be regarded by agricultural exporters as challenging to trade and disruptive to integrated supply chains.", "In conjunction with agricultural reforms underway in Mexico at the time, NAFTA eliminated most nontariff barriers in agricultural trade with Mexico, including import licensing requirements, through their conversion either to TRQs or to ordinary tariffs. Tariffs were phased out over 15 years with sensitive products such as sugar and corn receiving the longest phase-out periods. Approximately one-half of U.S.-Mexico agricultural trade became duty-free when the agreement went into effect. Prior to NAFTA, most tariffs in agricultural trade between the United States and Mexico, on average, were fairly low, though some U.S. exports to Mexico faced tariffs as high as 12%. However, approximately one-fourth of U.S. agricultural exports to Mexico (by value) were subjected to restrictive import licensing requirements. ", "In the USMCA negotiations on agriculture, a principal U.S. demand was for additional market access to Canada's supply-management-restricted dairy, poultry, and egg markets. This system places a tariff-rate quota on imports of those products into Canada. While most of the in-quota tariff levied is 0%, out of quota tariffs (TRQ) can reach 313.5% for dairy products. Canada was not willing to abolish supply management, but did allow a yearly expansion of the TRQ for dairy products; an expansion of duty-free quota for poultry from 47,000 tons to 57,000 tons in year six, and a subsequent 1% annual increase for 10 years. The TRQ for eggs would increase to 10 million dozen annually. In return, the United States is providing more access to Canadian dairy, sugar, peanuts and cotton. U.S. tariffs for peanuts and cotton are to be phased-out over five years, and TRQs for dairy and sugar products are to be increased. The United States also negotiated changes to Canadian wheat grading system and providing national treatment for beer, wine, and spirits labeling and sales. A U.S. proposal to allow trade remedies to be used for seasonal produce was not adopted.", "USMCA partners agreed to several other non-market access provision in the agriculture and sanitary and phytosanitary standards chapter. These include", "regulatory alignment among the parties; protection for proprietary formulas for pre-packaged foods and food additives (limited to furthering \"legitimate objective[s],\" which is not defined); and SPS rules based on \"relevant scientific principles;\" greater transparency in SPS rules.", "Biotechnology provisions affecting agriculture include", "transparent and timely application and approval process for crops using biotechnology; procedures for import shipments containing a low-level presence of an unapproved crop produced with biotechnology; and establishment of a working group on agricultural biotechnology."], "subsections": []}, {"section_title": "Customs and Trade Facilitation", "paragraphs": ["Customs and trade facilitation relates to the efficient flow of legally traded goods in and out of the United States. Enforcement of U.S. trade laws and import security are other important components of customs operations at the border. NAFTA's chapter on customs procedures includes provisions on certificates of origin, administration and enforcement, and customs regulation and cooperation. More recent agreements have modernized provisions in regard to customs procedures and trade facilitation. The World Trade Organization (WTO) Trade Facilitation Agreement (TFA), the newest international trade agreement in the WTO, entered into force on February 22, 2017. Two-thirds of WTO members, including the United States, Canada, and Mexico, ratified the multilateral agreement. Trade facilitation measures aim to simplify and streamline customs procedures to allow the easier flow of trade across borders and thereby reduce the costs of trade. There is no precise definition of trade facilitation, even in the WTO agreements. Trade facilitation can be defined narrowly as improving administrative procedures at the border or more broadly to also encompass behind-the-border measures and regulations. The TFA aims to address trade barriers, such as lack of customs procedural transparency and overly burdensome documentation requirements.", "In the proposed USMCA, parties affirmed their rights and obligations under the TFA of the WTO. USMCA provisions also include commitments to administer customs procedures in such ways as to facilitate trade or the transit of a good while supporting compliance with domestic laws and regulations. Parties commit to create a Trade Facilitation Committee to cooperate on trade facilitation and adopt additional measures if necessary. Other provisions include measures for online publication of information and resources related to trade facilitation, communications mechanisms, establishment of enquiry points to respond to enquiries by interested persons, rules for issuing written advance customs rulings, procedures for efficient release of goods in order to facilitate trade between the parties, expedited customs procedures for express shipments, automated risk analysis and management procedures, creation of a single-access window system to enable electronic submission through a single entry point for importation into the territory of another party, and transparency procedures. Given the magnitude and frequency of U.S. trade with NAFTA partners, more updated customs provisions in NAFTA could have a significant impact on companies engaged in trilateral trade.", "The USMCA would set d e m inimis customs threshold for duty free treatment at US$800 for the United States, C$150 (about US$117) for Canada, and US$117 for Mexico. Tax-free threshold would be set at C$40 (about US$31) for Canada and US$50 for Mexico. Proponents of the higher de minimis thresholds contend that these changes will facilitate North American trade by allowing low-value parcels to be shipped across international borders tax and tariff free and with simple customs forms. Some Members and other stakeholders have raised concerns about a footnote that would allow the United States to decrease its threshold to a reciprocal de minimis amount in an amount no greater than the Canadian or Mexican threshold. They contend that lowering the current U.S. threshold could come at a cost to U.S. consumers and express carriers. "], "subsections": []}, {"section_title": "Energy", "paragraphs": ["NAFTA includes explicit country-specific exceptions and reservations, including the energy sector in Mexico. In NAFTA's energy chapter, the three parties confirmed respect for their constitutions. This was of particular importance for Mexico and its 1917 Constitution, which established Mexican national ownership of all hydrocarbons resources. Under NAFTA, the Mexican government reserved to itself strategic activities, including investment and provisions in such activities, related to the exploration and exploitation of crude oil, natural gas, and basic petrochemicals. Mexico also reserved the right to provide electricity as a public service within the country. Despite these exclusions from NAFTA, energy remains a central component of U.S.-Mexico trade. ", "The proposed USMCA does not have an energy chapter and moves some of NAFTA's energy provisions to other parts of the agreement. The USMCA adds a new chapter specifically recognizing Mexico's constitutional prohibitions on foreign investment or ownership of Mexico's energy sector. Other provisions in the USMCA, such as the investor-state dispute settlement (ISDS) provisions in regard to Mexico's energy sector, would help protect private U.S. energy projects in Mexico. ", "In 2013, the Mexican Congress approved the Pe\u00f1a Nieto Administration's constitutional reform proposals for the energy sector. The reforms restructured Mexico's state-owned oil company, PEMEX, as a \"state productive company,\" which means that despite being owned by the state, it competes in the market like any private company. It has operational autonomy, in addition to its own assets. These reforms opened Mexico's energy sector to production-sharing contracts with private and foreign investors while keeping the ownership of Mexico's hydrocarbons under state control. Following the reforms, Mexico adopted new procurement rules to increase efficiency and effectiveness in the procurement process. In the NAFTA renegotiations, U.S. industry groups called for the United States to use NAFTA's so-called ratchet mechanism in regard to Mexico's energy reforms, which would prevent the reforms from being reversed and grant protection to U.S. investors. ", "In regard to Canada, negotiators addressed a so-called \"proportionality\" provision contained in the energy chapters of both CUSFTA and NAFTA, which would be dropped under the proposed USMCA. This provision provides that Canadian restrictions on energy exports cannot reduce the proportion of exports delivered to the United States. The chapter also prohibits pricing discrimination between domestic consumption and exports to the United States. Some Canadians maintain that this provision restricts the ability of Canada to make energy policy decisions and may seek to change this provision. "], "subsections": []}, {"section_title": "Government Procurement", "paragraphs": ["The NAFTA government procurement chapter sets standards and parameters for government purchases of goods and services. Government procurement chapters typically extend national and nondiscriminatory treatment among parties and promote transparency in the tendering process. The schedule of commitments, set out in an annex to the chapter, provides opportunities for firms of each nation to bid on certain contracts for specified government agencies over a set monetary threshold on a reciprocal basis. The United States and Canada also have made certain government procurement opportunities available through similar obligations in the plurilateral WTO Government Procurement Agreement (GPA). Mexico is currently not a member of the GPA.", "Supporters of expanded procurement opportunities in FTAs argue that the reciprocal nature of the government procurement provisions in FTAs allows U.S. firms access to major government procurement market opportunities overseas. In addition, supporters claim open government procurement markets at home allow government entities to accept bids from partner country suppliers, potentially making more efficient use of public funds.", "Other stakeholders contend that public procurement should primarily benefit domestic industries. The Buy American Act of 1933, as amended, limits the ability of foreign companies to bid on government procurements of manufactured and construction products. Buy American provisions periodically are proposed for legislation such as infrastructure projects requiring government purchases of iron, steel, and manufactured products. Such restrictions are waived for products from countries with which the United States has FTAs or to countries belonging to the GPA. The Trump Administration has made it a priority to support strong Buy American and Hire American policies in government procurement and has sought to minimize government procurement commitments with other parties.", "The proposed USMCA government procurement chapter only applies to procurement between Mexico and the United States. It is the first U.S. FTA not to include procurement commitments for all parties. Procurement opportunities between the United States and Canada continue to be covered by the plurilateral WTO GPA. The proposed USMCA carries over much of the NAFTA government procurement chapter's coverage for U.S.-Mexico procurement. It covers largely the same entities and maintains the same thresholds as NAFTA, as adjusted annually for inflation. Core provisions", "promote transparency in the tendering process through online tender information and descriptions; provide online application and documentation processes without cost to the applicant; provide for publication of post-award explanations of procurement decisions; exclude government procurement from the financial services chapter; exclude textile and apparel procured by the Transportation Security Administration (TSA) under the \"Kissell Amendment;\" allow Mexico to set aside annual procurement contracts of $2.328 billion, annually adjusted for inflation, to Mexican suppliers; allow for coverage of build-operate-transfer (BOT) contracts (As Mexico has taken an exception to this provision, the United States will extend this coverage to Mexico when Mexico reciprocates.)", "The exclusion of Canada is a break from previous government procurement chapters in U.S. FTAs. As noted above, procurement opportunities in each country for U.S. and Canadian firms will continue to be covered by the GPA, which was revised and updated in 2014. The national treatment and transparency provisions are common to both the GPA and the proposed USMCA, as are the provisions modernizing the agreement to provide for online tendering. The differences primarily are with the schedules and the thresholds. In some areas, the GPA provides a more open procurement market. For example, the GPA covers 75 U.S. government entities, including 35 U.S. states, whereas NAFTA covers 56 federal entities and does not cover state procurement. The GPA has a higher monetary threshold than NAFTA for procurement of goods and services ($180,000 v. $80,317), but a lower construction procurement threshold ($6.9 million v. $10.4 million). In addition, while the proposed USMCA uses a negative list approach for services (all services included unless specifically excluded), Canada\u2014though not the United States\u2014maintains a positive list (only services specifically enumerated are covered) for services in the GPA. Government procurement between Canada and Mexico will continue to be covered by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP or TPP-11). ", "Some industry groups have criticized the exclusion of Canada and financial services from the agreement. The Automotive and Capital Goods Advisory Committee (ITAC-2) maintained that excluding countries sets a bad precedent for future FTAs, that there was a \"not inconceivable\" chance that the United States could withdraw from the GPA, leaving no reciprocal access to the Canadian procurement market, and that other countries with FTAs with Canada, such as the EU and the TPP-11, would have greater access to the Canadian procurement market than that provided by the GPA. The Services ITAC (ITAC-10) expressed concern that continued access to government procurement for financial services under USMCA has been called into doubt by the exclusion of that sector from the agreement. ITAC-10 noted that, under NAFTA coverage, U.S. insurance providers cover two-thirds of Mexican government employees. "], "subsections": []}, {"section_title": "Investment", "paragraphs": ["NAFTA removed significant investment barriers, ensured basic protections for NAFTA investors, and provided a mechanism for the settlement of disputes between investors and a NAFTA country. U.S. FTAs, including NAFTA and bilateral investment treaties (BITs) maintain core investor protections reflecting U.S. law, such as obligations for governments to provide investors with nondiscriminatory treatment, a minimum standard of treatment, and protections against uncompensated expropriation, among other provisions. Since NAFTA, investment chapters in FTAs and the U.S. model BIT clarified certain provisions, including commitments to affirm more clearly a government's right to regulate for environmental, health, and other public policy objectives. ", "The proposed USMCA provisions, in general, largely track those of NAFTA, with the exception of the elimination of some investor-state dispute settlement (ISDS) provisions in NAFTA's investment chapter (See \" Investor-State Dispute Settlement (ISDS) \"). During the negotiations of the proposed USMCA, the U.S. business community strongly opposed reported U.S. proposals to scale back or eliminate NAFTA ISDS provisions. The American Petroleum Institute (API), for example, stated that strong ISDS provisions protect U.S. business interests and that weakening or eliminating NAFTA's ISDS would \"undermine U.S. energy security, investment protections and our global energy leadership.\" On the other hand, U.S. labor and civil society groups welcomed the Administration's more skeptical approach to ISDS. The 2015 TPA called for \"providing meaningful procedures for resolving investment disputes,\" which may affect congressional consideration of an agreement. ", "The proposed USMCA clarifies language related to national treatment and most-favored-nation treatment. In determining whether an investment is afforded national treatment in the context of expropriation, a \"like circumstances\" analysis can be used. Under the article, \"like circumstances\" depends on the totality of the circumstances including whether the relevant treatment distinguishes between investors or investments on the basis of legitimate public welfare objectives.\""], "subsections": [{"section_title": "Minimum Standard of Treatment (MST)", "paragraphs": ["The proposed USMCA, like NAFTA, requires parties to provide MST to investments in accordance with applicable customary international law, including fair and equitable treatment and full protection and security. It defines the applicable standard of treatment for a covered investment as the customary international law MST of aliens, and that \"fair and equitable treatment\" and \"full protection and security\" do not create additional substantive rights. However, the proposed USMCA clarifies that a party's action (or inaction) that may be inconsistent with investor expectations is not, on its own, a breach of MST, even if loss or damage to the investment follows. "], "subsections": []}, {"section_title": "Performance Requirements", "paragraphs": ["The proposed USMCA would prohibit parties from imposing specific \"performance requirements\" in connection with an investment or related to the receipt of an advantage in connection with it. These include prohibitions on performance requirements such as to export a given level or percentage of goods, achieve a given level or percentage of domestic content, or transfer a particular technology. A new feature not in NAFTA includes prohibitions on performance requirements related to the purchase, use, or according of a preference to a technology of the party (or of a person of the party), and related to certain royalties and license contracts. "], "subsections": []}, {"section_title": "Denial of Benefits", "paragraphs": ["The proposed USMCA's denial of benefits article, among other things, permits a party to deny the investment chapter's benefits to an investor that is an enterprise of another party (and to the investments of that investor) if that enterprise is owned or controlled by a person of a non-party or of the denying party or does not have \"substantial business activities\" in the territory of any party other than the party denying benefits. This article presumably is intended to address some stakeholder concerns that the chapter could be used to afford shell companies access to its protections."], "subsections": []}, {"section_title": "Government Right to Regulate", "paragraphs": ["Unlike NAFTA, the proposed USMCA contains a provision stating that, except in rare circumstances, nondiscriminatory regulatory action by a party to protect legitimate public welfare objectives (e.g., in public health, safety, and the environment) do not constitute indirect expropriation. Debate exists about what exactly are \"rare circumstances.\" The proposed USMCA includes a statement that nothing in the Investment Chapter shall be construed to prevent a government from regulating in a manner sensitive to \"health, environmental, and other regulatory objectives,\" as long as the action taken is otherwise consistent with the chapter. Previous U.S. FTAs, including NAFTA, limited the affirmation of a government's right to regulate to \"environmental concerns.\" "], "subsections": []}, {"section_title": "Investor-State Dispute Settlement (ISDS)", "paragraphs": ["ISDS has been a controversial aspect of the NAFTA investment chapter. It is a form of binding arbitration that allows private investors to pursue claims against sovereign nations for alleged violations of the investment provisions in trade agreements. It is included in NAFTA and nearly all other U.S. trade agreements that have been enacted since then, and is also a core provision in U.S. bilateral investment treaties (BITs). Generally, ISDS tribunals are composed of three lawyer-arbitrators: one chosen by the claimant investor, one by the respondent country, and one by mutual decision between the two parties. Most cases follow the rules of the World Bank's Centre for Settlement for Investor Dispute or the United Nations Commission on International Trade Law. Fifty-nine ISDS actions have been adjudicated under NAFTA, with the majority coming after 2004.", "Supporters argue that ISDS is important for protecting investors from discriminatory treatment and are modeled after U.S. law. They also argue that trade agreements do not prevent governments from regulating in the public interest, with clear exceptions for these actions, as well as for national security and for prudential reasons; ISDS remedies are limited to monetary penalties; and ISDS cannot force governments to change their laws or regulations. Critics counter that companies use ISDS to restrict governments' ability to regulate in the public interest (such as for environmental or health reasons), leading to \"regulatory chilling\" even if an ISDS outcome is not in a company's favor. The United States, to date, has never lost a claim brought against it under ISDS in a U.S. investment agreement. ", "ISDS provisions in the proposed USMCA would substantially revise longstanding provisions in NAFTA, other U.S. FTAs, and current BITs that were actively sought by past Administrations. Significantly, ISDS between Canada and the United States is ended under the new agreement. U.S. and Mexican investors would not be able to bring arbitration claims under USMCA against Canada, nor would Canadian investors bring such claims against the United States or Mexico. With respect to Mexico and the United States, the proposed USMCA would limit ISDS to claimants regarding government contracts in natural gas, power generation, infrastructure, transportation, and telecommunications sectors; or in other sectors provided the claimant exhausts national remedies first. Canada and Mexico are maintaining ISDS among themselves through CPTPP. ", "Under the proposed USMCA, ISDS is continued in three circumstances: ", "Legacy claims from existing investments are eligible for arbitration under NAFTA ISDS provisions for three years from the date of NAFTA termination; Direct expropriation claims, including claims of violation of national treatment, would continue to be eligible for arbitration for United States and Mexican investors, provided that they exhaust domestic remedies first. Indirect expropriation, in which an action or series of actions by a Party has an effect equivalent to direct expropriation without formal transfer of title or outright seizure, is no longer covered; and Government contracts in certain covered sectors (oil and gas, power generation, telecommunications, transportation, and infrastructure) would be eligible for arbitration under USMCA ISDS. This use of ISDS is designed to protect investors in heavily regulated industries whose investments may be affected by the presence of state-owned enterprises in the sector."], "subsections": []}]}, {"section_title": "Services", "paragraphs": ["The United States has a highly competitive services sector and has made services trade liberalization a priority in its negotiations of FTAs, including NAFTA and the proposed USMCA. NAFTA covers core obligations in services trade in its own chapter, but because of the complexity of the issues, it also covers services trade in other related chapters, including financial services and telecommunications. NAFTA contained the first \"negative list\" services chapter in a U.S. trade agreement, and it is maintained in the proposed USMCA. With a negative list, all services are covered under the agreement unless specifically excluded from it, or unless NAFTA parties reserved a service to domestic providers at the time of the agreement. This approach generally is considered to be more comprehensive than the \"positive list approach\" used in the WTO General Agreement on Trade in Services (GATS), which requires each covered service to be identified. The negative list approach also implies that any new type of service that is developed after the agreement enters into force is automatically covered unless it is specifically excluded. Key provisions of the services chapter in NAFTA and the proposed USMCA include the following: ", "nondiscriminatory treatment of services from partner-country providers in like circumstances, including national treatment and MFN treatment; no limitations on the number of service suppliers, the total value or volume of services provided, the number of persons employed, or the types of legal entities or joint ventures that a foreign service supplier may employ; prohibition on locality requirements that a service provider maintain a commercial presence in the country of the buyer; support of mutual recognition of professional qualifications for certification of service providers; transparency in the development and application of government regulations; and allowance for payments and transfers of capital flows \"freely and without delay\" that relate to the provision of services, with permissible restrictions in some cases for bankruptcy and criminal offences. "], "subsections": [{"section_title": "Express Delivery", "paragraphs": ["NAFTA did not contain commitments on express delivery; however, the United States made market access of express delivery services a priority in its more recent FTA negotiations. The proposed USMCA addresses express delivery in a chapter annex. The commitments on express delivery focus, in particular, on cases where a government-owned and operated postal system provides express delivery services competing with private sector providers. The proposed USMCA stipulates that the postal system cannot use revenue generated from its monopoly power in providing postal services to cross-subsidize an express delivery service. The proposed USMCA would also require independence between express delivery regulators and providers, prohibit the requirement of providing universal postal service as a prerequisite for express delivery, and prohibit fees on express delivery providers for the purpose of funding other such providers. In addition, the proposed USMCA specified a threshold level for the customs de minimi s , a critical commitment for express delivery providers and small businesses as shipments valued below the de minimis receive expedited customs treatment and pay no duties or taxes. "], "subsections": []}, {"section_title": "Temporary Entry for Business Purposes", "paragraphs": ["In addition to cross-border trade in services, a person supplying the service may travel to and provide certain services in the location where the service is performed. NAFTA includes commitments on temporary entry for service professionals, such as accountants, architects, legal, and medical providers, and other business personnel, in order to facilitate such trade. As temporary entry has been a controversial issue in the context of previous trade agreements, the proposed USMCA chapter on temporary entry largely replicates NAFTA's provisions. The proposed USMCA does not place new restrictions on the number of entrants or expand the list of eligible professionals, as many businesses and other service providers had hoped."], "subsections": []}]}, {"section_title": "Financial Services", "paragraphs": ["Financial services, including insurance and insurance-related services, banking and related services, as well as auxiliary services of a financial nature, are addressed in a separate USMCA chapter as in previous U.S. FTAs. The financial services chapter adapts relevant provisions from the foreign investment chapter and the cross-border trade in services chapter. The prudential exception in NAFTA and the proposed USMCA provides that nothing in the FTA would prevent a party to the agreement from imposing measures to ensure the integrity and stability of the financial system. As with NAFTA and other FTAs, the proposed USMCA distinguishes between financial services traded across borders and those sold by a provider with a commercial presence in the home country of the buyer. In the case of providers with a foreign commercial presence, the USMCA applies the negative list approach with commitments applying generally except where noted; in the case of cross-border trade, the proposed language limits coverage to a positive list of specific banking and insurance services as defined by each country. ", "Perhaps the provision in the proposed USMCA that has drawn the most attention is the prohibition on data localization requirements. Financial services firms rely on cross-border data flows to ensure data security, create efficiencies and cost savings through economies of scale, and utilize internet cloud services that are often provided by U.S. technology firms. Localization requirements imposed by countries could require companies to have in-country servers and data centers to store data. These types of regulations can create additional costs and may serve as a deterrent for firms seeking to enter new markets or a disguised barrier to trade. Localization supporters, though, claim they increase local control, privacy protection, and data security. ", "While NAFTA allowed the transfer of data in and out of a party in the ordinary course of business, TPP was the first proposed U.S. FTA to prohibit data localization for e-commerce applications. However, it specifically carved out financial services, based on the apprehension of regulatory authorities that such data may not be available during time of crisis. The proposed USMCA strengthened the language to protect the free flow of data and removes the carve-out provided that a Party's financial regulatory authorities have \"for regulatory and supervisory purposes, immediate, direct, complete, and ongoing access\" to data located in another party's territory. Canada has a one-year transition period to implement the data localization prohibition.", "The proposed USMCA also includes commitments on electronic payment card services. It requires that each country in the agreement allow for the supply, by persons of other parties, of electronic payment services for payment card transactions, defined by each country, generally including credit and debit cards. The provisions on card services would, however, allow for certain preconditions of access, including requiring a representative or office within country. ", "Other new USMCA financial services provisions would", "exclude government procurement from financial services disciplines; modify investor-state dispute settlement (ISDS) through a bilateral annex on Mexico-United States Investment Disputes in Financial Services; allow a financial institution from one party with a presence in a second party to have access to the latter's payment and clearance system; and protect source code and algorithms and a prohibition on forced technology transfer in the digital trade section."], "subsections": []}, {"section_title": "Telecommunications", "paragraphs": ["The telecommunication chapter in NAFTA requires regulatory transparency; interconnection among providers; reasonable and nondiscriminatory access to network infrastructure and government-controlled resources like spectrum bandwidth for reasonable rates; and protection of the supplier's options for employing technology. The proposed USMCA telecommunications chapter adopts these provisions and would be the first U.S. FTA to cover mobile service providers. The chapter would promote cooperation on charges for international roaming services and allow regulation for mobile roaming service rates. Other provisions aim to ensure that suppliers can resell and unbundle services, and that suppliers can furnish value-added services. The telecommunications chapter does not cover television or radio broadcast or cable suppliers. It also promotes the independence of regulators. It does not contain the provision in NAFTA recognizing the importance of international standards for global compatibility and interoperability.", "The chapter has the effect of binding Mexico to its 2013 Constitutional reforms in telecommunications, by guaranteeing the independence of the regulatory commission, nondiscriminatory repurchase rates, and interconnection obligations. The proposed USMCA chapter does not affect Canadian restrictions on foreign ownership of telecommunications common carriers. "], "subsections": []}, {"section_title": "Digital Trade", "paragraphs": ["NAFTA was negotiated and came into effect at the dawn of the consumer Internet age, and it did not contain provisions to address barriers and rules and disciplines on digital trade. Congress established principal negotiating objectives in TPA-2015 on digital trade in goods and services, as well as on cross-border data flows. The objectives include equal treatment of electronically delivered goods and services, as compared to physical products, protection of cross-border data flows, and prevention of data localization regulations, as well as prohibitions on duties on electronic transmissions. ", "The proposed USMCA digital trade chapter broadly covers all industries, but explicitly excludes government procurement or provisions on data held or processed by governments of the parties. It also does not include financial services, which has separate obligations in the financial services chapter. Overall, the chapter aims to promote digital trade and the free flow of information, and to ensure an open Internet. While the majority of the obligations related to digital trade are found in the digital trade chapter, there are relevant provisions in other chapters, including financial services, IPR, and telecommunications.", "Key provisions of the proposed USMCA digital trade chapter", "ensure nondiscriminatory treatment of digital products; prohibit cross-border data flows restrictions and data localization requirements; prohibit requirements for source code or algorithm disclosure or transfer as a condition for market access, with exceptions; prohibit customs duties or other charges for electronically transmitted products; require parties to have online consumer protection and anti-spam laws, and a legal framework on privacy; promote cooperation on cybersecurity, and risk-based strategies and consensus-based standards over prescriptive regulation in combating cybersecurity risks and events; prohibit imposition of liability for harms against Internet services providers or users related to information stored, processed, transmitted, distributed, or made available by the service, with the exclusion of ISP liability for intellectual property rights (IPR) infringement; and promote publication of open government data in machine readable format for public usage."], "subsections": []}, {"section_title": "Intellectual Property Rights (IPR)", "paragraphs": ["NAFTA was the first FTA to contain an IPR chapter, which in turn was the model for the WTO Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement that came into effect a year later in 1995. IPR chapters in trade agreements include provisions on patents, copyrights, trademarks, trade secrets, geographical indications (GIs), and enforcement. NAFTA predated the widespread use of the commercial Internet, and subsequent IPR chapters in U.S. FTAs contain obligations more extensive than those found in TRIPS and NAFTA. In general, they have followed the TPA negotiating objective that agreements should \"reflect a standard of protection similar to that found in U.S. law.\" The President's NAFTA renegotiation objectives reflect TPA-2015 and the aims of U.S. negotiators in the TPP (although in some instances the negotiated TPP outcomes were less extensive). The United States achieved most of what it sought in the proposed USMCA and some results that went beyond TPP:"], "subsections": [{"section_title": "Patents", "paragraphs": ["Patents protect new innovations, such as pharmaceutical products, chemical processes, business technologies, and computer software. These provisions largely track provisions in more recent U.S. FTAs, including TPP:"], "subsections": []}, {"section_title": "Copyrights", "paragraphs": ["Copyrights provide creators of artistic and literary works with the exclusive right to authorize or prohibit others from reproducing, communicating, or distributing their works. Debate exists over balancing copyright protections while protecting the free flow of information, with digital trade raising new issues:", "Extension of copyright terms. Extends copyright terms from 50 years after death of the author, or 50 years from the publication (the WTO standard) to a 70-year period. Among the USMCA parties, only Canada maintains the 50-year term. Technological Protection Measures. Prohibits circumventing technological protection measures (TPMs), such as encryption, or altering or disabling rights management information (RMI). Limitation and Exceptions. Confines \"limitations and exceptions to \"certain special cases that do not conflict with the normal exploitation of the work\u2026.and do not unreasonably prejudice the legitimate interests of the rights holder.\" The proposed USMCA does not contain additional language that was in the TPP to \"endeavor to achieve an appropriate balance\" between users and rights holders in their copyright systems, including digitally, through exceptions for legitimate purposes (e.g., criticism, comment, news reporting, teaching, research). The \"appropriate balance\" language speaks to \"fair use,\" exceptions in copyright law for media, research, and teaching. Rights-holder groups have criticized such provisions in the FTA context, while open Internet groups have sought to have the fair-use provision inserted into the proposed USMCA. \" Safe harbor . \" Protects internet service providers (ISPs) against liability for digital copyright infringement, provided ISPs address intermediary copyright liability through \"notice and takedown\" or alternative systems (e.g., \"notice and notice\" in Canada). Rights-holder groups sought to limit what they considered \"overly broad safe harbor provisions,\" while technology and business groups favored retention. "], "subsections": []}, {"section_title": "Trademarks", "paragraphs": ["Trademarks protect distinctive commercial names, marks, and symbols. The proposed USMCA includes provisions on trademark protection and enforcement and provides for the following:", "Sound and Scent Marks. Extends trademark protection to sounds and requires \"best efforts\" to register scents. (Under NAFTA, a party could require that marks be \"visually perceptible\" in order to be registered.) Certification and Collective M arks. Provides trademark protections to \"certification marks\" (e.g., such as the Underwriters' Laboratory or Good Housekeeping Seal) and adds protection for \"collective marks.\" Certification marks are usually given for \"compliance with defined standards,\" while collective marks are usually defined as \"signs which distinguish the geographical origin, material, mode of manufacture or other common characteristics of goods or services of different enterprises using the collective mark.\" \u00a0 Well-known Trademarks. Extends specific protections for \"well-known marks\" to dissimilar goods and services, whether or not registered, so long as the use of the mark would indicate a connection between the goods or services and the owner of the well-known mark and the trademark owner's interests are likely to be damaged by the use. Domain Names. Requires each party to have a system for managing its country-code top level domains (ccTLDs) and to make available online public access to a database of contact information for domain-name registrants. The proposed USMCA requires parties to make available appropriate remedies when a person registers or holds, with \"bad faith intent to profit,\" a domain name that is identical or confusingly similar to a trademark. This provision is intended to protect against what is often referred to as \"cybersquatting.\""], "subsections": []}, {"section_title": "Trade Secrets", "paragraphs": ["Trade secrets are confidential business information (e.g., formula, customer list) that are commercially valuable. The proposed USMCA parties agreed to require criminal and civil procedures and penalties for trade secret theft, prohibition on impeding licensing of trade secrets, protections for trade secrets during the litigation process, and penalties for government officials who wrongfully disclose trade secrets, including through cyber theft and by state-owned enterprises (SOEs)."], "subsections": []}, {"section_title": "Geographical Indications (GIs)", "paragraphs": ["GIs are geographical names that protect the quality and reputation of a distinctive product from a region (e.g., Ontario ice wine, Florida oranges). In FTA negotiations, the United States has sought to limit GI protections that can improperly constrain U.S. agricultural market access in other countries by protecting terms viewed as \"common.\" This goal may be complicated by the recent Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union, which provides additional protections for GIs in Canada. The proposed USMCA", "protects GIs for food products that Canada and Mexico have already accepted as a consequence of trade agreements with the European Union; provides transparency and notification requirements, and objection procedures, for new GIs; and sets forth guidelines to determine whether a term is customary in the common language."], "subsections": []}, {"section_title": "IPR Enforcement", "paragraphs": ["Like previous U.S. FTAs, the proposed USMCA commits parties to provide civil, criminal, and other national enforcement for IPR violations, such as copyright enforcement in the digital environment, criminal penalties for trade secret theft and camcording, and ex-officio authority to seize counterfeit trademark and pirated copyright goods at the border. The provisions of the chapter, in turn, are enforceable through the state-to-state dispute settlement chapter."], "subsections": []}, {"section_title": "Cultural Exemption", "paragraphs": ["Since the U.S.-Canada FTA, Canada has taken an exclusion on cultural industries from national treatment and MFN treatment. This exclusion reflects the Canadian government's attempts to promote a distinctly Canadian culture and the fear that, without its support, American culture would come to dominate Canada. Thus, the government imposes Canadian content (\"Cancon\") requirements on radio and television broadcasts, cable and satellite diffusion, the production of audio-visual material, film or video recording, and on various print media. The U.S. entertainment industry, in particular, has long sought to have this provision eliminated. In the end, Canada prevailed and the exclusion remains, although a provision was inserted allowing the United States and Mexico to take reciprocal action. "], "subsections": []}]}, {"section_title": "State-Owned Enterprises (SOEs)", "paragraphs": ["NAFTA includes provisions on SOEs, but they are limited in scope. They allow parties to maintain or establish SOEs, while requiring that any enterprise owned or controlled by a federal, provincial, or state government must act in a manner consistent with that country's NAFTA obligations when exercising regulatory, administrative, or other government authority, such as the granting of licenses. NAFTA committed parties to ensure that any SOEs accord nondiscriminatory treatment in the sale of goods or services to another party's investment in that territory. ", "The proposed USMCA includes a new chapter on SOEs, requiring SOEs to act in accordance with commercial considerations and to provide nondiscriminatory treatment to other USCMA country firms. The provisions update NAFTA by ensuring that SOEs compete on a commercial basis, and that the advantages SOEs receive from their governments, such as subsidies, do not have an adverse impact on U.S. workers and businesses. The renegotiations addressed potential commercial disadvantages to private sector firms from state-supported competitors receiving preferential treatment. ", "U.S. government and business stakeholders raised concerns in the TPP negotiations over competition with companies linked to the state through ownership or influence. As a result, they supported new specific FTA disciplines, such as those in the proposed USMCA, to address such competition. Some legal analysts contend that the proposed USMCA limits the definition of expropriation so as to protect against \"direct\" expropriation only, and that it does not protect interests against indirect expropriation. Indirect expropriation occurs when a state's regulatory actions could take effective control of\u2014or interfere with\u2014an investment. "], "subsections": []}, {"section_title": "Labor", "paragraphs": ["NAFTA marked the first time that worker rights provisions were associated with an FTA by including labor provisions in a side agreement, the North American Agreement on Labor Cooperation (NAALC), which required all parties to enforce their own labor laws, as well as provisions to encourage greater cooperation. The side agreement includes a consultation mechanism for addressing labor disputes and a special labor dispute settlement procedure. The enforcement mechanism applies mainly to a party's failure to enforce its own labor laws. Under provisions of the 2002 TPA, seven subsequent FTAs included a similar provision within the main text of the agreement. ", "The rationale for including labor provisions in U.S. FTAs is to help ensure that countries not derogate from labor laws to attract trade and investment and that liberalized trade does not give a competitive advantage to developing countries due to a lack of adequate standards. Worker rights provisions in U.S. trade agreements have evolved significantly since NAFTA. More recent agreements, including FTAs with Colombia, Panama, Peru, and South Korea, incorporated internationally recognized labor principles requiring parties to adopt and maintain in their statutes and regulations core labor principles of the International Labor Organization (ILO) (ILO Declaration). They also required countries to enforce their labor laws and not to waive or derogate from those laws to attract trade and investment. These provisions are enforceable under the same dispute settlement procedures that apply to other provisions of the FTA, and violations are subject to the same potential trade sanctions. ", "In the NAFTA renegotiations, the United States sought to strengthen NAFTA provisions related to the protection of worker rights. The proposed USMCA revises these provisions and provides the same dispute mechanism as other parts of the agreement. USMCA's provisions on labor would require parties to not only enforce their own laws, but also to adopt and maintain specific laws related to the ILO Declaration. It would require parties to", "adopt and maintain in statutes and regulation, and practices, worker rights as stated in the ILO Declaration of Rights at Work, in addition to acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health; not waive or otherwise derogate from its statues or regulations; not fail to effectively enforce labor laws through a sustained or recurring course of action or inaction in a manner affecting trade or investment between parties; promote compliance with labor laws through appropriate government action such as appointing and training inspectors or monitoring compliance and investigating suspected violations.", "The provisions include language stating that each party retains the right to exercise reasonable enforcement discretion and to make bona fide decisions with regard to the allocation of enforcement resources provided that the exercise of that discretion is not inconsistent with the labor obligations. The agreement also states that nothing in the labor chapter shall be construed to empower a party's authorities to undertake labor law enforcement activities in the territory of another party.", "Additionally, the USMCA would commit Mexico to ", "enact specific legislative action to establish effective recognition of the right to collective bargaining; establish and maintain independent and impartial bodies to register union activities and collective bargaining agreements; establish independent Labor Courts for the adjudication of labor disputes; and enact other legislation to protect worker rights.", "Concerns over NAFTA labor provisions are often discussed in the context of Mexico's record on worker rights. While Mexico has enacted labor laws and undertaken constitutional reforms, the challenge has been to enforce those laws. Mexican labor reform is a priority for Mexico's new President Andr\u00e9s Manuel L\u00f3pez Obrador. In the proposed TPP, the United States signed separate labor consistency plans with Vietnam, Malaysia, and Brunei, which included commitments for specific legal reforms and other measures. Some stakeholders advocated for a similar plan for Mexico in conjunction with a revised NAFTA, although the United States was unable to negotiate one with Mexico in TPP. However, in the USMCA, Mexico agreed to develop and implement reforms to strengthen its labor laws to protect collective bargaining and to reform its system for administering labor justice. Labor reform measures to increase protection of worker rights have been introduced in the Mexican Senate. Mexican Trade Undersecretary Maria Luz de la Mora stated that legislation enacting Mexican labor reforms is expected to be passed by the Mexican Senate before the end of the legislative session, in April 2019. "], "subsections": []}, {"section_title": "Environment", "paragraphs": ["NAFTA was the first U.S. FTA to include a side agreement related to the environment. As with the chapter on worker rights, environment provisions in U.S. FTAs have evolved significantly over time. The NAFTA side agreement\u2014the North American Agreement on Environmental Cooperation (NAAEC)\u2014requires all parties to enforce their own environmental laws, and contains an enforcement mechanism applicable to a party's failure to enforce these laws. NAAEC includes a consultation mechanism for addressing disputes with a special dispute settlement procedure. Seven subsequent FTAs, negotiated under the 2002 TPA, included a similar environmental chapter within the main text of the agreement, including a country's obligations to enforce their own laws. ", "More recent U.S. FTAs added an affirmative obligation for FTA partner countries to adhere to multilateral environmental agreements (MEAs) and allowed for environmental disputes under the FTAs to access the main dispute settlement provisions of the agreement. These obligations generally were reflected in the TPA-2015 negotiating objectives. The proposed USMCA environment chapter obligates each party to", "not to fail to effectively enforce its environmental laws through a sustained or recurring course of action or inaction to attract trade and investment; not to waive or derogate from such laws in a manner that weakens or reduces the protections afforded in those law to encourage trade or investment; and ensure that its environmental laws and policies provide for and encourage high levels of protection; and strive to improve its levels of environmental protection.", "The agreement also would", "require parties to adopt and maintain statutes and regulations consistent with multilateral environmental agreements to which each is a party; recognize the sovereign right of each party to establish its own levels of domestic environmental protection, its own regulatory priorities, and to adopt or modify its priorities accordingly; acknowledge a party's right to exercise discretion with regard to enforcement resources; provide for the resolution of disputes; and provide for a mechanism on implementation of the agreement.", "The proposed USMCA directly or implicitly addresses obligations under major Multilateral Environmental Agreements (MEAs). It also includes obligations and encouragements to protect the ozone layer, protect the marine environment from ship pollution, encourage conservation and sustainable use of biodiversity, and encourage sustainable fisheries management. "], "subsections": []}, {"section_title": "Dispute Settlement", "paragraphs": ["NAFTA and other U.S. FTAs, as well as the WTO, provide for the resolution of disputes arising under the agreement. These provisions are in addition to procedures with regard to investor-state dispute resolution (see \" Investor-State Dispute Settlement \"). The proposed USMCA dispute settlement provisions are designed to resolve disputes in a cooperative manner. A party first seeks redress of a grievance through a request for consultation with the other party. These steps include", "initial consultations between the parties; good offices, conciliation, or mediation; and (if no resolution); establishment of a dispute settlement panel.", "Panels are composed of five members, of whom each side appoints two. A chair is appointed by mutual consent of the parties. Failing that, the disputing party selected by lot makes the decision. After the panel renders its decision, the unsuccessful party is expected to remedy the measure or practice under dispute. If it does not, the aggrieved party may seek compensation, suspension of benefits, or fines. In cases in which a dispute is common to both WTO and FTA rules, a party can choose the forum in which to bring the dispute (i.e., at the WTO or before a NAFTA panel), but cannot bring the dispute to multiple fora. ", "Three state-to-state dispute resolution panels under NAFTA were completed between 1994 and 2001 A fourth case (Restrictions on Sugar from Mexico) was never considered because the United States was able to block a panel chair\u2014and, consequently, a panel\u2014from forming. This action exposed an issue in the panel selection process, which has not been used since. ", "Under the panel selection process, the parties shall select and maintain a roster of 30 panelists, chosen by consensus for a three-year term with the possibility of reappointment. The issue arises when the roster is not constituted or maintained. If a roster has lapsed, as may have been the case in the sugar dispute, a party can challenge any proposed panelist and potentially block any panel from being established. As noted above, a party seeking redress of an issue common to the USMCA and WTO can use either venue. However, the proposed USMCA contains several provisions that are not in the WTO agreements at all, or are treated less extensively. In this case, a functioning USMCA dispute settlement system could be the only arbiter of such disputes. This issue was not resolved in the USMCA. In addition, some chapters or sections are not subject to dispute settlement including ", "The Good Regulatory Practices chapter; The Competition Policy chapter; The Competitiveness chapter; The Small and Medium-Sized Enterprise chapter; The Transparency and Procedural Fairness for Pharmaceutical Products and Medical Devices section of the Publications and Administration chapters; The Macroeconomic Policies and Exchange Rate Matters Chapter other than transparency and reporting obligations that have not been resolved through consultations."], "subsections": [{"section_title": "Binational Review Panels for Trade Remedies", "paragraphs": ["Unlike other U.S. FTAs, NAFTA (and the proposed USMCA) contains a binational dispute settlement mechanism (NAFTA Chapter 19, USMCA Chapter 10). It provides disciplines for settling disputes arising from a NAFTA party's statutory amendment of its antidumping (AD) or countervailing duty (CVD) laws, or from a NAFTA party's AD or CVD final determination on the goods of an exporting NAFTA party. The dispute settlement system in NAFTA Chapter 19 originated during the Canada-United States Free Trade Agreement (CUSFTA) negotiations that culminated in 1988, and it was retained under NAFTA. It was a priority negotiating issue for the Canadian government.", "The binational panel mechanism provides for a review of NAFTA parties' final administrative determinations in AD/CVD investigations in lieu of judicial review in domestic courts. In cases in which an aggrieved NAFTA country maintains that a NAFTA partner did not preserve \"fair and predictable disciplines on unfair trade practices,\" or asserts that a NAFTA partner's amendment to its AD or CVD law is inconsistent with the WTO Antidumping or Subsidies Agreements, the aggrieved NAFTA partner may request a judgment from a binational panel rather than through the legal system of the defending party. ", "The Trump Administration sought to eliminate the Chapter 19 dispute settlement mechanism during the USMCA negotiations. By contrast, Canada and Mexico expressed support for retaining the mechanism, with Canada drawing a \"red line\" firmly opposing its elimination. At the end of the negotiations, the three countries decided to retain the system. NAFTA Chapter 19 is effectively replicated in the Trade Remedies Chapter of the USMCA. "], "subsections": []}]}, {"section_title": "Currency Manipulation", "paragraphs": ["NAFTA does not have provisions related to currency manipulation. For the first time in a U.S. trade agreement, the proposed USMCA includes obligations to guard against currency manipulation. The parties agreed to \"achieve and maintain a market-determined exchange rate regime,\" and to \"refrain from competitive devaluation, including through intervention in the foreign exchange market.\" However, only transparency and reporting requirements are subject to dispute settlement procedures.", "The June 2015 TPA included, for the first time, a principal trade negotiating objective addressing currency manipulation. While neither Canada nor Mexico have been accused of currency manipulation in the past, the inclusion of a currency manipulation chapter could serve as a precedent for including such provisions in future FTAs. Over the past decade, some Members of Congress and policy experts have been concerned that foreign countries may use exchange rate policies to gain an unfair trade advantage against the United States, or are \"manipulating\" their currencies. Specifically, the concern is that other countries may purposefully undervalue their currencies to boost exports, making it harder for other countries to compete in global markets. They argue that U.S. companies and jobs have been adversely affected by the exchange rate policies adopted by China, Japan, and other countries \"manipulating\" their currencies. Some economists are skeptical about currency manipulation and whether it is a significant problem. They raise questions about whether government policies have long-term effects on exchange rates, whether it is possible to differentiate between \"manipulation\" and legitimate central bank activities, and the net effect of alleged currency manipulation on the U.S. economy."], "subsections": []}, {"section_title": "Regulatory Practices", "paragraphs": ["Nontariff barriers, including discriminatory and unpredictable regulatory processes, can be an impediment to market access for U.S. goods and services exports. NAFTA includes broad provisions on regulatory practices in several chapters, including the Customs Procedures, Financial Services, and Energy chapters, but does not have a specific chapter on regulatory practices. NAFTA may have influenced the United States, Canada, and Mexico to increase cooperation on economic and security issues through various endeavors such as the North American Leaders' Summits, the North American Trusted Traveler Program, the U.S.-Canada Beyond the Border Action Plan, and the U.S.-Mexico High Level Regulatory Cooperation Council. ", "The proposed USMCA has a new, separate chapter on regulatory practices in which the parties agreed upon commitments to promote regulatory quality through greater transparency, objective analysis, accountability, and predictability to facilitate international trade, investment, and economic growth. The chapter states that the application of good regulatory practices can support the development of compatible regulatory approaches among the parties, and reduce or eliminate unnecessarily burdensome, duplicative, or divergent regulatory requirements. Such commitments could complement ongoing efforts and include increased transparency in the development and implementation of proposed regulations, opportunities for public comment in the development of regulations, and/or the use of impact assessments and other methods to ensure regulations are evidence-based and current. "], "subsections": []}, {"section_title": "Trucking", "paragraphs": ["The implementation of NAFTA trucking provisions was a major trade issue between the United States and Mexico for many years because the United States delayed its trucking commitments under NAFTA. NAFTA provided Mexican commercial trucks full access to four U.S.-border states by 1995 and full access throughout the United States by 2000. The two countries cooperated to resolve the issue over time and engaged in numerous talks regarding safety and operational issues. By 2015, the trucking issue had been resolved. ", "Under NAFTA, Mexican commercial trucks have authority under the agreement to operate in the United States, but they cannot operate between two points within the country. This means that they can haul cross-border loads but cannot haul loads that originate and end in the United States. The proposed USMCA would cap the number of Mexican-domiciled carriers that can receive U.S. operating authority and would continue the prohibition on Mexican-based carriers hauling freight between two points within the United States. Mexican carriers that already have authority under NAFTA to operate in the United States would continue to be allowed to operate in the United States."], "subsections": []}, {"section_title": "Anticorruption", "paragraphs": ["The United States has been influential in including commitments to combat corruption in international trade into its FTAs by incorporating chapters on transparency and anticorruption into the agreements. Although it has been part of U.S. policy for many years, the use of these types of provisions has evolved over time with anticorruption commitments becoming progressively stronger. NAFTA does not include a separate chapter related to transparency or anticorruption, but it does include several provisions that were considered groundbreaking at the time, including binding rules and disciplines on and removal of barriers to foreign investment. It was not until the proposed TPP that anticorruption provisions were specifically included as a U.S. FTA chapter. Earlier agreements such as the U.S.-Chile FTA included anticorruption provisions related to government procurement, but none in the transparency chapter. The Dominican Republic-Central America FTA (CAFTA-DR) was negotiated several years later and contains anticorruption provisions in the transparency chapters that apply to the whole agreement.", "In the NAFTA renegotiations, both the United States and Mexico included anticorruption provisions in their negotiating objectives. The proposed USMCA has a new chapter on anti-corruption, similar to that of the proposed TPP, in which the parties affirm their resolve to prevent and combat bribery and corruption in international trade and investment. The scope of the chapter is limited to measures to prevent and combat bribery and corruption in regard to any matter covered by the agreement."], "subsections": []}, {"section_title": "\"Sunset\" Provision in Review and Term Extension", "paragraphs": ["In the Final Provisions chapter of the proposed USMCA, parties commit to a review of the agreement on the sixth anniversary of the agreement's entry into force. If all parties agree to continue the agreement after six years, it shall remain in force for another 16 years. If a party does not confirm its wish to extend the term of the agreement for another 16-year period, parties shall conduct a joint review of the agreement every year. The agreement only specifies that a \"party\" would review the agreement; it does not state whether it would be the President or Congress that reviews the agreement. This may be of interest to Congress as it considers the USMCA implementing legislation and what its role would be in reviewing the USMCA. Some industry observers contend that the sunset provision may have a detrimental effect on investor confidence and affect long-term investments. Others believe that the provision will not have an effect as parties can choose to review an agreement at any time."], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": ["There are a number of significant issues for Congress in the consideration of the proposed USMCA. Key issues Congress may examine include modernized provisions of the agreement, the role of the Congress and the President in the NAFTA renegotiation and approval process, whether the agreement meets TPA objectives, the possible economic impact, especially in the auto industry, and how the agreement may impact U.S. relations with Canada and Mexico, two of the United States' largest trading partners. Some lawmakers believe that the renegotiations resulted in a positive outcome that would enhance relations with NAFTA partners through a modernized agreement. Other lawmakers have expressed concerns about specific aspects of the agreement, including labor, with a goal of revision. What follows are a few selected areas of potential congressional interest. "], "subsections": [{"section_title": "Roles of Congress and the President in NAFTA Renegotiations", "paragraphs": ["A possible issue for Congress relates to the roles of Congress and the President in the modernization of the agreement or possible withdrawal. Implementing legislation for the USMCA agreement may be considered under Trade Promotion Authority (TPA). Under TPA, if the President \"makes progress in meeting\" TPA's principal trade negotiating objectives and meets various consultative, notifications, and reporting requirements before, during, and after the conclusion of negotiations, Congress shall provide expedited procedures for automatic introduction of the implementing bill submitted by the President, a timetable for guaranteed committee consideration and discharge, floor consideration, prohibition of amendments, and limitation on debate. The process from introduction must be completed within 90 days, but it has often been completed much more quickly. As TPA was in effect when the USMCA was signed on November 30, 2018, it is eligible for TPA consideration. There is no deadline for presidential submission or congressional consideration of implementing legislation.", "TPA's requirement that the President fulfill consultation, notification and reporting obligations helps preserve the congressional role in trade agreements by giving Congress the opportunity to influence the agreement before it is finalized. Congress may be interested in the extent to which the President advances U.S. negotiating objectives in TPA as approved by Congress in 2015, given several notable breaks in USMCA with the contents of previous U.S. FTAs. Should Congress determine that the President has failed to meet these and other requirements, it may decide that the implementing bill is not eligible for consideration under TPA rules. It would implement this decision by adopting a joint \"procedural disapproval\" resolution in both houses of Congress or a Consultation and Compliance Resolution in either house. In addition, expedited procedures under TPA are considered rules of Congress and can be changed at any time. Given that, either House can deny expedited treatment to implementing legislation. In the House, the Speaker may direct the Rules Committee to enact a rule stripping expedited treatment from the implementing legislation. In the Senate, changing a rule would require unanimous consent, or a supermajority to waive it.", "President Trump has indicated that he would consider withdrawing from NAFTA as a means of pressuring Congress to support timely action on implementing legislation. It is not clear, though, whether the President has the legal authority for withdrawing from an agreement without the consent of Congress. If President Trump attempts to withdraw from the agreement, it is possible that Congress would attempt to challenge or delay the effort. The question of who has the authority to terminate NAFTA, a congressional-executive agreement, has been debated by lawmakers, legal experts, and others. "], "subsections": []}, {"section_title": "Economic and Other Considerations", "paragraphs": ["Congress may examine the economic effects of a USMCA and the broader strategic implications of possible withdrawal from NAFTA absent action on legislation to implement the USCMA. President Trump has repeatedly threatened to withdraw from NAFTA. Some analysts maintain that these statements are not to be taken lightly because the potential cost of such actions could be very significant for the U.S. economy. The United States shares strong economic ties with Mexico and Canada. Any disruption to the economic relationship could have adverse effects on investment, employment, productivity, and North American competitiveness. In addition, Mexico and Canada could consider imposing retaliatory tariffs on U.S. exports if the United States were to withdraw, while at the same time maintaining existing and pursuing new FTAs without the United States. ", "The full effects of the proposed USMCA on North American trade relations are not be expected to be significant because nearly all U.S. trade with Canada and Mexico that meets rules of origin requirements is now conducted duty and barrier free under NAFTA. The proposed USMCA would maintain NAFTA's tariff and non-tariff barrier eliminations. If the USMCA is approved by Congress and it enters into force, many economists and other observers believe that it is not expected to have a measurable effect on U.S. trade and investment with other NAFTA parties, jobs, wages, or overall economic growth, and that it would probably not have a measurable effect on the U.S. trade deficit. The U.S. International Trade Commission (ITC) is conducting an investigation into the likely economic impacts of the proposed USMCA, a required element of the Trade Promotion Authority (TPA) process. TPA 2015 states that the ITC must issue its report within 105 days of the President's signing of a trade deal. The ITC report, due by March 15, 2019, has been delayed because of the partial government shutdown, which lasted 35 days. It is now expected to be released by April 20, 2019. ", "One exception to this overall economic evaluation may be the motor vehicle industry, which may experience more significant effects than other industries because of the changes in rules of origin in the USMCA and because of the high percentage of motor vehicle goods that enter duty-free under NAFTA. The highest share of U.S. trade with Mexico is in the motor vehicle industry and it is also the industry with the highest percentage of duty-free treatment under NAFTA because of high North American content. In 2017, leading U.S. merchandise imports from NAFTA partners were motor vehicles ($102.1 billion or 17% of total imports from Canada and Mexico), oil and gas ($68.8 billion or 11% of imports), and motor vehicle parts ($58.7 billion or 10% of imports). About 98.6% of U.S. motor vehicle imports and about 77.5% of motor vehicle parts imports from Canada and Mexico entered the United States duty-free under NAFTA. In comparison, only 12.6% of oil and gas imports and 49.3% of total U.S. imports from Canada and Mexico in 2017 received duty-free benefits under NAFTA as shown in Figure 7 . ", "Some analysts believe that the updated auto rules of origin requirements contained in the USMCA could raise compliance and production costs and could lead to higher prices, which could possibly negatively affect U.S. vehicle sales. The net impact, however, may be more limited depending on the capacity of U.S. automakers and parts manufacturers to shift suppliers and production locations and the ability to absorb higher costs, according to some observers. Some observers contend that manufacturers with a stronger presence in Mexico, such as General Motors and Fiat Chrysler Automobiles, may be more impacted. ", "Other observers and stakeholders are continuing to review the provisions in the new agreement and what effect, if any, these changes would have on U.S. economic relations with Canada and Mexico. To some analysts, provisions in areas such as customs regulation, digital trade, sanitary and phytosanitary measures, and enforcement on labor and the environment are considered an improvement over similar provisions in NAFTA. Other proposed changes in the agreement, such as largely heightened IPR protections and generally less extensive investment provisions, have both supporters and detractors. For example, there is some concern that the ISDS provisions in the USMCA effectively may only apply to certain U.S. contracts in Mexico's energy sector and possibly leave out other sectors such as services. Under USMCA, investors in many sectors would be limited to filing ISDS claims for breaches of national treatment, most-favored nation treatment, or expropriation, but not indirect expropriation."], "subsections": []}, {"section_title": "Mexico's New President", "paragraphs": ["On July 1, 2018, Mexico held presidential and legislative elections in which Andr\u00e9s Manuel L\u00f3pez Obrador and his leftist MORENA party won by wide margins. President L\u00f3pez Obrador entered into office on December 1, 2018. He won the presidency with 53.2% of the vote, more than 30 percentage points ahead of his nearest rival. MORENA's coalition also won majorities in both chambers of Mexico's Congress. ", "Although President L\u00f3pez Obrador voiced skepticism about NAFTA in the past, he has stated on several occasions that he supports the agreement, arguing that it should be improved to benefit Mexico rather than being terminated. Mexico's chief NAFTA negotiator under L\u00f3pez Obrador's Administration, Jes\u00fas Seade, stated that the proposed USMCA is a \"satisfactory result\" for Mexico and that it will create an incentive for increased investment linkages and deeper economic integration. "], "subsections": []}, {"section_title": "Canada and Mexico's Participation in the CPTPP and other FTAs", "paragraphs": ["An issue for congressional consideration is Mexico and Canada's ongoing trade initiatives and how they may affect the United States. In addition to numerous FTAs with other countries, Canada and Mexico are signatories to the TPP, now known as CPTPP or TPP-11. Following the withdrawal of the Trump Administration from the then-proposed TPP in January 2017, the 11 parties agreed on a final deal for the CPTPP on January 23, 2018; it was signed on March 8, 2018. Canada and Mexico have ratified the agreement. With six of the 11 countries having ratified it, the CPTPP came into effect on December 30, 2018. It provides Canada and Mexico preferential market access in numerous industries to several lucrative Asian markets, especially Japan, and may affect current trade and investment trends with the United States. ", "According to a June 2017 study, Canada and Mexico could have potential gains from CPTPP, mainly because they would have increased access to other markets, especially Japan, without having to compete with U.S. exports. The study projects that Canada's exports to CPTPP countries, without the United States, would increase by 4.7% by 2035 and that Mexico's would increase by 3.1%. The study states that Canada's agricultural exports, particularly beef, would benefit from access to the Japanese market."], "subsections": [{"section_title": "Canada's FTAs", "paragraphs": ["In addition to NAFTA, and the CPTPP, Canada has also negotiated other FTAs. Canada's Comprehensive Economic and Trade Agreement (CETA) with the European Union provisionally came into force on September 21, 2017. This agreement provides preferential market access for goods and certain services (including agriculture) among other provisions such as those on geographical indications (GIs)\u2014geographical names that protect the quality and reputation of a distinctive product originating in a certain region. For instance, Canada agreed to recognize GIs on certain cheeses generally viewed as common food names in the United States, some of which survived as recognized GIs under the USMCA. Canada likely will begin talks with the United Kingdom for an FTA, if the terms of Brexit allow it to negotiate FTAs with other countries. Canada also has a free trade agreement in force with South Korea and has conducted exploratory discussions on launching FTA negotiations with China. In addition, Canada has FTAs with several countries in Central and South America, and is an observer to the Pacific Alliance."], "subsections": []}, {"section_title": "Mexico's FTAs", "paragraphs": ["Some observers contend that Mexico's trade policy is the most open in the world. It has a total of 11 free trade agreements involving 46 countries, including it the 11-member CPTPP. These also include agreements with most countries in the Western Hemisphere, as well as agreements with Israel, Japan, and the EU. Mexico and the EU renegotiated a new FTA that is expected to open up the Mexican market to more EU exporters and investors. The two parties announced an agreement in principle on April 21, 2018. The new agreement, which must be ratified by both parties before entering into force, includes commitments to cooperate on issues such as climate change, human rights, combating poverty, or researching new medicines. Mexico is also a party to the Pacific Alliance, a regional trade integration initiative formed by Chile, Colombia, Mexico, and Peru. The trade bloc's main purpose is for members to forge stronger economic ties and integration with the Asia-Pacific region. In addition to reducing trade barriers, the Alliance has sought to integrate in areas including financial markets and the free movement of people. In 2018, the Pacific Alliance admitted Singapore, Australia, New Zealand, and Canada as associate members as a first step to deepening the relationship. "], "subsections": []}]}, {"section_title": "Potential Impact of U.S. Withdrawal from NAFTA", "paragraphs": ["President Trump stated to reporters on December 1, 2018, that he intended to notify Canada and Mexico of his intention to withdraw from NAFTA in six months. Article 2205 of NAFTA states that a party may withdraw from the agreement six months after it provides written notice of withdrawal to the other parties. If a party withdraws, the agreement shall remain in force for the remaining parties. Private sector groups are urging the President to remain within NAFTA until the proposed USMCA enters into force. They claim that withdrawing from NAFTA would have \"devastating\" negative consequences. Congress may consider the ramifications of withdrawing from NAFTA and how it may affect the U.S. economy and foreign relations with Mexico. It may monitor and consider the congressional role in a possible withdrawal. ", "Numerous think tanks and economists have written about the possible economic consequences of U.S. withdrawal from NAFTA. For example ", "An analysis by the Peterson Institute for International Economics (PIIE) finds that a withdrawal from NAFTA would cost the United States 187,000 jobs that rely on exports to Mexico and Canada. These job losses would occur over a period of one to three years. By comparison, according to the study, between 2013 and 2015, 7.4 million U.S. workers were displaced or lost their jobs involuntarily due to companies shutting down or moving elsewhere globally. The study notes that the most affected states would be Arkansas, Kentucky, Mississippi, and Indiana. The most affected sectors would be autos, agriculture, and non-auto manufacturing. A 2017 study by ImpactEcon, an economic analysis consulting company, estimates that if NAFTA were to terminate, real GDP, trade, investment, and employment in all three NAFTA countries would decline. The study estimates U.S. job losses of between 256,000 and 1.2 million in three to five years, with about 95,000 forced to relocate to other sectors. Canadian and Mexican employment of low skilled workers would decline by 125,000 and 951,000, respectively. The authors of the study estimate a decline in U.S. GDP of 0.64% (over $100 billion). The Coalition of Services Industries (CSI) argues that NAFTA continues to be a remarkable success for U.S. services providers, creating a vast market for U.S. services providers, such as telecommunications and financial services. CSI estimates that if NAFTA is terminated, the United States risks losing $88 billion in annual U.S. services exports to Canada and Mexico, which support 587,000 high-paying U.S. jobs.", "Some trade policy experts contend that NAFTA has been a bad deal for U.S. workers and cost the United States nearly 700,000 jobs as of 2010. They contend that renegotiating NAFTA offers new opportunities to update the agreement with a new labor template and updated provisions to raise labor standards and help protect U.S. workers. The Economic Policy Institute (EPI) recommends that the United States seek stronger labor standards and enforcement in the NAFTA renegotiations. USMCA's modernized labor provisions may reflect some of the EPI recommended changes of including ILO conventions concerning the freedom of association, collective bargaining, discrimination, forced labor, child labor, and workplace safety and health. ", "Canada and Mexico likely would maintain NAFTA between themselves if the United States were to withdraw. U.S.-Canada trade could be governed either by CUSFTA, which entered into force in 1989 (suspended since the advent of NAFTA), or by the baseline commitments common to both countries as members of the World Trade Organization. If CUSFTA remains in effect, the United States and Canada would continue to exchange goods duty free and would continue to adhere to many provisions of the agreement common to both CUSFTA and NAFTA. Some commitments not included in the CUSFTA, such as intellectual property rights, would continue as baseline obligations in the WTO. However, it is unclear whether CUSFTA would remain in effect, as its continuance would require the assent of both parties."], "subsections": [{"section_title": "Tariffs", "paragraphs": ["In the unlikely event of a U.S. withdrawal from NAFTA, the United States would presumably would return WTO most-favored-nation tariffs, the rate it applies to all countries with which the United State does not have an FTA. The United States and Canada maintain relatively low simple average MFN rates, at 3.5% and 4.1%, respectively. Mexico has a higher 7.0% simple average rate. However, all countries have higher \"peak\" tariffs on labor intensive goods, such as apparel and footwear, and some agriculture products.", "Of the three NAFTA parties, the United States has the lowest MFN tariffs in most categories. Applied tariffs are higher in Mexico than the United States or Canada, although Canada has double-digit applied agricultural tariffs. The United States and Canada have relatively similar bound and applied tariffs at the WTO. Mexico's bound tariff rates are very high and far exceed U.S. bound rates. Without NAFTA, there is a risk that tariffs on U.S. exports to Mexico could reach up to 36.2% (see Table 2 ). In agriculture, U.S. farmers would face double-digit applied and trade-weighted rates in both Mexico and Canada. Mexico and Canada likely would maintain duty-free treatment between themselves through maintenance of a bilateral NAFTA, or through commitments made in conjunction with the CPTPP (TPP-11)", "If the United States withdrew from NAFTA, certain commitments would be affected, such as the following:", "Services Access . The three NAFTA countries committed themselves to allowing market access and nondiscriminatory treatment in certain service sectors. If the United States withdrew from NAFTA, it would still be obligated to adhere to the commitments it made for the WTO's General Agreement on Trade in Services. While these commitments were made contemporaneously with NAFTA, given that the NAFTA schedule operated under a negative list basis\u2014all sectors included unless specifically excluded\u2014and GATS on a positive list\u2014specific sectors are listed for inclusion\u2014NAFTA is likely more extensive. Government Procurement . As noted previously in this report, the NAFTA government procurement chapter sets standards and parameters for government purchases of goods and services. The schedule annexes set forth opportunities for firms of each party to bid on certain contracts for specified government agencies. The WTO Government Procurement Agreement (GPA) also imposes disciplines and obligations on government procurement. Unlike most other WTO agreements, membership in the GPA is optional. Canada and the United States would still have reciprocal obligations as members of the GPA. In fact, since the GPA was renegotiated in 2014, commitments between the two are greater than under NAFTA. However, Mexico is not a member of the GPA, and U.S. withdrawal from NAFTA would allow Mexico to adopt any domestic content or buy local provisions. (Since U.S. firms are more competitive in obtaining Mexican contracts than Mexican firms in the United States, this may adversely affect some U.S. domestic firms.) Investment . Unlike many chapters in NAFTA which have analogous counterparts in the WTO Agreements, the investment chapter in the WTO does not provide the level of protection for investors as does NAFTA, subsequent U.S. trade agreements, or bilateral investment treaties. If the United States withdrew from NAFTA, U.S. investors would lose protections in Canada and Mexico. Countries would have more leeway to block individual investments. U.S. investors would not have recourse to the investor-state dispute settlement (ISDS) mechanism, but would need to deal with claims of expropriation through domestic courts, or recourse to government-to-government consultation. Canada and Mexico likely would maintain investor protection between them through the prospective CPTPP or through maintenance of NAFTA provisions. "], "subsections": []}]}, {"section_title": "Outlook", "paragraphs": ["The timeline for congressional consideration of the proposed USMCA remains unclear in part because of the TPA timeline and also because of issues voiced by Congress related to various provisions of the agreement and other ongoing trade issues with Canada and Mexico. The agreement would have to be approved by Congress and ratified by Mexico and Canada before entering into force. On August 31, 2018, pursuant to TPA, President Trump provided Congress a 90-day notification of his intent to sign an FTA with Canada and Mexico. On January 29, 2019, as required by TPA 60 days after an agreement is signed, U.S. Trade Representative Robert Lighthizer submitted to Congress changes to existing U.S. laws that will be needed to bring the United States into compliance with the proposed USMCA. A report by the ITC on the possible economic impact of TPA is not expected to be completed until April 20, 2019 due to the 35-day government shut down. The report has been cited by some Members of Congress as key to their decisions on whether to support the agreement. ", "Some policymakers have stated that the path forward to passage of the USMCA by Congress is uncertain partially because the three countries have yet to resolve disputes over U.S. steel and aluminum tariffs. The United States, Canada, and Mexico are currently in a trade dispute over U.S. actions to impose tariffs on such imports due to national security concerns as discussed earlier in the report, The conclusion of the proposed USMCA did not resolve the Section 232 tariff dispute. The U.S. business community, industry groups, some congressional leaders, and Mexican government officials have publicly stated that the tariff issues must be resolved before the USMCA could enter into force. ", "Questions surrounding passage of Mexico's proposed labor reforms could be a key issue for Congress as lawmakers consider the proposed USMCA. Under Annex 23-A of USMCA's labor chapter, Mexico has commitments to adopt and maintain measures necessary for the effective recognition of the right to bargain collectively, including the establishment of an independent Labor Court for the adjudication of labor disputes. The reforms were expected to be passed into law before January 1, 2019 in order to avoid a delay of the USMCA's entry into force. Mexico has not yet passed the reforms. Mexican officials have stated that passing labor reforms are a priority for President L\u00f3pez Obrador and the Mexican Congress and that the legislation could be passed as early as February 2019. Other issues are also surfacing as major areas of debate among Members and between the Executive Branch and Congress, as discussed above."], "subsections": []}]}]}}
{"id": "R42463", "title": "Selecting the World Bank President", "released_date": "2019-02-08T00:00:00", "summary": ["On January 7, 2018, World Bank President Jim Yong Kim announced that he would resign by February 1, three years before the expiration of his second five-year term in 2022. Following his resignation, Dr. Kim is to join Global Infrastructure Partners (GIP), a private equity fund that invests in projects in advanced and developing countries. Prior to his nomination to the World Bank by President Barack Obama in 2012, Dr. Kim served as the president of Dartmouth College.", "The nomination period for the next president ends on March 14, after which the Executive Board is to select three candidates for interviews. To date, the only candidate is David Malpass, the Treasury Department's Under Secretary for International Affairs, nominated by President Trump on February 6, 2019. Following the interviews, the Executive Board is to select the next president, something which it aims to do before the spring meetings in April 2019.", "Since its founding after World War II, the presidency of the World Bank has been held by a citizen of the United States, the Bank's largest shareholder. According to an informal agreement among World Bank member countries, a U.S. candidate is chosen as the president of the World Bank and a European candidate (typically French or German) is appointed as the managing director of the International Monetary Fund (IMF).", "The formal requirement for the selection of the World Bank president is that the executive directors appoint, by at least a 50% majority, an individual who is neither a member of the Board of Governors nor Board of Executive Directors. There are no requirements on how individuals are selected, on what criteria, or by what process they are vetted. Although the executive directors may select the IMF managing director by a simple majority vote, they historically aim to reach agreement by consensus. With these factors combined, the custom guaranteeing European leadership at the IMF and American leadership at the World Bank has remained in place.", "This custom has been subject to increasing criticism during the past two decades. The first line of criticism is directed at the current distribution of voting power, which critics contend does not account for the increasing integration of developing countries into the global economy. A second line of criticism is directed at the method of selecting World Bank and IMF leadership, which critics argue elevates nationality above merit and undermines the legitimacy and effectiveness of the institutions. Calls for a more open, transparent, and merit-based leadership selection process have been made consistently in the past, and at times have been incorporated into communiqu\u00e9s of various summits, but have yet to change the leadership selection process at either institution."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["World Bank President Jim Yong Kim recently announced that he was stepping down in February 2019 to join Global Infrastructure Partners, a private equity fund that invests in projects in advanced and developing countries. Kim's unexpected resignation, combined with his joining of a private firm that could directly compete with the World Bank for investments, raises questions for policymakers as they nominate and select a new president for the World Bank, a central component of the U.S.-led international economic order for the past eight decades.", "According to an informal agreement among their member countries, the U.S. nominee is chosen as the World Bank president and a European candidate (typically French or German) is appointed as managing director of the International Monetary Fund (IMF). This custom has been subject to increasing criticism during the past two decades. The first line of criticism is directed at the current distribution of voting power, which critics contend does not account for the increasing integration of developing countries into the global economy. A second line of criticism is directed at the method of selecting World Bank and IMF leadership, which critics argue, elevates nationality above merit and undermines the legitimacy and effectiveness of the institutions. ", "This report provides information on the 2019 World Bank selection process and discusses efforts to reform the selection process."], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "What is the World Bank?", "paragraphs": ["The World Bank is a multilateral development bank (MDB) that offers loans and grants to low- and middle-income countries to promote poverty alleviation and economic development. The World Bank has near-universal membership, with 189 member nations. U.S. membership in the World Bank is authorized by a federal statute known as the Bretton Woods Agreements Act (22 U.S.C. 286 et seq .). Only Cuba and North Korea, and a few microstates such as the Vatican, Monaco, and Andorra, are nonmembers. ", "Two of the Bank's five facilities, the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), lend directly to governments to finance development projects and policy programs in member countries. The IBRD provides middle-income developing countries with loans at near-market rates using funds raised by the World Bank on international capital markets. IDA was established in 1960 due to concerns that low-income countries could not afford to borrow at the near-market rate terms offered by the IBRD. IDA provides grants and concessional loans funded by contributions from donors and transfers from the IBRD to low-income countries. A country's eligibility for IBRD or IDA financial assistance depends on its relative poverty, defined as gross national income (GNI). For 2019, countries with a per capita GNI below $1,145 are eligible for IDA funding. IBRD commitments totaled $23.6 billion in 2018. Commitments from IDA to low-income countries were $24 billion in 2018 ( Table 1 ). Three other World Bank-affiliated organizations are dedicated to promoting private sector finance and investment in low-income countries. The International Finance Corporation (IFC) promotes private sector development in developing countries by making loans and investments in small- and medium-sized companies in those countries. The Multilateral Investment Guarantee Agency (MIGA) provides private investors with insurance coverage against noncommercial risk (expropriation, war and civil disturbance, and/or breach of contract) in developing countries. The International Center for the Settlement of Investment Disputes (ICSID) provides dispute resolution for investment disputes between governments and foreign investors.", "The United States is the largest contributor to the World Bank, having the largest share of the IBRD's subscribed capital, $46.4 billion (16.88%) of a total of $275 billion. As the largest contributor, the United States holds a single seat on the 25-member Board of Executive Directors and carries 16.32% of the total votes in Bank decisionmaking, which provides veto power on decisions requiring an 85% majority vote. The largest shareholders after the United States are Japan (6.89% of voting power), China (4.45%), Germany (4.03%), France (3.78%), and the United Kingdom (3.78%). The large voting power of the United States ensures the U.S. ability to veto major policy decisions at the Bank.", "A citizen of the United States has always held the presidency of the World Bank. The World Bank's president is chairman of the Board and elected by the Board of Directors. The president is the chief of the operating staff of the Bank and conducts, under direction of the executive directors, the ordinary business of the Bank. The Bank's 12 th president, Jim Yong Kim, has served since 2012. On September 27, 2016, Dr. Kim was reelected as the World Bank president, for a second five-year term beginning July 1, 2017.", "The Trump Administration has continued to support U.S. participation in the international financial institutions (IFIs) and has funded recent U.S. MDB commitments. The Trump Administration is supporting a $60.1 billion capital increase for the World Bank's main lending facility, the IBRD, which would raise its capital from $268.9 billion to $329 billion. World Bank members also endorsed a $5.5 billion capital increase for the IFC, which would more than triple the IFC's capital base from $2.57 billion to $8.2 billion. The Trump Administration supports the capital increase, which is to be accompanied by reforms designed, in part, to address a long-standing concern for many U.S. policymakers: high levels of World Bank lending to upper-middle income countries, especially China. In a statement at the 2017 IMF and World Bank spring meetings, U.S. Treasury Secretary Steven Mnuchin stated that, \"the relationship between the World Bank and more creditworthy countries [such as China] should mature over time, with the absolute level of borrowing declining as countries become better able to finance their own development objectives.\""], "subsections": []}]}, {"section_title": "Leadership Selection at the World Bank", "paragraphs": ["Selecting the leadership at the two major international financial institutions\u2014the IMF and the World Bank\u2014is guided by a tradition that the World Bank president is an American and that the IMF managing director is a European. The informal agreement reflects the political and economic balance of power at the end of World War II. At the time, the United States believed that the World Bank should be headed by an American since the United States was the only capital surplus nation, and World Bank lending would be dependent on American financial markets. The U.S. Secretary of the Treasury at the time, Fred Vinson, believed that if an American representative headed the World Bank, the IMF must be headed by a non-American. Moreover, he noted, \"it would be impracticable to appoint U.S. citizens to head both the Bank and the Fund.\" ", "Despite the growth of world capital markets, and the fact that the World Bank is no longer reliant on U.S. capital markets, the convention on the IMF and World Bank selection has remained intact. The U.S.-EU agreement is not unique. A 2009 study finds that", "Informal agreements allocating positions of authority and decision making pervade international organizations. Whether in secretariats or political, judicial, and administrative bodies, tacit understandings that assign representation to certain states or groups of states are the norm, not the exception...", "The Articles of Agreement of the African Development Bank (AfDB) and the Asian Development Bank (AsDB) each specify that only citizens of regional countries may serve as presidents of those banks. By tradition, the Japanese Finance Ministry nominates a Japanese citizen to be president of the AsDB. The Articles of the Inter-American Development Bank (IDB) and the European Bank for Reconstruction and Development (EBRD) specify only that their president must come from a member country. By tradition, the IDB president is selected by a competitive process from among citizens of the Latin American countries. The EBRD president is also elected by a presumably competitive process, though only French and German citizens have served to date in that capacity and there is normally only one nominee. ", "Second-tier offices in these institutions have also traditionally been reserved for U.S. citizens. First deputy managing director at the IMF and executive vice president at the IDB are traditionally U.S. citizens. These individuals are appointed by the chief executive of the institution, but in the case of the IMF and IDB an individual is typically designated by the U.S. Government. At the Asian Development Bank and EBRD, one of the vice presidents for an operational region has typically been a U.S. citizen. ", "However, despite these restrictions, there have been successful efforts to open up the selection process across the MDBs. In 2015, the AfDB members elected Akinwumi Adesina of Nigeria, after a transparent election involving seven other candidates. Adesina garnered 58% of the total vote of AfDB shareholders. The 2012 World Bank election was the first to include several candidates and Kim's nomination was, unlike past nominations, not unanimous. The announcement of Kim's selection noted that a new selection process (introduced in 2011) yielded multiple nominees (former Nigerian Finance Minister Ngozi Okonjo-Iweala and former Colombian Finance Minister and United Nations Under Secretary-General for Economic and Social Affairs Jose Antonio Ocampo) and that the nominees received support from different member countries. "], "subsections": [{"section_title": "Formal Process for Selecting the World Bank President", "paragraphs": ["The formal guidelines for choosing the World Bank president are laid out in the Bank's Articles of Agreements and Bylaws. Article V, Section 5, states that \"[t]he Executive Board shall select a President who shall not be a Governor or an Executive Director. \" This decision may be reached by a simple majority of the Executive Board. Section 13(c) of the Bank's bylaws stipulates the terms of service. World Bank presidents are elected for renewable five-year terms. Neither the articles nor the bylaws articulate any specific qualifications for the position of president of the World Bank.", "The Bank's Articles of Agreement, however, are silent on any requirements on how individuals are selected, on what criteria, or by what process they are vetted. There is no formal search process for candidates. Nominations can only be made by the 25 World Bank executive directors and there is no concerted search process of the Executive Board to identify and vet possible candidates. ", "In 2000, two internal working groups (the World Bank Working Group to Review the Process for Selection of the President and the International Monetary Fund Working Group to Review the Process for Selection of the Managing Director) were created to discuss the selection procedure. A joint draft report of the working groups was endorsed by the executive directors on April 26, 2001, but never formally implemented. The report declared, among other things, that transparency and accountability are critical to the selection process. ", "Instead of implementing the 2001 report's recommendations, the Executive Board adopted in 2011 a procedure that specified qualification criteria, established a nomination period, and provided for an interview process. Critics point out that the agreed procedures remain vague and largely nontransparent. Most notably, development expertise is not included as a qualification and the decision will be taken not by public vote, but rather by consensus according to prior practice. Declaring the importance of an \"open, transparent, and merit-based\" process, yet continuing to perpetuate the status quo, according to three former World Bank chief economists, is hypocritical, and \"destroys the trust and spirit of collaboration needed to manage the profound problems facing the world.\" ", "The decision to select a new World Bank president is to be made by a majority vote of the World Bank's Executive Board. Unlike the United Nations General Assembly, which relies on a one-person, one-vote governance system, the World Bank uses a weighted voted system. Voting is loosely based on contributions to the Bank. The five largest shareholders (United States, Japan, Germany, France, and the United Kingdom) have their own seat on the Executive Board. In addition to the five largest shareholders, China, Russia, and Saudi Arabia have enough votes to elect their own executive directors. All other countries have gravitated into mixed-state groupings or constituencies. These constituencies range in size from 3 countries (South Africa, Angola, and Nigeria) to 21. The mixed-state constituencies are flexible in their membership. Countries have periodically switched constituencies, often to a new group that will allow them to have a bigger vote or leadership role.", "Unlike the eight countries that have their own ED, the influence of countries in mixed-state constituencies is not equivalent to their quota-determined voting weight. Since they vote in constituencies, small countries can easily be sidestepped by the larger countries in the constituency. For many countries at the World Bank, they \"can at best express a divergent opinion orally but cannot bring it to bear in the form of a vote.\" Executive directors must cast their votes as single unit, even though some of the countries they represent may disagree with their position. There is no provision for splitting a constituency's vote. ", "There is no formal congressional involvement in the selection of Bank management. U.S. participation in the World Bank is authorized by the Bretton Woods Agreement Act of 1945. The act delegates to the President ultimate authority under U.S. law to direct U.S. policy and instruct the U.S. representatives at the Bank. The President, in turn, has generally delegated authority to the Secretary of the Treasury. With the advice and consent of the Senate, the President names individuals to represent the United States on the Executive Board of the World Bank. The position of U.S. executive director is currently vacant. The alternate executive director is Erik Bethel. The Executive Board has authority over operations and policy and must approve any loan or policy decision. The U.S. executive director is supported primarily by Treasury Department staff. ", "Unique among the founding members, the Bretton Woods Agreement Act requires specific congressional authorization for certain decisions, such as changing the U.S. share at the Bank or amending the Articles of Agreement. However, neither the approval of individual loans nor the selection of the managing director requires congressional approval."], "subsections": []}, {"section_title": "Reform Efforts and the 2019 Selection Process", "paragraphs": ["The European-U.S. arrangement to split the leadership at the IMF and World Bank has generated controversy, which may undermine the effectiveness of the eventual nominee. Critics of the current selection process make two general arguments. First, the gentlemen's agreement on IMF and World Bank leadership is seen as a relic of a global economy that no longer exists. Whereas the United States and Europe dominated the postwar economy, the current international economy is more diverse. Developing and emerging market countries contribute half of global output, up from 25% 30 years ago. Over the past several decades, the balance of global economic power has been shifting from the United States and Europe to China and a number of other fast-developing countries ( Figure 1 ). These economies account for rising shares of global GDP, manufacturing, and trade, and also are driven by a significant expansion of trade among the developing countries (South-South trade). These shifts are driven by growing economic integration and interdependence among economies, particularly through new global production and supply chains that incorporate inputs from many different countries. ", "In recent years, China has also invested in, created, and led a range of institutions and initiatives, including the Asian Infrastructure Investment Bank (AIIB) and other funding mechanisms, such as the Silk Road Fund and the New Development Bank (also known as the BRICS Bank), a collective arrangement with Brazil, Russia, India, and South Africa. At the same time, China is pursuing its own bilateral and regional trade agreements, such as the proposed Regional Comprehensive Economic Partnership (RCEP) with 15 other countries in the Asia Pacific. China has also positioned itself to act as a lender of last resort through monetary arrangements such as the BRICs Contingent Reserve Arrangement (CRA) and the Chiang Mai Initiative Multilateralization (CMIM). ", "In such a diverse global economy, any agreement that grants the leadership position based on nationality, critics argue, unnecessarily limits the pool of potential candidates that may be exceptionally competent in addressing the issues before the Bank. \"Since the creation of the International Monetary Fund and World Bank at the end of the second world war, an American has led the Bank and a European the IMF,\" noted Mark Sobel, U.S. chairman of the Official Monetary and Financial Institutions Forum (OMFIF), an independent think tank, and former U.S. representative at the IMF. \"It is time for a change.\" ", "According to Nancy Birdsall, senior fellow and founding president of the Center for Global Development, \"the logic of an American president to ensure sustained U.S. support for the World Bank is no longer as clear as it has been.\" According to Birdsall, and others, the Trump Administration's \"America First\" rhetoric may make it harder for the United States to coalesce support for the U.S. candidate. Others argue that these concerns are overblown and that any serious effort to block the U.S. nominee would backfire. David Dollar, a former U.S. Treasury and senior World Bank official, says that, \"it's a very complicated game. My instinct is that there is a very strong likelihood that the U.S. nominee will be approved. The world has an interest in the United States staying engaged with the World Bank.\" Devesh Kapur, a professor at Paul H. Nitze School of Advanced International Studies at Johns Hopkins University, puts it more bluntly, saying \"powerful nations' relationships with the United States matter much more than who heads the World Bank.\"", "Following Kim's announcement of his resignation, the Bank's Executive Board met on January 9, 2019, and issued a formal statement on the selection process. The nomination period for the next president ends on March 14, after which the Executive Board is to decide on a shortlist of three candidates. Following interviews, the Executive Board aims to select the next president before the spring meetings in April 2019. ", "On February 6, President Trump nominated David Malpass, Treasury's Under Secretary for International Affairs, to be the next World Bank president. Reportedly, Ivanka Trump, President Trump's oldest daughter and senior advisor, played a role in selecting the U.S. nominee. In 2017, Ms. Trump helped start a World Bank-administered fund, the Women Entrepreneurs Finance Initiative, which aims to generate $1.6 billion in capital for female entrepreneurs. The White House, according to reports, also considered Indra Nooyi, the former chief executive officer of PepsiCo; Ray Washburne, President and Chief Executive of the Overseas Private Investment Corporation; Mark Green, U.S. Agency for International Development Administrator; and Robert Kimmitt, Deputy Treasury Secretary under George W. Bush."], "subsections": []}]}]}}
{"id": "RL31980", "title": "Senate Consideration of Presidential Nominations: Committee and Floor Procedure", "released_date": "2019-04-04T00:00:00", "summary": ["Article II, Section 2, of the Constitution provides that the President shall appoint officers of the United States \"by and with the Advice and Consent of the Senate.\" This report describes the process by which the Senate provides advice and consent on presidential nominations, including receipt and referral of nominations, committee practices, and floor procedure.", "Committees play the central role in the process through investigations and hearings. Senate Rule XXXI provides that nominations shall be referred to appropriate committees \"unless otherwise ordered.\" Most nominations are referred, although a Senate standing order provides that some \"privileged\" nominations to specified positions will not be referred unless requested by a Senator. The Senate rule concerning committee jurisdictions (Rule XXV) broadly defines issue areas for committees, and the same jurisdictional statements generally apply to nominations as well as legislation. A committee often gathers information about a nominee either before or instead of a formal hearing. A committee considering a nomination has four options. It can report the nomination to the Senate favorably, unfavorably, or without recommendation, or it can choose to take no action. It is more common for a committee to take no action on a nomination than to reject a nominee outright.", "The Senate handles executive business, which includes both nominations and treaties, separately from its legislative business. All nominations reported from committee are listed on the Executive Calendar, a separate document from the Calendar of Business, which lists pending bills and resolutions. Generally speaking, the majority leader schedules floor consideration of nominations on the Calendar. Nominations are considered in \"executive session,\" a parliamentary form of the Senate in session that has its own journal and, to some extent, its own rules of procedure.", "The Senate can call up a nomination expeditiously, because a motion to enter executive session to consider a specific nomination on the Calendar is not debatable. This motion requires a majority of Senators present and voting, a quorum being present, for approval.", "After a nomination has been called up, the question before the Senate is \"will the Senate advise and consent to this nomination?\" A majority of Senators voting is required to approve a nomination. However, Senate rules place no limit on how long a nomination may be debated, and ending consideration could require invoking cloture. On April 6, 2017, the Senate reinterpreted Rule XXII in order to allow cloture to be invoked on nominations to the Supreme Court by a majority of Senators voting. This expanded the results of similar actions taken by the Senate in November 2013, which changed the cloture vote requirement to a majority for nominations other than to the Supreme Court. After the 2013 decision, the number of nominations subjected to a cloture process increased.", "On April 3, 2019, the Senate reinterpreted Rule XXII again. The Senate reduced, from 30 hours to 2 hours, the maximum time nominations can be considered after cloture has been invoked. This change applied to all executive branch nominations except to high-level positions such as heads of departments, and it applied to all judicial nominations except to the Supreme Court and the U.S. Circuit Court of Appeals. The full impact of this change is difficult to assess at this time, but it is likely to shorten the time between a cloture vote and a vote on the nomination. If Senators respond as they did to the last reinterpretation of the cloture rule, it might also increase the number of nominations subjected to a cloture process.", "Nominations that are pending when the Senate adjourns sine die at the end of a session or recesses for more than 30 days are returned to the President unless the Senate, by unanimous consent, waives the rule requiring their return (Senate Rule XXXI, clause 6). If a nomination is returned, and the President still desires Senate consideration, he must submit a new nomination."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Article II, Section 2, of the Constitution provides that the President shall appoint officers of the United States \"by and with the Advice and Consent of the Senate.\" The method by which the Senate provides advice and consent on presidential nominations, referred to broadly as the confirmation process, serves several purposes. First, largely through committee investigations and hearings, the confirmation process allows the Senate to examine the qualifications of nominees and any potential conflicts of interest. Second, Senators can influence policy through the confirmation process, either by rejecting nominees or by extracting promises from nominees before granting consent. Also, the Senate sometimes has delayed the confirmation process in order to increase its influence with the executive branch on unrelated matters.", "Senate confirmation is required for several categories of government officials. Military appointments and promotions make up the majority of nominations, approximately 65,000 per two-year Congress, and most are confirmed routinely. Each Congress, the Senate also considers approximately 2,000 civilian nominations, and, again, many of them, such as appointments to or promotions in the Foreign Service, are routine. Civilian nominations considered by the Senate also include federal judges and specified officers in executive departments, independent agencies, and regulatory boards and commissions. ", "Many presidential appointees are confirmed routinely by the Senate. With tens of thousands of nominations each Congress, the Senate cannot possibly consider them all in detail. A regularized process facilitates quick action on thousands of government positions. The Senate may approve en bloc hundreds of nominations at a time, especially military appointments and promotions.", "The process also allows for close scrutiny of candidates when necessary. Each year, a few hundred nominees to high-level positions are regularly subject to Senate investigations and public hearings. Most of these are routinely approved, while a small number of nominations are disputed and receive more attention from the media and Congress. Judicial nominations, particularly Supreme Court appointees, are generally subject to greater scrutiny than nominations to executive posts, partly because judges may serve for life. Among the executive branch positions, nominees for policymaking positions are more likely to be examined closely, and are slightly less likely to be confirmed, than nominees for non-policy positions.", "There are several reasons that the Senate confirms a high percentage of nominations. Most nominations and promotions are not to policymaking positions and are of less interest to the Senate. In addition, some sentiment exists in the Senate that the selection of persons to fill executive branch positions is largely a presidential prerogative. Historically, the President has been granted wide latitude in the selection of his Cabinet and other high-ranking executive branch officials.", "Another important reason for the high percentage of confirmations is that Senators are often involved in the nomination stage. The President would prefer a smooth and fast confirmation process, so he may decide to consult with Senators prior to choosing a nominee. Senators most likely to be consulted, typically by White House congressional relations staff, are Senators from a nominee's home state, leaders of the committee of jurisdiction, and leaders of the President's party in the Senate. Senators of the President's party are sometimes invited to express opinions or even propose candidates for federal appointments in their own states. There is a long-standing custom of \"senatorial courtesy,\" whereby the Senate will sometimes decline to proceed on a nomination if a home-state Senator expresses opposition. Positions subject to senatorial courtesy include U.S. attorneys, U.S. marshals, and U.S. district judges.", "Over the past decade, Senators have expressed concerns over various aspects of the confirmation process, including the rate of confirmation for high-ranking executive branch positions and judgeships, as well as the speed of Senate action on routine nominations. When the Senate is controlled by the party of the President, this concern has often been raised as a complaint that minority party Senators are disputing a higher number of nominations, and have increasingly used their leverage under Senate proceedings to delay or even block their consideration. These concerns have led the Senate to make several changes to the confirmation process since 2011. The changes are taken into account in the following description of the process and are described in detail in other CRS Reports. "], "subsections": []}, {"section_title": "Receipt and Referral and \"Privileged Nominations\"", "paragraphs": ["The President customarily sends nomination messages to the Senate in writing. Once received, nominations are numbered by the executive clerk and read on the floor. The clerk actually assigns numbers to the presidential messages, not to individual nominations, so a message listing several nominations would receive a single number. Except by unanimous consent, the Senate cannot vote on nominations the day they are received, and most are referred immediately to committees.", "Senate Rule XXXI provides that nominations shall be referred to appropriate committees \"unless otherwise ordered.\" A standing order of the Senate provides that some nominations to specified positions will not be referred unless a Senator requests referral. Instead of being immediately referred, the nominations are instead listed in a special section of the Executive Calendar , a document distributed daily to congressional offices and available online. This section of the Calendar is titled \"Privileged Nominations.\" After the chair of the committee with jurisdiction over a nomination has notified the executive clerk that biographical and financial information on the nominee has been received, this is indicated in the Calendar. After 10 days, the nomination is moved from the \"Privileged Nominations\" section of the Calendar and placed on the \"Nominations\" section with the same status as a nomination that had been reported by a committee. (See \" Executive Calendar \" below.) Importantly, at any time that the nomination is listed in the new section of the Executive Calendar , any Senator can request that a nomination be referred, and it is then sent to the appropriate committee of jurisdiction. ", "Formally the presiding officer, but administratively the executive clerk's office, refers the nominations to committees according to the Senate's rules and precedents. The Senate rule concerning committee jurisdictions (Rule XXV) broadly defines issue areas for committees, and the same jurisdictional statements generally apply to nominations as well as legislation. An executive department nomination can be expected to be referred to the committee with jurisdiction over legislation concerning that department or to the committee that handled the legislation creating the position. Judicial branch nominations, including judges, U.S. attorneys, and U.S. marshals, are under the jurisdiction of the Judiciary Committee. In some instances, the committee of jurisdiction for a nomination has been set in statute.", "The number of nominations referred to various committees differs considerably. The Committee on Armed Services, which handles all military appointments and promotions, receives the most. The two other committees with major confirmation responsibilities are the Committee on the Judiciary, with its jurisdiction over nominations in the judicial branch, and the Committee on Foreign Relations, which considers ambassadorial and other diplomatic appointments.", "Occasionally, nominations are referred to more than one committee, either jointly or sequentially. A joint referral might occur when the jurisdictional claim of two committees is essentially equal. In such cases, both committees must report on the nomination before the whole Senate can act on it, unless the Senate discharges one or both committees. If two committees have unequal jurisdictional claims, then the nomination is more likely to be sequentially referred. In this case, the first committee must report the nomination before it is sequentially referred to the second committee. The second referral often is subject to a requirement that the committee report within a certain number of days. Typically, nominations are jointly or sequentially referred by unanimous consent. Sometimes the unanimous consent agreement applies to all future nominations to a position or category of positions."], "subsections": []}, {"section_title": "Committee Procedures", "paragraphs": [], "subsections": [{"section_title": "Written Rules", "paragraphs": ["Most Senate committees that consider nominations have written rules concerning the process. Although committee rules vary, most contain standards concerning information to be gathered from a nominee. Many committees expect a biographical resum\u00e9 and some kind of financial statement listing assets and liabilities. Some specify the terms under which financial statements will or will not be made public.", "Committee rules also frequently contain timetables outlining the minimum layover required between committee actions. A common timing provision is a requirement that nominations be held for one or two weeks before the committee proceeds to a hearing or a vote, permitting Senators time to review a nomination before committee consideration. Other committee rules specifically mandate a delay between steps of the process, such as the receipt of pre-hearing information and the date of the hearing, or the distribution of hearing transcripts and the committee vote on the nomination. Some of the written rules also contain provisions for the rules to be waived by majority vote, by unanimous consent, or by the chair and the ranking minority Member."], "subsections": []}, {"section_title": "Investigations", "paragraphs": ["Committees often gather and review information about a nominee either before or instead of a formal hearing. Because the executive branch acts first in selecting a nominee, congressional committees are sometimes able to rely partially on any field investigations and reports conducted by the Federal Bureau of Investigation (FBI). Records of FBI investigations are provided only to the White House, although a report or a summary of a report may be shared, with the President's authorization, with Senators on the relevant committee. The practices of the committees with regard to FBI materials vary. Some rarely if ever request them. On other committees, the chair and ranking Member review any FBI report or summary, but on some committees these materials are available to any Senator upon request. Committee staff usually do not review FBI materials.", "Almost all nominees are also asked by the Office of the Counsel to the President to complete an \"Executive Personnel Financial Disclosure Report, SF-278,\" which is reviewed and certified by the relevant agency as well as the Director of the Office of Government Ethics. The documents are then forwarded to the relevant committee, along with opinion letters from ethics officers in the relevant agency and the director of the Office of Government Ethics. In contrast to FBI reports, financial disclosure forms are made public. All committees review financial disclosure reports and some make them available in committee offices to Members, staff, and the public.", "To varying degrees, committees also conduct their own information-gathering exercises. Some committees, after reviewing responses to their standard questionnaire, might ask a nominee to complete a second questionnaire. Committees frequently require that written responses to these questionnaires be submitted before a hearing is scheduled. The Committee on the Judiciary sends form letters, sometimes called \"blue slips,\" to Senators from a nominee's home state to determine whether they support the nomination. The Committee on the Judiciary also has its own investigative staff. The Committee on Rules and Administration handles relatively few nominations and conducts its own investigations, sometimes with the assistance of the FBI or the Government Accountability Office (GAO).", "It is not unusual for nominees to meet with committee staff prior to a hearing. High-level nominees may meet privately with Senators. Generally speaking, these meetings, sometimes initiated by the nominee, serve basically to acquaint the nominee with the Members and committee staff, and vice versa. They occasionally address substantive matters as well. A nominee also might meet with the committee's chief counsel to discuss the financial disclosure report and any potential conflict-of-interest issues."], "subsections": []}, {"section_title": "Hearings", "paragraphs": ["Historically, approximately half of all civilian appointees were confirmed without a hearing. All committees that receive nominations do hold hearings on some nominations, and the likelihood of hearings varies with the importance of the position and the workload of the committee. The Committee on the Judiciary, for example, which receives a large number of nominations, does not usually hold hearings for U.S. attorneys, U.S. marshals, or members of part-time commissions. The Committee on Agriculture, Nutrition, and Forestry and the Committee on Energy and Natural Resources, on the other hand, typically hold hearings on most nominations that are referred to them. Committees often combine related nominations into a single hearing.", "The length and nature of hearings varies. One or both home-state Senators will often introduce a nominee at a hearing. The nominee typically testifies at the hearing, and occasionally the committee will invite other witnesses, including Members of the House of Representatives, to testify as well. Some hearings function as routine welcomes, while others are directed at influencing the policy program of an appointee. In addition to policy views, hearings might address the nominee's qualifications and potential conflicts of interest. Senators also might take the opportunity to ask questions of particular concern to them or their constituents.", "Committees sometimes send questions to nominees in advance of a hearing and ask for written responses. Nominees also might be asked to respond in writing to additional questions after a hearing. Especially for high-level positions, the nomination hearing may be only the first of many times an individual will be asked to testify before a committee. Therefore, the committee often gains a commitment from the nominee to be cooperative with future oversight activities of the committee.", "Hearings, under Senate Rule XXVI, are open to the public unless closed by majority vote for one of the reasons specified in the rule. Witness testimony is sometimes made available online through the website of the relevant committee and also through several commercial services, including Congressional Quarterly. Most committees print the hearings, although no rule requires it. The number of Senators necessary to constitute a quorum for the purpose of taking testimony varies from committee to committee, but it is usually smaller than a majority of the membership."], "subsections": []}, {"section_title": "Reporting", "paragraphs": ["A committee considering a nomination has four options. It may report the nomination to the Senate favorably, unfavorably, or without recommendation, or it may choose to take no action at all. It is more common for a committee to take no action on a nomination than to report unfavorably. Particularly for policymaking positions, committees sometimes report a nomination favorably, subject to the commitment of the nominee to testify before a Senate committee. Sometimes, committees choose to report a nomination without recommendation. Even if a majority of Senators on a committee do not agree that a nomination should be reported favorably, a majority might agree to report a nomination without a recommendation in order to permit a vote by the whole Senate. ", "The timing of a vote to report a nomination varies in accordance with committee rules and practice. Most committees do not vote to report a nomination on the same day that they hold a hearing, but instead wait until the next meeting of the committee. Senate Rule XXVI, clause 7(a)(1) requires that a quorum for making a recommendation on a nomination consist of a majority of the membership of the committee. In most cases, the number of Senators necessary to constitute a quorum for making a recommendation on a nomination to the Senate is the same that the committee requires for reporting a measure. Every committee reports a majority of nominations favorably.", "Most of the time, committees do not formally present reports on nominations on the floor of the Senate. Instead, committee staff prepare the appropriate paperwork on behalf of the committee chair and file it with the clerk. The executive clerk then arranges for the nomination to be printed in the Congressional Record and placed on the Executive Calendar . If a report were presented on the floor, it would have to be done in executive session. Executive session and the Executive Calendar will be discussed in the next section. According to Senate Rule XXXI, the Senate cannot vote on a nomination the same day it is reported except by unanimous consent."], "subsections": []}, {"section_title": "Discharging a Committee from Consideration of a Nomination", "paragraphs": ["It is fairly common for the Senate to discharge a committee from consideration of an unreported nomination by unanimous consent. This removes the nomination from the committee in order to allow the full Senate to consider it. When the Senate discharges a committee by unanimous consent, it is doing so with the support of the committee for the purposes of simplifying the process. ", "It is unusual for Senators to attempt to discharge a committee by motion or resolution, instead of by unanimous consent, and only a few attempts have ever been successful. Senate Rule XVII does permit any Senator to submit a motion or resolution that a committee be discharged from the consideration of a subject referred to it. The discharge process, however, does not allow a simple majority to quickly initiate consideration of a nomination still in committee. It requires several steps and, most notably, a motion or resolution to discharge is debatable. This means that a cloture process may be necessary to discharge a committee. Cloture on a discharge motion or resolution requires the support of three-fifths of the Senate, usually 60 Senators, and several days. "], "subsections": []}]}, {"section_title": "Floor Procedures", "paragraphs": ["The Senate handles executive business, which includes both nominations and treaties, separately from its legislative business. All nominations reported from committee, regardless of whether they were reported favorably, unfavorably, or without recommendation, are listed on the Executive Calendar , a separate document from the Calendar of Business , which lists pending bills and resolutions. Usually, the majority leader schedules the consideration of nominations on the Calendar. Nominations are considered in executive session, a parliamentary form of the Senate in session that has its own journal and, to some extent, its own rules of procedure."], "subsections": [{"section_title": "Executive Calendar", "paragraphs": ["After a committee reports a nomination or is discharged from considering it, the nomination is assigned a number by the executive clerk and placed on the Executive Calendar . Under a standing order of the Senate, certain nominations might also be placed in this status on the Executive Calendar after certain informational and time requirements are met. The list of nominations in the Executive Calendar includes basic information such as the name and office of the nominee, the name of the previous holder of the office, and whether the committee reported the nomination favorably, unfavorably, or without recommendation. Long lists of routine nominations are printed in the Congressional Record and identified only by a short title in the Executive Calendar , such as \"Foreign Service nominations (84) beginning John F. Aloia, and ending Paul G. Churchill.\" In addition to reported nominations and treaties, the Executive Calendar contains the text of any unanimous consent agreements concerning executive business.", "The Executive Calendar is distributed to Senate personal offices and committee offices when there is business on it. It is also available online by following the link to \"Calendars and Schedules\" on the Virtual Reference Desk under the Reference tab of the Senate website (www.Senate.gov) ."], "subsections": []}, {"section_title": "Executive Session", "paragraphs": ["Business on the Executive Calendar , which consists of nominations and treaties, is considered in executive session. In contrast, all measures and matters associated with lawmaking are considered in legislative session. Until 1929 executive sessions were also closed to the public, but now they are open unless ordered otherwise by the Senate.", "The Senate usually begins the day in legislative session and enters executive session either by a non-debatable motion or, far more often, by unanimous consent. Only if the Senate adjourned or recessed while in executive session would the next meeting automatically open in executive session. The motion to go into executive session can be offered at any time, is not debatable, and cannot be laid upon the table.", "All business concerning nominations, including seemingly routine matters such as requests for joint referral or motions to print hearings, must be done in executive session. In practice, Senators often make such motions or unanimous consent requests \"as if in executive session.\" These usually brief proceedings during a legislative session do not constitute an official executive session. In addition, at the start of each Congress, the Senate adopts a standing order, by unanimous consent, that allows the Senate to receive nominations from the President and for them to be referred to committees even on days when the Senate does not meet in executive session."], "subsections": []}, {"section_title": "Taking Up a Nomination", "paragraphs": ["The majority leader, by custom, makes most motions and requests that determine when or whether a nomination will be called up for consideration. For example, the majority leader may move or ask unanimous consent to \"immediately proceed to executive session to consider the following nomination on the Executive Calendar.... \" By precedent, the motion to go into executive session to take up a specified nomination is not debatable. The nomination itself, however, is debatable.", "It is not in order for a Senator to move to consider a nomination that is not on the Calendar, and, except by unanimous consent, a nomination on the Calendar cannot be taken up until it has been on the Calendar at least one day (Rule XXXI, clause 1). A day for this purpose is a calendar day. In other words, a nomination reported and placed on the Calendar on a Monday can be considered on Tuesday, even if it is the same legislative day.", "If the Senate simply resolved into executive session, the business immediately pending would be the first item on the Executive Calendar . A motion to proceed to another matter on the Calendar would be debatable and subject to a filibuster. For this reason, the Senate does not begin consideration of executive business this way. Instead, the motion made to call up a nomination is a motion to proceed to executive session to consider that specific nomination. If the Senate is already in executive session, and the Leader wishes to call up a nomination, the Leader will first move that the Senate enter legislative session and then that the Senate enter executive session to take up the nomination. Both motions (to enter legislative session and to enter executive session) are not subject to debate and are decided by a simple majority. Typically they are approved by voice vote."], "subsections": []}, {"section_title": "Consideration and Disposition", "paragraphs": ["The question before the Senate when a nomination is taken up is \"will the Senate advise and consent to this nomination?\" The Senate can approve or reject a nomination. A majority of Senators present and voting, a quorum being present, is required to approve a nomination. ", "According to Senate Rule XXXI, any Senator who voted with the majority on the nomination has the option of moving to reconsider a vote on the day of the vote or the next two days the Senate meets in executive session. Only one motion to reconsider is in order on each nomination, and often the motion to reconsider is laid upon the table, by unanimous consent, shortly after the vote on the nomination. This action prevents any subsequent attempt to reconsider. After the Senate acts on a nomination, the Secretary of the Senate attests to a resolution of confirmation or disapproval and transmits it to the White House.", "Many nominations are brought up by unanimous consent and approved without objection; routine nominations often are grouped by unanimous consent in order to be brought up and approved together, or en bloc . A small proportion of nominations, generally to higher-level positions, may need more consideration. When there is debate on a nomination, the chair of the committee usually makes an opening speech. For positions within a state, Senators from the state may wish to speak on the nominee, particularly if they were involved in the selection process. Under Senate rules, there are no time limits on debate except when conducted under cloture or a unanimous consent agreement. "], "subsections": []}, {"section_title": "Cloture", "paragraphs": ["Senate Rule XXII provides a means to bring debate on a nomination to a close, if necessary. Under the terms of Rule XXII, at least 16 Senators sign a cloture motion to end debate on a pending nomination. The motion proposed is \"to bring to a close the debate upon [the pending nomination].\" A Senator can interrupt a Senator who is speaking to present a cloture motion. Cloture may be moved only on a question that is pending before the Senate; therefore, absent unanimous consent, the Senate must be in executive session and considering the nomination when the motion is filed. After the clerk reads the motion, the Senate returns to the business it was considering before the presentation of the motion.", "Unless a unanimous consent agreement provides otherwise, the Senate does not vote on the cloture motion until the second day of session after the day it is presented; for example, if the motion was presented on a Monday, the Senate would act on it on Wednesday. One hour after the Senate has convened on the day the motion \"ripened,\" the presiding officer can interrupt the proceedings during an executive session to present a cloture motion for a vote. If the Senate is in legislative session when the time arrives for voting on the cloture motion, it proceeds into executive session prior to taking action on the cloture petition.", "According to Rule XXII, the presiding officer first directs the clerk to call the roll to ascertain that a quorum is present, although this requirement is often waived by unanimous consent. Senators then vote either yea or nay on the question: \"Is it the sense of the Senate that the debate shall be brought to a close?\" ", "In April 2017, the Senate reinterpreted Rule XXII in order to allow cloture to be invoked on all nominations by a majority of Senators voting (a quorum being present), including Supreme Court justice nominations. This expanded the results of similar actions taken by the Senate in November 2013, which changed the cloture vote requirement to a majority for nominations except to the Supreme Court. ", "Once cloture is invoked, for most nominations there can be a maximum of two hours of post-cloture consideration. The two hour maximum includes debate as well as any actions taken while the nomination is formally pending, including quorum calls. If cloture is invoked on nominations to the highest ranking executive branch positions, or on nominations to the Supreme Court or the U.S. Circuit Court of Appeals, then the maximum time for consideration after cloture is invoked is 30 hours (see Table 1 ). Under the rule, the 2 or 30 hours is floor time spent considering the nomination in the Senate, not simply the passage of time. Thus, for time to count against the 2 or 30-hour maximum, the Senate must be in session and the question must be pending. Time spent in recess or adjournment does not count, and if the Senate were to take up other business by unanimous consent, the time spent on that other business also would not count against the post-cloture time. "], "subsections": []}, {"section_title": "Holds", "paragraphs": ["A hold is a request by a Senator to his or her party leader to prevent or delay action on a nomination or a bill. Holds are not mentioned in the rules or precedents of the Senate, and they are enforced only through the agenda decisions of party leaders. A standing order of the Senate aims to ensure that any Senator who places a hold on any matter (including a nomination) make public his or her objection to the matter.", "Senators have placed holds on nominations for a number of reasons. One common purpose is to give a Senator more time to review a nomination or to consult with the nominee. Senators may also place holds because they disagree with the policy positions of the nominee. Senators have also admitted to using holds in order to gain concessions from the executive branch on matters not directly related to the nomination. ", "The Senate precedents reducing the threshold necessary to invoke cloture on nominations, and the recent precedent reducing the time necessary for a cloture process, could affect the practice of holds. In some sense, holds are connected to the Senate traditions of mutual deference, since they may have originated as requests for more time to examine a pending nomination or bill. The effectiveness of a hold, however, ultimately has been grounded in the power of the Senator placing the hold to filibuster the nomination and the difficulty of invoking cloture to overcome a filibuster. Invoking cloture is now easier because the support of fewer Senators is necessary, and in most cases, the floor time required for a cloture process is less. The large number of nominations submitted by the President for Senate consideration, however, might still lead Senators to seek unanimous consent to quickly approve nominations."], "subsections": []}]}, {"section_title": "Reduced Post-Cloture Time on Nominations: Some Possible Implications", "paragraphs": ["On April 3, 2019, the Senate reinterpreted Senate Rule XXII to reduce, from 30 hours to 2 hours, the maximum time allowed for consideration of most nominations after cloture is invoked. The Senate took this step by reversing two rulings by the Presiding Officer. The first vote established that \"postcloture time under rule XXII for all executive branch nominations other than a position at level 1 of the Executive Schedule under section 5312 of title 5 of the United States Code is 2 hours.\" On the second vote, the Senate established that \"postcloture time under rule XXII for all judicial nominations, other than circuit courts or Supreme Court of the United States, is 2 hours\" (see Table 1 ).", "It is uncommon for the Senate to reverse a decision by the Presiding Officer. Any Senator can attempt to reverse a ruling by making an appeal, and except in specific cases, appeals are decided by majority vote. In most circumstances, however, appeals are debatable, and therefore supermajority support (through a cloture process) is typically necessary to reach a vote to reverse a decision of the Presiding Officer. In the April 3 proceedings, however, the appeal was raised after cloture had been invoked. Senate Rule XXII states that after a successful cloture vote, \"appeals from the decision of the Presiding Officer, shall be decided without debate.\" Therefore, when the Majority Leader appealed the rulings of the Presiding Officer, the questions on whether the ruling should stand as the judgment of the Senate received a vote without an opportunity for extended debate. The Senate voted that the ruling should not stand, and thereby upheld instead the position of the Majority Leader. ", "The future impact of these decisions on the nominations process is difficult to assess. The immediate and obvious expected impact is that the time between a cloture vote and a confirmation vote will decrease. In recent years, a vote to confirm a nominee has typically occurred the day after cloture was invoked (or on the next day of Senate session). Usually, Senators did not spend all of the time between the votes debating the nomination. Instead, Senators typically debated the nomination for some time post-cloture, but also usually entered into unanimous consent agreements that affected when the vote would occur. For example, it became common in recent Congresses for the Senate to agree, by unanimous consent, to consider the time the Senate spent in adjournment or recesses (e.g., overnight) to count as post-cloture time. The cloture rule affected the time of the vote set by unanimous consent: the rule provided for up to 30 hours of consideration of the nomination, and the Senate would agree to vote on the nomination a day later\u2014reflecting the approximate time that the Senate could have debated the nomination under the rule. Assuming the Senate continues to establish times for voting on nominations by unanimous consent, those negotiations will be affected by the reinterpretation of the rule. ", "In the absence of a unanimous consent agreement, most nominations can now receive a vote two hours after a vote to invoke cloture. The two hours is not formally divided between the parties pursuant to the rule (or pursuant to the reinterpretation of the rule), but it might be divided, by unanimous consent, between the Majority and Minority Leader. Even without an explicit unanimous consent agreement, the Majority and Minority Leaders are recognized before any other Senators. In addition, a Senator can speak for a maximum of one hour post-cloture. As a result, the Majority Leader could claim the first hour, and the Minority Leader the second, or vice versa. (Of course, Senators could speak on a nomination at times other than after cloture has been invoked, even when the nomination is not formally pending before the Senate. )", "It is also possible that the recent reinterpretation of the rule will affect how often the Senate relies on the cloture process to approve nominations. After the first reinterpretation of the cloture rule in 2013, the number of nominations subjected to cloture motions increased significantly in both of the Congresses when the Senate was controlled by the same party as the President (113 th (2013-2014) and 115 th (2017-2018) Congresses). "], "subsections": []}, {"section_title": "Nominations Returned to the President", "paragraphs": ["Nominations that are not confirmed or rejected are returned to the President at the end of a session or when the Senate adjourns or recesses for more than 30 days (Senate Rule XXXI, paragraph 6). If the President still wants a nominee considered, he must submit a new nomination to the Senate. The Senate can, however, waive this rule by unanimous consent, and it often does to allow nominations to remain \"in status quo\" between the first and second sessions of a Congress or during a long recess. The majority leader or his designee also may exempt specific nominees by name from the unanimous consent agreement, allowing them to be returned during the recess or adjournment."], "subsections": []}, {"section_title": "Recess Appointments", "paragraphs": ["The Constitution, in Article II, Section 2, grants the President the authority to fill temporarily vacancies that \"may happen during the Recess of the Senate.\" These appointments do not require the advice and consent of the Senate; the appointees temporarily fill the vacancies without Senate confirmation. In most cases, recess appointees have also been nominated to the positions to which they were appointed. Furthermore, when a recess appointment is made of an individual previously nominated to the position, the President usually submits a new nomination to the Senate in order to comply with a provision of law affecting the pay of recess appointees (5 U.S.C. 5503(a)). Recess appointments have sometimes been controversial and have occasionally led to inter-branch conflict."], "subsections": []}]}}
{"id": "R45480", "title": "U.S. Department of the Interior: An Overview", "released_date": "2019-01-31T00:00:00", "summary": ["The U.S. Department of the Interior (DOI) is a federal executive department responsible for the conservation and administration of the public lands and mineral estate of the United States. DOI describes its mission as protecting and managing the nation's natural resources and cultural heritage for the benefit of the American people; providing scientific and scholarly information about those resources and natural hazards; and exercising the nation's trust responsibilities and special commitments to American Indians, Alaska Natives, and island territories under U.S. administration.", "As part of its responsibilities, DOI oversees and fosters the use of more than 480 million acres of public lands, 700 million acres of subsurface minerals, and 1.7 billion acres of the outer continental shelf. Each year, Congress deliberates legislation that could affect DOI's management of this vast federal estate. As a result, understanding the roles and responsibilities of DOI's various components and offices is valuable when crafting legislation that affects the department's operations and ability to fulfill its mission.", "DOI primarily implements its responsibilities and mission through nine technical bureaus that make up more than 80% of the agency's workforce. These technical bureaus are the Bureau of Indian Affairs (BIA), Bureau of Land Management (BLM), Bureau of Ocean Energy Management (BOEM), Bureau of Reclamation (Reclamation), Bureau of Safety and Environmental Enforcement (BSEE), National Park Service (NPS), Office of Surface Mining Reclamation and Enforcement (OSMRE), U.S. Fish and Wildlife Service (FWS), and U.S. Geological Survey (USGS). Each of these bureaus has a unique mission and set of responsibilities, as well as a distinct organizational structure that serves to meet its functional duties. In addition to these technical bureaus, DOI has multiple departmental offices, which provide leadership, coordination, and services to DOI's various bureaus and programs.", "As of June 2018, DOI employed a staff of 69,563 nationwide across its bureaus and offices. However, total DOI employment figures fluctuate throughout the year, as some bureaus rely on seasonal and part-time staff, increasing staff totals during the summer months. The Office of Personnel Management (OPM) reports the average total DOI employment as 65,350 for the four reporting periods from September 2017 to June 2018. The largest bureau within DOI based on number of staff is NPS, which averaged close to 20,000 staff over the same time period\u2014more than twice the size of the second-largest bureau, BLM. The smallest technical bureau by employment is OSMRE, which averaged just over 400 employees. Approximately 10% of all DOI staff are within the District of Columbia core-based statistical area (CBSA), which includes the District of Columbia and selected counties in Maryland, Virginia, and West Virginia.", "Congress provides discretionary appropriations for DOI through two annual appropriations bills: the Interior, Environment, and Related Agencies bill and the Energy and Water appropriations bill. Enacted discretionary appropriations for FY2018 totaled $14.6 billion. DOI also received $566 million in supplemental emergency appropriations in FY2018, for a total of $15.2 billion in discretionary appropriations for FY2018.", "The organizational structure of DOI is subject to continual congressional oversight and executive branch examination. In 2017 and 2018, President Trump and then-Secretary of the Interior Ryan Zinke submitted reorganization plans for the department and its bureaus. These plans put forth several recommendations, including the consolidation and transfer of most functions of the Army Corps of Engineers Civil Works Division to DOI, the merger of the Department of Commerce's National Marine Fisheries Service with FWS, and the creation of 12 \"Unified Regional Boundaries\" across DOI's various bureaus."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Department of the Interior (DOI) is a federal executive department responsible for the conservation and use of roughly three-quarters of U.S. public lands. DOI defines its mission as to protect and manage the nation's natural resources and cultural heritage for the benefit of the American people; to provide scientific and scholarly information about those resources and natural hazards; and to exercise the country's trust responsibilities and special commitments to American Indians, Alaska Natives, and island territories under U.S. administration. Initially conceived as a \"home department\" in 1849 to oversee a broad array of internal affairs, DOI has evolved to become the nation's principal land management agency, charged with administering the use of more than 480 million acres of public lands, 700 million acres of subsurface minerals, and 1.7 billion acres of the outer continental shelf (OCS).", "As is the case for many federal departments, DOI's organizational structure and functions are under continual congressional examination as part of Congress's lawmaking and oversight functions. Similarly, DOI's executive branch structure and operations are also the subject of administrative scrutiny. Over the course of the department's roughly 170-year history, DOI has evolved in response to the needs of the nation and at the behest of Congress and the President (see Figure 1 for a timeline of selected events that influenced the current structure of the department). Some of these changes have been relatively broad in nature, such as the creation of a new agency or regulatory body. Other shifts have been smaller in scope, such as modifications to interagency processes or reorganizations in how resources or responsibilities are distributed among offices or programs.", "DOI reorganization proposals put forth by the Trump Administration have renewed attention to the structural relationship between the department's various bureaus and their regulatory responsibilities. In March 2017, President Trump signed an executive order calling on agency leaders to, \"if appropriate,\" submit a proposed reorganization plan for their agencies to the director of the Office of Management and Budget within 180 days. In September 2017, then-Secretary of the Interior Ryan Zinke issued a reorganization proposal for DOI in response to this order. In June 2018, President Trump issued a more expansive government-wide reorganization proposal, which included further recommendations and proposals affecting the structure of DOI. In addition to these broader proposals, smaller interagency administrative changes either took effect in FY2019 or are proposed for FY2019 implementation, including the transfer and consolidation of several department offices and programs.", "This report is a primer to understanding the organizational framework under which DOI operates, while providing context for how ongoing and proposed reorganizations might affect these operations. The report provides a timeline of congressional and executive actions that have shaped the structure and function of DOI since its establishment. It also offers a brief summary of DOI's history, mission, and current structure, as well as an overview of the primary functions of its multiple bureaus and offices as of December 2018. Employment figures and corresponding maps illustrate the varying regional office structures among DOI bureaus, as they exist currently. In addition, the report includes an overview of the annual funding and appropriations process for the department. Although the report provides a broad summary of the proposed reorganization efforts under way or in effect as of December 2018, it does not offer a detailed analysis of these plans or their potential impact on DOI's structure and function. A list of CRS experts for the issue areas covered by DOI and its bureaus is at the end of the report. In general, this report contains the most recently available data and estimates as of December 2018."], "subsections": []}, {"section_title": "Establishment of the Department: A Brief History", "paragraphs": ["Prior to the establishment of DOI in 1849, Congress apportioned domestic affairs in the United States across the three original executive departments: Department of State, Department of War (now Department of Defense), and Department of the Treasury. The Department of State housed the nation's Patent Office, and the Department of War housed the Office of Indian Affairs and the Pension Office, which at the time administered pensions solely for military personnel. Meanwhile, the General Land Office (GLO), which oversaw and disposed of the public domain, was placed by Congress within the Department of the Treasury because of the revenue generated by the GLO from land sales. ", "By the 1840s, the growing federal estate acquired through the Louisiana Purchase, the Mexican-American War, and the newly negotiated Oregon Territory placed an increasing burden on the departments and their leadership. In 1848, then-Secretary of the Treasury Robert J. Walker submitted to Congress a proposal that would bring together GLO, the Office of Indian Affairs, and several other disparate offices and functions under a single, separate executive department. Congress officially established the Department of the Interior on March 3, 1849. ", "In addition to absorbing the functions of the Patent Office, the Office of Indian Affairs, Pension Office, and GLO, the newly established DOI assumed responsibility for a wide range of other domestic matters. As part of DOI's organic legislation, Congress conferred on the Secretary of the Interior the \"supervisory and appellate powers\" held by the President over the commissioner of Public Buildings, as well as oversight responsibility for both the U.S. Census and the Penitentiary of the District of Columbia. Over time, Congress further expanded the department's functions to include the construction of the national capital's water system, the colonization of freed slaves in Haiti, water pollution control, and the regulation of interstate commerce. Most of these early activities eventually were transferred from DOI's charge as Congress began to authorize and create new executive departments and independent agencies to handle this growing list of responsibilities. ", "Now, DOI has evolved to focus primarily on protecting and managing natural resources, conducting scientific research, and exercising the nation's trust responsibilities to American Indians, Alaska Natives, and affiliated island communities. "], "subsections": []}, {"section_title": "DOI Today: Leadership, Structure, and Functions", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["DOI is a Cabinet-level department that employs approximately 65,000 full-time employees across nine technical bureaus and various administrative and programmatic offices. In addition to its headquarters in Washington, DC, DOI has staff in roughly 2,400 locations across the United States, including both regional offices and field centers. Each of DOI's technical bureaus and programmatic offices has a unique mission and set of responsibilities, as well as a distinct organizational structure that serves to meet its functional duties. Figure 2 shows the DOI organization chart as of December 2018."], "subsections": []}, {"section_title": "Leadership", "paragraphs": ["The leadership team and senior executives of DOI provide oversight and guidance for the department's various offices, bureaus, and field locations. The department is administered and overseen by the Secretary of the Interior (referred to in this report as the Secretary ) and a Deputy Secretary, who serves in a leadership capacity under the Secretary. The President appoints both positions, and the U.S. Senate confirms them (see text box for a full list of DOI appointees requiring Senate confirmation). Serving under the Secretary and Deputy Secretary are six Assistant Secretaries, who oversee DOI's nine technical bureaus and different administrative and programmatic offices (see Figure 2 for these position titles and responsibilities).", "In addition to the Secretary, the Deputy Secretary, and the six Assistant Secretaries, DOI has a number of other congressionally mandated leadership positions. Like other Cabinet-level agencies, DOI has an inspector general, who administers the office responsible for providing oversight to DOI's programs, operations, and management. The DOI solicitor heads the Office of the Solicitor, which provides legal counsel, advice, and representation for the department. In 1994, Congress established the position of special trustee for Indian Affairs to manage DOI's fiduciary responsibilities to American Indians. Since its establishment, the Office of the Special Trustee (OST) has operated independently from the Bureau of Indian Affairs (BIA), which held these responsibilities prior to 1994. Finally, the chairperson of the National Indian Gaming Commission oversees an independent regulatory body within DOI responsible for administering and promoting economic development through gaming on Indian lands. Similar to the Special Trustee, the chairperson of the commission operates in an independent capacity separate from the Assistant Secretary of Indian Affairs."], "subsections": []}, {"section_title": "Technical Bureaus: History, Missions, and Current Structures", "paragraphs": ["Nine technical bureaus comprising more than 90% of the DOI workforce are responsible for implementing the department's mission and responsibilities. The names, structures, and duties of these bureaus have evolved over time in accordance with both administrative actions and shifts in the authorities provided to them by Congress. Below is a brief overview of each bureau, the historical context within which it was created, its organizational structure, and its current mission and responsibilities.", "Bureaus appear below in alphabetical order. An \"At a Glance\" box provides a snapshot of key information and data for each respective bureau. The \"Established\" date reflects the year in which a bureau was created. The \"Key Statute\" listed may represent the initial legislative authorization for a bureau to carry out its regulatory duties, or it may reference an agency's organic act, which articulates it mission and/or responsibilities. This information does not reflect the full list of governing statutes for DOI bureaus, as each bureau is subject to numerous laws. The number of employees listed for each bureau reflects the average for the four reporting periods from September 2017 to June 2018, with employment figures rounded to the nearest hundred, as reported to OPM. These annual averages differ from the figures included in the narrative sections of each agency, which reflect June 2018 figures, the most recently reported by OPM's Fedscope database as of the publication of this report. DOI employee data are discussed in more detail in the section \"DOI Employment.\""], "subsections": [{"section_title": "Bureau of Indian Affairs (BIA)", "paragraphs": ["Established in 1824, the Bureau of Indian Affairs (BIA) is the oldest bureau within DOI, predating the department by 25 years. Then-Secretary of War John C. Calhoun established the Office of Indian Affairs to help centralize what was at the time a fractured administrative approach to Indian policy and relations in the United States. It was not until 1832 that Congress officially recognized the Office of Indian Affairs as a bureau of the War Department by appointing a commissioner to oversee the agency. The Office of Indian Affairs was transferred to DOI in 1849, when the department was created. DOI formally adopted the name Bureau of Indian Affairs in 1947.", "BIA provides services to federally recognized American Indian and Alaska Native tribes and their nearly 1.9 million members. These services include disaster relief, child welfare, and road construction, as well as the operation and funding of law enforcement, tribal courts, and detention facilities within native villages and reservations. The bureau also is responsible for protecting and administering assets on tribal lands, including the management of 55 million surface acres and 57 million acres of subsurface mineral estates held in trust by the United States. ", "The BIA was also previously responsible for providing elementary and secondary education and educational assistance to Indian children through BIA's Office of Indian Education Programs. In 2006, however, the Secretary of the Interior separated the BIA education programs from the rest of the BIA and placed them in a new Bureau of Indian Education (BIE) under the Assistant Secretary\u2014Indian Affairs. As of FY2018, the BIE education system served approximately 47,000 students through 169 elementary/secondary schools and 14 dormitories located in 23 states. For the purposes of this report, BIE is not considered a technical bureau of DOI. However, BIE employment figures are included in BIA totals listed above and in the \" DOI Employment Levels \" section.", "The BIA is administered by a director who oversees the agency's functions and reports to the Assistant Secretary of Indian Affairs. Similar to other DOI agencies, the BIA has a three-tiered organizational structure, with leadership and senior executives operating from headquarters in Washington, DC, and 12 regional offices that oversee 53 field offices (referred to as agencies by the BIA); these agencies deliver program services directly to tribal communities. As of June 2018, the BIA and BIE combined had roughly 7,000 employees."], "subsections": []}, {"section_title": "Bureau of Land Management (BLM)", "paragraphs": ["The Bureau of Land Management (BLM) was created in 1946, following the merger of DOI's General Land Office (GLO) and the U.S. Grazing Service, known previously as the Division of Grazing Control and subsequently as the Division of Grazing. BLM manages just under 250 million acres of public land \u2014 roughly 10% of the total U.S. land area. The vast majority of this land (more than 99%) is located in 12 western states, including Alaska. The agency also is responsible for approximately 800 million acres of the federal onshore subsurface mineral estate and for mineral development on about 60 million acres of Indian trust lands. BLM manages public lands under the dual framework of multiple use and sustained yield, as required under the Federal Land Policy and Management Act of 1976. These uses include a wide range of activities, such as energy and mineral development, livestock grazing, and preservation, as well as hunting, fishing, and other recreational activities.", "The BLM national headquarters in Washington, DC, is home to the agency's leadership, which provides strategic direction, policy guidance, and oversight of BLM's national-level activities. Twelve state offices\u2014which are akin to the regional office structure of other agencies\u2014carry out BLM's mission within their respective geographical areas of jurisdiction. Reporting to these 12 state offices are numerous district offices, which are further divided into localized field offices. Field offices oversee the day-to-day management of public land resources and the on-the-ground delivery of BLM programs and services. BLM also has several national-level support and service centers. As of June 2018, BLM had roughly 10,700 employees."], "subsections": []}, {"section_title": "Bureau of Ocean Energy Management (BOEM)", "paragraphs": ["Established in 2010, the Bureau of Ocean Energy Management (BOEM) manages development of the nation's energy and mineral resources on the outer continental shelf (OCS). The Outer Continental Shelf Lands Act (OCSLA) of 1953 defines the OCS as all submerged lands lying seaward of state coastal waters that are subject to federal jurisdiction, constituting approximately 1.7 billion acres. Under OCSLA, the Secretary of the Interior has the authority to manage the development of the OCS. ", "Prior to BOEM's establishment, the Secretary delegated the leasing and management authority granted by OCSLA to the DOI agency known as the Minerals Management Service (MMS). During its existence, MMS had three primary responsibilities concerning offshore development: resource management, safety and environmental oversight and enforcement, and revenue collection. Following the Deepwater Horizon oil spill in 2010, concerns about perceived conflicts between these three missions prompted then-Secretary of the Interior Ken Salazar to reorganize the agency. MMS was formally abolished, and three new units were established within DOI: BOEM, the Bureau of Safety and Environmental Enforcement (BSEE), and the Office of Natural Resource Revenue (ONRR).", "As of June 2018, BOEM employed approximately 500 people to carry out its mission of managing offshore conventional and renewable energy resources on the OCS. The agency's leadership in Washington, DC, divides itself between three programmatic offices covering strategic resource development, environmental analysis and applied science, and offshore renewable energy development. Meanwhile, regional offices oversee on-the-ground operations and policy implementation in the four OCS regions in the Atlantic, the Gulf of Mexico, the Pacific, and Alaska."], "subsections": []}, {"section_title": "Bureau of Reclamation (Reclamation)", "paragraphs": ["The large-scale construction of federal dams and irrigation projects throughout the 20 th century was born, in part, out of a growing need for water supplies in the arid and rapidly expanding western United States. To meet this need, Congress passed the Reclamation Act of 1902, which set aside federal dollars to fund irrigation projects in 13 western states. ", "Shortly thereafter, Congress established the U.S. Reclamation Service as a program within the U.S. Geological Survey (USGS). In its first five years, the service began work on more than 30 projects across the American West. In 1907, the Secretary of the Interior elevated the program to an independent bureau within DOI before renaming it the Bureau of Reclamation (Reclamation) in 1923. Since its establishment, Reclamation has constructed or overseen the completion of more than 600 projects across the western United States. Beneficiaries of these projects generally repay the costs for construction and operations of these facilities to the federal government over extended terms (in some cases without interest). The exception are costs deemed \"federal\" in nature, as federal costs are nonreimbursable.", "Whereas Reclamation originally focused almost entirely on building new water storage and diversion projects, the agency now largely focuses on the operation and maintenance of existing facilities. Reclamation's mission also has expanded to include support for other efforts to improve water supplies in the western United States, such as promoting water reuse and recycling efforts, desalination projects, and Indian water rights settlements.", "A presidentially appointed commissioner oversees the work of Reclamation and, along with other senior-level executives, manages the overall operations of the agency from its headquarters in Washington, DC. Due to the amount of projects and employees based in western states, Reclamation also maintains federal offices in Denver, CO, which administer many of Reclamation's programs, initiatives, and activities. These programs include efforts that address dam safety, flood hydrology, fisheries and wildlife resources, and research programs that seek to improve management and increase water supplies. Meanwhile, five regional offices manage Reclamation's water projects and oversee various local area offices responsible for the day-to-day operations of the nearly 180 projects currently under the agency's authority. As of June 2018, Reclamation had roughly 5,500 employees."], "subsections": []}, {"section_title": "Bureau of Safety and Environmental Enforcement (BSEE)", "paragraphs": ["Following the 2010 restructuring of MMS, the Bureau of Safety and Environmental Enforcement (BSEE) inherited the safety and environmental enforcement functions previously carried out by MMS. These functions are primarily concerned with the offshore energy industry on the OCS\u2014largely oil and natural gas production. BSEE's responsibilities include regulation of worker safety, emergency preparedness, environmental compliance, and resource conservation.", "BSEE is administered by a director based out of the agency's headquarters in Washington, DC. The agency also has a second headquarters location in Sterling, VA, that oversees many of BSEE's national programs (see below) and provides technical and administrative support for the bureau. To carry out the duties of the department, BSEE coordinates between leadership in these two locations and staff operating across three regional offices (serving Alaska, the Pacific, and the Gulf of Mexico OCS regions), and five Gulf Coast district offices (Houma, Lafayette, Lake Charles, and New Orleans, LA, and Lake Jackson, TX). \u00a0Senior leadership sets the policies and performance goals implemented at these local offices across the agency's six national programs. As of June 2018, BSEE had approximately 800 employees across the United States."], "subsections": []}, {"section_title": "National Park Service (NPS)", "paragraphs": ["In 1916, the National Park Service Organic Act (Organic Act) centralized administration of the nation's national parks and national monuments. With the Organic Act, Congress created the National Park Service (NPS) and established the agency's dual mandate\u2014to protect the country's natural and cultural resources while providing for their public use and enjoyment. In undertaking that mission, NPS administers approximately 80 million acres of federal land, including 418 units that comprise the National Park System across all 50 states and U.S. territories.", "Each NPS unit is overseen by a park superintendent, who manages day-to-day administration in accordance with both the agency's mission and any laws and regulations specific to the unit. These units and their leadership report to seven regional directors, who oversee park management and program implementation across defined geographic regions. At the national level, NPS is led by a director and senior executives who manage national programs, policy, and budget from the agency's headquarters in Washington, DC. As of June 2018, NPS employed roughly 23,000 employees."], "subsections": []}, {"section_title": "Office of Surface Mining Reclamation and Enforcement (OSMRE)", "paragraphs": ["The Office of Surface Mining Reclamation and Enforcement (OSMRE) was established as a bureau within DOI following passage of the Surface Mining Control and Reclamation Act (SMCRA) in 1977. The law provided the new agency with the statutory authority to carry out and administer a nationwide program aimed at regulating coal mining in the United States. In particular, OSMRE works with states and tribal communities to reclaim abandoned coal mines, and regulate active surface coal mining operations to minimize adverse impacts to the environment and local communities. SMCRA also authorizes OSMRE to issue federal payments to the United Mine Workers of America (UMWA) coal mineworker health benefits plans.", "OSMRE serves as the lead regulatory authority over surface coal mining and reclamation activities for states and tribal communities under the authority granted by Title V of SMCRA. SMCRA does, however, allow OSMRE to delegate regulatory primacy to states and tribes upon demonstration that a given state or tribe has established regulatory requirements consistent with federal standards. Although OSMRE operates in an oversight capacity for states that have established such regulatory primacy, no tribe has attained this delegated authority to date (although tribes are eligible to seek regulatory primacy as well). ", "OSMRE fulfills its missions through a three-tiered organizational structure: headquarters in Washington, DC; three regional Offices (Appalachian, Mid-continent, and Western Offices); and multiple area and field Offices that report directly to the regional offices. OSMRE is the smallest of DOI's technical bureaus, employing approximately 400 people nationwide as of June 2018."], "subsections": []}, {"section_title": "U.S. Fish and Wildlife Service (FWS)", "paragraphs": ["The U.S. Fish and Wildlife Service (FWS) is the principal federal agency tasked with the conservation, protection, and restoration of fish, wildlife, and natural habitats across the United States and its insular territories. The history of FWS can be traced back to the creation of two now-defunct agencies in the late 1800s: the U.S. Commission on Fish and Fisheries in the Department of Commerce and the Division of Economic Ornithology and Mammalogy in the Department of Agriculture. These two agencies were transferred to DOI in 1939 and subsequently consolidated, creating a single agency known at the time as the Fish and Wildlife Service. In 1956, Congress established the U.S. Fish and Wildlife Service.", "The FWS has a primary-use mission \"to conserve, protect and enhance fish, wildlife and plants and their habitats for the continuing benefit of the American people.\" Among its responsibilities, FWS manages the National Wildlife Refuge System (NWRS) under the authority granted by the National Wildlife Refuge System Administration Act of 1966. The NWRS is a network of lands and waters set aside to conserve the nation's fish, wildlife, and plants that has grown to include more than 560 refuges, 38 wetland management districts, and other protected areas. More than 836 million acres of lands and waters comprise the NWRS; of these lands and waters, 146 million acres are classified as National Wildlife Refuges.", "In addition, FWS, along with the National Oceanic and Atmospheric Administration (NOAA) in the Department of Commerce, is responsible for implementing the Endangered Species Act (ESA). The ESA aims to protect species that are in danger of becoming extinct or could be in danger of becoming extinct in the near future. FWS also assists in international conservation efforts, enforces federal wildlife laws, and administers grant funds to states and territories for fish and wildlife programs.", "Similar to most DOI agencies, FWS has a three-tiered organizational structure comprised of national, regional, and local field offices across the United States. The headquarters office\u2014led by an agency director\u2014is split between two locations in Washington, DC, and Falls Church, VA, which together have primary responsibility for policy formulation and budgeting across the agency's 13 major program areas. Eight regional offices oversee FWS field offices and science centers across the United States and U.S. territories, which implement these policies and programs at the local level. As of June 2018, FWS had roughly 9,000 employees across the country."], "subsections": []}, {"section_title": "U.S. Geological Survey (USGS)", "paragraphs": ["In 1878, the National Academy of Sciences issued a report to Congress asking Congress to provide a plan for surveying and mapping the western territories of the United States. In response, Congress passed an appropriations bill the following year that authorized the creation of the U.S. Geological Survey (USGS). Congress established the USGS for the express purpose of overseeing the \"classification of the public lands, and examination of the geological structure, mineral resources, and products of the national domain.\" The authorities and responsibilities of USGS have shifted and evolved over time, with many of its prior activities leading to the formation of new governmental agencies. Today, however, USGS serves as the science agency of DOI, providing physical and biological information across seven interdisciplinary areas: (1) water resources, (2) climate and land use change, (3) energy and minerals, (4) natural hazards, (5) core science systems, (6) ecosystems, and (7) environmental health. Unlike other DOI bureaus, USGS has no regulatory or land management mandate.", "In addition to its seven programmatic areas, USGS is further organized into seven geographic regions, each under the supervision of a regional director. The regional directors report to a presidentially appointed director based out of the agency's headquarters in Reston, VA. Within each region, USGS operates science centers, laboratories, and field offices that monitor, assess, and conduct research on a wide range of topics. Overall, USGS had roughly 8,000 employees as of June 2018."], "subsections": []}]}, {"section_title": "Departmental Offices and Programs89", "paragraphs": ["In addition to the nine technical bureaus, DOI has multiple departmental offices that provide leadership, coordination, and services to the department's various bureaus and programs. These offices coordinate department-wide activities and oversee specialized functions under DOI's jurisdiction not administered directly at the bureau level. "], "subsections": [{"section_title": "Office of the Secretary", "paragraphs": ["The Office of the Secretary provides leadership for the entire department through the development of policy and through executive oversight of the annual budget and appropriations process. The Office of the Secretary also manages the administrative operations of DOI, including (but not limited to) financial services, information technology and resources, acquisition, and human resources. In addition, the Office of the Secretary manages six other department-wide programs, offices, and revolving funds:", "1. Central Hazardous Materials Fund provides remediation services to national parks, national wildlife refuges, and other DOI-managed lands impacted by hazardous substances. This remediation process follows the guidelines established under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)\u2014also known as the Superfund statute. 2. Natural Resource Damage Assessment and Restoration program coordinates and oversees DOI's restoration efforts for DOI-managed lands impacted by oil spills or the release of hazardous substances. In partnership with federal, state, and tribal co-trustees, the program conducts damage assessments, planning, and restoration implementation on DOI lands. 3. Office of Natural Resource s Revenue (ONRR) is responsible for the collection, accounting, and verification of any natural resource and energy revenue generated from federal and Indian leases and royalty payments. (See \" Bureau of Ocean Energy Management \" section for the history behind ONRR's creation.) 4. Payments in Lieu of Taxes (PILT) program makes payments to nearly 1,900 local government units across the United States and its insular areas where certain federal lands are located. The PILT payments are intended to help offset the loss in property taxes to local governments caused by the presence of federal lands, which largely are exempt from taxation. 5. Wildland Fire Management program is responsible for addressing wildfires on public lands. The program is comprised of the Office of Wildland Fire and the four DOI land management bureaus with wildland fire management responsibilities (BIA, BLM, FWS, and NPS). 6. Working Capital Fund (WCF) is a revolving fund that finances centralized administrative services and systems to DOI bureaus and offices. The WCF aims to reduce duplicative systems and staff across DOI; it provides financing for centralized functions that provide payroll, accounting, information technology, and other support services. "], "subsections": []}, {"section_title": "Office of the Solicitor", "paragraphs": ["In 1946, Congress established the Office of the Solicitor to provide advice, counsel, and legal representation to DOI. The office manages DOI's Ethics Office and resolves Freedom of Information Act appeals. To accomplish this work, the Office of the Solicitor employs more than 400 employees, 300 of whom are licensed attorneys. The Office of the Solicitor is organized into the Immediate Office of the Solicitor, the Ethics Office, five legal divisions, an administrative division, and eight regional offices."], "subsections": []}, {"section_title": "Office of the Inspector General", "paragraphs": ["In 1978, Congress established inspector general positions and offices in more than a dozen specific departments and agencies, including DOI. The mission of the Office of the Inspector General (OIG) is to provide independent oversight and accountability to the programs, operations, and management of the department. OIG has three primary office divisions: (1) the Office of Management serves as the administrative arm; (2) the Office of Investigations conducts, supervises, and coordinates internal investigations on a variety of potential abuses; and (3) the Office of Audits, Inspections, and Evaluations reviews DOI programs and operations for effectiveness and evaluates the financial statements and expenditures of these programs. The OIG also operates three regional offices, located in Herndon, VA; Lakewood, CA; and Sacramento, CA."], "subsections": []}, {"section_title": "Office of the Special Trustee for American Indians", "paragraphs": ["The American Indian Trust Fund Management Reform Act established the Office of the Special Trustee for American Indians (OST) in 1994. The OST provides fiduciary oversight and management of the more than 55 million surface acres and 57 million subsurface mineral acres of tribal assets held in trust by the federal government. The office carries out its mission from a national office in Washington, DC, and through five regional offices across the nation. ", "The OST operates independently from BIA, which carried out these trust responsibilities prior to the 1994 legislation. However, in 2016, Congress passed the Indian Trust Asset Reform Act (ITARA) requiring the Secretary to prepare \"a transition plan and timetable for the termination of the Office of the Special Trustee\" within two years. Although OST still exists, the 2019 Budget Justification proposes transferring some of the functions of OST to other DOI agencies and offices to comply with the reorganization requirements mandated by Congress in ITARA. The Budget Justification also includes a proposal to have OST \u2014 and the appointed Special Trustee \u2014 report directly to the Assistant Secretary of Indian Affairs starting in FY2019. More information regarding this change in OST organizational structure and function is provided in the \" DOI Reorganization Plans and Proposals: Issues\u00a0for\u00a0Congress \" section."], "subsections": []}, {"section_title": "Office of Insular Affairs", "paragraphs": ["The United States acquired its first insular territories in 1898 with the annexation of the Hawaiian Islands and the acquisition of Puerto Rico, Guam, and the Philippines from Spain following the Spanish-American War. For much of the early 20th century, territorial oversight of these new possessions fell largely to the War Department. In 1934, President Franklin D. Roosevelt created the Division of Territories and Island Possessions to centralize responsibility for coordinating oversight of the nation's insular regions. The division\u2014now known as the Office of Insular Affairs\u2014currently administers federal oversight of American Samoa, Guam, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands, with the goal of promoting their economic, social, and political development. The office also administers federal assistance and U.S. economic commitments to the Freely Associated States: the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau."], "subsections": []}]}]}, {"section_title": "DOI Employment Levels", "paragraphs": ["As of June 2018, the total number of employees working for DOI was 69,563, according to OPM (see Table 1 ). The data reflect \"on-board employment\" figures, which calculate the number of employees in pay status at the end of the quarter. Data are published on a quarterly basis (March, June, September, and December); however, figures for September and December 2018 were not available prior to the publication of this report. Because OPM data include full-time, part-time, and seasonal staff, employment totals tend to spike during the summer months, when agencies such as NPS, BLM, and FWS increase their seasonal workforce. ", "OPM figures differ from DOI Budget Office data. The DOI Budget Office calculates employment by full-time equivalents (FTEs), defined as the total number of regular straight-time hours (not including overtime or holiday hours) worked by employees, divided by the number of compensable hours applicable to each fiscal year. ", "The OPM Fedscope data presented in Table 1 are available by location of employment for each bureau and office reflected. Table 2 shows DOI employment figures both within and outside the DC core-based statistical area (CBSA). OPM defines a CBSA as \"a geographic area having at least one urban area of population, plus adjacent territory that has a high degree of social and economic integration with the core as measured by commuting ties.\" CBSAs differ from metropolitan statistical areas (MSAs)\u2014a separate statistical definition also reported on by OPM\u2014which typically encompass a smaller geographic area than CBSAs. For example, the DC MSA includes many but not all of the counties and surrounding cities covered under the DC CBSA. For instance, the DC MSA excludes Reston, VA, where the headquarters of USGS is located. "], "subsections": []}, {"section_title": "Overview of DOI Appropriations", "paragraphs": ["Discretionary funding for DOI is provided primarily through Title I of the annual Interior, Environment, and Related Agencies appropriations bill. The Bureau of Reclamation (Reclamation) and the Central Utah Project are the exceptions, as they receive funding through the Energy and Water Development appropriations bill. Several of the agencies that receive discretionary funds through these two appropriations bills also receive mandatory funding under various authorizing statutes. "], "subsections": [{"section_title": "DOI Discretionary Appropriations: FY2014-FY2018115", "paragraphs": [" Figure 3 shows the budget trends for both the Interior and the Energy and Water appropriations bills over the past five fiscal years (FY2014-FY2018). From FY2014 to FY2018, total DOI appropriations increased 29% in current dollars. This increase includes the $566 million in FY2018 emergency supplemental appropriations for disaster relief appropriated to DOI in P.L. 115-72 and P.L. 115-123 . If supplemental appropriations are not considered, total DOI appropriations increased 23% over the same period."], "subsections": []}, {"section_title": "DOI Discretionary Appropriations: FY2018 by Agency", "paragraphs": [" Figure 4 shows the breakdown of enacted FY2018 appropriations for DOI bureaus, offices, and programs funded through the Interior and the Energy and Water appropriations bills. Figures are presented in total dollars (in millions) and as percentages of the department's $15.2 billion in enacted appropriations for FY2018. Supplemental emergency appropriations for FY2018 are shown as a separate segment of the total DOI budget; however, these funds were distributed across several DOI bureaus and programs."], "subsections": []}]}, {"section_title": "DOI Reorganization Plans and Proposals: Issues for Congress", "paragraphs": ["Executive branch reorganization efforts are an ongoing area of congressional interest and scrutiny as part of Congress's lawmaking and oversight functions. Congress uses a variety of tools\u2014including authorizing legislation, appropriations legislation, and oversight activities\u2014to shape and organize the executive branch and its agencies.", "Several changes to DOI and its organizational structure have taken effect starting in FY2019. Congress previously authorized and approved some of these changes and proposals in the form of appropriations and/or authorizing legislation. Other changes\u2014including broader reorganization proposals put forth by the Trump Administration\u2014have been proposed for FY2019 but are not in effect.", "The 115 th Congress approved several internal office transfers and realignments. For instance, Congress transferred appropriations for the Office of Natural Resources Revenue (ONRR) from DOI's Office of the Secretary to Department-Wide Programs for FY2018. Meanwhile, the 2019 Interior Budget in Brief reflects the transfer of both DOI's Oceans Program and the Office of International Affairs from the Office of the Assistant Secretary, Policy, Management and Budget to the Office of the Assistant Secretary, Insular and International Affairs. ", "The 114 th Congress passed legislation authorizing the reorganization of the Office of the Special Trustee for American Indians (OST). In 2016, ITARA directed the Secretary to\u2014among other things\u2014\"ensure that appraisals and valuations of Indian trust property are administered by a single bureau, agency, or other administrative entity within the Department\" not later than 18 months after enactment. To comply with this requirement, the FY2019 budget request reflects the approved transfer of the Office of Appraisal Services within OST to the Office of the Secretary's Appraisal and Valuation Services Office, thereby consolidating all appraisal activities within a single entity. This change is in addition to a proposed shift in the reporting relationship of OST also included in the FY2019 request. Under this proposal, starting in FY2019, OST would report through the Office of the Assistant Secretary of Indian Affairs rather than directly to the Office of the Secretary (see Figure 2 ).", "As noted in the \" Introduction \" to this report, the Trump Administration also proposed additional, broader DOI reorganizational plans for consideration. On March 13, 2017, President Trump issued Executive Order 13781 to \"improve the efficiency, effectiveness, and accountability of the executive branch.\" The order required executive agency heads to, \"if appropriate,\" submit a proposed reorganization plan for their agencies to the director of the Office of Management and Budget within 180 days. Then-Secretary of the Interior Zinke subsequently submitted a proposal for reorganization aimed at\u2014among other goals\u2014improving agency coordination and service to the public. Included in this proposal is a plan to consolidate the various agency-specific regional boundaries (as seen in the \"At a Glance\" boxes included in each bureau summary) into 12 Unified Regional Boundaries. In addition, the plan looks to shift some resources and authority \"to the field,\" potentially in the form of staff, budget, and/or facilities. ", "President Trump issued a separate set of reorganization recommendations in June 2018 as part of the Delivering Government Solutions in the 21 st Century report. Two proposals in particular would affect DOI and its structure. The first would consolidate most of the U.S. Army Corps of Engineers' (USACE's) Civil Works Division within DOI, including USACE's activities related to flood and storm damage reduction and aquatic ecosystem restoration. The second recommendation would transfer NOAA's National Marine Fisheries Service from the Department of Commerce to DOI and merge it with the FWS. This proposal would consolidate administration of the ESA and other wildlife laws under one agency.", "The transfers and reorganization proposals discussed here illustrate the potential changes in the structure of DOI and its operations. They also provide insight into areas of possible congressional and executive branch interest moving forward. The 116 th Congress may consider additional oversight of these proposals and/or propose new initiatives and plans for the organization and administration of DOI and its bureaus."], "subsections": []}]}}
{"id": "RS21534", "title": "Oman: Politics, Security, and U.S. Policy", "released_date": "2019-03-28T00:00:00", "summary": ["The Sultanate of Oman has been a strategic ally of the United States since 1980, when it became the first Persian Gulf state to sign a formal accord permitting the U.S. military to use its facilities. Oman has hosted U.S. forces during every U.S. military operation in the region since then, and it is a partner in U.S. efforts to counter regional terrorism and related threats. Oman's ties to the United States are unlikely to loosen even after its ailing leader, Sultan Qaboos bin Sa'id Al Said, leaves the scene. Qaboos underwent cancer treatment abroad during 2014-2015, and his frail appearance in public appearance fuels speculation about succession. He does continue to meet with visiting leaders, including Israeli Prime Minister Benjamin Netanyahu on October 25, 2018, the first such visit by Israeli leadership to Oman in more than 20 years.", "Oman has tended to position itself as a mediator of regional conflicts, and generally avoids joining its Gulf allies of the Gulf Cooperation Council (GCC: Saudi Arabia, Kuwait, UAE, Bahrain, Qatar, and Oman) in regional military interventions such as that in Yemen. Oman joined the U.S.-led coalition against the Islamic State organization, but it did not send forces to that effort, nor did it support groups fighting Syrian President Bashar Al Asad's regime. It refrained from joining a Saudi-led regional counterterrorism alliance until a year after that group was formed in December 2015, and Oman opposed the June 2017 Saudi/UAE isolation of Qatar.", "Oman also has historically asserted that engaging Iran is the optimal strategy to reduce the potential threat from that country. It was the only GCC state not to downgrade its relations with Iran in connection with a January 2016 Saudi-Iran dispute. Oman's ties to Iran have enabled it to broker agreements between the United States and Iran, including the release of U.S. citizens held by Iran as well as U.S.-Iran direct talks that later produced the July 14, 2015, nuclear agreement between Iran and the international community (Joint Comprehensive Plan of Action, JCPOA). Yet, U.S. officials credit Oman with enforcing re-imposed U.S. sanctions and with taking steps to block Iran's efforts to ship weapons across Oman's borders to Houthi rebels in Yemen.", "Prior to the 2011 wave of Middle East unrest, the United States consistently praised Sultan Qaboos for gradually opening the political process even in the absence of evident public pressure to do so. The liberalization allows Omanis a measure of representation through elections for the lower house of a legislative body, but does not significantly limit Qaboos's role as paramount decisionmaker. The public support for additional political reform, and resentment of inadequate employment opportunities produced protests in several Omani cities for much of 2011, and for two weeks in January 2018, but government commitments to create jobs helped calm the unrest. Oman has followed policies similar to the other GCC states since 2011 by increasing press censorship and arresting critics of the government who use social media.", "The periodic economy-driven unrest demonstrates that Oman is having difficulty coping with the decline in the price of crude oil since mid-2014. Oman's economy and workforce has always been somewhat more diversified than some of the other GCC states, but Oman has only a modest financial cushion to invest in projects that can further diversify its revenue sources. The U.S.-Oman free trade agreement (FTA) was intended to facilitate Oman's access to the large U.S. economy and accelerate Oman's efforts to diversify. Oman receives small amounts of U.S. security assistance, and no economic aid."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Oman is located along the Arabian Sea, on the southern approaches to the Strait of Hormuz, across from Iran. Except for a brief period of Persian rule, Omanis have remained independent since expelling the Portuguese in 1650. The Al Said monarchy began in 1744, extending Omani influence into Zanzibar and other parts of East Africa until 1861. Sultan Qaboos bin Sa'id Al Said, born in November 1940, is the eighth in the line of the monarchy; he became sultan in July 1970 when, with British support, he forced his father, Sultan Said bin Taymur Al Said, to abdicate. ", "The United States has had relations with Oman from the early days since American independence. The U.S. merchant ship Ramber made a port visit to Muscat in September 1790. The United States signed a Treaty of Amity and Commerce with Oman in 1833, one of the first of its kind with an Arab state. This treaty was replaced by the Treaty of Amity, Economic Relations, and Consular Rights signed at Salalah on December 20, 1958. Oman sent an official envoy to the United States in 1840. A U.S. consulate was maintained in Muscat during 1880-1915, a U.S. embassy was opened in 1972, and the first resident U.S. Ambassador arrived in July 1974. Oman opened its embassy in Washington, DC, in 1973. Sultan Qaboos was accorded formal state visits in 1974, by President Gerald Ford, and in 1983, by President Ronald Reagan. President Bill Clinton visited Oman in March 2000. Career diplomat Marc Sievers has been Ambassador to Oman since late 2015."], "subsections": []}, {"section_title": "Democratization, Human Rights, and Unrest", "paragraphs": ["Oman remains a monarchy in which decisionmaking still is concentrated with Sultan Qaboos. Throughout his reign, Qaboos has also formally held the position of Prime Minister, as well as the positions of Foreign Minister, Defense Minister, Finance Minister, and Central Bank Governor. Other officials serve as \"Ministers of State\" for those portfolios and serve de-facto as ministers. Qaboos's government, and Omani society, reflects the diverse backgrounds of the Omani population, many of whom have long-standing family connections to parts of East Africa that Oman once controlled, and to the Indian subcontinent. ", "Some senior Omanis argue that a formal position of Prime Minister is needed to organize the functions of the government and enable the Sultan to focus on larger strategic decisions. Should such a post be established, potential candidates include the deputy prime minister for cabinet affairs, Fahd bin Mahmud Al Said (who Omanis already widely refer to as \"Prime Minister\"); the secretary general of the Foreign Ministry, Sayyid Badr bin Hamad Albusaidi; Salim bin Nasir al-Ismaily, a businessman and economic adviser to the Sultan who reportedly brokered 2013 U.S.-Iran meetings; and Royal Office head General Sultan bin Mohammad al-Naamani. ", "Along with political reform issues, the question of succession has long been central to observers of Oman. Qaboos's brief marriage in the 1970s produced no children, and the sultan, who was born in November 1940, has no heir apparent. According to Omani officials, succession would be decided by a \"Ruling Family Council\" of his relatively small Al Said family (about 50 male members). If the family council cannot reach agreement within three days, it is to select the successor recommended by Qaboos in a sealed letter to be opened upon his death; there are no confirmed accounts of whom Qaboos has recommended. The succession issue has come to the fore since he underwent cancer treatment in Germany during 2014-15. Since returning to Oman, he has appeared in public only on major occasions or to meet visiting foreign leaders. ", "Potential Successors . The leading contenders to succeed Qaboos include three brothers who are cousins of the Sultan and whose sister was the woman who was briefly married to Qaboos. They are Minister of Heritage and Culture Sayyid Haythim bin Tariq Al Said, whom some assess indecisive; Asad bin Tariq Al Said, a former military officer who has the title \"Representative of the Sultan\" and was appointed deputy prime minister for international relations and cooperation affairs in early 2017; and Shihab bin Tariq Al Said, the former commander of Oman's Navy. All are in their 60s. Another potential choice is Fahd bin Mahmud, above. "], "subsections": [{"section_title": "Representative Institutions, Election History, and Unrest", "paragraphs": ["Many Omanis, U.S. officials, and international observers credit Sultan Qaboos for establishing consultative institutions and electoral processes before there was evident public pressure to do so. Under a 1996 \"Basic Law,\" Qaboos created a bicameral \"legislature\" called the Oman Council, consisting of the existing Consultative Council ( Majlis As Shura ) and an appointed State Council ( Majlis Ad Dawla ), established by the Basic Law. The Consultative Council was formed in 1991 to replace a 10-year-old all-appointed advisory council. A March 2011 decree expanded the Oman Council's powers to include questioning ministers, selecting its own leadership, and reviewing government-drafted legislation, but it still does not have the power to draft legislation or to overturn the Sultan's decrees or government regulations. As in the other GCC states, formal political parties are not allowed. But, unlike Bahrain or Kuwait, well-defined \"political societies\" (de-facto parties) that compete within the electoral process have not developed in Oman. ", "The electoral process has broadened consistently. The Consultative Council was initially chosen through a selection process in which the government had substantial influence over the body's composition, but this process was gradually altered to a full popular election. When it was formed in 1991, the body had 59 seats, and was gradually expanded to its current 85 seats. Prior to 2011, the Sultan selected the Consultative Council chairman; since then, the chairman and a deputy chairman have been elected by the Council membership. Also in 2011, Qaboos instituted elections for municipal councils. Each province with a population of more than 30,000 elects two members, whereas a province with fewer than that elects one.", "The electorate for the Consultative Council has gradually expanded. In the 1994 and 1997 selection cycles for the council, \"notables\" in each of Oman's districts nominated three persons and Qaboos selected one of them to occupy that district's seat. The first direct elections were held in September 2000, but the electorate was limited (25% of all citizens over 21 years old). For the October 4, 2003, election, voting rights were extended to all citizens, male and female, over 21 years of age. About 195,000 Omanis voted in that election (74% turnout). The same 2 women were elected as happened in the 2000 vote (out of 15 women candidates). In the October 27, 2007, election (after changing to a four-year term), public campaigning was allowed for the first time and about 250,000 people voted (63% turnout). None of the 21 females (out of 631 candidates) won. The more recent Consultative Council elections are discussed below.", "Appointed State Council . The government considers the State Council as a counterweight to the Consultative Council, and it remains all-appointed. The Council, which had 53 members at inception, has been expanded to 84 members. By law, it cannot have more members than the Consultative Council. Appointees are usually former high-ranking government officials, military officials, tribal leaders, and other notables. "], "subsections": [{"section_title": "Unrest Casts Doubt on Satisfaction with Pace of Political Reform", "paragraphs": ["The expansion of the electoral process did not satisfy those Omanis, particularly those younger and well-educated, who consider the pace of liberalization too slow, or those dissatisfied with the country's economic performance and apparent lack of job opportunities. In July 2010, 50 prominent Omanis petitioned Sultan Qaboos for a \"contractual constitution\" that would provide for a fully elected legislature. In February 2011, after protests in Egypt toppled President Hosni Mubarak, protests broke out in the northern industrial town of Sohar, Oman, and later spread to the capital, Muscat. Although most protesters asserted that their protests were motivated primarily by economic factors, some echoed calls for a fully elected legislature. One person was killed in February 2011 by security forces. ", "But, many protestors carried posters lauding his rule. And, many older Omanis apparently did not support the protests, apparently comparing the existing degree of \"political space\" favorably with that during the reign of Qaboos's father, Sultan Said bin Taymur. During his father's reign, Omanis needed the sultan's approval even to wear spectacles or to import cement, for example. Some experts argue that Sultan Said kept Oman isolated in an effort to insulate it from leftist extremism that gained strength in the region during the 1960s. ", "By mid-2012, the government had calmed the unrest through a combination of reforms and punishments, including expanding the powers of the Oman Council; appointing several members of the Consultative Council as ministers; giving the office of the public prosecutor autonomy and consumers additional protections; naming an additional woman minister; ordering that additional public sector jobs be created; increasing the minimum wage; making grants to unemployed job seekers; and arresting journalists, bloggers, and other activists for \"defaming the Sultan,\" \"illegal gathering,\" or violating the country's cyber laws. Twenty-four of those arrested went on a hunger strike in February 2013 and the Sultan pardoned virtually all. Omanis who had been dismissed from public and private sector jobs for participating in unrest were reinstated. ", "The U.S. reaction to the unrest in Oman was muted, possibly because Oman is a key ally of the United States and perhaps because the unrest appeared relatively minor. ", "Small demonstrations occurred again for two weeks in January 2018. Protesters generally cited a perceived lack of job opportunities rather than a demand for political reform. In response, the government reiterated an October 2017 plan to create 25,000 jobs for Omani citizens and banned the issuance of new visas for expatriate workers in 87 private sector professions. "], "subsections": []}, {"section_title": "Recent Elections", "paragraphs": ["The October 15, 2011, Consultative Council elections went forward despite the unrest. The enhancement of the Oman Council's powers generated additional interest in the vote\u20141,330 candidates applied to run, a 70% increase from the 2007 vote. A record 77 were women. However, voter turnout (about 60%) was not higher than in past elections. The expectation of several female victors was not realized: only one was elected. Some reformists were heartened by the victory of two political activists\u2014Salim bin Abdullah Al Oufi, and Talib Al Maamari. A relatively young entrepreneur was selected speaker of the Consultative Council (Khalid al-Mawali). In the State Council appointments, the Sultan appointed 15 women, bringing the total female participation in the Oman Council to 16\u2014over 10%. The government did not permit outside election monitoring.", "In 2012, the government also initiated elections for 11 municipal councils. Previously, only one such council, all appointed, had been established\u2014for the capital region. The elected \"councilors\" make recommendations to the government on development projects, but do not make final funding decisions. The chairman and deputy chairman of each municipal council are appointed by the government. In the December 22, 2012, municipal elections, there were 192 seats up for election. There were more than 1,600 candidates, including 48 women. About 546,000 citizens voted. Four women were elected."], "subsections": [{"section_title": "2015 Consultative Council Election and 2016 Municipal Elections", "paragraphs": ["Elections to the Consultative Council (expanded by one seat, to 85) were last held on October 25, 2015. A total of 674 candidates applied to run, although 75 candidates were barred, apparently based on their participation in the 2011-2012 unrest. There were 20 female candidates. Turnout was estimated at 56% of the 612,000 eligible voters. The one woman on the Council was reelected and no other female was elected. As happened in 2011, only one woman was elected. Khalid al-Mawali was reelected Consultative Council chairman. On November 8, 2015, Qaboos appointed the 84-seat State Council, of whom 13 were women. ", "On December 25, 2016, the second municipal elections were held to choose 202 councilors\u2014an expanded number from the 2012 municipal elections. There were 731 candidates, of whom 23 were women. Turnout was about 40% of the 625,000 eligible voters, according to the government. Seven women were elected, more than were elected in 2012 but still a small percentage of the 202 seats up for vote. ", "The next Consultative Council elections are due to be held in the fall of 2019. No date has been announced. "], "subsections": []}]}]}, {"section_title": "Broader Human Rights Issues4", "paragraphs": ["According to the most recent State Department report on human rights, the principal human rights problems in Oman, other than the political structure, are limits on freedom of speech, assembly, and association; torture of prisoners and detainees; censorship of Internet content; and criminalization of LGBT conduct. U.S. and other reports generally credit the government with holding accountable security personnel and other officials for abuses, including prosecuting multiple corruption cases. The law provides for an independent judiciary, but the Sultan chairs the country's highest legal body, the Supreme Judicial Council, which can review judicial decisions. An \"Oman Human Rights Commission,\" a quasi-independent but government-sanctioned body, investigates and monitors prison and detention center conditions through site visits. ", "State Department funds (Middle East Partnership Initiative, Near East Regional Democracy account, and other accounts) have been used in past fiscal years to promote Omani civil society, judicial reform, election management, media independence, and women's empowerment. The U.S. Commerce Department's Commercial Law Development Program has worked to improve Oman's legislative and regulatory frameworks for business. "], "subsections": [{"section_title": "Freedom of Expression, Media, and Association", "paragraphs": ["Omani law provides for limited freedom of speech and press, but the government generally does not respect these rights. A 2014 royal decree stipulates that citizens joining groups deemed \"harmful to national interests\" could be subject to revocation of citizenship. No revocations on those grounds have been announced. ", "Press criticism of the government is tolerated, but criticism of the Sultan and, by extension, senior government officials, is not. In October 2015, Oman followed the lead of many of the other GCC states in issuing a new royal decree prohibiting disseminating information that targets \"the prestige of the State's authorities or aimed to weaken confidence in them.\" The government has prosecuted dissident bloggers and cyber-activists under that decree and other laws. In 2017, Oman permanently shuttered the Al Zaman independent daily newspaper for 2016 articles accusing senior judicial officials of corruption. ", "Private ownership of radio and television stations is not prohibited, but there are few privately owned stations. Satellite dishes have made foreign broadcasts accessible to the public. Still, there are some legal and practical restrictions to Internet usage, and only a minority of the population has subscriptions to internet service. Many Internet sites are blocked, primarily for sexual content, but many Omanis are able to bypass restrictions by accessing the Internet by cell phone. ", "Omani law provides for freedom of association for \"legitimate objectives and in a proper manner\"\u2014language that enables the government to restrict such rights in practice. A 2014 decree by the Sultan imposed a new nationality law that stipulates that citizens who join groups deemed harmful to national interests could be subject to citizenship revocation. Associations must register with the Ministry of Social Development. Registered associations for foreign nationalities include the Indian Social Group. "], "subsections": []}, {"section_title": "Trafficking in Persons and Labor Rights", "paragraphs": ["Oman is a destination and transit country for men and women primarily from South Asia and East Africa who are subjected to forced labor and, to a lesser extent, sex trafficking. In October 2008, President George W. Bush directed that Oman be moved from a \"Tier 3\" ranking on trafficking in persons (worst level) by the State Department Trafficking in Persons report for 2008 to \"Tier 2/Watch List.\" The upgrade was based on Omani pledges to increase efforts to counter trafficking in persons (Presidential Determination 2009-5). Oman was rated Tier 2 in the 2009-2015 Trafficking in Persons reports, but the report for 2016 and 2017 downgraded Oman back to Tier 2: Watch List on the basis that, in the aggregate, it did not increase its anti-trafficking efforts during the reporting periods. ", "The 2018 Trafficking in Persons report upgraded Oman to Tier 2. The upgrade was based on the government's demonstrating increased efforts against trafficking by investigating, prosecuting, and convicting more suspected traffickers and standing up a specialized antitrafficking prosecutorial unit. The government also identified more victims and provided them with robust care. The government also developed, funded, and began implementing a new five-year national action plan, which included funding a full-time liaison between relevant agencies to facilitate a whole-of-government effort.", "On broader labor rights, Omani workers have the right to form unions and to strike (except in the oil and gas industry). However, only one government-backed federation of trade unions exists\u2014the General Federation of Oman Trade Unions. The calling of a strike requires an absolute majority of workers in an enterprise. The labor laws permit collective bargaining and prohibit employers from firing or penalizing workers for union activity. Labor rights are regulated by the Ministry of Manpower. Some occupations and businesses are exempt from paying the minimum wage for citizens ($845 per month). "], "subsections": []}, {"section_title": "Religious Freedom7", "paragraphs": ["Oman has historically had a high degree of religious tolerance. An estimated 45%-75% (government figure) of Omanis adhere to the Ibadhi\u00a0sect, a relatively moderate school of Islam centered mostly in Oman, East Africa, and in parts of Algeria, Libya, and Tunisia. Ibadhism has been sometimes misrepresented as a Sunni sect. Ibadhi religious and political dogma generally resembles basic Sunni doctrine, although the Ibadhis are neither Sunni nor Shiite. Ibadhis believe strongly in the existence of a just Muslim society and argue that religious leaders should be chosen by community leaders for their knowledge and piety, without regard to race or lineage. A long-term rebellion led by the Imam of Oman, leader of the Ibadhi sect, ended in 1959. About 5% of Oman's population are Shiite Muslims. Oman's Shiites are allowed to resolve family and personal status cases according to Shiite jurisprudence outside the court system. ", "Recent State Department religious freedom reports have noted no reports of societal abuses or discrimination based on religious affiliation, belief, or practice. Non-Muslims are free to worship at temples and churches built on land donated by the government, but there are some limitations on non-Muslims' proselytizing and on religious gatherings in other than government-approved houses of worship. ", "All religious organizations must be registered with the Ministry of Endowments and Religious Affairs (MERA). Among non-Muslim sponsors recognized by MERA are the Protestant Church of Oman; the Catholic Diocese of Oman; the al Amana Center (interdenominational Christian); the Hindu Mahajan Temple; and the Anwar al-Ghubairia Trading Co. Muscat (for the Sikh community). Buddhists have been able to worship in private spaces. Members of all religions and sects are free to maintain links with coreligionists abroad and travel outside Oman for religious purposes. To address crowded conditions in some non-Muslim places of worship, MERA has made plans to use land donated by Sultan Qaboos for construction of a new building for Orthodox Christians, with separate halls for Syrian, Coptic, and Greek Orthodox Christians. The government has also approved new worship space for Baptists. The Church of Jesus Christ of Latter Day Saints (Mormons) reportedly did not receive approval to register with MERA because it had not identified a sponsor in the Christian community, but its representatives have met with the MERA and are working toward a solution.", "There is no indigenous Jewish population. Private media have occasionally published anti-Semitic editorial cartoons. "], "subsections": []}, {"section_title": "Advancement of Women", "paragraphs": ["Sultan Qaboos has emphasized that he considers Omani women vital to national development. Women now constitute over 30% of the workforce. The first woman of ministerial rank in Oman was appointed in March 2003, and, since then, there have been several female ministers in each cabinet. Oman's ambassadors to the United States and to the United Nations are women. The number of women in Oman's elected institutions was discussed above, but campaigns by Omani women's groups failed to establish a minimum number of women elected to the Consultative Council. ", "Below the elite level, however, Omani women continue to face social discrimination, often as a result of the interpretation of Islamic law. Allegations of spousal abuse and domestic violence are fairly common, with women finding protection primarily through their families. Omani nationality can be passed on only by a male Omani parent. "], "subsections": []}]}]}, {"section_title": "Foreign Policy/Regional Issues", "paragraphs": ["Under Sultan Qaboos, Oman has pursued a foreign policy that sometimes diverges from that of Oman's GCC allies Saudi Arabia and the UAE. Oman has generally sought to mediate resolution of regional conflicts and refrain from direct military involvement in them. Oman joined the U.S.-led coalition against the Islamic State, but did not conduct any airstrikes against that group. Oman did not join the Saudi-led Arab coalition fighting the Iran-backed Houthi forces in Yemen and is one of the countries seeking to negotiate a solution to that conflict. Oman did not supply forces to the GCC's \"Peninsula Shield\" 2011 deployment to Bahrain to help the Al Khalifa regime counter the uprising there.", "Oman strongly opposed the Saudi-led move in June 2017 to isolate Qatar over a number of policy disagreements. Oman's top diplomat Yusuf Alawi has visited Washington, DC, several times, most recently in late July 2018, in part to work with U.S. officials seeking to resolve the rift. Omani diplomats were hopeful that the annual GCC summit during December 5-6, 2017, would make progress on the dispute, but that meeting adjourned on December 5, 2017, after only two hours of talks. Qaboos, primarily because of his fragile health, has not attended any of the annual GCC summits since 2013. ", "Oman opposed a 2012 Saudi proposal for political unity among the GCC states as a signal of GCC solidarity against the Iran, even threatening to withdraw from the GCC if the plan were adopted. Other GCC leaders are similarly concerned about surrendering any of their sovereignty, and the plan has not been dropped entirely but neither has it advanced. In 2007, Oman was virtually alone within the GCC in balking at a plan to form a monetary union. Lingering border disputes also have plagued Oman-UAE relations; the two finalized their borders in 2008, nearly a decade after a tentative border settlement in 1999."], "subsections": [{"section_title": "Iran", "paragraphs": ["Omani leaders assert that engagement with Iran better mitigates the potential threat from that country than confrontation\u2014a stance that has positioned Oman as a mediator in several regional conflicts in which Iran or its proxies are involved. Omani leaders have not expressed concerns about potential Iranian meddling in Oman's affairs because Oman's citizens are mostly Ibadhis (see above) and not generally receptive to either Sunni or Shiite Islamist extremist appeals. There are positive sentiments among the Omani leadership for the Shah of Iran's support for Qaboos's 1970 takeover and its provision of troops to help Oman end the leftist revolt in Oman's Dhofar Province during 1962-1975, a conflict in which 700 Iranian soldiers died.", "Exemplifying Oman's policy toward Iran, Sultan Qaboos bucked U.S. and GCC criticism by visiting Tehran in August 2009 at the time of protests in Iran over alleged governmental fraud in declaring the reelection of President Mahmoud Ahmadinejad in the June 2009 election. He visited again in August 2013, after Iran's President Hassan Rouhani first took office. Rouhani visited Oman in 2014 and again in February 2017, as part of an Iranian effort to begin a political dialogue with the GCC. Following the Rouhani visit, Oman and Kuwait undertook a joint, but unsuccessful, attempt to enlist the other GCC countries in a dialogue with Iran. In July 2017, during a visit by Oman's de-facto Foreign Minister Yusuf Alawi to Tehran, Iran and Oman announced plans to strengthen their ties\u2014a statement interpreted as an Omani signal of disagreement with the Saudi-led move to isolate Qatar. Iran's Foreign Minister visited Oman and met with Sultan Qaboos in October 2017 to discuss regional issues.", "As a further overture toward Iran, Oman did not immediately join the December 2015 Saudi assembly of a Muslim-nation \"counterterrorism coalition\" that excludes Iran and Iran's allies, although Oman finally did join that initiative in December 2016. And, Oman was the only GCC state not to downgrade relations with Iran in January 2016 in solidarity with Saudi Arabia when the Kingdom broke relations with Iran in connection with the dispute over the Saudi execution of dissident Shiite cleric Nimr Al Nimr. In February 2016, all the GCC states declared Lebanese Hezbollah a terrorist group, but Oman did not also restrict travel by its citizens to Lebanon. ", "Some experts and GCC officials argue that Oman-Iran relations, particularly their security cooperation, are undermining GCC defense solidarity. In 2009, Iran and Oman agreed to cooperate against smuggling across the Gulf of Oman, which separates the two countries. On August 4, 2010, Oman signed a security pact with Iran to cooperate in patrolling the Strait of Hormuz, an agreement that reportedly committed the two to hold joint military exercises. The two countries expanded that agreement by signing a Memorandum of Understanding on military cooperation in 2013. The two countries have held joint exercises under these agreements, most recently a December 2015 joint naval exercise. ", "Omani leaders have sought to ensure that the country's relations with Iran do not harm relations with the United States. In the course of his January 2019 regional trip, Secretary of State Michael Pompeo met with Sultan Qaboos to discuss regional issues, and he praised Oman for enforcing the sanctions that the Trump Administration reimposed on Iran. Still, Iran and Oman conduct significant volumes of civilian trade, in keeping with historic patterns in the Gulf region. ", "A number of Iran-Oman joint ventures are active or pending. Most notably, Iran reportedly envisions the joint expansion of Oman's port of Al Duqm as providing Tehran with a major trading hub to interact with the global economy. Oman and Iran's Khodro Industrial Group are conducting a feasibility study of a t a $200 million car production plant there. China, Britain, and numerous other powers are also large investors in Oman's Al Duqm development, and in February 2018 India reportedly signed an agreement with Oman granting the Indian navy certain rights at the port. In March 2019, Oman agreed to grant the United States military access to Al Duqm port as well, as discussed further below. ", "Iran and Oman have jointly developed the Hengham oilfield in the Persian Gulf, a field that will eventually produce about 80 million cubic feet of natural gas per day. The two countries have also discussed potential investments to further develop Iranian offshore natural gas fields that adjoin Oman's West Bukha oil and gas field in the Strait of Hormuz. The field began producing oil and gas in 2009. During Iranian President Hassan Rouhani's 2014 visit to Oman, the two countries signed a deal to build a $1 billion undersea pipeline to bring Iranian natural gas from Iran's Hormuzegan Province to Sohar in Oman, where it will be converted to liquefied natural gas (LNG) and then exported. Several major international energy firms are reportedly involved in the project, but the reimposition of U.S. sanctions in 2018 appear to have slowed progress on the concept. "], "subsections": [{"section_title": "Oman, Iran, and Yemen", "paragraphs": ["In neighboring Yemen, Oman and Iran's interests in some ways conflict. A GCC-wide initiative helped organize a peaceful transition from the rule of Ali Abdullah Saleh in 2011-2012. However, Saleh's successor, Abdu Rabu Mansur Al Hadi, was driven out of Sanaa in 2015 by Zaidi Shiite Houthi rebels who are increasingly supported by Iran. The Yemeni affiliate of Al Qaeda, Al Qaeda in the Arabian Peninsula (AQAP), also continues to operate there. Oman has closely patrolled the border with Yemen since 2015, has built some refugee camps near the border, and has sought to improve ties with tribes and residents just over the border to ensure that the conflict in Yemen does not spill over into Oman. ", "The current instability in Yemen builds on a long record of difficulty in Oman-Yemen relations. The former People's Democratic Republic of Yemen (PDRY), considered Marxist and pro-Soviet, supported Oman's Dhofar rebellion. Oman-PDRY relations were normalized in 1983, but the two engaged in occasional border clashes later in that decade. Relations improved after 1990, when PDRY merged with North Yemen to form the Republic of Yemen. ", "As the only GCC state that has not joined the Saudi-led Arab coalition fighting to restore the Hadi government and with its ties to Iran, Oman has become a mediator of the Yemen conflict. The U.N. Special Envoy for Yemen, Martin Griffiths, has described Oman as \"playing a pivotal role in all our efforts to help people in Yemen.\" Oman has hosted talks between U.S. diplomats and Houthi representatives, and brokered the release of several captives there, including the November 2016 release of a U.S. Marine veteran who was detained by the Houthis in April 2015. During 2015-2017, Omani mediation also secured the release in Yemen of another American, a French national, an Australian national, and an Indian priest. In late 2018, Oman attempted to secure the release of Yemen's Defense Minister, Mahmoud al-Subaihi, who has been held captive by the Houthis since 2014. In December 2018, Oman received several wounded Houthi fighters for treatment, fulfilling a Houthi condition to attend peace talks in Sweden. ", "Iran's interference in Yemen has brought more international scrutiny to Oman's relations with Iran. Since 2016, media reports have indicated that Iran has used Omani territory to smuggle weapons into Yemen, taking advantage of the porous and sparsely populated 179-mile border between the two countries. Smuggled materiel allegedly includes anti-ship missiles (some of which have reportedly been used to target U.S. warships), surface-to-surface short-range missiles, small arms, and explosives. Some reports indicate that Iran-made unmanned aerial vehicles (UAVs) used by Houthi forces in Yemen may have transited through Oman. Successive U.N. reports from the Panel of Experts established pursuant to resolution 2140 (2014) have identified both land routes that stretch from the Omani border to Houthi-controlled areas in the west and Omani ports with road access to Yemen as possible channels for weapons smuggling. ", "Omani officials deny these allegations, and some observers assert that the allegations \"appear implausible given the long distance the weapons would have to be transported overland through territory the Houthis do not control.\" In March 2018, then-Defense Secretary James Mattis stated that the Omanis \"have security concerns that we share. I'm going there to listen ... and find out how they assess any trafficking that's going on at all. What is their assessment? What is their view of routes and that sort of thing?\" Since that visit, Omani officials have asserted that the \"file\" of Iran smuggling weaponry to the Houthis via Omani territory is \"closed,\" suggesting that Oman has stopped any such trafficking through it.", "In May 2018, the State Department notified Congress of its intention to obligate FY2017 Nonproliferation, Anti-Terrorism, Demining and Related Programs (NADR) funds for counterterrorism programming in Yemen and Oman, including the Oman Border Security Enhancement Program, a \"program focused on developing and enhancing Omani border security capabilities along the Oman-Yemen border.\" The FY2019 National Defense Authorization Act (NDAA, H.R. 5515 , P.L. 115-232 ) extends the authority to provide funds to Oman under Section 1226 of the FY2016 NDAA (22 U.S.C. 2151) to secure the border with Yemen."], "subsections": []}, {"section_title": "Oman as a Go-Between for the United States and Iran", "paragraphs": ["U.S. officials have used the Oman-Iran relationship to reach out to Iranian officials when doing so has been deemed in the U.S. interest. Press reports indicate that then-Deputy Secretary of State William Burns and other U.S. officials began secretly meeting with Iranian officials in early 2013\u2014before the June 2013 election of the moderate Hassan Rouhani as Iran's president\u2014to explore the possibility of a nuclear deal. The U.S-Iran meetings accelerated after Sultan Qaboos's August 25-27, 2013, visit to Iran. In November 2014, then-Secretary of State John Kerry met with Iranian Foreign Minister Mohammad Javad Zarif in Muscat to accelerate the negotiations, followed by a meeting between the entire P5+1 and Iranian negotiators. An additional round of P5+1-Iran talks was held in Oman, and the JCPOA was finalized in July 2015. In December 2015, Oman hosted a meeting between Energy Secretary Ernest Moniz and head of Iran's Atomic Energy Organization Ali Akbar Salehi, to discuss JCPOA implementation. In November 2016, Iran exported 11 tons of heavy water to Oman, reducing Iran's stockpile below that allowed. ", "Omani banks, some of which operate in Iran, were used to implement some of the financial arrangements of the JPA and JCPOA. As a consequence, a total of $5.7 billion in Iranian funds had built up in Oman's Bank Muscat by the time of implementation of the JCPOA in January 2016. In its efforts to easily access these funds, Iran obtained from the Office of Foreign Assets Control (OFAC) of the Treasury Department a February 2016 special license to convert the funds (held as Omani rials) to dollars as a means of easily converting the funds into Euros. Iran ultimately used a different mechanism to access the funds as hard currency, but the special license issuance resulted in a May 2018 review by the majority of the Senate Permanent Subcommittee on Investigation to assess whether that license was consistent with U.S. regulations barring Iran access to the U.S. financial system. ", "Oman also has been an intermediary through which the United States and Iran have exchanged captives. Oman brokered a U.S. hand-over of Iranians captured during U.S.-Iran skirmishes in the Persian Gulf in 1987-1988. In 2007, Oman helped broker Iran's release of 15 sailors from close U.S. ally the United Kingdom, who Iran had captured in the Shatt al Arab waterway. U.S. State Department officials publicly confirmed that Oman helped broker the 2010-2011 releases from Iran of three U.S. hikers (Sara Shourd, Josh Fattal, and Shane Bauer), in part by paying their $500,000 per person bail to Iran. In April 2013, Omani mediation obtained the release to Iran of an Iranian scientist, Mojtaba Atarodi, imprisoned in the United States in 2011 for procuring nuclear equipment for Iran. U.S. officials also have sought Oman's help to determine the fate of retired FBI agent Robert Levinson, who disappeared on Iran's Kish Island in 2007. ", "The October 25, 2018, visit to Oman by Israeli Prime Minister Benjamin Netanyahu might have represented an Israeli effort to indirectly communicate with Iran over Syria, Lebanon, and other issues of significant dispute. If so, Israel might have been seeking to take advantage of Oman's ties to Iran in ways similar to those used by the United States, as discussed above. "], "subsections": []}]}, {"section_title": "Cooperation against the Islamic State Organization and on Syria and Iraq", "paragraphs": ["Oman, along with the other GCC states, joined the U.S.-led coalition to counter the Islamic State in 2014. Oman offered the use of its air bases for the coalition but, unlike several GCC states, Oman did not conduct airstrikes against the group. ", "In the Syria internal conflict, possibly because of its relations with Iran, Oman has refrained from backing rebel groups against Iran's close ally, Syrian President Bashar Al Assad, and instead focused on mediation. Oman joined other Arab states in 2011 in suspending Syria's membership in the Arab League or closing Oman's embassy in Damascus. In August 2015, Oman hosted Syria's foreign minister for talks on possible political solutions to the Syria conflict, and in October 2015, Omani Minister of State for Foreign Affairs Yusuf Alawi visited Damascus to convey a U.S. message to Asad. Oman attended multilateral meetings in Vienna on the Syria conflict in late 2015, and Oman hosted Russian Foreign Minister Sergei Lavrov in February 2016 to discuss Syria.", "On Iraq, no GCC state undertook air strikes against the Islamic State fighters there. The GCC states have tended to resist helping the Shiite-dominated government in post-Saddam Iraq. Oman opened an embassy in Iraq after the 2003 ousting of Saddam but then closed it for several years following a shooting outside it in November 2005 that wounded four, including an embassy employee. The embassy reopened in 2007 but Oman's Ambassador to Iraq, appointed in March 2012, is resident in Jordan, where he serves concurrently. Oman provided a small amount of funds for Iraq's post-Saddam reconstruction. "], "subsections": []}, {"section_title": "Policies on Other Conflicts", "paragraphs": ["Libya . Oman did not play an active a role in supporting the 2011 Libyan uprising that overthrew Mu'ammar Al Qadhafi. In March 2013, Oman granted asylum to Qadhafi's widow and her and Qadhafi's daughter, Aisha, and sons Mohammad and Hannibal, who had entered Oman in October 2012. Omani officials said they were granted asylum on the grounds that they not engage in any political activities.", "Egypt. The GCC has been divided on post-Mubarak Egypt. Qatar supported the 2012 election of Muslim Brotherhood leader Mohammad Morsi as the first elected post-Mubarak president, but Saudi Arabia and the UAE oppose the Brotherhood and supported the Egyptian military's ouster of Morsi in 2013. Oman criticized a post-coup crackdown on Brotherhood supporters but, in November 2017, Oman hosted a visit by Egyptian leader Abdel Fattah Al Sisi, who is supported by Saudi Arabia and the UAE. "], "subsections": []}, {"section_title": "Israeli-Palestinian Dispute and Related Issues", "paragraphs": ["Oman was the one of the few Arab countries not to break relations with Egypt after the signing of the U.S.-brokered Egyptian-Israeli peace treaty in 1979. The GCC states participated in the multilateral peace talks established by the 1991 U.S.-sponsored Madrid peace process, and Oman hosted an April 1994 session of the multilateral working group on water that resulted in the establishment of a Middle East Desalination Research Center in Oman. Participants in the Center include Israel, the Palestinian Authority, the United States, Japan, Jordan, the Netherlands, South Korea, and Qatar. ", "In September 1994, Oman and the other GCC states renounced the secondary and tertiary Arab boycott of Israel. In December 1994, it became the first Gulf state to officially host a visit by an Israeli prime minister (Yitzhak Rabin), and it hosted then Prime Minister Shimon Peres in April 1996. In October 1995, Oman exchanged trade offices with Israel, essentially renouncing the primary boycott of Israel. However, there was no move to establish diplomatic relations. The trade offices closed following the September 2000 Palestinian uprising. In an April 2008 meeting in Qatar, de-facto Foreign Minister Alawi informed his Israeli counterpart (visiting Doha for a conference) that the Israeli trade office in Oman would remain closed until agreement was reached on a Palestinian state. Several Israeli officials reportedly visited Oman in November 2009 to attend the annual conference of the Desalination Center and to hold talks with Omani officials on the margins of the conference. Oman offered to resume trade contacts with Israel if it halted settlement construction in the West Bank\u2014a condition Israel has not met. Oman publicly supports the Palestinian Authority (PA) drive for full U.N. recognition. In February 2018, Foreign Minister Alawi visited the Al Aqsa Mosque in east Jerusalem, which required coordination with Israeli authorities. He also met Palestinian officials in Ramallah during that trip. ", "On October 25, 2018, Israel's Prime Minister Benjamin Netanyahu visited Oman and met with Sultan Qaboos. The visit, which came a few weeks after a visit to Oman by Palestinian leader Mahmoud Abbas, was announced by both countries after Netanyahu had returned to Israel. Analysts and press reports suggested that the two leaders discussed possible ways forward on the Israeli-Palestinian peace process and on indirect Israeli communication with Iran via Oman. The visit represented confirmation of the burgeoning ties between Israel and the GCC states on security and other regional issues. In early November 2018, Israel's Minister of Transportation and Minister of Intelligence Yisrael Katz visited Oman to attend an international conference during which he presented a concept for a railway between Israel, Jordan, and the Gulf states. In February 2019, White House adviser Jared Kushner, Special Representative for International Negotiations Jason Greenblatt, and the State Dept. special representative for Iran Brian Hook met with Qaboos in Muscat to discuss the administration's Middle East peace proposals and U.S. policy toward Iran."], "subsections": []}]}, {"section_title": "Defense and Security Issues", "paragraphs": ["Sultan Qaboos, who is Sandhurst-educated, is respected by his fellow Gulf rulers as a defense strategist. He has long asserted that the United States is the security guarantor of the region. Oman's approximately 43,000-person armed force\u2014collectively called the \"Sultan of Oman's Armed Forces\"\u2014is the third largest of the GCC states and widely considered one of the best trained. However, in large part because of Oman's limited funds, it is one of the least well equipped of the GCC countries. Oman's annual defense budget is about $9 billion out of government expenditures of about $30 billion. ", "Sultan Qaboos has always supported close defense cooperation with the United States. In the wake of Iran's 1979 Islamic revolution, Oman signed a \"facilities access agreement\" that allows U.S. forces access to Omani military facilities on April 21, 1980. Days after the signing, the United States used Oman's Masirah Island air base to launch the failed attempt to rescue the U.S. Embassy hostages in Iran, although Omani officials assert that they were not informed of that operation in advance. Under the agreement, which was last renewed in 2010, the United States reportedly can use\u2014with advance notice and for specified purposes\u2014Oman's military airfields in Muscat (the capital), Thumrait, Masirah Island, and Musnanah. Some U.S. Air Force equipment, including lethal munitions, is reportedly stored at these bases. According to February 2018 testimony of CENTCOM commander General Joseph Votel, each year Omani military forces participate in several exercises, and Oman allows 5,000 overflights and 600 landings by U.S. military aircraft and hosts 80 port calls by U.S. naval vessels. A few hundred U.S. military personnel are stationed in Oman, mostly Air Force.", "2019 Port Access Agreement . On March 24, 2019, Oman and the United States signed a \"Strategic Framework Agreement\" that expands the U.S.-Oman facilities access agreements by allowing U.S. forces to use the ports of Al Duqm (see above) and Salalah. Al Duqm, in particular, is large enough to handle U.S. aircraft carriers, and the agreement was seen by the United States as improving the U.S. ability to counter Iran in the region. Oman reportedly views the accord as bringing in additional investment to Al Duqm. ", "Participation in Middle East Strategic Alliance . Omani leaders express willingness to join a U.S.-backed \"Middle East Strategic Alliance\" of the GCC states and Jordan and Egypt, envisioned as countering Iran. That coalition was to be formalized at a U.S.-GCC summit planned for spring 2018 but, because of the intra-GCC rift, has been repeatedly postponed. The intra-GCC rift, as well as Yemen, Iran, and other issues, was discussed during the January 2019 visit to Oman of Secretary of State Michael Pompeo, according to a State Department announcement. On January 9, 2019, Sultan Qaboos hosted meetings on the \"economic and energy pillars of the Middle East Strategic Alliance,\" according to the Secretary's readout of his meeting with Qaboos on January 15, 2019. ", "Oman has shown its support for major U.S. operations in the region by making its facilities available consistently. Oman's facilities contributed to U.S. major combat operations in Afghanistan (Operation Enduring Freedom, OEF) and, to a lesser extent, Iraq (Operation Iraqi Freedom, OIF). According to the Defense Department, during major combat operations of OEF (late 2001) there were about 4,300 U.S. personnel in Oman, mostly Air Force, and U.S. B-1 bombers, indicating that the Omani facilities were used extensively for strikes during OEF. The U.S. military presence in Oman fell to 3,750 during OIF (which began in March 2003) because facilities closer to Iraq were used more extensively. Oman did not contribute forces either to OEF or OIF. After 2004, Omani facilities were not used for U.S. air operations in Afghanistan or Iraq.", "Because of his historic ties to the British military, Qaboos early on relied on seconded British officers to command Omani military services, and Oman bought British weaponry. Over the past two decades, British officers have become mostly advisory and Oman has shifted its arsenal mostly to U.S.-made major combat systems. Still, as a signal of the continuing close defense relationship, in April 2016 Britain and Oman signed a memorandum of understanding to build a base near Al Duqm port, at a cost of about $110 million, to support the stationing of British naval and other forces in Oman on a permanent basis. "], "subsections": [{"section_title": "U.S. Arms Sales and Other Security Assistance to Oman45", "paragraphs": ["Oman is trying to expand and modernize its arsenal primarily with purchases from the United States. However, Oman is one of the least wealthy GCC states and cannot buy U.S. arms as readily as the wealthier GCC states. Oman has received small amounts of Foreign Military Financing (FMF) that have been used to help purchase U.S. equipment, and Oman is eligible for grant U.S. excess defense articles (EDA) under Section 516 of the Foreign Assistance Act. The United States has not provided Oman with any FMF since FY2017 and none is requested for FY2020. Nonetheless, General Votel testified on February 5, 2019, that Oman \"will continue to develop an FMS (foreign military sales) portfolio that already includes over $2.7 billion in open FMS cases, though budgetary constraints may significantly slow new acquisitions in coming years.\" Some of the pending and prior FMS cases are discussed below. ", "F-16s . In October 2001, Oman purchased (with its own funds) 12 U.S.-made F-16 C/D aircraft. Along with associated weapons (Harpoon and AIM missiles), a podded reconnaissance system, and training, the sale was valued at about $825 million; deliveries were completed in 2006. In 2010, the United States approved a sale to Oman of 18 additional F-16s, with a value (including associated support) of up to $3.5 billion. Oman signed a contract with Lockheed Martin for 12 of the aircraft in December 2011, and deliveries were completed in 2016. Oman's Air Force also possesses 12 Eurofighter \"Typhoon\" fighter aircraft. Precision-Guided Munitions . Oman has bought associated weapons systems, including \"AIM\" advanced medium-range air-to-air missiles (AIM-120C-7, AIM-9X Sidewinder), 162 GBU laser-guided bombs, and other equipment. Countermeasures for Head of State Aircraft . In 2010 and 2013, the United States sold Oman equipment to protect the aircraft that Oman uses to transport Qaboos. Surface-to-Air and Air-to-Air Missiles . On October 19, 2011, DSCA notified Congress of a potential sale to Oman of AVENGER and Stinger air defense systems, asserted as helping Oman develop a layered air defense system. Missile Defense . In May 2013, then-Secretary of State John Kerry visited Oman reportedly in part to help finalize a sale to Oman of the THAAD (Theater High Altitude Area Defense system), the most sophisticated land-based missile defense system the U.S. exports. A tentative agreement by Oman to purchase the system, made by Raytheon, was announced on May 27, 2013, with an estimated value of $2.1 billion. However, a sale has not been announced. Several other GCC states have bought or are in discussions to buy the THAAD. Tanks as Excess Defense Articles . Oman received 30 U.S.-made M-60A3 tanks in September 1996 on a \"no rent\" lease basis (later receiving title outright). In 2004, it turned down a U.S. offer of EDA U.S.-made M1A1 tanks, but Oman asserts that it still requires armor to supplement the 38 British-made Challenger 2 tanks and 80 British-made Piranha armored personnel carriers it bought in the mid-1990s. Oman has also bought some Chinese-made armored personnel carriers and other gear, and it reportedly is considering buying 70 Leopard tanks from Germany with a value of $2.2 billion. Patrol Boats/ Maritime Security . Oman has bought U.S.-made coastal patrol boats (\"Mark V\") for counternarcotics, antismuggling, and antipiracy missions, as well as aircraft munitions, night-vision goggles, upgrades to coastal surveillance systems, communications equipment, and de-mining equipment. EDA grants since 2000 have gone primarily to help Oman monitor its borders and waters and to improve interoperability with U.S. forces. Oman has bought some British-made patrol boats. The United States also has sold Oman the AGM-84 Harpoon anti-ship missile. Anti t ank Weaponry . The United States has sold Oman antitank weaponry to help it protect from ground attack and to protect critical infrastructure. In December 2015, DSCA notified a potential sale to Oman of more than 400 TOW (tube-launched, optically tracked, wire-guided) antitank systems. The sale has an estimated value of $51 million. The United States also has provided to Oman 400 \"Javelin\" antitank guided missiles. "], "subsections": [{"section_title": "Professionalizing Oman's Forces: IMET Program and Other Programs", "paragraphs": ["The International Military Education and Training program (IMET) program is used to promote U.S. standards of human rights and civilian control of military and security forces, as well as to fund English language instruction, and promote interoperability with U.S. forces. About 100 Omani military students participate in the program each year, studying at 29 different U.S. military institutions. "], "subsections": []}]}, {"section_title": "Cooperation Against Terrorism/Illicit Activity48", "paragraphs": ["Oman cooperates with U.S. legal, intelligence, and financial efforts against various cross-border threats, particularly those posed by terrorist groups including Al Qaeda, Al Qaeda in the Arabian Peninsula (AQAP, headquartered in neighboring Yemen), and the Islamic State organization. No Omani nationals were part of the September 11, 2001, attacks and no Omanis have been publicly identified as senior members of any of those groups. According to recent State Department reports on terrorism, Oman is actively trying to prevent terrorist groups from conducting attacks and using the country for safe haven or transport. ", "As shown in the table above, the United States provides funding\u2014primarily through Nonproliferation, Antiterrorism, Demining, and Related (NADR) and other programs\u2014to help Oman counter terrorist and related activity and combat trafficking of WMD-related equipment. NADR funding falls into three categories: Export Control and Related Border Security (EXBS) funds, Anti-Terrorism Assistance (ATA) funds, and Terrorism Interdiction Program funding. These programs enhance the capabilities of the Royal Oman Police (ROP), the ROP Coast Guard, the Directorate General of Customs, the Ministry of Defense, the Ministry of Foreign Affairs, the Ministry of Transportation, the Ministry of Commerce and Industry, the Ministry of Transportation and Communication, and the Royal Army of Oman to interdict weapons of mass destruction (WMD), advanced conventional weapons, or illegal drugs at official Ports of Entry on land and at sea ports and along land and maritime borders. ATA funds are used to train the Royal Army of Oman and several Omani civilian law enforcement agencies on investigative techniques, maritime border security, cybersecurity, and to enhance their ability to detect and respond to the entry of terrorists into Oman. ", "In 2017, a 10-week EXBS training course helped the government of Oman establish a port control at the Port of Sohar. On December 13, 2018, the Administration notified Congress that up to $220,000 in FY2018 ATA funds would be provided to Oman to support training designed to enhance Oman's capabilities to reduce the flow of foreign terrorist fighters and related goods at points of entry, including through courses such as fraudulent travel document and behavioral analysis. ", "In 2005, Oman joined the U.S. \"Container Security Initiative,\" agreeing to pre-screening of U.S.-bound cargo from its port of Salalah to prevent smuggling of nuclear material, terrorists, and weapons. However, the effect of some U.S. programs on Omani performance is sometimes hindered by the lack of clear delineation between the roles and responsibilities of Oman's armed forces and law enforcement agencies. ", "There are no Omani nationals currently held in the U.S. prison for suspected terrorists in Guantanamo Bay, Cuba. During 2015-17, Oman accepted the transfer of 23 non-Omani nationals from Guantanamo Bay as part of an effort to support U.S. efforts to close the facility. "], "subsections": [{"section_title": "Anti-Money Laundering and Countering Terrorism Financing (AML/CFT)", "paragraphs": ["Oman is a member of the Middle East and North Africa Financial Action Task Force (MENA-FATF). Recent State Department terrorism reports credit Oman with transparency regarding its anti-money laundering and counterterrorist financing enforcement efforts and say that it has the lowest risk for terrorism financing or money laundering of any of the GCC countries. Oman does not permit the use of hawalas , or traditional money exchanges, in the financial services sector, and Oman has on some occasions shuttered hawala operations entirely. A 2010 Royal Decree was Oman's main legislation on anti-money laundering and combatting terrorism financing but, in 2016, Royal Decree 30/2016 increased efforts to counter terrorism financing by requiring financial institutions to screen transactions for money laundering or terrorist financing. In 2015, Oman signed an agreement with India to improve cooperation on investigations, prosecutions, and counterterrorism efforts. In May 2017, Oman joined with the other GCC states and the United States to form a Riyadh-based \"Terrorist Finance Target Center.\" "], "subsections": []}, {"section_title": "Countering Violent Extremism", "paragraphs": ["The State Department report on terrorism for 2017, referenced earlier, characterizes Oman's initiatives to address domestic radicalization and recruitment to violence as \"unclear\" in nature and scope. Oman's government, through the Ministry of Endowments and Religious Affairs (MERA), has conducted advocacy campaigns designed to encourage tolerant and inclusive Islamic practices, including through an advocacy campaign titled \"Islam in Oman.\" The Grand Mufti of Oman, Shaykh Ahmad al-Khalili, calls on Muslims to reject terrorism in his widely broadcast weekly television program. "], "subsections": []}]}]}, {"section_title": "Economic and Trade Issues", "paragraphs": ["Oman is in a difficult economic situation. It ran a budget deficit of $13 billion in 2016, and about $8 billion in 2017. Oman has addressed the shortfalls\u2014without drawing down its estimated $24 billion in sovereign wealth reserves\u2014by raising capital internationally. Since the beginning of 2017, Oman has raised over $10 billion by selling government bonds and receiving loans from Chinese and other banks. The government has cut subsidies substantially and has reduced the size of the government. ", "Despite Oman's efforts to diversify its economy, oil exports still generate over 70% of government revenues and nearly 50% of its gross domestic product (GDP). Oman has a relatively small 5.5 billion barrels (maximum estimate) of proven oil reserves, enough for about 15 years at current production rates. It exports approximately 820,000 barrels of crude oil per day. In part because it is a small producer, Oman is not a member of the Organization of the Petroleum Exporting Countries (OPEC). Oman has announced a \"Vision 2020\" strategy to reduce its dependence on the oil and gas sector. Oman has in recent years expanded its liquefied natural gas (LNG) exports, for which Oman has a large market in Asia. Oman is part of the \"Dolphin project,\" operating since 2007, under which Qatar is exporting natural gas to UAE and Oman through undersea pipelines, freeing up Oman's own natural gas supplies for sale to other customers. In December 2013, Oman signed a $16 billion agreement for energy major BP to develop Oman's natural gas reserves. ", "Oman is trying to attract foreign investment by positioning itself as a trading hub. The key to that strategy is the $60 billion project\u2014with some investment funding coming from Iran, Kuwait, China, the United Kingdom, and the United States\u2014build up Al Duqm (see Figure 1 ) as a transportation, energy, and military hub. Oman's plans for the port include a refinery ($6 billion alone), a container port, a dry dock, and other facilities for transportation of petrochemicals. A planned transit hub would link to the other GCC states by rail and enable them to access the Indian Ocean directly, bypassing the Persian Gulf. China's investments in Al Duqm are part of its \"Belt and Road Initiative\" to build a continuous trade link between China and Europe. Its $11 billion investment in Al Duqm is to build the \"Sino-Oman Industrial City\" there. The Chinese investments in Oman help China secure its oil supplies; Oman is China's fourth-largest source of oil. "], "subsections": [{"section_title": "U.S.-Oman Economic Relations", "paragraphs": ["The United States is Oman's fourth-largest trading partner. In 2018, the United States exported about $2 billion in goods to Oman, and imported about $1.1 billion in goods from it\u2014figures roughly equal to those of 2017. The largest U.S. export categories to Oman are automobiles, aircraft (including military) and related parts, drilling and other oilfield equipment, and other machinery. Of the imports, the largest product categories are fertilizers, industrial supplies, and oil by-products such as plastics. In part because of expanded U.S. oil production, the United States imports almost no Omani oil.", "Oman was admitted to the WTO in September 2000. The U.S.-Oman Free Trade Agreement was signed on January 19, 2006, and ratified by Congress ( P.L. 109-283 , signed September 26, 2006). According to the U.S. Embassy in Muscat, the FTA has led to increased partnerships between Omani and U.S. companies. General Cables and Dura-Line Middle East are two successful examples of joint ventures between American and Omani firms. These ventures are not focused on hydrocarbons, suggesting the U.S.-Oman trade relationship is not focused only on oil.", "The United States phased out development assistance to Oman in 1996. At the height of that development assistance program in the 1980s, the United States was giving Oman about $15 million per year in Economic Support Funds (ESF) for conservation and management of Omani fisheries and water resources. On January 23, 2016, the United States and Oman signed an agreement on cooperation in science and technology. The agreement paves the way for exchanges of scientists, joint workshops, and U.S. training of Omani personnel in those fields. "], "subsections": []}]}]}}
{"id": "R45516", "title": "The Transportation Infrastructure Finance and Innovation Act (TIFIA) Program", "released_date": "2019-02-15T00:00:00", "summary": ["The Transportation Infrastructure Finance and Innovation Act (TIFIA) program, administered by the Department of Transportation's Build America Bureau, provides long-term, low-interest loans and other types of credit assistance for the construction of surface transportation projects (23 U.S.C. \u00a7601 et seq.). The TIFIA program was reauthorized from FY2016 through FY2020 in the Fixing America's Surface Transportation (FAST) Act (P.L. 114-94). Direct funding for the TIFIA program is authorized at $300 million for each of FY2019 and FY2020. Additionally, state departments of transportation can use other federal-aid highway grant money, both formula and discretionary, to subsidize much larger loans. To date, states have not had to use other grant funding to subsidize credit assistance because the TIFIA program has a relatively large unexpended funding balance.", "The primary goal of the TIFIA program, historically, has been to enable the construction of large-scale surface transportation projects by providing financing to complement state, local, and private investment. The TIFIA program has been one of the main ways in which the federal government has encouraged the development of public-private partnerships (P3s) and private financing in surface transportation often backed by new, but sometimes uncertain, revenue sources such as highway tolls, other types of user charges, and incremental real estate taxes. To be eligible for TIFIA assistance, a project sponsor must be deemed creditworthy, that is, a good risk for repaying its debts, and must have a dedicated source of revenue for repayment. Project sponsors, therefore, are required to develop a funding mechanism, whether this is a new user fee or tax or the repurposing of existing fees and taxes. Changes to the TIFIA program have sought to make TIFIA assistance more accessible to less costly projects, but so far every TIFIA-supported project has cost $175 million or more.", "Financing projects instead of relying on pay-as-you go funding from taxes and other existing revenues can mean such projects can be constructed years earlier. TIFIA, therefore, is a means to accelerate project delivery and the benefits that flow from new infrastructure. The TIFIA program is also a relatively low-cost way for the federal government to support surface transportation projects because it relies on loans, not grants, and the TIFIA assistance is typically one-third or less of project costs. Another advantage from the federal point of view is that a relatively small amount of budget authority can be leveraged into a large amount of loan capacity. Because the government expects its loans to be repaid, an appropriation need only cover administrative costs and the subsidy cost of credit assistance. Program funding of $300 million can support approximately $4 billion in TIFIA loans.", "Since its enactment in 1998, the TIFIA program has provided assistance of $32 billion to 74 projects with a total cost of about $117 billion (in FY2018 inflation-adjusted dollars). All but one TIFIA credit agreement has been a loan; the exception is a loan guarantee. The average TIFIA-supported project cost is $1.5 billion, and the average TIFIA loan is $430 million (both in FY2018 dollars). About two-thirds of TIFIA loans have gone to highway and highway bridge projects, and another quarter to public transportation. TIFIA has supported at least one project in 21 states, the District of Columbia, and Puerto Rico, but the top 10 states account for about 80% of the 74 projects supported.", "The TIFIA program is likely to be considered in the 116th Congress during the reauthorization of the surface transportation programs. Program funding is one issue that may be discussed, because some stakeholders would like more budget authority despite a relatively large unexpended balance and the existing authority of states to use grant funding to pay the subsidy cost of credit assistance. Criticisms of the program and its implementation include the often slow decisionmaking process, the program's increasing risk aversion, and the limitation of the federal share of project costs to 33%, despite a statutory limit of 49%. Because of the relatively large unexpended balance, Congress might considered broadening the use of TIFIA assistance to nonsurface transportation and nontransportation infrastructure. Another option might be to create a national infrastructure bank, a federal infrastructure financing entity largely independent of other executive branch agencies, to take the place of TIFIA and other federal infrastructure credit assistance programs."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Transportation Infrastructure Finance and Innovation Act (TIFIA) program provides long-term, low-interest loans and other types of credit assistance for the construction of surface transportation projects. The TIFIA prog ram, administered by the Build America Bureau of the Department of Transportation (DOT), was reauthorized most recently in the Fixing America's Surface Transportation (FAST) Act ( P.L. 114-94 ) from FY2016 through FY2020. Direct funding for the TIFIA program to make loans is authorized at $300 million for each of FY2019 and FY2020, but state departments of transportation can also use federal-aid highway grant money, both formula and discretionary, to subsidize much larger loans.", "The primary goal of the TIFIA program, historically, has been to enable the construction of large-scale surface transportation projects by providing low-interest, long-term financing to complement state, local, and private investment. The TIFIA program has been one of the main ways in which the federal government has encouraged the development of public-private partnerships (P3s) and private financing in surface transportation often backed by new, but sometimes uncertain, revenue sources such as highway tolls, other types of user charges, and incremental real estate taxes. Since its enactment in 1998 as part of the Transportation Equity Act for the 21 st Century (TEA-21; P.L. 105-178 ) through FY2018, the TIFIA program has provided assistance of $32 billion to 74 projects with a total cost of about $117 billion (in FY2018 inflation-adjusted dollars).", "Congress has used the TIFIA program as a model for other initiatives, notably the Water Infrastructure Finance and Innovation Act (WIFIA) program, administered by the Environmental Protection Agency and the Army Corps of Engineers. Several recent proposals would expand TIFIA assistance. For example, the Trump Administration's $200 billion infrastructure plan, based on leveraging state, local, and private resources, proposed adding several billion dollars of budget authority for TIFIA and expanding eligibility to ports and airports. The experience of TIFIA over the past decade shows, however, that there are limits to financing projects in this way. These limits include the number of projects that can take advantage of credit assistance, the difficulties of developing revenue mechanisms to service loans, the typical need for grant funding to make up a portion of the capital, and the difficulties of attracting private investment to risky projects, particularly those for which demand is uncertain or hard to predict."], "subsections": []}, {"section_title": "Program Overview", "paragraphs": ["Credit assistance provided by the TIFIA program can be in the form of loans, loan guarantees, and lines of credit. To date, all TIFIA assistance except one loan guarantee has been in the form of loans. Loans and loan guarantees can be provided up to a maximum of 49% of project costs; lines of credit can be for an amount up to a maximum of 33% of project costs. Despite the higher limit established in law, DOT has generally limited loans and loan guarantees to no more than 33% of project costs, so as \"to ensure that the DOT shares the credit risk with other participants.\"", "Projects eligible for TIFIA assistance include highways and bridges, public transportation, transit-oriented development, intercity passenger bus and rail, intermodal connectors, intermodal freight facilities, and the capitalization of a rural projects fund. Eligible applicants for TIFIA assistance include state and local governments, railroad companies (including Amtrak), transit agencies, and private entities.", "Surface transportation projects are not evaluated for TIFIA assistance based on their projected benefits and costs. Instead, projects are assessed on creditworthiness, the ability of borrowers to repay their loans, and a number of other eligibility criteria. To be judged creditworthy, a project's senior debt obligations and the borrower's ability to repay the federal credit instrument must receive investment-grade ratings from at least one, but typically two, nationally recognized credit rating agencies. Generally, a project must cost $50 million or more to be eligible for assistance, but the threshold is $15 million for intelligent transportation system projects and $10 million for transit-oriented development projects, rural projects, and local projects. Another requirement is that loans must be repaid with a dedicated revenue stream, typically a project-related user fee, such as a toll, but sometimes dedicated tax revenue.", "The attractiveness of TIFIA financing is its low cost, its flexibility, and its long duration, features that are hard to match in the private capital market. Federal credit assistance provides funds at a low fixed rate, the Treasury rate for a similar maturity; for rural infrastructure projects, federal assistance is provided at half the Treasury rate. Loans are available for up to 35 years from the date of substantial completion of a project. Repayments can be deferred for up to five years after substantial completion, and amortization can be flexible. In some circumstances, TIFIA can reduce the transaction costs of borrowing, which for tax-exempt bonds typically include underwriter fees, bond counsel expenses, and the cost of borrowing funds before they are needed (known as \"negative carry\"). The Riverside County Transportation Commission in California is using TIFIA financing to build the I-15 Tolled Express Lanes Project, and has estimated that using traditional bond financing in lieu of a $150 million TIFIA loan would have cost an additional $25 million for the $471 million project.", "The characteristics of TIFIA financing can make it easier for project sponsors to attract the less patient and less flexible capital that is typically offered in the private market. This is especially important for projects like new toll roads, for which usage and revenue may take several years to grow to cover debt repayment. TIFIA financing is available with a senior or subordinate lien, but is typically used as subordinate debt, meaning it is in line to be repaid after the project's operational expenses and senior debt obligations. However, the TIFIA statute includes a provision which requires that in the event of a project bankruptcy, the federal government will be made equal with senior debt holders. This is referred to as the \"springing lien,\" and has led some to ask whether TIFIA financing is truly subordinate. The springing lien issue notwithstanding, TIFIA financing is generally thought to reduce project risk, thereby helping to secure private financing at rates lower than would otherwise be available.", "Financing projects instead of relying on pay-as-you go funding can mean such projects can be constructed years earlier than otherwise. TIFIA, therefore, is a means to accelerate project delivery and the benefits that flow from new infrastructure. Because of its advantages in terms of cost and flexibility, TIFIA may increase the number of projects that can be financed and thus provided on an accelerated schedule. In its 2016 report to Congress, DOT cited the example of managed lanes on U.S. 36 connecting Boulder and Denver, CO, a project it says was delivered 20 years earlier than anticipated because of TIFIA assistance."], "subsections": [{"section_title": "Credit Assistance Process", "paragraphs": ["Applications for credit assistance to DOT are accepted at any time. Formal acceptance into the program for evaluation follows a letter of interest from the project sponsor in a format prescribed by DOT. However, DOT recommends that project sponsors contact DOT much earlier for technical assistance to discuss and develop an application. This can involve an emerging project agreement between DOT and the project sponsor.", "Acceptance into the TIFIA program requires a fee of $250,000 that is used to cover the costs of DOT's outside financial and legal advice. Additional amounts may be necessary if DOT's costs exceed $250,000. DOT notes that fees for a single project are typically between $400,000 and $700,000. For projects with estimated costs of less than $75 million, DOT is permitted to draw on federal funds to cover its costs, up to a total of $2 million annually, rather than charging fees to prospective borrowers.", "Prior to submitting a formal application for credit assistance, DOT will review the letter of interest, the independent financial analysis, and any other supporting material. A key element of this review is an analysis of the creditworthiness of the project sponsor and the quality of the revenue pledged to repay the federal government. DOT also requires an oral presentation by the project sponsor. If these are satisfactory, DOT will invite the project sponsor to submit a formal application. The statute requires DOT to determine within 30 days whether the application is complete or whether additional material needs to be submitted. Within 60 days of that determination, DOT must inform the applicant whether the application has been approved or not. DOT staff make a recommendation to the DOT Council on Credit and Finance, with the Secretary of Transportation making the final decision.", "In addition to the regular credit assistance process, the FAST Act required DOT to create an expedited application process for low-risk projects. These are defined as projects requesting $100 million or less in credit assistance, with a dedicated revenue stream unrelated to project performance (e.g., a dedicated sales tax) and standard loan terms.", "Like highway and public transportation projects that receive federal grants, projects financed under TIFIA are subject to laws and regulations concerning planning requirements; review and mitigation of environmental effects; the use of domestic iron, steel, and manufactured goods; and payment of prevailing wages. For example, projects must comply with the requirements of the National Environmental Policy Act of 1969 (NEPA) regarding the effects of the project on the human and natural environment. Typically, the NEPA analysis must be well advanced before a letter of interest is submitted. A TIFIA loan or other credit assistance will not be made until a final NEPA decision has been issued.", "The process for securing assistance has been praised for being predictable, but it has also been criticized for being slow and bureaucratic. For example, an official of Transurban, an Australia-based operator of toll roads, told Congress that the company did not pursue a TIFIA loan for the I-395 high occupancy toll (HOT) lanes in Virginia, in part because of the slowness of the approval process. There has also been criticism that the TIFIA program office has become more risk-averse, favoring low-risk projects that might be able to obtain financing from conventional sources."], "subsections": []}, {"section_title": "Subsidy Cost", "paragraphs": ["Credit programs like TIFIA are governed by the Federal Credit Reform Act (FCRA) of 1990. Under FCRA, the cost to the federal government of a credit program is the administrative cost plus the subsidy cost of the credit assistance. According to FCRA, the subsidy cost is \"the estimated long-term cost to the government of a direct loan or a loan guarantee ... calculated on a net present value basis.\" The subsidy cost estimate takes into account potential losses to the government resulting from loan defaults. Budget authority is typically provided to cover subsidy and administrative costs of a credit program. Costs of the TIFIA program are met by funding from the Highway Trust Fund (HTF) authorized by the FAST Act.", "When a loan is made, the subsidy cost amount is taken from the available budget authority and added to money borrowed from the Treasury to make the loan. When the principal and interest are repaid by the borrower, money is transferred back to the Treasury. Budgeting for credit programs is done for a cohort of loans, which is a group of loans funded by one fiscal year's appropriation. If the subsidy cost estimate proves correct, the cost to the government, outside of the budget authority already provided, will be zero.", "The amount of credit assistance available to borrowers from an amount of budget authority is determined by the subsidy rate after administrative costs are subtracted. The subsidy rate is the subsidy cost as a percentage of the dollars disbursed. As an example, if administrative costs are ignored, for every $100 of budget authority at a subsidy rate of 10%, the federal government can loan out $1,000 because it expects to eventually receive back $900 calculated in today's dollars. The budget authority covers the subsidy cost, which in this case is $100. As the subsidy rate declines, the government can provide more credit assistance because it expects a greater amount to be repaid by borrowers. With a subsidy rate of 5%, the TIFIA program could lend $2,000 for every $100 of budget authority ($100/5% = $2,000).", "Forecasts of the cost of credit assistance necessarily rely on estimates of the interest rate (a Treasury bond with the same maturity as the loan), the repayment of loans, and the rate of defaults. Because conditions can change, agencies must reestimate the subsidy rate periodically, generally annually, for outstanding loans and loan guarantees. These reestimates appear in the Federal Credit Supplement published in the President's annual budget submission. Estimates and reestimates of the TIFIA subsidy rate are done by DOT in cooperation with the Office of Management and Budget (OMB). The subsidy rate and its reestimation provide information about the level of risk being undertaken by DOT and the subsequent performance of TIFIA-assisted projects. A single subsidy rate is calculated for all loans originated in a given fiscal year.", "The original subsidy rate for TIFIA loans originated in fiscal years with loans still outstanding ranges from 15.16% to 3.36%. The subsidy rate for FY2019 is estimated to be 6.3%. Current reestimates of these original subsidy rates range from -8.06% to 46.12%. The subsidy rate is negative when the government expects to receive repayments greater than the amount of loans, on a net present value basis. The increased (+) or decreased (-) cost to the government of these reestimates is reflected in the net lifetime reestimate amount ( Table 1 ).", "Based on the subsidy rate, the cost to the government has been approximately 7 cents for every dollar financed, according to DOT. However, the Congressional Budget Office (CBO) notes that this does not take into account the market value of the financial risk to which taxpayers are exposed by federal credit programs such as TIFIA. CBO estimates that including this financial risk the TIFIA program costs 33 cents for every dollar financed."], "subsections": []}, {"section_title": "Program Funding", "paragraphs": ["The FAST Act authorized $275 million for the TIFIA program in each of FY2016 and FY2017, $285 million in FY2018, and $300 million in each of FY2019 and FY2020. These amounts are much lower than those authorized in the Moving Ahead for Progress in the 21 st Century Act (MAP-21; P.L. 112-141 ), which greatly enlarged the TIFIA program ( Figure 1 ). Seen in isolation, this reduced DOT's capacity to issue loans by approximately $7.25 billion in FY2016, assuming a 10% subsidy rate and excluding administrative costs.", "However, the FAST Act also allows states to use funds from three other highway programs to pay for the subsidy and administrative costs of credit assistance: the discretionary Nationally Significant Freight and Highway Projects Program, known as INFRA grants; the formula National Highway Performance Program; and the formula Surface Transportation Block Grant Program. This use of grant funds has the potential to increase TIFIA financing much above the direct authorization, but at the discretion of state departments of transportation. Payment of the TIFIA subsidy cost has also been allowed as part of the Better Utilizing Investments to Leverage Development (BUILD) Transportation Discretionary Grants program (formerly TIGER program).", "Although direct funding for the TIFIA program was reduced in the FAST Act, DOT has not been limited in providing credit assistance. Funding for the TIFIA program is available until expended, and thus unused money accumulates from year to year. Unobligated budget authority in the TIFIA program was $1.65 billion at the end of FY2018, according to DOT. This amount has accumulated despite a clawback provision in MAP-21 that reduced TIFIA's budget authority by $640 million. The clawback provision was subsequently abolished in the FAST Act, presumably because of the reduction in the TIFIA program's authorization."], "subsections": []}, {"section_title": "Projects Financed", "paragraphs": ["Except for one loan guarantee, every credit agreement under the TIFIA program to date has been a loan. Through FY2018, TIFIA had provided loans worth about $32 billion (in FY2018 inflation-adjusted dollars). The overall cost of the 74 projects supported by TIFIA loans is estimated to be $117 billion (FY2018 dollars). The average project cost is about $1.5 billion and the average loan amount $430 million (both in FY2018 dollars). Consequently, the average TIFIA share of project costs has been about 28%. Over the 20-year history of the program, the average number of loans has been about four per year, worth about $1.6 billion (FY2018 dollars). The enlargement of the TIFIA program in FY2013 led to an increase in lending, but much of that occurred in a single year, FY2014 ( Figure 2 ).", "About two-thirds of TIFIA loans have gone to highway and highway bridge projects and another quarter to public transportation. Two loans (3%) have gone to railroad projects and another five (7%) to other surface transportation projects, including a combined parking and public transportation facility at O'Hare International Airport in Chicago.", "TIFIA assistance has been geographically limited, with projects in 21 states, the District of Columbia, and Puerto Rico receiving financing. Ten states account for about 80% of the 74 projects supported. These are California, Texas, Virginia, Colorado, Florida, Illinois, Washington, New York, North Carolina, and Maryland.", "User charges, including highway tolls, are the revenue pledge most often made by borrowers, accounting for half of the projects. Various taxes, particularly sales taxes, and general revenues make up most of the other half of project revenue pledges.", "At the time of DOT's most recent report to Congress on TIFIA, issued in August 2016, 86% of TIFIA loans were performing as expected, 8% were exceeding expectations, and 6% were performing below expectations. Through FY2018, two TIFIA-assisted projects have gone into bankruptcy, the South Bay Expressway toll road project in San Diego, CA, and the SH-130 toll road project (segments 5 and 6) near Austin, TX. The San Diego Association of Governments bought the South Bay Expressway project after it went bankrupt, and, according to DOT, \"repaid all outstanding TIFIA indebtedness.\" According to the DOT, the SH-130 TIFIA loan was converted to 34% ownership of the new company that will operate the toll road until 2062, a payment to the government of $15 million, and remaining debt of $87 million. It is uncertain whether the federal government will eventually receive payment equal to the amount of principal and interest that were originally payable on the $430 million TIFIA loan.", "The TIFIA program is the federal government's main tool for encouraging the establishment of public-private partnerships (P3s) and the investment of private capital in surface transportation. The low cost of borrowing, term length, and repayment flexibility can lower financial risk for private investors. P3s offer several advantages over traditional procurement methods, including additional capital, private management expertise, and risk transfer. By encouraging private finance and insisting on creditworthiness standards, the program relies, in part, on market discipline to stimulate projects with favorable benefits versus costs.", "Although the TIFIA program has supported the creation of P3s and leveraged private capital for transportation projects, government involvement remains more important in TIFIA-supported projects. According to one analysis of the TIFIA program through 2016, about one-third of TIFIA-supported projects (23 projects) were developed as P3s and the other two-thirds were governmentally procured. The 23 P3 projects had total project costs of $33 billion, of which 29% came from government grants, 28% TIFIA loans, 28% other debt, 13% private equity, and 1% other capital.", "TIFIA was initially designed to support large and very costly projects for which grant funding was unlikely to be enough. Despite this, there have been complaints that relatively few projects can take advantage of the program. Most typical highway and public transportation projects cost much less than the TIFIA thresholds for eligibility and have no obvious revenue stream to generate a repayment mechanism. Modifications to the TIFIA program, such as lower cost thresholds, lower interest rates for rural projects, and waived fees for smaller projects, have sought to make financing more accessible. However, to date, the size of TIFIA-supported projects does not appear to have declined. The smallest project since the passage of MAP-21 in July 2012, for example, is the U.S. 36 Managed Lane/Bus Rapid Transit Project between Boulder and Denver, CO, which had a total cost of $175 million. But this is phase 2 of a project that totaled almost $500 million. Moreover, there have been no TIFIA loans to rural project funds."], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "Funding", "paragraphs": ["In addition to the use of direct program funding, TIFIA assistance can be obtained by using other federal-aid highway funds, both discretionary and formula, and discretionary BUILD program (formerly TIGER program) funds. There have been a few BUILD program-funded TIFIA loans, but to date no states have traded formula grant funding for a larger loan. At the moment, states do not have to make that trade because the TIFIA program is not in danger of running out of budget authority. DOT calculated that unobligated budget authority in the TIFIA program at the end of FY2018 was $1.65 billion. This amount of end of fiscal year unobligated budget authority is much higher now than it was in FY2012, but the level has stabilized over the past few years ( Table 2 ).", "If the TIFIA program does exhaust its direct funding in the future, an unanswered question is whether states will choose to use grant funding to pay the subsidy and administrative costs of a loan. A similar option, the capitalization of a state infrastructure bank with grant funds, has largely gone unused, partly because states have planned to commit these funds to traditional projects years in advance.", "Congress could increase the lending capacity of the TIFIA program by authorizing and appropriating additional funding. However, there may not be enough suitable projects to make use of significantly greater budget authority, even if eligibility is expanded beyond surface transportation to include port, aviation, and economic development projects. To date, the greatest value of loans issued in any year has been about $8 billion. The average since the expansion of the program in FY2013 has been about $3.5 billion (in FY2018 dollars).", "More applications for credit assistance might result from lowering the fees and other costs associated with federal support. One option is to reduce the fees for projects of $75 million or more. All else equal, however, this would increase the administrative costs of the program and reduce its lending capacity. Another option is to increase the threshold below which one credit agency rating is needed rather than two on the senior debt and the federal credit instrument. Currently, the threshold is $75 million, but S. 3631 (115 th Congress) proposed to increase it to $150 million."], "subsections": []}, {"section_title": "Calculation of Subsidy Cost", "paragraphs": ["The calculation of the TIFIA program's subsidy cost has generally been conservative. To date, two TIFIA-financed projects have gone bankrupt, and, according to DOT, 6% of loans were underperforming in 2016. A less conservative calculation by DOT and OMB could allow DOT to lend a greater amount with the same amount of budget authority.", "It does appear that the federal government has adjusted its subsidy cost estimates downward over the past few years in recognition of DOT's loss experience under the TIFIA program. However, the lack of defaults may be due to the types of projects being assisted and the generally favorable economic conditions. An enlarged TIFIA program might mean assisting more risky projects, leading to a higher subsidy rate, all else being equal. The 20-year experience of the TIFIA program, furthermore, is possibly less informative than it appears. The share of loans that have been fully repaid is about 15%. Many of the projects that have received assistance are permitted to defer interest and principal payments and have very long amortization schedules, so there is still a great deal of uncertainty as to how they will perform over the long term. For example, the I-495 high occupancy toll (HOT) lanes project in Northern Virginia received credit assistance in 2007 and the lanes opened in 2012, but interest payments did not begin until 2017. Principal repayments are not scheduled to begin until 2032, and are to continue until loan maturity in 2047.", "Ultimately, decisions about the level of risk that the TIFIA program is willing to take are made by DOT's Credit Council and the Secretary of Transportation within the limits of the program's statutory requirements. However, a critic of TIFIA's decisions on risk has suggested developing \"an underlying risk framework and underwriting standards within which loans can be negotiated,\" and \"creating a federal advisory committee to evaluate industry trends and periodically assess the effectiveness of TIFIA's risk framework in meeting its policy objectives.\""], "subsections": []}, {"section_title": "Federal Share", "paragraphs": ["MAP-21 greatly enlarged the TIFIA program and at the same time raised the maximum federal share from 33% to 49% of eligible project costs. However, DOT announced after the statutory change that it would typically provide up to 33% and would provide amounts between 33% and 49% only in exceptional circumstances. To date, no project has received more than 33%. TIFIA appears to be maximizing its leveraging of nonfederal resources, but it may be limiting the projects that could use a larger share of TIFIA assistance. For example, the American Public Transportation Association has argued that an increased federal share \"would enable TIFIA credit assistance to meaningfully support certain projects with large public benefits that may be difficult to finance conventionally without federal credit support, while still ensuring other investors share in project costs and risks.\""], "subsections": [{"section_title": "Federal Share for Major Public Transportation Capital Projects", "paragraphs": ["By statute, the Secretary of Transportation may consider a TIFIA loan as part of the nonfederal share for federally funded highway and public transportation projects if the loan is repaid from nonfederal funds. For major public transportation capital projects seeking funding from the federal Capital Investment Grant (CIG) program (also known as \"New Starts\"), the Trump Administration has decided that it \"considers U.S. Department of Transportation loans in the context of all Federal funding sources requested by the project sponsor when completing the CIG evaluation process, and not separate from the Federal funding sources.\" In the CIG program, the maximum federal share of a project is 80%, although the share of funding permissible from the CIG program alone is lower. If projects seeking CIG grant funding receive unfavorable ratings because they are also proposing to use large TIFIA loans, then CIG project sponsors are more likely to request smaller TIFIA loans or perhaps to seek alternatives to TIFIA program financing. Low ratings on transit projects drawing on TIFIA loans could also stop them from moving forward. An option for Congress, such as H.R. 731 (116 th Congress), is to require TIFIA loans to be considered part of the nonfederal share of surface transportation projects."], "subsections": []}]}, {"section_title": "Speed of Administrative Decisionmaking", "paragraphs": ["Some project sponsors have stated that the process for obtaining TIFIA assistance led them not to seek TIFIA loans. A number of proposals have been suggested to speed up approvals, such as regular and more frequent DOT credit council meetings, increased administrative spending to more quickly assess applications, regular publication of information on the time it takes to reach application milestones, and changes to the Letter of Interest process to provide greater schedule certainty. The FAST Act required DOT to expedite projects thought to be lower-risk\u2014those requesting $100 million or less in credit assistance with a dedicated revenue stream unrelated to project performance and standard loan terms\u2014but it is not clear what effect this could have, as only two projects have received TIFIA loans of less than $100 million since the passage of the FAST Act. S. 3631 (115 th Congress) proposed additional criteria for expedited loans for public agency borrowers. Other options, though possibly more controversial, would be to expedite reviews with experienced sponsors or to prioritize the evaluation of certain projects, such as those with national benefits or that involve significant private capital, over others."], "subsections": []}, {"section_title": "Broadening Eligible Uses of TIFIA Loans", "paragraphs": ["The Trump Administration has proposed broadening the eligibility of TIFIA assistance from highways and public transportation to ports and airports. S. 3647 (115 th Congress) would have allowed $10 million in TIFIA program funds to pay the subsidy costs of credit assistance to airport-related projects. One reason TIFIA eligibility has been limited to surface transportation projects is that funding for the program comes from the Highway Trust Fund (HTF), which traditionally has been supported by revenues from highway users. Now that the HTF has relied heavily on general Treasury funds for a decade, Congress may want to revisit this limitation. If TIFIA were to begin making loans to a broader set of projects, DOT likely would need to bring in expertise to provide analysis and advice on these new sectors.", "Another option for broadening eligibility is to create a new entity such as a national infrastructure bank. Such proposals in the 115 th Congress include the National Infrastructure Development Bank Act of 2017 ( H.R. 547 ), the Partnership to Build America Act of 2017 ( H.R. 1669 ), and the Building and Renewing Infrastructure for Development and Growth in Employment (BRIDGE) Act ( S. 1168 ). Most proposals include a wide range of infrastructure projects, including transportation, water, energy, and telecommunications infrastructure. One purported advantage of a national infrastructure bank over other loan programs, such as TIFIA, is that it would have more independence in its operation, such as in project selection, and have greater expertise at its disposal.", "Most infrastructure bank proposals assume the bank would improve the allocation of public resources by funding projects with the highest economic returns regardless of infrastructure system or type. Selection of the projects with the highest returns, however, might conflict with the traditional desire of Congress to ensure funding for various types of projects. In the extreme case, major transportation projects might not be funded if the bank were to exhaust its lending authority on water or energy projects offering higher returns.", "The limitations of a national infrastructure bank include its duplication of existing programs like TIFIA. Most legislative proposals for infrastructure banks do not address this duplication, leading to questions about how each would run in parallel. Would a national infrastructure bank avoid current TIFIA-type projects or would it \"compete\" with the TIFIA program to finance these projects? The addition of a national infrastructure bank seems unlikely to increase the number of surface transportation projects involving major credit assistance without other substantial changes in the way such projects are typically funded and financed."], "subsections": []}]}]}}
{"id": "R45724", "title": "House Select Committee on the Modernization of Congress: Structure and Procedures", "released_date": "2019-05-16T00:00:00", "summary": ["On January 4, 2019, the House established the Select Committee on the Modernization of Congress by adopting Title II of H.Res. 6, the House rules package for the 116th Congress (2019-2020), on a 418-12 vote. The purpose of the select committee as stated in its authorizing resolution is \"to investigate, study, make findings, hold public hearings, and develop recommendations on modernizing Congress.\"", "Twelve Members, six from each party, have been selected by their leadership to serve on the select committee during its year-long investigation. The committee's authorizing resolution requires its membership to include two Members from the freshman class of the 116th Congress, two Members of the Rules Committee, and two Members of the Committee on House Administration. Funding for the select committee in the amount of $487,500 was provided through House adoption of H.Res. 245 on March 27, 2019.", "The committee has held four hearings to date, with additional meetings likely. Committee operations are scheduled to end on February 1, 2020. Any final report of the committee will be made public. Publication of the final report will require approval from at least two-thirds of the committee. Given that both parties are equally represented on the committee, some amount of bipartisan support will be needed to approve and publish the final report."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The Select Committee on the Modernization of Congress is the most recent effort of the House of Representatives to examine its internal procedures and operations through the use of a specialized committee, commission, or party conference or caucus group. The original Joint Committee on the Organization of Congress was constituted during the 79 th Congress (1945-1946) for the purpose of strengthening the role of Congress and its committees in the lawmaking process. In 1965, Congress reincarnated this joint committee to suggest additional changes in how the two chambers operate, and the committee was reconstituted during the 102 nd and 103 rd Congresses (1991-1994). While these efforts were bicameral in nature, other examinations of congressional operations, such as that being undertaken by this panel, have been focused primarily on the House. "], "subsections": []}, {"section_title": "Establishment and Duration", "paragraphs": ["On January 4, 2019, the House established the Select Committee on the Modernization of Congress by adopting Title II of H.Res. 6 , the House rules package for the 116 th Congress (2019-2020), on a 418-12 vote. The stated purpose of the select committee is \"to investigate, study, make findings, hold public hearings, and develop recommendations on modernizing Congress.\" The select committee's authorization ends on February 1, 2020, and any activities beyond that date would require additional authorization."], "subsections": []}, {"section_title": "Membership of the Select Committee", "paragraphs": ["Twelve Members have been appointed by the Speaker to the select committee in accordance with H.Res. 6 , six of whom were appointed on the recommendation of the minority leader. The committee's authorizing resolution further requires the membership of the committee to include", "two freshman Members, two Members from the Committee on Rules, and two Members from the Committee on House Administration. ", "The membership of this committee differs from that of other committees in three key ways: ", "1. Party ratios on committees generally reflect the overall party balance in the chamber. The select committee, however, is composed of an equal number of Democrats and Republicans (like the House Ethics Committee). 2. Service on the select committee does not count toward the committee membership limitations in House Rule X. 3. Members of the select committee are appointed by the Speaker based in part on recommendations of the minority leader. By comparison, placement on a standing committee generally occurs on the basis of a three-step process: first, recommendations of a party's steering committee are made; second, each party must approve those recommendations; third, committee assignment resolutions ratifying each party's selections are adopted on the House floor. ", "On January 4, 2019, Speaker Pelosi selected Representative Derek Kilmer (WA) to serve as chair of the Select Committee on the Modernization of Congress. On January 29, 2019, the Speaker appointed the five additional Democratic Members: Emanuel Cleaver (MO), Suzan DelBene (WA), Zoe Lofgren (CA), Mark Pocan (WI), and Mary Gay Scanlon (PA). On February 11, Republican Leader Kevin McCarthy recommended the six GOP Members: Tom Graves (vice chair, GA), Rob Woodall (GA), Susan Brooks (IN), Rodney Davis (IL), Dan Newhouse (WA), and William Timmons (SC)."], "subsections": []}, {"section_title": "Committee Rules and Procedures", "paragraphs": ["Section two of the select committee's authorizing resolution (Title II of H.Res. 6 ) created a set of procedures specific to the select committee that will help guide the committee's work during its year-long operation. These rules supplement House Rules X and XI, which govern most committee procedure that applies to the select committee, with certain exceptions.", "No legislative jurisdiction was delegated to the committee\u2014introduced measures will not be referred to it. The committee has the broad responsibility to study House operations with an eye toward modernizing the conduct of its business. In particular, the committee is charged with investigating the following seven areas:", "1. rules to promote a more modern and efficient Congress; 2. procedures, including the schedule and calendar; 3. policies to develop the next generation of leaders; 4. staff recruitment, diversity, retention, and compensation and benefits; 5. administrative efficiencies, including purchasing, travel, outside services, and shared administrative staff; 6. technology and innovation; and 7. the work of the House Commission on Congressional Mailing Standards (Franking Commission). ", "Building on the requirements of H.Res. 6, the select committee by a unanimous vote agreed to additional rules of procedure at its first meeting, held on March 12, 2019. The committee established its regular meeting day (the first Tuesday of each month), quorum requirements for various committee activities, and how the committee intends to conduct its questioning of invited witnesses. It takes two Members to make a quorum for a hearing, one-third for a markup (for instance, of any report the committee might release), and a majority \"actually present\" to issue a report. Committee rules also incentivize on-time arrival at a hearing with \"early-bird\" rules allowing Members present at the start to question witnesses before late-arrivers.", "The chair (Representative Kilmer) and vice chair (Representative Graves) are provided five minutes each to make opening statements, and the chair may recognize others to make opening statements as well. Committee rules place an overall time limit of 10 minutes for opening statements. Questioning witnesses occurs under the five-minute rule, and any committee member may submit to the chair \"questions for the record\" (written questions to witnesses who appeared) within 10 business days of a hearing. Although the committee is not authorized to issue subpoenas to compel the attendance of witnesses or the production of documents, it \"may recommend subpoenas and depositions and submit such recommendations to the relevant standing committee.\""], "subsections": []}, {"section_title": "Funding and Staffing", "paragraphs": ["On March 26, 2019, the Committee on House Administration reported H.Res. 245 , a resolution to fund House standing and select committees during the 116 th Congress, which the House agreed to the following day. This resolution authorized $487,500 for expenditures of the select committee during the course of its investigation. With operations of the select committee scheduled to end on February 1, 2020, all but $37,500 of this amount has been reserved for use during the first session of the 116 th Congress (2019).", "Prior to the adoption of H.Res. 245 , the select committee was provided with interim funding. ", "In addition, pursuant to H.Res. 6 , the select committee may use the services of House staff. "], "subsections": []}, {"section_title": "Hearings", "paragraphs": ["Consistent with its mandate, the committee's first hearing (March 12) was held for the purpose of receiving testimony from Members themselves regarding any suggested improvements to congressional operations. Thirty-five Members testified before the committee to present their own reform ideas spanning a wide range of subjects\u2014for instance, changes to the standing rules, family-friendly adjustments to the House schedule, additional resources to support the work of Congress, and ways to delegate more policymaking responsibilities to individual Members.", "The committee's next three hearings (held on March 27, May 1, and May 10) included testimony from Capitol Hill practitioners, former Members, scholars, and others on a number of proposals the committee might consider in making its own recommendations. Additional hearings and other meetings are likely to be convened throughout calendar year 2019, and information on current and upcoming activities of the committee can be found on its official website."], "subsections": []}, {"section_title": "Publication of Final Report", "paragraphs": ["H.Res. 6 states that the select committee \"shall submit a final report to the House.\" The final report is to include the committee's findings and any policy recommendations it might have. ", "Documents produced by House committees generally require a majority of the committee with a quorum present to support their publication. In the case of the select committee, a higher threshold of two-thirds is required to publish its final report. Given that the committee is composed of six Members from each party, some amount of bipartisan support will be needed to publish the final report. If all committee members are present for this vote, support from at least 8 of the 12 would be needed to meet the two-thirds threshold."], "subsections": []}, {"section_title": "Public Availability of Committee Records and Their Disposition", "paragraphs": ["House rules generally require committees to make their proceedings and written documents available to the public within a specified period of time. The select committee is not excepted from this obligation. As specified in Committee Rule 6, \"documents reflecting the proceedings of the Committee shall be made publicly available ... not more than 24 hours after each meeting has adjourned.\"", "After the committee's work is concluded, any records it produced during the course of its investigation will be distributed to the relevant standing committee(s) as designated by the Speaker, and any recommendations offered by the committee in its final report must be made public within 30 days of its submission to the House."], "subsections": []}, {"section_title": "CRS Experts List", "paragraphs": ["The below CRS experts are available to answer inquiries from congressional clients concerning the topics specified."], "subsections": []}]}}
{"id": "R44037", "title": "Cambodia: Background and U.S. Relations", "released_date": "2019-01-28T00:00:00", "summary": ["U.S. relations with the Kingdom of Cambodia have become increasingly strained in recent years in light of Prime Minister Hun Sen's suppression of the political opposition and his growing embrace of the People's Republic of China (PRC). During the previous decade, U.S. engagement with the Kingdom slowly strengthened as Western countries continued to pressure Hun Sen to abide by democratic norms and institutions and as the U.S. government attempted to prevent Cambodia from falling too heavily under China's influence. Following strong performances by the opposition in the 2013 and 2017 elections, the Cambodian government banned the largest opposition party, the Cambodia National Rescue Party (CNRP), in 2017. As a result, the ruling Cambodian People's Party (CPP) ran virtually unopposed in the 2018 National Assembly election. The Trump Administration and Congress have imposed sanctions in order to pressure Hun Sen into restoring democratic rights and dropping criminal charges against opposition leaders.", "While the U.S. government has criticized Hun Sen's backtracking on democracy, it also has sought to remain engaged with Cambodia. During the past decade, U.S. interests and foreign assistance efforts in Cambodia have included strengthening democratic institutions and norms, promoting the rule of law, increasing bilateral trade and investment, supporting economic growth, reducing poverty, and improving public health. The U.S. government has supported demining and related activities in Cambodia, which is among the countries most heavily affected by unexploded ordnance (UXO). Military engagement has included U.S. naval port visits, U.S. military assistance and training, and joint exercises.", "The United States and other countries have provided funding for the Extraordinary Chambers in the Courts of Cambodia (ECCC), also known as the Khmer Rouge Tribunal, established through a 2003 agreement between the government of Cambodia and the United Nations. Since the court commenced proceedings in 2006, it has convicted and sentenced three former Khmer Rouge leaders for crimes against humanity and war crimes committed during the period of Khmer Rouge rule (1975-1978). Following the conclusion of two trials in November 2018, the Cambodian government announced that the ECCC's work was concluded, despite calls by some Cambodians and international human rights groups to prosecute additional Khmer Rouge officials.", "In recent years, PRC assistance to Cambodia, by some measures, has begun to match total annual foreign aid flows from traditional major providers of official development assistance to Cambodia. China's economic support has given Hun Sen greater political room to maneuver, according to some analysts. In return, Cambodia has appeared increasingly willing to accommodate or support Beijing's positions on various regional issues, including territorial disputes in the South China Sea. Japan is the largest provider of Official Development Assistance and second-largest source of foreign direct investment in Cambodia.", "One of the poorest countries in Asia, Cambodia has performed well on some socioeconomic indicators since the United Nations brokered a peace settlement in 1991 and restored a constitutional monarchy in 1993. The Kingdom's economy has achieved an average annual growth rate of 7.7% since 1995, driven by growth in the agricultural, construction, garment, real estate, and tourism sectors. China, Japan, South Korea, and Southeast Asian countries are the main sources of foreign investment. The United States is the single largest overseas market for Cambodian merchandise exports, which consist mostly of garments and footwear."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["U.S. relations with the Kingdom of Cambodia have become increasingly strained in recent years in light of Prime Minister Hun Sen's suppression of the political opposition and his growing embrace of the People's Republic of China (PRC). During the previous decade, U.S. engagement with the Kingdom slowly strengthened as Western countries continued to pressure Hun Sen to abide by democratic norms and institutions and as the U.S. government attempted to prevent Cambodia from falling too heavily under China's influence. Following strong performances by the opposition in the 2013 and 2017 elections, the Cambodian government banned the largest opposition party, the Cambodia National Rescue Party (CNRP), in 2017. As a result, the ruling Cambodian People's Party (CPP) ran virtually unopposed in the July 2018 National Assembly election and won all 125 seats. The Trump Administration stated that the election \"failed to represent the will of the Cambodian people\" and represented \"the most significant setback yet to the democratic system enshrined in Cambodia's constitution.\u2026\" ", "Between 1975 and 1991, Cambodia endured the four-year reign of the Communist Party of Kampuchea (also known as the Khmer Rouge), during which an estimated 2 million Cambodians died; an invasion and occupation by Vietnam; and civil war. The Paris Peace Agreement, signed by Cambodia and 18 other nations pledging to support the country's sovereignty and reconstruction on October 23, 1991, ended the Cambodian-Vietnamese War and set out a framework for a liberal democracy with periodic and genuine elections. Since the United Nations administered the first postwar national elections in 1993, Cambodia has made fitful progress in its political and social development, including the conduct of elections, a vibrant civil society, and a relatively open mass media. ", "Hun Sen, age 65, has been the nation's leader for over 30 years, including as Premier of the Vietnam-backed Republic of Kampuchea between 1985 and 1993, and as Prime Minister after the United Nations-sponsored national elections in 1993. National politics are highly personalized, with Hun Sen at the helm, while corruption is widespread and political, legal, and judicial institutions remain weak. Although democratic institutions and practices have developed since the Peace Accords, Hun Sen often has employed undemocratic means to remain in power. According to some experts, the Cambodian leader has bolstered his political strength through a combination of \"guile and force\"; electoral victories; legal and extralegal political maneuvers; influence over the judiciary, broadcast media, and labor unions; patronage; cronyism; and intimidation. Some scholars have described the Cambodian polity before the election as an example of \"competitive authoritarianism,\" whereby multiparty elections are held and a civil society exists, but the national leader or political party maintains its dominance over them in undemocratic or unconstitutional ways. ", "The Cambodian National Rescue Party (CNRP), a union of two opposition parties led by Sam Rainsy, a long-time opposition leader, and politician and human rights activist Kem Sokha, made significant gains in the 2013 parliamentary election and 2017 local elections. Following the party's strong showing in the 2017 commune council elections, many political observers predicted that the 2018 national elections would continue the trend of increasing competitiveness between the CPP and the CNRP. Furthermore, some observers reported fewer irregularities in 2017 compared to the 2013 National Assembly election, due in part to financial and technical assistance from Japan and the European Union that focused on improvements in the voter registration system.", "Hun Sen, on the one hand, has maintained electoral support, particularly in rural areas, due in part to Cambodia's three decades of relative political stability and economic development under his regime. The CNRP's growing electoral strength, on the other hand, reflected the will of a younger and more globalized electorate that is less focused on Cambodia's past turbulence, more concerned about corruption and inequality, and more demanding about government accountability and performance, according to observers. Nearly two-thirds of the country's population are under the age of 30 and half are under the age of 25. ", "In November 2017, the Supreme Court of Cambodia, at the behest of the government, made a ruling that dissolved the CNRP for \"conspiring with the United States to overthrow the government.\" Then-U.S. Ambassador to Cambodia William Heidt stated that Hun Sen's accusations that the United States is attempting to overthrow the government were \"inaccurate, misleading, and baseless.\" In addition, the Supreme Court banned 118 CNRP members from participating in politics for five years. The government allowed 55 opposition seats to be filled instead by third parties, with many of them going to FUNCINPEC, the royalist party that dominated opposition politics until the late 2000s. The National Assembly also amended laws to remove CNRP commune councilors and village chiefs and replace them mostly with CPP members.", "Since 2008, the government has pursued several defamation charges against former CNRP president Sam Rainsy, a move regarded by many observers as politically motivated. Sam Rainsy subsequently has spent most of his time in self-imposed exile. In December 2017, the government charged Sam Rainsy with treason for posting a video on social media urging security personnel not to \"obey orders from any dictators if they order you to shoot and kill innocent people.\" Former CNRP vice-president Kem Sokha was detained between September 2017 and September 2018, awaiting trial for treason , allegedly for collaborating with the United States to foment a popular overthrow of the CPP. Kem was released on bail and placed under house arrest in September 2018. A U.S. Embassy spokesperson stated, \"We continue to call on the government of Cambodia to drop all charges against Mr. Sokha, remove restrictions on the political rights of him and other opposition leaders, and engage opposition leaders in an urgent dialogue aimed at building genuine national reconciliation.\""], "subsections": []}, {"section_title": "Crackdown on Government Critics and Civil Society", "paragraphs": ["Beginning in 2015 with new government restrictions on nongovernmental organizations (NGOs), and during the lead-up to the 2018 national elections, the Cambodian government placed increasing restrictions on political and social activism, civil society, free speech, and foreign-funded democracy programs. During 2015-2017, more than 25 opposition members and government critics were arrested, and many fled the country. In June 2016, government critic Kem Ley was killed under suspicious circumstances. In 2017, the Cambodian Foreign Ministry expelled the Washington, DC-based National Democratic Institute (NDI), which was engaged in democracy programs in Cambodia, on the grounds that NDI was not registered with the government. Government media outlets also alleged that NDI, which received financial support from the U.S. Agency for International Development (USAID), was involved in a conspiracy involving the CNRP and U.S.-funded NGOs to overthrow the government.", "In 2017, the government closed more than one dozen Cambodian radio stations that sold airtime to Voice of America (VOA) and Radio Free Asia (RFA). RFA, facing political and economic pressure from the government, closed its Phnom Penh office. Authorities also ordered the Cambodia Daily , known as an opposition newspaper, to shut down in September 2017, ostensibly for failing to pay taxes. In 2018, the government made its first arrest under a l\u00e8se-majest\u00e9 law, passed by the National Assembly in February 2018, which makes insulting the monarch a crime."], "subsections": []}, {"section_title": "U.S. Responses", "paragraphs": ["Congress periodically has imposed conditions upon some U.S. assistance to Cambodia in order to promote democracy and human rights in the Kingdom. From 1998 to 2007, Congress prohibited government-to-government assistance to Cambodia in order to pressure Hun Sen into fully instituting democracy, but allowed U.S. assistance to NGOs and some humanitarian programs to continue. Congress lifted the ban in 2007 due in part to improving democratic processes, although most U.S. assistance efforts in Cambodia continue to be channeled through NGOs. The FY2014 and FY2017 Consolidated Appropriations Acts placed conditions related to democratic governance upon some assistance to Cambodia. ", "The Administration and the 115 th Congress (2017-2018) took numerous steps in response to Hun Sen's recent suppression of the opposition, which include the following: ", "In November 2017, the Trump Administration withdrew $1.8 million in assistance to the National Election Committee (NEC). On December 12, 2017, the Subcommittee on Asia and the Pacific of the House Committee on Foreign Affairs held a hearing on U.S. policy options to promote democracy and human rights in Cambodia. On November 16, 2017, the Senate passed S.Res. 279 , urging the Department of the Treasury to consider blocking the assets of senior Cambodian government officials implicated in the suppression of democracy and human rights abuses. In December 2017, the Trump Administration announced that the U.S. government would \"restrict entry into the United States of those individuals involved in undermining democracy in Cambodia.\" In August 2018, in response to the National Assembly election, the Administration announced that it would \"expand\" the restrictions. Pursuant to Executive Order 13818, which implemented the Global Magnitsky Human Rights Accountability Act (Section 1261 of P.L. 114-328 ), in June 2018, the U.S. Department of the Treasury sanctioned Cambodian General Hing Bun Hieng, commander of Hun Sen's bodyguard unit, \"for being the leader of an entity involved in serious human rights abuses\" over a span of two decades. Sanctioned individuals are denied entry into the United States, and any assets that they hold in the United States are blocked. The Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), enacted on March 23, 2018, imposed conditions upon U.S. assistance to the Government of Cambodia related to democracy and regional security. The act mandated funds for democracy programs and \"programs in the Khmer language to counter the influence of the People's Republic of China in Cambodia.\" ", "In the 116 th Congress, on January 8, 2019, Senators Cruz and Coons introduced the Cambodia Trade Act of 2019 ( S. 34 ), which would require a report on the continuing participation of Cambodia in the U.S. Generalized System of Preferences (GSP) program. On January 11, 2019, Representatives Yoho, McCaul, and Engel introduced the Cambodia Democracy Act of 2019 ( H.R. 526 ), which would impose visa restrictions upon and block assets of Cambodian senior government officials that the President determines have undermined democracy or committed or directed serious human rights violations.", "Some policy experts maintain that continued U.S. engagement is the most effective course for promoting democratization from within and countering PRC influence. Some contend that many Cambodians view the United States favorably, and that Washington should continue to promote U.S. interaction with democratic forces in the Kingdom. In September 2018, Prime Minister Hun Sen, in a speech before the United Nations General Assembly, stated, \"We are heartedly regretful to highlight the fact that human rights nowadays have become 'a mission to impose civilization' for some powerful nations or, perhaps, as their operating standards as the pretext for interference under the name of political right protection.\""], "subsections": []}, {"section_title": "U.S.-Cambodia Cooperation", "paragraphs": ["U.S.-Cambodian relations expanded after 2007, when political and human rights conditions in the Kingdom improved and the U.S. government lifted some restrictions on U.S. assistance. Principal areas of U.S. engagement have included U.S. foreign assistance programs, demining activities, limited military assistance and cooperation, U.S. missing-in-action (MIA) recovery efforts, and U.S. naval port visits. In 2017, the Cambodian government suspended Angkor Sentinel, an annual bilateral military exercise launched in 2010 that focuses on international peacekeeping, humanitarian assistance, and military-to-military cooperation. Some observers interpreted the unilateral action as a sign of Hun Sen's further distancing the Kingdom from the United States. The Cambodian government also postponed indefinitely a U.S. humanitarian mission in the Kingdom, the U.S. Navy Mobile Construction Battalion (also known as Seabees), without an explanation. The Seabees had worked with RCAF since 2008 and performed more than $5 million in community service projects throughout the country. ", "In January 2019, U.S. Department of Defense Deputy Assistant Secretary for South and Southeast Asia Joseph H. Felter met with Cambodian military officials in Phnom Penh. The two sides discussed regional security issues and bilateral cooperation, including ways to improve defense ties and restart joint military activities. Felter also called on the Cambodian government to drop treason charges against Kem Sokha."], "subsections": []}, {"section_title": "U.S. and Other Foreign Assistance", "paragraphs": ["Postwar Cambodia has been heavily dependent upon foreign assistance from major foreign aid donors, particularly Japan, South Korea, the United States, Australia, and France. Official Development Assistance (ODA) for Cambodia totaled $797 million in 2016, not including assistance from China. The Kingdom's reliance upon foreign assistance, while still significant, has declined during the past decade-and-a-half. ODA fell from 120% of central government expenditures in 2002 to less than a third in 2015, according to World Bank figures. ", "Some analysts contend that ODA for Cambodia, part of a \"multibillion dollar international effort to transplant democracy in Cambodia since the early 1990s,\" long has kept Hun Sen's authoritarian tendencies in check, but has lost its effectiveness in doing so. The United States provided roughly $235 million in assistance related to good governance, democracy, and civil society between 1993 and 2018. In recent years, by some measures, assistance from China, which comes without conditions for good governance and human rights, has roughly matched the total assistance from major providers of ODA.", "The United States provided an estimated $79.3 million in foreign assistance to the Kingdom in FY2018, a decrease of 10% compared to FY2017. U.S. foreign assistance to Cambodia includes efforts to strengthen democratic institutions and civil society; reduce child and maternal mortality; and combat HIV/AIDS and other infectious diseases. International Military Education and Training (IMET) programs provide English language instruction and aim to expose the next generation of Cambodia's military leaders to \"American ways and values.\" U.S. demining assistance supports the removal of landmines and other unexploded ordnance (UXO). The Trump Administration's FY2019 foreign operations budget request would reduce annual assistance to Cambodia by nearly 75% compared to FY2017. "], "subsections": []}, {"section_title": "Khmer Rouge Tribunal", "paragraphs": ["The Extraordinary Chambers in the Courts of Cambodia (ECCC), an international tribunal established through an agreement between the government of Cambodia and the United Nations, began proceedings in 2006 to try Khmer Rouge leaders and officials responsible for grave violations of national and international law. The ECCC, which has convicted three Khmer Rouge senior figures at a reported cost of $300 million, has been financed through contributions by the Cambodian government and with donations by foreign countries, particularly Japan, both directly to the ECCC and to a U.N.-administered international trust fund.", "The U.S. government withheld assistance to the ECCC from 2006 to 2008 due to doubts about the court's independence due to alleged Cambodian government interference. In 2008, the United States began providing annual contributions to the international trust fund. In addition, the U.S. government has contributed to the Documentation Center of Cambodia (DC-Cam), an archive, library, and public service center focused upon Khmer Rouge atrocities, providing $9.8 million to DC-Cam since 2005. Since 2010, some U.S. foreign operations appropriations measures have placed conditions upon assistance to the tribunal in order to discourage corruption and political interference within the court and to ensure that the Cambodian government also was contributing to its costs. The Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) states that no assistance may be made available for the ECCC. ", "ECCC prosecutors charged five former Khmer Rouge leaders with crimes against humanity and war crimes. In 2012, \"chief executioner\" Kaing Guek Eav, who ran the infamous Toul Sleng prison in Phnom Penh, was sentenced to life in prison. Former Foreign Minister Ieng Sary died in March 2013, before the completion of his trial, while his wife, former Minister of Social Affairs Ieng Thirith, was declared mentally unfit for trial. ", "In August 2014, the court sentenced former leaders Nuon Chea and Khieu Samphan each to life in prison for some crimes against humanity, and in a separate trial in November 2018, each was convicted of additional crimes, including genocide. Although Cambodian and international human rights groups have advocated prosecuting midranking Khmer Rouge officials, Hun Sen has opposed further indictments, arguing that they would undermine national stability. At the end of the trials of Nuon Chea and Khieu Samphan in November 2018, Deputy Prime Minister Sar Kheng announced that the tribunal's work was finished. "], "subsections": []}, {"section_title": "Unexploded Ordnance", "paragraphs": ["Cambodia is among the world countries most heavily contaminated by unexploded ordnance (UXO), including cluster munitions, landmines, and other undetonated weapons left from U.S. bombing during the Vietnam War, the Vietnamese invasion of Cambodia in 1978, and civil wars during the 1970s and 1980s. In 1969, the United States launched a four-year carpet-bombing campaign, dropping 2.7 million tons of ordnance, mostly cluster munitions, on Cambodia, more than the amount that fell on Germany and Japan combined during World War II. Up to 25% of the cluster bombs failed to explode, according to some estimates. ", "There have been over 64,000 UXO casualties in Cambodia since 1979, including over 19,000 deaths. The economic costs of UXO include land prevented from being used for agricultural purposes, forestry, and cattle, and disruptions to irrigation and drinking water supplies. An estimated 761 square miles of the country remain contaminated with UXO. ", "With the help of international assistance, Cambodia has reduced the UXO casualty rate from roughly 250 people per year a decade ago to about 100 annually in recent years, according to the Landmine and Cluster Munition Monitor. About 50% of contaminated land reportedly has been cleared, although many of the remaining areas are the most densely affected. The Cambodian Mine Action Authority is finalizing plans to clear all contaminated land by 2025. Despite progress, the migration of many poor Cambodians to areas that have high concentrations of UXO reportedly has contributed to a recent spike in casualties. ", "Between 1993 and 2016, the U.S. government contributed over $124 million for UXO removal and disposal, related educational efforts, and survivor assistance programs in Cambodia. USAID's Leahy War Victims Fund has supported programs to help provide medical and rehabilitation services and prosthetics to Cambodian victims of UXO. Congress appropriated $5.5 million and $4.5 million in FY2016 and FY2017, respectively, for Department of State demining efforts in the Kingdom."], "subsections": []}, {"section_title": "U.S. Deportations of Cambodians", "paragraphs": ["More than 1,900 U.S. residents of Cambodian descent, of whom about 1,400 have felony convictions, are subject to deportation, according to U.S. Immigration and Customs Enforcement (ICE). Between 2002, when the two countries signed a Memorandum of Understanding on repatriation, and 2017, roughly 600 Cambodian nationals who were permanent U.S. residents and who had been convicted of felony crimes were deported to Cambodia. Many of them came to the United States during the 1980s as refugee children, and never have lived in Cambodia or had left when they were very young. Many Cambodians subject to deportation have jobs and families in the United States, and many served prison time in the United States for crimes committed during their youth. Under the Trump Administration, the number of Cambodian, Laotian, and Vietnamese nationals who have received orders of removal has risen significantly. In 2018, 110 U.S. residents of Cambodian descent were deported to Cambodia, compared to 29 in 2017 and 74 in 2016. ", "In 2017, the Department of Homeland Security's Immigration and Customs Enforcement agency (ICE) deemed that the Cambodian government was uncooperative or hindering U.S. deportation efforts, and in violation of its international obligations, and placed Cambodia on a list of \"recalcitrant countries.\" The U.S. government imposed limited visa restrictions upon Cambodian Foreign Ministry employees and their families pursuant to Section 243(d) of the Immigration and Nationality Act."], "subsections": []}, {"section_title": "Economic Conditions67", "paragraphs": ["In the past decade-and-a-half, Cambodia, one of the poorest countries in Asia, has performed well on some socioeconomic indicators. The Kingdom's economy, which largely was destroyed by the Khmer Rouge and subsequent conflicts, has achieved an average annual growth rate of 7.7% since 1995 and 7.0% since 2014, driven largely by foreign investment and the development of the agricultural, construction, garment, real estate, and tourism sectors. China, Japan, South Korea, and Southeast Asian countries are the main sources of foreign investment in Cambodia. ", "Cambodia's garment industry, largely run by companies from China, Hong Kong, and Taiwan, forms a growing pillar of the nation's economy, employing roughly 800,000 workers and constituting about 40% of the nation's GDP. Since 2000, Cambodia has risen from being the 39 th -largest exporter of textiles and apparel to the 15 th largest in 2016, according to World Bank trade data. Garment and footwear products constitute about 80% of Cambodian merchandise exports, with 43% reportedly going to the EU and 29% to the United States. ", "Economic development has brought social and environmental costs. Hundreds of thousands of Cambodians reportedly have been displaced as government, business, and foreign entities, often in collusion, have confiscated their land and homes, sometimes forcibly or without proper compensation, to make way for agricultural, mining, logging, tourism, and urban development projects. Although forced relocations have continued, the number of cases reportedly has declined in recent years. Cambodia has one of the highest deforestation rates in the world and illegal logging continues, due to strong demand for wood from China and Vietnam, corruption, and suppression of environmental activists.", "Labor relations have shown some signs of strain in recent years, particularly as the garment industry has developed. Garment workers participated in large-scale demonstrations for higher wages in 2013-2014, which coincided with antigovernment demonstrations led by the CNRP. Cambodia's National Assembly adopted a new Law on Trade Unions in 2016, which some analysts say imposes greater restrictions on labor rights. In August 2017, the Cambodian government announced that it would enact a national minimum wage law, which some analysts surmise was done to boost labor support for the CPP."], "subsections": [{"section_title": "U.S. Trade", "paragraphs": ["In 2017, U.S.-Cambodia bilateral trade was worth nearly $3.46 billion, including $3.06 billion in Cambodian goods exported to the United States. Although China surpassed the United States as Cambodia's largest trading partner in 2012, the United States remains the largest single overseas market for Cambodian merchandise exports. According to the U.S. International Trade Commission, over half of U.S. imports from Cambodia in 2017 were knitted or crocheted clothing. ", "Some Cambodian products, including handbags and travel goods, receive preferential or duty-free tariff treatment under the U.S. Generalized System of Preferences program. Some policymakers have considered suspending GSP treatment upon certain Cambodian exports to the United States worth about $400 million annually in order to pressure Hun Sen into reversing his suppression of democracy. Other experts argue that restrictions on Cambodian exports may hurt Cambodian workers and encourage Cambodia to seek even closer relations with China, while it is uncertain whether such economic sanctions would weaken Hun Sen politically. ", "Cambodia acceded to the World Trade Organization in 2004, and the Kingdom has made commitments to reduce tariffs and fulfill other obligations by 2018 as a member of the Association of Southeast Asian Nations (ASEAN) Free Trade Area. Cambodia also is a party to the proposed Regional Comprehensive Economic Partnership (RCEP), a trade pact that includes the 10 ASEAN member states and 6 other Indo-Pacific countries, including China. Negotiations to reach a final agreement are expected to continue in 2019. "], "subsections": []}]}, {"section_title": "Cambodia and China", "paragraphs": ["The PRC has become Cambodia's largest economic benefactor at a time when major ODA donors have become increasingly critical of Hun Sen's authoritarian policies. China's economic support has lessened the influence of foreign assistance conditions imposed by Western aid donors and given Hun Sen more political room to maneuver, both domestically and internationally, according to some analysts. In return, Cambodia has appeared increasingly willing to accommodate or support Beijing's positions on various regional issues, including territorial disputes in the South China Sea. Cambodia is said to be the Southeast Asian country upon which China exerts the greatest influence, and to be China's \"most reliable partner in Southeast Asia.\"", "According to one assessment, China has provided Cambodia about $15 billion in assistance and concessionary loans over the past two decades, and around 42% of the kingdom's external debt is owed to China. PRC foreign assistance to Cambodia, which has included development financing and grants, Chinese-built infrastructure, government buildings, and sports facilities, as well as support for public health and education, has become a dominant influence on the Kingdom's development. A PRC entity is constructing one of Cambodia's largest development projects, a $3.8 billion deep-water port on the Gulf of Thailand. ", "By some accounts, China is the largest foreign investor in Cambodia, with cumulative investment of between $14 billion and $16 billion. Major sectors for Chinese investment include agriculture, garments, hydropower, infrastructure, mining, and tourism. According to one report, China accounted for nearly 30% of investment capital in Cambodia in 2016, while that from the United States constituted less than 4%. ", "Cambodians have expressed mixed views about China's economic influence. Some say that Chinese investments and infrastructure have brought tangible economic benefits and spurred economic development. Cambodian social and political activists have expressed concerns about Chinese economic projects, including their quality, effects on the environment, and lack of transparency. Furthermore, many Cambodians have been evicted from their homes to make way for Chinese-backed economic projects, or their communities have been adversely affected by an influx of Chinese businesses, workers, and tourists.", "Domestic and regional demand for energy and foreign investment largely from China have driven hydropower projects in Cambodia and neighboring countries. Chinese firms reportedly have invested roughly $2 billion in the construction of seven dams in the Kingdom. Many experts have warned about environmental degradation and ecological damage, loss of fish stocks, displacement of communities, and adverse effects on livelihoods due to unregulated hydropower projects on the Mekong River. A proposed, Chinese-backed, 2,600-megawatt hydropower project, the Sambor Dam, would dwarf other dams in Cambodia. According to a government-commissioned report that reportedly was leaked in 2018, the Sambor megadam, if built, would have devastating impacts on food security in the region, particularly in Cambodia and Vietnam. Experts say that it would block fish migrations between southern Laos and Cambodia's Tonle Sap Lake, destroy fish habitats, and prevent sediment from flowing downstream and fertilizing agricultural areas in the Mekong Delta. ", "Beijing has become a principal provider of military assistance to Cambodia, extending loans and military equipment, including small arms, tanks, trucks, helicopters, and aircraft, to the Royal Cambodian Armed Forces. China reportedly also has provided military education and training and sponsored exchanges of senior military leaders. Some analysts see PRC-Cambodian military cooperation as a response to growing security ties between the United States and Vietnam. Since 2016, China and Cambodia twice have carried out Golden Dragon , a joint military exercise involving over 400 People's Liberation Army (PLA) and RCAF soldiers involved in combat, counterterrorism, UXO removal, humanitarian, and disaster response exercises. The two countries reportedly plan a larger Golden Dragon event in 2019. "], "subsections": []}]}}
{"id": "R45345", "title": "Intelligence Community Whistleblower Protections: In Brief", "released_date": "2019-01-18T00:00:00", "summary": ["Whistleblowing is \"the act of reporting waste, fraud, abuse and corruption in a lawful manner to those who can correct the wrongdoing.\" Intelligence community (IC) whistleblowers are those employees or contractors working in any of the 17 elements of the IC who reasonably believe there has been a violation of law, rule, or regulation; gross mismanagement; waste of resources; abuse of authority; or a substantial danger to public health and safety. The IC has publicly recognized the importance of whistleblowing, and supports protections for whistleblowers who conform to guidelines to protect classified information. The Director of National Intelligence (DNI) whistleblowing policy and guidance is publicly available and specifically addresses the process for making protected disclosures and whistleblower protections for IC contractors, members of the Armed Forces, and federal employees. There are differing opinions, however, on whether the IC's internal processes have the transparency necessary to ensure adequate protections against reprisal, and whether protections for IC contractors are sufficient.", "IC whistleblower protections have evolved in response to perceptions of gaps that many believed left whistleblowers vulnerable to reprisal. The first whistleblower legislation specific to the IC was limited to specifying a process for IC whistleblowers to make a complaint but offered no specific protections. Subsequent legislation included only general provisions for protecting IC whistleblowers with no additional guidance on standards for implementation. Presidential Policy Directive (PPD)-19, signed in 2012, provided the first specific protections against reprisal actions for making a complaint. The Intelligence Authorization Act for Fiscal Year 2014 codified these provisions, which were further supported with IC implementation policy. Separate legislation under Title 10 of the U.S. Code, along with DOD implementing guidance, provides protections for members of the Armed Forces, including those assigned to elements of the IC. In early 2018, Congress passed legislation to address perceived gaps in protections for IC contractors."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Whistleblowing is \"the act of reporting waste, fraud, abuse and corruption in a lawful manner to those who can correct the wrongdoing.\" Intelligence Community (IC) whistleblowers are those employees or contractors working in any of the 17 elements of the IC who reasonably believe there has been a violation of law, rule, or regulation; gross mismanagement; waste of resources; abuse of authority; or a substantial danger to public health and safety. The essential distinction between whistleblowers generally and those in the IC (or those who otherwise have security clearances) is the concern for protecting classified information that may be involved in an IC-related incident or complaint. The IC has recognized that whistleblowing can save taxpayers' dollars, help ensure an ethical and safe working environment, and enable timely responses for corrective action. ", "Whistleblowing protections for employees and contractors in the IC are extended only to those who make a lawful disclosure. They do not cover disclosures that do not conform to statutes and directives prescribing reporting procedures intended to protect classified information, such as leaking to the media or a foreign government. The whistleblower protections do not apply to a difference of opinion over policy, strategy, analysis, or priorities for intelligence funding or collection unless there is a reasonable concern over legality or constitutionality. Whistleblowing protections also do not protect against legitimate adverse personnel or security clearance eligibility decisions if the agency can demonstrate that it would have taken the same action in the absence of a protected disclosure. ", "Congress and the executive branch have defined in statute and directives procedures for IC whistleblowers to make protected disclosures that also provide for the security of classified information. The Director of National Intelligence (DNI) whistleblowing policy and guidance is publicly available and specifically addresses whistleblower process and protections for IC contractors, members of the Armed Forces, and federal employees. There are differing opinions, however, on whether the IC's internal processes have the transparency necessary to ensure adequate protections against reprisal, and whether protections for IC contractors are sufficient. ", "IC whistleblower protections have evolved in response to perceptions of gaps that many believed left whistleblowers vulnerable to reprisal. The first whistleblower legislation specific to the IC was the Intelligence Community Whistleblower Protection Act (ICWPA) of 1998. It was limited to specifying a process for an IC whistleblower to make a complaint but offered no specific protections. The Intelligence Authorization Act for Fiscal Year 2010 included provisions for protecting IC whistleblowers, though these were general and subject to different standards of implementation. Presidential Policy Directive (PPD)-19, signed in 2012, provided the first specific protections in response to perceptions that IC whistleblowers remained vulnerable to reprisal actions for making a complaint. The Intelligence Authorization Act for Fiscal Year 2014 codified the PPD-19 provisions and Intelligence Community Directive (ICD)-120 established a PPD-19 implementation policy. For members of the Armed Forces assigned to elements of the IC, 10 U.S.C. \u00a71034 provides whistleblower protections. Department of Defense (DOD) implementing guidance for Section 1034 can be found in DOD Directive 7050.06, Military Whistleblower Protection . In January 2018, Congress passed P.L. 115-118 . Section 110 amended the National Security Act of 1947 and the Intelligence Reform and Terrorism Prevention Act of 2004 to include provisions to address perceived gaps in protections for IC contractors."], "subsections": []}, {"section_title": "Intelligence Community Whistleblower Protection Act (ICWPA) of 1998", "paragraphs": ["The Intelligence Community Whistleblower Protection Act of 1998 (ICWPA) was intended to assist whistleblowers in the IC who are specifically excluded from the Whistleblower Protection Act of 1989. It should be noted that the ICWPA makes no explicit mention of members of the Armed Forces assigned to an IC element. It amended previous acts of Congress\u2014the Central Intelligence Agency Act of 1949 and the Inspector General Act of 1978\u2014to enable an IC government employee or contractor \"who intends to report to Congress a complaint or information with respect to an urgent concern\" to report to the Inspector General (IG) of the employee's or contractor's IC agency. Congress noted that the absence of this provision in law previously \"may have impaired the flow of information needed by the intelligence committees to carry out oversight responsibilities.\" Consequently, the ICWPA defines formal processes for submitting complaints that ensure the protection of classified information that may be involved: ", "It requires the IG to report within 14 days all credible complaints to the Director of the CIA or to the head of the establishment who, in turn, is required to report the complaint to the congressional intelligence committees within 7 days. In the event the IG does not report the complaint or reports it inaccurately, the employee or contractor has the right to submit the complaint to Congress directly. This may be done (1) after the employee has provided notice to the IG, and (2) after the employee has obtained from the IG procedures for protecting classified information when contacting the congressional intelligence committees.", "Although the ICWPA provides a process for IC whistleblowers\u2014employees and contractors\u2014to securely report complaints to Congress via the relevant IC agency IG, it offers no specific provisions for protecting whistleblowers from reprisal or punishment."], "subsections": []}, {"section_title": "Intelligence Authorization Act (IAA) for Fiscal Year 2010", "paragraphs": ["The IAA for FY2010 ( P.L. 111-259 ) included the first general provisions for protection of whistleblowers as part of legislation that established the Office of the Inspector General of the Intelligence Community (OIGIC), headed by the Inspector General of the Intelligence Community (IGIC). Section 405(a)(1) of the IAA for FY2010 added a new Section 103H to the National Security Act of 1947. Section 103H(g) permitted lawful disclosures to the IGIC, but lacked the specificity of later whistleblower protection legislation and directives: ", "(3) The Inspector General [of the Intelligence Community] is authorized to receive and investigate, pursuant to subsection (h), complaints or information from any person concerning the existence of an activity within the authorities and responsibilities of the Director of National Intelligence constituting a violation of laws, rules, or regulations, or mismanagement, gross waste of funds, abuse of authority, or a substantial and specific danger to the public health and safety. Once such complaint or information has been received from an employee of the intelligence community\u2014", "(A) the Inspector General shall not disclose the identity of the employee without the consent of the employee, unless the Inspector General determines that such disclosure is unavoidable during the course of the investigation or the disclosure is made to an official of the Department of Justice responsible for determining whether a prosecution should be undertaken; and", "(B) no action constituting a reprisal, or threat of reprisal, for making such complaint or disclosing such information to the Inspector General may be taken by any employee in a position to take such actions, unless the complaint was made or the information was disclosed with the knowledge that it was false or with willful disregard for its truth or falsity.", "Section 405 does cover contractors in addition to federal employees of IC elements:", "The Inspector General [of the IC] shall have access to any employee, or any employee of a contractor, of any element of the intelligence community needed for the performance of the duties of the Inspector General.\" ", "An employee of an element of the intelligence community, an employee assigned or detailed to an element of the intelligence community, or an employee of a contractor to the intelligence community who intends to report to Congress a complaint or information with respect to an urgent concern may report such complaint or information to the Inspector General.", "Section 425(d) of the IAA for FY2010 also amended the Central Intelligence Agency Act of 1949 clarifying existing protections against reprisals against CIA employees who make lawful disclosures to the CIA Inspector General."], "subsections": []}, {"section_title": "Presidential Policy Directive (PPD)-19", "paragraphs": ["PPD-19, Protecting Whistleblowers with Access to Classified Information , signed by President Obama on October 10, 2012, provided the first executive branch protections for IC whistleblowers. PPD-19 specifically protects some employees in the IC (it specifically excludes members of the Armed Forces) with access to classified information, from personnel actions taken in reprisal for making a lawful disclosure. ", "PPD-19 defines a protected disclosure in part as follows:", "a disclosure of information by the employee to a supervisor in the employee's direct chain of command up to and including the head of the employing agency, to the Inspector General of the employing agency or Intelligence Community Element, to the Director of National Intelligence, to the Inspector General of the Intelligence Community, or to an employee designated by any of the above officials for the purpose of receiving such disclosures, that the employee reasonably believes evidences (i) a violation of any law, rule, or regulation; or (ii) gross mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety.", "PPD-19 prohibits reprisals (1) that could affect a whistleblower's eligibility for access to classified information; or (2) involve a personnel action against the IC employee making a protected disclosure. PPD-19 requires IC elements to certify to the DNI a process for IC employees to seek a review of personnel actions the employee believes are in reprisal for making a lawful disclosure. The review process also must provide for the security of classified information involved in a disclosure. As part of the review process, PPD-19 requires the IC element Inspector General to determine whether a personnel action was in reprisal for a lawful disclosure. The IG makes recommendations for corrective action in the event of a determination that a violation took place. The agency head \"shall carefully consider the findings of and actions recommended by the agency Inspector General.\" The agency head does not have to accept an IG's recommendation for corrective action. IC agencies also have to certify to the DNI that the agency has a review process that permits employees to appeal actions involving eligibility for access to classified information that are alleged to be in violation of prohibitions against retaliation for making lawful disclosures. PPD-19 allows for a whistleblower to request an external review by an IG panel chaired by the IGIC if the employee has exhausted the agency review process. In the event the panel decides in the employee's favor, the agency must consider but does not have to accept the panel's recommendation for corrective action. It requires the IGIC to report annually to the congressional intelligence committees the IG determinations and recommendations and IC element head responses to the determinations and recommendations. PDD-19 requires the executive branch to provide training to employees with access to classified information (not including contractors or members of the Armed Forces) regarding protections for whistleblowers."], "subsections": []}, {"section_title": "Title VI of the Intelligence Authorization Act (IAA) for Fiscal Year 2014", "paragraphs": ["Title VI of the FY2014 IAA ( P.L. 113-126 ) codified provisions of PPD-19 and provided the first expansive statutory protections for IC whistleblowers against personnel or security clearance actions made in reprisal for protected disclosures. ", "Section 601 of Title VI protected IC whistleblowers from any personnel action made in retaliation for a lawful disclosure. This includes a lawful disclosure to the Director of National Intelligence (or any employees designated by the DNI for such purpose), the Inspector General of the Intelligence Community, the head of the employing agency (or an employee designated by the head of that agency for such purpose), the appropriate inspector general of the employing agency, and a congressional intelligence committee, or a member of a congressional intelligence committee. Section 601 of Title VI made no specific mention of protections for contractors, however. A lawful disclosure is defined in the legislation as a disclosure that an IC employee whistleblower reasonably believes is a violation of \"Federal law, rule or regulation ... or mismanagement, a gross waste of funds, an abuse of authority, or substantial and specific danger to public health and safety.\" Section 602 of Title VI provided protections against retaliatory revocation of the security clearance of a covered government employee whistleblower for making a lawful disclosure . Section 602 also requires the development of appeal policies and procedures for any decision affecting a whistleblower's security clearance that the whistleblower alleges is in reprisal for having made a protected disclosure. This provision also enabled the whistleblower to retain his/her current employment status in the government, pending the outcome of the appeal. Section 602 of Title VI did not permit judicial review, nor does it permit a private right of action. Section 602 of Title VI does not make any mention of contractors."], "subsections": []}, {"section_title": "Intelligence Community Directive (ICD)-120", "paragraphs": ["First signed in 2014, and updated on April 29, 2016, ICD-120, Intelligence Community Whistleblower Protection , provides IC implementing guidance for PPD-19. ICD-120 provisions include the following: ", "Protections against reprisal involving a personnel action against the IC employee making a protected disclosure. ICD-120 excludes members of the Armed Forces, and makes no reference to contractors. Protections from reprisal for a protected disclosure that could affect an IC whistleblower's eligibility for access to classified information. This provision includes contractors and members of the Armed Forces. A requirement for each IC element to have a review process to permit appeals for any decision involving a security clearance allegedly in retribution for making a lawful disclosure. The provision allows the whistleblower to maintain his/her employment status while a decision is pending. Provision for an employee alleging a reprisal who has exhausted the internal agency review process to request an External Review Panel chaired by the IGIC. A requirement for IC-wide communications and training on whistleblower protections."], "subsections": []}, {"section_title": "Whistleblower Protections for Members of the Armed Forces Assigned to the IC", "paragraphs": ["Section 1034 of Title 10 U. S. Code provides protections against personnel actions taken in retaliation for protected communications by members of the Armed Forces. The Office of the DNI cites this statute as applicable to members of the Armed Forces assigned to the IC elements. Section 1034\u2014unlike the ICWPA, which makes no mention of applicability to the Armed Forces\u2014does not provide a process for making a protected communication that also protects classified information. Section 1034", "allows members of the Armed Forces to communicate with a Member or Members of Congress; an Inspector General; a member of the DOD audit, inspection, investigation, or law enforcement organization; any person or organization in the chain of command; a court-martial proceeding; or any other organization designated pursuant to regulations or other established administrative procedures for such communications; or testimony, or otherwise participating in or assisting in an investigation or proceeding involving Congress or an Inspector General; specifies prohibited personnel actions in reprisal for a member of the Armed Forces making a protected communication; enables the DOD to take action to mitigate hardship for an Armed Forces member following a preliminary finding concerning an alleged reprisal for a protected communication; requires the inspector general conducting an investigation into a protected communication to provide periodic updates to Congress, the whistleblower, the Secretary of Defense, and the relevant service; and requires the DOD Inspector General to prescribe uniform standards for (1) investigations of allegations of prohibited personnel actions, and (2) training for staffs of Inspectors General on the conduct of such investigations."], "subsections": []}, {"section_title": "Legislation to Address Perceived Gaps in Protections for IC Contractors", "paragraphs": ["Coverage of contractors in existing IC whistleblower protection legislation is inconsistent. The ICWPA of 1998, which provides for a process for reporting a whistleblower complaint, does cover contractors, as do protections in Section 405 of the IAA for FY2010, and Title VI of the IAA of 2014. However, PPD-19 and ICD-120 do not mention contractors. There have been three subsequent efforts in Congress to address the gap in perceived coverage, culminating on January 19, 2018, when Congress passed P.L. 115-118 , an amendment to the Foreign Intelligence Surveillance Act of 1978, which included Section 110 provisions to address perceived gaps in protections for IC contractors."], "subsections": [{"section_title": "S. 2002, 115th Congress, Ensuring Protections for IC Contractor Whistleblowers Act of 2017", "paragraphs": ["Senator McCaskill introduced S. 2002 on October 24, 2017. It was referred to the Senate Select Committee on Intelligence (SSCI) and no further action was taken. S. 2002 would have provided protections for IC employees\u2014to include applicants, former employees, contractors, personal services contractors, and subcontractors\u2014from being \"discharged, demoted, or otherwise discriminated against\" as a consequence of making a protected disclosure. It also included provisions for a process for making a complaint."], "subsections": []}, {"section_title": "S. 794, 114th Congress, A Bill to Extend Whistleblower Protections for Defense Contractor Employees of Contractors of the Elements of the IC", "paragraphs": ["On March 18, 2015, Senator McCaskill introduced S. 794 . It was referred to the SSCI and no further action was taken. The bill would have amended Section 2409 of Title 10 U.S. Code by extending protections for contractor employees on a contract with DOD or other federal agencies to contractor employees on a contract with an IC element who comply with an existing lawful process for making a whistleblower complaint, to include protection of classified information that is part of a court action. "], "subsections": []}, {"section_title": "Section 110 of P.L. 115-118, Whistleblower Protections for Contractors of the Intelligence Community", "paragraphs": ["On January 19, 2018, Congress passed P.L. 115-118 , an amendment to the Federal Intelligence Surveillance Act of 1978. Section 110 amended Section 1104 of the National Security Act of 1947 by providing protections for IC contractor whistleblowers. Section 110 amended existing whistleblower protections to enable IC contractors to make lawful disclosures to the head of the contracting agency (or an employee designated by the head of that agency for such purpose), or to the appropriate inspector general of the contracting agency, as well as to the DNI, IGIC, and the congressional intelligence committees (or members of the committees). These protections are similar to those for IC employees under Title VI of the IAA for FY2014 ( P.L. 113-126 ). That legislation, however, included no provisions for contractors. ", "Section 110 provides unambiguous protections for IC contractors making a lawful complaint against any retaliatory personnel action involving an appointment, promotion/demotion, disciplinary or corrective action, detail, transfer or reassignment, suspension, termination, reinstatement, performance evaluation, decisions concerning pay, benefits, awards, education, or training. The protections extend to lawful complaints involving, ", "a violation of any Federal law, rule or regulation (including with respect to evidence of another employee or contractor employee accessing or sharing classified information without authorization); or gross mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety. ", "These protections extend to contractors of the FBI\u2014including contractors of the IC element of FBI, the Intelligence Branch\u2014similar to the protections for IC employees and contractors under the Section 3234 of Title 50, U.S. Code, as amended. ", "Section 110 also amended Section 3341(j) of Title 50, U.S. Code, to include protections for IC contractors who make lawful whistleblower disclosures against retaliatory revocation of their security clearances . "], "subsections": []}]}, {"section_title": "Resources to Enhance Whistleblower Investigations", "paragraphs": ["H.Amdt. 894 , 113 th Congress, to the DOD Appropriations Act for Fiscal Year 2015 ( H.R. 4870 ), was agreed by a voice vote on June 18, 2014, redirecting $2 million dollars to fund the IC Whistleblower and Source Protection Directorate. This directorate exists within the OIGIC. The funds, which augmented the Intelligence Community Management Account, were to support the hiring of investigators and support staff to provide the IGIC greater ability to investigate fraud, waste, and abuse. Although it does not provide protections for whistleblowers per se, the measure addressed an underfunded capability in order to enable responsive follow-up on whistleblower complaints. "], "subsections": []}, {"section_title": "", "paragraphs": [], "subsections": []}]}}
{"id": "R45636", "title": "Congressional Participation in Litigation: Article III and Legislative Standing", "released_date": "2019-03-28T00:00:00", "summary": ["Houses, committees, and Members of Congress periodically seek to initiate or participate in litigation to, among other purposes, advance their legislative objectives, argue that the Executive is violating their legislative prerogatives, or defend core institutional interests. However, the constitutionally based doctrine of \"standing\"\u2014which requires a litigant seeking federal judicial relief to demonstrate (1) a concrete and particularized and actual or imminent injury-in-fact (2) that is traceable to the allegedly unlawful actions of the opposing party and (3) that is redressable by a favorable judicial decision\u2014may prevent legislators from pursuing litigation in federal court. The U.S. Supreme Court and the lower federal courts have issued several important opinions analyzing whether\u2014and under what circumstances\u2014a legislative entity has standing to seek relief.", "Although legislative standing jurisprudence defies easy characterization, it is possible to distill several principles from existing precedent. For example, whereas courts commonly allow individual legislators to assert injuries to their own personal interests, following the Supreme Court's seminal opinion in Raines v. Byrd, 521 U.S. 811 (1997), courts have generally (though not universally) been less willing to permit individual legislators to seek redress for injuries to a house of Congress as a whole, at least in the absence of explicit authorization to do so from the legislative body itself. The Supreme Court's case Coleman v. Miller, 307 U.S. 433 (1939), is generally understood as setting forth the lone exception, allowing individual legislators to sue when their vote has been \"nullified\" by some claimed illegal action. In addition, generally speaking, a congressional plaintiff cannot predicate a federal lawsuit solely on a complaint that the executive branch is misapplying or misinterpreting a statute, as litigants must demonstrate concrete and particularized injury to themselves.", "In addition to initiating litigation, Congress also occasionally seeks to intervene in preexisting litigation. In cases in which the executive branch has declined to defend a federal statute from a constitutional challenge, for example, congressional entities have attempted to intervene as defendants in support of the law. The Supreme Court, in INS v. Chadha, 462 U.S. 919 (1983) and United States v. Windsor, 570 U.S. 744 (2013), has allowed Congress to intervene to defend a law that the executive branch has declined to defend but still enforces. Nonetheless, neither case resolved whether significant exceptions to this rule exist, let alone explored what rules are in place when the President both declines to defend and enforce a federal law. Moreover, in cases that do not involve the executive branch's refusal to defend a federal statute, Congress's ability to intervene as a full party to the case may be more circumscribed.", "Even when Congress lacks standing to initiate or intervene in a federal lawsuit as a full-fledged party, Congress may still play a role in litigation by participating as an amicus curiae, or \"friend of the court.\" Courts frequently allow Members, houses, and committees of Congress to file amicus briefs in support of (or opposition to) particular parties or positions."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Since the founding, the federal courts have played a critical role in adjudicating legal disputes, including ones involving executive action. As the Supreme Court stated in Marbury v. Madison , \"where a specific duty is assigned by law . . . the individual who considers himself injured[] has a right to resort to the laws of his country for a remedy.\" Naturally, Congress and its Members have an interest in litigating in federal court, for example, to vindicate their institutional priorities, to argue that the Executive is violating their legislative prerogatives, or to advance their legislative policy interests. During the Obama Administration, for instance, legislative entities brought or joined litigation in federal court for a host of reasons, such as to challenge the Executive's decision to allegedly expend money without a congressional appropriation, to defend the Defense of Marriage Act from constitutional challenge in lieu of the Executive, and to challenge the Executive's decision to engage in military action in Libya. Likewise, during the Trump Administration, legislators have become involved in lawsuits that challenge the President's alleged unconstitutional acceptance of emoluments, suits demanding the production of documents from the Administration, and, in an amicus capacity, challenges to legality of the so-called travel ban. Congressional interest in litigation may increase in salience under the current divided government, as illustrated by the House of Representatives' resolution to authorize the House to participate in ongoing litigation in Texas involving the Affordable Care Act and a recent lawsuit brought by several Members of Congress challenging the President's appointment of an acting Attorney General. ", "However, whenever any party seeks to invoke the power of the federal courts, it must first show that its dispute belongs there. For nearly its entire history, the Supreme Court has emphasized that the role of courts is in \"decid[ing] on the rights of individuals.\" By contrast, \"[v]indicating the public interest (including the public interest in Government observance of the Constitution and laws) is the function of Congress and the Chief Executive.\" The federal courts apply a number of doctrines, known as justiciability doctrines, to ensure that they do not step beyond their bounds and decide issues more properly reserved for the other branches. Foremost among these doctrines is the requirement that a party seeking judicial relief from a federal court demonstrate \"standing.\"", "This report provides an overview of the standing doctrine as it applies to lawsuits involving legislators, committees, and houses of Congress. First, the report lays out the general rules of standing as they apply in every case in the federal courts and the main purpose behind the doctrine. One central purpose of the standing doctrine\u2014protecting the court's role in the constitutional balance of powers\u2014is a theme that underlies this report, as many of these cases involve courts deciding whether they have the power to adjudicate high-profile political disputes between the other two branches of the federal government. Next, the report considers the relatively few Supreme Court cases to discuss legislator standing, explaining the general principles that courts have drawn from those cases. The report then analyzes how lower courts have interpreted the limited Supreme Court case law on the issue, beginning with cases involving individual legislators, and following with cases brought by entire institutions, such as committees or houses of a legislature. The report then considers other issues relating to legislator participation in litigation, such as intervention under the Federal Rules of Civil Procedure or participation purely as an \"amicus curiae,\" or a \"friend of the court.\" The report concludes by identifying unresolved doctrinal questions and offering takeaways for prospective congressional litigants."], "subsections": []}, {"section_title": "Legal Background of Article III Standing", "paragraphs": ["Article III of the Constitution limits the exercise of the federal courts' judicial power to \"cases\" and \"controversies.\" The Supreme Court has interpreted this \"case or controversy\" language to impose various restrictions on the \"justiciability\" of disputes in the federal courts\u2014that is, constraints on the federal courts' power to adjudicate and resolve disagreements between parties. One aspect of justiciability requires a party seeking judicial relief from a federal court to have \"standing,\" such that the party has \"a personal stake in the outcome of the controversy as to warrant [the] invocation of federal-court jurisdiction and to justify exercise of the court's remedial powers on his behalf.\" Further, a litigant must demonstrate standing for each claim he seeks to press and each form of relief that he seeks to obtain.", "The Supreme Court articulated a three-part test for standing in its seminal 1992 decision Lujan v. Defenders of Wildlife . To establish standing under that test, a party must show that it has a genuine stake in the relief sought because it has personally suffered (or will suffer) (1) a concrete and particularized and actual or imminent injury-in-fact (2) that is traceable to the allegedly unlawful actions of the opposing party and (3)\u00a0that is redressable by a favorable judicial decision. While each of these requirements is complex and can blend into each other, courts generally regard the injury-in-fact requirement to be the \"central focus\" of the inquiry. ", "A party that seeks to demonstrate standing must show that his injury is \"concrete\"\u2014meaning an injury that is \"real\" and not \"abstract.\" Nonetheless, an injury can be intangible in nature, as the deprivation of a constitutional right, like freedom of speech or the free exercise of one's religion, constitutes an injury-in-fact absent any tangible economic loss. While it may sometimes be difficult to draw a distinction between an \"intangible\" injury and an \"abstract\" injury, the Court has provided some guidance. For example, the Court has held that an alleged injury sufficient for standing may be one similar to those that have \"traditionally been regarded as providing a basis for a lawsuit in English or American courts,\" such as the interest of a qui tam relator in the outcome of his suit. The Court has also stated that Congress can build on common law conceptions of injury, as Congress is \"well positioned\" to \"identify intangible harms that meet minimum Article III requirements\" and establish new causes of action to remedy such harms. Finally, the Court has explicitly considered and rejected several types of abstract injuries in previous cases. For instance, in Valley Forge Christian College v. Americans United for Separation of Church and State , the Supreme Court held that a public interest organization lacked standing to challenge the transfer of federal land to a religiously affiliated school, as the only injuries identified by the plaintiffs were the \"psychological consequence[s] presumably produced by observation of conduct with which one disagrees.\" A claim based only on this sort of psychological discomfort will generally not support an injury-in-fact.", "Along with the requirement of concreteness, a plaintiff's alleged injury must be \"particularized.\" This requirement focuses on whether the alleged injury affects the plaintiff in a \"personal and individual way.\" Significantly, the need for particularization bars plaintiffs from seeking redress for so-called \"generalized grievances.\" Under this doctrine, a plaintiff \"claiming only harm to his and every citizen's interest in proper application of the Constitution and laws\" does not state a sufficiently particularized injury. This principle does not mean, however, that injuries suffered by many are not justiciable. Rather, particularization only requires plaintiffs to connect to the injury they allege in some particular way, even if that injury is widely shared. For instance, in Federal Election Commission v. Akins , the Supreme Court recognized that individual voters had suffered a justiciable injury based on the Federal Election Commission's allegedly unlawful decision to not obtain and disclose certain information about a political organization. The Court concluded that even though that injury was \"widely shared,\" the deprivation of a statutory right granting access to information \"directly related to voting\" was sufficiently \"specific\" to allow Congress to authorize individuals to vindicate that right.", "These limitations on the courts, as they are rooted in the Constitution, are not easily circumvented. For example, subject to \"limited exceptions,\" a litigant must assert \"his or her own legal rights and interests, and cannot rest a claim to relief on the legal rights or interests of third parties.\" To illustrate, in Hollingsworth v. Perry , the Court held that the proponents of a California voter initiative lacked standing to defend that initiative from constitutional challenge when the California Attorney General declined to do so. In that case, the Court agreed that a \"political corporate body\" can designate an agent to proceed in court on its behalf, but held that the proponents could not simply assert to be acting in such a capacity. Rather, some evidence of actual agency, such as the principal's right to control the agent, must be present. Because this control was lacking in Hollingsworth \u2014the State of California had no power to control or authority over the proponents of the initiative\u2014the proponents could not claim to be proceeding on behalf of the State, and had to rely upon their own interests, which were not sufficiently concrete or particularized to amount to an injury-in-fact. ", "The requirement of concrete and particular injury is essential in every case, but it is especially significant in cases involving the constitutionality of government action because of the important role that the standing doctrine plays in preserving the separation of powers. As one prominent treatise explains, difficult standing decisions often depend on \"the importance of having the issues decided by the courts\" versus \"the importance of leaving the issues for resolution by other means.\" In other words, \"[s]eparation of powers concerns\" often \"control the seemingly precise concept of injury.\" Accordingly, the Supreme Court has long recognized that the separation of powers is the driving force behind the standing doctrine. As the Court explained in Lujan , \"the Constitution's central mechanism of separation-of-powers depends largely upon common understanding of what activities are appropriate to legislatures, to executives, and to courts.\" The doctrine of standing, the Court explained, serves to identify those disputes that are \"appropriately resolved in the judicial process.\" Thus, while the formal standing doctrine has some requirements that express \"merely prudential considerations,\" its \"core\" is in ensuring that the courts do not stray beyond their essential role. ", "The doctrine of standing, therefore, forces the courts to police their own jurisdiction, preventing individuals from enlisting the courts in fights that should be resolved through the political process. This conception of standing helps explain why the Court has said that the standing inquiry is \"especially rigorous\" in cases involving the constitutionality of government action. In such cases, the courts are being asked to participate in a dispute that may particularly involve the constitutional balance of power, placing the court's role in resolving that dispute under significant scrutiny."], "subsections": []}, {"section_title": "Legislative Standing at the Supreme Court", "paragraphs": ["Separation of powers is logically the central focus when the plaintiff is a branch of government, such as a legislature. Although the Supreme Court has decided relatively few cases involving legislative standing, in those cases it articulated several principles that apply specifically when the plaintiff is a legislative entity. ", "The first significant Supreme Court case to involve legislators filing a lawsuit challenging a governmental action was the 1939 case Coleman v. Miller . Coleman involved the Kansas legislature's then-recent approval of the proposed Child Labor Amendment to the U.S. Constitution, which Congress had submitted to the states for ratification 15 years prior. A bare majority of the Kansas legislature voted to ratify the amendment, with the Kansas lieutenant governor casting the tie-breaking vote in favor of ratification in the Kansas Senate. Seeking to undo this ratification, the plaintiffs, individual members of the Kansas legislature who had voted against the amendment, challenged the lieutenant governor's right to cast his tie-breaking vote. The plaintiffs argued that the lieutenant governor was not a part of the \"legislature\" and so his vote could not be counted to ratify the amendment under Article V of the Constitution. The Coleman plaintiffs also argued that the passage of time had sapped the amendment of its vitality. They sued to compel the Kansas secretary of state to annul the ratification.", "The Supreme Court splintered and issued three opinions, none of which obtained five votes. However, a majority of the Court concluded that the plaintiff legislators had standing. Chief Justice Charles Evans Hughes, writing the \"opinion of the Court\" for himself and two other Justices, concluded that the petitioners had an \"adequate interest to invoke [the Court's] jurisdiction\" because the senators' votes \"would have been sufficient to defeat ratification\" if they had been right that the lieutenant governor's vote was invalid. As a result, their votes had been \"held for naught\" and \"overridden,\" which ran contrary to the senators' \"plain, direct and adequate interest in maintaining the effectiveness of their votes.\" Justices Butler and McReynolds dissented from the majority's disposition of the case on the merits, but implicitly agreed with its conclusion that the plaintiffs had standing. Justice Frankfurter, writing for four Justices, would have held that the legislators lacked standing. He argued that so-called \"intra-parliamentary disputes\" should be left to parliaments, and that the injuries suffered here \"pertain[ed] to legislators not as individuals but as political representatives executing the legislative process.\" If these interests were recognized, Frankfurter feared that the courts would end up \"sit[ting] in judgment on the manifold disputes engendered by procedures for voting in legislative assemblies.\" Despite these arguments, Justice Frankfurter's view did not control, and Coleman is recognized as the first case in which the Supreme Court acknowledged that legislators' interest in their votes may constitute an injury that could be vindicated in federal court.", "The Court returned to the issue of legislator standing 30 years later in Powell v. McCormack . In that case, the House Special Subcommittee on Contracts concluded that Representative Adam Clayton Powell Jr., the chairman of the Committee on Education and Labor, had deceived House authorities as to travel expenses. After voters nonetheless reelected Representative Powell to the House of Representatives in 1966, the House adopted a resolution excluding him from taking his seat, and the House Sergeant at Arms refused to pay Representative Powell his salary. Representative Powell sued the Speaker of the House in his official capacity, seeking a declaratory judgment that his exclusion was unconstitutional, an injunction restraining respondents from excluding him from the House, and an injunction commanding the Sergeant at Arms to pay Representative Powell his salary. After the Supreme Court elected to take review of the case, the Congress that had excluded Powell terminated, and Representative Powell was seated in the House in January 1969.", "The Court concluded that Representative Powell's case was justiciable. In particular, the Court looked to see if Representative Powell had a \"legally cognizable interest\" in the outcome of the case. The Court concluded that Representative Powell's claim for back salary was itself sufficient to \"supply the constitutional requirement of a case or controversy.\" Powell thus stands for the proposition that legislators\u2014no less than other individuals\u2014have a personal pecuniary interest in their salary (and other personal prerogatives of office) that can amount to an injury to support standing when a defendant threatens that interest.", "The next case concerning legislative standing to come before the Court was 1997's Raines v. Byrd . Raines concerned a constitutional challenge to the Line Item Veto Act of 1996, which purported to authorize the President to \"cancel\" certain spending and tax benefit measures after they were signed into law. The statute provided that \"[a]ny Member of Congress or any individual adversely affected by [the Line Item Veto Act] may bring an action . . . for declaratory judgment and injunctive relief on the ground that any provision of this part violates the Constitution.\" Accordingly, the day after the statute was signed into law, four Senators and two Members of the House, including Senator Robert Byrd, all of whom had voted against the act, sued under this provision alleging that the act was unconstitutional. Senator Byrd alleged that the act injured him in his official capacity in three ways: (1) by \"alter[ing] the legal and practical effect of all votes\" cast in the future on bills that would be subject to the \"line item\" veto; (2) by divesting him of his constitutional role in the repeal of legislation; and (3) by altering the constitutional balance of powers between the legislative and executive branch.", "The Supreme Court held that Senator Byrd and the other legislators lacked standing to bring their claims. Chief Justice Rehnquist's opinion for the Court emphasized that the standing inquiry turns, in part, on \"whether the plaintiff is the proper party to bring this suit\" and the requirement that the alleged injury be \"particularized.\" The Court's opinion also restated the standing doctrine's important role in \"keeping the Judiciary's power within its proper constitutional sphere\" and the need to \"carefully inquire\" as to whether the plaintiffs had a sufficiently personal, particular, and concrete interest so as to justify a court's involvement. Chief Justice Rehnquist observed that, in contrast to the plaintiff in Powell , Senator Byrd was not asserting that he was deprived of anything to which he was personally entitled, such as a salary. Instead, Senator Byrd was asserting that he had lost power as a result of the statute because it altered the balance of power between Congress and the President. Thus, the individual legislators were, in the majority's view, impermissibly attempting to assert an \"institutional injury\" that they shared in common with the entire Congress. Such injuries, in the form of the dilution of the power of the legislative body, could not give rise to standing because they were neither concrete\u2014they were \"wholly abstract\"\u2014nor were they particularized\u2014they were \"widely dispersed.\" ", "The Court acknowledged that, in Coleman , it had upheld standing for legislators claiming a similar institutional injury\u2014an interest in the effectiveness of their votes. However, unlike the plaintiffs in Coleman , Senator Byrd was not complaining that some illegal action had prevented his vote from counting, causing the bill to be passed in spite of his vote. Rather, Senator Byrd had voted, and he had \"simply lost that vote.\" In other words, as the Chief Justice explained, individual legislators could validly assert the institutional injury in Coleman only because the Kansas senators' votes would have actually been enough to defeat the measure at issue, but were \"completely nullified\" by the allegedly illegal action. Senator Byrd, in contrast, alleged \"wholly abstract and widely dispersed\" diminution of his future voting power. The Court went on to explain that Members of Congress had an alternative remedy to their judicial challenge\u2014they could repeal the Line Item Veto Act. Further, the Court noted that the statute was not immune from other judicial challenges\u2014an individual with a cognizable injury could still bring suit. Raines thus greatly limited the ability of individual legislators to sue on behalf of their institutions. Nevertheless, the 1997 decision reaffirmed Coleman , thereby not completely closing off the possibility that an individual legislator could assert an institutional injury.", "In Raines , the Court found it \"of some importance\" that the various houses of Congress did not authorize Byrd and the other plaintiffs to bring the suit. Although Congress had created a right to challenge the statute's constitutionality in the Line Item Veto Act itself, the plaintiffs had brought their suit only on their own behalf, and the plaintiffs' respective houses of Congress as a whole had opposed it on the merits. This factor would turn out to be decisive in the next legislative standing case to come before the Court, Arizona State Legislature v. Arizona Independent Redistricting Commission . In that case, the Arizona state legislature\u2014as a whole\u2014sued the Arizona Redistricting Commission (Commission), an independent commission vested by popular initiative with the authority to draw redistricting maps for congressional districts. The Arizona legislature sought to challenge the map adopted by the Commission for the 2012 elections as unconstitutional. The Arizona legislature argued that, under the Elections Clause of the Constitution, the \"Legislature\" of a state had to have \"primary responsibility\" to set the manner of elections, and the Commission did not qualify as a legislature.", "The Court concluded that, in contrast with the individual Member plaintiffs in Raines , the Arizona legislature had standing. The Court found that the key difference between the Arizona legislature and the plaintiffs in Raines was that the former was \"an institutional plaintiff asserting an institutional injury [that had] commenced this action after authorizing votes in both of its chambers.\" The problem with the individual Members asserting institutional injury in Raines , as the Arizona State Legislature Court saw it, was that the injury was \"widely dispersed,\" and no plaintiff in the 1997 case could \"tenably claim a personal stake in the suit.\" In contrast with Raines , the Court concluded, Arizona State Legislature was closer to the Coleman facts, in that the Commission's authority \"completely nullif[ied]\" any vote by the legislature purporting to adopt a redistricting plan\u2014and that injury was adequately particularized to the plaintiff that was bringing the suit. Importantly, however, the Court stated in a footnote that the standing inquiry might have been different had the suit involved Congress mounting a legal challenge to the President, which would have raised \"separation-of-powers concerns absent here.\"", "A few key principles can be drawn from this line of Supreme Court cases. With respect to cases brought by individual legislators, Raines drew a fundamental distinction between so-called \"institutional injury\" and the sort of personal injury that was at issue with the plaintiff's lost salary in Powell . As the Court would go on to explain in Arizona State Legislature , an \"institutional injury\" is an injury that \"scarcely zeroe[s] in on any individual member,\" but rather \"impact[s] all Members of Congress and both Houses . . . equally.\" The Arizona State Legislature court, interpreting Raines , explained that individual legislators generally cannot assert institutional injuries: \"[h]aving failed to prevail in their own Houses, the suitors [in Raines ] could not repair to the Judiciary to complain.\" However, Raines also determined that there was an exception to this general rule based on the Court's holding in Coleman v. Miller , \"[t]he one case in which [the Court] upheld standing for legislators . . . claiming an institutional injury.\" The Court justified this exception because the plaintiffs in Coleman , if they had been correct on the merits of their claim, would have been in a situation where \"their votes not to ratify the amendment were deprived of all validity.\" The challenge, then, for any individual legislator asserting an institutional injury is to show that the asserted injury is analogous to the \"vote nullification\" that took place in Coleman . These principles will be discussed in the next section."], "subsections": []}, {"section_title": "Individual Legislators and Standing in the Lower Courts", "paragraphs": [], "subsections": [{"section_title": "Institutional Injury", "paragraphs": ["Much of the lower court case law on legislative standing has focused on when an individual can assert an institutional injury akin to the injury asserted by the plaintiffs in Coleman . The courts inside and outside the D.C. Circuit have taken slightly different approaches to analyzing this question."], "subsections": [{"section_title": "The District of Columbia Circuit", "paragraphs": ["Because Members of Congress serve in the federal government in Washington, DC, and because the District is also the site of executive branch actions that could be the subject of a congressional lawsuit, such cases are often initiated in D.C. federal court. As a result, the federal appellate body in DC, the D.C. Circuit\u2014often referred to as the second-most important court in the country \u2014has a significant influence over the case law concerning congressional standing. ", "In a pair of cases following Raines , the D.C. Circuit considered when individual Member plaintiffs can assert institutional injuries: the 1999 case Chenoweth v. Clinton , and the 2000 case Campbell v. Clinton . In Chenoweth , three Members of the House sued to enjoin the American Heritage Rivers Initiative (AHRI), a program promulgated by executive order that required certain federal agencies to support local efforts to preserve certain historically significant rivers and riverside communities. The Member plaintiffs argued that the AHRI violated the Constitution by depriving them of their constitutional role in the passage of legislation by creating the AHRI via executive order. The Members argued that their injury was more severe than the injury at stake in Raines because the President's action had \"denied Members of Congress any opportunity to vote for or against the AHRI.\" The D.C. Circuit disagreed, concluding instead that the injury asserted by the plaintiffs in Chenoweth was fundamentally the same as that asserted in Raines \u2014that their injury was an \"alter[ation] [in] the constitutional balance of powers between the Legislative and Executive Branches.\" Further, the court observed that here, as in Raines , it was \"uncontested that the Congress could terminate the AHRI were a sufficient number in each House so inclined,\" meaning that, as in Raines , Congress had a legislative remedy. The Chenoweth court acknowledged that, following Coleman , it might be a different case if the Representatives alleged that the necessary majorities in Congress had voted to block the AHRI. In such a case, legislators could argue that their votes had been \"effectively nullified,\" but because plaintiffs in Chenoweth made no such allegations, the court dismissed the case for want of standing.", "The second of the influential post- Raines D.C. Circuit decisions is Campbell v. Clinton , decided the year after Chenoweth . That case challenged the legality of the United States' involvement in NATO air and cruise missile attacks in Yugoslavia. Prior to the lawsuit, Congress had voted on four resolutions related to the conflict, including an \"authorization\" of the air strikes that failed by a tie vote, 213-213, and a declaration of war that failed 427-2. Congress also voted against requiring the President to immediately end U.S. participation in the conflict and voted to fund the involvement. After these votes, the plaintiffs, 31 Members of Congress who were opposed to U.S. military involvement, filed suit, alleging that the President's use of American forces violated the Constitution's War Powers Clause and the War Powers Resolution. Representative Tom Campbell and the other Member plaintiffs argued that the Executive's action had \"completely nullified\" the tie vote against the airstrikes and the vote against the declaration of war, equating themselves to the Kansas senators in Coleman . ", "The D.C. Circuit disagreed, concluding that the reason the Coleman plaintiffs' votes had been \"nullified\" was because of the unique context of a vote against a constitutional amendment, which left them without any alternative remedy. The appellate court argued that, in Coleman , the Kansas senators were in a unique position because they were \"powerless\" to rescind the ratification by legislative action\u2014according to the court, it was \"not at all clear\" whether the ratification could have been rescinded once it was deemed ratified. The court saw Raines as having attached critical importance to this absence of legislative remedy; this fact is what \"nullified\" the Kansas senators' votes and supplied the necessary concrete injury. In contrast, the Campbell plaintiffs had several legislative remedies, including the power to withdraw appropriations and impeachment. As a result, the court concluded that their vote had not been \"nullified\" in the same manner as the Coleman plaintiffs. Rather, the court viewed the Campbell plaintiffs' argument to essentially be that the President acted illegally in excess of his constitutional authority and in violation of a statute. As a result, the circuit court determined that the case was indistinguishable from Raines , and the plaintiffs had not suffered a concrete and particularized injury.", "Following these precedents, the trial courts in the D.C. Circuit have generally been hesitant to find concrete and particularized injury in cases involving individual legislators asserting institutional injuries, especially where the legislature as a whole possessed other potential avenues for relief through the legislative process. For example, in 2002, the court concluded that 32 Members of the House of Representatives lacked standing to challenge President George W. Bush's unilateral withdrawal from 1972's Anti-Ballistic Missile Treaty. As in Campbell , the court emphasized the \"widely dispersed\" nature of the injury and the \"extensive self-help\" remedies available to Congress that could be used to remedy the President's allegedly illegal actions, such as the appropriations power, or, as a last resort, impeachment. The court concluded that the availability of these alternate remedies, combined with the fact that Congress as a whole had not authorized these individual Members to represent its interests in federal litigation, demonstrated that the plaintiffs could not assert the institutional injury alleged. Similarly, in a 2011 case, a D.C. district court determined that 10 Members of the House lacked standing to challenge President Obama's alleged violation of the War Powers Clause of the Constitution and the War Powers Resolution. In that case, the plaintiffs alleged that the President had pursued military action in Libya without seeking any approval from Congress and had spent funds on an \"unauthorized war.\" The court, again following Campbell , emphasized that \"nullification necessitates the absence of a legislative remedy\" and found that the plaintiffs had \"voted on essentially what the plaintiffs now ask this Court to award .\u00a0. . . Thus, the plaintiffs' votes were given full effect. They simply lost that vote.\"", "The one post- Raines ruling from a D.C. district court to reach a contrary conclusion and find legislative standing was the 2018 case Blumenthal v. Trump . The plaintiffs in Blumenthal \u2014approximately 201 minority Members of the Senate and House\u2014alleged that President Donald Trump, by receiving benefits from his business entities' dealings with foreign governments, had violated the Foreign Emoluments Clause of the Constitution, which prohibits persons holding certain offices from receiving any \"present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.\" Plaintiffs sought declaratory as well as injunctive relief preventing the President from accepting any further emoluments without the consent of Congress. The plaintiffs argued that they had suffered injury because the President's conduct, in allegedly accepting emoluments and failing to submit those emoluments to Congress, had nullified their votes by \"den[ying] them a voting opportunity to which the Constitution entitles them.\" ", "The district court reasoned that, although this injury was an institutional injury dispersed among all Members of Congress, it nonetheless was comparable to the injury upheld in Coleman because the plaintiffs in Blumenthal , like the plaintiffs in Coleman , were not complaining about dilution of legislative power, but rather about the complete nullification of their votes. This distinction turned decisively on the plaintiffs' lack of a legislative remedy. The Blumenthal court contrasted the case with Raines and Chenoweth , in which the plaintiffs \"either lost the vote in Congress or did not have the political influence to bring their bill to a vote.\" By contrast, in the view of the district court, Senator Blumenthal and the other Member plaintiffs lacked any legislative means to remedy their complaints because the President never provided them with the opportunity to approve the emoluments in the first place. Although the defendants suggested several potential nonjudicial remedies, such as a vote by Congress rejecting specific supposed emoluments, or a bill defining emoluments and prohibiting the receipt of them, the court went on to reject all of these proposed possible legislative remedies as inadequate, asserting that none would require the President to submit his emoluments for congressional consent for prior approval or even force him to provide information about future emoluments to Congress. Further, the court determined that appropriations remedies that the D.C. Circuit saw as adequate in Campbell and Chenoweth would not work in this case, as there are no federal appropriations associated with the President's alleged receipt of emoluments. Finally, the court concluded that impeachment was too \"extreme\" to be considered an adequate remedy. "], "subsections": []}, {"section_title": "Institutional Injury to Individual Legislators Outside the D.C. Circuit", "paragraphs": ["Whereas the D.C. Circuit and the U.S. District Court for the District of Columbia have generally concluded that whether individual legislators possess standing largely turns on the availability of alternative legislative remedies, other circuits considering the question have not arrived at the same consensus. These courts have generally viewed the Coleman exception even more narrowly than the D.C. Circuit, further limiting the availability of legislative standing.", "In Baird v. Norton , for example, the Sixth Circuit ruled that Members of the Michigan state legislature lacked standing to challenge the procedures followed by their legislature in approving certain gaming compacts between the State of Michigan and Indian tribes. The plaintiffs alleged that the legislature had unlawfully approved the gaming compacts without complying with certain procedural safeguards required by the Michigan Constitution. First, the court held that the procedural harm inflicted by this neglect of constitutional procedures was only a \"generalized grievance shared by all Michigan residents\" and could not give rise to standing. Second, in response to the argument that the use of these procedures had \"nullified\" the plaintiffs' votes in the legislature, the court, analyzing Raines and Coleman , concluded that \"[f]or legislators to have standing as legislators, then, they must possess votes sufficient to have either defeated or approved the measure at issue.\" As this court read Coleman , standing required that the lawsuit be joined by sufficient members of their respective houses to defeat the legislation in order to show that actual nullification occurred. Because the legislators in Baird could not make that showing, the court concluded that they lacked standing without examining the availability of alternative legislative remedies.", "Reading Raines even more narrowly, the Tenth Circuit has concluded that individual legislators can never bring suit to assert institutional injuries. In Kerr v. Hickenlooper , on remand to the Tenth Circuit after the Supreme Court's decision in Arizona State Legislature , the court considered whether then-current Colorado state legislators could have standing to challenge an amendment to the Colorado Constitution that required voter approval in advance for new taxes. The Tenth Circuit had previously concluded that the legislators had standing because this amendment \"deprive[d] them of their ability to perform the legislative core functions of taxation and appropriation,\" rendering their votes \"advisory.\" On remand, however, the court changed its view, and read Raines and Arizona State Legislature together to conclude that \"individual legislators may not support standing by alleging only an institutional injury,\" which only institutional plaintiffs like the Arizona state legislature could assert. Arizona State Legislature , the court determined, had changed the law such that the nature of the injury\u2014whether it was personal or institutional\u2014was the determinative factor. The Tenth Circuit concluded that Coleman , which Raines had characterized as an institutional injury case, was in fact a case involving a \"personal\" injury to the senators whose votes were allegedly nullified. This injury was not, in the Tenth Circuit's view, \"institutional\" as the Supreme Court used that term in Arizona State Legislature because institutional injuries necessarily affect all members of a legislature in equal measure, and in Coleman , the only injured legislators were those who had their votes nullified. As a result, the court concluded that the plaintiffs in Kerr had asserted only institutional injuries to the power of the legislature, and they accordingly lacked standing.", "The views on institutional injuries announced in Baird and Kerr appear to contrast with the somewhat more receptive standard that has developed in the D.C. Circuit. In both Baird and Kerr , the court interpreted the standing upheld in Coleman , the so-called vote nullification injury, as being about the deprivation inflicted on individual legislators by virtue of their vote being defeated by the allegedly unlawful action. In contrast, after Campbell , the D.C. Circuit has focused on the lack of a legislative remedy and whether the legislature as a whole continues to enjoy \"ample legislative power\" to remedy the alleged wrong."], "subsections": []}]}, {"section_title": "Personal Injury", "paragraphs": ["As the Supreme Court explained in R aines , there may be fewer obstacles for legislators to sue for \"something to which they are personally\" entitled, such as the loss of salary claimed by Representative Powell in Powell v. McCormack . This section examines how lower courts have distinguished between \"personal\" and \"institutional\" injuries and the other justiciability considerations that have been applied to injuries that were undoubtedly personal."], "subsections": [{"section_title": "Distinguishing Personal from Institutional Injuries", "paragraphs": ["In Raines and Arizona State Legislature , the alleged injuries were clearly institutional because the alleged wrongful conduct represented diminution in the power of the legislature as a whole, affecting \"all Members of Congress and both Houses . . . equally.\" However, it is possible for an injury to have apparently unequal effects within the legislature but nonetheless be \"institutional.\" Best illustrating this principle is a pair of cases from different districts considering claims brought under 5 U.S.C. \u00a7 2954\u2014which provides that executive agencies, on request of the House Committee on Oversight and Reform or the Senate Homeland Security and Governmental Affairs Committee, or \"any seven members thereof,\" \"shall submit any information requested of it relating to any matter within the jurisdiction of the committee.\" Known as the \"Seven-Member Rule,\" this statute authorizes Members of the minority party to obtain information from the Administration, but does not provide explicitly for judicial enforcement. ", "In Waxman v. Thompson , a 2006 case out of the Central District of California, 18 Members of the House sued under Section 2954 after they had received an allegedly incomplete response from the Executive to their demand for documents relating to the anticipated cost of the Medicare Prescription Drug and Modernization Act of 2003. The court determined that the plaintiffs had not shown that their vote had been nullified within the meaning of Coleman \u2014plaintiffs had alleged only that they \"ha[d] been required to vote and legislate without full access to information.\" The plaintiffs, however, argued that their injury was personal, not institutional, because they had a \"distinct legal entitlement not shared by all Members of Congress.\" The court disagreed. Rather, the court explained, the right the plaintiffs asserted \"runs with their congressional and committee seats.\" Their injury, in the view of the court, was not an injury to themselves personally, but an injury to \"Congress, on whose behalf they acted,\" and it was the same type of institutional injury that the Supreme Court deemed insufficient to confer standing in Raines . ", "This same issue arose again in 2018, in the case Cummings v. Murphy in the U.S. District Court for the District of Columbia. As in Waxman , the Cummings plaintiffs were minority Members of the House Oversight Committee who sought documents from an executive agency under Section 2954. The court observed that the \"Plaintiffs tie[d] their injury directly to their constitutional duties as legislators, claiming their alleged harm to be impedance of the oversight and legislative responsibilities that have been delegated to them by Congress\" and that the injury alleged ran \"in a sense with the Plaintiff's seat.\" Despite these facts, the plaintiffs argued, as in Waxman , that because their injury was not shared by all Members of Congress equally, their injury was not institutional in nature. The court disagreed. Relying on Raines , the court concluded that the plaintiffs' injury was institutional because it was \"rooted in a right granted to them as Members of Congress.\" Further, because any violation of the \"Seven-Member Rule\" was an institutional injury, the court determined that, although the Member plaintiffs had a \"stronger case\" for standing than the plaintiffs had in Raines , historical practice, a lack of congressional authorization, and the availability of alternative remedies demonstrated that the injury was too \"wholly abstract\" and \"widely dispersed\" to confer standing on an individual Member.", "These cases make clear that the difference between a \"personal\" and an \"institutional injury\" does not hinge on the issue of particularization. Rather, the difference is the source of the right that has been violated. The Seven-Member Rule cases demonstrate that, even where an injury has a particular effect on certain Members, it can nonetheless be insufficiently \"concrete\" under Raines if the Member's injury does not deprive him of something to which he is personally entitled. In other words, where the right alleged to have been violated is tied to a right granted to a plaintiff \"as [a] Member[] of Congress,\" all of Congress is harmed equally, as a diminution of that right affects the institution as a whole, even if it is only a single Member who is asserting that right at a given moment. "], "subsections": []}, {"section_title": "Personal Injury Must Comply with Traditional Standing Requirements", "paragraphs": ["Even if a legislator alleges an injury that seems to be genuinely \"personal\" rather than \"institutional,\" that injury must nonetheless meet the typical standing requirements of particularization and concreteness. Further, that injury must be likely and imminent as opposed to merely speculative, causally connected to the challenged action, and redressable by the court. A number of cases illustrate how an alleged injury to legislators can fail to meet these requirements.", "For example, post- Raines , federal courts of appeals have generally concluded that a mere possibility of electoral or reputational harm to a legislator is too speculative to support Article III standing. In Schaffer v. Clinton , the Tenth Circuit dismissed a claim brought by Representative Bob Schaffer, a Member of Congress who alleged that the cost of living adjustment (COLA) in the Ethics Reform Act of 1989 violated the Twenty-seventh Amendment to the Constitution. Representative Schaffer, who received an increase in pay based on the COLAs, argued that they were \"damaging to his political position and his credibility among his constituency\" because the COLAs involved paying him with monies allegedly \"appropriated unconstitutionally.\" This argument relied heavily on a pre- Raines D.C. Circuit case, Boehner v. Anderson . In Boehner , the D.C. Circuit had concluded that Representative John Boehner had standing to challenge the COLAs based on his claim that it undermined his \"political position.\" However, as the Tenth Circuit observed, this case predated Raines , and its analysis was \"cursory.\" Rejecting Boehner , the Tenth Circuit concluded that Representative Schaffer's asserted injury was supported by no concrete evidence of reputational injury and was much like the injury rejected in Raines \u2014an abstract claim that applied to every Member of Congress. As a result, the injury alleged was insufficiently concrete and particularized to give rise to standing.", "Another pair of cases illustrates how alleged injuries to legislators can fail to meet standing requirements on causation and redressability, even if the injuries alleged are seemingly sufficiently concrete and particular. The first of these cases is a 2018 case from the Middle District of Pennsylvania, Corman v. Torres . Corman involved a challenge brought by several parties to the Pennsylvania Supreme Court's 2018 decision to strike the 2011 redistricting map and issue its own replacement map. Among the challengers were eight Republican Members of Pennsylvania's delegation to the U.S. House of Representatives, who challenged the Pennsylvania Supreme Court's decision as a violation of the Elections Clause of the Constitution. The Members argued that they were injured by the alterations to their districts, thereby reducing their incumbency advantage, and by wasting time, energy, and resources expended in their former districts. The court set aside the question of whether these injuries were sufficiently concrete and particular, but nonetheless observed that no case supported \"the proposition that an elected representative has a legally cognizable interest in the composition of his or her electoral district.\" Irrespective of this question, the court concluded that the Members' claim failed on the causation prong of standing. Because the plaintiff Members conceded that the state supreme court had the authority to order the redrawing of the redistricting map, they could not trace their injuries to the substantive decisions that actually led to the court-drawn map: ", "Even if the Pennsylvania Supreme Court had simply ordered that a new redistricting map be drawn, but had given the General Assembly free substantive rein . . . to accomplish that objective, the . . . injury would persist. In that circumstance, the court would not have committed any of the improprieties alleged in the verified complaint, but district boundaries would still have changed. ", "The court concluded that the plaintiffs could not bridge this \"gap\" in the causal chain and dismissed the Members' claims.", "Another case in which a legislator's purported claims could not overcome the second two elements of the standing inquiry is Rangel v. Boehner , a 2013 case out of the District Court for the District of Columbia. R angel arose out of disciplinary proceedings and a vote of censure against Representative Charles Rangel. Representative Rangel alleged that certain improprieties had colored the proceedings of the Ethics Committee that had investigated him. He sued officials of the House, but not the House itself, seeking declaratory relief and an injunction requiring the defendants to \"remove the recording of censure.\" Representative Rangel claimed four separate injuries that he argued gave rise to standing: damage to his reputation, the loss of his status on the House Ways and Means Committee, \"political injury,\" and a violation of his due process rights. On these alleged injuries, the court generally concluded that Representative Rangel's claims failed on grounds of lack of causation and redressability. For example, although the court had no doubt that alleged injury to Representative Rangel's reputation was sufficiently concrete and particularized, the plaintiff's failure to sue the House itself doomed his ability to show causation. After all, the actions of the individual defendant House Members did not cause his injury\u2014it was, as the court noted, the House that censured him, not the individual Member defendants. Similarly, Representative Rangel was unable to demonstrate redressability because the court determined that it had no authority to order the House to rescind his censure, as authority over the House's Journal was constitutionally vested in the House itself. As a consequence, a legislator plaintiff having a concrete and particularized injury is not alone sufficient to establish Article III standing, especially when the plaintiff seeks to involve the court in the internal affairs of the other branches of government."], "subsections": []}]}]}, {"section_title": "Institutional Standing", "paragraphs": ["The Supreme Court's decision in Arizona State Legislature v. Arizona Independent Redistricting Commission reinforces that an institutional plaintiff, like the Arizona state legislature, will typically have standing to assert an \"institutional injury.\" In that case, discussed above, the Court determined that the Arizona state legislature had standing based on the Redistricting Commission's usurpation of its \"primary responsibility\" for redistricting under the Constitution's Elections Clause. Although the Court concluded that the legislature did not, in fact, have the exclusive authority it alleged, the Court nonetheless determined that this merits determination did not undercut the legislature's claim of injury for the purposes of justiciability. This analysis indicates that an institution, such as a legislature as a whole, may potentially assert an institutional injury and obtain standing in federal court. The Court left open, however, the possibility that separation-of-powers considerations could lead to a different result if the case instead involved Congress suing the President. ", "In addition to the separation-of-powers concerns that might arise, Arizona State Legislature raises questions regarding who constitutes an institutional plaintiff and which institutional injuries are sufficiently concrete and particularized to give rise to standing. These questions are the focus of the following sections."], "subsections": [{"section_title": "The Significance of Explicit Congressional Authorization", "paragraphs": ["Courts have routinely concluded that congressional plaintiffs who obtain authorization to sue before initiating litigation are significantly more likely to have standing. As one court has explained, the presence of authorization is the \"key factor\" when determining whether a congressional plaintiff possesses standing to vindicate an institutional injury on behalf of the authorizing institution. When a legislative plaintiff possesses authorization to pursue litigation from its respective institution, it decreases the likelihood that the plaintiff is impermissibly attempting to assert the rights of a third party instead of proceeding on the institution's behalf.", "Although the Arizona State Legislature Court deemed it important that the legislative plaintiffs commenced the lawsuit after \"authorizing votes in both of its chambers,\" that does not mean that a congressional plaintiff must always obtain the imprimatur of both the Senate and the House of Representatives in order to bring suit. Rather, courts have held that a plaintiff may sue on behalf of a single house of Congress to vindicate that particular chamber's unique institutional interests.", "Several courts have considered what sort of authorization, short of authorizing votes in both chambers leading to a suit being brought by the institution itself, suffices to permit a suit on behalf of a legislative institution. A number of cases prior to Arizona State Legislature considered this question. The most common setting for these cases involved legislative demands for information. The Supreme Court has long recognized \"that the power of inquiry\u2014with process to enforce it\u2014is an essential and appropriate auxiliary to the legislative function.\" In other words, Congress has an interest in obtaining information necessary to fulfill its constitutionally designated role in the tripartite system of American government. At the same time, however, courts have acknowledged a distinction between a chamber of Congress utilizing its own powers to demand and obtain information and invoking the federal courts ' power to enforce its demands. In order to utilize the judicial process\u2014rather than the political process\u2014to enforce congressional demands for information, Supreme Court precedent requires the plaintiffs to show that they are validly acting on behalf of the injured institution.", "In the 1976 case of United States v. AT&T Co. , for instance, the D.C. Circuit ruled that the chairman of the House Subcommittee on Oversight and Investigations had standing to appear in federal court to challenge the executive branch's objection to a subpoena that the subcommittee had issued to a private party. The court reasoned \"that the House as a whole has standing to assert its investigatory power, and can designate a member to act on its own behalf.\" Crucially, because the House of Representatives had passed a resolution authorizing the chairman to participate in the case \"on behalf of the Committee and the House,\" the chairman did not encounter the standing obstacles that might exist if \"a single [M]ember of Congress\" attempted \"to advocate his own interest in the congressional subpoena power\" without the affirmative consent of his or her respective chamber or if \"a wayward committee\" were \"acting contrary to the will of the House.\" Although AT&T predates Raines and the subsequent D.C. Circuit cases interpreting it, courts have generally concluded that AT&T 's holding\u2014namely, that congressional plaintiffs usually have standing to assert Congress's interests in obtaining information so long as they have congressional authorization to do so\u2014survives Raines . AT&T's holding comports with broader standing principles that a plaintiff may \"designate agents to represent it in federal court\" without running afoul of the standing requirement.", "In this vein, courts have held that a house of Congress can authorize a committee to sue on its behalf. For example, in the District Court for the District of Columbia's 2008 opinion in Committee on the Judiciary, U.S. House of Representatives v. Miers , the House Committee on the Judiciary filed suit in federal court to enforce a subpoena it had issued against certain executive officials. Critically, before the committee filed its lawsuit, the full House of Representatives passed a resolution authorizing the chairman of the committee \"to initiate a civil action in federal court\" to enforce the subpoena. The court therefore ultimately concluded \"that the Committee ha[d] standing to enforce its duly issued subpoena through a civil suit.\" According to the court, the fact that the committee had \"been expressly authorized by House Resolution to proceed on behalf of the House of Representatives as an institution \" distinguished Miers from cases like Raines in which individual legislators had invalidly attempted to assert injuries to their respective institutions as a whole rather than to themselves personally. In other words, \"the fact that the House ha[d] issued a subpoena and explicitly authorized th[e] suit\" was \"the key factor that move[d Miers ] from the impermissible category of an individual plaintiff asserting an institutional injury . . . to the permissible category of an institutional plaintiff asserting an institutional injury.\" Thus, the committee, acting on the full House's behalf with the House's imprimatur, could validly sue \"to vindicate both its right to the information that [was] the subject of the subpoena and its institutional prerogative to compel compliance with its subpoenas.\"", "Where, by contrast, a legislative plaintiff has not obtained congressional authorization to represent his respective house via an authorizing vote, courts have typically determined that the plaintiff lacks standing to sue to enforce subpoenas or otherwise assert an informational injury to Congress as a whole. For instance, in Cummings v. Murphy , the Seven-Member Rule case discussed above, the court concluded that individual Members lacked standing to argue that they were, in fact, validly proceeding on behalf of the institution. As the court explained, \"[i]ndividual Members of Congress generally do not have standing to vindicate the institutional interests of the house in which they serve\" unless they have obtained affirmative authorization from their respective chambers of Congress. The court opined that \"requiring authorization protects Congress' institutional concerns from the caprice of a restless minority of Members.\" Cummings thus demonstrates that \"it is not simply enough\" for individual legislators \"to point to an informational injury arising from an unmet statutory demand to demonstrate standing\"; courts generally also \"look to the presence of authorization as a necessary . . . factor in evaluating standing in cases that pit the Executive and Legislative Branches against each other.\"", "Significantly, at least one opinion suggests that to validly authorize a plaintiff to pursue litigation on an institution's behalf, that institution must expressly authorize the plaintiff to bring that specific lawsuit prior to the commencement of that suit; a freestanding authorization to pursue litigation may not always suffice to confer standing. Namely, in Walker v. Cheney , the Comptroller General sought a court order requiring the Vice President to produce certain documents. To support his argument that he possessed congressional authorization\u2014and thus standing\u2014to pursue this lawsuit on Congress's behalf, the Comptroller General invoked 31 U.S.C. \u00a7 716(b)(2), which purports to authorize the Comptroller General to \"bring a civil action in the district court of the United States for the District of Columbia to require the head of [an executive] agency to produce a record.\" The court, however, rejected that argument, concluding that this \" generalized allocation of enforcement power\" did not suffice to establish \"that the current Congress ha[d] authorized the Comptroller General to pursue a judicial resolution of the specific issues\" in the case before the court. To support that conclusion, the court emphasized that no committee requested the documents or issued a subpoena requiring the Vice President to produce them. Thus, in spite of the aforementioned statutory language purporting to empower the Comptroller General to bring suit, the court determined that \"neither House of Congress, and no congressional committee, ha[d] authorized the Comptroller General to pursue the requested information through [a] judicial proceeding.\" "], "subsections": []}, {"section_title": "When Authorization Is Insufficient for Standing", "paragraphs": ["Even where a legislature as a whole has purported to authorize a particular plaintiff to file suit on its behalf, that plaintiff must still satisfy the various requirements of standing, including the requirements of concrete and particular injury as to that institution. To illustrate, whereas a legislative plaintiff acting pursuant to the authorization of its respective institution generally possesses standing to sue to redress concrete and particular informational injuries to that institution, even an entire legislative body proceeding under valid authorization will not have standing to assert abstract or nonparticular injuries. As an example of a putative injury in the latter category, courts have generally rejected the idea that legislatures have standing based on their duty to legislate to challenge allegedly illegal acts by the Executive. In Alaska Legislative Council v. Babbitt , for instance, the D.C. Circuit determined that the Alaska Legislative Council lacked standing to challenge federal management of subsistence taking of fish and wildlife on federal lands in Alaska. The council claimed that it was injured because individual Alaskan legislators had a \"duty to legislate for the management of all the State's resources\" and the federal program interfered with this duty. Although the Alaska legislature had not explicitly voted to authorize the council to sue, the court assumed the plaintiff possessed such authorization because of its status as a \"permanent interim committee and service agency of the legislature.\" Despite this authorization, the court concluded that the committee lacked standing because its injuries did not belong to it, but rather, belonged to the \"State itself,\" and only the governor could bring that suit on behalf of Alaska. The legislature had thus failed to identify a \"separate [and] identifiable\" injury entitling it to sue.", "Additionally, several courts have concluded that legislative plaintiffs lack standing to assert a generalized interest in the proper interpretation or application of a statute irrespective of whether the full legislative body has authorized the plaintiffs to sue. For instance, Newdow v. U.S. Congress involved a challenge brought by an individual plaintiff to the constitutionality of the Pledge of Allegiance's use of the phrase \"under God.\" After the Ninth Circuit had issued a ruling allowing the case to proceed, the Senate moved to intervene in the case pursuant to a provision of the U.S. Code giving the Senate Legal Counsel the right to intervene unless the Senate would lack \"standing to intervene under . . . [A]rticle III of the Constitution.\" The court concluded that this language required it to examine the Senate's putative interest in the case at hand. The Ninth Circuit denied the Senate's motion, concluding that the Senate lacked standing to defend the law's constitutionality. The court explained that a \"general desire to see the law enforced as written\" did not suffice to give standing to a house of Congress to defend the law. ", "A more recent consideration of institutional standing occurred in the 2015 case of United States House of Representatives v. Burwell . In that case, the House of Representatives asserted two claims against various executive branch entities: (1) a constitutional claim that the defendants \"spent billions of unappropriated dollars to support the Patient Protection and Affordable Care Act\" (ACA) in violation of the Appropriations Clause of the U.S. Constitution; and (2) a statutory claim that the Secretary of the Treasury, \"under the guise of implementing regulations,\" had \"effectively amended\" certain aspects of the ACA \"by delaying its effect and narrowing its scope.\" The court concluded that the House possessed standing to pursue the constitutional claim but not the statutory claim. The court first determined that the House had standing to pursue its constitutional claim because \"Congress (of which the House and Senate are equal) is the only body empowered by the Constitution to adopt laws directing monies to be spent from the U.S. Treasury,\" and the Executive's alleged circumvention of that structure was a sufficiently concrete and particularized injury as to the House as a whole. However, the district court then ruled that the House lacked standing to pursue its parallel challenges to the Executive's alleged violation of the statutory scheme, reasoning that Article III does not create \"general legislative standing\" by which the branches of Congress may sue the Executive for any alleged violation of statutes or the Constitution by the Executive. Because the Executive's alleged violation of the ACA would cause the House \"no particular harm,\" the House lacked standing to pursue its statutory claim.", "Burwell also rejected the argument that separation-of-powers concerns required the dismissal of the House's claims. In Arizona State Legislature , the Court had noted that such concerns might be significant in a dispute between Congress and the President, but the Burwell court dismissed such concerns as dicta and did not find them controlling. Instead, the court determined that the case presented a \"plain dispute over a constitutional command\" that the judiciary was well suited to resolve. These separation-of-powers concerns, particularly as they relate to Congress's interests with respect to the executive branch's execution of a statutory scheme, play a particularly important role in answering the question of when Congress can intervene in litigation, as discussed below."], "subsections": []}]}, {"section_title": "Congressional Intervention to Defend a Statute's Constitutionality: Adversity and Standing Issues", "paragraphs": ["Whereas the analysis above focuses mainly on congressional entities filing their own lawsuits as plaintiffs , legislators or a legislature as a whole may also attempt to participate in ongoing litigation between nonlegislative parties in a variety of ways. The procedural rules governing the federal courts contemplate that, subject to specified conditions, a nonparty may \"intervene\" in an existing federal case. Generally, if a court permits an entity to intervene in a case, that entity becomes a full party to the litigation and may freely participate in the case to the same extent as the original parties. For instance, subject to certain exceptions and conditions, an intervenor may generally (among other things) file briefs and motions, participate in discovery, and appeal adverse judgments. ", "As relevant here, congressional litigants periodically attempt to intervene in existing federal cases initiated by noncongressional parties. As explained in the following subsections, whether such attempts ultimately succeed depends on a variety of factors that to a large degree mirror the considerations relevant to whether a legislative plaintiff may initiate new litigation in federal court."], "subsections": [{"section_title": "Justiciability Issues Involved in Intervention", "paragraphs": ["One potentially key\u2014albeit infrequent \u2014situation in which a congressional entity may attempt to intervene in an ongoing lawsuit is when the executive branch declines to defend the constitutionality of a federal statute. For instance, the U.S. House of Representatives recently intervened in the case of Texas v. United States to defend the constitutionality of provisions of the Affordable Care Act after the executive branch declined to defend the law in its entirety. As explained below, at least two questions may arise when Congress (or a Member, committee, or house thereof) attempts to intervene to defend a statute's validity: (1)\u00a0whether the executive branch's refusal to defend the statute renders the original parties insufficiently adverse to create a justiciable controversy; and (2) whether Congress possesses standing to intervene in the case. ", "With regard to the first question, whenever a plaintiff sues the United States to invalidate a federal statute, and the United States does not dispute the plaintiff's assertion that the statute is unconstitutional, the fact that none of the named litigants wishes to defend the statute's validity creates a potential risk that the original parties are not truly adverse to each other. The Supreme Court has ruled that \"the business of federal courts\" is limited \"to questions presented in an adversary context,\" rather than lawsuits between friendly parties. Like standing, this \"adversity\" requirement is a justiciability doctrine that the Supreme Court has derived (at least in part) from Article III's \"case or controversy\" language. The Supreme Court has held that where \"both litigants desire precisely the same result\" in a particular case, there is generally \"no case or controversy within the meaning of [Article] III of the Constitution,\" and a federal court accordingly lacks jurisdiction over the case. In addition to this constitutional foundation, the Supreme Court has recognized that the adversity requirement also has a prudential dimension. In other words, \"even when Article III permits the exercise of federal jurisdiction, prudential considerations\" may sometimes counsel against adjudicating a lawsuit where the parties lack that \"concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions.\"", "With respect to the second question, while the standing doctrine is generally concerned with whether a plaintiff is a proper party to a particular lawsuit, other putative parties who are not plaintiffs, but are seeking distinct judicial relief from a federal court\u2014such as intervenor-defendants or defendant-appellants\u2014likewise need to demonstrate that they possess standing in order to obtain the relief sought. For example, in Diamond v. Charles , the Supreme Court concluded that an intervenor lacked standing to appeal an adverse judgment against the original defendant after that defendant declined to file an appeal of its own. Under Supreme Court precedent, as long as the existing parties to the case present a justiciable controversy on their own, an intervenor need not independently possess standing to participate in the lawsuit so long as the intervenor seeks the same judicial relief as one or more of the existing parties. To the extent an intervenor seeks \"relief that is different from that which is sought by a party with standing,\" however, that intervenor must independently \"possess Article III standing to intervene\" in the case. ", "The Supreme Court has periodically considered how the adversity and standing doctrines apply in the congressional intervention context and has ultimately concluded that cases in which the executive branch declines to defend a federal statute and Congress steps in to defend the law may potentially be justiciable. For instance, in Immigration and Naturalization Service (INS) v. Chadha , an alien challenged the constitutionality of a particular provision of the Immigration and Nationality Act that had authorized one house of Congress, by resolution, to invalidate the decisions of the executive branch. Because the INS agreed with the alien that this \"one-house veto\" provision was unconstitutional, the Court needed to examine whether the case presented \"a genuine controversy\" rather than a nonjusticiable \"non-adversary[] proceeding\" between two friendly parties. Crucially, however, both the Senate and the House had intervened in the case to defend the statute's constitutionality. The Court therefore held that, because Congress was \"a proper party to defend the constitutionality of\" this statute, \"the concrete adverseness\" required by Article III existed \"beyond doubt\" \"from the time of Congress' formal intervention\" in the case. Going further, the Court also explained in dicta that \"there was adequate [Article] III adverseness\" in the case even \" prior to Congress' intervention\" because the \"INS would have deported\" the alien against his wishes if the federal courts had rejected the alien's constitutional challenge. In other words, because the INS would have enforced the challenged statute despite its unwillingness to defend the statute's constitutionality in a judicial proceeding, the majority viewed the case as presenting a justiciable controversy between the INS and the alien even if Congress had never intervened. Although the Chadha Court also acknowledged that \"there may be prudential, as opposed to [Article] III, concerns about sanctioning the adjudication of th[e] case in the absence of any participant supporting the validity of\" the provision's constitutionality, the Supreme Court explained that the lower court had \"properly dispelled any such concerns by inviting and accepting briefs from both Houses of Congress.\" The Court further opined that \"Congress is the proper party to defend the validity of a statute when an agency of government, as a defendant charged with enforcing the statute, agrees with [the] plaintiffs that the statute is inapplicable or unconstitutional.\"", "Prior to the Supreme Court's 2013 decision in United States v. Windsor , one might plausibly read Chadha to stand for the limited proposition that Congress may intervene to defend an undefended federal law (albeit one that the Executive has continued to enforce) only when the judicial invalidation of that law would directly affect Congress's institutional powers, such as by eliminating Congress's ability to validly utilize a one-house legislative veto. In Windsor , however, the Court appeared to implicitly adopt a broader conception of Chadha by permitting a congressional entity to intervene to defend an undefended law even though the statute at issue had no direct bearing on Congress's institutional powers. The respondents in Windsor challenged the constitutionality of a provision of the Defense of Marriage Act (DOMA) on equal protection grounds. During the course of the litigation, however, \"the Attorney General of the United States notified the Speaker of the House of Representatives . . . that the Department of Justice would no longer defend the constitutionality of\" the challenged provision. Nevertheless, the Attorney General stated that he would continue to enforce the provision in order to \"provid[e] Congress a full and fair opportunity to participate in the litigation\" over the provision's validity, and accordingly appealed the lower court's judgment invalidating the statute to the Supreme Court. After the Attorney General announced that he would not defend the statute, the House's Bipartisan Legal Advisory Group (BLAG)\u2014which is \"composed of the Speaker and the majority and minority leaderships\" of the House \u2014\"voted to intervene in the litigation to defend the constitutionality of\" the provision. The district court permitted BLAG to intervene. ", "Because \"the Government largely agree[d] with the opposing part[ies] on the merits of the controversy,\" the Supreme Court needed to determine whether the executive branch's \"concession that [the challenged provision was] unconstitutional\" rendered the case nonjusticiable on adversity grounds. The Court first concluded that the case presented \"a justiciable dispute as required by Article III\" because (1)\u00a0the executive branch had announced its \"inten[tion] to enforce the challenged law\" if the court ultimately deemed the provision constitutional; and (2) the lower court had \"order[ed] the United States to pay money\" to the challengers \"that it would not disburse but for the court's order.\" The Court accordingly determined that \"the United States retain[ed] a stake sufficient to support Article III jurisdiction on appeal and in proceedings before th[e] Court.\" ", "The Court next concluded that the legislative branch's presence in the case alleviated any purely prudential concerns posed by the executive branch's refusal to defend the provision's validity. The Court explained that \"BLAG's sharp adversarial presentation of the issues satisfie[d] the prudential concerns that otherwise might counsel against hearing an appeal from a decision with which the principal parties agree.\" Critically, because Windsor and the United States presented a justiciable controversy within the meaning of Article III on their own, the Court did not need to resolve whether BLAG would have independently possessed Article III standing to intervene in the case and defend the statute on its own authority. As explained in greater detail below, however, the Court also implied that it might have deemed the case nonjusticiable if the Executive had declined to enforce the challenged statute in addition to merely refusing to defend its constitutionality.", "Chadha and Windsor thus stand for the propositions that (1) the Executive's refusal to defend a statute will not always render the lawsuit challenging that statute nonjusticiable; and (2) congressional intervention in ongoing federal litigation does not necessarily raise Article III standing problems \u2014at least as long as Congress does not pursue additional relief beyond a judgment in the United States' favor. To that end, lower federal courts have frequently permitted legislative actors to intervene as defendants in cases where the executive branch agreed with the plaintiff that a challenged statute was unconstitutional . ", "Still, the federal courts' Article III jurisdiction to adjudicate such cases may not be unlimited. Although Chadha and Windsor suggest that Congress may help alleviate prudential adversity problems created by the executive branch's nondefense of a statute by intervening to defend the challenged law, neither case says anything definitive about whether a congressional intervenor would have independently possessed Article III standing in those cases, especially in cases where the Executive refuses to enforce the underlying statute. Because the Executive continued to enforce the challenged statutes in Chadha and Windsor despite its refusal to defend their constitutionality, the Court concluded that the \"refusal of the Executive to provide the relief sought\" by the plaintiff \"suffice[d] to preserve a justiciable dispute as required by Article III\" regardless of whether or not Congress had intervened to mitigate any purely prudential obstacles to justiciability resulting from the Executive's refusal to defend the law. In other words, because \"the United States retains a stake sufficient to support Article III jurisdiction\" when it continues to enforce a statute that it declines to defend in court, the existence of a justiciable controversy between the plaintiff and the United States relieved the congressional intervenors in Chadha and Windsor of the burden to independently demonstrate Article III standing of their own before participating in the case. The Windsor Court expressly declined to decide, however, \"whether BLAG would have standing to\" defend DOMA \"on BLAG's own authority\" if the Executive had also refused to enforce the statute in addition to merely refusing to defend it. ", "The dissenting Justices in Windsor \u2014who disagreed with the majority on the issue of adversity and therefore had to reach the standing question\u2014could not agree on whether and when a house of Congress possesses standing to defend an undefended statute. Justice Alito, for instance, reasoned that \"in the narrow category of cases in which a court strikes down an Act of Congress and the Executive declines to defend the Act, Congress both has standing to defend the undefended statute and is a proper party to do so.\" According to Justice Alito, \"because legislating is Congress' central function,\" a judicial decision \"striking down an Act of Congress\" injures each chamber of Congress as an institution by \"impair[ing] Congress' legislative power.\" By contrast, Justice Scalia, joined by Chief Justice Roberts and Justice Thomas, instead suggested that the legislative branch possesses standing to intervene in such lawsuits only when the case implicates \"the validity of a mode of congressional action,\" such as the one-house legislative veto challenged in Chadha . According to Justice Scalia, Congress may only \"hale the Executive before the courts . . . to vindicate its own institutional powers to act,\" not \"to correct a perceived inadequacy in the execution of its laws\"\u2014which, in Justice Scalia's view, does not constitute an institutional injury to Congress itself. As this exchange between the dissenting Justices in Windsor reflects, the circumstances under which Congress may permissibly intervene to defend the validity of a statute the Executive refuses to enforce remains an unanswered question, and the answer to that question will likely implicate the same sorts of policies and principles that animate the doctrines governing whether and when a plaintiff may sue to vindicate Congress's institutional interests."], "subsections": []}, {"section_title": "Other Relevant Considerations in Intervention", "paragraphs": ["In addition to the adversity and standing doctrines discussed above, other legal principles may also affect whether a congressional entity may permissibly intervene in a federal case to defend a statute's constitutionality or for some other purpose. For one, just as a legislator ordinarily may not initiate a lawsuit without the affirmative consent of his or her respective house, a congressional entity typically cannot intervene in a preexisting federal case without first obtaining authorization to do so. Where congressional entities have first obtained authorization to participate in an ongoing lawsuit from their respective houses, however, courts have typically allowed those entities to intervene. However, a congressional entity seeking to intervene in ongoing litigation must comply with all applicable statutory and procedural rules governing legislative intervention in federal court."], "subsections": []}]}, {"section_title": "Participation as Amicus Curiae", "paragraphs": ["If Congress (or a unit or individual Member thereof) cannot participate as a full party to a particular lawsuit due to one or more of the constitutional, statutory, procedural, and prudential obstacles discussed above, it may still be able to participate in the case in a more limited capacity as an amicus curiae . An amicus curiae \u2014a Latin term for \"friend of the court\"\u2014is an entity with \"a strong interest in the subject matter\" of a particular case that may submit legal briefs or other filings to the court in support of (or against) a particular position, but may not otherwise participate in the suit to the same extent as an original party or an intervenor. ", "Members, houses, and committees of Congress have successfully filed amicus briefs in a wide variety of cases. To name just a few salient examples, after the executive branch declined to defend the validity of the independent counsel provision of the Ethics in Government Act, \"both houses [of Congress] filed amicus briefs defending the legislation's constitutionality.\" Similarly, two opposing coalitions of individual Members of Congress filed dueling amicus briefs in a Supreme Court case concerning the continued vitality of Roe v. Wade .", "The procedural rules governing the submission of amicus briefs may vary from court to court. Ultimately, however, federal courts possess broad discretion to decide whether to allow a nonparty to submit an amicus brief in a particular case. Thus, on rare occasions, some courts have exercised that discretion to reject congressional attempts to file amicus briefs. For instance, the U.S. Court of Federal Claims recently prohibited the House of Representatives from filing an amicus brief in a private party's lawsuit against the United States. The court, noting that \"the sole purpose of the House's proposed amicus brief [was] to urge a ground for dismissing [the] plaintiff's complaint that was not raised by the [Department of Justice] in its motion to dismiss,\" reasoned that allowing the House to participate as an amicus would \"improperly intrud[e] on the DOJ's 'exclusive and plenary' authority to litigate the case on the United States' behalf.\" "], "subsections": []}, {"section_title": "Considerations for Congress", "paragraphs": ["As discussed, courts have identified several considerations that may be relevant when assessing whether a legislative entity has suffered a justiciable injury-in-fact allowing it to seek judicial relief from a federal court, including", "the presence of congressional authorization; the absence of other legislative or nonlegislative remedies; allegations of vote nullification; historical practice; availability of alternative plaintiffs to bring a judicial challenge; and whether the lawsuit is an attempt to assert an interest other than the generalized interest in the proper application and implementation of the law.", "While these considerations provide some guidance with regard to the standing inquiry in lawsuits involving a legislative entity, they do not comprehensively resolve every question that may arise. Additionally, the legal principles that courts have articulated in congressional standing cases to date are not always perfectly consistent with each other, making it difficult to predict whether any particular legislative attempt to participate in litigation will overcome the standing hurdle. Further compounding that difficulty is the fact that there are very few cases analyzing the legislative standing doctrine and only a handful of rulings on the issue from the Supreme Court itself. As a consequence, it is important to identify areas of lingering doctrinal uncertainty, as well as measures that Members, committees, and houses of Congress may take to increase the likelihood that any given lawsuit will surmount the standing barrier."], "subsections": [{"section_title": "Areas of Doctrinal Uncertainty", "paragraphs": ["One of the key unanswered questions regarding legislative standing concerns what form of authorization is necessary to empower a legislative plaintiff to assert an institutional injury on behalf of his respective institution. In Raines v. Byrd , for instance, the Supreme Court concluded that the individual Member plaintiffs \"ha[d] not been authorized to represent their respective Houses of Congress\" for standing purposes even though Congress specifically enacted a statute purporting to authorize \"any Member of Congress\" to \"bring an action . . . for declaratory judgment and injunctive relief on the ground that any provision of [the Line Item Veto Act] violates the Constitution.\" Similarly, in Walker v. Cheney , the court concluded that 31 U.S.C. \u00a7\u00a0716(b)(2)\u2014which purports to grant the Comptroller General freestanding authority to \"bring a civil action . . . to require the head of [an] agency to produce a record\" \u2014nonetheless did not authorize the Comptroller General to sue the Vice President. These cases suggest that a congressional litigant asserting an institutional injury who obtains express authorization to participate in a specifically identified lawsuit is more likely to satisfy the standing requirement than a litigant who does not. It remains uncertain, however, when (if ever) a statute purporting to authorize an entity to litigate on Congress's behalf generally\u2014without a specific vote authorizing that entity to participate in a particular case\u2014would satisfy the authorization prong of the standing analysis. ", "An additional open question that existing precedent does not conclusively resolve is whether and under what circumstances the general availability of blunt legislative remedies\u2014such as impeachment\u2014will deprive a legislative litigant of standing to seek judicial relief against the executive branch. In Campbell v. Clinton , for instance, the D.C. Circuit concluded that individual Members lacked standing to sue the President in part because \"there always remains the possibility of impeachment should a President act in disregard of Congress' authority.\" In Blumenthal v. Trump , by contrast, the court concluded that a group of individual Members did have standing to sue the President, stating (with little explanation) that \"the availability of the extreme measure of impeachment to enforce the President's compliance with the [Emoluments] Clause is not an adequate remedy.\" Further litigation will likely be necessary to resolve these conflicting strands of congressional standing precedent.", "Perhaps the most difficult open question raised by the legislative standing jurisprudence concerns what sort of institutional injury is sufficient to afford a legislative entity standing. At one end of the spectrum, courts have generally recognized that institutional plaintiffs may sue to remedy discrete injuries, such as informational injuries resulting from an executive branch agency's refusal to comply with a subpoena. At the other end, courts have typically determined that even institutional plaintiffs cannot assert a generalized, nonparticularized interest in the proper application, interpretation, or enforcement of the law. Some recent cases from the district courts, however, appear to envision a broader conception of institutional injury. The court in U.S. House of Representatives v. Burwell , for example, concluded that the House possessed standing to pursue constitutional claims \"that the Executive ha[d] drawn funds from the Treasury without a congressional appropriation.\" Critical to the court's holding was the fact that the Constitution designated \"the Congress (of which the House and Senate are equal)\" as \"the only body empowered . . . to adopt laws directing monies to be spent from the U.S. Treasury.\" According to the court, the \"constitutional structure would collapse, and the role of the House would be meaningless, if the Executive could circumvent the appropriations process and spend funds however it pleases.\" Similarly, the Blumenthal v. Trump court concluded that the individual Member plaintiffs possessed standing in part because they did not merely \"disagree with the manner in which the President [wa]s administering or enforcing the law,\" but were instead wholly prevented from discharging their constitutionally designated role in the emoluments process. Burwell and Blumenthal thus suggest that Congress could have a justiciable injury when the executive branch violates the Constitution in a way that specifically undermines Congress's authority in a particular governmental process.", "It is unclear whether the Supreme Court or the federal appellate courts would ultimately endorse the broad conceptions of congressional standing that the Burwell and Blumenthal courts adopted. Because the parties in Burwell ultimately settled their dispute, neither the D.C. Circuit nor the Supreme Court ever determined whether the district court's standing conclusions were correct. Nor has the D.C. Circuit resolved whether the district court correctly concluded that the plaintiffs in Blumenthal possess standing to pursue their Emoluments Clause challenges. Some (though not all) academics have argued, however, that the Burwell and Blumenthal courts' expanded conception of standing may be unsound, as these decisions would appear to authorize congressional litigants to hale executive branch entities into the federal courts in a fairly broad array of factual circumstances that implicate separation-of-powers principles. Burwell , for instance, contains language suggesting that at least some congressional litigants possess standing to sue the executive branch whenever it spends unappropriated funds. Blumenthal likewise contains language suggesting that legislative litigants\u2014including individual Members\u2014could very well possess standing to sue the President in a variety of contexts in which the Constitution offers Congress (or a house thereof) an opportunity to provide prior approval to a particular executive action, such as appointments. Future judicial decisions may provide further guidance on whether, how, and under what circumstances this sort of freestanding congressional authority to summon executive branch entities before a federal judge is consistent with the Supreme Court's admonition that the \"standing inquiry\" is \"especially rigorous when reaching the merits of the dispute would require [a court] to decide whether an action taken by one of the other two branches of the Federal Government was unconstitutional.\" "], "subsections": []}, {"section_title": "What Can Congress (or a Member or Committee) Do?", "paragraphs": ["The fact that standing is a constitutional requirement circumscribes Congress's ability to alter the aforementioned standing rules by enacting legislation. The Supreme Court has repeatedly reaffirmed \"that Congress cannot erase Article III's standing requirements by statutorily granting the right to sue to a plaintiff who would not otherwise have standing.\" At the same time, however, the Court has also recognized \"that Congress may 'elevat[e] to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law.'\" It is therefore possible that, even though Congress may not \"abrogate the Art[icle] III minima,\" Congress may under presently undefined circumstances enact a statute that grants it standing to pursue a claim in federal court that it could not pursue in that statute's absence. However, whether (and to what extent) Congress possesses such power to do so in the context of legislative standing may need to await further explication from the courts.", "In the absence of such guidance from the judiciary, a congressional litigant's best strategy may be to attempt to satisfy as many of the considerations listed above\u2014that is, to", "attempt to obtain authorization to pursue the specific lawsuit in question from one or both houses of Congress; attempt to persuade the court that all possible legislative remedies would be futile; argue that the allegedly unlawful action has deprived Members of Congress of the efficacy of their votes; analogize to historical precedent in which courts entertained similar challenges by congressional litigants; demonstrate that no other litigant would possess standing to vindicate the congressional interest in dispute; and avoid framing the legal theory as a generalized grievance challenging the opposing party's implementation or interpretation of a federal statute.", "Nonetheless, as several scholars have emphasized, \"not all interbranch disputes\u2014even constitutional disputes\u2014need to be resolved in the courts.\" Indeed, the federal judiciary has in many cases expressed marked hesitance to interpose itself between dueling branches of the U.S. government. The lack of a judicial remedy to a congressional complaint may indicate that Congress's most promising means for resolving disputes with the executive branch may be the political process, where a significant amount of constitutional decisionmaking occurs."], "subsections": []}]}]}}
{"id": "R45268", "title": "Department of Homeland Security Appropriations: FY2019", "released_date": "2019-03-15T00:00:00", "summary": ["This report provides an overview and analysis of FY2019 appropriations for the Department of Homeland Security (DHS). The primary focus of this report is on congressional direction and funding provided to DHS through the appropriations process. It includes an Appendix with definitions of key budget terms used throughout the suite of Congressional Research Service reports on homeland security appropriations. It also directs the reader to other reports providing context for specific component appropriations.", "As part of an overall DHS budget that the Office of Management and Budget (OMB) estimated to be $74.88 billion, the Trump Administration requested $47.43 billion in adjusted net discretionary budget authority through the appropriations process for DHS for FY2018. The request amounted to a $0.29 billion (0.6%) decrease from the $47.72 billion in annual appropriations enacted for FY2018 through the Department of Homeland Security Appropriations Act, 2018 (P.L. 115-141, Division F).", "The Administration also requested discretionary funding for DHS components that does not count against discretionary spending limits and is not reflected in the adjusted net discretionary budget authority total. The Administration requested an additional $6.65 billion for the Federal Emergency Management Agency (FEMA) in disaster relief funding, as defined by the Budget Control Act (P.L. 112-25; BCA), and in the budget request for the Department of Defense (DOD), $165 million in Overseas Contingency Operations designated funding (OCO) from the Operations and Maintenance budget of the U.S. Navy.", "On June 21, 2018, the Senate Committee on Appropriations reported out S. 3109, the Department of Homeland Security Appropriations Act, 2019, accompanied by S.Rept. 115-283. Committee-reported S. 3109 included $48.33 billion in adjusted net discretionary budget authority for FY2019. This was $901 million (1.9%) above the level requested by the Administration, and $611 million (1.3%) above the enacted level for FY2018. The Senate committee-reported bill included the Administration-requested levels for disaster relief funding, and included the OCO funding in an appropriation to the Coast Guard, rather than as a transfer from the U.S. Navy.", "On July 26, 2018, the House Appropriations Committee marked up H.R. 6776, its version of the Department of Homeland Security Appropriations Act, 2019. H.Rept. 115-948 was filed September 12, 2018. Committee-reported H.R. 6776 included $51.44 billion in adjusted net discretionary budget authority. The House committee-reported bill included the Administration-requested levels for disaster relief funding, but unlike S. 3109, did not include the OCO funding for the Coast Guard.", "As some of the annual appropriations for FY2019 remained unfinished, a consolidated appropriations bill that included a continuing resolution was passed by Congress and signed into law on September 28, 2018. The resolution, which covered DHS along with several other departments and agencies, continued funding at a rate of operations equal to FY2018 with some exceptions. This continuing resolution was extended through December 21, 2018, after which point annual appropriations lapsed. A partial government shutdown ensued for 35 days until continuing appropriations were resumed January 25, 2019, by P.L. 116-5.", "P.L. 116-6, the Consolidated Appropriations Act, 2019, was passed by Congress on February 14, 2019, and signed into law the following day. Division A of the act included the Homeland Security Appropriations Act, 2019, which included $49.41 billion in adjusted net discretionary budget authority, $12 billion designated for the costs of major disasters, and $165 million in OCO funding for the Coast Guard.", "This report will be updated in the event of FY2019 supplemental appropriations actions."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report describes and analyzes annual appropriations for the Department of Homeland Security (DHS) for FY2019. It compares the enacted FY2018 appropriations for DHS, the Donald J. Trump Administration's FY2019 budget request, and the appropriations measures developed and considered by Congress in response to it. This report identifies additional informational resources, reports, and products on DHS appropriations that provide context for the discussion, and it provides a list of Congressional Research Service (CRS) policy experts with whom clients may consult on specific topics. ", "The suite of CRS reports on homeland security appropriations tracks legislative action and congressional issues related to DHS appropriations, with particular attention paid to discretionary funding amounts. These reports do not provide in-depth analysis of specific issues related to mandatory funding\u2014such as retirement pay\u2014nor do they systematically follow other legislation related to the authorizing or amending of DHS programs, activities, or fee revenues.", "Discussion of appropriations legislation involves a variety of specialized budgetary concepts. The Appendix to this report explains several of these concepts, including budget authority, obligations, outlays, discretionary and mandatory spending, offsetting collections, allocations, and adjustments to the discretionary spending caps under the Budget Control Act (BCA; P.L. 112-25 ). A more complete discussion of those terms and the appropriations process in general can be found in CRS Report R42388, The Congressional Appropriations Process: An Introduction , coordinated by James V. Saturno, and the Government Accountability Office's A Glossary of Terms Used in the Federal Budget Process ."], "subsections": [{"section_title": "Note on Data and Citations", "paragraphs": ["All amounts contained in the suite of CRS reports on homeland security appropriations represent budget authority. For precision in percentages and totals, all calculations in these reports used unrounded data, which are presented in each report's tables. However, amounts in narrative discussions are rounded to the nearest million (or 10 million, in the case of numbers larger than 1 billion), unless noted otherwise. ", "Data used in this report for FY2018 amounts are derived from the explanatory statement accompanying P.L. 115-141 , the Consolidated Appropriations Act, 2017\u2014Division F of which is the Department of Homeland Security Appropriations Act, 2018. The explanatory statement also includes data on FY2018 supplemental appropriations for DHS enacted prior to the development of the consolidated appropriations act for FY2018. Data for the FY2019 requested levels and enacted levels are drawn from H.Rept. 116-9 , the explanatory statement accompanying P.L. 116-6 . Data on the Senate Appropriations Committee recommendation are drawn from S.Rept. 115-283 , and data for the House Appropriations Committee recommendation are drawn from H.Rept. 115-948 .", "Scoring methodology is consistent across this report, relying on data provided by the Appropriations Committees that has been developed with Congressional Budget Office (CBO) methodology. CRS does not attempt to compare this data with Office of Management and Budget (OMB) data because technical scoring differences do not allow precise comparisons."], "subsections": []}]}, {"section_title": "Legislative Action on FY2019 DHS Appropriations", "paragraphs": ["This section provides an overview of the process of enactment of appropriations for the Department of Homeland Security for FY2019, from the Administration's initial request, through committee action in the House and Senate, continuing appropriations (and their lapse), and enactment of the consolidated appropriations bill that contained DHS annual appropriation."], "subsections": [{"section_title": "Annual Appropriations", "paragraphs": [], "subsections": [{"section_title": "Trump Administration FY2019 Request", "paragraphs": ["On February 12, 2018, the Trump Administration released its budget request for FY2019. The enactment of the Bipartisan Budget Act of 2018 ( P.L. 115-123 ) three days before had established discretionary spending limits for FY2018 and FY2019, replacing the limits prescribed by the Budget Control Act of 2011 ( P.L. 112-25 ). The Administration chose to submit an addendum to their request in a letter accompanying the formal request documentation, which included additional requests for resources for DHS and several other departments and agencies. ", "The Trump Administration requested $47.43 billion in adjusted net discretionary budget authority for DHS for FY2019, as part of an overall budget that the Office of Management and Budget estimated to be $74.88 billion (including fees, trust funds, and other funding that is not annually appropriated or does not score against discretionary budget limits). The request amounted to a $0.29 billion (0.6%) decrease from the $47.72 billion in annual appropriations enacted for FY2018 through the Department of Homeland Security Appropriations Act, 2018 ( P.L. 115-141 , Division F).", "The Trump Administration also requested discretionary funding for DHS components that does not count against discretionary spending limits set by the Budget Control Act (BCA; P.L. 112-25 ) and is not reflected in the above totals. The Administration requested an additional $6.65 billion for the Federal Emergency Management Agency (FEMA) in disaster relief funding, as defined by the BCA, and in the budget request for the Department of Defense, $165 million in Overseas Contingency Operations/Global War on Terror designated funding (OCO), to be transferred to the Coast Guard. "], "subsections": []}, {"section_title": "Senate Committee Action", "paragraphs": ["On June 21, 2018, the Senate Appropriations Committee reported out S. 3109 , the Department of Homeland Security Appropriations Act, 2019, accompanied by S.Rept. 115-283 . Committee-reported S. 3109 included $48.33 billion in adjusted net discretionary budget authority for FY2019. This was $901 million (1.9%) above the level requested by the Administration, and $611 million (1.3%) above the enacted level for FY2018. The Senate committee-reported bill also included the Administration-requested levels for disaster relief funding, and $163 million in OCO-designated funding directly for the Coast Guard, as had been done in FY2018, rather than as a transfer, as had been requested by the Administration. This bill was never taken up for action on the Senate floor."], "subsections": []}, {"section_title": "House Committee Action", "paragraphs": ["On July 26, 2018, the House Appropriations Committee marked up H.R. 6776 , its version of the Department of Homeland Security Appropriations Act, 2019. H.Rept. 115-948 was filed September 12, 2018. Committee-reported H.R. 6776 included $51.44 billion in adjusted net discretionary budget authority. The House committee-reported bill included the Administration-requested levels for disaster relief funding, but unlike S. 3109 , did not include the OCO funding for the Coast Guard. This bill did not see action on the House floor."], "subsections": []}, {"section_title": "Continuing Resolutions and Lapse in Annual Appropriations", "paragraphs": ["As some of the annual appropriations for FY2019 remained unfinished, a consolidated appropriations bill that included a continuing resolution was passed by Congress and signed into law on September 28, 2018, as P.L. 115-245 . The continuing resolution (Division C) continued funding for DHS at a rate of operations equal to that of the Department of Homeland Security Appropriations Act, 2018, with some exceptions. The continuing resolution was extended through December 21, 2018, at which point it expired, and annual appropriations for DHS lapsed, resulting in a partial shutdown of DHS for 35 days. Continuing appropriations were restored at the FY2018 rate of operations with the enactment of P.L. 116-4 on January 25, 2019. "], "subsections": []}, {"section_title": "Enactment", "paragraphs": ["On February 14, 2019, the House took up H.J.Res. 31 , a consolidated appropriations bill that included eight annual appropriations bills. Division A, the Department of Homeland Security Appropriations Act, 2019, included $49.41 billion in adjusted net discretionary budget authority, $1.69 billion (3.5%) more than had been provided for FY2018, and $2.04 billion more than had been requested by the Administration in February 2018. In addition to that total, the bill included $12 billion designated for the costs of major disasters\u2014$5.35 billion (80.4%) more than had been requested, and the requested $165 million in OCO funding appropriated for the Coast Guard operating budget, rather than a transfer from the Navy. The bill passed the House by a vote of 300-128, and the Senate that same day by a vote of 83-16. The President signed it into law the next day."], "subsections": []}]}]}, {"section_title": "Summary of DHS Appropriations", "paragraphs": ["Generally, the homeland security appropriations bill includes all annual appropriations provided for DHS, allocating resources to every departmental component. Discretionary appropriations provide roughly two-thirds to three-fourths of the annual funding for DHS operations, depending how one accounts for disaster relief spending and funding for overseas contingency operations. The remainder of the budget is a mix of fee revenues, trust funds, and mandatory spending.", "Appropriations measures for DHS typically have been organized into five titles. The first four are thematic groupings of components, while the fifth provides general direction to the department, and sometimes includes provisions providing additional budget authority. ", "Prior to the FY2017 act, the legislative language of many appropriations included directions to components or specific conditions on how the budget authority it provided could be used. Similarly, general provisions provided directions or conditions to one or more components. In the FY2017 act, a number of these provisions within appropriations and component-specific general provisions were grouped at the ends of the titles where their targeted components are funded, and identified as \"administrative provisions.\" This practice has continued in subsequent years."], "subsections": [{"section_title": "The DHS Common Appropriations Structure", "paragraphs": ["When DHS was established in 2003, components of other agencies were brought together over a matter of months, in the midst of ongoing budget cycles. Rather than developing a new structure of appropriations for the entire department, Congress and the Administration continued to provide resources through existing account structures when possible. ", "At the direction of Congress, in 2014 DHS began to work on a new Common Appropriations Structure (CAS), which would standardize the format of DHS appropriations across components. In an interim report in 2015, DHS noted that operating with \"over 70 different appropriations and over 100 Programs, Projects, and Activities ... has contributed to a lack of transparency, inhibited comparisons between programs, and complicated spending decisions and other managerial decision-making.\"", "After several years of work and negotiations with Congress, DHS made its first budget request in the CAS for FY2017, and implemented it while operating under the continuing resolutions funding the department in October 2016. For FY2017 and FY2018, all DHS components requested appropriations under the CAS except for the Coast Guard, due to constraints of its financial management system. For FY2019, all the components' requests generally conformed to the CAS.", "A visual representation of the FY2019 requested funding in this new structure follows in Figure 1 . On the left, CAS appropriations categories are listed next to a black bar representing the total FY2018 funding levels requested for DHS for each category. A catch-all \"other\" category is included for budget authority associated with the legislation that does not fit the CAS categories. Colored lines flow to the DHS components listed on the right, showing how the amount of funding for each appropriations category is distributed across DHS components. Wider lines indicate greater funding levels, so it is possible to understand how components may be funded differently. For example, while Customs and Border Protection (CBP) gets most of its funding from Operations and Support appropriations, the Federal Emergency Management Agency (FEMA) receives most of its discretionary funding from the Disaster Relief Fund appropriation. "], "subsections": []}, {"section_title": "DHS Appropriations: Summary by Title", "paragraphs": ["The following sections present textual and tabular comparisons among FY2018 enacted appropriations, FY2019 requested appropriations, the FY2019 appropriations bills developed by the appropriations committees, and the final enacted annual appropriation in Division A of the FY2019 Consolidated Appropriations Act ( P.L. 116-6 ). The structure of the appropriations reflects the organization outlined in the detail table of the explanatory statement accompanying the act ( H.Rept. 116-9 ).", "The tables summarize enacted appropriations for FY2018, and those requested by the Administration, and proposed in appropriations committee-developed legislation under development for FY2019. ", "Only the formal request for FY2019 annual appropriations is reflected in the \"Request\" column. The tables include data on enacted annual and supplemental appropriations. Instances where appropriations are provided for a title's components in other parts of the bill (such as in general provisions or by transfer) are shown separately. Supplemental appropriations provided with an emergency designation for a given component in FY2018 are displayed after the subtotal of annual appropriations. Following the methodology used by the appropriations committees, totals of \"appropriations\" do not include resources provided by transfer or under adjustments to discretionary spending limits (i.e., for emergency requirements, overseas contingency operations for the Coast Guard or the cost of major disasters under the Stafford Act for the Federal Emergency Management Agency). Amounts covered by adjustments are included with discretionary appropriations in a separate total for \"discretionary funding.\" A subtotal for each component of total estimated budgetary resources that would be available under the legislation and from other sources (such as fees, mandatory spending, and trust funds) for the given fiscal year is also provided at the end of each component section. Totals at the bottom of each table indicate the total net discretionary appropriation for the title on its own, the total net discretionary funding from the annual appropriations bill and any supplemental appropriations (when such were provided), and the projected total estimated budgetary resources for each phase in the appropriations process shown in the table."], "subsections": []}, {"section_title": "Title I\u2014Departmental Management and Operations", "paragraphs": ["Title I, Departmental Management and Operations, the smallest of the component-specific titles, contains appropriations for the Office of the Secretary and Executive Management, the Management Directorate, Analysis and Operations (A&O), and the Office of the Inspector General (OIG). For FY2018, these components received $1.36 billion in net discretionary funding through the appropriations process, including $25 million in FY2018 supplemental appropriations.", "The Trump Administration requested $1.60 billion in FY2019 net discretionary funding for components included in this title. In addition, $24 million was requested as a transfer from the FY2019 appropriation for the Disaster Relief Fund to the OIG. Not including the transfer, the appropriations request was $241 million (17.7%) more than the amount provided for FY2018. Senate Appropriations Committee-reported S. 3109 included $1.47 billion in FY2019 net discretionary funding for the components funded in this title. This was $137 million (8.6%) less than requested by the Trump Administration and $103 million (7.6%) more than the amount provided for FY2018. S. 3109 included $72 million in discretionary budget authority drawn from unobligated prior-year balances from the DRF, but did not include the proposed transfer of FY2019 DRF resources to the OIG. As a result, the gross budgetary resources provided to components funded in Title I was $89 million (5.5%) less than the request, and $176 million (12.9%) more than provided in FY2018. House Appropriations Committee-reported H.R. 6776 included $1.48 billion in FY2019 net discretionary funding for the components funded in this title. This was $119 million (7.4%) less than requested by the Trump Administration and $122 million (8.9%) more than the amount provided for FY2018. H.R. 6776 , like the Senate committee-reported bill, did not include the proposed transfer of FY2019 DRF resources to the OIG. As a result, the gross budgetary resources provided to components funded in Title I were $143 million (8.8%) less than the request, and $122 million (8.9%) more than provided in FY2018. P.L. 116-6 included a total of $1.88 billion in FY2019 net discretionary funding for the components funded in this title. This included $51 million in a general provision for financial systems modernization, controlled by the management directorate. The total was $513 million (37.7%) more than was provided in FY2018, and $248 million (15.2%) more than was requested by the Administration, if one included the Administration's proposed transfer of $24 million from the Disaster Relief Fund to the Office of the Inspector General.", " Table 1 shows these comparisons in greater detail. As resources were requested or provided for the Management Directorate and Office of the Inspector General in some cases from outside Title I, separate lines are included for each of those components showing a total for what is provided solely within Title I, then the individual items funded outside the title, followed by the total annual appropriation for the components."], "subsections": []}, {"section_title": "Title II\u2014Security, Enforcement, and Investigations", "paragraphs": ["Title II, Security, Enforcement, and Investigations, contains appropriations for U.S. Customs and Border Protection (CBP), Immigration and Customs Enforcement (ICE), the Transportation Security Administration (TSA), the Coast Guard (USCG), and the U.S. Secret Service (USSS). Title II funding represents the majority of DHS's budget, comprising roughly three-quarters of the funding appropriated annually for the department.", "For FY2018, these components received $39.52 billion in net discretionary funding, as part of $47.13 billion in projected total budget authority. This included $1.06 billion in supplemental appropriations. ", "The Trump Administration formally requested $38.41 billion in FY2019 net discretionary funding for components included in this title, as part of a total budget request for these components of $47.08 billion for FY2019. The funding request was $45 million (0.1%) less than the amount provided for FY2018, setting aside FY2018 supplemental appropriations. Again setting aside FY2018 supplemental appropriations, the total resources proposed for FY2019 was $1.01 billion (2.2%) more than projected for FY2018. The Administration reportedly sought additional funding in this title for construction of border barriers, above the formally requested level. In January 2019, the acting director of the Office of Management and Budget sent a letter to congressional leaders officially seeking an additional $4.1 billion. Those amounts are not included in these comparative calculations or in the table below. Senate Appropriations Committee-reported S. 3109 included $38.68 billion in FY2019 net discretionary funding for the components funded in this title. This was $271 million (0.7%) more than formally requested by the Trump Administration and $227 million (0.6%) more than the amount provided for FY2018, setting aside FY2018 supplemental appropriations. The total budgetary resources projected under S. 3109 were $614 million (1.3%) less than the Administration's request (largely due to rejection of a proposed TSA fee increase), but $391 million (0.8%) more than projected for FY2018, again setting aside FY2018 supplemental appropriations. House Appropriations Committee-reported H.R. 6776 included $41.28 billion in FY2019 net discretionary funding for the components funded in this title. This was $2.87 billion (7.5%) more than formally requested by the Trump Administration and $2.82 billion (7.3%) more than the amount provided for FY2018, setting aside FY2018 supplemental appropriations. The total budgetary resources projected under H.R. 6776 were $2.08 billion (4.4%) more than formally requested by the Administration and $3.12 billion (6.8%) more than projected for FY2018, again setting aside FY2018 supplemental appropriations. H.R. 6776 would have provided $2.59 billion (6.7%) more than S. 3019 , largely due to the House Appropriations Committee recommending $3.35 billion more than its Senate counterpart for CBP's Border Security Assets and Infrastructure activity. P.L. 116-6 included $40.00 billion in net discretionary funding for the components funded in this title. The enacted annual appropriations were $1.59 billion (4.1%) more than requested, and $486 million (1.2%) more than the amount provided in FY2018. Setting aside FY2018 supplemental funding, FY2019 enacted net discretionary funding exceeded FY2018 levels by $1.55 billion (4.0%). The total budgetary resources projected for components funded in this title were $47.82 billion, $704 million (1.5%) more than was formally requested by the Administration, and $1.75 billion (3.8%) more than was provided in FY2018, setting aside the FY2018 supplemental funding.", " Table 2 shows these comparisons in greater detail. "], "subsections": []}, {"section_title": "Title III\u2014Protection, Preparedness, Response, and Recovery", "paragraphs": ["Title III, Protection, Preparedness, Response, and Recovery, contains appropriations for the Cybersecurity and Infrastructure Security Agency (CISA), the Office of Health Affairs (OHA), and the Federal Emergency Management Agency (FEMA). It is the second largest of the component-specific titles.", "For FY2018, these components received $7.22 billion in net discretionary appropriations and $7.37 billion in specially designated funding for disaster relief through the annual appropriations process. In addition to that annual funding, $58.23 billion was provided for FEMA in emergency supplemental appropriations in FY2018. Incorporating all these elements, the total net discretionary funding level for all Title III components was $72.61 billion for FY2018.", "The Trump Administration requested $6.19 billion in FY2019 net discretionary appropriations for components included in this title, and $6.65 billion in specially designated funding for disaster relief as part of a total net discretionary funding level for these components of $12.84 billion for FY2019. Setting aside the $58.23 billion in FY2018 supplemental appropriations, the appropriations request was $1.54 billion (10.7%) less than the amount provided for FY2018 in net discretionary funding. Senate Appropriations Committee-reported S. 3109 included $13.54 billion in FY2019 net discretionary funding for the components funded in this title. This was $694 million (5.4%) more than requested by the Trump Administration and $847 million (5.9%) less than the amount provided for FY2018, setting aside supplemental funding. The total budgetary resources projected would be $718 million (3.8%) more than the Administration's request, but $1.29 billion (6.2%) less than projected for FY2018, setting aside supplemental funding. The Senate committee-reported bill included within these totals the requested disaster relief funding of $6.65 billion, and offset $228 million in its Federal Assistance appropriation from unobligated DRF balances. House Appropriations Committee-reported H.R. 6776 included $13.70 billion in FY2019 net discretionary funding for the components funded in this title. This was $861 million (6.7%) more than requested by the Trump Administration and $681 million (4.7%) less than the amount provided for FY2018, setting aside supplemental funding. The total budgetary resources projected would be $885 million (4.7%) more than the Administration's request, but $1.13 billion (5.4%) less than projected for FY2018, setting aside supplemental funding. The House committee-reported bill included within these totals the requested disaster relief funding of $6.65 billion. P.L. 116-6 included $18.27 billion in FY2019 net discretionary funding for the components funded in this title. The enacted discretionary funding level was $5.43 billion (42.3%) more than requested, and $3.89 billion (27.1%) more than the amount provided for FY2018, setting aside the historically high level of supplemental appropriations. The total budgetary resources projected for FY2019 was $5.46 billion (29.0%) more than was requested, and $3.44 billion (16.5%) more than was projected for FY2018, setting aside FY2018 supplemental funding.", " Table 3 shows these comparisons in greater detail. As some annually appropriated resources were provided for FEMA from outside Title III in FY2018, a separate line is included for FEMA showing a total for what is provided solely within Title III, then the non-Title III appropriation, followed by the total annual appropriation for FEMA."], "subsections": []}, {"section_title": "Title IV\u2014Research and Development, Training, and Services", "paragraphs": ["Title IV, Research and Development, Training, and Services, the second smallest of the component-specific titles, contains appropriations for the U.S. Citizenship and Immigration Services (USCIS), the Federal Law Enforcement Training Center (FLETC), the Science and Technology Directorate (S&T), and the Domestic Nuclear Detection Office (DNDO). In FY2018, these components received $1.57 billion in net discretionary funding, as part of a projected total budget of $5.92 billion. This included $10 million in supplemental appropriations for FLETC. ", "The Trump Administration requested $1.53 billion in FY2019 net discretionary funding for components included in this title, as part of a total budget for these components of $6.11 billion for FY2018. The funding request was $36 million (2.3%) less than the amount provided for FY2018, setting aside supplemental appropriations, although the overall budget request was $201 million (3.3%) higher than the annual budget projected for FY2018 (again, setting aside supplemental funding). This is due to changes in anticipated fee collections for USCIS and reorganization of most of the Office of Health Affairs and DNDO into the new CWMD component reflected in the request. Senate Appropriations Committee-reported S. 3109 included $1.53 billion in net discretionary funding for components included in this title, as part of a projected total budget of $6.23 billion. This was $115 million (7.5%) more than requested, and $79 million (5.0%) less than the amount provided for FY2018, not including supplemental funding. The total budgetary resources projected under S. 3109 would have been $115 million (1.9%) more than the Administration's request, and $316 million (5.3%) more than projected for FY2018, setting aside supplemental funding. House Appropriations Committee-reported H.R. 6776 included $1.64 billion in net discretionary funding for components included in this title, as part of a projected total budget of $6.21 billion. This was $97 million (6.3%) more than requested, and $60 million (3.9%) more than the amount provided for FY2018, not including supplemental funding. The total budgetary resources projected under H.R. 6776 would have been $97 million (1.6%) more than the Administration's request, and $297 million (5.0%) more than projected for FY2018, setting aside supplemental funding. P.L. 116-6 included $1.62 billion in FY2019 net discretionary funding for the components funded in this title. Enacted FY2019 appropriations were $199 million (3.3%) more than was requested by the Administration, and $163 million (10.4%) more than was provided in FY2018, setting aside FY2018 supplemental funding. Total budgetary resources projected for FY2019 are $199 million (3.3%) more than were requested by the Administration, and $400 million (6.8%) more than was projected for FY2018, setting aside FY2018 supplemental funding.", " Table 4 shows these comparisons in greater detail."], "subsections": []}, {"section_title": "Title V\u2014General Provisions", "paragraphs": ["As noted above, the fifth title of the FY2019 DHS appropriations act contains general provisions, the impact of which may reach across the entire department, affect multiple components, or focus on a single activity. Rescissions of prior-year appropriations\u2014cancellations of budget authority that reduce the net funding level in the bill\u2014are found in this title. ", "For FY2018, Division F of P.L. 115-141 included $489 million in rescissions. For FY2019, the Administration proposed rescinding $300 million in prior-year funding from the DRF. S. 3109 included $137 million in rescissions from other appropriations, but specifically directed the $300 million the Administration had proposed rescinding from the DRF to other activities within DHS. H.R. 6776 did not include any rescissions, although an amendment from Representative Palazzo was passed in full committee markup on a voice vote redirecting unobligated balances from the Science and Technology Directorate to the Coast Guard. Division A of P.L. 116-6 included $303 million in rescissions, and a provision directing that $300 million of DRF unobligated balances be used to offset new DRF appropriations.", "In FY2018, funding was also included in Title V for the Financial Systems Modernization initiative and a grant program for Presidential Residence Protection costs, which are reflected in the tables for Title I and Title III, respectively, as those titles fund the components that manage these resources. For FY2019, Title V of S. 3109 only funded the Financial Systems Modernization initiative, and Title V of H.R. 6776 only funded Presidential Residence Protection costs. Title V of P.L. 116-6 , Division A, included funding for both the Financial Systems Modernization initiative and Presidential Residence Protection costs.", "The detail table in the back of H.Rept. 115-948 also notes the discretionary cost of several policy changes in H.R. 6776 . Four amendments adopted in House Appropriations Committee markup resulted in a net $13 million increase in the score of the bill, which is reflected in the detail table, but not in the tables of this report. No such costs are reflected in the detail table of H.Rept. 116-9 ."], "subsections": []}]}, {"section_title": "For Further Information", "paragraphs": ["For additional perspectives on FY2019 DHS appropriations, see the following:", "CRS Report R44604, Trends in the Timing and Size of DHS Appropriations: In Brief ; CRS Report R44052, DHS Budget v. DHS Appropriations: Fact Sheet ; and CRS Report R45262, Comparing DHS Component Funding, FY2019: In Brief . ", "Congressional clients also may wish to consult CRS's experts directly. The following table lists CRS analysts and specialists who have expertise in policy areas linked to DHS appropriations."], "subsections": [{"section_title": "Appendix. Appropriations Terms and Concepts", "paragraphs": ["Budget Authority, Obligations, and Outlays", "Federal government spending involves a multistep process that begins with the enactment of budget authority by Congress. Federal agencies then obligate funds from enacted budget authority to pay for their activities. Finally, payments are made to liquidate those obligations; the actual payment amounts are reflected in the budget as outlays.", "Budget authority is established through appropriations acts or direct spending legislation and determines the amounts that are available for federal agencies to spend. The Antideficiency Act prohibits federal agencies from obligating more funds than the budget authority enacted by Congress. Budget authority also may be indefinite in amount, as when Congress enacts language providing \"such sums as may be necessary\" to complete a project or purpose. Budget authority may be available on a one-year, multiyear, or no-year basis. One-year budget authority is available for obligation only during a specific fiscal year; any unobligated funds at the end of that year are no longer available for spending. Multiyear budget authority specifies a range of time during which funds may be obligated for spending, and no-year budget authority is available for obligation for an indefinite period of time.", "Obligations are incurred when federal agencies employ personnel, enter into contracts, receive services, and engage in similar transactions in a given fiscal year\u2014which create a legal requirement for the government to pay. Outlays are the funds that are actually spent during the fiscal year. Because multiyear and no-year budget authorities may be obligated over a number of years, outlays do not always match the budget authority enacted in a given year. Additionally, budget authority may be obligated in one fiscal year but spent in a future fiscal year, especially with certain contracts.", "In sum, budget authority allows federal agencies to incur obligations and authorizes payments, or outlays, to be made from the Treasury. Discretionary funded agencies and programs, and appropriated entitlement programs, are funded each year in appropriations acts.", "Discretionary and Mandatory Spending", "Gross budget authority , or the total funds available for spending by a federal agency, may be composed of discretionary and mandatory spending. Discretionary spending is not mandated by existing law and is thus appropriated yearly by Congress through appropriations acts. The Budget Enforcement Act of 1990 defines discretionary appropriations as budget authority provided in annual appropriations acts and the outlays derived from that authority, but it excludes appropriations for entitlements. Mandatory spending , also known as direct spending , consists of budget authority and resulting outlays provided in laws other than appropriations acts and is typically not appropriated each year. Some mandatory entitlement programs, however, must be appropriated each year and are included in appropriations acts. Within DHS, Coast Guard retirement pay is an example of appropriated mandatory spending.", "Offsetting Collections", "Offsetting funds are collected by the federal government, either from government accounts or the public, as part of a business-type transaction such as collection of a fee. These funds are not considered federal revenue. Instead, they are counted as negative outlays. DHS net discretionary budget authority , or the total funds appropriated by Congress each year, is composed of discretionary spending minus any fee or fund collections that offset discretionary spending.", "Some collections offset a portion of an agency's discretionary budget authority. Other collections offset an agency's mandatory spending. These mandatory spending elements are typically entitlement programs under which individuals, businesses, or units of government that meet the requirements or qualifications established by law are entitled to receive certain payments if they establish eligibility. The DHS budget features two mandatory entitlement programs: the Secret Service and the Coast Guard retired pay accounts (pensions). Some entitlements are funded by permanent appropriations, and others are funded by annual appropriations. Secret Service retirement pay is a permanent appropriation and, as such, is not annually appropriated. In contrast, Coast Guard retirement pay is annually appropriated. In addition to these entitlements, the DHS budget contains offsetting Trust and Public Enterprise Funds. These funds are not appropriated by Congress. They are available for obligation and included in the President's budget to calculate the gross budget authority.", "302(a) and 302(b) Allocations", "In general practice, the maximum budget authority for annual appropriations (including DHS) is determined through a two-stage congressional budget process. In the first stage, Congress sets overall spending totals in the annual concurrent resolution on the budget. Subsequently, these totals are allocated among the appropriations committees, usually through the statement of managers for the conference report on the budget resolution. These amounts are known as the 302(a) allocations . They include discretionary totals available to the House and Senate Committees on Appropriations for enactment in annual appropriations bills through the subcommittees responsible for the development of the bills.", "In the second stage of the process, the appropriations committees allocate the 302(a) discretionary funds among their subcommittees for each of the appropriations bills. These amounts are known as the 302(b) allocations . These allocations must add up to no more than the 302(a) discretionary allocation and form the basis for enforcing budget discipline, since any bill reported with a total above the ceiling is subject to a point of order. The 302(b) allocations may be adjusted during the year by the respective appropriations committee issuing a report delineating the revised suballocations as the various appropriations bills progress toward final enactment. No subcommittee allocations are developed for conference reports or enacted appropriations bills.", " Table A-1 shows comparable figures for the 302(b) allocation for FY2018, based on the adjusted net discretionary budget authority included in Division F of P.L. 115-141 , the President's request for FY2019, and the House and Senate subcommittee allocations for the Homeland Security appropriations bills for FY2019.", "The Budget Control Act, Discretionary Spending Caps, and Adjustments", "The Budget Control Act established enforceable discretionary limits, or caps, for defense and nondefense spending for each fiscal year from FY2012 through FY2021. Subsequent legislation, including the Bipartisan Budget Act of 2013, amended those caps. Most of the budget for DHS is considered nondefense spending. ", "In addition, the Budget Control Act allows for adjustments that would raise the statutory caps to cover funding for overseas contingency operations/Global War on Terror, emergency spending, and, to a limited extent, disaster relief and appropriations for continuing disability reviews and control of health care fraud and abuse. ", "Three of the four justifications outlined in the Budget Control Act for adjusting the caps on discretionary budget authority have played a role in DHS's appropriations process. Two of these\u2014emergency spending and overseas contingency operations/Global War on Terror\u2014are not limited.", "The third justification\u2014disaster relief\u2014is limited. Under the Budget Control Act, the allowable adjustment for disaster relief was determined by the Office of Management and Budget (OMB), using the following formula until FY2019:", "Limit on disaster relief cap adjustment for the fiscal year = Rolling average of the disaster relief spending over the last ten fiscal years (throwing out the high and low years) + the unused amount of the potential adjustment for disaster relief from the previous fiscal year.", "The Bipartisan Budget Act of 2018 amended the above formula, increasing the allowable size of the adjustment by adding 5% of the amount of emergency-designated funding for major disasters under the Stafford Act, calculated by OMB as $6.296 billion. The act also extended the availability of unused adjustment capacity. In August 2018, OMB released a sequestration update report for FY2019 that provided a preview estimate of the allowable adjustment for FY2019 of $14.965 billion \u2014the second-largest allowable adjustment for disaster relief in the history of the mechanism. $12 billion of that adjustment was exercised in P.L. 116-6 , Division A, in appropriations for the Disaster Relief Fund. No other annual appropriations used the disaster relief adjustment for FY2019. "], "subsections": []}]}]}}
{"id": "R45696", "title": "Forest Management Provisions Enacted in the 115th Congress", "released_date": "2019-04-17T00:00:00", "summary": ["The 115th Congress enacted several provisions affecting management of the National Forest System (NFS), administered by the Forest Service (in the Department of Agriculture), and the lands managed by the Bureau of Land Management (BLM, in the Department of the Interior). The provisions were enacted through two laws: the Stephen Sepp Wildfire Suppression Funding and Forest Management Activities Act, enacted as Division O of the Consolidated Appropriations Act, 2018 (P.L. 115-141, commonly referred to as the FY2018 omnibus), and the Agricultural Improvement Act of 2018 (P.L. 115-334, Title VIII, commonly referred to as the 2018 farm bill).", "Many of the provisions enacted by the 115th Congress affect Forest Service and BLM implementation of two laws: the National Environmental Policy Act (NEPA), and the Healthy Forests Restoration Act (HFRA). These laws, among others, authorize specific forest management activities and establish decisionmaking procedures for those activities. The enacted provisions are summarized and analyzed in the following categories: project planning and implementation, wildland fire management, forest management and restoration programs, and miscellaneous. Ongoing issues for Congress include oversight of (i) the agencies' implementation of the new laws, and (ii) the extent these provisions achieve their specified purposes, such as improving agency efficiencies, increasing the scale, scope, and implementation of forest restoration projects, and reducing hazardous fuel levels to mitigate against the risk of catastrophic wildfire.", "Both the FY2018 omnibus and 2018 farm bill included provisions that affect Forest Service and BLM decisionmaking processes by changing certain aspects of the NEPA process and the interagency consultation requirements established in Section 7 of the Endangered Species Act (ESA). For example, each law specified that certain forest management projects would be considered actions categorically excluded from the requirements of NEPA. Also, both laws expanded various authorities originally authorized in HFRA intended to expedite decisionmaking for specific projects. This included reauthorizing the use of procedures intended to expedite priority projects in designated NFS insect and disease treatment areas and amending the definition of an authorized fuel reduction project to include additional activities.", "The FY2018 omnibus and 2018 farm bill also contained provisions that affect federal wildland fire management. The FY2018 omnibus directed the Secretary of Agriculture to adapt the national-scale wildfire hazard potential map for use at the community level to inform risk management decisions. Both laws directed Forest Service and DOI to provide annual reports on a variety of wildfire-related metrics. The FY2018 omnibus also changed how Congress appropriates funding specifically for wildfire suppression purposes. The so-called wildfire funding fix authorized an adjustment to the discretionary spending limits for wildfire suppression operations for each year from FY2020 through FY2027. However, statutory spending limits are set to expire after FY2021, meaning that the adjustment is effectively in place for two years.", "Congress has established specific forest restoration programs for Forest Service and BLM, or has authorized forest restoration to be one of many activities or land management objectives for some programs. Forest restoration activities address concerns related to forest health, such as improving forest resistance and resilience to disturbance events (e.g., insect and disease infestation or uncharacteristically catastrophic wildfires). The 115th Congress established two new programs for Forest Service (water source protection and watershed condition framework) and amended three others: the Collaborative Forest Landscape Restoration Program (CFLRP, available only for Forest Service), stewardship contracting authority, and the good neighbor authority. Aspects of several of these programs allow Forest Service and BLM to partner with various stakeholders in different ways to perform specified forest management and restoration activities.", "Both the FY2018 omnibus and the 2018 farm bill enacted various other provisions related to land acquisition, exchange and disposal; the issuance of special use authorizations for the use or occupancy of federal lands; the payments, activities, and Resource Advisory Committees authorized by the Secure Rural Schools and Community Self-Determination Act; and forest management on tribal lands."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction1", "paragraphs": ["This report summarizes and analyzes selected forest management provisions enacted in the 115 th Congress and compares them with prior law or policy. These provisions were enacted through two legislative vehicles", "The Stephen Sepp Wildfire Suppression Funding and Forest Management Activities Act, enacted as Division O of the Consolidated Appropriations Act, 2018 ( P.L. 115-141 , commonly referred to as the FY2018 omnibus) and signed into law on March 23, 2018. The Agricultural Improvement Act of 2018 ( P.L. 115-334 , Title VIII), signed into law on December 20, 2018. This law is commonly referred to as the 2018 farm bill.", "Both laws included provisions that address forest management through three general perspectives: (1) management of forested federal land, (2) federal programs to support forest management on nonfederal lands, known as forest assistance programs , and (3) programs to promote or conduct forestry research (to benefit both federal and nonfederal forests). This report focuses primarily on the provisions related to management of forested federal land. The federal forest management provisions change how the Forest Service (FS, within the Department of Agriculture (USDA)) and the Bureau of Land Management (BLM, within the Department of the Interior (DOI)) manage their lands. FS is responsible for managing the 193 million acres of the National Forest System (NFS), and BLM manages 246 million acres of public lands under its jurisdiction. ", "This report begins with background information on the NFS and BLM's public lands and an overview of two laws: the National Environmental Policy Act (NEPA), and the Healthy Forests Restoration Act (HFRA). These laws, among others, authorize specific forest management activities and establish procedures relevant to the respective agency's decisionmaking processes for those activities. The 115 th Congress enacted provisions that affect how FS and BLM implement those activities and procedural requirements. ", "The report summarizes and analyzes the provisions in the following categories: project planning and implementation, wildland fire management, forest management and restoration programs, and miscellaneous. Within each of those categories, the report broadly discusses relevant issues, summarizes the changes made in the 115 th Congress, and discusses potential issues for Congress related to that category. Some provisions or sections are covered in more depth than others, generally reflecting the complexity of the issue, nature of the enacted changes, or level of congressional interest. A separate section at the end of the report discusses overall issues for Congress. The Appendix contains side-by-side tables comparing all of the forest-related provisions in each law to prior law (including provisions related to forestry assistance programs and forestry research). "], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "National Forest System", "paragraphs": ["Approximately 145 million acres of the 193-million-acre NFS consists of forests and woodlands. Congress directed that management of the national forests shall be to protect watersheds and forests and provide a \"continuous supply of timber for the use and necessities of citizens of the United States\" and authorized the sale of \"dead, matured, or large growth of trees.\" Congress added recreation, livestock grazing, energy and mineral development, and protection of wildlife and fish habitat as official uses of the national forests, in addition to watershed protection and timber production, in the Multiple-Use Sustained-Yield Act of 1960 (MUSY). Pursuant to MUSY, management of the resources is to be coordinated for multiple use \u2014considering the relative values of the various resources but not necessarily maximizing dollar returns or requiring that any one particular area be managed for all or even most uses\u2014and sustained yield , meaning maintaining a high level of resource outputs in perpetuity without impairing the productivity of the land. ", "The National Forest Management Act of 1976 (NFMA) requires FS to prepare and update comprehensive land and resource management plans (also referred to as forest plans ) for each NFS unit. NFMA, as amended, specifies that the plans must be developed and revised with public involvement. Plans, like all discretionary actions taken by the FS, must also comply with any cross-cutting laws that apply broadly to all federal agency actions. This includes compliance with NEPA, as well as Section 7 of Endangered Species Act (ESA), and Section 106 of the National Historic Preservation Act (NHPA), among others. Each forest plan broadly describes a range of desired resource conditions across the specified NFS unit but does not authorize individual projects or specific on-the-ground actions. ", "Projects are the on-the-ground actions that implement the forest plan prepared for that site. These may include activities such as timber harvests, watershed restoration, trail maintenance, and hazardous fuel reduction, among many others. Projects must be consistent with the resource objectives established in the forest plans. These projects must be planned, evaluated, and implemented using FS procedures intended to ensure compliance with applicable requirements (e.g., NEPA, ESA, NHPA). The timing and scope of review for a given project may vary based on the specific statutory authority underpinning each project's implementation, the types of resources that could be affected at the site, and the level of those potential effects."], "subsections": []}, {"section_title": "Bureau of Land Management Public Lands", "paragraphs": ["BLM manages 246 million acres of public lands, primarily in the western United States. Approximately 38 million acres of those public lands are woodlands and forests. The public lands\u2014forested and otherwise\u2014are managed under the principles of multiple use and sustained yield, as directed by the Federal Land Policy and Management Act (FLPMA). These principles are similar to those that govern the NFS. The 2.6 million acres of Oregon and California Railroad (O&C) Lands and Coos Bay Wagon Road (CBWR) Lands in western Oregon, however, are forested lands managed under a statutory direction for permanent forest production under the principle of sustained yield and with the purposes of providing timber, protecting watersheds, providing recreational opportunities, and contributing to the economic stability of the local communities. Similar to the requirements applicable to FS decisionmaking, FLPMA directs BLM to prepare and maintain comprehensive resource management plans and to revise them as necessary. Any proposed on-the-ground activities or projects must be consistent with those plans and must be planned, evaluated, and implemented using BLM's procedures for ensuring compliance with the laws that apply broadly to any federal agency action (e.g., NEPA, ESA, NHPA)."], "subsections": []}, {"section_title": "National Environmental Policy Act (NEPA)14", "paragraphs": ["Broadly, NEPA requires federal agencies to identify the environmental impacts of a proposed action before making a final decision about that action. How a federal agency demonstrates compliance with NEPA depends on the level of the proposal's impacts. A proposed action that would significantly affect the \"quality of the human environment\" requires the preparation of an environmental impact statement (EIS) leading to a Record of Decision. If the impacts are uncertain, an agency may prepare an environmental assessment (EA) to determine whether an EIS is necessary, or whether a finding of no significant impact (FONSI) may be issued through a Decision Notice. For actions that require an EA or EIS, an agency generally must evaluate the impacts of the proposed action and reasonable alternatives to it, including the alternative of taking no action (i.e., a no-action alternative ). The analysis included in the EIS or EA/FONSI is used to inform the agency's decisionmaking process regarding the proposal.", "Under NEPA implementing regulations, categorical exclusions (CEs) refer broadly to categories of actions that do not individually or cumulatively have a significant effect on the environment and hence are excluded from the requirement to prepare an EIS or an EA. FS and BLM have identified CEs based on each agency's past experience with similar actions. Some CEs have been explicitly established in statute by Congress, as discussed in the \" Statutorily Established NEPA CEs \" section of this report. Individual agencies also may determine whether or what additional documentation may be required for a CE. In its list of CEs, FS distinguishes between actions that generally do not require any further documentation and those that generally require the preparation of a decision memorandum as part of an administrative record supporting the decision to approve the proposal as a CE. ", "In their agency-specific procedures implementing NEPA, each federal agency has identified and listed actions it is authorized to approve that normally require an EIS, or an EA resulting in a FONSI, or that can be approved using a CE. FS and BLM regulations also provide for and identify the resource conditions in which a normally excluded action may have the potential for a significant environmental effect and warrant further analysis in an EA or EIS. The presence of these resource conditions is termed extraordinary circumstances. For example, FS has identified the presence of flood plains, municipal watersheds, endangered species or their habitat, wilderness areas, inventoried roadless areas, and archaeological sites, among others, as potential extraordinary circumstances that may preclude the use of a CE for an otherwise eligible project. ", "As commonly implemented, the process of identifying potential environmental impacts pursuant to NEPA serves as a framework to identify any other environmental requirements that may apply to that project as a result of those impacts. In this way, an agency's procedures to implement NEPA may serve as an umbrella compliance process. For example, within the framework of determining the resources affected and level of effects of a given proposal, the agency's NEPA process would identify project impacts that may trigger additional environmental review and consultation requirements under ESA and NHPA, among other laws. If compliance with NEPA was waived for a given category of action, the requirements triggered by impacts to those resources under other federal laws would still apply. "], "subsections": []}, {"section_title": "Healthy Forests Restoration Act (HFRA)", "paragraphs": ["HFRA, among other purposes, was intended to expedite the planning and review process for hazardous fuel reduction and forest restoration projects on NFS and BLM lands. Hazardous fuel reduction projects are intended to reduce the risk of catastrophic wildfire by removing or modifying the availability of biomass (e.g., trees, shrubs, grasses, needles, leaves, and twigs) that fuel a wildland fire through a variety of methods and measures. ", "HFRA defined specific hazardous fuel reduction projects and authorized an expedited planning and review process for those projects. The authorization is available to be used for projects covering up to a cumulative total of 20 million acres of federal land. HFRA defined several other relevant terms, some of which are summarized below", "At-Risk Community : an area that is comprised of an interface community as defined in the notice published in 66 Federal Register 753, or a group of homes and other structures with basic infrastructure and services within or adjacent to federal land, and an area in which conditions are conducive to a large-scale wildland fire disturbance event and for which a significant threat to human life or property exists as a result of significant wildland fire disturbance event. Authorized H azardous F uels R eduction P roject s (HFRA P rojects) : methods and measures for reducing hazardous fuels including prescribed fire, wildland fire use, and various mechanical methods (e.g., pruning or thinning, which is the removal of small-diameter trees to produce commercial and pre-commercial products). Fire R egimes and C ondition C lasses : terms used to describe the relative change between the historical frequency and intensity of fire patterns across a vegetated landscape to the current fire patterns. These terms are used to prioritize and assess hazardous fuel reduction projects. For a complete definition, see the shaded text box and Figure 1 . Wildland-Urban Interface (WUI) : an area within or adjacent to an at-risk community with a community wildfire protection plan (CWPP), or an area within a specified distance to an at-risk community without a CWPP and with specified characteristics (e.g., steep slopes).", "HFRA projects may be conducted in the WUI; on specified areas within a municipal watershed and with moderate or significant departure from the historical fire regimes (see shaded text box); on wind-, ice-, insect-, or disease-damaged land, or land at risk of insect or disease damage; or on lands with threatened and endangered species habitat threatened by wildfire. HFRA explicitly excluded projects that would occur on designated wilderness areas, wilderness study areas, or areas that otherwise prohibit vegetation removal by an act of Congress or presidential proclamation. Also, HFRA projects must be consistent with the land and resource management plan in place for the area. Certain covered projects \u2014basically, any HFRA project except those in response to or anticipation of wind, ice, insect, or disease damage\u2014must focus on thinning, prescribed fire, or removing small-diameter trees to modify fire behavior, while maximizing large or old-growth tree retention (if retention promotes fire resiliency).", "HFRA also directed FS to establish a pre-decisional administrative review process\u2014referred to as an objection process\u2014for proposed HFRA projects. The review is called pre-decisional because HFRA explicitly requires objections to be filed within 30 days of the agency's publication of the draft decision documents associated with the proposed project (e.g., a draft Decision Notice and final EA, or draft Record of Decision and final EIS). Objections are limited to parties that submitted specific comments during the comment periods and may only be on issues raised within those comments. If no comments were received on a project, no objections will be accepted. HFRA also set forth requirements for judicial review. If the objector is still not satisfied with the agency's decision after the administrative review (i.e., objections) process has been exhausted, the next step is judicial review in federal court. However, only issues that were raised during the public comment period and the pre-decisional administrative review process may be considered during judicial proceedings, unless significant new issues arise after the conclusion of the administration review. ", "Congress later directed FS to replace the post-decisional administrative appeals process used for non-HFRA projects with the pre-decisional objection process used by HFRA projects. As a result, all FS projects fall under the same pre-decisional objection process, although there are some differences between HFRA and non-HFRA projects. For example, the Chief of the Forest Service may declare a non-HFRA project an emergency situation and proceed directly to implementation after the publication of the decision document."], "subsections": []}, {"section_title": "HFRA Insect and Disease Designation Areas", "paragraphs": ["The Agricultural Act of 2014 (the 2014 farm bill) added a new Section 602 to HFRA and authorized the establishment of landscape-scale insect and disease treatment areas within the NFS, by state, as requested by the state governor and then designated by the Chief of the Forest Service. To be eligible for this insect and disease treatment area designation, the NFS area must be experiencing declining forest health based on annual forest health surveys, at risk of experiencing substantial tree mortality over the next 15 years, or in an area in which hazard trees pose an imminent risk to public safety. In total, FS has designated approximately 74.5 million acres nationwide (see Figure 2 ). (Hereinafter this report refers to these designated areas as I&D areas . )", "The act specified that FS may prioritize projects that reduce the risk or extent of, or increase the resilience to, insect or disease infestations within the I&D areas. The act further specified that such projects initiated prior to the end of FY2018 are to be considered hazardous fuel reduction projects pursuant to HFRA. Thus, these projects also are subject to HFRA's pre-decisional objections process; must be developed through a collaborative process with state, local, and tribal government collaboration and participation of interested persons; consider the best available science; and maximize the retention of old-growth and large trees, as appropriate for the forest type and to the extent it would promote insect and disease resiliency. Also pursuant to HFRA, projects planned within the WUI require the analysis of the proposed action and one action alternative during the preparation of an EA or EIS. If the proposed action is within 1.5 miles to an at-risk community, then only analysis of the proposed action is required (i.e., the no-action alternative does not need to be analyzed). For projects outside of the WUI, the no-action alternative must also be considered.", "In sum, Congress authorized FS to identify eligible NFS areas for designation as I&D areas, prioritize projects in those designated areas, and plan and implement those projects through a potentially expedited process. In some states, all eligible lands were designated. In those states, the expedited project planning procedures are thus broadly available, but any prioritization benefit is effectively nullified. ", "As of March, 2019, FS reports 206 projects across 59 national forests and 18 states have been proposed under these authorities. Of those, FS evaluated or is evaluating 20 using the EA analysis procedures and three using an EIS. The remaining 183 projects are being processed or were processed using a CE, described below."], "subsections": [{"section_title": "2014 Farm Bill Insect and Disease NEPA Categorical Exclusion (CE)", "paragraphs": ["The 2014 farm bill also added a new Section 603 to HFRA, which specified in statute that certain projects intended to reduce the risk or extent of insect or disease infestations within I&D areas would be considered actions categorically excluded from the requirements of NEPA (commonly referred to as the F arm B ill CE ). (The 2018 farm bill added hazardous fuels projects as a priority project category eligible to be implemented through the CE, discussed in the \" Planning and Project Implementation Requirements \" section). The law specified that these projects are exempt from the pre-decisional administrative review objections process. ", "To be eligible for the 2014 Farm Bill CE, projects must either ", "1. comply with the eligibility requirements of the Collaborative Forest Landscape Restoration Program (CFLRP), or 2. consider the best available science; maximize the retention of old-growth and large trees, as appropriate for the forest type and to the extent that it would promote insect and disease resiliency; and be developed through a collaborative process that is transparent and nonexclusive, or which meets specified requirements. ", "Projects may not establish any new permanent roads, and any temporary roads must be decommissioned within three years of the project's completion. However, maintenance and repairs of existing roads may be performed as needed to implement the project. Projects cannot exceed 3,000 acres. The projects must be located within designated I&D areas. In addition, projects may be located within the WUI, or outside of the WUI but in areas classified as Condition Classes 2 or 3 in Fire Regime Group I, II, or III, as defined by HFRA. FS policy is to document its decision on a proposal using the Farm Bill CE through a decision memorandum, after determining whether resource conditions at the site result in any extraordinary circumstances subject to further review and consultation."], "subsections": []}]}]}, {"section_title": "Planning and Project Implementation Requirements", "paragraphs": ["The FY2018 omnibus and the 2018 farm bill both changed certain FS and BLM planning and project implementation requirements. For example, both laws expanded various HFRA authorities", "The FY2018 omnibus (\u00a7203) amended HFRA to expand the definition of an authorized fuel reduction project to include the installation of fuel breaks (e.g., measures that change fuel characteristics in an attempt to modify the potential behavior of future wildfires) and fire breaks (e.g., natural or constructed barriers to stop, or establish an area to work to stop, the spread of a wildfire). Thus, projects to build fuel or fire breaks may be planned and implemented using the procedures authorized under HFRA, such as requiring analysis of a specific number of alternatives depending on the proposed action's location. The 2018 farm bill reauthorized (through FY2023) the use of the procedures intended to expedite priority projects in I&D areas. It also added projects to reduce hazardous fuels as a priority project category (\u00a78407(b)). This means that hazardous fuels reduction projects may be planned and implemented using the Farm Bill CE, if those actions are located within I&D areas and meet the other eligibility requirements.", "In addition, both the FY2018 omnibus and the 2018 farm bill each established a new statutory NEPA CE. The 2018 farm bill also included provisions affecting the interagency consultation requirements under the Endangered Species Act (ESA). These changes are each discussed in the following sections."], "subsections": [{"section_title": "Statutorily Established NEPA CEs", "paragraphs": ["Both laws established new statutory CEs intended to expedite the planning and implementation of specific projects. The FY2018 omnibus established a CE for wildfire resilience projects, which is effectively available only for FS. The 2018 farm bill established a CE for projects related to greater sage grouse or mule deer habitat, which is available to both FS and BLM. The provisions of each CE share some similarities with the Farm Bill CE (see Table 1 for a side-by-side comparison of the three CEs). ", "It is difficult to assess the potential impact of these new CEs, either on the pace of project planning and implementation or on various forest management goals. Both of the statutory CEs\u2014as well as the 2014 Farm Bill CE\u2014allow FS (and BLM, as applicable) to plan for larger projects (up to 3,000 to 4,500 acres) through a CE. Some say larger project sizes\u2014with or without a CE\u2014will allow FS to achieve landscape-level goals more efficiently. Some also contend that using a CE for the environmental review will allow FS to proceed from project planning to project implementation at a faster pace, improving agency efficiency. For example, a 2014 Government Accountability Office (GAO) report found that FS took an average of 177 days to complete CEs, compared with 565 days to complete EAs, in FY2012. That same GAO report found that from FY2008 to FY2012, FS used CEs less frequently and the process took longer to complete compared with other agencies. However, the analysis period occurred before Congress authorized the Farm Bill CE, and it is possible that FS trends have since changed. In contrast, others are concerned that conducting landscape-scale projects without more detailed environmental reviews and documentation, or implementing projects of additional types and larger areas through CEs, may lead to undesirable resource effects. "], "subsections": [{"section_title": "Wildfire Resilience CE", "paragraphs": ["Section 202 of the FY2018 omnibus added a new Section 605 to HFRA and established a Wildfire Resilience CE for specified hazardous fuel reduction projects. The Wildfire Resilience CE is similar to the Farm Bill CE. Projects must be located within designated I&D areas on NFS lands. FS policy is to document the decision to use the Farm Bill CE through a decision memo, after determining if there are any extraordinary circumstances present that could have a significant environmental effect, as specified in the statute and consistent with FS regulations. ", "Eligible projects must either ", "1. comply with the CFLRP eligibility requirements, or 2. maximize the retention of old-growth and large trees to the extent that the trees promote resiliency; consider best available science; and be developed through a collaborative process that is transparent and nonexclusive, or which meets specified requirements. ", "Projects may not establish any new permanent roads, and temporary roads must be decommissioned within three years of project completion. However, maintenance and repairs of existing roads may be performed as needed to implement the project. Projects cannot exceed 3,000 acres. In addition to being located within I&D areas, the law specifies that projects located within the WUI are prioritized, but projects may be located outside the WUI if they are located in areas classified as Condition Class 2 or 3 in Fire Regime groups I, II, or III that contain very high wildfire hazard potential. The law further requires the Secretary to submit an annual report on the use of the CEs authorized under this section to specified congressional committees and GAO. FS reports that seven projects were proposed using the authority in FY2018.", "Many of the same location and purpose requirements for projects planned under the 2014 Farm Bill CE are required for projects that could be planned and implemented under the Wildfire Resilience CE (see Table 1 ). For example, both CEs require projects to be located within designated I&D areas. Both CEs also require projects located outside of the WUI to be in the same specified fire regime condition classes, but the Wildfire Resilience CE also specifies that those projects should be located in areas that also contain very high wildfire hazard potential. In addition, the Wildfire Resilience CE specifies that projects located within the WUI should be prioritized; the Farm Bill CE does not include that prioritization. The Wildfire Resilience CE is available only for specified hazardous fuels reduction projects, while the Farm Bill CE is also available for projects to address insect and disease infestation. In the Wildfire Resilience CE, Congress explicitly directed FS to apply its procedures for evaluating if the resource conditions identified as extraordinary circumstances are present on the project site, and if the presence of those extraordinary circumstances may thus preclude the use of the CE and require further analysis of potential impacts through an EA or EIS. Although similar legislative language was not included, FS must still also assess if there are extraordinary circumstances present that may preclude the use of the Farm Bill CE (and all other CEs)."], "subsections": []}, {"section_title": "Sage Grouse/Mule Deer CE", "paragraphs": ["Section 8611 of the 2018 farm bill directs the Secretary of Agriculture, for NFS lands, and the Secretary of the Interior, for BLM lands, to establish a CE for specified projects to protect, restore, or improve greater sage-grouse and/or mule-deer habitat within one year of enactment. It also specifies requirements for applying the CE. Projects must protect, restore, or improve habitat in a sagebrush steppe ecosystem for either species, or concurrently for both species if the project is located in both mule deer and sage-grouse habitat. Projects must be consistent with the existing resource management plan and for projects on BLM lands, comply with DOI Secretarial Order 3336. The law also described the specific activities that may be part of a project, such as removal of juniper trees, cheat grass, and other nonnative or invasive vegetation; targeted use of livestock grazing to manage vegetation; and targeted herbicide use, subject to applicable legal requirements. Projects may not occur in designated wilderness areas, wilderness study areas, inventoried roadless areas, or any area where the removal of vegetation is restricted or prohibited. Projects may not include any new permanent roads, but may repair existing permanent roads. Temporary roads shall be decommissioned within three years of project completion, or when no longer needed. Projects may not be larger than 4,500 acres. On NFS lands, projects may occur only within designated I&D areas. The law directs each agency to apply its respective extraordinary circumstances procedures in determining whether to use the CE. In addition, the law directs the agencies to consider the relative efficacy of landscape-scale habitat projects, the likelihood of continued population declines in the absence of landscape-scale vegetation management, and the need for habitat restoration. The agencies must also develop a 20-year monitoring plan prior to using the CE. ", "This CE has some basic similarities to the other two CEs\u2014such as requirements for projects to be developed through a collaborative process\u2014but the project purposes and requirements differ significantly (see Table 1 )."], "subsections": []}]}, {"section_title": "Endangered Species Act Section 7 Consultation Requirements57", "paragraphs": ["The Endangered Species Act (ESA) has a stated purpose of conserving species identified as endangered or threatened with extinction and conserving ecosystems on which these species depend. It is administered primarily by the Fish and Wildlife Service (FWS, in DOI) for terrestrial and freshwater species, but also by the National Marine Fisheries Service (NMFS, in the Department of Commerce) for certain marine species. Under the ESA, individual species of plants and animals (both vertebrate and invertebrate) can be listed as either endangered or threatened according to assessments of the risk of their extinction. Once a species is listed, a set of prohibitions applies to the species. The ESA provides federal agencies with an opportunity to gain an exemption from the prohibitions under certain circumstances.", "Federal agencies must ensure that their actions\u2014or the actions of nonfederal parties granted a federal approval, permit, or funding\u2014are \"not likely to jeopardize the continued existence\" of any endangered or threatened species, or adversely modify their critical habitat. The federal agencies must consult with either FWS or NMFS if such an action might adversely affect a listed species as determined by the Secretary of the Interior or the Secretary of Commerce. This is referred to as a Section 7 consultation . Where a federal action is dictated by statute, a Section 7 consultation is not required, as it applies to only discretionary actions.", "If the appropriate Secretary finds that an action would neither jeopardize a species nor adversely modify the critical habitat of that species, the Secretary issues a biological opinion (BiOp) to that effect. The BiOp specifies the terms and conditions under which the federal action may proceed to avoid jeopardy or adverse modification of critical habitat. Alternatively, if the proposed action is judged to jeopardize listed species or adversely modify critical habitat, the Secretary must suggest any reasonable and prudent alternatives that would avoid harm to the species. The great majority of consultations result in \"no jeopardy\" opinions, and nearly all of the rest find that the project has reasonable and prudent alternatives, which will permit it to go forward."], "subsections": [{"section_title": "Summary of Changes and Discussion", "paragraphs": ["The FY2018 omnibus enacted changes to how the Section 7 consultation requirements interact with the development of land and resources management plans for the NFS and for the O&C and CBWR lands managed by the BLM in Oregon (\u00a7\u00a7208, 209). The law specifies that the listing of a species as threatened or endangered or the designation of critical habitat pursuant to the ESA does not require the Secretary of Agriculture (for NFS lands) or the Secretary of the Interior (for the O&C and CBWR lands) to engage in Section 7 consultation to update or revise a forest plan, unless the plan is older than 15 years and 5 years has passed since either the date of enactment or the listing of the species, whichever is later. The law further specifies, however, that this does not affect the requirements for Section 7 consultation for projects implementing forest plans or for plan updates or amendments.", "The changes in the FY2018 omnibus are controversial, because some argue that they set a new precedent for implementing ESA. According to some, the provisions were needed to override a decision by the Ninth Circuit Court of Appeals that required FS to conduct re-consultation on its land management plans after critical habitat was designated for the Canada lynx. Those in favor of the enacted changes contend that not requiring Section 7 consultations for existing land management plans due to a species listing or designation of critical habitat will provide more flexibility in implementing plans, allow for consistency in keeping the plans in place, and enable plan and project implementation to proceed with fewer delays. The exceptions in the law would allow for changes in plans after a certain time, thereby reflecting changes to listed species and their critical habitat. ", "Those opposed to these provisions contend that not allowing for consultation or re-consultation to take place due to changes in listing species and critical habitat could negatively affect species if plans prescribe harmful activities and are allowed to be kept in place. In addition, some contend that the time lag before consultation is required could be long enough to harm species and negatively affect their habitat. Proponents of the change, however, note that projects under a plan are still required to undergo consultation, thereby making the consultation of the plan redundant. However, critics of the provision contend that plans address projects and activities at a higher level and could influence the cumulative effect of all projects and activities under the plan."], "subsections": []}]}]}, {"section_title": "Wildland Fire Management", "paragraphs": ["The federal government's wildland fire management responsibilities\u2014fulfilled primarily by FS and DOI\u2014include fuel reduction, preparedness, prevention, detection, response, suppression, and recovery activities. The FY2018 omnibus and 2018 farm bill contained provisions that changed how Congress appropriates funding specifically for wildfire suppression purposes, added specific requirements for wildfire risk mapping (part of preparedness), and added specific reporting requirements. This section provides some background information on wildland fire appropriations and then discusses those changes in more detail. The laws also changed aspects of FS and DOI's hazardous fuel reduction programs. This included reauthorizing the use of procedures intended to expedite the priority projects in NFS areas designated as I&D areas and expanding the definition of an authorized fuel reduction project, as discussed previously in the \" Planning and Project Implementation Requirements \" section. ", "Congress provides discretionary appropriations for wildland fire management to both FS and DOI through the Interior, Environment, and Related Agencies appropriations bill. Funding for DOI is provided to the department, which then allocates the funding to the Office of Wildland Fire and four agencies\u2014BLM, the Bureau of Indian Affairs, the National Park Service, and the U.S. Fish and Wildlife Service. Within FS's and DOI's respective Wildland Fire Management (WFM) account, funding is provided to the Suppression Operations program to fund the control of wildfires that originate on federal land. This includes firefighter salaries, equipment, aviation asset operations, and incident support functions in direct support of wildfire response, plus personnel and resources for post-wildfire response programs. If their suppression funding is exhausted during a fiscal year, FS and DOI are authorized to transfer funds from their other accounts to pay for suppression activities; this is often referred to as fire borrowing . ", "Overall appropriations to FS and DOI for wildland fire management have increased considerably since the 1990s. A significant portion of that increase is related to rising suppression costs, even during years of relatively mild wildfire activity, although the costs vary annually and are difficult to predict. FS and DOI frequently have required more suppression funds than have been appropriated to them. This discrepancy often leads to fire borrowing, prompting concerns that increasing suppression spending may be detrimental to other agency programs. In response, Congress has typically enacted supplemental appropriations to repay the transferred funds and/or to replenish the agency's wildfire accounts. Wildfire spending\u2014like all discretionary spending\u2014is currently subject to procedural and budgetary controls. In the past, Congress has sometimes\u2014but not always\u2014effectively waived some of these controls for certain wildfire spending. This situation prompted the 115 th Congress to explore providing wildfire spending outside of those constraints, as discussed below."], "subsections": [{"section_title": "Suppression Spending: Wildfire Funding Fix", "paragraphs": ["In the FY2018 omnibus, the 115 th Congress established a new mechanism for suppression funding, commonly referred to as the wildfire funding fix (\u00a7102(a)). Pursuant to the Budget Control Act of 2011 (BCA), discretionary spending currently is subject to statutory limits for each of the fiscal years between FY2012 and FY2021. Enacted discretionary spending may not exceed these limits. If spending that exceeds a limit is enacted, the limit is to be enforced through sequestration, which involves the automatic cancellation of budget authority largely through across-the-board reductions of nonexempt programs and activities. Certain spending is effectively exempt from the discretionary spending limits pursuant to Section 251(b) of the Balanced Budget and Emergency Deficit Control Act (BBEDCA), because those limits are \"adjusted\" upward each year to accommodate that spending. Spending for specified emergency requirements and disaster-relief purposes falls into this category. Section 102(a)(3) of the FY2018 omnibus amended BBEDCA to add a new adjustment to the nondefense discretionary spending limit for wildfire suppression operations. This new adjustment starts in FY2020 and continues for each year thereafter through FY2027. For the purposes of the adjustment, wildfire suppression operations includes spending for the purposes of ", "the emergency and unpredictable aspects of wildland firefighting, including support, response, and emergency stabilization activities; other emergency management activities; and funds necessary to repay any transfers needed for these costs.", "The new adjustment would apply to appropriations provided above an amount equal to the 10-year average spending level for wildfire suppression operations as calculated for FY2015 (\"FY2015 baseline\"). That is, an amount equal to the FY2015 baseline would be subject to the statutory discretionary limits, and then any additional funding appropriated would be considered outside the limits and would be the amount of the adjustment. The amount of the adjustment is capped each fiscal year, starting at $2.25 billion in FY2020 and increasing by $0.1 billion ($100 million) to $2.95 billion in FY2027. ", "Whatever amount, if any, Congress elects to appropriate for wildfire suppression over the FY2015 baseline ($1.39 billion combined) effectively would not be subject to the discretionary spending limits established in the BCA for FY2020 and FY2021, up to the specified maximum. For example, in FY2020, Congress could appropriate the minimum FY2015 baseline of $1.39 billion for suppression operations, as requested by the agencies. This amount would be subject to the BCA discretionary limits. But then Congress could appropriate up to an additional $2.25 billion in FY2020, effectively outside of the discretionary limits. This means the agencies could be appropriated up to $3.64 billion in total in FY2020, for the same discretionary budget \"score\" as $1.39 billion. For context, FS and DOI combined received $2.05 billion for suppression purposes in FY2019 ($1.67 billion for FS; $388 million for DOI). Over the past 5 years, FS and DOI combined received $2.16 billion annually on average ($1.74 billion for FS; $428 million for DOI).", "The enactment of the wildfire funding fix potentially removes some budget process barriers to providing additional wildfire suppression funds, at least for FY2020 and FY2021. This is because the BCA statutory limits for discretionary spending are only in effect until FY2021. If new limits are statutorily established for any year between FY2022 through FY2027, then the wildfire adjustment would still be applicable. If no new limits are enacted, though, the wildfire adjustment would no longer apply. ", "It is also unclear if Congress would continue to provide the fire borrowing authority to the agencies once the wildfire adjustment is in effect starting in FY2020. Section 103 of the FY2018 omnibus requires the applicable Secretary, in consultation with the Director of the Office of Management and Budget (OMB), to \"promptly\" submit a request to Congress for supplemental appropriations if the amount provided for wildfire suppression operations for a fiscal year is estimated to be exhausted within 30 days. This provision would give Congress notice of the likely need for additional funding but would require additional action from Congress to ensure the agencies have access to funds to enable continued federal services in response to wildfires. ", "The wildfire funding fix raises several potential concerns for Congress. As one example, FS did not report its 10-year suppression obligation for FY2020 since suppression appropriations are now tied to the FY2015 baseline (DOI reported its 10-year obligation average to be $403 million). This may raise concerns related to accountability and oversight of suppression spending. Another concern may be that the FY2015 baseline and the annual adjustment limits are not tied to any inflationary factors. Further, the wildfire funding fix is a temporary procedural change for how Congress funds suppression operations and does not address a variety of other concerns related to suppression costs, such as improving suppression cost forecasting, evaluating the effectiveness of suppression methods, or addressing any of the drivers of increasing suppression costs, among other concerns broadly related to wildland fire management."], "subsections": []}, {"section_title": "Wildfire Hazard Potential Maps", "paragraphs": ["The Fire Modeling Institute, part of FS's Rocky Mountain Research Station, developed a Wildfire Hazard Potential (WHP) index and map to help inform strategic planning and fuel management decisions at a national scale (see Figure 3 ). Using vegetation, fuels, wildfire likelihood, wildfire intensity, and past wildfire location data, the WHP is an index that reflects the relative potential for a wildfire to occur that would then be difficult to suppress or contain. Based on this data, FS estimates that approximately 226 million acres of land in the continental United States are classified at high or very high WHP. Of those lands identified at high or very high WHP, 120 million acres (53%) are federal land (58 million acres of NFS lands and 62 million acres of DOI lands), and the remaining 106 million acres (47%) are state, tribal, other public, or private lands. According to the index, high or very high WHP reflects fuels that have a higher probability of experiencing extreme fire behavior given certain weather conditions. The WHP data, when paired with appropriate spatial data, can approximate the relative wildfire risk to resources and assets identified from that data. ", "The FY2018 omnibus directs FS to pair the WHP with the appropriate spatial data and scale for community use. Specifically, Section 210 directs FS to consult with federal and state partners, and relevant colleges and universities to develop, within two years, web-based wildfire hazard severity maps for use at the community level to inform risk management decisions for at-risk communities adjacent to NFS lands or affected by wildland fire. "], "subsections": []}, {"section_title": "Reporting", "paragraphs": ["Both the FY2018 omnibus and the 2018 farm bill require FS and BLM to submit reports to Congress on specified topics related to wildland fire management. Specifically, the FY2018 omnibus requires the Secretary of Agriculture (for FS) or the Secretary of the Interior to submit an annual report within 90 days after the end of a fiscal year in which the wildfire funding fix is used. The omnibus also establishes requirements for the report components (\u00a7104). The first possible report will be required by December 30, 2021, if the wildfire adjustment is used in the first possible year (FY2020). The Secretaries are to prepare the reports in consultation with the OMB Director. The report is to be available to the public and submitted to the House Committees on Appropriations, the Budget, and Natural Resources and the Senate Committees on Appropriations, the Budget, and Energy and Natural Resources. The report shall document the use of the wildfire funding fix (e.g., specific funding obligations and outlays) and overall wildland fire management spending, analyzed by fire size, costs, regional location, and other factors. The report also shall identify the \"risk-based factors\" that influenced suppression management decisions and describe any lessons learned. In addition, the law specified that the report shall include an analysis of a \"statistically significant sample of large fires\" across a variety of measures, including but not limited to: cost drivers and analysis, effectiveness of fuel treatments on fire behavior and suppression costs, and the impact of investments in preparedness activities, among others. ", "The 2018 farm bill also requires the Secretaries of Agriculture and the Interior to jointly compile and submit a report to Congress on wildfire, insect infestation, and disease prevention on federal land (\u00a78706). The report must be submitted to the House Committee on Agriculture, House Committee on Natural Resources, Senate Committee on Agriculture, Nutrition, and Forestry, and Senate Committee on Energy and Natural Resources. The first report is due within 180 days of enactment of the farm bill (it is due on June 20, 2019) and then annually thereafter. The agencies shall report on the ", "number of acres of federal land treated for wildfire, insect and infestation, and disease prevention; number of acres of federal land categorized as high or extreme fire risk; number of acres and average intensity of wildfires affecting federal land both treated and not treated for wildfire, insect infestation, or disease prevention; federal response time for each fire greater than 25,000 acres; total timber production on federal land; number of miles of roads and trails in need of maintenance; maintenance backlog for roads, trails, and recreational facilities on federal land; other measures needed to maintain, improve or restore water quality on federal land; and other measures needed to improve ecosystem function or resiliency on federal land."], "subsections": []}]}, {"section_title": "Forest Management and Restoration Programs85", "paragraphs": ["Forest restoration activities seek to establish or reestablish the composition, structure, pattern, and ecological processes and functioning necessary to facilitate resilience and resistance to disturbance events (e.g., insect or disease infestation, catastrophic wildfire, ice or windstorm). For example, forest restoration may include activities such as removing small-diameter trees (called thinning ) to reduce tree density, potentially mitigating against the spread of some insect or disease infestations. Or, forest restoration may include prescribed fire to reduce the building up of understory vegetation or biomass, to mitigate the potential for a wildfire to increase in intensity and severity, and to facilitate post-fire recovery. ", "BLM's authority to conduct restoration projects is derived primarily from FLPMA. FS's authority is derived primarily from its responsibilities to: ", "protect the NFS from destruction as specified in the Organic Administration Act of 1897; manage the national forests for multiple use and sustained yield as specified in MUSY; and maintain forest conditions designed to secure the maximum benefits and provide for a diversity of plant and animal communities as specified in the Forest and Rangeland Renewable Resources Planning Act of 1974, as amended by NFMA.", "Congress also has authorized specific forest restoration programs for FS and BLM, or has authorized forest restoration to be one of many activities or land management objectives for other programs. ", "The 115 th Congress established two new programs for FS (watershed condition framework and water source protection), and amended three existing programs: the Collaborative Forest Landscape Restoration Program (CFLRP, available only for FS), stewardship contracting authority, and the good neighbor authority. Among other provisions, aspects of these programs allow FS and BLM to partner with various stakeholders in different ways to identify forest restoration needs and perform specified forest management and restoration activities. These programs are elements of the FS's \"Shared Stewardship\" approach to address land management concerns at a landscape-scale and across ownership boundaries. These programs are generally perceived as offering opportunities to accelerate forest restoration to mitigate against insect and disease infestations or reduce the risk of catastrophic wildfires to federal lands and surrounding communities. In addition, proponents point to other potential benefits to the surrounding communities, such as providing forest products to support local industries, promoting new markets for restoration by-products (e.g., small diameter trees, woody biomass), and fostering collaboration. These programs are generally supported by many stakeholders, although some have raised concerns about specific aspects of each program."], "subsections": [{"section_title": "Collaborative Forest Landscape Restoration Program (CFLRP)", "paragraphs": ["Title IV of the Omnibus Public Lands Management Act of 2009 ( P.L. 111-11 ) established the CFLRP to select and fund the implementation of collaboratively developed restoration proposals for priority forest landscapes. The collaboration process must include multiple interested persons representing diverse interests and must be transparent and nonexclusive, or meet the requirements for Resource Advisory Committees (RACs, as specified by the Secure Rural Schools and Community Self-Determination Act (SRS)). Priority forest landscapes must be at least 50,000 acres and must consist primarily of NFS lands in need of restoration, but may include other federal, state, tribal, or private land within the project area. In addition, the proposal area should be accessible by wood-processing infrastructure. Proposals must incorporate the best available science, and include projects that would maintain or contribute to the restoration of old-growth stands, and restoration treatments that would reduce hazardous fuels, such as thinning small-diameter trees. The proposals may not include plans to establish any new permanent roads, and any temporary roads must be decommissioned. The law requires the publication of an annual accomplishments report and submission of 5-year status reports to specified congressional committees.", "The law authorized the Secretary of Agriculture to select and fund up to 10 proposals for any given fiscal year, but also gave the Secretary the discretion to limit the number of proposals selected based on funding availability. FS has selected and funded 23 proposals since the program was established in FY2010. Each selected proposal includes a range of individual projects to implement the proposal's forest restoration goals over the specified time period of the funding commitment . The law established a fund to pay for up to 50% of the costs to implement and monitor proposal projects, and authorizes up to $40 million in annual appropriations to the fund through FY2019. Each selected proposal can receive a funding commitment of up to $4 million per year for up to 10 years to fund project implementation, but appropriations from the fund may not be used to cover any costs related to project planning. The program received $40 million annually in appropriations from FY2014 through FY2019. ", "CFLRP is generally perceived as successful, achieving progress towards the specified land management objectives as well as contributing to local economies and fostering collaboration. Agen cy staff found the dedicated funding commitment to be one of the most valuable aspects of the program, providing long-term stability and predictability for project implementation and coordination. Some may note, however, that this funding commitment may direct resources away from NFS lands in areas not covered by selected projects. While the program provide s some economic benefits, some fe el it f a ll s short in fostering new markets for smaller-scale wood products or reducing treatment costs. In addition, while the program is generally perceived as improving relationship s with community stakeholders and fostering collaboration, some note that much of the collaboration ha d focused on relatively simple and non controversial issues and ha d not made progress towards resolving more complex or controversial issues. "], "subsections": [{"section_title": "Summary of Changes and Discussion", "paragraphs": ["Section 8629 of the 2018 farm bill reauthorized the program, and authorized up to $80 million in appropriations annually through FY2023. The law authorized the Secretary of Agriculture to issue a one-time waiver to extend the funding commitment to an existing project for up to an additional 10 years, subject to the project continuing to meet the specified eligibility criteria. The law also added the House and Senate Committees on Agriculture as recipients of the five-year program status reports.", "The funding commitment for the 23 selected proposals is set to expire at the end of FY2019 , so the reauthorization and extension of eligibility could result in some projects continuing beyond that initial time-frame . In addition, i f Congress chooses to appropriate to the new authorization level, it could also result in more projects being selected and funded. "], "subsections": []}]}, {"section_title": "Good Neighbor Authority", "paragraphs": ["The 2014 farm bill authorized FS and BLM to enter into good neighbor agreements (GNAs) with state governments. The program was initially authorized as a temporary pilot on NFS land in Colorado in 2001, before the permanent authorization made it available nationwide for all NFS lands as well as BLM lands. ", "Under an approved GNA, states are authorized to do restoration work on NFS and BLM public lands. The authorized restoration services include treating insect- and disease-infested trees, reducing hazardous fuels, and any other activities to restore or improve forest, rangeland, and watershed health. This could include activities such as fish and wildlife improvement projects, commercial timber removal, and tree planting or seeding, among others. The law prohibited treatments in designated wilderness areas, wilderness study areas, or areas where removal of vegetation is prohibited. The 2014 farm bill authorization did not include construction, reconstruction, repair, or restoration of paved or permanent roads, and did not specify any special treatment for any revenue generated through the sale of wood products from the federal lands. While states may perform the work, FS and BLM retain the responsibility to comply with all applicable federal laws regarding federal decisionmaking, including NEPA, as well as approving and marking any silvicultural prescriptions. ", "Generally, a Master Agreement (MA) between the state and FS or BLM outlines the general scope of the GNA, and serves as an umbrella for Supplemental Project Agreements (SPAs). SPAs are tiered to the MA and outline the specific terms and conditions for project implementation. FS reports that they have executed 48 MAs in 33 states and 105 SPAs in 28 states, covering 82 national forests. While many of the GNAs are broad in scope\u2014allowing for the full suite of authorized activities\u2014they typically have a primary emphasis on a specific project type or purpose. This includes timber production (42%), wildlife or fisheries (18%), hazardous fuels management (16%), and other or unspecified activities (19%).", "The good neighbor authority is generally perceived as successful, particularly in terms of enhancing state-federal relationships and performing cross boundary restoration work. Other benefits include leveraging state resources, although funding and other resource capacity varied across participating states. Some states reported concerns related to the uncertainty of sustained future GNA work, however. "], "subsections": [{"section_title": "Summary of Changes and Discussion", "paragraphs": ["Both the FY2018 omnibus and the 2018 farm bill enacted changes to the good neighbor authority. The FY2018 omnibus authorized GNA forest restoration activities to include road construction, reconstruction, repair, restoration, or decommissioning activities on defined NFS roads, and as necessary to implement authorized forest restoration services (\u00a7212). The 2018 farm bill expanded the availability of GNAs to include federally recognized Indian tribes and county governments (\u00a78624). The farm bill further specified that, through FY2023, funds received by a state through the sale of timber under a GNA shall be retained and used by the state on additional GNA projects. In addition, the farm bill further specified that any payment made by a county to the relevant Secretary under a project conducted pursuant to a GNA is not subject to any applicable revenue-sharing laws. ", "The expansion of GNA to tribes and county governments has the potential to increase the use of the authority significantly. This may result in increased opportunities for achieving cross-boundary restoration work, as well as leveraging additional nonfederal resources. However, it is also possible that it increases administrative demands on FS or BLM, such as contract administration, project planning, or oversight of project implementation. Other concerns may include the distribution of receipts from the sale of timber or other wood products. Some may prefer to have the revenue from GNA projects subject to revenue-sharing with county governments. "], "subsections": []}]}, {"section_title": "Stewardship Contracting", "paragraphs": ["Stewardship end-result contracting (stewardship contracting) was established as a temporary pilot program by the Department of the Interior and Related Agencies Appropriations Act of 1999, and was extended multiple times, through 2013. The 2014 farm bill made the authority permanent. This authority allows FS and BLM to enter into multi-year (up to 10 years), dual service and timber sale contracts or agreements to achieve specified land management goals on the lands within their jurisdiction. This means that FS and BLM may combine a timber sale contract (in which the federal government sells the right to harvest federal timber) with a service contract (in which the federal government hires an entity to perform various service activities, such as removing brush and small diameter trees). By combining the two contract types, the agencies can use the value of the harvested timber to offset the cost of service activities (i.e., trade goods for services). The specified land management goals include objectives such as restoring or maintaining water quality through road and trail maintenance or obliteration, improving forest health and reducing fire hazards, increasing soil productivity, restoring and maintaining watersheds, restoring and maintaining fish and wildlife, and reestablishing native plant species. ", "FS and BLM can deposit any timber sale revenue exceeding the cost of contracted services (referred to as excess revenue) in their respective Stewardship Contracting Fund. FS and BLM may use the funds on other stewardship projects without further appropriation. The law authorized contracts to be awarded on a best-value basis, meaning FS and BLM may consider past performance, proposal quality, and other factors in addition to cost, and allows FS and BLM to give procurement preference for contractors making innovative use of wood products. FS and BLM are required to submit annual reports on the development, execution, administration, and accomplishments of stewardship contracts. ", "Stewardship contracting is generally perceived favorably among stakeholders. The agencies report increased opportunities for accomplishing more restoration goals and improving collaborative relationships. Other stakeholders report economic benefits, such as contributions to local economic activity or improved certainty in the development of new markets for woody biomass and other restoration by-products, although some may contend that more certainty or market support is needed. In addition, some might report concern that that there may be a higher than appropriate incentive to remove large or high value\u2014but ecologically important\u2014trees to pay for more service work, or other issues related to program implementation. There may also be concern related to the distribution of receipts from stewardship contracts, as some may prefer to maintain the revenue-sharing requirements with county governments.", "Other concerns include the amount of up-front financial obligations required and the perceived slow pace of implementation. The initial implementation of the stewardship contracting was difficult to assess due in part to the complexity of integrating the different contract types and a lack of reliable record-keeping. After that initial period, however, the agencies began integrating their respective contracting systems, improving record-keeping, and offering more contracts annually, covering larger areas. However, a 2015 USDA Office of Inspector General (OIG) report found issues with FS' contract administration and record-keeping related to stewardship contracts. Specifically, the OIG report found FS did not consistently comply with applicable procurement requirements by clearly defining the evaluation factors used when awarding contracts. FS published new guidance in 2016, partially in response to the findings of the report."], "subsections": [{"section_title": "Summary of Changes and Discussion", "paragraphs": ["The FY2018 omnibus made several changes to the stewardship contracting authority (\u00a7\u00a7204-207). In Section 207, the FY2018 omnibus authorized FS and BLM to enter into 20-year stewardship contracts or agreements, if the majority of the federal lands are located in areas classified in Fire Regime Groups I, II, and III. The law also authorized the Secretary to give a procurement preference to a contractor that promotes an innovative use of forest products as part of the contract. In addition, the law authorized FS and BLM to include a cancellation ceiling when entering stewardship contracts. FS and BLM may obligate funds for cancellation ceilings in stages which are economically or programmatically viable. The law further authorized the use of excess revenues to pay for any outstanding liabilities associated with cancelled contracts. Congressional notification is required if FS or BLM intend to enter a stewardship contract or agreement with a cancellation ceiling higher than $25 million without proposed funding for the costs of canceling the contract. ", "The cancellation ceiling provision allows FS and BLM to obligate funds for cancellation ceilings in stages, rather than obligating funds up-front when the contract is entered. This has the potential of resolving concerns related to those up-front financial obligations, and the ability to use excess revenue to offset costs also has potential benefits. Both the use of 20-year stewardship contracts in certain locations and procurement preference may provide for increased market certainty for forest products industries and allow for continued innovation in the use of forest restoration by-products. It is unclear if there are any potential drawbacks to the expanded time-frame."], "subsections": []}]}, {"section_title": "Watershed Condition Framework", "paragraphs": ["The protection of watersheds is one of the authorized uses of the NFS, and as such is an authorized activity or goal of many FS programs. As part of a regular program review, OMB cited inadequacies in FS's watershed programs in a 2006 assessment report. The report cited lack of adequate water quality data and performance measures and an inconsistent national approach to prioritize watershed management on NFS lands as areas of concern. As part of the improvement plan developed from the assessment, FS committed to developing long-term, outcome-based performance measures; generating better water quality, habitat, and biological data; and developing and implementing a strategy to make watersheds a priority for management activities as the basis for program allocations. As part of this effort, FS developed a Watershed Condition Framework (WCF) to classify watershed conditions across the NFS, identify priority watersheds, and develop restoration action plans. FS classified and prioritized watersheds by 2011, began to develop watershed restoration action plans in 2013, and began to implement projects to achieve the goals described in those plans soon thereafter. A 2017 USDA OIG report found inadequacies in FS' management and implementation of the WCF program, such as inadequate coordination and oversight at the national level, inadequate methodologies for record-keeping generally and specifically in regard to monitoring project costs and performance towards watershed restoration."], "subsections": [{"section_title": "Summary of Changes and Discussion", "paragraphs": ["Section 8405 of the 2018 farm bill codified the WCF program in statute, assigned specific program responsibilities, and provided guidance on program priorities. More specifically, the law authorized the Secretary of Agriculture, through the Chief of the Forest Service, to establish a WCF for NFS land. Under the framework, FS may evaluate and classify watershed conditions and establish the assessment criteria (e.g., water quality and quantity, aquatic habitat, vegetation, soil condition, among others). FS may identify up to five priority watersheds in each national forest (and two in each national grassland) for protection and restoration. In addition, FS may develop, implement, and monitor restoration action plans, in coordination with interested nonfederal landowners and other governments, to prioritize protection and restoration activities on those priority watersheds and to achieve the desired watershed conditions. The law also authorizes an emergency designation process to prioritize a watershed for rehabilitation if wildfire has had significant impact on a watershed and post-fire stabilization activities have not returned the watershed to \"proper function.\" "], "subsections": []}]}, {"section_title": "Water Source Protection", "paragraphs": ["Watershed protection generally\u2014and water source protection specifically\u2014is one of the authorized uses of the NFS. Water source protection as such is an authorized activity or goal of many FS programs. As one example, the Secretary of Agriculture is authorized to enter into cooperative agreements for watershed restoration and enhancement purposes with willing federal, tribal, state and local governments, private and nonprofit entities and landowners. If the Secretary determines that the expenditure of federal funds is in the public interest, then the federal government may share the costs of implementing the agreement with the nonfederal partners. The watershed restoration and enhancement purposes include activities such as improving fish, wildlife, and other resources on NFS lands within the watershed. "], "subsections": [{"section_title": "Summary of Changes and Discussion", "paragraphs": ["The 2018 farm bill amended HFRA and authorized the Secretary of Agriculture to establish a specific Water Source Protection program on NFS land (\u00a78404). This authorizes FS to enter into multi-year water source investment partnership agreements with nonfederal partners to protect and restore NFS watersheds that serve as sources of municipal water. In cooperation with those nonfederal partners, FS may develop a water source management plan to describe proposed watershed protection and restoration projects. As part of those projects, FS shall carry out forest management activities to protect a municipal water supply and/or restore forest health from insect infestations and disease. The law authorizes FS to conduct a single environmental analysis pursuant to NEPA for the development or finalization of the water source management plan or for each project proposed pursuant to a plan. The law authorizes FS to accept and use cash, in-kind donations, services, and other forms of investment and assistance from partners\u2014directly or through the National Forest Foundation\u2014to implement the water source management plan; the law also specifies that contributions must be in amounts equal to the federal funding, and establishes a Water Source Protection Fund to match the partner donations. Congress authorized $10 million in annual appropriations to the Fund through FY2023."], "subsections": []}]}]}, {"section_title": "Miscellaneous Provisions", "paragraphs": ["Both the FY2018 omnibus and the 2018 farm bill enacted various other provisions related to federal forest land, such as designating NFS lands as part of the National Wilderness Preservation System. Other miscellaneous provisions are related to land acquisition, exchange and disposal; the issuance of special use authorizations for the use or occupancy of federal lands; Secure Rural Schools Act payments, activities, and Resource Advisory Committees; and forest management on tribal lands. "], "subsections": [{"section_title": "Wilderness Designations", "paragraphs": ["Section 8626 of the 2018 farm bill designated one new wilderness area and expanded five existing areas in NFS lands Tennessee. Specifically, the Upper Bald River Wilderness was established on the Cherokee National Forest, covering approximately 9,038 acres. Just over 10,500 acres were designated as additions to existing wilderness areas on the Cherokee National Forest: Big Frog (348 acres), Big Laurel Branch (4,446 acres), Joyce Kilmer-Slickrock Wilderness (1,836 acres), Little Frog Mountain (966 acres across two additions), and Sampson Mountain (2,922 acres). The law specified that the areas are to be managed in accordance with the Wilderness Act. This means that most commercial activities, motorized access and use, and other activities are prohibited within the designated areas, subject to valid existing rights. "], "subsections": []}, {"section_title": "Land Acquisition, Exchange, and Disposal", "paragraphs": ["Both the FY2018 omnibus and 2018 farm bill enacted provisions that would change how FS and/or BLM acquire, exchange, or dispose of federal land. These provisions established, reauthorized, or modified specific authorities. For example, Section 8623 of the 2018 farm bill established a new program authorizing the Secretary of Agriculture to lease up to 10 isolated and undeveloped parcels for administrative sites, at market value through cash or in-kind consideration. Section 302 of the FY2018 omnibus reauthorized an expired program to sell or exchange BLM lands identified for disposal and use the proceeds to acquire lands for administrative purposes (Federal Land Transaction Facilitation Act). The 2018 farm bill also reauthorized an expired program: the Forest Service Facility Realignment and Enhancement program, which authorized the conveyance of administrative sites or the conveyance of up to 10 undeveloped parcels of up to 40 acres of NFS land (\u00a78504). The program expired in FY2016, but was reauthorized for FY2019 through FY2023. Section 8621 of the 2018 farm bill modified an existing FS program (Small Tracts Act) by expanding the eligibility requirements, among other provisions. In addition, the 2018 farm bill contained several other provisions authorizing exchanges or sales for specifically identified parcels and sometimes to specifically identified entities (\u00a7\u00a78625, 8627, 8628, 8631, and 8707). (See the tables in Appendix for more specific information). "], "subsections": []}, {"section_title": "Rights-of-Way (ROW) and Special Use Authorization Provisions129", "paragraphs": ["The Secretary of the Interior and the Secretary of Agriculture are authorized to issue rights-of-way (ROW) for the use and occupancy of BLM and NFS lands, respectively (these are sometimes referred to as special use authorizations for FS). The rights-of-way allow for the specific use of those federal lands for numerous purposes. Among other activities, these purposes also generally include issuing linear rights-of-way authorizing access \"over, upon, under, or through\" the specified lands for facilities and systems for : various types of water infrastructure ; infrastructure for the storage, transportation , or distribution of liquids , gases (with specified exceptions), and solid materials ; electricity generation, transmission, and distribution infrastructure ; communication systems infrastructure ; roads, trails, highways, canals, tunnels and other means of transportation in general; and other \"necessary\" systems and facilities which are in the public interest.", "FS and BLM charge cost-recovery fees for processing and monitoring applications as well as an annual land use rental fee. The processing and monitoring fees are generally based on the estimated number of hours it will take the agency to process the application (or renewal) and monitor the activity to ensure compliance with the authorization. There is a general rental fee schedule for linear ROWs, based on land value, and a separate rental fee schedule for communication uses, based on the type of communication use and population served. BLM and FS use the same schedule for the processing and monitoring fees and the same land use rental fee schedules for linear ROWs and communication sites.", "The 115 th Congress enacted provisions directing FS to update their process and fee schedule for issuing special use authorizations for communication sites, directed FS and BLM to issue new regulations for certain activities within electricity ROWs, and also established a similar pilot process for FS for many of the same activities within utility (defined as electricity, natural gas infrastructure, or related infrastructure) ROWs. In some cases, these provisions are related to concerns about wildfire ignitions within electricity transmission and distribution ROWs. For example, power line ignitions are associated with fires that burn across larger areas. This is in part due to weather conditions (e.g., wind) causing vegetation (e.g., tree limbs) to come into increasing contact with power lines. ", "Some have asserted that confusing or burdensome administrative processes prevent ROW permit-holders from conducting necessary maintenance activities (e.g., vegetation management) to mitigate the risk of ignitions on the federal lands within their ROWs. In contrast, others have placed more of the responsibility on the permit holders. The 115 th Congress provisions are perceived by some as potentially improving the processes for ROW permit holders to obtain approvals and implement vegetation management projects on federal lands. Others may acknowledge that process improvements could facilitate improved land conditions but are concerned about the appropriate balance between expediting project implementation and maintaining accountability and adherence to the laws regarding federal lands. ", "Some of the provisions specify the responsibilities for wildfire suppression costs for wildfires ignited within ROWs, costs associated with other damages, or place a cap on liability costs for ROW permit holders. Some are concerned with the breadth of these provisions and the potential implications for the federal government or others bearing a disproportionate share of the costs to suppress wildfires ignited within a ROW on federal lands. Others contend that the provisions limiting damages and liability will incentivize prompt agency action on maintenance requests from ROW permit holders and also reflect that utilities should not be responsible for the full costs of a wildfire\u2014regardless of ignition point or cause\u2014because past agency actions have contributed to the increased fuel levels surrounding ROWs. Further, others contend that limiting unexpected costs for the utilities would reduce the likelihood of passing on those costs to the ratepayers. "], "subsections": [{"section_title": "Forest Service Communication Uses Fee Schedules and Processes", "paragraphs": ["Section 8705 of the 2018 farm bill directed the Secretary of Agriculture to issue regulations revising the process to issue special use authorizations for communications uses on NFS lands within one year of enactment, defined relevant terms, and identified specific requirements for the process. Among other provisions, the law specified that: the new process must be streamlined, uniform, and standardized across the NFS to the extent practicable; FS must consider and grant applications on a competitively neutral, technology neutral, and nondiscriminatory basis; and the lease terms must be for a minimum of 15 years. The law also specified that the regulations must establish a fee structure based on the cost of processing and monitoring applications and approvals, and established a new account in the Treasury for the FS to deposit and use those fees for specified activities related to managing communication sites, subject to appropriations. Such activities include preparing needs assessments or programmatic analyses relating to communications sites or use authorizations, developing management plans and training for management of communication sites, and obtaining or improving access to communication sites."], "subsections": []}, {"section_title": "Electricity Transmission and Distribution ROWs", "paragraphs": ["Section 211 of the FY2018 omnibus amended FLPMA and established a new Section 512, titled Vegetation Management, Facility Inspection, and Operation and Maintenance on Federal Land Containing Electric Transmission and Distribution Facilities . The law directed FS and BLM to issue guidance for planning and implementing vegetation management, facility inspections, and operation and maintenance activities within electric transmission and distribution ROWs and identified specific requirements for those processes. The guidance must describe the process for FS and BLM to review, approve, and modify plans for vegetation management, facility inspections, and operation and maintenance activities submitted by eligible ROW permit holders (referred to as \"owners\"). The law specifies the components of the plans, authorizes owners to develop and submit those plans for approval by the appropriate Secretary and conduct activities within their ROW pursuant to an approved plan. The law also specifies circumstances when owners may conduct certain management activities without an approved plan or without the approval of FS or BLM (e.g., when trees are in imminent danger of touching a power line). FS and BLM are also directed to identify any applicable NEPA categorical exclusions for these activities. The law directed the Secretaries to propose regulations implementing the provisions within one year of enactment and to finalize the regulations within two years. Section 211 also encouraged FS and BLM to develop training programs for FS and DOI employees on vegetation management and the electrical transmission and distribution system.", "The FY2018 omnibus also specified ROW permit holder liabilities related to vegetation management activities in the ROW, including addressing the relationship between permit holder liability and the plan's approval status. For ten years after enactment, the law prohibits the applicable Secretary from imposing strict liability for damages or injury greater than $500,000 resulting from activities conducted by a ROW holder pursuant to a plan under certain conditions. Those conditions include the Secretary concerned unreasonably withholding or delaying plan approval or failing to adhere to an applicable schedule in an approved plan. Within four years of the enactment, FS and BLM must report the impacts of the liability clauses to Congress. "], "subsections": []}, {"section_title": "Forest Service Utility ROW Pilot Program", "paragraphs": ["Section 8630 of the 2018 farm bill established a pilot program, through FY2023, for utility ROW permit holders on NFS land, excluding national grasslands and land utilization projects and established specific requirements for the pilot program. The law defined utility ROWs to include electric transmission lines, natural gas infrastructure, or related infrastructure. Under the pilot program, participating permit holders may develop and implement vegetation management plans, subject to FS approval, for the NFS lands within their ROWs. Pursuant to those plans, pilot participants may also pay for and perform projects on specified NFS lands within and up to 75 feet from the ROW. Participants must adhere to FS and some state regulations regarding various fire prevention and vegetation removal activities when conducting projects on NFS lands. Participants are generally responsible for project costs, although FS may contribute funds at the discretion of the Secretary of Agriculture. Should a participant provide funds to the FS, the Secretary may retain those funds for implementing the pilot, subject to appropriations. The law directed FS to submit a program status report to Congress by December 31, 2020, and every two years afterwards.", "Section 8630 also specified the financial responsibility of pilot participants related to wildfire: participants must reimburse FS for the costs of wildfire suppression and damage to FS resources if the wildfire is caused by the operations of the pilot participant, under certain conditions. If the participant provides resources to suppress a wildfire caused by their operations in the ROW, the cost of those resources shall be credited toward the reimbursement costs, or if they exceed the maximum reimbursement costs, the FS must reimburse the pilot participant the excess. Section 8630 limits reimbursement costs to up to $500,000 in certain circumstances. ", "Although similar, the electricity ROW provisions prescribed in the FY2018 omnibus for FS and BLM differ from those in the ROW pilot program on NFS lands. The FY2018 omnibus program is specific to electricity ROWs, while the FS pilot program established under the 2018 farm bill is applicable to electricity ROWs as well as natural gas and other related infrastructure. The 2018 farm bill pilot limits participant responsibilities to wildfire and vegetation management, but does not address liability, while the FY2018 omnibus caps liability costs for program participants. "], "subsections": []}]}, {"section_title": "Secure Rural Schools (SRS) Payments and Modifications", "paragraphs": ["Counties containing NFS, O&C, and CBWR lands receive payments from the federal government based on the revenue generated from those lands in the prior year. SRS authorized an optional payment system to those counties as an alternative to the revenue-sharing payments. SRS payments were based on a formula that accounted for historic revenue payments, acreage of land, and the counties' per capita income. The SRS statute specified the payments to be allocated among three categories based on payment level: Title I FS payments were to be used for funding education and roads (BLM payments were to be used for any governmental purpose); Title II payments were retained by the applicable agency to be used for projects on the lands under jurisdiction and within the county; and Title III payments were to be used for specified county programs, including fire prevention, county planning, and emergency services (e.g., search and rescue operations and firefighting). Title II also established Resource Advisory Committees (RACs) to \"improve collaborative relationships and provide advice and recommendations\" to the agencies, and established minimum membership requirements. Specifically, the law specified that RACs members must be appointed by the applicable Secretary and must consist of a total of 15 members representing specific interests (this includes outdoor recreation interests, the timber industry, environmental organizations, and local elected officials, among others).", "The authorized payment level was set in statute at 95% of the previous year's payment level. The original authorization for SRS payments expired at the end of FY2006, but the payments were extended several times through FY2015. Since payments were disbursed after the end of the fiscal year, the last authorized payment was disbursed in FY2016. When SRS payments are not authorized, counties receive a revenue-sharing payment, which is typically much less than they would receive under SRS. After the last authorized SRS payments had been disbursed in FY2016, counties received a revenue-sharing payment in FY2017."], "subsections": [{"section_title": "Summary of Changes and Discussion", "paragraphs": ["The FY2018 omnibus reauthorized SRS payments for FY2017 and FY2018 (\u00a7\u00a7401, 402). This act authorized payments to be made in FY2018 and FY2019, respectively; however, the revenue-sharing payment for FY2017 had already been distributed at the time of enactment. The reauthorization set the FY2017 payment level at 95% of the level of the last authorized payment and specified that the payment should account for the revenue-sharing payments already disbursed. Thus, counties received a full SRS payment for FY2017 (payments made in FY2018), but the payments were essentially made in two installments. The reauthorization also changed some of the payment allocation requirements and expanded the uses for Title III funds (added law enforcement patrols, training, and equipment costs). The reauthorization expired at the end of FY2018, meaning that no additional payments are authorized after the FY2018 payments are distributed in FY2019.", "In addition, the 2018 farm bill enacted changes to the SRS statute, despite the law's expiration at the time of enactment. The 2018 farm bill established a process for the applicable Secretary to modify the RAC membership requirements, and established a pilot program, through FY2023, for the Secretary to designate a regional forester to appoint RAC members in Montana and Arizona (\u00a78702). These changes appear to be in response to concerns that the requirements for RACs to consist of 15 members were prohibitive. "], "subsections": []}]}, {"section_title": "Tribal Forestry", "paragraphs": ["The Tribal Forest Protection Act (TFPA) authorized the Secretary of Agriculture (for NFS lands) and the Secretary of the Interior (for BLM Lands) to enter into an agreement with federally recognized Indian tribes to implement specified forest or rangeland projects on Indian trust or restricted lands or on NFS and BLM lands adjacent to those tribal lands. The applicable NFS or BLM land should be in need of forest restoration activities or pose a fire, disease or other threat to tribal lands or communities, and include a \"feature or circumstance unique to that Indian Tribe.\" Under TFPA, the applicable Secretary is to evaluate a tribe's request on a \"best value basis\" and in consideration of a set of tribally related factors. The Indian Self-Determination and Education Assistance Act (ISDEAA) authorized federally recognized tribes to enter into self-determination contracts with the federal government to operate specified federal Indian programs, such as a Bureau of Indian Affairs school or an Indian Health Service hospital. ", "In addition to extending the good neighbor authority to tribes (see the \" Good Neighbor Authority \" section), the 2018 farm bill authorized the Secretary concerned to enter into self-determination contracts, on a demonstration basis, with federally recognized tribes to perform administrative, management, and other functions of the TFPA (\u00a78703). These contracts shall be in accordance with Section 403(b)(2) of the ISDEAA. The law specified that for such contracts on NFS land, the Secretary of Agriculture shall carry out all responsibilities delegated to the Secretary of the Interior. The law also requires the Secretary concerned to retain decisionmaking authority over decisions related to NEPA and TFPA. "], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": ["Congress may consider several issues related to the forestry provisions enacted by the 115 th Congress, including oversight of the agencies' implementation of the new laws. Congress may also be interested in the implication of these changes or how these provisions address concerns with federal forest management generally, and forest restoration specifically. ", "For example, the Forest Service has identified around 52-58 million acres of NFS lands at high or very high fire risk or insect infestation and in need of restoration treatments. FS reports that they accomplish around 2-6 million acres of treatments annually. At that pace, it would take at least 9 but possibly up to 29 years to eliminate the backlog of treatment needs, and that does not account for maintaining already treated areas to the desired resource conditions. Some estimate that hazardous fuels are accumulating three times faster than the rate of treatment. To address these concerns, FS has proposed to increase the scale, scope, and implementation of forest management projects generally, and forest restoration treatments specifically. ", "FS, and others, identify administrative process barriers as one of many factors impeding progress towards these restoration goals. More specifically, some identify agency decisionmaking processes, particularly related to implementation of the National Environmental Policy Act and opportunities for the public to challenge agency decisions administratively and judicially, as preventing the agencies from implementing projects at the pace and scale necessary to address forest health concerns. Others may point to FS-specific implementation issues related to NEPA as contributing to planning delays more than involvement from the public or administrative or judicial challenges. Other stakeholders identify other administrative barriers\u2014such as inadequate program funding levels and training\u2014as preventing the agency from implementing project planning requirements in a more efficient manner. ", "Many of the provisions enacted by the 115 th Congress aim to improve agency efficiencies by expanding the applicability of procedures intended to expedite the planning and review process for projects, such as hazardous fuel reduction and forest restoration projects. For example, proponents of this approach contend that expanding the use of Healthy Forests Restoration Act authorities and allowing the agencies to plan more projects over larger areas under NEPA Categorical Exclusions would expedite project implementation and allow FS and BLM to achieve progress towards their restoration goals. Some, however, contend that changes made to the agency's decisionmaking processes\u2014such as through the establishment of CEs\u2014are changing the basic legal framework for federal forest management, and making it increasingly difficult for citizens to participate or challenge government decisions. In addition, some stakeholders contend that expanding the use of these authorities could result in environmental impacts that exacerbate forest health concerns.", "Many of these issues have been ongoing for decades. For example, concerns about deteriorating forest health conditions and high fuel levels were raised after wildfires in Yellowstone National Park in 1988. In 1994, the congressionally chartered National Commission on Wildfire Disasters recommended federal land management agencies invest more in reducing hazardous fuels in high-risk ecosystems, and observed that \"the question is no longer if policy-makers will face disastrous wildfires and their enormous costs, but when.\" A 1995 study recommended FS increase hazardous fuel treatments to up to 3 million acres per year by 2005. As another example, in 1999, GAO recommended FS develop a strategy to identify long-term options for reducing fuels to address forest health issues and mitigate wildfire risk. In 2006 OIG raised concerns with FS' hazardous fuels reduction program and recommended FS develop guidance and controls to identify, prioritize, implement, monitor, and report on hazardous fuels reduction projects and funding. A 2016 OIG report assessed FS' progress towards implementing the recommendations from that 2006 report and found continued issues with FS prioritizing, tracking, and reporting of hazardous fuels reduction projects. ", "Concerns about FS project implementation also have been ongoing. For example, in 2001 Congress asked GAO to evaluate the extent administrative or judicial challenges impeded FS' implementation of fuel management projects. The report found that approximately 24% of the fuel reduction decisions signed in FY2001 and FY2002 were appealed. A similar GAO analysis found that 20% of the fuel management projects identified for implementation in FY2006 through FY2008 were challenged through appeals or objections. In addition, there have been several academic studies examining FS NEPA implementation. Collectively, these studies suggest that projects that are more complex\u2014in terms of scale and scope\u2014are more likely to be challenged, but other project characteristics (e.g., timber harvests) and factors related to staffing, documentation, and implementation of the public involvement requirements also affect the likelihood of project challenges. ", "HFRA, passed in 2003, included provisions intended to expedite implementation of hazardous fuels reduction projects. Despite these provisions, the extent of NFS areas in need of treatment has continued to increase, and FS continues to look for ways to increase the pace of project implementation. To some, this implies that the HFRA approach to streamline agency decisionmaking has not been successful. To others, this implies that the HFRA approach needs to be more broadly applied, as it was in legislation enacted during the 115 th Congress. "], "subsections": [{"section_title": "Appendix. Enacted Forest Management Provisions Comparison to Then-Current Law", "paragraphs": ["The following two tables provide side-by-side comparisons that briefly describe the forest-related provisions enacted by each law (the FY2018 omnibus and 2018 farm bill) to prior law, generally in the order in which they were included in the legislation, with a few exceptions for purposes of clarity. Provisions in each law that do not directly affect forest management are not included."], "subsections": []}]}]}}
{"id": "R45406", "title": "FY2018 and FY2019 Appropriations for Agricultural Conservation", "released_date": "2019-05-10T00:00:00", "summary": ["The Agriculture appropriations bill funds the U.S. Department of Agriculture (USDA) except for the Forest Service. The FY2018 Consolidated Appropriations Act (P.L. 115-141, Division A), and the FY2019 Consolidated Appropriations Act (P.L. 116-6, Division B) include funding for conservation programs and activities at USDA.", "Congress passed the FY2018 Consolidated Appropriations Act on March 23, 2018. FY2019 began with seven appropriations bills, including USDA, unfinished. The House and Senate Appropriations Committees reported Agriculture appropriations bills for FY2019 (H.R. 5961, S. 2976), with the Senate having amended and passed its version as Division C of a four-bill minibus (H.R. 6147). Congress and the President approved continuing resolutions to fund the affected federal agencies through December 21, 2018, at the FY2018 level (P.L. 115-245). After December 21, 2018, a partial shutdown of the government, including many agencies within USDA, occurred. One of the few exceptions was the Natural Resources Conservation Service (NRCS), which was able to operate on mandatory and carryover funds during the majority of the shutdown. On January 25, 2019, an agreement was reached to continue funding for USDA and other appropriations that had lapsed through February 15, at the FY2018 level (P.L. 116-5). The FY2019 Consolidated Appropriations Act was signed into law on February 15, 2019, funding USDA through the end of the fiscal year (Division B, P.L. 116-6).", "Agricultural conservation programs include both mandatory and discretionary spending. Most conservation program funding is mandatory and is authorized in omnibus farm bills. Other conservation programs\u2014mostly technical assistance\u2014are discretionary and are funded through annual appropriations.", "The largest discretionary program is the Conservation Operations (CO) account, which funds conservation planning and implementation assistance on private agricultural lands across the country. The enacted FY2018 appropriation provided $874 million for CO, an increase from the FY2017 enacted amount ($864 million). The enacted FY2019 appropriation decreases funding for CO below FY2018 levels to $819 million and redirects funding to the new Farm Production and Conservation Business Center. Other discretionary spending is primarily for watershed programs. The largest\u2014Watershed and Flood Prevention Operations (WFPO)\u2014was funded at $150 million annually in FY2018 and FY2019.", "Most mandatory conservation programs are authorized in omnibus farm bills and do not require an annual appropriation. However, Congress has reduced mandatory conservation programs through changes in mandatory program spending (CHIMPS) in the annual agricultural appropriations law every year since FY2003. The enacted FY2018 omnibus marks the first appropriation since FY2002 that did not include CHIMPS to mandatory conservation programs. The enacted FY2019 appropriation also does not include reductions to mandatory conservation programs, as most programs' authorizations expired on September 30, 2018, making these programs ineligible for reduction. The 2018 farm bill (Agricultural Improvement Act of 2018, P.L. 115-334) reauthorized and amended funding for many of the mandatory conservation programs.", "While this is infrequent, the Agriculture appropriations bill may also serve as a vehicle for amendments to authorized programs that permanently alter or create programs. The FY2018 Agriculture appropriations act included two such amendments\u2014one to WFPO and one to farm bill conservation program reporting requirements. The WFPO amendment increased the size threshold required for congressional approval. Under the amended language, the Senate and House Agriculture Committees must approve WFPO projects that include an estimated federal contribution of more than $25 million for construction, an increase from the previous $5 million threshold. Additionally, the FY2018 appropriations act exempted farm bill conservation programs from select federal reporting requirements, including obtaining a Data Universal Numbering System (DUNS) number and System for Award Management (SAM) registration.", "Agriculture appropriations bills may also include policy-related provisions that direct how the executive branch should carry out the appropriation. The FY2018 and FY2019 appropriations acts both include policy provisions for conservation programs that range from reports to Congress to suggested natural resource priorities."], "reports": {"section_title": "", "paragraphs": ["T he Agriculture appropriations bill\u2014formally called the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act\u2014funds all of the U.S. Department of Agriculture (USDA), excluding the U.S. Forest Service. Congress passed the FY2018 Consolidated Appropriations Act on March 23, 2018 ( P.L. 115-141 ). FY2019 began with seven appropriations bills, including USDA, unfinished. The House and Senate Appropriations Committees reported Agriculture appropriations bills for FY2019 ( H.R. 5961 , S. 2976 ), with the Senate having amended and passed its version as Division C of a four-bill minibus ( H.R. 6147 ). Congress and the President approved continuing resolutions to fund the affected federal agencies through December 21, 2018, at the FY2018 level ( P.L. 115-245 and P.L. 115-298 ). After December 21, 2018, a partial shutdown of the government, including many agencies within USDA, occurred. One of the few exceptions was the Natural Resources Conservation Service (NRCS), which was able to operate on mandatory and carryover funds during the majority of the shutdown. On January 25, 2019, an agreement was reached to continue funding for USDA and other appropriations that had lapsed through February 15, at the FY2018 level ( P.L. 116-5 ). The FY2019 Consolidated Appropriations Act was signed into law on February 15, 2019, funding USDA through the end of the fiscal year (Division B, P.L. 116-6 ).", "This report provides a brief overview of the conservation-related provisions in the FY2018 and FY2019 Agriculture appropriations acts. For a general analysis of the FY2018 appropriations for agriculture, see CRS Report R45128, Agriculture and Related Agencies: FY2018 Appropriations , and for FY2019, see CRS Report R45230, Agriculture and Related Agencies: FY2019 Appropriations . "], "subsections": [{"section_title": "Conservation Appropriations", "paragraphs": ["USDA administers a number of agricultural conservation programs that assist private landowners with natural resource concerns. These include working land programs, land retirement and easement programs, watershed programs, technical assistance, and other programs. The two lead agricultural conservation agencies within USDA are the Natural Resources Conservation Service (NRCS), which provides technical assistance and administers most conservation programs, and the Farm Service Agency (FSA), which administers the Conservation Reserve Program (CRP).", "Most conservation program funding is mandatory, obtained through the Commodity Credit Corporation (CCC) and authorized in omnibus farm bills (about $5.3 billion of CCC funds for conservation in FY2018). Other conservation programs\u2014mostly technical assistance\u2014are discretionary spending and are funded through annual appropriations (about $1 billion annually).", "For the first time since FY2002, the FY2018 Agriculture appropriations act did not include reductions to mandatory conservation programs. It did, however, include legislative changes that affect farm bill programs and watershed programs. Similarly, the FY2019 appropriations act did not include reductions to mandatory conservation programs; however, the enacted 2018 farm bill (Agriculture Improvement Act, P.L. 115-334 ) reauthorized and amended funding for many of the mandatory conservation programs. The FY2018 appropriations act included a slight increase from FY2017 levels for discretionary conservation programs. The FY2019 appropriations act included a decrease from FY2018 levels for discretionary conservation programs and redirected funding to the new Farm Production and Conservation Business Center (see Table 1 and Figure 1 )."], "subsections": [{"section_title": "Discretionary Conservation Programs", "paragraphs": [], "subsections": [{"section_title": "Conservation Operations", "paragraphs": ["NRCS administers all discretionary conservation programs. The largest program and the account that funds most NRCS activities is Conservation Operations (CO). The CO account primarily funds Conservation Technical Assistance (CTA), which provides conservation planning and implementation assistance through field staff placed in almost all counties within the United States and territories. Other components of CO include the Soil Surveys, Snow Survey and Water Supply Forecasting, and Plant Materials Centers. ", "The enacted FY2018 appropriation provided $874 million\u2014more than the FY2017 enacted amount ($864 million). The enacted FY2019 appropriation decreases funding for CO below FY2018 levels to $819 million and redirects funding to the new Farm Production and Conservation Business Center. The Trump Administration's FY2019 budget request ($699 million) was less than the amount later enacted for FY2019 due to a proposed consolidation of mandatory and discretionary accounts to pay for conservation technical assistance. The proposal to consolidate funding has been made by USDA through multiple Administrations but never adopted by Congress (see text box below). The FY2018 and FY2019 Agriculture appropriations acts direct CO funding for a number of conservation programs ( Table 1 ). Report language further directs funding to selected activities ( Table 3 )."], "subsections": []}, {"section_title": "Watershed and Flood Prevention Operations", "paragraphs": ["The enacted FY2018 and FY2019 appropriations also contain funding for watershed activities, including $150 million annually for Watershed and Flood Prevention Operations (WFPO)\u2014a program that assists state and local organizations with planning and installing measures to prevent erosion, sedimentation, and flood damage. This is the same level as appropriated in FY2017, which was the first appropriated funding for the WFPO program since FY2010. Beginning in FY2006, Administrations began requesting no funding for WFPO, citing program inflexibility and a backlog of congressionally earmarked projects. The Trump Administration's FY2018 and FY2019 requests proposed no funding for the program.", "Since FY2014, Congress has directed a portion of CO funds to select WFPO activities. Similar directive language ($5.6 million; see Table 1 ) is in the FY2018 and FY2019 appropriations, in addition to the $150 million made available each fiscal year for the program as a whole.", "The enacted FY2018 and FY2019 appropriations include $10 million annually for the Watershed Rehabilitation program\u2013\u2013a reduction from the FY2017 level of $12 million. The Watershed Rehabilitation program repairs aging dams previously built by USDA under WFPO. The Administration proposed no funding in FY2018 and FY2019. ", "The 2018 farm bill made minor amendments to WFPO, the most substantial being the authorization of permanent mandatory funding of $50 million annually. The new mandatory funding will be in addition to discretionary funding provided through annual appropriations and could be used for either WFPO or Watershed Rehabilitation activities."], "subsections": []}]}, {"section_title": "Mandatory Conservation Programs", "paragraphs": ["Mandatory conservation programs are generally authorized in omnibus farm bills and receive funding from the CCC and thus do not require an annual appropriation. In the past, Congress has used annual agriculture appropriations acts to reduce mandatory conservation programs through changes in mandatory program spending (CHIMPS) every year from FY2003 to FY2017. The FY2018 Consolidated Appropriations Act marked the first appropriation since FY2002 that did not include CHIMPS to conservation programs. This allowed all mandatory conservation programs to utilize their full authorized level of funding in FY2018, minus sequestration. Additionally, prior-year CHIMPS concerning programs that are authorized to remain available until expended (e.g., Watershed Rehabilitation) became available for obligation in FY2018.", "Nearly all mandatory conservation programs authorized in the 2014 farm bill (Agricultural Act of 2014; P.L. 113-79 ) expired on September 30, 2018. One exception is the Environmental Quality Incentives Program (EQIP), whose authority was extended to FY2019 in the Bipartisan Budget Act of 2018 (BBA; P.L. 115-123 ). The 2018 farm bill reauthorized mandatory funding for all conservation programs, including for FY2019. Similar to FY2018, the FY2019 appropriations bill, which was enacted after enactment of the 2018 farm bill, does not include reductions to mandatory conservation programs."], "subsections": []}, {"section_title": "Farm Production and Conservation Business Center", "paragraphs": ["On May 11, 2017, USDA announced the creation of the Farm Production and Conservation (FPAC) mission area as part of a larger Departmental reorganization. FPAC includes NRCS, FSA, Risk Management Agency (RMA), and a new FPAC Business Center. The FPAC Business Center is responsible for financial management, budgeting, human resources, information technology, acquisitions/procurement, strategic planning, and other customer-oriented operations of the three domestic agriculture agencies (NRCS, FSA, and RMA). ", "The FY2018 Administration budget request was released two weeks following the announcement for FPAC (May 23, 2017), but did not include funding for the FPAC Business Center. The FY2019 Administration budget request did include funding for the Business Center ($196.4 million), as well as a request to transfer funding from other accounts ($76.3 million) to the Business Center. Final enactment of the FY2018 appropriation occurred on March 23, 2018, after the release of the Administration's FY2019 budget request, which occurred on February 12, 2018. ", "The FY2018 appropriation included about $1 million for the Business Center. The FY2018 explanatory statement required USDA to submit an implementation and spending plan to Congress for the new FPAC mission area that would detail requested transfers. ", "USDA submitted the FPAC spending plan on August 28, 2018. The FY2019 appropriation had already been marked up in the House and Senate, and did not include the full level of requested funding for the Business Center. ", "The enacted FY2019 appropriations (February 15, 2019), however, did increase funding for the Business Center. The enacted level is more than the Administration's request and directs a transfer of funds from other accounts into the Business Center, including mandatory conservation programs and farm loan accounts. Funding for NRCS and FSA is reduced accordingly and FPAC Business Center funding shifts are dictated in the FY2019 explanatory statement (see Table 2 ). It is unclear what level of savings is projected from the centralization of agency functions and what this savings will ultimately be redirected toward.", "Overall, the total changes in funding for the new Business Center do not necessarily reflect a decline in NRCS resources. Total CO (discretionary spending) was reduced between FY2018 and FY2019 by $54.6 million, whereas NRCS' contribution to the FPAC Business Center appropriation for FY2019 is $70.8 million, thus indicating an effective increase of $16.2 million to NRCS in FY2019. This could result in NRCS effectively receiving less in total funding depending whether the amount shifted would have been used for administrative or technical assistance purposes had the Business Center not been in existence. ", "The mandatory conservation program funding ($60.2 million) that is authorized to be transferred to the FPAC Business Center comes from programs authorized to receive CCC funding under 16 U.S.C. 3841(a). Three programs within the conservation title of the 2018 farm bill are included in this transfer\u2014EQIP, CSP, and the Agricultural Conservation Easement Program (ACEP). Other mandatory conservation programs funded through the cited CCC authority (16 U.S.C. 3841(a)) are not included in the transfer, including CRP, which is administered by FSA. The transfer in the FY2019 appropriations act redirects mandatory funding that was authorized in the farm bill. It is unclear what, if any, effect the transfer could have on the implementation of EQIP, CSP, and ACEP, and the financial assistance offered by those programs."], "subsections": []}]}, {"section_title": "FY2019 Partial Government Shutdown", "paragraphs": ["In FY2019, a 34-day funding gap lasted from December 22, 2018, through January 25, 2019. It affected agencies funded by 7 of the 12 appropriations bills, including Agriculture appropriations. In general, a shutdown results in the furlough of many personnel and curtailment of affected agency activities and services. Exceptions may allow certain activities to continue, such as for law enforcement, protection of human life or property, and activities funded by other means such as carryover funds or user fees. Agencies make their own determinations about activities and personnel that are \"excepted\" from furlough and publish their intentions in \"contingency plans\" that are supervised by the Office of Management and Budget (OMB). USDA published contingency plans for each agency, including NRCS.", "USDA initially estimated on December 23, 2018, that 61% of its employees were excepted from furlough in the agencies that are funded by Agriculture appropriations (all of USDA except the Forest Service), which amounts to 37,860 staff being excepted out of 62,288. The number of excepted and furloughed personnel varied by agency. ", "As previously discussed, NRCS funds technical assistance and related agency staff through both mandatory and discretionary accounts. As such, NRCS was initially able to claim as excepted 100% of its 9,342 staff using mandatory conservation program funding authorized through the farm bill (and therefore not affected by the lapse in discretionary appropriations), and discretionary carryover funding from prior fiscal years. As the shutdown continued, however, NRCS announced its intention to furlough some employees beginning on February 3, 2019, to conserve carryover balances and focus excepted staff on mandatory farm bill conservation program implementation. This plan was not implemented because the shutdown ended on January 25, 2019."], "subsections": []}, {"section_title": "Amendments to Conservation Programs", "paragraphs": ["Generally, Congress employs two separate types of legislative measures\u2014authorizations and appropriations. Authorization acts establish, continue, or modify agencies or programs. Appropriations acts generally provide discretionary funding for authorized agencies and programs.", "While this practice is infrequent and subject to various procedural rules and limitations, the Agriculture appropriations bill may serve as a vehicle for amendments to authorized programs that permanently alter or create programs. These amendments generally have the force of law by amending the U.S. Code or by creating a permanent authorization. This is different from policy-related provisions (discussed in the \" Policy-Related Provisions \" section), which generally direct how the executive branch should carry out the appropriations and whose effect is typically limited to the current fiscal year. In some cases, the 2018 farm bill further amended the conservation programs that were amended in the FY2018 appropriations act. Where relevant, these amendments are noted; however, the focus is on amendments made in appropriations acts."], "subsections": [{"section_title": "Watershed and Flood Prevention Operations", "paragraphs": ["The FY2018 agriculture appropriations act included statutory amendments to the WFPO program. Section 761 of P.L. 115-141 amended the Watershed Protection and Flood Prevention Act of 1954 (16 U.S.C. 1001 et seq. ) by increasing the size thresholds required for congressional approval under the program. Under the amended language, approval by the Senate and House Agriculture Committees is required for individual projects that need an estimated federal contribution of more than $25 million for construction, an increase from the previous $5 million threshold. This amendment originated in the FY2018 Senate-reported bill ( S. 1603 , \u00a7754)."], "subsections": []}, {"section_title": "Conservation Program Requirements", "paragraphs": ["The FY2018 appropriation also amended Title XII of the Food Security Act of 1985 ( P.L. 99-198 ; often referred to as the \"1985 farm bill\") by adding a new section that exempts farm bill conservation programs from certain reporting requirements. Federal grant recipients must comply with government-wide financial management policies and reporting requirements when receiving federal grants and agreements. Many of these reporting requirements are not new for USDA programs and have been in place for a number of years. ", "Interested stakeholders raised concerns when a number of the farm bill conservation programs were designated as grants (rather than direct payments) under a 2010 regulation. This designation triggered the use of a Data Universal Numbering System (DUNS) number and System for Award Management (SAM) registration. The DUNS number requirement and SAM registration did not affect individuals or entities that apply for conservation programs using a Social Security number. Rather, it applied only to those applying as an entity with a Taxpayer Identification Number or Employee Identification Number. ", "The amendment exempts producers and landowners who participate in farm bill conservation programs from the DUNS number and SAM registration requirement. The amendment originated in the FY2018 Senate-reported bill ( S. 1603 , \u00a7740). The 2018 farm bill moved and expanded this exemption to include conservation, indemnity or disease control, or commodity programs administered by NRCS, FSA, and the Animal and Plant Health Inspection Service."], "subsections": []}]}, {"section_title": "Policy-Related Provisions", "paragraphs": ["In addition to setting budgetary amounts, the Agriculture appropriations bill may also include policy-related provisions that direct how the executive branch should carry out an appropriation. These provisions may have the force of law if they are included in the text of an appropriations act, but their effect is generally limited to the current fiscal year (see Table 3 ). Unlike the aforementioned authorization amendments that may be included in appropriations acts, policy-related provisions generally do not amend the U.S. Code or have long-standing effects.", "For example, the WFPO program has historically been called the \"small watershed program,\" because no project may exceed 250,000 acres, and no structure may exceed more than 12,500 acre-feet of floodwater detention capacity or 25,000 acre-feet of total capacity. The FY2018 and FY2019 enacted appropriations also include a policy provision that waives the 250,000-acre project limit when the project's primary purpose is something other than flood prevention. This provision does not amend the WFPO authorization and therefore is effective only for the funds provided during the appropriation year. ", " Table 3 compares some of the policy provisions that have been identified in the Farm Production and Conservation Programs (Title II) and General Provisions (Title VII) titles of the FY2018 and FY2019 Agriculture appropriations bills related to conservation. Many of these provisions were also included in past years' appropriations laws.", "The explanatory statement that accompanies the final appropriation\u2014and the House and Senate report language that accompanies the committee-reported bills\u2014may also provide policy instructions. These documents do not have the force of law but often explain congressional intent, which the agencies are expected to follow (see Table 4 ). The committee reports and explanatory statement may need to be read together to capture all of the congressional intent for a given fiscal year.", " Table 4 compares some of the policy provisions that have been identified in the FY2018 and FY2019 Agriculture appropriations reported language related to conservation. The FY2018 enacted report language column includes references to the House (H) and Senate (S) report language, as well as the enacted (E) explanatory statement. The FY2019 enacted report language column includes references to the House (H) and Senate (S) report language, and the enacted (E) conference report. The inclusion of all three reports better captures congressional intent for each fiscal year. Many of these provisions have been included in past years' appropriations laws. Some provisions in report language and bill text address conservation programs not authorized or funded within the annual appropriation (i.e., mandatory spending for farm-bill-authorized programs). "], "subsections": []}]}}
{"id": "R44736", "title": "The Holman Rule (House Rule XXI, Clause 2(b))", "released_date": "2019-02-06T00:00:00", "summary": ["Although congressional rules establish a general division of responsibility under which questions of policy are kept separate from questions of funding, House rules provide for exceptions in certain circumstances. One such circumstance allows for the inclusion of legislative language in general appropriations bills or amendments thereto for \"germane provisions that retrench expenditures by the reduction of amounts of money covered by the bill.\" This exception appears in clause 2(b) of House Rule XXI and is known as the Holman rule, after Representative William Holman of Indiana, who first proposed the exception in 1876.", "Since the period immediately after its initial adoption, the House has interpreted the Holman rule through precedents that have tended to incrementally narrow its application. Under current precedents, for a legislative provision or amendment to be in order, the legislative language in question must be both germane to other provisions in the measure and must produce a clear reduction of appropriations in that bill.", "In addition, the House adopted a separate order during the 115th Congress that provided for retrenchments of expenditures by a reduction of amounts of money covered by the bill to be construed as applying to:", "any provision or amendment that retrenches expenditures by\u2014", "(1) the reduction of amounts of money in the bill;", "(2) the reduction of the number and salary of the officers of the United States; or", "(3) the reduction of the compensation of any person paid out of the Treasury of the United States.", "This separate order was not readopted for the 116th Congress.", "This report provides a history of this provision in House rules and an analysis of precedents that are illustrative of its possible application."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["Congressional rules establish a general division of responsibility under which questions of policy are kept separate from questions of funding. Broadly, the term authorization is used to describe legislation that establishes, continues, or modifies the organization or activities of a federal entity or program. By itself, such legislation does not provide funding for such purposes. Instead, the authority to obligate payments from the Treasury is left to separate appropriations measures.", "This distinction between appropriations and general legislation as two separate classes of measures, and their consideration in separate legislative vehicles, is a construct of congressional rules and practices. It has been developed and formalized by the House and Senate pursuant to the constitutional authority for each chamber to \"determine the Rules of its Proceedings.\" This power permits each chamber of Congress to enforce, modify, waive, repeal, or ignore its rules as it sees fit. Because the two chambers exercise this rulemaking authority independently, they have developed differing (albeit generally similar) rules and practices. This report addresses solely developments in the House.", "According to Hinds' Precedents , the origin of a formal rule mandating the separation of general legislation from appropriations can be traced to 1835, when the House debated the increasing problem of delay in enacting appropriations due to the inclusion of \"debatable matters of another character, new laws which created long debates in both Houses\" and suggested that the Committee on Ways and Means should \"strip the appropriation bills of every thing but were legitimate matters of appropriation.\" In the following Congress (25 th Congress, 1837-1839), language was added to House rules that stated:", "No appropriation shall be reported in such general appropriation bills, or be in order as an amendment thereto, for any expenditure not previously authorized by law.", "This rule was applied broadly on occasion to exclude legislative provisions authorizing new expenditures as well, such as a case in 1838 when it was used to exclude an amendment that included a provision for refurnishing the White House. Gradually, the rule \"became construed through a long line of decisions to admit amendments increasing salaries but as excluding amendments providing for decreases.\""], "subsections": []}, {"section_title": "Development of the Holman Rule", "paragraphs": ["As a consequence of this, in 1876, the language was expanded (at the suggestion of Representative William Holman of Indiana) to further state: ", "Nor shall any provision in any such bill or amendment thereto, changing existing law, be in order except such as, being germane to the subject matter of the bill, shall retrench expenditures.", "As described by one scholar, this provision effectively granted the Appropriations Committee authority to include virtually any legislative provision in an appropriations measure so long as it reduced the number and salary of federal officials, the compensation of any person paid out of the Treasury, or the amounts of money covered in an appropriation bill. According to one contemporary account, a broad initial construction of the rule by the House resulted in \"putting a great mass of general legislation upon the appropriation bills.\" ", "The rule was retained in this form until 1880 (46 th Congress), when it was modified to define retrenchments as the reduction of \"the number and salary of officers of the United States, the reduction of compensation of any person paid out of the Treasury of the United States, or the reduction of the amounts of money covered by the bill.\" That form of the rule remained a part of House rules until the 49 th Congress eliminated it in 1885. It was reinserted in the rules for the 52 nd and 53 rd Congresses (1891-1895) but was again dropped for the 54 th through 61 st Congresses (1895-1911) before being readopted in the 62 nd Congress.", "Although the Holman rule has remained a part of House rules since that time, its language was amended at the start of the 98 th Congress (1983-1984). At that time, it was restructured to narrow the exception to the general prohibition against legislation to allow only retrenchments reducing amounts of money covered by the bill. In addition, the House rules for the 98 th Congress changed when retrenchment amendments could be offered. Amendments that only alter the items or amounts in an appropriation bill are generally in order when the measure is read for amendment and must be offered as the relevant paragraph or section of the bill is read. The new version of the rule provided, however, that germane amendments to retrench expenditures (as well as limitation amendments) would be in order only after the reading of a general appropriation bill and if a preferential motion that the Committee of the Whole rise and report (essentially ending consideration of the bill) were rejected. ", "Further stylistic changes were made when the House recodified its rules in the 106 th Congress (1999-2000) to make explicit that retrenchment amendments are in order if the motion to rise and report is not offered\u2014as well as if the motion is rejected. It also clarified that the effect of a point of order against legislation in an appropriations bill (and, by extension, the application of the Holman rule exception) is surgical so that it lies against an offending provision in the text and not against consideration of the entire bill.", "The Holman rule currently states the following:", "A provision changing existing law may not be reported in a general appropriation bill, including a provision making the availability of funds contingent on the receipt or possession of information not required by existing law for the period of the appropriation, except germane provisions that retrench expenditures by the reduction of amounts of money covered by the bill [emphasis added].", "The Holman rule, thus, does not circumscribe Congress's lawmaking authority but rather provides a limited exception to the general prohibition in House rules against legislation in appropriation measures.", "For the 115 th Congress, the House included a separate order as Section 3(a) of H.Res. 5 , adopting the rules of the House, that provides the following: ", "During the first session of the One Hundred Fifteenth Congress, any reference in clause 2 of rule XXI to a provision or amendment that retrenches expenditures by a reduction of amounts of money covered by the bill shall be construed as applying to any provision or amendment (offered after the bill has been read for amendment) that retrenches expenditures by\u2014", "(1) the reduction of amounts of money in the bill;", "(2) the reduction of the number and salary of the officers of the United States; or", "(3) the reduction of the compensation of any person paid out of the Treasury of the United States.", "As stated in a section-by section summary included in the Congressional Record by Representative Pete Sessions, the chairman of the House Rules Committee, the purpose of this provision is \"to see if the reinstatement of the Holman rule will provide Members with additional tools to reduce spending during consideration of the regular general appropriation bill.\"", "The applicability of this separate order was extended under Section 5 of H.Res. 787 (115 th Congress) which provided that \"Section 3(a) of House Resolution 5 is amended by striking 'the first session of.'\"", "This separate order was not adopted for the 116 th Congress, so the application of the rule reverts to being guided by prior precedents rather than this language."], "subsections": []}, {"section_title": "Application", "paragraphs": ["Since the period immediately after the initial adoption of the rule in the 19 th century, the House has interpreted it through precedents that have tended to incrementally narrow its application. For example, early precedents established that while it was not always necessary that a retrenchment specify the amount of a reduction of expenditures, it must appear as a necessary result of the legislation to be in order and that it is not sufficient that such reduction would probably (or would in the opinion of the chair) result therefrom. For example, legislation that would simply confer discretionary authority to terminate employment of federal employees is not in order under the Holman exception because any resulting savings would be speculative. The reduction also may not be contingent on an event. Furthermore, the rule is not applicable to funds other than those appropriated in the pending general appropriations bill.", "The Holman rule then is intended to apply only when an obvious reduction of funds in a general appropriations bill is achieved by the provision in question, such as the cessation of specific government activities, or through a specific reduction of total appropriations in the bill. In addition, the exception does not apply to limitations (on the grounds that such language is not legislative) or legislative language unaccompanied by a reduction of funds in the bill. Legislation that is too broad has also typically not been allowed under the Holman rule exception. The House has held, for example, that a provision that stated no part of an appropriation could be expended for a specific, designated purpose qualified as a retrenchment. However, a proposal that effectively repealed the law under which appropriations for that purpose were authorized was held not to come within the exception. In another case, the House held that even when a provision does reduce expenditures, it may not be accompanied by additional legislative provisions not directly contributing to the reduction."], "subsections": []}, {"section_title": "Separate Order for the 115th Congress", "paragraphs": ["The separate order for the 115 th Congress effectively reinstated language that had been stricken from the rule in 1983. While the full scope of amendments might be in order as a consequence of this language, it is possible to analyze its potential impact based on past precedents and the limited experience of the 115 th Congress.", "The additional language opened the door to the consideration of retrenchments resulting from a reduction of the number and salary of the officers of the United States or the reduction of the compensation of any person paid out of the Treasury of the United States. There are precedents regarding provisions allowed under the older, pre-1983 form of the rule that may be illustrative for understanding what might be in order. For example, a proposal that pay for a class of employees be limited to a smaller number of employees than authorized by law was allowed, as were proposals that would reduce the number of officers. The Holman rule also allowed proposals that would consolidate or eliminate offices. On at least one occasion, the Holman rule was the basis for allowing a proposal to replace civilian employees with lower paid U.S. Army enlisted personnel. In another case, the rule allowed for an amendment that capped the salaries of certain employees. In the 115 th Congress, one amendment was considered in order based on a plain reading of the text of the separate order to allow for \"the reduction of the compensation of any person paid out of the Treasury of the United States.\" Although the amendment failed of passage, it would have provided that:", "The salary of Mark Gabriel, the Administrator of the Western Area Power Administration, shall be reduced to $1.", "As cited above, however, neither the rule nor the separate order allows for retrenchments that would be applicable to funds other than those appropriated in the pending general appropriations bill. In addition, the application of the broader exceptions in the separate order were still subject to the general requirement for germaneness. The Holman rule is not intended to open the door for legislative provisions that would expand the scope of the bill. As a consequence, even with the additional scope provided by the language of the separate order, it would likely not be in order to include broad legislative provisions in, or amendments to, a specific appropriation bill that would apply to the salary or number of federal employees funded through appropriations in other measures. Furthermore, House precedent establishes that simply providing for a reduction of the number and salaries of officers in a paragraph when it is complicated by other elements does not necessarily bring a proposition within the exception.", "The Holman rule was also cited as the basis for allowing the consideration of one additional amendment during the 115 th Congress. That amendment also failed to pass, but it would have abolished the Budget Analysis Division of the Congressional Budget Office, comprising 89 employees with annual salaries aggregating $15 million, transferring responsibility for any duties imposed by law and regulation to the Office of the Director of the Congressional Budget Office. ", "When discussing the application of rules and precedents, it is important to note that the House Parliamentarian is the sole definitive authority on questions relating to the chamber's precedents and procedures and should be consulted if a formal opinion on any specific parliamentary question is desired."], "subsections": []}]}}
{"id": "R45711", "title": "Enhanced Prudential Regulation of Large Banks", "released_date": "2019-05-06T00:00:00", "summary": ["The 2007-2009 financial crisis highlighted the problem of \"too big to fail\" financial institutions\u2014the concept that the failure of large financial firms could trigger financial instability, which in several cases prompted extraordinary federal assistance to prevent their failure. One pillar of the 2010 Dodd-Frank Act's (P.L. 111-203) response to addressing financial stability and ending too big to fail is a new enhanced prudential regulatory (EPR) regime that applies to large banks and to nonbank financial institutions designated by the Financial Stability Oversight Council (FSOC) as systemically important financial institutions (SIFIs). Previously, FSOC had designated four nonbank SIFIs for enhanced prudential regulation, but all four have since been de-designated.", "Under this regime, the Federal Reserve (Fed) is required to apply a number of safety and soundness requirements to large banks that are more stringent than those applied to smaller banks. These requirements are intended to mitigate systemic risk posed by large banks", "Stress tests and capital planning ensure banks hold enough capital to survive a crisis. Living wills provide a plan to safely wind down a failing bank. Liquidity requirements ensure that banks are sufficiently liquid if they lose access to funding markets. Counterparty limits restrict the bank's exposure to counterparty default. Risk management requires publicly traded companies to have risk committees on their boards and banks to have chief risk officers. Financial stability requirements provide for regulatory interventions that can be taken only if a bank poses a threat to financial stability. Capital requirements under Basel III, an international agreement, require large banks hold more capital than other banks to potentially absorb unforeseen losses.", "The Dodd-Frank Act automatically subjected all bank holding companies and foreign banks with more than $50 billion in assets to enhanced prudential regulation. In 2017, the Economic Growth, Regulatory Relief, and Consumer Protection Act (P.L. 115-174) created a more \"tiered\" and \"tailored\" EPR regime for banks. It automatically exempted domestic banks with assets between $50 billion and $100 billion (five at present) from enhanced regulation. The Fed has discretion to apply most individual enhanced prudential provisions to the 11 domestic banks with between $100 billion and $250 billion in assets on a case-by-case basis if it would promote financial stability or the institutions' safety and soundness, and has proposed exempting them from several EPR requirements. The eight domestic banks that have been designated as Global-Systemically Important Banks (G-SIBs) and the five banks with more than $250 billion in assets or $75 billion in cross-jurisdictional activity remain subject to all Dodd-Frank EPR requirements. In addition, the Fed has proposed applying some EPR requirements on a progressively tiered basis to the 23 foreign banks with over $50 billion in U.S. assets and $250 billion in global assets.", "P.L. 115-174 also reduced the amount of capital that custody banks are required to hold against one of the EPR capital requirements, the supplementary leverage ratio (SLR). In addition, the Fed has issued a proposed rule that would reduce the amount of capital that G-SIBs are required to hold against the SLR. Finally, the Fed has proposed another rule that would combine capital planning under the stress tests with overall capital requirements for large banks.", "Collectively, these proposed changes would reduce, to varying degrees, capital and other advanced EPR requirements for banks with more than $50 billion in assets. In the view of the banking regulators and the supporters of P.L. 115-174, these changes better tailor EPR to match the risks posed by large banks. Opponents are concerned that the additional systemic and prudential risks posed by these changes outweigh the benefits to society of reduced regulatory burden, believing that the benefits will mainly accrue to the affected banks.", "The 2007-2009 financial crisis highlighted the problem of \"too big to fail\" financial institutions\u2014the concept that the failure of large financial firms could trigger financial instability, which in several cases prompted extraordinary federal assistance to prevent their failure. One pillar of the 2010 Dodd-Frank Act's (P.L. 111-203) response to addressing financial stability and ending too big to fail is a new enhanced prudential regulatory (EPR) regime that applies to large banks and to nonbank financial institutions designated by the Financial Stability Oversight Council (FSOC) as systemically important financial institutions (SIFIs). Previously, FSOC had designated four nonbank SIFIs for enhanced prudential regulation, but all four have since been de-designated.", "Under this regime, the Federal Reserve (Fed) is required to apply a number of safety and soundness requirements to large banks that are more stringent than those applied to smaller banks. These requirements are intended to mitigate systemic risk posed by large banks", "Stress tests and capital planning ensure banks hold enough capital to survive a crisis. Living wills provide a plan to safely wind down a failing bank. Liquidity requirements ensure that banks are sufficiently liquid if they lose access to funding markets. Counterparty limits restrict the bank's exposure to counterparty default. Risk management requires publicly traded companies to have risk committees on their boards and banks to have chief risk officers. Financial stability requirements provide for regulatory interventions that can be taken only if a bank poses a threat to financial stability. Capital requirements under Basel III, an international agreement, require large banks hold more capital than other banks to potentially absorb unforeseen losses.", "The Dodd-Frank Act automatically subjected all bank holding companies and foreign banks with more than $50 billion in assets to enhanced prudential regulation. In 2017, the Economic Growth, Regulatory Relief, and Consumer Protection Act (P.L. 115-174) created a more \"tiered\" and \"tailored\" EPR regime for banks. It automatically exempted domestic banks with assets between $50 billion and $100 billion (five at present) from enhanced regulation. The Fed has discretion to apply most individual enhanced prudential provisions to the 11 domestic banks with between $100 billion and $250 billion in assets on a case-by-case basis if it would promote financial stability or the institutions' safety and soundness, and has proposed exempting them from several EPR requirements. The eight domestic banks that have been designated as Global-Systemically Important Banks (G-SIBs) and the five banks with more than $250 billion in assets or $75 billion in cross-jurisdictional activity remain subject to all Dodd-Frank EPR requirements. In addition, the Fed has proposed applying some EPR requirements on a progressively tiered basis to the 23 foreign banks with over $50 billion in U.S. assets and $250 billion in global assets.", "P.L. 115-174 also reduced the amount of capital that custody banks are required to hold against one of the EPR capital requirements, the supplementary leverage ratio (SLR). In addition, the Fed has issued a proposed rule that would reduce the amount of capital that G-SIBs are required to hold against the SLR. Finally, the Fed has proposed another rule that would combine capital planning under the stress tests with overall capital requirements for large banks.", "Collectively, these proposed changes would reduce, to varying degrees, capital and other advanced EPR requirements for banks with more than $50 billion in assets. In the view of the banking regulators and the supporters of P.L. 115-174, these changes better tailor EPR to match the risks posed by large banks. Opponents are concerned that the additional systemic and prudential risks posed by these changes outweigh the benefits to society of reduced regulatory burden, believing that the benefits will mainly accrue to the affected banks."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["\"Too big to fail\" (TBTF) is the concept that a financial firm's disorderly failure would cause widespread disruptions in financial markets and result in devastating economic and societal outcomes that the government would feel compelled to prevent, perhaps by providing direct support to the firm . Such firms are a source of systemic risk \u2014the potential for widespread disruption to the financial system, as occurred in 2008 when the securities firm Lehman Brothers failed.", "Although TBTF has been a perennial policy issue, it was highlighted by the near-collapse of several large financial firms in 2008. Some of the large firms were nonbank financial firms, but a few were depository institutions. To avert the imminent failures of Wachovia and Washington Mutual, the Federal Deposit Insurance Corporation (FDIC) arranged for them to be acquired by other banks without government financial assistance. Citigroup and Bank of America were offered additional preferred shares through the Troubled Asset Relief Program (TARP) and government guarantees on selected assets they owned. In many of these cases, policymakers justified government intervention on the grounds that the firms were \"systemically important\" (popularly understood to be synonymous with too big to fail). Some firms were rescued on those grounds once the crisis struck, although the government had no explicit policy to rescue TBTF firms beforehand.", "In response to the crisis, the Dodd-Frank Wall Street Reform and Consumer Protection Act (hereinafter, the Dodd-Frank Act; P.L. 111-203 ), a comprehensive financial regulatory reform, was enacted in 2010. Among its stated purposes are \"to promote the financial stability of the United States\u2026, [and] to end 'too big to fail,' to protect the American taxpayer by ending bailouts.\" The Dodd-Frank Act took a multifaceted approach to addressing the TBTF problem. This report focuses on one pillar of that approach\u2014the Federal Reserve's (Fed's) enhanced (heightened) prudential regulation for large banks and nonbank financial firms designated as systemically important by the Financial Stability Oversight Council (FSOC). For an overview of the TBTF issue and other policy approaches to mitigating it, see CRS Report R42150, Systemically Important or \"Too Big to Fail\" Financial Institutions , by Marc Labonte.", "The Dodd-Frank Act automatically subjected all bank holding companies and foreign banks with more than $50 billion in assets to enhanced prudential regulation (EPR). In addition, Basel III (a nonbinding international agreement that U.S. banking regulators implemented through rulemaking after the financial crisis) included several capital requirements that only apply to large banks. In 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act (referred to herein as P.L. 115-174 ) eliminated most EPR requirements for banks with assets between $50 billion and $100 billion. Banks that have been designated as Global-Systemically Important Banks (G-SIBs) by the Financial Stability Board (an international, intergovernmental forum) or have more than $250 billion in assets automatically remain subject to all EPR requirements, as modified. P.L. 115-174 gives the Fed discretion to apply most individual EPR provisions to banks with between $100 billion and $250 billion in assets on a case-by-case basis only if it would promote financial stability or the institution's safety and soundness.", "This report begins with a description of who is subject to enhanced prudential regulation and what requirements make up EPR. It then discusses several rules proposed by the Fed that would reduce EPR requirements for some large banks; some in response to P.L. 115-174 and some before it was enacted. "], "subsections": []}, {"section_title": "Who Is Subject to Enhanced Prudential Regulation?", "paragraphs": ["Under P.L. 115-174 , the application of EPR remains mainly based on asset size and charter type. Broadly speaking, only three types of financial charters allow financial institutions to accept insured deposits\u2014banks, thrifts, and credit unions. Banks operating in the United States can be U.S. or foreign based. Depository institutions are regulated much differently than other types of financial institutions. This section discusses whether or not EPR is applied to each of those types of institutions, as well as other types of financial firms. A detailed discussion of which provisions apply at which size threshold is discussed in the \" Higher, Tiered Thresholds \" section below."], "subsections": [{"section_title": "U.S. Banks", "paragraphs": [], "subsections": [{"section_title": "Banks and Bank Holding Companies", "paragraphs": ["By statute, enhanced regulation applies to large U.S. bank holding companies (BHCs). A BHC is used any time a company owns multiple banks, but the BHC structure also allows for a large, complex financial firm with depository banks to operate multiple subsidiaries in different financial sectors. In general, the regime's requirements are applied to all parts of the BHC, not just its banking subsidiaries. ", "Five large investment \"banks\" that operated in securities markets and did not have depository subsidiaries (and therefore were not BHCs) were among the largest, most interconnected U.S. financial firms and were at the center of events during the financial crisis. Two of the large investment banks, Goldman Sachs and Morgan Stanley, were granted BHC charters in 2008, whereas others failed (Lehman Brothers) or were acquired by BHCs (Merrill Lynch and Bear Stearns). As a result, all of the largest U.S. investment banks are now BHCs, subject to the enhanced prudential regime. ", "If a bank does not have a BHC structure, it is not subject to enhanced regulation. The Congressional Research Service (CRS) found two banks that are currently over the previous $50 billion threshold and do not have a BHC structure. One of the two, Zions, converted its corporate structure from a BHC to a standalone bank in 2018, reportedly in order to no longer be subject to EPR. Under Title I of the Dodd-Frank Act's \"Hotel California\" provision, which was unchanged by P.L. 115-174 , BHCs with more than $50 billion in assets that participated in TARP cannot escape enhanced regulation by debanking (i.e., divesting of their depository business) unless permitted to by FSOC. FSOC found that \"there is not a significant risk that Zions could pose a threat to U.S. financial stability,\" and permitted it to withdraw from EPR."], "subsections": []}, {"section_title": "Thrifts", "paragraphs": ["Similar to BHCs, thrift holding companies (THCs), also called savings and loan holding companies, have subsidiaries that accept deposits, make loans, and can also have nonbank subsidiaries. Although THCs are also regulated by the Fed, the EPR statute does not mention THCs. To date, enhanced prudential regulatory requirements have not been applied to large thrift (savings and loan) holding companies, with the exception of company-run stress tests. The Fed's 2018 proposed rule implementing P.L. 115-174 changes would subject THCs to EPR for the first time if they are not substantially engaged in insurance. Official regulatory data report four THCs with more than $100 billion in assets; three are substantially engaged in insurance, so only the one that is not (Charles Schwab) is subject to EPR. Two THCs have between $50 billion to $100 billion in assets, and are therefore not subject to EPR. "], "subsections": []}, {"section_title": "U.S. Institutions Subject to EPR Under P.L. 115-174", "paragraphs": ["The proposed rule that would implement P.L. 115-174 's changes to the $50 billion asset threshold creates four categories of banks based on their asset size and systemic importance, with increasingly stringent EPR requirements applied to each category as these characteristics increase. Table 1 shows which BHCs and THCs would currently be assigned to each category, as well as banks no longer subject to EPR because they hold between $50 billion and $100 billion in assets. A discussion of which requirements apply to each category is found in the \" Higher, Tiered Thresholds \" section below.", "Banks are assigned to categories based on size or other measures of complexity and interconnectedness, reflecting the relationship between those factors and systemic importance. The most stringent tier of regulation applies only to G-SIBs (Category I). Since 2011, the Financial Stability Board (FSB), an international forum that coordinates the work of national financial authorities and international standard-setting bodies, has annually designated G-SIBs based on the banks' cross-jurisdictional activity, size, interconnectedness, substitutability, and complexity. Currently, 30 banks are designated as G-SIBs worldwide, 8 of which are headquartered in the United States. Category II includes other banks with more than $700 billion in assets or more than $75 billion in cross-jurisdictional activity (and at least $100 billion in total assets). Currently, no bank meets the former test but one bank meets the latter test. Category III includes all other banks with $250 billion or more in assets or more than $75 billion in nonbank assets, weighted short-term funding, or off-balance sheet exposure (and at least $100 billion in total assets). Currently, all Category III banks meet the $250 billion asset test. Category IV includes banks with between $100 and $250 billion in assets who do not meet the criteria in one of the other categories."], "subsections": []}]}, {"section_title": "Foreign Banks Operating in the United States", "paragraphs": ["The enhanced prudential regime also applies to foreign banking organizations operating in the United States that meet the EPR asset threshold based on global assets. However, the implementing regulations, before P.L. 115-174 was enacted, have imposed most EPR requirements only on foreign banks with more than $50 billion in U.S. nonbranch, nonagency assets. Foreign banks with more than $50 billion in U.S. nonbranch, nonagency assets must form intermediate holding companies (IHCs) for their U.S. operations; those intermediate holding companies are essentially treated as equivalent to U.S. banks for purposes of applicability of the enhanced regime and bank regulation more generally. ", "P.L. 115-174 raised the EPR threshold for global assets, but did not introduce a threshold for U.S. assets of foreign banks. It clarified that the act did not affect the Fed's rule on IHCs for foreign banks with more than $100 billion in global assets or limit the Fed's authority to subject those banks to EPR. ", "Because the threshold for domestic banks has been raised, there is now a question of whether to raise the threshold for U.S. assets of foreign banks to maintain regulatory parity with U.S. banks. The Dodd-Frank Act states that enhanced regulation of foreign banks should \"give due regard to the principle of national treatment and equality of competitive opportunity; and take into account the extent to which the foreign financial company is subject on a consolidated basis to home country standards that are comparable\" to U.S. standards. The parity issue can be viewed from the perspective of U.S. assets or foreign assets. For example, should a foreign G-SIB with between $50 billion and $100 billion in U.S. assets have its U.S. operations regulated similarly to a U.S. bank with less than $100 billion in assets (i.e., not subject to EPR requirements) or to a U.S. G-SIB (i.e., subject to the most stringent EPR requirements)?", "Under proposed rules, the 23 foreign banks listed in Table 2 would currently be subject to some EPR requirements. Most foreign banks have less than $250 billion in U.S. assets, but the banks in Table 2 have more than $250 billion in global assets, and several are foreign G-SIBs. The proposed rules use $50 billion in U.S. assets as a minimum threshold for EPR, but are tiered so that most requirements only apply at higher thresholds. To determine which foreign banks are subject to which EPR requirements, the proposals would use total U.S. assets\u2014in contrast to existing EPR rules, which exempt assets in U.S. branches or agencies. As a result, more foreign banks would become subject to some EPR requirements under the proposal. In addition, over 80 foreign banks (including those in Table 2 ) would be required to submit resolution plans (or living wills) under a proposed rule, because they had more than $250 billion in worldwide assets and operate in the United States, regardless of the extent of their U.S. assets. ", "Hereinafter, the report will refer to BHCs, THCs, and foreign banking operations meeting the criteria described above as banks subject to EPR , unless otherwise noted. "], "subsections": []}, {"section_title": "Other Financial Firms", "paragraphs": ["Numerous other large financial firms operating in the United States are not BHCs and are not automatically subject to enhanced regulation, such as credit unions, insurance companies, government-sponsored enterprises (GSEs), securities holding companies, and nonbank lenders. However, the FSOC may designate any nonbank financial firm as a systemically important financial institution (SIFI) if its failure or activities could pose a risk to financial stability. Designated SIFIs are then subject to the Fed's EPR regime, which can be tailored to consider their business models. Since inception, FSOC has designated three insurers (AIG, MetLife, and Prudential Financial) and one other financial firm (GE Capital) as SIFIs. MetLife's designation was subsequently invalidated by a court decision, which the Trump Administration declined to appeal, and the other three designations were later rescinded by FSOC. In some cases, these former SIFIs had substantially altered or shrank their operations between designation and de-designation.", "In addition to the former SIFIs, a CRS search of the proprietary database S&P Capital IQ identified multiple insurance companies and GSEs with more than $250 billion in assets. A Credit Union Times database includes only one credit union with more than $50 billion in assets (Navy Federal Credit Union) and zero credit unions with more than $100 billion in assets. Many investment companies have more than $250 billion in assets under management; these are not assets they own, but rather assets that they invest at their customers' behest."], "subsections": []}]}, {"section_title": "What Requirements Must Large Banks Comply With Under Enhanced Regulation?", "paragraphs": ["All BHCs are subject to long-standing prudential (safety and soundness) regulation conducted by the Fed. The novelty in the Dodd-Frank Act was to create a group of specific prudential requirements that apply only to large banks. Some of these requirements related to capital and liquidity overlap with parts of the Basel III international agreement.", "Under Title I of the Dodd-Frank Act, the Fed is responsible for administering EPR. It promulgates regulations implementing the regime (based on recommendations, if any, made by FSOC) and supervises firms subject to the regime. The Dodd-Frank regime is referred to as enhanced or heightened because it applies higher or more stringent standards to large banks than it applies to smaller banks. It is a prudential regime because the regulations are intended to contribute toward the safety and soundness of the banks subject to the regime. The cost to the Fed of administering the regime is financed through assessments on firms subject to the regime.", "Some EPR provisions are intended to reduce the likelihood that a bank will experience financial difficulties, while others are intended to help regulators cope with a failing bank. Several of these provisions directly address problems or regulatory shortcomings that arose during the financial crisis. As of the date of this report, no bank has experienced financial difficulties since EPR came into effect, but the economy has not experienced a downturn in which financial difficulties at banks become more likely. Thus, the risk mitigation provisions that have shown robustness in an expansion have not yet proven to be robust in a downturn, while the provisions intended to cope with a failing bank remain untested. Finally, some parts of enhanced regulation cannot be evaluated because, as noted below, they still have not been implemented through final rules.", "The following sections provide more detail on the requirements that Title I of the Dodd-Frank Act (which will be referred to hereinafter as Title 1) and Basel III place on banks subject to EPR. Subsequent to initial implementation, numerous regulatory changes over the years have tailored the individual provisions discussed in this section to reduce their regulatory burden; this report does not provide a comprehensive catalog of those subsequent changes. "], "subsections": [{"section_title": "Stress Tests and Capital Planning", "paragraphs": ["Stress tests and capital planning are two enhanced requirements that have been implemented together. Title I requires company-run stress tests for any (bank or nonbank) financial firm with more than $10 billion in assets, which P.L. 115-174 raised to more than $250 billion in assets (with Fed discretion to apply to financial firms with between $100 billion and $250 billion in assets), and Fed-run (or \"supervisory\") stress tests (called DFAST) for any BHC or nonbank SIFI with more than $50 billion in assets, which P.L. 115-174 raised to more than $100 billion in assets. P.L. 115-174 also reduced the number of stress test scenarios and the frequency of company-run stress tests from semi-annually to periodically. Stress test and capital planning requirements were implemented through final rules in 2012, effective beginning in 2013. ", "Stress tests attempt to project the losses that banks would suffer under a hypothetical deterioration in economic and financial conditions to determine whether banks would remain solvent in a future crisis. Unlike general capital requirements that are based on current asset values, stress tests incorporate an adverse scenario that focuses on projected asset values based on specific areas of concern each year. For example in 2017, the adverse scenario is \"characterized by a severe global recession that is accompanied by a period of heightened stress in corporate loan markets and commercial real estate markets.\" In 2019, the Fed made changes to the stress test process to increase its transparency.", "Capital requirements are intended to ensure that a bank has enough capital backing its assets to absorb any unexpected losses on those assets without failing. Title I required enhanced capital requirements for banks with more than $50 billion in assets, which P.L. 115-174 raised to more than $250 billion in assets (with Fed discretion to apply to banks with between $100 billion and $250 billion in assets). Overall capital requirements were revamped through Basel III after the financial crisis (described below in the \" Basel III Capital Requirements \" section). Outside of Basel III, enhanced capital requirements were primarily implemented through capital planning requirements that are tied to stress test results. ", "The final rule for capital planning was implemented in 2011. Under the Comprehensive Capital Analysis and Review (CCAR), banks must submit a capital plan to the Fed annually. The capital plan must include a projection of the expected uses and sources of capital, including planned debt or equity issuance and dividend payments. The plan must demonstrate that the bank will remain in compliance with capital requirements under the stress tests. The Fed evaluates the plan on quantitative (whether the bank would have insufficient capital under the stress tests) and qualitative grounds (the adequacy of bank's risk management policies and processes).", "If the Fed rejects the bank's capital plan, the bank will not be allowed to make any capital distributions, including dividend payments, until a revised capital plan is resubmitted and approved by the Fed. In 2017, the Fed removed qualitative requirements from the capital planning process for banks with less than $250 billion in assets that are not complex. Each year, the Fed has required some banks to revise their capital plans or objected to them on qualitative or quantitative grounds, or due to other weaknesses in their processes. "], "subsections": []}, {"section_title": "Resolution Plans (\"Living Wills\")", "paragraphs": ["Policymakers claimed that one reason they intervened to prevent large financial firms from failing during the financial crisis was because the opacity and complexity of these firms made it too difficult to wind them down quickly and safely through bankruptcy. Title I requires banks with more than $50 billion in assets, which P.L. 115-174 raised to more than $250 billion in assets (with Fed discretion to apply to banks with between $100 billion and $250 billion in assets), to periodically submit resolution plans (popularly known as \"living wills\") to the Fed, FSOC, and FDIC that explain how they can safely enter bankruptcy in the event of their failures. The living wills requirement was implemented through a final rule in 2011, and it became fully effective at the end of 2013. The final rule required resolution plans to include details of the firm's ownership, structure, assets, and obligations; information on how the firm's depository subsidiaries are protected from risks posed by its nonbank subsidiaries; and information on the firm's cross-guarantees, counterparties, and processes for determining to whom collateral has been pledged. Proposed rules would reduce the frequency of living will submissions from annually to biennially for G-SIBs and triennially for other large banks.", "In the 2011 final rule, the regulators highlighted that the resolution plans would help them understand the firms' structure and complexity, as well as their resolution processes and strategies, including cross-border issues for banks operating internationally. The resolution plan is required to explain how the firm could be resolved under the bankruptcy code \u2014as opposed to being liquidated by the FDIC under the Orderly Liquidation Authority created by Title II of the Dodd-Frank Act. The plan is required to explain how the firm can be wound down in a stressed environment in a \"rapidly and orderly\" fashion without receiving \"extraordinary support\" from the government (as some firms received during the crisis) or without disrupting financial stability. To do so, the plan must include information on core business lines, funding and capital, critical operations, legal entities, information systems, and operating jurisdictions. ", "Resolution plans are divided into a public part that is disclosed and a private part that contains confidential information. Some banks have submitted resolution plans containing tens of thousands of pages. If regulators find that a plan is incomplete, deficient, or not credible, they may require the firm to revise and resubmit. If the firm cannot resubmit an adequate plan, regulators have the authority to take remedial steps against it\u2014increasing its capital and liquidity requirements; restricting its growth or activities; or ultimately taking it into resolution. Since the process began in 2013, multiple firms' plans have been found insufficient, including all eleven that were submitted and subsequently resubmitted in the first wave. In 2016, Wells Fargo became the first bank to be sanctioned for failing to submit an adequate living will."], "subsections": []}, {"section_title": "Liquidity Requirements", "paragraphs": ["Bank liquidity refers to a bank's ability to meet cash flow needs and readily convert assets into cash. Banks are vulnerable to liquidity crises because of the liquidity mismatch between illiquid loans and deposits that can be withdrawn on demand. Although all banks are regulated for liquidity adequacy, Title I requires more stringent liquidity requirements for banks with more than $50 billion in assets, which P.L. 115-174 raised to more than $250 billion in assets (with Fed discretion to apply to banks with between $100 billion and $250 billion in assets). These liquidity requirements are being implemented through three rules: (1) a 2014 final rule implementing firm-run liquidity stress tests, (2) a 2014 final rule implementing the Fed-run liquidity coverage ratio (LCR), and (3) a 2016 proposed rule that would implement the Fed-run net stable funding ratio (NSFR). The firm-run liquidity stress tests apply to domestic banks with more than $100 billion in assets under the Fed's proposed rule. More stringent versions of the LCR and NSFR apply to G-SIBs and Category II banks. A less stringent version applies to Category III banks, except those with significant insurance or commercial operations. Proposed rules would extend the LCR and NSFR to large foreign banks operating in the United States.", "The final rule implementing firm-run liquidity stress tests was issued in 2014, effective January 2015 for U.S. banks and July 2016 for foreign banks. The rule requires banks subject to EPR to establish a liquidity risk management framework involving a bank's management and board, conduct monthly internal liquidity stress tests, and maintain a buffer of high-quality liquid assets (HQLA). ", "The final rule implementing the liquidity coverage ratio was issued in 2014. The LCR came into effect at the beginning of 2015 and was fully phased in at the beginning of 2017. The LCR requires banks subject to EPR to hold enough HQLA to match net cash outflows over a 30-day period in a hypothetical scenario of market stress where creditors are withdrawing funds. An asset can qualify as a HQLA if it has lower risk, has a high likelihood of remaining liquid during a crisis, is actively traded in secondary markets, is not subject to excessive price volatility, can be easily valued, and is accepted by the Fed as collateral for loans. Different types of assets are relatively more or less liquid, and there is disagreement on what the cutoff point should be to qualify as a HQLA under the LCR. In the LCR, eligible assets are assigned to one of three categories, ranging from most to least liquid. Assets assigned to the most liquid category are given more credit toward meeting the requirement, and assets in the least liquid category are given less credit. Section 403 of P.L. 115-174 required regulators to place municipal bonds in a more liquid category, so that banks could get more credit under the LCR for holding them.", "The proposed rule to implement the net stable funding ratio was issued in 2016, and to date has not been finalized. The NSFR would require banks subject to EPR to have a minimum amount of stable funding backing their assets over a one-year horizon. Different types of funding and assets would receive different weights based on their stability and liquidity, respectively, under a stressed scenario. The rule would define funding as stable based on how likely it is to be available in a panic, classifies it by type, counterparty, and time to maturity. Assets that do not qualify as HQLA under the LCR would require the most backing by stable funding under the NSFR. Long-term equity would get the most credit toward fulfilling the NSFR, insured retail deposits get medium credit, and other types of deposits and long-term borrowing would get less credit. Borrowing from other financial institutions, derivatives, and certain brokered deposits would not qualify under the rule."], "subsections": []}, {"section_title": "Counterparty Exposure Limits", "paragraphs": ["One source of systemic risk associated with TBTF comes from \"spillover effects.\" When a large firm fails, it imposes losses on its counterparties. If large enough, the losses could be debilitating to the counterparty, thus causing stress to spread to other institutions and further threaten financial stability. Title I requires banks with more than $50 billion in assets, which P.L. 115-174 raised to more than $250 billion in assets (with Fed discretion to apply to banks with between $100 billion and $250 billion in assets), to limit their exposure to unaffiliated counterparties on an individual counterparty basis and to periodically report on their credit exposures to counterparties. Counterparty exposure limits remain mandatory, but P.L. 115-174 placed credit exposure reports at the Fed's discretion. In 2011, the Fed proposed rules implementing these provisions, but they were not included in subsequent final rules. In 2018, the Fed finalized a reproposed rule to implement a single counterparty credit limit (SCCL), effective in 2020; to date, the counterparty exposure reporting requirement has not been reproposed. ", "Counterparty exposure for all banks was subject to regulation before the crisis, but did not cover certain off balance sheet exposures or holding company level exposures. The SCCL is tailored to have increasingly stringent requirements as asset size increases. For banks with more than $250 billion in total assets that are not G-SIBs, net counterparty credit exposure is limited to 25% of the bank's capital. For G-SIBs, counterparty exposure to another G-SIB or a nonbank SIFI is limited to 15% of the G-SIB's capital and exposure to any other counterparty is limited to 25% of its capital. ", "The 2011 credit exposure reporting proposal would have required banks to regularly report on the nature and extent of their credit exposures to significant counterparties. These reports would help regulators understand spillover effects if firms experienced financial distress. There has been no subsequent rulemaking on credit exposure reporting since the 2011 proposal."], "subsections": []}, {"section_title": "Risk Management Requirements", "paragraphs": ["The board of directors of publicly traded companies oversees the company's management on behalf of shareholders. The Dodd-Frank Act required publicly traded banks with at least $10 billion in assets, which P.L. 115-174 raised to at least $50 billion in assets, to form risk committees on their boards of directors that include a risk management expert responsible for oversight of the bank's risk management. Title I also requires the Fed to develop overall risk management requirements for banks with more than $50 billion in assets. The Fed issued the final rule implementing this provision in 2014, effective in January 2015 for domestic banks and July 2016 for foreign banks. The rule requires the risk committee be led by an independent director. The rule requires banks with more than $50 billion in assets to employ a chief risk officer responsible for risk management, which the proposed rule implementing P.L. 115-174 leaves unchanged."], "subsections": []}, {"section_title": "Provisions Triggered in Response to Financial Stability Concerns", "paragraphs": ["Title I of the Dodd-Frank Act provides several powers for\u2014depending on the provision\u2014FSOC, the Fed, or the FDIC to use when the respective entity believes that a bank with more than $50 billion in assets or designated nonbank SIFI poses a threat to financial stability. Unless otherwise noted, P.L. 115-174 raises the threshold at which the powers can be applied to banks with $250 billion in assets, with no discretion to apply them to banks between $100 billion and $250 billion in assets. Unlike the enhanced regulation requirements described earlier in this section, financial stability provisions generally do not require any ongoing compliance and would be triggered only when a perceived threat to financial stability has arisen\u2014and none of these provisions have been triggered to date.", "Some of the following powers are similar to powers that bank regulators already have over all banks, but they are new powers over nonbank SIFIs. These powers are listed here because they, to varying degrees, expand regulatory authority over banks (or extend authority from bank subsidiaries to bank holding companies) with more than $250 billion in assets vis-a-vis smaller banks.", "FSOC Reporting Requirements. To determine whether a bank with more than $250 billion in assets poses a threat to financial stability, FSOC may require the bank to submit certified reports. However, FSOC may make information requests only if publicly available information is not available.", "Mitigation of Grave Threats to Financial Stability. When at least two-thirds of the FSOC find that a bank with more than $250 billion in assets poses a grave threat to financial stability, the Fed may limit the firm's mergers and acquisitions, restrict specific products it offers, and terminate or limit specific activities. If none of those steps eliminates the threat, the Fed may require the firm to divest assets. The firm may request a Fed hearing to contest the Fed's actions. To date, this provision has not been triggered, and the FSOC has never identified any bank as posing a grave threat.", "Acquisitions . Title I broadens the requirement for banks with more than $250 billion in assets to provide the Fed with prior notice of U.S. nonbank acquisitions that exceed $10 billion in assets and 5% of the acquisition's voting shares, subject to various statutory exemptions. The Fed is required to consider whether the acquisition would pose risks to financial stability or the economy.", "E mergency 15-to-1 Debt-to-Equity Ratio . For banks with more than $250 billion in assets, with Fed discretion to apply to banks with between $100 billion and $250 billion in assets, Title I creates an emergency limit of 15-to-1 on the bank's ratio of liabilities to equity capital (sometimes referred to as a leverage ratio ). The Fed issued a final rule implementing this provision in 2014, effective June 2014 for domestic banks and July 2016 for foreign banks. The ratio is applied only if a bank receives written warning from FSOC that it poses a \"grave threat to U.S. financial stability,\" and ceases to apply when the bank no longer poses a grave threat. To date, this provision has not been triggered.", "Early Remediation Requirements. Early remediation is the principle that financial problems at banks should be addressed early before they become more serious. Title I requires the Fed to \"establish a series of specific remedial actions\" to reduce the probability that a bank with more than $250 billion in assets experiencing financial distress will fail. This establishes a requirement for BHCs similar in spirit to the prompt corrective action requirements that apply to insured depository subsidiaries. Unlike prompt corrective action, early remediation requirements are not based solely on capital adequacy. As the financial condition of a firm deteriorates, statute requires the steps taken under early remediation to become more stringent, increasing in four steps from heightened supervision to resolution. The Fed issued a proposed rule in 2011 to implement this provision that to date has not been finalized. ", "Expanded FDIC Examination and E nforcement P owers . Title I expands the FDIC's examination and enforcement powers over certain large banks. To determine whether an orderly liquidation under Title II of the Dodd-Frank Act is necessary, the FDIC is granted authority to examine the condition of banks with more than $250 billion in assets. Title I also grants the FDIC enforcement powers over BHCs or THCs that pose a risk to the Deposit Insurance Fund. "], "subsections": []}, {"section_title": "Basel III Capital Requirements", "paragraphs": ["Parallel to the Dodd-Frank Act, Basel III reformed bank regulation after the financial crisis. U.S. bank regulators implemented this nonbinding international agreement through rulemaking. Basel III determined many of the current capital requirements applied to all U.S. banks. Capital requirements are intended to ensure that a bank has enough capital backing its assets to absorb any unexpected losses on those assets without resulting in the bank's insolvency. Basel III did not include enhanced capital requirements at the original $50 billion threshold, but it did include more stringent capital requirements for the largest banks. The following Basel III capital requirements apply only to large banks:", "S upplementary L everage R atio (SLR) . Leverage ratios determine how much capital banks must hold relative to their assets without adjusting for the riskiness of their assets. Banks with more than $250 billion in assets or more than $10 billion in foreign exposure must meet a 3% SLR, which differs from the leverage ratio that applies to all banks by including the bank's off-balance-sheet exposures. Unanticipated losses related to opaque off-balance-sheet exposures exacerbated uncertainty about banks' solvency during the financial crisis. In April 2014, U.S. bank regulators adopted a joint rule that would require the G-SIBs to meet an enhanced SLR of 5% at the holding company level to pay all discretionary bonuses and capital distributions and 6% at the depository subsidiary level to be considered well capitalized as of 2018. The amount of capital required by the SLR and to whom it applies would be modified by proposed rules discussed below.", "G-SIB Capital Surcharge. Basel III also required G-SIBs to hold relatively more capital than other banks in the form of a common equity surcharge of at least 1% to \"reflect the greater risks that they pose to the financial system.\" In July 2015, the Fed issued a final rule that began phasing in this capital surcharge in 2016. Currently, the surcharge applies to the eight G-SIBs, but under its rule, it could designate additional firms as G-SIBs, and it could increase the capital surcharge to as high as 4.5%. The Fed stated that under its rule, most G-SIBs would face a higher capital surcharge than required by Basel III. ", "Countercyclical Capital Buffer. The banking regulators also issued a final rule implementing a Basel III countercyclical capital buffer applied to banks with more than $250 billion in assets or more $10 billion in foreign exposure. The countercyclical buffer requires these banks to hold more capital than other banks when regulators believe that financial conditions make the risk of losses abnormally high. It has been set at zero since inception. Because the countercyclical buffer has not yet been in place for a full business cycle, it is unclear how likely it is that regulators would raise it above zero, and under what circumstances an increase would be triggered. ", "Total Loss-Absorbing Capacity (TLAC) . The Fed issued a 2017 final rule implementing a TLAC requirement for U.S. G-SIBs and U.S. operations of foreign G-SIBs effective at the beginning of 2019. The rule requires G-SIBs to hold a minimum amount of capital and long-term debt at the holding company level so that these equity and debt holders can absorb losses and be \"bailed in\" in the event of the firm's insolvency. This furthers the policy goal of avoiding taxpayer bailouts of large financial firms. TLAC would be affected by a proposed rule discussed below.", "These capital requirements determine how the largest banks must fund all of their activities on a day-to-day basis. In that sense, these requirements arguably have a larger ongoing impact on banks' marginal costs of providing credit and other services than most of the Title I provisions discussed in the last section that impose only fixed compliance costs on banks."], "subsections": []}, {"section_title": "Assessments", "paragraphs": ["The Dodd-Frank Act imposes various assessments on banks with more than $50 billion in assets. P.L. 115-174 raised the threshold for some of these assessments. As amended, fees are assessed on", "BHCs with more than $250 billion in assets (beginning in November 2019) and designated SIFIs to fund the Office of Financial Research; BHCs and THCs with assets over $100 billion and designated SIFIs to fund the cost of administering EPR. Assessments on BHCs and THCs with $100 billion to $250 billion in assets must reflect the tailoring of EPR; and BHCs with assets over $50 billion and designated SIFIs to repay any uncompensated costs borne by the government in the event of a liquidation under the Orderly Liquidation Authority. This assessment is imposed only after a liquidation occurs."], "subsections": []}]}, {"section_title": "Proposed Changes to Large Bank Regulation", "paragraphs": ["As of the date of this report, the Fed and the other bank regulators have proposed several rules that would modify EPR", "One set of rules, implementing Section 401 of P.L. 115-174 , would raise the asset thresholds for EPR. This rule would exempt banks with less than $100 billion in assets from EPR and reduce EPR requirements mostly for banks with between $100 billion and $250 billion in assets. A second proposed rule, implementing Section 402 of P.L. 115-174 , would reduce capital requirements under the SLR for three custody banks, two of which are G-SIBs. Two other rules were proposed independently of any legislative action One would combine elements of stress tests requirements and Basel III to create a stress capital buffer requirement for large banks, effectively reducing capital requirements mainly for large banks that are not G-SIBs. The other would reduce capital requirements under the SLR for G-SIBs by changing how the SLR is calculated. ", "This section summarizes these proposed rules and their projected effects."], "subsections": [{"section_title": "Higher, Tiered Thresholds", "paragraphs": ["Prior to the enactment of P.L. 115-174 , U.S. regulators described the prudential regulatory regime applying to all banks as tiered regulation , meaning that increasingly stringent regulatory requirements are applied as metrics, such as a bank's size, increase. These different tiers have been applied on an ad hoc basis\u2014in some cases, statute requires a given regulation to be applied at a certain size; in some cases, regulators have discretion to apply a regulation at a certain size; and in other cases, regulators must apply a regulation to all banks. In addition to $100 billion and $250 billion, notable thresholds found in bank regulation are $1 billion, $3 billion, $5 billion, and $10 billion. P.L. 115-174 expanded tiered regulation for EPR and other types of bank regulation (see text box).", "Even before enactment of P.L. 115-174, EPR was itself an example of tiered regulation, as it imposed requirements only on banks with more than $50 billion in assets, banks with $250 billion in assets, or G-SIBs, depending on the requirement. Before P.L. 115-174 , the Fed's rules had also tailored some of the EPR requirements for banks with more than $50 billion in assets, so that more stringent regulatory or compliance requirements were applied to banks with more than $250 billion in assets or G-SIBs, depending on the requirement. ", "Under P.L. 115-174 , EPR would become much more tiered and tailored by bank size. The Fed has proposed rules that would implement changes to bank asset thresholds and specific EPR requirements found in P.L. 115-174 and would make additional changes to EPR requirements using the discretionary authority provided in P.L. 115-174 . Under these proposed rules, EPR would impose progressively more stringent requirements across four categories of banks, as summarized in Table 3 . As proposed, the Fed used the discretion granted by P.L. 115-174 to exempt banks with $100 billion to $250 billion from most, but not all, EPR requirements unless they had other characteristics that made them qualify as Category II or III banks. Consistent with P.L. 115-174 , banks with under $100 billion would be exempted from all EPR requirements except those related to risk management.", "Under proposed rules, foreign banks would be placed in the same categories, based on their U.S. assets, with requirements for each category similar to those applied to U.S. banks. In most cases, compared to the status quo for foreign banks, EPR requirements for foreign banks in Category II and III (see Table 2 ) would remain largely unchanged, whereas foreign banks with an IHC in Category IV would be exempted from or face less stringent versions of most EPR requirements, depending on the requirement. Most requirements would continue to be applied to the U.S. IHC, but a few would apply to all U.S. operations, including U.S. branches and agencies. Because assets of U.S. branches and agencies were not used to determine who was subject to EPR previously, the proposed rule would apply a few EPR requirements to foreign banks that were not previously subject to EPR. But overall the proposed rules would mostly continue to defer to home country regulation for foreign banks operating in the United States that do not qualify as Category II or III banks."], "subsections": []}, {"section_title": "Stress Capital Buffer", "paragraphs": ["Stress tests and capital planning requirements play a specific role in EPR\u2014they provide the Fed with an assessment of whether large banks have enough capital to withstand another crisis, as simulated using a specific adverse scenario developed by the Fed. This is similar to the role of capital requirements more generally and creates some overlap and redundancy between the two. More generally, the Fed points out that banks with more than $100 billion in assets must simultaneously comply with 18 capital requirements and G-SIBs must simultaneously comply with 24 different capital requirements, each addressing a separate but related risk.", "To try to minimize what it perceives as redundancy between these various measures, the Fed has proposed a rule to combine elements of the stress tests and the Basel III requirements. Under the proposed rule, banks with more than $100 billion in assets would have to simultaneously comply with 8 capital requirements and G-SIBs would have to simultaneously comply with 14 capital requirements. The proposed rule would accomplish this by eliminating 5 requirements tied to the \"adverse\" scenario in the stress tests, which the Fed is allowed to do under P.L. 115-174 , and by combining 4 requirements tied to the \"severely adverse\" stress tests with 4 Basel III capital requirements.", "Under current Basel III risk-weighted capital requirements, all banks must hold a common equity capital conservation buffer (CCB) equal to 2.5% of their risk-weighted assets (on top of the minimum amount of common equity, Tier 1, and total capital required) to avoid limitations on capital distributions. They also must meet an unweighted leverage capital requirement. Under capital planning requirements, banks currently must hold enough capital to still meet the minimum amount required under the common equity, Tier 1, and total capital, and leverage requirements after their stress test losses, planned capital distributions (such as dividends and share buybacks), and projected balance sheet growth (because an increase in assets requires a proportional increase in capital). ", "The proposed rule would replace these separate requirements with a combined stress capital buffer (SCB) requirement that banks hold enough capital to cover stress test losses and dividends or 2.5% of risk-weighted assets, whichever is larger (see Figure 1 ). The former is less restrictive than what banks face if their projected capital levels fall below the minimum under current stress test requirements. The Fed has provided three justifications for making these requirements less stringent than the current capital planning requirements. First, the Fed argues that because capital distributions would automatically face restrictions if the proposed stress capital buffer was not met, it would no longer be necessary for firms to hold enough capital to meet all planned capital distributions. However, distributions are not entirely forbidden unless the stress capital buffer falls below 0.625%. Second, the Fed argues for removing stock repurchases from capital planning on the grounds that only dividends are likely to be continued as planned in a period of financial stress. Finally, the Fed argues that its previous assumption that balance sheets continue to grow in a stressed environment was an unreasonable one. ", "Because the Fed decided that banks would no longer have to hold capital to account for capital distributions other than dividends and balance sheet growth, they have reduced capital requirements relative to current stress tests for non G-SIBs. However, whether the stress capital buffer would be a lower capital requirement than the stress tests and the risk-weighted Basel III requirements it is replacing depends on whether losses under the stress tests were greater than 2.5%. If they were less than 2.5%, then a bank is required to hold the same amount of capital under the proposal as currently under the capital conservation buffer. If they were more than 2.5%, then a bank is required to hold less capital under the proposal than currently under the stress tests. ", "Under the proposal, banks would also face a stress leverage buffer in lieu of the leverage ratio. The stress leverage buffer would require large banks to hold Tier 1 capital equal to stress tests losses and dividends, but the leverage buffer would not include any minimum (see Figure 2 ). Currently, the leverage ratio does not include a buffer requirement, although banks must hold an additional 1% of capital to be considered well capitalized under prompt-corrective action requirements. So in this case, whether the stress leverage buffer would be a lower capital requirement than the stress tests and Basel III leverage requirements it is replacing depends on whether losses, planned capital distributions, and projected balance sheet growth under the stress tests were greater than 1%\u2014which the Fed reports is generally the case. ", "These proposed buffers would work similarly to the CCB, in that capital restrictions would be automatically triggered if a bank's capital level falls below the buffers. It would not feature the annual quantitative \"pass/fail\" announcement that is a current feature of the stress tests.", "The Fed calculated what would have happened if this proposed rule had been in place in recent years. It found that the proposed rule would have reduced required capital for large banks that are not G-SIBs (because the stress test is currently the binding constraint) by between $10 billion and $45 billion and would have required G-SIBs to hold the same or more capital (because the G-SIB surcharge is being added to the stress capital buffer); overall, capital requirements for G-SIBs would have increased by between $10 billion and $50 billion. The Fed also found that all banks would have had enough actual capital in those years to meet the SCB requirement. "], "subsections": []}, {"section_title": "Treatment of Custody Banks Under the Supplementary Leverage Ratio", "paragraphs": ["Custody banks provide a unique set of services not offered by many other banks, but are generally subject to the same regulatory requirements as other banks. Custody banks hold securities; receive interest or dividends on those securities; provide related administrative services; and transfer ownership of securities on behalf of financial market asset managers, including investment companies such as mutual funds. Asset managers access central counterparties and payment systems via custodian banks. Custodian banks play a passive role in their clients' decisions, carrying out instructions. As discussed in the \" Basel III Capital Requirements \" section above, under leverage ratios, including the SLR, the same amount of capital must be held against any asset, irrespective of risk to ensure that banks have a minimum amount of total capital. Banks must hold capital against their deposits at central banks under the leverage or supplemental leverage ratio, although there is no risk associated with those deposits. Custody banks argue that this disproportionately burdens them because of their business model. Other observers counter that the purpose of the leverage ratio is to measure the amount of bank capital against assets regardless of risk, and to exempt \"safe\" assets undermines the usefulness of that measure. ", "Section 402 of P.L. 115-174 allows for custody banks\u2014defined by the legislation as banks predominantly engaged in custody, safekeeping, and asset servicing activities\u2014to no longer hold capital against funds deposited at certain central banks to meet the SLR, up to an amount equal to customer deposits linked to fiduciary, custodial, and safekeeping accounts. All other banks would continue to be required to hold capital against central bank deposits. In April 2019, the banking regulators proposed a rule to implement this provision.", "Custody banks are generally an industry concept, not a regulatory concept. P.L. 115-174 leaves it to bank regulators to define which banks meet the definition of \"predominantly engaged in custody, safekeeping, and asset servicing activities.\" The proposed rule uses a ratio of at least 30 times more assets under custody than the banks' assets to determine \"predominantly engaged.\" By this measure, three banks would qualify\u2014Bank of New York Mellon, Northern Trust, and State Street. Depending on who qualifies in the final rule, other large banks that offer custody services but do not qualify for relief under the \"predominantly engaged\" definition may be at a relative disadvantage under this provision. Under the proposed rule, Northern Trust would be able to reduce its capital by $3 for every $100 it deposits at central banks, and Bank of New York Mellon and State Street (as G-SIBs) would be able to reduce their capital by $6 for every $100 of banking subsidiary deposits at central banks\u2014although the latter two would face a lower leverage ratio under the enhanced SLR proposed rule discussed in the next section. ", "The proposed rule implementing Section 402 estimates that the three eligible custody banks would be granted an exclusion equivalent to 21% to 30% of their assets and be able to reduce their capital requirements at the holding company level under the SLR by an aggregate $8 billion. However, the proposed rule states that the SLR was not the binding capital requirement for the custody banks at the holding company level, but it was the binding requirement at the depository level for two of the banks, as of the third quarter of 2018. As a result, capital requirements would have declined by a combined $7 billion or 23% for those two banks had the rule been in effect."], "subsections": []}, {"section_title": "Incorporating the G-SIB Surcharge into the Enhanced Supplementary Leverage Ratio and the Total Loss Absorbing Capacity", "paragraphs": ["As noted in the \" Basel III Capital Requirements \" section, G-SIBs must currently comply with a higher SLR than other banks with $250 billion in assets. For G-SIBs, the current enhanced SLR is set at 5% at the holding company level and 6% for the depository subsidiary to be considered well capitalized.", "In April 2018, the Fed and the Office of the Comptroller of the Currency (OCC) proposed a rule to modify the enhanced SLR for G-SIBs. Instead of 5% and 6%, respectively, the enhanced SLR would now be set for each G-SIB at 3% plus half of its G-SIB surcharge for both the holding company and the depository subsidiary. In this way, the amount of capital required to be held by G-SIBs would increase with their systemic importance. Because each G-SIB has a surcharge that is less than 4% or 6%, respectively, the proposed rule would reduce capital requirements under the enhanced SLR for each G-SIB to between 3.75% and 4.75%, depending on the bank. Figure 3 compares the current SLR requirement for G-SIBs to the anticipated SLR requirement for each G-SIB if the proposed rule were finalized.", "Whether this reduces how much capital the G-SIBs are required to hold depends on whether the SLR is the binding capital ratio. The Fed reported that in 2017, the SLR was the binding ratio for each G-SIB's bank subsidiary. Thus, the proposed rule would have reduced how much capital each G-SIB had to hold at the subsidiary level by $121 billion in total. The effect on the overall BHC would have been much smaller. At the holding company level, the proposed rule would have reduced required capital by $400 million in total.", "The Fed argues that it is undesirable for the SLR to be the binding capital requirement because it is intended to act as a backstop if risk-weighted requirements fail. If the SLR is the binding ratio, banks have more incentive to hold riskier assets. To avoid having the SLR be the binding ratio, banking regulators could raise risk-weighted capital requirements or reduce the SLR, as is proposed. The Fed estimates that under the proposal, the SLR would still be the binding ratio for three G-SIBs.", "The proposed rule would make similar changes to G-SIBs' TLAC requirement. Currently, G-SIBs must meet a 9.5% leverage buffer under TLAC. Under the proposed rule, G-SIBs would be required to meet a leverage buffer equal to 7.5% plus half of their G-SIB surcharge. Because all G-SIBs currently have a surcharge below 4%, this would reduce their TLAC requirement. The proposed rule would also make a similar change to the TLAC long-term debt requirement for G-SIBs."], "subsections": []}, {"section_title": "Evaluating Proposed Changes", "paragraphs": ["Collectively, recent proposed changes would, to varying degrees, reduce capital and other advanced EPR requirements for banks with more than $50 billion in assets. In the view of the banking regulators and the supporters of P.L. 115-174 , these changes better tailor EPR to match the risks that large banks pose. Opponents are concerned that the additional systemic and prudential risks these changes pose outweigh the benefits to society of reduced regulatory burden, believing that the benefits will mainly accrue to the affected banks. One way these changes can be evaluated is by comparing the benefits of EPR to its costs.", "According to Section 165 of the Dodd-Frank Act, the purpose of enhanced regulation is \"to prevent or mitigate risks to the financial stability of the United States that could arise from the material financial distress or failure, or ongoing activities, of large, interconnected financial institutions.\" General prudential regulation applying to all banks is intended to be microprudential , focusing mainly on the individual institution's safety and soundness. Enhanced regulation is intended to be macroprudential , focusing mainly on the broader systemic risk that large institutions pose. In particular, it is meant to address concerns that large banks are TBTF. Enhanced regulation is not necessarily mutually exclusive with other policy approaches to eliminating TBTF, although combining approaches could dilute any single approach's effectiveness. Different parts of the Dodd-Frank Act pursue several different approaches to eliminating TBTF.", "In the case of proposed changes that would not apply to G-SIBs, the main question from a systemic risk perspective is whether firms that have more than $50 billion in assets but are not G-SIBs are a source of systemic risk. If a bank does not pose systemic risk or is not perceived as TBTF, the main benefit of enhanced regulation is not present, \"and it is subjected to unnecessary costs without any offsetting benefits.\" Although there is widespread consensus that G-SIBs pose the most systemic risk, there is little agreement on how much, if any, systemic risk is posed by the next tier of institutions. Ultimately, the risk to financial stability posed by a large bank failing\u2014and the efficacy of EPR in mitigating that risk\u2014cannot be known for certain until a large bank fails, and no failure has occurred since the crisis.", "Quantifying the benefits of EPR is difficult because the benefits of preventing another financial crisis are large, but the probability of another crisis at any given time is small. Furthermore, the ability to isolate the effects of any particular provision on financial stability is hindered because maintaining financial stability likely depends on the joint effects of a number of policies. The effect of various proposals on systemic risk may jointly be greater than the sum of their individual parts.", "Although systemic risk mitigation is the main purpose of enhanced regulation, there are also other potential benefits that could be lost by reducing the number of banks subject to it. First, enhanced regulation could reduce the likelihood that a bank's failure would result in taxpayer exposure to FDIC insurance losses or due to \"bailouts.\" For example, the government lost money on TARP investments following the financial crisis in some midsized institutions (such as Ally Financial and CIT Group, which had between $50 billion and $250 billion in assets) although they were not viewed as systemically important. An Inspector General report found that if Washington Mutual, which was taken into receivership in September 2008, had been liquidated, it would have depleted the entire FDIC deposit insurance fund. Second, EPR could reduce the likelihood of a bank failure that did not pose systemic risk but could still result in localized or sectoral disruptions to the availability of credit and the provision of financial services. Third, some have argued that some enhanced prudential requirements (e.g., risk committees, chief risk officers, company-run stress tests) represent good risk management practices that any large, well-managed firm should apply in the interest of shareholders.", "Comparing the magnitude of benefits to the costs EPR imposes involves additional difficulty. In general, enhanced prudential requirements impose costs on large banks. However, the extent to which those costs are passed on to customers potentially depends on a variety of economic factors, such as the degree of market competition and the price sensitivity of customers. Furthermore, from an economic net benefit perspective, the cost to large banks is less relevant than the overall effects on the cost and availability of credit throughout the financial system. If banks subject to EPR face higher costs, then more credit will be supplied by other financial firms, at least partially offsetting the reduction in credit from banks subject to EPR. Some of these firms will be small banks, but some financial intermediation could also migrate from large banks to firms that are not regulated for safety and soundness. Whether overall systemic risk is higher or lower if financial activity migrates from large banks subject to EPR to less regulated sectors is beyond the scope of this report. But in that sense, even if a heightened prudential regime worked as planned, net benefits (i.e., reduction of overall systemic risk) could be smaller than anticipated.", "The possibility that TBTF banks create market distortions creates additional considerations. Normally, higher costs imposed by regulation reduce economic efficiency, which must be balanced against the benefits they provide. However, if TBTF banks create moral hazard\u2014the theory that if TBTF firms expect that failure will be prevented, they have an incentive to take greater risks than they otherwise would because they are shielded from at\u00a0least some negative consequences of those risks (a market failure that reduces efficiency), then regulatory costs may increase efficiency (from a societal perspective) by reducing risk-taking. Put differently, if there is a TBTF \"subsidy,\" then enhanced regulation may reduce that subsidy by partially offsetting the funding advantage that some believe is caused by moral hazard. On these grounds, the costs and benefits of tailoring EPR or removing some banks from EPR will depend crucially on which banks are TBTF\u2014a question that cannot be answered definitively until a bank fails. ", "Tailoring also addresses the concern that enhanced regulation poses disproportionately greater compliance costs on smaller banks than on the largest banks. Some EPR requirements are highly complex and more costly to comply with. Proponents of the recent proposals believe that EPR could be modified to reduce costs for banks that are not TBTF without a substantial decline in benefits, while opponents disagree. "], "subsections": []}]}]}}
{"id": "R41057", "title": "Small Business Administration Microloan Program", "released_date": "2019-03-08T00:00:00", "summary": ["The Small Business Administration's (SBA's) Microloan program provides direct loans to qualified nonprofit intermediary lenders who, in turn, provide \"microloans\" of up to $50,000 to small businesses and nonprofit child care centers. It also provides marketing, management, and technical assistance to microloan borrowers and potential borrowers. Authorized in 1991 as a five-year demonstration project, it became operational in 1992, and was made permanent, subject to reauthorization, in 1997.", "The Microloan program is designed to assist women, low-income, veteran, and minority entrepreneurs and small business owners by providing them small-scale loans for working capital or the acquisition of materials, supplies, or equipment. In FY2018, Microloan intermediaries provided 5,459 microloans totaling $76.8 million. The average Microloan was $14,071 and had a 7.6% interest rate.", "Critics of the SBA's Microloan program argue that it is expensive relative to alternative programs, duplicative of the SBA's 7(a) loan guaranty program, and subject to administrative shortfalls. The program's advocates argue that it assists many who otherwise would not be served by the private sector and is an important source of capital and training assistance for low-income, women, and minority business owners.", "Congressional interest in the Microloan program has increased in recent years, primarily because microloans are viewed as a means to assist very small businesses, especially women- and minority-owned startups, to get loans that enable them to create and retain jobs. Job creation, always a congressional interest, has taken on increased importance given continuing concerns about job growth during the current economic recovery.", "This report opens with a discussion of the rationale provided for having a Microloan program, describes the program's eligibility standards and operating requirements for lenders and borrowers, and examines the arguments presented by the program's critics and advocates. It then discusses P.L. 111-240, the Small Business Jobs Act of 2010, which increased the Microloan program's loan limit for borrowers from $35,000 to $50,000, and the aggregate loan limit for intermediaries after their first year of participation in the program from $3.5 million to $5 million.", "It also discusses P.L. 115-141, the Consolidated Appropriations Act, 2018, which, among other provisions, relaxed requirements on Microloan intermediaries that prohibited them from spending more than 25% of their technical assistance grant funds on prospective borrowers and more than 25% of those grant funds on contracts with third parties to provide that technical assistance. The act increased those percentages to 50% (originally in H.R. 2056, the Microloan Modernization Act of 2017, and S. 526, its companion bill in the Senate). In addition, P.L. 115-232, the John S. McCain National Defense Authorization Act for Fiscal Year 2019, among other provisions, increased the Microloan program's aggregate loan limit for intermediaries after their first year of participation in the program from $5 million to $6 million."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Small Business Microloans and Training Assistance", "paragraphs": ["The Small Business Administration (SBA) administers programs that support small businesses, including loan guarantees to lenders to encourage them to provide loans to small businesses \"that might not otherwise obtain financing on reasonable terms and conditions\" and grants to nonprofit organizations to provide marketing, management, and technical training assistance to small business owners. Historically, one of the justifications presented for funding the SBA's loan guarantee programs has been that small businesses can be at a disadvantage, compared with other businesses, when trying to obtain access to sufficient capital and credit. It has been argued that this disadvantage is particularly acute for startups and microbusinesses (firms with fewer than five employees):", "Traditional lending institutions, such as banks and investors, are unlikely to offer loans and investment capital to microfirms due to a variety of reasons. One barrier to microlending is a concern that startups and smaller enterprises are risky investments since growing businesses typically exhibit erratic bursts of growth and downturn. The perceived risk of these types of companies reduces the chances of a microbusiness to obtain financing. Another issue is that microbusinesses by and large require smaller amounts of capital, and thus banks or investment companies often believe that it is not efficient use of their time or resources, nor will they receive a substantive return on investment from such a small loan amount. ", "An Urban Institute survey of SBA 7(a), 504/Certified Development Company (504/CDC), Small Business Investment Company (SBIC), and Microloan borrowers conducted in 2007 found that Microloan borrowers reported having the most difficulty in finding acceptable financing elsewhere. Less than one-third (31%) of Microloan borrowers reported that they would have been able to find acceptable financing elsewhere, compared with 35% of SBIC borrowers, 40% of 7(a) borrowers, and 48% of 504/CDC borrowers.", "Since its inception in 1953, the SBA has provided loan guarantees to encourage lenders to issue small businesses loans. Interest in creating a separate loan program to address the specific needs of startups and microbusinesses increased during the 1980s, primarily due to the growth and experience of microlending institutions abroad and evidence concerning private lending practices that led Congress to conclude that a new loan program was necessary \"to reach very small businesses that were not being served by traditional lenders of SBA's credit programs.\"", "To address the perceived disadvantages faced by very small businesses in gaining access to capital, Congress authorized the SBA's Microloan lending program in 1991 ( P.L. 102-140 , the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1992). The program became operational in 1992. Its stated purpose is", "to assist women, low-income, veteran ... and minority entrepreneurs and business owners and other individuals possessing the capability to operate successful business concerns; to assist small business concerns in those areas suffering from a lack of credit due to economic downturns; ... to make loans to eligible intermediaries to enable such intermediaries to provide small-scale loans, particularly loans in amounts averaging not more than $10,000, to start-up, newly established, or growing small business concerns for working capital or the acquisition of materials, supplies, or equipment; [and] to make grants to eligible intermediaries that, together with non-Federal matching funds, will enable such intermediaries to provide intensive marketing, management, and technical assistance to microloan borrowers. ", "The SBA's Microloan lending program was authorized initially as a five-year demonstration project. It was made permanent, subject to reauthorization, in 1997 ( P.L. 105-135 , the Small Business Reauthorization Act of 1997).", "Congressional interest in the Microloan program has increased in recent years, primarily because microloans are viewed as a means to assist very small businesses, especially women- and minority-owned startups, obtain loans that enable them to create jobs. Job creation and preservation, always a congressional interest, has taken on increased importance given continuing concerns about job growth.", "This report describes the Microloan program's eligibility standards and operating requirements for lenders and borrowers and examines the arguments presented by the program's critics and advocates. It also examines changes to the program authorized by P.L. 111-240 , the Small Business Jobs Act of 2010, P.L. 115-141 , the Consolidated Appropriations Act, 2018, and P.L. 115-232 , the John S. McCain National Defense Authorization Act for Fiscal Year 2019.", "P.L. 111-240 authorized the Secretary of the Treasury to establish a $30 billion Small Business Lending Fund (SBLF) to encourage community banks to provide small business loans ($4.0 billion was issued), a $1.5 billion State Small Business Credit Initiative to provide funding to participating states with small business capital access programs, and about $12 billion in tax relief for small businesses. It also authorized changes to the SBA's loan guaranty programs, including increasing the Microloan program's loan limit for borrowers from $35,000 to $50,000, and the aggregate loan limit for intermediaries after their first year of participation in the program from $3.5 million to $5 million. It also authorized the SBA to waive, in whole or in part through FY2012, the nonfederal share requirement for loans to the Microloan program's intermediaries and for grants made to Microloan intermediaries for small business marketing, management, and technical assistance for up to a fiscal year. ", "P.L. 115-141 , among other provisions, relaxed requirements on Microloan intermediaries that prohibited them from spending more than 25% of their technical assistance grant funds on prospective borrowers and more than 25% of those grant funds on contracts with third parties to provide that technical assistance. The act increased those percentages to 50% (originally in H.R. 2056 , the Microloan Modernization Act of 2017, and S. 526 , its companion bill in the Senate). ", "Also, P.L. 115-232 , among other provisions, increased the Microloan program's aggregate loan limit for intermediaries after their first year of participation in the program from $5 million to $6 million (originally in H.R. 2056 , the Microloan Modernization Act of 2017, and S. 526 , its companion bill in the Senate).", "This report also discusses several bills introduced during the 114 th and 115 th Congresses. For example, during the 114 th Congress,", "S. 1445 , the Microloan Act of 2015, would have removed the requirements that no more than 25% of Microloan technical assistance grant funds may be used to provide information and technical assistance to prospective borrowers or on third-party contracts to provide that assistance. It would have also eliminated the Microloan program's minimum state allocation formula. H.R. 2670 , the Microloan Modernization Act of 2015, and S. 1857 , the Senate companion bill, would have increased the Microloan program's aggregate loan limit for intermediaries after their first year of participation in the program from $5 million to $6 million, increased the program's repayment terms from not more than 6 years to not more than 10 years for loans greater than $10,000, and required the SBA Administrator to establish a rule enabling intermediaries to apply for a waiver of the requirement that no more than 25% of Microloan technical assistance grant funds may be used to provide information and technical assistance to prospective borrowers. The House passed H.R. 2670 on July 13, 2015. S. 2850 , the Microloan Program Modernization Act of 2016, would have increased the Microloan program's aggregate loan limit for intermediaries after their first year of participation in the program from $5 million to $6 million and, among other provisions, eliminated the requirements that intermediaries spend no more than 25% of Microloan technical assistance grant funds on technical assistance to prospective borrowers and no more than 25% of those funds on third party contracts for technical assistance.", "During the 115 th Congress,", "H.R. 2056 , the Microloan Modernization Act of 2017, and S. 526 , its companion bill in the Senate would, as introduced, increase the Microloan program's aggregate loan limit for intermediaries after their first year of participation in the program from $5 million to $6 million and, among other provisions, eliminate the requirement that intermediaries spend no more than 25% of Microloan technical assistance grant funds on technical assistance to prospective borrowers and no more than 25% of those funds on third-party contracts for technical assistance.", "H.R. 2056 and S. 526 were amended in committee to require intermediaries to spend no more than 50% of Microloan technical assistance grant funds on technical assistance to prospective borrowers and no more than 50% of those funds on third-party contracts for technical assistance. The House bill, as amended, was favorably reported by the House Committee on Small Business on July 12, 2017, and agreed to by the House on July 24, 2017, by voice vote. The Senate bill was favorably reported by the Senate Committee on Small Business and Entrepreneurship on March 19, 2018. ", "As mentioned previously, the 50% thresholds were included in P.L. 115-141 and the increase from $5 million to $6 million for the Microloan program's aggregate loan limit for intermediaries after their first year of participation was included in P.L. 115-232 ."], "subsections": []}, {"section_title": "The SBA Microloan Program: Funding, Eligibility Standards, Program Requirements, and Statistics", "paragraphs": ["Unlike the SBA's 7(a) and 504/CDC loan guarantee programs, the SBA Microloan program does not guarantee loans. Instead, it provides direct loans to qualified nonprofit intermediary Microloan lenders who, in turn, provide \"microloans\" of up to $50,000 to small business owners, entrepreneurs, and nonprofit child care centers. There are currently 144 active Microloan intermediaries serving 49 states, the District of Columbia, and Puerto Rico."], "subsections": [{"section_title": "Funding", "paragraphs": ["The Microloan program's administrative costs (anticipated to be $47.66 million in FY2018) are funded through the SBA's salaries and expenses and business loan administration accounts. In addition, each year the SBA receives an appropriation for credit subsidies for its direct lending (Microloan) program. ", "Business loan credit subsidies represent the net present value of cash flows to and from the SBA over the life of the loan portfolio. For guaranteed loans, the net present value of cash flows is primarily affected by the difference between the cost of purchasing loans that have defaulted and the revenue generated from fees and collateral liquidation. For direct (Microloan) lending, the net present value of cash flows is primarily affected by the cost of offering below market interest rates to intermediaries because the cost of purchasing loans that have defaulted is typically relatively small because intermediaries are required to maintain a loan loss reserve. In addition, the SBA does not charge intermediaries fees.", "In FY2019, the SBA was provided $4.0 million, to remain available until expended, for direct (Microloan) business loan credit subsidies. This appropriation was expected to support about $42.0 million in lending to intermediaries.", "The SBA received an appropriation of $31.0 million in FY2019 for grants to selected Microloan intermediaries and qualified \"non-lending technical assistance providers\" to provide Microloan borrowers and prospective borrowers marketing, management, and technical training assistance. ", "As shown in Table 1 , Microloan intermediaries provided counseling services to 19,600 small businesses in FY2017. The data indicate that the number of small businesses served by the Microloan technical assistance program has generally increased in recent years. "], "subsections": []}, {"section_title": "Intermediary Microloan Lender Eligibility Standards", "paragraphs": ["To become a qualified intermediary Microloan lender, an applicant must", "be organized as a nonprofit community development corporation or other entity, a consortium of nonprofit community development corporations or other entities, a quasigovernmental economic development corporation, or an agency established by a Native American Tribal Government; be located in the United States, including the Commonwealth of Puerto Rico, the U.S. Virginia Islands, Guam, and American Samoa; have made and serviced short-term, fixed rate loans of not more than $50,000 to newly established or growing small businesses for at least one year; and have at least one year of experience providing technical assistance to its borrowers. ", "If accepted into the program by the SBA, an intermediary may borrow no more than $750,000 from the SBA during its first year of participation. After the first year, the maximum loan amount is $2.5 million. By law, an intermediary's total outstanding Microloan program debt must not exceed $6 million.", "The SBA approves and lends funds, subject to the availability of appropriations, to intermediaries based on the order in which applications are received. The amount provided is subject to two statutory limitations.", "No more than 300 intermediaries may participate in the Microloan program at any given time. During the first six months of each fiscal year, subject to the availability of appropriations, at least $800,000 or 1/55 th of available loan funds (whichever is less) is required to be made available for loans to intermediaries in each state (including the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, and American Samoa).", "Any applications that cannot be funded during the first six months \"due to geographic limitations will be kept on file in the order they were received\" and, subject to the availability of funds, \"will be funded during the seventh month of the fiscal year [April].\" If the amount of requested loan funds exceeds the amount of available funds, the SBA \"may hold back up to 20% of available loan funds to ensure that due consideration is given to new intermediaries and those having the greatest impact to underserved markets.\" Also, if the amount of requested loan funds from new intermediaries exceeds the amount of available funds, the SBA \"may choose to select a new intermediary in an underserved location (a location that is currently unserved by an SBA Microloan Program Intermediary Lender), as determined by the Agency, over a new applicant in an area that is already served by one or more existing Intermediaries.\" "], "subsections": []}, {"section_title": "Intermediary Microloan Lender Program Requirements", "paragraphs": ["Intermediaries are not required to make any interest payments on the Microloan during the first year, but interest accrues from the date that the SBA disburses the loan proceeds to the intermediary. After that, the SBA determines the schedule for periodic payments. Loans must be repaid within 10 years.", "The SBA charges intermediaries an interest rate that is based on the five-year Treasury rate, adjusted to the nearest one-eighth percent (called the Base Rate), less 1.25% if the intermediary maintains an historic portfolio of Microloans averaging more than $10,000, and less 2.0% if the intermediary maintains an historic portfolio of Microloans averaging $10,000 or less. The Base Rate, after adjustment, is called the Intermediary's Cost of Funds. The Intermediary's Cost of Funds is initially calculated one year from the date of the note and is reviewed annually and adjusted as necessary (called recasting). The interest rate cannot be less than zero.", "Intermediaries are required to contribute not less than 15% of the loan amount in cash from nonfederal sources and, as security for repayment of the loan, must provide the SBA first lien position on all notes receivable from any microloans issued under the program. Unlike the SBA's 7(a) and 504/CDC loan guarantee programs, the SBA does not charge intermediaries upfront or ongoing service fees under the Microloan program. ", "As mentioned previously, P.L. 111-240 temporarily allowed the SBA to waive, in whole or in part through FY2012, the intermediary's 15% nonfederal share requirement under specified circumstances (e.g., the economic conditions affecting the intermediary and the intermediary's performance) for up to a fiscal year.", "Intermediaries are required to deposit the proceeds from the SBA's loans, their 15% contribution, and payments from their Microloan borrowers into a Microloan Revolving Fund. Intermediaries may only withdraw from this account funds necessary to make microloans to borrowers, repay the SBA, and establish and maintain a Loan Loss Reserve Fund to pay any shortage in the Microloan Revolving Fund caused by delinquencies or losses on its microloans. They are required, until they have been in the program for at least five years, to maintain a balance in the Loan Loss Reserve Fund equal to 15% of the outstanding balance of the notes receivable from their Microloan borrowers. After five years, if the intermediary's average annual loss rate during the preceding five years is less than 15% and no other factors exist that may impair the intermediary's ability to repay its obligations to the SBA, the SBA Administrator may reduce the required balance in the intermediary's Loan Loss Reserve Fund to the intermediary's average annual loss rate during the preceding five years, but not less than 10% of the portfolio. Intermediaries are required to maintain their Loan Loss Reserve Fund until they have repaid all obligations owed to the SBA.", "The SBA does not maintain detailed data necessary to determine an aggregate default rate for Microloan borrowers. However, in 2007, the SBA estimated that the borrower default rate for the Microloan program was about 12%. Because the Loan Loss Reserve Fund is used to contribute toward the cost of borrower defaults, and is often sufficient to cover the entire cost of such defaults, the SBA's loss rate for intermediary repayment is typically less than 3% each year.", "An intermediary may be suspended or removed from the Microloan program if it fails to comply with a specified list of program performance standards. For example, intermediaries are required to close and fund at least 10 microloans per year, cover the service territory assigned by the SBA, honor the SBA determined boundaries of neighboring intermediaries and non-lender technical assistance providers, fulfill reporting requirements, maintain a loan currency rate of 85% or more (where loans are no more than 30 days late in scheduled payments), maintain a default rate of 15% or less, and \"satisfactorily provide\" in-house technical assistance to microloan clients and prospective microloan clients."], "subsections": []}, {"section_title": "Intermediary Marketing, Management, and Technical Training Assistance", "paragraphs": ["As mentioned previously, in FY2019, the SBA received $31.0 million for grants to Microloan intermediaries and qualified \"non-lending technical assistance providers\" to provide Microloan borrowers and prospective borrowers marketing, management, and technical training assistance (see Appendix for previous funding levels).", "Intermediaries are eligible to receive a Microloan technical assistance grant \"of not more than 25% of the total outstanding balance of loans made to it under this subsection.\" Grant funds may be used only to provide marketing, management, and technical assistance to Microloan borrowers, except that no more than 50% of the funds may be used to provide such assistance to prospective Microloan borrowers. Grant funds may also be used to attend training required by the SBA. Also, intermediaries must contribute, solely from nonfederal sources, an amount equal to 25% of the grant amount. In addition to cash or other direct funding, the contribution may include indirect costs or in-kind contributions paid for under nonfederal programs. Intermediaries may expend no more than 50% of the grant funds on third-party contracts for the provision of technical assistance. ", "In addition, as mentioned earlier, P.L. 111-240 temporarily allowed the SBA to waive, in whole or in part through FY2012, the 25% nonfederal share requirement for grants made to Microloan intermediaries for small business marketing, management, and technical assistance under specified circumstances (e.g., the economic conditions affecting the intermediary and the intermediary's performance) for up to a fiscal year.", "The SBA does not require Microloan borrowers to participate in the marketing, management, and technical assistance program. However, intermediaries typically require Microloan borrowers to participate in the training program as a condition of the receipt of a microloan. Combining loan and intensive training assistance is one of the Microloan program's distinguishing features.", "Intermediaries that have a portfolio of loans made under the program \"that averages not more than $10,000 during the period of the intermediary's participation in the program\" are eligible to receive an additional training grant equal to 5% of \"the total outstanding balance of loans made to the intermediary.\" Intermediaries are not required to make a matching contribution as a condition of receiving these additional grant funds."], "subsections": []}, {"section_title": "Non-lending Technical Assistance Providers", "paragraphs": ["Each year, the SBA is authorized to select qualified nonprofit, non-lending technical assistance providers to receive grant funds to provide marketing, management, and technical assistance to Microloan borrowers. Any nonprofit entity that is not an intermediary may apply for these funds.", "The SBA may award up to 55 grants each year to qualified non-lending technical assistance providers to deliver marketing, management, and technical assistance to Microloan borrowers. The grants may be for terms of up to five years and may not exceed $200,000. The nonprofit entity must contribute, solely from nonfederal sources, an amount equal to 20% of the grant. In addition to cash or other direct funding, the contribution may include indirect costs or in-kind contributions paid for under nonfederal programs.", "The SBA stopped awarding these grants at the beginning of FY2005.\u00a0The SBA determined at that time that the non-lending technical assistance providers duplicated much of what was already being provided by Microloan intermediaries and other SBA entrepreneurial development programs."], "subsections": []}, {"section_title": "Microloan Borrower Eligibility Standards", "paragraphs": ["With one exception, Microloan borrowers must be an eligible, for-profit small business as defined by the Small Business Act. P.L. 105-135 , the Small Business Reauthorization Act of 1997, expanded the Microloan program's eligibility to include borrowers establishing a nonprofit childcare business."], "subsections": []}, {"section_title": "Microloan Borrower Program Requirements", "paragraphs": ["Intermediaries are directed by legislative language to provide borrowers \"small-scale loans, particularly loans in amounts averaging not more than $10,000.\" They are also directed, \"to the extent practicable ... to maintain a microloan portfolio with an average loan size of not more than $15,000.\" Microloans for more than $20,000 are allowed \"only if such small business concern demonstrates that it is unable to obtain credit elsewhere at comparable interest rates and that it has good prospects for success.\" The maximum loan amount is $50,000 and no borrower may owe an intermediary more than $50,000 at any one time.", "Microloan proceeds may be used only for working capital and acquisition of materials, supplies, furniture, fixtures, and equipment. Loans cannot be made to acquire land or property, and must be repaid within six years. Within these parameters, loan terms vary depending on the loan's size, the planned use of funds, the requirements of the intermediary lender, and the needs of the small business borrower. During the 114 th Congress, H.R. 2670 would have increased the program's repayment terms from not more than 6 years to not more than 10 years for loans greater than $10,000.", "On loans of more than $10,000, the maximum interest rate that can be charged to the borrower is the interest rate charged by the SBA on the loan to the intermediary, plus 7.75 percentage points. On loans of $10,000 or less, the maximum interest rate that can be charged to the borrower is the interest charged by the SBA on the loan to the intermediary, plus 8.5 percentage points. Rates are negotiated between the borrower and the intermediary, and typically range from 6.5% to 9%. In FY2018, the average interest rate charged was 7.6%. ", "Each intermediary establishes its own lending and credit requirements. However, borrowers are generally required to provide some type of collateral (consistent with prudent lending practices), and a personal guarantee to repay the loan. The SBA does not review the loan for creditworthiness.", "Intermediaries are allowed to charge borrowers reasonable packaging fees limited to 3% of the loan amount for loans with terms of one year or more, and 2% for loans with terms of less than one year. Intermediaries are also allowed to charge borrowers \"actual, paid and documented out-of-pocket closing costs \u2026 such as filing or recording fees, collateral appraisals, credit reports, and other such direct charges related to loan closing.\" These fees may be added to the loan amount and financed over the life of the loan \"provided the total loan amount, including the fee, does not exceed $50,000.\""], "subsections": []}, {"section_title": "Microloan Program Statistics", "paragraphs": [" Table 2 provides the number and amount of loans that the SBA provided Microloan intermediaries from FY2010 through FY2017, the number and amount of loans to Microloan intermediaries that the SBA approved in FY2018 (before loan cancelations, etc.), and the number and amount of Microloans that intermediaries provided small businesses from FY2010 through FY2018.", "As shown in Table 2 , in FY2018, the SBA approved 58 loans to intermediaries totaling $37.3 million. The average approved intermediary loan amount was $643,724. Microloan intermediaries provided 5,459 loans to small businesses totaling $76.8 million. The average Microloan amount was $14,071. ", "As of the end of FY2018, the SBA had disbursed 1,230 loans to Microloan intermediaries totaling $562.5 million. At that time, there were 485 active Microloan intermediary loans with an unpaid principal balance of $165.3 million.", "As shown in Table 2 , the number and amount of Microloans provided to small businesses have generally increased in recent years.", "The Microloan program is open to all small business entrepreneurs, but targets new and early-stage businesses in \"underserved markets, including borrowers with little to no credit history, low-income borrowers, and women and minority entrepreneurs in both rural and urban areas who generally do not qualify for conventional loans or other, larger SBA guaranteed loans.\" An analysis conducted by the Urban Institute found that about 9.9% of conventional small business loans are issued to minority-owned small businesses and about 16% of conventional small business loans are issued to women-owned businesses. In FY2018, of those reporting their race, minority-owned or -controlled firms received 47.4% of the number of microloans issued and 33.8% of the amount issued. Women-owned or -controlled firms received 48.7% of the number of microloans issued and 38.9% of the amount issued.", "More than three-quarters of all Microloan borrowers (81.0%) in FY2018 were located in an urban area. Also, in FY2018, startup companies received 38.0% of the number of microloans issued and 36.4% of the total amount of microloans issued.", "As mentioned previously, the Microloan program's estimated borrower default rate is about 12%. Because the Loan Loss Reserve Fund is used to contribute toward the cost of borrower defaults, and is often sufficient to cover the entire cost of such defaults, the SBA's loss rate for intermediary repayment is typically less than 3% annually. For example, the Microloan program's intermediary default rate was 2.36% in FY2015, 1.60% in FY2016, 2.26% in FY2017, and 2.29% in FY2018.", "Microloans are often used for more than one purpose. In FY2018, they were most commonly used for working capital (70.4%), equipment (25.8%), inventory (21.5%), and supplies (7.6%)."], "subsections": []}]}, {"section_title": "Congressional Issues", "paragraphs": ["Critics of the SBA's Microloan program argue that it is duplicative of other available programs, expensive relative to alternative programs, and subject to administrative shortfalls. The program's advocates argue that it provides assistance that \"reaches many who otherwise would not be served by the private sector or even the SBA's 7(a) loan program\" and \"has provided an important source of capital for low-income women business owners and minority borrowers.\""], "subsections": [{"section_title": "Program Duplication", "paragraphs": ["Critics of the SBA's Microloan program argue that its direct lending program is duplicative of the SBA's 7(a) loan guarantee program and its marketing, management, and technical training assistance grant program is duplicative of the SBA's training assistance provided through Small Business Development Centers, SCORE (Service Corps of Retired Executives), and Women Business Centers. For example, President George W. Bush proposed to eliminate all funding for the Microloan program in his FY2005, FY2006, and FY2007 budget requests to Congress, arguing that \"the 7(a) program is capable of serving the same clientele through the Community Express programs for much lower cost to the Government.\" President Bush also proposed to terminate the Microloan program's marketing, management, and technical assistance grant program in his FY2008 and FY2009 budget requests to Congress.", "Critics argued in 2007 that about 44% of the SBA's 7(a) program's loan guarantees at that time were for loans under $35,000 (the Microloan program's former loan limit for borrowers), representing more than 17 times the number of loans issued through the SBA's Microloan program. In their view, the 7(a) program had demonstrated that it can service the needs of small businesses targeted by the SBA's Microloan program. They also argued that the SBA's Microloan program's marketing, management, and technical assistance grants program was not necessary because the SBA \"already supports a nationwide network of resource partners who provide counseling and training to entrepreneurs, including Small Business Development Centers, Women's Business Centers, and SCORE.\" They argued that about 94% of Microloan intermediaries are located within 20 miles of a Small Business Development Center, a Women's Business Center, or a SCORE partner.", "Advocates argue that the SBA's Microloan program is complementary, not duplicative, of the SBA's 7(a) loan guarantee program. They assert that Microloan borrowers are particularly disadvantaged when seeking access to capital, often having no credit history or lower credit scores than most applicants for the SBA's 7(a) loan guarantee program. In their view, it is important that the SBA has a program whose sole focus is to assist Microloan borrowers in starting microbusinesses and have in place intermediaries that \"have essential expertise on the needs of this key demographic.\"", "Advocates also argue that the SBA's Microloan marketing, management, and technical assistance grants program is \"a crucial element which enables intermediaries to assist microbusiness owners step by step through their development and growth\" and \"not only increases the likelihood of full repayment of the loan, but augments business survival and success.\" As mentioned previously, intermediaries typically require Microloan borrowers to participate in the training program as a condition of the receipt of the microloan."], "subsections": []}, {"section_title": "Program Cost", "paragraphs": ["Critics of the SBA's Microloan program argue that it is expensive relative to other SBA programs, costing about $7,506 per small business assisted in FY2017, compared to $1,316 per small business assisted in the SBA's 7(a) loan guarantee program. President George W. Bush cited the program's higher expense when he recommended in his FY2005, FY2006, and FY2007 budget requests to Congress that the program be terminated and when he recommended in his FY2008 and FY2009 budget requests to Congress that the interest rate charged to Microloan intermediaries be increased to make the program \"self-financing.\"", "Advocates argue that the program's higher cost per small business assisted is unavoidable given the relatively unique nature of the program and the special needs of its borrowers. They assert that intermediaries often have to spend a significant amount of time with Microloan borrowers because those borrowers tend to have less experience with the credit application process and a more difficult time documenting their qualifications for assistance than borrowers in the SBA's loan guaranty programs. Also, in their view, raising the interest rate charged to intermediaries to make the program self-financing would reduce the program's cost, but could also defeat the program's purpose. They assert that because microloans are small, it is difficult for intermediaries to generate enough interest income to cover their costs. As a result, if the interest rate charged to intermediaries is increased, they contend that intermediaries would have to pass the increase on to Microloan borrowers. In their view, increasing the program's cost to Microloan borrowers \"will create an economic hardship for them and make it more difficult for them to grow their businesses\" and \"lead to fewer jobs created and fewer tax dollars paid.\""], "subsections": []}, {"section_title": "Program Administration", "paragraphs": ["On September 28, 2017, the SBA's Office of Inspector General (OIG) released an audit of the SBA's administration of the Microloan program, following up on an earlier audit released on December 28, 2009. The OIG reported a number of deficiencies that it argued needed to be addressed \"to ensure effective operation of the Microloan program.\" ", "In 2009, the OIG found that ", "the SBA's oversight of the Microloan program was focused on the intermediaries' ability to repay their SBA loans and was limited to a cursory review of quarterly financial reports supported by only one monthly bank statement. The bank statements were used to simply verify the outstanding balances reported on the intermediaries' quarterly reports. This review process did not allow the SBA to analyze the sources and uses of funds \"which is necessary to detect inappropriate fund transfers between the intermediaries' [Microloan Revolving Funds and Loan Loss Reserve Funds] accounts.\" onsite reviews were conducted only when an intermediary defaulted on its SBA loan. the program was inadequately staffed, operating at that time \"with 6 analysts who oversee more than 160 intermediaries, 460 intermediary loans, and approximately 2,500 microloans per year.\" the reported Microloan borrower default rate of 12% \"appeared low given the high-risk nature of the program.\" the audit identified duplicate loan reporting and 92 Microloan borrowers with outstanding microloan balances exceeding the then-$35,000 limit. the SBA's output performance metrics \"do not ensure the ultimate program beneficiaries, the microloan borrowers, are truly assisted by the program\" and \"without appropriate [outcome performance] metrics, SBA cannot ensure the Microloan program is meeting policy goals.\" The OIG recommended that the SBA \"develop additional performance metrics to measure the program's achievement in assisting microloan borrowers in establishing and maintaining successful small businesses.\"", "In its 2017 audit, the OIG found that the SBA had taken several actions (see footnote below) to improve its oversight of the Microloan program since the 2009 audit but that the agency still had \"internal control weaknesses\" that prevented it from conducting \"adequate program oversight to measure program performance and ensure program integrity.\" ", "Specifically, the OIG audited 14 intermediary lenders and 52 microloan files and found documentation deficiencies, or differences between the information contained in the lender's loan file versus that in the SBA Microloan Program Electronic Reporting System (MPERS) in 44 of the 52 files. The OIG also argued that the audit revealed that inadequate documentation exists to show that the \"no credit elsewhere\" test had been properly administered; that, in some cases, inadequate supporting documentation existed to show how the microloan funds were used by the borrower; and that, in some cases, interest rates and fees were charged that exceeded the limits allowed under the program rules and regulations.", "The identified internal control weaknesses ", "were due to the SBA not having an overall site visit plan, an adequate information system, available funding for system improvements, or clear Standard Operating Procedures (SOPs). Additionally, SBA management focused on output-based performance measures instead of outcome measures.", "The OIG recommended that the SBA (1) continue efforts to improve the information system to include outcome-based performance measurements and ensure the data captured can be used to effectively monitor the Microloan Program compliance, performance, and integrity; (2) develop and implement a site visit plan to comprehensively monitor microloan portfolio performance and ensure program results can be evaluated program-wide; (3) update the Microloan program's SOP 52 00 A to clarify requirements regarding evidence for use of proceeds and credit elsewhere; and (4) update the microloan reporting system manual to reflect current technology capabilities. The SBA concurred with the four recommendations and targeted September 30, 2019, for full implementation. For example, the Microloan program's SOP 52 00 B, effective July 1, 2018, clarified requirements regarding evidence for use of proceeds and credit elsewhere."], "subsections": []}]}, {"section_title": "Legislation", "paragraphs": ["As mentioned previously, during the 111 th Congress, P.L. 111-240 , the Small Business Jobs Act of 2010, increased the Microloan program's loan limit for borrowers from $35,000 to $50,000, and increased the loan limit for Microloan intermediaries after their first year of participation in the program from $3.5 million to $5 million. It also temporarily allowed the SBA to waive, in whole or in part through FY2012, the nonfederal share requirement for loans to the Microloan program's intermediaries and for grants made to Microloan intermediaries for small business marketing, management, and technical assistance under specified circumstances (e.g., the economic conditions affecting the intermediary and the intermediary's performance) for up to a fiscal year. ", "No bills were introduced during the 112 th Congress concerning the Microloan program. ", "During the 113 th Congress, ", "H.R. 3191 , the Expanding Opportunities to Underserved Businesses Act, would have increased the Microloan program's loan limit for borrowers from $50,000 to $75,000. S. 2487 , the Access to Capital, Access to Opportunity Act, would have increased that limit to $100,000. S. 2693 , the Women's Small Business Ownership Act of 2014, and its House companion bill, H.R. 5584 , would have increased the Microloan program's aggregate loan limit for intermediaries after their first year of participation in the program from $5 million to $7 million. These bills would have also removed the requirements that no more than 25% of Microloan technical assistance grant funds may be used to provi de information and technical assistance to prospective borrowers or on third-party contracts to provide the assistance.", "During the 114 th Congress, as mentioned earlier,", "S. 1445 , the Microloan Act of 2015, would have removed the requirements that no more than 25% of Microloan technical assistance grant funds may be used to provide information and technical assistance to prospective borrowers or on third-party contracts to provide the assistance. It would have also eliminated the Microloan program's minimum state allocation formula. H.R. 2670 , the Microloan Modernization Act of 2015, and its companion bill in the Senate ( S. 1857 ) would have increased the Microloan program's aggregate loan limit for intermediaries after their first year of participation in the program from $5 million to $6 million, increased the program's repayment terms from not more than 6 years to not more than 10 years for loans greater than $10,000, and require the SBA Administrator to establish a rule enabling intermediaries to apply for a waiver of the requirement that no more than 25% of Microloan technical assistance grant funds may be used to provide information and technical assistance to prospective borrowers. The House passed H.R. 2670 on July 13, 2015. S. 1857 was reported by the Senate Committee on Small Business and Entrepreneurship on July 29, 2015. S. 2850 , the Microloan Program Modernization Act of 2016, would have increased the Microloan program's aggregate loan limit for intermediaries after their first year of participation in the program from $5 million to $6 million; eliminated the requirements that intermediaries spend no more than 25% of Microloan technical assistance grant funds on technical assistance to prospective borrowers and no more than 25% of those funds on third-party contracts for technical assistance; required the SBA to study and report on the operations of a representative sample of Microloan intermediaries and other intermediaries and make recommendations on how to reduce costs associated with intermediaries' participation in the program and to increase intermediary participation in the program; and required the Government Accountability Office to study and report on the SBA's oversight of the program, SBA's processes to ensure intermediary compliance with program rules and regulations, and the program's overall performance.", "During the 115 th Congress, ", "P.L. 115-141 , the Consolidated Appropriations Act, 2018, relaxed the requirements that intermediaries spend no more than 25% of Microloan technical assistance grant funds on technical assistance to prospective borrowers and no more than 25% of those funds on third-party contracts for technical assistance by increasing those percentages to 50%. These provisions were originally in H.R. 2056 , the Microloan Modernization Act of 2017, and S. 526 , its companion bill in the Senate (as amended in committee). P.L. 115-232 , the John S. McCain National Defense Authorization Act for Fiscal Year 2019, among other provisions, increased the Microloan program's aggregate loan limit for intermediaries after their first year of participation in the program from $5 million to $6 million. These provisions were originally in H.R. 2056 , the Microloan Modernization Act of 2017, and S. 526 , its companion bill in the Senate."], "subsections": []}, {"section_title": "Concluding Observations", "paragraphs": ["During the 111 th Congress, congressional debate concerning proposed changes to the SBA's loan guaranty programs, including the Microloan program, centered on the likely impact the changes would have on small business access to capital, job retention, and job creation. As a general proposition, some, including President Obama, argued that economic conditions made it imperative that the SBA be provided additional resources to assist small businesses in acquiring capital necessary to start, continue, or expand operations and create jobs. Others worried about the long-term adverse economic effects of spending programs that increase the federal deficit. They advocated business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to assist small business economic growth and job creation.", "In terms of specific program changes, the provisions enacted in P.L. 111-240 (allowing the SBA to temporarily waive the Microloan program's nonfederal share matching requirements, increasing the loan limit for borrowers from $35,000 to $50,000, and increasing the loan limit for intermediaries after their first year of participation in the program from $3.5 million to $5 million), P.L. 115-141 (relaxing restraints on the use of technical assistance grants), and P.L. 115-232 (increasing the loan limit for intermediaries after their first year of participation in the program from $5 million to $6 million) are all designed to achieve the same goal: create jobs by enhancing micro borrowers' access to capital and technical training assistance.", "Determining how specific changes in federal policy are most likely to lead to job creation is a challenging question. For example, a 2008 Urban Institute study concluded that differences in the term, interest rate, and amount of SBA financing \"was not significantly associated with increasing sales or employment among firms receiving SBA financing.\" However, they also reported that their analysis accounted for less than 10% of the variation in firm performance. The Urban Institute suggested that local economic conditions, local zoning regulations, state and local tax rates, state and local business assistance programs, and the business owner's charisma or business acumen also \"may play a role in determining how well a business performs after receipt of SBA financing.\"", "As the Urban Institute study suggests, given the many factors that influence business success, measuring the SBA's Microloan program's effect on job retention and creation is complicated. That task is made even more challenging by the absence of performance-oriented measures that could serve as a guide.", "The SBA's Office of Inspector General has recommended that the SBA adopt performance-oriented measures, specifically recommending that the SBA track the number of Microloan borrowers who remain in business after receiving a microloan to measure the extent to which the Microloan program contributed to their ability to stay in business. It has also recommended that the SBA require intermediaries to report the technical assistance provided to each Microloan borrower and \"use this data to analyze the effect technical assistance may have on the success of Microloan borrowers and their ability to repay microloans.\" Other performance-oriented measures that Congress might also consider include requiring the SBA to survey Microloan borrowers to measure the difficulty they experienced in obtaining a loan from the private sector; the ease or difficulty of finding, applying, and obtaining a microloan from an intermediary; and the extent to which the microloan or technical assistance received contributed to their ability to create jobs or expand their scope of operations."], "subsections": [{"section_title": "Appendix. Microloan Technical Assistance Program Funding", "paragraphs": [], "subsections": []}]}]}}
{"id": "R45709", "title": "Social Security: The Trust Funds and Alternative Investments", "released_date": "2019-05-02T00:00:00", "summary": ["The Old-Age, Survivors, and Disability Insurance (OASDI) program provides monthly benefits to retired or disabled workers and their family members and to the family members of deceased workers. These monthly benefits constitute a substantial portion of income for a large segment of recipients.", "The OASDI program is financed primarily by payroll taxes on covered earnings up to an annual limit, as well as federal income taxes paid by some beneficiaries on a portion of their OASDI benefits. OASDI program revenues are invested in federal government securities held by the Federal Old-Age Survivors Insurance (OASI) and Federal Disability Insurance (DI) Trust Funds, where they earn interest. The interest earned on assets in the trust funds provides a third stream of revenue to the OASDI program.", "The OASDI Trust Funds are overseen by a Board of Trustees, which is composed of six members: the Secretary of the Treasury, who is the managing trustee; the Secretary of Labor; the Secretary of Health and Human Services; the Commissioner of Social Security; and two public trustees, who are appointed by the President with advice and consent of the Senate. By law, the assets of the OASDI Trust Funds may be invested only in federal government securities issued by the Secretary of the Treasury. Although the Managing Trustee may invest in U.S. securities that are sold on the open market (marketable securities) if it is deemed in the public interest to do so, in practice, the OASDI Trust Funds' assets are invested in nonmarketable U.S. securities, known as special issues. The practice of investing solely in special issues has led the Board of Trustees to effectively adopt the principles of (1) nonintervention in the private economy, (2) security, (3) neutrality, and (4) minimal management. Although not explicitly codified in the Social Security Act, these principles have provided a framework to guide the trustees in their investment operations.", "At the beginning of 2018, the trust funds reported asset reserves of around $2.9 trillion, which represents the projected peak value of the funds. The OASDI program's total costs are projected to exceed its total revenues, due largely to the aging of the baby boomers, thus requiring the trust funds to draw down their assets to pay scheduled benefits. The trustees expect this trend to continue indefinitely, with the trust funds' reserves reaching depletion in 2034. To extend the trust funds' solvency, some argue the trust funds' assets should be invested in equities (i.e., stocks sold on the open market). The main argument for this approach is that equities have historically produced higher rates of return, on average, than U.S. securities, which are the trust funds' only investment option under current law. Proposals favoring equity investment seek to earn higher rates of return for the trust funds than provided by special issues. However, the higher average rates of return associated with equity investing come with more risk. Investing the trust funds in equities would expose them to a higher degree of volatility than the current investment practices.", "The trustees estimate that bringing OASDI program revenues into balance with program costs would require an immediate permanent increase of 2.78 percentage points in the payroll tax rate, from 12.40% to 15.18%, a permanent reduction in benefits of about 17%, or some combination of the two approaches. Although investing in equities may result in a higher return on the trust funds' assets, such a proposal would, by itself, have little effect on the program's long-term outlook, and it would have budgetary implications by requiring the immediate liquidation of the trust funds' existing assets. Because the trust funds are projected to be depleted in 2034 and because costs are expected to exceed revenues indefinitely, any proposal to invest the trust funds' asset in equities without first bringing the OASDI program into balance would result in little change to the program's solvency. Should Congress pass legislation that reduces the actuarial deficit, research indicates that including equity in the trust funds' investment practices could improve the program's financial position. This practice, if enacted, would disregard several of the trust funds' investment principles."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Old-Age, Survivors, and Disability Insurance (OASDI) program provides monthly benefits to retired or disabled workers and their family members and to the family members of deceased workers. The OASDI program operates as a pay-as-you-go program in which revenues (collected from payroll taxes and taxation of benefits) are paid out as monthly benefits. These monthly benefits constitute a substantial portion of income for a large segment of recipients.", "The payroll tax and the taxation of monthly benefits are major contributors to the OASDI program's revenues. For many years, the program's revenues exceeded its costs (i.e., benefit payments), resulting in annual surpluses. Annual surpluses are not needed to cover scheduled benefits, and the money is credited to the Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund, or trust funds. The OASDI Trust Funds are invested in nonmarketable U.S. government securities (government bonds), where they earn interest. This interest provides a third source of revenue to the OASDI program. The combined OASDI Trust Funds had approximately $2.9 trillion in assets at the beginning of 2018. ", "The OASDI Trust Funds' Board of Trustees (the trustees) manages the trust funds according to requirements set forth in the Social Security Act. Under current law, the trust funds' assets may be invested only in U.S. government securities issued by the Secretary of the Treasury. In practice, the trust funds invest solely in special, nonmarketable U.S. Treasury securities. By investing only in nonmarketable U.S. Treasury securities, or special issues , the trustees have not intervened directly in the private economy. Investing in marketable securities would signify a departure from the norms that govern the current investment practice. Investing in equities\u2014for example, by purchasing company stock in the open market\u2014would demonstrate a similar departure from the trust funds' investment norms and would represent a government intervention into the private market. Some argue this expansion of investment options would be problematic because it dictates government ownership of, and possibly influence on, private companies. Although this event may never come to pass, the historically higher returns on equity investment may motivate policymakers to enact changes to the OASDI Trust Funds' investment options and practices. "], "subsections": []}, {"section_title": "Current Policies and Practices3", "paragraphs": ["Section 201(c) of the Social Security Act establishes the Board of Trustees of the OASDI Trust Funds and states that the Secretary of the Treasury shall be the managing trustee. Subsequent sections outline the main duties of the managing trustee and provide instructions for how to conduct the trust funds' investment activities. The directives include the following:", "1. The managing trustee is to invest portions of the trust funds that are not required for current costs. 2. The funds not necessary to meet current costs are to be invested only in interest-bearing securities issued by the Secretary of the Treasury. Upon purchasing a government security (i.e., exchanging tax revenues or earned interest for a government security), the surplus funds are deposited into the General Fund and the funds are available to the rest of the federal government to meet other spending needs, reduce taxes, or reduce publicly held debt. This transaction essentially results in excess revenues being loaned to the government. 3. The U.S. Treasury will make these securities available to the managing trustee for the trust funds' investments. These issues are referred to as special issues or special obligations . a. The maturity of special issues is fixed with due regard for the needs of the trust funds. b. The interest rate earned by special issues is equal to the average market yield on marketable, interest-bearing government securities due at least four years in the future. 4. The managing trustee may redeem any of these special issues, at any time, at par (i.e., face value) plus accrued interest. ", "The ability to redeem the special issues at any time for par value, thus ensuring they cannot lose value, makes them nonmarketable. Other U.S. government issuances, if sold prior to maturity, are redeemed at the prevailing market rate. Because these special issues can always be redeemed at par, their early redemption at any time does not negatively affect the trust funds' value. ", "If it is determined to be in the public interest, the managing trustee may purchase non - special issues (e.g., marketable U.S. securities) at the original or market price. Doing so would imply that any redemption, if needed prior to the maturity date of such security, would return the market price and possibly result in losses to the trust funds' capital. The 1957-1959 Advisory Council on Social Security Financing acknowledged that the trust funds could invest in public (i.e., marketable) issues, but recommended amending the Social Security Act to allow investment in public issues only \"when they will provide currently a yield equal to or greater than the yield that would be provided by the alternative of investing in special issues.\" Had this amendment been enacted into law, it would have mandated the preference for special issues. ", "The Social Security Act provides no direction on how the trust funds' investments should be redeemed. In practice, the trustees have adopted two administrative policies to address this gap. First, special issues are redeemed before maturity only when they are required to cover immediate costs. This policy prevents special issues with a low yield from being redeemed and then immediately reinvested at a higher rate. Second, special issues are redeemed in maturity-date order . This policy provides a reliable order of redemption."], "subsections": []}, {"section_title": "The Trust Funds' Investment Principles", "paragraphs": ["Actuarial Note Number 142 , published by the Social Security Administration's Office of the Chief Actuary (OCACT), outlines the OASDI Trust Funds' investment principles. The note acknowledges that the legislative history of the Social Security Act provides only limited guidance, and the rest can be inferred from the administrative policies adopted over the duration of the trust funds' existence."], "subsections": [{"section_title": "Principle 1: Nonintervention in the Private Economy", "paragraphs": ["The principle of nonintervention has long been recognized as important in the consideration of the trust funds' finances. The 1957-1959 Advisory Council on Social Security Financing stated the following in its final report: ", "The Council recommends that investment of the trust funds should, as in the past, be restricted to obligations [issues] of the United States Government. Departure from this principle would put trust fund operations into direct involvement in the operation of the private economy or the affairs of State and local governments. Investment in private business corporations could have unfortunate consequences for the social security system\u2014both financial and political\u2014and would constitute an unnecessary interference with our free enterprise economy. Similarly, investment in the securities of State and local governments would unnecessarily involve the trust funds in affairs which are entirely apart from the social security system.", "The principle of nonintervention is reinforced by the creation and use of the special issue securities as the OASDI Trust Funds' primary investment mechanism. The purchase or sale of large quantities of marketable government securities in the open market by the OASDI Trust Funds could cause market disruptions and appear as interference in the open market operations of the Federal Reserve."], "subsections": []}, {"section_title": "Principle 2: Security", "paragraphs": ["Section 201(d) of the Social Security Act explicitly states the OASDI Trust Funds may only be invested in interest-bearing securities issued by or guaranteed by the U.S. government. These securities are backed by the full faith and credit of the government, offering them a high measure of protection. Furthermore, to the degree that the trust funds remain invested solely in special obligations (special issues), they are well protected from any loss to capital, earning a risk-free return. "], "subsections": []}, {"section_title": "Principle 3: Neutrality", "paragraphs": ["With respect to operating neutrally, Actuarial Note Number 142 states the following:", "Trust fund investment policies have, for the most part, followed a principle of neutrality, in the sense that they have generally been intended neither to advantage or disadvantage the trust funds (the lenders) with respect to other Federal accounts (the borrowers). The underlying concept is that when the trust funds invest assets by lending to the general fund of the Treasury, these transactions should produce investment results similar to those that might be obtained by a prudent, private sector investor in Federal securities. If the general fund could not borrow from the trust funds, it would have to meet its borrowing needs by selling additional securities to just such private investors.", "The practice of neutrality is required, in part, by law in determining the interest rates for the special issues (see \" Current Policies and Practices \"). It is also encouraged by two administrative policies adopted by the trust funds: (1) only redeeming special issues before maturity when they are needed to meet program costs and (2) ensuring the maturities of special issues are evenly distributed among 1-year through 15-year durations. Note 142 concludes that \"the administrative policy governing early redemption of special obligations [special issues], in combination with the policy of spreading maturities, is designed to compensate at least partially for, or neutralize, the advantage of no-risk liquidity.\""], "subsections": []}, {"section_title": "Principle 4: Minimal Management of Investment", "paragraphs": ["The parameters for the trust funds' investment set forth in the Social Security Act and the administrative policies adopted over time render active or day-to-day management of the trust funds' investments unnecessary. The types of possible investment vehicles are limited by law and by common practices. These practices have also eliminated discretion for when and why securities should be redeemed. Note 142 also explains that adhering to the principles of security and neutrality necessitates following the principle of minimal management, as active management (e.g., profit maximizing) would violate the first two principles."], "subsections": []}]}, {"section_title": "Performance and Criticism of the Trust Funds", "paragraphs": [], "subsections": [{"section_title": "The Trust Funds' Performance", "paragraphs": [" Figure 1 displays the returns earned by the assets in the trust funds over the period 1940 to 2017. The average interest rate is the average of the monthly interest rates on new special issues acquired by the trust funds during that year. In 2003, for instance, the average interest rate for the special issues acquired by the OASDI Trust Funds was 4.1%. The effective interest rate is the interest earned during the calendar year on all of the securities held by the trust funds divided by the average amount of securities held by the trust funds during the year. Since 1985, the effective interest rate has been higher than the average interest rate due to securities in the trust funds acquired in earlier years when interest rates were much higher. For example, Figure 1 shows that in 2003 the effective interest earned by all special issues held in the trust funds was 6.0%.", "This relationship between the average interest rate and the effective interest rate is a consequence of the trust funds' special issues being evenly spread over maturity periods ranging from 1 year to 15 years. In an environment of falling interest rates, the trust funds' investment practices result in one-fifteenth of the trust funds' assets coming due each year and being invested at a lower interest rate. For instance, a portion of the special issues acquired in 1989 was invested for a duration of 15 years, thus maturing in 2003. Those special issues returned an average rate of 8.7% and would have then been invested in assets that were expected to earn an average rate of 4.1% (i.e., the average interest rate for new special issues in 2003). Similarly, a portion of special issues acquired in 1994 for a duration of 10 years earned an average rate of 7.1%; these special issues would also have been invested to earn an average of 4.1% (i.e., the average interest rate for new special issues in 2003). It must be reiterated, however, that this duration structure has afforded the trust funds a higher effective rate than the average rate, earned in an essentially risk-free manner."], "subsections": []}, {"section_title": "Criticism of the Trust Funds", "paragraphs": ["Criticism of the OASDI Trust Funds' current investment practices stems from the program's long-term solvency issues. The program is facing a funding shortfall due largely to demographic factors, and restoring long-term solvency would require a payroll tax increase or reduction in benefits. Critics argue that if the trust funds had earned a better return in the past, they would be in a better long-term financial position. The 1994-1996 Advisory Council on Social Security stated the following in its final report: ", "Historically, returns on equities have exceeded those on Government bonds (where all Social Security funds are now invested). If this equity premium persists, it would be possible to maintain Social Security benefits for all income groups of workers, greatly improving the money's worth for younger workers without incurring the risks that could accompany individual investment.\u2026 As a matter of financial theory, the diversification achieved by investing in both stocks and government bonds should also reduce portfolio risk for the OASDI Trust Fund. ", "Starting in 1998, the Social Security Advisory Board (SSAB) replaced the advisory councils. Since then, the SSAB has released numerous reports that affirm the prior advisory council's findings. In reports from 2005 and 2010, the SSAB noted that the increased rate of return offered by equities would eliminate a large portion of the projected funding shortfall and reduce the need for tax increases or benefit reductions. ", "Because of declining interest rates and the trust funds' duration and reinvestment practice, a portion of the trust funds' holdings was continually being invested in securities that earned less than they did in the past (see Figure 1 ). This trend is expected to continue. Although the SSA's OCACT projects interest rates to increase over the next 10 years, much of the maturing holdings would still be reinvested at a lower rate. ", " Figure 2 shows the value of the asset reserves in the OASDI Trust Funds at the end of each calendar year from 1957 to 2034 based on historical data and projections. The figure shows the value of assets growing from 1983 through 2017. The Social Security Amendments of 1983 established a number of provisions, including increasing the full retirement age, adding new federal workers into the OASDI program, and taxing Social Security benefits, which had a positive effect on the OASDI Trust Funds. From 1983 to 2017, OASDI program revenues exceeded program cost, resulting in annual surpluses. However, during the 1983-2017 period of sustained annual surpluses, the trust funds experienced falling interest rates (see Figure 1 ).", " Figure 2 depicts that at the end of 2017, the trust funds are also projected to be at peak value. For 2018, the trustees project that program costs will exceed program revenues. The assets previously invested in the trust funds will be drawn down to augment annual program revenues and fulfill annual scheduled payments. The trustees also project that under current law costs will exceed revenues for the entirety of their 75-year projection period. Under the projection, the OASDI program will be able to draw upon the trust funds' assets to fulfill scheduled payments until 2034, the date at which the trustees project assets will be depleted."], "subsections": []}]}, {"section_title": "Alternative Investments and Possible Issues", "paragraphs": ["The 1994-1996 Advisory Council on Social Security identified the demographic implications of the aging b aby b oom generation\u2014those born from 1946 through 1964\u2014and the associated effects on the trust funds as an issue. As a result, the council's final report recommended investing a portion of the trust funds in equities to help alleviate pressure on the OASDI program's long-term actuarial balance. Other alternatives included investments in private (e.g., corporate) bonds, or in social and economic activities, such as housing construction.", "The primary argument for the trust funds to invest in private equity is that historical returns on equity have been greater than returns on government bonds. Some critics of this approach are concerned that by investing in private companies and gaining some control over their activities, the federal government would be intervening in the market, resulting in what some have described as \"socialism by the backdoor method.\" The advisory council reasoned as follows: ", "Another practical disadvantage would be the need for a far-reaching and deep-searching investment policy that would permit the trust funds to obtain an adequate rate of interest with reasonable security of principal. Under such a policy, the Federal Government would, in effect, be setting itself up as a rating organization, because the investment procedures would naturally have to be open to full public view. If no preference were shown for different types of securities, but rather investments were made widely and indiscriminately, there would be a substantial risk of diminution of investment income, or even loss of principal.", "Alternatively, it could be argued that if the trust funds invested passively into an index fund, the managing trustee or Board of Trustees could forgo voting rights. Although this may help to solve, or at least alleviate, the issue of government control over private companies, it may introduce new risks. The value of shares in companies included in the chosen index would receive a steady stream of support from routine and unconditional government purchase of their shares. Investing trust fund assets in index funds\u2014for example, by investing in an index of the largest 500 companies\u2014may effectively create an atmosphere where these companies, by the value of their market capitalization , are chosen as the \"winners\" via the trust funds' purchases. The benefits of being among the winners could provide incentives for companies near the cutoff in market capitalization to adopt accounting methods not generally accepted as good practice. Deceptive accounting methods could be used to inflate stock prices and market capitalization for the purpose of becoming a winner wherein the company would benefit from consistent purchase of its stock by the trust funds. ", "Investing the trust funds' assets in private equities or bonds could also introduce instability to the financial markets. Whereas Figure 2 shows that the trust funds' values on a year-to-year basis are smooth, the trust funds' balance fluctuates greatly throughout the year. The need to redeem the trust funds' assets throughout the year, combined with the trust funds' ebbs and flows, presents conditions that have the potential to disrupt private markets. Large sales of private stocks and bonds needed to smooth fluctuations in the trust funds' value may create a liquidity crisis where irregular price movements prohibit sales and purchases at market prices; a lack of liquidity is also a reason critics cite for not investing in social projects such as housing or hospitals. ", "Lastly, for the trust funds to purchase equities, some portion of the trust funds' existing special issues would need to be redeemed to provide the necessary capital. Research presented in the following sections suggests a phase-in of equity purchases worth 2.67 percentage points of the trust funds' value per year. Phasing in the purchase of equities in 2018 at 2.67 percentage points would have required the redemption of approximately $77 billion worth of special issues. In other words, the federal government would have needed to find $77 billion to redeem these special issues so the cash could be invested in equities. Providing that capital for the new equity investments would require a corresponding increase in publicly held debt, a corresponding increase in tax revenue, or a corresponding reduction in other government spending. Subsequent years would require similar redemptions as well. "], "subsections": [{"section_title": "Equity Investment and Risk", "paragraphs": ["Investing the trust funds' assets in equities could introduce instability to the financial markets. Conversely, the trust funds would also be subject to the volatility already present in the markets. The higher average returns offered by equity investments are accompanied by higher risk. The degree of volatility, or risk, among investment vehicles is positively correlated to returns; that is, investments that can offer greater returns are accompanied by greater volatility. Likewise, investments that offer lower returns are accompanied by lower volatility. Investing in equities may improve the overall financial health of the trust funds, but it would likely be accompanied by higher volatility, which could pose challenges for a system dependent on dedicated sources of funding.", " Figure 3 displays the effective interest rate earned by the special issues in the combined OASDI Trust Funds and the returns of the equity market as measured by the Wilshire 5000 Total Market Index, or Wilshire 5000. During the 1983-2017 period, the Wilshire 5000 returns outperformed the trust funds' effective interest rate in 21 of the 35 years. The average effective interest rate of special issues in the OASDI Trust Funds over this period was 5.8% versus an average return of 12.7% earned in the Wilshire 5000. At the same time, the equity returns demonstrated a higher degree of volatility. "], "subsections": []}, {"section_title": "Railroad Retirement Board and Alternative Investments", "paragraphs": ["Many of the issues mentioned above are similar to the experiences of the Railroad Retirement Board, or RRB, an independent federal agency that administers benefits to railroad workers and their families. In 2001, Congress passed the Railroad Retirement Survivors' Improvement Act, which established the National Railroad Retirement Investment Trust (NRRIT). To ensure independence and limit political interference, the NRRIT is not a part of the federal government and is independent of the RRB. ", "Congress aimed to increase RRB funding by realizing higher returns than would be possible from investing solely in government securities. As such, the act requires the NRRIT to invest a portion of the RRB's assets in non-U.S. government securities, such as private stocks and bonds. The NRRIT investment practices require a diversified portfolio to minimize risk and avoid disproportionate influence over a firm or industry. From the NRRIT's inception to the end of FY2016, the investment returns helped increase the value of assets held by the RRB. From FY2003 to FY2016, annual returns averaged 7.9%, compared with expected returns of 8%. These rates of return are higher than what would have been earned if the NRRIT invested solely in government securities ( Figure 1 ); prior to the act's implementation, the NRRIT was invested in government securities in much the same manner as the OASDI Trust Funds. The overall size of assets held by the NRRIT is considerably smaller than the OASDI Trust Funds. For instance, at the end of FY2017, the market value of NRRIT-managed assets was $26.5 billion, whereas at the end of CY2017, the OASDI Trust Funds held $2,892 billion in assets. For a complete overview of the NRRIT, see CRS Report RS22782, Railroad Retirement Board: Trust Fund Investment Practices ."], "subsections": []}]}, {"section_title": "Alternative Investments and Review of Past Performance", "paragraphs": ["With accurate and precise knowledge of the OASDI Trust Funds' cash flows from 1983 through 2016, it is possible to model the trust funds' performance had they participated in alternative investments. Research published by Burtless et al. at the Center for Retirement Research in 2017 sought to determine how the trust funds would have benefited if alternative investments began in 1984, after the Social Security Amendments of 1983 ushered in a 34-year period of annual surpluses, and in 1997, after the last Advisory Council on Social Security recommended trust fund investment in equity. This analysis compares how incorporating equity investments would have affected the OASDI Trust Funds ratio. The t rust f und s ratio is the measure of the trust funds' asset reserves at the beginning of the year divided by the projected total cost for the year. According to the trustees, a trust funds ratio above 100% throughout the short-range period (10 years) indicates a financially healthy program, whereas a ratio below 100% signals the program is in a financially inadequate position. The results are presented in Figure 4 below. The scenarios presented below assume that the amount of the trust funds' reserves invested in equities would increase by 2.67 percentage points per year until 40% of reserves were allocated in equities. That is, the trust funds' purchase of equities was phased in until equities represented 40% of total assets.", "This analysis yields several insights, the most pertinent of which may be that if the trust funds had invested in equities in the past, they would have higher levels of assets today than they currently do. Figure 4 shows that at the end of 2016, undertaking equity investments in 1983 would have left the trust funds with reserves enough to cover about an additional 1.2 years of program costs (424% less 302%); equity investing beginning in 1997 would have supplied the trust funds with assets to cover an additional 0.88 years of program costs (390% less 302%). In other words, the trust funds would still be facing long-term insolvency even with equity investment. A second item of note is that from 1983 to 2008, when the actual trust funds ratio peaked, the analysis shows that investing in equities would not have drastically improved the financial situation. The actual trust funds ratio was 358% in 2008, contrasted with a ratio of 371% if investment in equities began in 1984 and a ratio of 383% if investment began in 1997. By 2008, the current investment strategy resulted in a similar trust funds ratio, accomplished with less risk, with no intervention into the capital markets, and at minimal cost. A third observation is that despite several large downturns, most notably the 2008-2009 financial crisis, the trust funds would still stand in a better financial position today had equity investments been incorporated. Lastly, in each of these two alternative cases, the trust funds would have owned less than 10% of the total value of the stock market today. This result owes to the growth in aggregate equity value contrasted with the phased-in purchases of equity. Trust fund ownership at this level would perhaps assuage the concerns of critics wary of government intervention in the equity markets. "], "subsections": []}, {"section_title": "Alternative Investments and Projections for Future Performance", "paragraphs": [], "subsections": [{"section_title": "Impact of Various Policy Options Without Revenue Increase", "paragraphs": ["OCACT maintains relevant estimates on policy options that would affect the program's long-range solvency. The options for investing in equities presented in Table 1 vary by phase-in date, percentage of reserves that would be invested in equities, and assumed real rate of return. Policy options that incorporate equity investing can be assessed by examining their effects on the long-range actuarial balance . Table 1 shows that under current law, the long-range actuarial balance is -2.84% of taxable payroll, indicating that under intermediate assumptions provided in T he 2018 Annual Report , an approximately 2.84-percentage-point increase in payroll tax rate (from current the 12.40% to 15.24%) or a comparable reduction in benefits would be needed to maintain program solvency throughout the projection period and result in a trust funds ratio of 100% at the end of the projection period. ", "As shown in Table 1 , none of the options that incorporate investing the trust funds in equities is projected to result in an appreciable change in the long-term solvency of the program. The best-performing option, G1, involves investing 40% of the OASDI Trust Funds into equities, phased in from 2019 to 2033, and it assumes a real rate of return of 6.2%. Although OCACT projects this option to improve the long-range actuarial balance by 0.51 percentage points, the trust funds' cash flow operations are still projected to result in depletion, albeit in 2035, one year later than expected under current law.", "As shown in Figure 2 , the combined OASDI Trust Funds value at the end of 2017 represents a peak value. As it becomes necessary to draw upon those assets to pay scheduled benefits, there will be less and less money that can be invested. Therefore, the projected drawdown of the trust funds makes any potential advantage of investing in equities less effective over time. Once the trust funds are depleted, the OASDI program's cost is projected to remain greater than revenues indefinitely. When the trust funds are depleted, any measure involving investment in equities would have no effect on solvency, as there would be no money to invest."], "subsections": []}, {"section_title": "Impact of Various Policy Options with Revenue Increase", "paragraphs": ["The Burtless et al. research that examined how the trust funds would have fared by including alternative investments from 1984 to 2016 also sought to determine how the trust funds would perform moving forward from 2017. Table 1 shows that policy options that do not include any increase to revenue do not result in an appreciable change to the current trajectory of the OASDI Trust Funds' insolvency. As such, the researchers' simulations first require that Congress passes legislation to \"restore balance to the system.\" To restore balance to the system, the authors assume that payroll taxes are raised to eliminate the long-run funding shortfall\u2014at the end of 2016 this was projected to require a 2.58-percentage-point increase in the payroll tax. After the balance is restored, there is no longer any long-term funding shortfall, as the actuarial deficit is brought to zero. If enacted in 2016, an increase in the payroll tax of 2.58 percentage points, on a stand-alone basis, would have resulted in the projected solvency being extended from 2034 to 2091.", "With balance now restored to the system, the authors present two scenarios. The first scenario is a continuation of current policy in which the trust funds remain solely invested in special issues. The second scenario presents projections in which the trust funds increase the amount of their reserves invested in equities by 2.67 percentage points per year until no more than 40% of the trust funds' assets are equities. This second scenario is similar to the simulated scenarios of past performance presented in \" Alternative Investments and Review of Past Performance .\" ", "Once the OASDI program is brought back into balance (i.e., projected to be solvent throughout the 75-year projection period), Monte Carlo simulations are used to model the two scenarios. The results of continuing to invest only in special issues are presented below in Figure 5 , which shows the range of outcomes for the trust funds ratios for simulated special issue returns grouped into percentiles based on the outcome of the final year in the simulation. For instance, the 95 th percentile shows that the average of the top 5% of simulations resulted in a trust funds ratio of 100% in the final year, 2091. Conversely, the 5 th percentile, those simulations in the bottom 5%, resulted in trust fund depletion in 2083, on average. For reference, the graph also shows the projected trust funds ratio from T he 2018 Annual Report (solid black line), which does not include any increase in payroll tax or investment in equities.", "The results of the simulations correspond with the Trustees' 2018 Annual R eport . The simulations at the 50 th percentile, the best guess estimate, project that program solvency would be extended to about 2090, assuming first a reduction in the actuarial deficit. The simulations at the 5 th percentile resulted in maintaining short-range financial adequacy through 2071 and solvency through 2082. In essence, Figure 5 shows the improved adequacy of the trust funds' financial position from a tax increase but with no change to the current investment practices. ", "In contrast, a second scenario, shown in Figure 6 , simulates how incorporating equity investment following the tax increase, wherein the trust funds hold a mixed portfolio of equity (at most 40%) and special issues (at least 60%), would alter the trust funds' performance. ", "The results in Figure 6 show the potential benefits from equity investing. In this scenario, the simulations at the 50 th percentile, the best guess estimate, resulted in a mixed portfolio that is valued at 330% of the next year's projected costs (i.e., a trust funds ratio of 330%) at the end of the projection period. Comparing the 50 th percentile outcomes under each scenario shows that incorporating equity investments could improve the trust funds' long-range financial position. The only instance in which the special issue-only practice performs similarly to the mixed portfolio is under the worst possible outcomes, those in the 5 th percentile of each scenario. In these groups, the mixed portfolio fails the short-range adequacy test at an earlier date, 2069 versus 2071 for the special issue-only; however, it remains solvent for two years longer than the special issue-only, 2084 versus 2082. In almost all simulated scenarios, the inclusion of equities into the trust funds' investment practices improved their long-range financial position."], "subsections": []}, {"section_title": "A Railroad Retirement Board Approach for Social Security?", "paragraphs": ["The scenarios presented above appear suggest that after the long-term funding shortfall is eliminated, the inclusion of equity investing into the trust funds could improve the Social Security program's solvency. A change of this nature would represent a large departure from current policy. ", "Since 2002, the National Railroad Retirement Investment Trust (NRRIT) has incorporated equity purchases in its management of a portion of Railroad Retirement Board (RRB) assets. From FY2003 through FY2017, the NRRIT achieved annual rates of return after fees of 8.3%. From calendar years 2003 through 2017, the OASDI Trust Funds achieved an average effective return of 4.5%. Although this comparison in performance between the NRRIT and OASDI Trust Funds covers the 2008-2009 financial crisis, it is somewhat limited in overall duration. In addition, any comparison between the two programs must take into account the smaller size of the NRRIT. ", "The board of the NRRIT is composed of seven trustees who have expertise in financial management and pension plans. Three of the members are selected by labor unions and three by railroad management. These six members select the final trustee, and all trustees are limited to three-year terms. The trustees hire independent investment managers to invest the NRRIT assets, with no one manager controlling more than 10% of the assets. ", "Whereas features such as a nonfederal entity of trustees seem easily replicable, other features of the NRRIT model may prove more difficult to copy. The pursuit of higher returns is accompanied by additional risk (see \" Equity Investment and Risk \"). To compensate for the additional risk, the NRRIT has developed safeguards to protect against periods of low returns. These safeguards include fund reserves of four to six years' worth of benefits (i.e., trust fund ratio of 400% to 600%) and automatic payroll tax adjustments on employees and employers. ", "To acquire asset reserves of at least four years of annual program costs, thus maintaining a safeguard similar to the NRRIT's, the OASDI Trust Funds would require substantial revenue-increasing or benefit-reducing measures. For instance, as discussed in the previous section, for the OASDI Trust Funds to be brought into balance before the purchase of equities, an increase of 2.58 percentage points to the payroll tax is required. Even with the additional returns generated by equity investments under the best-case scenario presented in Figure 6 (i.e., simulated equity returns in the 95 th percentile), a trust funds ratio of 400% is not attained until 2035. ", "Some features of the NRRIT model may prove more difficult for policymakers to accept. For instance, automatic payroll tax adjustments could prove hard to implement. About 93% of the work in the United States is covered by Social Security. Given this high coverage rate, some policymakers may object to automatic adjustments to a payroll tax that affects so many workers. In addition, an automatic increase of the payroll tax to maintain a specific trust funds ratio (e.g., 400%) would most likely occur during a period of low equity returns. Thus, such an increase could occur when workers and businesses were already subject to negative equity returns. However, a more sizeable trust funds ratio, such as 600%, could provide adequate contingency funds such that an automatic increase in the payroll tax would not be prompted. Periods with a high trust funds ratio and positive equity returns could prompt an automatic payroll tax decrease. Lastly, the amount of funds managed by the NRRIT versus those managed by the OASDI Trust Funds are different. At the end of FY2017, the NRRIT managed assets with a market value of $26.5 billion. At the end of CY2017, the OASDI Trust Funds managed assets worth $2,892 billion. ", "Because the NRRIT is an independent nongovernmental entity, it is not subject to the same oversight as federal agencies. Several times since its inception, the RRB Office of the Inspector General (OIG) has expressed concerns regarding the effectiveness of proper oversight of the NRRIT. Most specifically, the OIG noted that, under current policy, there are fewer safeguards protecting the NRRIT than for retirement investments of federal government and private-sector workers. Given the magnitude of the Social Security program and its importance for retired workers, a similar absence oversight may prove unacceptable to policymakers."], "subsections": []}]}, {"section_title": "Conclusion", "paragraphs": ["Under current law, and assuming the Board of Trustees' intermediate projections will unfold close to its assumptions, the long-range solvency of the OASDI Trust Funds is at risk. In addition, under current law, the trust funds' financial position would not be improved by the inclusion of alternative investments, namely equity investments. However, should Congress pass legislation to reduce the actuarial deficit, available research suggests that investing the trust funds' newly increased assets in equities could result in a higher trust funds ratio (i.e., greater solvency) than if the trust funds' assets were invested in only government bonds. Phasing in equity investments over a sufficient length of time could minimize adverse effects and result in the trust funds holding a relatively small position in the stock market. Although much smaller in scale, the practices of the RRB provide a framework and history for the use of equity investment in a trust fund (see CRS Report RS22782, Railroad Retirement Board: Trust Fund Investment Practices ). This would, however, require putting aside current investment principles and methods that have guided investment practices. These practices have led the OASDI Trust Funds to be managed at a low cost with minimal risk and resulted in no direct intervention in the private equity markets."], "subsections": []}]}}
{"id": "R40616", "title": "The Net Neutrality Debate: Access to Broadband Networks", "released_date": "2019-04-15T00:00:00", "summary": ["As congressional policymakers continue to debate telecommunications reform, a major discussion point revolves around what approach should be taken to ensure unfettered access to the internet. The move to place restrictions on the owners of the networks that compose and provide access to the internet, to ensure equal access and nondiscriminatory treatment, is referred to as \"net neutrality.\" There is no single accepted definition of \"net neutrality,\" but most agree that any such definition should include the general principles that owners of the networks that compose and provide access to the internet should not control how consumers lawfully use that network, and they should not be able to discriminate against content provider access to that network.", "The Federal Communications Commission (FCC) in its February 26, 2015, open meeting voted 3-2, along party lines, to adopt open internet rules and released these rules on March 12, 2015. One of the most controversial aspects of the rules was the decision to reclassify broadband internet access service (BIAS) as telecommunications service under Title II, thereby subjecting internet service providers to a more stringent regulatory framework. With limited exceptions, the rules went into effect June 12, 2015. Various parties challenged the legality of the FCC's 2015 Open Internet Order, but the U.S. Court of Appeals for the D.C. Circuit, in a June 14, 2016, ruling, voted (2-1) to uphold the legality of all aspects of the 2015 FCC Order. A petition for full U.S. Appeals Court review was denied and a subsequent petition for U.S. Supreme Court review was declined.", "The FCC on December 14, 2017, adopted (3-2) an Order that largely reverses the 2015 regulatory framework. The 2017 Order, among other things, reverses the 2015 classification of BIAS as a telecommunications service under Title II of the Communications Act, shifts much of the oversight from the FCC to the Federal Trade Commission and the Department of Justice, and provides for a less regulatory approach. This action has once again opened up the debate over what the appropriate framework is to ensure an open internet. Reaction to the 2017 Order has been mixed. Some see the 2015 FCC rules as regulatory overreach and welcome a more \"light-touch\" approach, which they feel will stimulate broadband investment, deployment, and innovation. Others support the 2015 regulations and feel that their reversal will result in a concentration of power to the detriment of content, services, and applications providers, as well as consumers, and refute the claim that these regulations have had a negative impact on broadband investment, expansion, or innovation. The 2017 Order was published in the Federal Register on February 22, 2018, and went into effect on June 11, 2018. Federal Register publication triggered timelines for both court challenges and Congressional Review Act (CRA) consideration. Petitions for review have been consolidated in the U.S. Court of Appeals, D.C. Circuit. CRA resolutions (S.J.Res. 52, H.J.Res. 129) to overturn the 2017 Order were introduced in the 115th Congress. S.J.Res. 52 passed (52-47) the Senate, but H.J.Res. 129 was not considered in the House. Additional bills to provide a regulatory framework to outline FCC authority over broadband internet access services were introduced, but not acted on, in the 115th Congress.", "Debate over what the appropriate regulatory framework should be for broadband access has continued in the 116th Congress. Two bills (H.R. 1644, S. 682) add a new title to the Communications Act that overturns the 2017 Order and restores the 2015 Order. An amended version of H.R. 1644 passed (232-190) the House on April 10, 2019. Additional bills (H.R. 1006, H.R. 1096, H.R. 1101, and H.R. 1860) that address the net neutrality debate have also been introduced."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["As congressional policymakers continue to debate telecommunications reform, a major discussion point revolves around what approach should be taken to ensure unfettered access to the internet. The move to place restrictions on the owners of the networks that compose and provide access to the internet, to ensure equal access and nondiscriminatory treatment, is referred to as \"net neutrality.\" There is no single accepted definition of \"net neutrality.\" However, most agree that any such definition should include the general principles that owners of the networks that compose and provide access to the internet should not control how consumers lawfully use that network, and they should not be able to discriminate against content provider access to that network.", "A major focus in the debate is concern over whether the regulatory framework as delineated in the Federal Communications Commission's (FCC's) 2015 Open Internet Order is the appropriate approach to ensure access to the internet for content, services, and applications providers, as well as consumers, or whether a less regulatory approach contained in the 2017 Order is more suitable. The issue of regulation of and access to broadband networks is currently being addressed in three venues", "at the FCC, where the commissioners on December 14, 2017, adopted (3-2) an Order that went into effect on June 11, 2018, that revokes the 2015 regulatory framework in favor of one that reverses the 2015 classification of broadband internet access services as a telecommunications service under Title II of the Communications Act, provides for a less regulatory approach, and shifts much of the oversight from the FCC to the Federal Trade Commission (FTC) and the Department of Justice (DOJ); in the courts, where consolidated petitions for review of the 2017 Order are under consideration in the U.S. Court of Appeals, D.C. Circuit; and a suit filed in the U.S. District Court of the Eastern District of California by the DOJ and various trade groups, challenging the legality of a California internet regulation law, is pending; in the 116 th Congress, where debate over what the appropriate regulatory framework should be for broadband access continues. ", "Whether Congress will take broader action to amend existing law to provide guidance and more stability to FCC authority over broadband access remains to be seen."], "subsections": []}, {"section_title": "Federal Communications Commission Activity", "paragraphs": [], "subsections": [{"section_title": "The Information Services Designation and Title I", "paragraphs": ["In 2005 two major actions dramatically changed the regulatory landscape as it applied to broadband services, further fueling the net neutrality debate. In both cases these actions led to the classification of broadband internet access services as Title I information services, thereby subjecting them to a less rigorous regulatory framework than those services classified as telecommunications services. In the first action, the U.S. Supreme Court, in a June 2005 decision ( National Cable & Telecommunications Association v. Brand X Internet Services ), upheld the Federal Communications Commission's (FCC's) 2002 ruling that the provision of cable modem service (i.e., cable television broadband internet) is an interstate information service and is therefore subject to the less stringent regulatory regime under Title I of the Communications Act of 1934. In a second action, the FCC, in an August 5, 2005, decision, extended the same regulatory relief to telephone company internet access services (i.e., wireline broadband internet access, or DSL), thereby also defining such services as information services subject to Title I regulation. As a result, neither telephone companies nor cable companies, when providing broadband services, are required to adhere to the more stringent regulatory regime for telecommunications services found under Title II (common carrier) of the 1934 act. However, classification as an information service does not free the service from regulation. The FCC continues to have regulatory authority over information services under its Title I, ancillary jurisdiction. Similarly, classification under Title II does not mean that an entity will be subject to the full range of regulatory requirements, as the FCC is given the authority, under Section 10 of the Communications Act of 1934, to forbear from regulation."], "subsections": []}, {"section_title": "The 2005 Internet Policy Statement", "paragraphs": ["Simultaneous to the issuing of its August 2005 information services classification order, the FCC also adopted a policy statement (internet policy statement) outlining four principles to \"encourage broadband deployment and preserve and promote the open and interconnected nature of [the] public Internet.\" The four principles are (1) consumers are entitled to access the lawful internet content of their choice; (2) consumers are entitled to run applications and services of their choice (subject to the needs of law enforcement); (3) consumers are entitled to connect their choice of legal devices that do not harm the network; and (4) consumers are entitled to competition among network providers, application and service providers, and content providers. Then-FCC Chairman Martin did not call for their codification. However, he stated that they would be incorporated into the policymaking activities of the commission. For example, one of the agreed-upon conditions for the October 2005 approval of both the Verizon/MCI and the SBC/AT&T mergers was an agreement made by the involved parties to commit, for two years, \"to conduct business in a way that comports with the commission's (2005) Internet policy statement.\" In a further action, AT&T included in its concessions to gain FCC approval of its merger to BellSouth an agreement to adhere, for two years, to significant net neutrality requirements. Under terms of the merger agreement, which was approved on December 29, 2006, AT&T not only agreed to uphold, for 30 months, the FCC's internet policy statement principles, but also committed, for two years (expired December 2008), to stringent requirements to \"maintain a neutral network and neutral routing in its wireline broadband Internet access service.\"", "Then-FCC Chairman Genachowski announced, in a September 21, 2009, speech, a proposal to consider the expansion and codification of the 2005 internet policy statement and suggested that this be accomplished through a notice of proposed rulemaking (NPR) process. Shortly thereafter, an NPR on preserving the open internet and broadband industry practices was adopted by the FCC in its October 22, 2009, meeting. (See \" The FCC 2010 Open Internet Order ,\" below.) "], "subsections": []}, {"section_title": "The FCC August 2008 Comcast Decision", "paragraphs": ["In perhaps one of its most significant actions relating to its internet policy statement to date, the FCC, on August 1, 2008, ruled that Comcast Corp., a provider of internet access over cable lines, violated the FCC's policy statement when it selectively blocked peer-to-peer connections in an attempt to manage its traffic. This practice, the FCC concluded, \"unduly interfered with Internet users' rights to access the lawful Internet content and to use the applications of their choice.\" Although no monetary penalties were imposed, Comcast was required to stop these practices by the end of 2008. Comcast complied with the order, and developed a new system to manage network congestion. Comcast no longer manages congestion by focusing on specific applications (such as peer-to-peer), nor by focusing on online activities, or protocols, but identifies individual users within congested neighborhoods that are using large amounts of bandwidth in real time and slows them down, by placing them in a lower priority category, for short periods. This new system complies with the FCC internet principles in that it is application agnostic; that is, it does not discriminate against or favor one application over another but manages congestion based on the amount of a user's real-time bandwidth usage. As a result of an April 6, 2010, court ruling, the FCC's order was vacated. Comcast, however, stated that it will continue to comply with the internet principles issued in the FCC's August 2005 internet policy statement. (See \" Comcast v. FCC ,\" below.)"], "subsections": []}, {"section_title": "Comcast v. FCC", "paragraphs": ["Despite compliance, however, Comcast filed an appeal in the U.S. Court of Appeals for the District of Columbia, claiming that the FCC did not have the authority to enforce its internet policy statement, therefore making the order invalid. The FCC argued that while it did not have express statutory authority over such practices, it derived such authority based on its ancillary authority contained in Title I of the 1934 Communications Act. The court, in an April 6, 2010, decision, ruled (3-0) that the FCC did not have the authority to regulate an internet service provider's (in this case Comcast's) network management practices and vacated the FCC's order. The court ruled that the exercise of ancillary authority must be linked to statutory authority and that the FCC did not in its arguments prove that connection; it cannot exercise ancillary authority based on policy alone. More specifically, the Court ruled that the FCC \"failed to tie its assertion of ancillary authority over Comcast's Internet service to any ['statutorily mandated responsibility'].\" Based on that conclusion the court granted the petition for review and vacated the order. ", "The impact of this decision on the FCC's ability to regulate broadband services and implement its broadband policy goals remains unclear. Regardless of the path that is taken, then-FCC Chairman Genachowski stated that the court decision \"does not change our broadband policy goals, or the ultimate authority of the FCC to act to achieve those goals.\" He further stated that \"[T]he court did not question the FCC's goals; it merely invalidated one, technical, legal mechanism for broadband policy chosen by prior Commissions.\" Consistent with this statement, the FCC in a December 21, 2010, action adopted the Open Internet Order to establish rules to maintain network neutrality. (See \" The FCC 2010 Open Internet Order ,\" below.)"], "subsections": []}, {"section_title": "The FCC 2010 Open Internet Order", "paragraphs": ["The FCC adopted, on December 21, 2010, an Open Internet Order establishing rules to govern the network management practices of broadband internet access providers. The order, which was passed by a 3-2 vote, intended to maintain network neutrality by establishing three rules covering transparency, no blocking, and no unreasonable discrimination. More specifically ", "fixed and mobile broadband internet service providers were required to publicly disclose accurate information regarding network management practices, performance, and commercial terms to consumers as well as content, application, service, and device providers; fixed and mobile broadband internet service providers were both subject, to varying degrees, to no blocking requirements. Fixed providers were prohibited from blocking lawful content, applications, services, or nonharmful devices, subject to reasonable network management. Mobile providers were prohibited from blocking consumers from accessing lawful websites, subject to reasonable network management, nor were they allowed to block applications that compete with the provider's voice or video telephony services, subject to reasonable network management; and fixed broadband internet service providers were subject to a \"no unreasonable discrimination rule\" that states that they shall not unreasonably discriminate in transmitting lawful network traffic over a consumer's broadband internet access service. Reasonable network management shall not constitute unreasonable discrimination.", "Additional provisions in the order included those which provided for ongoing monitoring of the mobile broadband sector and created an Open Internet Advisory Committee to track and evaluate the effects of the rules and provide recommendations to the FCC regarding open internet policies and practices; while not banning paid prioritization, stated that it was unlikely to satisfy the \"no unreasonable discrimination\" rule; raised concerns about specialized services and while not \"adopting policies specific to such services at this time,\" would closely monitor such services; called for review, and possible adjustment, of all rules in the order no later than two years from their effective date; and detailed a formal and informal complaint process. The order, however, did not prohibit tiered or usage-based pricing (see \" Metered/Usage-Based Billing ,\" below). According to the order, the framework \"does not prevent broadband providers from asking subscribers who use the network less to pay less, and subscribers who use the network more to pay more\" since prohibiting such practices \"would force lighter end users of the network to subsidize heavier end users\" and \"would also foreclose practices that may appropriately align incentives to encourage efficient use of networks.\"", "The authority to adopt the order abandoned the \"third way approach\" previously endorsed by then-Chairman Genachowski and other Democratic commissioners, and treated broadband internet access service as an information service under Title I. The order relied on a number of provisions contained in the 1934 Communications Act, as amended, to support FCC authority. According to the order the authority to implement these rules lies in Section 706 of the 1996 Telecommunications Act, which directs the FCC to \"encourage the deployment on a reasonable and timely basis\" of \"advanced telecommunications capability\" to all Americans and to take action if it finds that such capability is not being deployed in a reasonable and timely fashion; Title II of the Communications Act and its role in protecting competition and consumers of telecommunications services; Title III, which gives the FCC the authority to license spectrum, subject to terms that serve the public interest, used to provide fixed and mobile wireless services; and Title VI, which gives the FCC the duty to protect competition in video services. ", "The Order went into effect November 20, 2011, which was 60 days after its publication in the Federal Register . Since the Order's publication multiple appeals were filed and subsequently consolidated for review in the U.S. Court of Appeals, D.C. Circuit. Verizon Communications was the remaining challenger seeking review claiming, among issues, that it was a violation of free speech and that the FCC had exceeded its authority in establishing the rules. The court issued its ruling on January 14, 2014, and remanded the decision to the FCC for consideration. (See \" The 2014 Open Internet Order Court Ruling and the FCC Response ,\" below.) "], "subsections": []}, {"section_title": "The 2014 Open Internet Order Court Ruling and the FCC Response", "paragraphs": [], "subsections": [{"section_title": "Verizon Communications Inc. v. Federal Communications Commission", "paragraphs": ["On January 14, 2014, the U.S. Court of Appeals, D.C. Circuit, issued its ruling on the challenge to the FCC's Open Internet Order ( Verizon Communications Inc. v. Federal Communications Commission , D.C. Cir., No. 11-1355). The court upheld the FCC's authority to regulate broadband internet access providers, and upheld the disclosure requirements of the Open Internet Order, but struck down the specific antiblocking and nondiscrimination rules contained in the Order. (See \" The FCC 2010 Open Internet Order ,\" above.)", "Citing the decision by the FCC to classify broadband providers as information service providers (see \" The Information Services Designation and Title I \"), not common carriers, the court stated that the Communications Act expressly prohibits the FCC from regulating them as such. The court was of the opinion that the Order's nondiscrimination rules, applied to fixed broadband providers, and antiblocking rules, applied to both fixed and wireless broadband providers, were an impermissible common carrier regulation of an information service and could not be applied. ", "However, the court upheld the disclosure rules, and more importantly upheld the FCC's general authority to use Section 706 (advanced communications incentives) of the Telecommunications Act of 1996 ( P.L. 104-104 ) to regulate broadband internet providers. Therefore the court concluded that the FCC does, within limitations, have statutory authority, under Section 706, to establish rules relating to broadband deployment and broadband providers' treatment of internet traffic. The court remanded the case to the FCC for further action."], "subsections": []}, {"section_title": "The Federal Communications Commission Response", "paragraphs": ["In response to the court remand, then FCC Chairman Wheeler issued, on February 19, 2014, a statement outlining the steps proposed \"to ensure that the Internet remains a platform for innovation, economic growth, and free expression.\" Chairman Wheeler proposed that the FCC establish new rules under its Section 706 authority that enforce and enhance the transparency rule that was upheld by the court; fulfill the \"no blocking\" goal; fulfill the goals of the nondiscrimination rule; leave open as an option the possible reclassification of internet access service as telecommunications service subject to Title II authority; forgo judicial review of the appeals court decision; solicit public comment; hold internet service providers to their commitment to honor the safeguards articulated in the 2010 Open Internet Order; and seek opportunities to enhance competition in the internet access market. ", "In conjunction with this statement the FCC established a new docket (GN Docket No. 14-28) to seek input on how to address the remand of the FCC's Open Internet rules. This docket was released February 19, 2014, to seek opinion on \"what actions the commission should make, consistent with our authority under section 706 and all other available sources of Commission authority, in light of the court's decision.\" However, it should be noted that FCC Commissioners O'Rielly and Pai issued separate statements expressing their disagreement with then-Chairman Wheeler's proposal to establish new rules to regulate the internet. Despite this opposition, the FCC, on a 3-2 vote, initiated a proceeding to establish rules to address the court's remand of its 2010 open internet order. (See \" The FCC 2014 Open Internet Notice of Proposed Rulemaking ,\" below.)"], "subsections": []}]}, {"section_title": "The FCC 2014 Open Internet Notice of Proposed Rulemaking", "paragraphs": ["On May 15, 2014, the FCC adopted, by a 3-2 party line vote, a Notice of Proposed Rulemaking (NPRM) seeking public comment on \"how best to protect and promote an open Internet.\" The NPRM (GN Docket No.14-28) solicited comment on a broad range of issues to help establish a policy framework to ensure that the internet remains an open platform and retains the concepts adopted by the FCC in its 2010 Open Internet Order, of transparency, no blocking, and nondiscrimination.", "Following the guidance of the January 2014 D.C. Circuit Appeals Court decision, the NPRM tentatively concluded that the FCC should rely on Section 706 of the 1996 Telecommunications Act for its legal authority. However, the NPRM noted that the FCC \"will seriously consider the use of Title II of the Communications Act as the basis for legal authority\" and recognizes that Section 706 and Title II are both \"viable solutions.\" The NPRM also recognized the use of Title III for mobile services and sought comment, in general, on other sources of authority the FCC may utilize. The degree to which the FCC should use forbearance was also discussed.", "The NPRM retained the definition and scope contained in the 2010 Open Internet Order which address the actions of broadband internet access service providers, and as defined did not, for example, cover the exchange of traffic between networks (e.g., peering), enterprise services (i.e., services offered to large organizations through individually negotiated offerings), data storage services, or specialized services. However, the NPRM did seek comment on whether the scope of services as defined in the 2010 Open Internet Order should be modified. The question of whether broadband provider service to edge providers, that is, their function as edge providers' carriers, should be addressed was also raised. Furthermore, the NPRM sought comment on whether it should revisit its different standard applied to mobile services regarding its no-blocking rule and its exclusion from the unreasonable discrimination rule, and whether technological and marketplaces changes are such that the FCC should consider if rules should be applied to satellite broadband internet access services. ", "The FCC tentatively concluded that the nonblocking rule established in the 2010 Open Internet Order should be upheld, but that \"the revived no-blocking rule should be interpreted as requiring broadband providers to furnish edge providers with a minimum level of access to their end-user subscribers.\" However, the NPRM proposed that the conduct of broadband providers permissible under the no-blocking rule be subject to an additional independent screen which required them \"to adhere to an enforceable legal standard of commercially reasonable practices.\" Furthermore, the NPRM sought comment on whether certain practices, such as \"paid prioritization,\" should be barred altogether or permitted if they meet the \"commercial reasonableness\" legal standard.", "In addition, the NPRM proposed to enhance the transparency rule, which was upheld by the court; to ensure that consumers and edge providers have the needed information to understand the services received and monitor practices; and to establish a multifaceted dispute resolution process including the creation of an ombudsperson to represent the interests of consumers, start-ups, and small businesses.", "President Obama, in a statement released on November 10, 2014, urged the FCC to establish rules that would reclassify consumer broadband service under Title II of the 1934 Communications Act with forbearance. More specifically, the statement called for regulations that prohibit blocking; prohibit throttling; ban paid prioritization; and increase transparency. It was also stated that these rules should also be fully applicable to mobile broadband and if necessary to interconnection points. Monitored exceptions for reasonable network management and specialized services and forbearance from Title II regulations \"that are not needed to implement the principles above\" were also included in the statement. ", "While the FCC evaluates all comments, including those of sitting Presidents, as an independent regulatory agency it has the sole responsibility to adopt the final proposal. New rules addressing this issue were adopted by the FCC in February 2015. (See \" The FCC 2015 Open Internet Order ,\" below.)"], "subsections": []}, {"section_title": "The FCC 2015 Open Internet Order", "paragraphs": ["The FCC, in its February 26, 2015, open meeting, voted 3-2, along party lines, to adopt new open internet rules (Open Internet Order) and subsequently released these rules on March 12, 2015. The order applies to mobile as well as fixed broadband internet access service and relies on Title II of the Communications Act and Section 706 of the Telecommunications Act of 1996 and, for mobile broadband, Title III for its legal authority. The order includes among its provisions the following:", "reclassifies \"broadband Internet access service\" (that is the retail broadband service Americans buy from cable, phone, and wireless providers) as a telecommunications service under Title II; bans blocking, throttling, and paid prioritization; creates a general conduct standard that internet service providers cannot harm consumers or edge providers (e.g., Google, Netflix) and gives the FCC the authority to address questionable practices on a case-by-case basis (reasonable network management will not be considered a violation of this rule); enhances existing transparency rules for both end users and edge providers (a temporary exemption from the transparency enhancements is given for small fixed and mobile providers) and creates a \"safe harbor\" process for the format and nature of the required disclosure for consumers; permits an internet service provider to engage in \"reasonable network management\" (other than paid prioritization) and will take into account the specific network management needs of mobile networks and other technologies such as unlicensed Wi-Fi networks; does not apply the open internet rules to \"non-BIAS data services,\" (aka, specialized services) a category of services defined by the FCC as those that \"do not provide access to the Internet generally\" (e.g., heart monitors or energy consumption sensors); does not apply the open internet rules to interconnection but does gives the FCC authority to hear complaints and take enforcement action, if necessary, on a case-by-case basis, under Sections 201 and 202, regarding interconnection activities of internet service providers if deemed unjust and unreasonable; applies major provisions of Title II such as no unjust and unreasonable practices or discrimination, consumer privacy, disability access, consumer complaint and enforcement processes, and fair access to poles and conduits; and forbears, without any further proceedings, from various Title II provisions (e.g., cost accounting rules, tariffs, and last-mile unbundling) resulting in forbearance from 30 statutory provisions and over 700 codified rules.", "With limited exceptions, the rules went into effect on June 12, 2015, which was 60 days after their publication in the Federal Register . Various trade groups and selected individual providers filed appeals to the courts challenging the 2015 Open Internet Order's legality; the appeals were consolidated in the U.S. Court of Appeals for the D.C. Circuit. A motion to stay the effective date of the Order was denied, allowing the rules to go into effect as scheduled on June 12, 2015. ", "Subsequently, the U.S. Court of Appeals for the D.C. Circuit, in a June 14, 2016, ruling, voted (2-1) to uphold the legality of all aspects the 2015 FCC Order. A petition requesting en banc review of the decision was denied on May 1, 2017, by the majority of the judges. Various parties filed on September 28, 2017, petitions asking the U.S. Supreme Court for review; but the U.S. Supreme Court, on November 5, 2018, denied review. "], "subsections": []}, {"section_title": "The FCC 2017 Open Internet Notice of Proposed Rulemaking", "paragraphs": ["On May 18, 2017, the FCC adopted (2-1) a Notice of Proposed Rulemaking (NPR) to reexamine the regulatory framework established in the 2015 Open Internet Order and embrace a \"light-touch\" regulatory approach. The NPR returned internet broadband access service to a Title I classification and sought comment on the existing rules governing internet service providers. More specifically, the NPR proposed to", "reinstate the information service classification of broadband internet access service (both fixed and mobile), thereby removing the service from the Title II, common carrier classification imposed by the 2015 Open Internet Order and placing it under Title I; reinstate that mobile broadband internet access service is not a commercial mobile service; eliminate the general conduct standard; seek comment on the need to \"keep, modify, or eliminate\" the \"bright line\" (no blocking, no throttling, and no paid prioritization) and transparency rules; return authority to the Federal Trade Commission to oversee and enforce the privacy practices of internet service providers; reevaluate the FCC's enforcement regime with respect to the necessity for ex ante regulatory intervention; and conduct a cost-benefit analysis as part of the proceeding. ", "The NPR comment and reply comment periods closed, and a draft order, largely upholding the NPR and overturning the 2015 Order, was approved (3-2) by the FCC on December 14, 2017. [See \" WC Docket No. 17-108 (The FCC 2017 Order) ,\" below.]"], "subsections": []}, {"section_title": "WC Docket No. 17-108 (The FCC 2017 Order)", "paragraphs": ["The FCC, in its December 14, 2017, open meeting, voted 3-2, along party lines, to adopt a new framework for the provision of broadband internet access services that largely reversed the 2015 regulatory framework and shifted much of the oversight from the FCC to the Federal Trade Commission (FTC) and the Department of Justice (DOJ). WC Docket No. 17-108 (The 2017 Order), among other things, removed broadband internet access services (BIAS) from the 2015 regulatory classification as telecommunications services subject to common carrier Title II classification; removed the \"bright line\" no blocking, no throttling, and no paid prioritization rules; and eliminated the general conduct standard; but expanded the public transparency rules. ", "More specifically, WC Docket No. 17-108 is divided into three parts: a Declaratory Ruling, a Report and Order, and an Order."], "subsections": [{"section_title": "The Declaratory Ruling", "paragraphs": ["The Declaratory Ruling includes provisions that restore the classification of BIAS as an information service; reinstate the private mobile service classification of mobile BIAS; and restore broadband consumer protection authority to the FTC. ", "The Declaratory Ruling also finds that \" ... Title II regulation reduced Internet service provider (ISP) investment in networks, as well as hampered innovation, particularly among small ISPs serving rural customers\"; and \"... public policy, in addition to legal analysis, supports the information service classification, because it is more likely to encourage broadband investment and innovation, thereby furthering the closing of the digital divide and benefitting the entire Internet ecosystem.\""], "subsections": []}, {"section_title": "The Report and Order", "paragraphs": ["The Report and Order includes provisions that enhance transparency requirements by requiring internet service providers to publicly disclose information about their practices including blocking, throttling, and paid prioritization; and eliminates the internet conduct standard.", "The Report and Order also finds that \"... transparency, combined with market forces as well as antitrust and consumer protection laws, achieve benefits comparable to those of the 2015 'bright line' rules at lower cost.\" "], "subsections": []}, {"section_title": "The Order", "paragraphs": ["The Order finds that adding to the record in this proceeding is not in the public interest.", "Reaction to the 2017 Order has been mixed. Some see the 2015 FCC rules as regulatory overreach and welcome a less regulatory approach, which they feel will stimulate broadband investment, deployment, and innovation. Others support the 2015 regulations and feel that their reversal will result in a concentration of power to the detriment of content, services, and applications providers, as well as consumers, and refute the claim that these regulations have had a negative impact on broadband investment, expansion, or innovation.", "The 2017 Order, Restoring Internet Freedom, was released by the FCC on January 4, 2018, and published in the Federal Register on February 22, 2018. Publication in the Federal Register triggered timelines for both court challenges and Congressional Review Act consideration. Petitions challenging the legality of the 2017 Order have been consolidated in the U.S. Court of Appeals, D.C. Circuit with oral arguments held on February 1, 2019. CRA resolutions to overturn the 2017 Order were introduced in the 115 th Congress. The Senate measure ( S.J.Res. 52 ) passed (52-47) the Senate on May 16, 2018, but the House measure ( H.J.Res. 129 ) was not considered. (See \" Congressional Activity ,\" below.) "], "subsections": []}, {"section_title": "Implementation of the 2017 Order", "paragraphs": ["The 2017 Order went into effect on June 11, 2018. As a result the 2015 Order has been revoked and replaced by the provisions contained in the 2017 Order. According to the FCC the 2017 Order framework has three parts", "The FTC will assume the major role and will take action against internet service providers that undertake anticompetitive acts or unfair and deceptive practices; Internet service providers will be subject to enhanced transparency requirements and must publically disclose, via a publically available, easily accessible company website or through the FCC's website, information regarding their network management practices, performance, and commercial terms of service; and Broadband internet access services are reclassified as information services, and regulations imposed by the 2015 Order are vacated, including the classification of broadband internet access services as telecommunications services subject to common carrier Title II classification; the \"bright line\" no blocking, no throttling, and no paid prioritization rules; and the general conduct standard. "], "subsections": []}]}]}, {"section_title": "Network Management", "paragraphs": ["As consumers expand their use of the internet and new multimedia and voice services become more commonplace, control over network quality and pricing is an issue. The ability of data bits to travel the network in a nondiscriminatory manner (subject to reasonable management practices), as well as the pricing structure established by broadband service providers for consumer access to that data, have become significant issues in the debate."], "subsections": [{"section_title": "Prioritization", "paragraphs": ["In the past, internet traffic has been delivered on a \"best efforts\" basis. The quality of service needed for the delivery of the most popular uses, such as email or surfing the web, is not as dependent on guaranteed quality. However, as internet use expands to include video, online gaming, and voice service, the need for uninterrupted streams of data becomes important. As the demand for such services continues to expand, a debate over the need to prioritize network traffic to ensure the quality of these services has formed. ", "The need to establish prioritized networks, although embraced by some, has led others to express policy concerns. Concern has been expressed that the ability of network providers to prioritize traffic may give them too much power over the operation of, and access to, the internet. If a multitiered internet develops where content providers pay for different service levels, some have expressed concern that the potential to limit competition exists if smaller, less financially secure content providers are unable to afford to pay for a higher level of access. Also, they state, if network providers have control over who is given priority access, the ability to discriminate among who gets such access is also present. If such a scenario were to develop, they claim, any potential benefits to consumers of a prioritized network would be lessened by a decrease in consumer choice and/or increased costs, if the fees charged for premium access are passed on to the consumer.", "Others state that prioritization will benefit consumers by ensuring faster delivery and quality of service and may be necessary to ensure the proper functioning of expanded service options. They claim that the marketplace for the provision of such services is expanding and any potential abuse is significantly decreased in a marketplace where multiple, competing broadband providers exist. Under such conditions, they claim that if a network broadband provider blocks access to content or charges unreasonable fees content providers and consumers could obtain their access from other network providers. As consumers and content providers migrate to these competitors, market share and profits of the offending network provider will decrease, they state, leading to corrective action or failure. Furthermore, any abuses that may occur, they state, can be addressed by existing enforcement agencies at the federal and state level . "], "subsections": []}, {"section_title": "Deep Packet Inspection", "paragraphs": ["The use of one management tool, deep packet inspection (DPI), illustrates the complexity of the net neutrality debate. DPI refers to a network management technique that enables network operators to inspect, in real time, both the header and the data field of the packets. As a result, DPI not only can allow network operators to identify the origin and destination points of the data packet, but also enables the network operator to determine the application used and content of that packet. The information that DPI provides enables the network operator to differentiate, or discriminate, among the packets travelling over its network. The ability to discriminate among packets enables the network operator to treat packets differently. This ability itself is not necessarily viewed in a negative light. Network managers use DPI to assist them in performing various functions that are necessary for network management and that contribute to a positive user experience. For example, DPI technology is used in filters and firewalls to detect and prevent spam, viruses, worms, and malware. DPI is also used to gain information to help plan network capacity and diagnostics, as well as to respond to law enforcement requests. However, some claim that the ability to discriminate based on the information gained via DPI also has the potential to be misused. It is the potential negative impact that DPI use could have on consumers and suppliers that raises concern for some policymakers. For example, concern has been expressed that the information gained could be used to discriminate against a competing service, causing harm to both the competitor and consumer choice by, for example, routing a network operator's own, or other preferred content, along a faster priority path, or selectively slowing down competitors' traffic. DPI's potential to extract personal information about the data that it inspects has also generated concerns, by some, about consumer privacy. ", "Therefore it is not the management tool itself that is under scrutiny, but the behavior that potentially may occur as a result of the information that DPI provides. How to develop a policy that permits some types of discrimination (i.e., \"good\" discrimination) that may be beneficial to network operation and improve the user experience while protecting against what would be considered \"harmful\" or anticompetitive discrimination becomes the crux of the policy debate. "], "subsections": []}, {"section_title": "Metered/Usage-Based Billing", "paragraphs": ["The move by some network broadband operators toward the use of metered or usage-based billing has caused considerable controversy. Under such a plan, users subscribe to a set monthly bandwidth cap, for an established fee, and are charged additional fees or could be denied service if that usage level is exceeded. The use of such billing practices, on both a trial and permanent basis, is becoming more commonplace. ", "Reaction to the imposition of usage-based billing has been mixed. Supporters of such billing models state that a small percentage of users consume a disproportionately high percentage of bandwidth and that some form of usage-based pricing may benefit the majority of subscribers, particularly those who are light users. Furthermore, they state that offering a range of service tiers at varying prices offers consumers more choice and control over their usage and subsequent costs. The major growth in bandwidth usage, they also claim, places financial pressure on existing networks for both maintenance and expansion, and establishing a pricing system which charges high bandwidth users is more equitable. ", "Opponents of such billing plans claim that such practices will stifle innovation in high bandwidth applications and are likely to discourage the experimentation with and adoption of new applications and services. Some concerns have also been expressed that a move to metered/usage-based pricing will help to protect the market share for video services offered in packaged bundles by network broadband service providers, who compete with new applications, and that if such caps must exist, they should be applied to all online video sources. The move to usage-based pricing, they state, will unfairly disadvantage competing online video services and stifle a nascent market, since video applications are more bandwidth-intensive. Opponents have also questioned the accuracy of meters, and specific usage limits and overage fees established in specific trials, stating that the former seem to be \"arbitrarily low\" and the latter \"arbitrarily high.\" Furthermore, they state that since network congestion only occurs in specific locations and is temporary, monthly data caps are not a good measure of congestion causation. Citing the generally falling costs of network equipment and the stability of profit margins, they also question the claims of network broadband operators that increased revenue streams are needed to supply the necessary capital to invest in new infrastructure to meet the growing demand for high bandwidth applications."], "subsections": []}, {"section_title": "Zero Rating/Sponsored Data Plans", "paragraphs": ["Zero rating plans refer to the practice by internet service providers of allowing their subscribers to consume specific content or services without incurring charges against the subscriber's usage limits. In the case of sponsored data a third party (e.g., an interested edge provider) pays the charges that the customer would otherwise incur. Many different variations of these services are being implemented in the marketplace by wireless carriers.", "Supporters of such plans claim that they can improve consumer choice and encourage consumers to try new and perhaps usage-heavy services and can improve competition among edge providers. Those critical of such plans state that they can be used for anticompetitive purposes to favor one edge provider over another, particularly those edge providers that are affiliated with the internet service provider, or those that are entrenched and well financed. ", "Whether or not such activities should, or should not, be considered a violation of the terms of the FCC's 2015 Open Internet Order's general conduct rule remains controversial. The FCC, under former Chairman Wheeler, requested in a December 2015 letter that AT&T, T-Mobile, and Comcast individually meet with FCC staff to discuss their various plans to enable the FCC to \"have all the facts to understand how this service relates to the Commission's goal of maintaining a free and open Internet while incentivizing innovation and investment from all sources.\" A similar letter was sent, at a later date (January 2016), to Verizon inquiring about its FreeBee Data 360 offering. The FCC concluded in a January 11, 2017, Policy Review Report that the specific approaches taken by AT&T and Verizon may harm competition and put forward a draft framework for evaluating such data offering plans. Subsequently, however, the FCC, under current Chairman Pai, issued an Order on February 3, 2017, that retracted the report and closed the inquiries, further stating that the report \"will have no legal or other effect or meaning going forward.\" "], "subsections": []}]}, {"section_title": "Congressional Activity", "paragraphs": [], "subsections": [{"section_title": "116th Congress", "paragraphs": ["Debate over what the appropriate regulatory framework should be for broadband access has continued in the 116 th Congress. Six bills ( H.R. 1006 , H.R. 1096 , H.R. 1101 , H.R. 1644 , H.R. 1860 , S. 682 ) have been introduced to date. An amended version of H.R. 1644 passed (232-190) the House on April 10, 2019.", "H.R. 1644 (and its companion measure, S. 682 ) add a new title to the Communications Act that negates the 2017 Order and restores the 2015 Order and its subsequent regulations. H.R. 1644 , introduced on March 8, 2019, by Representative Doyle and S. 682 , introduced on March 6, 2019, by Senator Markey, add a new title to the Communications Act that repeals the 2017 Order, stating that the rule \"shall have no force or effect,\" and prohibits the FCC, in most circumstances, from reissuing the rule or enacting a new rule that is substantially the same. The bills also restore the 2015 Order and its subsequent regulations, thereby once again classifying both mobile and fixed broadband internet access service as a telecommunications service under Title II of the Communications Act and restoring regulations, including those that prohibit blocking, throttling, and paid prioritization and establish a general conduct standard. ", "An amended version of H.R. 1644 was passed (30-22) by the House Energy and Commerce Committee on April 3, 2019. A revised version of the subcommittee-passed H.R. 1644 , a manager's amendment in the nature of a substitute (AINS) offered by Representative Doyle, was considered by the Committee. The AINS contained a provision, in the definition section, to clarify the forbearance provisions in the subcommittee passed bill. One amendment to the AINS, containing a one-year exemption from the 2015 Order enhanced transparency requirements for small internet service providers (that is those with 100,000 or fewer subscribers), was also approved prior to Committee passage. An amended version of H.R. 1644 (containing 12 additional amendments considered on the floor) passed (232-190) the House on April 10, 2019. ", "Three bills ( H.R. 1006 , H.R. 1096 , H.R. 1101 ) establish a regulatory framework by amending Title I of the Communications Act and H.R. 1006 , introduced on February 6, 2019, by Representative Latta, amends Title I of the Communications Act to address potential negative behaviors of BIAS providers. Provisions include those that prohibit blocking and unjust and discriminatory behavior, subject to reasonable network management; establish transparency requirements; establish FCC enforcement authority, including the authority to issue fines and forfeitures up to $2 million; in general, prohibit the FCC from imposing regulations on BIAS services under Title II; protect the needs of emergency communications, law enforcement, public safety or national security, copyright infringement or other unlawful activity; and preserve the authority of the Department of Justice and the Federal Trade Commission.", "H.R. 1096 , introduced on February 7, 2019, by Representative Rodgers, amends Title I of the Communications Act to require rules applicable to BIAS providers that establish transparency requirements; prohibit blocking and degrading (throttling) lawful traffic, subject to reasonable network management; prohibit paid prioritization; and contain a savings clause relating to emergency communications, law enforcement, public safety or national security, copyright infringement or other unlawful activity.", "H.R. 1101 , introduced on February 7, 2019, by Representative Walden, amends Title I of the Communications Act to establish obligations for BIAS providers. These include no blocking or throttling, subject to reasonable network management; no paid prioritization; and establishment of transparency rules. Additional provisions require the FCC to enforce these rules through adjudication of complaints and establish, no later than 60 days after enactment, formal complaint procedures to address alleged violations; protect the needs of emergency communications, law enforcement, public safety or national security, copyright infringement or other unlawful activity; protect the ability of BIAS providers to offer specialized services and the right of consumers to choice of service plans or control over their chosen BIAS; and establish that BIAS or any other mass-market retail service providing advanced telecommunications capability shall be considered an information service and that Section 706 may not be relied upon as a grant of authority.", "A more narrowly focused measure, H.R. 1860 , introduced on March 25, 2019, by Representative Kinzinger, prohibits the FCC from regulating the rates charged for BIAS."], "subsections": []}, {"section_title": "115th Congress", "paragraphs": ["Congressional activity in the 115 th Congress sought to address a wide range of issues directly related to the debate over the appropriate framework for the provision of and access to broadband networks. Legislation included Congressional Review Act (CRA) resolutions to overturn the 2017 Order ( H.J.Res. 129 and S.J.Res. 52 ); a measure ( S. 993 ) to nullify the 2015 Order; comprehensive legislation ( H.R. 4682 , H.R. 6393 , S. 2510 , and S. 2853 ) to provide a regulatory framework to outline FCC authority over broadband internet access services; and measures to address the privacy and transparency regulations of the 2015 Order. ", "Publication of the 2017 Order in the Federal Register on February 22, 2018, triggered timelines for CRA consideration. CRA resolutions to overturn the 2017 Order were introduced on February 27, 2018, in both the House ( H.J.Res. 129 ) by Representative Doyle, and the Senate ( S.J.Res. 52 ) by Senator Markey. Both measures stated that Congress disapproves \"the rule\" (in this case the FCC 2017 Order) and that the rule \"shall have no force or effect.\" If the CRA joint resolution is enacted the rule \"shall be treated as though such rule had never taken effect.\" Additionally, the agency, in this case the FCC, may not, in most circumstances, promulgate the same rule again. S.J.Res. 52 passed (52-47) the Senate on May 16, 2018, and was sent to the House and held at the desk. On May 17, 2018, Representative Doyle filed a discharge petition to bring a House floor vote on H.J.Res. 129 but the House measure did not come up for consideration.", "On the other hand, legislation ( S. 993 ) to nullify the FCC's 2015 Open Internet Order was introduced on May 1, 2017, by Senator Lee. S. 993 nullified the FCC's 2015 Order, prohibited the FCC from reclassifying broadband internet access service as a telecommunications service, and prohibited the FCC from issuing a substantially similar rule absent congressional authorization. No further action was taken on the measure.", "The FCC's adoption (3-2) of the 2017 Order that largely reversed the 2015 regulatory framework (see \" WC Docket No. 17-108 (The FCC 2017 Order) \" above) reopened debate over whether Congress should take broader action to amend existing law to provide guidance and more stability to FCC authority. Four measures ( H.R. 4682 , H.R. 6393 , S. 2510 , and S. 2853 ) to provide a regulatory framework to outline FCC authority over broadband internet access services were introduced. ", "H.R. 4682 , introduced on December 19, 2017, by Representative Blackburn, and S. 2510 , introduced by Senator Kennedy on March 7, 2018, amended the Communications Act of 1934 to address a broad range of issues. More specifically, provisions contained in both measures included those which prohibited broadband internet access service (BIAS) providers from blocking lawful content or degrading (throttling) lawful internet traffic, subject to reasonable network management; granted FCC enforcement authority and required the FCC to establish formal complaint procedures to address alleged violations; preserved the ability of BIAS providers to offer, with a prohibition on certain practices, specialized services; established BIAS as an information service; and preempted state and local authority over \"internet openness obligations\" for the provision of BIAS with exceptions for emergency communications or law enforcement, public safety, or national security obligations. Provisions in H.R. 4682 also established eligibility of BIAS services for Federal Universal Service Fund program support. H.R. 4682 and S. 2510 were referred to the House Committee on Energy and Commerce and the Senate Committee on Commerce, Science, and Transportation, respectively, but no further action was taken. S. 2853 , introduced on May 16, 2018, by Senator Thune, also amended the Communications Act of 1934 to establish a framework to address broadband internet access services. S. 2853 is similar to H.R. 4682 and S. 2510 in that it classified broadband as an information service, prohibited both blocking and throttling subject to reasonable network management, permitted with limitations the ability to provide specialized services, and provided for a similar role for the FCC. However, unlike the two previous measures, S. 2853 contained provisions that prohibit paid prioritization and contain transparency obligations; did not contain specific provisions to preempt state and local authority; and clarified that Section 706 of the Telecommunications Act of 1996 may not be used as a grant of regulatory authority. S. 2853 was referred to the Senate Committee on Commerce, Science, and Transportation but no further action was taken. H.R. 6393 , introduced on July 17, 2018, by Representative Coffman, established a new title, Title VIII, in the 1934 Communications Act to provide a regulatory framework for broadband internet access providers. Provisions included those that banned blocking, throttling, and \"paid preferential treatment\" subject to reasonable network management, and established a general conduct standard. Included among the additional provisions were those that established transparency requirements, granted the FCC oversight over interconnection, permitted specialized services, stated that internet service providers are eligible to receive funds from, and may be required to contribute to, the Universal Service Fund, ensured disability access to broadband equipment and services, and exempted Title VIII provisions from FCC forebearance authority. H.R. 6393 was referred to the House Committee on Energy and Commerce but no further action was taken.", "Congressional action in the 115 th Congress also focused on two specific aspects of the 2015 Open Internet Order rules: privacy ( S.J.Res. 34 , S. 878 , S. 964 , H.J.Res. 86 , H.Res. 230 , H.R. 1754 , H.R. 1868 , H.R. 2520 , H.R. 3175 ) and transparency ( S. 228 , H.R. 288 ). "], "subsections": [{"section_title": "Privacy", "paragraphs": ["Congress successfully used the Congressional Review Act (CRA; 5 U.S.C. paras. 801-808) to revoke the customer privacy rules adopted by the FCC under the 2015 Open Internet Order. Legislation ( S.J.Res. 34 , H.J.Res. 86 ), in the form of a joint resolution, was introduced by Senator Flake and Representative Blackburn, respectively, to overturn the FCC's customer privacy rules. The identical joint resolutions stated \"that Congress disapproves the rule submitted by the Federal Communications Commission relating to 'Protecting the Privacy of Customers of Broadband and Other Telecommunications Services' (81 Federal Register 87274 (December 2, 2016) and such rule will have no force or effect.\" S.J.Res. 34 passed the Senate (50-48) on March 23, 2017, and the House (215-205) on March 28, 2017, and was signed by the President on April 3, 2017 ( P.L. 115-22 ). This action prevents any new rule subject to the joint resolution from taking effect and invalidates any rules that have already been in effect. Additionally, it prevents the agency (in this case the FCC) from reissuing the rule in \"substantially the same form\" or issuing a \"new rule that is substantially the same\" as the disapproved rule unless specifically authorized by a law enacted after the approved resolution (CRA. 5 U.S.C. para 801(b)(2)).", "Additional measures ( H.R. 1754 , H.R. 1868 , H.R. 2520 , H.R. 3175 , S. 878 , and S. 964 ) addressing other aspects of the privacy issue, as it relates to protection of broadband user data privacy, were introduced but received no further action."], "subsections": []}, {"section_title": "Transparency", "paragraphs": ["Legislation ( H.R. 288 , S. 228 ) addressing the transparency requirements contained in the 2015 Open Internet Order was under consideration. Transparency requirements refer to the disclosures that internet service providers are required to provide to their end users and edge providers and include, among other things, network management practices, performance, and commercial terms. These requirements were expanded upon or \"enhanced\" in the 2015 Open Internet Order, and small internet service providers (i.e., those with 100,000 or fewer subscribers) were given a temporary exemption from these enhanced requirements. H.R. 288 , introduced on January 4, 2017, by Representative Walden, addresses the transparency requirements contained in the 2015 Order. H.R. 288 expanded the exemption to include internet service providers with 250,000 or fewer subscribers and sunset the transparency exemption five years from the bill's enactment. The bill also required the FCC to report to Congress 180 days after the bill's enactment on whether the exemption should be made permanent and whether the definition of \"small\" for exemption purposes should be modified. H.R. 288 passed the House, by voice vote, on January 10, 2017, but received no further action.", "S. 228 , introduced on January 24, 2017, by Senator Daines, also addressed the transparency exemption and was largely identical to H.R. 288 . S. 228 provided for an exemption of the enhanced transparency rule contained in the 2015 Open Internet Order for small businesses. The term \"small business\" was defined for purposes of the exemption as any provider of broadband internet access service that has not more than 250,000 subscribers. The bill also required the FCC to report to Congress 180 days after the bill's enactment, on whether the exemption should be made permanent and whether the definition of \"small business\" for exemption purposes should be modified. The exemption was to last for five years after enactment or until the FCC completed the above report and a rulemaking to implement those recommendations. S. 228 was referred to the Senate Commerce, Science, and Transportation Committee, but no further action was taken."], "subsections": []}]}, {"section_title": "114th Congress", "paragraphs": ["Ten measures ( S. 40 , S. 2283 , S. 2602 , S.J.Res. 14 , H.R. 196 , H.R. 279 , H.R. 1212 , H.R. 2666 , H.R. 4596 , and H.J.Res. 42 ) addressing broadband regulation were introduced in the 114 th Congress. Amended versions of H.R. 4596 , dealing with transparency, and H.R. 2666 , dealing with rate regulation, passed the House on March 16, 2016, and April 15, 2016, respectively. Draft legislation, offered by the House Energy and Commerce Committee and the Senate Committee on Commerce, Science, and Transportation, had also been a focal point of hearings. However, no final action was taken on any of these measures.", "S. 40 , the Online Competition and Consumer Choice Act of 2015, and its companion measure H.R. 196 , introduced on January 7, 2015, by Senator Leahy and Representative Matsui, respectively, addressed the relationship between a broadband internet access provider and a content provider. Both bills directed the FCC to establish/adopt regulations, within 90 days of enactment, to prohibit broadband internet access providers from entering into agreements with content providers, for pay, to give preferential treatment or priority to their content (often termed \"paid prioritization\"), and prohibited broadband providers from giving preferential treatment to their own or affiliated content. These rules applied to the traffic/content that travels between the access provider and the end user, often termed \"the last mile.\" Exceptions were given to address the needs of emergency communications or law enforcement, public safety, or national security authorities. ", "H.R. 279 , introduced on January 12, 2015, by Representative Latta, prohibited the FCC from regulating the provision of broadband internet access as a telecommunications service. More specifically, the bill included provisions that classified broadband internet access service as an \"information service,\" not a telecommunications service, and clarified that a provider of broadband internet access service may not be treated as a telecommunications carrier when engaged in the provision of an information service. This measure prevented the FCC from regulating providers of broadband internet access services under Title II of the Communications Act. Representative Blackburn, in direct response to the FCC's February 26, 2015, adoption of the Open Internet Order, introduced H.R. 1212 , the \"Internet Freedom Act,\" on March 3, 2015. H.R. 1212 blocked the implementation of the FCC's adopted Open Internet Order (GN Docket No. 14-28) by stating that it \"shall have no force or effect.\" Furthermore, it prohibited the FCC from reissuing a rule in substantially the same form or issuing a new rule that is substantially the same, unless the reissued or new rule is specifically authorized by a law enacted after the date of the enactment of this act. Exceptions were granted to protect national security or public safety, or to assist or facilitate actions taken by federal or state law enforcement agencies. Similarly S. 2602 , the \"Restoring Internet Freedom Act,\" introduced by Senator Lee, on February 25, 2016, also negated the FCC's 2015 Open Internet Order. S. 2602 was identical to H.R. 1212 but did not contain the provisions relating to exceptions. ", "A more targeted measure, H.R. 2666 , the No Rate Regulation of Broadband Internet Access Act, introduced by Representative Kinzinger, on June 4, 2015, prohibited the FCC from regulating the rates charged for broadband internet access as defined by the Open Internet Order. H.R. 2666 was approved (15-11) by the House Communications Subcommittee by a party line vote on February 11, 2016. An amended version of H.R. 2666 was approved (29-19) by the House Energy and Commerce Committee on March 15, 2016. Prior to full committee passage of H.R. 2666 , an amendment stating that the bill would not affect the FCC's authority over data roaming, interconnection, truth-in-billing, paid prioritization, and rates charged for services that receive universal service support was approved. H.R. 2666 passed the House (241-173) without further amendment, on April 15, 2016.", "Another approach, using the Congressional Review Act (CRA; 5 U.S.C. paras. 801-808) to overturn the 2015 Order, was also under consideration. H.J.Res. 42 , introduced on April 13, 2015, by Representative Doug Collins, contained a resolution stating that \"Congress disapproves the rule submitted by the Federal Communications Commission relating to the matter of protecting and promoting the open Internet ... adopted by the Commission on February 26, 2015 \u2026 and such rule shall have no force or effect.\" A similar measure, S.J.Res. 14 , introduced on April 28, 2015, by Senator Rand Paul stated that \"Congress disapproves the rule submitted by the Federal Communications Commission relating to regulating broadband Internet access ..., and such rule will have no force and effect.\" The CRA empowers Congress to review, under an expedited legislative process, new federal regulations and, if a joint resolution is passed and signed into law, to invalidate such regulations.", "Attempts were also made, through the appropriations process, to add language that would have delayed the FCC from using its funds to implement the Open Internet Order until the courts address its legality and/or regulate rates. Language attached to the House Financial Services FY2017 appropriation measure ( H.R. 5485 ) contained among its provisions those that prevented the FCC from using any funds \"... to implement, administer or enforce\" the Open Internet Order until the legal challenges to the Order have been resolved (Title VI \u00a7632). The bill also contained a provision that prohibited the FCC from using FY2017 funds to directly or indirectly regulate the prices, fees, or data caps and allowances charged or imposed by providers of broadband internet access services (Title VI \u00a7631). The funding bill was passed (30-17) by the House Appropriations Committee on June 9, 2016, and passed the House (239-185) on July 7, 2016. ", "Separately, legislation ( H.R. 4596 , S. 2283 ) addressing the transparency requirements contained in the 2015 Open Internet Order was also under consideration. Transparency requirements refer to the disclosures that internet service providers are required to provide to their end users and edge providers and includes, among other things, network management practices, performance, and commercial terms. These requirements were expanded upon or \"enhanced\" in the 2015 Open Internet Order, and small internet service providers were given a temporary exemption from these enhanced requirements. H.R. 4596 , introduced on February 24, 2016, by Representative Walden, addressed the transparency requirements contained in the 2015 Order. This measure was amended and passed, by voice vote, by the House Energy and Commerce Committee on February 25, 2016, and subsequently passed (411-0) the House on March 16, 2016. H.R. 4596 , as passed by the House, sunset the transparency exemption five years from the bill's enactment and defined small internet service providers as those who have 250,000 subscribers or less. The bill also required the FCC to report to Congress 180 days after the bill's enactment on whether the exemption should be made permanent and whether the definition of \"small\" for exemption purposes should be modified. S. 2283 , introduced on November 16, 2015, by Senator Daines, also addressed the transparency exemption. An amended version of S. 2283 passed the Senate Commerce Committee, by voice vote, on June 15, 2016. The bill, as amended, provided for an exemption of the enhanced transparency rule contained in the 2015 Open Internet Order for small businesses. The term \"small business\" was defined for purposes of the exemption as any provider of broadband internet access service that has not more than 250,000 subscribers. The bill also required the FCC to report to Congress 180 days after the bill's enactment on whether the exemption should be made permanent and whether the definition of \"small\" for exemption purposes should be modified. The exemption would have lasted for three years after enactment or until the FCC completed the above report and a rulemaking to implement those recommendations. ", "To some degree the debate in the 114 th Congress over broadband regulation became more nuanced. Some looked to the FCC to address this issue using current provisions in the 1934 Communications Act to protect the marketplace from potential abuses that could threaten the net neutrality concept. Others felt that existing laws are outdated and limited, cannot be used to establish regulations to address current issues, and would not stand up to court review. They advocated that the FCC should look to Congress for guidance to amend current law to update FCC authority before action is taken. Senator Thune released a list of 11 principles that he felt should be used as a guide to develop legislation. These principles are as follows: prohibit blocking; prohibit throttling; prohibit paid prioritization; require transparency; apply rules to both wireline and wireless; allow for reasonable network management; allow for specialized services; protect consumer choice; classify broadband internet access as an information service under the Communications Act; clarify that Section 706 of the Telecommunications Act may not be used as a grant of regulatory authority; and direct the FCC to enforce and abide by these principles.", "Draft legislation, guided by these principles, was offered by the House Energy and Commerce Committee and the Senate Committee on Commerce, Science, and Transportation. The draft amended the Communications Act of 1934 to prohibit blocking lawful content and nonharmful devices (subject to reasonable network management), throttling data (subject to reasonable network management), and paid prioritization; and required transparency of network management practices. The FCC was directed to enforce these provisions through the establishment of a formal complaint procedure. The draft permitted, within certain guidelines, the offering of specialized services. The provision of broadband internet access service (as well as other mass market retail services providing advanced telecommunications capability) was classified as an information service. The draft also prohibited the FCC, or any state commission, from using Section 706 of the Telecommunications Act of 1996 as a grant of authority. This draft legislation was the focus of hearings, held on January 21, 2015, in the Senate Commerce Committee and the House Subcommittee on Communications and Technology. ", "Additional hearings focusing on a wide range of issues related to the net neutrality/broadband regulation debate were held by the Senate Commerce Committee, the House Judiciary Committee, the House Subcommittee on Communications and Technology, the House Committee on Oversight and Government Reform, and the House Financial Services Subcommittee."], "subsections": []}, {"section_title": "113th Congress", "paragraphs": ["Seven measures ( H.R. 3982 , H.R. 4070 , H.R. 4752 , H.R. 4880 , H.R. 5429 , S. 1981 , and S. 2476 ) were introduced in direct response to the January 2014 decision issued by the U.S. Court of Appeals, D.C. Circuit, which struck down the antiblocking and nondiscrimination rules adopted by the FCC in its Open Internet Order ( Verizon Communications Inc. v. Federal Communications Commission , D.C. Cir., No.11-1355). H.R. 3982 , the Open Internet Preservation Act of 2014, and its companion measure S. 1981 , introduced on February 3, 2014, restored the antiblocking and nondiscrimination rules struck down by the court until the FCC takes final action, based on Section 706 authority, upheld by the court, to establish new rules in its current Open Internet proceeding. The FCC was also given the authority to adjudicate cases under those rules that occurred during that period. H.R. 4880 , the \"Online Competition and Consumer Choice Act of 2014,\" and its companion measure S. 2476 , introduced on June 17, 2014, directed the FCC to establish regulations that prohibit paid prioritization agreements between internet service providers and content providers on the internet connection between the internet service provider and the consumer and prohibit broadband providers from prioritizing or giving preferential treatment to their own traffic, or the traffic of their affiliates, over the traffic of others. H.R. 5429 , the \"Open Internet Act of 2014,\" introduced on September 9, 2014, restored the authority of the FCC to adopt the rules vacated by the U.S. D.C. Court of Appeals in Verizon v. Federal Communications Commission (the FCC's 2010 Open Internet Order).", "On the other hand, H.R. 4070 , the Internet Freedom Act, introduced on February 21, 2014, stated that the FCC's 2010 Open Internet rules shall have \"no force or effect\" and prohibited the FCC from reissuing regulations in the same or substantially the same form unless they were specifically authorized by a law enacted after the date of the enactment of the act. Exceptions were made for regulations determined by the FCC to be necessary to prevent damage to U.S. national security; ensure the public safety; or assist or facilitate actions taken by a federal or state law enforcement agency. H.R. 4752 , introduced on May 28, 2014, amended the Communications Act of 1934 to prohibit the FCC from reclassifying broadband networks under Title II of the Communications Act. The bill included, among other provisions, that the term \"information service\" is not a telecommunications service but includes broadband internet access service and that a provider of an information service may not be treated as a telecommunications carrier when engaged in the provision of an information service.", "The House Judiciary Committee, Subcommittee on Regulatory Reform, held a hearing on June 20, 2014, examining the role of antitrust law and regulation as it related to the broadband access debate. The Senate Judiciary Committee held a field hearing in Vermont on July 1, 2014, and a hearing on September 17, 2014, to address issues related to an open internet. "], "subsections": []}, {"section_title": "112th Congress", "paragraphs": ["A consensus on the net neutrality issue remained elusive and support for the FCC's Open Internet Order was mixed. (See \" The FCC 2010 Open Internet Order ,\" above.) While some Members of Congress supported the action and in some cases would have supported an even stronger approach, others felt that the FCC had overstepped its authority and that the regulation of the internet is not only unnecessary, but harmful. Internet regulation and the FCC's authority to implement such regulations was a topic of legislation ( H.R. 96 , H.R. 166 , S. 74 , H.R. 2434 , H.R. 1 , H.R. 3630 , H.J.Res. 37 , S.J.Res. 6 ) and hearings (Senate Commerce Committee, House Communications Subcommittee, and House Intellectual Property, Competition, and the Internet Subcommittee) in the 112 th Congress.", "Legislation to limit FCC regulation was introduced. H.R. 96 , the Internet Freedom Act, introduced, on January 5, 2011, by Representative Blackburn and 59 additional original cosponsors, prohibited, with exceptions, the FCC from proposing, promulgating, or issuing any regulations regarding the internet or IP-enabled services, effective the date of the bill's enactment. Exceptions were made for regulations that the FCC determined were necessary to prevent damage to national security, to ensure the public safety, or to assist or facilitate actions taken by a federal or state law enforcement agency. The bill also contained a finding that the internet and IP-enabled services are services affecting interstate commerce and are not subject to state or municipality jurisdiction. Another measure, H.R. 166 , the \"Internet Investment, Innovation, and Competition Preservation Act,\" introduced on January 5, 2011, by Representative Stearns, required the FCC to prove the existence of a \"market failure\" before regulating information services or internet access services. The FCC must also conclude that the \"market failure\" is causing \"specific, identified harm to consumers\" and that regulations are necessary to ameliorate that harm. The bill also contained provisions that required any FCC regulation to be the \"least restrictive,\" determine that the benefits exceed the cost, permit network management, not prohibit managed services, be reviewed every two years, and be subject to sunset. Any such regulation was required to be enforced on a nondiscriminatory basis between and among broadband network, service, application, and content providers. A more narrowly focused limitation was contained within H.R. 3630 , the \"Middle Class Tax Relief and Job Creation Act of 2011,\" as passed (234-193) by the House on December 13, 2011. Section 4105 of Title IV (spectrum provisions) of the bill prohibited the FCC from imposing network access/management requirements on licensees. More specifically, the provision prohibited the promulgation of auction service rules that restrict a licensee's ability to manage network traffic or prioritize the traffic on its network, or that would require providing network access on a wholesale basis. However, the provision was removed from the bill prior to final passage ( P.L. 112-96 ). ", "Legislation to strengthen the FCC's ability to regulate open access by amending Title II of the 1934 Communications Act was also introduced. S. 74 , the Internet Freedom, Broadband Promotion, and Consumer Protection Act of 2011, introduced January 25, 2011, by Senator Cantwell, provided for strengthened open access protections. More specifically, the bill contained among its provisions those that codify the four FCC principles issued in 2005 as well as those to require internet service providers to be nondiscriminatory regarding access and transparent in their network management practices. The bill also required internet service providers to provide service to end users upon \"reasonable request\" and offer stand-alone broadband access at \"reasonable rates, terms, and conditions\" and prohibited internet service providers from requiring paid prioritization. The bill's requirements applied to both wireline and wireless platforms; however, the FCC was allowed to take into consideration differences in network technologies when applying requirements. The FCC was tasked with establishing the necessary rules, and injured parties could be awarded damages by the FCC or a federal district court. ", "Other measures, which proved unsuccessful, were considered to prevent, or at least delay, implementation of the FCC's Open Internet Order. Attempts were made, through the appropriations process, to add language that would prevent the FCC from using its funds to implement the Open Internet Order. Language attached to the FY2011 appropriation measure, H.R. 1 , to prevent the use of FCC FY2011 funds for implementation of the order was passed by the House. The Continuing Appropriations Act, 2011 ( H.R. 1 ), passed (235-189) by the House on February 19, 2011, contained an amendment, introduced by Representative Walden and passed by the House (244-181), to prohibit the FCC from using any funds made available by the act to implement the FCC's Open Internet Order adopted on December 21, 2010. No such provision, however, was included in the final FY2011 appropriations bill, H.R. 1473 , passed by Congress and signed by the President ( P.L. 112-10 ). Similarly, language included in the FY2012 Financial Services and General Government Appropriations bill ( H.R. 2434 ), which includes funding for the FCC, contained a provision that barred the FCC from using any funds to implement its Open Internet Order adopted December 21, 2010. This measure passed the House Appropriations Committee on June 23, 2011 ( H.Rept. 112-136 ), but no such provision was included in the final FY2012 consolidated appropriations bill, H.R. 2055 , which was signed by President Obama ( P.L. 112-74 ) on December 23, 2011.", "Another approach, using the Congressional Review Act to overturn the order, was also considered. Identical resolutions of disapproval were introduced, on February 16, 2011, in both the House ( H.J.Res. 37 ) and Senate ( S.J.Res. 6 ). These measures stated that Congress disapproves of the rule submitted by the FCC's report and order relating to the matter of preserving the open internet and broadband industry practices adopted by the FCC on December 21, 2010, and further stated that \"such rule would have no force or effect.\" A hearing on H.J.Res. 37 was held by the House Energy and Commerce Communications and Technology Subcommittee on March 9, 2011, and the subcommittee passed the measure (15-8) on a party-line vote immediately following the hearing. On March 25, 2011, the House Energy and Commerce Committee passed (30-23) H.J.Res. 37 . On April 8, 2011, the full House considered and passed (240-179) H.J.Res. 37 . However, an identical resolution of disapproval ( S.J.Res. 6 ) failed to pass the Senate on November 10, 2011, by a 52-46 vote.", "Legislation addressing the issue of data usage caps was also introduced. The Data Cap Integrity Act of 2012 ( S. 3703 ), introduced on December 20, 2012, by Senator Wyden, addressed the usage of data caps by internet service providers (ISPs) and their implementation. Included among the bill's provisions were those that required that an ISP that imposes data caps must be certified by the FCC as to accuracy of data cap measurement; that the cap \"functions to reasonably limit network congestion without unnecessarily restricting Internet use\"; and that the cap does not discriminate (that is, for purposes of measuring does not provide \"preferential treatment of data that is based on the source or content of the data\"). The bill also required ISPs that apply data caps to provide data tools, or identify commercially available data measurement tools, to consumers for monitoring and management. Civil penalties for violations were to be used to reimburse those violated, and unobligated funds in excess of $5 million (annually) were to be transferred from the newly created \"Data Cap Integrity Fund\" to the U.S. Department of the Treasury for deficit reduction."], "subsections": []}, {"section_title": "111th Congress", "paragraphs": ["Although the 111 th Congress saw considerable activity addressing the net neutrality debate, no final action was taken. One stand-alone measure ( H.R. 3458 ) that comprehensively addressed the net neutrality debate was introduced in the 111 th Congress. H.R. 3458 , the Internet Freedom Preservation Act of 2009, introduced by Representative Edward Markey, and also supported by then-House Energy and Commerce Committee Chairman Waxman, sought to establish a national policy of nondiscrimination and openness with respect to internet access offered to the public. The bill also required the offering of unbundled, or stand-alone, internet access service as well as transparency for the consuming public with respect to speed, nature, and limitations on service offerings and the public disclosure of network management practices. The FCC was tasked with promulgating the rules relating to the enforcement and implementation of the legislation. Then-House Communications, Technology, and the Internet Subcommittee Chairman Boucher stated that he continued to work with broadband providers and content providers to seek common ground on network management practices, and chose to pursue that approach. Furthermore, the Senate Commerce and House Energy and Commerce Committees and Communications Subcommittees held a series of staff-led sessions with industry stakeholders to discuss a range of communications policies including broadband regulation and FCC authority.", "Two bills ( S. 1836 , H.R. 3924 ) were introduced in response to the adoption by the FCC of a NPR on preserving the open internet. S. 1836 , introduced on October 22, 2009, by Senator McCain, prohibited, with some exceptions, the FCC from proposing, promulgating, or issuing any further regulations regarding the internet or IP-enabled services. Exceptions included those relating to national security, public safety, federal or state law enforcement, and Universal Service Fund solvency. Additional provisions reaffirmed that existing regulations, including those relating to CALEA, remain in force and stated as a general principle that the internet and all IP-enabled services are services affecting interstate commerce and are not subject to state or municipal locality jurisdiction. H.R. 3924 , introduced by Representative Blackburn on October 26, 2009, was identical to S. 1836 , except for title and the omission of the reference to the Universal Service Fund. H.Con.Res. 311 , introduced by Representative Gene Green and 49 other House Members on July 30, 2010, affirmed that it is the responsibility of Congress to determine the regulatory authority of the FCC with respect to broadband internet services and called upon the FCC to suspend any further action on its proceedings until such time as Congress delegates such authority to the FCC.", "Another measure ( H.R. 5257 ), introduced by Representative Stearns, addressed the possible reclassification of broadband service and would have required, among other provisions, that the FCC prove the existence of a \"market failure\" before regulating information services or internet access services. Furthermore, the bill required, among other provisions, that the FCC conclude that the market failure is causing \"specific, identified harm to consumers\" and if devising regulations must adopt those that are the \"least restrictive,\" permit network management, and are subject to sunset. Still another measure ( S. 3624 ), introduced by Senator DeMint, contained provisions that required the FCC to prove consumers are being substantially harmed by a lack of marketplace choice before imposing new regulations and to weigh the potential cost of action against any benefits to consumers or competition. The FCC was given the authority to hear complaints for violations and award damages to injured parties. The bill also required that any rules the FCC adopted would sunset in five years unless it could make the same finding again.", "The net neutrality issue was also narrowly addressed within the context of the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5 ). The ARRA contains provisions that require the National Telecommunications and Information Administration (NTIA), in consultation with the FCC, to establish \"nondiscrimination and network interconnection obligations\" as a requirement for grant participants in the Broadband Technology Opportunities Program (BTOP). The law further directs that the FCC's four broadband policy principles, issued in August 2005, are the minimum obligations to be imposed. These obligations were issued July 1, 2009, in conjunction with the release of the notice of funds availability (NOFA) soliciting applications for the program. The FCC's National Broadband Plan (NBP), which was required to be written in compliance with provisions contained in the ARRA, while making no recommendations, did contain discussions regarding the open internet and the classification of information services. ", "Concern over the move by some broadband network providers to expand their implementation of metered or consumption-based billing prompted the introduction of legislation ( H.R. 2902 ) to provide for oversight of volume usage service plans. H.R. 2902 , the Broadband Internet Fairness Act, introduced by former Representative Massa, required, among its provisions, that any broadband internet service provider serving 2 million or more subscribers submit any volume usage based service plan that the provider is proposing or offering to the Federal Trade Commission (FTC) for approval. The FTC, in consultation with the FCC, was required to review such plans \"to ensure that such plans are fairly based on cost.\" Such plans were subject to agency review and public hearings. Plans determined by the FTC to impose \"rates, terms, and conditions that are unjust, unreasonable, or unreasonably discriminatory\" were to be declared unlawful. Violators were subject to injunctive relief requiring the suspension, termination, or revision of such plans and were subject to a fine of not more than $1 million."], "subsections": []}]}]}}
{"id": "98-35", "title": "Social Security: The Windfall Elimination Provision (WEP)", "released_date": "2019-05-14T00:00:00", "summary": ["The windfall elimination provision (WEP) is a modified benefit formula that reduces the Social Security benefits of certain retired or disabled workers who are also entitled to pension benefits based on earnings from jobs that were not covered by Social Security and thus not subject to the Social Security payroll tax. Its purpose is to remove an unintended advantage or \"windfall\" that these workers would otherwise receive as a result of the interaction between the regular Social Security benefit formula and the workers' relatively short careers in Social Security-covered employment. In December 2018, nearly 1.9 million people (or about 3% of all Social Security beneficiaries) were affected by the WEP."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Social Security provides insured workers and their eligible family members with a measure of protection against the loss of income due to the worker's retirement, disability, or death. The amount of the monthly benefit payable to workers and their family members is based on the worker's career-average earnings from jobs covered by Social Security (i.e., jobs in which the worker's earnings were subject to the Social Security payroll tax). The Social Security benefit formula is weighted to replace a greater share of career-average earnings for low-paid workers than for high-paid workers. This means that low-paid workers receive relatively high benefits in relation to their payroll tax contributions, although the dollar amount of their benefits is lower than that provided to high-paid workers. ", "The benefit formula, however, cannot distinguish between workers who have low career-average earnings because they worked for many years at low earnings in Social Security-covered employment and workers who appear to have low career-average earnings because they worked for many years in jobs not covered by Social Security. (Those years show up as zeros in their Social Security earnings records, which, when averaged, lower their career earnings from covered work.) Consequently, workers who split their careers between covered and noncovered employment\u2014even highly paid ones\u2014may also receive the advantage of the weighted formula. ", "The windfall elimination provision (WEP) is a modified benefit formula designed to remove the unintended advantage, or \"windfall,\" of the regular benefit formula for certain retired or disabled workers who spent less than full careers in covered employment and who are also entitled to pension benefits based on earnings from jobs not covered by Social Security. The reduction in initial benefits caused by the WEP is designed to place affected workers in approximately the same position they would have been in had all their earnings been covered by Social Security."], "subsections": []}, {"section_title": "Background on the Social Security Benefit Formula", "paragraphs": ["Workers qualify for Social Security benefits if they worked and paid Social Security payroll taxes for a sufficient amount of time in covered employment. Retired workers need at least 40 quarters of coverage (or about 10 years of covered work), whereas disabled workers generally need fewer quarters of coverage. Initial benefits are based on a worker's career-average earnings from jobs covered by Social Security. In computing the initial benefit amount, a worker's annual taxable earnings are indexed (i.e., adjusted) to average wage growth in the national economy. This is done to bring earlier years of earnings up to a comparable, current basis. Next, a summarized measure of a worker's career-average earnings is found by totaling the highest 35 years of covered earnings and then dividing by 35. After that, a monthly average, known as a v erage indexed monthly e arnings (AIME), is found by dividing the annual average by 12.", "Once the worker's AIME has been derived, it is then entered into the Social Security benefit formula to produce the worker's initial benefit amount. The benefit formula is progressive, replacing a greater share of career-average earnings for low-paid workers than for high-paid workers. The benefit formula applies three factors\u201490%, 32%, and 15%\u2014to three different levels, or brackets , of AIME. The result is known as the primary insurance amount (PIA) and is rounded down to the nearest 10 cents. The PIA is the worker's basic benefit before any adjustments are applied. The benefit formula applicable to a given worker is based on the individual's earliest eligibility year (ELY), that is, the year in which the worker first attains age 62, becomes disabled, or dies. For workers whose ELY is 2019, the PIA is determined as follows in Table 1 .", "The averaging provision in the benefit formula tends to cause workers with short careers in Social Security-covered employment to have low AIMEs, even if they had high earnings in their noncovered career, similar to people who worked for low earnings in covered employment throughout their careers. This is because years of zero covered earnings are entered as zeros into the formula that averages the worker's earnings history over 35 years. For example, a person with 10 years in Social Security-covered employment would have an AIME that reflects 25 years of zero earnings, even if that person worked for 25 years in a high-paying, noncovered career.", "Consequently, for a worker whose AIME is low because his or her career was split between covered and noncovered employment, the benefit formula replaces more of covered earnings at the 90% rate than if the worker had spent a full 35-year career in covered employment at the same earnings level. The higher replacement rate for workers who have split their careers between Social Security-covered and noncovered jobs is sometimes referred to as a \"windfall.\""], "subsections": []}, {"section_title": "How the Windfall Elimination Provision Works", "paragraphs": ["A different Social Security benefit formula, known informally as the windfall elimination provision , applies to certain workers who are entitled to Social Security benefits as well as to pension benefits from employment not covered by Social Security. Under the WEP, the 90% factor in the first bracket of the formula is reduced to as low as 40%. The effect is to lower the proportion of earnings in the first bracket that are converted to benefits. Table 2 illustrates how the regular benefit formula and the WEP work in 2019 for someone with a 40% factor.", "In this scenario, the monthly benefit is $463.00 lower under the WEP than under the regular benefit formula ($1,017.00 minus $554.00). Note that the WEP reduction is limited to the first bracket in the AIME formula (90% vs. 40%), while the 32% and 15% factors for the second and third brackets are unchanged. As a result, for AIME amounts that exceed the first formula threshold of $926, the WEP reduction remains a flat $463 per month. For example, if the worker had an AIME of $4,000 instead of $1,500, the WEP reduction would still be $463 per month. The WEP therefore causes a proportionally larger reduction in benefits for workers with lower AIMEs and monthly benefit amounts.", "A guarantee in the WEP ensures that the WEP reduction cannot exceed half of the noncovered pension based on the worker's noncovered work. This guarantee is designed to help protect workers with low pensions from noncovered work. The WEP does not apply to workers who have 30 or more years of substantial employment covered under Social Security, with an adjusted formula for workers with 21 to 29 years of substantial covered employment, as shown in Table 3 . ", "The WEP applies to benefits payable to retired or disabled workers who meet the criteria above and to their eligible dependents; however, it does not apply to benefits payable to survivors of deceased insured workers. Groups of workers likely to be affected by the WEP include certain state and local government employees who are covered by alternative pension plans through their employers and most permanent civilian federal employees hired before January 1, 1984, who are covered by the Civil Service Retirement System (CSRS). The WEP does not apply to", "federal employees performing service on January 1, 1984, to which coverage was extended on that date by reason of the Social Security Amendments of 1983 ( P.L. 98-21 ); employees of a nonprofit organization who were exempt from Social Security coverage on December 31, 1983, and who became covered for the first time on January 1, 1984, under P.L. 98-21 ; workers who attained age 62, became disabled, or were first eligible for a pension from noncovered employment before 1986; workers who receive foreign pension payments after 1994 that are based on a totalization agreement with the United States; workers whose only noncovered pension is based on earnings from noncovered domestic or foreign employment before 1957; and railroad workers whose only noncovered pension is based on earnings from employment covered by the Railroad Retirement Act."], "subsections": []}, {"section_title": "The Number of People Affected by the WEP", "paragraphs": ["According to the Social Security Administration (SSA), as of December 2018, nearly 1.9 million Social Security beneficiaries were affected by the WEP ( Table 4 ). The overwhelming majority of those affected (about 94%) were retired workers. Approximately 3% of all Social Security beneficiaries (including disabled workers and dependent beneficiaries) and 4% of all retired-worker beneficiaries were affected by the WEP in December 2018. Of retired workers affected by the WEP, approximately 58% were men ( Table 5 ).", "For data on the number and share of Social Security beneficiaries affected by the WEP, by state, see Table A-1 and Table A-2 in the Appendix , respectively."], "subsections": []}, {"section_title": "Legislative History and Rationale", "paragraphs": ["The WEP was enacted in 1983 as part of major amendments ( P.L. 98-21 ) designed to shore up the financing of the Social Security program. The 40% WEP formula factor was the result of a compromise between a House bill that would have substituted a 61% factor for the regular 90% factor and a Senate proposal that would have substituted a 32% factor.", "The purpose of the 1983 provision was to remove an unintended advantage that the regular Social Security benefit formula provided to certain retired or disabled worker-beneficiaries who were also entitled to pension benefits based on earnings from jobs not subject to the Social Security payroll tax. The regular formula was intended to help workers who spent their lifetimes in low-paying jobs, by providing them with a benefit that replaces a higher proportion of their career-average earnings than the benefit provided to workers with high career-average earnings. However, the formula does not differentiate between those who worked in low-paid jobs throughout their careers and other workers who appear to have been low paid because they worked many years in jobs not covered by Social Security. Under the old law, workers who were employed for only a portion of their careers in jobs covered by Social Security\u2014even highly paid ones\u2014also received the advantage of the weighted formula, because their few years of covered earnings were averaged over their entire working career to determine the average covered earnings on which their Social Security benefits were based. The WEP is intended to place affected workers in approximately the same position they would have been in had all their earnings been covered by Social Security."], "subsections": [{"section_title": "Arguments for the WEP", "paragraphs": ["Proponents of the measure say that it is a reasonable means to prevent payment of overgenerous and unintended benefits to certain workers who otherwise would profit from happenstance (i.e., the mechanics of the Social Security benefit formula). Furthermore, they maintain that the provision rarely causes hardship because by and large the people affected are reasonably well off because by definition they also receive pensions from noncovered work. The guarantee provision ensures that the reduction in Social Security benefits cannot exceed half of the pension from noncovered work, which protects people with small pensions from noncovered work. In addition, the impact of the WEP is reduced for workers who spend 21 to 29 years in Social Security-covered work and is eliminated for people who spend 30 years or more in Social Security-covered work."], "subsections": []}, {"section_title": "Arguments Against the WEP", "paragraphs": ["Some opponents believe the provision is unfair because it substantially reduces a benefit that workers may have included in their retirement plans. Others criticize how the provision works. They say the arbitrary 40% factor in the windfall elimination formula is an imprecise way to determine the actual windfall when applied to individual cases."], "subsections": []}]}, {"section_title": "The WEP's Impact on Low-Income Workers", "paragraphs": ["The impact of the WEP on low-income workers has been the subject of debate. Jeffrey Brown and Scott Weisbenner (hereinafter \"Brown and Weisbenner\") point out two reasons why the WEP can be regressive. First, because the WEP adjustment is confined to the first bracket of the benefit formula ($926 in 2019), it causes a proportionally larger reduction in benefits for workers with lower AIMEs and benefit amounts. Second, a high earner is more likely than a low earner to cross the \"substantial work\" threshold for accumulating years of covered earnings (in 2019 this threshold is $24,675 in Social Security-covered earnings); therefore, high earners are more likely to benefit from the provision that phases out the WEP for people with between 21 and 29 years of covered employment. ", "Brown and Weisbenner found that the WEP does reduce benefits disproportionately for lower-earning households. For some high-income households, applying the WEP to covered earnings even provides a higher replacement rate than if the WEP were applied proportionately to all earnings, covered and noncovered. Brown and Weisbenner found that the WEP can also lead to large changes in Social Security replacement rates based on small changes in covered earnings, particularly when a small increase in covered earnings carries a person over the threshold for an additional year of substantial covered earnings, leading to an adjustment in the WEP formula applied to the AIME. "], "subsections": []}, {"section_title": "Legislative Activity on the WEP in the 116th Congress", "paragraphs": ["H.R. 141 (Social Security Fairness Act of 2019) and S. 521 were introduced by Representative Rodney Davis on January 3, 2019, and Senator Sherrod Brown on February 14, 2019, respectively. The legislation would repeal the WEP and the government pension offset (GPO), which reduces the Social Security benefits paid to spouses and widow(er)s of insured workers if the spouse or widow(er) also receives a pension based on government employment not covered by Social Security. The elimination of the WEP and GPO would apply to benefits payable for months after December 2019.", "In 2016, SSA's Office of the Chief Actuary (OCACT) projected that repealing both the WEP and the GPO would reduce the long-range actuarial balance (i.e., increase the net long-term cost) of the combined Social Security trust funds by 0.13% of taxable payroll. The OCACT estimated that repealing only the WEP would reduce the long-range actuarial balance of the combined trust funds by 0.08% of taxable payroll.", "S. 710 (Social Security Fairness for Firefighters and Police Officers Act) was introduced by Senator Pat Toomey on March 7, 2019. The bill would exempt certain firefighters and police officers with five years of qualified service from the WEP and the GPO."], "subsections": []}, {"section_title": "Legislative Activity on the WEP in the 115th Congress", "paragraphs": ["H.R. 1205 and S. 915 , identical bills both titled the Social Security Fairness Act of 2017, would have repealed the WEP as well as the GPO. The elimination of the WEP and GPO would have applied to benefits payable for months after December 2017. ", "H.R. 6933 and S. 3526 , identical bills both titled the Equal Treatment of Public Servants Act of 2018, proposed to replace the WEP with a new proportional formula for individuals who would become eligible for OASDI benefits in 2025 or later. The proposal would have also provided for a rebate payment starting in 2020 for individuals affected by the current WEP. In October 2018, the OCACT projected that the enactment of this legislation would increase (improve) the long-range actuarial balance of the combined trust funds by 0.04% of taxable payroll. ", "Other bills in the 115 th Congress related to the WEP included H.R. 6962 , the Social Security Equity Act of 2018, and S. 3433 , the Social Security Fairness for Firefighters and Police Officers Act. H.R. 6962 would have reduced the WEP benefit reduction relative to current law, and S. 3433 would have exempted certain firefighters and police officers with five years of qualified service from the WEP and the GPO. "], "subsections": [{"section_title": "Appendix. WEP Affected Beneficiaries, by State", "paragraphs": [], "subsections": []}]}]}}
{"id": "R43491", "title": "Trade Promotion Authority (TPA): Frequently Asked Questions", "released_date": "2019-02-13T00:00:00", "summary": ["Legislation to reauthorize Trade Promotion Authority (TPA)\u2014sometimes called \"fast track\"\u2014the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (TPA-2015), was signed into law by former President Obama on June 29, 2015 (P.L. 114-26). If the President negotiates an international trade agreement that would reduce tariff or nontariff barriers to trade in ways that require changes in U.S. law, the United States can implement the agreement only through the enactment of legislation. If the trade agreement and the process of negotiating it meet certain requirements, TPA allows Congress to consider the required implementing bill under expedited procedures, pursuant to which the bill may come to the floor without action by the leadership, and can receive a guaranteed up-or-down vote with no amendments.", "Under TPA, an implementing bill may be eligible for expedited consideration if (1) the trade agreement was negotiated during the limited time period for which TPA is in effect; (2) the agreement advances a series of U.S. trade negotiating objectives specified in the TPA statute; (3) the negotiations were conducted in compliance with an extensive array of notification and consultation with Congress and other stakeholders; and (4) the President submits to Congress a draft implementing bill, which must meet specific content requirements, and a range of required supporting information. If, in any given case, Congress judges that these requirements have not been met, TPA provides mechanisms through which the eligibility of the implementing bill for expedited consideration may be withdrawn in one or both chambers.", "TPA is authorized through July 1, 2021. The United States has now renegotiated the North American Free Trade Agreement (NAFTA), now known as the United States-Mexico-Canada Agreement (USMCA) for which TPA could be used to consider implementing legislation. The issue of TPA reauthorization raises a number of questions regarding TPA, and this report addresses a number of those questions that are frequently asked, including the following:", "What is trade promotion authority? Is TPA necessary? What are trade negotiating objectives and how are they reflected in TPA statutes? What requirements does Congress impose on the President under TPA? Does TPA affect congressional authority on trade policy?", "For more information on TPA, see CRS Report RL33743, Trade Promotion Authority (TPA) and the Role of Congress in Trade Policy, by Ian F. Fergusson and CRS In Focus IF10038, Trade Promotion Authority (TPA), by Ian F. Fergusson."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background on Trade Promotion Authority (TPA)", "paragraphs": [], "subsections": [{"section_title": "What is Trade Promotion Authority?", "paragraphs": ["Trade promotion authority (TPA), sometimes called \"fast track,\" refers to the process Congress has made available to the President for limited periods to enable legislation to approve and implement certain international trade agreements to be considered under expedited legislative procedures. Certain trade agreements negotiated by the President, such as agreements that reduce barriers to trade in ways that require changes in U.S. law, must be approved and implemented by Congress through legislation. If the content of the implementing bill and the process of negotiating and concluding it meet certain requirements, TPA ensures time-limited congressional consideration and an up-or-down vote with no amendments. In order to be eligible for this expedited consideration, a trade agreement must be negotiated during the limited time period for which TPA is in effect, and must advance a series of U.S. trade negotiating objectives specified in the TPA statute. In addition, the negotiations must be conducted in conjunction with an extensive array of required notifications to and consultations with Congress and other public and private sector stakeholders. Finally, the President must submit to Congress a draft implementing bill, which must meet specific content requirements, and a range of supporting information. If, in any given case, Congress judges that these requirements have not been met, TPA provides mechanisms through which the implementing bill may be made ineligible for expedited consideration. More generally, TPA defines how Congress has chosen to exercise its constitutional authority over a particular aspect of trade policy, while affording the President added leverage and credibility to negotiate trade agreements by giving trading partners assurance that final agreements can receive consideration by Congress in a timely manner and without amendments. TPA may apply both when the President is seeking a new agreement as well as when he is seeking changes to an existing agreement."], "subsections": []}, {"section_title": "What is the Current Status of TPA?", "paragraphs": ["TPA can be used for legislation to implement trade agreements reached before July 1, 2021. Under TPA, it originally was effective until July 1, 2018, but it could be extended through July 1, 2021 provided the President asked for an extension\u2014as he did on March 20, 2018\u2014and Congress did not enact an extension disapproval resolution within 60 days of July 1, 2018. (See What is the effect of an \"Extension Disapproval Resolution\"? )"], "subsections": []}, {"section_title": "What was the legislative history of the current TPA?", "paragraphs": ["The Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (TPA-2015) ( H.R. 1890 ; S. 995 ) was introduced on April 16, 2015. Similar, though not identical, bills were ordered to be reported by the Senate Finance Committee on April 22, 2015, and by the House Ways and Means Committee the next day. The legislation, as reported by the Senate Finance Committee, was joined with legislation extending Trade Adjustment Assistance (TAA) into a substitute amendment to H.R. 1314 (an unrelated revenue measure), and that legislation was passed by the Senate on May 22 by a vote of 62-37. ", "In the House of Representatives, the measure was voted on under a procedure known as \"division of the question,\" which requires separate votes on each component, but approval of both to pass. Voting on June 12, TPA (Title I) passed by a vote of 219-211, but TAA (Title II) was defeated 126-302. A motion to reconsider that vote was entered by then-Speaker Boehner shortly after that vote. On June 18, the House again voted on TPA, in an amendment identical to the Senate version attached to H.R. 2146 , an unrelated House bill. This amendment did not include TAA. This legislation passed the House by a vote of 218-206 and by the Senate on June 24 by a vote of 60-38. It was signed by the President on June 29, 2015 ( P.L. 114-26 ). "], "subsections": []}, {"section_title": "What is Congress's responsibility for trade under the Constitution?", "paragraphs": ["The U.S. Constitution assigns express authority over the regulation of foreign trade to Congress. Article I, Section 8, gives Congress the power to \"regulate Commerce with foreign Nations\" and to \"lay and collect Taxes, Duties, Imposts, and Excises.\" In contrast, the Constitution assigns no specific responsibility for trade to the President. Under Article II, however, the President has exclusive authority to negotiate treaties (though his authority to enter into treaties is subject to the advice and consent of the Senate) and exercises broad authority over the conduct of the nation's foreign affairs. "], "subsections": []}, {"section_title": "What authority does Congress grant to the President by enacting TPA legislation?", "paragraphs": ["In a sense, TPA grants no new authority to the President. The President possesses inherent authority to negotiate with other countries to arrive at trade agreements. However, some agreements require congressional approval in order to take effect. For example, if a trade agreement requires changes in U.S. law, it could be implemented only through legislation enacted by Congress. (In some cases, as well, Congress has enacted legislation authorizing the President in advance to implement certain kinds of agreements on his own authority. An example is the historical reciprocal tariff agreement authority described under the next question.) TPA legislation provides expedited legislative procedures (also known as \"fast track\" procedures) to facilitate congressional action on legislation to approve and implement trade agreements of the kinds specified in the TPA statute. TPA legislation also establishes trade negotiating objectives and notification and consultation requirements described later. "], "subsections": []}, {"section_title": "Is TPA necessary?", "paragraphs": ["The President has the authority to negotiate international agreements, including free trade agreements (FTAs), but the Constitution gives Congress sole authority over the regulation of foreign commerce and tariffs. For 150 years, Congress exercised this authority over foreign trade by setting tariff rates directly. This policy changed with the Reciprocal Trade Agreements Act of 1934, in which Congress delegated temporary authority to the President to enter into (sign) reciprocal trade agreements that reduced tariffs within preapproved levels and implement them by proclamation without further congressional action. This authority was renewed a number of times until 1974.", "In the 1960s, as international trade expanded, nontariff barriers, such as antidumping measures, safety and certification requirements, and government procurement practices, became subjects of trade negotiations and agreements. Congress altered the authority delegated to the President to require enactment of an implementing bill to approve the agreement and authorize changes in U.S. law required to meet obligations of these new kinds. For trade agreements that contained such provisions, preapproval was no longer an option. Because an implementing bill faced potential amendment by Members of Congress that could alter a long-negotiated agreement, Congress adopted fast track authority in the Trade Act of 1974 ( P.L. 93-618 ) to ensure that the implementing bill could receive floor consideration and to provide a procedure under which it could not be amended. The act also established U.S. trade negotiating objectives and attempted to ensure executive branch notification of and consultation with Congress and the private sector. Fast track was renamed Trade Promotion Authority (TPA) in the Bipartisan Trade Promotion Authority Act of 2002 ( P.L. 107-210 ).", "Many observers point out that U.S. trade partners might be reluctant to negotiate with the United States, especially on politically sensitive issues, unless they are confident that the U.S. executive branch and Congress speak with one voice, that a trade agreement negotiated by the executive branch would receive timely legislative consideration, that it would not unravel by congressional amendments, and that the United States would implement the terms of the agreement reached. Others, however, have argued that because trade negotiations and agreements have become more complex and more comprehensive, bills to implement the agreements should be subject to amendment like other legislation. In practice, even though TPA is designed to ensure that Congress will act on implementing bills without amending them, it also affords Congress several procedural means to maintain its constitutional authority. "], "subsections": []}, {"section_title": "What requirements have been placed on the President under TPA?", "paragraphs": ["In general, under TPA, Congress has required the President to notify Congress and consult with Congress and with private sector stakeholders before, during, and upon completion of trade agreement negotiations, whether for a new agreement or changes to an existing agreement. TPA-2015 instituted additional requirements for consultation during implementation of agreements approved by Congress. Congress also has required the President to strive to adhere to general and specific principal trade negotiating objectives in any trade agreement negotiated under TPA. After signing the agreement, the President submits a draft implementing bill to Congress, along with the text of the trade agreement and a statement of administrative action required to implement it. (See sections below.)"], "subsections": []}, {"section_title": "Is there a deadline for the President to submit a draft implementing bill to Congress?", "paragraphs": ["No. If the United States enters into (signs) a trade agreement within a period for which TPA is provided, the President may submit the implementing bill to Congress a day on which both the House and the Senate are in session, regardless of whether TPA expired before that date. In practice, the submission of the implementing bill usually has been coordinated with leadership of the House and Senate."], "subsections": []}, {"section_title": "When was TPA/fast track first used?", "paragraphs": ["Trade promotion authority was first enacted on January 1, 1975, under the Trade Act of 1974. It was used to enact the Tokyo Round Agreements Act of 1979 ( P.L. 96-39 ), which implemented the 1974-1979 multilateral trade liberalization agreements reached under the Tokyo Round negotiations under the General Agreement on Tariffs and Trade (GATT), the predecessor to the World Trade Organization (WTO). Since that time it has been renewed four time times\u20141979, 1988, 2002, and 2015. In 1993, Congress provided a short-term extension to accommodate the completion of the GATT Uruguay Round negotiations."], "subsections": []}, {"section_title": "How many times has TPA/fast track been used?", "paragraphs": ["Since 1979, the authority has been used for 14 bilateral/regional free trade agreements (FTAs) and one additional set of multilateral trade liberalization agreements under the GATT (now the World Trade Organization [WTO])\u2014the Uruguay Round Agreements Act of 1994. One FTA\u2014the U.S.-Jordan FTA\u2014was negotiated and approved by Congress without TPA. That FTA was largely considered noncontroversial and applies to only a small portion of U.S. total trade."], "subsections": []}, {"section_title": "Do other countries have a TPA-type legislative mechanism?", "paragraphs": ["In some countries, the executive may possess authority to conclude trade agreements without legislative approval. In others, especially in parliamentary systems, the head of government is typically able to secure approval of any requisite legislation without amendment under regular legislative procedures. In addition, some countries prohibit amendments to trade agreement legislation and others treat trade agreements as treaties that are self-executing."], "subsections": []}, {"section_title": "Can TPA procedures be used for consideration of the renegotiated North American Free Trade Agreement (NAFTA)?", "paragraphs": ["Yes. TPA applies both to negotiations of new agreements as well as changes to existing agreements. On May 18, 2017, pursuant to TPA, the President sent Congress a 90-day notification of his intent to begin talks with Canada and Mexico to renegotiate and modernize NAFTA, allowing the first round of negotiations to begin on August 16, 2017. The U.S. Trade Representative (USTR) submitted detailed negotiating objectives 30 days prior to the start of negotiations on July 17. USTR received public comments and held public hearings in June 2017. ", "After a year of negotiations, USTR Lighthizer announced a preliminary agreement with Mexico on August 27, 2018. On August 31, President Trump gave Congress the required notice 90-day notice that he would sign a revised deal with Mexico. After further negotiations, Canada joined the pact and it was concluded on September 30, 2018. The three nations signed what is now known as the United States-Mexico-Canada Agreement (USMCA) on November 30, 2018. The Administration satisfied the requirement to provide Congress with a list of changes to U.S. law required to implement the agreement on January 29, 2019. However, the government shutdown delayed work on the International Trade Commission report on the economic effects of the agreement, and is now expected to be delivered to Congress by April 20, 2019."], "subsections": []}]}, {"section_title": "Trade Negotiating Objectives", "paragraphs": [], "subsections": [{"section_title": "What are U.S. trade negotiating objectives?", "paragraphs": ["Congress exercises its trade policy role, in part, by defining trade negotiating objectives in TPA legislation. The negotiating objectives are definitive statements of U.S. trade policy that Congress expects the Administration to honor, if the implementing legislation is to be considered under expedited rules. Since the original fast track authorization in the Trade Act of 1974, Congress has revised and expanded the negotiating objectives in succeeding TPA/fast track authorization statutes to reflect changing priorities and the evolving international trade environment. For example, since the last grant of TPA in 2002, new issues associated with state-owned enterprises, digital trade in goods and services, and localization policies have come to the forefront of U.S. trade policy and are included in TPA-2015 as principal negotiating objectives.", "Under TPA-2015, Congress established trade negotiating objectives in three categories: (1) overall objectives; (2) principal objectives; and (3)\u00a0capacity building and other priorities. These begin with broad goals that encapsulate the \"overall\" direction trade negotiations are expected to take, such as fostering U.S. and global economic growth and obtaining more favorable market access for U.S. products and services. Principal objectives are more specific and are considered the most politically critical set of objectives, the advancement of which is necessary for a U.S. trade agreement to receive expedited treatment under TPA. Capacity building objectives involve the provision of technical assistance to trading partners."], "subsections": []}, {"section_title": "Goods, Services, and Agriculture", "paragraphs": [], "subsections": [{"section_title": "What are some of the negotiating objectives for market access for goods?", "paragraphs": ["The market access negotiating objectives under TPA seek to reduce or to eliminate tariff and nontariff barriers and practices that decrease market access for U.S. products. One new provision in TPA-2015 considers the \"utilization of global chains\" in the goal of trade liberalization. It also calls for the use of sectoral tariff and nontariff barrier elimination agreements to achieve greater market access. Agriculture (see below) and textiles and apparel are addressed by separate negotiating objectives. For textiles and apparel, U.S. negotiators are to seek competitive export opportunities \"substantially equivalent to the opportunities afforded foreign exports in the U.S. markets and to achieve fairer and more open conditions of trade\" in the sector. Both the general market access provisions and the textile and apparel provisions in TPA-2015 are the same as those in the 2002 act. "], "subsections": []}, {"section_title": "Have U.S. negotiating objectives evolved on services trade?", "paragraphs": ["Services have become an increasingly important element of the U.S. economy, and the sector plays a prominent role in U.S. trade policy. The rising importance of services is reflected in their treatment under TPA statutes as a principal negotiating objective beginning with the 1984 Trade Act.", "Liberalization of trade in services was expressed in the 2002 Trade Act as a principal negotiating objective. It required that U.S. negotiators to make progress in reducing or eliminating barriers to trade in services, including regulations that deny nondiscriminatory treatment to U.S. services and inhibit the right of establishment (through foreign investment) to U.S. service providers. The content of the negotiating objective on services has not changed appreciably over the years. (Because foreign direct investment is an important mode of delivery of services, negotiating objectives on foreign investment [see below] pertain to services as well.) ", "TPA-2015 expands the principal negotiating objectives on services in the 2002 TPA by highlighting the role of services in global value chains and calling for the pursuit of liberalized trade in services through all means, including plurilateral trade agreements (presumably referring to the proposed Trade in Services Agreement [TISA]). "], "subsections": []}, {"section_title": "How did the negotiating objectives for agriculture differ from those in the 2002 TPA?", "paragraphs": ["TPA-2015 adds three new agriculture negotiating objectives to the 18 previously listed in the 2002 act. One lays out in greater detail what U.S. negotiators should achieve in negotiating robust trade rules on sanitary and phytosanitary (SPS) measures (i.e., those dealing with a country's food safety and animal and plant health laws and regulations). This increased emphasis aims to address the concerns expressed by U.S. agricultural exporters that other countries use SPS measures as disguised nontariff barriers, which undercut the market access openings that the United States negotiates in trade agreements. The second calls for trade negotiators to ensure transparency in how tariff-rate quotas (TRQs) are administered that may impede market access opportunities. The third seeks to eliminate and prevent the improper use of a country's system to protect or recognize geographical indications (GI). These are trademark-like terms used to protect the quality and reputation of distinctive agricultural products, wines, and spirits produced in a particular region of a country. This new objective is intended to counter in large part the European Union's efforts to include GI protection in its bilateral trade agreements for the names of its products that U.S. and other country exporters argue are generic in nature or commonly used across borders, such as parma ham or parmesan cheese."], "subsections": []}]}, {"section_title": "Foreign Investment", "paragraphs": [], "subsections": [{"section_title": "What are U.S. negotiating objectives on foreign investment?", "paragraphs": ["The United States is the largest source and destination of foreign direct investment in the world. Both the 2002 act and TPA-2015 include identical principal negotiating objectives on foreign investment. The principal negotiating objectives on foreign investment are designed ", "to reduce or eliminate artificial or trade distorting barriers to foreign investment, while ensuring that foreign investors in the United States are not accorded greater substantive rights with respect to investment protections than domestic investors in the United States, and to secure for investors important rights comparable to those that are available under the United States legal principles and practices.... ", "TPA-2015 seeks to accomplish these goals by including provisions establishing protections for U.S. foreign investment, such as nondiscriminatory treatment, free transfer of investment-related capital flows, reducing or eliminating local performance requirements, and including established standards for compensation for expropriation consistent with U.S. legal principles and practices. These provisions are also part of the bilateral investments treaties (BIT) that the United States negotiates with other countries. "], "subsections": []}, {"section_title": "To what extent does TPA address investor-state dispute settlement?", "paragraphs": ["Investor-state dispute settlement (ISDS) allows for private foreign investors to seek international arbitration against host governments to settle claims over alleged violations of foreign investment provisions in FTAs. While TPA does not mention a specific ISDS mechanism, it states that trade agreements should ", "provide meaningful procedures for resolving investment disputes; seek to improve mechanisms used to resolve disputes between an investor and a government through mechanisms to eliminate frivolous claims and to deter the filing of frivolous claims; provide procedures to ensure the efficient selection of arbitrators and the expeditious disposition of claims; provide procedures to enhance opportunities for public input into the formulation of government positions; and seek to provide for an appellate body or similar mechanism to provide coherence to interpretations of investment provisions in trade agreements."], "subsections": []}, {"section_title": "How have these provisions evolved over time?", "paragraphs": ["Two negotiating objectives relating to foreign investment were initially listed under the Omnibus Trade and Competitiveness Act of 1988 fast-track authority. The 2002 TPA and TPA-2015 list eight. In addition to TPA, U.S. investment negotiating objectives are shaped by the U.S. Model BIT, the template used to negotiate U.S. BITs and FTA investment chapters. The Model BIT has been revised periodically in an effort to balance investor protections and other policy interests. The 2004 Model BIT, for instance, narrowed the definitions of covered investment and minimum standard of treatment, and connected the definition of direct and indirect expropriation to \"property rights or property interests,\" reflecting the U.S. Constitution's Takings Clause and with possible implications for expropriation protection depending on foreign countries' definitions of property. It also clarified that only in rare cases do nondiscriminatory regulatory actions by governments to protect legitimate public welfare objectives result in indirect expropriation. In response to global economic changes, the 2012 Model BIT, among other things, clarified that its obligations apply to state-owned enterprises, as well as to the types of financial services that may fall under a prudential exception (such as to address balance of payments problems). Other examples of revisions to the Model BIT over time include more detailed provisions on ISDS, stronger aspirational language on environmental and labor standards, and enhanced transparency obligations. "], "subsections": []}, {"section_title": "Will foreign investors be afforded \"greater rights\" than U.S. investors under U.S. trade agreements?", "paragraphs": ["TPA-2015 states that no trade agreement is to lead to the granting of foreign investors in the United States greater substantive rights than are granted to U.S. investors in the United States. Some have argued, however, that the use of ISDS itself implies greater procedural rights."], "subsections": []}]}, {"section_title": "Trade Remedies", "paragraphs": [], "subsections": [{"section_title": "What are \"trade remedies?\"", "paragraphs": ["\"Trade remedies\" are statutory provisions that provide U.S. firms with the means to redress unfair trade practices by foreign actors, whether firms or governments. Examples are antidumping and countervailing duty laws. The \"escape clause\" or \"safeguard provision\" permits temporary restraints on import surges not considered to be unfairly traded that cause or threaten to cause serious injury, and thus may also be considered trade remedies."], "subsections": []}, {"section_title": "How does TPA address trade remedies?", "paragraphs": ["The principal trade negotiating objective concerning trade remedies in TPA-2015 and previous TPA legislation has been to \"preserve the ability of the United States to rigorously enforce its trade laws\" and to avoid concluding \"agreements that weaken the effectiveness of domestic and international disciplines on unfair trade.\" Trade remedies have usually been addressed in the context of multilateral WTO negotiations, though some FTAs have included commitments related to trade remedies. Significantly, NAFTA includes\u2014and the proposed USMCA maintains\u2014a controversial mechanism (\"Chapter 19\" now Chapter 10.D) that enables other parties to challenge (and potentially overturn) trade remedy decisions using special tribunals. The objective reflects the perception by some Members of Congress that other countries have sought to weaken U.S. trade remedy laws. TPA-2015 also maintains past notification provisions that require the President to notify Congress about any proposals advanced in a negotiation that involve potential changes to U.S. trade remedy laws 180 days before signing (entering into) a trade agreement. "], "subsections": []}]}, {"section_title": "Currency Issues", "paragraphs": [], "subsections": [{"section_title": "Have currency practices ever been addressed in a TPA authorization?", "paragraphs": ["The extent to which some countries may use the value of their currency to gain competitive market advantage is a source of concern for certain industries and some Members of Congress. In TPA-2002, the President was to seek to establish consultative mechanisms with trading partners to examine the trade consequences of significant and unanticipated currency movements and to scrutinize whether a foreign government has manipulated its currency to promote a competitive advantage in international trade. This provision was contained in the section on \"Promotion of Certain Priorities.\""], "subsections": []}, {"section_title": "How are currency issues addressed under TPA-2015?", "paragraphs": ["TPA-2015 elevates the topic of currency manipulation to a principal U.S. negotiating objective. The legislation, as introduced, stipulates that U.S. trade agreement partners \"avoid manipulating exchange rates in order to prevent effective balance of payments adjustment or to gain unfair competitive advantage.\" It does not specifically define currency manipulation to include or exclude central bank intervention in the domestic economy, and, hence, it does not differentiate among the ways a government can affect the value of its currency, such as currency market intervention or central bank activities to increase the money supply to stimulate the domestic economy. The language calls for multiple remedies, \"as appropriate,\" including \"cooperative mechanisms, enforceable rules, reporting, monitoring, transparency, or other means.\" ", "During floor consideration, the Senate considered and passed the so-called Hatch/Wyden amendment, which was adopted by the Senate by a vote of 70-29. This amendment sought to head off concerns that the language could be used to discourage central bank activities such as an increase in the money supply to stimulate the domestic economy, as well as to head off a currency amendment introduced by Senators Portman and Stabenow (defeated 48-51) that would have required the United States to negotiate \"strong and enforceable rules against exchange rate manipulation,\" enforceable through the dispute settlement system of a potential agreement.", "The Hatch/Wyden amendment modified the currency language of the bill as introduced, defining unfair currency practices as \"protracted large scale intervention in one direction in the exchange market and a persistently undervalued foreign exchange rate to gain an unfair competitive advantage in trade.\" The amended objective seeks to \"establish accountability\" through potential remedies such as \"enforceable rules, transparency, reporting, monitoring, cooperative mechanism, or other means to address exchange rate manipulation.\" The legislation contains the original negotiating objective, as well as the language of the Hatch/Wyden amendment."], "subsections": []}, {"section_title": "How have discussions on trade agreements that were considered after the expiration of TPA-2002 contributed to TPA-2015 objectives?", "paragraphs": ["On May 10, 2007, a bipartisan group of congressional leaders and the Bush Administration released a statement on agreed principles in five policy areas, which were subsequently reflected in four U.S. FTAs then being considered for ratification, with Colombia, Panama, Peru, and South Korea. The policy areas covered included worker rights, environment protection, intellectual property rights, government procurement, and foreign investment. This agreement has since been referred to as the \"May 10 th Agreement\" (for details, see box on \"The May 10 th Agreement,\" below). The extent to which these principles would be incorporated in negotiating objectives in any renewal of TPA authority, and reflected in future FTAs, was a source of debate among policymakers. "], "subsections": []}, {"section_title": "Are the provisions of the May 10th Agreement incorporated into TPA-2015?", "paragraphs": ["TPA-2015 incorporates the labor and environmental principles of the May 10 th agreement, including requirements that a negotiating party's labor and environmental statutes adhere to internationally recognized core labor standards and to obligations under common multilateral environmental agreements. TPA-2015 also includes the language of the May 10 th agreement on investment, \"ensuring that foreign investors in the United States are not granted greater substantive rights with respect to investment protections than U.S. investors in the United States.\" ", "TPA-2015 does not specifically refer to the language of the May 10 th agreement on patent protection for pharmaceuticals, which were designed to achieve greater access to medicine in developing country FTA partners. Instead, TPA-2015 language seeks to \"ensure that trade agreements foster innovation and access to medicine.\" "], "subsections": []}]}, {"section_title": "Intellectual Property Rights (IPR)", "paragraphs": [], "subsections": [{"section_title": "What are the key negotiating objectives concerning IPR?", "paragraphs": ["The United States has long supported the strengthening of intellectual property rights through trade agreements, and Congress has placed IPR protection as a principal negotiating objective since the 1988 grant of fast-track authority. The overall objectives on IPR under the 2002 TPA authority were the promotion of adequate and effective protection of IPR; market access for U.S. persons relying on IPR; and respect for the WTO Declaration on the Trade-related Aspects of Intellectual Property Rights (TRIPS) Agreement and Public Health. This last objective addressed concerns for the effect of patent protection for pharmaceuticals on innovation and access to medicine, especially in developing countries. ", "These objectives are largely reflected in the five objectives in TPA-2015. The promotion of adequate and effective protection of IPR through the negotiation of trade agreements that reflect a standard of protection similar to that found in U.S. law is a key provision. Other provisions include strong protection of new technologies; standards of protection that keep pace with technological developments; nondiscrimination in the treatment of IPR; and strong enforcement of IPR. TPA-2015 also seeks to ensure that agreements negotiated foster innovation and access to medicine."], "subsections": []}, {"section_title": "Does TPA-2015 contain new IPR negotiating objectives?", "paragraphs": ["A new objective in TPA-2015 seeks to negotiate the prevention and elimination of government involvement in violations of IPR such as cybertheft or piracy. The enhanced protection of trade secrets and proprietary information collected by governments in the furtherance of regulations is contained in the negotiating objective on regulatory coherence. "], "subsections": []}]}, {"section_title": "Labor and Environment", "paragraphs": [], "subsections": [{"section_title": "How do the negotiating objectives on labor under the 2002 TPA compare to those of TPA-2015?", "paragraphs": ["Both the 2002 TPA and TPA-2015 include several negotiating objectives on labor issues and worker rights. While similar, they also differ in some fundamental ways. For example, the 2002 authority states that trade agreements are to ensure that a trading partner does not fail effectively to enforce its own labor statutes. The TPA-2015 requires that the United States ensure not only that a trading partner enforces its own labor statutes but also that those statutes include internationally recognized core labor standards as defined in the bill to mean the \"core labor standards as stated in the ILO Declaration on Fundamental Principles and Rights to Work and its Follow-Up (1998).\" It also states that parties shall not waive or derogate statutes or regulations implementing internationally recognized core labor standards in a manner affecting trade or investment between the United States and the parties to an agreement. ", "In addition, the 2002 TPA allowed some discretion on the part of a trading partner government in enforcing its laws and stated that the government would be considered fulfilling its obligations if it exercised discretion, either through action or inaction, reasonably. TPA-2015, on the other hand, states that while the government retains discretion in implementing its labor statutes, the exercise of that discretion is not a reason not to comply with its obligations under the trade agreement. The labor\u2014and environmental\u2014provisions also contain language to strengthen the capacity of trading partners to adhere to labor and environmental standards, as well as a provision to reduce or eliminate policies that unduly threaten sustainable development. "], "subsections": []}, {"section_title": "How do the environmental negotiating objectives under TPA-2015 compare to those of the 2002 TPA?", "paragraphs": ["Like the labor negotiating objectives, TPA-2015 provides not only that a party enforce its own environmental standards as in the 2002 act, but also that those laws be consistent with seven internationally recognized multilateral environmental agreements (MEAs) and other provisions. It also contains the abovementioned prohibition of waiver or derogation from environmental law in matters of trade and investment. The environmental objective contains language allowing a reasonable exercise of prosecutorial discretion in enforcement and allocation of resources: language similar to, but seemingly more flexible than, that included in the labor provisions."], "subsections": []}, {"section_title": "Would the labor and environmental provisions negotiated be subject to the same dispute settlement provisions as other parts of the agreement?", "paragraphs": ["TPA-2015 commits negotiators \"to ensure that enforceable labor and environmental standards are subject to the same dispute settlement and remedies as other enforceable provisions under the agreement.\" Under the most recent U.S. trade agreements, this could mean the withdrawal of trade concessions until a dispute is resolved. By contrast, the 2002 TPA did not prescribe particular remedies\u2014only suggesting that remedies should be \"equivalent\"\u2014and trade agreements implemented using 2002 TPA provided separate remedies under dispute settlement, including the use of monetary penalties and technical assistance. "], "subsections": []}]}, {"section_title": "Regulatory Practices", "paragraphs": [], "subsections": [{"section_title": "How does TPA-2015 seek to address regulatory practices?", "paragraphs": ["The regulatory practices negotiation objective seeks to reduce or eliminate the use of governmental regulations (nontariff barriers)\u2014such as discriminatory certification requirements or nontransparent health and safety standards\u2014from impeding market access for U.S. goods, services, or investment. Like the 2002 TPA, it attempts to obtain commitments in trade agreements that proposed regulations are based on scientific principles, cost-benefit risk assessment, or other objective, nondiscriminatory standards. It also seeks more transparency and participation by affected parties in the development of regulations, consultative mechanisms to increase regulatory coherence, regulatory compatibility through harmonization or mutual recognition, and convergence in the standards-development process. A new provision in TPA-2015 seeks to limit governmental collection of undisclosed proprietary data\u2014\"except to satisfy a legitimate and justifiable regulatory interest\"\u2014and to protect those data against public disclosure. "], "subsections": []}, {"section_title": "Does TPA-2015 address drug pricing and reimbursement issues?", "paragraphs": ["Yes, the regulatory practices negotiating objective contains language applicable to a foreign country's drug pricing system. TPA-2015 seeks to eliminate government price controls and reference prices \"which deny full market access for United States products.\" TPA-2015 also seeks to ensure that regulatory regimes adhere to principles of transparency, procedural fairness, and nondiscrimination. "], "subsections": []}]}, {"section_title": "Dispute Settlement (DS)", "paragraphs": [], "subsections": [{"section_title": "What are the principal negotiating objectives on DS in FTAs?", "paragraphs": ["TPA legislation has sought to establish DS mechanisms to resolve disputes first through consultation, then by the withdrawal of benefits to encourage compliance with trade agreement commitments. TPA-2015 provisions aim to apply the principal DS negotiating objectives equally through equivalent access, procedures, and remedies. In addition, as noted above, TPA requires that labor and environmental disputes be subject to the same procedures and remedies as other disputes\u2014an obligation that, in practice, allows for full dispute settlement of labor and environmental disputes under the agreement. "], "subsections": []}, {"section_title": "How does TPA address DS at the WTO?", "paragraphs": ["TPA-2015, like its predecessors, also seeks to ensure that WTO DS panels and its appeals venue, the Appellate Body, \"apply the WTO Agreement as written, without adding to or diminishing rights and obligations under the agreement,\" and use a standard of review applicable to the Uruguay Round Agreement in question, \"including greater deference, where appropriate, to the fact finding and technical expertise of national investigating authorities.\" These provisions address the perception by some Members of Congress that the WTO dispute settlement bodies have interpreted WTO agreements in ways not foreseen or reflected in the agreement. "], "subsections": []}]}, {"section_title": "New Issues Addressed in TPA-2015", "paragraphs": [], "subsections": [{"section_title": "What new negotiating objectives are contained in TPA-2015?", "paragraphs": [], "subsections": [{"section_title": "Digital Trade in Goods and Services and Cross-Border Data Flows", "paragraphs": ["The internet not only has become a facilitator of international trade in goods and services given its borderless nature, but also is itself a source of trade in digital services, such as search engines or data storage. At the same time, however, digital trade and cross-border data flows increasingly have become the target of trade restricting measures, especially in emerging markets. The digital trade provisions update and expand upon the e-commerce provisions from the 2002 TPA that call for trade in digital goods and services to be treated no less favorably than corresponding physical goods or services in terms of applicability of trade agreements, the classification of a good or service, or regulation. Aside from ensuring that governments refrain from enacting measures impeding digital trade in goods and services, TPA-2015 extends that commitment to cross-border data flows, data processing, and data storage. It also calls for enhanced protection of trade secrets and proprietary information collected by governments in the furtherance of regulations. The promotion of strong IPR for technologies to facilitate digital trade is included in the IPR objectives, which extends the existing WTO moratorium on duties on electronic commerce transactions. "], "subsections": []}, {"section_title": "State-Owned Enterprises (SOEs)", "paragraphs": ["U.S. firms often face competition from state-owned or state-influenced firms. The TPA-2015 principal negotiating objective for SOEs seeks to ensure that SOEs are not favored with discriminatory purchases or subsidies and that competition is based on commercial considerations in order that U.S. firms may compete on a \"level playing field.\""], "subsections": []}, {"section_title": "Localization", "paragraphs": ["TPA-2015 adds a principal negotiating objective on \"localization,\" the practice by which firms are required to locate facilities, intellectual property, services, or assets in a country as a condition of doing business. While localization can be motivated by privacy and security interests, there are concerns that such measures can be trade distorting and may be used for protectionist purposes. TPA-2015 directs U.S. negotiators to prevent and eliminate such practices, as well as the practice of indigenous innovation, where a country seeks to develop local technology by the enforced use of domestic standards or local content. The digital trade objectives described above also include localization provisions concerning the free flow of data. Localization barriers are also addressed in the foreign investment chapter with provisions to restrict or eliminate performance requirements or forced technology transfers in the establishment or operation of U.S. investments abroad."], "subsections": []}, {"section_title": "Human Rights", "paragraphs": ["TPA-2015 contains a negotiating objective to ensure the implementation of trade commitments through promotion of good governance, transparency, and the rule of law with U.S. trade partners, \"which are important parts of the broader effort to create more open democratic societies and to promote respect for internationally recognized human rights.\" During floor consideration, the Senate adopted unopposed an amendment by Senator Lankford to add an overall negotiating objective to \"take into account conditions relating to religious freedom of any party to negotiations for a trade agreement with the United States.\""], "subsections": []}]}, {"section_title": "What New Negotiating Objectives Were Added as a Result of Senate Consideration?", "paragraphs": ["The Senate Finance Committee adopted three amendments to TPA-2015 that were incorporated into the legislation ultimately passed by Congress. These amendments", "Made the negotiating objective on human rights (see above) a principal negotiating objective. As with the other principal negotiating objectives, expedited procedures can be conditioned on progress toward achieving these objectives. Discouraged potential trading partners from adopting policies to limit trade or investment relations with Israel. This amendment was specific to the then-proposed Trans-Atlantic Trade and Investment Partnership. Prohibited expedited consideration of trade agreements with countries ranked in the most problematic category of countries for human trafficking concerns (Tier III) in the annual report by the Department of State on Trafficking in Persons. "], "subsections": []}, {"section_title": "What Changes Were Made as a Result of House Consideration?", "paragraphs": ["The House placed its amendments to TPA-2015 in the subsequently passed Trade Facilitation and Trade Enforcement Act of 2015 ( P.L. 114-125 ). These five amendments added the following:", "An overall negotiating objective \"to ensure that trade agreements do not require changes to the immigration laws or obligate the United States to grant access or expand access to visas issued under.... the Immigration and Nationality Act.\" An overall negotiating objective \"to ensure that trade agreements do not require changes to U.S. law or obligate the United States with respect to global warming or climate change, other than those fulfilling the other negotiating objectives\" in TPA. A principal negotiating objective to expand market access, reduce tariff and nontariff barriers, and eliminate subsidies that distort trade in fish, shellfish, and seafood products. An amendment to the Section 4(c) consultation provisions to allow for additional accreditation for staffers of the chair and ranking member of the committees of jurisdiction to serve as delegates to negotiations. An amendment to the human trafficking provision (above), which would allow the President to submit a waiver if the country has taken concrete steps to implement the principal recommendations of the United States to combat trafficking."], "subsections": []}]}]}, {"section_title": "Congressional Consultation and Advisory Requirements", "paragraphs": ["The consultative, notification, and reporting requirements of TPA are designed to achieve greater transparency in trade negotiations and to maintain the role of Congress in shaping trade policy. Congress has required the executive branch to consult with Congress prior to and during trade negotiations, as well as upon their completion and the signing of (entering into) a trade agreement. TPA/fast track statutes have required the USTR to meet and consult with the House Ways and Means Committee, the Senate Finance Committee, and other committees that have jurisdiction over laws possibly affected by trade negotiations. "], "subsections": [{"section_title": "How do the provisions on consultations in the TPA-2015 compare with previous statutes?", "paragraphs": ["While many of the provisions on consultation have some precedent in past grants of TPA in terms of advisory structure and transparency commitments, TPA-2015 contains some new provisions. These provisions require the following:", "The appointment of a Chief Transparency Officer at USTR. This official is required \"to consult with Congress on transparency policy, coordinate transparency in trade negotiations, engage and assist the public, and advise the U.S. Trade Representative on transparency policy.\" That USTR make available, prior to initiating FTA negotiations with a new country, \"a detailed and comprehensive summary of the specific objectives with respect to the negotiations, and a description of how the agreement, if successfully concluded, will further those objectives and benefit the United States,\" and periodically update the summary during negotiations. That the President publicly release the assessment by the U.S. International Trade Commission (ITC) of the potential impact of the trade agreement (see below), which had not been the case under the previous authority. That USTR consult with committees of jurisdiction after accepting a petition for review or taking enforcement actions in regard to potential violation of a trade agreement. The release of the negotiating text to the public 60 days prior to the agreement's being signed by the Administration. In addition, the final text of the implementing legislation and a draft Statement of Administrative Action must be submitted to Congress 30 days prior to its introduction."], "subsections": []}, {"section_title": "What are the Congressional Advisory Groups (CAGs) on Negotiations?", "paragraphs": ["TPA-2015 includes consultation requirements similar to those under the 2002 TPA and previous trade negotiating authorities. TPA-2015 provides for the establishment of separate Congressional Advisory Groups on Negotiations (CAGs) for each house\u2014a House Advisory Group on Negotiations (HAGON), chaired by the chairman of the Ways and Means Committee, and a Senate Advisory Group on Negotiations (SAGON), chaired by the chairman of the Finance Committee. In addition to the chairmen, each CAG includes the ranking member and three additional members of the respective committee, no more than two of whom could be from the same political party. Each CAG also includes the chair and ranking member, or their designees, of committees of the respective chamber with jurisdiction over laws that could possibly be affected by the trade agreements. The CAGs replaces the Congressional Oversight Group (COG), a bicameral group with similar membership created under the 2002 TPA that reportedly met infrequently. ", "For the CAGs, USTR is required to develop guidelines \"to facilitate the useful and timely exchange of information between them and the Trade Representative.\" These guidelines include fixed-timetable briefings and access by members of the CAG and their cleared staffers to pertinent negotiating documents. The President also is required to meet with either group upon the request of the majority of that group prior to launching negotiations or at any time during the negotiations. TPA-2015 mandates that the USTR draw up several sets of guidelines to enhance consultations with Congress, the private sector Advisory Committee for Trade Policy and Negotiations (see below), sectoral and industry advisory groups, and the public at large. USTR was directed to produce the guidelines, in consultation with the chairmen and ranking members of the Senate Finance Committee and the House Ways and Means Committee, no later than 120 days after TPA-2015 was enacted. The guidelines are to provide for timely briefings on the negotiating objectives for any specific trade agreement, the status of the negotiations, and any changes in laws that might be required to implement the trade agreement. In addition, TPA-2015 requires the USTR to consult on trade negotiations with any Member of Congress who requests to do so."], "subsections": []}, {"section_title": "Who are Designated Congressional Advisors?", "paragraphs": ["Designated Congressional Advisors (DCAs) are Members of Congress who are accredited as official advisers to U.S. delegations to trade negotiations. Under Section 161 of the Trade Act of 1974, as amended, the Speaker of the House selects five Members from the Ways and Means Committee (no more than three of whom are to be of the same political party), and the President Pro Tempore of the Senate selects five Members from the Senate Finance Committee (no more than three of whom can be of the same political party), as DCAs. In addition, the Speaker and the Senate President Pro Tempore may each designate as DCAs members of committees that would have jurisdiction over matters that are the subject of trade policy considerations or trade negotiations. Members of the CAG who are not already DCAs may also become DCA members. ", "Under TPA-2015, in addition to the above, any Member of the House may be designated by the Speaker as a DCA upon consultation with the chairman and ranking member of the House Ways and Means Committee and the chairman and ranking member of the committee from which the Member is selected. Similarly, any Member of the Senate may be designated a DCA upon consultation with the President Pro Tempore and the chairman and ranking member of the committee from which the Senator is selected. In addition, USTR is to accredit members of the HAGON and SAGON as official trade advisers to U.S. trade negotiation delegations by the USTR. "], "subsections": []}, {"section_title": "Which Members of Congress have access to draft trade agreements and related trade negotiating documents?", "paragraphs": ["Under the authority of Executive Order 13526, the USTR gives classified status to draft texts of trade agreements. According to USTR, nevertheless, any Member may examine draft trade agreements and related trade negotiating documents, although the 2002 TPA did not explicitly provide for this practice. TPA-2015 expressly requires that the USTR provide Members and their appropriate staff, as well as appropriate committee staff, access to pertinent documents relating to trade negotiations, including classified materials. "], "subsections": []}, {"section_title": "What are the requirements to consult with private sector stakeholders on trade policy?", "paragraphs": ["In order to ensure that private and public stakeholders have a voice in the formation of U.S. trade policy, Congress established a three-tier advisory committee system under Section 135 of the Trade Act of 1974, as amended. These committees advise the President on negotiations, agreements, and other matters of trade policy. At the top of the system is the 30-member Advisory Committee for Trade Policy and Negotiations (ACTPN) consisting of presidentially appointed representatives from local and state governments and representatives from the broad range of U.S. industries and labor groups. At the second tier are policy advisory committees\u2014Trade and Environment Policy, Intergovernmental Policy, Labor Policy, Agriculture Policy, and Africa. The third tier consists of 17 sector-specific committees\u2014one agricultural and 16 industrial sectors\u2014which provide technical advice. In addition to consultations with the advisory committees, the USTR solicits the views of stakeholders through Federal Register notices and hearings. The legislation requires the USTR to develop guidelines on consultations with the private sector advisory committees also no later than 120 days after the legislation's entry into effect.", "The TPA/fast track authorities under the Trade Act of 1974, and under authorities thereafter, have required the President to submit reports from the various advisory committees on their views regarding the potential impact of an agreement negotiated under the TPA before the agreement is submitted for congressional approval. For example, the 2002 TPA requires the President to submit to Congress the reports of the advisory committees on a trade agreement no later than 30 calendar days after notifying Congress of his intent to enter into (sign) the trade agreement. Those reports are also required under TPA-2015."], "subsections": []}, {"section_title": "What are the requirements to consult with the public on trade policy?", "paragraphs": ["TPA-2015 expands the existing statutory requirement for consultation with the public. For example, it requires the USTR to develop guidelines for enhanced consultation with the public and to provide these guidelines no later than 120 calendar days after the legislation's entry into effect. The guidelines committed USTR to provide detailed information regarding trade policy online, as well as to provide public stakeholder events for interested parties to meet with and share their views with negotiators, typically during negotiating rounds. The President also is required to make public other mandated reports on the impact of future trade agreements on the environment, employment, and labor rights in the United States (see below). These guidelines did not provide for the public release of negotiating positions or texts during the course of the negotiations."], "subsections": []}, {"section_title": "Do specific import sensitive industries have special negotiation and consultation requirements?", "paragraphs": ["Under the 2002 Trade Act and TPA-2015, import sensitive products in the agriculture, fishing, and textile sectors have special assessment and consultation requirements before initiating negotiations."], "subsections": []}]}, {"section_title": "Notification and Reporting Requirements", "paragraphs": ["Another tool Congress has employed under TPA to ensure transparency of the negotiating process is to require the President to notify Congress prior to launching trade negotiations and prior to entering into (signing) a trade agreement."], "subsections": [{"section_title": "Do congressional notification requirements change under TPA-2015?", "paragraphs": ["TPA 2015 maintains TPA-2002 requirements that the President", "notify Congress 90 calendar days prior to initiating negotiations on a reciprocal trade agreement with a foreign country; notify Congress 90 calendar days prior to entering into (signing) a trade agreement; notify Congress 60 days prior to entering into the agreement of any expected changes in U.S. law that would be required in order to be in compliance with the trade agreement; notify the House Ways and Means Committee and the Senate Finance Committee of any changes in U.S. trade remedy laws (discussed earlier) that would be required by the trade agreement 180 calendar days prior to entering into a trade agreement; and comply with special notification and reporting requirements for agriculture, fishing industry, and textiles and apparel. "], "subsections": []}, {"section_title": "What is the role of the U.S. International Trade Commission?", "paragraphs": ["The U.S. International Trade Commission (ITC) is an independent, quasijudicial federal agency with broad investigative responsibilities on matters related to international trade. One of its analytic functions is to examine and assess international trade agreements. Under TPA-2015, the President must submit the details of the proposed agreement to the ITC 90 calendar days prior to entering into (signing) the agreement. The ITC is required to produce an assessment of the potential economic impact of the agreement no later than 105 calendar days after the agreement is signed. Unlike TPA-2002, TPA-2015 requires that the reports be made public. "], "subsections": []}, {"section_title": "What are the various reporting requirements under TPA-2015?", "paragraphs": ["Several reporting requirements were established in past TPA legislation; TPA-2015 maintains similar requirements and establishes new ones. These include the following:", "Extension disapproval resolution (see below). TPA was extended to July 1, 2021 in 2018. The President was required to produce the following reports in support of that extension: The President must report to Congress on the status and progress of current negotiations, and why the extension is necessary to complete negotiations. The Advisory Committee on Trade Policy and Negotiations must report on the progress made in the negotiations and a statement of its views on whether the extension should be granted. The International Trade Commission (ITC) must report on the economic impact of all trade agreements negotiated during the current period TPA is in force. Report on U.S. trade remedy laws. The President must report on any proposals that could change U.S. trade remedy laws to the committees of jurisdiction (House Ways and Means Committee and the Senate Finance Committee). Must be submitted 180 days before an agreement is signed. Upon entering into an agreement, the following reports must be completed: Advisory Committee Reports. The Advisory Committee for Trade Policy and Negotiations and appropriate policy, sectoral, and functional committees must report on whether and to what extent the agreement would promote the economic interests of the United States, and the overall and principal negotiating objectives of TPA. It must be submitted 30 days after the President notifies Congress of his intention to sign an agreement. ITC Assessment. The ITC must report on the likely impact of the agreement on the economy as a whole and on specific economic sectors. The President must provide information to the ITC on the agreement as it exists no later than 90 days before an agreement is signed (entered into) to inform the assessment. The ITC must report to Congress within 105 days after the agreement is signed. This report is to be made public under TPA-2015. Reports to be submitted by the President to committees of jurisdiction in relation to each trade agreement Environmental review of the agreement and the content and operation of consultative mechanisms established pursuant to TPA. Employment Impact Reviews and Report. Reviews the impact of future trade agreement on U.S. employment and labor markets. Labor Rights. A \"meaningful\" labor rights report on the country or countries in the negotiations and a description of any provisions that would require changes to the labor laws and practices of the United States. Implementation and Enforcement. A plan for the implementation and enforcement of the agreement, including border personnel requirements, agency staffing requirements, customs infrastructure requirements, impact on state and local governments, and cost analyses. Report on Penalties. A report one year after the imposition of a penalty or remedy under the trade agreement on the effectiveness of the penalty or remedy applied in enforcing U.S. law, whether the penalty or remedy was effective in changing the behavior of the party, and whether it had any adverse impact on other parties or interests. Report on TPA. The ITC is to submit a report on the economic impact of all trade agreements implemented under TPA procedures since 1984 one year after enactment and, again, no later than five years thereafter."], "subsections": []}]}, {"section_title": "Expedited Procedures and the Congressional Role", "paragraphs": [], "subsections": [{"section_title": "Do the expedited legislative procedures differ under the proposed TPA-2015?", "paragraphs": ["TPA-2015 incorporates existing expedited procedures (\"trade authorities procedures\") prescribed in Section 151 of the Trade Act of 1974 for consideration of trade agreement implementing bills (see the text box). "], "subsections": []}, {"section_title": "What is the purpose of the expedited procedures for considering implementing bills?", "paragraphs": ["The expedited TPA procedures include three core elements: a mechanism to ensure timely floor consideration, limits on debate, and a prohibition on amendment. The guarantee of floor consideration is intended to ensure that Congress will have an opportunity to consider and vote on the implementing bill whether or not the committees of jurisdiction or the leadership favor the legislation. Especially in the Senate, the limitation on debate helps ensure that opponents cannot prevent a final vote on an implementation bill by filibustering. The prohibition on amendments is intended to ensure that Congress will vote on the implementing bill in the form in which it is presented to Congress. ", "In these ways, the expedited procedures help assure that Congress will act on an implementing bill, and that if the bill is enacted, its terms will implement the trade agreement that was negotiated. This arrangement helps to increase the confidence of U.S. negotiating partners that law enacted by the United States will implement the terms of the agreement, so that they will not be compelled to renegotiate it or give up on it. "], "subsections": []}, {"section_title": "Why do the expedited procedures for implementing bills prohibit amendments?", "paragraphs": ["As noted above, if Congress were to amend an implementing bill, the legislation ultimately enacted might fail to implement the terms of the agreement that had been agreed to. In addition, if either house were to amend the implementing bill, it would likely become necessary to resolve the differences between the House and Senate versions through a conference committee (or through amendments between the houses). Since there is no way to compel the House and Senate to reach an agreement on a single version of the legislation, this prospect would make it impossible to ensure that Congress could complete action on the implementing bill expeditiously or, possibly, at all."], "subsections": []}, {"section_title": "What provisions are to be included in a trade agreement implementing bill to make it eligible for expedited consideration?", "paragraphs": ["Because trade agreement implementing bills are eligible for expedited congressional consideration under TPA, Congress has imposed restrictions on what may be included in these bills. The 2002 TPA legislation required that the implementing bill consist only of provisions that approve the trade agreement and a statement of administrative action proposed to implement it, together with provisions \"necessary or appropriate\" to implement the agreement, \"repealing or amending existing laws or providing new statutory authority.\" ", "What constitutes \"necessary or appropriate\" has been the subject of debate, with some Members arguing that the terms should not be interpreted too loosely, while others may argue for a broader interpretation. TPA-2015 includes the same basic language as the 2002 authority, except it requires that, in addition to provisions approving the trade agreement and statement of administrative action, an implementing bill may include \" only such provisions as are strictly necessary or appropriate\" (italics added)."], "subsections": []}, {"section_title": "Along with the draft implementing bill, what other documents must the President submit to Congress for approval?", "paragraphs": ["Along with a draft implementing bill, the President submits to Congress a Statement of Administrative Action (SAA) and other supporting information. An SAA contains an authoritative expression of Administration views regarding the interpretation and application of the trade agreement for purposes of U.S. international obligations and domestic law. It describes significant administrative actions to be taken to implement the trade agreement. To support this statement, the President submits an explanation of how the implementing bill and administrative action will \"change or affect U.S. law.\"", "The President is also to submit with the draft implementing bill a statement explaining how the agreement makes progress in achieving the \"purposes, policies, priorities, and objectives\" of the TPA, whether it changes an agreement previously negotiated, and how it \"serves the interests of United States commerce,\" as well as how the implementing bill meets the requirement that its provisions altering existing law are \"strictly necessary or appropriate.\""], "subsections": []}, {"section_title": "Must Congress consider covered trade agreements under the expedited legislative procedures?", "paragraphs": ["Each renewal of TPA has provided means by which Congress can determine not to extend expedited consideration to certain implementing bills. In TPA-2015, these mechanisms include the following:", "The \"Extension Disapproval Resolution,\" through which Congress can deny a presidential request to extend TPA for additional years. The \"Procedural Disapproval Resolution,\" through which Congress can deny expedited consideration for a specified trade agreement. An additional procedure, under which Congress could find that an implementing bill would change U.S. trade remedy laws in ways inconsistent with negotiating objectives on that subject. A \"Consultation and Compliance Resolution,\" through which either chamber, by its own action, can deny the use of TPA procedures for consideration of a specified implementing bill in that chamber. Each house always retains its constitutional authority to override the statutory requirements of the TPA procedures and consider an implementing bill under its general rules or such other procedural conditions as it may determine. ", "The following paragraphs discuss how each of these mechanisms functions to enable Congress to limit the use of TPA, implications of each, and relations among them. "], "subsections": []}, {"section_title": "What is the effect of an \"Extension Disapproval Resolution\"?", "paragraphs": ["As already noted, TPA-2015 made expedited procedures available until July 1, 2018, and authorized the President to request that this period be extended through July 1, 2021. The President made a request to extend TPA on March 20, 2018, but the extension would have been denied if, before that date, either chamber adopted an \"extension disapproval resolution\" (EDR). Neither chamber did this, thus, TPA was extended until July 1, 2021. The 2002 renewal and other earlier TPA statutes contained similar provisions for an extension and EDR. ", "Like previous grants of TPA, TPA-2015 effectively places the use of the EDR in the control of the House Committee on Ways and Means and the Senate Committee on Finance. Although any Member of the respective house may introduce an EDR, such a resolution may be considered on the floor in each chamber only if the respective revenue committee (and, in the House, also the Committee on Rules) reports it. If reported, however, the measure can be considered under an expedited procedure of its own, known as the \"Section 152 procedure,\" which makes privileged a motion for consideration, limits debate, and prohibits amendment at any stage of the process."], "subsections": []}, {"section_title": "What is the effect of a \"Procedural Disapproval Resolution\"?", "paragraphs": ["Under TPA-2015, Congress may withdraw expedited legislative consideration from a particular implementing bill if it determines either (1) that the President has not adequately notified or consulted Congress on that agreement in the ways required by the act, or (2) that the agreement \"fails to make progress in achieving the purposes, policies, priorities, and objectives\" of the act. If both houses, within 60 days of each other, adopt a \"procedural disapproval resolution\" (PDR) on the same implementing bill, neither can use the expedited procedure to consider that implementing bill. In each chamber, the PDR is a simple resolution (H.Res. or S.Res.), requiring action only in the chamber of origin, so that no conference committee or other mechanism to resolve differences between the two chambers' measures is needed. Like an EDR, a PDR can be considered in each chamber under the expedited procedure of Section 152 (see previous paragraph), with a privileged motion for consideration, limited debate, and a prohibition on amendment. ", "This mechanism affords Congress a means to enforce the requirements that a trade agreement advance the negotiating objectives established in statute and that the specified consultations, which enable Congress to engage with the process of negotiation, will occur. If, in the judgment of both houses, these conditions are not met, then Congress can decide not to accord expedited consideration to the implementing bill. As with the EDR, however, TPA-2015 effectively places the use of the PDR in the control of the House Committee on Ways and Means and the Senate Committee on Finance. Any Member of the respective chamber may introduce the resolution, but it may be considered on the floor only if the respective revenue committee (and, in the House, also the Committee on Rules) reports it. In this way the revenue committees serve, in effect, as the agent of Congress in maintaining its legislative prerogatives. ", "With respect to a given trade agreement, moreover, the expedited procedure for considering a PDR may be used only for the first such resolution reported in each chamber. The effect of this limitation is that each chamber may attempt to withdraw expedited consideration from an implementing bill on a given trade agreement under this procedure only once. (Further implications of this limitation are noted in the later discussion on changes in trade remedy laws.) "], "subsections": []}, {"section_title": "What is a \"mock markup,\" and how may Congress use it to assert control over a trade agreement implementing bill?", "paragraphs": ["Although not embedded in statute, a \"mock markup\" has been a traditional, informal method for the House Ways and Means Committee and Senate Finance Committee to provide advice on the contents of the implementing bill before the President formally sends the draft bill to both houses, thus triggering the expedited procedures for the bill. Subsequent to the signing of the agreement, the committees generally conduct hearings on a draft implementing bill sent by the White House, followed by the advisory \"markup.\" If the versions produced by the House and Senate Committees have significant differences, the two panels might hold a \"mock conference.\" ", "This process is not legally binding, and it is at presidential discretion whether to accept the advice. The process is called a \"mock\" markup because the bill under consideration is only a draft, it is not actually reported to the House or Senate, and the action of the committees operates only as a signal of their preferences to the executive. Often, nevertheless, the implementing bill that the President later submits to Congress tracks the results of the mock markup. If the revenue committees are dissatisfied with the implementing bill as submitted, they may respond by asking Congress to deny expedited consideration through the use of a PDR or one of the other methods described next, including bringing the bill to the floor under the general rules rather than the statutory expedited procedures. "], "subsections": []}, {"section_title": "What may Congress do if an implementing bill contains provisions inconsistent with negotiating objectives on trade remedies, and with what effect?", "paragraphs": ["TPA-2015 retains a procedural mechanism from the 2002 authority, under which either house can adopt a simple resolution (H.Res. or S.Res.) finding that changes to U.S. trade remedy laws provided for in a trade agreement implementing bill submitted by the President are inconsistent with statutory negotiating objectives on that subject. Such action would respond to the report by the President to the revenue committees on this subject mentioned under \" Trade Remedies ,\" above. Like a PDR, such a resolution could be introduced by any Member, but could receive floor consideration only if reported by the respective revenue committee (and, in the House, also by the Committee on Rules). If the respective committees had not previously reported any other such resolution with respect to the same agreement, the resolution would be subject to consideration under the expedited procedure of Section 152 (see \" What is the effect of an \"Extension Disapproval Resolution\"? \"). ", "Unlike a PDR, however, TPA-2015 (like the 2002 authority) does not specify what effect the adoption of a such resolution, finding an implementing bill inconsistent with trade remedy objectives, would have on consideration of the implementing bill. As a result, it is not clear that adoption of a resolution of this kind would prevent either chamber from considering the implementing bill under its expedited procedure. Yet TPA-2015 (again like the 2002 authority) prescribes that if such a resolution has been reported in either chamber, then that chamber may not use the Section 152 expedited procedure to consider a PDR to deny expedited consideration to the same implementing bill. "], "subsections": []}, {"section_title": "How does TPA-2015 permit a single house to withdraw expedited consideration from a specific implementation bill?", "paragraphs": ["TPA-2015 incorporates a mechanism, not present in previous TPA statutes, that permits either house, by its own action, to make a given implementing bill ineligible for expedited consideration in that chamber. As with the PDR, the emphasis of this proposal is on its potential use to counter what the chamber may consider inadequate consultation by the executive branch with respect to a trade agreement. This mechanism provides for use of a \"Consultation and Compliance Resolution\" (CCR), which is a simple resolution of either chamber (S.Res. or H.Res.) asserting that the President had \"failed or refused to notify or consult\" as required by the act, and therefore that \"the trade authorities procedures ... shall not apply\" in that chamber to the implementing bill in question. ", "This form of action, however, contrasts with the use of the PDR, which has the effect of withdrawing expedited consideration in both chambers, but only if both agree to similar resolutions. Withdrawal of expedited consideration in only one chamber, nevertheless, would presumably suffice to prevent the effective operation of the expedited procedure as a whole, for the acting chamber might then either decline to consider the implementing bill at all, or might never bring consideration to a close and proceed to a vote, or might amend the bill, in which case a conference committee or other process of resolving differences between the two houses might become necessary, and might never be concluded. ", "TPA-2015 provides separate procedures for a CCR in each chamber, and does not provide for expedited consideration in either. In the Senate, if the Committee on Finance \"meets on whether to report an implementing bill,\" but does not report it favorably, it must then, instead, report a CCR. The Senate is not required to consider this resolution, but if a motion is offered to proceed to its consideration, it would normally be debatable, and could be filibustered, in which case a motion for cloture could be offered in order to limit consideration. If this motion does not receive the 60 votes necessary for adoption, the resolution is returned to committee, thereby preserving the eligibility of the implementing bill for expedited consideration. In order for the Senate to withdraw expedited consideration from an implementing bill under this procedure, accordingly, the resolution would have to secure the support of 60 Senators for cloture (unless opponents permitted the motion to consider the resolution, and then the resolution itself, to come to a vote without cloture). In addition, a cloture vote does not occur until two days after the cloture motion is offered, a matter under cloture may be considered for 30 additional hours after the cloture vote, and if the Senate agrees to the motion to proceed, the same conditions apply to consideration of the measure itself. As a result, adoption of a CCR in the Senate might require Senators to be willing to spend as much as two days getting to a cloture vote, plus 30 hours consideration, plus another two days until a cloture vote on the resolution itself, plus a further 30 hours consideration before a final vote on the resolution. ", "In the House, the CCR process is triggered if the Committee on Ways and Means reports an implementing bill \"with other than a favorable recommendation.\" If, on the day after the committee files such a report, a Member of the House submits a CCR, the committee must consider one such resolution within the next four days of session and report it within six days of session or be discharged from its consideration. The act does not specify how such a resolution would then reach the floor or under what terms it would be considered. Normally, a resolution affecting the order of business (often called a \"special rule\") would be considered by the Committee on Rules and reported as privileged, which means the committee could call it up by motion. In the past, when the House wished to withdraw expedited consideration from an implementing bill, it has used such resolutions reported by the Committee on Rules, as described below."], "subsections": []}, {"section_title": "Does Congress have means of overriding the TPA procedures in addition to those provided by TPA statutes?", "paragraphs": ["As the TPA statutes acknowledge, the expedited procedures for which they provide operate as procedural rules of each house, and therefore each house retains full authority, under the Constitution, to change or override them at any point. Under this authority, either house could choose not to consider an implementing bill under the expedited procedure, but instead under its general rules, which might, among other things, permit amendments. ", "In practice, the House has usually considered implementing bills not under the statutory expedited procedure, but pursuant to special rules reported from the Committee on Rules. These special rules have normally retained the statutory prohibition against amendment (thereby duplicating the conditions under which the House usually considers any revenue bill). Such special rules have usually also barred a minority motion to recommit. However, the House could adopt a special rule permitting amendments to an implementation bill, and it has also adopted a resolution prohibiting consideration of an implementing bill for a specified trade agreement.", "The Senate normally considers implementing bills under the statutory expedited procedure, because supporters thereby avoid the possible need, in that chamber, to obtain a super-majority vote for cloture in order to limit debate. By unanimous consent, nevertheless, the Senate could agree to override any or all of the TPA procedures, including those that prohibit amendments to an implementing bill."], "subsections": []}, {"section_title": "Can Congress disapprove the President's launching trade negotiations with a trading partner?", "paragraphs": ["Congress does not have the constitutional authority to prevent the President from entering into negotiations with a foreign government. Under the Trade and Tariff Act of 1984 ( P.L. 98-573 ) and the Omnibus Trade and Competitiveness Act of 1988 ( P.L. 100-418 ), however, a bill to implement a trade agreement could have been denied expedited consideration if, within a 60-day period after the President notified the House Ways and Means Committee and the Senate Finance Committee of his intention to begin negotiations, either committee voted to disapprove the negotiation. This provision was not included either in the 2002 statute or TPA-2015."], "subsections": []}, {"section_title": "Does TPA constrain Congress's exercise of its constitutional authority on trade policy?", "paragraphs": ["Even though the TPA procedures are designed to ensure that Congress will act on implementing bills, and will do so without amending them, TPA legislation affords Congress several procedural means to maintain arguably tight reins on the executive branch's exercise of the delegated trade authority. In the provisions of successive TPA statutes, Congress has developed the various mechanisms just discussed for preserving its authority in relation to the content of implementing bills, even when those bills are eligible for consideration under the expedited procedure. In practice, these mechanisms enable the House Committee on Ways and Means and the Senate Committee on Finance (the \"revenue committees\") to operate as agents of Congress as a whole in protecting congressional prerogatives.", "TPA statutes include extensive, specific negotiating objectives to be pursued in covered trade agreements (see above). They also include extensive requirements for Congress to be notified of any trade agreement negotiations and consulted during their course. These requirements enable the revenue committees to monitor the negotiations actively and work to ensure that any trade agreements reached will be acceptable (see other sections above).", "The procedural mechanisms discussed in the preceding paragraphs, including the extension disapproval resolution, the procedural disapproval resolution, and the mock markup, enable Congress, and the two revenue committees in particular, to exercise a degree of control over the content and consideration of covered trade agreements that is comparable, in many respects, to that which these panels generally exercise over other legislation within their jurisdiction. Inasmuch as an implementing bill (if considered under the statutory expedited procedure) normally cannot be amended, however, the revenue committees exercise control in these cases instead through actions to shape the content of the implementing bill before it is introduced. ", "In addition to these TPA-specific procedures, finally, each house retains the ability to consider implementing bills under its general rules rather than under the expedited procedure."], "subsections": []}]}, {"section_title": "National Sovereignty and Trade Agreements", "paragraphs": [], "subsections": [{"section_title": "Can a trade agreement force the United States to change its laws?", "paragraphs": ["Neither the 2002 TPA authority nor previous TPA/fast track authorities contained provisions addressing the issue of national sovereignty. TPA-2015 states that no provision of any trade agreement entered into under the TPA inconsistent with any law of the United States, of any state, or any locality of the United States could have any effect. Nor could any provision of a trade agreement prevent the government of the United States, of any state, or any U.S. locality from amending its laws. This provision essentially provides that, for domestic purposes, any trade agreement adopted under the TPA authority is not self-executing. Therefore, any potential agreement adopted through the TPA procedures would not displace any federal, state, or local law without further action being taken by the appropriate legislature. "], "subsections": []}, {"section_title": "Would legislation implementing the terms of a trade agreement submitted under the TPA supersede existing law?", "paragraphs": ["If the implementing legislation amends or changes U.S. law, then it would supersede existing U.S. law. However, under previous grants of TPA, changes to U.S. law made by an implementing bill are to be \"necessary or appropriate\" to implement the commitments under the trade agreement. TPA-2015 changes this provision to \"strictly necessary or appropriate.\" "], "subsections": []}, {"section_title": "What happens if a U.S. law violates a U.S. trade agreement?", "paragraphs": ["In general, if the United States does adopt an agreement with foreign countries, it would be bound by international law under the agreement. If a federal, state, or local law is found to be in violation of the free trade agreement, then the United States could be subject to removal of some benefits under the agreement, such as an increase in tariffs on its products, through a potential dispute resolution with a challenging country. The federal, state, or local government potentially would have to amend the law that is inconsistent with the trade agreement in order for the United States to avoid removal of benefits under the international agreement, but is not required to do so."], "subsections": []}]}]}}
{"id": "R44618", "title": "Post-Heller Second Amendment Jurisprudence", "released_date": "2019-03-25T00:00:00", "summary": ["The Second Amendment states that \"[a] well-regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear arms, shall not be infringed.\" Before the Supreme Court's 2008 opinion in District of Columbia v. Heller, the Second Amendment had received little Supreme Court attention and had been largely interpreted, at least by the lower federal courts, to be intertwined with military or militia use. Still, there had been ample debate in the lower federal courts and political discussion over whether the Second Amendment provides an individual right to keep and bear arms, versus a collective right belonging to the states to maintain militias. Pre-Heller, the vast majority of lower federal courts had embraced the collective right theory.", "In Heller, though, the Supreme Court adopted the individual right theory, holding that the Second Amendment protects an individual right for law-abiding citizens to keep and bear arms for lawful purposes including, most notably, self-defense in the home. Two years later in McDonald v. City of Chicago, the Court held that the Second Amendment applies to the states via selective incorporation through the Fourteenth Amendment.", "After Heller and McDonald, numerous challenges were brought on Second Amendment grounds to various federal, state, and local firearm laws and regulations. Because Heller neither purported to define the full scope of the Second Amendment, nor suggested a standard of review for evaluating Second Amendment claims, the lower federal courts have been tasked with doing so in the Second Amendment challenges brought before them. These challenges include allegations that provisions of the Gun Control Act of 1968, as amended, as well as various state and local firearm laws (e.g., \"assault weapon\" bans, concealed carry regulations, firearm licensing schemes) are unconstitutional. The analyses in these cases may provide useful guideposts for Congress should it seek to enact further firearm regulations.", "Generally, the courts have adopted a two-step framework for evaluating Second Amendment challenges. First, courts ask whether the regulated person, firearm, or place comes within the scope of the Second Amendment's protections. If not, the law does not implicate the Second Amendment. But if so, the court next employs the appropriate level of judicial scrutiny\u2014rational basis, intermediate, or strict scrutiny\u2014to assess whether the law passes constitutional muster. In deciding what level of scrutiny is warranted, courts generally ask whether the challenged law burdens core Second Amendment conduct, like the ability to use a firearm for self-defense in the home. If a law substantially burdens core Second Amendment activity, courts typically will apply strict scrutiny. Otherwise, courts generally will apply intermediate scrutiny. Most challenged laws have been reviewed for intermediate scrutiny, where a court asks whether a law is substantially related to an important governmental interest. And typically, the viability of a firearm restriction will depend on what evidence the government puts forth to justify the law. Yet sometimes courts take a different or modified approach from that described above and ask whether a challenged regulation falls within a category deemed \"presumptively lawful\" by Heller. If the law falls within such a category, a court does not need to apply a particular level of scrutiny in reviewing the restriction because the law does not facially violate the Second Amendment.", "In early 2019, the Supreme Court granted certiorari in New York State Rifle & Pistol Association, Inc. v. City of New York. The Court is set to review a portion of New York City's firearm licensing scheme that the U.S. Court of Appeals for the Second Circuit upheld as valid. In doing so, the Court may clarify the scope of the right protected in the Second Amendment. Importantly, to make this substantive ruling, the Court likely will have to answer a question that it has eluded since Heller: Under what framework should Second Amendment challenges be evaluated?"], "reports": {"section_title": "", "paragraphs": ["T he Second Amendment states that \"[a] well-regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear arms, shall not be infringed.\" Before the Supreme Court's 2008 opinion in District of Columbia v. Heller, the right generally had been understood by federal courts to be intertwined with military or militia use. That understanding was formed with little Supreme Court guidance: Before Heller, the Supreme Court had barely opined on the scope of the Second Amendment, making its last substantive remarks on the right in its 1939 ruling in United States v. Miller. In Miller, the Supreme Court evaluated a criminal law banning possession of a certain type of firearm, asking whether it bore a \"reasonable relationship to the preservation or efficiency of a well regulated militia\" such that it garnered Second Amendment protection. This passage spawned a longstanding debate over whether the Second Amendment provides an individual right to keep and bear arms versus a collective right belonging to the states to maintain militias, with the vast majority of the courts embracing the collective right theory. Indeed, before the Heller litigation began only one circuit court\u2014the Fifth Circuit in United States v. Emerson \u2014had concluded that the Second Amendment protects an individual's right to keep and bear arms. ", "The Supreme Court's landmark 5-4 decision in Heller upturned the earlier majority view with its holding that the Second Amendment guarantees an individual right to possess firearms for historically lawful purposes, such as self-defense in the home. But in Heller the Court did not define the full scope of that right, leaving lower courts to fill in the gaps. Indeed, the Court has said little on the matter, most notably by holding that the Second Amendment right is incorporated through the Fourteenth Amendment to apply to the states in McDonald v. City of Chicago . Beyond McDonald, the Court has largely declined to grant certiorari to the numerous Second Amendment cases percolating in the lower federal courts with one exception: In Caetano v. Massachusetts, the Supreme Court\u2014in a single, two page ruling\u2014granted a petition for certiorari and issued an unsigned, per curiam opinion vacating the decision of the Massachusetts Supreme Court that had upheld a state law prohibiting the possession of stun guns. But the Court's opinion did little to clarify Second Amendment jurisprudence, principally noting that the state court opinion directly conflicted with Heller without discussing the matter in further detail. During the October 2019 term, however, the Supreme Court will review a Second Amendment challenge to a New York City firearm licensing provision in New York State Rifle & Pistol Association, Inc. v. City of New York , giving the Court another opportunity to elaborate on the scope of the individual right to keep and bear arms. ", "Accordingly, this report evaluates how the lower federal courts have interpreted Heller and the Second Amendment through challenges to various federal, state, and local firearm laws. In particular, this report focuses on federal appellate decisions, including what categories of persons, firearms, and places may be subject to government firearm regulation, and how federal, state, and local governments may regulate those categories. These appellate decisions include challenges to provisions of the Gun Control Act \u2014the primary federal law regulating the transfer and possession of firearms in interstate commerce\u2014as well as state and local laws that provide further restrictions on the possession and sale of firearms, including assault weapon bans, concealed carry restrictions, and firearm licensing schemes, among others. This report is not intended to provide a comprehensive analysis of every Second Amendment issue brought in federal court since Heller, but highlights notable challenges to firearm laws that may be of interest to Congress."], "subsections": [{"section_title": "District of Columbia v. Heller", "paragraphs": ["Before Heller, the District of Columbia had a web of regulations governing the ownership and use of firearms that, taken together, amounted to a near-total ban on handguns in the District. One law generally barred the registration of most handguns. Another law required persons with registered firearms to keep them \"unloaded and either disassembled or secured by a trigger lock, gun safe, locked box, or other secure device.\" And a third law prohibited persons within the District of Columbia from carrying (openly or concealed, in the home or elsewhere) an unlicensed firearm. In 2003, six D.C. residents challenged those three measures as unconstitutional under the Second Amendment, arguing that the Constitution provides an individual right to bear arms. In particular, the residents contended that the Second Amendment provides individuals a right to possess \"functional firearms\" that are \"readily accessible to be used . . . for self-defense in the home.\""], "subsections": [{"section_title": "Parker v. District of Columbia: Heller in the District Court", "paragraphs": ["In Parker v. District of Columbia, the district court was tasked with gleaning the meaning of the right provided by the Second Amendment. The last word from the Supreme Court on this right was in its 1939 ruling, United States v. Miller. Miller involved a challenge to a federal indictment for unlawfully transporting in interstate commerce an unregistered double barrel 12-gauge shotgun with a barrel less than 18 inches in length, as had been prohibited by the National Firearms Act of 1934. A district court had dismissed the indictment after concluding that the challenged criminal provision infringed the defendant's Second Amendment rights. The Supreme Court, on direct appeal, reversed that ruling:", "In the absence of any evidence tending to show that possession or use of a 'shotgun having a barrel of less than eighteen inches in length' at this time has some reasonable relationship to the preservation or efficiency of a well regulated militia, we cannot say that the Second Amendment guarantees the right to keep and bear such an instrument.", "In reaching that conclusion, the Court emphasized that the Second Amendment must be interpreted in the context in which it was enacted: \"[w]ith [the] obvious purpose to assure the continuation and render possible the effectiveness of\" Congress's power to \"provide for organizing, arming, and disciplining, the Militia.\" ", "Relying on the Supreme Court's guidance in Miller, the district court in Parker rejected the plaintiffs' contention that the Second Amendment provides an individual right to bear arms unrelated to militia use. The court additionally noted that this conclusion matched those of every other federal circuit court to have considered the issue except for one recent Fifth Circuit decision. Accordingly, the district court dismissed the lawsuit for failing to state a claim for relief under the Second Amendment, reasoning that it \"would be in error to overlook sixty-five years of unchanged Supreme Court precedent and the deluge of circuit case law rejecting an individual right to bear arms not in conjunction with service in the Militia.\""], "subsections": []}, {"section_title": "Parker v. District of Columbia: Heller in the D.C. Circuit Court of Appeals", "paragraphs": ["The D.C.-resident plaintiffs appealed to the D.C. Circuit, and a divided 3-judge panel reversed the district court's ruling. The crux of the debate at the circuit court centered on whether the court should adopt the \"collective right\" versus \"individual right\" theory of the Second Amendment. Framed this way, the D.C. Circuit, unlike the district court, perceived the issue before it as one of first impression, opining that Miller actually addressed the kinds of \"arms\" that the Second Amendment protects. ", "Under the collective right theory advanced by the District of Columbia (District), the Second Amendment protects only the right of states to maintain and arm their militias. Accordingly, the District argued that the Second Amendment's prefatory clause\u2014\"[a] well regulated Militia, being necessary to the security of a free State\"\u2014announces the Amendment's sole purpose: to protect state militias from federal intrusion, and limiting the right to keep and bear arms to military uses. Under the individual right theory, advanced by the plaintiffs, the Second Amendment guarantees individuals a right to keep and bear arms for personal use. Pointing to a different part of the Amendment's text, the plaintiffs argued that its operative clause\u2014\" the right of the people to keep and bear Arms shall not be infringed\"\u2014signals an individual right.", "The D.C. Circuit rejected the collective right theory advanced by the District, reasoning that Supreme Court precedent interpreting the meaning of \"the people,\" as used in the Bill of Rights, required the court to conclude that \"the people,\" as used in the Second Amendment, refers to individual persons, and thus the Amendment protects an individual right. The court additionally noted that, because founding era-like militias no longer exist, the argument put forth by the District would render the Second Amendment a \"dead letter.\" Having established that the Second Amendment protects an individual right to keep and bear arms, the court next addressed the scope of that right by examining the lawful, private purposes for which founding-era persons owned and used firearms. The court concluded that the right encompasses firearm uses pre-existing the Constitution, such as hunting and self-defense against private misconduct or a tyrannical government. And though the right could be subject to \"reasonable restrictions,\" the court noted that the Constitution would not tolerate laws, like the District's, that amount to a \"virtual prohibition\" on handgun possession.", "One judge dissented on the ground that the District is not a state within the meaning of its use in the Second Amendment, and thus its protections\u2014whatever they may be\u2014do not reach it."], "subsections": []}, {"section_title": "District of Columbia v. Heller: Supreme Court's Ruling", "paragraphs": ["The challenge made its way to the Supreme Court, which, in a 5-4 decision authored by Justice Scalia, affirmed the D.C. Circuit's conclusion that the Second Amendment provides an individual right to keep and bear arms for lawful purposes. The majority arrived at this conclusion after undertaking an extensive analysis of the founding-era meaning of the words in the Second Amendment's prefatory and operative clauses. Applying that interpretation to the challenged D.C. firearm laws, the Court concluded that the District's functional ban on handgun possession in the home and the requirement that lawful firearms in the home be rendered inoperable were unconstitutional."], "subsections": [{"section_title": "Majority Opinion", "paragraphs": [], "subsections": [{"section_title": "Textual Analysis", "paragraphs": ["The majority analyzed the Second Amendment's two clauses and concluded that the prefatory clause, indeed, announces the Amendment's purpose. And though there must be some link between the stated purpose and the command in the operative clause, the Court concluded that \"the prefatory clause does not limit . . . the scope of the operative clause.\" Accordingly, the Court assessed the meaning of the Second Amendment's two clauses. ", "Beginning with the operative clause, the Supreme Court first concluded that the phrase the \"right of the people,\" as used in the Bill of Rights, universally communicates an individual right, and thus the Second Amendment protects a right that is \"exercised individually and belongs to all Americans.\" Next, the Court turned to the meaning of \"to keep and bear arms.\" \"Arms,\" the Court said, has the same meaning now as it did during the eighteenth century: \"any thing that a man wears for his defence, or takes into his hands, or use[s] in wrath to cast at or strike another,\" including weapons not specifically designed for military use. The Court then turned to the full phrase \"keep and bear arms.\" To \"keep arms,\" as understood during the founding period, the Court said, was a \"common way of referring to possessing arms, for militiamen and everyone else. \" And \"bearing arms,\" during the founding period as well as currently, the Court said, means to carry weapons for the purpose of confrontation; but even so, the Court added, the phrase does not \"connote[] participation in a structured military organization.\" Taken together, the Court concluded that the Second Amendment \"guarantee[s] the individual right to possess and carry weapons in case of confrontation.\" The Court added that its textual analysis was supported by the Amendment's historical background, which was relevant to its analysis because, the Court reasoned, the Second Amendment was \"widely understood\" to have codified a pre-existing individual right to keep and bear arms.", "Turning back to the prefatory clause, the Supreme Court majority concluded that the term \"well-regulated militia\" does not refer to state or congressionally regulated military forces as described in the Constitution's Militia Clause; rather, the Second Amendment's usage refers to all \"able-bodied men\" who are \"capable of acting in concert for the common defense.\" And the security of a free \"state,\" the Court opined, does not refer to the security of each of the several states, but rather the security of the country as a whole.", "Coming full circle to the Court's initial declaration that the two clauses must \"fit\" together, the majority concluded that the two clauses fit \"perfectly\" in light of the historical context showing that \"tyrants had eliminated a militia consisting of all the able-bodied men\u00a0.\u00a0.\u00a0.\u00a0by taking away the people's arms.\" Thus, the Court announced, the reason for the Second Amendment's codification was \"to prevent elimination of the militia,\" which \"might be necessary to oppose an oppressive military force if the constitutional order broke down.\" But the reason for codification, the Court clarified, does not define the entire scope of the right the Second Amendment guarantees. This is so because, the Court explained, the Second Amendment codified a pre-existing right that included using firearms for self-defense and hunting, and thus the pre-existing right also informs the meaning of the Second Amendment."], "subsections": []}, {"section_title": "Squaring Heller with Miller", "paragraphs": ["The Supreme Court majority added that its conclusion was not foreclosed by its earlier ruling in Miller , which, as discussed above, had largely been viewed by the lower federal courts as advancing the collective right theory. Like the D.C. Circuit, the Supreme Court concluded that Miller addressed only the type of weapons eligible for Second Amendment protection. Furthermore, in the Court's view, the fact that Miller assessed a type of unlawfully possessed weapon supported its conclusion that the Second Amendment protects an individual right, noting that \"it would have been odd to examine the character of the weapon rather than simply note that the two crooks were not militiamen.\" Nor, the Court added, did Miller \"purport to be a thorough examination of the Second Amendment,\" and thus, the Court reasoned, it cannot be read to mean more than \"say[ing] only that the Second Amendment does not protect those weapons not typically possessed by law-abiding citizens for lawful purposes, such as short-barreled shotguns.\""], "subsections": []}, {"section_title": "Scope of the Right", "paragraphs": ["After announcing that the Second Amendment protects an individual's right to possess firearms, the Supreme Court explained that, \"[l]ike most rights, the right secured by the Second Amendment is not unlimited.\" Nevertheless, the Court left for another day an analysis of the full scope of the right. The Court did clarify, however, that \"nothing in our opinion should be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons and the mentally ill, or laws forbidding the carrying of firearms in sensitive places such as schools and government buildings, or laws imposing conditions and qualifications on the commercial sale of firearms,\" among other \"presumptively lawful\" regulations. And as for the kind of weapons that may obtain Second Amendment protection, the Court noted that Miller limits Second Amendment coverage to weapons \"in common use at the time\" that the reviewing court is examining a particular firearm, which, the Court added, \"is fairly supported by the historical tradition of prohibiting the carrying of dangerous and unusual weapons.\""], "subsections": []}, {"section_title": "Second Amendment Analysis of D.C.'s Firearms Regulations", "paragraphs": ["Finally, the Supreme Court applied the Second Amendment, as newly interpreted, to the contested D.C. firearm regulations\u2014which amounted to a near-total handgun ban\u2014and concluded that they were unconstitutional. First, the Court declared that possessing weapons for self-defense is \"central to the Second Amendment right,\" yet the District's handgun ban prohibits \"an entire class of 'arms' that is overwhelmingly chosen by American society for that lawful purpose.\" Moreover, the handgun prohibition extended into the home, where, the Court added, \"the need for defense of self, family, and property is most acute.\" Additionally, the requirement that firearms in the home be kept inoperable is unconstitutional because, the Court concluded, that requirement \"makes it impossible for citizens to use them for the core lawful purpose of self-defense.\" Thus, the Court ruled, the District's handgun ban could not survive under any level of scrutiny that a court typically would apply to a constitutional challenge of an enumerated right. "], "subsections": []}]}, {"section_title": "Dissent: Justice Stevens", "paragraphs": ["Justice Stevens, joined by Justices Souter, Ginsburg, and Breyer, dissented. Justice Stevens did not directly quarrel with the majority's conclusion that the Second Amendment provides an individual right, asserting that it \"protects a right that can be enforced by individuals.\" But he disagreed with the majority's interpretation of the scope of the right, contending that neither the text nor history of the Amendment supports \"limiting any legislature's authority to regulate private civilian uses of firearms\" or \"that the Framers of the Amendment intended to enshrine the common-law right of self-defense in the Constitution.\" Additionally, he characterized the majority's interpretation of Miller as a \"dramatic upheaval in the law.\" In his view, Miller interpreted the Second Amendment as \"protect[ing] the right to keep and bear arms for certain military purposes\" and not \"curtail[ing] the Legislature's power to regulate the nonmilitary use and ownership of weapons.\" This interpretation, Justice Stevens added, \"is both the most natural reading of the Amendment's text and the interpretation most faithful to the history of its adaptation.\""], "subsections": []}, {"section_title": "Dissent: Justice Breyer", "paragraphs": ["Justice Breyer, joined by Justices Stevens, Souter, and Ginsburg, authored another dissent. Although agreeing with Justice Stevens that the Second Amendment protects only militia-related firearm uses, in his dissent he argued that the District's laws were constitutional even under the majority's conclusion that the Second Amendment protects firearm possession in the home for self-defense. He began by assessing the appropriate level of scrutiny under which Second Amendment challenges should be analyzed. Justice Breyer suggested an interest-balancing inquiry in which a court would evaluate \"the interests protected by the Second Amendment on one side and the governmental public-safety concerns on the other, the only question being whether the regulation at issue impermissibly burdens the former in the course of advancing the latter.\" In making that evaluation, Justice Breyer would ask \"how the statute seeks to further the governmental interests that it serves, how the statute burdens the interests that the Second Amendment seeks to protect, and whether there are practical less burdensome ways of furthering those interests.\" Applying those questions to the challenged D.C. laws, Justice Breyer concluded that (1) the laws sought to further compelling public-safety interests; (2) the D.C. restrictions minimally burdened the Second Amendment's purpose to preserve a \"well regulated Militia\" and burdened \"to some degree\" an interest in self-defense; and (3) there were no reasonable but less restrictive alternatives to reducing the number of handguns in the District. Thus, in Justice Breyer's view, the District's gun laws were constitutional. He also anticipated that the majority's decision would \"encourage legal challenges to gun regulation throughout the Nation.\" The majority did not seem to voice disagreement with this prediction, but noted that \"since this case represents this Court's first in-depth examination of the Second Amendment, one should not expect it to clarify the entire field.\" Indeed, after Heller a series of challenges to federal and state firearms laws occurred . "], "subsections": []}]}]}, {"section_title": "Second Amendment Incorporation", "paragraphs": ["Because Heller involved a challenged to a D.C. law, and because the District is generally not viewed as a state for purposes of constitutional law, a question beyond the scope of Heller was whether the Second Amendment applies to the states. Initially, the Bill of Rights was thought solely to restrict the power of the federal government. Only after the Fourteenth Amendment's adoption did the Supreme Court contemplate whether the Bill of Rights applies to the states. Section One of the Fourteenth Amendment declares that \"[n]o state shall make or enforce any law which shall abridge the privileges or immunities of the Unites States; nor shall any state deprive any person of life, liberty, or property, without due process of law.\" During the nineteenth and twentieth centuries, several theories were advanced, with varying results, concerning whether the Fourteenth Amendment requires states to comply with the Bill of Rights. The theory that eventually achieved the greatest success was selective incorporation through the Fourteenth Amendment's Due Process Clause.", "Under the doctrine of selective incorporation, courts address whether the Due Process Clause of the Fourteenth Amendment fully incorporates a particular provision (and not an amendment as a whole) in the Bill of Rights and thus applies to the states. To do so, courts evaluate whether the particular provision is \"fundamental to our scheme of ordered liberty\" as well as \"deeply rooted in this Nation's history and tradition.\" Most provisions of the Bill of Rights have been incorporated under this theory. And most recently in McDonald v. City of Chicago, the Supreme Court addressed whether the Second Amendment applies to the states."], "subsections": [{"section_title": "McDonald v. City of Chicago", "paragraphs": ["After Heller several firearms associations, along with residents of the City of Chicago and its neighboring suburb of Oak Park, Illinois, brought Second Amendment challenges to ordinances banning handgun possession in those municipalities. The lawsuits were dismissed in the federal district court on the ground that the Supreme Court had yet to apply the Second Amendment to the states. The Seventh Circuit affirmed, reasoning that century-old Supreme Court precedent had long ago announced that the Second Amendment does not apply to the states. ", "The Supreme Court reversed in a 4-1-4 ruling authored by Justice Alito, concluding that \"the Framers and ratifiers of the Fourteenth Amendment counted the right to keep and bear arms among those fundamental rights necessary to our system of ordered liberty.\" Thus, the Court held that the Second Amendment is applicable to the states through the Due Process Clause of the Fourteenth Amendment. The plurality first noted that Heller makes \"unmistakabl[e]\" that the basic right to self-defense is a \"central component\" of the Second Amendment and \"deeply rooted in this Nation's history and tradition.\" The Court reiterated much of the information recited in Heller about the founders' relationship to arms, including the fear many held\u2014based on King George III's attempts to disarm the colonists\u2014that the newly created federal government, too, would disarm the people to impose its will. And even though the initial perceived threat of disarmament had dissipated by the 1850s, the plurality asserted that, still, \"the right to keep and bear arms was highly valued for purposes of self-defense.\" The Court also pointed to congressional debate in 1868 of the Fourteenth Amendment, during which Senators had referred to the right to keep and bear arms as a \"fundamental right deserving of protection.\"", "In his concurring opinion, Justice Thomas said that he would have construed the Second Amendment to be applicable to the states via the Privileges or Immunities Clause of the Fourteenth Amendment because, in his view, \"the right to keep and bear arms is guaranteed by the Fourteenth Amendment as a privilege of American citizenship.\" But his opinion, nevertheless, provided the crucial fifth vote to hold that the Second Amendment applies to the states. "], "subsections": [{"section_title": "Dissenting Opinions", "paragraphs": ["Justice Breyer dissented (joined by Justices Ginsburg and Sotomayor), contending that \"nothing in the Second Amendment's text, history, or underlying rationale . . . warrant[s] characterizing it as 'fundamental' insofar as it seeks to protect the keeping and bearing of arms for private self-defense purposes.\" Additionally, he asserted that the Constitution provides no authority for \"transferring ultimate regulatory authority over the private uses of firearms from democratically elected legislators to courts or from the States to the Federal Government.\"", "Justice Stevens authored another dissenting opinion, arguing that the question before the Court was not whether the Second Amendment, as a whole, applies to the states, but rather whether the Fourteenth Amendment requires that the liberty interest asserted\u2014\"the right to possess a functional, personal firearm, including a handgun, within the home\"\u2014be enforceable against the states. In his view, the Second Amendment is not enforceable against the states, particularly because the Amendment is a \"federalism provision\" that is \"directed at preserving the autonomy of the sovereign States, and its logic therefore resists incorporation by a federal court against the states.\""], "subsections": []}]}]}, {"section_title": "Federal Circuit Courts' Post-Heller Approach to Second Amendment Analysis", "paragraphs": ["After Heller and McDonald , lawsuits were brought nationwide challenging on Second Amendment grounds various federal, state, and local firearms regulations. Heller did not define the full scope of the right protected by the Second Amendment, but the main take away may be summed up as follows: The Second Amendment protects the right of law-abiding citizens to possess weapons for lawful purposes, notably, self-defense in the home. With this minimal guidance from the Supreme Court, the circuit courts largely have been applying a two-step inquiry, drawn from the discussion in Heller , to determine whether a particular law is constitutional. First, courts ask whether the challenged law burdens conduct protected by the Second Amendment. If it does not, the inquiry ends, as the law does not implicate the Second Amendment. But if the challenged law does burden conduct protected by the Second Amendment, courts next ask whether, under some type of means-end scrutiny (described in more detail below), the law is constitutional under that standard of review.", "The Seventh Circuit stands out among the circuit courts of appeal for, at times, taking a somewhat different approach in the two-step analysis. In recent cases the court has declined, at step two, to dig \"deeply into the 'levels of scrutiny' quagmire.\" Instead, the court evaluates \"the strength of the government's justification for restricting or regulating the exercise of Second Amendment rights.\" When the firearm restriction implicates core Second Amendment rights, the Seventh Circuit has suggested that the government must make a \"rigorous showing\" that may resemble something close to strict scrutiny. For less severe burdens, the court requires the government to make a \"strong showing\" that a firearm regulation bears a \"substantial relation\" to an important governmental objective\u2014a standard that resembles the intermediate scrutiny standard of review. It is also worth noting that, although the D.C. Circuit has applied the two-step approach when evaluating firearm legislation, the newest member of the Supreme Court bench\u2014Justice Kavanaugh\u2014advocated for a different approach while serving as a judge on the D.C. Circuit, arguing that: \"In my view,\" he stated, \" Heller and McDonald leave little doubt that courts are to assess gun bans and regulations based on text, history, and tradition, not by a balancing test such as strict or intermediate scrutiny.\" "], "subsections": [{"section_title": "Step One: Scope of Second Amendment Protection", "paragraphs": ["The first question in the two-part framework asks whether the challenged law targets conduct within the scope of the Second Amendment's protections. In making this determination, the reviewing courts typically engage in a textual and historical inquiry into the original meaning of the right, as the Supreme Court majority did in Heller. Yet, even after concluding that the challenged regulation does not burden protected activity, courts, at times, have applied step two out of an \"abundance of caution,\" given the lack of guidance from the Supreme Court as to how courts should analyze Second Amendment claims."], "subsections": [{"section_title": "\"Longstanding\" and \"Presumptively Lawful\" Regulations", "paragraphs": ["For certain types of firearms regulations, some courts ask under step one whether the challenged regulation is \"longstanding\" and \"presumptively lawful\" and, if the answer is in the affirmative, the inquiry ends. This analysis derives from the passage in Heller in which the Supreme Court announced that \"nothing in our opinion should be taken to cast doubt on longstanding prohibitions\" that the Court considered to be \"presumptively lawful,\" on the possession of weapons by certain categories of persons and in certain \"sensitive places,\" as well as restrictions on possessing and selling certain types of weapons. In particular, the Court mentioned that such laws include those prohibiting felons and the mentally ill from possessing weapons; forbidding firearms from being carried in schools and government buildings; and imposing conditions on the commercial sale of firearms. This list was not meant to be exhaustive, and the Court did not elaborate further. Some scholars have dubbed this passage Heller 's \"safe harbor,\" intimating that restrictions similar to those listed in Heller would be found constitutional. Dissimilarly, at least one circuit court has said that if a firearms regulation is \"longstanding,\" it is not automatically constitutional but, rather, \"enjoy[s] more deferential treatment\" at step two.", "Whether at step one or two, the federal courts have grappled with what makes a particular firearm restriction \"longstanding\" and \"presumptively lawful.\" Laws aligning neatly with those specifically recited by the Heller majority have been upheld, in some courts, as falling into Heller's safe harbor. For laws falling outside those specified in Heller, the courts have generally found that a regulation can be longstanding even without a \"precise founding-era analogue.\" This is so because laws that the Supreme Court cited as \"longstanding\" in Heller, like laws barring felons and the mentally ill from possessing firearms, were not statutorily prohibited until the mid-twentieth century. Conversely, other courts have observed the \"relative futility of 'pars[ing] these passages of Heller as if they contain an answer'\" to whether certain gun prohibitions are valid. Additionally, one circuit court has criticized placing regulations into the so-called \"safe harbor\" because, in its view, that approach is too similar to rational-basis review, which Heller rejected. ", "Additionally, the circuit courts have been attempting to decipher why the Supreme Court designated certain firearms restrictions as presumptively lawful. Some courts have interpreted Heller 's discussion of presumptively lawful \"longstanding prohibitions\" on certain firearms to mean that such firearms are outside the scope of the Second Amendment. Others presume, subject to rebuttal, that a longstanding regulation is unprotected by the Second Amendment and thus lawful. Yet another interpretation that has been offered is that longstanding regulations are lawful not because they are outside the scope of the Second Amendment, but because, despite burdening protected activity, they would survive analysis under any standard of scrutiny. So unlike the first two interpretations, which inquire into whether a regulation is presumptively lawful, under this latter view, the inquiry would take place during step two."], "subsections": []}]}, {"section_title": "Step Two: Applicable Standard of Review", "paragraphs": ["At step two, most courts analyze the challenged regulation under a particular level of scrutiny. Typically, constitutional claims are evaluated under rational basis, intermediate, or strict scrutiny. Rational basis review is the most deferential to legislatures, with courts asking whether a statute is rationally related to a legitimate government purpose. Under strict scrutiny\u2014the most exacting standard of review\u2014the government must show that the regulation furthers a compelling governmental interest and is narrowly tailored to serve that interest. In between those two is intermediate scrutiny, in which a court asks whether (1) the regulation furthers a substantial or important governmental interest; (2) there is a reasonable or substantial fit between the asserted interest and the challenged law; and (3) the restriction is no greater than necessary to further that interest. Under this method, \"the fit needs to be reasonable,\" but \"a perfect fit is not required.\"", "Heller provided little guidance on how courts ought to review Second Amendment claims. The Supreme Court majority seemed to reject rational basis, as well as Justice Breyer's proposed interest-balancing inquiry, as adequate analytical tools. In the majority opinion, though, the Court made numerous comparisons between the rights secured by the First and Second Amendments. Accordingly, to determine the applicable level of scrutiny, courts have looked to First Amendment jurisprudence for guidance. The Supreme Court's First Amendment jurisprudence applies strict scrutiny to laws that regulate the content of a message. But if a law regulates only the time, place, or manner of how a message is conveyed, that law is subject to intermediate scrutiny. As in that context, in Second Amendment challenges courts typically will \"consider the nature of the conduct being regulated and the degree to which the challenged law burdens the right.\" Thus, \"[a] less severe regulation\u2014a regulation that does not encroach on the core of the Second Amendment\u2014requires a less demanding means-end showing.\" In that case, courts apply a form of intermediate scrutiny to Second Amendment challenges. For instance, in United States v. Masciandaro, the Fourth Circuit drew a line between firearm possession in the home versus outside the home, concluding that strict scrutiny would apply to the former and intermediate scrutiny to the latter:", "We assume that any law that would burden the \"fundamental,\" core right of self-defense in the home by a law-abiding citizen would be subject to strict scrutiny. But, as we move outside the home, firearm rights have always been more limited, because public safety interests often outweigh individual interests in self-defense.", "Borrowing further from First Amendment jurisprudence, several courts have asked whether a firearm law regulates only the \"time, place, and manner\" in which a person may exercise Second Amendment rights. If so, intermediate scrutiny would be warranted. Finally, based on Heller, most courts have viewed rational-basis review as \"off the table,\" leaving strict and intermediate scrutiny\u2014the two categories of heightened scrutiny\u2014for the courts to choose from. "], "subsections": []}]}, {"section_title": "Post-Heller Rulings on the Constitutionality of Federal and State Firearm Regulations", "paragraphs": ["Heller largely left unresolved much of the \"who, what, where, when, and why\" of Second Amendment protections. The Supreme Court did make clear, however, that the Second Amendment (1) applies to law-abiding citizens who seek to use firearms for lawful purposes, particularly for self-defense in the home; and (2) does not protect dangerous and unusual weapons. Since Heller and McDonald, the lower courts have been attempting to apply Heller in various Second Amendment challenges to federal, state, and local firearm laws. This section of the report highlights cases that have examined what classes of persons, weapons, and places are protected by the Second Amendment, as well as the manner in which such categories may be permissibly regulated. Concerning federal regulations, most challenges stem from provisions of the Gun Control Act of 1968, as amended, which places limitations on the commercial sale and possession of firearms in interstate commerce. The challenged state laws and regulations vary; this report highlights challenges to state assault weapon bans, concealed carry restrictions, firearm licensing schemes, and the commercial sale of arms, among others."], "subsections": [{"section_title": "What Categories of Persons May Be Subject to Firearm Regulations?", "paragraphs": [], "subsections": [{"section_title": "Age Restrictions", "paragraphs": ["Federal laws imposing age restrictions on gun possession and purchasing have survived judicial challenges. For instance, it is unlawful under 18 U.S.C. \u00a7 922(x)(2)(A) for juveniles (statutorily defined as persons under 18) to possess a handgun (subject to several exceptions). Shortly after Heller, a 17-year-old convicted under \u00a7\u00a0922(x) challenged his conviction in the First Circuit, arguing that the statute violated his rights under the Second Amendment. In particular, he argued that his interest in self-defense is \"just as strong\" as that of an adult and that the statute\u2014enacted in 1994\u2014cannot be viewed as \"longstanding.\" But the First Circuit in United States v. Rene E. disagreed, concluding that there has been a \"longstanding tradition of prohibiting juveniles from both receiving and possessing handguns,\" with age-based gun restrictions being in place under federal law since 1968 and restrictions on juvenile possession of guns dating back more than a century at the state level. Thus, the court concluded that the federal ban on juvenile possession of handguns fell within Heller's safe harbor for longstanding restrictions on firearm possession. ", "Another provision in the Gun Control Act (and corresponding regulations) makes it unlawful for firearm dealers to sell handguns to persons under 21 years old. The law was challenged in National Rifle Association v. ATF by persons between 18 and 21 years old who argued that it unconstitutionally burdened their right to keep and bear arms under the Second Amendment. In its ruling, the Fifth Circuit commented that it was \"inclined to uphold\" the law and regulation under step one as a longstanding restriction outside the scope of the Second Amendment after finding historical support for similar firearm restrictions. Nevertheless, in an \"abundance of caution,\" the court proceeded to step two of the two-part test formed after Heller . At step two, the court applied intermediate scrutiny, concluding that the age-based restriction does not burden the Second Amendment's core protections of law-abiding, responsible citizens, because \"Congress found that persons under 21 tend to be relatively irresponsible and can be prone to violent crime, especially when they have easy access to handguns.\" Nor does the restriction prevent 18- to 21-year-olds from possessing handguns for self-defense in the home because, the court added, these persons may lawfully acquire handguns from responsible parents or guardians. Ultimately, the court concluded that the laws survived intermediate scrutiny because the government showed a nexus between the firearm restriction and the government's interest in keeping guns out of the hands of young persons. In doing so, the court gave particular attention to Congress's findings after a multi-year investigation that there was a causal relationship between the easy availability of firearms to persons under 21 and a rise in crime."], "subsections": []}, {"section_title": "Felons", "paragraphs": ["Under 18 U.S.C. \u00a7 922(g)(1), the Gun Control Act makes it is a criminal offense for a felon to possess a firearm. After Heller, the federal circuit courts have unanimously concluded that \u00a7\u00a0922(g)(1) does not violate the Second Amendment. In upholding \u00a7 922(g)(1), some courts have relied on the passage in Heller in which the Supreme Court announced that \"nothing in our opinion should be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons.\" For example, in United States v. Vongxay , the Ninth Circuit rejected an argument that this proclamation in Heller was mere dicta that the court need not follow and upheld the challenged provision as constitutional. Other courts, like the D.C. Circuit, have opined that \"history and tradition support the disarmament of those who were not (or could not be) virtuous members of the community,\" and thus all felons are excluded from the Second Amendment. Yet some courts have opined, however, that the Supreme Court, \"by describing the felon disarmament ban as 'presumptively lawful,'\" meant that even if a facial challenge were to fail, the presumption could be rebutted in an as-applied challenge. For example, the Third Circuit sitting en banc in Binderup v. Attorney General United States of America held that a person could rebut the presumption in an as-applied challenge to \u00a7 922(g)(1) if that person could sufficiently distinguish himself (and the crime of conviction) from the \"traditional justifications\" for excluding convicted felons from possessing firearms. The Fourth Circuit held more narrowly in Hamilton v. Pallozzi that generally, a felony conviction \"removes one from the class of 'law-abiding, responsible citizens,' for the purposes of the Second Amendment,\" unless the person receives a pardon or the law defining the felony at issue is found unconstitutional or otherwise unlawful. Still, the court left open the possibility that the presumption could be rebutted for persons convicted of certain crimes labeled as misdemeanors but falling under the scope of \u00a7 922(g)(1) because of the potential term of imprisonment accompanying that misdemeanor. In contrast, other courts have cautioned that \"the highly-individualized approach\" of as-applied challenges \"raises serious institutional and administrative concerns.\" ", "One court even held that an indictment under \u00a7 922(g)(1) was constitutional even as applied to a person who was not a felon forbidden from possessing a firearm, but who was charged with aiding and abetting a felon to possess a firearm in violation of that provision. In United States v. Huet, the defendant was indicted under \u00a7 922(g)(1) and argued that the indictment was based solely on the government's evidence that she possessed a rifle in her home, which she shared with a convicted felon. The district court dismissed the indictment on the ground that it would permit \"'the total elimination of the [Second Amendment] right of a sane, non-felonious citizen to possess a firearm, in her home, simply because her paramour is a felon.'\" The Third Circuit disagreed, concluding that \"a properly-brought aiding and abetting charge does not burden conduct protected by the Second Amendment.\" Ultimately, the Third Circuit concluded that the indictment's dismissal was premature because the government must be allowed to further develop the evidentiary record to show that the defendant did more than merely possess a weapon in a home shared with a convicted felon, but actually aided and abetted that felon in possessing the firearm himself. If that was the case, the defendant's conduct would be beyond the scope of the Second Amendment given Heller's comment that \"the Second Amendment does not afford citizens a right to carry arms for 'any purpose.'\" And aiding and abetting a convicted felon in possessing a firearm, the court concluded, is not a protected right."], "subsections": []}, {"section_title": "Misdemeanants of Domestic Violence", "paragraphs": ["A 1996 amendment to the Gun Control Act, commonly referred to as the Lautenberg Amendment and codified at 18 U.S.C. \u00a7 922(g)(9), prohibits persons convicted of a misdemeanor crime of domestic violence from possessing firearms. Thus far, reviewing courts have uniformly upheld the provision against Second Amendment challenges. Several circuits have employed intermediate scrutiny to evaluate \u00a7 922(g)(9) and, in doing so, concluded that the firearm restriction is constitutional. For instance, in United States v. Staten, the Fourth Circuit concluded that there is a reasonable fit between \u00a7 922(g)(9) and a substantial governmental interest\u2014reducing domestic gun violence\u2014because the government had established that domestic violence in the United States is a serious problem with high rates of recidivism, and, additionally, the \"use of firearms in connection with domestic violence is all too common.\" ", "Another circuit court, however, concluded that \u00a7 922(g)(9) is a presumptively lawful prohibition on the possession of firearms that need not be evaluated under a particular level of scrutiny. In doing so, the Eleventh Circuit in United States v. White reasoned that \u00a7 922(g)(9) was passed, in part, because Congress had recognized that domestic violence with firearms had not been remedied by \"longstanding felon-in-possession laws,\" and thus the court \"s[aw] no reason to exclude \u00a7 922(g)(9) from the list of longstanding prohibitions on which Heller does not cast doubt.\"", "Additionally, the Seventh Circuit sitting en banc and using its unique approach upheld \u00a7 922(g)(9) as constitutional after concluding that the government made a \"strong showing\" that \u00a7\u00a0922(g)(9) is substantially related to an important governmental objective. In particular, the court observed that \u00a7\u00a0922(g)(9) satisfied the government's objective of keeping firearms out of the hands of persons likely to continue to use violence (as the government had found of misdemeanants of domestic violence). In addition, studies presented showed high recidivism rates for domestic abusers and an increased risk of homicide with the presence of a firearm in the home of a convicted domestic abuser. "], "subsections": []}, {"section_title": "Persons Subject to a Domestic Violence Protective Order", "paragraphs": ["Similarly, 18 U.S.C. \u00a7 922(g)(8), which prohibits persons subject to certain domestic violence protective orders from possessing firearms, has survived post- Heller Second Amendment challenges. For instance, in United States v. Chapman, the Fourth Circuit, applying intermediate scrutiny, assumed without deciding that a person subject to a qualifying domestic violence restraining order fell within the Second Amendment's protections and concluded that \u00a7\u00a0922(g)(8) does not unconstitutionally burden those protections. Intermediate scrutiny was appropriate because, the court reasoned, a person subject to a domestic violence restraining order is not entitled to the benefit of the \"core right identified in Heller \u2014the right of a law-abiding, responsible citizen to possess and carry a weapon for self-defense.\" In applying intermediate scrutiny the Fourth Circuit concluded that the government established a reasonable fit between \u00a7\u00a0922(g)(8) and the government's substantial interest in reducing domestic gun violence. In particular, the court noted that \u00a7\u00a0922(g)(8) (among other things) \"by its own terms, explicitly prohibits the use, attempted use, or threatened use of physical force against [an] intimate partner or child that would reasonable be expected to cause bodily injury.\" Additionally, the court observed that \u00a7\u00a0922(g)(8)'s \"prohibitory sweep [is] exceedingly narrow\" because the provision applies only to restraining orders currently in force.", "Using a different approach, but reaching the same ultimate result, the Eighth Circuit in United States v. Bena concluded at step one of its analysis that \u00a7\u00a0922(g)(8) is constitutional on its face, reasoning that \"[i]nsofar as \u00a7 922(g)(8) prohibits possession of firearms by those who are found to represent a 'credible threat to the physical safety of [an] intimate partner or child . . . it is consistent with a common-law tradition that the right to bear arms is limited to peaceable or virtuous citizens.\"", "Additionally, in an as-applied challenge, the Fourth Circuit in United States v. Mahin upheld the conviction of a person subject to a domestic violence protective order who had been found in violation of \u00a7 922(g)(8) by renting a firearm at a shooting range. The court rejected the defendant's argument that possessing a firearm \"for a limited period of time in the controlled environment of a commercial shooting range\" is conduct that \"must be exempted from prosecution\" and is not the kind of conduct \u00a7 922(g)(8)'s seeks to criminalize. Instead, the court reasoned that the defendant, \"possessed the power . . . to leave the premises and use [a firearm] against those that sought the protections of the protective order.\" The court did not find it relevant that the defendant did not actually leave the shooting range with the handgun and incite violence, because the intermediate scrutiny standard of review applicable to the challenged restriction, in the court's view, \"has never been held to require a perfect end-means fit.\" Accordingly, the court concluded that \"[i]t is sufficient that \u00a7\u00a0922(g)(8) rests on an established link between domestic abuse, recidivism, and gun violence and applies to persons already individually adjudged in prior protective order to pose a future threat of abuse.\""], "subsections": []}, {"section_title": "Unlawful Drug Users and Addicts", "paragraphs": ["18 U.S.C. \u00a7 922(g)(3), which criminalizes the possession of firearms by persons who unlawfully use or are addicted to any controlled substance, has been upheld as constitutional by several circuit courts. In particular, circuit courts of appeals have upheld \u00a7 922(g)(3) under the Second Amendment because the ban prohibits conduct similar to those listed in Heller as presumptively lawful, namely felons and the mentally ill. For instance, the Ninth Circuit in United States v. Dugan noted that habitual drug users, like felons and the mentally ill, \"more likely will have difficulty exercising self-control, particularly when they are under the influence of controlled substances.\" ", "Other circuits, however, have required the government to put forth evidence demonstrating a reasonable connection between \u00a7 922(g)(3) and an important governmental interest. For instance, in United States v. Carter the Fourth Circuit initially vacated the conviction of a person convicted under \u00a7 922(g)(3) for possessing a firearm while unlawfully using marijuana, and the court remanded the case to the district court for the parties to develop the record and make arguments as to whether the conviction withstood intermediate scrutiny. In evaluating the defendant's argument, the circuit court assumed without deciding that the defendant maintains Second Amendment protection notwithstanding his drug use. And the court found on the record before it that the government had not demonstrated a connection between drug use and violence and thus had not shown a reasonable fit between \u00a7\u00a0922(g)(3) and its goal of keeping guns out of the hands of irresponsible and dangerous persons. Unlike in other cases, the government had not provided any studies, empirical data, or legislative findings to support the restriction, and instead it had argued that \"the fit was a matter of common sense.\" However, the court noted that the government's burden on remand \"should not be difficult to satisfy,\" given that evidence of danger of mixing drugs and guns was, in the court's view, \"abundantly available.\" And on remand, the government indeed presented numerous studies showing a correlation between violent crime and drug use, which the Fourth Circuit ultimately found to substantiate the government's contention that \"disarming drug users reasonably serves the important governmental interest of protecting the community from gun violence.\""], "subsections": []}, {"section_title": "Aliens", "paragraphs": ["Another provision of the Gun Control Act, 18 U.S.C. \u00a7 922(g)(5), prohibits unlawfully present aliens and most categories of nonimmigrant visa holders from possessing firearms. In determining whether the Second Amendment covers non-U.S. citizens, courts have looked to whether such persons come within the ambit of \"the people\" as used in the text of Second Amendment. This inquiry has produced a circuit split. Some courts that have considered the issue have concluded that \"the people\" does not encompass unlawfully present aliens. For instance, the Fifth Circuit in United States v. Portillo-Munoz recounted that the Supreme Court in Heller noted that \"the people\" include \"law-abiding, responsible citizens\" and \"all members of the political community.\" Because unlawfully present aliens fit neither description, the court concluded that they are granted no rights by the Second Amendment. Moreover, to bolster its conclusion that the restriction in \u00a7\u00a0922(g)(5) is constitutional, the court added that \"Congress has the authority to make laws governing the conduct of aliens that would be unconstitutional if made to apply to citizens.\"", "However, a number of circuit courts, while ultimately holding \u00a7\u00a0922(g)(5) to be constitutional, have opined that \"the people,\" as used in the Second Amendment, could include some unlawfully present aliens. For example, in United States v. Meza-Rodriguez, the Seventh Circuit analyzed \u00a7\u00a0922(g)(5) as applied to an alien who was brought the United States as a young child. In determining whether the defendant was protected by the Second Amendment, the court analyzed the meaning of \"the people.\" Like the Fifth Circuit, the Seventh Circuit found that Heller links Second Amendment rights to law-abiding citizens, which, as someone who entered the country illegally, Meza-Rodriguez technically is not. But the court also concluded that the Supreme Court was not defining \"the people\" when making that connection in Heller . Accordingly, the Seventh Circuit relied on the Supreme Court's earlier opinion in United States v. Verdugo-Urquidez, which opined that \"the people,\" for the purposes of protection under the First, Second, and Fourth Amendments, \"refers to a class of persons who are part of a national community or who have otherwise developed sufficient connection with this country to be considered part of that community.\" The defendant in Meza-Rodriguez met that standard because, the Seventh Circuit concluded, he had \"extensive ties\" with the United States, including his 20-year residency beginning as a child, attendance at U.S. public schools, and close family relationships with persons in the United States. Nevertheless, the court held that \u00a7\u00a0922(g)(5) is constitutional, reasoning that the government made a strong showing that its interest in \"prohibiting persons who are difficult to track and have an interest in eluding law enforcement\" supports the firearm ban.", "Additionally, the Tenth Circuit in United States v. Huitron-Guizar assumed that unlawfully present aliens, like the defendant\u2014who also had been in the United States for decades and was brought to the country as a young child\u2014could assert a Second Amendment right, noting that \"we hesitate to infer from Heller a rule that the right to bear arms is categorically inapplicable to non-citizens.\" Applying intermediate scrutiny to \u00a7\u00a0922(g)(5), the court concluded that the law is constitutional, deferring to Congress's \"constitutional power to distinguish between citizens and non-citizens, or between lawful and unlawful aliens, and to ensure safety and order.\" Ultimately, the court found a substantial fit between the government's interests in crime control and public safety, and its desire to keep firearms out of the hands of those it deems as \"irresponsible or dangerous.\" "], "subsections": []}]}, {"section_title": "What Categories of Firearms May Be Subject to Government Regulation?", "paragraphs": [], "subsections": [{"section_title": "Assault Weapons and High-Capacity Magazines", "paragraphs": ["Several state \"assault weapon\" bans have been upheld in federal court, including those in the District of Columbia, New York, Connecticut, and Maryland. The Second and D.C. Circuits, in reviewing those laws, applied intermediate scrutiny and based their decisions on the specific evidence presented to tie the bans to the asserted state interests. And most recently, the Fourth Circuit, sitting en banc, concluded that the types of assault weapons banned in Maryland do not garner Second Amendment protection.", "After Heller , the District of Columbia revised its gun laws by enacting the Firearms Registration Amendment Act of 2008 (FRA). The FRA, among other things, banned assault weapons (including, as relevant here, semiautomatic rifles) and large-capacity magazines capable of holding more than 10 rounds of ammunition. In evaluating the ban's constitutionality, the D.C. Circuit assumed that semiautomatic rifles and high-capacity magazines garner Second Amendment protection but, after applying intermediate scrutiny, concluded that the provision was constitutional. The court chose intermediate scrutiny because the law, in the court's view, did not substantially burden the Second Amendment because it did not completely ban handgun possession\u2014described in Heller as the \"quintessential self-defense weapon.\" Nor, the court added, did the District's law prevent a person from having a different, \"suitable and commonly used weapon\" (e.g., handguns, non-automatic long guns) for self-defense in the home or hunting. Next, the D.C. Circuit concluded that the ban survived intermediate scrutiny because the record evidence substantiated the District's assertion that the ban was substantially related to protecting police officers and crime control. For example, evidence submitted \"suggest[ed that] assault weapons are preferred by criminals and place law enforcement 'at particular risk . . . because of their high firepower.'\" And \"the risk 'posed by military-style assault weapons,\" according to the circuit court, is \"'increased significantly if they can be equipped with high-capacity ammunition magazines' because, 'by permitting a shooter to fire more than ten rounds without reloading, they greatly increase the firepower of mass shooters.'\" ", "The Second Circuit took a similar approach when analyzing assault weapon bans in New York and Connecticut, enacted after the shooting at Sandy Hook Elementary School in Newtown, Connecticut. In New York State Rifle & Pistol Association v. Cuomo, the Second Circuit, applying intermediate scrutiny, upheld provisions banning assault weapons\u2014defined as semiautomatic weapons with certain enumerated features\u2014and large-capacity magazines capable of holding more than 10 rounds of ammunition, declaring that the dangers posed by such weapons \"are manifest and incontrovertible.\" However, the court struck down one provision in each state's law. New York's law also had a \"load limit\" that banned the possession of a firearm loaded with more than seven rounds of ammunition. The court struck it down on the grounds that the ban \"is entirely untethered from the stated rationale of reducing the number of assault weapons and large capacity magazines,\" and New York \"failed to present evidence that the mere existence of this load limit will convince any would-be malefactors to load magazines capable of holding ten rounds with only the permissible seven.\" And Connecticut's law specifically banned one non-semiautomatic weapon; the court concluded that it did not pass constitutional muster under intermediate scrutiny given the state's failure to argue how the ban related to a substantial government interest.", "Taking a different approach, the Seventh Circuit in Friedman v. City of Highland Park evaluated the constitutionality of a Chicago suburb's assault weapon ban without applying a particular level of scrutiny to assess the ban's constitutionality, but rather, by asking \"whether [the] regulation bans weapons that were common at the time of ratification or those that have 'some reasonable relationship to the preservation of a well regulation militia,' and whether law-abiding citizens retain adequate means of self-defense.\" The court noted that features of the banned firearms were not available at ratification but are now commonly used for military and police purposes and, thus, \"bear a relation to the preservation and effectiveness of state militias.\" Still, because states are in charge of militias, the court reasoned, state governments (and other units of local government) ought to have the authority to decide when civilians may have military-grade firearms in order to have them ready for when the militia is called to duty. The court also noted that other firearms, including long guns, pistols, and revolvers, were still available for self-defense. Accordingly, the Seventh Circuit concluded that the assault weapons ban fell within the limits established by Heller and thus was constitutional. In 2015, the Supreme Court denied granting a petition for a writ of certiorari over the dissent of Justices Thomas and Scalia. In his dissent, Justice Thomas argued that the Seventh Circuit (and other circuits holding similarly) \"upheld categorical bans on firearms that millions of Americans own for lawful purposes\" and suggested that those bans ran afoul of Heller and McDonald.", "Lower courts have continued to review the constitutionality of assault weapon bans. Recently, the Fourth Circuit, sitting en banc in Kolbe v. Hogan, held that the Second Amendment does not protect the assault weapons and large-capacity magazines that Maryland had made unlawful. In so holding, the court relied on a passage in Heller stating that \"'weapons that are most useful in military service\u2014M-16 rifles and the like\u2014may be banned' without infringement upon the Second Amendment.\" The court viewed Heller as drawing a line \"between weapons that are most useful in military service,\" which garner no Second Amendment protection, and \"those that are not.\" And \"[b]ecause the banned assault weapons and large-capacity magazines are 'like' 'M-16 rifles'\u2014'weapons that are most useful in military service,'\" the court continued, \"they are among those arms that the Second Amendment does not shield.\" For instance, the court reasoned that, although the M-16 is a fully automatic weapon, whereas the firearms banned by the challenge state law\u2014the AR-15 and similar rifles\u2014are semi automatic, the two types of firearms have nearly identical rates of fire and thus share \"the military features . . . that make the M16 a devastating and lethal weapon of war.\" The court similarly concluded that large-capacity magazines, by \"enabl[ing] a shooter to hit multiple human targets very rapidly [and] contribut[ing] to the unique function of any assault weapon to deliver extraordinary firepower\" are likewise \"most useful in military service.\" Additionally, the court held in the alternative that if the banned weapons garner any Second Amendment protection, the ban should be reviewed under intermediate scrutiny and, under that standard, the ban is lawful."], "subsections": []}, {"section_title": "Ammunition", "paragraphs": ["At least one circuit court has found that ammunition, although not explicitly mentioned in the Second Amendment, is constitutionally protected because \"the right to possess firearms for protection implies a corresponding right to obtain the bullets necessary to use them.\" In the Ninth Circuit's view, \"without bullets, the right to bear arms would be meaningless.\" Even with that understanding, though, the Ninth Circuit in Jackson v. City & County of San Francisco upheld a San\u00a0Francisco ordinance banning the sale of ammunition with no sporting purpose that is designed to expand or fragment upon impact. The court concluded that banning a certain type of ammunition does not substantially burden the Second Amendment right to use firearms for self-defense because the restriction burdens only the manner in which that right is exercised, and thus ought to be reviewed under intermediate scrutiny. The court ultimately concluded the ordinance substantially fit San Francisco's important interest in reducing the likelihood that shooting victims in the city will die from their injuries, noting that the city legislature, in enacting the legislation, had relied on evidence showing that hollow-point bullets are more lethal than regular bullets.", "The Third Circuit, in Association of New Jersey & Pistol Clubs, Inc. v. Attorney General of New Jersey , went a step further to hold that firearm magazines, which attach to certain firearms to feed the ammunition, are \"arms\" within the meaning of the Second Amendment. \"Because magazines feed ammunition into certain guns, and ammunition is necessary for such a gun to function as intended,\" the court concluded, \"magazines are 'arms' within the meaning of the Second Amendment .\" After assuming without deciding that magazines are covered by the Second Amendment, the court applied intermediate scrutiny to New Jersey's ban of large-capacity magazines capable of holding more than 10 rounds of ammunition. The Third Circuit upheld that ban, concluding that it \"reasonably fits\" New Jersey's interest in promoting public safety. Further, the court opined that the New Jersey law does not burden more conduct than reasonably necessary given that the law does not disarm individuals or limit the number of firearms, magazines, or ammunition a person may lawfully possess."], "subsections": []}]}, {"section_title": "Where May Firearms Be Subject to Governmental Regulation?", "paragraphs": [], "subsections": [{"section_title": "Firearms Outside the Home", "paragraphs": ["Post -Heller , courts have disagreed about the extent to which the Second Amendment protects the right to carry firearms outside the home. For instance, the Ninth Circuit has opined that the Second Amendment \"gurantee[s] some right to self-defense in public,\" and that right includes openly carrying a firearm in public but not carrying a concealed firearm. First, in Peruta v. County of San Diego , the en banc Ninth Circuit concluded that the Second Amendment \"does not extend to the carrying of concealed firearms in public by members of the general public.\" In reaching this conclusion, the court engaged in a historical analysis to determine whether the Second Amendment codified a pre-existing right to carry a concealed weapon in public, including examining jurisprudence following the ratification of the Second and Fourteenth Amendments. Based on the Supreme Court's ruling a few decades after the Fourteenth Amendment's ratification, in which the Court announced that \"the right of the people to keep and bear arms . . . is not infringed by laws prohibiting the carrying of concealed weapons,\" plus state court rulings in the years following the Fourteenth Amendment's ratification concluding similarly, the Ninth Circuit held that the Second Amendment \"does not include, in any degree, the right of a member of the general public to carry concealed firearms.\" ", "In Young v Hawaii, the Ninth Circuit analyzed the question left open in Peruta : whether the Second Amendment encompasses the right to carry a firearm openly in public. Young analyzed a Hawaii statute that enabled open-carry permits to be granted, as relevant here, only to persons \"engaged in the protection of life and property.\" Again, the Ninth Circuit examined the text and historical understanding of the Second Amendment before concluding that \"the right to bear arms must include, at the least, the right to carry a firearm openly for self-defense.\" Further, the court concluded that this right is a \"core\" Second Amendment right, given that \" Heller and McDonald describe the core purpose of the Second Amendment as self-defense,\" and \"much of Heller 's reasoning implied a core purpose of self-defense not limited to the home.\" Yet, the court concluded, Hawaii's law, which restricted open carry to persons whose work involves protecting life or property, limited open carry \"to a small and insulated subset of small of law-abiding citizens.\" And because the Second Amendment protects all law-abiding citizens, the court found that Hawaii's law\u2014which foreclosed most law-abiding Hawaiians from openly carrying a handgun in public\u2014\"amounts to a destruction\" of a core Second Amendment right and cannot stand under any level of scrutiny.", "Additionally, Illinois had banned persons (subject to certain exceptions) from carrying uncased, immediately accessible (i.e., ready to use) firearms outside the home, until the Seventh Circuit struck down that law in Moore v. Madigan , holding that it conflicted with Heller's interpretation of the Second Amendment. The circuit court declined \"to engage in another round of historical analysis to determine whether eighteenth-century America understood the Second Amendment to include a right to bear guns outside the home,\" reasoning that \"[t]he Supreme Court has decided that the amendment confers a right to bear arms for self-defense, which is as important outside the home as inside.\" And the Seventh Circuit concluded that Illinois had not met its burden of showing more than a rational basis for how its \"uniquely sweeping ban\" justified its interest of increasing public safety.", "The First Circuit similarly concluded in Gould v. Morgan that the Second Amendment extends to carrying firearms in public, but, in contrast to the Ninth Circuit, ruled that such activity is not core to the Second Amendment. The court so concluded when reviewing\u2014and upholding\u2014a Massachusetts licensing scheme for carrying firearms in public, as it had been implemented by Boston and its suburb, Brookline. Massachusetts requires a license to carry a firearm in public. Local licensing authorities \"may issue\" a license, as relevant here, to persons with \"good reason to fear injury to the applicant or the applicant's property or for any other reason, including the carrying of firearms for use in sport or target practice only.\" ", "The litigants challenged Boston and Brookline's similar, respective policies that require an applicant to identify \"a need above and beyond a generalized desire to be safe\" in order to establish \"good reason to fear injury.\" Applicants who cannot so establish may still receive one of several types of restricted licenses that allow the license holder to carry a firearm when engaged in a specified activity, such as for employment, hunting, target practice, and sport. The First Circuit first concluded that the Second Amendment protects public carrying of firearms. The court reasoned, for example, that it would have been \"peculiar\" for the Supreme Court to describe the Second Amendment right to be \"most acute\" in the home if the right was limited to the home. Still, the First Circuit opined that the right to carry firearms in public is not a core Second Amendment right, again harking back to Heller 's pronouncement that \"the need for defense of self, family, and property is most acute\" thus \"elevat[ing] above all other interests the . . . defense of hearth and home.\" Because public carrying of firearms is not core Second Amendment activity, the First Circuit applied intermediate scrutiny to Boston and Brookline's licensing schemes. The court concluded that the fit between the governments' asserted public-safety interests and their \"good reason to fear injury\" requirement for an unrestricted license \"is close enough to pass intermediate scrutiny.\" The court reasoned that the localities, in \"[s]triving to strike a balance\" between protecting Second Amendment rights and advancing public safety, did not burden more conduct than reasonably necessary. For instance, the court recounted that the localities offer and grant various restricted licenses, and thus did not completely ban the right to carry firearms in public. In this vein, the First Circuit distinguished Boston and Brookline's licensing regimes from those struck down by the Ninth Circuit in Young and the Seventh Circuit in Moore ."], "subsections": []}, {"section_title": "\"Good Cause\" Requirements for Concealed Carry Licenses", "paragraphs": ["Some states and localities have enacted measures requiring a person seeking a concealed carry license to demonstrate \"good cause\" for needing one. The courts that have reviewed such measures have produced divergent rulings on the extent to which the ability to carry a concealed firearm is protected by the Second Amendment and what level of scrutiny should be applied to such laws. ", "For instance, in Kachalsky v. County of Westchester , the Second Circuit considered a challenge by persons who were denied an unrestricted concealed carry license under New York law. According to the state's concealed carry requirements, an applicant must demonstrate \"proper cause\" to obtain a concealed carry license\u2014a restriction that had been construed by the New York state courts to require an applicant seeking an unrestricted concealed carry license for self-defense purposes to \"demonstrate a special need for self-protection distinguishable from that of the general community or of persons engaged in the same profession.\" The plaintiffs in Kachalsky argued that the concealed carry law is unconstitutional by preventing them from \"carry[ing] weapons in public to defend themselves from dangerous confrontation.\" But the Second Circuit rejected that contention. Assuming that the Second Amendment applied and employing intermediate scrutiny on account of the gun restriction affecting activities outside the home, Kachalsky held that the New York statute was substantially related to the government's interests in public safety and crime prevention. And requiring persons to show an objective threat to personal safety before obtaining a concealed carry license, the court reasoned, is consistent with the right to bear arms, particularly given that \"there is no right to engage in self-defense with a firearm until the objective circumstances justify the use of deadly force.\"", "California has a somewhat similar law as that upheld in Kachalsky : An officer \"may\" issue a concealed carry licenses to applicants who have demonstrated good moral character and good cause for the license. But when two California counties' policies for determining good cause were challenged under the Second Amendment, the Ninth Circuit, sitting en banc in Peruta v. County of San Diego , as mentioned above, concluded that the Second Amendment \"does not extend to the carrying of concealed firearms in public by members of the general public.\" Accordingly, because concealed carry is not encompassed by the Second Amendment, the Ninth Circuit held that California's good-cause requirement withstood constitutional scrutiny.", "Breaking with the Second and Ninth Circuits, the D.C. Circuit in Wrenn v. District of Columbia held that the right of law-abiding citizens to carry a concealed firearm in public (i.e., \"concealed carry\") is a core component of the Second Amendment and struck down the District's good-cause concealed carry regime. The District of Columbia's framework regulating concealed carry authorized the Chief of the Metropolitan Police Department to issue a concealed carry license to a person who, as relevant here, has \"good reason to fear injury to his or her person or property\" or \"any other proper reason for carrying a pistol.\" Demonstrating the requisite fear \"at a minimum require[s] a showing of a special need for self-protection distinguishable from the general community as supported by evidence of specific threats or previous attacks that demonstrate a special danger to the applicant's life.\" Other \"proper reasons\" where a concealed carry license could be granted included employment requiring handling cash or other valuables to be transported by the applicant. In striking down the District's law, the D.C. Circuit first held that the core right in the Second Amendment for law-abiding citizens to keep and bear arms for self-defense extends beyond the home. But instead of choosing a level of scrutiny under which to analyze the law, the court ruled that the District's law effectively is a \"total ban\" on the exercise of that core right and thus is per se unconstitutional. In particular, the court reasoned that the District's law \"destroys the ordinarily situated citizen's\" self-defense needs by requiring law-abiding citizens to demonstrate a need for self-protection that is \"distinguishable\" from other law-abiding members of the community. Thus, the court concluded that it \"needn't pause to apply tiers of scrutiny, as if strong showings of public benefits could save this destruction of so many commonly situated D.C. residents' constitutional right to bear common arms for self-defense in any fashion at all.\" After the D.C. Circuit declined the District's request to rehear the case en banc, the District announced that it would not seek Supreme Court review, thus leaving the circuit split intact. "], "subsections": []}, {"section_title": "Storage Requirements", "paragraphs": ["For handguns to be kept in a residence in San Francisco, California the law requires that those handguns, when not on the person, be stored in a locked container or disabled with a trigger lock. The Ninth Circuit evaluated this requirement in Jackson v. City and County of San Francisco . The circuit court found that, although the law implicates the core of the Second Amendment right by imposing restrictions on the use of handguns in the home, unlike the former D.C. law evaluated in Heller requiring handguns to be made completely inoperable, the burden in San Francisco's law was not substantial, and thus intermediate scrutiny was warranted. The court appeared to distinguish San Francisco's law from D.C.'s former law by noting that firearms kept in modern gun safes may be quickly opened and retrieved for use. Moreover, the court noted that, although the law makes it more difficult for residents to use handguns for self-defense in the home by having to retrieve the firearm from a locked container or remove a trigger lock, the requirement still burdens only the manner in which persons exercise their Second Amendment right. Thus, the court concluded that a higher level of scrutiny was unwarranted.", "Under intermediate scrutiny, the Ninth Circuit concluded that there was a reasonable fit between the regulation and the city's substantial interest in reducing the number of gun-related injuries and deaths from unlocked handguns in the home. On appeal to the Supreme Court, the Court denied certiorari in Jackson over the dissent of Justices Thomas, who was joined by Justice Scalia. Justice Thomas described Jackson as \"in serious tension with Heller \" by prohibiting San Francisco residents from keeping their handguns \"'operable for the purpose of immediate self-defense,' when not carried on their person.\" Justice Thomas added that such a burden on a core Second Amendment right \"is significant,\" stating that \"nothing in our decision in Heller suggested that a law must rise to the level of the absolute prohibition at issue in that case to constitute a 'substantial burden' on the core of the Second Amendment right.\""], "subsections": []}, {"section_title": "Government Property", "paragraphs": ["Challenges brought against firearm prohibitions on federal property raise the question of whether such prohibitions fall into Heller's safe harbor for \"sensitive places.\" For instance, by regulation, firearms are prohibited on U.S. postal property. In Bonidy v. U.S. Postal Service, a Colorado resident with a concealed carry permit challenged the regulation as unconstitutional under the Second Amendment as applied to him because it forbade him from carrying his firearm into his local post office, as well as storing it in his car in the post office's parking lot while picking up his mail. The Tenth Circuit rejected his claims, concluding that the restrictions did not implicate the Second Amendment because they concerned locations that were on government property. In doing so, the court relied on the passage in Heller that carrying firearms in sensitive places like government buildings are presumptively lawful. According to the circuit court, that language applies \"with the same force\" to the parking lot adjacent to a government post office because \"the parking lot should be considered as a single unit with the postal building.\" Yet noting that the restriction's application to the parking lot question presented a closer question than the restriction's application to the postal building, the Tenth Circuit alternatively concluded that, even assuming that Second Amendment rights applied there, the regulation survived intermediate scrutiny. Ultimately, the Tenth Circuit concluded that the regulation was substantially related to the government's important interest in providing a safe environment for its employees and visitors. And despite the challenger's contention that the regulation is over-inclusive because his post office is open to the public at all times yet \"relatively unsecured,\" the court concluded that the U.S. Postal Service \"is not required to tailor its safety regulations to the unique circumstances of each customer, or to craft different rules for each of its more than 31,000 post offices, or to fashion one set of rules for parking lots and another for its buildings.\"", "In another case involving government property, a federal circuit court concluded that a former Department of the Interior regulation prohibiting persons from possessing a loaded weapon in vehicles on national park grounds was constitutional after applying intermediate scrutiny. The issue was brought to the Fourth Circuit in United States v. Masciandaro when a defendant convicted under the regulation contended that it violated his rights under the Second Amendment because he carried a handgun for self-defense when he slept in his car in national parks. The government argued that national parks are the kind of \"sensitive place[s]\" envisioned by Heller where firearm bans would be presumptively lawful. The Fourth Circuit declined to evaluate that argument, concluding, instead, that regardless of a national park's status as a \"sensitive place,\" the regulation survived intermediate scrutiny. Under that analysis, the court ruled that the government has a substantial interest in providing safety to national park visitors, and the regulation was a narrow prohibition that was \"reasonably adapted\" to the government's interest. Furthermore, the court reasoned that loaded firearms concealed in vehicles are more dangerous, as they can fire accidentally or provide an opportunity for an assailant to flee. "], "subsections": []}]}, {"section_title": "How May the Government Regulate Firearms Sales?", "paragraphs": [], "subsections": [{"section_title": "Interstate Acquisition of Firearms", "paragraphs": ["The Gun Control Act invokes Congress's power to regulate interstate commerce as a jurisdictional hook to regulate the sale and possession of firearms and ammunition. Accordingly, the statutory scheme for who may possess and sell firearms, and how and where they may be acquired and possessed, are tethered to interstate commerce. As for firearm sales, two Gun Control Act provisions generally forbid direct handgun sales by a federally licensed firearms dealer to anyone who is not a resident in the state where the holder of the federal firearms license (FFL) is located. 18 U.S.C. \u00a7\u00a0922(a)(3) bars anyone except a licensed firearms importer, manufacturer, dealer, or collector from transporting into or receiving in the state where he resides a firearm that was purchased or obtained in a different state; in other words, a non-licensed person is prohibited from transporting across state lines firearms acquired outside of his state of residence. Similarly, 18 U.S.C. \u00a7\u00a0922(b)(3) prohibits, subject to exception, federally licensed importers, manufacturers, dealers, or collectors from selling or delivering any firearm to a person who is not a resident of the state in which the licensee's business is located. Thus, under these two provisions, for someone to acquire a handgun from another state, that person must have the firearms transferred from an FFL holder in the other state to an FFL holder in the state of residence.", "When analyzing a facial challenge to \u00a7 922(a)(3), the Second Circuit in United States v. Decastro concluded that \u00a7 922(a)(3) only minimally burdens the ability of acquire a firearm and is therefore permissible. Notably, in reaching this conclusion the Second Circuit did not apply heightened scrutiny. Instead, the court looked to First Amendment jurisprudence, which allows for content-neutral time, place, or manner regulations of free speech. In the court's view, \"[b]y analogy, [a] law that regulates the availability of firearms is not a substantial burden on the right to keep and bear arms if adequate alternative remain for law-abiding citizens to acquire a firearm for self-defense.\" Accordingly, for the defendant's facial challenge to prevail, he would have to show that '\"no set of circumstances exist under which the [statute] would be valid, i.e., that the law is unconstitutional in all of its applications,' or at least that it lacks a 'plainly legitimate sweep.'\" And the defendant could not prevail because, the court concluded, the statute has a plainly legitimate sweep by helping states enforce their own gun laws. Nor would the federal prohibition on the interstate transfer of firearms be rendered unconstitutional in the event that some state laws governing firearm sales were found to be unconstitutional because the federal restriction contains no provision that facially \"sanctions, compels, or encourages states\" to burden the Second Amendment. ", "Later, the Fifth Circuit in Mance v. Sessions addressed a Second Amendment challenge to 18 U.S.C. \u00a7\u00a0922(b)(3) and concluded that the statute withstood strict scrutiny. In doing so, the court assumed without deciding that the Second Amendment protects against residency restrictions on the purchase of firearms and that strict scrutiny would be applied to any such restriction. The court concluded that the interstate sale restriction was narrowly tailored to prevent the circumvention of the many differing handgun laws throughout the nation. The court concluded that it would be unreasonable for the federal government to require licensed dealers to maintain up-to-date mastery of the handgun laws within all fifty states the District of Columbia\u2014a necessary requirement were the government to authorize the direct interstate sale of handguns from a licensed dealer to a non-licensed person. Further, Section 922(b)(3) is the least restrictive means of ensuring that state handgun laws are not evaded because, the court concluded, a qualified non-licensed person may have the desired out-of-state handgun transferred to an in-state licensed dealer after only a de minimis delay. "], "subsections": []}, {"section_title": "Commercial Sale of Firearms", "paragraphs": ["So far one federal court of appeals\u2014the Ninth Circuit\u2014has engaged in an in-depth analysis of whether the Second Amendment includes a right to sell commercial firearms. Overturning a 3-judge panel of the Ninth Circuit, an 11-judge en banc panel concluded in Teixeira v. County of Alameda that there is no independent Second Amendment right to sell firearms. At issue in Teixeira was an ordinance in Alameda County, California, requiring businesses seeking to sell firearms to obtain a permit. A permit would not be granted if, as relevant here, the business would be within 500 feet of a residentially zoned district. After Alameda County denied a permit on that ground to applicants seeking to open a retail firearms store, the applicants challenged the zoning ordinance under the Second Amendment. ", "The en banc Ninth Circuit concluded that \"the Second Amendment does not confer a freestanding right, wholly detached from any customer's ability to acquire firearms, upon a proprietor of a commercial establishment to sell firearms.\" The court reasoned that regulations on firearms sales fall into Heller 's safe harbor for \"presumptively lawful\" regulations \"imposing conditions and qualifications on the commercial sale of arms.\" Still, the court viewed Heller 's safe harbor language as \"sufficiently opaque\" to warrant a full textual and historical review of the Second Amendment's applicability to the commercial sale of arms. This review led the court to the same conclusion: The Second Amendment, as written, \"did not encompass a freestanding right to engage in firearms commerce divorced from the citizenry's ability to obtain and use guns.\"", "But the right to acquire firearms, the Ninth Circuit clarified, is protected. The court reasoned that \"the core Second Amendment right to keep and bear arms for self-defense wouldn't mean much without the ability to acquire arms.\" And though the court concluded that firearms dealers may assert that right on behalf of their potential customers, in this case, the permit applicants did not allege that the zoning permit denial interfered with the ability of Alameda County residents to acquire firearms. The court explained that evidence established that, without the gun store that the partners sought to open, \"Alameda County residents may freely purchase firearms within the County,\" given that County was already home to 10 gun stores, including one that stood 600 feet away from the proposed site of the new store. And, the court continued, \"gun buyers have no right to have a gun store in a particular location, at least as long as their access is not meaningfully constrained.\" Accordingly, the court declined to determine the precise scope of the right to acquire firearms and the appropriate level of review to analyze claims of a deprivation of that right.", "After Teixeira , the Ninth Circuit was tasked with evaluating under the Second Amendment a California law regulating the types of handguns that may be sold within the state. Several California residents challenged in Pena v. Lindley provisions of the state's Unsafe Handgun Act (UHA), which, subject to exception, limits the commercial sale of new handgun models to those that (1) stamp microscopically the handgun's make, model, and serial number onto each fired shell casing, (2) have a chamber load indicator, and (3) have a magazine disconnect mechanism.", "The Ninth Circuit assumed without deciding that the UHA provisions burdened protected Second Amendment conduct and applied intermediate scrutiny, reasoning that the restrictions would not burden core Second Amendment rights. The court explained, for instance, that there was no evidence that the new required features interfered with the functionality of any handguns and that \"all of the plaintiffs admit that they are able to buy an operable handgun suitable for self-defense\u2014just not the exact gun they want.\" Applying intermediate scrutiny, the court concluded that the requirements for a chamber load indicator and magazine disconnect mechanism reasonably fit the state's substantial public-safety interest in preventing accidental firearm discharges. Next, the court concluded that California had established a reasonable fit between the microstamping requirement, which limits the availability of untraceable bullets, and the state's substantial governmental interest in public safety and crime prevention. And in doing so, the court, invoking the reasoning in Teixeira , emphasized the law's application to the commercial sale of firearms, explaining that the ban applies only to manufacturers, importers, and dealers but does not punish individuals for possessing firearms made without the required features."], "subsections": []}, {"section_title": "Waiting Periods", "paragraphs": ["California has a 10-day waiting period for most firearm purchases, meaning that a firearm cannot be delivered to a prospective purchaser until 10 days have passed, even after the completion of the required background check. The Ninth Circuit upheld the law under the Second Amendment when it was challenged as applied to certain Californians who previously had been vetted to qualify to purchase and possess a firearm under California law (referred to by the court as \"subsequent purchasers\"). The court assumed that the California waiting-period laws fell within the Second Amendment's ambit and applied intermediate scrutiny, explaining that the law places only a small burden on the exercise of Second Amendment rights by requiring prospective purchasers to wait the incremental period between the completion of the background check and the end of the cooling-off period before acquiring a firearm. In applying intermediate scrutiny, the court concluded that there was a reasonable fit between the government's legitimate, stated objective of promoting safety and reducing gun violence, and applying the cooling-off period to subsequent purchasers. The court pointed to studies showing that \"a cooling-off period may prevent or reduce impulsive acts of gun violence or self-harm\" for all purchasers, including subsequent purchasers. Accordingly, the Ninth Circuit upheld California's waiting period as applied to subsequent purchasers."], "subsections": []}]}, {"section_title": "How May the Government Regulate Firearm Ownership Through Registration and Licensing Schemes?", "paragraphs": [], "subsections": [{"section_title": "License to Possess Firearms", "paragraphs": ["The Supreme Court is set to review during the October 2019 term whether New York City's (NYC's) \"premise license\" scheme passes muster under the Second Amendment. In New York State, it is a crime to possess or carry a handgun without a license. The license at issue in the lawsuit\u2014a \"premises license\"\u2014authorizes the license holder to possess a handgun in the licensee's home. ", "The NYC Police Commissioner, by delegation, issues handgun licenses to NYC residents. A NYC premise license authorizes the license holder to keep a handgun only at the address specified on the license. The licensee may remove the handgun from that address only for two purposes: (1) to transport the handgun to and from an authorized shooting range within the City \"[t]o maintain proficiency in the use of the handgun,\" and (2) to transport the handgun to and from areas designated by the New York State Fish and Wildlife Law for authorized hunting, so long as the permit holder has received a hunting amendment to the premises license. In both situations, the transported handgun must be unloaded, in a locked container, and held separately from any ammunition. ", "Three NYC residents (and the organizational plaintiff, New York State Rifle & Pistol Association) challenged the constitutionality of NYC's premises licensing scheme. Each plaintiff seeks to take a premises licensed handgun to shooting ranges outside of the City, and one plaintiff wants to take his handgun to a second home elsewhere in New York. As relevant here, the plaintiffs contend that the premises license restriction on transporting firearms outside of one's residence, with its limited exceptions, violates the Second Amendment. In particular, the plaintiffs argue that the City's premises license scheme deprives them of their Second Amendment right to self-defense in a home other than the NYC home attached to the license, and the corollary right to develop competency in the use of the licensed handgun. The District Court for the Southern District of New York found no Second Amendment violation, and the Second Circuit affirmed. ", "The Second Circuit assumed that the Second Amendment protects activity restricted by the premises license and determined the provision ought to be evaluated under intermediate scrutiny. In doing so, the court considered \"how close the law comes to the core of the Second Amendment right\" and \"the severity of the law's burden on that right.\" Citing Heller , the court opined that a statute implicates \"core\" Second Amendment activity when it interferes with the ability to protect in the home oneself and one's family and property. But the court concluded that the premises license law \"imposes no direct restriction at all on the right of the Plaintiffs, or of any other eligible New Yorker, to obtain a handgun and maintain it at their residences for self-protection,\" given that the law is designed to authorize handgun possession in one's home. Nor, the court added, does \"the City's regulatory scheme impose[] any undue burden, expense, or difficulty that impedes their ability to possess a handgun for self-protection\" because no evidence was presented showing that the law impacted a NYC resident's ability to acquire a second handgun for a second home, or that associated costs with doing so \"would be so high as to be exclusionary or prohibitive.\" Next, the court \"assume[d] that the ability to obtain firearms training and engage in firearm practice is sufficiently close to core Second Amendment concerns that regulations that sharply restrict that ability to obtain such training could impose substantial burdens on core Second Amendment rights.\" Given the existence of seven authorized firing ranges within City limits, however, the court concluded that the \"[p]laintiffs have sufficient opportunities to train with their firearms.\" ", "Finally, the Second Circuit concluded that the premises license scheme survived intermediate scrutiny. The City argued that \"limiting the geographic range in which firearms can be carried allows the City to promote public safety by better regulating and minimizing the instances of unlicensed transport of firearms on city streets.\" The court concluded that there was a substantial fit between the licensing regime and the City's important interests in public safety and crime prevention, and observed that plaintiffs presented a \"dearth of evidence\" to support their contention that the licensing regime imposed a substantial burden on their protected rights. ", "At this stage in the proceedings, the plaintiffs\u2014now the petitioners\u2014reiterate that NYC's premises license law imposes a severe burden on their Second Amendment right to keep a handgun in the home for self-defense and to enhance the safe and effective use of their handguns. Plaintiffs characterize as \"nonsensical\" the City's asserted public safety interest because, in their view, the City is proliferating \"both the number and the transportation of handguns within [C]ity limits\" in two ways: (1) by requiring handguns to be carried within the City (to shooting ranges) when they could be transported outside of the City, and (2) by requiring handguns to sit unattended in vacant homes when a City resident is at a second home. NYC objects, contending first that evidence \"explained the need to be able to effectively monitor and enforce the limits on the transport of handguns by individuals who have only a premises license, and not a carry license,\" which the City could not effectively do in the past when premises license holders could transport handguns to shooting ranges outside of NYC. NYC also argues that forcing NYC residents to leave handguns in vacant homes would create a public-safety risk only if premises license holders are not safely storing their handguns.", "Notably, to answer whether NYC's premise licensing scheme comports with the Second Amendment, the Supreme Court likely will have to determine how Second Amendment claims should be evaluated. As this report highlights, the lower courts have generally adopted a two-part framework for evaluating Second Amendment claims. However, some dissenting judges, including now-Justice Kavanaugh while he served on the D.C. Circuit, have advocated for a different approach\u2014one that would analyze the Second Amendment's text, history, and tradition, rather than apply a balancing test like strict or intermediate scrutiny. These dissenting opinions potentially could be invoked in further briefing in this case in an effort to persuade a majority of Justices to adopt a \"history and tradition\" approach to analyzing Second Amendment claims. Furthermore, the Court may also resolve the split among the circuit courts about what constitutes \"core\" Second Amendment activity."], "subsections": []}, {"section_title": "Firearm Registration Requirements", "paragraphs": ["Washington D.C.'s 2008 FRA (discussed above) also required firearm owners to register their firearms (limited to no more than one pistol in a 30-day period) and, in doing so, submit each pistol to be registered for ballistics identification. Applicants were required, among other things, to renew each registration in person every three years, have vision qualifying for a driver's license, submit to being fingerprinted and photographed, submit to a background check every six years, and attend a specified amount of firearms training or safety instruction. These requirements applied to long guns in addition to handguns. The new registration requirements were challenged as unconstitutional. The D.C. Circuit concluded that the \"mere registration\" of a handgun, alone, is a presumptively lawful, longstanding regulation \"deeply enough rooted in our history to support the presumption that a registration requirement is constitutional.\" But as applied to long guns, the court concluded, registration is novel. As for some of D.C.'s particular registration requirements listed above (as well as all of the requirements as applied to long guns), the court concluded that those must be evaluated under intermediate scrutiny to determine their constitutionality because they do not severely limit the exercise of Second Amendment rights. The D.C. Circuit concluded, however, that the District had not demonstrated a \"tight fit\" between the registration requirements and its asserted interests of protecting police officers and crime control. The court stated that the District must \"present some meaningful evidence, not mere assertions, to justify its predictive judgments\" about reducing firearms-related crimes, and the circuit court therefore remanded the case to the district court for the parties to have the opportunity to further develop the record.", "After this ruling, the District revised its firearms laws by enacting the Firearms Amendment Act of 2012 (FAA), removing some, but not all, of the contested registration requirements for handguns and keeping basic registration requirements for long guns, along with many other generally applicable requirements for persons registering firearms. Those requirements came before the D.C. Circuit again in a third round of Heller v. District of Columbia. First, the court concluded that the burden from the basic registration requirements as applied to long guns was de\u00a0minimis and thus did not implicate the Second Amendment. The other requirements were met with different results. The court ruled that the District's asserted interests in protecting police officers and promoting public safety were substantial, but the circuit court concluded that only the interest in promoting public safety reasonably fit with some, but not all, of the contested regulations. Those that reasonably fit the public-safety interest, in the court's view, included the requirements to appear in person and be photographed and fingerprinted; the $13 fee to register the firearm, along with the $35 fee for fingerprinting; and the requirement that applicants satisfy a safety and training course requirement. Those that did not survive scrutiny included (1)\u00a0the requirement to bring the firearm to registration; (2) the requirement to renew registration every three years; (3) the requirement to have knowledge of local gun laws; and (4) the prohibition on registering more than one pistol in a 30-day period. These divergent results were a product of the relative strength of the District's evidence, as determined by the D.C. Circuit, in attempting to show a fit between the District's asserted interests and the registration requirements. "], "subsections": []}, {"section_title": "Licensing Fees", "paragraphs": ["In Kwong v. Bloomberg , the Second Circuit reviewed a New York law requiring residents to obtain a license to possess a handgun, along with an implementing New York City measure that imposed a licensing fee of $340 for a three-year permit. The plaintiffs argued that the licensing fee imposed an unconstitutional burden on the exercise of their Second Amendment rights. In upholding the fee, the Second Circuit found it \"difficult to say that the licensing fee, which amounts to just over $100 per year, is anything more than a marginal, incremental or even appreciable restraint on one's Second Amendment's rights\"\u2014and thus would not implicate heightened scrutiny\u2014but refrained from so holding because, in its view, New York City's law also survived under intermediate scrutiny. The court reasoned that the regulation serves New York City's important interest in recouping the costs incurred in operating its licensing scheme, which is designed to promote public safety and reduce gun violence. "], "subsections": []}]}]}, {"section_title": "Conclusion", "paragraphs": ["Although the circuit courts of appeals have taken various approaches in evaluating Second Amendment challenges, the results tend to share similar outcomes. Accordingly, without further guidance\u2014for now\u2014from the Supreme Court, Congress may find the circuit court rulings instructive should the legislature seek to enact measures that would add or modify the categories of persons or weapons subject to firearm regulations. However, any new (and past) firearms measures will need to comport with whatever guidance, if any, the Supreme Court offers when it issues a ruling in New York State Rifle & Pistol Association, Inc. v. City of New York .", "Almost all federal courts reviewing Second Amendment challenges post- Heller have adopted a two-step approach to evaluating Second Amendment challenges. First, courts ask whether the regulated person, firearm, or place comes within the scope of the Second Amendment's protections. If not, the law does not run afoul of the Second Amendment. If, on the other hand, the challenged law does implicate the Second Amendment, courts must next decide the appropriate level of scrutiny\u2014rational basis, intermediate, or strict scrutiny\u2014to employ in determining whether the law passes constitutional muster. In deciding which level to choose, courts generally ask whether the challenged law burdens core Second Amendment conduct, like the ability to use a firearm for self-defense in the home. If a law substantially burdens core Second Amendment activity, courts typically will apply strict scrutiny. Otherwise, courts will apply intermediate scrutiny. In addition, sometimes circuit courts have taken a different approach by asking whether the challenged regulation is \"presumptively lawful\" as envisioned by Heller . Further, some courts have deemed rational-basis review as \"off the table\" based on the majority's comments in Heller. All told, most firearm laws have been reviewed under intermediate scrutiny, where the courts require a reasonable fit between the challenged law and a substantial or important governmental interest asserted as the basis for the law.", "Based on these various approaches, it appears that the government can justify a firearm regulation in a number of ways. First, at step one, the government can show that the regulation is a longstanding, presumptively lawful regulation. The government typically can do this by tying the regulation to those restrictions identified in Heller as presumptively lawful. In some cases, a challenged restriction might not be among those listed in Heller as presumptively lawful. However, given the Heller Court's admonishment that the list was not intended to be exhaustive, later courts have concluded that a challenged law is presumptively lawful by analogizing it to restrictions identified in Heller as presumptively permissible. In other cases, the government can show that a firearm regulation is presumptively lawful by proving that a restricted person is not a lawful, responsible citizen and thus outside the scope of the Second Amendment. Additionally, the government can make a historical showing that the firearm regulation is longstanding and thus lawful. ", "Second, if the inquiry proceeds to the second step, the government must show that the regulation is substantially related to an important governmental interest. The cases show that the success of a law under this inquiry will depend on the evidence that the government puts forth. The courts will not take mere assertions by the government but require meaningful evidence, like legislative findings, empirical evidence, and academic studies. Based on the courts' admonishments, future legislation to regulate firearms may face a greater chance of survival in the courts if that legislation evidences a clear fit between the government's interest and the regulation.", "Looking ahead, the seats of two of the Justices critical to the outcomes in Heller and McDonald , Justices Scalia and Kennedy, have been filled by Justices Gorsuch and Kavanaugh respectively. During Justice Gorsuch's tenure on the Tenth Circuit, he never had the opportunity to explore the scope of Heller and the Second Amendment. But since joining the Court, he joined Justice Thomas in dissenting from the denial of certiorari in Peruta v. County of San Diego (involving California's good-cause requirement for a concealed carry license), in which Justice Thomas opined that the Second Amendment's text, history, and jurisprudence \"strongly suggest\" that the Amendment includes the right to carry a firearm in public \"in some manner.\" Conversely, while on the D.C. Circuit, Justice Kavanaugh wrote at length about Heller 's meaning in his dissenting opinion in Heller v. District of Columbia ( Heller II ), a ruling that evaluated several provisions of a comprehensive firearm scheme that the District of Columbia had enacted in the wake of the Supreme Court's more-famous Heller opinion. Unlike the majority of federal appellate courts, he did not appear to believe that Second Amendment claims should be evaluated under a particular level of constitutional scrutiny. Rather, he would have considered the Second Amendment's text, history, and tradition. Accordingly, these two new arrivals on the Court may help shape post- Heller Second Amendment jurisprudence. Indeed, the Court's consideration of New York State Rifle & Pistol Association, Inc. this upcoming October 2019 term will likely clarify the framework that should be employed when evaluating Second Amendment claims. Further, the grant of certiorari appears to signal a willingness of the Court to further develop its Second Amendment jurisprudence."], "subsections": []}]}}
{"id": "R42035", "title": "Social Security Primer", "released_date": "2019-05-07T00:00:00", "summary": ["Social Security provides monthly cash benefits to retired or disabled workers and their family members, and to the family members of deceased workers. Among the beneficiary population, 83% are retired or disabled workers; family members of retired, disabled, or deceased workers make up the remainder. In March 2019, approximately 63.3 million beneficiaries received a total of $85.3 billion in benefit payments for the month; the average monthly benefit was $1,347.", "Workers become eligible for Social Security benefits for themselves and their family members by working in Social Security-covered employment. An estimated 93% of workers in paid employment or self-employment are covered, and their earnings are subject to the Social Security payroll tax. Employers and employees each pay 6.2% of covered earnings, up to an annual limit on taxable earnings ($132,900 in 2019).", "Among other requirements, a worker generally needs 40 earnings credits (10 years of covered employment) to be eligible for a Social Security retired-worker benefit. Fewer earnings credits are needed to qualify for a disabled-worker benefit; the number needed varies depending on the age of the worker when he or she became disabled. A worker's initial monthly benefit is based on his or her career-average earnings in covered employment. Social Security retired-worker benefits are first payable at the age of 62, subject to a permanent reduction for early retirement. Full (unreduced) retirement benefits are first payable at the full retirement age (FRA), which is increasing gradually from 65 to 67 under a law enacted by Congress in 1983. The FRA will reach 67 for persons born in 1960 or later (i.e., persons who become eligible for retirement benefits at the age of 62 in 2022 or later).", "In addition to payroll taxes, Social Security is financed by federal income taxes that some beneficiaries pay on a portion of their benefits and by interest income that is earned on the Treasury securities held by the Social Security trust funds. In 2018, the Social Security trust funds had receipts totaling $1,003 billion, expenditures totaling $1,000 billion, and accumulated assets (U.S. Treasury securities) totaling $2.9 trillion. The Social Security Board of Trustees (the trustees) notes, \"Over the program's 84-year history, it has collected roughly $21.9 trillion and paid out $19.0 trillion, leaving asset reserves of $2.9 trillion at the end of 2018 in its two trust funds.\" Projections by the trustees show that, based on the program's current financing and benefit structure, benefits scheduled under current law can be paid in full and on time until 2035 (under the intermediate set of assumptions). Projections also show that Social Security expenditures are estimated to exceed income by at least 20% over the next 75 years. Restoring long-range trust fund solvency and other policy objectives (such as increasing benefits for certain beneficiaries) have made Social Security reform an issue of ongoing congressional interest.", "This report provides an overview of Social Security financing and benefits under current law. Specifically, the report covers the origins and a brief history of the program; Social Security financing and the status of the trust funds; how Social Security benefits are computed; the types of Social Security benefits available to workers and their family members; the basic eligibility requirements for each type of benefit; the scheduled increase in the Social Security retirement age; and the federal income taxation of Social Security benefits."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Social Security is a self-financing program that provides monthly cash benefits to retired or disabled workers and their family members and to the family members of deceased workers. As of March 2019, there were approximately 63.3 million Social Security beneficiaries. Of those, 47.2 million (74.6%) were retired workers and family members, 10.1 million (16.0%) were disabled workers and family members, and 6.0 million (9.4%) were survivors of deceased workers.", "Social Security is financed primarily by payroll taxes paid by covered workers and their employers. An estimated 176 million workers are covered by Social Security. Employers and employees each pay 6.2% of covered earnings, up to an annual limit; self-employed individuals pay 12.4% of net self-employment income, up to an annual limit. The annual limit on taxable earnings is $132,900 in 2019. Social Security is also credited with tax revenues from the federal income taxes paid by some beneficiaries on a portion of their benefits. In addition, Social Security receives interest income from Social Security trust fund investments. Social Security income and outgo are accounted for in two separate trust funds authorized under Title II of the Social Security Act: the Federal Old-Age and Survivors Insurance (OASI) Trust Fund and the Federal Disability Insurance (DI) Trust Fund. This report refers to the separate OASI and DI trust funds on a combined basis as the Social Security trust funds. In 2018, the combined Social Security trust funds (OASDI) had total receipts of $1,003 billion, total expenditures of $1,000 billion, and accumulated holdings (assets) of more than $2.9 trillion."], "subsections": []}, {"section_title": "Origins and Brief History of Social Security", "paragraphs": ["Title II of the original Social Security Act of 1935 established a national plan designed to provide economic security for the nation's workers. The system of Old-Age Insurance it created provided benefits to individuals who were aged 65 or older and who had \"earned\" retirement benefits through work in jobs covered by the system. Benefits were to be financed by a payroll tax paid by employees and their employers on wages up to a base amount ($3,000 per year at the time). Monthly benefits were to be based on cumulative wages in covered jobs. The law related the amount of the benefit to the amount of a worker's wages covered by the program, but the formula was progressive. That is, the formula was weighted to replace a larger share of the earnings of low-wage workers compared with those of higher-wage workers. Before the Old-Age Insurance program was in full operation, the Social Security Amendments of 1939 shifted the emphasis of Social Security from protection of the individual worker to protection of the family by extending monthly cash benefits to the dependents and survivors of workers. The program now provided OASI.", "During the decades that followed, changes to the Social Security program were mainly ones of expansion. Coverage of workers became nearly universal (the largest groups remaining outside the system are state and local government employees who have not chosen to join the system and federal employees who were hired before 1984). In 1956, Congress established the Disability Insurance (DI) program. Over the years, there were increases in the payroll tax rate, which increased from 2.0% of pay (1.0% each for employees and employers) in the 1937-1949 period to its current level of 12.4%. In addition, there were increases in the amount of wages subject to the payroll tax (the taxable wage base), which increased from $3,000 in the 1937-1950 period to $132,900 in 2019. The types of individuals eligible for benefits were expanded over the years, and benefit levels were increased periodically. In 1972, legislation provided for automatic cost-of-living adjustments, starting in 1975, indexed to the change in consumer prices as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) published by the Department of Labor's Bureau of Labor Statistics.", "Beginning in the late 1970s, legislative action regarding Social Security became more concentrated on solving persistent financing problems. Legislation enacted in 1977 raised taxes and curtailed future benefit growth in an effort to shore up the system's finances. Still, in 1982, the OASI trust fund needed to borrow assets from the DI trust fund and the Medicare Hospital Insurance (HI) trust fund (borrowed amounts were fully repaid by 1986). In 1983, Congress passed additional major legislation that was projected to restore solvency to the Social Security system on average over the 75-year projection period at that time.", "Current projections by the Social Security Board of Trustees show that the Social Security system has a long-range funding shortfall, and that the system will operate with annual cash-flow deficits each year through the end of the 75-year projection period (2093). These projections, and other factors, have focused attention on potential Social Security program changes."], "subsections": []}, {"section_title": "Social Security Financing", "paragraphs": ["The Social Security program is financed primarily by revenues from Federal Insurance Contributions Act (FICA) taxes and Self-Employment Contributions Act (SECA) taxes. FICA taxes are paid by both employers and employees, however, it is employers who remit the taxes to the U.S. Treasury. Employers remit FICA taxes on a regular basis throughout the year (e.g., weekly, monthly, quarterly, or annually), depending on the employer's level of total employment taxes (Social Security, Medicare, and federal individual income tax withholding).", "The FICA tax rate of 7.65% each for employers and employees has two components: 6.20% for Social Security and 1.45% for Medicare HI. Under current law, employers and employees each pay 6.2% of covered wages, up to the taxable wage base, in Social Security payroll taxes. The SECA tax rate is 15.3% for self-employed individuals, with 12.4% for Social Security and 2.9% for Medicare HI. Self-employed individuals pay 12.4% of net self-employment income, up to the taxable wage base, in Social Security payroll taxes. One-half of the SECA taxes are allowed as a deduction for federal income tax purposes. SECA taxes are normally paid once a year as part of filing an annual individual income tax return.", "In addition to Social Security payroll taxes, the Social Security program has two other sources of income. First, certain Social Security beneficiaries must include a portion of Social Security benefits in taxable income for the federal income tax, and the Social Security program receives part of those federal tax revenues. Second, the Social Security program receives interest from the U.S. Treasury on its investments in special U.S. government obligations.", "As the Managing Trustee of the Social Security trust funds, the Secretary of the Treasury is required by law to invest Social Security revenues in interest-bearing federal government securities held by the trust funds. The revenues exchanged for the federal government securities are deposited into the general fund of the U.S. Treasury and are indistinguishable from revenues in the general fund that come from other sources. Because the assets held by the trust funds are federal government securities, the trust fund balance represents the amount of money owed to the Social Security trust funds by the general fund of the U.S. Treasury. Funds needed to pay Social Security benefits and administrative expenses come from the redemption of federal government securities held by the trust funds."], "subsections": [{"section_title": "Taxation of Social Security Benefits", "paragraphs": ["Since 1984, Social Security benefits have been subject to the federal income tax. As part of the Social Security Amendments of 1983 ( P.L. 98-21 ), Congress made up to 50% of a person's Social Security benefits subject to the federal income tax if he or she has provisional income above a specified threshold ($25,000 for an individual tax filer; $32,000 for a married couple filing jointly). Provisional income is defined as total income from all sources recognized for tax purposes plus certain otherwise tax-exempt income, including half of Social Security benefits. Revenues from this \"first tier\" of taxation are credited to the Social Security trust funds. In 2018, the trust funds received $35.0 billion (3.5% of total trust fund income) from this provision.", "Next, as part of the Omnibus Budget Reconciliation Act of 1993 ( P.L. 103-66 ), Congress made up to 85% of a person's Social Security benefits subject to the federal income tax if he or she has provisional income above a second higher threshold ($34,000 for an individual tax filer; $44,000 for a married couple filing jointly). Revenues from this \"second tier\" of taxation are credited to the Medicare HI trust fund. In 2018, the HI trust fund received $24.2 billion (7.9% of total trust fund income) from this provision.", "Under current law, the income thresholds are fixed (i.e., they are not adjusted for inflation or wage growth). Over time an increasing number of beneficiaries will be subject to the federal income tax on benefits. The Congressional Budget Office (CBO) estimates that about half of current Social Security beneficiaries are affected by the taxation of benefits."], "subsections": []}]}, {"section_title": "Status of the Social Security Trust Funds", "paragraphs": ["Projections by the Social Security Board of Trustees (the trustees) show that Social Security expenditures will exceed tax revenues each year through the end of the 75-year valuation period (2093). That is, Social Security will operate with annual cash-flow deficits . With interest income taken into account, Social Security maintained a total surplus (tax revenues plus interest income exceeded expenditures) from 2010 through 2018. Total revenues in 2019 are projected to exceed total costs by $1 billion; the last instance of costs exceeding revenues was in 1982. The trustees project that the trust funds will have a positive balance (asset reserves) until 2035, allowing Social Security benefits scheduled under current law to be paid in full and on time until then. ", "Over the long run, the trustees project that the 75-year actuarial deficit for the trust funds is equal to 2.78% of taxable payroll. Stated a different way, the trustees project that Social Security expenditures will exceed income by at least 20% over the next 75 years. For illustration purposes, the trustees point out that the following cha nges would be needed for the trust funds to remain solvent throughout the 75-year projection period: (1) an immediate 2.70-percentage-point increase in the payroll tax rate (from 12.40% to 15.10%); or (2) an immediate 17% reduction in benefits for all current and future beneficiaries; or (3) some combination of these approaches. Social Security's projected long-range funding shortfall is attributed primarily to demographic factors (such as lower fertility rates and increasing life expectancy) as well as program design features (such as a wage-indexed benefit formula and annual COLAs).", "At the end of 2018, the trust funds were credited with asset reserves of more than $2.9 trillion. With the projection that the program's total costs will begin to exceed total revenue in 2020, the trustees project the trust funds to peak at the end of 2019. Beginning in 2020, the trustees project that the trust fund balance will begin to decline, until the asset reserves are depleted in 2035. The trust fund ratio can be used to put the size of the trust fund balance into perspective. This ratio represents trust fund assets at the beginning of a year as a percentage of cost for the year. In 2019, for example, the projected trust fund ratio is 273%. (Assets held by the trust funds at the beginning of 2019 are projected to be 2.73 times greater than the cost of the program in 2019.) The trustees project that the trust fund ratio will decline to 130% in 2028 and reach zero at the point of trust fund reserve depletion in 2035.", "After depletion of trust fund reserves, the program would continue to operate with incoming Social Security receipts; those receipts are projected to be sufficient to pay 80% of benefits scheduled under current law in 2035, declining to 75% of scheduled benefits in 2093. Under current law, Social Security does not have authority to borrow from the general fund of the Treasury. Therefore, the program cannot draw upon general revenues to make up the difference between incoming receipts and benefit payments when the program no longer has asset reserves to draw upon. The Social Security Act does not specify what would happen to the payment of benefits scheduled under current law in the event of Social Security trust fund depletion. Two possible scenarios are (1) the payment of full monthly benefits on a delayed basis or (2) the payment of partial (reduced) monthly benefits on time. "], "subsections": [{"section_title": "Social Security Cash-Flow Surpluses and Deficits", "paragraphs": ["From 1984 to 2009, Social Security generated surplus tax revenues (i.e., the program operated with annual cash-flow surpluses). Surplus tax revenues and interest income credited to the trust funds in the form of federal government securities contributed to a growing trust fund balance. Beginning in 2010, however, the program began operating with annual cash-flow deficits, and the trustees project that Social Security tax revenues will remain below program expenditures each year throughout the 75-year projection period (2019-2093). ", "When Social Security operates with a cash-flow deficit, the trust funds redeem more federal securities than the amount of current Social Security tax revenues, relying in part on trust fund asset reserves to pay benefits and administrative expenses. Because the federal securities held by the trust funds are redeemed with general revenues, this results in increased spending for Social Security from the general fund. When there are no surplus governmental receipts, the federal government must raise the necessary funds by increasing taxes or other income; reducing other spending; borrowing from the public; or some combination of these measures. ", "With respect to the program's reliance on general revenues, it is important to note that Social Security does not have authority to borrow from the general fund of the Treasury under current law. Rather, the program relies on revenues collected for Social Security purposes in previous years that were used by the federal government at the time for other (non-Social Security) spending needs and interest income earned on trust fund investments. The program draws on those previously collected Social Security tax revenues and interest income (trust fund asset reserves) when current Social Security tax revenues fall below current program expenditures."], "subsections": []}]}, {"section_title": "Social Security Reform Debate", "paragraphs": ["Social Security reform is an issue of ongoing interest to lawmakers. For some advocates of reform, the focus is on restoring long-range solvency to the trust funds. For others, the focus is on constraining the projected growth in spending for entitlement programs\u2014including Social Security, Medicare, and Medicaid\u2014in the context of broader efforts to reduce growing federal budget deficits. The Social Security reform debate reflects other policy objectives as well, such as improving the adequacy and equity of benefits, and different philosophical views about the role of the Social Security program and the federal government in providing retirement income. Over the years, the debate has reflected two fundamentally different approaches to reform. The traditional approach would maintain the current structure of the program (i.e., a defined benefit system funded on a pay-as-you-go basis) by making relatively modest changes, such as an increase in the retirement age or an increase in the taxable wage base. In general, the goal of this approach is to preserve the social insurance nature of the program. In contrast, the personal savings and investment approach would redesign the 1930s-era program to create a prefunded system in which benefits would be based partially or entirely on personal savings and investments. More recently, the Social Security debate has reflected a shift in focus among some lawmakers away from efforts to scale back the program toward proposals that would expand Social Security benefits to address concerns about the adequacy of benefits and, more broadly, retirement income security."], "subsections": []}, {"section_title": "Social Security Benefit Rules", "paragraphs": ["Social Security provides monthly cash benefits to retired or disabled workers and to the family members of retired, disabled, or deceased workers. Benefits are designed to replace part of a worker's earnings. As such, a worker's benefit is based on his or her career-average earnings in covered employment (i.e., earnings up to the annual taxable limit) and a progressive benefit formula that is intended to provide adequate benefit levels for workers with low career-average earnings. This section explains how the worker's primary insurance amount (PIA) is computed. The worker's PIA is his or her monthly benefit amount payable at the full retirement age (FRA); it also determines the amount of monthly benefits payable to family members based on the worker's record. This section also covers the basic eligibility requirements for different types of Social Security benefits."], "subsections": [{"section_title": "Full Retirement Age", "paragraphs": ["Social Security retirement benefits are first payable to retired workers at the age of 62, subject to a permanent reduction for \"early retirement.\" The age at which full (unreduced) retirement benefits are first payable is the FRA. For most of the program's history, the FRA was 65. As part of the Social Security Amendments of 1983 ( P.L. 98-21 ), Congress raised the FRA from 65 to 67. The 1983 law established a gradual phase-in from 65 to 67 over a 22-year period (2000 to 2022).", "Specifically, workers born in 1938 or later are affected by the increase in the FRA (i.e., workers who become eligible for retirement benefits at age 62 in 2000 or later). The increase in the FRA will be fully phased in for workers born in 1960 or later (i.e., workers who become eligible for retirement benefits at age 62 in 2022 or later). Table 1 shows the scheduled increase in the FRA being phased in under current law."], "subsections": []}, {"section_title": "Computation of a Social Security Retired-Worker Benefit", "paragraphs": ["Among other requirements, a worker generally needs 40 earnings credits (10 years of Social Security-covered employment) to be eligible for a Social Security retired-worker benefit. A worker's initial monthly benefit is based on his or her highest 35 years of earnings in covered employment, which are indexed to historical wage growth. The highest 35 years of indexed earnings are summed, and the total is divided by 420 months (35 years x 12 months). The resulting amount is the worker's average indexed monthly earnings (AIME). If a worker has fewer than 35 years of earnings in covered employment, years with no earnings are entered as zeroes in the computation, resulting in a lower AIME and therefore a lower monthly benefit.", "The worker's PIA is determined by applying a formula to the AIME as shown in Table 2 . 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. Three different replacement factors\u201490%, 32%, and 15%\u2014are applied to the three brackets of AIME. The three products derived from multiplying each replacement factor and bracket of AIME are added together. For workers who become eligible for retirement benefits (i.e., those who attain age 62), become disabled, or die in 2019, the PIA is determined as shown in the example in Table 2 . ", "Generally, a worker's PIA increases each year from the year of eligibility (at age 62) to the year of benefit receipt based on the Social Security COLA. In addition, Social Security benefits already in payment generally increase each year based on the COLA."], "subsections": [{"section_title": "Adjustments to Benefits Claimed Before or After the FRA", "paragraphs": ["A worker's initial monthly benefit is equal to his or her PIA if he or she begins receiving benefits at the FRA. A worker's initial monthly benefit will be less than his or her PIA if he or she begins receiving benefits before the FRA, and it will be greater than his or her PIA if he or she begins receiving benefits after the FRA.", "A retired-worker benefit is payable as early as the age of 62, however, the benefit will be permanently reduced to reflect the longer expected period of benefit receipt. Retired-worker benefits are reduced by five-ninths of 1% (or 0.0056) of the worker's PIA for each month of entitlement before the FRA up to 36 months, for a reduction of about 6.7% per year. For each month of benefit entitlement before the FRA in excess of 36 months, retirement benefits are reduced by five-twelfths of 1% (or 0.0042), for a reduction of 5% per year. ", "Workers who delay filing for benefits until after the FRA receive a delayed retirement credit (DRC). The DRC applies to the period that begins with the month the worker attains the FRA and ends with the month before he or she attains the age of 70. The DRC is 8% per year for workers\u00a0born in 1943 or later (i.e., workers who attain the age of 62 in 2005 or later).", "The actuarial adjustment to benefits based on claiming age is intended to provide the worker with roughly the same total lifetime benefits, regardless of the age at which he or she begins receiving benefits (based on average life expectancy). Therefore, if a worker claims benefits before the FRA, his or her monthly benefit is reduced to take into account the longer expected period of benefit receipt. For a worker whose FRA is 66, the decision to claim benefits at the age of 62 results in a 25% reduction in his or her PIA. For a worker whose FRA is 67, the decision to claim benefits at the age of 62 results in a 30% reduction in his or her PIA. Similarly, if a worker claims benefits after the FRA, his or her monthly benefit is increased to take into account the shorter expected period of benefit receipt."], "subsections": []}, {"section_title": "Other Adjustments to Benefits (Including GPO and WEP)", "paragraphs": ["Other benefit adjustments may apply, such as those related to simultaneous entitlement to more than one type of Social Security benefit. Under the dual entitlement rule, for example, a Social Security spousal benefit is reduced if the person also receives a Social Security benefit based on his or her own work in covered employment (i.e., a retired-worker or disabled-worker benefit). Similarly, under the government pension offset (GPO), a Social Security spousal benefit is reduced if the person also receives a pension based on his or her own work in non covered employment.", "Under the windfall elimination provision (WEP), a modified benefit formula is used to compute a worker's Social Security benefit when he or she also receives a pension from non covered employment. The modified formula results in a lower initial monthly benefit compared to the regular benefit formula. Under the retirement earnings test (RET), a person's Social Security benefit is subject to withholding when he or she is below the FRA and has wage or salary income above an annual dollar threshold (i.e., above an annual exempt amount). Under the Social Security maximum family benefit rules, benefits payable to each family member (with the exception of the worker) are subject to reduction when total benefits payable to the family based on the worker's record exceed a specified limit."], "subsections": []}]}, {"section_title": "Disabled-Worker Benefit", "paragraphs": ["For Social Security disability benefits, \"disability\" is defined as the inability to engage in substantial gainful activity (SGA) by reason of a medically determinable physical or mental impairment that is expected to last for at least 12 months or result in death. Generally, the worker must be unable to do any kind of substantial work that exists in the national economy, taking into account age, education, and work experience. As noted previously, a worker generally needs 40 earnings credits to qualify for a Social Security retired-worker benefit. A worker under the age of 62 can qualify for a Social Security disabled-worker benefit with fewer earnings credits. The number of earnings credits needed varies, depending on the age of the worker when he or she became disabled; however, a minimum of six earnings credits is needed. Similarly, while the worker's highest 35 years of earnings are used to compute a retired-worker benefit, fewer years of earnings may be used to compute a disabled-worker benefit. Because a disabled worker's benefit is not reduced for entitlement before the FRA, a disabled worker's benefit is equal to his or her PIA."], "subsections": []}, {"section_title": "Benefits for the Worker's Family Members", "paragraphs": ["Although the majority of Social Security beneficiaries are retired or disabled workers, nearly 10.7 million beneficiaries (16.9% of the total) are the dependents and survivors of retired, disabled, or deceased workers.", "Social Security benefits are payable to the spouse, divorced spouse, or child of a retired or disabled worker. Benefits are also payable to the widow(er), divorced widow(er), child, or parent of a deceased worker. In addition, mother's or father's benefits are payable to a young widow(er) who is caring for a deceased worker's child; the child must be under the age of 16 or disabled, and the child must be entitled to benefits. Benefits payable to family members are equal to a specified percentage of the worker's PIA, subject to a maximum family benefit. For example, the spouse of a retired worker may receive up to 50% of the retired worker's PIA, and the widow(er) of a deceased worker may receive up to 100% of the deceased worker's PIA. Benefits payable to family members may be subject to adjustments based on the person's age at entitlement, receipt of a Social Security benefit based on his or her own work record, and other factors. ", " Table 3 provides a summary of Social Security benefits payable to the family members of a retired, disabled, or deceased worker. It includes the basic eligibility requirements and basic benefit amounts before any applicable adjustments (such as for the maximum family benefit)."], "subsections": [{"section_title": "Maximum Family Benefit", "paragraphs": ["The total amount of Social Security benefits payable to a family based on a retired, disabled, or deceased worker's record is capped by the maximum family benefit. The family maximum cannot be exceeded, regardless of the number of beneficiaries entitled to benefits on the worker's record. If the sum of all benefits payable on the worker's record exceeds the family maximum, the benefit payable to each dependent or survivor is reduced in equal proportion to bring the total amount of benefits payable to the family within the limit. In the case of a retired or deceased worker , the maximum family benefit is determined by a formula and varies from 150% to 188% of the worker's PIA. For the family of a worker who attains the age of 62 in 2019, or dies in 2019 before attaining the age of 62, the total amount of benefits payable to the family is limited to", "150% of the first $1,184 of the worker's PIA, plus 272% of the worker's PIA over $1,184 and through $1,708, plus 134% of the worker's PIA over $1,708 and through $2,228, plus 175% of the worker's PIA over $2,228.", "The dollar amounts in the maximum family benefit formula ($1,184 / $1,708 / $2,228 in 2019) are indexed to average wage growth, as in the regular benefit formula. In the case of a disabled worker , the maximum family benefit is equal to 85% of the worker's AIME; however, the family maximum cannot be less than 100% or more than 150% of the worker's PIA. "], "subsections": []}]}]}, {"section_title": "Social Security Beneficiaries", "paragraphs": ["In March 2019, there were approximately 63.3 million Social Security beneficiaries. As shown in Table 4 , retired-worker and disabled-worker beneficiaries accounted for 83.1% of the beneficiary population. The largest single category of beneficiaries was retired workers (69.7%), with an average monthly benefit of $1,467. The second-largest category was disabled workers (13.4%), with an average monthly benefit of $1,235. Family members of retired, disabled, or deceased workers accounted for the remainder of the beneficiary population (16.9%). Table 4 provides a breakdown of the Social Security beneficiary population in March 2019."], "subsections": []}]}}
{"id": "97-1011", "title": "Salaries of Members of Congress: Recent Actions and Historical Tables", "released_date": "2019-05-17T00:00:00", "summary": ["Congress is required by Article I, Section 6, of the Constitution to determine its own pay. In the past, Congress periodically enacted specific legislation to alter its pay; the last time this occurred affected pay in 1991. More recently, pay has been determined pursuant to laws establishing formulas for automatic adjustments.", "The Ethics Reform Act of 1989 established the current automatic annual adjustment formula, which is based on changes in private sector wages as measured by the Employment Cost Index (ECI). The adjustment is automatic unless denied statutorily, although the percentage may not exceed the percentage base pay increase for General Schedule (GS) employees. Member pay has since been frozen in two ways: (1) directly, through legislation that freezes salaries for Members but not for other federal employees, and (2) indirectly, through broader pay freeze legislation that covers Members and other specified categories of federal employees.", "Members of Congress last received a pay adjustment in January 2009. At that time, their salary was increased 2.8%, to $174,000. A provision in P.L. 111-8 prohibited any pay adjustment for 2010. Under the pay adjustment formula, Members were originally scheduled to receive an adjustment in January 2010 of 2.1%, although this would have been revised downward automatically to 1.5% to match the GS base pay adjustment. Members next were scheduled to receive a 0.9% pay adjustment in 2011. The pay adjustment was prohibited by P.L. 111-165. Additionally, P.L. 111-322 prevented any adjustment in GS base pay before December 31, 2012. Since the percentage adjustment in Member pay may not exceed the percentage adjustment in the base pay of GS employees, Member pay was also frozen during this period. If not limited by GS pay, Member pay could have been adjusted by 1.3% in 2012. The ECI formula established a maximum potential pay adjustment in January 2013 of 1.1%. P.L. 112-175 extended the freeze on GS pay rates for the duration of this continuing resolution, which also extended the Member freeze since the percentage adjustment in Member pay may not exceed the percentage adjustment in GS base pay. Subsequently, Member pay for 2013 was further frozen in P.L. 112-240. The maximum potential 2014 pay adjustment of 1.2%, or $2,100, was denied by P.L. 113-46. The maximum potential January 2015 Member pay adjustment was 1.6%, or $2,800. President Obama proposed a 1.0% increase in the base pay of GS employees, which would automatically have limited any Member pay adjustment to 1.0%. P.L. 113-235 contained a provision prohibiting any Member pay adjustment. The maximum potential January 2016 pay adjustment of 1.7%, or $3,000, would have been limited to 1.0%, or $1,700, due to the GS base pay increase. Member pay for 2016 was frozen by P.L. 114-113. The maximum potential January 2017 pay adjustment of 1.6%, or $2,800, would have been limited to 1.0%, or $1,700, due to the GS base pay increase. Member pay for 2017 was frozen by P.L. 114-254. The maximum potential January 2018 pay adjustment of 1.8%, or $3,100, was automatically limited to 1.4%, or $2,400, before being frozen by P.L. 115-141. The maximum potential January 2019 pay adjustment of 2.3%, or $4,000, was automatically limited to 1.4%, or $2,400, before being frozen at the 2009 level by P.L. 115-244. The maximum potential January 2020 pay adjustment is 2.6%, or $4,500.", "If Members of Congress had received every adjustment prescribed by the ECI formula since 1992, and the 2 U.S.C. \u00a74501 limitation regarding the percentage base pay increase for GS employees remained unchanged, the 2019 salary would be $210,900. When adjusted for inflation, Member salaries have decreased 15% since the last pay adjustment in 2009.", "Both the automatic annual adjustments and funding for Members' salaries are provided pursuant to other laws (2 U.S.C. \u00a74501)\u2014not the annual appropriations bills\u2014and a provision prohibiting a scheduled adjustment could be included in any bill, or introduced as a separate bill."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Member Pay: Constitutional Background, Source of Appropriations, and Current Rates", "paragraphs": ["Article I, Section 6, of the U.S. Constitution, states that the compensation of Members of Congress shall be \"ascertained by law, and paid out of the Treasury of the United States.\" Additionally, the Twenty-Seventh Amendment to the Constitution states, \"No law, varying the compensation for the services of the Senators and Representatives, shall take effect, until an election of Representatives shall have intervened.\" This amendment was submitted to the states on September 25, 1789, along with 11 other proposed amendments, 10 of which were ratified and became the Bill of Rights. It was not ratified until May 7, 1992.", "Since FY1983, Member salaries have been funded in a permanent appropriations account. ", "The most recent pay adjustment for Members of Congress was in January 2009. Since then, the compensation for most Senators, Representatives, Delegates, and the Resident Commissioner from Puerto Rico has been $174,000. The only exceptions include the Speaker of the House ($223,500) and the President pro tempore of the Senate and the majority and minority leaders in the House and Senate ($193,400). "], "subsections": [{"section_title": "Selected CRS Products", "paragraphs": ["This report provides historical tables on the rate of pay for Members of Congress since 1789; details on enacted legislation with language prohibiting the automatic annual pay adjustment since the most recent adjustment; the adjustments projected by the Ethics Reform Act as compared with actual adjustments in Member pay; and Member pay in constant and current dollars since 1992.", "Additional CRS products also address pay and benefits for Members of Congress:", "For information on actions taken each year since the establishment of the Ethics Reform Act adjustment procedure, see CRS Report 97-615, Salaries of Members of Congress: Congressional Votes, 1990-2018 , by Ida A. Brudnick. Members of Congress only receive salaries during the terms for which they are elected. Following their service, former Members of Congress may be eligible for retirement benefits, which are discussed in CRS Report RL30631, Retirement Benefits for Members of Congress , by Katelin P. Isaacs. For information on health insurance options available to Members, see CRS Report R43194, Health Benefits for Members of Congress and Designated Congressional Staff: In Brief , by Ada S. Cornell. For an overview of compensation, benefits, allowances, and selected limitations, see CRS Report RL30064, Congressional Salaries and Allowances: In Brief , by Ida A. Brudnick."], "subsections": []}]}, {"section_title": "Methods for Member Pay Adjustment", "paragraphs": ["There are three basic ways to adjust Member pay. ", "Specific legislation was enacted to adjust Member pay prior to 1968. It has been used periodically since, most recently affecting pay for 1991.", "The second method by which Member pay can be increased is pursuant to recommendations from the President, based on those made by a quadrennial salary commission. In 1967, Congress established the Commission on Executive, Legislative, and Judicial Salaries to recommend salary increases for top-level federal officials (P.L. 90-206). Three times (in 1969, 1977, and 1987) Congress received pay increases made under this procedure; on three occasions it did not. Effective with passage of the Ethics Reform Act of 1989 ( P.L. 101-194 ), the commission ceased to exist. Its authority was assumed by the Citizens' Commission on Public Service and Compensation. Although the first commission under the 1989 act was to have convened in 1993, it did not meet.", "The third method by which the salary of Members can be changed is by annual adjustments. Prior to 1990, the pay of Members, and other top-level federal officials, was tied to the annual comparability increases provided to General Schedule (GS) federal employees. This procedure was established in 1975 ( P.L. 94-82 ). Such increases were recommended by the President, subject to congressional acceptance, disapproval, or modification. Congress accepted 5 such increases for itself\u2014in 1975, 1979 (partial), 1984, 1985, and 1987\u2014and declined 10 (1976, 1977, 1978, 1980, 1981, 1982, 1983, 1986, 1988, and 1989).", "The Ethics Reform Act of 1989 changed the method by which the annual adjustment is determined for Members and other senior officials. This procedure employs a formula based on changes in private sector wages and salaries as measured by the Employment Cost Index (ECI). The annual adjustment automatically goes into effect unless", "1. Congress statutorily prohibits the adjustment; 2. Congress statutorily revises the adjustment; or 3. The annual base pay adjustment of GS employees is established at a rate less than the scheduled adjustment for Members, in which case Members would be paid the lower rate. ", "Under this revised method, annual adjustments were", "accepted 13 times (adjustments scheduled for January 1991, 1992, 1993, 1998, 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2008, and 2009) and denied 16 times (adjustments scheduled for January 1994, 1995, 1996, 1997, 1999, 2007, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, and 2019). ", "Although discussion of the Member pay adjustment sometimes occurs during consideration of annual appropriations bills, these bills do not contain funds for the annual salaries or pay adjustment for Members. Nor do they contain language authorizing an increase. The use of appropriations bills as vehicles for provisions prohibiting the automatic annual pay adjustments for Members developed by custom. A provision prohibiting an adjustment to Member pay could be offered to any bill, or be introduced as a separate bill."], "subsections": []}, {"section_title": "January 2020 Potential Pay Adjustment", "paragraphs": ["The maximum potential January 2020 Member pay adjustment of 2.6%, or $4,500, was known when the Bureau of Labor Statistics (BLS) released data for the change in the Employment Cost Index (ECI) during the 12-month period from December 2017 to December 2018 on January 31, 2019.", "Each year, the adjustment takes effect automatically unless it is either denied or modified statutorily by Congress, or limited by the General Schedule (GS) base pay adjustment, since the percentage increase in Member pay is limited by law to the GS base pay percentage increase."], "subsections": []}, {"section_title": "January 2019 Member Pay Adjustment Denied", "paragraphs": ["The maximum potential January 2019 Member pay adjustment of 2.3%, or $4,000, was known when the BLS released data for the change in the ECI during the 12-month period from December 2016 to December 2017 on January 31, 2018.", "Each year, the adjustment takes effect automatically unless it is either denied or modified statutorily by Congress, or limited by the GS base pay adjustment, since the percentage increase in Member pay is limited by law to the GS base pay percentage increase. The 2019 GS base pay adjustment was 1.4%, automatically limiting any Member pay adjustment to $2,400.", "The House-passed ( H.R. 5894 ) and Senate-reported versions ( S. 3071 ) of the FY2019 legislative branch appropriations bill both contained provisions to prevent this adjustment. The Member pay provision was included in the bills as introduced and no separate votes were held on this provision. Division B of P.L. 115-244 , enacted September 21, 2018, included the pay freeze provision."], "subsections": []}, {"section_title": "January 2018 Member Pay Adjustment Denied", "paragraphs": ["The maximum potential January 2018 member pay adjustment of 1.8%, or $3,100, was known when the BLS released data for the change in the ECI during the 12-month period from December 2015 to December 2016 on January 31, 2017. ", "Each year, the adjustment takes effect automatically unless it is either denied or modified statutorily by Congress, or limited by the GS base pay adjustment, since the percentage increase in Member pay is limited by law to the GS base pay percentage increase. The 2018 GS base pay adjustment was 1.4%, automatically limiting any Member pay adjustment to $2,400.", "The House-passed ( H.R. 3162 ) and Senate-reported versions ( S. 1648 ) of the FY2018 legislative branch appropriations bill both contained provisions to prevent this adjustment. The Member pay provision was included in the bills as introduced and no separate votes were held on this provision. ", "Neither bill was enacted prior to the start of FY2018, and legislative branch activities were initially funded through a series of continuing appropriations resolutions (CRs) ( P.L. 115-56 , through December 8, 2017; P.L. 115-90 , through December 22, 2017; P.L. 115-96 , through January 19, 2018; P.L. 115-120 , through February 8, 2018; P.L. 115-123 , through March 23, 2018). P.L. 115-56 contained a provision, extended in the subsequent CRs, continuing \"section 175 of P.L. 114-223 , as amended by division A of P.L. 114-254 .\" This provision prohibited a Member pay adjustment in FY2017. Section 7 of the FY2018 Consolidated Appropriations Act ( P.L. 115-141 ) prohibited the adjustment for the remainder of the year."], "subsections": []}, {"section_title": "January 2017 Member Pay Adjustment Denied", "paragraphs": ["The maximum potential January 2017 Member pay adjustment of 1.6%, or $2,800, was known when the BLS released data for the change in the ECI during the 12-month period from December 2014 to December 2015 on January 30, 2016. ", "Both the House-passed ( H.R. 5325 ) and Senate-reported ( S. 2955 ) versions of the FY2017 legislative branch appropriations bill\u2014which would provide approximately $4.4 billion in funding for the activities of the House of Representatives, Senate, and legislative branch support agencies \u2014contained a provision that would prohibit this adjustment. The Member pay provision was included in the bills as introduced and no separate votes were held on this provision. No further action was taken on H.R. 5325 or S. 2955 , but the pay prohibition language was included in the Further Continuing and Security Assistance Appropriations Act, 2017 ( P.L. 114-254 ). ", "Absent the statutory prohibition on a Member pay adjustment, Members of Congress would have automatically been limited to a 1.0% ($1,700) salary increase to match the increase in base salaries for GS employees."], "subsections": []}, {"section_title": "January 2016 Member Pay Adjustment Denied", "paragraphs": ["The maximum potential January 2016 Member pay adjustment of 1.7%, or $3,000, was known when the BLS released data for the change in the ECI during the 12-month period from December 2013 to December 2014 on January 30, 2015. ", "The House-passed and Senate-reported versions of the FY2016 legislative branch appropriations bill ( H.R. 2250 ) both contained a provision prohibiting this adjustment. ", "The pay adjustment prohibition was subsequently included in the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ). ", "Absent the statutory prohibition on a Member pay adjustment, Members of Congress would have automatically been limited to a 1.0% ($1,700) salary increase to match the increase in base salaries for GS employees."], "subsections": []}, {"section_title": "January 2015 Member Pay Adjustment Denied", "paragraphs": ["The maximum potential January 2015 pay adjustment of 1.6%, or $2,800, was known when the BLS released data for the change in the ECI during the 12-month period from December 2012 to December 2013 on January 31, 2014. ", "Each year, the adjustment takes effect automatically unless it is either denied statutorily by Congress, or limited by the GS base pay adjustment, since the percentage increase in Member pay is limited by law to the GS base pay percentage increase.", "The FY2015 legislative branch appropriations bill ( H.R. 4487 ), as reported by the Committee on Appropriations and passed by the House on May 1, 2014, contained a provision prohibiting this adjustment. This provision was continued in the House-passed and Senate-reported versions of this bill, with no separate vote on the Member pay provision. No further action on this bill was taken, but the provision was subsequently included in Section 8 of Division Q of the FY2015 Consolidated and Further Continuing Appropriations Act, which was enacted on December 16, 2014. ", "On August 29, 2014, President Obama issued an \"alternative pay plan for federal civilian employees,\" which called for a 1.0% increase in base salaries for General Schedule employees. Absent the statutory prohibition on a Member pay adjustment, Members of Congress would have automatically been limited to a 1.0% ($1,700) salary increase. "], "subsections": []}, {"section_title": "January 2014 Member Pay Adjustment Denied", "paragraphs": ["The maximum potential 2014 pay adjustment of 1.2%, or $2,100, was known when the BLS released data for the change in the ECI during the 12-month period from December 2011 to December 2012 on January 31, 2013. The Continuing Appropriations Act, 2014 ( P.L. 113-46 , enacted October 17, 2013), however, prohibited the scheduled 2014 pay adjustment for Members of Congress.", "Each year, the adjustment takes effect automatically unless it is either ", "denied statutorily by Congress, or limited by the GS base pay adjustment, since the percentage increase in Member pay is limited by law to the GS base pay percentage increase. The scheduled January 2014 across-the-board increase in the base pay of GS employees under the annual adjustment formula was 1.3%. A scheduled GS annual pay increase may be altered only if the President issues an alternative plan or if a different increase, or freeze, is enacted. The President issued an alternate pay plan for civilian federal employees on August 30, 2013. This plan called for a January 2014 across-the-board pay increase of 1.0% for federal civilian employees, the same percentage as proposed in the President's FY2014 budget. Legislation was not enacted to prohibit or alter the GS adjustment, and Executive Order 13655, issued on December 23, 2013, implemented a 1.0% increase for GS employees. Had the Member pay adjustment not been prohibited by law, the GS base pay adjustment would have automatically limited a salary adjustment for Members of Congress to 1.0% ($1,700)."], "subsections": []}, {"section_title": "January 2013 Member Pay Adjustment Delayed and Then Denied", "paragraphs": ["The maximum potential 2013 pay adjustment of 1.1%, or $1,900, was known when the BLS released data for the change in the ECI during the 12-month period from December 2010 to December 2011 on January 31, 2012. The adjustment takes effect automatically unless (1) denied statutorily by Congress or (2) limited by the GS base pay adjustment, since the percentage increase in Member pay is limited by law to the GS base pay percentage increase. ", "The President's budget, submitted on February 13, 2012, proposed an average (i.e., base and locality) 0.5% adjustment for GS employees. "], "subsections": [{"section_title": "Partial Year Pay Freeze Enacted", "paragraphs": ["President Obama later stated in a letter to congressional leadership on August 21, 2012, that the current federal pay freeze should extend until FY2013 budget negotiations are finalized. Section 114 of H.J.Res. 117 , the Continuing Appropriations Resolution, 2013, which was introduced on September 10, 2012, extended the freeze enacted by P.L. 111-322 through the duration of this continuing resolution. H.J.Res. 117 was passed by the House on September 13 and the Senate on September 22. It was signed by the President on September 28, 2012 ( P.L. 112-175 ). A delay in the implementation of pay adjustments for GS employees automatically delays any scheduled Member pay adjustment. "], "subsections": []}, {"section_title": "Executive Order Issued and Subsequent Pay Freeze Enacted", "paragraphs": ["On December 27, 2012, President Obama issued Executive Order 13635, which listed the rates of pay for various categories of officers and employees that would be effective after the expiration of the freeze extended by P.L. 112-175 . The executive order included a 0.5% increase for GS base pay, which automatically lowered the maximum potential Member pay adjustment from 1.1% to 0.5%. ", "As in prior years, schedule 6 of the 2012 executive order listed the pay rate for Members of Congress for the upcoming year. This executive order indicated that an annual adjustment would take effect after the expiration of the freeze included in P.L. 112-175 . As stated above, the annual adjustments take effect automatically if legislation is not enacted preventing them. The executive order, however, by establishing the GS pay adjustment at a lower rate than the scheduled Member pay adjustment, automatically lowered the Member pay adjustment rate since by law Member pay adjustments cannot be higher than GS pay adjustments.", "Subsequently, a provision in H.R. 8 , the American Taxpayer Relief Act of 2012, which was enacted on January 2, 2013 ( P.L. 112-240 ), froze Member pay at the 2009 level for 2013. The language was included in S.Amdt. 3448 , a substitute amendment agreed to by unanimous consent. The bill, as amended, passed the Senate (89-8, vote #251) and the House (257-167, roll call #659) on January 1, 2013. This freeze was subsequently reflected in Executive Order 13641, which was signed April 5, 2013. ", "This represented the second time, the first being in 2006, that Member pay was statutorily frozen for only a portion of the following year at the time of the issuance of the executive order. In both instances, the executive order listed new pay rates and indicated an effective date following the expiration of the statutory freeze. Pay adjustments in both years were further frozen pursuant to subsequent laws."], "subsections": []}]}, {"section_title": "January 2011 and January 2012 Member Pay Adjustments Denied", "paragraphs": ["As stated above, projected Member pay adjustments are calculated based on changes in the ECI. The projected 2011 adjustment of 0.9% was known when the BLS released data for the ECI change during the 12-month period from December 2008 to December 2009 on January 29, 2010. This adjustment would have equaled a $1,600 increase, resulting in a salary of $175,600.", "The 2011 pay adjustment was prohibited by the enactment of H.R. 5146 ( P.L. 111-165 ) on May 14, 2010. H.R. 5146 was introduced in the House on April 27 and was agreed to the same day (Roll no. 226). It was agreed to in the Senate the following day by unanimous consent. Other legislation was also introduced to prevent the scheduled 2011 pay adjustment.", "Additionally, P.L. 111-322 , which was enacted on December 22, 2010, prevents any adjustment in GS base pay before December 31, 2012. Since the percentage adjustment in Member pay may not exceed the percentage adjustment in the base pay of GS employees, Member pay is also frozen during this period. If not limited by GS pay, Members could have received a salary adjustment of 1.3% in January 2012 under the ECI formula. Pay for Members of Congress remained $174,000."], "subsections": []}, {"section_title": "January 2010 Member Pay Adjustment Denied", "paragraphs": ["Under the formula established in the Ethics Reform Act, Members were originally scheduled to receive a pay adjustment in January 2010 of 2.1%. This adjustment was denied by Congress through a provision included in the FY2009 Omnibus Appropriations Act. Section 103 of Division J of the act states, \"Notwithstanding any provision of section 601(a)(2) of the Legislative Reorganization Act of 1946 (2 U.S.C. 31(2)), the percentage adjustment scheduled to take effect under any such provision in calendar year 2010 shall not take effect.\" ", "Had this provision not been enacted, the 2.1% projected adjustment would have been automatically reduced to 1.5% to match the 2010 GS base pay adjustment."], "subsections": []}, {"section_title": "Member Pay: Other Proposals and Actions by Congress", "paragraphs": [], "subsections": [{"section_title": "116th Congress", "paragraphs": ["As in previous Congresses, legislation was introduced in the 116 th Congress to", "repeal the automatic pay adjustment provision (for example, H.R. 751 and H.R. 1466 ); change the procedure by which pay for Members of Congress is adjusted or disbursed by linking it to congressional actions or economic indicators, including passage of a budget resolution, passage of appropriations, or reaching the debt limit (for example, S. 39 , S. 44 , S. 949 , H.R. 86 , H.R. 102 , H.R. 129 , H.R. 236 , H.R. 298 , H.R. 834 , H.R. 1172 , H.R. 1178 , H.R. 1466 , H.R. 1612 , H.J.Res. 10 , and H.J.Res. 51 ); and prohibit pay for Members of Congress during a lapse in appropriations resulting in a government shutdown (for example, S. 74 , S. 949 , H.R. 26 , H.R. 211 , H.R. 845 , and H.R. 1612 ). "], "subsections": []}, {"section_title": "115th Congress", "paragraphs": ["Legislation was introduced in the 115 th Congress to", "prohibit adjustments in pay (for example, H.R. 342 ); repeal the automatic pay adjustment provision (for example, H.R. 668 and H.R. 5946 ); change the procedure by which pay for Members of Congress is adjusted or disbursed by linking it to congressional actions or economic indicators, including passage of a budget resolution or reaching the debt limit (for example, H.R. 429 , H.R. 536 , H.R. 646 , H.R. 1779 , H.R. 1951 , H.R. 2153 , H.R. 2665 , H.R. 3675 , H.R. 4512 , and H.R. 5946 , and S. 14 ); reduce the pay of Members of Congress (for example, H.R. 1786 and H.R. 5539 ); and prohibit pay for Members of Congress during a lapse in appropriations resulting in a government shutdown (for example, H.R. 1789 , H.R. 1794 , H.R. 2214 , H.R. 4852 , H.R. 4870 , and S. 2327 ). "], "subsections": []}, {"section_title": "114th Congress", "paragraphs": ["Legislation was introduced in the 114 th Congress to", "prohibit adjustments in pay (for example, H.R. 109 and H.R. 302 ); repeal the automatic pay adjustment provision (for example, H.R. 179 , H.R. 513 , H.R. 688 , H.R. 1585 , and S. 17 ); change the procedure by which pay for Members of Congress is adjusted or disbursed by linking it to congressional actions or economic indicators, including the passage of a budget resolution or existence of a deficit (for example, H.Con.Res. 27 , S.Con.Res. 11 , H.R. 92 , H.R. 110 , H.R. 174 , H.R. 187 , H.R. 3757 , H.R. 4814 , H.R. 4476 , and S. 39 ); reduce the pay of Members of Congress (for example, H.R. 179 and H.R. 688 ); and prohibit or reduce pay for Members of Congress during a lapse in appropriations resulting in a government shutdown (for example, S. 2074 , H.R. 3562 , H.R. 2023 , and H.R. 1032 ). "], "subsections": [{"section_title": "Linking Salaries to Passage of a Concurrent Resolution on the Budget", "paragraphs": ["The House budget resolution for FY2016, H.Con.Res. 27 , included a policy statement that Congress should agree to a concurrent budget resolution each year by April 15, and if not, congressional salaries should be held in escrow (Section 819). The statement proposed that salaries would be released from the escrow account either when a chamber agrees to a concurrent resolution on the budget or the last day of the Congress, whichever is earlier. The House agreed to this resolution on March 25, 2015, and no further action was taken. The Senate agreed to its resolution on the FY2016 budget, S.Con.Res. 11 , on March 27, 2015, without this language. The conference report for S.Con.Res. 11 \u2014agreed to in the House on April 30 and in the Senate on May 5, 2015\u2014contains a \"Policy Statement on 'No Budget, No Pay'\" (Section 6216), which refers to actions by the House. "], "subsections": []}]}, {"section_title": "113th Congress", "paragraphs": ["Legislation was introduced in the 113 th Congress to", "prohibit adjustments in pay (for example, H.R. 54 , H.R. 243 , H.R. 636 , S. 18 , S. 30 ); repeal the automatic pay adjustment provision (for example, H.R. 134 , H.R. 150 , H.R. 196 , S. 65 , and H.R. 398 ); change the procedure by which pay for Members of Congress is adjusted or disbursed by linking it to congressional actions or economic indicators, including passage of a budget resolution or reaching the debt limit (for example, H.R. 108 , H.R. 167 , H.R. 284 , H.R. 308 , H.R. 310 , H.R. 325 , H.R. 372 , H.R. 397 , H.R. 396 , H.R. 522 , H.R. 593 , H.R. 1884 , H.R. 2335 , H.R. 3234 , S. 18 , S. 30 , and S. 263 ); reduce the pay of Members of Congress (for example, H.R. 37 , H.R. 150 , H.R. 391 , H.R. 396 , H.R. 398 , and H.R. 1467 ); prohibit pay for Members of Congress during a lapse in appropriations resulting in a government shutdown (for example, H.R. 3160 , H.R. 3215 , H.R. 3224 , H.R. 3234 , and H.R. 3236 ); and apply any sequester to Member pay (for example, S. 436 , H.R. 1181 , H.R. 1478 , and H.R. 2677 )."], "subsections": [{"section_title": "Linking Salaries to Passage of a Concurrent Resolution on the Budget", "paragraphs": ["H.R. 325 , which (1) included language holding congressional salaries in escrow if a concurrent resolution on the budget was not agreed to by April 15, 2013, and (2) provided for a temporary extension of the debt ceiling through May 18, 2013, was introduced on January 21, 2013. Salaries would have been held in escrow for Members in a chamber if that chamber had not agreed to a concurrent resolution by that date. Salaries would have been released from the escrow account either when that chamber agreed to a concurrent resolution on the budget or the last day of the 113 th Congress, whichever was earlier. H.R. 325 was agreed to in the House on January 23, 2013, and the Senate on January 31, 2013. It was enacted on February 4, 2013 ( P.L. 113-3 ). Both the House and Senate agreed to a budget resolution prior to that date, however, and salaries were not held in escrow."], "subsections": []}, {"section_title": "Linking Salaries to the Debt Limit", "paragraphs": ["H.R. 807 , the Full Faith and Credit Act, was introduced in the House on February 25, 2013. The bill would have prioritized certain payments in the event the debt reaches the statutory limit. An amendment, H.Amdt. 61 , was offered on May 9, 2013, that would clarify that these obligations would not include compensation for Members of Congress. It was agreed to the same day. The bill passed the House on May 13, 2013. No further action was taken in the 113 th Congress.", "The House-passed version of H.J.Res. 59 , the Continuing Appropriations Resolution, 2014, also contained a provision addressing actions by the Secretary of the Treasury in the event that the debt limit is reached and not raised. The provision (Section 138) would, in part, prohibit borrowing to provide pay for Members of Congress in the event that the debt reaches the statutory limit prior to December 15, 2014. The bill passed the House on September 20, 2013. It was enacted on December 26, 2013, without this section. "], "subsections": []}]}, {"section_title": "112th Congress", "paragraphs": ["Legislation was introduced in the 112 th Congress to", "repeal the automatic pay adjustment provision (for example, S. 133 , S. 148 , H.R. 187 , H.R. 235 , H.R. 246 , H.R. 343 , H.R. 431 , H.R. 3673 ); change the procedure by which pay for Members of Congress is adjusted or disbursed by linking it to other action or economic indicators (for example, H.R. 124 , H.R. 172 , H.R. 236 , H.R. 994 , H.R. 1454 , H.R. 3136 , H.R. 3565 , H.R. 3774 , H.R. 3799 , H.R. 3883 , H.R. 4036 , H.R. 6438 , S. 1442 ); reduce the pay of Members of Congress (for example, H.R. 204 , H.R. 270 , H.R. 335 , H.R. 1012 , H.R. 4399 ); otherwise alter or restrict pay for Members under certain conditions (for example, H.R. 6108 ); and freeze Member pay (for example, S. 1931 , S. 1936 , S. 2065 , S. 2079 , S. 2210 , H.R. 3858 , H.R. 6474 , H.R. 6720 , H.R. 6721 , H.R. 6722 )."], "subsections": [{"section_title": "Actions Related to Member Pay During a Lapse in Appropriations", "paragraphs": ["Legislation was also introduced in the 112 th Congress that would have affected Member pay in the event of a lapse of appropriations resulting in a government shutdown. These included H.R. 819 , H.R. 1255 , H.R. 1305 , H.Con.Res. 56 , and S. 388 . ", "The Senate passed S. 388 on March 1, 2011. The bill would have prohibited Members of the House and Senate from receiving pay, including retroactive pay, for each day that there is a lapse in appropriations or the federal government is unable to make payments or meet obligations because of the public debt limit. The House passed H.R. 1255 on April 1, 2011. The bill would have prohibited the disbursement of pay to Members of the House and Senate during either of these situations. No further action was taken on either bill. ", "On April 8, 2011, the Speaker of the House issued a \"Dear Colleague\" letter indicating that in the event of a shutdown, Members of Congress would continue to be paid pursuant to the Twenty-Seventh Amendment to the Constitution, which as stated above, states: \"No law, varying the compensation for the services of the Senators and Representatives, shall take effect, until an election of Representatives shall have intervened\"\u2014although Members could elect to return any compensation to the Treasury. "], "subsections": []}, {"section_title": "Additional Legislation Receiving Floor Action but Not Enacted", "paragraphs": ["Additional legislation to prohibit any Member pay adjustment in 2013 was introduced but not enacted in the 112 th Congress, including the following:", "Section 5421(b)(1) of H.R. 3630 , as introduced in the House, would have prohibited any adjustment for Members of Congress prior to December 31, 2013. Section 706 of the motion to recommit also contained language freezing Member pay. On December 13, 2011, the motion to recommit failed (183-244, roll call #922), and the bill passed the House (234-193, roll call #923). The House-passed version of the bill was titled the \"Middle Class Tax Relief and Job Creation Act of 2011.\" The Senate substitute amendment, which did not address pay adjustments, passed on December 17. It was titled the \"Temporary Payroll Tax Cut Continuation Act of 2011.\" The bill was enacted on February 22, 2012 ( P.L. 112-96 ), without the pay freeze language. H.R. 3835 , introduced on January 27, 2012, also would have extended the pay freeze for federal employees, including Members of Congress, to December 31, 2013. This bill passed the House on February 1, 2012. H.R. 6726 , introduced on January 1, 2013, would have extended the pay freeze for federal employees, including Members of Congress, to December 31, 2013. This bill passed the House on January 2, 2013."], "subsections": []}]}]}, {"section_title": "Reference and Historical Information and Explanation of Tables", "paragraphs": [" Table 1 provides a history of the salaries of Members of Congress since 1789. For each salary rate, both the effective date and the statutory authority are provided. ", " Table 2 provides information on pay adjustments for Members since 1992, which was the first full year after the Ethics Reform Act that Representatives and Senators received the same salary. The table provides the projected percentage changes under the formula based on the Employment Cost Index and the actual percentage adjustment. The differences between the projected and actual Member pay adjustments resulted from", "the enactment of legislation preventing the increase (adjustments for 1994, 1995, 1996, 1997, 1999, 2007, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, and 2019); limits on the percentage increase of Member pay because of the percentage increase in GS base pay (adjustments for 1994, 1995, 1996, 1998, 1999, 2001, 2003, 2007, 2008, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, and 2019); and a combination of the above. In some years, the percentage adjustment for Member pay would have been lowered to match the percentage adjustment in GS base pay if Congress had not passed legislation denying the adjustment (adjustments for 1994, 1995, 1996, 1999, 2007, 2010, 2011, 2013, 2014, 2015, 2016, 2017, 2018, and 2019). ", "If Members of Congress had received every adjustment prescribed by the ECI formula since 1992, and the 2 U.S.C. \u00a74501 limitation regarding the percentage base pay increase for GS employees remained unchanged, the 2019 salary would be $210,900. ", " Table 3 lists the laws which have previously delayed or prohibited Member pay adjustments, the dates these laws were enacted, and the text of the provision. While many of the bills in this list are appropriations bills, a prohibition on Member pay adjustments could be included in any bill, or be introduced as a separate bill. ", " Figure 1 , which follows, shows the salary of Members of Congress in current and constant (inflation adjusted) dollars since 1992. It shows that Member salaries, when adjusted for inflation, decreased 15% from 2009 until 2019."], "subsections": []}]}}
{"id": "R44383", "title": "Deficits, Debt, and the Economy: An Introduction", "released_date": "2019-04-15T00:00:00", "summary": ["The federal government incurs a budget deficit when its total outgoing payments (outlays) exceed the total money it collects (revenues). If instead federal revenues are greater than outlays, then the federal government generates a surplus. Deficits are measured over the course of a defined period of time\u2014in the case of the federal government, a fiscal year.", "Debt measurements may be taken at any point in time, and represent the accumulation of all previous government borrowing activity from private citizens, institutions, foreign governments, and other parts of the federal government. Federal debt increases when there are net budget deficits and outflows made for federal credit programs, which combine to represent debt held by the public. Federal debt also rises through increases in intragovernmental debt, which is generated by trust fund surpluses that are used to finance other government activity. Federal debt declines when there are budget surpluses, a reduction in the federal credit portfolio, or decreases in intragovernmental borrowing.", "Federal deficit and debt outcomes are interdependent: budget deficits increase federal debt levels, which in turn increase future net deficits. The nature of the relationship between deficits and debt varies depending on the type of debt considered. Budget deficits are the principal contributor to debt held by the public. The effect of deficits on intragovernmental debt is less certain than their contribution to debt held by the public. All else equal, increases in net trust fund deficits will lead to increases in total budget deficits but decreases in intragovernmental debt.", "Interest payments made on publicly held debt instruments contribute directly to federal deficits. Holders of federal debt are compensated by receiving interest payments from Treasury. Intragovernmental debt does not contribute to future deficits.", "Persistent budget deficits and a large and increasing federal debt have generated discussions over the long-term sustainability of current budget projections. Federal budget deficits declined from 9.8% of gross domestic product (GDP) in FY2009 to 2.4% of GDP in FY2015, and subsequently increased to 3.8% of GDP in FY2018. Recent estimates forecast that the government will run deficits in every year through FY2029.", "Federal debt totaled $21.516 trillion at the end of FY2018, which as a percentage of GDP (106.0%) was its highest value since FY1947; of that debt, $15.761 trillion (or 77.8% of GDP) was held by the public.", "Over time, persistent budget deficits can hamper economic growth. Deficits represent an intertemporal transfer from later generations to the current one, as money borrowed now will eventually require repayment with interest. The effect of deficit financing on economic output depends on the nature of the government activity being financed and the private activity that would have otherwise taken place.", "Federal debt is constrained by the willingness of investors to finance borrowing. While the amount of federal borrowing investors will finance may be affected by economic growth and other factors, real federal debt cannot increase indefinitely. There are no signs that federal borrowing capacity will be exhausted in the short term. However, the consequences of exhausted fiscal space may be worth considering when examining the medium- and long-term trajectory of the federal budget."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Persistent annual budget deficits and a large and increasing federal debt have generated discussions over the long-term sustainability of current budget projections. Federal budget deficits declined from 9.8% of gross domestic product (GDP) in FY2009 to 3.8% of GDP in FY2018. However, recent estimates forecast that the government will run deficits (i.e., federal expenditures will exceed revenues) in every year through FY2029. Federal debt totaled $21.516 trillion at the end of FY2018, and as a percentage of GDP (106.0%) was at its highest value since FY1947; $15.761 trillion of that debt (or 77.8% of GDP) was held by the public. This report explores distinctions in the concept and composition of deficits and debt and explains how they interact with economic conditions and other aspects of fiscal policy."], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "What Is a Deficit?", "paragraphs": ["A deficit describes one of the three possible outcomes for the federal budget. The federal government incurs a deficit (also known as a net deficit) when its total outgoing payments (outlays) exceed the total money it collects (revenues). If instead federal revenues are greater than outlays, then the federal government generates a surplus. A balanced budget describes the case where federal receipts equal federal expenditures. The size of a deficit or surplus is equal to the difference between the levels of spending and receipts. Deficits are measured over the course of a defined period of time\u2014in the case of the federal government, a fiscal year. ", "Federal budget outcomes incorporate both \"on-budget\" activities, which represent the majority of federal taxes and spending, and \"off-budget\" government activities, which include revenues and outlays from Social Security trust funds and the Postal Service. For federal credit programs, the subsidy cost of government activities is included in deficit and surplus calculations. The federal budget is constructed in a manner that provides for lower net deficits in more robust economic conditions, attributable to higher revenues (from taxes on increased output) and, to a smaller degree, lower spending levels (from reduced demand for programs like unemployment insurance).", "The federal government incurred a deficit of $779 billion in FY2018, equivalent to 3.8% of GDP. From FY1969 to FY2018, the average net deficit equaled 2.9% of annual GDP ($587 billion in 2018 dollars). Over the FY1969-FY2018 period, the government generated a surplus on five occasions: in FY1969 and in each year from FY1998 through FY2001. In all other years, the federal government incurred a net deficit. "], "subsections": []}, {"section_title": "What Is the Debt?", "paragraphs": ["The federal debt is the money that the government owes to its creditors, which include private citizens, institutions, foreign governments, and other parts of the federal government. Debt measurements may be taken at any time and represent the accumulation of all previous government borrowing activity. Federal debt increases when there are net budget deficits, outflows made for federal credit programs (net of the subsidy costs already included in deficit calculations), and increases in intragovernmental borrowing. Federal credit programs include loans issued for college tuition payments, small business programs, and other activities the government may seek to support. In those cases, debt levels increase as additional loans are granted and decrease as money for such programs is repaid. ", "Intragovernmental debt is generated when trust funds, revolving funds, and special funds receive money from tax payments, fees, or other revenue sources that is not immediately needed to make payments. In those cases the surpluses are used to finance other government activities, and Government Account Series (GAS) securities are issued to the trust fund. GAS securities may then be redeemed when trust fund expenditures exceed revenue levels. Intragovernmental debt may be thought of as money that one part of the government owes another part.", "The Department of the Treasury is responsible for managing federal debt. The primary objective of Treasury's debt management strategy is to fulfill the government's borrowing needs at the lowest cost over time. Treasury finances federal borrowing activities by issuing government-backed securities that generate interest payments for their owners. Treasury securities are typically sold to the public through an auction process, and have maturity periods (the length of time that they are held before repayment) of anywhere from several weeks to 30 years."], "subsections": [{"section_title": "Comparing Debt Held by the Public and Intragovernmental Debt", "paragraphs": ["Federal debt may be divided into two major categories: (1) debt held by the public, which is the sum of accrued net deficits and outstanding money from federal credit programs; and (2) intragovernmental debt. As of February 28, 2019, the amount of federal debt outstanding was $22.087 trillion, with 73.6% of that debt held by the public and 26.4% held as intragovernmental debt. Table 1 summarizes the composition of debt held by the public and intragovernmental debt. ", "Individuals, firms, the Federal Reserve, state and local governments, and foreign governments are all eligible to purchase publicly held debt. Debt may be acquired directly through the auction process, from which most publicly held debt is initially sold, or on the secondary market if the debt is deemed \"marketable\" or eligible for resale. The total amount of publicly held debt outstanding was $16.251 trillion as of February 28, 2019. ", "The majority of publicly held debt is marketable, and includes all Treasury Notes, Bonds, Bills, Treasury Inflation Protected Securities (TIPS), and Floating Rate Notes (FRNs) issued by Treasury. Nonmarketable debt held by the public is composed of U.S. Savings Bonds, State and Local Government Securities (SLGS), and other, smaller issues. As of February 28, 2019, 96.8% of publicly held issues, or $15.741 trillion, was marketable.", "Intragovernmental debt is debt where the federal government is both the creditor and the borrower. Intragovernmental debt issuances are almost exclusively nonmarketable, as marketable debt comprised only $0.029 trillion (0.5%) of the $5.836 trillion in total intragovernmental debt on February 28, 2019. The majority of nonmarketable intragovernmental debt was held by trust funds devoted to Social Security and military and federal worker retirement. Marketable intragovernmental debt is composed primarily of debt held by the Federal Financing Bank, which is a government corporation created to reduce the cost of federal borrowing. ", "Since intragovernmental debt is held only in government accounts, such debt cannot be accessed by institutions outside the federal government. Conversely, the bonds that finance publicly held debt activity may compete for assets in private and financial markets. Public debt issues may be a particularly attractive collateral option on the secondary market if the federal government is perceived as a safe credit risk. "], "subsections": []}]}]}, {"section_title": "Deficit and Debt Interaction", "paragraphs": ["Federal deficit and debt outcomes are interdependent; budget deficits increase federal debt levels, which in turn increase future net deficits because of the need to service higher interest payments on the nation's debt. The nature of the relationship between deficits and debt varies depending on the type of debt considered. This section describes the relationship between federal deficits and debt. "], "subsections": [{"section_title": "How Deficits Contribute to Debt", "paragraphs": ["Budget deficits are the principal contributor to debt held by the public. To finance budget deficits, Treasury sells debt instruments. The value of those debt holdings (which include interest payments) represents the vast majority of publicly held debt. From FY1969 to FY2018, annual nominal budget deficits and surpluses of the federal government summed to $13.745 trillion; over the same period, total debt held by the public increased by $15.473 trillion. Publicly held debt has been the biggest determinant of historical changes in the total stock of federal debt. Figure 1 shows changes in federal debt levels from FY1969 through FY2018. Though there has been a gradual increase in intragovernmental debt in recent decades, the decline in real debt following World War II and subsequent increase in debt levels beginning in the late 1970s were each caused primarily by similar changes in the stock of publicly held debt over those time periods. "], "subsections": []}, {"section_title": "How Debt Contributes to Deficits", "paragraphs": ["Present borrowing outcomes affect future budgeting outcomes. Publicly held debt contributes directly to federal deficits through interest payments on debt issuances. Interest payments are made to both debt held by the public and intragovernmental debt. As the government serves as buyer and seller of intragovernmental debt, interest payments on those holdings do not affect the federal budget deficit. However, interest payments made on publicly held debt represent new federal spending, and are recorded in the budget as outlays when payments are made. The government incurs interest costs when it opts to finance spending through borrowing rather than through increased revenues. Net interest payments represent the amount paid from the government to debt holders in a given time period , less interest payments received for federal loan programs .", "For investors, purchasing a debt issuance represents both a loss of liquidity relative to currency holdings (money paid for the debt holding can be used immediately, while the debt issuance may only be resold on the secondary market or held until the date of maturity) and an opportunity cost (the money used for the purchase could have been spent on other items, invested elsewhere, or saved). Debt holders are compensated for those costs by receiving interest payments from Treasury on their issuances. ", "From FY1969 to FY2018 net interest payments averaged 2.0% of annual GDP, equivalent to about $407 billion annually in 2018 dollars. High interest rates and increasing debt levels caused the net interest burden to peak in the 1980s and 1990s. Recent net interest payments have been lower than their long-term averages; in FY2018, net interest payments were $325 billion, or 1.6% of GDP. FY2018 payments were the product of real low interest rates and relatively high levels of real debt. Unless the federal debt is reduced, net interest payments will likely increase if interest rates shift toward their long-term averages. In its most recent forecast, the Congressional Budget Office (CBO) projects that real net interest payments will increase to 3.0% of GDP by FY2029.", "One way to measure the effect of debt on future deficits is to examine the relationship between total federal deficits and the primary deficit , which measures the balance of revenues and expenditures with net interest payments excluded. Figure 2 shows total and primary budget outcomes from FY1969 through FY2018. The gap between the total and primary outcomes in a given year is explained by net interest payments. The primary deficit averaged 0.9% of GDP from FY1969 to FY2018, as compared to the average total budget deficit of 2.9% of GDP recorded over the same time period. While the federal government recorded a budget surplus five times from FY1969 to FY2018, in nine other years it registered a primary surplus, most recently in 2007."], "subsections": []}]}, {"section_title": "Economic Theory, Deficits, and Debt: In Brief", "paragraphs": ["This section provides a primer of how government deficits and debt are integrated into the larger economy in both the short and long run, and provides some ways to measure such interactions. The nature of interaction between fiscal outcomes and economic performance may have ramifications for how Congr ess wishes to distribute its activity both within a recession or expansion and for what fiscal targets it wishes to set in the long run. "], "subsections": [{"section_title": "How Deficits and Debt Contribute to the Economy: Short-Run Effects", "paragraphs": ["In the short run, when economic output is assumed to be fixed, output is a function of both private and public activity. Equation (1), also known as the national accounting identity , shows the different choices that can be made with all economic output in a given time period. It states that output ( Y ) in a given economy is equal to the sum of private consumption ( C ), private investment ( I ), net government investment ( G ), and net exports ( X ). Put another way, equation (1) asserts that output is the sum of private consumption, private saving, and net government activity. The net government deficit, or G , is shown in equation (2) as spending ( S ) less revenues ( R ). Absent a monetary policy intervention by the Federal Reserve (which makes monetary decisions independently), G must be obtained through government borrowing, or debt.", "(1) Y = C + I + G + X ", "(2) G = S - R", "Since the levels of output ( Y ) and consumption ( C ) in a given time period are fixed, increases in government investment ( G ) will reduce private investment ( I ), net exports ( X ), or some combination thereof. Government borrowing increases that reduce private investment are commonly categorized as \"crowding out,\" and represent a shift from private investment to public investment. ", "Increased government borrowing that reduces net exports (generated by borrowing from foreign sources) represents an expansion of the short-term money supply, as money is being brought into the economy now at the expense of the future stock of money (as foreign borrowing is repaid). Such a fiscal expansion increases the quantity of money demanded, which drives up interest rates (or cost of borrowing). ", "The federal government may choose to generate short-run budget deficits for a few reasons. Deficit financing, or payment for federal government activity at least partly through debt increases, increases the total level of spending in the economy. Most economists believe that the implementation of deficit financing can be used to generate a short-term stimulus effect, either for a particular industry or for the entire economy. In this view, increases in expenditures and tax reductions can be used to generate employment opportunities and consumer spending and reduce the intensity of stagnant economic periods. ", "Deficit financing is a less effective countercyclical strategy when it leads to \"crowding out,\" or when government financing merely replaces private-sector funding instead of inducing new economic activity, and is more likely to occur in periods of robust economic growth. Deficit reduction when the economy is operating near or at full potential can help prevent the economy from overheating and avoid \"crowding out\" of private investment, which could have positive implications for intergenerational equity and long-term growth.", "Deficit financing may also be used as part of a structurally balanced budget strategy, which alters government tax and spending levels to smooth the effect of business cycles. Smoothing budgetary changes may reduce the economic shocks deficits induce among businesses and households. Governments may also use federal deficits or surpluses to spread the payment burden of long-term projects across generations. This sort of intergenerational redistribution is one justification for the creation of long-run trust funds, such as those devoted to Social Security."], "subsections": []}, {"section_title": "How Deficits and Debt Contribute to the Economy: Long-Run Effects", "paragraphs": ["In the long run, when economic output is affected by supply-side choices, the effect of government borrowing on economic growth depends on how amounts borrowed are used relative to what would have otherwise been done with those savings (i.e., an increase in private investment or net exports) if such borrowing had not taken place. As shown in equation (3), economic growth, or the change ( \u0394 ) in output ( Y ), is a function ( f ) of the stock of labor ( L , or the number of people working and hours that they work), the stock of capital ( K , which includes equipment, machines, and all other nonlabor factors), and the knowledge and technological capability (A) that determines the productivity of labor and capital.", "(3) \u0394Y= f(\u0394L, \u0394K, \u0394A)", "Assuming that the stock of labor is insensitive to fiscal policy choices, the effect of federal debt on economic growth depends on how the additional government activity affects the capital stock and productivity of labor and capital relative to what would have happened had amounts borrowed been invested privately or increased net exports. If that government activity (debt-financed spending) contributes to those factors more than the economic activity it replaced, than that debt financing will have had a positive effect on future economic growth (or potential). Alternatively, if such activity contributes less to those factors than the replaced private investment and net exports, it will reduce long-term economic potential.", "Changes in federal debt levels shift economic resources across time periods, a process sometimes described as an intertemporal transfer . Federal debt issuances represent an increase in the current level of federal resources and a decrease in future federal resources. Net interest payments, or the total interest payments made by the federal government (to creditors) on borrowed money less interest payments received (from individuals and institutions borrowing from the federal government or debtors), may be thought of as the total expense associated with past federal borrowing. Those resources cannot be allocated to other government services. ", "Total borrowing is constrained by the money available for investment (savings in dollars) at a given point in time. This limit means that the amount of federal debt relative to output cannot increase indefinitely. The trajectory of federal debt is therefore thought to be unsustainable if debt taken as a share of output (measured in this report with gross domestic product, or GDP) rises continuously in long-term projections. This happens when growth in the stock of debt outpaces total economic growth, which can cause a variety of adverse outcomes, including reduced output, increased unemployment, higher inflation, higher private interest rates, and currency devaluation. ", "Recent international experiences speak to the complexity of borrowing capacity. Both Greece and Japan experienced rapid growth in government debt in the past decade. Organization for Economic Co-operation and Development (OECD) data on general government debt (including municipal government debt) indicate that Greek debt rose from 115% of GDP in 2006 to 189% of GDP in 2017, while Japanese debt rose from 180% of GDP to 234% of GDP over the same time period. A loss in market confidence in Greek debt led to a severe recession, with GDP contracting by 9 percentage points in 2011 and long-term interest rates reaching 22% in 2012. Japanese borrowing was viewed to be more sustainable despite being higher, with relatively flat GDP levels and long-term interest rates close to zero in recent years. Among 31 OECD countries, the United States had the fifth-largest level of general government debt (136% of GDP, including debt from state and local governments) in 2017, the most recent year for which full data are available."], "subsections": []}, {"section_title": "How the Economy Contributes to Deficits", "paragraphs": ["The deficit's cyclical pattern can be attributed in part to \"automatic stabilizers,\" or spending programs and tax provisions that cause the budget deficit to move in tandem with the business cycle without any change in law. More robust economic periods generally produce lower net deficits (or higher net surpluses), due to increases in receipts (from greater tax revenues) and reduced expenditures (from decreased demand for public assistance). The opposite effect occurs during recessions: as incomes and employment fall, the existing structure of the federal tax system automatically collects less revenue, and spending on mandatory income security programs, such as unemployment insurance, automatically rises. CBO estimates that the share of the deficit attributable to automatic stabilizers fell from 1.9% of GDP in FY2010 to 0.0% of GDP in FY2018. In other words, the budget deficit recorded in FY2018 (3.8% of GDP) is nearly identical to the \"structural deficit\" that economists would expect with automatic stabilizer effects removed from the budget.", " Figure 3 shows the real economic growth (as a percentage on the horizontal axis) and the federal budget outcome (as a percentage of GDP, on the vertical axis) in each fiscal year from FY1969 through FY2018. The positive correlation between economic outcomes and budget outcomes is picked up by the general direction of the trend line from the lower left part of the graph to the upper right area. "], "subsections": []}, {"section_title": "How the Economy Contributes to Debt", "paragraphs": ["All else equal, higher levels of nominal GDP make a given amount of debt easier to repay by eroding its real value. For example, the highest measurement of debt since 1940 occurred in 1946, when the federal debt level was 118.9% of GDP, or $271 billion in (nominal) FY1946 dollars. In contrast, $271 billion was equivalent to only 1.3% of GDP in FY2018. Increases in nominal GDP may be caused by productivity increases, economic inflation\u2014which measures the purchasing power of currency\u2014or a combination of each factor.", "Though changes in economic growth rates typically have a relatively small effect on real debt levels in the short run, long-run changes in economic productivity can have a significant effect on the trajectory and sustainability of the debt burden. For instance, from FY2009 through FY2018, federal deficits averaged 5.3% of GDP, and real economic growth averaged 1.76% per year over the same period; those factors combined to increase federal publicly held debt from 39% of GDP at the beginning of FY2008 to 78% of GDP at the end of FY2018. Though real deficits were actually larger from FY1943 to FY1952 (averaging 7.3% of GDP), robust real economic growth over that period (3.6% per year) meant that the change in publicly held debt in that decade was smaller (45% of GDP to 60% to GDP) than in the FY2009-FY2018 period."], "subsections": []}]}, {"section_title": "Deficit and Debt Outlook", "paragraphs": ["The FY2018 real deficit equaled 3.8% of GDP, which was higher than the average federal deficit from FY1969 to FY2018 (2.9% of GDP). Both real deficits and real debt are projected to increase over the course of the 10-year budget window, which runs through FY2029. In its latest economic forecast, the CBO projected that the total burden of U.S. debt held by the public would steadily increase over the course of the budget window, from 77.8% of GDP in FY2018 to 92.7% of GDP in FY2029. ", " Table 2 provides the most recent forecasts for publicly held debt issued by the CBO. Each forecast projects an increase in publicly held debt over the next 5, 10, and 25 fiscal years.", "The CBO baseline assumes that current law continues as scheduled. Specifically, the CBO baseline assumes that discretionary budget authority from FY2020 through FY2021 will be restricted by the caps created by the Budget Control Act (BCA; P.L. 112-25 ), as amended, and that certain tax policy changes enacted in the 2017 tax revision ( P.L. 115-97 ) and in other laws will expire as scheduled under current law. CBO also provides alternative projections where such assumptions are revised. If discretionary spending increases with inflation after FY2019, instead of proceeding in accordance with the limits instituted by the BCA, and if tax reductions in the 2017 tax revision are extended, CBO projects that federal debt held by the public would increase to 97% of GDP by FY2029. ", "CBO also produces a long-term baseline that uses a number of additional assumptions to extend its standard baseline an additional 20 years (thus the 2018 long-term baseline runs through FY2049). The current long-term forecast projects that publicly held federal debt will equal 147% of GDP in FY2049, which would exceed the highest stock of federal debt experienced in the FY1940-FY2018 period (106% of GDP in FY1946).", "CBO projects increases in both interest rates and publicly held federal debt over the next 10 years, leading to a significant rise in U.S. net interest payments. As noted above, CBO projects that publicly held federal debt will rise from 77.8% of GDP in FY2018 to 92.7% of GDP in FY2029, and projects that the average interest rate on three-month Treasury bills will rise from 1.66% in FY2017 to 2.81% in FY2029. Those factors combine to generate federal net interest payments of 3.0% of GDP in FY2029 under the CBO projections, which would be just under the highest amount paid from FY1940 through FY2017 (3.2% of GDP in FY1991). "], "subsections": [{"section_title": "International Context", "paragraphs": ["It may be useful to compare the recent U.S. federal borrowing trajectory with the practices of international governments, because future interest rate and fiscal space considerations will both be affected by the behavior of other major actors. Table 3 includes the general government debt history and projections for G-7 countries and the European Area from FY2000 to FY2023.", "The worldwide impact of the Great Recession led to increased general gross debt levels for all G-7 countries in 2013 relative to their 2000-2009 average. As shown in Table 3 , U.S. debt levels rose by 40% of GDP over that time period, which was larger than increases in Canada and the European Area but smaller than rises in the United Kingdom and Japan. General debt levels largely stabilized from 2013 to 2018, with decreases in Germany and the European Area and small increases in other countries. ", "Future projections of debt included in Table 3 are characterized by a divergence between U.S. general gross debt levels and those in other G-7 countries. The IMF forecast projects that U.S. general gross debt will rise from 106% to 117% from 2018 to 2023, while those same projections forecast a decrease in debt owed by all other G-7 governments and in the European Area. ", "Addressing the potential consequences of those projections will likely involve policy adjustments that reduce future budget deficits, either through tax increases, reductions in spending, or a combination of the two. Under CBO's extended baseline, maintaining the debt-to-GDP ratio at today's level (78%) in FY2048 would require an immediate and permanent cut in noninterest spending, increase in revenues, or some combination of the two in the amount of 1.9% of GDP (or about $400 billion in FY2018 alone) in each year. Maintaining this debt-to-GDP ratio beyond FY2047 would require additional deficit reduction. If policymakers wanted to lower future debt levels relative to today, the annual spending reductions or revenue increases would have to be larger. For example, in order to bring debt as a percentage of GDP in FY2048 down to its historical average over the past 50 years (40% of GDP), spending reductions or revenue increases or some combination of the two would need to generate net savings of roughly 3.0% of GDP (or $630 billion in FY2018 alone) in each year."], "subsections": []}]}]}}
{"id": "R45733", "title": "Combating Corruption in Latin America: Congressional Considerations", "released_date": "2019-05-21T00:00:00", "summary": ["Corruption of public officials in Latin America continues to be a prominent political concern. In the past few years, 11 presidents and former presidents in Latin America have been forced from office, jailed, or are under investigation for corruption. As in previous years, Transparency International's Corruption Perceptions Index covering 2018 found that the majority of respondents in several Latin American nations believed that corruption was increasing. Several analysts have suggested that heightened awareness of corruption in Latin America may be due to several possible factors: the growing use of social media to reveal violations and mobilize citizens, greater media and investor scrutiny, or, in some cases, judicial and legislative investigations. Moreover, as expectations for good government tend to rise with greater affluence, the expanding middle class in Latin America has sought more integrity from its politicians. U.S. congressional interest in addressing corruption comes at a time of this heightened rejection of corruption in public office across several Latin American and Caribbean countries.", "Whether or not the perception that corruption is increasing is accurate, it is nevertheless fueling civil society efforts to combat corrupt behavior and demand greater accountability. Voter discontent and outright indignation has focused on bribery and the economic consequences of official corruption, diminished public services, and the link of public corruption to organized crime and criminal impunity. In some countries, rejection of tainted political parties and leaders from across the spectrum has challenged public confidence in governmental legitimacy. In some cases, condemnation of corruption has helped to usher in populist presidents. For example, a populist of the left won Mexico's election and of the right Brazil's in 2018, as winning candidates appealed to end corruption and overcome political paralysis.", "The 2017 U.S. National Security Strategy characterizes corruption as a threat to the United States because criminals and terrorists may thrive under governments with rampant corruption. Studies indicate that corruption lowers productivity and mars competitiveness in developing economies. When it is systemic, it can spur migration and reduce GDP measurably.", "The U.S. government has used several policy tools to combat corruption. Among them are sanctions (asset blocking and visa restrictions) against leaders and other public officials to punish and deter corrupt practices, and programming and incentives to adopt anti-corruption best practices. The United States has also provided foreign assistance to some countries to promote clean or \"good\" government goals. U.S. efforts include assistance to strengthen the rule of law and judicial independence, law enforcement training, programs to institutionalize open and transparent public sector procurement and other clean government practices, and efforts to tap private-sector knowledge to combat corruption.", "This report examines U.S. strategies to help allies achieve anti-corruption goals, which were once again affirmed at the Summit of the Americas held in Peru in April 2018, with the theme of \"Democratic Governance against Corruption.\" The case studies in the report explore:", "Brazil's collaboration with the U.S. Department of Justice and other international partners to expand investigations and use tools such as plea bargaining to secure convictions; Mexico's efforts to strengthen protections for journalists and to protect investigative journalism generally, and mixed efforts to implement comprehensive reforms approved by Mexico's legislature; and the experiences of Honduras and Guatemala with multilateral anti-corruption bodies to bolster weak domestic institutions, although leaders investigated by these bodies have tried to shutter them.", "Some analysts maintain that U.S. funding for \"anti-corruption\" programming has been too limited, noting that by some definitions, worldwide spending in recent years has not exceeded $115 million annually. Recent congressional support for anti-corruption efforts includes: training of police and justice personnel, backing for the Trump Administration's use of targeted sanctions, and other efforts to condition assistance. Policy debates have also highlighted the importance of combating corruption related to trade and investment. The 116th Congress may consider the United States-Mexico-Canada Agreement (USMCA), which would revise the NAFTA trade agreement, and contains a new chapter on anti-corruption measures."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The majority of Latin American and Caribbean countries are functional democracies, but institutional weaknesses and widespread public corruption in many of these countries have undermined effective governance and sparked protest and demands for greater transparency. From a U.S. perspective, widespread corruption in Latin America is a potential threat to regional security, has a symbiotic relationship with violent crime, and can be a stimulus for migration.", "This report examines how anti-corruption strategies in U.S. policy and legislation initially evolved from a desire to level the playing field for corporations working in the developing world. At first, U.S. corporations were regulated so they could not bribe or extort to win contracts, and then the focus expanded to helping build more effective institutions and the rule of law in developing countries to ensure more fair, predictable, and transparent systems. The report examines how corruption contributes to wasting public monies, distorting electoral outcomes, and reinforcing criminal structures. Although the fight against corruption is a global effort, this report focuses more closely on U.S. interests in fighting corruption in the region, and how U.S. policy and assistance programs have developed to address that goal. Contemporary anti-corruption efforts in Brazil, Mexico, and Central America are examined as case studies. The report closes with considerations for Congress in conducting its oversight role over U.S. funded anti-corruption efforts in the region and pursuing the policy objective of broadening the rule of law and encouraging good government."], "subsections": []}, {"section_title": "Background", "paragraphs": ["In the wake of numerous scandals, particularly regarding the multi-country scandal involving the Odebrecht corporation, corruption has become a searing, top-level concern in many Latin American nations, with implications for U.S. policy. In past decades, public rejection of corruption has risen and then crested and fallen back, sometimes to a tacit toleration of bribery and other corruption as the way of politics. Some critics maintain that corruption is so entrenched that it is now endemic in the region and forms the primary path to political power. The number of grand-scale scandals exposed in recent years in the region, such as payoff schemes involving high court justices and top-level officials, has led some voters to conclude that all parties and politicians are corrupt, resulting in presidents and vice presidents being pushed from office and traditional political parties being viewed as corrupt and illegitimate.", "Some analysts maintain that chronic corruption diminishes support for democracy and stokes cynicism about the integrity of politics. However, 2018 saw prominent anti-corruption candidates and campaigns win elections across the region, with populist and anti-establishment fervor marking campaigns in Mexico, Brazil, and several other countries. In these contests, leading candidates abandoned traditional parties sullied by corruption allegations. For instance, in Mexico, the decades-long dominance of the Institutional Revolutionary Party (PRI) \u2014displaced in 2000, but resurgent in 2012\u2014was again swept out in Mexico's July 2018 national elections by the National Regeneration Party, or MORENA, founded four years earlier. Throughout the region, winning candidates of the left and the right\u2014as in Mexico and Brazil\u2014embraced anti-establishment platforms that appealed to voter disillusionment with corrupt elites.", "In its global perceptions survey, Transparency International (TI) has found that a majority of Latin Americans tend to believe pervasive public corruption exists and is expanding its reach. The sense of widespread corruption may be sparking a civil society rejection of the status quo and a deeper commitment to combat corrupt behavior and demand accountability (see textbox).", "Grand corruption involving top political leaders has touched every nearly every partof Latin America, generating a wave of anti-corruption activism. In the past, such demonstrations have proven ephemeral, quickly fading as the systemic nature of the problem has left citizens resigned to the status quo. These anti-corruption campaigns may prove more enduring, however, as civil society organizations are attempting to build on their preliminary successes by pushing for institutional reforms to enhance transparency and accountability throughout the public sector.", "Regarding the relationship of perceptions of corruption as an accurate indicator of actual acts of corruption or prevalence of those acts, TI has in the past married the two. In the 20 Latin American nations polled in the Corruption Perceptions Index (CPI) for 2016, TI said that respondents identified politicians, political parties, and police as the most corrupt sectors of their societies. The most frequently cited offenses were graft, influence peddling, extortion, bribe solicitation, money laundering, and political finance violations (for 2016 and 2017 CPI results for Latin America and the Caribbean, see Figure 1 ). One of the 2016 surveys used to establish TI's country rankings asked whether respondents had paid a bribe for a public service over the past 12 months. Nearly one-third confirmed they had paid a bribe to receive a basic public service, such as health care or education.", "Another index, called the World Justice Project's Rule of Law Index (WJP Rule of Law Index), reports that corruption levels vary significantly across the region, although corruption appears to be both widespread and endemic. The Rule of Law Index identifies several indicators for a regional ranking related to governance. At the region's apex and exhibiting the strongest rule of law sit Chile, Costa Rica, and, at the top, Uruguay. The region's least successful on the 2019 Rule of Law Index are Nicaragua, Honduras, Bolivia, and, at the bottom, Venezuela. However, on the indicator of \"absence of corruption\" alone, the region's worst with regard to the metrics of bribery, improper influence by public or private interests, and misappropriation of public funds, were: Peru, Venezuela, Mexico, and at the bottom, Bolivia. The World Justice Project asserts that full, functioning democracies evolve slowly and anti-corruption programs able to influence and transform the status quo may take years to show results. ", "Corruption patterns vary considerably from country to country. Transparency International and other regional surveys, such as the Latinobar\u00f3meter, have found the divergence between countries is more pronounced in Latin America and the Caribbean than in other regions. Some commentators argue that lower-level corruption is simpler to identify and root out. More widespread and higher levels of corruption are more difficult to contain and have powerful forces protecting them. For instance, compromised justice systems, apparent in recent scandals in Mexico, Colombia, and Peru, result in impunity for powerful defendants and inhibit the number of successfully completed prosecutions. This may result in diminished belief in democratic legitimacy and the rule of law. The confidence or expectation of fairness is replaced with mistrust when bribes are routinely demanded by the police; there is ample evidence of political kickback schemes; and evidence such as recordings shows the suborning of court officials and judges. ", "In the Western Hemisphere, populist leaders including Nicaragua's Daniel Ortega and Venezuela's Nicol\u00e1s Maduro have resorted to tactics that undermine democratic institutions like the free press and an independent judiciary, which, when functioning, can help prevent corruption. In Peru, President Pedro Pablo Kuczynski stepped down in March 2018 to avoid impeachment for allegedly taking Odebrecht bribes right before he was to host a Summit of the Americas focused on eradicating corruption. In Mexico and Brazil in 2018, and in El Salvador early in 2019, presidential candidates campaigned successfully against traditional political parties deemed corrupt. In 2018, Mexico's long-dominant Institutional Revolutionary Party (PRI), was dogged by corruption allegations and performed poorly in congressional and presidential elections.", "Political parties are crucial to a competitive democracy, but when they are no longer accountable they lose their primary function of placing a check on the consolidation and abuse of power. Disillusioned and cynical voters who have regularly experienced breaches by their governments, leaders or political parties, can lose trust that is not easily restored. The effort needed to rebuild a country's democratic institutions, such as a functioning justice system, takes patience and political will that is hard to sustain over time. Anti-corruption efforts can face towering political opposition and significant undercurrents that undercut prosecution and future transparency.", "The economic costs related to systemic corruption are well researched. In 2018, the costs to Mexico of corruption were estimated to be as high as 5% of the country's GDP and in Peru and Colombia as much as 10%. Many analysts contend corruption also exacerbates inequality (a persistent feature of several Latin American and Caribbean societies) which increases instability. ", "Many observers have noted the unusual level of activism on anti-corruption reaching nearly every corner of the region in recent years and wondered whether it will endure and produce lasting reform. They question whether this current resistance to an existing culture of impunity can be prevented from falling into anti-democratic reaction, or, once again, slipping into resignation.", "In the realm of foreign assistance and especially investment, U.S. competitors, including China and to a lesser extent Russia, are using investment in the region, such as infrastructure or energy development projects, not to strengthen recipient governments, but to further their own economic interests. These projects can be beset by hidden costs and have unknown beneficiaries, while they lack public oversight. Greater transparency on bidding and public finance will help give the general public greater capacity to assess them. U.S. programs to strengthen the rule of law and increase governmental transparency may directly benefit recipient nations in Latin America and the Caribbean by extending the institutional foundation for sustained economic development. "], "subsections": [{"section_title": "Early Anti-corruption Approaches", "paragraphs": ["U.S. foreign assistance programs to bolster rule of law, encourage good governance, and eliminate bribery, extortion, and graft have been common in Latin America for about three decades. Anti-corruption programming sponsored by the United States and major international financial institutions grew out of ferment in the 1970s, when the long-time practice of businesses and foreign corporations paying bribes to gain contracts in developing countries was exposed (see textbox on Select International Efforts to Combat Corruption). Controlling bribery and payments to foreign governments by businesses became the focus, for the first time, of U.S. legislative reform, the Foreign Corrupt Practices Act (FCPA), in 1977. The law ( P.L. 95-213 , Title 1) prohibits U.S. corporate bribery of foreign officials. However, this change initially raised concern that the new policy could disadvantage U.S. corporations in comparison to firms from other countries. ", "In 1996, the Organization of American States (OAS) adopted the Inter-American Convention Against Corruption (IACAC), the world's first anti-corruption treaty. The IACAC provides OAS member states with a set of legal tools and an institutional framework to prevent, detect, punish, and eradicate corruption. The convention covers criminalization of corruption, international cooperation, asset recovery, and considers preventive roles for business, civil society and nongovernmental organizations (NGOs) in curtailing corruption. All 34 active OAS member states are party to the IACAC, including the United States, which ratified the convention in 2000 (Treaty Doc. 105-39). The Convention requires signatory states to penalize active and passive corruption, transnational corruption, and improper use of confidential information. However, few high-level public office holders in the region have been brought to justice, especially those who are financially and politically powerful. Signatories' implementation of the IACAC treaty is largely voluntary and relies on sustained political will. (See Appendix B for background on the implementation of IACAC).", "In 1997, the Organization for Economic Cooperation and Development (OECD), with strong support from the United States, adopted the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Entering into force in 1999 and binding only upon OECD member nations, the Convention on Bribery has actually had a large impact in Latin America, even though only Mexico and Chile at the time were OECD members. Subsequently, Argentina, Brazil, Colombia, and Costa Rica adopted the measures and other countries changed their laws to begin to conform to the requirements of the 1996 OAS and 1997 OECD conventions. ", "Some of the innovations from the anti-corruption conventions allowed legislatures in Latin America to sidestep the philosophical question of the capacity of a legal entity (e.g., a corporation) to have a will or intent to commit a crime. With corporations legally capable of committing a crime (such as bribery of local or national officials) then culpability could be assessed. Another method to encourage prevention of corruption was adoption of a \"safe harbor\" defense for companies, providing them a motive to reform their practices through greater internal corruption safeguards and monitoring. ", "If a business implemented staunch policies to prevent bribery\u2014such as designating an officer to monitor operations for potential corruption who reports twice a year to the top officer or CEO\u2014then the business could avoid criminal liability, even if individuals inside the corporation were caught in bribery or graft. This policy rewards self-monitoring by offering a buffer from liability as an inducement for self-policing and prevention.", "Since the early 1990s, the OAS has convened the Summit of the Americas to address common agenda items in the Western Hemisphere. Both President Barack Obama and President George W. Bush supported initiatives and programs aimed at increasing transparency and accountability in governance to help achieve the overarching U.S. international policy goal of fostering good governance in the region. The Summit convened in April 2018, in Lima, Peru, attended by Vice President Pence rather than President Trump, had the theme of \"Democratic Governance against Corruption,\" echoing a long-term concern with public corruption eroding support for democracy. ", "In the past five years, as U.S. enforcement of the FCPA has increased, it has been used to expand the reach of U.S. extraterritorial jurisdiction, as evidenced in support to the Odebrecht case. Several countries are considering a similar statute, or FCPA-like laws to prohibit corporate bribery, including nations as diverse as India, Thailand, and France. In addition, the U.S. Federal Bureau of Investigation opened a unit on international corruption in Miami, Florida, in February 2019, with a focus on violations of the Foreign Corrupt Practices Act."], "subsections": []}, {"section_title": "The Fight Against Corruption Goes Global16", "paragraphs": ["Anti-corruption has emerged gradually on the international agenda over recent decades. Factors contributing to its growing prominence as an international policy concern include domestic pressure in many countries to curb political corruption, business risks associated with corruption exposure in a globalized economy, and the undermining impact of official corruption on economic development and foreign aid. ", "U.S. advocacy also appears to have played a significant role internationally, although approaches to combating corruption vary widely by country. International standards can provide guidelines and a framework for domestic reform and, critically, mobilize international pressure to enact and implement anti-corruption policies. Due to widespread links between corruption and natural resource exploitation, one prominent area for broadening accountability is in the use of natural resources. Many countries endowed with minerals and resources in demand by more developed economies have sought to put in place voluntary transparency measures and public monitoring of natural resource revenue and expenditure flows to ensure the assets gained will go for public purposes. Transparency measures to prevent resource diversion through corruption and mismanagement have included enactment of broader accountability-focused legal reforms, such as mandatory state budget transparency and accountability measures, freedom of information laws, and the formalization of citizens' participatory rights in state decisionmaking and regulation of extractive industries. ", "For many countries in Latin America and the Caribbean, extractive resources provide a critical source of government revenue. The textbox below identifies some of the important global anti-corruption efforts, such as the Extractive Industries Transparency Initiative, which some Latin American countries have adopted."], "subsections": []}, {"section_title": "Corruption Scandals and Popular Response in 2018", "paragraphs": ["Although protests decrying corruption in public office have occurred since 2015 in Brazil, Mexico, and in many countries of Central America, the events of 2018 suggest that corruption prosecutions and revelations during the year significantly increased. As a result, numerous anti-corruption candidates and campaigns played central roles during the 2018 elections, and protests against corrupt leaders erupted in countries throughout the region. (For more details, see the timeline in Appendix C ). ", "Brazil . In Brazil, a sprawling corruption investigation underway since 2014 known as Lavo Jato (Car Wash, in English) implicated much of the political class. Brazil's multinational construction firm Odebrecht was one of the firms involved, and, in a landmark plea agreement, admitted to paying millions in bribes to politicians and office holders throughout Latin America. Odebrecht executives, in an agreement with authorities in the United States, Brazil, and Switzerland, admitted to paying some $788 million in bribes to secure public contracts worth more than $3.3 billion. The fallout extended beyond Brazil to countries such as Colombia, the Dominican Republic, Ecuador, Panama, and Peru. Both inside Brazil and in other countries, successful prosecution of cases connected to the Odebrecht plea deal received support from the U.S. Department of Justice (see Brazil case study below). ", "In January 2019, Transparency International endorsed a comprehensive package of 70 reforms developed in conjunction with numerous public and private partners inside Brazil to set the country on a path to restore legitimacy to its political institutions. According to Transparency: ", "The anti-corruption package includes proposals for institutional reforms, draft bills, constitutional amendments, draft resolutions and other rules to control corruption and tackle its systemic roots. ", "Some of those proposals were incorporated into draft laws that Minister of Justice and Public Security S\u00e9rgio Moro presented to the Brazilian Congress in February 2019. Moro presided over the Car Wash investigation as a federal judge prior to being offered the Ministry of Justice and Public Security by President-elect Bolsonaro.", "In Brazil, former President Michel Temer (2016-2018), who was protected from investigation while in office, was arrested on charges of bribery and money laundering in March 2019. According to the Brazilian police, during his vice presidency in 2014 Temer took more than $2 million from Odebrecht to benefit himself and his Brazilian Democratic Movement Party. In addition, an array of former high-level government officials in Brazil, such as A\u00e9cio Neves, a former senator, governor, and 2014 presidential candidate for the Brazilian Social Democracy Party, face investigations for taking Odebrecht bribes for favorable consideration of legislation preferred by Odebrecht. Former President Luiz In\u00e1cio Lula da Silva (2003-2010) has been sentenced to two 12-year prison terms for steering contracts to Odebrecht and another Brazilian construction firm, OAS, in exchange for renovated properties. ", "Venezuela . In 2018, an exodus of desperate Venezuelans continued to leave their country, which was under the sway of an authoritarian government that had asserted its power through human rights abuses and significant corruption from drug trafficking and other crimes. A May 2018 report by Insight Crime identified more than 120 high-level Venezuelan officials who had engaged in criminal activity. In Venezuela, Odebrecht reportedly provided bribes of more than $98 million to President Nicol\u00e1s Maduro and his government to gain priority treatment. When President Maduro ousted his Attorney General Luisa Ortega, she reported the President solicited a $50 million bribe directly from the Brazilian construction firm. An Odebrecht executive based in Venezuela maintains that the company only paid Maduro $35 million, and other reports state that Odebrecht also sent contributions to Maduro's political opposition. "], "subsections": [{"section_title": "The Andean Region", "paragraphs": ["Ecuador . In late 2017, Ecuador's vice president, Jorge Gl\u00e1s, was convicted of taking bribes exceeding $13 million from the Odebrecht firm when he served under former President Rafael Correa (2007-2017). He was removed from office, convicted, and given a seven-year prison sentence, which he is currently serving. Former President Correa, who currently resides in Europe with his Belgian wife, is also wanted by the current government of President Len\u00edn Moreno for arranging the kidnapping of an Ecuadorian official who was a political opponent in 2012. Other charges against Correa include economic mismanagement during his 10-year tenure that involves his ties to Odebrecht. ", "Colombia . High-level corruption networks have been exposed since March 2018, when Colombia's Supreme Court sentenced the country's top anti-corruption official, Luis Gustavo Moreno, to four years in prison for corruption. An investigation by Colombia's Attorney General's office found a corruption network pervading the national justice system involving high court justices receiving bribes from influential defendants. In late 2018, Colombia's current Attorney General, N\u00e9stor Humberto Mart\u00ednez, was linked to Odebrecht bribes when he served as legal counsel to the Aval Group, a New York Stock Exchange-listed conglomerate run by the Colombia's wealthiest individual. In May 2019, Mart\u00ednez announced his resignation but for an unrelated matter. Odebrecht executives admitted in their guilty plea that they had provided $32.5 million in bribes to facilitate the building of Colombia's Ruta del Sol highway and other infrastructure projects. A Colombian senator, who had accepted some bribes, cooperated in the prosecution to further expose the scheme. It ensnared a number of important Colombian officials in the previous administrations of President Juan Manuel Santos (2010-2018) and President \u00c1lvaro Uribe (2002-2010). A former governor, Sergio Fajardo, and a left-centrist presidential candidate, dedicated his 2018 presidential campaign to combating corruption, which became the impetus for a popular referendum promoting anti-corruption, promoted by the candidate who ran as Fajardo's vice president.", "Peru . The Odebrecht campaign-finance and bribery scandals upset political relations nowhere more than in Peru. Several high-profile political figures continue to be under investigation. Four former presidents of Peru are linked to the Odebrecht scandal and other corruption charges. President Pedro Pablo Kuczynski (2016-2018) stepped down in March 2018 to avoid impeachment, but may continue to be held in preventive detention for up to three years. The Public Ministry opened an investigation into Kuczynski's alleged involvement in buying votes to avoid impeachment as well as his ties to bribery by the Brazilian construction firm. Former president Ollanta Humala (2011-2016) and first lady Nadine Heredia, while released from pretrial detention, are under investigation for money laundering and corruption charges. Peru's government has sought to extradite former president Alejandro Toledo (2001-2006) from the United States for allegedly accepting bribes during his administration. In April 2019, former Peruvian president Alan Garcia (who served from 1985 to 1990 and 2006 to 2011) shot himself during his arrest on Odebrecht-related charges, and died shortly afterwards. His private secretary and other officials in his administrations are being closely investigated for allegedly taking bribes from Odebrecht.", "In October 2018, a judge ordered former presidential candidate and congressional leader Keiko Fujimori to pretrial detention for allegedly laundering illegal campaign contributions from Odebrecht. In his government's fiscal year 2019 budget, Peruvian President Vizcarra expanded funding to the judiciary by 11% to develop additional mechanisms to combat corruption. ", "Referenda in the Andes. Voters in three Andean nations considered anti-corruption measures in public referenda held in 2018: in Ecuador in February, Colombia in August, and Peru in December. The Ecuador referendum approved all seven measures on the ballot, some of which tackled public corruption. The Colombian referendum, in which more than 11 million voted, was disqualified for not reaching its high voter threshold requirements (it was also the fourth national vote held in 2018). Although requirements for the referendum were not met, the seven measures on Colombia's ballot received high approval levels. New President Iv\u00e1n Duque supported most of the measures, and pledged to introduce some of them in legislation during his four-year term, although none of the measures that the Administration introduced in the first four months of 2019 passed the Colombian Congress. When Peru's President Mart\u00edn Vizcarra came to office after president Kuczynski resigned in March 2018 he committed to fighting public corruption. The December 10, 2018, referendum in Peru that Vizcarra steered to a vote resulted in a ban on reelection of Members of Congress, a reform of the body that appoints members of the judiciary, and measures to regulate how political parties are financed. The only measure that failed was a controversial proposal to reestablish a bicameral Congress. "], "subsections": []}, {"section_title": "Central America", "paragraphs": ["In 2018, anti-corruption institutions in Guatemala and Honduras faced inhospitable governments opposed to their mission once charges got too close to either themselves, family members, or close political colleagues. The U.N.'s International Commission against Impunity in Guatemala (CICIG), established in 2006, was embraced by President Jimmy Morales when he took office in 2016, but when CICIG began to scrutinize more closely allegations of financing irregularities in his electoral campaign, Morales's government became openly hostile to extending CICIG's mandate. In early January 2019, President Morales abruptly ended CICIG's mandate, prematurely disregarding the stated will of the nation's top court and instigating a constitutional standoff (see case study). In 2016, the Organization of American States worked with the Honduran government to establish a similar organization, the Mission to Support the Fight against Corruption and Impunity in Honduras (MACCIH). The Honduran government has also sought to undermine MACCIH over the past year. ", "Dominican Republic. In May 2017, the attorney general issued indictments for 14 people, including a cabinet minister (who then resigned) and two senators, on charges of receiving $92 million in bribes from Odebrecht in exchange for construction contracts. The government maintains that the investigation is ongoing, but none of those accused were sentenced to prison, and in June 2018, the attorney general dropped charges against seven of the 14 defendants. Others linked with the Odebrecht scandal include a senator and former public works minister, both of whom belong to the dominant Dominican Liberation Party. Reportedly, resolution of their cases could tarnish the party's image in the run-up to the 2020 national elections.", "El Salvador . Former president of El Salvador Mauricio Funes (2009-2014) was found guilty of massive illicit enrichment during his time in office. After fleeing to Nicaragua, he was granted asylum by President Daniel Ortega in 2018. Former Salvadoran president Anthony Saca (2004-2009), Funes's predecessor from a rightwing party, pled guilty to similar charges and was convicted and sentenced to 10 years in prison in El Salvador in September 2018; former first lady Ana Ligia de Saca, announced in April 2019 she has reached a plea deal to avoid prison for her role in laundering $25 million in public money.", "Panama. In Panama, several high-profile politicians have faced charges of illicit financial gains. For example, U.S. court documents contend that Odebrecht reportedly paid more than $59 million in bribe payments in Panama to secure public works contracts between 2010 and 2014. In August 2017, Odebrecht agreed to pay the Panamanian government $220 million in fines. Former President Ricardo Martinelli (2009-2014) was extradited to Panama from the United States for charges of using public funds to spy on political opponents during his administration. In late 2018, two of Martinelli's sons were arrested in the United States for illegal actions, including accusations of taking Odebrecht bribes. Top members of the Martinelli government are also being investigated for receiving bribes from Odebrecht (e.g., former Minister of the Economy Frank de Lima).", "Mexico . In 2018, Mexican President Andr\u00e9s Manuel L\u00f3pez Obrador campaigned successfully for office by attacking corruption and promising to remove corrupt elites. However, how the President will implement his campaign pledges remains unclear. L\u00f3pez Obrador was inaugurated in December 2018, and his new Attorney General announced in May 2019 that he planned to prioritize Odebrecht. The former president of the state oil company, Petr\u00f3leos Mexicanos (Pemex), Emilio Lozoya Austin, has been accused of a scheme involving ghost companies and bribery by Odebrecht provided to Lozoya to help fund electoral campaigns of the historically dominant Institutional Revolutionary Party (PRI). In mid-February 2019, L\u00f3pez Obrador maintained that the cases against Mexican officials begun under his predecessor, President Enrique Pe\u00f1a Nieto of the PRI party, would have to be re-launched. ", "In Mexico, corruption investigations of 20 former state governors, most from the PRI, diminished the party's legacy. Following the end of the term of PRI President Enrique Pe\u00f1a Nieto in late 2018, the historic party reportedly is considering changing its name due to its poor showing in legislative and presidential elections. Among the PRI party governors under investigation or in jail in Mexico are former Veracruz Governor Javier Duarte (2010-2016) who was arrested in Guatemala and extradited to Mexico in August 2017. Following his trial in Mexico, he received a nine-year sentence in September 2018. Others are Governor Roberto Borge of Quintana Roo (2010-2016) who is wanted on charges of corruption and abuse of public office; Governor Tom\u00e1s Yarrington of Tamaulipas state along the U.S.-Mexico border with Texas, who was arrested in Italy and extradited to the United States for U.S. charges of money laundering and other corruption; and former PRI governor Cesar Duarte of the border state of Chihuahua, who fled Mexico and is an international fugitive wanted on a Red Notice by the International Criminal Police Organization, Interpol. ", "Santiago Narra, the former head of the Specialized Prosecutor's Office for Attention to Electoral Crimes (FEPADE), claims in a book published in January 2019 that the Pe\u00f1a Nieto administration was rife with corruption. According to Narra, governors made common practice of using intimidation and bribery to quash or co-opt dissent.", "Southern Cone", "Argentina . In Argentina during 2018 a large scandal surfaced called \"the Notebooks.\"\u00a0The name comes from notebooks belonging to a former government chauffeur, who allegedly recorded cash payments he ferried to the residence of Presidents N\u00e9stor Kirchner and Cristina Fernandez de Kirchner, who governed Argentina in succession from 2003 to 2015. The kickbacks to the Kirchners were allegedly in exchange for public works contracts approved between 2008 and 2015. The chauffeur's notebooks revealed an alleged bribery scheme totaling $160 million. In August 2018, federal authorities in Argentina arrested 12 former government officials and business executives on corruption-related charges. Fernandez de Kirchner has immunity from arrest as a sitting senator, but she can be prosecuted on the charges. \u00a0Other investigations into public works bribes directly tied to Odebrecht include investigations of Julio de Vido and Daniel Cameron, respectively the minister of planning under both N\u00e9stor Kirchner and Fernandez de Kirchner, and the energy secretary in the Fernandez Administration.\u00a0De Vido allegedly received bribes for road construction tenders in the President's home state of Santa Cruz and other projects. Energy Minister Cameron was allegedly involved in a gas pipeline expansion project that involved taking bribes in cooperation with the Brazilian construction mega-firm. In September 2018, Cristina Fern\u00e1ndez de Kirchner, who may be positioning herself to run again for president, was indicted on bribery charges alleging her involvement in taking some $69 million in bribes.", "Paraguay. Historically Paraguay has been plagued by corruption emerging from a chaotic political history. In the 20 th century, the landlocked country experienced a 35-year military dictatorship under General Alfredo Stroessner. Paraguay's legacy of dictatorship included one-party rule that endured until 2008. ", "President Mario Benito Abdo Ben\u00edtez, elected in April 2018, was a grandson of a general in the Stroessner cabinet, although he pledged to work toward greater transparency and not return to the days of nepotism and centralized rule. ", "A grassroots protest movement known as \" escraches , \" started by a disenchanted criminal lawyer in August 2018, has led to some prominent politicians, reportedly from parties across the political spectrum, choosing to resign rather than be humiliated. Youthful supporters say that the focus of these protests is to reduce impunity from the historically weak and unresponsive judicial institutions of the country that require identifying and shaming the accused to push the cases forward. Protest leaders maintain long-unaddressed cases have been taken up and prosecuted with unprecedented speed. However, critics question the ethics of using visible protests at homes of officials (whose homes are picketed and pelted with raw eggs), when these officials are only alleged to be corrupt or to have committed crimes, and some protests have turned violent. On April 24, 2019, Paraguay's Comptroller General resigned as it became evident that the Paraguayan senate planned to vote in favor of his impeachment on charges of corruption. The vote to impeach him was reportedly supported by President Abdo Ben\u00edtez."], "subsections": []}]}, {"section_title": "The Economics of Corruption and the Role of the Private Sector", "paragraphs": ["The World Economic Forum (WEF) has identified the inability of weak national institutions to cope with insecurity and prevent and punish corruption as a barrier to investment. According to the WEF's 2017-2018 Global Competitiveness Index , the largest economies in Latin America (Argentina, Brazil, Colombia, and Mexico) ranked below 100 out of 137 countries in the performance of their institutions. WEF recognizes Brazil for its efforts to use its judiciary to clean up government and punish bribery. On the other hand, El Salvador has received the lowest levels of foreign direct investment (FDI) in Central America over the past decade, with extensive insecurity and corruption cited as the primary reasons. Corruption constricts funds that should be available for legitimate socio-economic challenges, such as controlling violence and crime. On the other hand, criminal influence allowed to run rampant engenders instability that negatively affects economic growth. The worst-off victims of corruption tend to be the most marginal and therefore the most vulnerable.", "Some analysts maintain that private sector responses to corruption are often reactive rather than proactive and that in some countries businesses are part of the problem. Other analysts maintain that business leaders can be catalysts for demanding clean, non-corrupt governance and can serve as strong advocates for laws to prohibit bribery and extortion to end the distorted impact of corruption on competition. Private sector leaders have supported anti-bribery legislation in several of the more established Latin American democracies. In Mexico, the major business association for small and medium-sized businesses, COPARMEX, is advocating for full implementation of the National Anti-Corruption System, which began under the Pe\u00f1a Nieto government in 2017 (described in the Mexico case study). The business association supports establishing an independent prosecutor's office, one of the key features of the system. On the other hand, business leaders from Guatemala and Honduras have in many cases sought to weaken anti-corruption efforts and controls.", "The Inter-American Development Bank (IDB) report on anti-corruption, transparency and integrity in Latin America and the Caribbean called for an integrated approach for systemic change to reduce corruption. The report, published in 2018, describes earlier interventions encouraged by multilateral and regional institutions as \"uneven and partial.\" The report points out that the use of corruption indicators by the main rating agencies (Standard & Poor's, Moody's, and Fitch) are critically important for investment and loans available to a recipient country. ", "Typically, politicians receive payoffs in exchange for favors to aid their parties or campaigns that ultimately may distort public-works bidding (some for multi-billion dollar infrastructure projects). Levels of outside direct investment are also influenced by perceptions of public corruption. For instance, Chile has had one of the lowest levels of perceived corruption in Latin America, and was quick to correct a perception of increasing corruption when its record was tarnished by scandals between 2015 and 2017. Chile's reputation has helped it achieve both high growth and significant foreign direct investment."], "subsections": [{"section_title": "A Push Factor for Migration?", "paragraphs": ["Many scholars report that corruption affects productivity and lowers competitiveness; when it is systemic, corruption can reduce GDP. Public-sector corruption, widespread in many Latin American societies, may handicap Latin American growth, skew incentives, and erode public services. The active involvement of corrupt elites, whether from the private or public sector, may allow criminal networks to remain deeply embedded. Public-sector corruption can be a contributor to migration, since corruption that fosters criminality and corrodes the rule of law may be a factor in Central Americans leaving their countries of origin to migrate to the United States. In addition to economic factors, the growing reach of violent crime into their communities has been cited as an impetus to emigrate. Corruption hinders government efforts to address the factors that cause people to migrate, and undermines public confidence in state institutions. "], "subsections": []}]}, {"section_title": "The Links between Corruption, Violent Crime, and Impunity61", "paragraphs": ["Many governments in Latin America, particularly those in the Central America-Mexico drug transit zone through which 90% of U.S.-bound cocaine passes, suffer from weak and overwhelmed criminal justice systems. Weak criminal justice systems are unable to investigate and punish crimes and they are easily penetrated by bribery or intimidation. As a result, all manner of criminal behavior may increase, in a self-reinforcing cycle, due to lack of trust in the justice system, failure to invest in fixing the system to bring about improvements, and greater criminal impunity or non-prosecution of crimes. This continues to erode confidence in judicial authorities who are perceived to be \"captured\" by criminal networks. Lack of confidence in the justice system can affect the morale of criminal-justice personnel and further increase their susceptibility to corruption.", "This negative-feedback loop has contributed to Latin America having the highest homicide rate of any region in the world outside a war zone. The linkage between violence and corruption has led Latin Americans to protest the dire situation that they face in their communities, and has been an impetus for their support of anti-corruption campaigns and anti-crime candidates in recent elections. Venezuela, Guatemala, and Honduras, ranked in TI's 2018 Corruption Perceptions Index as highly corrupt by respondents, also registered some of the region's highest homicide rates. Correspondingly, these countries have some of the most-elevated emigration rates in the region, as families facing criminal threats leave rather than rely on security forces that they perceive as corrupt for protection. ", "In February 2019, the drug trafficking kingpin Joaqu\u00edn \"El Chapo\" Guzm\u00e1n who led Mexico's notorious Sinaloa cartel for decades, was convicted in New York on multiple counts of operating a continuing criminal enterprise. The charges included trafficking more than 440,000 pounds of cocaine into the United States, murder, acts of torture, kidnapping, and money laundering. According to the U.S. Drug Enforcement Administration (DEA), the Sinaloa Cartel has the most extensive reach of any transnational crime group into U.S. cities.", "In some of the trial's most incendiary testimony, U.S. government witnesses testified that former senior officials in the Mexican government took bribes from Guzm\u00e1n; one witness alleged that former president Pe\u00f1a Nieto (2012-2016) received a $100 million bribe from Guzm\u00e1n. The conclusion of the Guzm\u00e1n trial may do little to diminish the role of corruption generated by drug trafficking, which is entrenched and secured by the enormous profits of the drug trade.", "U.S.-supported Mexican efforts to train judicial personnel and judges, establish rule of law programming, and professionalize police and military have had limited sustainable impact, (see Mexico case study below). Most crimes still go unreported because the public believe there is ongoing police collaboration with the criminal networks and/or public officials acquiesce to criminal acts. Successful prosecutions are rare, with 8% of every 100 homicide cases resolved, due to poor investigations, corrupt policing, and other inefficiencies. ", "The effort to build more independence and protect the judiciary from undue political influence in Mexico has focused on establishing a separate attorney general's office. As noted in the textbox, in early 2019 Mexico's Senate appointed Alejandro Gertz Manero to serve a nine-year term in a newly defined attorney general position. The appointment has raised concerns that the desired independence may be compromised, as the appointee has a long political association with Mexican President L\u00f3pez Obrador. How the President will direct and respond to the newly independent office remains to be seen. "], "subsections": [{"section_title": "Conditions that Can Cause Damage and Casualties", "paragraphs": ["Extortion by criminal networks\u2014or by public officials\u2014on an ongoing basis can be significant and corrosive. State resources or public funds to counter violence are diminished if funds are drained by officials stealing public monies. Extortion by criminal networks or officials can reduce funding for essential services like education and healthcare or public works, while artificially raising the cost to citizens for such services. When contracts for major public infrastructure, such as dams, large transportation, or water-supply projects are awarded to the highest briber instead of the lowest priced, qualified bidder, consequences can be deadly. In Peru, in 2017, one criminal group, dubbed by authorities the Imposters of Reconstruction, set up a fake government agency to assist in letting contracts designed to recover from floods and landslides caused by El Ni\u00f1o. The fake agency bilked some 50 to 100 contractors to pay bribes to expedite their bids in the bogus El Ni\u00f1o recovery.", "Oversight of public procurement and transparency requirements may be insufficient to prevent office holders and politicians from using extortion and nepotism to their benefit. Furthermore, government regulatory systems are often thwarted through bribery. The mine-waste dam collapse in January 2019 in Minais Gerais, Brazil, resulted in some 300 deaths. Prosecutors are considering charges of murder and violation of mine safety requirements for the Vale SA employees involved and the German company that signed off on dam inspections for filing false reports. The regulatory body for mines in Brazil had recently approved the dam as low risk, and the inspectors are alleged to have known that the dam was unsafe and at risk of collapse. "], "subsections": []}]}]}, {"section_title": "Corruption as a U.S. Foreign Policy Concern and Anti-corruption Assistance", "paragraphs": ["The 2017 U.S. National Security Strategy maintains that corruption of weak governments, especially those cowed by criminals and terrorists, poses a serious national security challenge. It asserts that reducing violence should be a priority in countries that are U.S. trade and security partners because extreme violence is economically and socially disruptive and creates instability. The range of corrupt practices is broad and solutions to control public corruption are quite diverse as the case studies in this report indicate. Police and justice systems are open to corruption when morale and integrity are low and external pressures high, which may allow abusive prosecutorial practices to prevail, such as the use of torture or efforts to destroy or fabricate evidence. Weak rule of law subverts justice systems, and diminishes political systems and participatory democracy.", "For several years, U.S. foreign assistance has been provided to fight corruption and enhance the rule of law in Latin America (including judicial training), to improve law-enforcement techniques to conduct investigations, make arrests and properly handle evidence, and enhance oversight of civil society for better accountability. U.S. assistance has supported whistleblower protections and other measures to allow private citizens to be more effective watchdogs of public officials, disrupt abuses, and prevent corruption from taking hold again. ", "Identifying U.S. partners as tainted by corruption can increase tensions in bilateral relations. As a result, U.S. assistance programs are often identified as efforts to increase the efficiency or integrity of \"good government,\" increase \"transparency,\" and inculcate the rule of law, rather than to combat egregious violations or known violators. Furthermore, anti-establishment and populist governing styles of leaders in Latin America may define their policy ends as anti-corruption, but this may mask other political goals that are more anti-institutional rather than committed to strengthening the nation's institutions.", "One example of the U.S. approach is the new proposed trade agreement signed by the United States, Canada, and Mexico in late 2018. U.S. trade talks with Mexico and Canada to replace the North Trade Agreement (NAFTA) resulted in the United States-Mexico-Canada Agreement, (USMCA), which includes a chapter on anti-corruption. The main purpose of the chapter is to \"prevent and combat bribery and corruption in international trade and investment.\" The accomplishment of dedicating a full chapter to reinforce the trilateral commitment to combat corruption is significant, but success would be achieved as the provisions are translated into action. This is especially true in Mexico, where significant gaps remain in implementing anti-corruption regulation. Some scholars have identified the various anti-corruption requirements in the chapter as some of the most comprehensive in any trade treaty, though largely drawn from the proposed Trans-Pacific Partnership agreement from which the Trump Administration withdrew in 2017. The USCMA chapter includes measures to combat corruption, which are legislative, administrative, and promotional.", "Relevant assistance provided by the U.S. government to combat corruption includes assistance and efforts by U.S. State Department, the United States Agency for International Development (USAID), the Department of Justice, the Department of the Treasury, and the Millennium Challenge Corporation (MCC), outlined below."], "subsections": [{"section_title": "U.S. Agency for International Development (USAID), State Department and the Department of Justice72", "paragraphs": ["The U.S. government's primary manager of foreign assistance is USAID and the closely linked U.S. State Department. The two organizations are the main funders of programming for increasing transparency, rule of law, and good government, and often use NGOs to implement their programs. State and USAID program implementers range from associations to local, U.S. embassy, and national civil society groups. Anti-corruption activities are integrated in the strategy of each USAID country mission and embassy, and therefore may influence programs beyond democracy and good governance to include such areas as health, education, economic growth, and promotion of environmental and natural resources management. ", "In 1994, USAID opened a new Office of Transition Initiatives (OTI) to provide rapid response programming to help support peace and democracy. OTI has assisted NGOs to combat antidemocratic forces and fight corruption or bolster weak institutions by providing more agile U.S. government responses on the ground. Nevertheless, the OTI concentrates on conflict settings rather than governance reform, which often require long-term interventions. The State Department's International Narcotics and Law Enforcement bureau advances the rule of law and human rights by supporting criminal justice institutions in a country, promoting accountability, and helping to strengthen and reinforce the rule of law. ", "In the last 30 years, USAID and State Department have funded programs to reinforce institutions that tackle corruption and cultivate a \"culture of transparency\" and integrity. Rule of Law (ROL) programming and judicial and prosecutorial training were part of USAID's 2005 strategy focused on overcoming challenges posed by corruption and targeting agency resources to meet greatest need with more precision. In 2012, with the intention to integrate anti-corruption goals throughout the agency's development portfolio, USAID established the Center of Excellence on Democracy, Human Rights, and Governance. According to one analysis, worldwide programming on combating corruption has totaled roughly 330 projects over seven years (2007 to 2013). About 30 were short-term projects including evaluations, while 289 were long-term country projects. ", "Some funds for anti-corruption and justice programs abroad involve transfers from the State Department to the U.S. Department of Justice (DOJ), such as the International Criminal Investigative Training Assistance Program (ICITAP), which is a law enforcement development agency. It works with foreign governments to develop professional and transparent law enforcement institutions that can fend off corruption, lower the threat of transnational crime, counter terrorism, and protect human rights. The 17 ICITAP field offices include three based in Mexico, Panama, and Colombia. The Office of Overseas Prosecutorial Assistance and Training (OPDAT) carries out capacity building in the justice sector, largely by assigning experienced U.S. prosecutors to U.S. Embassies, who provide peer advice and training to host country prosecutors, judges, and other justice sector personnel. They also provide advice on legislation and criminal enforcement policy."], "subsections": []}, {"section_title": "Strategies under the MCC to Combat Corruption", "paragraphs": ["Another avenue of anticorruption assistance to the region is the U.S. Millennium Challenge Corporation, which provides positive incentives for good governance and transparency in its inventory system. The MCC requires countries to pass a \"control of corruption\" threshold in order to unlock funding such as assistance known as a compact, which on average provides a recipient country with $300 million of U.S. foreign assistance. ", "Created by Congress in 2004, the MCC was established as an independent assistance agency to award funds to developing nations based on a competitive selection process. A country's performance record is the primary (but not the only) basis for awarding funds; and these criteria include a record of clean and transparent governance when judged in comparison with other nations with similar socio-economic characteristics. Since revising its approach in its 2016 strategy NEXT: A Strategy for MCC's Future , MCC's awards and threshold programs seek to address and promote reforms that support sustainable anti-corruption practices. In the past decade, the region has received several threshold programs (Honduras, Paraguay, and Peru) and two large compacts for El Salvador. The program for Honduras, which the MCC launched in 2005, ended prematurely because of a 2009 coup. Over the past ten years, MCC has awarded roughly $800 million of assistance to countries in the Western Hemisphere in compacts and threshold programs."], "subsections": []}, {"section_title": "Sanctions and the U.S. Treasury Department", "paragraphs": ["U.S. Treasury Department programs, including sanctions, listings, and asset seizures in cooperation with police also address corruption. The Office of Foreign Assets Control (OFAC) in Treasury administers and enforces economic sanctions that target foreign entities and persons for their activities related to terrorism, narcotics trafficking, and other threats to the national security, foreign policy, or the economy of the United States. Two of OFAC's sanctions programs address drug trafficking while other programs target terrorist funding. Additionally, 22 individuals and 27 companies from Venezuela are designated as \"specially designated narcotics traffickers\" under the Kingpin Act. ", "In 2015, President Obama issued E.O. 13692 to target those who have undermined democratic processes or institutions, including acts of public corruption, violence or human rights abuses by senior Venezuelan officials. The Trump Administration has imposed sanctions on 74 Venezuelan officials pursuant to E.O. 13692 (in addition to 7 officials sanctioned by President Obama). These officials include President Maduro and his wife, Vice President Delcy Rodriguez, United Socialist Party of Venezuela (PSUV) First Vice President Diosdado Cabello, Supreme Court members, and other high level military officials, state governors, and other officials.", "In early 2019, the United States applied strong sanctions on Venezuelan oil and the Trump Administration has issued executive orders restricting the government and the ability of Venezuela's state oil company, Petr\u00f3leos de Venezuela, S.A. (PdVSA), to access the U.S. financial system ( E.O. 13808 ), barring U.S. purchases of Venezuela's new digital currency ( E.O. 13827 ), and barring U.S. purchases of Venezuelan debt ( E.O. 13835 ). On November 1, 2018, President Trump signed E.O. 13850 , creating a framework to sanction those who operate in Venezuela's gold sector or are deemed complicit in corrupt transactions involving the government. On January 28, pursuant to E.O. 13850 , the Administration imposed sanctions on PdVSA to prevent Maduro and his government from benefitting from Venezuela's oil revenue.", "The 116th Congress has paid close attention to the turmoil in Venezuela and is likely to continue to consider the steps to influence the Venezuelan government and a return to democratic rule. The humanitarian crisis in the country has caused an exodus of Venezuelans\u2014reportedly the largest outflow of refugees and migrants ever in the Western Hemisphere\u2014which has tested the capacity of receiving countries to respond. For the United States, Europe, and others, the conduit of narcotics through Venezuela has had immediate ill effects. The Maduro government, that is widely considered to be the region's most corrupt, has caused suffering within and beyond Venezuela's borders. The effectiveness of sanctions on members of the Maduro government and on the vital oil sector, along with consequences for a destitute and undernourished population, are still to be seen. Should a transition to democracy occur in Venezuela, some observers speculate that what may be revealed would be multi-jurisdictional and massive corruption. It would far exceed the scope of what the State Department identified in a mid-April 2019 fact sheet."], "subsections": []}]}, {"section_title": "Case Studies", "paragraphs": ["The following examples highlight the various ways in which the U.S. government has supported recent anti-corruption efforts in Latin America. The selected cases\u2014Brazil, Mexico, Guatemala, and Honduras\u2014examine the extent to which U.S. support has contributed to driving anti-corruption efforts in widely divergent legal and historical contexts. The United States in these illustrative cases has sought to work closely with established authorities and civil society actors to combat impunity, increase transparency, and dislodge corruption. In Brazil, the U.S. Justice Department cooperated with Brazilian prosecutors on a complex international bribery and corruption case. In Mexico, the United States has supported rule of law reforms to increase judicial independence, reduce impunity, and protect journalists in the context of a strong central government. In Central America, with its historically weak governments, the multilateral institutions and outside experts worked alongside the justice systems in Guatemala and Honduras to expose corruption and criminal control. "], "subsections": [{"section_title": "Brazil: Mutual Legal Cooperation77", "paragraphs": ["Over the past five years, Brazilian authorities have carried out a series of overlapping investigations that have uncovered systemic corruption. As noted above, operation Lava Jato (\"Car Wash\"), launched in March 2014, has implicated high-level politicians from across the political spectrum, as well as many of the country's most prominent business executives. The initial investigation revealed that political appointees at the state-controlled oil company, Petr\u00f3leo Braileiro S.A. (Petrobras), colluded with construction firms to fix contract bidding processes. The firms then provided kickbacks equivalent to 1-2% of the value of their inflated contracts to Petrobras officials and their politician sponsors in the ruling coalition. Subsequent investigations have discovered similar practices throughout the public sector, with businesses providing bribes and illegal campaign donations in exchange for contracts or other favorable government treatment. To date, Brazilian prosecutors have charged more than 900 individuals and secured more than 200 convictions for crimes including corruption, money laundering, and abuse of the international financial system. Most of the politicians implicated by the scandals have yet to be convicted, however, since the Supreme Court, which is charged with trying high-ranking public officials, faces a significant case backlog.", "Brazilian officials and outside analysts have identified several legal and institutional reforms that have facilitated these anti-corruption efforts. The country's 1988 constitution grants autonomy to the office of the attorney general ( Minist\u00e9rio P\u00fablico Federal , MPF), and, due to institutional norms that have since developed, the practice has become entrenched of the president selecting the attorney general from a list of candidates created by federal prosecutors. This operational independence has enabled the MPF to pursue politically sensitive cases against high-ranking officials. Investigations also have improved as the MPF and the federal police have begun to work together more closely, using new investigative tools. A 2013 law to combat organized crime, for example, enhanced prosecutors' discretion to reduce or drop criminal charges for cooperative defendants. Brazilian prosecutors have approved at least 218 such plea bargain agreements to advance the various investigations stemming from the Car Wash probe.", "Brazil's anticorruption efforts also have benefitted from extensive cooperation with the United States and other international partners. Prosecutors affiliated with Operation Car Wash have issued 269 formal requests for legal assistance to 45 countries, and have received 279 requests for legal assistance from 36 countries. Formal cooperation between the United States and Brazil is governed by a bilateral treaty on mutual legal assistance ( Treaty Doc. 105-42 )\u2014ratified with the advice and consent of the U.S. Senate in 1998\u2014as well as several multilateral agreements. The bilateral treaty empowers both countries to request assistance from one another, including", "taking the testimony or statements of persons; providing documents, records, and items; locating or identifying persons or items; serving documents; transferring persons in custody for testimony or other purposes; executing requests for searches or seizures; assisting in proceedings related to immobilization and forfeiture of assets, restitution, and collection of fines; and any other form of assistance not prohibited by law. ", "U.S. and Brazilian authorities also engage in extensive informal cooperation. This allows them to share information more quickly, but evidence obtained this way may not be admissible in court.", "The U.S. Department of Justice and the MPF have cooperated formally and informally to investigate and prosecute several major corruption cases related to the Car Wash probe. To date, those efforts have resulted in coordinated resolutions with seven multinational corporations for violations of the U.S. Foreign Corrupt Practices Act (15 U.S.C. \u00a778dd\u20131) and various Brazilian laws. Collectively, the companies (Braskem, Embraer, Keppel Offshore and Marine, Odebrecht, Petrobras, Rolls Royce, and SBM Offshore) have agreed to pay more than $1.9 billion in penalties to the United States and nearly $4.4 billion to Brazil.", "The future of Operation Car Wash and the country's broader anti-corruption efforts will depend on the actions of Brazil's new government. President Jair Bolsonaro, who began a four-year term in January 2019, relentlessly attacked the corruption of the country's political class during his campaign. Upon taking office, he appointed S\u00e9rgio Moro, the federal judge who had presided over the Car Wash investigation, as his minister of justice and public security. Moro reportedly intends to use his position to push for concrete political and judicial reforms that could help consolidate the country's recent anti-corruption progress. However, Moro's decision to join the right-wing Bolsonaro Administration could jeopardize popular support for the Car Wash investigation by lending credence to those who argue that he politicized the probe to damage the electoral prospects of the left-leaning Workers Party. The Bolsonaro Administration's initial anti-corruption proposals already have run into resistance in the Brazilian Congress where a third of federal legislators, including the leaders of both houses, are under investigation for corruption or other crimes. "], "subsections": []}, {"section_title": "Mexico: Confronting Endemic Corruption and Weak Institutions89", "paragraphs": ["Official corruption is a serious problem at all levels of government in Mexico; 84% of Mexicans identify corruption as among the most pressing challenge facing the country. In Mexico, the costs of corruption reportedly reach as much as 5% of gross domestic product each year.", "The United States has supported programs to address corruption and impunity in Mexico since at least 2000, but lack of political will in Mexico to address these problems has arguably limited their impact. U.S. efforts have included programs aimed at supporting the country's transition to an accusatorial justice system, establishing a National Anti-corruption System (NAS), bolstering transparency and oversight of government programs, and supporting investigative journalism. "], "subsections": [{"section_title": "U.S. Support for Anti-Corruption Efforts in Mexico", "paragraphs": ["Transition to Accusatorial Justice System", "By the mid-2000s, most Mexican legal experts had concluded that reforming Mexico's corrupt and inefficient criminal justice system was crucial for combating criminality and strengthening the rule of law. In 2008, Mexico implemented constitutional reforms mandating that by 2016, trial procedures at the federal and state level had to move from a closed-door process based on written arguments presented to a judge to an adversarial public trial system with oral arguments and the presumption of innocence. These changes aimed to create a new criminal justice system that would be less prone to corruption, more transparent, and more impartial. Federal changes followed advances made by early adopters of the new system, which included states such as Chihuahua.", "The United States has been supporting judicial reform efforts in Mexican states since the late 1990s, with assistance accelerating since the implementation of the M\u00e9rida Initiative in FY2008. U.S. assistance (1) has helped the federal and state governments adopt legislative frameworks to underpin the reform process, (2) provided in-depth training for justice sector operators on their roles in the system, and (3) built support for the reforms in Mexican civil society. Mexico technically met the June 2016 deadline for adopting the new system, with states that have received assistance from USAID showing, on average, better results than others do. Nevertheless, serious problems in implementation have occurred at a time when public opinion is turning against the system and government funding for ongoing training and technical support for the system has diminished.", "National Anticorruption System and Related Efforts to Improve Transparency ", "In 2015, the Mexican congress approved and President Pe\u00f1a Nieto signed constitutional reforms creating a system to prevent and punish corruption following intense and sustained lobbying by civil society and the private sector. In July 2016, Mexico's congress approved secondary legislation to implement what became known as the National Anti-corruption System (NAS). The legislation reflected several of the proposals that were pushed by Mexican civil society groups and supported by USAID. The reforms gave the anticorruption system investigative and prosecutorial powers and a civilian board of directors, increased administrative and criminal penalties for corruption. and required three declarations (taxes, assets, and conflicts of interest) from public officials and contractors. The system took effect in July 2017.", "USAID has provided support to Mexican government (federal and state) anti-corruption and public administration entities, as well as efforts organized by private sector and civil society groups. Support to the Mexican government aims to help it comply with the NAS, conduct and publicize audits of government agencies and programs, develop and implement codes of conduct for public officials, and conduct transparent procurement processes. Through partnerships with private sector entities, USAID funds are helping to support research, push for public policy and legislative reforms, and foster investigative journalism. U.S. funds channeled through the World Bank and the U.N. Development Program support civic participation in federal and state-level transparency secretariats. ", "Despite U.S. support and civil society pressure, Mexico's implementation of its NAS has lagged. In December 2017, members of the system's civilian board of directors maintained that the government had been \"thwarting\" its efforts by denying requests for information. It was not until February 2019 that a special prosecutor for corruption cases was appointed, and the 18 judges to hear corruption cases are still to be named. In addition to a lack of personnel at the federal level, many states have not fulfilled all the constitutional requirements for establishing a local anti-corruption system. ", "In the past, President L\u00f3pez Obrador has been critical of the NAS or largely ignored it. Yet, L\u00f3pez Obrador made fighting corruption a central campaign promise. Since taking office, he has not prioritized NAS implementation, but the new Prosecutor General, Alejandro Gertz Manero, named a special anti-corruption prosecutor in February 2019. L\u00f3pez Obrador has also launched a massive effort to combat fuel theft from the state petroleum company, Petr\u00f3leos Mexicanos (PEMEX) and its pipelines. As part of this effort, he has called for the prosecution of high-level PEMEX officials, whose involvement in oil theft was revealed by investigative journalists. ", "Searching for Safeguards for Investigative Journalism 100 ", "A free and active press is widely viewed as critical to holding governments accountable for their actions, with investigative journalism playing a particularly important role in fostering government transparency and accountability. ", "Over the past decade, at least 74 journalists have been killed in Mexico and many more have been threatened or attacked. According to the U.S.-based Freedom House NGO, officials at all levels of government in Mexico have punished critical journalists by publicly denouncing their work, pushing media owners (who rely on government advertising for revenue) to dismiss them, suing them for libel, or using other tactics to intimidate or threaten them. Criminal groups have also targeted Mexican journalists, particularly those investigating crime and corruption issues.", "U.S. foreign assistance has sought to help the Mexican government and civil society better protect journalists and reduce impunity in cases of crimes committed against them. USAID helped Mexico draft the 2012 legislation that established a federal protection mechanism. The State Department also initiated a high-level human rights dialogue with Mexico that includes a focus on the issue of protecting journalists. USAID has provided at least $6.6 million to support freedom of expression and protection for journalists in Mexico, and it plans to invest at least another $4.2 million through September 2019. ", "Perhaps partially because of international pressure, the Mexican government has reported progress in resolving some of the 12 cases of journalists killed in 2017. Although some observers are skeptical of this reported progress, others remain hopeful that Mexico will take decisive action to investigate and prosecute unsolved murders and to prevent future crimes against journalists. In 2018, totals for the number of journalists and broadcasters slain vary depending on the source and criteria, according to the Justice in Mexico program at the University of San Diego. In the Justice in Mexico database, which counts Mexican journalists and media workers murdered during the year (regardless of investigated connections to their work as reporters), the total number for 2018 was 16, demonstrating that the problem continues."], "subsections": []}]}, {"section_title": "Regional Bodies in Central America: CICIG and MACCIH", "paragraphs": ["As part of its broader support for anti-corruption efforts in Central America, the U.S. government has provided extensive diplomatic and financial support to two innovative international institutions. The International Commission Against Impunity in Guatemala (CICIG), backed by the U.N., has recommended legal reforms and worked alongside Guatemalan institutions to dismantle a series of corruption networks. As a result of CICIG's success, civil society groups pushed for a similar institution in Honduras, leading to the establishment of the OAS-backed Mission to Support the Fight Against Corruption and Impunity in Honduras."], "subsections": [{"section_title": "International Commission against Impunity in Guatemala104", "paragraphs": ["The Guatemalan government invited the U.N. to establish CICIG to help it combat a \"parallel state\" of criminal gangs, business elites, politicians, and security services which was undermining the elected government. An independent, international entity, CICIG's mandate is to support, strengthen and assist Guatemalan state institutions in investigating, prosecuting, and dismantling illegal groups and clandestine structures responsible for organized crime, human rights violations and other crimes, and to propose effective legal reforms. The United States and other external donors provide CICIG's funding. CICIG works directly with the Guatemalan Public Ministry to strengthen rule of law in Guatemala. The Ministry, headed by the Attorney General, is responsible for public prosecution and law enforcement. "], "subsections": [{"section_title": "CICIG's Accomplishments", "paragraphs": ["A January 2019 CICIG statement reports that the commission has supported the Public Ministry in more than 100 cases, including against former President Otto P\u00e9rez Molina and Vice President Roxana Baldetti, both of whom subsequently resigned. It also has promoted more than 34 legal reforms to strengthen transparency and judicial independence, helped identify over 60 criminal networks, and secured more than 300 convictions. CICIG also builds the capacity of prosecutors, judges, and investigators working on high-profile and corruption-related cases. ", "In its annual report on drug policy, the U.S. State Department highlighted these accomplishments and concerns in March 2019: ", "Guatemala's Attorney General and the UN-backed International Commission Against Impunity in Guatemala (CICIG) have investigated hundreds of government officials suspected of corruption. ...Accomplishments in the broader fight against corruption in 2018 included several high profile corruption cases\u2026Unfortunately, the government's expulsion of CICIG from Guatemala calls into question its commitment to fight entrenched corruption.", "As anti-corruption efforts have proven successful and investigations have broadened, attacks against CICIG and the judicial system have grown more intense. Tactics of intimidation have included death threats against the attorney general and judges in high-profile anti-corruption cases, and public and anonymous attempts to discredit the head of CICIG, as well as other officials, activists, and their organizations. President Jimmy Morales (2016 to present) established zero tolerance for corruption as a primary pillar of his government's policy approach. President Morales requested the extension of CICIG until 2019, and said that before he left office, he would extend CICIG's term again, until 2021. Since that time, however, President Morales, his brother and son, and members of his inner circle have become targets of investigation. Morales has tried to weaken and now oust CICIG. The President replaced some of his more reformist Cabinet ministers and officials who worked closely with CICIG and the attorney general's office with closer political allies. ", "In August 2018, the newly appointed Attorney General, Mar\u00eda Consuelo Porras, along with CICIG, called for President Morales to be stripped of his immunity so that corruption charges against him could be investigated. Although Guatemala's Supreme Court approved the request, it was blocked in the Guatemalan Congress, where almost half of the deputies are under investigation or have legal processes pending against them alleging corruption or other crimes. Morales subsequently said he would not renew CICIG's mandate and barred CICIG Commissioner Ivan Vel\u00e1squez from reentering the country, in defiance of two Constitutional Court rulings that the President lacked the authority to prevent Velasquez's return. The battle to eradicate criminal networks that have coopted the Guatemalan state has drawn nearly to a standstill since January 24, 2019, when the current Attorney General cancelled the police protection for CICIG commissioners or staff in the country.", "When the Morales administration announced Guatemala was withdrawing from the CICIG agreement, it gave its staff 24 hours to leave the country. Guatemala's Constitutional Court overruled Morales's decision. The United Nations, European Union, and NGO advocates for government transparency and human rights, criticized Morales's decision to terminate CICIG, and citizens have protested the government's decision and called on Morales to resign. The U.N. maintained that CICIG should continue its work, in compliance with the judicial findings, but removed foreign staff because the government would not guarantee their safety. The Morales Administration subsequently tried to impeach members of Guatemala's Constitutional Court. "], "subsections": []}, {"section_title": "U.S. Support for CICIG", "paragraphs": ["The United States has supported the International Commission against Impunity in Guatemala (CICIG) since its inception in 2007 as a key element in its Central American strategy. U.S. assistance to CICIG is provided through the State Department's Bureau of International Narcotics and Law Enforcement Affairs (INL). There has been broad support for CICIG over the years on a bipartisan basis in Congress and across U.S. Administrations. In March 2018, however, several Members expressed concern about a Russian businessman and his family who had been found guilty of purchasing false passports, but who claimed they were unfairly targeted by CICIG; as a result, a hold on the $6 million in U.S. aid allocated for CICIG was put in place. In July 2018, however, the State Department announced that its examination found no evidence to support the allegation regarding the Russians. Funds have since been released. ", "After President Morales announced in early January 2019 that he was expelling CICIG, the U.S. Embassy in Guatemala issued a statement expressing concern about the future of anti-corruption efforts in the country, but did not mention the President's actions against CICIG. CICIG continued its work in compliance with the judicial finding from abroad, and in February 2019 most staff returned to Guatemala under contingency safety plans. However, Vel\u00e1squez and 11 investigators whose visas were revoked have not returned.", "Many observers are concerned that Morales's moves against CICIG are part of a wider effort to protect himself and others from prosecution and that his actions threaten Guatemala's fragile democracy . Guatemalan Human Rights Ombudsman Jordan Rodas said if the government did not comply with the court ruling concerning CICIG being allowed to operate, it would represent a failure to obey the rule of law. Although some Guatemalan institutions have built greater capacity since working with CICIG, many institutions remain vulnerable, and some fear a return to impunity for organized crime and government corruption. Some observers have also raised concern that reducing the activity of CICIG before the June 2019 national elections could facilitate continued financing of politicians by drug cartels and other criminal organizations in Guatemala."], "subsections": []}]}, {"section_title": "Mission to Support the Fight Against Corruption and Impunity in Honduras115", "paragraphs": ["U.S. policy in Honduras is guided by the U.S. Strategy for Engagement in Central America, which is intended to promote economic prosperity, strengthen governance, and improve security in the region, and thereby mitigate migration and security threats to the United States. Recognizing that high-level corruption undermines those objectives, the U.S. government has supported a variety of efforts to increase transparency and improve accountability in Honduras. It has provided assistance to improve public financial management systems, strengthen justice-sector institutions, and encourage civil society engagement and oversight. It also has imposed targeted sanctions, such as visa restrictions, on corrupt Honduran officials. Perhaps most importantly, the United States has offered crucial diplomatic and financial support for the Organization of American States (OAS)-backed Mission to Support the Fight Against Corruption and Impunity in Honduras (MACCIH).", "In 2015, Honduran civil society had carried out a series of mass demonstrations demanding the establishment of an international anti-corruption organization after Honduran authorities discovered that more than $300 million was embezzled from the Honduran Social Security Institute ( Instituto Hondure\u00f1o de Seguridad Social ) during the administration of President Porfirio Lobo (2010-2014) and some of the stolen funds were used to fund the election campaign of President Juan Orlando Hern\u00e1ndez (2014-present). Hern\u00e1ndez was reluctant to create a U.N.-backed organization with far-reaching authorities like the CICIG but, facing significant pressure, negotiated a more limited arrangement with the OAS. According to the agreement, signed in January 2016, the MACCIH is intended to support, strengthen, and collaborate with Honduran institutions to prevent, investigate, and punish acts of corruption.", "The MACCIH initially focused on strengthening Honduras's anticorruption legal framework. It secured congressional approval for new laws to create anticorruption courts with nationwide jurisdiction and to regulate the financing of political campaigns. Since then, however, the Honduran Congress repeatedly delayed and weakened the MACCIH's proposed reforms, hindering the mission's anti-corruption efforts. For example, prior to enactment of the law to establish anticorruption courts with nationwide jurisdiction, the Honduran Congress modified the measure by stripping the new judges of the authority to order asset forfeitures, stipulating that the new judges can hear only cases involving three or more people, and removing certain crimes\u2014including the embezzlement of public funds\u2014from the jurisdiction of the new courts. Similarly, between the approval of the political financing law and its official publication, the law was changed to delay its entry into force and to remove a prohibition on campaign contributions from companies awarded public contracts. Other measures the MACCIH has proposed, such as an \"effective collaboration\" bill to encourage members of criminal networks to cooperate with officials in exchange for reduced sentences, have yet to be enacted. Such plea-bargaining laws have proven crucial to anti-corruption investigations in other countries, such as the ongoing \"Car Wash\" ( Lava Jato ) probe in Brazil.", "MACCIH officials also are working alongside a recently established anti-corruption unit within the public prosecutor's office ( Unidad Fiscal Especial Contra la Impunidad de la Corrupci\u00f3n , UFECIC) to jointly investigate and prosecute high-level corruption cases. To date, their integrated criminal investigative teams have brought charges in eight cases that have implicated a former first lady as well as dozens of legislators and other government officials. In nearly all of the cases, Honduran officials allegedly diverted funds that were intended for social welfare programs to political campaigns or their own pockets. According to press reports, the MACCIH is also supporting investigations into alleged high-level government collusion with the Cachiros drug trafficking organization, and possible corruption involving public contracts awarded for the controversial Agua Zarca hydroelectric project, which Berta C\u00e1ceres\u2014a prominent indigenous and environmental activist\u2014was protesting at the time of her murder.", "This tentative progress has generated fierce backlash. In January 2018, for example, the Honduran Congress effectively blocked a MACCIH-backed investigation into legislators' mismanagement of public funds by enacting a law that prevents the public prosecutor's office from pursuing such cases for up to three years while another government body ( Tribunal Superior de Cuentas ) conducts an audit of public accounts. This \"impunity pact,\" combined with other obstruction from the Honduran government and a perceived lack of support from the OAS, led the head of the MACCIH, Juan Jim\u00e9nez, to resign in February 2018. OAS Secretary General Luis Almagro nominated Luiz Antonio Marrey, a Brazilian prosecutor, to succeed Jim\u00e9nez, but Marrey was not sworn in until July 2018 due to resistance from the Hern\u00e1ndez Administration. In March 2018, lawyers representing legislators accused of embezzling public funds challenged the constitutionality of the MACCIH's mandate. Although the Honduran Supreme Court agreed to hear the case, it ultimately ruled against the challenge in May 2018.", "Despite these challenges, the MACCIH and the public prosecutor's office have continued to push forward. Their anti-corruption efforts are likely to face sustained resistance from all three branches of the Honduran government, however, and further progress will likely require continued financial and diplomatic support from the United States and other international donors. The MACCIH's mandate will expire in January 2020, unless the Honduran government agrees to renew the agreement."], "subsections": []}]}, {"section_title": "Observations Regarding the Case Studies", "paragraphs": ["The case studies reflect recent efforts by the United States to provide support to countries that have not finished their efforts to tackle corruption. In Brazil, the Justice Department was able to complement the work of Brazilian prosecutors. In Mexico, the United States has worked for years to strengthen the Mexican justice system and help to reform it, and also to support an integrated anti-corruption system, although both new systems have only partially been put into practice. Central America's struggle with public corruption has direct effects on the United States related to crime and immigration. The outside bodies of CICIG and MACCIH, with independent outside experts assisting national judicial and investigative bodies, has been challenging official corruption, such that the local citizenry have in many instances become these institutions' strongest supporters."], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": ["A March 2019 congressional hearing titled, \"Understanding Odebrecht: Lessons for Combating Corruption in the Americas,\" shows the current interest of Congress in anti-corruption and rule of law programs to reinforce the Latin American response to public corruption, which has ousted former and sitting Latin American presidents. ", "U.S. assistance to increase justice-system proficiency has yielded some significant progress, according to some analysts. These programs may be provided through NGOs, or in exchanges and training organized by the U.S. Justice Department or USAID. Judicial system support and investigative assistance can also be provided by international bodies. Attitudinal coaching or education can help build a culture of integrity and respect for law enforcement. Those attitudes are supported by awarding the judiciary and law enforcement with salaries adequate to resist bribery; thus building respect for presumption of innocence, rejection of torture, and a commitment to equality before the law. ", "Technical assistance may also be needed to open government to citizen scrutiny. Digital public accounting systems can be employed to increase transparency for government auditors, journalists, and the interested public to help identify how public funds are spent and pinpoint corruption if it occurs. The improvement of government practices through training is the strategy behind threshold grants from the MCC, as in Paraguay in 2009 and 2010. The threshold assistance to enact anti-corruption improvements is to enable the country to become eligible for a large MCC compact award. "], "subsections": [{"section_title": "Recent U.S. Anti-Corruption and Rule of Law programs", "paragraphs": ["The ability to apply sanctions is another significant policy approach beyond the U.S. programs discussed in the preceding case studies. In 2017 and 2018, the United States targeted sanctions against individuals involved in significant acts of corruption. In recent years, the annual foreign operations appropriation has required that the Secretary of State ban entry by individuals (officials of a foreign government and immediate family members) if the Secretary has direct knowledge of their involvement in significant acts of corruption, such as gross violations of human rights or illicit practices tied to natural resource extraction. The process of \"naming and shaming\" individuals extends to visa denials by the State Department and targeted economic sanctions by the U.S. Department of the Treasury's Office of Foreign Assets Control. ", "The U.S. government applied sanctions against officials in Venezuela, the Dominican Republic, and Nicaragua known to have committed acts of corruption, pursuant to Executive Order 13692 and to Executive Order 13818. Analysts critique individually focused sanctions used to force top-level corrupt officials out of power, because they may not result in an end to corrupt behavior. Likewise, broader economic sanctions directed at a nation may be applied to mobilize the government to remove the corrupt individuals from power. Some analysts maintain such sanctions may fail to achieve their intended results, and they can be drawn out in ways that have unintended consequences. These critics point to U.S. economic sanctions against Venezuela's state-run oil company put in place in early 2019 which they maintain could reduce the hard currency needed for food and essential medicines and thus exacerbate the ongoing humanitarian crisis.", "In May 2017, the House passed H.Res. 145 , reaffirming that combatting corruption is an important U.S. policy interest in the northern triangle countries of Central America, acknowledging the important work of CICIG and MACCIH, and encouraging anti-corruption efforts in the northern triangle countries. In September 2017, the Senate Foreign Relations Committee reported S. 1631 , a foreign relations authorization bill with a title focused on combating public corruption worldwide. In August 2018, Congress enacted the FY2019 defense authorization measure, P.L. 115-232 ( H.R. 5515 ), with several Latin America provisions, which include required reports on narcotics trafficking, corruption, and illicit campaign financing in El Salvador, Guatemala, and Honduras, including identifying government officials involved in such activities. ", "In December 2018, Congress enacted the Nicaragua Human Rights and Anticorruption Act of 2018 ( P.L. 115-335 , H.R. 1918 ). The measure requires the United States to vote against loans from the international financial institutions to Nicaragua, except for the purpose of addressing basic human needs or promote democracy, and authorizes the President to impose sanctions on persons responsible for human rights violations or acts of corruption. "], "subsections": [{"section_title": "Appropriations for FY2018 and FY2019", "paragraphs": ["Congress also appropriated anti-corruption funding in the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) with $6 million for CICIG and $31 million for MACCIH and the northern triangle's attorneys general. The House and Senate Appropriations Committees both recommended continued funding for CICIG, MACCIH, and the attorneys general in their FY2019 foreign aid appropriations measures. In the Consolidated Appropriations Act, 2019, the omnibus legislation passed in February 2019, funding for CICIG was again $6 million, $5 million for MACCIH, and $20 million for the attorney generals of the northern triangle."], "subsections": []}, {"section_title": "Trade-related Anti-corruption Measures", "paragraphs": ["The 116 th Congress may consider policy changes to NAFTA proposed in 2018 as part of the United States-Mexico-Canada Agreement (USMCA). The Trump Administration's objectives in the trade negotiations included anti-corruption measures that were included in Chapter 27, which sets forth integrated anti-corruption commitments in trade and investment for both the public and private sectors. However, in the U.S. House of Representatives, some Members have raised concerns about the USMCA enforcement measures as well as provisions on pharmaceutical drugs and labor rights, while some U.S. Senators have indicated that tariffs on Canada and Mexico must be lifted as a precondition for further consideration of USCMA. As of late May 2019, it has not been taken up."], "subsections": []}]}]}, {"section_title": "Congressional Considerations", "paragraphs": ["The following presents some issues Congress may consider in determining the priorities for U.S. policies and assistance related to anti-corruption. Some Members of Congress remain concerned with weak rule of law in Latin America and corrupt practices in the public sector. Congress may wish to consider heightening its support for anti-corruption programs and supporting conditional assistance to bolster good governance and rule of law as a congressional policy priority."], "subsections": [{"section_title": "Oversight and Conditioned Assistance", "paragraphs": ["In its legislative and oversight roles, the U.S. Congress has appropriated foreign assistance with conditions on reaching or maintaining anti-corruption standards if future funding is to be released. This \"carrot for good government\" strategy is embodied in the Millennium Challenge Corporation's approach to reward those countries that reach anti-corruption standards and other qualifying criteria with large aid compacts. Since FY2016, U.S. assistance to the governments of El Salvador, Guatemala, and Honduras has been conditioned on 16 legislative concerns, ranging from those governments' efforts to improve border security to their protection of human rights.", "Sanctions, on the other hand, can be a tool to punish corrupt officials. However, if the desired change in behavior extends beyond the targeted individual(s) and their behavior, the desired end result may be less easy to achieve. Such sanctions are an example of coercive diplomacy to modify behavior of a nation's leadership; and the effectiveness of a sanction is only achieved if the desired behavior (i.e., removal of the corrupt officials) can be accomplished. Some analysts contend that sanctions to effect regime change may set the price of compliance too high (i.e., loss of office), so the desired behavior will not occur, and top leaders may refuse to leave office.", "Civil society activism seen across the region in recent years, due to a spate of corruption expos\u00e9s and high-level scandals, may provide an opportunity to forge a new commitment to higher integrity standards that reject corruption. When the Financial Times editor for Latin America recently retired after a decade in his post, he observed that over the decade he had seen extraordinary changes for the better, \"especially certain habits and expectations about justice and transparency, corruption and impunity.\" Some analysts portray the new activism as a region-wide \"anti-corruption movement,\" while others maintain it is a critical moment in the region's democratic progression, when an awareness of public officials behaving corruptly may progress beyond temporary fixes. Eliminating and arresting malign leaders is seen as an interim step that needs to be followed with the difficult\u2014and, at times, laborious\u2014task of crafting legislation that adapts or reforms institutions, in such areas as more transparent public procurement or campaign finance. This would be be followed by building and applying the societal pressure to ensure implementation of those reforms.", "Setting Expectations for U.S. Relations with New Leaders", "Recently elected presidents in the region's most populous countries, Mexico and Brazil, who campaigned on promises to reduce corruption might be encouraged to fulfill their anti-corruption campaign pledges. For instance, Mexico's new Prosecutor General, appointed by the Mexican congress in early 2019, is envisioned as autonomous from the Mexican executive branch, and could seek to establish a reputation for resolving some key cases to reverse the widespread view of the prior Attorney General's office, which was widely seen as lacking independence, disregarding victims, and producing high levels of impunity. The U.S. government could encourage Mexico's government to operationalize its National Anti-corruption System, which was developed in cooperation with Mexican civil society with USAID support.", "Anti-corruption programs can build on country-based initiatives, and seek to put into practice existing credible laws that deserve full implementation. Programs to help foster a more vibrant civil society, capable of building the political will to help achieve higher accountability standards may also inspire courageous leaders who are willing to take on corruption. Congressional expressions of support for anti-corruption efforts in the region can be important for such efforts. Also, support for OECD and OAS anti-corruption conventions and mechanisms, and the importance of improving their implementation, can be another valuable measure because of the broad legitimacy such multilateral organizations and international standards may enjoy."], "subsections": []}, {"section_title": "Anti-Corruption Metrics", "paragraphs": ["Evaluating the success of anti-corruption programs is challenging due to the near impossibility of establishing causality in the development of democratic governance. The \"sustainability\" of anti-corruption efforts may depend on political and economic variables external to the provision of assistance. Many analysts note that there is no single anti-corruption solution, but that approaches should be tailored to country-specific circumstances. The timeframe for change is also difficult to define and measure, and evaluating long-term sustainability may also be complex. ", "A key constraint on firms being barred from public works contracts because of corruption is the threat of bankruptcy. Bankruptcy of a major firm, such as the Odebrecht corporation, can lead to large numbers of unpaid employees and subcontractors thrown out of work. It can have destabilizing economic consequences, and result in loss of the crucial public infrastructure which the contractor was to provide. The cynicism about democratic governance derived from long exposure to widespread corruption, when all parties may come to be viewed as corrupt and most political leaders are seen as \"on the take,\" can also create instability. In 2019, some Latin American governments are beginning to discuss how to recover from the serious consequences of the Odebrecht scandal, and move into a post-Odebrecht situation that is more stable."], "subsections": []}, {"section_title": "Constraints for U.S. Anti-corruption Programming and Funding", "paragraphs": ["In recent years, reductions in U.S. foreign assistance budgets have generally reduced anti-corruption funding and more broadly programs by USAID and others under the \"governance\" rubric. The Trump Administration has sought to reduce discretionary federal spending. Congress may consider that in confronting the challenges of trade and security presented by Russia and China in Latin America, as well as competition from European and Asian businesses, the reduction of corruption and the enhancement of the rule of law most benefits U.S. investors and businesses operating in the region. The cost for foreign assistance programs for good governance may also be more affordable than security assistance requiring costly equipment or other technology-based components. ", "Sustainable program funding is another concern. One feature of successful U.S. foreign assistance efforts is that they have been consistently funded. Perhaps this constancy of effort is best demonstrated by Plan Colombia, often cited as a success in the Western Hemisphere and even globally, and which endured for nearly two decades. U.S. assistance to Plan Colombia helped a beleaguered country reach a peace agreement, reduce acts of terrorism, and homicides (to a 40-year low in 2017), and achieve a return to growth and broader stability. Although not an anti-corruption program, the Plan Colombia example suggests that bipartisan congressional support for a foreign assistance goal, through diverse U.S. administrations (and party majorities in Congress) may be a hallmark of an enduring foreign policy success."], "subsections": []}, {"section_title": "Good Governance as a U.S. Policy Priority", "paragraphs": ["Policies that champion human rights and prioritize governance and rule of law do not appear to be a central Trump Administration priority. The Administration's budgets have consistently sought to reduce foreign assistance overall and weigh improvement of democratic practices and good governance goals against other U.S. core interests. Instead of focusing on governance issues, the Trump Administration has prioritized security-related assistance, including for counternarcotics efforts. In contrast to prior administrations, it appears less eager to pressure governments on rule of law and transparency goals unless corruption is linked to other security interests, such as migration from Central America. At the same time, some analysts maintain that U.S. influence is decreasing in the Western Hemisphere due to the declining regard for U.S leadership (registered in opinion polling) over the past couple years, although positive views of bilateral relations between a single nation and the United States are often rated more favorably. ", "In addition, some observers warn that attacks on the motives and accuracy of the news media by senior U.S. leaders can reduce acceptance of U.S. assistance programs designed to protect freedom of the press and investigative journalism. In essence it undermines the position of free-press advocate that the U.S. government once held. The Trump Administration has rarely applauded civil society activism in Latin America and Caribbean countries in response to high-level scandals and public corruption. Some of the regional and multilateral institutions, such as the Inter-American Development Bank and the IMF, have taken up advocacy of anti-corruption programming because it is no longer perceived as a top U.S. government concern.", "Appendix A. Select Reports and Recommendations", "Several foreign policy think tanks and the multilateral development banks have published analyses over the past three years examining broad corruption scandals in Latin American and Caribbean countries and the outpouring of civil society response. Some of these studies contend that donor assistance aimed at anti-corruption in recent times did not go far enough, or produce a measurable and enduring change in practices. ", "For example, in November 2018, the Inter-American Development Bank (IDB) published a report by an Expert Advisory Group on anti-corruption, transparency and integrity in the countries of Latin America and the Caribbean. The IDB authors proposed a more aggressive and integrated approach to combating corruption. The report describes earlier interventions encouraged by the IDB as well as the United States and several multilateral donors as \"uneven and partial,\" and focused more on enacting reforms and making pronouncements, rather than on implementation and enforcement. It maintains that only an integrated and across-the-board framework for fighting corruption can actually transform the culture and practice of public corruption that pervades too much of the region. Calling for a transformative approach, the IBD authors maintain that it is essential that both supply and demand sides of corruption be understood and addressed. They call for public and private sector participation at the national, regional, and international level to replace weak or dysfunctional institutions and practices.", "The Americas program at the Center for Strategic and International Studies (CSIS), recommends key targets for reform in the region, which are: (1) political party and campaign financing; (2) public financial sector management; (3) government contracting and procurement, especially for critical infrastructure; (4) civil service reform and effective vetting of public officials; and (5) internal strengthening and oversight of public security and justice institutions. CSIS advocates peer exchanges to tap the knowledge and skills of veterans of reining in public corruption from countries such as Uruguay, Chile, and Colombia. Their transferable experiences can assist struggling nations in the Northern Triangle countries of Central America and elsewhere.", "The emergence and persistence of civil society activism to fight corruption may be attributed to several conditions. One is the region's expanded middle class, which grew to nearly 35% in 2015 from about 21% of Latin America's population in 2001. The middle class is a bulwark against corruption according to the theory that the costs and inefficiencies of corruption take on greater salience when basic needs have been fulfilled. An analysis of the 2016/2017 Americas barometer study found that those individuals most apt to rank corruption as their nation's top problem were better educated, male, and more affluent. However, when the link between corruption and economic problems and insecurity is made clear, citizens of any background may become energized to combat it.", "Some analysts identify illicit campaign finance as the root of corruption. Guatemala's current President Jimmy Morales, a former TV evangelical and comedian, campaigned in 2015 on a pledge he was neither a thief nor corrupt. Morales financed his presidential campaign secretively, and was investigated by the U.N. supported anti-corruption body CICIG for undeclared campaign donations. The Odebrecht construction company reported it paid bribes across the region to public office holders for financing their political campaigns in exchange for large infrastructure contracts. In addition, the amount of off-the-record political donations in many countries greatly outpace the reported donations. In Argentina President Mauricio Marci's successful 2016 presidential race, Macri reportedly expended about 11 times more than he publicly declared, while his opponent reportedly spent some 20 times as much as he declared. ", "Bilateral U.S. assistance programs to bolster rule of law, encourage good governance, and eliminate bribery, extortion, and graft, have been common in Latin America. Several analysts assert that further progress in combating corruption and improving governance in the region may require a cultural shift, building on the numerous citizen-led anti-corruption social movements unleashed in 2015. These movements, some of which were nurtured by years of foreign assistance, may begin to look beyond prosecutions related to specific scandals and seek structural and institutional reforms. ", "Some practitioners who promote an inter-related set of program elements, what has been described as an \"ecosystem\" of integrity-enhancing efforts, also contend that the features of successful anti-corruption programs have features common to good development programming more broadly. These could include efforts to:", "Abolish or seek to revise rules and regulations that obscure the workings of government . Many government rules and processes can obscure budgets and reduce transparency, thus discouraging citizen oversight. One example that built more transparency and encouraged citizen participation is a technological solution in Mexico. LAB Justicia, an online collaborative tool funded by USAID, provides comprehensive information on the status of criminal justice in each state of Mexico. It draws data from open source government records and research by national and international NGOs. Recruit NGOs and corporations as c ritical partners in fighting corruption . Businesses and their associations and nongovernmental groups can be important targets for assistance to build demand for honest government. These entities can encourage and benefit from information sharing via social media, strong independent journalism, and broader citizen electoral participation. The business community and the private sector may play a critical role to press for the expansion of information, education and support to sharpen government transparency as commercial relations in a free market economy can only thrive with predictable economic rules. Adapt success ful models to local conditions . Successful multilateral and regional efforts can become exemplars for other countries if the models are adapted to local conditions and dynamics. The CICIG was cited by presidential candidates in El Salvador in the early 2019 elections as an effort they would like to replicate. During the Mexican elections in 2018, candidates also considered the CICIG framework for possible replication in Mexico, and in May 2019 Ecuador announced it had launched an anti-graft commission with five outside the country experts. The CICIG model also exemplifies that due to the complexity of grand corruption cases that international cooperation and support may be critical to success to supplement local resources in their battle with powerful corrupt networks. Build anti-corruption momentum with strong independent j ournalism, social media, and whistleblower p rotectio ns. Investigative and independent journalists have always played a crucial role to uncover public and private corruption and criminality, inform the citizenry of the true costs of corruption, and mobilize the public to fight corruption. In Mexico, journalists have helped to mobilize rejection of criminal domination and the violence that crime groups perpetrate. They also have raised awareness of criminal impunity for both criminal leaders and government officials on the take. Journalists are needed to amplify the efforts of whistleblowers; and to build political will and support for anti-corruption investigations, prosecutions, and legislation.", "Appendix B. Implementation of the Inter-American Convention against Corruption (MESICIC) ", "In 2002, to support member states in implementing the IACAC, the OAS created the Mechanism for Follow-up on the implementation of the Inter-American Convention Against Corruption (MESICIC). The MESICIC serves primarily to measure how member states adhere to the convention and helps members achieve better implementation. The MESICIC provides activities that include: technical cooperation, sharing of best practices, and tools for the harmonization of anticorruption legislation throughout the Americas. Including the United States, 33 OAS member states are party to the MESICIC. (Barbados is not a MESICIC signatory.)", "The MESICIC's two main bodies are: The Conference of State Parties and the Committee of Experts. The Conference of State Parties exercises political and operational authority over the mechanism, and is comprised of representatives from all states which are party to the mechanism. The Committee of Experts manages and supervises the technical review process that steers the IACAC's implementation. It is composed of experts appointed by each state party. The OAS General Secretariat, which serves as the technical secretariat through the Department of Legal Cooperation of the Secretariat for Legal Affairs, supports the Committee of Experts. ", "During the country-specific evaluation process, the MESICIC drafts and adopts reports to recommend ways to better implement regulatory and institutional measures. The reports aim to align the commitments of each state signatory with the goals of the IACAC. They also provide indicators for the states to identify challenges and ways to overcome shortcomings. Civil society and NGOs participate in the IACAC review process by submitting information to the Committee of Experts for consideration. These groups may present specific proposals, methodologies, and questions for gathering information. ", "The Committee of Experts adopts a hemispheric report at the end of each technical review. The report summarizes the progress of implementing countries in meeting the recommendations formulated by the Committee in previous technical rounds, and makes recommendations of a collective nature. The Committee has adopted hemispheric reports in 2006, 2008, 2011, and 2015.", "Some analysts note that the battle against corruption in the public sector appears to be more resilient than in the past. However, the elusive nature of corruption makes it difficult to draw a causal relationship between rejection of corruption in the Americas and the IACAC and MESICIC. These critics maintain that the instruments need updating to make the IACAC relevant for combating new corruption modalities, and to make the MESICIC more independent, transparent, empowered to penalize noncompliance, and technically competent.", "Appendix C. Latin America Corruption Timeline from March 2014 through December 2018"], "subsections": []}]}]}}
{"id": "RS20844", "title": "Temporary Protected Status: Overview and Current Issues", "released_date": "2019-03-29T00:00:00", "summary": ["When civil unrest, violence, or natural disasters erupt in countries around the world, concerns arise over the ability of foreign nationals in the United States from those countries to safely return. Provisions exist in the Immigration and Nationality Act (INA) to offer temporary protected status (TPS) and other forms of relief from removal under specified circumstances. The Secretary of Homeland Security has the discretion to designate a country for TPS for periods of 6 to 18 months and can extend these periods if the country continues to meet the conditions for designation. Congress has also provided TPS legislatively. A foreign national who is granted TPS receives a registration document and employment authorization for the duration of a given TPS designation.", "The United States currently provides TPS to approximately 417,000 foreign nationals from 10 countries: El Salvador, Haiti, Honduras, Nepal, Nicaragua, Somalia, South Sudan, Sudan, Syria, and Yemen. Certain Liberians maintain relief under a similar administrative mechanism known as Deferred Enforced Departure (DED). Since September 2017, the Secretary of Homeland Security has announced plans to terminate TPS for six countries\u2014El Salvador, Haiti, Honduras, Nepal, Nicaragua, and Sudan\u2014and extend TPS for Somalia, South Sudan, Syria, and Yemen. In March 2018, President Trump announced an end to DED for Liberia. Several lawsuits have been filed challenging the TPS and DED termination decisions.", "There is ongoing debate about whether foreign nationals who have been living in the United States for long periods of time with TPS or DED should receive a pathway to lawful permanent resident (LPR) status. Various proposals related to TPS have been introduced in the 115th and 116th Congresses, including to expand the program to additional countries (e.g., Venezuela), provide a pathway to LPR status, prohibit gang members or those without lawful status from receiving TPS, and phase out the program."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["Federal law provides that all aliens must enter the United States pursuant to the Immigration and Nationality Act (INA). The two major categories of aliens in the INA are (1) immigrants, who are admitted to the United States permanently, and (2) nonimmigrants, who are admitted for temporary reasons (e.g., students, tourists, temporary workers, or business travelers). Foreign nationals who lack prope r immigration authorization generally fall into three categories: (1) those who are admitted legally and then overstay their nonimmigrant visas, (2) those who enter the country surreptitiously without inspection, and (3) those who are admitted on the basis of fraudulent documents. In all three instances, the aliens are in violation of the INA and subject to removal. ", "Temporary Protected Status (TPS), codified by INA Section 244, provides temporary relief from removal and work authorization to foreign nationals in the United States from countries experiencing armed conflict, natural disaster, or other extraordinary circumstances that prevent their safe return. This report begins by situating TPS in the context of humanitarian responses to migration. Another form of blanket relief from removal \u2014Deferred Enforced Departure (DED)\u2014is also described, as is the historical use of these relief mechanisms. This report then provides data on the countries currently designated for TPS, including the conditions that have contributed to their designation. Past legislation to provide lawful permanent resident status to certain TPS-designated foreign nationals is also described. The report concludes with examples of activity in the 115 th and 116 th Congresses related to TPS. "], "subsections": []}, {"section_title": "Humanitarian Response", "paragraphs": ["As a State Party to the 1967 United Nations Protocol Relating to the Status of Refugees (hereinafter, U.N. Protocol), the United States agrees to the principle of nonrefoulement , which asserts that a refugee should not be returned to a country where he/she faces serious threats to his/her life or freedom. (This is now considered a rule of customary international law.) Nonrefoulement is embodied in several provisions of U.S. immigration law. Most notably, it is reflected in INA provisions requiring the government to withhold the removal of a foreign national to a country in which his or her life or freedom would be threatened on the basis of race, religion, nationality, membership in a particular social group, or political opinion. ", "The legal definition of a refugee in the INA, which is consistent with the U.N. Protocol, specifies that a refugee is a person who is unwilling or unable to return to his/her country of nationality or habitual residence because of persecution or a well-founded fear of persecution on account of race, religion, nationality, membership in a particular social group, or political opinion. This definition also applies to individuals seeking asylum. Under the INA, refugees and asylees differ on the physical location of the persons seeking the status. Those who are displaced abroad to a country other than their home country apply for refugee status, while those who are in the United States or at a U.S. port of entry apply for asylum. Other foreign nationals in the United States who may elicit a humanitarian response do not meet the legal definition for asylum; under certain circumstances these persons may be eligible for relief from removal through TPS or DED."], "subsections": []}, {"section_title": "Temporary Protected Status", "paragraphs": ["TPS is a blanket form of humanitarian relief. It is the statutory embodiment of safe haven for foreign nationals within the United States who may not meet the legal definition of refugee or asylee but are nonetheless fleeing\u2014or reluctant to return to\u2014potentially dangerous situations. TPS was established by Congress as part of the Immigration Act of 1990 ( P.L. 101-649 ). The statute gives the Secretary of the Department of Homeland Security (DHS), in consultation with other government agencies (most notably the Department of State), the authority to designate a country for TPS under one or more of the following conditions: ongoing armed conflict in a foreign state that poses a serious threat to personal safety; a foreign state request for TPS because it temporarily cannot handle the return of its nationals due to an environmental disaster; or extraordinary and temporary conditions in a foreign state that prevent its nationals from safely returning. A foreign state may not be designated for TPS if the Secretary of DHS finds that allowing its nationals to temporarily stay in the United States is against the U.S. national interest. ", "The Secretary of DHS can designate a country for TPS for periods of 6 to 18 months and can extend these periods if the country continues to meet the conditions for designation. To obtain TPS, eligible foreign nationals within the United States must pay specified fees and submit an application to DHS's U.S. Citizenship and Immigration Services (USCIS) before the deadline set forth in the Federal Register notice announcing the TPS designation. The application must include supporting documentation as evidence of eligibility (e.g., a passport issued by the designated country and records showing continuous physical presence in the United States since the date established in the TPS designation). The statute specifies grounds of inadmissibility that cannot be waived, including those relating to criminal convictions, drug offenses, terrorist activity, and the persecution of others.", "Individuals granted TPS are eligible for employment authorization, cannot be detained on the basis of their immigration status, and are not subject to removal while they retain TPS relief. They may be deemed ineligible for public assistance by a state and may travel abroad with the prior consent of the DHS Secretary. TPS does not provide a path to lawful permanent residence or citizenship, but a TPS recipient is not barred from adjusting to nonimmigrant or immigrant status if he or she meets the requirements. DHS has indicated that information it collects when an individual registers for TPS may be used to enforce immigration law or in any criminal proceeding. In addition, withdrawal of an alien's TPS may subject the alien to exclusion or deportation proceedings."], "subsections": []}, {"section_title": "Deferred Enforced Departure", "paragraphs": ["In addition to TPS, there is another form of blanket relief from removal known as deferred enforced departure (DED), formerly known as extended voluntary departure (EVD). DED is a temporary, discretionary, administrative stay of removal granted to aliens from designated countries. Unlike TPS, a DED designation emanates from the President's constitutional powers to conduct foreign relations and has no statutory basis. DED was first used in 1990 and has been used a total of five times (see \" Historical Use of Blanket Relief \"). Liberia is the only country currently designated under DED, and that designation is scheduled to end on March 30, 2020.", "DED and EVD have been used on a country-specific basis to provide relief from removal at the President's discretion, usually in response to war, civil unrest, or natural disasters. When Presidents grant DED through an executive order or presidential memorandum, they generally provide eligibility guidelines, such as demonstration of continuous presence in the United States since a specific date. Unlike TPS, the Secretary of State does not need to be consulted when DED is granted. In contrast to recipients of TPS, individuals who benefit from DED are not required to register for the status with USCIS unless they are applying for work authorization. Instead, DED is triggered when a protected individual is identified for removal. "], "subsections": []}, {"section_title": "Historical Use of Blanket Relief", "paragraphs": ["In 1990, when Congress enacted the TPS statute, it also granted TPS for 18 months to Salvadoran nationals who were residing in the United States. Since then, the Attorney General (and, later, the Secretary of DHS), in consultation with the State Department, granted and subsequently terminated TPS for foreign nationals in the United States from the following countries: Angola, Bosnia-Herzegovina, Burundi, Guinea, Lebanon, Liberia, the Kosovo Province of Serbia, Kuwait, Rwanda, and Sierra Leone. ", "Rather than extending the initial Salvadoran TPS when it expired in 1992, the George H. W. Bush Administration granted DED to an estimated 190,000 Salvadorans through December 1994. This Administration also granted DED to about 80,000 Chinese nationals in the United States following the Tiananmen Square massacre in June 1989, and these individuals retained DED status through January 1994. In December 1997, President Bill Clinton instructed the Attorney General to grant DED to Haitian nationals in the United States for one year, providing time for the Administration to work with Congress on long-term legislative relief for Haitians. President George W. Bush directed that DED be provided to Liberian nationals whose TPS was expiring in September 2007; this status was extended several times by President Obama. President Trump has terminated DED for Liberians, with an effective date of March 30, 2020 (for more details, see \" Liberia \"). "], "subsections": []}, {"section_title": "Countries Designated for Temporary Protections", "paragraphs": ["Approximately 417,000 foreign nationals from the following 10 countries have TPS: El Salvador, Haiti, Honduras, Nepal, Nicaragua, Somalia, South Sudan, Sudan, Syria, and Yemen. In addition, certain Liberian nationals are covered by a designation of DED (see \" Liberia \" section below). The Administration has announced terminations of temporary protections for seven of these countries (six with TPS and one with DED). Several lawsuits have been filed challenging these decisions. ", " Table 1 lists the current TPS-designated countries, the most recent decision\u2014to extend or terminate\u2014by the Secretary of DHS, the date from which individuals are required to have continuously resided in the United States, and the designation's expiration date. In addition, Table 1 shows the approximate number of individuals from each country who registered during the previous registration period and the number of individuals with TPS as of November 29, 2018."], "subsections": [{"section_title": "Central America", "paragraphs": ["The only time Congress has granted TPS was in 1990 (as part of the law establishing TPS) to eligible Salvadoran nationals in the United States. In the aftermath of Hurricane Mitch in November 1998, then-Attorney General Janet Reno announced that she would temporarily suspend the deportation of nationals from El Salvador, Guatemala, Honduras, and Nicaragua. On January 5, 1999, the Attorney General designated Honduras and Nicaragua for TPS due to extraordinary displacement and damage from Hurricane Mitch. Prior to leaving office in January 2001, the Clinton Administration said it would temporarily halt deportations to El Salvador because of a major earthquake. In 2001, the George W. Bush Administration decided to grant TPS to Salvadoran nationals following two earthquakes that rocked the country. ", "Over the years, the George W. Bush Administration granted, and the Obama Administration extended, TPS to Central Americans from El Salvador, Honduras, and Nicaragua on the rationale that it was still unsafe for nationals to return due to the disruption of living conditions from environmental disasters. ", "Beginning in late 2017, the Trump Administration announced decisions to terminate TPS for Nicaragua and El Salvador and to put on hold a decision about Honduras. In November 2017, DHS announced that TPS for Nicaragua would end on January 5, 2019\u201412 months after its last designation would have expired\u2014due to nearly completed recovery efforts following Hurricane Mitch. On the same day, DHS announced that more information was necessary to make a determination about TPS for Honduras; as a result, statute dictates that its status be extended for six months. On January 8, 2018, DHS announced the decision to terminate TPS for El Salvador\u2014whose nationals account for about 60% of TPS recipients\u2014after an 18-month transition period. El Salvador's TPS designation is scheduled to end on September 9, 2019. On May 4, 2018, DHS announced the decision to terminate the TPS designation for Honduras, with an 18-month delay (until January 5, 2020) to allow for an orderly transition. As of the date of this report, the terminations for El Salvador and Honduras are on hold as the result of a court order.", "The large number of Central Americans with TPS, along with their length of U.S. residence and resulting substantial economic and family ties, have led some to support extending TPS for Central Americans and Salvadorans in particular. Supporters have argued that ongoing violence and political unrest have left these countries unable to adequately handle the return of their nationals and that a large-scale return could have negative consequences for the United States economy and labor supply, American families, foreign relations, and the flow of remittances sent by Central Americans living in the United States to their relatives in Central America. Opponents have argued that ending TPS for these countries is a move toward correctly interpreting the original intent of the program\u2014to provide temporary safe haven. There is some support in Congress for a legislative means of allowing TPS recipients with several years of U.S. residence to remain in the United States permanently (see \" Selected Activity in the 115th and 116th Congress \" below); others argue that Congress's intent in creating the statute was to provide temporary relief and that no special consideration should be given to allow these individuals to stay in the United States. "], "subsections": []}, {"section_title": "Haiti", "paragraphs": ["The devastation caused by the January 12, 2010, earthquake in Haiti prompted calls for the Obama Administration to grant TPS to Haitian nationals in the United States. The scale of the humanitarian crisis after the earthquake\u2014with estimates of thousands of Haitians dead and reports of the total collapse of Port au Prince's infrastructure\u2014led DHS to grant TPS for 18 months to Haitian nationals who were in the United States as of January 12, 2010. At the time, then-DHS Secretary Janet Napolitano stated: \"Providing a temporary refuge for Haitian nationals who are currently in the United States and whose personal safety would be endangered by returning to Haiti is part of this Administration's continuing efforts to support Haiti's recovery.\" On July 13, 2010, DHS announced an extension of the TPS registration period for Haitian nationals, citing difficulties nationals were experiencing in obtaining documents to establish identity and nationality, and in gathering funds required to apply for TPS. ", "DHS extended the TPS designation for Haiti in May 2011, providing another 18 months of TPS, through January 22, 2013. At the same time, DHS issued a redesignation, enabling eligible Haitian nationals who arrived in the United States up to one year after the earthquake to receive TPS. The redesignation targeted individuals who were allowed to enter the United States immediately after the earthquake on temporary visas or humanitarian parole, but were not covered by the initial TPS designation. Subsequently, then-Secretary Jeh Johnson extended Haiti's designation several times, through July 22, 2017. ", "A May 2, 2017, letter from members of the Congressional Black Caucus to then-DHS Secretary John Kelly urged an 18-month extension of TPS for Haiti, citing continued recovery difficulties from the 2010 earthquake that killed over 300,000 people, an ongoing cholera epidemic, and additional damages from Hurricane Matthew in 2016. On May 24, 2017, then-Secretary Kelly extended Haiti's TPS designation for six months (the minimum allowed by statute), from its planned expiration on July 22, 2017, to January 22, 2018, and encouraged beneficiaries to prepare to return to Haiti should its designation be terminated after six months. An October 4, 2017, letter from the Haitian ambassador to Acting DHS Secretary Elaine Duke requested that Haiti's designation be extended for an additional 18 months. On November 20, 2017, DHS announced its decision to terminate TPS for Haiti, with an 18-month transition period. Its designation is set to terminate on July 22, 2019. As of the date of this report, the termination is on hold as the result of a court order."], "subsections": []}, {"section_title": "Liberia", "paragraphs": ["Liberians in the United States first received TPS in March 1991 following the outbreak of civil war. Although that war ended, a second civil war began in 1999 and escalated in 2000. Approximately 10,000 Liberians in the United States were given DED in 1999 after their TPS expired. Their DED status was subsequently extended to September 29, 2002. On October 1, 2002, Liberia was redesignated for TPS for a period of 12 months, and that status continued to be extended. On September 20, 2006, the George W. Bush Administration announced that TPS for Liberia would expire on October 1, 2007, but that this population would be eligible for DED until March 31, 2009. On March 23, 2009, President Obama extended DED for those Liberians until March 31, 2010, and several times thereafter. ", "As a result of the Ebola outbreak in West Africa in 2014, eligible Liberians were again granted TPS, as were eligible Sierra Leoneans and Guineans. On September 26, 2016, DHS issued a notice for Liberia providing a six-month extension of TPS benefits, to May 21, 2017, to allow for an \"orderly transition\" of affected persons' immigration status, and did the same for similarly affected Sierra Leoneans and Guineans. This action voided a previously scheduled November 21, 2016, expiration of TPS for all three countries. ", "Liberia's DED status was extended by President Obama through March 31, 2018, for a specially designated population of Liberians who had been residing in the United States since October 2002. President Trump announced on March 27, 2018, that extending DED for Liberia was not warranted due to improved conditions in Liberia, but that the United States' foreign policy interests warranted a 12-month wind-down period. A lawsuit challenging the termination was filed in federal court on March 8, 2019. Three days before the effective termination date, President Trump announced a 12-month extension of the wind-down period, to last through March 30, 2020. Approximately 840 Liberians have approved employment authorization documents (EADs) under that DED directive. This number does not reflect all Liberians who might be covered under this DED announcement\u2014only those who applied for and received an EAD."], "subsections": []}, {"section_title": "Nepal", "paragraphs": ["Nepal was devastated by a massive earthquake on April 25, 2015, killing over 8,000 people. The earthquake and subsequent aftershocks demolished much of Nepal's housing and infrastructure in many areas. Over half a million homes were reportedly destroyed. On June 24, 2015, citing a substantial but temporary disruption in living conditions as a result of the earthquake, then-DHS Secretary Jeh Johnson designated Nepal for TPS for an 18-month period. TPS for Nepal was extended for 18 months in October 2016. On April 26, 2018, Secretary Nielsen announced her decision to terminate the TPS designation for Nepal, citing her assessment that the original conditions under which the country was designated are no longer substantial and that Nepal can adequately handle the return of its nationals. A 12-month delay of the termination date to allow for an orderly transition was also announced; the TPS designation for Nepal is thus set to terminate on June 24, 2019. As of the date of this report, the termination is on hold as the result of a court order."], "subsections": []}, {"section_title": "Somalia", "paragraphs": ["Somalia has endured decades of chronic instability and humanitarian crises. Since the collapse of the authoritarian Siad Barre regime in 1991, it has lacked a viable central authority capable of exerting territorial control, securing its borders, or providing security and services to its people. Somalia was first designated for TPS in 1991 based on extraordinary and temporary conditions \"that prevent[ed] aliens who are nationals of Somalia from returning to Somalia in safety.\" Through 23 subsequent extensions or redesignations, Somalia has maintained TPS due to insecurity and ongoing armed conflict that present serious threats to the safety of returnees. DHS announced the latest extension\u2014for 18 months\u2014on July 19, 2018, and its current expiration date is March 17, 2020."], "subsections": []}, {"section_title": "Sudan and South Sudan", "paragraphs": ["Decades of civil war preceded South Sudan's secession from the Republic of Sudan in 2011. Citing both ongoing armed conflict and extraordinary and temporary conditions that would prevent the safe return of Sudanese nationals, the Attorney General designated Sudan for TPS on November 4, 1997. Since then, Sudan has been redesignated or had its designation extended 14 times. ", "On July 9, 2011, South Sudan became a new nation. With South Sudan's independence from the Republic of Sudan, questions arose about whether nationals of the new nation would continue to be eligible for TPS. In response, the DHS Secretary designated South Sudan for TPS on October 17, 2011. TPS has since been extended or redesignated five times due to ongoing armed conflict and extraordinary and temporary conditions in South Sudan, including \"ongoing civil war marked by brutal violence against civilians, egregious human rights violations and abuses, and a humanitarian disaster on a devastating scale across the country.\" The latest extension was for 18 months and expires on November 2, 2020. ", "Meanwhile, citing improved conditions in Sudan, including a reduction in violence and an increase in food harvests, then-Acting DHS Secretary Elaine Duke announced in September 2017 that Sudan's TPS designation would expire on November 2, 2018. As of the date of this report, the termination is on hold as the result of a court order."], "subsections": []}, {"section_title": "Syria", "paragraphs": ["The political uprising of 2011 in Syria grew into an intensely violent civil war that has led to 5.6 million Syrians fleeing the country and 6 million more internally displaced by 2018. On March 29, 2012, then-Secretary of Homeland Security Janet Napolitano designated the Syrian Arab Republic (Syria) for TPS through September 30, 2013, citing temporary extraordinary conditions that would make it unsafe for Syrian nationals already in the United States to return to the country. In that initial granting of TPS, Secretary Napolitano made clear that DHS would conduct full background checks on Syrians registering for TPS. TPS for Syrian nationals has since been extended. The 18-month extension on August 1, 2016, was accompanied by a redesignation, which updated the required arrival date into the United States for Syrians from January 5, 2015, to August 1, 2016. On January 31, 2018, Secretary Nielsen announced her decision to extend the TPS designation for Syria for another 18 months, citing the ongoing armed conflict and extraordinary conditions that prompted the original designation. This announcement did not include a redesignation; thus, Syrians who entered the United States after August 1, 2016, are not eligible."], "subsections": []}, {"section_title": "Yemen", "paragraphs": ["On September 3, 2015, then-Secretary Jeh Johnson designated Yemen for TPS through March 3, 2017, due to ongoing armed conflict in the country. A 2015 DHS press release stated that \"requiring Yemeni nationals in the United States to return to Yemen would pose a serious threat to their personal safety.\" The civil war in Yemen reached new levels in 2017. The United Nations estimated that the civilian death toll had reached 10,000, and the World Food Program reported that 60% of Yemenis, or 17 million people, were in \"crisis\" or \"emergency\" food situations. Relief efforts in the region have been complicated by ongoing violence and considerable damage to the country's infrastructure. On January 4, 2017, DHS extended and redesignated Yemen's current TPS designation through September 3, 2018. The redesignation updated the required arrival date into the United States for individuals from Yemen from September 3, 2015, to January 4, 2017. The Federal Register notice explained that the \"continued deterioration of the conditions for civilians in Yemen and the resulting need to offer protection to individuals who have arrived in the United States after the eligibility cutoff dates\" warranted the redesignation of TPS. On July 5, 2018, DHS extended Yemen's TPS designation for another 18 months, resulting in an expiration date of March 3, 2020. "], "subsections": []}]}, {"section_title": "State of Residence of TPS Recipients", "paragraphs": ["Individuals with TPS reside in all 50 states, the District of Columbia, and the U.S. territories. The highest populations live in traditional immigrant gateway states: California, Florida, Texas, and New York. In addition to these four, six other states had at least 10,000 TPS recipients as of November 2018: Virginia, Maryland, New Jersey, Massachusetts, North Carolina, and Georgia. Hawaii, Wyoming, Vermont, and Montana had fewer than 100 individuals with TPS. See Figure 1 and Table A-1 . "], "subsections": []}, {"section_title": "Adjustment of Status", "paragraphs": ["A grant of TPS does not provide a recipient with a designated pathway to lawful permanent resident (LPR) status; however, a TPS recipient is not barred from adjusting to nonimmigrant or immigrant status if he or she meets the requirements. There are statutory limitations on Congress providing adjustment of status to TPS recipients. ", "Over the years, Congress has provided eligibility for LPR status to groups of nationals who had been given temporary relief from removal. In 1992, Congress enacted legislation allowing Chinese nationals who had DED following the Tiananmen Square massacre to adjust to LPR status ( P.L. 102-404 ). The Nicaraguan Adjustment and Central American Relief Act (NACARA) (Title II of P.L. 105-100 ), which became law in 1997, provided eligibility for LPR status to certain Nicaraguans, Cubans, Guatemalans, Salvadorans, and nationals of the former Soviet bloc who had applied for asylum and had been living in the United States for a certain period of time. The 105 th Congress passed the Haitian Refugee Immigration Fairness Act, enabling Haitians who had filed asylum claims or who were paroled into the United States before December 31, 1995, to adjust to legal permanent residence ( P.L. 105-277 ). ", "Legislation that would have allowed nationals from various countries that have had TPS to adjust to LPR status received action in past Congresses, but was not enacted. For instance, the Senate-passed comprehensive immigration reform bill in the 113 th Congress ( S. 744 ) did not include specific provisions for foreign nationals with TPS to adjust status, but many would have qualified for the registered provisional immigrant status that S. 744 would have established."], "subsections": []}, {"section_title": "Selected Activity in the 115th and 116th Congresses", "paragraphs": ["Various proposals related to TPS have been introduced in the 115 th and 116 th Congresses. Some bills would extend or expand TPS designations for certain countries (e.g., Venezuela), prohibit federal funds from being used to implement recent TPS terminations, or provide adjustment to LPR status for TPS recipients who have been living in the United States for several years. Other bills variously seek to limit the program by transferring authority from DHS to Congress to designate foreign states; making unauthorized aliens and members of criminal gangs ineligible; restricting the criteria for designating a foreign state; making TPS recipients subject to detention and expedited removal; or phasing out the program. "], "subsections": [{"section_title": "Appendix.", "paragraphs": [], "subsections": []}]}]}}
{"id": "RL32665", "title": "Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress", "released_date": "2019-05-07T00:00:00", "summary": ["The current and planned size and composition of the Navy, the rate of Navy ship procurement, and the prospective affordability of the Navy's shipbuilding plans have been oversight matters for the congressional defense committees for many years.", "On December 15, 2016, the Navy released a force-structure goal that calls for achieving and maintaining a fleet of 355 ships of certain types and numbers. The 355-ship force-level goal is the result of a Force Structure Assessment (FSA) conducted by the Navy in 2016. The Navy states that a new FSA is now underway as the successor to the 2016 FSA. This new FSA, Navy officials state, is to be completed by the end of 2019. Navy officials have suggested in their public remarks that this new FSA could change the 355-ship figure, the planned mix of ships, or both.", "The Navy's proposed FY2020 budget requests funding for the procurement of 12 new ships, including one Gerald R. Ford (CVN-78) class aircraft carrier, three Virginia-class attack submarines, three DDG-51 class Aegis destroyers, one FFG(X) frigate, two John Lewis (TAO-205) class oilers, and two TATS towing, salvage, and rescue ships. The Navy's FY2020 five-year (FY2020-FY2024) shipbuilding plan includes 55 new ships, or an average of 11 new ships per year.", "The Navy's FY2020 30-year (FY2020-FY2049) shipbuilding plan includes 304 ships, or an average of about 10 per year. If the FY2020 30-year shipbuilding plan is implemented, the Navy projects that it will achieve a total of 355 ships by FY2034. This is about 20 years sooner than projected under the Navy's FY2019 30-year shipbuilding plan\u2014an acceleration primarily due to a decision announced by the Navy in April 2018, after the FY2019 plan was submitted, to increase the service lives of all DDG-51 destroyers to 45 years. Although the Navy projects that the fleet will reach a total of 355 ships in FY2034, the Navy in that year and subsequent years will not match the composition called for in the FY2016 FSA.", "One issue for Congress is whether the new FSA that the Navy is conducting will change the 355-ship force-level objective established by the 2016 FSA and, if so, in what ways. Another oversight issue for Congress concerns the prospective affordability of the Navy's 30-year shipbuilding plan. Decisions that Congress makes regarding Navy force structure and shipbuilding plans can substantially affect Navy capabilities and funding requirements and the U.S. shipbuilding industrial base."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report presents background information and issues for Congress concerning the Navy's force structure and shipbuilding plans. The current and planned size and composition of the Navy, the rate of Navy ship procurement, and the prospective affordability of the Navy's shipbuilding plans have been oversight matters for the congressional defense committees for many years.", "The Navy's proposed FY2020 budget requests funding for the procurement of 12 new ships, including one Gerald R. Ford (CVN-78) class aircraft carrier, three Virginia-class attack submarines, three DDG-51 class Aegis destroyers, one FFG(X) frigate, two John Lewis (TAO-205) class oilers, and two TATS towing, salvage, and rescue ships.", "The issue for Congress is whether to approve, reject, or modify the Navy's proposed FY2020 shipbuilding program and the Navy's longer-term shipbuilding plans. Decisions that Congress makes on this issue can substantially affect Navy capabilities and funding requirements, and the U.S. shipbuilding industrial base.", "Detailed coverage of certain individual Navy shipbuilding programs can be found in the following CRS reports:", "CRS Report R41129, Navy Columbia (SSBN-826) Class Ballistic Missile Submarine Program: Background and Issues for Congress , by Ronald O'Rourke. CRS Report RL32418, Navy Virginia (SSN-774) Class Attack Submarine Procurement: Background and Issues for Congress , by Ronald O'Rourke. CRS Report RS20643, Navy Ford (CVN-78) Class Aircraft Carrier Program: Background and Issues for Congress , by Ronald O'Rourke. (This report also covers the issue of the Administration's FY2020 budget proposal, which the Administration withdrew on April 30, to not fund a mid-life refueling overhaul [called a refueling complex overhaul, or RCOH] for the aircraft carrier Harry S. Truman [CVN-75], and to retire CVN-75 around FY2024.) CRS Report RL32109, Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress , by Ronald O'Rourke. CRS Report R44972, Navy Frigate (FFG[X]) Program: Background and Issues for Congress , by Ronald O'Rourke. CRS Report RL33741, Navy Littoral Combat Ship (LCS) Program: Background and Issues for Congress , by Ronald O'Rourke. CRS Report R43543, Navy LPD-17 Flight II Amphibious Ship Program: Background and Issues for Congress , by Ronald O'Rourke. (This report also covers the issue of funding for the procurement of an amphibious assault ship called LHA-9.) CRS Report R43546, Navy John Lewis (TAO-205) Class Oiler Shipbuilding Program: Background and Issues for Congress , by Ronald O'Rourke.", "For a discussion of the strategic and budgetary context in which U.S. Navy force structure and shipbuilding plans may be considered, see Appendix A ."], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "Navy's 355-Ship Ship Force-Structure Goal", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["On December 15, 2016, the Navy released a force-structure goal that calls for achieving and maintaining a fleet of 355 ships of certain types and numbers. The 355-ship force-level goal replaced a 308-ship force-level goal that the Navy released in March 2015. The 355-ship force-level goal is the largest force-level goal that the Navy has released since a 375-ship force-level goal that was in place in 2002-2004. In the years between that 375-ship goal and the 355-ship goal, Navy force-level goals were generally in the low 300s (see Appendix B ). The force level of 355 ships is a goal to be attained in the future; the actual size of the Navy in recent years has generally been between 270 and 290 ships. Table 1 shows the composition of the 355-ship force-level objective."], "subsections": []}, {"section_title": "355-Ship Goal Resulted from 2016 Force Structure Assessment (FSA)", "paragraphs": ["The 355-ship force-level goal is the result of a Force Structure Assessment (FSA) conducted by the Navy in 2016. An FSA is an analysis in which the Navy solicits inputs from U.S. regional combatant commanders (CCDRs) regarding the types and amounts of Navy capabilities that CCDRs deem necessary for implementing the Navy's portion of the national military strategy and then translates those CCDR inputs into required numbers of ships, using current and projected Navy ship types. The analysis takes into account Navy capabilities for both warfighting and day-to-day forward-deployed presence. Although the result of the FSA is often reduced for convenience to single number (e.g., 355 ships), FSAs take into account a number of factors, including types and capabilities of Navy ships, aircraft, unmanned vehicles, and weapons, as well as ship homeporting arrangements and operational cycles. The Navy conducts a new FSA or an update to the existing FSA every few years, as circumstances require, to determine its force-structure goal."], "subsections": []}, {"section_title": "355-Ship Goal Made U.S. Policy by FY2018 NDAA", "paragraphs": ["Section 1025 of the FY2018 National Defense Authorization Act, or NDAA ( H.R. 2810 / P.L. 115-91 of December 12, 2017), states the following:", "SEC. 1025. Policy of the United States on minimum number of battle force ships.", "(a) Policy.\u2014It shall be the policy of the United States to have available, as soon as practicable, not fewer than 355 battle force ships, comprised of the optimal mix of platforms, with funding subject to the availability of appropriations or other funds.", "(b) Battle force ships defined.\u2014In this section, the term \"battle force ship\" has the meaning given the term in Secretary of the Navy Instruction 5030.8C.", "The term battle force ships in the above provision refers to the ships that count toward the quoted size of the Navy in public policy discussions about the Navy."], "subsections": []}, {"section_title": "New FSA Now Being Done Could Change 355-Ship Figure and Force Mix", "paragraphs": ["The Navy states that a new FSA is now underway as the successor to the 2016 FSA, and that this new FSA is to be completed by the end of 2019. The new FSA, Navy officials state, will take into account the Trump Administration's December 2017 National Security Strategy document and its January 2018 National Defense Strategy document, both of which put an emphasis on renewed great power competition with China and Russia, as well as updated information on Chinese and Russian naval and other military capabilities and recent developments in new technologies, including those related to unmanned vehicles (UVs).", "Navy officials have suggested in their public remarks that this new FSA could change the 355-ship figure, the planned mix of ships, or both. Some observers, viewing statements by Navy officials, believe the new FSA in particular might shift the Navy's surface force to a more distributed architecture that includes a reduced proportion of large surface combatants (i.e., cruisers and destroyers), an increased proportion of small surface combatants (i.e., frigates and LCSs), and a newly created third tier of unmanned surface vehicles (USVs). Some observers believe the new FSA might also change the Navy's undersea force to a more distributed architecture that includes, in addition to attack submarines (SSNs) and bottom-based sensors, a new element of extremely large unmanned underwater vehicles (XLUUVs), which might be thought of as unmanned submarines. In presenting its proposed FY2020 budget, the Navy highlighted its plans for developing and procuring USVs and UUVs in coming years.", "Shifting to a more distributed force architecture, Navy officials have suggested, could be appropriate for implementing the Navy's new overarching operational concept, called Distributed Maritime Operations (DMO). Observers view DMO as a response to both China's improving maritime anti-access/area denial capabilities (which include advanced weapons for attacking Navy surface ships) and opportunities created by new technologies, including technologies for UVs and for networking Navy ships, aircraft, unmanned vehicles, and sensors into distributed battle networks.", " Figure 1 shows a Navy briefing slide depicting the Navy's potential new surface force architecture, with each sphere representing a manned ship or a USV. Consistent with Figure 1 , the Navy's 355-ship goal, reflecting the current force architecture, calls for a Navy with twice as many large surface combatants as small surface combatants. Figure 1 suggests that the potential new surface force architecture could lead to the obverse\u2014a planned force mix that calls for twice as many small surface combatants than large surface combatants\u2014along with a new third tier of numerous USVs.", "Observers believe the new FSA might additionally change the top-level metric used to express the Navy's force-level goal or the method used to count the size of the Navy, or both, to include large USVs and large UUVs."], "subsections": []}]}, {"section_title": "Navy's Five-Year and 30-Year Shipbuilding Plans", "paragraphs": [], "subsections": [{"section_title": "FY2020 Five-Year (FY2020-FY2024) Shipbuilding Plan", "paragraphs": [" Table 2 shows the Navy's FY2020 five-year (FY2020-FY2024) shipbuilding plan. The table also shows, for reference purposes, the ships funded for procurement in FY2019. The figures in the table reflect a Navy decision to show the aircraft carrier CVN-81 as a ship to be procured in FY2020 rather than a ship that was procured in FY2019. Congress, as part of its action on the Navy's proposed FY2019 budget, authorized the procurement of CVN-81 in FY2019.", "As shown in Table 2 , the Navy's proposed FY2020 budget requests funding for the procurement of 12 new ships, including one Gerald R. Ford (CVN-78) class aircraft carrier, three Virginia-class attack submarines, three DDG-51 class Aegis destroyers, one FFG(X) frigate, two John Lewis (TAO-205) class oilers, and two TATS towing, salvage, and rescue ships. If the Navy had listed CVN-81 as a ship procured in FY2019 rather than a ship to be procured in FY2020, then the total numbers of ships in FY2019 and FY2020 would be 14 and 11, respectively.", "As also shown Table 2 , the Navy's FY2020 five-year (FY2020-FY2024) shipbuilding plan includes 55 new ships, or an average of 11 new ships per year. The Navy's FY2019 budget submission also included a total of 55 ships in the period FY2020-FY2024, but the mix of ships making up the total of 55 for these years has been changed under the FY2020 budget submission to include one additional attack submarine, one additional FFG(X) frigate, and two (rather than four) LPD-17 Flight II amphibious ships over the five-year period. The FY2020 submission also makes some changes within the five-year period to annual procurement quantities for DDG-51 destroyers, ESBs, and TAO-205s without changing the five-year totals for these programs.", "Compared to what was projected for FY2020 itself under the FY2019 budget submission, the FY2020 request accelerates from FY2023 to FY2020 the aircraft carrier CVN-81 (as a result of Congress's action to authorize the ship in FY2019), adds a third attack submarine, accelerates from FY2021 into FY2020 a third DDG-51, defers from FY2020 to FY2021 an LPD-17 Flight II amphibious ship to FY2021, defers from FY2020 to FY2023 an ESB ship, and accelerates from FY2021 to FY2020 a second TAO-205 class oiler."], "subsections": []}, {"section_title": "FY2020 30-Year (FY2020-FY2049) Shipbuilding Plan", "paragraphs": [" Table 3 shows the Navy's FY2020-FY2049 30-year shipbuilding plan. In devising a 30-year shipbuilding plan to move the Navy toward its ship force-structure goal, key assumptions and planning factors include but are not limited to ship construction times and service lives, estimated ship procurement costs, projected shipbuilding funding levels, and industrial-base considerations. As shown in Table 3 , the Navy's FY2020 30-year shipbuilding plan includes 304 new ships, or an average of about 10 per year."], "subsections": []}, {"section_title": "Projected Force Levels Under FY2020 30-Year Shipbuilding Plan", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": [" Table 4 shows the Navy's projection of ship force levels for FY2020-FY2049 that would result from implementing the FY2020 30-year (FY2020-FY2049) 30-year shipbuilding plan shown in Table 3 .", "As shown in Table 4 , if the FY2020 30-year shipbuilding plan is implemented, the Navy projects that it will achieve a total of 355 ships by FY2034. This is about 20 years sooner than projected under the Navy's FY2019 30-year shipbuilding plan. This is not primarily because the FY2020 30-year plan includes more ships than did the FY2019 plan: The total of 304 ships in the FY2020 plan is only three ships higher than the total of 301 ships in the FY2019 plan. Instead, it is primarily due to a decision announced by the Navy in April 2018, after the FY2019 budget was submitted, to increase the service lives of all DDG-51 destroyers\u2014both those existing and those to be built in the future\u2014to 45 years. Prior to this decision, the Navy had planned to keep older DDG-51s (referred to as the Flight I/II DDG-51s) in service for 35 years and newer DDG-51s (the Flight II/III DDG-51s) for 40 years. Figure 2 shows the Navy's projections for the total number of ships in the Navy under the Navy's FY2019 and FY2020 budget submissions. As can be seen in the figure, the Navy projected under the FY2019 plan that the fleet would not reach a total of 355 ships any time during the 30-year period."], "subsections": []}, {"section_title": "Adjustment Needed for Withdrawn Proposal Regarding CVN-75 RCOH", "paragraphs": ["The projected number of aircraft carriers in Table 4 , the projected total number of all ships in Table 4 , and the line showing the total number of ships under the Navy's FY2020 budget submission in Figure 2 all reflect the Navy's proposal, under its FY2020 budget submission, to not fund the mid-life nuclear refueling overhaul (called a refueling complex overhaul, or RCOH) of the aircraft carrier Harry S. Truman (CVN-75), and to instead retire CVN-75 around FY2024. On April 30, 2019, however, the Administration announced that it was withdrawing this proposal from the Navy's FY2020 budget submission. The Administration now supports funding the CVN-75 RCOH and keeping CVN-75 in service past FY2024.", "As a result of the withdrawal of its proposal regarding the CVN-75 RCOH, the projected number of aircraft carriers and consequently the projected total number of all ships are now one ship higher for the period FY2022-FY2047 than what is shown in Table 4 , and the line in Figure 2 would be adjusted upward by one ship for those years. (The figures in Table 4 are left unchanged from what is shown in the FY2020 budget submission so as to accurately reflect what is shown in that budget submission.)"], "subsections": []}, {"section_title": "355-Ship Total Attained 20 Years Sooner; Mix Does Not Match FSA Mix", "paragraphs": ["As shown in Table 4 , although the Navy projects that the fleet will reach a total of 355 ships in FY2034, the Navy in that year and subsequent years will not match the composition called for in the FY2016 FSA. Among other things, the Navy will have more than the required number of large surface combatants (i.e., cruisers and destroyers) from FY2030 through FY2040 (a consequence of the decision to extend the service lives of DDG-51s to 45 years), fewer than the required number of aircraft carriers through the end of the 30-year period, fewer than the required number of attack submarines through FY2047, and fewer than the required number of amphibious ships through the end of the 30-year period. The Navy acknowledges that the mix of ships will not match that called for by the 2016 FSA but states that if the Navy is going to have too many ships of a certain kind, DDG-51s are not a bad type of ship to have too many of, because they are very capable multi-mission ships."], "subsections": []}]}]}]}, {"section_title": "Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "Whether New FSA Will Change 355-Ship Goal and, If So, How", "paragraphs": ["One issue for Congress is whether the new FSA that the Navy is conducting will change the 355-ship force-level objective established by the 2016 FSA and, if so, in what ways. As discussed earlier, Navy officials have suggested in their public remarks that this new FSA could shift the Navy toward a more distributed force architecture, which could change the 355-ship figure, the planned mix of ships, or both. The issue for Congress is how to assess the appropriateness of the Navy's FY2020 shipbuilding plans when a key measuring stick for conducting that assessment\u2014the Navy's force-level goal and planned force mix\u2014might soon change."], "subsections": []}, {"section_title": "Affordability of 30-Year Shipbuilding Plan", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["Another oversight issue for Congress concerns the prospective affordability of the Navy's 30-year shipbuilding plan. This issue has been a matter of oversight focus for several years, and particularly since the enactment in 2011 of the Budget Control Act, or BCA ( S. 365 / P.L. 112-25 of August 2, 2011). Observers have been particularly concerned about the plan's prospective affordability during the decade or so from the mid-2020s through the mid-2030s, when the plan calls for procuring Columbia-class ballistic missile submarines as well as replacements for large numbers of retiring attack submarines, cruisers, and destroyers.", " Figure 3 shows, in a graphic form, the Navy's estimate of the annual amounts of funding that would be needed to implement the Navy's FY2020 30-year shipbuilding plan. The figure shows that during the period from the mid-2020s through the mid-2030s, the Navy estimates that implementing the FY2020 30-year shipbuilding plan would require roughly $24 billion per year in shipbuilding funds."], "subsections": []}, {"section_title": "Concern Regarding Potential Impact of Columbia-Class Program", "paragraphs": ["As discussed in the CRS report on the Columbia-class program, the Navy since 2013 has identified the Columbia-class program as its top program priority, meaning that it is the Navy's intention to fully fund this program, if necessary at the expense of other Navy programs, including other Navy shipbuilding programs. This led to concerns that in a situation of finite Navy shipbuilding budgets, funding requirements for the Columbia-class program could crowd out funding for procuring other types of Navy ships. These concerns in turn led to the creation by Congress of the National Sea-Based Deterrence Fund (NSBDF), a fund in the DOD budget that is intended in part to encourage policymakers to identify funding for the Columbia-class program from sources across the entire DOD budget rather than from inside the Navy's budget alone.", "Several years ago, when concerns arose about the potential impact of the Columbia-class program on funding available for other Navy shipbuilding programs, the Navy's shipbuilding budget was roughly $14 billion per year, and the roughly $7 billion per year that the Columbia-class program is projected to require from the mid-2020s to the mid-2030s (see Figure 3 ) represented roughly one-half of that total. With the Navy's shipbuilding budget having grown in more recent years to a total of roughly $24 billion per year, the $7 billion per year projected to be required by the Columbia-class program during those years does not loom proportionately as large as it once did in the Navy's shipbuilding budget picture. Even so, some concerns remain regarding the potential impact of the Columbia-class program on funding available for other Navy shipbuilding programs."], "subsections": []}, {"section_title": "Potential for Cost Growth on Navy Ships", "paragraphs": ["If one or more Navy ship designs turn out to be more expensive to build than the Navy estimates, then the projected funding levels shown in Figure 3 would not be sufficient to procure all the ships shown in the 30-year shipbuilding plan. As detailed by CBO and GAO, lead ships in Navy shipbuilding programs in many cases have turned out to be more expensive to build than the Navy had estimated. Ship designs that can be viewed as posing a risk of being more expensive to build than the Navy estimates include Gerald R. Ford (CVN-78) class aircraft carriers, Columbia-class ballistic missile submarines, Virginia-class attack submarines equipped with the Virginia Payload Module (VPM), Flight III versions of the DDG-51 destroyer, FFG(X) frigates, LPD-17 Flight II amphibious ships, and John Lewis (TAO-205) class oilers, as well as other new classes of ships that the Navy wants to begin procuring years from now."], "subsections": []}, {"section_title": "CBO Estimate", "paragraphs": ["The statute that requires the Navy to submit a 30-year shipbuilding plan each year (10 U.S.C. 231) also requires CBO to submit its own independent analysis of the potential cost of the 30-year plan (10 U.S.C. 231[d]). CBO is now preparing its estimate of the cost of the Navy's FY2020 30-year shipbuilding plan. In the meantime, Figure 4 shows, in a graphic form, CBO's estimate of the annual amounts of funding that would be needed to implement the Navy's FY2019 30-year shipbuilding plan. This figure might be compared to the Navy's estimate of its FY2020 30-year plan as shown in Figure 3 , although doing so poses some apples-vs.-oranges issues, as the Navy's FY2019 and FY2020 30-year plans do not cover exactly the same 30-year periods, and for the years they do have in common, there are some differences in types and numbers of ships to be procured in certain years.", "CBO analyses of past Navy 30-year shipbuilding plans have generally estimated the cost of implementing those plans to be higher than what the Navy estimated. Consistent with that past pattern, as shown in Table 5 , CBO's estimate of the cost to implement the Navy's FY2019 30-year (FY2019-FY2048) shipbuilding plan is about 27% higher than the Navy's estimated cost for the FY2019 plan. ( Table 5 does not pose an apples-vs.-oranges issue, because both the Navy and CBO estimates in this table are for the Navy's FY2019 30-year plan.) More specifically, as shown in the table, CBO estimated that the cost of the first 10 years of the FY2019 30-year plan would be about 2% higher than the Navy's estimate; that the cost of the middle 10 years of the plan would be about 13% higher than the Navy's estimate; and that the cost of the final 10 years of the plan would be about 27% higher than the Navy's estimate."], "subsections": [{"section_title": "Treatment of Inflation", "paragraphs": ["The growing divergence between CBO's estimate and the Navy's estimate as one moves from the first 10 years of the 30-year plan to the final 10 years of the plan is due in part to a technical difference between CBO and the Navy regarding the treatment of inflation. This difference compounds over time, making it increasingly important as a factor in the difference between CBO's estimates and the Navy's estimates the further one goes into the 30-year period. In other words, other things held equal, this factor tends to push the CBO and Navy estimates further apart as one proceeds from the earlier years of the plan to the later years of the plan."], "subsections": []}, {"section_title": "Designs of Future Classes of Ships", "paragraphs": ["The growing divergence between CBO's estimate and the Navy's estimate as one moves from the first 10 years of the 30-year plan to the final 10 years of the plan is also due to differences between CBO and the Navy about the costs of certain ship classes, particularly classes that are projected to be procured starting years from now. The designs of these future ship classes are not yet determined, creating more potential for CBO and the Navy to come to differing conclusions regarding their potential cost. For the FY2019 30-year plan, the largest source of difference between CBO and the Navy regarding the costs of individual ship classes was a new class of SSNs that the Navy wants to begin procuring in FY2034 as the successor to the Virginia-class SSN design. This new class of SSN, CBO says, accounted for 42% of the difference between the CBO and Navy estimates for the FY2019 30-year plan, in part because there were a substantial number of these SSNs in the plan, and because those ships occur in the latter years of the plan, where the effects of the technical difference between CBO and the Navy regarding the treatment of inflation show more strongly.", "The second-largest source of difference between CBO and the Navy regarding the costs of individual ship classes was a new class of large surface combatant (i.e., cruiser or destroyer) that the Navy wants to begin procuring in the future, which accounted for 20% of the difference, for reasons that are similar to those mentioned above for the new class of SSNs. The third-largest source of difference was the new class of frigates (FFG[X]s) that the Navy wants to begin procuring in FY2020, which accounts for 9% of the difference. The remaining 29% of difference between the CBO and Navy estimates was accounted for collectively by several other shipbuilding programs, each of which individually accounts for between 1% and 4% of the difference. The Columbia-class program, which accounted for 4%, is one of the programs in this final group."], "subsections": []}]}]}]}, {"section_title": "Legislative Activity for FY2020", "paragraphs": [], "subsections": [{"section_title": "CRS Reports Tracking Legislation on Specific Navy Shipbuilding Programs", "paragraphs": ["Detailed coverage of legislative activity on certain Navy shipbuilding programs (including funding levels, legislative provisions, and report language) can be found in the following CRS reports:", "CRS Report R41129, Navy Columbia (SSBN-826) Class Ballistic Missile Submarine Program: Background and Issues for Congress , by Ronald O'Rourke. CRS Report RL32418, Navy Virginia (SSN-774) Class Attack Submarine Procurement: Background and Issues for Congress , by Ronald O'Rourke. CRS Report RS20643, Navy Ford (CVN-78) Class Aircraft Carrier Program: Background and Issues for Congress , by Ronald O'Rourke. (This report also covers the issue of the Administration's FY2020 budget proposal, which the Administration withdrew on April 30, to not fund a mid-life refueling overhaul [called a refueling complex overhaul, or RCOH] for the aircraft carrier Harry S. Truman [CVN-75], and to retire CVN-75 around FY2024.) CRS Report RL32109, Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress , by Ronald O'Rourke. CRS Report R44972, Navy Frigate (FFG[X]) Program: Background and Issues for Congress , by Ronald O'Rourke. CRS Report RL33741, Navy Littoral Combat Ship (LCS) Program: Background and Issues for Congress , by Ronald O'Rourke. CRS Report R43543, Navy LPD-17 Flight II Amphibious Ship Program: Background and Issues for Congress , by Ronald O'Rourke. (This report also covers the issue of funding for the procurement of an amphibious assault ship called LHA-9.) CRS Report R43546, Navy John Lewis (TAO-205) Class Oiler Shipbuilding Program: Background and Issues for Congress , by Ronald O'Rourke.", "Legislative activity on individual Navy shipbuilding programs that are not covered in detail in the above reports is covered below."], "subsections": []}, {"section_title": "Summary of Congressional Action on FY2020 Funding Request", "paragraphs": ["The Navy's proposed FY2020 budget requests funding for the procurement of 12 new ships:", "1 Gerald R. Ford (CVN-78) class aircraft carrier; 3 Virginia-class attack submarines; 3 DDG-51 class Aegis destroyers; 1 FFG(X) frigate; 2 John Lewis (TAO-205) class oilers; and 2 TATS towing, salvage, and rescue ships.", "As noted earlier, the above list of 12 ships reflects a Navy decision to show the aircraft carrier CVN-81 as a ship to be procured in FY2020 rather than a ship that was procured in FY2019. Congress, as part of its action on the Navy's proposed FY2019 budget, authorized the procurement of CVN-81 in FY2019.", "The Navy's proposed FY2020 shipbuilding budget also requests funding for ships that have been procured in prior fiscal years, and ships that are to be procured in future fiscal years, as well as funding for activities other than the building of new Navy ships.", " Table 6 summarizes congressional action on the Navy's FY2020 funding request for Navy shipbuilding. The table shows the amounts requested and congressional changes to those requested amounts. A blank cell in a filled-in column showing congressional changes to requested amounts indicates no change from the requested amount. ", "Appendix A. Strategic and Budgetary Context", "This appendix presents some brief comments on elements of the strategic and budgetary context in which U.S. Navy force structure and shipbuilding plans may be considered.", "Shift in International Security Environment", "World events have led some observers, starting in late 2013, to conclude that the international security environment has undergone a shift over the past several years from the familiar post-Cold War era of the past 20-25 years, also sometimes known as the unipolar moment (with the United States as the unipolar power), to a new and different strategic situation that features, among other things, renewed great power competition with China and Russia, and challenges to elements of the U.S.-led international order that has operated since World War II. This situation is discussed further in another CRS report.", "World Geography and U.S. Grand Strategy", "Discussion of the above-mentioned shift in the international security environment has led to a renewed emphasis in discussions of U.S. security and foreign policy on grand strategy and geopolitics. From a U.S. perspective on grand strategy and geopolitics, it can be noted that most of the world's people, resources, and economic activity are located not in the Western Hemisphere, but in the other hemisphere, particularly Eurasia. In response to this basic feature of world geography, U.S. policymakers for the past several decades have chosen to pursue, as a key element of U.S. national strategy, a goal of preventing the emergence of a regional hegemon in one part of Eurasia or another, on the grounds that such a hegemon could represent a concentration of power strong enough to threaten core U.S. interests by, for example, denying the United States access to some of the other hemisphere's resources and economic activity. Although U.S. policymakers have not often stated this key national strategic goal explicitly in public, U.S. military (and diplomatic) operations in recent decades\u2014both wartime operations and day-to-day operations\u2014can be viewed as having been carried out in no small part in support of this key goal.", "U.S. Grand Strategy and U.S. Naval Forces", "As noted above, in response to basic world geography, U.S. policymakers for the past several decades have chosen to pursue, as a key element of U.S. national strategy, a goal of preventing the emergence of a regional hegemon in one part of Eurasia or another. The traditional U.S. goal of preventing the emergence of a regional hegemon in one part of Eurasia or another has been a major reason why the U.S. military is structured with force elements that enable it to cross broad expanses of ocean and air space and then conduct sustained, large-scale military operations upon arrival. Force elements associated with this goal include, among other things, an Air Force with significant numbers of long-range bombers, long-range surveillance aircraft, long-range airlift aircraft, and aerial refueling tankers, and a Navy with significant numbers of aircraft carriers, nuclear-powered attack submarines, large surface combatants, large amphibious ships, and underway replenishment ships. ", "The United States is the only country in the world that has designed its military to cross broad expanses of ocean and air space and then conduct sustained, large-scale military operations upon arrival. The other countries in the Western Hemisphere do not design their forces to do this because they cannot afford to, and because the United States has been, in effect, doing it for them. Countries in the other hemisphere do not design their forces to do this for the very basic reason that they are already in the other hemisphere, and consequently instead spend their defense money on forces that are tailored largely for influencing events in their own local region.", "The fact that the United States has designed its military to do something that other countries do not design their forces to do\u2014cross broad expanses of ocean and air space and then conduct sustained, large-scale military operations upon arrival\u2014can be important to keep in mind when comparing the U.S. military to the militaries of other nations. For example, in observing that the U.S. Navy has 11 aircraft carriers while other countries have no more than one or two, it can be noted other countries do not need a significant number of aircraft carriers because, unlike the United States, they are not designing their forces to cross broad expanses of ocean and air space and then conduct sustained, large-scale military operations upon arrival.", "As another example, it is sometimes noted, in assessing the adequacy of U.S. naval forces, that U.S. naval forces are equal in tonnage to the next dozen or more navies combined, and that most of those next dozen or more navies are the navies of U.S. allies. Those other fleets, however, are mostly of Eurasian countries, which do not design their forces to cross to the other side of the world and then conduct sustained, large-scale military operations upon arrival. The fact that the U.S. Navy is much bigger than allied navies does not necessarily prove that U.S. naval forces are either sufficient or excessive; it simply reflects the differing and generally more limited needs that U.S. allies have for naval forces. (It might also reflect an underinvestment by some of those allies to meet even their more limited naval needs.)", "Countries have differing needs for naval and other military forces. The United States, as a country located in the Western Hemisphere that has adopted a goal of preventing the emergence of a regional hegemon in one part of Eurasia or another, has defined a need for naval and other military forces that is quite different from the needs of allies that are located in Eurasia. The sufficiency of U.S. naval and other military forces consequently is best assessed not through comparison to the militaries of other countries, but against U.S. strategic goals.", "More generally, from a geopolitical perspective, it can be noted that that U.S. naval forces, while not inexpensive, give the United States the ability to convert the world's oceans\u2014a global commons that covers more than two-thirds of the planet's surface\u2014into a medium of maneuver and operations for projecting U.S. power ashore and otherwise defending U.S. interests around the world. The ability to use the world's oceans in this manner\u2014and to deny other countries the use of the world's oceans for taking actions against U.S. interests\u2014constitutes an immense asymmetric advantage for the United States. This point would be less important if less of the world were covered by water, or if the oceans were carved into territorial blocks, like the land. Most of the world, however, is covered by water, and most of those waters are international waters, where naval forces can operate freely. The point, consequently, is not that U.S. naval forces are intrinsically special or privileged\u2014it is that they have a certain value simply as a consequence of the physical and legal organization of the planet.", "Uncertainty Regarding Future U.S. Role in the World", "The overall U.S. role in the world since the end of World War II in 1945 (i.e., over the past 70 years) is generally described as one of global leadership and significant engagement in international affairs. A key aim of that role has been to promote and defend the open international order that the United States, with the support of its allies, created in the years after World War II. In addition to promoting and defending the open international order, the overall U.S. role is generally described as having been one of promoting freedom, democracy, and human rights, while criticizing and resisting authoritarianism where possible, and opposing the emergence of regional hegemons in Eurasia or a spheres-of-influence world.", "Certain statements and actions from the Trump Administration have led to uncertainty about the Administration's intentions regarding the U.S. role in the world. Based on those statements and actions, some observers have speculated that the Trump Administration may want to change the U.S. role in one or more ways. A change in the overall U.S. role could have profound implications for DOD strategy, budgets, plans, and programs, including the planned size and structure of the Navy.", "Declining U.S. Technological and Qualitative Edge", "DOD officials have expressed concern that the technological and qualitative edge that U.S. military forces have had relative to the military forces of other countries is being narrowed by improving military capabilities in other countries. China's improving military capabilities are a primary contributor to that concern. Russia's rejuvenated military capabilities are an additional contributor. DOD in recent years has taken a number of actions to arrest and reverse the decline in the U.S. technological and qualitative edge.", "Challenge to U.S. Sea Control and U.S. Position in Western Pacific", "Observers of Chinese and U.S. military forces view China's improving naval capabilities as posing a potential challenge in the Western Pacific to the U.S. Navy's ability to achieve and maintain control of blue-water ocean areas in wartime\u2014the first such challenge the U.S. Navy has faced since the end of the Cold War. More broadly, these observers view China's naval capabilities as a key element of an emerging broader Chinese military challenge to the long-standing status of the United States as the leading military power in the Western Pacific.", "Longer Ship Deployments", "U.S. Navy officials have testified that fully meeting requests from U.S. regional combatant commanders (CCDRs) for forward-deployed U.S. naval forces would require a Navy much larger than today's fleet. For example, Navy officials testified in March 2014 that a Navy of 450 ships would be required to fully meet CCDR requests for forward-deployed Navy forces. CCDR requests for forward-deployed U.S. Navy forces are adjudicated by DOD through a process called the Global Force Management Allocation Plan. The process essentially makes choices about how best to apportion a finite number forward-deployed U.S. Navy ships among competing CCDR requests for those ships. Even with this process, the Navy has lengthened the deployments of some ships in an attempt to meet policymaker demands for forward-deployed U.S. Navy ships. Although Navy officials are aiming to limit ship deployments to seven months, Navy ships in recent years have frequently been deployed for periods of eight months or more.", "Limits on Defense Spending in Budget Control Act of 2011 as Amended", "Limits on the \"base\" portion of the U.S. defense budget established by Budget Control Act of 2011, or BCA ( S. 365 / P.L. 112-25 of August 2, 2011), as amended, combined with some of the considerations above, have led to discussions among observers about how to balance competing demands for finite U.S. defense funds, and about whether programs for responding to China's military modernization effort can be adequately funded while also adequately funding other defense-spending priorities, such as initiatives for responding to Russia's actions in Ukraine and elsewhere in Europe and U.S. operations for countering the Islamic State organization in the Middle East.", "Appendix B. Earlier Navy Force-Structure Goals Dating Back to 2001", "The table below shows earlier Navy force-structure goals dating back to 2001. The 308-ship force-level goal of March 2015, shown in the first column of the table, is the goal that was replaced by the 355-ship force-level goal released in December 2016.", "Appendix C. Comparing Past Ship Force Levels to Current or Potential Future Ship Force Levels", "In assessing the appropriateness of the current or potential future number of ships in the Navy, observers sometimes compare that number to historical figures for total Navy fleet size. Historical figures for total fleet size, however, can be a problematic yardstick for assessing the appropriateness of the current or potential future number of ships in the Navy, particularly if the historical figures are more than a few years old, because", "the missions to be performed by the Navy, the mix of ships that make up the Navy, and the technologies that are available to Navy ships for performing missions all change over time; and the number of ships in the fleet in an earlier year might itself have been inappropriate (i.e., not enough or more than enough) for meeting the Navy's mission requirements in that year.", "Regarding the first bullet point above, the Navy, for example, reached a late-Cold War peak of 568 battle force ships at the end of FY1987, and as of May 7, 2019, included a total of 289 battle force ships. The FY1987 fleet, however, was intended to meet a set of mission requirements that focused on countering Soviet naval forces at sea during a potential multitheater NATO-Warsaw Pact conflict, while the May 2019 fleet is intended to meet a considerably different set of mission requirements centered on influencing events ashore by countering both land- and sea-based military forces of China, Russia, North Korea, and Iran, as well as nonstate terrorist organizations. In addition, the Navy of FY1987 differed substantially from the May 2019 fleet in areas such as profusion of precision-guided air-delivered weapons, numbers of Tomahawk-capable ships, and the sophistication of C4ISR systems and networking capabilities.", "In coming years, Navy missions may shift again, and the capabilities of Navy ships will likely have changed further by that time due to developments such as more comprehensive implementation of networking technology, increased use of ship-based unmanned vehicles, and the potential fielding of new types of weapons such as lasers or electromagnetic rail guns.", "The 568-ship fleet of FY1987 may or may not have been capable of performing its stated missions; the 289-ship fleet of May 2019 may or may not be capable of performing its stated missions; and a fleet years from now with a certain number of ships may or may not be capable of performing its stated missions. Given changes over time in mission requirements, ship mixes, and technologies, however, these three issues are to a substantial degree independent of one another.", "For similar reasons, trends over time in the total number of ships in the Navy are not necessarily a reliable indicator of the direction of change in the fleet's ability to perform its stated missions. An increasing number of ships in the fleet might not necessarily mean that the fleet's ability to perform its stated missions is increasing, because the fleet's mission requirements might be increasing more rapidly than ship numbers and average ship capability. Similarly, a decreasing number of ships in the fleet might not necessarily mean that the fleet's ability to perform stated missions is decreasing, because the fleet's mission requirements might be declining more rapidly than numbers of ships, or because average ship capability and the percentage of time that ships are in deployed locations might be increasing quickly enough to more than offset reductions in total ship numbers.", "Regarding the second of the two bullet points above, it can be noted that comparisons of the size of the fleet today with the size of the fleet in earlier years rarely appear to consider whether the fleet was appropriately sized in those earlier years (and therefore potentially suitable as a yardstick of comparison), even though it is quite possible that the fleet in those earlier years might not have been appropriately sized, and even though there might have been differences of opinion among observers at that time regarding that question. Just as it might not be prudent for observers years from now to tacitly assume that the 286-ship Navy of September 2018 was appropriately sized for meeting the mission requirements of 2018, even though there were differences of opinion among observers on that question, simply because a figure of 286 ships appears in the historical records for 2016, so, too, might it not be prudent for observers today to tacitly assume that the number of ships of the Navy in an earlier year was appropriate for meeting the Navy's mission requirements that year, even though there might have been differences of opinion among observers at that time regarding that question, simply because the size of the Navy in that year appears in a table like Table H-1 .", "Previous Navy force structure plans, such as those shown in Table B-1 , might provide some insight into the potential adequacy of a proposed new force-structure plan, but changes over time in mission requirements, technologies available to ships for performing missions, and other force-planning factors, as well as the possibility that earlier force-structure plans might not have been appropriate for meeting the mission demands of their times, suggest that some caution should be applied in using past force structure plans for this purpose, particularly if those past force structure plans are more than a few years old. The Reagan-era goal for a 600-ship Navy, for example, was designed for a Cold War set of missions focusing on countering Soviet naval forces at sea, which is not an appropriate basis for planning the Navy today, and there was considerable debate during those years as to the appropriateness of the 600-ship goal.", "Appendix D. Industrial Base Ability for, and Employment Impact of, Additional Shipbuilding Work", "This appendix presents background information on the ability of the industrial base to take on the additional shipbuilding work associated with achieving and maintaining the Navy's 355-ship force-level goal and on the employment impact of additional shipbuilding work.", "Industrial Base Ability", "The U.S. shipbuilding industrial base has some unused capacity to take on increased Navy shipbuilding work, particularly for certain kinds of surface ships, and its capacity could be increased further over time to support higher Navy shipbuilding rates. Navy shipbuilding rates could not be increased steeply across the board overnight\u2014time (and investment) would be needed to hire and train additional workers and increase production facilities at shipyards and supplier firms, particularly for supporting higher rates of submarine production. Depending on their specialties, newly hired workers could be initially less productive per unit of time worked than more experienced workers.", "Some parts of the shipbuilding industrial base, such as the submarine construction industrial base, could face more challenges than others in ramping up to the higher production rates required to build the various parts of the 355-ship fleet. Over a period of a few to several years, with investment and management attention, Navy shipbuilding could ramp up to higher rates for achieving a 355-ship fleet over a period of 20-30 years.", "An April 2017 CBO report stated that", "all seven shipyards [currently involved in building the Navy's major ships] would need to increase their workforces and several would need to make improvements to their infrastructure in order to build ships at a faster rate. However, certain sectors face greater obstacles in constructing ships at faster rates than others: Building more submarines to meet the goals of the 2016 force structure assessment would pose the greatest challenge to the shipbuilding industry. Increasing the number of aircraft carriers and surface combatants would pose a small to moderate challenge to builders of those vessels. Finally, building more amphibious ships and combat logistics and support ships would be the least problematic for the shipyards. The workforces across those yards would need to increase by about 40 percent over the next 5 to 10 years. Managing the growth and training of those new workforces while maintaining the current standard of quality and efficiency would represent the most significant industrywide challenge. In addition, industry and Navy sources indicate that as much as $4 billion would need to be invested in the physical infrastructure of the shipyards to achieve the higher production rates required under the [notional] 15-year and 20-year [buildup scenarios examined by CBO]. Less investment would be needed for the [notional] 25-year or 30-year [buildup scenarios examined by CBO].", "A January 13, 2017, press report states the following:", "The Navy's production lines are hot and the work to prepare them for the possibility of building out a much larger fleet would be manageable, the service's head of acquisition said Thursday.", "From a logistics perspective, building the fleet from its current 274 ships to 355, as recommended in the Navy's newest force structure assessment in December, would be straightforward, Assistant Secretary of the Navy for Research, Development and Acquisition Sean Stackley told reporters at the Surface Navy Association's annual symposium.", "\"By virtue of maintaining these hot production lines, frankly, over the last eight years, our facilities are in pretty good shape,\" Stackley said. \"In fact, if you talked to industry, they would say we're underutilizing the facilities that we have.\"", "The areas where the Navy would likely have to adjust \"tooling\" to answer demand for a larger fleet would likely be in Virginia-class attack submarines and large surface combatants, the DDG-51 guided missile destroyers\u2014two ship classes likely to surge if the Navy gets funding to build to 355 ships, he said.", "\"Industry's going to have to go out and procure special tooling associated with going from current production rates to a higher rate, but I would say that's easily done,\" he said.", "Another key, Stackley said, is maintaining skilled workers\u2014both the builders in the yards and the critical supply-chain vendors who provide major equipment needed for ship construction. And, he suggested, it would help to avoid budget cuts and other events that would force workforce layoffs.", "\"We're already prepared to ramp up,\" he said. \"In certain cases, that means not laying off the skilled workforce we want to retain.\"", "A January 17, 2017, press report states the following:", "Building stable designs with active production lines is central to the Navy's plan to grow to 355 ships. \"if you look at the 355-ship number, and you study the ship classes (desired), the big surge is in attack submarines and large surface combatants, which today are DDG-51 (destroyers),\" the Assistant Secretary of the Navy, Sean Stackley, told reporters at last week's Surface Navy Association conference. Those programs have proven themselves reliable performers both at sea and in the shipyards.", "From today's fleet of 274 ships, \"we're on an irreversible path to 308 by 2021. Those ships are already in construction,\" said Stackley. \"To go from there to 355, virtually all those ships are currently in production, with some exceptions: Ohio Replacement, (we) just got done the Milestone B there (to move from R&D into detailed design); and then upgrades to existing platforms. So we have hot production lines that will take us to that 355-ship Navy.\"", "A January 24, 2017, press report states the following:", "Navy officials say a recently determined plan to increase its fleet size by adding more new submarines, carriers and destroyers is \"executable\" and that early conceptual work toward this end is already underway....", "Although various benchmarks will need to be reached in order for this new plan to come to fruition, such as Congressional budget allocations, Navy officials do tell Scout Warrior that the service is already working\u2014at least in concept\u2014on plans to vastly enlarge the fleet. Findings from this study are expected to inform an upcoming 2018 Navy Shipbuilding Plan, service officials said.", "A January 12, 2017, press report states the following:", "Brian Cuccias, president of Ingalls Shipbuilding [a shipyard owned by Huntington Ingalls Industries (HII) that builds Navy destroyers and amphibious ships as well as Coast Guard cutters], said Ingalls, which is currently building 10 ships for four Navy and Coast Guard programs at its 800-acre facility in Pascagoula, Miss., could build more because it is using only 70 to 75 percent of its capacity.", "A March 2017 press report states the following:", "As the Navy calls for a larger fleet, shipbuilders are looking toward new contracts and ramping up their yards to full capacity....", "The Navy is confident that U.S. shipbuilders will be able to meet an increased demand, said Ray Mabus, then-secretary of the Navy, during a speech at the Surface Navy Association's annual conference in Arlington, Virginia.", "They have the capacity to \"get there because of the ships we are building today,\" Mabus said. \"I don't think we could have seven years ago.\"", "Shipbuilders around the United States have \"hot\" production lines and are manufacturing vessels on multi-year or block buy contracts, he added. The yards have made investments in infrastructure and in the training of their workers.", "\"We now have the basis ... [to] get to that much larger fleet,\" he said....", "Shipbuilders have said they are prepared for more work.", "At Ingalls Shipbuilding\u2014a subsidiary of Huntington Ingalls Industries\u201410 ships are under construction at its Pascagoula, Mississippi, yard, but it is under capacity, said Brian Cuccias, the company's president.", "The shipbuilder is currently constructing five guided-missile destroyers, the latest San Antonio-class amphibious transport dock ship, and two national security cutters for the Coast Guard.", "\"Ingalls is a very successful production line right now, but it has the ability to actually produce a lot more in the future,\" he said during a briefing with reporters in January.", "The company's facility is currently operating at 75 percent capacity, he noted....", "Austal USA\u2014the builder of the Independence-variant of the littoral combat ship and the expeditionary fast transport vessel\u2014is also ready to increase its capacity should the Navy require it, said Craig Perciavalle, the company's president.", "The latest discussions are \"certainly something that a shipbuilder wants to hear,\" he said. \"We do have the capability of increasing throughput if the need and demand were to arise, and then we also have the ability with the present workforce and facility to meet a different mix that could arise as well.\"", "Austal could build fewer expeditionary fast transport vessels and more littoral combat ships, or vice versa, he added.", "\"The key thing for us is to keep the manufacturing lines hot and really leverage the momentum that we've gained on both of the programs,\" he said.", "The company\u2014which has a 164-acre yard in Mobile, Alabama\u2014is focused on the extension of the LCS and expeditionary fast transport ship program, but Perciavalle noted that it could look into manufacturing other types of vessels.", "\"We do have excess capacity to even build smaller vessels \u2026 if that opportunity were to arise and we're pursuing that,\" he said.", "Bryan Clark, a naval analyst at the Center for Strategic and Budgetary Assessments, a Washington, D.C.-based think tank, said shipbuilders are on average running between 70 and 80 percent capacity. While they may be ready to meet an increased demand for ships, it would take time to ramp up their workforces.", "However, the bigger challenge is the supplier industrial base, he said.", "\"Shipyards may be able to build ships but the supplier base that builds the pumps \u2026 and the radars and the radios and all those other things, they don't necessarily have that ability to ramp up,\" he said. \"You would need to put some money into building up their capacity.\"", "That has to happen now, he added.", "Rear Adm. William Gallinis, program manager for program executive office ships, said what the Navy must be \"mindful of is probably our vendor base that support the shipyards.\"", "Smaller companies that supply power electronics and switchboards could be challenged, he said.", "\"Do we need to re-sequence some of the funding to provide some of the facility improvements for some of the vendors that may be challenged? My sense is that the industrial base will size to the demand signal. We just need to be mindful of how we transition to that increased demand signal,\" he said.", "The acquisition workforce may also see an increased amount of stress, Gallinis noted. \"It takes a fair amount of experience and training to get a good contracting officer to the point to be [able to] manage contracts or procure contracts.\"", "\"But I don't see anything that is insurmountable,\" he added.", "At a May 24, 2017, hearing before the Seapower subcommittee of the Senate Armed Services Committee on the industrial-base aspects of the Navy's 355-ship goal, John P. Casey, executive vice president\u2013marine systems, General Dynamics Corporation (one of the country's two principal builders of Navy ships) stated the following:", "It is our belief that the Nation's shipbuilding industrial base can scale-up hot production lines for existing ships and mobilize additional resources to accomplish the significant challenge of achieving the 355-ship Navy as quickly as possible....", "Supporting a plan to achieve a 355-ship Navy will be the most challenging for the nuclear submarine enterprise. Much of the shipyard and industrial base capacity was eliminated following the steep drop-off in submarine production that occurred with the cancellation of the Seawolf Program in 1992. The entire submarine industrial base at all levels of the supply chain will likely need to recapitalize some portion of its facilities, workforce, and supply chain just to support the current plan to build the Columbia Class SSBN program, while concurrently building Virginia Class SSNs. Additional SSN procurement will require industry to expand its plans and associated investment beyond the level today....", "Shipyard labor resources include the skilled trades needed to fabricate, build and outfit major modules, perform assembly, test and launch of submarines, and associated support organizations that include planning, material procurement, inspection, quality assurance, and ship certification. Since there is no commercial equivalency for Naval nuclear submarine shipbuilding, these trade resources cannot be easily acquired in large numbers from other industries. Rather, these shipyard resources must be acquired and developed over time to ensure the unique knowledge and know-how associated with nuclear submarine shipbuilding is passed on to the next generation of shipbuilders. The mechanisms of knowledge transfer require sufficient lead time to create the proficient, skilled craftsmen in each key trade including welding, electrical, machining, shipfitting, pipe welding, painting, and carpentry, which are among the largest trades that would need to grow to support increased demand. These trades will need to be hired in the numbers required to support the increased workload. Both shipyards have scalable processes in place to acquire, train, and develop the skilled workforce they need to build nuclear ships. These processes and associated training facilities need to be expanded to support the increased demand. As with the shipyards, the same limiting factors associated with facilities, workforce, and supply chain also limit the submarine unique first tier suppliers and sub-tiers in the industrial base for which there is no commercial equivalency....", "The supply base is the third resource that will need to be expanded to meet the increased demand over the next 20 years. During the OHIO, 688 and SEAWOLF construction programs, there were over 17,000 suppliers supporting submarine construction programs. That resource base was \"rationalized\" during submarine low rate production over the last 20 years. The current submarine industrial base reflects about 5,000 suppliers, of which about 3,000 are currently active (i.e., orders placed within the last 5 years), 80% of which are single or sole source (based on $). It will take roughly 20 years to build the 12 Columbia Class submarines that starts construction in FY21. The shipyards are expanding strategic sourcing of appropriate non-core products (e.g., decks, tanks, etc.) in order to focus on core work at each shipyard facility (e.g., module outfitting and assembly). Strategic sourcing will move demand into the supply base where capacity may exist or where it can be developed more easily. This approach could offer the potential for cost savings by competition or shifting work to lower cost work centers throughout the country. Each shipyard has a process to assess their current supply base capacity and capability and to determine where it would be most advantageous to perform work in the supply base....", "Achieving the increased rate of production and reducing the cost of submarines will require the Shipbuilders to rely on the supply base for more non-core products such as structural fabrication, sheet metal, machining, electrical, and standard parts. The supply base must be made ready to execute work with submarine-specific requirements at a rate and volume that they are not currently prepared to perform. Preparing the supply base to execute increased demand requires early non-recurring funding to support cross-program construction readiness and EOQ funding to procure material in a manner that does not hold up existing ship construction schedules should problems arise in supplier qualification programs. This requires longer lead times (estimates of three years to create a new qualified, critical supplier) than the current funding profile supports....", "We need to rely on market principles to allow suppliers, the shipyards and GFE material providers to sort through the complicated demand equation across the multiple ship programs. Supplier development funding previously mentioned would support non-recurring efforts which are needed to place increased orders for material in multiple market spaces. Examples would include valves, build-to-print fabrication work, commodities, specialty material, engineering components, etc. We are engaging our marine industry associations to help foster innovative approaches that could reduce costs and gain efficiency for this increased volume....", "Supporting the 355-ship Navy will require Industry to add capability and capacity across the entire Navy Shipbuilding value chain. Industry will need to make investment decisions for additional capital spend starting now in order to meet a step change in demand that would begin in FY19 or FY20. For the submarine enterprise, the step change was already envisioned and investment plans that embraced a growth trajectory were already being formulated. Increasing demand by adding additional submarines will require scaling facility and workforce development plans to operate at a higher rate of production. The nuclear shipyards would also look to increase material procurement proportionally to the increased demand. In some cases, the shipyard facilities may be constrained with existing capacity and may look to source additional work in the supply base where capacity exists or where there are competitive business advantages to be realized. Creating additional capacity in the supply base will require non-recurring investment in supplier qualification, facilities, capital equipment and workforce training and development.", "Industry is more likely to increase investment in new capability and capacity if there is certainty that the Navy will proceed with a stable shipbuilding plan. Positive signals of commitment from the Government must go beyond a published 30-year Navy Shipbuilding Plan and line items in the Future Years Defense Plan (FYDP) and should include:", "Multi-year contracting for Block procurement which provides stability in the industrial base and encourages investment in facilities and workforce development Funding for supplier development to support training, qualification, and facilitization efforts\u2014Electric Boat and Newport News have recommended to the Navy funding of $400M over a three-year period starting in 2018 to support supplier development for the Submarine Industrial Base as part of an Integrated Enterprise Plan Extended Enterprise initiative Acceleration of Advance Procurement and/or Economic Order Quantities (EOQ) procurement from FY19 to FY18 for Virginia Block V Government incentives for construction readiness and facilities / special tooling for shipyard and supplier facilities, which help cash flow capital investment ahead of construction contract awards Procurement of additional production back-up (PBU) material to help ensure a ready supply of material to mitigate construction schedule risk....", "So far, this testimony has focused on the Submarine Industrial Base, but the General Dynamics Marine Systems portfolio also includes surface ship construction. Unlike Electric Boat, Bath Iron Works and NASSCO are able to support increased demand without a significant increase in resources.....", "Bath Iron Works is well positioned to support the Administration's announced goal of increasing the size of the Navy fleet to 355 ships. For BIW that would mean increasing the total current procurement rate of two DDG 51s per year to as many as four DDGs per year, allocated equally between BIW and HII. This is the same rate that the surface combatant industrial base sustained over the first decade of full rate production of the DDG 51 Class (1989-1999)....", "No significant capital investment in new facilities is required to accommodate delivering two DDGs per year. However, additional funding will be required to train future shipbuilders and maintain equipment. Current hiring and training processes support the projected need, and have proven to be successful in the recent past. BIW has invested significantly in its training programs since 2014 with the restart of the DDG 51 program and given these investments and the current market in Maine, there is little concern of meeting the increase in resources required under the projected plans.", "A predictable and sustainable Navy workload is essential to justify expanding hiring/training programs. BIW would need the Navy's commitment that the Navy's plan will not change before it would proceed with additional hiring and training to support increased production.", "BIW's supply chain is prepared to support a procurement rate increase of up to four DDG 51s per year for the DDG 51 Program. BIW has long-term purchasing agreements in place for all major equipment and material for the DDG 51 Program. These agreements provide for material lead time and pricing, and are not constrained by the number of ships ordered in a year. BIW confirmed with all of its critical suppliers that they can support this increased procurement rate....", "The Navy's Force Structure Assessment calls for three additional ESBs. Additionally, NASSCO has been asked by the Navy and the Congressional Budget Office (CBO) to evaluate its ability to increase the production rate of T-AOs to two ships per year. NASSCO has the capacity to build three more ESBs at a rate of one ship per year while building two T-AOs per year. The most cost effective funding profile requires funding ESB 6 in FY18 and the following ships in subsequent fiscal years to avoid increased cost resulting from a break in the production line. The most cost effective funding profile to enable a production rate of two T-AO ships per year requires funding an additional long lead time equipment set beginning in FY19 and an additional ship each year beginning in FY20.", "NASSCO must now reduce its employment levels due to completion of a series of commercial programs which resulted in the delivery of six ships in 2016. The proposed increase in Navy shipbuilding stabilizes NASSCO's workload and workforce to levels that were readily demonstrated over the last several years.", "Some moderate investment in the NASSCO shipyard will be needed to reach this level of production. The recent CBO report on the costs of building a 355-ship Navy accurately summarized NASSCO's ability to reach the above production rate stating, \"building more \u2026 combat logistics and support ships would be the least problematic for the shipyards.\"", "At the same hearing, Brian Cuccias, president, Ingalls Shipbuilding, Huntington Ingalls Industries (the country's other principal builder of Navy ships) stated the following:", "Qualifying to be a supplier is a difficult process. Depending on the commodity, it may take up to 36 months. That is a big burden on some of these small businesses. This is why creating sufficient volume and exercising early contractual authorization and advance procurement funding is necessary to grow the supplier base, and not just for traditional long-lead time components; that effort needs to expand to critical components and commodities that today are controlling the build rate of submarines and carriers alike. Many of our suppliers are small businesses and can only make decisions to invest in people, plant and tooling when they are awarded a purchase order. We need to consider how we can make commitments to suppliers early enough to ensure material readiness and availability when construction schedules demand it.", "With questions about the industry's ability to support an increase in shipbuilding, both Newport News and Ingalls have undertaken an extensive inventory of our suppliers and assessed their ability to ramp up their capacity. We have engaged many of our key suppliers to assess their ability to respond to an increase in production.", "The fortunes of related industries also impact our suppliers, and an increase in demand from the oil and gas industry may stretch our supply base. Although some low to moderate risk remains, I am convinced that our suppliers will be able to meet the forecasted Navy demand....", "I strongly believe that the fastest results can come from leveraging successful platforms on current hot production lines. We commend the Navy's decision in 2014 to use the existing LPD 17 hull form for the LX(R), which will replace the LSD-class amphibious dock landing ships scheduled to retire in the coming years. However, we also recommend that the concept of commonality be taken even further to best optimize efficiency, affordability and capability. Specifically, rather than continuing with a new design for LX(R) within the \"walls\" of the LPD hull, we can leverage our hot production line and supply chain and offer the Navy a variant of the existing LPD design that satisfies the aggressive cost targets of the LX(R) program while delivering more capability and survivability to the fleet at a significantly faster pace than the current program. As much as 10-15 percent material savings can be realized across the LX(R) program by purchasing respective blocks of at least five ships each under a multi-year procurement (MYP) approach. In the aggregate, continuing production with LPD 30 in FY18, coupled with successive MYP contracts for the balance of ships, may yield savings greater than $1 billion across an 11-ship LX(R) program. Additionally, we can deliver five LX(R)s to the Navy and Marine Corps in the same timeframe that the current plan would deliver two, helping to reduce the shortfall in amphibious warships against the stated force requirement of 38 ships.", "Multi-ship procurements, whether a formal MYP or a block-buy, are a proven way to reduce the price of ships. The Navy took advantage of these tools on both Virginia-class submarines and Arleigh Burke-class destroyers. In addition to the LX(R) program mentioned above, expanding multi-ship procurements to other ship classes makes sense....", "The most efficient approach to lower the cost of the Ford class and meet the goal of an increased CVN fleet size is also to employ a multi-ship procurement strategy and construct these ships at three-year intervals. This approach would maximize the material procurement savings benefit through economic order quantities procurement and provide labor efficiencies to enable rapid acquisition of a 12-ship CVN fleet. This three-ship approach would save at least $1.5 billion, not including additional savings that could be achieved from government-furnished equipment. As part of its Integrated Enterprise Plan, we commend the Navy's efforts to explore the prospect of material economic order quantity purchasing across carrier and submarine programs.", "At the same hearing, Matthew O. Paxton, president, Shipbuilders Council of America (SCA)\u2014a trade association representing shipbuilders, suppliers, and associated firms\u2014stated the following:", "To increase the Navy's Fleet to 355 ships, a substantial and sustained investment is required in both procurement and readiness. However, let me be clear: building and sustaining the larger required Fleet is achievable and our industry stands ready to help achieve that important national security objective.", "To meet the demand for increased vessel construction while sustaining the vessels we currently have will require U.S. shipyards to expand their work forces and improve their infrastructure in varying degrees depending on ship type and ship mix \u2013 a requirement our Nation's shipyards are eager to meet. But first, in order to build these ships in as timely and affordable manner as possible, stable and robust funding is necessary to sustain those industrial capabilities which support Navy shipbuilding and ship maintenance and modernization....", "Beyond providing for the building of a 355-ship Navy, there must also be provision to fund the \"tail,\" the maintenance of the current and new ships entering the fleet. Target fleet size cannot be reached if existing ships are not maintained to their full service lives, while building those new ships. Maintenance has been deferred in the last few years because of across-the-board budget cuts....", "The domestic shipyard industry certainly has the capability and know-how to build and maintain a 355-ship Navy. The Maritime Administration determined in a recent study on the Economic Benefits of the U.S. Shipyard Industry that there are nearly 110,000 skilled men and women in the Nation's private shipyards building, repairing and maintaining America's military and commercial fleets.1 The report found the U.S. shipbuilding industry supports nearly 400,000 jobs across the country and generates $25.1 billion in income and $37.3 billion worth of goods and services each year. In fact, the MARAD report found that the shipyard industry creates direct and induced employment in every State and Congressional District and each job in the private shipbuilding and repairing industry supports another 2.6 jobs nationally.", "This data confirms the significant economic impact of this manufacturing sector, but also that the skilled workforce and industrial base exists domestically to build these ships. Long-term, there needs to be a workforce expansion and some shipyards will need to reconfigure or expand production lines. This can and will be done as required to meet the need if adequate, stable budgets and procurement plans are established and sustained for the long-term. Funding predictability and sustainability will allow industry to invest in facilities and more effectively grow its skilled workforce. The development of that critical workforce will take time and a concerted effort in a partnership between industry and the federal government.", "U.S. shipyards pride themselves on implementing state of the art training and apprenticeship programs to develop skilled men and women that can cut, weld, and bend steel and aluminum and who can design, build and maintain the best Navy in the world. However, the shipbuilding industry, like so many other manufacturing sectors, faces an aging workforce. Attracting and retaining the next generation shipyard worker for an industry career is critical. Working together with the Navy, and local and state resources, our association is committed to building a robust training and development pipeline for skilled shipyard workers. In addition to repealing sequestration and stabilizing funding the continued development of a skilled workforce also needs to be included in our national maritime strategy....", "In conclusion, the U.S. shipyard industry is certainly up to the task of building a 355-ship Navy and has the expertise, the capability, the critical capacity and the unmatched skilled workforce to build these national assets. Meeting the Navy's goal of a 355-ship fleet and securing America's naval dominance for the decades ahead will require sustained investment by Congress and Navy's partnership with a defense industrial base that can further attract and retain a highly-skilled workforce with critical skill sets. Again, I would like to thank this Subcommittee for inviting me to testify alongside such distinguished witnesses. As a representative of our nation's private shipyards, I can say, with confidence and certainty, that our domestic shipyards and skilled workers are ready, willing and able to build and maintain the Navy's 355-ship Fleet.", "Employment Impact", "Building the additional ships that would be needed to achieve and maintain the 355-ship fleet could create many additional manufacturing and other jobs at shipyards, associated supplier firms, and elsewhere in the U.S. economy. A 2015 Maritime Administration (MARAD) report states,", "Considering the indirect and induced impacts, each direct job in the shipbuilding and repairing industry is associated with another 2.6 jobs in other parts of the US economy; each dollar of direct labor income and GDP in the shipbuilding and repairing industry is associated with another $1.74 in labor income and $2.49 in GDP, respectively, in other parts of the US economy.", "A March 2017 press report states, \"Based on a 2015 economic impact study, the Shipbuilders Council of America [a trade association for U.S. shipbuilders and associated supplier firms] believes that a 355-ship Navy could add more than 50,000 jobs nationwide.\" The 2015 economic impact study referred to in that quote might be the 2015 MARAD study discussed in the previous paragraph. An estimate of more than 50,000 additional jobs nationwide might be viewed as a higher-end estimate; other estimates might be lower. A June 14, 2017, press report states the following: \"The shipbuilding industry will need to add between 18,000 and 25,000 jobs to build to a 350-ship Navy, according to Matthew Paxton, president of the Shipbuilders Council of America, a trade association representing the shipbuilding industrial base. Including indirect jobs like suppliers, the ramp-up may require a boost of 50,000 workers.\"", "Appendix E. A Summary of Some Acquisition Lessons Learned for Navy Shipbuilding", "This appendix presents a general summary of lessons learned in Navy shipbuilding, reflecting comments made repeatedly by various sources over the years. These lessons learned include the following:", "At the outset, get the operational requirements for the program right. Properly identify the program's operational requirements at the outset. Manage risk by not trying to do too much in terms of the program's operational requirements, and perhaps seek a so-called 70%-to-80% solution (i.e., a design that is intended to provide 70%-80% of desired or ideal capabilities). Achieve a realistic balance up front between operational requirements, risks, and estimated costs. Impose cost discipline up front. Use realistic price estimates, and consider not only development and procurement costs, but life-cycle operation and support (O&S) costs. Employ competition where possible in the awarding of design and construction contracts. Use a contract type that is appropriate for the amount of risk involved , and structure its terms to align incentives with desired outcomes. Minimize design/construction concurrency by developing the design to a high level of completion before starting construction and by resisting changes in requirements (and consequent design changes) during construction. Properly supervise construction work. Maintain an adequate number of properly trained Supervisor of Shipbuilding (SUPSHIP) personnel. Provide stability for industry , in part by using, where possible, multiyear procurement (MYP) or block buy contracting. Maintain a capable government acquisition workforce that understands what it is buying, as well as the above points.", "Identifying these lessons is arguably not the hard part\u2014most if not all these points have been cited for years. The hard part, arguably, is living up to them without letting circumstances lead program-execution efforts away from these guidelines.", "Appendix F. Some Considerations Relating to Warranties in Shipbuilding and Other Defense Acquisition", "This appendix presents some considerations relating to warranties in shipbuilding and other defense acquisition.", "In discussions of Navy (and also Coast Guard) shipbuilding, one question that sometimes arises is whether including a warranty in a shipbuilding contract is preferable to not including one. The question can arise, for example, in connection with a GAO finding that \"the Navy structures shipbuilding contracts so that it pays shipbuilders to build ships as part of the construction process and then pays the same shipbuilders a second time to repair the ship when construction defects are discovered.\"", "Including a warranty in a shipbuilding contract (or a contract for building some other kind of defense end item), while potentially valuable, might not always be preferable to not including one\u2014it depends on the circumstances of the acquisition, and it is not necessarily a valid criticism of an acquisition program to state that it is using a contract that does not include a warranty (or a weaker form of a warranty rather than a stronger one).", "Including a warranty generally shifts to the contractor the risk of having to pay for fixing problems with earlier work. Although that in itself could be deemed desirable from the government's standpoint, a contractor negotiating a contract that will have a warranty will incorporate that risk into its price, and depending on how much the contractor might charge for doing that, it is possible that the government could wind up paying more in total for acquiring the item (including fixing problems with earlier work on that item) than it would have under a contract without a warranty.", "When a warranty is not included in the contract and the government pays later on to fix problems with earlier work, those payments can be very visible, which can invite critical comments from observers. But that does not mean that including a warranty in the contract somehow frees the government from paying to fix problems with earlier work. In a contract that includes a warranty, the government will indeed pay something to fix problems with earlier work\u2014but it will make the payment in the less-visible (but still very real) form of the up-front charge for including the warranty, and that charge might be more than what it would have cost the government, under a contract without a warranty, to pay later on for fixing those problems.", "From a cost standpoint, including a warranty in the contract might or might not be preferable, depending on the risk that there will be problems with earlier work that need fixing, the potential cost of fixing such problems, and the cost of including the warranty in the contract. The point is that the goal of avoiding highly visible payments for fixing problems with earlier work and the goal of minimizing the cost to the government of fixing problems with earlier work are separate and different goals, and that pursuing the first goal can sometimes work against achieving the second goal.", "The Department of Defense's guide on the use of warranties states the following:", "Federal Acquisition Regulation (FAR) 46.7 states that \"the use of warranties is not mandatory.\" However, if the benefits to be derived from the warranty are commensurate with the cost of the warranty, the CO [contracting officer] should consider placing it in the contract. In determining whether a warranty is appropriate for a specific acquisition, FAR Subpart 46.703 requires the CO to consider the nature and use of the supplies and services, the cost, the administration and enforcement, trade practices, and reduced requirements. The rationale for using a warranty should be documented in the contract file....", "In determining the value of a warranty, a CBA [cost-benefit analysis] is used to measure the life cycle costs of the system with and without the warranty. A CBA is required to determine if the warranty will be cost beneficial. CBA is an economic analysis, which basically compares the Life Cycle Costs (LCC) of the system with and without the warranty to determine if warranty coverage will improve the LCCs. In general, five key factors will drive the results of the CBA: cost of the warranty + cost of warranty administration + compatibility with total program efforts + cost of overlap with Contractor support + intangible savings. Effective warranties integrate reliability, maintainability, supportability, availability, and life-cycle costs. Decision factors that must be evaluated include the state of the weapon system technology, the size of the warranted population, the likelihood that field performance requirements can be achieved, and the warranty period of performance.", "Appendix G. Some Considerations Relating to Avoiding Procurement Cost Growth vs. Minimizing Procurement Costs", "This appendix presents some considerations relating to avoiding procurement cost growth vs. minimizing procurement costs in shipbuilding and other defense acquisition.", "The affordability challenge posed by the Navy's shipbuilding plans can reinforce the strong oversight focus on preventing or minimizing procurement cost growth in Navy shipbuilding programs, which is one expression of a strong oversight focus on preventing or minimizing cost growth in DOD acquisition programs in general. This oversight focus may reflect in part an assumption that avoiding or minimizing procurement cost growth is always synonymous with minimizing procurement cost. It is important to note, however, that as paradoxical as it may seem, avoiding or minimizing procurement cost growth is not always synonymous with minimizing procurement cost, and that a sustained, singular focus on avoiding or minimizing procurement cost growth might sometimes lead to higher procurement costs for the government.", "How could this be? Consider the example of a design for the lead ship of a new class of Navy ships. The construction cost of this new design is uncertain, but is estimated to be likely somewhere between Point A (a minimum possible figure) and Point D (a maximum possible figure). (Point D, in other words, would represent a cost estimate with a 100% confidence factor, meaning there is a 100% chance that the cost would come in at or below that level.) If the Navy wanted to avoid cost growth on this ship, it could simply set the ship's procurement cost at Point D. Industry would likely be happy with this arrangement, and there likely would be no cost growth on the ship.", "The alternative strategy open to the Navy is to set the ship's target procurement cost at some figure between Points A and D\u2014call it Point B\u2014and then use that more challenging target cost to place pressure on industry to sharpen its pencils so as to find ways to produce the ship at that lower cost. (Navy officials sometimes refer to this as \"pressurizing\" industry.) In this example, it might turn out that industry efforts to reduce production costs are not successful enough to build the ship at the Point B cost. As a result, the ship experiences one or more rounds of procurement cost growth, and the ship's procurement cost rises over time from Point B to some higher figure\u2014call it Point C.", "Here is the rub: Point C, in spite of incorporating one or more rounds of cost growth, might nevertheless turn out to be lower than Point D, because Point C reflected efforts by the shipbuilder to find ways to reduce production costs that the shipbuilder might have put less energy into pursuing if the Navy had simply set the ship's procurement cost initially at Point D.", "Setting the ship's cost at Point D, in other words, may eliminate the risk of cost growth on the ship, but does so at the expense of creating a risk of the government paying more for the ship than was actually necessary. DOD could avoid cost growth on new procurement programs starting tomorrow by simply setting costs for those programs at each program's equivalent of Point D. But as a result of this strategy, DOD could well wind up leaving money on the table in some instances\u2014of not, in other words, minimizing procurement costs.", "DOD does not have to set a cost precisely at Point D to create a potential risk in this regard. A risk of leaving money on the table, for example, is a possible downside of requiring DOD to budget for its acquisition programs at something like an 80% confidence factor\u2014an approach that some observers have recommended\u2014because a cost at the 80% confidence factor is a cost that is likely fairly close to Point D.", "Procurement cost growth is often embarrassing for DOD and industry, and can damage their credibility in connection with future procurement efforts. Procurement cost growth can also disrupt congressional budgeting by requiring additional appropriations to pay for something Congress thought it had fully funded in a prior year. For this reason, there is a legitimate public policy value to pursuing a goal of having less rather than more procurement cost growth.", "Procurement cost growth, however, can sometimes be in part the result of DOD efforts to use lower initial cost targets as a means of pressuring industry to reduce production costs\u2014efforts that, notwithstanding the cost growth, might be partially successful. A sustained, singular focus on avoiding or minimizing cost growth, and of punishing DOD for all instances of cost growth, could discourage DOD from using lower initial cost targets as a means of pressurizing industry, which could deprive DOD of a tool for controlling procurement costs.", "The point here is not to excuse away cost growth, because cost growth can occur in a program for reasons other than DOD's attempt to pressurize industry. Nor is the point to abandon the goal of seeking lower rather than higher procurement cost growth, because, as noted above, there is a legitimate public policy value in pursuing this goal. The point, rather, is to recognize that this goal is not always synonymous with minimizing procurement cost, and that a possibility of some amount of cost growth might be expected as part of an optimal government strategy for minimizing procurement cost. Recognizing that the goals of seeking lower rather than higher cost growth and of minimizing procurement cost can sometimes be in tension with one another can lead to an approach that takes both goals into consideration. In contrast, an approach that is instead characterized by a sustained, singular focus on avoiding and minimizing cost growth may appear virtuous, but in the end may wind up costing the government more.", "Appendix H. Size of the Navy and Navy Shipbuilding Rate", "Size of the Navy", " Table H-1 shows the size of the Navy in terms of total number of ships since FY1948; the numbers shown in the table reflect changes over time in the rules specifying which ships count toward the total. Differing counting rules result in differing totals, and for certain years, figures reflecting more than one set of counting rules are available. Figures in the table for FY1978 and subsequent years reflect the battle force ships counting method, which is the set of counting rules established in the early 1980s for public policy discussions of the size of the Navy.", "As shown in the table, the total number of battle force ships in the Navy reached a late-Cold War peak of 568 at the end of FY1987 and began declining thereafter. The Navy fell below 300 battle force ships in August 2003 and as of April 26, 2019, included 289 battle force ships.", "As discussed in Appendix C , historical figures for total fleet size might not be a reliable yardstick for assessing the appropriateness of proposals for the future size and structure of the Navy, particularly if the historical figures are more than a few years old, because the missions to be performed by the Navy, the mix of ships that make up the Navy, and the technologies that are available to Navy ships for performing missions all change over time, and because the number of ships in the fleet in an earlier year might itself have been inappropriate (i.e., not enough or more than enough) for meeting the Navy's mission requirements in that year.", "For similar reasons, trends over time in the total number of ships in the Navy are not necessarily a reliable indicator of the direction of change in the fleet's ability to perform its stated missions. An increasing number of ships in the fleet might not necessarily mean that the fleet's ability to perform its stated missions is increasing, because the fleet's mission requirements might be increasing more rapidly than ship numbers and average ship capability. Similarly, a decreasing number of ships in the fleet might not necessarily mean that the fleet's ability to perform stated missions is decreasing, because the fleet's mission requirements might be declining more rapidly than numbers of ships, or because average ship capability and the percentage of time that ships are in deployed locations might be increasing quickly enough to more than offset reductions in total ship numbers.", "Shipbuilding Rate", " Table H-2 shows past (FY1982-FY2019) and requested or programmed (FY2020-FY2024) rates of Navy ship procurement."], "subsections": []}]}]}}
{"id": "R41705", "title": "The National Institutes of Health (NIH): Background and Congressional Issues", "released_date": "2019-04-19T00:00:00", "summary": ["The National Institutes of Health (NIH), under the Department of Health and Human Services (HHS), is the primary federal agency charged with performing and supporting biomedical and behavioral research. In FY2018, NIH used its over $34 billion budget to support more than 300,000 scientists and research personnel working at over 2,500 institutions across the United States and abroad, as well as to conduct biomedical and behavioral research and research training at its own facilities. The agency consists of the Office of the Director, in charge of overall policy and program coordination, and 27 institutes and centers, each of which focuses on particular diseases or research areas in human health. A broad range of research is funded through a highly competitive system of peer-reviewed grants and contracts.", "The Public Health Service Act (PHSA) provides the statutory basis for NIH programs, and funding levels are mostly provided through the annual appropriations process. In December 2016, Congress introduced major reforms and programs at the NIH through the 21st Century Cures Act (P.L. 114-255). Prior to 2016, the last time Congress addressed NIH with comprehensive legislation was in December 2006, when it passed the NIH Reform Act (P.L. 109-482). Congress also gives direction to NIH through appropriations report language, but usually not through budget line items or earmarks. Historically, Congress has accepted, for the most part, the scientific and public health priorities established by the agency through its planning and grant-making activities that involve members of the scientific community and the general public.", "NIH has seen periods of both low and high funding growth. From FY1998 to FY2003, Congress doubled the NIH budget from $13.7 billion to $27.1 billion. The agency then saw low funding growth or cuts from FY2004 to FY2015. Starting in FY2016, Congress provided NIH with funding increases of over 5% each year, raising the program level from $30.3 billion in FY2015 to $39.3 billion in FY2019. Under President Trump's budget request for FY2020, NIH would be provided a program level of $34.3 billion\u2014a 12.6% reduction from the FY2019 program level.", "NIH officials and scientific observers have cited funding variability and uncertainty as a challenge for the agency. Along with funding uncertainty, other challenges facing the agency and the research enterprise include", "allocating funding across disease types, areas of human health, and types of research; addressing congressional priorities and concerns, while ensuring the scientific merit and quality of NIH-funded research; helping new and early-stage scientists obtain their first independent research grants; balancing the public and private sectors' relative roles in biomedical research.", "NIH is the largest single public funder of biomedical research in the world, yet other countries\u2014particularly China\u2014have increased their funding levels for such research. Some Members of Congress have voiced concern about the position of U.S. biomedical research compared with other countries. A January 2015 study found that the total U.S. (public and private) share of global biomedical research funding declined from 57% in 2004 to 44% in 2011, while countries in Asia increased investment into biomedical research from $28 billion (2004) to $52.4 billion (2011), with especially large increases in China (analysis included Japan, China, India, Singapore and South Korea). Globally, the United States continues to be the top supporter of both public and industry medical research."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The National Institutes of Health (NIH) is the primary agency of the federal government charged with performing and supporting biomedical and behavioral research. It has major roles in training biomedical researchers and disseminating health information. The NIH mission is \"to seek fundamental knowledge about the nature and behavior of living systems and the application of that knowledge to enhance health, lengthen life, and reduce illness and disability.\" As of FY2018, NIH was the largest single public funder of biomedical research in the world. Congress maintains a high level of interest in NIH for a variety of reasons. NIH funds extramural researchers in every state, and widespread constituencies contact Congress about funding for particular diseases and levels of research support in general. NIH is the largest and most visible contributor to the federal biomedical research effort; it represents about half of federal spending for non-Department of Defense research and development (R&D) and about one-fifth of total federal R&D funding. It has the largest budget of the eight health-related agencies that make up the Public Health Service (PHS) within the Department of Health and Human Services (HHS). In FY2018, discretionary appropriations to NIH constituted about 40% of all HHS discretionary budget authority. ", "NIH-funded research has contributed to major scientific advances. To date, 156 NIH-funded researchers have received Nobel Prizes for their work. NIH-funded research has led to major medical innovations such as treatments for heart disease, cancer, and HIV/AIDs. Such advances have been credited with helping increase life expectancy and prevent millions of deaths. However, in light of the high cost of new medical innovations, some question whether NIH priorities are too focused on research that leads to new treatments rather than on disease prevention or improving the value of medical care. The allocation of NIH research dollars is a major source of debate. ", "NIH has seen periods of both low and high funding growth. From FY1998 to FY2003, Congress doubled the NIH budget over a five-year period, from $13.7 billion to $27.1 billion. The agency then saw low funding growth or cuts from FY2004 to FY2015. From FY2016 through FY2019, Congress provided NIH with funding increases of over 5% each year, increasing funding from $30.3 billion in FY2015 to $39.3 billion in FY2019. Under President Trump's budget request for FY2020, NIH would be provided a program level of $34.3 billion\u2014a 12.6% reduction from the FY2019 program level.", "Some members of the scientific community have cited funding variability and uncertainty as a hindrance for advancing biomedical research. They have called for steady and predictable funding growth to support the multiyear nature of research. Others have questioned whether universities and other research institutions are too reliant on NIH funding and if institutions should diversify their funding sources or use institutional funds to pay for research.", "Aside from funding, other potential issues of for many in Congress and the research community may include", "allocating funding across disease types, areas of human health, and types of research; addressing congressional priorities and concerns, while ensuring the scientific merit and quality of NIH-funded research; helping new and early-stage investigators obtain their first independent research grants; maintaining the United States' role as a leader in biomedical research; balancing the public and private sectors' relative roles in biomedical research.", "This report provides background and analysis on NIH organization, mission, budget, and history; outlines the agency's major responsibilities; and discusses some of the issues facing Congress as it works to guide and monitor the nation's investment in medical research."], "subsections": []}, {"section_title": "Background on NIH", "paragraphs": [], "subsections": [{"section_title": "History", "paragraphs": ["NIH traces its roots to 1887, when a one-room Laboratory of Hygiene was established at the Marine Hospital in Staten Island, NY. Relocated to Washington, DC, in 1891, and renamed the Hygienic Laboratory, it operated for its first half century as an intramural research lab for the Public Health Service. Congress designated the research laboratory the National Institute of Health in 1930 (P.L. 71-251). It moved to donated land in the Maryland suburbs in 1938. By 1948, several new institutes and divisions had been created, and the agency became the National Institutes of Health (P.L. 80-655). Congress has continued to create new institutes and centers, most recently in 2011 with the establishment of the National Center for Advancing Translational Sciences (NCATS, P.L. 112-74 ; see Table 2 ). NIH now occupies a 322-acre main campus in Bethesda, MD, and several off-campus sites, including locations in Maryland, North Carolina, Montana, Arizona."], "subsections": []}, {"section_title": "Organizational Structure", "paragraphs": ["Today, NIH is a large and complex organization. NIH consists of the Office of the Director and 27 components\u201420 research institutes, three research centers, the National Library of Medicine (NLM), and three other support centers: the Clinical Center, the Center for Information Technology, and the Center for Scientific Review (for details, see Table 2 ).", "The Office of the Director (OD) sets overall policy for NIH and coordinates the programs and activities of all NIH components, particularly transinstitute research initiatives and issues. The individual institutes and centers (ICs) may focus on particular diseases (i.e., The National Cancer Institute), areas of human health and development (i.e., The National Institute on Aging), scientific fields (i.e., National Institute of Environmental Health Sciences), or biomedical professions and technology (i.e., National Institute of Biomedical Imaging and Bioengineering). Each IC plans and manages its own research programs in coordination with OD. Congress provides separate appropriations to 24 (all 20 institutes, NLM, and the 3 research centers) of the 27 ICs, to OD, and to a buildings and facilities account (see \" Budget \"). The institutes, NLM, and the three research centers have the authority to award research grants; the three operational support centers do not award research grants. Under President Trump's FY2020 budget request, the activities of the Agency for Healthcare Research and Quality (AHRQ) would be consolidated into NIH as the National Institute for Research on Safety and Quality (NIRSQ), forming a 28 th IC. The creation of a new NIH institute would require an amendment to the Public Health Service Act (PHSA) Section 401(d), which specifies that \"[i]n the National Institutes of Health, the number of national research institutes and national centers may not exceed a total of 27\" (see discussion in \" NIH Reform Act of 2006 \"). President Trump's FY2019 and FY2018 budget requests also proposed consolidating AHRQ and other HHS institutes into NIH; however, Congress did not adopt these proposals. ", "NIH's large and decentralized organizational structure has been an issue of concern. There are costs and complexities of administering an agency made of 27 ICs, each with its own mission, budget, staff, review office, and other organizational apparatus. The resulting fragmentation may create research duplication or gaps, and might adversely affect NIH's ability to respond appropriately to new scientific and public health challenges. A number of laws have addressed administration and priorities at NIH, including the NIH Reform Act of 2006 and the 21 st Century Cures Act."], "subsections": []}, {"section_title": "NIH Reform Act of 2006", "paragraphs": ["In 2003, Congress requested that the National Academy of Sciences (NAS, now called the National Academies of Sciences, Engineering, and Medicine) study the structure and organization of NIH. The NAS report was released in 2003: Enhancing the Vitality of the National Institutes of Health: Organizational Change to Meet New Challenges . The 2003 NAS report found that \"the most common mechanism of origin of the institutes has been the congressional mandate responding to the health advocacy community.\" The first institute was the National Cancer Institute (NCI) established in 1937. \"From the middle 1940s to 1974, health advocates were successful in persuading Congress to establish additional institutes, often against the wishes of administrations, which generally opposed creation of new categorical institutes.\" Health advocacy \"groups have continued the long established pattern of pushing for creation of named entities at NIH to create focal points for developing more research funding for particular diseases. That has often resulted in the establishment by Congress of a named program at the office level. Through continued pressure, offices may then be elevated to centers and, in some cases, to institute status.\" The 2003 NAS report noted challenges with NIH's large and decentralized organizational structure, but said that any proposals for changing the number of ICs or OD program offices should be subject to a public evaluation process. ", "Many of the recommendations in the 2003 NAS report were incorporated into the NIH Reform Act of 2006 ( P.L. 109-482 ). The law enhanced the authority of the NIH Director's Office to perform strategic planning, provided for trans-NIH initiatives by enacting the Common Fund into law and required strategic planning for the Fund. It established the Division of Program Coordination, Planning, and Strategic Initiatives (DPCPSI) within the Office of the Director and moved a number of individual program offices (coordinating research on AIDS, women's health, behavioral and social sciences, and disease prevention) in OD to DPCPSI. The law established the Council of Councils to advise the NIH Director on the policies and activities of DPCPSI and to participate in developing proposals for trans-NIH research. The law requires a biennial report from the Director to Congress assessing the state of biomedical research and reporting in detail on the research activities of NIH, including strategic planning and initiatives, and summaries of research in a number of broad areas. ", "The Reform Act required the creation of a comprehensive electronic reporting system to catalogue research activities in specific disease, health areas, or by other congressionally-mandated categories from all of the ICs in a standardized format. Information from the tracking system assists the Director and DPCPSI in planning trans-NIH research initiatives that cannot be handled within individual ICs. The reporting system, called Research Portfolio Online Reporting Tools (RePORT), \"provides access to reports, data, and analyses of NIH research activities, including information on NIH expenditures and the results of NIH-supported research.\"", "The Reform Act did not contain any provisions on specific diseases or fields of research, nor did it eliminate or consolidate any existing ICs. However, it did provide certain authorities to HHS and NIH officials for making organizational changes to NIH. It also created the Scientific Management Review Board (SMRB) to provide advice on the use of those organizational authorities. SMRB is charged with formally and publicly reviewing NIH organizational structure at least once every seven years. SMRB may recommend restructuring but the number of ICs is capped at the current 27. The law set out time frames for the Director to take action on such recommendations, and provided for review by Congress.", "As required by the Reform Act, SMRB has conducted public reviews of NIH's organizational structure and processes. In its first report on organizational change and effectiveness at the agency in 2010, SMRB \"recognized that a far reaching overhaul of the NIH structure is neither advisable nor feasible.\" Instead, SMRB proposed a framework for considering and evaluating potential organizational changes at NIH. Since the first report, SMRB has issued evaluations of specific research areas or ICs at NIH, with recommendations for organizational change. SMRB also issued a report in 2014 on assessing the value of biomedical research, and a report in 2015 on streamlining the NIH grant process. 21 st Century Cures Act\u2014Administrative Reforms", "The 21 st Century Cures Act (P.L. 114-255), enacted in 2016, introduced a number of administrative reforms at NIH. The act newly requires the NIH Director to develop and make publicly available an NIH-wide Strategic Plan every six years (the first to be developed within two years of enactment). The Strategic Plan is expected to provide direction to the biomedical investments made by NIH, facilitate IC collaboration, leverage scientific opportunity, and advance biomedicine (for more information about the 2016-20 NIH-Wide Strategic Plan, see \" NIH Process in Setting Research Priorities .\") The act also changed the biennial report of the NIH Director to Congress to a triennial requirement.", "Other reforms include efforts to reduce administrative burden at NIH, such as by exempting NIH researchers from requirements of the Paperwork Reduction Act. The act also introduced accountability measures such as five-year terms and other requirements for IC Directors, and efforts to prevent and eliminate duplicative research across the agency. The 21 st Century Cures Act also introduced a number of new programs and research efforts at NIH, as detailed in the \" 21st Century Cures Act \" section of this report."], "subsections": []}, {"section_title": "Authority", "paragraphs": ["NIH derives its statutory authority from the Public Health Service Act (PHSA) of 1944, as amended (42 U.S.C. \u00a7\u00a7201-300mm-61). Section 301 of the PHSA (42 U.S.C. \u00a7241) grants the Secretary of HHS broad permanent authority to conduct and sponsor research. In addition, Title IV, \"National Research Institutes\" (42 U.S.C. \u00a7\u00a7281-290b), authorizes in greater detail various activities, functions, and responsibilities of the NIH Director and the ICs. All of the ICs are covered by specific provisions in the PHSA, but they vary considerably in the amount of detail included in the statutory language. "], "subsections": [{"section_title": "Authorization of Appropriations", "paragraphs": ["In 2016, the 21 st Century Cures Act ( P.L. 114-255 ) amended the PHSA (Section 402A), authorizing appropriations for NIH in FY2018 ($34,851,000,000), FY2019 ($35,585,871,000), and FY2020 ($36,472,442,775) to carry out activities authorized in Title IV of the PHSA. ", "The previous major NIH reauthorization was the NIH Reform Act of 2006 ( P.L. 109-482 ). The NIH Reform Act authorized total funding levels for NIH appropriations for FY2007 through FY2009. Overall authority for NIH, or explicit authorization of individual ICs, has lapsed at times. However, NIH continued to receive annual appropriations, with authority provided by PHSA Section 301 and the annual appropriations acts. The current authorization of appropriations for NIH is set to expire at the end of FY2020. "], "subsections": []}]}]}, {"section_title": "NIH Research Activities", "paragraphs": ["NIH research spans all fields of biomedical and behavioral research, from basic investigation of biological mechanisms to testing new therapeutics in clinical research. The ICs sponsor two categories of research: extramural research , performed by nonfederal scientists using NIH grant or contract money, and intramural research , performed by federal NIH scientists in the NIH-operated laboratories and Clinical Center. In both the extramural and intramural programs, the research projects are largely investigator-initiated. NIH also supports a range of extramural and intramural research training programs to prepare young investigators for research careers, and it engages in a number of information dissemination activities to reach various audiences.", "Funding for research makes up most of NIH spending. Figure 1 shows the breakdown of NIH obligations by mechanism. Displaying budget data by mechanism reveals the balance between extramural (e.g., research grants, research centers, and R&D contracts) and intramural funding, as well as the relative emphasis on support of individual investigator-led research (e.g., research grants and intramural research) versus funding of contracted projects (e.g., R&D contracts)."], "subsections": [{"section_title": "Types of Research at the NIH", "paragraphs": ["According to NIH, the agency conducts and supports the \"full continuum\" of biomedical and behavioral research to understand the causes and mechanisms of disease, and then translates that knowledge into clinical practice and health interventions. NIH defines the continuum of research as follows (see Figure 1 ): ", "Basic research involves studying the fundamental mechanisms of biology and behavior. Preclinical translational research involves developing and testing new diagnostics, therapeutics, and preventive measures. This research is conducted using laboratory animals, cell cultures, samples of human or animal tissues, computer modeling, or other approaches. Clinical research is conducted with human subjects. Clinical research can include (1) clinical trials of diagnostics, therapeutics, and preventive measures, as well as any basic or other research conducted with patients; (2) epidemiological and behavioral studies; and (3) outcomes research and health services research. Postclinical translational research investigates the best methods to enhance access to and the implementation of newly discovered biomedical interventions. Clinical and community practice involves translating new biomedical research discoveries into widespread clinical and community practice. It includes NIH's effort to ensure that scientific findings are communicated rapidly and clearly to the public. ", "NIH reports that about half of its funding is for basic research. NIH emphasizes that the research continuum is not linear. Progress in research may involve moving back and forth between different stages. For instance, a failed clinical trial on a therapeutic for a given disease may lead to new questions that then require more basic research to make progress in treating that disease. "], "subsections": []}, {"section_title": "Extramural Research", "paragraphs": ["NIH extramural research funding makes up more than 80% of the overall NIH budget and supports 300,000 scientists and research personnel affiliated with over 2,500 universities, academic health centers, hospitals, and independent research institutions in every state and around the world. Extramural awards include research grants, research and development contracts, training awards, and a few smaller categories. Within the large \"research grants\" category, the bulk of the funding goes for research project grants (RPGs) awarded to individual investigators and small teams, mostly at universities and medical centers. Other types of grants are provided to groups of researchers who work in collaborative programs or in multidisciplinary centers that focus on particular diseases or areas of research, often called \"centers of excellence.\" Data on awards and recipients by state, by congressional district, by type of institution, and by subject of the research, are available on the NIH website. "], "subsections": [{"section_title": "Peer Review Process for Extramural Funding", "paragraphs": ["Scientists who wish to compete for NIH extramural research funding, whether for totally new proposals or for renewal of previous grant awards, submit detailed plans in their grant applications describing the research they plan to undertake. All NIH grant, fellowship, and cooperative agreement applications undergo review through a two-tiered system of peer review, a competitive and committee-based process to evaluate the applications. The peer review system is pursuant to Section 492 of PHSA (42 U.S.C. \u00a7289a), and federal regulations (42 C.F.R. \u00a752). The first stage of peer review assesses the application on scientific and technical merit. In the second stage, the NIH IC makes a funding decision\u2014weighing the project's scientific merit against the IC's research priorities (see Figure 3 ).", "Grant applications may be either investigator-initiated or in response to a specific Funding Opportunity Announcement for targeted research. Most applications are investigator-initiated, meaning that a scientist or group of scientists generates an original research project idea and then submits a grant application through an NIH-wide submission process. Some applications are submitted in response to solicitations by ICs for research areas the ICs wish to target and/or for which they have set aside funding, called program announcements (PAs) or requests for applications (RFAs), broadly referred to as Funding Opportunity Announcements (FOAs). ", "In the first stage of peer review, the applications are received by the NIH Center for Scientific Review (CSR). CSR then assigns each application that meets basic requirements to both a potential awarding IC and an associated Scientific Review Group (SRG) of the IC. The potential awarding IC is the one whose mission best aligns with the objectives of the research project. Applications responding to FOAs are usually reviewed by SRGs within the IC with funding authority, as specified in the FOA. ", "An SRG is a peer-review committee composed of 12 to 22 scientists who are experts in the relevant fields of research. No more than one-fourth of the members of any SRG may be federal employees. Peer reviewers are expected to disclose conflicts of interest and may not participate in evaluations of grant applications where they have conflicts of interest. In FY2018, over 26,000 individuals participated in over 2,600 NIH peer review meetings. ", "The SRG is responsible for evaluating a grant proposal on the basis of scientific merit and potential impact of the research. After discussing the application, each member gives the application a final score, and an overall impact score is determined from the average of members' final scores. The application is also given a percentile ranking, based on how the overall impact score compares to other applications reviewed by the SRG in the past year.", "In the second stage, the funding decisions are refined by the National Advisory Councils or Boards of the potential awarding ICs. Advisory Councils and Boards are composed of scientific and lay representatives. These groups examine applications recommended for funding, place their impact scores and percentile rankings in the context of the IC's research priorities, and then make recommendations for final funding decisions. Many ICs establish a \"payline,\" or percentile cutoff for applications that get funded, though ICs may prioritize applications outside of the payline based on other considerations. The IC director then makes final funding decisions. Section 2033 of the 21 st Century Cures Act ( P.L. 115-255 ) added a new requirement that the IC Director weigh the Advisory Board or Council's advice against the IC's mission and research priorities, the NIH-Wide Strategic Plan, and programs or projects funded by other ICs on similar topics before awarding a research grant."], "subsections": []}, {"section_title": "Awards", "paragraphs": ["NIH awards numerous types of research grants, administered by each IC. The most common and well-known type of grant is the R01 Research Project Grant, which is awarded for three to five years to conduct a research project. Other grants may be shorter-term exploratory grants that limit funding to two years or less. Because of the multiyear grants, in any given year, about three-fourths of the grantees are in \"noncompeting,\" or \"continuation,\" status. \"Noncompeting\" grantees have already applied and been awarded NIH funding for multiple years. Each year, a noncompeting grantee has to submit a project report to the IC that supplied the funding, but the grantee does not have to compete for the second, third, and fourth year of funding\u2014the IC considers the award a budgetary commitment (although it is still subject to appropriations). Prior to the expiration of the award, the grantee may choose to compete for a renewal of the project. According to one IC, reviewing a new application can take up to eight weeks from submission to the final funding decision.", "In FY2018, in addition to making over 11,000 new and competing renewal awards, NIH made almost 26,000 noncompeting awards and over 2,000 small business awards, for a total of over 39,000 research project grants (RPG). The average annual cost of an RPG award was about $519,000 in FY2018, including both direct and indirect costs. The direct costs, averaging 72.3% of the total award in FY2018, cover project-specific expenses, while the indirect costs, averaging 27.7%, pay for facility and administration costs (i.e., overhead) of the institution where the research is conducted."], "subsections": []}, {"section_title": "Issues and Reforms in the Peer Review and Grant Award Process", "paragraphs": ["Some critics of the NIH peer review and grant award process contend that it is cumbersome, biased, and ineffective at identifying promising research project proposals. Others have defended the peer review system as a rigorous and competitive process that has been honed over many years. ", "To evaluate the process, the NIH requested an SMRB report on the peer review and award process. In its 2015 report, SMRB recommendations included fast-tracking high-scoring and high-priority applications, increasing the pool of peer reviewers, reviewing administrative processes to improve efficiency, and piloting innovative methods of peer review. In addition, the NIH Strategic Plan 2016-20 includes ways to improve the peer review process by testing and validating new approaches \"including asynchronous, electronic reviews and two- or three-stage 'editorial board' models,\" along with measures to compare the performance of each SRG. "], "subsections": []}, {"section_title": "Grants Compliance and Oversight", "paragraphs": ["Congress has enacted many requirements for NIH-funded research, including requirements related to human subjects protections, use of animals, and others. Based on federal laws and regulations, NIH maintains an updated \"Grants Policy Statement\" on all terms and conditions of NIH grant awards. Grantees are also informed of specific award requirements in their \"Notice of Award.\" Grant awards are made to institutions, not to specific researchers. Therefore, both NIH and recipient institutions share responsibility in grant compliance and oversight of researchers. For instance, Institutional Review Boards and Institutional Animal Care and Use Committees at grantee institutions are responsible for ensuring the ethical use of human subjects and animals in research. The NIH Division of Grants Compliance and Oversight (DGCO) provides training and resources to grantees and institutions to ensure compliance. The division also conducts site visits and reviews as needed. "], "subsections": []}]}, {"section_title": "Intramural Research", "paragraphs": ["The NIH intramural research program (IRP), at about $4.0 billion in FY2018, accounts for approximately 11% of the total NIH budget. It includes about 1,100 principal investigators and 6,000 trainees ranging from high school students to postdoctoral and clinical fellows in NIH-operated laboratories. Other IRP personnel include administrative support staff, guest researchers, and contractors. Intramural research takes place at the 322-acre main campus in Bethesda, MD, and several off-campus sites, including locations in Maryland, North Carolina, Montana, Arizona.", "Almost all of the ICs have an intramural research program, but the size, structure, and activities of the programs vary greatly. As with extramural funding, most intramural research proposals are investigator-initiated. However, NIH sets the direction for its intramural research program by hiring scientists of targeted expertise, through allocating resources to certain laboratories and programs, and through external reviews. Each intramural scientist is evaluated by an external Board of Scientific Counselors from their IC every four years to review their work and research portfolio. Each IC's intramural research program is reviewed by an external panel every 10 years, concerning the entire research portfolio and impact of the research.", "Some intramural scientists work in the Clinical Center, which houses both basic research laboratories and clinics for scientists involved with patient care in clinical research studies. The Clinical Center is the nation's largest hospital devoted to clinical research. Along with scientists, the Clinical Center employs over 1,000 nurses and allied health professionals to support its work. Most ICs with intramural research programs fund research at the center. This arrangement facilitates interdisciplinary collaboration and the direct clinical application of new knowledge derived from basic research. "], "subsections": []}, {"section_title": "Research Training", "paragraphs": ["As stated by the agency, \"NIH's ability to ensure that it remains a leader in scientific discovery and innovation is dependent upon a pool of creative, diverse, and highly talented researchers.\" Research training activities are designed to support every stage of a biomedical research career (see \"Stages of a Research Career\" below) in both the extramural and intramural research programs. Programs range from summer internships for high school students to mentoring programs for independent investigators. Predoctoral and postdoctoral training opportunities are available through a variety of training grants, fellowships, and loan repayment programs. The largest extramural program is called the Ruth L. Kirschstein National Research Service Awards (NRSA) program, authorized by PHSA Section 487, which supports pre- and postdoctoral research training awards to both institutions and individuals. In 2015, NIH supported more than 15,600 graduate and postdoctoral students at universities, teaching hospitals, and research centers."], "subsections": []}, {"section_title": "Information Dissemination", "paragraphs": ["NIH has important roles in translating the knowledge gained from biomedical research into medical practice and useful health information for the general public. The individual ICs carry out many relevant activities, such as sponsoring seminars, meetings, and consensus development conferences to inform health professionals of new findings; answering thousands of telephone, mail, and online inquiries; publishing physician and patient education materials on the internet and in print; supporting information clearinghouses and running public information campaigns on various diseases; making specialized databases available; and fostering partnerships for educating clinicians and other healthcare professionals on the latest science. "], "subsections": []}]}, {"section_title": "Budget", "paragraphs": ["At $39 billion for FY2019, NIH's budget is much larger than those of other PHS agencies such as the Food and Drug Administration (FDA), Centers for Disease Control and Prevention (CDC), Health Resources and Services Administration (HRSA), Indian Health Service (IHS), and the Substance Abuse and Mental Health Services Administration (SAMHSA). About 40% of all discretionary HHS funding is provided to NIH. Moreover, NIH represents about half of federal spending for non-Department of Defense research and development (R&D) and about one-fifth of total federal R&D funding. ", "NIH has seen periods of high and low budget increases. Prior to 2004, Congress had doubled the NIH program level over a five-year period from its FY1998 base of $13.7 billion to the FY2003 level of $27.1 billion. Subsequently, NIH experienced a decade of stagnant growth in the agency's budget. Congress provided budget increases generally around 1%-3.2% from FY2004 to FY2015, often lower than the rate of inflation for biomedical research, which resulted in reduced purchasing power for the agency. In some years, (FY2006, FY2011, and FY2013) funding for the agency decreased in nominal dollars. Starting in FY2016 through FY2019, Congress provided NIH with funding increases of over 5% each year, increasing the program level from $30.3 billion in FY2015 to $39.3 billion in FY2019. In inflation-adjusted FY2019 dollars, the NIH program level remains 9% below the 2003 level. Under President Trump's FY2020 budget request, NIH would be provided a program level of $34.3 billion\u2014a 12.6% reduction from the FY2019 program level. In inflation-adjusted FY2020 dollars, this proposed FY2020 program level would be 22.6% below the peak 2003 level. See Figure 4 for a visualization of NIH budget trends from FY1994 to FY2020. "], "subsections": [{"section_title": "Sources of Funding", "paragraphs": ["NIH receives funding from mostly discretionary budget authorities and one mandatory budget authority. The total NIH budget is called the \"program level.\" Discretionary funding for NIH comes primarily from the annual Labor-HHS-Education (LHHS) appropriations bill, which funds the agency through 27 separate accounts, including the 24 ICs with research grant-awarding authority. An additional small amount for environmental research and training related to the Superfund program comes from the Interior, Environment, and Related Agencies (Interior-Environment) appropriations bill for the National Institute of Environmental Health Sciences (NIEHS). Those two sources constitute NIH's discretionary budget authority. ", "The NIH \"program level\" takes into account other funds that are added to or transferred from the agency. In FY2019, NIH received mandatory funds ($150 million in FY2019) for Special Diabetes Programs for Type 1 Diabetes under PHSA Section 330B (42 U.S.C \u00a7254c-2). The type 1 diabetes program was most recently reauthorized by the Bipartisan Budget Act of 2018 ( P.L. 115-123 ), which provided $150 million for each of FY2018 and FY2019 for the Special Diabetes Program for type I diabetes to the NIH. ", "NIH also receives funds from a \"program evaluation\" transfer authorized by PHSA Section 241 (42 U.S.C. \u00a7238j). NIH and other PHS agencies (funded through LHHS appropriations) are subject to this budget \"tap,\" which has been used to fund not only program evaluation activities, but also programs such as NLM, the National Center for Health Statistics in CDC, and the entire discretionary budget of the Agency for Healthcare Research and Quality. These and other uses of the evaluation tap by the appropriators have the effect of redistributing appropriated funds among PHS agencies. ", "Although the PHSA provision limits the tap to no more than 1% of eligible appropriations, in recent years annual LHHS appropriations bills have specified a higher amount (2.5% for FY2019 in P.L. 115-245 ), and have typically directed specific amounts of funding from the tap for transfer to a number of HHS programs. The assessment has the effect of redistributing appropriated funds for specific purposes among PHS and other HHS agencies. NIH, with the largest budget among the PHS agencies, has historically been the largest \"donor\" of program evaluation funds. Until recently, it had been a relatively minor recipient. In FY2019, NIH received $1.15 billion in funds subject to the evaluation tap through P.L. 115-245 . Under President Trump's FY2020 budget request, NIH would receive $741 million in funding subject to the evaluation tap."], "subsections": []}, {"section_title": "Budget Formulation", "paragraphs": ["The NIH budget request that Congress receives from the President each February for the next fiscal year reflects both recent history and professional judgments about the future, because it needs to support both ongoing research commitments and new initiatives. The request is formulated through a lengthy process that starts more than a year before in the ICs. The budget then evolves over a number of months as it moves from the ICs to NIH, then to HHS, and finally to the Office of Management and Budget (OMB). At each stage, IC and NIH needs are weighed in the context of the larger budget. Eventually, Congress is called upon to make similar judgments.", "As a continuing process, IC leaders, with input from the scientific community, define the most important and promising areas in their respective fields. They consider whether their existing research portfolio needs rebalancing, and they decide on possible new initiatives for the coming budget year. An annual budget retreat in May brings together the IC leaders with top NIH management to discuss policies and priorities under various budget scenarios. They might consider, for example, what the different emphases in their programs would be if the appropriation turned out to be a certain percentage decrease, a flat budget, or an increase. The presentations and discussions allow NIH management to develop the budget request it will submit to HHS, taking into account the estimated funding amount needed to support the \"commitment base\" of continuing awards, the funding desired for unsolicited new research proposals, the new initiatives that the Director wants to incorporate, and guidance from the department about the request (e.g., there might be an instruction to pay no inflation increases on grants). ", "At the HHS level, NIH's request is considered in the context of the overall department budget, resulting in a notice back to NIH on the department's allowance. There are usually appeals and adjustments made before the final HHS budget goes to OMB. The process of submission, passback, and appeals is repeated as OMB considers the entire federal budget and tells HHS what amounts and policy approaches are approved for incorporation into the President's final budget that will be sent to Congress. Once the budget is made public, all agency comments about the request are expected to support the President's proposed levels."], "subsections": []}, {"section_title": "Private Funding from the Foundation for the NIH", "paragraphs": ["The Foundation for the National Institutes of Health (FNIH) is a 501(c)(3) charitable organization that raises private funding and manages public-private partnerships to support NIH's mission. FNIH was established in 1990 by P.L. 101-613 and began operations in 1996. FNIH supports research projects and programs, education and training, conferences and events, and other support activities for NIH, such as drug donations to the clinical center. Pursuant to PHSA Section 499 (42 U.S.C. \u00a7290b), there are terms and restrictions on activities, requirements for the board of directors, reporting requirements, and other requirements for FNIH. ", "In its history, FNIH has raised over $1 billion in support of NIH's mission. By the end of 2017, FNIH had raised over $555 million in multiyear funding commitments for over 100 programs: $541 million for research projects, $8.7 million for education and seminars, $3.2 million for capital projects, and $2.8 million for events. "], "subsections": []}]}, {"section_title": "Setting NIH Research Priorities", "paragraphs": ["NIH funds research on hundreds of diseases, conditions, and areas of human health. NIH funding is highly competitive\u201420.9% of all grant applications were funded in FY2018. NIH and Congress face trade-offs in allocating funding in a fair manner that balances the scientific merit of proposals with meeting the diverse health needs of the population. Funding decisions are especially difficult because science is a process of discovery\u2014even experts cannot always predict which proposals will lead to breakthroughs. Historic tensions have included whether to designate funding for specific diseases and areas of research or to allow untargeted funding for the most meritorious proposals identified through the peer review process; balancing funding for basic scientific research with applied research; whether funding should go to certain ethically contentious research areas, such as embryonic stem cell research; how to fund research on the most pervasive diseases and conditions while also funding research on rare diseases; and how to allocate funding among established and successful scientists while enabling new scientists to enter the field. ", "Historically, Congress allowed NIH ICs, for the most part, to fund research based on their own internal prioritization process, which involves scientific experts, patient advocates, and others. In recent years, Congress has provided more direction to NIH funding in both appropriations report language and legislation. The following sections summarize (1) congressional involvement in NIH research priorities, including recent major efforts, legislation, and research restrictions, and (2) NIH internal processes for setting research priorities through strategic planning and advisory groups. ", "NIH is not the only federal agency that supports biomedical and health-related research. The Department of Defense (DOD) and the Department of Veterans Affairs (VA) and others also support medical research programs. In FY2019, the NIH program level was $39.3 billion, the VA appropriation for medical research was $779 million, and the DOD's Defense Health Program's Research, Development, Test, and Evaluation (RDT&E) account received $2.18 billion, including $1.47 billion for the Congressionally Directed Medical Research program (CDMRP). A 2016 National Academies of Sciences, Engineering, and Medicine (NASEM) report examined duplication and coordination of research funded by NIH, DOD, and VA. The report found that some formal mechanisms helped reduce duplication, such as interagency coordinating committees, common grant portals, and assessing other funding sources in grant application review. However, the agencies each lack comprehensive information about the other agencies' activities, which \"limits their ability to identify potential areas of duplication.\" In addition, other agencies support health-related research, such as the Centers for Disease Control and Prevention (CDC) and the Agency for Healthcare Quality and Research (AHRQ). Although the below discussion focuses on research priorities at NIH, Congress may consider how to prioritize and coordinate funding for medical and health-related research across the federal government. "], "subsections": [{"section_title": "Congressional Involvement in NIH Research Priorities", "paragraphs": ["Congress's primary role in NIH research priorities is through annual appropriations to the IC accounts. From time to time, Congress addresses NIH research priorities through legislation authorizing specific programs, such as the 21 st Century Cures Act ( P.L. 114-255 ) and through restrictions and other requirements for research. ", "Appropriators have traditionally avoided specifying dollar amounts for particular disease areas, fields of research, or mechanisms of funding in both report and bill text, aside from the level of the IC accounts. Generally, specific amounts are appropriated to each IC, and then funding is awarded through competitive grants, contracts, or to intramural researchers.", "In recent years, report language accompanying appropriations acts and laws such as the 21 st Century Cures Act ( P.L. 114-255 ) have included more specified funding amounts for research areas and programs. For example, the report accompanying the FY2019 LHHS conference appropriations bill ( H.Rept. 115-952 , pp. 529-530) directed specific funding increases for the following at NIH: Alzheimer's disease research, antibiotic resistant bacteria research, universal flu vaccine development, opioids-related research, and the Institutional Development Awards (IDeA) program. The 21 st Century Cures Act, passed in 2016, authorized specific appropriations for four innovation projects (as described in the \" 21 st Century Cures Act \" section of this report). Other laws that have directed funding to specific research areas include the Gabriella Miller Kids First Research Act ( P.L. 113-94 ), which authorizes $12.6 million for each of FY2014-FY2023 for pediatric research, and mandatory appropriations of $150 million for research on type 1 diabetes, authorized by PHS Act \u00a7330B and extended most recently by the Bipartisan Budget Act of 2018 ( P.L. 115-123 ) for FY2018 and FY2019."], "subsections": [{"section_title": "Alzheimer's Disease Research", "paragraphs": ["Changes in congressional practice have occurred most notably with research funding for Alzheimer's disease. From FY2001 through FY2014, Congress provided broad directives to NIH in report language, encouraging the agency to prioritize Alzheimer's disease and to increase resources toward its research through the National Institute on Aging (NIA). The explanatory statement accompanying the FY2014 omnibus included the following language:", "In keeping with longstanding practice, the House and Senate Appropriations Committees do not recommend a specific amount of NIH funding for this purpose or for any other individual disease. Doing so would establish a dangerous precedent that could politicize the NIH peer review system. Nevertheless, in recognition that Alzheimer's disease poses a serious threat to the Nation's long-term health and economic stability, the agreement expects that a significant portion of the recommended increase for NIA should be directed to research on Alzheimer's. The exact amount should be determined by the scientific opportunity of additional research on this disease and the quality of grant applications that are submitted for Alzheimer's relative to those submitted for other diseases.", "The explanatory statement for the FY2015 omnibus included similar language but noted that the agreement provided a $25 million increase for Alzheimer's disease research at NIA; still, it did not direct NIH to reserve a specific total dollar amount. Then, in a significant departure from past precedent, the explanatory statements to the appropriations measures for each of FY2016 through FY2018 directed NIH to reserve a specific amount for Alzheimer's disease research. The conference report accompanying the FY2019 LHHS Appropriations Act continues this trend. ", "The change in congressional practice was driven by the National Plan to Address Alzheimer's Disease, first announced in 2012. Established by the National Alzheimer's Project Act (NAPA; P.L. 111-375 ), the National Plan includes \"Prevent and Effectively Treat Alzheimer's Disease and Related Dementias by 2025\" as the first of five key goals. To help meet this goal, NIH began to publish an annual bypass budget in FY2015 to estimate funding needs for Alzheimer's disease research, starting for FY2017. A bypass budget, also known as a professional judgement budget, is a budget proposal submitted directly by NIH to Congress to estimate research funding needs based on scientific opportunity, rather than as determined by the regular budget and appropriations process (detailed in \" Budget Formulation \"). The bypass budget was mandated by the Consolidated and Further Continuing Appropriations Act, of 2015 ( P.L. 113-235 ), which specified that the NIH Director submit an annual independent Alzheimer's research budget request directly to Congress, pursuant to the National Alzheimer's Plan. To determine its bypass budget proposal, NIH has convened research summits starting in 2012, and has worked across its ICs to determine recommendations and funding needs for Alzheimer's disease research. To meet its research goals, NIH has used targeted FOAs to solicit research proposals related to Alzheimer's disease from scientists. ", "Alzheimer's disease research represents an area of major congressional involvement in directing large amounts of research funding toward a specific disease. A Science magazine article from August 2018, asserts that the large increase in funding for Alzheimer's disease research has affected the NIH and the scientific community in an unprecedented way: ", "Such a dramatic increase in research funding for a disease has no precedent at NIH aside from the War on Cancer, an effort launched in 1971, and an explosion of AIDS funding in the late 1980s. With the largesse come logistical challenges. Overworked NIH staff are scrambling to review and process thousands of grant proposals, including those for this year's [FY2018] $414 million bolus\u2014a sum that equals the entire budget of some smaller NIH institutes\u2014which Congress approved in March.", "NIA, which oversees the new funds, doesn't just want to plump up existing Alzheimer's labs, says Director Richard Hodes. The institute is also luring investigators ... from other fields to bring in fresh ideas. Many are answering the call. \"Nearly everyone I know is putting the words 'Alzheimer's disease' in their grants in an effort to tap into the money,\" says Matt Kaeberlein of the University of Washington in Seattle, who studies aging.", "Even with the windfall of funding, many in the scientific community are skeptical of meeting the goal to prevent and treat Alzheimer's disease by 2025. Many potential cures for Alzheimer's diseases have failed in recent clinical trials. According to a 2016 study, a few drugs have been approved that help relieve some of the symptoms of Alzheimer's disease, but they have a \"modest\" clinical effect. The authors determined that only a few drug candidates in the clinical trial pipeline could potentially meet the 2025 deadline. While the funding has helped accelerate the scientific understanding of Alzheimer's disease, some members of the scientific community worry that the attention on Alzheimer's disease research may detract from research on other diseases like cancer. Others argue that accelerating Alzheimer's disease research and drug development is ultimately beneficial, regardless of whether the 2025 goal is met."], "subsections": []}, {"section_title": "Research Restrictions", "paragraphs": ["From time to time, Congress has placed restrictions on NIH research. Current restrictions for FY2019 relate to research advocating or promoting gun control, payment for abortions, human embryo research, promoting legalization of controlled substances, and others. In the past, members of the research community have been unsettled by congressional attempts to cancel funding for specific existing peer-reviewed grants. The targeted studies have tended to be in fields of behavioral research, including some in mental health and human sexuality research. Sponsors and supporters of such amendments to the LHHS appropriations bills say that NIH should not be devoting scarce resources to research studies whose value they question. Researchers, however, including NIH leadership, have expressed alarm at what they view as an assault on the peer review system, saying that such studies were funded because of their technical merit and the important research questions they addressed. Perhaps the most prominent example is the restriction on federal funding of research on human embryonic stem cells. Although President Barack Obama signed an executive order in March 2009 that reversed the nearly eight-year-old George W. Bush Administration restriction on federal funding for human embryonic stem cell research, funding for some aspects of such research is still limited by a provision in the annual LHHS appropriations bill\u2014the so-called Dickey-Wicker amendment."], "subsections": []}, {"section_title": "Cures Acceleration Network", "paragraphs": ["The Cures Acceleration Network (CAN) allows NIH to award large grants of up to $15 million per year (that require a 1:3 matching ratio), and other flexible awards, to \"advance the development of high-need cures and reduce significant barriers between research discovery and clinical trials.\" CAN grant recipients can be public or private entities, including institutions of higher education, pharmaceutical companies, and disease advocacy organizations. ", "Authorizing language for the Cures Acceleration Network was provided in the Patient Protection and Affordable Care Act (ACA; P.L. 111-148 ), enacted in March 2010. Subsequent legislation ( P.L. 112-74 ) assigned CAN to NIH's National Center for Advancing Translational Science (NCATS). ACA authorized $500 million for CAN in FY2010 and such sums as necessary for subsequent fiscal years; however, CAN is to be funded via a specific appropriation and cannot be funded using the general NIH appropriation or other funds appropriated under the PHSA. Congress has designated up to the following amounts for CAN in its appropriations to NCATS: $10 million in FY2012; $40 million in FY2013; $9.8 million in FY2014; $9.8 million in FY2015; $25.8 million in each of FY2016, FY2017, and FY2018, respectively; and $80 million in FY2019. The actual program level for CAN may be lower than the maximum amount authorized by Congress for each fiscal year, though actual funding levels are available only for some, but not all, fiscal years. ", "CAN authorizing language states that the NIH Director determines which medical products (drugs, devices, biological products, or combination products) are \"high need cures,\" based on (1) their ability to diagnose, prevent, or treat harm from a disease or condition, and (2) the lack of market incentives for their adequate or timely development. NIH then makes awards to public or private research entities, including medical centers, biotechnology or pharmaceutical companies, and patient advocacy groups in order to accelerate the development of such high-need cures. CAN is directed to conduct and support revolutionary advances in basic research and to facilitate FDA review for CAN-funded cures, as specified. A CAN Review Board advises the Director on the activities of CAN and on significant barriers to the translation of basic science into clinical applications. The CAN Review Board submits reports to HHS regarding any barrier identified. The Director is required to respond to such recommendations in writing. Advocacy groups, such as the Parkinson's Action Network and the Council for American Medical Innovation, have voiced strong support for the creation of CAN. Others, however, have concerns about providing federal funds to industry without measures to ensure that taxpayers receive a return on the investment, such as through reasonable prices on resulting products.", "In the summer of 2018, the Cures Acceleration Network was actively supporting three programs: (1) tissue chip for drug screening, (2) biomedical data translator, and (3) 3-D tissue bioprinting. The programs are aimed at using emerging technology, such as modelling human organs on microchips or using novel computational methods with patient biomedical data, for innovating either drug development or disease diagnosis."], "subsections": []}, {"section_title": "21st Century Cures Act", "paragraphs": ["The 21 st Century Cures Act ( P.L. 114-255 ; hereinafter referred to as the \"Cures Act\") was signed into law on December 13, 2016. This law authorizes $4.8 billion for NIH over a 10-year period (FY2017-FY2026), with varying amounts allocated each fiscal year (see Table 1 ). The following is a summary of provisions in Title I of the Cures Act that authorized funding for new programs at NIH, and provisions in Title II that established or amended other programs. ", "Title I of the Cures Act, Section 1001 establishes the \"NIH Innovation Account\" to which specified amounts are authorized to be transferred for each of FY2017 through FY2026 (see Table 1 ) for the purpose of carrying out the following four NIH Innovation Projects:", "The Precision Medicine Initiative (PMI) All of Us Research Program ($1.5 billion for FY2017 through FY2026), which is collecting clinical, environmental, lifestyle, and genetic data from more than 1 million participants over many years. The Brain Research through Advancing Innovative Neurotechnologies (BRAIN) Initiative ($1.5 billion for FY2017 through FY2026), which uses new technology to understand how individual cells and the neural circuits they form interact in time and space\u2014scientific understanding that may help treat, cure, or prevent brain-related disorders. The Beau Biden Cancer Moonshot ($1.8 billion for FY2017 through FY2023), which aims to accelerate progress in cancer research by enhancing data access and facilitating collaborations. The Regenerative Medicine project ($30 million for FY2017 through FY2020), which supports clinical research using adult stem cells, in coordination with FDA.", "To date, amounts authorized for the Innovation Projects have been fully appropriated. The first round of funding was provided by Section 194 of the Further Continuing and Security Assistance Appropriations Act, 2017 (CR, P.L. 114-254). The CR appropriated $352 million in the NIH Innovation account for necessary expenses to carry out the four NIH Innovation Projects as described in Section 1001(b)(4) of the Cures Act. The second round of funding ($496 million) was provided by the FY2018 omnibus (P.L. 115-141). The third round of funding ($711 million) is provided by the FY2019 Consolidated Defense, LHHS, and Continuing Resolution Appropriations Act (P.L. 115-245). Under President Trump's FY2020 budget request, NIH would be provided the full $492 million authorized by the Cures Act for FY2020.", "Title II of the Cures Act addresses the NIH in numerous ways, including administrative reforms and new programs. Among new programs in Title II, the Next Generation Initiative (NGI) was established to coordinate NIH programs related to retaining and recruiting new researchers. As a part of NGI, NIH is required to use findings from a National Academies report to make reforms to existing programs (see \" NIH Initiatives to Recruit and Retain a Research Workforce \"). Title II also includes reforms to ensure inclusion in biomedical research, as related to race/ethnicity, gender, sexual orientation, and age. Finally, Title II extends NCATS's authority to support clinical trial activities, consolidates existing NIH intramural loan repayment programs, specifies administrative requirements for PMI and ClinicalTrials.gov, and establishes a working group to make recommendations to enhance the rigor and reproducibility of NIH-funded scientific research, among other provisions."], "subsections": []}]}, {"section_title": "NIH Process in Setting Research Priorities", "paragraphs": ["Each NIH IC has separate research priorities, which are specified in statutory authority in varying levels of detail. IC research priorities are broadly captured by their mission statements. ICs establish research priorities through strategic planning, annual planning, and periodically reviewing and assessing their research portfolios. Each IC has an advisory council that makes recommendations for IC research priorities and funding decisions. The IC advisory councils are made up of both scientific and public representatives, who may have expertise, interest, and other affiliations relevant to the IC's mission. According to the agency, decision-makers at NIH seek advice from many groups when setting research priorities, including scientific researchers and professional science societies; patient organizations and voluntary health associations; IC Advisory Councils; Congress and the Administration; the Advisory Committee to the NIH Director; the SMRB; and NIH staff. ", "For many years, each IC has undergone a periodic strategic planning process to determine its funding priorities among the research areas in its broadly defined mission. The IC strategic planning processes are conducted pursuant to PHSA Section 402(b)(5), which specifies that the NIH Director \"shall ensure that scientifically based strategic planning is implemented in support of research priorities as determined by the agencies of the National Institutes of Health.\" \u00a0The Cures Act ( P.L. 114-255 ) amended PHSA Section 402 to require an NIH-Wide Strategic Plan, in part to facilitate IC collaboration and coordination. ", "In the first NIH-Wide Strategic Plan 2016-2020, the NIH specifies its agency-wide process for setting research priorities. As stated in the Strategic Plan, \"The process of setting NIH's research priorities must balance the opportunities presented by the best science, public health needs, and the unique ability of NIH to address challenges in human health that would otherwise go unmet.\" In its Strategic Plan, the NIH reaffirmed its commitment to a transparent and evidence-based process for funding decisions that prioritized the four principles listed below. NIH does not specify percentages or funding amounts for any of the four principles:", "Enhance the nimbleness needed to meet public health needs and capitalize upon scientific opportunity, using new portfolio analysis tools. Incorporate burden of disease as an important, but not sole, factor. Take advantage of opportunities presented by rare diseases to advance research. Consider the value of permanently eradicating a disease.", "The NIH-Wide Strategic Plan is designed to complement the strategic plans of the individual ICs. The agency seeks to better identify areas of research overlap and gaps across its portfolios, including by comparing the portfolio of each IC with another to assess if resources are optimally allocated. In addition, the Strategic Plan also stated that NIH would take leadership in \"developing and validating the methodologies that are needed to evaluate scientific investments.\"", "According to NIH, the Strategic Plan was developed with \"input from\u00a0hundreds of stakeholders and\u00a0scientific advisers, and in collaboration with\u00a0leadership and staff of NIH's Institutes, Centers, and Offices.\" The NIH Reform Act of 2006 ( P.L. 109-482 ) enhanced the authority of the NIH Director's Office to perform strategic planning, especially facilitating and funding transdisciplinary, cross-institute research initiatives. The Reform Act also created a special office, the Division of Program Coordination, Planning, and Strategic Initiatives (DPCPSI). It \"identifies important areas of emerging scientific opportunity or rising public health challenges to assist in the acceleration of research investments in these areas.\" The Office of Strategic Coordination within DPCPSI manages the NIH Common Fund, which supports large complex research efforts that involve the collaboration of two or more research institutes or centers. The Office of Strategic Coordination works with staff and leadership across NIH to identify and promote NIH-wide scientific opportunities that receive Common Fund support. "], "subsections": []}]}, {"section_title": "Balancing New and Existing Funding Commitments", "paragraphs": ["Because of variation in annual appropriations, NIH cannot support the same number of research projects from year to year. In years of large funding increases, the agency may proportionally increase research awards. When funding is cut the agency may limit the number of research grants awarded. Given that most grants are multiyear grants that have \"non-competing\" status during the duration of the project, much of NIH funding is committed even before appropriations are finalized (though these grant renewals remain \"subject to appropriations\"). Reductions in NIH purchasing power may lead to reductions in \"competing\" grants awarded, or grants for new research projects\u2014potentially creating a more competitive environment for new NIH awards. ", " Figure 5 shows NIH research project grant (RPG) numbers and success rates for new grant applications annually from FY2003 to FY2018. NIH supported about the same total number of RPGs each year from FY2003 to FY2008, but it supported fewer RPGs after FY2008 and has only started to increase the annual number of RPGs awarded in FY2016. Concurrently, the average cost of an RPG has increased from $337.8 thousand in 2003 to $518.0 thousand in 2018. To maintain existing funding commitments, NIH mostly maintained the number of noncompeting grants from year to year, while cutting back on awarding competing project grants from FY2009 to FY2015\u2014grants that fund new research projects.", "Success rates for grant applications, or the percentage of applications that received funding, has also varied from year to year\u2014likely due to a combination of decreased purchasing power as well as an increasing pool of applicants. As shown in Figure 5 , the success rate for new grant applications was 30% in FY2003, fell to a low of 17% in FY2013, and rose to 21% in FY2018. The decrease in purchasing power\u201422% lower in FY2013 than in FY2003\u2014may have curtailed NIH's ability to support new projects, and therefore reduced the proportion of grant applicants who received funding. In addition, though the number of competing grants awarded by NIH in FY2016 returned to above FY2007 levels, the success rate for applicants was lower in FY2016-FY2018 than prior to FY2007. The decline in success rates therefore also reflects a growing pool of investigators who are competing for NIH funding. In FY2003, NIH received 34,710 applications for RPGs, which rose to 49,581 applications in FY2013 and then to 54,834 in FY2018. The number of applications rose by 58% between FY2003 and FY2018.", "The average success rate at NIH reflects varying success rates for applications to different ICs. Success rates for the various ICs in FY2018 range from 10.3% for the National Institute of Nursing Research (NINR) and 10.7% for the National Institute on Minority Health and Health Disparities (NIMHD), at the low end, to 34.8% for the National Center for Advancing Translational Sciences (NCATS) and 33.3% for the National Institute on Drug Abuse (NIDA), at the high end. ", "Science editor-in-chief, Jeremy Berg argues that variation in funding from year to year may affect scientific progress:", "Such fluctuations have important consequences. Outstanding applications that would have been funded one year go unsupported the next year, so that potentially ground-breaking research may be missed for arbitrary reasons of timing. Low success rates result in scientists spending more time writing and reviewing proposals instead of conducting research. Investigators, particularly those at vulnerable career stages, can become demoralized by the apparently capricious nature of funding decisions.", "Members of the scientific community have called for steady, predictable annual growth in NIH funding; a long-term strategy for federal research investment; and greater increases in federal funding for biomedical research.", "Some argue that research institutions and universities have become too reliant on NIH funding. In 2017, federal dollars made up about 60% of all funding to higher education institutions for \"biological and biomedical sciences research,\" and 53% of all funding for \"health sciences\" research. One commentary, published in 2018, explored how universities rely on NIH funding for researchers' salaries and laboratory facilities. During the doubling period of NIH funding from 2000 to 2004, universities rapidly increased square footage of laboratory space and hired more scientists\u2014possibly assuming future increases in NIH funds to support their growth. The growth in laboratories heightened the need and competition for NIH grants. According to the author, universities have switched to mostly financing researchers' salaries with grant funds in the past few decades. In the 1970s, universities paid about 75% of researchers' salaries; in 2014, many researchers received, on average, 65% of their salary from grants (based on available evidence; many universities do not share salary data). ", "As a result of reliance on competitive grant funding, researchers are spending increasing amounts of their time writing grant applications rather than conducting science. The author argues that universities should commit more of their \"hard money,\" or institutional funds, for research salaries and facilities to ensure the sustainability of biomedical research.", "NIH Director Francis Collins alluded to this issue in a January 2010 interview, stating that universities are \"becoming too reliant on NIH money, allowing faculty members to obtain all their income from federal research grants.\" Dr. Collins indicated that when faculty members run multiple research projects at the same time, \"that turns that investigator into a grant-writing machine perhaps more than a doing-of-science machine.\" However, he said, any new restrictions on NIH grants \"would have to be phased in over a fairly long period of time because many universities and faculty members would find that quite disruptive.\" President Trump's FY2018, FY2019, and FY2020 budget proposals have included initiatives designed to \"stretch available grant dollars.\" The FY2018 budget proposal would cap the indirect costs that could be covered by NIH grants (facilities and administrative\u2014or F&A\u2014costs) at 10% of the total grant award to reduce the overall cost of an RPG. Over the previous 10 years, approximately 28% of grants were used to cover F&A costs. Both the House and Senate Appropriations Committees rejected the proposal to cap F&A costs. The report accompanying H.R. 3358 ( H.Rept. 115-244 ) stated that the Trump Administration's proposed cap on indirect (F&A) costs was \"misguided and would have a devastating impact on biomedical research across the country.\" The FY2019 budget request proposed capping the percentage of an investigator's salary that can be paid with grant funds at 90%. It also proposed capping investigator salaries at $152,000, a 19% reduction from the current $187,000 limit. In the report accompanying H.R. 6470 , the House Appropriations Committee stated that it did not include the general provision in the budget request to limit the percentage of a researcher's salary that may be paid for using NIH grant funds, as the impact of such a change is unclear. The report stated, \"The Committee requests an analysis of the projected impact of such a policy change on the number and average cost of NIH grants, as well as on academic institutions, in the fiscal year 2020 Congressional Justification\" ", "The FY2020 budget request, again, included the proposal to cap the percentage of an investigator's salary that can be paid with grant funds at 90%. In the requested analysis published in the FY2020 Congressional Justification, NIH stated that \"no previous research examines the impact of reducing the salary cap on the number of grants and the average cost per grant.\" NIH noted that a salary cap reduction in FY2011 did not reduce the average cost of NIH grants and that the number of NIH grants awarded decreased, though other factors may have affected grant numbers and average costs. NIH also noted that an unintended consequence of the policy could be that institutions will have to make up for the rest of researchers' salaries, which \"may limit the number of applicants with sufficient resources to participate in Federally-funded research.\""], "subsections": []}, {"section_title": "NIH Initiatives to Recruit and Retain a Research Workforce", "paragraphs": ["NIH is concerned about retaining and attracting new scientists for biomedical research careers. In the past two decades, early-stage scientists have received a declining percentage of NIH grants and have spent more time in low-paid postdoctoral training positions. The number of traditional faculty positions in biomedical research has declined, while the number of postdoctoral positions has increased, creating a highly competitive and pessimistic outlook for obtaining traditional academic research positions. A 2018 National Academies of Sciences, Engineering and Medicine (NASEM) report stated that, \"these obstacles to success have created a research career path that is increasingly unattractive in terms of pay, duration, culture, risk-taking, and future job prospects.\"", "A relatively large portion of NIH funding goes to older and more established researchers. Between 1998 and 2014, the proportion of NIH-funded investigators over the age of 65 increased from 5% to 12%, while those younger than 50 declined from 54% to 39%. The average age at which an investigator first obtained an independent grant increased by more than five years between 1990 and 2016. During that time, the average age at which a new investigator first obtained a R01 grant (independent research project grant) increased from 36 years for PhDs and 38 years for MDs, to 42 years for PhDs and 45 years for MDs, respectively. Another analysis from the NIH Office of Extramural Research also found that the percentage of the NIH workforce made up of new investigators and early-stage investigators had declined between 2009 and 2016.", "In addition, the success rate for new investigators fell from 40% in 1962 to 27% in 2013. A 2018 GAO analysis found that \"extramural investigators who had received at least one large NIH research grant during fiscal years 2013 through 2017 were more likely to receive such grants in subsequent application cycles than investigators who had not yet received such grants.\"", "According to a 2017 study, a minority of highly funded researchers have received an increasing percentage of NIH grants in recent years. In 2015, the top 10% of NIH grant winners by total award received 37% of NIH funding, an increase from the 32% received in 1985, but down from a peak of 40% of total funding in 2010. In contrast, the bottom 40% of principal investigators received 12% of total funding in 2015, down from 16% in 1985. Of note, 2010 and 2015 were years of low funding growth, and therefore NIH might have been expected to make fewer new grant commitments to new investigators in these years, in order to sustain funding for ongoing research. In addition, the authors of the study described a lack of mobility for investigators. They concluded that researchers who start at the top tend to remain there, while researchers receiving a lower portion of funding remain poorly funded. Scientists in the top 20% of funding have more publications and citations, which may help explain grant success. ", "As previously mentioned, the 21 st Century Cures Act ( P.L. 114-255 ) established the Next Generation of Researchers Initiative (NGRI) within the office of the NIH Director. This initiative is intended to provide opportunities for earlier independence while enhancing workforce diversity. Superseding previous policy on early-stage investigators, it requires the NIH Director to develop new policies and programs that promote opportunities for new researchers to receive funding, enhance training, and encourage workforce diversity.", "NIH has faced challenges in attempting to implement NGRI. In May 2017, NIH proposed to cap funding for highly funded investigators through a measure termed the Grant Support Index (GSI) to free up funding to early-stage investigators and others who receive less funding. Some members of the scientific community strongly opposed the GSI, arguing that it represented a move away from a merit-based system of allocating funding, would discourage collaboration and training, and was based on flawed analysis. Others argued that the highly funded researchers and institutions who would be affected by the policy could afford to diversify their funding sources. Ultimately, NIH cancelled the proposal after facing criticism at a Council of Councils meeting.", "As an alternative to GSI, in August 2017 NIH announced the official policy for the NGRI, which called on ICs to prioritize awards that fund early stage investigators (ESI) and early established investigators (EEIs). The policy defined ESIs as those who had completed training within 10 years and were gaining their first independent research award, and EEIs as those who had completed training within 10 years and who were at risk of losing NIH support or were supported only one active award. Through NGRI, NIH would free up \"substantial funds\" from its base budget to support ESIs and EEIs. NIH announced the program would start with $210 million in FY2017 and increase to $1.1 billion in five years, pending funding availability. NGRI was established to complement existing grant award opportunities that support ESIs and EEIs, such as the New Innovator Award and the Early Independence Award. Under NGRI, ICs would develop evidence-based strategies to increase and retain ESIs/EEIs, and NIH would track their outcomes.", "NIH again faced criticism that the program would prioritize ESIs and EEIs at the expense of established investigators, and that the rules for who qualified to be an ESI or EEI were too strict. NIH revised the policy to eliminate the EEI category, instead prioritizing investigators at risk of losing funding regardless of age, and to be \"flexible\" in designating who qualified for ESI status. NIH has established a working group to advise NIH on NGRI policy development. Despite apparent challenges, NIH Director Francis Collins stated at an August 2018 congressional hearing that the agency expects to fund more early-stage investigators than ever\u20141,100 researchers\u2014with their first grant in 2018 as a result of NGRI. The FY2020 budget request included further details about NIH plans for NGRI. NIH stated that it regularly collects data and evaluates outcomes on NIH-funded trainees and their transition to an independent career. In addition, the FY2020 budget request would provide $100 million in dedicated funding for NGRI, and the request stated: ", "in response to an advisory committee recommendation and a recent report from the National Academy of Sciences, NIH is creating a new pathway for applications from early-stage investigators that does not require preliminary data and continues to provide a separate review of applications. NIH is also lengthening the window for early-stage eligibility to 11 years with additional flexibility due to significant life events. ", "As referred to in the above quote, in 2018, NASEM published a report that identified policy reforms to better support the next generation of biomedical researchers. NIH was directed to fund the report through the FY2016 LHHS Appropriations Act ( P.L. 114-113 , Division H), and is required by the Cures Act to consider its recommendations and submit a report on actions taken to Congress in 2020. In the 2018 report, the NASEM committee found that while reductions in NIH purchasing power have constrained grant funding available to early-stage investigators, universities and research institutions have been slower to make reforms and less responsive to the needs of early-stage investigators than NIH. For instance, many universities and research institutions may provide inadequate career counseling or job opportunities for new researchers. The NASEM committee therefore recommended policies that hold universities and research institutions accountable alongside the NIH in supporting ESIs, and preparing them for diverse and nonacademic careers. The committee also made recommendations for Congress to create a council on ongoing challenges in biomedical research, and for NIH to strengthen its programs for ESIs, among many others."], "subsections": [{"section_title": "Workforce Diversity at NIH", "paragraphs": ["Apart from age and experience, other inequalities also persist in grant funding, such as by gender and race/ethnicity. NIH has found that women and racial and ethnic minorities make up a larger portion of new and early-stage investigators than experienced investigators, and generally make up a larger portion of the applicant pool than the awardee pool for grants. There is also less representation of women and minorities among faculty positions in the biomedical sciences.", "On average, women scientists are awarded smaller grant sizes than those awarded to men. One study found that from 1991 to 2010, while women made up half of all PhDs awarded in the biomedical sciences, one-third of first-time NIH research grants were awarded to women investigators. However, after winning their first grant, women were as likely as male scientists to win another grant. The researchers attributed these findings to women dropping out of an academic research career at a higher rate than men in early stages of their career. NIH has found that women tend to get their first grant award at a later age than men; however, the age differences between genders appears to have narrowed in recent years. ", "From 2002 to 2016, there was a 7.5% to 10.5% gap in funding rates between scientists from underrepresented minority groups compared to those from majority groups. A 2018 GAO analysis of NIH data from 2013 to 2017 found that 17% of investigators from underrepresented racial groups\u2014African Americans, American Indians/Alaska Natives, and Native Hawaiian/Pacific Islanders combined\u2014who applied for large grants received them, compared to 24% of Hispanic or Latino applicants, 24% of Asian applicants, and 27% of white applicants. In addition, the percentage of underrepresented minorities in the NIH grant applicant pool increased from 2002 to 2016.", "GAO noted that NIH has taken steps to support a diverse workforce, such as by hiring a Chief Officer of Scientific Workforce Diversity, who then created a workforce diversity strategic plan. GAO found that although NIH has developed initiatives for diversity, these programs have not been evaluated and that the programs do not have adequate performance measures to track their success. NIH diversity initiatives have included bias training for the intramural hiring committees, training and fellowship opportunities targeted at underrepresented groups, and ongoing career development, such as mentoring and conferences, for scientists from underrepresented groups."], "subsections": []}]}, {"section_title": "U.S. vs. Global Research", "paragraphs": ["While the United States remains the lead funder of research and development, other countries\u2014particularly China\u2014have increased public funding for research in recent years. A 2015 study compared investment in biomedical research in the United States and in other developed countries. It found that U.S. government research funding declined from 57% (2004) to 49% (2011) of the global total, as did that of U.S. companies (50% to 41%), with the total U.S. (public plus private) share of global research funding declining from 57% to 44%. Asian countries (China, Japan, South Korea, India and, Singapore) increased investment from $28 billion (2004) to $52.4 billion (2011). China, in particular, almost quadrupled funding on medical research, from $2 billion in 2007 to $8.4 billion in 2012. Globally, the United States continues to be the top supporter of research and development. NIH is the top nonindustry (governmental or philanthropic) single funder of health research in the world.", "The growth in international biomedical research can lead to certain benefits shared globally\u2014such as a larger pool of scientists across the world contributing to new knowledge and medical innovations. However, more research and development in other countries also means more competition for U.S. industries. In 2011, the United States led the world in publication of biomedical research articles\u2014accounting for 33% of articles published. However, in 2011, China was the leader in life science patent applications\u2014filing 30% of such patents globally. The United States followed with 24% of life science patents. Academic scientists often seek partnerships with colleagues or recruit students from other countries to advance their work. Yet, as new discoveries are translated to commercial products, such partnerships could complicate the economic development goals of public investment in research. ", "Some Members of Congress have expressed concern over the investments being made by other countries in biomedical research. In Section 809, \"Policy Statement on Medical Discovery, Development, Delivery and Innovation,\" H.Con.Res. 27 found that the \"United States leadership role is being threatened, however, as other countries contribute more to basic research from both public and private sources\" and that the \"Organisation for Economic Development and Cooperation [sic] predicts that China, for example, will outspend the United States in total research and development by the end of the decade.\"", "The growth in global biomedical research funding has contributed to a surge in research produced outside of the United States, as well as increasing collaboration between U.S. and international institutions. A study of articles published from 2004 to 2013 in PubMed (a database of biomedical research literature based at the U.S. National Library of Medicine) found that published research funded by non-U.S. government sources had increased significantly during that period. Publications authored by European and Asian authors had increased at a higher rate than those by American authors. Collaboration between U.S. and international institutions has also grown in the past few decades. A study of cardiovascular research publications found that cross-border collaboration increased from 1992 to 2012, with the United States having the highest number of cross-border collaborations. NIH actively encourages international collaboration through some of its grant opportunities.", "A congressional hearing in August 2018 raised the issue of undue foreign influence in U.S. biomedical research. NIH Director Francis Collins announced an investigation of research institutions for undue foreign influence in three key areas:", "First, failure by some researchers at NIH-funded institutions to disclose substantial contributions of resources from other organizations, including foreign governments, which threatens to distort decisions about the appropriate use of NIH funds. Second, diversion of intellectual property and grant applications [that] are produced by NIH-supported biomedical research to other entities, including other countries. And third, failure by some peer reviewers to keep information on grant applications confidential, including in some instances disclosure to foreign entities or other attempts to influence funding decisions.", "Dr. Collins also announced a working group of university leaders to develop methods and policies that mitigate undue foreign influence. Despite the presence of bad actors, Collins stressed the important role that foreign scientists have played in U.S.-funded research and reasserted the NIH's commitment to \"preserve the vibrancy of the diverse workforce.\"", "In a December 2018 report, the working group identified a Chinese research training program that facilitates the transfer of U.S. intellectual property to the Chinese government. Some participants from the program have received NIH funding, though they represent a small portion of foreign researchers in the United States. The report makes recommendations to educate institutions about disclosing and monitoring international ties, and to enhance cybersecurity to prevent information breaches. Other federal agencies, such as the Department of State, Department of Justice (DOJ), and Federal Bureau of Investigation (FBI), are also actively monitoring, investigating, and issuing guidance and/or new policies related to foreign theft of intellectual property from U.S. academic and research institutions."], "subsections": [{"section_title": "Balancing Federal and Industry Support of Research", "paragraphs": ["NIH basic research is valued as a source of new and improved treatment and prevention measures, but it may also be used as a basis for policy decisions, economic development, and potentially new commercial products. The primary rationale for a federal government role in funding basic research is that private firms do not perform enough such research relative to the needs of society. The federal government may also invest in research to advance national and economic security for the nation.", "There are competing views about what roles the federal government and private industry should play in biomedical research and development (R&D). In traditional economics terms, science\u2014especially basic science\u2014is viewed as a public good: scientific knowledge may have widespread benefits that are difficult for an individual firm to \"capture,\" and society may not produce enough of it through industry alone. In the traditional economic view, the public sector should fund basic research, while private firms will concentrate on applied research and product development. However, the line between basic and applied research is blurred. There is some concern that, given the size of federal research funding, some of the federal funding could possibly \"crowd out private-sector investment in R&D\"\u2014meaning that absent public investment, industry would fund more research. On the other hand, one 2019 economic analysis found no evidence that NIH funding crowded out private sector R&D funding. Economist Mariana Mazzucato argues that the U.S. government has played a more directive role in strategically accelerating innovation in technologies and industries through research and development, including in pharmaceuticals and biotechnologies. Mazzucato argues that federal efforts have been a driving force behind \"high risk\" innovation. Others view the public and private sector's respective roles in pharmaceutical research and development as a necessary collaboration, given the scientific complexity of current medical innovations. Academic and industry partnerships are increasingly common, with public sector institutions contributing to the early discovery phases of new medical advancements, and the private sector conducting more late-stage product development and clinical trials. The correct balance of federal and industry contributions to biomedical innovation is difficult to determine, and a source of debate.", "In recent years, both NIH and industry have shifted their allocation of R&D investments. A 2015 study showed that industry shifted from funding less basic and translational research to spending more on clinical trials. From 2004 to 2011, the pharmaceutical industry increased spending by 36% for phase 3 clinical trials (late-stage clinical trials required to prove drug safety and efficacy), while it decreased spending by 4% for preclinical research activities (prehuman research; includes basic and applied) in the same period. According to the authors, \"[t]his shift toward clinical research and development reflects increasing costs, complexity, and length of clinical trials but may also reflect a de-emphasis of early discovery efforts by the U.S. pharmaceutical industry.\" In recent years, NIH has also shifted to spending a slightly larger percentage on applied research compared to basic research\u2014in FY2017, NIH allocated 48.8% of its research budget authority for applied research (as opposed to basic research), compared to 41.2% in FY2002. Thus, NIH may be shifting to spending more on research than was previously funded by the industry.", "One analysis found that in 2015, industry accounted for 67.4% of all U.S. expenditures on medical and health research, followed by the federal government (27%) and universities (5%). Some argue that federal support of basic research not only stimulates industry spending on applied research and development (R&D) through scientific discoveries that expand industry R&D opportunities, but also stimulates industry R&D by training many of the researchers that are hired by industry. The training provided by NIH programs \"enhances the productivity and profitability of the companies' R&D investments.\" In contrast, NIH funding may indirectly affect the number of researchers available for the private sector, which can indirectly affect the salaries of these researchers. Many refer to the combination of federal and industry support for biomedical research as a \"biomedical ecosystem,\" or the \"biomedical research enterprise.\""], "subsections": []}, {"section_title": "Public-Private Partnerships", "paragraphs": ["One approach that the NIH has taken to stretch funding dollars and boost innovative research is to engage in public-private partnerships. Such partnerships include the Accelerating Medicines Partnership between the NIH, the FDA, 12 biopharmaceutical companies, and 13 nonprofit organizations to transform the way diagnostics and therapeutics are developed \"by jointly identifying and validating promising biological targets for therapeutics.\" Another partnership, the Biomarkers Consortium, aims to identify promising biomarkers for disease and treatment and includes the NIH, FDA, Centers for Medicare and Medicaid Services (CMS), the Pharmaceutical Research and Manufacturers of America (PhRMA), the Biotechnology Industry Organization (BIO), and over 30 other companies and nonprofit organizations. Public-private partnerships are facilitated by the Foundation for the National Institutes of Health (FNIH).", "Two recent controversies have invoked scrutiny of NIH's public-private partnerships. In March 2018, the New York Times published an investigative report about scientists and NIH officials who solicited funding from members of the alcohol industry to support a large clinical trial about the health benefits of moderate alcohol consumption. The industry's donations to the study would have been channeled through the FNIH. After the article was published, NIH conducted an investigation and subsequently shut down the study in June 2018. In addition, in April 2018, NIH cancelled a planned opioids research partnership with dozens of pharmaceutical companies aimed at finding new therapies for addiction and pain as a part of the Helping to End Addiction Long-term (HEAL) Initiative. The cancellation occurred after NIH faced criticism and a working group subsequently recommended to avoid \"reputational and ethical risks\" created by receiving funds from certain drug makers, who were involved in litigation for their role in the opioid crisis. NIH has continued to fund the initiative with federal dollars only, and without cash contributions from industry members.", "As a result of the controversies, members of the biomedical research community have called for the NIH to change its practices around public-private partnerships. In the Journal of the American Medical Association , two observers argued that NIH should issue standard guiding principles for public-private partnerships and should have full transparency about funding sources on all relevant webpages and materials. They also argued that NIH should limit undue influence and bias of the industry in research design and protocols. Another observer argued that NIH should broadly limit industry involvement in research because of the subtle ways industry may influence research\u2014by funding certain types of studies or researchers that may favor their industry. In a December 2018 New York Times editorial, one medical researcher argued that while industry bias in scientific research is important to address, many forms of bias exist in science and therefore advocated for \"open science,\" where researchers' methods, data, funding, and affiliations are maximally transparent. At an August 2018 Senate hearing, NIH Director Francis Collins defended NIH's use of public-private partnerships: \"It brings around the same table scientists from both public and private sectors who design together what the research ought to be, building on the strengths of both groups and it advances the cause of science more rapidly than might otherwise have been.\" He noted, however, that NIH should be careful when the funder has a \"vested interest in a particular outcome of the study.\"", "The FNIH is small in the context of NIH's large portfolio. In FY2017, the total revenues for FNIH were $64 million, including in-kind contributions. Federal funding of over $30 billion per year therefore dwarfs private contributions to the FNIH. However, private sector funding and influence has increased in the larger biomedical research context. A study found that from 1988 to 2008, the proportion of industry-funded studies in three prominent American medical journals had doubled, from 17% to 40% of all studies. Moving forward, NIH may continue to define its relationship with the private sector in advancing biomedical research."], "subsections": []}, {"section_title": "Publicly Funded Research and Pharmaceutical Drug Development", "paragraphs": ["NIH is involved, both directly and indirectly, in pharmaceutical drug development. NIH funding directly contributes to pharmaceutical development when NIH-funded scientists develop a chemical compound or other invention that is patented and then licensed to the pharmaceutical industry. NIH also funds a limited amount of clinical research on new or existing pharmaceuticals to assess drug safety and effectiveness for FDA approval. Since over 50% of NIH funding supports basic research, NIH funded research is, to a greater extent, indirectly involved\u2014by generating scientific knowledge and innovations that aid in pharmaceutical development. For example, important basic advances in research, such as recombinant DNA, can lead to the development of whole new classes of drugs. NIH also supports the education and training of biomedical scientists, some of whom then work for the pharmaceutical industry. It is therefore difficult to quantify and assign credit for the role of NIH funding in the development of a given drug.", "Drugs with a patent held by NIH or NIH-funded researchers represent a small portion of all FDA-approved drugs. An invention may be patented if it is \"any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof\" that is novel, useful, and nonobvious, and the inventor is the first person to file a patent application. NIH-funded researchers may discover drug candidates that are then patented by or licensed to the pharmaceutical industry. According to a 2011 study by Sampat and Lichtenberg, 9% of the new drugs (i.e., new molecular entities) approved by the FDA from 1988 to 2005 were based on a patent held by either a government agency or a nongovernmental institution that had received government support. NIH makes up a large portion of all government funding for medical research in the United States; therefore many of the drugs in the Sampat and Lichtenberg study were likely developed with NIH funding (although the authors did not specify whether NIH funded the research). However, in 2012, Rai and Sampat noted that federal funding can go unreported on patent applications, despite requirements to report such information. Therefore more drugs may have been developed with federal funding than is accounted for through patent information. ", "A study by Ashley J. Stevens et al. published in 2011 explored the contribution of publicly funded research to the discovery of new drugs. The Stevens study found that of the 1,541 drugs approved by FDA from 1990 through 2007, 143, or 9.3%, resulted from work conducted in public sector research institutions, including all universities, research hospitals, nonprofit research institutes, and federal laboratories in the United States. Of the 1,541 total drug applications, FDA granted priority review to 348 applications, and 66 of these (19%) resulted from publicly funded research. The authors stated that \"viewed from another perspective, 46.2% of the new-drug applications from PSRIs [public-sector research institutions] received priority reviews, as compared with 20.0% of applications that were based purely on private-sector research, an increase by a factor of 2.3.\" An FDA designation of priority review is for \"the evaluation of applications for drugs that, if approved, would be significant improvements in the safety or effectiveness of the treatment, diagnosis, or prevention of serious conditions when compared to standard applications.\" According to the authors, their data \"suggest that PSRIs tend to discover drugs that are expected to have a disproportionately important clinical effect.\"", "Some studies have focused on the public sector's role in developing the most innovative drugs. A 2015 study focused solely on the public sector's role in \"transformative\" drug development from 1984 to 2009. The researchers defined a transformative drug as both innovative and having a groundbreaking effect on patient care. They identified transformative drugs by surveying physicians from the top 30 U.S. academic medical centers. The researchers then focused on 21 transformative drugs and 5 drug classes and followed their development history through FDA documentation and interviews with scientists and drug developers. They found that most of these transformative drugs originated in academic and/or publicly funded institutions that conceptualized therapeutic approaches through basic research, and were then further developed by industry partners for clinical testing. Another study analyzing case histories of the same set of transformative drugs, published in 2016, concluded that only 4 out of 26 transformative drugs identified were developed by one sector alone\u2014either public or private. Although the public sector conducted most of the basic science activities to develop the drugs, the private sector accounted for most of the drug development activities in bringing the drugs to market. The authors estimated that total NIH funding would need to increase by 2.5 times to maintain the current level of drug development without industry support. However, the authors did not appear to account for potential revenues to NIH if the agency produced the drugs. ", "Rather than directly leading to a new drug, NIH-funded researchers are more often indirectly involved in drug development by producing scientific research and innovations that contribute to the knowledge base and available methods for the pharmaceutical industry. For instance, the methodology used by the Stevens et al. 2011 study \"excluded the role of PSRIs in the development of platform technologies that have contributed to the development of whole new classes of drugs.\" These platform technologies enabled the development of many of the products approved by FDA during the period evaluated in the study. The platform technologies were excluded \"because the PSRI scientists who developed the platforms generally did not use them to develop specific drug candidates.\" For example, the following platform technologies were developed with public funds and were excluded from the study:", "recombinant DNA technology (Cohen-Boyer patents); bacterial production methods for recombinant DNA (Riggs-Itakura patents); production and chimerization methods for antibodies (Cabilly patents); methods to produce glycosylated recombinant proteins in mammalian cells (Axel patents); and methods of gene silencing with the use of small interfering RNAs (Mello-Fire patents).", "These platform technologies have enabled the development of entirely new classes of drugs, such as the production of synthetic insulin and growth hormones using recombinant DNA technology, and antibody drugs using Cabilly patents. Without these underlying scientific innovations, the result may have been a vastly different economic outlook for the pharmaceutical industry.", "A few studies have aimed to ascertain the total impact of NIH funding on drug development. A 2018 study by Cleary et al. on the broad impact of NIH funding on drug development found that public funding contributed to every new molecular entity (NME) approved by the FDA from 2010 to 2016. The study, which looked at peer-reviewed literature and public data on NIH grant funding, determined that funding from NIH was \"directly or indirectly associated with every one of 210 NMEs approved from 2010-2016.\" Almost a third (29%) of the publications identified were directly associated with NIH-funded projects. The analysis in this study captured basic research, in addition to applied research on NMEs. The study found that up to 20% of the NIH budget allocation from 2000 to 2016, or about $100 billion, \"was associated with published research that directly or indirectly contributed to NMEs approved from 2010-2016.\" The authors concluded that their results suggest that \"the NIH contribution to research associated with new drug approvals is greater than previously appreciated.\" A 2019 study by Azoulay et al. used a new economic method to measure the impact of NIH research funding on private industry, particularly on patenting by private-sector firms. The study determined that NIH investments in a particular research area increase subsequent private sector patenting in that area\u2014a $10 million increase in NIH funding for a research area results in 2.7 additional patents. Alternatively phrased, one private sector patent results from every two to three NIH grants. Though the authors faced difficulty measuring the economic value of such patents, they stated that, \"one rough calculation suggests that $1 dollar in NIH funding generates around $2.34 in drug sales.\"", "NIH-funded research has contributed to the development of new pharmaceutical drugs, largely by supporting and conducting the science that underpins the industry. In light of high list prices for certain branded drugs, some question whether the American public is getting an adequate return on taxpayer investment in biomedical research. Others argue that pharmaceutical drug development is an increasingly expensive endeavor, and therefore requires significant research and development contributions from both the public and private sector. NIH contributions to drug development is one component of a larger debate about the role of federal funding and policies (including health care finance, regulatory, and tax policy) in the development, price, and profitability of pharmaceutical drugs."], "subsections": []}]}, {"section_title": "Concluding Observations", "paragraphs": ["With over $39 billion in funding for FY2019, NIH is a significant contributor to the U.S. and global biomedical research enterprise. Congress may consider how to allocate funding, introduce reforms, and provide oversight to NIH in a way that maximizes benefits to taxpayers through science-driven improvements to health, quality of life, and medical care. NIH has well-established internal processes for allocating research funding through scientific peer review and advisory committees. Congress may consider how to oversee these internal mechanisms; address gaps, duplication, and needs in the research portfolio; and provide funding in a manner that maintains the sustainability and productivity of research. Finally, Congress may consider how to help NIH support new and early-stage scientists, maintain its role as a global leader in biomedical research, and balance the public and private sector's role in research and innovation."], "subsections": []}]}}
{"id": "R45529", "title": "Trump Administration Tariff Actions (Sections 201, 232, and 301): Frequently Asked Questions", "released_date": "2019-02-22T00:00:00", "summary": ["The Constitution grants Congress the sole authority over the regulation of foreign commerce. Over the past several decades, Congress has authorized the President to adjust tariffs and other trade restrictions in certain circumstances through specific trade laws. Using these delegated authorities under three trade laws, President Trump has imposed increased tariffs, largely in the range of 10% - 25%, on a variety of U.S. imports to address concerns related to national security, injury to competing industries, and China's trade practices on forced technology transfer and intellectual property rights, among other issues. Several U.S. trade partners argue that these tariff actions violate existing U.S. commitments under multilateral and bilateral or regional trade agreements and have imposed tariffs on U.S. exports in retaliation. Congress continues to actively examine and debate these tariffs, and several bills have been introduced either to expand, limit, or revise existing authorities.", "U.S. Trade Laws Authorizing the President's Tariff Actions", "The President's recent tariff actions raise a number of significant issues for Congress. These issues include the economic effects of tariffs on firms, farmers, and workers, and the overall U.S. economy, the appropriate use of delegated authorities in line with congressional intent, and the potential implications and impact of these measures for broader U.S. trade policy, particularly with respect to the U.S. role in the global trading system.", "The products affected by the tariff increases include washing machines, solar products, steel, aluminum, and numerous imports from China. Retaliatory tariffs are affecting several U.S. exports, including agricultural products such as soybeans and pork, motor vehicles, steel, and aluminum. Using 2017 values, U.S. imports subject to the increased tariffs accounted for 12% of annual U.S. imports, while exports subject to retaliatory tariffs accounted for 8% of annual U.S. exports. A pending Section 232 investigation on motor vehicle and parts imports could result in increased tariffs on more than $360 billion of imports, and the President has stated that additional tariffs could be imposed on imports from China absent a negotiated agreement to address certain Chinese trade practices of longstanding concern to the United States.", "Although the consensus among most economists is that the tariffs are likely to have a negative effect on the U.S. economy overall, they may have both costs and benefits across different market sectors and actors. Import tariffs are effectively a tax on domestic consumption and thus increase costs for U.S. consumers and downstream industries that use products subject to tariffs. Retaliatory tariffs create disadvantages for U.S. exports in foreign markets, and can lead to fewer sales of U.S. products abroad and depressed prices. However, domestic producers who compete with affected imports can benefit by being able to charge higher prices for their goods. The Administration also argues the tariffs may have an indirect benefit if they result in tariff reductions by U.S. trading partners and lead to resolution of U.S. trade concerns affecting key sectors of the U.S. economy. Economic analyses of the tariff actions estimate a range of potential effects, but generally suggest a 0.1%-0.2% reduction in U.S. gross domestic product (GDP) growth annually owing to the actions to date. The economic effects of the President's actions are likely to be central to ongoing congressional debate on legislation to alter the President's tariff authority."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview of Recent Tariff Actions", "paragraphs": [], "subsections": [{"section_title": "What are tariffs and what are average U.S. tariff rates?", "paragraphs": ["Tariffs or duties are taxes assessed on imports of foreign goods, paid by the importer to the U.S. government, and collected by U.S. Customs and Border Protection (CBP). Current U.S. tariff rates may be found in the Harmonized Tariff Schedule (HTS) maintained by the U.S. International Trade Commission (ITC). The U.S. Constitution grants Congress the sole authority to regulate foreign commerce and therefore impose tariffs, but, through various trade laws, Congress has delegated authority to the President to modify tariffs and other trade restrictions under certain circumstances. To date, President Trump has proclaimed increased tariffs under three different authorities. The President has also proclaimed other import restrictions, including quotas and tariff-rate quotas under these authorities, but the majority of the actions are in the form of ad-valorem tariff increases.", "The United States played a prominent role in establishing the global trading system after World War II and has generally led and supported global efforts to reduce and eliminate tariffs since that time. Through both negotiated reciprocal trade agreements and unilateral action, countries around the world, including the United States, have reduced their tariff rates over the past several decades, some by considerable margins. According to the World Trade Organization (WTO), U.S. most-favored-nation (MFN) applied tariffs, the tariff rates the United States applies to members of the WTO\u2014nearly all U.S. trading partners\u2014averaged 3.4% in 2017. Globally tariff rates vary, but are also generally low. For example, the top five U.S. trading partners all have average tariff rates below 10%: the European Union (EU) (5.1%), China (9.8%), Canada (4.0%), Mexico (6.9%), and Japan (4.0%). Despite these low averages, most countries apply higher rates on a limited number of imports, often agricultural goods."], "subsections": []}, {"section_title": "What are the goals of the President's tariff actions and why are these actions of note?", "paragraphs": ["As discussed below (see \" What are Section 201, Section 232, and Section 301? \") the authorities under which President Trump has increased tariffs on certain imports allow for import restrictions to address specific concerns. Namely, these authorities allow the President to take action to temporarily protect domestic industries from a surge in fairly traded imports (Section 201), to protect against threats to national security (Section 232), and to respond to unfair trade practices by U.S. trading partners (Section 301). In addition to addressing these specific concerns, the President also states he is using the tariffs to pressure affected countries into broader trade negotiations to reduce tariff and nontariff barriers, such as the announced trade agreement negotiations with the EU and Japan, and to lower the U.S. trade deficit.", "President Trump's recently imposed tariff increases are of note because", "they are significantly higher than average U.S. tariffs (most of the increases are in the range of 10-25%), and have resulted in retaliation of a similar magnitude by some of the countries whose exports to the United States have been subject to the tariff increases; they affect approximately 12% of annual U.S. imports and 8% of U.S. exports, magnitudes that could grow if additional proposed or pending actions are carried out, or decrease if additional negotiated solutions are achieved; they represent a significant shift from recent U.S. trade policy as no President has imposed tariffs under these authorities in nearly two decades; and they have potentially significant implications for U.S. economic activity, the U.S. role in the global trading system, and future U.S. trade negotiations. "], "subsections": []}, {"section_title": "What are Section 201, Section 232, and Section 301?", "paragraphs": ["Section 201, Section 232, and Section 301 refer to U.S. trade laws that allow presidential action, based on agency investigations and other criteria. Each allows the President to restrict imports to address specific concerns. The focus of these laws generally is not to provide additional sources of revenue, but rather to alter trading patterns and address specific trade practices. The issues the laws seek to address are noted in italics below."], "subsections": []}, {"section_title": "What tariff actions has the Administration taken or proposed to date under these authorities?", "paragraphs": ["The Trump Administration has imposed import restrictions under the three authorities noted above, affecting approximately $282 billion in U.S. annual imports, based on 2017 import values ( Figure 1 ). In addition, the President has initiated Section 232 investigations on U.S. imports of motor vehicles and uranium, which could result in increased tariffs on up to $361 billion and $2 billion of U.S. imports, respectively. The President has also suggested he may increase tariffs under Section 301 authorities on an additional $267 billion of U.S. imports from China, depending on the results of ongoing bilateral talks."], "subsections": []}, {"section_title": "Which countries are affected by the tariff increases?", "paragraphs": ["The import restrictions imposed under Section 201 and Section 232 apply to U.S. imports from most countries. The Section 301 tariffs apply exclusively to U.S. imports from China."], "subsections": []}, {"section_title": "Why is China a major focus of the Administration's action?", "paragraphs": ["China is a major focus of a Section 301 investigation and related tariff measures largely due to concerns over its intellectual property rights (IPR) and forced technology transfer practices, and the size of its bilateral trade deficit with the United States. China's government policies on technology and IPR have been longstanding U.S. concerns and are cited by U.S. firms as among the most challenging issues they face in doing business in China. Moreover, China is considered to be the largest global source of IP theft. On March 22, 2018, President Trump signed a presidential memorandum on U.S. actions related to the Section 301 investigation. Described by the White House as a response to China's \"economic aggression,\" the memorandum identified four broad Chinese IP-related policies to justify U.S. action under Section 301, stating", "China uses joint venture requirements, foreign investment restrictions, and administrative review and licensing processes to force or pressure technology transfers from American companies; China uses discriminatory licensing processes to transfer technologies from U.S. companies to Chinese companies; China directs and facilitates investments and acquisitions, which generate large-scale technology transfer; and China conducts and supports cyber intrusions into U.S. computer networks to gain access to valuable business information. ", "The USTR estimated that such policies cost the U.S. economy at least $50 billion annually. During his announcement of the Section 301 action, President Trump also stated that China should reduce the bilateral trade imbalance (which at $376 billion in 2017 for goods trade was the largest U.S. bilateral trade imbalance) and afford U.S. \"reciprocal\" tariff rates."], "subsections": []}, {"section_title": "Has the Administration engaged in negotiations with other countries with regard to these measures?", "paragraphs": ["Yes. The Administration negotiated quota arrangements rather than imposing Section 232 tariffs on steel imports from Brazil and South Korea, and Section 232 tariffs on both steel and aluminum imports from Argentina. Although the steel and aluminum tariffs were not addressed in the proposed modifications to the North American Free Trade Agreement (NAFTA), renamed the U.S.-Mexico-Canada Agreement (USMCA), USTR Robert Lighthizer stated the three countries are discussing alternative measures. Side agreements to the USMCA include specific language exempting light trucks and 2.6 million passenger vehicle imports annually each from Canada and Mexico from future U.S. import restrictions under Section 232, as well as $32.4 billion and $108 billion of auto parts imports, respectively.", "The Administration also informally agreed not to move forward with additional Section 232 import duties on U.S. motor vehicle and parts imports from the European Union (EU) and Japan while broader bilateral trade negotiations are ongoing. Discussions on the steel and aluminum tariffs are also to be part of both negotiations.", "Additionally, the Administration has participated in talks with China regarding the trade practices that are the subject of the Section 301 tariffs. Negotiations in May 2018 initially appeared to resolve the trade conflict, but were ultimately unsuccessful. After further tariff actions by both sides, on December 1, 2018, Presidents Trump and Xi met at a private dinner during the G-20 Summit in Argentina. According to a White House statement, the two leaders agreed to begin negotiations immediately on \"structural changes\" with regard to IP and technology issues (related to the Section 301 case). The leaders also agreed to address agriculture and services issues. The parties set a goal of achieving an agreement in 90 days. In addition, the White House reported that President Xi agreed to make \"very substantial\" purchases of U.S. agricultural, energy, and industrial products. In exchange, President Trump agreed to suspend the planned Stage 3 Section 301 tariff rate increases that were scheduled to take effect on January 1, 2019, but stated that the increases would be implemented if no agreement was reached in 90 days (by March 1, 2019). High level talks continue, and on January 30-31, 2019, Chinese Vice Premier Liu met with President Trump and other U.S. officials, during which China pledged to purchase 5 million metric tons of U.S. soybeans. On January 31, President Trump indicated that a final resolution of the trade dispute would not be achieved until he met with President Xi. Reports suggest the trade talks may be extended beyond the March deadline.", "President Trump has made clear that the Administration is using these various import restrictions as a tool to get countries to negotiate on other issues. At the announcement of the proposed USMCA, the President stated \"without tariffs, we wouldn't be talking about a deal, just for those babies out there that keep talking about tariffs. That includes Congress\u2014'Oh, please don't charge tariffs.' Without tariffs, you wouldn't be standing here.\"", "The United States has also engaged or will engage in consultations at the WTO with some trading partners affected by the tariffs. Such consultations are a required first step in dispute settlement proceedings, which U.S. trading parties and the United States in turn, have initiated in response to the U.S. actions and trading partner retaliations. (See \" What dispute-settlement actions have U.S. trading partners taken? \" and \" What dispute-settlement actions has the United States taken? \")"], "subsections": []}, {"section_title": "Have U.S. trading partners taken or proposed retaliatory trade actions to date?", "paragraphs": ["Yes. Some U.S. trading partners subject to the additional U.S. import restrictions have taken or announced proposed retaliations against each of the three U.S. actions. Since April 2018, a number of retaliatory tariffs have been imposed on U.S. goods accounting for $126 billion of U.S. annual exports, using 2017 export values ( Figure 2 )."], "subsections": []}, {"section_title": "Has Congress responded to the Administration's tariff actions?", "paragraphs": ["Yes. The tariffs impact various stakeholders in the U.S. economy, prompting both support and concern from different Members of Congress. To date, Congress has conducted oversight hearings on the Section 232 and 301 investigations and examined the potential economic and broader policy effects of the tariffs. Many Members have expressed concern over what they view as an expansive use of the delegated tariff authority under Section 232, and some Members have introduced legislation in the 115 th and 116 th Congresses that would amend the current authority in a number of ways, including requiring a greater congressional role before tariffs may be imposed. All actions continue to be actively debated, as some other Members see a need for expanded presidential authority to ensure more reciprocal tariff treatment by U.S. trading partners and have introduced legislation in the 116 th Congress to that effect. Senator Grassley, chairman of the Senate Finance Committee announced that he intends to \"review the President's use of power under Section 232 of the Trade Act of 1962\" during the 116 th Congress. "], "subsections": []}, {"section_title": "Has the United States entered into a \"trade war\" and how does this compare to previous U.S. trade disputes?", "paragraphs": ["There is no set definition of what may constitute a trade war. Beginning in 2017, the United States and some of its major trading partners imposed escalating import restrictions, particularly tariffs, on certain traded products. Some contend that with these actions\u2014or threat thereof\u2014the United States has embarked upon a full-scale \"trade war.\" Although the scale and scope of these recent unilateral U.S. tariff increases are unprecedented in modern times, tensions in international trade relations are not uncommon. Over the last 100 years, the United States has been involved in a number of significant or \"controversial\" trade disputes. Past disputes, however, were more narrowly focused across products and trading partners, and generally temporary. Most were settled, and when unresolved, they were contained or defused through bilateral and multilateral negotiations. From the early 20 th century until this year, one dispute resulted in a worldwide tit-for-tat escalation of tariffs: the trade dispute ignited by the U.S. Tariff Act of 1930, commonly known as the \"Smoot-Hawley\" Tariff Act.", "The United States has imposed unilateral, restrictive trade measures in the past, but rarely before attempting to resolve its trade-related concerns through negotiations. The United States has, for the most part, engaged with trading partners in bilateral and multilateral fora to manage frictions over such issues and to achieve expanded market access for U.S. firms and farms and their workers. In particular, the United States has generally sought dispute resolution through the multilateral forum provided by the General Agreement on Tariffs and Trade (GATT) and its successor, the WTO. As part of the dispute settlement process, WTO members may seek authorization to retaliate if trading partners maintain measures determined to be inconsistent with WTO rules."], "subsections": []}, {"section_title": "When was the last time a President acted under these laws?24", "paragraphs": ["Presidential action under these trade laws has varied since Congress enacted them in the 1960s and 1970s, but since 2002 past Presidents generally declined to impose trade restrictions under these laws. The use of Sections 201 and 301, which address some issues also covered by trade rules established at the WTO, has decreased since the creation of that institution in 1995 and its dispute-settlement system, considered more rigorous and effective than the dispute-settlement system under its predecessor, the GATT. The use of Section 232, which focuses on national security concerns and was created during the Cold War, has also declined and has been infrequently used over several decades."], "subsections": []}, {"section_title": "Have the tariff measures resulted in legal challenges domestically or with regard to existing international commitments?", "paragraphs": ["Yes. The President's actions have resulted in legal challenges in the U.S. domestic court system and in the dispute settlement system at the WTO. Specifically, the Section 232 actions on steel and aluminum have been challenged in cases before the U.S. Court of International Trade. Severstal Export Gmbh, a U.S. subsidiary of a Russian steel producer, has challenged whether the Administration's actions were appropriately based on national security considerations, as required by statute. The American Institute for International Steel (AIIS), a trade association opposed to tariffs, has challenged the constitutionality of Congress' delegation of authority to the President under Section 232. Most recently, U.S. importers of Turkish steel have initiated a case arguing that the President's increase of the Section 232 steel tariffs from 25% to 50% on U.S. imports from Turkey did not have a sufficient national security rationale, did not follow statutory procedural mandates, and violates a due process law. At the WTO, U.S. trading partners have initiated dispute settlement proceedings with regard to the President's actions under Section 201, Section 232, and Section 301. For more information, see the section on \" What dispute-settlement actions have U.S. trading partners taken? \""], "subsections": []}, {"section_title": "Do these actions have broader economic and policy implications?", "paragraphs": ["Many analysts are concerned that the U.S. measures threaten the rules-based global trading system that the United States helped to establish following World War II. The Trump Administration argues that the unilateral measures are justified under existing multilateral trade rules and as a response to violations of existing commitments under the WTO by other trading partners, particularly China. In contrast, U.S. trading partners contend that the Administration's unilateral actions undermine these existing commitments. They argue that the United States should make use of existing multilateral dispute settlement procedures to address concerns in the trading system rather than resorting to unilateral action. Supporters of the Administration's tariff actions argue that the tariffs and other import restrictions are a useful tool to protect domestic U.S. industries and incentivize U.S. trading partners to enter negotiations, in which they would otherwise have little interest in engaging. Some, including the Administration, also argue that the Section 301 actions address issues not adequately covered by existing WTO rules. ", "Some observers also raise concerns over the scale of the Administration's actions, which have led to import restrictions imposed on nearly all U.S. trading partners, including some close allies such as Canada, Japan, Mexico, South Korea, and the EU. These groups agree with the U.S. concerns over specific trade practices by China, but support a more targeted approach that includes cooperation between the United States and other countries that share U.S. concerns over violations to and shortcomings of the existing international trading system. While the United States is involved in multilateral discussions at various levels on potential reforms to the global trading system, specifically the WTO, some analysts argue ongoing tension resulting from the U.S. unilateral actions could hamper these efforts.", "The complex nature of international commerce, including its highly integrated global supply chains, makes difficult the accurate prediction of the effects of broad tariff actions on specific industrial sectors or individual companies. For example, the Administration imposed Section 201 safeguard tariffs on washing machines to support domestic manufacturers of washing machines, but these same domestic manufacturers now argue that subsequent Section 232 tariffs on steel and aluminum have led to increases in their input costs and caused further economic harm. U.S. domestic auto production, which the Trump Administration may seek to encourage through additional Section 232 tariffs now under investigation, is similarly negatively affected by the existing steel and aluminum tariffs. Retaliation in the form of increased tariffs on U.S. exports further complicates the economic outcome of the unilateral U.S. actions. Many companies also report that uncertainty resulting from the unpredictable nature of the U.S. and retaliatory actions has made long-term planning difficult; this may be putting a drag on U.S. and global economic activity. Others, including some domestic producers, argue that action was needed to prevent more injurious trade practices from occurring and to eventually achieve broader agreement on reducing tariff barriers and establishing new trading rules."], "subsections": []}, {"section_title": "Is further escalation and retaliation possible?", "paragraphs": ["Yes. Two pending Section 232 investigations on U.S. motor vehicle and parts imports and uranium are underway, which could lead to future import restrictions. Additionally, the scheduled increase in the tariff rate on the third tranche of Section 301 tariffs on U.S. imports from China could occur in the near future, as well as potential new tariffs on additional U.S. imports from China, absent a trade agreement to resolve the core issues that are the subject of current bilateral trade discussions.", "U.S. motor vehicle and parts imports totaled $361 billion in 2017, according to the U.S. Census Bureau. These goods are among the top U.S. imports supplied by a number of U.S. trading partners, including Canada, Mexico, Japan, South Korea, and the EU, making an increase in U.S. tariffs that applies to these countries economically significant and likely to result in retaliatory action. Canada and Mexico are currently exempt from future auto 232 tariffs for a limited amount of imports under the proposed USMCA agreement. With respect to the EU and Japan, the Administration has notified Congress of its intent to negotiate bilateral trade agreements and informally agreed to refrain from imposing new auto tariffs while those talks progress. South Korea is the only major U.S. auto supplier without a formal or informal assurance from the Trump Administration that it will be exempt from Section 232 auto tariffs, despite recently implemented modifications to the U.S.-South Korea (KORUS) free trade agreement (FTA). A delay in ratification and implementation of the proposed USMCA, or a breakdown in talks with the EU and Japan could make an escalation on this front more likely.", "As noted, President Trump has warned that he will follow through with his threat to increase Section 301 tariffs on $200 billion worth of products from China from 10% to 25% if a trade agreement is not reached by March 1, 2019, or potentially soon thereafter. He has also threatened increased tariffs on an additional $267 billion worth of imported Chinese products. China imports far less from the United States than it exports and therefore could not match U.S. tariffs on a comparable level of U.S. products, but it could increase the level of the tariffs on products that have already been impacted by retaliatory Section 301 tariffs, in addition to raising tariffs on U.S. products that have not yet been subject to retaliatory tariffs. Further, the Chinese government could take other retaliatory action, calling on its citizens to boycott the purchase of American goods and services in China, curtailing the operations of U.S. manufacturing firms in China, ordering Chinese firms to halt purchases of certain high-value U.S. products (e.g., Boeing aircraft) or restricting its citizens from traveling to, or investing in, the United States. The Chinese government could also choose to halt purchases of U.S. Treasury securities and possibly sell off some of its holdings."], "subsections": []}]}, {"section_title": "Scale and Scope of U.S. and Retaliatory Tariffs", "paragraphs": [], "subsections": [{"section_title": "What U.S. imports are included in the tariff actions?", "paragraphs": ["The Administration has imposed tariffs on U.S. goods accounting for $282 billion of U.S. annual imports, using 2017 trade values. Section 301 actions currently account for the greatest share (83%) of affected imports. U.S. annual imports of products covered under the Section 301 actions currently total $235 billion, compared with $40 billion (14%) under Section 232, and $7 billion (3%) under Section 201 ( Figure 3 ). The potential Section 232 actions on motor vehicles and uranium could cover an additional $361 billion and $2 billion, respectively in U.S. imports, depending on the countries and products included.", "The scope of U.S. imports affected vary across the three different actions. Section 201 actions cover U.S. imports of washers, washing machine parts, and solar cells and modules. Section 232 actions cover U.S. imports of steel and aluminum products. Section 301 actions cover a broad range of U.S. imports from China. To date, the Administration has imposed increased tariffs under Section 301 on nearly 7,000 products at the 8-digit harmonized tariff schedule (HTS) level. Figure 4 below lists the top 15 products subject to the Section 301 import tariffs classified according to 5-digit U.S. end-use import codes. The major categories are telecommunications equipment, computer accessories, furniture, and vehicle parts."], "subsections": []}, {"section_title": "What U.S. exports face retaliatory tariff measures?", "paragraphs": ["To date, U.S. trading partners have retaliated against U.S. Section 232 and Section 301 actions. China, Japan, and South Korea have also announced planned retaliation to U.S. Section 201 actions, but in line with WTO commitments on safeguard retaliations, they are not to be imposed until 2021. The total actions to date affect approximately $126 billion of annual U.S. exports, using 2017 trade values.", "The retaliations against U.S. Section 232 actions affect U.S. exports to six trade partners: Canada, Mexico, the EU, China, Turkey, and Russia. The retaliation is similar to the U.S. actions both in terms of the tariff rates (most are in the range of 10%-25%) and the products covered (steel or aluminum are among the top products targeted). Other major products targeted include food preparations and agricultural products, yachts, motorcycles, whiskies, and some heavy machinery ( Figure 5 ). In total, approximately $25 billion of U.S. annual exports are potentially affected by trade partner retaliations against the U.S. Section 232 actions.", "Retaliatory tariffs imposed by China in response to U.S. Section 301 actions affect approximately $101 billion of U.S. annual exports, accounting for about 80% of U.S. exports subject to retaliatory tariffs currently in effect ( Figure 6 ). Like the retaliation in response to U.S. Section 232 actions, agricultural products are a main target. Soybeans, which accounted for $14 billion of U.S. exports to China in 2017, are the top overall export affected. Motor vehicles were the second-largest category of exports under the Section 301 retaliation, but these retaliatory tariffs have been temporarily suspended as part of the recent efforts at bilateral U.S.-China negotiations to resolve the trade conflict. The Chinese retaliatory tariffs, like the U.S. Section 301 tariffs, range from 10%-25% and cover thousands of tariff lines."], "subsections": []}, {"section_title": "How do the U.S. tariff actions and subsequent retaliation compare?", "paragraphs": ["U.S. and retaliatory tariffs differ in both scale and scope of products covered. The United States has placed increased tariffs on products accounting for approximately $282 billion of annual U.S. imports, while retaliatory tariffs cover approximately $126 billion of annual U.S. exports, using 2017 trade values. China, which is subject to the largest share of new U.S. tariffs and has imposed the largest share of new retaliatory tariffs, imports far less from the United States than the United States imports from China, limiting the amount of retaliatory tariffs China can impose on U.S. exports. (See discussion on \" Is further escalation and retaliation possible? \")", "In terms of the products covered, the largest categories of U.S. imports affected by the tariffs are capital goods and industrial supplies ( Figure 7 ). This suggests that, to date, U.S. tariffs are concentrated on products primarily used as inputs in the production of other goods rather than on final consumption goods; therefore the effects of the tariffs may be most pronounced in increased costs for U.S. producers. Among U.S. exports, food and beverages is the second-largest category of goods facing retaliatory tariffs, suggesting that U.S. agriculture producers are among the groups most negatively affected by the retaliatory actions."], "subsections": []}, {"section_title": "What share of annual U.S. trade is affected or potentially affected by the U.S. and retaliatory actions?", "paragraphs": ["As a share of overall U.S. trade, approximately 12% of annual U.S. goods imports ($282 billion of $2,342 billion total imports) are subject to increased U.S. tariffs under the Trump Administration's actions ( Figure 8 ). Approximately 8% of annual U.S. goods exports ($126 billion of $1,546 billion total exports) are subject to increased tariffs under partner country retaliatory actions. If the United States moves forward with additional tariffs under the two pending Section 232 investigations on U.S. imports of motor vehicles/parts and uranium, the share of affected U.S. imports could increase up to nearly 30%. U.S. motor vehicle and parts imports totaled $361 billion in 2017."], "subsections": []}, {"section_title": "What factors affect the products selected for retaliation?", "paragraphs": ["A variety of factors likely go into a country's decision regarding which products to target for retaliation. Retaliatory tariffs are explicitly targeted to encourage the United States to remove its Section 232 and Section 301 tariffs, whereas the Trump Administration's enacted and proposed tariffs aim both to alter U.S. trading partners' practices more broadly, including reducing existing tariff and nontariff barriers, and to protect domestic industries. Retaliatory tariffs can have negative effects on both the exporting country (the United States) and the importing country imposing the retaliation. Therefore, retaliating countries are likely to target products that create the most pressure on the United States to change its policy while minimizing any negative effects on themselves. Some factors that may create greater pressure for U.S. policy change include (1) demand for the targeted product is price sensitive (i.e., demand is price elastic), therefore a small tariff increase will lead to a sharper decline in exports; (2) the retaliating country is a major world market for the product, in which case the exports may not be easily diverted to other markets; and (3) the producers of the targeted products in the United States (i.e., those negatively affected by the tariffs) have high levels of political influence (e.g., the product is made in congressional districts with Members on key committees). ", "Factors that would decrease the negative effects on the importer (retaliating country) include (1) other countries competitively produce the product allowing for alternate sourcing; and (2) importers can easily substitute a different product for the targeted import (e.g., substituting wheat for corn for animal feed). Retaliating countries might also seek to impose similar tariffs as those against which they are retaliating (e.g., steel and aluminum are the top products subject to retaliation in response to the Administration's Section 232 steel and aluminum tariffs). Retaliating countries may also seek to lessen the negative impacts of the tariffs on certain segments of the population (e.g., a country might target luxury goods consumed by higher income groups rather than basic food and apparel products that account for a larger share of low-income household consumption)."], "subsections": []}, {"section_title": "Once the President imposes tariffs, can the President change them?", "paragraphs": ["Yes. The President has the authority to reduce, modify, or terminate import restrictions imposed under Sections 201, 232, and 301. Certain limitations on the President's authority to modify the tariffs apply as specified in the relevant statutes. The President has adjusted several tariff increases since they were initially proclaimed. For example, the President increased the tariff on U.S. steel imports from Turkey under Section 232 from 25% to 50%. However, certain U.S. importers of Turkish steel have brought a challenge to this tariff increase at the U.S. Court of International Trade. Similarly, the President has modified actions taken under Section 301 by increasing the scope of imports from China that are subject to new tariffs. Some products have also received exemptions from the tariff measures, explained below."], "subsections": []}, {"section_title": "What exemptions are allowed from the tariffs imposed to date?", "paragraphs": [], "subsections": [{"section_title": "Section 201", "paragraphs": ["In Presidential Proclamation 9693, announcing the Section 201 action on solar products, the President gave the USTR 30 days to develop procedures for exclusion of particular products from the safeguard measure. On February 14, 2018, the USTR published a notice establishing procedures to consider requests for the exclusion of particular products. Based on that notice, the USTR received 48 product exclusion requests and 213 subsequent comments responding to these requests by the deadline, March 16, 2018. On September 19, 2018, the USTR announced a limited number of solar product exclusions, and indicated that additional requests received by the March 16, 2018 deadline remained under evaluation. ", "Canada is excluded from the additional duties on washers. Certain developing countries were excluded, provided that they account for less than 3% individually or 9% collectively of U.S. imports of solar cells or large residential washers, respectively. All other countries are covered by the Section 201 trade actions."], "subsections": []}, {"section_title": "Section 232", "paragraphs": ["Individual countries and products may be exempted from the Section 232 tariffs. "], "subsections": [{"section_title": "Country Exemptions", "paragraphs": ["According to the initial presidential proclamation, countries with which the United States has a \"security relationship\" may discuss \"alternative ways\" to address the national security threat posed by imports of steel and aluminum and gain an exemption from the tariffs. To date four countries have reached agreements with the United States exempting them from part or all of the Section 232 tariffs:", "1. South Korea agreed to an absolute annual quota for 54 separate subcategories of steel in place of the steel tariffs. South Korea did not negotiate an agreement on aluminum and has been subject to the aluminum tariffs since May 1, 2018. 2. Brazil was permanently exempted from the steel tariffs, having reached final quota agreements with the United States on steel imports. Brazil, like South Korea, did not negotiate an agreement on aluminum and has been subject to the aluminum tariffs since June 1, 2018. 3. Argentina was permanently exempted from the steel and aluminum tariffs and agreed to absolute quotas for each. 4. Australia gained a permanent exemption from the tariffs without any quantitative restrictions. "], "subsections": []}, {"section_title": "Product Exclusions", "paragraphs": ["The 232 product exclusion process is administered by the Department of Commerce's Bureau of Industry and Security (BIS). Thousands of requests have been filed to date and the exclusion process has been the subject of criticism and scrutiny by several Members of Congress and other affected stakeholders. To limit potential negative domestic impacts of the tariffs on U.S. consumers and consuming industries, Commerce published an interim final rule for how parties located in the United States may request exclusions for items that are not \"produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality.\" The rule went into effect the same day as publication to allow for immediate submissions. ", "Requesters must complete the official response form spreadsheets for each steel and aluminum exclusion and submit the forms on regulations.gov, where both requests for exclusions and objections to requests are posted. There is no time limit for submitting an exclusion request. Each requester must complete a separate application for each product to be considered for exclusion. Exclusion determinations are to be based on national security considerations, but the specific nature of these considerations remain undefined. To minimize the impact of any exclusion, the interim rule allows only \"individuals or organizations using steel articles ... in business activities ... in the United States to submit exclusion requests,\" eliminating the ability of larger umbrella groups or trade associations to submit petitions on behalf of member companies. A parallel requirement applies for aluminum requests. Any approved product exclusion will be limited to the individual or organization that submitted the specific exclusion request. Parties may also submit objections to any exclusion within 30 days after the exclusion request is posted. The review of exclusion requests and objections will not exceed 90 days. Exclusions will generally last for one year. ", "Companies and some Members of Congress have criticized the intensive, time-consuming process to submit exclusion requests, the lengthy waiting period for a response from Commerce, what some view as an arbitrary nature of acceptances and denials, and the fact that all exclusion requests to date have been rejected when a U.S. steel or aluminum producer has objected to it. (See \" Have Members of Congress and other stakeholders raised issues regarding the product exclusion process? \") In response, Commerce announced a new rule to allow companies to rebut objections to petitions. The new rule, published September 11, 2018, includes new rebuttal mechanisms, more information about the exclusion submission requirements and process, and the criteria Commerce uses in deciding whether to grant an exclusion request.", "In September, Commerce provided revised estimates of the anticipated number of exclusion requests (96,954) and objections (38,781). To streamline and increase the transparency of the process, Commerce developed an online portal for users to submit requests for exclusions, objections, rebuttals, or surrebuttals. Commerce began testing the portal in December 2018 with the goal of implementing it in early 2019."], "subsections": []}]}, {"section_title": "Section 301", "paragraphs": ["During the Section 301 notice and comment period on proposed Section 301 tariff increases, the USTR heard from a number of U.S. stakeholders who expressed opposition and/or concern about how such measures could impact their businesses, as well as U.S. consumers. In response, the USTR created a product exclusion process, whereby firms could petition for an exemption from the Section 301 tariff increases for specific imports. The USTR stated that product exclusion determinations would be made on a case-by-case basis, based on information provided by requesters that showed ", "Whether the particular product is available only from China; Whether the imposition of additional duties on the particular product would cause severe economic harm to the requester or other U.S. interests; and Whether the particular product is strategically important or related to ''Made in China 2025'' or other Chinese industrial programs.", "To date, USTR has only created this product exclusion process for the first two stages of tariff increases under Section 301. Several Members of Congress have sent letters to the USTR calling for an exclusion process for stage three tariffs as well. The joint explanatory statement to the FY2019 appropriations law ( P.L. 116-6 ), enacted February 15, 2019, directs USTR to establish a product exclusion process for stage three tariffs within 30 days."], "subsections": []}]}, {"section_title": "How many product exclusion requests have been made?57", "paragraphs": [], "subsections": []}, {"section_title": "Have Members of Congress and other stakeholders raised issues regarding the product exclusion process?", "paragraphs": ["Several Members of Congress have raised concerns about the Section 232 exclusion process. For example, in a letter to Commerce Secretary Wilbur Ross, and at a June 2018 hearing, then-Chairman of the Senate Finance Committee Chairman Orrin Hatch and Ranking Member Ron Wyden urged improvements to the product exclusion procedures on the basis that the detailed data required placed an undue burden on petitioners and objectors. They also suggested that the process appeared to bar small businesses from relying on trade associations to consolidate data and make submissions on behalf of multiple businesses. The letter further stated that Commerce had not instituted a clear process for protecting business proprietary information. In a follow-up letter to the Secretary of Commerce in December, Senators Hatch and Wyden recognized that some improvements had been made to the exclusion process but identified further issues raised by stakeholders and U.S. businesses. They asked Commerce to address the concerns by adhering to the published timelines for reviewing requests and making specific changes to how the agency handles requests with technical defects.", "Some Members have used multiple channels to continue to raise issues. A bipartisan group of House Members articulated concerns about the speed of the review process and the significant burden it places on manufacturers, especially small businesses. The Members' letter included specific recommendations, such as allowing for broader product ranges to be included in a single request, allowing trade associations to petition, grandfathering existing contracts to avoid disruptions, and regularly reviewing the tariffs' effects and sunsetting them if they have a \"significant negative impact.\" In September 2018, during an oversight hearing, multiple Senators raised concerns directly to the Assistant Secretary for Export Administration, Bureau of Industry and Security at Commerce, about agency management of the Section 232 exclusion process, including staffing and funding levels, and the need for greater transparency, among other issues.", "Some Members have questioned the Administration's processes and ability to pick winners and losers through granting or denying exclusion requests. On August 9, 2018, Senator Ron Johnson requested that Commerce provide specific statistics and information on the exclusion requests and process and provide a briefing to the Committee on Homeland Security and Governmental Affairs. Senator Elizabeth Warren requested that the Commerce Inspector General investigate the implementation of the exclusion process, including a review of the processes and procedures Commerce has established, how they are being followed, and if exclusion decisions are made on a transparent, individual basis, free from political interference. She also requested evidence that the exclusions granted meet Commerce's stated goal of \"protecting national security while also minimizing undue impact on downstream American industries,\" as well as evidence that the exclusions granted to date strengthen the national security of the United States. In response to a formal request by Senators Pat Toomey and Tom Carper, the Government Accountability Office (GAO) announced on December 12, 2018, it will investigate the Section 232 product exclusion process in early 2019. Congress authorized additional funds for the Section 232 product exclusion process in the FY2019 appropriations law ( P.L. 116-6 ), and in the accompanying joint explanatory statement, stipulated that Commerce provide quarterly reports to Congress on its administration of the process.", "The Section 301 exclusion process managed by USTR and effective for the first two tranches of Section 301 tariffs has not attracted the same level of attention from Congress as the Section 232 exclusion process. A bipartisan group of more than 160 Representatives, however, have urged the Administration to allow product exclusions on the third and largest tranche of Section 301 tariffs, and the joint explanatory statement to P.L. 116-6 , directs USTR to establish such an exclusion process within 30 days of the law's enactment."], "subsections": []}]}, {"section_title": "Economic Implications of Tariff Actions", "paragraphs": [], "subsections": [{"section_title": "What are the general economic dynamics of a tariff increase and who are the economic stakeholders potentially affected?", "paragraphs": ["Changes in tariffs affect economic activity directly by influencing the price of imported goods and indirectly through changes in exchange rates and real incomes. The extent of the price change and its impact on trade flows, employment, and production in the United States and abroad depend on resource constraints and how various economic actors (foreign producers of the goods subject to the tariffs, producers of domestic substitutes, producers in downstream industries, and consumers) respond as the effects of the increased tariffs reverberate throughout the economy. Retaliatory tariffs, which U.S. trading partners have imposed in response to U.S. Section 232 and Section 301 tariffs, also affect U.S. exporters. The following outcomes (summarized in Table 1 ) are generally expected at the level of individual firms and consumers:", "U.S. consumers: Higher tariff rates generally lead to price increases for consumers of the goods subject to the tariffs and for consumers of downstream products as input costs rise. Higher prices in turn lead to decreased consumption depending on consumers' price sensitivity for a particular product. As one example, the monthly price of washing machines in the United States, which are currently subject to tariff increases under Section 201, has increased by as much as 12% compared to January 2018 before the tariffs became effective ( Figure 9 ). U.S. producers of domestic substitutes: U.S. producers competing with the imported goods subject to the tariffs (e.g., domestic steel and aluminum producers) may benefit to the degree they are able to charge higher prices for their domestic goods. However, in the short run, U.S. producers' ability to increase production may be limited. A broad index of U.S. steel producer prices was up 14% in December relative to March, when the Section 232 tariffs first took effect. A similar price indicator for aluminum refining and primary aluminum production shows more volatile prices, with the index down 6.2% between March 2018 and December 2018. U.S. producers in downstream industries: U.S. producers using goods subject to the additional tariffs as inputs may be harmed because the tariffs may cause their costs to increase. U.S. motor vehicle producers may be among the industries most hurt since they face: (1) higher input costs for steel; (2) tariffs on parts accounting for $20 billion of annual imports; and (3) retaliatory tariffs on assembled motor vehicle exports to China accounting for $13 billion of annual exports ( Figure 10 ). ", "U.S. exporters subject to retaliatory tariffs: U.S. exporters facing retaliatory tariffs may be at a price disadvantage in export markets relative to competitors from other countries, which may decrease demand for U.S. exports to those markets. Since Section 232 retaliatory tariffs took effect in the EU, Canada, and Mexico in July, U.S. average monthly exports of the products subject to retaliation have been below their pre-tariff monthly 2018 average by 37%, 23%, and 10%, respectively ( Figure 11 ). China purchases such a large share of certain U.S. agricultural exports\u2014China accounted for 57% of all U.S. soybean exports in 2017\u2014its retaliatory tariffs and the subsequent decline in export sales may have contributed to depressed U.S. prices for some commodities. Foreign producers of the goods subject to the tariffs: Foreign producers can also be affected by tariff increases if consumer demand falls in response to rising prices. In some instances, typically when demand is very price sensitive, or highly elastic, foreign producers may choose to lower their prices and absorb a portion of the tariff increase. The degree to which foreign producers change their prices in response to tariff changes is known as the tariff pass-through rate. Over a longer time horizon, production may shift to other countries to avoid the increased tariffs imposed on products manufactured in the countries affected.", "In addition to these microeconomic effects, tariffs can also affect macroeconomic variables. With regard to the value of the U.S. dollar, as demand for foreign goods may fall in response to higher tariffs, U.S. demand for foreign currency may also fall, putting upward pressure on the relative exchange value of the dollar. This in turn would reduce demand for U.S. exports and increase demand for foreign imports, partly offsetting the effects of the tariffs. Tariffs may also affect national consumption patterns, depending on how the shift to higher cost domestic substitutes affects consumers' discretionary income and therefore aggregate demand. In the current tight labor environment tariffs may have less impact on overall U.S. employment levels, but may result in some movement of workers between industries and potential industry-specific unemployment as labor demand rises in domestic industries benefitting from the tariffs and falls in industries harmed by increased input costs or retaliatory tariffs. Economists generally agree that a reallocation of resources, including capital and labor, based on price distortions such as tariffs reduces efficiency and productivity over the long run. "], "subsections": []}, {"section_title": "What do economic studies estimate as the potential impacts of the tariff actions on the U.S. economy?", "paragraphs": ["U.S. government and international institutions, think tanks, and consulting groups have prepared estimates of the potential impacts of the tariffs by projecting trade values using historical trade data and various modeling techniques ( Table 2 ). These studies have produced a range of estimates, but generally suggest a moderately negative impact. The Congressional Budget Office, for example, estimates a 0.1% decline in the annual U.S. GDP growth rate resulting from the tariffs currently in place, while the International Monetary Fund (IMF) estimates approximately a 0.2% decline in the annual U.S. GDP growth rate. Most studies show slight employment gains and production increases in U.S. industries competing with the imports subject to additional tariffs and declines in sectors facing retaliation and heavily reliant on inputs subject to additional tariffs. ", "The net estimated effects are relatively modest, because approximately 10.5% of U.S. annual trade (12% of imports and 8% of exports) is affected by the tariff actions to date and trade represents a moderate share of total U.S. economic activity (27% of U.S. GDP in 2017). However, the effects may be substantial for individual firms reliant either on imports subject to the U.S. tariffs or exports facing retaliatory measures, as well as consumers for whom the affected products account for a large share of consumption. ", "The effects could grow if U.S. tariff actions and retaliation escalates. The IMF, for example, estimates that U.S. GDP growth could fall by approximately 1% and global growth could fall by 0.8% if the United States goes forward with an additional 25% tariff on imports from China and on motor vehicle imports from a number of countries, and partner countries retaliate. For context, in 2017 U.S. GDP was $19.5 trillion, making a 1% decline equivalent to a reduction in GDP of $195 billion. Staff from the Federal Reserve Board of Governors, recently noted that \"trade policies and foreign economic developments could move in directions that have significant negative effects on U.S. economic growth.\" Part of this decline in economic growth reflects concern that the tariff escalation also creates a general environment of uncertainty. Economic research on uncertainty suggests it may lead to lower investment and generally restrain economic activity, including trade .", "These estimates, however, should be interpreted with caution because (1) they require various assumptions that can affect the predicted outcomes; (2) the extent of the U.S. tariffs and retaliation has fluctuated significantly in recent months and is subject to change; and (3) some of the studies were produced or sponsored by stakeholders advancing specific interests. Economists from the Federal Reserve Bank of Atlanta also note that because tariffs have decreased significantly over the past several decades, there is a dearth of recent empirical evidence to inform models on tariff increases."], "subsections": []}, {"section_title": "What are some potential long-term effects of escalating tariffs between countries?", "paragraphs": ["Most economists agree that the U.S. and global economies have benefitted significantly from the major reduction in global tariff rates that has taken place since the 1940s. If tariff rates were to increase for a significant period of time it could insulate domestic producers from foreign competition, and potentially lead to less efficient and competitive production. This in turn could lead to lower overall economic growth in the United States and abroad, since more closed economies are generally less dynamic, with less innovation and productivity growth. Furthermore, retaliatory tariffs are particularly damaging to U.S. exporters in foreign markets because, unlike multilateral tariffs, the retaliatory tariffs only target U.S. imports. Therefore, exporters from other countries that compete with U.S. firms are likely to be more competitive in the retaliatory markets. Recent trade agreements involving major U.S. trade partners, but not the United States, such as the new EU-Japan FTA and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP or TPP-11) agreement, which consists of the 11 countries remaining in the TPP following the U.S. withdrawal, may likely compound this competitive disadvantage for U.S. exporters. Some argue it may be difficult for U.S. exporters to regain lost export opportunities in the future once importers establish relationships with suppliers from other countries. ", "Another potential long-term effect of the tariffs is a shift in the U.S. role in international economic policymaking. While some stakeholders question the benefits of the dominant U.S. role in global rules-setting, others argue this has generally been of benefit to the United States, allowing U.S. priorities to feature prominently in existing international trade obligations. There are also concerns over the potential geopolitical aspects of tariff escalation. Some argue that the highly integrated nature of the global economy today acts as a deterrent to military conflict. Conversely, if tariff escalation creates a more fragmented global economy or imposes significant costs on a particular economy, it may lessen this deterrent. "], "subsections": []}, {"section_title": "Are there examples of U.S. producers benefitting or being harmed by the tariffs?", "paragraphs": ["In addition to studies on the potential macroeconomic effects of the tariffs, a variety of anecdotal information on the tariffs' impact on specific businesses can be found in press reports or quarterly or annual company reporting. The President's tariff actions and subsequent retaliatory tariffs are only one of many factors influencing economic conditions for U.S. companies, making it difficult to assess the tariffs' direct effects.", "In general, this anecdotal information largely conforms to the theoretical effects of the tariffs outlined in this report. Companies stating they have benefitted from the tariffs are producers competing with the imported products subject to the tariffs, while many downstream manufacturers and retailers assert they have been harmed. Many U.S. exporters subject to retaliatory tariffs also argue that these trade policy actions have negatively affected their operations. For some U.S. producers, the effects of the tariffs have been more complex, including companies that are both benefitting from higher domestic prices due to the tariffs while also being harmed by higher input costs. Companies with major overseas operations argue they have been indirectly harmed through lower sales abroad resulting from an economic slowdown in the countries subject to the Administration's tariff actions. The text box below provides selected examples of companies in each of these four broad categories."], "subsections": []}, {"section_title": "How are Section 301 tariffs affecting global supply chains?", "paragraphs": ["China plays an important role for many U.S. multinational firms that rely on global supply chains to manufacture their products. In some cases, U.S. firms source production of parts and components around the world and use China as a final point of assembly for products (e.g., Apple Corporation's iPhone), which are then largely exported. In other instances, firms import parts and components from China to use them in manufacturing products domestically. The use of global supply chains often enables firms to concentrate more of their activities on higher value-added activities. Such factors enable firms to lower costs (making them more globally competitive) and reduce prices for consumers (increasing their purchasing power), which should boost economic growth. The extensive use of global supply chains also result in U.S. imports from China containing foreign-made intermediates, including from the United States. A study by the Organization for Economic Cooperation and Development (OECD) estimated that 40.2% of the value of China's manufactured gross exports in 2011 came from foreign inputs. Many U.S. firms have argued that imposing increased tariffs on imports from China will disrupt global supply chains and could undermine the competitiveness of U.S. firms. To illustrate in a July 27, 2018, letter to USTR Robert Lighthizer, forty-nine members of the Congressional Semiconductor Caucus stated that while the signers supported the Administration's goals of improving China's practices on intellectual property rights, forced technology transfer, and innovation, they opposed using tariff increases to obtain such results:", "Tariffs on semiconductors will not impact Chinese companies since they export almost no semiconductors to the U.S. market. Instead these tariffs would harm U.S. companies and innovators. Most U.S. imports of semiconductors from China are designed and manufactured by U.S. firms, largely in the United States, then shipped to China for final assembly, test, and packaging. This step in the semiconductor manufacturing process comprises approximately 10 percent of the final value of the product and does not result in the transfer of valuable IP. Similarly, imports of finished semiconductor tools are essentially non-existent. Rather, imports of relatively low-value/low-IP components are incorporated into the high value-added tools made by the U.S. equipment makers and sold around the world."], "subsections": []}, {"section_title": "Are there estimates of economic implications at the state level?", "paragraphs": ["The U.S. Chamber of Commerce and the Brookings Institut ion have examined how the retaliatory tariffs could affect state and metropolitan economies by tallying the total exports subject to retaliation by location. The Chamber's website allows users to select a specific state for more information, while Brookings' website includes a downloadable dataset searchable by specific metropolitan area. According to Brookings, although major metropolitan areas Houston, Chicago, Los Angeles, Dallas, Seattle, and Detroit export the largest overall value of products subject to retaliatory tariffs, with over $2 billion of annual exports affected from each metropolitan area, some rural communities have a much larger share of their total exports subject to retaliation as their exports may be concentrated in certain industries.", "State-level trade data are also accessible directly from the Census Bureau at usatrade.census.gov."], "subsections": []}, {"section_title": "Are there programs to aid farmers potentially harmed by the tariffs?", "paragraphs": ["The U.S. Department of Agriculture (USDA) is making available about $12 billion in financial assistance to farmers and ranchers affected by the retaliatory tariffs in the form of direct payments, food purchases, and export promotion assistance. USDA expects that about $9.6 billion will be used for direct payments to qualifying agricultural producers of soybeans, corn, cotton, sorghum, wheat, hogs, dairy, fresh sweet cherries, and shelled almonds. Of those funds, more than three-fourths ($7.3 billion) of the payments are likely to go to soybean producers. To be eligible, a producer must have an ownership share in the commodity, be actively engaged in farming, and be in compliance with adjusted gross income restrictions and conservation provisions. Payments are capped on a per-person or per-legal-entity basis. The sign-up period to request assistance ended on February 14, 2019.", "The Administration has also created a Food Purchase and Distribution Program that is to undertake $1.2 billion in government purchases of excess food supplies. USDA has targeted an initial 29 commodities for purchase and distribution through domestic nutrition assistance programs. Purchasing orders and distribution activities are to be adjusted based on the demand by the recipient food assistance programs geographically. The smallest piece of the trade aid package is an allocation of $200 million to boost the trade promotion efforts at USDA. U.S. trade partners have reportedly raised questions over the overall U.S. aid package at WTO Agriculture Committee meetings and are closely monitoring U.S. compliance with related WTO obligations on subsidies."], "subsections": []}, {"section_title": "How will the tariff actions affect the U.S. trade balance?", "paragraphs": ["President Trump has repeatedly raised concerns over the size of the U.S. goods trade deficit (i.e., the amount by which total U.S. goods imports exceed total U.S. goods exports), including making trade deficit reduction a stated objective in new U.S. trade agreement negotiations. While tariffs are expected to reduce imports initially, they are unlikely to reduce the overall trade deficit due to at least two indirect effects that counteract the initial reduction in imports. One indirect effect is a potential change in the value of the U.S. dollar relative to foreign currencies. A reduction in imports reduces demand for foreign currency, putting upward pressure on the foreign exchange value of the U.S. dollar, thereby making U.S. exports more expensive abroad and imports less expensive in the United States. Another potential effect of U.S. import tariffs is retaliatory tariffs, which are likely to reduce demand for U.S. exports. Recent empirical research studying tariff adjustments in a panel of countries supports this theoretical framework and finds no significant evidence of tariffs improving a country's trade balance. ", "Economists generally also argue that while tariffs placed on imports from a limited number of trading partners may reduce the bilateral U.S. trade deficit with those specific countries, this is likely to be offset by an increase in the trade deficit or reduction in the trade surplus with other countries, leaving the total U.S. trade deficit largely unchanged. This is because the trade deficit generally reflects a shortfall in national saving relative to investment, which tariffs do not address.", "The U.S. goods trade deficit grew in 2018. From January to November 2018, the latest month for which trade data are available, the U.S. goods trade deficit totaled $806 billion, increasing from $731 billion for the same period in 2017. In every month except May, the goods trade deficit was larger in 2018 compared to the same month in 2017 ( Figure 12 ). This may reflect broader positive economic conditions: when the U.S. economy grows demand for both domestic and imported goods rises. It may also, in part, be a result of importers front-loading purchases of foreign goods in an attempt to avoid potentially higher tariffs in the future. Meanwhile, a trade-weighted index of the exchange value of the U.S. dollar against the currencies of a broad group of major trading partners increased by about 10% throughout 2018. The strengthening dollar counteracts the effect of the tariffs by making imports less costly in the United States and U.S. exports more costly in foreign markets."], "subsections": []}]}, {"section_title": "Presidential Trade Authorities and Congress", "paragraphs": [], "subsections": [{"section_title": "What are the steps involved in imposing increased tariffs pursuant to the current authorities?", "paragraphs": ["Through Section 201, 232, and 301, Congress has delegated to the President some of its constitutional authority to enact import restrictions, including certain tariff changes. Each of the authorities require an investigation and recommendations of appropriate actions by a key agency; the Department of Commerce and USTR have primary roles in Section 232 and 301 investigations, respectively, while the International Trade Commission (ITC), an independent agency with an equal number of Democratic and Republican commissioners, oversees Section 201 investigations."], "subsections": []}, {"section_title": "What legislation has been introduced to alter the President's current authority and how would it do so?", "paragraphs": ["Multiple proposals have been introduced in both the 115 th and 116 th Congress to amend the President's trade authorities, particularly with respect to Section 232. The majority of these proposals would expand the role of Congress in determining whether or not to impose tariffs.", "In the 116 th Congress, debate over congressional and executive powers to regulate tariffs has generated multiple proposals to limit the President's trade authorities, along with other reforms (see Table 3 ). Examples include measures that would", "1. Require congressional approval before certain Presidential trade actions would go into effect; 2. For the purposes of Section 232 investigations, explicitly define national security and related imports, and task the independent ITC with administering a product exclusion request process; 3. Transfer primary responsibility for Section 232 investigations to the Secretary of Defense from the Secretary of Commerce; 4. Provide an option for Congress to nullify Section 232 actions, by passing a joint disapproval resolution; and 5. Stall the current Section 232 investigation into auto imports. ", "In contrast to proposals to limit the President's trade authority, the White House is actively supporting a measure introduced by Representative Sean Duffy ( H.R. 764 ), that seeks to expand the President's authorities. H.R. 764 would grant the President additional authority to increase tariff rates to match the rates of foreign trading partners, on a country-by-country and product-by-product basis. ", "In the 115 th Congress, proposals to amend trade authorities varied, though most focused on potential modifications to Section 232. Some proposals sought to require additional consultations with Congress or require congressional approval or disapproval of certain trade actions. Other proposals sought to override or suspend specific trade actions by the Trump Administration. A nonbinding motion calling for a congressional role in Section 232 actions passed the Senate, but no other bills to amend the President's trade authorities passed in the 115 th Congress."], "subsections": []}]}, {"section_title": "Tariff Revenue Questions", "paragraphs": [], "subsections": [{"section_title": "What additional U.S. revenue has been collected from the tariffs?", "paragraphs": ["U.S. Customs and Border Protection (CBP) assesses and collects duties on U.S. imports, including the additional duties imposed as a result of the President's tariff actions. According to information provided by CBP, the following revenue was assessed from the additional duties imposed by the President's tariff actions as of February 21, 2019 (note the tariffs were imposed at different times during 2018 and therefore the collected revenue does not represent a full calendar year):"], "subsections": []}, {"section_title": "What happens to the revenue collected from the tariffs?", "paragraphs": ["The tariffs collected are put in the general fund of the U.S. Treasury and are not allocated to a specific fund, but are available for appropriations. ", "In other more historical cases, revenue from duties on U.S. imports has been dedicated to specific uses. Examples include", "Section 32 of The Agriculture Adjustment Act provides for a permanent annual fiscal year appropriation to the U.S. Department of Agriculture (USDA) equal to 30% of \"the gross receipts from [all] duties collected under the customs laws\" during the calendar year preceding the beginning of the fiscal year for which they were appropriated. Section 203 of the Emergency Wetlands Resources Act of 1985 requires that quarterly payments of an amount equal to the amount of all import duties collected on arms and ammunition (HTSUS chapter 93) be used to partially fund a Migratory Bird Conservation Fund (MBCF), administered by the Department of the Interior. Section 3 of the Recreational Boating Safety and Facilities Act of 1980, as amended ( P.L. 96-451 ; 16 U.S.C. \u00a7 1606a), requires the Secretary of the Treasury to transfer, \"at least quarterly,\" to the Reforestation Trust Fund (RT) \"an amount equal to the sum of the tariffs received\" on imports of forest and wood articles classified under specified headings of the HTSUS, subject to a cap of $30 million each fiscal year. The Continued Dumping and Subsidy Offset Act (CDSOA) of 2000, (Title X of P.L. 106-387 ) known as the \"Byrd Amendment,\" amended existing antidumping and countervailing duty (CVD) laws by requiring that duties assessed pursuant to an AD or CVD order were to be deposited by CBP into special accounts and then distributed to \"affected parties\" (defined as a manufacturer, producer, farmer, rancher, worker representative, or association involved in or in support of an AD or CVD investigation) for certain \"qualifying expenditures\" (such as manufacturing facilities and equipment), as outlined in the act. In 2003, however, WTO dispute settlement and Appellate Body panels determined that the law violated U.S. obligations under the WTO Antidumping and Subsidies Agreements. Congress repealed CDSOA on February 8, 2006."], "subsections": []}, {"section_title": "How does additional tariff revenue compare to the U.S. national debt?", "paragraphs": ["On August 5, 2018, President Trump announced that the increased tariffs his Administration has imposed on steel, aluminum, washing machines, solar panels, and a variety of imported Chinese goods will begin to generate sufficient revenue to reduce the federal debt. The U.S. federal debt represents an accumulation of government borrowing over time, including as a result of annual budget deficits (i.e., when federal government outlays exceed revenue). In FY2018, the federal budget deficit was $779 billion and is projected by the Congressional Budget Office (CBO) to total $897 billion in FY2019, thus contributing to an increasing federal debt. The cumulative publicly held federal debt totaled $15.8 trillion at the end of FY2018, and is projected to increase to $16.6 trillion by the end of FY2019. To reduce the federal debt, the President's tariff actions would have to generate enough revenue to turn the projected budget deficit into a surplus, which could then be used to pay down the federal debt. ", "Accounting for the additional tariffs imposed by the Administration to date, CBO projects that customs duties could generate additional revenue of approximately $34 billion in FY2019, or less than 4% of the projected FY2019 budget deficit. This suggests that at current levels, the President's tariff actions may slightly reduce the annual U.S. budget deficit, but will not generate a budget surplus and therefore will not reduce the annual U.S. debt, though they may result in the debt increasing at a slightly slower rate than would otherwise occur.", "Moreover, dynamic effects of the tariffs would be likely to reduce these revenues over time as price increases resulting from the tariffs are likely to shift consumption patterns toward less expensive alternatives (i.e. goods not subject to the tariffs). If the tariffs have a negative effect on economic growth, as most economists and CBO predict, they could also result in lower tax revenues more broadly as economic activity declines. In recent history, customs duties resulting from tariffs have not been a significant source of U.S. government revenue. In FY2018, individual income taxes generated more than half (50.6%) of U.S. government revenue, while tariffs or custom duties accounted for less than 2% of total receipts."], "subsections": []}, {"section_title": "What are the economic implications of raising revenue through tariffs?", "paragraphs": ["Taxes create a distortion from market-based signals by altering the price of various economic activities. These altered prices can in turn alter economic outcomes more broadly as market actors make consumption and production decisions in response. Economists generally argue in favor of policies that minimize market distortions as much as possible, especially when they affect production and the allocation of resources. Tariffs or duties are a tax on imports, which raise the price of imports relative to domestic goods, encouraging consumption of domestic goods relative to foreign goods, and thereby potentially shifting production and diverting resources away from relatively efficient economic activities towards less efficient ones. Although there are instances in which economic theory suggests markets may not produce an optimal outcome, economists generally assert that tariffs are not the best tool to address these market failures.", "Governments, however, must collect revenue in order to fund their services. From an economist's viewpoint, the best source of revenue is one that creates the least distortion of economic activity. Tariffs are generally not viewed as the least distortionary tax. A potential benefit of tariffs as a source of revenue for some countries is the relative simplicity of their collection, which may explain why they remain significant as a share of government revenue in some least developed countries. Economists, however, generally urge developing countries to lessen their reliance on tariffs as a revenue source due to concerns that tariffs may lead to an inefficient allocation of resources. Until the 1910s, custom duties or tariffs were the main source of revenue for the U.S. government; since the creation of the current federal income tax system in 1913, tariff revenue has become an increasingly smaller share of the federal government's total budget receipts, accounting for less than 2% of total receipts in FY2018.", "In addition to tariffs possibly distorting the allocation of resources, they may also represent a less progressive form of taxation. As with other taxes, the burden of tariffs does not fall uniformly across goods or demographic groups; instead, it falls more heavily on traded goods and the populations that purchase them. Studies generally have found that, in the United States, tariffs harm low- and middle-income households more than high-income households, in large part because lower-income households spend more\u2014as a proportion of their total expenditures\u2014on tradable goods like food and apparel."], "subsections": []}]}, {"section_title": "Relation to WTO and U.S. Trade Agreements", "paragraphs": [], "subsections": [{"section_title": "How do the Administration's unilateral tariff actions and other countries' retaliatory actions relate to existing commitments at the WTO and in bilateral and regional trade agreements?", "paragraphs": ["Through multilateral (WTO) and bilateral and regional trade (FTA) agreements, the United States and its trading partners have committed not to raise tariffs above certain levels with limited exceptions. These exceptions include specific tariffs in response to unfairly traded goods that may cause or threaten to cause material injury, such as imports dumped on U.S. markets at below-production prices (anti-dumping duties) or imports benefitting from government subsidies (countervailing duties) as well as time-limited safeguard actions when a surge in fairly traded imports injures or threatens to injure a domestic industry. U.S. trade agreements also generally include broad exceptions for actions deemed necessary for \"essential security interests.\" The United States argues that its recent tariff actions are allowed under WTO and FTA rules, while U.S. trading partners allege the U.S. actions are inconsistent with these rules and have responded with retaliatory tariffs and initiated dispute settlement actions to resolve their concerns. The United States meanwhile alleges that these retaliatory tariffs are likewise inconsistent with WTO and FTA rules and has similarly initiated WTO dispute settlement procedures in response."], "subsections": []}, {"section_title": "What dispute-settlement actions have U.S. trading partners taken?", "paragraphs": ["Several countries allege that U.S. actions are inconsistent with WTO rules and have initiated complaints under the WTO dispute settlement system, over tariffs imposed under Section 201 (safeguards), Section 232 (national security), and Section 301 (\"unfair\" trading practices) ( Table 4 ). The first step in the dispute settlement process is to request consultations, which provides WTO parties the opportunity to discuss the complaint and seek to reach a negotiated resolution without proceeding to litigation. If consultations fail to resolve the dispute (or if a party denies the request for consultations), the complainant country may request adjudication of the dispute by a WTO panel. The panel issues a ruling on whether the offending measure is consistent with the relevant provisions under WTO agreements; panel decisions can be appealed."], "subsections": []}, {"section_title": "What dispute-settlement actions has the United States taken?", "paragraphs": ["On July 16, 2018, the United States filed its own WTO complaints over the retaliatory tariffs imposed by five countries (Canada, China, the EU, Mexico, and Turkey) in response to U.S. tariffs on steel and aluminum imports under Section 232. In late August, the United States filed a similar case against Russia. The United States has invoked the so-called national security exception in GATT Article XXI in defense of the tariffs, stating that the tariffs are not safeguards as claimed by the other WTO members in their consultation requests. As of the end of January 2019, all of the disputes are in the panel phase ( Table 5 )."], "subsections": []}, {"section_title": "Do the Administration's tariff actions potentially affect ongoing or proposed U.S. trade agreement negotiations?", "paragraphs": ["The Administration's tariff actions have likely affected U.S. trade agreement negotiations in a number of ways. On one hand, existing and threatened tariffs may have adverse economic implications for certain U.S. trading partners (e.g., new motor vehicle tariffs on the EU and Japan) and may have encouraged those countries to enter negotiations with the United States to remove this threat of new tariffs as part of broader FTA negotiations. The tariffs, however, may have created a more contentious and unpredictable environment for U.S. trade agreement negotiations, since trade agreement partners may be concerned new tariffs could be imposed after they have entered into new agreements with the United States. Perhaps as a result, the Administration has begun negotiating specific language in its trade agreements regarding exemptions from new potential tariffs. For example, the proposed USMCA (renegotiated NAFTA) provides a specific exemption from potential new Section 232 motor vehicle tariffs for a limited amount of auto trade among the parties. Other countries may seek similar assurances in future U.S. FTA negotiations, including the proposed U.S. FTA negotiations with the EU, Japan, and the United Kingdom. Such language is unprecedented in U.S. FTAs. Concerns over the Section 232 steel and aluminum tariffs, which were not addressed in the USCMA, may also affect congressional approval of the renegotiated agreement."], "subsections": []}, {"section_title": "Why have some observers raised concerns over the potential impact of the Administration's actions on the global trading system?", "paragraphs": ["The United States was a chief architect of the post-World War II global trading system, including the WTO's dispute settlement mechanism. Critics have expressed concerns that the unilateral tariff actions will cause the United States to lose its standing as the predominant global leader of an open and rules-based trading system and chief supporter of more liberalized trade. With regard to the Section 301 actions, China, in particular, may see this shift in U.S. approach as an opportunity to take a more prominent role in setting global trade rules and standards that benefit or promote its interests and that may undermine those of the United States. China's media increasingly touts its economic system as a model for other countries to follow. In addition, U.S. Section 301 tariffs could harm a number of economies that depend on trade with China, either directly or as part of global supply chains, thus damaging relations with the United States.", "Retaliatory actions may also heighten concerns over the potential strain the Section 232 tariffs place on the international trading system. Many U.S. trading partners view the Section 232 actions as protectionist and in violation of U.S. commitments at the WTO and in U.S. FTAs, while the Trump Administration views the actions within its rights under those same commitments. Others have followed suit with retaliatory actions, which may violate their WTO commitments. If the dispute settlement process in those agreements cannot satisfactorily resolve this conflict, it could lead to further unilateral actions and a tit-for-tat process of increasing retaliation. This potential strain comes at a time when the United States has called for broader reforms of the WTO dispute settlement process, specifically with regard to the appellate body mechanism."], "subsections": []}]}, {"section_title": "Additional Sources of Information", "paragraphs": [], "subsections": [{"section_title": "What other CRS products provide further information on these issues?", "paragraphs": [], "subsections": []}, {"section_title": "What official sources of information are publicly available regarding the U.S. and retaliatory tariff actions?", "paragraphs": ["Official sources of information regarding the U.S. tariff actions are publicly available through the government agencies responsible for investigating imports or enforcing tariff laws. The following resources include embedded links to agency documents as well as footnotes with official links. "], "subsections": [{"section_title": "The Department of Commerce (Section 232 Investigations)", "paragraphs": ["The Department of Commerce is the agency responsible for investigating Section 232 cases. Commerce's Bureau of Industry and Security (BIS) has published investigation reports and relevant FAQs on its website. Notices and submitted public comments are available in the Federal Register and on Regulations.gov .", "Final Investigation Reports on Section 232 Investigations (1981-2018) Compilation of BIS documents related to the steel and aluminum investigations and imposed tariffs FAQ on Product Exclusions for Section 232 Steel and Aluminum Tariffs Find Objections, Rebuttals, and Surrebuttals for Section 232 Product Exclusion Requests Commerce has published Federal Register notices announcing investigations, requesting public comment, and outline product exclusion procedures. Commerce has solicited and published public comments and product exclusion requests through Regulations.gov. The following dockets compile comments and related documents: Aluminum (Docket: BIS-2018-0002 ) Steel (Docket: BIS-2018-0006 ) Auto and auto parts (Docket: DOC-2018-0002 ) Uranium (Docket: BIS-2018-0011 )"], "subsections": []}, {"section_title": "U.S. International Trade Commission (ITC) (Section 201 Investigations)", "paragraphs": ["ITC, the agency responsible for investigating Section 201 cases, has compiled lists of relevant documents concerning the investigations into imports of solar panels and washing machines . These resources include investigation documents, final reports by the Commission, and the primary Federal Register notices. ITC also maintains the U.S. Harmonized Tariff Schedule (HTS), which provides tariff rates for all merchandise imported into the United States. The tariff actions currently imposed under Section 201, Section 232, and Section 301 are noted within Chapter 99 of the HTS, which documents temporary modifications to the tariff schedule.", "ITC documents on safeguard investigation into solar panels ITC documents on safeguard investigation into washing machinesThe U.S. Harmonized Tariff Schedule (HTS) : Chapter 99 "], "subsections": []}, {"section_title": "Office of the U.S. Trade Representative (USTR) (Section 301 Investigations)", "paragraphs": ["USTR , the agency responsible for investigating Section 301 cases, has compiled relevant documents about the Section 301 tariffs against Chin ese intellectual property practices on its website. The following USTR resources include the official notices, hearing transcripts, final lists of products subject to additional tariffs, and information on product exclusions. ", "Findings of the Investigation into China's Acts, Policy, and Practices (March 22, 2018) Section 301 Investigations and Related Documents Section 301 Hearings into Proposed Tariffs Section 301: How to Request an Exclusion USTR has solicited and published public comments and product exclusion requests on Regulations.gov . The following dockets compile comments on proposed regulations and related documents, by trade action: Stage 1 Tariffs Notice and comments ( Docket: USTR-2018-0005 )Product exclusions ( Docket: USTR-2018-0025 ) Stage 2 Tariffs Notice and comments ( Docket: USTR-2018-0018 )Product exclusions ( Docket: USTR-2018-0032 ) Stage 3 Tariffs Notice and comments ( Docket: USTR-2018-0026 )"], "subsections": []}, {"section_title": "The White House", "paragraphs": ["The President has announced these tariff actions through proclamation and presidential memorandum. Presidential documents are published in the Federal Register:", "Presidential proclamations on Section 201 (Donald J. Trump) Presidential proclamations on Section 232 (Donald J. Trump) Presidential documents on Section 301 (Donald J. Trump) Other presidential statements regarding tariff actions are posted on WhiteHouse.gov."], "subsections": []}, {"section_title": "Customs and Border Protection (CBP)", "paragraphs": ["CBP is the agency responsible for enforcing customs laws and collecting tariff revenue. The CBP website includes guidance on recent tariff actions for importers.", "Duty on Imports of Steel and Aluminum Articles under Section 232 of the Trade Expansion Act of 1962Section 301 Trade Remedies \u2013 Frequently Asked QuestionsQuota Bulletins , which track certain imports that are subject to quotas or quantitative limits."], "subsections": []}]}]}]}}
{"id": "R43568", "title": "Corporate Expatriation, Inversions, and Mergers: Tax Issues", "released_date": "2019-03-12T00:00:00", "summary": ["News reports in the late 1990s and early 2000s drew attention to a phenomenon sometimes called corporate \"inversions\" or \"expatriations\": instances where U.S. firms reorganize their structure so that the \"parent\" element of the group is a foreign corporation rather than a corporation chartered in the United States. The main objective of these transactions was tax savings, and they involved little to no shift in actual economic activity. Bermuda and the Cayman Islands (countries with no corporate income tax) were the locations of many of the newly created parent corporations.", "These types of inversions largely ended with the enactment of the American Jobs Creation Act of 2004 (JOBS Act; P.L. 108-357), which denied the tax benefits of an inversion if the original U.S. stockholders owned 80% or more of the new firm. The act effectively ended shifts to tax havens where no real business activity took place.", "However, two avenues for inverting remained. The act allowed a firm to invert if it has substantial business operations in the country where the new parent was to be located; the regulations at one point set a 10% level of these business operations. Several inversions using the business activity test resulted in Treasury regulations in 2012 that increased the activity requirement to 25%, effectively closing off this method. Firms could also invert by merging with a foreign company if the original U.S. stockholders owned less than 80% of the new firm. If the original U.S. shareholders owned less than 60%, the firm was not considered as inverting.", "Two features made a country an attractive destination: a low corporate tax rate and a territorial tax system that did not tax foreign source income. The U.K. joined countries such as Ireland, Switzerland, and Canada as targets for inverting when it adopted a territorial tax in 2009. At the same time, the U.K. also lowered its rate (from 25% to 20% by 2015). Inverted firms could reduce worldwide taxes by stripping taxable earnings out of the new U.S. subsidiary, largely through allocating debt to that subsidiary.", "Soon after, several high-profile companies indicated an interest in merging with a non-U.S. headquartered company, including Pfizer, Chiquita, AbbVie, and Burger King. This \"second wave\" of inversions again raised concerns about an erosion of the U.S. tax base. Chiquita and AbbVie canceled their plans in the wake of 2014 Treasury regulations, but Burger King and other firms completed merger plans. Pfizer subsequently terminated its planned merger with Allergan after Treasury regulations issued in 2016. Evidence suggests that these Treasury regulations have been an important factor in subsequently decreasing these merger-related inversions.", "Two policy options had been discussed in response: a general reform of the U.S. corporate tax and specific provisions to deal with tax-motivated international mergers. In December 2017, P.L. 115-97 (popularly known as the Tax Cuts and Jobs Act) lowered the corporate tax rate as part of broader tax reform which some argued would slow the rate of inversions. Other tax reform proposals suggested that if the United States moved to a territorial tax, the incentive to invert would be eliminated. There were concerns that a territorial tax could worsen the profit-shifting that already exists among multinational firms. P.L. 115-97, while moving in some ways to a territorial tax, also instituted a number of measures aimed at combatting profit shifting, including a global minimum tax on intangible income that limited the tax benefits of a territorial tax.", "The second option is to directly target inversions. The 2017 act included several provisions that discouraged inversions. In addition, further anti-inversion provisions have been introduced, most recently H.R. 5108 and S. 2459 in the 115th Congress, to treat all firms in which former U.S. shareholders have more than 50% ownership (or in which management and control is in the United States) as U.S. firms. These bills also provided that debt could also be allocated to the U.S. member of a worldwide operation in proportion to the U.S. ownership of assets."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The U.S. corporate income tax is based on worldwide economic activity. If all of a corporation's economic activity is in the United States, then tax administration and compliance is relatively straightforward. Many corporations, however, operate in several jurisdictions, which creates complications for tax administration and compliance. Further, corporations may actively choose where and how to organize to reduce their U.S. and worldwide tax liabilities. Some of these strategies have been referred to as expatriation, inversions, and mergers. ", "This report begins with a brief discussion of relevant portions of the U.S. corporate income tax system before examining how inversions were commonly structured. The report then looks at how Congress and the Department of the Treasury have reduced the benefits of inversions. The report concludes with an examination of remaining methods for inverting and policy options available to prevent or limit these inversions.", "Achieving tax savings using an inversion became more difficult with the enactment of the American Jobs Creation Act of 2004 (JOBS Act; P.L. 108-357 ). The JOBS Act denied or restricted the tax benefits of an inversion if the owners of the new company were not substantially different from the owners of the original company. The act also allowed a firm to invert only if it had substantial business operations in the country where the new headquarters was to be located. ", "Although the 2004 legislation largely prevented the types of inversions that drew attention prior to its adoption, several companies have successfully inverted in the past few years by using the substantive business operations mechanism or merging. Treasury regulations have subsequently limited the former mechanism. ", "In spring 2014, several high-profile companies indicated an interest in merging or plans to merge with a non-U.S. firm, including Pfizer, Chiquita, and Omnicom (an advertising firm). News reports indicated that a group of Walgreens investors was also urging such a move. Although the Pfizer and Omnicon mergers and Walgreens headquarters shifts ultimately did not take place, other firms announced mergers in the late spring and early summer. A number of firms in the medical device or pharmaceuticals fields announced mergers or proposed mergers with a shift of headquarters: Medtronics, Salix, AbbVie, Mylan, and Hospira. In August 2014, concern about inversions increased with the announcement that Burger King was in talks to merge with Tim Hortons, a Canadian firm, with the merged firm's headquarters in Canada. An agreement was announced on August 26. Although Burger King is a smaller firm than AbbVie, for example, it is a household name and this proposed inversion garnered much attention. ", "In September 2014, the Treasury Department released a notice of regulatory changes that would restrict some aspects of inversions or their benefits and indicated that other actions may follow. AbbVie, Chiquita, and some other firms canceled their plans in the wake of these Treasury regulations, although new merger proposals were also announced. In November 2015, the Treasury announced additional regulatory restrictions. Although new inversions slowed significantly, others continued but in many cases have been structured to avoid the regulations by reducing ownership below 60%. Most notable of these is the proposed merger of Pfizer with Allergan in November 2015. Pfizer terminated the merger after the release of the April 4, 2016, regulations.", "This \"second wave\" of inversions again raised concerns about an erosion of the U.S. tax base. While the substantial business avenue appears to have been largely eliminated by Treasury regulations that increased the required share of activity, the option of merging with a smaller foreign company remains. U.S. firms may also merge with larger firms, although in this case the tax benefits are less likely to be key factors in the decision to merge.", "Data released by the Bureau of Economic Analysis indicated that acquisitions by foreigners, which rose substantially in 2015, fell by 15% in 2016, and by 32% in 2017. Some of the largest declines were in countries associated with inversions, such as Ireland, where acquisitions fell from $176 billion in 2015, to $35 billion in 2016, and to $7 billion in 2017. ", "In December 2017, a tax revision ( P.L. 115-97 ), often called the Tax Cuts and Jobs Act (TCJA), and subsequently referred to as the \"Act,\" made major changes to the corporate tax and the international tax rules, along with some specific revisions aimed at discouraging inversions. Although data for 2018 are not yet available, one planned inversion, by Assurant, Inc., was revised to retain the headquarters in the United States. Ohio-based Dana, Inc. announced plans to merge and move the headquarters to the U.K., although the merger would leave the U.S. shareholders with less than 60% ownership, and therefore not make them subject to anti-inversion penalties."], "subsections": []}, {"section_title": "U.S. International Tax System", "paragraphs": ["The United States uses a system that taxes both the worldwide income of U.S. corporations and the income of foreign firms earned within U.S. borders. All income earned within U.S. borders is taxed the same\u2014in the year earned and at statutory tax rates of 21% (reduced from 35% by the Act).", "Under pre-Act law, U.S. corporate income earned outside the United States was also subject to U.S. taxation, though not necessarily in the year earned. This treatment occurred because U.S. corporations could defer U.S. tax on active income earned abroad in foreign subsidiaries until it was paid, or repatriated, to the U.S. parent company as a dividend. To mitigate double taxation, tax due on repatriated income was reduced by the amount of foreign taxes already paid.", "The Act substituted a new system (Global Intangible Low-Taxed Income, or GILTI) that taxed foreign source income of U.S. subsidiaries currently but with an exemption for a deemed return of 10% on tangible assets and a deduction from the remaining income (for 50% of income through 2025 and 37.5% afterward). It allows a credit for 80% of foreign taxes. The new system also allows U.S. firms a deduction for foreign derived intangible income, or FDII, which was designed to reduce tax rates on foreign earnings from the use of intangible assets held in the United States. The deduction is 37.5% of this estimated income through 2025 and 21.875% afterward.", "Income from certain foreign sources earned by subsidiaries\u2014which generally includes passive types of income, such as interest, dividends, annuities, rents, and royalties, and is referred to as Subpart F income\u2014is generally taxed in the year it is earned and was retained by the Act. Subpart F applies only to shareholders who may be able to influence location decisions at the corporate level. These subsidiaries are referred to as controlled foreign corporations (CFCs).", "The Act also adopted the Base Erosion and Anti-Abuse tax (BEAT), an alternative minimum tax with the tax based increased by certain payments to related foreign parties. Its primary focus was to address profit shifting between foreign parents and U.S. subsidiaries, but it applies in general. Notably, it excludes payments for costs of goods sold and for costs of services under some pricing rules.", "One way of shifting profits was to locate debt in high-tax countries. Preexisting thin capitalization rules limited interest to 50% of earnings before the deduction of interest, taxes, and amortization, deprec iation, and depletion (EBITA), although firms with a debt-to-asset rate of 1.5 or less were exempt. The new law adopted much stricter thin capitalization rules to prevent firms from deducting large amounts of interest. The new law lowers the cap to 30% of profits, eliminates the exemption based on the debt-to-asset ratio and, after 2021, measures the cap as a share of profits after amortization, depreciation, and depletion deductions.", "The Act also adopted some tax provisions targeted at discouraging inversions, which are discussed subsequently."], "subsections": []}, {"section_title": "Anatomy of an Inversion", "paragraphs": ["A corporate inversion is a process by which an existing U.S. corporation changes its country of residence. After the inversion, the original U.S. corporation becomes a subsidiary of a foreign parent corporation. Corporate inversions occur through three different paths: the substantial activity test, merger with a larger foreign firm, and merger with a smaller foreign firm. Regardless of the form of the inversion, the typical result is that the new foreign parent company faces a lower home country tax rate and no tax on the company's foreign-source income. ", "The U.S. firm can use inversions to reduce taxes using various techniques. Foreign operations in the future can be formed as subsidiaries of the new foreign parent in a country with a territorial tax, so that future foreign income can be exempt from tax. Accumulated and future foreign income from the U.S. company's foreign subsidiaries (which would be taxed by the United States if paid to the parent as a dividend) may be effectively repatriated tax free by lending or otherwise investing in the related foreign firm, such as a low-interest loan to the foreign parent holding company. These borrowed funds could then be used, for example, to pay dividends to shareholders or make loans to the U.S. firm. ", "In addition, the combined firm can engage in \"earnings stripping\": reducing income in the U.S. firm by borrowing from the U.S. company and increasing interest deductions. For example, a foreign parent may lend to its U.S. subsidiary. This intercompany debt does not alter the overall company's debt, but does result in an interest expense in the United States (which reduces U.S. taxes paid) and an increased portion of company income being \"booked\" outside the United States. Royalty payments, management fees, and transfer pricing arrangements are other avenues for earnings stripping, but are thought to be of lesser importance than intercompany debt."], "subsections": [{"section_title": "Substantial Business Presence", "paragraphs": ["In this form of inversion, a U.S. corporation with substantial business activity in a foreign company creates a foreign subsidiary. The U.S. corporation and foreign subsidiary exchange stock\u2014resulting in each entity owning some of the other's stock. After the stock exchange, the new entity is a foreign corporation with a U.S. subsidiary, as the exchange is generally in proportion to the respective company valuations. As this form of inversion does not require any change in the effective control of the corporation, it is referred to as a \"naked inversion.\""], "subsections": []}, {"section_title": "U.S. Corporation Acquired by a Larger Foreign Corporation", "paragraphs": ["In this form of inversion, a U.S. corporation would like to bolster its foreign operations and, perhaps, lower its U.S. tax. To do so, the U.S. corporation merges with a larger foreign corporation, with the U.S. shareholders owning a minority share of the new merged company. This results in the effective control of the new company being outside U.S. borders.", "While this form of inversion may be driven by business considerations, tax considerations may also be part of the decision. An example of this can be seen in the following statement by the board of directors of a U.S. corporation recommending approval of a merger with a U.K. corporation. The board of directors pursued the merger in part because", "Ensco was headquartered in a jurisdiction that has a favorable tax regime and an extensive network of tax treaties, which can allow the combined company to achieve a global effective tax rate comparable to Pride's competitors. ", "In this case, a U.S. firm, Pride, merged with a U.K. firm, Ensco, and the headquarters remained in the U.K."], "subsections": []}, {"section_title": "A Smaller Foreign Corporation Acquired by a U.S. Corporation", "paragraphs": ["In this form of inversion, a U.S. corporation would like to bolster its foreign operations and lower its U.S. tax. To do so, the U.S. corporation merges with a smaller foreign corporation, with the U.S. shareholders owning a majority share of the new merged company. This merger results in the effective control of the new company staying with the shareholders of the U.S. corporations.", "While this form of inversion may be driven by business considerations, tax considerations may also be part of the decision. An example is the Eaton Cooper merger. The following is an excerpt of a U.S. corporation's (Eaton's) press release announcing the acquisition of an Irish company (Cooper), with the company headquartering in Ireland (with a 12.5% tax rate and a territorial system). ", "At the close of the transaction ... Eaton and Cooper will be combined under a new company incorporated in Ireland, where Cooper is incorporated today. The newly created company, which is expected to be called Eaton Global Corporation Plc or a variant thereof (\"New Eaton\"), will be led by Alexander M. Cutler, Eaton's current chairman and chief executive officer.", "At the close of the merger, it was expected that the shareholders of the U.S. company would control 73% of the combined company, with the shareholders of the Irish company controlling the remaining 27%. The press release notes expected tax benefits from the merger at $165 million in 2016, out of $535 million of total cost savings.", "In this case, a U.S. corporation used a merger to achieve an inversion while its shareholders retained a significant majority of shares. "], "subsections": []}]}, {"section_title": "Response to Initial Inversions: The American Jobs Creation Act", "paragraphs": ["In the late 1990s and early 2000s, news reports drew the attention of policymakers and the public to a phenomenon sometimes called corporate \"inversions\" or \"expatriations\": instances where firms that consist of multiple corporations reorganize their structure so that the \"parent\" element of the group is a foreign corporation rather than a corporation chartered in the United States. Among the more high-profile inversions were Ingersoll-Rand, Tyco, the PXRE Group, Foster Wheeler, Nabors Industries, and Coopers Industries. ", "These corporate inversions apparently involved few, if any, shifts in actual economic activity from the United States abroad, at least in the near term. In particular, inverted firms typically continued to maintain headquarters in the United States and did not systematically shift capital or employment abroad post inversion. Further, Bermuda and the Cayman Islands were the location of many of the newly created parent corporations\u2014jurisdictions that have no corporate income tax but that also do have highly developed legal, institutional, and communications infrastructures.", "A 2002 study by the U.S. Treasury Department concluded that while inversions were not new\u2014the statutory framework making them possible has long been in existence\u2014there had been a \"marked increase\" in their frequency, size, and visibility.", "Taken together, these facts suggested that tax savings were one goal of the inversion, if not the primary goal. Beyond taxes, firms engaged in the inversions cited a number of reasons for undertaking them, including creating greater \"operational flexibility,\" improved cash management, and an enhanced ability to access international capital markets.", "The 2002 Treasury report identified three main concerns about corporate inversions: erosion of the U.S. tax base, a cost advantage for foreign-controlled firms, and a reduction in perceived fairness of the tax system. These concerns, along with a growing awareness of inversion transactions, may have resulted in congressional concern and debate about how to address the issues surrounding inversions, culminating with the enactment of an anti-inversion provision (Section 7874) in the American Jobs Creation Act of 2004 (AJCA; P.L. 108-357 ).", "The AJCA adopted two alternative tax regimes applicable to inversions occurring after March 4, 2003. The AJCA treats the inverted foreign parent company as a domestic corporation if it is owned by at least 80% of the former parent's stockholders. In these cases, the AJCA would deny the firm any tax benefits of the inversion (i.e., it would continue to be taxed on the combined group's worldwide income). The second regime applies when there is at least 60% continuity of ownership but less than 80%. In this case, the new foreign parent is not taxed like a domestic corporation, but any U.S. toll taxes (taxes on gains) that apply to transfers of assets to the new entity are not permitted to be offset by foreign tax credits or net operating losses. The AJCA also exempted corporations with substantial economic activity in the foreign country from the anti-inversion provisions, but it did not define substantial business activity in the statute."], "subsections": []}, {"section_title": "Post-2004 Inversions and Treasury Regulations of 2012", "paragraphs": ["Although the 2004 act largely eliminated the generic naked inversions, two alternatives remained that allowed a firm to shift headquarters and retain control of the business: the naked inversion via the business activity exemption, and merger with a smaller company. Using the business activity route would require significant economic operations in the target country. An inversion by merger would require a large firm that would be at least 25% of the size of the U.S. firm. ", "The post-2004 approaches to inversions no longer involved countries such as Bermuda and the Cayman Islands, but larger countries with substantial economic activity such as the U.K., Canada, and Ireland. The U.K., in particular, has become a much more attractive headquarters. Because of freedom of movement rules in the European Union, the U.K. cannot have anti-inversion laws, which may have played a role in both moving to a territorial tax and lowering the corporate tax rate.", "A 2012 report in the Wall Street Journal highlighted some recent moves abroad. This report claimed 10 companies had inverted since 2009, with 6 within the past year or so. This was a small number of companies, but it is useful to look at the methods involved. The Wall Street Journal article identified by name 5 of the 10 companies that had moved abroad recently: Aon, ENSCO, Rowan, Eaton, and DE Master Blenders 1763. (The article also referred to Transocean and Weatherford International, but these were firms that had inverted before the 2004 legislation: Transocean first to the Cayman Islands, and then Switzerland, and Weatherford first to Bermuda, and then Switzerland.) The remaining firm mentioned in the Wall Street Journal article is Eaton. Eaton's move abroad was a merger; it merged with Coopers, a firm effectively operating its headquarters in the United States, but one that had inverted prior to the 2004 law change.", "An article by Bret Wells identified Aon, ENSCO, and Rowan as having inverted via the substantial business activity exemption (where the only apparent objective is tax savings). All three moved to the United Kingdom, where a recent move to a territorial tax, as well as decisions in the European Court of Justice that limited their anti-abuse rules, had made their tax system more attractive. The U.K. was also in the process of lowering its own corporate rate. Two of the firms are oil drilling firms; drilling in the North Sea might have affected their ability to use this exemption. Aon is an insurance firm.", "Wells mentions another firm, Tim Hortons, which also used a naked inversion using the substantial business activity exemption in 2009 to relocate to Canada. In doing so, the firm was returning to its origins, as it was founded in Canada. It became an American company when Wendy's acquired it in 1995, but it was subsequently spun off in 2006. DE Master Blenders 1763, like Tim Hortons, was returning to its origins as well (a Netherlands firm), as it was spun off from Sara Lee, which had acquired it in 1978.", "In response to increased use of the substantial business activity exemption, Treasury Regulations (T.D. 9592, June 12, 2012) increased the safe harbor for the substantial business activities test from 10% to 25%, effectively closing off this avenue in the future. This action could be done by regulation because the statute did not specify how the substantial business activity test was to be implemented. ", "A number of mergers have either been effectuated or were proposed: Chiquita, Actavis, and Perrigo (the latter two are pharmaceutical firms) moving to Ireland; Valeant Pharmaceuticals and Endo Health Services moving to Canada; and Liberty Global (a cable company) to the U.K. Subsequently, the new Irish firm Actavis (itself the result of two prior mergers) merged with Forest Labs. Omnicom (an advertising firm) planned a move to the U.K. (after proposed merger with a French firm, creating a Netherlands holding company, resident in the U.K. for tax purposes), but has abandoned its merger. Chiquita canceled its plans after Treasury regulations were issued in September 2014.", "Most of these firms are not household names or industry giants. Thus, perhaps none created as much interest as the attempt by pharmacy giant Pfizer to acquire AstraZeneca with a U.K. headquarters, or the urging of some stockholders of Walgreens to invert to Switzerland. Pfizer represented a significant potential loss of future tax revenue, as much as $1.4 billion per year. According to a study by Martin Sullivan, in 2005, when a temporary tax exclusion of 85% of dividends (the repatriation holiday) was in force, Pfizer repatriated $37 billion, the single largest amount of repatriations of any firm. In 2009, Pfizer repatriated $34 billion (and paid U.S. taxes on that amount) to finance the acquisition of Wyeth, but earnings abroad grew from $42 billion in 2009 (after the repatriation) to $73 billion by 2012. These earnings have not been repatriated and taxed in the United States. An inversion by Pfizer would, however, result in current shareholders paying capital gains taxes on any stock appreciation when they are converted into shares of the new company. Shares held in IRAs and 401(k)s would not typically owe this tax, but shares owned directly by individuals and in mutual funds would owe tax even if they did not sell their stock.", "Policymakers and the public remained interested in the issue of inversions through 2014. Although the initial Pfizer merger did not occur, the spate of mergers or proposed mergers in the medical device and pharmaceuticals industries continued in 2014. One example included one of the largest proposed mergers yet, AbbVie's acquisition of Shire, an Irish firm. The announcement of a proposed merger between Burger King and Tim Hortons also generated interest in the issue. As is the case with Chiquita, AbbVie canceled its plans after the issuance of Treasury regulations in September 2014, but Burger King planned to complete its merger and did so on December 12, 2014. ", "Treasury continues to regulate inversions where regulations are possible. For example, in 2014 it took action to close a loophole stemming from the coordination of two sets of regulations\u2014the \"Anti-Killer B Regulations\" and the \"Helen of Troy Anti-Inversion Regulations\"\u2014that allowed Liberty Global shareholders to avoid some capital gains taxes."], "subsections": []}, {"section_title": "Treasury Notice 2014-52, September 22, 2014", "paragraphs": ["In response to the new wave of inversions, the Treasury Department released a notice of regulatory actions that would restrict inversions and their benefits. Treasury news releases, however, indicated that legislative action is the only way to fully rein in these transactions. Following this notice, several firms announced they were canceling plans to merge, and one firm, Medtronic, announced a change in financing plans (no longer using earnings abroad to pay acquisition costs). Other firms, however, have announced inversion plans. There is no way to know how many unannounced mergers were, or will be, prevented by these regulations.", "The regulatory actions address two basic aspects of inversions. One set of changes limits the ability to access the accumulated deferred earnings of foreign subsidiaries of U.S. firms. The second regulatory action restricts certain techniques used in inversion transactions that allowed firms to qualify with less than 80% ownership. This regulation is effective for inversions that closed on or after September 22, 2014. The regulations do not prevent inversions via merger and do not address earnings stripping by shifting debt to the U.S. firm, although Treasury has indicated future action in this area. "], "subsections": [{"section_title": "Limiting the Access to Earnings of U.S. Foreign Subsidiaries", "paragraphs": ["In an inversion, the foreign subsidiaries of the original U.S. firm remain subsidiaries so that any dividends paid to the U.S. parent would be taxed. Regulations also treat other direct investments in U.S. property, such as loans to the U.S. parent, as dividends. Once a firm has inverted and the U.S. firm is now a subsidiary of a foreign parent, there are methods of accessing the earnings of overseas subsidiaries by transactions between the new foreign parent and the U.S. firm's foreign subsidiaries. The regulation is intended to address three such methods. ", "First, the regulation prevents the access to funds by, for example, a loan from the U.S. company's foreign subsidiary to the new foreign parent (called \"hopscotching\"). Before the regulation, funds of this type could have been used to pay dividends to the individual shareholders or for other purposes. Under the regulation, acquiring any obligation (such as a loan) or stock of a foreign related person is treated as U.S. property subject to tax.", "Second, the regulation addresses \"decontrolling,\" where the foreign acquiring corporation issues a note or transfer of property for stock in the U.S. firm's foreign subsidiaries. If a majority of stock is obtained, the U.S. firm's subsidiary is no longer a controlled foreign corporation (CFC) and not subject to Subpart F, which taxes currently certain passive or easily shifted income. However, even a less than majority share can allow partial access to deferred earnings without a U.S. tax. This regulation prevents this by treating acquisition of foreign subsidiary stock as acquisition of stock in the U.S. parent. ", "Third, the regulation addresses transactions where the foreign acquiring corporation sells stock of the former U.S. parent corporation to that U.S. parent corporation's CFC in exchange for property or cash. If such a transaction is structured properly, some interpretations of the old regulations would have permitted the income to avoid taxation. The new regulations would prevent that and would apply regardless of the firm's inversion status. "], "subsections": []}, {"section_title": "Addressing Techniques to Achieve Less Than 80% Ownership Requirement", "paragraphs": ["A firm can realize the tax benefits of an inversion only if the shareholders of the original U.S. firm retain, after the merger, less than 80% of the ownership in the new company. The regulation contains several provisions that limit certain techniques for achieving this goal. The avoidance techniques include inflating the foreign firm, shrinking the U.S. firm, and inverting only part of the U.S. firm.", "First, it prevents firms from reaching the less than 80% goal by inflating the size of the foreign merger partner (which must have more than 20% ownership subsequent to the merger) by use of passive assets (e.g., an interest bearing bank deposit). This notice disregards passive assets of the foreign firm if more than 50% of its value is in passive assets. (Banks and financial service companies are excluded.)", "Second, it prevents firms from shrinking the size of the U.S. firm by paying extraordinary dividends before the merger. The notice disregards this reduction in value.", "Third, it prevents an inversion of part of a U.S. company (a \"spinversion\") by spinning it off to a newly formed foreign corporation, by treating the new \"foreign\" company as a domestic corporation. "], "subsections": []}]}, {"section_title": "Inversions After Treasury Notice 2014-52 and the 2015 Treasury Regulations", "paragraphs": ["After the 2014 Treasury regulations were issued, some firms revised their plans, and the pace of inversions slowed. Some mergers were structured to avoid the anti-inversion rules and Treasury regulations, by an ownership share of less than 60%. Among what appear to be inversions is the merger of telecom firm Arris and Pace (a U.K. firm), CF Industries (fertilizer) and OCI NB (a Netherlands firm), Terex with Konecranes (a Finnish firm), and a consolidation of European Coca-Cola bottling firms (one such firm, Coca-Cola Enterprises, was a U.S. headquartered firm). Waste Connections Inc. merged with Progressive Waste Solutions Ltd (a Canadian Firm), with 70% ownership and a headquarters in Canada. Monsanto's proposal to merge with Syngenta (a Swiss firm) was called off. ", "Some mergers that did not qualify as inversions under the tax law also occurred. The most significant in size was the proposed Pfizer merger. On November 23, 2015, Pfizer announced a proposed merger with Allergan, an Irish company, and the move of its headquarters to Ireland. This merger, which would result in the largest pharmaceutical company in the world, is not covered under the anti-inversion rules because Pfizer will own 56% of the value of the new firm. Allergan itself is the product of a merger involving both stock and cash acquisition by Actavis in 2015, with former Allergen shareholders owning a minority of the new company. Thus, this merger as well was not an inversion under the tax law. Actavis, in turn, was a former U.S. firm that inverted by merger with Warner Chillcott, an Irish firm, in 2013 (where the former shareholders of the U.S. firm acquired 77% of the stock). Pfizer terminated its merger with Allergen after the April 4, 2016, regulations (discussed below). Other notable mergers not subject to anti-inversion rules were the acquisition of Salix, a pharmaceutical company, by Valeant (a Canadian company); the acquisition of Auxilium by Endo (after Auxilium backed out of an inversion with Canadian firm QLT); the merger of Cyberonics with Italy's Sorin (to be headquartered in the U.K.); and the merger of Broadcom (a chipmaker) with Avago (a Singapore firm). Information and analytics provider HIS announced a merger with Markit Ltd, a U.K. firm, to be headquartered in the U.K., but the ownership share of HIS would be less than 60% of the firm. Johnson Controls also merged with Tyco, one of the earlier inverted firms. ", "The 2015 Treasury regulations appear to have more limited consequences for inversions than the 2014 regulations did. Three regulatory changes were made by the notice. First, in the case where the foreign parent is a tax resident of a third country, stock issued by that parent to the existing foreign firm will be disregarded for purposes of the ownership requirement. That change will prevent a U.S. firm from merging with a partner and then choosing a tax friendly third country to headquarter in. The second provision would clarify the so called \"anti-stuffing\" rules, where the foreign firm's size is inflated by adding assets to that firm. The notice clarifies that this rule applies to any assets, not just passive assets. Third, the current business activity exception requires 25% of business activity to be in the foreign country where the new parent is created or organized, but does not require it to be a foreign parent. This rule requires the business activity to be in the foreign parent. It prevents inversion based on the business activity test when the foreign parent has a tax residence in another country without substantial business activities. "], "subsections": []}, {"section_title": "Treasury Regulations, April 4, 2016", "paragraphs": ["On April 4, 2016, the Treasury Department issued temporary and proposed regulations formalizing rules contained in Notices 2014-52 and 2015-79 limiting corporate tax inversions, as well as adding new rules addressing inversions and earnings-stripping transactions. In response to these new regulations, the proposed merger between Pfizer and Allergen PLC has been terminated."], "subsections": [{"section_title": "Anti-Inversion Regulations", "paragraphs": ["The April 4, 2016, Treasury regulations put in place several anti-inversion rules that target groups that have engaged in a series of inversion or acquisition transactions as well as a rule that restricts postinversion asset dilution. "], "subsections": [{"section_title": "Multiple Domestic Entity Acquisition Rule", "paragraphs": ["The temporary regulations target inversion transactions involving a new foreign parent that previously acquired one or more U.S. entities in inversions or acquisitions in which the new foreign parent issued stock. These prior acquisitions would generally increase the value of the foreign entity, enabling it to subsequently engage in an inversion transaction with a larger U.S. company while remaining below the 60% or 80% ownership thresholds. The temporary regulations disregard stock of the new foreign parent to the extent the value of such stock is attributable to its prior U.S. entity acquisitions during the prior three years. According to analysis by Americans for Tax Fairness, the implementation of this rule would have increased Pfizer's share of the merged company to roughly 70% from 56% prior to the rule. "], "subsections": []}, {"section_title": "Multiple-Step Acquisition Rule", "paragraphs": ["Similar to the multiple domestic entity acquisition rule, the multiple-step acquisition rule targets certain inversions that are structured as back-to-back foreign acquisitions. Specifically, it targets transactions that are part of a plan in which a foreign corporation acquires substantially all of the assets of a U.S. entity and, subsequent to this first acquisition, a second foreign corporation acquires substantially all of the assets of the first foreign corporation. The temporary regulations, under certain circumstances, treat each acquisition as an acquisition of a U.S. entity that may be subject to anti-inversion rules. Unlike the multiple domestic entity acquisition rule, which has a three-year look-back period, the multiple-step acquisition rule can be applied to all acquisitions that are part of the same plan regardless of time."], "subsections": []}, {"section_title": "Asset Dilution Rule", "paragraphs": ["A third rule modified existing regulations to restrict the ability of inverted companies to avoid paying tax on unrealized gains (under Section 965) through a transfer to a controlled foreign corporation (CFC) (under Section 351). This would address situations where a CFC of an inverted U.S. company engages in a postinversion exchange that could dilute a U.S. shareholder's indirect interest in the exchanged asset, allowing the U.S. shareholder to avoid U.S. tax on any realized gain in the asset that is not recognized at the time of the transfer. The rule requires a CFC of an inverted U.S. group to recognize all realized gain with respect to any such postinversion Section 351 exchange."], "subsections": []}]}, {"section_title": "Earnings-Stripping Regulations", "paragraphs": ["The earnings-stripping regulations aim to restrict the ability of foreign-parent groups to shift earnings out of the United States through dividends or other economically similar transactions (under Section 385). In these cases certain related-party debt will be characterized as equity for tax purposes. The result of equity classification is that interest deductions will be disallowed, and withholding obligations of 30% (or lower rate based on an applicable income tax treaty) could ensue. The regulations do not normally apply for related-party debt that is incurred to fund actual business investment, such as building or equipping a factory.", "The regulations also require documentation of debt instruments issued and held by certain members of an expanded group to establish that such instruments are properly characterized as debt. The regulations also allow the IRS on audit to treat an instrument issued to a related party as in part debt and in part equity.", "The final regulations issued on October 21, 2016, scaled back the original regulations in response to the comment period. The final regulations removed the general bifurcation rule that would have allowed a debt instrument to be classified as part debt and part equity and an exemption for debt for foreign issuers. The rules also provided exemptions for cash pools (a pool of cash to be accessed for short-term needs), short-term loans, regulated financial entities, and pass-throughs (firms not taxed as corporations). The Treasury delayed documentation rules for a year on July 28, 2017. Treasury announced on July 7, 2017, that these debt-equity regulations were to be among eight rules targeted for review. ", "The Treasury issued final regulations for the temporary regulations introduced in April 2016 on July 12, 2018, as TD 9834 with minor changes. "], "subsections": []}]}, {"section_title": "Inversions After the April 4, 2016, Treasury Regulations", "paragraphs": ["Two days after the regulations were issued, Pfizer withdrew from its merger with Allergen, an Irish-based company that was an inverted firm. It appears that this merger was affected by the multiple-entity rule, which has come to be called \"serial inversion.\" Mergers between Shire (Ireland based) and Basalta, and between HIS and Markit Group Inc. (U.K. based) went forward. The CF Industries merger with OCI NV (based in the Netherlands) was also called off; Johnson Controls and Tyco went forward. A merger between Konecranes (a Finnish firm) and Terex was scaled down to an acquisition of a share of Terex with the U.S. firm owning 25%, thus avoiding the effect of regulations. ", "In May 2016 Cardtronics, Inc., an ATM operator, announced a plan to move to the U.K. using the substantial business activities test. Also in May, an oil and gas industry service and technology firm announced a merger with Technip SA (France) to form a U.K. company, with each firm holding about half the stock and thus avoiding any of the recent regulations and establishing a new headquarters in another country. In 2017, Praxaire (a U.S. industrial gas company) announced a merger with Linde AG (a German gas and technology company), also with each owning half of the new company. ", "As noted in the introduction, statistical data suggest a decline in inversions from 2015 to 2016, and again from 2016 to 2017, and these data are consistent with the limited news reports of major inversions. Pfizer's CEO has recently indicated that deals are on hold generally while tax reform is being considered."], "subsections": []}, {"section_title": "P.L. 115-97, the 2017 Act", "paragraphs": ["The 2017 legislation not only made fundamental changes to the overall treatment of corporate income at home and abroad, but also adopted several provisions specifically aimed at inverted corporations (those with 60% to 80% ownership)."], "subsections": [{"section_title": "Recapture of Deemed Repatriation Rate Reduction", "paragraphs": ["Under the new law, existing untaxed earnings held abroad are taxed under a deemed repatriation rule, but at a lower rate (8% for earnings reinvested in noncash assets and 15.5% for earnings held as cash or cash equivalents). A special recapture rule applies on deemed repatriations of newly inverted firms. This recapture rule applies if a firm first becomes an expatriated entity at any time during the 10-year period beginning on December 22, 2017. In this case, the tax will be increased from 8% and 15.5% to 35% tax for the entire deemed repatriation, with no foreign tax credit allowed for the increase in tax rate. The additional tax is due on the full amount of the deemed repatriation in the first tax year in which the taxpayer becomes an expatriated entity."], "subsections": []}, {"section_title": "Inclusion of Cost of Goods Sold in BEAT", "paragraphs": ["BEAT excludes payments which reduce gross receipts with the result that payment for the cost of goods sold is not included under BEAT. An exception applies for firms that invert after November 9, 2017, where payments to a foreign parent or any foreign firm in the affiliated for cost of goods sold is included in BEAT. "], "subsections": []}, {"section_title": "Modification of Attribution Rules", "paragraphs": ["The constructive ownership rules for purposes of determining 10% U.S. shareholders, whether a corporation is a CFC and whether parties satisfy certain relatedness tests, were expanded in the 2017 tax revision. Specifically, the new law treats stock owned by a foreign person as attributable to a U.S. entity owned by the foreign person (so-called \"downward attribution\"). As a result, stock owned by a foreign person may generally be attributed to (1) a U.S. corporation, 10% of the value of the stock of which is owned, directly or indirectly, by the foreign person; (2) a U.S. partnership in which the foreign person is a partner; and (3) certain U.S. trusts if the foreign person is a beneficiary or, in certain circumstances, a grantor or a substantial owner. ", "The downward attribution rule was originally conceived to deal with inversions. In an inversion, without downward attribution, a subsidiary of the original U.S. parent could lose CFC status if it sold enough stock to the new foreign parent so the U.S. parent no longer had majority ownership. With downward attribution, the ownership of stock by the new foreign parent in the CFC is attributed to the U.S. parent, so that the subsidiary continues its CFC status, making it subject to any tax rules that apply to CFCs (such as Subpart F and repatriation taxes under the old law, and Subpart F and GILTI under the new law)."], "subsections": []}, {"section_title": "Other Provisions Affecting Stockholders and Stock Compensation", "paragraphs": ["Dividends (like capital gains) are allowed lower tax rates than the rates applied to ordinary income. The rates are 0%, 15%, and 20% depending on the rate bracket that ordinary income falls into. Certain dividends received from foreign firms (those that do not have tax treaties and PFICs ) are not eligible for these lower rates. Dividends paid by firms that inverted after the date of enactment of P.L. 115-97 are added to the list of those not eligible for the lower rates. ", "In 2004, an excise tax of 15% was imposed on stock compensation received by insiders in an expatriated corporation; the new law increases it to 20%, effective on the date of enactment for corporations that first become expatriated after that date."], "subsections": []}]}, {"section_title": "Inversions After the Act", "paragraphs": ["As noted earlier, there are no aggregate data available yet for 2018, but there are also indications that most tax-motivated inversions had already been discouraged by the 2016 regulations. Considering announcements of individual companies, one planned inversion, by Assurant, Inc. was revised to retain the headquarters in the United States. Ohio-based Dana, Inc. announced plans to merge and move the headquarters to the U.K., although the merger would leave the U.S. shareholders with less than 60% ownership, and therefore not make them subject to anti-inversion penalties. A recent announcement indicated that the Dana merger was called off. Some firms may be considering reversing their headquarters decisions."], "subsections": []}, {"section_title": "Policy Options", "paragraphs": ["The AJCA was successful at limiting a form of inversions, at least initially. In particular, the AJCA stopped the practice of basic \"naked inversions,\" in which little activity or presence in the new jurisdiction is required and the new parent is domiciled in a tax haven. Further, through regulation, Treasury has limited the use of the substantial business activity test safe harbor to invert. Recent activity (as noted above), however, suggests that mergers continued to be used as a vehicle for corporate inversions after these changes. ", "These more recent mergers have increasingly resulted in a U.K. parent company (e.g., FMC-Technip, HIS-Markit), due to policy decisions by the U.K. government. Specifically, the U.K. lowered its corporate tax rate and adopted a territorial tax system. In addition, anti-abuse provisions for foreign source income were weakened by the European Union courts. The U.K. has also proposed taxing certain intangible income at a 10% rate. (This is referred to as a patent box.)", "To restrict the occurrence of tax-motivated inversions, both a general reform of the U.S. corporate tax and specific provisions to deal with tax-motivated international mergers were discussed. Some important changes were made in 2017; other options remain. "], "subsections": [{"section_title": "U.S. Corporate Tax Reform and the 2017 Act", "paragraphs": ["Interest in reforming the corporate income tax was long-standing, including calling for explicit accommodation of international concerns. As noted earlier, two aspects of the U.S. corporate tax system are particularly relevant to corporate location decisions: the corporate tax rate and the taxation of foreign-source earnings. Taken together, these factors, under prior law, could yield a substantial reduction in taxes paid. In the case of the proposed merger of Forest Laboratories Inc. (a U.S. company) and Actavis (an Irish company) in 2014, the tax reduction was estimated to be roughly $100 million per year. "], "subsections": [{"section_title": "Lowering the Corporate Tax Rate", "paragraphs": ["Prior to the 2017 changes, the U.S. corporate statutory tax rate was higher than both the average statutory rates of the other Organisation for Economic Co-operation and Development (OECD) countries and that of the 15 largest economies in the world. Many asserted that the U.S. statutory tax rate needed to be lowered to reduce the incentive for inversion transactions. With the rate lowered from 35% to 21%, the combined central and subnational corporate tax rates are similar to most rates in the OECD. While lowering the corporate tax rate would reduce the incentive to invert, there are reasons to suggest that it would be impractical to reduce the rate to the level needed to stop inversions. Namely, to stop inversions through a reduction in the corporate tax rate would require a U.S. corporate tax rate set equal to the lowest tax rate of a destination company, or zero. ", "A lower corporate tax rate alone reduced the incentive for corporate inversions, primarily by reducing the tax rate applied to repatriated earnings. For a company like Pfizer, with large foreign earnings, a rate reduction could yield significantly lower taxes paid. However, as discussed below, the benefit of a lowered rate is negligible relative to the benefit to corporate taxpayers afforded by territorial tax systems, when income earned in low- or no-tax foreign jurisdictions is never subject to U.S. tax.", "Two factors present challenges for lowering the corporate tax rate further. First, if revenue neutrality is a goal, there may not be enough base-broadening provisions with revenue offsets to provide deep cuts in the corporate tax; and, if such offsets were found, they might have their own consequences for investment. Reducing the corporate tax without corresponding base broadening would likely reduce corporate tax revenue, adding to chronic budget deficits."], "subsections": []}, {"section_title": "Adopt a Territorial Tax System", "paragraphs": ["Prior to the 2017 revision, the United States was one of the few countries that had a worldwide tax system and levied a tax on the foreign-source income of domestic corporations. Changing corporate tax residence to a country with a territorial tax system (where foreign earnings would not be taxed at all) was thought to drive inversion decisions. This issue led to proposals for the United States to adopt a territorial tax system to stop inversion transactions.", "One concern about adopting a territorial tax system is the strain it would likely place on the current transfer pricing system. From this perspective, the worldwide tax system provided a backstop on the amount of profit shifting or base erosion possible, because shifted profits will eventually be repatriated. Under a territorial tax system, this is not the case. Research has found evidence of significant profit shifting, especially related to mobile intellectual property, suggesting a lot of income from foreign sources is really U.S. income in disguise. ", "Numerous other issues surround the adoption of a U.S. territorial tax. For example, while some supported a territorial tax to eliminate the incentive to keep earnings abroad, others opposed it because it likely discourages domestic investment and activity in the United States.", "The revisions in 2017 maintained a worldwide system, but with some changes. Income from U.S. subsidiaries is taxed on a current basis but at a lower rate and with an exemption for a deemed return on tangible assets. It also provided a subsidy for locating intangible assets with earnings from abroad in the United States. Many of the inverting firms had significant intangible assets, and it is not clear whether this new regime (a lower tax rate but on a current basis) is more or less generous to firms considering inverting. "], "subsections": []}, {"section_title": "Tax Reform Proposals", "paragraphs": ["Moving closer to a pure territorial tax, as in the case of a rate reduction, would likely reduce corporate tax revenue and add to current budget pressures unless it is offset by other tax increases, although this effect would be less costly at the lower 21% tax rate. In 2027, GILTI is projected to raise $21 billion. GILTI could be retained and the rate lowered or the temporarily lower rate could be made permanent. ", "There has been some agreement that adopting a territorial tax without some significant anti-abuse provisions could be problematic, as it would likely increase profit shifting abroad by U.S. firms. "], "subsections": []}]}, {"section_title": "Targeted Approaches", "paragraphs": ["Evidence suggests that administrative remedies were successful at dramatically slowing inversions; the targeted legislative changes in the 2017 Act may have had some impact as well. There are further changes that could be made to discourage inversions. This section discusses the history of these proposals, both legislative and administrative. ", "One approach would be to extend the rate recapture enacted in the 2017 Act for a period longer than 10 years, or to make it apply indefinitely to future inversions. ", "A second alternative is to directly restrict the ability of U.S. firms to invert by merger. The President's FY2015, FY2016, and FY2017 budget proposals contained a provision that would have further restricted the use of inversions. The proposal would modify the 80% test enacted in the AJCA to a 50% test and eliminate the 60% test. In effect, this proposal would reduce the percentage of shareholders that are owners of the \"old U.S. company\" and the \"new foreign merged company.\" The proposal would also require that the new foreign corporation be managed and controlled from outside the United States and prohibit transactions where the new foreign company has substantial business activities in the United States. In November 2015, then-Senate Finance Committee Chairman Hatch indicated the possibility of adding an anti-inversion provision to legislation to extend expired provisions. ", "Many of these bills were introduced in the 115 th Congress. ", "H.R. 1931 (Doggett), the Corporate EXIT Fairness Act, and H.R. 3434 (Levin) and S. 1636 (Durbin, along with a number of cosponsors), the Stop Corporate Inversions Act, would have treated all mergers as U.S. firms when the U.S. firm's shareholders hold more than 50% or when management and control primarily takes place in the United States. H.R. 1932 (Doggett) and S. 851 (Whitehouse), as with bills introduced in the 114 th Congress, would have included anti-inversion provisions as part of a broader proposal to address tax havens and deferral. H.R. 3603 (Levin) would have addressed earnings stripping of inverted corporations. H.R. 3424 (DeLauro) would disallow federal contracts for inverted firms. H.R. 1451 (Schakowsky) and S. 586 (Sanders) would make major changes in the tax treatment of foreign source income and include anti-inversion rules. ", "Following the change in the international system adopted at the end of 2017, Representative Doggett and Senator Whitehouse introduced the \"No Tax Break for Outsourcing Act\" ( H.R. 5108 , S. 2459 ) which, in addition to other changes, would have treated foreign corporations that are managed and controlled in the United States as domestic corporations and treated inverted firms as U.S. firms when the shareholders of the former U.S. company own more than 50% of the shares.", "These bills would have also limited interest deductions in the United States to the proportionate share of the firm's assets. The last proposal (to allocate worldwide interest) was in both the House and Senate versions of the legislation ( H.R. 1 ; 115 th Congress) in somewhat different form but was not retained in the final legislation. While this proposal was not specifically targeted at inverted firms it would have increased the restrictions that limit earnings stripping."], "subsections": [{"section_title": "Administrative Changes", "paragraphs": ["Former President Obama had encouraged Congress to act directly to limit inversions, but had also indicated on August 6, 2014, that administrative changes to limit inversions were under examination. Prior to that announcement, Steve Shay, a Harvard professor and former practitioner and Treasury official, outlined two regulatory actions that he believed could be taken. The first would limit earnings stripping by reclassifying debt as equity due to excessive related party debt in an inversion. (The second provision is no longer relevant under the new international tax regime.)", "A number of other administrative proposals that have been suggested (such as provisions relating to taxing accumulated deferred earnings) are no longer relevant and others have been adopted in the regulatory changes discussed above.", "Expanding the scope of Section 7874 (which treats inverted firms as U.S. firms) by combining multiple transactions into single ones, or vice versa. The scope of Section 7874 could also be expanded by treating certain stock as disqualified (because it is expected to be held temporarily or because it is accompanied by restrictions on voting rights); this provision was adopted in Treasury regulations; Potentially recognizing accumulated deferred earnings as currently taxable under authority such as Subpart F, Section 367, or other rules (this provision is no longer relevant with the end of deferral, but it may have influenced the decision to tax deferred earnings of newly inverted firms at the full 35% rate for the next 10 years); Issuing regulations that would generally tighten restrictions on interest deductions under the thin capitalization rules of Section 163(j). These changes would probably apply to corporations in general, and not just to inverted corporations (this change was made in the 2017 tax revision); Stricter regulations under Section 367 to immediately include foreign earnings in the case of actions that attempt to move foreign operations out from under the U.S. parent. This would make future earnings of these operations nontaxable; Strengthening and modernizing the effectively connected income rules that determined whether trade or business activity is taking place in the United States by foreign firms; and Closely monitoring the creation of non-U.S. subsidiaries owned by the foreign parent after inversion, and ensuring that assets (including intangibles such as inventions, knowhow, etc.) transferred from the U.S. firm are transferred at arms-length prices. ", "There is disagreement among experts about whether the types of regulatory changes discussed in this section are feasible or desirable."], "subsections": [{"section_title": "Appendix. Legislative Proposals in the 113th and 114th Congresses", "paragraphs": ["A number of legislative proposals were advanced in 2014, when the wave of inversions through merger began. Representative Levin, the ranking member of the House Ways and Means Committee, introduced the Stop Corporate Inversions Act of 2014 ( H.R. 4679 ), which would have reflected the Administration's proposed changes, retroactive to May 8, 2014. The inversion would have not been recognized if the U.S. stockholders had 50% of the shares or if 25% of the business activity is in the United States. A companion bill, which would have sunset in two years to provide time for tax reform, was introduced in the Senate by Senator Levin in 2014 ( S. 2360 ). The Joint Committee on Taxation estimated the permanent proposal to gain $19.5 billion in revenue over FY2015-FY2024. The two-year proposal would have raise $0.8 billion over the same period. In the 114 th Congress, these legislative proposals were introduced as H.R. 415 (Levin) and S. 198 (Durbin). Senator Casey proposed an anti-inversion amendment to an education bill ( S. 1177 ). ", "In the 114 th Congress, H.R. 297 (Doggett) and S. 174 (Whitehouse) included anti-inversion provisions as part of a broader proposal to address tax haven abuses and restrict the benefits of deferral. S. 922 (Sanders) and H.R. 1790 (Schakowsky) also included anti-inversion provisions, as well as earnings-stripping provisions (discussed below) and broader provisions, including the repeal of deferral.", "In 2014 a number of legislative proposals were introduced that would limit the tax benefits associated with inversions for certain corporations. For example, H.R. 1554 (Doggett), H.R. 3666 (DeLauro), H.R. 3793 (Maffei), S. 268 (Levin), S. 1533 (Levin), and S. 1844 (Shaheen) would each treat corporations managed and controlled from the United States as domestic corporations regardless of their legal tax home or status as an inverted company. This provision was also included in S. 922 (Sanders) and H.R. 1790 (Schakowsky). ", "Other proposals in 2014, H.R. 694 (Schakowsky) and S. 250 (Sanders), would have eliminated deferral (taxing foreign source income currently), in addition to limiting the benefits of inversions when management and control continues to reside in the United States. ", "Legislative proposals were also under discussion in 2014 by Representative Levin (announced July 31, 2014) and by Senator Schumer (announced August 14, 2014) to address earnings stripping, where foreign parent companies borrow from the U.S. subsidiary to increase interest deductions and reduce taxable income in the United States. Both of these proposals would have tightened the rules allowing interest deductions by reducing the current limit on interest deductions relative to adjusted income from 50% to 25% and repealing an alternative safe-harbor debt-to-equity test. Both proposals would have also eliminated or limited interest carryforwards. The Schumer proposal was intended to apparently apply to inverted firms while the Levin proposal would have applied generally. The Levin proposal would have also limited other transactions between related parties within the firm that allow untaxed investment of funds in the United States. The restrictions on interest in the Levin bill were the same as those initially proposed in the House in 2004. ", "Senator Schumer introduced his proposal, S. 2786 , the Corporate Inverters Earnings Stripping Reform Act of 2014. Its limits on interest deductions would have applied to inverted firms where U.S. shareholders own more than 50% of the firm. The restriction also would have applied to firms that inverted using the substantial business activities test. The bill had nine Democratic cosponsors; five of them were on the Senate Finance Committee. ", "In the 114 th Congress, S. 922 (Sanders) and H.R. 1790 (Schakowsky) included general earnings-stripping provisions for firms with a foreign parent. Earnings stripping provisions were also addressed in the report of the Senate Finance Committee's working group on Tax Reform.", "H.R. 5278 (DeLauro) and S. 2704 (Levin), introduced May 30, 2014, would have disallowed awarding federal contracts to inverted firms. These proposals were introduced in the 114 th Congress as H.R. 1809 (DeLauro) and S. 975 (Durbin). In 2014, Senators Brown and Durbin proposed S. 2895 , and Representative Doggett introduced H.R. 5549 , the Pay What You Owe Before You Go Act, that would have taxed the accumulated deferred earnings of inverting firms. ", "Then Senate Finance Committee Chairman Ron Wyden had proposed having draft legislation in place in September 2014, and also referred to Schumer's earnings-stripping proposal. Senator Wyden had previously announced that any changes would be retroactive to May 8, 2014."], "subsections": []}]}]}]}]}}
{"id": "R45686", "title": "The Postsecondary Undergraduate Population: Student Income and Demographics", "released_date": "2019-04-12T00:00:00", "summary": ["Since the 1950s and the creation of the first federal student aid programs, one aim of federal higher education policy has been to promote access to postsecondary education, particularly for students with financial need. In recent years, the federal government has annually made available more than $100 billion in federal grants, loans, and work-study funds to millions of students to help cover the cost of higher education. As Congress continues to focus on expanding access to postsecondary education through federal student aid policies, understanding various characteristics of the population enrolling in postsecondary education may be useful for policy deliberations.", "This report focuses on the income of the undergraduate student population. It analyzes (1) how the income distribution of the undergraduate population has changed over time; (2) the relationship between student income and certain student demographics, such as race and dependency status; and (3) how the income distribution of the undergraduate population compares with that of the population of persons who do not have a postsecondary degree. Major findings presented in this report include the following:", "The number and proportion of low-income students has increased in more recent years, even as total enrollment has decreased. Low-income student enrollment has increased at a faster pace than the nation's population of low-income persons. The majority of students enrolling in postsecondary education have incomes below 200% of the poverty guidelines. Independent undergraduate students who have sometimes been labeled as \"non-traditional\" constitute a large portion of enrolled postsecondary students and tend to have lower income than more \"traditional\" students. Nonwhite students account for nearly 50% of the undergraduate student population, and they tend to have lower income than white students. The majority of low-income students attend community colleges and a disproportionately high share attend private for-profit institutions.", "The changing composition of the student population could have implications for federal policies designed to promote access to postsecondary education. In particular, policymakers face consideration of whether federal policies could play a role in encouraging students at various income levels to enroll at the highest performing types of schools. Policymakers also face consideration of the extent to which Higher Education Act programs are designed to support the success of non-traditional and minority students."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Since the 1950s and the creation of the first federal student aid programs, one aim of federal higher education policy has been to promote access to postsecondary education, particularly for students with financial need. In recent years, the federal government has annually made available more than $100 billion in federal grants, loans, and work-study funds to millions of students to help cover the cost of higher education. As Congress continues to focus on expanding access to postsecondary education through federal student aid policies, understanding various characteristics of the population enrolling in postsecondary education may be helpful in informing policy deliberations.", "In academic year (AY) 2015-2016, there were approximately 19.3 million students enrolled as undergraduates in postsecondary education in the 50 states and the District of Columbia. In AY2007-2008, around the time of the last reauthorization of the Higher Education Act (HEA), there were approximately 20.5 million undergraduate students enrolled in postsecondary education. The composition of the current undergraduate population, how the composition has changed over time, and the types of institutions in which students enroll are issues that are likely to be of interest to Congress as it considers the reauthorization of the HEA. ", "This report focuses on the income of the undergraduate student population. The report will explore the relationship between student income and certain student demographics such as race and dependency status, and explore how the income distribution of the undergraduate population compares with that of the national population of persons who do not have a postsecondary degree. "], "subsections": []}, {"section_title": "Data Sources", "paragraphs": ["The analysis presented in this report relies on two data sources: the National Postsecondary Student Aid Study (NPSAS) and the Current Population Survey Annual Social and Economic Supplement (CPS ASEC). This section describes each data source, along with some of the limitations of the data. "], "subsections": [{"section_title": "NPSAS", "paragraphs": ["The data used in this report were primarily derived from NPSAS. NPSAS is a nationally representative study of students enrolled in postsecondary education that focuses on how students finance their education. NPSAS is conducted by the U.S. Department of Education's National Center for Education Statistics (NCES) and is administered every four years. The most recent study available covers AY2015-2016, which ran from July 1, 2015, to June 30, 2016. To provide an illustration of how postsecondary student characteristics have changed over time, this report uses data from the last six administrations of NPSAS that are available\u2014AY1995-1996, AY1999-2000, AY2003-2004, AY2007-2008, AY2011-2012, and AY2015-2016\u2014covering a period of 20 years.", "The NPSAS data are used in this report to explore the income characteristics of the postsecondary population and the extent to which income is related to other student demographics, such as race and dependency status. The report also explores the relationship between income and type of institution(s) attended. To establish a student's income, the NPSAS variable for income as a percentage of the poverty guidelines is used. The poverty guidelines are based on family size and total income (more discussion on the poverty guidelines is provided in the subsequent section of this report). One advantage of using the poverty guidelines is that they provide income relative to the level of poverty at a certain point in time. Therefore, when looking at trends in income over time, no adjustments need be made for inflation. ", "The individual(s) (i.e., a student, student's parents, or student's spouse) whose income is represented by the income as a percentage of the poverty level varies by the student's dependency status. For dependent students, the measure reflects the family size and income of the student's parents; for independent students, it reflects the family size and income of the student and, if applicable, the student's spouse. For simplicity, when this report refers to a student's income in the context of the NPSAS data, it is referring to the income of applicable family members.", "There are several studies that have explored the income characteristics of the postsecondary population. For example, NCES publishes an annual report on the income characteristics of students who enroll in college immediately after completing high school. Data from the most recent report suggest that for the past few years, low-income students have started to enroll in postsecondary education at a higher rate than middle-income students, but they also continue to enroll at a much lower rate than high-income students. However, in looking only at recent high school completers, the data exclude a large portion of the postsecondary population who are not recent high school graduates. Thus, one advantage of using NPSAS is that the data provide a representative sample of all types of students across all types of Title IV schools. ", "One limitation of using NPSAS is that while much of the data are derived from information that students report on the Free Application for Federal Student Aid (FAFSA), the remaining data, for students who did not apply for aid, are collected through interview and/or are produced through stochastic imputation. As such, the data for non-FAFSA filers are likely considerably less precise than the data for FAFSA filers. For context, in the AY2015-2016 NPSAS study 70% of student respondents completed the FAFSA. "], "subsections": []}, {"section_title": "CPS ASEC", "paragraphs": ["The CPS ASEC is sponsored jointly by the U.S. Census Bureau and the U.S. Bureau of Labor Statistics and is the official source of annual estimates of poverty in the United States. The CPS is a monthly labor force survey that is used to compute monthly labor statistics, such as the unemployment rate. The ASEC, a supplementary set of questions asked after the basic CPS monthly questionnaire, is administered to about 100,000 addresses and asks the respondent to report information for the previous full calendar year. As a result, the income data obtained from the ASEC are annual measures. Respondents are asked about 18 types of income by a professional interviewer using a computerized questionnaire. The level of income detail is generally considered to be higher and more accurate than it is from surveys that rely on paper forms and are filled out by the respondents themselves. However, like all surveys based on a sample, the ASEC is subject to both sampling error and nonsampling error. Despite these limitations, the CPS ASEC is a widely used survey for analyzing household income. ", "The CPS ASEC data are used in this report to explore the income of the national population relative to the postsecondary population. For consistency with the three most recent NPSAS studies, this report uses the CPS ASEC data from 2007, 2011, and 2015. To draw valid comparisons between the national and the postsecondary population groups, CRS created an income variable in CPS ASEC that closely resembles the NPSAS variable for income as a percentage of the poverty guidelines. However, CPS ASEC uses household and family definitions that are different from NPSAS. To create units of analysis that were most similar to those in NPSAS, it was necessary to make some assumptions and intermediate calculations. Further, the definitions of income in CPS ASEC and NPSAS are not identical. Despite the limitations of CRS's approach, the derived family income variable allowed for some valuable comparisons. An outline of CRS's approach to creating the family income variable in CPS ASEC and the assumptions embedded in this approach is provided in the Appendix . "], "subsections": []}]}, {"section_title": "Income of Undergraduate Students", "paragraphs": ["The amount of federal student aid that is made available to a student is largely determined by the student's income. Individuals who are interested in applying for federal student financial aid are required to complete the FAFSA. Information reported on the FAFSA is shared with state agencies and institutions of higher education to help determine federal and nonfederal student aid. Thus, an important characteristic of postsecondary students with regard to federal policy is their income. This section of the report explores changes in the income distribution of students enrolled in postsecondary education over time using the NPSAS variable for income as a percentage of the poverty guidelines. ", "The poverty guidelines are issued by the Department of Health and Human Services (HHS) every year, and many social programs such as the Supplemental Nutrition Assistance Program (SNAP), the Children's Health Insurance Program, the National School Lunch Program, and certain parts of Medicaid use poverty guidelines to determine participant eligibility for benefits. The poverty guidelines are also used to determine monthly payment amounts under the student loan income-driven repayment plans and in student loan rehabilitation agreements. Table 1 provides the 2014 HHS poverty guidelines and multiples that were used in NPSAS: 2016. Using these guidelines, CRS created the following five poverty bands for its analysis: below 100%, 100% to 199.99%, 200% to 299.99%, 300% to 499.99%, and 500% and above. For purposes of this report, \"low-income students\" are considered to have income that falls within the first two poverty bands (below 200% of the poverty guidelines). This characterization of low-income status is consistent with standards used in some education and social service programs that use the poverty guidelines to determine eligibility for assistance. It is used here primarily as a descriptor of lower-income categories in the populations being examined, and no suggestion is being made with regard to whether the first two poverty bands should be used as thresholds in \"low-income\" determinations for the receipt of means tested assistance.", "As previously mentioned, one advantage of using the poverty guidelines is that they are indexed for inflation, which is useful when looking at trends in income over time. Another advantage is that they account for families of different sizes. For example, 200% of the poverty threshold for a family of four is $47,700. This same income level represents more than 300% of the poverty threshold for a single individual and for a family of two. "], "subsections": [{"section_title": "Undergraduate Student Income Distribution", "paragraphs": [" Table 2 provides the number of undergraduate students enrolled by poverty bands during the period covered by the last six administrations of NPSAS that are available. Figure 1 provides a graphical illustration of the data presented in Table 2 . ", "Postsecondary student enrollment has generally increased over the past two decades. In AY1995-1996 and AY1999-2000, there were about 16.3 million undergraduates. Enrollment increased to 18.9 million in AY2003-2004 and to 20.5 million in AY2007-2008, and reached a peak of 23.0 million in AY2011-2012. In AY2015-2016, enrollment dropped to 19.3 million undergraduates. ", "There were also changes in the income composition of the undergraduate population that appear to coincide with the 2008 recession. Specifically, the number of students with income below 100% of the poverty guidelines grew from approximately 4 million in AY2007-2008 to 6.7 million in AY2011-2012, an increase of nearly 70%. Students with income below 100% of the poverty guidelines also constituted a larger portion of the undergraduate population (29%) in AY2011-2012 than in any prior study. While overall enrollment decreased in AY2015-2016, the proportion of students in the lowest poverty band increased to 31% of the undergraduate population. More than 50% of undergraduate students enrolled in AY2011-2012 and AY2015-2016 had incomes below 200% of the poverty guideline.", "The trend in enrollment of students in the upper and middle income categories differs from that of low-income students. From AY2007-2008 to AY2011-2012, the number of students in the upper poverty band (500% of the poverty guidelines and above) dropped by 17% while overall enrollment increased by 12%. In AY2015-2016, enrollment of upper-income students was 25% below the AY2007-2008 level. Similarly, enrollment of students with income between 200% and 499% of the poverty guidelines dropped by 25% between AY2007-2008 and AY2015-2016. ", "Overall, the data suggest that low-income students are enrolling at higher levels than previously observed. Several conclusions could be drawn from this. For instance, it could suggest that institutions of higher education have become more effective at enrolling low-income students. It could also suggest a lack of opportunities in the labor market and that more low-income students are becoming convinced that they may realize economic benefits with higher educational credentials. ", "At the same time, enrollment of students in the middle and upper income categories has declined. It is possible that the trend in the income composition of undergraduate students could be a reflection of changes in income of the national population. As is explored in more depth in a later section of this report, these changes in the composition of the student population in the higher and lower poverty bands do not seem to map closely with broader income trends in the general population, although there is some alignment with income trends for those of ages similar to traditional college students during this period."], "subsections": []}]}, {"section_title": "Student Demographics by Income", "paragraphs": ["The data presented thus far suggest differences in the trends in enrollment of undergraduate students from different income groups. To further explore the current population of students, CRS examined certain demographic characteristics of the undergraduate student population and how those characteristics are related to income using the most recent NPSAS. "], "subsections": [{"section_title": "Race", "paragraphs": [" Figure 2 illustrates the racial composition of students by poverty bands in AY2015-2016. The data suggest that minority students accounted for nearly 50% of the enrolled undergraduate population, and these students tended to have lower incomes than white students. More specifically, white students constituted about 53% of all enrolled undergraduate students, Hispanic students constituted 19%, black students constituted 16%, and Asian students and students from other racial groups constituted 12%.While white students made up the majority of students in any income category, they were overrepresented in the higher income bands. For example, white students constituted 73% of students with income of 500% and above of the poverty guidelines. Black and Hispanic students, on the other hand, were overrepresented in the lower income bands. For example, while black and Hispanic students combined accounted for 35% of the total undergraduate population, they accounted for 45% of students with income below 100% of the poverty guideline. The proportionate share of Asian and other students was relatively stable across the different poverty bands.", "As Figure 1 illustrates, the majority of the undergraduate population has income below 200% of the poverty guidelines. Using counts presented in Figure 2 , it is possible to examine the concentration of these low-income students within racial groups in AY2015-2016. This reveals that 70% of black students, 64% of Hispanic students, 58% of \"other\" students, 55% of Asian students, and 42% of white students had income below 200% of the poverty guidelines. "], "subsections": []}, {"section_title": "Traditional vs. Non-traditional Students", "paragraphs": ["When considering the postsecondary population, there is typically a distinction made between traditional and non-traditional students. While there is no consensus on the characteristics that distinguish traditional from non-traditional students at the undergraduate level, students identified as \"independent\" are often considered to be non-traditional students. An independent student is defined in the HEA as one who meets any of the following criteria:", "is 24 years of age or older by December 31 of the award year; is an orphan, in foster care, or a ward of the court; or was an orphan, in foster care, or a ward of the court at any time when the individual was 13 years of age or older; is, or was immediately prior to attaining the age of majority, an emancipated minor or in legal guardianship as determined by a court of competent jurisdiction in the individual's state of legal residence; is a veteran of the Armed Forces of the United States or is currently serving on active duty in the Armed Forces for other than training purposes; is a graduate or professional student; is a married individual; has legal dependents other than a spouse; or has been verified, by a qualified authority during the school year in which the application is submitted, as either an unaccompanied youth who is a homeless child or youth, or as unaccompanied, at risk of homelessness, and self-supporting.", "Under the HEA, a student who does not meet the criteria for an independent student is treated as a dependent student. Figure 3 illustrates dependency status of enrolled undergraduate students by poverty bands in AY2015-2016 and suggests that independent students constituted a large portion of this population. These \"non-traditional students\" also tended to be low income. More specifically, while independent students constituted 50% of the undergraduate population, they constituted nearly 70% of students in the lowest poverty band. Dependent students, on the other hand, were largely overrepresented in the upper income bands. For example, dependent students constituted 76% of students with income of 500% and above of the poverty guidelines and 33% of students with income below 100% of the poverty guidelines.", "The counts presented in Figure 3 can be used to examine the concentration of low-income students within each dependency group, showing that 44% of dependent students, 74% of independent students without dependents, and 80% of independent students with dependents had income below 200% of the poverty guidelines. "], "subsections": []}, {"section_title": "Type of Institution Attended", "paragraphs": ["In discourse about which students are enrolling in postsecondary education, questions often surface regarding where students are enrolling. Figure 4 and Figure 5 explore types of institutions attended by students in different income categories and suggest some variation in the type of institutions attended by students with different income levels. ", "As shown in Figure 4 , 40% of undergraduates attended public two-year institutions, 35% attended public four-year institutions, 15% attended private nonprofit institutions, and 10% attended private for-profit institutions in AY2015-2016. Low-income students are more likely to attend public two-year institutions (or community colleges). The likelihood of attending a private for-profit institution decreases as income increases. ", "The counts presented in Figure 4 can be used to examine the concentration of low-income students within each type of institution, showing that 57% of students attending public two-year institutions, 46% of students attending public four-year institutions, 42% of students attending private nonprofit institutions, and 73% of students attending for-profit institutions had income below 200% of the poverty guidelines. ", " Figure 5 illustrates the selectivity of four-year institutions attended by undergraduate students across the poverty bands. Twenty percent of all four-year students attended very selective institutions, 57% attended moderately selective institutions, and 23% attended open admission or minimally selective institutions. Within the lowest poverty band, 18% of students attended a very selective institution. In the second lowest poverty band, 14% attended a very selective institution. Thus, there was a larger percentage of students in the lowest poverty band attending highly selective institutions than there was in the second lowest poverty band. Generally, the proportion of students that attend open admission or minimally selective institutions decreases as income increases.", "The counts presented in Figure 5 can be used to examine the concentration of low-income students within four-year institutions based on their selectivity, showing that 36% of students at very selective institutions, 43% at moderately selective institutions, and 54% at open admission or minimally selective institutions have income below 200% of the poverty guidelines. "], "subsections": []}]}, {"section_title": "Income Distribution of the National Population and the Undergraduate Population", "paragraphs": ["The NPSAS data suggest that low-income students have enrolled in postsecondary education at higher levels in more recent years. To explore the extent to which the influx of students is related to changes in the income distribution of the national population, this section uses the CPS ASEC to compare the income distribution of the national population with that of the undergraduate population. Given that the data suggest noteworthy trends for low-income students, the discussion in this section generally focuses on persons with income below 200% of the poverty guideline. ", " Figure 6 provides a comparison of the income distribution of the national population aged 15 to 65 and the postsecondary population over three time periods. The data suggest that while the low-income national population grew from 2007 to 2011, the population of low-income undergraduate students grew at a higher rate than the national population of low-income persons. Specifically, from 2007 to 2011 the number of persons with income below 200% of the poverty guidelines grew from 58.5 million to 71.0 million, an increase of 22%.During the same time, the number of low-income students enrolled as undergraduates grew from 8.2 million to 11.7 million, an increase of 44%. Between 2011 and 2015, there was a slight increase in the number of low-income persons (about 2 million) in the national population, while the number of low-income students dropped (by about 1 million). However, the drop in low-income students seems to be associated with the overall drop in postsecondary enrollment. ", "In terms of proportion, low-income persons constitute a much smaller portion of the national population than of the undergraduate postsecondary population. Specifically, low-income persons constituted 29% of the national population in 2007, and 34% of the national population in 2011 and 2015. Among the enrolled undergraduate population, low-income persons accounted for 40% in 2007 and more than 50% in 2011 and 2015. ", " Figure 7 illustrates the income distribution of the population aged 15-23 who did not have a postsecondary degree and were not enrolled in postsecondary education. This population could have been considered \"potential enrollees\" and thus may have had characteristics similar to the enrolled population. Due to data limitations, \"potential enrollees\" who were aged 24 and older could not be considered. ", "The data suggest that from 2007 to 2011, the number of low-income students aged 15-23 grew at a faster rate than the national population of persons in this age range. Specifically, from 2007 to 2011 the number of low-income potential enrollees grew from 10.8 million to 12.2 million, an increase of 13%, while the number of low-income enrolled students aged 15-23 grew from 4.0 million to 5.5 million, an increase of 37%. In 2015, the number of low-income persons aged 15-23 enrolled as undergraduates decreased by 6%, while the national population of the same age range decreased by 4%. Again, the drop in enrollment of low-income students appears to be related to the large decrease in total student enrollment. ", "In terms of proportion, low-income persons aged 15-23 constituted a smaller portion of the undergraduate population than of the national population in 2007. However, in 2011 and 2015 low-income persons in this age range constituted similar shares of the national and undergraduate populations. "], "subsections": []}, {"section_title": "Summary of Selected Data Findings", "paragraphs": ["Since the last reauthorization of the Higher Education Act, the number and proportion of low-income undergraduate students (defined in this report as students with income below 200% of the poverty guidelines) has increased, even as total enrollment has decreased in more recent years. Low-income students now constitute more than 50% of the postsecondary undergraduate population. This report's analysis also found the following: ", "Certain student characteristics such as race, age, and dependency status show trends that tend to be associated with income. Independent undergraduate students who have historically been labeled as \"non-traditional\" constitute a large portion of enrolled postsecondary students. These \"non-traditional\" students generally tend to have lower incomes than more traditional students. Nonwhite students account for nearly 50% of the undergraduate population, and they tend to have lower income than white students. The majority of low-income students attend community colleges and a disproportionately high share attend private for-profit institutions. Low-income students were more likely to attend open admission or minimally selective institutions. "], "subsections": []}, {"section_title": "Considerations for Congress", "paragraphs": ["The changing composition of the student population could have implications for policies designed to promote access to postsecondary education. One historical aim of student aid programs has been to increase postsecondary access for those students who demonstrate financial need. The findings in this report suggest that there has been an influx of low-income students enrolling in postsecondary education since the last HEA reauthorization. When compared with national income data, low-income individuals are overrepresented in the postsecondary population. This could suggest that federal policies have been effective at promoting access for low-income persons. Data also show that the number of students in the middle- and upper-income categories has declined somewhat in recent years. This finding could imply that there are challenges that these students face in enrolling in postsecondary education that may not be addressed in current federal policies. ", "Related to access, there is growing interest in the extent to which students who enroll are completing a postsecondary credential. Research suggests that private nonprofit and public four-year institutions tend to have higher completion rates than public two-year institutions and private for-profit institutions. Data show that low-income students tend to be overrepresented at public two-year and for-profit institutions and less represented at public and private nonprofit four-year institutions. Policymakers face consideration of whether federal policies could play a role in encouraging students at various income levels to enroll at the highest performing types of schools. ", "Data also show that undergraduate students historically labeled as \"non-traditional\" and minority students constitute about 50% of the undergraduate population. Some research suggests that non-traditional and minority students face a unique set of challenges when enrolling and completing postsecondary education. Policymakers face consideration of the extent to which HEA programs are designed to support the success of non-traditional and minority students. ", "Another way in which the analyses presented here may be relevant to policy discussions is in identifying the distribution of students across poverty bands. When designing programs that provide assistance to lower-income individuals, poverty bands are often employed as a mechanism for targeting."], "subsections": [{"section_title": "Appendix. Technical Considerations and Methodology", "paragraphs": ["Family units in NPSAS correspond with HEA dependency definitions and reflect the individuals whose assets and income are considered in calculating an expected family contribution (EFC). These family units may differ from a family unit in CPS ASEC. To facilitate the analysis in this report, CRS used person-level data in the CPS ASEC data set to create new family units that are more comparable to the family units considered in calculating the EFC. This appendix briefly describes the methodology CRS used for dividing CPS ASEC larger \"family household\" units into smaller family units that resemble the family members and corresponding income reported on the FAFSA for the purposes of calculating a student's EFC. ", "Family Units: CPS ASEC and the EFC Formulas", "A family household in CPS ASEC is a household maintained by a family and may include a related subfamily and unrelated subfamilies who live in the household. A family generally consists of \"a group of two persons or more residing together and related by birth, marriage, or adoption.\" A related subfamily is \"a married couple with or without children, or one parent with one or more of their own single (never married) children under 18 years old, living in a household and related to, but not including, the householder or spouse.\" An unrelated subfamily is \"a family that does not include among its members the householder and relatives of the householder.\" ", "Generally, when calculating a student's EFC, determining the relevant family members whose income would be included depends on the student's personal characteristics. The various aspects of the CPS make it possible to \"separate\" household members that would be a distinct family for the purposes of calculating a student's EFC. For example, a married person without children would be considered \"independent\" using the EFC formula, and the family would include the person and his or her spouse. An unrelated subfamily would also most likely be treated as a separate family by the EFC formula. As such, related subfamilies and unrelated subfamilies in CPS ASEC were treated as separate family units from the primary family for purposes of this report's analysis. ", "The EFC formula considers several criteria for identifying a person as \"independent.\" To capture a large portion of potentially independent students in CPS ASEC who were not addressed through the separation of subfamilies from families, all unmarried persons age 24 and older who do not have children were treated as a separate family unit in this report's analysis. While students can qualify as independent on the basis of characteristics other than age, marital status, and having dependents, it was assumed that any remaining independent students not captured in the analysis would constitute a small portion of the population and thus would not have a substantial impact.", "Income: CPS ASEC and EFC Formula ", "Using the newly created EFC family unit described above, family income was calculated by taking the sum of each person's income in the unit. In some cases, this calculation of family income would likely include persons whose income would not be included under the EFC formula (e.g., the income of a student who is a dependent, the income of a student's siblings who live in the household with the student's parents). To facilitate the analysis, it was assumed that the income of the additional persons would be a negligible amount and would not greatly affect the family income.", "The definition of income for the purposes of the EFC formula is somewhat different from income reported in the CPS ASEC. Total income under the EFC formula considers adjusted gross income and several forms of untaxed income but excludes some forms of taxable income. The CPS ASEC measure of income includes money income before taxes or tax credits and excludes capital gains or noncash benefits. To facilitate the analysis, it was assumed that the two measures of income are comparable. "], "subsections": []}]}]}}
{"id": "R40425", "title": "Medicare Primer", "released_date": "2019-05-20T00:00:00", "summary": ["Medicare is a federal program that pays for covered health care services of qualified beneficiaries. It was established in 1965 under Title XVIII of the Social Security Act to provide health insurance to individuals 65 and older, and has been expanded over the years to include permanently disabled individuals under the age of 65. Medicare, which consists of four parts (A-D), covers hospitalizations, physician services, prescription drugs, skilled nursing facility care, home health visits, and hospice care, among other services. Generally, individuals are eligible for Medicare if they or their spouse worked for at least 40 quarters in Medicare-covered employment, are 65 years old, and are a citizen or permanent resident of the United States. Individuals may also qualify for coverage if they are a younger person who cannot work because they have a medical condition that is expected to last at least one year or result in death, or have end-stage renal disease (permanent kidney failure requiring dialysis or transplant). The program is administered by the Centers for Medicare & Medicaid Services (CMS) within the Department of Health and Human Services (HHS) and by private entities that contract with CMS to provide claims processing, auditing, and quality oversight services.", "In FY2019, the program is expected to cover approximately 61 million persons (52 million aged and 9 million disabled) at a total cost of about $772 billion. Spending under the program (except for a portion of administrative costs) is considered mandatory spending and is not subject to the annual appropriations process. Services provided under Parts A and B (also referred to as \"original\" or \"traditional\" Medicare) are generally paid directly by the government on a \"fee-for-service\" basis, using different prospective payment systems or fee schedules. Under Parts C and D, private insurers are paid a monthly \"capitated\" amount to provide enrollees with required benefits. Medicare is required to pay for all covered services provided to eligible persons, so long as specific criteria are met.", "Since 1965, the Medicare program has undergone considerable change. For example, during the 111th Congress, the Patient Protection and Affordable Care Act (ACA; P.L. 111-148 and P.L. 111-152) made numerous changes to the Medicare program that modified provider reimbursements, provided incentives to increase the quality and efficiency of care, and enhanced certain Medicare benefits. In the 114th Congress, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA; P.L. 114-10) changed the method for calculating updates to Medicare payment rates to physicians and altered how physicians and other practitioners will be paid in the future.", "Projections of future Medicare expenditures and funding indicate that the program will place increasing financial demands on the federal budget and on beneficiaries. For example, the Hospital Insurance (Part A) trust fund is projected to become insolvent in 2026. Additionally, although the Supplementary Medical Insurance (Parts B and D) trust fund is financed in large part through federal general revenues and cannot become insolvent, associated spending growth is expected to put increasing strains on the country's competing spending priorities. As such, Medicare is expected to be a high-priority issue in the current Congress, and Congress may consider a variety of Medicare reform options ranging from further modifications of provider payment mechanisms to redesigning the entire program.", "This report provides a general overview of the Medicare program including descriptions of the program's history, eligibility criteria, covered services, provider payment systems, and program administration and financing. A list of commonly used acronyms, as well as information on beneficiary cost sharing, may be found in the appendixes."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Medicare is a federal program that pays for covered health care services of qualified beneficiaries. It was established in 1965 under Title XVIII of the Social Security Act to provide health insurance to individuals 65 and older, and has been expanded over the years to include permanently disabled individuals under 65. The program is administered by the Centers for Medicare & Medicaid Services (CMS), within the U.S. Department of Health and Human Services (HHS).", "Medicare consists of four distinct parts:", "Part A (Hospital Insurance, or HI) covers inpatient hospital services, skilled nursing care, hospice care, and some home health services. The HI trust fund is mainly funded by a dedicated payroll tax of 2.9% of earnings, shared equally between employers and workers. Since 2013, workers with income of more than $200,000 per year for single tax filers (or more than $250,000 for joint tax filers) pay an additional 0.9% on income over those amounts. Part B (Supplementary Medical Insurance, or SMI) covers physician services, outpatient services, and some home health and preventive services. The SMI trust fund is funded through beneficiary premiums (set at 25% of estimated program costs for the aged) and general revenues (the remaining amount, approximately 75%). Part C (Medicare Advantage, or MA) is a private plan option for beneficiaries that covers all Parts A and B services, except hospice. Individuals choosing to enroll in Part C must also enroll in Part B. Part C is funded through the HI and SMI trust funds. Part D covers outpatient prescription drug benefits. Funding is included in the SMI trust fund and is financed through beneficiary premiums, general revenues, and state transfer payments.", "Medicare serves approximately one in six Americans and virtually all of the population aged 65 and older. In 2019, the program will cover an estimated 61 million persons (52 million aged and 9 million disabled). The Congressional Budget Office (CBO) estimates that total Medicare spending in 2019 will be about $772 billion; of this amount, approximately $749 billion will be spent on benefits. About 28% of Medicare benefit spending is for hospital inpatient and hospital outpatient services (see Figure 1 ). CBO also estimates that federal Medicare spending (after deduction of beneficiary premiums and other offsetting receipts) will be about $637 billion in 2019, accounting for about 14% of total federal spending and 3% of GDP. Medicare is required to pay for all covered services provided to eligible persons, so long as specific criteria are met. Spending under the program (except for a portion of administrative costs) is considered mandatory spending and is not subject to the appropriations process.", "Medicare is expected to be a high-priority issue in the current Congress. The program has a significant impact on beneficiaries and other stakeholders as well as on the economy in general through its coverage of important health care benefits for the aged and disabled, the payment of premiums and other cost sharing by those beneficiaries, its payments to providers who supply those health care services, and its interaction with other insurance coverage. Projections of future Medicare expenditures and funding indicate that the program will place increasing financial demands on the federal budget and on beneficiaries. In response to these concerns, Congress may consider a range of Medicare reform options, from making changes within the current structure, including modifying provider payments and revising existing oversight and regulatory mechanisms, to restructuring the entire program. The committees of jurisdiction for the mandatory spending (benefits) portion of Medicare are the Senate Committee on Finance, the House Committee on Ways and Means, and the House Committee on Energy and Commerce. The House and Senate Committees on Appropriations have jurisdiction over the discretionary spending used to administer and oversee the program."], "subsections": []}, {"section_title": "Medicare History", "paragraphs": ["Medicare was enacted in 1965 (P.L. 89-97) in response to the concern that only about half of the nation's seniors had health insurance, and most of those had coverage only for inpatient hospital costs. The new program, which became effective July 1, 1966, included Part A coverage for hospital and posthospital services and Part B coverage for doctors and other medical services. As is the case for the Social Security program, Part A is financed by payroll taxes levied on current workers and their employers; persons must pay into the system for 40 quarters to become entitled to premium-free benefits. Medicare Part B is voluntary, with a monthly premium required of beneficiaries who choose to enroll. Payments to health care providers under both Part A and Part B were originally based on the most common form of payment at the time, namely \"reasonable costs\" for hospital and other institutional services or \"usual, customary and reasonable charges\" for physicians and other medical services.", "Medicare is considered a social insurance program and is the second-largest such federal program, after Social Security. The 1965 law also established Medicaid, the federal/state health insurance program for the poor; this was an expansion of previous welfare-based assistance programs. Some low-income individuals qualify for both Medicare and Medicaid.", "In the ensuing years, Medicare has undergone considerable change. P.L. 92-603, enacted in 1972, expanded program coverage to certain individuals under 65 (the disabled and persons with end-stage renal disease (ESRD)), and introduced managed care into Medicare by allowing private insurance entities to provide Medicare benefits in exchange for a monthly capitated payment. This law also began to place limitations on the definitions of reasonable costs and charges in order to gain some control over program spending which, even initially, exceeded original projections.", "During the 1980s and 1990s, a number of laws were enacted that included provisions designed to further stem the rapid increase in program spending through modifications to the way payments to providers were determined, and to postpone the insolvency of the Medicare Part A trust fund. This was typically achieved through tightening rules governing payments to providers of services and limiting the annual updates in such payments. The program moved from payments based on reasonable costs and reasonable charges to payment systems under which a predetermined payment amount was established for a specified unit of service. At the same time, beneficiaries were given expanded options to obtain covered services through private managed care arrangements, typically health maintenance organizations (HMOs). Most Medicare payment provisions were incorporated into larger budget reconciliation bills designed to control overall federal spending.", "This effort culminated in the enactment of the Balanced Budget Act of 1997 (BBA 97; P.L. 105-33 ). This law slowed the rate of growth in payments to providers and established new payment systems for certain categories of providers, including establishing the sustainable growth rate (SGR) methodology for determining the annual update to Medicare physician payments. It also established the Medicare+Choice program, which expanded private plan options for beneficiaries and changed the way most of these plans were paid. BBA 97 further expanded preventive services covered by the program.", "Subsequently, Congress became concerned that the BBA 97 cuts in payments to providers were somewhat larger than originally anticipated. Therefore, legislation was enacted in both 1999 (Balanced Budget Refinement Act of 1999, or BBRA; P.L. 106-113 ) and 2000 (Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, or BIPA; P.L. 106-554 ) to mitigate the impact of BBA 97 on providers.", "In 2003, Congress enacted the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA; P.L. 108-173 ), which included a major benefit expansion and placed increasing emphasis on the private sector to deliver and manage benefits. The MMA included provisions that (1) created a new voluntary outpatient prescription drug benefit to be administered by private entities; (2) replaced the Medicare+Choice program with the Medicare Advantage (MA) program and raised payments to plans in order to increase their availability for beneficiaries; (3) introduced the concept of income testing into Medicare, with higher-income persons paying larger Part B premiums beginning in 2007; (4) modified some provider payment rules; (5) expanded covered preventive services; and (6) created a specific process for overall program review if general revenue spending exceeded a specified threshold.", "During the 109 th Congress, two laws were enacted that incorporated minor modifications to Medicare's payment rules. These were the Deficit Reduction Act of 2005 (DRA; P.L. 109-171 ) and the Tax Relief and Health Care Act of 2006 (TRHCA; P.L. 109-432 ). In the 110 th Congress, additional changes were incorporated in the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA; P.L. 110-173 ) and the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA; P.L. 110-275 ).", "In the 111 th Congress, comprehensive health reform legislation was enacted that, among other things, made statutory changes to the Medicare program. The Patient Protection and Affordable Care Act (ACA; P.L. 111-148 ), enacted on March 23, 2010, included numerous provisions affecting Medicare payments, payment rules, covered benefits, and the delivery of care. The Health Care and Education Affordability Reconciliation Act of 2010 (the Reconciliation Act, or HCERA; P.L. 111-152 ), enacted on March 30, 2010, made changes to a number of Medicare-related provisions in the ACA and added several new provisions. Included in the ACA, as amended, are provisions that (1) constrain Medicare's annual payment increases for certain providers; (2) change payment rates in the MA program so that they more closely resemble those in fee-for-service; (3) reduce payments to hospitals that serve a large number of low-income patients; (4) create an Independent Payment Advisory Board (IPAB) to make recommendations to adjust Medicare payment rates; (5) phase out the Part D prescription drug benefit \"doughnut hole\"; (6) increase resources and enhance activities to prevent fraud and abuse; and (7) provide incentives to increase the quality and efficiency of care, such as creating value-based purchasing programs for certain types of providers, allowing accountable care organizations (ACOs) that meet certain quality and efficiency standards to share in the savings, creating a voluntary pilot program that bundles payments for physician, hospital, and post-acute care services, and adjusting payments to hospitals for readmissions related to certain potentially preventable conditions.", "In the 112 th and 113 th Congresses, the American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240 ), the Continuing Appropriations Resolution of 2014 ( P.L. 113-67 ), and the Protecting Access to Medicare Act of 2014 (PAMA; P.L. 113-93 ) primarily made short-term modifications to physician payment updates and payment adjustments for certain types of providers. PAMA also established a new skilled nursing facility (SNF) value-based purchasing program and a new system for determining payments for clinical diagnostic laboratory tests. The Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT; P.L. 113-185 ) required that post-acute care providers\u2014defined in the law as long-term care hospitals (LTCHs), inpatient rehabilitation facilities (IRFs), SNFs, and home health agencies (HHAs)\u2014report standardized patient assessment data and data on quality measures and resource use. IMPACT also modified the annual update to the hospice aggregate payment cap and required that hospices be reviewed every three years to ensure that they are compliant with existing regulations related to patient health and safety and quality of care.", "In the 114 th Congress, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA; P.L. 114-10 ) repealed the SGR formula for calculating updates to Medicare payment rates to physicians and other practitioners and established an alternative set of methods for determining the annual updates . MACRA also introduced alternatives to the current fee-for-service (FFS) based physician payments by creating a new merit-based incentive payment system (MIPS) and put in place processes for developing, evaluating, and adopting alternative payment models (APMs). Additionally, MACRA reduced updates to hospital and post-acute care provider payments, extended several expiring provider payment adjustments, made adjustments to income-related premiums in Parts B and D, and prohibited using Social Security numbers on beneficiaries' Medicare cards. Among other changes, the Increasing Choice, Access, and Quality in Health Care for Americans Act (Division C of the 21 st Century Cures Act; P.L. 114-255 ) made adjustments to LTCH reimbursement and modified the average length of stay criteria, which determines whether a hospital qualifies as an LTCH. It also delayed payment reductions and required the Secretary of Health and Human Services (the Secretary) to make changes to how payments are determined for certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). Lastly, it allowed beneficiaries with ESRD to enroll in MA beginning January 1, 2021.", "In the 115 th Congress, the Bipartisan Budget Act of 2018 (BBA 18; P.L. 115-123 ) made a number of changes to federal health care programs, including Medicare. For example, BBA 18 included provisions designed to expand care for beneficiaries with chronic health conditions, such as promoting team-based care by providers, increasing the use of telehealth services, and expanding certain MA supplemental benefits. In addition, BBA 18 extended for five years a number of existing Medicare provisions that were set to expire (or that had temporarily expired), including the Medicare dependent hospital program and add-on payments for low-volume hospitals, rural home health services, and certain ambulance services. BBA 18 also specified payment updates for the Medicare physician fee schedule, SNFs, and home health services; reduced payments for non-emergency ambulance transports; and required modification of the home health prospective payment system starting in 2020. In addition, the act provided for indefinite authority for MA special needs plans, repealed limits on outpatient therapy services, and eliminated the IPAB. Starting in 2019, the act will require that pharmaceutical manufacturers participating in Medicare Part D provide a larger discount on brand-name drugs purchased by enrollees in the coverage gap and will create a new high-income premium category under Parts B and\u00a0D. "], "subsections": []}, {"section_title": "Eligibility and Enrollment", "paragraphs": ["Most persons aged 65 or older are automatically entitled to premium-free Part A because they or their spouse paid Medicare payroll taxes for at least 40 quarters (about 10 years) on earnings covered by either the Social Security or the Railroad Retirement systems. Persons under the age of 65 who receive cash disability benefits from Social Security or the Railroad Retirement systems for at least 24 months are also entitled to Part A. (Since there is a five-month waiting period for cash payments, the Medicare waiting period is effectively 29 months.) The 24-month waiting period is waived for persons with amyotrophic lateral sclerosis (ALS, \"Lou Gehrig's disease\"). Individuals of any age with ESRD who receive dialysis on a regular basis or a kidney transplant are generally eligible for Medicare. Medicare coverage for individuals with ESRD usually starts the first day of the fourth month of dialysis treatments. In addition, individuals with one or more specified lung diseases or types of cancer who lived for six months during a certain period prior to diagnosis in an area subject to a public health emergency declaration by the Environmental Protection Agency (EPA) as of June 17, 2009, are also deemed entitled to benefits under Part A and eligible to enroll in Part\u00a0B.", "Persons over the age of 65 who are not entitled to premium-free Part A may obtain coverage by paying a monthly premium ($437 in 2019) or, for persons with at least 30 quarters of covered employment, a reduced monthly premium ($240 in 2019). In addition, disabled persons who lose their cash benefits solely because of higher earnings, and subsequently lose their extended Medicare coverage, may continue their Medicare enrollment by paying a premium, subject to limitations.", "Generally, enrollment in Medicare Part B is voluntary. All persons entitled to Part A (and persons over the age of 65 who are not entitled to premium-free Part A) may enroll in Part B by paying a monthly premium. In 2019, the monthly premium is $135.50; however, about 3.5% of Part B enrollees pay less, due to a \"hold-harmless\" provision in the Social Security Act. Since 2007, higher-income Part B enrollees pay higher premiums. (See \" Part B Financing .\") Although enrollment in Part B is voluntary for most individuals, in most cases, those who enroll in Part A by paying a premium also must enroll in Part B. Additionally, ESRD beneficiaries and Medicare Advantage enrollees (discussed below) also must enroll in Part B.", "Together, Parts A and B of Medicare comprise \"original Medicare,\" which covers benefits on a fee-for-service basis. Beneficiaries have another option for coverage through private plans, called the Medicare Advantage (MA or Part C) program. When beneficiaries first become eligible for Medicare, they may choose either original Medicare or they may enroll in a private MA plan. Each fall, there is an annual open enrollment period during which time Medicare beneficiaries may choose a different MA plan, or leave or join the MA program. Beneficiaries are to receive information about their options to help them make informed decisions. In 2019, the annual open enrollment period runs from October 15 to December 7 for plan choices starting the following January. Since 2012, MA plans with a 5-star quality rating have been allowed to enroll Medicare beneficiaries who are either in traditional Medicare or in an MA plan with a lower quality rating at any time.", "Finally, each individual enrolled in either Part A or Part B is also entitled to obtain qualified prescription drug coverage through enrollment in a Part D prescription drug plan. Similar to Part B, enrollment in Part D is voluntary and the beneficiary pays a monthly premium. Since 2011, some higher-income enrollees pay higher premiums, similar to enrollees in Part B. Generally, beneficiaries enrolled in an MA plan providing qualified prescription drug coverage (MA-PD plan) must obtain their prescription drug coverage through that plan.", "In general, individuals who do not enroll in Part B or Part D during an initial enrollment period (when they first become eligible for Medicare) must pay a permanent penalty of increased monthly premiums if they choose to enroll at a later date. Individuals who do not enroll in Part B during their initial enrollment period may enroll only during the annual general enrollment period, which occurs from January 1 to March 31 each year. Coverage begins the following July\u00a01. However, the law waives the Part B late enrollment penalty for current workers who have primary coverage through their own or a spouse's employer-sponsored plan. These individuals have a special enrollment period once their employment ends; as long as they enroll in Part B during this time, they will not be subject to penalty.", "Individuals who do not enroll in Part D during their initial enrollment period may enroll during the annual open enrollment period, which corresponds with the Part C annual enrollment period\u2014from October 15 to December 7, with coverage effective the following January. Individuals are not subject to the Part D penalty if they have maintained \"creditable\" drug coverage through another source, such as retiree health coverage offered by a former employer or union. However, once employees retire or have no access to \"creditable\" Part D coverage, a penalty will apply unless they sign up for coverage during a special enrollment period. Finally, for persons who qualify for the low-income subsidy for Part D, the delayed-enrollment penalty does not apply."], "subsections": []}, {"section_title": "Benefits and Payments", "paragraphs": ["Medicare Parts A, B, and D each cover different services, with Part C providing a private plan alternative for all Medicare services covered under Parts A and B, except hospice. The Parts A-D covered services are described below, along with a description of Medicare's payments."], "subsections": [{"section_title": "Part A", "paragraphs": ["Part A provides coverage for inpatient hospital services, posthospital skilled nursing facility (SNF) services, hospice care, and some home health services, subject to certain conditions and limitations. Approximately 20% of fee-for-service enrollees use Part A services during a year."], "subsections": [{"section_title": "Inpatient Hospital Services", "paragraphs": ["Medicare inpatient hospital services include (1) bed and board; (2) nursing services; (3) use of hospital facilities; (4) drugs, biologics, supplies, appliances, and equipment; and (5) diagnostic and therapeutic items and services. (Physicians' services provided during an inpatient stay are paid under the physician fee schedule and discussed below in the \" Physicians and Nonphysician Practitioner Services \" section.) Coverage for inpatient services is linked to an individual's benefit period or \"spell of illness\" (defined as beginning on the day a patient enters a hospital and ending when he or she has not been in a hospital or skilled nursing facility for 60 days). An individual admitted to a hospital more than 60 days after the last discharge from a hospital or SNF begins a new benefit period. Coverage in each benefit period is subject to the following conditions:", "Days 1-60. Beneficiary pays a deductible ($1,364 in 2019). Days 61-90. Beneficiary pays a daily co-payment charge ($341 in 2019). Days 91-150. After 90 days, the beneficiary may draw on one or more of 60 lifetime reserve days, provided they have not been previously used. (Each of the 60 lifetime reserve days can be used only once during an individual's lifetime.) For lifetime reserve days, the beneficiary pays a daily co-payment charge ($682 in 2019); otherwise the beneficiary pays all costs. Days 151 and over. Beneficiary pays for all costs for these days.", "Inpatient mental health care in a psychiatric facility is limited to 190 days during a patient's lifetime. Cost sharing is structured similarly to that for stays in a general hospital (above).", "Medicare makes payments to most acute care hospitals under the inpatient prospective payment system (IPPS), using a prospectively determined amount for each discharge. Medicare's payments to hospitals is the product of two components: (1) a discharge payment amount adjusted by a wage index for the area where the hospital is located or where it has been reclassified, and (2) the weight associated with the Medicare severity-diagnosis related group (MS-DRG) to which the patient is assigned. This weight reflects the relative costliness of the average patient in that MS-DRG, which is revised annually, generally effective October 1 st of each year.", "Additional payments are made to hospitals for cases with extraordinary costs (outliers), for indirect costs incurred by teaching hospitals for graduate medical education, and to disproportionate share hospitals (DSH) which provide a certain volume of care to low-income patients. Additional payments may also be made for qualified new technologies that have been approved for special add-on payments. ", "Medicare also makes payments outside the IPPS system for direct costs associated with graduate medical education (GME) for hospital residents, subject to certain limits. In addition, Medicare pays hospitals for 65% of the allowable costs associated with beneficiaries' unpaid deductible and co-payment amounts as well as for the costs for certain other services.", "IPPS payments may be reduced by certain quality-related programs based on a hospital's quality performance. These quality-related programs include the Hospital Readmissions Reduction Program, the Hospital-Acquired Condition Reduction Program, and the Hospital Value-Based Purchasing Program. Further, hospitals may receive Medicare payment reductions for failing to demonstrate meaningful use of certified electronic health record (EHR) technology.", "Additional payment adjustments or special treatment under the IPPS may apply for hospitals meeting one of the following designations: (1) sole community hospitals (SCHs), (2) Medicare dependent hospitals, (3) rural referral centers, and (4) low-volume hospitals. ", "Certain hospitals or distinct hospital units are exempt from IPPS and paid on an alternative basis, including (1) inpatient rehabilitation facilities, (2) long-term care hospitals, (3) psychiatric facilities including hospitals and distinct part units, (4) children's hospitals, (5) cancer hospitals, and (6) critical access hospitals."], "subsections": []}, {"section_title": "Skilled Nursing Facility Services", "paragraphs": ["Medicare covers up to 100 days of posthospital care for persons needing skilled nursing or rehabilitation services on a daily basis. The SNF stay must be preceded by an inpatient hospital stay of at least 3 consecutive calendar days, and the transfer to the SNF typically must occur within 30 days of the hospital discharge. Medicare requires SNFs to provide services for a condition the beneficiary was receiving treatment for during his or her qualifying hospital stay (or for an additional condition that arose while in the SNF). There is no beneficiary cost sharing for the first 20 days of a Medicare-covered SNF stay. For days 21 to 100, beneficiaries are subject to daily co-payment charges ($170.50 in 2019). The 100-day limit begins again with a new spell of illness.", "SNF services are paid under a prospective payment system (PPS), which is based on a per diem urban or rural base payment rate, adjusted for case mix (average severity of illness) and area wages. The per diem rate generally covers all services, including room and board, provided to the patient that day. The case-mix adjustment is made using the resource utilization groups (RUGs) classification system, which uses patient assessments to assign a beneficiary to one of 66 groups that reflect the beneficiary's expected use of services. Patient assessments are done at various times during a patient's stay and a beneficiary's designated RUG category can change with changes in the beneficiary's condition. Extra payments are not made for extraordinarily costly cases (\"outliers\")."], "subsections": []}, {"section_title": "Hospice Care", "paragraphs": ["The Medicare hospice benefit covers services designed to provide palliative care and management of a terminal illness; the benefit includes drugs and medical and support services. These services are provided to Medicare beneficiaries with a life expectancy of six months or less for two 90-day periods, followed by an unlimited number of 60-day periods. The individual's attending physician and the hospice physician must certify the need for the first benefit period, but only the hospice physician needs to recertify for subsequent periods. Since January 1, 2011, a hospice physician or nurse practitioner must have a face-to-face encounter with the individual to determine continued eligibility prior to the 180 th day recertification, and for each subsequent recertification. Hospice care is provided in lieu of most other Medicare services related to the curative treatment of the terminal illness. Beneficiaries electing hospice care from a hospice program may receive curative services for illnesses or injuries unrelated to their terminal illness, and they may disenroll from the hospice at any time. Nominal cost sharing is required for drugs and respite care.", "Payment for hospice care is based on one of four prospectively determined rates (which correspond to four different levels of care) for each day a beneficiary is under the care of the hospice. The four rate categories are routine home care, continuous home care, inpatient respite care, and general inpatient care. Payment rates are adjusted to reflect differences in area wage levels, using the hospital wage index. Payments to a hospice are limited by two caps; the first limits the number of days of inpatient care to 20% or less of total patient care days, and the second limits the average annual payment per beneficiary. "], "subsections": []}]}, {"section_title": "Parts A and B", "paragraphs": ["Home health services and services for individuals with end-stage renal disease are covered under both Parts A and B of Medicare."], "subsections": [{"section_title": "Home Health Services", "paragraphs": ["Medicare covers visits by participating home health agencies for beneficiaries who (1) are confined to home and (2) need either skilled nursing care on an intermittent basis or physical or speech language therapy. After establishing such eligibility, the continuing need for occupational therapy services may extend the eligibility period. Covered services include part-time or intermittent nursing care, physical or occupational therapy or speech language pathology services, medical social services, home health aide services, and medical supplies and durable medical equipment. The services must be provided under a plan of care established by a physician, and the plan must be reviewed by the physician at least every 60 days. There is no beneficiary cost sharing for home health services (though some other Part B services provided in connection with the visit, such as durable medical equipment, may be subject to cost-sharing charges).", "Home health services are covered under both Medicare Parts A and B. There are special eligibility requirements and benefit limits for home health services furnished under Part A to beneficiaries who are enrolled in both Parts A and B. For such a beneficiary, Part A pays for only postinstitutional home health services furnished for up to 100 visits during a spell of illness, while Part B covers any medically necessary home health services that exceed the 100-visit limit, as well as medically necessary home health services that do not qualify as \"postinstitutional.\" ", "For beneficiaries enrolled in only Part A or only Part B, the requirements described above do not apply. Part A or Part B, as applicable, covers all medically necessary episodes of home health care, without a visit limit, regardless of whether the episode follows a hospitalization. Regardless of whether the beneficiary is enrolled in Part A only, in Part B only, or in both parts, the scope of the Medicare home health benefit is the same, Medicare's payments to HHAs are calculated using the same methods, and beneficiaries have no cost-sharing. Home health services are paid under a home health PPS, based on 60-day episodes of care; a patient may have an unlimited number of episodes. The physician's certification of an initial 60-day episode of home health must be supported by a face-to-face encounter with the patient related to the primary reason that the patient needs home health services. Under the PPS, for episodes with five or greater visits, a nationwide base payment amount is adjusted by differences in wages (using the hospital wage index). This amount is then adjusted for case mix using the applicable Home Health Resource Group (HHRG) to which the beneficiary has been assigned. The HHRG applicable to a beneficiary is determined following an assessment of the patient's condition and care needs using the Outcome and Assessment Information Set (OASIS); there are 153 HHRGs. For episodes with four or fewer visits, the PPS reimburses the provider for each visit performed. Further payment adjustments may be made for services provided in rural areas, outlier visits (for extremely costly patients), a partial episode for beneficiaries that have an intervening event during their episode, or an agency's failure to submit quality data to CMS.", "Since January 1, 2016, home health agencies in nine states are being reimbursed under a home health value-based purchasing (HHVBP) model. These home health agencies can receive increased or decreased home health reimbursements depending on their performance across certain quality measures."], "subsections": []}, {"section_title": "End-Stage Renal Disease", "paragraphs": ["Individuals with end-stage renal disease (ESRD) are eligible for all services covered under Parts A and B. Kidney transplantation services, to the extent they are inpatient hospital services, are subject to the inpatient hospital PPS and are reimbursed by both Parts A and B. However, kidney acquisition costs are paid on a reasonable cost basis under Part A. Dialysis treatments, when an individual is admitted to a hospital, are covered under Part A. Part B covers their dialysis services, drugs, biologicals (including erythropoiesis stimulating agents used in treating anemia as a result of ESRD), diagnostic laboratory tests, and other items and services furnished to individuals for the treatment of ESRD.", "In effect since January 1, 2011, the ESRD prospective payment system (PPS) makes no payment distinction as to the site where renal dialysis services are provided. With the implementation of the ESRD PPS, Medicare dialysis payments provide a single \"bundled\" payment for Medicare renal dialysis services that includes (1) items and services included in the former payment system's base rate as of December 31, 2010; (2) erythropoiesis stimulating agents (ESAs) for the treatment of ESRD; (3) other drugs and biologicals for which payment was made separately (before bundling); and (4) diagnostic laboratory tests and other items and services furnished to individuals for the treatment of ESRD. The system is case-mix adjusted based on factors such as patient weight, body mass index, comorbidities, length of time on dialysis, age, race, ethnicity, and other appropriate factors as determined by the Secretary. Under the ESRD Quality Incentive Program, dialysis facilities that fail to meet certain performance standards receive reduced payments."], "subsections": []}]}, {"section_title": "Part B", "paragraphs": ["Medicare Part B covers physicians' services, outpatient hospital services, durable medical equipment, and other medical services. Initially, over 98% of the eligible population voluntarily enrolled in Part B, but in recent years the percentage has fallen to about 91%. About 89% of enrollees in original (FFS) Medicare use Part B services during a year. The program generally pays 80% of the approved amount (most commonly, a fee schedule or other predetermined amount) for covered services in excess of the annual deductible ($185 in 2019). The beneficiary is liable for the remaining 20%.", "Most providers and practitioners are subject to limits on amounts they can bill beneficiaries for covered services. For example, physicians and some other practitioners may choose whether or not to accept \"assignment\" on a claim. When a physician signs a binding agreement to accept assignment for all Medicare patients, the physician accepts the Medicare payment amount as payment in full and can bill the beneficiary only the 20% coinsurance plus any unmet deductible. The physician agrees to accept assignment on all Medicare claims in a given year and is referred to as a \"participating physician.\" There are several advantages to being a participating provider, including higher payment under the Medicare fee schedule, a lower beneficiary co-payment, and automatic forwarding of Medigap claims.", "Physicians who do not agree to accept assignment on all Medicare claims in a given year are referred to as nonparticipating physicians. Nonparticipating physicians may or may not accept assignment for a given service. If they do not, they may charge beneficiaries more than the fee schedule amount on nonassigned claims; however, these \"balance billing\" charges are subject to certain limits. Alternatively, physicians may choose not to accept any Medicare payment and enter into private contracts with their patients where no Medicare restrictions on payment or balance billing apply; however, this requires that physicians \"opt out\" of Medicare for two years.", "For some providers, such as nurse practitioners and physician assistants, assignment is mandatory; these providers can only bill the beneficiary the 20% coinsurance and any unmet deductible. For other Part B services, such as durable medical equipment, assignment is optional; for these services, applicable providers may bill beneficiaries for amounts above Medicare's recognized payment level and may do so without limit."], "subsections": [{"section_title": "Physicians and Nonphysician Practitioner Services", "paragraphs": ["Medicare Part B covers medically necessary physician services and medical services provided by some nonphysician practitioners. Covered nonphysician practitioner services include, but are not limited to, those provided by physician assistants, nurse practitioners, certified registered nurse anesthetists, and clinical social workers. Certain limitations apply for services provided by chiropractors and podiatrists. Beneficiary cost sharing is typically 20% of the approved amount, although most preventive services require no coinsurance from the beneficiary. ", "A number of Part B services are paid under the Medicare physician fee schedule (MPFS), including services of physicians, nonphysician practitioners, and therapists. There are over 7,000 service codes under the MPFS.", "The fee schedule assigns relative values to each service code. These relative values reflect physician work (based on time, skill, and intensity involved), practice expenses (e.g., overhead and nonphysician labor), and malpractice expenses. The relative values are adjusted for geographic variations in the costs of practicing medicine. These geographically adjusted relative values are converted into a dollar payment amount by a national conversion factor. Annual updates to payments are determined through changes in the conversion factor. ", "MACRA made several fundamental changes to how Medicare pays for physician and practitioner services by (1) changing the methodology for determining the annual updates to the conversion factor, (2) establishing a merit-based incentive payment system (MIPS) to consolidate and replace several existing incentive programs and to apply value and quality adjustments to the MPFS, and (3) establishing the development of, and participation in, alternative payment models (APMs). Prior to MACRA, the SGR system, which had been in place since BBA\u00a097, tied annual updates to the Medicare fee schedule to cumulative Part B expenditure targets. MACRA repealed the SGR methodology, established annual fee schedule updates in the short term, and put in place a new method for determining updates thereafter. As a result of the MACRA changes, the update to physician payments under the MPFS was 0% from January 2015 through June 2015; for the remainder of that year\u2014July 2015 through December 2015\u2014the payments were increased by 0.5%. In each of the next four years, 2016 through 2019, the payments were to increase by 0.5% each year; however, the BBA 18 reduced the 2019 update to 0.25%. For the next six years, from 2020 through 2025, the payment update will be 0%.", "In addition to changes to the annual update, MACRA established two pathways for payment reform, collectively referred to as the Quality Payment Program (QPP). Medicare payment to all physicians and other practitioners will be determined by which conditions of the QPP, either MIPS or APM, the participant satisfies. The MIPS is a new program that remains based on FFS rates but combines four categories of performance measures (quality of care, cost/resource use, clinical practice improvement activities, and promoting interoperability) into a single adjustment to the base MPFS payment. Following several years of data collection and feedback on measures, the MIPS adjustments will affect actual payments for the first time in 2019.", "In contrast, qualified advanced APMs are intended to be alternatives to FFS, incorporating new approaches to paying for medical care that reward quality and efficiency while de-emphasizing the number of services billed (volume of care). Proposed advanced APMs are evaluated by an ad hoc committee (the Physician-Focused Payment Models Technical Advisory Committee), which provides comments and recommendations to the Secretary as to whether new payment models meet the criteria of APMs. For 2019, there are 13 advanced APMs under the QPP, though not all are available to all physicians and practitioners, as some are restricted to certain special services (e.g., oncology care, joint replacement) or geographic locations (e.g., Vermont's Medicare ACO Initiative, Maryland's Total Cost of Care Model).", "MACRA established incentives to make APMs more attractive than MIPS. First, qualifying participants in advanced APMs are eligible for an annual prepaid bonus (paid 2019-2024). Second, beginning in 2026, there will be two update factors, one for items and services furnished by a participant in an advanced APM and another for those electing to remain in the modified FFS payment system (MIPS) that do not participate in an advanced APM. The update factor for the advanced APM participants will be 0.75%, and the update factor for MIPS will be 0.25%, causing a difference between the payment levels that will grow over time."], "subsections": []}, {"section_title": "Therapy Services", "paragraphs": ["Medicare covers medically necessary outpatient physical and occupational therapy and speech-language pathology services. Beginning in 1997 and for many years subsequently but intermittently, beneficiaries faced limits ( therapy caps ) on how much Medicare would pay for outpatient therapy services in a calendar year. ", "BBA 18 permanently repealed the outpatient therapy caps beginning January 1, 2018, and established a requirement that therapy services exceeding $3,000 would trigger a manual medical review (MMR) of the medical necessity of these services, in years 2018-2028. Beginning with 2029, the annual MMR threshold limit is to be increased by the percentage increase in the MEI, and it is to be applied separately for (1) physical therapy services and speech-language pathology services combined and (2) occupational therapy services."], "subsections": []}, {"section_title": "Preventive Services55", "paragraphs": ["Medicare statute prohibits payments for covered items and services that are \"not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member,\" which would effectively exclude the coverage of preventive and screening services. However, Congress has explicitly added and expanded Medicare coverage for a number of such services through legislation, including through MMA, MIPPA, and ACA. Under current law, if a preventive service is recommended for use by the U.S. Preventive Services Task Force (USPSTF, an independent evidence-review panel) and Medicare covers the service, all cost sharing must be waived. Also, the Secretary may add coverage of a USPSTF-recommended service that is not already covered. Coverage for preventive and screening services currently includes, among other services, (1) a \"welcome to Medicare\" physical exam during the first year of enrollment in Part B and an annual visit and prevention plan thereafter; (2) flu vaccine (annual), pneumococcal vaccine, and hepatitis B vaccine (for persons at high risk); (3) screening tests for breast, cervical, prostate, and colorectal cancers; (4) screening for other conditions such as depression, alcohol misuse, heart disease, glaucoma, and osteoporosis; and (5) intensive behavioral therapy for heart disease and for obesity. Payments for these services are provided under the physician fee schedule and/or the clinical laboratory fee schedule."], "subsections": []}, {"section_title": "Clinical Laboratory and Other Diagnostic Tests", "paragraphs": ["Part B covers outpatient clinical laboratory tests, such as certain blood tests, urinalysis, and some screening tests, provided by Medicare-participating laboratories. These services may be furnished by labs located in hospitals and physician offices, as well as by independent labs. Beneficiaries have no co-payments or deductibles for covered clinical lab services. ", "From 1984 until recently, payments for outpatient clinical laboratory services were made on the basis of the Medicare clinical laboratory fee schedule (CLFS), which set payment amounts as the lesser of the amount billed, the local fee for a geographic area, or a national limit amount. Most clinical lab services were paid at the national limit amount. The national limits were set at a percentage (74%) of the median of all local fee schedule amounts for each laboratory test code; therefore, fee schedule amounts may differ by region. In general, annual increases in clinical lab fees have been based on the percentage change in the CPI-U. However, since 1987, Congress has specified lower updates. Beginning in 2014, with certain exceptions, laboratory tests provided in hospital outpatient departments are no longer paid separately under the CLFS and are instead included in the OPPS payments. ", "PAMA introduced a new method for determining clinical laboratory payments and required CMS to base Medicare CLFS reimbursement on reported private insurance payment amounts. Medicare has been using weighted median private insurer rates to calculate Medicare payment rates for laboratory tests paid under the CLFS since January 1, 2018. These payment rates are national and do not vary by geographic area.", "Part B also covers diagnostic nonlaboratory x-ray tests and other diagnostic tests, as well as x-ray, radium, and radioisotope therapy. Generally, these services are paid for under the physician fee schedule, with beneficiaries responsible for a 20% coinsurance payment."], "subsections": []}, {"section_title": "Durable Medical Equipment, Prosthetics, Orthotics, and Supplies", "paragraphs": ["Medicare covers a wide variety of equipment and devices under the heading of durable medical equipment (DME), prosthetics, and orthotics (PO) if they are medically necessary and are prescribed by a physician. DME is defined as equipment that (1) can withstand repeated use, (2) has an expected life of at least three years (effective for items classified as DME after January 1, 2012), (3) is used primarily to serve a medical purpose, (4) is not generally useful in the absence of an illness or injury, and (5) is appropriate for use in the home. DME includes such items as hospital beds, wheelchairs, blood glucose monitors, and oxygen and oxygen equipment. It also includes related supplies (S), such as drugs and biologics that are necessary for the effective use of the product. Prosthetics (P) are items that replace all or part of a body organ or its function, such as colostomy bags, pacemakers, and artificial eyes, arms, or legs. Orthotics (O) are braces that support a weak or deformed body member, such as leg or back braces.", "Except in competitive bidding areas (CBAs, described below), Medicare pays for most durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) based on fee schedules. Medicare pays 80% of the lower of the supplier's charge for the item or the fee schedule amount. The beneficiary is responsible for the remaining 20%. In general, fee schedule amounts are updated each year by a (1) measure of price inflation, and (2) a measure of economy-wide productivity, which may result in lower fee schedule amounts from one year to the next. Since 2016, the fee schedule rates that applied outside of competitive bidding areas for certain DMEPOS have been reduced based on price information from the competitive bidding program. The reductions were phased in during 2016, and fully phased in starting in January 2017. In response to concerns that the adjusted rates were too low, the Secretary again applied the phase-in rate for rural and noncontiguous areas not subject to competitive bidding starting in June 2018. Currently, two different fee schedules apply outside of CBAs. First, in rural or noncontiguous areas, the fee schedule is a 50/50 blend of the fee schedule with and without the reductions based on information from competitive bidding (i.e., the phase-in methodology). Second, in nonrural and contiguous areas, the fee schedule amounts are fully adjusted by information from the competitive bidding program. ", "Numerous studies and investigations indicated that Medicare paid more for certain items of DME and PO than some other health insurers and some retail outlets. Such overpayments were attributed, in part, to the fee schedule mechanism of payment. MMA required the Secretary to establish a Competitive Acquisition Program for certain DMEPOS in specified areas. Instead of paying for medical equipment based on a fee schedule established by law, payment for items in competitive bidding areas was based on the supplier bids. The program started in 9 metropolitan areas in January 2011 and had expanded to 130 competitive bidding areas in 2018. However, the program has been suspended while a new bidding methodology is established. During the gap, the payments for previously competitively bid items in competitive bidding areas will be the amounts that applied on December 31, 2018, increased, yearly, by a measure of inflation. "], "subsections": []}, {"section_title": "Part B Drugs and Biologics", "paragraphs": ["Certain specified outpatient prescription drugs and biologics are covered under Medicare Part B. (However, most outpatient prescription drugs are covered under Part D, discussed below.) Covered Part B drugs and biologics include drugs furnished incident to physician services, immunosuppressive drugs following a Medicare-covered organ transplant, erythropoietin for treatment of anemia for individuals with ESRD when not part of the ESRD composite rate, oral anticancer drugs (provided they have the same active ingredients and are used for the same indications as chemotherapy drugs that would be covered if furnished incident to physician services), certain vaccines under selected conditions, and drugs administered through DME. Generally, Medicare reimburses physicians and other providers, such as hospital outpatient clinics, for covered Part B drugs and biologics at 106% of the volume weighted average sales price of all drugs billed under the same billing code, although some Part B drugs, such as those administered through DME, are reimbursed at 95% of the drug's average wholesale price. Health care providers also are paid separately for administering Medicare Part B drugs. Medicare pays 80% of the amount paid to providers, and beneficiaries are responsible for the remaining 20%. "], "subsections": []}, {"section_title": "Hospital Outpatient Department Services", "paragraphs": ["A hospital outpatient is a person who has not been admitted by the hospital as an inpatient but is registered on the hospital records as an outpatient. Generally, payments under the hospital outpatient prospective payment system (OPPS) cover the operating and capital-related costs that are directly related and integral to performing a procedure or furnishing a service on an outpatient basis. These payments cover services such as the use of an operating suite, treatment, procedure, or recovery room; use of an observation bed as well as anesthesia; certain drugs or pharmaceuticals; incidental services; and other necessary or implantable supplies or services. Payments for services such as those provided by physicians and other professionals as well as therapy and clinical diagnostic laboratory services, among others, are separate.", "Under the OPPS, the unit of payment for acute care hospitals is the individual service or procedure as assigned to an ambulatory payment classification (APC). To the extent possible, integral services and items (excluding physician services paid under the physician fee schedule) are bundled within each APC. Specified new technologies are assigned to \"new technology APCs\" until clinical and cost data are available to permit assignment into a \"clinical APC.\" Medicare's hospital outpatient payment is calculated by multiplying the relative weight associated with an APC by a conversion factor. For most APCs, 60% of the conversion factor is geographically adjusted by the wage index used for the inpatient prospective payment system. Except for new technology APCs, each APC has a relative weight that is based on the median cost of services in that APC. The OPPS also includes pass-through payments for new technologies (specific drugs, biologicals, and devices) and payments for outliers.", "The Medicare Payment Advisory Commission (MedPAC) has recommended site-neutral payment policies that base payments on the resources needed to provide high-quality care in the most efficient setting. The Bipartisan Budget Act of 2015 (BBA 15; P.L. 114-74 ) gave CMS the authority to add new restrictions on Medicare payments for services furnished in provider-based off-campus hospital outpatient departments (HOPDs) to address discrepancies between payments under the MPFS and the OPPS for similar services. In its 2019 OPPS Final Rule, CMS explicitly applies the site-neutral policy to clinic visits, the most commonly billed service in hospital outpatient departments. "], "subsections": []}, {"section_title": "Ambulatory Surgical Center Services", "paragraphs": ["An ambulatory surgical center (ASC) is a distinct entity that furnishes outpatient surgical procedures to patients who do not require an overnight stay after the procedure. According to MedPAC, most ASCs are freestanding facilities rather than part of a larger facility, such as a hospital. Medicare covers surgical and medical services performed in an ambulatory surgical center that are (1) commonly performed on an inpatient basis but may be safely performed in an ASC; (2) not of a type that are commonly performed or that may be safely performed in physicians' offices; (3) limited to procedures requiring a dedicated operating room or suite and generally requiring a postoperative recovery room or short-term (not overnight) convalescent room; and (4) not otherwise excluded from Medicare coverage.", "Medicare pays for surgery-related facility services provided in ASCs using a prospective payment system based on the OPPS. (Associated physician fees are paid for separately under the physician fee schedule.) Each of the approximately 3,500 procedures approved for payment in an ASC is classified into an APC group on the basis of clinical and cost similarity. The ASC system primarily uses the same payment groups as the OPPS; however, ASC payment rates are generally lower. The ASC weights are scaled (reduced) to account for the different mix of services in an ASC, and the ASC conversion factor (the base payment amount) is lower. A different payment method is used to set ASC payment for office-based procedures, separately payable radiology services, separately payable drugs, and device-intensive procedures. In addition, separate payments are made for certain ancillary items and services when they are integral to surgical procedures, including corneal tissue acquisition, brachytherapy sources, certain radiology services, many drugs, and certain implantable devices. The application of the site-neutral payment policy to clinic visits also affects such payments to ASCs (see discussion above)."], "subsections": []}, {"section_title": "Ambulance", "paragraphs": ["Medicare Part B covers emergency and nonemergency ambulance services to or from a hospital, a critical access hospital, a skilled nursing facility, or a dialysis facility for End-Stage Renal Disease (ESRD) beneficiaries who require dialysis when other modes of transportation could endanger the Medicare beneficiary's health. In most cases, the program covers 80% of the allowed amount for the service, and the beneficiary is responsible for the remaining 20%. ", "Generally, ambulance services are covered if (1) transportation of the beneficiary occurs; (2) the beneficiary is taken to an appropriate location (generally, the closest appropriate facility); (3) the ambulance service is medically necessary (other forms of transportation are contraindicated); (4) the ambulance provider or supplier meets state licensing requirements; and (5) the transportation is not part of a Medicare Part A covered stay. ", "Medicare covers both scheduled and nonscheduled nonemergency transports if the beneficiary is bed-confined or meets other medical necessity criteria. Medicare may also cover emergency ambulance transportation by airplane or helicopter if the beneficiary's location is not easily reached by ground transportation or if long distance or obstacles, such as heavy traffic, would prevent the individual from obtaining needed care. ", "Medicare pays for ambulance services according to a national fee schedule. The fee schedule establishes seven categories of ground ambulance services and two categories of air ambulance services. Medicare pays for different levels of ambulance services, which reflect the staff training and equipment required to meet the patient's medical condition or health needs. Generally, basic life support is provided by emergency medical technicians (EMTs). Advanced life support is provided by EMTs with advanced training or by paramedics. ", "Some rural ground and air ambulance services may qualify for increased payments. Also, ambulance providers that are CAHs, or that are entities that are owned and operated by a CAH, are paid on a reasonable-cost basis rather than the fee schedule if they are the only ambulance provider within a 35-mile radius."], "subsections": []}, {"section_title": "Rural Health Clinics and Federally Qualified Health Centers", "paragraphs": ["Medicare covers Part B services in rural health clinics (RHCs) and federally qualified health centers (FQHCs) provided by (1) physicians and specified nonphysician practitioners; (2) visiting nurses for homebound patients in home health shortage areas; (3) registered dieticians or nutritional professionals for diabetes training and medical nutrition therapy; and (4) others, as well as certain drugs administered by a physician or nonphysician practitioner.", "RHCs are paid based on an \"all-inclusive\" cost-based rate per beneficiary visit subject to a per visit upper limit, adjusted annually for inflation. For cost-reporting periods that began on or after October 1, 2014, FQHCs are paid a base payment rate per visit (with a limit, in most cases, of one billable visit per day) under a PPS methodology. Each FQHC's PPS rate is adjusted based on the location where the service is furnished using geographic adjustment factors, which are the geographic practice cost indices (GPCI) used in Medicare's physician fee schedule (MPFS). This rate is increased by 34% for new patients (those not seen in the FQHC organization within the past three years). The 34% increase also applies when a beneficiary receives a comprehensive initial Medicare visit (an initial preventive physician examination or an initial annual wellness visit) or a subsequent annual wellness visit. Effective January 1, 2017, the FQHC PPS base rate is updated annually using an FQHC-specific market basket. Medicare's payment to the FQHC is equal to 80% of the lesser of the adjusted PPS rate or the FQHC's actual charges associated with the visit, and the beneficiary is responsible for a 20% coinsurance."], "subsections": []}]}, {"section_title": "Part C, Medicare Advantage", "paragraphs": ["Medicare Advantage (MA) is an alternative way for Medicare beneficiaries to receive covered benefits. Under MA, private health plans are paid a per-person amount to provide all Medicare covered benefits (except hospice) to beneficiaries who enroll in their plan. Medicare beneficiaries who are eligible for Part A, enrolled in Part B, and do not have ESRD are eligible to enroll in an MA plan if one is available in their area. Some MA plans may choose their service area (local MA plans), while others agree to serve one or more regions defined by the Secretary (regional MA plans). In 2019, nearly all Medicare beneficiaries have access to an MA plan and approximately a third of beneficiaries are enrolled in one. Private plans may use different techniques to influence the medical care used by enrollees. Some plans, such as health maintenance organizations (HMOs), may require enrollees to receive care from a restricted network of medical providers; enrollees may be required to see a primary care physician who will coordinate their care and refer them to specialists as necessary. Other types of private plans, such as private fee-for-service (PFFS) plans, may look more like original Medicare, with fewer restrictions on the providers an enrollee can see and minimal coordination of care.", "In general, MA plans offer additional benefits or require smaller co-payments or deductibles than original Medicare. Sometimes beneficiaries pay for these additional benefits through a higher monthly premium, but sometimes they are financed through plan savings. The extent of extra benefits and reduced cost sharing varies by plan type and geography. However, MA plans are seen by some beneficiaries as an attractive alternative to more expensive supplemental insurance policies found in the private market.", "By contract with CMS, a plan agrees to provide all required services covered in return for a capitated monthly payment adjusted for the demographics and health history of their enrollees. The same monthly payment is made regardless of how many or few services a beneficiary actually uses. In general, the plan is at-risk if costs, in the aggregate, exceed program payments; conversely, the plan can retain savings if aggregate costs are less than payments. Payments to MA plans are based on a comparison of each plan's estimated cost of providing Medicare covered services (a bid) relative to the maximum amount the federal government will pay for providing those services in the plan's service area (a benchmark). If a plan's bid is less than the benchmark, its payment equals its bid plus a rebate. The size of the rebate is dependent on plan quality and ranges from 50% to 70% of the difference between the bid and the benchmark. The rebate must be returned to enrollees in the form of additional benefits, reduced cost sharing, reduced Part B or Part D premiums, or some combination of these options. If a plan's bid is equal to or above the benchmark, its payment will be the benchmark amount and each enrollee in that plan will pay an additional premium, equal to the amount by which the bid exceeds the benchmark.", "The MA benchmarks are determined through statutorily specified formulas that have changed over time. Since BBA 97, formulas have increased the benchmark amounts, in part, to encourage plan participation in all areas of the country. As a result, however, the benchmark amounts (and plan payments) in some areas have been higher than the average cost of original FFS Medicare. The ACA changed the way benchmarks are calculated by tying them closer to (or below) spending in FFS Medicare, and adjusting them based on plan quality. In a recent analysis, MedPAC found that \"over the past few years, plan bids and payments have come down in relation to FFS spending while MA enrollment continues to grow. The pressure of lower benchmarks has led to improved efficiencies and more competitive bids that enable MA plans to continue to increase enrollment by offering benefits that beneficiaries find attractive.\"", "In 2006, the MA program began to offer MA regional plans. Regional MA plans must agree to serve one or more regions designated by the Secretary. There are 26 MA regions consisting of states or groups of states. Regional plan benchmarks include two components: (1) a statutorily determined amount (comparable to benchmarks described above) and (2) a weighted average of plan bids. Thus, a portion of the benchmark is competitively determined. Similar to local plans, plans with bids below the benchmark are given a rebate, while plans with bids above the benchmark require an additional enrollee premium.", "In general, MA eligible individuals may enroll in any MA plan that serves their area. However, some MA plans may restrict their enrollment to beneficiaries who meet additional criteria. For example, employer-sponsored MA plans are generally only available to the retirees of the company sponsoring the plan. In addition, Medicare Special Needs Plans (SNPs) are a type of coordinated care MA plan that exclusively enrolls, or enrolls a disproportionate percentage of, special needs individuals. Special needs individuals are any MA eligible individuals who are either institutionalized as defined by the Secretary, eligible for both Medicare and Medicaid, or have a severe or disabling chronic condition and would benefit from enrollment in a specialized MA plan."], "subsections": []}, {"section_title": "Part D", "paragraphs": ["Medicare Part D provides coverage of outpatient prescription drugs to Medicare beneficiaries who choose to enroll in this optional benefit. (As previously discussed, Part B provides limited coverage of some outpatient prescription drugs.) In 2019, about 47 million (about 77%) of eligible Medicare beneficiaries are estimated to be enrolled in a Part D plan. Prescription drug coverage is provided through private prescription drug plans (PDPs), which offer only prescription drug coverage, or through Medicare Advantage prescription drug plans (MA-PDs), which offer prescription drug coverage that is integrated with the health care coverage they provide to Medicare beneficiaries under Part C. Plans must meet certain minimum requirements; however, there are significant variations among them in benefit design, including differences in premiums, drugs included on plan formularies, and cost sharing for particular drugs.", "Part D prescription drug plans are required to offer either \"standard coverage\" or alternative coverage that has actuarially equivalent benefits. In 2019, \"standard coverage\" has a $415 deductible and a 25% coinsurance for costs between $415 and $3,820. From this point, there is reduced coverage until the beneficiary has out-of-pocket costs of $5,100 (an estimated $8,139.54 in total spending); this coverage gap has been labeled the \"doughnut hole.\" Once the beneficiary reaches the catastrophic limit, the program pays all costs except for the greater of 5% coinsurance or $3.40 for a generic drug and $8.50 for a brand-name drug. As required by the ACA, in 2010, Medicare sent a tax-free, one-time $250 rebate check to each Part D enrollee who reached the doughnut hole. Additionally, starting in 2011, the coverage gap is being gradually reduced each year. Under the ACA, the coverage gap for both brand-name and generic drugs was to be eliminated in 2020, but Congress moved up the date to 2019 for brand-name drugs as part of BBA\u00a018. In 2019, a 70% discount is provided by drug manufacturers and Medicare pays an additional 5% of the cost of brand-name drugs dispensed during the coverage gap. In 2019, Medicare also pays 63% of the cost of generic drugs dispensed during the coverage gap and enrollees pay 37%. (See Figure 2 .) By 2020, through a combination of manufacturer discounts and increased Medicare coverage, Part D enrollees will be responsible for 25% of the costs for brand-name and generic drugs in the coverage gap (the same as during the initial coverage period). Most plans offer actuarially equivalent benefits rather than the standard package, including alternatives such as reducing or eliminating the deductible, or using tiered cost sharing with lower cost sharing for generic drugs.", "Medicare's payments to plans are determined through a competitive bidding process, and enrollee premiums are tied to plan bids. Plans are paid a risk-adjusted monthly per capita amount based on their bids during a given plan year. Part D plan sponsors determine payments for drugs and are expected to negotiate prices. The federal government is prohibited from interfering in the price negotiations between drug manufacturers, pharmacies, and plans (the so-called \"non-interference clause\").", "Part D also provides enhanced coverage for low-income enrolled individuals, such as persons who previously received drug benefits under Medicaid (known as \"dual eligibles\"\u2014enrollees in both Medicare and Medicaid). Additionally, certain persons who do not qualify for Medicaid, but whose incomes are below 150% of poverty, may also receive assistance for some portion of their premium and cost-sharing charges.", "The MMA included significant incentives for employers to continue to offer coverage to their retirees by providing a 28% federal subsidy. In 2019, the maximum potential subsidy per covered retiree is $2,264 for employers or unions offering drug coverage that is at least actuarially equivalent (called \"creditable\" coverage) to standard coverage. Employers or unions may select an alternative option (instead of taking the subsidy) with respect to Part D, such as electing to pay a portion of the Part D premiums. They may also elect to provide enhanced coverage, though this has some financial consequences for the employer or union. Alternatively, employers or unions may contract with a PDP or MA-PD to offer the coverage or become a Part D plan sponsor themselves for their retirees."], "subsections": []}]}, {"section_title": "Administration", "paragraphs": ["A variety of public and private entities are involved in carrying out Medicare administrative and oversight functions. CMS, an agency within HHS, has primary operational responsibilities. Such responsibilities include managing program finances, developing policies and regulations, setting payment rates, and developing the program's information-technology infrastructure. CMS conducts its activities through its headquarters and 10 regional offices. The Social Security Administration, however, enrolls beneficiaries into the program and issues Medicare beneficiary cards. ", "CMS also contracts with various private entities, including private health insurance companies, to help administer the program. For example, Medicare Administrative Contractors (MACs) process and pay Parts A and B reimbursement claims, enroll providers and suppliers, educate providers and suppliers on billing requirements, support appeal processes, and answer provider and supplier inquiries through call centers, as well as other activities. Qualified Independent Contractors (QICs) perform second-level reviews on appeals initially reviewed by MACs. ", "Medicare's quality assurance activities are primarily handled by State Survey Agencies and Quality Improvement Organizations (QIOs), which operate in all states and the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The State Survey Agencies are responsible for inspecting Medicare provider facilities (e.g., nursing homes, home health agencies, and hospitals) to ensure that they are in compliance with federal safety and quality standards referred to as Conditions (or Requirements) of Participation. Alternatively, some types of providers, including hospitals, may receive certification through private accrediting agencies, such as the Joint Commission. QIOs are mostly private, not-for-profit organizations that monitor the quality of care delivered to Medicare beneficiaries and educate providers on the latest quality-improvement techniques. ", "Medicare program integrity activities, such as audits, provider education, medical review, and predictive data analysis, also are carried out by a variety of government and private entities. For example, the Center for Program Integrity within CMS works together with the U.S. Department of Justice (DOJ) and the HHS Office of Inspector General (OIG) to identify and prevent fraud, waste, and abuse in Medicare. CMS also works with private contractors to carry out certain program-integrity functions. Unified Program Integrity Contractors (UPICs) perform integrity-related activities including data analysis to identify potentially fraudulent claims (bills) for Medicare Parts A and B, home health and hospice services, and DME. Similarly, the National Benefit Integrity Medicare Drug Integrity Contractor (MEDIC) is responsible for identifying and investigating fraud, waste, and abuse in Medicare Advantage and Part D. When appropriate, the UPICs and MEDIC work with and refer cases to law enforcement, including OIG and DOJ. ", "In addition, Recovery Audit Contractors (RACs) are responsible for identifying improper Medicare payments, including both underpayments and overpayments, and for recouping any overpayments made to providers. Each year, the Comprehensive Error Rate Testing (CERT) program quantifies a national improper Medicare payment rate by examining a random sample of claims. In turn, the Supplemental Medical Review Contractor targets medical reviews in areas where OIG, RACs, and CERT have identified vulnerabilities and/or questionable billing patterns to identify ways to lower improper payment rates. ", "As required by the ACA, the Center for Medicare and Medicaid Innovation (CMMI) was established in January 2011 to test and evaluate innovative payment and service delivery models to reduce program expenditures under Medicare. Examples of these models include providing payment incentives for groups of doctors, hospitals, and other health care providers (Accountable Care Organizations, or ACOs) to coordinate the services they provide to Medicare beneficiaries; bundling payments for services provided in different settings during a beneficiary's episode of care; and reimbursing health providers based on the quality of care rather than on the volume of services. CMMI also plays an important role in developing and implementing the new physician payment models required by MACRA. ", "Medicare beneficiary education and outreach duties are shared between CMS and the Social Security Administration. Each year, CMS mails out a \"Medicare and You\" handbook to beneficiaries, which provides information on their benefits for the upcoming year. Additional educational materials and responses to frequently asked questions may be found on the CMS-maintained \"Medicare.gov\" website, and beneficiaries may call a CMS-operated 1-800 number for assistance with specific questions and help with selecting and enrolling in a Medicare Advantage and/or Part D plan. A Medicare beneficiary ombudsman is also available to provide assistance to Medicare consumers with their complaints, grievances, and requests.", "The Social Security Administration is responsible for notifying low-income Medicare beneficiaries about programs that may be able to assist them with their medical and prescription drug expenses. The Social Security Administration also provides general Medicare eligibility and enrollment information on its webpage and on Social Security benefit statements. Finally, CMS partners with community-based organizations, such as State Health Insurance Assistance Programs, in every state to provide educational resources and personalized assistance to Medicare beneficiaries."], "subsections": []}, {"section_title": "Financing", "paragraphs": ["Medicare's financial operations are accounted for through two trust funds maintained by the Department of the Treasury\u2014the Hospital Insurance (HI) trust fund for Part A and the Supplementary Medical Insurance (SMI) trust fund for Parts B and D. For beneficiaries enrolled in Medicare Advantage (Part C), payments are made on their behalf in appropriate portions from the HI and SMI trust funds. HI is primarily funded by payroll taxes, while SMI is primarily funded through general revenue transfers and premiums. (See Figure 3 .) The HI and SMI trust funds are overseen by a Board of Trustees that provides annual reports to Congress.", "The trust funds are accounting mechanisms. Income to the trust funds is credited to the fund in the form of interest-bearing government securities. Expenditures for services and administrative costs are recorded against the fund. These securities represent obligations that the government has issued to itself. As long as a trust fund has a balance, the Department of the Treasury is authorized to make payments for it from the U.S. Treasury.", "Medicare expenditures are primarily paid for through mandatory spending\u2014generally Medicare pays for all covered health care services provided to beneficiaries. Aside from certain constraints in HI described below, the program is not subject to spending limits. Additionally, most Medicare expenditures (aside from premiums paid by beneficiaries) are paid for by current workers through income taxes and dedicated Medicare payroll taxes, that is, current income is used to pay current expenditures. Medicare taxes paid by current workers are not set aside to cover their future Medicare expenses."], "subsections": [{"section_title": "Part A Financing", "paragraphs": ["The primary source of funding for Part A is payroll taxes paid by employees and employers. Each pays a tax of 1.45% on the employee's earnings; the self-employed pay 2.9%. Beginning in 2013, some higher-income employees pay higher payroll taxes. Unlike Social Security, there is no upper limit on earnings subject to the tax. Other sources of income include (1) interest on federal securities held by the trust fund, (2) a portion of federal income taxes that individuals pay on their Social Security benefits, and (3) premiums paid by voluntary enrollees who are not automatically entitled to Medicare Part A. Income for Part A is credited to the HI trust fund. Part A expenditures for CY2019 are estimated to reach approximately $330 billion. Revenue to the trust fund is expected to consist of about $285 billion in payroll tax income and another $38 billion in interest and other income. The Medicare Trustees project that in CY2019, the HI trust fund will incur a deficit of approximately $7 billion. ", "As long as the HI trust fund has a balance, the Treasury Department is authorized to make payments for Medicare Part A services. To date, the HI trust fund has never run out of money (i.e., become insolvent), and there are no provisions in the Social Security Act that govern what would happen if that were to occur. Part A expenditures exceeded HI income each year from 2008 through 2015, and the assets credited to the trust fund were drawn down to make up the deficit in those years. Although the HI trust fund accumulated small surpluses in 2016 and 2017, the Medicare Trustees estimate that, beginning in 2018, expenditures will outpace income in all future years, and project that the HI trust fund will become insolvent in 2026 (i.e., the balance of the trust fund will reach $0). At that time there would no longer be sufficient funds to fully cover Part A expenditures. "], "subsections": []}, {"section_title": "Part B Financing", "paragraphs": ["Medicare Part B is financed primarily from federal general revenues and from beneficiary premiums, which are set at 25% of estimated per capita program costs for the aged. (The disabled pay the same premium as the aged.) Income for Part B is credited to the SMI trust fund. Total spending for Part B is estimated to reach about $368 billion in CY2019, with premiums financing about $98 billion of that amount and general revenues financing most of the rest. Most beneficiaries who enroll in Medicare Part B pay a monthly premium. Individuals receiving Social Security benefits have their Part B premium payments automatically deducted from their Social Security benefit checks. Due to a \"hold-harmless\" provision in the Social Security Act, an individual's Social Security check cannot decrease from one year to the next as a result of the annual Part B premium increase (except in the case of higher-income individuals subject to income-related premiums). The 2019 monthly Part B premium is $135.50. However, about 3.5% of Medicare enrollees are protected by the hold-harmless provision and pay lower premium amounts because the dollar amount of the 2019 cost-of-living increase in their Social Security benefits was not sufficient to cover the full premium increase. ", "Since 2007, higher-income Part B enrollees have paid higher premiums. In 2019, individuals whose modified adjusted gross income (AGI) exceeds $85,000 and each member of a couple filing jointly whose modified AGI exceeds $170,000 are subject to higher premium amounts. These higher-income premiums range from 35% to 85% of the value of Part B and affect about 5% of Medicare enrollees. (See Appendix B for 2019 Part B premiums and high-income thresholds.)"], "subsections": []}, {"section_title": "Part C Financing", "paragraphs": ["Payments for spending under the Medicare Advantage program are made in appropriate portions from the HI and SMI trust funds. There is no separate trust fund for Part C."], "subsections": []}, {"section_title": "Part D Financing", "paragraphs": ["Medicare Part D is financed through a combination of beneficiary premiums and federal general revenues. In addition, certain transfers are made from the states. These transfers, referred to as \"clawback payments,\" represent a portion of the amounts states could otherwise have been expected to pay for drugs under Medicaid if drug coverage for the dual eligible population had not been transferred to Part D. Part D revenues are credited to a separate Part D account within the SMI trust fund. In CY2019, total spending for Part D is estimated to reach approximately $98 billion, with about $71 billion of that amount paid for by general revenues, $16 billion from beneficiary premiums, and $12 billion from state transfers.", "In 2019, the base beneficiary premium is $33.19; however, beneficiaries pay different premiums depending on the plan they have selected and whether they are entitled to low-income premium subsidies. Additionally, beginning in 2011, higher income Part D enrollees pay higher premiums. (The income thresholds are the same as for Part B, as described above.) On average, beneficiary premiums are set at 25.5% of expected total Part D costs for basic coverage."], "subsections": []}, {"section_title": "Medicare and Sequestration", "paragraphs": ["The Budget Control Act of 2011 (BCA; P.L. 112-25 ) provided for increases in the debt limit and established procedures designed to reduce the federal budget deficit, including the creation of a Joint Select Committee on Deficit Reduction. The failure of the Joint Committee to propose deficit reduction legislation by its mandated deadline triggered automatic spending reductions (\"sequestration\" of mandatory spending and reductions in discretionary spending) in fiscal years 2013 through 2021. The American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240 ) delayed the automatic reductions by two months, while the Bipartisan Budget Act of 2013 (BBA; P.L. 113-67 ) extended sequestration for mandatory spending for an additional two years\u2014through FY2023. In 2014, the President signed into law an amended version of S. 25 ( P.L. 113-82 ), which included a provision to extend BCA's sequester of mandatory spending through FY2024. BBA 15 extended the sequestration of mandatory spending another year, through FY2025. Most recently, BBA 18 extended the BCA mandatory spending sequester through FY2027.", "Section 256(d) of the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA; P.L. 99-177 ) contains special rules for the Medicare program in the event of a sequestration. Among other things, it specifies that for Medicare, sequestration is to begin the month after the sequestration order has been issued. Therefore, as the sequestration order was issued March 2013, Medicare sequestration began April 1, 2013, and will continue through March 31, 2028.", "Under sequestration, Medicare's benefit structure generally remains unchanged; however, benefit related payments are subject to 2% reductions. In other words, most Medicare payments to health care providers, as well as to MA and Part D plans, are being reduced by 2%. Certain Medicare payments are exempt from sequestration and therefore not reduced. These exemptions include (1) Part D low-income subsidies, (2) the Part D catastrophic subsidy, and (3) Qualified Individual (QI) premiums. Some non-benefit related Medicare expenses, such as administrative and operational spending, are subject to higher reductions, 6.2% in 2019. "], "subsections": []}]}, {"section_title": "Additional Insurance Coverage", "paragraphs": ["While Medicare provides broad protection against the costs of many, primarily acute care, services, the program does not cover all services that may be used by its aged and disabled beneficiaries. In general, Medicare does not cover eyeglasses, hearing aids, dentures, or most long-term care services. Further, unlike most private insurance policies, it does not include an annual \"catastrophic\" cap on out-of-pocket spending on cost-sharing charges for services covered under Parts A and B (except for persons enrolled in Medicare Advantage plans).", "Most Medicare beneficiaries have some coverage in addition to Medicare. The following are the main sources of additional coverage for Medicare enrollees:", "Medicare Advantage. Many MA plans offer services in addition to those covered under original Medicare, reduced cost sharing, or reduced Part B or D premiums. All MA plans have a catastrophic cap. Employer Coverage. Coverage may be provided through a current or former employer. In recent years, a number of employers have cut back on the scope of retiree coverage. Some have dropped such coverage entirely, particularly for future retirees. As noted earlier, the MMA attempted to stem this trend, at least for prescription drug coverage, by offering subsidies to employers who offer drug coverage, at least as good as that available under Part D. Medigap. Individual insurance policies that supplement fee-for-service Medicare are referred to as Medigap policies. Beneficiaries with Medigap insurance typically have coverage for a portion of Medicare's deductibles and coinsurance; they may also have coverage for some items and services not covered by Medicare. Individuals select from a set of standardized plans, though not all plans are offered in all states. Medicaid. Certain low-income Medicare beneficiaries also may be eligible for full or partial benefits under their state's Medicaid program. Individuals eligible for both Medicare and Medicaid are referred to as dual eligibles. The lowest-income dual eligibles qualify for full Medicaid benefits, so that the majority of their health care expenses are paid by either Medicare or Medicaid; Medicare pays first, with Medicaid picking up most of the remaining costs. In addition to full-benefit dual eligibles, state Medicaid programs pay Medicare premiums and some cost sharing for other partial dual eligibles, who have higher income than full-benefit dual eligibles but are still considered to have low income. Other Public Sources. Individuals may have additional coverage through the Department of Veterans Affairs, or TRICARE for military retirees eligible for Medicare (and enrolled in Part B).", "In 2015, about 87% of Medicare beneficiaries had some form of additional coverage. Some persons may have had more than one type of additional coverage.", "Appendix A. Abbreviations", "Appendix B. 2019 Medicare Beneficiary Costs"], "subsections": []}]}}
{"id": "R45737", "title": "Prisoners\u2019 Eligibility for Pell Grants: Issues for Congress", "released_date": "2019-05-20T00:00:00", "summary": ["In 1994, Congress passed and President Clinton signed the Violent Crime Control and Law Enforcement Act of 1994 (P.L. 103-322), which, among other things, made prisoners ineligible for Pell Grants. However, concerns about the financial and social costs of the growing prison population combined with concerns about the recidivism rate of released prisoners have led some policymakers to reconsider whether prisoners should be allowed to use Pell Grants to help cover the cost of postsecondary coursework. Pell Grants are intended to assist in making the benefits of postsecondary education available to eligible students who demonstrate financial need.", "Under Department of Education (ED) regulations, any student who is \"serving a criminal sentence in a federal or state penitentiary, prison, jail, reformatory, work farm, or other similar correctional institution\" is not eligible to receive a Pell Grant. However, in 2015 ED used its authority under the Higher Education Act (HEA) to create the Second Chance Pell Experiment to determine if access to Pell Grants would increase the enrollment of incarcerated individuals in high-quality postsecondary correctional education programs. Under the experiment, participating institutions of higher education, in partnership with federal and/or state correctional institutions, award Pell Grants to students who are otherwise Pell-eligible except for being incarcerated in a federal or state institution. The experiment is expected to conclude in 2020.", "There are several issues policymakers might consider if Congress chooses to take up legislation to reinstate prisoners' eligibility for Pell Grants, including the following:", "The Pell Grant program is a need based program that provides funds to all that qualify. Thus, restoring Pell Grant eligibility to all federal and state prisoners will increase Pell Grant program costs. Should tax dollars be used to educate convicted offenders before they are released from prison? There are some prisoners who have been sentenced to death, whose sentences exceed their life expectancy, or who might be civilly committed indefinitely under sexually dangerous persons statutes after they have served their prison sentences. Should these prisoners be eligible to receive Pell Grants? Educational attainment is lower among incarcerated adults than non-incarcerated adults and even prisoners with high school diplomas or general education development (GED) certificates might need additional assistance to help them prepare for the rigors of postsecondary education. Is there a need for additional investment in remedial education or adult basic education for prisoners to help them prepare for postsecondary education classes? Under current law and regulation, to be eligible for a Pell Grant males who are subject to registration with the Selective Service System (SSS) must register or prove they were either not required by SSS to register or failed to register for an ED-qualifying reason. There is a higher incidence of not registering among men who have been incarcerated during some or all of the period between ages 18 to 25. Should this requirement be retained for incarcerated men, or should the process for proving exceptions be modified to facilitate Pell Grant eligibility for incarcerated men? There is a lack of rigorous evaluations that have isolated the effects postsecondary education has on recidivism, and little research on the best way to deliver postsecondary education in prisons. Should Congress take steps to promote data collection on the availability of, and participation in, postsecondary education to advance research on the effects of postsecondary education on recidivism? There can be barriers to providing educational programming in a correctional environment (e.g., lack of classroom space and trained instructors, limitations on internet access) regardless of Pell Grant receipt. Are there steps Congress could take to mitigate these barriers? A criminal history can be a barrier to securing employment in a variety of fields, either because some convicted offenders are prohibited from working in certain jobs due to a provision in law or regulation, or because employers are wary of hiring someone with a criminal history. Is there interest in undertaking any efforts to reduce the collateral consequences of a criminal history on post-release employment to allow the incarcerated student to fully realize the benefits of postsecondary education?"], "reports": {"section_title": "", "paragraphs": ["I n 1994, Congress passed and President Clinton signed the Violent Crime Control and Law Enforcement Act of 1994 ( P.L. 103-322 ). The act, among other things, made federal and state prisoners ineligible to receive Pell Grants. The Pell Grant program is the single largest source of federal grant aid supporting postsecondary education students. The Violent Crime Control and Law Enforcement Act of 1994 was passed during a period when federal and state policymakers were adopting increasingly punitive measures\u2015such as establishing new crimes, increasing penalties for certain offenses, requiring convicted offenders to serve a greater proportion of their sentences before being eligible for release, and making convicted offenders ineligible for certain government assistance programs\u2015as a means to combat violent crime. However, concerns about the financial and social costs of an increasing prison population and what prisons are doing to rehabilitate prisoners and prevent recidivism have led some policymakers to consider whether some of the \"tough on crime\" policies of the 1980s and 1990s need to be changed. ", "Policymakers have started to reconsider whether prisoners should be prohibited from utilizing Pell Grants to participate in postsecondary education programs while they are incarcerated. Legislation was introduced in the 115 th and 116 th Congresses that would have allowed incarcerated individuals to receive Pell Grants. As Senator Lamar Alexander noted \"most prisoners, sooner or later, are released from prison, and no one is helped when they do not have the skills to find a job. Making Pell grants available to them in the right circumstances is a good idea.\" In addition, both the Obama Administration and Trump Administration recommended expanding Pell Grants or other targeted federal financial aid to prisoners who are eligible for release after serving a period of incarceration. ", "However, reestablishing prisoners' eligibility for Pell Grants is not without controversy. Legislation was introduced in the 115 th Congress that would have ended the Second Chance Pell Experiment, a program begun under the Obama Administration that evaluates the effects of granting prisoners access to Pell Grants. Opposition to allowing prisoners to receive Pell Grants stems from the belief that taxpayer money should not be used to finance the education of prisoners, especially if it might compromise assistance to non-prisoners. Of note, under current Pell Grant program rules, expanding Pell Grant eligibility to prisoners would not affect the eligibility of non-prisoners or award levels of non-prisoners.", "This report provides a discussion of issues policymakers might consider if Congress takes up legislation to allow individuals incarcerated in federal and state facilities to receive Pell Grants. Before discussing these issues, the report offers a brief examination of relevant data on the prison population and the educational participation and attainment of incarcerated adults. This is followed by an overview of the history of the prohibition on allowing incarcerated individuals to receive Pell Grants, and a brief discussion of who is eligible for Pell Grants. "], "subsections": [{"section_title": "Prison Populations and Postsecondary Education", "paragraphs": ["This section provides information on the number of prisoners in the United States from 1980 to 2018 and an overview of the latest recidivism data from the Department of Justice's Bureau of Justice Statistics (BJS). It also describes the educational attainment of prisoners, and their participation in and completion of educational programs offered to them.", "The recent debate over prisoners' eligibility for Pell Grants is driven, in part, by concerns that the prohibition on prisoners receiving Pell Grants is hampering access to postsecondary education that could aid prisoners' rehabilitation, assist their efforts to find employment after being released, and help them become productive and law-abiding members of their communities. These concerns are combined with an acknowledgment that \"tough on crime\" policies contributed to a prison population that grew throughout the 1980s, 1990s, and the early 2000s and, because most offenders sentenced to prison will eventually be released, more people returning to their communities after serving a period of incarceration. The growth in the prison population combined with the Pell Grant ban means that an increasing number of prisoners are unable to participate in postsecondary education and large numbers of ex-prisoners are potentially returning to their communities without having enhanced skills or education while in prison that could aid them in becoming law-abiding citizens.", "The prison population in the United States increased steadily from 1980 to 2009 before decreasing somewhat from 2010 to 2018 (the most recent year for which prison population data are available). There were approximately 1,471,000 prisoners under the jurisdiction of state and federal correctional authorities in 2018, compared to 330,000 prisoners in 1980. Increased prison populations are a function of increases in prison admissions, among other things, but growth in the prison population absent large increases in the percentage of convicted offenders who were sentenced to death or life in prison without the possibility of parole means that there has also been an increase in the number of people released from prison annually. Approximately 626,000 prisoners were released by state and federal correctional authorities in 2016, up from approximately 158,000 prisoners released in 1980.", "A recent study by the Bureau of Justice Statistics (BJS) found that 44% of prisoners released from custody in 2005 were rearrested in the first year after their release and 83% of released prisoners had been rearrested after nine years. A review of research on corrections-based educational programming suggests that prisoners who participate in postsecondary education while incarcerated recidivate at lower rates than prisoners who do not participate. However, methodological limitations in many of the studies mean that alternative explanations for the results\u2015for example, that prisoners who took postsecondary coursework had a greater desire to reform themselves\u2015cannot be excluded. ", "Employment and educational attainment have also been linked. Data from the Census Bureau's American Community Survey (ACS) indicate that the employment rate of adults ages 25-64 increases as their level of educational attainment increases. Sixty percent of adults without a high school diploma were in the labor force in 2017 compared to 87% of adults with at least a bachelor's degree. ACS data further indicate that incarcerated individuals have lower levels of educational attainment than the general population. Figure 1 shows that approximately one-third (31%) of incarcerated adults (age 25 or older) have less than a high school diploma, while 12% of non-incarcerated adults have not completed high school. ", "While incarcerated individuals have relatively low levels of educational attainment, data suggests that a large percentage of prisoners are not advancing their education while they are incarcerated. Based on a survey of 1,546 inmates in state, federal, and private prisons, the Department of Education's National Center for Education Statistics (NCES) reported that more than half (58%) did not further their education during their current period of incarceration. The NCES study did not ask prisoners whether the cost of postsecondary education prevented them from participating, but the Institute for Higher Education Policy notes that self-financing can be a barrier for prisoners who want to participate in postsecondary education while they are incarcerated. "], "subsections": []}, {"section_title": "Background on Pell Grants for Incarcerated Individuals", "paragraphs": ["Prior to 1992, all incarcerated individuals were eligible to receive aid under Title IV of the Higher Education Act of 1965 (HEA; P.L. 89-329, as amended), including Pell Grants and loans. Pell Grants are need-based aid that is intended to be the foundation for all federal need-based student aid awarded to undergraduates. A 1982 report by the General Accounting Office (now known as the Government Accountability Office; GAO) estimated that approximately 11,000 federal and state prisoners received Pell Grants in academic year (AY) 1979-1980. ED's Office of the Inspector General (OIG) estimated that about 25,000 prisoners each year received Pell Grants during the period from 1988 to 1992. The 1982 GAO report noted that some states and schools also provided considerable financial assistance to prisoners.", "The 1980s and 1990s were marked by several policy initiatives at the state and federal level to augment penalties for convicted offenders. In addition, Congress was concerned about schools established solely to take advantage of the HEA Title IV funds provided to incarcerated students, and the possibility of high student loan default rates among individuals formerly or currently incarcerated. Some financial aid administrators questioned whether Pell Grants were the most appropriate source of rehabilitative aid for incarcerated students. The Higher Education Amendments of 1992 ( P.L. 102-325 ) limited the eligibility of incarcerated students to HEA Title IV aid in several ways:", "Individuals who were sentenced to life in prison without the possibility of parole and those who were sentenced to death were prohibited from receiving a Pell Grant. Pell Grant aid provided to incarcerated students in each fiscal year had to supplement and not supplant the level of postsecondary education assistance provided by the state to incarcerated individuals in FY1988. No incarcerated student was eligible to receive a loan (this remains current law). The cost of attendance for incarcerated students was limited to tuition and fees, and required books and supplies (this remains current law). An institution of higher education (IHE) became ineligible to participate in the HEA Title IV programs if more than 25% of its enrolled students were incarcerated (this remains current law).", "GAO published a report in 1994 in response to remaining congressional concerns regarding the use of Pell Grants by incarcerated individuals. The report provided data on the number of inmates receiving Pell Grants, described the effect of allowing incarcerated individuals to receive Pell Grants on grants for other needy students, and reviewed the research at that time on the effect of correctional education on recidivism rates. Using ED data for AY1993-1994, GAO reported that approximately 23,000 Pell Grant recipients were incarcerated (less than 1% of all recipients), and the average amount of the Pell Grant was the same regardless of whether individuals were incarcerated or not. Of Pell Grant recipients who were incarcerated, 39% were enrolled in public two-year IHEs, 35% were enrolled in private nonprofit four-year IHEs, and 12% were enrolled in public four-year IHEs. The remaining 14% of incarcerated students were enrolled in public, private nonprofit, or private for-profit programs that granted certificates (10%) or private nonprofit or private for-profit two-year IHEs (4%). GAO indicated that because the Pell Grant program operates as an entitlement for students, the number and amount of Pell Grants for incarcerated individuals had no effect on Pell Grant availability for individuals who were not incarcerated. Finally, GAO concluded that the studies on incarcerated students' participation in educational programming and recidivism \"have resulted in conflicting findings\" because isolating the effect of correctional education on recidivism was not possible in existing studies for two primary reasons: many interrelated factors affecting recidivism are difficult to define and measure, and an experimental design that randomly assigns prisoners to treatment and control groups would be necessary to eliminate the effect of motivated prisoners self-selecting into correctional education programs.", "The culmination of the \"tough on crime\" approach in setting federal policy was the enactment of the Violent Crime Control and Law Enforcement Act of 1994 (VCCLEA, P.L. 103-322 ). The act, among other things, authorized grants to assist states that enacted \"truth in sentencing\" laws with building new prisons, expanded the number of offenses for which the federal death penalty applies, and established a series of new federal crimes. With respect to the HEA, the VCCLEA eliminated the supplement not supplant provision relating to Pell Grant funds made available to incarcerated individuals and the prohibition on Pell Grant receipt by individuals sentenced to life in prison or the death penalty. The VCCLEA also established the current prohibition against any individuals incarcerated in federal and state penal institutions receiving Pell Grants.", "As a likely consequence of the newly enacted prohibition on prisoners receiving Pell Grants, combined with previously enacted prohibitions on the receipt of HEA Title IV student loans, the availability of postsecondary education programs to state prisoners and their enrollment in such programs declined. After prisoners were prohibited from receiving Pell Grants, approximately half of the postsecondary correctional education programs closed and those that remained were reduced in size. In addition, from 1991 to 2004 the percentage of state prison inmates enrolling in college courses declined from 14% to 7%.", "In 2008, Congress passed and President George W. Bush signed into law the Higher Education Opportunity Act ( P.L. 110-315 ), which prohibited those individuals who upon completion of a period of incarceration for a forcible or nonforcible sexual offense were subject to an involuntary civil commitment from receiving Pell Grants. This prohibition was partially in response to the fact that 54 individuals who were civilly committed sex offenders in Florida had received Pell Grants in 2004."], "subsections": []}, {"section_title": "Current Pell Grant Eligibility", "paragraphs": ["Under Department of Education (ED) regulations for HEA Title IV, an incarcerated student is defined as any \"student who is serving a criminal sentence in a federal, state, or local penitentiary, prison, jail, reformatory, work farm, or other similar correctional institution.\" The definition does not include an individual who is confined in a correctional facility prior to the imposition of any criminal sentence or juvenile disposition, such as an individual confined in a local jail while awaiting trial. Similarly, it does not include students confined or housed in less restrictive settings such as halfway houses or home detention, or who are serving their sentences only on weekends.", "To be eligible for a Pell Grant, a student must meet requirements established by Title IV of the HEA. Some requirements apply to all of the HEA Title IV student aid programs, and some are specific to the Pell Grant program. Among the requirements generally applicable to the HEA Title IV student aid programs for AY2018-2019 are the following: ", "Students must have a high school diploma or a general educational development (GED) certificate; must have completed an eligible homeschool program; or must have shown an \"ability to benefit\" from postsecondary education and either be enrolled in an eligible career pathway program or have been initially enrolled in an eligible postsecondary program prior to July 1, 2012. Males who are subject to registration with the Selective Service System (SSS) must be registered with the Selective Service. Students must not be in default on any HEA Title IV student loan.", "Specific eligibility requirements for the Pell Grant program that may be germane to criminal justice involved individuals include, but are not limited to, the following:", "Students must not be incarcerated in a federal or state penal institution. Students must not be subject to an involuntary civil commitment following incarceration for a sexual offense (as determined under the Federal Bureau of Investigation's (FBI's) Uniform Crime Reporting (UCR) Program). ", "Therefore, students serving a sentence in a federal or state penal institution, operated by a federal or state government or a contractor, are ineligible for Pell Grants. Other alleged and convicted offenders, however, may be eligible for a Pell Grant. Those incarcerated in a juvenile justice facility or a local or county jail may be eligible. Individuals in a halfway house or home detention, serving a jail sentence only on weekends, or confined prior to the imposition of any criminal sentence or juvenile disposition are eligible for Pell Grants. ", "The other HEA Title IV student aid programs also have eligibility rules for incarcerated students (see regulatory definition above). No incarcerated individual is eligible for any of the loan programs. Incarcerated students are eligible for the Federal Supplemental Educational Opportunity Grant (FSEOG) program and the Federal Work-Study (FWS) program. Despite statutory eligibility, it is unlikely that incarcerated individuals would receive FSEOG or FWS aid because such funds are limited, the aid is subject to additional eligibility requirements established by each IHE, and offering FWS jobs in a correctional setting would be difficult."], "subsections": []}, {"section_title": "Second Chance Pell Experiment", "paragraphs": ["In 2015, ED initiated the Second Chance Pell Experiment to determine if access to Pell Grants would increase the enrollment of incarcerated individuals in high-quality postsecondary education programs. The initiative was part of the \"Obama Administration's commitment to create a fairer, more effective criminal justice system, reduce recidivism, and combat the impact of mass incarceration on communities.\" HEA Section 487A authorizes the Secretary of Education to waive certain HEA Title IV statutory or regulatory requirements, except for requirements related to award rules, at a limited number of IHEs in order to provide recommendations for proposed regulations and initiatives. The Secretary used this waiver authority to implement the Second Chance Pell Grant Experiment. In promoting the experiment, ED highlighted research finding that making postsecondary education and training opportunities available to incarcerated individuals increases educational attainment, reduces recidivism, and improves post-release employment opportunities and earnings.", "Under the Second Chance Pell Experiment, participating IHEs, in partnership with federal and/or state prisons, award Pell Grants to individuals who are otherwise Pell-eligible except that they are incarcerated in a federal or state prison. Priority is given to students who are likely to be released from prison within five years. Incarcerated students must enroll in educational programs that lead to high-demand occupations from which such individuals are not legally barred. Education programs may not be offered through correspondence, but may be offered online. In addition, students must be able to complete such programs either while incarcerated or after being released. Participating IHEs must offer academic and career guidance, as well as transition services. Finally, the Pell Grant aid offered under the experiment must supplement and not supplant such postsecondary education assistance provided by the IHE, the prison, or another source.", "There are 65 IHEs participating in the experiment, enrolling approximately 8,500 inmates in the first year, 11,000 in the second year, and 10,000 in the third year of the experiment. More than one-half of the participating IHEs are public two-year colleges. Approximately two-thirds of participating IHEs already provided postsecondary correctional education prior to joining the experiment. Some IHEs experienced start-up difficulties related to accreditation approvals, the availability of adequate facilities and space, recruiting eligible prisoners, and enrolling a sufficient number of prisoners to make the program financially viable. Of the programs originally planned, approximately 35% were designed to award a postsecondary certificate, 47% were designed to award an associate's degree, and 18% were designed to award a bachelor's degree.", "ED generally issues reports of experiments that analyze and summarize IHE-reported outcomes and \"address how the experiment: reduced administrative burden; avoided creating additional costs to taxpayers; and improved aid delivery services or otherwise benefited students.\" The reports are intended to inform federal legislative decisionmaking. In February 2019, ED announced that the experiment would be extended an additional year but did not provide an estimate of the release of any data or an evaluation of the program. ", "In April 2019, GAO reported on the status of the Second Chance Pell Experiment (hereafter referred to as the 2019 GAO report ). According to the report, in AY2017-2018, 59 schools disbursed $22.3 million in Pell Grants to over 6,000 prisoners under the experiment. Schools reported various challenges implementing the experiment including, but not limited to, prisoners not being registered for Selective Service, prisoners being in default on a HEA Title IV student loan, and prisoners and school staff having difficulty proving prisoner income and financial need. "], "subsections": []}, {"section_title": "Select Issues and Discussion", "paragraphs": ["Many prisoners are interested in participating in postsecondary education, but one of the most significant barriers to prisoners taking college-level classes is their lack of resources. Providing access to Pell Grants could help reduce this barrier. However, there are several issues policymakers might consider before expanding access to Pell Grants, including overall program costs, whether the federal government should support more research on the effects of postsecondary education in correctional institutions, obstacles to providing access to postsecondary education in a correctional environment, and barriers returning prisoners might face when trying to find post-release employment related to their education. "], "subsections": [{"section_title": "Increased Pell Grant Program Costs", "paragraphs": ["Expanding Pell Grant eligibility to some or all federal and state prisoners will increase Pell Grant program costs. The Pell Grant program is funded by a mix of annual discretionary appropriations and permanent mandatory appropriations. Expanding eligibility would increase both discretionary and mandatory costs.", "The Pell Grant program is often referred to as a quasi-entitlement because, since AY1990-1991, eligible students receive the Pell Grant award level calculated for them without regard to available appropriations. Expanding eligibility without instituting other provisions would not reduce awards for any otherwise eligible individuals and would only expand the pool of eligible individuals. ", "The increase in program costs that would result from making federal and state prisoners eligible for Pell Grants who are currently ineligible would be limited by several provisions under current law:", "Students must have a high school diploma (or equivalent) or be enrolled in an eligible career pathway program that leads to high school completion and postsecondary credential attainment. As discussed above, 31% of incarcerated individuals do not have a high school diploma (or equivalent) and thus would only be eligible for a Pell Grant if enrolled in an eligible career pathway program. Students must not have already completed the curriculum requirements of a bachelor's or higher degree. As discussed above, 3% of incarcerated individuals have a bachelor's or higher degree. The Pell Grant award for incarcerated students may not exceed the cost of tuition and fees and, if required, books and supplies. The average AY2017-2018 Pell Grant was $4,032 for all undergraduates and $3,541 for students participating in the Second Chance Pell Experiment."], "subsections": []}, {"section_title": "Eligibility Factors", "paragraphs": ["The following sections describe subgroups of individuals that may require additional consideration when extending Pell Grant eligibility."], "subsections": [{"section_title": "Pell Grant Eligibility for Prisoners Who Might Not Be Released", "paragraphs": ["If policymakers choose to reinstate prisoners' eligibility for Pell Grants, part of the justification for doing so is that taking college coursework might help prisoners obtain post-release employment and reduce their risk of recidivism. However, this reasoning raises a question about whether prisoners who might never be released should be eligible to receive Pell Grants. The current Second Chance Pell Experiment excludes individuals who are unlikely to be released and gives priority to students who are expected to be released within five years. Prisoners who might never be released include those who have been sentenced to periods of incarceration that would realistically exceed their natural life spans and those convicted of sex offenses who could be civilly committed to a secure psychiatric facility after serving their sentences because they are at high risk of committing a violent sex offense.", "A study conducted by the Sentencing Project found that in 2016, a total of 161,957 state and federal prisoners were serving life sentences. This includes 108,667 prisoners sentenced to life with the possibility of parole (LWP) and 53,290 prisoners sentenced to life without parole (LWOP). Prisoners serving life sentences accounted for one out of every nine prisoners in 2016. The Sentencing Project also found that another 44,311 prisoners were serving virtual life sentences, which were defined as sentences where a prisoner would have to serve at least 50 years of incarceration before being eligible for release. Virtual lifers , while still technically eligible for release (i.e., they were not sentenced to LWOP), are prisoners whose sentences are so long they will most likely spend the rest of their lives in prison. Of note, the Sentencing Project's definition of virtual lifers does not include older prisoners who are sentenced to incarceration and might serve less than 50 years, but because of their advanced age are likely to die in prison. The number of prisoners serving life and virtual life sentences accounted for 14% of all inmates in 2016. ", "The Sentencing Project's research found that a handful of states accounted for the majority of prisoners with LWP, LWOP, and virtual life sentences. Four states (California, Georgia, New York, and Texas) accounted for 55% of all prisoners serving LWP. Four states (California, Florida, Louisiana, and Pennsylvania) and the Bureau of Prisons (BOP) accounted for 53% of all prisoners serving LWOP. Five states (Illinois, Indiana, Louisiana, Pennsylvania, and Texas) accounted for 55% of prisoners with virtual life sentences. ", "The Sentencing Project also found that from 2003 to 2016 there was a 27% increase in the number of prisoners serving any type of life sentence, though the number of prisoners sentenced to LWOP increased by 59% while the number of prisoners sentenced to LWP increased by 18%.", "When debating about possibly expanding eligibility for Pell Grants, policymakers might also consider whether civilly committed sex offenders, who might never be released, should be allowed to participate in the program. Laws regarding the civil commitment of sex offenders (also known as sexually violent predator or sexually dangerous persons statutes) allow for the involuntary civil commitment of certain sex offenders at the conclusion of their prison sentences. As of 2015, 20 states, the District of Columbia, and the federal government had laws that allowed for the civil commitment of sexually violent predators and sexually dangerous persons. Individuals who are civilly committed are held until courts deem that they no longer meet the criteria for civil commitment. These individuals are held in secure treatment facilities. In general, for someone to be civilly committed the individual must have committed a qualifying sex offense, have a qualifying mental condition (e.g., a personality disorder or a paraphilia ), and be identified as high risk to commit another sexual offense as a result of the disorder.", "The Prison Policy Initiative reported that 5,430 offenders were civilly committed in 2016 in 15 states. Unlike most prison sentences, there is no set period of time for when someone who is civilly committed will be released. For example, Minnesota has yet to release any civilly committed sex offenders committed to its custody since the mid-1980s, and 40 individuals have died in custody. "], "subsections": []}, {"section_title": "Pell Grant Eligibility of Individuals Who Lack Selective Service Registration", "paragraphs": ["Congress may consider whether to amend the HEA Title IV and Pell Grant eligibility requirement for Selective Service registration because it is an obstacle for some men who have been involved in the criminal justice system. Most men aged 18\u201325 are required to register with the SSS. Men who are required to register and do not do so are ineligible for Pell Grants, unless they did not knowingly and willfully fail to register. Men ages 18-25 who are incarcerated are not required to register with the Selective Service while they are in prison. Some research shows that men who have been involved in the criminal justice system are at a higher risk for failing to register due to misunderstandings and misinformation. ", "Under current regulations, a man who did not register may still achieve eligibility through one of several processes. If he was not required to register, he can provide evidence of his exception. If he is age 25 or younger, he can register. If he was unable to register for reasons beyond his control, he can provide evidence of the circumstances that prevented him from registering. If he has already served on active duty in the Armed Forces, he can provide evidence of such. If he did not knowingly and willfully fail to register, he may submit to his school an advisory opinion from the SSS that does not dispute his claim that he did not knowingly and willfully fail to register, and the school must not have evidence to the contrary. For incarcerated or previously incarcerated men 26 and older who failed to register, proving Pell Grant eligibility may be cumbersome. Some IHEs in the Second Chance Pell Experiment have advocated waiving the Selective Service registration requirement for incarcerated individuals in order to increase enrollments. The waiver could potentially reduce or eliminate the burden of proving eligibility or establishing eligibility for men 26 and older who were incarcerated at any time during the ages of 18 to 25."], "subsections": []}, {"section_title": "Pell Grant Eligibility of Individuals Who Have Not Completed Secondary School", "paragraphs": ["If postsecondary education completion by prisoners is a policy objective, the large proportion of prisoners who have not completed a secondary school education may also need to be addressed. As shown previously in Figure 1 , approximately one-third of incarcerated individuals have not completed high school. There are two primary federal approaches for educating adults who have not completed secondary school: supporting elementary and secondary education and supporting postsecondary career pathways. ", "Many correctional systems spend a significant proportion of available funding on providing Adult Basic Education (ABE) and GED preparation courses. Even in cases where prisoners have a high school diploma or GED, they might still need remedial education in order to complete and pass college-level courses. Congress might consider whether there is a need for additional funding or a restructuring of programs to support ABE and GED preparation courses in prisons, or to diagnose learning disabilities in prisoners. There are several federal programs that provide some support that can be used for the secondary education of prisoners:", "The Adult Education and Family Literacy Act (AEFLA; P.L. 113-128 ), which provides grants to states for basic education for out-of-school adults, specifies that each state must subgrant funds to support educational activities for individuals in correctional institutions and for other institutionalized individuals. AEFLA provides formula grants to states that award competitive grants and contracts to local providers. States may award up to 20% of the funds made available to local providers for programs for corrections education and the education of other institutionalized individuals. The Strengthening Career and Technical Education for the 21 st Century Act ( P.L. 115-224 ) supports the development of career and technical education (CTE) programs that impart technical or occupational skills at the secondary and postsecondary levels. The majority of funding is awarded as formula grants to states, which are authorized to spend up to 2% of their allocation to serve individuals in state institutions, such as state correctional institutions, juvenile justice facilities, and educational institutions that serve individuals with disabilities. The Second Chance Act of 2007, as amended ( P.L. 110-199 ), authorized a series of competitive grants to support offender reentry programs operated by state, local, and tribal governments and nonprofit organizations. These programs include the Adult and Juvenile State and Local Offender Demonstration Program, which may support adult education and training, among several allowable uses. Another of these programs is the Grant Program to Evaluate and Improve Educational Methods at Prisons, Jails, and Juvenile Facilities, which authorizes grants to evaluate and improve academic and vocational education in prisons, jails, and juvenile facilities.", "Under current provisions in the HEA, schools may establish career pathway programs for students who are not high school graduates but can demonstrate an ability to benefit from postsecondary education. Students enrolled in career pathway programs may be eligible for Pell Grants and other HEA Title IV aid. A career pathway program combines occupational skills training, counseling, workforce preparation, high school completion, postsecondary education, and postsecondary credential attainment. The ability to benefit may be demonstrated by the student passing an examination approved by ED to be eligible for federal student aid, or by successfully completing six credit hours or 225 clock hours of college work applicable to a certificate or degree offered by a postsecondary institution. Ability to benefit tests must be proctored by a certified test administrator and given at an assessment center facility. Administering ability to benefit tests to incarcerated individuals might be challenging. If incarcerated individuals do not take the ability to benefit test, they would have to successfully complete six credit hours or 225 clock hours of college work to become eligible for HEA Title IV aid. Should Congress want to take additional steps to promote postsecondary educational pursuits of incarcerated individuals, it might consider encouraging the development of career pathway programs in correctional environments such that prisoners who have not completed high school may pursue postsecondary education with the aid of a Pell Grant."], "subsections": []}]}, {"section_title": "Additional Research on the Effects of Postsecondary Education in Correctional Institutions", "paragraphs": ["As outlined above, there is a lack of regular, comprehensive data on postsecondary education in correctional facilities. The evaluation literature on the effect of postsecondary education on recidivism would benefit from more routinely collected and complete data on postsecondary education that allows for methodologically rigorous studies. This suggests that there might be a role for the federal government to play in collecting and reporting data on postsecondary education in correctional institutions and supporting more rigorous evaluations of postsecondary education for prisoners.", "BJS collects data on the prison population through its annual National Prisoner Statistics (NPS) program and its Survey of Prison Inmates (SPI). The First Step Act of 2018 ( P.L. 115-391 ) requires BJS to collect data through the NPS on the number of federal prisoners who have a high school diploma or GED prior to entering prison, the number who obtain a GED while incarcerated, and the number of BOP facilities with remote learning capabilities. The SPI collects data related to prisoner participation in education and job training, but the data are collected sporadically. The most recent iteration was conducted in 2016. Prior to that, BJS conducted the SPI in 1974, 1979, 1986, 1991, 1997, and 2004, when it was known as the Survey of Inmates in State and Federal Correctional Facilities. Neither the NPS or the SPI collects data on the types of degrees prisoners seek, how many receive a postsecondary certificate or degree, how much time they spend taking courses, how instruction is provided (e.g., onsite, through correspondence courses, online), or how postsecondary education programs are funded. Nonetheless, BJS has decades of experience collecting data on prison inmates from state correctional agencies and BOP. Congress could consider expanding BJS's mandate under 34 U.S.C. Section 10132 to require the collection and reporting of more detailed data on postsecondary education in correctional facilities. However, states participate in the NPS program voluntarily, so if data collection efforts become too burdensome there is the possibility that some state correctional systems will decline to participate. As a way of promoting state participation in data collection efforts, policymakers might also consider whether to make participation a condition of receiving grant funds under a program such as the Edward Byrne Memorial Justice Assistance Grant (JAG) program. ", "One limitation of both of the NPS program and the SPI is that they only collect data on prisoners while they are incarcerated. Variables that are necessary to evaluate the effectiveness of postsecondary correctional education programs\u2015such as rearrest, reconviction, and reincarceration; post-release educational attainment; post-release employment, and the nature of post-release employment; to just name a few\u2015can only be collected after prisoners have been released, and sometimes several years after they have been released. Even though there are existing data sources that could be used to measure recidivism (e.g., criminal history records data maintained by the Federal Bureau of Investigation (FBI) or in state criminal history repositories), a new federally sponsored longitudinal data collection effort to track whether prisoners attain education credentials post-release or find employment post-release would enable additional research on the relationship between education and post-incarceration success. In addition, policymakers might consider whether to authorize the FBI to share criminal history records with non-governmental research organizations for the purpose of promoting and conducting recidivism research. ", "Congress might also consider other ways to promote research on prisoners' postsecondary education and its impact on recidivism and employment. The literature on postsecondary correctional education lacks studies that utilized randomized controlled trials, which are regarded as the gold standard of social science research. While randomized controlled trials could help draw more definitive conclusions about whether participation in postsecondary education reduces recidivism, it might also undermine the aims of the proposed policy change. A randomized controlled trial would require prisoners to be randomly assigned to a treatment group (postsecondary education programming) or a control group (no postsecondary education programming). This means that some prisoners who might have otherwise enrolled in postsecondary education programming would not be allowed to access it while incarcerated. Although, there are ethical considerations when conducting randomized controlled trials on prisoners and they are afforded additional protections as subjects of behavioral science research studies. Congress could also promote more rigorous evaluations of postsecondary correctional education by providing funding to the National Institute of Justice\u2015the research, development, and evaluation agency of the Department of Justice\u2015that is specifically dedicated for this purpose.", "It has been argued that evaluations of correctional education programs and other prison-based programming should focus on outcomes other than just recidivism and employment. Cessation of criminal activity is considered an important marker of rehabilitation. However, the emphasis on evaluating how correctional education programs affect recidivism means that little is known about the process whereby education programs help shape how released prisoners re-integrate into their communities. As noted previously, correctional education is believed to help prisoners improve their cognitive skills and abilities, which, in turn, enables them to continue their education and/or training upon release and secure gainful employment. While there is value in improving the quality of evaluations that assess the effect of correctional education on recidivism and employment, there might be value as well in better understanding how the availability of, and participation in, correctional education programs affect changes in motivation, literacy gains, development of concrete skills, disciplinary actions, postsecondary credits earned, and completion of educational programs.", "Policymakers might also consider whether the federal government should support research into ways to improve the delivery of postsecondary correctional education programs. There is a dearth of methodologically rigorous research on the best way to deliver postsecondary education in prison. For example, prior research seldom accounted for differences in the initial educational level of prisoners. Additionally, there is little research on the effectiveness of different modalities of providing postsecondary education (e.g., in-person instruction, correspondence courses, online learning) or whether the amount of time spent engaging in postsecondary education (i.e., the dosage ) has an effect on recidivism. "], "subsections": []}, {"section_title": "Obstacles to Providing Access to Postsecondary Education in a Correctional Environment", "paragraphs": ["The following sections describe considerations unique to providing and delivering postsecondary education in a correctional environment."], "subsections": [{"section_title": "Unaccommodating Correctional Environments", "paragraphs": ["Even if Congress were to provide access to Pell Grants for certain prisoners, factors related to the correctional environment might limit the ability of prisoners to participate in postsecondary education programs. Three recurring resource challenges identified by ED and GAO are space, access to educational equipment or supplies, and trained staff. In 2016, 14 states and BOP held more inmates than their maximum capacity. Correctional systems and institutions that are over capacity might not be able to provide sufficient classroom space to meet an increase in demand for postsecondary instruction. Prisons in rural areas might also have problems finding instructors who are nearby or are willing to commute to the prison in order to teach college courses. Additionally, even trained educators will require training on effective teaching strategies for correctional students and techniques and procedures for working in restrictive prison environments. ", "It is not unusual for prisoners to be moved from one prison facility to another within the same state or within the federal prison system. Common reasons for the transfer of federal prisoners include security reclassification, medical treatment, and program participation. A prisoner who is transferred from one facility to another would be unable to complete a college course he or she is currently enrolled in if it is an in-person-only class not offered at the facility to which the prisoner is transferred. Programs that are accessible, integrated, and transferrable in every prison in a state or across the federal prison system may reduce the need for transferred prisoners to restart their postsecondary education in a new facility. The Institute for Higher Education Policy (IHEP) argued that many of the resource problems that limit access to postsecondary education could be addressed by providing more access to online courses. However, many correctional agencies limit the ability of prisoners to access the internet. Congress might consider whether there are steps that could be taken to promote online postsecondary courses for prisoners. For example, Congress could support a program to develop and test security protocols for prisoner internet access that allows them access to specific, but not all, web content."], "subsections": []}, {"section_title": "Complicated Systems of Responsibility for Correctional Education", "paragraphs": ["There are a variety of arrangements through which educational programming is provided to prisoners. In some states, correctional education is the responsibility of the correctional agency; in other states, a separate entity is responsible for providing it, either through a correctional school district or through the state's education department. Having separate agencies responsible for confining prisoners and providing prisoner education can add additional layers of bureaucracy and the agencies' missions might, at times, conflict. Beyond this, in many states the warden of each correctional institution is the one who makes the decision about whether postsecondary education courses will be offered at the prison. Also, the warden can cancel postsecondary courses if he or she objects to them. ", "A 2019 GAO report described the importance of schools coordinating with prison staff and state corrections agencies. This suggests that for an effective expansion of educational activities to occur, there might be a need for states and BOP to have a uniform or coordinated curriculum across all correctional facilities in their respective systems. Policymakers might consider whether there is a need to promote more consistent policies in how states provide correctional education. For example, Congress could place conditions on federal funds to require state correctional departments to determine what type of postsecondary education courses will be available at each facility. "], "subsections": []}, {"section_title": "Inadequate Education Program Design", "paragraphs": ["The educational programs accessed by prisoners may not be designed to increase their academic and post-release success given the unique attributes of the prison population. ED provides a research-based guide for developing education programs to help incarcerated adults transition successfully to their communities. For example, incarcerated individuals may benefit from supportive services. Support services may include assistance selecting academic programs, tutoring, assistance with study skills, assistance with financial literacy, academic and employment counseling, or other academic supports to help them succeed in individual courses and their program of study. For example, some individuals may require advice and assistance in choosing courses, educational programs, and careers that will transfer more easily to practical employment in their post-release communities of choice. Practical employment options for former prisoners are those that provide earnings that permit self-sufficiency, are open to individuals with a criminal record, and are available despite any possible residential or transportation constraints. ", "Some individuals may want to complete their program of study post-release. An incarcerated student who begins a postsecondary degree program through a postsecondary correctional education program may not be able to complete such degree before release and would benefit from the postsecondary correctional education program credits being fully transferrable or articulated to an educational program available to noninstitutionalized students. Strategic partnerships that ensure institutional courses are fully transferrable and articulated to multiple academic programs may increase the program completion rate. "], "subsections": []}]}, {"section_title": "Increasing Opportunities for Post-Release Employment", "paragraphs": ["In addition to issues related to providing greater access to postsecondary education in prisons, policymakers might also consider issues related to prisoners being able to utilize the education and skills they learned during their coursework to secure post-release employment.", "Vocational certificates are a form of postsecondary credential that is popular with prisoners. One study found that approximately one in three prisoners (29%) would like to enroll in courses where they could obtain certificates from colleges or trade schools, which is greater than the proportion of prisoners who reported that they would like to enroll in courses that offer an associate's degree (18%), bachelor's degree (14%), master's degree (5%), professional degree (1%), or doctorate degree (2%). However, it is important that the vocational training inmates receive while incarcerated is aligned with employment opportunities that are available in the local job markets to which inmates will return. As IHEP notes, \"learning vocational skills that are quickly made obsolete by technological advances or that are irrelevant to local employment opportunities is a waste of money by funders and effort by students.\" Policymakers might consider whether there should there be mandated coordination between correctional agencies, state departments of labor, and business organizations to ensure that inmates are using Pell Grants to participate in postsecondary education programs that provide the skills needed to secure meaningful employment when they are released.", "A criminal history can be a barrier to securing employment in a variety of fields, either because formerly incarcerated individuals are prohibited from working in the field due to a provision in law or regulation, or because employers are wary of hiring someone with a criminal history. One estimate suggested that in 2010, 12% of noninstitutionalized men had a felony conviction, and in 2014, 34% of unemployed working-age men had a criminal record. Increasing access to Pell Grants might be for naught if prisoners cannot get hired because of their criminal histories. Policymakers might consider whether there is a need to undertake efforts to reduce the collateral consequences of a criminal history on post-release employment. For example, Congress could consider expanding the Department of Labor's Federal Bonding Program for employers that hire recently released prisoners. "], "subsections": []}]}]}}
{"id": "R45698", "title": "Agricultural Conservation in the 2018 Farm Bill", "released_date": "2019-04-18T00:00:00", "summary": ["The Agriculture Improvement Act of 2018 (2018 farm bill, P.L. 115-334, Title II) included a number of changes to agricultural conservation programs, including reauthorizing and amending existing programs, directing existing program activities to specific resource concerns, shifting funds within the title, and authorizing a budget-neutral level of funding.", "Debate over the conservation title in the 2018 farm bill focused on a number of issues in the different versions in the House- and Senate-passed bills (H.R. 2). These differences were resolved in a House-Senate conference to create the enacted bill, which is a mix of both versions that were passed by both chambers. The enacted bill reauthorizes and amends portions of most all conservation programs; however, the general focus is on the larger programs, namely the Conservation Reserve Program (CRP), Environmental Quality Incentives Program (EQIP), and Conservation Stewardship Program (CSP).", "Most farm bill conservation programs are authorized to receive mandatory funding and are not subject to appropriation. According to the Congressional Budget Office (CBO), the conservation title of the 2018 farm bill makes up 7% of the bill's total projected mandatory spending over 10 years, which is $60 billion of the total $867 billion. The conservation title is budget neutral over the 10-year baseline; however, the 2018 farm bill is projected to increase funding in the first five years (+$555 million over FY2019-FY2023) and decrease funding in the last five years (-$561 million over FY2024-FY2028). Generally, the 2018 farm bill reallocates mandatory funding within the conservation title among the larger programs.", "The two largest working lands programs\u2014EQIP and CSP\u2014were reauthorized and amended under the enacted bill, but in different ways. The House-passed bill would have repealed CSP and created a stewardship contract within EQIP, whereas the Senate-passed bill would have reauthorized CSP and reduced program enrollment. The enacted bill creates a mix of both the House- and Senate-passed bills by reauthorizing CSP and reducing program enrollment, as well as creating a new incentive contract within EQIP. Funding for CSP is shifted away from an acreage limitation under prior law to limits based on funding. EQIP is expanded and reauthorized with increased funding levels.", "The largest land retirement program\u2014CRP\u2014is reauthorized and expanded by increasing the CRP enrollment limit in annual increments from 24 million acres in FY2019 to 27 million by FY2023. To offset this increased enrollment level, the enacted bill reduces payments to participants, including cost-share payments, annual rental payments, and incentive payments. The 2018 farm bill also reauthorized and amended the Agricultural Conservation Easement Program (ACEP). Most of the changes to ACEP focus on the agricultural land easements by providing additional flexibilities to ACEP-eligible entities and authorize an increase in overall funding.", "The Regional Conservation Partnership Program (RCPP) is reauthorized and amended by shifting the program away from enrolling land through existing conservation programs to a standalone program with separate contracts and agreements. Under the revised program, USDA is to continue to enter into agreements with eligible partners, and these partners are to continue to define the scope and location of a project, provide a portion of the project cost, and work with eligible landowners to enroll in RCPP contracts.", "While the 2018 farm bill does not create new conservation programs, it does require that a number of existing programs direct a dollar amount or percentage of a program's funding to a resource-specific issue, initiative, or subprogram. Through these directed policies Congress has established a level of support, or required investment, to be carried out through implementation to target specific issues such as nutrient runoff or groundwater protection. The directed policy may also reduce the implementing agency's flexibility to allocate funding based on need, as well as reducing the amount available for activities under the larger program that may not meet a resource-specific provision.", "High commodity prices in years past, changing land rental rates, and new conservation technologies have led over time to a shift in farm bill conservation policy away from programs that retire land from production (CRP) toward programs that provide assistance to lands still in production (EQIP and CSP). Much of this shift occurred following the 2008 farm bill (FY2009-FY2013) and continued under the 2014 farm bill (FY2014-FY2018) as the level of total mandatory program funding for CRP was reduced relative to EQIP and CSP. Funding for easement programs (ACEP) also declined somewhat under the 2014 farm bill, but is projected to level off under the 2018 farm bill. Partnership program (RCPP) funding has also increased in recent farm bills, but remains relatively small compared to the other categories of programs."], "reports": {"section_title": "", "paragraphs": ["F ederal agricultural conservation assistance began in the 1930s with a focus on soil and water issues ass ociated with production and environmental concerns on the farm. During the 1980s, agricultural conservation policies were broadened to include environmental issues beyond soil and water concerns, especially issues related to production, such as erosion and wetlands loss that had effects beyond the farm. Many of the current agricultural conservation programs were enacted as part of the Food Security Act of 1985 (1985 farm bill; P.L. 99-198 , Title XII). These programs have been reauthorized, modified, and expanded, and several new programs have been created, particularly in subsequent omnibus farm bills. While the number of programs has increased and new techniques to address resource challenges continue to emerge, the basic federal approach has remained unchanged\u2014voluntary farmer participation encouraged by financial and technical assistance, education, and basic and applied research. The U.S. Department of Agriculture (USDA) administers the suite of agricultural conservation programs through two primary agencies\u2014the Natural Resources Conservation Service (NRCS) and the Farm Service Agency (FSA).", "Figure 1. Common Conservation Program AbbreviationsSource: CRS.", "The conservation title of the Agriculture Improvement Act of 2018 (2018 farm bill; P.L. 115-334 , Title II) reauthorized and amended many of the largest conservation programs and created a number of new pilot programs, carve-outs, and initiatives. The House- and Senate-passed farm bills ( H.R. 2 ) each included a number of amendments to existing conservation programs, many of which did not overlap. This generally resulted in the inclusion of a mix of amendments from each chamber being in the enacted bill. The Congressional Budget Office (CBO) projects that total mandatory spending for the title will increase by $555 million during the first five years of the 2018 farm bill (FY2019-FY2023), compared to a continuation of funding levels authorized in the Agricultural Act of 2014 (2014 farm bill; P.L. 113-79 ). Mandatory spending for the title over 10 years (FY2019-FY2028) is projected by CBO to be reduced by $6 billion, relative to the 2014 farm bill authorized levels . Generally, the bill reallocates funding within the conservation title among the larger programs and pays for increases in the short term with reductions in the long term."], "subsections": [{"section_title": "Conservation Program Changes", "paragraphs": ["The 2018 farm bill reauthorized and amended all of the major USDA agricultural conservation programs. Generally, farm bill conservation programs can be grouped into the following types based on similarities: working lands, land retirement, easement, conservation compliance, and partnership and grants (see Figure 1 and Figure 2 for a list of conservation programs). Most of these programs are authorized to receive mandatory funding (i.e., they do not require an annual appropriation), and include funding authorities that expire with most other farm bill programs at the end of FY2023. ", "Other types of conservation programs\u2014such as watershed programs, emergency programs, and technical assistance\u2014are authorized in legislation other than the farm bill. Most of these programs have permanent authorities and receive appropriations annually through the discretionary appropriations process. These programs are not generally addressed in the context of a farm bill and are not covered in detail in this report, except for cases where the 2018 farm bill made amendments to the program. ", "This section provides a general discussion of programmatic-specific amendments made to various conservation programs and subprograms. For a detailed section-by-section analysis of amendments in the 2018 farm bill, including statutory and U.S. Code citations, see Appendix . Unless otherwise noted, conservation programs discussed in this section are authorized to receive mandatory funding through the borrowing authority of the Commodity Credit Corporation (CCC). For additional analysis of conservation program funding, see the \" Budget and Baseline \" section."], "subsections": [{"section_title": "Land Retirement", "paragraphs": ["Land retirement programs authorize USDA to make payments to private landowners to voluntarily retire land from production for less-resource intensive uses. The primary land retirement program is the Conservation Reserve Program (CRP). CRP includes a number of subprograms, many of which were codified or reauthorized in the 2018 farm bill. The farm bill also authorizes a number of initiatives and pilot programs."], "subsections": [{"section_title": "Conservation Reserve Program (CRP)", "paragraphs": ["CRP was originally authorized in the 1985 farm bill and has been reauthorized and amended a number of times since. The program provides financial compensation for landowners, through an annual rental rate, to voluntarily remove land from agricultural production for an extended period (typically 10 to 15 years) to improve soil and water quality and wildlife habitat. CRP operates under two types of enrollment\u2014general and continuous. General enrollment provides an opportunity for landowners to enroll in CRP through a nationwide competition during a specific period of time. Continuous enrollment is designed to enroll the most environmentally desirable land into CRP through specific conservation practices or resource needs. Unlike general enrollment, under continuous enrollment, land is typically enrolled at any time and is not subject to competitive bidding. Many of the 2018 farm bill amendments apply to continuous enrollment contracts, including the creation of new pilot programs and amendments to existing subprograms. A detailed analysis of amendments to CRP may be found in Table A-2 .", "Congressional debate over CRP in the 2018 farm bill centered on how to increase enrollment limits, while not increasing overall cost. As such, the enacted bill incrementally increases the enrollment cap while reducing various rental rates, cost-share payments, and incentive payments. The 2018 farm bill increases the enrollment limit in annual increments from 24 million acres in FY2019 to 27 million acres in FY2023. This increase in enrollment is partly offset by reducing rental rates for general contracts to 85% of the county average rental rate and to 90% of the county average rental rate for continuous contracts. Cost-share payments are limited to the actual cost of establishing the approved practices, including not more than 50% for seed mix costs. The enacted bill also establishes minimum enrollment levels for continuous contracts (8.6 million acres by FY2022) and grassland contracts (2 million acres by FY2021)."], "subsections": []}, {"section_title": "Conservation Reserve Enhancement Program (CREP)", "paragraphs": ["CREP was originally created as a CRP initiative in 1997, but was not codified into statute as a CRP subprogram until the 2018 farm bill. The provision in the 2018 farm bill is similar to the original version of CREP in that it authorizes USDA to enter into agreements with states to target designated project areas with continuous CRP enrollment contracts. Projects are designed to address specific environmental objectives through targeted continuous, noncompetitive, CRP enrollment that typically provides additional financial incentives beyond annual rental payments and cost-share assistance. ", "The new language in the 2018 farm bill allows existing CREP agreements to remain in force, but allows them to be modified if mutually agreed upon. CREP agreements are generally with states, but the 2018 farm bill expands eligible partners to include nongovernmental organizations (NGO). The enacted bill formalizes agreement requirements with partners, including matching fund contributions (previously not less than 20% of the project cost) and possible waiver of such contributions. The enacted bill requires the matching fund contribution to be a negotiated part of the agreement, or not less than 30% if most of the funds are provided by an NGO. Payments from an eligible partner may be in cash, in-kind, or through technical assistance. Additional requirements for select cost-share payments, incentive payments, and maintenance payments are also included. Specific requirements are included related to grazing, forested riparian buffers, and drought and water conservation agreements. "], "subsections": []}, {"section_title": "Farmable Wetlands (FW) program", "paragraphs": ["The FW program was created in the Farm Security and Rural Investment Act of 2002 (2002 farm bill; P.L. 107-171 ) as a pilot within CRP to enroll farmable or prior converted wetlands into CRP in exchange for additional financial incentives. The 2018 farm bill reauthorized FW program at the current 750,000 acre enrollment limit. "], "subsections": []}, {"section_title": "CRP Grassland Contracts", "paragraphs": ["The 2014 farm bill authorized grassland contracts under CRP, which enrolls grassland, rangeland, and pastureland into 14 to 15 year CRP contracts. Only select grazing practices are allowed under the contract in exchange for annual and cost-share payments. The 2018 farm bill reauthorizes the contracts and increases the enrollment limit to not less than 2 million acres by FY2021 from the previous limit of not more than 2 million acres. USDA may not use unenrolled grassland acres for other types of CRP enrollment. The enacted bill also prioritizes the enrollment of expiring CRP land, land at risk of development, or land of ecological significance."], "subsections": []}, {"section_title": "Other CRP Initiatives", "paragraphs": [], "subsections": [{"section_title": "CLEAR 30", "paragraphs": ["The 2018 farm bill creates a new pilot program referred to as CLEAR 30, which enrolls expiring CRP land into 30-year contracts devoted to practices that improve water quality. CLEAR refers to the Clean Lakes, Estuaries, And Rivers initiative that is authorized to enroll land in continuous contracts that would reduce sediment and nutrient loading, and harmful algal blooms. Under a CLEAR 30 contract, the landowner must maintain the land in accordance with an approved plan and adhere with the terms and conditions of the contract. Contract holders receive compensation in thirty annual cash payments similar to those calculated under general CRP contracts. Technical assistance is required for each contract and agreement. USDA must create the CRP plan for a contract, but management, monitoring, and enforcement may be delegated to another federal agency, state, or local government, or to a conservation organization."], "subsections": []}, {"section_title": "Soil Health and Income Protection Pilot (SHIPP)", "paragraphs": ["The 2018 farm bill also creates a new SHIPP pilot program under CRP to remove less productive farm land from production in exchange for annual rental payments and to plant low-cost perennial cover crops. Eligible land is limited to (1) land in states selected by the Secretary within the prairie pothole region, (2) land that has a cropping history in the three years prior to enrollment, but which was not enrolled in CRP during that time period, and (3) land that is considered to be less productive than other land on the farm. No more than 15% of a farm may be enrolled in the pilot and no more than 50,000 acres of the CRP may be used for the pilot. Under a SHIPP contract, a participant would be required to plant a USDA-approved, low-cost, perennial, conserving-use cover crop at the participant's expense. In return the participant would receive an annual rental payment that is 50% of the general CRP annual rental payment, or higher for beginning, limited-resource, socially disadvantaged or veteran participants. Contracts are three to five years in duration, but can be terminated early if considered necessary by USDA; or if the participant agrees to pay back the annual rental payments. Harvesting, haying, and grazing are allowed outside of the local nesting and brood-rearing period, subject to additional conditions."], "subsections": []}]}]}, {"section_title": "Working Lands Programs", "paragraphs": ["Working lands conservation programs allow private land to remain in production, while implementing various conservation practices to address natural resource concerns specific to the area. Program participants receive some form of conservation planning and technical assistance to guide the decision on the most appropriate practices to apply, given the natural resource concerns and land condition. Participants receive federal financial support to defray a portion of the cost to install or maintain the vegetative, structural, or management practices agreed to in the terms of the contract.", "The two main working lands programs are the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP). Combined, both programs account for more than half of all conservation program funding. The 2018 farm bill amended both programs, but in different ways and to different degrees. A detailed analysis of amendments to EQIP and CSP is provided in Table A-3 and Table A-4 , respectively."], "subsections": [{"section_title": "Environmental Quality Incentives Program (EQIP)", "paragraphs": ["EQIP is reauthorized and expanded in the enacted bill. The program provides financial and technical assistance to producers and private landowners to plan and install structural, vegetative, and land management practices on eligible lands to alleviate natural resource problems. Eligible producers enter into contracts with USDA to receive payment for implementing conservation practices. Approved activities are carried out according to an EQIP plan approved by USDA and developed with the producer that identifies the appropriate conservation practice(s) to address identified resource concerns on the eligible land. The program is reauthorized through FY2023 with a graduating level of mandatory funding\u2014$1.75 billion in FY2019 and FY2020; $1.8 billion in FY2021; $1.85 billion in FY2022; and $2.025 billion in FY2023.", "The new law includes a number of amendments to EQIP that focus on water quality and quantity-related practices, soil health improvement, and wildlife habitat improvement. The law also reduces the funding allocation for livestock-related practices from 60% to 50%, and increases the allocation for wildlife-related practices from 5% to 10%. ", "One of the larger changes the 2018 farm bill makes to EQIP is that water conservation system payments are expanded to include irrigation and drainage entities that were previously ineligible. Eligible entities may be states, irrigation districts, groundwater management districts, acequias, land-grant mercedes, or similar entities. Practices must be implemented on eligible land of the producer, land adjacent to a producer's eligible land, or land under the control of the eligible entity. Adjusted Gross Income (AGI) and payment limits may be waived for eligible entities, but USDA may impose additional payment and eligibility limits. Priority is given to applications that reduce water use. It is unclear how this expansion in eligibility, compared with the previous producer-only policy, may affect implementation of the program."], "subsections": []}, {"section_title": "Conservation Stewardship Program (CSP)", "paragraphs": ["CSP provides financial and technical assistance to producers to maintain and improve existing conservation systems and to adopt additional conservation activities in a comprehensive manner on a producer's entire operation. CSP contracts must meet or exceed a stewardship threshold for at least two priority resource concern at the time of application and meet or exceed at least one additional priority resource concern by the end of the contract. The House-passed bill would have repealed CSP and created a stewardship contract within EQIP, whereas the Senate-passed bill would have reauthorized CSP and reduced program enrollment. The enacted 2018 farm bill creates a mix of both the House- and Senate-passed bills with amendments. The enacted bill reauthorizes CSP, but amends how the program limits future enrollment. The new law shifts CSP from a program limited by acres (10 million acres annually under prior law; approximately $1.4 billion in FY2018) to one limited by total funding ($700 million in FY2019 in mandatory funding, increasing to $1 billion in FY2023). CBO projects this change from prior law will reduce the program by more than $12.4 billion total over ten years (see Table 2 ) for a total cost of $5.1 billion. Reduced spending from this reduction offset increased mandatory spending in other conservation programs (see Figure 3 ).", "In addition to the amended funding structure of CSP, the enacted bill also made a number of amendments to the program. CSP's ranking criteria is amended to focus on an application's actual and expected increase of conservation benefits, and to add a cost competitive selection criteria for similar applications. Contract renewal options are amended to require renewal applicants to compete with new applications, whereas previously their acceptance was guaranteed. Additionally, payments for adopting cover crops, grazing management, and comprehensive conservation plan development are amended to include higher and more comprehensive payment options."], "subsections": []}, {"section_title": "Other EQIP and CSP Initiatives and Subprograms", "paragraphs": [], "subsections": [{"section_title": "Conservation Innovation Grants (CIG)", "paragraphs": ["CIG is a subprogram under EQIP that awards competitive grants to state and local agencies, nongovernmental organizations, tribes, and individuals to implement innovative conservation techniques and practices. The 2018 farm bill expands project eligibility to include community colleges, urban farming, and monitoring practices. A new on-farm conservation innovation trial is authorized at $25 million annually from total EQIP funding. The new on-farm trial funds projects through producers or eligible entities that test new or innovative conservation approaches, such as those related to precision agriculture technologies, nutrient management, soil health, water management, crop rotations, cover crops, irrigation systems, and other USDA approved approaches."], "subsections": []}, {"section_title": "EQIP Conservation Incentive Contract", "paragraphs": ["The House-passed farm bill would have repealed CSP and created a stewardship contract within EQIP. While the 2018 farm bill retained CSP and also authorized a new Conservation Incentive Contract under EQIP. The new EQIP incentive contracts are limited to select priority resource concerns within specific geographic regions. No more than three priority resource concerns may be identified in each geographic region. EQIP incentive contracts extend for five to ten years and provide annual payments to incentivize increased conservation stewardship and the adoption, installation, management, and maintenance of conservation practices. In determining payment amounts, USDA is required to consider the level and extent of the practice being adopted, the cost of adoption, income forgone due to adoption, and compensation ensuring the longevity of the practice.", "The new EQIP incentive contracts exhibit some similarities with CSP contracts, including addressing priority resource concerns; and providing annual payments for adopting, maintaining, and improving practices. The EQIP incentive contracts also include notable differences from CSP, including a no stewardship threshold for entry; no comprehensive requirement for addressing resource concerns; no whole-farm enrollment; and no limit on payments. Pending implementation of EQIP incentive contracts, it is unclear what impact they may have on CSP enrollment or on general EQIP contracts. "], "subsections": []}, {"section_title": "CSP Grassland Conservation Initiative", "paragraphs": ["Amendments under the commodities title (Title I) of the 2018 farm bill changed how base acres are used to calculate eligibility for certain commodity support programs. Base acres not planted to a commodity program-eligible crop within the last ten years are ineligible for select commodity support programs. Under the 2018 farm bill, these acres are now eligible for a one-time enrollment into a new Grassland Conservation Initiative under CSP. ", "While the new grassland initiative is within CSP, it has separate requirements from other CSP contracts. Unlike CSP, the grassland initiative would not require whole-farm enrollment. The initiative has no required stewardship threshold for entry, requiring the participant to only meet or exceed one priority resource concern by the end of the contract. Whereas CSP contracts must meet or exceed a stewardship threshold for at least two priority resource concern at the time of application and meet or exceed at least one additional priority resource concern by the end of the contracts. Grassland initiative contracts are short term\u2014five years with no renewal or reenrollment option, and a participant may terminate the contract without penalty at any time. Payments under the initiative are not subject to the CSP payment limit, but cannot provide more than $18 per acre."], "subsections": []}]}]}, {"section_title": "Easement Programs", "paragraphs": ["Easement programs impose a permanent land-use restriction that is voluntarily placed on the land in exchange for a government payment. The primary conservation easement program is the Agricultural Conservation Easement Program, which provides financial and technical assistance through two types of easements (1) agricultural land easements (ALE) that limit nonagricultural uses on productive farm or grass lands, and (2) wetland reserve easements (WRE) that protect and restore wetlands. The other conservation easement program\u2014the Healthy Forests Reserve Program (HFRP)\u2014was reauthorized in the forestry title (Title VIII) of the 2018 farm bill and is not covered in this report."], "subsections": [{"section_title": "Agricultural Conservation Easement Program (ACEP)", "paragraphs": ["The 2018 farm bill reauthorizes and amends ACEP. Most of the changes made to ACEP in the 2018 farm bill focus on the ALE. Under ALE, USDA enters into partnership agreements with eligible entities to purchase agricultural land easements from willing landowners to protect the agricultural use and conservation values of the land. The enacted bill provides additional flexibilities to ACEP-eligible entities, including the eligibility of \"buy-protect-sell\" transactions in which an eligible entity purchases land prior to the acquisition of an ALE, agrees to hold an ALE on the land, and then transfer the land within a select time period to a farmer or rancher. The bill also amends the nonfederal cost share requirements by removing the requirement that an eligible entity's contribution be equal to the federal share, or at least 50% of the federal share if the entity includes contributions from the private landowner. The nonfederal portion contributed by the eligible entity may include cash, a landowner's donation, costs associated with the easement, or other costs as determined by USDA. Other flexibilities provided eligible entities include the consideration of geographical differences, terms and conditions of easements, and certification criteria of eligible entities. Several amendments reduce the roll of USDA in the administration of ALE, including amendments to the certification of eligible entities, the right of easement enforcement, and planning requirements. For a detailed analysis of amendments to ACEP see Table A-7 .", "By comparison, the 2018 farm bill made fewer changes to WRE. Most of the amendments to WRE center on compatible use and vegetative cover requirements. Compatible use authorization is expanded to include consultation with the state technical committee, consideration of land management requirements, and improving the functions and values of the easement. Requirements for a WRE plan were amended to allow for the establishment or restoration of an alternative vegetative community that is hydraulically appropriate on the entirety of the WRE if it would benefit wildlife or meet local resource needs.", "In other amendments to ACEP, Congress specified new directions regarding USDA's handling of the subordination, exchange, modification, or termination of any ACEP easement. The enacted farm bill increases mandatory funding for ACEP from the FY2018 authorized level to $450 million annually for FY2019 through FY2023."], "subsections": []}]}, {"section_title": "Other Conservation Programs and Provisions", "paragraphs": [], "subsections": [{"section_title": "Regional Conservation Partnership Program (RCPP)", "paragraphs": ["The 2014 farm bill created RCPP from four repealed programs. The 2018 farm bill reauthorized RCPP and made a number of amendments to the program (see Table A-8 for a detailed analysis of RCPP amendments). Prior the 2018 farm bill, RCPP utilized 7% of existing conservation programs (referred to as covered programs ) through RCPP projects that were defined by eligible partners. Eligible partners would define the project's area, goals, and resource concerns to be addressed through the use of covered programs. Partners would enter into project agreements with USDA, in which they would provide a \"significant portion\" of the overall cost of the project. USDA issued no regulations for RCPP and instead utilized funding notices and operated it with the regulations of the covered programs. ", "Amendments enacted in the 2018 farm bill shift RCPP away from using contracts from covered programs to establishing RCPP as a stand-alone program with its own contracts. Prior to the 2018 farm bill, USDA would enter into agreements with a partner on a project that would target covered program contracts in an agreed upon area for a defined resource goal. The actual contract with the farmer or rancher, however, would be an EQIP, CSP, ACEP, or HFRP contract. The enacted bill no longer uses this framework; instead it requires USDA to use a contract specific to RCPP that will fund eligible activities similar to those available under covered programs, but not using the funds of those programs. The list of covered programs is also expanded under the bill to include EQIP, ACEP, CSP, HFRP, CRP, and Watershed and Flood Prevention Operations (WFPO). ", "The 2018 farm bill maintains RCPP's broad partner-focused goal of creating opportunities to leverage federal conservation funding for partner-defined projects. Additionally, the revised program provides additional flexibilities to partners, including the make-up of a partner's project contribution, guidance and reporting requirements, agreement renewals, and in the application process. ", "Mandatory funding for the program is increased to $300 million annually for FY2019 through FY2023 from $100 million annually under prior law. However, RCPP no longer receives a percentage of funding from covered programs, which could change the overall scale of RCPP depending on how this change is implemented. The allocation of funding is also amended to provide 50% to state and multi-state projects and 50% to projects in critical conservation areas (CCA) as selected by USDA."], "subsections": []}, {"section_title": "Watershed and Flood Prevention Operations (WFPO)", "paragraphs": ["The WFPO program provides technical and financial assistance to state and local organizations to plan and install measures to prevent erosion, sedimentation, and flood damage and to conserve, develop, and utilize land and water resources. Project costs are shared with local partners. Smaller projects may be authorized by the Chief of the NRCS, whereas larger projects must be approved by Congress. The 2018 farm bill made few amendments to WFPO, the most substantial being the authorization of permanent mandatory funding of $50 million annually. Historically, the program received discretionary funding through the annual appropriations process\u2014most recently $150 million in FY2018."], "subsections": []}, {"section_title": "Conservation Compliance", "paragraphs": ["Two farm bill provisions require that in exchange for certain USDA program benefits, a producer agrees to maintain a minimum level of conservation on highly erodible land and not to convert wetlands to crop production. These provisions were originally authorized in the 1985 farm bill as highly erodible land conservation ( Sodbuster ) and wetland conservation ( Swampbuster ). They are collectively referred to as conservation compliance . The 2018 farm bill amends wetland conservation provisions to specify that (1) benefits cannot be denied if an exemption applies and (2) affected landowners must have the opportunity to be present during an on-site inspection. The enacted bill also authorizes annual discretionary appropriations for wetland mitigation banking. For a detailed analysis of amendments to the wetland conservation provisions, see Table A-1 .", "A third type of compliance requirement introduced in the Food, Conservation, and Energy Act of 2008 (2008 farm bill; P.L. 110-246 ) addressed crop production on native sod ( Sodsaver ). While Sodsaver is not included in the conservation title of the farm bill, it operates in a manner similar to conservation compliance requirements in that benefits are reduced if production occurs on native sod."], "subsections": []}]}]}, {"section_title": "Policy Issues That Shaped the Conservation Title", "paragraphs": ["Beginning with the Agriculture and Food Act of 1981 (1981 farm bill; P.L. 97-98 ), agricultural conservation has been a stand-alone title in all farm bills. The breadth of the conservation title has grown with each passing omnibus farm bill. Debate over the 2018 farm bill focused on the differences within the conservation title of the House- and Senate-passed bills ( H.R. 2 ). The conference agreement resolved these differences to create a final version of the title in the enacted law that represents a mix of proposals from the two versions. Overarching themes of the conservation title include (1) targeting of funds or acres in existing programs, (2) a shifting of funds among the different types of conservation programs, including a continued emphasis on working lands programs, and (3) provisions that address environmental regulations through voluntary conservation measures."], "subsections": [{"section_title": "Directed Policies Within Existing Programs", "paragraphs": ["The 2014 farm bill focused on simplifying and consolidating programs within the conservation title. Conversely, the 2018 farm bill does not create new programs, but it does require that a number of existing programs direct a specific level of funding or acres, or percentage of a program's funding, to a resource- or interest-specific issue, initiative, or subprogram. Table 1 highlights some of the directed policies created by the 2018 farm bill and compares them with prior law. Some of these policies existed prior to the 2018 farm bill, but did not include a specified funding or acreage level. Through these directed policies Congress has specified a level of support or required investment that USDA is to achieve through program implementation. One potential consequence of these directed policies may be reduced flexibility of the implementing agency to allocate funding based on need, as well as reduced total funds or acres available for activities of the larger program that may not meet a resource-specific provision. Most of the conservation programs in the 2018 farm bill are authorized to receive mandatory funding, so these directed policies also have funding, unless Congress subsequently directs otherwise. "], "subsections": []}, {"section_title": "Budget and Baseline", "paragraphs": ["Most farm bill conservation programs are authorized to receive mandatory funding. According to CBO, the conservation title makes up 7% of the total projected 2018 farm bill spending over 10 years, which is $60 billion of the total $867 billion (see Table 2 and Figure 3 ). Historically, funding for the conservation title has experienced both increases and decreases within farm bills. The 2018 farm bill conservation title is budget neutral over the 10-year baseline; however, it is projected to increase funding in the first five years (+$555 million over FY2019-FY2023) and decrease funding in the last five years (-$561 million over FY2024-FY2028). While most titles received an increase in authorized mandatory funding over the projected 10-year baseline, three titles, including conservation, did not. "], "subsections": []}, {"section_title": "Historical and Programmatic Shifts in Conservation Funding", "paragraphs": ["The bulk of mandatory spending for conservation is authorized for working lands and land retirement activities. While recent farm bills have increased funding for easement and partnership programs, they remain relatively small compared to three main programs\u2014EQIP, CSP, and CRP (see Table 2 and Figure 4 ). The 2018 farm bill conservation title is considered budget neutral over the ten-year baseline and generally reallocates funding among the larger existing programs.", "Over time, periods of high commodity prices, changing land rental rates, and new conservation technologies have led to a shift in farm bill conservation policy away from land retirement and toward an increased focus on working lands programs. Much of this shift occurred following the 2008 farm bill and continued in the 2014 farm bill as the level of total mandatory program funding for land retirement programs declined relative to working lands programs (see Figure 4 ). Increasingly, the separation between land retirement programs and working lands programs has become blurred by an increase in compatible use allowances for grazing and pasture use under land retirement programs. Most conservation and wildlife organizations support both land retirement and working lands programs; however, the appropriate \"mix\" continues to be a subject of debate. ", "Additionally, some conservation program supporters are divided over the relative benefits of shorter-term land retirement programs (CRP) versus longer-term easement programs (ACEP). Unlike land retirement programs, easement programs impose a permanent or longer-term land-use restriction that the land owner voluntarily places on the land in exchange for a government payment. Supporters of easement programs cite a more cost-effective investment in sustainable ecosystems for long-term wildlife and land preservation benefits. Supporters of short-term land retirement programs cite the increased flexibility and broader participation compared with permanent or long-term easement programs. The 2018 farm bill did not amend the duration of ACEP easements, but did create two new subprograms under CRP that would provide additional options for longer-term CRP contracts (30 years under CLEAR30) and shorter-term CRP contracts (3-5 years under SHIPP).", "In recent years, Congress has placed greater emphasis on programs that partner with state and local communities to target conservation funding to local resource concerns. These partnership programs leverage private funding with federal funding to multiply the level of assistance in a selected area. The 2014 farm bill repealed a number of these partnership programs and replaced them with RCPP. The 2018 farm bill amends and expands the number of partnering opportunities under RCPP, CREP, and CIG. However, based on available funding, these programs remain relatively small compared to others in the conservation title."], "subsections": []}, {"section_title": "Environmental Regulation and Voluntary Conservation", "paragraphs": ["USDA has cited voluntary conservation practices as a way to address environmental concerns and potentially reduce the need for traditional regulatory programs. A number of provisions in the conservation title speak to the relationship between voluntary conservation measures and environmental regulation. One such provision is regulatory certainty. Regulatory certainty refers to using voluntary measures to address a specific resource concern in exchange for the \"certainty\" that additional measures will not be required under future regulations. A new regulatory certainty section in the 2018 farm bill (\u00a72503(f)) authorizes USDA to provide technical assistance under the farm bill conservation programs to support regulatory assurances for producers and landowners, under select conditions.", "The 2018 farm bill also makes existing regulatory certainty measures permanent, including the Working Lands for Wildlife Initiative, which was created in 2012 as a partnership between NRCS and the U.S. Fish and Wildlife Service (FWS). Under this partnership agreement, private landowners who voluntarily make wildlife habitat improvements on their land through NRCS conservation programs, and agree to maintain them for 15-30 years, receive in return a level of certainty they will be exempted from potential future regulatory actions related to at-risk species under the Endangered Species Act. The 2018 farm bill makes this partnership agreement permanent and allows for the initiative to be expanded to include CRP.", "Another environmental regulatory-related provision in the enacted 2018 farm bill (\u00a72410) is a sense of Congress statement encouraging watershed-level partnerships between nonpoint sources and regulated point sources to advance the goals of the Federal Water Pollution Control Act (Clean Water Act, 33 U.S.C. \u00a71251 et seq.)."], "subsections": [{"section_title": "Appendix. Comparison of Conservation Provisions Enacted in the 2018 Farm Bill to Prior Law", "paragraphs": ["This appendix includes a series of tables, arranged by subtitle, included in Title II of the Agriculture Improvement Act of 2018 ( P.L. 115-334 ). U.S. Code citations are included in brackets in the \"Prior Law\" column. Corresponding section numbers in the 2018 farm bill are included in brackets in the \"Enacted 2018 Farm Bill\" column. Funding for most Title II programs is covered in the \"Funding and Administration\" subtitle (Subtitle E, see Table A-6 ). Where appropriate, funding levels are repeated within a program's corresponding subtitle table. Tables are generally organized by section number of the 2018 farm bill, except where it is appropriate to cross-references relevant amendments to provide a complete picture of the program. "], "subsections": []}]}]}]}}
{"id": "R45726", "title": "Federal Preemption in the Dual Banking System: An Overview and Issues for the 116th Congress", "released_date": "2019-05-17T00:00:00", "summary": ["Banks play a critical role in the United States economy, channeling money from savers to borrowers and facilitating productive investment. While the nature of lawmakers' interest in bank regulation has shifted over time, most bank regulations fall into one of three general categories. First, banks must abide by a variety of safety-and-soundness requirements designed to minimize the risk of their failure and maintain macroeconomic stability. Second, banks must comply with consumer protection rules intended to deter abusive practices and provide consumers with complete information about financial products and services. Third, banks are subject to various reporting, recordkeeping, and anti-money laundering requirements designed to assist law enforcement in investigating criminal activity.", "The substantive content of these requirements remains the subject of intense debate. However, the division of regulatory authority over banks between the federal government and the states plays a key role in shaping that content. In some cases, federal law displaces (or \"preempts\") state bank regulations. In other cases, states are permitted to supplement federal regulations with different, sometimes stricter requirements. Because of its substantive implications, federal preemption has recently become a flashpoint in debates surrounding bank regulation.", "In the American \"dual banking system,\" banks can apply for a national charter from the Office of the Comptroller of the Currency (OCC) or a state charter from a state's banking authority. A bank's choice of chartering authority is also a choice of primary regulator, as the OCC serves as the primary regulator of national banks and state regulatory agencies serve as the primary regulators of state-chartered banks. However, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) also play an important role in bank regulation. The Federal Reserve supervises all national banks and state-chartered banks that become members of the Federal Reserve System (FRS), while the FDIC supervises all state banks that do not become members of the FRS. This complex regulatory architecture has resulted in a \"symbiotic system\" with both federal regulation of state banks and state regulation of national banks. In the modern dual banking system, national banks are often subject to generally applicable state laws, and state banks are subject to both generally applicable federal laws and regulations imposed by their federal regulators. The evolution of this system during the 20th century caused the regulation of national banks and state banks to converge in a number of important ways.", "However, despite this convergence, federal preemption provides national banks with certain unique advantages. In Barnett Bank of Marion County, N.A. v. Nelson, the Supreme Court held that the National Bank Act (NBA) preempts state laws that \"significantly interfere\" with the powers of national banks. The Court has also issued two decisions on the preemptive scope of a provision of the NBA limiting states' \"visitorial powers\" over national banks. Finally, OCC rules have taken a broad view of the preemptive effects of the NBA, limiting the ways in which states can regulate national banks.", "Courts, regulators, and legislators have recently confronted a number of issues involving banking preemption and related federalism questions. Specifically, Congress has considered legislation that would overturn a line of judicial decisions concerning the circumstances in which non-banks can benefit from federal preemption of state usury laws. The OCC has also announced its intention to grant national bank charters to certain financial technology (FinTech) companies\u2014a decision that is currently being litigated. Finally, Congress has recently turned its attention to the banking industry's response to state efforts to legalize and regulate marijuana."], "reports": {"section_title": "", "paragraphs": ["B anks play a critical role in the United States economy, channeling money from savers to borrowers and facilitating productive investment. Among other things, banks provide loans to businesses, help individuals finance purchases of cars and homes, and offer services such as checking and savings accounts, debit cards, and ATMs. In addition to occupying a central role in the American economy, the banking industry is a perennial subject of political interest. While the nature of lawmakers' interest in bank regulation has shifted over time, most bank regulations fall into one of three general categories. First, banks must abide by a variety of safety-and-soundness requirements designed to minimize the risk of their failure and maintain macroeconomic stability. Second, banks must comply with consumer protection rules intended to deter abusive practices and provide consumers with complete information about financial products and services. Third, banks are subject to various reporting , recordkeeping , and anti-money laundering requirements designed to assist law enforcement in investigating criminal activity. ", "The substantive content of these requirements remains the subject of intense debate. However, the division of regulatory authority over banks between the federal government and the states plays a key role in shaping that content. In some cases, federal law displaces (or \"preempts\") state bank regulations. In other cases, states are permitted to supplement federal regulations with different, sometimes stricter requirements. Because of its substantive implications, federal preemption has recently become a \"flashpoint\" in debates surrounding bank regulation, with one commentator observing that preemption is \"[t]he issue at the center of most disputes between state and federal banking regulators.\"", "This report provides an overview of banking preemption. First, the report discusses general principles of federal preemption. Second, the report provides a brief history of the American \"dual banking system.\" Third, the report discusses the Supreme Court's decision in Barnett Bank of Marion County, N.A. v. Nelson , where the Court held that federal law preempts state laws that \"significantly interfere\" with the powers of national banks. Fourth, the report reviews two Supreme Court decisions concerning the extent to which states may exercise \"visitorial powers\" over national banks. Fifth, the report discusses the Office of the Comptroller of the Currency's (OCC's) preemption rules and provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act concerning the preemption of state consumer protection laws. Finally, the report outlines a number of current issues in banking preemption, including (1) the extent to which non-banks can benefit from federal preemption of state usury laws, (2) the OCC's decision to grant special purpose national bank charters to financial technology (FinTech) companies, and (3) proposals to provide legal protections to banks serving marijuana businesses that comply with state law."], "subsections": [{"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "Preemption Doctrine", "paragraphs": ["The doctrine of federal preemption is grounded in the Supremacy Clause of Article VI of the Constitution, which provides that \"the Laws of the United States . . . shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.\" The Supreme Court has explained that \"under the Supremacy Clause . . . any state law, however clearly within a State's acknowledged power, which interferes with or is contrary to federal law, must yield.\"", "The Court has identified two general ways in which federal law can preempt state law. Federal law can expressly preempt state law when a federal statute or regulation contains explicit preemptive language\u2014that is, where a clause in the relevant federal statute or regulation explicitly provides that federal law displaces certain categories of state law. The Employee Retirement Income Security Act, for example, contains a preemption clause providing that some of the Act's provisions \"shall supersede any and all State laws insofar as they may now or hereafter relate to any [regulated] employee benefit plan.\" ", "Federal law can also impliedly preempt state law \"when Congress' command is . . . implicitly contained in\" the relevant federal law's \"structure and purpose.\" The Supreme Court has identified two subcategories of implied preemption. First, \"field preemption\" occurs \"where [a] scheme of federal regulation is so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it.\" Second, \"conflict preemption\" occurs where \"compliance with both federal and state regulations is a physical impossibility,\" or where state law \"stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.\" In Crosby v. National Foreign Trade Council , for example, the Court held that a federal law imposing sanctions on Burma impliedly preempted a Massachusetts law that prohibited state entities from doing business with Burma. The Court reached this conclusion after determining that the state statute posed an obstacle to the federal statute's purposes of (1) providing the President with \"flexible\" authority over sanctions policy, (2) limiting economic pressure against the Burmese government to the specific range reflected in the federal statute, and (3) granting the President the ability to speak for the country \"with one voice.\"", "Some federal banking laws expressly preempt state law. Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980, for example, expressly grants federally insured state banks the right to charge the highest interest rate allowed by the states in which they are located, even when lending to borrowers in other states with stricter usury laws. Other federal banking laws impliedly preempt state law. Specifically, the Supreme Court has held that the National Bank Act impliedly preempts state laws that \"significantly interfere\" with the powers of national banks. However, all banking preemption issues are heavily influenced by the regulatory architecture surrounding the banking system. The following section of the report accordingly outlines the development of the American \"dual banking system.\" "], "subsections": []}, {"section_title": "The Origins and Evolution of the Dual Banking System", "paragraphs": [], "subsections": [{"section_title": "The First and Second Banks of the United States", "paragraphs": ["Disputes over the federal government's role in regulating the financial system have been a feature of American politics since the country's inception. In 1791, Congress approved the creation of the First Bank of the United States over fierce opposition from many of the nation's leaders, including James Madison and Thomas Jefferson. In addition to accepting deposits and making loans to the public, the First Bank acted as the federal government's fiscal agent by collecting tax revenues, securing the government's funds, and paying the government's bills. The First Bank's proponents argued that the Bank would facilitate economic growth by extending credit to private businesses and establishing a uniform national currency in the form of the Bank's notes. By contrast, the First Bank's critics argued that the concentration of financial power in a single federal institution threatened state sovereignty and undermined the operations of state-chartered banks. This debate culminated in a victory for the First Bank's critics when Congress refused to renew the Bank's charter by a single vote in 1811.", "But disputes over the federal government's role in the banking system did not end with the demise of the First Bank. After the War of 1812 generated significant economic turmoil, Congress chartered the Second Bank of the United States for a twenty-year term in 1816. The Second Bank performed many of the same functions as the First Bank and attracted similar criticism, eventually becoming the target of populist fury led by President Andrew Jackson. In 1832, President Jackson vetoed legislation to extend the Second Bank's charter, leading to its demise in 1836."], "subsections": []}, {"section_title": "The Free Banking Era", "paragraphs": ["After the Second Bank's charter expired, bank regulation was wholly entrusted to the states. Inspired by the Jacksonian attack on concentrated economic power, a number of states dispensed with the requirement that banks obtain a charter via a special act of the state legislature. Instead, banks in these states could obtain charters from state banking authorities as long as they met certain general conditions. During this \"Free Banking era,\" the country lacked a uniform national currency and relied instead on notes issued by state banks, which circulated at a discount from their face value that reflected the issuing bank's location and credit quality. In some states, so-called \"wildcat banks\" in remote areas issued notes back by minimal specie (gold or silver), assuming that noteholders would be unlikely to travel long distances to redeem them. These wildcat banks failed at a far higher rate than their urban rivals. Economic historians continue to debate the merits and drawbacks of the Free Banking era. According to the standard narrative, Free Banking was largely a failure, resulting in a large number of bank failures, financial instability, and inefficiencies that accompanied a heterogeneous currency. However, a number of revisionist scholars have questioned this assessment, arguing that despite the high rate of bank failures during the Free Banking Era, total losses to bank noteholders during the period were in fact relatively small. "], "subsections": []}, {"section_title": "The Creation of the Dual Banking System", "paragraphs": ["Whatever its virtues and vices, the Free Banking Era came to an end during the Civil War. After the Treasury Department's efforts to finance the war by borrowing from Northern banks led to a shortage in specie, Congress enacted the National Currency Act in 1863 and the National Bank Act (NBA) in 1864. Under the Acts, banks were offered the opportunity to apply for a national charter from the newly created OCC, creating a \"dual banking system\" in which both the federal government and the states chartered and regulated banks. As a condition of obtaining a national charter, the Acts required banks to purchase United States government bonds, giving the federal government a new source of revenue to fight the war. Once national banks deposited those bonds with the federal government, they were allowed to issue national banknotes up to 90 percent of the market value of their bonds. These national banknotes functioned as a uniform national currency and gave the federal government significant control over the nation's money supply.", "The creation of a dual banking system was not intended by the proponents of the NBA, who assumed that all state-chartered banks would convert to national charters. In order to incentivize state-chartered banks to make this switch, Congress enacted a ten percent tax on state banknotes in 1865. But the tax did not accomplish its intended purpose. While the number of state-chartered banks fell significantly after the enactment of the NBA, state banks eventually skirted this tax by issuing paper checks in lieu of banknotes. And in the late 19th century, state banking authorities contributed to this regulatory arbitrage by offering their banks laxer regulations than the OCC. As a result, state-chartered banks have outnumbered national banks since 1895, and the dual banking system has survived to this day. ", "Under the contemporary dual banking system, the OCC serves as the primary regulator of national banks and has broad powers to regulate their organization, examination, and operations. Section 24 of the NBA grants national banks a number of powers, including: (1)\u00a0\"discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt,\" (2)\u00a0\"receiving deposits,\" (3) \"buying and selling exchange, coin, and bullion,\" (4) \"loaning money on personal security,\" and (5) \"obtaining, issuing, and circulating notes.\" Section 24 also grants national banks \"all such incidental powers as shall be necessary to carry on the business of banking.\" Federal court and OCC decisions have identified roughly 80 activities that fall within the \"incidental powers\" of national banks, including the ability to broker annuities charge customers non-interest fees. ", "By contrast, state banking authorities are the primary regulators of state-chartered banks. While state banking laws are by no means uniform, they typically provide state-chartered banks with the power to engage in activities similar to those listed in the NBA and activities that are \"incidental to the business of banking.\""], "subsections": []}, {"section_title": "20th Century Developments: The Federal Reserve, the Federal Deposit Insurance Corporation, and the Convergence of Federal and State Regulation", "paragraphs": ["While the OCC and state banking authorities figure prominently in the dual banking system, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) also play important roles in the bank regulatory regime. Congress created the Federal Reserve in 1913 in response to a 1907 banking panic that highlighted the need for a \"lender of last resort\" to replenish banks' reserves when they experience liquidity shortfalls. Today, the Federal Reserve also conducts the nation's monetary policy, manages certain elements of the country's payment systems, and regulates bank holding companies, financial market utilities, and banks that join the Federal Reserve System (FRS). The Federal Reserve Act requires all national banks to join the FRS and gives state banks the option of joining. The Federal Reserve accordingly serves as the principal federal regulator of state-chartered banks that become members of the FRS. ", "The FDIC serves as the principal federal regulator of state-chartered banks that do not join the FRS. Congress created the FDIC in 1933 after a wave of bank failures generated a self-reinforcing cycle of \"contagion,\" leading depositors to \"run\" from other banks and cause additional failures. In order to minimize the risk of these types of bank runs, the FDIC insures deposits at regulated institutions up to certain limits and regulates those institutions to ensure their safety and soundness. Because federal law requires national banks to obtain FDIC insurance and all states impose that same requirement on the banks they charter, the FDIC plays a key role in regulating the banking system. ", "This complex regulatory architecture has resulted in \"symbiotic system\" with both state regulation of national banks and federal regulation of state banks. In the modern dual banking system, national banks are not wholly immune from generally applicable state laws, and state banks are not wholly immune from generally applicable federal laws. The Supreme Court has explained that \"general state laws\" concerning \"the dealings and contracts of national banks\" are valid as long as they do not \"expressly conflict\" with federal law, \"frustrate the purpose for which national banks were created,\" or impair the ability of national banks to \"discharge the duties imposed upon them\" by federal law. National banks are accordingly \"governed in their daily course of business far more by the laws of the State than of the nation\" because their contracts, ability to acquire and transfer property, rights to collect debts, and liability to be sued for debts \"are all based on State law.\" The OCC has attempted to synthesize the relevant case law as establishing a general principle that state regulations of national banks are valid as long as they \"do not regulate the manner, content or extent of the activities authorized for national banks under federal law, but rather establish the legal infrastructure around the conduct of that business.\" Similarly, state-chartered banks are not wholly immune from federal law. Rather, state banks are subject to certain federal consumer protection, tax, and antidiscrimination laws, in addition to a range of Federal Reserve and FDIC regulations. ", "A number of other legal developments have caused the regulatory treatment of national banks and state banks to converge. Beginning in the 1960s, many states passed so-called \"wild card\" statutes granting their banks the power to engage in any activities permitted for national banks. Statutes extending the powers of the Federal Reserve and the FDIC have also ensured competitive equality in the opposite direction. In 1980, Congress enacted legislation requiring all state-chartered banks\u2014including those that do not join the FRS\u2014to abide by reserve requirements set by the Federal Reserve, eliminating the competitive advantage conferred by lower state-law reserve requirements. Similarly, in 1991, Congress enacted legislation prohibiting FDIC-insured state banks from engaging as a principal in activities that are not permitted for national banks absent permission from the FDIC. Because all states require the banks they charter to obtain FDIC insurance, the legislation \"had the ultimate effect of unifying the state and the federal banking systems.\" ", "Finally, some federal statutes either explicitly or implicitly preempt state laws in ways that eliminate unequal regulatory treatment for national and state banks. In Marquette National Bank of Minneapolis v. First Omaha Services Corporation , the Supreme Court held that the NBA grants national banks the power to \"export\" the maximum interest rates allowed by their \"home\" states, even when lending to borrowers in other states with stricter usury laws. In that decision, the Court considered whether a national bank headquartered in Nebraska\u2014which permitted banks to charge credit-card holders up to 18 percent interest per year on certain unpaid balances\u2014could charge its Minnesota customers more than the 12 percent maximum interest allowable under Minnesota law. Specifically, the Court evaluated whether an NBA provision allowing national banks to charge interest rates allowed by the states \"where the bank[s] [are] located\" applies even when national banks extend credit to customers in other states with stricter usury laws. The Court held that the NBA provision indeed afforded national banks this power, concluding that the national bank was permitted to charge the maximum interest rate allowable under Nebraska law even when lending to Minnesota customers. Two years after the Marquette decision, Congress enacted legislation to extend the same power to federally insured state banks, preempting contrary state law and equalizing the regulatory treatment of national and state banks vis-\u00e0-vis \"interest rate exportation.\""], "subsections": []}]}]}, {"section_title": "Barnett Bank and the Powers of National Banks", "paragraphs": ["While the regulatory treatment of national and state banks has accordingly converged, federal preemption nevertheless confers certain unique benefits on national banks. Under the Supreme Court's decision in Barnett Bank of Marion County, N.A. v. Nelson , federal laws that grant national banks the power to engage in specific activities impliedly preempt state laws that \"significantly interfere\" with the ability of national banks to engage in those activities. In Barnett Bank , the Court held that a federal law granting national banks the authority to sell insurance impliedly preempted a state law that prohibited banks from selling insurance, subject to certain exceptions. In reaching this conclusion, the Court explained that the state law posed an obstacle to the federal statute's purpose of granting national banks the authority to sell insurance \"whether or not a State grants . . . similar approval.\" The Court inferred this purpose from the principle that \"normally Congress would not want States to forbid, or to impair significantly, the exercise of a power that Congress explicitly granted.\" ", "Lower courts have followed Barnett Bank 's rule that absent indications to the contrary, federal statutes and regulations that grant national banks the power to engage in specific activities preempt state laws that prohibit or \"significantly interfere\" with those activities. In Wells Fargo Bank of Texas N.A. v. James , for example, the Fifth Circuit held that an OCC rule granting national banks the power to \"charge [their] customers non-interest charges and fees\" preempted a state statute prohibiting banks from charging a fee for cashing checks in certain circumstances. Similarly, in Monroe Retail, Inc. v. RBS Citizens, N.A. , the Sixth Circuit held that this rule preempted state law conversion claims brought against a class of national banks based on fees they charged for processing garnishment orders. Specifically, the Sixth Circuit reasoned that under Barnett Bank , \"the level of 'interference' that gives rise to preemption under the NBA is not very high,\" and that the relevant conversion claims \"significantly interfere[d]\" with national banks' ability to collect fees. Finally, the Ninth Circuit employed similar reasoning in Rose v. Chase Bank USA, N.A. , where it held that an NBA provision granting national banks the power to \"loan money on personal security\" preempted a state statute imposing various disclosure requirements on credit card issuers. In arriving at this conclusion, the Ninth Circuit reasoned that \"[w]here . . . Congress has explicitly granted a power to a national bank without any indication that Congress intended for that power to be subject to local restriction, Congress is presumed to have intended to preempt state laws.\"", "Federal courts have also adopted broad interpretations of an NBA provision authorizing national banks to dismiss officers \"at pleasure.\" In Schweikert v. Bank of America , N.A. , the Fourth Circuit held that this provision preempted a state law claim for wrongful discharge brought by a former officer of a national bank. Similarly, the Ninth Circuit has held that this provision preempted a claim brought by a former officer of a national bank for breach of an employment agreement, reasoning that \"[a]n agreement which attempts to circumvent the complete discretion of a national bank's board of directors to terminate an officer at will is void as against [federal] public policy.\" Finally, in Wiersum v. U.S. Bank, N.A. , the Eleventh Circuit relied on Barnett Bank and the Fourth Circuit's reasoning in Schweikert to conclude that this \"at pleasure\" provision preempted a wrongful-termination claim brought by a former officer of a national bank under a state whistleblower statute.", "While federal courts have accordingly adopted expansive views of the circumstances in which state laws \"significantly interfere\" with national banks' powers, they have also recognized certain general limits on the preemptive scope of federal banking statutes and regulations. In Gutierrez v. Wells Fargo Bank, NA , for example, the Ninth Circuit held that federal banking regulations did not preempt a generally applicable state law prohibiting certain types of fraud. The Gutierrez litigation involved a national bank's use of a bookkeeping method known as \"high-to-low\" posting for debit-card transactions, whereby the bank posted large transactions to customers' accounts before small transactions. In Gutierrez , customers of the bank brought a variety of state law claims based on the theory that the bank adopted high-to-low posting for the sole purpose of maximizing the overdraft fees it could charge customers. In response, the bank argued that OCC regulations preempted the state law claims.", "The Ninth Circuit held that the OCC regulations preempted some, but not all, of the customers' claims. Specifically, the court held that an OCC regulation authorizing national banks to establish the method of calculating noninterest charges and fees \"in [their] discretion\" preempted claims premised on the theory that high-to-low posting was an unfair business practice. The court also held an OCC regulation providing that national banks may exercise their deposit-taking powers \"without regard to state law limitations concerning . . . disclosure requirements\" preempted the customers' claims that the bank failed to affirmatively disclose its use of high-to-low posting. However, the court held that federal law did not preempt claims that the bank defrauded its customers by making misleading statements about its posting method. Specifically, the court reasoned that these claims survived preemption because they were based on \"a non-discriminating state law of general applicability that does not conflict with federal law, frustrate the purposes of the [NBA], or impair the efficiency of national banks to discharge their duties.\" In reaching this conclusion, the court rejected the argument that federal law preempted the customers' fraud claims because those claims \"necessarily touche[d] on\" national banks' authority to provide checking accounts. The court rejected this argument on the grounds that such an expansive preemption standard \"would swallow all laws.\" The Ninth Circuit accordingly allowed the customers' fraud claims to proceed because they did not \"significantly interfere\" with national banks' ability to offer checking accounts."], "subsections": []}, {"section_title": "Watters, Cuomo, and Visitorial Powers over National Banks", "paragraphs": ["While the implications of Barnett Bank have been fleshed out most thoroughly in the lower federal courts, the Supreme Court has also applied that decision's reasoning in two cases concerning an NBA provision prohibiting states from exercising \"visitorial powers\" over national banks. In Watters v. Wachovia Bank, N.A. , the Court held that this provision\u2014together with an OCC regulation providing that national banks may conduct authorized activities through operating subsidiaries\u2014preempted state licensing, reporting, and visitation requirements for the operating subsidiaries of national banks. Specifically, the Court reasoned that the proper inquiry in analyzing whether state law interferes with federally permitted bank activities \"focuse[s] on the exercise of a national bank's powers , not on its corporate structure.\" The Court accordingly concluded that the operating subsidiaries of national banks should be treated \"as equivalent to national banks with respect to powers exercised under federal law.\" And because \"duplicative state examination, supervision, and regulation would significantly burden\" national banks' ability to engage in authorized activities, the Court held that those same regulatory burdens also unacceptably interfere with the ability of national bank subsidiaries to engage in those activities. However, as discussed later in this report, Congress has abrogated Watters 's holding that states may not examine or regulate the activities of national bank subsidiaries.", "While the Court adopted a broad view of preemption in Watters , it cabined the preemptive effect of the relevant NBA provision two years later in Cuomo v. C learing House Association, LLC. In that decision, the Court held that this NBA provision did not preempt an information request that the New York Attorney General (NYAG) sent to several national banks. Specifically, the NYAG had sent letters to several national banks requesting nonpublic information about their lending practices in order to determine whether the banks had violated state fair lending laws. In response, a banking trade group and the OCC argued that the relevant NBA provision\u2014together with an OCC regulation interpreting that provision to mean that \"[s]tate officials may not . . . prosecut[e] enforcement actions\" against national banks, \"except in limited circumstances authorized by federal law\"\u2014preempted the information request. ", "The Supreme Court rejected this interpretation of the NBA's visitorial powers provision, drawing a distinction between (1) \"supervision,\" or \"the right to oversee corporate affairs,\" which qualify as \"visitorial powers,\" and (2) \"law enforcement.\" Because the Court concluded that the NYAG had issued the information requests in his \"law enforcement\" capacity\u2014as opposed to \"acting in the role of sovereign-as-supervisor\"\u2014it held that the NBA did not preempt the requests. "], "subsections": []}, {"section_title": "The OCC's Preemption Rules", "paragraphs": ["As the above discussion makes clear, OCC regulations have figured prominently in litigation over the preemptive scope of federal banking law. While some commentators have contended that the NBA's text and legislature history implicitly provides the OCC with the authority to promulgate preemption rules, Congress formally recognized that the OCC has such authority in the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (Riegle-Neal Act). Specifically, Section 114 of the Riegle-Neal Act provides that \"[b]efore issuing any opinion letter or interpretive rule . . . that concludes that Federal law preempts the application to a national bank of any State law\" concerning certain specified subjects, the OCC must give the public notice and an opportunity submit written comments. ", "In the 1990s and early 2000s, the OCC exercised this authority in a number of interpretive letters and legal opinions. In these documents, the OCC took the position that federal law preempted state laws that limited the ability of national banks to:", "advertise; operate offices within a certain distance from state-chartered bank home offices; operate ATM machines; engage in fiduciary activities; finance automobile purchases; sell annuities; sell repossessed automobiles without an automobile dealer license; and conduct Internet auctions of certificates of deposit."], "subsections": [{"section_title": "The OCC's 2004 Preemption Rules", "paragraphs": ["In 2004, the OCC expanded upon these interpretive letters and legal opinions by issuing what one commentator has described as \"sweeping\" preemption rules. The OCC's 2004 preemption rules articulated a general preemption standard according to which \"state laws that obstruct, impair, or condition a national bank's ability to fully exercise\" its federally authorized powers \"are not applicable to national banks\" except \"where made applicable by Federal law.\" This general standard accordingly expanded on Barnett Bank 's \"significant interference\" test in two ways. First, the OCC's 2004 standard omitted the intensifying phrase \"significantly\" from the Barnett Bank test. Second, the 2004 standard by its terms required that national banks be able to \"fully\" exercise their authorized powers\u2014a phrase that does not appear in Barnett Bank . However, despite these facial differences with the Barnett Bank test, the OCC explained that it intended the phrase \"obstruct, impair, or condition\" to function \"as the distillation of the various preemption constructs articulated by the Supreme Court, as recognized in Hines [ v. Davidowitz ] and Barnett Bank , and not as a replacement construct that is in any way inconsistent with those standards.\"", "Beyond this general preemption standard, the OCC's 2004 rules concluded that the NBA preempted certain categories of state laws. First, the rules provided that national banks \"may make real estate loans . . . without regard to state law limitations concerning\":", "licensing and registration (except for purposes of service of process); \"[t]he ability of a creditor to require or obtain private mortgage insurance, insurance for other collateral, or other credit enhancements or risk mitigants, in furtherance of safe and sound banking practices\"; loan-to-value ratios; terms of credit; \"[t]he aggregate amount of funds that may be loaned upon the security of real estate\"; escrow accounts; security property; access to and use of credit reports; disclosure and advertising; processing, origination, servicing, sale or purchase of, or investment or participation in, mortgages; disbursements and repayments; rates of interest on loans; due-on-sale clauses, with certain exceptions; and \"[c]ovenants and restrictions that must be contained in a lease to qualify the leasehold as acceptable security for a real estate loan.\"", "Second, the rules provided that national banks \"may make non-real estate loans without regard to state law limitations concerning\" many of the same matters identified in the regulation concerning real estate lending. Finally, the rules provided that national banks \"may exercise [their] deposit-taking powers without regard to state law limitations concerning\": (1) abandoned and dormant accounts, (2) checking accounts, (3) disclosure requirements, (3) funds availability, (4) savings account orders of withdrawal, (5) state licensing or registration requirements (except for purposes of service of process), and (6) special purpose savings services.", "The OCC's 2004 rules also identified general categories of state law that the agency interpreted as surviving preemption. Specifically, the rules provided that the NBA does not preempt state laws that are consistent with federal law and involve (1) contracts, (2) torts, (3) criminal law, (4) rights to collect debts, (5) the acquisition and transfer of property, (5) taxation, (6) zoning, and, with respect to real estate lending, (7) certain homestead laws. According to the OCC's 2004 rules, such laws survive preemption so long as they \"do not regulate the manner, content or extent of the activities authorized for national banks under federal law.\""], "subsections": []}, {"section_title": "Section 1044 of Dodd-Frank", "paragraphs": ["The OCC's 2004 preemption rules proved controversial. In 2008, the United States experienced a financial crisis caused in part by reckless subprime mortgage lending and a collapse in the real estate market. In the wake of the crisis, commentators debated the role that federal preemption of state predatory lending laws played in generating the pre-2008 housing bubble. Some commentators contended that national banks played a significant role in the predatory lending that preceded the crisis, and that federal preemption \"effectively gut[ted] states' ability to legislate against predatory lending practices.\" By contrast, others rejected the contention that preemption played a significant role in causing the crisis, arguing that national banks and their subsidiaries accounted for only a small share of subprime mortgage lending.", "In 2010, Congress responded to concerns over federal preemption of state consumer protection laws in Section 1044 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Section 1044 provides that federal law preempts such laws only if: ", "(A) application of a State consumer financial law would have a discriminatory effect on national banks, in comparison with the effect of the law on a bank chartered by that State;", "(B) in accordance with the legal standard for preemption in the decision of the Supreme Court of the United States in [ Barnett Bank ], the State consumer financial law prevents or significantly interferes with the exercise by the national bank of its powers; and any preemption determination under this subparagraph may be made by a court, or by regulation or order of the Comptroller of the Currency on a case-by-case basis, in accordance with applicable law; or", "(C) the State consumer financial law is preempted by a provision of Federal law other than title 62 of the Revised Statutes.", "Beyond this general preemption standard, Section 1044 contains a number of other provisions narrowing the OCC's preemption authority. First, Section 1044 provides that courts reviewing OCC preemption determinations should accord those determinations only Skidmore deference, under which courts assess an agency's interpretation of a statute \"depending upon the thoroughness evident in the consideration of the agency, the validity of the reasoning of the agency, the consistency with other valid determinations made by the agency, and other factors which the court finds persuasive and relevant to its decision.\" Before the enactment of Dodd-Frank, certain courts had afforded OCC preemption determinations a more permissive form of deference known as Chevron deference, according to which courts defer to agency interpretations as long as they are reasonable. Section 1044 accordingly requires that courts take a less deferential posture toward OCC preemption determinations. ", "Second, Section 1044 provides that no OCC preemption determination \"shall be interpreted or applied so as to invalidate, or otherwise declare inapplicable to a national bank, the provision of the State consumer financial law, unless substantial evidence, made on the record of the proceeding, supports the specific finding regarding the preemption of such provision in accordance with the legal standard\" established by Barnett Bank . This \"substantial evidence\" standard is often used in cases involving the Administrative Procedure Act, which provides that courts shall hold unlawful an agency's formal rules and other determinations made on the basis of a formal hearing when they are \"unsupported by substantial evidence.\" The Supreme Court has explained that \"substantial evidence\" entails \"more than a mere scintilla\" of evidence, and requires \"such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.\" ", "Third, Section 1044 provides that the OCC shall (1) \"periodically conduct a review, through public notice and comment, of each determination that a provision of Federal law preempts a State consumer financial law,\" (2) \"conduct such review within the 5-year period after prescribing or otherwise issuing such determination, and at least once during each 5-year period thereafter,\" and (3) \"[a]fter conducting the review of, and inspecting the comments made on, the determination, . . . publish a notice in the Federal Register announcing the decision to continue or rescind the determination or a proposal to amend the determination.\" ", "Fourth, Section 1044 provides that the OCC must submit to Congress a report addressing its decision to continue, rescind, or propose an amendment to any preemption determination. ", "Finally, Section 1044 abrogated the Supreme Court's decision in Watters , providing that \"State consumer financial laws\" apply to the subsidiaries and affiliates of national banks \"to the same extent\" that they apply \"to any person, corporation, or other entity subject to such State law.\""], "subsections": []}, {"section_title": "The OCC's 2011 Preemption Rules", "paragraphs": ["After Dodd-Frank's enactment, commentators debated the meaning of Section 1044's general preemption standard. As discussed, Section 1044's preemption standard provides that federal law preempts \"State consumer financial laws\" that \"prevent[] or significantly interfere[]\" with the powers of national banks \"in accordance with the legal standard for preemption in the decision of the Supreme Court of the United States in [ Barnett Bank ].\" Some commentators have argued that this language simply codifies the Barnett Bank standard and was not intended to significantly modify pre-existing law. However, others have argued that Section 1044 was intended to pare back the OCC's 2004 preemption rules, which interpreted the NBA as preempting state laws that \"obstruct, impair, or condition\" the powers of national banks. According to this latter group of commentators, the OCC's \"obstruct, impair, or condition\" standard was more expansive than Barnett Bank 's \"significant interference\" test, meaning that a codification of that test would modify pre-existing law. ", "In 2011, the OCC responded to the enactment of Section 1044 by issuing a notice of proposed rulemaking that reaffirmed its pre-Dodd-Frank preemption decisions while deleting the \"obstruct, impair, or condition\" language from its preemption rules. While the OCC acknowledged that this language \"created ambiguities and misunderstandings regarding the preemption standard that it was intended to convey,\" it maintained that the specific preemption determinations reflected in its 2004 rules were nevertheless consistent with Barnett Bank . The OCC accordingly proposed reaffirming the specific preemption determinations in its 2004 rules while removing the \"obstruct, impair, or condition\" standard.", "The OCC's proposal quickly generated controversy. After the OCC issued the notice, the Treasury Department's General Counsel wrote a letter to the Comptroller of the Currency arguing that the OCC's proposed rule was \"inconsistent with the plain language of [Dodd-Frank] and its legislative history.\" Specifically, the Treasury Department argued that interpreting Section 1044 as making no significant changes to existing preemption law conflicted with \"basic canons of statutory construction\" and legislative history indicating that the provision was intended to \"revise[]\" the OCC's preemption standard. Senator Carl Levin also expressed disagreement with the proposed rules in a letter to the Comptroller, arguing that \"[i]f [Congress] had wanted to leave the OCC's purported federal preemptive powers unchanged, [it] could have engaged in a very simple exercise\u2014do nothing.\" ", "Other Senators expressed support for the OCC's proposed rules. Senators Tom Carper and Mark Warner criticized the Treasury Department's letter for \"ignor[ing] the clear legislative history indicating that [Section 1044] is intended to codify the Barnett case.\" In responding to the Treasury Department's argument that Section 1044 was intended to \"revise\" the OCC's preemption standards, Senators Carper and Warner argued that the OCC's proposed rules would effectuate the contemplated revision by removing the potentially troublesome \"obstruct, impair, or condition\" language from the agency's 2004 rules.", "The OCC ultimately agreed with Senators Carper and Warner. In July 2011, the OCC published a final regulation revising its preemption rules. In the final rule, the OCC concluded that \"the Dodd-Frank Act does not create a new, stand-alone 'prevents or significantly interferes' preemption standard, but, rather, incorporates the conflict preemption legal standard and the reasoning that supports it in the Supreme Court's Barnett decision.\" The OCC's 2011 rule also deleted the phrase \"obstruct, impair, or condition\" from the relevant preemption standard, noting that preemption determinations based \"exclusively\" on that language \"would need to be reexamined to ascertain whether the determination is consistent with the Barnett conflict preemption analysis.\" However, the rule indicated that the OCC had not identified any preemption determinations that in fact relied \"exclusively\" on the relevant language. The final rule also noted that all future OCC preemption determinations would be subject to Section 1044's requirement concerning \"case-by-case\" determinations.", "Since the enactment of Dodd-Frank, a number of courts have interpreted Section 1044 as codifying the Barnett Bank standard. Some courts have accordingly concluded that Barnett Bank demarcates the boundaries of the OCC's 2011 preemption rules, reasoning that those rules do not preempt any state laws that would survive preemption under the Barnett Bank test. One court has also addressed the appropriate level of judicial deference towards the OCC's 2011 preemption determinations. As discussed, Section 1044 provides that courts \"shall\" assess OCC preemption determinations \"depending upon the thoroughness evident in the consideration of the agency, the validity of the reasoning of the agency, the consistency with other valid determinations made by the agency, and other factors which the court finds persuasive and relevant to its decision\"\u2014a standard commonly known as \" Skidmore deference.\" In 2018, the Ninth Circuit concluded that the OCC's 2011 preemption determinations are \"entitled to little, if any, deference\" under Skidmore . Specifically, the Ninth Circuit reasoned that because the OCC's 2011 preemption determinations represent the agency's \"articulation of its legal analysis\" under Barnett Bank (as opposed to being grounded in expert factual findings), those determinations would not warrant significant deference even in the absence of Section 1044. Whether other federal circuit courts will follow the Ninth Circuit in affording minimal deference to the OCC's 2011 preemption rules remains to be seen. "], "subsections": []}]}, {"section_title": "Current Issues in Banking Preemption", "paragraphs": ["As the debates over Section 1044 of Dodd-Frank make clear, a number of banking preemption issues remain the subject of active debate. This final section of the report discusses three additional current issues involving banking preemption and related federalism questions."], "subsections": [{"section_title": "Interest Rate Exportation and Non-Banks", "paragraphs": ["A number of recent judicial decisions have generated debate over the circumstances in which non-bank financial companies can benefit from banks' ability to \"export\" the maximum interest rates of their \"home\" states. As discussed, the Supreme Court has held that national banks may charge any interest rate allowable under the laws of their home states even when lending to borrowers in other states with stricter usury laws. After this decision, Congress extended the power to export maximum interest rates to federally insured state banks. Recently, courts have grappled with whether this exportation power extends to non-bank financial companies and debt collectors that purchase loans originated by federally insured banks. That is, courts have addressed the circumstances in which loans originated by federally insured banks remain subject to the usury laws of the banks' home states even when the loans are (1) made to borrowers in other states with stricter usury laws, and (2) subsequently purchased by non-banks, which do not possess the exportation power when they originate loans themselves. "], "subsections": [{"section_title": "Madden and the \"Valid When Made\" Doctrine", "paragraphs": ["A number of courts have concluded that in certain contexts, a loan that is non-usurious when originated remains non-usurious irrespective of the identity of its subsequent purchasers\u2014a principle that some commentators have labeled the \"valid when made\" doctrine. However, in 2015, the Second Circuit rejected the application of this rule in Madden v. Midland Funding , holding that non-bank debt collectors that had purchased debt originated by a national bank could not benefit from the bank's exportation power. In Madden , a New York resident brought a putative class action under New York usury law against debt collectors that had purchased her credit card debt from a Delaware-based national bank. In response, the debt collectors argued that federal law preempted the New York usury claims because the credit card debt had been originated by a Delaware-based national bank and was not usurious under Delaware law. The Second Circuit rejected this argument, reasoning that the application of New York usury law to the debt collectors did not \"significantly interfere\" with the national bank's powers under Barnett Bank . Specifically, the court reasoned that because the debt collectors were not national banks and were not acting \"on behalf of\" a national bank, the New York usury claims did not interfere with the national bank's power to export the maximum interest rates of its home state. ", "The Second Circuit's decision in Madden has generated significant debate. In an amicus brief supporting the debt collectors' petition for re-hearing before the Second Circuit, industry groups argued that the decision threatened to seriously disrupt lending markets. Specifically, these groups argued that the court's decision would \"significantly impair\" banks' ability to manage their risk by selling loans in secondary credit markets\u2014a result that would ultimately inhibit their capacity to originate loans. Similarly, in an amicus brief submitted to the Supreme Court, the OCC and the Office of the Solicitor General (OSG) argued that the Second Circuit's decision was \"incorrect,\" reasoning that \"[a] national bank's federal right to charge interest up to the rate allowed by [the NBA] would be significantly impaired if [a] national bank's assignee could not continue to charge that rate.\" In response, the plaintiff in Madden argued that the Second Circuit's decision is unlikely to significantly affect credit markets. Specifically, the Madden plaintiff argued that the court's decision will not disrupt credit markets because non-banks that purchase loans originated by banks retain the right to collect the balances of those loans within applicable state law usury limits. ", "While the Second Circuit ultimately denied the debt collectors' petition for re-hearing and the Supreme Court denied their petition for a writ of certiorari, the Madden decision has attracted congressional interest. The Financial CHOICE Act\u2014comprehensive regulatory reform legislation that passed the House of Representatives in June 2017 but did not become law\u2014would have codified the \"valid when made\" doctrine and abrogated Madden . A more limited bill directed solely at codifying the \"valid when made\" doctrine ( H.R. 3299 ) also passed the House in February 2018 but did not become law. Echoing the arguments made by industry groups, the bill's sponsor contended that the Second Circuit's decision will harm credit markets and impede financial innovation. By contrast, the bill's critics argued that it would facilitate predatory lending by allowing non-banks to evade state usury laws. These proposals have not been re-introduced in the 116th Congress. "], "subsections": []}, {"section_title": "The \"True Lender\" Doctrine", "paragraphs": ["In a number of cases involving the scope of the exportation doctrine, non-bank financial companies have played a more active role in the origination process than the debt collectors in Madden . Specifically, a number of these cases have involved arrangements in which a non-bank financial company solicits borrowers, directs a partner bank to originate a high-interest loan, and purchases the loan from the bank shortly after origination in order to benefit from the bank's exportation power. Some courts have held that non-banks employing these so-called \"rent-a-charter\" schemes are not eligible for federal preemption, reasoning that preemption depends on a transaction's economic realities rather than its formal characteristics. Specifically, these courts have concluded that non-banks do not assume their partner banks' exportation power when the economic realities surrounding a transaction indicate that the non-banks are the \"true lenders.\" According to this \"true lender\" doctrine, non-banks that have established these types of relationships qualify as the \"true lenders\" when they possess the \"predominant economic interest\" in the relevant loans when the loans are originated. In these circumstances, some courts have concluded that the non-banks are not entitled to the benefits of federal preemption.", "Like the Second Circuit's decision in Madden , these \"true lender\" decisions have attracted Congress's attention. In the 115th Congress, H.R. 4439 would have abrogated this line of decisions by making clear that a loan's originator is always the \"true lender\" for purposes of the exportation doctrine. The bill's supporters argued that the \"true lender\" decisions threaten to undermine partnerships between banks and FinTech companies \u2014a broad category of businesses offering digital financial products that some commentators have hailed for their innovative potential. The bill's opponents, by contrast, contended that the legislation would allow non-banks to circumvent state usury laws and questioned the value of bank-FinTech partnerships designed with that purpose in mind. H.R. 4439 was referred to the House Committee on Financial Services during the 115th Congress but has not been re-introduced in the 116th Congress. "], "subsections": []}]}, {"section_title": "Special Purpose National Bank Charters for FinTech Companies", "paragraphs": ["Congress is not alone in considering whether to extend the benefits of federal preemption to FinTech companies. In July 2018, the OCC issued a Policy Statement announcing that it will begin accepting applications for \"special purpose national bank charters\" (SPNB charters) from FinTech companies that are engaged in \"the business of banking\" but do not take deposits. In the Policy Statement, the OCC explained that the NBA provides it \"broad authority\" to grant national bank charters to institutions that engage in the \"business of banking\"\u2014a category that includes paying checks and lending money. The OCC accordingly concluded that it has the statutory authority to grant national bank charters to FinTech companies that engage in these core banking activities. According to the OCC, SPNB charters will help foster responsible innovation and promote regulatory consistency between FinTech companies and traditional banks. The OCC further explained that it will use its existing chartering standards and procedures to evaluate applications for SPNB charters, and that FinTech companies that receive such charters \"will be supervised like similarly situated national banks, including with respect to capital, liquidity, and risk management.\" While the OCC touted the ability of SPNB charters to \"level the playing field with regulated institutions\" without explicitly mentioning federal preemption, commentators have observed that preemption represents \"the central benefit\" offered by such charters.", "The OCC's decision to accept applications for national bank charters from FinTech companies has generated debate. Critics of the policy have contended that FinTech companies' interest in such charters \"is virtually entirely about avoiding state consumer protection laws,\" and that \"[f]ederal chartering should not be a move to eviscerate\" such laws. State regulators have also filed lawsuits challenging the OCC's authority to charter non-depository FinTech companies. In the spring of 2017, the Conference of State Bank Supervisors (CSBS) and the New York Department of Financial Services (NYDFS) responded to an early OCC proposal to charter FinTech companies by filing suits in the U.S. District Court for the District of Columbia and the U.S. District Court for the Southern District of New York, respectively. The CSBS and NYDFS made substantially similar claims, arguing that (1) the NBA does not give the OCC the authority to charter non-depository institutions, (2) the Administrative Procedure Act requires the OCC to follow notice-and-comment rulemaking procedures before issuing SPNBs, (3) the OCC's decision was arbitrary and capricious, and (4) the OCC's decision violated the Tenth Amendment by invading states' sovereign powers. Both district courts dismissed the lawsuits on jurisdictional grounds, reasoning that the organizations failed to identify any imminent injuries to their members and that the case was not ripe for resolution because the OCC had not issued any SPNBs. However, after the OCC issued its Policy Statement in July 2018, both organizations filed new lawsuits that remain pending."], "subsections": []}, {"section_title": "Banking and the Marijuana Industry", "paragraphs": ["Policymakers have also turned their attention to how federal law affects traditional banks' responses to changes in state law\u2014namely, state-level efforts to legalize marijuana. While a number of states have legalized marijuana for medical or recreational use, federal law criminalizes the drug's sale, distribution, and possession, in addition to the aiding and abetting of such activities. Federal law also criminalizes money laundering, making it unlawful to: ", "conduct a financial transaction involving the proceeds of a specified unlawful activity \u2014a category that includes the sale or distribution of marijuana\u2014\"knowing that the transaction is designed . . . to conceal or disguise the nature, the location, the source, the ownership or the control of the proceeds . . . or to avoid a transaction reporting requirement under State or Federal law\"; or knowingly engage in a monetary transaction in criminally derived property of a value greater than $10,000 that is derived from specified unlawful activity .", "Finally, the Bank Secrecy Act (BSA) and associated regulations require that financial institutions report illegal and suspicious activities to the Financial Crimes Enforcement Network (FinCEN) and maintain programs designed to prevent money laundering. Federal banking regulators have broad powers to discipline banks for violations of these laws. The Federal Reserve regularly conducts examinations of member banks that include evaluations of BSA compliance, and the FDIC has the authority to terminate a bank's deposit insurance for violations of law.", "Because of marijuana's status under federal law, many banks have refused to serve marijuana businesses even when those businesses operate in compliance with state law. While some small banks have offered accounts to marijuana businesses, an estimated 70 percent of marijuana businesses remain unbanked. Because of this inability to access the banking system, many marijuana businesses reportedly operate entirely in cash, raising concerns about tax collection and public safety. ", "These perceived problems have attracted congressional interest. In March 2019, the House Committee on Financial Services approved legislation intended to minimize the legal risks associated with banking the marijuana industry. The proposed bill\u2014 H.R. 1595 , the SAFE Banking Act of 2019\u2014would create a \"safe harbor\" under which federal banking regulators could not take various adverse actions against depository institutions for serving marijuana businesses that comply with applicable state laws (\"cannabis-related legitimate businesses\"). The legislation would also provide that for purposes of federal anti-money laundering law, the proceeds from transactions conducted by cannabis-related legitimate businesses shall not qualify as the proceeds of unlawful activity \"solely because the transaction[s] [were] conducted by a cannabis-related legitimate business.\" Finally, H.R. 1595 would require FinCEN to issue guidance concerning the preparation of suspicious activity reports for cannabis-related legitimate businesses that is \"consistent with the purpose and intent\" of the bill and \"does not significantly inhibit the provision of financial services\" to cannabis-related legitimate businesses.", "Variations on some of the SAFE Banking Act's provisions have been incorporated into broader marijuana-related legislation. The Responsibly Addressing Marijuana Policy Gap Act of 2019 ( S. 421 and H.R. 1119 ) would eliminate federal criminal penalties for persons who engage in various marijuana-related activities in compliance with state law and create a \"safe harbor\" from adverse regulatory action for depository institutions that serve marijuana businesses. Another Senate bill\u2014 S. 1028 , the STATES Act\u2014would provide that the Controlled Substances Act's (CSA's) marijuana-related provisions do not apply to persons acting in compliance with state marijuana regulation s, subject to certain exceptions. While the bill does not have the type of \"safe harbor\" for depository institutions in H.R. 1595 , S. 421 , or H.R. 1119 , it contains a \"Rule of Construction\" clarifying that conduct in compliance with the legislation shall not serve as the basis for federal money laundering charges or criminal forfeiture under the CSA."], "subsections": []}]}]}}
{"id": "R44934", "title": "Interior, Environment, and Related Agencies: Overview of FY2019 Appropriations", "released_date": "2019-03-29T00:00:00", "summary": ["The Interior, Environment, and Related Agencies appropriations bill contains funding for more than 30 agencies and entities. They include most of the Department of the Interior (DOI) as well as agencies within other departments, such as the Forest Service within the Department of Agriculture and the Indian Health Service within the Department of Health and Human Services. The bill also provides funding for the Environmental Protection Agency (EPA), arts and cultural agencies, and other organizations and entities. Issues for Congress included determining the amount, terms, and conditions of funding for agencies and programs.", "For FY2019, the enacted appropriation for Interior, Environment, and Related Agencies was $35.61 billion. This total was composed of $13.02 billion for DOI agencies in Title I, $8.06 billion for EPA in Title II, $13.74 billion for the 23 \"related agencies\" in Title III, and $791.0 million in Title IV for certain EPA activities.", "The FY2019 appropriation was $300.0 million (0.8%) more than the FY2018 regular appropriation of $35.31 billion (in P.L. 115-141), but $975.4 million (2.7%) less than the FY2018 total appropriation of $36.59 billion, including $1.28 billion in emergency supplemental appropriations for disaster relief (in P.L. 115-72 and P.L. 115-123). The FY2019 appropriation was $7.28 billion (25.7%) more than the President's request ($28.34 billion), $305.5 million (0.9%) more than the House-passed level ($35.31 billion), and $301.0 million (0.8%) less than the Senate-passed amount ($35.91 billion).", "Because the FY2019 appropriation was not enacted until February 15, 2019, agencies received continuing appropriations for certain periods before that date. Specifically, from October 1, 2018, through December 21, 2018, and again from January 25, 2019, through February 15, 2019, appropriations were provided under a continuing resolution (CR) at the FY2018 level (in Division G of P.L. 115-141). Due to a lapse in funds after December 21, 2018, until January 25, 2019, a partial government shutdown went into effect. Agencies in the Interior bill generally operated under \"contingency\" plans that summarize activities that would cease and activities that would continue during a lapse in appropriations.", "In earlier action, President Trump's request of $28.34 billion for FY2019 for Interior, Environment, and Related Agencies included $10.59 billion for DOI agencies, $6.19 billion for EPA, and $11.56 billion for related agencies. The versions of H.R. 6147 (115th Congress) passed by the House on July 19, 2018, and by the Senate on August 1, 2018, contained higher FY2019 appropriations overall, and for each title of the bill, than requested. The President's request also contained a legislative proposal for a $1.52 billion cap adjustment to the discretionary spending limits in law for certain wildland fire suppression activities. This cap adjustment was not approved by the chambers or enacted for FY2019. However, Congress enacted a similar proposal (in P.L. 115-141), under which the adjustment becomes available in FY2020.", "The President, House, and Senate each proposed less funding for FY2019 relative to the FY2018 total of $36.59 billion (including emergency supplemental appropriations), proposing 22.5%, 3.5%, and 1.8% less, respectively. In contrast, relative to the regular FY2018 appropriation of $35.31 billion, the President would have reduced funding (19.8%), the House would have provided nearly level appropriations (<0.1% decrease), and the Senate would have increased funding (1.7%) for FY2019.", "For individual agencies and programs in the bill, there are many differences among the funding levels enacted for FY2019 and those supported by the President, House, and Senate for FY2019 and enacted for FY2018. This report highlights funding for selected agencies and programs that have been among the many of interest to Congress, stakeholders, and the public."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report focuses on FY2019 discretionary appropriations for Interior, Environment, and Related Agencies. At issue for Congress were determining the amount of funding for agencies and programs in the bill, and the terms and conditions of such funding. ", "This report first presents a short overview of the agencies and other entities funded in the bill. It then describes the appropriations requested by President Trump for FY2019 for Interior, Environment, and Related Agencies. Next, it briefly compares the appropriations enacted for FY2018 with the FY2019 appropriations requested by the President; passed by the House in H.R. 6147 (115 th Congress) on July 19, 2018; passed by the Senate, also in H.R. 6147 (115 th Congress) on August 1, 2018; and enacted in Division E of P.L. 116-6 on February 15, 2019. Finally, this report compares FY2018 and FY2019 funding for several agencies and issues that have been among those of interest to Congress. They include the Bureau of Land Management, Environmental Protection Agency (EPA), U.S. Fish and Wildlife Service, Forest Service, Indian Affairs, Indian Health Service, Land and Water Conservation Fund, National Park Service, Payments in Lieu of Taxes Program, Smithsonian Institution, U.S. Geological Survey, and Wildland Fire Management.", "For FY2019, the enacted appropriation for Interior, Environment, and Related Agencies was $35.61 billion. This total was composed of $13.02 billion for DOI agencies in Title I, $8.06 billion for EPA in Title II, $13.74 billion for \"Related Agencies\" in Title III, and $791.0 million in Title IV for certain activities of EPA. The FY2019 appropriation was $300.0 million (0.8%) more than the FY2018 regular appropriation of $35.31 billion, but $975.4 million (2.7%) less than the FY2018 total appropriation of $36.59 billion, including $1.28 billion in emergency supplemental appropriations for disaster relief. The FY2019 appropriation was $7.28 billion (25.7%) more than the President's request ($28.34 billion), $305.5 million (0.9%) more than the level passed by the House ($35.31 billion), and $301.0 million (0.8%) less than the level passed by the Senate ($35.91 billion). ", "Because the FY2019 appropriation was not enacted until February 15, 2019, Interior, Environment, and Related Agencies received continuing appropriations for certain periods before that date. Specifically, from the start of the fiscal year on October 1, 2018, through December 21, 2018, continuing appropriations were provided at the FY2018 level (in Division G of P.L. 115-141 ). The continuing resolution (CR) generally provided funds for continuing projects and activities under the same authority and conditions and to the same extent and manner as for FY2018. However, the CR included certain exceptions (\"anomalies\") that changed the purposes or amounts of funds, extended expiring provisions of law, or made other changes to existing law.", "The CR expired after December 21, 2018, before being extended on January 25, 2019, through February 15, 2019. As a result of the lapse in funds, a partial government shutdown went into effect between December 22, 2018, and January 25, 2019. During that time, agencies in the Interior bill generally operated under \"contingency\" plans that summarize activities that would cease and activities that would continue during a lapse in appropriations. ", "In the 116 th Congress, the House and Senate considered a variety of measures to provide FY2019 funding to Interior, Environment, and Related Agencies. Other than H.J.Res. 31 , enacted as P.L. 116-6 and containing regular FY2019 appropriations, these measures are not discussed in this report. They included proposals for relatively short-term as well as full-year funding, and are identified on the CRS Appropriations Status Table at http://www.crs.gov/AppropriationsStatusTable/Index . ", "Appropriations are complex. Budget justifications for some agencies are large, often several hundred pages long and containing numerous funding, programmatic, and legislative changes for congressional consideration. Further, appropriations laws provide funds for numerous accounts, activities, and subactivities, and the accompanying explanatory statements provide additional directives and other important information. This report generally does not provide in-depth information at the account and subaccount levels, nor does it detail budgetary reorganizations or legislative changes enacted in law or proposed for FY2019. For information on a particular agency or on individual accounts, programs, or activities administered by a particular agency, contact the key policy staff listed at the end of this report. In addition, for selected reports related to appropriations for Interior, Environment, and Related Agencies, such as individual agencies (e.g., National Park Service) or cross-cutting programs (e.g., Wildland Fire Management), see the \"Interior & Environment Appropriations\" subissue under the \"Appropriations\" Issue Area page on the Congressional Research Service (CRS) website."], "subsections": []}, {"section_title": "Overview of Interior, Environment, and Related Agencies", "paragraphs": ["The annual Interior, Environment, and Related Agencies appropriations bill includes funding and other provisions for agencies and programs in three separate federal departments and for numerous related agencies. The Interior bill typically contains three primary appropriations titles and a fourth title with general provisions. Title I provides funding for most Department of the Interior (DOI) agencies, many of which manage land and other natural resource or regulatory programs. Title I also typically includes general provisions related to DOI agencies. Title II contains appropriations and administrative provisions for EPA. Title III, Related Agencies, currently funds 23 agencies in other departments, such as the Forest Service in the Department of Agriculture and the Indian Health Service in the Department of Health and Human Services; arts and cultural agencies, including the Smithsonian Institution; and various other organizations and entities. Title III also contains administrative provisions for some agencies funded therein. A fourth title of the bill, General Provisions, typically contains additional guidance and direction for agencies in the bill. In addition, in the FY2018 appropriations law and the House-passed, Senate-passed, and enacted measures for FY2019, Title IV also included appropriations, primarily for EPA. Selected major agencies in the Interior bill are briefly described below."], "subsections": [{"section_title": "Title I. Department of the Interior11", "paragraphs": ["DOI's mission is to protect and manage the nation's natural resources and cultural heritage; provide scientific and other information about those resources and natural hazards; and exercise trust responsibilities and other commitments to American Indians, Alaska Natives, and affiliated island communities. There are eight DOI agencies and two other broad accounts funded in the Interior bill that carry out this mission. Hereinafter, these agencies and broad accounts are referred to collectively as the 10 DOI \"agencies.\" Not including the two broad accounts, the DOI agencies funded in the Interior bill include the following:", "The Bureau of Land Management administers about 246 million acres of public land, mostly in the West, for diverse uses such as energy and mineral development, livestock grazing, recreation, and preservation. The agency also is responsible for about 700 million acres of federal onshore subsurface mineral estate throughout the nation and supervises the mineral operations on about 56 million acres of Indian trust lands. The U.S. F ish and Wildlife Service administers 89 million acres of federal land within the National Wildlife Refuge System and other areas, including 77 million acres in Alaska. It also manages several large marine refuges and marine national monuments, sometimes jointly with other federal agencies. In addition, the U.S. Fish and Wildlife Service is the primary agency responsible for implementing the Endangered Species Act (16 U.S.C. \u00a7\u00a71531 et seq.) through listing of species; consulting with other federal agencies; collaborating with private entities and state, tribal, and local governments; and other measures. It is also the primary agency responsible for promoting wildlife habitat; enforcing federal wildlife laws; supporting wildlife and ecosystem science; conserving migratory birds; administering grants to aid state fish and wildlife programs; and coordinating with state, international, and other federal agencies on fish and wildlife issues. The National Park Service administers 80 million acres of federal land within the National Park System, including 419 separate units in the 50 states, District of Columbia, and U.S. territories. Roughly two-thirds of the system's lands are in Alaska. The National Park Service has a dual mission\u2014to preserve unique resources and to provide for their enjoyment by the public. The agency also supports and promotes some resource conservation activities outside the National Park System through grant and technical assistance programs and cooperation with partners. The U.S. Geological Survey is a science agency that provides physical and biological information related to geological resources; climate and land use change; natural hazards; and energy, mineral, water, and biological sciences and resources. In addition, it is the federal government's principal civilian mapping agency and a primary source of data on the quality of the nation's water resources. The Bureau of Ocean Energy Management manages development of the nation's offshore conventional and renewable energy resources in the Atlantic, the Pacific, the Gulf of Mexico, and the Arctic. These resources are located in areas covering approximately 1.7 billion acres located beyond state waters, mostly in the Alaska region (more than 1 billion acres) but also off all coastal states. The Bureau of Safety and Environmental Enforcement provides regulatory and safety oversight for resource development in the outer continental shelf. Among its responsibilities are oil and gas permitting, facility inspections, environmental compliance, and oil spill response planning. The Office of Surface Mining Reclamation and Enforcement works with states and tribes to reclaim abandoned coal mining sites. The agency also regulates active coal mining sites to minimize environmental impacts during mining and to reclaim affected lands and waters after mining. Indian Affairs agencies provide and fund a variety of services to federally recognized American Indian and Alaska Native tribes and their members. Historically, these agencies have taken the lead in federal dealings with tribes. The Bureau of Indian Affairs is responsible for programs that include government operations, courts, law enforcement, fire protection, social programs, roads, economic development, employment assistance, housing repair, irrigation, dams, Indian rights protection, implementation of land and water settlements, and management of trust assets (real estate and natural resources). The Bureau of Indian Education funds an elementary and secondary school system, institutions of higher education, and other educational programs."], "subsections": []}, {"section_title": "Title II. Environmental Protection Agency", "paragraphs": ["EPA has no organic statute establishing an overall mission; rather, the agency administers various environmental statutes, which have an express or general objective to protect human health and the environment. Primary responsibilities include the implementation of federal statutes regulating air quality, water quality, drinking water safety, pesticides, toxic substances, management and disposal of solid and hazardous wastes, and cleanup of environmental contamination. EPA also awards grants to assist states and local governments in implementing federal law and complying with federal requirements to control pollution. The agency also administers programs that provide financial assistance for public wastewater and drinking water infrastructure projects."], "subsections": []}, {"section_title": "Title III. Related Agencies", "paragraphs": ["Title III of the Interior bill currently funds 23 agencies, organizations, and other entities, which are collectively referred to hereinafter as the \"Related Agencies.\" Among the Related Agencies funded in the Interior bill, roughly 95% of the funding is typically provided to the following: ", "The Forest Service in the Department of Agriculture manages 193 million acres of federal land within the National Forest System\u2014consisting of national forests, national grasslands, and other areas\u2014in 43 states, the Commonwealth of Puerto Rico, and the Virgin Islands. It also provides technical and financial assistance to states, tribes, and private forest landowners and conducts research on sustaining forest resources for future generations. The Indian Health Service in the Department of Health and Human Services provides medical and environmental health services for more than 2 million American Indians and Alaska Natives. Health care is provided through a system of facilities and programs operated by the agency, tribes and tribal organizations, and urban Indian organizations. The agency operates 26 hospitals, 57 health centers, and 21 health stations. Tribes and tribal organizations, through Indian Health Service contracts and compacts, operate another 22 hospitals, 286 health centers, 62 health stations, and 134 Alaska Native village clinics. The Smithsonian Institution is a museum and research complex consisting of 19 museums and galleries, the National Zoo, and 9 research facilities throughout the United States and around the world. Established by federal legislation in 1846 with the acceptance of a trust donation by the institution's namesake benefactor, the Smithsonian is funded by both federal appropriations and a private trust. The National Endowment for the Arts and the National Endowment for the Humanities make up the National Foundation on the Arts and the Humanities. The National Endowment for the Arts is a major federal source of support for all arts disciplines. Since 1965, it has awarded more than 145,000 grants, which have been distributed to all states. The National Endowment for the Humanities generally supports grants for humanities education, research, preservation, and public humanities programs; creation of regional humanities centers; and development of humanities programs under the jurisdiction of state humanities councils. Since 1965, it has awarded approximately 63,000 grants. It also supports a Challenge Grant program to stimulate and match private donations in support of humanities institutions. "], "subsections": []}]}, {"section_title": "FY2019 Appropriations", "paragraphs": [], "subsections": [{"section_title": "Components of President Trump's Request", "paragraphs": ["For FY2019, President Trump requested $28.34 billion for the more than 30 agencies and entities in the Interior, Environment, and Related Agencies appropriations bill. The President also requested the establishment of a new adjustment to the discretionary spending limits for certain wildland fire suppression activities, and he requested $1.52 billion to be made available through the cap adjustment for FY2019. Budget authority designated for those activities would cause the spending limits to be adjusted, making it effectively not subject to the limits. ", "For the 10 major DOI agencies in Title I of the bill, the request was $10.59 billion, or 37.4% of the $28.34 billion total requested. For EPA, funded in Title II of the bill, the request was $6.19 billion, or 21.8% of the total. For the 23 agencies and other entities funded in Title III of the bill, the request was $11.56 billion, or 40.8% of the total.", "Appropriations for agencies vary widely for reasons relating to the number, breadth, and complexity of agency responsibilities; alternative sources of funding (e.g., mandatory appropriations); and Administration and congressional priorities, among other factors. Thus, although the President's FY2019 request covered more than 30 agencies, funding for a small subset of these agencies accounted for most of the total. For example, the requested appropriations for three agencies\u2014EPA, Forest Service, and Indian Health Service\u2014were more than half (57.4%) of the total request. Further, three-quarters (75.5%) of the request was for these three agencies and two others, National Park Service and Indian Affairs. ", "For DOI agencies, the FY2019 requests ranged from $121.7 million for the Office of Surface Mining Reclamation and Enforcement to $2.70 billion for the National Park Service. The requests for 5 of the 10 agencies exceeded $1 billion. Nearly half (48.3%) of the $10.59 billion requested for DOI agencies was for two agencies\u2014the National Park Service ($2.70 billion) and Indian Affairs ($2.41 billion). ", "For Related Agencies in Title III, the requested funding levels exhibited even more variation. The President sought amounts ranging from no funding for two entities\u2014grants under National Capital Arts and Cultural Affairs and the Women's Suffrage Centennial Commission\u2014to $5.42 billion for the Indian Health Service. The Forest Service was the only other agency for which more than $4 billion was requested. The next-largest request was for the Smithsonian Institution, at $957.4 million. By contrast, 19 entities each had requests of $62 million or less, including 12 with requests of less than $10 million each. ", " Figure 1 identifies the share of the President's FY2019 request for particular agencies in the Interior bill. "], "subsections": []}, {"section_title": "Overview of FY2019 Appropriations Compared with FY2018 Enacted Appropriations", "paragraphs": ["For FY2018, the total enacted appropriation for Interior, Environment, and Related Agencies was $36.59 billion. This total included $35.31 billion in regular appropriations and $1.28 billion in emergency supplemental appropriations for disaster relief. As noted, for FY2019, the President sought $28.34 billion for agencies in the Interior bill and a discretionary cap adjustment of $1.52 billion for wildland fire suppression. Neither the House nor the Senate version of H.R. 6147 , as passed during the 115 th Congress, nor the FY2019 enacted legislation, contained the cap adjustment. ", "H.R. 6147 , as passed by the House on July 19, 2018, would have provided $35.31 billion for FY2019. H.R. 6147 , as passed by the Senate on August 1, 2018, would have provided $35.91 billion for FY2019. ", "For FY2019, the enacted appropriation for Interior, Environment, and Related Agencies in P.L. 116-6 was $35.61 billion. Thus, when including the supplemental disaster funding for FY2018, the President's request, House-passed bill, Senate-passed bill, and FY2019 enacted appropriation contained less overall funding for FY2019 as compared to the FY2018 total of $36.59 billion, as follows:", "$8.25 billion (22.5%) less under the President's request, $1.28 billion (3.5%) less under the House-passed bill, $674.4 million (1.8%) less under the Senate-passed bill, and $975.4 million (2.7%) less under the FY2019 enacted appropriation.", "However, relative to the regular FY2018 appropriation of $35.31 billion (excluding the supplemental disaster funding), for FY2019: ", "the President's request would have reduced funding by $6.98 billion (19.8%), the House-passed bill would have provided nearly level appropriations, with a decrease of $5.5 million (<0.1%), the Senate-passed bill would have increased funding by $601.0 million (1.7%), and the FY2019 enacted appropriation provided an increase of $300.0 million (0.8%). ", " Figure 2 depicts the regular appropriations enacted for FY2018, requested by the President for FY2019, in H.R. 6147 (115 th Congress) as passed by the House for FY2019, in H.R. 6147 (115 th Congress) as passed by the Senate for FY2019, and enacted for FY2019 in Division E of P.L. 116-6 . It shows the appropriations contained in each of the three main appropriations titles of the Interior bill\u2014Title I (DOI), Title II (EPA), and Title III (Related Agencies)\u2014and in the general provisions in Title IV. For FY2018 enacted appropriations, it also depicts the emergency supplemental appropriations for disaster relief. Table 1 , at the end of this report, lists the appropriations for each agency that were enacted for FY2018, requested by the President for FY2019, passed by the House in H.R. 6147 (115 th Congress) for FY2019, passed by the Senate in H.R. 6147 (115 th Congress) for FY2019, and enacted for FY2019 in Division E of P.L. 116-6 . It also contains the percentage changes between FY2018 enacted appropriations and FY2019 enacted appropriations. "], "subsections": []}, {"section_title": "Selected Agencies and Programs25", "paragraphs": ["There are many differences among the FY2018 enacted appropriations and the FY2019 funding requested by the President, passed by the House, passed by the Senate, and enacted. Selected agencies and programs are highlighted below, among the many of interest to Members of Congress, stakeholders, and the public. For the selected agencies and programs, the discussions below briefly compare FY2018 regular annual funding with FY2019 levels requested by the Administration, approved by the House in H.R. 6147 (115 th Congress), approved by the Senate in H.R. 6147 (115 th Congress), and enacted for FY2019 in Division E of P.L. 116-6 . Including FY2018 emergency supplemental appropriations would result in different comparisons for some of the agencies and programs covered below."], "subsections": [{"section_title": "Bureau of Land Management", "paragraphs": ["The Administration sought a decrease of 23.2% from the FY2018 appropriation ($1.33 billion) for the Bureau of Land Management (BLM). The request contained lower funding for many BLM accounts and programs, including those for overall Management of Lands and Resources, and Land Acquisition by the agency. The House and Senate versions of the bill included increased appropriations for BLM for FY2019, of 4.1% and 0.9% respectively, with additional funds for the Management of Lands and Resources. The Senate also would have provided an increase for Land Acquisition, but the House would have reduced funds for that purpose. Further, the Administration proposed a budget restructuring within the Management of Lands and Resources account, to increase flexibility, cost savings, and program integration. The Senate, but not the House, would have adopted this restructuring. ", "The FY2019 enacted appropriation of $1.35 billion was a $14.3 million (1.1%) increase over the FY2018 appropriation. It reflected the President's proposed restructuring in the Management of Lands and Resources account, and increased funds for that account and for Land Acquisition, with level funding for other accounts. "], "subsections": []}, {"section_title": "Environmental Protection Agency", "paragraphs": ["For FY2018, EPA received $8.06 billion in Title II of the regular appropriations law, and another $766.0 million in Title IV of that law, for an FY2018 regular appropriation of $8.82 billion. This discussion generally reflects funding in Title II only. Relative to the FY2018 appropriations in Title II only ($8.06 billion), the EPA would have received a decrease under the Administration's request (23.2%) and under the House-passed bill (1.6%), but it would have received level funding under the Senate-passed bill. The request contained lower funding for several accounts, among them Science and Technology, Environmental Programs and Management (including geographic programs), and State and Tribal Assistance Grants (STAG, including categorical grants). However, the Administration sought level funding in the STAG account for capitalization grants to states for wastewater infrastructure projects through the Clean Water State Revolving Fund (SRF) and for drinking water infrastructure grants to states through the Drinking Water SRF. Moreover, the Administration asked for increased appropriations for two accounts, Buildings and Facilities and the Water Infrastructure Finance and Innovation Program. ", "The House and Senate versions of the bill both supported level (or nearly level) funding for some accounts and programs (e.g., the Clean Water SRF and the Drinking Water SRF). However, whereas the Senate would have provided level funding for many accounts, the House more often supported decreases (e.g., Science and Technology, and Environmental Programs and Management) or increases (e.g., Water Infrastructure Finance and Innovation Program, and Hazardous Substance Superfund). ", "For FY2019, EPA received $8.06 billion in Title II of the regular appropriations law, and another $791.0 million in Title IV of that law, for an FY2019 regular appropriation of $8.85 billion. This was a $25.0 million (0.3%) increase over the FY2018 total appropriation. The $8.06 billion enacted for FY2019 in Title II was equal to the FY2018 appropriation for Title II (and the Senate-passed level for FY2019). The FY2019 enacted appropriation included funding at the FY2018 level for each EPA account except for STAG, which increased by $42.9 million (1.2%) over FY2018. There was a corresponding change in rescissions, with $42.9 million more in (account-specific) rescissions enacted in FY2019 than in FY2018."], "subsections": []}, {"section_title": "U.S. Fish and Wildlife Service", "paragraphs": ["For the U.S. Fish and Wildlife Service (FWS), differing amounts of reductions from the FY2018 level ($1.59 billion) were proposed for FY2019 by the Administration (23.1%), House (0.9%), and Senate (1.2%). The Administration sought to reduce funding for the Resource Management account overall, with cuts in programs such as ecological services, habitat conservation, and fish and aquatic conservation, and to eliminate funding for programs including cooperative landscape conservation and science support. The House and Senate versions of the bill would have increased funding for Resource Management, with little change for many programs relative to FY2018, and would have retained funding for cooperative landscape conservation and science support. Citing \"higher priorities,\" the Administration also proposed eliminating discretionary appropriations for two other FWS accounts\u2014the Cooperative Endangered Species Conservation Fund and the National Wildlife Refuge Fund. The House- and Senate-passed bills retained discretionary funding for these accounts. Further, the Administration proposed relatively large reductions from the FY2018 level for the Land Acquisition (89.1%) and Construction (79.3%) accounts. The House and Senate supported smaller reductions for both accounts. ", "The FY2019 enacted appropriation of $1.58 billion was $17.0 million (1.1%) less than the FY2018 appropriation. Like the House-passed and Senate-passed bills, the FY2019 appropriation increased funding for Resource Management, and retained funding for the cooperative landscape conservation and science support programs funded by this account. Similarly, the enacted appropriation included funding for the Cooperative Endangered Species Conservation Fund and the National Wildlife Refuge Fund. It also increased Land Acquisition, reduced Construction, and rescinded $15.0 million from Coastal Impact Assistance Program Grants. "], "subsections": []}, {"section_title": "Forest Service", "paragraphs": ["For FY2019, the Administration requested 21.5% less for the Forest Service (FS) than was enacted for FY2018 ($5.93 billion). Within the overall reduction, the President proposed decreases for each FS account, including 81.6% less for Capital Improvement and Maintenance, 47.7% less for State and Private Forestry, and 10.6% less for the National Forest System. The Administration also sought to eliminate funding for some programs, including Land Acquisition (from the Land and Water Conservation Fund), Collaborative Forest Landscape Restoration, and certain cooperative forestry programs such as Forest Legacy. For FY2019, the House and Senate bills would have provided overall increases for the FS of 3.3% and 6.1% respectively, with increases for some FS accounts and retention of programs the Administration sought to eliminate. The House and Senate supported differing levels of appropriations for major FS accounts, with the House approving higher amounts than the Senate for the National Forest System and Capital Improvement and Maintenance and the Senate approving higher amounts than the House for Land Acquisition and Wildland Fire Management, among other differences. ", "For FY2019, the FS enacted appropriation of $6.09 billion was $152.5 million (2.6%) higher than the FY2018 appropriation. It included higher funding than enacted for FY2018 for all major accounts except Capital Improvement and Maintenance (which decreased by 0.7%). For Wildland Fire Management, the FY2019 appropriation of $3.00 billion was 4.3% higher than the FY2018 appropriation, nearly the same as the House-passed level, and 7.0% less than the Senate-passed amount. The FS total FY2019 appropriation also included funding for programs the Administration had sought to eliminate, as noted above."], "subsections": []}, {"section_title": "Indian Affairs", "paragraphs": ["The Administration's FY2019 requested appropriation for Indian Affairs (IA) was 21.2% less than the FY2018 enacted amount ($3.06 billion). Most Indian programs would have been funded at lower levels, including human services, natural resources management, and public safety and justice. Education and construction (including construction of educational facilities) were among the largest dollar decreases in the budget request. The House- and Senate-passed measures contained overall increases of 1.3% and 0.4% respectively for IA, with relatively stable funding for many programs and activities as compared with FY2018 enacted amounts. ", "Enacted appropriations of $3.08 billion for FY2019 were a $17.5 million (0.6%) increase over FY2018 appropriations. For FY2019, most programs received relatively small dollar increases or stable funding as compared with FY2018. Changes relative to FY2018 included an increase of 1.5% for public safety and justice and of 2.3% for contract support costs, and a decrease of 9.7% for Indian Land and Water Claim Settlements and Miscellaneous Payments to Indians. The appropriation for education programs declined 1.1% from FY2018 to FY2019. This was primarily due to the inclusion of a one-time increase of $16.9 million for FY2018 for the Haskell Indian Nations University and the Southwestern Indian Polytechnic Institute, to convert these postsecondary institutions to forward funding to align with the school year funding cycle. "], "subsections": []}, {"section_title": "Indian Health Service", "paragraphs": ["Under the Administration's FY2019 request, the Indian Health Service (IHS) would have received 2.1% less than the FY2018 appropriation ($5.54 billion). The overall decrease was composed of a variety of program reductions and increases. For example, the Administration proposed cutting the Indian Health Facilities account (41.7%), including for maintenance and improvement of facilities and construction of both health care and sanitation facilities, and proposed no funding for programs including the Indian Health Care Improvement Fund, health education, and community health representatives. However, the Administration requested additional monies for clinical services including hospital and health clinics, mental health, and alcohol and substance abuse, and for contract support costs (to help tribes pay the costs of administering IHS-funded programs). The Administration also sought to fund the Special Diabetes Program for Indians through discretionary appropriations; currently the program has a direct appropriation. ", "The House and Senate bills would have approved increases of 6.7% and 4.2% respectively over FY2018 appropriations for IHS. Both chambers included higher funding for clinical services than enacted for FY2018 and requested by the Administration for FY2019, and both agreed with the Administration's proposed level for contract support costs. The House, but not the Senate, included appropriations for the Indian Health Care Improvement Fund and would have provided more than the FY2018 appropriation for the fund. Both chambers sought to retain funding for health education and community health representatives. Both chambers also supported level funding for most Indian Health Facilities programs but provided additional funds for facilities and environmental health support. Neither chamber sought to fund the Special Diabetes Program for Indians through discretionary appropriations. ", "The FY2019 enacted appropriation of $5.80 billion was an increase of $266.5 million (4.8%) for IHS over FY2018 appropriations. The total included level or increased funds for most programs and activities, for instance, with increases for clinical services and contract support costs. The enacted total included funding for programs the President sought to eliminate, including the Indian Health Care Improvement Fund, health education, and community health representatives. Similar to the House-passed and Senate-passed bills, the FY2019 enacted appropriation did not fund the Special Diabetes Program for Indians through discretionary appropriations, and provided level funding for most Indian Health Facilities programs except for facilities and environmental health support, which received an increase. "], "subsections": []}, {"section_title": "Land and Water Conservation Fund", "paragraphs": ["The Land and Water Conservation Fund (LWCF) has funded land acquisition for the four main federal land management agencies, a matching grant program to states to support outdoor recreation, and other purposes. For FY2019, the Administration did not seek discretionary appropriations for most programs that received appropriations from the LWCF in FY2018, and proposed an overall reduction of $12.9 million due to rescisssions of prior-year funds for some program components. In contrast, the House and Senate would have provided LWCF funding for the same programs as in FY2018, including land acquisition by the federal land management agencies. However, both the House and the Senate versions of the bill contained reductions from the FY2018 level ($425.0 million), of 15.2% and 3.8% respectively. In contrast, the FY2019 enacted appropriation of $435.0 million was a $10.0 million (2.4%) increase over FY2018."], "subsections": []}, {"section_title": "National Park Service", "paragraphs": ["For FY2019, the Administration requested 15.6% less for the National Park Service (NPS) than was enacted for FY2018 ($3.20 billion). Within the overall reduction, the President proposed cuts for each NPS account and many programs, including Construction, the Historic Preservation Fund, facility operations and maintenance, and heritage partnership programs. The President proposed the elimination of discretionary funding for other programs, including grants to states for outdoor recreation, line item acquisitions by the NPS, and the Centennial Challenge Program (a matching grant program to encourage donations). ", "The House and Senate would have approved overall increases of 1.9% and 0.5% respectively for the NPS for FY2019. Their bills sought to fund many accounts and programs at levels similar to those enacted for FY2018. However, both chambers included increases for some programs (e.g., facility operations and maintenance) and reductions for other programs (e.g., line-item acquisitions). In still other cases, the chambers differed as to the direction of the change, for instance, with the House supporting an increase for the Historic Preservation Fund and the Senate approving a decrease.", "For FY2019, the enacted appropriation was $3.22 billion, which was $20.5 million (0.6%) more than the FY2018 appropriation. The total reflected various increases for several accounts, namely the Operation of the National Park System, National Recreation and Preservation, Historic Preservation Fund, and Construction. However, FY2019 funds were lower than FY2018 appropriations for two other accounts: the Centennial Challenge, and Land Acquisition and State Assistance account, due to a decrease for land acquisition by the NPS. "], "subsections": []}, {"section_title": "Payments in Lieu of Taxes", "paragraphs": ["The Payments in Lieu of Taxes Program (PILT) would have been reduced from the FY2018 level ($553.2 million) under the President's request ($465.0 million, a 15.9% reduction). For FY2019, the House-passed bill and the Senate-passed bill both contained $500.0 million, a reduction of 9.6% from the FY2018 amount. In earlier action, the Senate Appropriations Committee had reported that $500.0 million was the estimate of full funding for PILT for FY2019. PILT compensates counties and local governments for nontaxable lands within their jurisdictions. The authorized level for the program is calculated under a formula that considers various factors and varies from year to year. The authorized payment is currently subject to annual appropriations. ", "The FY2019 appropriation for PILT was $500.0 million, a decrease of $53.2 million (9.6%) from the FY2018 level. As noted, this was the level that had been approved in the House-passed and Senate-passed bills. "], "subsections": []}, {"section_title": "Smithsonian Institution", "paragraphs": ["For FY2019, the Smithsonian Institution (SI) would have received a decrease (8.2%) under the Administration's request, an increase (1.2%) under the House-passed bill, and essentially level funding under the Senate-passed bill as compared with the FY2018 appropriation ($1.04 billion). However, the Administration, House, and Senate all supported funding at or near the FY2018 level for most SI museums, research institutes, and other programs. A key difference was in funding for the Facilities Capital account, which includes revitalization, planning and design, and construction of facilities. The Administration requested a 29.6% decrease for this account, the Senate approved a smaller decrease of 2.7%, and the House approved an increase of 1.8%. In addition, the Administration, House, and Senate all supported an increase of 2.2% over the FY2018 level for Facilities Services, which encompasses maintenance, operation, security, and support of facilities. ", "For FY2019, the enacted appropriation of $1.04 billion was essentially level with the FY2018 appropriation. The FY2019 total included funding at or near the FY2018 level for most SI museums, research institutes, and other programs. An exception was an increase of 2.2% over the FY2018 level for Facilities Services, as had been recommended by the President and approved by the House and Senate. Another exception was the Facilities Capital account, which received a 2.7% overall decrease; this comprised reduced funding for planning and design, the elimination of construction monies, and additional funds for revitalization. "], "subsections": []}, {"section_title": "U.S. Geological Survey", "paragraphs": ["Relative to FY2018 appropriations ($1.15 billion), the U.S. Geological Survey (USGS) would have received a decrease (25.1%) under the Administration's request, an increase (2.1%) under the House-passed bill, and level funding under the Senate-passed bill. The request proposed reduced funding for all eight major USGS program areas, including ecosystems, land resources, natural hazards, and water resources. The request also would have cut most subprograms, although in a few cases it contained additional funds (e.g., for mineral and energy resources). In contrast, both chambers would have maintained level funding or would have increased appropriations for all USGS program areas except natural hazards, which would have declined by 4.8% in the House-passed bill and by 12.0% in the Senate-passed bill. ", "For FY2019, USGS received an appropriation of $1.16 billion, an increase of $12.1 million (1.1%) over FY2018. Of the eight major USGS program areas, five received increases, two received decreases, and one received level funding. The largest dollar and percentage increase was for energy, minerals, and environmental health, which gained $8.9 million (8.7%), primarily for mineral resources. The largest dollar and percentage decrease was for natural hazards, which was cut by $12.4 million (6.9%) for the volcano hazards subprogram. "], "subsections": []}, {"section_title": "Wildland Fire Management55", "paragraphs": ["For FY2019, the Administration proposed $3.79 billion in discretionary appropriations for Wildland Fire Management (WFM) of DOI and the FS, a 12.9% decrease from the FY2018 enacted level ($4.35 billion). However, the President also sought a $1.52 billion cap adjustment to the discretionary spending limits in law, so that funding for certain wildland fire suppression activities would not be subject to the limits. Including those funds, the total FY2019 request was $5.31 billion. This would be an increase of 22.0% over the FY2018 appropriation. The House and Senate bills contained increases of 3.1% and 12.0% respectively over the FY2018 appropriation. Neither chamber's FY2019 bill included a discretionary cap adjustment for wildland fire suppression for FY2019. However, a cap adjustment was enacted as part of the Consolidated Appropriations Act, 2018, and is scheduled to go into effect in FY2020. Further, the Administration, House, and Senate did not support appropriations for FY2019 for the FS or DOI FLAME accounts. The FLAME account received $342.0 million in emergency supplemental appropriations in FY2018.", "For FY2019, the total appropriation for Wildland Fire Management for DOI and FS was $4.48 billion; this was $124.8 million (2.9%) more than the FY2018 appropriation. The increase over FY2018 was primarily for the FS, for suppression operations. The total appropriation consisted of $941.2 million for DOI and $3.54 for FS. The FY2019 appropriations law did not include a discretionary cap adjustment for wildland fire suppression for FY2019, as sought by the President, or funding for the DOI or FS FLAME accounts. "], "subsections": []}]}]}]}}
{"id": "RL32418", "title": "Navy Virginia (SSN-774) Class Attack Submarine Procurement: Background and Issues for Congress", "released_date": "2019-05-17T00:00:00", "summary": ["The Navy has been procuring Virginia (SSN-774) class nuclear-powered attack submarines (SSNs) since FY1998. The three Virginia-class boats that the Navy has requested for procurement in FY2020 would be the 31st, 32nd, and 33rd boats in the class. Virginia-class submarines are being procured under a multiyear procurement (MYP) contract covering at least 10 boats to be procured in FY2019-FY2023.", "Navy plans previously called for procuring two Virginia-class boats in FY2020. The third boat requested for FY2020 was added to the budget request as part of the FY2020 budget-planning cycle. The Navy states that since this third boat has not received any prior-year advance procurement (AP) funding, it would execute (i.e., be constructed) on a schedule similar to that of a boat procured in FY2023.", "The Navy plans to build the second of the two boats procured in FY2019, the second and third boats requested for procurement in FY2020, the second of the two boats planned for procurement in FY2021, and all subsequent Virginia-class boats with the Virginia Payload Module (VPM), an additional, 84-foot-long, mid-body section equipped with four large-diameter, vertical launch tubes for storing and launching additional Tomahawk missiles or other payloads. The Navy's FY2020 budget submission shows that Virginia-class boats with and without the VPM have estimated recurring unit procurement costs of roughly $3.2 billion and $2.8 billion, respectively.", "The Navy estimates the combined procurement cost of the three Virginia-class boats requested for procurement in FY2020 at $9.274.4 (i.e., about $9.3 billion). The boats have received $1,756.9 million in prior-year \"regular\" advance procurement (AP) funding and $361.6 million in additional Economic Order Quantity (EOQ) AP funding for components of boats being procured under the FY2019-FY2023 MYP contract. The Navy's proposed FY2020 budget requests the remaining $7,155.9 million in procurement funding needed to complete the boats' estimated combined procurement cost, as well as $1,887.6 million in \"regular\" AP funding for Virginia-class boats to be procured in future fiscal years and $882.0 million in additional EOQ AP funding for components of boats to be procured under the FY2019-FY2023 MYP contract, bringing the total amount of procurement and AP funding requested for the program in FY2020 to $9,925.5 million (i.e., about $9.9 billion), excluding outfitting and post-delivery costs.", "The Navy's SSN force included 51 boats at the end of FY2018. The Navy's force-level goal for SSNs is to achieve and maintain a force of 66 boats. From the mid-2020s through the early 2030s, the number of SSNs is projected to experience a valley or trough, reaching a minimum of 42 boats in FY2027-FY2028. Some observers are concerned that this projected valley\u2014a consequence of having procured a relatively small number of SSNs during the 1990s, in the early years of the post-Cold War era\u2014could lead to a period of heightened operational strain for the SSN force, and perhaps a period of weakened conventional deterrence against potential adversaries such as China. The projected SSN valley was first identified by CRS in 1995 and has been discussed in CRS reports and testimony every year since then. The Navy's 30-year shipbuilding plan projects that, after reaching its projected 42-boat minimum, the SSN force will increase to 66 boats by FY2048.", "Issues for Congress regarding the Virginia-class program include whether to approve, reject, or modify the Navy's FY2020 procurement and advance procurement (AP) funding requests for the Virginia-class program; the funding profile for the third Virginia-class boat requested for procurement in FY2020; the potential industrial-base challenges of building both Columbia-class boats and Virginia-class attack submarines (SSNs) at the same time; and technical risk in the design for the Block V version of the Virginia-class program."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides background information and issues for Congress on the Virginia-class nuclear-powered attack submarine (SSN) program. The Navy's proposed FY2020 budget requests $9,925.5 million (i.e., about $9.9 billion) in procurement and advance procurement (AP) funding for the program. Decisions that Congress makes on procurement of Virginia-class boats could substantially affect U.S. Navy capabilities and funding requirements, and the U.S. shipbuilding industrial base.", "The Navy's Columbia (SSBN-826) class ballistic missile submarine program is discussed in another CRS report\u2014CRS Report R41129, Navy Columbia (SSBN-826) Class Ballistic Missile Submarine Program: Background and Issues for Congress , by Ronald O'Rourke.", "For an overview of the strategic and budgetary context in which the Virginia-class program and other Navy shipbuilding programs may be considered, see CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress , by Ronald O'Rourke."], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "U.S. Navy Submarines1", "paragraphs": ["The U.S. Navy operates three types of submarines\u2014nuclear-powered ballistic missile submarines (SSBNs), nuclear-powered cruise missile and special operations forces (SOF) submarines (SSGNs), and nuclear-powered attack submarines (SSNs). The SSNs are general-purpose submarines that can (when appropriately equipped and armed) perform a variety of peacetime and wartime missions, including the following:", "covert intelligence, surveillance, and reconnaissance (ISR), much of it done for national-level (as opposed to purely Navy) purposes; covert insertion and recovery of SOF (on a smaller scale than possible with the SSGNs); covert strikes against land targets with the Tomahawk cruise missiles (again on a smaller scale than possible with the SSGNs); covert offensive and defensive mine warfare; anti-submarine warfare (ASW); and anti-surface ship warfare.", "During the Cold War, ASW against Soviet submarines was the primary stated mission of U.S. SSNs, although covert ISR and covert SOF insertion/recovery operations were reportedly important on a day-to-day basis as well. In the post-Cold War era, although anti-submarine warfare remained a mission, the SSN force focused more on performing the other missions noted on the list above. Due to the shift in the strategic environment in recent years from the post-Cold War era to a new situation featuring renewed great power competition, ASW against Russian and Chinese submarines has once again become a more prominent mission for U.S. Navy SSNs."], "subsections": []}, {"section_title": "U.S. Attack Submarine Force Levels", "paragraphs": [], "subsections": [{"section_title": "Force-Level Goal", "paragraphs": ["The Navy's force-level goal, released in December 2016, is to achieve and maintain a 355-ship fleet, including 66 SSNs. For a review of SSN force-level goals since the Reagan Administration, see Appendix A ."], "subsections": []}, {"section_title": "Force Level at End of FY2018", "paragraphs": ["The SSN force included more than 90 boats during most of the 1980s, when plans called for achieving a 600-ship Navy including 100 SSNs. The number of SSNs peaked at 98 boats at the end of FY1987 and declined after that in a manner that roughly paralleled the decline in the total size of the Navy over the same time period. The 51 SSNs in service at the end of FY2018 included the following:", "31 Los Angeles (SSN-688) class boats; 3 Seawolf (SSN-21) class boats; and 17 Virginia (SSN-774) class boats."], "subsections": []}]}, {"section_title": "Los Angeles- and Seawolf-Class Boats", "paragraphs": ["A total of 62 Los Angeles-class submarines, commonly called 688s, were procured between FY1970 and FY1990 and entered service between 1976 and 1996. They are equipped with four 21-inch diameter torpedo tubes and can carry a total of 26 torpedoes or Tomahawk cruise missiles in their torpedo tubes and internal magazines. The final 31 boats in the class (SSN-719 and higher) were built with an additional 12 vertical launch system (VLS) tubes in their bows for carrying and launching another 12 Tomahawk cruise missiles. The final 23 boats in the class (SSN-751 and higher) incorporate further improvements and are referred to as Improved Los Angeles class boats or 688Is. As of the end of FY2018, 31 of the 62 boats in the class had been retired.", "The Seawolf class was originally intended to include about 30 boats, but Seawolf-class procurement was stopped after three boats as a result of the end of the Cold War and associated changes in military requirements and defense spending levels. The three Seawolf-class submarines are the Seawolf (SSN-21), the Connecticut (SSN-22), and the Jimmy Carter (SSN-23). SSN-21 and SSN-22 were procured in FY1989 and FY1991 and entered service in 1997 and 1998, respectively. SSN-23 was originally procured in FY1992. Its procurement was suspended in 1992 and then reinstated in FY1996. It entered service in 2005. Seawolf-class submarines are larger than Los Angeles-class boats or previous U.S. Navy SSNs. They are equipped with eight 30-inch-diameter torpedo tubes and can carry a total of 50 torpedoes or cruise missiles. SSN-23 was built to a lengthened configuration compared to the other two ships in the class."], "subsections": []}, {"section_title": "Virginia (SSN-774) Class Program", "paragraphs": [], "subsections": [{"section_title": "General", "paragraphs": ["The Virginia-class attack submarine (see Figure 1 ) was designed to be less expensive and better optimized for post-Cold War submarine missions than the Seawolf-class design. The Virginia-class design is slightly larger than the Los Angeles-class design, but incorporates newer technologies. Virginia-class boats procured in recent years cost roughly $2.8 billion each to procure, but Virginia-class boats to be procured in coming years will be built to a lengthened configuration that includes the Virginia Payload Module (see discussion below) and have an estimated unit procurement cost of roughly $3.2 billion. The first Virginia-class boat entered service in October 2004."], "subsections": []}, {"section_title": "Annual Procurement Quantities", "paragraphs": [" Table 1 shows annual numbers of Virginia-class boats procured from FY1998 (the lead boat) through FY2019, the number requested for procurement in FY2020, and the numbers projected for procurement in FY2021-FY2024 under the FY2020-FY2024 Future Years Defense Plan (FYDP)."], "subsections": []}, {"section_title": "Three Boats (Rather Than Two) Requested for FY2020", "paragraphs": ["Navy plans previously called for procuring two Virginia-class boats in FY2020. The third boat requested for FY2020 was added to the budget request as part of the FY2020 budget-planning cycle. The Navy states that since this third boat has not received any prior-year advance procurement (AP) funding, it would execute (i.e., be constructed) on a schedule similar to that of a boat procured in FY2023."], "subsections": []}, {"section_title": "Multiyear Procurement (MYP)", "paragraphs": ["The Virginia-class submarines shown in Table 1 for FY2019-FY2023, which are referred to as the Block V boats, are being procured under a multiyear procurement (MYP) contract covering those years. This is the fourth consecutive MYP contract used by the Virginia-class program\u2014three earlier MYP contracts were used to procure the 10 Virginia-class boats shown in the table for the period FY2014-FY2018 (the Block IV boats), the 8 Virginia-class boats shown in the table for the period FY2009-FY2013 (the Block III boats), and the 5 Virginia-class boats shown in the table for the period FY2004-FY2008 (the Block II boats). The four boats shown in the table for the period FY1998-FY2002 (the Block I boats) were procured under a block buy contract, which is an arrangement somewhat similar to an MYP contract. The boat procured in FY2003 fell between the FY1998-FY2002 block buy contract and the FY2004-FY2008 MYP contract, and was contracted for separately."], "subsections": []}, {"section_title": "Joint Production Arrangement", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["Virginia-class boats are built jointly by General Dynamics' Electric Boat Division (GD/EB) of Groton, CT, and Quonset Point, RI, and Huntington Ingalls Industries' Newport News Shipbuilding (HII/NNS), of Newport News, VA. The arrangement for jointly building Virginia-class boats was proposed to Congress by GD/EB, HII/NNS, and the Navy, and agreed to by Congress in 1997, as part of Congress's action on the Navy's budget for FY1998, the year that the first Virginia-class boat was procured. A primary aim of the arrangement is to minimize the cost of building Virginia-class boats at a relatively low annual rate in two shipyards (rather than entirely in a single shipyard) while preserving key submarine-construction skills at both shipyards.", "Under the arrangement, GD/EB builds certain parts of each boat, HII/NNS builds certain other parts of each boat, and the yards have taken turns building the reactor compartments and performing final assembly of the boats. The arrangement has resulted in a roughly 50-50 division of Virginia-class profits between the two yards and preserves both yards' ability to build submarine reactor compartments (a key capability for a submarine-construction yard) and perform submarine final-assembly work."], "subsections": []}, {"section_title": "Navy's Proposed Submarine Unified Build Strategy (SUBS)", "paragraphs": ["Under a plan it calls the Submarine Unified Build Strategy (SUBS), the Navy plans to build Columbia-class ballistic missile submarines jointly at GD/EB and HII/NNS, with most of the work going to GD/EB. As part of this plan, the Navy plans to adjust the division of work on the Virginia-class attack submarine program so that HII/NNS would receive a larger share of the work for that program than it has received in the past."], "subsections": []}]}, {"section_title": "Cost-Reduction Effort", "paragraphs": ["The Navy states that it achieved a goal of reducing the procurement cost of Virginia-class submarines so that two boats could be procured in FY2012 for a combined cost of $4.0 billion in constant FY2005 dollars\u2014a goal referred to as \"2 for 4 in 12.\" Achieving this goal involved removing about $400 million (in constant FY2005 dollars) from the cost of each submarine. (The Navy calculated that the unit target cost of $2.0 billion in constant FY2005 dollars for each submarine translated into about $2.6 billion for a boat procured in FY2012.)"], "subsections": []}, {"section_title": "Schedule and Cost Performance on Deliveries", "paragraphs": [], "subsections": [{"section_title": "Earlier Record", "paragraphs": ["As noted in CRS testimony in 2014, the Virginia (SSN-774) class attack program has been cited as an example of a successful acquisition program. The program received a David Packard Excellence in Acquisition Award from the Department of Defense (DOD) in 2008. Although the program experienced cost growth in its early years that was due in part to annual procurement rates that were lower than initially envisaged and challenges in restarting submarine production at Newport News Shipbuilding, the lead ship in the program was delivered within four months of the target date that had been established about a decade earlier, and until recently, ships had been delivered largely on cost and ahead of schedule."], "subsections": []}, {"section_title": "More-Recent Reported Delays Relative to Targeted Delivery Dates", "paragraphs": ["In March and April 2019, it was reported that GD/EB, HII/NNS, and their supplier firms were experiencing challenges in meeting scheduled delivery times as the Virginia-class program transitions over time from production of two \"regular\" Virginia-class boats per year to two VPM-equipped boats per year. As a result of these challenges, it was reported, the program has experienced months-long delays in efforts to build boats relative to their targeted delivery dates."], "subsections": []}]}, {"section_title": "Virginia Payload Module (VPM)", "paragraphs": ["The Navy plans to build the second of the two boats procured in FY2019, the second and third boats requested for procurement in FY2020, the second of the two boats planned for procurement in FY2021, and all subsequent Virginia-class boats with the Virginia Payload Module (VPM), an additional, 84-foot-long, mid-body section equipped with four large-diameter, vertical launch tubes for storing and launching additional Tomahawk missiles or other payloads.", "The VPM's vertical launch tubes are to be used to store and fire additional Tomahawk cruise missiles or other payloads, such as large-diameter unmanned underwater vehicles (UUVs). The four additional launch tubes in the VPM could carry a total of 28 additional Tomahawk cruise missiles (7 per tube), which would increase the total number of torpedo-sized weapons (such as Tomahawks) carried by the Virginia class design from about 37 to about 65\u2014an increase of about 76%.", "Building Virginia-class boats with the VPM is intended to compensate for a sharp loss in submarine force weapon-carrying capacity that will occur with the retirement in FY2026-FY2028 of the Navy's four Ohio-class cruise missile/special operations forces support submarines (SSGNs). Each SSGN is equipped with 24 large-diameter vertical launch tubes, of which 22 can be used to carry up to 7 Tomahawks each, for a maximum of 154 vertically launched Tomahawks per boat, or 616 vertically launched Tomahawks for the four boats. Twenty-two Virginia-class boats built with VPMs could carry 616 Tomahawks in their VPMs.", "The Navy's FY2020 budget submission shows that Virginia-class boats with and without the VPM have estimated recurring unit procurement costs of roughly $3.2 billion and $2.8 billion, respectively.", "The joint explanatory statement for the FY2014 DOD Appropriations Act (Division C of H.R. 3547 / P.L. 113-76 of January 17, 2014) required the Navy to submit biannual reports to the congressional defense committees describing the actions the Navy is taking to minimize costs for the VPM."], "subsections": []}, {"section_title": "Acoustic and Other Improvements", "paragraphs": ["In addition to the VPM, the Navy is introducing acoustic and other improvements to the Virginia-class design that are intended to help maintain the design's superiority over Russian and Chinese submarines."], "subsections": []}, {"section_title": "FY2020 Funding Request", "paragraphs": ["The Navy estimates the combined procurement cost of the three Virginia-class boats requested for procurement in FY2020 at $9.274.4 (i.e., about $9.3 billion). The boats have received $1,756.9 million in prior-year \"regular\" advance procurement (AP) funding and $361.6 million in additional Economic Order Quantity (EOQ) AP funding for components of boats being procured under the FY2019-FY2023 MYP contract. The Navy's proposed FY2020 budget requests the remaining $7,155.9 million in procurement funding needed to complete the boats' estimated combined procurement cost, as well as $1,887.6 million in \"regular\" AP funding for Virginia-class boats to be procured in future fiscal years and $882.0 million in additional EOQ AP funding for components of boats to be procured under the FY2019-FY2023 MYP contract, bringing the total amount of procurement and AP funding requested for the program in FY2020 to $9,925.5 million (i.e., about $9.9 billion), excluding outfitting and post-delivery costs."], "subsections": []}]}, {"section_title": "Submarine Construction Industrial Base", "paragraphs": ["U.S. Navy submarines are built by GD/EB and HII/NNS. These are the only two shipyards in the country capable of building nuclear-powered ships. GD/EB builds submarines only, while HII/NNS also builds nuclear-powered aircraft carriers and is capable of building other types of surface ships.", "In addition to GD/EB and HII/NNS, the submarine construction industrial base includes hundreds of supplier firms, as well as laboratories and research facilities, in numerous states. Much of the total material procured from supplier firms for the construction of submarines comes from sole-source suppliers. For nuclear-propulsion component suppliers, an additional source of stabilizing work is the Navy's nuclear-powered aircraft carrier construction program. In terms of work provided to these firms, a carrier nuclear propulsion plant is roughly equivalent to five submarine propulsion plants. Much of the design and engineering portion of the submarine construction industrial base is resident at GD/EB; smaller portions are resident at HII/NNS and some of the component makers. "], "subsections": []}, {"section_title": "Projected SSN Force Levels", "paragraphs": [" Table 2 shows the Navy's projection of the number of SSNs over time if the Navy's FY2020 30-year shipbuilding plan were fully implemented. As can be seen in the table, the FY2020 30-year shipbuilding plan would achieve the Navy's 66-boat SSN force-level goal by FY2048.", "As also shown in the table, the number of SSNs is projected to experience (relative to a previous Navy SSN force-level goal of 48 boats) a valley or trough from the mid-2020s through the early 2030s, reaching a minimum of 42 boats (i.e., 24 boats, or about 36%, less than the current 66-boat force-level goal) in FY2027-FY2028. This projected valley is a consequence of having procured a relatively small number of SSNs during the 1990s, in the early years of the post-Cold War era. Some observers are concerned that this projected valley in SSN force levels could lead to a period of heightened operational strain for the SSN force, and perhaps also a period of weakened conventional deterrence against potential adversaries such as China. The projected SSN valley was first identified by CRS in 1995 and has been discussed in CRS reports and testimony every year since then. As one measure for mitigating this valley, the Navy's FY2020 budget submission proposes to refuel and extend the service life of two older Los Angeles (SSN-688) class submarines. The Navy states that this could be followed by refuelings and service life extensions for up to five more Los Angeles-class SSNs that would be funded in fiscal years beyond the FY2020-FY2024 Future Year Defense Plan (FYDP)."], "subsections": []}, {"section_title": "SSN Deployments Delayed Due to Maintenance Backlogs", "paragraphs": ["In recent years, a number of the Navy's SSNs have had their deployments delayed due to maintenance backlogs at the Navy's four government-operated shipyards, which are the primary facilities for conducting depot-level maintenance work on Navy SSNs. Delays in deploying SSNs can put added operational pressure on other SSNs that are available for deployment. A November 2018 Government Accountability Office (GAO) report on the issue stated:", "The Navy has been unable to begin or complete the vast majority of its attack submarine maintenance periods on time resulting in significant maintenance delays and operating and support cost expenditures. GAO's analysis of Navy maintenance data shows that between fiscal year 2008 and 2018, attack submarines have incurred 10,363 days of idle time and maintenance delays as a result of delays in getting into and out of the shipyards. For example, the Navy originally scheduled the USS Boise to enter a shipyard for an extended maintenance period in 2013 but, due to heavy shipyard workload, the Navy delayed the start of the maintenance period. In June 2016, the USS Boise could no longer conduct normal operations and the boat has remained idle, pierside for over two years since then waiting to enter a shipyard\u2026. GAO estimated that since fiscal year 2008 the Navy has spent more than $1.5 billion in fiscal year 2018 constant dollars to support attack submarines that provide no operational capability\u2014those sitting idle while waiting to enter the shipyards, and those delayed in completing their maintenance at the shipyards.", "The Navy has started to address challenges related to workforce shortages and facilities needs at the public shipyards. However, it has not effectively allocated maintenance periods among public shipyards and private shipyards that may also be available to help minimize attack submarine idle time. GAO's analysis found that while the public shipyards have operated above capacity for the past several years, attack submarine maintenance delays are getting longer and idle time is increasing. The Navy may have options to mitigate this idle time and maintenance delays by leveraging private shipyard capacity for repair work. But the Navy has not completed a comprehensive business case analysis as recommended by Department of Defense guidelines to inform maintenance workload allocation across public and private shipyards. Navy leadership has acknowledged that they need to be more proactive in leveraging potential private shipyard repair capacity. Without addressing this challenge, the Navy risks continued expenditure of operating and support funding to crew, maintain, and support attack submarines that provide no operational capability because they are delayed in getting into and out of maintenance.", "The House Appropriations Committee, in its report ( H.Rept. 115-769 of June 20, 2018) on the FY2019 DOD Appropriations Act ( H.R. 6157 ) stated:", "SUBMARINE MAINTENANCE SHORTFALLS", "The Committee recognizes that the nuclear-capable public naval shipyards are backlogged with submarine maintenance work, while private nuclear-capable shipyards have underutilized capacity. The Los Angeles (SSN\u2013688) class submarines are especially impacted by this backlog, which significantly reduces their operational availability for missions in support of combatant commanders. The Committee directs the Secretary of the Navy to submit a report to the congressional defense committees not later than 90 days after the enactment of this Act that outlines a comprehensive, five-year submarine maintenance plan that restores submarine operational availability and fully utilizes both public and private nuclear-capable shipyards in accordance with all applicable laws. The plan should strive to provide both private and public shipyards with predictable frequency of maintenance availabilities and estimate any potential cost savings that distributing the workload may deliver. (Page 71)", "A March 2019 Navy report to Congress states that in response to the above committee report language,", "The Navy submitted an initial [submarine maintenance] plan in December 2018, that reflected FY 2019 budget information. The Navy has [now] updated this plan to incorporate data from the President's FY 2020 budget submitted on March 11, 2019\u2026.", "\u2026 In the post-Cold War and post 9/11 era, there have been decades of decision making associated with the re-posturing of defense strategies, such as: the reduction in maintenance capacity and flexibility though Baes Realignment and Closures (BRAC), increased Operational Tempo (OPTEMPO), evolution of submarine life cycle maintenance plans, budget reductions, and budget uncertainties that have contributed to the current challenges facing the submarine fleet.", "The root cause of submarine idle time and associated loss of operational availability, as discussed in the recent Government Accountability Office (GAO) report 19-229, \"Actions Needed to Address Costly Maintenance Delays Facing the Attack Submarine Fleet\" (issued November 2018), is largely due to public shipyard capacity not keeping pace with growing maintenance requirements that have been building for a number of years prior to the USS BOISE (SSN 764) FY 2016 Engineered Overhaul (EOH). The workload to capacity mismatch resulted in lower priority attack submarine (SSN) availabilities (as compared to ballistic missile submarines and nuclear-powered aircraft carriers) being delivered late and a bow-waving of workload from one fiscal year to the next that could not be executed. The workload backlog exacerbated the public shipyard workload-to-capacity mismatch and contributed to an increasing trend in late SSN [maintenance] deliveries.", "The Navy has taken several actions to improve the workload-to-capacity balance at the public shipyards. Notably, over 20,600 workers were hired from FY 2013 through FY 2018, which after accounting for attrition, increased total end strength from 29,400 to 36,700. However, the accelerated hiring resulted in 56 percent of the production workforce having less than five years of experience. The less experienced workforce requires a greater investment in training, as described in the Navy's Report to Congress on the Naval Shipyard Development Plan (issued March 2018), which offers some near term productivity gains. The Navy has also taken additional actions to balance workload at our public shipyards by outsourcing four submarine maintenance availabilities to the private sector and plans to outsource another two submarine availabilities to the private shipyards starting in FY 2020 and FY 2021. Additionally, to ensure on-time delivery from maintenance availabilities, availability inductions have been rescheduled to occur when the shipyards have the capacity to accomplish the availability(s) within programmed schedule durations. This necessary action to improve the on-time delivery of current maintenance availabilities has resulted in some additional submarine maintenance backlog and some accumulation of idle time. Based on actions and initiatives the Navy is currently pursuing to improve submarine operational availability and the outsourcing of two additional submarine availabilities to the private sector, the Navy assesses that the submarine idle time will be eliminated by the end of FY 2023 and the submarine maintenance backlog will be worked off by the end of FY 2023."], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "FY2020 Funding", "paragraphs": ["One issue for Congress is whether to approve, reject, or modify the Navy's FY2020 procurement and advance procurement (AP) funding requests for the Virginia-class program. In considering this issue, Congress may consider several factors, including the amount of work the Navy is proposing to fund for the program in FY2020 and whether the Navy has accurately priced the work it is proposing to do in FY2020. Another element of this issue concerns the funding profile for the third Virginia-class boat requested for procurement in FY2020. This issue is discussed separately in the next section."], "subsections": []}, {"section_title": "Funding Profile for Third Virginia-Class Boast Requested for FY2020", "paragraphs": ["Another issue for Congress concerns the funding profile for the third Virginia-class boat that the Navy has requested for procurement in FY2020. As discussed earlier, Navy plans previously called for procuring two Virginia-class boats in FY2020. The third boat requested for FY2020 was added to the budget request as part of the FY2020 budget-planning cycle. The Navy states that since this third boat has not received any prior-year advance procurement (AP) funding, it would execute (i.e., be constructed) on a schedule similar to that of a boat procured in FY2023.", "The Navy is proposing to fully fund the procurement of the third boat in FY2020. As discussed in Appendix B , Congress in the past has fully funded the procurement of nuclear-powered ships (specifically, aircraft carriers) for which no prior-year AP funding had been provided. Given the anticipated schedule for executing a third Virginia-class boat procured in FY2020, one alternative funding profile for this boat would be to provide AP funding for the boat in FY2020-FY2022, followed by full funding (i.e., the remainder of the boat's procurement cost, in the form of regular procurement funding) for the boat in FY2023 (or perhaps AP funding in FY2020-FY2021, followed by full funding in FY2022).", "Supporters of providing only AP funding for the boat in FY2020 could argue that it would reduce FY2020 funding requirements for the Virginia-class program, which could make more FY2020 funding available for other programs, such as, for example, the LPD-17 Flight II amphibious ship program, the LHA-9 amphibious assault ship program, the Expeditionary Support Base (ESB) ship program, the Littoral Combat Ship (LCS) program, Navy aircraft or weapon acquisition programs, Navy maintenance and readiness initiatives, or other DOD programs.", "Supporters of fully funding a third Virginia-class boat in FY2020 could argue that it would reduce FY2021-FY2023 funding requirements for the Virginia-class program, which could make available more funding in those years for other programs, including most of those mentioned above, as well as the Virginia-class program itself (where it could, for example, support the procurement of a third Virginia-class boat in FY2022 and/or a third Virginia-class boat in FY2023). They could also argue that fully funding the procurement of a third Virginia-class boat in FY2020 would send a signal of resolve to potential adversaries such as China, particularly since it would make FY2020 the first year since FY1989 in which three SSNs were procured in a single year."], "subsections": []}, {"section_title": "Industrial-Base Challenges of Building Both Columbia- and Virginia-Class Boats", "paragraphs": ["Another potential issue for Congress concerns the potential industrial-base challenges of building both Columbia-class boats and Virginia-class attack submarines (SSNs) at the same time. Along with continued production of Virginia-class SSNs, the Navy in FY2021 is to also begin building Columbia-class ballistic missile submarines (SSBNs). Observers have expressed concern about the industrial base's capacity for building both Virginia- and Columbia-class boats without encountering bottlenecks or other production problems in one or both of these programs. Concerns about the ability of the submarine construction industrial base to execute an eventual procurement rate of two VPM-equipped Virginia-class boats and one Columbia-class boat per year have been heightened by recent reports of challenges faced by the two submarine-construction shipyards (GD/EB and HII/NNS), as well as submarine component supplier firms in meeting scheduled delivery times for Virginia-class boats as the Virginia-class program transitions over time from production of two \"regular\" Virginia-class boats per year to two VPM-equipped boats per year."], "subsections": []}, {"section_title": "Technical Risk in Virginia-Class Block V Design", "paragraphs": ["Another potential issue for Congress concerns technical risk in the design for the Block V version of the Virginia-class program\u2014the version being procured in FY2019-2023. A May 2019 GAO report\u2014the 2019 edition of GAO's annual report surveying DOD major acquisition programs\u2014stated the following regarding the Block V version of the Virginia-class design:", "Current Status", "In 2019, the Navy plans to award a multibillion dollar, multiyear contract for construction of 10 Block V submarines. Under the Navy's plan, all Block V ships will include acoustic superiority improvements, while the VPM will be added starting with the second Block V submarine.", "According to program officials, the design of Block V submarines will differ from Block IV by approximately 20 percent. Of this 20 percent, the program office considers 70 percent to constitute major changes. The program office plans to complete basic and functional designs for VPM by construction start\u2014an approach consistent with best practices. However, the shipbuilder is currently behind schedule in completing detail design work, where (1) the design advances to the highest level of fidelity, (2) specific fabrication and installation instructions for the shipyard are developed, and (3) required production materials are identified. The program now plans to complete 76 percent of this work by construction start, compared to the 86 percent it initially planned, in part due to the shipbuilder's challenges in using a new design tool. Going forward, the Navy and shipbuilder will need to balance staffing levels for the remaining Block V design work with design efforts for the new Columbia class ballistic missile submarine. Construction of Block V and the Columbia class will coincide beginning in fiscal year 2021.This will require the Navy and its shipbuilder to manage staffing demands and other resources across both programs. In addition, program officials said vendor quality issues with welding on VPM have caused a 3.5-month delay in the schedule for the payload tubes for the first two submarines with VPM. The Navy plans to recover some time by accelerating tube manufacturing with a second vendor, but this approach may increase program costs.", "The Block V effort is subsumed under the SSN 774 major defense acquisition program, and is not managed as a separate program. In 2015, the Office of the Secretary of Defense shifted the program's oversight to the Navy. SSN 774 had already completed its required defense acquisition system milestone reviews before Block V started, but program officials said the Navy continues to conduct regular oversight of the Block V.", "Program Office Comments", "In commenting on a draft of this assessment, the program office provided technical comments, which we incorporated where appropriate."], "subsections": []}, {"section_title": "Additional Issues", "paragraphs": [], "subsections": [{"section_title": "Issues Raised in January 2018 DOT&E Report", "paragraphs": ["Another oversight issue for Congress concerns Virginia-class program issues raised in a January 2018 report from DOD's Director, Operational Test and Evaluation (DOT&E)\u2014DOT&E's annual report for FY2017."], "subsections": []}, {"section_title": "Problem with Hull Coating Reported in 2017", "paragraphs": ["Another issue for Congress concerns a problem with the hull coating used on Virginia-class boats that was reported in 2017."], "subsections": []}, {"section_title": "Defective Parts Reported in 2016", "paragraphs": ["Another issue for Congress concerns three Virginia-class boats that were reported in 2016 to have been built with defective parts, and the operational and cost implications of this situation."], "subsections": []}]}]}, {"section_title": "Legislative Activity for FY2020", "paragraphs": [], "subsections": [{"section_title": "Congressional Action on FY2020 Funding Request", "paragraphs": [" Table 3 summarizes congressional action on the Navy's FY2020 funding request for the Virginia-class program.", "Appendix A. Past SSN Force-Level Goals", "This appendix summarizes attack submarine force-level goals since the Reagan Administration (1981-1989).", "The Reagan-era plan for a 600-ship Navy included an objective of achieving and maintaining a force of 100 SSNs.", "The George H. W. Bush Administration's proposed Base Force plan of 1991-1992 originally called for a Navy of more than 400 ships, including 80 SSNs. In 1992, however, the SSN goal was reduced to about 55 boats as a result of a 1992 Joint Staff force-level requirement study (updated in 1993) that called for a force of 51 to 67 SSNs, including 10 to 12 with Seawolf-level acoustic quieting, by the year 2012.", "The Clinton Administration, as part of its 1993 Bottom-Up Review (BUR) of U.S. defense policy, established a goal of maintaining a Navy of about 346 ships, including 45 to 55 SSNs. The Clinton Administration's 1997 QDR supported a requirement for a Navy of about 305 ships and established a tentative SSN force-level goal of 50 boats, \"contingent on a reevaluation of peacetime operational requirements.\" The Clinton Administration later amended the SSN figure to 55 boats (and therefore a total of about 310 ships).", "The reevaluation called for in the 1997 QDR was carried out as part of a Joint Chiefs of Staff (JCS) study on future requirements for SSNs that was completed in December 1999. The study had three main conclusions:", "\"that a force structure below 55 SSNs in the 2015 [time frame] and 62 [SSNs] in the 2025 time frame would leave the CINC's [the regional military commanders-in-chief] with insufficient capability to respond to urgent crucial demands without gapping other requirements of higher national interest. Additionally, this force structure [55 SSNs in 2015 and 62 in 2025] would be sufficient to meet the modeled war fighting requirements\"; \"that to counter the technologically pacing threat would require 18 Virginia class SSNs in the 2015 time frame\"; and \"that 68 SSNs in the 2015 [time frame] and 76 [SSNs] in the 2025 time frame would meet all of the CINCs' and national intelligence community's highest operational and collection requirements.\"", "The conclusions of the 1999 JCS study were mentioned in discussions of required SSN force levels, but the figures of 68 and 76 submarines were not translated into official DOD force-level goals.", "The George W. Bush Administration's report on the 2001 QDR revalidated the amended requirement from the 1997 QDR for a fleet of about 310 ships, including 55 SSNs. In revalidating this and other U.S. military force-structure goals, the report cautioned that as DOD's \"transformation effort matures\u2014and as it produces significantly higher output of military value from each element of the force\u2014DOD will explore additional opportunities to restructure and reorganize the Armed Forces.\"", "DOD and the Navy conducted studies on undersea warfare requirements in 2003-2004. One of the Navy studies\u2014an internal Navy study done in 2004\u2014reportedly recommended reducing the attack submarine force level requirement to as few as 37 boats. The study reportedly recommended homeporting a total of nine attack submarines at Guam and using satellites and unmanned underwater vehicles (UUVs) to perform ISR missions now performed by attack submarines.", "In March 2005, the Navy submitted to Congress a report projecting Navy force levels out to FY2035. The report presented two alternatives for FY2035\u2014a 260-ship fleet including 37 SSNs and 4 SSGNs, and a 325-ship fleet including 41 SSNs and 4 SSGNs.", "In May 2005, it was reported that a newly completed DOD study on attack submarine requirements called for maintaining a force of 45 to 50 boats.", "In February 2006, the Navy proposed to maintain in coming years a fleet of 313 ships, including 48 SSNs.", "Although the Navy's ship force-level goals have changed repeatedly in subsequent years, the figure of 48 SSNs remained unchanged until December 2016, when the Navy released a force-level objective for achieving and maintaining a force of 355 ships, including 66 SSNs.", "Appendix B. Options for Funding SSNs", "This appendix presents information on some alternative profiles for funding the procurement of SSNs. These alternatives include but are not necessarily limited to the following:", "two years of advance procurement (AP) funding followed by full funding \u2014the traditional approach, under which there are two years of AP funding for the SSN's long-leadtime components, followed by the remainder of the boat's procurement funding in the year of procurement; one year of AP funding followed by full funding \u2014one year of AP funding for the SSN's long-leadtime components, followed by the remainder of the boat's procurement funding in the year of procurement; full funding with no AP funding (single-year full funding , aka point-blank full funding ) \u2014full funding of the SSN in the year of procurement, with no AP funding in prior years; incremental funding \u2014partial funding of the SSN in the year of procurement, followed by one or more years of additional funding increments needed to complete the procurement cost of the ship; and advance appropriations \u2014a form of full funding that can be viewed as a legislatively locked in form of incremental funding.", "Navy testimony to Congress in early 2007, when Congress was considering the FY2008 budget, suggested that two years of AP funding are required to fund the procurement of an SSN, and consequently that additional SSNs could not be procured until FY2010 at the earliest. This testimony understated Congress's options regarding the procurement of additional SSNs in the near term. Although SSNs are normally procured with two years of AP funding (which is used primarily for financing long-leadtime nuclear propulsion components), Congress can procure an SSN without prior-year AP funding, or with only one year of AP funding. Consequently, Congress at that time had the option of procuring an additional SSN in FY2009 and/or FY2010.", "Single-year full funding has been used in the past by Congress to procure nuclear-powered ships for which no prior-year AP funding had been provided. Specifically, Congress used single-year full funding in FY1980 to procure the nuclear-powered aircraft carrier CVN-71, and again in FY1988 to procure the CVNs 74 and 75. In the case of the FY1988 procurement, under the Administration's proposed FY1988 budget, CVNs 74 and 75 were to be procured in FY1990 and FY1993, respectively, and the FY1988 budget was to make the initial AP payment for CVN-74. Congress, in acting on the FY1988 budget, decided to accelerate the procurement of both ships to FY1988, and fully funded the two ships that year at a combined cost of $6.325 billion. The ships entered service in 1995 and 1998, respectively.", "The existence in both FY1980 and FY1988 of a spare set of Nimitz-class reactor components was not what made it possible for Congress to fund CVNs 71, 74, and 75 with single-year full funding; it simply permitted the ships to be built more quickly. What made it possible for Congress to fund the carriers with single-year full funding was Congress's constitutional authority to appropriate funding for that purpose.", "Procuring an SSN with one year of AP funding or no AP funding would not materially change the way the SSN would be built\u2014the process would still encompass two or three years of advance work on long-leadtime components, and an additional five or six years or so of construction work on the ship itself. The outlay rate for the SSN could be slower, as outlays for construction of the ship itself would begin one or two years later than normal, and the interval between the recorded year of full funding and the year that the ship enters service would be longer than normal.", "Congress in the past has procured certain ships in the knowledge that those ships would not begin construction for some time and consequently would take longer to enter service than a ship of that kind would normally require. When Congress procured two nuclear-powered aircraft carriers (CVNs 72 and 73) in FY1983, and another two (CVNs 74 and 75) in FY1988, it did so in both cases in the knowledge that the second ship in each case would not begin construction until some time after the first.", "Appendix C. 2006 Navy Study on Options for Mitigating Projected Valley in SSN Force Level", "This appendix presents background information on a study initiated by the Navy in 2006 for mitigating the valley in the SSN force levels projected for the 2020s and 2030s. The study was completed in early 2007 and briefed to CRS and CBO on May 22, 2007. At the time of the study, the SSN force was projected to bottom out at 40 boats and then recover to 48 boats by the early 2030s. Principal points in the Navy study (which cite SSN force-level projections as understood at that time) include the following:", "The day-to-day requirement for deployed SSNs is 10.0, meaning that, on average, a total of 10 SSNs are to be deployed on a day-to-day basis. The peak projected wartime demand is about 35 SSNs deployed within a certain amount of time. This figure includes both the 10.0 SSNs that are to be deployed on a day-to-day basis and 25 additional SSNs surged from the United States within a certain amount of time. Reducing Virginia-class shipyard construction time to 60 months\u2014something that the Navy already plans to do as part of its strategy for meeting the Virginia-class cost-reduction goal (see earlier discussion on cost-reduction goal)\u2014will increase the size of the SSN force by two boats, so that the force would bottom out at 42 boats rather than 40. If, in addition to reducing Virginia-class shipyard construction time to 60 months, the Navy also lengthens the service lives of 16 existing SSNs by periods ranging from 3 months to 24 months (with many falling in the range of 9 to 15 months), this would increase the size of the SSN force by another two boats, so that the force would bottom out at 44 boats rather than 40 boats. The total cost of extending the lives of the 16 boats would be roughly $500 million in constant FY2005 dollars. The resulting force that bottoms out at 44 boats could meet the 10.0 requirement for day-to-day deployed SSNs throughout the 2020-2033 period if, as an additional option, about 40 SSN deployments occurring in the eight-year period 2025-2032 were lengthened from six months to seven months. These 40 or so lengthened deployments would represent about one-quarter of all the SSN deployments that would take place during the eight-year period. The resulting force that bottoms out at 44 boats could not meet the peak projected wartime demand of about 35 SSNs deployed within a certain amount of time. The force could generate a total deployment of 32 SSNs within the time in question\u20143 boats (or about 8.6%) less than the 35-boat figure. Lengthening SSN deployments from six months to seven months would not improve the force's ability to meet the peak projected wartime demand of about 35 SSNs deployed within a certain amount of time. To meet the 35-boat figure, an additional four SSNs beyond those planned by the Navy would need to be procured. Procuring four additional SSNs would permit the resulting 48-boat force to surge an additional three SSNs within the time in question, so that the force could meet the peak projected wartime demand of about 35 SSNs deployed within a certain amount of time. Procuring one to four additional SSNs could also reduce the number of seven-month deployments that would be required to meet the 10.0 requirement for day-to-day deployed SSNs during the period 2025-2032. Procuring one additional SSN would reduce the number of seven-month deployments during this period to about 29; procuring two additional SSNs would reduce it to about 17, procuring three additional SSNs would reduce it to about 7, and procuring four additional SSNs would reduce it to 2.", "The Navy added a number of caveats to these results, including but not limited to the following:", "The requirement for 10.0 SSNs deployed on a day-to-day basis is a current requirement that could change in the future. The peak projected wartime demand of about 35 SSNs deployed within a certain amount of time is an internal Navy figure that reflects recent analyses of potential future wartime requirements for SSNs. Subsequent analyses of this issue could result in a different figure. The identification of 19 SSNs as candidates for service life extension reflects current evaluations of the material condition of these boats and projected use rates for their nuclear fuel cores. If the material condition of these boats years from now turns out to be worse than the Navy currently projects, some of them might no longer be suitable for service life extension. In addition, if world conditions over the next several years require these submarines to use up their nuclear fuel cores more quickly than the Navy now projects, then the amounts of time that their service lives might be extended could be reduced partially, to zero, or to less than zero (i.e., the service lives of the boats, rather than being extended, might need to be shortened). The analysis does not take into account potential rare events, such as accidents, that might force the removal of an SSN from service before the end of its expected service life. Seven-month deployments might affect retention rates for submarine personnel."], "subsections": []}]}]}}
{"id": "R45664", "title": "Virtual Currencies and Money Laundering: Legal Background, Enforcement Actions, and Legislative Proposals", "released_date": "2019-04-03T00:00:00", "summary": ["Law enforcement officials have described money laundering\u2014the process of making illegally obtained proceeds appear legitimate\u2014as the \"lifeblood\" of organized crime. Recently, money launderers have increasingly turned to a new technology to conceal the origins of illegally obtained proceeds: virtual currency. Virtual currencies like Bitcoin, Ether, and Ripple are digital representations of value that, like ordinary currency, function as media of exchange, units of account, and stores of value. However, unlike ordinary currencies, virtual currencies are not legal tender, meaning they cannot be used to pay taxes and creditors need not accept them as payments for debt. While virtual currency enthusiasts tout their technological promise, a number of commentators have contended that the anonymity offered by these new financial instruments makes them an attractive vehicle for money laundering. Law enforcement officials, regulators, and courts have accordingly grappled with how virtual currencies fit into a federal anti-money laundering (AML) regime designed principally for traditional financial institutions.", "The federal AML regime consists of two general categories of laws and regulations. First, federal law requires a range of \"financial institutions\" to abide by a variety of AML program, reporting, and recordkeeping requirements. Second, federal law criminalizes money laundering and various forms of related conduct.", "Over the past decade, federal prosecutors and regulators have pursued a number of cases involving the application of these laws to virtual currencies. Specifically, federal prosecutors have brought money laundering charges against the creators of online marketplaces that allowed their users to exchange virtual currency for illicit goods and services. In one of these prosecutions, a federal district court held that transactions involving Bitcoin can serve as the predicate for money laundering charges. Federal prosecutors have also pursued charges against the developers of certain virtual currency payment systems allegedly designed to facilitate illicit transactions and launder the proceeds of criminal activity. Specifically, prosecutors charged these developers with conspiring to commit money laundering and operating unlicensed money transmitting businesses. In adjudicating the second category of charges, courts have concluded that the relevant virtual currency payment systems were \"unlicensed money transmitting businesses,\" rejecting the argument that the relevant criminal prohibition applies only to money transmitters that facilitate cash transactions. Finally, the Financial Crimes Enforcement Network (FinCEN)\u2014the bureau within the Treasury Department responsible for administering the principal federal AML statute\u2014has pursued a number of administrative enforcement actions against virtual currency exchangers, assessing civil penalties for failure to implement sufficient AML programs and report suspicious transactions.", "As these prosecutions and enforcement actions demonstrate, virtual currencies have a number of features that make them attractive to criminals. Specifically, commentators have noted that money launderers are attracted to the anonymity, ease of cross-border transfer, lack of clear regulations, and settlement finality that accompanies virtual currency transactions. Several bills introduced in the 116th Congress are aimed at addressing these challenges. These bills would, among other things, commission agency analyses of the use of virtual currencies for illicit activities and clarify FinCEN's statutory powers and duties. Commentators have also identified legal uncertainty as an additional challenge facing prosecutors, regulators, and participants in virtual currency transactions. Moreover, a number of observers have argued that existing AML regulations are likely to stifle innovation by virtual currency developers. In response to these concerns about legal clarity and burdensome regulation, at least one legislative proposal contemplates exempting certain blockchain developers from various AML requirements."], "reports": {"section_title": "", "paragraphs": ["L aw enforcement officials have described money laundering\u2014the process of making illegally obtained proceeds appear legitimate\u2014as the \"lifeblood\" of organized crime. According to one estimate, criminals launder roughly $1 trillion to $2 trillion annually worldwide, a sum that represents between 2% and 5% of global gross domestic product. Without the ability to conceal and spend these large sums of \"dirty\" money, criminal organizations \"could operate only at a small fraction of current levels, and with far less flexibility.\" ", "Over the past decade, money launderers have turned to a new technology to conceal the origins of illegally obtained proceeds: virtual currency. Virtual currencies like Bitcoin, Ether, and Ripple are digital representations of value that, like ordinary currency, function as media of exchange, units of account, and stores of value. However, unlike ordinary currency, virtual currencies are not legal tender, meaning they cannot be used to pay taxes and creditors need not accept them as payments for debt. According to their proponents, virtual currencies (1) have the potential to offer cheaper and faster transactions than traditional bank-centric payment networks, (2) provide inflation-resistant alternatives to traditional fiat currencies, and (3) often involve promising new technologies (such as blockchain technology) that will spur innovation across a variety of fields. However, other commentators have argued that the anonymity offered by certain decentralized virtual currencies\u2014that is, virtual currencies that are not issued or maintained by a central organization\u2014makes them an attractive vehicle for money laundering. These observers have contended that criminals often use such virtual currencies not only to buy and sell illicit goods and services, but also to launder illegally obtained fiat currencies. ", "While it is difficult to definitively assess the volume of money laundered through virtual currencies, the virtual currency security firm CipherTrace has estimated that criminals laundered roughly $2.5 billion of Bitcoin on major exchanges between January 9, 2009, and September 20, 2018. An official from the Treasury Department's Financial Crimes Enforcement Network (FinCEN) has similarly indicated that virtual currencies have been \"exploited to support billions of dollars of . . . suspicious activity.\" While such figures represent only a fraction of both global money laundering and virtual currency transaction volume, government officials have identified virtual currencies as a growth industry for money launderers that presents regulators and law enforcement with unique challenges.", "This report provides a general overview of the application of federal anti-money laundering (AML) law to virtual currencies. First, the report outlines the basic architecture of federal AML law. Second, the report discusses administrative guidance concerning the application of federal AML law to virtual currencies. Third, the report reviews a number of prominent criminal prosecutions and administrative enforcement actions involving federal AML law and virtual currencies. Finally, the report discusses a number of legislative proposals to reform certain elements of the federal AML regime surrounding virtual currencies and further investigate the use of virtual currencies in criminal activities. "], "subsections": [{"section_title": "Legal Background", "paragraphs": ["The federal AML regime consists of two general categories of laws and regulations. First, federal law requires a range of \"financial institutions\" to abide by a variety of AML compliance program, reporting, and recordkeeping requirements. Second, federal law criminalizes money laundering and various forms of related conduct. "], "subsections": [{"section_title": "Requirements for \"Financial Institutions\"", "paragraphs": ["The Bank Secrecy Act (BSA) and its various amendments represent the centerpiece of the federal AML regime for \"financial institutions\"\u2014a category that includes federally insured banks, securities brokers and dealers, currency exchanges, and money services businesses. Under the BSA and associated regulations, covered \"financial institutions\" must, among other things, establish AML programs that meet certain minimum standards, report certain types of transactions to the Treasury Department, and maintain certain financial records. ", "Specifically, the BSA requires \"financial institutions\" to establish AML programs that include, at a minimum, (1) the development of internal policies, procedures, and controls, (2) the designation of a compliance officer, (3) an ongoing employee training program, and (4) an independent audit function to test the program. \"Financial institutions\" must also report certain large currency transactions and suspicious activities to FinCEN\u2014the bureau within the Treasury Department responsible for administering the BSA. Finally, the BSA and associated regulations require \"financial institutions\" to maintain certain types of records. FinCEN regulations require banks, for example, to retain records related to certain large transactions involving foreign banks and the taxpayer identification numbers associated with certain accounts. ", "Money services businesses (MSBs) represent one category of \"financial institution\" that must register with FinCEN and, like other \"financial institutions,\" abide by AML program, reporting, and recordkeeping requirements. Under FinCEN's regulations, MSBs include a variety of specific categories of businesses, including \"money transmitters\"\u2014that is, (1) persons who accept \"currency, funds, or other value that substitutes for currency from one person\" and transmit those items \"to another location or person by any means,\" and (2) \"[a]ny other person engaged in the transfer or funds.\" In addition to imposing regulatory requirements on MSBs, federal law makes it a crime to knowingly operate an \"unlicensed money transmitting business.\" An entity qualifies as an \"unlicensed money transmitting business\" under this provision (Section 1960 of Title 18) if it", "1. is \"operated without an appropriate money transmitting license in a State where such operation is punishable as a misdemeanor or a felony\"; 2. fails to comply with the BSA's federal registration requirement for \"money transmitting businesses\"; or 3. \"otherwise involves the transportation or transmission of funds that are known to the defendant to have been derived from a criminal offense or are intended to be used to promote or support unlawful activity.\" "], "subsections": []}, {"section_title": "Criminal AML Provisions", "paragraphs": ["In addition to imposing various AML requirements on \"financial institutions,\" federal law also criminalizes money laundering and certain related conduct. Specifically, 18 U.S.C. \u00a7 1956(a)(1) (Section 1956) makes it unlawful for a person who \"know[s] that the property involved in a financial transaction represents the proceeds of some form of unlawful activity\" to \"conduct[] or attempt[] to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity\" \u2014", "(A) (i) with the intent to promote the carrying on of specified unlawful activity; or", "(ii) with intent to engage in conduct constituting [tax evasion or tax fraud]; or", "(B) knowing that the transaction is designed in whole or in part\u2014", "(i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or", "(ii) to avoid a transaction reporting requirement under State or Federal law. ", "For purposes of this prohibition, the term \"financial transaction\" includes transactions \"involving the movement of funds\" and transactions \"involving one or more monetary instruments.\"", "Similarly, 18 U.S.C. \u00a7 1957(a) (the so-called \"Spending Statute\") prohibits monetary transactions in criminally derived property. Specifically, Section 1957(a) makes it unlawful to \"knowingly engage[] or attempt[] to engage in a monetary transaction in criminally derived property of a value greater than $10,000 and is derived from specified unlawful activity.\" In other words, unlike Section 1956, Section 1957 makes it a crime to knowingly spend the proceeds of specified unlawful activity, even if such spending does not promote such activity and is not designed to conceal the origins of the proceeds."], "subsections": []}]}, {"section_title": "FinCEN Guidance", "paragraphs": ["Because neither Congress nor FinCEN has formally amended the BSA regulatory regime in response to the advent of virtual currencies, prosecutors and regulators have been required to analyze whether virtual currency transactions and business models fall within some of the preexisting legal categories discussed above. In 2013, FinCEN attempted to clarify certain aspects of this analysis by issuing administrative guidance addressing the circumstances in which participants in virtual currency transactions qualify as MSBs.", "In its 2013 guidance, FinCEN took the position that \"users\" of virtual currencies do not qualify as MSBs subject to federal registration requirements, while \"administrators\" and \"exchangers\" of virtual currencies may qualify as MSBs. Specifically, the guidance explained that users of virtual currencies\u2014that is, persons who obtain virtual currencies to purchase goods or services\u2014are not MSBs because they are not involved in money transmission. By contrast, FinCEN indicated that virtual currency administrators (persons \"engaged as a business\" in putting a virtual currency into circulation and who have the authority to withdraw such currency from circulation) and exchangers (persons \"engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency\") may be \"money transmitters\" and, by extension, MSBs. Specifically, FinCEN explained that virtual currency administrators and exchangers qualify as MSBs (unless they fall within a specific exemption) when they (1)\u00a0\"accept[] or transmit[] a convertible virtual currency,\" or (2) \"buy[] or sell[] convertible virtual currency for any reason.\" Accordingly, under FinCEN's guidance, virtual currency issuers and exchangers will generally qualify as MSBs unless they fall within a specific statutory or regulatory exemption."], "subsections": []}, {"section_title": "Prosecutions and Enforcement Actions", "paragraphs": ["Over the past decade, federal prosecutors and regulators have pursued a number of cases involving the application of federal AML law to virtual currencies. In a number of criminal cases, federal prosecutors have brought money-laundering and certain related charges against the operators of online marketplaces and virtual currency payment systems used to disguise the proceeds of illicit activities. FinCEN has also brought civil enforcement actions against virtual currency exchangers for failure to comply with the BSA's AML program, reporting, and recordkeeping requirements. "], "subsections": [{"section_title": "Online Marketplaces for Illicit Goods", "paragraphs": ["Federal prosecutors have brought money-laundering charges against the creators of online marketplaces that allowed their users to exchange virtual currency for a range of illicit goods and services. In one of these prosecutions, a federal district court held that transactions involving Bitcoin can serve as the predicate for money-laundering charges. "], "subsections": [{"section_title": "Silk Road", "paragraphs": ["In 2013, federal authorities shut down Silk Road, which they alleged was \"the most sophisticated and extensive criminal marketplace on the Internet,\" enabling tens of thousands of users to anonymously buy and sell illegal drugs, malicious software, and other illicit goods and services. Federal prosecutors charged the site's creator with, among other things, conspiracy to commit money laundering under Section 1956. The prosecutors alleged that the site's creator conspired to conduct \"financial transactions\" involving the proceeds of unlawful activity\u2014namely, narcotics trafficking and computer hacking\u2014with the intent to promote the carrying on of such activity. In defending this charge, Silk Road's creator argued that his alleged conduct\u2014facilitating the exchange of Bitcoin for illegal goods and services\u2014did not involve \"financial transactions\" within the meaning of Section 1956, which defines that term to include (among other things) transactions \"involving one or more monetary instruments.\" Specifically, the site's creator contended that because Bitcoin does not qualify as a \"monetary instrument\"\u2014which Section 1956 defines to mean the currency of a country, personal checks, bank checks, money orders, investment securities, or negotiable instruments\u2014transactions involving Bitcoin do not represent \"financial transactions\" under Section 1956. ", "The U.S. District Court for the Southern District of New York rejected this argument, holding that transactions involving Bitcoin can qualify as \"financial transactions\" under Section 1956 because they fall under a separate category of transactions identified by the relevant statutory definition: transactions involving \"the movement of funds .\" Specifically, the court reasoned that Bitcoin transactions involve \"the movement of funds\" because the term \"funds\" includes \"money,\" which in turn refers to \"an object used to buy things.\" Because Bitcoin can be used to buy things, the court reasoned that Bitcoin transactions involve \"the movement of funds\" and therefore qualify as \"financial transactions\" under Section 1956. As a result, the court explained, \"[o]ne can money launder using Bitcoin.\""], "subsections": []}, {"section_title": "AlphaBay", "paragraphs": ["Similarly, in 2017, federal prosecutors brought money-laundering conspiracy charges against the creator of AlphaBay, another online marketplace that allowed its users to exchange virtual currency for illicit goods and services. The prosecutors alleged that by facilitating the exchange of virtual currencies (including Bitcoin, Monero, and Ether) for illegal narcotics and other illicit goods and services, the site's creator had conspired to conduct \"financial transactions\" involving the proceeds of unlawful activities. However, the federal government dismissed these charges after AlphaBay's creator died in July 2017."], "subsections": []}]}, {"section_title": "Virtual Currency Payment Systems Used for Illicit Purposes", "paragraphs": ["Federal prosecutors have also pursued charges against the developers of certain virtual currency payment systems allegedly designed to facilitate illicit transactions and launder the proceeds of criminal activity. Specifically, prosecutors have charged these developers with conspiring to commit money laundering and operating unlicensed money transmitting businesses under Sections 1956 and 1960, respectively. In adjudicating the second category of charges, courts have concluded that the relevant virtual currency payment systems were \"unlicensed money transmitting businesses\" under Section 1960, rejecting the argument that the provision applies only to money transmitters that facilitate cash transactions. "], "subsections": [{"section_title": "e-Gold", "paragraphs": ["In 2007, federal prosecutors charged e-Gold\u2014an \"alternative payment system\" and virtual currency purportedly backed by stored physical gold\u2014and its founders and director with money laundering and operating an unlicensed money transmitting business. The prosecutors alleged that e-Gold \"was widely accepted as a payment mechanism for transactions involving credit card and identification fraud, high yield investment programs and other investment scams, and child exploitation\" because of the anonymity it offered its users.", "In charging the defendants for failing to register their business, prosecutors alleged that e-Gold operated as an \"unlicensed money transmitting business\" in each of the three ways identified by Section 1960\u2014the provision criminalizing the operation of \"unlicensed money transmitting businesses.\" Specifically, the prosecutors alleged that e-Gold (1) lacked a required state money transmitter license, (2) failed to comply with the BSA's federal registration requirements for \"money transmitting businesses\" (requirements set forth in Section 5330 of Title 31), and (3)\u00a0was involved in the transmission of funds that were \"known to have been derived from a criminal offense\" or that were \"intended to be used to promote and support unlawful activity.\"", "In defending these charges, the defendants presented an intricate argument for the proposition that Section 1960 applies only to businesses that facilitate cash (as opposed to virtual currency) transactions. Specifically, the defendants argued that because Section 1960 does not define the term \"money transmitting business,\" it must \"borrow\" the definition of that term in Section 5330\u2014the BSA provision establishing federal registration requirements for \"money transmitting businesses.\" The defendants further reasoned that (1) Section 5330 provides that an entity is a \"money transmitting business\" only if it must file currency transaction reports (CTRs), and (2) businesses that do not facilitate cash transactions need not file CTRs. Accordingly, under the defendants' theory, a business like e-Gold that does not facilitate cash transactions does not qualify as a \"money transmitting business\" under Section 5330 and (by extension) Section 1960. ", "The U.S. District Court for the District of Columbia rejected this argument, holding that e-Gold was indeed a \"money transmitting business\" under Section 1960 for two reasons. First, the court rejected the defendants' contention that Section 1960 must \"borrow\" Section 5330's definition of \"money transmitting business.\" The court rejected this argument on the grounds that Section 1960 contains its own definition of the term \"money transmitting\" and does not reflect an intent to \"borrow\" the definition of \"money transmitting business\" from Section 5330. The court further explained that because e-Gold was a business engaged in \"money transmitting\" as defined by Section 1960\u2014that is, \"transferring funds on behalf of the public\"\u2014it was a \"money transmitting business\" under Section 1960. ", "Second, the court evaluated whether e-Gold also qualified as a \"money transmitting business\" under Section 5330\u2014an issue that remained relevant because of the federal government's charge that the defendants violated Section 1960 by violating Section 5330's registration requirements . The court concluded that e-Gold was indeed a \"money transmitting business\" under Section 5330, rejecting the defendants' argument that e-Gold did not fall within that category because it was not required to file CTRs. Specifically, the court rejected the argument that a business is required to file CTRs only if it facilitates cash transactions. Instead, the court explained that because the statute imposing CTR obligations imposes such obligations when money transmitting businesses facilitate cash transactions (as opposed to if they facilitate such transactions), all money transmitting businesses have a continuing obligation to file CTRs \"in the eventuality that they ever are involved\" in a reportable cash transaction. The court accordingly concluded that because e-Gold was required to file CTRs and satisfied the other elements of the relevant statutory definition, e-Gold was a \"money transmitting business\" under Section 5330 even though it did not process cash transactions. After the court denied the defendants' motion to dismiss the charges for operating an unlicensed money transmitting business, the defendants pleaded guilty to those charges and money laundering."], "subsections": []}, {"section_title": "Liberty Reserve", "paragraphs": ["Similarly, in May 2013, federal prosecutors charged the founder of Liberty Reserve\u2014a Costa Rica-based virtual currency service\u2014with conspiracy to commit money laundering, conspiracy to commit international money laundering, and operating an unlicensed money transmitting business. Liberty Reserve administered a virtual currency known as \"LR\" and described itself as a \"payment processor and money transfer system.\" According to prosecutors, Liberty Reserve's founder \"intentionally created, structured, and operated\" the service \"as a business venture designed to help criminals conduct illegal transactions and launder the proceeds of their crimes,\" facilitating a broad range of criminal activity that included identity theft, credit card fraud, computer hacking, child pornography, and narcotics trafficking. Specifically, Liberty Reserve allegedly facilitated such activity by allowing its users to set up accounts using fake names and, for an additional fee, hide their account numbers when sending funds within the system. Because of this anonymity, prosecutors alleged, Liberty Reserve became the \"bank of choice for the criminal underworld,\" laundering over $6 billion between 2006 and 2013.", "In defending the charge for operating an unlicensed money transmitting business, Liberty Reserve's founder argued that Liberty Reserve was not an \"unlicensed money transmitting business\" under Section 1960 because it did not transfer \"funds\" within the meaning of that provision. However, the U.S. District Court for the Southern District of New York rejected this argument, relying on an earlier case from the same district to conclude that virtual currencies are \"funds\" under Section 1960 because they can be \"easily purchased in exchange for ordinary currency, act[] as a denominator of value, and [are] used to conduct financial transactions.\" Liberty Reserve's founder was ultimately convicted of operating an unlicensed money transmitting business and pleaded guilty to conspiring to commit money laundering."], "subsections": []}]}, {"section_title": "FinCEN Enforcement Actions Against Virtual Currency Exchangers", "paragraphs": ["Consistent with its 2013 guidance, FinCEN has pursued a number of administrative enforcement actions against virtual currency exchangers, assessing civil penalties for failure to implement sufficient AML programs and report suspicious transactions. "], "subsections": [{"section_title": "Ripple", "paragraphs": ["In 2015, FinCEN brought an enforcement action against California-based virtual currency developer and exchanger Ripple Labs, Inc. (Ripple), assessing a $700,000 civil penalty for failure to register as a MSB and failure to implement and maintain an effective AML program. At the time of the enforcement action, Ripple's virtual currency (XRP) was the second-largest virtual currency by market capitalization, trailing only Bitcoin. Ripple sold XRP in exchange for fiat currency without registering as a MSB until 2013, when it incorporated a subsidiary to engage in the relevant sales and transfers. While Ripple's subsidiary ultimately registered with FinCEN, it allegedly failed to fulfill its AML obligations under the BSA. Specifically, FinCEN alleged that Ripple's subsidiary failed to timely establish an AML program that met the BSA's requirements and lacked sufficient controls for implementing the program. Because of this absence of necessary controls, Ripple's subsidiary negotiated an approximately $250,000 transaction with a felon without adhering to its know-your-customer requirements and rejected a number of suspicious transactions without filing suspicious activity reports (SARs) with FinCEN. In response to FinCEN's allegations, Ripple and its subsidiary entered into a settlement agreement, committing to undertake a series of remedial measures and pay a $700,000 civil penalty."], "subsections": []}, {"section_title": "BTC-e", "paragraphs": ["In 2017, FinCEN brought another major enforcement action against BTC-e, one of the largest virtual currency exchanges in the world. FinCEN alleged that BTC-e facilitated transactions involving ransomware, computer hacking, identity theft, tax refund fraud schemes, public corruption, and drug trafficking. FinCEN further contended that BTC-e willfully violated MSB registration requirements, failed to maintain an effective AML program, and failed to file required SARs. Specifically, FinCEN alleged that BTC-e did not verify basic information about its customers and failed to file SARs on thousands of suspicious transactions, including transactions involving Liberty Reserve and other entities that were widely known to be violating U.S. law. Because of this conduct, FinCEN assessed a $110 million civil money penalty against BTC-e and its founder. "], "subsections": []}]}]}, {"section_title": "Issues for Congress and Proposed Legislation", "paragraphs": [], "subsections": [{"section_title": "Regulatory Challenges Posed by Virtual Currencies", "paragraphs": ["As these prosecutions and enforcement actions demonstrate, virtual currencies have a number of features that make them attractive to criminals. Specifically, commentators have noted that money launderers have been attracted by the anonymity, lack of clear regulations, and settlement finality that accompanies virtual currency transactions. The ease of transferring virtual currencies across international borders further complicates AML efforts, as AML regulations \"are not widely applied internationally to virtual currency despite increasing evidence of misuse.\" The Treasury Department's 2018 Money Laundering Risk Assessment accordingly identified virtual currencies as a vulnerability in U.S. AML efforts. Several bills introduced in the 116th Congress aim to address to these challenges. These bills would, among other things, commission agency analyses of the use of virtual currencies for illicit activities and clarify that FinCEN's statutory powers and duties include international coordination on issues related to virtual currencies.", "Commentators have also identified legal uncertainty as an additional challenge facing prosecutors, regulators, and participants in virtual currency transactions. Specifically, these observers have noted that applying the BSA's regulatory regime to virtual currencies requires analyzing novel business models using legal categories developed primarily for traditional financial institutions. While the weight of legal authority supports the application of some of these categories to certain virtual currency business models, at least one anomalous decision indicates that some judges demand more explicit indicia of congressional intent to apply existing law in this relatively new field. Moreover, a number of commentators have argued that providing greater legal certainty to legitimate virtual currency activities is necessary to preserve the United States' position as a \"global leader\" in encouraging technological innovation. This interest in legal clarity\u2014in addition to a desire to shield certain virtual currency innovators from \"expensive and onerous\" AML requirements \u2014has generated a legislative proposal to exempt certain blockchain developers from various money transmitter requirements."], "subsections": []}, {"section_title": "Bills in the 116th Congress", "paragraphs": [], "subsections": [{"section_title": "Legislation Commissioning Agency Analyses", "paragraphs": ["In January 2019, the House passed three bills that would commission studies concerning the use of virtual currencies for illicit purposes. H.R. 56 , the Financial Technology Protection Act, would establish an Independent Financial Technology Task Force to Combat Terrorism and Illicit Financing (Task Force) led by the Treasury Secretary. The bill would direct the Task Force to (1) \"conduct independent research on terrorist and illicit use of new financial technologies, including digital currencies,\" and (2)\u00a0\"develop legislative and regulatory proposals to improve counter-terrorist and counter-illicit financing efforts.\" H.R. 56 would further require the Task Force to annually report its findings to Congress. The bill would also establish two programs to incentivize members of the public to assist the federal government's efforts to combat the illicit use of virtual currencies. First, the bill would direct the Treasury Secretary to establish a reward of up to $450,000 for persons who \"provide[] information leading to the conviction of an individual involved with terrorist use of digital currencies.\" Second, the bill would direct the Treasury Secretary to create a grant program \"for the development of tools and programs to detect terrorist and illicit use of digital currencies.\" After passing the House in January 2019, H.R. 56 was referred to the Senate Committee on Banking, Housing, and Urban Affairs. ", "A second bill, H.R. 428 , the Homeland Security Assessment of Terrorists' Use of Virtual Currencies Act, would similarly commission an analysis of the use of virtual currencies by terrorists. Specifically, H.R. 428 would direct the Under Secretary of Homeland Security for Intelligence and Analysis to conduct a \"threat assessment\" analyzing \"the actual and potential threat posed by individuals using virtual currency to carry out activities in furtherance of an act of terrorism, including the provision of material support or resources to a foreign terrorist organization.\" After passing the House in January 2019, H.R. 428 was referred to the Senate Committee on Homeland Security and Governmental Affairs.", "Finally, H.R. 502 , the Fight Illicit Networks and Detect Trafficking Act (the FIND Trafficking Act), would direct the Government Accountability Office (GAO) to conduct a study \"on how virtual currencies and online marketplaces are used to facilitate sex and drug trafficking.\" The bill would require GAO to provide Congress with a report summarizing the results of the study, together with any recommendations for legislative or regulatory action that would assist the federal government in combatting the use of virtual currencies to facilitate sex and drug trafficking. After passing the House in January 2019, H.R. 56 was referred to the Senate Committee on Banking, Housing, and Urban Affairs."], "subsections": []}, {"section_title": "H.R. 1414, FinCEN Improvement Act of 2019", "paragraphs": ["In March 2019, the House passed H.R. 1414 , the FinCEN Improvement Act of 2019. The bill would, among other things, clarify that FinCEN's statutory power to coordinate with foreign financial intelligence units on antiterrorism and AML initiatives \"includ[es] matters involving emerging technologies or value that substitutes for currency.\" After passing the House in March 2019, H.R. 1414 was referred to the Senate Committee on Banking, Housing, and Urban Affairs."], "subsections": []}, {"section_title": "H.R. 528, Blockchain Regulatory Certainty Act", "paragraphs": ["In January 2019, H.R. 528 , the Blockchain Regulatory Certainty Act, was introduced in the House of Representatives. The bill would create a safe harbor from federal and state money transmitter licensing and registration requirements for certain blockchain developers. Specifically, the bill would provide that non controlling \"blockchain developers\" and providers of a \"blockchain service\" shall not be treated as \"money transmitters,\" MSBs, \"or any other State or Federal legal designation[s] requiring licensing or registration as a condition to acting as a blockchain developer or provider of a blockchain service.\" A blockchain developer or provider of a blockchain service would qualify as a noncontrolling developer or provider as long as it does not have control over users' digital currency in the regular course of business. Some commentators have argued that such a safe harbor is necessary to provide legal certainty to actors in the virtual currency space, including persons who contribute code to virtual currency platforms or develop blockchain-related software but do not take custody of others' virtual currency. However, another commentator has noted that it is \"debat[able]\" whether federal registration requirements apply to such persons. H.R. 528 was referred to the House Committee on Financial Services and the House Committee on the Judiciary in January 2019."], "subsections": []}]}]}]}}
{"id": "R41857", "title": "Use of National Statuary Hall: Assignment and Historic Events", "released_date": "2019-03-07T00:00:00", "summary": ["Statuary Hall has been used as the setting for a variety of events, including memorial ceremonies and receptions for new Members of Congress, award presentations, and as media space after presidential addresses. This report identifies and categorizes uses of Statuary Hall since 2005.", "Use of Statuary Hall is at the discretion of the Speaker of the House of Representatives. Under House Rule I, clause 3, the Speaker has the authority to assign unappropriated rooms on the House of Representatives side of the Capitol, including Statuary Hall. Use of Statuary Hall could also be authorized by House resolution, but no events since 2005 have been held in Statuary Hall on such authority.", "Since 2005, 170 events have been held in Statuary Hall. Events held in Statuary Hall can be divided into four categories: (1) receptions and dinners, (2) ceremonies, (3) media events, and (4) memorial services. The report provides a brief explanation of each category and examples of activities in each category."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Between 1819 and 1857, the room currently called Statuary Hall served as the Hall of the House of Representatives. Upon the completion of the current House chamber in 1857, the fate of the old \"Hall of the House\" was debated for many years.", "Perhaps the simplest was that it be converted into additional space for the Library of Congress, which was still housed in the Capitol. More drastic was the suggestion that the entire Hall be dismantled and replaced by two floors of committee rooms. Eventually, the idea of using the chamber as an art gallery was approved, and works intended for the Capitol extensions were put on exhibit; among these was the plaster model for the Statue of Freedom, which was later cast in bronze for the Capitol dome. The lack of wall space effectively prevented the hanging of large paintings, but the room seemed well suited to the display of statuary.", "Beginning in November 1879, Statuary Hall was first used for events. The first two events were a reception and dinner for the Society of the Army of the Cumberland on November 20, 1879, and a ceremony to close the Centennial Safe on November 22, 1879.", "Today, Statuary Hall is the home to many of the statues in the National Statuary Hall collection, which consists of two statues from each state."], "subsections": []}, {"section_title": "Scheduling Statuary Hall Events", "paragraphs": ["A room in the House Wing of the Capitol may be reserved in one of two ways: through a chamber resolution or pursuant to the Speaker's authority. House Rule I, clause 3 provides the Speaker with the authority to assign unappropriated rooms (i.e., not already assigned to a committee, House leadership, or an officer of the House). House Rule I, clause 3 states", "Except as otherwise provided by rule or law, the Speaker shall have general control of the Hall of the House, the corridors and passages in the part of the Capitol assigned to the use of the House, and the disposal of unappropriated rooms in that part of the Capitol.", "For rooms jointly controlled by the House and Senate (e.g., the Rotunda and Emancipation Hall), a concurrent resolution is generally required to authorize use.", "Initially adopted in 1811 to provide the Speaker with approval authority over events in the House chamber, clause 3 was last amended in 1911, to provide the Speaker with control over unappropriated rooms elsewhere in the House Wing of the Capitol. Since 1911, the Speaker has generally authorized use of rooms in the House Wing of the Capitol not otherwise appropriated."], "subsections": []}, {"section_title": "Events in Statuary Hall, 2005-2018", "paragraphs": ["Since 2005, 170 events have been held in Statuary Hall. The House Sergeant at Arms, whose office provided data for this report, defines an event as activity that prevents public access to Statuary Hall for a period of time. As a result, activities such as a brief wreath laying at a particular statue are not included. Table 1 reports the total number of events held in Statuary Hall since 2005. The Appendix provides the date of each event and a brief description.", "Following receipt of the data from the House Sergeant at Arms, the Congressional Research Service (CRS) examined the events and divided them into four categories: (1) receptions and dinners, (2) ceremonies, (3) media events, and (4) memorial services. The following sections provide a brief explanation of each category and examples of activities. Table 2 reports the number of events since 2005, by category."], "subsections": [{"section_title": "Receptions/Dinners", "paragraphs": ["The largest percentage of events held in Statuary Hall (57.6%) were receptions or dinners, hosted by both official congressional entities and private groups. For example, the Joint Congressional Committee on the Inaugural Ceremonies held the Inaugural Luncheon in Statuary Hall in 2005, 2009, and 2013; and the Capitol Historical Society held a reception for new Members of Congress in the Hall in 2005 and 2013."], "subsections": []}, {"section_title": "Ceremonies", "paragraphs": ["Ceremonies account for 28.8% of the events held in Statuary Hall since 2005. These ceremonies include presentations of awards, unveiling of official portraits, commemorations of event anniversaries, formal wreath layings, and prayer services. For example, the annual National Moment of Remembrance is held in Statuary Hall. In addition, prior to moving the statue to Emancipation Hall in the Capitol Visitor Center, an annual lei draping ceremony at King Kamehameha statue was held in Statuary Hall."], "subsections": []}, {"section_title": "Media Events", "paragraphs": ["Statuary Hall has also been occasionally used as the location for media availability, primarily after a presidential address to a joint session of Congress in the House chamber. Media events represent 5.9% of the events held in Statuary Hall."], "subsections": []}, {"section_title": "Memorial Services", "paragraphs": ["Since 2005, 13 memorial services (7.6%) for current or former Members of Congress have been held in Statuary Hall: for Representatives Robert Matsui (January 5, 2005); Juanita Millender-McDonald (May 17, 2007); Tom Lantos (February 14, 2008); Stephanie Tubbs Jones (September 10, 2008); John P. Murtha (March 30, 2010); Donald M. Payne (April 25, 2012); Speaker Thomas Foley (October 29, 2013); Mark Takai (September 14, 2016); Robert Michel (March 9, 2017); Louise Slaughter (April 18, 2018); and since 2016, an annual U.S. Association of Former Members of Congress memorial service to honor former Members who died in the past year."], "subsections": [{"section_title": "Appendix. Events Held in Statuary Hall, 2005-2018", "paragraphs": ["Since January 1, 2005, 170 events have been held in Statuary Hall. Table A-1 contains a chronological list of these events, the date of the event, and the event type."], "subsections": []}]}]}]}}
{"id": "R45046", "title": "Congress and the War in Yemen: Oversight and Legislation 2015-2019", "released_date": "2019-02-01T00:00:00", "summary": ["This product provides an overview of the role Congress has played in shaping U.S. policy toward the conflict in Yemen. Summary tables provide information on legislative proposals considered in the 115th and 116th Congresses. Various legislative proposals have reflected a range of congressional perspectives and priorities, including with regard to", "the authorization of the activities of the U.S. Armed Forces related to the conflict; the extent of U.S. logistical, material, advisory, and intelligence support for the coalition led by Saudi Arabia; the approval, disapproval, or conditioning of U.S. arms sales to Saudi Arabia; the appropriation of funds for U.S. operations in support of the Saudi-led coalition; the conduct of the Saudi-led coalition's air campaign and its adherence to international humanitarian law and the laws of armed conflict; the demand for greater humanitarian access to Yemen; the call for a wider government assessment of U.S. policy toward Yemen and U.S. support to parties to the conflict; the nature and extent of U.S.-Saudi counterterrorism and border security cooperation; and the role of Iran in supplying missile technology and other weapons to the forces of the Houthi movement.", "The 116th Congress may continue to debate U.S. support for the Saudi-led coalition and Saudi Arabia's conduct of the war in Yemen, where fighting has continued since March 2015. The war has exacerbated a humanitarian crisis in Yemen that began in 2011; presently, the World Food Program reports that 20 million Yemenis face hunger in the absence of sustained food assistance. The difficulty of accessing certain areas of Yemen has made it hard for governments and aid agencies to count the war's casualties. Data collected by the U.S. and European-funded Armed Conflict Location & Event Data Project (ACLED) suggest that 60,000 Yemenis have been killed since January 2016.", "The Trump Administration has opposed various congressional proposals, including initiatives to reject or condition proposed U.S. arms sales or to require an end to U.S. military support to Saudi-led coalition operations in Yemen. Many in Congress have condemned the October 2018 murder of Saudi journalist Jamal Khashoggi by Saudi government personnel, and in general, the incident appears to have exacerbated existing congressional concerns about Saudi leaders and the pace, scope, and direction of change in the kingdom's policies.", "This product includes legislative proposals considered during the 115th and 116th Congresses. It does not include references to Yemen in Iran sanctions legislation, which are covered in CRS Report RS20871, Iran Sanctions. For additional information on the war in Yemen and Saudi Arabia, please see the following CRS products.", "CRS Report R43960, Yemen: Civil War and Regional Intervention.", "CRS Report RL33533, Saudi Arabia: Background and U.S. Relations.", "CRS Insight IN10729, Yemen: Cholera Outbreak."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["In March 2015, Saudi Arabia established a coalition of nations (hereinafter referred to as the Saudi-led coalition or the coalition) to engage in military operations in Yemen against the Ansar Allah/Houthi movement and loyalists of the previous president of Yemen, the late Ali Abdullah Saleh. During 2014, the United States joined Saudi Arabia in demanding that Houthi forces reverse their campaign to occupy the Yemeni capital of Sanaa, but the rapid onset of hostilities in March 2015 forced the Obama Administration to react quickly. At the start of the Saudi-led intervention on March 25, 2015, the Administration announced that the United States would provide \"logistical and intelligence support\" to the coalition's operations without taking \"direct military action in Yemen in support of this effort.\" Soon thereafter, a joint U.S.-Saudi planning cell was established to coordinate military and intelligence support for the campaign. At the United Nations Security Council, the United States supported the passage of Resolution 2216 (April 2015), which, among other things, required member states to impose an arms embargo against the Houthi-Saleh forces and demanded that the Houthis withdraw from all areas seized during the current conflict. ", "Since the March 2015 Saudi-led coalition intervention in Yemen, Congress has taken an active role in debating and overseeing U.S. policy in the Arabian Peninsula. Members have considered legislative proposals seeking to reduce Yemeni civilian casualties resulting from the coalition's operations; improve deteriorating humanitarian conditions; end restrictions on the flow of goods and humanitarian aid; combat Iranian support for the Houthis; preserve maritime security in the Bab al Mandab Strait; and/or support continued Saudi-led coalition and U.S. efforts to counter Al Qaeda and Islamic State forces in Yemen.", "Beyond Yemen, many Members have appeared to view the conflict through the prism of a broader regional rivalry between Saudi Arabia and Iran, and the U.S. effort to limit Iran's malign regional influence. Others lawmakers have viewed the Yemen conflict as indicative of what they perceive as problems in the U.S.-Saudi relationship, a concern that deepened after the killing of Saudi journalist Jamal Khashoggi by Saudi government personnel in October 2018. Congress has considered but has not enacted proposals to curtail or condition U.S. defense sales to Saudi Arabia.", "Responding to the Saudi-led intervention in Yemen also appears to be reinvigorating some Members' interest in strengthening the role of Congress in foreign policy vis-a\u0300-vis the executive branch. Debate in Congress over Yemen has featured bipartisan statements of interest in asserting the prerogatives of the legislative branch to limit executive branch power, specifically using war powers legislation and the appropriations and authorization processes to curb U.S. military involvement in support of coalition operations. Congressional scrutiny of U.S. policy in Yemen also has led to legislative changes to global authorities, such as the Department of Defense's authority to enter into and use acquisition and cross servicing agreements with partner militaries."], "subsections": []}, {"section_title": "Congress, the Obama Administration, and Yemen (2015-2016)", "paragraphs": [], "subsections": [{"section_title": "2015", "paragraphs": ["Congressional interest in the Yemen conflict has evolved and grown gradually and was not widespread at the outset of the coalition's March 2015 intervention in Yemen. In early to mid-2015, congressional interest in U.S. foreign policy in the Middle East centered on the Iran nuclear deal and Operation Inherent Resolve against the Islamic State in Iraq and Syria.", "Several months after the March 2015 intervention, the Saudi-led coalition had not achieved a conclusive victory and what modest gains had been made on the ground were offset by mounting international criticism of growing civilian casualties from coalition air strikes. In Congress, several lawmakers began to express concern about the deteriorating humanitarian situation in Yemen. ", "In late September 2015, Representative Ted W. Lieu wrote a letter to the Joint Chiefs of Staff advocating for a halt to U.S. support for the Saudi-led coalition until it instituted safeguards to prevent civilian casualties. In October 2015, 10 Members of Congress wrote a letter to President Obama urging him to \"work with our Saudi partners to limit civilian casualties to the fullest extent possible.\" In October 2015, Senator Markey stated that \"I fear that our failure to strongly advocate diplomacy in Yemen over the past two years, coupled with our failure to urge restraint in the face of the crisis last spring, may put the viability of this critical [U.S.-Saudi] partnership at risk.\" ", "By the fall of 2015, as the Obama Administration tried to balance its concern for adhering to the laws of armed conflict with its support for Gulf partners, lawmakers began to express their concern over U.S. involvement in the coalition's intervention by scrutinizing U.S. arms sales to Saudi Arabia. When the Administration informally notified Congress of a proposed sale of precision guided munitions (PGMs) to Saudi Arabia, some Senators sought to delay its formal notification. After the formal notification in November 2015, Senate Foreign Relations Committee (SFRC) leaders jointly requested that the Administration notify Congress 30 days prior to associated shipments, marking the first use of this prior notification request authority. At that time, no related joint resolutions of disapproval on proposed sales of PGMs to the kingdom were introduced, but the delay and additional notification request demonstrated congressional concern."], "subsections": []}, {"section_title": "2016", "paragraphs": ["By the one-year anniversary of the Saudi-led intervention in Yemen, a more defined opposition to U.S. support for the coalition had begun to coalesce amid repeated international documentation of human rights abuses and errant coalition airstrikes. In April 2016, legislation was introduced that sought to place conditions on future proposed sale notifications, previously approved sales, or transfers of PGMs to Saudi Arabia. Proposed amendments to FY2017 defense legislation would have added some similar conditions on the use of funds to implement sales of PGMs or prohibited the transfer of cluster munitions to Saudi Arabia. The PGM amendment was not considered, but the cluster munitions amendment was narrowly defeated in a June 2016 House floor vote.", "In the spring and summer of 2016, the United Nations held multiple rounds of peace talks in Kuwait aimed at brokering an end to the conflict. From April 2016 to August 2016, the Saudi-led coalition had largely spared Yemen's capital Sanaa from aerial strikes as part of its commitment to the cessation of hostilities. When U.N.-mediated peace talks collapsed in August 2016, the Saudi-led coalition resumed bombing and the war intensified. ", "During the summer of 2016, the Obama Administration reduced some U.S. support for Saudi Arabia's air campaign in Yemen by withdrawing U.S. personnel assigned to a joint U.S.-Saudi planning cell. Nevertheless, overall U.S.-Saudi cooperation continued and, in August 2016, the Obama Administration notified Congress of a proposed sale of M1A2S tanks to Saudi Arabia. In response, some lawmakers wrote to request that President Obama withdraw the proposal, citing concerns about Yemen. In September 2016, joint resolutions of disapproval of the proposed tank sale were introduced in the Senate ( S.J.Res. 39 ) and House ( H.J.Res. 98 ). On September 21, 2016, the Senate voted to table a motion to discharge the SFRC from further consideration of S.J.Res. 39 (71-27, Record Vote 145). During debate over the motion, many Senators argued in favor of continued U.S. support for Saudi Arabia, with Senator Lindsey Graham remarking \"To those who want to vote today to suspend this aid to Saudi Arabia, people in Iran will cheer you on.\"", "In the wake of an October 2016 Saudi airstrike on a funeral hall in Sanaa that killed 140 people, the Obama Administration initiated a review of U.S. security assistance to Saudi Arabia. Based on that review, it put a hold on a planned sale of precision guided munitions (PGMs) to Saudi Arabia and limited intelligence sharing, but maintained counterterrorism cooperation and refueling for coalition aircraft. ", "In the final months of the Obama Administration, U.S. Armed Forces briefly exchanged fire with forces party to the conflict. In October 2016, Houthi-Saleh forces launched anti-ship missiles at U.S. Navy vessels on patrol off the coast of Yemen. The attacks against the U.S. ships marked the first time U.S. Armed Forces had come under direct fire in the war. The Obama Administration responded to the attacks against U.S. naval vessels by directing the Armed Forces to fire cruise missiles against Houthi-Saleh radar installations. The Obama Administration described the U.S. strikes as self-defense and indicated that it did not want to deepen its direct involvement in the conflict. In August and November 2016, then-Secretary of State John Kerry made several attempts to broker a peace initiative in Oman, but his efforts were rejected by the parties themselves. "], "subsections": []}, {"section_title": "Analysis", "paragraphs": ["By the end of 114 th Congress, the war in Yemen was becoming a more significant foreign policy issue for lawmakers. While a growing number of Members were becoming critical of the U.S. role in supporting the Saudi-led coalition amid a deteriorating humanitarian situation in Yemen, more lawmakers still viewed the conflict through a regional lens rather than as a localized affair. Amid significant congressional opposition to the 2015 nuclear agreement with Iran (Joint Comprehensive Plan of Action or JCPOA), some Members viewed Iran's support for the Houthi movement and the broader conflict in Yemen as an example of Iran's malign regional activities not directly addressed by the JCPOA. As the Houthis targeted Gulf state infrastructure on land and vessels at sea, their behavior was touted as evidence of Iran's growing capabilities to threaten U.S. and Gulf security.", "Just as some Members considered the Yemen conflict primarily a proxy war between the Iran-backed Houthis and the Saudi-led coalition, others viewed it as a test of long-standing U.S. commitments to supporting Saudi Arabian security. Supporters of the relationship, while acknowledging that Saudi Arabia's conduct of the war was at times problematic, argued that to curtail U.S. arms sales or other defense support to the kingdom would weaken a vital partner that was under threat from a hostile nonstate actor on its southern border. ", "Others lawmakers charged that continued U.S. support for the coalition was not improving coalition behavior but damaging the U.S. reputation for upholding commitments to international law and human rights. Legislation seeking to limit U.S. arms sales to Saudi Arabia was not enacted in the 114 th Congress, but marked the beginning of the broader congressional debate that has continued.", "As the Trump Administration prepared to assume office, human rights organizations and aid groups were pressing Congress to become more attuned to the growing humanitarian crisis in Yemen. Though the Obama Administration had taken some steps, particularly in late 2016, to limit U.S.-coalition cooperation and restrict deliveries of PGMs to Saudi Arabia, nongovernmental groups deemed such action as insufficient. According to Human Rights Watch, \"Whatever conditionality the Obama administration thought it had created\u2014in holding up the transfer of precision munitions near the tail end of Obama's term and suspending cluster munition transfers earlier\u2014ultimately did not have meaningful impact in reining in the continued Saudi-led coalition attacks on civilians.\""], "subsections": []}]}, {"section_title": "Congress, the Trump Administration, and Yemen (2017-2018)", "paragraphs": [], "subsections": [{"section_title": "2017", "paragraphs": ["From the beginning of his Administration, President Donald Trump has signaled strong support for the Saudi-led coalition's operations in Yemen as a bulwark against Iranian regional interference. He initiated a review of U.S. policy toward Yemen, including President Obama's October 2016 restrictions on U.S. arms sales and intelligence sharing to the coalition. On March 19, 2017, just prior to his visit to Saudi Arabia, President Trump notified Congress that he was proceeding with three proposed direct commercial sales of precision guided munitions technology deferred by the Obama Administration, subject to congressional review. ", "In May 2017, the Administration officially notified Congress of its intention to proceed with proposed sales of precision guided munitions technologies that the Obama Administration had deferred, while announcing plans to increase training for Saudi Arabia's air force on both targeting and the Law of Armed Conflict. Congress debated another resolution of disapproval ( S.J.Res. 42 ) of these proposed PGM sales in June 2017 (see below). After completing the policy review in July 2017, President Trump directed his Administration \"to focus on ending the war and avoiding a regional conflict, mitigating the humanitarian crisis, and defending Saudi Arabia's territorial integrity and commerce in the Red Sea.\"", "As President Trump entered office, the dynamics of the conflict in Yemen were changing, and the coalition launched a new offensive along Yemen's 280-mile western coastal plain ultimately aimed at taking the strategic Houthi-held port city of Hudaydah. In early 2017, the coalition's gradual advance toward Hudaydah, coupled with an ongoing deterioration in humanitarian conditions, sparked some Members of Congress to implore the Administration to improve aid access and negotiate a cease-fire. In March 2017, several House Members wrote a letter to then-Secretary of State Rex Tillerson urging him to \"use all U.S. diplomatic tools to help open the Yemeni port of Hodeida [Hudaydah] to international humanitarian aid organizations.\" A month later, another group of House Members wrote to President Trump stating that Congress should approve any new U.S. support to the coalition amid its offensive against Hudaydah.", "On June 13, 2017, the Senate debated another resolution ( S.J.Res. 42 ) to disapprove of three direct commercial sales of PGMs to Saudi Arabia. During Senate floor consideration over the motion to discharge the Senate Foreign Relations Committee from further consideration of S.J.Res. 42 , Members once again weighed various issues, such as the U.S.-Saudi bilateral relationship, countering Iran, and limiting U.S. involvement in the war in Yemen. Some lawmakers suggested that U.S. arms sales and military support to the coalition had enabled alleged violations of international humanitarian law, while others argued that U.S. support to the coalition improved its effectiveness and helps minimize civilian casualties. ", "For example, during floor debate, Senator Graham argued that \"If we are worried about collateral damage in Yemen, I understand the concern. Precision weapons would help that cause, not hurt it.\" Senator Murphy retorted, saying \"What we are asking for is to hold off on selling these precision-guided munitions until we get some clear promise\u2014some clear assurance\u2014from the Saudis that they are going to use these munitions only for military purposes and that they are going to start taking steps\u2014real steps, tangible steps\u2014to address the humanitarian crisis.\" On June 13, 2017, the Senate voted to reject the motion to discharge the Senate Foreign Relations Committee from further consideration (47-53, Record Vote 143), and a companion resolution was not taken up in the House ( H.J.Res. 102 ).", "Representative Ro Khanna introduced a concurrent resolution ( H.Con.Res. 81 ) pursuant to the War Powers Resolution ( P.L. 93-148 ) in a bid to end U.S. support for the coalition's military intervention. After consultation between House leaders and supporters of the resolution on a compromise approach, the House agreed to delay expedited consideration of the resolution until after the November 2016 election and then adopted a nonbinding alternative ( H.Res. 599 , 366-30, 1 Present, Roll no. 623). ", "In his first year in office, while President Trump sought to improve relations with Saudi Arabia, counter Iran, and increase U.S. counterterrorism activity in Yemen, his Administration also at times took strong positions on the need for members of the coalition to improve humanitarian access, pursue a settlement to the conflict, and take measures to prevent civilian casualties.", "After a Houthi-fired missile with alleged Iranian origins landed deep inside Saudi Arabia in November 2017, the coalition instituted a full blockade of all of Yemen's ports, including the main port of Hudaydah, exacerbating the country's humanitarian crisis. The White House issued four press statements on the conflict between November 8 and December 8, including a statement on December 6 in which President Trump called on Saudi Arabia to \"completely allow food, fuel, water, and medicine to reach the Yemeni people who desperately need it. This must be done for humanitarian reasons immediately.\"", "On December 20, 2017, the Saudi-led coalition announced that it would end its blockade of Hudaydah port for a 30-day period and permit the delivery of four U.S.-funded cranes to Yemen to increase the port's capability to off-load commercial and humanitarian goods. The next day, the White House issued a statement welcoming \"Saudi Arabia's announcement of these humanitarian actions in the face of this major conflict.\""], "subsections": []}, {"section_title": "2018", "paragraphs": ["As the Saudi-led coalition intervention entered its fourth year, some in the Senate also proposed use of the War Powers Resolution as a tool for ending U.S. support for the coalition's military intervention. On February 28, 2018, Senator Bernie Sanders introduced S.J.Res. 54 , a joint resolution to \"direct the removal of United States Armed Forces from hostilities in the Republic of Yemen that have not been authorized by Congress (except for those U.S. forces engaged in counterterrorism operations directed at al Qaeda or associated forces).\" Efforts in the Senate followed a late 2017 attempt in the House (see Table 1 below), in which a concurrent resolution directing the President to remove U.S. forces from Yemen was tabled in favor of a House-passed nonbinding resolution. ", "Throughout 2018, between Congress and the Trump Administration and within Congress itself, there was disagreement as to whether U.S. forces assisting the Saudi-led coalition have been introduced into active or imminent hostilities for purposes of the War Powers Resolution. Some Members claimed that by providing support to the Saudi-led coalition, U.S. forces have been introduced into a \"situation where imminent involvement in hostilities is clearly indicated\" based on the criteria of the War Powers Resolution. The Trump Administration disagreed. In February 2018, the Acting Department of Defense General Counsel wrote to Senate leaders describing the extent of current U.S. support , and reported that \"the United States provides the KSA-led coalition defense articles and services, including air-to-air refueling; certain intelligence support; and military advice, including advice regarding compliance with the law of armed conflict and best practices for reducing the risk of civilian casualties.\" ", "On March 20, 2018, the Senate considered S.J.Res. 54 on the floor. During debate, arguments centered on a number of issues, ranging from concern over exacerbating Yemen's humanitarian crisis to reasserting the role of Congress in authorizing the use of armed force abroad. After then-Foreign Relations Committee Chairman Senator Bob Corker promised to propose new legislation and hold hearings scrutinizing U.S. policy in Yemen, a majority of Senators voted to table a motion to discharge the Foreign Relations committee from further consideration of S.J.Res. 54 . Senator Robert Menendez made remarks expressing conditional support for Senator Corker's approach, a view shared by some other Senators who voted to table the motion. ", "The Foreign Relations Committee held a hearing on Yemen a month later. In parallel testimony before Congress, U.S. defense officials stated that while the United States refueled Saudi aircraft and provided advice on targeting techniques, CENTCOM did not track coalition aircraft after they were refueled and did not provide advice on specific targets. Then-Assistant Secretary of Defense for International Security Affairs Robert S. Karem testified that \"It's correct that we do not monitor and track all of the Saudi aircraft aloft over Yemen.\" During the same hearing, U.S. officials acknowledged that pressure from Congress has altered how the Administration deals with the coalition over the Yemen conflict. Acting Assistant Secretary of State for Near Eastern Affairs David Satterfield told Senator Todd Young and the SFRC the following:", "Senator, your efforts, the efforts of your colleagues in this body and on this Committee have been exceedingly helpful in allowing the Administration to send a message from whole of government regarding the very specific concerns we have over any limitations, restrictions, constraints on the ability of both humanitarian and commercial goods specifically to include fuel to have unrestricted and expeditious entry into Yemen. And that messaging which comes from us, the Executive Branch, also comes from this body is extremely important.", "After the promised hearing, the Senate Foreign Relations Committee also proposed new legislation to place conditions on U.S. assistance to the coalition. In May, the committee reported S.J.Res. 58 to the Senate; it would have prohibited the obligation or expenditure of U.S. funds for in-flight refueling operations of Saudi and Saudi-led coalition aircraft that were not conducting select types of operations if certain certifications cannot be made and maintained. ", "The Senate Armed Services Committee incorporated the provisions of the SFRC-reported text of S.J.Res. 58 as Section 1266 of the version of the FY2019 National Defense Authorization Act (NDAA) that it reported to the Senate on June 5, 2018 ( S. 2987 ). The provision was modified further and passed by both the House and Senate as Section 1290 of the conference version of the FY2019 NDAA ( H.R. 5515 ). It was signed into law as P.L. 115-232 in mid-August, giving the Administration until mid-September 2018 to make certain certifications. In a statement accompanying the President's signing of P.L. 115-232 into law, President Trump objected to provisions such as Section 1290, stating the Administration's view that such provisions \"encompass only actions for which such advance certification or notification is feasible and consistent\" with \"[his] exclusive constitutional authorities as Commander in Chief and as the sole representative of the Nation in foreign affairs.\"", "As Congress continued to question the role of the United States in supporting coalition operations in Yemen, the pace and scale of fighting on the ground increased dramatically by the summer of 2018. On June 12, 2018, the Saudi-led coalition launched \"Operation Golden Victory,\" aimed at retaking the Red Sea port city of Hudaydah. As coalition forces engaged Houthi militants in and around Hudaydah, humanitarian organizations warned that if port operation ceased, famine could become widespread throughout northern Yemen. On June 12, nine Senators wrote a letter to Secretary of State Pompeo and then-Secretary of Defense Mattis saying, \"We are concerned that pending military operations by the UAE and its Yemeni partners will exacerbate the humanitarian crisis by interrupting delivery of humanitarian aid and damaging critical infrastructure. We are also deeply concerned that these operations jeopardize prospects for a near-term political resolution to the conflict.\" ", "Several weeks later, Senator Robert Menendez, the ranking member on the Senate Foreign Relations Committee, placed a hold on a potential U.S. sale of precision guided munitions to Saudi Arabia and the United Arab Emirates. In a June 28 letter to Secretary of State Pompeo and Secretary of Defense Mattis, Senator Menendez said, ", "I am not confident that these weapons sales will be utilized strategically as effective leverage to push back on Iran's actions in Yemen, assist our partners in their own self-defense, or drive the parties toward a political settlement that saves lives and mitigates humanitarian suffering\u2026. Even worse, I am concerned that our policies are enabling perpetuation of a conflict that has resulted in the world's worst humanitarian crisis.", "On August 9, the coalition conducted an airstrike that hit a bus in a market near Dahyan, Yemen, in the northern Sa'ada governorate adjacent to the Saudi border. The strike reportedly killed 51 people, 40 of whom were children. The coalition claims that its airstrike was a \"legitimate military operation\" and conducted in response to a Houthi missile attack on the Saudi city of Jizan a day earlier that killed a Yemeni national in the kingdom. The U.S. State Department called on the Saudi-led coalition to conduct a \"thorough and transparent investigation into the incident.\" ", "Several Members of Congress wrote to the Administration seeking additional information regarding U.S. operations in the wake of the August 2018 coalition strike at Dahyan. Several Senators also submitted an amendment to the FY2019 Defense Department appropriations act ( H.R. 6157 ) that would have prohibited the use of funds made available by the act to support the Saudi-led coalition operations in Yemen until the Secretary of Defense certifies in writing to Congress that the coalition air campaign \"does not violate the principles of distinction and proportionality within the rules for the protection of civilians.\" The provision did not apply to support for ongoing counterterrorism operations against Al Qaeda and the Islamic State in Yemen.", "On September 12, Secretary of State Mike Pompeo issued a certification that would allow the use of FY2019 defense funds to support in-flight refueling of coalition aircraft to continue, per the terms of Section 1290 (see discussion above) of the FY2019 National Defense Authorization Act (NDAA, P.L. 115-232 ). Some Members of Congress criticized the Administration's actions, asserting that the coalition has not met the act's specified benchmarks for avoiding civilian casualties in Yemen. ", "On September 26, several House Members introduced H.Con.Res. 138 , which sought to direct the President to remove U.S. Armed Forces from hostilities in Yemen, except for Armed Forces engaged in operations authorized under the 2001 Authorization for Use of Military Force, within 30 days unless and until a declaration of war or specific authorization for such use has been enacted into law. In response to a similar initiative in the Senate, the Administration submitted a detailed argument expressing its view that U.S. forces supporting Saudi-led coalition operations are not engaged in hostilities in Yemen.", "By late 2018, the prospect of widespread famine in Yemen coupled with international reprobation over the killing of Jamal Khashoggi pressured the Administration and the coalition to accelerate moves toward peace talks. On October 30, then-Secretary of Defense James Mattis and Secretary of State Mike Pompeo called for all parties to reach a cease-fire and resume negotiations. On November 9, Secretary Mattis further announced that effective immediately, the coalition would use its own military capabilities\u2014rather than U.S. capabilities\u2014to conduct in-flight refueling in support of its operations in Yemen. ", "Though fighting continued along several fronts, on December 13, 2018, Special Envoy of the United Nations Secretary-General for Yemen Martin Griffiths brokered a cease-fire centered on the besieged Red Sea port city of Hudaydah (Yemen's largest port). As part of the U.N.-brokered deal (known as the Stockholm Agreement), the coalition and the Houthis agreed to redeploy their forces outside Hudaydah city and port. The United Nations agreed to chair a Redeployment Coordination Committee (RCC) to monitor the cease-fire and redeployment. The international community praised the Stockholm Agreement as a first step toward broader de-escalation and a possible road map to a comprehensive peace settlement. ", "Also on December 13, 2018, the Senate amended and passed S.J.Res. 54 (56-41), which, among other things, directed the President to remove U.S. forces from hostilities in Yemen, except U.S. forces engaged in operations directed at Al Qaeda or associated forces. In the House, lawmakers twice narrowly approved rules resolutions containing provisions that made similar resolutions directing the President to remove U.S. forces from hostilities in Yemen ineligible for expedited consideration ( H.Res. 1142 and H.Res. 1176 ). On December 13, the Senate also passed S.J.Res. 69 , which, among other things, expresses the sense of the Senate that Saudi Crown Prince Mohammed bin Salman is responsible for the murder of the journalist Jamal Khashoggi and that there is no statutory authorization for United States involvement in hostilities in the Yemen civil war."], "subsections": []}, {"section_title": "Analysis", "paragraphs": ["The 115th Congress frequently debated the extent and terms of the United States' involvement in the ongoing conflict in Yemen. Lawmakers questioned the extent to which successive Administrations have adhered to existing law related to providing security assistance, including sales or transfers of defense goods and defense services, while upholding international human rights standards (e.g., 22 U.S.C. \u00a72754 or 22 U.S.C. \u00a72304). They also enacted new legislation that would condition or prohibit the use of U.S. funds for some activities related to Yemen and extend legislative oversight over the executive branch's policy toward the war in Yemen. ", "While the House and its Rules Committee voted to make resolutions with respect to war powers and Yemen ineligible for expedited consideration, the Senate passage of S.J.Res. 54 at the conclusion of the 115 th Congress demonstrated growth in congressional opposition to U.S. involvement in the Saudi-led coalition intervention in Yemen relative to previous years. Over time, the balance of votes shifted in favor of measures that could be described as critical or restrictive of U.S. support for Saudi-led coalition operations with regard to arms sales, oversight measures, and war powers measures.", "Nevertheless, after nearly four years of conflict, it remains difficult to identify the locus of congressional consensus about Yemen. Many in the House and Senate state that they seek to preserve cooperative U.S.-Saudi relations in broad terms and express concern about Iranian activities in Yemen, while also expressing support for expanded humanitarian access and efforts to bring the conflict to a close. Some lawmakers express opposition to the intervention and U.S. involvement on moral grounds, citing errant coalition airstrikes and the prospect of a looming famine. Others argue the conflict's continuation creates opportunities for Iran and Sunni Islamist extremist groups to expand their influence and operations in Yemen. Still others may have come to oppose continued U.S. support for the intervention based on factors not directly related to Yemen itself, including the opaque mechanisms used by the executive branch to support the coalition and/or anger with the Saudi government over the killing of Jamal Khashoggi. ", "It remains to be seen whether recent congressional consideration of Yemen legislation is a harbinger of broader efforts by Members of Congress to reassert congressional prerogatives toward U.S. foreign policy writ large. Measures to enhance oversight over U.S. support to the Saudi-led coalition and U.S. strategy toward Yemen have received broad bipartisan support, while proponents of other recently considered arms sales and war powers measures have used mechanisms to ensure privileged consideration of their proposals. ", "The 116 th Congress may continue to debate U.S. support for the Saudi-led coalition and Saudi Arabia's conduct of the war in Yemen. It is uncertain whether lawmakers may also broaden the scope of their oversight activities beyond the current conflict to more fully address the root causes of Yemen's chronic instability. Even if the United States is no longer an active supporter of coalition military efforts, Yemen itself has been devastated by years of war and remains the world's worst humanitarian crisis. Experts expect Yemen to require sustained international attention and financial assistance in order to help local actors reach and sustain a political settlement. This suggests that Congress may grapple with questions about the conduct of U.S. diplomacy, the provision of U.S. security support, and the investment of U.S. assistance and defense funds for years to come."], "subsections": []}]}]}}
{"id": "R45478", "title": "Unemployment Insurance: Legislative Issues in the 116th Congress", "released_date": "2019-05-03T00:00:00", "summary": ["The 116th Congress has begun to consider several issues related to two programs in the unemployment insurance (UI) system: Unemployment Compensation (UC) and Unemployment Compensation for Federal Employees (UCFE). The lapse in federal appropriations that occurred from December 22, 2018, to January 25, 2019, created a partial government shutdown. As a result, agencies without funding furloughed many federal employees, and many federal employees excepted from furlough were working without pay during the lapse in appropriations. Furloughed federal employees may be eligible for UCFE benefits. Private-sector workers who are furloughed or laid off due to the partial government shutdown because they were employed by government contractors may be eligible for regular UC benefits. But, according to guidance from the U.S. Department of Labor (DOL), excepted federal employees who are performing services (without pay) would generally be ineligible for UCFE benefits based on states' definitions of \"unemployment.\" In this climate, there has been congressional interest in assisting furloughed and excepted federal employees through the UI system.", "UI legislative issues currently facing the 116th Congress include the following:", "the effects of the FY2019 sequester order on UI programs and benefits, the role of UI in providing temporary income replacement during a government shutdown, state fiscal concerns related to financing UC benefits, reemployment services and eligibility assessments (RESEA), potential consideration of the UI proposals included in the President's FY2020 budget, and congressional oversight related to a proposed UC drug testing rule reissued by DOL after previously being disapproved using the Congressional Review Act.", "In the 116th Congress, policymakers have introduced legislation related to UCFE benefits in response to the recent partial government shutdown (S. 165, H.R. 720, H.R. 725, and H.R. 1117), legislation to provide self-employment and relocation assistance benefits (S. 136 and H.R. 556), legislation to require that states consider an individual who quit employment because of sexual harassment, domestic violence, sexual assault, or stalking to be eligible for UC benefits (H.R. 1585), and legislation to amend Title III of the Social Security Act to extend RESEA to all UC claimants (H.R. 1759).", "For a brief overview of UC, see CRS In Focus IF10336, The Fundamentals of Unemployment Compensation."], "reports": {"section_title": "", "paragraphs": ["T he unemployment insurance (UI) system has two primary objectives: (1) to provide temporary, partial wage replacement for involuntarily unemployed workers and (2) to stabilize the economy during recessions. In support of these goals, several UI programs provide benefits for eligible unemployed workers."], "subsections": [{"section_title": "Overview of Unemployment Insurance Programs", "paragraphs": ["In general, when eligible workers lose their jobs, the joint federal-state Unemployment Compensation (UC) program may provide up to 26 weeks of income support through regular UC benefit payments. UC benefits may be extended for up to 13 weeks or 20 weeks by the Extended Benefit (EB) program if certain economic situations exist within the state. As of the date of this publication, although both the UC and EB programs are authorized, no state is in an active EB period. For an overview of EB, see the Appendix ."], "subsections": [{"section_title": "Unemployment Compensation Program", "paragraphs": ["The Social Security Act of 1935 (P.L. 74-271) authorizes the joint federal-state UC program to provide unemployment benefits. Most states provide up to a maximum of 26 weeks of UC benefits. Former federal workers may be eligible for unemployment benefits through the Unemployment Compensation for Federal Employees (UCFE) program. Former U.S. military servicemembers may be eligible for unemployment benefits through the Unemployment Compensation for Ex-Servicemembers (UCX) program. The Emergency Unemployment Compensation Act of 1991 ( P.L. 102-164 ) provides that ex-servicemembers be treated the same as other unemployed workers with respect to benefit levels, the waiting period for benefits, and benefit duration.", "Although federal laws and regulations provide broad guidelines on UC benefit coverage, eligibility, and determination, the specifics regarding UC benefits are determined by each state. This results in essentially 53 different programs. Generally, UC eligibility is based on attaining qualified wages and employment in covered work over a 12-month period (called a base period) prior to unemployment. All states require a worker to have earned a certain amount of wages or to have worked for a certain period of time (or both) within the base period to be eligible to receive any UC benefits. The methods states use to determine eligibility vary greatly. Most state benefit formulas replace approximately half of a claimant's average weekly wage up to a weekly maximum. Additionally, each state's UC law requires individuals to have lost their jobs through no fault of their own, and recipients must be able to work, available for work, and actively seeking work. These eligibility requirements help ensure that UC benefits are directed toward workers with significant labor market experience and who are unemployed because of economic conditions."], "subsections": [{"section_title": "UC Financing", "paragraphs": ["The UC program is financed by federal taxes under the Federal Unemployment Tax Act (FUTA) and by state payroll taxes under each state's State Unemployment Tax Act (SUTA). The 0.6% effective net FUTA tax paid by employers on the first $7,000 of each employee's earnings (equaling no more than $42 per worker per year) funds federal and state administrative costs, loans to insolvent state UC accounts, the federal share (50%) of EB payments, and state employment services.", "SUTA taxes on employers are limited by federal law to funding regular UC benefits and the state share (50%) of EB payments. Federal law requires that the state tax be on at least the first $7,000 of each employee's earnings and that the maximum state tax rate be at least 5.4%. Federal law also requires each employer's state tax rate to be based on the amount of UC paid to former employees (known as \"experience rating\"). Within these broad requirements, each state has great flexibility in determining its SUTA structure. Generally, the more UC benefits paid out to its former employees, the higher the tax rate of the employer, up to a maximum established by state law. Funds from FUTA and SUTA are deposited in the appropriate accounts within the Unemployment Trust Fund (UTF). "], "subsections": []}]}]}, {"section_title": "Unemployment Insurance Benefits and the Sequester", "paragraphs": ["The sequester order required by the Budget Control Act of 2011 (BCA; P.L. 112-25 ) and implemented on March 1, 2013 (after being delayed by P.L. 112-240 ), affected some but not all types of UI expenditures. Regular UC, UCX, and UCFE payments are not subject to the sequester reductions. EB and most forms of administrative funding are subject to the sequester reductions."], "subsections": [{"section_title": "FY2019 Sequester of Unemployment Insurance Benefits", "paragraphs": ["The FY2019 sequestration order requires a 6.2% reduction in all nonexempt nondefense mandatory expenditures, but no sequestration reductions are applicable to discretionary programs, projects, and activities. As a result, EB expenditures are required to be reduced 6.2% (only on the federal share of EB benefits) for weeks of unemployment during FY2019. As of January 22, 2019, EB has not been activated in any state during FY2019."], "subsections": []}]}, {"section_title": "Unemployment Insurance and the Recent Partial Government Shutdown", "paragraphs": ["The lapse in federal appropriations that occurred from December 22, 2018, until January 25, 2019, caused a partial government shutdown. As a result, during this lapse in appropriations, agencies without funding furloughed federal employees, and many federal employees excepted from furlough were working without pay. ", "Furloughed federal employees may be eligible for UCFE benefits. States are required to operate the UCFE program under the same terms and conditions that apply to regular state UC. Therefore, UCFE eligibility is determined under the laws of the state in which an individual's official duty station in federal civilian service is located. Federal employees who are in furlough status on account of a government shutdown are generally treated by state law as laid off with an expectation of recall. Depending on state laws and regulations, the state may have an option to not require federal employees to search for work given an expected recall.", "However, according to guidance from U.S. Department of Labor (DOL), excepted federal employees who are performing services (but working without pay) would generally be ineligible for UCFE benefits based on states' definitions of \"unemployment.\"", "Private-sector workers who are furloughed or laid off due to the partial government shutdown because they were employed by government contractors or other businesses may be eligible for regular UC benefits. UC eligibility for these workers would be based on the requirements set out under the state laws in the state where they had worked.", "In this climate, there has been congressional interest in assisting furloughed and excepted federal employees through the UI system. For example, as described below in the section on \" Unemployment Compensation for Excepted Federal Employees During a Government Shutdown ,\" there are proposals to provide new authority to pay UCFE benefits to excepted federal workers who are working without pay.", "The most recent lapse in federal appropriations began December 22, 2018, and ended on January 25, 2019, with the enactment of H.J.Res. 28 . Because retroactive pay for furloughed and excepted federal employees was authorized under S. 24 , the Government Employee Fair Treatment Act of 2019 (enacted January 16, 2019), UCFE payments made to federal employee claimants during this lapse in appropriations may be deemed an overpayment, subject to state UC laws regarding overpayment recovery. According to guidance from the Office of Personnel Management on this issue", "The state UI agency will determine whether or not an overpayment exists and, generally, the recovery of the UCFE overpayment is a matter for state action under its law; however, some state UI laws require the employer to recover such overpayment by collecting the overpayment amount from the employee. The Federal and state agencies will need to coordinate to determine the required action in accordance with the individual state UI law. Federal agencies are encouraged to develop lists or spreadsheets that can be provided to the state(s) containing the employees' names, social security numbers, and the amounts and periods of time covered by the retroactive payment."], "subsections": []}, {"section_title": "State UC Loans and Solvency Concerns", "paragraphs": ["If a recession is deep enough and if state unemployment tax (SUTA) revenue is inadequate for long periods of time, states may have insufficient funds to pay for UC benefits. Federal law, which requires states to pay these benefits, provides a loan mechanism within the UTF framework that an insolvent state may use to meet its UC benefit payment obligations. States must pay back these loans. If the loans are not paid back quickly (depending on the timing of the beginning of the loan period), states may face interest charges, and states' employers may face increased net FUTA rates until the loans are repaid.", "The U.S. Virgin Islands is the only jurisdiction with an outstanding loan. As of January 18, 2019, it had an outstanding loan of $68.4 million from the federal accounts within the UTF. At the end of 2017, fewer than half of states (24) had accrued enough funds in their accounts to meet or exceed the minimally solvent standard of an average high cost multiple (AHCM) of 1.0 in order to be prepared for a recession."], "subsections": []}, {"section_title": "Reemployment Services and Eligibility Assessments", "paragraphs": ["Beginning in FY2015, DOL funded state efforts \"addressing individual reemployment needs of UI claimants, and working to prevent and detect UI overpayments\" through the voluntary Reemployment Services and Eligibility Assessment (RESEA) program. RESEA provides funding to states to conduct in-person interviews with selected UI claimants to (1) assure that claimants are complying with the eligibility rules, (2) determine if reemployment services are needed for the claimant to secure future employment, (3) refer the individual to reemployment services as necessary, and (4) provide labor market information that addresses the claimant's specific needs. Section 30206 of P.L. 115-123 codified the authority for DOL to administer a RESEA program. It also set out various requirements for states to use certain types of evidence-based interventions for UI claimants under RESEA and allocated discretionary funding for RESEA across three categories (base funding, outcome payments, and research and technical assistance). State RESEA programs must include reasonable notice and accommodations to participating UI beneficiaries. ", "On April 4, 2019, DOL published a proposed methodology to allocate base RESEA funds and outcome payments. DOL requested state and public comments on this proposal by May 6, 2019. "], "subsections": []}, {"section_title": "President's Budget Proposal for FY2020", "paragraphs": ["The President's budget for FY2020 proposes changes to several aspects of the UI system. It would create a new required standard for state account balances within the UTF and a new benefit entitlement for paid parental leave financed through state unemployment taxes. The President's FY2020 budget also proposes a set of additional integrity measures, including the required use of certain databases to confirm UC eligibility and requiring Social Security Disability Insurance (SSDI) benefits offset UI benefits. "], "subsections": [{"section_title": "New Minimum Account Balance for State UTF Accounts", "paragraphs": ["The President's budget proposal for FY2020 would require states to maintain a minimum level of solvency in their UTF account balances to be at least half (0.5) of the state's AHCM. The proposal would alter the rules for calculating the net FUTA rate, requiring a higher net FUTA rate on a state's employers if that state maintained an AHCM of less than 0.5 on January 1 of two or more consecutive years. The additional FUTA revenue would be deposited into the state UTF account and would be terminated once the state met the 0.5 AHCM criteria. "], "subsections": []}, {"section_title": "Paid Family Leave Benefit", "paragraphs": ["The President's budget proposal for FY2020 would require states to establish a paid parental leave benefit by 2020, using the UC program as its base for an administrative framework. States would be required to provide six weeks of benefits to a worker on leave or otherwise absent from work for the birth or adoption of the worker's child. States would have discretion to determine the parameters of eligibility and financing for this new paid parental leave benefit."], "subsections": []}, {"section_title": "UI Program Integrity", "paragraphs": [], "subsections": [{"section_title": "Requirements to Use Particular Data Sources for Program Integrity", "paragraphs": ["The President's 2020 budget would require states to use three specific data sources to confirm an individual's eligibility for UC benefits: the State Information Data Exchange System (SIDES, administered by Information Technology Support Center [ITSC] and DOL); the National Directory for New Hires (NDNH, administered by the Department of Health and Human Services); and the Prisoner Update Processing System (PUPS, administered by the Social Security Administration). "], "subsections": []}, {"section_title": "Additional Integrity Proposals", "paragraphs": ["The proposal would create several additional integrity measures, including", "giving the Secretary of Labor the authority to implement new corrective action measures in response to poor state administrative performance within the program; allowing states to retain a percentage of UC overpayments for program integrity use; requiring states to deposit all UC penalty and interest payments into a special state fund, with these funds required to be used for improving state UI administration as well as providing reemployment services for UI claimants; and offsetting SSDI benefits to account for concurrent receipt of UI benefits."], "subsections": []}]}]}, {"section_title": "2018 DOL Proposed Rule on UC Drug Testing", "paragraphs": ["Section 2105 of the Middle Class Tax Relief and Job Creation Act of 2012 ( P.L. 112-96 ; February 22, 2012) amended federal law to allow states to conduct two types of drug testing. First, it expanded the long-standing state option to disqualify UC applicants who were discharged from employment with their most recent employer (as defined under state law) for unlawful drug use by allowing states to drug test these applicants to determine UC benefit eligibility or disqualification. Second, it allowed states to drug test UC applicants for whom suitable work (as defined under state law) is available only in an occupation that regularly conducts drug testing, to be determined under new regulations issued by the Secretary of Labor.", "As required by\u00a0 P.L. 112-96 , on August 1, 2016, DOL promulgated\u00a0 20 C.F.R. Part 620 , \u00a0a new rule to implement the provisions of the law relating to the drug testing of UC applicants for whom suitable work (as defined under state law) is available only in an occupation that regularly conducts drug testing.", "Amid concerns voiced by stakeholders about the 2016 DOL rule, Congress repealed this UC drug testing rule using the Congressional Review Act (CRA) via H.J.Res. 42 / P.L. 115-17 . On November 5, 2018, DOL published a Notice of Proposed Rulemaking (NPRM)\u00a0to reissue the rule identifying occupations that regularly conduct drug testing for purposes of Section 2105 of\u00a0 P.L. 112-96 . The CRA prohibits an agency from reissuing the rule in \"substantially the same form\" or issuing a \"new rule that is substantially the same\" as the disapproved rule, \"unless the reissued or new rule is specifically authorized by a law enacted after the date of the joint resolution disapproving the original rule.\" Notably, this is the first time an agency has proposed to reissue a rule after the original version was disapproved under the CRA.", "According to the 2018 NPRM, DOL has addressed the reissue requirements of the CRA by proposing a substantially different and more flexible approach to the statutory requirements than the 2016 Rule, enabling states to enact legislation to require drug testing for a far larger group of UC applicants than the previous rule permitted. This flexibility is intended to respect the diversity of states' economies and the different roles played by employment drug testing in those economies.", "Comments on the proposed 2018 rule were required to be submitted by January 4, 2019."], "subsections": []}, {"section_title": "Legislative Proposals in the 116th Congress", "paragraphs": [], "subsections": [{"section_title": "Unemployment Compensation for Excepted Federal Employees During a Government Shutdown", "paragraphs": ["On January 16, 2019, Senator Richard Blumenthal introduced S. 165 , the Federal Unemployment Compensation Equity Act of 2019. This proposal would amend UCFE law and create a new permanent UCFE eligibility category for excepted federal employees who are unpaid but required to work during a government shutdown due to a lapse in appropriations. During any shutdown beginning on or after December 22, 2018, all excepted federal workers would be deemed eligible for UCFE benefits. Additionally, these employees would not be subject to a one-week waiting period (otherwise often required under state laws) before UCFE benefits were to be paid. ", "On January 23, 2019, Representative Debbie Dingell introduced H.R. 725 , the Pay Federal Workers Act. This proposal would also provide UCFE benefits in a similar manner to S. 165 , including permanently amending 5 U.S.C. Chapter 85 to provide federal authority for these benefits.", "On January 23, 2019, Representative Anthony Brown introduced H.R. 720 . This proposal would deem excepted federal employees during a government shutdown to be eligible for UCFE during FY2019. The authority to provide UCFE to these excepted workers would expire at the end of FY2019.", "On February 8, 2019, Representative Katie Hill introduced H.R. 1117 , the Shutdown Fairness Act of 2019. This proposal would deem excepted federal employees and unpaid military servicemembers during a government shutdown to be eligible for UCFE or UCX during FY2019. The authority to provide UCFE to these excepted workers would expire at the end of FY2019."], "subsections": []}, {"section_title": "Self-Employment and Relocation Assistance Benefits", "paragraphs": ["On January 15, 2019, Senator Ron Wyden and Representative Danny Davis introduced S. 136 and H.R. 556 , the Economic Ladders to End Volatility and Advance Training and Employment Act of 2019 (the ELEVATE Act) . Among other provisions, this proposal would establish new self-employment and relocation assistance benefits for unemployed workers to be administered by the Social Security Administration, in consultation with DOL. The self-employment assistance benefits would provide weekly income replacement (half of prior earnings up to the maximum weekly benefit amount in the state) for up to of 26 weeks to individuals. They would be available to individuals who are (1) eligible for any type of UI benefit; or ineligible for any type of UI benefit, but became involuntarily unemployed over the previous 12 weeks; or were previously self-employed, but lost a hiring contract, and (2) have a viable business plan approved by their state department of labor, workforce board, or the Small Business Administration. ", "Additionally, Section 3 of S. 136 and H.R. 556 would provide up to $2,000 (or more, depending on family size) to fund to up to 90% of certain relocation expenses for eligible individuals and their families. In order to be eligible for this relocation assistance, an individual must be a (1)\u00a0dislocated worker, (2) long-term unemployed individual, or (3) underemployed individual and also have filed a claim for relocation assistance and obtained suitable work with an expectation of obtaining such work in a new geographic region."], "subsections": []}, {"section_title": "Domestic Violence", "paragraphs": ["On March 7, 2019, Representative Karen Bass introduced H.R. 1585 , the Violence Against Women Reauthorization Act of 2019. Among many other provisions, Section 703 of H.R. 1585 would require states to consider an individual who quit employment because of sexual harassment, domestic violence, sexual assault, or stalking to be eligible for UC benefits. The House passed H.R. 1585 on April 4, 2019."], "subsections": []}, {"section_title": "Reemployment Services and Eligibility Assessments", "paragraphs": ["On March 14, 2019, Representative Stephanie Murphy introduced H.R. 1759 , the Building on Reemployment Improvements to Deliver Good Employment (BRIDGE) for Workers Act. This proposal would extend eligibility to any claimant of unemployment benefits, including those profiled as likely to exhaust benefits (rather than limiting eligibility to those who were profiled as likely to exhaust benefits). The House passed H.R. 1759 on April 9, 2019."], "subsections": [{"section_title": "Appendix. Extended Benefit Program", "paragraphs": ["The Extended Benefit (EB) program was established by the Federal-State Extended Unemployment Compensation Act of 1970 (EUCA; P.L. 91-373) (26 U.S.C. \u00a73304, note). EUCA may extend receipt of unemployment benefits (extended benefits) at the state level if certain economic conditions exist within the state. As of the date of this publication, EB is not active in any state.", "Extended Benefit Triggers", "The EB program is triggered when a state's insured unemployment rate (IUR) or total unemployment rate (TUR) reaches certain levels. All states must pay up to 13 weeks of EB if the IUR for the previous 13 weeks is at least 5% and is 120% of the average of the rates for the same 13-week period in each of the two previous years. States may choose to enact two other optional thresholds. (States may choose one, two, or none.) If the state has chosen one or more of the EB trigger options, it would provide the following:", "Option 1\u2014up to an additional 13 weeks of benefits if the state's IUR is at least 6%, regardless of previous years' averages. Option 2\u2014up to an additional 13 weeks of benefits if the state's TUR is at least 6.5% and is at least 110% of the state's average TUR for the same 13 weeks in either of the previous two years; up to an additional 20 weeks of benefits if the state's TUR is at least 8% and is at least 110% of the state's average TUR for the same 13 weeks in either of the previous two years.", "EB benefits are not \"grandfathered\" (phased out) when a state triggers \"off\" the program. When a state triggers \"off\" of an EB period, all EB benefit payments in the state cease immediately regardless of individual entitlement.", "The EB benefit amount is equal to the eligible individual's weekly regular UC benefits. Under permanent law, FUTA finances half (50%) of the EB payments and 100% of EB administrative costs. States fund the other half (50%) of EB benefit costs through their SUTA."], "subsections": []}]}, {"section_title": "Domestic Violence", "paragraphs": ["On March 7, 2019, Representative Karen Bass introduced H.R. 1585 , the Violence Against Women Reauthorization Act of 2019. Among many other provisions, Section 703 of H.R. 1585 would require states to consider an individual who quit employment because of sexual harassment, domestic violence, sexual assault, or stalking to be eligible for UC benefits. The House passed H.R. 1585 on April 4, 2019."], "subsections": []}, {"section_title": "Reemployment Services and Eligibility Assessments", "paragraphs": ["On March 14, 2019, Representative Stephanie Murphy introduced H.R. 1759 , the Building on Reemployment Improvements to Deliver Good Employment (BRIDGE) for Workers Act. This proposal would extend eligibility to any claimant of unemployment benefits, including those profiled as likely to exhaust benefits (rather than limiting eligibility to those who were profiled as likely to exhaust benefits). The House passed H.R. 1759 on April 9, 2019."], "subsections": []}]}]}}
{"id": "R45296", "title": "Housing Issues in the 115th Congress", "released_date": "2019-02-25T00:00:00", "summary": ["A variety of housing-related issues were active during the 115th Congress. These issues included topics related to housing finance, tax provisions related to housing, housing assistance and grant programs administered by the Department of Housing and Urban Development (HUD), and regulatory review efforts underway at HUD. In some cases, the 115th Congress considered or passed legislation related to certain housing issues, such as mortgage-related provisions enacted as part of broader financial \"regulatory relief\" legislation and particular housing-related tax provisions. In other cases, Congress conducted oversight or otherwise expressed interest in actions taken by HUD or other entities involved in housing, such as Fannie Mae and Freddie Mac.", "Many of the housing-related topics that were of interest during the 115th Congress are ongoing issues, though some involved particular actions that took place during the 115th Congress. Issues of interest during the Congress included the following:", "Housing finance issues included changes to certain mortgage-related requirements and other housing provisions included in broader financial legislation that became law in May 2018. Congress also expressed ongoing interest in certain issues related to the Federal Housing Administration (FHA): (1) a forthcoming final rule on FHA's requirements for insuring mortgages on condominiums and (2) the level of the mortgage insurance premiums charged by FHA. Comprehensive housing finance reform that would address the status of Fannie Mae and Freddie Mac is also an ongoing topic of interest, although the 115th Congress did not actively consider comprehensive housing finance reform legislation. Tax issues included changes to housing-related tax provisions in the tax revision law enacted at the end of 2017 (P.L. 115-97); extensions of other, temporary housing-related tax provisions through 2017 by the Bipartisan Budget Act of 2018 (P.L. 115-123); and changes to the low-income housing tax credit in the Consolidated Appropriations Act, 2018 (P.L. 115-141). Housing assistance issues included considerations related to HUD appropriations, ongoing initiatives or proposed changes to HUD rental assistance programs, committee consideration of legislation to reauthorize the Native American Housing Assistance and Self-Determination Act (NAHASDA), issues related to the housing response to presidentially declared major disasters, and a variety of introduced bills that were meant to address housing affordability issues in various ways. HUD began a variety of regulatory review efforts in keeping with Executive Order 13777, which directed federal agencies to evaluate existing regulations and identify opportunities for reform. Specific HUD actions included suspending a rule related to small-area fair market rents (the suspension has since been voided by a preliminary court injunction); initiating a broad review of manufactured housing regulations; suspending certain regulations governing how HUD funding recipients must comply with the requirement to affirmatively further fair housing; and publishing an Advanced Notice of Proposed Rulemaking seeking public comment on whether its regulations related to disparate impact and the Fair Housing Act should be amended.", "Housing and mortgage market conditions provide important context for these issues, although housing markets are generally local in nature and national housing market indicators do not necessarily accurately reflect conditions in specific communities. Generally speaking, owner-occupied housing markets in recent years have been characterized by rising house prices, relatively low levels of housing starts and housing inventory, and relatively strong home sales. Rising house prices combined with rising mortgage interest rates have raised concerns about the affordability of buying a home, although interest rates remain low by historical standards. Rental housing markets have also raised affordability concerns. Nearly 21 million renter households are considered to be cost burdened, meaning they spend more than 30% of their incomes on rent. The share of households who rent, rather than own, their homes has increased in the years since the housing market turmoil that began around 2007, contributing to lower rental vacancy rates and increasing rents. Increases in household income in recent years have generally not kept pace with increases in house prices or rents, contributing to affordability concerns."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["A variety of issues related to housing were active during the 115 th Congress, including issues related to housing finance, housing-related tax provisions, housing assistance and grant programs (including in response to presidentially declared major disasters), and actions undertaken by the Department of Housing and Urban Development (HUD) as part of its efforts to review existing department regulations. This report provides a high-level overview of the most prominent housing-related issues during the Congress, including brief background on each and discussion of legislative or other relevant activity. ", "This report is meant to provide a broad overview of major issues and is not intended to provide detailed information or analysis. However, it includes references to more in-depth CRS reports on the issues where possible. "], "subsections": []}, {"section_title": "Housing and Mortgage Market Conditions", "paragraphs": ["This section provides background on housing and mortgage market conditions to provide context for the housing policy issues discussed later in the report. This discussion of market conditions is at the national level; however, it is important to be aware that local housing market conditions can vary dramatically, and national housing market trends may not reflect the conditions in a specific area. Nevertheless, national housing market indicators can provide an overall sense of general trends in housing.", "For several years since the housing and financial market turmoil of the late 2000s, housing markets have been recovering from house price declines, high rates of mortgage foreclosures, and other symptoms of the housing crisis. While some areas of the country have not fully recovered, most housing market indicators have rebounded. For example, house prices have been increasing for several years, and in many areas have passed their pre-crisis peaks in nominal terms; foreclosure rates have generally declined to levels similar to the years preceding the housing market turmoil; and housing market activity in general is increasing. As many communities have recovered, other housing market conditions have received increased attention. Some of the most prominent considerations that are often discussed in relation to current housing markets include the following:", "Affordability of Both Owner-Occupied and Rental Housing: In many areas of the country, housing affordability has been an ongoing issue for both homebuyers and renters. House prices and rental costs have increased in recent years and have generally increased faster than incomes. Despite concerns about the affordability of owner-occupied housing, many metrics suggest that homeownership is currently relatively affordable by historical standards; however, such measures generally focus on the ability of households to afford monthly mortgage payments and do not consider other costs of purchasing a home, such as saving for a down payment. Housing Inventory: The available housing inventory is one factor that affects housing affordability, as too few homes available for sale or rent can increase home prices or rents. Limited inventory, particularly of modestly priced housing, appears to be impacting affordability and home sales in many housing markets. Relatively low levels of new home construction is one of the factors contributing to lower levels of housing inventory. Mortgage Access: The availability of mortgage credit tightened in the aftermath of the housing crisis, for a variety of reasons. While credit is not currently as tight as it was at the peak, some argue that it is still too difficult for some creditworthy households to obtain affordable mortgages. Others, however, argue that mortgage standards are loosening too much for certain types of mortgages.", "The following subsections provide an overview of selected indicators reflecting conditions in owner-occupied housing markets and the mortgage market, and rental markets, respectively, during the 115 th Congress. Some of the included graphics show housing market indicators over time; these graphics highlight the time period of the 115 th Congress to allow readers easily to see the levels and trends in these indicators during the Congress. In some cases, these graphics include data for the entire 115 th Congress (2017-2018), while in other cases data covering the full time period of the 115 th Congress were not available as of the date of the final update of this report. "], "subsections": [{"section_title": "Owner-Occupied Housing Markets and the Mortgage Market", "paragraphs": ["Over the past few years, on a national level, markets for owner-occupied housing have generally been characterized by rising home prices, low inventory levels, housing starts that are increasing but remain relatively low by historical standards, and home buying activity that is beginning to return to pre-crisis levels. Housing starts remain below the levels seen in the mid-1990s and early 2000s. For the most part, mortgage foreclosures and negative equity, which characterized the housing and economic turmoil that began around 2007, have eased. However, national statistics can mask the experience of local housing markets, and not all communities have recovered equally from the effects of the housing crisis.", "Most homebuyers take out a mortgage to purchase a home. Therefore, owner-occupied housing markets are closely linked to the mortgage market, although they are not the same. The ability of prospective homebuyers to obtain mortgages and the costs of those mortgages impact housing demand and affordability."], "subsections": [{"section_title": "House Prices", "paragraphs": ["As shown in Figure 1 , on a national basis, nominal house prices have been increasing on a year-over-year basis in each quarter since the beginning of 2012. Year-over-year house price changes have been above 5% in each quarter since the second quarter of 2015 and over 6% since mid-2017. These increases follow almost five years of house price declines in the years during and surrounding the economic recession of 2007-2009 and associated housing market turmoil.", "House prices vary greatly across local housing markets. In some areas of the country, prices have fully regained or even exceeded their pre-recession levels in nominal terms, while in other areas prices remain below those levels. Furthermore, house price increases affect participants in the housing market differently. Rising prices reduce affordability for prospective homebuyers, but they are generally beneficial for current homeowners, who benefit from the increased home equity that accompanies them (although rising house prices also have the potential to negatively impact affordability for current homeowners through increased property taxes)."], "subsections": []}, {"section_title": "Mortgage Interest Rates", "paragraphs": ["For several years, mortgage interest rates have been low by historical standards. As shown in Figure 2 , average mortgage interest rates have been consistently below 5% since May 2010 and have been below 4% for several stretches during that time. Lower interest rates increase mortgage affordability and make it easier for some households to purchase homes or refinance their existing mortgages.", "Mortgage interest rates have generally increased since the start of 2018, though they decreased somewhat in December 2018, ending the year at 4.64%. Rising interest rates may make mortgages less affordable for some households, contributing to homeownership affordability pressures."], "subsections": []}, {"section_title": "Owner-Occupied Housing Affordability", "paragraphs": ["As house prices have been rising for several years on a national basis, and as mortgage interest rates have also begun to rise, concerns about the affordability of owner-occupied housing have increased. Incomes have also been rising in recent years, helping to mitigate some affordability pressures, but in general incomes have not been rising as quickly as house prices. ", "Despite rising house prices, many metrics of housing affordability suggest that owner-occupied housing is currently relatively affordable. These metrics generally measure the share of income that a median-income family would need to qualify for a mortgage to purchase a median-priced home, subject to certain assumptions. Therefore, rising incomes and, especially, interest rates that are still low by historical standards contribute to homes, and borrowers' monthly mortgage payments in particular, being considered affordable despite recent house price increases. ", "Some factors that affect housing affordability may not be captured by these metrics, however. For example, many of the metrics are based on certain assumptions (such as a borrower making a 20% down payment) that may not apply to many households. Furthermore, since they typically measure the affordability of monthly mortgage payments, they often do not take into account other affordability challenges that homebuyers may face, such as affording a down payment and other upfront costs of purchasing a home (costs that generally increase as home prices rise). Other factors\u2014such as the ability to qualify for a mortgage, the availability of homes on the market, and regional differences in house prices and income\u2014may also make homeownership less attainable for some households. Finally, some of these factors may have a bigger impact on affordability for certain specific demographic groups, as income trends and housing preferences are not uniform across all segments of the population.", "To the extent that house prices and interest rates continue to increase, housing affordability could become more of an issue going forward. "], "subsections": []}, {"section_title": "Inventory and Housing Starts", "paragraphs": ["Many market observers have pointed to low levels of housing inventory as being a key contributor to rising house prices. One measure of the housing inventory is the months' supply of new and existing homes for sale\u2014that is, how many months it would take for all of the homes that are currently on the market to sell based on the current pace of home sales, assuming no additional homes were placed on the market. According to HUD, using data from the National Association of Realtors and the U.S. Census Bureau, the months' supply of homes for sale has generally been below the historical average of six months of late, and the inventory of homes for sale has been low for several years.", "One factor that affects housing inventory is the decision of existing homeowners to put their homes on the market. A number of considerations may be impacting owners' decisions about whether to sell their homes, including concerns about being able to find a suitable new home to purchase. Another factor that affects the housing inventory is the amount of new construction. In recent years, levels of new construction have been relatively low by historical standards, reflecting a variety of considerations including labor shortages and the cost of building. ", "One measure of the amount of new construction is housing starts. Housing starts are the number of new housing units on which construction is started in a given period and are typically reported monthly as a \"seasonally adjusted annual rate.\" This means that the number of housing starts reported for a given month (1) has been adjusted to account for seasonal factors and (2) has been multiplied by 12 to reflect what the total number of housing starts would be if the current month's pace continued for an entire year. That is, the number reported for a given month is the annual number of housing starts that would result if the number of starts per month continued at the current month's rate for 12 months.", " Figure 3 shows the seasonally adjusted annual rate of starts on one-unit homes for each month from January 1995 through November 2018.", "Housing starts for single-family homes fell during the housing market turmoil, reflecting decreased home purchase demand. In recent years, as demand has increased, housing starts have been mostly increasing as well, though they remain below the levels seen in the late 1990s and early 2000s. From 2000 through 2007, the seasonally adjusted annual rate of housing starts in one-unit residential buildings was generally between 1.2 million and 1.8 million each month, before falling to a rate of between 400,000 and 600,000 for each month until about 2013. More recently, housing starts have been trending upward, and the seasonally adjusted annual rate averaged about 850,000 during 2017. In November 2018, the seasonally adjusted annual rate of housing starts was 824,000."], "subsections": []}, {"section_title": "Home Sales", "paragraphs": ["Despite limited inventory and rising home prices, home sales have been increasing in recent years. Home sales include sales of both existing and newly built homes. Existing home sales generally number in the millions each year, while new home sales are usually in the hundreds of thousands.\u00a0", " Figure 4 shows the annual number of existing and new home sales for each year from 1995 through 2017. Existing home sales numbered about 5.5 million in 2017, representing the third straight year of increases and the highest level since 2006. New home sales numbered about 614,000 in 2017. This was the highest level since 2007, but the number of new home sales remains appreciably lower than in the late 1990s and early 2000s, when they tended to be between 800,000 and 1 million per year."], "subsections": []}, {"section_title": "Mortgage Credit Access", "paragraphs": ["Some prospective homebuyers may find themselves unable to obtain mortgages due to their credit histories, other financial characteristics, the cost of obtaining a mortgage (such as down payments and closing costs), or other factors. In general, it is beneficial to the housing market when creditworthy homebuyers are able to obtain mortgages to purchase homes. However, access to mortgages must be balanced against the risk of offering them to people who will not be willing or able to repay the money they borrowed. Striking the right balance of credit access and risk management and the question of who is considered to be \"creditworthy\" are subjects of ongoing debate.", "A variety of organizations attempt to measure the availability of mortgage credit. While their methods vary, many experts agree that access to mortgage credit is tighter than it was in the early 2000s, prior to the housing bubble that preceded the housing market turmoil later in the decade, although it has eased somewhat of late. Despite this easing, some have argued that access to mortgage credit is still too tight, and that the mortgage market is taking on less default risk than it did in the years prior to the loosening of credit standards during the housing bubble. ", "Others have argued that mortgage credit standards are easing too much, focusing on the fact that credit standards for certain types of mortgages, such as those insured by the Federal Housing Administration (FHA), have appeared to loosen somewhat in recent years compared to the immediate aftermath of the housing market turmoil when standards tightened across the board. They argue that easing credit standards unsustainably increases the risk of certain types of mortgages and contributes to higher house prices by allowing households to leverage higher amounts of mortgage debt. FHA itself has noted that it is monitoring certain trends, such as a larger share of new FHA-insured mortgages with higher debt-to-income ratios and the performance of loans with certain types of down payment assistance, that have the potential to increase risk to FHA. "], "subsections": []}, {"section_title": "Mortgage Market Composition", "paragraphs": ["When a lender originates a mortgage, it can choose to hold that mortgage in its own portfolio, sell it to a private company, or sell it to Fannie Mae or Freddie Mac, two congressionally chartered government-sponsored enterprises (GSEs). Fannie Mae and Freddie Mac bundle mortgages into securities and guarantee investors payments on those securities. Furthermore, a mortgage might be insured by a federal government agency, such as the FHA or the Department of Veterans Affairs (VA). Most FHA-insured or VA-guaranteed mortgages are included in mortgage-backed securities that are guaranteed by Ginnie Mae, another government agency. ", "In the years after the housing bubble burst, there was an increase in the share of mortgages that either had mortgage insurance from a government agency or were guaranteed by Fannie Mae or Freddie Mac, leading some to express concern about increased government exposure to risk and a lack of private capital in the mortgage market. ", "As shown in Figure 5 , about two-thirds of the total dollar volume of mortgages originated during the first three-quarters of 2018 were either guaranteed by a federal agency such as FHA or VA (22%) or backed by Fannie Mae or Freddie Mac (45%). Close to one-third of the dollar volume of mortgages originated was held in bank portfolios (31%), while about 2% was securitized in the private market. ", "The share of new mortgage originations, by dollar volume, insured by a federal agency or guaranteed by Fannie Mae or Freddie Mac has fallen from a high of nearly 90% in 2009, during the housing market turmoil. Nevertheless, the share of mortgage originations with federal mortgage insurance or a Fannie Mae or Freddie Mac guarantee remains elevated compared to the 2002-2007 period, when FHA and VA mortgages constituted a small share of the mortgage market and the GSE share ranged from about 30% to 50%. The FHA and VA share of mortgages during the 2002-2007 period was low by historical standards, however, as many households opted for other types of mortgages, including subprime mortgages, during that time. "], "subsections": []}]}, {"section_title": "Rental Housing Markets", "paragraphs": ["In the years since the housing market turmoil began, the homeownership rate has decreased while the percentage of renter households has correspondingly increased. Although new rental housing units have also been created, both through new construction and as some formerly owner-occupied homes are converted to rentals, in many markets the rise in the number of renters increased competition for rental housing, leading to lower rental vacancy rates and higher rents in recent years. This, in turn, has resulted in more renter households being considered cost-burdened, commonly defined as paying more than 30% of income toward housing\u00a0costs."], "subsections": [{"section_title": "Share of Renters", "paragraphs": ["As shown in Figure 6 , the share of renters has generally been increasing for the last decade, reaching close to 37% of all occupied housing units in 2016. This was the highest share of renters since the early 1990s. The homeownership rate has correspondingly decreased, falling from a high of 69% in 2004 to just over 63% in 2016. Most recently, in 2017, the share of renters decreased slightly, to about 36%, and the homeownership rate increased slightly, to nearly 64%.", "In addition to an increase in the share of households who rent, the overall number of renter households has been increasing as well. In 2016, there were nearly 43.3 million occupied rental housing units, compared to 40 million in 2013 and 35.9 million in 2008. The number of renter households decreased in 2017, to 43.1 million. (In comparison, the number of housing units occupied by an owner decreased somewhat after 2008 before beginning to rise again in recent years. The number of housing units occupied by owners was 76.6 million in 2017, compared to about 75.7 million in 2008. ) "], "subsections": []}, {"section_title": "Vacancy Rates", "paragraphs": ["In general, the increase in renters has led to a decrease in rental vacancy rates in many, though not all, areas of the country. This has been the case in many areas despite the creation of new rental units through both new construction and the conversion of some previously owner-occupied single-family units to rental housing. In many cases, the increase in the rental housing supply has not kept up with the increase in rental housing demand.", "As shown in Figure 7 , on a national basis the rental vacancy rate was over 10% in most quarters from 2008 through 2010. Since then, the rate has mostly declined, reaching about 8% at the end of 2013 and 7% at the end of each year from 2014 through 2017. The rental vacancy rate did increase somewhat throughout much of 2017, reaching 7.5% in the third quarter, before decreasing back to about 7% for most of 2018. Furthermore, the market for affordable rental units has been particularly tight, as many of the rental units that have been constructed in recent years have been at the higher end of the market."], "subsections": []}, {"section_title": "Rental Housing Affordability", "paragraphs": ["Rental housing affordability is impacted by a variety of factors, including the supply of rental housing units available, the characteristics of those units (e.g., age and amenities), and the demand for available units. As noted previously, new housing units have been added to the rental stock in recent years through both construction of new rental units and conversions of existing owner-occupied units to rental housing. At the same time, however, the demand for rental housing has increased as more households have become renters. Furthermore, much of the new rental housing construction in recent years has been higher-end construction rather than lower-cost units. ", "The increased demand for rental housing, as well as the concentration of new rental construction in higher-cost units, has led to increases in rents in recent years. Median renter incomes have also been increasing for the last several years, at times outpacing increases in rents. However, over the longer term, median rents have increased faster than renter incomes. For example, between 2001 and 2017, in real terms the median rent (less utilities) for recent movers has risen over 25% while the median renter income has increased about 6%, reducing rental affordability over that time period.", "Rising rental costs and renter incomes that are not keeping up with rent increases over the long term can contribute to housing affordability problems, particularly for households with lower incomes. Under one common definition, housing is considered to be affordable if a household is paying no more than 30% of its income in housing costs. Under this definition, households that pay more than 30% are considered to be cost-burdened, and those that pay more than 50% are considered to be severely cost-burdened.", "The overall number of cost-burdened renter households has generally increased in recent years, from 15.7 million in 2003 to 20.8 million in 2016, although the number of cost-burdened renter households in 2016 represented a decrease from over 21 million in both 2014 and 2015. (Over this time period, the overall number of renter households has increased as well.) ", "As shown in Figure 8 , cost burdens are most prevalent among lower-income renter households. Among renter households with incomes below $30,000, 80% are cost-burdened, with over half experiencing severe cost burdens. However, cost burdens affect households of all incomes: half of renter households with incomes of at least $30,000 but less than $45,000, and over 20% of renter households with incomes of at least $45,000 but less than $75,000, were cost burdened in 2016. Moderate-income renter households have experienced some of the greatest increases in cost burdens since the early 2000s. ", "Furthermore, according to HUD, 8.3 million renter households were considered to have \"worst-case housing needs\" in 2015 (the most recent data available). Households with worst-case housing needs are defined as renter households with incomes at or below 50% of area median income who do not receive federal housing assistance and who pay more than half of their incomes for rent, live in severely inadequate conditions, or both. The 8.3 million renter households with worst-case housing needs in 2015 represented an increase from 7.7 million in 2013 and was similar to 2011 (8.5 million households). In comparison, the number of renter households with worst-case housing needs in 2005 and 2007 was about 6 million."], "subsections": []}]}]}, {"section_title": "Housing Finance Issues in the 115th Congress", "paragraphs": ["Several of the issues that were of interest during the 115 th Congress are related to the financing of housing. In some cases, these issues can impact the financing of both owner-occupied housing and rental housing, though in other cases they are primarily relevant to one or the other."], "subsections": [{"section_title": "Financial \"Regulatory Relief\" Legislation and Housing", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["The financial crisis of 2007-2009 led to a variety of legislative and regulatory responses intended to address its perceived causes. These responses included new requirements on financial institutions, some of which were related to mortgages. Many of these requirements were enacted in the Dodd-Frank Wall Street Reform and Consumer Protection Act ( P.L. 111-203 ) in 2010. ", "In the years since, there has been ongoing debate about the extent to which the new requirements achieve the right balance of protecting consumers and the financial system from potentially risky mortgage features without unduly restricting access to credit for creditworthy households. "], "subsections": []}, {"section_title": "Recent Developments", "paragraphs": ["During the 115 th Congress, a variety of bills were considered to amend certain financial regulatory requirements, including requirements related to mortgages. Most notable among these for housing was the Economic Growth, Regulatory Relief, and Consumer Protection Act ( P.L. 115-174 ), which became law in May 2018. The act includes a variety of provisions related to financial regulatory requirements, including some mortgage-related requirements. In general, it modifies these mortgage-related requirements rather than eliminating them entirely. The act also includes some additional provisions related to housing. ", "Provisions of the act that modify mortgage-related requirements that were put in place after the housing market turmoil include the following: ", "allowing certain mortgages originated and held in portfolio by small depository institutions to be considered \"qualified mortgages\" for the purposes of complying with the ability-to-repay rule; making changes to requirements related to certain property appraisals; exempting some banks and credit unions that make fewer than a particular number of mortgage loans from specified new reporting requirements under the Home Mortgage Disclosure Act (HMDA); providing grace periods for individuals working as mortgage originators to obtain the proper licensing to originate mortgages in their new positions when they move from banks to nonbanks or across state lines; expanding the circumstances under which manufactured home retailers and their employees can be excluded from the definition of mortgage originators, and therefore exempt from certain requirements that apply to mortgage originators, subject to specified conditions; and waiving the waiting period between receipt of particular mortgage-related disclosures and the mortgage closing when a borrower is offered a lower interest rate after initial receipt of the disclosures. ", "While supporters of the act argued that these are targeted changes that will help to ease unnecessarily burdensome regulations and increase the availability of mortgage credit, opponents argued that they weaken or eliminate certain protections that were put in place in response to practices that harmed consumers and ultimately the broader mortgage market.", "The act also includes several other mortgage- or housing-related provisions. These include the following:", "requirements intended to address concerns about certain refinancing practices related to some mortgages guaranteed by the Department of Veterans Affairs; making permanent specified protections for renters in foreclosed properties that had been put in place by the Protecting Tenants at Foreclosure Act (Title VII of the Helping Families Save Their Homes Act, P.L. 111-22 ) in 2009 but had since expired; making permanent a one-year protection against foreclosure for active duty servicemembers under particular circumstances; requiring Fannie Mae and Freddie Mac to consider alternative credit scoring models for mortgages purchased by those institutions; making Property Assessed Clean Energy (PACE) loans, which allow some homeowners to finance specified energy improvements through property tax assessments, subject to the ability-to-repay requirements that apply to most mortgages; certain changes related to small public housing agencies; changes to HUD's Family Self-Sufficiency program, an asset-building program for residents of public and assisted housing; and requiring certain reports, including a report by HUD on lead paint hazards and abatement and a Government Accountability Office (GAO) report on foreclosures in Puerto Rico in the aftermath of Hurricane Maria. ", "A dditional information:", "For an expanded discussion of the provisions of P.L. 115-174 , see CRS Report R45073, Economic Growth, Regulatory Relief, and Consumer Protection Act (P.L. 115-174) and Selected Policy Issues ."], "subsections": []}]}, {"section_title": "Housing Finance Reform", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["The U.S. housing finance system supports about $10 trillion in outstanding single-family residential mortgage debt and over $1 trillion in multifamily residential mortgage debt. Two major players in the housing finance system are Fannie Mae and Freddie Mac, government-sponsored enterprises (GSEs) that were created by Congress to provide liquidity to the mortgage market. By law, Fannie Mae and Freddie Mac cannot make mortgages; rather, they are restricted to purchasing mortgages that meet certain requirements from lenders. Once the GSEs purchase a mortgage, they either package it with others into a mortgage-backed security (MBS), which they guarantee and sell to institutional investors, or retain it as a portfolio investment. Fannie Mae and Freddie Mac are involved in both single-family and multifamily housing, though their single-family businesses are much larger.", "In 2008, during the housing and mortgage market turmoil, Fannie Mae and Freddie Mac entered voluntary conservatorship overseen by their regulator, the Federal Housing Finance Agency (FHFA). As part of the legal arrangements of this conservatorship, the Department of the Treasury contracted to purchase over $200 billion of new senior preferred stock from each of the GSEs; in return for this support, Fannie Mae and Freddie Mac pay dividends on this stock to Treasury. To date, Treasury has purchased a total of over $191 billion of senior preferred stock from the two GSEs and has received a total of nearly $280 billion in dividends. These funds become general revenues. Since the first quarter of 2012, the only time Fannie Mae and Freddie Mac have drawn on their lines of credit with Treasury was in the fourth quarter of 2017; this draw was attributed to changes in the value of deferred tax assets as a result of the tax revision law that was enacted in late 2017 ( P.L. 115-97 )."], "subsections": []}, {"section_title": "Recent Developments", "paragraphs": ["Since Fannie Mae and Freddie Mac were placed in conservatorship in 2008, policymakers have largely agreed on the need for comprehensive housing finance reform legislation that would transform or eliminate the GSEs' role in the housing finance system. While there is broad agreement on certain principles of housing finance reform\u2014such as increasing the private sector's role in the mortgage market and maintaining access to affordable mortgages for creditworthy households\u2014there is disagreement over how best to achieve these objectives and over the technical details of how a restructured housing finance system should operate. ", "The 113 th Congress considered, but did not enact, housing finance reform legislation. The 114 th Congress considered a number of more-targeted reforms to Fannie Mae and Freddie Mac, but did not actively consider comprehensive housing finance reform legislation. During the 115 th Congress, Members on the House and Senate committees of jurisdiction and Administration officials indicated that housing finance reform would be a priority. However, little formal legislative action on the issue took place, and in July 2018, Treasury Secretary Steven Mnuchin suggested at a House Financial Services Committee hearing that housing finance reform would be a focus in the 116 th Congress. ", "In September 2018, House Financial Services Committee Chairman Jeb Hensarling released a discussion draft of a comprehensive housing finance reform bill with some bipartisan support. Chairman Hensarling also indicated plans to reintroduce the Protecting American Taxpayers and Homeowners Act (PATH Act) from the 113 th Congress, which takes a different approach to housing finance reform. However, noting that the reintroduced PATH Act ( H.R. 6746 ) was considered unlikely to pass, he said that he would pursue the discussion draft bill as an alternative. The Financial Services Committee held a hearing on the discussion draft bill in December 2018.", "In addition to considering the role of the GSEs in the housing finance system, any future housing finance reform legislation could also consider changes to the Federal Housing Administration (FHA). FHA is a part of the Department of Housing and Urban Development (HUD) and insures certain mortgages made by private lenders against the possibility of borrower default. By insuring these mortgages, FHA helps to make affordable mortgages more available to borrowers who might otherwise not be well-served by the private mortgage market, such as borrowers with low down payments. ", "Apart from comprehensive reform of the housing finance system, several additional issues related to Fannie Mae and Freddie Mac received attention during the 115 th Congress. These included (1) an FHFA decision to allow Fannie Mae and Freddie Mac to each retain $3 billion in capital (under the terms of the Treasury support agreements, the amount of capital they are allowed to retain was scheduled to fall to zero at the beginning of 2018), (2) the need for both Fannie Mae and Freddie Mac to draw on their lines of credit with Treasury in the fourth quarter of 2017 due to a reduction in the value of deferred tax assets as a result of the tax revision law passed in late 2017, and (3) FHFA directing Fannie Mae and Freddie Mac to continue to make required contributions to certain affordable housing funds despite the draw from Treasury. For more information on these issues in particular, see CRS In Focus IF10851, Housing Finance: Recent Policy Developments . ", "A dditional information:", "For background on the housing finance system in general, see CRS Report R42995, An Overview of the Housing Finance System in the United States . For information on Fannie Mae and Freddie Mac and their conservatorship, see CRS Report R44525, Fannie Mae and Freddie Mac in Conservatorship: Frequently Asked Questions . For background on FHA, see CRS Report RS20530, FHA-Insured Home Loans: An Overview ."], "subsections": []}]}, {"section_title": "Federal Housing Administration Mortgage Insurance Premiums", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["The Federal Housing Administration (FHA), part of HUD, insures certain mortgages made by private lenders against the possibility of the borrower defaulting. FHA insurance protects the lender in the event of borrower default, which is intended to increase the availability of affordable mortgage credit to households who might otherwise be underserved by the private mortgage market. ", "FHA charges borrowers both upfront and annual fees, referred to as mortgage insurance premiums, in exchange for this insurance. These fees are supposed to cover the costs of paying a claim to a lender if an FHA-insured mortgage defaults and goes to foreclosure. By law, the HUD Secretary has a responsibility to ensure that the FHA single-family mortgage insurance fund remains financially sound and that the fund is in compliance with a requirement that it maintain a capital ratio of at least 2%.", "FHA raised the premiums it charges several times in the years during and following the housing market turmoil in response to concerns about rising mortgage delinquency rates and FHA's ability to maintain compliance with the capital ratio requirement. It then lowered the annual premiums in 2015 as mortgage delinquency rates began to decrease and its financial position stabilized. The level of the premiums charged by FHA is often a topic of interest. The premiums have implications for the affordability and availability of FHA-insured mortgages for certain homebuyers, on the one hand, and for the financial health of the FHA insurance fund, on the other; setting the appropriate premium level involves balancing these considerations."], "subsections": []}, {"section_title": "Recent Developments", "paragraphs": ["Early in January 2017, HUD announced that it planned to decrease the annual mortgage insurance premium it charged for new mortgages that closed on or after January 27, 2017. However, on January 20, 2017, the first day of the Trump Administration, HUD suspended the planned decrease before it went into effect, citing a need to further analyze the potential impact that a mortgage insurance premium decrease could have on the FHA insurance fund. ", "In its Annual Report to Congress on the Financial Status of the Mutual Mortgage Insurance Fund (MMI Fund) in November 2017, FHA stated that had the planned premium decrease gone into effect, the estimated capital ratio for the MMI Fund would have fallen below the statutorily mandated capital ratio requirement of 2% for FY2017. (The actual estimated capital ratio for FY2017 was lower than FY2016, but remained above 2%.) The estimated lower capital ratio would have been due to a combination of (1) less premium revenue coming into the fund as a result of the lower premiums and (2) an increase in the total dollar amount of mortgages that would have been insured as a result of more borrowers obtaining FHA-insured mortgages due to the lower premiums. The report also suggests, however, that reverse mortgages insured by FHA are having a disproportionately negative impact on the insurance fund, raising questions about the extent to which the performance of the reverse mortgage portfolio may, or should, impact decisions about the premiums charged to forward-mortgage borrowers.", "A dditional information:", "For more information on FHA-insured mortgages in general, including the current premium levels, see CRS Report RS20530, FHA-Insured Home Loans: An Overview . For more information on the financial status of FHA's single-family mortgage insurance fund, see CRS Report R42875, FHA Single-Family Mortgage Insurance: Financial Status of the Mutual Mortgage Insurance Fund (MMI Fund) . "], "subsections": []}]}, {"section_title": "FHA Requirements for Insuring Mortgages on Condominium Units", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["FHA-insured mortgages can be used to purchase condominium units as well as other types of single-family homes. However, HUD places specific requirements on FHA-insured mortgages for condominiums that may affect the eligibility of a condominium mortgage for the insurance. ", "In order for FHA to insure a mortgage on a condominium unit, HUD requires that the entire condominium project where the unit is located have FHA approval. In order for the condominium project to be approved, it must meet a variety of requirements. These include, among others, a minimum percentage of units that must be owner-occupied, and limits on the amount of nonresidential space and the percentage of units that are behind on their association dues. Condominium buildings seeking FHA approval must go through a certification process and a periodic recertification process to maintain FHA approval.", "In 2009, HUD made a number of changes related to condominium mortgage insurance. In addition to tightening several requirements, it ended a practice known as \"spot approval,\" in which a mortgage on a condominium located in a project that did not have FHA approval could qualify for FHA insurance on a case-by-case basis. Requirements placed on condominium projects seeking FHA approval are intended to ensure that the buildings themselves are well-managed and financially stable, which in turn is thought to make mortgages on individual units in the building less risky. However, some industry groups and others have argued that many of the changes that FHA made are too strict and unnecessarily reduce access to FHA-insured mortgages for prospective condominium buyers and for condominium owners who seek FHA-insured reverse mortgages. ", "While the specifics of debates around individual requirements related to FHA approval of condominium buildings may vary, in general the debate around these requirements is usually framed as a question of how to balance access to FHA-insured mortgages with making sure that insured mortgages do not pose an undue risk to the financial health of the FHA insurance fund."], "subsections": []}, {"section_title": "Recent Developments", "paragraphs": ["In July 2016, towards the end of the 114 th Congress, the Housing Opportunity Through Modernization Act (HOTMA, P.L. 114-201 ) was enacted. While most of the provisions of HOTMA affected HUD rental assistance programs, there were four provisions related to FHA's requirements for insuring mortgages on condominium units. These provisions directed the HUD Secretary to (1) streamline the recertification process for FHA approval of condominium buildings to make it less burdensome, (2) make changes to the process for granting exceptions for exceeding FHA's limits on commercial space, (3) adopt Federal Housing Finance Agency (FHFA) regulations related to transfer fees and condominiums, and (4) issue new guidance, and a justification, addressing the required percentage of owner-occupied units in the building. ", "In September 2016, during the 114 th Congress, HUD issued a comprehensive proposed rule related to approval of condominium projects. While this rulemaking takes the HOTMA provisions into account, it is broader than just the areas addressed by HOTMA and had been in the development stages prior to the passage of the act. Among other things, it proposed a single-unit approval process, similar to the previous spot approval process, to provide a way for FHA-insured mortgages to be approved for condominiums in buildings that are not FHA-approved, subject to certain conditions. ", "In June 2018, over a hundred Members of Congress signed a letter to HUD urging it to finalize the rule. As of the end of the 115 th Congress, HUD had not yet issued a final rule.", "A dditional information:", "For more information on the condominium-related provisions included in HOTMA, see CRS Report R44358, Housing Opportunity Through Modernization Act (H.R. 3700) ."], "subsections": []}]}]}, {"section_title": "Housing-Related Tax Issues in the 115th Congress", "paragraphs": ["During the 115 th Congress, a number of housing-related tax provisions were modified or extended through different pieces of enacted legislation: a broad tax revision law that included changes to housing-related tax provisions, tax extenders legislation that extended temporary tax provisions related to housing, and an appropriations law that included changes to the low-income housing tax credit. "], "subsections": [{"section_title": "Housing Provisions in the Tax Revision Law", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["Two of the largest and most well-known tax incentives available to homeowners are the mortgage interest deduction and the deduction for property taxes. ", "Homeowners are allowed to deduct interest paid on a mortgage that finances the acquisition of a primary or secondary residence as long as the homeowner itemizes their tax deductions. Historically, the amount of interest that was allowed to be deducted was limited to the interest incurred on the first $1 million of combined mortgage debt and the first $100,000 of home equity debt ($1.1 million total). If a taxpayer's mortgage debt exceeded $1 million, they were still allowed to claim a deduction for a percentage of interest paid. Homeowners also benefit from the ability to deduct state and local property taxes. Historically, homeowners were allowed to claim an itemized deduction equal to the full amount of state and local property taxes paid.", "Not all homeowners claim these deductions. Some have no mortgage, and hence no interest to deduct. Others may be toward the end of their mortgage repayment period, and thus paying relatively little interest, so the deduction for interest is not worth much. Some homeowners live in states with low state and local taxes, and may find the standard deduction to be more valuable. Some may also live in low-cost areas and therefore have a relatively small mortgage and property taxes. There may also be interactions with other drivers of itemization. For example, itemization rates tend to be lower in states with an income tax, which can also lead to fewer homeowners claiming the deductions for mortgage interest and property taxes. ", "Among households that do claim the deductions, the majority of their advantages tend to benefit those with higher income. This is in part because these households are more likely to have a financial incentive to itemize their taxes and claim the deductions. It is also because higher-income households are more likely to have more expensive homes with larger mortgages, and therefore more likely to have higher property taxes and larger amounts of mortgage interest to deduct, and because the tax benefits increase with higher marginal tax rates in higher income brackets. ", "Some have argued that the ability to deduct mortgage interest and property taxes incentivize homeownership and have pointed to several perceived benefits of homeownership as a rationale for these tax benefits. However, some researchers have suggested that these deductions have little effect on the homeownership rate, in part because they do not reduce the upfront cost of buying a home, which is one of the biggest barriers to homeownership for many households. This research suggests that the tax benefits may incentivize homebuyers to purchase larger homes than they otherwise would, however, because they increase households' purchasing power and the benefit of the deductions increases with more expensive homes and larger mortgages. ", "The above discussion draws from CRS Report R41596, The Mortgage Interest and Property Tax Deductions: Analysis and Options . Readers can refer to that report for a fuller exploration of these tax benefits, including the rationales put forward for them, an economic analysis of their effects, and a discussion of research related to their impact."], "subsections": []}, {"section_title": "Recent Developments", "paragraphs": ["In late 2017, a broad tax revision law ( P.L. 115-97 ) that substantively changed the federal tax system was signed into law by President Trump. The legislation temporarily reduced the maximum amount of mortgage debt for which interest can be deducted to $750,000 ($375,000 for married filing separately) for debt incurred after December 15, 2017. For mortgage debt incurred on or before December 15, 2017, the combined mortgage limit remains $1 million ($500,000 for married filing separately). Refinanced mortgage debt will be treated as having been incurred on the date of the original mortgage for purposes of determining which mortgage limit applies ($750,000 or $1 million). The interest on a home equity loan that is secured by a principal or second residence and is used to buy, build, or substantially improve a taxpayer's home is still deductible, but the home equity loan amount counts towards the maximum eligible mortgage amount ($750,000 or $1 million). After 2025, the mortgage limit for all new and existing qualifying mortgage interest will revert to $1 million, plus $100,000 in home equity indebtedness (regardless of its use).", "The 2017 tax revision also limits the deduction for state and local property and income taxes to $10,000 until the end of 2025. Additionally, P.L. 115-97 increased the standard deduction to $12,000 (single) or $24,000 (married), which is expected to further reduce the number of taxpayers who itemize deductions generally.", "The increase in the standard deduction will mitigate the impact of the changes to the mortgage interest and property tax deductions for many households, though some will pay more in taxes as a result of these changes. The limit to the deduction for property taxes could have implications for some states and localities with high property taxes, and to the extent that the value of the mortgage interest deduction has been capitalized into home prices, the lower limits on the amount of mortgage interest that can be deducted could exert downward pressure on home prices in some areas. However, at this point the size and scope of any effects these changes may have is unclear.", "A dditional information:", "For more on how the tax revision law affected the mortgage interest deduction, see CRS Insight IN10845, P.L. 115-97: The Mortgage Interest Deduction ."], "subsections": []}]}, {"section_title": "Housing Provisions in Tax Extenders Legislation", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["In the past, Congress has regularly extended a number of temporary tax provisions that address a variety of policy issues, including housing. This set of temporary provisions is commonly referred to as \"tax extenders.\" Two housing-related provisions that have been included in tax extenders packages in the recent past are the exclusion for canceled mortgage debt, and the deduction for mortgage insurance premiums."], "subsections": [{"section_title": "Exclusion for Canceled Mortgage Debt", "paragraphs": ["Historically, when all or part of a taxpayer's mortgage debt has been forgiven, the forgiven amount has been included in the taxpayer's gross income for tax purposes. This income is typically referred to as canceled mortgage debt income. ", "During the housing market turmoil of the late 2000s, some efforts to help troubled borrowers avoid foreclosure resulted in canceled mortgage debt. The Mortgage Forgiveness Debt Relief Act of 2007 ( P.L. 110-142 ), signed into law in December 2007, temporarily excluded qualified canceled mortgage debt income that is associated with a primary residence from taxation. The provision was originally effective for debt discharged before January 1, 2010, and was subsequently extended several times. ", "Rationales put forward for extending the exclusion have included minimizing hardship for distressed households, lessening the risk that nontax homeownership retention efforts will be thwarted by tax policy, and assisting in the recoveries of the housing market and overall economy. Arguments against the exclusion have included concerns that it makes debt forgiveness more attractive for homeowners, which could encourage homeowners to be less responsible about fulfilling debt obligations, and concerns about fairness as the ability to realize the benefits depends on a variety of factors. Furthermore, to the extent that housing markets and the economy have improved in recent years, and foreclosure rates have returned to more typical levels, some may argue that the exclusion is less necessary now than it may have been during the height of the housing and mortgage market turmoil."], "subsections": []}, {"section_title": "Deductibility of Mortgage Insurance Premiums", "paragraphs": ["As described earlier, homeowners traditionally have been able to deduct the interest paid on their mortgage, as well as property taxes they pay, as long as they itemize their tax deductions. Beginning in 2007, homeowners could also deduct qualifying mortgage insurance premiums as a result of the Tax Relief and Health Care Act of 2006 ( P.L. 109-432 ). Specifically, homeowners could effectively treat qualifying mortgage insurance premiums as mortgage interest, thus making the premiums deductible if homeowners itemized and their adjusted gross incomes were below a specified threshold ($55,000 for single, $110,000 for married filing jointly). Originally, the deduction was to be available only for 2007, but it was subsequently extended several times.", "Two rationales that have been put forward for allowing the deduction of mortgage insurance premiums are the promotion of homeownership and the recovery of the housing market. However, it is not clear that the deduction has an effect on the homeownership rate, nor is it clear that the deduction is still needed to assist in the recovery of the housing market, given that housing market indicators suggest that it is stronger as a whole than when the provision was originally enacted (although some areas have not fully recovered from the housing market turmoil). Furthermore, to the degree that owner-occupied housing is over subsidized, extending the deduction could lead to a greater misallocation of resources that are directed toward the housing industry. Extending the deduction, however, may assist some households who are in financial distress because of burdensome housing payments. "], "subsections": []}]}, {"section_title": "Recent Developments", "paragraphs": ["Congress most recently enacted tax extenders legislation in the Bipartisan Budget Act of 2018 ( P.L. 115-123 ). The legislation extended the exclusion for canceled mortgage debt and the ability to deduct mortgage insurance premiums, each of which had previously expired at the end of 2016, through the end of 2017. No additional tax extenders legislation was enacted during the 115 th Congress. ", "A dditional information:", "For more on the tax extenders in the Bipartisan Budget Act, see CRS Report R44925, Recently Expired Individual Tax Provisions (\"Tax Extenders\"): In Brief . For background on the tax exclusion for canceled mortgage debt, see CRS Report RL34212, Analysis of the Tax Exclusion for Canceled Mortgage Debt Income ."], "subsections": []}]}, {"section_title": "Changes to the Low-Income Housing Tax Credit", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["The low-income housing tax credit (LIHTC) is one of the primary sources of federal funding that is used for affordable rental housing development, which it incentivizes with federal tax credits administered through the Internal Revenue Service. The tax credits are provided to states based on population, and states award the credits to housing developers that agree to build or rehabilitate housing where a certain percentage of units will be affordable to low-income households. Housing developers then sell the credits to investors and use the proceeds to help finance the housing developments. ", "Historically, LIHTC-assisted developments have had to meet one of two income tests: either a \"20-50\" test or a \"40-60\" test. Under the former, at least 20% of units have to be occupied by households with incomes at or below 50% of the area's median gross income (area median income, or AMI), adjusted for family size. Under the latter, at least 40% of the units have to be occupied by individuals with incomes at or below 60% of the area's median gross income, adjusted for family size. "], "subsections": []}, {"section_title": "Recent Developments", "paragraphs": ["The Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) made two changes to the LIHTC program. The first change added a third option for complying with the income test for LIHTC developments in addition to the 20-50 or 40-60 tests. This option allows for income averaging, and the income test is satisfied if at least 40% of the units are occupied by tenants with an average income of no greater than 60% of AMI, and no individual tenant has an income exceeding 80% of AMI. Thus, for example, renting to someone with an income equal to 80% of AMI would also require renting to someone with an income no greater than 40% of AMI, so the tenants would have an average income equal to 60% of AMI. Proponents of income averaging have argued that it will have a variety of benefits, including potentially making it easier for LIHTC developments to include more deeply income-targeted units for households with the lowest incomes, increasing the number of households that are eligible to live in LIHTC properties, and making it easier to use LIHTC for mixed-income housing.", "The second change made by P.L. 115-141 increased the amount of LIHTC credits available to states by 12.5% per year for each of FY2018-FY2021.", "The broader tax revision law ( P.L. 115-97 ) did not make any changes directly to the LIHTC program. However, certain changes that were included in the law\u2014such as reductions in corporate tax rates\u2014could affect the demand for LIHTCs and the price that investors are willing to pay for them. If investors pay less for tax credits, then the credits would generate less money for affordable housing development, all else equal. The increase in tax credits included in P.L. 115-141 may help to alleviate concerns about the potential impact of the tax revision law on the price for LIHTCs.", "A dditional information:", "For more information on the low-income housing tax credit in general, and these recent changes to the program, see CRS Report RS22389, An Introduction to the Low-Income Housing Tax Credit ."], "subsections": []}]}]}, {"section_title": "Housing Assistance Issues in the 115th Congress", "paragraphs": ["Some of the housing-related issues that were active in the 115 th Congress have to do with federal programs or activities that provide housing assistance to low-income households or other households with particular housing needs. "], "subsections": [{"section_title": "HUD Appropriations", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["For several years, concern in Congress about federal budget deficits has led to increased interest in reducing the amount of discretionary funding provided each year through the annual appropriations process. This interest was most manifest by the enactment of the Budget Control Act of 2011 ( P.L. 112-25 ), which set enforceable limits for both mandatory and discretionary spending. The limits on discretionary spending, which have been amended and adjusted since they were first enacted, have implications for HUD's budget, the largest source of funding for direct housing assistance, because it is made up almost entirely of discretionary appropriations.", "More than three-quarters of HUD's appropriations are devoted to three rental assistance programs serving more than 4 million families: the Section 8 Housing Choice Voucher (HCV) program, Section 8 project-based rental assistance, and the public housing program. Funding for the HCV program and project-based rental assistance has been increasing in recent years, largely because of the increased costs of maintaining assistance for households that are currently served by the programs. Public housing has, arguably, been underfunded (based on studies undertaken by HUD of what it should cost to operate and maintain it) for many years. Despite the large share of total HUD funding these rental assistance programs command, their combined funding levels only permit them to serve an estimated one in four eligible families, which creates long waiting lists for assistance in most communities.", "In a budget environment featuring limits on discretionary spending, the pressure to provide increased funding to maintain current services for HUD's largest programs must be balanced against the pressure from states, localities, and advocates to maintain or increase funding for other HUD programs, such as the Community Development Block Grant (CDBG) program, grants for homelessness assistance, and funding for Native American housing. "], "subsections": []}, {"section_title": "Recent Developments", "paragraphs": ["The Trump Administration's budget requests for FY2018 and FY2019 each proposed decreases in funding for HUD as compared to the prior year. Both budget requests proposed to eliminate funding for several programs, including multiple HUD block grants (CDBG, the HOME Investment Partnerships Program, and the Self-Help and Assisted Homeownership Opportunity Program (SHOP)), and to decrease funding for most other HUD programs. In proposing to eliminate the block grant programs, the Administration cited budget constraints and proposed that state and local governments should take on more of a role in the housing and community development activities funded by these programs. ", "In February 2018, Congress enacted the Bipartisan Budget Act of FY2018 (BBA;\u00a0 P.L. 115-123 ), which, among other things, increased the statutory limits on discretionary spending for FY2018 and FY2019.\u00a0Following passage of the BBA, the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) was enacted in March 2018, providing final FY2018 appropriations for HUD. The enacted legislation increased overall funding for HUD by nearly 10% compared to FY2017 and did not adopt the program eliminations proposed in the President's budget request. Most HUD funding accounts saw increases in FY2018 compared to FY2017. ", "As of the end of the 115 th Congress, final FY2019 appropriations for HUD had not yet been enacted. HUD programs and activities were funded under continuing resolutions through December 21, 2018, at which point funding lapsed. This funding lapse was still underway when the 115 th Congress ended. ", "A dditional information:", "For more on HUD appropriations trends in general, see CRS Report R42542, Department of Housing and Urban Development (HUD): Funding Trends Since FY2002 . For more on FY2018 HUD appropriations, see CRS Report R44931, HUD FY2018 Appropriations: In Brief . For more on the FY2019 HUD budget request, see CRS Report R45166, Department of Housing and Urban Development (HUD): FY2019 Budget Request Fact Sheet . "], "subsections": []}]}, {"section_title": "HUD Rental Assistance Programs", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["As noted, HUD administers three primary direct rental assistance programs: the Housing Choice Voucher program, the public housing program, and project-based rental assistance (including project-based Section 8). Combined, these programs serve more than 4 million families at a cost of nearly $40 billion per year, accounting for the vast majority of HUD's total budget. While the three programs provide different forms of assistance\u2014rental vouchers, publicly owned subsidized apartments, and privately owned subsidized apartments\u2014they all allow low-income individuals and families to pay rent considered affordable (generally 30% of adjusted family income). About half of the families served by the combined programs are headed by persons who are elderly or have disabilities and the other half are primarily other families with children. Although these are the largest federal housing assistance programs for low-income families, they are estimated to serve only approximately one in four eligible families due to funding limitations, and most communities have long waiting lists for assistance."], "subsections": []}, {"section_title": "Recent Developments", "paragraphs": ["The size and scope of HUD's rental assistance programs mean they are often of interest to policymakers. Specifically in the 115 th Congress, cost considerations, interest in broader welfare reform ideas such as work requirements, and concerns about administrative efficiencies led to various policy proposals and debates."], "subsections": [{"section_title": "Administration Rent Reform and Work Requirement Proposal", "paragraphs": ["In April 2018, HUD Secretary Carson announced the Administration's Making Affordable Housing Work Act of 2018 (MAHWA) legislative proposal. If enacted, the proposal would have made a number of changes to the way tenant rents are calculated in HUD rental assistance programs. These changes would have resulted in rent increases for assisted housing recipients, and corresponding decreases in the cost of federal subsidies. Specifically, MAHWA proposed to eliminate the current income deductions used when calculating tenant rent and establish two rent structures: one for elderly and disabled households, based on 30% of gross income; and one for other families, based on 35% of gross income, with a mandatory minimum rent based on part-time work at the minimum wage. While these changes would have resulted in rent increases for tenants, the language would have allowed the Secretary to phase in the increases. Additionally, the proposal would have authorized the Secretary to establish other rent structures, and would have authorized local program administrators to establish still other rent structures, with the Secretary's authorization. Further, the proposal would have permitted local program administrators or property owners to institute work requirements for recipients. Given the variation that would have resulted from these last two elements permitting local discretion, it is difficult to estimate what the consequences of the changes would have been for any given family.", "In announcing the proposal, HUD described it as setting the programs on \"a more fiscally sustainable path,\" creating administrative efficiency, and promoting self-sufficiency. Low-income housing advocates have been critical of the proposal, particularly the effect increased rent payments may have on families. Legislation to implement the Administration's proposal was not introduced in the 115 th Congress. "], "subsections": []}, {"section_title": "Rental Assistance Demonstration", "paragraphs": ["The Rental Assistance Demonstration (RAD) was an Obama Administration initiative initially designed to test the feasibility of addressing the estimated $25.6 billion backlog in unmet capital needs in the public housing program by allowing local public housing authorities (PHAs) to convert their public housing properties to either Section 8 Housing Choice Vouchers or Section 8 project-based rental assistance. PHAs are limited in their ability to mortgage, and thus raise private capital for, their public housing properties because of a federal deed restriction placed on the properties as a condition of federal assistance. When public housing properties are converted under RAD, that deed restriction is removed. As currently authorized, RAD conversions must be cost-neutral, meaning that the Section 8 rents the converted properties may receive must not result in higher subsidies than would have been received under the public housing program. Given this restriction, and without additional subsidy, not all public housing properties can use a conversion to raise private capital, potentially limiting the usefulness of a conversion for some properties. ", "RAD was first authorized by Congress in the FY2012 HUD appropriations law and was originally limited to 60,000 units of public housing (out of roughly 1 million units). However, Congress has since expanded the demonstration. Most recently, in FY2018, Congress raised the cap so that up to 455,000 units of public housing will be permitted to convert to Section 8 under RAD. Given the most recent expansion, nearly half of all public housing units could ultimately convert.", "While RAD conversions have been popular with PHAs, and HUD's initial evaluations of the program have been favorable, a recent GAO study has raised questions about HUD's oversight of it, as well as how much private funding is actually being raised for public housing through the conversions. "], "subsections": []}, {"section_title": "Moving to Work Expansion", "paragraphs": ["In the FY2016 HUD appropriations law, Congress mandated that HUD expand the Moving to Work (MTW) demonstration by 100 PHAs. MTW is a waiver program that allows a limited number of participating PHAs to get exceptions from HUD for most of the rules and regulations governing the public housing and voucher programs.\u00a0MTW has been controversial for many years, with PHAs supporting the flexibility the demonstration provides (e.g., allowing PHAs to move funding between programs), and low-income housing advocates criticizing some of the policies being adopted by PHAs (e.g., work requirements and time limits). Most recently, GAO issued a report raising concerns about HUD's oversight of MTW, including the lack of monitoring of the effects of policy changes under MTW on tenants.", "The FY2016 expansion required that HUD phase in the expansion and that it evaluate any new policies adopted by participating PHAs.\u00a0Following a series of listening sessions, and at the very end of the Obama Administration, HUD published a notice in the Federal Register in January 2017 soliciting comments on the expansion process for MTW. In May 2017, HUD issued several revisions and reopened the comment period for that notice. In October 2018, HUD published a notice to select the first expansion cohort and a final expansion operations notice for comment, reflecting the comments it had received on the earlier versions. Thus, while actions were taken to expand MTW, no additional agencies were selected for participation in the demonstration before the end of the 115 th Congress."], "subsections": []}, {"section_title": "Other Assisted Housing Legislation", "paragraphs": ["A number of more narrowly targeted housing assistance bills were approved by committee, considered on the floor, or enacted into law during the 115 th Congress. These include the following:", "P.L. 115-174 , the Economic Growth, Regulatory Relief, and Consumer Protection Act, signed into law in May 2018, contained two assisted housing provisions: one making changes to the Family Self Sufficiency program that largely mirrors H.R. 4258 , the Family Self Sufficiency Act, which was reported by the House Financial Services Committee in December 2017 and approved by the House in January 2018; and one offering various regulatory streamlining provisions for small PHAs. H.R. 5793 , the Housing Choice Voucher Mobility Demonstration Act of 2018, ordered reported by the House Financial Services Committee in May 2018 and passed by the House in July 2018 (on a vote of 412-5, Roll no. 22) , would have authorize d HUD to conduct a mobility demonstration to test regional administrati on of the Housing Choice Voucher program and its effects on encouraging and supporting moves by voucher hold ers to lower-poverty and higher- opportunity areas. The text of H.R. 5793 was also incorporated as Section 238 of the House Appropriations Committee- reported FY2019 HUD ap propriations bill ( H.R. 6072 ). Neither form of this legislation was enacted before the end of the 115th Congress.H.R. 5735 , the THRIVE Act, ordered reported by the House Financial Services Committee in May 2018 and passed by the House in June 2018 (on a vote of 230-173, Roll no. 266), would have required HUD to undertake a demonstration program, setting aside up to 10,000 existing Housing Choice Vouchers, to test temporary supportive housing approaches for individuals recovering from opioid and other substance use disorders. This legislation was not enacted before the end of the 115 th Congress.H.R. 2069 , the Fostering Stable Housing Opportunities Act of 2017, ordered to be reported by the House Financial Services Committee in July 2018 (on a vote of 34-23), would have created a new federal preference for youth aging out of foster care and at risk of homelessness across most federal housing assistance programs and required that youth accessing assistance via the preference be subject to education, training, or work requirements as set by local program administrators. This legislation was not enacted before the end of the 115 th Congress.H.R. 1511 , the Homeless Children and Youth Act of 2017, ordered to be reported by the House Financial Services Committee in July 2018 (on a vote of 39-18), would have expanded the definition of homelessness governing the HUD homeless programs, while maintaining existing resources for the programs, to include homeless families with children and youth certified as homeless under other federal programs that have less-restrictive definitions. This legislation was not enacted before the end of the 115 th Congress."], "subsections": []}]}]}, {"section_title": "Native American Housing Programs", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["Native Americans living in tribal areas experience a variety of housing challenges. Housing conditions in tribal areas are generally worse than those for the United States as a whole, and factors such as the legal status of trust lands present additional complications. ", "The main federal program that provides housing assistance to Native American tribes and Alaska Native villages is the Native American Housing Block Grant (NAHBG), which was authorized by the Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA, P.L. 104-330 ). NAHASDA reorganized the federal system of housing assistance for tribes while recognizing the rights of tribal self-governance and self-determination. The NAHBG provides formula funding to tribes for a range of affordable housing activities that benefit primarily low-income Native Americans or Alaska Natives living in tribal areas. A separate block grant program authorized by NAHASDA, the Native Hawaiian Housing Block Grant (NHHBG), provides funding for affordable housing activities that benefit Native Hawaiians eligible to reside on the Hawaiian Home Lands. ", "Although the NAHBG is the largest source of federal housing assistance to tribes, other federal housing programs also provide tribal housing assistance. One of these is the Tribal HUD-Veterans Affairs Supportive Housing (Tribal HUD-VASH) program, which provides rental assistance and supportive services to Native American veterans who are homeless or at risk of homelessness. Tribal HUD-VASH was initially created and funded through the FY2015 HUD appropriations act ( P.L. 113-235 ), and funds to renew rental assistance were provided in FY2017 and FY2018. No separate authorizing legislation for the program currently exists. "], "subsections": []}, {"section_title": "Recent Developments", "paragraphs": ["The most recent authorization for most NAHASDA programs expired at the end of FY2013, although these programs have generally continued to be funded in annual appropriations laws. (The NHHBG has not been reauthorized since its original authorization expired in FY2005, though it has continued to receive funding in most years. ) ", "Both the 113 th and 114 th Congresses considered NAHASDA reauthorization legislation, though none was enacted. In the 115 th Congress, NAHASDA reauthorization bills were again introduced in both the House and the Senate; these bills were similar, but not identical, to one another. In the House, H.R. 3864 was reported by the Financial Services Committee in March 2018, while in the Senate S. 1895 was referred to the Committee on Indian Affairs. NAHASDA reauthorization legislation was not enacted by the end of the 115 th Congress. ", "As introduced, both the House and the Senate bills would have reauthorized the NAHBG and the NHHBG as well as two home loan guarantee programs that benefit Native Americans and Native Hawaiians, respectively. However, as reported by the House Financial Services Committee, H.R. 3864 did not include reauthorization of the Native Hawaiian programs. Both bills would have also made certain changes to NAHBG program requirements, authorized a demonstration program intended to allow participating tribes to use their NAHBG funds in specified ways to support more private financing for housing activities in tribal areas, and required the HUD Secretary to set aside at least 5% of HUD-VASH funding for the Tribal HUD-VASH program. In response to concerns about certain tribes not spending their NAHBG funds in a timely fashion, both bills also included a provision to reduce funding to tribes with annual allocations of $5 million or more who have large balances of unexpended NAHBG funds. (The vast majority of tribes receive annual allocations below $5 million.)", "While tribes and Congress are generally supportive of NAHASDA, there has been some disagreement in Congress over specific provisions or policy proposals that have been included in reauthorization bills, such as a provision that would allow tribes to set maximum rents for NAHASDA-assisted housing units that exceed 30% of tenant incomes. There has also been disagreement over the Native Hawaiian housing programs for many years. This disagreement reflects a broader debate about the appropriate relationship of the federal government to Native Hawaiians and whether programs that solely benefit Native Hawaiians could be construed to provide benefits based on race. Supporters of the Native Hawaiian housing programs argue that the funding is necessary due to housing conditions on the Hawaiian Home Lands and the history of the federal government's involvement with Native Hawaiians.", "Separately from NAHASDA, a stand-alone Senate bill ( S. 1333 ) would have codified the Tribal HUD-VASH program. The Senate passed S. 1333 in May 2018, but the House did not consider the bill.", "A dditional information:", "For more on NAHASDA and the NAHBG, see CRS Report R43307, The Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA): Background and Funding ."], "subsections": []}]}, {"section_title": "Housing and Disaster Response", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["During the 115 th Congress, several major disasters struck the United States (including Hurricanes Harvey, Irma, and Maria and significant wildfires in California) that resulted in presidential disaster declarations. These declarations trigger aid that protects property, public health, and safety, primarily provided through the Federal Emergency Management Agency (FEMA). FEMA's housing-related assistance may include, depending on the needs created by the specific disaster, emergency shelter, temporary housing assistance, and assistance with long-term housing recovery. In many cases, Congress will also provide supplemental funding, often through HUD's Community Development Block Grant-Disaster Recovery (CDBG-DR) grant program, to further support long-term recovery efforts following major disasters. "], "subsections": []}, {"section_title": "Recent Developments", "paragraphs": [], "subsections": [{"section_title": "CDBG-DR", "paragraphs": ["The 115 th Congress provided substantial supplemental appropriations, including $37 billion in total supplemental CDBG-DR funding in FY2017, FY2018, and FY2019 combined, to aid disaster-affected communities with long-term recovery, including the restoration of housing, infrastructure, and economic activity. ", "While CDBG-DR has had a significant role in funding recovery efforts from past disasters, and is slated to play a major role in the recovery from the 2017 hurricanes, the program is not formally authorized, meaning the rules that govern the funding use and oversight vary with HUD guidance accompanying each allocation. Some Members of the 115 th Congress expressed interest in formally authorizing the CDBG-DR program, in part in response to concerns about HUD's oversight of CDBG-DR funding. The House Financial Services Committee's Subcommittee on Oversight and Investigations held a hearing on CDBG-DR oversight and potential for future reforms, including authorization of the program. The House Financial Services Committee later ordered to be reported H.R. 4557 , the Reforming Disaster Recovery Act of 2017. The bill would have authorized the CDBG-DR program and included a number of provisions to codify financial controls over program funds. "], "subsections": []}, {"section_title": "Disaster Housing Assistance Program", "paragraphs": ["Advocates for low-income housing and some Members of Congress have been critical of FEMA's housing response to the 2017 hurricanes, and they have called for HUD to play a larger role, particularly for residents of Puerto Rico displaced as a result of Hurricane Maria. Specifically, they have called for FEMA to enter into an interagency agreement with HUD to provide longer-term temporary rental assistance. This was done after Hurricanes Katrina and Ike in 2005 and 2008, and to a more limited extent after Hurricane Sandy in 2012. The program of assistance to residents resulting from those interagency agreements was referred to as the Disaster Housing Assistance Program (DHAP). DHAP was structured somewhat differently after each of those past disasters (in terms of who was eligible, how long they received rental assistance, how they were transitioned off of assistance, etc.), but it generally featured FEMA-funded rental assistance administered by local PHAs and modeled after Section 8 Housing Choice Vouchers. The structure of a future DHAP would depend on what was negotiated between FEMA and HUD, unless otherwise specified by Congress.", "Although the governor of Puerto Rico explicitly requested in December 2017 that FEMA initiate a DHAP in response to Hurricane Maria, FEMA denied that request in May of 2018, arguing DHAP was neither necessary nor cost effective. Instead, FEMA has made various forms of temporary housing assistance available for Puerto Ricans displaced to the mainland United States, primarily funding extended hotel and motel stays through the Transitional Sheltering Assistance (TSA) program, which was repeatedly extended, including by court order, but expired in September, 2018.", "A dditional information:", "For more information on 2017 disaster supplemental funding, see CRS Report R45084, 2017 Disaster Supplemental Appropriations: Overview ."], "subsections": []}]}]}, {"section_title": "Other Affordable Housing Proposals", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["As noted earlier in this report, housing affordability challenges have been increasing, particularly for lower-income families. The share of families with significant cost burdens has been growing and a number of research and media reports have highlighted growing concerns about housing costs outpacing income growth. "], "subsections": []}, {"section_title": "Recent Developments", "paragraphs": ["In response to concerns about housing affordability, several bills were introduced in the 115 th Congress that focused on addressing the issue of housing affordability broadly, but through different approaches. ", "Some proposals were focused on demand-side solutions, in the form of new or increased subsidies for certain renters or homeowners meant to make it easier for those households to afford housing. For example, several bills\u2014 S. 3250 / H.R. 6671 , S. 3342 , H.R. 4074 , and H.R. 3670 \u2014would have created a renter credit through changes to the tax code. (Some of these bills included other housing-related provisions as well.) Other proposals were focused on supply-side solutions, such as in the form of additional resources for existing affordable housing programs that focus on the production or preservation of affordable housing units. For example, Representative Waters introduced H.R. 3160 and H.R. 2076 , which would have authorized significant increases in resources for the public housing program and homeless assistance programs, respectively. Another bill, S. 3231 , took a different approach by proposing to authorize a task force to study the effect of a shortage of affordable housing on life outcomes as well as the impact such a shortage has on other federal, state, and local programs, and make recommendations to Congress.", "The most sweeping affordable housing proposal in the 115 th Congress, and arguably in the last several Congresses, was S. 3503 , the American Housing and Economic Mobility Act of 2018, introduced by Senator Warren. It would have authorized new funding for affordable housing programs and activities at a level greater than HUD's entire budget, with both supply-side and demand-side investments, among other changes. Specifically, the bill included the following: ", "authorizations of $44.5 billion per year for 10 years for affordable housing development through HUD's Housing Trust Fund, $2.5 billion per year for 10 years for Treasury's Capital Magnet Fund, and $2.5 billion for FY2019 for HUD's Native American Housing Block Grant, as well as additional funding for certain USDA rural housing programs; creation of a new $4 billion middle class housing emergency fund; a new authorization of $2 billion per year for five years for local governments that agree to reform local land use polices in support of affordable housing development; the creation of a new down payment assistance grant program for first-time homebuyers in low-income communities that were affected by historical redlining practices; an authorization of $2 billion for new one-time grants for states to assist homeowners with negative equity; modifications and expansions to the Community Reinvestment Act; amendments to the Fair Housing Act to add sexual orientation, gender identity, marital status, and source of income to the categories protected from discrimination, among other changes; and modifications to the Housing Choice Voucher program to promote regional mobility. ", "These changes were to be paid for, at least in part, by changes to the estate tax designed to increase revenue.", "While none of these bills was the subject of legislative action during the 115 th Congress, they received attention among industry and advocacy groups and the media as part of a larger conversation about how to address housing affordability. "], "subsections": []}]}]}, {"section_title": "HUD Regulatory Reviews During the 115th Congress", "paragraphs": ["The Trump Administration took office in January 2017, at the beginning of the 115 th Congress. In February 2017, President Trump issued Executive Order 13777 directing agencies to establish a Regulatory Reform Task Force to evaluate existing agency regulations and identify regulations that should potentially be modified or repealed. In accordance with the order, in May 2017 HUD issued a Federal Register notice requesting public comments \"to assist in identifying existing regulations that may be outdated, ineffective, or excessively burdensome.\"", "HUD has since suspended, withdrawn, or considered modifying a variety of regulations and policy decisions. Not all of these actions have been directly related to the regulatory review required by Executive Order 13777, though HUD has often described its actions as consistent with that review or noted public comments received as part of that review in explaining its decisions. The regulations and policy decisions that have been withdrawn or suspended or that are under review impact a range of HUD programs and policies. Some of the more high-profile actions that HUD has taken are discussed in the following sections."], "subsections": [{"section_title": "Small Area Fair Market Rents", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["Fair Market Rents (FMRs) are estimated annually by HUD for use in various HUD programs, including for setting subsidy levels in the Section 8 Housing Choice Voucher (HCV) program. FMRs are set at the 40 th percentile gross rent of standard-quality housing in a community. HUD uses Census data and inflation estimates to establish FMRs for the geographies of metropolitan areas and nonmetropolitan counties. It has long been understood that housing markets are often more localized than metropolitan areas or counties, but given data limitations these were the smallest geographies for which HUD would produce regular estimates.", "With the introduction of the American Community Survey to replace the decennial Census long form, more-frequently updated data became available at smaller geographies. Thus, HUD is now able to calculate FMRs for smaller geographic areas. HUD released its first hypothetical Small Area FMRs (SAFMRs), with FMRs at the zip code level, in FY2011 and has published them annually since. With the release of the SAFMRs, HUD also announced a demonstration to test the use of SAFMRs on the HCV program in selected communities."], "subsections": []}, {"section_title": "Recent Developments", "paragraphs": ["In June 2016, during the 114 th Congress, HUD published a notice in the Federal Register proposing to require certain PHAs to use SAFMRs in the administration of their HCV programs if they had high levels of vouchers concentrated in high-poverty areas. Some commenters expressed support, citing the opportunity SAFMRs present to promote mobility and accuracy in subsidy determination, among other reasons; other commenters opposed the change, expressing concern about the potential for cost increases in the program resulting in fewer families being served, among other reasons. The rule was finalized in November 2016, at the end of the Obama Administration. Under the final rule, 24 communities would be mandated to use SAFMRs for their HCV programs and any other PHA could choose to use them, beginning on October 1, 2017.", "Following the transition to the Trump Administration, HUD Secretary Carson announced in the summer of 2017 that he was suspending the mandatory use of SAFMRs for two fiscal years, citing interim findings from the SAFMR demonstration that raised concerns about the availability of units for voucher holders, negative public comments during the rulemaking process, and the need for more guidance and technical assistance for PHAs. In response to the suspension, fair housing advocates sued HUD, and in December 2017 the U.S. District Court for the District of Columbia entered a preliminary injunction voiding the suspension, thus putting the mandatory use of SAFMRs into effect. In light of the injunction, HUD issued a notice for the 24 mandatory communities to begin using SAFMRs \"as expeditiously as possible and no later than April 1, 2018.\" Other PHAs may also voluntarily begin using SAFMRs to administer their HCV programs."], "subsections": []}]}, {"section_title": "Manufactured Housing", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["Manufactured housing\u2014housing that is assembled in a factory setting and transported to a home site on a permanent chassis\u2014is required to be built in accordance with HUD's Manufactured Housing Construction and Safety Standards. HUD issues regulations governing the standards, with the input of the Manufactured Housing Consensus Committee. HUD also develops model manufactured home installation standards; states that implement their own manufactured home installation programs must have standards that at least meet the HUD model standards. "], "subsections": []}, {"section_title": "Recent Developments", "paragraphs": ["In January 2018, HUD issued a Federal Register notice stating that, consistent with Executive Order 13777 and the Regulatory Reform Task Force, it was undertaking a broad review of HUD's regulations related to manufactured housing and inviting public comment on regulations that may warrant review. While HUD rules are generally intended to ensure that manufactured housing is high quality and safe, some have argued that certain HUD rules are unnecessary or too inflexible and that they therefore drive up the cost of manufactured housing and reduce access to it as an affordable housing option. Rules or guidance that have attracted particular attention in recent years include a final rule related to on-site completions of manufactured homes, a memorandum related to the construction of certain add-on features (such as attached garages) at the home site and the applicability of HUD alternative construction procedures in those circumstances, and an interpretative bulletin related to foundation requirements in areas subject to ground freezing. HUD specifically requested comments on these and other selected topics, in addition to requesting comments generally on any of its manufactured housing regulations. ", "The House-passed FY2018 consolidated appropriations bill that included HUD appropriations would have prohibited funds provided in that bill from being used for the three HUD directives mentioned above. While that provision was not included in the enacted FY2018 appropriations law, the explanatory statement directed HUD to review those specific directives, develop a solution that balances consumer safety with costs and burdens placed on both manufacturers and consumers, and report on whether state and local agencies should have jurisdiction over on-site completion of manufactured homes. "], "subsections": []}]}, {"section_title": "Affirmatively Furthering Fair Housing", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["The Fair Housing Act requires HUD to administer its programs in a way that affirmatively furthers fair housing, and statutes or regulations governing specific HUD programs also require that funding recipients affirmatively further fair housing (AFFH). For many years, public housing authorities and state and local governments that receive HUD block grant funds satisfied their obligation to affirmatively further fair housing by certifying to HUD that they conducted an Analysis of Impediments (AI) to fair housing and were taking appropriate actions to overcome impediments. However, both HUD and GAO had identified certain weaknesses in the AI process. ", "In July 2015, during the 114 th Congress, HUD published a final rule (AFFH rule) that more specifically defines what it means to affirmatively further fair housing\u00a0and requires that program participants submit a new Assessment of Fair Housing (AFH) to HUD rather than an AI. The rule also provides that HUD will supply data for program participants to use in preparing their AFHs and will publish tools that help them through the process. "], "subsections": []}, {"section_title": "Recent Developments", "paragraphs": ["On January 5, 2018, HUD issued a notice stating that it would extend the deadline for local governments receiving more than $500,000 in CDBG funding to submit their AFHs until after October 31, 2020. \u00a0Under the AFFH rule, these local governments had begun submitting AFHs starting in 2016. In extending the deadline, HUD stated that, based on reviews of AFHs that had been submitted so far, it believed that program participants needed more time and technical assistance to produce acceptable AFHs.", "On May 23, 2018, HUD issued three more notices that effectively suspend indefinitely the implementation of the AFFH rule and return to the previous AI process. The three notices (1) withdrew the January 2018 notice that delayed implementation of the AFFH rule for local governments, (2) withdrew the final assessment tool that had been released to assist local governments in preparing their AFHs, and (3) directed program participants that have not already submitted an AFH under the AFFH rule to comply with the previous AI requirements.", "Withdrawing the local government assessment tool delays the AFH submission dates for local governments because the AFFH rule provides for at least nine months between publication of the final assessment tool and the AFH due date. HUD states that it withdrew the assessment tool because it had identified \"significant deficiencies\" that made the tool \"unduly burdensome\" for program participants to use, and that it does not have the personnel to provide technical assistance that the jurisdictions would need. The notice provides that HUD will produce a \"more effective and less burdensome\" tool in the future and that it will accept public input on improving the tool.", "In the 115 th Congress, the Restoring Fair Housing Protections Eliminated by HUD Act of 2018 ( H.R. 6220 ) would have required HUD to reinstate the assessment tool for local governments and require them to submit AFHs. The bill was referred to committee but no further action was taken during the 115 th Congress. ", "Most recently, on August 13, 2018, HUD announced an Advance Notice of Proposed Rulemaking (ANPR) stating that it \"has determined that a new approach towards AFFH is required\" and requesting public comments on potential changes to the AFFH regulations. The ANPR states that \"HUD is committed to its mission of achieving fair housing opportunity for all,\" but that it believes that the current rule \"is not fulfilling its purpose to be an efficient means for guiding meaningful action by program participants.\" ", "A dditional information:", "For more on HUD and fair housing, including HUD's obligation to affirmatively further fair housing, see CRS Report R44557, The Fair Housing Act: HUD Oversight, Programs, and Activities . "], "subsections": []}]}, {"section_title": "Disparate Impact Standard under the Fair Housing Act", "paragraphs": [], "subsections": [{"section_title": "Background137", "paragraphs": ["The Fair Housing Act (FHA) was enacted \"to provide, within constitutional limitations, for fair housing throughout the United States.\" It prohibits discrimination on the basis of race, color, religion, national origin, sex, physical and mental handicap, and familial status. Subject to certain exemptions, the FHA applies to all sorts of private and public housing, including single family homes, apartments, condominiums, and manufactured homes. It also applies to \"residential real estate-related transactions,\" which include both the \"making [and] purchasing of loans \u2026 secured by residential real estate [and] the selling, brokering, or appraising of residential real property.\"", "In June 2015, the Supreme Court, in Texas Department of Housing Community Affairs v. Inclusive Communities Project , confirmed the long-held interpretation that, in addition to outlawing intentional discrimination, the FHA prohibits certain housing-related decisions that have a disparate impact on a protected class. ", "Historically, courts have generally recognized two types of disparate impacts resulting from \"facially neutral decision[s]\" that can result in liability under the FHA. First, courts have recognized disparate impact when a \"decision has a greater adverse impact on one [protected] group than on another.\" Second, courts consider the \"effect which the decision has on the community involved; if it perpetuates segregation and thereby prevents interracial association it will be considered invidious under the Fair Housing Act independently of the extent to which it produces a disparate effect on different racial groups.\"", "The Supreme Court's holding in Inclusive Communities that \"disparate-impact claims are cognizable under the [FHA]\" mirrors previous interpretations of HUD and all 11 federal courts of appeals that had ruled on the issue as of June 2015. However, HUD and these courts had not all applied the same criteria for determining when a neutral policy that causes a disparate impact violates the FHA. In a stated attempt to harmonize disparate impact analysis across the country, HUD finalized regulations in 2013 that established uniform standards for determining when such practices violate the act. The Inclusive Communities Court did not expressly adopt the standards established in HUD's disparate impact regulations, but instead embraced a similar, but not identical, three-step burden-shifting test for assessing disparate impact liability under the FHA. ", "At step one, the plaintiff has the burden of establishing evidence that a housing decision or policy caused a disparate impact on a protected class. At step two, defendants can counter the plaintiff's prima facie showing by establishing that the challenged policy or decision is \"necessary to achieve a valid interest.\" The defendant will not be liable for the disparate impact resulting from a \"valid interest\" unless, at step three, the plaintiff proves \"that there is an available alternative \u2026 practice that has less disparate impact and serves the entity's legitimate needs.\" In addition, the Supreme Court outlined a number of limiting factors that lower courts and HUD should apply when assessing disparate impact claims. The Court stressed that lower courts and HUD should rigorously evaluate plaintiffs' claims to ensure that evidence has been provided to support not only a statistical disparity, but also causality. Additionally, the Court emphasized that claims should be disposed of swiftly in the preliminary stages of litigation if plaintiffs have failed to establish a prima facie case of disparate impact."], "subsections": []}, {"section_title": "Recent Developments", "paragraphs": ["On June 20, 2018, HUD published an Advance Notice of Proposed Rulemaking in the Federal Register seeking public comment on whether the 2013 disparate impact regulations should be amended in light of the Inclusive Communities decision. The Advance Notice of Proposed Rulemaking noted that the request for comments was \"consistent with HUD's efforts to carry out the Administration's regulatory reform efforts\" and that HUD had received \"numerous\" comments related to this rule in response to its May 2017 Federal Register notice seeking comment on its regulatory reform agenda. ", "With the June 2018 Advance Notice of Proposed Rulemaking, HUD specifically sought public feedback on, among other issues, whether the regulations", "\"strike the proper balance in encouraging legal action for legitimate disparate impact cases while avoiding unmeritorious claims\"; sufficiently detail the causality requirements for establishing a prima facie disparate impact case; should establish safe harbors from or defenses to disparate impact claims; and could be amended to \"add [] clarity, reduce uncertainty, decrease regulatory burden, or otherwise assist the regulated entities and other members of the public in determining what is lawful.\"", "The public comment period closed on August 20, 2018."], "subsections": []}]}]}]}}
{"id": "R44477", "title": "Department of Education Funding: Key Concepts and FAQ ", "released_date": "2019-02-19T00:00:00", "summary": ["Like most federal agencies, the Department of Education (ED) receives funds in support of its mission through various federal budget and appropriations processes. While not unique, the mechanisms by which ED receives, obligates, and expends funds can be complex. For example, ED receives both mandatory and discretionary appropriations; ED is annually provided forward funds and advance appropriations for some\u2014but not all\u2014discretionary programs; ED awards both formula and competitive grants; and a portion of ED's budget subsidizes student loan costs (direct loans and loan guarantees). As such, analyzing ED's budget requires an understanding of a broad range of federal budget and appropriations concepts. This report provides an introduction to these concepts as they are used specifically in the context of the congressional appropriations process for ED.", "The first section of this report provides an introduction to key terms and concepts in the federal budget and appropriations process for ED. In addition to those mentioned above, the report includes explanations of terms and concepts such as authorizations versus appropriations; budgetary allocations, discretionary spending caps, and sequestration; transfers and reprogramming; and matching requirements.", "The second section answers frequently asked questions about federal funding for ED or education in general. These are as follows:", "How much funding does ED receive annually? How much does the federal government spend on education? Where can information be found about the President's budget request and congressional appropriations for ED? How much ED funding is in the congressional budget resolution? What is the difference between the amounts in appropriations bills and report language? What happens to education funding if annual appropriations are not enacted before the start of the federal fiscal year? What happens if an ED program authorization \"expires\"?", "The third section includes a brief description of, and links to, reports and documents that provide more information about budget and appropriations concepts."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Federal policymakers statutorily established the U.S. Department of Education (ED) as a Cabinet-level agency in 1980. Its mission is to \"promote student achievement and preparation for global competitiveness by fostering educational excellence and ensuring equal access.\" ", "Like most federal agencies, ED receives funds in support of its mission through various federal budget and appropriations processes. These processes are complex. For example, ED receives both mandatory and discretionary appropriations; ED is annually provided forward funds and advance appropriations for some\u2014but not all\u2014discretionary programs; ED awards both formula and competitive grants; and a portion of ED's budget subsidizes student loan costs (through both direct loans and loan guarantees). ", "Because of this complexity, analyzing ED's budget requires an understanding of a broad range of federal budget and appropriations concepts. This report provides an introduction to these concepts as they are used specifically in the context of the congressional appropriations process for ED. It was designed for readers who are new or returning to the topic of ED budget and appropriations. The first section of this report provides an introduction to key terms and concepts in the federal budget and appropriations process with special relevance for ED. The second section answers frequently asked questions (FAQs) about federal funding for the department, as well as closely related questions about education funding in general. The third section includes a brief description of, and links to, reports and documents that provide more information about budget and appropriations concepts. ", "The scope of this report is generally (but not exclusively) limited to concepts associated with funding provided to ED through the annual appropriations process. It does not address all possible sources of federal funding for education, training, or related activities. For example, it does not seek to address education tax credits, student loans, or education and training programs at agencies other than ED. Where this report does address such topics, it does so in order to provide broad context for questions and key terms related to the appropriations process for ED. This report also addresses some frequently asked questions about education funding in general. "], "subsections": []}, {"section_title": "Key Concepts and Terms", "paragraphs": ["The following section provides an introduction to selected key terms and concepts used in the congressional debate about federal funding for ED ."], "subsections": [{"section_title": "Budget Authority, Obligation, Outlay, and Rescission", "paragraphs": ["In the federal budget process, the concept of spending is broken down into three related but distinct phases\u2014budget authority, obligation, and outlay. Budget authority is the authority provided by federal law to enter into financial obligations that will result in immediate or future expenditures (or outlays ) involving federal government funds. For reasons that are explained below, the amounts of budget authority, obligations, and outlays in a fiscal year are rarely the same for a budget account (or activity in that account). For example, ED's Education for the Disadvantaged account in FY2017 had $16.805 billion in total budget authority. That is, ED had legal authority to spend up to $16.805 billion in federal funds for the purposes associated with this account (which consists primarily of grants allocated to local educational agencies). During that same fiscal year, ED newly obligated (i.e., committed to spend) $16.789 billion of that available budget authority. Total outlays during FY2017 in the Education for the Disadvantaged account were $16.237 billion. ", "Budget authority can only be provided through the enactment of law, and generally its amount, purpose, and the time period in which it may be used is specified. Budget authority may be for a broad set of purposes (e.g., improving the academic achievement of disadvantaged children) or for a particular purpose (e.g., obtaining annually updated local educational agency-level census poverty data from the Bureau of the Census). The amount of the budget authority is usually defined in specific terms (e.g., $10 billion) but sometimes is indefinite (e.g., \"such sums as may be necessary\"). The time element of budget authority provides a deadline as to when the funds must be obligated\u2014one fiscal year, multiple fiscal years, or without fiscal year restriction (referred to as \"no year\" budget authority). ", "Once an agency receives its budget authority, it may take actions to obligate it legally, for example, by signing contracts or grant agreements. Over the course of a fiscal year, an agency may obligate budget authority that was first provided during that year or was provided in a prior fiscal year with a multiyear or no-year period of availability. Generally, all obligations must occur prior to the deadline associated with the budget authority. It is not until those obligations are due to be paid (i.e., become outlays) that federal funds from the Treasury are used to make the payments. ", "In addition to the amount of budget authority that is available to be obligated, the primary factor that affects the total amount of obligations in a fiscal year is when they are due. For example, outlays to pay salaries usually occur over the course of the year that the budget authority is made available because those payments must occur regularly (e.g., every two weeks). In contrast, outlay s for a construction project may be structured to occur over several years as various stages of the project are completed. Outlays are reported in the fiscal year in which they occur, even those outlays that result from budget authority that first became available in previous fiscal years.", "Budget authority that reaches the end of its period of availability is considered to have \"expired.\" At this point, no new obligations may be incurred, although outlays to liquidate existing obligations are generally allowable, usually up to five fiscal years after the budget authority expired. Once that liquidation period has ended, it is generally the case that no further outlays may occur and the agency is to take administrative steps to cancel any remaining budget authority. ", "Rescissions are generally provisions of law that repeal unobligated budget authority prior to its expiration. Such provisions may be used to eliminate budget authority for purposes that are considered to be outdated or no longer desirable. Rescissions also may be used to offset increases in budget authority for higher-priority activities."], "subsections": []}, {"section_title": "Authorizations and Appropriations", "paragraphs": ["The congressional budget process generally distinguishes between two types of measures\u2014 authorizations , which create or modify federal government programs or activities, and appropriations , which fund those activities. The provisions within authorization measures may be further distinguished as either enabling or organic provisions (e.g., statutory language or acts that authorize certain programs, policies, or activities) or express authorizations of appropriations provisions (e.g., statutory language or acts that recommend a future funding level for authorized programs, policies, or activities). These distinctions between authorizations and appropriations, and between the types of authorization provisions, are important for understanding why programs with \"expired\" authorizations can continue to function. This section focuses on the distinction between appropriations and enabling or organic authorizations; the section titled \"Authorization of Appropriations \" addresses the authorization of funding levels. ", "Enabling or organic authorizations may be generally described as statutory provisions that define the authority of the government to act. These acts establish, alter, or terminate federal agencies, programs, policies, and activities. For example, the Economic Opportunity Act of 1964 (P.L. 88-452) contained statutory provisions that established the Federal Work-Study (FWS) program. The Higher Education Opportunity Act of 2008 (HEOA, P.L. 110-315 ) contained statutory provisions that altered and continued (e.g., \"reauthorized\") FWS. Authorization measures may also address organizational and administrative matters, such as the number or composition of offices within a department. Authorization measures are under the jurisdiction of legislative committees, such as the House Committee on Education and Labor and the Senate Committee on Health, Education, Labor and Pensions.", "Authorizations may be permanent or limited-term. Permanent authorizations remain in place until Congress and the President enact a law or laws to amend or repeal the authorization. Most ED authorizations are permanent. For example, Title I-A of the Elementary and Secondary Education Act of 1965, as amended and reauthorized by the Every Student Succeeds Act (ESSA, P.L. 114-95 ), gives ED the authority to provide aid to local educational agencies (LEAs) for the education of disadvantaged children. In general, unless Congress and the President enacted legislation to repeal provisions of Title I-A, ED may distribute any budget authority it receives for such aid in accordance with the program parameters defined in such statutory language.", "Limited-term authorizations end after a specified period of time, typically without requiring further legislative action. (These are sometimes called sunset provisions .) For example, the statute authorizing the Advisory Committee for Student Financial Assistance (ACSFA, 20 U.S.C. 1098(k)) specifies that ACSFA was authorized from the date of enactment until October 1, 2015. At that point, ACSFA was disbanded. The authorizations for some programs are intended to receive legislative action on a regular basis, as the authorities for those programs expire, while others are expected to receive legislative action as needed and not on a regular schedule.", "Appropriations measures, on the other hand, are typically enacted annually and provide new budget authority for agencies, programs, policies, and activities that are already authorized and are under the jurisdiction of the House Appropriations Committee and the Senate Appropriations Committee. That is, appropriations give federal agencies the authority to use a certain amount of federal funds for program purposes that are usually specified in authorization acts. For example, the Department of Defense and Labor, Health and Human Services, and Education Appropriations Act, 2019 and Continuing Appropriations Act, 2019 ( P.L. 115-245 ) appropriated $71.4 billion in discretionary budget authority to ED, of which $22.5 billion was specifically for the Pell Grant program. ", "Budget authority that is provided in appropriations measures may be available for a single fiscal year, multiple fiscal years (or portions thereof), or an indefinite period of time. For example, P.L. 115-245 provided budget authority that was available for one year for ED's Indian Education account, a year-and-a-quarter for Special Education, and two years for Impact Aid.", "In general, during a calendar year Congress may consider the following:", "12 regular appropriations bills for the fiscal year that begins on October 1 (often referred to as the budget year) to provide the annual funding for the agencies, projects, and activities funded therein; one or more continuing resolutions for that same fiscal year, to provide temporary funding if all 12 regular appropriations bills are not enacted by the start of the fiscal year; and one or more supplemental appropriations measures for the current fiscal year, to provide additional funding for selected activities over and above the amount provided through annual or continuing appropriations. ", "Congress typically includes most regular annual ED appropriations in the Departments of Labor, Health and Human Services, and Education, and Related Agencies appropriations bill. "], "subsections": []}, {"section_title": "\"Authorization of Appropriations\"", "paragraphs": ["In addition to enabling or organic authorizations that establish the authority for federal government activities and appropriations that provide the authority to actually expend federal funds on those activities, laws may include provisions that provide an explicit authorization of appropriations . ", "An authorization of appropriations (or, alternatively, appropriations authorization) is a provision of law that essentially recommends a funding level for a program or agency in a given fiscal year. Appropriations authorizations may include a range of fiscal years and a specific funding level for each fiscal year within that range (e.g., $10 million in FY2007, $12 million in FY2008, etc.); may be indefinite (e.g., \"such sums as may be necessary\"); or may not be provided at all. For example, Section 1002 of the Elementary and Secondary Education Act of 1965, as amended and reauthorized by the Every Student Succeeds Act (ESSA, P.L. 114-95 ), includes an authorization of appropriations provision effectively recommending a specific funding level ($15.9 billion) for the Title I-A program in a certain fiscal year (FY2019). ", "Contrary to common misconception, an authorization of appropriations does not convey actual budget authority. Further, a lapse or gap in the fiscal years covered by an authorization of appropriations (its \"expiration\") does not usually affect the underlying organic authorization, which provides authority to the federal government to engage in the programs or activities to which the authorization of appropriations relates. If appropriations are provided for programs with an expired authorization of appropriations, federal agencies generally would have sufficient legal authority to implement and operate these programs. This is because an authorization of appropriations is \"basically a directive to Congress itself, which Congress is free to follow or alter (up or down) in the subsequent appropriation act.\" ", "Authorizations of appropriations, however, are significant for the purposes of congressional rules. House and Senate rules require that a purpose must have been \"authorized\" prior to when discretionary appropriations are provided. While simply establishing an entity, program, or activity in law generally satisfies that authorization requirement, sometimes provisions are enacted that explicitly authorize future appropriations (\"authorizations of appropriations\"). If the period of time for which an authorization of appropriations has been provided lapses and is not renewed\u2014for example, at the start of FY2010, if the authorization of appropriations ended in FY2009\u2014then subsequent appropriations for those purposes are sometimes described as being \"unauthorized\" from the perspective of House and Senate rules and could be subject to a point of order during floor consideration. However, such points of order are frequently waived."], "subsections": []}, {"section_title": "Discretionary and Mandatory Spending (Including Appropriated Mandatory Spending)", "paragraphs": ["There are two broad categories of budget authority in the federal budget and appropriations process: discretionary spending and mandatory spending . ED receives both kinds of spending, but there are important distinctions between them that are relevant to understanding both how ED receives federal funding and how much it receives.", "Discretionary spending is budget authority that is provided and controlled by appropriations acts. This spending is for programs and activities that are authorized by law, but the amount of budget authority for those programs and activities is determined through the annual appropriations process. Even if a discretionary spending program has been authorized previously, Congress is not required to provide appropriations for it or to provide appropriations at authorized levels. For example, Section 399 of the Higher Education Act, as amended (HEA), authorized discretionary appropriations of $75 million in FY2010 for the Predominantly Black Institutions (PBIs) program authorized under HEA, Section 318. However, actual discretionary appropriations for the Section 318 PBI program in FY2010 were $10.8 million.", "Mandatory spending is budget authority that is controlled by authorizing acts. Such spending includes \"entitlements,\" which are programs that require payments to persons, state or local governments, or other entities if those entities meet specific eligibility criteria established in the authorizing law. This budget authority may be provided through a one-step process in which the authorizing act sets the program parameters (usually eligibility criteria and a payment formula) and provides the budget authority for that program. Such funding remains available automatically each year for which it is provided, without the need for further legislative action by Congress. For example, HEA, Section 420R provides mandatory appropriations for Iraq and Afghanistan Service Grants (IASG).", "Sometimes, however, the authorizing statute for an entitlement does not include language providing authority to make the payment to fulfill the legal obligation that it creates. Under this approach to mandatory spending, the budget authority is provided in appropriations measures. Such spending is referred to as appropriated mandatory spending or an \"appropriated entitlement\" and occurs through a two-step process. First, authorizing legislation becomes law that sets program parameters (through eligibility requirements and benefit levels, for example), then the appropriations process is used to provide the budget authority needed to finance the commitment. ", "As with mandatory spending, congressional appropriations committees have limited control over the amount of budget authority provided for appropriated mandatory spending because the amount needed is the result of previously enacted commitments in law. In other words, the authorizing statute for appropriated mandatory spending establishes a legal obligation to make payments (such as an entitlement) and the funding in annual appropriations acts is provided to fulfill that legal financial obligation. Because the cost of appropriated mandatory programs may vary from year to year, the funding that is provided through the annual appropriations process is based on a projection of costs for the relevant fiscal year.", "Most ED line items included in regular annual appropriations acts are discretionary. One exception to this is the Vocational Rehabilitation State Grants program, which is appropriated mandatory spending. "], "subsections": []}, {"section_title": "302(a) and 302(b) Allocations", "paragraphs": ["The concepts in this section relate to how Congress decides the amount of discretionary and mandatory funding to appropriate each fiscal year, which ultimately impacts how much funding ED is provided. Generally speaking, Congress does not start by estimating the cost of every ED program and adding those amounts to reach a total. What happens instead (typically) is that the House and the Senate agree on a total for all federal spending through a budget resolution. That amount is then divided between appropriations and authorizing committees. The appropriations committees then divide their portions among each of their subcommittees. Each subcommittee then determines funding levels for the agencies within its jurisdiction. This is called the 302(a) and 302(b) allocation process.", "More specifically, the Congressional Budget and Impoundment Control Act of 1974 (CBA) requires that Congress adopt a concurrent resolution on the budget each fiscal year. This budget resolution constitutes a procedural agreement between the House and the Senate that establishes overall budgetary and fiscal policy to be carried out through subsequent legislation. The spending elements of the agreement establish total new budget authority and outlay levels for each fiscal year covered by the resolution. The agreement also allocates federal spending among 20 functional categories (such as national defense; transportation; and education, training, employment, and social services), setting budget authority and outlay levels for each function.", "Within each chamber, the total new budget authority and outlays for each fiscal year are also allocated among committees with jurisdiction over spending, thereby setting spending ceilings for each committee. These ceilings are referred to as the 302(a) allocations . The 302(a) allocation to each of the authorizing committees (such as the Senate Health, Education, Labor and Pensions Committee) establishes spending ceilings on the mandatory spending under each committee's jurisdiction. The 302(a) allocations to the House and the Senate appropriations committees include discretionary spending and also appropriated mandatory spending. ", "Once the appropriations committees receive their spending ceilings, they separately subdivide the amount among their respective subcommittees, providing spending ceilings for each subcommittee. These spending ceilings are referred to as 302(b) suballocations . For example, for FY2019 the amount of the initial 302(a) allocation to the House Appropriations Committee was $1.2 trillion for discretionary budget authority and $955 billion for appropriated mandatory budget authority. The appropriations subcommittee that is responsible for funding ED is the Labor, Health and Human Services, Education, and Related Agencies (LHHS) subcommittee. When the committee apportioned that allocation among its 12 subcommittees, the initial suballocation for the LHHS subcommittee was $177 billion for discretionary budget authority and $783 billion for appropriated mandatory budget authority. ", "The congressional allocations are of budget authority for the upcoming fiscal year. Budget authority enacted in previous fiscal years that first becomes available for obligation in the upcoming fiscal year counts against the congressional allocations for the upcoming fiscal year. (This type of budget authority is referred to as \"advance appropriations\" and is discussed further in the section \" \"Carry Forward,\" Advance Appropriations, and Forward Funding .\")"], "subsections": []}, {"section_title": "Fiscal Year, Award Year, and Other Units of Time", "paragraphs": ["Department of Education budget, appropriations, and program-related data may be reported using a variety of different \"years\" or units of time. These units of time include the fiscal year, calendar year, academic or school year, and the award year. Readers are cautioned to remain alert to the unit of time when considering and comparing various funding levels reported for ED activities. To be strictly comparable, the units of time must be the same.", "When the federal government accounts for the funds it has budgeted, appropriated, or spent, the unit of time it uses is the fiscal year (FY). The federal fiscal year is generally the 12-month period between October 1 and the following September 30. The current year is the fiscal year that is in progress; the prior year is the fiscal year immediately preceding the current year. Outyears are any future fiscal years beyond the current year. The fiscal year is the standard unit of time used in the congressional appropriations process; most funding levels in appropriations bills and committee documents are reported by fiscal year.", "The federal fiscal year differs from the calendar year (January 1 to December 31), the typical academic or school year (fall to spring), and the federal student aid award year (July 1 through the following June 30). Annual funding levels reported in ED budget and program-related documents may use one or more of these different units of time. For example, ED's FY2019 congressional budget justification includes both fiscal year and award year funding levels for the Pell Grant program. These funding levels are not strictly comparable. "], "subsections": []}, {"section_title": "\"Carry Forward,\" Advance Appropriations, and Forward Funding", "paragraphs": ["Funding for federal programs that is provided in regular appropriations acts is usually available for obligation at the start of the fiscal year and may only be obligated during that fiscal year unless otherwise specified. Budget authority also may be provided for more than one fiscal year (\"multiyear\") or without fiscal year limitation (\"no-year\"). (See section on \" Authorizations and Appropriations .\") In other words, in some cases, budget authority may be obligated over multiple fiscal years or may be available to be obligated indefinitely (until it is exhausted).", "The concept of carry forward (or carry over ) applies to budget authority that was enacted and became available in a previous fiscal year and is still available for obligation in the next fiscal year. (If a federal agency has not entirely obligated its multi- or no-year budget authority by the end of the fiscal year, any unexpired multiyear budget authority and all remaining no-year budget authority may continue to be available for obligation in the next fiscal year.) Such carry forward budget authority is typically notated as \"unobligated balances brought forward\" in the OMB Appendix to the annual budget. For example, the FY2019 OMB Appendix reports that budgetary resources available to the Education for the Disadvantaged account in FY2017 included $660 million in unobligated balances brought forward (of $16.805 billion, total).", "The concepts of advance appropriations and forward funding relate to when such funding first becomes available to be obligated relative to the timing of its enactment and thus differ significantly from carry forward. With advance appropriations and forward funding, the budget authority becomes available for obligation at a point in time that is delayed beyond the start of the fiscal year. ", "Advance appropriations become available for obligation starting at least one fiscal year after the budget year. Forward funding becomes available beginning late in the budget year and is carried into at least one following fiscal year.", "Federal accounts and programs may receive annual appropriations, advance appropriations, forward funding, or a mixed approach. The most common mixed approach used in ED appropriations combines advance appropriations and forward funding. ", " Figure 1 illustrates the period of availability for annual appropriations, forward funding, and advance appropriations. It also includes an illustration of the default (or typical) period of availability for annual appropriations.", "The period of availability for budget authority in ED's accounts does not usually follow a single rule. In a typical appropriations act, some ED accounts and programs will receive annual appropriations (e.g., Indian Education), while others will receive appropriations under a mixed approach including advance appropriations and forward funding (e.g., ESEA Title I). In general, the advance appropriations-forward funding combination is used for accounts that provide funds to recipients (such as elementary and secondary schools) who might experience service disruptions if they received funds aligned with the federal fiscal year and not the academic or school year. One advantage of this approach is that it allows schools to obligate funds prior to the start of the school year. It also gives schools time to plan for, and adjust to, changes in federal funding levels."], "subsections": []}, {"section_title": "Budget Caps and Sequestration", "paragraphs": ["The Budget Control Act of 2011 (BCA, P.L. 112-25 ) sought to reduce the federal budget deficit through a variety of budgetary mechanisms, including the establishment of limits (or caps ) on discretionary spending and automatic spending reductions (known as sequestration ) for both discretionary and mandatory spending. The BCA only places limits on discretionary spending, and the purpose and triggers for budgetary reductions through sequestration differ significantly between discretionary and mandatory spending. In addition to describing how the BCA operates in light of these key distinctions, the following sections discuss the implications of the BCA for ED."], "subsections": [{"section_title": "Discretionary Spending Limits", "paragraphs": ["The BCA imposes separate limits on \"defense\" and \"nondefense\" discretionary spending each fiscal year from FY2012 to FY2021. The defense category includes all discretionary spending under budget function 050 (defense). The nondefense category includes discretionary spending in all the other budget functions. In general, discretionary budget authority for ED is subject to the nondefense limit. ", "If discretionary spending is enacted in excess of the statutory limits, enforcement primarily occurs through sequestration, which is the automatic cancelation of budget authority through largely across-the-board reductions of nonexempt programs and activities. The purpose of sequestration is to reduce the level of spending subject to the discretionary spending limit so that it no longer exceeds that limit. Any across-the-board reductions through sequestration affect only nonexempt spending subject to the breached limit, and they are in the amount necessary to reduce spending so that it complies with the limit. ", "Pursuant to procedures under the BCA, the discretionary spending limits initially established by that act are to be further lowered each fiscal year to achieve certain additional budgetary savings. The amount of the revised limits for the upcoming fiscal year is calculated by OMB and reported with the President's budget submission each year. The timing of this calculation, which occurs many months prior to the beginning of the fiscal year, is intended to allow time for congressional consideration of appropriations measures that comply with the revised limits. Since the enactment of the BCA, however, a series of laws have been enacted that supersede the spending limit level that otherwise would have been established by the OMB calculation. The effect of these laws in most cases has been to increase the limits above what they otherwise would have been. The most recent such law, which increased the spending limits for FY2018 and FY2019, was the Bipartisan Budget Act of 2018 (BBA 2018, P.L. 115-123 )."], "subsections": []}, {"section_title": "Mandatory Spending Sequestration", "paragraphs": ["In addition to the lowered discretionary spending limits, the BCA provides for reductions to mandatory spending each fiscal year, which are also achieved through sequestration. (Some mandatory spending is exempt from these automatic reductions.) However, mandatory spending sequestration differs from discretionary spending sequestration in that it occurs automatically each fiscal year, and is not triggered by spending levels or other budgetary factors. In other words, mandatory spending sequestration in the BCA context is used as a means to automatically reduce that type of spending each fiscal year on a largely across-the-board basis.", "The amount of the reduction to defense and nondefense mandatory spending is calculated by OMB and announced at the same time as the reductions to the statutory discretionary spending limits each fiscal year (with the President's budget submission). Nonexempt mandatory budget authority at ED is subject to the nondefense reduction. "], "subsections": []}, {"section_title": "The BCA and ED Funding", "paragraphs": ["The BCA affects funding levels at ED in several ways. In establishing caps on total federal discretionary budget authority\u2014caps which are the basis for the allocations of both total federal spending and the division of that amount to each of the appropriations subcommittees through the 302(a) and 302(b) processes (discussed above)\u2014the BCA can impact total discretionary funding at ED. Further, if those caps are exceeded, ED's discretionary budget authority may be subject to sequestration. Since the BCA has been in effect, a discretionary spending sequestration has only occurred once\u2014in FY2013. ", "For ED programs that receive nonexempt mandatory funding, the BCA requires an annual sequester in an amount calculated by OMB. The dollar amount of the reduction for a particular ED account is based on the percentage by which nonexempt mandatory spending in the nondefense category needs to be cut to achieve the total required savings. For example, in FY2018 mandatory funds in the Rehabilitation Services and Disability Research, Higher Education, TEACH Grant Program, IASG, and Student Financial Assistance Debt Collection accounts were subject to the nondefense mandatory sequestration that was calculated based on a reduction of 6.6%. For FY2019, this reduction is 6.2%. ", "For both mandatory and discretionary spending sequestration, the dollar amount that is canceled in each account differs depending on the amount of sequesterable budgetary resources in that account. For example, for the FY2013 sequester, OMB calculated that nondefense discretionary spending would need to be reduced by 5%. The English Language Learner account, which had total sequesterable budgetary resources of $737 million, would thus be reduced by $37 million (5% of $737 million). Likewise, Impact Aid had sequesterable budgetary resources of $1.299 billion and was reduced by $65 million (5% of $1.3 billion).", "Some ED programs, such as the Pell Grant program, are exempt from sequestration or follow special rules. For example, during periods when a sequestration order is in effect for mandatory spending, the BCA directs that origination fees charged on federal student loans made under the William D. Ford Federal Direct Loan program must be increased by the nondefense, mandatory sequestration percentage. For more information, see CRS Report R42050, Budget \"Sequestration\" and Selected Program Exemptions and Special Rules .", "Readers are cautioned, when comparing or analyzing funding levels for ED accounts and programs, to assess whether such funding levels reflect pre- or post-sequestration funding levels. Administration and congressional budget and appropriations materials may use pre- or post-sequestration amounts, or both."], "subsections": []}]}, {"section_title": "Transfer and Reprogramming", "paragraphs": ["Both authorization and appropriations measures may also provide transfer authority. Transfers shift budget authority from one account or fund to another or allow agencies to make such shifts. Agencies are prohibited from making transfers between accounts without statutory authority. For example, in FY2019 the appropriations act that funded ED provided that up to 1% of any discretionary budget authority appropriated to the department could be transferred between accounts, subject to certain restrictions.", "Agencies may, however, generally shift budget authority from one activity or program to another within an account without additional statutory authority. This is referred to as reprogramming . For example, in FY2016 ED shifted $158,336 from the Strengthening Native American-serving Nontribal Institutions program that would have otherwise lapsed to the Fund for the Improvement of Postsecondary Education/First in the World (FIPSE/FITW) program using reprogramming authority. The appropriations subcommittees have established notification and other oversight procedures for various agencies to follow regarding reprogramming actions. Generally, these procedures differ with each subcommittee. For instance, in FY2019 reprogramming requirements applicable to ED were carried in the appropriations act that funded the department. Those requirements included consultation with the House and the Senate appropriations committees, as well as written notification, ahead of reprogramming actions that met certain criteria. "], "subsections": []}, {"section_title": "Formula and Competitive Grants", "paragraphs": ["The Department of Education uses one of two processes to distribute the funds it receives for grant making. It may distribute such funds by mathematical formula \u2014usually such formulas are predetermined and established in statute\u2014or through merit-based competitions . ", "ED's Title I, Part A program, for example, is a formula grant program. It provides funding to local educational agencies (through state educational agencies) using various mathematical formulas that consider the number of school-age children in poverty, state average per-pupil expenditures, and similar variables. The Innovative Approaches to Literacy program, on the other hand, is a merit-based competitive grant program. Applicants must meet certain criteria (such as whether they promote science, technology, engineering, and math education) and are awarded points based on how well they meet those criteria. Applicants with the highest weighted scores receive grants. "], "subsections": []}, {"section_title": "Block and Categorical Grants", "paragraphs": ["Policy debates about education funding sometimes focus on whether funds ought to be provided through block grants or categorical grants . Block grants are general or multipurpose grants that, in the federal education context, are typically awarded to states through a formula-based process. Block grant funding may be used for a wide variety of purposes. Awardees (not federal officials) determine how to use such funds within a broad set of options. For example, the Elementary and Secondary Education Act, as amended by ESSA ( P.L. 114-95 ), authorized a new block grant program at ED called \"Student Support and Academic Enrichment Grants.\" Formula funding provided through this block grant could serve a variety of purposes. Such purposes include providing all students with access to a well-rounded education, improving school conditions for student learning, and improving the use of technology in order to improve the academic achievement and digital learning of all students.", "Categorical grants, on the other hand, are typically available for a more narrow and defined set of purposes or program activities. They may be distributed by formula or competition. ED's Carol M. White Physical Education program, which provides funds to schools and community-based organizations to initiate, expand, or enhance physical education programs, is an example of a competitively awarded categorical grant. (ESSA incorporated this program into the Student Support and Academic Enrichment block grant.) "], "subsections": []}, {"section_title": "Matching Funds or Requirements", "paragraphs": ["Some federal grants include what are known as matching requirements. In such scenarios, federal funds or assistance are granted to awardees who are willing and able to \"match\" federal funds with a nonfederal contribution (such as funding from state government or private sources). This nonfederal contribution is called the \"nonfederal share.\" Typically, matching fund requirements specify that the nonfederal share must meet or exceed a certain percentage of the federal award amount (such as 20% or 50%). Depending on the grant requirements, nonfederal matching contributions may be in cash or what is known as \"in-kind\" (such as computer equipment or staff time), or a combination of the two. For example, the maximum federal share of compensation in the Federal Work-Study program (which provides funding to support part-time employment of needy college and university students) is 75% (with certain exceptions). Institutions participating in the Work-Study program are required to provide the remaining 25%."], "subsections": []}]}, {"section_title": "Frequently Asked Questions", "paragraphs": ["The following section includes frequently asked questions about the budget and appropriations process for ED (and closely related topics). "], "subsections": [{"section_title": "How much funding does the Department of Education receive annually?", "paragraphs": ["ED's annual budget includes two types of spending: discretionary and mandatory. In FY2019, ED received approximately $71 billion in budget authority through the annual discretionary appropriations process. About three-quarters of these funds ($52 billion) were distributed to local educational agencies to provide supplementary educational and related services for disadvantaged and disabled children or to low-income postsecondary students (in the form of Pell Grants, which provide financial assistance for college).", "ED also has programs that receive mandatory funding directly through their authorizing statutes. These programs received about $2.5 billion in net funding in FY2019. However, most of ED's mandatory funding is for student loan subsidies. In some years, the net cost of student loan subsidies is positive (i.e., there is a cost to the government for providing the subsidy); in other years the net cost of student loan subsidies is negative (i.e., the government received fees and other receipts in excess of subsidy costs). Because of this dynamic, ED's \"total\" budget can vary widely from year to year. (See Table 1 .)"], "subsections": []}, {"section_title": "How much does the federal government spend on education?", "paragraphs": ["In short, the answer depends on what federal accounts or activities are defined as \"education spending,\" on the point in the fiscal year when budget authority is estimated, and which federal agency is reporting. Any aggregation of federal funding provided for educational purposes across agencies or accounts requires judgements about which activities should be counted (in whole or in part) and about how such activities should be grouped (e.g., higher education, K-12, etc.). Moreover, any such exercise may be limited by the granularity of information available about the use of the funds. Complicating the situation is the fact that federal funding for education overlaps with (but is not the same as) funding for ED.", "The following sections explore and describe two commonly referenced ways that the federal government accounts for the funds it spends on education: by Treasury Department function code and as calculated and tracked in ED's Digest of Education Statistics . "], "subsections": [{"section_title": "Function 500", "paragraphs": ["The Treasury Department classifies all federal funding according to certain numbered functions (e.g., Health (550) and Transportation (400)) and by numbered subfunctions (e.g., Health Care Services (551) and Health Research and Training (552)). The Congressional Budget Office (CBO), Office of Management and Budget (OMB), and congressional budget process also use this same taxonomy.", "Federal education funding is included in function 500 (Education, Training, Employment, and Social Services). Within function 500, subfunction 501 includes elementary, secondary, and vocational education; and subfunction 502 includes higher education. While these are two of the primary areas in which federal education funding is concentrated, simply adding the totals for these two subfunctions does not capture all federal funding for education. For example, other subfunctions, such as 503 (research and general education aids) and 504 (training and employment), could be considered federal education spending as well. Additionally, subfunction 506 (social services) includes ED's Rehabilitation Services and Disability Research Account.", "Furthermore, only a portion of total outlays for subfunctions 501 and 502 were spent by ED, and not all ED funding is classified as function 500. For example, other agencies (such as the National Science Foundation and National Institutes of Health) provide federal funds for educational programs and activities that may be captured in the totals for subfunctions 501 and 502. In addition, some ED programs and activities are classified under other functional categories, such as the Office for Civil Rights (subfunction 751, federal law enforcement activities)."], "subsections": []}, {"section_title": "Digest of Education Statistics", "paragraphs": ["ED's National Center for Education Statistics (NCES) tracks federal funding for education and related activities in the periodically updated Digest of Education Statistics ( Digest ). Funding data in Digest tables may represent appropriations or outlays. Major Digest federal education funding tables present data on federal support for education broken down by program, agency, state, education level, and other facets.", "As per Table 401.10, \"Federal support and estimated federal tax expenditures for education, by category,\" the federal government provided $228.4 billion in direct budget authority (measured primarily as outlays, but sometimes as obligations) for education (broadly defined to include research grants to universities) in FY2017. If nonfederal funds generated by federal legislation are included, the amount was $322.6 billion."], "subsections": []}]}, {"section_title": "Where can information be found about the President's budget request and congressional appropriations for the Department of Education?", "paragraphs": ["The ED congressional budget justifications, which provide details about the President's budget request for the department, are published on the department's website. ", "Appropriations for many (but not all) ED accounts are typically included in annual Departments of Labor, Health and Human Services, and Education, and Related Agencies appropriations acts. The Congressional Research Service (CRS) tracks these acts\u2014including related bills and committee reports\u2014each year."], "subsections": []}, {"section_title": "How much ED funding is in the congressional budget resolution?", "paragraphs": ["As discussed in the \" 302(a) and 302(b) Allocations \" section of this report, the budget resolution sets procedural parameters for the consideration of mandatory and discretionary spending legislation; those parameters are enforceable by points of order. The budget resolution does not provide actual funding for ED or any other purpose. ", "While the procedural parameters in the budget resolution do involve underlying assumptions about levels of funding for particular purposes, there are two general reasons why the amount of funding assumed for ED (or education-related purposes) in the annual congressional budget resolution cannot be determined by CRS. First, the procedural parameters in the budget resolution allocate funding by congressional committee and not by department. Because the jurisdiction of the relevant authorizing committees and appropriations subcommittees encompasses more than ED, it is not possible to determine the assumed amount of funding for ED through those allocations. Second, although the basis of those authorizing committee and appropriations subcommittee allocations is a distribution of funding based on \"functional categories,\" those functional categories do not neatly correspond to ED or education-related purposes. (Functional categories are discussed in the section \" How much does the federal government spend on education? \") As a result, absent specific information with regard to the budget resolution from the House or the Senate budget committees, it is not possible for CRS to determine amounts of funding for ED or education-related purposes that are assumed by the budget resolution."], "subsections": []}, {"section_title": "What is the difference between the amounts in appropriations bills and report language?", "paragraphs": ["The answer to this question centers on the force of law. Funding levels included in House and Senate appropriations bills are proposed until enacted. That is to say, until an appropriations bill is signed by the President (i.e., it is enacted), the funding levels included therein simply represent what each appropriations committee or subcommittee\u2014or if the bill has passed the House or the Senate, that chamber\u2014proposes to appropriate for the various programs and agencies included in that bill. Once Congress and the President enact an appropriations measure, the funding levels included in that act are statutorily established and provide a legal basis for agencies to obligate and expend that funding. Appropriations acts, therefore, carry the force of law.", "Funding levels and program directives included in House and Senate appropriations committee reports are committee recommendations and are not usually legally binding. (In some cases, report language is enacted by reference in the appropriations act that it accompanies, giving it statutory effect.) However, while report language itself generally is not law, agencies usually seek to comply with it because it represents congressional intent.", "Typically, report language is used to supplement legislative text at either of two stages in the congressional appropriations process. First, as noted, reports may accompany annual appropriations bills reported by the House or the Senate appropriations committees. If these committee reports differ with respect to a particular funding level or program directive (e.g., the House Appropriations Committee report recommends setting the maximum discretionary portion of Pell Grants at $5,035 and the Senate report recommends setting it at $5,135), a joint explanatory statement (JES) may be used to reconcile conflicting language and also provide additional instructions. (The JES is sometimes referred to colloquially as a conference report , though from a technical standpoint, it is not. The JES accompanies the conference report, which contains only legislative text.) ", "For appropriations measures that are not reported from an appropriations committee but still receive congressional consideration\u2014or when differences are resolved through an amendment exchange and not a conference committee process\u2014an explanatory statement from an appropriations committee is sometimes entered into the Congressional Record . This language may be regarded similarly to report language. When this text is used during the resolving differences phase of the legislative process, such statements can serve the same purposes and function as a JES."], "subsections": []}, {"section_title": "What happens to education funding if annual appropriations are not enacted before the start of the federal fiscal year?", "paragraphs": ["It depends. First, Congress and the President may provide partial-year funding through a temporary appropriations law, often referred to as a \"continuing resolution\" (CR), while they negotiate agreement on annual appropriations that have yet to be enacted. CRs typically (but not always) provide appropriations at a rate based on the previous fiscal year's appropriations acts and for the same purposes as those provided in the previous fiscal year. (Adjustments in funding levels or allowable activities must be specified in the CR.) The typical effect, then, of providing federal education funding through a continuing resolution is that planned or proposed changes to federal education programs may not occur or may be delayed. In addition, while a CR is in effect, ED makes limited obligations until budget authority for the entire fiscal year is enacted.", "If appropriations actually lapse, the effects of that lapse\u2014including whether a shutdown of agency operations commences\u2014will depend on a variety of factors. Several factors that might mitigate the effects of a lapse include", "the extent to which unexpired budget authority is available for ED to obligate during the period of the lapse (generally, such funding would be multiyear or no-year budget authority enacted in prior fiscal years, including as forward funds or advance appropriations); the extent to which ED staff who would regularly administer programs or funds are furloughed as a consequence of the lapse; the timing of the grant cycle for individual grant programs and the type of funds that are typically awarded and distributed; and the availability of alternative sources of funding that can be used (temporarily or on an ongoing basis) to sustain supported activities."], "subsections": []}, {"section_title": "What happens if an ED program authorization \"expires\"?", "paragraphs": ["As discussed in the sections titled \" Authorizations and Appropriations \" and \"Authorization of Appropriations,\" most of ED's enabling or organic program authorizations are permanent. Therefore, unless the program's enabling authorization specifically includes a sunset provision, or Congress and the President enact legislation repealing the enabling authorization, the program can continue so long as Congress continues to fund it through the appropriations process. ", "This remains true, in general (but not always), even if the program's authorization of appropriations has expired and the GEPA extension has lapsed. (See text box titled, \"GEPA and Appropriations Authorizations at ED.\") This is because an authorization of appropriations is a directive from Congress to itself and does not typically function as a sunset provision for the program or purpose to which it relates. An expired authorization of appropriations may, however, lead to a point of order during floor consideration against an appropriations measure or amendment under certain circumstances. They are, therefore, significant from the perspective of congressional procedure. "], "subsections": []}]}, {"section_title": "For More Information", "paragraphs": ["Readers seeking additional information on any of the key terms, concepts, and answers to the FAQs included in this report are referred to the authors of this report and to CRS reports on budget and appropriations in general and on education funding in particular. Such reports have been footnoted and linked in the relevant sections of this report. ", "Additionally, readers may wish to consult glossary and budget concepts documents produced by ED, the Congressional Budget Office (CBO), Government Accountability Office (GAO), and Office of Management and Budget (OMB). These include the following:", "Department of Education, Budget Process in the U.S. Department of Education , last modified January 19, 2017, http://www2.ed.gov/about/overview/budget/process.html ; Congressional Budget Office, Glossary , updated July 2016, https://www.cbo.gov/publication/42904 ; U.S. Government Accountability Office, A Glossary of Terms Used in the Federal Budget Progress , GAO-05-734SP, September 1, 2005, http://www.gao.gov/products/GAO-05-734SP ; and Executive Office of the President, Office of Management and Budget, \"Budget Concepts,\" Fiscal Year 2019 Analytical Perspectives of the U.S. Government , https://www.govinfo.gov/content/pkg/BUDGET-2019-PER/pdf/BUDGET-2019-PER-5-1.pdf ."], "subsections": []}]}}
{"id": "R45492", "title": "Water Resource Issues in the 116th Congress", "released_date": "2019-02-07T00:00:00", "summary": ["The 116th Congress may conduct oversight and deliberate on authorization and funding of water resource development, management, and protection. Congress engages in authorization and appropriations for water resource projects and activities of the U.S. Army Corps of Engineers (USACE) and the Bureau of Reclamation (Reclamation). USACE constructs projects nationwide, primarily to improve navigation, reduce flood damage, and restore aquatic ecosystems. Reclamation constructs projects in the 17 arid states west of the Mississippi River; these projects primarily provide water supply benefits, often to agricultural irrigation users. The 116th Congress, like earlier Congresses, also may consider Indian water rights settlements and may evaluate the focus of and funding for the water resource science activities of the U.S. Geological Survey (USGS).", "Development pressures, droughts and floods, and concerns about changing hydrology from land-use change and climate change have engendered nonfederal interest in federal financial and technical assistance for water resource science and projects. Stakeholders are interested in a range of water resource issues, including", "new water resource infrastructure (e.g., storm surge gates, water storage) and new kinds of projects (e.g., groundwater recharge, nature-based flood risk reduction); reinvestment in aging water resource infrastructure and use of water science and real-time monitoring and forecasting to improve infrastructure operations; funding and financing of projects, and whether and how to shift from federally led projects to federal partnerships with state and/or local entities; and activities to protect and restore aquatic ecosystems and enhance flood resilience (including the use of nature-based approaches).", "Some topics arise within the context of specific agencies. USACE-related topics for the 116th Congress may include funding and financing issues, such as use of the Harbor Maintenance Trust Fund; the status of investments in projects to deepen coastal harbors; USACE budgeting priorities; and oversight of USACE efforts to implement public-private partnerships and develop alternative financing opportunities. Some Reclamation-related water project and management issues during the 116th Congress may include the status of proposed new and augmented water storage projects, as well as efforts to address the agency's aging infrastructure and transition certain qualifying projects to nonfederal ownership. Congress also may address Reclamation drought mitigation activities in the Colorado River basin and other areas. In addition, Congress may explore ongoing issues associated with Reclamation's project operations in California and other areas. It may address how these issues affect water deliveries to irrigation districts and municipalities and threatened and endangered species, among others.", "Some topics are international in character. Regarding freshwater bodies shared with Canada, potential topics for the 116th Congress include federal funding for activities supporting Great Lakes restoration and negotiations (and any resulting agreements) with Canada to modify the Columbia River Treaty. Potential topics related to Mexico include oversight of a binational agreement on water sharing during dry conditions in the Colorado River basin and Mexico's deliveries to the United States in the Rio Grande basin.", "Crosscutting topics (i.e., topics relevant to multiple agencies and programs) also are part of congressional water resource deliberations. For example, the 116th Congress may consider the status and priority of new and ongoing federal efforts to restore large-scale aquatic ecosystems that have been altered or impaired by changes to their natural conditions (e.g., Florida Everglades, Chesapeake Bay). Congress may explore the funding and performance of existing restoration efforts, including what changes (if any) may be necessary to improve project delivery and evaluation. The 116th Congress may consider its guidance to multiple federal agencies on how to respond to flood hazards, including efforts related to enhancing the resilience of infrastructure and communities to flooding. There is interest in developing and evaluating approaches that protect natural elements that reduce flood risk (e.g., natural dunes) or are \"nature-based\" in comprehensive flood risk management (e.g., constructed dunes). Congress also may consider legislation and oversight on USACE supplemental appropriations for response to and recovery from floods."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The 116 th Congress may conduct oversight and deliberate on authorizations and appropriations legislation related to water resource development, management, and protection. Demands on available water supplies have heightened local and regional water-use conflicts throughout the country, particularly in the West and Southeast. Development pressures, droughts and floods, and concerns about changing hydrology fro m land-use change and climate change engender nonfederal interest in federal financial and technical assistance for water resource science and projects. There is interest in new water resource infrastructure (e.g., storm surge gates, water storage) and new kinds of projects (e.g., groundwater recharge projects, nature-based flood risk reduction). In addition, there is interest in reinvestment in aging water resource infrastructure and in improved management of available supplies through water science, monitoring, and operational changes. Water resource policy questions relevant to the 116 th Congress include the following:", "What will be the federal role in maintaining the performance and safety of existing water resource infrastructure? Under what conditions and how should the federal government be involved in planning and constructing water resource projects? How may federal and nonfederal water resource science, observation, and monitoring be performed and used to inform water resource management and project design and operation? ", "Congress historically has played a role in water resources through authorization of and appropriations for regional and site-specific projects and activities. Some of the projects are for facilitating navigation and expanding water supplies for irrigation and other uses. Other projects are aimed at reducing flood and drought losses and restoring aquatic ecosystems. Congress principally has directed either the Bureau of Reclamation (Reclamation) in the Department of the Interior (DOI) or the U.S. Army Corps of Engineers (USACE) in the Department of Defense to plan and construct the existing stock of large federal water resource projects. Historically, Reclamation constructed projects in the 17 arid states west of the Mississippi River; these projects were designed principally to provide reliable supplies of water for irrigation and some municipal and industrial uses. USACE constructs projects nationwide that primarily seek to improve navigation, reduce flood damages, and restore aquatic ecosystems. For more on the federal water resource infrastructure, see the Appendix .", "In addition, Congress authorizes and funds selected water resource science and monitoring activities at multiple federal agencies. DOI's U.S. Geological Survey (USGS) has a prominent role in federal water resource science and observation (e.g., streamgages, groundwater information, and other water resource data). ", "In addition to USACE, Reclamation, and USGS, other federal agencies have water-related programs and activities; these other agencies are largely beyond the scope of this report. This report also does not address municipal water systems, municipal wastewater infrastructure, or environmental protections, such as water quality and wetlands regulations.", "This report first discusses some broad categories of water resource topics relevant to the 116 th Congress\u2014projects and activities of USACE, western water and Reclamation, Indian water rights settlements, international waters shared with Canada and Mexico, and water resource science at USGS. The report next covers the following crosscutting topics:", "funding and financing aging and new water resource projects, changing from federal infrastructure projects to federal partnerships, protecting and restoring the environment, flood resilience and natural and nature-based infrastructure, and recharging groundwater."], "subsections": []}, {"section_title": "Projects and Activities of the U.S. Army Corps of Engineers", "paragraphs": ["Congress generally authorizes USACE water resource activities and makes changes to the agency's policies in an omnibus authorization bill. Congress typically appropriates funds for USACE activities in annual Energy and Water Development appropriations acts ($7 billion in FY2019). At times, Congress uses supplemental appropriations bills to fund USACE emergency activities. Supplemental appropriations for USACE response and recovery for coastal and riverine floods surpassed $17 billion during the 115 th Congress. The 116 th Congress may consider questions raised about this supplemental spending/appropriations. For example, how do trends in annual and supplemental appropriations amounts, processes, and requirements influence the effective, efficient, and accountable use of federal funding provided to USACE? For a more detailed discussion of USACE annual and supplemental appropriations and related policy questions, see CRS Report R45326, Army Corps of Engineers Annual and Supplemental Appropriations: Issues for Congress , by Nicole T. Carter. ", "An omnibus USACE authorization bill (typically titled a Water Resources Development Act and called WRDA) usually is considered biennially. The most recent omnibus USACE authorization acts are America's Water Infrastructure Act (AWIA; P.L. 115-270 ), enacted in October 2018; the Water Infrastructure Improvements for the Nation Act (WIIN Act; P.L. 114-322 ), enacted in December 2016; and the Water Resources Reform and Development Act of 2014 (WRRDA 2014; P.L. 113-121 ), enacted in June 2014. The 116 th Congress may follow the tradition of biennial consideration of legislation that authorizes USACE studies and projects. ", "Some USACE-related issues that the 116 th Congress may address include the following:", "Funding and financing issues, such as the use of the Harbor Maintenance Trust Fund, investments in projects to deepen coastal harbors, USACE budgeting priorities, and oversight of USACE efforts to implement public-private partnerships and to develop alternative financing opportunities. Project operations topics, such as USACE policies on pricing for water storage; updates to operation manuals for USACE projects; recreational policies (including firearms regulations) at USACE projects and associated lands; and security of USACE facilities, including cybersecurity. Decisionmaking and planning practices, such as USACE tribal consultation policies and practices; inclusion of nonstructural alternatives, including nature-based measures; consideration of future hydrologic conditions; and approvals for modification to USACE projects.", "A persistent challenge for USACE is how to manage its $96 billion (according to a USACE estimate in early 2018) in authorized construction activities that are eligible for federal appropriations, often referred to as its construction backlog . For FY2019, annual USACE construction appropriations total $2.18 billion. Policymakers may consider whether\u2014and, if so, how\u2014to advance projects in the backlog. ", "In addition, USACE currently is studying multiple projects that are larger in scale than most past USACE projects. These include the Coastal Texas Protection and Restoration feasibility study for a project with an estimated cost between $23 billion and $32 billion. Other studies of large-scale projects include the Great Lakes and Mississippi River Interbasin Study to control aquatic nuisance species (principally the Asian carp) and the New York/New Jersey Harbor and Tributaries study to reduce coastal storm risk for New York City and nearby areas. Given the scale of federal and nonfederal investments that would be needed to construct these USACE projects and other projects in the current construction backlog, policymakers and project sponsors are exploring options for construction financing and contracting and for sharing costs and responsibilities among project sponsors and beneficiaries. "], "subsections": []}, {"section_title": "Western Water and the Bureau of Reclamation", "paragraphs": ["Since the early 1900s, Reclamation has constructed and operated a variety of multipurpose water projects in the 17 states west of the Mississippi River. These projects include the California Central Valley Project (CVP) and major dams on the Colorado River (e.g., Hoover Dam) and Columbia River (e.g., Grand Coulee Dam) systems, among others. This water storage and conveyance infrastructure historically was important for regional development and remains important today. Water supplies from these projects have been used primarily for irrigation; however, some municipalities also receive water from Reclamation projects. Many of the largest facilities produce hydropower and provide other benefits, such as flood damage reduction, recreation, and water for fish and wildlife purposes. However, the operations of some facilities are also controversial for the effects on the environment.", "Over time, Reclamation's historical focus on building new projects has shifted to new mission areas. Construction authorizations for Reclamation slowed during the 1970s and 1980s. In 1987, Reclamation announced a new mission recognizing the agency's transition from a water resource development and construction organization to one primarily occupied with managing water resources in an environmentally and economically sound manner. Since then, increased population; prolonged drought; fiscal constraints; and water demands for fish and wildlife, recreation, and scenic enjoyment have resulted in increased pressure to alter the operation of many Reclamation projects. Alterations to operations, project deliveries, and allocations often have been controversial because of potential impacts on water rights, contractual obligations, and local economies. Previous Congresses have expressed interest in both the management and operations of individual Reclamation projects and the broader policies and procedures that guide the agency's activities.", "In recent years, Congress has expanded Reclamation's authorities and increased its funding support for alternative technologies to increase water supplies in the West. These technologies include water recycling and reuse, aquifer storage and recovery, and desalination, among others. Some support expanded authority and funding for these programs as critical to future efforts to address water shortages in the West. Others prefer that the agency focus its priorities on more traditional mission areas, including new and expanded water storage construction projects and maintenance of existing infrastructure. ", "In contrast to USACE, there is no tradition of a regularly scheduled authorization vehicle (e.g., a WRDA) for Reclamation projects. Instead, Congress generally has considered Reclamation projects individually. However, occasionally individual project authorizations are rolled into an omnibus bill. Reclamation project authorizations have slowed considerably over time, in part due to the onset of congressional earmark moratoria beginning in the 112 th Congress. ", "Several Reclamation-related water project and management issues may be the subject of legislation or oversight during the 116 th Congress. Such issues may include, for example, the status of new and proposed water storage projects; dam safety issues at existing federal reclamation projects; and efforts to address the agency's aging infrastructure and transition projects to nonfederal ownership. In addition, Congress may address drought mitigation assistance, planning, and preparedness through oversight hearings and legislation (e.g., Energy and Water Development appropriations), especially if dry conditions persist or intensify in the Colorado River basin and in other western states.", "Ongoing issues associated with the CVP and Reclamation's operation of pumps in the San Francisco Bay/San Joaquin and Sacramento Rivers' Delta (Bay-Delta), including the pumps' effects on water users and on threatened and endangered species, have been particularly controversial in recent years. Provisions enacted in 2016 under Title II, Subtitle J, of the WIIN Act addressed some of these controversies. The bill also authorized a new process and structure for authorizing Reclamation water storage projects. Many of the WIIN Act's Reclamation authorities are scheduled to sunset at the end of 2020; thus, the 116 th Congress may discuss these authorities in its oversight capacity and/or propose them for reauthorization or modification. Other river basins generating regular congressional interest include the Colorado River, Columbia River, Klamath River (California and Oregon), and Rio Grande River basins."], "subsections": []}, {"section_title": "Indian Water Rights Settlements", "paragraphs": ["In the second half of the 19 th century, the federal government pursued a policy of confining Indian tribes to reservations. The federal statutes and treaties reserving land for Indian reservations typically did not address the water needs of these reservations, a fact that has given rise to questions and disputes regarding Indian reserved water rights. Tribes have pursued quantification of their water rights through both litigation and negotiated settlements with the federal government and other stakeholders. Over the last 50 years, negotiated settlements have been the preferred course for most tribes, because they are often less lengthy and costly than litigation. The 116 th Congress may consider under what circumstances (if any) Congress should approve new Indian water rights settlements and whether Congress should fund (and in some cases amend) existing settlements. Some support the resolution of Indian water rights settlements as a mutually beneficial means to resolve long-standing legal issues, provide certainty of water deliveries, and reduce the federal government's liability. Others may argue against authorization and funding of new settlements, either broadly (e.g., on the principle that new settlements are overly expensive or unjustified) or with regard to specific individual settlements and activities.", "After Indian water rights settlements are negotiated, federal action is necessary for their approval and implementation. As of 2018, 36 Indian water rights settlements had been federally approved, with total costs in excess of $5.8 billion. Of these, 32 settlements were approved and enacted by Congress and 4 were administratively approved by the U.S. Departments of Justice and the Interior. After approval, any federal projects associated with approved Indian water rights settlements generally have been implemented by Reclamation or the Bureau of Indian Affairs (both within the Department of the Interior), pursuant to congressional directions. Congress has appropriated discretionary and mandatory funding (and, in some cases, both) for these activities, including in recent appropriations bills. One of the primary mandatory funding mechanisms for Indian water rights settlements, the Reclamation Water Settlements Fund, is currently authorized to provide $120 million per year in appropriations for qualifying tribal water settlement projects through FY2029.", "The 115 th Congress considered but did not enact legislation proposing congressional approval of new settlement agreements. The primary challenge facing new settlements is the availability of federal funds to implement ongoing and future agreements that require federal resources (not all settlements require these resources). Indian water rights settlements often involve the construction of major new water infrastructure to allow tribal communities to access water to which they hold rights, and obtaining federal funding for these projects can be difficult. Some settlements also are controversial for their potential to affect existing water rights and allocations. For more on Indian water rights settlements, see CRS Report R44148, Indian Water Rights Settlements , by Charles V. Stern. "], "subsections": []}, {"section_title": "Waters Shared with Canada and Mexico", "paragraphs": [], "subsections": [{"section_title": "United States and Canada", "paragraphs": [], "subsections": [{"section_title": "Great Lakes", "paragraphs": ["Federal, state, provincial, local, and tribal governments in the United States and Canada have sought to work together to address environmental challenges and restore the Great Lakes ecosystem. In 2012, the United States and Canada amended the Great Lakes Water Quality Agreement (GLWQA), a commitment originally signed in 1972 that provides a framework for identifying binational priorities and implementing actions that improve water quality. The revised agreement is intended to help the United States and Canada better anticipate and prevent ecological harm. It includes new provisions to address aquatic invasive species; habitat degradation and the effects of climate change; and continued threats to people's health and the environment, such as harmful algae, toxic chemicals, and discharge from vessels.", "The United States and Canada both have provided funding to advance the goals of the GLWQA. In 2016, for example, Congress authorized appropriations of $300 million annually from FY2017 to FY2021 for the Great Lakes Restoration Initiative under Title IV of the WIIN Act. Although the Trump Administration sought to eliminate funding for the initiative in FY2018, Congress appropriated $300 million to continue restoration efforts in the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ). The Trump Administration requested $30 million for Great Lakes restoration in FY2019. ", "The International Joint Commission, a binational organization established by the 1909 Boundary Waters Treaty to investigate and recommend solutions to transboundary water issues, issued the First Triennial Assessment of Progress on Great Lakes Water Quality in November 2017. The report found that the United States and Canada had made progress toward meeting many of the GLWQA's objectives, including accelerated restoration of contaminated areas of concern, development of binational habitat conservation strategies, the absence of newly introduced aquatic invasive species (such as Asian carp), and comprehensive reporting on groundwater science. It also identified significant challenges, such as the increase in harmful algal blooms in Lake Erie, the slow pace in addressing chemicals of mutual concern, the spread of previously introduced invasive species, and insufficient investments in infrastructure to prevent the discharge of untreated or insufficiently treated waste into the Great Lakes.", "In addition to the ongoing challenges identified in the 2017 report, Congress has expressed concerns about a proposed deep geologic repository for nuclear waste by the Bruce nuclear power facility in Kincardine, Ontario. The proposed site, located about 1 kilometer inland from Lake Huron, would hold low- to mid-level waste materials currently being stored above ground in warehouses. The explanatory statement accompanying the Consolidated Appropriations Act, 2018, directed the U.S. Secretary of State to submit a report to the Committees on Appropriations detailing the actions taken to date, and planned for the future, to engage the government of Canada to jointly refer the proposed repository to the International Joint Commission for research and study. It further directed the Secretary to report on the diplomatic and legal steps the Department of State plans to take to address concerns about the protection of the Great Lakes water basin and to review alternatives for the proposed repository that will not risk the health, safety, and economic security of residents of the Great Lakes basin."], "subsections": []}, {"section_title": "Columbia River Treaty", "paragraphs": ["The Columbia River crosses the boundary between southwest Canada and the northwest United States. The Columbia River Treaty (CRT) is an international agreement between the United States and Canada for the cooperative development and operation of the water resources of the Columbia River basin to provide for flood control and power. The CRT resulted from more than 20 years of negotiations between the two countries, both of which ratified the treaty in 1961. Implementation began in 1964. The CRT has no specific end date, and most of its provisions continue indefinitely in the absence of action by the United States or Canada, with the exception of certain flood control operations that will change after 2024. Beginning in September 2024, either nation can terminate most CRT provisions with at least 10 years' written notice (i.e., as early as 2014). To date, neither country has given notice of termination, but both countries have indicated a preliminary interest in modifying the CRT. ", "Future operation of USACE facilities on the Columbia River and its tributaries is central to CRT discussions. USACE and the Bonneville Power Administration (BPA, a self-funded entity within the U.S. Department of Energy that markets the hydropower from the federal facilities in the U.S. portion of the basin), in their joint role as the U.S. Entity overseeing the CRT, undertook a review of the CRT from 2009 to 2013. Based on studies and stakeholder input, USACE and BPA provided a regional recommendation to the U.S. Department of State in December 2013. The recommendation was to continue the treaty after 2024, with modifications. For its part, the Canadian entity overseeing the CRT (the Province of British Columbia) released in March 2013 a recommendation to continue the CRT with modifications \"within the Treaty framework.\" The U.S. Department of State finalized its negotiating parameters and authorized talks with Canada in October 2016. Negotiations began in May 2018; four rounds of negotiation had concluded by the end of 2018. ", "If the executive branch comes to an agreement regarding modification of the CRT, the Senate may be asked to weigh in on future versions of the treaty, pursuant to its advice and consent role. In addition, both houses of Congress may weigh in on CRT review and negotiation activities through their oversight roles. For more information on the CRT, see CRS Report R43287, Columbia River Treaty Review , by Charles V. Stern. "], "subsections": []}]}, {"section_title": "United States and Mexico", "paragraphs": [], "subsections": [{"section_title": "Colorado River and Rio Grande", "paragraphs": ["The United States and Mexico share the waters of multiple rivers, including the Colorado River and the Rio Grande. These shared surface waters are important to many border community economies and water supplies. In 1944, the United States and Mexico entered into the Treaty on Utilization of Waters of the Colorado and Tijuana Rivers and of the Rio Grande (hereinafter 1944 Water Treaty) to establish the International Boundary and Water Commission (IBWC) to oversee the U.S.-Mexico border and water treaties. ", "Congress has been involved in recent U.S.-Mexico water sharing issues primarily through oversight. This involvement includes oversight of IBWC's actions to manage the Colorado River's water and infrastructure to improve water availability during drought and to restore and protect riverine ecosystems. Hydrologic conditions and U.S. state and congressional action on a drought contingency plan for the three U.S. Colorado River lower basin states (California, Arizona, and Nevada) may shape what actions are taken under an agreement with Mexico. The agreement is Minute 323, \"Extension of Cooperative Measures and Adoption of a Binational Water Scarcity Contingency Plan in the Colorado River Basin,\" which is in effect from September 2017 through December 2026. For Congress, binational Colorado River oversight topics may encompass Minute 323 implementation and operations and deliveries during shortage conditions.", "On multiple occasions since 1994, Mexico has not met its Rio Grande water delivery obligations to the United States within the five-year period prescribed by the 1944 Water Treaty. Since 2014, Congress has directed the U.S. Department of State to report annually on Mexico's deliveries and on efforts to improve Mexico's treaty compliance. The IBWC is working to identify opportunities to improve the predictability and reliability of Mexico's water deliveries to the United States.", "For more information on binational Rio Grande and Colorado River water sharing, see CRS Report R45430, Sharing the Colorado River and the Rio Grande: Cooperation and Conflict with Mexico , by Nicole T. Carter, Stephen P. Mulligan, and Charles V. Stern."], "subsections": []}]}]}, {"section_title": "Water Resource Science at the U.S. Geological Survey", "paragraphs": ["The USGS has conducted water resource science since 1889. It is a primary agency for conducting large- and small-scale studies of water resources throughout the country, addressing both water quality and water quantity. These activities assist decisionmakers and federal agencies in managing water resources at all levels of government. ", "The USGS is divided into seven mission areas, including the Water Resources Mission Area (also referred to as the USGS water mission). The USGS water mission covers scientific activities that involve collecting, assessing, and disseminating hydrological data and analysis and research on hydrological systems. The USGS water mission focuses on several water-related conditions, such as streamflow, groundwater, water quality, and water use and availability. The agency's current scientific plan for the USGS water mission centers on several focus areas. The focus areas include collection and dissemination of water data and monitoring for the country, flood inundation science and information, and modeling linkages between human activities and the water cycle, among others.", "The implementation and operation of streamgages by the USGS is a perennial issue for Congress. The USGS, under its Water Resources Mission Area, makes publicly available real-time monitoring data from approximately 8,200 streamgages, 1,900 water quality-sampling stations, and 1,800 groundwater observation wells across the nation. These observations support disaster responses by the Federal Emergency Management Agency, water infrastructure operations by USACE and Reclamation, flood forecasting by the National Oceanic and Atmospheric Association's (NOAA's) National Water Service, and drinking water and ecosystem management by state and federal regulatory agencies (e.g., U.S. Environmental Protection Agency). ", "Over the years, the demand for streamgages has exceeded the available resources. Some streamgages in the program are implemented and operated with cooperative partners. USGS has the authority to match the cost of a streamgage by up to 50%; however, in practice, the cooperative partners' cost share is often greater than 50%. Relying on cooperative partners to maintain or expand observations is a persistent challenge for USGS. Congress traditionally has focused its attention on the National Streamflow Information subprogram and the Cooperative Water subprogram under the Water Resources Mission Area, both of which fund streamgages throughout the nation. The 116 th Congress may conduct oversight of USGS water observation programs and their funding.", "The 116 th Congress also may address the recommendations in the 2018 report by the National Academy of Sciences (NAS) on how the USGS water mission area may address expected challenges over the next 25 years. Many recommendations focused on water data collection, delivery, standards, and incorporation into comprehensive models. The NAS report also highlighted potential integration of advanced observation capabilities and data informatics and recommended that USGS develop a robust water accounting system that incorporates human activities affecting water. "], "subsections": []}, {"section_title": "Funding and Financing Aging and New Water Resource Projects", "paragraphs": ["U.S. water infrastructure is aging; the majority of the nation's dams, locks, and levees are more than 50 years old. Failure of these structures could have significant effects on local communities as well as regional and national impacts. Major capital investments for the repair and rehabilitation of these facilities would cost billions of dollars. To date, no comprehensive federal funding solutions for aging water resource infrastructure have been enacted. ", "Some propose funding mechanisms that might be more conducive to major capital investments than the current available funding options, such as the authorization or modification of loan programs for some water resource infrastructure types or the inclusion of water resource infrastructure among the eligible recipients of funding from an infrastructure bank or broad infrastructure initiative. Other proposals include using revenues from project beneficiaries (e.g., hydropower revenues, increased user fees) to fund project repairs and upgrades, or de-authorizing and/or transferring projects to nonfederal entities, such as state or local governments. Still others think Congress requires more uniform information on the extent of this issue before it considers major funding solutions. In the 115 th Congress, proposed legislation would have required increased reporting by Reclamation on the agency's aging infrastructure backlog ( H.R. 660 , Bureau of Reclamation Transparency Act , which passed the House ). (See also discussion below on \" Changing from Federal Infrastructure Projects to Federal Partnerships .\") "], "subsections": []}, {"section_title": "Changing from Federal Infrastructure Projects to Federal Partnerships", "paragraphs": ["Some stakeholders have expressed frustration with the pace of authorization and federal funding of water resource projects, which has resulted in some local sponsors pursuing projects with limited federal support or with expectations of future federal reimbursement or credit. Language authorizing increased nonfederal contributions to Reclamation project costs (as well as federal contributions to nonfederal projects) was enacted in Section 4007 of the WIIN Act. Congress in WRRDA 2014, the WIIN Act, and AWIA expanded nonfederal entities' ability to use their funds to advance USACE projects and to receive up-front or be reimbursed for the federal portion of project study and construction costs. Such new partnership models present opportunities for advancing projects more quickly than the status quo, but they also raise concerns regarding federal oversight in planning decisions and the use of federal funds. Other related questions include what the appropriate federal amount of investment and use of these new authorities should be and whether these authorities allow nonfederal sponsors to exert influence over the use of limited federal water resource infrastructure funds.", "The 113 th Congress initiated another approach through the authorization of Title X of WRRDA 2014, the Water Infrastructure Finance and Innovation Act (WIFIA). The title authorized a pilot program, to be administered by USACE and the Environmental Protection Agency (EPA), for loans and loan guarantees for certain flood damage reduction, public water supply, and wastewater projects. WIFIA was modeled after a similar program that assists transportation projects, the Transportation Infrastructure Finance and Innovation Act, or TIFIA, program. To date, only the EPA portion of the WIFIA program is operational. Although the WIIN Act and AWIA amended and extended the EPA's WIFIA authority, no similar legislative changes were made to the USACE WIFIA program. In FY2019, USACE continues to develop its policies to implement its WIFIA authority."], "subsections": []}, {"section_title": "Protecting and Restoring the Environment", "paragraphs": ["The 116 th Congress may engage in discussions of how threatened and endangered species designations and related critical habitat and environmental mitigation requirements affect water resource project construction and operations. The 116 th Congress also may choose to engage in other environmental topics related to water resources, such as habitat restoration and aquatic species conservation in the Sacramento and San Joaquin Rivers' Delta, the reduction of harmful algal blooms associated with federal water resource projects, and opportunities for public-private partnerships for conservation and restoration of estuaries and rivers.", "The 116 th Congress may consider the status and priority of federal efforts to restore large-scale aquatic ecosystems that have been altered or impaired by development, habitat loss, and federal water resource projects. Congress has authorized restoration activities in the Everglades, Great Lakes, Gulf Coast, and elsewhere. Other restoration efforts that may receive attention include the Bay-Delta, Chesapeake Bay, Salton Sea, Klamath Basin, and elsewhere. Numerous issues pertaining to these ecosystems have emerged. For example, Congress might consider legislation to authorize a framework for governance and a comprehensive restoration plan for the Salton Sea; it also may conduct oversight over the implementation of restoration activities in the Everglades and Gulf Coast region. ", "Funding for existing and newly authorized restoration initiatives could face challenges in the 116 th Congress as decisionmakers evaluate investment priorities. Congress may look at the funding and performance of existing restoration efforts. Decisionmakers also may evaluate restoration initiatives on how well they balance demands for water resources and species' conservation needs."], "subsections": []}, {"section_title": "Flood Resilience and Natural and Nature-Based Infrastructure", "paragraphs": ["The 116 th Congress may consider responses to flood disasters, including improving flood resilience, which is the ability to adapt to, withstand, and rapidly recover from floods. In the United States, flood-related responsibilities are shared between the federal and state governments. Congress has established various federal programs that may be available to assist U.S. state, local, and territorial entities and tribes in reducing flood risks, including structural and nonstructural measures. States and local governments have significant discretion in land use and development decisions (e.g., building codes, subdivision ordinances). Congress has been and may continue to be concerned about the nation's and the federal government's financial exposure to flood losses, as well as the economic, social, and public health impacts on individuals and communities. ", "Congress may consider the costs and benefits of protecting and restoring natural features that provide flood control and erosion benefits. Natural features, such as coral reefs, mangroves, dune systems, coastal wetlands, and the like, can dampen wave energy, slow erosion, and absorb floodwaters, among other benefits. Congress has established several programs across a number of agencies to conserve and restore these types of areas. For example, the Coastal Barrier Resources Act ( P.L. 97-348 ) established the Coastal Barrier Resources System in coastal areas with low development. The program aims not only to limit future federal expenditures and protect habitat but also to preserve naturally dynamic areas that may absorb flooding and erosion impacts. ", "Approaches that mimic nature and are \"nature-based\" are used as part of flood management and risk reduction. These features sometimes are referred to as living shorelines or green infrastructure . Some local, state, and federal agencies and programs support nature-based infrastructure, especially if there are multiple benefits (e.g., erosion reduction, habitat restoration, and water quality benefits). Federal agencies such as the Fish and Wildlife Service, NOAA, USACE, and EPA may be involved in the restoration, protection, or construction of these nature-based features. The WIIN Act required USACE to consider \"natural features\" and \"nature-based features\" in addition to structural and nonstructural measures when studying the feasibility of flood risk management, hurricane and storm damage reduction, and ecosystem restoration projects. Interest in the nation's infrastructure and changes in environmental conditions (e.g., hydrologic conditions associated with a changing climate) may prompt the 116 th Congress to examine the implementation and funding of nature-based infrastructure, and protection of natural features that reduce flood risk. "], "subsections": []}, {"section_title": "Recharging Groundwater", "paragraphs": ["Groundwater, the water in aquifers accessible by wells, is a critical component of the U.S. water supply. It is important for both domestic and agricultural water needs, among other uses. Nearly half of the nation's population uses groundwater to meet daily needs; in 2015, about 149 million people (46% of the nation's population) relied on groundwater for their domestic indoor and outdoor water supply. The greatest volume of groundwater used every day is for agriculture, specifically for irrigation. In 2015, irrigation accounted for 69% of the total fresh groundwater withdrawals in the United States.", "Congress generally has deferred management of U.S. groundwater resources to the states, and there is little indication that this practice will change. However, Congress, various states, and other stakeholders recently have focused on the potential for using surface water to recharge aquifers and the ability to recover the stored groundwater when needed. Some see aquifer recharge, storage, and recovery as a replacement or complement to surface water reservoirs, and there is interest in how federal agencies can support these efforts. In the congressional context, there is interest in the potential for federal efforts to facilitate state, local, and private groundwater management efforts (e.g., management of federal reservoir releases to allow for groundwater recharge by local utilities). ", "Although Congress has authorized aquifer storage, recharge, and/or recovery for some individual projects, general congressional guidance in this area has been limited. Under the WIIN Act, Congress provided general authority for Reclamation to support new and enhanced federal and state surface and groundwater storage projects under certain, limited circumstances.", "A connection between federal water projects and groundwater enhancement already exists in Arizona, as part of the Central Arizona Project, and is implemented via state law. More recently, California enacted three groundwater laws known collectively as the Sustainable Groundwater Management Act (SGMA), which directed the California Department of Water Resources to identify water available for replenishing groundwater in the state. Because the California Central Valley Project is integral to the water supply and delivery infrastructure of the state, that project is also recognized as part of the surface water resources potentially important for recharging aquifers as the SGMA is implemented. Other western states with significant Reclamation water infrastructure also may look to enhance their sources of water for aquifer recharge by using water from federal projects.", "A number of bills introduced in the 115 th Congress would have addressed groundwater recharge, storage, and recovery in various ways. Whereas some bills addressed the concept broadly, others attempted to facilitate and, in some cases, add requirements for groundwater storage projects in specific locations. Similar legislation may be introduced in the 116 th Congress, particularly if drought trends continue in the western United States and more groundwater is pumped in lieu of surface water supplies, potentially leading to the broad and long-term drawdown of aquifers. "], "subsections": []}, {"section_title": "Conclusion", "paragraphs": ["Many factors shape the water resource issues before the 116 th Congress. These factors include demand for reliable water supplies; hydrologic conditions, such as droughts, floods, and effects of climate change; issues regarding safety and performance of existing infrastructure, and interests and concerns about alternative financing and public-private partnerships. ", "The 116 th Congress may consider some measures proposed but not enacted in the 115 th Congress, as well as new legislative proposals. In the water resource area, legislative activity often is specific to the federal water resource management agencies or to water use by particular sectors, including energy, agriculture, navigation, recreation, and municipal and industrial use. Occasionally, Congress takes up broader water resource policy issues, such as coordination of federal water resource activities, programs, science, and research. ", "Congress and other decisionmakers often make water resource decisions within a complicated context. These decisions may involve existing federal infrastructure and their beneficiaries, multiple or conflicting objectives, various legal decisions, multiple environmental and natural resource statutes, and long-established institutional mechanisms (e.g., water rights and contractual obligations). These decisions also occur within a federalist framework in which water resource responsibilities are shared with state, local, and tribal governments and the private sector. ", "Broad water resource questions for the 116 th Congress described herein include the following: ", "For existing water resource facilities, including aging dams, levees, and navigation channels, what will be the federal role and level of investment in maintaining performance and safety? For planning and construction of new or expanded water resource projects, what will be the circumstances, conditions, and nature of federal involvement? For water resource project design and operations, how may federal and nonfederal science, observation, and monitoring be used to improve performance? "], "subsections": [{"section_title": "Appendix. Federal Water Resource Infrastructure", "paragraphs": ["Most of the large dams and water diversion structures in the United States were built by, or with the assistance of, the Bureau of Reclamation (Reclamation) or the U.S. Army Corps of Engineers (USACE). The two agencies' projects differed in that", "Reclamation projects historically were designed principally to provide reliable supplies of water for irrigation and some municipal and industrial uses. USACE projects have been planned primarily to improve navigation and reduce flood damages; power generation, water supply, and recreation often have been included as secondary or incidental benefits. ", "Reclamation currently manages hundreds of dams and reservoirs in the 17 arid states west of the Mississippi River. These projects provide water to approximately 10 million acres of farmland and 31 million people. Reclamation also operates 58 power plants capable of producing 40 billion kilowatt-hours of electricity annually (enough for approximately 3.5 million homes), which generate more than $1\u00a0billion in revenues annually. ", "USACE operates nationwide, and its activities are diverse. USACE has constructed thousands of flood damage reduction and navigation projects throughout the country, involving nearly 12,000 miles of commercially active waterways and nearly 1,000 harbors and including 702 dam and reservoir projects (with 75 hydroelectric plants generating 68 billion kilowatt-hours annually). USACE is responsible for maintaining these projects. Additionally, USACE constructed, usually with nonfederal participation, roughly 9,000 miles of the estimated 100,000 miles of the nation's levees, but the agency operates and maintains only 900 miles. The remaining levees are operated by nonfederal entities, often local governments or special districts.", "The number of federal water resource construction activities decreased during the last decades of the 20 th century, marking the end of earlier expansionist policies that had supported large federal up-front investments in dams and hydropower facilities, navigation locks and channels, irrigation diversions, and flood control levees, as well as basin-wide planning and development efforts. Fiscal constraints, changes in national priorities and local needs, few remaining prime construction locations, and environmental and species impacts of the construction and operation of federal projects all contributed to this shift. "], "subsections": []}]}]}}
{"id": "R45525", "title": "The 2018 Farm Bill (P.L. 115-334): Summary and Side-by-Side Comparison", "released_date": "2019-02-22T00:00:00", "summary": ["Congress sets national food and agriculture policy through periodic omnibus farm bills that address a broad range of farm and food programs and policies. The 115th Congress established the direction of farm and food policy for five years through 2023 by enacting the Agricultural Improvement Act of 2018, which the President signed into law on December 20, 2018, as P.L. 115-334.", "The Congressional Budget Office (CBO) has scored the cost of programs with mandatory spending\u2014such as nutrition programs, commodity support programs, major conservation programs, and crop insurance\u2014in the enacted 2018 farm bill at $867 billion over a 10-year budget window of FY2019-FY2028. This amount is budget neutral compared with CBO's baseline scenario of an extension of 2014 farm bill (P.L. 113-79) programs with no changes. CBO estimates that over the five-year life of the law (FY2019-FY2023), outlays will amount to $428 billion, or $1.8 billion above the baseline scenario. In general, the new law largely extends many major programs through FY2023, thereby providing an overlay of continuity with the existing framework of agriculture and nutrition programs even as it modifies numerous programs, alters the amount and type of program funding that certain programs receive, and exercises discretion not to reauthorize some others.", "The enacted 2018 farm bill extends agricultural commodity support programs largely along existing lines while modifying them in various ways. For instance, producers acquire greater flexibility, compared with prior law, to switch between the Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) revenue support programs. Producers may update program yields that factor into payments under PLC, while a newly added escalator could raise a commodity's reference price under the program. The law also makes several modifications to ARC, including introducing a trend-adjusted yield that has the potential to raise ARC revenue guarantees for producers. Other changes include an increase in marketing assistance loan rates for a number of crops and revising the definition of family farm to include nephews, nieces, and cousins, making these individuals eligible for farm program payments. The law modifies dairy programs, including renaming the Margin Protection Program as Dairy Margin Coverage (DMC) and revising it to expand the margin protection between milk prices and feed costs that milk producers may purchase, as well as lowering the cost of this coverage for the first 5 million pounds of milk produced. Loan rates under the sugar program are increased.", "The Supplemental Nutrition Assistance Program (SNAP), the largest domestic nutrition assistance program, is reauthorized through FY2023. The law amends SNAP in a number of ways, including making changes to policies intended to reduced errors and fraud in SNAP, limiting fees that electronic benefit transfer processors may charge, and requiring nationwide online acceptance of SNAP benefits. Not included in the enacted bill are provisions in the House-passed bill that would have expanded work requirements and SNAP employment and training programs. The enacted bill does make certain modifications to these elements of the program, such as expanding the employment and training activities that a state may provide. Beyond SNAP, the law amends programs that distribute U.S. Department of Agriculture foods to low-income households, and it increases funding for The Emergency Food Assistance Program (TEFAP).", "The enacted farm bill addresses agricultural conservation on several fronts. For one, it reauthorizes the two largest working lands programs\u2014the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP)\u2014while reducing the overall funding allocated for these two programs. It also reauthorizes the primary land retirement program, the Conservation Reserve Program (CRP), allowing it to expand from a maximum of 24 million acres in FY2019 to 27 million acres in FY2023 while offsetting the added cost of any enrollment increase through lower payments to participants. The law also expands grazing and commercial uses on CRP acres and provides options for new and limited resource producers for transitioning CRP land.", "The enacted 2018 farm bill addresses a range of issues of importance to rural America, including combatting substance abuse by prioritizing assistance under certain programs, by expanding broadband access and providing additional authorized appropriations to that end and by amending the definition of rural by excluding certain groups of individuals from population-based criteria. The credit title increases the maximum loan amount for guaranteed loans, and these amounts are adjusted for inflation thereafter. The ceiling for direct loans is also raised, among other changes.", "Among the broad and diverse array of other provisions in the law are provisions intended to facilitate the commercial cultivation, processing, and marketing of hemp. Among these, hemp with low levels of the psychoactive ingredient in marijuana is excluded from the statutory definition of marijuana. The law creates a new hemp program under USDA oversight and makes hemp an eligible crop under the federal crop insurance program. The enacted 2018 farm bill also strengthens the National Organic Program and increases funding for organic agricultural research.", "Within the Miscellaneous title, the livestock industry is the object of several initiatives to guard against disease outbreaks and strengthen the response to such events. These include the establishment of the National Animal Disease Preparedness Response Program and the National Animal Vaccine and Veterinary Countermeasures Bank. The law also addresses USDA organizational changes in recent years, requiring USDA to reestablish the position of Under Secretary for Rural Development and creating a Rural Health Liaison, among other changes. Among its provisions, the Forestry title addresses the accumulation of biomass in many forests and the consequent risk of wildfires by establishing, reauthorizing, and modifying various assistance programs to promote wood use and biomass removal.", "With these programs, policies, and initiatives codified into law, the job that remains is for USDA, other federal agencies, and entities designated by the enacted farm law to implement the will of Congress through regulatory actions and other administrative measures. As implementation of the farm law proceeds, Congress may find it prudent to monitor this process and to provide direction and feedback through the exercise of its oversight responsibilities."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Congress has been active in establishing federal policy for the agricultural sector on an ongoing basis since the 1930s. Over the years, as economic conditions and technology have evolved, Congress has regularly revisited agricultural policy through periodic farm legislation. Across these decades, the breadth of policy areas addressed through such farm bills has expanded beyond providing support for a limited number of agricultural commodities to include establishing programs and policies that address a broad spectrum of related areas. These include agricultural conservation, credit, rural development, domestic nutrition assistance, trade and international food aid, organic agriculture, forestry, and support for beginning and veteran farmers and ranchers, among others.", "The Agriculture Improvement Act of 2018 ( P.L. 115-334 ), known as the \"2018 farm bill,\" was enacted on December 20, 2018, approximately eight months after the bill was introduced ( Table 1 ). In the House, the Agriculture Committee reported the bill on April 18, 2018, by a vote of 26-20. An initial floor vote on May 18, 2018, failed in the House by a vote of 198-213, but floor procedures allowed that vote to be reconsidered ( H.Res. 905 ). The House passed H.R. 2 in a second vote of 213-211 on June 21, 2018. In the Senate, the Agriculture Committee reported its bill ( S. 3042 ) on June 13, 2018, by a vote of 20-1. The Senate passed its bill as an amendment to H.R. 2 by a vote of 86-11 on June 28, 2018. Conference proceedings to resolve the differences between the House- and Senate-passed versions of H.R. 2 officially began on September 5, 2018, and concluded in December 2018 with Senate passage of H.R. 2 on a vote of 87-13 and House passage by a vote of 369-47 ( H.Rept. 115-1072 ).", "The enacted 2018 farm bill continues a tradition of multi-year farm bills that would establish policy for a broad array of agriculture and nutrition assistance programs. To this end, P.L. 115-334 addresses agriculture and food policy across 12 titles. These titles cover commodity support programs, agricultural conservation, trade and international food aid, domestic nutrition assistance, credit, rural development, research and extension, forestry, horticulture, crop insurance, and a variety of other policies and initiatives. ", "The Congressional Budget Office (CBO) projected at enactment that outlays of the 2018 farm bill will amount to $428 billion over the five-year life of the law (FY2019-FY2023). Most of this projected spending\u2014$326 million, or 76%\u2014is in the nutrition title for the Supplemental Nutrition Assistance Program (SNAP). The remaining 24%\u2014$102 billion of projected outlays\u2014stems primarily from agricultural programs, including crop insurance, farm commodity programs, and conservation. CBO estimated that the conference agreement for the 2018 farm bill will be budget neutral over a 10-year period (FY2019-FY2028). CBO estimated that in its first five years, the enacted 2018 farm bill will increase spending by $1.8 billion, compared with a simple extension of the 2014 farm bill, but that this initial increase will be entirely offset in the second five years of the budget window. The \" Budgetary Impact \" section of this report provides additional detail at the level of individual titles and major programs.", "The policymaking environment for the 2018 farm bill differed materially from that of the 2014 farm bill, reflecting lower farm income levels in recent years and disruptions to agricultural exports beginning in 2018. The U.S. Department of Agriculture (USDA) forecasts that for 2018, net cash farm income\u2014a measure of the profitability of farming\u2014will be about one-third below the levels of 2012 and 2013, which were the highest in the last 40 years adjusted for inflation. The decline in net cash farm income over this period reflects lower farm prices for many commodities. U.S. farm exports, which provide critical support to U.S. agricultural commodity prices and farm profitability, have been disrupted since early 2018 by a series of trade disputes involving major U.S. agricultural export markets\u2014including China, Canada, Mexico, and the European Union\u2014that has led to the imposition of tariffs by these trading partners on a range of U.S. farm product exports. The decline in farm income, coupled with uncertainty about prospects for agricultural exports, may well have played a role in shaping a set of policies in the enacted farm bill that provide farmers and ranchers with a degree of continuity for the next five years. ", "This report provides an analysis of the budgetary implications of both bills, followed by summaries identifying some of the changes contained in the enacted 2018 farm bill compared with prior law. These summaries are followed by tables containing a title-by-title analysis of all of the policies and provisions in the enacted 2018 farm bill compared to the House- and Senate-passed versions of H.R. 2 and with the expired 2014 farm bill ."], "subsections": []}, {"section_title": "Budgetary Impact5", "paragraphs": ["The allocation of federal spending is one way to measure the activities covered by a farm bill, both by how much is spent in total and by how a new law changes policy. CBO estimates are the official measures when bills are considered and are based on long-standing budget laws and rules.", "A farm bill authorizes funding in two ways: It authorizes and pays for mandatory outlays with multi-year budget estimates when the law is enacted. It also sets the parameters for discretionary programs and authorizes them to receive future appropriations but does not provide funding. Mandatory programs often dominate farm bill policy and the debate over the farm bill budget.", " Figure 1 illustrates the $428 billion, five-year total of projected mandatory outlays at enactment for the life of the 2018 farm bill (FY2019-FY2023). Figure 2 shows program-level detail for agriculture-specific programs, particularly the farm commodity and conservation titles. The nutrition title is the largest component of the farm bill budget, followed by crop insurance, farm commodity programs, and conservation."], "subsections": [{"section_title": "Baseline", "paragraphs": ["The budgetary impact of mandatory spending proposals is measured relative to an assumption that certain programs continue beyond the end of the farm bill. The benchmark is the CBO baseline \u2014a projection at a particular point in time of future federal spending on mandatory programs under current law. The baseline provides funding for reauthorization, reallocation to other programs, or offsets for deficit reduction. Generally, many programs (such as the farm commodity programs or supplemental nutrition assistance) are assumed to continue in the baseline as if there were no change in policy and the program did not expire. However, some programs are not assumed to continue beyond the end of a farm bill.", "The CBO baseline used to develop the 2018 farm bill was released in April 2018. It projected that if the 2014 farm bill, as amended as of April 2018, were extended, farm bill programs would cost $867 billion over the next 10 years, FY2019-FY2028. Most of that amount, 77%, was in the nutrition title for the Supplemental Nutrition Assistance Program (SNAP). The remaining 23%, $203 billion baseline (the first and fourth data columns in Table 3 ), was for agricultural programs, mostly in crop insurance, farm commodity programs, and conservation. Other titles of the farm bill contributed about 1% of the baseline, some of which are funded primarily with discretionary spending."], "subsections": []}, {"section_title": "Score", "paragraphs": ["When a new bill is proposed that would affect mandatory spending, CBO estimates the score (cost impact) in relation to the baseline. Changes that increase spending relative to the baseline have a positive score; those that decrease spending relative to the baseline have a negative score. Budget enforcement rules use these baselines and scores to follow \"PayGo\" and other budget rules (that in part may require no increase to the federal deficit). The score (change) of the enacted 2018 farm bill is shown by title in the second and fifth columns in Table 3 .", " Figure 3 shows the title-level scores that are made by the enacted 2018 farm bill and the House and Senate bills that preceded the conference agreement. Table 4 contains the more detailed section-by-section CBO score of the enacted 2018 farm bill.", "Relative to the baseline, the overall score of the 2018 farm bill is budget neutral over a 10-year period. The farm bill increases spending in the first five years by $1.8 billion ( Table 3 ). The House-passed bill would have decreased 10-year outlays by $1.8 billion; the Senate-passed bill was budget neutral ( Figure 3 ). Scores of separate titles show both increases and decreases. Generally, the enacted farm bill follows the score of the Senate bill more closely than the House bill ( Figure 3 ). In the enacted law, most of the reductions are from changes in the Rural Development title. Six titles have increased outlays over the 10-year period, including farm Commodities, Trade, Research, Energy, Horticulture, and Miscellaneous. The Conservation and Nutrition titles have increases over the first five years but are budget neutral over the 10-year period ( Table 3 ). Within some titles, the net score may be a combination of increases and decreases across provisions. This is particularly notable in the Conservation title, which reallocates spending across programs more than in other titles ( Table 4 ).", "For several of the \"programs without baseline\" from the 2014 farm bill, the 2018 farm bill provides continuing funding and, in some cases, permanent baseline. Twenty-three of the 39 such programs received continued mandatory funding in the 2018 farm bill (see footnotes in Table 4 ).", "Fourteen of the programs without baseline received mandatory funding during FY2019-FY2023 but no baseline beyond the end of the farm bill. Nine of the programs without baseline received mandatory funding and permanent baseline beyond the end of the farm bill. Three of these programs were combined with six others into six provisions in the 2018 farm bill. In addition, five provisions in the 2018 farm bill created new programs without baseline for the next farm bill. "], "subsections": []}, {"section_title": "Projected Outlays at Enactment", "paragraphs": ["When a new law is passed, the projected cost at enactment equals the baseline plus the score (the third and sixth columns of Table 3 ). This sum becomes the foundation of the new law and may be compared to future CBO baselines as an indicator of how actual costs transpire as the law is implemented and market conditions change.", "As presented above, Figure 1 illustrates the projected outlays at enactment for the life of the 2018 farm bill (FY2019-FY2023). Figure 2 shows program-level detail for agriculture-specific programs, particularly the Farm Commodity and Conservation titles. Most of $428 billion five-year total amount (76%) is in the Nutrition title for SNAP. The remaining 24%, $102 billion of projected outlays, is for agricultural programs, mostly in crop insurance (8.9%), farm commodity programs (7.3%), and conservation (6.8%)."], "subsections": []}]}, {"section_title": "Title-by-Title Summaries", "paragraphs": [], "subsections": [{"section_title": "Commodities14", "paragraphs": ["Title I of the 2018 farm bill authorize support programs for dairy, sugar, and covered commodities\u2014including major grain, oilseed, and pulse crops\u2014as well as agricultural disaster assistance. Major field-crop programs include the Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) programs and the Marketing Assistance Loan (MAL) program (see Table 5 ). The dairy program involves protecting a portion of the margin between milk and feed prices. The sugar program provides a combination of price support, limits on imports, and processor/refiner marketing allotments. Four disaster assistance programs that focus primarily on livestock and tree crops were permanently authorized in the 2014 farm bill. These disaster assistance programs provide federal assistance to help farmers recover financially from natural disasters, including drought and floods. Title I also includes several administrative provisions that suspend permanent farm law from 1938 and 1949 that would otherwise impose antiquated and potentially disruptive price support programs; assign payment limits for individuals, joint ventures or partnerships, and corporations; specify the adjusted gross income (AGI) threshold for program payment eligibility; and identify other details regarding payment attribution and eligibility.", "The 2018 farm bill extends authority for most current commodity programs but with some modifications to the ARC, PLC, and MAL programs; dairy; sugar; and agricultural disaster assistance. ", "Under the 2014 farm bill, producers were allowed a one-time choice between ARC and PLC on a commodity-by-commodity basis, with payments made on 85% of each commodity's base acres (i.e., historical program acres that are eligible for ARC and PLC payments). To increase producer flexibility, the 2018 farm bill provides producers the option in 2019 of switching between ARC and PLC coverage, on a commodity-by-commodity basis, effective for both 2019 and 2020. Beginning in 2021, producers again have the option to switch between ARC and PLC but on an annual basis for each of 2021, 2022, and 2023. Producers may remotely and electronically sign annual contracts for ARC and PLC. Producers also have the option to sign a multi-year contract for the ARC and PLC programs. If no initial choice is made, then the program defaults to whichever program was in effect under the 2014 farm bill. Base acres that have not been planted to a commodity eligible to participate in these programs during the 2009-2017 period are not eligible to receive ARC and PLC payments under the 2018 farm bill. However, as a concession to the affected farms, these base acres may be enrolled in the Conservation Stewardship Program for five years at an annual program payment rate of $18 per acre.", "Two changes to the PLC program include the option for producers to update their program yields (used in the PLC payment formula) based on 90% of the average yield for 2013-2017, using a yield plug of 75% of the county average for each year where the farm program yield is less, excluding any years with zero yields, and adjusting downward for any national trend yield growth. In addition, an escalator provision was added that could potentially raise a covered commodity's effective reference price (used to determine the PLC per-unit payment rate) by as much as 115% of the statutory PLC reference price based on 85% of the five-year Olympic average of farm prices. ", "The 2018 farm bill also specifies several changes to the ARC program. Under the 2014 farm bill, USDA's National Agricultural Statistics Service (NASS) data for county average yields was used for calculating both ARC benchmark and actual revenues. Under the 2018 farm bill, data from USDA's Risk Management Agency (RMA) will be the primary source for county average yield data. Where RMA data is not available, USDA will determine the data source considering data from NASS or the yield history of representative farms in the state, region, or crop-reporting district. This data reprioritization is intended to improve the integrity of the ARC program and avoid the disparity in ARC payments that some neighboring counties experienced in recent years. Also, up to 25 counties nationwide that meet certain criteria\u2014larger than 1,400 square miles and with more than 190,000 base acres\u2014may subdivide for purposes of calculating the ARC benchmark and actual revenue. This change is expected to allow ARC calculations to better reflect significant yield deviations within a county. Also, ARC will use a trend-adjusted yield, as is done by RMA for the federal crop insurance program. This has the potential to raise ARC revenue guarantees for producers. Finally, the five-year Olympic average county yield calculations will increase the yield floor (substituted into the formula for each year where the actual county yield is lower) to 80%, up from 70%, of the transitional county yield. This yield calculation is used to calculate the ARC benchmark county revenue guarantee. ", "Marketing assistance loan rates are increased for several program crops, including barley, corn, grain sorghum, oats, extra-long-staple cotton, rice, soybeans, dry peas, lentils, and small and large chickpeas. Commodities excluded from the loan rate increase are upland cotton, peanuts, minor oilseeds, nongraded wool, mohair, and honey. Marketing assistance loan rates are used to establish the maximum payment under PLC. Thus, raising the loan rate for a commodity lowers its potential PLC program payment rate. ", "No changes were made to the \"actively engaged in farming\" criteria used to determine whether an individual is eligible for farm program payments. With respect to payment limits and the AGI limit, the 2018 farm bill leaves both the payment limit of $125,000 per individual ($250,000 per married couple) and the AGI limit of $900,000 unchanged, but it modifies the eligibility criteria for commodity program payment eligibility. However, MAL program benefits are exempted from inclusion under payment limits. Thus, payment limits apply only to combined ARC and PLC payments. Also, the definition of family farm is expanded to include first cousins, nieces, and nephews, thus increasing the potential pool of individuals eligible for individual payment limits on family farming operations. ", "The enacted bill also amends the permanent agricultural disaster assistance programs. The law expands payments for livestock losses caused by disease and for losses of unweaned livestock that occur before vaccination. The law also expands the definition of eligible producer to include Indian tribes or tribal organizations and increases replanting and rehabilitation payment rates for beginning and veteran orchardists. The law amends the limits on payments received under select disaster assistance programs\u2014of the four disaster assistance programs, only the livestock Forage Program (LFP) is not subject to the $125,000/person payment limit. The AGI requirements are left unchanged.", "The Noninsured Crop Disaster Assistance Program (NAP) is also amended. The enacted bill amends crop eligibility to include crops that may be covered by select forms of crop insurance but only under whole farm plans or weather index policies. It also amends the payment calculation to consider the producer's share of the crop, raises the service fees and creates separate payment limits for catastrophic ($125,000/person) and buy-up ($300,000/person) coverage. The law makes buy-up coverage permanent, and adds data collection and program coordination requirements.", "The 2018 farm bill significantly revises the Margin Protection Program (MPP) for milk producers that was established in the 2014 farm bill. The new dairy program\u2014Dairy Margin Coverage (DMC)\u2014provides lower producer-paid premium rates for milk coverage of 5 million pounds or less (Tier I), adds margin coverage at higher levels of coverage, and allows producers to cover a larger quantity of milk production. DMC is authorized through December 31, 2023. ", "The DMC program will pay participating dairy producers the difference (when positive) between a producer-selected margin and the national milk margin (calculated as the all-milk price minus an average feed cost ration). The feed ration formula is unchanged from MPP. For a $100 administrative fee, participating dairy producers are automatically covered at the $4.00 per hundredweight (cwt) margin level. Producers may buy additional margin coverage from $4.50/cwt to $9.50/cwt on the first 5 million pounds of production, compared with $5.50/cwt to $8.00/cwt under MPP. Also, producers may now cover from 5% to 95% of their production history, compared with 25% to 90% under MPP.", "Under DMC, premiums for Tier I coverage above $4.00/cwt are significantly reduced from MPP to incentivize dairy producers to buy higher levels of margin coverage. For example, under MPP, an $8.00 margin cost $0.142/cwt, but under DMC, the cost is $0.10/cwt. The premiums for the newly available coverage for margins of $8.50, $9.00, and $9.50 are established at $0.105/cwt, $0.11/cwt, and $0.15/cwt, respectively. For production of over 5 million pounds (Tier II coverage), the premium rates for $4.50 and $5.00 margins are also reduced compared with MPP, but margin coverage is only available up to $8.00, and the premium rates are generally higher than under MPP.", "Another change under the 2018 farm bill is that dairy producers will receive a 25% discount on premiums if they select and lock in their margin and production coverage levels for the entire five years of the DMC program. Otherwise, producers may continue to select coverage levels annually. Also under DMC, dairy producers may apply for repayment of the premiums, less any payments received, that were paid under MPP during 2014-2017. If dairy producers opt to apply repayments to future DMC premiums, they are to receive credit for 75% of the eligible repayment. Otherwise, they may opt for a direct cash payment of 50% of the eligible repayment. ", "Unlike MPP, the DMC program allows dairy producers to participate in both margin coverage and the Livestock Gross Margin-Dairy (LGM-D) insurance program that insures the margin between feed costs and a designated milk price. In addition, producers who were excluded from participating in MPP in 2018 because their milk production was enrolled in LGM-D may retroactively participate in MPP.", "The 2018 farm bill reauthorizes the Dairy Forward Pricing Program, the Dairy Indemnity Program, and the Dairy Promotion and Research Program through FY2023. The act repeals the Dairy Product Donation Program enacted in the 2014 farm bill. It also establishes a milk donation program designed to simplify donations of fluid milk that producers, processors, and cooperatives make to food banks and feeding organizations. The donation program is funded at $9 million for FY2019 and $5 million in each following fiscal years. Also, the act amends the formula for the Class I skim milk price used for calculating the Class I price under Federal Milk Marketing Orders. ", "The farm bill requires USDA to conduct studies on whether the national feed cost ration is representative of actual feed costs used in the margin calculation and on the cost of corn silage versus the feed cost of corn, and it directs USDA to report alfalfa hay prices in the top five milk-producing states."], "subsections": []}, {"section_title": "Conservation17", "paragraphs": ["USDA administers a number of agricultural conservation programs that assist private landowners with natural resource concerns. These can be broadly grouped into working lands programs, land retirement and easement programs, watershed programs, emergency programs, technical assistance, and other programs. The enacted bill amends portions of programs in all of these categories (see Table 6 ). However, the general focus of the enacted 2018 farm bill is on the larger working lands, land retirement, and easement programs. All major conservation programs were reauthorized with varying degrees of amendments. ", "Farm bill conservation programs are authorized to receive mandatory funding through the Commodity Credit Corporations (CCC). Generally, the law reallocates mandatory funding within the title among the larger programs and pays for increases in the short term with reductions in the long term. CBO projects that the enacted bill would increase funding for conservation by $555 million in the short term (FY2019-FY2023) and reduce funding by $6 million in the long term (FY2019-FY2028). "], "subsections": [{"section_title": "Working Lands Programs", "paragraphs": ["In general, working lands programs provide technical and financial assistance to help farmers improve land management practices. The two largest working lands programs\u2014Environmental Quality Incentives Program (EQIP) and Conservation Stewardship Program (CSP)\u2014account for more than half of all conservation program funding. Total funding for both programs is reduced under the enacted bill, compared with prior law, but in different ways and to different degrees. ", "CSP provides financial and technical assistance to producers to maintain and improve existing conservation systems and to adopt additional conservation activities in a comprehensive manner on a producer's entire operation. The House bill would have repealed CSP and created a stewardship contract within EQIP, whereas the Senate bill would have reauthorized CSP and reduce program enrollment. The enacted bill creates a mix of both the House and Senate proposals with amendments. The law reauthorizes CSP but amends how the program limits future enrollment. The program is shifted away from an acreage limitation under prior law (10 million acres annually) to limits based on funding ($700 million in FY2019 increasing to $1 billion in FY2023), a reduction from prior law. The savings from limiting CSP in this manner are redistributed to EQIP and other farm bill conservation programs within the title. The enacted bill also amends CSP's ranking criteria; contract renewal requirements; payments for cover crops, grazing management, and comprehensive conservation plan development; and organic certification allocations. A new grassland conservation initiative is also added to CSP.", "EQIP is reauthorized and expanded in the enacted bill. EQIP provides financial and technical assistance to producers and land owners to plan and install structural, vegetative, and land management practices on eligible lands to alleviate natural resource problems. The enacted bill increases EQIP funding in annual increments from $1.75 billion in FY2019 to $2.025 billion in FY2023. A number of amendments to EQIP focus on water quality and quantity-related practices, soil health improvement, and wildlife habitat improvement. The bill reduces the allocation for livestock-related practices from 60% to 50% and increases the allocation for wildlife-related practices from 5% to 10%. Water conservation system payments are expanded to irrigation and drainage entities with limitations. Conservation Innovation Grants, a subprogram under EQIP, is expanded to include community colleges, on-farm innovation, and soil health trials."], "subsections": []}, {"section_title": "Land Retirement and Easement Programs", "paragraphs": ["Land retirement and easement programs provide federal payments to private agricultural landowners for accepting permanent or long-term land-use restrictions. The largest land retirement program\u2014the Conservation Reserve Program\u2014is reauthorized and expanded under the enacted 2018 farm bill. CRP provides annual rental payments to producers to replace crops on highly erodible and environmentally sensitive land with long-term resource-conserving plantings. Under the new law, annual CRP enrollment is increased incrementally from 24 million acres in FY2019 to 27 million by FY2023. Within this limit, CRP is required to enroll up to 2 million acres in grasslands contracts and up to 8.6 million acres in continuous contracts. To offset this increased enrollment level, the enacted bill reduces payments to participants, including cost-share payments, annual rental payments, and incentive payments. Annual rental payments are limited to 85% of the county average for general enrollment and 90% for continuous enrollment. The enacted bill also makes a number of other changes that would further expand grazing and commercial uses on CRP acres as well as transition options for new and limited resource producers. Under CRP, new pilot programs are created, such as CLEAR 30 (Clean Lakes, Estuaries, and Rivers and Soil Health and Income Protection Pilot), while existing subprograms are reauthorized and codified (e.g., Conservation Reserve Enhancement Program and Farmable Wetlands Program).", "The Agricultural Conservation Easement Program (ACEP) is reauthorized and amended in the 2018 farm bill. ACEP provides financial and technical assistance through two types of easements: (1) agricultural land easements that limit nonagricultural uses on productive farm or grasslands and (2) wetland reserve easements that protect and restore wetlands. Most of the changes to ACEP focus on the agricultural land easements in which USDA enters into partnership agreements with eligible entities to purchase agricultural land easements from willing landowners. Additional flexibilities are provided to ACEP-eligible entities, including amendments to nonfederal cost share requirements, consideration of geographical differences, terms and conditions of easements, and certification criteria of eligible entities. Several amendments reduce the roll of USDA in the administration of ACEP agricultural land easements, including amendments to the certification of eligible entities, the right of easement enforcement, and planning requirements. Changes to wetland reserve easements center on compatible use and vegetative cover requirements. The enacted bill increases overall funding from $250 million in FY2018 to $450 million annually for FY2019-FY2023."], "subsections": []}, {"section_title": "Other Conservation Programs", "paragraphs": ["The new farm bill reauthorizes and amends the Regional Conservation Partnership Program (RCPP) by shifting the program away from enrolling land through existing conservation programs to a standalone program with separate contracts and agreements. The program is to continue to enter into agreements with eligible partners, and these partners are to continue to define the scope and location of the project, provide a portion of the project cost, and work with eligible landowners to enroll in RCPP contracts. The scope of eligible activities under RCCP is expanded to include activities that may be carried out under additional covered programs. RCPP funding is increased to $300 million annually for FY2019-FY2023 from $100 million annually under prior law. The enacted bill provides additional flexibilities to partners, including the makeup of a partner's project contribution, guidance and reporting requirements, agreement renewals, and the application process.", "The enacted bill also includes amendments to conservation programs and provisions with originating authorities outside of farm bill legislation, primarily various watershed and emergency conservation programs. The law also requires reports be provided to Congress on natural resources and on various pilot programs and trials."], "subsections": []}]}, {"section_title": "Trade18", "paragraphs": ["The trade title\u2014Title III of the enacted 2018 farm bill\u2014addresses statutes concerning U.S. international food aid and agricultural export programs (see Table 7 ). Under the farm bill authority, U.S. international food assistance is distributed through three main programs: (1) Food for Peace (emergency and nonemergency food aid), (2) Food for Progress (agricultural development programs), and (3) the McGovern-Dole International Food for Education and Child Nutrition program (school lunch and feeding programs). The largest of these, the Food for Peace (FFP) program, receives about $1.5 billion in annual appropriations. Traditionally, these three programs have relied on donated U.S. agricultural commodities as the basis for their activities. However, recent farm bills have increasingly added flexibility to purchase food in local markets or to directly transfer cash or vouchers to needy recipients. The U.S. Agency for International Development administers FFP, while the Foreign Agricultural Service of USDA administers the other two programs. ", "The bill reauthorizes all international food aid programs as well as certain operational details such as prepositioning of agricultural commodities and micronutrient fortification programs. P.L. 115-334 also adds a provision requiring that food vouchers, cash transfers, and local and regional procurement of non-U.S. foods avoid market disruption in the recipient country. Under prior law, this requirement applied only to U.S. commodities. The enacted law amends FFP by eliminating the requirement to monetize \u2014sell on local markets to fund development projects\u2014at least 15% of FFP commodities. It also increases the minimum level of FFP funds allocated for nonemergency assistance from $350 million to $365 million each year while maintaining the maximum annual allocation of 30% of FFP funds. ", "P.L. 115-334 amends the McGovern-Dole program by authorizing up to 10% of annual appropriated funds to be used to purchase food in the country or region where it will be distributed. Prior law required all commodities provided under the program be produced in the United States. The bill also extends authority for several related international programs, including the Farmer-to-Farmer program, Bill Emerson Humanitarian Trust, and Global Crop Diversity Trust, as well as two associated fellowship programs: Cochran Fellowships and Borlaug Fellowships.", "P.L. 115-334 consolidates the existing U.S. export promotion programs\u2014the Market Access Program (MAP), the Foreign Market Development Program (FMDP), the Emerging Markets Program (EMP), and Technical Assistance for Specialty Crops (TASC)\u2014into one section, establishing permanent mandatory funding for those programs. It also establishes a Priority Trade Fund, from which the Secretary can provide additional funding to the export promotion programs. The programs are authorized to receive $255 million in annual mandatory CCC funds for FY2019-FY2023. Of that money, not less than $200 million is to be spent on MAP, not less than $34.5 million on FMDP, not more than $8 million on EMP, not more than $9 million on TASC, and $3.5 million on the Priority Trade Fund. While the MAP and FMDP funding reflects 2014 farm bill funding levels for those programs, EMP and TASC are each authorized at $1 million less than in the 2014 farm bill. Another change is that MAP and FMDP funds can now also be spent on authorized programs in Cuba.", "The law also reauthorizes direct credits or export credit guarantees for the promotion of agricultural exports to emerging markets of not less than $1 billion in each fiscal year through 2023. Further, the new law authorizes the appropriation of up to $2 million annually through 2023 to assist with the removal of nontariff and other trade barriers to U.S. agricultural products produced with biotechnology and other agricultural technologies. And the law adds a requirement that USDA facilitate the inclusion of more tribal food and agricultural products in federal trade-related activities and international trade missions. "], "subsections": []}, {"section_title": "Nutrition19", "paragraphs": ["The enacted farm bill's Nutrition title amends a variety of aspects of SNAP and related nutrition assistance programs (see Table 8 ). While the enacted provisions incorporate some of the SNAP policies included in the House- and/or Senate-passed bills, the Nutrition title does not include the House-passed bill's expansion of work requirements and SNAP employment and training (E&T) programs. The law reauthorizes SNAP and related programs for five years through the end of FY2023. CBO estimates the Nutrition title's impact on direct spending (in outlays) is cost-neutral over the 10-year period (FY2019-FY2028). While certain policies are estimated to increase spending by approximately $1.1 billion, all others total to an estimated decrease in spending by approximately $1.1 billion.", "SNAP Eligibility and Benefit Calculation. The enacted 2018 farm bill's Nutrition title largely maintains current SNAP eligibility and benefit calculation rules. After debate over work requirements for SNAP, the enacted conference report maintains both the existing general work requirements and the time limit for nondisabled adults without dependents to receive SNAP, with a few amendments", "While prior law allowed states to exempt up to 15% of those subject to the time limit from the time limit, the 2018 farm bill reduces such exemptions to 12%. The conference report expands the SNAP E&T activities that a state may provide and emphasizes supervised job search over unsupervised job search programs. The new law increases one stream of mandatory E&T funding by approximately $14 million and prioritizes specified E&T activities for receiving any reallocated funding.", "On benefit calculation, the new law requires states to conduct a simplified calculation for homeless households and also requires certain updates or studies of certain aspects of benefit calculation. Among other eligibility-related provisions that were not adopted, the House-passed bill would have limited categorical eligibility while amending asset limits, limited how utilities may have been calculated in benefit calculation, expanded work requirements to include individuals 50-59 years old and individuals with children over the age of six, made it more difficult for states to qualify for waivers from work requirements, and increased the earned income deduction. ( Table 8 expands upon the eligibility and benefit calculation differences between the bills.)", "SNAP fraud, errors, and related state administration . The enacted 2018 farm bill includes policies intended to reduce errors and fraud in SNAP. The enacted farm bill establishes a nationwide National Accuracy Clearinghouse to identify concurrent enrollment in multiple states and requires state action on information that could change benefit amounts. It increases USDA's oversight of state systems and the quality control system. The enacted bill also repeals funding for state performance awards. ", "Electronic Benefit Transfer (EBT) and retailers . The enacted Nutrition title contains policy changes for SNAP's EBT system and benefit redemption. It places limits on the fees EBT processors may charge, shortens the time frame for storing and expunging unused benefits, changes the authorization requirements for farmers' market operators with multiple locations, and requires USDA to conduct other specified retailer and EBT system oversight. The new law requires the nationwide implementation of the online acceptance of SNAP benefits and authorizes a pilot project to test SNAP recipients' use of mobile technology to redeem their SNAP benefits.", "Other SNAP- related grants . The enacted 2018 farm bill makes changes to other SNAP-related funding (E&T, a type of SNAP-related grants, is discussed above). The enacted Nutrition title reauthorizes the Food Insecurity Nutrition Incentive (FINI) grant program, renaming it the Gus Schumacher FINI, and provides for evaluation, training, and technical assistance. As added by the 2014 farm bill, this program funds projects that incentivize participants to purchase fruits and vegetables. The 2018 farm bill expands these SNAP incentive programs, increasing mandatory funding, and, within FINI's funding, establishes grants for produce prescription projects to serve individuals eligible for SNAP or Medicaid in households with or at risk of developing a diet-related health condition. The new law increases FINI funding by $417 million over 10 years. ", "In addition to FINI's fruit and vegetable incentives or prescriptions, the Nutrition title also includes policies\u2014but not federal funding\u2014for retailer incentive programs and authorizes, with discretionary funding, pilot projects to focus on milk consumption. On nutrition education (SNAP-Ed), the new law makes some policy changes, such as requiring an electronic reporting system, but it does not change the program's funding. ", "Food distribution programs . The Nutrition title reauthorizes and makes some policy changes to the nutrition assistance programs that distribute USDA foods to low-income households. The law includes changes to the Food Distribution Program on Indian Reservations, including requiring the federal government to pay at least 80% of administrative costs and creating a demonstration project for tribes to purchase their own commodities. The Nutrition title reauthorizes the Commodity Supplemental Food Program and increases the length of certification periods. ", "The enacted bill also increases funding for The Emergency Food Assistance Program. CBO estimates that the increases will amount to an additional $206 million over 10 years. Included in this cost estimate is $4 million for each of FY2019-FY2023 for newly authorized projects to facilitate the donation of raw/unprocessed commodities by agricultural producers, processors, and distributors to emergency feeding organizations.", "Other nutrition programs and policies . The enacted 2018 farm bill also continues the Senior Farmers' Market Nutrition Program and its mandatory funding. The enacted bill reduces funding for the Community Food Projects competitive grant program, providing $5 million per year instead of $9 million. Though generally the school meals programs are reauthorized outside of the farm bill, the 2018 farm bill continues the $50 million set-aside for USDA's fresh fruit and vegetable purchases for schools and requires USDA to take certain actions to enforce school meals' Buy American requirements. The enacted bill also authorizes new programs and discretionary funding for Public-Private Partnerships and Micro-Grants for Food Security."], "subsections": []}, {"section_title": "Credit20", "paragraphs": ["The Credit title (Title V) of the 2018 farm bill reauthorizes and makes several changes to provisions in the Consolidated Farm and Rural Development Act that governs the USDA farm loan programs (7 U.S.C. 1921 et seq. ). It also modifies the Farm Credit Act that governs the Farm Credit System (12 U.S.C. 2001 et seq. ) and reauthorizes the State Agricultural Loan Mediation Program (7 U.S.C. 5101; see Table 9 ).", "For the USDA farm loan programs, the 2018 farm bill adds specific criteria (e.g., coursework, military service, mentoring) that the Secretary may use to reduce the requirement for three years of farming experience in order for beginning farmers to qualify for loans. It also raises the maximum loan size for guaranteed loans (both farm ownership and farm operating) to $1.75 million per borrower in 2019, adjusted for inflation thereafter, from a lower statutory base of $700,000 established in 1996 ($1.4 million in 2018 after adjusting for inflation). For direct loans, the new farm bill increases the farm ownership loan limit to $600,000 and the farm operating loan limit to $400,000, both from $300,000 under prior law. For beginning and socially disadvantaged farmers, it increases the percentage of loans that may be guaranteed to 95%, generally from 80%-90%. ", "The State Agricultural Loan Mediation Program is reauthorized through FY2023, and the range of issues covered by the program is expanded.", "For the government-chartered cooperative Farm Credit System (FCS), the 2018 farm bill eliminates obsolete references to outdated names and transition periods from the 1980s and 1990s. It clarifies that FCS entities may share privileged information with the Farm Credit Administration (FCA) for regulatory purposes without altering the privileged status elsewhere, and it expands FCA's jurisdiction to hold accountable \"institution-affiliated parties\" (including agents and independent contractors). It also repeals a compensation limit for FCS bank boards of directors.", "For the Federal Agricultural Mortgage Corporation (FarmerMac), the new farm bill increases the acreage exception\u2014subject to a study by FCA\u2014from 1,000 acres to 2,000 acres for the dollar limit to remain a qualified loan. ", "For the Farm Credit System Insurance Corporation (FCSIC), which insures repayment of certain FCS debt obligations, the 2018 farm bill provides greater statutory guidance regarding the powers and duties of the FCSIC when acting as a conservator or receiver of a troubled FCS institution and the rights and duties of parties affected by an FCS institution being placed into a conservatorship or receivership. These are largely modeled after provisions that apply to depository institutions that are insured by the Federal Deposit Insurance Corporation.", "The enacted 2018 farm bill also directs four studies about agricultural credit: (1) an annual FSA report about its farm loan program that includes various performance characteristics, demographics, and participation by beginning and socially disadvantaged farmers; (2) an FCA study about the risks and capitalization of loans in the portfolios of FCS and FarmerMac and the feasibility of increasing the acreage for FarmerMac qualified loans; (3) a Government Accountability Office (GAO) study about credit availability for socially disadvantaged farmers; and (4) a GAO study about the credit needs of Indian tribes and members of Indian tribes."], "subsections": []}, {"section_title": "Rural Development21", "paragraphs": ["The Rural Development title of the enacted 2018 farm bill ( P.L. 115-334 ) addresses rural development policies including broadband deployment, opioid abuse and rural health, and business and infrastructure development (see Table 10 ). ", "The law adds a new section to the Rural Development Act of 1972 authorizing the Secretary to temporarily prioritize assistance under certain USDA Rural Development loan and grant programs to respond to a public health emergency. P.L. 115-334 also directs the Secretary to prioritize assistance under certain programs between FY2019 and FY2025 to combat substance use disorder. It directs the Secretary to make available 20% of Distance Learning and Telemedicine Program funds for telemedicine projects that provide substance use disorder treatment services. It also gives priority for assistance under the Community Facilities Program and Rural Health and Safety Education Program to entities providing substance use prevention, treatment, and recovery services. The new law also allows loans or loan guarantees provided to a community facility or rural entity to be used to refinance a rural hospital's debt obligation.", "P.L. 115-334 includes provisions that address access to broadband in rural communities. The law amends the Rural Broadband Access Loan and Loan Guarantee Program to allow USDA to provide grants, in addition to loans and loan guarantees, to fund broadband deployment projects. It increases authorized appropriations for broadband projects from $25 million to $350 million annually for FY2019-FY2023. Prior law established minimum acceptable levels of broadband service for a rural area for the purposes of this program as 4 megabits per second (Mbps) download and 1 Mbps upload. P.L. 115-334 increases these minimum acceptable levels to 25 Mbps download and 3 Mbps upload. The new law also reauthorizes the Rural Gigabit Network Pilot Program established in the 2014 farm bill ( P.L. 113-79 ) and renames the program Broadband Innovative Advancement. It also codifies the Community Connect Grant Program and authorizes discretionary funding for the program of $50 million annually for FY2019-FY2023. The new law also establishes a Rural Broadband Integration Working Group to identify barriers and opportunities for broadband deployment in rural areas.", "The enacted 2018 farm bill directs the Northern Border Regional Commission to establish a new State Capacity Building Grant Program to provide grants to support economic and infrastructure development in commission states. P.L. 115-334 also establishes a Council on Rural Community Innovation and Economic Development to enhance federal efforts to address the needs of rural areas by creating working groups within the council to focus on job acceleration and integration of smart technologies in rural communities and making recommendations to the Secretary of Agriculture. ", "P.L. 115-334 reauthorizes the Rural Energy Savings Program and amends the program to allow financing of off-grid and renewable energy and energy storage systems. It increases authorized discretionary funding for the Emergency and Imminent Community Assistance Water Program from $35 million per year to $50 million per year for FY2019-FY2023. It also decreases authorized discretionary funding to capitalize revolving water and wastewater loan funds from $30 million per year to $15 million per year for FY2019-FY2023.", "P.L. 115-334 amends the definition of rural in the ConAct (P.L. 92-419) to exclude from population-based criteria individuals incarcerated on a \"long-term or regional basis\" and to exclude the first 1,500 individuals who reside in housing located on military bases. It also amends the Housing Act of 1949 to allow any area defined as a rural area between 1990 and 2020 to remain classified as such until receipt of the 2030 decennial census.", "Among its other changes, the enacted 2018 farm bill establishes a new technical assistance and training program to assist communities in accessing programs offered through the Rural Business-Cooperative Service. In addition, it amends the Cushion of Credit Payments Program to cease new deposits and modify the interest rate structure that borrowers receive. It also allows borrowers to withdraw deposits from cushion of credit accounts to prepay loans under USDA's Rural Utilities Service without a prepayment penalty through FY2020. The new law amends the Rural Economic Development Loan and Grant Program to authorize $10 million per year in discretionary funding for FY2019-FY2023 and $5 million per year in mandatory funding for FY2022-FY2023. The law also repeals several unfunded programs, including the Rural Telephone Bank, the Rural Collaborative Investment Program, and the Delta Region Agricultural Development Grants Program."], "subsections": []}, {"section_title": "Research22", "paragraphs": ["USDA is authorized under four major laws to conduct agricultural research at the federal level and to provide support for cooperative research, extension, and postsecondary agricultural education programs in the states through formula funds and competitive grants to land-grant universities (see Table 11 ). The enacted Agriculture Improvement Act of 2018 ( P.L. 115-334 , Title VII) reauthorizes funding for these activities through FY2023 with either mandatory funding or discretionary funding that is subject to annual appropriations.", "Several new research areas in the High Priority Research and Extension program are designated as high priorities: macadamia tree health, national turfgrass research, fertilizer management, cattle fever ticks, and laying hen and turkey research. The law also reauthorizes the Organic Agriculture Research and Extension Initiative (OREI) and increases mandatory funding levels to $30 million annually for FY2019-FY2023. The Specialty Crop Research Initiative (SCRI) is reauthorized through FY2023 and will continue to include carve-out funding for the Emergency Citrus Disease Research and Extension Program. SCRI also expands program eligibility to include \"size-controlling rootstock systems for perennial crops\" and \"emerging and invasive species,\" among other production practices and technologies.", "The enacted law provides new programs for the 1890 land-grant institutions and 1994 tribal colleges of agriculture, authorizes new support for urban and indoor agricultural production, authorizes new funding for industrial hemp research and development, and authorizes an initiative supporting advanced agricultural research. Other provisions reauthorize and extend national genetic resources programs, OREI, and SCRI. The research title also makes changes to the Foundation for Food and Agriculture Research and reauthorizes several programs relating to agricultural biosecurity.", "The law creates a new scholarship program for students attending 1890 land-grant universities (Historically Black Colleges and Universities). Authorized grants are for young African American students who commit to pursuing a career in the food and agricultural sciences. Another provision of the law also establishes at least three Centers of Excellence, each to be led by an 1890 institution. The centers are to concentrate research and extension activities in one or more defined areas, including nutrition, wellness and health, farming systems and rural prosperity, global food security and defense, natural resources, energy and the environment, and emerging technologies. A similar program, New Beginnings for Tribal Students, is to offer competitive grants to 1994 tribal agriculture colleges to support recruiting, tuition, experiential learning, student services, counseling, and academic advising to increase the retention and graduation rates of tribal students at 1994 land-grant colleges. Another provision will make 1994 tribal colleges that offer an associate's degree or a baccalaureate eligible to participate in McIntire-Stennis forestry research support. ", "Several provisions authorize research and development funding for industrial hemp production. Under the Critical Agricultural Materials Act, hemp will now be included as an industrial product eligible for support. In amending and expanding a provision in the 2014 farm bill (Section 7606, P.L. 113-79 ), the Secretary is directed to conduct a study of hemp production pilot programs to determine the economic viability of domestic production and sale of hemp. A new provision creates a \"Hemp Production\" subtitle under the Agricultural Marketing Act of 1946, expanding the existing statutory definition of hemp and expanding eligibility to other producers and groups, including tribes and territories. States or Indian tribes wanting primary regulatory authority over hemp production will be required to implement a plan with specific requirements to further monitor and regulate their production of hemp. ", "A provision of the research title creates new programs supporting advanced agricultural research and urban, indoor, and emerging agricultural production systems. A new Agriculture Advanced Research and Development Authority (AGARDA) is established as a component of the Office of the Chief Scientist to examine the applicability for advanced research and development in food and agriculture through a pilot program that targets long-term and high-risk research. Focal areas include acceleration of novel, early-stage innovative agricultural research; prototype testing; and licensing and product approval under the Plant Protection Act and the Animal Health Protection Act, among other innovative research tools that might be used in the discovery, development, or manufacture of a food or agricultural product. ", "The Secretary is to develop and make publicly available a strategic plan setting forth the agenda that AGARDA will follow and provide for consultation with other federal research agencies; the National Academies of Sciences, Engineering, and Medicine; and others. There are provisions in the AGARDA program to expedite contract and grant awards and the appointments of highly qualified scientists and research program managers without regard to certain statutes governing appointments in the competitive federal service. The fund will have an authorized appropriation of $50 million each year for FY2019-FY2023. The program terminates at the end of FY2023.", "The enacted bill also authorizes a new Urban, Indoor, and Emerging Agricultural Production, Research, Education, and Extension Initiative. The provision authorizes the Secretary to make competitive grants to facilitate development of urban and indoor agricultural production systems and emerging harvesting, packaging, and distribution systems and new markets. The grants could also support methods of remediating contaminated urban sites (e.g., brownfields); determining best practices in pest management; exploring new technologies to minimize energy, lighting systems, water, and other inputs for increased food production; and studying new crop varieties and agricultural products to connect to new markets. The provision provides mandatory and discretionary spending of $4 million and $10 million, respectively, for each year for FY2019-FY2023. In addition, there is authorization of $14 million for a study of urban and indoor agriculture production under the 2017 Census of Agriculture, including data on community gardens, rooftop gardens, urban farms, and hydroponic and aquaponic farm facilities."], "subsections": []}, {"section_title": "Forestry23", "paragraphs": ["Similar to previous farm bills, the forestry title in the enacted 2018 farm bill ( P.L. 115-334 , Title VIII) includes provisions related to forestry research and establishes, modifies, or repeals several programs to provide financial and technical assistance to nonfederal forest landowners (see Table 12 ). The forestry title also includes several provisions addressing management of the National Forest System (NFS) lands managed by the USDA Forest Service and the public lands managed by the Bureau of Land Management (BLM) in the Department of the Interior. ", "Forestry assistance and research programs are primarily authorized under three main laws: the Cooperative Forestry Assistance Act, the Forest and Rangeland Renewable Resources Research Act, and the Healthy Forests Restoration Act. Many forestry programs are permanently authorized to receive such sums as necessary in annual discretionary appropriations and thus do not require reauthorization in the farm bill. Some programs, however, are not permanently authorized and expired at the end of FY2018. The 2018 farm bill reauthorizes, through FY2023, four such programs: the Healthy Forests Reserve Program, Rural Revitalization Technology, National Forest Foundation, and funding for implementing statewide forest resource assessments. The 2018 farm bill also provides explicit statutory authorization and congressional direction for current programs that were operating under existing, but broad, authorizations. For example, the farm bill authorizes the Landscape Scale Restoration program to provide financial assistance for large restoration projects that cross landownership boundaries, providing statutory direction for an assistance program that has been operating since FY2015 based on authorities provided in the 2014 farm bill. The 2018 farm bill also modifies or repeals some existing assistance programs. For example, the bill amends the permanent authorization for the Semiarid Agroforestry Research Center and establishes an FY2023 expiration. ", "The forestry title also addresses issues related to the accumulation of biomass in many forests and the associated increased risk for uncharacteristic wildfires on both federal and nonfederal land. In Part III of Subtitle F, the Timber Innovation Act incorporates provisions from both the House- and Senate-passed bills to establish, reauthorize, and modify assistance programs to promote wood innovation for energy use and building construction and to facilitate the removal of forest biomass. The law also authorizes up to $20 million in annual appropriations to provide financial assistance to states for hazardous fuel reduction projects that cross landownership boundaries. The law also reduces the annual authorization for the Forest Service's hazardous fuels management program from $760 million annually to $660 million annually and adds a sunset date of FY2023 to the authorization. In addition, the law repeals other biomass-related programs, such as the Biomass Commercial Utilization Program, a biomass energy demonstration project, and a wood fiber recycling research program.", "The 2018 farm bill contains a provision that changes how the Forest Service and BLM comply with the requirements under the National Environmental Policy Act for management activities involving sage grouse and/or mule deer habitat. The law establishes a categorical exclusion for specified activities under which projects up to 4,500 acres would not be subject to the requirements to prepare an environmental assessment or environmental impact statement. This provision was in the Senate-passed version of the bill. The House-passed version would have established 10 other categorical exclusions for various activities and would have also changed some of the consultation requirements under the Endangered Species Act. The enacted farm bill also includes provisions from the House bill related to the Forest Service's authority to designate insect and disease treatment areas on NFS lands and procedures intended to expedite the environmental analysis for specified priority projects within those areas. Specifically, the enacted farm bill adds hazardous fuels reduction as a priority project category and authorizes larger projects. ", "The enacted farm bill also addresses miscellaneous federal and tribal forest management issues. For example, the law expands the availability of Good Neighbor Agreements to include federally recognized Indian tribes and county governments and authorizes tribes to enter into contracts to perform specified forest management activities on tribal land. The enacted bill also reauthorizes the Collaborative Forest Landscape Restoration Program to receive appropriations through FY2023, raises the authorized level to $80 million, and authorizes the Secretary to issue waivers to extend projects beyond the initial 10 years. In addition, the enacted farm bill also authorizes the conveyance of NFS land through lease, sale, or exchange. The enacted bill expands the Small Tracts Act, reauthorizes the Facility Realignment and Enhancement program, authorizes the Forest Service to lease administrative sites, and includes provisions for specific parcels. The law also establishes two watershed protection programs on NFS lands and authorizes the Secretary to accept cash or in-kind donations from specified nonfederal partners to implement projects associated with one of those programs."], "subsections": []}, {"section_title": "Energy32", "paragraphs": ["The Energy title (Title IX) supports agriculture-based renewable energy. In the 2018 farm bill, the energy title extends eight programs and one initiative through FY2023 (see Table 13 ). It repeals one program and one initiative\u2014the Repowering Assistance Program and the Rural Energy Self-Sufficiency Initiative. It establishes one new grant program, the Carbon Utilization and Biogas Education Program, which is focused on the education and utilization of carbon sequestration as well as biogas systems. The title also amends the eligible material definition for the Biomass Crop Assistance Program to include algae. Further, the law modifies the definitions of biobased product (to include renewable chemicals), biorefinery (to include the conversion of an intermediate ingredient or feedstock), and renewable energy systems (to include ancillary infrastructure such as a storage system). ", "Mandatory program funding is less than what was provided in earlier farm bills. The 2018 farm bill authorizes a total of $375 million in mandatory funding for FY2019-FY2023. The 2014 farm bill authorized a total of $694 million in mandatory funding over its five-year life. Mandatory funding is provided for the Biobased Markets Program ($15 million over five years), the Biorefinery Assistance Program ($75 million over five years), the Bioenergy Program for Advanced Biofuels ($35 million over five years), the Rural Energy for America Program ($250 million over five years), and the Feedstock Flexibility Program for Bioenergy Producers, which is authorized for such sums as necessary for five years but with outlays projected to amount to $0 according to CBO. Mandatory funding is not provided for the Biodiesel Fuel Education Program, the Biomass Research and Development Initiative, the Biomass Crop Assistance Program, or the new Carbon Utilization and Biogas Education Program. The farm bill also authorizes discretionary appropriations, subject to annual appropriations action. "], "subsections": []}, {"section_title": "Horticulture33", "paragraphs": ["The 2018 farm bill reauthorizes many of the existing farm bill provisions supporting farming operations in the specialty crop, certified organic agriculture, and local foods sectors. These provisions cover several programs and policies benefitting these sectors, including block grants to states, support for farmers markets, data and information collection, education on food safety and biotechnology, and organic certification, among other market development and promotion initiatives (see Table 14 ). ", "Provisions affecting the specialty crop and certified organic sectors are not limited to the Horticulture title (Title X) but are contained within several other titles. Among these are programs in the Research, Nutrition, and Trade titles, among others. Related programs outside the Horticulture title include SCRI and OREI in the research title, as well as the Fresh Fruit and Vegetable Program and Section 32 purchases for fruits and vegetables under the Nutrition title, among other farm bill programs.", "The new law makes changes both to farmers markets and local foods promotion programs, combining and expanding the Farmers Market Promotion Program and Local Food Promotion Program, along with the Value-Added Agricultural Product Market Development Grants program, to create a new \"Local Agriculture Market Program\" with an expanded mission and mandatory funding of $50 million for FY2019 and each year thereafter, plus authorized appropriations. The law also includes several provisions from S. 3005 (Urban Agriculture Act of 2018) supporting urban agriculture development (including new programs and authorization for both mandatory and discretionary funding in the Miscellaneous, Research, Conservation, and Crop Insurance titles).", "The new law also makes changes to USDA's National Organic Program (NOP) and related programs, addressing concerns about organic import integrity by including provisions that strengthen the tracking, data collection, and investigation of organic product imports, including certain provisions in H.R. 3871 (Organic Farmer and Consumer Protection Act of 2017). It also amends the eligibility and consultation requirements of the National Organic Standards Board, among other changes. The law reauthorizes NOP appropriations above current levels while reauthorizing current funding for the Organic Production and Market Data Initiatives and for technology upgrades to improve tracking and verification of organic imports. It also expands mandatory funding for the National Organic Certification Cost Share Program.", "The new law also includes a number of provisions that further facilitate the commercial cultivation, processing, and marketing of industrial hemp in the United States. These provisions were in the Senate-passed bill and contained within the Horticulture title as well as the Research, Crop Insurance, and Miscellaneous titles of the enacted farm bill. Many of these provisions originated from introduced versions of the Hemp Farming Act of 2018 ( S. 2667 ; H.R. 5485 ). Chief among these provisions is an amendment to the Controlled Substances Act (21 U.S.C. 802(16)) to exclude hemp from the statutory definition of marijuana as redefined in the 2018 farm bill, provided it contains not more than a 0.3% concentration of delta-9 tetrahydrocannabinol\u2014marijuana's primary psychoactive chemical. The law also creates a new hemp program under the Agricultural Marketing Act of 1946 (7 U.S.C. Section 1621 et seq. ) establishing a regulatory framework for hemp production (under USDA's oversight), expands the statutory definition of hemp , and expands eligibility to produce hemp to a broader set of producers and groups, including tribes and territories. States or Indian tribes that seek primary regulatory authority over hemp production would be required to implement a \"plan\" to further monitor and regulate hemp production. States and tribal governments without USDA-approved plans would be subject to plans established by USDA to monitor and regulate hemp production. Without a license issued by USDA, it is unlawful to produce hemp in a state or tribal domain. Other provisions in the law's crop insurance title make hemp producers eligible to participate in federal crop insurance programs, while provisions in the Research title of the law make hemp production eligible for certain USDA research and development programs."], "subsections": []}, {"section_title": "Crop Insurance34", "paragraphs": ["The federal crop insurance program offers subsidized crop insurance policies to farmers. Farmers can purchase policies that pay indemnities when their yields or revenues fall below guaranteed levels. While the majority of federal crop insurance policies cover yield or revenue losses, the program also offers policies with other types of guarantees, such as index policies that trigger an indemnity payment based on weather conditions. ", "The Federal Crop Insurance Corporation (FCIC), a government corporation within USDA, pays part of the premium (about 63% on average in crop year 2017) while policy holders\u2014farmers and ranchers\u2014pay the balance. Private insurance companies, known as Approved Insurance Providers, deliver the policies in return for administrative and operating subsidies from FCIC. Approved Insurance Providers also share underwriting risk with FCIC through a mutually negotiated Standard Reinsurance Agreement. The USDA Risk Management Agency administers the federal crop insurance program. ", "The Crop Insurance title (Title XI) of the enacted 2018 farm bill ( P.L. 115-334 ) makes several modifications to the existing federal crop insurance program ( Table 15 ). CBO projects that the 2018 farm bill will decrease outlays for crop insurance relative to baseline levels by $104 million during the FY2019-FY2028 period. This projected reduction represents around 0.1% of projected crop insurance outlays over the same time period, during which outlays are projected to total about $78 billion.", "Within the 2018 farm bill's Crop Insurance title, the section with the highest projected increase in outlays ($90 million increase over FY2019-FY2028, Section 11109) expands coverage for forage and grazing by authorizing catastrophic level coverage for insurance plans covering grazing crops and grasses It also allows producers to purchase separate crop insurance policies for crops that can be both grazed and mechanically harvested on the same acres during the same growing season and to receive independent indemnities for each intended use. ", "Two other sections of the 2018 farm bill have projected outlay increases compared with prior law. One modifies the FCIC board's research and development authority in several ways, including redefining beginning farmer or rancher as an individual having actively operated and managed a farm or ranch for less than 10 years, thus making these individuals eligible for federal subsidy benefits available for the purposes of research, development, and implementation of whole-farm insurance plans ($13 million increase over FY2019-FY2028, Section 11122). The other section that is projected to result in higher outlays authorizes FCIC to waive certain viability and marketability requirements in considering proposals from private submitters to develop a policy or pilot program relating to the production of hemp ($8 million increase over FY2019-FY2028, Section 11113).", "The 2018 farm bill adds hemp to the definition of eligible crops for federal crop insurance subsidies (Sections 11101 and 11119) and also adds hemp to the list of crops whose policies may cover post-harvest losses (Section 11106). Most federal crop insurance policies do not cover post-harvest losses. Prior to the 2018 farm bill, coverage of post-harvest losses was limited to potatoes, sweet potatoes, and tobacco. ", "The section in the 2018 farm bill with the highest projected reduction in outlays ($125 million over FY2019-FY2028, Section 11110) raises the administrative fee for catastrophic level coverage from $300 to $655 per crop per county. Four other sections also scored projected reductions in outlays, according to CBO. These sections relate to consolidation and reduction of funding for certain research and development contracts and partnerships ($40 million over FY2019-FY2028, Section 11123); the expansion of enterprise units across county lines ($27 million over FY2019-FY2028, Section 11111); the reduction of funds available for review, compliance, and program integrity ($18 million over FY2019-FY2028, Section 11118); and modifications to how producer benefits are reduced when producing crops on native sod ($4 million over FY2019-FY2028, Section 11114)."], "subsections": []}, {"section_title": "Miscellaneous35", "paragraphs": ["The Miscellaneous title (Title XII) of the Agriculture Improvement Act of 2018 covers a wide array of issues across six subtitles, including livestock, agriculture and food defense, historically underserved producers, Department of Agriculture Reorganization Act of 1994 Amendments, other miscellaneous provisions, and general provisions. The enacted provisions are organized by subtitle in Table 16 . Those provisions that were located in the Miscellaneous titles of the House- and Senate-passed bills but were moved to other titles in the enacted bill, along with those provisions that were not enacted, are listed at the end of Table 16 .", "The livestock subtitle of the enacted 2018 farm bill establishes the National Animal Disease Preparedness Response Program (NADPRP) and the National Animal Vaccine and Veterinary Countermeasures Bank (NAVVCB), both under the National Animal Health Laboratory Network (NAHLN) in the Animal Health Protection Act (7 U.S.C. Section 8308a). The NADPRP is to address risks to U.S. livestock associated with the introduction of animal diseases and pests. The new law directs the NAVVCB to maintain significant quantities of vaccine and diagnostic products to respond to animal disease outbreaks. It also directs the NAVVCB is to prioritize foot-and-mouth disease. The act authorizes mandatory funding of $120 million for FY2019-FY2022 and $30 million for FY2023 and for each fiscal year thereafter. In addition, $30 million is authorized to be appropriated annually for FY2019-FY2023 for NAHLN, with as such sums as necessary appropriated for the NADPRP and NAVVCB.", "Among other livestock provisions, the act authorizes appropriations for the Sheep Production and Marketing Grant Program; provides for a study on a livestock dealer statutory trust; adds llamas, alpacas, live fish, and crawfish to the list of covered animals under the Emergency Livestock Feed Assistance Act; calls for a report on the guidance and outreach USDA's Food Safety and Inspection Service provides to small meat processors; and establishes regional cattle and carcass grading centers.", "Within the Agriculture and Food Defense subtitle of the enacted bill, the USDA Office of Homeland Security, as authorized in the 2008 farm bill ( P.L. 110-246 ), is repealed and reestablished under the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. Section 6901 et seq. ). Under the new authorities, USDA is required to conduct Disease and Pest of Concern Response Planning, establish a National Plant Diagnostic Network to monitor threats to plant health, and establish a National Plant Disease Recovery System for long-term planning. The section also amends the criteria for considering the impact on research performance when biological agents or toxins are added to the Biological Agents and Toxins List.", "The Historically Underserved Producers subtitle expands USDA activities for beginning, socially disadvantaged, and veteran farmers and ranchers. It prioritizes youth agricultural employment and volunteer programs and promotes the role of youth-serving organizations and school-based agricultural education programs. It also establishes a Tribal Advisory Committee to advise USDA on tribal and Indian affairs. The new law authorizes $50 million in discretionary funding for FY2019-FY2023 for the Farming Opportunities Training and Outreach program and provides mandatory funding for the program that increases from $30 million in FY2019 to $50 million in FY2023. The act also establishes within USDA an Office of Urban Agriculture and Innovative Production to promote urban, indoor, and emerging agricultural practices. ", "The 2018 farm bill includes conforming amendments that address USDA reorganizational changes that created the Under Secretary for Trade and Foreign Agricultural Affairs, the Under Secretary for Farm Production and Conservation, and the Assistant to the Secretary for Rural Development. For one, the act requires USDA to re-establish the position of Under Secretary of Agriculture for Rural Development that USDA abolished and replaced with an Assistant to the Secretary for Rural Development in its May 2017 reorganization. The new law amends the duties and provisions of the USDA Military Veterans Agricultural Liaison and the Office of Chief Scientist and creates a Rural Health Liaison. It further requires USDA to conduct a civil rights analysis on actions, policies, or decisions that may impact employees, contractors, or beneficiaries of USDA programs based on membership in a federally protected group. ", "The Other Miscellaneous Provisions and General Provisions subtitles contain 40 provisions that address a wide variety of issues. For example, the Protecting Animals with Shelter provision authorizes USDA\u2014in consultation with the Departments of Justice, Housing and Urban Development, and Health and Human Services\u2014to provide grants for emergency and transitional shelter for victims of domestic and dating violence, sexual assault, and stalking and their pets. Other animal-related provisions ban the slaughter of dogs and cats, impose a ban on animal fighting in U.S. territories, and require a report on the importation of dogs. ", "The enacted 2018 farm bill reauthorizes the Pima Cotton; the Wool Apparel Manufacturers; and the Wool Research, Development, and Promotion trust funds. It also establishes the Emergency Citrus Disease Research and Development Trust Fund to address invasive citrus diseases and pests. The act extends for 10 years the National Oilheat Research Alliance. It further establishes a Commission on Farm Transition to study issues affecting transitioning farms to the next generation and establishes a Century Farms program to recognize farms that have been owned by the same family and in operation for at least 100 years.", "In addition, the enacted bill requires USDA to conduct and issue various studies and reports on a variety of topics, among which are food waste; the business centers of the Natural Resources Conservation Service, the Farm Service Agency, and the Risk Management Agency; the number of personnel in USDA agencies each year; the effect of absentee landlords; the level of funding that would allow the National Institute of Food and Agriculture to address evolving research and extension needs in rural and farming communities; an FDA food labeling regulation (81 Fed. Reg. 33742); and the impact of rice ratooning and post-disaster flooding on migratory birds.", "The enacted 2018 farm bill directs USDA to restore exemptions for weighing and inspection services that were included in the United States Grain Standards Act (USGSA) in 2003 that were revoked when the USGSA was reauthorized in 2015. The act requires the U.S. Fish and Wildlife Service to clarify that the green sea urchin is exempt from the export permission requirements of the Endangered Species Act (16 U.S.C. Section 1538(d)(1) and its licensing regulations. The act also amends the Controlled Substance Act (21 U.S.C. Section 802(16)) to exclude industrial hemp from the statutory definition of marijuana ."], "subsections": []}]}, {"section_title": "Provisions of the 2018 Farm Bill by Title Compared with the House- and Senate-Passed Bills (H.R. 2) and with Prior Law", "paragraphs": [], "subsections": []}]}}
{"id": "R44857", "title": "Special Counsel Investigations: History, Authority, Appointment and Removal", "released_date": "2019-03-13T00:00:00", "summary": ["The Constitution vests Congress with the legislative power, which includes authority to establish federal agencies and conduct oversight of those entities. Criminal investigations and prosecutions, however, are generally regarded as core executive functions assigned to the executive branch. Because of the potential conflicts of interest that may arise when the executive branch investigates itself, there have often been calls for criminal investigations by prosecutors with independence from the executive branch. In response, Congress and the U.S. Department of Justice (DOJ) have used both statutory and regulatory mechanisms to establish a process for such inquiries. These frameworks have aimed to balance the competing goals of independence and accountability with respect to inquiries of executive branch officials.", "Under the Ethics in Government Act of 1978, for example, Congress authorized the appointment of \"special prosecutors,\" who later were known as \"independent counsels.\" Under this statutory scheme, the Attorney General could request that a specially appointed three-judge panel appoint an outside individual to investigate and prosecute alleged violations of criminal law. These individuals were vested with \"full power and independent authority to exercise all investigative and prosecutorial functions and powers of the Department of Justice\" with respect to matters within their jurisdiction. Ultimately, debate over the scope, cost, and effect of the investigations (perhaps most notably the Iran-Contra and the Whitewater investigations) resulted in the law's expiration and nonrenewal in 1999.", "Following the lapse of these statutory provisions, DOJ promulgated regulations authorizing the Attorney General (or, if the Attorney General is recused from a matter, the Acting Attorney General) to appoint a \"special counsel\" from outside the federal government to conduct specific investigations or prosecutions that may be deemed to present a conflict of interest if pursued under the normal procedures of the agency. Special counsels are not subject to \"day-to-day supervision\" by any official and are vested \"within the scope of his or her jurisdiction, the full power and independent authority to exercise all investigative and prosecutorial functions of any United States Attorney.\"", "The independent nature of these investigations has raised constitutional questions about the propriety of the appointment and removal mechanisms provided for the officials leading the inquiries. These concerns were addressed by the Supreme Court in the 1988 case of Morrison v. Olson, which upheld the constitutionality of the independent counsel statute. The reasoning of that opinion has been challenged, however, and the Court's subsequent analysis of related issues in the 1997 case of Edmond v. United States and the 2010 case Free Enterprise Fund v. Public Accounting Oversight Board did not apply the standard enunciated in Morrison. The constitutional status of a statutory framework similar to the independent counsel statute is thus subject to debate. Several bills introduced in the 116th Congress (including S. 71 and H.R. 197, which merge aspects of two preceding bills introduced in the 115th Congress, S. 1735 and S. 1741) would statutorily insulate a special counsel from removal, echoing aspects of the independent counsel statute's provisions. Whether such proposals would withstand constitutional challenge today might ultimately turn on the continued vitality of the analysis applied in Morrison."], "reports": {"section_title": "", "paragraphs": ["T he Constitution gives no direct role to Congress in conducting federal law enforcement. While Congress enjoys the legislative power under Article I of the Constitution, which includes substantial authority to investigate the executive branch pursuant to its oversight function, criminal investigations and prosecutions are generally considered core executive functions entrusted with the executive branch un der Article II. Because of the potential conflicts of interest that may arise when the executive branch investigates itself, however, there have often been calls for prosecutors with independence from the executive branch. In response, Congress and the U.S. Department of Justice (DOJ) have used both statutory and regulatory mechanisms to establish a process for such inquiries. These responses have attempted, in different ways, to balance the competing goals of independence and accountability with respect to inquiries of executive branch officials. This report first analyzes the use of special prosecutors and independent counsels that were authorized under now-expired provisions of the Ethics in Government Act of 1978, as well as the use of special counsels that are currently authorized by DOJ regulations. A glossary of terms at the beginning of the report briefly defines these italicized terms (see Table 1 ). ", "The report continues with an examination of various legal questions relevant to these efforts. As a threshold matter, some have challenged the appointment of a special counsel under the current regulations as unconstitutional under the Appointments Clause. More broadly, designing a statutory framework for criminal investigations and prosecutions with independence from the executive branch raises questions about how this can be achieved consistent with the requirements of the Constitution. For instance, the Supreme Court upheld the constitutionality of the since-expired independent counsel statute in the 1988 case of Morrison v. Olson , but has not applied the reasoning of Morrison in subsequent cases raising related issues. The constitutional status of a statutory framework analogous to the independent counsel statute is thus subject to debate. Several bills introduced in the 116 th Congress (including S. 71 and H.R. 197 , which merge aspects of two preceding bills introduced in the 115 th Congress, S. 1735 and S. 1741 ) statutorily insulate a special counsel from removal, echoing aspects of the independent counsel statute's provisions. Whether such proposals would withstand constitutional challenge today might ultimately turn on the continued vitality of the analysis applied in Morrison ."], "subsections": [{"section_title": "Historical Background on the Use of Independent Investigations of Alleged Wrongdoing", "paragraphs": ["In part to counter perceptions that executive officials suspected of criminal wrongdoing may be subject to different standards than individuals outside the government, independent investigations have sometimes been used to determine whether officials have violated the law. The government has used a range of options to conduct these types of inquiries: special prosecutors, independent counsels, and special counsels. Executive branch officials have noted, however, that \"there is no perfect solution\" to achieving the goal of avoiding potential conflicts or the appearance thereof that may arise as a result of the executive branch investigating its own officials.", "While special prosecutors investigated executive officials prior to the 1970s, the events commonly known as Watergate led to perhaps the most famous use of an independent investigation in U.S. history. Specifically, the break-in and burglary of the Democratic National Committee Headquarters at the Watergate Hotel in 1972 led to widespread allegations of wrongdoing by senior officials in the executive branch and calls for the appointment of a prosecutor who could conduct an investigation independent of political interference. In the midst of the Watergate controversy, Elliot Richardson, whose nomination to be Attorney General was being considered by the Senate Committee on the Judiciary, agreed to name an independent special prosecutor to pursue the Watergate allegations. Once confirmed by the Senate, the Attorney General, under his own authority, appointed Archibald Cox as special prosecutor for the Watergate investigation in 1973. The President subsequently ordered DOJ officials to fire the special prosecutor later that year, leading to public outcry, the appointment of another special prosecutor, and, ultimately, the initiation of impeachment proceedings by Congress. Following these events, Congress enacted a new mechanism\u2014discussed in the following section\u2014for the use of special prosecutors who would be appointed by a three-judge panel upon the request of the Attorney General."], "subsections": []}, {"section_title": "Special Prosecutors and Independent Counsels, as Authorized Under the Ethics in Government Act", "paragraphs": ["Congress enacted the Ethics in Government Act of 1978 out of a broad intent \"to preserve and promote the integrity of public officials and institutions.\" The statute addressed a number of concerns about the ethical behavior of some public officials in the wake of the Watergate scandal. Title VI of the statute (hereinafter \"the independent counsel statute\") established a mechanism for the appointment of individuals to lead independent investigations and prosecutions in certain circumstances. The statute originally designated these individuals as \"special prosecutors\" and later renamed them as \"independent counsels.\"", "Two of the most commonly known examples of appointments of independent counsels under the statute involved incidents known generally as Iran-Contra and Whitewater. In 1986, Lawrence E. Walsh was appointed as independent counsel to investigate potential criminal misconduct of government officials related to the sale of arms to Iran and alleged diversion of profits from the sale to support the \"the military activities of the Nicaraguan contra rebels\" in violation of federal law. That investigation resulted in criminal charges for 14 individuals, most of whom were convicted, though some convictions were overturned on various grounds. In 1994, Kenneth Starr was appointed as independent counsel to investigate potential violations of federal criminal or civil law related to President Clinton or First Lady Hillary Rodham Clinton's relationship with Madison Guaranty Savings and Loan Association, Whitewater Development Corporation, or Capital Management Services, as well as any allegations arising out of that investigation. That investigation led to a myriad of charges for a number of individuals, but did not include indictments of the President or First Lady."], "subsections": [{"section_title": "Appointment Process", "paragraphs": ["Appointment of independent counsels under the statute occurred in two steps, requiring the involvement of both the Attorney General and a panel of federal judges."], "subsections": [{"section_title": "Role of the Attorney General", "paragraphs": ["The independent counsel statute generally directed the Attorney General to conduct a preliminary investigation upon receiving information about potential wrongdoing by certain officials in the executive branch or from presidential campaign committees. If, within 30 days of receiving such information, the Attorney General determined that the information was specific and from a credible source, the Attorney General was required to conduct a preliminary investigation for a period of up to 90 days. The statute did not require the Attorney General to acknowledge or notify any other parties that such information had come to his attention, but did require that the Attorney General inform the court that he had commenced a preliminary investigation.", "The conclusions reached in that initial investigation determined whether an independent counsel would be appointed to investigate the underlying allegations further. The statute required that the Attorney General request appointment of a special prosecutor by the special division of a federal court (discussed below) under three sets of circumstances. First, if the 90-day window for the preliminary investigation passed without a determination that further investigation or prosecution was not warranted, the Attorney General was required to request the appointment by the court. Second, if the Attorney General's initial investigation determined that further investigation or prosecution was warranted, the Attorney General was also required to request the appointment by the court. Finally, if the preliminary investigation indicated that further action was not warranted, but additional information was subsequently revealed which led the Attorney General to determine that further investigation or prosecution was indeed warranted, the Attorney General was mandated to conduct a preliminary investigation based on that information. ", "Following that investigation, the statute required the Attorney General to seek appointment of an independent counsel under the same circumstances\u2014 i.e. , if no determination had been made within 90 days or if the Attorney General determined further investigation was warranted. The Attorney General's decision to request an appointment under the statute was not subject to judicial review. While the Attorney General was not authorized under the statute to appoint the independent counsel, he was required to provide the court with \"sufficient information to assist\" the court in the selection of the appointed individual and to define the jurisdiction of the inquiry."], "subsections": []}, {"section_title": "Role of the Court", "paragraphs": ["While the Attorney General conducted the initial investigation to determine whether an independent investigation was warranted, the independent counsel statute required that a special division of the U.S. Court of Appeals for the D.C. Circuit (D.C. Circuit), composed of three federal judges or Justices, appoint the independent counsel.", "The Chief Justice of the U.S. Supreme Court assigned three federal judges or Justices to that division for two-year assignments. The statute's provisions regarding assignment of the three-judge panel required that the panel include a judge from the D.C. Circuit and that not more than one judge or Justice be from any single court. Any judge or Justice serving in the special division of the court that appointed the independent counsel was barred from participating in any judicial proceeding involving the independent counsel while he or she was still serving in that position or any proceeding involving the exercise of the independent counsel's official duties.", "Based on recommendations from the Attorney General regarding the selection and jurisdiction of the independent counsel, the three-judge panel had the final authority to make the appointment and define the prosecutorial jurisdiction. The court was expressly barred from appointing \"any person who holds or recently held any office of profit or trust under the United States.\""], "subsections": []}]}, {"section_title": "Scope of Authority", "paragraphs": ["\"[W]ith respect to all matters in [the] independent counsel's prosecutorial jurisdiction,\" Congress granted the independent counsel \"full power and independent authority to exercise all investigative and prosecutorial functions and powers of the Department of Justice, the Attorney General, and any other officer or employee of the Department of Justice . . . .\" Examples of the independent counsel's enumerated authorities included", "conducting investigations and grand jury proceedings; engaging in judicial proceedings, including litigation and appeals of court decisions; reviewing documentary evidence; determining whether to challenge the use of testimonial privileges; receiving national security clearances, if appropriate; seeking immunity for witnesses, warrants, subpoenas, and other court orders; obtaining and reviewing any tax return; and carrying out prosecutions in court, including filing indictments.", "The independent counsel could request DOJ assistance in the course of his or her investigation, including access to materials relevant to the jurisdiction of the inquiry and the necessary resources and personnel to perform his or her assigned duties."], "subsections": []}, {"section_title": "Removal", "paragraphs": ["Other than impeachment, the independent counsel could be subject to removal \"only by the personal action of the Attorney General and only for good cause, physical or mental disability . . ., or any other condition that substantially impairs the performance of such independent counsel's duties.\" In other words, the independent counsel was generally not subject to the control and oversight of any other official within the executive branch. If the Attorney General exercised his removal authority, he or she was required to notify the special division of the court responsible for the initial appointment and the Committees on the Judiciary of both the House of Representatives and the Senate, identifying the reasons for removal."], "subsections": []}, {"section_title": "Termination of Independent Counsel Inquiries", "paragraphs": ["The inquiry led by the independent counsel under the statute could be terminated under two methods. First, the statute directed that the office of the independent counsel would terminate upon notification by the independent counsel to the Attorney General that the investigation and any subsequent prosecutions had been completed. Second, the statute permitted the special division of the court\u2014by its own choice or by the recommendation of the Attorney General\u2014to terminate the office at any time if the investigation had been completed or sufficiently completed, allowing DOJ to formally complete the inquiry under its own processes. In either case, the independent counsel was required to submit a report to the special division of the court detailing the work completed. The report was required to include \"a description of the work of the independent counsel, including the disposition of all cases brought.\""], "subsections": []}, {"section_title": "Statutory Reauthorizations and Eventual Lapse of the Independent Counsel Statute", "paragraphs": ["When the independent counsel statute was originally enacted in 1978, Congress provided that its authority would lapse five years after enactment. Investigations that had already started pursuant to the provisions were permitted to continue, but no new investigations could be initiated at that time. Rather than allow the statute to lapse, Congress reauthorized the law, with some amendments, several times. It was reauthorized in 1983 and 1987, and remained in effect until 1992, when Congress allowed the law to expire. The statute was again reauthorized in 1994, following concerns related to the investigation of the Whitewater controversy during the interim years. However, concerns over whether the independent counsel possessed too much power, which arose after the extensive independent counsel investigations of the Iran-Contra affair and the Whitewater controversy, resulted in the law's ultimate expiration and nonrenewal in 1999."], "subsections": []}]}, {"section_title": "Legal Authority of Special Counsels Under Current Law", "paragraphs": ["Following the expiration of the independent counsel statute, DOJ promulgated regulations in 1999, which are currently still in effect, to establish procedures for the appointment of special counsels pursuant to the Attorney General's general administrative hiring authority. DOJ described these regulations as \"strik[ing] a balance between independence and accountability in certain sensitive investigations.\" DOJ acknowledged at the time the regulations were promulgated, however, that \"there is no perfect solution\" to achieving that goal.", "Thus far, it appears the special counsel regulations have been invoked infrequently. In 1999, shortly after the regulations were promulgated, the Attorney General appointed former U.S. Senator John Danforth as special counsel to investigate events related to the government actions that occurred six years earlier at the Branch Davidian compound in Waco, Texas. The special counsel's investigation found no wrongdoing on the part of federal law enforcement officials. ", "In May 2017, Deputy Attorney General Rod Rosenstein\u2014acting in place of Attorney General Jeff Sessions, who had recused himself from the investigation\u2014issued a publicly-available order (public order) appointing former Federal Bureau of Investigation Director Robert S. Mueller III as special counsel. Rosenstein indicated in the public order that the appointment had been made pursuant to general statutory authority to manage DOJ investigations, but directed that the investigation would be subject to the agency's regulations governing the scope and administration of special counsel investigations. Specifically, the public order directed the special counsel to investigate efforts of the Russian government \"to influence the 2016 election and related matters.\" DOJ later issued a non-public memorandum that set forth in more detail the scope of the investigation and definition of the special counsel's authority. That memorandum explained that the public order \"was worded categorically in order to permit its public release without confirming specific investigations involving specific individuals.\"", "It should be noted that the Attorney General also possesses general statutory authority to appoint DOJ staff to conduct or coordinate particular investigations. DOJ has used this authority previously to appoint individuals who were referred to as \"special counsels\" to investigate particular matters. This authority differs from the special counsel regulations because it involves assignment of an internal agency official rather than an individual from outside the government. For example, in 2003, then-Deputy Attorney General James Comey (acting in place of then-Attorney General John Ashcroft, who had recused himself from the investigation) used this statutory authority to appoint Patrick Fitzgerald to lead an investigation of whether White House or other federal officials unlawfully leaked the identity of a Central Intelligence Agency officer to a reporter. While referred to as a special counsel, Fitzgerald was serving as a U.S. Attorney when named to lead the investigation, precluding an appointment under the special counsel regulations. While an individual referred to as a \"special counsel\" thus may be appointed under either the general statutory authority or under the specific special counsel regulations, those named under the regulations might be viewed as possessing more independence, as they are appointed from outside the agency and are insulated by the regulations from removal except for cause.", "DOJ may also task other arms of the Justice Department\u2014such as the Office of the Inspector General\u2014to investigate high-profile, sensitive, and resource-intensive matters regarding \"the Department's compliance with certain legal requirements and [internal] policies and procedures.\" For example, recently, in response to concerns raised by some Members of Congress with respect to \"certain prosecutorial and investigative determinations made by the [Department of Justice] in 2016 and 2017,\" Attorney General Sessions considered, but declined to pursue, a separate special counsel inquiry related to allegations of potential misconduct within the Department, noting that special counsel appointments are \"by design, . . . reserved for use in only the most 'extraordinary circumstances.'\" Such circumstances, according to Sessions, require the Attorney General to determine that \"'the public interest would be served by removing a large degree of responsibility for the matter from the Department of Justice.'\" Instead, the Attorney General indicated that DOJ's Inspector General has been tasked with reviewing the actions that the Members had suggested be the subject of the second special counsel inquiry, including allegations about DOJ's compliance with legal requirements and internal policies. Instead, the Attorney General announced that he had tasked John W. Huber, U.S. Attorney for the District of Utah, to lead the investigation into those allegations, emphasizing that Huber would be working \"from outside the Washington, D.C. area and in cooperation with the Inspector General.\" "], "subsections": [{"section_title": "DOJ Special Counsel Regulations", "paragraphs": [], "subsections": [{"section_title": "Appointment and Selection by the Attorney General or the Acting Attorney General", "paragraphs": ["Under the DOJ regulations that supplanted the independent counsel provisions, the authority to appoint and select a special counsel resides solely with the Attorney General (or his surrogate, if the Attorney General has recused himself from the matter), rather than with the judicial branch. The regulations generally state that the Attorney General \"will appoint a Special Counsel\" to conduct certain investigations or prosecutions. To make such an appointment, the Attorney General must determine that (1) a criminal investigation is warranted; (2) the normal processes of investigation or prosecution would present a conflict of interest for DOJ, or other extraordinary circumstances exist; and (3) public interest requires a special counsel to assume those responsibilities. When DOJ promulgated the special counsel regulations, it explained the type of conflicts that might lead to the appointment of a special counsel: \"[t]here are occasions when the facts create a conflict so substantial or the exigencies of the situation are such that any initial investigation might taint the subsequent investigation, so that it is appropriate for the Attorney General to immediately appoint a Special Counsel.\"", "After receiving information that could warrant consideration of an independent investigation, the Attorney General generally has discretion under the regulations to determine whether and when the appointment of a special counsel would be appropriate. The Attorney General may appoint a special counsel immediately; may require an initial investigation to inform his decision about whether to appoint a special counsel; or \"may direct that appropriate steps be taken to mitigate any conflicts of interest, such as recusal of particular officials,\" to permit the investigation to be concluded within \"the normal processes.\"", "In the event that the Attorney General has recused himself from a particular matter upon which a special counsel appointment might be appropriate, the regulations contemplate that the Acting Attorney General will take responsibility for the appointment process. Federal law provides that the Deputy Attorney General would serve as the Acting Attorney General.", "Individuals appointed as special counsels under these regulations must be chosen from outside the federal government. Such individuals must be \"a lawyer with a reputation for integrity and impartial decisionmaking, and with appropriate experience to ensure both that the investigation will be conducted ably, expeditiously and thoroughly, and that investigative and prosecutorial decisions will be supported by an informed understanding of the criminal law and Department of Justice policies.\" The special counsel may hold other professional roles during his or her service, but is required to agree that the duties of the appointment will take \"first precedence.\""], "subsections": []}, {"section_title": "Scope of Jurisdiction and Authority", "paragraphs": ["Like the appointment and selection process, the sole authority to determine the scope of the special counsel's inquiry rests with the Attorney General. The jurisdiction of the inquiry is determined by \"a specific factual statement\" about the matter to be investigated, which is provided by the Attorney General to the special counsel at the outset of the appointment. Beyond that general jurisdiction, the special counsel is also authorized \"to investigate and prosecute federal crimes committed in the course of, and with intent to interfere with, the Special Counsel's investigation, such as perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses.\" While these are the original parameters of a special counsel's jurisdiction, additional matters may be assigned to the special counsel as the inquiry proceeds. To expand the jurisdiction, the special counsel must find such an expansion is necessary to complete the original assignment or necessary \"to investigate new matters that come to light in the course of his or her investigation.\" Upon such finding, the special counsel's jurisdiction may be expanded only after consultation with the Attorney General, who then has the authority to determine whether to assign the additional matters to the special counsel or \"elsewhere.\" Within the jurisdiction identified by the Attorney General, the special counsel has relatively broad authority to carry out his or her inquiry. According to the regulations, \"the Special Counsel shall exercise, within the scope of his or her jurisdiction, the full power and independent authority to exercise all investigative and prosecutorial functions of any United States Attorney.\"", "The scope of the special counsel's authority under DOJ regulations has been the subject of legal challenge in the course of Special Counsel Robert Mueller III's investigation that began in 2017. That inquiry resulted in several indictments, including against Paul Manafort, the former chairman of President Trump's 2016 campaign, for crimes such as conspiracy to launder money; tax fraud; obstruction of justice and witness tampering; failure to register as an agent of a foreign principal; false statements; and failure to file reports of foreign bank and financial accounts. Manafort filed a motion to dismiss the criminal indictment lodged against him, challenging the indictment as an unlawful exercise of the special counsel's authority. Specifically Manafort argued that the factual matter named as the special counsel's original jurisdiction in the May 2017 public appointment order (i.e., \"any links and/or coordination between the Russian government and individuals associated with the campaign of President Donald Trump,\" as well as \"any matters that arose or may arise directly from the investigation, and any other matters within the scope of 28 C.F.R. \u00a7 600.4(a)\" ) would preclude the charges made against him. According to Manafort, because the charges made against him do not relate to links with the Russian government or actions taken during his time as a campaign manager in 2016 and because the public order's general authority does not grant authority on sufficiently specific matters as required by DOJ regulations, the special counsel cannot pursue the charges filed against him without seeking additional authority under the regulations. ", "The government's response to these claims disclosed and explained additional documents outlining the scope of the investigation. DOJ acknowledged that the applicable regulations require the special counsel to be provided a \"'specific factual statement of the matter to be investigated,'\" but emphasized that \"the regulations do not provide that the factual statement must be in an appointment order or otherwise made public.\" According to a subsequent memorandum from Acting Attorney General Rosenstein that was partially released with the government's filing, while the initial order \"was worded categorically in order to permit its public release without confirming specific investigations involving specific individuals,\" a subsequent memorandum provided \"a more specific description\" of allegations deemed to be authorized as part of the special counsel investigation. Such development of the parameters of jurisdiction during the course of an investigation, according to DOJ, are necessary for \"an effective investigation [which] must have some latitude to extend beyond the known facts at the time of [the appointment].\"", "Ultimately, the courts that considered Manafort's motion to dismiss his indictments rejected his challenge to the special counsel's authority. For example, a federal district court in Virginia considering Manafort's motion concluded that while many of the charges pursued against Manafort \"on their face, appear unrelated to the 2016 Presidential election,\" the investigation and issues charged in the particular case fell \"squarely within the jurisdiction outlined\" under the appointment order. The court emphasized that the appointment order's broad grant of authority to investigate \"any links\" between campaign officials and the Russian government permitted investigation into relationships with individuals supported by, even if not members of, the Russian government, such as members of a pro-Russia Ukrainian political party. Moreover, with respect to charges filed by the special counsel that did not pertain directly to the campaign and Russia, a D.C. federal court held such charges, such as tax evasion with regard to proceeds resulting from Manafort's relationship with pro-Russian entities, fell within the special counsel's jurisdiction as \"'matters that arose or may arise directly from the investigation.'\" A federal district court in Virginia further relied upon the later DOJ memorandum that clarified the scope of the special counsel's original appointment as a source of the special counsel's authority, explaining that the original appointment order was worded categorically so that it could be publicly released and noting that the clarifying memorandum specifically authorized the special counsel to investigate crimes related to these other charges. Accordingly, the D.C. federal court rejected Manafort's argument that the special counsel's authority amounted to a \"'blank check'\" for limitless investigation, reading the appointment order's language as \"tightly drafted\" to give \"the Special Counsel flexibility from the start to manage the investigation and pursue matters that arose 'directly' from the issues within his purview.\""], "subsections": []}, {"section_title": "Oversight and Removal", "paragraphs": ["The DOJ special counsel regulations limit the special counsel's relatively broad authority to conduct an inquiry by first subjecting his or her conduct to DOJ rules, regulations, procedures, practices, and policies. Special counsels are directed to consult with the appropriate offices within DOJ or the Attorney General directly if necessary. Additionally, special counsels are subject to discipline for misconduct and breach of ethical duties that are generally applicable to DOJ employees.", "Second, the DOJ regulations contemplate some oversight of the special counsel by the Attorney General. Specifically, they direct the special counsel to \"determine whether and to what extent to inform or consult with the Attorney General or others within the Department about the conduct of his or her duties and responsibilities.\" The regulations expressly require the special counsel to \"notify the Attorney General of events in the course of his or her investigation in conformity with the Departmental guidelines with respect to Urgent Reports.\" Under DOJ internal guidance, attorneys must inform DOJ leadership of certain events, including \"major developments in significant investigations and litigation\" such as the filing of criminal charges. DOJ has explained that conformance with this notification requirement \"guarantees a 'resulting opportunity for consultation' between the Attorney General and the Special Counsel about the anticipated action, which 'is a critical part of the mechanism through which the Attorney General can discharge his or her responsibilities with respect to the investigation.'\"", "While the regulations indicate that special counsels \"shall not be subject to the day-to-day supervision of any official,\" the rules authorize the Attorney General to \"request that the Special Counsel provide an explanation for any investigative or prosecutorial step.\" If, after giving the views of the special counsel \"great weight,\" the Attorney General's review of such actions leads him to \"conclude that the action is so inappropriate or unwarranted under established Departmental practices that it should not be pursued,\" the Attorney General must notify the Chairman and Ranking Members of the Judiciary Committees in Congress of that decision with an explanation.", "Aside from review of particular actions, the regulations also grant the Attorney General authority to discipline or remove the special counsel. This authority may be exercised \"only by the personal action of the Attorney General.\" In other words, to comply with the regulations, the Attorney General himself must remove the special counsel, not the President or a surrogate (unless, as noted previously in this report, the Attorney General has recused himself in the matter under investigation). A decision to remove the special counsel must be made with \"good cause,\" such as misconduct, a dereliction of duty, incapacity, the existence of conflicts of interest, or violation of departmental policies. The Attorney General must report his decision to remove the special counsel, with an explanation of that decision, to both the Chairman and Ranking Members of the Judiciary Committees of Congress."], "subsections": []}]}, {"section_title": "Review and Conclusion of Special Counsel Inquiries", "paragraphs": ["Although the special counsel regulations do not provide an explicit timeline for inquiries or a special counsel's tenure, they do require the special counsel to report to DOJ periodically about the budget of operations for the inquiry as well as with status updates in some circumstances. Specifically, the special counsel must provide a proposed budget within 60 days of the appointment. The special counsel must also provide annual reports regarding the status of the investigation and budget requests 90 days prior to the beginning of the fiscal year. The Attorney General is required to review the special counsel's annual report and determine whether the investigation should continue and with what budget.", "When the special counsel's inquiry concludes, the special counsel must provide a confidential report to the Attorney General with explanations of the decisions made in the course of the inquiry in favor of or declining to prosecute any charges. The regulations do not expressly provide for disclosure of this report to any other parties, nor do they further identify the parameters of the content of that report. The regulations do, however, require the Attorney General to make certain reports to the Chairs and Ranking Members of the Judiciary Committees of each house of Congress, including upon the conclusion of the investigation. The regulations' only guidance regarding the Attorney General's concluding report's content is that the report must include \"an explanation for [the] action,\" \"including, to the extent consistent with applicable law, a description and explanation of instances (if any) in which the Attorney General concluded that a proposed action by a Special Counsel was so inappropriate or unwarranted under established Departmental practices that it should not be pursued.\" The regulation's use of the word \"including,\" which generally denotes that the terms that follow are illustrative and not definitional, may suggest that the Attorney General's report to Congress is not necessarily limited to explanations of the Special Counsel's prosecutorial decisions. None of the reporting requirements mandate public release of any information shared either between DOJ officials or between DOJ and congressional committees. Instead, the regulations provide the Attorney General with the discretion to \"determine that public release of [his reports to Congress] would be in the public interest.\" Moreover, the report's contents need to be \"consistent with applicable law,\" which may suggest that legal doctrines such as executive privilege and the rules governing the release of grand jury information could restrict what can be included in the report."], "subsections": []}]}, {"section_title": "Appointing and Removing a Special Counsel: Legal Considerations", "paragraphs": ["Designing a mechanism to provide for criminal inquiries of executive branch officials by officers independent from the executive branch has raised questions about whether this goal can be accomplished in harmony with the requirements of the Constitution. Under the doctrine of separation of powers, the Constitution assigns each branch of government particular functions that generally may not be delegated to, nor usurped by, another branch. In this vein, Congress is entrusted with the legislative power, and may establish executive branch agencies and conduct oversight of those entities. Congress may not, however, engage in criminal prosecutions on behalf of the United States\u2014a function generally reserved for the executive branch. A crucial bulwark in preserving this separation of powers is the Appointments Clause of Article II. That provision requires \"Officers of the United States\" to be appointed by the President \"with the Advice and Consent of the Senate,\" although Congress may vest the appointment of \"inferior\" officers \"in the President alone, in the Courts of Law, or in the Heads of Departments.\" Crucially, Article II also empowers the President to hold executive branch officers accountable, through removal if necessary, which the Supreme Court in Myers v. United States explained was essential in order to \"maintain administrative control of those executing the laws.\" The Court has, however, recognized that Congress may in certain situations restrict the President's power of removal over certain discrete offices. The powers of appointment and removal are key to understanding Congress's authority to create independent investigative offices and define their contours."], "subsections": [{"section_title": "Appointment of a Special Counsel", "paragraphs": ["While introduced legislation aimed to insulate a special counsel from executive control raises questions (addressed below) about the President's ability to oversee the executive branch, some have questioned whether the appointment of a special counsel under the current regulations violates the Constitution. Such challenges have been unsuccessful, however, as exemplified by the D.C. Circuit's recent ruling in In re: Grand Jury Investigation . In that case, the recipient of multiple grand jury subpoenas issued by Special Counsel Robert Mueller moved to quash those subpoenas on the grounds that the appointment of the special counsel was unlawful under the Appointments Clause.", "The D.C. Circuit's panel decision held that the Appointments Clause did not require Special Counsel to be nominated by the President and confirmed by the Senate because the special counsel is not a principal officer. Applying the Supreme Court's test in Edmond v. United States , the D.C. Circuit ruled that, because he is subject to the control of a superior who was nominated by the President and confirmed by the Senate (i.e., a principal officer), the special counsel is an inferior officer who may be appointed by a department head. While acknowledging that the special counsel regulations bestowed a measure of independence on the special counsel, the court reasoned that because the Attorney General could rescind these regulations at any time, the special counsel is an inferior officer who \"effectively serves at the pleasure\" of a principal officer.", "Additionally, the court rejected the argument that Congress had not \"by law\" granted the Attorney General the authority to appoint a special counsel as required by the Appointments Clause. In so doing, the panel relied on the Supreme Court's opinion in United States v. Nixon , in which the Court concluded that, because Congress had by statute vested general authority in the Attorney General to appoint subordinate officers, the Attorney General's delegation of power to a special prosecutor was valid.", "Finally, the D.C. Circuit panel concluded that a department head properly appointed Special Counsel Mueller in accordance with the Appointments Clause, notwithstanding his appointment by Rod Rosenstein, the Deputy and Acting Attorney General. The panel observed that the relevant statutory scheme provided that, in the case of a \"disability\" of the Attorney General, the Deputy Attorney General \"may exercise all the duties of that office.\" The D.C. Circuit reasoned that when Attorney General Sessions recused himself from matters concerning presidential campaigns, he had a \"disability\" under the statute on that issue. Accordingly, Deputy Attorney General Rosenstein became the acting Attorney General\u2014and was therefore the head of the Department of Justice\u2014on such matters. Acting Attorney General Rosenstein's appointment of Special Counsel Mueller, therefore, was an appointment by the head of a department."], "subsections": []}, {"section_title": "Removing a Special Counsel", "paragraphs": ["While the legal questions surrounding the appointment of a special counsel under the regulations have largely been resolved, the circumstances in which a special counsel may be removed by a superior have not been settled by the courts. Consideration of the authority to remove a special counsel under current regulations poses several legal questions. As discussed above, Department of Justice regulations provide that a special counsel may be removed only (1) by the Attorney General; (2) \"for misconduct, dereliction of duty, incapacity, conflict of interest, or for other good cause, including violation of Departmental policies\"; and (3) in writing provided to the special counsel specifying the reason(s) for removal. As a preliminary matter, the specific type of behavior that would constitute grounds for removal under the regulations is largely undetermined. For instance, terms such as \"misconduct\" and \"good cause\" are not defined in the regulations or by reference to an accompanying statute, and case law addressing the definition of similar statutory removal restrictions is sparse. More broadly, the manner in which a special counsel might be removed without new legislation itself poses difficult legal issues, including the ultimate efficacy of the regulations in constraining the discretion of the executive branch."], "subsections": [{"section_title": "Removing a Special Counsel Pursuant to the Regulations", "paragraphs": ["The Attorney General (or his surrogate if recused) may, consistent with the governing regulations, remove a special counsel \"for misconduct, dereliction of duty, incapacity, conflict of interest, or for other good cause, including violation of Departmental policies.\" Conceivably, the Attorney General's decision could be the result of an order from the President, as the Attorney General serves at the pleasure of the President and, as the Court has recognized, the President's power to appoint executive branch officials is tied to the power of removal. A decision to remove a special counsel under current regulations could be difficult to challenge in court. Importantly, the current regulations explicitly disclaim the creation of any legal rights. Even without that disclaimer, internal agency rules and guidelines, including those of the Justice Department, have generally not been recognized as creating judicially enforceable rights. Instead, an individual seeking judicial relief against the United States in federal court must usually rely on a cause of action that asserts violation of a recognized legal right or requirement. Consequently, at least under current DOJ regulations, obtaining judicial review of a special counsel's removal by a federal court may be difficult."], "subsections": []}, {"section_title": "Legal Effect of the Regulations", "paragraphs": ["More broadly, it is uncertain to what extent the regulations ultimately constrain the executive branch. Because no statute appears to require the Department to promulgate regulations concerning a special counsel, the Department likely enjoys discretion to rescind them. The special counsel regulations also were not promulgated according to the notice and comment procedures that are typically required by the Administrative Procedure Act (APA) when agencies issue legislative rules. Instead, the Department considered the regulations to be exempt from these requirements, as they concerned agency management or personnel. The Department could thus likely rescind the special counsel regulations without going through notice and comment procedures, meaning that the regulations could likely be repealed immediately. Once repealed, a special counsel would no longer be protected by a for-cause removal provision.", "While DOJ has noted its adherence to the current special counsel regulations, assuming for the sake of argument a situation where the regulations were left in place, a decision by the Attorney General or President to simply ignore the regulations raises unresolved legal questions. Generally, regulations in force typically bind the executive branch with the force of law. In fact, in Nixon v. United States , which concerned a claim of executive privilege by President Nixon against a subpoena issued by a special prosecutor, the Court opined on the regulation in force that insulated the special prosecutor from removal. The Court remarked in dicta that", "So long as this\u00a0regulation\u00a0is extant it has the force of law. . . . [I]t is theoretically possible for the Attorney General to amend or revoke the regulation defining the Special Prosecutor's authority. But he has not done so.\u00a0So long as this\u00a0regulation remains in force the Executive Branch is bound by it, and indeed the United States as the sovereign composed of the three branches is bound to respect and to enforce it.", "In other words, insofar as this reading continues to characterize the Court's approach to the matter, both the President and Attorney General must comply with the special counsel regulations until they are repealed. However, the concrete result of an order removing a special counsel in violation of applicable regulations is difficult to predict. For instance, there might not be a private right of action authorizing judicial review in this situation, leaving the legal remedy available for violation of the regulations in question.", "On the other hand, the matter raises open legal issues regarding the scope of the President's authority to supervise the executive branch. It is unclear to what extent agency regulations restricting the grounds for removal of a constitutional officer engaged in core executive functions can bind the President. One might argue that the special counsel regulations, while binding on the Department of Justice, do not ultimately restrict the President's powers. Article II vests the executive power of the United States in the President; and criminal investigations and prosecutions lie at the very core of this constitutional authority. An argument in favor of a more robust view of the President's authority might be that regulations issued by an executive branch agency nearly 20 years ago that restrict the President's power to remove a high-level officer of the United States who is charged with enforcing the law intrude on the President's authority under Article II. DOJ has in the past asserted authority to decline to follow statutes it deems unconstitutional intrusions on the executive branch's power, and this argument might be extended to the context of similarly viewed regulations, particularly those issued by a prior Administration."], "subsections": []}]}, {"section_title": "Proposed Legislation to Restrict the Ability to Remove a Special Counsel", "paragraphs": ["Given the questions regarding the scope and effect of the current DOJ special counsel regulations, a number of legislative proposals aim to impose statutory restrictions on the executive branch's ability to remove a special counsel. Consideration of these proposals requires examination of the Supreme Court's decisions regarding statutory restriction on the removal of certain officers. However, because Congress has not enacted any such bill, analysis of these efforts is necessarily preliminary. As discussed above, current Department of Justice regulations authorize the Attorney General to appoint a special counsel and determine the ultimate scope of his jurisdiction, but limit the Attorney General's discretion to remove a special counsel to certain specified reasons. A number of bills proposed during the 116 th and 115 th Congresses aim to codify aspects of these regulations. Notably, some would statutorily insulate a special counsel from removal and authorize a federal court to review the removal of a special counsel.", "For instance, S. 1735 , introduced in the 115 th Congress, would have provided that in order to remove a special counsel, the Attorney General must first file an action with a three-judge court; if that panel issues a finding of \"misconduct, dereliction of duty, incapacity, conflict of interest, or other good cause, including violation of policies of the Department of Justice,\" then a special counsel may be removed. Similarly, S. 1741 , the Special Counsel Integrity Act, would have provided that any special counsel appointed on or after May 17, 2017, may only be removed by the Attorney General, or the highest ranking Justice Department official if the Attorney General is recused, for good cause. S. 1741 further provided that a special counsel who has been removed may challenge this action before a three-judge panel, which is authorized to immediately reinstate the individual if the court finds that the removal violated the legislation's terms. Both bills were introduced in the 115 th Congress.", "Finally, S. 71 and H.R. 197 , introduced in the 116 th Congress, merge aspects of both of these proposals. They would similarly require good cause in order for the Attorney General to remove a special counsel, but provide a 10-day window in which the special counsel can challenge a removal decision in federal court. If the court determines that the removal violates that good cause standard, then the removal shall not take effect. Understanding these proposals requires an examination of the significant\u2014and oft-debated\u2014constitutional questions concerning Congress's power to establish executive functions outside the direct control of the President."], "subsections": [{"section_title": "Presidential Authority to Oversee Executive Branch Officers", "paragraphs": ["Article II of the Constitution vests the executive power of the United States in the President. As mentioned above, the Supreme Court has made clear that this power includes authority to hold executive branch officers accountable, through removal if necessary. However, the Court has upheld statutory restrictions on the President's removal power for certain offices. In one such case, Morrison v. Olson , the Court upheld restrictions on the removal of an independent counsel, although, as discussed below, the Court has not always followed aspects of that decision in subsequent years. The constitutionality of legislative efforts to statutorily insulate a special counsel from removal will thus likely turn on the continuing vitality of the Court's opinion in Morrison and, more generally, whether a court would apply a more formalist or functionalist methodology in considering such legislation. Definitive conclusions about such efforts are thus difficult absent further guidance from the Court."], "subsections": [{"section_title": "Morrison v. Olson", "paragraphs": ["In the 1988 case of Morrison v. Olson , the Supreme Court addressed the issue of whether a federal prosecutor can be insulated from executive control in the context of the now-expired Independent Counsel Act. Morrison upheld the independent counsel statute, which, as discussed above, vested the appointment of an independent counsel outside of the executive branch and limited the removal authority of the President. Writing for the Court, Chief Justice Rehnquist concluded that the independent counsel was an inferior, rather than a principal, officer, whose appointment was not required to be made by the President subject to Senate confirmation. The appointment of such officers was permissible because they (1) were removable by the Attorney General for cause; (2) had a limited scope of duties; and (3) possessed limited jurisdiction. ", "The Court also held that the Independent Counsel Act's provision limiting the authority of the Attorney General to remove the independent counsel for good cause did not impermissibly intrude on the President's power under Article II. The Court rejected a formalistic rule that would bar statutory for-cause removal protections for an individual tasked with \"purely executive\" functions; instead, it applied a functional test and asked whether Congress has \"interfere[d] with the President's\" executive power and his \"duty to 'take care that the laws be faithfully executed.'\" The Court recognized that the independent counsel operated with a measure of independence from the President, but concluded that the statute gave \"the Executive Branch sufficient control over the independent counsel to ensure that the President is able to perform his constitutionally assigned duties.\"", "Morrison was decided 7-1, with Justice Scalia dissenting from the Court's opinion and Justice Kennedy not participating in the case. In dissent, Justice Scalia argued that the independent counsel statute violated the separation of powers because the Constitution vested authority for criminal investigations and prosecutions exclusively in the executive branch and the statute deprived the President of exclusive control of that power. Under this rationale, he warned that the Court must be very careful to guard against the \"'gradual concentration of the several powers in the same department'\" that can be likely to occur as one branch seeks to infringe upon another's distinct constitutional authorities. Justice Scalia emphasized the power and discretion typically vested in prosecutors and noted that the key check on prosecutorial abuse is political\u2014prosecutors are accountable to, and can be removed by, the President, who is likewise accountable to the people. But operation of the independent counsel statute, for Justice Scalia, eliminated that constitutional feature by creating an unaccountable prosecutor outside of presidential control.", "In the years since Morrison , especially in the wake of the Whitewater investigation into President Clinton by an independent counsel that culminated in the President's impeachment on grounds that were tangential to the impetus for the investigation, a number of legal scholars criticized the independent counsel statute on both policy and constitutional grounds. Additionally, members of both political parties have since noted opposition to the law, resulting in relatively widespread agreement to let the Independent Counsel Act expire in 1999. "], "subsections": []}, {"section_title": "Post-Morrison Case Law on Appointments and Removal", "paragraphs": ["The Supreme Court in the 1997 case of Edmond v. United States applied a different standard than that enunciated in Morrison in the context of a challenge to the appointment of certain \"inferior\" officers. The opinion, authored by Justice Scalia, adopted the reasoning he applied in dissent in Morrison for determining whether an individual is an inferior officer. In that case, the Court did not apply the functional test used in Morrison for determining whether an individual was an inferior officer. Instead, it adopted a formal rule\u2014an inferior officer is one who is \"directed and supervised\" by a principal officer (officers appointed by the President and confirmed by the Senate). Applying this rule, the Court concluded that the appointment of members of the Coast Guard Court of Criminal Appeals by the Secretary of Transportation was consistent with Article II. Specifically, the Court reasoned that because Members of the Coast Guard Court of Criminal Appeals are removable at will and lack power to render a final decision of the United States unless permitted to do so by a superior in the executive branch they are directed and supervised by principal officers. The appointment of the members of the Coast Guard Court of Criminal Appeals by the Secretary of Transportation was thus constitutional because the members constituted inferior officers and the Secretary was a principal officer.", "More recently, in the 2010 case of Free Enterprise Fund v. P ublic Company Accounting Oversight Board , the Court invalidated statutory structural provisions providing that members of the Public Company Accounting Oversight Board could be removed only \"for cause\" by the Securities and Exchange Commission, whose members, in turn, appeared to also be protected from removal by for-cause removal protections. The Court again applied a rather formalist rule in analyzing Congress's attempt to shield executive branch officers from removal, rather than the functional approach followed in Morrison . The Court concluded that, while the early 20 th century case of Humphrey ' s Executor v. United States had approved such protections for the heads of independent agencies and Morrison did the same for certain inferior officers, the combination of dual \"for cause\" removal protections flatly contradicted the vestment of executive power in the President under Article II. Further, the Court then applied the test it used in Edmund , rather than the functional analysis of Morrison , in concluding that members of the regulatory board were now\u2014after invalidation of statutory removal protections by the Court\u2014inferior officers because the Securities and Exchange Commission, composed of principal officers, possessed oversight authority over the board and the power to remove its members at will. ", "However, the Court has not gone so far as to overrule or even explicitly question Morrison . As a result, that opinion's holding regarding the constitutionality of for-cause restrictions for an independent counsel binds the lower courts. Moreover, while the Court's decisions in Edmund and Free Enterprise Fund have not applied the reasoning in Morrison concerning the test for who qualifies as an inferior officer, it is not necessarily clear what removal restrictions are appropriate for principal officers or how the determinations about the appointment power concern determinations about the scope of the removal power. Nonetheless, it appears that the Edmond test, rather than the Morrison analysis, for determining whether an individual is an inferior officer is what will guide the Court going forward. Furthermore, Free Enterprise Fund represents a movement toward a more formalist, and possibly more expansive, view of the Presidential power of removal than was expressed in Morrison . More fundamentally, no member of the Morrison Court sits on the Supreme Court today. Because of this apparent shift in the Court's general approach to separation-of-powers matters related to appointment and removal, and the current Court's relative silence on Morrison's import, whether today's Court would necessarily view a reauthorization of the independent counsel statute or a similar statute in the same manner as it did in Morrison is subject to debate ."], "subsections": []}]}, {"section_title": "Legislation to Establish For-Cause Removal Protection for a Special Counsel", "paragraphs": ["Assuming that the Supreme Court were to follow the functional approach reflected in its Morrison decision, efforts to statutorily require good cause to remove a special counsel would likely pass constitutional muster. As noted above, in Morrison , the Court examined whether Congress had impermissibly interfered with the President's constitutional duties; it approved of the independent counsel statute's provisions that, among other things, (1) required good cause to remove the independent counsel; (2) largely restricted the Attorney General's discretion in deciding to request the appointment of an independent counsel; and (3) placed the actual power of appointment with a panel of Article III judges. Legislation that would statutorily insulate a future special counsel from removal except for good cause appears roughly analogous to the for-cause removal provisions upheld in Morrison . In fact, some proposals appear to be less restrictive of the President's power relative to the independent counsel statute. For instance, S. 1741 (115 th Congress) and S. 71 (116 th Congress) appear to contemplate the appointment of a special counsel at the discretion of the AG, and they provide that only the Attorney General\u2014or the most senior Justice official who has been confirmed by the Senate if the Attorney General is recused\u2014may remove a special counsel. Under both bills, an executive branch official would retain discretion to appoint and remove a special counsel for cause. Under Morrison ' s functional balancing approach, which examines whether Congress has unduly interfered with the President's executive power and duty to take care that the law is executed faithfully, this framework is less intrusive of executive branch power than was the independent counsel statute because the executive branch would retain control over a special counsel's appointment.", "Likewise, insulating a special counsel from removal by the Attorney General except for those reasons outlined in current Justice regulations\u2014\"for misconduct, dereliction of duty, incapacity, conflict of interest, or for other good cause, including violation of Departmental policies\" \u2014would likely permit removal of a special counsel for a broader range of reasons than did the now-expired independent counsel statute, which limited the basis for removal to \"good cause, physical disability, mental incapacity, or any other condition that substantially impairs the performance of such independent counsel's duties.\" Specifically, several bills would add misconduct, dereliction of duty, and conflict of interest as grounds for removal, and specifically define good cause to include violation of departmental policies. At least considered in isolation, such a provision would be less intrusive into the executive branch's authority under Article II than the statute at issue in Morrison , as the proposal would grant the Attorney General\u2014a principal officer directly accountable to the President\u2014greater control of the special counsel than he had under the independent counsel statute. Accordingly, if the Court were to embrace a functionalist balancing approach in a challenge to such a provision, it would likely affirm its constitutionality as the executive branch could remove a special counsel for a broader range of reasons than was permitted in the independent counsel statute.", "Nevertheless, bills that aim to insulate a special counsel from removal might be constitutionally suspect if the Court chose to overrule Morrison or limit the reach of that case to its facts. In particular, were the Court to face a challenge to a special counsel entrusted with wide-ranging investigative authority who statutorily could not be removed except for cause, application of the approach in Edm o nd , rather than Morrison , might result in the Court concluding that a special counsel is a principal officer. As noted above, Edmond 's test for inferior officer status is that the individual be directed and supervised by a principal officer. And that test was satisfied because Coast Guard Court of Appeals judges were removable at will and lacked power to render final decisions of the executive branch. A special counsel with statutory removal protection would obviously not be removable at will. As to whether a special counsel renders final decisions, any analysis would likely depend on the scope of authority granted to a special counsel. Were the Court to conclude that a special counsel does constitute a principal officer, his or her appointment must be made by the President with Senate confirmation, rather than by the Attorney General. Further, any removal restrictions might be questioned as well, as the Court has never approved such restrictions for a principal officer charged with core executive functions. Nonetheless, the Court has not reconciled its holding on the appointments question in Morrison with its holding in Edmond, meaning that the limits on Congress's power to insulate executive branch officials from removal are subject to debate. ", "More broadly, a departure from Morrison and an application of the Court's more recent formalist approach to separation of powers disputes, as evidenced in Free Enterprise Fund , might cast for-cause removal protections for a special counsel in an unfavorable light. The Court's emphasis in that case on the importance of presidential control over executive branch officers and the ability to hold them accountable in order to preserve the constitutional structure envisioned by the Framers could be read to conflict with statutory removal restrictions for government officers carrying out core executive functions. ", "That said, a middle road is possible. Were Congress to pass legislation insulating a special counsel from removal except for cause, one option might be for the Court to narrowly construe the scope of for-cause removal protections, interpreting them to permit removal for a broad range of reasons. This would avoid overruling Morrison , but arguably preserve substantial executive branch authority over the special counsel. Nonetheless, such a reading might authorize more significant control of a special counsel's decisions, ultimately restricting the independence of the office, at least compared to that envisioned by the independent counsel statute."], "subsections": []}, {"section_title": "Legislation to Establish Judicial Review of a Removal Decision", "paragraphs": ["Certain bills authorizing a judicial role in the removal of a special counsel may raise distinct constitutional questions. As an initial matter, proposals to authorize judicial review of a decision by the Attorney General to remove a special counsel, such as S. 1741 (115 th Congress), as well as S. 71 and H.R. 197 (116 th Congress), appear somewhat similar to provisions considered by the Court in Morrison . And the Supreme Court has otherwise adjudicated suits from government officers who have been removed from their position. It bears mention, however, that the traditional remedy in such situations has been for back pay, rather than reinstatement. Bills that limit available remedies to reinstatement, or require this result, depart from the independent counsel statute's provisions, which provided a reviewing court with the option to order reinstatement or issue \"other appropriate relief.\" One might distinguish between, on the one hand, a court's undisputed power to determine compliance with the law and award damages for violations, and, on the other, a potential judicial order directing an executive branch official to reappoint an individual to an office. In this vein, injunctive relief of this type could be viewed as inserting the judiciary into a role assigned by Article II to the executive branch.", "In addition, at least one proposal, S. 1735 , might authorize the judiciary to play a more substantial role in the removal of a special counsel. That bill would bar the removal of a special counsel unless the Attorney General first files a petition with a three-judge court, and that court itself finds \"misconduct, dereliction of duty, incapacity, conflict of interest, or other good cause, including violation of policies of the Department of Justice.\" Inserting the judiciary into a removal decision, by requiring a court to determine in the first instance the grounds for the dismissal of an executive branch official before he may be removed, appears to go beyond the restrictions on the President's removal power previously approved by the Supreme Court in Humphrey ' s Executor and Morrison . As the Free Enterprise Fund Court explained, even in the prior cases that \"upheld limited restrictions on the President's removal power, it was the President\u2014or a subordinate he could remove at will\u2014who decided whether the officer's conduct merited removal under the good-cause standard.\" The body charged with determining whether good cause exists to remove a special counsel would not be one that is subordinate to or accountable to the President; indeed, that body is not located in the executive branch at all. Moreover, Free Enterprise Fund invalidated two layers of removal protection for executive branch officers as violating Article II. Here, a special counsel could not be removed unless permitted by Article III judges\u2014judicial officers who may not be removed except through the impeachment process. As such, with regards to this proposal, not only would two layers of removal protection shield a special counsel from dismissal, but one layer would be significantly more stringent than the for-cause protection in Free Enterprise Fund .", "Further, while the Court in Morrison saw no issue with the independent counsel statute's provision authorizing ex post judicial review (i.e., after the fact) of a removal decision, that conclusion rested on the understanding that the executive branch retained discretion over the decision to remove an independent counsel. Judicial review in that situation was limited to ensuring compliance with the law. Indeed, the Morrison Court narrowly construed that statute to preclude any role for the judicial panel that was entrusted with appointing an independent counsel in removing him during an investigation or judicial proceeding. The Court explained that this move avoided an unconstitutional \"intrusion into matters that are more properly within the Executive's authority.\" Proposals that require an initial judicial finding of good cause in order to authorize removal arguably insert the judiciary into an executive branch function in a manner the Morrison Court appeared to consider questionable.", "On the other hand, application of a functional approach akin to Morrison , which examined a variety of factors in adjudicating the separation of powers dispute, might nevertheless conclude that a requirement of an initial judicial finding of good cause in order to remove a special counsel does not impair the President's core Article II responsibilities. First, under S. 1735 , the Attorney General retains discretion to initiate a removal in the first place by petitioning the three-judge panel; that body would lack authority to remove a special counsel independently. Second, the previously upheld independent counsel statute authorized judicial review of a removal of the independent counsel and authorized reinstatement as a remedy. The bill's provision would shift the sequence of the judicial role from an ex post review to an ex ante (i.e., beforehand) authorization. Viewed in this light, it is unclear why that shift would necessarily make a substantive difference, because even if the executive branch ignored the provision allowing for ex ante review and removed a special counsel unilaterally, the special counsel could sue for reinstatement, which would leave the court in largely the same position. Finally, while requiring judicial authorization to remove a special counsel might intrude somewhat on the executive branch's Article II authority other aspects of the bill are less intrusive. For instance, the bill leaves discretion to appoint the special counsel with the Attorney General, and appears to permit removal for a wider range of conduct than did the independent counsel statute. Because the Morrison Court balanced a variety of factors and concluded that the independent counsel statute did not impermissibly interfere with the President's duty to execute the law, an application of Morrison might mean that these features ameliorate concerns about a judicial body first approving of a removal.", "Leaving aside issues arising under Article II of the Constitution, legislation requiring the Attorney General to first petition a federal court for a good cause finding before removing a special counsel might raise questions under Article III. The Constitution defines the proper scope of the federal courts' jurisdiction as limited to adjudicating \"cases\" and \"controversies.\" The Supreme Court has articulated several legal doctrines emanating from Article III that limit the circumstances under which the federal courts will adjudicate disputes. The Court has interpreted Article III to require adversity between the parties, or a live dispute that is \"definite and concrete, touching the legal relations of parties having adverse legal interests.\" Further, the Court has made clear that duties of an administrative or executive nature generally may not be vested in Article III judges. Article III courts are permitted to exercise certain non-adjudicatory functions, but these exceptions are generally limited to duties incident to the judicial function, such as supervising grand juries and participating in the issuance of search warrants. With respect to a suit by the Attorney General seeking ex ante judicial authorization to remove a special counsel, these requirements might not necessarily be met. For instance, given this procedural posture, it is not obvious who the adverse party would be as the legislation does not explicitly authorize the special counsel to participate in the proceedings. Likewise, the supervision of executive branch officers, including discretion to remove them, is traditionally an executive or administrative function, rather than a judicial one."], "subsections": []}, {"section_title": "Retroactive Application of Legislation to Insulate a Special Counsel", "paragraphs": ["Finally, certain bills that aim to insulate a special counsel from removal might raise unresolved questions concerning their retroactivity. For instance, S. 1741 (115 th Congress) would have provided that a special counsel may not be removed except for cause and that this provision retroactively applies to any special counsel appointed on or after May 17, 2017. Likewise, S. 71 and H.R. 197 (116 th Congress) contain a similar provision, although it applies to any special counsel appointed on or after January 1, 2017. One might argue that statutorily insulating a currently serving special counsel from removal improperly inserts Congress into the appointments process. The Supreme Court has invalidated legislation that explicitly authorized Members of Congress to appoint executive branch officers and has done the same to legislation authorizing Congress to remove an executive branch officer through a joint resolution. Insulating a currently serving executive branch officer from removal via statute might be seen as an attempt by Congress to subvert the purposes of the Appointments Clause, effectively transforming a particular prosecutor's office from one that is subject to executive branch control into one that is statutorily independent without allowing for a new appointment consistent with the Constitution. In particular, if such a bill were passed immediately, it might be seen to apply exclusively to a single individual in the executive branch, effectively appointing a particular executive branch officer for an indefinite time period. To the extent that this provision is viewed as a legislative aggrandizement of the executive's appointment power, it might raise separation-of-powers concerns.", "That said, it does not appear that a Supreme Court case has directly addressed such a statutory provision. In Myers v. United States , the Court invalidated a statutory restriction on the removal of an executive branch officer. The pertinent statute in that case bestowed removal protection retroactively on executive branch officers, but the Court's opinion did not hinge on this feature of the statute. Further, such a provision would only codify requirements that already exist in regulations, which might be seen as a relatively minor adjustment to a special counsel's office that does not require a new appointment. Given the lack of preexisting case law relevant to such a provision, firm conclusions about its merit are likely premature."], "subsections": []}]}]}, {"section_title": "Conclusion", "paragraphs": ["Both Congress and the executive branch have employed a variety of means to establish independence for certain criminal investigations and prosecutions. The use of special prosecutors, independent counsels, and special counsels all have allowed for the investigation of executive branch misconduct. Nonetheless, efforts to provide independence for prosecutors from executive branch control often raise constitutional questions. In turn, proposals to statutorily protect a special counsel from removal thus raise important, but unresolved, constitutional questions about the separation of powers. As a general matter, simply insulating a future special counsel from removal except for specified reasons appears consistent with the Court's opinion in Morrison . To the extent the current Court might depart from the functional reasoning of that case and apply a more formal approach to the question, however, such proposals might raise constitutional objections. Likewise, constitutional objections might arise against proposals aimed to insulate a special counsel in a manner beyond the framework approved in Morrison ."], "subsections": []}]}}
{"id": "R45657", "title": "Cuba: U.S. Policy in the 116th Congress", "released_date": "2019-03-29T00:00:00", "summary": ["Political and economic developments in Cuba, a one-party authoritarian state with a poor human rights record, frequently have been the subject of intense congressional concern since the Cuban revolution in 1959. Current Cuban President Miguel D\u00edaz-Canel succeeded Ra\u00fal Castro in April 2018, but Castro continues to head Cuba's Communist Party. Over the past decade, Cuba has implemented gradual market-oriented economic policy changes, although it has not taken enough action to foster sustainable economic growth. Most observers do not anticipate major policy changes under D\u00edaz-Canel, at least in the short term; the president faces the enormous challenges of reforming the economy and responding to citizens' desires for greater freedom.", "U.S. Policy", "Since the early 1960s, the centerpiece of U.S. policy toward Cuba has consisted of economic sanctions aimed at isolating the Cuban government. Congress has played an active role in shaping policy toward Cuba, including the enactment of legislation strengthening, and at times easing, U.S. economic sanctions. In 2014, however, the Obama Administration initiated a policy shift moving away from sanctions toward a policy of engagement. This included the restoration of diplomatic relations (July 2015), the rescission of Cuba's designation as a state sponsor of international terrorism (May 2015), and an increase in travel, commerce, and the flow of information to Cuba implemented through regulatory changes.", "President Trump unveiled a new policy toward Cuba in 2017 that increased sanctions and partially rolled back some of the Obama Administration's efforts to normalize relations. In 2017, the State Department reduced the staff of the U.S. Embassy by about two-thirds in response to unexplained injuries of members of the U.S. diplomatic community in Havana; 26 individuals have been affected. The reduction has affected embassy operations, especially visa processing, and has made bilateral engagement more difficult. The most significant Trump Administration policy changes include restrictions on transactions with over 200 entities controlled by the Cuban military, intelligence, and security services (on a \"restricted list\" maintained by the State Department) and the elimination of people-to-people educational travel for individuals (such travel with a group specializing in educational tours is still permitted). In March 2019, the Administration ratcheted up economic pressure on Cuba by allowing certain lawsuits to go forward against those entities on the \"restricted list\" for trafficking in confiscated property in Cuba. In light of increased U.S. sanctions against the regime of Nicol\u00e1s Maduro in Venezuela, the Administration has increased its criticism of Cuba's military and intelligence support for the regime in Caracas.", "Legislative Activity in the 116th Congress", "In the Consolidated Appropriations Act, 2019 (P.L. 116-6, H.J.Res. 31) enacted in February 2019, Congress provided $20 million in Cuba democracy assistance ($10 million more than requested) and $29.1 million for Cuba broadcasting ($15.4 million more than requested).", "Several legislative initiatives on Cuba have been introduced in the 116th Congress: H.R. 213 would waive certain prohibitions to allows nationals of Cuba to come to the United States to play organized professional baseball; S. 428 would repeal or amend many provisions of law restricting trade and other relations with Cuba; and H.R. 1898 would authorize private financing for U.S. agricultural sales to Cuba. S.Res. 14 and H.Res. 136 would express the sense of the Senate and House, respectively, that Cuba's foreign medical missions constitute human trafficking; and H.Res. 92 would call for the extradition or rendering to the United States all fugitives from U.S. justice receiving safe harbor in Cuba. For more on legislative initiatives in the 116th Congress, see Appendix A."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Political and economic developments in Cuba and U.S. policy toward the island nation, located 90 miles from the United States, have been significant congressional concerns for many years. Especially since the end of the Cold War, Congress has played an active role in shaping U.S. policy toward Cuba, first with the enactment of the Cuban Democracy Act of 1992 (CDA; P.L. 102-484 , Title XVII) and then with the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 ( P.L. 104-114 ). Both measures tightened U.S. economic sanctions on Cuba that had first been imposed in the early 1960s; however, both measures also provided road maps for normalization of relations, dependent on significant political and economic changes in Cuba. Congress partially modified its sanctions-based policy toward Cuba when it enacted the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA; P.L. 106-387 , Title IX) allowing for U.S. agricultural exports to Cuba.", "Over the past decade, much of the debate in Congress over U.S. policy has focused on U.S. sanctions. In 2009, Congress took legislative action in an appropriations measure ( P.L. 111-8 ) to ease restrictions on family travel and travel for the marketing of agricultural exports, marking the first congressional action easing Cuba sanctions in almost a decade. The Obama Administration took further action in 2009 by lifting restrictions on family travel and family remittances and in 2011 by further easing restrictions on educational and religious travel and remittances to other than family members. ", "President Obama announced a major shift in U.S. policy toward Cuba in December 2014 that moved away from a sanctions-based policy aimed at isolating Cuba toward a policy of engagement and a normalization of relations. The policy shift led to the restoration of diplomatic relations, the rescission of Cuba's designation as a state sponsor of international terrorism, and the easing of some restrictions on travel and commerce with Cuba. There was mixed reaction in Congress, with some Members of Congress supporting the change and others opposing it. Legislative initiatives in the 114 th Congress in 2015-2016 reflected this policy divide, with some bills introduced that would have further eased U.S. economic sanctions and others that would have blocked the policy shift and introduced new sanctions; ultimately no action was taken on either policy approach.", "President Trump announced a new policy approach toward Cuba in June 2017 that partially rolled back efforts to normalize relations and imposed new sanctions on Cuba, including restrictions on the permissible category of people-to-people educational travel to Cuba and on transactions with companies controlled by the Cuban military. Again, reaction in the 115 th Congress in 2017-2018 was mixed, with legislative initiatives reflecting the policy divide between those wanting to tighten sanctions and those wanting to ease them. Ultimately the only legislative action taken with regard to sanctions was a provision in the 2018 farm bill ( P.L. 115-334 ) that permits funding for two U.S. agricultural exports promotion programs in Cuba. This marked the first time Congress had eased Cuba sanctions, albeit slightly, in almost a decade.", "This report examines U.S. policy toward Cuba in the 116 th Congress. It is divided into three major sections analyzing: (1) Cuba's political and economic environment; (2) U.S. policy toward Cuba; and (3) selected issues in U.S.-Cuban relations, including restrictions on travel and trade, democracy and human rights funding for Cuba, U.S. government-sponsored radio and television broadcasting to Cuba (Radio and T Mart\u00ed), migration issues, antidrug cooperation, property claims, and U.S. fugitives from justice in Cuba. Relevant legislative initiatives in the 116 th Congress are noted throughout the report, and Appendix A lists enacted measures and other bills and resolutions. Appendix B provides links to U.S. government information and reports on Cuba. For more on Cuba from CRS, see the following:", "CRS In Focus IF10045, Cuba: U.S. Policy Overview , by Mark P. Sullivan; CRS Report R43888, Cuba Sanctions: Legislative Restrictions Limiting the Normalization of Relations , by Dianne E. Rennack and Mark P. Sullivan; CRS Report RL31139, Cuba: U.S. Restrictions on Travel and Remittances , by Mark P. Sullivan; and CRS Report R44137, Naval Station Guantanamo Bay: History and Legal Issues Regarding Its Lease Agreements , by Jennifer K. Elsea and Daniel H. Else."], "subsections": []}, {"section_title": "Cuba's Political and Economic Environment", "paragraphs": [], "subsections": [{"section_title": "Brief Historical Background1", "paragraphs": ["Cuba became an independent nation in 1902. From its discovery by Columbus in 1492 until the Spanish-American War in 1898, Cuba was a Spanish colony. In the 19 th century, the country became a major sugar producer, with slaves from Africa brought in increasing numbers to work the sugar plantations. The drive for independence from Spain grew stronger in the second half of the 19 th century, but independence came about only after the United States entered the conflict, when the USS Maine sank in Havana Harbor after an explosion of undetermined origin. In the aftermath of the Spanish-American War, the United States ruled Cuba for four years until Cuba was granted its independence in 1902. Nevertheless, the United States retained the right to intervene in Cuba to preserve Cuban independence and maintain stability in accordance with the Platt Amendment, which became part of the Cuban Constitution of 1901; the United States established a naval station at Guantanamo Bay, Cuba, in 1903, which continues in operation today. The United States subsequently intervened militarily three times between 1906 and 1921 to restore order, but in 1934, the Platt Amendment was repealed.", "Cuba's political system as an independent nation often was dominated by authoritarian figures. Gerardo Machado (1925-1933), who served two terms as president, became increasingly dictatorial until he was ousted by the military. A short-lived reformist government gave way to a series of governments that were dominated behind the scenes by military leader Fulgencio Batista until he was elected president in 1940. Batista was voted out of office in 1944 and was followed by two successive presidents in a democratic era that ultimately became characterized by corruption and increasing political violence. Batista seized power in a bloodless coup in 1952, and his rule progressed into a brutal dictatorship that fueled popular unrest and set the stage for Fidel Castro's rise to power. ", "Castro led an unsuccessful attack on military barracks in Santiago, Cuba, on July 26, 1953. After a brief jail term, he went into exile in Mexico, where he formed the 26 th of July Movement. Castro returned to Cuba in 1956 with the goal of overthrowing the Batista dictatorship. His revolutionary movement was based in the Sierra Maestra Mountains in eastern Cuba, and it joined with other resistance groups seeking Batista's ouster. Batista ultimately fled the country on January 1, 1959, leading to 47 years of rule under Fidel Castro until he stepped down from power provisionally in 2006 because of poor health and ceded power to his brother Ra\u00fal Castro. ", "Although Fidel Castro had promised a return to democratic constitutional rule when he first took power, he instead moved to consolidate his rule, repress dissent, and imprison or execute thousands of opponents. Under the new revolutionary government, Castro's supporters gradually displaced members of less radical groups. Castro moved toward close relations with the Soviet Union, and relations with the United States deteriorated rapidly as the Cuban government expropriated U.S. properties. In April 1961, Castro declared that the Cuban revolution was socialist, and in December 1961, he proclaimed himself to be a Marxist-Leninist. Over the next 30 years, Cuba was a close ally of the Soviet Union and depended on it for significant assistance until the dissolution of the Soviet Union in 1991.", "Castro ruled by decree until 1976 when he became the country's president (technically, president of the Council of State) under a new constitution that set forth the Cuban Communist Party (PCC), which Castro headed, as the leading force in state and society. When Fidel stepped down in July 2006 because of poor health, his brother Ra\u00fal, Cuba's long-time defense minister and first vice president, became provisional president. In 2008, after Fidel announced that he would not be returning to government, Cuba's National Assembly chose Ra\u00fal as president and he went on to serve two five-year terms until April 2018. More than 10 years after stepping down from power, Fidel Castro died in November 2016 at 90 years of age. While out of power, Fidel continued to author essays published in Cuban media that cast a shadow on Ra\u00fal Castro's rule, and many observers believe that the former leader encouraged so-called hard-liners in the party and government bureaucracy to slow the pace of economic reforms advanced by Ra\u00fal. ", "Ra\u00fal Castro's government (2006-2018) stands out for two significant policy developments. First the government implemented a series of gradual market-oriented economic policy changes including authorization for limited private sector activity, the legalization of property rights, and an opening to further foreign investment. Critics, however, maintain that the government did not go far enough toward enacting deeper reforms needed to stimulate the Cuban economy and foster sustainable economic growth. The second notable policy development was the rapprochement in bilateral relations with the Obama Administration; this rapprochement led to the reestablishment of diplomatic relations and government-to-government engagement and cooperation on a wide range of issues. "], "subsections": []}, {"section_title": "Political Conditions", "paragraphs": ["Current President Miguel D\u00edaz-Canel Berm\u00fadez succeeded Ra\u00fal Castro in April 2018 after Castro completed his second five-year term. Cuba does not have direct elections for president; instead, Cuba's legislature, the National Assembly of People's Power, selected D\u00edaz-Canel as president of the country's 31-member Council of State, which, pursuant to Cuba's constitution (Article 74), makes D\u00edaz-Canel Cuba's head of state and government. Most observers saw D\u00edaz-Canel, who had been serving as first vice president since 2013, as the \"heir apparent,\" although Ra\u00fal is continuing in his position as first secretary of the PCC until 2021. ", "D\u00edaz-Canel, who turned 58 a day after becoming president, is an engineer by training. His appointment as first vice president in 2013 made him the official constitutional successor in case Castro died or could not fulfill his duties. His appointment also represented a move toward bringing about generational change in Cuba's political system; Ra\u00fal Castro was 86 years old when he stepped down as president. D\u00edaz-Canel became a member of the Politburo in 2003 (the PCC's highest decisionmaking body), held top PCC positions in two provinces, and was higher education minister from 2009 until 2012, when he was tapped to become a vice president on the Council of State. ", "Cuba's 2018 political transition is notable because it is the first time since the 1959 Cuban revolution that a Castro is not in charge of the government. A majority of Cubans today have only lived under the rule of the Castros. Ra\u00fal's departure can be viewed as a culmination of the generational leadership change that began several years ago in the government's lower ranks. It is also the first time that Cuba's head of government is not leader of the PCC. Ra\u00fal Castro, however, has indicated that he expects D\u00edaz-Canel to take over as first secretary of the PCC when his term as party leader ends. ", "Another element of the transition is the composition of the 31-member Council of State. The National Assembly selected 72-year-old Salvador Vald\u00e9s Mesa as first vice president, not from the younger generation, but also not from the historical revolutionary period. Vald\u00e9s Mesa, who already had been serving as one of five vice presidents and is on the PCC's Politburo, is the first Afro-Cuban to hold such a high government position. Of the Council of State's members, 45% are new, 48% are women, and 45% are Afro-Cuban or mixed race. Several older revolutionary-era leaders remained on the Council, including Ramiro Vald\u00e9s, 86 years old, who continues as a vice president. Nevertheless, the average age of Council of State members is 54, with 77% born after the 1959 Cuban revolution.", "President D\u00edaz-Canel faces two enormous challenges\u2014reforming the economy and responding to citizens' desires for greater freedom. As noted above, Ra\u00fal Castro had managed the opening of Cuba's economy to the world, with diversified trade relations, increased foreign investment, and a growing private sector, but the slow pace of economic reform stunted economic growth and disheartened Cubans yearning for more economic freedom. The liberalization of some individual freedoms that occurred under Ra\u00fal Castro (such as legalization of cell phones and personal computers, expansion of internet connectivity, and the elimination of an exit permit to travel abroad) has increased Cubans' appetite for access to information and the desire for more social and political expression. Most observers did not anticipate immediate major policy changes under D\u00edaz-Canel, and after the new president marked his first 100 days in office in July 2018, observers maintained that little had changed politically or economically. ", "In December 2018, however, President D\u00edaz-Canel made several decisions that appeared to demonstrate his independence from the previous government and indicate that he was more responsive to public concerns and criticisms. D\u00edaz-Canel eased forthcoming harsh regulations that were about to be implemented on the private sector; many observers believed these regulations would have shrunk the sector (see \" Economic Conditions \" section below). His government also backed away from full implementation of controversial Decree 349 that had been issued in July 2018 to regulate artistic expression. After the unpopular decree triggered a flood of criticism from Cuba's artistic community, the government announced that the measure would be implemented gradually and applied with consensus. It remains to be seen, however, whether the government's action will satisfy those working in Cuba's vibrant arts community. In a third action, the government eliminated a proposed constitutional change that could have paved the way for same-sex marriage after strong public criticisms of the provision (see discussion below on constitutional changes).", "Looking ahead, another important question may be the extent of influence that Castro and other revolutionary figures might have on current government policy. As noted, Ra\u00fal will head the PCC until 2021. The former president also headed a commission drafting proposed changes to Cuba's 1976 constitution (see discussion below). In July 2018, President D\u00edaz-Canel named his Council of Ministers or Cabinet, but a majority of ministers were holdovers from the Castro government, including those occupying key ministries such as defense, interior, and foreign relations; 9 of 26 ministers were new, as well as 2 vice presidents. In January 2019, however, D\u00edaz-Canel replaced the ministers of finance and transportation that had been holdovers from the previous government.", "Constitutional Changes. On February 24, 2019, almost 87% of Cubans approved a new constitution in a national referendum. Originally drafted by a commission headed by Ra\u00fal Castro and approved by the National Assembly in July 2018, the proposed overhaul of the 1976 constitution was subject to public debate in thousands of workplaces and community meetings into November. After considering public suggestions, the National Assembly made additional changes to the draft constitution, and the National Assembly approved a new version in December 2018. One of the more controversial changes made by the commission was the elimination of a provision that would have redefined matrimony as gender neutral compared to the current constitution, which refers to marriage as the union between a man and a woman. Cuba's evangelical churches orchestrated a campaign against the provision, and Cuban Catholic bishops issued a pastoral message against it. The commission chose to eliminate the proposed provision altogether, with the proposed constitution remaining silent on defining matrimony, and maintained that the issue would be addressed in future legislation within two years. ", "Among the provisions of the new constitution are the addition of an appointed prime minster as head of government to oversee government operations\u2014to be proposed by the President and designated by the National Assembly (Articles 140 and 141); an age limit of 60 to become president (Article 127) with a limit of two five-year terms (Article 126); the right to own private property (Article 22); and the acknowledgement of foreign investment as an important element of the country's economic development (Article 28). The new constitution still ensures the state's control over the economy and the role of centralized planning (Article 19), and the Communist Party still would be the only recognized party (Article 5)."], "subsections": []}, {"section_title": "Human Rights", "paragraphs": ["The Cuban government has a poor record on human rights, with the government sharply restricting freedoms of expression, association, assembly, movement, and other basic rights since the early years of the Cuban revolution. The government has continued to harass members of human rights and other dissident organizations. These organizations include the Ladies in White ( Las Damas de Blanco ), currently led by Berta Soler, formed in 2003 by the female relatives of the \"group of 75\" dissidents arrested that year. Another is the Patriotic Union of Cuba (UNPACU), led by Jos\u00e9 Daniel Ferrer, established in 2011 by several dissident groups with the goal of working peacefully for civil liberties and human rights. In August 2018, the Cuban government imprisoned Ferrer arbitrarily for 11 days with no access to his family, according to Amnesty International. In past years, several political prisoners conducted hunger strikes, including two who died, Orlando Zapata Tamayo in 2010 and Wilman Villar Mendoza in 2012. In 2017, Hamel Santiago Maz Hern\u00e1ndez, a member of UNPACU, died in prison; he had been imprisoned in 2016 after being accused of descato (lack of respect for the government). ", "Although the human rights situation in Cuba remains poor, the country has made some advances in recent years. In 2008, Cuba lifted a ban on Cubans staying in hotels that previously had been restricted to foreign tourists in a policy that had been pejoratively referred to as \"tourist apartheid.\" In recent years, as the government has enacted limited economic reforms, it has been much more open to debate on economic issues. In 2013, Cuba eliminated its long-standing policy of requiring an exit permit and letter of invitation for Cubans to travel abroad. The change has allowed prominent dissidents and human rights activists to travel abroad and return to Cuba. In recent years, the Cuban government has moved to expand internet connectivity through \"hotspots\" first begun in 2015 and through the launching of internet capability on cellphones in late 2018. As noted below, short-term detentions for political reasons declined significantly in 2017 and 2018, although there were still almost 2,900 such detentions in 2018. ", "Political Prisoners. In October 2018, the State Department's U.S. Mission to the United Nations launched a campaign to call attention to the plight of Cuba's \"estimated 130 political prisoners.\" Secretary of State Mike Pompeo wrote an open letter to Cuban Foreign Minister Bruno Rodriguez in December 2018, asking for a substantive explanation for the continued detention of eight specific political prisoners and an explanation of the charges and evidence against other individuals held as political prisoners.", "In January 2019, the Havana-based Cuban Commission for Human Rights and National Reconciliation (CCDHRN) estimated that Cuba held some 130-140 political prisoners. In June 2018, the CCDHRN made public a list with 120 who are prisoners for political reasons, consisting of 96 opponents or those disaffected toward the regime (more than 40 are members of UNPACU) and 24 accused of employing or planning some form of force or violence. ", "According to the State Department's human rights report on Cuba covering 2018, issued in March 2019, the government refused international humanitarian organizations and the United Nations access to its prisons and detention centers, and closely monitored and often harassed domestic human rights organizations. The report noted the lack of governmental transparency, along with its systematic violations of due process rights, which masked the nature of criminal charges and prosecutions and allowed the government to prosecute peaceful human rights activists for criminal violations or \"pre-criminal dangerousness.\" ", "Political activist Dr. Eduardo Cardet, designated by Amnesty International (AI) as a \"prisoner of conscience,\" has been imprisoned since November 2016 for publicly criticizing Fidel Castro and was sentenced to three years in prison. AI maintains that Cardet, a leader in the dissident Christian Liberation Movement, was sent to prison solely for peacefully exercising his right to freedom of expression and has called for his immediate release. In 2018, the Cuban government released two political prisoners after hunger strikes: in July, AI-designated prisoner of conscience Dr. Ariel Ruiz Urquiola, who had been sentenced to a year in prison in May 2018 for the crime of disrespecting authority ( desacato ); and in October, UNPACU activist Tom\u00e1s N\u00fa\u00f1ez Magdariaga who had been sentenced to a year in jail for allegedly making threats to a security agent.", "Short- T erm Detentions. Short-term detentions for political reasons increased significantly from 2010 through 2016, a reflection of the government's change of tactics in repressing dissent away from long-term imprisonment. The CCDHRN reports that the number of such detentions grew annually from at least 2,074 in 2010 to at least 8,899 in 2014. The CCDHRN reported a slight decrease to 8,616 short-term detentions in 2015, but this figure increased again to at least 9,940 detentions for political reasons in 2016, the highest level recorded by the human rights organization. ", "Since 2017, however, the CCDHRN has reported a significant decline in short-term detentions. In 2017, the number of short-term detentions fell to 5,155, almost half the number detained in 2016 and the lowest level since 2011. The decline in short-term detentions continued in 2018, with 2,873 reported short-term detentions, almost a 45% decline from 2017 and the lowest level since 2010. ", "Bloggers, Civil Society Groups , and Independent Media . Numerous independent Cuban blogs have been established over the past dozen years. Cuban blogger Yoani S\u00e1nchez has received considerable international attention since 2007 for her website, Generaci\u00f3n Y , which includes commentary critical of the Cuban government. In May 2014, S\u00e1nchez launched an independent digital newspaper in Cuba, 14 y medio , available on the internet, but distributed through a variety of methods in Cuba, including CDs, USB flash drives, and DVDs.", "Estado de SATS , a forum founded in 2010 by human rights activist Antonio Rodiles, has had the goal of encouraging open debate on cultural, social, and political issues. The group has hosted numerous events and human rights activities over the years, but it and its founder have also been the target of government harassment. ", "Other notable online forums and independent or alternative media that have developed include Cuba Posible (founded by two former editors of the Catholic publication Espacio Laical ) , Periodismo del Barrio (focusing especially on environmental issues), El Toque , O nCuba (a Miami-based digital magazine with a news bureau in Havana), and Tremenda Nota (focusing on the LGBT community).", "Trafficking in Persons. The State Department released its 2018 Trafficking in Persons (TIP) Report in June 2018, and for the fourth consecutive year Cuba was placed on the Tier 2 Watch List (in prior years, Cuba had Tier 3 status). Tier 3 status refers to countries whose governments do not fully comply with the minimum standards for combatting trafficking and are not making significant efforts to do so. In contrast, Tier 2 Watch List status refers to countries whose governments, despite making significant efforts, do not fully comply with the minimum standards and still have some specific problems (e.g., an increasing number of victims or failure to provide evidence of increasing antitrafficking efforts) or whose governments have made commitments to take additional antitrafficking steps over the next year. Normally, a country is automatically downgraded to Tier 3 status if it is on the Tier 2 Watch List for three consecutive years unless the Secretary of State authorizes a waiver. The State Department issued such a waiver for Cuba in 2017 because the government had devoted sufficient resources to a written plan that, if implemented, would constitute significant efforts to meet the minimum standards for the elimination of trafficking. In the 2018 TIP report, the State Department again issued a waiver for Cuba allowing it to remain on the Tier 2 Watch List for the fourth consecutive year. Such a waiver, however, is only permitted for two years. After the third year, the country must either go up to Tier 2 or down to Tier 3.", "In its 2018 TIP report, the State Department noted the Cuban government's significant efforts to prosecute and convict more traffickers, create a directorate to provide specialized attention to child victims of crime and violence, including trafficking, and publish its antitrafficking plan for 2017-2020. The State Department also noted, however, that the Cuban government did not demonstrate increasing efforts compared to the previous reporting period. It maintained that the government did not criminalize most forms of forced labor or sex trafficking for children ages 16 or 17, and did not report providing specialized services to identified victims. The State Department also made several recommendations for Cuba to improve its antitrafficking efforts, including the enactment of a comprehensive antitrafficking law that prohibits and sufficiently punishes all forms of trafficking. (Also see discussions of Cuba's medical missions, which some observer consider forced labor, in the \" Foreign Relations \" and \" Migration Issues \" sections below.)", "Engagement between U.S. and Cuban officials on antitrafficking issues has increased in recent years. In January 2017, U.S. officials met with Cuban counterparts in their fourth such exchange to discuss bilateral efforts to address human trafficking. Subsequently, in January 2017, the United States and Cuba signed a broad memorandum of understanding on law enforcement cooperation in which the two countries stated their intention to collaborate on the prevention, interdiction, monitoring, and prosecution of transnational or serious crimes, including trafficking in persons. In February 2018, the State Department and the Department of Homeland Security hosted meetings in Washington, DC, with Cuban officials on efforts to combat trafficking in persons."], "subsections": []}, {"section_title": "Economic Conditions", "paragraphs": ["Cuba's economy continues to be largely state-controlled, with the government owning most means of production and employing a majority of the workforce. Key sectors of the economy that generate foreign exchange include the export of professional services (largely medical personnel to Venezuela); tourism, which has grown significantly since the mid-1990s, with an estimated 4.75 million tourists visiting Cuba in 2018; nickel mining, with the Canadian mining company Sherritt International involved in a joint investment project; and a biotechnology and pharmaceutical sector that supplies the domestic health care system and has fostered a significant export industry. Remittances from relatives living abroad, especially from the United States, also have become an important source of hard currency, amounting to some $3.5 billion in 2017. ", "The once-dominant sugar industry has declined significantly over the past 20 years. Because of drought, damage from Hurricane Irma, and subsequent months of heavy rains, the 2017-2018 sugar harvest dropped by almost 44% to just over 1 million metric tons (MT), compared to 1.8 million MT the previous year. The outlook for the 2018-2019 harvest is 1.5 million MT, almost a 50% improvement; for comparison, in 1990, Cuba produced 8.4 million MT of sugar. ", "For almost 20 years, Cuba has depended heavily on Venezuela for its oil needs. In 2000, the two countries signed a preferential oil agreement (essentially an oil-for-medical-personnel barter arrangement) that provided Cuba with some 90,000-100,000 barrels of oil per day, about two-thirds of its consumption. Cuba's goal of becoming a net oil exporter with the development of its offshore deepwater oil reserves was set back in 2012, when the drilling of three exploratory oil wells was unsuccessful. This setback, combined with Venezuela's economic difficulties, has raised Cuban concerns about the security of the support received from Venezuela. Since 2015, Venezuela has cut the amount of oil that it sends to Cuba, and Cuba has increasingly turned to other suppliers for its oil needs, such as Algeria and Russia. Cuba now reportedly receives between 40,000-50,000 barrels of oil per day from Venezuela, about one-third of its consumption.", "The government of Ra\u00fal Castro implemented a number of economic policy changes, but economists were generally disappointed that more far-reaching reforms were not undertaken. At the PCC's seventh party congress, held in April 2016, Ra\u00fal Castro reasserted that Cuba would move forward with updating its economic model \"without haste, but without pause.\" A number of Cuba's economists have pressed the government to enact more far-reaching reforms and embrace competition for key parts of the economy and state-run enterprises. These economists criticize the government's continued reliance on central planning and its monopoly on foreign trade. ", "Economic Growth. The Cuban government reports that the economy grew 1.8% in 2017 and an estimated 1.2% in 2018. President D\u00edaz-Canel has said that austerity measures begun in 2016 will continue in 2019. The economy has been hurt by reduced support from Venezuela over the past several years and the unexpected December 2018 ending of Cuba's program sending medical professionals to Brazil, which had provided Cuba with some $400 million a year. The Economist Intelligence Unit (EIU) predicts economic growth will slow to 0.7% in 2019 and 0.3% in 2020 because of reduced aid and oil shipments from Venezuela.", "Private Sector. The Cuban government employs a majority of the labor force, but the government has been allowing more private-sector activities. In 2010, the government opened up a wide range of activities for self-employment and small businesses to almost 200 categories of work. The number of self-employed or cuentapropistas rose from 144,000 in 2009 to about 591,000 in May 2018, but declined to almost 581,000 at the end of 2018. Analysts contend that the government needs to do more to aid the development of the private sector, including an expansion of authorized activities to include more white-collar occupations and state support for credit to support small businesses. ", "Beginning in mid-2017, the government took several steps that restricted private-sector development. It temporarily stopped issuing new licenses for 27 private-sector occupations, including for private restaurants and for renting private residences, closed a fast-growing cooperative that had provided accounting and business consultancy services, and put restrictions on construction cooperatives. The government maintains that it took the actions to \"perfect\" the functioning of the private sector and curb illicit activities, such as the sale of stolen state property, tax evasion, and labor violations. ", "In July 2018, the government released regulations that were to take effect in December 2018 that would have limited an individual to one business license, reduced and consolidated the permissible 200 categories of work to 123 categories, and limited the size of private restaurants. The aims of the new regulations were to increase taxation oversight of the private sector and to control the concentration of wealth and rising inequality, but many observers believed the regulations were aimed at stifling private-sector growth because of the government's concerns regarding that sector's independence from the government.", "Two days before the regulations were to go into effect, President D\u00edaz-Canel did an about-face and announced that some aspects of the regulations viewed as especially egregious by the private sector would be eliminated or eased. Most significantly, individuals would not be limited to one licensed activity; restaurants, bars, and cafeterias would not be subject to a limit of 50 seats; and requirements for maintaining a minimum balance in bank accounts would be reduced from the equivalent of three months of tax payments to two months and would apply to just six of the 123 categories of employment. Analysts generally view the backtracking as an indication that President D\u00edaz-Canel is willing to make policy changes in response to public opinion and as a sign that the government does not want to shrink the private sector.", "Foreign Investment. The Cuban government adopted a new foreign investment law in 2014 with the goal of attracting increased levels of foreign capital to the country. The law cut taxes on profits by half, to 15%, and exempts companies from paying taxes for the first eight years of operation. It also eliminated employment or labor taxes, although companies still must hire labor through state-run companies, with agreed wages. A fast-track procedure for small projects reportedly streamlines the approval process, and the government agreed to improve the transparency and time of the approval process for larger investments. ", "A Mariel Special Development Zone (ZED Mariel) was established in 2014 near the port of Mariel to attract foreign investment. To date, ZED Mariel has approved some 43 investment projects, which are at various stages of development. In November 2017, Cuba approved a project for Rimco (the exclusive dealer for Caterpillar in Puerto Rico, the U.S. Virgin Islands, and the Eastern Caribbean) to become the first U.S. company to be located in the ZED Mariel. Rimco plans to set up a warehouse and distribution center to distribute Caterpillar equipment. In September 2018, the Roswell Park Comprehensive Cancer Center of Buffalo, NY, announced it was entering into a joint venture with Cuba's Center for Molecular Immunology focused on the development of cancer therapies; the joint venture will be located in the ZED Mariel. ", "According to Cuba's Minister of Foreign Trade and Investment Rodrigo Malmierca, Cuba has signed more than 200 investment projects valued at $5.5 billion since it made changes to its investment law in 2014, with $1.5 billion of that in 2018. The actual amount invested reportedly is much less, estimated at $500 million annually. In November 2018, the Cuban government updated its wish list for foreign investment, which includes 525 projects representing potential investment of $11.6 billion in such high-priority areas as tourism, agriculture and food production, oil, the industrial sector, and biotechnology."], "subsections": []}, {"section_title": "Foreign Relations", "paragraphs": ["During the Cold War, Cuba had extensive relations with, and support from, the Soviet Union, which provided billions of dollars in annual subsidies to sustain the Cuban economy. This subsidy system helped to fund an activist foreign policy and support for guerrilla movements and revolutionary governments in Latin America and Africa. With an end to the Cold War, the dissolution of the Soviet Union, and the loss of Soviet financial support, Cuba was forced to abandon its revolutionary activities abroad. As its economy reeled from the loss of Soviet support, Cuba was forced to open up its economy and engage in economic relations with countries worldwide. ", "In ensuing years, Cuba diversified its trading partners, although Venezuela under populist leftist President Hugo Ch\u00e1vez (1999-2013) became one of Cuba's most important partners, leading to Cuba's dependence on Venezuela for oil imports. In 2017, the leading sources of Cuba's imports in terms of value were Venezuela (18.1%, down from 40% in 2014), China (16.3%), and Spain (10.8%); the leading destinations of Cuban exports were Canada (19.4%), Venezuela (15.6%), Spain (8.6%), and China (5.2%).", "Russia. Relations with Russia, which had diminished significantly in the aftermath of the Cold War, have strengthened somewhat over the past several years. In 2014, Russia agreed to write off 90% of Cuba's $32 billion Soviet-era debt, with some $3.5 billion to be paid back by Cuba over a 10-year period that would fund Russian investment projects in Cuba. Trade relations between Russia and Cuba have not been significant, although Russian exports to Cuba have grown over the past three years, amounting to almost $373 million in 2018, led by motor vehicles (and parts) and oil. Russian energy companies Zarubezhneft and Rosneft are currently involved in oil exploration in Cuba, and in 2017, Rosneft began shipping oil to Cuba amid Cuba's efforts to diversify its foreign oil sources because of Venezuela's diminished capacity.", "Russian officials publicly welcomed the improvement in U.S.-Cuban relations under the Obama Administration, although some analysts viewed the change in U.S. policy as a setback for Russian overtures in the region. As U.S.-Cuban normalization talks were beginning in Havana in January 2015, a Russian intelligence ship docked in Havana (the ship also docked in Havana in 2014, 2017, and 2018). In December 2016, Russia and Cuba signed a bilateral cooperation agreement for Russia's support to help Cuba modernize its defense sector until 2020. Some reports indicate that as U.S. relations with Cuba have deteriorated under the Trump Administration, Russia has been attempting to increase its ties, including high-level meetings between government officials and increased economic, military, and cultural engagement. ", "For Cuba, a deepening of relations with Russia could help economically, especially regarding oil, and also could serve as a counterbalance to the partial rollback of U.S. engagement policy by the Trump Administration. However, President D\u00edaz-Canel's three-day trip to Russia in November 2018 reportedly did not yield significant results. Press reports indicate that Cuba received a $50 million credit line for purchases of Russian military weapons and spare parts and contracts to modernize three power plants and a metal processing plant and upgrade Cuba's railway system.", "There has been concern in Congress about the role of Russia in Latin America, including in Cuba. The conference report to the John S. McCain National Defense Authorization Act for FY2019, P.L. 115-232 ( H.R. 5515 ) required the Defense Intelligence Agency to submit a report to Congress on security cooperation between Russia and Cuba (as well as between Russia and Nicaragua and Venezuela). Among the areas of cooperation noted in the report, which was submitted to Congress in February 2019, was a Russian-Cuban announcement in 2017 of a plan to construct a GLONASS satellite navigation station in Cuba, and a 2013 Russia-Cuba agreement permitting Russian military vessels to refuel and resupply in Cuban ports. According to the report, the Russian Navy currently uses Cuban ports for maintenance, minor repairs, and refueling, and may seek to establish a permanent naval logistics facility in the country.", "China. During the Cold War, Cuba and China did not have close relations because of Sino-Soviet tensions, but bilateral relations with China have grown closer over the past 15 years, resulting in a notable increase in trade. Since 2004, Chinese leaders have made a series of visits to Cuba and Cuban officials in turn have visited China, including a November 2018 visit by President D\u00edaz-Canel. During the visit, Chinese President Xi Jinping called for a long-term plan to promote the development of China-Cuba ties. He said that China would welcome Cuba's participation in the Belt and Road Initiative, which is focused on infrastructure development around the world. President Xi called on both countries to enhance cooperation on trade, energy, agriculture, tourism, and biopharmaceutical manufacturing. While Cuba's relationship with China undoubtedly has an ideological component since both are the among the world's remaining communist regimes, economic linkages and cooperation appear to be the most significant component of bilateral relations.", "According to Cuban trade statistics, total Cuba-China trade in 2017 was valued at almost $2 billion (accounting for 16.1% of Cuba's trade worldwide), with Cuba exporting $364 million to China and importing almost $1.7 billion. This was a 21% drop from 2016, when total Cuba-China trade almost reached $2.6 billion, and an almost 30% drop in Cuba's imports from China compared to 2016. The fall in imports from China reflects Cuba's difficult economic situation as Venezuelan support has diminished. In response to a cash crunch, the Cuban government has cut imports and reduced the use of fuel and electricity. ", "China reportedly had been reluctant to invest in Cuba because of the uninviting business environment, but recently that has begun to change. In 2015, the Chinese cellphone company Huawei reached an agreement with the Cuban telecommunications company ETECSA to set up Wi-Fi hotspots at public locations, and is helping to wire homes. In 2016, the Chinese company Haier set up a plant assembling laptops and tablets in Cuba. Over the past two years, Chinese financing has been supporting the modernization of a port in Santiago. Other planned Chinese investment projects reportedly include pharmaceuticals as well as the tourism sector involving two hotels and a golf course.", "European Union. After two years of talks, the European Union (EU) and Cuba reached a Political Dialogue and Cooperation Agreement in 2016 covering political, trade, and development issues. The agreement was submitted to the European Parliament, which overwhelmingly endorsed the agreement in July 2017, welcoming it as a framework for relations and emphasizing the importance of the human rights dialogue between the EU and Cuba. Although the agreement will enter into force in full after it has been ratified in all EU member states, the provisional application of the agreement began in November 2017. ", "The new cooperation agreement replaces the EU's 1996 Common Position on Cuba, which stated that the objective of EU relations with Cuba included encouraging \"a process of transition to pluralist democracy and respect for human rights and fundamental freedoms.\" The position also had stipulated that full EU economic cooperation with Cuba would depend upon improvements in human rights and political freedom. Nevertheless, the new agreement states that a human rights dialogue will be established within the framework of the overall political dialogue and has numerous provisions related to democracy, human rights, and good governance. In October 2018, the EU and Cuba held their first human rights dialogue under the agreement, with the meeting addressing issues related to civil, political, economic, social and cultural rights, and multilateral cooperation.", "Venezuela . For more than 15 years, Venezuela has been a significant source of support for Cuba. Dating back to 2000 under populist President Hugo Ch\u00e1vez, Venezuela began providing subsidized oil and investment to Cuba. For its part, Cuba has sent thousands of professional personnel to Venezuela. Estimates of the number of Cuban personnel in Venezuela vary, but a 2014 Brookings study estimated that there were some 40,000 Cuban professionals in Venezuela, with 75% of those being healthcare workers. The roughly 30,000 healthcare personnel included doctors and nurses, while the balance of Cuban personnel in Venezuela reportedly included teachers, sports instructors, military advisers, and intelligence operatives. According to the Brookings study, various sources estimate that the number of Cuban military and intelligence advisers in Venezuela ranged from hundreds to thousands, coordinated by Cuba's military attach\u00e9 in Venezuela. Some Cuban medical personnel in Venezuela allege that their services were used to secure votes for the Maduro regime. The extent to which the level of Cuban personnel in Venezuela has declined because of the drop in Venezuelan oil exports to Cuba and Venezuela's deepening economic crisis is uncertain.", "Since the death of Ch\u00e1vez in 2013, Cuba has been concerned about the future of Venezuelan financial support. Cuba's concerns have intensified since 2014 as Venezuela's mounting economic and political challenges have grown under the authoritarian regime of President Nicol\u00e1s Maduro. As noted above, oil imports from Venezuela have declined, leading to Cuba's imposition of austerity measures and sluggish economic growth. ", "Brazil . For many years, Cuba and Brazil had friendly relations. Brazil helped finance development of the port of Mariel, west of Havana, from 2009 to 2014, although beginning in 2018, Cuba has missed payments to Brazil's development bank on loans for the project. In 2013, Cuba began deploying thousands of doctors to rural Brazil in a program known as Mais M\u00e9dicos , with Cuba earning hard currency for supplying the medical personnel.", "Relations have taken a turn for the worse under new right-wing populist Brazilian President Jair Bolsonaro, inaugurated in January 2019. Even before his inauguration, Bolsonaro espoused a more confrontational policy approach toward Cuba by warning that he may break diplomatic relations with Cuba and abolish the medical assistance program. Bolsonaro strongly criticized the medical program, maintaining that Cuban doctors should be able to receive 100% of the money Brazil pays Cuba for them (instead of the 25% they receive) and should be able to bring their families with them to Brazil. Cuba responded by ending the program and bringing its more than 8,000 medical personnel home by late December 2018. Although Bolsonaro and other critics have labeled the medical workers as \"slave labor,\" others contend that the Cuban medical personnel understand the conditions they will be working in and sign contracts for the work. Cuba has a long history of providing medical personnel overseas. ", "International and Regional Organizations. Cuba is an active participant in international forums, including the United Nations (U.N.) and has received support over the years from the United Nations Development Programme and the United Nations Educational, Scientific, and Cultural Organization, both of which have offices in Havana. Cuba is also a member of the U.N. Economic Commission for Latin America and the Caribbean (ECLAC, also known by its Spanish acronym, CEPAL), one of the five regional commissions of the U.N., and hosted ECLAC's 37 th session in May 2018. U.N. Secretary-General Ant\u00f3nio Guterres attended the opening of the conference, and ECLAC's Executive Secretary reaffirmed the organization's commitment to help Cuba in its efforts toward achieving sustainable development. ", "Since 1991, the U.N. General Assembly (UNGA) has approved a resolution annually criticizing the U.S. embargo and urging the United States to lift it. In 2016, for the first time, the United States abstained instead of voting against the resolution, but in 2017, the United States returned to opposing the resolution. On November 1, 2018, the UNGA again approved the resolution by a vote of 189-2, with Israel again joining the United States in opposing it. The United States also proposed eight amendments to the 2018 resolution criticizing Cuba's human rights record, but the amendments were defeated by wide margins.", "Among other international organizations, Cuba was a founding member of the World Trade Organization, but it is not a member of the International Monetary Fund, the World Bank, or the Inter-American Development Bank. Cuba is a member of the Community of Latin American and Caribbean States (CELAC), officially established in December 2011 to boost regional cooperation, but without the participation of the United States or Canada.", "Cuba was excluded from participation in the Organization of American States (OAS) in 1962 because of its identification with Marxism-Leninism. In 2009, however, the OAS overturned that policy in a move that eventually could lead to Cuba's reentry into the regional organization in accordance with the practices, purposes, and principles of the OAS. Although the Cuban government welcomed the OAS vote to overturn the 1962 resolution suspending Cuba's OAS participation, it asserted that it would not return to the OAS. "], "subsections": []}]}, {"section_title": "U.S. Policy Toward Cuba", "paragraphs": [], "subsections": [{"section_title": "Background on U.S.-Cuban Relations69", "paragraphs": ["In the early 1960s, U.S.-Cuban relations deteriorated sharply when Fidel Castro began to build a repressive communist dictatorship and moved his country toward close relations with the Soviet Union. The often tense and hostile nature of the U.S.-Cuban relationship is illustrated by such events and actions as U.S. covert operations to overthrow the Castro government culminating in the ill-fated April 1961 Bay of Pigs invasion; the October 1962 missile crisis, in which the United States confronted the Soviet Union over its attempt to place offensive nuclear missiles in Cuba; Cuban support for guerrilla insurgencies and military support for revolutionary governments in Africa and the Western Hemisphere; the 1980 exodus of around 125,000 Cubans to the United States in the so-called Mariel boatlift; the 1994 exodus of more than 30,000 Cubans who were interdicted and housed at U.S. facilities in Guantanamo Bay, Cuba, and Panama; and the 1996 shootdown by Cuban fighter jets of two U.S. civilian planes operated by the Cuban-American group Brothers to the Rescue, which resulted in the deaths of four U.S. crew members.", "Beginning in the early 1960s, U.S. policy toward Cuba consisted largely of seeking to isolate the island nation through comprehensive economic sanctions, including an embargo on trade and financial transactions. President Kennedy proclaimed an embargo on trade between the United States and Cuba in February 1962, citing Section 620(a) of the Foreign Assistance Act of 1961 (FAA), which authorizes the President \"to establish and maintain a total embargo upon all trade between the United States and Cuba.\" At the same time, the Treasury Department issued the Cuban Import Regulations to deny the importation into the United States of all goods imported from or through Cuba. The authority for the embargo was later expanded in March 1962 to include the Trading with the Enemy Act (TWEA). ", "In July 1963, the Treasury Department revoked the Cuban Import Regulations and replaced them with the more comprehensive Cuban Assets Control Regulations (CACR)\u201431 C.F.R. Part 515\u2014under the authority of TWEA and Section 620(a) of the FAA. The CACR, which include a prohibition on most financial transactions with Cuba and a freeze of Cuban government assets in the United States, remain the main body of Cuba embargo regulations and have been amended many times over the years to reflect changes in policy. They are administered by the Treasury Department's Office of Foreign Assets Control (OFAC) and prohibit financial transactions as well as trade transactions with Cuba. The CACR also require that all exports to Cuba be licensed or otherwise authorized by the Department of Commerce, Bureau of Industry and Security (BIS), under the provisions of the Export Administration Act of 1979, as amended ( P.L. 96-72 ; 50 U.S.C. Appendix 2405(j)). The Export Administration Regulations (EAR) are found at 15 C.F.R. Sections 730-774.", "Congress subsequently strengthened sanctions on Cuba with enactment of the Cuban Democracy Act of 1992 (CDA; P.L. 102-484 , Title XVII), the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 ( P.L. 104-114 ), and the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA; P.L. 106-387 , Title IX). ", "Among its provisions, the CDA prohibits U.S. foreign subsidiaries from engaging in trade with Cuba and prohibits entry into the United States for any seaborne vessel to load or unload freight if it has been involved in trade with Cuba within the previous 180 days unless licensed by the Treasury Department. The LIBERTAD Act, enacted in the aftermath of Cuba's shooting down two U.S. civilian planes in February 1996, combines a variety of measures to increase pressure on Cuba and provides for a plan to assist Cuba once it begins the transition to democracy. Most significantly, the act codified the Cuban embargo as permanent law, including all restrictions imposed by the executive branch under the CACR. This provision is noteworthy because of its long-lasting effect on U.S. policy options toward Cuba. The executive branch is prevented from lifting the economic embargo without congressional concurrence through legislation until certain democratic conditions set forth in the law are met, although the President retains broad authority to amend the regulations therein. Another significant sanction in Title III of the law holds any person or government that traffics in property confiscated by the Cuban government liable for monetary damages in U.S. federal court. Until recently, all Administrations, acting under provisions of the law, had suspended the implementation of Title III at six-month intervals, but in early March, the Trump Administration provided a limited opening for the right to file lawsuits. (For additional information, see section on \" Property Claims and Title III of the LIBERTAD Act \" below.) TSRA authorizes U.S. commercial agricultural exports to Cuba, but it also includes prohibitions on U.S. assistance and private financing and requires \"payment of cash in advance\" or third-country financing for the exports. The act also prohibits tourist travel to Cuba. ", "In addition to these acts, Congress enacted numerous other provisions of law over the years that imposed sanctions on Cuba, including restrictions on trade, foreign aid, and support from international financial institutions. The State Department also designated the government of Cuba as a state sponsor of international terrorism in 1982 under Section 6(j) of the Export Administration Act and other laws because of the country's alleged ties to international terrorism, although as noted below, the Obama Administration rescinded Cuba's designation in 2015.", "Beyond sanctions, another component of U.S. policy has consisted of support measures for the Cuban people. This support includes U.S. private humanitarian donations, medical exports to Cuba under the terms of the CDA, U.S. government support for democracy-building efforts, and U.S.-sponsored radio and television broadcasting to Cuba. The enactment of TSRA by the 106 th Congress also led to the United States becoming one of Cuba's largest commercial suppliers of agricultural products. Authorization for purposeful travel to Cuba and cash remittances to Cuba has constituted an important means to support the Cuban people, although significant congressional debate has occurred over these issues for many years. ", "Despite the poor state of U.S.-Cuban relations, several examples of bilateral cooperation took place over the years in areas of shared national interest. Three areas that stand out are alien migrant interdiction (with migration accords negotiated in 1994 and 1995), counternarcotics cooperation (with increased cooperation dating back to 1999), and cooperation on oil spill preparedness and prevention (since 2011). "], "subsections": []}, {"section_title": "Obama Administration: Shift toward Engagement", "paragraphs": ["In December 2014, the Obama Administration initiated a major policy shift in U.S. policy toward Cuba, moving away from sanctions toward a policy of engagement and the normalization of relations. President Obama said that his Administration would \"end an outdated approach that, for decades, has failed to advance our interests.\" He maintained that the United States would continue to raise concerns about democracy and human rights in Cuba but stated that \"we can do more to support the Cuban people and promote our values through engagement.\" ", "The policy change included three major steps: (1) the rescission of Cuba's designation as a state sponsor of international terrorism in May 2015; (2) the restoration of diplomatic relations in July 2015 (relations had been severed in January 1961 by the Eisenhower Administration); and (3) steps to increase travel, commerce, and the flow of information to Cuba. The third step required the Treasury and Commerce Departments to amend the CACR and EAR respectively; the two agencies issued five rounds of amendments to the regulations in 2015-2016 that eased restrictions on travel, remittances, trade, telecommunications, and banking and financial services. They also authorized certain U.S. companies or other entities to have a physical presence in Cuba, such as an office, retail outlet, or warehouse.", "After the restoration of relations, U.S. and Cuban officials negotiated numerous bilateral agreements, including in the following areas: marine protected areas (November 2015); environmental cooperation on a range of issues (November 2015); direct mail service (December 2015); civil aviation (February 2016); maritime issues related to hydrography and maritime navigation (February 2016); agriculture (March 2016); health cooperation (June 2016); counternarcotics cooperation (July 2016); federal air marshals (September 2016); cancer research (October 2016); seismology (December 2016); meteorology (December 2016); wildlife conservation (December 2016); animal and plant health (January 2017); oil spill preparedness and response (January 2017); law enforcement cooperation (January 2017); and search and rescue (January 2017). The United States and Cuba also signed a bilateral treaty in January 2017 delimiting their maritime boundary in the eastern Gulf of Mexico. Bilateral dialogues were held on all of these issues as well as on other issues including counterterrorism, claims (U.S. property, unsatisfied court judgments, and U.S. government claims), economic and regulatory issues, human rights, renewable energy and efficiency, trafficking in persons, and migration.", "President Obama visited Cuba in March 2016 with the goals of building on progress toward normalizing relations and expressing support for human rights. In a press conference with Ra\u00fal Castro, President Obama said that the United States would \"continue to speak up on behalf of democracy, including the right of the Cuban people to decide their own future.\" During a speech that was televised to the Cuban nation, President Obama spoke out for advancing human rights, stating his belief that citizens should be free to speak their minds without fear and that the rule of law should not include arbitrary detentions. In October 2016, President Obama issued a presidential policy directive on the normalization of relations with Cuba. The directive set forth the Administration's vision for normalization of relations and laid out six medium-term objectives: (1) government-to-government interaction; (2) engagement and connectivity; (3) expanded commerce; (4) economic reform; (5) respect for universal human rights, fundamental freedoms, and democratic values; and (6) Cuba's integration into international and regional systems. ", "In January 2017, the Obama Administration also announced another significant policy change toward Cuba. The Administration ended the so-called wet foot/dry foot policy, under which thousands of undocumented Cuban migrants had entered the United States since the mid-1990s. Pursuant to a 1995 bilateral migration accord, Cuban migrants intercepted at sea attempting to reach the United States were returned to Cuba, whereas those who successfully reached U.S. shore were generally permitted to stay in the United States. Under the 2017 change in policy, Cuban nationals who attempt to enter the United States illegally and do not qualify for humanitarian relief are now subject to removal. (For more, see \" Migration Issues \" below.)"], "subsections": []}, {"section_title": "Trump Administration: Partial Rollback of Engagement and Increased Sanctions", "paragraphs": ["President Trump unveiled his Administration's policy on Cuba in June 2017. The policy partially rolls back some of the Obama Administration's efforts to normalize relations with Cuba, and also includes new sanctions. The President set forth his Administration's policy in a speech in Miami, FL, where he signed a national security presidential memorandum (NSPM) on Cuba replacing President Obama's October 2016 presidential policy directive that had laid out objectives for the normalization process. President Trump called for the Cuban government to end the abuse of dissidents, release political prisoners, stop jailing innocent people, and return U.S. fugitives from justice in Cuba. He stated that \"any changes to the relationship between the United States and Cuba will depend on real progress toward these and other goals.\" Once Cuba takes concrete steps in these areas, President Trump said \"we will be ready, willing and able to come to the table to negotiate that much better deal for Cubans, for Americans.\"", "The new policy leaves many of the Obama-era policy changes in place, including the reestablishment of diplomatic relations and a variety of eased sanctions to increase travel and commerce with Cuba. The new policy also keeps in place the Obama Administration's action ending the so-called wet foot/dry foot policy toward Cuban migrants, which, according to the NSPM, had \"encouraged untold thousands of Cuban nationals to risk their lives to travel unlawfully to the United States.\"", "The most significant policy changes set forth in President Trump's NSPM include (1) restrictions on financial transactions with companies controlled by the Cuban military, intelligence, or security services or personnel and (2) the elimination of people-to-people educational travel by individuals. In November 2017, the Treasury and Commerce Departments issued amended regulations to implement the new policy.", "As expected, the Cuban government's reaction to President Trump's June 2017 speech announcing Cuba policy changes was critical, but the government also reiterated its willingness to continue a respectful and cooperative dialogue on issues of mutual interest and the negotiation of outstanding issues, although it maintained that Cuba would not make concessions to its sovereignty and independence. ", "Restrictions on Transactions with the Cuban Military. Pursuant to the NSPM, the State Department was tasked with identifying entities controlled by the Cuban military, intelligence, or security services or personnel and publishing a list of those entities with which direct financial transactions would disproportionately benefit those services or personnel at the expense of the Cuban people or private enterprise in Cuba. The NSPM specifically identified the Grupo de Administraci\u00f3n Empresarial S.A . (GAESA), a holding company of the Cuban military involved in most sectors of the Cuban economy, particularly the tourism sector. ", "The State Department issued a list of \"restricted entities\" in November 2017 and updated the list with additional entries in November 2018 and March 2019. Currently, there are 210 entities on the list, including two ministries, five holding companies (including GAESA) and 47 of their subentities (including the Mariel Special Development Zone), 99 hotels (with 28 in Havana), two tourist agencies, five marinas, 10 stores in Old Havana, and 40 entities serving the defense and security sectors. The Treasury Department forbids financial transactions with those entities, with certain exceptions, including transactions related to air or sea operations supporting permissible travel, cargo, or trade; the sale of agricultural and medical commodities; direct telecommunications or internet access for the Cuban people; and authorized remittances. The new prohibitions limit U.S. economic engagement with Cuba, particularly in travel-related transactions and potential investment opportunities.", "Restrictions on People-to-People Travel. With regard to people-to-people educational travel, the Treasury Department amended the CACR to require that such travel take place under the auspices of an organization specializing in such travel, with travelers accompanied by a representative of the organization. Individuals are no longer authorized to engage in such travel on their own. The Obama Administration had authorized such individual travel in March 2016, which, combined with the beginning of regular commercial flights and cruise ship service, led to an increase in Americans visiting Cuba. With the new Treasury Department regulations issued, the level of U.S. travel to Cuba has fallen. (Also see \" U.S. Travel to Cuba ,\" below.)", "Internet Task Force. Pursuant to the NSPM, in January 2018, the State Department announced the establishment of a Cuba Internet Task Force, composed of U.S. government and non-U.S. government representatives, to examine the technological challenges and opportunities for expanding internet access and independent media in Cuba. The task force held its first meeting in February 2018, with two subcommittees formed to develop recommendations\u2014one to explore the role of media and freedom of information in Cuba and the other to explore internet access in Cuba. ", "Continued Engagement in Some Areas. In a demonstration of continuity in policy between the Trump and Obama Administrations, the U.S. and Cuban governments have continued to engage on various bilateral issues through meetings and dialogues. The two countries have continued to hold semiannual migration talks, which, since 1995, have provided a forum to review and coordinate efforts to ensure safe, legal, and orderly migration between Cuba and the United States; talks were held in April and December 2017, and most recently in July 2018. ", "The United States and Cuba also have continued to hold Bilateral Commission meetings that began under the Obama Administration in which the two governments review priorities and areas for engagement. Officials held a sixth Bilateral Commission meeting in September 2017 and a seventh meeting in June 2018. According to the State Department, at the June 2018 meeting, the two countries reviewed such areas for engagement as trafficking in persons, civil aviation safety, law enforcement matters, agriculture, maritime safety and search and rescue, certified claims, and environmental challenges. The State Department maintained that the United States reiterated the urgent need to identify the source of the \"attacks\" on U.S. diplomats and to ensure they cease (see discussion below), expressed continued concerns about the arbitrary detention of independent journalists and human rights defenders, and acknowledged Cuba's progress in repatriating Cubans with final removal orders while also emphasizing that Cuba needs to accept greater numbers of returnees. Cuba's Ministry of Foreign Affairs maintained the meeting provided an opportunity to review areas of exchange and cooperation, but it also criticized several aspects of U.S. policy, including the \"intensification\" of the U.S. embargo and what Cuba viewed as the \"political manipulation of the alleged health cases\" that became a \"pretext\" to reduce staff and therefore affect embassy operations in both countries. ", "Both countries also have continued engagement on other bilateral issues. The U.S. Coast Guard and the Cuban Border Guard participated in professional exchanges in July 2017 and January 2018 covering a variety of topics, including search and rescue. The U.S. Departments of State, Justice, and Homeland Security participated in law enforcement dialogues with Cuban counterparts in September 2017 and July 2018; the 2018 dialogue included such topics as fugitives and the return of Cuban nationals with final orders of removal. Additional bilateral meetings and exchanges were held in 2018 on such topics as cybersecurity and cybercrime, counternarcotics efforts, and counterterrorism in January; anti-money laundering efforts and trafficking in persons in February; search and rescue in March; and agriculture and scientific cooperation related to environmental disaster in April.", "Health Injuries of U.S. Personnel in Havana. According to the Department of State, from November 2016 to May 2018, 26 U.S. Embassy community members suffered a series of unexplained injuries, including hearing loss and cognitive issues. The State Department maintains that the U.S. investigation has not reached a definitive conclusion regarding possible causes, sources, or technologies that might have been used. ", "In response to the number of injuries, the State Department ordered the departure of nonemergency personnel from the U.S. Embassy in September 2017 to minimize the risk of their exposure to harm; embassy staff was reduced by about two-thirds. In October 2017, the State Department ordered the departure of 15 diplomats from the Cuban Embassy in Washington, DC. According to then-Secretary of State Rex Tillerson, the action was taken because of Cuba's failure to protect U.S. diplomats in Havana and to ensure equity in the impact on diplomatic operations. Cuba strongly denies responsibility for the injuries. The staff reduction at the U.S. Embassy has affected embassy operations, especially visa processing, and has made bilateral engagement more difficult. (For further background, see \" U.S. Response to Health Injuries of U.S. Personnel in Havana \" below.)", "\"Troika of Tyranny.\" In a November 2018 address in Miami, FL, National Security Adviser John Bolton strongly criticized the Cuban government on human rights, stating that \"we will only engage with a Cuban government that is willing to undertake necessary and tangible reforms\u2014a government that respects the interests of the Cuban people.\" Bolton's speech, full of anti-communist political discourse reminiscent of the Cold War era, referred to Cuba, Venezuela, and Nicaragua as a \"troika of tyranny\" and the \"cause of immense human suffering, the impetus of enormous regional instability, and the genesis of a sordid cradle of communism in the Western Hemisphere.\" He referred to the three countries' leaders as \"three stooges of socialism\" and as \"clownish pitiful figures.\" Bolton asserted that the Venezuelan regime's repression has been \"enabled by the Cuban dictatorship.\"", "In 2019, as the political situation in Venezuela has deteriorated and the United States has ramped up sanctions on the Maduro regime, the Trump Administration has increased its criticism of Cuba's support for the regime. In a March 11, 2019, press briefing, Secretary of State Pompeo asserted that \"Cuban military and intelligence services are deeply entrenched in the Venezuelan state\", and provide physical protection and other support to President Maduro and those around him. Pompeo maintained that Cuba has trained Venezuela's secret police \"torture tactics, domestic spying techniques, and mechanisms of repression that Cuban authorities have wielded against their own people for decades.\"", "Title III of the LIBERTAD Act. The Trump Administration ratcheted up U.S. sanctions on Cuba on March 4, 2019, when Secretary of State Pompeo, pursuant to Title III of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 ( P.L. 104-114 ), allowed certain lawsuits to go forward against those trafficking in confiscated property in Cuba. Since 1996, pursuant to the provisions of Title III, all Administrations have suspended, at six-month intervals, the right to file such lawsuits. The next six-month suspension was due by February 1, 2019, but on January 16, Secretary Pompeo suspended the right to file lawsuits for an additional 45 days, maintaining that the extension would permit a careful review taking into account U.S. national interests and efforts to expedite a transition to democracy in Cuba. Then, on March 4, Secretary Pompeo partially suspended the right to file lawsuits for an additional 30 days (through April 17) but allowed lawsuits, beginning March 19, against an entity or subentity on the State Department's \"Cuba Restricted List\" controlled by the Cuban military, intelligence, or security services. Lawsuits can be brought by any U.S. national, including those who were not U.S. nationals at the time of the confiscation. However, lawsuits may not be brought against third-country foreign investors in Cuba. (For more, see \" Property Claims and Title III of the LIBERTAD Act \" below.)"], "subsections": []}, {"section_title": "Debate on the Direction of U.S. Policy", "paragraphs": ["Over the years, although U.S. policymakers have agreed on the overall objectives of U.S. policy toward Cuba\u2014to help bring democracy and respect for human rights to the island\u2014there have been different schools of thought about how to achieve those objectives. Some have advocated a policy of keeping maximum pressure on the Cuban government until reforms are enacted, while continuing efforts to support the Cuban people. Others have argued for an approach, sometimes referred to as constructive engagement, that would lift some U.S. sanctions that they believe are hurting the Cuban people and would move toward engaging Cuba in dialogue. Still others have called for a swift normalization of U.S.-Cuban relations by lifting the U.S. embargo. ", "In light of Fidel Castro's departure as head of government in 2006 and the gradual economic changes made by Ra\u00fal Castro, some observers had called for a reexamination of U.S. policy toward Cuba. In this new context, two broad policy approaches were advanced to contend with change in Cuba: an approach that called for maintaining the U.S. dual-track policy of isolating the Cuban government while providing support to the Cuban people and an approach aimed at influencing the attitudes of the Cuban government and Cuban society through increased contact and engagement. ", "The Obama Administration's change of U.S. policy from isolation to engagement and movement toward the normalization of relations highlighted divisions in Congress over Cuba policy. Some Members of Congress lauded the Administration's actions as in the best interests of the United States and a better way to support change in Cuba, whereas other Members strongly criticized the President for not obtaining concessions from Cuba to advance human rights. Some Members vowed to oppose the Administration's efforts toward normalization, whereas others introduced legislation to normalize relations with Cuba by lifting the embargo in its entirety or in part by easing some aspects of it. ", "The Trump Administration's policy of rolling back some of the Obama-era changes and introducing new sanctions on Cuba also has highlighted divisions in Congress over Cuba policy, with some Members supporting the President's action because of Cuba's lack of progress on human rights and others opposing it because of the potential negative effect on the Cuban people and U.S. business interests. ", "Public opinion polls have shown a majority of Americans support normalizing relations with Cuba. Among the Cuban American community in South Florida, however, a 2018 poll by Florida International University showed an increase in those supporting a continuation of the U.S. embargo compared to a 2016 poll. In the 2018 poll, although a majority of Cuban Americans in South Florida supported diplomatic relations and unrestricted travel to Cuba by all Americans, 51% polled favored continuing the embargo and 49% opposed it. This contrasts with 2016, when 63% of Cuban Americans in South Florida favored ending the embargo and 37% supported it.", "In general, those who advocate easing U.S. sanctions on Cuba make several policy arguments. They assert that if the United States moderated its policy toward Cuba\u2014through increased travel, trade, and dialogue\u2014then the seeds of reform would be planted, which would stimulate forces for peaceful change on the island. They stress the importance to the United States of avoiding violent change in Cuba, with the prospect of a mass exodus to the United States. They argue that since the demise of Cuba's communist government does not appear imminent (despite more than 50 years of sanctions), the United States should espouse a more pragmatic approach in trying to bring about change in Cuba. Supporters of changing policy also point to broad international support for lifting the U.S. embargo, to the missed opportunities for U.S. businesses because of the unilateral nature of the embargo, and to the increased suffering of the Cuban people because of the embargo. Proponents of change also argue that the United States should be consistent in its policies with the world's few remaining communist governments, including China and Vietnam.", "On the other side, opponents of lifting U.S. sanctions maintain that the policy of isolating Cuba but reaching out to the Cuban people through measures of support is the best means for realizing political change in Cuba. They point out that the LIBERTAD Act sets forth the steps that Cuba must take for the United States to normalize relations. They argue that softening U.S. policy without concrete Cuban reforms boosts Cuba's communist regime, politically and economically, and facilitates its survival. Opponents of softening U.S. policy argue that the United States should stay the course in its commitment to democracy and human rights in Cuba and that sustained sanctions can work. Critics of loosening U.S. sanctions further argue that Cuba's failed economic policies, not the U.S. embargo, are the causes of Cuba's difficult living conditions. More recently, those supporting stronger sanctions on Cuba point to the Cuban government's strong support for the Maduro regime in Venezuela, particularly military advisers and intelligence assistance. "], "subsections": []}]}, {"section_title": "Selected Issues in U.S.-Cuban Relations", "paragraphs": [], "subsections": [{"section_title": "U.S. Travel to Cuba98", "paragraphs": ["Restrictions on travel to Cuba have been a key and often contentious component of U.S. efforts to isolate Cuba's communist government for more than 50 years. The embargo regulations set forth in the CACR do not ban travel itself, but place restrictions on financial transactions related to Cuba. Numerous changes to the restrictions have occurred over time, and for five years, from 1977 until 1982, there were no restrictions on travel. Under the George W. Bush Administration, enforcement of U.S. restrictions on Cuba travel increased and restrictions on travel were tightened. Congress took legislative action in March 2009 to ease restrictions on family travel and on travel related to U.S. agricultural and medical sales to Cuba ( P.L. 111-8 , Sections 620 and 621 of Division D). In April 2009, the Obama Administration went further when the President announced that he was lifting all restrictions on family travel. In 2011, the Obama Administration further eased travel related to religious, journalistic and educational activities, including people-to-people travel exchanges, and allowed U.S. international airports to become eligible for licensed charter flights to and from Cuba. ", "The Obama Administration's December 2014 shift in U.S. policy toward Cuba included an easing of U.S. restrictions on travel to Cuba. As part of the change in policy, the Treasury Department amended the CACR in 2015 to include general licenses for the 12 existing categories of permissible travel to Cuba set forth in the regulations (see text box above). Before the policy change, travelers under several of these categories had to apply for a specific license. ", "Under the regulations, both travel agents and airlines are able to provide services for travel to Cuba without the need to obtain a specific license. Authorized travelers no longer have a per diem limit for expenditures, as in the past, and can bring back goods from Cuba as accompanied baggage for personal use, including alcohol and tobacco.", "In January 2016, the Treasury Department made additional changes to the travel regulations. Among the changes, authorization for travel and related transactions now include professional media or artistic productions in Cuba (movies, television, music recordings, and creation of artworks). Authorization for travel and other transactions for professional meetings, public performances, clinics, workshops, athletic and nonathletic competitions, and exhibitions now includes permission to organize these events, not just participate in them. ", "In March 2016, the Treasury Department had amended the travel regulations to permit travel to Cuba for individual people-to-people educational travel, but as noted above, President Trump directed the Treasury Department in June 2017 to eliminate the authorization for such travel for individuals. As set forth in amended regulations issued in November 2017, people-to-people educational travel must take place under the auspices of an organization specializing in such travel, with travelers accompanied by a representative of the organization.", "Regular air service between the United States and Cuba began in November 2016 following the signing of a U.S.-Cuba bilateral arrangement earlier in that year permitting regularly scheduled air flights as opposed to charter flights. Cruise ship service to Cuba from the United States also began in 2016, and since then has expanded significantly with 10 companies now offering cruises.", "Travel to Cuba solely for tourist activities, however, remains prohibited. Section 910(b) of TSRA prohibits travel-related transaction for tourist activities, which are defined as any activity not expressly authorized in the 12 categories of travel in the CACR.", "U.S. Travelers to Cuba. According to Cuban government statistics, the number of U.S. travelers increased from 91,254 in 2014 to 619,523 in 2017. This figure is in addition to thousands of Cuban Americans who visit family in Cuba each year; in 2017, almost 454,000 Cubans living outside the country visited Cuba, the majority from the United States. The number of U.S. visitors began to slow in the latter half of 2017 in the aftermath of Hurricane Irma, which struck in September, the Trump Administration's tighter restrictions on people-to-people travel and restrictions on transactions with the Cuban military (which keeps a number of hotels off limits to U.S. visitors), and the U.S. travel warning issued in September 2017 related to the unexplained health injuries to U.S. diplomatic personnel in Cuba. ", "In the first half of 2018, the number of U.S. visitors to Cuba, not including Cuban Americans, reportedly declined by 24% compared to the same period in 2017. By the end of 2018, however, U.S. travel to Cuba reportedly had recovered, with a growth of 1% over 2017. The recovery was spurred by a 48% increase in cruise ship arrivals (which bring in less revenue than land-based travelers). Another factor in the recovery in travel could be the August 2018 change in the U.S. travel advisory for Cuba from Level 3 (reconsider travel) to Level 2 (exercise increased caution). Some U.S. schools with academic exchange programs reportedly do not allow travel to a country with a Level 3 advisory, so the easing of the advisory to Level 2 allows schools to once again include Cuba as part of their exchange programs."], "subsections": []}, {"section_title": "U.S. Exports and Sanctions", "paragraphs": ["U.S. commercial medical exports to Cuba have been authorized since the early 1990s pursuant to the Cuban Democracy Act of 1992 (CDA), and commercial agricultural exports have been authorized since 2001 pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), but with numerous restrictions and licensing requirements. For medical exports to Cuba, the CDA requires on-site verification that the exported item is to be used for the purpose for which it was intended and only for the use and benefit of the Cuban people. TSRA allows for one-year export licenses for selling agricultural commodities to Cuba, although no U.S. government assistance, foreign assistance, export assistance, credits, or credit guarantees are available to finance such exports. TSRA also denies exporters access to U.S. private commercial financing or credit; all transactions must be conducted in cash in advance or with financing from third countries. The 2018 farm bill, P.L. 115-334 ( H.R. 2 ) permits funding for two U.S. agricultural export promotion programs\u2014the Market Access Program and the Foreign Market Development Cooperation Program\u2014for U.S. agricultural products in Cuba.", "Regulatory changes made to the CACR and EAR in 2015-2016 include several actions designed to facilitate commercial exports to Cuba:", "U.S. financial institutions are permitted to open correspondent accounts at Cuban financial institutions to facilitate the processing of authorized transactions. U.S. private export financing is permitted for all authorized export trade to Cuba, except for agricultural goods exported pursuant to TSRA. The definition of the term cash in advance for payment for U.S. exports to Cuba was revised to specify that it means cash before transfer of title . The change means that payment can occur before an export shipment is offloaded in Cuba rather than before the shipment leaves a U.S. port. Commercial exports to Cuba of certain goods and services to empower Cuba's nascent private sector are authorized, including for certain building materials for private residential construction, goods for use by private-sector Cuban entrepreneurs, and agricultural equipment for small farmers. Licenses for certain categories of exports are included under a \"general policy of approval.\" These categories include exports for civil aviation and commercial aircraft safety, telecommunications, U.S. news bureaus, human rights organizations and nongovernmental organizations, environmental protection of U.S. and international air quality, waters, and coastlines, and agricultural inputs (such as insecticides, pesticides, and herbicides) that fall outside the scope of those exports already allowed under TSRA. Licenses for exports that will be considered on a case-by-case basis include certain items exported to state-owned enterprises, agencies, and other organizations of the Cuban government that provide goods and services for the use and benefit of the Cuban people. In November 2017, however, the Commerce Department amended the EAR to stipulate that export licenses for exports to state-owned enterprises will generally be denied to export items for use by entities or subentities on the State Department's list of restricted entities associated with the Cuban military, police, intelligence, or security services. The commercial export of certain consumer communication devices, related software, applications, hardware, and services, and items for the establishment and update of communications-related systems is authorized; previously such exports were limited to donations. The export of items for telecommunications, including access to the internet, use of internet services, infrastructure creation, and upgrades, also is authorized. Companies exporting authorized goods to Cuba are authorized to have a physical presence in Cuba, such as an office, retail outlet, or warehouse. Persons subject to U.S. jurisdiction generally are authorized to enter into certain contingent contracts for transactions currently prohibited by the embargo. Certain consumer goods sold directly to eligible individuals in Cuba for their personal use generally are authorized.", "Cuba purchased about $6 billion in U.S. products from 2001 to 2018, largely agricultural products. For many of those years, the United States was Cuba's largest supplier of agricultural products. U.S. exports to Cuba rose from about $7 million in 2001 to a high of $712 million in 2008, far higher than in previous years. This increase was in part because of the rise in food prices and because of Cuba's increased food needs in the aftermath of several hurricanes and tropical storms that severely damaged the country's agricultural sector. U.S. exports to Cuba declined considerably from 2009 through 2011, rose again in 2012, and fell every year through 2015, when U.S. exports amounted to $180 million. Reversing that trend, U.S. exports to Cuba increased to $245 million in 2016 and $283 million in 2017. In 2018, U.S. exports to Cuba amounted to almost $276 million, about a 5% decrease from 2017. (See Figure 2 .)", "Looking at the composition of U.S. exports to Cuba from 2012 to 2018, the leading products were poultry, soybean oilcake and other solid residue, soybeans, corn, and soybean oil. Poultry has been the leading U.S. export to Cuba since 2012; in 2018, for example, it accounted for about 56% of U.S. exports. Beyond agricultural products, other categories of products that have increased over the past several years are parts for steam turbines, civilian aircraft engines and parts, pesticides, calcium phosphates, and electrical apparatus and parts for telephone lines. ", "U.S. International Trade Commission (USTIC) Reports. The USITC has issued three studies since 2007 examining the effects of U.S. restrictions on trade with Cuba, with its most recent report issued in April 2016. According to the findings of its 2016 report, U.S. restrictions on trade and travel reportedly have shut U.S. suppliers out of a market in which they could be competitive on price, quality, and proximity. The most problematic U.S. restrictions cited are the inability to offer credit, travel to or invest in Cuba, and use funds sourced and administered by the U.S. government. Cuban nontariff measures and other factors also may limit U.S. exports to and investment in Cuba if U.S. restrictions are lifted, according to the report. These factors include Cuban government control of trade and distribution, legal limits on foreign investment and property ownership, and politically motivated decisionmaking regarding trade and investment. Absent U.S. restrictions, U.S. exports in several sectors likely would increase somewhat in the short term, with prospects for larger increases in the longer term, subject to changes in Cuban policy and economic growth. U.S. exports could increase further if Cuban import barriers were lowered. If U.S. restrictions were removed, U.S. agricultural and manufactured exports to Cuba could increase to almost $1.8 billion annually; if both U.S. restrictions were removed and Cuban barriers were lowered, U.S. exports could approach $2.2 billion annually.", "Legislative Initiatives . To date in the 116 th Congress, two bills have been introduced related to restrictions on exports to Cuba. S. 428 (Klobuchar) would repeal certain provisions in the CDA, the LIBERTAD Act, and TSRA as well as regulatory provisions in the CACR and EAR that restrict trade with Cuba. H.R. 1898 (Crawford) would modify the prohibition on U.S. assistance and financing for certain exports to Cuba under TSRA."], "subsections": []}, {"section_title": "Democracy and Human Rights Funding", "paragraphs": ["Since 1996, the United States has provided assistance\u2014through the U.S. Agency for International Development (USAID), the State Department, and the National Endowment for Democracy (NED)\u2014to increase the flow of information on democracy, human rights, and free enterprise to Cuba. USAID and State Department efforts are funded largely through Economic Support Funds (ESF) in the annual foreign operations appropriations bill. From FY1996 to FY2019, Congress appropriated some $364 million in funding for Cuba democracy efforts. In recent years, this funding included $20 million in each fiscal year from FY2014 through FY2019. For FY2018, the Trump Administration, as part of its attempt to cut foreign assistance levels, did not request any democracy and human rights assistance funding for Cuba, but Congress ultimately provided $20 million. For FY2019, the Trump Administration requested $10 million to provide democracy and civil society assistance for Cuba, but Congress again provided $20 million.", "Although USAID received the majority of this funding for many years, the State Department began to receive a portion of the funding in FY2004 and in recent years has been allocated more funding than USAID. The State Department generally has transferred a portion of the Cuba assistance that it administers to NED. ", "USAID's Cuba program has supported a variety of U.S.-based nongovernmental organizations with the goals of promoting a rapid, peaceful transition to democracy, helping to develop civil society, and building solidarity with Cuba's human rights activists. ", "NED is not a U.S. government agency but an independent nongovernmental organization that receives U.S. government funding. Its Cuba program is funded by the organization's regular appropriations by Congress as well as by funding from the State Department. According to information provided by NED on its website, its Cuba funding from FY2014 through FY2017 amounted to $15.9 million.", "FY2019 Appropriations. For FY2019, the Trump Administration requested $10 million for democracy and civil society assistance in support of the Administration's Cuba policy. In the 115 th Congress, the House Appropriations Committee's State Department and Foreign Operations appropriations bill, H.R. 6385 ( H.Rept. 115-829 ), would have provided $30 million to promote democracy and strengthen civil society in Cuba, with not less than $8 million for the National Endowment for Democracy. The report to the bill would have prohibited the obligation of funds for business promotion, economic reform, entrepreneurship, or any other assistance that was not democracy-building. It also stipulated that grants exceeding $1 million, or grants to be implemented over a period of 12 months, would be awarded only to organizations with experience promoting democracy inside Cuba. The Senate Appropriations version of the bill, S. 3108 , would have provided $15 million for democracy programs in Cuba. Since the 115 th Congress did not complete action on FY2019 appropriations, the task was left to the 116 th Congress, which in February 2019, enacted the Consolidated Appropriations Act, 2019 ( P.L. 116-6 , H.J.Res. 31 , conference report H.Rept. 116-9 ), which ultimately provided $20 million for Cuba democracy funding.", "FY2020 Appropr i ations. For 2020, the Trump Administration has requested $6 million for Cuba democracy funding, which would be a 70% cut from the $20 million amount provided annually since FY2014. "], "subsections": []}, {"section_title": "Radio and TV Mart\u00ed109", "paragraphs": ["U.S.-government-sponsored radio and television broadcasting to Cuba\u2014Radio and TV Mart\u00ed\u2014began in 1985 and 1990, respectively. Until October 1999, U.S.-government-funded international broadcasting programs had been a primary function of the United States Information Agency (USIA). When USIA was abolished and its functions merged into the Department of State at the beginning of FY2000, the Broadcasting Board of Governors (BBG) became an independent agency that included such entities as the Voice of America, Radio Free Europe/Radio Liberty, Radio Free Asia, and the Office of Cuba Broadcasting (OCB). In August 2018, the BBG officially changed its name to the U.S. Agency for Global Media (USAGM). ", "Today, OCB, which has been headquartered in Miami, FL, since 1998, manages Radio and TV Mart\u00ed and the Mart\u00ednoticiaas.com website and its social media platforms on YouTube, Google, and Facebook. According to the BBG's 2019 Congressional Budget Justification , the Mart\u00eds reach 11.1% of Cubans on a weekly basis with audio, video, and digital content delivered by radio, satellite TV, online, and on distinctly Cuban digital \"packages\" ( paquetes ). The largest audiences reportedly are for Radio Mart\u00ed and TV Mart\u00ed, with weekly audiences respectively reaching 8% and 6.8% of Cubans, while online content reaches a smaller audience of 5.3%. OCB also administers a shortwave transmitting station in Greenville, NC. Additional newer transmitters at Greenville reportedly have helped increase Radio Mart\u00ed's presence in Cuba, and the increase in the number of frequencies has made it harder for the Cuban government to interfere with the radio broadcasts.", "Funding. From FY1984 through FY2019, Congress appropriated about $911 million for broadcasting to Cuba. In recent years, funding has amounted to some $27-$29 million in each fiscal year from FY2014 to FY2019. For FY2018, Congress provided $28.936 million for Cuba broadcasting, $5.28 million more than requested, in the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ; explanatory statement, Division K). For FY2019, the Trump Administration requested $13.656 million for the OCB, $15.3 million less than the amount provided in FY2017. The rationale for the proposed cut was to find efficiencies between OCB and the Voice of America's Latin American division. Congress ultimately took final action on FY2019 appropriations in February 2019 by enacting the Consolidated Appropriations Act, 2019 ( P.L. 116-6 , H.J.Res. 31 , conference report H.Rept. 116-9 ) that provided $29.1 million for Cuba broadcasting.", "Concerns About TV Mart\u00ed Program in 2018. In October 2018, media reports highlighted a disturbing TV Mart\u00ed program originally aired in May 2018 (which remained on Radio and Television Mart\u00ed's website) that referred to U.S. businessman and philanthropist George Soros as \"the multimillionaire Jew of Hungarian origin\" and as a \"non-believing Jew of flexible morals.\" The program espoused a number of conspiracy theories about Soros, including that he was the architect of the 2008 financial crisis. Then-Senator Jeff Flake spoke out against the TV Mart\u00ed program, which he referred to as \"taxpayer-funded anti-Semitism.\" He sent a letter to John Lansing, chief executive officer (CEO) of the USAGM, asking for an investigation into the program, including its evolution from initial inception to final approval, who produced the program, and what review process was in place to ensure it met VOA journalistic standards. Flake also called for those approving anti-Semitic content to be removed from their positions immediately, asserting that \"lack of action on this matter will further denigrate the United States as a credible voice overseas, the repercussion of which will be severe.\"", "OCB Director Tom\u00e1s Regalado responded by pulling the original program and related shorter segments from the OCB's online website and acknowledging that the program \"did not have the required balance.\" USAGM's CEO Lansing took further action by issuing a statement that the program about Soros \"is inconsistent with our professional standards and ethics.\" He stated that those deemed responsible for the production would be immediately placed on administrative leave pending an investigation into their apparent misconduct. Lansing also directed \"an immediate, full content audit to identify any patterns of unethical reporting at the network\" and asked Regalado to \"require ethics and standards refresher training for all OCB journalists. \" ", "Lansing wrote a letter of apology to Soros in November 2018 in which he said that the program \"was based on extremely poor and unprofessional journalism,\" and \"was utterly offensive in its anti-Semitism and clear bias.\" Lansing also stated in the letter that he had instructed OCB Director Regalado \"to remove the offensive story from the TV Mart\u00ed website and social media\" and \"to hire a full time 'standards and practices' editor to oversee all outgoing content with strict adherence to the highest professional standards of journalism.\" The audit of reporting at the network reportedly uncovered an earlier story about Soros that included anti-Semitic language as well as an anti-Muslim opinion piece published in September 2018, that were also removed from the website. ", "At the end of February 2019, Lansing reported that one employee and three contractors had been terminated because of the anti-Semitic video segment, and that the agency had initiated the standard disciplinary process for four additional OCB employees. Lansing stated that USAGM commissioned a team of independent experts to conduct an objective third-party-audit of OCB's coverage in Spanish across all platform. He said that a final report is expected in three months and would be made public.", "The TV Mart\u00ed program raised significant concerns about the OCB's adherence to broadcast standards and questions about the program's intended audience. TV Mart\u00ed's authorizing legislation, the Television Broadcasting to Cuba Act ( P.L. 101-246 , Title II, Part D, 22 U.S.C. 1465bb ) has a provision stating that television broadcasting to Cuba \"shall be in accordance with all Voice of America standards to ensure the broadcast of programs which are objective, accurate, balanced, and which present a variety of views.\" ", "U.S. law sets forth the following principles for VOA broadcasts: (1) VOA will serve as a consistently reliable and authoritative source of news. VOA news will be accurate, objective, and comprehensive; (2) VOA will represent America, not any single segment of American society, and will therefore present a balanced and comprehensive projection of significant American thought and institutions; and (3) VOA will present the polices of the United States clearly and effectively and also will present responsible discussion and opinion on these policies. These VOA principles and broader U.S. international broadcasting standards and principles are set forth in 22 U.S.C. 6202 ( P.L. 103-236 , Title III, Section 303, and P.L. 103-415 )."], "subsections": []}, {"section_title": "U.S. Response to Health Injuries of U.S. Personnel in Havana", "paragraphs": ["As noted above, the State Department reported that 26 members of the U.S. diplomatic community in Havana suffered a series of unexplained health injuries, including hearing loss and cognitive issues, from November 2016 to May 2018. Twenty-four of the cases occurred from November 2016 to August 2017, and in June 2018, two new cases stemming from occurrences in May 2018 were confirmed after medical evaluations. According to the State Department, the U.S. government personnel suffered from \"attacks of an unknown nature,\" at U.S. diplomatic residences and hotels where temporary duty staff were staying, with symptoms including \"ear complaints, hearing loss, dizziness, headache, fatigue, cognitive issues, and difficulty sleeping.\" U.S. officials maintain that they do not know the mechanism used to cause the health injuries, the source, who is responsible, or the motive behind the alleged \"attacks.\"", "In response to the health incidents, in September 2017, the U.S. Department of State ordered the departure of nonemergency personnel assigned to the U.S. Embassy in Havana, as well as their families, to minimize the risk of their exposure to harm. As a result, the embassy's U.S. staffing level, which numbered over 50, was reduced by about two-thirds. In March 2018, the State Department began a permanent staffing plan at the U.S. Embassy in Havana, operating it as an \"unaccompanied post\" without family members. The change took place because the temporary \"ordered departure\" status for the embassy had reached its maximum allowable days. According to the State Department, \"the embassy will continue to operate with the minimum personnel necessary to perform core diplomatic and consular functions, similar to the level of emergency staffing maintained during ordered departure.\" ", "The staff reduction at the U.S. Embassy in Havana has had implications for bilateral relations. Most visa processing at the U.S. Embassy in Havana has been suspended. Most Cubans applying for nonimmigrant visas must go to a U.S. embassy or consulate in another country, and applications and interviews for immigrant visas are currently being handled at the U.S. Embassy in Georgetown, Guyana. (For additional information, see \" Migration Issues \" below.)", "In addition to downsizing U.S. Embassy Havana operations, in October 2017, the State Department ordered the departure of 15 Cuban diplomats from the Cuban Embassy in Washington, DC. According to then-Secretary of State Rex Tillerson, the decision was made because of Cuba's failure to protect U.S. diplomats in Havana and to ensure equity in the impact on respective diplomatic operations. State Department officials maintained that the United States would need full assurances from the Cuban government that the \"attacks\" will not continue before contemplating the return of diplomatic personnel.", "The State Department initially issued a travel warning in September 2017 advising U.S. citizens to avoid travel to Cuba because of the potential risk of being subject to injury; in January 2018, when the State Department revamped its travel advisory system, it set the advisory for Cuba at Level 3, recommending that travelers reconsider travel to Cuba. By August 2018, however, the State Department eased its travel advisory to Level 2, recommending that travelers exercise increased caution. ", "In May 2018, the State Department announced that a U.S. government employee serving in Guangzhou, China, experienced a health incident similar to that experienced by members of the U.S. diplomatic community in Havana. In response, Secretary of State Pompeo announced the establishment of a multiagency Health Incidents Response Task Force to serve as a coordinating body for State Department and interagency activities, including identification and treatment of affected personnel and family members abroad, investigation and risk mitigation, messaging, and diplomatic outreach.", "Since 2017, 14 Canadians diplomats and their family members in Havana also have experienced similar health symptoms such as dizziness, headaches, nausea, and difficulty concentrating, with the most recent case confirmed in January 2019 after medical testing. In April 2018, the Canadian government changed the designation of its embassy in Havana to an \"unaccompanied post,\" similar to the status of the U.S. embassy, and in January 2019, the government announced that it would reduce by half its diplomatic staff in Havana.", "Cause of the Health Incidents Unknown. When the incidents were first made public by the State Department in August 2017, numerous press reports referred to them as being caused by some type of sonic device. Yet scientists and experts in acoustics have cast doubt on this possibility, arguing that the laws of physics render it unlikely that the use of ultrasound, which they see as the most plausible type of acoustic employed, could be effectively used to harm personnel. They add that some of the reported symptoms individuals have encountered would not have resulted from the use of such a device. Some point to other possible scenarios, such as personnel coming into contact with toxins that damage hearing, or even the spread of anxiety or other psychogenic contributors capable of triggering symptoms. Some scientists assert that data regarding the potential effects of an ultrasound weapon on human health is currently slim. ", "An article in the Journal of the American Medical Association ( JAMA ), published in February 2018, reported that University of Pennsylvania physicians who evaluated individuals from the U.S. Embassy community in Havana maintained that the individuals \"appeared to have sustained injury to widespread brain networks without an associated history of head trauma.\" The study, however, found no conclusive evidence of the cause of the brain injuries. An accompanying editorial in JAMA cautioned about drawing conclusions from the study, noting that the evaluations were conducted an average of 203 days after the onset of the symptoms and that it was unclear whether individuals who developed symptoms were aware of earlier reports by others. In August 2018, JAMA published several letters that raised additional questions concerning the February 2018 study, including one that asserted mass psychogenic illness could not be discounted; the study's authors, however, pushed back against the criticism, maintaining that a complex constellation of neurological symptoms was consistent across the cohort that was studied.", "A March 2018 University of Michigan report by three computer scientists concluded that the sounds recorded in Cuba could have been caused by two eavesdropping devices placed in close proximity to each other. The study concluded that the sounds could have been inadvertently produced without malicious intent. ", "In December 2018, a group of doctors from the University of Miami and the University of Pittsburgh published a study maintaining that those diplomats exhibiting symptoms suffered from ear damage as opposed to brain injury. ", "In January 2019, a group of biologists from the University of California Berkeley and the U.K's University of Lincoln issued a study on a recording of the alleged sounds heard by some U.S. Embassy employees that had been released by the Associated Press in October 2017. The study maintains that the sound matched the echoing call of a Caribbean cricket.", "Even though the cause of the health injuries to U.S. personnel in Cuba is unknown, there has been widespread speculation regarding potential responsibility. These include such possibilities as a rogue faction of Cuba's security services or a third country, such as Russia, with the apparent motivation of wanting to disrupt U.S.-Cuban relations. Some maintain that Cuba's strong security apparatus makes it unlikely that a third country would be involved without the Cuban government's acquiescence. Others stress that there has been no evidence implicating a third country and that it would be highly unusual for a rogue Cuban security faction to operate contrary to the interests of the Cuban government.", "Cuba's Response. The Cuban government denies responsibility for the injuries of U.S. personnel, maintaining that it would never allow its territory to be used for any action against accredited diplomats or their families. In the aftermath of the order expelling its diplomats, Cuba's Ministry of Foreign Affairs issued a statement strongly protesting the U.S. action, asserting that it was motivated by politics and arguing that ongoing investigations have reached no conclusion regarding the incidents or the causes of the health problems. The statement noted that Cuba had permitted U.S. investigators to visit Cuba and reiterated the government's willingness to continue cooperating on the issue. ", "In September 2018, a delegation of Cuban scientists visited the United States to have meetings with the State Department, the National Academy of Sciences, and on Capitol Hill. The director of the Cuban Neuroscience Center, Dr. Mitchell Joseph Vald\u00e9s-Sosa, maintains that there could be various reasons why the diplomats became sick (such as hypertension, stress, other preexisting conditions, and psychogenesis) but that Cuban scientists have not seen any credible evidence that some type of high-tech weapon was used. The Cuban delegation expressed disappointment that U.S. officials have not shared more medical and clinical data on the illnesses experienced by the U.S. diplomats. In November 2018, Dr. Vald\u00e9s-Sosa coauthored a letter in Science magazine with a professor from the University of Pennsylvania's Department of Bioengineering maintaining that some \"scientists have allowed speculation about the causes of these health issue to outpace the evidence\" and that \"there is insufficient evidence to guess about the cause of the sounds.\" "], "subsections": []}, {"section_title": "Migration Issues145", "paragraphs": ["In January 2017, the Obama Administration ended the so-called \"wet foot/dry foot\" policy under which thousands of undocumented Cuban migrants entered the United States since the mid-1990s. Under that policy, Cuban migrants interdicted at sea generally were returned to Cuba whereas those reaching U.S. land were allowed entrance into the United States and generally permitted to stay. Under the new policy, Cuban nationals who attempt to enter the United States illegally and do not qualify for humanitarian relief are now subject to removal. The Cuban government agreed to begin accepting the return of Cuban migrants who have been ordered removed. President Trump's NSPM on Cuba stated that the Administration would not reinstate the \"wet foot/dry foot\" policy, maintaining that the policy had \"encouraged untold thousands of Cuban nationals to risk their lives to travel unlawfully to the United States.\"", "Background on the 1994 and 1995 Migration Accords . Cuba and the United States reached two migration accords in 1994 and 1995 designed to stem the mass exodus of Cubans attempting to reach the United States by boat. On the minds of U.S. policymakers was the 1980 Mariel boatlift, in which 125,000 Cubans fled to the United States with the approval of Cuban officials. In response to Fidel Castro's threat to unleash another Mariel, U.S. officials reiterated U.S. resolve not to allow another exodus. Amid escalating numbers of fleeing Cubans, in August 1994, President Clinton abruptly changed U.S. immigration policy, under which Cubans attempting to flee their homeland were allowed into the United States; he announced that the U.S. Coast Guard and Navy would take Cubans rescued at sea to the U.S. Naval Station at Guantanamo Bay, Cuba. Despite the change in policy, Cubans continued to flee in large numbers.", "As a result, in early September 1994, Cuba and the United States began talks that culminated in a bilateral agreement to stem the flow of Cubans fleeing to the United States by boat. In the agreement, the United States and Cuba agreed to facilitate safe, legal, and orderly Cuban migration to the United States, consistent with a 1984 migration agreement. The United States agreed to ensure that total legal Cuban migration to the United States would be a minimum of 20,000 each year, not including immediate relatives of U.S. citizens. ", "In May 1995, the United States reached another accord with Cuba under which the United States would parole the more than 30,000 Cubans housed at Guantanamo into the United States but would intercept future Cuban migrants attempting to enter the United States by sea and return them to Cuba. In January 1996, the Department of Defense announced that the last of some 32,000 Cubans intercepted at sea and housed at Guantanamo had left the U.S. naval station, most having been paroled into the United States.", "Maritime Interdictions. Since the 1995 migration accord, the U.S. Coast Guard has interdicted thousands of Cubans at sea and returned them to their country. Until the change in U.S. policy toward Cuban migrants in January 2017, those Cubans who reached the U.S. shore were allowed to apply for permanent resident status in one year, pursuant to the Cuban Adjustment Act of 1966 (P.L. 89-732). In short, under the wet foot/dry foot policy, most interdictions resulted in a return to Cuba, even those in U.S. coastal waters, whereas those Cubans who touched shore were allowed to stay in the United States. Some had criticized this policy as encouraging Cubans to risk their lives to make it to the United States and as encouraging alien smuggling. ", "Over the years, the number of Cubans interdicted at sea by the U.S. Coast Guard has fluctuated annually, influenced by several factors, including the economic situations in Cuba and the United States. From FY2010 through FY2016, the number of Cubans interdicted by the Coast Guard increased each year, from 422 in FY2010 to an all-time high of 5,230 in FY2016. The increase in the flow of maritime migrants in 2015 and 2016 was driven by concerns among Cubans that the favorable treatment granted to Cuban migrants would end. With the change in U.S. immigration policy toward Cuba in January 2017, the number of Cubans interdicted by the Coast Guard dropped to a trickle. For FY2017, the Coast Guard interdicted 2,109 Cubans, with the majority of these interdictions occurring before the policy change, and for FY2018, the Coast Guard interdicted 384 Cubans at sea. (See Figure 3 .)", "Arrival of Undocumented Cuban Migrants. Beginning around FY2013, according to the State Department, undocumented Cuban migrants began to favor land-based routes to enter the United States, especially via U.S. ports of entry from Mexico. Since that time and until the change in U.S. immigration policy in January 2017, the number of undocumented Cubans entering by land increased significantly, with a majority entering through the Southwest border. According to statistics from the Department of Homeland Security, the number of undocumented Cubans entering the United States both at U.S. ports of entry and between ports of entry rose from almost 8,170 in FY2010 to a high of 58,269 in FY2016. In FY2017, that number declined to 20,955, with the majority entering before the change in U.S. immigration policy. In FY2018, as of August 21, 2018, 6,044 undocumented Cubans arrived in the United States at or between ports of entry, about a 70% decline from FY2017.", "Cuban Medical Professional Parole Program. In January 2017, at the same time that it ended the \"wet foot/dry foot policy,\" the Obama Administration announced that it was ending the special Cuban Medical Professional Parole (CMPP) program. Established in 2006 and administered by U.S. Citizenship and Immigration Services (USCIS) of the Department of Homeland Security (DHS), the CMPP program allowed Cuban medical professionals in third countries to be approved for entry into the United States. The program reportedly benefitted more than 8,000 Cuban medical professionals who defected from Cuba's medical missions in third countries.", "Some Members of Congress have called on the Trump Administration to reestablish the CMPP program. In the 116 th Congress, two resolutions, S.Res. 14 (Menendez) and H.Res. 136 (Sires), would express the sense of the Senate and House, respectively, that the CMPP program should be reestablished. They also call on the State Department to downgrade Cuba to Tier 3 status in its annual Trafficking in Persons (TIP) Report because of its treatment of Cuban medical professionals in the country's foreign medical missions and because the Cuban government has not criminalized most forms of forced labor. ", "In its 2018 TIP report, the State Department included mixed information on the CMPP program. It noted that some participants in Cuba's foreign medical missions alleged that Cuban officials forced or coerced participation in the program, and that some observers alleged that Cuban authorities coerced some participants to remain in the program through various tactics, including the withholding of passports. On the other hand, the report also noted that the Cuban government and some of the program's participants maintained that postings were voluntary and well paid compared to jobs within Cuba. (Also see discussion of trafficking in persons in the \" Human Rights \" section above.)", "Effect of Downsizing of U.S. E mbassy . As noted above, most visa processing at the U.S. Embassy in Havana was suspended because of the U.S. Embassy staff reduction in 2017. USCIS suspended operations at its field office at the embassy in 2017, and then permanently closed its offices in Havana in December 2018. Most Cubans applying for nonimmigrant visas must go to a U.S. embassy or consulate in another country, and all applications and interviews for immigrant visas are currently being handled at the U.S. Embassy in Georgetown, Guyana. ", "The suspension of most nonimmigrant visa processing in Havana has made it more difficult and expensive for Cubans visiting family in the United States and for Cuban cuentapropistas (private sector workers) traveling to the United States to bring back inputs for their businesses. In 2013, the United States had begun granting multiple entry visas, good for five years, for Cubans visiting the United States. As those visas expire, Cubans will need to travel to a third country to request a new visa if they want to visit the United States. ", "In addition, the State Department announced that as of March 18, 2019, it would no longer issue multiple entry B2 visas (for tourism, family visit medical treatment, and similar travel purposes) for Cuban nationals, but instead would only issue single entry B2 visas for a stay of two months, with the possibility of a 30-day extension. The action will likely have a significant effect on family travel from Cuba and those traveling from Cuba to support their private sector businesses, and could also negatively affect U.S.-Cuban academic, cultural, and civil society engagement.", "The embassy staff reduction has negatively affected the United States' ability to meet its commitment under the 1994 bilateral migration accord to issue travel documents for 20,000 Cubans annually (not including immediate relatives). While the United States met its commitment in FY2017, the State Department issued travel documents for just 4,060 Cubans in FY2018 in categories under the migration accord. In past years, around 75% of the immigrant travel documents issued annually for Cuban nationals pursuant to the 1994 accord were issued under the Cuban Family Reunification Parole Program (CFRP), a program established in 2007 by USCIS to help the United States meet its annual obligation of travel documents. Since the embassy staff reduction, information posted on the website of the U.S. Embassy in Havana has stated that the State Department and DHS are determining arrangements for processing applications under the CFRP. "], "subsections": []}, {"section_title": "Antidrug Cooperation", "paragraphs": ["Cuba is not a major producer or consumer of illicit drugs, but its location and extensive shoreline make it susceptible to narcotics-smuggling operations. Drugs that enter the Cuban market are largely the result of onshore wash-ups from smuggling by high-speed boats moving drugs from Jamaica to the Bahamas, Haiti, and the United States, or by small aircraft from clandestine airfields in Jamaica. For a number of years, Cuban officials have expressed concerns about the use of their waters and airspace for drug transit and about increased domestic drug use. The Cuban government has taken a number of measures to deal with the drug problem, including legislation to stiffen penalties for traffickers, increased training for counternarcotics personnel, and cooperation with a number of countries on antidrug efforts. Since 1999, Cuba's Operation Hatchet has focused on maritime and air interdiction and the recovery of narcotics washed up on Cuban shores. Since 2003, Cuba has aggressively pursued an internal enforcement and investigation program against its incipient drug market with an effective nationwide drug prevention and awareness campaign.", "Over the years, there have been varying levels of U.S.-Cuban cooperation on antidrug efforts. In 1996, Cuban authorities cooperated with the United States in the seizure of almost six metric tons of cocaine aboard the Miami-bound Limerick , a Honduran-flag ship. Cuba turned over the cocaine to the United States and cooperated fully in the investigation and subsequent prosecution of two defendants in the case in the United States. Cooperation has increased since 1999, when U.S. and Cuban officials met in Havana to discuss ways of improving antidrug cooperation. Cuba accepted an upgrading of the communications link between the Cuban Border Guard and the U.S. Coast Guard as well as the stationing of a U.S. Coast Guard drug interdiction specialist at the U.S. Interests Section in Havana. The Coast Guard official was posted to the U.S. Interests Section in September 2000.", "Since the reestablishment of diplomatic relations with Cuba in 2015, U.S. antidrug cooperation has increased further, with several dialogues and exchanges on counternarcotics issues. In December 2015, U.S. and Cuban officials held talks at the headquarters of the Drug Enforcement Administration (DEA) in Washington, DC, with delegations discussing ways to stop the illegal flow of narcotics and exploring ways to cooperate on the issue. In April 2016, Cuban security officials toured the U.S. Joint Interagency Task Force South (JIATF-South) based in Key West, FL. JIATF-South has responsibility for detecting and monitoring illicit drug trafficking in the region and for facilitating international and interagency interdiction efforts. At a July 2016 dialogue in Havana with U.S. officials from the State Department, DEA, the U.S. Coast Guard, and Immigration and Customs Enforcement/Homeland Security Investigations, Cuba and the United States signed a counternarcotics arrangement to facilitate cooperation and information sharing. Technical exchanges between the U.S. Coast Guard and Cuba's Border Guard on antidrug efforts and other areas of cooperation occur periodically. ", "According to the State Department's 2019 International Narcotics Control Strategy Report (INCSR), issued in March 2019, Cuba has 40 bilateral agreements for antidrug cooperation with countries worldwide, including the 2016 U.S.-Cuban agreement noted above. The report also stated that Cuban authorities and the U.S. Coast Guard share tactical information related to vessels transiting through Cuban territorial waters suspected of trafficking and coordinate responses. In addition, as noted in the report, direct communications were established in July 2016 between the U.S. DEA and Cuban counterparts within the Ministry of Interior's National Anti-Drug Directorate. Since then, according to the INCSR, the DEA has received approximately 20 requests for information related to drug investigations in addition to cooperation leading to Cuba's arrest of a fugitive wanted in the United States. More broadly, the INCSR reports that Cuba has provided assistance to U.S. state and federal prosecutions by providing evidence and information, and has demonstrated a willingness to cooperate on law enforcement matters. The report noted that the United States and Cuba continue to hold bilateral discussion on law enforcement and drug control cooperation."], "subsections": []}, {"section_title": "Property Claims and Title III of the LIBERTAD Act", "paragraphs": ["An important issue in the process of normalizing relations is Cuba's compensation for the expropriation of thousands of properties of U.S. companies and citizens in Cuba dating back to the 1960s. The Foreign Claim Settlement Commission (FCSC), an independent agency within the Department of Justice, has certified 5,913 claims for expropriated U.S. properties in Cuba valued at $1.9 billion in two different claims programs; with accrued interest, the properties' value would be some $8 billion. In 1972, the FCSC certified 5,911 claims of U.S. citizens and companies that had their property confiscated by the Cuban government through April 1967, with 30 U.S. companies accounting for almost 60% of the claims. In 2006, the FCSC certified two additional claims in a second claims program covering property confiscated after April 1967. Many of the companies that originally filed claims have been bought and sold numerous times. There are a variety of potential alternatives for restitution or compensation schemes to resolve the outstanding claims, but resolving the issue likely would entail considerable negotiation and cooperation between the two governments. ", "Although Cuba has maintained that it would negotiate compensation for the U.S. claims, it does not recognize the FCSC valuation of the claims or accrued interest. Instead, Cuba has emphasized using declared taxable value as an appraisal basis for expropriated U.S. properties, which would amount to almost $1 billion, instead of the $1.9 billion certified by the FCSC. Moreover, Cuba generally has maintained that any negotiation should consider losses that Cuba has accrued from U.S. economic sanctions. Cuba estimates cumulative damages of the U.S. embargo at $134.5 billion in current prices as of 2018.", "U.S. and Cuban officials held three meetings on claims issues between December 2015 and January 2017. The first meeting took place in December 2015 in Havana, with talks including discussions of the FCSC-certified claims of U.S. nationals, claims related to unsatisfied U.S. court judgments against Cuba (reportedly 10 U.S. state and federal judgments totaling about $2 billion), and some claims of the U.S. government. The Cuban delegation raised the issue of claims against the United States related to the U.S. embargo. A second claims meeting was held in July 2016, in Washington, DC. According to the State Department, the talks allowed for an exchange of views on historical claims-settlement practices and processes going forward. A third claims meeting was held in Havana in January 2017. ", "As noted above, Title III of the LIBERTAD Act holds any person or government that traffics in property confiscated by the Cuban government liable for monetary damages in U.S. federal court. Until January 2019, pursuant to provisions of the law, all Administrations have suspended the right to file law suits at six-month intervals. For the suspension, the President (since 2013, the Secretary of State) must determine that it is necessary to the national interests of the United States and will expedite a transition to democracy in Cuba. In June 2018, Secretary of State Pompeo made a determination effective from August 1, 2018, through January 2019. On January, 16, 2019, however, Secretary Pompeo issued another determination suspending the right to file lawsuits for only an additional 45 days (as opposed to six months, as provided in the law), maintaining that the extension would permit a careful review that would include such factors as \"the Cuban regime's brutal oppression of human rights and fundamental freedoms and its indefensible support for increasingly authoritarian and corrupt regimes in Venezuela and Nicaragua.\" ", "Then, on March 4, 2019, Secretary Pompeo partially suspended the right to file lawsuits for an additional 30 days (through April 17) but allowed lawsuits, beginning March 19, against an entity or subentity on the State Department's \"Cuba Restricted List\" controlled by the Cuban military, intelligence, or security service. In its announcement, the State Department stated that they would continue to study the impact of the suspension on the human rights situation in Cuba. Lawsuits can be brought by any U.S. national, including those who were not U.S. nationals at the time of the confiscation. However, lawsuits may not be brought against third-country foreign investors in Cuba. State Department officials acknowledged that they engaged with allies in the European Union, Canada, and elsewhere, and that these countries' concerns were a factor in Secretary Pompeo's decision-making process. At this juncture, it is unclear how many lawsuits will go forward against entities on the \"Cuba Restricted List.\" ", "Looking ahead, some in the U.S. business community and foreign companies abroad that have invested in Cuba have concerns about the potential for Title III being fully implemented in the future. When the LIBERTAD Act was enacted in 1996, the intent of Title III was to prevent foreign investment in properties confiscated by the Cuban government. However, since some U.S. companies have entered into transactions or investment projects with Cuban companies in recent years as a result of the U.S. engagement process with Cuba, some could be susceptible to legal action if the Administration did not continue to suspend the right to file lawsuits. Fully lifting the suspension of the right to file lawsuits under Title III could have a significant effect on foreign companies conducting business in Cuba because of the potential risk emanating from such lawsuits. When the LIBERTAD Act was passed in 1996, several foreign governments strongly objected, and some (Canada, EU, and Mexico) enacted countermeasures to block enforcement of the U.S. sanctions. The EU also could revive a WTO dispute against the LIBERTAD Act, which it suspended in 1998 when it reached an understanding on the issue with the United States that included the presumption of continued suspension of Title III.", "Some observers also have expressed concerns about U.S. federal courts being flooded with lawsuits if Title III were fully allowed to be implemented. In addition to the claims of thousands of certified U.S. claimants, a 1996 report to Congress by the State Department required by the LIBERTAD Act estimated that there could be some 75,000 to 200,000 claims by Cuban Americans with the value running into the tens of billions of dollars. As defined in the LIBERTAD Act, however, the term trafficking does not include \"transactions and uses of property incident to lawful travel to Cuba,\" the term property does not include \"real property used for residential purposes\" (unless the claim is a certified claim held by a U.S national), and there is a $50,000 threshold for the amount in controversy for the right to file a lawsuit under Title III."], "subsections": []}, {"section_title": "U.S. Fugitives from Justice", "paragraphs": ["An issue that had been mentioned for many years in the State Department's annual terrorism report was Cuba's harboring of fugitives wanted in the United States. The most recent mention of the issue was in the 2014 terrorism report (issued in April 2015), which stated that Cuba \"does continue to harbor fugitives wanted to stand trial or to serve sentences in the United States for committing serious violations of U.S. criminal laws, and provides some of these individuals limited support, such as housing, food ration books, and medical care.\" With the resumption of diplomatic relations with Cuba, the United States have held several law enforcement dialogues that reportedly have included discussion of the issue of fugitives from justice. ", "U.S. fugitives from justice in Cuba include convicted murderers and numerous hijackers, most of whom entered Cuba in the 1970s and early 1980s. For example, Joanne Chesimard, also known as Assata Shakur, was added to the Federal Bureau of Investigation's (FBI's) Most Wanted Terrorist list in May 2013. Chesimard was part of militant group known as the Black Liberation Army. In 1977, she was convicted for the 1973 murder of a New Jersey State Police officer and sentenced to life in prison. Chesimard escaped from prison in 1979 and, according to the FBI, lived underground before fleeing to Cuba in 1984. Another fugitive, William \"Guillermo\" Morales, who was a member of the Puerto Rican militant group known as the Armed Forces of National Liberation, reportedly has been in Cuba since 1988 after being imprisoned in Mexico for several years. In 1978, both of his hands were maimed by a bomb he was making. He was convicted in New York on weapons charges in 1979 and sentenced to 10 years in prison and 5 years' probation, but he escaped from prison the same year. In addition to Chesimard and other fugitives from the past, a number of U.S. fugitives from justice wanted for Medicare and other types of insurance fraud have fled to Cuba in recent years. ", "Although the United States and Cuba have an extradition treaty in place dating to 1905, in practice the treaty has not been used. Instead, for more than a decade, Cuba has returned wanted fugitives to the United States on a case-by-case basis. For example, in 2011, U.S. Marshals picked up a husband and wife in Cuba who were wanted for a 2010 murder in New Jersey, and in April 2013, Cuba returned a Florida couple who allegedly had kidnapped their own children (who were in the custody of the mother's parents) and fled to Havana. In August 2018, Cuba arrested and returned to the United States a long-sought U.S. fugitive from justice wanted in connection with ecoterrorism who had stopped in Cuba on his way to Russia. In November 2018, Cuba returned to the United States a New Jersey man wanted on murder charges. In another case demonstrating U.S.-Cuban law enforcement cooperation, Cuba successfully prosecuted a Cuban national in February 2018 who had fled to Cuba after murdering a doctor in Florida in 2015\u2014the main witness was a Palm Beach detective. ", "Cuba generally, however, has refused to render to U.S. justice any fugitive judged by Cuba to be \"political,\" such as Chesimard, who they believe could not receive a fair trial in the United States. Moreover, in the past Cuba has responded to U.S. extradition requests by stating that approval would be contingent upon the United States returning wanted Cuban criminals from the United States. ", "In the 116 th Congress, H.Res. 92 (King) would call for the immediate extradition or rendering to the United States of convicted felons William Morales, Joanne Chesimard, and all other fugitives from justice who are receiving safe harbor in Cuba in order to escape prosecution or confinement for criminal offenses committed in the United States"], "subsections": []}]}, {"section_title": "Outlook", "paragraphs": ["When Miguel D\u00edaz-Canel succeeded Ra\u00fal Castro as president in April 2018, a leader from a new generation came to power\u2014D\u00edaz-Canel is 58 years old. Nevertheless, Ra\u00fal Castro, currently 87 years old, is continuing as first secretary of Cuba's Communist Party until 2021, and he headed the commission that drafted Cuba's new constitution approved by a public referendum in February 2019. Although the new constitution locks in some market-oriented economic reforms that have been introduced in recent years (private property, private sector, and foreign investment), it also ensures the state sector's dominance over the economy and the predominate role of the Communist Party in Cuba's political system. In late 2018, D\u00edaz-Canel took actions that appeared to demonstrate his independence from the previous Castro government and his responsiveness to public concerns, but his government faces a difficult economic outlook, one that could become bleaker if oil supplies from Venezuela are cut. Looking ahead, President D\u00edaz-Canel faces two major challenges\u2014moving forward with economic reforms that produce results and responding to desires for greater freedom. ", "President Trump's partial rollback of the Obama engagement policy and the introduction of new economic sanctions has limited opportunities for U.S. business engagement in Cuba and increased tensions in bilateral relations. The U.S. decision to downsize the diplomatic staff of the U.S. Embassy in Havana in response to unexplained injuries to U.S. diplomatic personnel in Cuba resulted in the suspension of most visa processing at the embassy and reduced other embassy operations, which has made bilateral engagement and existing areas of government-to-government cooperation more difficult. The Administration's decision in March 2019 to partially implement Title III of the LIBERTAD Act along with its use of strong Cold War-era political rhetoric toward Cuba has provoked a change in Cuba's own political rhetoric toward the United States. The current outlook for positive government-to-government engagement appears dim.", "Just as there were diverse opinions in the 115 th Congress over U.S. policy toward Cuba, debate over Cuba policy is likely to continue in the 116 th Congress, especially with regard to U.S. economic sanctions. The human rights situation likely will remain a key concern in the future, although there are diverse views regarding the best approach to influence the Cuban government.", "Appendix A. Legislative Initiatives in the 116 th \u00a0Congress", "Enacted Measures", "P.L. 116-6 ( H.J.Res. 31 ). Consolidated Appropriations Act, 2019. Introduced January 22, 2019. House passed (231-180) January 24; Senate passed, amended, by voice vote January 25. Conference report ( H.Rept. 116-9 ) filed February 13, 2019. House approved conference (300-128) February 14; Senate approved conference (83-16) February 14. Signed into law February 15, 2019. The conference report provided $20 million in Cuba democracy assistance ($10 million more than requested) and $29.1 million for Cuba broadcasting ($15.4 million more than requested). In Division F (State, Foreign Operations, and Related Programs), the measure continues two longstanding Cuba provisions: Section 7007 prohibits direct funding for the government of Cuba, including direct loans, credits, insurance, and guarantees of the Export-Import Bank or its agents; Section 7015(f) prohibits the obligation or expending of assistance for Cuba except through the regular notification procedures of the Committees on Appropriations.", "Bills", "H.R. 213 (Serrano). Baseball Diplomacy Act. The bill would waive certain prohibitions with respect to nationals of Cuba coming to the United States to play organized professional baseball. Introduced January 3, 2019; referred to the Committee on Foreign Affairs, and in addition to the Committee on the Judiciary.", "H.R. 1898 (Crawford). The bill would modify the prohibition on U.S. assistance and financing for certain exports to Cuba under TSRA. Introduced March 27, 2019; referred to the Committee on Foreign Affairs and in additional to the Committees on Financial Services and Agriculture.", "S. 428 (Klobuchar). Freedom to Export to Cuba Act of 2019. The bill would repeal or amend many provisions of law restricting trade and other relations with Cuba, including certain restrictions in the CDA, the LIBERTAD Act, and TSRA. Introduced February 7, 2019; referred to the Committee on Banking, Housing, and Urban Affairs.", "Resolutions", "H.Res. 92 (King). The resolution would call for the immediate extradition or rendering to the United States of convicted felons William Morales, Joanne Chesimard, and all other fugitives from justices who are receiving safe harbor in Cuba to escape prosecution or confinement for criminal offenses committed in the United States. Introduced January 30, 2019; referred to the Committee on Foreign Affairs.", "S.Res. 14 (Menendez)/ H.Res. 136 (Sires). Similar resolutions would affirm that Cuba's medical missions constitute human trafficking. The resolutions express the sense of each respective body that the State Department should downgrade Cuba to Tier 3 in its annual Trafficking in Persons Re port and should reestablish the Cuban Medical Professional Parole program. S.Res. 14 introduced January 10, 2019; referred to the Committee on Foreign Relations. H.Res. 136 introduced February 14; referred to the Committee on Foreign Affairs.", "Appendix B. Links to U.S. Government Reports", "U.S. Relations with Cuba, Fact Sheet , Department of State", "Date: February 8, 2019 Full Text: https://www.state.gov/r/pa/ei/bgn/2886.htm", "Congressional Budget Justificati on for Foreign Operations FY2019 , Appendix 2 , pp. 474-475, Department of State", "Date: March 14, 2018 Full Text: https://www.state.gov/documents/organization/279517.pdf", "Country Report s on Human Rights Practices fo r 2018 , Cuba , Department of State", "Date: March 13, 2019 Full Text: https://www.state.gov/documents/organization/289532.pdf", "Cuba web page, Department of State", "Link: https://www.state.gov/p/wha/ci/cu/index.htm", "Cuba web page, Department of Commerce, Bureau of Industry and Security", "Link: https://www.bis.doc.gov/index.php/policy-guidance/country-guidance/sanctioned-destinations/cuba", "Cuba web page, Department of Agriculture, Foreign Agricultural Service", "Link: https://www.fas.usda.gov/regions/cuba ", "Cuba Sanctions web page, Department of the Treasury, Office of Foreign Assets Control", "Link: https://www.treasury.gov/resource-center/sanctions/Programs/Pages/cuba.aspx", "International R eligious Freedom Report for 2017 , Cuba , Department of State", "Date: May 29, 2018 Full Text: https://www.state.gov/documents/organization/281308.pdf", "International Narcotics Control Strategy Report 2019 , Volume I, Drug and Chemical Control, p. 146, Department of State", "Date: March 2019 Link: http://www.state.gov/documents/organization/290501.pdf ", "International Narcotics Control Strategy Report 2018, Volume II , Money Laundering, pp. 85-87, Department of State", "Date: March 2018 Link: http://www.state.gov/documents/organization/278760.pdf", "Overview of Cuban Imports of Goods and Services and Effects of U.S. Restrictions , U.S. International Trade Commission, Publication 4597", "Date: March 2016 Link: https://www.usitc.gov/sites/default/files/publications/332/pub4597_0.pdf", "Trafficking in Persons Report 2018 , Cuba, Department of State", "Date: June 2018 Link: https://www.state.gov/j/tip/rls/tiprpt/countries/2018/282640.htm"], "subsections": []}]}}
{"id": "R44402", "title": "Rwanda: In Brief", "released_date": "2019-05-14T00:00:00", "summary": ["Rwanda, a small landlocked country in central Africa's Great Lakes region, has seen rapid development and security gains since about 800,000 people\u2014mostly members of the ethnic Tutsi minority\u2014were killed in the 1994 genocide. The ruling Rwandan Patriotic Front (RPF) ended the genocide by seizing power in mid-1994 and has been the dominant force in Rwandan politics ever since. The Rwandan government has won donor plaudits for its efforts to improve health, boost agricultural output, encourage foreign investment, and promote women's empowerment. Yet, analysts debate whether Rwanda's authoritarian political system\u2014and periodic support for rebel groups in neighboring countries\u2014could jeopardize the country's stability in the long-run, or undermine the case for donor support.", "President Paul Kagame, in office since 2000, won reelection to another seven-year term in 2017 with nearly 99% of the vote, after the adoption of a new constitution that effectively exempted him from term limits through 2034. Kagame's overwhelming margin of victory may reflect popular support for his efforts to stabilize and transform Rwandan society, as well as a political system that involves constraints on opposition activity and close government scrutiny of citizen behavior. In response to external criticism, Kagame has generally denied specific allegations of abusing human rights while asserting that restrictions on civil and political rights are necessary to prevent the return of ethnic violence.", "The United States and Rwanda have cultivated close ties since the mid-1990s, underpinned by U.S. development aid and support for Rwanda's robust participation in international peacekeeping. Congress has helped shape U.S. engagement through its appropriation of foreign aid and other legislative initiatives, along with oversight and direct Member outreach to Rwandan officials. Over the past decade, successive Administrations and Congress have continued to support U.S. partnership with Rwanda on development and peacekeeping, while criticizing the government's human rights record and periodic role in regional conflicts. Congress has notably enacted provisions in aid appropriations legislation restricting U.S. military aid to Rwanda if it is found to be supporting rebel groups in neighboring countries. The Obama Administration temporarily applied such restrictions, along with others pursuant to separate child soldiers legislation, citing Rwandan support for rebels in the Democratic Republic of Congo (DRC) and Burundi. There have been fewer reports of Rwandan support for rebel groups in recent years.", "After meeting with President Kagame in early 2018, President Trump expressed appreciation for U.S.-Rwandan economic ties, Rwanda's contributions to peacekeeping, and Kagame's pursuit of African Union institutional reforms. In line with the Administration's proposals to decrease foreign aid worldwide, its FY2020 budget request would provide $117 million in bilateral aid to Rwanda, a 28% decrease from FY2018 levels. U.S. peacekeeping-related military assistance for Rwanda has drawn on regionally- and centrally-managed funds, and is not reflected in these totals. The Administration has also suspended Rwanda's eligibility for trade benefits under the African Growth and Opportunity Act (AGOA, reauthorized under P.L. 114-27), in response to alleged market barriers to U.S. exports of used clothing."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Rwanda has achieved a rare degree of political stability, public safety, and economic growth in a sub-region plagued by armed conflicts and humanitarian crises. Government programs to improve health, agricultural output, private investment, and gender equality have received international plaudits and donor support. Rw anda's development and security gains are particularly remarkable in the wake of the 1994 genocide, in which extremist members of the ethnic Hutu majority orchestrated a three-month killing spree targeting the minority Tutsi community, along with members of the tiny indigenous Twa ethnic group and Hutus who opposed the massacres. The ruling Rwandan Patriotic Front (RPF) seized power in mid-1994, stopping the genocide. Since then, President Paul Kagame has been widely viewed as the architect of Rwanda's development \"miracle\" and of its autocratic political model. He has repeatedly won reelection by wide margins, most recently in 2017 (see \" Politics \").", "The United States and Rwanda have cultivated close ties since the mid-1990s, underpinned by U.S. aid in support of Rwanda's ambitious socioeconomic development initiatives and participation in international peacekeeping. Over the past decade, U.S. officials and some Members of Congress have continued to promote U.S.-Rwanda partnership on shared objectives, while voicing concerns regarding Rwanda's authoritarian political system and its periodic support for rebel groups in neighboring countries. Congress has held multiple hearings examining these and related issues, and has enacted restrictions on aid to Rwanda if it is found to be supporting rebel groups (see \" U.S. Relations and Aid \" ). ", "In late 2017, then Acting Assistant Secretary of State for Africa Donald Yamamoto testified to Congress that U.S.-Rwandan relations were \"close but complex,\" acknowledging democracy shortfalls and human rights concerns. President Trump met with President Kagame at the World Economic Forum in Davos, Switzerland, in January 2018, and expressed appreciation for bilateral economic ties, Rwanda's contributions to peacekeeping operations, and Kagame's pursuit of African Union (AU) institutional reforms as then-chairman of the institution. In line with the Administration's broad proposals to decrease foreign aid worldwide, it has advocated cuts to funding for Rwanda, including health and development aid. In 2018, President Trump also suspended Rwanda's trade benefits under the African Growth and Opportunity Act (AGOA, reauthorized via P.L. 114-27 ) in response to Rwanda's allegedly protectionist policies, in the context of the Administration's skepticism toward nonreciprocal trade preference programs.", "International perspectives on Rwanda tend to be polarized. Kagame's supporters assert that he is a visionary and that Rwanda represents an extraordinary post-conflict success story. To some, Rwandan voters' support for Kagame is easily explained: \"he has kept them from killing each other ... [and] has also given them a sense of hope and pride.\" Others argue that restrictions on political and civil rights may ultimately undermine Rwanda's hard-won stability, and that limits on civil liberties may mask ethnic, political, and social tensions. Given evident constraints on free expression, some observers argue that \"we simply don't know ... what Rwandans want from their political leaders.\" Some critics separately have questioned the reliability of Rwanda's development statistics\u2014a key justification for donor aid. Critics also posit that the ruling party's reportedly extensive involvement in the economy may be stifling independent private sector growth. Kagame has dismissed external criticism as inaccurate, irrelevant, neocolonialist, and/or morally vacuous given the international community's failure to halt the genocide. "], "subsections": []}, {"section_title": "Politics", "paragraphs": ["The RPF-led government has pursued rapid economic development and social transformation while effectively suppressing political dissent and public discussion of ethnic identity. President Kagame, leader of the RPF and a former military intelligence figure and rebel commander, is widely viewed as the country's preeminent decision-maker. He first ascended to the presidency in an internal party election in 2000, and has won reelection with over 90% of the popular vote in every subsequent contest (in 2003, 2010, and 2017). An RPF-led coalition holds the majority of seats in parliament; nearly all remaining seats are held by parties that refrain from directly criticizing the RPF or Kagame. The State Department has noted concerns with aspects of each election conducted under RPF rule, such as apparent procedural irregularities, a lack of transparency in vote tabulation, media restrictions, and legal challenges, threats, or criminal prosecutions targeting opposition candidates and parties. ", "Public criticism of the government is rare; human rights advocates assert that \"years of state intimidation and interference\" have weakened the capacity of local civil society or media outlets to act as a check on state power. Over the years, political opponents have been jailed, fled the country, or died under murky circumstances. Laws criminalizing genocide ideology and denial, along with state security charges, have been wielded against opposition figures, journalists, and other government critics. Some researchers have described pervasive official surveillance and involvement in citizens' daily lives, part of an apparent effort to ensure rapid implementation of development initiatives, mobilize support for the RPF, suppress criminal activity, and monitor potential opposition activity, ethnic tensions, or security threats. ", "Kagame has defended Rwanda's political system as rooted in popular support, asserting that \"imposing a style of democracy without understanding the context, culture or norm of a country is ignorant.\" Rwandan officials generally reject allegations of abusing human rights, while asserting that restrictions on civil liberties are necessary to prevent ethnic violence in a fragile post-conflict setting. Some Rwandans, including journalists and civil society actors, agree.", "Kagame would have been subject to a constitutional two-term limit on the presidency in 2017, but a new constitution approved in 2015 via referendum\u2014with a reported 98% of the vote\u2014exempted the sitting president, allowing him to run for a third term. He won with 99% of the vote. After Kagame's current term expires, the presidential term is to be shortened to five years per the new constitution; Kagame could then run for two more consecutive terms, thus potentially remaining in office until 2034. He has denied any intention to do so, stating that he is preparing Rwanda for an unspecified future leadership transition.", "Tolerance of opposition voices seems to have increased slightly since Kagame's reelection in 2017, although a significant shift in the contours of Rwandan politics appears unlikely. Two prominent opposition figures were released from jail in 2018. Diane Rwigara, a vocal Kagame critic (and daughter of a well-known businessman and Tutsi genocide survivor) who was jailed on charges of forgery and inciting insurrection shortly after seeking to run for president in 2017, was acquitted following international advocacy on her behalf, including from some Members of Congress. Victoire Ingabire, who had sought to run against Kagame in 2010 and was serving a prison sentence for alleged genocide denial and seeking to form an armed group, received a presidential pardon. So did several other members of Ingabire's FDU-Inkingi party (\"United Democratic Forces-Pillar\"), which remains illegal. Several other FDU-Inkingi supporters remain in prison; others have been killed in unclear circumstances.", "Also in 2018, the Democratic Green party, a relatively independent opposition movement (and not affiliated with Rwigara or Ingabire), won two seats in parliament after competing for the first time in legislative elections. The Green party was not granted legal registration in time to run candidates in the 2013 legislative vote; its presidential candidate, Frank Habineza, won less than 1% in the 2017 presidential vote. The party's deputy leader was killed in unclear circumstances prior to the 2010 presidential election, soon after the party was founded in 2009.", "The RPF's political leadership appears to have narrowed from a diverse set of actors in the 1990s to an apparently small circle around the president. Over the years, various top RPF officials and military officers have faced criminal charges, some on national security grounds, or have fled the country. In 2010, several prominent RFP defectors formed an exiled opposition movement, the Rwandan National Congress (RNC). Some members have been the target of armed attacks or apparent assassinations in foreign countries, including several in South Africa. President Kagame has denied state involvement, while assailing the individuals in question as traitors. "], "subsections": []}, {"section_title": "Human Rights", "paragraphs": ["The State Department's 2018 human rights report on Rwanda cites forced disappearances, alleged extrajudicial killings, arbitrary detention, and torture by state security forces (\"including asphyxiation, electric shocks, mock executions\"), noting \"impunity\" involving civilian officials and some members of the security forces. The report also documents political prisoners, threats and violence against journalists, censorship, and \"substantial interference\" with freedoms of assembly and association, along with \"restrictions on political participation.\" It further finds that \"the government continued to monitor homes, movements, telephone calls, email, other private communications, and personal and institutional data,\" often using extrajudicial means and/or embedded informants.", "Human Rights Watch has reported patterns of arbitrary detention and torture of Rwandans accused or suspected of supporting the RNC, Ingabire's political movement, or the Democratic Forces for the Liberation of Rwanda (FDLR), a militia founded in DRC by perpetrators of the genocide. The organization also has accused Rwandan security forces of killing petty criminals extra-judicially, allegations that Rwanda's National Commission for Human Rights (NCHR) has rejected. Rwanda has expelled international researchers working for Human Rights Watch; in 2018, a local employee was temporarily detained incommunicado.", "In 2018, the government shuttered thousands of churches and dozens of mosques, citing safety violations or other regulatory concerns, and proposed stricter registration requirements for religious groups. One expert asserted that these moves targeted non-denominational places of worship (i.e., not affiliated with Roman Catholicism or established Protestant denominations) because they \"are harder to control because they don't report to a central hierarchy.\" "], "subsections": []}, {"section_title": "Regional Security", "paragraphs": ["Rwanda is a top peacekeeping troop contributor in Africa; U.N. officials and donors value its military professionalism and commitment to civilian protection. As chair of the AU in 2018, President Kagame also sought to bolster the financial sustainability of African-led stability operations. At the same time, Rwanda has a history of unilateral military intervention in DRC, and reportedly has periodically provided support to rebel groups in DRC and Burundi. Its reasons for doing so may reflect a mix of national security concerns (e.g., a desire to counter DRC-based armed groups led by individuals implicated in the 1994 genocide), ethnic solidarity with the Tutsi minority in Burundi and persecuted communities of Rwandan descent in DRC, and economic motivations linked to resource smuggling in DRC.", "In 2012-2013, Rwanda faced acute international criticism and cuts to donor aid\u2014including from the United States and European countries\u2014for providing support to a DRC-based insurgent group known as the M23. The M23 originated as a rebellion among members of a previous Rwandan-backed armed group, and was the latest in a series of Rwandan-backed rebellions originating among communities of Rwandan descent in eastern DRC since in the late 1990s. In 2015 and 2016, reports suggested Rwandan involvement in the recruitment and training of Burundian refugees for a rebellion against the government of Burundi, again prompting donor criticism. ", "Credible reports of direct Rwandan involvement in regional conflicts have since diminished, although the country's relations with DRC remain volatile. Tensions with Burundi also have endured, with Rwanda accusing Burundian authorities of stoking ethnic tensions while Burundi has accused Rwanda of espionage and interference. Relations with sometimes-ally Uganda also have soured in recent years. Rwandan officials, including President Kagame, have openly accused Uganda of backing Rwandan armed dissidents (apparently referring to the RNC) as well as the FDLR, while Ugandan officials have accused Rwanda of espionage. ", "Ongoing insecurity and illicit resource extraction in eastern DRC remain flashpoints for regional tensions and spillover of conflicts. In late 2018, U.N. DRC sanctions monitors reported that the RNC was mobilizing armed combatants in DRC's South Kivu province, with apparent Burundian support. Some researchers posit that Rwanda-Uganda friction is rooted in competition over access to DRC minerals; U.N. DRC sanctions investigators reported in 2018 that \"gold sourced in high-risk and conflict areas [of DRC] was exported illegally to Uganda and Rwanda.\" "], "subsections": []}, {"section_title": "The Economy and Development", "paragraphs": ["Donor aid, political stability, low corruption, and pro-investor policies have enabled high economic growth rates (4-9% annually) over the past decade. Rwanda remains one of the world's poorest countries, although it ranks higher than many other sub-Saharan African countries on the 2018 U.N. Human Development Index (at 158 out of 189 countries assessed). About 75% of Rwandans are engaged in agriculture, many for subsistence; the country is nonetheless reliant on food imports, in part due to having the highest population density in continental Africa. ", "The government seeks to transform the economy into one that is services-oriented and middle-income, launching programs to expand internet access, improve education, and increase domestic energy production. Key growth sectors include tourism, coffee, tea, tin mining, construction, and an emerging financial services sector. The government also aims to turn Rwanda into a regional trade, logistics, and conference hub. It has invested in the construction of new business class hotels and a convention center in Kigali, a planned new airport, and an expansion of the national airline RwandAir\u2014which is pursuing U.S. federal approval for direct flights between Kigali and the United States. Much investment has been concentrated in Kigali, which has received international plaudits for its clean and safe streets. ", "Rwanda was ranked 29 out of 190 on the World Bank's 2019 Doing Business report, the only low-income country and one of only two African countries (along with Mauritius) in the top 50. Rwanda's continual improvements in the annual rankings reflect its efforts to reduce bureaucratic red-tape, protect property rights, improve access to credit, expand the supply of reliable electricity, and ensure contract enforcement. The State Department has nonetheless documented various challenges for foreign investors, including \"payment delays with government contracts,\" inconsistent adherence to incentives offered by the Rwanda Development Board, infringements on property rights, and \"competition from state-owned and ruling party-aligned businesses.\"", "Human development gains since the genocide have been dramatic in relative terms. According to the World Health Organization (WHO), from 1990 and 2016, life expectancy increased from 48 to 66 years; the child (under five) mortality rate fell from 152 to 42 deaths per 1,000 live births; and the maternal mortality rate decreased from 1,300 to 290 deaths per 100,000 live births. Through a donor-backed national community-based health insurance system, Rwanda provides near-universal health coverage for basic primary care, with the cost fully or partially subsidized based on income level. As of 2015, about 39% of Rwandans reportedly lived below the poverty line, compared to 56% in 2006 and 78% in 1994. Some researchers have questioned the reliability of Rwanda's poverty statistics, noting that they are based on household-level survey data and may be subject to interference; the World Bank has rejected some of this criticism, asserting that Rwanda's official statistical methodology \"is technically sound.\" "], "subsections": []}, {"section_title": "U.S. Relations and Aid", "paragraphs": ["In 1998, President Bill Clinton delivered a speech in Kigali in which he expressed remorse for not having intervened more forcefully to end mass killings in 1994, and pledged that the United States would do better in the future. Those remarks arguably set the tone for a relationship defined, in part, by a sense of guilt among U.S. policymakers about the genocide and admiration for the RPF's role in stopping it. U.S. support for the RPF-led government has continued across successive Administrations and across partisan lines, with the executive branch and Congress working together to provide substantial aid to support Rwanda's development efforts and peacekeeper deployments. Yet, over the past decade, executive branch officials and some Members of Congress increasingly have criticized Rwanda's involvement in regional conflicts and expressed concern with its domestic political and human rights conditions. ", "After meeting with President Kagame in Davos in January 2018, President Trump praised the United States' \"great relationships\" with Rwanda, including bilateral trade, and stated that \"the job they've done is absolutely terrific.\" In September 2017 congressional testimony, then Acting Assistant Secretary of State for Africa Yamamoto praised Rwanda's \"remarkable gains\" in health and development and characterized the country as \"a major contributor to regional peace and security,\" while asserting that \"Rwanda's record in the areas of human rights and democracy, while improved in some areas, remains a concern.\" He called on the government \"to take steps toward a democratic transition of power.\" ", "Regarding Rwanda's 2017 presidential election, the State Department stated that \"we are disturbed by irregularities observed during voting and reiterate long-standing concerns over the integrity of the vote-tabulation process.\" In response to Member questions at the September 2017 hearing, Ambassador Yamamoto affirmed that \"we are unable to assess this election as free and fair.\" At his Senate confirmation hearing in late 2017, the U.S. Ambassador-designate to Rwanda described his four top policy goals as the following: continuing the United States' \"development partnership\" with Rwanda, promoting U.S. business and economic ties, supporting Rwanda's continued peacekeeping role, and advancing \"democratic ideals.\"", "President Trump suspended duty-free treatment of Rwandan apparel exports to the United States under AGOA in 2018, as noted above, citing Rwandan protectionist policies. The suspension came after the Administration initiated an out-of-cycle review of Rwanda's eligibility in 2017. In addition to concerns about trade barriers, Ambassador Yamamoto testified in 2017 that U.S. officials had also \"raised concerns ... regarding harassment of political opposition leaders and [non-governmental organizations] as well as restrictions on media freedom with the context of AGOA eligibility.\" The impact may be largely symbolic: in 2017, U.S. imports from Rwanda totaled $44 million, of which $5 million were under AGOA. U.S. exports to Rwanda totaled $64 million that year. ", "U.S. bilateral aid to Rwanda aims to promote economic growth, food security, health, and military professionalism. The State Department has drawn on additional regionally- and centrally-managed funds to provide military aid to build Rwanda's peacekeeping capabilities, including under the African Peacekeeping Rapid Response Partnership (APRRP) initiative, launched under President Obama in 2014. (The Trump Administration has not requested new appropriations in support of APRRP, but has continued to implement funds allocated in prior years.) APRRP was conceived to complement the State Department's Global Peace Operations Initiative (GPOI), in which Rwanda also participates. The United States also provides humanitarian assistance for international organizations caring for Congolese and Burundian refugees in Rwanda."], "subsections": [{"section_title": "Legislative Restrictions on Security Assistance", "paragraphs": ["Successive Congresses have enacted foreign aid appropriations measures restricting certain types of U.S. military aid to Rwanda if it is found to be supporting rebel movements in neighboring countries. Citing such provisions, as well as the Child Soldiers Prevention Act of 2008 (CSPA, Title IV of P.L. 110-457 ), the Obama Administration suspended certain types of military aid\u2014namely, Foreign Military Financing (FMF) and International Military Education and Training (IMET)\u2014citing Rwandan support for rebels in DRC and, later, Burundi. Military aid in support of Rwanda's peacekeeping capabilities was exempted from such restrictions via a combination of legislative provisions (e.g., \u00a71208[f] of P.L. 113-4 , the Violence Against Women Reauthorization Act of 2013, which excepts peacekeeping aid from child soldiers-related restrictions) and executive branch waivers. The executive-legislative branch interplay under the Obama and Trump Administrations (to date) is detailed below.", "FY2012-FY2013: The Obama Administration invoked a provision of the FY2012 appropriations act ( P.L. 112-74 , \u00a77043(a) of Division I), extended into FY2013 via continuing resolutions, to suspend FMF for Rwanda, citing its support for the M23 rebellion in DRC. The provision stated that FMF could be made available for Rwanda or Uganda \"unless\" the Secretary of State had \"credible information\" that either government was supporting armed groups in DRC.", "FY2014: The Obama Administration continued to suspend FMF, consistent with a provision in that year's appropriations act ( P.L. 113-76 , \u00a77042(l) of Division K) restricting such funds unless Rwanda was \"taking steps to cease\" support to certain armed groups in DRC. It also designated Rwanda under CSPA in connection with the M23's reported use of child soldiers, and applied that act's prohibition on various other forms of military aid, including IMET.", "FY2015: The appropriations act prohibited FMF for Rwanda unless the Secretary of State certified to Congress that the government was \"implementing a policy to cease\" support to armed groups in DRC ( P.L. 113-235 , \u00a77042[l] of Division J). The Obama Administration had not requested FMF for Rwanda in its budget proposal, and none was provided. The State Department again designated Rwanda under CSPA, but President Obama waived the act's aid prohibitions, citing the end of the M23 insurgency\u2014thus allowing IMET, for example, to resume.", "FY2016: The State Department did not designate Rwanda under CSPA, and that year's appropriations act ( P.L. 114-113 ) did not restrict security assistance for Rwanda. The Obama Administration did not request or provide FMF funds for Rwanda, in any case. IMET continued. ", "FY2017: The Obama Administration (in mid-2016) designated Rwanda under CSPA in connection with its reported support for Burundian rebel groups' recruitment of child soldiers. President Obama waived CSPA restrictions on IMET and several other types of security aid, however, and no FMF funding was requested for Rwanda or provided. The appropriations act restricted certain types of IMET programs for any country in Africa's Great Lakes region unless the Secretary of State certified that it was \"not facilitating or otherwise participating in destabilizing activities in a neighboring country\" ( P.L. 115-31 , \u00a77042(a) of Division J). The State Department provided some IMET funds for Rwanda, but once the act passed into law, did not support activities that would have been prohibited in such a scenario.", "FY2018 -FY2019 to date : Appropriations measures have continued to restrict certain types of IMET programs for any country in the Great Lakes region until the Secretary of State determines and reports that it is \"not facilitating or otherwise participating in destabilizing activities in a neighboring country, including aiding and abetting armed groups\" (most recently, P.L. 116-6 \u00a77042(a) of Division F). The Trump Administration has not designated Rwanda under CSPA. It also has not requested or provided FMF for Rwanda. "], "subsections": []}]}, {"section_title": "Issues for Congress and Outlook", "paragraphs": ["Congress has shaped U.S. policy and assistance to Rwanda through its authorization and appropriation of U.S. assistance, and through oversight and Member engagement. In 2012-2013, and again in 2015-2016, the application of legislative restrictions on U.S. security assistance\u2014along with other donor criticism and aid suspensions\u2014appeared to contribute to a decrease in Rwandan support for the M23 in DRC and may conceivably have dissuaded Rwanda from intervening more heavily in Burundi. Members may seek to derive lessons from this sequence of events as they consider pending appropriations bills and/or any future legislative proposals regarding U.S. aid to Rwanda. With regard to Rwanda's domestic conditions, questions remain around how the United States can best support the country's continued stability and growth, including whether continued U.S. support for Rwanda's development efforts can or should be premised on evidence of greater respect for political pluralism or individual liberties."], "subsections": []}]}}
{"id": "R45707", "title": "Terrorism Risk Insurance: Overview and Issue Analysis for the 116th Congress", "released_date": "2019-04-26T00:00:00", "summary": ["Prior to the September 11, 2001, terrorist attacks, coverage for losses from such attacks was normally included in general insurance policies without additional cost to the policyholders. Following the attacks, such coverage became expensive, if offered at all. Moreover, some observers feared that the absence of insurance against terrorism loss would have a wider economic impact, because insurance is required to consummate a variety of transactions (e.g., real estate). For example, if real estate deals were not completed due to lack of insurance, this could have ripple effects\u2014such as job loss\u2014on related industries like the construction industry. Terrorism insurance was largely unavailable for most of 2002, and some have argued that this adversely affected parts of the economy, while others suggest the evidence is inconclusive.", "Congress responded to the disruption in the insurance market by passing the Terrorism Risk Insurance Act of 2002 (TRIA; P.L. 107-297), which created a temporary three-year Terrorism Insurance Program. Under TRIA, the government would share the losses on commercial property and casualty insurance should a foreign terrorist attack occur, with potential recoupment of this loss sharing after the fact. In addition, TRIA requires insurers to make terrorism coverage available to commercial policyholders, but does not require policyholders to purchase the coverage. The program expiration date was extended in 2005 (P.L. 109-144), 2007 (P.L. 110-160), and 2015 (P.L. 114-1). Over the course of such reauthorizations, the prospective government share of losses has been reduced and the recoupment amount increased, although the 2007 reauthorization also expanded the program to cover losses from acts of domestic terrorism. The TRIA program is currently slated to expire at the end of 2020.", "In general terms, if a terrorist attack occurs under TRIA, the insurance industry covers the entire amount for relatively small losses. For a medium-sized loss, the government assists insurers initially but is then required to recoup the payments it made to insurers through a broad levy on insurance policies afterwards\u2014the federal role is to spread the losses over time and over the entire insurance industry and insurance policyholders. As the size of losses grows larger, the federal government covers more of the losses without this mandatory recoupment. Ultimately, for the largest losses, the government is not required to recoup the payments it has made, although discretionary recoupment remains possible. The precise dollar values where losses cross these small, medium, and large thresholds are uncertain and will depend on how the losses are distributed among insurers.", "The specifics of the current program are as follows: (1) a terrorist act must cause $5 million in insured losses to be certified for TRIA coverage; (2) the aggregate insured losses from certified acts of terrorism must be $180 million in a year for the government coverage to begin (this amount increases to $200 million in 2020); and (3) an individual insurer must meet a deductible of 20% of its annual premiums for the government coverage to begin. Once these thresholds are met, the government covers 81% of insured losses due to terrorism (this amount decreases to 80% in 2020). If the insured losses are less than $37.5 billion, the Secretary of the Treasury is required to recoup 140% of government outlays through surcharges on TRIA-eligible property and casualty insurance policies. As insured losses rise above $37.5 billion, the Secretary is required to recoup a progressively reduced amount of the outlays. At some high insured loss level, which will depend on the exact distribution of losses, the Secretary would no longer be required to recoup outlays.", "Since TRIA's passage, the private industry's willingness and ability to cover terrorism risk have increased. According to data collected by the Treasury, in 2017, approximately 78% of insureds purchased the optional terrorism coverage, paying $3.65 billion in premiums. Over the life of the program, premiums earned by unrelated insurers have totaled $38 billion. This relative market calm has been under the umbrella of TRIA coverage and in a period in which no terrorist attacks have occurred that resulted in government payments under TRIA. It is unclear how the insurance market would react to the expiration of the federal program, although at least some instability might be expected were this to occur. With the upcoming 2020 expiration of the program, the 116th Congress may consider legislation to extend TRIA; to date, no such legislation has been introduced."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Prior to the September 2001 terrorist attacks on the United States, insurers generally did not exclude or separately charge for coverage of terrorism risk. The events of September 11, 2001, changed this as insurers realized the extent of possible terrorism losses. Estimates of insured losses from the 9/11 attacks are more than $45 billion in current dollars, the largest insured losses from a nonnatural disaster on record. These losses were concentrated in business interruption insurance (34% of the losses), property insurance (30%), and liability insurance (23%).", "Although primary insurance companies\u2014those that actually sell and service the insurance policies bought by consumers\u2014suffered losses from the terrorist attacks, the heaviest insured losses were absorbed by foreign and domestic reinsurers, the insurers of insurance companies. Because of the lack of public data on, or modeling of, the scope and nature of the terrorism risk, reinsurers felt unable to accurately price for such risks and largely withdrew from the market for terrorism risk insurance in the months following September 11, 2001. Once reinsurers stopped offering coverage for terrorism risk, primary insurers, suffering equally from a lack of public data and models, also withdrew, or tried to withdraw, from the market. In most states, state regulators must approve policy form changes. Most state regulators agreed to insurer requests to exclude terrorism risks from commercial policies, just as these policies had long excluded war risks. Terrorism risk insurance was soon unavailable or extremely expensive, and many businesses were no longer able to purchase insurance that would protect them in future terrorist attacks. In some cases, such insurance is required to consummate various transactions, particularly in the real estate, transportation, construction, energy, and utility sectors. Although the evidence is largely anecdotal, some were concerned that the lack of coverage posed a threat of serious harm\u2014such as job loss\u2014to these industries, in turn threatening the broader economy.", "In November 2002, Congress responded to the fears of economic damage due to the absence of commercially available coverage for terrorism with passage of the Terrorism Risk Insurance Act (TRIA). TRIA created a three-year Terrorism Insurance Program to provide a government reinsurance backstop in the case of terrorist attacks. The TRIA program was amended and extended in 2005, 2007, and 2015. Following the 2015 amendments, the TRIA program is set to expire at the end of 2020. (A side-by-side of the original law and the three reauthorization acts is in Table 1 .)", "The executive branch has been skeptical about the TRIA program in the past. Bills to expand TRIA were resisted by then-President George W. Bush's Administration, and previous presidential budgets under then-President Obama called for changes in the program that would have had the effect of scaling back the TRIA coverage. The current Administration has not called for specific changes to TRIA, but has indicated that it is \"evaluating reforms\u2026to further decrease taxpayer exposure.\"", "The insurance industry largely continues to support TRIA, as do commercial insurance consumers in the real estate and other industries that have formed a \"Coalition to Insure Against Terrorism\" (CIAT). However, not all insurance consumers have consistently supported the renewal of TRIA. For example, the Consumer Federation of America has questioned the need for the program in the past.", "Although the United States has suffered attacks deemed \"terrorism\" since the passage of TRIA, no acts of terrorism have been certified and no payments have occurred under TRIA. For example, although the April 2013 bombing in Boston was termed an \"act of terror,\" by the President, the insured losses in TRIA-eligible insurance from that bombing did not cross the $5 million statutory threshold to be certified under TRIA. (See precise criteria under the TRIA program below.)"], "subsections": []}, {"section_title": "Goals and Specifics of the Current TRIA Program", "paragraphs": ["The original TRIA legislation's stated goals were to (1) create a temporary federal program of shared public and private compensation for insured terrorism losses to allow the private market to stabilize; (2) protect consumers by ensuring the availability and affordability of insurance for terrorism risks; and (3) preserve state regulation of insurance. Although Congress has amended specific aspects of the original act, the operation of the program generally usually follows the original statute. The changes to the program have largely reduced the government coverage for terrorism losses, except that the 2007 amendments expanded coverage to domestic terrorism losses, rather than limiting the program to foreign terrorism."], "subsections": [{"section_title": "Terrorism Loss Sharing Criteria", "paragraphs": ["To meet the first goal, the TRIA program creates a mechanism through which the federal government could share insured commercial property and casualty losses with the private insurance market. The role of federal loss sharing depends on the size of the insured loss. For a relatively small loss, there is no federal sharing. For a medium-sized loss, the federal role is to spread the loss over time and over the entire insurance industry. The federal government provides assistance up front but then recoups the payments it made through a broad levy on insurance policies afterwards. For a large loss, the federal government is to pay most of the losses, although recoupment is possible (but not mandatory) in these circumstances as well. The precise dollar values where losses cross these small, medium, and large thresholds are uncertain and will depend on how the losses are distributed among insurers. For example, for loss sharing to occur, an attack must meet a certain aggregate dollar value and each insurer must pay out a certain amount in claims\u2014known as its deductible. For some large insurers, this individual deductible might be higher than the aggregate threshold set in statute, meaning that loss sharing might not actually occur until a higher level than the figure set in statute.", "The criteria under the TRIA program in 2019 are as follows: ", "1. An individual act of terrorism must be certified by the Secretary of the Treasury, in consultation with the Secretary of Homeland Security and Attorney General; losses must exceed $5 million in the United States or to U.S. air carriers or sea vessels for an act of terrorism to be certified. 2. The federal government shares in an insurer's losses due to a certified act of terrorism only if \"the aggregate industry insured losses resulting from such certified act of terrorism\" exceed $180 million (increasing to $200 million in 2020). 3. The federal program covers only commercial property and casualty insurance, and it excludes by statute several specific lines of insurance. 4. Each insurer is responsible for paying a deductible before receiving federal coverage. An insurer's deductible is proportionate to its size, equaling 20% of an insurer's annual direct earned premiums for the commercial property and casualty lines of insurance specified in TRIA. 5. Once the $180 million aggregate loss threshold and 20% deductible are met, the federal government would cover 81% of each insurer's losses above its deductible until the amount of losses totals $100 billion. 6. After $100 billion in aggregate losses, there is no federal government coverage and no requirement that insurers provide coverage. 7. In the years following the federal sharing of insurer losses, but prior to September 30, 2024, the Secretary of the Treasury is required to establish surcharges on TRIA-eligible property and casualty insurance policies to recoup 140% of some or all of the outlays to insurers under the program. If losses are high, the Secretary has the authority to assess surcharges, but is not required to do so. (See \" Recoupment Provisions \" below for more detail.) "], "subsections": [{"section_title": "Initial Loss Sharing", "paragraphs": ["The initial loss sharing under TRIA can be seen in Figure 1 , adapted from a Congressional Budget Office (CBO) report. The exact amount of the 20% deductible at which TRIA coverage would begin depends on how the losses are distributed among insurance companies. In the aggregate, 20% of the direct-earned premiums for all of the property and casualty lines specified in TRIA totaled approximately $42 billion in 2017, according to the latest data collected by the Treasury Department. TRIA coverage is likely, however, to begin well under this amount as the losses from an attack are unlikely to be equally distributed among insurance companies."], "subsections": []}, {"section_title": "Recoupment Provisions", "paragraphs": ["The precise amount TRIA requires the Treasury to recoup after the initial loss sharing is determined by the interplay between a number of different factors in the law and insurance marketplace. The general result of the recoupment provisions is that, for attacks that result in under $37.5 billion in insured losses, the Treasury Secretary is required to recoup 140% of the government outlays through surcharges on property and casualty insurance policies. For events with insured losses over $37.5 billion, the Secretary has discretionary authority to recoup all the government outlays and may be required to partially recoup the government outlays depending on the size of the attacks and the amount of uncompensated losses paid by the insurance industry. (See the Appendix for more information on exact recoupment calculations.)", "If the requirement for recoupment is triggered, TRIA requires the government to recoup all payments prior to the end of FY2024. Because the last reauthorization of TRIA occurred in January 2015, such recoupment would be completed within a 10-year timeframe following the previous reauthorization. For an attack causing significant insured loses, however, this requirement could result in high surcharges being applied for a relatively short time. The recoupment surcharges are to be imposed as a percentage of premiums paid on all TRIA-eligible property and casualty insurance policies, but the Secretary has the authority to adjust the amount of the premiums taking into consideration differences between rural and urban areas and the terrorism exposures of different lines of insurance."], "subsections": []}, {"section_title": "Program Administration", "paragraphs": ["The administration of the TRIA program was originally left generally to the Treasury Secretary. This was changed somewhat in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The act created a new Federal Insurance Office (FIO) to be located within the Department of the Treasury. Among the duties specified for the FIO in the legislation was to assist the Secretary in the administration of the Terrorism Insurance Program."], "subsections": []}]}, {"section_title": "TRIA Consumer Protections", "paragraphs": ["TRIA addresses the second goal\u2014to protect consumers\u2014by requiring insurers that offer TRIA-covered lines of insurance to make terrorism insurance available prospectively to their commercial policyholders. This coverage may not differ materially from coverage for other types of losses. Each terrorism insurance offer must reveal both the premium charged for terrorism insurance and the possible federal share of compensation. Policyholders are not, however, required to purchase coverage under TRIA. If a policyholder declines to purchase terrorism coverage, the insurer may exclude terrorism losses. Federal law does not limit what insurers can charge for terrorism risk insurance, although state regulators typically have the authority under state law to modify excessive, inadequate, or unfairly discriminatory rates. "], "subsections": []}, {"section_title": "Preservation of State Insurance Regulation", "paragraphs": ["TRIA's third goal\u2014to preserve state regulation of insurance\u2014is expressly accomplished in Section 106(a), which provides that \"Nothing in this title shall affect the jurisdiction or regulatory authority of the insurance commissioner [of a state].\" The Section 106(a) provision has two exceptions, one permanent and one temporary (and expired): (1)\u00a0the federal statute preempts any state definition of an \"act of terrorism\" in favor of the federal definition and (2) the statute briefly preempted state rate and form approval laws for terrorism insurance from enactment to the end of 2003. In addition to these exceptions, Section 105 of the law also preempts state laws with respect to insurance policy exclusions for acts of terrorism."], "subsections": []}]}, {"section_title": "Coverage for Nonconventional Terrorism Attacks", "paragraphs": ["The TRIA statute does not specifically include or exclude property and casualty insurance coverage for terrorist attacks according to the particular methods used in the attacks, such as nuclear, biological, chemical, and radiological (NBCR) and cyber terrorism risks. Such nonconventional means, however, have the potential to cause losses that may or may not end up being covered by TRIA and have been a source of particular concern and attention in the past."], "subsections": [{"section_title": "Nuclear, Biological, Chemical, and Radiological Terrorism Coverage", "paragraphs": ["Some observers consider a terrorist attack with some form of NBCR weapon to be the most likely type of attack causing large scale losses. The current TRIA statute does not specifically include or exclude NBCR events; thus, the TRIA program in general would cover insured losses from terrorist actions due to NCBR as it would for an attack by conventional means. The term insured losses , however, is a meaningful distinction. Except for workers' compensation insurance, most insurance policies that would fall under the TRIA umbrella include exclusions that would likely limit insurer coverage of an NCBR event, whether it was due to terrorism or to some sort of accident, although these exclusions have never been legally tested in the United States after a terrorist event. If these exclusions are invoked and do indeed limit the insurer losses due to NBCR terrorism, they would also limit the TRIA coverage of such losses. Language that would have specifically extended TRIA coverage to NBCR events was offered in the past, but was not included in legislation as enacted. In 2007, the Government Accountability Office (GAO) was directed to study the issue and a GAO report was issued in 2008, finding that \"insurers generally remain unwilling to offer NBCR coverage because of uncertainties about the risk and the potential for catastrophic losses.\" In the past, legislation (e.g., H.R. 4871 in the 113 th Congress) would have provided for differential treatment of NBCR attacks under TRIA, but such legislation has not been enacted."], "subsections": []}, {"section_title": "Cyber Terrorism Coverage", "paragraphs": ["Concern regarding potential damage from cyber terrorism has grown as increasing amounts of economic activity occur online. The TRIA statute does not specifically address the potential for cyber terrorism, thus, there was uncertainty about such attacks would be covered in the same manner as terrorist attacks using conventional means. In 2016, state insurance regulators introduced a new Cyber Liability line of insurance, raising questions as to whether coverage under this line would be covered under TRIA, or whether it would not be covered under the law's exclusion of \"professional liability\" insurance. The Department of the Treasury released guidance in December 2016 clarifying that \"stand-alone cyber insurance policies reported under the 'Cyber Liability' line are included in the definition of 'property and casualty insurance' under TRIA.\" ", "Despite Treasury's guidance, cyber terrorism coverage remains a particular concern. The Treasury Department devoted a specific section of the latest report on TRIA to cyber coverage, reporting that 50% of standalone cyber insurance policies (based on premium value) included terrorism coverage. The take-up rate for those choosing cyber coverage that is embedded in policies covering additional perils was 54%. These rates are similar to, but slightly lower than, the 62% take-up rate for general terrorism coverage found across all TRIA-eligible lines."], "subsections": []}]}, {"section_title": "Background on Terrorism Insurance", "paragraphs": [], "subsections": [{"section_title": "Insurability of Terrorism Risk", "paragraphs": ["Stripped to its most basic elements, insurance is a fairly straightforward operation. An insurer agrees to assume an indefinite future risk in exchange for a definite current premium. The insurer pools a large number of risks such that, at any given point in time, the ongoing losses will not be larger than the current premiums being paid, plus the residual amount of past premiums that the insurer retains and invests, plus, in a last resort, any borrowing against future profits if this is possible. For the insurer to operate successfully and avoid failure, it is critical to accurately estimate the probability of a loss and the severity of that loss so that a sufficient premium can be charged. Insurers generally depend upon huge databases of past loss information in setting these rates. Everyday occurrences, such as automobile accidents or natural deaths, can be estimated with great accuracy. Extraordinary events, such as large hurricanes, are more difficult, but insurers have many years of weather data, coupled with sophisticated computer models, with which to make predictions.", "Many see terrorism risk as fundamentally different from other risks, and thus it is often perceived as uninsurable by the private insurance market without government support for the most catastrophic risk. The argument that catastrophic terrorism risk is uninsurable typically focuses on lack of public data about both the probability and severity of terrorist acts. The reason for the lack of historical data is generally seen as a good thing\u2014few terrorist attacks are attempted and fewer have succeeded. Nevertheless, the insurer needs some type of measurable data to determine which terrorism risks it can take on without putting the company at risk of failure. As a replacement for large amounts of historical data, insurers turn to various forms of terrorism models similar to those used to assess future hurricane losses. Even the best model, however, can only partly replace good data, and terrorism models are still relatively new compared with hurricane models.", "One prominent insurance textbook identifies four ideal elements of an insurable risk: (1) a sufficiently large number of insureds to make losses reasonably predictable; (2) losses must be definite and measurable; (3) losses must be fortuitous or accidental; and (4) losses must not be catastrophic (i.e., it must be unlikely to produce losses to a large percentage of the risks at the same time). Terrorism risk in the United States would appear to fail the first criterion as terrorism losses have not proved predictable over time. Losses to terrorism, when they occur, are generally definite and measurable, so terrorism risk could pass under criteria two. Such risk, however, also likely fails the third criterion due to the malevolent human actors behind terrorist attacks, whose motives, means, and targets of attack are constantly in flux. Whether it fails the fourth criterion is largely decided by the underwriting actions of insurers themselves (i.e., whether the insurers insure a large number of risks in a single geographic area that would be affected by a terrorist strike). Unsurprisingly, insurers generally have sought to limit their exposures in particular geographic locations with a conceptually higher risk for terrorist attacks, making terrorism insurance more difficult to find in those areas."], "subsections": []}, {"section_title": "International Experience with Terrorism Risk Insurance27", "paragraphs": ["Although the U.S. experience with terrorism is relatively limited, other countries have dealt with the issue more extensively and have developed their own responses to the challenges presented by terrorism risk. Spain, which has seen significant terrorist activity by Basque separatist movements, insures against acts of terrorism via a broader government-owned reinsurer that has provided coverage for catastrophes since 1954. The United Kingdom, responding to the Irish Republican Army attacks in the 1980s, created Pool Re, a privately owned mutual insurance company with government backing, specifically to insure terrorism risk. In the aftermath of the September 11, 2001, attacks, many foreign countries reassessed their terrorism risks and created a variety of approaches to deal with the risks. The UK greatly expanded Pool Re, whereas Germany created a private insurer with government backing to offer terrorism insurance policies. Germany's plan, like the United States' TRIA, was created as a temporary measure. It has been extended since its inception, most recently until the end of 2019. Not all countries, however, concluded that some sort of government backing for terrorism insurance was necessary. Canada specifically considered, and rejected, creating a government program following September 11, 2001."], "subsections": []}, {"section_title": "Previous U.S. Experience with \"Uninsurable\" Risks", "paragraphs": ["Terrorism risk post-2001 is not the first time the United States has faced a risk perceived as uninsurable in private markets that Congress chooses to address through government action. During World War II, for example, Congress created a \"war damage\" insurance program and it expanded a program insuring against aviation war risk following September 11, 2002. Since 1968, the National Flood Insurance Program has covered most of the insured flooding losses in the United States. ", "The closest previous analog to the situation with terrorism risk may be the federal riot reinsurance program created in the late 1960s. Following large scale riots in American cities in the late 1960s, insurers generally pulled back from insuring in those markets, either adding policy exclusions to limit their exposure to damage from riots or ceasing to sell property damage insurance altogether. In response, Congress created a riot reinsurance program as part of the Housing and Urban Development Act of 1968. The federal riot reinsurance program offered reinsurance contracts similar to commercial excess reinsurance. The government agreed to cover some percentage of an insurance company's losses above a certain deductible in exchange for a premium paid by that insurance company. Private reinsurers eventually returned to the market, and the federal riot reinsurance program was terminated in 1985."], "subsections": []}]}, {"section_title": "The Terrorism Insurance Market", "paragraphs": [], "subsections": [{"section_title": "Post-9/11 and Pre-TRIA", "paragraphs": ["The September 2001 terrorist attacks, and the resulting billions of dollars in insured losses, caused significant upheaval in the insurance market. Even before the attacks, the insurance market was showing signs of a cyclical \"hardening\" of the market in which prices typically rise and availability is somewhat limited. The unexpectedly large losses caused by terrorist acts exacerbated this trend, especially with respect to the commercial lines of insurance most at risk for terrorism losses. Post-September 11, insurers and reinsurers started including substantial surcharges for terrorism risk, or, more commonly, they excluded coverage for terrorist attacks altogether. Reinsurers could make such rapid adjustments because reinsurance contracts and rates are generally unregulated. Primary insurance contracts and rates are more closely regulated by the individual states, and the exclusion of terrorism coverage for the individual insurance purchaser required regulatory approval at the state level in most cases. States acted fairly quickly, and, by early 2002, 45 states had approved insurance policy language prepared by the Insurance Services Office, Inc. (ISO, an insurance consulting firm), excluding terrorism damage in standard commercial policies.", "The lack of readily available terrorism insurance caused fears of a larger economic impact, particularly on the real estate market. In most cases, lenders prefer or require that a borrower maintain insurance coverage on a property. Lack of terrorism insurance coverage could lead to defaults on existing loans and a downturn in future lending, causing economic ripple effects as buildings are not built and construction workers remain idle. ", "The 14-month period after the September 2001 terrorist attacks and before the November 2002 passage of TRIA provides some insight into the effects of a lack of terrorism insurance. Some examples in September 2002 include the Real Estate Roundtable releasing a survey finding that \"$15.5 billion of real estate projects in 17 states were stalled or cancelled because of a continuing scarcity of terrorism insurance\" and Moody's Investors Service downgrading $4.5 billion in commercial mortgage-backed securities. This picture, however, was not uniform. For example, in July 2002, The Wall Street Journal reported that \"despite concerns over landlords' ability to get terrorism insurance, trophy properties were in demand.\" CBO concluded in 2005 that \"[TRIA] appears to have had little measurable effect on office construction, employment in the construction industry, or the volume of commercial construction loans made by large commercial banks,\" but CBO also noted that a variety of economic factors at the time \"could be masking positive macroeconomic effects of TRIA.\""], "subsections": []}, {"section_title": "After TRIA", "paragraphs": ["TRIA's \"make available\" provisions addressed the availability problem in the terrorism insurance market, as insurers were required by law to offer commercial terrorism coverage. However, significant uncertainty existed as to how businesses would react, because there was no general requirement to purchase terrorism coverage and the pricing of terrorism coverage was initially high. Analyzing the terrorism insurance market in the aftermath of TRIA is challenging as well since there was no consistent regulatory reporting by insurers until P.L. 114-1 required detailed reporting, which Treasury began in 2016. Before this time, data on terrorism insurance typically stemmed from insurance industry surveys or rating bureaus. In examining the terrorism insurance market since TRIA, it is also important to note that no terrorist attacks have occurred that reached TRIA thresholds, thus property and casualty insurance has not made any large scale payouts for terrorism damages.", "The initial consumer reaction to the terrorism coverage offers was relatively subdued. Marsh, Inc., a large insurance broker, reported that 27% of their clients bought terrorism insurance in 2003. This take-up rate, however, climbed relatively quickly to 49% in 2004 and 58% in 2005. Marsh reported that, since 2005, the overall take-up rate has remained near 60%, with Marsh reporting a rate of 62% in 2017. The Treasury reports based on industry data calls have found similar or higher take-up rates. For 2017, Treasury found that the take-up rate based on premium volumes was 62%, whereas based on policy counts, the rate was 78%.", "The price for terrorism insurance has appeared to decline over time, although the level of pricing reported may not always be comparable between sources. The 2013 report by the President's Working Group on Financial Markets, based on survey data by insurance broker Aon, showed a high of above 7% for the median terrorism premium as a percentage of the total property premium in 2003, with a generally downward trend, and more recent values around 3%. The trend may be downward, but there has been variability, particularly across industries. For example, Marsh reported rates in 2009 as high as 24% of the property premium for financial institutions and as low as 2% in the food and beverage industry. In the 2013 Marsh report, this variability was lower as 2012 rates varied from 7% in the transportation industry and the hospitality and gaming industry to 1% in the energy and mining industry. In 2017, Marsh found rates varying from 10% in hospitality and gaming to 2% in energy and mining and construction industries. The 2018 Treasury report, based on lines of insurance, not on industry category, found premiums varying from 6.1% in excess workers' compensation to 1.4% in ocean marine in 2017. ", "Treasury found that the total premium amount paid for terrorism coverage in 2017 was approximately $3.65 billion, or 1.75%, of the $209.15 billion in total premiums for TRIA-eligible lines of insurance. Since the passage of TRIA, Treasury estimates that a total of approximately $38 billion was earned for terrorism coverage by non-related insurers, with another $7.4 billion earned by captive insurers (which are insurers who are owned by the insureds). ", "In general, the capacity of insurers to bear terrorism risk has increased over the life of the TRIA program. The combined policyholder surplus among all U.S. property and casualty insurers was $686.9 billion at the end of 2017 compared to $408.6 billion (inflation adjusted) at the start of 2002. This $686.9 billion has been bolstered by the estimated $38 billion in premiums paid for terrorism coverage over the years without significant claims payments. The policyholder surplus, however, backs all property and casualty insurance policies in the United States and is subject to depletion in a wide variety of events. For example, extreme weather losses could particularly draw capital away from the terrorism insurance market, because events such as hurricanes share some characteristics\u2014low frequency and the possibility of catastrophic levels of loss\u2014with terrorism risk."], "subsections": []}]}, {"section_title": "Evolution of Terrorism Risk Insurance Laws", "paragraphs": [" Table 1 presents a side-by-side comparison of selected provisions from the original TRIA law, along with the reauthorizing laws of 2005, 2007, and 2015."], "subsections": [{"section_title": "Appendix. Calculation of TRIA Recoupment Amounts", "paragraphs": [" Table A-1 contains illustrative examples of how the recoupment for the government portion of terrorism losses under TRIA might be calculated in the aggregate for various sizes of losses. The total amount of the combined deductibles in the table is simply assumed to be 30% of the insured losses for illustrative purposes. (The actual deductible amount is, as detailed above, based on the total amount of premiums collected by each insurer.) Without knowing the actual distribution of losses due to a terrorist attack, it is impossible to know what the actual total combined deductible amount would be. Table conclusions with regard to recoupment, however, hold across different actual deductible amounts. ", "The specific provisions of the law define the \"insurance marketplace aggregate retention amount\" (Column F) for 2019 as the lesser of $37.5 billion or the total amount of insured losses (Column A). The \"mandatory recoupment amount\" (Column G) is defined as the difference between $37.5 billion and the aggregate insurer losses that were not compensated for by the program (i.e., the total of the insurers' deductible (Column B) and their 19% loss share (Column C)). If the aggregate insured loss is less than $37.5 billion, the law requires recoupment of 140% of the government outlays (Column H). For insured losses over $37.5 billion, the mandatory recoupment amount decreases, thus the Secretary would be required to recoup less than 133% of the outlays. Depending on the precise deductible amounts, the uncompensated industry losses (Column D) may eventually rise to be greater than $37.5 billion, which would then mean that the mandatory recoupment provisions would not apply. The Secretary would still retain discretionary authority to apply recoupment surcharges no matter what level uncompensated losses reached."], "subsections": []}]}]}}
{"id": "R45701", "title": "Selected Homeland Security Issues in the 116th Congress", "released_date": "2019-04-26T00:00:00", "summary": ["In 2001, in the wake of the terrorist attacks of September 11, \"homeland security\" went from being a concept discussed among a relatively small cadre of policymakers and strategic thinkers to one broadly discussed among policymakers, including a broad swath of those in Congress. Debates over how to implement coordinated homeland security policy led to the passage of the Homeland Security Act of 2002 (P.L. 107-296), the establishment of the Department of Homeland Security (DHS), and extensive legislative activity in the ensuing years.", "Initially, homeland security was largely seen as counterterrorism activities. Today, homeland security is a broad and complex network of interrelated issues, in policymaking terms. For example, in its executive summary, the Quadrennial Homeland Security Review issued in 2014 delineated the missions of the homeland security enterprise as follows: prevent terrorism and enhance security; secure and manage the borders; enforce and administer immigration laws; safeguard and secure cyberspace; and strengthen national preparedness and resilience.", "This report compiles a series of Insights by CRS experts across an array of homeland security issues that may come before the 116th Congress. Several homeland security topics are also covered in CRS Report R45500, Transportation Security: Issues for the 116th Congress.", "The information contained in the Insights only scratches the surface of these selected issues. Congressional clients may obtain more detailed information on these topic and others by contacting the relevant CRS expert listed in CRS Report R45684, Selected Homeland Security Issues in the 116th Congress: CRS Experts."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "The Budget and Homeland Security", "paragraphs": ["(William L. Painter; February 28, 2019)", "Congress at times has sought to ascertain how much the government spends on securing the homeland, either in current terms or historically. Several factors compromise the authoritativeness of any answer to this question. One such complication is the lack of a consensus definition of what constitutes home land security, and another is that homeland security activities are carried out across the federal government, in partnership with other public and private sector entities. This insight examines those two complicating factors, and presents what information is available on historical homeland security budget authority and current DHS appropriations. "], "subsections": [{"section_title": "Defining Homeland Security", "paragraphs": ["No statutory definition of homeland security reflects the breadth of the current enterprise. The Department of Homeland Security is not solely dedicated to homeland security missions, nor is it the only part of the federal government with homeland security responsibilities.", "The concept of homeland security in U.S. policy evolved over the last two decades. Homeland security as a policy concept was discussed before the terrorist attacks of September 11, 2001. Entities like the Gilmore Commission and the Hart-Rudman Commission discussed the need to evolve national security thinking in response to the increasing relative risks posed by nonstate actors, including terrorist groups. After 9/11, policymakers concluded that a new approach was needed to address these risks. A presidential council and department were established, and a series of presidential directives were issued in the name of \"homeland security.\" These efforts defined homeland security as a response to terrorism. Later, multilevel government responses to disasters such as Hurricane Katrina expanded the concept of homeland security to include disasters, public health emergencies, and other events that threaten the United States, its economy, the rule of law, and government operations. Some criminal justice elements could arguably be included in a broad definition of homeland security. This evolution of the concept of homeland security made it distinct from other federal government security operations such as homeland defense.", "Homeland defense is primarily a Department of Defense (DOD) activity and is defined by DOD as \"... the protection of U.S. sovereignty, territory, domestic population, and critical defense infrastructure against external threats and aggression, or other threats as directed by the President.\" Homeland security, on the other hand, is a more broadly coordinated effort, involving not only military activities, but the operations of civilian agencies at all levels of government. "], "subsections": []}, {"section_title": "The Federal Homeland Security Enterprise", "paragraphs": ["The Homeland Security Act of 2002 established the Department of Homeland Security (DHS). The department was assembled from components pulled from 22 different government agencies and began official operations on March 1, 2003. Since then, DHS has undergone a series of restructurings and reorganizations to improve its effectiveness.", "Although DHS does include many of the homeland security functions of the federal government, several of these functions or parts of these functions remain at their original executive branch agencies and departments, including the Departments of Justice, State, Defense, and Transportation. Not all of the missions of DHS are officially \"homeland security\" missions. Some DHS components have legacy missions that do not directly relate to conventional homeland security definitions, such as the Coast Guard, and Congress has in the past debated whether FEMA and its disaster relief and recovery missions belong in the department."], "subsections": []}, {"section_title": "Analyzing Costs Across Government", "paragraphs": ["Section 889 of the Homeland Security Act of 2002 required the President's annual budget request to include an analysis of homeland security funding across the federal government\u2014not just DHS. This requirement remained in effect through the FY2017 funding cycle. The resulting data series, which included agency-reported data on spending in three categories\u2014preventing and disrupting terrorist attacks; protecting the American people, critical infrastructure, and key resources; and responding to and recovering from incidents\u2014provides a limited snapshot of the scope of the federal government's investment in homeland security.", "According to these data, from FY2003 through FY2017, the entire U.S. government directed roughly $878 billion (in nominal dollars of budget authority) to those three mission sets. Annual budget authority rose from roughly $41 billion in FY2003 to a peak in FY2009 of almost $74 billion. After that peak, reported annual homeland security budget authority hovered between $66 billion and $73 billion. Thirty different agencies reported having some amount of homeland security budget authority.", "One can compare this growth in homeland security budget authority to the budget authority provided to DHS. The enacted budget for DHS rose from an Administration-projected $31.2 billion in FY2003, to almost $68.4 billion in FY2017."], "subsections": []}, {"section_title": "FY2019 DHS Appropriations", "paragraphs": ["For FY2019, the Trump Administration initially requested almost $75 billion in budget authority for DHS, including over $47 billion in adjusted net discretionary budget authority through the appropriations process. This included almost $7 billion to pay for the costs of major disasters under the Stafford Act. The Administration requested additional Overseas Contingency Operations (OCO) funding for the Coast Guard as a transfer from the U.S. Navy. Neither the Senate nor the House bill reported out of their respective appropriations committees in response to that request received floor consideration. ", "Continuing appropriations expired on December 21, 2018, leading to a 35-day partial shutdown of federal government components without enacted annual appropriations\u2014including DHS. This was the longest such shutdown in the history of the U.S. government. On February 15, the President signed into law P.L. 116-5 , which included the FY2019 DHS annual appropriations act. The act included almost $56 billion in adjusted net discretionary budget authority, including $12 billion for the costs of major disasters, and $165 million for Coast Guard OCO funding. ", "The current budget environment may present challenges to homeland security programs and DHS going forward. The funding demands of ongoing capital investment efforts, such as the proposed border wall and ongoing recapitalization efforts, and staffing needs for cybersecurity, border security, and immigration enforcement, may compete with one another for limited funding across the government and within DHS."], "subsections": []}]}, {"section_title": "The U.S. Intelligence Community", "paragraphs": ["(Michael E. DeVine; February 1, 2019)", "Intelligence support of homeland security is a primary mission of the entire Intelligence Community (IC). In fulfilling this mission, changes to IC organization and process, since 9/11, have enabled more integrated and effective support than witnessed or envisioned since its inception. The terrorist attacks of 9/11 revealed how barriers between intelligence and law enforcement, which originally had been created to protect civil liberties, had become too rigid, thus preventing efficient, effective coordination against threats. In its final report, the Commission on Terrorist Attacks upon the United States (the 9/11 Commission ) identified how these barriers contributed to degrading U.S. national security. The findings resulted in Congress and the executive branch enacting legislation and providing policies and regulations designed to enhance information sharing across the U.S. government.", "The Homeland Security Act of 2002 ( P.L. 107-296 ) gave the Department of Homeland Security (DHS) responsibility for integrating law enforcement and intelligence information relating to terrorist threats to the homeland. Provisions in the Intelligence Reform and Terrorist Prevention Act (IRTPA) of 2004 ( P.L. 108-458 ) established the National Counterterrorism Center (NCTC) as the coordinator at the federal level for terrorism information and assessment and created the position of Director of National Intelligence (DNI) to provide strategic management across the 17 organizational elements of the IC. New legal authorities accompanied these organizational changes. At the federal, state, and local levels, initiatives to improve collaboration across the federal government include the FBI-led Joint Terrorism Task Forces (JTTFs) and, more recently, the DHS National Network of Fusion Centers (NNFC).", "Within the IC, the FBI Intelligence Branch (FBI/IB), and DHS's Office of Intelligence and Analysis (OIA), and the Coast Guard Intelligence (CG-2) enterprise, are most closely associated with homeland security. OIA combines information collected by DHS components as part of their operational activities (i.e., those conducted at airports, seaports, and the border) with foreign intelligence from the IC; law enforcement information from federal, state, local, territorial and tribal sources; and private sector data about critical infrastructure and strategic resources. OIA analytical products focus on a wide range of threats to the homeland to include foreign and domestic terrorism, border security, human trafficking, and public health. OIA's customers range from the U.S. President to border patrol agents, Coast Guard personnel, airport screeners, and local first responders. Much of the information sharing is done through the NNFC\u2014with OIA providing personnel, systems, and training.", "The Coast Guard Intelligence (CG-2) enterprise is the intelligence component of the United States Coast Guard (USCG). It serves as the primary USCG interface with the IC on intelligence policy, planning, budgeting and oversight matters related to maritime security and border protection. CG-2 has a component Counterintelligence Service, a Cryptologic Group, and an Intelligence Coordination Center to provide analysis and supporting products on maritime border security. CG-2 also receives support from field operational intelligence components including the Atlantic and Pacific Area Intelligence Divisions, Maritime Intelligence Fusion Centers for the Atlantic and Pacific, and intelligence staffs supporting Coast Guard districts and sectors.", "FBI/IB includes four component organizations:", "The Directorate of Intelligence has responsibility for all FBI intelligence functions, and includes intelligence elements and personnel at FBI Headquarters in field divisions. The Office of Partner Engagement develops and maintains intelligence sharing relationships across the IC, and with state, local, tribal, territorial, and international partners. The Office of Private Sector conducts outreach to businesses impacted by threats to vulnerable sectors of the economy such as critical infrastructure, the supply chain, and financial institutions. Finally, the Bureau Intelligence Council provides internal to the FBI a forum for senior-level dialogue on integrated assessments of domestic threats.", "While the intelligence organizations of FBI and DHS are the only IC elements solely dedicated to intelligence support of homeland security, all IC elements, to varying degrees, have some level of responsibility for the overarching mission of homeland security. For example, in addition to NCTC, the Office of the DNI (ODNI) includes the Cyber Threat Intelligence Integration Center (CTIIC). It was established in 2015 and is responsible at the federal level for providing all - source analysis of intelligence relating to cyber threats to the United States. Much like NCTC for terrorism, CTIIC provides outreach to other intelligence organizations across the federal government and at the state, and local levels to facilitate intelligence sharing and provide an integrated effort for assessing and providing warning of cyber threats to the homeland.", "IC organizational developments since 9/11 underscore the importance of adhering to privacy and civil liberties protections that many feared might be compromised by the more integrated approach to intelligence and law enforcement. This is particularly true considering the changing nature of the threat: The focus of intelligence support of homeland security has evolved from state-centric to increasingly focusing on nonstate actors, often individuals acting alone or as part of a group not associated with any state. Collecting against these threats, therefore, requires strict adherence to intelligence oversight rules and regulations, and annual training by the IC workforce for the protection of privacy and civil liberties."], "subsections": []}, {"section_title": "Homeland Security Research and Development", "paragraphs": ["(Daniel Morgan; January 22, 2019)"], "subsections": [{"section_title": "Overview", "paragraphs": ["In the Department of Homeland Security (DHS), the Directorate of Science and Technology (S&T) has primary responsibility for establishing, administering, and coordinating research and development (R&D) activities. The Domestic Nuclear Detection Office (DNDO) is responsible for R&D relating to nuclear and radiological threats. Several other DHS components, such as the Coast Guard, also fund R&D and R&D-related activities associated with their missions. The Common Appropriations Structure that DHS introduced in its FY2017 budget includes an account titled Research and Development in seven different DHS components. Issues for DHS R&D in the 116 th Congress may include coordination, organization, and impact."], "subsections": []}, {"section_title": "Coordination of R&D", "paragraphs": ["The Under Secretary for S&T, who leads the S&T Directorate, has statutory responsibility for coordinating homeland security R&D both within DHS and across the federal government (6 U.S.C. \u00a7182). The Director of DNDO also has an interagency coordination role with respect to nuclear detection R&D (6 U.S.C. \u00a7592). Both internal and external coordination are long-standing congressional interests.", "Regarding internal coordination, the Government Accountability Office (GAO) concluded in a 2012 report that because so many components of the department are involved, it is difficult for DHS to oversee R&D department-wide. In January 2014, the joint explanatory statement for the Consolidated Appropriations Act, 2014 ( P.L. 113-76 ) directed DHS to implement and report on new policies for R&D prioritization. It also directed DHS to review and implement policies and guidance for defining and overseeing R&D department-wide. In July 2014, GAO reported that DHS had updated its guidance to include a definition of R&D and was conducting R&D portfolio reviews across the department, but that it had not yet developed policy guidance for DHS-wide R&D oversight, coordination, and tracking. In December 2015, the joint explanatory statement for the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ) stated that DHS \"lacks a mechanism for capturing and understanding research and development (R&D) activities conducted across DHS, as well as coordinating R&D to reflect departmental priorities.\"", "A challenge for external coordination is that the majority of homeland security-related R&D is conducted by other agencies, most notably the Department of Defense and the Department of Health and Human Services. The Homeland Security Act of 2002 directs the Under Secretary for S&T, \"in consultation with other appropriate executive agencies,\" to develop a government-wide national policy and strategic plan for homeland security R&D (6 U.S.C. \u00a7182), but no such plan has ever been issued. Instead, the S&T Directorate has developed R&D plans with selected individual agencies, and the National Science and Technology Council (a coordinating entity in the Executive Office of the President) has issued government-wide R&D strategies in selected topical areas, such as biosurveillance."], "subsections": []}, {"section_title": "Organization for R&D", "paragraphs": ["DHS has reorganized its R&D-related activities several times. In December 2017, it established a new Countering Weapons of Mass Destruction Office (CWMDO), consolidating DNDO, most functions of the Office of Health Affairs (OHA), and some other elements. DNDO and OHA were themselves both created, more than a decade ago, largely by reorganizing elements of the S&T Directorate. The Countering Weapons of Mass Destruction Act of 2018 ( P.L. 115-387 ) expressly authorized the establishment and activities of CWMDO. The 116 th Congress may examine the implementation of that act. ", "The organization of DHS laboratory facilities may also be a focus of attention in the 116 th Congress. At its establishment, the S&T Directorate acquired laboratories from other departments, including the Plum Island Animal Disease Center (from the Department of Agriculture) and the National Urban Security Technology Laboratory, then known as the Environmental Measurements Laboratory (from the Department of Energy). It subsequently absorbed some laboratory facilities from other DHS components (such as the Transportation Security Laboratory from the Transportation Security Administration), but other DHS components retained their own laboratories (such as the U.S. Coast Guard Research and Development Center). During the 115 th Congress, the Federal Bureau of Investigation agreed to assume some of the operational costs of the S&T Directorate's National Biodefense Analysis and Countermeasures Center, and DHS proposed to transfer operational responsibility for the National Bio and Agro-Defense Facility\u2014a biocontainment laboratory currently being built by the S&T Directorate in Manhattan, Kansas\u2014to the Department of Agriculture."], "subsections": []}, {"section_title": "Impact of R&D Results", "paragraphs": ["In testimony at a Senate hearing in 2018, the Administration's nominee to be Under Secretary for S&T described the S&T Directorate's mission as \"to deliver results\" and referred to \"timely delivery and solid return on investment.\" Members of Congress and other stakeholders have sometimes questioned the impact of DHS R&D programs and whether enough of their results are ultimately implemented in products actually used in the U.S. homeland security enterprise. Part of the debate has been about finding the right balance between near-term and long-term goals. In testimony at House hearing in 2017, a former Under Secretary for S&T stated that the directorate \"has worked hard to focus on being highly relevant\u2014shifting from the past focus on long-term basic research to near-term operational impact.\" Yet testimony from an industry witness at the same House hearing stated that \"there is a perception among some in the industry that S&T programs only infrequently significantly impact the operational or procurement activities of the DHS components.\" The 116 th Congress may continue to examine the effectiveness and impact of DHS R&D."], "subsections": []}]}, {"section_title": "National Strategy for Counterterrorism", "paragraphs": ["(John W. Rollins, January 29, 2019)", "On October 4, 2018, President Trump released his Administration's first National Strategy for Counterterrorism. The overarching goal of the strategy is to \"defeat the terrorists who threaten America's safety, prevent future attacks, and protect our national interests.\" In describing the need for this strategy, National Security Advisor John Bolton stated that the terrorist \"landscape is more fluid and complex than ever\" and that the strategy will not \"focus on a single organization but will counter all terrorists with the ability and intent to harm the United States, its citizens and our interests.\" The strategy states that a \" new approach \" will be implemented containing six primary thematic areas of focus: (1) pursuing terrorists to their source; (2) isolating terrorists from their sources of support; (3) modernizing and integrating the United States' counterterrorism authorities and tools; (4) protecting American infrastructure and enhancing resilience; (5) countering terrorist radicalization and recruitment; and (6) strengthening the counterterrorism abilities of U.S. international partners. In announcing the strategy, President Trump stated, \"When it comes to terrorism, we will do whatever is necessary to protect our Nation.\"", "In contrast, former President Obama's final National Strategy for Counterterrorism, published on June 28, 2011, primarily focused on global terrorist threats emanating from Al Qaeda and associated entities. The overarching goal of this strategy was to \"disrupt, dismantle, and eventually defeat Al Qaeda and its affiliates and adherents to ensure the security of our citizens and interests.\" This strategy stated that the \"preeminent security threat to the United States continues to be from Al Qaeda and its affiliates and adherents.\" The strategy focused on the threats posed by geographic dispersal of Al Qaeda, its affiliates, and adherents, and identified principles that would guide United States counterterrorism efforts: Adhering to Core Values, Building Security Partnerships, Applying Tools and Capabilities Appropriately, and Building a Culture of Resilience. In announcing the release of this strategy, President Obama included a quote from the speech he gave announcing the killing of Osama Bin Laden, \"As a country, we will never tolerate our security being threatened, nor stand idly by when our people have been killed. We will be relentless in defense of our citizens and our friends and allies. We will be true to the values that make us who we are. And on nights like this one, we can say to those families who have lost loved ones to Al Qaeda's terror: Justice has been done.\"", "Since President Trump's Counterterrorism Strategy was published, many security observers have pointed to the similarities and differences between the two Administration's approaches to counterterrorism. Table 1 , below, presents the language contained in each strategy identifying major thematic aspects of the two counterterrorism strategies."], "subsections": []}, {"section_title": "Energy Infrastructure Security", "paragraphs": ["(Paul Parfomak; March 1, 2019)", "Ongoing threats against the nation's natural gas, oil, and refined product pipelines have heightened concerns about the security risks to these pipelines, their linkage to the electric power sector, and federal programs to protect them. In a December 2018 study, the Government Accountability Office (GAO) stated that, since the terrorist attacks of September 11, 2001, \"new threats to the nation's pipeline systems have evolved to include sabotage by environmental activists and cyber attack or intrusion by nations.\" In a 2018 Federal Register notice, the Transportation Security Administration stated that it expects pipeline companies will report approximately 32 \"security incidents\" annually\u2014both physical and cyber. The Pipeline and LNG Facility Cybersecurity Preparedness Act ( H.R. 370 , S. 300 ) would require the Secretary of Energy to enhance coordination among government agencies and the energy sector in pipeline security; coordinate incident response and recovery; support the development of pipeline cybersecurity applications, technologies, demonstration projects, and training curricula; and provide technical tools for pipeline security."], "subsections": [{"section_title": "Pipeline Physical Security", "paragraphs": ["Congress and federal agencies have raised concerns since at least 2010 about the physical security of energy pipelines, especially cross-border oil pipelines. These security concerns were heightened in 2016 after environmentalists in the United States disrupted five pipelines transporting oil from Canada. In 2018, the Transportation Security Administration's Surface Security Plan identified improvised explosive devices as key risks to energy pipelines, which \"are vulnerable to terrorist attacks largely due to their stationary nature, the volatility of transported products, and [their] dispersed nature.\" Among these risks, according to some analysts, are the possibility of multiple, coordinated attacks with explosives on the natural gas pipeline system, which potentially could \"create unprecedented challenges for restoring gas flows.\""], "subsections": []}, {"section_title": "Pipeline Cybersecurity", "paragraphs": ["As with any internet-enabled technology, the computer systems used to operate much of the pipeline system are vulnerable to outside manipulation. An attacker can exploit a pipeline control system in a number of ways to disrupt or damage pipelines. Such cybersecurity risks came to the fore in 2012 after reports of a series of cyber intrusions among U.S. natural gas pipeline operators. In April 2018, new cyberattacks reportedly caused the shutdown of the customer communications systems (separate from operation systems) at four of the nation's largest natural gas pipeline companies. Most recently, in January 2019, congressional testimony by the Director of National Intelligence singled out gas pipelines as critical infrastructure vulnerable to cyberattacks which could cause disruption \"for days to weeks.\""], "subsections": []}, {"section_title": "Pipeline and Electric Power Interdependency", "paragraphs": ["Pipeline cybersecurity concerns are exacerbated by growing interdependency between the pipeline and electric power sectors. A 2017 Department of Energy (DOE) staff report highlighted the electric power sector's growing reliance upon natural gas-fired generation and, as a result, security vulnerabilities associated with pipeline gas supplies. These concerns were echoed in a June 2018 op-ed by two commissioners on the Federal Energy Regulatory Commission (FERC) who wrote, \"as \u2026 natural gas has become a major part of the fuel mix, the cybersecurity threats to that supply have taken on new urgency.\" A November 2018 report by the PJM regional transmission organization concluded that \"while there is no imminent threat,\" the security of generation fuel supplies, especially natural gas and fuel oil, \"has become an increasing area of focus.\" In a February 2019 congressional hearing on electric grid security, the head of the North American Electric Reliability Corporation (NERC) testified that pipeline and electric grid interdependency \"is fundamental\" to security."], "subsections": []}, {"section_title": "The Federal Pipeline Security Program", "paragraphs": ["The Transportation Security Administration (TSA) within the Department of Homeland Security (DHS) administers the federal program for pipeline security. The Aviation and Transportation Security Act of 2001 ( P.L. 107-71 ), which established TSA, authorized the agency \"to issue, rescind, and revise such regulations as are necessary\" to carry out its functions (\u00a7101). The Implementing Recommendations of the 9/11 Commission Act of 2007 ( P.L. 110-53 ) directs TSA to promulgate pipeline security regulations and carry out necessary inspection and enforcement if the agency determines that regulations are appropriate (\u00a71557(d)). However, to date, TSA has not issued such regulations, relying instead upon industry compliance with voluntary guidelines for pipeline physical and cybersecurity. The pipeline industry maintains that regulations are unnecessary because pipeline operators have voluntarily implemented effective physical and cybersecurity programs. The 2018 GAO study identified a number of weaknesses in the TSA program, including inadequate staffing, outdated risk assessments, and uncertainty about the content and effectiveness of its security standards.", "In fulfilling its responsibilities, TSA cooperates with the Department of Transportation's (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA)\u2014the federal regulator of pipeline safety\u2014under the terms of a 2004 memorandum of understanding (MOU) and a 2006 annex to facilitate transportation security collaboration. TSA also cooperates with DOE's recently established Office of Cybersecurity, Energy Security, and Emergency Response (CESER), whose mission includes \"emergency preparedness and coordinated response to disruptions to the energy sector, including physical and cyber-attacks.\" TSA also collaborates with the Office of Energy Infrastructure Security at the Federal Energy Regulatory Commission\u2014the agency which regulates the reliability and security of the bulk power electric grid. "], "subsections": []}, {"section_title": "Issues for Congress", "paragraphs": ["Over the last few years, most debate about the federal pipeline security program has revolved around four principal issues. Some in Congress have suggested that TSA's current pipeline security authority and voluntary standards approach may be appropriate, but that the agency may require greater resources to more effectively carry out its mission. Others stakeholders have debated whether security standards in the pipeline sector should be mandatory\u2014as they are in the electric power sector\u2014especially given their growing interdependency. Still others have questioned whether any of TSA's regulatory authority over pipeline security should move to another agency, such as the DOE, DOT, or FERC, which they believe could be better positioned to execute it. Concern about the quality, specificity, and sharing of information about pipeline threats also has been an issue."], "subsections": []}]}, {"section_title": "U.S. Secret Service Protection of Persons and Facilities", "paragraphs": ["(Shawn Reese; March 6, 2019)", "Congress has historically legislated and conducted oversight on the U.S. Secret Service (USSS) because of USSS' public mission of protecting individuals such as the President and his family, and the USSS mission of investigating financial crimes. Most recently, the 115 th Congress conducted oversight on challenges facing the Service and held hearings on legislation that addressed costs associated with USSS protective detail operations and special agents' pay. These two issues remain pertinent in the 116 th Congress due to recent, but failed, attacks on USSS protectees, and the media's and public's attention on the cost the USSS incurs while protecting President Donald Trump and his family. "], "subsections": [{"section_title": "USSS Protection Operations and Security Breaches", "paragraphs": ["In October 2018, attempted bombings targeted former President Barack Obama, former Vice President Joe Biden, and former First Lady Hillary Clinton. Prior to these attempted attacks, the media reported other USSS security breaches, including two intruders (March and October 2017) climbing the White House fence, and the USSS losing a government laptop that contained blueprints and security plans for the Trump Tower in New York City. Various security breaches during President Obama's Administration resulted in several congressional committee hearings.", "Presidential safety is and has been a concern throughout the nation's history. For example, fears of kidnapping and assassination threats to Abraham Lincoln began with his journey to Washington, DC, for the inauguration in 1861. Ten Presidents have been victims of direct assaults by assassins, with four resulting in death. Since the USSS started protecting Presidents in 1906, seven assaults have occurred, with one resulting in death (President John F. Kennedy). 18 U.S.C. Section 3056(a) explicitly identifies the following individuals authorized for USSS protection: ", "President, Vice President, President- and Vice President-elect; immediate families of those listed above; former Presidents, their spouses, and their children under the age of 16; former Vice Presidents, their spouses, and their children under the age of 16; visiting heads of foreign states or governments; distinguished foreign visitors and official U.S. representatives on special missions abroad; and major presidential and vice presidential candidates within 120 days of the general presidential elections, and their spouses."], "subsections": []}, {"section_title": "USSS Protection Costs", "paragraphs": ["Regardless of the location of protectees or costs associated with protective detail operations, the USSS is statutorily required to provide full-time security. Congress has reinforced this requirement in the past. In 1976, Congress required the USSS to not only secure the White House, but also the personal residences of the President and Vice President. However, the costs incurred by the USSS during the Trump Administration have generated interest and scrutiny. This includes the USSS leasing property from President Trump, and the frequency with which President Trump and his family have traveled. ", "Reportedly, the USSS leased property in Trump Tower in New York City. The USSS informed CRS that leasing property from a protectee is not a new requirement with the Trump Administration, but the USSS would neither confirm nor deny leasing Trump Tower property. The USSS stated that it has leased a structure in the past at former Vice President Joe Biden's personal home in Delaware to conduct security operations. The USSS will not confirm if it is still leasing this property.", "Another protection cost issue other than leasing property from protectees is the overall cost of protective detail operations. One aspect of protective detail operations that has garnered attention from the media and the public is President Trump's and his family's travel. Some question whether the President and his family have traveled more than other Presidents and their families and what, if any, impact that has on security costs. The security cost of this travel is difficult to assess, because the USSS is required to provide only annual budget justification information on \"Protection of Persons and Facilities.\" The USSS does not provide specific costs related to individual presidential, or immediate family travel. The USSS states that it does not provide specific costs associated with protectee protection due to the information being a security concern."], "subsections": []}, {"section_title": "Conclusion", "paragraphs": ["USSS security operations and the costs associated with these operations represent consistent issues of congressional concern. USSS protectees have been\u2014and may continue to be\u2014targeted by assassins. Congress may wish to consider USSS protection issues within this broader context as it conducts oversight and considers funding for the ever-evolving threats to USSS protectees and the rapidly changing technology used in USSS security operations."], "subsections": []}]}, {"section_title": "Protection of Executive Branch Officials", "paragraphs": ["(Shawn Reese; February 19, 2019)", "Due to the October 2018 attempted bombing attacks on current and former government officials (and others), there may be congressional interest in policy issues surrounding protective details for government officials. Attacks against political leaders and other public figures have been a consistent security issue in the United States. According to a 1998 U.S. Marshals Service (USMS) report, data on assassinations and assassination attempts against federal officials suggest that elected officials are more likely to be targeted than those holding senior appointed positions. Congress also may be interested due to media reports of costs or budgetary requests associated with funding security details for the heads of some departments and agencies, including the Department of Education, the Department of Labor, and the Environmental Protection Agency. ", "In a 2000 report, the Government Accountability Office (GAO) stated that it was able to identify only one instance when a Cabinet Secretary was physically harmed as a result of an assassination attempt. This occurred when one of the Lincoln assassination conspirators attacked then-Secretary of State William Seward in his home in 1865. Even with few attempted attacks against appointed officials, GAO reported that federal law enforcement entities have provided personal protection details (PPDs) to selected executive branch officials since at least the late 1960s. In total, GAO reported that from FY1997 through FY1999, 42 officials at 31 executive branch agencies received security protection. Personnel from 27 different agencies protected the 42 officials: personnel from their own agencies or departments protected 36 officials, and personnel from other agencies or departments, such as the U.S. Secret Service (USSS) and the USMS, protected the remaining 6 officials. This Insight provides a summary of the statutory authority for executive branch official security, a Trump Administration proposal to consolidate this security under the USMS, and issues for congressional consideration."], "subsections": [{"section_title": "Statutory Authority for Protection", "paragraphs": ["The USSS and the State Department are the only two agencies that have specific statutory authority to protect executive branch officials. The USSS is authorized to protect specific individuals under 18 U.S.C. \u00a73056(a); the State Department's Diplomatic Security Service special agents are authorized to protect specific individuals under 22 U.S.C. \u00a72709(a)(3).", "In 2000, GAO reported that other agencies providing protective security details to executive branch officials cited various other legal authorities. These authorities included the Inspector General Act of 1978 (5 U.S.C., App. 3), a specific delegation of authority set forth in 7 C.F.R. \u00a72.33(a)(2), and a 1970 memorandum from the White House Counsel to Cabinet departments."], "subsections": []}, {"section_title": "Trump Administration Proposal", "paragraphs": ["The Trump Administration proposed consolidating protective details at certain civilian executive branch agencies under the USMS to more effectively and efficiently monitor and respond to potential threats. This proposal was made in an attempt to standardize executive branch official protection in agencies that currently have USMS security details or have their own employees deputized by the USMS. This proposal would not affect any law enforcement or military agencies with explicit statutory authority to protect executive branch officials, such as the USSS or the Department of State's Diplomatic Security Service. ", "Threat assessments would be conducted with support from the USSS. Specifically, the Trump Administration proposed that the USMS be given the authority to manage protective security details of specified executive branch officials. These officials include the Secretaries of Education, Labor, Energy, Commerce, Veterans Affairs, Agriculture, Transportation, Housing and Urban Development, and the Interior; the Deputy Attorney General; and the Administrator of the Environmental Protection Agency. The Trump Administration proposed that Deputy U.S. Marshals would protect all of these Cabinet officials.", "Currently, the USMS provides Deputy U.S. Marshals only for the Secretary of Education and the Deputy Attorney General's protective details. These two departments, however, do not have explicit statutory authority for protective details. "], "subsections": []}, {"section_title": "Potential Issues for Congress", "paragraphs": ["The Administration's proposal appears to authorize the USMS to staff all protective details of executive branch officials (excluding the USSS and the Departments of State and Defense) deemed to need security, even protective security details that presently are staffed by agencies' employees. Even though the USMS implements or oversees the protection of certain executive branch officials, there appears to be no current study or research to assess the number of additional U.S. Marshals that would be needed to expand protective details to identified executive branch officials under this proposal. Additionally, the proposal does not address the funding that may be needed for USMS protection of executive branch officials. The proposal, however, does state that the Office of Management and Budget would coordinate with the Department of Justice and affected agencies on the budgetary implications."], "subsections": []}]}, {"section_title": "Drug Trafficking at the Southwest Border", "paragraphs": ["(Kristin Finklea; January 31, 2019)", "The United States sustains a multi-billion dollar illegal drug market. An estimated 28.6 million Americans, or 10.6% of the population age 12 or older, had used illicit drugs at least once in the past month in 2016. The 2018 National Drug Threat Assessment indicates that Mexican transnational criminal organizations (TCOs) continue to dominate the U.S. drug market. They \"remain the greatest criminal drug threat to the United States; no other group is currently positioned to challenge them.\" The Drug Enforcement Administration (DEA) indicates that these TCOs maintain and expand their influence by controlling lucrative smuggling corridors along the Southwest border and by engaging in business alliances with other criminal networks, transnational gangs, and U.S.-based gangs.", "TCOs either transport or produce and transport illicit drugs north across the U.S.-Mexico border. Traffickers move drugs through ports of entry, concealing them in passenger vehicles or comingling them with licit goods on tractor trailers. Traffickers also rely on cross-border subterranean tunnels and ultralight aircraft to smuggle drugs, as well as other transit methods such as cargo trains, passenger busses, maritime vessels, or backpackers/\"mules.\" While drugs are the primary goods trafficked by TCOs, they also generate income from other illegal activities such as the smuggling of humans and weapons, counterfeiting and piracy, kidnapping for ransom, and extortion.", "After being smuggled across the border, the drugs are distributed and sold within the United States. The illicit proceeds may then be laundered or smuggled as bulk cash back across the border. While the amount of bulk cash seized has declined over the past decade, it remains a preferred method of moving illicit proceeds\u2014along with money or value transfer systems and trade-based money laundering. More recently, traffickers have relied on virtual currencies like Bitcoin to move money more securely.", "To facilitate the distribution and local sale of drugs in the United States, Mexican drug traffickers have sometimes formed relationships with U.S. gangs. Trafficking and distribution of illicit drugs is a primary source of revenue for these U.S.-based gangs and is among the most common of their criminal activities. Gangs may work with a variety of drug trafficking organizations, and are often involved in selling multiple types of drugs.", "Current domestic drug threats, fueled in part by Mexican traffickers, include opioids such as heroin, fentanyl, and diverted or counterfeit controlled prescription drugs; marijuana; methamphetamine; cocaine; and synthetic psychoactive drugs. While marijuana remains the most commonly used illicit drug, officials are increasingly concerned about the U.S. opioid epidemic. As part of this, the most recent data show an elevated level of heroin use in the United States, including elevated overdose deaths linked to heroin and other opioids, and there has been a simultaneous increase in its availability, fueled by a number of factors including increased production and trafficking of heroin by Mexican criminal networks. Increases in Mexican heroin production and its availability in the United States have been coupled with increased heroin seizures at the Southwest border. According to the DEA, the amount of heroin seized in the United States, including at the Southwest border, has generally increased over the past decade; nationwide heroin seizures reached 7,979 kg in 2017, with 3,090 kg (39%) seized at the Southwest border, up from about 2,000 kg seized at the Southwest border a decade earlier. ", "In addition to heroin, officials have become increasingly concerned with the trafficking of fentanyl, particularly nonpharmaceutical, illicit fentanyl. Fentanyl can be mixed with heroin and/or other drugs, sometimes without the consumer's knowledge, and has been involved in an increasing number of opioid overdoses. Nonpharmaceutical fentanyl found in the United States is manufactured in China and Mexico. It is trafficked into the United States across the Southwest border or delivered through mail couriers directly from China, or from China through Canada.", "Federal law enforcement has a number of enforcement initiatives aimed at countering drug trafficking, both generally and at the Southwest border. For example, the Organized Crime Drug Enforcement Task Force (OCDETF) program targets major drug trafficking and money laundering organizations, with the intent to disrupt and dismantle them. The OCDETFs target organizations that have been identified on the Consolidated Priority Organization Targets (CPOT) List, the \"most wanted\" list of drug trafficking and money laundering organizations. In addition, the High Intensity Drug Trafficking Areas (HIDTA) program provides financial assistance to federal, state, local, and tribal law enforcement agencies operating in regions of the United States that have been deemed critical drug trafficking areas. There are 29 designated HIDTAs throughout the United States and its territories, including a Southwest border HIDTA that is a partnership of the New Mexico, West Texas, South Texas, Arizona, and San Diego-Imperial HIDTAs.", "Several existing strategies may also be leveraged to counter Southwest border drug trafficking. For instance, the National Southwest Border Counternarcotics Strategy (NSBCS), first launched in 2009, outlines domestic and transnational efforts to reduce the flow of illegal drugs, money, and contraband across the Southwest border. In addition, the 2011 Strategy to Combat Transnational Organized Crime provided the federal government's first broad conceptualization of transnational organized crime, highlighting it as a national security concern and outlining threats posed by TCOs\u2014one being the expansion of drug trafficking.", "The 116 th Congress may consider a number of options in attempting to reduce drug trafficking from Mexico to the United States. For instance, Congress may question whether the Trump Administration will continue or alter priorities set forth by existing strategies. Policymakers may also be interested in examining various federal drug control agencies' roles in reducing Southwest border trafficking. This could involve oversight of federal law enforcement and initiatives such as the OCDETF program, as well as the Office of National Drug Control Policy (ONDCP) and its role in establishing a National Drug Control Strategy and Budget, among other efforts."], "subsections": []}, {"section_title": "Border Security Between Ports of Entry", "paragraphs": ["(Audrey Singer; February 11, 2019)", "The United States' southern border with Mexico runs for approximately 2,000 miles over diverse terrain, varied population densities, and discontinuous sections of public, private, and tribal land ownership. The Department of Homeland Security (DHS) Customs and Border Protection (CBP) is primarily responsible for border security, including the construction and maintenance of tactical infrastructure, installation and monitoring of surveillance technology, and the deployment of border patrol agents to prevent unlawful entries of people and contraband into the United States (including unauthorized migrants, terrorists, firearms, narcotics, etc.). CBP's border management and control responsibilities also include facilitating legitimate travel and commerce.", "Existing statute pertaining to border security confers broad authority to DHS to construct barriers along the U.S. border to deter unlawful crossings, and more specifically directs DHS to deploy fencing along \"at least 700 miles\" of the southern border with Mexico. The primary statute is the Illegal Immigration and Immigrant Responsibility ACT (IIRIRA) as amended by the REAL ID Act of 2005 , the Secure Fence Act of 2006 , and the Consolidated Appropriations Act of 2008 .", "On January 25, 2017, President Trump issued Executive Order 13767 \"Border Security and Immigration Enforcement Improvements,\" which addresses, in part, the physical security of the southern border and instructed the DHS Secretary to \"take all appropriate steps to immediately plan, design, and construct a physical wall along the southern border, using appropriate materials and technology to most effectively achieve complete operational control.\" The order did not identify the expected mileage of barriers to be constructed. ", "The three main dimensions of border security are tactical infrastructure, surveillance technology, and personnel.", "Tactical Infrastructure. Physical barriers between ports of entry (POE) on the southern border vary in age, purpose, form, and location. GAO reports that at the end of FY2015, about one-third of the southern border, or 654 miles, had a primary layer of fencing: approximately 350 miles designed to keep out pedestrians, and 300 miles to prevent vehicles from entering. Approximately 90% of the 654 miles of primary fencing is located in the five contiguous Border Patrol sectors located in California, Arizona, and New Mexico, while the remaining 10% is in the four eastern sectors (largely in Texas) where the Rio Grande River delineates most of the border. About 82% of primary pedestrian fencing and 75% of primary vehicle fencing are considered \"modern\" and were constructed between 2006 and 2011. Across 37 discontinuous miles, the primary layer is backed by a secondary layer (pedestrian) as well as an additional 14 miles of tertiary fencing (typically to delineate property lines). No new miles of primary fencing have been constructed since the 654 miles were completed in 2015, but sections of legacy fencing and breached areas have been replaced. Additional tactical infrastructure includes roads, gates, bridges, and lighting designed to support border enforcement, and to disrupt and impede illicit activity. ", "Surveillance Technology. To assist in the detection, identification, and apprehension of individuals illegally entering the United States between POEs, CBP also maintains border surveillance technology. Ground technology includes sensors, cameras, and radar tailored to fit specific terrain and population densities. Aerial and marine surveillance vessels, manned and unmanned, patrol inaccessible regions. ", "Personnel. Approximately 19,500 Border Patrol agents were stationed nationwide, with most (16,600) at the southern border in FY2017. Subject to available appropriations, Executive Order 13767 calls on CBP to take appropriate action to hire an additional 5,000 Border Patrol agents. However, CBP continues to face challenges attaining statutorily established minimum staffing levels for its Border Patrol positions despite increased recruitment and retention efforts.", "Southern border security may be improved by changes to tactical infrastructure, surveillance technology, and personnel. A challenge facing policymakers is in determining the optimal mix of border security strategies given the difficulty of measuring the effectiveness of current efforts. While the number of apprehensions of illegal entrants has long been used to measure U.S. Border Patrol performance, it does not measure illegal border crossers who evade detection by the Border Patrol. When apprehensions decline, whether it is due to fewer illegal entrants getting caught or fewer attempting to enter illegally is not known. Other difficulties include measuring the contribution of any single border security component in isolation from the others, assessing the extent to which enforcement actions deter illegal crossing attempts, and evaluating ongoing enforcement efforts outside of border-specific actions and their impact on border security.", "Section 1092 of the FY2017 National Defense Authorization Act (NDAA) directs the Secretary of Homeland Security to provide annual metrics on border security that are intended to help address some of the challenges of measuring the impact of border security efforts. DHS has produced baseline estimates that go beyond apprehensions statistics to measure progress towards meeting the goals contained in Executive Order 13767.", "Congress, through CBP appropriations\u2014and appropriations to its predecessor agency, the Immigration and Naturalization Service (INS)\u2014has invested in tactical infrastructure, surveillance technology, and personnel since the 1980s. Given the changing level of detail and structure of appropriations for border infrastructure over time, it is not possible to develop a consistent history of congressional appropriations specifically for border infrastructure. However, CBP has provided the Congressional Research Service (CRS) with some historical information on how it has allocated funding for border barrier planning, construction, and operations and support. Between FY2007 and FY2018, CBP allocated just over $5.0 billion to these activities, including almost $1.4 billion specifically for border barrier construction and improvement through a new \"Wall Program\" activity in its FY2018 budget. ", "The 116 th Congress is considering a mix of tactical infrastructure, including fencing, surveillance technologies, and personnel to enhance border security between U.S. POEs. Some experts have warned that the northern border may need more resources and oversight than it is currently receiving in light of potential national security risks. Other border security priorities that may be considered during the 116 th Congress include improvements to existing facilities and screening and detection capacity at U.S. POEs. "], "subsections": []}, {"section_title": "National Preparedness Policy", "paragraphs": ["(Shawn Reese; February 19, 2019)", "The United States is threatened by a wide array of hazards, including natural disasters, acts of terrorism, viral pandemics, and man-made disasters, such as the Deepwater Horizon oil spill. The way the nation strategically prioritizes and allocates resources to prepare for all hazards can significantly influence the ultimate cost to society, both in the number of human casualties and the scope and magnitude of economic damage. As authorized in part by the Post-Katrina Emergency Reform Act of 2006 (PKEMRA; P.L. 109-295 ), the President, acting through the Federal Emergency Management Agency (FEMA) Administrator, is directed to create a \"national preparedness goal\" (NPG) and develop a \"national preparedness system\" (NPS) that will help \"ensure the Nation's ability to prevent, respond to, recover from, and mitigate against natural disasters, acts of terrorism, and other man-made disasters\" (6 U.S.C. \u00a7\u00a7743-744).", "Currently, NPG and NPS implementation is guided by Presidential Policy Directive 8: National Preparedness (PPD-8), issued by then-President Barack Obama on March 30, 2011. PPD-8 rescinded the existing Homeland Security Presidential Directive 8: National Preparedness (HSPD-8), which was released and signed by then-President George W. Bush on December 17, 2003. ", "As directed by PPD-8, the NPS is supported by numerous strategic component policies, national planning frameworks (e.g., the National Response Framework), and federal interagency operational plans (e.g., the Protection Federal Interagency Operational Plan). In brief, the NPS and its many component policies represent the federal government's strategic vision and planning, with input from the whole community, as it relates to preparing the nation for all hazards. The NPS also establishes methods for achieving the nation's desired level of preparedness for both federal and nonfederal partners by identifying the core capabilities necessary to achieve the NPG. A capability is defined in law as \"the ability to provide the means to accomplish one or more tasks under specific conditions and to specific performance standards. A capability may be achieved with any combination of properly planned, organized, equipped, trained, and exercised personnel that achieves the intended outcome.\" A core capability is defined in PPD-8 as a capability that is \"necessary to prepare for the specific types of incidents that pose the greatest risk to the security of the Nation.\" ", "Furthermore, the NPS includes annual National Preparedness Reports that document progress made toward achieving national preparedness objectives. The reports rely heavily on self-assessment processes, called the Threat and Hazard Identification and Risk Assessment (THIRA) and Stakeholder Preparedness Review (SPR), to incorporate the perceived risks and capabilities of the whole community into the NPS. In this respect, the NPS's influence may extend to federal, state, and local budgetary decisions, the assignment of duties and responsibilities across the nation, and the creation of long-term policy objectives for disaster preparedness.", "It is within the Administration's discretion to retain, revise, or replace the overarching guidance of PPD-8, and the 116 th Congress may provide oversight of the NPS. Congress may have interest in overseeing a variety of factors related to the NPS, such as whether", "the NPS conforms to the objectives of Congress, as outlined in the PKEMRA statute; the NPS is properly informed by quantitative and qualitative data and outcome metrics, such as those gathered by the THIRA and SPR, as has been regularly recommended by the Government Accountability Office; federal roles and responsibilities have, in Congress's opinion, been properly assigned and resourced to execute the core capabilities needed to prevent, protect against, mitigate the effects of, respond to, and recover from the greatest risks; nonfederal resources and stakeholders are efficiently incorporated into NPS policies; and federal, state, and local government officials are allocating the appropriate amount of resources to the disaster preparedness mission relative to other homeland security missions.", "Ultimately, if the NPS is determined not to fulfill the objectives of the 116 th Congress, Congress could consider amending the PKEMRA statute to create new requirements, or revise existing provisions, to manage the amount of discretion afforded to the President in NPS implementation. This could mean, for example, the 116 th Congress directly assigning certain preparedness responsibilities to federal agencies through authorizing legislation different than those indicated by national preparedness frameworks. As a hypothetical example, Congress could decide that certain federal agencies, such as the Department of Commerce or Housing and Urban Development, should take more or less of a role in the leadership of disaster recovery efforts following major incidents than is prescribed by the National Disaster Recovery Framework. Congress also may consider prioritizing the amount of budget authority provided to some core capabilities relative to others. As a hypothetical example, Congress may prioritize resourcing those federal programs needed to support the nation's core capability of \"Screening, Search, and Detection\" versus resourcing those federal programs needed to support \"Fatality Management Services.\" "], "subsections": []}, {"section_title": "Disaster Housing Assistance", "paragraphs": ["(Elizabeth M. Webster; February 26, 2019)", "After the President issues an emergency or major disaster declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act, 42 U.S.C. \u00a7\u00a75121 et seq.), the Federal Emergency Management Agency (FEMA) may provide various temporary housing assistance programs to meet disaster survivors' needs. However, limitations on these programs may make it difficult to transition disaster survivors into permanent housing. This Insight provides an overview of the primary housing assistance programs available under the Stafford Act, and potential considerations for Congress."], "subsections": [{"section_title": "Transitional Sheltering Assistance", "paragraphs": ["FEMA-provided housing assistance may include short-term, emergency sheltering accommodations under Section 403 of the Stafford Act (42 U.S.C. \u00a75170b), including the Transitional Sheltering Assistance (TSA) program, which received significant attention as it was coming to an end for disaster survivors of Hurricane Maria from Puerto Rico. This transition process highlighted challenges to helping individuals and families obtain interim and permanent housing following a disaster. ", "TSA is intended to provide short-term hotel/motel accommodations to individuals and families who are unable to return to their pre-disaster primary residence because a declared disaster rendered it uninhabitable or inaccessible. The initial period of TSA assistance is 5-14 days, and it can be extended in 14-day intervals for up to 6 months from the date of the disaster declaration. However, some Hurricane Maria disaster survivors from Puerto Rico remained in the TSA program for nearly one year due to extensions of the program (including by court order). Hurricane Maria is not the only incident that has received multiple TSA program extensions; disaster survivors of Hurricanes Harvey, Irma, and Sandy also received extensions for nearly a year. Research suggests that housing-instable individuals and families may have an \"increased risk of adverse mental health outcomes,\" which may reveal a drawback to using an emergency sheltering solution, such as TSA, to house individuals and families in hotels/motels for extended periods of time."], "subsections": []}, {"section_title": "Individuals and Households Program", "paragraphs": ["Interim housing needs may be better met through FEMA's Individuals and Households Program (IHP) under Section 408 of the Stafford Act (42 U.S.C. \u00a75174). Financial (e.g., assistance to reimburse temporary lodging expenses and rent alternate housing accommodations) and/or direct (e.g., multi-family lease and repair and manufactured housing units (MHUs)) assistance may be available to eligible individuals and households who, as a result of a disaster, have uninsured or under-insured necessary expenses and serious needs that cannot be met through other means or forms of assistance. IHP assistance is intended to be temporary, and is generally limited to a period of 18 months from the date of the declaration, but may be extended by FEMA. ", "Although IHP provides various assistance options, eligibility and programmatic limitations exist on their receipt and use. For example, disaster survivors whose primary residence is determined to be habitable or who have access to adequate rent-free housing may be ineligible to receive assistance, even if they are unable to return for other reasons (e.g., lack of employment). Challenges to providing financial assistance, such as rental assistance, may include lack of available, affordable housing stock. Additionally, regulations and policies may not permit FEMA to immediately adjust rental payment rates to reflect the location where a disaster survivor has relocated . So even if housing stock is available, the difference in cost may result in the inability of some eligible applicants to secure a housing unit. Challenges to providing direct assistance, such as MHUs, may include restrictions on the placement of MHUs. Additionally, FEMA's direct lease assistance program is usually only offered if rental resources are scarce, and the area where direct lease assistance is available may be limited. Further, following a catastrophic incident additional challenges include the need to restore infrastructure, community services, and employment opportunities, which may impact where disaster survivors decide to locate following a disaster. This decision may impact the benefits for which they may be eligible."], "subsections": [{"section_title": "Disaster Housing Assistance Program", "paragraphs": ["Following Hurricanes Katrina and Rita, Ike and Gustav, and Sandy, FEMA executed Interagency Agreements with the U.S. Department of Housing and Urban Development (HUD) to administer the Disaster Housing Assistance Program (DHAP) in order to provide rental assistance and case management services. Although DHAP fell under Section 408 of the Stafford Act and was funded through the Disaster Relief Fund, it was not subject to some of the limitations of the IHP, and it may have allowed families to receive more assistance for longer periods of time than they may have received under IHP. Despite being identified as a promising interim housing strategy and potential solution to the challenge of meeting long-term housing needs in the National Disaster Housing Strategy, FEMA has not implemented DHAP following more recent disasters. Most recently, in response to the Governor of Puerto Rico's request to authorize DHAP, FEMA stated DHAP would not be implemented, because FEMA and HUD \"offered multiple housing solutions that are better able to meet the current housing needs of impacted survivors.\" FEMA also noted that the Office of Inspector General (OIG) had raised concerns about DHAP's cost effectiveness; the OIG recommended that, before FEMA activates DHAP again, it \"[c]onduct a cost-benefit analysis.... \""], "subsections": []}]}, {"section_title": "Potential Considerations for Congress", "paragraphs": ["FEMA provides temporary housing assistance to meet short-term and interim disaster housing needs; however, clearly defining the use of these programs and identifying a process to assist some disaster survivors with attaining permanent housing may be needed to comprehensively address disaster housing needs throughout all phases of recovery. Congress may request an evaluation of FEMA's capacity to adequately and cost-effectively meet the needs of disaster survivors. Congress may also evaluate the roles of government and private/nonprofit entities in providing disaster housing assistance; require FEMA to collaborate with disaster housing partners to identify and outline short, interim, and long-term disaster housing solutions; and require an update to the National Disaster Housing Strategy to reflect the roles and responsibilities of housing partners, current practices and solutions, and the findings of any such evaluations. Congress may also pursue legislative solutions, including by consolidating, eliminating, or revising existing authorities and programs, or creating new programs that address unmet needs."], "subsections": []}]}, {"section_title": "The Disaster Recovery Reform Act", "paragraphs": ["(Elizabeth M. Webster; February 26, 2019)", "The Disaster Recovery Reform Act of 2018 (DRRA, Division D of P.L. 115-254 ), which became law on October 5, 2018, is the most comprehensive legislation on the Federal Emergency Management Agency's (FEMA's) disaster assistance programs since the passage of the Sandy Recovery Improvement Act of 2013 (SRIA, Division B of P.L. 113-2 ) and, previous to that, the Post-Katrina Emergency Management Reform Act of 2006 (PKEMRA, P.L. 109-295 ). The legislation focuses on improving predisaster planning and mitigation, response, and recovery, and increasing FEMA accountability. As such, it amends many sections of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act, 42 U.S.C. \u00a7\u00a75121 et seq. ). Generally, DRRA's amendments to the Stafford Act apply to major disasters and emergencies declared on or after August 1, 2017. Other new authorities apply to major disasters and emergencies declared on or after January 1, 2016.", "Congress may consider tracking the implementation of DRRA's requirements, which include \"more than 50 provisions that require FEMA policy or regulation changes for full implementation.... \" In addition to its reporting and rulemaking requirements\u2014many of which include 2019 deadlines\u2014much of DRRA's implementation is at FEMA's discretion.", "This Insight provides an overview of some of DRRA's broad impacts with a few significant, illustrative provisions, and potential considerations for Congress."], "subsections": [{"section_title": "Potential Investments in Preparedness, Response, and Recovery", "paragraphs": ["DRRA includes provisions that have the potential to improve disaster preparedness, response, and recovery, but also to increase federal spending. For example, under the revised authority under Section 203 of the Stafford Act (42 U.S.C. \u00a75133)\u2014Predisaster Hazard Mitigation\u2014the President may provide financial and technical assistance by setting aside up to 6% of the estimated aggregated amount of certain federal grant assistance from the Disaster Relief Fund (DRF), including grants made pursuant to awards of Public Assistance (PA) and Individual Assistance (IA) under the Stafford Act. Previously, predisaster mitigation was funded by discretionary annual appropriations, and financial assistance was limited by the amount available in the National Predisaster Mitigation Fund, which was separate from the DRF. Post-DRRA, predisaster mitigation has the potential to have significantly higher funding through the new set-aside from the DRF, but how this will be implemented and managed by FEMA remains uncertain. ", "Additionally, DRRA may significantly increase the amount of financial assistance provided under Section 408 of the Stafford Act (42 U.S.C. \u00a75174)\u2014Federal Assistance to Individuals and Households. Prior to DRRA, an individual or household could receive up to $33,300 (FY2017; adjusted annually) in financial assistance, including both housing assistance and other needs assistance (ONA). Post-DRRA, financial assistance for repairs and replacement of housing may not exceed $34,900 (FY2019; adjusted annually), and separate from that, financial assistance for ONA may not exceed $34,900 (FY2019; adjusted annually). Financial assistance to rent alternate housing accommodations is not subject to the cap. In the past, the maximum amount of financial assistance may have resulted in applicants with significant home damage and/or other needs having little to no remaining funding available to pay for rental assistance. Changes post-DRRA may result in increased spending on temporary disaster housing assistance and ONA.", "FEMA may also pilot some provisions of the DRRA, as it has done with regard to management costs incurred in the administration of the PA Program and the Hazard Mitigation Grant Program (HMGP). Following the passage of DRRA, the PA management cost reimbursement rate increased to 12% of the total grant award; 7% may be used by the grantee, and 5% by the subgrantee. Previously, PA management costs were capped at 3.34% for major disasters and 3.90% for emergency declarations. Additionally, the HMGP management cost reimbursement rate increased to 15% of the total grant award; 10% may be used by the grantee, and 5% by the subgrantee. Previously, HMGP management costs were capped at 4.89% for major disasters. In addition, prior to DRRA, there was not a pass-through requirement for subgrantees to receive a percentage of management costs."], "subsections": []}, {"section_title": "Limitations on the Ability to Recoup Funding", "paragraphs": ["A number of DRRA provisions may restrict FEMA's ability to recoup assistance, and the retroactive implementation of these provisions may be of interest to Congress. For example, FEMA may waive a debt owed by an individual or household if distributed in error by FEMA and if its collection would be inequitable, provided there was no fault on behalf of the debtor. Additionally, with regard to Section 705 of the Stafford Act (42 U.S.C. \u00a75205)\u2014Disaster Grant Closeout Procedures\u2014DRRA amends the statute of limitations on FEMA's ability to recover assistance. No administrative action to recover payments may be initiated \"after the date that is 3 years after the date of transmission of the final expenditure report for project completion as certified by the grantee.\" Prior to the passage of DRRA, the statute of limitations applied to the final expenditure report for the disaster or emergency. This is a significant change because it may take years to close all of the projects associated with a disaster. Previously, it was possible to recoup funding from projects that may have been completed and closed years prior to FEMA's pursuit of funding because the disaster was still open."], "subsections": []}, {"section_title": "Increased Agency Accountability and Transparency", "paragraphs": ["DRRA includes reporting requirements that may influence decisionmaking regarding future disaster response and recovery. The earliest reports were due not later than 90 days after DRRA's enactment (thus a deadline of January 3, 2019). Some provisions also include briefings ahead of the reporting deadline. In addition to FEMA, other federal entities are assigned responsibilities (e.g., the Office of Inspector General for the Department of Homeland Security, which was required to initiate an audit of certain FEMA contracts by November 4, 2018)."], "subsections": []}, {"section_title": "Potential Considerations for Congress", "paragraphs": ["In general, among other options, Congress may consider whether to", "evaluate if FEMA's implementation of provisions fulfills congressional intent; review the effectiveness and impacts of FEMA's DRRA-related regulations and policy guidance; or assess the effects of DRRA-related changes to federal assistance for past and future disasters."], "subsections": []}]}, {"section_title": "The National Flood Insurance Program (NFIP)", "paragraphs": ["(Diane P. Horn; February 19, 2019)", "The National Flood Insurance Program (NFIP) is authorized by the National Flood Insurance Act of 1968 (Title XIII of P.L. 90-448, as amended, 42 U.S.C. \u00a7\u00a74001 et seq.) and is the primary source of flood insurance coverage for residential properties in the United States. The NFIP has two main policy goals: (1) to provide access to primary flood insurance, thereby allowing for the transfer of some of the financial risk from property owners to the federal government, and (2) to mitigate and reduce the nation's comprehensive flood risk through the development and implementation of floodplain management standards. A longer-term objective of the NFIP is to reduce federal expenditure on disaster assistance after floods. The NFIP engages in many \"noninsurance\" activities in the public interest: it identifies and maps flood hazards, disseminates flood-risk information through flood maps, requires community land-use and building-code standards, contributes to community resilience by providing a mechanism to fund rebuilding after a flood, and offers grants and incentive programs for household- and community-level investments in flood-risk reduction.", "Over 22,000 communities participate in the NFIP, with more than 5.1 million policies providing over $1.3 trillion in coverage. The program collects more than $4.7 billion in annual revenue from policyholders' premiums, fees, and surcharges. Floods are the most common natural disaster in the United States, and all 50 states have experienced floods in recent years."], "subsections": [{"section_title": "Structure of the NFIP", "paragraphs": ["The NFIP is managed by the Federal Emergency Management Agency (FEMA) through its subcomponent, the Federal Insurance and Mitigation Administration (FIMA). Communities are not legally required to participate in the program; they participate voluntarily to obtain access to NFIP flood insurance. Communities choosing to participate in the NFIP are required to adopt land-use and control measures with effective enforcement provisions and to regulate development in the floodplain. FEMA has set forth in federal regulations the minimum standards required for participation in the NFIP; however, these standards have the force of law only if they are adopted and enforced by a state or local government. Legal enforcement of floodplain management standards is the responsibility of participating NFIP communities, which also can elect to adopt higher standards to mitigate flood risk. The NFIP approaches the goal of reducing comprehensive flood risk primarily by requiring participating communities to collaborate with FEMA to develop and adopt flood maps called Flood Insurance Rate Maps (FIRMs). Property owners in the mapped Special Flood Hazard Area (SFHA), defined as an area with a 1% annual chance of flooding, are required to purchase flood insurance as a condition of receiving a federally backed mortgage. This mandatory purchase requirement is enforced by the lender rather than FEMA. Property owners who do not obtain flood insurance when required may find that they are not eligible for certain types of disaster assistance after a flood."], "subsections": []}, {"section_title": "Financial Standing of the NFIP", "paragraphs": ["The NFIP is funded from (1) premiums, fees, and surcharges paid by NFIP policyholders; (2) annual appropriations for flood-hazard mapping and risk analysis; (3) borrowing from the Treasury when the balance of the National Flood Insurance Fund is insufficient to pay the NFIP's obligations (e.g., insurance claims); and (4) reinsurance proceeds if NFIP losses are sufficiently large. The NFIP was not designed to retain funding to cover claims for truly extreme events; instead, the statute allows the program to borrow money from the Treasury for such events. For most of the NFIP's history, the program was able to borrow relatively small amounts from the Treasury to pay claims and then repay the loans with interest. However, this changed when Congress increased the borrowing limit to $20.775 billion to pay claims in the aftermath of the 2005 hurricane season (particularly Hurricanes Katrina, Rita, and Wilma). Congress increased the borrowing limit again in 2013, after Hurricane Sandy, to the current limit of $30.425 billion. ", "The 2017 hurricane season was the second-largest claims year in the NFIP's history, with approximately $10.5 billion currently paid in response to Hurricanes Harvey, Irma, and Maria. At the beginning of the 2017 hurricane season, the NFIP owed $24.6 billion. On September 22, 2017, the NFIP borrowed the remaining $5.825 billion from the Treasury to cover claims from Hurricane Harvey, reaching the NFIP's borrowing limit. On October 26, 2017, Congress canceled $16 billion of NFIP debt in order to pay claims for Hurricanes Harvey, Irma, and Maria. FEMA borrowed another $6.1 billion on November 9, 2017, bringing the debt back up to $20.525 billion. For the 2018 hurricane season, as of November 2018, the NFIP had paid $117 million in claims for Hurricanes Florence and Michael. As of January 2019, the NFIP has $9.9 billion of remaining borrowing authority.", "The NFIP's debt is conceptually owed by current and future participants in the NFIP, as the insurance program itself owes the debt to the Treasury and pays for accruing interest on that debt through the premium revenues of policyholders. Since 2005, the NFIP has paid $2.82 billion in principal repayments and $4.2 billion in interest to service the debt through the premiums collected on insurance policies. The October 2017 cancellation of $16 billion of NFIP debt represents the first time that NFIP debt has been canceled."], "subsections": []}, {"section_title": "NFIP Reauthorization", "paragraphs": ["Since the end of FY2017, Congress has enacted 10 short-term NFIP reauthorizations. The NFIP is currently authorized until May 31, 2019. The statute for the NFIP does not contain a comprehensive expiration, termination, or sunset provision for the whole of the program. Rather, the NFIP has multiple different legal provisions that generally tie to the expiration of key components of the program. Unless reauthorized or amended by Congress, the following will occur on May 31, 2019: (1) the authority to provide new flood insurance contracts will expire; however, insurance contracts entered into before the expiration would continue until the end of their policy term and (2) the authority for the NFIP to borrow funds from the Treasury will be reduced from $30.425 billion to $1 billion."], "subsections": []}]}, {"section_title": "National Flood Insurance Program (NFIP) Reauthorization and Reform", "paragraphs": ["(Diane P. Horn; February 19, 2019)"], "subsections": [{"section_title": "NFIP Reauthorization", "paragraphs": ["The National Flood Insurance Program (NFIP) is the primary source of flood insurance for residential properties in the United States, with more than 5.1 million policies providing over $1.3 trillion in coverage in over 22,000 communities. Since the end of FY2017, 10 short-term NFIP reauthorizations have been enacted, and the NFIP is currently authorized until May 31, 2019. Unless reauthorized or amended by Congress, on May 31, 2019, (1) the authority to provide new flood insurance contracts will expire and (2) the authority for the NFIP to borrow funds from the Treasury will be reduced from $30.425 billion to $1 billion .", "A number of bills were introduced in the 115 th Congress to provide longer-term reauthorization of the NFIP and numerous other changes to the program. The House passed H.R. 2874 on November 14, 2017. Three reauthorization bills were introduced in the Senate, S. 1313 , S. 1368 , and S. 1571 ; however, none of these were considered by the Senate in the 115 th Congress."], "subsections": [{"section_title": "Premiums and Affordability", "paragraphs": ["Historically, Congress has asked the Federal Emergency Management Agency (FEMA) to set NFIP premiums that are simultaneously \"risk-based\" and \"reasonable.\" Except for certain subsidies, statute directs that NFIP flood insurance rates should reflect the true flood risk to the property. Properties paying less than the full risk-based rate are determined by the date when the structure was built relative to the date of the community's Flood Insurance Rate Map (FIRM), rather than the flood risk or the policyholder's ability to pay. Congress has directed FEMA to subsidize flood insurance for properties built before the community's first FIRM (the pre-FIRM subsidy ). When FIRMs are updated, FEMA also \"grandfathers\" properties at their rate from past FIRMs through a cross-subsidy. Under existing law, pre-FIRM subsidies are being phased out, whereas grandfathering is retained indefinitely.", "Reforming the premium structure to reflect full risk-based rates could place the NFIP on a more financially sustainable path, risk-based price signals could give policyholders a clearer understanding of their true flood risk, and a reformed rate structure could encourage more private insurers to enter the market. However, charging risk-based premiums may mean that insurance for some properties becomes unaffordable. FEMA currently does not have the authority or funding to implement an affordability program. An NFIP-funded affordability program would require either raising flood insurance rates for NFIP policyholders or diverting resources from another existing use."], "subsections": []}, {"section_title": "Properties with Multiple Losses", "paragraphs": ["An area of controversy involves NFIP coverage of properties that have suffered multiple flood losses. One concern is the cost to the program; another is whether the NFIP should continue to insure properties that are likely to have further losses. According to FEMA, claims on repetitive loss (RL) and severe repetitive loss (SRL) properties since 1968 amount to approximately $17 billion, or approximately 30% of claims paid. Reducing the number of RL and SRL properties, through mitigation or relocation, could reduce claims and improve the NFIP's financial position. Under current statute, the NFIP cannot refuse to insure any property; however, from April 1, 2019, FEMA will introduce an SRL premium equal to 5% of the annual premium for SRL properties. "], "subsections": []}, {"section_title": "Private Flood Insurance", "paragraphs": ["Private insurers play a major role in administering the NFIP through the Write-Your-Own (WYO) program, where private insurance companies are paid to issue and service NFIP policies. WYO companies take on little flood risk themselves; instead, the NFIP retains the financial risk of paying claims for these policies. Few private insurers compete with the NFIP in the primary residential flood insurance market. However, private insurer interest in providing flood coverage has increased recently, and many see private insurance as a way of transferring flood risk from the federal government to the private sector. For example, FEMA has transferred $4.322 billion of its flood risk to the capital markets through reinsurance in 2017, 2018, and 2019.", "Private flood insurance may offer some potential advantages over the NFIP, including more flexible policies, broader coverage, integrated coverage with homeowners' insurance, business interruption insurance, or lower-cost coverage for some consumers. Private marketing also might increase the overall amount of flood coverage purchased. More people purchasing flood insurance, either NFIP or private, could help to reduce the amount of disaster assistance provided by the federal government. Increasing private insurance, however, may have some disadvantages compared to the NFIP. Unlike the NFIP, private coverage availability would not be guaranteed to all floodplain residents, and consumer protections could vary in different states. In addition, private sector competition might increase the financial exposure and volatility of the NFIP, as private markets likely will seek out policies that offer the greatest likelihood of profit. In the most extreme case, the private market might \"cherry-pick\" (i.e., adversely select) the profitable, lower-risk NFIP policies that are \"overpriced\" either due to cross-subsidization or imprecise rate structures. This could leave the NFIP with a higher density of actuarially unsound policies that are directly subsidized or benefit from cross-subsidization. An increase in private flood insurance policies that \"depopulates\" the NFIP also may undermine the NFIP's ability to generate revenue, reducing the ability or extending the time required to repay previously incurred debt.", "The NFIP's role has historically been broader than just providing insurance. As currently authorized, the NFIP also encompasses social goals to provide flood insurance in flood-prone areas to those who otherwise would not be able to obtain it and to reduce the government's cost after floods. The NFIP has tried to reduce the impact of floods through flood-mapping and mitigation efforts. It is unclear how effectively the NFIP could play this broader role if private insurance became a large part of the flood marketplace. The majority of funding for flood mapping and floodplain management comes from the Federal Policy Fee (FPF), paid by all NFIP policyholders. To the extent that the private flood insurance market grows and policies move from the NFIP to private insurers, FEMA would no longer collect the FPF on those policies and less money would be available for floodplain mapping and management."], "subsections": []}]}]}, {"section_title": "Community Disaster Loans", "paragraphs": ["(Michael H. Cecire; April 24, 2019)", "The Community Disaster Loan (CDL) program was developed to help local governments manage tax and other revenue shortages following a disaster. Administered by the Federal Emergency Management Agency (FEMA), CDLs provide financial liquidity to local governments through a structured loan that may be converted to grants when certain financial conditions are met . CDLs are codified in Section 417 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. \u00a75184 , as amended). Modified \"non-traditional\" CDL programs were developed in response to Hurricanes Rita and Katrina in 2005, and CDL-type programs for Puerto Rico and the U.S. Virgin Islands (USVI) were developed following 2017's Hurricanes Harvey, Irma, and Maria.", "This Insight provides an overview of traditional and non-traditional CDLs and the policy issues they may raise in the 116th Congress, particularly with regard to CDL-type instruments developed for Puerto Rico and USVI. The CDL program may be of interest to Congress given observed increases in frequency and severity of disaster events and apparent congressional interest in oversight issues related to federal disaster response in Puerto Rico and USVI."], "subsections": [{"section_title": "Overview of Traditional CDLs", "paragraphs": ["CDLs were first authorized in the Disaster Relief Act of 1974 ( P.L. 93-288 ) but are defined and established in the Stafford Act (which amended the Disaster Relief Act) to help local governments manage acute tax and other revenue loss after a disaster, which could inhibit their ability to adequately serve their communities during recovery. To qualify for a traditional CDL, an applicant must be located in a presidentially declared disaster area; show substantial loss (greater than 5%) of tax and other revenues; not be in arrears on any other previous CDL loans; and be permitted to take federal loans under their respective state law. CDLs are statutorily capped at $5 million ( P.L. 106-390 ); and are structured around underwriting criteria that account for estimated revenue losses, the local government's annual operating budget, and a disaster's economic effects. CDLs are five-year loans, extendable to 10 years at FEMA's discretion (44 C.F.R. \u00a7206.367(c)), with interest rates determined by the Treasury Secretary. FEMA also issues guidance on how a CDL can be canceled, which involves submitting evidence of disaster-related operating deficits and associated revenue analyses to FEMA."], "subsections": []}, {"section_title": "Overview of Non-Traditional CDLs", "paragraphs": ["In special circumstances, Congress has authorized FEMA to administer non-traditional CDLs and CDL-type programs with different eligibility and technical requirements. Unlike traditional CDLs, these loans are not subject to the $5 million cap, and eligible areas are more geographically concentrated. For example, as part of the federal response to extensive economic damage caused by Hurricanes Katrina and Rita, Congress passed legislation in 2005 ( P.L. 109-88 ) and 2006 ( P.L. 109-234 ) to make approximately $1 billion available to support nearly $1.4 billion of non-traditional CDLs. While these non-traditional CDLs initially prohibited cancelation, subsequent 2007 legislation ( P.L. 110-28 ) mandated that cancelation be allowed."], "subsections": []}, {"section_title": "CDL-Type Program in Puerto Rico and USVI", "paragraphs": ["Following Hurricanes Harvey, Irma, and Maria, Congress passed legislation ( P.L. 115-72 ) providing funding for CDL-type loan instruments for Puerto Rico and USVI. This was not the first time territories received CDLs, with USVI receiving nearly $180 million in CDL funding after Hurricanes Hugo (1989) and Marilyn (1995) prior to the $5 million cap's enactment. However, while the 2017 loan instruments were based on CDLs defined in the Stafford Act, and appropriations were made to the same fund drawn for CDLs, the resulting program was functionally different due to significant exceptions and modifications, including:", "Territorial governments were considered municipalities for the purposes of the program; The $5 million cap was lifted; Loan recipients were allowed to receive more than one loan; Loans could only be canceled at the discretion of the Secretary of Homeland Security in consultation with the Secretary of the Treasury; and The Secretary of Homeland Security, in consultation with the Secretary of the Treasury, solely determined the \"terms, conditions, eligible uses, and timing and amount\" of such loans.", "The CDL-type instrument's statutory ambiguities related to loan cancelation and terms were further complicated by Puerto Rico's broader fiscal crisis and the existence of a federal oversight board, as established by the Puerto Rico Oversight, Management, and Economic Stability Act of 2016 (PROMESA; P.L. 114-187 ; see CRS Report R44532, The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA; H.R. 5278, S. 2328) , coordinated by D. Andrew Austin). Subsequent legislation in February 2018 ( P.L. 115-123 ) required the Puerto Rican government to establish oversight board-approved recovery plans with monthly reports as a requirement for the CDL-type loan disbursement. Given this CDL-type instrument's statutory ambiguities, the constitutional limitations of territories, and the extent of disaster across the entirety of both territories, the CDL-type program raises potential questions of equity compared to federal disaster response to states, such as in the aftermath of Hurricanes Katrina and Rita, where CDL-type disaster assistance was more comprehensive and less restricted. "], "subsections": []}, {"section_title": "Potential Policy Issues for Congress", "paragraphs": ["Should the rate and severity of disaster-related damages continue along recent trends or accelerate, traditional CDLs or their non-traditional analogues may be increasingly utilized for disaster response or recovery purposes. However, due to their relatively low funding cap and specialized nature, traditional CDLs may be inadequately suited to widespread and severe disaster events. However, non-traditional CDLs or CDL-type instruments may lack sufficiently defined disbursement and cancelation criteria, which potentially contribute to concerns over equity and utility. ", "With respect to Puerto Rico and USVI, Congress may seek to specify program terms and cancelation criteria to bring these instruments more in line with traditional CDLs, or the types used following Hurricanes Katrina and Rita. Considering the CDL program in broader terms, Congress may consider structuring CDLs more expansively to account for a wider universe of disaster and emergency scenarios, such as state- or executive agency-based disaster declarations, expanding or lifting the $5 million cap, or simplifying the loan forgiveness process. One potential alternative would be to restructure CDLs with automatic forgiveness thresholds based on predetermined triggering criteria. Congress could also develop disaster assistance instruments that separately address immediate governmental liquidity, disaster response, and long-term recovery needs."], "subsections": []}]}, {"section_title": "Firefighter Assistance Grants", "paragraphs": ["(Lennard P. Kruger; March 27, 2019)"], "subsections": [{"section_title": "Background", "paragraphs": ["Structural firefighting\u2014which typically refers to fighting fires in residential, commercial, and other types of buildings\u2014is primarily the responsibility of local governments. During the 1990s, shortfalls in state and local budgets, coupled with increased responsibilities of local fire departments, led many in the fire service community to call for additional financial support from the federal government. ", "In response, Congress established firefighter assistance grant programs within the Federal Emergency Management Agency (FEMA) to provide additional support for local fire departments. In 2000, the 106 th Congress established the Assistance to Firefighters Grant Program (AFG), which provides grants directly to local fire departments and unaffiliated Emergency Medical Services (EMS) organizations to help address a variety of equipment, vehicle, training, and other firefighter-related and EMS needs. AFG also supports fire prevention projects and firefighter health and safety research and development through the Firefighter Prevention and Safety (FP&S) grant program.", "Subsequently, in 2003, the 108 th Congress established the Staffing for Adequate Fire and Emergency Response (SAFER) Program, which provides grants to fund firefighter hiring by career and combination fire departments, and recruitment and retention by volunteer and combination fire departments."], "subsections": []}, {"section_title": "Funding", "paragraphs": ["Firefighter assistance grants are distributed nationwide to career, volunteer, combination, and paid-on-call fire departments serving urban, suburban, and rural areas. There is no set geographical formula for the distribution of AFG or SAFER grants. Award decisions are made by a peer panel based on the merits of the application and the needs of the community. The majority of AFG funding goes to rural (mostly volunteer) fire departments, while the majority of SAFER funding goes to urban (mostly career) fire departments. The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) appropriated $700 million for firefighter assistance grants, consisting of $350 million for AFG and $350 million for SAFER, with funds to remain available through September 30, 2020. Dating back to the programs' establishment, Congress has appropriated a total of $8.325 billion to AFG (since FY2001), and $4.235 billion to SAFER (since FY2005). "], "subsections": []}, {"section_title": "Reauthorization", "paragraphs": ["On January 3, 2018, the President signed the United States Fire Administration, AFG, and SAFER Program Reauthorization Act of 2017 ( P.L. 115-98 ). P.L. 115-98 extended the AFG and SAFER authorization through FY2023 at a level of $750 million for each program (plus additional annual increases based on the Consumer Price Index); extended sunset provisions for AFG and SAFER through September 30, 2024; provided that the U.S. Fire Administration (USFA) may develop and make widely available an online training course on AFG and SAFER grant administration; expanded SAFER hiring grant eligibility to cover the conversion of part-time or paid-on-call firefighters to full-time firefighters; directed FEMA, acting through the Administrator of USFA, to develop and implement a grant monitoring and oversight framework to mitigate and minimize risks of fraud, waste, abuse, and mismanagement related to the AFG and SAFER grant programs; and made various technical corrections to the AFG and SAFER statute."], "subsections": []}, {"section_title": "Impact of Government Shutdown", "paragraphs": ["Firefighter assistance grants were impacted by the partial government shutdown. For all three grant programs (AFG, SAFER, and FP&S) the application and awards process was delayed. For the 2018 round, the application windows for AFG and FP&S closed in October and December, respectively, but the processing of those applications could not move forward until the shutdown ended. The opening of the 2018 round application window for SAFER grants was also delayed, and subsequently opened on February 15, 2019. For grants already awarded (in the 2017 and previous rounds), grant recipients were unable to draw down funds during the shutdown, which may have disrupted the ability of the grantees to continue grant-funded activities, including personnel costs covered by SAFER grants. This disruption may continue after the government shutdown due to a backlog of payment requests that will need to be processed once furloughed FEMA grant personnel return to work. For additional discussion on the impact of delayed grant payments due to a government shutdown, see CRS In Focus IF11020, Introduction to the U.S. Economy: Business Investment . "], "subsections": []}, {"section_title": "Issues", "paragraphs": ["An issue for the 116 th Congress is how equitably and effectively grants are being distributed and used to protect the health and safety of the public and firefighting personnel against fire and fire-related hazards. Another issue is annual appropriations for AFG and SAFER. As is the case with many federal programs, concerns over the federal budget deficit could impact funding levels for AFG and SAFER. At the same time, firefighter assistance budgets will likely receive heightened scrutiny from the fire service community, given the local budgetary shortfalls that many fire departments may face. ", "Additionally, a continuing issue related to SAFER hiring grants has been whether SAFER statutory restrictions should be waived to permit grantees to use SAFER funds for retention and rehiring. Division F, Title III, Section 307 of the Consolidated Appropriations Act, 2018 states that FEMA \"may\" grant SAFER waiver authority. However, for the 2018 round of SAFER awards, FEMA has chosen not to exercise that authority, and thus will not provide SAFER hiring grants for retaining or rehiring firefighters. The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) (Division A, Title III, Section 307) also includes SAFER waiver authority for the FY2019 round of SAFER awards."], "subsections": []}]}, {"section_title": "Emergency Communications", "paragraphs": ["(Jill C. Gallagher; January 29, 2019)"], "subsections": [{"section_title": "Overview", "paragraphs": ["First responders and other emergency personnel use emergency communications systems to communicate with each other during day-to-day operations and large-scale disasters. Emergency communication systems are also used to enable communications between the public and response agencies. Emergency communication systems include", "911 systems that receive calls from the public, requesting assistance or reporting an emergency, and that relay those calls to response agencies (e.g., local police and fire departments); land mobile radio (LMR) systems that allow police, firefighters, and emergency medical service (EMS) workers to communicate with each other during day-to-day operations and disasters; the First Responder Network (FirstNet), the nationwide public safety broadband network, which is currently under deployment and scheduled for completion in 2022, will enable response agencies at all levels of government to communicate via voice and data (e.g., text, videos); and alerting systems that notify people of emergencies and warn people of danger. ", "These systems often rely on different technologies that can inhibit interoperability and response. For example, 911 systems are not able to send 911 text messages to first responders in the field. State and local police and fire agencies use various radio technologies that can connect responders within their agency, but may not be interoperable with surrounding systems. ", "Federal, state, and local public safety agencies are investing in Internet Protocol (IP)-based technologies to improve communications, coordination, and response. The federal government has created an IP-based national alerting system that allows authorized agencies to send a single alert through multiple alerting systems. The federal government has also invested in FirstNet, a nationwide seamless, IP-based, high-speed mobile communications network that will enable public safety users to communicate via voice and data with other public safety agencies. There is also interest at all levels of government in upgrading 911 systems to next generation, IP-based systems, to enable callers to share data and to interconnect systems. "], "subsections": []}, {"section_title": "Opportunities and Challenges of New Technologies", "paragraphs": ["As emergency communications systems converge toward a common IP-based platform, there are opportunities and challenges. Advancements in geo-location technologies present opportunities to find 911 callers more easily; however, integration of these technologies into legacy 911 systems is challenging. Advancements in alerting have enabled officials to send alerts to mobile phones, yet some people still rely on landline phones for communications. Interconnecting systems could improve information sharing but presents challenges in terms of privacy and security of data flowing across multiple networks. ", "IP-based technologies enable emergency communications systems to interconnect, creating the potential for nationwide systems. The emergence of nationwide systems may create a need for new policies that integrate these new technologies into response plans and protocols, and policies that support collaborative planning, training, and exercises across all levels of government to improve response. ", "Further, migration to new technologies is costly. Not all jurisdictions may be able to fund technology upgrades. Adoption of new technologies may also require upgrades to and investments in emergency communications systems and private telecommunications networks. "], "subsections": []}, {"section_title": "Issues for the 116th Congress", "paragraphs": ["The 116 th Congress may continue its oversight of the effectiveness of emergency communications before, during, and after natural or man-made disasters (e.g., hurricanes, wildfires), and the roles and responsibilities of federal, state, and local agencies, and private telecommunications providers during response. Congress may also to examine the effectiveness of federal programs established to promote and support emergency communications, including ", "National 9-1-1 Program administered by the National Highway and Traffic Safety Administration (NHTSA) in the U.S. Department of Transportation, which provides federal leadership and coordination in supporting and promoting optimal 911 services; First Responder Network Authority (FirstNet), the federal authority within the National Telecommunications and Information Administration (NTIA) in the U.S. Department of Commerce established to create the nationwide public safety broadband network; Integrated Public Alert and Warning System (IPAWS), the national alerting system administered by the Federal Emergency Management Agency (FEMA); Emergency Communications Division in the U.S. Department of Homeland Security's Cybersecurity and Infrastructure Security Agency (CISA), which is responsible for promoting interoperable and coordinated communications across all levels of government; and federal grant programs that fund emergency communications.", "Congress may also focus on the activities of the Federal Communications Commission (FCC) Public Safety and Homeland Security Bureau (PSHSB), which administers FCC policies related to emergency communications, including rules for carriers supporting 911 services; state and local use of 911 fees; public safety spectrum; public alerts, including rules for carriers delivering wireless alerts to mobile phones; disaster management and reporting of private network outages; and restoration efforts."], "subsections": []}]}, {"section_title": "U.S. National Health Security", "paragraphs": ["(Sarah A. Lister, February 11, 2019)", "In its quadrennial National Health Security Strategy , the U.S. Department of Health and Human Services (HHS) states: ", "U.S. National Health Security actions protect the nation's physical and psychological health, limit economic losses, and preserve confidence in government and the national will to pursue its interests when threatened by incidents that result in serious health consequences whether natural, accidental, or deliberate.", "The strategy aims to ensure the resilience of the nation's public health and health care systems against potential threats, including natural disasters and human-caused incidents, emerging and pandemic infectious diseases, acts of terrorism, and potentially catastrophic risks posed by nation-state actors.", "By law, the HHS Secretary \"shall lead all Federal public health and medical response to public health emergencies and incidents covered by the [ National Response Framework ],\" and the HHS Assistant Secretary for Preparedness and Response (ASPR) shall \"[s]erve as the principal advisor to the Secretary on all matters related to Federal public health and medical preparedness and response for public health emergencies.\" However, under the nation's federal system of government, state and local agencies and private entities are principally responsible for ensuring health security and responding to threats. The federal government's ability to affect national health security, through funding assistance and other policies, is relatively limited.", "The nation's public health emergency management laws have expanded considerably following the terrorist attacks in 2001. Since then, a number of public health emergencies revealed both improvements in the nation's readiness, and persistent gaps. The National Health Security Preparedness Index (NHSPI, or the Index), a public-private partnership begun in 2013, currently assesses preparedness, using 140 measures, across all 50 states and the District of Columbia. In its latest comprehensive report, for 2017, NHSPI found overall incremental improvements over earlier years. However, the report highlighted differing preparedness levels among states, stating: ", "Large differences in preparedness persisted across states, and those in the Deep South and Mountain West regions lagged significantly behind the rest of the nation. If current trends continue, the average state will require 9 more years to reach health security levels currently found in the best-prepared states.", "In addition, measures of health care delivery\u2014for example, the number of certain types of health care providers (including mental health providers) per unit of population, access to trauma centers, the extent of preparedness planning in long-term care facilities, and uptake of electronic health record systems\u2014continued to yield the lowest scores.", "The readiness of individual health care facilities and services to respond to a mass casualty incident or other public health emergency has been a persistent health security challenge. Aiming to address this, the HHS Centers for Medicare & Medicaid Services (CMS) has implemented a rule that requires 17 different types of health care facilities and service providers to meet a suite of preparedness benchmarks in order to participate in (i.e., receive payments from) the Medicare and Medicaid programs. The Emergency Preparedness (EP) Rule became effective in November 2017. Policymakers may be interested to see, in NHSPI results and through other studies, the extent to which the EP Rule yields meaningful improvements in national health system preparedness in the future. ", "For incidents declared by the President as major disasters or emergencies under the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( P.L. 93-288 , as amended), public assistance is available to help federal, state, and local agencies with the costs of some public health emergency response activities, such as ensuring food and water safety. However, no federal assistance program is designed specifically to cover the uninsured costs of individual health care services that may be needed as a consequence of a disaster. There is no consensus that this should be a federal responsibility. Nonetheless, during mass casualty incidents, hospitals and health care providers may face expectations to deliver care without a clear payment source of reimbursement. Also, the response to an incident could necessitate activities that begin before Stafford Act reimbursement to HHS has been approved, or that are not eligible for reimbursement under the act. (For example, there is no precedent for a major disaster declaration under the Stafford Act for an outbreak of infectious disease, and only one declaration of emergency, for West Nile virus in 2000.) Although the HHS Secretary has authority for a no-year Public Health Emergency Fund (PHEF), Congress has not appropriated monies to it for many years, and no funds are currently available.", "On several occasions Congress has provided supplemental appropriations to address uncompensated disaster-related health care costs and otherwise unreimbursed state and local response costs flowing from a public health emergency. These incidents include Hurricane Katrina and Hurricane Sandy, the 2009 H1N1 influenza pandemic, and the Ebola and Zika virus outbreaks. Supplemental appropriations for hurricane relief were provided for costs (such as uncompensated care) that were not reimbursed under the Stafford Act. The act was not invoked for the three infectious disease incidents, and supplemental appropriations were therefore needed to fund most aspects of the federal response to those outbreaks.", "Some policymakers, concerned about the inherent uncertainty in supplemental appropriations, have proposed dedicated funding approaches for public health emergency response. Two proposals in the 115 th Congress ( S. 196 , H.R. 3579 ) would have appropriated funds to the PHEF. These measures did not advance. In appropriations for FY2019 ( P.L. 115-245 ), Congress established and appropriated $50 million (to remain available until expended) to an Infectious Diseases Rapid Response Reserve Fund , to be administered by the Director of the HHS Centers for Disease Control and Prevention (CDC) \"to prevent, prepare for, or respond to an infectious disease emergency.\" The 116 th Congress may choose to examine any uses of this new fund by CDC, and to consider appropriations to the PHEF, as well as other options to improve national health security preparedness."], "subsections": []}, {"section_title": "Cybersecurity", "paragraphs": ["(Chris Jaikaran; March 29, 2019)"], "subsections": [{"section_title": "Introduction", "paragraphs": ["For policymaking purposes, cybersecurity can be considered the security of cyberspace . Taking this broad view allows policymakers to examine discrete elements of cybersecurity and determine which parts to address through the legislative process. Cyberspace, itself, includes the infrastructure necessary for the internet to work (e.g., wires, modems, and servers), the services used via the internet (e.g., web applications and websites), the devices on the network (e.g., computers and Internet-of-Things devices), and the users of those devices. Cybersecurity involves many interrelated issues, such as education; workforce management; research and development; intelligence; law enforcement; and defense.", "Recent congressional activity and Member statements suggest that five specific cybersecurity topics with an intersection to homeland security may arise during the 116 th Congress. This Insight first discusses the importance of risk management for cybersecurity, then introduces each of those topics: Information Sharing, Critical Infrastructure Protection and Cybersecurity, Cyber Supply Chain Risk Management, Federal Agency Oversight, and Data Protection and Privacy."], "subsections": [{"section_title": "Risk Management", "paragraphs": ["When computer scientists refer to cybersecurity, they are generally not talking about security as an absolute and achievable state of safety. Rather, they refer to cybersecurity as a process of risk management. Risk can be managed in four ways: it can be avoided, transferred, controlled, and accepted. To know the appropriate course of action, an organization must first understand which risks they face. Risks can be understood as the threats an organization faces, the vulnerabilities they have to their systems, and the consequences or impacts of a successful attack against them. Risks can be managed against systems, networks, and data. In managing those risks, managers employ an information security model to understand risk areas and tools to address risks. Policymakers could choose to examine these risk management factors holistically, or to consider specific elements and ways to address specific risk factors. "], "subsections": []}]}, {"section_title": "Policy Areas", "paragraphs": [], "subsections": [{"section_title": "Information Sharing", "paragraphs": ["Policymakers could choose to examine information sharing as a tool that may strengthen an organization's cybersecurity. The need to maintain current awareness of the relationships between technologies and attacks is a reason that information sharing is frequently included in the cybersecurity discussion. Through information sharing, one party seeks to bolster the knowledge of its partners. Information may provide opportunities for organizations to learn from one another, reduce their vulnerability to hacking, and quickly adapt to changing conditions. Successful information sharing occurs when an organization receives information, has the capability to process it, knows how to use it, and makes a change to its practices to better secure itself. However, the advantage to sharing information is only realized when the result is a valuable change in behavior because of the information shared. Some organizations may miss critical information, lack the expertise to understand it, lack the resources to take action, or otherwise not change their behavior. "], "subsections": []}, {"section_title": "Critical Infrastructure Protection and Cybersecurity", "paragraphs": ["The National Infrastructure Protection Plan directs the owners and operators of facilities under the nation's 16 critical infrastructure sectors and the sector-governing bodies to consider cybersecurity risks to their sectors. However, their ability to understand risk and to provide resources to manage risk for their sectors varies. In an effort to bolster cybersecurity risk management, policymakers could choose to direct federal agencies to provide assistance to a sector or sectors; to engage in rulemaking; or to otherwise incentivize cybersecurity activities (e.g., expediting security clearances or prioritizing federal contracting opportunities).", "To assist a sector, some agencies have specific programs designed to provide information, technical assistance, or capabilities for critical infrastructure. DHS can provide assistance to all sectors. The National Institute of Standards and Technology (NIST) has published a cybersecurity framework to assist those responsible for critical infrastructure. "], "subsections": []}, {"section_title": "Cyber Supply Chain Risk Management", "paragraphs": ["Recent news articles and government reports have focused attention on cyber supply chain issues. Managing risks associated with a global and complex product supply chain for information technology (IT) is known as cyber supply chain risk management (C-SCRM). C-SCRM refers to addressing both the risks that foreign adversaries may introduce to products and unintentional risks, such as poor quality control and vendor management. Policymakers could choose to pursue legislative options to clarify agency responsibilities relative to C-SCRM, such as increasing awareness, providing oversight, prohibiting certain companies from supplying components or services, or requiring an entity to evaluate products for cyber supply chain risks. "], "subsections": []}, {"section_title": "Federal Agency Oversight", "paragraphs": ["Federal agencies collect, process, store, and transmit sensitive information such as personally identifiable information and national security information. Agencies rely on IT to use this information and requested over $17 billion in cybersecurity funding for FY2020. Yet, the Government Accountability Office (GAO) bi-annually highlights that agencies face various challenges in IT management. This is despite existing statutes, guidance, and resources agencies have to assist in managing their IT. Congress could choose to pursue investigations, hearings, or legislation to improve oversight of the government's overall IT program(s), or could focus on an individual agency's cybersecurity efforts. In pursuing this oversight, Congress may review agency spending on IT and cybersecurity, and follow up on GAO and Inspector General (IG) recommendations related to improving agency IT management."], "subsections": []}, {"section_title": "Data Security and Privacy", "paragraphs": ["The Equifax breach and multiple Facebook incidents have highlighted data security and privacy issues. While these concepts may be interrelated, and certain technologies, like encryption, can help achieve both, for policymaking and operational purposes they are distinct. Data security refers to strategies to keep out unauthorized users, while privacy refers to using data regardless of where it is stored or who accessed it. In keeping with the concept of risk management, it is important to consider \"from what\" one is seeking to secure their data or seek to keep it private when designing policies or strategies for security and privacy. Policymakers could choose to pursue comprehensive (such as the General Data Protection Regulation) or sectoral (such as the Health Insurance Portability and Accountability Act, HIPAA , standards) approaches to data security and privacy. In the past, the federal government has addressed these issues sectorally . But recent state and federal discussions have focused on more comprehensive approaches."], "subsections": []}]}]}, {"section_title": "Department of Homeland Security Human Resources Management", "paragraphs": ["(Barbara L. Schwemle; February 8, 2019)", "Human resources management (HRM) underlies the Department of Homeland Security's (DHS) mission and performance. DHS's Chief Human Capital Officer (CHCO) \"is responsible for the Department's human capital program,\" which is described as including such elements as \"human resources policy, systems, and programs for strategic workforce planning, recruitment and hiring, pay and leave, performance management, employee development, executive resources, labor relations, work/life and safety and health.\" ", "Under Title 5, Section 1402, of the United States Code , a CHCO's functions include \"setting the workforce development strategy\" and aligning HRM with \"organization mission, strategic goals, and performance outcomes.\" DHS's Management Directorate web page includes the CHCO position under the Under Secretary for Management (USM). The Organizational Chart and Leadership web pages do not include the position under the USM nor explain that difference. At DHS, the CHCO is a career Senior Executive Service position. The incumbent CHCO assumed the position in January 2016.", "The 116 th Congress may decide to conduct oversight of DHS CHCO operations\u2014including placement, role, and functions within the department\u2014and DHS human resources management. Such reviews could focus on the department's plans for, and performance of, HRM. These plans are set forth in a Strategic Plan and an Annual Performance Report. The latter report for FY2020 is expected to be published along with the release of the department's budget request. Congress may also examine DHS activities related to the President's Management Agenda (PMA), particularly the agenda's Cross-Agency Priority Goal (CAP) to develop the federal workforce. These topics are briefly discussed below.", "Hearings, roundtables, and meetings with officials and employees could inform congressional oversight on DHS appropriations, administration, and management as they relate to HRM. Annually, on or about the anniversary of DHS's official inception, which occurred on March 1, 2003, Congress could consider conducting a review that focuses specifically on the CHCO operations and HRM policies and programs. The DHS FY2020 budget request, anticipated in March 2019, may enable Congress to conduct such a review within the context of the department's Strategic Plan, Performance Report, and PMA activities."], "subsections": [{"section_title": "DHS Strategic Plan", "paragraphs": ["Section 2 of the GPRA Modernization Act of 2010 ( P.L. 111-352 ) requires agency heads to submit a strategic plan that provides, among other things, \"a description of how the goals and objectives are to be achieved,\" including a description of the \"human, capital \u2026 resources required to achieve those goals and objectives.\" Section 230 of the Office of Management and Budget's (OMB) Circular No. A-11 (2018), \"Preparation, Submission and Execution of the Budget,\" stated:", "An agency's Strategic Plan should provide the context for decisions about performance goals, priorities, strategic human capital planning and budget planning. It should provide the framework for the detail published in agency Annual Performance Plans, Annual Performance Reports and on Performance.gov. ", "DHS published its most recent publicly available Strategic Plan, covering FY2014-FY2018, in September 2015. The plan briefly mentioned HRM. To \"strengthen service delivery and manage DHS resources,\" the plan stated that the department would \"[r]ecruit, hire, retain, and develop a highly qualified, diverse, effective, mission-focused, and resilient workforce.\" Specific objectives identified to accomplish this were \"1) building an effective, mission-focused, diverse, and inspiring cadre of leaders; 2) recruiting a highly qualified and diverse workforce; 3) retaining an engaged workforce; and 4) solidifying a DHS culture of mission performance, adaptability, accountability, equity, and results.\"", "To obtain an understanding of progress on the plan's HRM components to date, Congress could ask the department to document the specific framework for these four objectives and the conditions and factors related to each being fulfilled. Congress could also ask DHS to include a statement about the expected publication of an updated Strategic Plan on the Strategic Planning page of its website."], "subsections": []}, {"section_title": "DHS Annual Performance Report", "paragraphs": ["A Performance Report, required by Section 3 of P.L. 111-352 , is to be published by the first Monday in February each year and cover \"each program activity set forth in the budget.\" Among the other requirements that are specified at Title 31, Section 1115(b), of the United States Code , the plan must \"provide a description of how the performance goals are to be achieved,\" including \"the operation processes, training, skills and technology, and the human, capital, information, and other resources and strategies required to meet those performance goals.\"", "DHS published its most recent Performance Report, covering FY2017-FY2019, in February 2018. The report noted that the Human Capital Operating Plan (HCOP) identifies \"goals, objectives, and performance measures linked to DHS strategy\" and \"emphasizes management integration, accountability tracking, and the use of human capital data analysis to meet DHS mission needs.\" According to the department, the HCOP is used to \"identify and address critical skills gaps.\" The Performance Report stated that Component Recruitment and Outreach Plans specify \"recruitment strategies\" as \"a key element to sustain progress in skill gap closure.\"", "The HCOP and the Component Recruitment and Outreach Plans do not appear to be publicly available on the department's website. Congress could suggest that the department include a link to these documents on DHS.gov to facilitate consultation and oversight about measurable results for performance goals."], "subsections": []}, {"section_title": "President's Management Agenda", "paragraphs": ["The President Donald Trump Administration describes the PMA as setting forth \"a long-term vision for modernizing the Federal Government.\" The PMA is to be implemented through CAPs that address \"critical government-wide challenges.\" One such CAP\u2014led by the Office of Personnel Management, OMB, and the Department of Defense\u2014is \"Developing a Workforce for the 21 st Century.\" It seeks a strategic human capital management framework that enables managers to \"hire the best employees, remove the worst employees, and engage employees.\" Three CAP subgoals under this objective are \"Improve Employee Performance Management and Engagement,\" \"Reskill and Redeploy Human Capital Resources,\" and \"Simple and Strategic Hiring.\"", "The DHS CHCO is the leader for the third CAP subgoal, which includes strategies to reduce hiring times; \"better differentiate applicants' qualifications, competencies, and experience;\" and \"eliminate burdensome policies and procedures.\"", "Congressional oversight of PMA activities at DHS could focus on such matters as key initiatives, measureable results, and anticipated timelines for accomplishing subgoals. "], "subsections": []}]}, {"section_title": "DHS Unity of Effort", "paragraphs": ["(William L. Painter; March 8, 2019)", "An unresolved debate dating from the origin of the Department of Homeland Security (DHS) is the extent of department management involvement in the functioning of departmental components. Some policy experts supported a strong management function, which would replace the leadership of the components, while others supported a limited management function that allowed DHS components to function freely in their areas of expertise, much as they had before. ", "Once the department was established in 2003, it became clear that a small management cadre could not provide adequate coordination of policy or oversight of the department. The benefits of coordinated action by a large organization, including setting operational and budgetary priorities, were being lost due to the lack of a capable management cadre with the capacity to manage the department's diverse missions. As its components continued to perform their missions, the department undertook efforts to establish a unified identity and way of doing business. The term \"One DHS\" was used to describe these initiatives under Tom Ridge, the first Secretary of DHS, and the efforts continued through secretaries Michael Chertoff and Janet Napolitano.", "On April 22, 2014, Jeh Johnson, the fourth secretary of DHS, issued a memorandum to DHS leadership, entitled \"Strengthening Departmental Unity of Effort.\" This now-widely circulated memorandum set out an agenda to reform the Department of Homeland Security's way of doing business by implementing new analytical and decisionmaking processes to develop strategy, plan, and identify joint requirements across multiple department components. These would bring component leadership together above the component level to ensure unity of effort across the department.", "Secretary Johnson described it this way in a Federal Times interview:", "We've embarked on a unity of effort initiative that promotes greater coordination among departments, greater centralized decision-making at headquarters, a more strategic approach to our budget building process, a more strategic departmentwide approach to our acquisition strategy. It is clearly a balance. Within the Department of Homeland Security there are components that long predated the Department of Homeland Security. And so what we are not asking components to do is to all act and behave together. They are distinct cultures.... But what we are asking and expecting our component leadership to do is participate with us in a more strategic approach to promote greater efficiency in how we operate, how we conduct ourselves, particularly in our budget process and in our acquisitions.", "The memorandum laid out four areas of initial focus. ", "1. The first was to bring together senior leaders of the department in two groups: a Senior Leaders Council to discuss \"overall policy, strategy, operations and Departmental guidance,\" and a Deputies Management Action Group (DMAG) to \"advance joint requirements development, program and budget review, acquisition reform, operational planning, and joint operations.\" 2. The second area was to make improvements to the departmental management processes for investments. Specifically, incorporating strategic analysis and joint requirements planning into the annual budget development process, directing the DMAG to develop and facilitate a component-driven joint requirements process, and reviewing and updating the DHS acquisition oversight framework. 3. The third was developing a stronger strategy, planning, and analytic capability within the Office of Policy. 4. The fourth was to improve coordination of cross-component operations.", "Bipartisan and bicameral support for these reforms was shown in several hearings during the 113 th and 114 th Congresses. Both House and Senate Appropriations Committee reports have included language supportive of the department's managerial reorganization, although there has been concern expressed about keeping Congress informed about progress and consequences of reorganizations in the field. ", "Several of the action items included in the memorandum were completed in 2014, such as the establishment of a Cost Analysis Division in the Office of the Chief Financial Officer in May 2014. The role of this division is to ensure life-cycle cost estimates are part of major acquisition plans. DHS also completed development of a Southern Border and Approaches Campaign Plan\u2014a four-year strategic framework for joint operations securing the southern border of the United States.", "In 2015, DHS implemented a Unity of Effort Award, presented by the Secretary, recognizing \"outstanding efforts to significantly improve efficiency and effectiveness across the U.S. Department of Homeland Security,\" specifically noting contributions to the unity of effort initiative. ", "At the end of the 114 th Congress, Title XIX of the FY2017 National Defense Authorization Act provided specific statutory authority to DHS for certain activities connected with the Unity of Effort initiative, including authorizing joint task forces and redefining the role of the former Office of Policy and renaming it the Office of Strategy, Policy, and Plans.", "At the confirmation hearing for General John Kelly, interest in management reform and the future of Johnson's Unity of Effort initiative was apparent, with both General Kelly and some Senators praising the progress that had been made. However, Secretary Kelly's six-month tenure at the department was largely devoted to other issues. Then-Deputy Secretary Elaine Duke, after a six-month tenure as Acting Secretary, noted in early 2018 that the border security mission at DHS was one where the unity of effort initiative was maturing, as components worked together to accomplish their missions. Secretary Kirstjen Nielsen, who assumed the post in December 2017, indicated in her pre-confirmation questionnaire that she intended \"to assess the effectiveness of current unity of effort programs and processes and strengthen them where needed,\" highlighting interest in \"integrating and leveraging\" capabilities and promoting joint education and training.", "Congress may debate the appropriate role of departmental management at DHS, the extent of engagement Congress should have as reforms go forward, and the progress of management reforms, including whether they are having the desired effect. Congress may wish to follow up on the Secretary's priorities as outlined in her questionnaire."], "subsections": []}]}}
{"id": "R45731", "title": "House Rules Changes Affecting Committee Procedure in the 116th Congress (2019-2020)", "released_date": "2019-05-21T00:00:00", "summary": ["As agreed to in the House, H.Res. 6, a resolution adopting the rules of the House of Representatives, provided amendments to the rules, as well as separate orders, that affect committee procedure in the 116th Congress (2019-2020). Several of these changes apply to general committee procedure, while others concern specific committees, such as modifications to the names, jurisdiction, or procedures of certain House committees. The rules package also established, during the 116th Congress, two new select committees.", "H.Res. 6 made several changes to committee membership and organization. Most significantly, it removed the committee chair term limits that were in effect during each Congress from the 104th through the 115th Congresses (1995-2018), excluding the 111th Congress (2009-2010). H.Res. 6 added a provision to Rule XXIII that calls on any Member, Delegate, or the Resident Commissioner who has been indicted or formally charged with certain felony offenses to refrain from committee business. It clarified that Delegates and the Resident Commissioner may serve on joint committees, and it lengthened from 30 days to 60 days the period in which to adopt and publish committee rules at the start of a Congress.", "In a separate order, the 116th Congress rules package established a requirement that certain legislative measures must be reported and be subject to a committee hearing and markup prior to their consideration on the floor. This requirement applies, with some exceptions, to measures that are raised under the terms of a special rule reported from the Rules Committee. Another separate order requires most standing committees to hold a Member Day Hearing during the first session of the 116th Congress, affording any Member the opportunity to speak on proposed legislation within the committee's jurisdiction. H.Res. 6 clarified the notification requirement for committee markup meetings. As amended, clause 2 of Rule XI provides Members at least three workdays to prepare for an upcoming markup, as opposed to the less specific requirement that markups may not occur before the \"third day\" after a chair announces the meeting.", "H.Res. 6 altered procedures concerning committee oversight. The 115th Congress House rules requirement that committees prepare and submit \"authorization and oversight plans\" was replaced with the requirement that chairs develop oversight plans in consultation with the ranking member. In addition, a separate order now allows committee counsel to take depositions without the presence of a committee member.", "Amendments to the House standing rules changed two committees' names and clarified their jurisdictions. The Committee on Education and the Workforce became the Committee on Education and Labor, a name it held in some previous Congresses. As amended, Rule X specified that the committee's jurisdiction includes the general management of the Department of Education and the Department of Labor. The Committee on Oversight and Government Reform was re-designated the Committee on Oversight and Reform. The rules changes clarified that the Committee on Oversight and Reform's existing jurisdiction over the review and study of all government activities includes \"the Executive Office of the President.\"", "A separate order directed the Committee on Ethics to empanel an investigative subcommittee to review allegations whenever a Member, Delegate, or the Resident Commissioner is indicted on a criminal charge. H.Res. 6 amended clause 3 of Rule XI to allow the Committee on Ethics, or an investigative subcommittee thereof, to consider trial evidence in ethics investigations of Members, Delegates, and the Resident Commissioner.", "Another separate order enabled the Committee on Financial Services to establish as many as seven subcommittees, as opposed to the six subcommittees allowed under the rules, while an amendment to clause 3 of Rule XIII exempted the Rules Committee from the requirement that committee reports must include recorded votes taken in committee. The rules changes also removed membership term limits to the Committee on the Budget. However, the rules of the Democratic Caucus and Republican Conference may continue to limit the number of terms that Members may serve on the Budget Committee.", "Finally, the rules package established, for the 116th Congress, the Select Committee on the Climate Crisis and the Select Committee on the Modernization of Congress. The committees are to \"investigate, study, make findings, hold public hearings, and develop recommendations.\" By the end of the 116th Congress, they are to report their findings and policy recommendations to the relevant standing committees and publish them in a publicly available format."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["In January 2019, the House agreed to H.Res. 6 , a resolution \"Adopting the Rules of the House of Representatives for the One Hundred Sixteenth Congress.\" This report summarizes amendments to House rules affecting committee procedure in the 116 th Congress (2019-2020) as provided for in H.Res. 6 . ", "The report also describes separate orders contained in the resolution that relate to committee procedure, including the establishment of the Select Committee on the Climate Crisis and the Select Committee on the Modernization of Congress. Separate orders have the same force and effect as House rules and are commonly included in the House rules package resolution.", "In the 116 th Congress, rules changes that affect all House committees concern committee membership and organization, hearings and markups, and committee oversight and investigations. Changes that affect specific committees include modifications to the names, jurisdiction, or procedure of certain House committees."], "subsections": []}, {"section_title": "General Committee Procedure", "paragraphs": [], "subsections": [{"section_title": "Committee Chairs, Membership, and Organization", "paragraphs": [], "subsections": [{"section_title": "Committee Chairmanship Limits", "paragraphs": ["In the 116 th Congress, H.Res. 6 struck clause 5(c)(2) of Rule X, which stated that a Member could not serve as chair of the same standing committee or subcommittee for more than three consecutive Congresses (disregarding any service of less than a full session), except on the Committee on Rules. This amendment enables Members to serve an unrestricted number of terms as chairs, as was the case before the 104 th Congress (1995-1996) and during the 111 th Congress (2009-2010)."], "subsections": []}, {"section_title": "Allowing Delegates and the Resident Commissioner to Serve on Joint Committees", "paragraphs": ["H.Res. 6 amended clause 3(b) of Rule III to make clear that the Delegates and the Resident Commissioner from Puerto Rico may be appointed to joint committees. The rule previously mentioned only service by the Delegates and the Resident Commissioner on select and conference committees. ", "House rules first afforded membership to standing committees to Delegates in 1871 and to the Resident Commissioner in 1904. House rules were amended in the 93 rd Congress (1973-1974) to allow the Delegates and Resident Commissioner, effective in the subsequent Congress, to be appointed to conference committees on legislation reported from committees on which they served. Chamber rules were amended in 1979 (96 th Congress) to authorize their appointment to select committees. In the 103 rd Congress (1993-1994), the House expanded eligibility to encompass all conference committees. The 116 th Congress rules provide the Delegates and the Resident Commissioner with equal status as Members on standing, select, joint, and conference committees."], "subsections": []}, {"section_title": "Service of Indicted Members on Committees", "paragraphs": ["H.Res. 6 amended clause 10 of Rule XXIII, adding a provision that calls on any Member, Delegate, or the Resident Commissioner who has been indicted or formally charged with a felony offense that is punishable by at least two years in prison to resign from committee assignments and party caucus or conference leadership positions. Such individuals should submit their resignations from any party leadership position and any type of House or joint committee or subcommittee thereof \"unless or until\" they are acquitted or the charges are dismissed or reduced to less than a felony.", "Rule XXIII comprises the House's Code of Official Conduct, which was first adopted in 1968 by H.Res. 1099 (90 th Congress). In the 116 th Congress, the new language added to clause 10, subparagraph (b), supplements an existing provision written into the rule in 1975 (94 th Congress) that states that a Member, Delegate, or Resident Commissioner should refrain from committee business if the individual is convicted of a crime and may be sentenced to imprisonment. ", "Note that clause 10 language uses the word should as opposed to shall or must . The Democratic Caucus and Republican Conference could recommend the removal of a party member from a committee assignment if the Member does not voluntarily resign. The House could then vote on a privileged resolution to remove the member."], "subsections": []}, {"section_title": "Rules of Committees", "paragraphs": ["The rules package gave committees a longer period in which to adopt and publish committee rules of procedure. In the 116 th Congress, each committee has 60 days, rather than 30 days, to \"make its rules publicly available in electronic form and submit such rules for publication in the Congressional Record \" after the chair is elected in an even-numbered year. H.Res. 6 amended clause 2(a)(2) of Rule XI, striking the number 30 and replacing it with 60. According to the Rules Committee's summary of H.Res. 6, the \"change is intended to grant committees adequate time to organize, as some committees do not have a full complement of members at the start of a Congress.\""], "subsections": []}]}, {"section_title": "Hearing and Markup Procedure", "paragraphs": [], "subsections": [{"section_title": "Requiring Committee Hearing and Markup on Bills and Joint Resolutions", "paragraphs": ["In a separate order, the rules package requires that, during the 116 th Congress, after March 1, 2019, certain lawmaking measures must be reported and be subject to related committee hearings and a markup prior to floor consideration. Otherwise, \"it shall not be in order\" to consider them on the House floor. This requirement applies to bills and joint resolutions considered under the terms of a special rule reported by the Rules Committee\u2014excluding measures that continue appropriations, contain an emergency designation, or are listed on the Consensus Calendar and are designated for consideration. ", "According to the separate order, a lawmaking measure is not to be considered \"pursuant to a special order of business [special rule] reported by the Committee on Rules\" if it has not been reported by a committee. If it has been reported, the committee report accompanying the bill or joint resolution is to include a list of related committee and subcommittee hearings and a designation of at least one such hearing that was used to develop or consider the measure. ", "Bills and joint resolutions brought to the House floor under the terms of a rule from the Rules Committee are generally measures that Members want to debate at length or amend on the floor due to their complexity, controversy, or policy importance. Measures considered under special rules include appropriations bills, tax legislation, and significant reauthorization bills. ", "Under the separate order, these types of bills and joint resolutions are to go through the committee hearing and markup process before being considered by the full chamber. However, special rules often include \"waivers\" for all or certain types of points of order against consideration of a bill. "], "subsections": []}, {"section_title": "Member Day Hearing Requirement", "paragraphs": ["H.Res. 6 includes a separate order that requires standing committees to hold a \"Member Day Hearing\" during the first session of the 116 th Congress. This new requirement does not apply to the Committee on Ethics, and it allows the Committee on Rules to hold its Member Day Hearing in the second session of the Congress \"in order to receive testimony on proposed changes to the standing rules for the next Congress.\" According to the Rules Committee summary of H.Res. 6, Member Day Hearings allow Members, Delegates, and the Resident Commissioner, \"whether or not they are a member of the committee,\" to speak before a committee on proposed legislation within the committee's jurisdiction. "], "subsections": []}, {"section_title": "Committee Markup Notice", "paragraphs": ["H.Res. 6 amended clause 2(g) of Rule XI to modify the three-day notification requirement for committee markup meetings. Under paragraph (3)(A) of this clause, the chairs of committees \"shall announce the date, place, and subject matter\" to consider and markup legislation. ", "As in previous Congresses, markups may not occur earlier than the third day on which Members have been given notice thereof. In the 116 th Congress, subparagraph (3)(A)(ii) specifies that the third day is the \"third calendar day,\" rather than the \"third day,\" and that the notification period excludes \"Saturdays, Sundays, or legal holidays except when the House is in session on such a day.\" Thus, the revised provision is designed to guarantee Members at least three workdays' notice before a committee meets to mark up legislation."], "subsections": []}]}, {"section_title": "Committee Oversight, Activities and Investigations", "paragraphs": [], "subsections": [{"section_title": "Committee Oversight Plans", "paragraphs": ["Oversight plans include a committee's intentions, during a Congress, to review federal laws, regulations, court decisions, programs, and agencies within their jurisdictions. From the 104 th through the 114 th Congresses (1995-2016), standing committees were required to adopt and submit an oversight plan. In the 115 th Congress, House rules required committees to submit authorization and oversight plans. H.Res. 6 amended clause 2(d) of Rule X to restore the previous requirement for committee oversight plans. The amendment also altered some procedures regarding oversight plans. ", "In the 115 th Congress, each standing committee\u2014except Appropriations, Ethics, and Rules\u2014was required to hold an open meeting, not later than February 15 th in odd-number years, in which the committee marked up and adopted an authorization and oversight plan. Each committee had to submit its plan to the Committees on Oversight and Government Reform (now Oversight and Reform), House Administration, and Appropriations. By March 31, the Committee on Oversight and Government Reform was to report the various plans to the House as well as any recommendations about them. ", "Under the rules change adopted in the 116 th Congress, the same standing committees are required to submit oversight plans. In contrast to the 115 th Congress, however, full committees do not mark up and adopt the plans in open meetings. Instead, the chair prepares the plan \"in consultation with the ranking member.\" The chair then provides a copy to committee members \"at least seven calendar days\" before submitting it to the Committee on Oversight and Reform and the Committee on House Administration by March 1 of the first session of Congress, along with any \"supplemental, minority, additional, or dissenting views submitted by a member of the committee.\" The completed plans no longer must be submitted to the Appropriations Committee. ", "Pursuant to clause 2(d), the House Committee on Oversight and Reform shall, after consulting with the majority leader and the minority leader, \"report to the House,\" by not later than April 15 in the first session, the various oversight plans. As in earlier Congresses, the Committee on Oversight and Reform is to also include \"any recommendations ... to ensure the most effective coordination of oversight plans.\"", "In sum, in the 116 th Congress, chairs are given the prerogative to develop oversight plans, as opposed to the full standing committee, but are to include any dissenting views of committee members. The deadline is extended for submitting the plans to the Committee on Oversight and Reform and the Committee on House Administration (from February 15 to March 1) and for Oversight and Reform to report the plans to the full House (from March 1 to April 15). The resolution removed the role of the Appropriations Committee in the review of such plans."], "subsections": []}, {"section_title": "Activity Reports", "paragraphs": ["The 116 th rules package made a technical change to the list of items required to be included in the activity reports that committees must adopt by January 2 of each odd-numbered year. H.Res. 6 amended clause 1(d)(2) of Rule XI to remove authorization from the phrase authorization and oversight plans .", "In the 115 th Congress, committee activity reports were required to summarize the authorization and oversight plans previously submitted by the committees. The amended clause brought the committee activity reports requirement in line with the 116 th Congress requirement for oversight plans described in the previous section of this report."], "subsections": []}, {"section_title": "Deposition Authority", "paragraphs": ["The rules package included a separate order that authorized the chairs of all standing House committees, except for the Rules Committee, and the chair of the Select Intelligence Committee to order the \"taking of depositions, including pursuant to subpoena, by a member or counsel of such committee.\" D epositions are to be ordered in consultation w ith the ranking minority member and are subject to regulations issued by the Committee on Rules and printed in the Congressional Record .", "These provisions are identical to those of a separate order adopted in the 115 th Congress, except the 116 th Congress version does not include the requirement that \"at least one member of the committee shall be present at each deposition\" unless the witness or the committee waived the requirement. Thus, according to the Rules Committee summary of H.Res. 6, \"Members, Delegates, and the Resident Commissioner may participate in all such depositions, but their presence is not required.\""], "subsections": []}]}]}, {"section_title": "Committee on Oversight and Reform", "paragraphs": [], "subsections": [{"section_title": "Designating Committee on Oversight and Reform", "paragraphs": ["The 116 th Congress r ules package amended House rules to re - designate the Committee on Oversight and Government Reform as the Committee on Oversight and Reform. H.Res. 6 struck each occurrence of \"Committee on Oversight and Government Reform\" in the Rules and replaced it with \"Committee on Oversight and Reform.\"", "In previous Congresses, the committee operated under different names. In 1927, the committee was established as the Committee on Expenditures in the Executive Departments, consolidating 11 separate committees that investigated such expenditures. In 1953, the House changed its name to the Committee on Government Operations. Following a change in House majority to the Republican Party in 1995, the committee assumed the jurisdictions of the Committee on the Post Office and Civil Service and the Committee on the District of Columbia, which were abolished, and was designated the Committee on Government Reform and Oversight. Since then, it has also operated under the name Government Reform (106 th -111 th Congresses), Oversight and Government Reform (112 th -115 th Congresses), and now Oversight and Reform (116 th Congress). "], "subsections": []}, {"section_title": "Oversight over the Executive Office of the President", "paragraphs": ["Clause 3 of Rule X assigns special oversight functions to some House committees. H.Res. 6 amended clause 3 of Rule X to include language emphasiz ing the Commi ttee on Oversight and Reform's responsibility to oversee presidential activities. Clause 3(i) provides the committee' s oversight mandate : \"The Commi ttee on Oversight and Reform shall review and study on a continuing basis the operation of Government activities at all levels.\" Previously, 3(i) concluded, \"with a view to determining their economy and efficiency.\" ", "As amended by H.Res. 6, the clause 3 provision states that the committee is to review and study \"Government activities at all levels, including the Executive Office of the President.\" According to the summary of the rules package issued by the Rules Committee, the amendment \"clarifies the Committee on Oversight and Reform's existing special oversight authority over all operations of government.\""], "subsections": []}, {"section_title": "Oversight and Reform Committee Depositions", "paragraphs": ["H.Res. 6 s truck an existing provision from clause 4 of Rule X that required a member of the Committee on Oversight and Reform to be present when the committee t akes a dep osition unless the deponent waived the requirement. As amended, c lause 4 (c) , now authorize s committee counsel to take a de position without a committee member in attendance , a standard that was previously in force during the 111 th Congress (2009-2010) . ", "The deposition rules change is similar to the separate order described in the \"Deposition Authority\" section of this report. The separate order, however, applies to several committees, while the rules amendment affects only the Committee on Oversight and Reform. The amended rule will be printed in the House Manual for the 116 th Congress. Separate orders are not printed in the House Manual ."], "subsections": []}]}, {"section_title": "Committee on Education and Labor", "paragraphs": [], "subsections": [{"section_title": "Designating Committee on Education and Labor", "paragraphs": ["The 116 th rules package re-designated the Committee on Education and the Workforce, changing the committee's name to the Committee on Education and the Labor. H.Res. 6 strikes Workforce from clauses 1 and 3 of Rule X and inserts Labor . ", "Since its establishment in 1867 (40 th Congress), the committee has operated under several names: Education and Labor (40 th -47 th , 80 th -103 rd , 110 th -111 th , and 116 th -present); Education (48 th -79 th ); Economic and Educational Opportunities (104 th ); and Education and the Workforce (105 th -109 th and 112 th -115 th ). In its recent history, the committee has been designated the Committee on Education and the Workforce under Republican leadership and the Committee on Education and Labor under Democratic leadership."], "subsections": []}, {"section_title": "Education and Labor Jurisdiction Clarification", "paragraphs": ["H.Res. 6 a dded two subparagraphs to clause 1(e) of Rule X to specify that the Committee on Education and Labor's jurisdiction includes the \"organization, administration, and general management\" of the Department of Education and the Department of Labor. These subparagraphs were added to the existing provisions establishing the committee's jurisdiction over federal education and labor programs, standards, and disputes. According to the Rules Committee , t he amendment clarifies the committee' s \"existing jurisdiction\" concerning the departments' general management."], "subsections": []}]}, {"section_title": "Committee on Ethics", "paragraphs": [], "subsections": [{"section_title": "Empaneling Investigative Subcommittee of the Committee on Ethics", "paragraphs": ["The 116 th rules package includes a separate order directing the Committee on Ethics to form an investigative subcommittee in cases where a Member, Delegate, or the Resident Commissioner is indicted on a criminal charge. This separate order stated that the text of H.Res. 451 (110 th Congress, 2007-2008) will apply in the 116 th Congress. H.Res. 451 instructed the Ethics Committee (then called the Committee on Standards of Official Conduct) to empanel an investigative subcommittee to review the allegations whenever a Member of the House of Representatives, including a Delegate or Resident Commissioner to the Congress, is indicted or otherwise formally charged with criminal conduct in a court of the United States or any state not later than 30 days after the date of such indictment or charge. If the committee chooses not to empanel, it is to submit a report to the House describing the reasons for not empaneling an investigative subcommittee as well as the actions, if any, the committee took in response to the allegations."], "subsections": []}, {"section_title": "Considering Criminal Trial Evidence in Ethics Investigation", "paragraphs": ["H.Res. 6 amended clause 3(p) of Rule XI to allow the Committee on Ethics to consider certain criminal trial evidence in ethics investigations of Members, Delegates, and the Resident Commissioner. The new language authorizes the full committee or an investigative subcommittee thereof, if the respondent is convicted for a crime that \"is related to the subject of the investigation,\" to \"take into evidence the trial transcript or exhibits admitted into evidence at a criminal trial.\" ", "As referenced in the previous section of this report, \"Empaneling Investigative Subcommittees of the Committee on Ethics,\" a 116 th Congress separate order instructed the Committee on Ethics to form an investigative subcommittee in response to the criminal indictment or charging of a Member, Delegate, or the Resident Commissioner in federal or state court. As amended, clause 3(p) enables investigative subcommittees formed under the terms of this separate order, or established in another manner, to consider trial evidence following a conviction. The full Ethics Committee may also receive trial evidence regarding a Member, Delegate, or Resident Commissioner under investigation."], "subsections": []}]}, {"section_title": "Committee on the Budget", "paragraphs": [], "subsections": [{"section_title": "Committee Membership Limits", "paragraphs": ["H.Res. 6 removed term limits for members of the Committee of the Budget. In previous Congresses, committee members could serve for a set number of terms as specified in clause 5 of Rule X. In the 115 th Congress, the limit was no more than \"four Congresses in a period of six successive Congresses.\" That number could be extended if the Member served as the chair or ranking member of the committee.", "Now, under House rules, Members, Delegates, and the Resident Commissioner may serve as committee members or as the chair or ranking member regardless of the number of terms they have previously served in those positions. However, the rules of the Democratic Caucus, 116 th Congress, state that no members of the caucus, with some exceptions, may serve as a member of the Budget Committee during more than three out of five successive Congresses."], "subsections": []}]}, {"section_title": "Committee on Rules", "paragraphs": [], "subsections": [{"section_title": "Recorded Votes in Rules Committee Reports", "paragraphs": ["The 116 th r ules package allow s the Committee on Rules to file its committee reports without the inclusion of record ed votes taken in the committee . As stated in c lause 3 of Rule XIII , committee reports are to include \"the total number of votes cast for and against, and the names of members voting for and against\" reporting a measure or amendments offered to a measure. In previous Congres ses, clause 3(b) clarified that this requirement did not apply to the Committee on Ethics. H.Res. 6 inserted an additional exception for the Committee on Rules: The requirement to include recorded vote information applies \"only to the maximum extent practicable to a report by the Committee on Rules on a rule, joint rule, or the order of business.\"", "According to the Rules Committee, the change reflects that committee's \"constricted timeframe\" for preparing written reports. Prior to the rules change, the reporting requirement in clause 3 could potentially delay the floor consideration of special orders of business (special rules) reported by the Rules Committee and, consequently, lead to the delay of the consideration of measures considered under the terms of special rules."], "subsections": []}]}, {"section_title": "Committee on Financial Services", "paragraphs": [], "subsections": [{"section_title": "Additional Subcommittee", "paragraphs": ["H.Res. 6 included a separate order that provided the Committee on Financial Services with more flexibility to establish subcommittees. The separate order states that the committee can have \"not more than seven subcommittees\" during the 116 th Congress. Clause 5(d) of Rule X limits each committee to establishing not more than five subcommittees. Subsequent subdivisions of the rule, however, provide exceptions to this limit. For instance, a committee that has a Subcommittee on Oversight may have six subcommittees, the Appropriations Committee may have 13 subcommittees, and other named committees may have not more than seven subcommittees. ", "Separate orders may provide additional exceptions for specific Congresses. The H.Res. 6 separate order also stated that the Committee on Agriculture may not have more six subcommittees. The Agriculture exception, however, existed in the previous two Congresses. The Financial Services exception is new to the 116 th Congress.", "In the 115 th Congress, the Financial Services had six subcommittees, including one on Oversight and Investigations. At the start of the 116 th Congress, the committee re-established a Subcommittee on Oversight and Investigations, and it established a new Subcommittee on Diversity and Inclusion. Had it reestablished the five other subcommittees from the 115 th Congress, Financial Services would have had seven subcommittees, necessitating an exception to clause 5 of Rule X. However, the committee combined the jurisdiction of two subcommittees from the previous Congress (Monetary Policy and Trade; Terrorism and Illicit Finance) to form a National Security, International Development and Monetary Policy Subcommittee. Accordingly, as of this writing, in the 116 th Congress, Financial Services has established six subcommittees, although it is allowed seven subcommittees pursuant to the separate order."], "subsections": []}]}, {"section_title": "Select Committee on the Climate Crisis", "paragraphs": ["H.Res. 6 e stablished a Select Committee on the Climate Crisis . The select committee's \"sole authority\" is to \"investigate, study, make findings, and develop recommendations on policies, strategies, and innovations\" to reduce pollution and \"other activities that contribute to the climate crisis.\" The select committee does not have the legislative authority to report bills or resolutions or the legal authorit y to issue subpoena s or take depositions . However, it c an submit subpoena and deposition recommendations to relevant standing committees , hold public hearings in support of its investigative functions , and otherwise function under the r ules governing standing committees .", "The select committee shall be composed of 15 Members, Delegates, or the Resident Commissioner. The Speaker is to appoint the members, with six members selected at the recommendation of the minority leader. The Speaker is to designate a chair and, upon the minority leader's recommendation, a vice chair. The membership must possess certain attributes: At least two members are to be serving their first terms in Congress, at least two are to be members of the Committee on Rules, and at least two are to be members of the Committee on House Administration.", "H.Res. 6 requires the select committee to submit policy recommendations to the relevant standing committees by March 31, 2020, and report to the House its investigations, detailed findings, and policy recommendations by December 31, 2020. The policy recommendations and report are to be made publicly available in \"widely accessible formats\" not later than 30 days following the March 31 and December 31, 2020, dates of completion."], "subsections": []}, {"section_title": "Select Committee on the Modernization of Congress", "paragraphs": ["Title II of H.Res. 6 establishes a Select Committee on the Modernization of Congress to recommend improvements to the work and operation of Congress. The select committee's \"sole authority\" is to \"investigate, study, make findings, hold public hearings, and develop recommendations on modernizing Congress.\" Such recommendations could include new rules to \"promote a more modern and efficient Congress;\" new scheduling procedures; policies to \"develop the next generation of leaders;\" policies to recruit, retain, and provide for a diverse staff; policies to make congressional administration more efficient; policies on technology and innovation; and new procedures regarding the House Commission on Congressional Mailing Standards (commonly known as the \"Franking Commission\"). ", "The select committee's membership is to include two Members, Delegates, or the Resident Commissioner appointed by the Speaker. At least two members must be serving in their first term, at least two members must be members of the Committee on Rules, and at least two members must be members on the Committee of House Administration. ", "The select committee is bipartisan in composition. Half of the members are appointed on the recommendation of the minority leader. The Speaker designates the chair and, on the recommendation of the minority leader, the vice chair.", "The select committee does not have legislative jurisdiction or authority to take legislative action on bills or resolutions, and it does not have subpoena or deposition authority. However, it may submit legislative, subpoena, and deposition recommendations to the relevant standing committees. And, like standing committees, the committee was required to have a Member Day hearing at the start of 116 th Congress.", "H.Res. 6 requires the select committee to provide an interim status report every 90 days. This interim report must include transcripts of committee proceedings, itemized expenditures, and a proposed plan of activity for the next 90 days. With the \"votes of not fewer than 2/3 of its members,\" the select committee is also authorized to submit additional reports from \"time to time\" that provide the results of investigations, detailed findings, and policy recommendations. ", "The select committee is to submit its final report, with the \"votes of not fewer than 2/3 of its members,\" at the end of the first session of the 116 th Congress. This report is to include detailed findings and policy recommendations. The select committee is also to submit policy recommendations to the relevant standing committees. All committee reports are to be made available to the general public within 30 calendar days of their submittal to Congress or a committee.", "The select committee is to terminate on February 1, 2020. Upon its termination, the select committee's records are to be transferred to relevant standing committees, as determined by the Speaker."], "subsections": []}]}}
{"id": "RS20643", "title": "Navy Ford (CVN-78) Class Aircraft Carrier Program: Background and Issues for Congress", "released_date": "2019-05-17T00:00:00", "summary": ["CVN-78, CVN-79, CVN-80, and CVN-81 are the first four ships in the Navy's new Gerald R. Ford (CVN-78) class of nuclear-powered aircraft carriers (CVNs).", "CVN-78 (Gerald R. Ford) was procured in FY2008. The Navy's proposed FY2020 budget estimates the ship's procurement cost at $13,084.0 million (i.e., about $13.1 billion) in then-year dollars. The ship received advance procurement (AP) funding in FY2001-FY2007 and was fully funded in FY2008-FY2011 using congressionally authorized four-year incremental funding. To help cover cost growth on the ship, the ship received an additional $1,394.9 million in FY2014-FY2016 and FY2018 cost-to-complete procurement funding. The ship was delivered to the Navy on May 31, 2017, and was commissioned into service on July 22, 2017. The Navy is currently working to complete construction, testing, and certification of the ship's 11 weapons elevators.", "CVN-79 (John F. Kennedy) was procured in FY2013. The Navy's proposed FY2020 budget estimates the ship's procurement cost at $11,327.4 million (i.e., about $11.3 billion) in then-year dollars. The ship received AP funding in FY2007-FY2012, and was fully funded in FY2013-FY2018 using congressionally authorized six-year incremental funding. The ship is scheduled for delivery to the Navy in September 2024.", "CVN-80 (Enterprise) and CVN-81 (not yet named) are being procured under a two-ship block buy contract that was authorized by Section 121(a)(2) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (H.R. 5515/P.L. 115-232 of August 13, 2018). The provision permitted the Navy to add CVN-81 to the existing contract for building CVN-80 after the Department of Defense (DOD) made certain certifications to Congress. DOD made the certifications on December 31, 2018, and the Navy announced the award of the contract on January 31, 2019. Compared to the estimated procurement costs for CVN-80 and CVN-81 in the Navy's FY2019 budget submission, the Navy estimates under its FY2020 budget submission that the two-ship block buy contract will reduce the cost of CVN-80 by $246.6 million and the cost of CVN-81 by $2,637.3 million, for a combined reduction of $2,883.9 million (i.e., about $2.9 billion). Using higher estimated baseline costs for CVN-80 and CVN-81 taken from a December 2017 Navy business case analysis, the Navy estimates under its FY2020 budget submission that the two-ship contract will reduce the cost of CVN-80 by $770.9 million and the cost of CVN-81 by $3,086.3 million, for a combined reduction of $3,857.2 million (i.e., about $3.9 billion).", "CVN-80 was procured in FY2018. The Navy's proposed FY2020 budget estimates the ship's procurement cost at $12,335.1 million (i.e., about $12.3 billion) in then-year dollars. The ship received AP funding in FY2016 and FY2017, and the Navy plans to fully fund the ship in FY2018-FY2025 using incremental funding authorized by Section 121(c) of P.L. 115-232. The Navy's proposed FY2020 budget requests $1,062.0 million in procurement funding for the ship. The ship is scheduled for delivery to the Navy in March 2028.", "Prior to the awarding of the two-ship block buy contract, CVN-81 was scheduled to be procured in FY2023. Following the awarding of the two-ship block buy contract, the Navy has chosen to show CVN-81 in its FY2020 budget submission as a ship to be procured in FY2020 (as opposed to a ship that was procured in FY2019). The Navy's FY2020 budget submission estimates the ship's procurement cost at $12,450.7 million (i.e., about $12.5 billion) in then-year dollars. The Navy plans to fully fund the ship beginning in FY2019 and extending beyond FY2026 using incremental funding authorized by Section 121(c) of P.L. 115-232. The Navy's proposed FY2020 budget requests $1,285.0 million in procurement funding for the ship. The ship is scheduled for delivery to the Navy in February 2032.", "The Navy's FY2020 budget submission proposed to not fund the mid-life nuclear refueling overhaul (called a Refueling Complex Overhaul, or RCOH) for the aircraft carrier CVN-75 (Harry S. Truman), and to instead retire the ship around FY2024 and also deactivate one of the Navy's carrier air wings at about the same time. On April 30, 2019, however, the Administration announced that it was effectively withdrawing this proposal from the Navy's FY2020 budget submission. The Administration now supports funding the CVN-75 RCOH and keeping CVN-75 (and by implication its associated air wing) in service past FY2024.", "Oversight issues for Congress for the CVN-78 program include the following:", "DOD's decision to show CVN-81 in its FY2020 budget submission as a ship to be procured in FY2020, instead of a ship that was procured in FY2019; the Navy's decision, as part of its FY2020 budget submission, to not accelerate the scheduled procurement of CVN-82 from FY2028 to an earlier fiscal year; whether to approve, reject, or modify the Navy's FY2020 procurement funding request for the CVN-78 program; the date for achieving the Navy's 12-ship force-level goal for aircraft carriers; cost growth in the CVN-78 program, Navy efforts to stem that growth, and Navy efforts to manage costs so as to stay within the program's cost caps; Navy efforts to complete the construction, testing, and certification of the weapons elevators on CVN-78; additional CVN-78 program issues that were raised in a December 2018 report from the Department of Defense's (DOD's) Director of Operational Test and Evaluation (DOT&E); additional CVN-78 program issues that were raised in a May 2019 Government Accountability Office (GAO) report on DOD weapon systems; whether the Navy should shift at some point from procuring large-deck, nuclear-powered carriers like the CVN-78 class to procuring smaller aircraft carriers."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides background information and potential oversight issues for Congress on the Gerald R. Ford (CVN-78) class aircraft carrier program. The Navy's proposed FY2019 budget requests a total of $2,347 million (i.e., about $2.3 billion) in procurement funding for the CVN-78 program. Congress's decisions on the CVN-78 program could substantially affect Navy capabilities and funding requirements and the shipbuilding industrial base.", "The Navy's FY2020 budget submission also proposed to not fund the mid-life nuclear refueling overhaul (called a Refueling Complex Overhaul, or RCOH) for the aircraft carrier CVN-75 ( Harry S. Truman ), and to instead retire the ship around FY2024 and also deactivate one of the Navy's carrier air wings at about the same time. On April 30, 2019, however, the Administration announced that it was effectively withdrawing this proposal from the Navy's FY2020 budget submission. The Administration now supports funding the CVN-75 RCOH and keeping CVN-75 (and by implication its associated air wing) in service past FY2024. For additional discussion of this withdrawn budget proposal, see Appendix A .", "For an overview of the strategic and budgetary context in which the CVN-78 class program and other Navy shipbuilding programs may be considered, see CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress , by Ronald O'Rourke."], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "Current Navy Aircraft Carrier Force", "paragraphs": ["The Navy's current aircraft carrier force consists of 11 nuclear-powered ships, including 10 Nimitz-class ships (CVNs 68 through 77) that entered service between 1975 and 2009, and one Gerald R. Ford (CVN-78) class ship that was commissioned into service on July 22, 2017. "], "subsections": []}, {"section_title": "Statutory Requirements for Numbers of Carriers and Carrier Air Wings", "paragraphs": [], "subsections": [{"section_title": "Requirement to Maintain Not Less Than 11 Carriers", "paragraphs": ["10 U.S.C. 8062(b) requires the Navy to maintain a force of not less than 11 operational aircraft carriers. The requirement for the Navy to maintain not less than a certain number of operational aircraft carriers was established by Section 126 of the FY2006 National Defense Authorization Act ( H.R. 1815 / P.L. 109-163 of January 6, 2006), which set the number at 12 carriers. The requirement was changed from 12 carriers to 11 carriers by Section 1011(a) of the FY2007 John Warner National Defense Authorization Act ( H.R. 5122 / P.L. 109-364 of October 17, 2006)."], "subsections": []}, {"section_title": "Requirement to Maintain a Minimum of Nine Carrier Air Wings", "paragraphs": ["10 U.S.C. 8062(e), which was added by Section 1042 of the FY2017 National Defense Authorization Act ( S. 2943 / P.L. 114-328 of December 23, 2016), requires the Navy to maintain a minimum of nine carrier air wings."], "subsections": []}]}, {"section_title": "Navy Force-Level Goal of 12 Carriers", "paragraphs": [], "subsections": [{"section_title": "12-Carrier Goal Established December 2016", "paragraphs": ["In December 2016, the Navy released a force-level goal for achieving and maintaining a fleet of 355 ships, including 12 aircraft carriers \u2014one more than the minimum of 11 carriers required by 10 U.S.C. 8062(b). This was the first Navy force-level goal to call for 12 (rather than 11) carriers since a 2002-2004 Navy force-level goal for a fleet of 375 ships."], "subsections": []}, {"section_title": "Planned and Potential Dates for Achieving 12-Carrier Force", "paragraphs": ["Given the time needed to build a carrier and the projected retirement dates of existing carriers, increasing the carrier force from 11 ships to 12 ships on a sustained basis would take a number of years:", "Procuring carriers on 3-year centers\u2014that is, procuring one carrier every three years\u2014would achieve a 12-carrier force on a sustained basis by about 2030, unless the service lives of one or more existing carriers were substantially extended. Procuring carriers on 3.5-year centers (i.e., a combination of 3- and 4-year centers) would achieve a 12-carrier force on a sustained basis no earlier than about 2034, unless the service lives of one or more existing carriers were substantially extended. Procuring carriers on 4-year centers would achieve a 12-carrier force on a sustained basis by about 2063\u2014almost 30 years later than under 3.5-year centers\u2014unless the service lives of one or more existing carriers were substantially extended.", "Under the Navy's FY2020 30-year shipbuilding plan, as under the Navy's FY2019 30-year shipbuilding plan, carrier procurement would shift from 5-year centers to 4-year centers after the procurement of CVN-82 in FY2028, and a 12-carrier force would be achieved on a sustained basis in the 2060s.", "The projected size of the carrier force in the Navy's FY2020 30-year (FY2020-FY2049) shipbuilding plan reflected the Navy's now-withdrawn FY2020 budget proposal to not fund the RCOH for the aircraft carrier CVN-75 ( Harry S. Truman ), and to instead retire the ship around FY2024. With the withdrawal of this budget proposal, the projected size of the carrier force is now, for the period FY2022-FY2047, one ship higher than what is shown in the Navy's FY2020 budget submission.", "The newly adjusted force-level projection, reflecting the withdrawal of the proposal to retire CVN-75 around FY2024, is as follows: The force is projected to include 11 ships in FY2020-FY2021, 12 ships in FY2022-FY2024, 11 ships in FY2025-FY2026, 10 ships in FY2027, 11 ships in FY2028-FY2039, 10 ships in FY2040, 11 ships in FY2041, 10 ships in FY2042-FY2044, 11 ships in FY2045, 10 ships in FY2046-FY2047, 9 ships in FY2048, and 10 ships in FY2049."], "subsections": []}]}, {"section_title": "Incremental Funding Authority for Aircraft Carriers", "paragraphs": ["Under incremental funding, some of the funding needed to fully fund a ship is provided in one or more years after the year in which the ship is procured. In recent years, Congress has authorized DOD to use incremental funding for procuring certain Navy ships, most notably aircraft carriers:", "Section 121 of the FY2007 John Warner National Defense Authorization Act ( H.R. 5122 / P.L. 109-364 of October 17, 2006) granted the Navy the authority to use four-year incremental funding for CVNs 78, 79, and 80. Under this authority, the Navy could fully fund each of these ships over a four-year period that includes the ship's year of procurement and three subsequent years. Section 124 of the FY2012 National Defense Authorization Act ( H.R. 1540 / P.L. 112-81 of December 31, 2011) amended Section 121 of P.L. 109-364 to grant the Navy the authority to use five-year incremental funding for CVNs 78, 79, and 80. Since CVN-78 was fully funded in FY2008-FY2011, the provision in practice applied to CVNs 79 and 80. Section 121 of the FY2013 National Defense Authorization Act ( H.R. 4310 / P.L. 112-239 of January 2, 2013) amended Section 121 of P.L. 109-364 to grant the Navy the authority to use six-year incremental funding for CVNs 78, 79, and 80. Since CVN-78 was fully funded in FY2008-FY2011, the provision in practice applies to CVNs 79 and 80. Section 121(c) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 ( H.R. 5515 / P.L. 115-232 of August 13, 2018) authorized incremental funding to be used for making payments under the two-ship block buy contract for the construction of CVN-80 and CVN-81. This provision does not limit the total number of years across which incremental funding may be used to procure either ship."], "subsections": []}, {"section_title": "Aircraft Carrier Construction Industrial Base", "paragraphs": ["All U.S. aircraft carriers procured since FY1958 have been built by Huntington Ingalls Industries/Newport News Shipbuilding (HII/NNS), of Newport News, VA. HII/NNS is the only U.S. shipyard that can build large-deck, nuclear-powered aircraft carriers. The aircraft carrier construction industrial base also includes roughly 2,000 supplier firms in 46 states."], "subsections": []}, {"section_title": "Gerald R. Ford (CVN-78) Class Program", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The Gerald R. Ford (CVN-78) class carrier design ( Figure 1 ) is the successor to the Nimitz -class carrier design. The Ford -class design uses the basic Nimitz -class hull form but incorporates several improvements, including features permitting the ship to generate more aircraft sorties per day, more electrical power for supporting ship systems, and features permitting the ship to be operated by several hundred fewer sailors than a Nimitz -class ship, reducing 50-year life-cycle operating and support (O&S) costs for each ship by about $4 billion compared to the Nimitz -class design, the Navy estimates. Navy plans call for procuring at least four Ford-class carriers\u2014CVN-78, CVN-79, CVN-80, and CVN-81."], "subsections": []}, {"section_title": "CVN-78 (Gerald R. Ford)", "paragraphs": ["CVN-78, which was named Gerald R. Ford in 2007, was procured in FY2008. The Navy's proposed FY2020 budget estimates the ship's procurement cost at $13,084.0 million (i.e., about $13.1 billion) in then-year dollars. The ship received advance procurement (AP) funding in FY2001-FY2007 and was fully funded in FY2008-FY2011 using congressionally authorized four-year incremental funding. To help cover cost growth on the ship, the ship received an additional $1,394.9 million in FY2014-FY2016 and FY2018 cost-to-complete procurement funding. (This $1,394.9 million is included in the above-mentioned estimated procurement cost of $13,084.0 million.) The ship was delivered to the Navy on May 31, 2017, and was commissioned into service on July 22, 2017. The Navy is currently working to complete construction, testing, and certification of the ship's 11 weapons elevators."], "subsections": []}, {"section_title": "CVN-79 (John F. Kennedy)", "paragraphs": ["CVN-79, which was named John F. Kennedy on May 29, 2011, was procured in FY2013. The Navy's proposed FY2020 budget estimates the ship's procurement cost at $11,327.4 million (i.e., about $11.3 billion) in then-year dollars. The ship received AP funding in FY2007-FY2012, and was fully funded in FY2013-FY2018 using congressionally authorized six-year incremental funding. The ship is being built with an improved shipyard fabrication and assembly process that incorporates lessons learned from the construction of CVN-78. A key aim of this improved process is to substantially reduce the real (i.e., inflation-adjusted) construction cost of CVN-79 compared to that of CVN-78. CVN-79 is scheduled for delivery to the Navy in September 2024."], "subsections": []}, {"section_title": "Two-Ship Block Buy Contract for CVN-80 and CVN-81", "paragraphs": ["CVN-80 ( Enterprise ) and CVN-81 (not yet named) are being procured under a two-ship block buy contract that was authorized by Section 121(a)(2) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 ( H.R. 5515 / P.L. 115-232 of August 13, 2018). The provision permitted the Navy to add CVN-81 to the existing contract for building CVN-80 after the Department of Defense (DOD) made certain certifications to Congress. DOD made the certifications on December 31, 2018, and the Navy announced the award of the contract on January 31, 2019.", "Compared to the estimated procurement costs for CVN-80 and CVN-81 in the Navy's FY2019 budget submission, the Navy estimates under its FY2020 budget submission that the two-ship block buy contract will reduce the cost of CVN-80 by $246.6 million and the cost of CVN-81 by $2,637.3 million, for a combined reduction of $2,883.9 million (i.e., about $2.9 billion). (DOD characterizes the combined reduction as \"nearly $3 billion.\" ) Using higher estimated baseline costs for CVN-80 and CVN-81 taken from a December 2017 Navy business case analysis, the Navy estimates under its FY2020 budget submission that the two-ship contract will reduce the cost of CVN-80 by $770.9 million and the cost of CVN-81 by $3,086.3 million, for a combined reduction of $3,857.2 million (i.e., about $3.9 billion). (DOD characterizes the combined reduction as $4 billion.) These figures are all expressed in then-year dollars, meaning dollars that are not adjusted for inflation.", "Regarding the difference between a savings of about $2.9 billion from the figures in the Navy's FY2019 budget submission and a savings of about $3.9 billion from the December 2017 Navy business case analysis, a February 5, 2019, press report quoted a Navy spokesman as stating that the Navy's FY2019 budget submission \"already accounted for at least $1B [$1 billion] of potential savings, a two-CVN buy would save an additional $3B [$3 billion].\" This suggests that the Navy, in preparing its FY2019 budget submission, may have anticipated that it would receive from Congress authority for implementing some kind of combined purchase (such as, perhaps, a combined purchase of materials) for CVN-80 and CVN-81.", "For additional background information on the two-ship block buy contract, see Appendix B ."], "subsections": []}, {"section_title": "CVN-80 (Enterprise)", "paragraphs": ["CVN-80, which was named Enterprise on December 1, 2012, was procured in FY2018. The Navy's proposed FY2020 budget estimates the ship's procurement cost at $12,335.1 million (i.e., about $12.3 billion) in then-year dollars. The ship received AP funding in FY2016 and FY2017, and the Navy plans to fully fund the ship in FY2018-FY2025 using incremental funding authorized by Section 121(c) of P.L. 115-232 . The Navy's proposed FY2020 budget requests $1,062.0 million in procurement funding for the ship. The ship is scheduled for delivery to the Navy in March 2028."], "subsections": []}, {"section_title": "CVN-81 (Not Yet Named)", "paragraphs": ["Prior to the awarding of the two-ship block buy contract, CVN-81, which has not yet been named, was scheduled to be procured in FY2023. Following the awarding of the two-ship block buy contract, the Navy has chosen to show CVN-81 in its FY2020 budget submission as a ship to be procured in FY2020 (as opposed to a ship that was procured in FY2019). The Navy's FY2020 budget submission estimates the ship's procurement cost at $12,450.7 million (i.e., about $12.5 billion) in then-year dollars. The Navy plans to fully fund the ship beginning in FY2019 and extending beyond FY2026 using incremental funding authorized by Section 121(c) of P.L. 115-232 . The Navy's proposed FY2020 budget requests $1,285.0 million in procurement funding for the ship. The ship is scheduled for delivery to the Navy in February 2032."], "subsections": []}, {"section_title": "Program Procurement Funding", "paragraphs": [" Table 1 shows procurement funding for CVNs 78, 79, 80, and 81 through FY2026+ (meaning FY2026 and some number of years after FY2026)."], "subsections": []}, {"section_title": "Program Procurement Cost Cap", "paragraphs": ["Congress has established procurement cost caps for CVN-78 class aircraft carriers:", "Section 122 of the FY2007 John Warner National Defense Authorization Act ( H.R. 5122 / P.L. 109-364 of October 17, 2006) established a procurement cost cap for CVN-78 of $10.5 billion, plus adjustments for inflation and other factors, and a procurement cost cap for subsequent Ford-class carriers of $8.1 billion each, plus adjustments for inflation and other factors. The conference report ( H.Rept. 109-702 of September 29, 2006) on P.L. 109-364 discusses Section 122 on pages 551-552. Section 121 of the FY2014 National Defense Authorization Act ( H.R. 3304 / P.L. 113-66 of December 26, 2013) amended the procurement cost cap for the CVN-78 program to provide a revised cap of $12,887.0 million for CVN-78 and a revised cap of $11,498.0 million for each follow-on ship in the program, plus adjustments for inflation and other factors (including an additional factor not included in original cost cap). Section 122 of the FY2016 National Defense Authorization Act ( S. 1356 / P.L. 114-92 of November 25, 2015) further amended the cost cap for the CVN-78 program to provide a revised cap of $11,398.0 million for each follow-on ship in the program, plus adjustment for inflation and other factors, and with a new provision stating that, if during construction of CVN-79, the Chief of Naval Operations determines that measures required to complete the ship within the revised cost cap shall result in an unacceptable reduction to the ship's operational capability, the Secretary of the Navy may increase the CVN-79 cost cap by up to $100 million (i.e., to $11.498 billion). If such an action is taken, the Navy is to adhere to the notification requirements specified in the cost cap legislation. Section 121(a) of the FY2018 National Defense Authorization Act ( H.R. 2810 / P.L. 115-91 of December 12, 2017) further amended the cost cap for the CVN-78 program to provide a revised cap of $12,568.0 million for CVN-80 and subsequent ships in the program, plus adjustment for inflation and other factors. (The cap for CVN-79 was kept at $11,398.0 million, plus adjustment for inflation and other factors.) The provision also amended the basis for adjusting the caps for inflation, and excluded certain costs from being counted against the caps.", "In an August 2, 2017, letter to the congressional defense committees, then-Acting Secretary of the Navy Sean Stackley notified the committees that under subsection (b)(7) of Section 122 of P.L. 114-92 as amended by Section 121 of P.L. 113-66 \u2014a subsection allowing increases to the cost cap for CVN-78 for \"the amounts of increases or decreases in costs of that ship that are attributable solely to an urgent and unforeseen requirement identified as a result of the shipboard test program\"\u2014he had increased the cost cap for CVN-78 by $20 million, to $12,907.0 million.", "In a May 8, 2018, letter to the congressional defense committees, Secretary of the Navy Richard Spencer notified the committees that under subsections (b)(6) and (b)(7) of Section 122 of P.L. 114-92 as amended by Section 121 of P.L. 113-66 \u2014subsections allowing increases to the cost cap for CVN-78 for \"the amounts of increases or decreases to cost required to correct deficiencies that may affect the safety of the ship and personnel or otherwise preclude the ship from safe operation and crew certification\" and for \"the amounts of increases or decreases in costs of CVN 78 that are attributable solely to an urgent and unforeseen requirement identified as a result of the shipboard test program,\" respectively\u2014he had increased the cost cap for CVN-78 by $120 million, to $13,027 million."], "subsections": []}, {"section_title": "Changes in Estimated Unit Procurement Costs Since FY2008 Budget", "paragraphs": [" Table 2 shows changes in the estimated procurement costs of CVNs 78, 79, 80, and 81 since the budget submission for FY2008\u2014the year of procurement for CVN-78."], "subsections": []}]}, {"section_title": "Withdrawn Proposal to Not Fund CVN-75 RCOH", "paragraphs": ["The Navy's FY2020 budget submission proposed to not fund the mid-life nuclear refueling overhaul (called a Refueling Complex Overhaul, or RCOH) for the aircraft carrier CVN-75 ( Harry S. Truman ), and to instead retire the ship around FY2024 and also deactivate one of the Navy's carrier air wings at about the same time. On April 30, 2019, however, the Administration announced that it was effectively withdrawing this proposal from the Navy's FY2020 budget submission. The Administration now supports funding the CVN-75 RCOH and keeping CVN-75 (and by implication its associated air wing) in service past FY2024. For additional discussion of this withdrawn budget proposal, see Appendix A ."], "subsections": []}]}, {"section_title": "Issues for Congress for FY2020", "paragraphs": [], "subsections": [{"section_title": "Navy Decision to Show CVN-81 as a Ship to Be Procured in FY2020", "paragraphs": ["One issue for Congress concerns DOD's decision to show CVN-81 in its FY2020 budget submission as a ship to be procured in FY2020, instead of a ship that was procured in FY2019. Grounds for showing CVN-81 as a ship that was procured in FY2019 would include the following:", "Within Section 121 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 ( H.R. 5515 / P.L. 115-232 of August 13, 2018)\u2014the provision that authorized the two-ship block buy contract for CVN-80 and CVN-81\u2014subsection (a)(1) specifically authorizes a contract for the procurement of CVN-81 \"beginning with the fiscal year 2019 program year.\" The header for subsection (a)(1) is \"Procurement Authorized.\" Consistent with Section 121(a)(1), the funding table for the Navy's shipbuilding account in the conference report ( H.Rept. 115-874 of July 25, 2018) on H.R. 5515 shows a quantity of \"1\" in line 002 of the FY2019 SCN (Shipbuilding and Conversion, Navy) appropriation account. Line 002 is the line item for procurement (not advance procurement [AP]) funding for the CVN-78 program. A notation in the table for line 002 states that the procurement funding authorized for this line item is for \"Authorize CVN81\u2014One ship.\" The funding table does not authorize any funding for line 003 of the FY2019 SCN account\u2014the line item for AP funding for the CVN-78 program. (AP funding is funding for the procurement of a ship to be procured in a future fiscal year.) Consistent with the two above points, the paragraph in the FY2019 DOD appropriations act (Division A of H.R. 6157 / P.L. 115-245 of September 28, 2018) that makes appropriations for the SCN account makes procurement (not AP) appropriations for the CVN-78 program. This paragraph also states that \"the funds made available by this Act for the Carrier Replacement Program (CVN-80) may be available to modify or enter into a new contract for the procurement of a Ford-class aircraft carrier designated CVN\u201381 pursuant to section 121 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019.\" Consistent with this bill language, the funding table for the SCN account in the joint explanatory statement for H.R. 6157 shows that this funding was provided for line 2 of the FY2019 SCN account (CVN-78 program procurement funding), not line 3 of the FY2019 SCN account (CVN-78 program AP funding). Consistent with all of the above points (and as reflected in Table 1 of this CRS report), the Navy's FY2020 budget submission shows the $618 million in FY2019 funding for CVN-81 as full funding (meaning funding for a procured ship), rather than AP funding (meaning funding for a ship to be procured in a future fiscal year).", "DOD's decision to show CVN-81 in its FY2020 budget submission as a ship to be procured in FY2020, instead of a ship that was procured in FY2019, affects the comparison of numbers of ships procured in FY2019 and FY2020. If DOD had decided to show CVN-81 in its FY2020 budget submission as a ship that was procured in FY2019, then the total number of ships procured in FY2019 would be 14, and the total number requested for FY2020 would be 11\u20143 ships, or 21%, fewer than the FY2019 total of 14. Showing CVN-81 in the FY2020 budget submission as an FY2020 ship changes the FY2019 and FY2020 totals to 13 ships and 12 ships, respectively, making number FY2020 closer to the FY2019 number.", "DOD's decision to show CVN-81 in its FY2020 budget submission as a ship to be procured in FY2020, instead of a ship that was procured in FY2019, also affects the aircraft carrier procurement profile shown in the Navy's FY2020 30-year (FY2020-FY2049) 30-year shipbuilding plan. If DOD had decided to show CVN-81 in its FY2020 budget submission as a ship that was procured in FY2019, the ship-procurement table in the 30-year plan would show the procurement of no carriers for the first eight years (FY2020-FY2027) of the 30-year period. Showing CVN-81 in the FY2020 budget submission as an FY2020 ship changes the presentation to show the procurement of an aircraft carrier in the first year of the 30-year period.", "Potential oversight questions for Congress include the following:", "Compliance with c ongressional intent . Is DOD's decision to show CVN-81 as a ship to be procured in FY2020, rather than as a ship that was procured in FY2019, consistent with congressional intent as shown in bill and report language for P.L. 115-232 and P.L. 115-245 ? Can DOD's decision be viewed as a challenge to Congress's Article 1 power to authorize and appropriate funds for the construction of Navy ships? If DOD's decision regarding the year of procurement for CVN-81 is accepted, would this set a precedent for the executive branch regarding its future compliance with Congressional decisions for authorizing and funding of other federal programs? Executability of FY2019 procurement funds for CVN-81. FY2019 SCN-account funding for the CVN-78 program was appropriated by Congress, and shows in the Navy's FY2020 budget-justification books, as procurement funding (meaning funding for one or more procured ships) rather than AP funding (meaning funding for one or more ships to be procured in a future fiscal year). If CVN-81 is accepted as a ship to be procured in FY2020, what implications, if any, might that have for the executability of the $618 million in FY2019 procurement (as opposed to AP) funds for CVN-81 shown in the Navy's FY2020 budget submission (as reflected in Table 1 of this CRS report)? Executability of CVN-81 during portion of FY2020 under a CR. Navy officials have testified that if the Navy operates under a continuing resolution (CR) for some part of FY2020, then absent a special legislative provision in the CR known as an anomaly, the Navy during that period likely would not be able to proceed with CVN-81, because CRs typically prevent year-to-year quantity increases in procurement programs, and treating CVN-81 as a ship to be procured in FY2020 would mean that the CVN-78 program would have a year-to-year quantity increase of zero ships in FY2019 followed by one ship in FY2020. If work on CVN-81 were to not proceed for some part of FY2020 because the Navy during that period were to operate under a CR, what impact would that have on the implementation and status of the two-ship contract for building CVN-80 and CVN-81? FY2019 and FY2020 numbers of ships procured and 30-year shipbuilding plan. What effect, if any, did considerations regarding the comparison of numbers of ships procured in FY2019 and FY2020 and the aircraft carrier procurement profile during the initial years of the 30-year shipbuilding plan have on DOD's decision to show CVN-81 in its FY2020 budget submission as a ship to be procured in FY2020, instead of a ship that was procured in FY2019? Treatment in FY2020 legislation. Since P.L. 115-232 shows CVN-81 as authorized in FY2019, how should the House and Senate Armed Services committees act on the request in the Navy's FY2020 budget submission to authorize an aircraft carrier in FY2020? If the FY2020 national defense authorization act authorizes the procurement of an aircraft carrier in FY2020, and the authorization for the procurement of an aircraft carrier in FY2019 were not rescinded, would that create confusion as to whether the ship being authorized in FY2020 was CVN-81 or CVN-82, the latter being a ship currently planned for procurement in FY2028? If the FY2019 authorization for CVN-81 were rescinded, what implications, if any, would that have for the implementation of Section 121 of P.L. 115-232 , including the award of the two-carrier contract on January 31, 2019 (i.e., during FY2019)?"], "subsections": []}, {"section_title": "CVN-82 Not Accelerated from FY2028 to an Earlier Year", "paragraphs": ["Another issue for Congress concerns the Navy's decision, as part of its FY2020 budget submission, to not accelerate the scheduled procurement of CVN-82 from FY2028 to an earlier fiscal year. The Navy's FY2020 budget submission shows that, as a result of the two-carrier contract, the scheduled delivery date for CVN-81 has been accelerated by seven months, to February 2032, compared to September 2032 in the Navy's FY2019 budget submission. The scheduled year of procurement for CVN-82 has not been changed\u2014in the Navy's FY2020 budget submission, it shows as a ship to be procured in FY2028, as it did in the Navy's FY2019 budget submission. The accelerated delivery date for CVN-81, combined with the unchanged year of procurement for CVN-82, suggests that the interval between the construction of CVN-81 and construction of CVN-82 has been increased by something like seven months.", "Other things held equal, this increased interval could result in increased loss of learning in shifting from construction of CVN-81 to construction of CVN-82, and possibly in reduced spreading of shipyard fixed overhead costs during the construction of CVN-82. Both of these effects could increase the procurement cost of CVN-82. Potential oversight questions for Congress include the following:", "What impact, if any, will the accelerated delivery of CVN-81 under the two-carrier contract, combined with the unchanged year of procurement for CVN-82, have on the procurement cost of CVN-82? How might the procurement cost of CVN-82 change in real (i.e., inflation-adjusted) terms if its year of procurement were accelerated to an earlier year, such as FY2027?"], "subsections": []}, {"section_title": "FY2020 Funding Request", "paragraphs": ["Another issue for Congress is whether to approve, reject, or modify the Navy's FY2020 procurement funding requests for CVN-78 program. In assessing this question, Congress could consider various factors, including whether the Navy has properly scheduled and accurately priced the work it is proposing to do on the CVN-78 program in FY2020, particularly in the context of implementing the two-carrier contract for CVN-80 and CVN-81."], "subsections": []}, {"section_title": "Date for Achieving a 12-Carrier Force", "paragraphs": ["Another issue for Congress concerns the date for achieving the Navy's 12-ship force-level goal for aircraft carriers. As noted earlier, under the Navy's FY2020 30-year shipbuilding plan, carrier procurement would shift from 5-year centers to 4-year centers after the procurement of CVN-82 in FY2028, and a 12-carrier force would be achieved on a sustained basis in the 2060s. As also noted earlier, shifting carrier procurement to 3- or 3.5-year centers could achieve a 12-carrier fleet as soon as the 2030s, unless the service lives of one or more existing carriers were substantially extended. Other things held equal, procuring carriers on 3- or 3.5-year centers rather than 4-year centers would increase Navy funding requirements during the period of the 30-year shipbuilding plan for procuring aircraft carriers and for operating and supporting a 12-carrier force rather than a force of 11 or fewer carriers."], "subsections": []}, {"section_title": "Cost Growth and Managing Costs within Program Cost Caps", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["For the past several years, cost growth in the CVN-78 program, Navy efforts to stem that growth, and Navy efforts to manage costs so as to stay within the program's cost caps have been continuing oversight issues for Congress on the CVN-78 program. As shown in Table 2 , the estimated procurement costs of CVN-78, CVN-79, and CVN-80 have grown 24.7%, 23.2%, and 15.1%, respectively, since the submission of the FY2008 budget. Cost growth on CVN-78 required the Navy to program $1,394.9 million in cost-to-complete procurement funding for the ship in FY2014-FY2016 and FY2018 (see Table 1 ). As also shown in Table 2 , however, cost growth on CVN-78, CVN-79, and CVN-80 more or less stopped in FY2013 and FY2014:", "while the estimated cost of CVN-78 grew considerably between the FY2008 budget (the budget in which CVN-78 was procured) and the FY2014 budget, since the FY2014 budget, it has grown by only a small amount (about 2%); while the estimated cost of CVN-79 grew considerably between the FY2008 budget and the FY2013 budget (in part because the procurement date for the ship was deferred by one year in the FY2010 budget), since the FY2013 budget it has declined by a small amount (less than 1%); and while the estimated cost of CVN-80 grew considerably between the FY2008 budget and the FY2013 budget (in part because the procurement date for the ship was deferred by two years in the FY2010 budget), since the FY2013 budget it has declined by about 11%."], "subsections": []}, {"section_title": "Recent Related Legislative Provisions", "paragraphs": ["Section 128 of the FY2016 National Defense Authorization Act ( S. 1356 / P.L. 114-92 of November 25, 2015) states the following:", "SEC. 128. Limitation on availability of funds for U.S.S. John F. Kennedy (CVN\u201379).", "(a) Limitation.\u2014Of the funds authorized to be appropriated by this Act or otherwise made available for fiscal year 2016 for procurement for the U.S.S. John F. Kennedy (CVN\u201379), $100,000,000 may not be obligated or expended until the date on which the Secretary of the Navy submits to the congressional defense committees the certification under subsection (b)(1) or the notification under paragraph (2) of such subsection, as the case may be, and the reports under subsections (c) and (d)....", "(c) Report on costs relating to CVN\u201379 and CVN\u201380.\u2014", "(1) IN GENERAL.\u2014Not later than 90 days after the date of the enactment of this Act, the Secretary of the Navy shall submit to the congressional defense committees a report that evaluates cost issues related to the U.S.S. John F. Kennedy (CVN\u201379) and the U.S.S. Enterprise (CVN\u201380).", "(2) ELEMENTS.\u2014The report under paragraph (1) shall include the following:", "(A) Options to achieve ship end cost of no more than $10,000,000,000.", "(B) Options to freeze the design of CVN\u201379 for CVN\u201380, with exceptions only for changes due to full ship shock trials or other significant test and evaluation results.", "(C) Options to reduce the plans cost for CVN\u201380 to less than 50 percent of the CVN\u201379 plans cost.", "(D) Options to transition all non-nuclear Government-furnished equipment, including launch and arresting equipment, to contractor-furnished equipment.", "(E) Options to build the ships at the most economic pace, such as four years between ships.", "(F) A business case analysis for the Enterprise Air Search Radar modification to CVN\u201379 and CVN\u201380.", "(G) A business case analysis for the two-phase CVN\u201379 delivery proposal and impact on fleet deployments.", "Section 126 of the FY2017 National Defense Authorization Act ( S. 2943 / P.L. 114-328 of December 23, 2016) states the following:", "SEC. 126. Limitation on availability of funds for procurement of U.S.S. Enterprise (CVN\u201380).", "(a) Limitation.\u2014Of the funds authorized to be appropriated by this Act or otherwise made available for fiscal year 2017 for advance procurement or procurement for the U.S.S. Enterprise (CVN\u201380), not more than 25 percent may be obligated or expended until the date on which the Secretary of the Navy and the Chief of Naval Operations jointly submit to the congressional defense committees the report under subsection (b).", "(b) Initial report on CVN\u201379 and CVN\u201380.\u2014Not later than December 1, 2016, the Secretary of the Navy and the Chief of Naval Operations shall jointly submit to the congressional defense committees a report that includes a description of actions that may be carried out (including de-scoping requirements, if necessary) to achieve a ship end cost of\u2014", "(1) not more than $12,000,000,000 for the CVN\u201380; and", "(2) not more than $11,000,000,000 for the U.S.S. John F. Kennedy (CVN\u201379).", "(c) Annual report on CVN\u201379 and CVN\u201380.\u2014", "(1) IN GENERAL.\u2014Together with the budget of the President for each fiscal year through fiscal year 2021 (as submitted to Congress under section 1105(a) of title 31, United States Code) the Secretary of the Navy and the Chief of Naval Operations shall submit a report on the efforts of the Navy to achieve the ship end costs described in subsection (b) for the CVN\u201379 and CVN\u201380.", "(2) ELEMENTS.\u2014The report under paragraph (1) shall include, with respect to the procurement of the CVN\u201379 and the CVN\u201380, the following:", "(A) A description of the progress made toward achieving the ship end costs described in subsection (b), including realized cost savings.", "(B) A description of low value-added or unnecessary elements of program cost that have been reduced or eliminated.", "(C) Cost savings estimates for current and planned initiatives.", "(D) A schedule that includes\u2014", "(i) a plan for spending with phasing of key obligations and outlays;", "(ii) decision points describing when savings may be realized; and", "(iii) key events that must occur to execute initiatives and achieve savings.", "(E) Instances of lower Government estimates used in contract negotiations.", "(F) A description of risks that may result from achieving the procurement end costs specified in subsection (b).", "(G) A description of incentives or rewards provided or planned to be provided to prime contractors for meeting the procurement end costs specified in subsection (b).", "Section 121(b) of the FY2018 National Defense Authorization Act ( H.R. 2810 / P.L. 115-91 of December 12, 2017) states the following:", "SEC. 121. Aircraft carriers.", "...", "(b) Waiver on limitation of availability of funds for CVN\u201379.\u2014The Secretary of Defense may waive subsections (a) and (b) of section 128 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114\u201392; 129 Stat. 751) after a period of 60 days has elapsed following the date on which the Secretary submits to the congressional defense committees a written notification of the intent of the Secretary to issue such a waiver. The Secretary shall include in any such notification the following:", "(1) The rationale of the Secretary for issuing the waiver.", "(2) The revised test and evaluation master plan that describes when full ship shock trials will be held on Ford-class aircraft carriers.", "(3) A certification that the Secretary has analyzed and accepted the operational risk of the U.S.S. Gerald R. Ford deploying without having conducted full ship shock trials, and that the Secretary has not delegated the decision to issue such waiver."], "subsections": []}, {"section_title": "Sources of Risk of Cost Growth and Navy Actions to Control Cost", "paragraphs": ["Sources of risk of cost growth on CVN-78 included, among other things, certain new systems to be installed on CVN-78 whose development, if delayed, could delay the completion of the ship. These systems included a new type of aircraft catapult called the Electromagnetic Launch System (EMALS), a new aircraft arresting system called the Advanced Arresting Gear (AAG), and the ship's primary radar, called the Dual Band Radar (DBR). Congress has followed these and other sources of risk of cost growth for years.", "In July 2016, the DOD Inspector General issued a report critical of the Navy's management of the AAG development effort. In January 2017, it was reported that after conducting a review of potential alternative systems, the Navy had decided to continue stay with its plan to install EMALs and AAG on the first three Ford-class carriers. Section 125 of the FY2017 National Defense Authorization Act ( S. 2943 / P.L. 114-328 of December 23, 2016) limited the availability of funds for the AAG program until certain conditions are met.", "Navy officials have stated that they are working to control the cost of CVN-79 by equipping the ship with a less expensive primary radar, by turning down opportunities to add features to the ship that would have made the ship more capable than CVN-78 but would also have increased CVN-79's cost, and by using a build strategy for the ship that incorporates improvements over the build strategy that was used for CVN-78. These build-strategy improvements, Navy officials have said, include the following items, among others:", "achieving a higher percentage of outfitting of ship modules before modules are stacked together to form the ship; achieving \"learning inside the ship,\" which means producing similar-looking ship modules in an assembly line-like series, so as to achieve improved production learning curve benefits in the production of these modules; and more economical ordering of parts and materials including greater use of batch ordering of parts and materials, as opposed to ordering parts and materials on an individual basis as each is needed.", "For additional background information on cost growth in the CVN-78 program, Navy efforts to stem that growth, and Navy efforts to manage costs so as to stay within the program's cost caps, see Appendix C and Appendix D ."], "subsections": []}]}, {"section_title": "CVN-78 Weapons Elevators", "paragraphs": ["Another oversight issue for Congress concerns Navy efforts to complete the construction, testing, and certification of the weapons elevators on CVN-78. (The ship's weapons elevators transport missiles and bombs from the ship's weapon magazines to the ship's flight deck, so that they can be loaded onto aircraft that are getting ready to take off from the ship.) A November 2, 2018, press report states the following:", "The $13 billion Gerald R. Ford aircraft carrier, the U.S. Navy's costliest warship, was delivered last year without elevators needed to lift bombs from below deck magazines for loading on fighter jets.", "Previously undisclosed problems with the 11 elevators for the ship built by Huntington Ingalls Industries Inc. add to long-standing reliability and technical problems with two other core systems\u2014the electromagnetic system to launch planes and the arresting gear to catch them when they land.", "The Advanced Weapons Elevators, which are moved by magnets rather than cables, were supposed to be installed by the vessel's original delivery date in May 2017. Instead, final installation was delayed by problems including four instances of unsafe \"uncommanded movements\" since 2015, according to the Navy.", "While progress was being made on the carrier's other flawed systems, the elevator is \"our Achilles heel,\" Navy Secretary Richard Spencer told reporters in August without providing details....", "The Navy says that the first carrier will be fully combat-capable, including the elevators, by July\u2014the end of its current 12-month pier-side shakedown period in Virginia.", "Navy weapons buyer James Geurts cited what he called \"considerable progress\" on the Ford, including on the elevators, in a July 6 memo to Pentagon acquisition head Ellen Lord.", "The Navy in May requested permission from Congress in May to increase the Ford's cost cap by $120 million, partly to fix elevator issues \"to preclude any effect on the safety of the ship and personnel.\" The safety issues related to the uncommanded movements, the Navy said in an email....", "Beci Brenton, a spokeswoman for Newport News, Virginia-based Huntington Ingalls, said \"all the elevators are installed.\" She said the weapons elevator is among \"the most advanced technologies being incorporated into\" the carrier and \"its completion has been delayed due to a number of first-in-class issues,\" Brenton said.", "\"We are committed to working through the remaining technical challenges,\" she said.", "William Couch, a spokesman for the Naval Sea Systems Command, said the elevators are \"in varying levels of construction and testing.\"", "Six are far enough along to be operated by the shipbuilder, and testing has started on two of those, he said. All 11 \"should have been completed and delivered with the ship delivery,\" according to Couch.", "He said the contractor has corrected \"all issues,\" including the \"four uncommanded movements over the last three years that were discovered during the building, operational grooming, or testing phases.\"...", "A November 2010 program on PBS's \"Nova\" science series extolled the \"Elevator of Tomorrow\" being developed by Federal Equipment Co., a Cincinnati-based subcontractor to Huntington Ingalls.", "Doug Ridenour, president of Federal Equipment Co., said the elevator's key technologies \"have been consistently demonstrated for years\" in a test unit in the company's plant and any programming or software-related issues have been fixed.", "But \"shipboard integration involves many other technology insertions not controlled by\" his company, he said.", "At a November 27, 2018, hearing on Navy shipbuilding programs before the Seapower subcommittee of the Senate Armed Services Committee, the following exchange occurred:", "SENATOR TIM KAINE (continuing): ", "There have been challenges with the advanced weapons elevators on the CVN, some of the technical difficult[ies] seem similar to those that were experienced earlier on both the [aircraft] launch and arresting systems. I think that the Navy put together independent review teams to tackle those issues and provide solutions. Are we at a point where that may be needed on the weapons elevators or are we in a position where we think the progress on the weapons elevators is satisfactory?", "JAMES F. GEURTS, ASSISTANT SECRETARY OF THE NAVY FOR RESEARCH, DEVELOPMENT AND ACQUISITION:", "Yes, sir. So there are 11 weapons elevators [and] each one of them we have to produce, test and then certify. The first two of those have been produced, the first one's been through test and certification. The second one is about 94 percent through test. We are making progress to get through all of the elevators during this availability.", "I am likely to do an independent review team not on the immediate construction for CVN-78 but looking at the longer-term sustainability, resilience, reliability to make sure we are in a position to support those elevators for the long term, that we've got all of the training and all of the reliability built into those. We've done so many independent reviews for the [CVN-]78 elevator design as they are so we won't do one on the current efforts on [CVN-]78. We've got a dedicated team working our way through those issues.", "KAINE: ", "And is your timing on that testing and certification on [CVN-]78\u2014you have this 12-month period where you are testing\u2014[do] you think you will get through the testing and certification of all of the 11 elevators in that year one?", "GEURTS: ", "My current assessment is we will get through all of the production and much of the testing. We may have some of the certification issues to go. I am watching it very closely and we will keep you and your staff informed on progress there.", "A December 5, 2018, press report stated the following:", "The Navy plans to complete installation and testing of the 11 elevators before the Ford completes its post-delivery shakedown phase in July, Captain Danny Hernandez, a Navy spokesman, said in an email. Six will also be certified for use by then, but five won't be completed until after July, he said. \"A dedicated team is engaged on these efforts and will accelerate this certification work and schedule where feasible,\" he said.", "Huntington spokeswoman Beci Brenton said via email that company officials had a \"very productive meeting\" with Inhofe that included both the elevators and benefits of a two-carrier contract.", "The elevator's completion \"has been delayed due to a number of first-in-class issues associated with the first-time installation, integration and test of this new technology,\" she said. \"However, we are making substantial substantial progress in resolving the remaining technical challenges.\"", "A January 6, 2019, press report stated the following:", "The Navy Secretary has committed that the service and its industry partners will have working weapons elevators on aircraft carrier USS Gerald R. Ford (CVN-78) by the end of the summer\u2014and the secretary's job is now on the line over that issue.", "The Navy accepted delivery of the first-in-class carrier and commissioned it into the fleet without any functioning weapons elevators. The carrier is now in its post-shakedown availability at builder Newport News Shipbuilding, after spending a year at sea running the ship to discover any potential flaws.", "Though the Navy already said the elevators would be addressed during this PSA period, the stakes are now higher: Navy Secretary Richard V. Spencer told President Donald Trump that the elevators would be installed and working by the time the carrier returns to sea, or else the president can use his famous \"you're fired\" line on the service secretary.", "Spencer said this morning at an event hosted by the Center for a New American Security that he spoke to Trump at length last month at the Army-Navy football game in Philadelphia.", "\"I asked him to stick his hand out; he stuck his hand out. I said, let's do this like corporate America. I shook his hand and said, the elevators will be ready to go when she pulls out or you can fire me,\" Spencer said, adding that someone had to take accountability over the ongoing elevator challenges.", "\"We're going to get it done. I know I'm going to get it done. I haven't been fired yet by anyone; being fired by the president really isn't on the top of my list.\"...", "The elevator issue has plagued the carrier for years, even if it garnered less attention than other high-profile new technologies on the carrier, such as the new Electromagnetic Aircraft Launch System (EMALS) and the Advanced Arresting Gear, both of which had their own fair share of technical problems.", "In 2016, the late Sen. John McCain (R-Ariz.), who then chaired the Senate Armed Services Committee, railed against the Ford-class program, noting that Ford was already overdue to be delivered to the Navy and still was facing ongoing technical difficulties.", "\"The Navy's announcement of another two-month delay in the delivery of CVN-78 further demonstrates that key systems still have not demonstrated expected performance. The advanced arresting gear (AAG) cannot recover airplanes. Advanced weapons elevators cannot lift munitions. The dual-band radar cannot integrate two radar bands. Even if everything goes according to the Navy's plan, CVN-78 will be delivered with multiple systems unproven,\" McCain said in a July 2016 hearing.", "A month later the Pentagon announced a 60-day review of the Ford program, with a specific focus on five technology areas, including the elevators.", "Ford ultimately delivered to the Navy in June 2017 and commissioned a month later, still without working weapons elevators.", "In July 2018, when Ford entered PSA, the Navy said the maintenance availability had been extended from a planned eight months to a full year, to accommodate both the typical work that arises in PSA but also deferred work such as the construction and installation of weapons elevators and an upgrade to the AAG, whose technical challenges greatly contributed to the delayed delivery and commissioning of the ship.", "A January 16, 2019, press report stated the following:", "The Navy's newest aircraft carrier, USS Gerald R. Ford (CVN 78), closed out 2018 on a high note with the acceptance of the ship's first advanced weapons elevator (AWE), setting the tone for more positive developments in the year ahead.", "AWE Upper Stage #1 was turned over to the ship on Dec. 21, following testing and certification by engineers at Huntington Ingalls Industries-Newport News Shipbuilding, where the ship is currently working through its post-shakedown availability (PSA). The acceptance marks a major milestone for the ship and the Ford-class of aircraft carriers to follow....", "Though the first elevator has been accepted, work still remains on the remaining 10. Currently, all shipboard installation and testing activities of the AWEs are due to be completed prior to the end of Ford's PSA, scheduled for July. However, some remaining certification documentation will be performed for five of the 11 elevators after PSA completion.", "A March 6, 2019, press report stated the following:", "Nearly one month following the acceptance of its first advanced weapons elevator (AWE), the Navy's newest aircraft carrier, USS Gerald R. Ford (CVN 78), has accepted its second.", "AWE Upper Stage #3 was turned over to the ship February 14, following testing and certification by engineers at Huntington Ingalls Industries-Newport News Shipbuilding (NNS), where the ship is currently working through its post-shakedown availability (PSA).", "According to Ford's Weapons Officer, Cmdr. Joe Thompson, acceptance of the second AWE offers an opportunity for Ford Sailors to become acquainted with the equipment during the PSA.", "\"This gives us more time to learn and become subject matter experts,\" explained Thompson. \"All of us are learning on brand new systems and brand new concepts. This acceptance gives us the opportunity to have that 'run time' on the physical aspects of the elevator, but also in evaluating the technical manuals, and learning the maintenance required to keep them operational.\"", "With two elevators in hand, Thompson explained that Sailors training on these new systems will be able to apply the lessons learned from the first elevator, Upper Stage #1, and apply them to Upper Stage #3, thereby streamlining the learning process and lessening the learning curve.", "\"This is going to allow us to progress faster,\" he explained. \"As we get smarter on one, we move on to the next and apply the lessons learned not only with regard to elevator operation, but also in the testing and certification, and maintenance processes.\"\u2026", "Acceptance of the elevator was accelerated due to a merging of the test programs between NNS and the Naval Surface Warfare Center (NSWC), which removed redundant steps and moved certification up by 10 days. The team has identified other areas where redundancy can be removed to make the acceptance timelines more efficient."], "subsections": []}, {"section_title": "Issues Raised in December 2018 DOT&E Report", "paragraphs": ["Another oversight issue for Congress concerns CVN-78 program issues raised in a December 2018 report from DOD's Director, Operational Test and Evaluation (DOT&E)\u2014DOT&E's annual report for FY2018. Regarding the CVN-78 program, the report stated the following in part:", "Assessment", "\u2022 The delays in the ship development and initial trials pushed both phases of initial operational testing until FY21 and FY22. The delay in the ship's delivery and development added approximately 2 years to the timeline. As noted in previous annual reports, the CVN 78 test schedule has been aggressive, and the development of EMALS [Electromagnetic Aircraft Launch System], AAG [Advanced Arresting gear], AWE [Advanced Weapons Elevator], DBR [Dual Band Radar], and the Integrated Warfare System delayed the ship's first deployment to FY22.", "Reliability", "\u2022 Four of CVN 78's new systems stand out as being critical to flight operations: EMALS, AAG, DBR, and AWEs. Overall, the poor reliability demonstrated by AAG and EMALS and the uncertain reliability of DBR and AWEs could delay CVN 78 IOT&E [Initial Operational Test and Evaluation]. The Navy continues to test all four of these systems in their shipboard configurations aboard CVN 78. Reliability estimates derived from test data for EMALS and AAG are discussed in following subsections. For DBR and AWE, only engineering reliability estimates have been provided. ", "EMALS", "\u2022 Testing to date involved 747 shipboard launches and demonstrated EMALS capability to launch aircraft planned for the CVN 78 Air Wing.", "\u2022 Through the first 747 shipboard launches, EMALS suffered 10 critical failures. This is well below the requirement of 4,166 Mean Cycles Between Critical Failures, where a cycle represents the launch of one aircraft. ", "\u2022 The reliability concerns are exacerbated by the fact that the crew cannot readily electrically isolate EMALS components during flight operations due to the shared nature of the Energy Storage Groups and Power Conversion Subsystem inverters onboard CVN 78. The process for electrically isolating equipment is time-consuming; spinning down the EMALS motor/generators takes 1.5 hours by itself. The inability to readily electrically isolate equipment precludes EMALS maintenance during flight operations.", "AAG", "\u2022 Testing to date included 763 attempted shipboard landings and demonstrated AAG capability to recover aircraft planned for the CVN 78 air wing.", "\u2022 The Program Office redesigned major components that did not meet system specifications during land-based testing. Through the first 763 attempted shipboard landings, AAG suffered 10 operational mission failures (which includes one failure of the barricade system). This reliability estimate falls well below the re-baselined reliability growth curve and well below the requirement of 16,500 Mean Cycles Between Operational Mission Failures, where a cycle represents the recovery of one aircraft.", "\u2022 The reliability concerns are magnified by the current AAG design that does not allow electrical isolation of the Power Conditioning Subsystem equipment from high power buses, limiting corrective maintenance on below-deck equipment during flight operations.", "Combat System", "\u2022 Results of SBDT [sea-based developmental testing] events indicate good SSDS [ship self-defense system] performance in scheduling and launching simulated RAMs [Rolling Airframe Missiles] and ESSMs [Evolved Sea Sparrow Missiles], as well as scheduling DBR directives for ESSM acquisition and target illumination. Insufficient interoperability testing with a CEC [Cooperative Engagement Capability] network and Link 16 prevents an estimate of performance in this area. It is unknown if the integration problems between SSDS and Surface Electronic Warfare Improvement Program (SEWIP) Block 2 identified during engineering testing at Wallops Island have been resolved because SEWIP Block 2 was not installed on the ship during these SBDT events.", "\u2022 CVN 78's combat system testing on the SDTS [self-defense test ship] is at risk due to schedule constraints, lack of funding, and insufficient planned developmental testing.", "DBR", "\u2022 Throughout the five CVN 78 SBDTs, DBR was plagued by extraneous false and close-in dual tracks adversely affecting its performance.", "\u2022 Integration of the DBR electronic protection capabilities remains incomplete and unfunded. With modern threats, a lack of electronic protection places the ship in a high-risk scenario if deployed to combat.", "\u2022 The Navy analysis noted that DBR performance needs to be improved to support carrier air traffic control center certification.", "Sortie Generation Rate", "\u2022 CVN 78 is unlikely to achieve its SGR [sortie generation rate] requirement. The target threshold is based on unrealistic assumptions including fair weather and unlimited visibility, and that aircraft emergencies, failures of shipboard equipment, ship maneuvers, and manning shortfalls will not affect flight operations. During the 2013 operational assessment, DOT&E conducted an analysis of past aircraft carrier operations in major conflicts. The analysis concludes that the CVN 78 SGR requirement is well above historical levels.", "\u2022 DOT&E plans to assess CVN 78 performance during IOT&E by comparing it to the SGR requirement as well as to the demonstrated performance of the Nimitz-class carriers.", "\u2022 Poor reliability of key systems that support sortie generation on CVN 78 could cause a cascading series of delays during flight operations that would affect CVN 78's ability to generate sorties. The poor or unknown reliability of these critical subsystems represents the most risk to the successful completion of CVN 78 IOT&E.", "Manning", "\u2022 Based on current expected manning, the berthing capacity for officers and enlisted will be exceeded by approximately 100 personnel with some variability in the estimates. This also leaves no room for extra personnel during inspections, exercises, or routine face-to-face turnovers.", "\u2022 Planned ship manning requires filling 100 percent of the billets. This is not the Navy's standard practice on other ships, and the personnel and training systems may not be able to support 100 percent manning. Additionally, workload estimates for the many new technologies such as catapults, arresting gear, radar, and weapons and aircraft elevators are not yet well understood.", "Electromagnetic Compatibility", "\u2022 Developmental testing identified significant EMI [electromagnetic interference] and radiation hazard problems. The Navy continues to characterize and develop mitigation plans for the problems, but some operational limitations and restrictions are expected to persist into IOT&E and deployment. The Navy will need to develop capability assessments at differring levels of system utilization in order for commanders to make informed decisions on system employment.", "Live Fire Test & Evaluation", "\u2022 The vulnerability of CVN 78's many new critical systems to underwater threat-induced shock is unknown. The program plans to complete shock testing on EMALS, AAG, and the AWE components during CY19, but because of a scarcity of systems, shock testing of DBR components lags and will likely not be completed before the FSSTs [full ship shock trials].", "\u2022 The Vulnerability Assessment Report provides an assessment of the ship's survivability to air-delivered threat engagements. The classified findings in the report identify the specific equipment that most frequently would lead to mission capability loss. In FY19, the Navy is scheduled to deliver additional report volumes that will assess vulnerability to underwater threats and compliance with Operational Requirements Document survivability criteria.", "Recommendations", "The Navy should:", "1. Provide schedule, funding, and an execution strategy for assessing SGR. This strategy should specify which testing will be accomplished live, a process for accrediting the Seabasing/Seastrike Aviation Model for operational testing, and a method for comparing CVN 78 performance with that of the Nimitz class.", "2. Continue to characterize the electromagnetic environment onboard CVN 78 and develop operating procedures to maximize system effectiveness and maintain safety. As applicable, the Navy should utilize the lessons learned from CVN 78 to inform design modifications for CVN 79 and future carriers.", "3. Develop and implement DBR electronic protection to enhance ship survivability against modern threats.", "4. Submit an updated TEMP."], "subsections": []}, {"section_title": "Issues Raised in May 2019 GAO Report", "paragraphs": ["Another oversight issue for Congress concerns CVN-78 program issues raised in the 2019 edition of the Government Accountability Office's (GAO's) annual report surveying selected DOD weapon acquisition programs. Some of these issues raised by GAO overlap with issues discussed in previous sections of this CRS report. Regarding the CVN-78 program, the report stated the following:", "Technology Maturity, Design Stability, and Production Readiness", "The Navy accepted delivery of the lead ship, CVN 78, in May 2017 despite challenges related to immature technologies and struggles to demonstrate the reliability of mature systems. The Navy reports that 10 of the Ford Class's 12 critical technologies are fully mature\u2014the advanced arresting gear (AAG) and one of the ship's missile systems are not yet mature. The advanced weapons elevators are among the systems deemed mature by the Navy; however, according to Navy officials, only 2 of the 11 elevators installed on the ship can bring munitions to the flight deck\u2014a key element of operational flights. The shipbuilder is working to correct the system during its first post-delivery maintenance period, now scheduled to end in October 2019, and the Navy plans to create a land-based site to test the elevators, which will come at an additional cost.", "Shipboard testing is ongoing for several critical systems and could delay future operational testing. Those systems include the electromagnetic aircraft launch system (EMALS), AAG, and dual band radar (DBR). Although the Navy is testing EMALS and AAG on the ship with aircraft, the reliability of those systems remains a concern. If these systems cannot function safely, CVN 78 will not demonstrate it can rapidly deploy aircraft\u2014a key requirement for these carriers. Recent shipboard testing revealed that the Navy is struggling to get DBR to operate as planned. Moreover, DBR poses a greater radiation hazard to personnel and systems on an aircraft carrier than the Navy anticipated, which could restrict certain types of flight operations.", "The remaining challenges the Navy faces in maturing CVN 78's critical technologies could lead to their redesign or replacement on later ships. This would include CVN 79, which is currently 55 percent complete, as well as the third and fourth ships, CVNs 80 and 81. CVN 79 repeats the CVN 78 design with some modifications and replaces DBR with the Enterprise Air Surveillance Radar (EASR), which is in development. The Navy does not identify this new system as a critical technology in the Ford Class program because it derives from the pre-existing Air and Missile Defense Radar (AMDR) program. However, EASR is a different size and performs a different mission than the AMDR systems, which are designed for destroyers. Therefore, EASR may still require design and development efforts to function on the carrier. The Navy plans to procure two EASR units for CVNs 79 and 80 and install the CVN 79 unit during that ship's second phase of delivery. CVNs 80 and 81 will repeat the design of CVN 79.", "Other Program Issues", "CVN 78's procurement costs increased by 23 percent over its initial cost cap and as a result of continuing technical deficiencies, the Navy may still require more funding to complete this ship. The Navy increased the current $12.9 billion cost cap for CVN 78 by $120 million in May 2018 to account for additional post-delivery work, but added work and cost changes may result in an additional cost increase.", "Costs for CVN 79 are also likely to increase as a result of optimistic cost and labor targets, putting the ship at risk of exceeding its $11.4 billion cost cap. The CVN 79 cost estimate assumes unprecedented construction efficiency\u2014labor hours will be 18 percent lower than CVN 78. However, our analysis shows the shipbuilder is not meeting this goal and is unlikely to improve performance enough to meet cost and labor targets.", "Congress raised the cost cap for CVN 80 and later ships to $12.6 billion and approved the Navy's plans to buy two carriers\u2014CVNs 80 and 81\u2014at the same time, based on the shipbuilder's estimate that this strategy will save the Navy over $2 billion. However, it is unclear whether the Navy can meet this cost cap, even with the estimated savings from a two-ship buy, because it assumes further reductions in subsystem costs, construction change orders, and labor hours. The Navy projects a further reduction in labor hours compared to CVN 79\u2014about 25 percent fewer labor hours than CVN 78\u2014will contribute to cost savings for these ships.", "The program office indicated that it does not separately track or report information on software development to integrate the various subsystems of the ship. These subsystems include CVN 78's combat control systems, which rely on integrating systems through software intensive development.", "Program Office Comments", "We provided a draft of this assessment to the program office for review and comment. The program office provided technical comments, which we incorporated where appropriate. The program office stated that, in July 2018, CVN 78 entered a year-long maintenance period. It also said that, as of February 2019, two advanced weapons elevators are operating, and it continues to improve developmental system reliability.", "The program also stated that, with CVN 79 construction 55 percent complete, shipbuilder cost performance remains stable, but slightly below the level needed to achieve production labor hour reduction targets. The program stated that the shipbuilder continues to work through the effects of material shortfalls that disrupted performance. The program said that the Navy plans to deliver a complete, deployable ship as scheduled and within the cost cap to maintain an 11-carrier fleet.", "The program office also stated that the Navy awarded the CVN 80/81 procurement contract in January 2019 and expects to save $4 billion, compared to if it had purchased each ship individually. According to the program, the contract limits the Navy's liability and incentivizes the shipyard's best performance."], "subsections": []}, {"section_title": "Navy Study on Smaller Aircraft Carriers", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["Another oversight issue for Congress is whether the Navy should shift at some point from procuring large-deck, nuclear-powered carriers like the CVN-78 class to procuring smaller aircraft carriers. The issue has been studied periodically by the Navy and other observers over the years. To cite one example, the Navy studied the question in deciding on the aircraft carrier design that would follow the Nimitz (CVN-68) class.", "Advocates of smaller carriers argue that they are individually less expensive to procure, that the Navy might be able to employ competition between shipyards in their procurement (something that the Navy cannot do with large-deck, nuclear-powered carriers like the CVN-78 class, because only one U.S. shipyard, HII/NNS, can build aircraft carriers of that size), and that today's aircraft carriers concentrate much of the Navy's striking power into a relatively small number of expensive platforms that adversaries could focus on attacking in time of war.", "Supporters of large-deck, nuclear-powered carriers argue that smaller carriers, though individually less expensive to procure, are less cost-effective in terms of dollars spent per aircraft embarked or aircraft sorties that can be generated, that it might be possible to use competition in procuring certain materials and components for large-deck, nuclear-powered aircraft carriers, and that smaller carriers, though perhaps affordable in larger numbers, would be individually less survivable in time of war than large-deck, nuclear-powered carriers."], "subsections": []}, {"section_title": "Navy Study Initiated in 2015", "paragraphs": ["At a March 18, 2015, hearing on Navy shipbuilding programs before the Seapower subcommittee of the Senate Armed Services Committee, the Navy testified that it had initiated a new study on the question. At the hearing, the following exchange occurred:", "SENATOR JOHN MCCAIN, CHAIRMAN, SENATE ARMED SERVICES COMMITTEE, ATTENDING EX OFFICIO:", "And you are looking at additional options to the large aircraft carrier as we know it.", "SEAN STACKLEY, ASSISTANT SECRETARY OF THE NAVY FOR RESEARCH, DEVELOPMENT,AND ACQUISITION: ", "We've initiated a study and I think you've discussed this with the CNO [Chief of Naval Operations] and that's with the frontend of that study. Yes, sir. ", "Later in the hearing, the following exchange occurred:", "SENATOR ROGER WICKER, CHAIRMAN, SEAPOWER SUBCOMMITTEE:", "Well, Senator McCain expressed concern about competition [in Navy shipbuilding programs]. And I think that was with, in regard to aircraft carriers.", "SEAN J. STACKLEY, ASSISTANT SECRETARY OF THE NAVY FOR RESEARCH, DEVELOPMENT,AND ACQUISITION:", "Yes, Sir.", "WICKER: ", "Would you care to respond to that?", "STACKLEY: ", "He made a generic comment that we need competition to help control cost in our programs and we are absolutely in agreement there. With specific regards to the aircraft carrier, we have been asked and we are following suit to conduct a study to look at alternatives to the Nimitz and Ford class size and type of aircraft carriers, to see if it make sense.", "We've done this in the past. We're not going to simply break out prior studies, dust them off and resubmit it. We're taking a hard look to see is there\u2014is there a sweet spot, something different other than today's 100,000 ton carrier that would make sense to provide the power projection that we need, that we get today from our aircraft carriers, but at the same time put us in a more affordable position for providing that capability.", "WICKER: ", "OK. But right now, he's\u2014he's made a correct factual statement with regard to the lack of competition.", "STACKLEY: ", "Yes, Sir. There is\u2014yes, there is no other shipyard in the world that has the ability to construct a Ford or a Nimitz nuclear aircraft carrier other than what we have in Newport News and the capital investment to do that is prohibitive to set up a second source, so obviously we are\u2014we are content, not with the lack of competition, but we are content with knowing that we're only going to have one builder for our aircraft carriers.", "On March 20, 2015, the Navy provided the following additional statement to the press:", "As indicated in testimony, the Navy has an ongoing study to explore the possible composition of our future large deck aviation ship force, including carriers. There is a historical precedent for these type[s] of exploratory studies as we look for efficiencies and ways to improve our war fighting capabilities. This study will reflect our continued commitment to reducing costs across all platforms by matching capabilities to projected threats and Also [sic] seeks to identify acquisition strategies that promote competition in naval ship construction. While I can't comment on an ongoing study, what I can tell you is that the results will be used to inform future shipbuilding budget submissions and efforts, beyond what is currently planned."], "subsections": []}, {"section_title": "Report Required by Section 128 of P.L. 114-92", "paragraphs": ["Section 128 of the FY2016 National Defense Authorization Act ( S. 1356 / P.L. 114-92 of November 25, 2015) states the following:", "SEC. 128. Limitation on availability of funds for U.S.S. John F. Kennedy (CVN\u201379).", "(a) Limitation.\u2014Of the funds authorized to be appropriated by this Act or otherwise made available for fiscal year 2016 for procurement for the U.S.S. John F. Kennedy (CVN\u201379), $100,000,000 may not be obligated or expended until the date on which the Secretary of the Navy submits to the congressional defense committees the certification under subsection (b)(1) or the notification under paragraph (2) of such subsection, as the case may be, and the reports under subsections (c) and (d)....", "(d) Report on future development.\u2014", "(1) IN GENERAL.\u2014Not later than April 1, 2016, the Secretary of the Navy shall submit to the congressional defense committees a report on potential requirements, capabilities, and alternatives for the future development of aircraft carriers that would replace or supplement the CVN\u201378 class aircraft carrier.", "(2) ELEMENTS.\u2014The report under paragraph (1) shall include the following:", "(A) A description of fleet, sea-based tactical aviation capability requirements for a range of operational scenarios beginning in the 2025 timeframe.", "(B) A description of alternative aircraft carrier designs that meet the requirements described under subparagraph (A).", "(C) A description of nuclear and non-nuclear propulsion options.", "(D) A description of tonnage options ranging from less than 20,000 tons to greater than 100,000 tons.", "(E) Requirements for unmanned systems integration from inception.", "(F) Developmental, procurement, and lifecycle cost assessment of alternatives.", "(G) A notional acquisition strategy for the development and construction of alternatives.", "(H) A description of shipbuilding industrial base considerations and a plan to ensure opportunity for competition among alternatives.", "(I) A description of funding and timing considerations related to developing the Annual Long-Range Plan for Construction of Naval Vessels required under section 231 of title 10, United States Code.", "The report required by Section 128(d) of P.L. 114-92 , which was conducted for the Navy by the RAND Corporation, was delivered to the congressional defense committees in classified form in July 2016. An unclassified version of the report was then prepared and issued in 2017 as a publicly released RAND report. The executive summary of that report states the following (emphasis as in original):", "We analyzed the feasibility of adopting four aircraft carrier concept variants as follow-ons to the Ford-class carrier following USS Enterprise (CVN 80) or the as-yet-unnamed CVN 81. Among these options are two large-deck carrier platforms that would retain the capability to launch and recover fixed-wing aircraft using an on-deck catapult and arresting gear system and two smaller carrier platforms capable of supporting only short takeoff and vertical landing (STVOL) aircraft. Specifically, the four concept variants are as follows:", "\u2022 a follow-on variant continuing the current 100,000-ton Ford-class carrier but with two life-of-the-ship reactors and other equipment and system changes to reduce cost (we refer to this design concept as CVN 8X)", "\u2022 a 70,000-ton USS Forrestal\u2013size carrier with an updated flight deck and hybrid nuclear-powered integrated propulsion plant with capability to embark the current large integrated air wing but with reduced sortie generation capability, survivability, and endurance compared with the Ford class (we refer to this design concept as CVN LX)", "\u2022 a 43,000-ton variant of the USS America\u2013class, fossil fuel\u2013powered and arranged to support only STOVL operations but at a higher tempo than the current LHA 6 (USS America) (we refer to this design concept as CV LX). This variant would incorporate the larger ship's beam excursion the Navy examined in the LHA 8\u2013class flight 1 studies.", "\u2022 a 20,000-ton variant that will resemble escort carriers that some allied navies currently operate (we refer to this design concept as CV EX). Similar to the 43,000-ton variant, it will be conventionally powered and will operate STOVL aircraft....", "Our analyses of the carrier variants illuminated capability shortfalls in some instances. Our overall findings are as follows:", "\u2022 The CVN 8X, the descoped Ford-class carrier, offers similar warfighting capability to that of the Ford-class carrier today. There might be opportunities to reduce costs by eliminating costly features that only marginally improve capability, but similar tradeoffs are likely to be made in the current program as well.", "\u2022 The CVN LX concept variant offers an integrated, current air wing with capabilities near current levels but with less organic mission endurance for weapons and aviation fuel. It will not generate the same SGR as the Ford-class carrier, but this is not a significant limitation for stressing warfighting scenarios. It will be less survivable in some environments and have less redundancy than the Ford program-of-record ship, and these factors might drive different operation concepts. Although we do not characterize the impact of decreased survivability, this is an important limitation that will have to be weighed against the potential cost savings. The major means of reducing cost is through engineering redundancy, speed, and air wing fuel capacity, and these could affect mobility and theater closure.", "\u2022 The concept variant CV LX, which is a version of the LHA 6 platforms, might be a low-risk, alternative pathway for the Navy to reduce carrier costs if such a variant were procured in greater numbers than the current carrier shipbuilding plan; our analysis suggests a two-to-one replacement. Over the long term, however, as the current carrier force is retired, the CV LX would not be a viable option for the eventual carrier force unless displaced capabilities were reassigned to new aircraft or platforms in the joint force, which would be costly. This platform would be feasible for a subset of carrier missions but, even for those missions, could require an increase in the number of platforms. This concept variant might, if procured in sufficient numbers, eventually enable the Navy to reduce the number of Ford-class carriers in the overall force structure, but more-extensive analysis of missions, operations, and basing of such a variant and the supported air combat element is required.", "\u2022 The smallest concept variants reviewed, the CV EX 20,000-ton sea-based platforms, do not provide either a significant capacity or an integrated air wing and, thus, force reliance on other legacy platforms or land-based assets to provide key elements of capability\u2014in particular, AEW. As a result, this concept variant is not really a replacement for current aircraft carrier capability and would require other platforms, aircraft, weapons, and capabilities in the joint force. These platforms would be a viable pathway only in broad fleet architecture transformation providing a narrow mission set, perhaps regionally, and would require extensive analysis. Given that such a concept variant is not a viable replacement for an aircraft carrier, such analysis would be required to see whether any adjustment on the current aircraft carrier program would be feasible....", "The overall results of our cost comparison are as follows:", "\u2022 The descoped Ford-class carrier, the CVN 8X, might generate fewer sorties than the current key performance parameter values for the Ford class and might have only incremental reduction in overall platform cost . The analysis examining cost reduction with transition to a life-of-the-ship reactor, such that being done on submarine programs, does not appear to be cost effective. Between the developmental costs and a reduced service life, there is little cost advantage in this variant.", "\u2022 The CVN LX concept would allow considerable savings across the ship's service life and appears to be a viable alternative to consider for further concept exploration . Construction costs would be lower; design changes and life-cycle costs would reflect the lessons already applied in the Ford class. The reliance on hybrid drive with fewer mechanical parts than legacy platforms is likely to further reduce maintenance cost. However, CVN LX would be a new design that would require a significant investment in nonrecurring engineering in the near term to allow timely delivery in the 2030s.", "\u2022 CV LX, although it requires a larger force structure to maintain air capabilities, might still reduce overall construction costs if large carrier numbers were reduced. But, as described in the report, reducing carrier numbers with the resulting loss of capability should not be pursued without extensive further analysis for all displaced missions in the joint force execution of warfighting scenarios and, potentially, regional basing and narrowly focused missions for these platforms. Any cost savings would likely be offset to an unknown degree by requirements for additional systems to mitigate loss of capability associated with this variant.", "\u2022 CV EX, the smallest variant, is not a practical variant at all without considerable revision of the Navy warfighting concept of operations. Although the same is to a degree true with CV LX, the impact of an even larger number of low-sortie ships with small and limited air wings is even more pronounced with this variant. CV EX has all of the shortfalls of CV LX and will pose even greater issues of mutual support and logistics sustainment....", "Conclusions", "Our analysis points to potential options for replacing the Nimitz-class carrier as these ships reach expected service life that have lower procurement costs than the Ford-class carriers. However, most of these options come with reduced capability that might require changes in the concept of operations to deliver sea-based aircraft capability comparable to that of carriers in the fleet today. If a new platform is introduced in the mid-2030s, the Navy's force structure will still contain a large legacy force of Nimitz- and Ford-class carriers, at least until the mid-2050 time frame, which might lower the risks of introducing a new carrier for some period of time. But, ultimately, if a new carrier variant is selected, it will define the carrier force and constitute the supported capability available to the Navy. Capability shortfalls can be mitigated, to some degree, with changes in operational concepts or by adding additional platforms to the force structure\u2014which introduces additional cost that might offset anticipated cost savings. In addition, if the Navy stops procuring large-deck nuclear carriers, the ability to reconstitute the industrial base at some time in the future comes with substantial risk.", "Although SGR [sortie generation rate] was a central variable in comparing the carrier variants, our analysis suggests that there is room to make trade-offs in aircraft sortie rate capacity between the Ford-class carrier and a lower-cost platform. However, it is important to consider that, whatever threats complicate carrier operations, they might even more significantly affect land-based tactical air operations. Carriers can move; have defensive support from escorts; can readily replenish; and might, in fact, be more survivable than their land-based counterparts. This is an important factor for Congress and the Department of Defense to consider before a trade-off is made to give up the supported air wing sortie generation capacity in the overall sea-based force.", "The question of whether to shift to smaller aircraft carriers was also addressed in three studies on future fleet architecture that were required by Section 1067 of the FY2016 National Defense Authorization Act ( S. 1356 / P.L. 114-92 of November 25, 2015). These three studies are discussed in more detail in another CRS report."], "subsections": []}, {"section_title": "February 2019 Press Report", "paragraphs": ["A February 15, 2019, press report stated the following:", "Under Secretary of the Navy Thomas Modly said now that the Navy found a way to build two new Gerald R. Ford-class aircraft carriers while saving money it is starting to look at future carrier procurement, which might be very different.\u2026", "Modly said Secretary of the Navy Richard Spencer sees $13 billion carriers as not sustainable going forward and the service will be looking at ways to further reduce costs or keep the carrier capabilities more affordable in future ship procurements.", "\"There was general conclusion that those two for sure would be built\" and once that was determined \"that was going to happen,\" Modly said during the AFCEA West 2019 conference here [in San Diego].\u2026", "After the CVN-80 and -81 [procurement] decision was made, \"I think a lot of derivative decisions still need to be made. So the secretary [Spencer] would like to take a look at 'O.K. now that we made that decision, and that second one that comes will be in quite a few years from now, we need to start thinking now about what's the next one look like.'\"", "Modly told reporters they are asking questions like \"Is it going to be advanced as this one? Or is it going to be smaller or are we going to buy two smaller ones or maybe shift air power to other forms of delivery. And we don't know the answers of that but we're looking at this.\""], "subsections": []}]}, {"section_title": "Shock Trial", "paragraphs": ["An earlier oversight issue for Congress for the CVN-78 program was whether to conduct the shock trial for the CVN-78 class in the near term, on the lead ship in the class, or years later, on the second ship in the class. For background information on that issue, see Appendix E ."], "subsections": []}]}, {"section_title": "Legislative Activity for FY2020", "paragraphs": [], "subsections": [{"section_title": "Summary of Congressional Action on FY2020 Funding Request", "paragraphs": [" Table 3 summarizes congressional action on the FY2020 procurement funding request for the CVN-78 program. As shown in Table 1 , of the $2,347.0 million requested for FY2020, $1,062 million is for CVN-80 and $1,285 million is for CVN-81.", "Appendix A. Withdrawn Proposal to Not Fund CVN-75 RCOH", "The Navy's FY2020 budget submission proposed to not fund the mid-life nuclear refueling overhaul (called a Refueling Complex Overhaul, or RCOH) for the aircraft carrier CVN-75 ( Harry S. Truman ), and to instead retire the ship around FY2024 and also deactivate one of the Navy's carrier air wings at about the same time. On April 30, 2019, however, the Administration announced that it was effectively withdrawing this proposal from the Navy's FY2020 budget submission. The Administration now supports funding the CVN-75 RCOH and keeping CVN-75 (and by implication its associated air wing) in service past FY2024. This appendix presents, for reference purposes, additional background information on this withdrawn budget proposal.", "Following the Administration's April 30 withdrawal of its proposal to not fund the CVN-75 RCOH, the Navy states that the CVN-75 RCOH can no longer begin in FY2024, as planned prior to the Navy's FY2020 budget submission, because the Navy spent the months prior to April 30 planning for the ship's deactivation rather than for giving it an RCOH. As a result, the Navy states, the CVN-75 will now begin a year later, in FY2025. As a consequence of this one-year shift in the schedule for the RCOH, the Navy states, the funding stream for the CVN-75 shown in Table A-1 will also now shift one year to the right, and the CVN-75 RCOH can be reinstated without any funding in FY2020, because FY2020 is now effectively the same as FY2019 in Table A-1 .", "Performing an RCOH on a carrier is needed for the carrier to be able to operate for the second half of its intended 50-year service life. Not performing an RCOH on CVN-75 would mean that, instead of remaining in service for the second half of its intended 50-year service life, the ship would be decommissioned, permanently removed from service, and eventually dismantled. (CVN-75 was commissioned into service on July 25, 1998, and will be 26 years old in 2024.) The Navy's FY2020 budget submission shows that, for the period FY2022-FY2047, this would have reduced the size of the carrier force by one ship compared to what it would otherwise be.", "More specifically, the Navy's FY2020 30-year (FY2020-FY2049) shipbuilding plan, reflecting the proposal to not fund the CVN-75 RCOH, projected that the carrier force would remain at 11 ships through FY2024, decline to 10 ships in FY2025, and remain at 10 ships for the remainder of the 30-year period, except for a few years (FY2027, FY2040, FY2042-FY2044, and FY2046-FY2048) when it would temporarily decline to 9 ships. Consequently, beginning in FY2025 and extending through the end of the 30-year period, the carrier force would not be in compliance with the requirement under 10 U.S.C. 8062(b) for the Navy to maintain a force of not less than 11 operational aircraft carriers.", "As an associated action, the Navy's FY2020 budget submission also proposed deactivating one of the Navy's carrier air wings around FY2024. This would reduce the number of carrier air wings from nine to eight, meaning that the Navy beginning around FY2024 would no longer be in compliance with the requirement under 10 U.S.C. 8062(e) to maintain a minimum of nine carrier air wings.", " Table A-1 shows funding for the CVN-75 RCOH in the Navy's FY2019 budget submission. As shown in the table, the estimated total cost of the CVN-75 RCOH in the FY2019 budget submission was $5,578 million (i.e., about $5.6 billion).", "The figure of about $5.6 billion shown in Table A-1 does not include the cost of the two nuclear fuel cores that would be installed as part of the RCOH. (CVN-75, like all Nimitz-class carriers, has two nuclear reactors, each of which would receive a new fuel core as part of an RCOH.) Fuel cores for aircraft carrier RCOHs are procured through the Other Procurement, Navy (OPN) appropriation account. The Navy states that it procured the cores for the CVN-75 RCOH\u2014one of them in FY2008 and the other in FY2011\u2014for a total cost of about $538 million. Adding this $538 million cost to the total cost shown in Table A-1 would increase the total estimated cost of the CVN-75 RCOH to about $6.1 billion.", "The fuel cores for the planned future RCOHs for CVN-76 and CVN-77 (the final two Nimitz-class carriers) have also been procured\u2014the CVN-76 RCOH cores were funded in FY2012 and FY2013, and the CVN-77 RCOH cores were funded in FY2015 and FY2019. Thus, if CVN-75 were to not receive an RCOH, and if it were not possible or cost effective to rescind the funding for the core funded in FY2019, then two of the six Nimitz-class fuel cores that have been procured since FY2008 for anticipated use in RCOHs would not in the end be used in an RCOH and would in effect become surplus to the RCOH effort. The Navy indicated that if that were to occur, these two cores would be placed in storage for potential future use as emergency replacement cores for a Nimitz-class ship until all Nimitz-class ships complete their service lives.", "If CVN-75 were to not receive an RCOH and is instead be decommissioned, the savings from not funding the RCOH would be partially offset by the cost to deactivate and dismantle CVN-75. The Navy estimated the cost to deactivate and dismantle CVN-75 at about $1.5 billion. The initial increments of this approximate $1.5-billion cost would have occurred in FY2023 ($130.3 million) and FY2024 ($247.2 million). The estimated net savings from not funding the RCOH and instead deactivating and dismantling the ship would thus have been about $4.1 billion (i.e., about $5.6 billion less about $1.5 billion). The Navy stated that there would also be 20 to 25 years of additional annual savings of about $1 billion per year in the form of avoided annual operation and support (O&S) costs for CVN-75 and the deactivated carrier air wing. DOD officials reportedly wanted to redirect the estimated net RCOH-related savings of about $4.1 billion and the estimated recurring savings of about $1 billion per year to Navy investments for technologies that will add to future Navy capabilities.", "RCOHs are done primarily by Huntington Ingalls Industries/Newport News Shipbuilding (HII/NNS) in Newport News, VA, and form a significant part of HII/NNS's business base, along with construction of new nuclear-powered aircraft carriers and construction of new nuclear-powered submarines. RCOHs in recent years have been scheduled in a more-or-less heel-to-toe fashion at HII/NNS\u2014when one RCOH is done, the next one is scheduled to begin soon thereafter. RCOHs are done in a particular dry dock at HII/NNS, so a carrier undergoing an RCOH in that dry dock must be ready to depart the dry dock before the following carrier can be moved into the dry dock for its RCOH.", "Until it was withdrawn, the proposal in the Navy's FY2020 budget submission to not fund CVN-75's RCOH and instead decommission the ship (and a carrier air wing) raised a number of potential oversight issues for Congress, including the following:", "Compliance with congressional direction. The central purposes of 10 U.S.C. 8062(b) and 8062(e) are to act as mandates to the executive branch to support a force of not less than 11 carriers and a minimum of 9 carrier air wings in executive branch planning. They represent directions from Congress for the Navy to provide the funding needed to maintain an 11-carrier, 9-carrier-air-wing force, regardless of limitations on the Navy's overall budget or other considerations. A proposed budget from the Navy that is inconsistent with these provisions might thus be viewed as a challenge to Congress's Article 1 power to set policy and to determine the composition of federal spending (i.e., Congress's constitutional power of the purse). If DOD were to treat the requirements in 10 U.S.C. 8062(b) and 8062(e) as optional matters rather than mandates, would this create a precedent for the executive branch to treat similar provisions in the U.S. Code as optional matters rather than mandates? For example, would it create a precedent for DOD, if it so desired, to begin treating as an optional matter the long-standing requirement in 10 U.S.C. 8063(a) that the Marine Corps \"shall be so organized as to include not less than three combat divisions and three air wings, and such other land combat, aviation, and other services as may be organic therein?\" If the executive branch were to begin treating statutory provisions like 10 U.S.C. 8062(b) and 8062(e) as optional matters rather than mandates, what implications might this have for policy and program execution, for Congress's power to legislatively establish policy and program goals, and for Congress's power of the purse? Alternative capabilities to be funded ; net impact on Navy capabilities . What were OSD's plans for redirecting the savings associated with deactivating CVN-75 and a carrier air wing around FY2024? What types of capabilities would have been created or maintained by these redirected funds? How would these capabilities compare in nature and timing to the capabilities that are to be provided by the continued operation of CVN-75 and the carrier air wing? Taking these factors into account, what would have been the net operational impact for the Navy of deactivating CVN-75 and a carrier air wing around FY2024 and redirecting the resulting savings toward these other investments? Requirement for 12-carrier force. The Navy's 2016 Force Structure Assessment (FSA) led to a Navy force-level requirement for a fleet of 355 ships that includes 12 aircraft carriers. OSD allowed the Navy to present that FSA to the Congress, and to program shipbuilding and other actions in support of achieving the 355-ship force-level goal. OSD did not publicly object to the FSA's 12-carrier requirement (or any other part of the 355-ship force-level goal). What was the analytical basis for an action that would reduce the size of the carrier from 11 to 10, instead of helping it to eventually increase from 11 to 12? Next Force Structure Assessment (FSA). The Navy states that it is currently conducting a new FSA as the successor to the 2016 FSA, and that this new FSA is to be completed by the end of 2019. This new FSA could change the 355-ship figure, the planned mix of ships, or both. Did the Navy's proposal to not fund the CVN-75 RCOH, and thereby reduce the carrier force from 11 ships to 10 ships, prejudge the outcome of the new FSA? Would the new FSA be tainted by the knowledge that the Navy had already proposed reducing the carrier force to 10 ships? How well could the analysts performing the new FSA have avoided being influenced by the Navy's proposed action? Was the Navy prepared to go ahead with the CVN-75 RCOH if the new FSA concludes that there is a requirement for 11 or more carriers? Likelihood of need for emergency replacement cores. How likely was it that the Nimitz-class program would need to use an emergency replacement set of fuel cores during the remainder of the Nimitz-class life cycle? What set of circumstances might lead to a need for an emergency replacement set of fuel cores? How often have such circumstances previously arisen for a nuclear-powered U.S. Navy ship whose fuel cores are intended to be sufficient for powering the ship for at least one-half of its expected service life? Given the assessed likelihood of the Nimitz-class program needing to use an emergency replacement set of fuel cores during the remainder of the Nimitz-class life cycle, what would have been the government's resulting return on investment of the several hundred million dollars used to procure the two fuel cores that would be placed in storage? Acting Secretary of Defense. The proposal to not fund the CVN-75 RCOH and to deactivate a carrier air wing represented a notable change from prior DOD force-structure planning and budgeting. Was it appropriate for such a change to be proposed by DOD during a time when DOD has an acting Secretary of Defense rather than a Secretary who was confirmed specifically for that position? Impact on industrial base and cost of other work. What would have been the impact on HII/NNS and the other parts of the aircraft carrier industrial base if CVN-75 were inactivated rather than given an RCOH? What impact, if any, would this have had on the cost of other work performed at HII/NNS and other parts of the aircraft carrier industrial base during these years, and on the eventual cost of the CVN-76 RCOH?", "For further reference, it can be noted that the Navy's FY2015 budget submission proposed not funding the RCOH for the aircraft carrier CVN-73 ( George Washington ). The proposal raised oversight issues for Congress broadly similar to those listed above. Congress, in acting on the Navy's proposed FY2015 budget, rejected the proposal to not fund CVN-73's RCOH. The RCOH was funded and is currently underway.", "Appendix B. Background Information on Two-Ship Block Buy for CVN-80 and CVN-81", "This appendix presents additional background information on the two-ship block buy contract for CVN-80 and CVN-81.", "The option for procuring two CVN-78 class carriers under a two-ship block buy contract had been discussed in this CRS report since April 2012. In earlier years, the discussion focused on the option of using a block buy contract for procuring CVN-79 and CVN-80. In more recent years, interest among policymakers focused on the option of using a block buy contract for procuring CVN-80 and CVN-81.", "On March 19, 2018, the Navy released a request for proposal (RFP) to Huntington Ingalls Industries/Newport News Shipbuilding (HII/NNS) regarding a two-ship buy of some kind for CVN-80 and CVN-81. A March 20, 2018, Navy News Service report stated the following:", "The Navy released a CVN 80/81 two-ship buy Request for Proposal (RFP) to Huntington Ingalls Industries\u2014Newport News Shipbuilding (HII-NNS) March 19 to further define the cost savings achievable with a two-ship buy.", "With lethality and affordability a top priority, the Navy has been working with HII-NNS over the last several months to estimate the total savings associated with procuring CVN 80 and CVN 81 as a two-ship buy.", "\"In keeping with the National Defense Strategy, the Navy developed an acquisition strategy to combine the CVN 80 and CVN 81 procurements to better achieve the Department's objectives of building a more lethal force with greater performance and affordability,\" said James F. Geurts, Assistant Secretary of the Navy, Research Development and Acquisition. \"This opportunity for a two-ship contract is dependent on significant savings that the shipbuilding industry and government must demonstrate. The Navy is requesting a proposal from HII-NNS in order to evaluate whether we can achieve significant savings.\"", "The two-ship buy is a contracting strategy the Navy has effectively used in the 1980s to procure Nimitz-class aircraft carriers and achieved significant acquisition cost savings compared to contracting for the ships individually. While the CVN 80/81 two-ship buy negotiations transpire, the Navy is pursuing contracting actions necessary to continue CVN 80 fabrication in fiscal year (FY) 2018 and preserve the current schedule. The Navy plans to award the CVN 80 construction contract in early FY 2019 as a two-ship buy pending Congressional approval and achieving significant savings.", "Section 121(a)(2) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 ( H.R. 5515 / P.L. 115-232 of August 13, 2018) permitted the Navy, after the Department of Defense (DOD) made certain certifications to Congress, to add CVN-81 to the existing contract for building CVN-80. DOD provided the required certification on December 31, 2018. On January 31, 2019, the Navy announced that it had awarded a two-ship fixed-price incentive (firm target) (FPIF) contract for CVN-80 and CVN-81 to HII/NNS.", "The two-ship contract for CVN-80 and CVN-81 can be viewed as a block buy contract because the two ships are being procured in different fiscal years (CVN-80 was procured in FY2018 and CVN-81 is shown in the Navy's FY2020 budget submission as a ship procured in FY2020). The Navy's previous two-ship aircraft carrier procurements occurred in FY1983 (for CVN-72 and CVN-73) and FY1988 (for CVN-74 and CVN-75). In each of those two earlier cases, however, the two ships were fully funded within a single fiscal year, making each of these cases a simple two-ship purchase (akin, for example, to procuring two Virginia-class attack submarines or two DDG-51 class destroyers in a given fiscal year) rather than a two-ship block buy (i.e., a contract spanning the procurement of end items procured across more than one fiscal year).", "Compared to DOD's estimate that the two-ship block buy contract for CVN-80 and CVN-81 would produce savings of $3.9 billion (as measured from estimated costs for the two ships in the December 2017 Navy business case analysis), DOD states that \"the Department of Defense's Office of Cost Assessment and Program Evaluation (CAPE) developed an Independent Estimate of Savings for the two-ship procurement and forecast savings of $3.1 billion ([in] Then-Year [dollars]), or approximately 11 percent.... The primary differences between [the] CAPE and Navy estimates of savings are in Government Furnished Equipment and production change orders.\" Within the total estimated combined reduction in cost, HII/NNS reportedly expects to save up to $1.6 billion in contractor-furnished equipment.", "A November 2018 DOD report to Congress that was submitted as an attachment to DOD's December 31, 2018, certification stated the following regarding the sources of cost reduction for the two-ship contract:", "The CVN 80 and CVN 81 two-ship buy expands and improves upon the affordability initiatives identified in the Annual Report on Cost Reduction Efforts for JOHN F. KENNEDY (CVN 79) and ENTERPRISE (CVN 80) as required by section 126(c) of the National Defense Authorization Act for Fiscal Year 2017 ( P.L. 114-328 ). Production saving initiatives for single-ship buys included use of unit families in construction, pre-outfitting and complex assemblies which move work to a more efficient workspace environment, reduction in the number of superlifts, and facility investments which improve the shipbuilder trade effectiveness. A two-ship buy assumes four years between ship deliveries which allows more schedule overlap, and therefore more shop-level and assembly-level production efficiencies than two single-ship buys.", "Procuring two ships to a single technical baseline reduces the requirement for engineering labor hours when compared to single-ship estimates. The ability to rollover production support engineering and planning products maximizes savings while recognizing the minimum amount of engineering labor necessary to address obsolescence and regulatory changes on CVN 81. The two-ship agreement with the shipbuilder achieves a 55 percent reduction in construction support engineering hours on CVN 81 and greater than 18 percent reduction in production support and planning hours compared to single ship procurements.", "The two-ship procurement strategy allows for serial production opportunities that promote tangible learning and reduced shop and machine set-up times. It allows for efficient use of production facilities, re-use of production jigs and fixtures, and level loading of key trades. The continuity of work allows for reductions in supervision, services and support costs. The result of these efficiencies is a production man-hours step down that is equivalent to an 82 percent learning curve since CVN 79.", "Key to achieving these production efficiencies is Integrated Digital Shipbuilding (iDS). The Navy's Research, Development, Test, and Evaluation (RDT&E) and the shipbuilder's investment in iDS, totaling $631 million, will reduce the amount of production effort required to build FORD Class carriers. The two-ship buy will accelerate the benefits of this approach. The ability to immediately use the capability on CVN 81 would lead to a further reduction in touch labor and services in affected value streams. The two-ship agreement with the shipbuilder represents a production man-hours reduction of over seven percent based on iDS efficiencies. Contractual authority for two ships allows the shipbuilder to maximize economic order quantity material procurement. This allows more efficient ordering and scheduling of material deliveries and will promote efficiencies through earlier ordering, single negotiations, vendor quotes, and cross program purchase orders. These efficiencies are expected to reduce material costs by about six percent more when compared to single-ship estimates. Improved material management and flexibility will prevent costly production delays. Furthermore, this provides stability within the nuclear industrial base, de-risking the COLUMBIA and VIRGINIA Class programs. The two-ship buy would provide economic stability to approximately 130,000 workers across 46 States within the industrial base.", "Change order requirements are likewise reduced as Government Furnished Equipment (GFE) providers will employ planning and procurement strategies based on the common technical baseline that minimize configuration changes that must be incorporated on the follow ship. Change order budget allocations have been reduced over 25 percent based on two-ship strategies.", "In addition to the discrete savings achieved with the shipbuilder, the two-ship procurement authority provides our partner GFE providers a similar opportunity to negotiate economic order quantity savings and achieve cross program savings when compared to single-ship estimates.", "An April 16, 2018, press report stated the following:", "If the Navy decides to buy aircraft carriers CVN-80 and 81 together, Newport News Shipbuilding will be able to maintain a steady workload that supports between 23,000 and 25,000 workers at the Virginia yard for the next decade or so, the shipyard president told reporters last week.", "Part of the appeal of buying the two carriers together is that the Navy would also buy them a bit closer together: the ships would be centered about three-and-a-half or four years apart, instead of the five-year centers for recent carrier acquisition, Newport News Shipbuilding President Jennifer Boykin told reporters.", "Boykin said the closer ship construction centers would allow her to avoid a \"labor valley\" where the workforce levels would dip down after one ship and then have to come back up, which is disruptive for employees and costly for the company.", "If this two-carrier buy goes through, the company would avoid the labor valley altogether and ensure stability in its workforce, Boykin said in a company media briefing at the Navy League's Sea Air Space 2018 symposium. That workforce stability contributes to an expected $1.6 billion in savings on the two-carrier buy from Newport News Shipbuilding's portion of the work alone, not including government-furnished equipment....", "Boykin said four main things contribute to the expected $1.6 billion in savings from the two-carrier buy. First, \"if you don't have the workforce valley, there's a labor efficiency that represents savings.\"", "Second, \"if you buy two at once, my engineering team doesn't have to produce two technical baselines, two sets of technical products; they only have to produce one, and the applicability is to both, so there's savings there. When we come through the planning, the build plan of how we plan to build the ship, the planning organization only has to put out one plan and the applicability is to both, so there's savings there.\"", "The third savings is a value of money over time issue, she said, and fourth is economic order quantity savings throughout the entire supply chain.", "Discussions of the option of using a block buy contract for procuring carriers have focused on using it to procure two carriers in part because carriers have been procured on five-year centers, meaning that two carriers could be included in a block-buy contract spanning six years\u2014the same number of years originally planned for the two block buy contracts that were used to procure mnay of the Navy's Littoral Combat Ships.", "It can be noted, however, that there is no statutory limit on the number of years that a block buy contract can cover, and that the LCS block buy contracts were subsequently amended to cover LCSs procured in a seventh year. This, and the possibility of procuring carriers on 3- or 3.5-year centers, raises the possibility of using a block buy contract to procure three aircraft carriers: For example, if procurement of aircraft carriers were shifted to 3- or 3.5-year centers, a block buy contract for procuring CVN-80, CVN-81, and CVN-82 could span seven years (with the first ship procured in FY2018, and the third ship procured in FY2024) or eight years (with the first ship procured in FY2018 and the third ship procured in FY2025).", "The percentage cost reduction possible under a three-ship block buy contract could be greater than that possible under a two-ship block buy contract, but the offsetting issue of reducing congressional flexibility for changing aircraft carrier procurement plans in coming years in response to changing strategic or budgetary circumstances could also be greater.", "Appendix C. Cost Growth and Managing Costs Within Program Cost Caps", "This appendix presents additional background information on cost growth in the CVN-78 program, Navy efforts to stem that growth, and Navy efforts to manage costs so as to stay within the program's cost caps.", "October 2018 CBO Report", "An October 2018 CBO report on the potential cost of the Navy's 30-year shipbuilding plan states the following regarding the CVN-78 program:", "The Navy's current estimate of the total cost of the Gerald R. Ford , the lead ship of the CVN-78 class, is $13.0 billion in nominal dollars appropriated over the period from 2001 to 2018, an amount that is equal to the cost cap set in law. CBO used the Navy's inflation index for naval shipbuilding to convert that figure to $15.5 billion in 2018 dollars, or 23 percent more than the corresponding estimate when the ship was first authorized in 2008. Neither the Navy's nor CBO's estimate includes the $5 billion in research and development costs that apply to the entire class.", "Because construction of the lead ship is finished, CBO used the Navy's estimate for that ship to estimate the cost of successive ships in the class. But not all of the cost risk has been eliminated; in particular, the ship's power systems and advanced arresting gear (the system used to recover fixed-wing aircraft landing on the ship) are not yet working properly. It is not clear how much those problems will cost to fix, but current Navy estimates suggest that it will be several tens of millions of dollars or more. CBO does not have enough information to estimate those final repair costs.", "The next carrier after the CVN-78 will be the CVN-79, the John F. Kennedy . Funding for that ship began in 2007, the Congress officially authorized its construction in 2013, and the planned appropriations for it were completed in 2018. The shipbuilder expects to complete construction of the CVN-79 in 2024 and deploy it for the first time in 2026. The Navy estimates that the ship will cost $11.3 billion in nominal dollars (or $11.6 billion in 2018 dollars). The Navy's selected acquisition report on the CVN-79 states that \"the Navy and shipbuilder have made fundamental changes in the manner in which the CVN 79 will be built to incorporate lessons learned from CVN 78 and eliminate the key contributors to cost performance challenges realized in the construction of CVN 78.\" Nevertheless, the Navy informed CBO that there is a greater than 60 percent chance that the ship's final cost will be more than the current estimate. Although CBO expects the Navy to achieve a considerable cost reduction in the CVN-79 compared with the CVN-78, as is typical with the second ship of a class, CBO's estimate is higher than the Navy's. Specifically, CBO estimates that the ship will cost $11.7 billion in nominal dollars (or $12.0 billion in 2018 dollars), about 4 percent more than the Navy's estimate.", "In 2018, the Congress authorized the third carrier of the class, the Enterprise (CVN-80). Appropriations for that ship began in 2016 and are expected to be complete by 2023. The Navy estimates that the ship will cost $12.6 billion in nominal dollars (or $11.5 billion in 2018 dollars). However, as with CVN-79, the Navy told CBO that there is a greater than 60 percent chance that the ship's final cost will be more than the current estimate. CBO estimates that the ship will cost $13.0 billion in nominal dollars (or $11.8 billion in 2018 dollars), about 3 percent more than the Navy's estimate.", "The Navy estimates an average cost of $12.4 billion (in 2018 dollars) for the 7 carriers (CVN-81 through CVN-87) in the 2019 shipbuilding plan. CBO's estimate is $12.8 billion per ship.... The gap between the estimates has narrowed since the 2017 plan: The Navy's has increased by $500 million per ship, and CBO's has dropped by $200 million per ship. It is not clear why the Navy's estimates increased, but CBO's estimates fell mainly because the agency projects somewhat less growth in real costs of the shipbuilding industry in future years.", "August 2018 Press Report", "An August 17, 2018, press report states the following:", "Huntington Ingalls Industries Inc., the sole U.S. builder of aircraft carriers, continues to fall short of the Navy's demand to cut labor expenses to stay within an $11.39 billion cost cap mandated by Congress on the second in a new class of warships.", "With about 47 percent of construction complete on the USS John F. Kennedy, Navy figures show the contractor isn't yet meeting the goal it negotiated with the service: reducing labor hours by 18 percent from the first carrier, the USS Gerald Ford....", "It took about 49 million hours of labor to build the Ford, according to the U.S. Government Accountability Office. The Navy's goal for the Kennedy is to reduce that to about 40 million hours.", "Huntington Ingalls's performance \"remains stable at approximately 16 percent\" less, William Couch, spokesman for the Naval Sea Systems Command, said in an email. He said \"key production milestones and the ship's preliminary acceptance date remain on track\" and there are \"ample opportunities\" for improvement \"with nearly four years until contract delivery and over 70 percent of assembly work\" remaining on the vessel's superstructure.", "But the Pentagon's naval warfare division, which reports to Ellen Lord, the Defense Department's chief weapons buyer, is less sanguine. It said in a July assessment that Huntington Ingalls \"is unlikely to fully recover the needed 18 percent\" reduction....", "On the effort to meet the 18 percent labor-hour reduction for the Kennedy, the Navy's program manager \"assesses that although difficult, the shipbuilder can still attain\" it, Couch said.", "Beci Brenton, a spokeswoman for Newport News, Virginia-based Huntington Ingalls, said \"we are seeing the benefits associated with significant build strategy changes and incorporation of lessons learned\" from the first vessel.", "Brenton said \"the current production performance\" is 16 percent less than the Ford's estimate at the time of contract award for the second vessel but the reduction is 17 percent when compared with the first vessel's current cost....", "But Shelby Oakley, a director with the GAO who monitors Navy shipbuilding, said \"with so much of the program underway, it is unlikely that the Navy will regain efficiency.\" In later phases of a shipbuilding contract, she said, \"performance typically degrades, not improves.\"", "It's also \"unclear how the lessons learned\" from the first ship \"could help regain efficiency when they are already baked in to the Navy's overly optimistic estimate for the program,\" she said.", "June 2018 Press Report", "A June 19, 2018, press report stated the following:", "Huntington Ingalls Industries Inc. is asking General Electric Co. to compensate it for damage caused by flawed workmanship during installation of propulsion system components on the U.S. Navy's $13 billion aircraft carrier Gerald R. Ford.", "The problem, which forced the most expensive U.S. warship back to port in January, has yet to be fully resolved although the carrier is once again at sea....", "Huntington Ingalls, a shipbuilder based in Newport News, Virginia, \"has notified the original manufacturer of the shipyard's intent to seek compensation,\" Naval Sea Systems Command spokesman William Couch said in an email. Beci Brenton, a spokeswoman for Huntington said, \"We continue to work with appropriate stakeholders to support resolution of this situation.\"", "Perry Bradley, a spokesman for Boston-based GE, said \"we're not going to comment on specifics other than to say\" that \"GE is working closely with\" Huntington's Newport News Shipyard unit and \"the U.S. Navy to resolve the issue.\"...", "The episode in January was the second failure in less than a year with a \"main thrust bearing\" that's part of the carrier's propulsion system. The first occurred in April 2017, during sea trials a month before the vessel's delivery. The ship has been sailing in a shakedown period to test systems and work out bugs. It's now scheduled to be ready for initial combat duty in 2022.", "The Navy's carrier program office said in an assessment that an inspection of the carrier's four main thrust bearings after the January failure revealed \"machining errors\" by GE workers at a Lynn, Massachusetts, facility during the original manufacturing as \"the actual root cause.\"", "The bearing overheated, the Navy said in a March 8 memo to Congress, and \"after securing the equipment to prevent damage, the ship safely returned to port.\" A failure review board is identifying \"modifications required to preclude recurrence,\" it said. The bearing is one of four that transfers thrust from the ship's four propeller shafts.", "\"The costs associated with repairing\" the thrust bearings \"are currently being assessed\" and \"this will include recovery of costs from the manufacturer of the Main Reduction Gear, General Electric (Lynn), as appropriate,\" the Navy said in the memo.", "Couch said the Navy doesn't expect similar propulsion problems with the next vessel in the class, the John F. Kennedy, because a different manufacturer made that carrier's propulsion train components.", "\"Any propulsion train deficiencies identified\" with the Ford \"will be corrected and implemented\" in \"future ships of the class as necessary,\" he said.", "May 2018 Press Report", "A May 11, 2018, press report stated the following:", "The Navy's costliest vessel ever just got pricer, breaching a $12.9 billion cap set by Congress by $120 million, the service told lawmakers this week.", "The extra money for the U.S.S. Gerald R. Ford built by Huntington Ingalls Industries Inc. is needed to replace faulty propulsion components damaged in a January failure, extend the vessel's post-delivery repair phase to 12 months from the original eight months and correct deficiencies with the \"Advanced Weapons Elevators\" used to move munitions from deep in the ship to the deck.", "The elevators on the ship, designated CVN 78, need to be fixed \"to preclude any effect on the safety of the ship and personnel,\" the Naval Sea Systems Command said in a statement to Bloomberg News on Friday. \"Once the adjustment is executed, the cost for CVN 78 will stand at $13.027\" billion, the Navy said.", "In addition to informing Congress that the spending lid has been breached, the Navy will have to let lawmakers know how it will shift funds to make up the difference.", "Navy officials didn't disclose the propulsion failure or elevator problems during budget hearings before Congress in recent weeks, and House and Senate lawmakers didn't ask about it....", "The Ford's propulsion system and elevator flaws are separate from reliability issues on its troubled aircraft launch and recovery systems.", "After its delivery last May, the ship operated for 70 days and completed 747 shipboard aircraft launches and recoveries, exceeding the goal of about 400, the Navy said.", "None of the 11 weapons elevators are operational but at least two are being used for testing \"to identify many of the remaining developmental issues for this first-of-class system,\" the Navy has said. The command said all 11 elevators \"should have been complete and delivered with the ship delivery\" in May 2017.", "April 2018 Press Report", "An April 16, 2018, press report stated the following:", "Huntington Ingalls Industries' Newport News Shipbuilding President Jennifer Boykin provided an update on the various stages of construction on several major Navy shipbuilding programs during the Navy League's Sea Air Space Expo last week.", "The future USS John F. Kennedy (CVN-79) is about 43 percent complete, with launch planned for the fourth quarter of 2019 and delivery set for 2022. Boykin said the company has achieved about 75 percent of the ship erected and they are on track for an 18 percent man-hour budget reduction.", "Boykin provided these updates during a press briefing at the conference.", "Boykin revealed that undocking of CVN-79 in the fourth quarter of 2019 will occur three months earlier than originally planned.", "September 2017 Press Report", "A September 26, 2017, press report states the following:", "Huntington Ingalls Industries Inc. is falling short of a U.S. Navy goal to reduce hours of labor on the second ship in the new Ford class of aircraft carriers in a drive to reduce costs, according to service documents.", "With 34 percent of construction complete on the USS John F. Kennedy, Huntington Ingalls estimates it will be able to reduce labor hours by 16 percent from the hours needed to construct the first vessel, the Gerald R. Ford. That's less than the 17 percent reduction reported at the end of last year and the 18 percent goal the Navy negotiated in the primary construction contract for the carrier.", "The \"recent degradation in cost performance stems largely from the delayed availability of certain categories of material,\" such as pipe fittings, controllers, actuators and valves, according to the Navy's annual report on the program and updated figures obtained by Bloomberg News....", "\"We acknowledge that the cost reduction target for CVN-79,\" relative to the first carrier, \"is challenging,\" Huntington Ingalls spokeswoman Beci Brenton said in an email, referring to the Kennedy by its Navy designation. \"While it is still early in the ship's schedule, we are seeing positive results from\" new initiatives to keep costs in check, she said....", "Navy Secretary Richard Spencer told reporters last week that he will stay involved in monitoring the CVN-79's construction trends. \"This is my personal approach\u2014the CEO has to be involved.\"", "A close watch is required \"because there are so many moving parts and so many opportunities to do things in a more efficient manner,\" Spencer said.", "The Navy has been working with the contractors \"to mitigate technical risks and impacts of late material,\" Navy spokesman Victor Chen in an email. \"The overall volume of late material items and associated impact to construction performance is declining. The Navy has hired third-party experts who are working collaboratively with the shipbuilder to identify manufacturing opportunities for efficiency gains\" and to assist in implementing improvements....", "The 18 percent reduction in labor hours was \"quite optimistic\" from the start, Michele Mackin, a Government Accountability Office director who oversees its shipbuilding assessments, said in an email. \"Even based on that assumption, the $11.4 billion cost cap was unlikely to be met,\" she said. \"If those labor-hour efficiencies are in fact not materializing, costs will go higher.", "Also, \"with the ship being over 30 percent complete, it's unlikely the shipbuilder can get back enough efficiencies to further reduce labor hours\u2014the more complicated work is yet to come,\" she said.", "June 2017 Navy Testimony", "At a June 15, 2017, hearing before the Senate Armed Services Committee on the Department of the Navy's proposed FY2018 budget, the following exchange occurred:", "SENATOR JOHN MCCAIN (CHAIRMAN) (continuing): ", "Secretary Stackley, the Navy broached a cost cap for CVN-78. Do you believe that it has?", "SEAN STACKLEY, ACTING SECRETARY OF THE NAVY: ", "Sir, right now our estimate for CVN-78, we're trying to hold it within the $12.887 billion number that was established several years ago. We have included a $20 million [procurement funding] request in this budget pending our determination regarding repairs that required for the...", "MCCAIN: ", "Is that a breach of Nunn-McCurdy?", "STACKLEY: ", "Not at this point in time, sir, we're continuing to evaluate whether that additional funding will be required. We're doing everything we can to stay within the existing cap and we'll keep Congress informed as we complete our post-delivery assessment.", "MCCAIN: ", "Problem is we haven't been informed. So either you bust the cap and breach Nunn-McCurdy\u2014Nunn-McCurdy or you notify us. You haven't done either one.", "STACKLEY: ", "Sir, we've been submitting monthly reports regarding the carrier, we've alerted the concern regarding the repairs that are being required for the motor turbine generator set and we've acknowledged the risk associated with those repairs. However, what we're trying to do is not incur those costs, avoid cost by other means, and as of right now we're not ready to trip that cost cap.", "MCCAIN: ", "Well, it's either not allowable or it's allowable. It's not allowable, then you take a certain course of action. If it's allowable then you're required to notify Congress. You have done neither.", "STACKLEY: ", "If we need to incur those costs, they will be allowable costs. We're trying to avoid that at this stage of time, sir.", "MCCAIN: ", "I agree, but we were supposed to be notified\u2014OK. I can tell you that you are either in violation of Nunn-McCurdy or you are in violation of the requirement that we be notified. You have done neither. There's two scenarios.", "STACKLEY: ", "Sir, we have not broached the cost cap. If it becomes apparent that we'll need to go above the cost cap, we will notify Congress within\u2014within the terms that you all have established.", "MCCAIN: ", "OK. Well, I'll get it to you in writing but you still haven't answered the question because when there's a $20 million cost overrun, it's either allowable and then we have to be notified in one way. If it's not allowable, Nunn-McCurdy is\u2014is reached. But anyway, maybe you can give us a more satisfactory explanation in writing, Mr. Secretary.", "June 2017 GAO Report", "A June 2017 GAO report states the following:", "The cost estimate for the second Ford-Class aircraft carrier, CVN 79, is not reliable and does not address lessons learned from the performance of the lead ship, CVN 78. As a result, the estimate does not demonstrate that the program can meet its $11.4 billion cost cap. Cost growth for the lead ship was driven by challenges with technology development, design, and construction, compounded by an optimistic budget estimate. Instead of learning from the mistakes of CVN 78, the Navy developed an estimate for CVN 79 that assumes a reduction in labor hours needed to construct the ship that is unprecedented in the past 50 years of aircraft carrier construction....", "After developing the program estimate, the Navy negotiated 18 percent fewer labor hours for CVN 79 than were required for CVN 78. CVN 79's estimate is optimistic compared to the labor hour reductions calculated in independent cost reviews conducted in 2015 by the Naval Center for Cost Analysis and the Office of Cost Assessment and Program Evaluation. Navy analysis shows that the CVN 79 cost estimate may not sufficiently account for program risks, with the current budget likely insufficient to complete ship construction.", "The Navy's current reporting mechanisms, such as budget requests and annual acquisition reports to Congress, provide limited insight into the overall Ford Class program and individual ship costs. For example, the program requests funding for each ship before that ship obtains an independent cost estimate. During an 11-year period prior to 2015, no independent cost estimate was conducted for any of the Ford class ships; however, the program received over $15 billion in funding. In addition, the program's Selected Acquisition Reports (SAR)\u2014annual cost, status, and performance reports to Congress\u2014provide only aggregate program cost for all three ships currently in the class, a practice that limits transparency into individual ship costs. As a result, Congress has diminished ability to oversee one of the most expensive programs in the defense portfolio.", "February 2016 Navy Testimony", "The Navy testified in 2016 that", "The Navy is committed to delivering the lead ship of the class, Gerald R Ford (CVN 78) within the $12.887 billion congressional cost cap. Sustained efforts to identify cost reductions and drive improved cost and schedule performance on this first-of-class aircraft carrier have resulted in highly stable cost performance since 2011. Based on lessons learned on CVN 78, the approach to carrier construction has undergone an extensive affordability review and the Navy and the shipbuilder have made significant changes on CVN 79 to reduce the cost to build the ship. The benefits of these changes in build strategy and resolution of first-of-class impacts experienced on CVN 78 are evident in early production labor metrics on CVN 79. These efforts are ongoing and additional process improvements continue to be identified.", "Alongside the Navy's efforts to reduce the cost to build CVN 79, the FY 2016 National Defense Authorization Act reduced the cost cap for follow ships in the CVN 78 class from $11,498 million to $11,398 million. To this end, the Navy has further emphasized stability in requirements, design, schedule, and budget, in order to drive further improvement to CVN 79 cost. The FY 2017 President's Budget requests funding for the most efficient build strategy for this ship and we look for Congress' full support of this request to enable CVN 79 procurement at the lowest possible cost....", "... The Navy will deliver the CVN 79 within the cost cap using a two-phased strategy wherein select ship systems and compartments that are more efficiently completed at a later stage of construction - to avoid obsolescence or to leverage competition or the use of experienced installation teams - will be scheduled for completion in the ship's second phase of production and test. Enterprise (CVN 80) began construction planning and long lead time material procurement in January 2016 and construction is scheduled to begin in 2018. The FY 2017 President's Budget request re-phases CVN 80 funding to support a more efficient production profile, critical to performance, below the cost cap. CVN 80 planning and construction will continue to leverage class lessons learned to achieve cost and risk reduction, including efforts to accelerate production work to earlier phases of construction, where work is more cost efficient.", "October 2015 Senate Armed Services Committee Hearing", "Cost growth and other issues in the CVN-78 program were reviewed at an October 1, 2015, hearing before the Senate Armed Services Committee. Below are excerpts from the prepared statements of the witnesses at the hearing.", "OSD ASD Testimony", "The prepared statement of the Assistant Secretary of Defense (Acquisition) within the Office of the Secretary of Defense (OSD) states the following in part:", "By 2000, the CVN(X) Acquisition Strategy that had been proposed by the Navy was an evolutionary, three-step development of the capabilities planned for the CVN. This evolutionary strategy intending to mature technology and align risk with affordability originally involved using the last ship of the CVN 68 NIMITZ Class, USS GEORGE H. W. BUSH (CVN 77), as the starting point for insertion of some near term technology improvements including information network technology and the new Dual Band Radar (DBR) system from the DD(X) (now DDG 1000) program, to create an integrated warfare system that combined the ship's combat system and air wing mission planning functions.", "However, the then incoming Secretary of Defense Donald Rumsfeld in 2002 directed re-examination of the CVN program, among others, to reduce the overall spend of the department and increase the speed of delivery to the warfighters. As a result of the SECDEF's direction, the Navy proposed to remove the evolutionary approach and included a new and enlarged flight deck, an increased allowance for future technologies (including electric weapons), and an additional manpower reduction of 500 to 800 fewer sailors to operate. On December 12, 2002, a Program Decision Memorandum approved by then Deputy Secretary of Defense Paul Wolfowitz codified this Navy proposal and gave this direction back to the DOD enterprise. The ship was renamed the CVN-21 to highlight these changes. By Milestone B in April 2004, the Navy had evaluated the technologies intended for three ships, removed some of them, and consolidated the remaining ones into a single step of capability improvement on the lead ship. The new plan acknowledged technological, cost, and schedule challenges were being put on a single ship, but assessed this was achievable. The Acting USD AT&L (Michael Wynne) at that milestone also directed the Navy to use a hybrid of the Service Cost Position and Independent Cost Estimate (ICE) to baseline the program funding in lieu of the ICE, (although one can easily argue even the ICE was optimistic given these imposed circumstances).", "By 2004, DOD and Congressional leadership had lost confidence in the acquisition system, and Deputy Secretary of Defense Gordon England established the Defense Acquisition Performance Assessment (DAPA) panel to conduct a sweeping and integrated assessment of \"every aspect\" of acquisition. The result was the discovery that the Industrial Base had consolidated, that excessive oversight and complex acquisition processes were cost and schedule drivers, and a focus on requirements stability was key to containing costs. From this, a review of the requirements of the CVN resulted in a revised and solidified \"single ship\" Operational Requirements Document (ORD) for the FORD Class as defined today, with the CVN 78 as lead ship.", "On the heels of a delay because of the budgetary constraints in 2006, the start of the construction of CVN 78 was delayed until 2008, but the schedule for delivery was held constant, further compounding risks and costs. The Navy's testimony covers these technical and schedule risks and concurrency challenges well.", "By 2009, this Committee had issued a floor statement in support of the Weapon Systems Acquisition Reform Act (WSARA). Congress was now united in its pursuit of acquisition reform and, in concert, USD AT&L re-issued and updated the Department of Defense's acquisition instruction (DoDI 5000.2) in 2008. WSARA included strengthening of the 'Nunn-McCurdy\" process with requires DOD to report to Congress when cost growth on a major program breaches a critical cost growth threshold. This legislation required a root-cause assessment of the program and assumed program termination within 60 days of notification unless DOD certified in writing that the program remained essential to national security.", "WSARA had real impact on the CVN 78, as by 2008 and 2009 the results of all the previous decisions were instantiated in growth of cost and schedule. Then USD AT&L John Young required the Navy to provide a list of descoping efforts and directed the Navy to have an off-ramp back to steam catapults if the Electromagnetic Aircraft Launching System (EMALS) remained a problem for the program. He also directed an independent review of all of the CVN 78 technologies by a Defense Support Team (DST). Prior to the DST, the Navy had chartered a Program Assessment Review (PAR) with USD (AT&L) participation of EMALS/Advanced Arresting Gear (AAG) versus steam. One of the key PAR findings was converting the EMALS and AAG production contracts to firm, fixed price contracts to cap cost growth and imposed negative incentives for late delivery.", "The Dual Band Radar (DBR) cost and risk growth was a decision by-product of the DDG 1000 program Nunn-McCurdy critical unit cost breach in 2010. Faced with a need to reduce cost on the DDG 1000 program and the resultant curtailment of the program, the expectation of development costs being borne by the DDG 1000 program was no longer the case and all of the costs associated with the S-band element development and a higher share of the X-band element then had to be supported by the CVN 78 program.", "The design problems encountered with AAG development have had the most deleterious effects on CVN 78 construction of any of the three major advanced technologies including EMALS and DBR. Our view of AAG is that these engineering design problems are now in the past and although delivery of several critical components have been delayed, the system will achieve its needed capabilities before undergoing final operational testing prior to deployment of the ship. Again, reliability growth is a concern, but this cannot be improved until a fully functional system is installed and operating at the Lakehurst, New Jersey land based test site, and on board CVN 78.", "With the 2010 introduction by then USD AT&L Ashton Carter (now in its third iteration by under USD AT&L Frank Kendall) of the continuous process improvement initiative that was founded in best business practices and WSARA called \"Better Buying Power,\" the CVN underwent affordability, \"Should Cost,\" and requirements assessment. Navy's use of the \"Gate\" process has stabilized the cost growth and reset good business practices. However, there is still much to do. We are in the testing phase of program execution prior to deployment and we had been concerned about the timing of the Full Ship Shock Trial (FSST). After balancing the operational and technical risks, the Department decided to execute FSST on CVN 78 prior to deployment.", "EMALS and AAG are also a concern with regard to final operational testing stemming from the development difficulties that each experienced. The Navy still needs to complete a significant amount of land-based testing to enable certification of the systems to launch and recover the full range of aircraft that it is required to operate under both normal and emergency conditions. This land-based testing is planned to complete before the final at-sea operational testing for these systems begins....", "USD AT&L continues to work with Navy to tailor the program and ensure appropriate oversight at both the Navy Staff level as well as OSD. Our review of the Navy's plan for maintaining control of the cost for CVN 79 included an understanding of the application of lessons learned from the construction of CVN 78 along with the application of a more efficient construction plan for the ship including introduction of competition where possible. We have established an excellent relationship with the Navy to work together to change process and policies that have impacted the ability of the program to succeed, to include revitalizing the acquisition workforce and their skills.", "We are confident in the Navy's plan for CVN 79 and CVN 80 and, as such, Under Secretary Kendall recently authorized the Navy to enter into the detail design and construction phase for CVN 79 and to enter into advanced procurement for long lead time materials for CVN 80 construction. OSD and the Navy are committed to delivering CVN 79 within the limits of the cost cap legislated for this ship.", "OSD DOT&E Testimony", "The prepared statement of the Director, Operational Test & Evaluation (DOT&E), within OSD states the following in part:", "The Navy intends to deliver CVN 78 early in calendar year 2016, and to begin initial operational test and evaluation (IOT&E) in late calendar year 2017. However, the Navy is in the process of developing a new schedule, so some dates may change. Based on the current schedule, between now and the beginning of IOT&E, the CVN 78 program is proceeding on an aggressive schedule to finish development, testing, troubleshooting, and correction of deficiencies for a number of new, complex systems critical to the warfighting capabilities of the ship. Low or unknown reliability and performance of the Advanced Arresting Gear (AAG), the Electromagnetic Aircraft Launch System (EMALS), the Dual Band Radar (DBR), and the Advanced Weapons Elevators (AWE) are significant risks to a successful IOT&E and first deployment, as well as to achieving the life-cycle cost reductions the Navy has estimated will accrue for the Ford-class carriers. The maturity of these systems is generally not at the level that would be desired at this stage in the program; for example, the CVN 78 test program is revealing problems with the DBR typical of discoveries in early developmental testing. Nonetheless, AAG, EMALS, DBR, and AWE equipment is being installed on CVN 78, and in some cases, is undergoing shipboard checkout. Consequently, any significant issues that testing discovers before CVN 78's schedule-driven IOT&E and deployment will be difficult, or perhaps impossible, to address.", "Resolving the uncertainties in the reliability and performance of these systems is critical to CVN 78's primary function of conducting combat operations. CVN 78 has design features intended to enhance its ability to launch, recover, and service aircraft. EMALS and AAG are key systems planned to provide new capabilities for launching and recovering aircraft that are heavier and lighter than typically operated on Nimitz-class carriers. DBR is intended to enhance radar coverage on CVN 78 in support of air traffic control and ship self-defense. DBR is planned to reduce some of the known sensor limitations on Nimitz-class carriers that utilize legacy radars. The data currently available to my office indicate EMALS is unlikely to achieve the Navy's reliability requirements. (The Navy indicates EMALS reliability is above its current growth curve, which is true; however, that growth curve was revised in 2013, based on poor demonstrated performance, to achieve EMALS reliability on CVN 78 a factor of 15 below the Navy's goal.) I have no current data regarding DBR or AWE reliability, and data regarding the reliability of the re-designed AAG are also not available. (Poor AAG reliability in developmental testing led to the need to re-design components of that system.) In addition, performance problems with these systems are continuing to be discovered. If the current schedule for conducting the ship's IOT&E and first deployment remain unchanged, reliability and performance shortfalls could degrade CVN 78's ability to conduct flight operations.", "Due to known problems with current aircraft carrier combat systems, there is significant risk CVN 78 will not achieve its self-defense requirements. Although the CVN 78 design incorporates several combat system improvements relative to the Nimitz-class, these improvements (if achieved) are unlikely to correct all of the known shortfalls. Testing on other ships with similar combat systems has highlighted deficiencies in weapon employment timelines, sensor coverage, system track management, and deficiencies with the recommended engagement tactics. Most of these limitations are likely to affect CVN 78 and I continue to view this as a significant risk to the CVN 78's ability to defend itself against attacks by the challenging anti-ship cruise missile and other threats proliferating worldwide.", "The Navy's previous decision to renege on its original commitment to conduct the Full Ship Shock Trial (FSST) on CVN 78 before her first deployment would have put CVN 78 at risk in combat operations. This decision was reversed in August 2015 by the Deputy Secretary of Defense. Historically, FSSTs for new ship classes have identified for the first time numerous mission-critical failures the Navy had to address to ensure the new ships were survivable in combat. We can expect that CVN 78's FSST results will have significant and substantial implications on future carriers in the Ford-class and any subsequent new class of carriers.", "I also have concerns with manning and berthing on CVN 78. The Navy designed CVN 78 to have reduced manning to reduce life-cycle costs, but Navy analyses of manning on CVN 78 have identified problems in manning and berthing. These problems are similar to those seen on other recent ship classes such as DDG 1000 and the Littoral Combat Ship (LCS)....", "There are significant risks to the successful completion of the CVN 78 IOT&E and the ship's subsequent deployment due to known performance problems and the low or unknown reliability of key systems. For AAG, EMALS, AWE and DBR, systems that are essential to the primary missions of the ship, these problems, if uncorrected, are likely to affect CVN 78's ability to conduct effective flight operations and to defend itself in combat.", "The CVN 78 test schedule leaves little or no time to fix problems discovered in developmental testing before IOT&E begins that could cause program delays. In the current program schedule, major developmental test events overlap IOT&E. This overlap increases the likelihood problems will be discovered during CVN 78's IOT&E, with the attendant risk to the successful completion of that testing and to the ship's first deployment.", "The inevitable lessons we will learn from the CVN 78 FSST will have significant implications for CVN 78 combat operations, as well as for the construction of future carriers incorporating the ship's advanced systems; therefore, the FSST should be conducted on CVN 78 as soon as it is feasible to do so.", "Navy Testimony", "The prepared statement of the Navy witnesses at the hearing states the following in part:", "In June 2000, the Department of Defense (DOD) approved a three-ship evolutionary acquisition approach starting with the last NIMITZ Class carrier (CVN 77) and the next two carriers CVNX1 (later CVN 78) and CVNX2 (later CVN 79). This approach recognized the significant risk of concurrently developing and integrating new technologies into a new ship design incrementally as follows:", "\u2022 The design focus for the evolutionary CVN 77 was to combine information network technology with a new suite of multifunction radars from the DDG 1000 program to transform the ship's combat systems and the air wing's mission planning process into an integrated warfare system.", "\u2022 The design focus for the evolutionary CVNX1 (future CVN 78) was a new Hull, Mechanical and Electrical (HM&E) architecture within a NIMITZ Class hull that included a new reactor plant design, increased electrical generating capacity, new zonal electrical distribution, and new electrical systems to replace steam auxiliaries under a redesigned flight deck employing new Electromagnetic Aircraft Launch System (EMALS) catapults together with aircraft ordnance and fueling \"pit-stops\". Design goals for achieving reduced manning and improved maintainability were also defined.", "\u2022 The design focus for the evolutionary CVNX2 (future CVN 79) was a potential \"clean-sheet\" design to \"open the aperture\" for capturing new but immature technologies such as the Advanced Arresting Gear (AAG) and Advanced Weapons Elevators (AWE) that would be ready in time for the third ship in the series; and thereby permit the experience gained from design and construction of the first two ships (CVN 77 and CVN 78) to be applied to the third ship (CVN 79).", "Early in the last decade, however, a significant push was made within DOD for a more transformational approach to delivering warfighting capability. As a result, in 2002, DOD altered the program acquisition strategy by transitioning to the new aircraft carrier class in a single transformational leap vice an incremental three ship strategy. Under the revised strategy, CVN 77 reverted back to a \"modified-repeat\" NIMITZ Class design to minimize risk and construction costs, while delaying the integrated warfare system to CVN 78. Further, due to budget constraints, CVN 78 would start construction a year later (in 2007) with a NIMITZ Class hull form but would entail a major re-design to accommodate all the new technologies from the three ship evolutionary technology insertion plan.", "This leap ahead in a single ship was captured in a revised Operational Requirements Document (ORD) in 2004, which defined a new baseline that is the FORD Class today, with CVN 78 as the lead ship. The program entered system development and demonstration, containing the shift to a single ship acquisition strategy. The start of CVN 78 construction was then delayed by an additional year until 2008 due to budget constraints. As a result, the traditional serial evolution of technology development, ship concept design, detail design, and construction \u2013 including a total of 23 developmental systems incorporating new technologies originally planned across CVN 77, CVNX1, CVNX2 - were compressed and overlapped within the program baseline for the CVN 78. Today, the Navy is confronting the impacts of this compression and concurrency, as well as changes to assumptions made in the program planning more than a decade ago....", "Given the lengthy design, development, and build span associated with major warships, there is a certain amount of overlap or concurrency that occurs between the development of new systems to be delivered with the first ship, the design information for those new systems, and actual construction. Since this overlap poses cost and schedule risk for the lead ship of the class, program management activities are directed at mitigating this overlap to the maximum extent practicable.", "In the case of the FORD Class, the incorporation of 23 developmental systems at various levels of technical maturity (including EMALS, AAG, DBR, AWE, new propulsion plant, integrated control systems) significantly compounded the inherent challenges associated with accomplishing the first new aircraft carrier design in 40-years. The cumulative impact of this high degree of concurrency significantly exceeded the risk attributed to any single new system or risk issue and ultimately manifested itself in terms of delay and cost growth in each element of program execution; development, design, material procurement (government and contractor), and construction....", "Shipbuilder actions to resolve first-of-class issues retired much of the schedule risks to launch, but at an unstable cost. First-of-class construction and material delays led the Navy to revise the launch date in March 2013 from July 2013 to November 2013. Nevertheless, the four-month delay in launch allowed increased outfitting and ship construction that were most economically done prior to ship launch, such as completion of blasting and coating operations for all tanks and voids, installation of the six DBR arrays, and increased installations of cable piping, ventilation, electrical boxes, bulkheads and equipment foundations. As a result, CVN 78 launched at 70 percent complete and 77,000 tons displacement \u2013 the highest levels yet achieved in aircraft carrier construction. This high state of completion at launch enabled improved outfitting, compartment completion, an efficient transition into the shipboard test program, and the on-time completion of key milestones such as crew move aboard.", "With the advent of the shipboard test program, first time energization and grooming of new systems have required more time than originally planned. As a result, the Navy expects the sea trial schedule to be delayed about six to eight weeks. The exact impact on ship delivery will be determined based on the results of these trials. The Navy expects no schedule delays to CVN 78 operational testing and deployability due to the sea trials delay and is managing schedule delays within the $12.887 billion cost cap.", "Additionally, at delivery, AAG will not have completed its shipboard test program. The program has not been able to fully mitigate the effect of a two-year delay in AAG equipment deliveries to the ship. All AAG equipment has been delivered to the ship and will be fully installed on CVN 78 at delivery. The AAG shipboard test and certification program will complete in time to support aircraft launch and recovery operations in summer 2016....", "The Navy, in coordination with the shipbuilder and major component providers, implemented a series of actions and initiatives in the management and oversight of CVN 78 that crossed the full span of contracting, design, material procurement, GFE, production planning, production management and oversight. The Secretary of the Navy directed a detailed review of the CVN 78 program build plan to improve end-to-end aircraft carrier design, material procurement, production planning, build and test, the results of which are providing benefit across all carriers. These corrective measures include:", "\u2022 CVN 78 design was converted from a 'level of effort, fixed fee' contract to a completion contract with a firm target and incentive fee. Shipbuilder cost performance has been on-target or better since this contract change.", "\u2022 CVN 78 construction fee was reduced, consistent with contract provisions. However, the shipbuilder remains incentivized by the contract shareline to improve upon current cost performance.", "\u2022 Contract design changes are under strict control; authorized only for safety, damage control, and mission-degrading deficiencies.", "\u2022 Following a detailed \"Nunn-McCurdy-like\" review in 2008-2009, the Navy converted the EMALS and AAG production contract to a firm, fixed price contract, capping cost growth to each system.", "\u2022 In 2011, Naval Sea Systems Command completed a review of carrier specifications with the shipbuilder, removing or improving upon overly burdensome or unneeded specifications that impose unnecessary cost on the program. Periodic reviews continue.", "Much of the impact to cost performance was attributable to shipbuilder and government material cost overruns. The Navy and shipbuilder have made significant improvements upon material ordering and delivery to the shipyard to mitigate the significant impact of material delays on production performance.", "These actions include:", "\u2022 The Navy and shipbuilder instituted optimal material procurement strategies and best practices (structuring procurements to achieve quantity discounts, dual-sourcing to improve schedule performance and leveraging competitive opportunities) from outside supply chain management experts.", "\u2022 The shipbuilder assigned engineering and material sourcing personnel to each of their key vendors to expedite component qualifications and delivery to the shipyard.", "\u2022 The shipbuilder inventoried all excess material procured on CVN 78 for transfer to CVN 79.", "\u2022 The Program Executive Officer (Carriers) has conducted quarterly Flag-level GFE summits to drive cost reduction opportunities and ensure on-time delivery of required equipment and design information to the shipbuilder.", "The CVN 78 build plan, consistent with the NIMITZ Class, had focused foremost on completion of structural and critical path work to support launching the ship on-schedule. Achieving the program's cost improvement targets required that CVN 78 increase its level of completion at launch, from 60 percent to 70 percent. To achieve this and drive greater focus on system completion:", "\u2022 The Navy fostered a collaborative build process review by the shipbuilder with other Tier 1 private shipyards in order to benchmark its performance and identify fundamental changes that are yielding marked improvement.", "\u2022 The shipbuilder established specific launch metrics by system and increased staffing for waterfront engineering and material expediters to support meeting those metrics. This ultimately delayed launch, but drove up pre-outfitting to the highest levels for CVN new construction which has helped stabilize cost and improve test program and compartment completion performance relative to CVN 77.", "\u2022 The shipbuilder linked all of these processes within a detailed integrated master schedule that has provided greater visibility to performance and greater ability to control cost and schedule performance across the shipbuilding disciplines.", "These initiatives, which summarize a more detailed list of actions being implemented and tracked as a result of the end-to-end review, were accompanied by important management changes.", "\u2022 In 2011, the Navy assigned a second tour Flag Officer with considerable carrier operations, construction, and program management experience as the new Program Executive Officer (PEO).", "\u2022 The new PEO established a separate Program Office, PMS 379, to focus exclusively on CVN 79 and CVN 80, which enables the lead ship Program Office, PMS 378, to focus on cost control, schedule performance and the delivery of CVN 78.", "\u2022 In 2012, the shipbuilder assigned a new Vice President in charge of CVN 78, a new Vice President in charge of material management and purchasing, and a number of new general ship foremen to strengthen CVN 78 performance.", "\u2022 The new PEO and shipyard president began conducting bi-weekly launch readiness reviews focused on cost performance, critical path issues and accomplishment of the targets for launch completion. These bi-weekly reviews will continue through delivery.", "\u2022 Assistant Secretary of the Navy (Research, Development, and Acquisition) (ASN (RD&A)) conducts quarterly reviews of program progress and performance with the PEO and shipbuilder to ensure that all that can be done to improve on cost performance is being done.", "The series of actions taken by the Navy and the shipbuilder are achieving the desired effect of arresting cost growth, establishing stability, and have resulted in no changes in the Government's estimate at completion over the past four years. The Department of the Navy is continuing efforts to identify cost reductions, drive improved cost and schedule performance, and manage change. The Navy has established a rigorous process with the shipbuilder that analyzes each contract change request to approve only those change categories allowed within the 2010 ASN(RD&A) change order management guidance. This guidance only allows changes for safety, contractual defects, testing and trial deficiencies, statutory and regulatory changes that are accompanied by funding and value engineering change proposals with instant contract savings. While the historical average for contractual change level is approximately 10 percent of the construction cost for the lead ship of a new class, CVN 78 has maintained a change order budget of less than four percent to date despite the high degree of concurrent design and development.", "Finally, the Navy has identified certain areas of the ship whose completion is not required for delivery, such as berthing spaces for the aviation detachment, and has removed this work from the shipbuilder's contract. This deferred work will be completed within the ship's budgeted end cost and is included within the $12,887 million cost estimate. By performing this deferred work in the post-delivery period using CVN 78 end cost funding, it can be competed and accomplished at lower cost and risk to the overall ship delivery schedule....", "The CVN 79 cost cap was established in 2006 and adjusted by the Secretary of the Navy in 2013, primarily to address inflation between 2006 and 2013 plus $325 million of the allowed increase for non-recurring engineering to incorporate design improvements for the CVN 78 Class construction.", "The Navy and the shipbuilder conducted an extensive affordability review of carrier construction and made significant changes to deliver CVN 79 at the lowest possible cost. These changes are focused on eliminating the largest impacts to cost performance identified during the construction of CVN 78 as well as furthering improvements in future carrier construction. The Navy outlined cost savings initiatives in its Report to Congress in May, 2013, and is executing according to plan.", "Stability in requirements, design, schedule, and budget, are essential to controlling and improving CVN 79 cost, and therefore is of highest priority for the program. Requirements for CVN 79 were \"locked down\" prior to the commencement of CVN 79 construction. The technical baseline and allocated budget for these requirements were agreed to by the Chief of Naval Operations and ASN(RD&A) and further changes to the baseline require their approval, which ensures design stability and increases effectiveness during production. At the time of construction contract award, CVN 79 has 100 percent of the design product model complete (compared to 65 percent for CVN 78) and 80 percent of initial drawings released. Further, CVN 79 construction benefits from the maturation of virtually all new technologies inserted on CVN 78. In the case of EMALS and AAG, the system design and procurement costs are understood, and CVN 79 leverages CVN 78 lessons learned....", "A completed FORD Class design enabled the shipbuilder to fully understand the \"whole ship\" bill of materials for CVN 79 construction and to more effectively manage the procurement of those materials with the knowledge of material lead times and qualified sources accrued from CVN 78 construction. The shipbuilder is able to order ship-set quantities of material, with attendant cost benefits, and to ensure CVN 79 material will arrive on time to support construction need. Extensive improvements have been put in place for CVN 79 material procurement to drive both cost reductions associated with more efficient procurement strategies and production labor improvements associated with improved material availability. Improved material availability is also a critical enabler to many construction efficiency improvements in CVN 79.", "The shipbuilder has developed an entirely new material procurement and management strategy for CVN 79. This new strategy consists of eight separate initiatives....", "The shipbuilder and the Navy have performed a comprehensive review of the build strategy and processes used in construction of CVN 78 Class aircraft carriers as well as consulted with other Navy shipbuilders on best practices. As a result, the shipbuilder has identified and implemented a number of changes in the way they build aircraft carriers, with a dedicated focus on executing construction activities where they can most efficiently be performed. The CVN 79 build sequence installs 20 percent more parts in shop, and 30 percent more parts on the final assembly platen, as compared to CVN 78. This work will result in an increase in pre-outfitting and work being pulled to earlier stages in the construction process where it is most efficiently accomplished....", "In conjunction with the Navy and the shipbuilder's comprehensive review of the build strategy and processes used in construction of CVN 78 Class aircraft carriers, a number of design changes were identified that would result in more affordable construction. Some of these design changes were derived from lessons learned in the construction of CVN 78 and others seek to further simplify the construction process and drive cost down....", "In addition to the major focus discussed above, the shipbuilder continues to implement capital improvements to facilities that serve to reduce risk and improve productivity....", "To enhance CVN 79 build efficiency and affordability, the Navy is implementing a two-phase delivery plan. The two-phase strategy will allow the basic ship to be constructed and tested in the most efficient manner by the shipbuilder (Phase I) while enabling select ship systems and compartments to be completed in Phase II, where the work can be completed more affordably through competition or the use of skilled installation teams....", "The CVN 80 planning and construction will continue to leverage class lessons learned in the effort to achieve cost and risk reduction for remaining FORD Class ships. The CVN 80 strategy seeks to improve on CVN 79 efforts to frontload as much work as possible to the earliest phases of construction, where work is both predictable and more cost efficient....", "While delivery of the first-of-class FORD has involved challenges, those challenges are being addressed and this aircraft carrier class will provide great value to our Nation with unprecedented and greatly needed warfighting capability at overall lower total ownership cost than a NIMITZ Class CVN. The Navy has taken major steps to stem the tide of increasing costs and drive affordability into carrier acquisition.", "GAO Testimony", "The prepared statement of the GAO witness at the hearing states the following in part:", "The Ford-class aircraft carrier's lead ship began construction with an unrealistic business case. A sound business case balances the necessary resources and knowledge needed to transform a chosen concept into a product. Yet in 2007, GAO found that CVN 78 costs were underestimated and critical technologies were immature\u2014key risks that would impair delivering CVN 78 at cost, on-time, and with its planned capabilities. The ship and its business case were nonetheless approved. Over the past 8 years, the business case has predictably decayed in the form of cost growth, testing delays, and reduced capability\u2014in essence, getting less for more. Today, CVN 78 is more than $2 billion over its initial budget. Land-based tests of key technologies have been deferred by years while the ship's construction schedule has largely held fast. The CVN 78 is unlikely to achieve promised aircraft launch and recovery rates as key systems are unreliable. The ship must complete its final, more complex, construction phase concurrent with key test events. While problems are likely to be encountered, there is no margin for the unexpected. Additional costs are likely.", "Similarly, the business case for CVN 79 is not realistic. The Navy recently awarded a construction contract for CVN 79 which it believes will allow the program to achieve the current $11.5 billion legislative cost cap. Clearly, CVN 79 should cost less than CVN 78, as it will incorporate lessons learned on construction sequencing and other efficiencies. While it may cost less than its predecessor, CVN 79 is likely to cost more than estimated. As GAO found in November 2014, the Navy's strategy to achieve the cost cap relies on optimistic assumptions of construction efficiencies and cost savings\u2014including unprecedented reductions in labor hours, shifting work until after ship delivery, and delivering the ship with the same baseline capability as CVN 78 by postponing planned mission system upgrades and modernizations until future maintenance periods.", "Today, with CVN 78 over 92 percent complete as it reaches delivery in May 2016, and the CVN 79 on contract, the ability to exercise oversight and make course corrections is limited. Yet, it is not too late to examine the carrier's acquisition history to illustrate the dynamics of shipbuilding\u2014and weapon system\u2014acquisition and the challenges they pose to acquisition reform. The carrier's problems are by no means unique; rather, they are quite typical of weapon systems. Such outcomes persist despite acquisition reforms the Department of Defense and Congress have put forward\u2014such as realistic estimating and \"fly before buy.\" Competition with other programs for funding creates pressures to overpromise performance at unrealistic costs and schedules. These incentives are more powerful than policies to follow best acquisition practices and oversight tools. Moreover, the budget process provides incentives for programs to be funded before sufficient knowledge is available to make key decisions. Complementing these incentives is a marketplace characterized by a single buyer, low volume, and limited number of major sources. The decades-old culture of undue optimism when starting programs is not the consequence of a broken process, but rather of a process in equilibrium that rewards unrealistic business cases and, thus, devalues sound practices.", "July 2015 Press Report", "A July 2, 2015, press report states the following:", "The Navy plans to spend $25 million per year beginning in 2017 as a way to invest in lowering the cost of building the services' new Ford-class aircraft carriers, service officials said.", "\"We will use this design for affordability to make new improvements in cost cutting technologies that will go into our ships,\" said Rear Adm. Michael Manazir, Director, Air Warfare....", "\"We just awarded a contract to buy long lead item materials [for CVN-79] and lay out an allocated budget for each of the components of that ship. We want to build the ship in the most efficient manner possible,\" Rear Adm. Thomas Moore, Program Executive Officer, Carriers, said.", "Navy leaders say the service is making positive strides regarding the cost of construction for the USS Kennedy and plans to stay within the congressional cost cap of $11.498 billion....", "The $25 million design for affordability initiative is aimed at helping to uncover innovative shipbuilding techniques and strategies that will accomplish this and lower costs.", "Moore said the goal of the program is to, among other things, remove $500 million from the cost of the third Ford-class carrier, the USS Enterprise, CVN 80.", "\"It is finding a million here and a million there and eventually that is how you get a billion dollars out of the ship from (CVN) 78 to (CVN) 79. The goal is to get another $500 million out of CVN 80. The $25 million dollars is a pretty prudent investment if we can continue to drive the cost of this class of ship down,\" Moore told reporters recently.", "Moore explained that part of the goal is to get to the point where a Ford-class carrier can be built for the same amount of man-hours it took to build their predecessor ships, the Nimitz-class carriers.", "\"We want to get back to the goal of being able to build it for historical Nimitz class levels in terms of man hours for a ship that is significantly more capable and more complex to build,\" Moore added.", "The money will invest in new approaches and explore the processes that a shipyard can use to build the ship, Moore added.", "\"They've made a significant investment in these new welding machines. These new welding machines allow the welder to use different configurations. This has significantly improved the throughput that the shipyard has,\" Moore said, citing an example of the kind of thing the funds would be used for.", "The funds will also look into whether new coatings for the ship or welding techniques can be used and whether millions of feet of electrical cabling can be installed in a more efficient manner, Moore added.", "Other cost saving efforts assisted by the funding include the increased use of complex assemblies, common integrated work packages, automated plate marking, weapons elevator door re-design and vertical build strategies, Navy officials said.", "Shipbuilders could also use a new strategy of having work crews stay on the same kind of work for several weeks at a time in order to increase efficiency, Moore said. Also, some of the construction work done on the USS Ford while it was in dry dock is now being done in workshops and other areas to improve the building process, he added.", "June 2015 Press Reports", "A June 29, 2015, press report states the following:", "Newport News Shipbuilding will see cost reduction on the order of 18 percent fewer man hours overall from the first Ford-class aircraft carrier to the second, according to a company representative.", "Ken Mahler, Newport News vice president of Navy programs, touted the shipyard's cost savings on the John F. Kennedy (CVN-79) during a June 15 interview with Inside the Navy . This reduction was facilitated by the investments the shipyard is making in carrier construction, as well as lessons learned from the first ship, the Gerald R. Ford (CVN-78), which will deliver next year.", "A June 23, 2015, press report states the following:", "The Pentagon's cost-assessment office now says the Navy's second aircraft carrier in a new class will exceed a congressionally mandated cost cap by $235 million.", "That's down from an April estimate that the USS John F. Kennedy, the second warship in the new Ford class, would bust a $11.498 billion cap set by lawmakers by $370 million. The Navy maintains that it can deliver the ship within the congressional limit.", "\"The original figure was a draft based on preliminary information,\" Navy Commander Bill Urban, a spokesman for the Pentagon's Cost Assessment and Program Evaluation office, said in an e-mail. As better information, such as updated labor rates, became available, the office \"revised its estimate to a more accurate number,\" he said.", "A June 15, 2015, press report states the following:", "[Rear Admiral Tom] Moore [program executive officer for aircraft carriers]. said the program would save a billion dollars by decreasing the man hours needed to construct the ship by 18 percent from CVN-78 to 79\u2014down to about 44 million manhours. He said this reduction is only a first step in taking cost ouot of the carrier program. The future Enterprise (CVN-80) will take about 4 million manhours out, or another 10 percent reduction, for a savings of about $500 million.", "But beyond seeking ways to take cost out, the contract itself reduces the risk to the government, Moore said.", "\"The main construction of the ship is now in a fixed price environment, so that switchover really limits the government's liability,\" he said.", "Without getting into specific dollar amounts due to business sensitivities, Moore explained that \"this is the lowest target fee we've ever had on any CVN new construction. Look at tghe shape of the share [government-contractor cost] share lines, because the share lines at the end of the day are a measure of risk. So where we'd like to get quickly to [a] 50/50 [share line], in past carrier contracts we've been out at 85/15, 90/10\u2014which basically means for every dollar over [the target cost figure, up to the ceiling cost figure], the government picks up 85 cents on the dollar. And this contract very quickly gets to 50/50. The other thing is ceiling price\u2014on a fixed-price contract, the ceiling price is the government's maximum liability. And on this particular contract, again, it is the lowest ceiling price we've ever had [for a CVN].\"", "February 2015 Navy Testimony", "At a February 25, 2015, hearing on Department of the Navy acquisition programs, Department of the Navy officials testified the following:", "The Navy is committed to delivering CVN 78 within the $12.887 billion Congressional cost cap. Sustained efforts to identify cost reductions and drive improved cost and schedule on this first-of-class aircraft carrier have resulted in highly stable performance since 2011.", "Parallel efforts by the Navy and shipbuilder are driving down and stabilizing aircraft carrier construction costs for the future John F Kennedy (CVN 79) and estimates for the future Enterprise (CVN 80). As a result of the lessons learned on CVN 78, the approach to carrier construction has undergone an extensive affordability review. The Navy and the shipbuilder have made significant changes on CVN 79 to reduce the cost to build the ship as detailed in the 2013 CVN 79 report to Congress. The benefits of these changes in build strategy and resolution of first-of-class impacts on CVN 79 are evident in metrics showing significantly reduced man-hours for completed work from CVN 78. These efforts are ongoing and additional process improvements continue to be identified.", "The Navy extended the CVN 79 construction preparation contract into 2015 to enable continuation of ongoing planning, construction, and material procurement while capturing lessons learned associated with lead ship construction and early test results. The continued negotiations of the detail design and construction (DD&C) contract afford an opportunity to incorporate further construction process improvements and cost reduction efforts. Award of the DD&C contract is expected in third quarter FY 2015. This will be a fixed price-type contract.", "Additionally, the Navy will deliver the CVN 79 using a two-phased strategy. This enables select ship systems and compartments to be completed in a second phase, wherein the work can be completed more efficiently through competition or the use of skilled installation teams responsible for these activities. This approach, key to delivering CVN 79 at the lowest cost, also enables the Navy to procure and install shipboard electronic systems at the latest date possible.", "The FY 2014 NDAA adjusted the CVN 79 and follow ships cost cap to $11,498 million to account for economic inflation and non-recurring engineering for incorporation of lead ship lessons learned and design changes to improve affordability. In transitioning from first-of-class to first follow ships, the Navy has maintained Ford class requirements and the design is highly stable. Similarly, we have imposed strict interval controls to drive changes to the way we do business in order to ensure CVN 79 is delivered below the cost cap. To this same end, the FY 2016 President's Budget request aligns funding to the most efficient build strategy for this ship and we look for Congress' full support of this request to enable CVN 79 to be procured at the lowest possible cost.", "Enterprise (CVN 80) will begin long lead time material procurement in FY 2016. The FY 2016 request re-phases CVN 80 closer to the optimal profile, therefore reducing the overall ship cost. The Navy will continue to investigate and will incorporate further cost reduction initiatives, engineering efficiencies, and lessons learned from CVN 78 and CVN 79. Future cost estimates for CVN 80 will be updated for these future efficiencies as they are identified.", "May 2013 Navy Testimony", "In its prepared statement for a May 8, 2013, hearing on Navy shipbuilding programs before the Seapower subcommittee of the Senate Armed Services Committee, the Navy stated that", "In 2011, the Navy identified spiraling cost growth [on CVN-78] associated with first of class non-recurring design, contractor and government furnished equipment, and ship production issues on the lead ship. The Navy completed an end-to-end review of CVN 78 construction in December 2011 and, with the shipbuilder, implemented a series of corrective actions to stem, and to the extent possible, reverse these trends. While cost performance has stabilized, incurred cost growth is irreversible....", "As a result of lessons learned on CVN 78, the approach to carrier construction has undergone an extensive affordability review; and the Navy and the shipbuilder have made significant changes on CVN 79 that will reduce the cost to build the ship. CVN 79 construction will start with a complete design, firm requirements, and material economically procured and on hand in support of production need. The ship's build schedule also provides for increased completion levels at each stage of construction with resulting improved production efficiencies....", "Inarguably, this new class of aircraft carrier brings forward tremendous capability and life-cycle cost advantages compared to the NIMITZ-class it will replace. However, the design, development and construction efforts required to overcome the technical challenges inherent to these advanced capabilities have significantly impacted cost performance on the lead ship. The Navy continues implementing actions from the 2012 detailed review of the FORD-Class build plan to control cost and improve performance across lead and follow ship contracts. This effort, taken in conjunction with a series of corrective actions with the shipbuilder on the lead ship, will not recover costs to original targets for GERALD R. FORD [CVN-78], but should improve performance on the lead ship while fully benefitting CVN 79 and following ships of the class.", "In the discussion portion of the hearing, Sean Stackley, the Assistant Secretary of the Navy for Research, Development and Acquisition (i.e., the Navy's acquisition executive), testified that", "First, the cost growth on the CVN-78 is unacceptable. The cost growth dates back in time to the very basic concepts that went into take in the Nimitz-class and doing a total redesign of the Nimitz class to get to a level of capability and to reduce operating and support cost for the future carrier. Far too much risk was carried into the design of the first of the Ford-class.", "Cost growth stems to the design was moving at the time production started. The vendor base that was responsible for delivering new components and material to support the ship production was (inaudible) with new developments in the vendor base and production plan do not account for the material ordering difficulties, the material delivery difficulties and some of the challenges associated with building a whole new design compared to the Nimitz....", "Sir, for CVN-79, we have\u2014we have held up the expenditures on CVN-79 as we go through the details of\u2014one, ensuring that the design of the 78 is complete and repeated for the 79s [sic] that we start with a clean design.", "Two, we're going through the material procurement. We brought a third party into assessment material-buying practices at Newport News to bring down the cost of material. And we're metering out the dollars for buying material until it hits the objectives that we're setting for CVN-79 through rewriting the build plan on CVN-79.", "If you take a look at how the 78 is being constructed, far too much work is being accomplished late in the build cycle. So we are rewriting the build plan for CVN-79, do more work in the shops where it's more efficient, more work in the buildings where it's more efficient, less work in the dry dock, less work on the water. And then we're going after the rates\u2014the labor rates and the investments needed by the shipbuilder to achieve these efficiencies.", "Later in the hearing, Stackley testified that", "the history in shipbuilding is since you don't have a prototype for a new ship, the first of class referred to as the lead ship is your prototype. And so you carry a lot of risk into the construction of that first of class.", "Also, given the nature that there's a lengthy design development and build span associated with ships, so there is a certain amount of overlap or concurrency that occurs between the development of new systems that need to be delivered with the first ship, the incorporation of the design of those new systems and the actual construction. And so to the extent that there is change in a new ship class then the risk goes up accordingly.", "In the case of the CVN-78, the degree of change compared to the Nimitz was fairly extraordinary all for good reasons, good intentions, increased capability, increased survivability, significant reduction in operating and support costs. So there was a determination that will take on this risk in order to get those benefits, and the case of the CVN-78, those risks are driving a lot of the cost growth on the lead ship.", "When you think about the follow ships, now you've got a stable design, now your vendor base has got a production line going to support the production. Now you've got a build plan and a workforce that has climbed up on the learning curve to drive cost down. So you can look at\u2014you can look at virtually every shipbuilding program and you'll see a significant drop-off in cost from that first of class to the follow ships.", "And then you look for a stable learning curve to take over in the longer term production of a ship class.", "Carriers are unique for a number of reasons, one of which we don't have an annual procurement of carriers. They're spread out over a five and, in fact, in the case of 78 as much as seven-year period. So in order to achieve that learning, there are additional challenges associated with achieving that learning. And so we're going at it very deliberately on the CVN-79 through the build plan with the shipbuilder to hit the line that we've got to have\u2014the cost reductions that we've got to have on the follow ships of the class.", "March 2013 Navy Report", "A March 2013 report to Congress on the Navy's plan for building CVN-79 that was released to the public on May 16, 2013, states the following in its executive summary:", "As a result of the lessons learned on CVN 78, the approach to carrier construction has undergone an extensive affordability review and the Navy and the shipbuilder have made significant changes on CVN 79 that will significantly reduce the cost to build the ship. These include four key construction areas:", "\u2014CVN 79 construction will start with a complete design and a complete bill of material", "\u2014CVN 79 construction will start with a firm set of stable requirements", "\u2014CVN 79 construction will start with the development complete on a host of new technologies inserted on CVN 78 ranging from the Electromagnetic Aircraft Launch System (EMALS), the Dual Band Radar, and the reactor plant, to key valves in systems throughout the ship", "\u2014CVN 79 construction will start with an 'optimal build' plan that emphasizes the completion of work and ship outfitting as early as possible in the construction process to optimize cost and ultimately schedule performance.", "In addition to these fundamentals, the Navy and the shipbuilder are tackling cost through a series of other changes that when taken over the entire carrier will have a significant impact on construction costs. The Navy has also imposed cost targets and is aggressively pursuing cost reduction initiatives in its government furnished systems. A detailed accounting of these actions is included in this report.", "The actions discussed in this report are expected to reduce the material cost of CVN 79 by 10-20% in real terms from CVN 78, to reduce the number of man-hours required to build the CVN 79 by 15-25% from CVN 78, and to reduce the cost of government furnished systems by 5-10% in real terms from CVN 78.", "For the full text of the Navy's report, see the Appendix D .", "March 2012 Navy Letter to Senator McCain", "Secretary of the Navy Ray Mabus, in a letter with attachment sent in late March 2012 to Senator John McCain on controlling cost growth in CVN-78, stated the following:", "Dear Senator McCain: ", "Thank you for your letter of March 21, 2012, regarding the first-of-class aircraft carrier, GERALD R. FORD (CVN 78). Few major programs carry greater importance or greater impact on national security, and no other major program comprises greater scale and complexity than the Navy's nuclear aircraft carrier program. Accordingly, successful execution of this program carries the highest priority within the Department of the Navy. ", "I have shared in the past my concern when I took office and learned the full magnitude of new technologies and design change being brought to the FORD. Requirements drawn up more than a decade prior for this capital ship drove development of a new reactor plant, propulsion system, electric plant and power distribution system, first of kind electromagnetic aircraft launching system, advanced arresting gear, integrated warfare system including a new radar and communications suite, air conditioning plant, weapons elevators, topside design, survivability improvements, and all new interior arrangements. CVN 78 is a near-total redesign of the NIMITZ Class she replaces. Further, these major developments, which were to be incrementally introduced in the program, were directed in 2002 to be integrated into CVN 78 in a single step. Today we are confronting the cost impacts of these decisions made more than a decade ago. ", "In my August 29, 2011 letter, I provided details regarding these cost impacts. At that time, I reported the current estimate for the Navy's share of the shipbuilder's construction overrun, $690 million, and described that I had directed an end-to-end review to identify the changes necessary to improve cost for carrier design, material procurement, planning, build and test. The attached white paper provides the findings of that review and the steps we are taking to drive affordability into the remaining CVN 78 construction effort. Pending the results of these efforts, the Navy has included the 'fact of life' portion of the stated overrun in the Fiscal Year 2013 President's Budget request. The review also highlighted the compounding effects of applying traditional carrier build planning to a radically new design; the challenges inherent to low-rate, sole-source carrier procurement; and the impact of external economic factors accrued over 15 years of CVN 78 procurement\u2014all within the framework of cost-plus contracts. The outlined approach for ensuring CVN 79 and follow ship affordability focuses equally upon tackling these issues while applying the many lessons learned in the course of CVN 78 procurement. ", "As always, if I may be of further assistance, please let me know.", "Sincerely, [signed] Ray Mabus", "Attachment: As stated ", "Copy to: The Honorable Carl Levin, Chairman", "[Attachment]", "Improving Cost Performance on CVN 78 ", "CVN 78 is nearing 40 percent completion. Cost growth to-date is attributable to increases in design, contractor furnished material, government furnished material (notably, the Electromagnetic Aircraft Launching System (EMALS), Advanced Arresting Gear (AAG), and the Dual Band Radar (DBR)), and production labor performance. To achieve the best case outcome, the program must execute with zero additional cost growth in design and material procurement, and must improve production performance. The Navy and the shipbuilder have implemented a series of actions and initiatives in the management and oversight of CVN 78 that cross the full span of contracting, design, material procurement, government furnished equipment, production planning, production, management and oversight.", "CVN 78 is being procured within a framework of cost-plus contracts. Within this framework, however, the recent series of action taken by the Navy to improve contract effectiveness are achieving the desired effect of incentivizing improved cost performance and reducing government exposure to further cost growth. ", "CVN 78 design has been converted from a 'level of effort, fixed fee' contract to a completion contract with a firm target and incentive fee. Shipbuilder cost performance has been on-target or better since this contract was changed. ", "CVN 78 construction fee has been retracted, consistent with contract performance. However, the shipbuilder is incentivized by the contract shareline to improve upon current performance to meet agreed-to cost goals. ", "Contract design changes are under strict control; authorized only for safety, damage control, mission-degrading deficiencies, or similar. Adjudicated changes have been contained to less than 1 percent of contract target price. ", "The Navy converted the EMALS and AAG production contract to a firm, fixed price contract, capping cost growth to that system and imposing negative incentives for late delivery. ", "Naval Sea Systems Command is performing a review of carrier specifications with the shipbuilder, removing or improving upon overly burdensome or unneeded specifications that impose unnecessary cost on the program. ", "The single largest impact to cost performance to-date has been contractor and government material cost overruns. These issues trace to lead ship complexity and CVN 78 concurrency, but they also point to inadequate accountability for carrier material procurement, primarily during the ship's advance procurement period (2002-2008). ", "These effects cannot be reversed on CVN 78, but it is essential to improve upon material delivery to the shipyard to mitigate the significant impact of material delays on production performance. Equally important, the systemic material procurement deficiencies must be corrected for CVN 79. To this end, the Navy and shipbuilder have taken the following actions. ", "The Navy has employed outside supply chain management experts to develop optimal material procurement strategies. The Navy and the shipbuilder are reviewing remaining material requirements to employ these best practices (structuring procurements to achieve quantity discounts, dual-sourcing to improve schedule performance and leverage competitive opportunities, etc.). ", "The shipbuilder has assigned engineering and material sourcing personnel to each of their key vendors to expedite component qualifications and delivery to the shipyard. ", "The shipbuilder is inventorying all excess material procured on CVN 78 for transfer to CVN 79 (cost reduction to CVN 78), as applicable. ", "The Program Executive Officer (Carriers) is conducting quarterly flag-level government furnished equipment summits to drive cost reduction opportunities and ensure on-time delivery of required equipment and design information to the shipbuilder.", "The most important finding regarding CVN 78 remaining cost is that the CVN 78 build plan, consistent with the NIMITZ class, focuses foremost on completion of structural and critical path work to support launching the ship on-schedule. This emphasis on structure comes at the expense of completing ship systems, outfitting, and furnishing early in the build process and results in costly, labor-intensive system completion activity during later; more costly stages of production. Achieving the program's cost improvement targets will require that CVN 78 increase its level of completion at launch, from current estimate of 60 percent to no less than 65 percent. To achieve this goal and drive greater focus on system completion: ", "the Navy fostered a collaborative build process review by the shipbuilder with other Tier 1 private shipyards in order to benchmark its performance arid identify fundamental changes that would yield marked improvement; ", "the shipbuilder has established specific launch metrics by system (foundations, machinery, piping, power panels, vent duct, lighting, etc.) and increased staffing for waterfront engineering and material expediters to support meeting these metrics; ", "the shipbuilder has linked all of these processes within a detailed integrated master schedule, providing greater visibility to current performance and greater ability to control future cost and schedule performance across the shipbuilding disciplines;", "the Navy and shipbuilder are conducting Unit Readiness Reviews of CVN 78 erection units to ensure that the outfitted condition of each hull unit being lifted into the dry-dock contains the proper level of outfitting. ", "These initiatives, which summarize a more detailed list of actions being implemented and tracked as result of the end-to-end review, are accompanied by important management changes. ", "The shipbuilder has assigned a new Vice President in charge of CVN 78, a new Vice President in charge of material management and purchasing, and a number of new general shop foreman to strengthen CVN 78 performance. ", "The Navy has assigned a second tour Flag Officer with considerable carrier operations, construction, and program management experience as the new Program-Executive Officer (PEO). ", "The PEO and shipyard president conduct bi-weekly launch readiness reviews focusing on cost performance, critical path issues and accomplishment of the target for launch completion. ", "The Assistant Secretary of the Navy (Research, Development, and Acquisition) conducts a monthly review of program progress and performance with the PEO and shipbuilder, bringing to bear the full weight of the Department, as needed, to ensure that all that can be done to improve on cost performance is being done. ", "Early production performance improvements can be traced directly to these actions, however, significant further improvement is required. To this end, the Navy is conducting a line-by-line review of all 'cost to-go' on CVN 78 to identify further opportunity to reduce cost and to mitigate risk. ", "Improving Cost Performance on CVN 79 ", "CVN 79 Advance Procurement commenced in 2007 with early construction activities following in 2011. Authorization for CVN 79 procurement is requested in Fiscal Year 2013 President's Budget request with the first year of incremental funding. Two years have been added to the CVN 79 production schedule in this budget request, afforded by the fact that CVN 79 will replace CVN 68 when she inactivates. To improve affordability for CVN 79, the Navy plans to leverage this added time by introducing a fundamental change to the carrier procurement approach and a corresponding shift to the carrier build plan, while incorporating CVN 78 lessons learned. ", "The two principal 'documents' which the Navy and shipbuilder must ensure are correct and complete at the outset of CVN 79 procurement are the design and the build plan. ", "Design is governed by rules in place that no changes will be considered for the follow ship except changes necessary to correct design deficiencies on the lead ship, fact of life changes to correct obsolescence issues, or changes that will result in reduced cost for the follow ship. Exceptions to these rules must be approved by the JROC, or designee. Accordingly, the Navy is requesting procurement authority for CVN 79 with the Design Product Model complete and construction drawings approximately 95 percent complete (compared to approximately 30 percent complete at time of lead ship authorization). ", "As well, first article testing and certification will be complete for virtually all major new equipments introduced in the FORD Class. At this point in time, the shipbuilder has developed a complete bill of material for CVN 79. The Navy is working with the shipbuilder to ensure that the contractor's material estimates are in-line with Navy 'should cost' estimates; eliminating non-recurring costs embedded in lead ship material, validating quantities, validating escalation indices, incorporating lead ship lessons learned. The Navy has increased its oversight of contractor furnished material procurement, ensuring that material procurement is competed (where competition is available); that it is fixed priced; that commodities are bundled to leverage economic order quantity opportunities; and that the vendor base capacity and schedule for receipt supports the optimal build plan being developed for production. ", "In total, the high level of design maturity and material certification provides a stable technical baseline for material procurement cost and schedule performance, which are critical to developing and executing an improved, reliable build plan. ", "In order to significantly improve production labor performance, based on timely receipt of design and material, the Navy and shipbuilder are reviewing and implementing changes to the CVN 79 build plan and affected facilities. The guiding principles are: ", "maximize planned work in the shops and early stages of construction; ", "revise sequence of structural unit construction to maximize learning curve performance through 'families of units' and work cells; ", "incorporate design changes to improve FORD Class producibility; ", "increase the size of erection units to eliminate disruptive unit breaks and improve unit alignment and fairness; ", "increase outfitting levels for assembled units prior to erection in the dry-dock; ", "increase overall ship completion levels at each key event. ", "The shipbuilder is working on detailed plans for facility improvements that will improve productivity, and the Navy will consider incentives for capital improvements that would provide targeted return on investment, such as: ", "increasing the amount of temporary and permanent covered work areas; ", "adding ramps and service towers for improved access to work sites and the dry-dock; ", "increasing lift capacity to enable construction of larger, more fully outfitted super-lifts: ", "An incremental improvement to carrier construction cost will fall short of the improvement necessary to ensure affordability for CVN 79 and follow ships. Accordingly, the shipbuilder has established aggressive targets for CVN 79 to drive the game-changing improvements needed for carrier construction. These targets include: ", "75 percent Complete at Launch (15 percent> [i.e., 15 percent greater than] FORD); ", "85-90 percent of cable pulled prior to Launch (25-30 percent> FORD); ", "30 percent increase in front-end shop work (piping details, foundations, etc); ", "All structural unit hot work complete prior to blast and paint; ", "25 percent increase to work package throughput; ", "100 percent of material available for all work packages in accordance with the integrated master schedule; ", "zero delinquent engineering and planning products; ", "resolution of engineering problems in < 8 [i.e., less than 8] hours. ", "In parallel with efforts to improve shipbuilder costs, the PEO is establishing equally aggressive targets to reduce the cost of government furnished equipment for CVN 79; working equipment item by equipment item with an objective to reduce overall GFE costs by ~$500 million. Likewise, the Naval Sea Systems Command is committed to continuing its ongoing effort to identify specification changes that could significantly reduce cost without compromising safety and technical rigor.", "The output of these efforts comprises the optimal build plan for CVN 79 and follow, and will be incorporated in the detail design and construction baseline for CVN 79. CVN 79 will be procured using a fixed price incentive contract.", "Appendix D. March 2013 Navy Report to Congress on Construction Plan for CVN-79", "This appendix reprints a March 2013 Navy report to Congress on the Navy's construction plan for CVN-79.", "Appendix E. Shock Trial", "An earlier oversight issue for Congress for the CVN-78 program was whether to conduct the shock trial for the CVN-78 class in the near term, on the lead ship in the class, or years later, on the second ship in the class. This appendix presents background information on that issue.", "A shock trial, known formally as a full ship shock trial (FSST) and sometimes called a shock test, is a test of the combat survivability of the design of a new class of ships. A shock trial involves setting off one or more controlled underwater charges near the ship being tested, and then measuring the ship's response to the underwater shock caused by the explosions. The test is intended to verify the ability of the ship's structure and internal systems to withstand shocks caused by enemy weapons, and to reveal any changes that need to be made to the design of the ship's structure or its internal systems to meet the ship's intended survivability standard. Shock trials are nominally to be performed on the lead ship in a new class of ships, but there have also been cases where the shock trial for a new class was done on one of the subsequent ships in the class.", "The question of whether to conduct the shock trial for the CVN-78 class in the near term, on the lead ship in the class, or years later, on the second ship in the class, has been a matter of disagreement at times between the Navy and the office of the Secretary of Defense (OSD). The Navy has wanted to perform the shock trial on the second ship in the class, because performing it on the lead ship in the class, the Navy has argued, will cause a significant delay in the first deployment of the lead ship, effectively delaying the return of the carrier force to an 11-ship force level and increasing the operational strain on the other 10 carriers. The Navy has argued that the risks of delaying the shock trial on the CVN-78 to the second ship in the class are acceptable, because the CVN-78 class hull design is based on the Nimitz (CVN-68) class aircraft carrier hull design, whose survivability against shocks is understood, because systems incorporated into the CVN-78 design have been shock tested at the individual component level, and because computer modeling can simulate how the CVN-78 design as a whole will respond to shocks.", "OSD has argued that the risks of delaying the CVN-78 class shock trial to the second ship in the class are not acceptable, because the CVN-78 design is the first new U.S. aircraft carrier design in four decades; because the CVN-78 design has many internal design differences compared to the CVN-68 design, including new systems not present in the CVN-68 class design; and because computer modeling can only do so much to confirm how a complex new platform, such as an aircraft carrier and all its internal systems, will respond to shocks. The risk of delaying the shock trial, OSD has argued, outweighs the desire to avoid a delay in the first deployment of the lead ship in the class. OSD in 2015 directed the Navy to plan for conducting a shock trial on the lead ship. The Navy complied with this direction but has also sought to revisit the issue with OSD.", "The issue of the shock trial for the CVN-78 class has been a matter of legislative activity\u2014see the provisions shown earlier in \" Recent Related Legislative Provisions ,\" particularly the most recent such provision, Section 121(b) of the FY2018 National Defense Authorization Act ( H.R. 2810 / P.L. 115-91 of December 12, 2017).", "An April 5, 2018, press report states the following:", "The Pentagon's No. 2 civilian has said the Navy should perform shock-testing soon to determine how well its new $12.9 billion aircraft carrier\u2014the costliest warship ever\u2014could withstand an attack, affirming the service's recent decision to back down from a plan for delay.", "\"We agree with your view that a test in normal sequence is more prudent and pragmatic,\" Deputy Defense Secretary Patrick Shanahan said in a newly released March 26 letter to Senate Armed Services Committee Chairman John McCain. The Arizona Republican and Senator Jack Reed, the panel's top Democrat, pressed for the shock-testing to go ahead as originally planned.", "James Guerts, the Navy's chiefs weapons buyer, told reporters last month that the Navy was acquiescing to the testing after initially asking Defense Secretary James Mattis to delay it for at least six years. In its push to maintain an 11-carrier fleet, the Navy wanted to wait and perform the test on a second carrier in the class rather than on the USS Gerald Ford."], "subsections": []}]}]}}
{"id": "R40864", "title": "Presidential Terms and Tenure: Perspectives and Proposals for Change", "released_date": "2019-04-15T00:00:00", "summary": ["The President and Vice President's terms of office are prescribed by the Constitution and four of its amendments.", "Article II, Section 1, of the Constitution, which came into effect with the convening of the First Congress and inauguration of the first President and Vice President in 1789, sets the terms of these two officers at four years, and does not prohibit their reelection. Four amendments to the Constitution, ratified between 1804 and 1967, have added further conditions to presidential terms and tenure.", "The Twelfth Amendment, ratified in 1804, extended the qualifications for Presidents to the vice presidency.", "Section 1 of the Twentieth Amendment, ratified in 1933, sets the expiration date for these terms at noon on January 20 of each year following a presidential election.", "The Twenty-Second Amendment, ratified in 1951, limits presidential tenure: no person may be elected President more than twice. It also specifies that Vice Presidents who succeed to the office may be elected to two full terms if they served less than two years of the term of the President they succeeded. If they served more than two years of the predecessor's term, they are eligible for election to only one additional term.", "The Twenty-Fifth Amendment, ratified in 1967, does not directly affect terms and tenure of the President and Vice President, but provides in Section 1 that the Vice President \"shall become President\" on the death, resignation, or removal from office of the President. This section clarifies original constitutional language on the status of a Vice President who succeeds to the presidency. Section 2 authorizes the President to make nominations to fill vacancies in the office of Vice President, subject to approval by a majority vote of both houses of Congress, a contingency not covered in the original language of the Constitution.", "The length of the President's term and the question of whether Presidents should be eligible for reelection were extensively debated in 1787 at the Constitutional Convention. Late in the proceedings, the delegates settled on a four-year term for both President and Vice President but did not place a limit on the number of terms a President could serve. Following a precedent set by President George Washington (1789-1797), and reinforced by Thomas Jefferson (1801-1809), however, U.S. Presidents adhered to a self-imposed limit of two terms, a precedent that was observed for over 140 years. Although several Presidents during this period who had served two terms considered running for a third, Franklin Roosevelt (1933-1945) was the first to seek and be elected to both a third term, in 1940, and a fourth, in 1944.", "Following ratification of the four amendments cited above, additional amendment proposals to change the conditions of presidential terms and tenure were regularly introduced during the second half of the 20th century, but much less frequently to date in the 21st. Two categories of amendment predominated during this period: one variant proposed repeal of the Twenty-Second Amendment, thus permitting Presidents to be elected an unlimited number of times. Another category of proposed amendment would have extended the presidential and vice-presidential terms to six years, often in combination with a requirement limiting Presidents to one term.", "No measure to repeal the Twenty-Second Amendment or otherwise change the presidential term of office has been introduced to date in the 116th Congress. This report will be updated if events warrant."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The issue of the President and Vice President's term of office is generally regarded as an accepted constitutional norm that arouses little controversy in the 21 st century. Both the four-year term and the venerable two-term tradition, initiated by George Washington and ultimately incorporated in the Constitution in 1951 by the Twenty-Second Amendment, appear to be fixed elements in the nation's political landscape. In marked comparison, the issues of tenure and reelection of the President, and of the Vice President (an office added almost as an afterthought during the Constitutional Convention of 1787), were the subject of intense and prolonged debate during the Philadelphia gathering. Delegates argued for three months over the length of the presidential term and whether the chief executive should be eligible for reelection before reaching a compromise package of provisions\u2014a four-year term, and eligibility for reelection\u2014several days before the convention adjourned.", "Since that time, a wide range of changes to these conditions has been proposed as constitutional amendments, but relatively few conditions have been added to the original provisions governing the President's term of office. In addition to the Twenty-Second Amendment cited above, the Twelfth, ratified in 1804, set the same qualifications for the Vice President; the Twentieth, ratified in 1933, set January 20 of every year following a presidential election as the date on which the chief executive's term begins; and the Twenty-Fifth Amendment clarified the question of vice-presidential succession to the presidency and authorized the President to nominate persons to fill vacancies in the vice presidency, subject to approval by vote of both houses of Congress.", "Proposals for a single term were popular in the 19 th century, and for several decades before the Civil War, the concept of a voluntary limit of one presidential term in office drew wide support. ", "Beginning in 1808, constitutional amendments were introduced that would have changed the presidential term to five, six, seven, and even eight years. By the 20 th century, the single six-year term for Presidents had become a preferred option for such amendments, with multiple amendment proposals introduced in successive Congresses as late as the 1990s, while amendments to repeal the Twenty-Second Amendment to allow unlimited reelection were regularly introduced as recently as the 113 th Congress.", "In the past two decades, however, public and congressional interest in these issues has arguably declined. In contrast to proceedings at the Constitutional Convention and widespread congressional interest in the past, the questions of presidential term and tenure appear to be relatively settled issues in the contemporary context. Nevertheless, the potential for renewed interest in change, which has emerged as a force to be contended with in the past, remains a possibility in both the present and future."], "subsections": []}, {"section_title": "Presidential Term of Office: Current Provisions and Options for Change", "paragraphs": ["The conditions of terms and tenure for the President and Vice President of the United States have evolved over nearly two centuries, from the earliest provisions in Article II, Section 1, of the U.S. Constitution, set by the Constitutional Convention in 1787, to provisions governing vacancies in the office of Vice President established in the Twenty-Fifth Amendment, ratified in 1967. "], "subsections": [{"section_title": "Current Provisions in Brief", "paragraphs": ["The Constitution, in its original text and four subsequent amendments, provides the basic conditions of presidential and vice presidential terms and tenure.", "Constitution : Article II, Section 1, of the Constitution, ratified in 1788, sets a four-year term of office for the President and Vice President. Twelfth Amendment: This amendment extended the same qualifications for the President to the office of Vice President. Twentieth Amendment : Section 1 of this amendment, ratified in 1933, sets the expiration date for these terms at noon on January 20 of each year following a presidential election. Twenty- S econd Amendment : Section 1 of this amendment, ratified in 1951, states that no person shall be elected to the office of President more than twice. It also limits the number of times a Vice President who becomes President may subsequently be elected to that office, depending on when the Vice President succeeds to the presidency. Twenty- F ifth Amendment : Sections 1 and 2 of this amendment, ratified in 1967, do not directly affect terms and tenure of the President and Vice President, but provide for succession of the Vice President and the filling of vice-presidential vacancies."], "subsections": []}, {"section_title": "Contemporary Options for Change", "paragraphs": ["Proposals to change the length of the President's term of office, or to limit the number of terms to which a President could be elected, were introduced in Congress beginning in the early 19 th century. The first category included constitutional amendments for a five-, six-, seven-, or eight-year term of office, usually coupled with limitation to a single term in office. By the 20 th century, a six-year single term of office had become the preferred alternative. The Twenty-Second Amendment, ratified in 1951, achieved the goal of limiting the number of times a person could be elected President, but did not alter the four-year term set in Article II. Since that time, most proposed amendments related to the President's term and tenure have (1) called either for a six-year presidential term, usually without the possibility of reelection; or (2) proposed repeal of the Twenty-Second Amendment, allowing individuals to be elected President more than twice. "], "subsections": []}, {"section_title": "A Single Six-Year Term for the President and Vice President", "paragraphs": ["The idea of a six-year term for the President and Vice President has a long history: the first amendment to this effect was introduced in 1826, in the 19 th Congress (1825-1826). According to earlier CRS research, a total of 181 such amendments had been introduced through the 96 th Congress (1979-1980). Thirty-one more amendments that would have established the six-year term, either as \"stand-alone\" proposals, or as part of more inclusive plans that included changes in congressional terms and term limits, were introduced between the 97 th (1981-1982) and 104 th (1995-1996) Congresses, for a total of 212. Since then, up through and including the 116 th Congress (2019-) however, no amendment proposing a six-year term has been introduced.", "The basic provisions of most of these proposals called for a six-year term for the President and Vice President, with each limited to a single term. In addition, most contained a variant of the existing Twenty-Second Amendment provision for Vice Presidents who succeed to the highest office: they would be eligible for election in their own right to a term as President provided they had served less than three years of the term to which their predecessor was elected. Additionally, in the interest of constitutional consistency, most of these proposed amendments would also have specifically repealed the Twenty-Second Amendment."], "subsections": [{"section_title": "For and Against", "paragraphs": ["Over the years, proponents of the single six-year term have deployed a range of arguments in support of their position. Perhaps most prominent, they assert that it would end the \"permanent campaign\" for reelection, which is said to begin as soon as a newly elected President is inaugurated for a first term. According to this theory, the chief executive would be freed from the distraction of partisan political concerns associated with planning and campaigning for reelection, and would be able to concentrate on legislation, administration, and development of a program of public policy. Decisions on major issues would, proponents claim, be less likely to be judged by their impact on the President's reelection prospects. They maintain that this, in turn, would promote greater consistency in foreign and domestic policy, as the President would be able to focus exclusively on the value and utility of policy proposals, rather than on their political implications. A six-year term would have additional substance, they assert, because it would give the President more time to advocate for and implement these policies, to adjust them as necessary, and to monitor their success; this would give the President's initiatives \"a fair chance to work.\" Former President Jimmy Carter (1977-1981) endorsed the longer single presidential term, adding another dimension when he suggested that a President who had no prospect of reelection might enjoy greater moral authority and credibility, and perhaps greater influence on the course of policy formulation, since he could not be accused of political motivation (i.e., his interest in securing a second term). Similarly, another commentator, noting the length of contemporary presidential election campaigns, suggested that a President who serves a single six-year term would not need to focus two or more years on renomination and reelection. Instead of turning to reelection almost immediately after assembling an administration \"team,\" he or she could devote greater energy to the demands of office as chief executive, a process that could lead to greater stability and continuity in policy formation and administration. ", "Critics of the proposal suggest that, at its most basic, restricting the President to a single term is fundamentally undemocratic because it deprives voters of the right to choose their preferred candidate for the office. They rebut the arguments of those who claim a single term will help a President concentrate on policy issues, noting that Presidents in their second terms have often struggled to implement their programs because, as \"lame ducks,\" they have lost influence in Congress and the larger political arena. A one-term chief executive who did not enjoy the prospect of reelection would, they claim, be a lame duck the day he or she took office. Far from being more devoted to questions of policy, opponents suggest that a one-term President might be too well insulated from the give and take of political discourse, and less responsive to the will of the people. As one commentator notes: \"a [P]resident protected from public opinion is also a [P]resident unrestrained by it. If he is free to act in the national interest ... that national interest will be as he defines it. And will his definition be superior to the one that is hammered out, under the current system, in the heat of a reelection contest?\" In the final analysis, opponents maintain that the single, but longer, term would extend the tenure of failed or simply inadequate Presidents two years beyond their current termination date, while reducing the possible tenure of more capable chief executives by the same length of time: six years in office is too long for a failed President, they say, and too short for a successful one. "], "subsections": []}, {"section_title": "History of Congressional Activity", "paragraphs": ["As noted earlier, the proposal to establish a single six-year term for the President and Vice President was a hardy perennial from the early days of the republic: 212 such amendments were introduced between the 19 th through 104 th Congresses. The format varied: most of these amendments, particularly those introduced before the 1950s, proposed only a single six-year term for the President and Vice President, while others introduced since ratification of the Twenty-Second Amendment included provisions for its repeal. Some versions also prohibited a person elected President from being subsequently elected Vice President. In earlier years, the frequency of these proposals tended to cluster during periods in which an incumbent President was known or suspected to be seeking a third term; they were generally introduced in reaction to such prospects. These periods include", "the 1870s, when President Ulysses Grant contemplated a third term in both 1876 and 1880; between 1905 and 1916, presumably in response to President Theodore Roosevelt's consideration of a third term; and the 1930s through the late 1940s, first in anticipation of, and later in response to, President Franklin Roosevelt's election to a third and fourth term.", "The most recent substantial legislative activity took place during the 92 nd (1971-1972) and 93 rd (1973-1974) Congresses. Proposals for a six-year term were arguably connected to congressional concern during the Vietnam War era of the 1960s and 1970s about the perceived growing imbalance of power and authority in favor of the President and at the expense of Congress\u2014an \"imperial presidency\" \u2014and later in the context of the Watergate scandal of 1972-1974. In the 92 nd Congress, the Senate Judiciary Committee's Subcommittee on Constitutional Amendments held two days of hearings, on October 28 and 29, 1971, on S.J.Res. 77. A hearing in the House Judiciary Committee's Subcommittee on Crime on H.J.Res. 76 and H.J.Res. 127 , held on September 26, 1973, in the 93 rd Congress, were the last congressional activity (beyond the introduction and committee referral of proposed amendments) dealing with this question through the time of the present writing.", "Beginning in the late 1970s, the volume of amendment proposals declined, so that the most recent stand-alone amendments were offered in the 101 st Congress (1989-1990), including H.J.Res. 6 , introduced by Representative Jack Brooks; H.J.Res. 52 , introduced by Representative Bill Frenzel; and H.J.Res. 176 , introduced by Representative Frank Guarini. These proposals received no action beyond committee referral. In subsequent Congresses, the six-year presidential term was incorporated into several proposals that sought to establish a comprehensive system of term limits for both Congress and the President. In the 102 nd Congress, for instance, H.J.Res. 28 , introduced by Representative Richard Schulze, sought to establish a single six-year presidential and vice presidential term, but retained the two-term limit. This resolution also proposed a three-year term for Representatives and a rotation in office requirement that effectively limited Representatives to six consecutive three-year terms and Senators to three consecutive six-year terms, or 18 consecutive years in either case. In the 104 th Congress, Representative Frank Mascara introduced H.J.Res. 28 , which proposed a single six-year term for the President and Vice President, within the context of a four-year term for Representatives and an absolute limit of 12 years of service in one house for Members of both chambers of Congress. No action beyond committee referral occurred on either of these two most recent proposals."], "subsections": []}]}, {"section_title": "Repeal of the Twenty-Second Amendment", "paragraphs": ["The first efforts to repeal the Twenty-Second Amendment began in 1956, within five years of the amendment's ratification. Since that time, 46 proposed amendments that would eliminate the two-term presidential election limit have been introduced in Congress, most in the House of Representatives, and most recently in the 113 th Congress.", "Several early proposals to repeal the Twenty-Second Amendment were the subject of congressional interest in the 1950s, but after this period, congressional interest in repeal of the amendment, as measured by the introduction of relevant proposed amendments, receded for some years. Among many other contributing factors, the lack of congressional activity could arguably be attributed to the fact that, with time, the amendment and its effective two-term limit came to be accepted as an increasingly settled element of the constitutional order.", "Another factor that may have contributed to lack of support for eliminating the two-term restriction may be found in the turbulent history of the 1960s and 1970s. Public sentiment for repeal of the Twenty-Second Amendment is arguably associated with support for extending the tenure of popular two-term chief executives whose presidencies are perceived at the time as having been successful. If so, then this era, during which five Presidents held office in a period of 20 years, notably lacked this catalyst. During the two decades between the end of Eisenhower's second term in 1961 and the election of President Ronald Reagan in 1980, two presidencies ended prematurely, John Kennedy's by assassination in 1963 and Richard Nixon's by resignation in 1974. Two other Presidents were defeated for election: Gerald Ford, who succeeded as President when Richard Nixon resigned in 1974, lost his bid for election in 1976, while his successor, Jimmy Carter, failed to win reelection in 1980. The fifth President to serve during this period, Lyndon Johnson, withdrew as a candidate for reelection in 1968 due in large part to widespread opposition to U.S. military action in Vietnam.", "Beyond the immediate ambit of legislative proposals, the idea, if not the reality, of repealing the Twenty-Second Amendment does appear to gain publicity and a level of at least theoretical support when term-limited Presidents approach the end of their time in office. As noted earlier in this report, there was some interest in the possibility of a third term by President Eisenhower in 1960, notwithstanding the President's documented health problems.", "In 1973, following his reelection to a second term, supporters of President Richard Nixon established an organization to promote repeal of the Twenty-Second Amendment as the President brought an end to conflict in Vietnam, pursued arms control and d\u00e9tente with the Soviet Union, and successfully opened informal U.S. relations with China after 24 years of hostility. As the President was increasingly implicated in the events stemming from the Watergate break-in, however, this effort was abruptly abandoned.", "Again in 1985, as Ronald Reagan entered his second term, suggestions emerged that repeal of the Twenty-Second Amendment might enable a third term for the popular President. Although Reagan himself indicated his support, he maintained only future Presidents should be eligible for additional terms in office. Supporters in Congress and elsewhere, however, mounted a public campaign to repeal the amendment in time for a third Reagan term in 1989. Although greeted enthusiastically by the President's supporters, the proposal met with mixed reviews in the press and among the general public. Substantial Republican losses in the 1986 congressional elections, followed almost immediately by revelation of the Iran-Contra events, largely dampened further enthusiasm for repeal.", "The question of repeal regained support early in President Bill Clinton's second term in office, when five relevant amendments were introduced in the 105 th Congress (1997-1998), while more recently, in 2014, Change.org, a petition website, sponsored an \"Obama-for-3\" Political Action Committee that circulated an online petition to repeal the amendment and thus enable President Barack Obama to run for a third term.", "In contrast to these occasional surges in support for repeal that have tended to emerge during the second term of a popular President, the Roper Center reports that at no time since ratification of the Twenty-Second Amendment has public opinion favored its repeal. In 2013, the most recent findings reported by Roper, 17% of respondents favored \"changing the Constitution and removing the limitation so a President could be elected to more than two terms,\" while 81% were opposed, and 1% had no opinion."], "subsections": [{"section_title": "For and Against", "paragraphs": ["Many of the arguments raised in favor of and opposition to repeal of the Twenty-Second Amendment were cited earlier in this report. Briefly, proponents assert that the amendment is inherently undemocratic, in that it prohibits the voters from electing a qualified candidate they favor. In most instances, they suggest that Presidents would continue to limit themselves to two terms, or be limited by external constraints, such as political considerations, health, or other reasons, unless there were pressing need and demand for a third term. In periods of national or international crisis, they maintain that the Twenty-Second Amendment is a straightjacket that prevents the nation from retaining an experienced and trusted leader at a time when continuity in presidential leadership may be essential. As journalist John B. Judis asserted in The New Republic ,", "The 22 nd Amendment deprives the United States of the possibility of successful second acts. It has also made a virtue of inexperience among American presidents. The practice of having an entirely new president every four or eight years has led to flailing and mistakes during a president's first year or two in office\u2026. Repealing the 22 nd Amendment would not eliminate the possibility of presidential stumbles, but might lessen them, particularly if the country faced the prospect of electing an untutored new executive in the midst of a foreign policy crisis.", "Finally, as is the case with arguments against the single six-year term, proponents of repeal suggest that every President who is reelected becomes a lame duck the day he takes the oath for his second term, handicapped by diminished influence and authority. The prospect of a third term, they argue, would help avoid the slow diminution of influence most Presidents experience during their second terms.", "Supporters of presidential term limits in general and the Twenty-Second Amendment in particular argue that eight years is time enough for any individual in a position of such great power as the presidency of the United States. The intent of the founders for a time-limited presidency, they assert, was clearly expressed at the Constitutional Convention, where the delegates accepted the prospect that Presidents might serve an additional term of office only after lengthy debate. Moreover, they suggest that temptation to accrue excessive power to the executive, even with the best of intentions, is a constant danger to the constitutional model of a balanced federal government embracing a system of checks and balances within a framework of separation of powers. They note that recent history provides what they regard as troubling examples of this impulse to concentration (e.g., the \"imperial presidency,\" as noted earlier in this report), and the \"unitary presidency.\" Presidential term limits, they conclude, are an essential check to any possibility of a \"cult of personality\" and the potential for excessive presidential power."], "subsections": []}, {"section_title": "History of Congressional Activity", "paragraphs": ["Amendment proposals that call for the repeal of the Twenty-Second Amendment have generally incorporated simple language and the single requirement of repeal. The legislative language used most frequently has been, \"[t]he twenty-second article of amendment to the Constitution of the United States is hereby repealed.\" As was noted earlier in this report, repeal of the Twenty-Second Amendment appeared in some proposals to establish a single six-year term for President. Unlike the single six-year term approach, which was last introduced in the 94 th Congress, simple repeal continued to be a live option until comparatively recently.", "As noted previously in this report, the first joint resolutions to repeal the Twenty-Second Amendment were introduced in the 84 th Congress (1955-1956), in 1956, less than five years after the amendment had been ratified. Several early proposals to repeal the amendment were the subject of congressional interest in the 1950s, most notably S.J.Res. 11 in the 86 th Congress (1959-1960). This measure was accorded hearings in 1959 by the Senate Judiciary Committee's Subcommittee on Constitutional Amendments, the highlight of which was former President Harry Truman's testimony in its support. The subcommittee's vote to approve the proposal and report it to the full committee on September 1 of that year ultimately proved to be the high water mark of the repeal movement in the 1950s. Following this period, congressional interest in repeal of the amendment, as measured by the introduction of relevant proposed amendments, receded for some years, but revived in the 1970s. From that time forward, proposals to repeal the Twenty-Second Amendment continued to be introduced in almost every Congress through the first decade of the 21 st century. The most recent was H.J.Res. 15 in the 113 th Congress (2013-2014), which was introduced on January 4, 2013, by Representative Jose Serrano. The language of H.J.Res. 15 was typical of many repeal proposals, stating that \"[t]he twenty-second article of amendment to the Constitution of the United States is hereby repealed.\" The resolution was referred to the House Committee on the Judiciary's Subcommittee on the Constitution and Civil Justice, but no further action was taken. "], "subsections": []}]}]}, {"section_title": "Presidential Terms and Tenure: Perspectives", "paragraphs": ["The terms of the President and Vice President were originally established at four years, with eligibility for reelection, by the Philadelphia Convention of 1787, which drafted the U.S. Constitution."], "subsections": [{"section_title": "The Philadelphia Convention: Debate and Decisions on Terms and Tenure", "paragraphs": ["The questions of presidential term length and reeligibility\u2014whether the executive would be eligible to run for more than one term\u2014were the subject of considerable discussion at the Constitutional Convention, which met in Philadelphia from May 28 through September 17, 1787. The delegates were generally divided between two factions\u2014\"federalists\" and \"anti-federalists.\" Federalists generally sought to establish a robust federal government vested with the power to tax, exercise authority over interstate commerce and relations, and manage the nation's international trade, foreign relations, and defense policy with a stronger hand. An executive who possessed considerable independence and authority was a key element in the federalist vision. Although considerable overlap existed between the two groups or tendencies, \"anti-federalists\" generally opposed a stronger central government. They tended to fear greater concentration of authority as a threat to individual liberty and states' rights, preferring a less powerful executive who possessed limited authority and more closely resembled the President of Congress under the Articles of Confederation, or a plural executive that would include up to three members who could check each other. ", "Early in its deliberations, the convention rejected the concept of a plural executive, however, settling on a single President. It then moved to address two fundamental issues concerning tenure:", "The first centered on duration of the executive's term. Most state governors at that time served terms of one or two years. There appears to have been agreement among most of the delegates that whatever view they took of the federal executive, the office should have a longer term to guarantee stability and continuity in the conduct of government. During the convention, nothing shorter than a three-year term received serious consideration. The second was the issue of reelection: should the executive be limited to a single term or be permitted to run for reelection to additional terms, and, if so, how many? Here, the convention delegates sought to balance the potential advantages of continuity and perspective provided by a long-serving executive with their still-fresh memories of domineering colonial governors and pervasive concern that an infinitely reelectable executive might lead to dictatorship or monarchy.", "Both these questions were influenced by the question of who should elect the President: from the beginning, many delegates assumed the executive would be chosen by the \"legislature\" (Congress). It was widely held that in these circumstances a single term would be necessary to avoid excessive congressional influence over the presidency, or worse, the unseemly spectacle of the executive scrambling to ensure congressional support for reelection to a second term. At least a solid minority of delegates, which occasionally expanded to a majority, also opposed eligibility for reelection for the executive on general principle. They feared this provision might result in lengthy or even indefinite tenure for Presidents, providing them the opportunity to accrue overweening power in the executive branch. Other delegates, however, were more concerned about the need, as they saw it, to establish an independent, energetic executive; the fact that the President might be eligible for reelection presented less difficulty for them. Debate over these issues continued off and on for two months, with the convention changing position several times before it reached a final compromise.", "As the convention opened, the delegates initially debated a three-year and a seven-year term, both in the context of election by Congress. In early June, they agreed to seven years without eligibility for reelection. Two weeks later, they revisited this decision, at the same time voting to move election from the national legislature to electors chosen in the states. The option for choice by electors was seen by some delegates as eliminating congressional influence over, or control of, the presidential election, which was regarded as an important element of separation of powers. This first hint of what ultimately emerged as the electoral college was followed by a vote to eliminate the prohibition on reelection. At the same time, the delegates voted to shorten the executive's term to six years, but the issue was not yet settled. On July 24, dissatisfied with their earlier choices, the convention voted to restore election by Congress, and followed up immediately with a heated debate on a proposal to reinstate the one-term requirement. The record suggests that tempers had grown short by this time, and even James Madison's restrained style as recorder of the proceedings does not conceal the apparent passion of the debate that followed. Supporters of independent election, still smarting from the recent reversion to congressional election, vehemently opposed the motion, while partisans of the single term and legislative supremacy countered, perhaps facetiously, with various proposals, including an indefinite term (i.e., the executive would serve \"during good behavior\") and terms of 11, 15, and even 20 years. After two days of further debate, the Convention referred the following resolution to the Committee on Detail by a vote of six states to three: \"that a National Executive be instituted\u2014to consist of a single person\u2014to be chosen by the Natl. legislature\u2014for the term of seven years\u2014to be ineligible a 2d time.\" The Committee on Detail, which was charged with organizing and fleshing out the convention's decisions, returned its draft to the full convention on August 6; as instructed, the report provided a seven-year term, without a provision for reelection.", "The matter was still not settled, however. The delegates continued to debate over who should elect the President, with term length and reelection now recognized as a subset of the greater question. By this time, proposals for election of the President by the state legislatures, by electors chosen by lot from among the Members of Congress, and even popular election, had been considered and rejected, but agreement still eluded the delegates. One modern account of the convention notes that some delegates had left the convention to attend to personal business and professional matters after almost three months of nearly continuous, six-day-a-week sessions, while those who remained shared a growing inclination to finish the project. Debates grew shorter and members were quicker to accept compromise solutions to persistent disagreements. In this context, recognizing they were at an impasse, the delegates voted on August 31 to refer the presidency question, along with other unresolved issues, to a Committee on Postponed Matters (also known as The Committee of Eleven, for the number of its members). As active participants, the committee members were fully aware of the protracted struggle over presidential election, term, and reelection that had continued since early June. They chose to offer a fresh take on the issue: their report on the presidency, submitted on September 4, provided a four-year term, eligibility for reelection, and, key to the issue, a reworked method of election, by an electoral college appointed in each state \"in such manner as its Legislature may direct.\" The committee's novel solution ultimately resolved the impasse. Although several die-hard opponents continued to argue in favor of legislative election, a single term, or shorter terms, all such motions were defeated by wide margins. The convention had finally reached agreement on term and tenure for the President and the recently conceived office of Vice President. The Committee on Style and Arrangement reworked the various decisions into a form recognizable as the Constitution, and, after some final revisions, the document was approved and proposed to the states for ratification on September 17, 1787, with its now-familiar wording:", "The executive Power shall be vested in a President of the United States of America. He shall hold his Office during the Term of four Years, and, together with the Vice President, chosen for the same Term, be elected as follows.", "In the ensuing campaign for its approval in the states, the federalists cited \"energy in the executive,\" stability in government, and separation of powers in defense of the presidential term and tenure. Conversely, opponents warned that reeligibility and the potential for lengthy or even indefinite terms of office would lead to an excess concentration of power in the presidency, and a tendency to dictatorship or even monarchy. In the final analysis, however, it is arguable that many doubts about these arrangements were mitigated, at least in the short run, by the near certainty that the universally respected George Washington would serve as first President under the Constitution."], "subsections": [{"section_title": "Vice Presidential Vacancies: A Constitutional Oversight?", "paragraphs": ["The Constitution addressed the question of presidential vacancies in the following language in Article II, Section 1, clause 6:", "In case of the Removal of the President from Office, or of his Death, Resignation, or Inability to discharge the Powers and Duties of the said Office, the same shall devolve on the Vice President, and the Congress may by Law provide for the Case of Removal, Death, Resignation or Inability, both of the President and Vice President, declaring what Officer shall then act as President.", "It did not, however, make similar provision for vacancies in the vice presidency, so that office became vacant whenever the Vice President succeeded as President, or left office for any other reason, and remained so for the balance of the presidential term. The lack of such a provision was eventually addressed by the 25 th Amendment, which also provided more explicitly for cases of presidential disability."], "subsections": []}]}, {"section_title": "Historical Patterns in Presidential Tenure", "paragraphs": ["As the nation's first President, George Washington set many precedents. One of the most enduring is the tradition that he limited himself, and future chief executives by his example, to not more than two terms in office. His action was frequently cited and generally emulated until Franklin Roosevelt was elected to a third term in 1940. Further, Roosevelt's unprecedented four-term presidency then spurred the subsequent ratification of the Twenty-Second Amendment, which conferred constitutional force on the practice. The two-term tradition is thus widely regarded as the norm, but the record of presidential tenure is more complex: only 12 of the 44 Presidents who served between 1789 and 2017 were elected to, and served, two full consecutive terms, or 96 months, in office. When deaths in office and the vicissitudes of electoral politics are taken into account, average presidential tenure declines to 62 months for the nation's 227 years and 9 months of government under the Constitution between Washington's inauguration on April 30, 1789 and that of Donald J. Trump on January 20, 2017. The average tenure in office of Presidents has fluctuated over time. This is attributable in part to presidential mortality and the renomination and reelection rates of incumbents. In addition, the average length of presidential terms arguably reflects the prevailing levels of political disquiet and/or socioeconomic volatility in the nation during given periods. Moreover, the two-term tradition was persistently challenged during the nation's first century of constitutional government, while proposals that would have extended the executive's term to six years and/or limit Presidents to a single term continued to be offered into the late 20 th century and beyond in the case of the latter."], "subsections": [{"section_title": "Presidential Tenure, 1789-1825: The Era of the Founders", "paragraphs": ["Although the presidential election of 1800 was among the most bitterly contested in American history, the period between 1789 and 1825 was characterized by stability in presidential tenure: four of the nation's first five Presidents\u2014Washington (1789-1797), Jefferson (1801-1809), Madison (1809-1817), and Monroe (1817-1825)\u2014served two consecutive terms. John Adams (1797-1801) was the outlier, defeated in the 1800 presidential election by his Vice President and longtime rival. Presidents during this period served an average of 86 months, a length of tenure matched in a comparable period only recently, between 1981 and 2017. This stability can be attributed to several factors, notably the triumph of the Jeffersonian Republican Party and the demise of the Federalists, which led to the nation's only period of de facto one-party government, at least on the federal level. Presidential nominees were generally selected by the Jeffersonian caucus (later known as the Democratic-Republicans) in Congress during this period, which settled on the incumbent Secretary of State for the succession elections of 1808 and 1816. The latter part of this period was widely referred to at the time as \"the Era of Good Feelings,\" particularly at its zenith during the administration of James Monroe (1817-1825). The Era of Good Feelings came to an abrupt end with the contentious election of 1824, which coincided roughly with the death or retirement from public life of the last of the generation of the Founders."], "subsections": [{"section_title": "Setting the Two-Term Precedent", "paragraphs": ["George Washington, the \"indispensable man,\" set a precedent for presidential tenure in 1796 when he announced his retirement after two terms (1789-1797), but there is little evidence he based the decision on a personal understanding that the Constitution implicitly limited his tenure. Washington's announcement, which was incorporated in his renowned 1796 Farewell Address, actually gave no indication that he considered his action to set a precedent for his successors. Rather, he cited his own weariness, and particularly the growing infirmities of age, as primary factors in his decision: \"every day the encreasing [ sic ] weight of years admonishes me more and more, that the shade of retirement is as necessary to me as it will be welcome.\" Washington's immediate successor, John Adams (1797-1801), was defeated in the tumultuous election of 1800, and never faced the question of how many terms he would serve. ", "According to some modern scholars, the two-term tradition is more accurately attributed to Thomas Jefferson (1801-1809), who had expressed concern about \"perpetual reeligibility\" in the presidency as early as 1788. As his own second term drew to a close, he was petitioned by the Vermont legislature to consider another run. Jefferson declined, stating in his reply his belief that", "[i]f some termination to the services of the Chief Magistrate be not fixed by the Constitution, or supplied by practice, his office, nominally four years, will in fact become for life, and history shows how easily that degenerates into an inheritance. Believing that a representative Government responsible at short periods is that which produces the greatest sum of happiness to mankind, I feel it a duty to do no act which shall essentially impair that principle, and I should unwillingly be the person who, disregarding the sound precedent set by an illustrious predecessor [George Washington], should furnish the first example of prolongation beyond the second term of office. ", "Jefferson's decision acquired the force of tradition, at least in the short run, and was frequently attributed to Washington. Three of Jefferson's four immediate successors, Madison, Monroe, and Andrew Jackson (1829-1837), who, arguably, would have been able to secure reelection, retired at the close of their second terms, while the fourth, John Quincy Adams (1825-1829), was defeated for reelection in 1828 by Jackson. The vice presidency during this period had a similar pattern of stability, with the eight incumbents serving an average tenure of 67 months. "], "subsections": []}]}, {"section_title": "Presidential Tenure, 1825-1901: Decline of the Two-Term Presidency", "paragraphs": ["In contrast to the relative stability of presidential tenure during the first decades of government under the Constitution, the balance of the 19 th century was more volatile, reflecting the contentious political, social, and economic developments experienced by the nation during this period.", "With the retirement of James Monroe in 1824, the \"Era of Good Feelings\" Democratic-Republican coalition fractured under sectional pressure, perhaps most notably due to the candidacy of Andrew Jackson, who epitomized the rise of the west and its challenge to the settled order of the previous decades. Four candidates contested the presidency, but none of them gained the requisite majority of electoral votes. In the only contingent election to date under the provisions of the Twelfth Amendment, the House of Representatives picked Secretary of State John Quincy Adams, one of the \"establishment\" candidates, despite the fact that Jackson had gained more popular and electoral votes. Jackson denounced the House's action as a \"corrupt bargain,\" and although his charge was never proved, he used it in his successful campaign to defeat Adams in the election of 1828.", "Between 1837, when Andrew Jackson left office, and 1901, when William McKinley was inaugurated for a second term, only Abraham Lincoln (1861-1865) and Ulysses Grant (1869-1877) were reelected, and only Grant served two full consecutive terms. During these 64 years, 18 Presidents held office for an average of 43 months each, less than a single complete term."], "subsections": [{"section_title": "The Single Term Presidency: Design and Circumstance", "paragraphs": ["Throughout much of this period, the concept of a single term for Presidents, rather than the two-term tradition, enjoyed support as an appropriate norm for executive tenure, both by design and circumstance.", "From the standpoint of amending the Constitution to limit Presidents to a single term, Jackson himself recommended that Congress consider an amendment that would establish a single four- or six-year presidential term in his Annual Messages to Congress every year between 1830 and 1835. William Henry Harrison (1841) recommended a constitutional amendment to prohibit \"the eligibility of the same individual to a second term of the Presidency\" in his 1841 inaugural address, while his Whig Party called for \"a single term for the presidency\" three years later in 1844, in its first published presidential platform. Although similar declarations do not appear in the Democratic platforms of the time, historian Michael Nelson notes that many Democrats supported the proposal; moreover, Democratic Presidents James Polk (1845-1849) and James Buchanan (1857-1861) announced their intention to serve only one term before they entered office. In fact, none of the eight Presidents who served between Jackson and Lincoln was elected to a second term. While such events indicate the acceptance of the single-term presidency during this period, the short tenures of these chief executives are arguably also due to the vagaries of political life: electoral defeat or rejection by their parties, and, in two instances, death in office. ", "Throughout the balance of the 19 th century, the ideal of the two-term presidency, while often deferred to, actually remained the exception, rather than the rule, arguably, both by design and circumstance. At the same time, proposals for a single-term amendment to the Constitution continued to be offered in Congress. As noted previously, in 1864 Abraham Lincoln became the first President elected to a second term since Jackson, while Ulysses S. Grant (1869-1877) was the only chief executive between Jackson and Woodrow Wilson (1913-1921) to serve two full consecutive terms in office. In 1876, Republican Party leaders, with Grant's tacit approval, explored the possibility of a third term for the incumbent, but the force of tradition, combined with the record of his tenure in office, led to a public outcry, and this trial balloon was eventually deflated. Of the other chief executives holding office during this period, Rutherford B. Hayes (1877-1881) declined to seek a second term; moreover, he also proposed a single-term amendment in his inaugural address. Grant sought the GOP nomination again in 1880, permitting his name to be placed in nomination at the Republican National Convention. While he gained a plurality of delegate votes in the first ballot, Grant was unable to attain a majority. Instead, James A. Garfield (1881), a \"dark horse\" reform candidate won the nomination on the 36 th ballot and the subsequent general election. Garfield was shot on July 2, 1881, less than four months after his inauguration, and lingered into September of that year before succumbing to his wound. He was succeeded by his Vice President, Chester Arthur (1881-1885), who was denied nomination for a second term by his Republican Party. Arthur's successor, Democrat Grover Cleveland, advocated a single-term amendment in his acceptance message to the Democratic National Convention in 1884, but ultimately became unique among American Presidents. Cleveland served two nonconsecutive terms, 1885-1889 and 1893-1897; his tenure was interrupted when he was defeated for reelection by Benjamin Harrison (1889-1893). He accomplished the unique feat of beating his successor four years later, in 1892, and returning for a second term. William McKinley (1897-1901) won election in 1896, and with his 1900 victory, became the first President elected to a second term since Grant. Three months into his second term, McKinley notified his Cabinet that he would respect the two-term tradition, but three months after making that announcement, he was assassinated, and was succeeded by Vice President Theodore Roosevelt.", "The period between 1825 and 1901 thus presents a contrast in presidential tenure to the era of the founders. A wide range of factors arguably contributed to the change: the death of five incumbent Presidents, two due to natural causes and three to assassination; chronic political volatility; the occurrence of the Civil War and its aftermath; recurrent financial crises and subsequent economic downturns. All these events, as well as continued support for a one-term limit, could be cited as contributing to shorter average presidential tenure between 1837 and 1901. After Jackson, the 18 chief executives who served during this period spent an average of 43 months in office, considerably less than the overall historical mean of 61 months.", "Presidential tenure during the earlier part of the era, between 1837 and 1861, serves to highlight the comparative political instability of the post-Jackson period, when the nation seemed to move inevitably toward disunion. During these tumultuous 24 years, presidential tenure reached a low point: the eight chief executives from Van Buren to Buchanan served an average of 36 months, less than one full term each. The period between 1861 and 1901, which began with Lincoln's inauguration and the onset of the Civil War, and concluded with the death of William McKinley, was only marginally less volatile: the 10 Presidents from Lincoln through McKinley averaged 48 months in office, a single term."], "subsections": []}]}, {"section_title": "Tenure in the Early 20th Century", "paragraphs": ["The assassination and death of William McKinley in September 1901, and the accession of Vice President Theodore Roosevelt, provides a break with the conditions of presidential tenure that prevailed in the 19 th century. Average presidential tenure lengthened between 1901 and 1945, growing to more than 74 months, due largely to the record time in office of Franklin D. Roosevelt (1933-1945), and the terms served by Theodore Roosevelt (1901-1909) and Woodrow Wilson (1913-1921). This was substantially longer than the mean of 61 months for all chief executives, especially when compared with the 43-month average time in office of Presidents who served between 1837 and 1901.", "Most early 20 th century Presidents prior to Franklin Roosevelt observed the two-term tradition, although several considered the prospect of a third. After serving most of McKinley's second term, Theodore Roosevelt was elected President in his own right in 1904. He declared his adherence to the two-term tradition in a statement issued on the night of his election victory:", "On the 4 th of March next I shall have served three and a half years and this ... constitutes my first term. The wise caution which limits the President to two terms regards the substance and not the form; and under no circumstances will I be a candidate for or accept another nomination.", "Roosevelt kept his promise, retiring in 1908, but dissatisfaction with his chosen successor, William Howard Taft (1909-1913), led the former President to run again in 1912, explaining that in 1904 he had meant to say he would not seek a third consecutive term. Denied the Republican nomination, Roosevelt ran as the Progressive Party candidate, thus dividing the Republican vote and guaranteeing the election of Democratic nominee Woodrow Wilson.", "The Democratic National Convention responded to Theodore Roosevelt's third-party bid by adopting a plank in its 1912 platform that called for \"an amendment to the Constitution making the President of the United States ineligible to reelection.\" Following the election, the Democratic-controlled 62 nd Congress moved to implement the proposal, and a single-term amendment passed the Senate by the requisite two-thirds majority in February 1913, even before Wilson's inauguration. The Senate resolution was referred to the House Judiciary Committee, but no further action was taken on it, despite suggestions that it enjoyed substantial support in the House of Representatives, and it expired with the end of the 62 nd Congress on March 4, 1913. The reason the amendment stalled was not explained until 1916, when it was revealed Wilson himself had written to a trusted Representative in February relating his opposition to the single-term amendment. When the House Democratic leadership learned of the President-elect's opinion, they bowed to his wishes and shelved the amendment.", "According to one historian, Wilson himself contemplated running for a third term eight years later, in 1920. Although crippled by a stroke suffered in October 1919, the President may have envisioned his third-term candidacy as an opportunity for a national referendum on his plan for the League of Nations, which had been stalled in the Senate for more than a year. Beyond discussion among Democratic Party leaders, nothing came of these suggestions. The lack of follow-through is attributed variously to rumors of Wilson's ill health, the influence of the two-term tradition, a robust succession struggle within the Democratic Party, and anxieties that a referendum on the League would lead to repudiation of the party by the voters. Although the 1920 Democratic National Convention required 44 ballots before it picked James M. Cox as the party's standard-bearer, President Wilson's name was never placed in nomination.", "None of Wilson's three immediate successors served two full terms. Warren Harding (1921-1923) died in office in 1923; he was succeeded by Calvin Coolidge (1923-1929), who was elected in his own right in 1924, but declined to seek a second term in 1928, and ultimately by Herbert Hoover (1929-1933), who was defeated for reelection in 1932. One account asserts, however, that Coolidge (1923-1929) was actively interested in the Republican nomination in 1928, had it been offered to him. He continued to enjoy broad popularity as the election approached, and a substantial number of party leaders and journalists continued to suggest his candidacy. According to Charles Stein, writing in The Third - Term Tradition , the President refused to commit himself unless he was sure of an overwhelming demand. As the level of support for an additional Coolidge candidacy stalled, the President ended speculation with a characteristically laconic statement, which he issued without additional comment on August 2, 1927: \"I do not choose to run for President in 1928.\""], "subsections": []}, {"section_title": "Breaking With Tradition: A Third and Fourth Term for President Franklin D. Roosevelt", "paragraphs": ["The two-term mold was finally broken by President Franklin D. Roosevelt in 1940. Following his 1936 landslide reelection to a second term, it seemed likely that he would retire in 1940. Although some supporters urged him to seek a third term, the President refused to commit himself, and, according to some historians, he may have been undecided at the time. ", "In September 1939, the political landscape was transformed by the outbreak of war in Europe. The conflict erupted into a world crisis in the spring and summer of 1940, as Germany first overwhelmed Denmark and Norway in April, and then attacked France, Belgium, the Netherlands, and Luxembourg in May, crushing resistance in less than six weeks. By the time the Democratic National Convention opened on July 15, the President had decided to accept his party's nomination, but only if it came in the form of a draft. With characteristic indirection, Roosevelt authorized Senator Alben Barkley to declare from the convention platform that \"[h]e (President Roosevelt) wishes in all earnestness and sincerity to make it clear that all the delegates to this Convention are free to vote for any candidate.\" The President's ambiguous statement was taken, as he intended it would be, as a signal that he would accept the nomination. The convention erupted in boisterous pro-Roosevelt demonstrations, and the President was duly nominated on July 17 by an overwhelming margin. ", "Little more than a year after President Roosevelt's 1940 reelection, the United States was thrust into the war following a surprise Japanese attack on U.S. military installations at Pearl Harbor in Hawaii, as well as on other American possessions in the Pacific. As the election of 1944 approached, the nation was deeply involved in World War II, and the injunction \"don't change horses in the middle of a stream\" seemed even more compelling than in 1940. Roosevelt, whose coronary artery disease and failing general health were concealed from the public, was elected to a fourth term in November. Exhausted by years of stress and overwork, however, he succumbed to what was believed to be a cerebral hemorrhage on April 12, 1945, less than three months after his fourth inaugural."], "subsections": []}]}, {"section_title": "The Twenty-Second Amendment and After: Presidential Tenure Since President Franklin Roosevelt", "paragraphs": ["President Roosevelt was succeeded in 1945 by his Vice President, Harry S. Truman. Within two years, in 1947, the 80 th Congress had proposed the Twenty-Second Amendment to the states, and in 1951, the states completed the ratification process. The amendment, examined in detail later in this report, provides that no person shall be elected more than twice to the presidency and also sets additional conditions of service for Presidents who succeed to the unfinished terms of their predecessors. ", "While Truman was not covered by the amendment, all 12 Presidents who have served since the amendment took effect have been subject to its provisions. Of these, five\u2014Dwight Eisenhower (1953-1961), Ronald Reagan (1981-1989), William (Bill) Clinton (1993-2001), George W. Bush (2001-2009), and Barack Obama (2009-2017)\u2014each served two full consecutive terms, while Truman's time in office was just three months short of a full eight years. These \"standard\" two-term presidencies contributed to lengthening the average tenure in office to just under 74 months for the period between the accession of Truman in 1945 and the inauguration of Donald Trump in 2017, making this the longest average tenure for any of the periods covered in this report since the early days under the Constitution.", "Embedded within this period, however, were two volatile decades: the years between 1961 and 1981, which witnessed a rate of presidential turnover comparable to that of the 1840s and the 1850s. Five Presidents served in the space of 20 years: John Kennedy (1961-1963), Lyndon Johnson (1963-1969), Richard Nixon (1969-1974), Gerald Ford (1974-1977), and Jimmy Carter (1977-1981). The reasons for their rapid succession in office tend to mirror those experienced by the chief executives of the similarly turbulent 1840s and 1850s: Kennedy was assassinated, but his four immediate successors arguably experienced the consequences of a series of adverse political and economic developments. "], "subsections": []}, {"section_title": "Constitutional Amendments Affecting Presidential and Vice Presidential Tenure", "paragraphs": ["More than a century after the Twelfth Amendment set qualifications for the vice presidency, the Twentieth, Twenty-Second, and Twenty-Fifth Amendments altered some of the original constitutional and early legislative provisions governing presidential and vice presidential terms and tenure."], "subsections": [{"section_title": "The Twentieth Amendment: Beginning Presidential Terms on January 20", "paragraphs": ["The Twentieth Amendment was proposed by Congress in 1932, and its ratification by the states was completed in 1933. It provided the first change in any aspect of presidential or vice presidential term and tenure since the Twelfth Amendment, in 1804, extended qualifications for the President to the Vice President, which was arguably only a technical adjustment made necessary by the amendment's establishment of separate votes for the two offices.", "From 1789 until 1937, presidential and vice presidential terms ended on March 4 of every year following a presidential election. This date, which originally applied to the opening day of the First Congress, was confirmed and extended to presidential and vice presidential terms of office by the Second Congress in 1792. This arrangement led to a four-month interval between the choice of presidential electors, which was set by Congress in 1845 for Tuesday after the first Monday in November \"of the year in which they are to be appointed\u2026.\" and the opening of the new Congress and the presidential inauguration, both of which, as noted above, occurred on March 4 of the following year. ", "Congressional sessions were also connected with the presidential term of office. Article I, Section 4, clause 2 of the Constitution required Congress to assemble \"at least once in every Year, and such meeting shall be on the first Monday in December, unless they shall by Law appoint a different Day.\" As a result, the first session of most Congresses did not convene until more than a year after election day, and the second session, also known as the short session, usually convened after elections for its successor had been held, and continued through March 4. These \"lame duck\" sessions were increasingly criticized in the 20 th century, as they included Members of both chambers who had retired or had been defeated for reelection, and occasionally were dominated by political parties that had been repudiated at the November elections. Similarly, as the powers and responsibilities of the presidency expanded, there was increasing demand that the four-month presidential transition be shortened.", "Although the Senate passed an amendment resolution ending the lame duck session as early as 1923, efforts to change the dates for congressional and presidential terms of office were stalled in the House of Representatives throughout the decade of the 1920s. In addition to the lame duck session arguments noted above, proponents of the amendment favored elimination of time limits on the short session on the grounds that it promoted obstructionism in both chambers, and particularly, filibusters in the Senate. Opposition to the measure centered on the congressional term: opponents of both parties feared it would eliminate what they regarded as a politically salubrious \"cooling off period\" after the elections. By convening the new Congress just two months after elections, rather than 13 months, as under the then-current system, the passions generated during the election campaign would, they suggested, still be fresh, and might negatively affect the flow of legislative business. Further, they opposed longer, or continuous, congressional sessions on the grounds that these would present opportunities for the abuse of legislative power. House Speaker Nicholas Longworth spoke for many opponents when he stated the following (in the lame duck third session of the 71 st Congress):", "Under this resolution ... it will be entirely possible for Congress to be in session perpetually from the time it convenes.... It seems to me obvious that great and serious danger might follow a perpetual two years' session of the Congress. I am not one of those who says the country is better off when Congress goes home, I do not think so, but I do think that the Congress and the country ought to have a breathing space at least once every two years.", "By 1932, however, party control of the House in the 75 th Congress had shifted, and a bipartisan coalition was able to bring a proposal to the floor in both chambers. The amendment, which was proposed to the states on March 2, 1932, included the following provisions:", "Terms of the President and Vice President would end on January 20 of the year following a presidential election. Terms of Representatives and Senators would end at \"noon on the 3d day of January.\" Congress would meet at least once annually, at \"noon on the 3d day of January,\" unless Congress appointed a different day by law. If the President elect died, the Vice President elect would become the President-elect. Congress was empowered to provide by law for cases of vacancy or deadlock connected with the contingent election process.", "In addition, although not included in the amendment's text, one of its intended effects was that the counting of electoral votes cast in presidential elections, declaration of the election results, and contingent election of the President and Vice President, if necessary, would be conducted by the newly elected Congress, rather than by the lame duck session.", "The ratification process proceeded with considerable speed, and was completed on January 23, 1933, when the 36 th state approved it. By May of the same year, the 48 th , and last, state legislature added its approval. The Twentieth Amendment became effective for the legislative branch in 1935, when the 74 th Congress convened on January 4, and for the President and Vice President in 1937, when President Roosevelt and Vice President John Garner were inaugurated on January 20."], "subsections": []}, {"section_title": "The Twenty-Second Amendment: \"Term Limits\" for the President", "paragraphs": ["In 1946, the Republican Party regained control of both houses of Congress for the first time in 16 years. The GOP had previously committed itself to term limitations on the presidency \"[t]o insure against the overthrow of our American system of government\" in its 1940 national convention platform, while the party's 1944 manifesto called for a single six-year term for the chief executive. The question of presidential tenure was thus high on the agenda of the 80 th Congress when it convened on January 3, 1947, and resolutions proposing constitutional amendments that would impose term limitations on future Presidents were introduced in both chambers when Congress assembled.", "Debate on the amendment proceeded generally on partisan lines. Clearly the most important factor in consideration of the amendment was the unprecedented example of President Roosevelt's 12 years in office. Between the successive crises of the depression and World War II, and President Roosevelt's activist conception of the office, the power and authority of the presidency had expanded well beyond its traditional boundaries. Supporters claimed their goal was the prevention of excessive concentration of power in the hands of future Presidents. Opponents argued that the proposal was a case of overkill: the informal two-term limit had been set aside by the President (with the approval of a substantial majority of the voters, they noted) only because of the extraordinary circumstances surrounding World War II. It was, they asserted, a restriction of democracy, depriving the people of their right to elect any qualified candidate they chose. One nationally prominent journalist of the era described the amendment as \"'an act of retroactive vindictiveness' [against Franklin Roosevelt]. They could never beat him while he was alive, [Elmer] Davis said, so they beat him after he was dead.\" On the other hand, one scholar of the presidency noted that the idea of presidential term limits was not new at that time: more than 270 amendments to circumscribe presidential tenure had been introduced between 1789 and 1947.", "The House took the lead on the question, moving quickly after the new Congress assembled. Two approaches to the question of presidential term limitations emerged: H.J.Res. 25, introduced by Representative Everett M. Dirksen, sought a single six-year term, while H.J.Res. 27, offered by Representative Earl C. Michener, proposed a limit of two four-year terms. On February 5, the Judiciary Committee reported H.J.Res. 27 favorably, and the proposal was taken up by the full House on February 6. Debate on the resolution itself was limited to two hours, and to five minutes each on proposed amendments, after which the House voted to approve H.J.Res. 27 on February 6, 1947, by a vote of 285 to 121. House debate fell largely along party lines; the amendment has largely been characterized as a \"Republican\" measure, and it is worth noting that the Republican caucus in the House was united in support of the resolution. On the other hand, one historian points out that the votes of 47 mostly southern Democrats provided the resolution the necessary two-thirds majority required by the Constitution, so there was, in fact, a level of bipartisan support; most Democratic \"yes\" votes came from southern or border states.", "Senate consideration of the amendment proceeded at a more measured pace than in the House. The House measure, H.J.Res. 27, which the Senate used as the vehicle for its deliberation, was reported from the Senate Judiciary Committee on February 21; it differed from the House resolution by requiring that the amendment be submitted to ad hoc state conventions for ratification, rather than to the state legislatures\u2014Article V of the Constitution provides for either method of ratification, at the discretion of Congress. The argument was that ad hoc conventions, elected for the single purpose of considering the amendment, would be more familiar with, and responsive to, public opinion on the proposal. Secondly, the committee version included a prohibition on further presidential service of any person who had served more than 365 days in each of two terms.", "When the full Senate took up the amendment, both these provisions were stripped out, but the Senate approved an amendment by Senator Robert Taft that clarified procedures governing the number of times a Vice President who succeeded to the presidency might be elected. Taft's amendment included the now-familiar provision that if a Vice President becomes President in the latter two years of a predecessor's term, he or she is eligible to be elected to two full terms, for a total of 10 years' service. If, however, the Vice President serves more than two years of a predecessor's term, he or she may be elected only to a single subsequent term. The Senate passed the resolution, as amended, by a vote of 59 to 23 on March 12. As with the House, there was substantial Democratic support for the measure: 16 Democratic Senators, mostly from southern and border states, joined all 43 Republicans present and voting to produce the necessary two-thirds majority. The 23 \"no\" votes were cast by Democrats. ", "Although the Senate appointed conferees to resolve differences between the two versions of the bill, there is no evidence a conference committee met. On March 21, the House took up the Senate version, which, according to Representative Michener, had been \"considered informally before the full Judiciary Committee.\" The House, after additional debate, accepted the Senate's amendments to H.J.Res. 27 on March 21.", "The Senate version of the amendment, as agreed to in the House and proposed to the states, included the following provisions:", "No person could be elected to the office of President more than twice. Persons who had been President or acted as President for more than two years of their predecessor's term could be elected once. Persons who had been President or acted as President for less than two years of their predecessor's term could be elected twice. The amendment did not apply to any person serving as President when it was proposed, or when it was ratified.", "The amendment was proposed to the states for ratification by their legislatures on March 24, 1947. Minnesota became the 36 th state to ratify the proposal on February 27, 1951, and it was declared to be ratified and effective on March 1 of the same year. ", "Since its ratification in 1951, the Twenty-Second Amendment has applied to six Presidents who have been elected twice to the Presidency: Dwight D. Eisenhower (1953-1961), Ronald W. Reagan (1981-1989), William (Bill) J. Clinton (1993-2001), George W. Bush (2001-2009), and Barack H. Obama (2009-2017). In addition, Richard M. Nixon (1969-1974), who resigned from office under the threat of impeachment, was technically covered by the amendment's provisions, having been elected twice to the presidency. ", "To date, two Presidents who succeeded to the presidency have been covered under the Amendment's provisions that govern succession to their predecessors' uncompleted terms:", "\u2026 and no person who has held the office of President, or acted as President, for more than two years of a term to which some other person was elected President shall be elected to the office of the President more than once.", "The first, Lyndon B. Johnson (1963-1969), succeeded to the presidency when John F. Kennedy was assassinated in November 1963. Under the provisions of the Twentieth Amendment, Johnson would have been eligible to be elected to two full terms, because he entered office more than halfway through his predecessor's term. On the other hand, Gerald R. Ford (1974-1977), the second Vice President to succeed to the presidency during this period, was eligible to be elected to only one full term in his own right, since he served more than two years of the term to which President Nixon had been elected."], "subsections": [{"section_title": "Does the Twenty-Second Amendment Provide an Absolute Term Limitation on Presidential Service?", "paragraphs": ["The Twenty-Second Amendment prohibits anyone from being elected President more than twice. The question has been asked, however, whether a President who was elected to two terms as chief executive could subsequently be elected Vice President and then succeed to the presidency as a result of the incumbent's death, resignation, or removal from office. Another version of this scenario questions whether a former President who had been elected twice could succeed to the office of chief executive from other positions in the line of presidential succession, such as the offices of Speaker of the House of Representatives, President pro tempore of the Senate, or positions in the Cabinet, as provided for in the Presidential Succession Act.", "This issue was raised initially during discussions of the Twenty-Second Amendment in 1960, when President Eisenhower was about to become the first President covered by its limitations. While the question may have been largely academic with respect to Eisenhower, due to his age and condition of his health, it was also raised again concerning former President Barack Obama, who left office in 2017 at the age of 55.", "Some commentators argue that the Twelfth Amendment's statement that \"no person constitutionally ineligible to the office of President shall be eligible to that of Vice-President\" ipso facto bars any former chief executive covered by the Twenty-Second Amendment from serving either as Vice President or succeeding to the presidency from any other line of succession position (i.e., the Speaker of the House, President pro tempore of the Senate, or the Cabinet).", "Others maintain, however, that the original intent of the Twelfth Amendment's language was only to apply the same qualifications of age, residence, and \"natural born\" citizenship to the Vice President as apply to the President, and that it has no bearing on eligibility to serve as President. Moreover, they maintain that the Twenty-Second Amendment's prohibition can be interpreted as extending only to eligibility for election , not service ; by this reasoning, a term-limited President could be elected Vice President, and then succeed to the presidency to serve out the balance of the term. Adherents of both positions, however, generally agree that anyone becoming President under any of these scenarios would be prohibited from running for election to an additional term.", "Assessing a related question, legal scholars Bruce Peabody and Scott Gant asserted in a 1999 article that a former President could also succeed to the presidency, or be \"acting President\" from the wide range of positions covered in the Presidential Succession Act. By their reasoning, a former President serving as Speaker of the House, President pro tempore of the Senate, or as a Cabinet officer would also be able to assume the office of President or act as President under the \"service vs. election\" interpretation of the Twenty-Second Amendment. The Constitution Annotated tends to support some version of this interpretation, but notes that many issues would need to be addressed if this situation ever occurred:", "The Twenty-Second Amendment has yet to be tested or applied. Commentary suggests, however, that a number of issues could be raised as to the Amendment's meaning and application, especially in relation to the Twelfth Amendment. By its terms, the Twenty-Second Amendment bars only the election of two-term Presidents, and this prohibition would not prevent someone who had twice been elected President from succeeding to the office after having been elected or appointed Vice-President. Broader language providing that no such person \"shall be chosen or serve as President ... or be eligible to hold the office\" was rejected in favor of the Ame ndment's ban merely on election (H.J.Res. 27, 80 th Cong., 1 st Sess. (1947)), (as introduced). As the House Judiciary Committee reported the measure, it would have made the covered category of former presidents \"ineligible to hold the office of President.\" (H.R. Rep. No. 17, 80 th Cong., 1 st Sess. at 1 (1947)). Whether a two-term President could be elected or appointed Vice President depends upon the meaning of the Twelfth Amendment, which provides that \"no person constitutionally ineligible to the office of President shall be eligible to that of Vice-President.\" Is someone prohibited by the Twenty-Second Amendment from being \"elected\" to the office of President thereby \"constitutionally ineligible to the office\"? Note also that neither Amendment addresses the eligibility of a former two-term President to serve as Speaker of the House or as one of the other officers who could serve as President through operation of the Succession Act. ", "It seems unlikely that this question will be answered conclusively barring an actual occurrence of the as-yet hypothetical situation cited above. As former Secretary of State Dean Acheson commented when the issue was first raised in 1960, \"it may be more unlikely than unconstitutional.\""], "subsections": []}]}, {"section_title": "The Twenty-Fifth Amendment: Filling Vice Presidential Vacancies", "paragraphs": ["The Twenty-Fifth Amendment, which provides for several aspects of presidential succession and disability, also filled a gap in constitutional procedures that had existed since 1789. The amendment established procedures for filling vacancies in the vice presidency that have been implemented twice since the amendment's ratification in 1967.", "As noted previously in this report, the Constitution originally made no provision for filling vacancies in the vice presidency, but authorized Congress to provide for simultaneous vacancies in both executive offices. The Succession Act of 1792 (1 Stat. 240), passed by the Second Congress (1791-1793), addressed the issue, authorizing the President pro tempore of the Senate and the Speaker of the House, in that order, to act as President until a special election could be held to fill a presidential vacancy, unless the vacancy occurred late in the last full year of the incumbent's term of office. The act made no provision for vacancies in the vice presidency, an omission that continued in its subsequent revisions, the succession acts of 1881 (24 Stat. 1) and 1947 (61 Stat. 380). Consequently, the office of Vice President was vacant on 14 different occasions between 1809 and 1965, due to the death or resignation of various incumbents. These vacancies ranged in duration from 67 days, following John C. Calhoun's resignation to assume a Senate seat in December 1832, to 47 months, when John Tyler became President following the death of William Henry Harrison in 1841. ", "During the 1950s, Congress considered proposals concerning presidential disability that were largely generated by concern over illnesses suffered by President Dwight Eisenhower during his two terms in office (1953-1961). These included a moderate heart attack, a mild stroke, and surgery for a partial obstruction of the President's intestine. Hearings on an amendment to provide for instances of presidential disability were held by the Senate Judiciary Committee's Subcommittee on Constitutional Amendments, chaired by Senator Estes Kefauver, in 1958 and 1959. No floor action was taken in either chamber on the question during this period. When Senator Kefauver, the chief advocate for constitutional action, died in August 1963, Senator Birch Bayh assumed leadership of succession and disability reform proponents in the Senate, in cooperation with Representative Emanuel Celler, chairman of the House Judiciary Committee.", "The assassination of President John F. Kennedy on November 22, 1963, shocked and traumatized the nation. In Congress, the President's death provided fresh impetus to congressional action on presidential succession and disability leading to proposal of the Twenty-Fifth Amendment to the Constitution. Although Vice President Lyndon B. Johnson succeeded without incident after Kennedy's death, the office of Vice President remained vacant for 14 months, until Senator Hubert Humphrey was elected in 1964 and inaugurated on January 20, 1965. Following President Johnson's November 27, 1963, address to a joint session of Congress, contemporary observers noted that his potential immediate successor, House Speaker John W. McCormack, was 71 years old, and that Senate President pro tempore Carl T. Hayden, second in the order of succession, was 86 and visibly frail. A consensus emerged that a vice presidential vacancy for any length of time constituted a dangerous gap in the nation's leadership during the Cold War, an era of international tensions and the threat of nuclear war.", "Senator Bayh introduced a constitutional amendment shortly after President Kennedy's death that provided new procedures for (1) presidential succession, (2) vice presidential vacancies, and (3) instances of presidential disability. Although the House did not act on the proposal in 1964, it was reintroduced the following year in both chambers early in the first session of the 89 th Congress. The proposal included in its nearly identical House and Senate versions (H.J.Res. 1 and S.J.Res. 1, respectively) the following provisions:", "Section 1 provided that the Vice President becomes President in \"case of the removal of the President from office or of his death or resignation.\" Section 2 provided that whenever the office of Vice President is vacant, the President nominates a successor \"who shall take office upon confirmation by a majority vote of both Houses of Congress.\" Section 3 provided that whenever the President declares he is disabled and unable to discharge his duties, the Vice President serves as Acting President. Section 4 provided that whenever the Vice President and a majority of the Cabinet, or, alternatively, the Vice President and a disability review body established by law, transmits to the Speaker of the House of Representatives and the President pro tempore of the Senate a declaration that the President is incapacitated, the Vice President becomes Acting President. When the President transmits a message to the same officers declaring that no inability exists, the President resumes the powers and duties of the office. If, however, the Vice President and a majority of either the Cabinet or the Vice President and the disability review body, if one has been established, disputes the President's message, then Congress decides the issue within a limited period of time. A two-thirds vote of both houses of Congress is necessary to sustain the Vice President's judgment that the President remains impaired; otherwise the President resumes the powers and duties of the office.", "The proposed amendment moved through the relevant committees and came to the floor of both chambers early during the first session of the new Congress. A bipartisan consensus emerged in favor of Sections 1 through 3; Section 4, however, generated controversy that centered on its provisions governing disputed presidential disability. Opponents asserted that these procedures were too detailed to be included in a constitutional amendment, and that the question of disability would be better addressed in the proposed amendment by authorizing Congress to provide by law for such instances. Defenders responded by noting that leaving the disability review function to legislation, and dependent on a simple majority in both houses of Congress, might subject this critical issue to political manipulation: better to \"set it in stone\" in the Constitution. Senator Everett Dirksen was the chief proponent of the legislative route for disability procedures, but his amendment to the resolution was rejected by a substantial margin. The Senate ultimately passed S.J.Res. 1 without the Dirksen amendment on February 13, 1965, by a vote of 72 to 0, followed by House passage of H.J.Res. 1 on April 13, by a vote of 368 to 29. A conference reconciled minor differences between the two versions, and the amendment was officially proposed to the states on July 6. Ratification proceeded quickly in the states; Nevada became the 38 th state to ratify on February 10, 1967, and the Administrator of General Services declared the amendment to be in effect on February 23 of the same year."], "subsections": [{"section_title": "Implementing Section 1 of the Twenty-Fifth Amendment", "paragraphs": ["Both Sections 1 and 2 of the Twenty-Fifth Amendment, which relate to presidential and vice presidential term and tenure, have been implemented since its ratification in 1967. In the case of Section 1, no direct action beyond swearing in the new President was necessary on August 9, 1974, when President Richard Nixon resigned while facing almost certain impeachment resulting from the revelation of his involvement in events connected with the Watergate break-in and subsequent cover-up. The Vice President, former Representative Gerald R. Ford, became President, and was inaugurated without incident when he took the oath of office the same day."], "subsections": []}, {"section_title": "Implementing Section 2 of the Twenty-Fifth Amendment", "paragraphs": ["Section 2 of the Twenty-Fifth Amendment has been implemented twice since its ratification, in 1973, with the nomination and confirmation of Representative Gerald R. Ford as Vice President, and in 1974, with the nomination and confirmation of New York Governor Nelson A. Rockefeller as Vice President."], "subsections": []}, {"section_title": "1973: Nomination and Confirmation of Gerald R. Ford as Vice President", "paragraphs": ["The provisions of Section 2 of the Twenty-Fifth Amendment were invoked twice within a few years of the amendment's ratification. Between 1973 and 1974, the circumstances surrounding the Watergate break-in of 1972 resulted in what amounted to back-to-back implementations of the section within the space of 16 months, as the vice presidency became vacant twice, first due to resignation, and second, due to succession of the Vice President to the presidency. As the events resulting from the Watergate break-in unfolded in June 1973, an unrelated federal investigation of political corruption in Baltimore County, Maryland, uncovered evidence of illegal activities by Vice President Spiro T. Agnew during and after his service both as county executive and as Governor of Maryland from 1967 to 1969. After a grand jury was convened, the Vice President entered into negotiations with the Justice Department and President Nixon's counsel, as a result of which he agreed to resign and plead \"no contest\" to one count of tax evasion, in return for a fine and three years of probation. Agnew resigned the vice presidency on October 10, 1973. On October 12, the President nominated the House Republican Leader, Representative Gerald Ford, to be Vice President, thus activating Section 2 of the amendment.", "The nomination was referred in the House to the Committee on the Judiciary, and in the Senate to the Committee on Rules and Administration; the two chambers agreed on consecutive hearings, with the Senate proceeding first. The Senate Rules Committee hearings began on November 1, 1973, and continued in both public and executive sessions until the committee voted unanimously to report the nomination favorably to the full Senate on November 20. The House Judiciary Committee opened its first session on November 15, immediately following the Senate's last public hearings session. House hearings continued until November 26, and on November 29, the committee voted 30-8 to report the nomination favorably to the full House. After two days of floor debate, the Senate voted on November 27 by a margin of 93 to 2 to confirm Ford as Vice President. The House voted to confirm Ford on December 6, after one day of debate, by a vote of 387 to 35. Representative Ford took the oath as Vice President before a joint session of Congress in the House chamber the same day."], "subsections": []}, {"section_title": "1974: Nomination and Confirmation of Nelson A. Rockefeller as Vice President", "paragraphs": ["The second, and to date the only other, implementation of Section 2 occurred less than a year later. On August 9, 1974, Richard Nixon resigned the presidency, after being confronted with the near certainty of impeachment and possible removal from office due to his role in the events associated with the Watergate break-in. Gerald Ford was immediately sworn in as President, thus creating a vacancy in the vice presidency, for which he nominated former New York Governor Nelson Rockefeller on August 20. Congress adopted the procedures used in consideration of the Ford nomination, but the hearing schedules were complicated by the press of legislative business and the fact that 33 members of the House Judiciary Committee and 2 members of the Senate Committee on Rules and Administration were running for reelection in the midterm congressional elections held November 2, 1974. An additional factor in the delay was the fact that, as a scion of one of America's wealthiest families, Governor Rockefeller's personal finances were extremely complex and required a lengthy investigation. Given these factors, the Senate hearings were conducted in two widely separated installments, from September 23 to 26, and again between November 13 and 15. The Rules Committee voted unanimously to report the nomination to the full Senate on November 22. The House again scheduled consecutive hearings, convening the Judiciary Committee from November 21 to 26, and again between December 2 and 4. The committee voted 26 to 12 to report the nomination favorably on December 12. As was the case with the Ford nomination, floor debate on the confirmation of Nelson Rockefeller to be Vice President was somewhat anticlimactic. Most of the substantive points in favor of, or in opposition to, the nominee had been thoroughly examined in the hearings process and were largely disposed of in the Rules and Judiciary Committee reports. The Senate voted 90 to 7 to confirm Rockefeller on December 10, while the House confirmed the nomination by a closer margin, 287 to 128, on December 19. Vice President Rockefeller was inaugurated in the Senate, with House Members in attendance, the same day."], "subsections": []}]}]}]}, {"section_title": "Concluding Observations", "paragraphs": ["The question of presidential and vice presidential terms and tenure has had a sometimes-dramatic history in the more than two centuries that have passed since the Constitutional Convention settled on the basic questions of term length and reelection. As this report documents, various circumstances contributed to what approached a de facto one-term presidential tradition for much of the 19 th century, while during this same period a durable body of opinion favored a constitutional amendment to formalize the single term. In the 20 th century, three constitutional amendments made incremental changes in certain conditions of presidential tenure, most notably the Twenty-Second Amendment's establishment of limits on the number of times a person could be elected President of the United States. In recent years, however, these issues have not been the subject of much debate. Certain questions do occasionally rise to command some degree of public attention, including speculation on the applicability of the Twenty-Second Amendment to Presidents who have been elected twice, or proposals for constitutional changes that would repeal the amendment or establish a single six-year presidential and vice presidential term. By design, however, constitutional amendments must pass a number of demanding tests before they can be incorporated in the nation's fundamental charter. Those few of the many hundreds of amendments proposed that were successful arguably owe their success to one or more of the following developments:", "They incorporate a reform that has been considered and debated over a period of time, and has gradually gained the approval of a contemporaneous majority of the public that includes a wide range of social, cultural, and political support from diverse elements around the nation. They have been viewed as a remedy to a sudden and traumatic event in the nation's life that requires a swift and definitive solution. They have received the steady support of generally bipartisan leadership in both houses of Congress over the extended periods generally necessary for the legislature to consider and propose amendments for consideration by the states.", "Until or unless any proposals to change the existing conditions of presidential terms and tenure meet one or more of these requirements, there is arguably little momentum for their moving beyond the realm of advocacy and speculation."], "subsections": []}]}}
{"id": "R45722", "title": "Overtime Exemptions in the Fair Labor Standards Act for White-Collar Employees: Frequently Asked Questions", "released_date": "2019-05-15T00:00:00", "summary": ["The Fair Labor Standards Act (FLSA), enacted in 1938, is the main federal law that establishes general wage and hour standards for most, but not all, private and public sector employees. Among other protections, the FLSA establishes that covered nonexempt employees must be compensated at one-and-a-half times their regular rate of pay for each hour worked over 40 hours in a workweek.", "The FLSA also establishes certain exemptions from its general labor market standards. One of the major exemptions to the overtime provisions in the FLSA is for bona fide \"executive, administrative, and professional\" employees (the \"EAP\" or \"white collar\" exemptions). The FLSA grants authority to the Secretary of Labor to define and delimit the EAP exemption \"from time to time.\" To qualify for this exemption from the FLSA's overtime pay requirement, an employee must be salaried (the \"salary basis\" test); perform specified executive, administrative, or professional duties (the \"duties\" test); and earn above an established salary level threshold (the \"salary level\" test).", "In March 2019, the Secretary of Labor published a Notice of Proposed Rulemaking (NPRM) to make changes to the EAP exemptions. The 2019 proposed rule would become effective around January 2020. The major changes in the 2019 proposed rule include increasing the standard salary level threshold from the previous level of $455 per week to $679 per week and committing the Department of Labor (DOL) to updating the EAP exemptions every four years through the rulemaking process. The 2019 proposed rule does not change the duties and responsibilities that employees must perform to be exempt. Thus, the 2019 proposed rule would affect EAP employees at salary levels between $455 and $679 per week in 2020. DOL estimates that about 4.9 million workers would be affected in the first year, including about 1.3 million EAP employees who would become newly entitled to overtime pay and an additional 3.6 million workers who would have overtime protection clarified and thereby strengthened.", "This report answers frequently asked questions about the overtime provisions of the FLSA, the EAP exemptions, and the 2019 proposed rule that would define and delimit the EAP exemptions."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Frequently Asked Questions", "paragraphs": ["This report addresses frequently asked questions related to the overtime provisions in the Fair Labor Standards Act (FLSA) for executive, administrative, and professional employees (the \"EAP\" or \"white collar\" exemptions). For a history of DOL regulations on the EAP exemptions, see CRS Report R45007, Overtime Exemptions in the Fair Labor Standards Act for Executive, Administrative, and Professional Employees , by David H. Bradley. For a broader overview of the FLSA, see CRS Report R42713, The Fair Labor Standards Act (FLSA): An Overview .", "This report proceeds in three sections. First, there is an overview of the main federal statute on overtime pay\u2014the FLSA\u2014and of defining and delimiting the EAP exemptions. Second, there is a discussion of the applicability of the EAP exemptions. Finally, there is information on the EAP exemptions in the 2019 proposed rule and the 2016 final rule (which was finalized but invalidated before it took effect)."], "subsections": [{"section_title": "Defining and Delimiting the EAP Exemptions", "paragraphs": [], "subsections": [{"section_title": "What are the \"EAP\" or \"White Collar\" exemptions in the FLSA?", "paragraphs": ["The FLSA, enacted in 1938, is the main federal law that establishes minimum wage and overtime pay requirements for most, but not all, private and public sector employees. Section 7(a) of the FLSA specifies that unless an employee is specifically exempted in the FLSA, he or she is considered to be a covered \"nonexempt\" employee and must receive pay at the rate of one-and-a-half times (\"time and a half\") the employee's regular rate for any hours worked in excess of 40 hours in a workweek.", "When the FLSA was enacted, Section 13(a)(1) provided an exemption, from both the minimum wage (Section 6) and overtime (Section 7) provisions of the act, for \"any employee employed in a bona fide executive, administrative, and professional capacity.\" Rather than define the terms executive, administrative, or professional employee, the FLSA authorizes the Secretary of Labor to define and delimit these terms \"from time to time\" by regulations .", "The general rationale for including the EAP exemption in the FLSA at the time of enactment was twofold. One, the nature of the work performed by EAP employees seemed to make standardization difficult and thus output of EAP employees was not as clearly associated with hours of work per day as it was for typical nonexempt workers. Two, bona fide EAP employees were considered to have other forms of compensation (e.g., above-average benefits, greater opportunities for advancement) not available to nonexempt workers."], "subsections": []}, {"section_title": "How are the EAP exemptions determined?", "paragraphs": ["As mentioned, the Secretary of Labor is authorized to define and delimit the EAP exemptions. Including the first rulemaking on EAP exemptions in 1938, DOL has finalized nine rules.", "Although the determinations have changed over time, to qualify for an exemption currently under Section 13(a)(1) of the FLSA (i.e., not to be entitled to overtime pay), an employee generally has to meet three criteria:", "1. The \"salary basis\" test: the employee must be paid a predetermined and fixed salary. 2. The \"duties\" test: the employee must perform executive, administrative, or professional duties. 3. The \"salary level\" test: the employee must be paid above the threshold established in the rulemaking process, typically expressed as a per week rate."], "subsections": []}, {"section_title": "What is the \"salary basis\" test?", "paragraphs": ["To qualify for the EAP exemption, an employee must be paid on a \"salary basis,\" rather than on a per hour basis. That is, an EAP employee must receive a predetermined and fixed payment that is not subject to reduction due to variations in the quantity or quality of work. The salary must be paid on a weekly or less-frequent basis."], "subsections": []}, {"section_title": "What is the \"duties\" test?", "paragraphs": ["Job titles alone do not determine exemption status for an employee. Rather, the Secretary of Labor, through issuance of regulations, specifies the duties that EAP employees must perform to be exempt from the overtime pay requirements of the FLSA.", "To qualify for the exemption for executive employees , all of the following job duties tests must be met:", "the employee's primary duty \"is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof\"; the employee \"customarily and regularly directs the work of two or more other employees\"; and the employee \"has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight.\" ", "To qualify for the exemption for administrative employees , both of the following job duties tests must be met:", "the employee's primary duty \"is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers\"; and the employee's primary duty \"includes the exercise of discretion and independent judgment with respect to matters of significance.\"", "To qualify for the exemption for professional employees , the following job duties test must be met:", "The employee's primary duty is the performance of work requiring \"knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction\"; or work \"requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.\""], "subsections": []}, {"section_title": "What is the \"salary level\" test?", "paragraphs": ["In addition to the duties test, an employee must earn above a certain salary in order to qualify for the EAP exemption. Since the FLSA was enacted and the first salary thresholds were established in 1938, the standard salary level thresholds have been raised nine times. Prior to 2004, the salary level for exemption varied by the type of employee and the type of duty test. In addition to the standard salary level, in 2004 DOL created a \"highly compensated employee\" (HCE) exemption in which employees earning an amount above the standard EAP salary threshold annually are exempt from overtime requirements if they perform at least one (among many) of the duties of an EAP employee."], "subsections": []}]}, {"section_title": "Applicability of the EAP Exemptions", "paragraphs": [], "subsections": [{"section_title": "Do the EAP exemptions affect independent contractors?", "paragraphs": ["Because the FLSA applies to \"employees,\" individuals who are classified as independent contractors are not covered by the FLSA provisions."], "subsections": []}, {"section_title": "Do the EAP exemptions apply to nonprofits?", "paragraphs": ["Yes. There is no general exemption for nonprofits in the FLSA or the EAP overtime regulations. Coverage for workers in nonprofits, like other entities, is determined by the enterprise and individual coverage tests. It is important to note, however, that charitable activities often associated with nonprofits do not count as ordinary commercial activities and thus do not count toward the $500,000 threshold for enterprise coverage under the FLSA. Only the commercial activities of nonprofits (e.g., gift shops, fee for service activities) count toward that threshold. On the other hand, even if a nonprofit does not meet the enterprise test for coverage, individual employees in an otherwise exempt nonprofit may be covered by the FLSA and the overtime rules if they engage in interstate commerce (e.g., regularly making out of state phone calls, processing credit card transactions)."], "subsections": []}, {"section_title": "Do the EAP exemptions apply to institutions of higher education?", "paragraphs": ["Yes. Both the FLSA and the EAP overtime regulations apply to institutions of higher education (IHEs). Due to other provisions of the FLSA, however, many personnel at IHEs are not eligible for overtime on the basis of the duties test alone and thus are unaffected by changes in the EAP standard salary level for exemption. For example, in general, bona fide teachers are exempt regardless of salary level and thus are not eligible for overtime. Similarly, academic administrative personnel are exempt from overtime pay if they are paid at least the EAP salary level threshold or are paid at least equal to the entrance salary for teachers at the same institution. On the other hand, some IHE workers would be affected by changes in the EAP salary level for exemption, including postdoctoral researchers who are employees, nonacademic administrative employees, and other salaried workers who are not covered by another exemption. Finally, like some public sector employers, but unlike private sectors employers, public IHEs may have the option of using compensatory time (i.e., a rate of 1.5 hours for each hour of overtime), rather than cash payment, to meet the obligation of providing overtime compensation."], "subsections": []}, {"section_title": "Do the EAP exemptions apply to state and local governments?", "paragraphs": ["Yes. There is no blanket exemption from FLSA and overtime rule coverage for state and local governments. In general, employees of state and local governments are covered by the overtime provisions of the FLSA and thus are affected by EAP rulemaking updating the salary level threshold for the EAP exemptions. That said, other FLSA provisions apply to state and local governments that affect the applicability of overtime rules to these public sector employees.", "One way in which FLSA overtime rules apply differently in the public sector relates to the mode of compensation. State and local governments may have the option of using compensatory time, at a rate of 1.5 hours for each hour of overtime, rather than cash payment to meet the obligation of providing overtime compensation\u2014an alternative not available to private sector employers.", "Additionally, some public sector employees are not covered by the FLSA. For instance, certain state and local employees\u2014elected officials, their appointees and staff who are not subject to civil service laws, and legislative branch employees not subject to civil service laws\u2014are not covered and will not be affected by changes to the EAP exemptions.", "The FLSA provides partial exemptions from the overtime requirements for fire protection and law enforcement employees. Specifically, fire protection and law enforcement employees are exempt from overtime pay requirements if they are employed by an agency with fewer than five fire protection or law enforcement employees. In addition, the FLSA allows overtime for all fire protection and law enforcement employees (not just those in small agencies) to be calculated on a \"work period\" (i.e., 7 to 28 consecutive days) rather than the standard \"workweek\" period (i.e., 7 consecutive 24-hour periods)."], "subsections": []}, {"section_title": "Do the EAP exemptions apply to U.S. territories?", "paragraphs": ["Yes. The FLSA overtime provisions apply to employees in the U.S. territories\u2014American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin Islands. While the exemption for American Samoa has traditionally been set at 84% of the standard salary level, the other territories have been subject to the standard level."], "subsections": []}, {"section_title": "Are congressional employees covered by the FLSA overtime provisions?", "paragraphs": ["The application of the provisions of the FLSA is determined by the Congressional Accountability Act (CAA, P.L. 104-1 ), which was enacted in 1995 and extends some FLSA provisions, including overtime provisions, and other labor and workplace laws to congressional employees. In addition, the CAA created the Office of Compliance (now the Office of Congressional Workplace Rights), headed by a five-member Board of Directors (Board), to enforce the CAA.", "Rulemaking on the EAP exemptions would apply to congressional staff if the Board adopts them and Congress approves the Board's regulations, pursuant to the process established in the CAA. In other words, regulations adopted by the Board do not have legal effect until they are approved by Congress.", "When the Secretary of Labor issued new regulations to update the EAP exemptions in 2004, the Board adopted them; but thus far, Congress has apparently not approved the 2004 overtime regulations. Thus, overtime regulations that were adopted by the Board and approved by Congress in 1996, based on DOL regulations originally promulgated in 1975, currently apply to congressional staff. In the absence of action by the Board and by Congress, the provisions in any future final rules would not change the status quo."], "subsections": []}, {"section_title": "What are the options for congressional action on EAP exemptions?", "paragraphs": ["Congress can pass legislation to repeal rules or compel new rules. For example, prior to the publication of the 2016 final rule, legislation was introduced that would have prohibited the Secretary of Labor from enforcing the final rule and would have required additional analysis from the Secretary before the issuance of any substantially similar rule in the future."], "subsections": []}, {"section_title": "How might employers comply with changes in the EAP salary levels?", "paragraphs": ["Given that rulemaking on the EAP exemptions typically includes increases in the salary level threshold for the EAP exemption, a greater number of employees become eligible for overtime pay with each upward adjustment of the salary level. To comply with the proposed regulations, employers would have several options, including the following:", "pay overtime to newly covered EAP employees if they work more than 40 hours in a workweek; increase the weekly pay for workers near the salary threshold to a level above it so that the EAP employees would become exempt and thus not be eligible for overtime pay; reduce work hours of nonexempt (covered) employees to 40 or fewer so that overtime pay would not be triggered; hire additional workers to offset the reduction in hours from nonexempt employees; or reduce base pay of nonexempt workers and maintain overtime hours so that base pay plus overtime pay would not exceed, or would remain close to, previous employer costs of base pay plus overtime."], "subsections": []}]}, {"section_title": "The 2019 Proposed Rule", "paragraphs": ["This section provides an overview of the main provisions of the 2019 proposed rule on EAP exemptions. For context, some provisions of the 2016 final rule are discussed."], "subsections": [{"section_title": "What is the status of the 2016 final rule?", "paragraphs": ["A final rule updating the EAP exemptions was published in the Federal Register on May 23, 2016, with an effective date of December 1, 2016. However, on November 22, 2016, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction blocking the implementation of the rule. On August 31, 2017, the U.S. District Court for the Eastern District of Texas ruled that DOL exceeded its authority by setting the threshold at the salary level in the 2016 final rule ($913 per week) and thus invalidated it. Subsequently, DOJ appealed that decision to the U.S. Court of Appeals for the Fifth Circuit, which granted DOJ's motion to hold the appeal in abeyance until DOL issued new rulemaking on the EAP salary level. Thus, DOL is currently enforcing the EAP regulations in effect on November 30, 2016, which include a standard salary level of $455 per week."], "subsections": []}, {"section_title": "What is the status of the 2019 proposed rule?", "paragraphs": ["DOL issued a request for information (RFI) related to the EAP exemptions on July 26, 2017, seeking information from the public to assist in formulating a proposal to revise the exemptions. On March 22, 2019, a Notice of Proposed Rulemaking (NPRM) was published in the Federal Register to define and delimit EAP exemptions.", "The proposed rule would not only revise the regulations on the EAP exemptions but would also formally rescind the 2016 final rule. Such a rescission would provide that if any or all of the substantive provisions of the 2019 rule were invalidated or not put into effect, the EAP regulations would revert to those promulgated in the 2004 final rule. Due to the invalidation of the 2016 final rule (discussed above), DOL currently enforces the provisions of the 2004 final rule."], "subsections": []}, {"section_title": "What are the main changes to the EAP exemptions in the 2019 proposed rule?", "paragraphs": ["The main changes to the EAP exemptions in the 2019 proposed rule, as summarized in Table 1 , include the following:", "an increase in the salary level test from the current $455 per week ($23,660 annually) to $679 per week ($35,308 annually); an increase in the annual salary threshold for the HCE exemption from $100,000 to $147,414; an allowance that up to 10% of the standard salary level may be comprised of nondiscretionary bonuses, incentive payments, and commissions; a salary level of $455 per week for the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin Islands, and of $380 in American Samoa; and an increase in the \"base rate\" weekly salary level for employees in the motion picture industry from $695 per week to $1,036 per week."], "subsections": []}, {"section_title": "How are the salary levels determined in the proposed 2019 rule?", "paragraphs": ["Since the FLSA was enacted in 1938, the salary level threshold has been increased eight times, including the proposed 2019 increase. Each of the previous increases have occurred through intermittent rulemaking by the Secretary of Labor, with periods between adjustments ranging from 2 years (1938\u20131940) to 29 years (1975\u20132004). Since 1938, measures of the salary level have fluctuated according to DOL's identification of data sources most suitable for studying wage distributions and the department's determinations of the proportion and types of workers who should be below salary thresholds, as well as its determinations of whether regional, industry, or cost-of-living considerations should be factored into salary tests. Starting with the 2004 final rule, DOL has used survey data from the Current Population Survey (CPS) in determining the salary level for the EAP exemptions, albeit with different methodological choices."], "subsections": [{"section_title": "Standard Salary Level", "paragraphs": ["Effective January 2020 (approximately), the standard salary level threshold would equal the 20 th percentile of weekly earnings of full-time non-hourly workers in the lowest-wage Census region, which in 2019 is the South, and/or in the retail sector nationwide. In 2020, about 20% of full-time salaried workers in the South region and/or the retail sector nationwide are estimated to earn at or below $679 per week ($35,308 annually)."], "subsections": []}, {"section_title": "Highly Compensated Employee", "paragraphs": ["Effective January 2020 (approximately), the HCE salary level for the EAP exemptions would equal the annual earnings equivalent of the 90 th percentile of the weekly earnings of full-time non-hourly workers nationally. In 2020, 90% of full-time non-hourly workers are estimated to earn at or below $147,414 per year."], "subsections": []}, {"section_title": "Territories", "paragraphs": ["Effective January 2020 (approximately), the salary level for the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin Islands would be $455 per week, and in American Samoa it would be $380 per week. Except for American Samoa, this would depart from past regulations by establishing a salary threshold for the territories below the standard level."], "subsections": []}, {"section_title": "Motion Picture Industry", "paragraphs": ["Effective January 2020 (approximately), the motion picture industry employee salary level for the EAP exemption would be $1,036 per week. This level was derived by increasing the previous threshold ($695 per week) proportionally to the increase in the standard salary level. This would continue a special salary test created in 1953 for the motion picture industry that provides an exception to the \"salary basis\" test. Specifically, employees in the motion picture industry may be classified as exempt if they meet the duties tests for EAP exemption and are paid a \"base rate\" (rather than on a \"salary basis\") equal to the salary level for this exemption."], "subsections": []}]}, {"section_title": "What are the provisions for future adjustments to the salary level in the 2019 proposed rule?", "paragraphs": ["The 2019 proposed rule would implement a commitment by DOL to update the EAP salary level thresholds every four years by submitting an NPRM for comment. If the 2019 proposed rule is finalized, DOL would publish its first proposed update on January 1, 2023, and subsequent updates every four years thereafter. The future salary level updates would be based on the same data source (CPS) and methodology of the salary levels established in the 2019 proposed rule:", "the standard salary level would be adjusted to the 20 th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census region and/or in the retail sector, the HCE salary level threshold would be adjusted to the 90 th percentile of annual earnings of full-time non-hourly workers nationally, and the quadrennial NPRM would seek comment on whether to update the salary level for the territories established in the 2019 proposed rule."], "subsections": []}, {"section_title": "Who would be covered by the changes to the EAP exemptions in the 2019 proposed rule?", "paragraphs": ["The 2019 proposed rule would expand overtime coverage to EAP employees through a higher salary level threshold rather than through additional classes of employees. As such, EAP employees making between $455 per week (the current effective level) and the new rate of $679 per week in 2019 would likely become nonexempt (i.e., covered) by the overtime provisions and entitled to overtime pay for hours worked in excess of 40 per workweek."], "subsections": []}, {"section_title": "How many employees would be affected by the changes to the EAP exemptions in the 2019 proposed rule?", "paragraphs": ["It is difficult to project the number of employees currently exempt under the EAP exemptions who would no longer be exempt under the 2019 proposed rule. This is due in part to uncertainty about potential employer responses, such as increasing salaries above the new threshold to maintain exemption for EAP employees.", "DOL estimates, with caveats, that approximately 4.9 million workers would be affected by the proposed rule. DOL identifies two groups in particular that would be affected\u2014newly covered workers and workers with strengthened protections.", "Specifically, DOL estimates the following:", "In the first year under the provisions of the 2019 proposed rule, about 1.3 million EAP employees would become newly entitled to overtime pay due to the increase in the salary threshold: about 1.1 million employees in this group meet the duties test for the EAP exemption but earn between the current standard salary threshold ($455 per week) and the proposed threshold ($679 per week); and an additional 201,000 employees in this group meet the HCE duties test for exemption, but not the standard test, and earn at least the current HCE salary threshold ($100,000 per year) but less than the proposed threshold ($147,414 per year). An additional 3.6 million workers would receive \"strengthened\" overtime protections, including the following: An additional 2.0 million white collar workers who are paid on a salary basis and earn between the current salary threshold of $455 per week and the proposed threshold of $679 per week but do not meet the EAP duties test (i.e., they perform nonexempt work but might be misclassified) would gain overtime protections because their exemption status would not depend on the duties test. In other words, this group of workers would gain overtime coverage because the higher salary threshold would create a clearer line exemption test and reduce misclassification for exemption purposes. About 1.6 million salaried workers in blue collar occupations whose overtime coverage would have been clearer with the higher salary threshold. As DOL notes, this group of workers should currently be covered by overtime provisions but may not be due to worker classification.", "By comparison, DOL estimated that in the first year under the provisions of the 2016 final rule, approximately 13.1 million workers would have been affected. This total would have included about 4.2 million EAP employees who would have become newly entitled to overtime pay due to the increase in the salary threshold and an additional 8.9 million workers who would have received \"strengthened\" overtime protections.", "The data in Table 2 provide a summary of the estimated numbers of affected workers under the 2019 proposed rule and the 2016 final rule."], "subsections": []}]}]}]}}
{"id": "RL30478", "title": "Federally Supported Water Supply and Wastewater Treatment Programs", "released_date": "2019-05-03T00:00:00", "summary": ["For more than four decades, Congress has authorized and refined several programs to help communities address water supply and wastewater problems. The agencies that administer these programs differ in multiple ways. In terms of funding mechanisms, projects developed by the Bureau of Reclamation (Reclamation) and the U.S. Army Corps of Engineers (USACE) typically require direct, individual project authorizations from Congress.", "In contrast, standing program authorizations provide project funding for other agencies, including", "the Department of Agriculture (USDA), the U.S. Environmental Protection Agency (EPA), the Department of Commerce, and the Department of Housing and Urban Development (HUD).", "The key practical difference is that with the individual project authorizations, there is no predictable assistance or even guarantee of funding after a project is authorized, because funding must be secured each year in the congressional appropriations process. The programs, on the other hand, have set program criteria, are generally funded from year to year, and provide a process under which project sponsors compete for funding.", "In terms of scope and mission, the primary responsibilities of USACE are to maintain inland navigation, provide for flood and storm damage reduction, and restore aquatic ecosystems, while EPA's mission relates to protecting public health and the environment. The Department of Commerce and HUD focus on community and economic development. Likewise, the specific programs\u2014while all address water supply and wastewater treatment to some degree\u2014differ in important respects. Some are national in scope (those of USDA, EPA, and the Department of Commerce, for example), while others are regionally focused (Reclamation's programs and projects). Some focus primarily on urban areas (HUD) and some on rural areas (USDA), and others do not distinguish based on community size (e.g., EPA, USACE).", "Federal funding for the programs and projects discussed in this report varies greatly. Collectively, congressional funding for these programs in recent years has been somewhat eroded by overall competition among the many programs that are supported by discretionary spending, despite the continuing pressure from stakeholders and others for increased funding. FY2019 appropriations highlights include the following:", "$1.164 billion for capitalization grants to states under EPA's State Revolving Fund (SRF) loan program for drinking water systems and $1.694 billion for EPA's SRF program for wastewater projects; $60 million in subsidy costs for the EPA-administered Water Infrastructure Finance and Innovation Act (WIFIA) program, allowing the agency to provide approximately $5.5 billion in credit assistance for drinking water and wastewater infrastructure projects; $400 million for USDA's rural water and waste disposal grant program and direct loan authority of approximately $1.4 billion; $3.4 billion for HUD Community Development Block Grant (CDBG) funds (water and wastewater projects are among many eligible uses); and $58.6 million for Reclamation's Title XVI reclamation/recycling projects."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides background information on the types of water supply and wastewater treatment projects traditionally funded by the federal government and the several existing programs to assist communities with water supply and wastewater treatment. ", "For more than four decades, Congress has authorized and refined several programs to help communities address water supply and wastewater problems. The agencies that administer these programs differ in multiple ways. For example, in terms of funding mechanisms, projects developed by the Bureau of Reclamation (Reclamation) and the U.S. Army Corps of Engineers (USACE) typically require direct, individual project authorizations from Congress. ", "In contrast, standing program authorizations provide project funding for other agencies, including", "the Department of Agriculture (USDA), the Environmental Protection Agency (EPA), the Department of Commerce, and the Department of Housing and Urban Development (HUD).", "The key practical difference is that with the individual project authorizations there is no predictable assistance, or even guarantee of funding after a project is authorized, because funding must be secured each year in the congressional appropriations process. The programs, on the other hand, have set program criteria, are generally funded from year to year, and provide a process under which project sponsors compete for funding.", "In terms of scope and mission, the primary responsibilities of USACE are to maintain inland navigation, provide for flood and storm damage reduction, and restore aquatic ecosystems, while EPA's mission relates to protecting public health and the environment. Further, the Department of Commerce and HUD focus on community and economic development. Likewise, the specific programs discussed in this report\u2014while all address water supply and wastewater treatment to some degree\u2014differ in important respects. Some are national in scope (those of USDA, EPA, and the Department of Commerce, for example), while others are regionally focused (Reclamation's programs and projects). Some focus primarily on urban areas (HUD), some on rural areas (USDA). ", "For each of the projects and programs discussed, this report describes purposes, financing mechanisms, eligibility requirements, recent funding, and statutory/regulatory authority. The report does not address special projects and programs aimed specifically at assisting Indian Tribes, Alaskan Native Villages, and c olonias , or other regional programs such as those associated with the Appalachian region or U.S. Territories.", "This report focuses on municipal and industrial (M&I) water and wastewater activities. This report does not address projects and programs that involve irrigation, flood control, power supply, and recreation. However, in some cases (noted below), a federal program (e.g., Reclamation) may primarily support one or more of these other objectives while providing some support for M&I activities, even if only incidentally. ", "Other federal authorities of USDA's Rural Utilities Service, Reclamation, and USACE may be available to assist with the provision of emergency water and wastewater needs, such as improving access to water supplies during a drought. These authorities are not discussed in this report.", " Table 1 summarizes financial and other key elements of the projects and program activities discussed in this report. As indicated in the table, federal funding for the programs and projects discussed in this report varies greatly. Collectively, congressional funding for these programs in recent years has been somewhat eroded by overall competition among the many programs that are supported by discretionary spending, despite the continuing pressure from stakeholders and others for increased funding. While federal support for some traditional financing tools\u2014project grants, formula grants, capitalization grants, direct and guaranteed loans\u2014has declined, policymakers have begun to consider alternative financing approaches, such as trust funds, new types of federal loans, and options to encourage private sector investments in water infrastructure through public-private partnerships. Supporters of some of these newer ideas (e.g., the \" Water Infrastructure Finance and Innovation Act Program \") see them as options to supplement or complement, but not replace, traditional financing tools. ", "State and local contributions are the most significant source of total funds available to communities for drinking water and wastewater treatment improvements. According to the Congressional Budget Office, spending by state and local governments on drinking water and wastewater has increased much faster than spending by the federal government, especially since the mid-1970s. In 2017, the state and local share of such projects (both capital and operation and maintenance spending) was 96%, while the federal share was 4%."], "subsections": []}, {"section_title": "Department of the Interior", "paragraphs": [], "subsections": [{"section_title": "Bureau of Reclamation", "paragraphs": ["The Bureau of Reclamation (Reclamation) was established to implement the Reclamation Act of 1902, which authorized the construction of water works to provide water for irrigation in arid western states. Reclamation owns and manages 475 dams and 337 reservoirs, which are capable of storing 245 million acre-feet of water. The agency's inventory of 4,000 \"constructed real property assets\" has a current replacement value of nearly $100 billion. Overall, these facilities serve approximately 31 million people, delivering a total of approximately 28.5 million acre-feet of water (an acre-foot is enough to cover one acre of land one foot deep, or 325,851 gallons) annually in nondrought years. Reclamation-funded municipal and industrial (M&I) water deliveries total approximately 2.8 million acre-feet and have more than doubled since 1970. ", "Reclamation primarily manages M&I water supply facilities as part of larger, multipurpose reclamation projects serving irrigation, flood control, power supply, and recreation purposes. However, since 1980, Congress has individually authorized construction of \"rural water supply\" projects, as well as reclamation wastewater and reuse/recycling projects. This title also authorized Reclamation to undertake specific and general feasibility studies for reclamation wastewater and reuse projects and to research, construct, and operate demonstration projects. Even so, these projects remain a small part of the overall Reclamation portfolio.", "Historically, Reclamation constructed projects with federal funds, then established a repayment schedule based on the amount of total construction costs allocated to specific project purposes. Reclamation project authorizations typically require 100% repayment, with interest, for the M&I portion of water supply facilities, which makes Reclamation assistance a de facto long-term loan. However, for M&I projects under rural water and Title XVI authorities, Congress has authorized terms providing some or all federal funding for projects on a nonreimbursable basis (i.e. a de facto grant). For example, the federal government fully funds rural water projects serving Indian populations. For non-Indian rural water supply projects, Congress has authorized nonreimbursable federal funding of as much as 75%-85% of project costs. The federal share of costs for Title XVI projects is generally much lower than for rural water projects; it is limited to a maximum of 25% of total project costs or, for projects authorized since 1996, a maximum of $20 million per project authorization. "], "subsections": [{"section_title": "\"Traditional\" Multipurpose Reclamation Projects9", "paragraphs": ["Unlike many other programs described in this report, Reclamation undertakes projects largely at the explicit direction of Congress. Local project sponsors may approach Reclamation or Congress with proposals for project construction and funding; however, except where blanket feasibility study authorizations exist\u2014for example, for certain program areas described below\u2014specific project feasibility studies must be first authorized by Congress. Once a feasibility study is completed, congressional authorization is typically sought prior to construction. Because there is no \"program\" per se, there are no clear and concise eligibility or program criteria for selecting large, multipurpose projects. Rather, Congress relies on information provided in feasibility studies, including cost-benefit, engineering, and environmental analyses, and political considerations."], "subsections": [{"section_title": "Project Purposes", "paragraphs": ["Individual authorization statutes establish project purposes. Generally, M&I projects are part of larger, multipurpose projects such as those built for irrigation water supply, flood control, and hydro power purposes, or are authorized under the rural water supply or Title XVI water reuse programs described below. "], "subsections": []}, {"section_title": "Financing Mechanism", "paragraphs": ["Projects are financed and constructed up front by the federal government, and costs for M&I portions of such projects are generally scheduled to be repaid 100%, with interest, via \"repayment\" or \"water service\" contracts. Irrigation districts must also repay their share of project benefits, but such payments are not subject to interest charges."], "subsections": []}, {"section_title": "Eligibility Requirements", "paragraphs": ["Generally, local governments and organizations such as irrigation, water, or conservation districts may approach Reclamation and/or Congress for project support. All construction project funding must be appropriated by Congress. As noted earlier, Reclamation only works on projects located in the 17 western states (32 Stat. 388; 43 U.S.C. \u00a7391 et seq. ), unless otherwise specifically authorized. "], "subsections": []}, {"section_title": "Funding", "paragraphs": ["Funding information for the M&I portions of multipurpose projects is not readily available. Total regular Reclamation appropriations (gross current authority; not including permanent funding) for FY2019 were $1.571 billion. The total FY2020 budget request for Reclamation was $1.109 billion. "], "subsections": []}, {"section_title": "Statutory and Regulatory Authority", "paragraphs": ["Reclamation generally carries out its water supply activities in 17 western states as authorized by the Reclamation Act of 1902, as amended (32 Stat. 388; 43 U.S.C. \u00a7391 et seq. ), as well as through hundreds of individual project authorization statutes. "], "subsections": []}]}, {"section_title": "Rural Water Supply Projects", "paragraphs": ["Similar to its traditional multipurpose projects, Reclamation has undertaken individual rural water projects largely at the explicit direction of Congress. Generally speaking, Congress has in most cases prioritized appropriation of funding for already authorized projects rather than funds for new rural water construction projects.", "In lieu of the project-based approach to authorizing new rural water projects, in 2006 Congress authorized a rural water supply program ( P.L. 109-451 ). Under the program, Reclamation was authorized to work with rural communities and Indian tribes to identify municipal and industrial water needs and options to address such needs through appraisal investigations, and in some cases feasibility studies. In 2008, Reclamation published an interim final rule establishing future program criteria. According to the bureau, between 2006 and 2016, it used this authority to study approximately 26 projects to varying extents, although no projects were recommended for construction and authorized by Congress. This authority expired at the end of FY2016 and has not been renewed since. However, Reclamation continues to pursue authorized rural water projects that were previously authorized at the project level. As of early 2019, Reclamation reported that $1.3 billion was still needed to construct authorized, ongoing rural water projects."], "subsections": [{"section_title": "Project Purposes", "paragraphs": ["Historically, individual authorization statutes established rural water project purposes. Nearly half of the rural water supply projects authorized to date are somehow connected to previously authorized irrigation facilities under the Pick-Sloan Missouri Basin Program (PSMBP), or otherwise related to water service anticipated but not received under earlier PSMBP authorizations. Many rural water project authorizations are also linked to Indian water settlements or otherwise provide benefits to Indian tribes."], "subsections": []}, {"section_title": "Financing Mechanism", "paragraphs": ["Projects are generally cost-shared between the federal government and local sponsors. In the past, the federal cost-share for these projects has averaged 64%, and ranged from 15% to 80% for non-Indian rural water supply projects. As previously noted, the federal government pays up to 100% of the cost of Indian rural water supply projects. Assistance is generally provided on a competitive basis under the interim final rule's financial criteria. In accordance with the programmatic criteria provided in the rule, a nonfederal cost-share would be required, consistent with any future construction authorization for those projects."], "subsections": []}, {"section_title": "Eligibility Requirements15", "paragraphs": ["Local governments and organizations such as water and conservation districts or associations, including Indian tribes, may approach Reclamation and/or Congress for project support. Currently, all construction project funding must be authorized at the project level and appropriated by Congress. As noted earlier, Reclamation only works on projects located in the 17 western states (32 Stat. 388; 43 U.S.C. \u00a7391 et seq. ), unless specifically authorized by Congress. ", "Reclamation previously published an interim final rule (43 C.F.R. Part 404) that established criteria for developing new rural supply projects, but the authority for the program has since expired. The rule does not apply to previously authorized projects. As previously stated, ongoing rural water construction activities are limited to ongoing, previously authorized projects."], "subsections": []}, {"section_title": "Funding", "paragraphs": ["Enacted funding for rural water supply projects in FY2019 was $132.7 million. This included $98 million in additional funding above the Administration's FY2019 budget request to be allocated at the project level by Reclamation in a subsequent work plan for FY2019. For FY2020, the Administration's budget proposal requested $27.7 million for five ongoing authorized rural water projects. "], "subsections": []}, {"section_title": "Statutory and Regulatory Authority", "paragraphs": ["The Rural Water Supply Program was authorized by the Rural Water Supply Act of 2006 ( P.L. 109-451 , Title I; 120 Stat. 3345; 43 U.S.C. 2401 note). This programmatic authority expired at the end of FY2016 and has yet to be renewed. Construction and operations and maintenance is ongoing for several geographically specific projects that were previously authorized under various individual acts."], "subsections": []}]}, {"section_title": "Title XVI Projects", "paragraphs": ["Title XVI of P.L. 102-575 directs the Secretary of the Interior to develop a program to \"investigate and identify\" opportunities to reclaim and reuse wastewater and naturally impaired ground and surface water. Generally speaking, water reclaimed via Title XVI projects may be used for M&I water supply (nonpotable and indirect potable purposes only), irrigation supply, groundwater recharge, fish and wildlife enhancement, or outdoor recreation.", "The original Title XVI legislation authorized construction of five reclamation wastewater projects and six wastewater and groundwater recycling/reclamation studies. The act was amended in 1996 ( P.L. 104-266 ) to authorize another 18 construction projects and an additional study, and has been amended several times since, resulting in a total of 53 projects individually authorized for construction. Most recently, amendments to Title XVI enacted in December 2016 in the Water Infrastructure Improvements for the Nation Act (WIIN Act, P.L. 114-322 ) made changes to the program, including authorizing the Secretary of the Interior to accept and review nonfederal feasibility studies for potential planning, design, and construction projects. As of February 2019, 47 projects had been authorized under the WIIN Act authority. The WIIN Act also authorized a competitive grant program for construction of projects approved under this authority, including an authorization of $50 million in appropriations. Based on agency data, CRS estimates that as of early 2018, the backlog of remaining federal funding for the 94 authorized Title XVI projects (i.e., both \"traditional\" and WIIN Act authorized projects) was over $1 billion. "], "subsections": [{"section_title": "Project Purposes", "paragraphs": ["The general purpose of Title XVI projects is to provide supplemental water supplies by recycling/reusing agricultural drainage water, wastewater, brackish surface and groundwater, and other sources of contaminated water. Projects may be permanent or for demonstration purposes."], "subsections": []}, {"section_title": "Financing Mechanism", "paragraphs": ["Title XVI projects are funded through partial de facto grants. The funding is part of the larger Reclamation WaterSMART program, which also provides grants for water conservation and river basin studies under separate authority granted in the Secure Water Act ( P.L. 111-11 , subtitle B). Title XVI project construction costs are shared by the federal government and a local project sponsor or sponsors. The federal share is generally limited to a maximum of 25% of total project costs and is nonreimbursable, resulting in a de facto grant to the local project sponsor(s). In 1996, Congress limited the federal share of individual projects to $20 million in 1996 dollars ( P.L. 104-266 ). The federal share of feasibility studies is limited to 50% of the total, except in cases of \"financial hardship\"; however, the federal share must be reimbursed. The Secretary may also accept in-kind services that are determined to positively contribute to the study."], "subsections": []}, {"section_title": "Eligibility Requirements", "paragraphs": ["Similar to other Reclamation activities, the Title XVI water reclamation and wastewater recycling program is limited to projects and studies in the 17 western states unless otherwise specified. Authorized recipients of program assistance include \"legally organized non-federal entities,\" such as irrigation districts, water districts, municipalities, and Indian tribes. Prior to enactment of the WIIN Act, Administration requests for construction funding have generally been limited to projects where (1) an appraisal investigation and feasibility study have been completed and approved by the Secretary; (2) the Secretary determined that the project sponsor was capable of funding the nonfederal share of project costs; and (3) the local sponsor entered into a cost-share agreement with Reclamation. The WIIN Act provided DOI with additional authority to accept nonfederal feasibility studies and approve and consider these projects for construction funding if they meet Title XVI program criteria, including that (1) the study complies with federal laws and regulations applicable to water reuse and recycling studies, and (2) the project is technically and financially feasible and provides a federal benefit in accordance with Reclamation laws. The WIIN Act authority has essentially rendered unnecessary the prior practice of obtaining geographically specific authorizations for individual Title XVI projects before they can pursue funding.", "Over time, Reclamation has issued and revised multiple documents outlining evaluation criteria for prioritizing Title XVI projects. The most recent evaluation criteria for Title XVI projects (for FY2018 funding) was posted for review and comment in March 2018. "], "subsections": []}, {"section_title": "Funding", "paragraphs": ["The total regular appropriation for the Title XVI program in FY2019 was $58.6 million, with $20 million of this funding designated as being available for WIIN Act\u2013authorized projects. The Administration's FY2020 request for Title XVI was $3.0 million. ", "Projects authorized prior to 1996 ranged in size from $152 million ($38 million for Reclamation's share), to $690 million ($172 million for Reclamation's share). Post-1996 project authorizations have been smaller in size, ranging from $6.6 million ($1.65 million for Reclamation's share) to $319 million ($20 million for Reclamation's share). "], "subsections": []}, {"section_title": "Statutory and Regulatory Authority", "paragraphs": ["The original statutory authority for the reclamation wastewater and reuse program is the Reclamation Wastewater and Groundwater Study and Facilities Act, Title XVI of P.L. 102-575 , as amended (43 U.S.C. 390h et. seq.). Other statutes that authorized Title XVI projects include the Reclamation Recycling and Water Conservation Act of 1996 ( P.L. 104-266 ); the Oregon Public Land Transfer and Protection Act of 1998 ( P.L. 105-321 ); the 1999 Water Resources Development Act ( P.L. 106-53 , Section 595); the Consolidated Appropriations Act for FY2001 ( P.L. 106-554 , Division B, Section 106); a bill amending the Reclamation Wastewater and Groundwater Study and Facilities Act ( P.L. 107-344 ); the Consolidated Appropriations Act for FY2003 ( P.L. 108-7 , Division D, Section 211); the Emergency Wartime Supplementals Act of 2003 ( P.L. 108-11 ); the Irvine Basin Surface and Groundwater Improvement Act of 2003 ( P.L. 108-233 ); a bill amending the Reclamation Wastewater and Groundwater Study and Facilities Act ( P.L. 108-316 ); the Hawaii Water Resources Act of 2005 ( P.L. 109-70 ); the Consolidated Appropriations Act, 2008 ( P.L. 110-161 ); the Consolidated Natural Resources Act of 2009 ( P.L. 110-229 ); the Omnibus Public Land Management Act of 2009 ( P.L. 111-11 ; Title IX, Subtitle B); and the Water Infrastructure Improvements for the Nations Act ( P.L. 114-322 , Title III, Subtitle J). ", "[This section was prepared by Charles V. Stern, Specialist in Natural Resources Policy, Resources, Science, and Industry Division.]"], "subsections": []}]}]}]}, {"section_title": "Department of Defense", "paragraphs": [], "subsections": [{"section_title": "Army Corps of Engineers (Civil Works Program)", "paragraphs": ["Under its civil works program, USACE operates water resource projects throughout the country. USACE civil works activities are concentrated on three principal missions\u2014navigation, flood damage reduction, and aquatic ecosystem restoration. Many USACE activities also support municipal and industrial (M&I) water supply, environmental infrastructure, hydroelectric generation, fish and wildlife, and recreation. "], "subsections": [{"section_title": "Municipal and Industrial (M&I) Water Supply", "paragraphs": ["A total of 136 USACE reservoirs have roughly 9.8 million acre-feet of storage designated for M&I water. Most of this water was allocated to M&I purposes when the projects were constructed; around 0.9 million acre-feet of this storage space has been allocated to M&I use from existing USACE reservoirs using USACE's general water supply authorities. The provision of M&I water from USACE reservoirs, as discussed below, is subject to availability, and the associated costs are 100% a local, nonfederal responsibility. ", "Additionally Congress has chosen to authorize a small number of USACE projects primarily for water supply. In the WIIN Act, Congress expanded the agency's authorities related to \"water conservation\" at its projects. USACE also has authorities related to water supply provision as part of emergency and disaster relief, including during droughts. For all of its projects, USACE policy is that it does not acquire water rights for these water supply and conservation uses; the water user is responsible for securing water rights. Congress has given USACE limited general authority for M&I water supply. A 1958 authority is for permanent allocation of water storage for M&I applications, and a 1944 authority provides for temporary contracts for surplus water from USACE reservoirs. The Water Supply Act of 1958 authorized USACE (and Reclamation) to recommend economically justified M&I water supply storage space in new or existing reservoirs. USACE also has authority for the short-term provision of surplus water as specified in the Flood Control Act of 1944; surplus water contracts have generally been limited to five-year terms, with options to extend."], "subsections": [{"section_title": "Project Purposes", "paragraphs": ["As previously noted, Congress authorized USACE to allocate a portion of its multipurpose reservoirs for permanent M&I storage, or to provide M&I water from USACE reservoirs under temporary contacts for surplus water. Neither authority allows USACE to significantly modify its projects or to seriously affect the authorized purposes for which the project operates in order to provide for M&I water supply, nor allows USACE to sell or allocate quantities of water. Instead, USACE M&I contracts are for space in a reservoir and provide no guarantee of a fixed quantity of water to be delivered in a given year. Under these authorities, USACE delivers water if it is available in the storage space and if delivery does not seriously affect other authorized purposes."], "subsections": []}, {"section_title": "Financing Mechanism", "paragraphs": ["No federal money is provided to nonfederal entities through USACE for this work; instead, it is nonfederal entities that pay USACE for M&I water storage. USACE construction projects are financed up front by the federal government, and costs for M&I project purposes are repaid 100%, with interest, via long-term (typically 30-50 years) repayment contracts, unless specified otherwise in law. Through annual contract payments, nonfederal entities pay for the M&I water supply storage services provided. Most agreements for new M&I water supply storage are associated with existing USACE reservoirs and are managed through agreements requiring annual payments. "], "subsections": []}, {"section_title": "Eligibility Requirements", "paragraphs": ["For new USACE projects with M&I water supply, existing law and agency policy require that (1) water supply benefits and costs be equitably allocated among multiple purposes; (2) repayment by state or local interests be agreed to before construction; (3) the water supply allocation for anticipated demand at any project not exceed 30% of the total estimated cost; (4) repayment shall be either during construction (without interest), or over 30 years (with adjustable interest rates); and (5) users reimburse USACE annually for all operation and maintenance or replacement costs. Occasional exceptions to USACE's general authority have been enacted by Congress. Allocation of water supply at existing projects is limited to actions that do not seriously affect project purposes."], "subsections": []}, {"section_title": "Funding", "paragraphs": ["The fees collected from nonfederal entities pursuant to water supply agreements are deposited into a general account at the U.S. Treasury. The agency uses the federal funds primarily for administration of its water supply authorities. From FY2018 appropriations, USACE used $8 million to implement its water supply authorities and $1 million for two authorized USACE water supply construction projects to address groundwater depletion in Arkansas. From FY2019 annual appropriations, USACE planned to use $7 million for its water supply authorities, $3 million for the ground water depletion projects in Arkansas, and $2 million a water supply reservoir reallocation study as part of an expansion of a USACE reservoir in Colorado. The Administration's FY2020 budget request included $7 million for USACE's water supply storage activities. "], "subsections": []}, {"section_title": "Statutory Authority", "paragraphs": ["Water Supply Act of 1958 (Title III, 72 Stat. 320, as amended; 43 U.S.C. \u00a7390b); Flood Control Act of 1944 (Section 6, 58 Stat. 890, as amended, 33 U.S.C. \u00a7708); and project specific authorities in Water Resources Development Acts or similar legislation."], "subsections": []}]}, {"section_title": "Environmental Infrastructure Assistance", "paragraphs": [], "subsections": [{"section_title": "Project Purpose", "paragraphs": ["Federal policy generally is that community water supply is a local and state responsibility. However, communities, particularly rural and small communities, increasingly have sought federal water supply assistance. Since 1992, Congress has enacted more than 400 authorizations allowing USACE to provide designated communities, counties, and states with design and construction assistance for drinking water and wastewater infrastructure (including treatment, and distribution/collection facilities) and source water protection and development; these activities are known as environmental infrastructure projects. The authorizations of federal appropriations for these activities vary widely from $0.5 million to $25 million for planning and design assistance, to $0.2 million to $435 million for construction assistance. As with Reclamation's rural water supply and Title XVI projects, congressional funding of these authorizations has enlarged the scope of the agency's activities. Like many USACE activities, congressional support for specific environmental infrastructure assistance authorizations and appropriations is complicated by the authorities' geographic specificity, which is problematic under congressional earmark bans and moratoria."], "subsections": []}, {"section_title": "Financing Mechanism", "paragraphs": ["Under most USACE environmental infrastructure assistance authorizations, federal assistance typically requires a 75% federal and 25% nonfederal cost-share. The federal portion typically is provided by Congress to USACE in annual Energy and Water Development Act appropriations legislation. How USACE and nonfederal financing is managed varies according to the specifics of the authorization. Sometimes USACE is responsible for performing the assistance or for contracting out the work; under other authorizations, USACE uses appropriated funds to financially assist by reimbursing nonfederal sponsors for their work."], "subsections": []}, {"section_title": "Eligibility Requirements", "paragraphs": ["Because environmental infrastructure assistance activities are not part of a national USACE program per se, there are no clear and/or consistent general eligibility criteria. Most of USACE environmental infrastructure authorities specify a specific geographic location (e.g., a city, county, or state) and types of projects (e.g., municipal drinking water) as the principal eligibility requirements. Consequently, an activity's eligibility is evaluated by identifying whether there is an authorization for the geographic area of the activity, and whether the type of activity is eligible under that authorization. Because this assistance is not associated with a traditional USACE water resources projects, it is not subject to USACE planning requirements (e.g., a benefit-cost analysis is not performed). "], "subsections": []}, {"section_title": "Funding", "paragraphs": ["Only a subset of authorized USACE environmental infrastructure activities has received appropriations. Since 1992, Congress has provided USACE roughly $2 billion in funds for environmental infrastructure assistance. Congress provided USACE with $70 million for environmental infrastructure assistance activities in FY2018 and $77 million in FY2019. These funds are part of the \"additional funding\" provided by Congress in enacted appropriations bills. After enactment of an appropriations bill, the Administration follows guidance provided in the bill and accompanying reports to guide its use of these funds on authorized environmental infrastructure assistance activities. The selected environmental infrastructure assistance activities are identified in the agency's Work Plan for the fiscal year, which is typically available within two months after enactment of appropriations. Recent funds have been used to continue ongoing environmental infrastructure assistance. Interpretation of limitations on initiating new USACE activities in appropriations bills and accompanying reports appear to be limiting initiation of USACE funding for the environmental infrastructure activities that do not have a broad geographic scope.", "The Trump Administration requested no funding for these activities in its FY2020 request. Since the first authorization for environmental infrastructure assistance in 1992, no administration has asked for funding for USACE environmental infrastructure assistance."], "subsections": []}, {"section_title": "Statutory Authority", "paragraphs": ["Prior to 1992, USACE generally was not widely involved with municipal drinking water treatment and distribution and wastewater collection and treatment; the agency is now authorized to contribute to more than 400 environmental infrastructure projects and programs. A Water Resources Development Act or similar legislation is the typical legislative vehicle for USACE authorizations. Beginning with Sections 219 and 313 of WRDA 1992 ( P.L. 102-580 ), Congress has authorized USACE to assist local interests with planning, design, and construction assistance for environmental infrastructure projects. Subsequent USACE authorization bills included new environmental infrastructure assistance activities, and raised the authorized funding ceilings for previously authorized projects. Policies limiting congressionally directed spending have limited recent congressional authorizing activity of environmental infrastructure assistance. In December 2016, Congress expanded a process for nonfederal entities to propose modifications to existing authorities for environmental infrastructure assistance. For those proposals that meet the criteria established by Congress, the Administration transmits those proposals to Congress for its consideration as part of deliberations regarding USACE authorization legislation.", "[This section was prepared by Anna E. Normand, Analyst in Natural Resources Policy, Resources, Science and Industry Division.]"], "subsections": []}]}]}]}, {"section_title": "Department of Agriculture", "paragraphs": [], "subsections": [{"section_title": "Rural Utilities Service (Water and Waste Disposal Programs)", "paragraphs": ["The USDA has a variety of water and waste disposal programs to provide loans and grants for drinking water, sanitary sewer, and storm drainage facilities in rural communities. Eligibility is limited to rural communities of 10,000 population or less. These programs are administered at the national level by the Rural Utilities Service (RUS) at USDA. RUS allocates program funds to the USDA State Rural Development Offices through an allocation formula based on rural population, poverty, and unemployment. Loans originate at the USDA's State Rural Development offices. ", "Between 2009 and 2016, RUS had funded $13.9 billion for nearly 5,825 projects for water supply and wastewater facilities. According to an RUS FY2016 annual report, 46% of $1.8 billion in investments in that year were for water supply, 49% were for wastewater systems, and the remaining 5% were for combined projects. There is heavy demand for water supply and wastewater disposal funds for small rural communities. At the end of FY2016, USDA reported a $2.5 billion backlog of requests for water and wastewater projects. "], "subsections": [{"section_title": "Program Purpose", "paragraphs": ["The purpose of these programs is to provide basic human amenities, alleviate health hazards, and promote the orderly growth of the nation's rural areas by meeting the need for new and improved rural water and waste disposal facilities. Eligible projects can include drinking water facilities, sanitary sewers, and stormwater drainage and disposal facilities. Funds may be used for installation, repair, improvement, or expansion of rural water facilities, including costs of distribution lines and well-pumping facilities. The law directs that USDA make grants of 1% to 3% of total grant funding to qualified nonprofits to provide technical assistance and training to help communities in preparing applications for grants and loans and to help problem solving operation and maintenance of existing water and waste disposal facilities in rural areas. This has totaled $18 million to $20 million annually in recent years. For FY2018, technical assistance for water and waste disposal facilities will increase to $40 million. "], "subsections": []}, {"section_title": "Financing Mechanism", "paragraphs": ["Direct loans, guaranteed loans, and grants provide USDA support for water and waste disposal projects. USDA prefers making direct loans. Grants are made only when necessary to reduce average annual user charges to a reasonable level, particularly for lower-income communities. The split between loans and grants distributed from the regular infrastructure program, which is the large majority of spending, was about 75-25 in 2015 and 2016. There is no statutory distribution formula. Funds are allocated to states based upon rural population, number of households in poverty, and unemployment. There are no matching requirements for states.", "Water and Waste Disposal Loans. The Rural Development Act of 1972 authorized establishment of the Rural Development Insurance Fund under the Consolidated Farm and Rural Development Act. Among other activities, this fund is used for loans (direct and guaranteed) to develop storage, treatment, purification, or distribution of water or collection, treatment, or disposal of waste in low-income rural areas. Loans are repayable in not more than 40 years or the useful life of the facilities, whichever is less. USDA makes either direct loans to applicants or guarantees up to 90% of loans made by third-party lenders such as banks and savings and loan associations.", "Loan interest rates are based on the community's economic and health environment and are designated poverty, market, or intermediate. Poverty interest rate loans are made in areas where the median household income (MHI) falls below the higher of 80% of the statewide nonurban MHI, or the poverty level, and the project is needed to meet health or sanitary standards; by law, this rate is set at 60% of the market rate. The market rate is adjusted quarterly and is set using the average of a specified 11-bond index. It applies to loans to applicants where the MHI of the service area exceeds the statewide nonurban MHI. The intermediate rate applies to loans that do not meet the criteria for the poverty rate and which do not have to pay the market rate; by law, this rate is set at 80% of the market rate. Interest rates on guaranteed loans are negotiated between the borrower and the lender. The 2014 farm bill ( P.L. 113-79 ) amended the water and waste disposal direct and guaranteed loan programs to encourage financing by private or cooperative lenders to the maximum extent possible, use of loan guarantees where the population exceeds 5,500, and use of direct loans where the impact of a guaranteed loan on rate payers would be significant.", "Water and Waste Disposal Grants . Grants for the development costs of water supply and waste disposal projects in rural areas also are authorized under the Consolidated Farm and Rural Development Act. Only communities with poverty and intermediate rate incomes qualify for USDA grants. An eligible project must serve a rural area that is not likely to decline in population below the level for which the project was designed and constructed so that adequate capacity will or can be made available to serve the reasonably foreseeable growth needs of the area. The 2014 farm bill ( P.L. 113-79 ) authorized appropriations at $30 million annually through FY2018 for these grants. The appropriation for water and waste water grants is $400 million. ", "Grant funds may be available for up to 75% of the development cost of a project and should only be used to reduce user costs to a reasonable level. Grants are only made after a determination of the maximum amount of loan that a community can afford and still have reasonable user rates. Grants, which typically provide 35%-45% of project costs, may be used to supplement other funds borrowed or furnished by applicants for project costs, and may be combined with USDA loans when the applicant is able to repay part, but not all, of the project costs. Priority is given to projects serving populations of less than 5,500.", "Emergency Community Water Assistance Grants . RUS is also authorized to help eligible communities prepare, or recover from, an emergency that threatens the availability of safe, reliable drinking water. Grants, ranging from $10,000 to a maximum of $500,000, are provided for projects to serve a rural area with a population of 10,000 or less that has a median household income not in excess of the statewide nonmetropolitan median household income. Grants for repairs, partial replacement, or significant maintenance of an established system cannot exceed $150,000. Communities use the funds for new systems, waterline extensions, construction of water source and treatment facilities, and repairs or renovation of existing systems and may be awarded for 100% of project cost. Applicants compete on a national basis for available funding. Funding for this program is mandatory through reservation of 3% to 5% of appropriated water and waste disposal grant funds. Of the amounts appropriated for water and waste disposal grants, 3% to 5% is reserved for grants for the Emergency and Imminent Water Assistance program. The 2014 farm bill ( P.L. 113-79 ) also authorized an additional $35 million per year through FY2018 for this program. Amounts provided through this program have been quite variable over time, depending on need. In FY2014, $14.7 million was distributed in 14 states; in FY2015, $2.5 million was distributed in 14 states. No funds were appropriated for the program in FY2017 and FY2018."], "subsections": []}, {"section_title": "Eligibility Requirements", "paragraphs": ["Eligible entities are municipalities, counties, and other political subdivisions of a state; associations, cooperatives, and organizations operated on a not-for-profit basis; Indian tribes on federal and state reservations; and other federally recognized tribes. USDA's loan and grant programs are limited to community service areas (including areas in cities or towns) with population of 10,000 or less. To be eligible for assistance, communities must be unable to get reasonable credit through normal commercial channels. Also, communities must be below certain income levels. Loans and grants are made for projects needed to meet health or sanitary standards, including Clean Water Act and Safe Drinking Water Act standards and requirements. The 2014 farm bill ( P.L. 113-79 ) authorized $5 million per year through FY2018 for USDA to make grants to private nonprofit organizations for the purpose of providing loans to eligible individuals for construction, refurbishing, and servicing of individually owned household water well systems. Loans are limited to $11,000 per water well system. Authorized appropriations for the program were $993,000 in both FY2017 and FY2018. "], "subsections": []}, {"section_title": "Funding", "paragraphs": ["Funds available through FY2018 appropriations for USDA's water and waste disposal programs were included in two titles of P.L. 115-141 . Title III provided $560.3 million in total for FY2018, including $400.0 million in grants, $2.0 million in direct loan subsidies ($1.2 billion in loan authority), and $230,000 in subsidy to support guaranteed loans ($50.0 million in loan authority). Title VII (Section 780) provided an additional $500 million for the grant and loan program \"of which not to exceed $495,000,000 shall be for grants.\" Out of the total FY2018 funds, USDA has appropriations of $1.0 million for grants to capitalize revolving loans for water and waste disposal systems and $68 million to support water and waste disposal projects in the colonias, Alaskan Native communities, and Hawaiian Native communities. For FY2019, the President's budget requested $1.20 billion in direct loan authority and $0 for guaranteed loans and water and waste disposal grants."], "subsections": []}, {"section_title": "Statutory and Regulatory Authority", "paragraphs": ["Statutory authority for the water and waste disposal loan and grant programs is the Consolidated Farm and Rural Development Act, as amended, Section 306, 7 U.S.C. 1926. Regulations for these programs are codified at 7 C.F.R. Parts 1778-1780. ", "[This section was prepared by Tadlock Cowan, Analyst in Natural Resources and Rural Development Policy, Resources, Science and Industry Division.]"], "subsections": []}]}, {"section_title": "Natural Resources Conservation Service", "paragraphs": ["The USDA provides assistance to watershed activities under four closely related authorities that are administered by the Natural Resources Conservation Service (NRCS). The Watershed and Flood Prevention Operations Program (WFPO) consists of two authorities\u2014referred to as P.L. 566 and P.L. 534 projects. These authorize NRCS to provide technical and financial assistance to state and local organizations to plan and install measures to prevent erosion, sedimentation, and flood damage and to conserve, develop, and utilize land and water resources. Dams constructed under the WFPO program are eligible to receive assistance under the Small Watershed Rehabilitation Program, authorized by Congress in 2000. The fourth watershed authority is an emergency program that is not discussed in this report."], "subsections": [{"section_title": "Watershed and Flood Prevention Operations", "paragraphs": ["The WFPO program consists of projects built under two authorities\u2014the Watershed Protection and Flood Prevention Act of 1954 (P.L. 83-566) and the Flood Control Act of 1944 (P.L. 78-534). The vast majority of the projects have been built pursuant to the authority of P.L. 83-566 (referred to as P.L. 566 projects), under which smaller projects (discussed below) authorized by the Chief of the NRCS are constructed. Larger projects must be approved by Congress. Eleven projects were specifically authorized under P.L. 78-534 (referred to as P.L. 534 projects); they are much larger and more expensive than P.L. 566 projects.", "Under P.L. 566, over 2,100 projects have been authorized through FY2018. In FY2018, NRCS funded 23 new projects, 19 existing projects, and five remedial projects.", "The 11 projects that were specifically authorized under P.L. 534 encompass a total of almost 37.9 million acres and are divided into component projects in subwatersheds. Approximately 90% of the work on the P.L. 534 projects is complete. With the exception of the two smallest projects, the estimated federal costs for each of these projects range from $40 million to more than $275 million. Three of the projects have been completed, and work on the remainder continues in one or more subwatersheds.", "The FY2019 Consolidated Appropriations Act ( P.L. 116-6 , FY2019 appropriations) appropriated $150 million in FY2019. Recent amendments in the Agriculture Improvement Act of 2018 (2018 farm bill, P.L. 115-334 ) permanently authorized an additional $50 million annually from mandatory sources to the WFPO program."], "subsections": [{"section_title": "Program Purpose", "paragraphs": ["The purpose of the program is to provide technical and financial assistance to states and local organizations to plan and install watershed projects. Both P.L. 566 and P.L. 534 have similar objectives and are implemented following similar procedures. Both programs fund land treatment, and nonstructural and structural facilities for flood prevention, erosion reduction, agricultural water management, public recreation development, fish and wildlife habitat development, and municipal or industrial water supplies. Structural measures can include dams, levees, canals, and pumping stations. Local sponsors agree to operate and maintain completed projects."], "subsections": []}, {"section_title": "Financing Mechanism", "paragraphs": ["Partial project grants, plus provision of technical advisory services are provided. Financing for water projects under the WFPO program varies depending on project purposes. The federal government pays all costs related to construction for flood control purposes only. Costs for nonagricultural water supply must be repaid by local organizations; however, up to 50% of costs for land, easements, and rights-of-way allocated to public fish and wildlife and recreational developments may be paid with program funds. Additionally, sponsors may apply for USDA Rural Utilities Service (RUS) Water and Waste Program loans to finance the local share of project costs. Participating state and local organizations pay all operation and maintenance costs."], "subsections": []}, {"section_title": "Eligibility Requirements", "paragraphs": ["P.L. 566 has been called the small watershed program because no project may exceed 250,000 acres, and no structure may exceed more than 12,500 acre-feet of floodwater detention capacity, or 25,000 acre-feet of total capacity. The Senate and House Agriculture Committees must approve projects that need an estimated federal contribution of more than $25 million for construction or include a storage structure with a capacity in excess of 2,500 acre feet. If the storage structure will have a capacity in excess of 4,000 acre feet, approval is also required from the Senate Environment and Public Works Committee and the House Transportation and Infrastructure Committee. There are no population or community income-level limits on applications for P.L. 566 projects, but at least 20% of the total benefits of the project must directly relate to agriculture (including rural communities)."], "subsections": []}, {"section_title": "Funding", "paragraphs": ["The enacted FY2019 appropriation provided WFPO with $150 million. Of the $150 million, $50 million is required to be allocated to projects and activities that can \"commence promptly;\" address regional priorities for flood prevention, agricultural water management, inefficient irrigation systems, fish and wildlife habitat, or watershed protection; or watershed protection projects authorized under P.L. 534. The FY2020 Administration's request proposes no funding for the program.", "Beginning in FY2014, when no funding was appropriated for WFPO, Congress directed funding from another conservation account\u2014Conservation Operations, which funds general conservation technical assistance offered by NRCS\u2014to fund projects authorized under the WFPO authority. The use of Conservation Operation funding for WFPO activities has continued each fiscal year through the FY2019 appropriations. This congressionally directed amount is in addition to the $150 million made available for the program as a whole in FY2019.", "In addition to discretionary funding provided through appropriations, the 2018 farm bill permanently authorized $50 million annually from mandatory sources. This mandatory funding will be available unless otherwise amended by Congress. Mandatory funds are authorized for P.L. 566 projects as well as rehabilitation work under the Small Watershed Rehabilitation Program. "], "subsections": []}, {"section_title": "Statutory and Regulatory Authorities", "paragraphs": ["The Watershed and Flood Prevention Operations (WFPO) program consists of two authorities: the Flood Control Act of 1944, P.L. 78-534, as amended, 58 Stat. 905 (33 U.S.C. 701b-1); and the Watershed Protection and Flood Prevention Act of 1954, P.L. 83-566, as amended, 68 Stat. 666 (16 U.S.C. 1001-1008). Regulations are codified at 7 C.F.R. Part 622. "], "subsections": []}]}, {"section_title": "Small Watershed Loans", "paragraphs": ["As part of its lending responsibilities, the Rural Utilities Service (RUS) at USDA (see discussion above) makes loans to local organizations to finance the local share of the cost of installing, repairing, or improving facilities, purchasing sites and easements, and related costs for P.L. 566 and P.L. 534 projects. Loans are limited to $10 million; they must be repaid within 50 years; and the cost-share assistance may not exceed the rate of assistance for similar projects under other USDA conservation programs. NRCS and the local organization must also agree on a plan of work before a loan is obligated. Over the life of the program, 495 RUS loans have been made at a value of almost $176 million."], "subsections": []}, {"section_title": "Small Watershed Rehabilitation", "paragraphs": ["Some of the oldest P.L. 566 projects that have exceeded their design life (dams were constructed starting in 1948) need rehabilitation work to continue to protect public health and safety by reducing any possibility of dam failure, and to meet changing resource needs. By December 2018, approximately 6,245 watershed dams have reached the end of their originally designed life spans. By the end of 2019, more than half of the 11,847 watershed dams will have reached the end of their designed life spans. In response to this concern, Congress created a rehabilitation program, known as the Small Watershed Rehabilitation Program, in Section 313 of the Grain Standards and Warehouse Improvement Act of 2000 ( P.L. 106-472 ), which revised the WFPO program. From 2000 to 2018, the program authorized the rehabilitation of 288 dams in 31 states. Of this total, 150 projects are complete, and the remaining projects are waiting for funding."], "subsections": [{"section_title": "Program Purpose", "paragraphs": ["The purpose of rehabilitation is to extend the service life of the dams and bring them into compliance with applicable safety and performance standards or to decommission the dams so they no longer pose a threat to life and property."], "subsections": []}, {"section_title": "Financing Mechanism", "paragraphs": ["Partial project grants, plus provision of technical advisory services are provided. NRCS may provide 65% of the total rehabilitation costs but no more than 100% of the actual construction cost, and is prohibited from funding operation and maintenance expense. Rehabilitation projects also provide an opportunity to modify projects to provide additional benefits, including municipal water supplies. Local watershed project sponsors provide 35% of the cost of a rehabilitation project and obtain needed land rights and permits. The source of these funds varies from state to state and may include bonds, local taxing authority, state appropriations, or in-kind technical services. "], "subsections": []}, {"section_title": "Eligibility Requirements", "paragraphs": ["Only dams constructed under the P.L. 566 authority, the Resource Conservation and Development (RC&D) program, and pilot watershed projects authorized in the Agriculture Appropriations Act of 1953 are eligible for assistance under the Small Watershed Rehabilitation Program."], "subsections": []}, {"section_title": "Funding", "paragraphs": ["Since FY2000, Congress has appropriated more than $700 million for rehabilitation projects. The Trump Administration is seeking no funding for the Small Watershed Rehabilitation program for FY2020, citing the Administration's position that the maintenance, repair, and operation of these dams are the responsibility of local project sponsors. Similar positions were cited under the George W. Bush and Obama Administrations.", "The Small Watershed Rehabilitation Program has discretionary funding authority of up to $85 million annually. The program has received an average annual appropriation of $11.2 million over the last five years, including $10 million in FY2019.", "In the past, the program was authorized through omnibus farm bills to receive mandatory funding to remain available until expended. This funding was frequently restricted through annual appropriations to generate annual savings. The FY2018 appropriations act was the first to not restrict the remaining mandatory carryover, thereby making approximately $55 million available for obligation. The 2018 farm bill reauthorized discretionary funding authority for the program, but no additional mandatory funding authority was provided."], "subsections": []}, {"section_title": "Statutory and Regulatory Authorities", "paragraphs": ["The Small Watershed Rehabilitation Program is authorized by the Watershed Protection and Flood Prevention Act of 1954, P.L. 83-566, as amended by \u00a7313 of the Grain Standards and Warehouse Improvement Act of 2000, P.L. 106-472 , 114 Stat. 2077 (16 U.S.C. 1012). Regulations are codified at 7 C.F.R. Part 622. ", "[This section was prepared by Megan Stubbs, Specialist in Agricultural Conservation and Natural Resources Policy, Resources, Science and Industry Division.]"], "subsections": []}]}]}]}, {"section_title": "Environmental Protection Agency", "paragraphs": [], "subsections": [{"section_title": "Clean Water State Revolving Fund Loan Program", "paragraphs": ["The Clean Water Act (CWA) establishes performance levels (e.g., secondary treatment) to be attained by municipal sewage treatment plants in order to prevent the discharge of harmful wastes into surface waters. The act also provides financial assistance, so that communities can construct treatment facilities in compliance with the law, which has the overall objective of restoring and maintaining the chemical, physical, and biological integrity of the nation's waters.", "Since 1973, Congress has appropriated approximately $98 billion in program grants that support wastewater projects. Funds are distributed to states under a statutory allocation formula and are used to assist qualified projects on priority lists that are determined by individual states. These funds are used to assist localities in meeting wastewater infrastructure needs most recently estimated (in 2016) by EPA and states at $271 billion nationally (over the next 20 years) for all categories of projects eligible for federal assistance under the law.", "In 1987, Congress amended the CWA ( P.L. 100-4 ) and initiated a new program of federal capitalization grants to support Clean Water State Revolving Funds (CWSRFs). Prior to 1989 (when the CWSRF program became effective), states used their annual allocations to make grants to cities and other eligible recipients. Since 1989, federal funds (grants of appropriated funds) have been used to capitalize state loan programs with states providing matching funds equal to 20% of the federal funds to capitalize the CWSRF. All 50 states, plus Puerto Rico, participate in the CWSRF program. Over the long term, the loan programs are intended to be sustained through repayment of loans to states, thus creating a continuing source of assistance for other communities. ", "EPA data indicate that since 1987, 67% of all loans and other assistance have gone to assist communities with 10,000 people or fewer. These loans and assistance have comprised 22% of total CWSRF funding."], "subsections": [{"section_title": "Program Purpose", "paragraphs": ["The CWSRF program provides assistance in constructing and upgrading publicly owned municipal wastewater treatment plants, implementing nonpoint pollution management programs, developing and implementing management plans under the National Estuary Program, and supporting other eligible activities."], "subsections": []}, {"section_title": "Financing Mechanism", "paragraphs": ["EPA grants (from appropriated funds) and state matching funds help capitalize state CWSRF programs. These programs may provide seven general types of financial assistance: making loans; buying or refinancing existing local debt obligations; guaranteeing or purchasing insurance for local debt obligations; guaranteeing CWSRF debt obligations (i.e., to be used as security for leveraging the assets in the CWSRF); providing loan guarantees for local government revolving funds; earning interest on fund accounts; and supporting reasonable costs of administering the CWSRF. Loans are made at or below market interest rates, including zero interest loans, as determined by the state in negotiation with the applicant. ", "Although the CWSRF program is generally a loan program, states may (under certain conditions) provide \"additional subsidization\"\u2014such as principal forgiveness, negative interest loans, or a combination\u2014to municipalities that meet the state's affordability criteria and for particular projects, such as those that implement water or energy efficiency goals or mitigate stormwater runoff. In addition, appropriations acts in recent years have required states to use minimum percentages of their allotted funds to provide additional subsidization. This trend began with the American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ), which required states to use at least 50% of their funds for this purpose. Recent appropriations acts included an identical condition, requiring 10% of the CWSRF grants be used \"to provide additional subsidy to eligible recipients in the form of forgiveness of principal, negative interest loans, or grants (or any combination of these).\"", "All principal and interest payments on loans must be credited directly to the SRF, and loans are to be repaid within 30 years of a project's completion, not to exceed the project's useful life. States are required to ensure that CWSRF-funded projects use American iron and steel products and apply the prevailing wage requirements of the Davis-Bacon Act."], "subsections": []}, {"section_title": "Eligibility Requirements", "paragraphs": ["Eligible loan recipients for CWSRF assistance are any municipality, intermunicipal, interstate, or state agency. Private utilities are not eligible to receive funds for construction of wastewater treatment works and most other eligible activities, but in some cases, privately owned projects are eligible for certain types of activities (e.g., decentralized wastewater treatment projects; projects to manage, reduce or treat stormwater; or development of watershed management projects).", "Projects or activities eligible for funding were, initially, those needed for constructing or upgrading (and planning and designing) publicly owned municipal wastewater treatment plans. As defined in Clean Water Act Section 212, devices and systems used in the storage, treatment, recycling, and reclamation of municipal sewage are eligible. These include construction or upgrading of secondary or advanced treatment plants; construction of new collector sewers, interceptor sewers, or storm sewers; and projects to correct existing problems of sewer system rehabilitation, infiltration/inflow of sewer lines, and combined sewer overflows. Operation and maintenance are not eligible activities. All funds in the clean water SRF resulting from federal capitalization grants are first to be used to assure compliance with enforceable deadlines, goals, and requirements of the act, including municipal compliance. After satisfying the \"first use\" requirement, funds may be used to implement other eligible uses, which initially included nonpoint source management programs and estuary activities in approved State Nonpoint Management Programs and estuarine Comprehensive Conservation and Management Plans, respectively. ", "In 2000, Congress authorized separate CWA grant funding for projects to address overflows from municipal combined sewer systems and from municipal separate sanitary sewers (\"wet weather\" projects). Overflows from these portions of municipal sewerage systems can occur especially during rainfall or other wet weather events and can result in discharges of untreated sewage into local waterways. This program, contained in the FY2001 Consolidated Appropriations Act ( P.L. 106-554 , Division B, Section 112), authorized $750 million per year in FY2002 and FY2003. No funds were appropriated for this program. America's Water Infrastructure Act of 2018 (AWIA, P.L. 115-270 ), enacted on October 23, 2018, reauthorized appropriations for the grant program (and expanded it to include certain stormwater activities) for $225 million for FY2019 and FY2020. The FY2019 appropriations act did not provide funding for this program.", "In 2014, the Water Resources Reform and Development Act of 2014 (WRRDA; P.L. 113-121 ) amended the list of eligible projects by adding several projects and activities, including", "replacement of decentralized treatment systems (e.g., septic tanks), energy-efficiency improvements at treatment works, reuse and recycling of wastewater or stormwater, and security improvements at treatment works.", "In 2018, AWIA amended the list of eligible activities to allow qualified nonprofits to provide assistance to certain individuals for the repair or replacement of existing decentralized wastewater treatment systems or for the connection of an individual household to a centralized publicly owned treatment works."], "subsections": []}, {"section_title": "Funding", "paragraphs": ["Since the first appropriations for the clean water SRF program in FY1989, Congress has provided more than $46 billion in grants to states and Puerto Rico to capitalize their CWSRFs. Through March 2018, federal funds, together with state matching contributions, repaid loans, and other funds, have been used for $126 billion in SRF assistance to support more than 39,000 SRF loans and debt refinance agreements. ", "In both FY2016 and FY2017, Congress provided $1.394 billion for the CWSRF program. In FY2018, Congress increased the appropriation to the CWSRF program, providing $1.694 billion ( P.L. 115-141 ). In FY2019, Congress maintained the same level as the previous fiscal year, $1.694 billion ( P.L. 116-6 ). For FY2020, the President requested $1.120 billion for the CWSRF program.", "Through a separate process, EPA provides direct grants for the District of Columbia, the U.S. Virgin Islands, American Samoa, Guam, and the Commonwealth of Northern Marianas. EPA also provides direct grants to Indian tribes (33 U.S.C. \u00a71377). The funding for the District of Columbia, U.S. territories, and Indian tribes is part of the SRF appropriation to EPA."], "subsections": []}, {"section_title": "Statutory and Regulatory Authority", "paragraphs": ["Statutory authority for the clean water SRF program is the Clean Water Act, as amended, Sections 601-607, 33 U.S.C. \u00a7\u00a71381-1387. Regulations are codified at 40 C.F.R. \u00a735.3100.", "[This section was prepared by Jonathan Ramseur, Specialist in Resources and Environmental Policy, Resources, Science and Industry Division.]"], "subsections": []}]}, {"section_title": "Drinking Water State Revolving Fund Loan Program", "paragraphs": ["The Safe Drinking Water Act (SDWA) requires public water systems to comply with federal drinking water regulations promulgated by EPA. Through these regulations, EPA has set standards to control the levels of approximately 90 contaminants in drinking water, and more regulations are under development. To help communities meet these federal mandates and to meet the act's public health objectives, Congress amended the SDWA in 1996 to establish a drinking water state revolving fund (DWSRF) loan program. The program is patterned closely after the clean water SRF, and authorizes EPA to make grants to states to capitalize drinking water state revolving loan funds. States use their DWSRFs to provide assistance to public water systems for infrastructure and other drinking water projects. States must match 20% of the federal capitalization grant. ", "Each year, states must develop an \"intended use plan\" that includes a list of projects the state intends to fund through the DWSRF (referred to as the project priority list). The law generally directs states to give funding priority to projects that (1) address the most serious health risks; (2) are needed to ensure compliance with SDWA regulations; and (3) assist systems most in need on a per household basis, according to state affordability criteria. The law also directs states to make available at least 15% of their annual allotment to public water systems that serve 10,000 or fewer persons (to the extent the funds can be obligated to eligible projects). Over the life of the program, roughly 71% of DWSRF assistance agreements and 38% of funds have gone to these smaller systems. Capitalization grants are allotted among the states according to the results of the most recent quadrennial survey of the capital improvements needs of eligible water systems. Needs surveys are prepared by EPA and the states, and the most recent survey indicates that public water systems need to invest at least $$472.6 billion on infrastructure improvements over 20 years ($23.63 billion annually) to ensure the provision of safe drinking water and compliance with federal standards. "], "subsections": [{"section_title": "Program Purpose", "paragraphs": ["This state-administered program provides assistance for infrastructure projects and other expenditures that facilitate compliance with federal drinking water regulations or that promote public health protection. The SDWA directs states to give funding priority to infrastructure projects that are needed to achieve or maintain compliance with SDWA requirements, protect public health, and assist systems with economic need. Further, states may use a portion of the capitalization grant for specified purposes, including programs for protecting sources of drinking water and improving the managerial and technical capacity of water systems. "], "subsections": []}, {"section_title": "Financing Mechanism", "paragraphs": ["States may use the DWSRF to make low- or zero-interest loans to public water systems, and loan recipients generally must repay the entire loan plus any interest to the state. DWSRFs may also be used to buy or refinance local debt obligations, to guarantee or purchase insurance for a local obligation, as a source of revenue or security for payment of principal and interest on state revenue or general obligation bonds if the proceeds of the sale of the bonds are deposited into the DWSRF, and to earn interest on DWSRF accounts. ", "The statute authorizes states to use up to 35% of their annual DWSRF grants to provide additional subsidies (e.g., principal forgiveness and negative interest rate loans) to help economically disadvantaged communities of any size. (A disadvantaged community is one in which the service area of a public water system meets state-established affordability criteria.) As with recent appropriations acts, the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) requires states to use 20% of their DWSRF capitalization grants \"to provide additional subsidy to eligible recipients in the form of forgiveness of principal, negative interest loans, or grants (or any combination of these).\""], "subsections": []}, {"section_title": "Eligibility Requirements", "paragraphs": ["Drinking water systems that are eligible to receive DWSRF assistance include community water systems, whether publicly or privately owned, and not-for-profit noncommunity water systems. Federally owned systems are not eligible to receive assistance from this program.", "Projects eligible for DWSRF assistance include (1) capital investments to rehabilitate or replace infrastructure in order to continue providing the public with safe drinking water (e.g., storage facilities, and transmission and distribution pipes); (2) projects needed to address violations of SDWA regulations (e.g., treatment facilities); and (3) project design and planning and associated preconstruction activities. Assistance may also be available for construction of new wells to replace contaminated wells, source water protection, land acquisition, security measures (including infrastructure improvements), and consolidation of water supplies (e.g., in cases where individual homes or public water systems have a water supply that is contaminated, or a system is unable to maintain compliance for financial or managerial reasons).", "Projects and activities not eligible for funding include projects primarily intended to serve future growth or to provide fire protection, construction of dams or reservoirs (except reservoirs for treated water), monitoring, and operation and maintenance. Ineligible systems include those that lack the financial, technical or managerial capacity to maintain SDWA compliance and systems in significant noncompliance with any SDWA regulation (unless the project is likely to ensure compliance)."], "subsections": []}, {"section_title": "Funding", "paragraphs": ["For FY2018, the President requested $863.2 million for the state DWSRF capitalization grants, and Congress appropriated $1,163.2 million ( P.L. 115-141 ). For FY2019, the President requested $863 million, and Congress provided $1,164.0 million ( P.L. 116-6 ). AWIA reauthorized DWSRF appropriations for FY2019 through FY2021. In recent years, the estimated average state grant has been roughly $17.16 million per fiscal year. The estimated average grant to territories was $3.40 million per fiscal year. ", "From FY1997 through FY2018, cumulative appropriations for the DWSRF program reached $22.11 billion. Adjusted for set-asides, cumulative net federal contributions totaled $21.52 billion. When combined with the 20% state match ($3.91 billion), bond proceeds, loan principal repayments, and other funds, the total DWSRF investment through FY2018 had reached $39.86 billion, and the program had provided more than $38.22 billion in assistance. Over the same period, more than 14,577 projects had received assistance, and 10,441 had been completed. "], "subsections": []}, {"section_title": "Statutory and Regulatory Authority", "paragraphs": ["The statutory authority for the DWSRF program is the Safe Drinking Water Act Amendments of 1996 ( P.L. 104-182 , Section 1452, 42 U.S.C. 300j-12). Regulations are codified at 40 C.F.R. \u00a735.3500. ", "[This section was prepared by Mary Tiemann, Specialist in Environmental Policy, and Elena Humphreys, Analyst in Environmental Policy, Resources, Science, and Industry Division.]"], "subsections": []}]}, {"section_title": "Water Infrastructure Finance and Innovation Act Program", "paragraphs": ["Localities are the entities that are primarily responsible for providing water infrastructure services, which include both drinking water and wastewater infrastructure. According to the most recent estimates by states and EPA, funding needs for projects eligible for CWSRF or DWSRF funding\u2014described in the sections above (i.e., projects needed to address water quality and public health-related problems or regulations)\u2014total $655 billion over a 20-year period. However, many water infrastructure capital needs are ineligible for assistance through the SRF programs or are too large or otherwise not suited for those programs. ", "In 2014, WRRDA established a five-year Water Infrastructure Finance and Innovation Act (WIFIA) pilot program. WIFIA authorizes EPA to provide credit assistance\u2014secured (direct) loans or loan guarantees\u2014for a broad range of drinking water and wastewater projects. In contrast to SRF programs, EPA will provide the credit assistance directly to an eligible recipient. Most of the credit assistance will likely be secured loans, as the agency stated that it does not expect much demand for loan guarantees. To be eligible for WIFIA assistance, projects must generally have costs of $20 million or more. ", "WRRDA also authorizes the Corps to provide similar assistance under the WIFIA for water resource projects, such as flood control or hurricane and storm damage reduction. Although Congress has provided funds to EPA to implement WIFIA, as of the date of this report, Congress has not yet appropriated funds (nor have any been requested) that would enable the Corps to begin preparations or begin making WIFIA loans under the authority in WRRDA."], "subsections": [{"section_title": "Program Purpose", "paragraphs": ["WIFIA provides an additional source of funding for water infrastructure projects. Some stakeholders have argued that the clean water and drinking water SRF programs are structured in a way that makes them useful primarily for smaller communities and smaller projects. The WIFIA program can provide credit assistance to large water infrastructure projects that otherwise have difficulty obtaining financing. WIFIA can provide capital at a low cost to the borrower, because even though the interest on 30-year Treasury securities is taxable, Treasury rates can be less expensive than rates on traditional tax-exempt municipal debt."], "subsections": []}, {"section_title": "Financing Mechanism", "paragraphs": ["In federal budgetary terms, WIFIA assistance has much less of an impact than a grant, which is not repaid to the U.S. Treasury. The volume of loans and other types of credit assistance that the programs can provide is determined by the size of congressional appropriations and calculation of the subsidy amount. WIFIA defines the subsidy amount as follows:", "The amount of budget authority sufficient to cover the estimated long-term cost to the Federal Government of a Federal credit instrument, as calculated on a net present value basis, excluding administrative costs and any incidental effects on governmental receipts or outlays in accordance with the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq. ).", "Although subsidy rates are project-specific, in the Trump Administration's FY2019 budget proposal, OMB estimated a 0.98% subsidy rate for WIFIA. This equates to a 1:102 ratio. At this subsidy rate, a $10 million appropriation could support a direct loan (or loans) totaling $1.02 billion. Thus, one advantage of the WIFIA program is that it can provide a large amount of credit assistance relative to the amount of budget authority provided. "], "subsections": []}, {"section_title": "Eligibility Requirements", "paragraphs": ["WIFIA credit assistance is available to state infrastructure financing authorities for a group of projects and individual project sponsors, which may include the following:", "a corporation; a partnership; a joint venture; a trust; or a federal, state, local, or tribal government (or consortium of tribal governments).", "Categories eligible for assistance by EPA include the following: ", "wastewater treatment and community drinking water facilities; enhanced energy efficiency of a public water system or wastewater treatment works; repair or rehabilitation of aging wastewater and drinking water systems; desalination, water recycling, aquifer recharge, or development of alternative water supplies to reduce aquifer depletion; prevention, reduction, or mitigation of the effects of drought; or a combination of eligible projects.", "The act, among other provisions, authorizes EPA to provide credit assistance for a range of wastewater and drinking water projects. Project costs must be $20 million or larger to be eligible for credit assistance. In rural areas (defined as populations of 25,000 or less), project costs must be $5 million or more."], "subsections": []}, {"section_title": "Funding", "paragraphs": ["For FY2019, the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provided $68 million for the WIFIA program (including $5 million for administrative costs). To receive funding, a prospective borrower submits a letter of interest to EPA. The letter includes project eligibility, financial creditworthiness, engineering feasibility, and alignment with EPA's policy priorities. From these submittals, the agency selects projects for funding. On March 29, 2019, EPA announced a third round of WIFIA funding. EPA estimated that its budget authority ($63 million) would provide approximately $6 billion in credit assistance."], "subsections": []}, {"section_title": "Statutory and Regulatory Authority", "paragraphs": ["The statutory authority for the WIFIA program is WRRDA ( P.L. 113-121 , Title V, codified in 33 U.S.C. \u00a7\u00a73901-3914). EPA promulgated an interim final rule for the program on December 19, 2016 (81 F ederal Register 91822). Regulations are codified at 40 C.F.R. \u00a735.10000.", "[This section was prepared by Jonathan Ramseur, Specialist in Environmental Policy, Resources, Science and Industry Division.]"], "subsections": []}]}]}, {"section_title": "Department of Housing and Urban Development", "paragraphs": [], "subsections": [{"section_title": "Community Development Block Grants", "paragraphs": ["HUD administers assistance in support of state and local government neighborhood revitalization and related community and economic development activities, including infrastructure improvements, primarily under the Community Development Block Grant (CDBG) program. The program's primary objective is to develop viable communities by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for persons of low and moderate income. CDBG funds are used by state and local governments for a broad range of neighborhood revitalization and community and economic development activities intended to meet one of three national objectives. Specifically, eligible activities must", "1. principally benefit low- or moderate-income persons; 2. aid in preventing or eliminating slums and blight; or 3. address an imminent threat to the health and safety of residents. ", "Program policy requires that at least 70% of funds must benefit low- and moderate-income persons. ", "The block nature of the CDBG program provides local government discretion in selecting the eligible activities to be undertaken in pursuit of national objectives. Water and waste disposal needs compete with many other eligible activities for this assistance, including historical preservation, energy conservation, economic development, lead-based paint abatement, public facilities and public service activities. Since it began in 1974, the CDBG program has invested $150 billion in communities nationwide. Congress has also used the program to provide supplemental appropriations to assist communities and states in response to natural disasters, the mortgage foreclosure crisis of 2008, economic recessions, and terrorist attacks. Since 1992, Congress has appropriated approximately $50 billion in supplemental CDBG funding to assist targeted states and local governments in their recovery efforts. Funds from the regular CDBG program have been disbursed across several broad categories, including the acquisition and demolition of real property, planning and administrative activities, housing, public services, and public improvements such as water and wastewater treatment facilities. During the five-year period from FY2012 to FY2016, CDBG expenditures for public improvement\u2014including water and sewer improvements\u2014accounted for approximately 33% of all CDBG funds expended. Water and sewer improvements accounted for 10% of total CDBG expenditures during the same five-year span. ", "After subtracting amounts specified in appropriations acts for special-purpose activities, 70% of CDBG funds are allocated by formula to approximately 1,224 entitlement communities nationwide. These communities are defined as central cities of metropolitan areas, metropolitan cities with populations of 50,000 or more, and statutorily defined urban counties (the entitlement program). These funds are not available for projects in rural communities. The remaining 30% of CDBG funding is allocated by formula to the states for distribution to nonentitlement communities (the state program) for use in areas that are not part of a CDBG entitlement community allocation. These funds, which are administered by each state, may be available for rural community water projects. The 70/30 split and allocation formulas are provided for in law. Between FY2012 and FY2016, disbursements by CDBG recipients for water and sewer improvements have averaged $370 million per year. "], "subsections": [{"section_title": "Program Purpose", "paragraphs": ["The primary goal of this program is the development of viable communities by providing decent housing, a suitable living environment, and expanding economic opportunities, principally for low- and moderate-income persons. Funds may also be used to aid in preventing or eliminating slums and blight or to address an imminent threat to residents of the impacted area."], "subsections": []}, {"section_title": "Financing Mechanism", "paragraphs": ["CDBG program funds are allocated by formula. After amounts specified in an appropriations act are allocated to Section 107 special-purpose activities, 70% of the remaining funds are allocated by formula to entitlement communities and 30% to the states for distribution to nonentitlement communities. Funds are awarded to entitlement communities based on the higher yield from one of two weighted formulas. The first of two formulas uses population, overcrowded housing, and poverty data, while the second formula allocates funds based on an entitlement community's relative share of poverty, housing built before 1940, and the lag in population growth rate relative to the total for all entitlement communities. Similar formulas are used to allocate nonentitlement funds to states.", "As a condition of receiving CDBG funds, an entitlement community must submit a consolidated plan at least 45 days before the beginning of its program year detailing the proposed use of funds over a five-year period. Each entitlement community's multiyear consolidated plan (ConPlan) must include a citizen participation plan, a housing needs assessment, and an annual community development plan. In addition to an annual action plan, each jurisdiction must annually submit to HUD a Comprehensive Annual Performance Evaluation Report (CAPER) detailing progress it has made in meeting the goals and objectives outlined in its action plans.", "States do not actually undertake eligible CDBG activities but act as pass-through agents charged with three distinct responsibilities: (1) determining the method or methods to be used to distribute funds to nonentitlement communities, including seeking the input of affected local governments; (2) selecting local governments that will receive funds; and (3) monitoring local government grant recipient project implementation to ensure compliance with rules governing the program. In addition, each state is required to submit to HUD a ConPlan that includes a five-year housing and homeless needs assessment, a housing market analysis, a strategic plan that includes proposed housing and nonhousing community development activities, and a one-year action plan. Also, each state must submit to HUD a CAPER detailing progress it has made in meeting the goals and objectives outlined in its action plans."], "subsections": []}, {"section_title": "Eligibility Requirements", "paragraphs": ["There are three categories of recipients eligible for direct allocations of CDBG program funds: entitlement communities (including insular areas), states, and Section 107 special project grants. Entitlement communities include central cities of metropolitan areas, metropolitan-based cities with populations of 50,000 or more, and statutorily defined urban counties. As of 2017, there were 1,224 entitlement communities, including the District of Columbia. States include the 50 states and Puerto Rico. Before funds are allocated to states and entitlement communities, a specific amount established by Congress is set aside annually for the United States territories or insular area of Guam, the Virgin Islands, American Samoa, and the Commonwealth of the Northern Marianas. These funds are awarded annually based on each insular area's relative share of aggregate population for all insular areas. ", "Eligible activities include a wide range of projects such as public facilities and improvements, housing, public services, economic development, and brownfields redevelopment. State grantees must ensure that each activity meets one of the program's three national objectives: benefitting low- and moderate-income persons (the primary objective), aiding in the prevention or elimination of slums or blight, or assisting other community development needs that present a serious and immediate threat to the health or welfare of the community. Under the state program that assists smaller communities, states develop their own program and funding priorities and have considerable latitude to define community eligibility and criteria, within general criteria in law and regulations. "], "subsections": []}, {"section_title": "Funding", "paragraphs": ["For FY2017, Congress provided $3.0 billion for CDBG entitlement/nonentitlement formula funds, of which approximately $2.095 billion was available for entitlement communities, $898 million for smaller communities under the state nonentitlement program, and $7 million for insular areas. For FY2018, the President's budget requested $0 in funds for this program, the same as the FY2017 request level. On March 23, 2018, the President signed into law the Consolidated Appropriations Act of 2018, P.L. 115-141 . Division L of the act appropriated $3.365 billion for the HUD-administered Community Development Fund, including $3.3 billion for the CDBG entitlement/nonentitlement formula funds. Of the amount appropriated for CDBG formula grants, $2.305 billion was allocated to entitlement communities, $988 million to states for distribution to nonentitlement communities, and $7 million for insular areas. The act also appropriated $65 million for Indian tribes. For FY2019, the Administration again requested $0 in funds for the CDBG program. On February 15, 2019, Congress, passed and the President signed the Consolidated Appropriations Act of 2019, P.L. 116-6 . The act left the program's funding level unchanged from the previous year, appropriating $3.365 billion\u2014including $2.305 for entitlement communities, $988 billion for states to distribute to nonentitlement communities, $7 million for insular areas, and $65 million for Indian tribes. The Administration's budget request for FY2020, released on March 11, 2019, does not include funding for the CDBG program. In proposing termination of the program in FY2020, the Administration cited its intent to redefine the proper role of the federal government in support of community and economic development by devolving responsibility to state and local governments."], "subsections": []}, {"section_title": "Statutory and Regulatory Authority", "paragraphs": ["Statutory authority for the CDBG program is Title I of the Housing and Community Development Act of 1974, as amended (42 U.S.C. 5301 et seq. ). Regulations are codified at 24 C.F.R. Part 570. Regulations covering the CDBG state program for nonentitlement communities are codified at 24 C.F.R. Part 570, Subpart I (\u00a7570.480)."], "subsections": []}]}, {"section_title": "CDBG Section 108 Loan Guarantees", "paragraphs": ["Authorized under the same title (Title I of the Housing and Community Development Act of 1974) as the formula-based CDBG program, the Section 108 loan guarantees allow an entitlement community or a state, on behalf of a nonentitlement community, to leverage its annual CDBG allocation in support of large-scale economic development and housing rehabilitation projects and the construction, reconstruction, or installation of public facilities. "], "subsections": [{"section_title": "Program Purpose", "paragraphs": ["Consistent with the goals and objectives of the CDBG program, Section 108 loan guarantees are intended to supplement CDBG program activities. The program allows entitlement communities and states to extend the reach of the formula-based CDBG program, giving them access to additional financial resources to undertake large-scale, transformative neighborhood revitalization efforts. ", "Eligible activities include acquiring and rehabilitating publicly owned real property; housing rehabilitation; economic development activities, including those carried out by for-profit and nonprofit entities; debt service reserves; payment of interest on the guaranteed loan; issuance cost of the public offering; and the acquisition, construction, reconstruction, and installation of public facilities, including water and sewer improvements."], "subsections": []}, {"section_title": "Financing Mechanism", "paragraphs": ["Section 108 loan guarantees are financed through public offerings. Under the program, states and communities are allowed to float bonds, notes, or debentures worth up to five times their annual CDBG allocation, minus any existing Section108 commitments or outstanding principal balances, with a repayment period of up to 20 years. States and entitlement communities must pledge their current and future CDBG allocations as security against default of the bonds or notes. Section 108 funds are made available on an ongoing basis, allowing communities to apply for funds any time during the year. It should be noted that Section 108 loan funds are made available to eligible public entities that may reloan the funds to private participants in a redevelopment project. Applicants are encouraged to meet with HUD staff prior to submitting a formal application."], "subsections": []}, {"section_title": "Eligibility Requirements", "paragraphs": ["Section 108 loan guarantees may be accessed only by CDBG entitlement communities and states on behalf of a CDBG nonentitlement community. All eligible activities must meet one of the three national objectives of the regular CDBG program: principally benefit low- and moderate-income persons, aid in eliminating or preventing slums and blight, or address an imminent threat to the health and safety of residents. The program has an open application process, allowing entitlement communities and states to submit applications anytime during the year. The application process governing the Section 108 program can be grouped into several distinct stages: application presubmission, citizen participation, application submission, application review and notification, award allocation, and reporting. ", "When submitting formal applications, states and entitlement communities must include a description of activities to be carried out, financing structure, source of loan repayment, citizen participation plan, anti-displacement strategy, and a pledge of the applicant's CDBG allocation as security for the Section 108 guaranteed loan. In general, HUD attempts to review an application within 90 days. HUD field offices are encouraged to complete applications within 45 days, with HUD headquarters attempting to complete its review within 45 days. Recipients receiving Section 108 funds are required to file annual performance reports with HUD detailing progress made in meeting the objectives of their community development plans, including Section 108 activities. Between FY2014 and FY2016, HUD issued loan guarantee commitments totaling $314.4 million to 47 projects, including $110.4 million to 17 projects in FY2014, $123.3 million in loan guarantees to 20 projects in FY2015, and $80.7 million to support 10 projects in FY2016. "], "subsections": []}, {"section_title": "Funding", "paragraphs": ["For FY2017, Congress authorized a loan commitment ceiling of $300 million and directed HUD to collect fees from borrowers that results in a credit subsidy cost of zero for guaranteeing Section 108 loans. Until FY2015, Congress appropriated an amount necessary to cover the estimated long-term liability to the federal government of a Section 108 loan guarantee (credit subsidy). The Department of Housing and Urban Development Appropriations Act for FY2014 changed that arrangement, allowing HUD to collect a fee from the borrower to cover the cost of the credit subsidy. The amount of the fee will be determined annually by HUD based on a percentage of the principal amount of the Section 108 guaranteed loan. For FY2018, the Trump Administration did not request any new loan guarantee authority. The Consolidated Appropriations Act of 2018, P.L. 115-141 , signed by the President on March 3, 2018, included $300 million in Section 108 loan guarantee authority. For FY2019, the again requested no new loan guarantee authority. However, Congress, in passing the Consolidated Appropriations Act of 2019, P.L. 116-6 , provided $300 million in loan guarantee authority for Section 108 financed projects. For FY2020, the Administration has requested no new loan guarantee authority for the Section 108 program. "], "subsections": []}, {"section_title": "Statutory and Regulatory Authority", "paragraphs": ["Statutory authority for the Section 108 program is Title I of the Housing and Community Development Act of 1974, as amended (42 U.S.C. 5308). Regulations are codified at 24 C.F.R. Part 570, Subpart M.", "[This section was prepared by Eugene Boyd, Analyst in Federalism and Economic Development Policy, Government and Finance Division.]"], "subsections": []}]}]}, {"section_title": "Department of Commerce", "paragraphs": [], "subsections": [{"section_title": "Community Development Block Grants", "paragraphs": ["HUD administers assistance in support of state and local government neighborhood revitalization and related community and economic development activities, including infrastructure improvements, primarily under the Community Development Block Grant (CDBG) program. The program's primary objective is to develop viable communities by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for persons of low and moderate income. CDBG funds are used by state and local governments for a broad range of neighborhood revitalization and community and economic development activities intended to meet one of three national objectives. Specifically, eligible activities must", "1. principally benefit low- or moderate-income persons, 2. aid in preventing or eliminating slums and blight, or 3. address an imminent threat to the health and safety of residents. ", "Program policy requires that at least 70% of funds must benefit low- and moderate-income persons. ", "The block nature of the CDBG program provides local government discretion in selecting the eligible activities to be undertaken in pursuit of national objectives. Water and waste disposal needs compete with many other eligible activities for this assistance, including historical preservation, energy conservation, economic development, lead-based paint abatement, public facilities, and public service activities. Since it began in 1974, the CDBG program has invested $150 billion in communities nationwide. Congress has also used the program to provide supplemental appropriations to assist communities and states in response to natural disasters, the mortgage foreclosure crisis of 2008, economic recessions, and terrorist attacks. Since 1992, Congress has appropriated approximately $50 billion in supplemental CDBG funding to assist targeted states and local governments in their recovery efforts. Funds from the regular CDBG program have been disbursed across several broad categories, including the acquisition and demolition of real property, planning and administrative activities, housing, public services, and public improvements such as water and wastewater treatment facilities. During the five-year period from FY2012 to FY2016, CDBG expenditures for public improvement\u2014including water and sewer improvements\u2014accounted for approximately 33% of all CDBG funds expended. Water and sewer improvements accounted for 10% of total CDBG expenditures during the same five-year span. ", "After subtracting amounts specified in appropriations acts for special-purpose activities, 70% of CDBG funds are allocated by formula to approximately 1,224 entitlement communities nationwide. These communities are defined as central cities of metropolitan areas, metropolitan cities with populations of 50,000 or more, and statutorily defined urban counties (the entitlement program). These funds are not available for projects in rural communities. The remaining 30% of CDBG funding is allocated by formula to the states for distribution to nonentitlement communities (the state program) for use in areas that are not part of a CDBG entitlement community allocation. These funds, which are administered by each state, may be available for rural community water projects. The 70/30 split and allocation formulas are provided for in law. Between FY2012 and FY2016, disbursements by CDBG recipients for water and sewer improvements have averaged $370 million per year. "], "subsections": [{"section_title": "Program Purpose", "paragraphs": ["The primary goal of this program is the development of viable communities by providing decent housing, a suitable living environment, and expanding economic opportunities, principally for low- and moderate-income persons. Funds may also be used to aid in preventing or eliminating slums and blight or to address an imminent threat to residents of the impacted area."], "subsections": []}, {"section_title": "Financing Mechanism", "paragraphs": ["CDBG program funds are allocated by formula. After amounts specified in an appropriations act are allocated to Section 107 special purpose activities, 70% of the remaining funds are allocated by formula to entitlement communities and 30% to the states for distribution to nonentitlement communities. Funds are awarded to entitlement communities based on the higher yield from one of two weighted formulas. The first of two formulas uses population, overcrowded housing, and poverty data, while the second formula allocates funds based on an entitlement community's relative share of poverty, housing built before 1940, and the lag in population growth rate relative to the total for all entitlement communities. Similar formulas are used to allocate nonentitlement funds to states.", "As a condition of receiving CDBG funds, an entitlement community must submit a consolidated plan at least 45 days before the beginning of its program year detailing the proposed use of funds over a five-year period. Each entitlement community's multiyear consolidated plan (ConPlan) must include a citizen participation plan, a housing needs assessment, and an annual community development plan. In addition to an annual action plan, each jurisdiction must annually submit to HUD a Comprehensive Annual Performance Evaluation Report (CAPER) detailing progress it has made in meeting the goals and objectives outlined in its action plans.", "States do not actually undertake eligible CDBG activities but act as pass-through agents charged with three distinct responsibilities: (1) determining the method or methods to be used to distribute funds to nonentitlement communities, including seeking the input of affected local governments; (2) selecting local governments that will receive funds; and (3) monitoring local government grant recipient project implementation to ensure compliance with rules governing the program. In addition, each state is required to submit to HUD a ConPlan that includes a five-year housing and homeless needs assessment, a housing market analysis, a strategic plan that includes proposed housing and nonhousing community development activities, and a one-year action plan. Also, each state must submit to HUD a CAPER detailing progress it has made in meeting the goals and objectives outlined in its action plans."], "subsections": []}, {"section_title": "Eligibility Requirements", "paragraphs": ["There are three categories of recipients eligible for direct allocations of CDBG program funds: entitlement communities (including insular areas), states, and Section 107 special project grants. Entitlement communities include central cities of metropolitan areas, metropolitan-based cities with populations of 50,000 or more, and statutorily defined urban counties. As of 2017, there were 1,224 entitlement communities, including the District of Columbia. States include the 50 states and Puerto Rico. Before funds are allocated to states and entitlement communities, a specific amount established by Congress is set aside annually for the United States territories or insular area of Guam, the Virgin Islands, American Samoa, and the Commonwealth of the Northern Marianas. These funds are awarded annually based on each insular area's relative share of aggregate population for all insular areas. ", "Eligible activities include a wide range of projects such as public facilities and improvements, housing, public services, economic development, and brownfields redevelopment. State grantees must ensure that each activity meets one of the program's three national objectives: benefitting low- and moderate-income persons (the primary objective), aiding in the prevention or elimination of slums or blight, or assisting other community development needs that present a serious and immediate threat to the health or welfare of the community. Under the state program that assists smaller communities, states develop their own program and funding priorities and have considerable latitude to define community eligibility and criteria, within general criteria in law and regulations. "], "subsections": []}, {"section_title": "Funding", "paragraphs": ["For FY2017, Congress provided $3.0 billion for CDBG entitlement/nonentitlement formula funds, of which approximately $2.095 billion was available for entitlement communities, $898 million for smaller communities under the state nonentitlement program, and $7 million for insular areas. For FY2018, the President's budget requested $0 in funds for this program, the same as the FY2017 request level. On March 23, 2018, the President signed into law the Consolidated Appropriations Act of 2018, P.L. 115-141 . Division L of the act appropriated $3.365 billion for the HUD-administered Community Development Fund, including $3.3 billion for the CDBG entitlement/nonentitlement formula funds. Of the amount appropriated for CDBG formula grants, $2.305 billion was allocated to entitlement communities, $988 million to states for distribution to nonentitlement communities, and $7 million for insular areas. The act also appropriated $65 million for Indian tribes. For FY2019, the Administration again requested $0 in funds for the CDBG program. On February 15, 2019, Congress, passed and the President signed the Consolidated Appropriations Act of 2019, P.L. 116-6 . The act left the program's funding level unchanged from the previous year, appropriating $3.365 billion\u2014including $2.305 for entitlement communities, $988 billion for states to distribute to nonentitlement communities, $7 million for insular areas, and $65 million Indian tribes. The Administration's budget request for FY2020, released on March 11, 2019, does not include funding for the CDBG program. In proposing termination of the program in FY2020, the Administration cited its intent to redefine the proper role of the federal government in support of community and economic development by devolving responsibility to state and local governments. "], "subsections": []}, {"section_title": "Statutory and Regulatory Authority", "paragraphs": ["Statutory authority for the CDBG program is Title I of the Housing and Community Development Act of 1974, as amended (42 U.S.C. 5301 et seq. ). Regulations are codified at 24 C.F.R. Part 570. Regulations covering the CDBG state program for nonentitlement communities are codified at 24 C.F.R. Part 570, Subpart I (\u00a7570.480)."], "subsections": []}]}, {"section_title": "CDBG Section 108 Loan Guarantees", "paragraphs": ["Authorized under the same title (Title I of the Housing and Community Development Act of 1974) as the formula-based CDBG program, the Section 108 loan guarantees allow an entitlement community or a state, on behalf of a nonentitlement community, to leverage its annual CDBG allocation in support of large-scale economic development and housing rehabilitation projects and the construction, reconstruction, or installation of public facilities. "], "subsections": [{"section_title": "Program Purpose", "paragraphs": ["Consistent with the goals and objectives of the CDBG program, Section 108 loan guarantees are intended to supplement CDBG program activities. The program allows entitlement communities and states to extend the reach of the formula-based CDBG program, giving them access to additional financial resources to undertake large-scale, transformative neighborhood revitalization efforts. ", "Eligible activities include acquiring and rehabilitating publicly owned real property; housing rehabilitation; economic development activities, including those carried out by for-profit and nonprofit entities; debt service reserves; payment of interest on the guaranteed loan; issuance cost of the public offering; and the acquisition, construction, reconstruction, and installation of public facilities, including water and sewer improvements."], "subsections": []}, {"section_title": "Financing Mechanism", "paragraphs": ["Section 108 loan guarantees are financed through public offerings. Under the program, states and communities are allowed to float bonds, notes, or debentures worth up to five times their annual CDBG allocation, minus any existing Section108 commitments or outstanding principal balances, with a repayment period of up to 20 years. States and entitlement communities must pledge their current and future CDBG allocations as security against default of the bonds or notes. Section 108 funds are made available on an ongoing basis, allowing communities to apply for funds anytime during the year. It should be noted that Section 108 loan funds are made available to eligible public entities that may reloan the funds to private participants in a redevelopment project. Applicants are encouraged to meet with HUD staff prior to submitting a formal application."], "subsections": []}, {"section_title": "Eligibility Requirements", "paragraphs": ["Section 108 loan guarantees may be accessed only by CDBG entitlement communities and states on behalf of a CDBG nonentitlement community. All eligible activities must meet one of the three national objectives of the regular CDBG program: principally benefit low- and moderate-income persons, aid in eliminating or preventing slums and blight, or address an imminent threat to the health and safety of residents. The program has an open application process, allowing entitlement communities and states to submit applications anytime during the year. The application process governing the Section 108 program can be grouped into several distinct stages: application presubmission, citizen participation, application submission, application review and notification, award allocation, and reporting. ", "When submitting formal applications, states and entitlement communities must include a description of activities to be carried out, financing structure, source of loan repayment, citizen participation plan, anti-displacement strategy, and a pledge of the applicant's CDBG allocation as security for the Section 108 guaranteed loan. In general, HUD attempts to review an application within 90 days. HUD field offices are encouraged to complete applications within 45 days, with HUD headquarters attempting to complete its review within 45 days. Recipients receiving Section 108 funds are required to file annual performance reports with HUD detailing progress made in meeting the objectives of their community development plans, including Section 108 activities. Between FY2014 and FY2016, HUD issued loan guarantee commitments totaling $314.4 million to 47 projects, including $110.4 million to 17 projects in FY2014, $123.3 million in loan guarantees to 20 projects in FY2015, and $80.7 million to support 10 projects in FY2016. "], "subsections": []}, {"section_title": "Funding", "paragraphs": ["For FY2017, Congress authorized a loan commitment ceiling of $300 million and directed HUD to collect fees from borrowers that results in a credit subsidy cost of zero for guaranteeing Section 108 loans. Until FY2015, Congress appropriated an amount necessary to cover the estimated long-term liability to the federal government of a Section 108 loan guarantee (credit subsidy). The Department of Housing and Urban Development Appropriations Act for FY2014 changed that arrangement, allowing HUD to collect a fee from the borrower to cover the cost of the credit subsidy. The amount of the fee will be determined annually by HUD based on a percentage of the principal amount of the Section 108 guaranteed loan. For FY2018, the Trump Administration did not request any new loan guarantee authority. The Consolidated Appropriations Act of 2018, P.L. 115-141 , signed by the President on March 3, 2018, included $300 million in Section 108 loan guarantee authority. For FY2019, the Administration again requested no new loan guarantee authority. However, Congress, in passing the Consolidated Appropriations Act of 2019, P.L. 116-6 , provided $300 million in loan guarantee authority for Section 108 financed projects. For FY2020, the Administration has requested no new loan guarantee authority for the Section 108 program. "], "subsections": []}, {"section_title": "Statutory and Regulatory Authority", "paragraphs": ["Statutory authority for the Section 108 program is Title I of the Housing and Community Development Act of 1974, as amended (42 U.S.C. 5308). Regulations are codified at 24 C.F.R. Part 570, Subpart M.", "[This section was prepared by Eugene Boyd, Analyst in Federalism and Economic Development Policy, Government and Finance Division.]"], "subsections": []}]}]}, {"section_title": "Department of Commerce", "paragraphs": [], "subsections": [{"section_title": "Economic Development Administration (Public Works and Economic Development Facilities Program)", "paragraphs": ["The Department of Commerce's Economic Development Administration (EDA) is authorized to provide development assistance to areas experiencing substantial economic distress. EDA grants for community water and sewer projects are available through its Public Works and Economic Development Facilities program (PWED). Such assistance is also available under the agency's Economic Adjustment Assistance program.", "Under the PWED program public works grants are awarded competitively to eligible applicants to revitalize, expand, and upgrade their physical infrastructure. These investments in public works improvements must be linked to projects intended to enable communities to attract new industry, encourage business expansion and retention, diversify local economies, and generate or retain private sector jobs in EDA-designated distressed regions. Grants may be used for a wide range of purposes but frequently have a sewer or water supply element. ", "The types of projects funded include industrial parks, expansion of port and harbor facilities, redevelopment of brownfields, and water and wastewater facilities primarily serving industry and commerce. Federal law requires that units of government retain ownership of EDA-funded projects. Because EDA grants must directly encourage employment generation, these grants generally are not available for rural residential sewer and water supply development."], "subsections": [{"section_title": "Program Purpose", "paragraphs": ["The purpose of the program is to promote long-term economic development and assist in the construction of public works and development facilities needed to initiate and support the creation or retention of permanent private sector jobs in areas experiencing long-term economic deterioration and distress. EDA's public works program supports investments that will help distressed areas address their competitive disadvantages. Funded projects must be part of an EDA-certified Comprehensive Economic Development Strategy (CEDS)."], "subsections": []}, {"section_title": "Financing Mechanism", "paragraphs": ["EDA competitively awards public works grants directly to approved applicants. Generally, EDA investment assistance may not exceed 50% of the project cost. Projects may receive an additional amount, not to exceed 30%, based on the relative needs of the region in which the project will be located, as determined by EDA. In the case of certain Indian tribes, nonprofit organizations that have exhausted their effective borrowing capacity, or a state or political subdivision of a state that has exhausted its effective taxing and borrowing capacity, grants totaling 100% of a project's cost may be awarded. Credit may be given toward the nonfederal share for in-kind contributions, including contributions of space, equipment, and services. No minimum or maximum project amount is specified in law."], "subsections": []}, {"section_title": "Eligibility Requirements", "paragraphs": ["Public works grants may be made to states, cities, counties and other political subdivisions of states, an institution of higher education or a consortium of such institutions, and private or public not-for-profit organizations acting in cooperation with officials of a political subdivision of a state. Under this program, the term \"state\" includes the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau. For-profit, private sector entities do not qualify.", "Qualified projects must fill a pressing need of the area and must (1) be intended to improve the opportunities for the successful establishment of businesses, (2) assist in the creation of additional long-term private sector employment, and (3) benefit long-term unemployed or underemployed persons and low-income families. Projects must also be consistent with the area's CEDS and have an adequate share of local funds. In addition, eligible projects must be located in areas that meet at least one of the following criteria: low per-capita income, unemployment above the national average, or an actual or anticipated abrupt rise in unemployment."], "subsections": []}, {"section_title": "Funding", "paragraphs": ["For FY2017, Congress provided appropriations totaling $100 million for EDA's public works grant program. For FY2018, the President's budget requested no funding for the public works program. On March 23, 2018, the President signed the Consolidated Appropriations Act of 2018, P.L. 115-141 . Division B of the act appropriated $262.5 million for EDA programs and additional $39 million for salaries and expenses. Of the amount appropriated for EDA programs, $117.5 million is allocated for the public works program. On February 15, 2019, the President signed the Consolidated Appropriations Act of 2019, P.L. 116-6 . The act appropriated $265 million for EDA programs, including $117 million for the public works program. The act also appropriated an additional $39 million for EDA salaries and expenses. This is the same amount appropriated for FY2018. The Administration's FY2020 budget requests no new funding for EDA program activities but does request $30 million to cover the costs associated with closing down the agency."], "subsections": []}, {"section_title": "Statutory and Regulatory Authority", "paragraphs": ["The statutory authority for the public works program is the Public Works and Economic Development Act of 1965, as amended, P.L. 89-136 (42 U.S.C. 3121 et seq. ). Regulations are codified at 13 C.F.R. Chapter III, Part 302, 305, 316, and 317. "], "subsections": []}]}, {"section_title": "Economic Adjustment Assistance (EAA)", "paragraphs": ["EDA, through its Economic Adjustment Assistance (EAA) grant program, awards development assistance to areas experiencing long-term economic deterioration and distress or sudden and substantial economic dislocation. This may include assisting communities/regions affected by natural disasters, natural resource depletion, mass layoffs, and other severe economic shocks that communities experience in restructuring and diversifying their regional economies. Funds have also been made available to aid communities experiencing chronic unemployment and underinvestment and communities impacted by military Base Realignments and Closures (BRAC).", "EAA funds are competitively awarded to qualified applicants to assist them in developing and implementing a five-year CEDS. EAA may be used to fund four types of activities: ", "1. strategic planning activities that include the creation of short-term action plans intended to stabilize a distressed community and regionally oriented long-term development strategies (CEDS) intended to assess and redirect the region's economic future; 2. technical assistance, including feasibility studies; 3. capitalization of revolving loan funds, which would allow qualifying businesses to borrow funds at favorable interest rates; and 4. financing of physical infrastructure projects, including water and sewer facilities, industrial parks, and business incubators. "], "subsections": [{"section_title": "Program Purpose", "paragraphs": ["The purpose of the program is to promote long-term economic development in areas experiencing sudden economic dislocation or long-term economic distress. EDA's EAA program supports investments that will help distressed areas address their competitive disadvantages and rethink their economic futures. In general, funds may be used to develop CEDS, and funded projects must be part of EDA-certified CEDS."], "subsections": []}, {"section_title": "Financing Mechanism", "paragraphs": ["EDA competitively awards EAA grants directly to approved applicants. Generally, EAA investment assistance may not exceed 50% of the project cost. Projects may receive an additional amount, not to exceed 30%, based on the relative needs of the region in which the project will be located, as determined by EDA. In the case of certain Indian tribes and nonprofit organizations that have exhausted their effective borrowing capacity, or a state or political subdivision of a state that has exhausted its effective taxing and borrowing capacity, grants totaling 100% may be awarded. Credit may be given toward the nonfederal share for in-kind contributions, including contributions of space, equipment, and services. No minimum or maximum project amount is specified in law."], "subsections": []}, {"section_title": "Eligibility Requirements", "paragraphs": ["EAA grants may be made to states, cities, counties and other political subdivisions of states, institutions of higher education or consortia of such institutions, and private or public nonprofit organizations acting in cooperation with officials of political subdivisions of a state. Under this program, the term state includes the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau. For-profit, private sector entities do not qualify.", "Qualified projects must fill a pressing need of the area and must (1) be intended to improve the opportunities for the successful establishment of businesses, (2) assist in the creation of additional long-term private sector employment, and (3) benefit long-term unemployed or underemployed persons and low-income families. Projects must also be consistent with the area's CEDS and have an adequate share of local funds. In addition, eligible projects must be located in areas that meet at least one of the following criteria: low per-capita income, unemployment above the national average, or an actual or anticipated abrupt rise in unemployment."], "subsections": []}, {"section_title": "Funding", "paragraphs": ["For FY2017, Congress provided appropriations totaling $35 million for EDA's EAA grant program. For FY2018, the President's budget requested $0 for the EAA program. On March 23, 2018, the President signed the Consolidated Appropriations Act of 2018, P.L. 115-141 , which included $262.5 million for EDA programs and additional $39 million for salaries and expenses. Of the amount appropriated for EDA programs, $37 million was allocated for the EAA program. On February 15, 2019, the President signed the Consolidated Appropriations Act of 2019, P.L. 116-6 . The act appropriated $265 million for EDA programs, including $37 million for the EAA program. For FY2020, the Administration seeks to terminate EDA and its programs, citing changing national priorities, including prioritizing rebuilding the military and making critical investments in the nation's security. The Administration is requesting $30 million for salaries and expenses to cover the cost of shutting down the agency. "], "subsections": []}, {"section_title": "Statutory and Regulatory Authority", "paragraphs": ["The statutory authority for the public works program is the Public Works and Economic Development Act of 1965, as amended, P.L. 89-136 (42 U.S.C. 3121 et seq. ). Regulations are codified at 13 C.F.R. Chapter III, Part 302, 305, 316, and 317.", "[This section was prepared by Eugene Boyd, Analyst in Federalism and Economic Development Policy, Government and Finance Division.]"], "subsections": []}]}]}]}}
{"id": "R45545", "title": "Suspension of the Rules: House Practice in the 114th Congress (2015-2016)", "released_date": "2019-02-28T00:00:00", "summary": ["Suspension of the rules is the most commonly used procedure to call up measures on the floor of the House of Representatives. As the name suggests, the procedure allows the House to suspend its standing and statutory rules in order to consider broadly supported legislation in an expedited manner. More specifically, the House temporarily sets aside its rules that govern the raising and consideration of measures and assumes a new set of constraints particular to the suspension procedure.", "The suspension of the rules procedure has several parliamentary advantages: (1) it allows nonprivileged measures to be raised on the House floor without the need for a special rule, (2) it enables the consideration of measures that would otherwise be subject to a point of order, and (3) it streamlines floor action by limiting debate and prohibiting floor amendments. Given these features, as well as the required two-thirds supermajority vote for passage, suspension motions are generally used to process less controversial legislation.", "In the 114th Congress (2015-2016), measures considered under suspension made up 62% of the bills and resolutions that received floor action in the House (743 out of 1,200 measures). The majority of suspension measures were House bills (83%), followed by Senate bills (11%) and House resolutions (4%). The measures covered a variety of policy areas but most often addressed government operations, such as the designation of federal facilities or amending administrative policies.", "Most measures that are considered in the House under the suspension procedure are sponsored by a House or Senate majority party member. However, suspension is the most common House procedure used to consider minority-party-sponsored legislation regardless of whether the legislation originated in the House or Senate. In 2015 and 2016, minority-party members sponsored 31% of suspension measures, compared to 9% of legislation subject to different procedures, including privileged business (17 measures), unanimous consent (21 measures), and under the terms of a special rule (one Senate bill).", "Most suspension measures are referred to at least one House committee before their consideration on the floor. The House Committee on Oversight and Government Reform (now called the Committee on Oversight and Reform) was the committee of primary jurisdiction for the plurality of suspension measures considered in the 114th Congress. Additional committees\u2014such as Energy and Commerce, Homeland Security, Natural Resources, Foreign Affairs, and Veterans' Affairs\u2014also served as the primary committee for a large number of suspension measures.", "Suspension motions are debatable for up to 40 minutes. In most cases, only a fraction of that debate time is actually used. In the 114th Congress, the average amount of time spent considering a motion to suspend the rules was 13 minutes and 10 seconds.", "The House adopted nearly every suspension motion considered in 2015 and 2016. Approval by the House, however, did not guarantee final approval in the 114th Congress. The Senate passed or agreed to 40% of the bills, joint resolutions, and concurrent resolutions initially considered in the House under suspension of the rules, and 276 measures were signed into law.", "This report briefly describes the suspension of the rules procedure, which is defined in House Rule XV, and provides an analysis of measures considered under this procedure during the 114th Congress. Figures and one table display statistics on the use of the procedure, including the prevalence and form of suspension measures, sponsorship of measures by party, committee consideration, length of debate, voting, resolution of differences between the chambers, and the final status of legislation. In addition, an Appendix illustrates trends in the use of the suspension procedure from the 110th to the 114th Congress (2007-2016)."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The House of Representatives has standing rules that govern how bills and resolutions are to be taken up and considered on the floor. However, to expedite legislation receiving floor action, the House may temporarily set aside these rules for measures that are not otherwise privileged for consideration. This can be done by agreeing to a special order of business resolution (special rule) or by adopting a motion to suspend the rules and pass the underlying measure. In general, special rules enable the consideration of complex or contentious legislation, such as major appropriations or reauthorizations, while the suspension of the rules procedure is usually applied to broadly supported legislation that can be approved without floor amendments or extensive debate in the chamber.", "Most bills and resolutions that receive floor action in the House are called up and considered under suspension of the rules. The suspension procedure allows nonprivileged measures to be raised without a special rule, waives points of order, limits debate, and prohibits floor amendments. Motions to suspend the rules and pass the measure require a two-thirds vote, so the procedure is typically reserved for bills and resolutions that can meet a supermajority threshold. ", "Decisions to schedule bills for consideration under suspension are generally based on how widely supported the measures are, how long Members wish to debate them, and whether they want to propose floor amendments. These decisions are not necessarily related to the subject matter of the measure. Accordingly, measures brought up under suspension cover a wide range of policy areas but most often address government operations, such as the designation of federal facilities.", "This report describes the suspension procedure, which is defined in clause 1 of House Rule XV, and provides an analysis of measures considered under suspension during the 114 th Congress (2015-2016). Figures 1- 8 display statistical data, including the prevalence and form of suspension measures, sponsors of measures, committee consideration, length of floor debate, voting, and resolution of differences between the chambers. Table 1 summarizes the final legislative status of measures initially considered in the House under the suspension of the rules. Finally, Figure A-1 depicts the use of the suspension procedure from the 110 th through the 114 th Congresses (2007-2016)."], "subsections": []}, {"section_title": "House Rule XV (Clause 1)", "paragraphs": ["The suspension of the rules procedure is established by clause 1 of House Rule XV. Bills, resolutions, House amendments to Senate bills, amendments to the Constitution, conference reports, and other types of business may be considered under suspension, even those \"that would otherwise be subject to a point of order \u2026 [or have] not been reported or referred to any calendar or previously introduced.\" ", "Suspension motions are in order on designated days. As Rule XV states, \"the Speaker may not entertain a motion that the House suspend the rules except on Mondays, Tuesdays, and Wednesdays and during the last six days of a session of Congress.\" Suspension measures, however, may be considered on other days by unanimous consent or under the terms of a special order of business (special rule) reported by the Committee on Rules and agreed to by the House.", "A motion to suspend the rules is a compound motion to suspend the House rules and pass a bill or agree to a resolution. When considering such a motion, the House is voting on the two questions simultaneously. Once recognized, the Member making the motion will say, \"Mr. [or Madam] Speaker, I move to suspend the rules and pass___.\" The House rules that are suspended under this procedure include those that \"would impede an immediate vote on passage of a measure \u2026 such as ordering the previous question, third reading, recommittal, or division of the question.\"", "A measure considered under the suspension procedure is not subject to floor amendment. The motion to suspend and pass the measure, though, may provide for passage of the measure in an amended form. That is, the text to be approved may be presented in a form altered by committee amendments or by informal negotiations. Suspension measures that are passed with changes incorporated into the text are passed \"as amended.\" There are no separate votes on the floor approving such amendments.", "Suspension motions are \"debatable for 40 minutes, one-half in favor of the motion and one-half in opposition thereto.\" However, in most instances, a true opponent never claims half the time, and most speakers come to the floor to express support for the measure. Debate time is controlled by two floor managers, one from each party, who sit on a committee of jurisdiction. Each manager makes an opening statement and may yield increments of the 20 minutes they control to other Members to debate the measure.", "Once debate has concluded, a single vote is held on the motion to suspend the rules and pass the measure. The motion requires approval by \"two-thirds of the Members voting, a quorum being present.\" Should the vote fall short of the two-thirds required for passage (290, if all Members vote), the measure is not permanently rejected. Before the end of the Congress, the House may consider the measure again under suspension, or the Committee on Rules may report a special rule that provides for floor consideration of the measure."], "subsections": []}, {"section_title": "Prevalence and Form of Suspension Measures, 114th Congress", "paragraphs": ["As illustrated in Figure 1 , the majority of measures considered on the House floor during the 114 th Congress were called up under the suspension of the rules procedure. Sixty-two percent of all measures that received floor action were considered under suspension (743 out of the 1,200), compared to those under the terms of a special rule (14%), unanimous consent (7%), or privileged business (16%). ", " Figure 2 displays the form of suspension measures. Most of the measures considered under suspension during the 114 th Congress (94%) were bills. House bills made up 83% of the suspension total, Senate bills 11%. "], "subsections": []}, {"section_title": "Sponsors of Suspension Measures", "paragraphs": ["As represented in Figure 3 , most suspension measures were sponsored by members of the majority party during the 114 th Congress. House or Senate majority-party members sponsored 69% of all bills and resolutions initially considered in the House under suspension, while House majority-party members sponsored 467 (71%) of the 660 House-originated measures (designated with an H.R., H.Res., H.Con.Res. or H.J.Res. prefix). ", "Suspension is, however, the most common procedure used to consider minority-sponsored legislation in the House by a wide margin. In the 114 th Congress, 85% of the minority-sponsored measures that were considered on the House floor were raised under the suspension procedure. Members of the House or Senate minority parties sponsored 31% of all suspension measures originating in either chamber, compared to 9% of legislation subject to different procedures, including privileged business (17 measures), unanimous consent (21 measures), and special rules (one Senate bill).", "Minority-party House Members sponsored 193 (29%) of the 660 House measures considered under suspension. No minority-party House Member sponsored a House-originated measure that was considered under a special rule."], "subsections": []}, {"section_title": "Committee Consideration", "paragraphs": [], "subsections": [{"section_title": "Committee Referral", "paragraphs": ["Most suspension measures are referred to at least one House committee before their consideration on the chamber floor. In the 114 th Congress, 710 out of the 743 suspension measures considered (96%) were previously referred to a House committee. Of the 33 measures that were considered without a referral, 31 were Senate bills that were \"held at the desk,\" and two were House resolutions that provided concurrence to Senate amendments. ", "Measures may be referred to multiple House committees before receiving floor action. When a bill or resolution is referred to more than one House committee, the Speaker will designate one committee as primary, meaning it is the committee exercising jurisdiction over the largest part of the measure. Generally, the chair of the committee of primary jurisdiction works with majority party leadership to determine if and when a measure should be considered under suspension. Figure 4 shows the number and percentage of measures brought up under suspension from each House committee of primary jurisdiction.", "The House Committee on Oversight and Government Reform (now Oversight and Reform) was the committee of primary jurisdiction for the plurality of measures considered under suspension in the 114 th Congress: 106, or 14%, of the total number of suspension measures considered. Many of these bills designated names for post offices or other federal properties. ", "For most House committees, the majority of their referred measures that reached the floor were raised under the suspension procedure. In the 114 th Congress, the four exceptions were the Committee on House Administration\u2014which had several measures considered by unanimous consent\u2014and the Committees on Appropriations, the Budget, and Armed Services, which had at least half of their measures considered pursuant to special rules. For the other committees, suspension measures ranged from 57% to 100% of the total number of the committee's measures receiving floor action ( Figure 5 ).", "Since suspension motions require a two-thirds majority for passage, House committees that handle less contentious subjects tend to have more of their measures considered under the suspension procedure in comparison to other committees. In the 114 th Congress, high-suspension committees included Small Business (100% of measures receiving floor action) and Veterans' Affairs (92%). The Small Business Committee's measures sought to authorize new business development programs. Veterans' Affairs measures included authorizations, reauthorizations, and bills designating federal facilities. "], "subsections": []}, {"section_title": "Committee Markup and Reporting", "paragraphs": ["While suspension measures are not subject to floor amendments, committees may recommend amendments to legislative texts during markup meetings or through informal negotiations. The motion to suspend the rules can include these proposed changes when a Member moves to suspend the rules and pass the measure \"as amended.\" In the 114 th Congress, 396 suspension measures (53% of the total) were considered \"as amended,\" meaning that the text to be approved differed from the measure's introduced text.", "Clause 2 of House Rule XIII requires that measures reported by House committees must be accompanied by a written report. Otherwise, they are not placed on a calendar of measures eligible for floor consideration. However, the written report requirement is among those rules suspended under the suspension procedure. Thus, measures may be called up on the floor under suspension of the rules even if a committee never ordered them to be reported or wrote an accompanying committee report. Instead, the motion to suspend the rules discharges the committee and moves the legislation directly to the House floor. ", "In the 114 th Congress, 517 (70%) suspension measures were ordered to be reported by a House committee. Of this number, 398 were reported with an accompanying House committee report. Twenty measures that did not have a House report did have a Senate report, while 325 measures had no written report from either chamber (43% of the total number of suspension measures)."], "subsections": []}]}, {"section_title": "Floor Consideration", "paragraphs": [], "subsections": [{"section_title": "Raising Measures (Day of Week)", "paragraphs": ["Pursuant to Rule XV, motions to suspend the rules are regularly in order on Mondays, Tuesdays, and Wednesdays or on the last six days of a session of Congress. However, suspension motions may be considered on other days by unanimous consent or under the terms of a special rule reported by the Committee on Rules and agreed to by the House.", "As displayed in Figure 6 , in the 114 th Congress, the plurality of suspension measures were considered on Tuesdays (312, 42% of the total number considered), followed by Mondays (291, 39%) and Wednesdays (114, 15%). In addition, 25 suspension measures were considered on Thursdays and one on a Friday. Of these, one was considered by unanimous consent, while 25 were called up under suspension pursuant to permission included in a special rule reported by the Rules Committee and agreed to by the full House. Such special rules included a provision stating, \"It shall be in order at any time on the legislative day of ___ for the Speaker to entertain motions that the House suspend the rules as though under clause 1 of rule XV.\""], "subsections": []}, {"section_title": "Majority and Minority Floor Managers", "paragraphs": ["Pursuant to Rule XV, suspension measures are \"debatable for 40 minutes, one-half in favor of the motion and one-half in opposition thereto.\" In practice, there is rarely a true opponent to a motion to suspend the rules, and the time is divided between two floor managers, usually one from each party, who both favor the motion. The floor managers each control 20 minutes of debate. The managers may be their parties' sole representative for or against the motion, or they may yield increments of the 20-minute allotment to other Members.", "Typically, the relevant committee chairs and ranking members select the majority and minority floor managers for particular bills and resolutions. These managers may be the measure's sponsor, the chair or ranking member of the measure's committee of primary jurisdiction, or another committee member.", "In the 114 th Congress, the measure's sponsor served as the majority manager on 26% of the suspension measures receiving floor action. The committee chair managed 29% of the measures. The minority manager was the measure's sponsor for 11% of the measures and the committee's ranking member for 26% of the measures considered.", "Occasionally, floor managers controlling time on a motion to suspend the rules ceded their control to other Members during debate. In two identified cases, both the majority and minority floor managers favored the measure, and another Member claimed the time in true opposition during the initial floor consideration of the measure. In at least one other instance, the minority manager asked unanimous consent to yield managerial control to another Member."], "subsections": []}, {"section_title": "Debate", "paragraphs": [], "subsections": [{"section_title": "Managers and Additional Speakers", "paragraphs": ["A majority floor manager makes the motion to suspend the rules by stating, \"Mr. [Madam] Speaker, I move to suspend the rules and pass the bill [or resolution] ____.\" The Speaker [or Speaker pro tempore] responds, \"Pursuant to the rule, the gentleman[woman] from [state] and the gentleman[woman] from [state] each will control twenty minutes.\" The majority and minority managers then, in turn, make opening statements regarding the measure using the 20 minutes each controls. ", "If the majority and minority managers have secured additional speakers, the speakers generally alternate between the parties within the 40-minute limit. During the 114 th Congress, on a motion to suspend the rules, the average number of speakers in addition to the floor managers was fewer than two. On 83% of the measures (620) considered, there were one or two additional speakers. On 27% of the measures (199) considered, there were no additional speakers, and in 16% of the measures (120) considered, there were 3 to 12 additional speakers. Three measures had 20, 21, and 25 additional speakers, respectively.", "At the start of the debate period, the majority manager may request \"unanimous consent that all Members may have five legislative days in which to revise and extend their remarks and add extraneous materials on this bill [resolution].\" This request enables general leave statements to be inserted into the Congressional Record . In 29% of the suspension measures considered in the 114 th Congress, a written general leave statement appeared in the Record following in-person remarks, indicating that the remarks were submitted on the day the legislation was considered. General leave statements submitted on a day other than the day of consideration appear in the Extension of Remarks section of the Congressional Record ."], "subsections": []}, {"section_title": "Length of Consideration", "paragraphs": ["Suspension measures are limited to a maximum of 40 minutes of debate under Rule XV. However, if there are time gaps between speakers or procedural interruptions, such as a vote on a motion to adjourn, the time period between the start of the first speaker's remarks and the conclusion of debate may exceed 40 minutes. The statistics displayed in Figure 7 show the length of consideration of suspension measures as documented in Congress.gov, not the accumulated length of statements, as kept by official timekeepers in the chamber.", "In the 114 th Congress, the average length of consideration on a motion to suspend the rules was 13 minutes and 10 seconds, and half of the measures considered had a debate period of 10 minutes or less. Thus, while overall debate is limited to 40 minutes under the rule, on most suspension measures, only a fraction of that time was actually expended during consideration. Seventeen measures, however, had consideration periods that exceeded 40 minutes due to procedural delays or, in the case of one measure, a request for unanimous consent to extend debate by 10 minutes to each side. "], "subsections": []}]}, {"section_title": "Voting and Passage in the House", "paragraphs": ["House leaders generally choose measures for suspension that are likely to achieve the two-thirds majority threshold for passage. Thus, almost all suspension measures were passed by the House in the 114 th Congress. The full House approved all House resolutions (28), concurrent resolutions (12), joint resolutions (2), and Senate bills (82) that were considered under suspension. The House also passed, via motions to suspend the rules, 612 of the 619 House bills that were initially considered under suspension. Seven bills did not receive the requisite supermajority. Two of these bills were later considered and approved under the terms of a special rule. The remaining five bills did not return to the floor and therefore did not pass the House."], "subsections": [{"section_title": "Voice Votes", "paragraphs": ["Most suspension motions are agreed to in the House by voice vote, which is the chamber's default method of voting on most questions. In 2015 and 2016, this method of voting led to the final approval of 72% (531) of the motions to suspend the rules and pass the measures (see Figure 8 ). "], "subsections": []}, {"section_title": "Record Votes", "paragraphs": ["After the initial voice vote, Members triggered an eventual record vote (often called a roll call vote) on 212 (28%) of the suspension measures considered in the 114 th Congress. This was done by demanding the \"yeas and nays,\" objecting to the vote \"on the grounds that a quorum is not present,\" or, in one case, demanding a recorded vote. In most instances, the chair elected to postpone the vote to a later period, within two additional legislative days, pursuant to clause 8 of House Rule XX. Of the 212 record votes, 3 immediately followed debate on the measure. The remaining 209 votes were postponed to another time on the legislative schedule, usually later the same day.", "In the 114 th Congress, 205 suspension motions were adopted by record vote, and 7 motions to suspend the rules were defeated by record votes. The defeat of a motion to suspend the rules, however, does not necessarily kill the legislation. The Speaker may choose to recognize a Member at a later time to make another motion to suspend the rules and pass the bill, or the House may consider the measure pursuant to a special rule reported by the Committee on Rules. Accordingly, two of the initially unsuccessful measures were later called up and passed under the terms of a special rule. Five measures were not considered again, via any House floor procedure, before the end of the 114 th Congress. "], "subsections": []}]}]}, {"section_title": "Final Disposition of Measures Considered Under Suspension of the Rules", "paragraphs": [], "subsections": [{"section_title": "Passed by the Senate", "paragraphs": ["Although suspension measures generally receive broad support, measures that receive the requisite two-thirds majority in the House are not guaranteed passage in the Senate. As noted in Table 1 , in the 114 th Congress, the Senate passed 197 of the 619 House bills initially considered under suspension (32%). Additionally, the Senate agreed to 1 of the 2 House joint resolutions and 5 of the 11 House concurrent resolutions considered under suspension of the rules.", "Of the number of suspension measures that passed the House and Senate, 60 required a resolution of differences between the chambers. Forty-four House measures and 15 Senate bills were subject to an amendment exchange process, and on one occasion, a conference committee was used to resolve the differences between the House and Senate versions of a House bill.", "The Senate passed three House bills, initially approved in the House under suspension, that did not become public law because the House did not agree to the final bill text, as amended by the Senate. In those instances, the House did not reconsider the bills once the Senate returned the Senate-amended versions to the House chamber. Thus, 194 House bills were presented to the President for signature."], "subsections": []}, {"section_title": "Presidential Action", "paragraphs": ["Of the measures initially considered under suspension during the 114 th Congress, President Obama was presented with 194 House bills, 82 Senate bills, and 1 House joint resolution for signature or veto. The President vetoed H.R. 1777 (Presidential Allowance Modernization Act of 2016) and S. 2040 (Justice Against Sponsors of Terrorism Act). The House chose not to attempt a veto override on H.R. 1777 , so the measure did not become public law. Both the Senate and House voted to override the veto of S. 2040 , enabling it to become law without the President's signature ( P.L. 114-222 ). Thus, of the 703 law-making measures (bills and joint resolutions) initially considered under suspension of the rules, 193 House bills, 82 Senate bills, and 1 House joint resolution became public law (see Table 1 )."], "subsections": [{"section_title": "Appendix. Use of Suspension Motions, 110th-114th Congresses", "paragraphs": [], "subsections": []}]}]}]}}
{"id": "R45717", "title": "Addressing the Long-Run Deficit: A Comparison of Approaches", "released_date": "2019-05-14T00:00:00", "summary": ["The growth of the national debt, which is considered unsustainable under current policies, continues to be one of the central issues of domestic federal policymaking.", "Addressing a federal budget deficit that is unsustainable over the long run involves choices. Fundamentally, the issues require deciding what government goods, services, and transfers are worth paying taxes for. Most people would agree that the country benefits from a wide range of government services\u2014air traffic controllers, border security, courts and corrections, and so forth\u2014provided by the federal government. Yet federal government provision of goods and services comprises only a modest portion of the federal budget. Transfers, including interest payments, accounted for around 75% of the federal budget.", "Central findings of this analysis include the following:", "A comparatively small share of federal spending is for the direct provision of domestic government goods and services. Transfers and payments to persons and to state and local governments constitute most of federal spending, about 75% of all federal spending. Defense spending, accounting for about 15% of federal spending, has declined as a share of output over the past 35 years, but it also tends to vary depending, in part, on the presence and magnitude of international conflicts. The problem with the debt lies not in the past but in the future, as growth in spending for health and Social Security is projected to continue faster than the economy as a whole. The increase in deficits and debt, in turn, leads to a significant increase in interest payments. Because much of the pressure on future spending arises from imbalances in Social Security and Medicare Part A (Hospital Insurance) trust funds, keeping these funds and their sources of financing intact is a concern that could constrain choices. Preserving entitlements would likely require significant increases in taxes, such as raising rates, reducing tax expenditures, increasing other taxes, or introducing new revenue sources. Reductions in discretionary spending are insufficient to reduce the deficit to a sustainable level, so limiting taxes as a percentage of output or constraining the overall size of the government to current levels would likely require significant cuts in mandatory spending, including entitlement programs such as Social Security, Medicare, and Medicaid. Because the federal government provides about one-fifth of the revenue for state and local governments, cutbacks in transfers to these governments may, in part, shift the burden of providing services from the national to subnational governments rather than altering the overall size of government services."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The growth of the national debt, which is considered unsustainable under current policies, continues to be one of the central issues of domestic federal policymaking. ", "This report examines alternative approaches to reducing annual budget deficits and decisions about how to bring the national debt under control over the long term. To do this, the report first examines historical trends in federal spending and revenue policy to illustrate both the challenges and trade-offs inherent to making choices between (1) limiting the provision of defense and domestic public goods, (2) reducing transfers to persons including entitlements for the elderly and those with low income, (3) reducing support for state and local governments, and (4) raising taxes. Using projections of the debt and deficit, the report then addresses how limiting reliance on one source of deficit reduction creates pressure on other sources."], "subsections": []}, {"section_title": "The Long-Run Budget: An Overview", "paragraphs": ["The federal government incurs a budget deficit when total spending exceeds revenues over the course of a fiscal year. Over the past 50 years, the federal government has, on average, run budget deficits of 2.9% of gross domestic product (GDP), though as seen in Figure 1 , the amount has fluctuated from a surplus of 2.3% of GDP in 2000 to a deficit of 9.8% of GDP in 2009. ", "A portion of the budget outcomes is a function of general economic conditions, and the remainder is a function of policy choices. For example, deficits tend to rise during recessions (through a combination of decreased revenues and increased spending on programs like unemployment), whereas the opposite is generally true during economic expansions. Policy choices, such as the decline in defense spending after the dissolution of the Soviet Union in 1991, may change the budget situation due to changes in national priorities.", "The accumulation of net deficits over time results in the federal debt. As shown in Table 1 , the cumulative federal debt in 2018 was 78% of GDP.", "Of concern is that the federal budget deficit has resulted in the growth of the federal debt that has regularly exceeded the growth rate of the economy. The debt can grow without increasing the ratio of debt to GDP as long as it rises at a rate less than or equal to GDP growth. For example, if the debt is 80% of GDP and the economy is growing at 1.6%, a deficit of 1.28% of GDP (1.6% of 80%) will maintain the debt-to-GDP ratio. The FY2018 deficit is 4% of GDP\u2014a situation viewed by most economists as unsustainable."], "subsections": []}, {"section_title": "Long-Run Budget Issues: Overview", "paragraphs": ["Addressing a federal budget deficit that is unsustainable over the long run involves strategic choices. Fundamentally, the issues require deciding what government goods, services, and transfers are worth paying taxes for. Most people would agree that the country benefits from a wide range of government services\u2014air traffic controllers, border security, courts and corrections, and so forth\u2014provided by the federal government. Yet, as shown below, in 2007, the federal government provision of goods and services, outside of defense, constituted 10% of federal spending and 2% of GDP. Transfers, including interest payments, accounted for around 70% of the federal budget. Finding budget savings by reducing nondefense federal government services alone would fall short of what is needed to address the deficit.", "In 2018, transfers, including interest payments, accounted for 76% of the federal budget, up from 70% in 2007. Outside of the 9% provision for domestic goods, defense spending for goods and services constitutes about 15% of federal spending. In this area as well, there are limits to the savings that might be found without compromising national security. Therefore, to address the budget shortfalls facing the country over the long run, it is likely that (1) transfer payments, such as Social Security, Medicare, and Medicaid, to or on behalf of individuals (which already account for half of federal spending and are growing) must be reduced; (2) transfers to state and local governments must be reduced (which would shift the budget decisions to a different level of government); (3) taxes must be raised; or some combination of the three. ", "The next section of this report examines the government's spending allocation, the method of its financing, and how these shares and sources have changed over time. It demonstrates that the surge in the debt is a recent phenomenon that has occurred with the recession and is inherently transitory. Going forward, however, as shown in the subsequent section, the growth in transfers to the elderly and spending for health care\u2014a trend that has been under way for some time but was offset by a decline in spending for other purposes, relative to GDP\u2014will increasingly contribute to unsustainable deficits. The following section addresses philosophies for approaching deficit reduction, as embodied in a number of proposals. It discusses how different approaches to and constraints imposed on deficit reduction will have consequences for the menus of other available choices. For example, if deficit reduction begins with a constraint that taxes will not rise, policy would almost certainly require significant cutbacks in Social Security and Medicare. If the benefits of these programs are to be maintained, an increase in taxes would likely be required. ", "Central findings of this analysis include the following:", "A comparatively small share of federal spending is for the direct provision of domestic government goods and services. Transfers and payments to persons and to state and local governments constitute most of federal spending, about 75% of all federal spending. Defense spending, accounting for about 15% of federal spending, has declined as a share of output over the past 35 years, but it also tends to vary depending, in part, on the presence and magnitude of international conflicts. The problem with the debt lies not in the past but in the future, as spending growth for health and Social Security is projected to continue faster than the economy as a whole. The increase in debt, in turn, leads to a significant increase in interest payments. Because much of the pressure on future spending arises from imbalances in Social Security and Medicare Part A (Hospital Insurance) trust funds, keeping these funds and their sources of financing intact is a concern that could constrain choices. Preserving entitlements would likely require significant increases in taxes, such as raising rates, reducing tax expenditures, increasing other taxes, or introducing new revenue sources. Reductions in discretionary spending are insufficient to reduce the deficit to a sustainable level; thus, limiting taxes as a percentage of output or constraining the overall size of the government to current levels would likely require significant cuts in mandatory spending, including entitlement programs such as Social Security, Medicare, and Medicaid. Because the federal government provides about one-fifth of the revenue for state and local governments, cutbacks in transfers to these governments may, in part, shift the burden of providing services from the national to subnational governments rather than altering the overall size of government services."], "subsections": []}, {"section_title": "Federal Spending: Patterns over Time", "paragraphs": ["The objectives of government spending and taxes are generally viewed as providing for public and quasi-public goods, such as defense, law enforcement, infrastructure, and education; correcting market failures, including externalities (both negative, such as pollution, and positive, such as research and development); achieving distributive justice; and managing business cycles. Measured by the amount of spending, defense is the most important pure public good the federal government provides. Many public and quasi-public goods, as well as income-support programs, are provided by state and local governments, and some federal spending is through grants to state and local governments for these programs. For example, in FY2016, state governments received 29.1% of total revenues from federal transfers, and local governments received 3.8%. States also provide transfers to local governments, and local governments provide transfers among themselves as well. These intergovernmental transfers are important in evaluating budget proposals, because a reduction in transfers to state and local governments may in large part shift the burden to these governments rather than reduce the overall government role.", "Spending in the U.S. budget can be divided in various ways that are relevant to considering deficit reduction. In the discussion that follows, government spending is divided by whether the spending is to provide public goods or transfers, whether it is discretionary or mandatory (and the major categories within those divisions), and by function. The first approach to presenting spending distinguishes between the provision of goods and services (defense and nondefense) and transfers to persons or to state and local governments. This approach is not a typical way of presenting budget data. It is important to divide spending in this way, however, to address concerns about potential inefficiency in federal government operations, especially outside of defense, as it indicates the scope for cutbacks relative to the deficit. The second approach divides spending into discretionary (provided in annual appropriations acts) and mandatory (controlled by permanent laws, and including entitlements to benefits). It is associated with the procedures needed to alter spending. The third, a common way of presenting budget data, divides spending by function (defense, education, energy, health, etc.). Later, this section also discusses trends in federal taxes by source, tax structure, tax expenditures, and receipts and payments in the major trust funds."], "subsections": [{"section_title": "Distribution of Spending by Fundamental Economic Form: Government Goods and Services Versus Transfers", "paragraphs": ["One way to look at spending is to examine the extent to which spending involves actual government consumption or production (that is, spending on the direct provision of goods and services) as compared with transfers, subsidies, and interest. The discussion in this section indicates that although total spending as a percentage of GDP fluctuated around 20% of GDP between 1973 and 2007, government involvement in the economy\u2014narrowly defined as using resources to provide public goods directly\u2014had fallen by a third and outside of defense had remained roughly constant and small (at around 2% of GDP). At the same time, transfers to persons increased by more than 40%, and transfers to state and local governments increased by less than 5%. Spending rose nearly 2% of GDP by 2018, primarily due to transfers to persons, whereas consumption continued to decline. Figure 2 shows how the economic form of federal spending has shifted since 1968.", "In calendar year 2007, 28% of government spending was categorized as consumption and involved the direct provision of goods and services. Of the remaining amount, 44% were transfers to persons, 13% transfers to state and local governments, 14% interest payments, and 2% subsidies. Although federal government spending amounted to 19.9% of output in 2007, federal government spending on the provision of public and quasi-public goods was 5.5% of output. Based on budget data reported subsequently, 3.8% was for defense, leaving 1.7% for nondefense. Because total nondefense discretionary spending was 3.4% of GDP, half of this amount was transfers. ", "By 2018, with the economy at or near full employment, federal government consumption spending had declined to 5% of output, whereas transfers had increased. Government spending on nondefense goods and services was 1.9% of GDP, and defense spending was 3.2% of GDP. Budget data for FY2017 indicate that discretionary spending was 6.3% of GDP, with defense spending at 3.1% of GDP and nondefense at 3.2% of GDP. Thus, roughly 60% of nondefense spending, about 1.9% of GDP, was transfers at that time. ", "State and local government spending (netting out transfers between these remaining two levels of government spending) in 2007 was 14% of output, and total spending by all forms of government (after netting out federal transfers) was 31.5% of output. A larger share of state and local spending (which includes federal government transfers), 69%, was in government provision of goods and services (consumption), with 21% in transfers to persons, 9% in interest payments, and less than 1% in subsidies. In the third quarter of 2018, state and local spending net of federal transfers was 14%, for a total of 32.5% for all government spending. Provision of goods and services was 64%; transfers were 26%; and interest was 9%. ", "Combining all levels of government, in 2007, government production of goods and services was 15.2% of output, thus the federal government share (5.5%) was about one-third of the total provided by all levels of government. Subtracting 3.8% from the federal government share and the total share to eliminate national defense spending (shown subsequently), the federal share of nondefense provision of goods and services by all levels of government was 11%. In 2018, the nondefense share had risen to 14%, with the federal share (5% of output) remaining at 36%. ", "Similar results are found when examining employment levels. Total government civilian employment in 2007 was 16% of total nonagricultural employment, with the federal government accounting for 2%, the state government accounting for 3.7%, and local government accounting for the remaining 10.4%. By September 2018, the employment share remained at about 15%, and each level of government maintained approximately the same shares (with local government falling to 9.6%).", "The share of federal government spending that goes to the direct provision of public or quasi-public goods (consumption) has declined over time, as shown in Table 2 , which compares 1980 with 2007 and 2018. The decline from 7.2% of GDP in 1980 to 5.5% of GDP in 2007 is largely due to a reduction in defense spending.", "The discussion in this section indicates that although total spending as a percentage of GDP fluctuated around 20% of GDP between 1973 and 2007, government involvement in the economy\u2014narrowly defined as using resources to provide public goods directly\u2014had fallen by a third and outside of defense had remained roughly constant and small (at around 2% of output). At the same time, transfers to persons increased by more than 40% and transfers to state and local governments increased by less than 5%. Spending rose nearly 2% of GDP by 2018, primarily due to transfers to persons, whereas consumption continued to decline."], "subsections": []}, {"section_title": "Distribution of Federal Spending by Mandatory and Discretionary Categories10", "paragraphs": ["Budget accounts often classify spending in budget documents as mandatory or discretionary spending, along with subcategories of spending. Though technically classified as mandatory spending, interest payments tend to be listed separately because they are a consequence of past spending and tax policies. Discretionary spending is controlled by the annual appropriations process and is normally divided into defense and nondefense categories. Discretionary spending is where most of the public provision of goods and services occurs, but some discretionary spending is in the form of transfers. Mandatory spending is generally governed by a set of permanent statutory provisions, and some of these programs (such as Social Security and Medicare) are referred to as entitlements. ", "Since the late 1960s, as shown in Figure 3 , defense spending has declined as a share of output, first as a result of the ending of the Vietnam War (by FY1981, defense spending was 5.2% of output). It rose in the 1980s and then fell, reaching 3.0% by 2001, before rising again with the Afghanistan and (second) Iraq wars. This pattern suggests that although defense spending may generally grow with the economy and be affected by other factors (such as moving to an all-volunteer force or the peacetime buildup in the 1980s), it also fluctuates depending on whether the United States is engaged in prolonged international conflicts.", "Nondefense discretionary spending has fluctuated much less, although it rose in the late 1970s, then reverted to historical levels. Nondefense discretionary funding, although small as a share of the budget and of GDP, is largely the spending that many people think of when they think of the direct provision of goods and services by the federal government.", "Mandatory spending, although it varies over time, has generally increased as a share of the economy since the 1960s. The increase is most pronounced for health spending and has grown relative to GDP due to rising health care costs, certain other benefit changes, aging, and increased life spans. ", " Table 3 further disaggregates mandatory spending for selected years since the FY1980 (FY1980, FY2007, and FY2018). Overall discretionary spending over this time period declined from 9.9% of GDP to 6.2% of GDP, or a change of 36.9% (with declines of 35.4% for defense and 37.3% for nondefense discretionary spending), whereas total mandatory spending has increased by 35.9% over the same time period.", "Within mandatory spending, health spending (Medicare and Medicaid)\u2014which has increased 223.5% since FY1980\u2014primarily drives the overall increase in mandatory spending. This increase is attributed to changes in demographics from an aging population and medical cost growth primarily, although benefit changes also contribute to the increase. Spending for Social Security also rose 16.7% over this period\u2014primarily due to number of Social Security beneficiaries and increased life expectancies. Other mandatory programs that provide benefits for low-income individuals, the unemployed, retirement programs for federal workers, and other purposes (such as agricultural support payments) have remained relatively constant or declined since FY1980."], "subsections": []}, {"section_title": "Distribution of Spending by Function", "paragraphs": ["Another traditional way of viewing the budget is by budget function relating to the purpose of spending (education, health, etc.). Figure 4 shows federal spending by budget function since 1969.", "These comparisons, shown in Table 4 , provide a similar picture to the previous allocation: although total spending as a share of output has fluctuated somewhat from FY1980 to FY2018, the federal government has an increasing share of output in health and programs for the elderly, with declining shares for almost every other functional category. In FY2007, 64% of spending was for human resources, with 20% for defense, 9% for interest, and 5% for all other functions. In FY2018, the share devoted to human resources had further risen, whereas the share spent on national defense had declined. Table 4 presents these categories as a percentage of GDP and illustrates that the subcategories for many types of spending, which are those that represent direct provision of government goods and services, are small as a percentage of GDP."], "subsections": []}]}, {"section_title": "Federal Taxes: Patterns over Time", "paragraphs": ["This section discusses four issues related to taxes: (1) the sources of tax revenue and their growth over time; (2) the differences in structure and distribution of revenue sources; (3) the size and distribution of tax expenditures (special income tax provisions such as exclusions, deductions, and credits); and (4) taxes that are specified as the revenue source for certain spending."], "subsections": [{"section_title": "Tax Revenues", "paragraphs": ["The federal income tax system has several components. The largest component, in terms of revenue generated, is the individual income tax. For FY2018, an estimated $1.7 trillion, or 50% of the federal government's revenue, came from the individual income tax.\u00a0The corporate income tax was estimated to generate another $218 billion in revenue in FY2018, or just under 7% of total revenue. Social insurance or payroll taxes generated an estimated $1.2 trillion, or 35% of revenue in FY2018. Estimates indicate that the remainder of federal revenue collected in FY2018 came from excise taxes (3%) or other sources (6%).", "The relative importance of these components can change over time, as seen in Figure 5 . The individual income tax, the largest single source of revenue as a percentage of GDP, has fluctuated considerably over time. Individual income tax revenues grew in the late 1970s due to bracket creep, reaching 9.4% in FY1981. The tax cuts in the Reagan Administration are the major reason revenues declined, falling to 7.9% in FY1990. Revenues increased slightly with the 1993 Clinton Administration tax increase ( P.L. 103-66 ), but the more significant growth occurred with the strong economic performance in the late 1990s, leading to a ratio of 9.9% in FY2000. They declined during the first decade of the 21 st century following the George W. Bush Administration tax cuts ( P.L. 107-16 ) and JGTRRA ( P.L. 108-27 ). Along with the individual income tax, total taxes have also fluctuated. Prior to the Bush tax cuts, total taxes dropped as low as 17.1% in FY1977 and rose as high as 20.6% in FY2001. During the 2007-2009 recession taxes fell to less than 15% of GDP. ", "Corporate taxes have fluctuated as well, although largely due to economic conditions, whereas payroll taxes rose to around their current levels as a percentage of GDP by the mid-1980s, reached a peak of 6.8% in 2001, and have since declined slightly. Excise taxes have declined by two-thirds, and other revenue sources have remained about the same. Part of the decline in excise taxes is because these taxes are imposed on a per-unit basis and not indexed for inflation and, with the exception of tobacco taxes, have generally not been increased."], "subsections": []}, {"section_title": "Tax Structure", "paragraphs": ["These revenue sources differ in some important ways. Individual income taxes are progressive, have graduated rates, and can be revised in a variety of ways, including changing rates, deductions, exclusions, and credits. Income taxes are the main source of revenue for most federal spending outside of Social Security and Medicare Hospital Insurance (HI, whose benefits are less than half of Medicare spending). Corporate income taxes are levied at a flat rate after allowing for various deductions and credits. Estate taxes are also progressive, but they are a small share of government revenues and have been declining in magnitude over the past 20 years. ", "Payroll taxes tend to fall more heavily on middle- and lower-income individuals. Payroll taxes, the next-largest source of revenue after individual income taxes, have flat rates (except for the Additional Medicare Tax) with an earnings cap for Social Security (but not Medicare). These taxes tend to be proportional, with a reduced burden on high-income taxpayers. Because of their simple structure, the main options for increasing revenues from this source are increasing rates and raising or eliminating the earnings cap. ", "Social Security payroll taxes are the basic source of finance for Social Security, and they are linked to benefits so that larger taxes lead eventually to larger benefits, although there are progressive elements in the benefit formula. Medicare payroll taxes qualify individuals for Medicare HI coverage, but the Medicare benefits are the same for all recipients.", "Excise taxes , which largely apply to alcohol, tobacco, and transportation fuels, tend to be regressive and fall more heavily on middle- and lower-income individuals, but are also a smaller revenue source. Transportation fuel taxes are a major source of finance for highways, airports, and other transportation needs."], "subsections": []}, {"section_title": "Tax Expenditures", "paragraphs": ["Tax expenditures are revenue losses attributable to federal income tax laws that allow a special exclusion, exemption, deduction, credit, preferential tax rate, or deferred tax liability. The special tax credits and deductions in the income tax can also be viewed as a form of spending through the tax code. That is, one can view revenues as receipts without the special benefits and the special benefits from tax expenditures as spending. According to an FY1974-FY2004 Government Accountability Office (GAO) study, tax expenditures averaged 7.5% of GDP during that period. In FY2007, tax expenditures were 7.2% of GDP and about 36% of total government direct spending. In FY2018, tax expenditures were 7.2% of GDP and about 35% of government spending.", "From the perspective of dividing government activity between transfers and direct provision of public goods, as in Table 2 , tax expenditures are transfers and subsidies that go to persons, as is the case with the bulk of federal spending. From the perspective of discretionary versus mandatory spending, as in Table 3 , they are similar to a mandatory form of spending. Finally, from the perspective of budget function, as in Table 4 and as shown in Table 5 , which compares spending and tax expenditures by budget function for FY2018, the pattern of tax expenditures is quite different from that of spending. A much larger share of tax expenditures is for physical resources. For specific subcategories, the largest share of tax expenditures is for commerce and housing, a category that attracts a small share of spending. The size of this category reflects special benefits for earnings from capital income. It also reflects benefits for housing in the form of mortgage interest and property tax deductions and, to a lesser extent, exemption from capital gains tax on owner-occupied housing and the low-income housing credit. The relatively large share for general government reflects tax-exempt bonds and itemized deductions for state and local income and sales taxes. (These amounts could also be distributed across the functional categories of state spending and thus would be more broadly distributed.) Much of the benefit for tax-exempt bonds goes to education and highways, where funds are borrowed for capital improvements.) Tax expenditures also provide significant benefits for health through the exemption of employer-provided health insurance and for income security, largely through benefits for pensions and other retirement savings."], "subsections": []}, {"section_title": "Earmarked Revenues and Trust Funds", "paragraphs": ["As noted above, dedicated revenues finance spending on certain categories of services, some of which are termed trust funds and some special federal funds. There are about 200 trust funds, but only a few of them are important in terms of magnitude or for considering budgetary reform.", "In some cases, the trust funds lead to questions about addressing the deficit. Although some of these funds rely on contributions from general revenues, the Social Security and the Medicare HI trust funds primarily rely on payroll taxes. The largest trust funds relate to Social Security, which is divided into Old Age and Survivors Insurance (OASI) and Disability Insurance (DI), and Medicare, which is divided into Hospital Insurance Part A and Supplementary Medical Insurance (SMI) Parts B and D.", "Payroll taxes are the primary source of finance for Social Security and Medicare HI (also known as Medicare Part A). The funding of these programs is organized through trust funds that can also hold assets and earn interest. Medicare SMI, which pays for physician services and outpatient drugs, is financed primarily by a combination of premiums and general revenues. ", " Table 6 shows the inflow of revenues and the payment of benefits in the three trust funds financed by payroll taxes. (This table does not include earnings from interest on government securities held by the funds and transfers of income taxes collected on Social Security benefits; it also does not reflect administrative costs.) As indicated in the table, OASI payroll tax revenue (as a percentage of GDP) has declined over the past 11 years, while payments have increased substantially. In contrast, DI and HI payroll tax revenues have been flat or increasing (as a percentage of GDP) over the same time period, while payments have been flat or increasing more modestly than OASI. By FY2018, payments for Social Security and Medicare benefits exceeded payroll tax collections. Because initial Social Security benefits are indexed to wages (and subsequently to prices), they tend to be a relatively constant share of output. Benefits have grown because of increasing longevity and an aging population. Revenues also tend to be a relatively constant share of output but were increased in the mid-1980s.", "Table 7 provides information on the income and outflow for the SMI trust fund. In FY1971, this fund was nearly equally financed by premiums paid by beneficiaries and federal contributions from general revenues. Although premiums have increased as a percentage of output, the vast majority of financing is now from general revenues. The premium share for Medicare Part B (physicians) fluctuated over time, but it is now set by law at 25% of the cost of funding Medicare Part B; the premiums share for Medicare Part D (drug) program is set at 25.5% of the estimated cost of the standard benefit.", "As these tables indicate, the size of these programs, particularly Medicare, has grown over time. SMI has grown faster than HI, and general revenue contributions have grown at a similar pace. SMI currently accounts for more than half the cost of Medicare.", "One open question surrounding the formulation of a long-run budget policy is whether to continue financing Social Security and Medicare HI from payroll taxes. In this case, both programs' future benefits are expected to outstrip future receipts and eventually draw down all the assets. The Social Security (OASI) trust fund is projected to run out of accumulated assets in 2034, and the HI trust fund is predicted to run out in 2026. ", "Since its implementation in 1935, Social Security has been treated as a separate program, similar to a retirement plan, in which contributions (e.g., payroll taxes) during the working years create an entitlement to benefits in old age. A similar approach has been used for the more recently established Medicare HI. If these programs are to be kept separate, then they must be brought into balance separately and, to maintain the historic source of financing, any shortfall not addressed through benefit cuts or delayed eligibility must be addressed through increases in a specific tax\u2014the payroll tax."], "subsections": []}]}, {"section_title": "Growth in the Debt", "paragraphs": ["Federal debt may be divided into two major categories: (1) debt held by the public, which is the sum of accrued net deficits and outstanding money from federal credit programs; and (2) intragovernmental debt, which is the amount of federal debt held by other federal agencies. As of February 28, 2019, the amount of federal debt outstanding was $22.116 trillion, with 73.5% of that debt held by the public and 26.5% held as intragovernmental debt. Figure 6 shows the federal debt as a share of the economy from FY1969 projected through FY2023. ", "Individuals, firms, the Federal Reserve, state and local governments, and foreign governments are eligible to purchase publicly held debt. Such debt may be acquired directly through the auction process from which most publicly held debt is initially sold or on the secondary market if the debt is deemed \"marketable,\" or eligible for resale. As of February 28, 2019, the total amount of publicly held debt outstanding was $16.251 trillion. Publicly held debt is the measure of concern for the sustainability of the debt since it measures debt owned outside of the government. This debt grew rapidly as a percent of GDP during the 2007-2009 recession and afterward and has continued to grow (while intergovernmental debt relative to GDP has declined). ", "The majority of publicly held debt is marketable, and it includes all Treasury notes, bonds, bills, Treasury Inflation Protected Securities (TIPS), and Treasury-issued Floating Rate Notes (FRNs). Nonmarketable debt held by the public is composed of U.S. savings bonds, State and Local Government Securities (SLGS), and other, smaller issues. As of February 28, 2019, 96.6% of publicly held issues, or $15.741 trillion, was marketable.", "Unlike publicly held debt, intragovernmental debt issuances are almost exclusively nonmarketable. As of February 28, 2019, of the $5.865 trillion in total intragovernmental debt, $0.029 trillion (0.5%) was marketable debt. Intragovernmental debt is held by components of the federal government, with the majority of nonmarketable debt held by trust funds devoted to Social Security and military and federal worker retirements and marketable debt held by the Federal Financing Bank (a government corporation created to reduce the cost of federal borrowing). Intragovernmental debt has declined in recent years as major trust funds have begun to finance benefits from assets.", "Because intragovernmental debt is held only in federal government accounts, such debt cannot be accessed by the outside institutions. Conversely, the bonds that finance publicly held debt activity may compete for assets in private and financial markets. Public debt issues may be a particularly attractive collateral option on the secondary market if the federal government is perceived as a safe credit risk."], "subsections": []}, {"section_title": "Deficit Challenges Going Forward", "paragraphs": ["The CBO budget baseline projects that over the next 10 years, the deficit will average roughly 4.4% of GDP. This is 1.5% of GDP more than the average deficit (i.e., 2.9% of GDP) over the preceding 50 years. Figure 7 shows the federal budget deficit (surplus) from FY1968 through projected deficits in FY2048.", "Most economists agree that deficits are sustainable as long as the deficits as a share of the economy are less than the growth rate of the economy. The CBO budget baseline assumes that economic growth will be just under 1.8% over the next 10 years. This growth rate is less than both the average deficit over the preceding 50 years (2.9% of GDP) and the projected federal deficits over the next 10 years (4.4% of GDP).", "Although the budget situation over the next 10 years is challenging, the long-term outlook is even more daunting\u2014with the budget deficit estimated to be an average of 8.4% of GDP from FY2039 to FY2048. As deficits are a result of the combination of spending and tax decisions, examining them separately may offer some insights. Figure 8 shows CBO's analysis of federal spending projected for FY2028 and FY2048 compared with the selected historical level of spending\u2014showing total spending growing by 14.6% as a percentage of GDP in FY2028 and 42.2% in FY2048 compared with FY2018. Breaking down the categories shows projected spending increases on Social Security of 28.6% (1.4% of GDP), health programs of 76.9% (4.0% of GDP), and interest payments of 293.8% (4.7% of GDP) over the next 30 years. During the same period, other projected spending (including both defense and nondefense discretionary spending) is projected to decrease 14.6% (1.3% of GDP). ", "The trend in the share of spending going toward Social Security and major health care programs and away from discretionary spending choices seen in Figure 8 is a continuation of the trend seen in Figure 3 . In FY1988, 30.6% of federal spending went to Social Security and major health program spending. By FY2018, the share was 49.0% of the federal budget and is estimated to be 52.9% of the federal budget in FY2048. In addition, there is significant growth in the share of federal spending used to pay interest on the debt due to the continuing deficits and growing debt.", "Similar to projected federal spending, federal revenue over the next 10 years is projected to grow above its 50-year average of 17.4% of GDP\u2014assuming that the temporary provisions contained in P.L. 115-97 are allowed to expire as scheduled. As Figure 9 shows, CBO's projections of total federal revenue are projected to grow by 11.4% as a percentage of GDP in FY2028 and 19.3% in FY2048 compared with FY2018.", "The increasing reliance on personal income taxes as a revenue source, seen in Figure 9 , is a continuation of the trend seen in Figure 5 . In FY1988, 44.3% of federal revenue (8.2% of GDP) came from individual income taxes, and 10.2% of federal revenue (1.2% of GDP) came from corporate income taxes. By FY2018, the shares were 49.4% (9.8% of GDP) and 7.2% (1.5% of GDP) of federal revenue, respectively, and are estimated to be 55.1% (10.9% of GDP) and 7.1% (1.4% of GDP) of federal revenue in FY2048, respectively. "], "subsections": []}, {"section_title": "Addressing the Long-Run Deficit", "paragraphs": [], "subsections": [{"section_title": "The Timing of Deficit Reductions", "paragraphs": ["How much should be done to address the budget issues, and how quickly, is a topic of debate. The relative strength of the current U.S. economy makes a case for addressing the deficit in the near term. The faster the debt-to-GDP ratio grows, the more burdensome interest payments become and the more the debt compounds. CBO also projects that a sustained reduction in the deficit to 1.9% of GDP would be required to stabilize debt at 78% of GDP, its current level, under the standard baseline, whereas a 3.0% cut would be required to bring debt to the average of the past 50 years (41% of GDP). If the reduction is delayed for 5 years, the required decreases would be 2.3% and 3.6% of GDP; if delayed for 10 years, 2.9% and 4.6% of GDP.", "However, addressing the deficit quickly may temporarily dampen economic activity. In addition, if the measures to address the deficit are implemented too quickly, some people may not have sufficient time to plan or adjust to the new set of rules.", "The need to not move too slowly or quickly can also affect the optimal approaches to deficit reduction. For example, it is difficult to change current entitlements for the elderly (such as Social Security, Medicare, and part of Medicaid, which funds nursing home care). Many retired individuals have little leeway to adjust to such changes and could be particularly burdened by benefit reductions, which suggests that benefit changes be adopted in the near term but applicable to the future. Changing discretionary spending or increasing taxes can be achieved more quickly, although, as discussed below, the long-run gap between spending and taxes is too large to be addressed with discretionary spending revisions alone."], "subsections": []}, {"section_title": "Deficits Under Alternative Baselines", "paragraphs": ["In addition to its standard budget baseline, CBO also regularly analyzes the budgetary effects of different alternative baselines. One regularly estimated baseline maintains the current policies in place at the time of the estimate\u2014referred to as a current policy baseline. This baseline is presented in Table 8 along with the standard\u2014or current law\u2014extended baseline.", "These baselines differ in a number of ways. Revenues are lower under the alternative baseline as it assumes an extension of the individual income tax provisions of P.L. 115-97 , which are scheduled to expire in 2026\u00a0under current law. In addition, noninterest spending is higher under the alternative baseline, which assumes limits on discretionary spending are not to take effect and the base for emergency spending is set at historical levels.", "Under the alternative baseline, deficit reduction becomes more difficult because debt and interest payments have grown more quickly."], "subsections": []}, {"section_title": "Deficit Reduction Strategies", "paragraphs": ["The Peter G. Peterson Foundation's 2015 Fiscal Summit (Solutions Initiative III) brought together the American Action Forum, the American Enterprise Institute, the Bipartisan Budget Center, the Center for American Progress, and the Economic Policy Institute to develop specific, \"scoreable\" policy proposals that would place the federal budget on a sustainable long-term path. Each plan provided a roadmap to reduce budget deficits and stabilize the debt, although they differed in the details.", "All of the plans aimed at reducing the debt-to-GDP ratio, but they varied in spending, taxes, and the deficit relative to output. For those plans in which measures were reported (for 2040), spending-to-GDP ratios ranged from 17.8% to 24.3%, whereas taxes-to-GDP ratios varied from 21.2% to 23.5%. The resulting fiscal outcomes ranged from a surplus of 4.5% to a deficit of 1.9%.", "A debt level can still be sustainable with some continuing deficit. The deficit causes the debt to grow, but as long as it is not large enough to cause debt to grow faster than GDP, the debt-to-GDP ratio will be stable or in decline.", "Although summarizing the plans is beyond the scope of this report, Table 9 shows the five plans along with the contemporaneous (2015) CBO baseline projections and the most recent (2018) CBO baseline projection. ", "All of the proposed plans would have increased revenue collections relative to both CBO projections and reduced spending relative to the most recent CBO baseline."], "subsections": []}, {"section_title": "Challenges to Reducing Budget Deficits", "paragraphs": ["Discussions on how to reduce the budget deficit often begin narrowly, then expand to broader proposals. This section examines several of these more narrow beginnings to illustrate the challenges of reducing the deficit sufficiently to address the long-term challenge."], "subsections": [{"section_title": "How Much Can Discretionary Spending Cuts Reduce the Budget Deficit?", "paragraphs": ["Discretionary spending, as discussed above, whether for defense or nondefense purposes, does not cause long-run growth in spending and has historically been relatively constant or in decline as a percentage of GDP. Discretionary spending, however, is targeted as a source of budget savings in the proposals and, because it is easier to change in the short run, may be a source of initial savings. Caps on discretionary spending were the main source of projected deficit reduction enacted as part of the Budget Control Act of 2011 (BCA; P.L. 112-25 ).", "The CBO baseline incorporates the reductions from the BCA through FY2021 and then assumes that discretionary spending will grow at the rate of inflation going forward. As shown in the historical analysis from Table 3 and Figure 3 , defense and nondefense discretionary spending has been higher in the past, and hence cuts would lead to a lower level of government services than has traditionally been the case. (Defense spending, as noted above, also fluctuates depending on international conflicts, although it has increased to respond to perceived threats or other changes such as an all-volunteer force.)", "At the same time, proposals presented in the Solutions Initiative III did not spell out the specific cuts proposed, an important issue given the diversity in the types of programs in defense and nondefense discretionary spending. That is, these plans generally directed agencies to cut spending without outlining the specifics. Thus, the plans did not indicate, for example, whether fewer prisons will exist, grants for special-needs children will be reduced, a smaller military was to be maintained, fewer highways will be built or repaired, etc. However, these reductions might have needed to be significant. For example, Solutions Initiative III plans proposed cuts to total discretionary spending that were on average 19% below the CBO baseline.", "Nevertheless, it is unlikely that reductions in discretionary spending could close much of the long-run deficit gap. The Solutions Initiative III plans' proposed cuts in discretionary spending would have reduced overall discretionary spending by about 1.4 percentage points of GDP on average. Yet, as seen in Table 9 , CBO estimated the gap between spending and taxes by FY2040 to be 5.9% of GDP, and it has subsequently grown to an estimated 7.6% of GDP. Thus, closing this gap is likely to require cuts in other spending, including entitlements, increases in tax revenues, or a combination thereof.", "CBO's 2018 study on budget options contained some specific options for cuts in discretionary spending, which might suggest the types of cuts that might be considered in these proposals, although most of these were small. For example, implementing the 10 largest discretionary options listed in the CBO report would reduce spending by up to $148.1 billion per year, or 0.7% of GDP. Doing so would, however, require reducing defense spending by 10%, eliminating the Section 8 housing voucher and the Head Start programs, and reducing federal highway funding by roughly 25% along with other program reductions. In contrast, the Solutions Initiative III plans would have on average required reductions twice as large."], "subsections": []}, {"section_title": "Are Social Security and Medicare Hospital Insurance Trust Funds to Be Preserved?", "paragraphs": ["Since its inception in the 1930s, Social Security has been financed through a trust fund mechanism in which benefits were financed from payroll tax contributions. Payroll taxes are imposed at a flat rate fixed in statute, with a cap on income covered that is indexed to wages. Because of increasing disparities in income, this ceiling falls lower in the income distribution than it has in the past. Benefits, although they are linked to contributions (e.g., lifetime payroll taxes), are progressive in that the replacement rate for wages falls as wages rise.", "Because of the link between wages and benefits, many view Social Security like a pension, with income in retirement earned through contributions. With Social Security, there is a link between contributions and benefits. Because the trust fund does not accumulate retirement contributions in the same way as a pension plan (but rather pays most benefits out of current contributions), the trust fund's financing was affected by demographics. Currently, the trust fund is spending more in benefits than it collects in payroll taxes and uses interest earnings to fill the gap. ", "Benefits, as shown in Table 6 , are growing faster than payroll taxes. As a result, under current policy, the Social Security (OASI) trust fund has been using its assets and will become insolvent by 2034, at which point it will have income sufficient to pay about three-fourths of benefits. Moreover, if a position is taken that taxes cannot be increased (as discussed below) or that payroll tax collections are not to be increased, then either the close link between payroll contributions and earnings will have to be abandoned or the burden of restoring solvency will fall on cutting benefits (by roughly 25%).", "The plans presented in the Solutions Initiative III provide a range of alternatives. On average, they would have decreased Social Security spending by 3.2%, or 0.2% of GDP. While not quantified in the report, three of the five plans presented would have increased payroll taxes on higher earners. ", "CBO's 2018 report identifies several options related to Social Security benefits and payroll taxes. The two largest options to reduce Social Security spending\u2014lower initial benefit amounts and grow the benefits more slowly over time\u2014were estimated to reduce Social Security spending by up to an average of 0.2% of GDP per year over the next 10 years. The two largest options to increase payroll tax collections\u2014raise payroll tax rates and increase the contributions cap\u2014were estimated to raise up to 1.2% of GDP per year of payroll tax revenue over the next 10 years. ", "The Medicare HI trust fund has been affected over time (as has Medicare in general) by demographics and, more importantly, by the growth in health care expenditures per capita due to technical advances and cultural expectations. The plans presented in the Solutions Initiative III provide a varied selection of options\u2014though all advocated for various forms of cost containment.", "CBO's 2018 report identifies several options related to Medicare benefits and payroll taxes. The largest option to reduce Medicare spending\u2014by increasing cost sharing and restricting Medigap insurance\u2014was estimated to reduce Medicare spending by up to an average of 0.05% of GDP per year over the next 10 years. The two largest options to raise revenue associated with Medicare\u2014raising payroll tax rates and increasing premiums on Medicare Part B and D\u2014were estimated to collectively raise up to 1.0% of GDP per year of payroll tax revenue over the next 10 years."], "subsections": []}, {"section_title": "Can Long-Run Budget Issues Be Addressed by Keeping Tax Levels Constant?", "paragraphs": ["One philosophy behind the viewpoint of keeping revenues fixed relative to GDP is that government spending takes away from private choices and creates inefficiency and that taxes impose distortions, inhibiting economic activity. (This viewpoint depends on strong assumptions about benefits generated by federal spending.) By limiting revenues available, the scope of the federal government would be constrained. An argument is also sometimes made that tax increases would inhibit economic activity so much that revenues would decline rather than rise. However, empirical evidence does not generally support this view.", "If revenues are limited, significant pressure would be placed on major entitlements. For example, Social Security, health spending, and interest alone are projected to total 19.2% of GDP in FY2040. If revenues are around 19.4% of GDP, 0.2% of GDP is left for everything else. (In the CBO 2018 baseline, this amount was 0.1% of GDP.) The budget situation would be more constrained if current policies scheduled to expire are extended. Defense, nondefense discretionary, and other mandatory programs are projected to amount to 6.9% of GDP in FY2040 (7.6% of GDP in the CBO 2018 baseline). Thus, it would appear that major reductions in Social Security and health spending would be required to constrain tax levels at current percentages of GDP. ", "The Solutions Initiative III proposals all choose to raise additional revenue, which reduces the required cutbacks in Social Security and health spending to address the long-run deficit. As seen in Table 9 , the proposals would have increased taxes as a percentage of output relative to the CBO 2015 baseline to an average of 22.0% of GDP (an increase of 2.3% of GDP relative to the 2015 CBO baseline). This additional revenue allows the Solutions Initiative III proposals to achieve their policy goal with reductions in Social Security and health care spending of 0.9% of GDP. ", "Although the Solutions Initiative III plans and their approaches are illustrative, they are also suggestive of what would likely be necessary to hold the tax revenues fixed and address the long-run deficit: major changes to government programs for health care and other entitlements."], "subsections": []}, {"section_title": "What Would Be Required to Protect Entitlements? A Review of Tax Options", "paragraphs": ["To examine the other side of this coin, consider what would be required to protect entitlements. Protecting entitlements reflects the view that government should maintain its social safety net for lower-income persons and programs for the elderly, including provisions for health care, because they are important components of maintaining a reasonable standard of living.", "The Social Security trust funds hold sizable assets, accumulated from prior years of cash surpluses that can be used to support the payment of future benefits. Medicare HI also has accumulated surpluses that will maintain benefits for some years to come. Nevertheless, neither of these plans is sustainable in its current formulation, and the shortfall in revenues relative to payments contributes to the overall deficit.", "If maintaining these programs is the policy goal, taxes would need to be increased\u2014as it is unlikely that discretionary spending or other non-entitlement spending alone would fully address the long-run deficit. "], "subsections": [{"section_title": "Justifications for Maintaining Entitlements", "paragraphs": ["Is there a justification for increasing the size of government to continue the present Social Security and health benefit payments? It is useful to consider separately Social Security, whose issues arise from demographics, and health care, whose issues arise from a combination of demographics and health care costs.", "Social Security benefits are expected to rise from the current 4.95% of output to 6.29% in FY2035. The problem with Social Security funding did not arise from the baby boom; it arose from the increase in life span whose pressures on the system were masked for a time by the growth in the labor force (both from the baby boom and the entry of women into the labor force). Unlike health care, Social Security benefits are not expected to grow continuously but to stabilize over time so that benefits and costs are relatively constant (with benefits around 6.3% and revenues about 4.4% of GDP). Therefore, a range of tax increases, as well as benefit cuts, could bring the program into permanent balance.", "Social Security has been justified due to a number of market failures, and given these justifications, a case can be made that solutions that raise taxes are more equitable than those that reduce benefits. A mixed option, which affects both taxes and benefits, would be to increase the retirement age, although such an increase would put pressure on the disability-insurance program because some individuals will find it more difficult to work longer and would disproportionally affect low-income workers. ", "This assessment considers outcomes in the steady state. There is also the issue of which generation bears the burden during the transition. The more the system relies on tax increases as opposed to benefit cuts in the short and medium term, the more the burden is shifted to younger generations. Similar life-cycle arguments could be applied to any program for the elderly\u2014including Medicare and nursing home costs under Medicaid\u2014to the extent that the program's costs increase because of longevity. These programs are financed by a combination of payroll taxes and general revenues, but most of these taxes would be collected during most individuals' working years.", "Cost increases for health care are a different matter, in part because they seem to be growing continuously and in part because they can be viewed in different ways. To the extent that rising costs reflect better medical care that extends and improves the quality of life, spending more money on health care may appropriately reflect preferences of individuals whose higher incomes permit them to spend more of their resources in this area. However, to the extent that rising medical costs reflect serious inefficiencies in the system arising from failure to allocate resources by price and causing patients and their physicians to consume large and inefficient amounts of health care, then increased benefits may not be justified."], "subsections": []}, {"section_title": "Revenue Raising Options", "paragraphs": ["If benefits are to be largely maintained, and because it is relatively clear that cutting other forms of spending will probably not be adequate, what are the tax options? Basically, these options, some of which are discussed in a number of the budget proposals, are ", "raising income tax rates, broadening the income tax base through reductions in tax expenditures, increasing other taxes (such as payroll and excise taxes), and introducing new taxes (such as a value-added tax or a carbon tax).", "Rates can easily be varied, and several of the proposals included in the CBO Budget Options incorporate rate changes. The barriers for rate increases might be viewed as largely political rather than technical, and top tax rates in the past have been much higher than they are today. ", "Although tax expenditures have received much attention and eliminating or curtailing them have been included in various budget proposals, policymakers face significant political and technical barriers to implementing changes. Some tax expenditures are technically difficult to eliminate (especially employer fringe benefits), some are valued as part of the social safety net (such as the earned income credit or exclusion of transfers), some are desirable for other reasons, and some are so politically popular (e.g., the home mortgage interest deduction) that eliminating them or scaling them back could be difficult.", "For example, considering technical challenges alone, four of the Solutions Initiative III proposals would have eliminated or limited the exclusion of employer health insurance, the largest individual tax expenditure, which accounts for 11.9% of the total revenue forgone. If including these expenditures as income, fairly designing an inclusion is very difficult because the value of insurance varies, for example, with the employee's age and other characteristics. If not allowed to vary by age, young employees who work for firms with higher average employee ages will be imputed more income than employees working for firms with younger employees. Potentially more serious imputation problems arise with valuing the tax expenditure associated with defined benefit pension plans, which accounts for 7.2% of the total. Problems arise with regard to this tax expenditure because of defined benefit pension plans, whose benefits are difficult to allocate because they ultimately depend on future work history with the firm.", "At the same time, the Solutions Initiative III proposals also envision eliminating a broad array of tax expenditures. If used to generate additional revenue, reducing tax expenditures could result in significant progress toward reducing the deficit. One study, for example, suggests that a more realistic appraisal of tax expenditure options, taking into account technical barriers, political barriers, and justification for some provisions, would increase income-tax revenues by about 15%. ", "Two other types of taxes that might be altered are the payroll and excise taxes. For example, some of the Solution Initiative III proposals would have raised or eliminated the cap on earnings for payroll taxes. Other options include raising rates and expanding the base to include fringe benefits, such as pension contributions and health care. (Imputing income, however, as noted above, may be problematic.) A number of options could significantly extend solvency to the Social Security trust fund. Revenue could also be raised by taxing Social Security benefits in the same way as pensions, and this revenue, although considered as part of tax expenditures, could be designated to finance Social Security benefits. In addition, proposals have included increases in gasoline taxes to provide additional funding for highways and increases in alcohol taxes, whose real value has been declining since 1991.", "Finally, there are options for additional types of taxes. Three new tax sources that have been included in the proposals are value-added taxes and carbon taxes (revenue could also be collected through an auction of carbon rights through a cap-and-trade system). Both value-added taxes and carbon taxes could raise significant amounts of additional revenues\u2014$1.9 trillion and $1.1 trillion, respectively, over 10 years, according to CBO.", "These revenue sources differ in the incentives they create and also in their progressivity. Because income taxes tend to fall more heavily than other taxes on high-income individuals and tax expenditures tend to benefit higher-income individuals, these changes would likely add to the progressivity of the system. Changes in payroll rates would tend to be proportional and affect higher-income individuals less, although raising the wage cap would concentrate the effect on higher-income workers. Flat-rate consumption taxes, including value-added taxes, carbon taxes, and specific excise taxes (such as those on gasoline, alcohol, and sugared beverages) tend to be regressive. A combination of changes could, however, achieve approximately the same distribution as current revenues."], "subsections": []}]}, {"section_title": "Effects on State and Local Governments", "paragraphs": ["To what extent, if any, the Solutions Initiative III proposals would have reduced transfers to state and local governments was not generally specified. This is because the details of discretionary spending (other than caps and limits) was done at a highly aggregated level. As these were not generally spelled out, some of these reductions could have reduced transfers to state and local governments in areas such as education, transportation, and community development where states directly provide the services. In addition, the state and local governments administer many entitlements, for both health and income security, with federal transfers. Two of the Solutions Initiative III proposals would have reduced federal transfers to the state for Medicaid. As noted above, federal transfers to state and local governments are 2.8% of output and constitute 33% of the receipts of these governments. State and local governments also benefit from tax expenditures that allow itemized deductions for state and local taxes and exclusions for interest on state and local bonds. Depending on how these governments respond, restrictions that affect state and local transfers could largely shift the burden of spending from federal to subnational governments."], "subsections": []}]}]}]}}
{"id": "R45699", "title": "The Federal Communications Commission: Current Structure and Its Role in the Changing Telecommunications Landscape", "released_date": "2019-04-18T00:00:00", "summary": ["The Federal Communications Commission (FCC) is an independent federal agency established by the Communications Act of 1934 (1934 Act, or \"Communications Act\"). The agency is charged with regulating interstate and international communications by radio, television, wire, satellite, and cable. The mission of the FCC is to make available for all people of the United States, \"without discrimination on the basis of race, color, religion, national origin, or sex, a rapid, efficient, Nationwide, and worldwide wire and radio communication service with adequate facilities at reasonable charges.\"", "The FCC operates under a public interest mandate first laid out in the 1927 Radio Act (P.L. 632, 69th Congress), but how this mandate is applied depends on how \"the public interest\" is interpreted. Some regulators seek to protect and benefit the public at large through regulation, while others seek to achieve the same goals through the promotion of market efficiency. Additionally, Congress granted the FCC wide latitude and flexibility to revise its interpretation of the public interest standard to reflect changing circumstances and the agency has not defined it in more concrete terms. These circumstances, paired with changes in FCC leadership, have led to significant changes over time in how the FCC regulates the broadcast and telecommunications industries.", "The FCC is directed by five commissioners appointed by the President and confirmed by the Senate for five-year terms. The President designates one of the commissioners as chairperson. Three commissioners may be members of the same political party of the President and none can have a financial interest in any commission-related business. The current commissioners are Ajit Pai (Chair), Michael O'Rielly, Brendan Carr, Jessica Rosenworcel, and Geoffrey Starks.", "The day-to-day functions of the FCC are carried out by 7 bureaus and 10 offices. The current basic structure of the FCC was established in 2002 as part of the agency's effort to better reflect the industries it regulates. The seventh bureau, the Public Safety and Homeland Security Bureau, was established in 2006. The bureaus process applications for licenses and other filings, manage non-federal spectrum, analyze complaints, conduct investigations, develop and implement regulatory programs, and participate in hearings, among other things. The offices provide support services. Bureaus and offices often collaborate when addressing FCC issues.", "Beginning in the 110th Congress, the FCC has been funded through the House and Senate Financial Services and General Government (FSGG) appropriations bill as a single line item. Previously, it was funded through what is now the Commerce, Justice, Science appropriations bill, also as a single line item. Since 2009 the FCC's budget has been derived from regulatory fees collected by the agency rather than through a direct appropriation. The fees, often referred to as \"Section (9) fees,\" are collected from license holders and certain other entities. The FCC is authorized to review the regulatory fees each year and adjust them to reflect changes in its appropriation from year to year. Most years, appropriations language prohibits the use by the commission of any excess collections received in the current fiscal year or any prior years.", "For FY2020, the FCC has requested $335,660,000 in budget authority from regulatory fee offsetting collections. The FCC also requested $132,538,680 in budget authority for the spectrum auctions program."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview of the Federal Communications Commission", "paragraphs": ["The Federal Communications Commission (FCC) is an independent federal agency, with its five members appointed by the President, subject to confirmation by the Senate. It was established by the Communications Act of 1934 (1934 Act, or \"Communications Act\") and is charged with regulating interstate and international communications by radio, television, wire, satellite, and cable. The mission of the FCC is to ensure that the American people have available, \"without discrimination on the basis of race, color, religion, national origin, or sex, a rapid, efficient, Nationwide, and worldwide wire and radio communication service with adequate facilities at reasonable charges.\" ", "The 1934 Act is divided into titles and sections that describe various powers and concerns of the commission.", "Title I\u2014FCC Administration and Powers. The 1934 Act originally called for a commission consisting of seven members, but that number was reduced to five in 1983. Commissioners are appointed by the President and approved by the Senate to serve five-year terms; the President designates one member to serve as chairman. Title II\u2014Common carrier regulation, primarily telephone regulation, including circuit-switched telephone services offered by cable companies. Common carriers are communication companies that provide facilities for transmission but do not originate messages, such as telephone and microwave providers. The 1934 Act limits FCC regulation to interstate and international common carriers, although a joint federal-state board coordinates regulation between the FCC and state regulatory commissions. Title III\u2014Broadcast station requirements. Much existing broadcast regulation was established prior to 1934 by the Federal Radio Commission, and most provisions of the Radio Act of 1927 were subsumed into Title III of the 1934 Act. Title IV\u2014Procedural and administrative provisions, such as hearings, joint boards, judicial review of the FCC's orders, petitions, and inquiries. Title V\u2014Penal provisions and forfeitures, such as violations of rules and regulations. Title VI\u2014Cable communications, such as the use of cable channels and cable ownership restrictions, franchising, and video programming services provided by telephone companies. Title VII\u2014Miscellaneous provisions and powers, such as war powers of the President, closed captioning of public service announcements, and telecommunications development fund."], "subsections": [{"section_title": "FCC Leadership", "paragraphs": ["The FCC is directed by five commissioners appointed by the President and confirmed by the Senate for five-year terms (except when filling an unexpired term). The President designates one of the commissioners to serve as chairperson. Three commissioners may be members of the same political party as the President and none can have a financial interest in any commission-related business. ", "Ajit Pai, Chair (originally sworn in on May 14, 2012; designated chairman by President Trump in January 2017 and confirmed by the Senate for a second term on October 2, 2017); Michael O'Rielly (sworn in for a second term on January 29, 2015); Brendan Carr (sworn in on August 11, 2017); Jessica Rosenworcel (sworn in on August 11, 2017); and Geoffrey Starks (sworn in on January 30, 2019)."], "subsections": []}, {"section_title": "FCC Structure", "paragraphs": ["The day-to-day functions of the FCC are carried out by 7 bureaus and 10 offices. The current basic structure of the FCC was established in 2002 as part of the agency's effort to better reflect the industries it regulates. The seventh bureau, the Public Safety and Homeland Security Bureau, was established in 2006, largely in response to Hurricane Katrina.", "The bureaus process applications for licenses and other filings, analyze complaints, conduct investigations, develop and implement regulatory programs, and participate in hearings, among other things. The offices provide support services. Bureaus and offices often collaborate when addressing FCC issues. The bureaus hold the following responsibilities:", "Consumer and Governmental Affairs Bureau\u2014Develops and implements consumer policies, including disability access and policies affecting Tribal nations. The Bureau serves as the public face of the Commission through outreach and education, as well as responding to consumer inquiries and informal complaints. The Bureau also maintains collaborative partnerships with state, local, and tribal governments in such critical areas as emergency preparedness and implementation of new technologies. In addition, the Bureau's Disability Rights Office provides expert policy and compliance advice on accessibility with respect to various forms of communications for persons with disabilities. Enforcement Bureau\u2014Enforces the Communications Act and the FCC's rules. It protects consumers, ensures efficient use of spectrum, furthers public safety, promotes competition, resolves intercarrier disputes, and protects the integrity of FCC programs and activities from fraud, waste, and abuse. International Bureau\u2014Administers the FCC's international telecommunications and satellite programs and policies, including licensing and regulatory functions. The Bureau promotes pro-competitive policies abroad, coordinating the FCC's global spectrum activities and advocating U.S. interests in international communications and competition. The Bureau works to promote high-quality, reliable, interconnected, and interoperable communications infrastructure on a global scale. Media Bureau\u2014Recommends, develops, and administers the policy and licensing programs relating to electronic media, including broadcast, cable, and satellite television in the United States and its territories. Public Safety and Homeland Security Bureau\u2014Develops and implements policies and programs to strengthen public safety communications, homeland security, national security, emergency management and preparedness, disaster management, and network reliability. These efforts include rulemaking proceedings that promote more efficient use of public safety spectrum, improve public alerting mechanisms, enhance the nation's 911 emergency calling system, and establish frameworks for communications prioritization during crisis. The Bureau also maintains 24/7 operations capability and promotes Commission preparedness to assist the public, first responders, the communications industry, and all levels of government in responding to emergencies and major disasters where reliable public safety communications are essential. Wireless Telecommunications Bureau\u2014Responsible for wireless telecommunications programs and policies in the United States and its territories, including licensing and regulatory functions. Wireless communications services include cellular, paging, personal communications, mobile broadband, and other radio services used by businesses and private citizens. Wireline Competition Bureau\u2014Develops, recommends, and implements policies and programs for wireline telecommunications, including fixed (as opposed to mobile) broadband and telephone landlines, striving to promote the widespread development and availability of these services. The Bureau has primary responsibility for the Universal Service Fund which helps connect all Americans to communications networks.", "The offices hold the following responsibilities:", "Administrative Law Judges\u2014Composed of one judge (and associated staff) who presides over hearings and issues decisions on matters referred by the FCC. Communications Business Opportunities\u2014Promotes competition and innovation in the provision and ownership of telecommunications services by supporting opportunities for small businesses as well as women and minority-owned communications businesses. Economics and Analytics\u2014Responsible for expanding and deepening the use of economic analysis into Commission policymaking, for enhancing the development and use of auctions, and for implementing consistent and effective agency-wide data practices and policies. The Office also manages the FCC's auctions in support of and in coordination with the FCC's Bureaus and Offices. In January 2019, the FCC voted along party lines to eliminate the Office of Strategic Planning and Policy Analysis and replace it with the Office of Economics and Analytics. Engineering and Technology\u2014Advises the FCC on technical and engineering matters. This Office develops and administers FCC decisions regarding spectrum allocations and grants equipment authorizations and experimental licenses. General Counsel\u2014Serves as the FCC's chief legal advisor and representative. Inspector General\u2014Conducts and supervises audits and investigations relating to FCC programs and operations. Legislative Affairs\u2014Serves as the liaison between the FCC and Congress, as well as other federal agencies. Managing Director\u2014Administers and manages the FCC. Media Relations\u2014Informs the media of FCC decisions and serves as the FCC's main point of contact with the media. Workplace Diversity\u2014Ensures that FCC provides employment opportunities for all persons regardless of race, color, sex, national origin, religion, age, disability, or sexual orientation.", "Additionally, an FCC Secretary serves to preserve the integrity of the FCC's records, oversee the receipt and distribution of documents filed by the public through electronic and paper filing systems, and give effective legal notice of FCC decisions by publishing them in the Federal Register and the FCC Record ."], "subsections": []}, {"section_title": "FCC Strategic Plan", "paragraphs": ["The current FCC Strategic Plan covers the five-year period FY2018-FY2022. The plan outlines four goals:", "Closing the Digital Divide\u2014Broadband is acknowledged as being critical to economic opportunity, but broadband is unavailable or unaffordable in many parts of the country. The FCC is to seek to help close the digital divide, bring down the cost of broadband deployment, and create incentives for providers to connect consumers in hard-to-serve areas. Promoting Innovation\u2014Fostering a competitive, dynamic, and innovative market for communications services is a key priority for the FCC. The FCC plans to promote entrepreneurship, expand economic opportunity, and remove barriers to entry and investment. Protecting Consumers and Public Safety\u2014Serving the broader public interest is the FCC's core mission. The FCC plans to work to combat unwanted and unlawful robocalls, make communications accessible for people with disabilities, and protect public safety (e.g., ensuring delivery of 9-1-1 calls, restoring communications after disasters). Reforming the FCC's Processes\u2014One of the chairman's top priorities has been to implement process reforms to make the work of the FCC more transparent, open, and accountable to the public. The FCC plans to modernize and streamline its operations and programs to improve decisionmaking, build consensus, and reduce regulatory burdens.", "The FCC has identified performance objectives associated with each strategic goal. Commission management annually develops targets and measures related to each performance goal to provide direction toward accomplishing those goals. Targets and measures are published in the FCC's Performance Plan, and submitted with the commission's annual budget request to Congress. Results of the commission's efforts to meet its goals, targets, and measures are found in the FCC's Annual Performance Report published each February. The FCC also issues a Summary of Performance and Financial Results every February, providing a concise, citizen-focused review of the agency's accomplishments."], "subsections": []}]}, {"section_title": "FCC Operations: Budget, Authorization, and Reporting to Congress", "paragraphs": ["Since the 110 th Congress, the FCC has been funded through the House and Senate Financial Services and General Government (FSGG) appropriations bill as a single line item. Previously, it was funded through what is now the Commerce, Justice, Science appropriations bill, also as a single line item.", "The FCC annually collects and retains regulatory fees to offset costs incurred by the agency and to carry out its functions. Since 2009 the FCC's budget has been derived from regulatory fees collected by the agency rather than through a direct appropriation. The fees, often referred to as \"Section (9) fees,\" are collected from license holders and certain other entities (e.g., cable television systems). The regulatory fees do not apply to governmental entities, amateur radio operator licensees, nonprofit entities, and certain other non-commercial entities. The FCC is authorized to review the regulatory fees each year and adjust them to reflect changes in its appropriation from year to year. The Commission originally implemented the Regulatory Fee Collection Program by rulemaking on July 18, 1994. The most recent regulatory fee order was released by the Commission on August 29, 2018. The FCC's budgets from FY2010 to FY2020 are in Figure 1 ."], "subsections": [{"section_title": "Availability of Regulatory Fees", "paragraphs": ["On March 23, 2018, the Repack Airwaves Yielding Better Access for Users of Modern Services Act of 2018 (the \"RAY BAUM'S Act\" or \"2018 Act\") became law as part of the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ). The 2018 Act requires the FCC to transfer all excess collections for FY2018 and prior years to the General Fund of the U.S. Treasury for the sole purpose of deficit reduction. The 2018 Act also requires the Commission to transfer any excess collections in FY2019 and in subsequent years to the General Fund of the U.S. Treasury for the sole purpose of deficit reduction. On October 1, 2018, the Commission transferred over $9 million in excess collections from FY2018 as well as approximately $112 million in excess collections from FY2017 and prior years to the General Fund of the U.S. Treasury."], "subsections": []}, {"section_title": "FCC FY2020 Budget", "paragraphs": ["For FY2020, the FCC has requested $335,660,000 in budget authority from regulatory fee offsetting collections. This is $3,950,000 less than the authorization level of $339,610,000 included in the 2018 FCC Reauthorization in the Consolidated Appropriations Act, 2018. The FY2020 FCC request also represents a decrease of $3,340,000, or about 1.0%, from the FY2019 appropriated level of $339,000,000.", "The FCC requested $132,538,680 in budget authority for the spectrum auctions program. For FY2019, Congress appropriated a cap of $130,284,000 for the spectrum auctions program, which included additional funds to implement the requirements of the 2018 Act that mandated significant additional work for the FCC related to the TV Broadcaster Relocation Fund. The Commission's FY2020 budget request of $132,538,680 for this program would be an increase of $2,254,680, or 1.7%, over the FY2019 appropriation. This level of funding is intended to enable the Commission to continue its efforts to: reimburse full power and Class A stations, multichannel video programming distributors, Low Power TV, TV translator, and FM stations for reasonable costs incurred as a result of the Commission's incentive auction; make more spectrum available for 5G; and educate consumers affected by the reorganization of broadcast television spectrum. To date, the Commission's spectrum auctions program has generated over $114.6 billion for government use; at the same time, the total cost of the auctions program has been less than $2.0 billion, or less than 1.7% of the total auctions' revenue."], "subsections": []}, {"section_title": "FCC Authorization", "paragraphs": ["Through the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), the FCC was reauthorized for the first time since 1990 (FCC Authorization Act of 1990, P.L. 101-396 ). "], "subsections": []}, {"section_title": "FCC Reporting to Congress", "paragraphs": ["The FCC publishes four periodic reports for Congress. ", "Strategic Plan. The Strategic Plan is the framework around which the FCC develops its yearly Performance Plan and Performance Budget. The FCC submitted its current four-year Strategic Plan for 2018-2022 in February 2018, in accordance with the Government Performance and Results Modernization Act of 2010, P.L. 111-352 . Performance Budget. The annual Performance Budget includes performance targets based on the FCC's strategic goals and objectives, and serves as the guide for implementing the Strategic Plan. The Performance Budget becomes part of the President's annual budget request. Agency Financial Report. The annual Agency Financial Report contains financial and other information, such as a financial discussion and analysis of the agency's status, financial statements, and audit reports. Annual Performance Report. At the end of the fiscal year, the FCC publishes an Annual Performance Report that compares the agency's actual performance with its targets. ", "All of these reports are available on the FCC website, https://www.fcc.gov/about/strategic-plans-budget ."], "subsections": []}]}, {"section_title": "Activity in the 116th Congress", "paragraphs": ["One FCC-related hearing has been held in the 116 th Congress. On April 3, 2019, the House Committee on Appropriations Subcommittee on Financial Services and General Government held a hearing on the FY2020 FCC budget. The hearing addressed issues including 5G deployment, federal preemption of state and local tower siting requirements, merger reviews, robocalls, and net neutrality. No bills that would affect the operation of the FCC have been introduced in the 116 th Congress."], "subsections": []}, {"section_title": "Trends in FCC Regulation: Defining the Public Interest", "paragraphs": ["The FCC operates under a public interest mandate first laid out in the 1927 Radio Act (P.L. 632, 69 th Congress), but how this mandate is applied depends on which of two regulatory philosophies is relied upon to interpret it. The first seeks to protect and benefit the public at large through regulation, while the second seeks to achieve the same goals through the promotion of market efficiency. Additionally, Congress granted the FCC wide latitude and flexibility to revise its interpretation of the public interest standard to reflect changing circumstances, and the agency has not defined it in more concrete terms. These circumstances, paired with changes in FCC leadership, have led to significant changes over time in how the FCC regulates the broadcast and telecommunications industries. This evolution can be illustrated in changes to the agency's strategic goals under former Chairman Tom Wheeler to current Chairman Ajit Pai, which, in turn, led to the repeal in 2017 of the FCC's 2015 net neutrality rules and to changes in the agency's structure in 2019."], "subsections": [{"section_title": "FCC Strategic Goals", "paragraphs": ["The FCC's strategic goals are set forth in its quadrennial Strategic Plan. How these goals change from one plan to the next can illustrate how the priorities of the commission change over time, especially when there is a change in the political majority of the commission and therefore, the political party of the chairman. Table 1 outlines the strategic goals of Chairman Wheeler in the FY2015-FY2018 Strategic Plan compared to those of Chairman Pai in the FY2018-FY2022 Strategic Plan. ", "Chairman Wheeler was a proponent of protecting and benefitting the public through regulation. His support of this regulatory philosophy can be seen in the language used in the strategic goals, such as the \"rights of users\" and the \"responsibilities of network providers.\" Another example can be seen in the following language: \"The FCC has a responsibility to promote the expansion of these networks and to ensure they have the incentive and the ability to compete fairly with one another in providing broadband services.\" ", "On the other hand, Chairman Pai speaks about protecting and benefitting the public through the promotion of market incentives and efficiency. His support of this regulatory philosophy can be seen in the language used in the strategic goals, such as \"reducing regulatory burdens\" and ensuring that \"regulations reflect the realities of the current marketplace, promote entrepreneurship, expand economic opportunity, and remove barriers to entry and investment.\" ", "The use of this particular language may seem somewhat vague, but within the context of the net neutrality debate, discussed below, and the replacement of the Office of Strategic Planning and Policy Analysis with the Office of Economics and Analytics, those words take on more specific meaning, each intending to support the policy agenda of the Chairman."], "subsections": []}, {"section_title": "Net Neutrality", "paragraphs": ["Net neutrality is arguably the highest profile issue illustrating the two regulatory philosophies described above. Chairman Pai had long maintained that the FCC under Chairman Wheeler had overstepped its bounds, expressing confidence that the 2015 Wheeler-era net neutrality rules would be undone, calling them \"unnecessary regulations that hold back investment and innovation.\"", "Although the net neutrality debate originated in 2005, the 2015 Open Internet Order, implemented under the leadership of Chairman Wheeler, and the 2017 Order overturning those rules, promulgated under Chairman Pai, are the most recent. These two orders can be used to illustrate the contrast between the regulatory philosophies of the two chairmen:", "Some policymakers contend that more proscriptive regulations, such as those contained in the FCC's 2015 Open Internet Order (2015 Order), are necessary to protect the marketplace from potential abuses which could threaten the net neutrality concept. Others contend that existing laws and the current, less restrictive approach, contained in the FCC's 2017 Restoring Internet Freedom Order (2017 Order), provide a more suitable framework.", "Net neutrality continues to be a highly politicized issue, with most FCC action being approved along party lines. "], "subsections": []}, {"section_title": "FCC Structure", "paragraphs": ["In January 2019, the FCC voted along party lines to eliminate the Office of Strategic Planning and Policy Analysis and replace it with a new Office of Economics and Analytics. The Office of Strategic Planning and Policy Analysis (OSP) was created in 2005, replacing the Office of Plans and Policy. OSP had been charged with \"providing advice to the chairman, commissioners, bureaus, and offices; developing strategic plans; identifying the agency's policy objectives; and providing research, advice, and analysis of advanced, novel, and nontraditional communications issues.\" It had also been the home of the Chief Economist and Chief Technologist. ", "The new Office of Economics and Analytics is \"responsible for expanding and deepening the use of economic analysis into FCC policy making, for enhancing the development and use of auctions, and for implementing consistent and effective agency-wide data practices and policies.\" This new office reflects the goals in the current strategic plan: ", "We will modernize and streamline the FCC's operations and programs to \u2026 reduce regulatory burdens\u2026. A key priority [is to] \u2026 ensure that the FCC's actions and regulations reflect the realities of the current marketplace \u2026 and remove barriers to entry and investment."], "subsections": []}]}, {"section_title": "Concluding Observations", "paragraphs": ["As the FCC continues to conduct its business into the future, the changing regulatory philosophies of the FCC chairmen may continue to drive how the FCC defines its long-term, strategic goals. This, in turn, may affect how the agency structures (and restructures) itself and how it decides regulatory questions, including a continued review of net neutrality. Congress may determine that the public interest standard should remain more static, rather than fluctuating dramatically depending on the regulatory philosophy of the chairman. No legislation on this topic has been introduced in Congress, signaling to some observers that it intends to continue allowing the FCC to define it. "], "subsections": [{"section_title": "Appendix. FCC-Related Congressional Activity\u2014115th Congress", "paragraphs": [" Table A-1 . Senate and House hearings in the 115 th Congress regarding the operation of the FCC are detailed in Table A-2 and Table A-3 , respectively. Links to individual hearing pages are included in these tables."], "subsections": []}]}]}}
{"id": "RS22907", "title": "Cluster Munitions: Background and Issues for Congress", "released_date": "2019-02-22T00:00:00", "summary": ["Cluster munitions are air-dropped or ground-launched weapons that release a number of smaller submunitions intended to kill enemy personnel or destroy vehicles. Cluster munitions were developed in World War II and are part of many nations' weapons stockpiles. Cluster munitions have been used frequently in combat, including the early phases of the current conflicts in Iraq and Afghanistan. Cluster munitions have been highly criticized internationally for causing a significant number of civilian deaths, and efforts have been undertaken to ban and regulate their use. The Department of Defense (DOD) continues to view cluster munitions as a military necessity but in 2008 instituted a policy to reduce the failure rate of cluster munitions to 1% or less after 2018.", "In November 2017, a new DOD policy was issued that essentially reversed the 2008 policy. Under the new policy, combatant commanders can use cluster munitions that do not meet the 1% or less unexploded submunitions standard in extreme situations to meet immediate warfighting demands. In addition, the new policy does not establish a deadline to replace cluster munitions exceeding the 1% rate and states that DOD \"will retain cluster munitions currently in active inventories until the capabilities they provide are replaced with enhanced and more reliable munitions.\"", "Potential issues for Congress include cluster munitions in an era of precision weapons, other weapons in lieu of cluster munitions, and the potential impact of DOD's 2017 revised cluster munitions policy."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "What Are Cluster Munitions?1", "paragraphs": ["Cluster munitions are weapons that open in mid-air and disperse smaller submunitions\u2014anywhere from a few dozen to hundreds\u2014into an area. They can be delivered by aircraft or from ground systems such as artillery, rockets, and missiles. Cluster munitions are valued militarily because one munition can kill or destroy many targets within its impact area, and fewer weapons systems are needed to deliver fewer munitions to attack multiple targets. Cluster munitions also permit a smaller force to engage a larger adversary and are considered by some an \"economy of force\" weapon. Many cluster munitions rely on simple mechanical fuzes that arm the submunition based on its rate of spin and explode on impact or after a time delay. A newer generation of sensor-fuzed submunitions is being introduced by a number of nations to improve the munitions' and submunitions' accuracy and to reduce the large number of residual unexploded submunitions. These sensor-fuzed submunitions are designed to sense and destroy vehicles without creating an extensive hazard area of unexploded submunitions."], "subsections": []}, {"section_title": "History2", "paragraphs": ["Cluster bombs were first used in World War II, and inclusive of their debut, cluster munitions have been used in at least 21 states by at least 13 different countries. Cluster munitions were used extensively in Southeast Asia by the United States in the 1960s and 1970s, and the International Committee of the Red Cross (ICRC) estimates that in Laos alone, 9 million to 27 million unexploded submunitions remained after the conflict, resulting in over 10,000 civilian casualties to date. Cluster munitions were used by the Soviets in Afghanistan, by the British in the Falklands, by the Coalition in the Gulf War, and by the warring factions in Yugoslavia. In Kosovo and Yugoslavia in 1999, NATO forces dropped 1,765 cluster bombs containing approximately 295,000 submunitions. From 2001 through 2002, the United States dropped 1,228 cluster bombs containing 248,056 submunitions in Afghanistan, and U.S. and British forces used almost 13,000 cluster munitions containing an estimated 1.8 million to 2 million submunitions during the first three weeks of combat in Iraq in 2003. Senior U.S. government officials have stated that the United States has not used cluster munitions since 2003, during the intervention in Iraq. It is widely believed that confusion over U.S. cluster submunitions (BLU-97/B) that were the same color and size as air-dropped humanitarian food packets played a major role in the U.S. decision to suspend cluster munitions use in Afghanistan but not before using them in Iraq.", "In 2006, Israeli use of cluster munitions against Hezbollah forces in Lebanon resulted in widespread international criticism. Israel was said to have fired significant quantities of cluster munitions\u2014primarily during the last 3 days of the 34-day war after a U.N. cease-fire deal had been agreed to \u2014resulting in almost 1 million unexploded cluster bomblets to which the U.N. attributed 14 deaths during the conflict. Reports maintain that Hezbollah fired about 113 \"cluster rockets\" at northern Israel and, in turn, Israel's use of cluster munitions supposedly affected 26% of southern Lebanon's arable land and contaminated about 13 square miles with unexploded submunitions. One report states that there was a failure rate of upward of 70% of Israel's cluster weapons."], "subsections": []}, {"section_title": "Cluster Munitions Criticisms", "paragraphs": ["The fundamental criticisms of cluster munitions are that they disperse large numbers of submunitions imprecisely over an extended area, that they frequently fail to detonate and are difficult to detect, and that submunitions can remain explosive hazards for decades. Civilian casualties are primarily caused by munitions being fired into areas where soldiers and civilians are intermixed, inaccurate cluster munitions landing in populated areas, or civilians traversing areas where cluster munitions have been employed but failed to explode. Two technical characteristics of submunitions\u2014failure rate and lack of a self-destruct capability\u2014have received a great deal of attention."], "subsections": [{"section_title": "Failure Rate8", "paragraphs": ["There appear to be significant discrepancies among failure rate estimates. Some manufacturers claim a submunition failure rate of 2% to 5%, whereas mine clearance specialists have frequently reported failure rates of 10% to 30%. A number of factors influence submunition reliability. These include delivery technique, age of the submunition, air temperature, landing in soft or muddy ground, getting caught in trees and vegetation, and submunitions being damaged after dispersal, or landing in such a manner that their impact fuzes fail to initiate."], "subsections": []}, {"section_title": "Lack of Self-Destruct Capability", "paragraphs": ["Submunitions lacking a self-destruct capability\u2014referred to as \"dumb\" munitions\u2014are of particular concern because they can remain a hazard for decades, thereby increasing the potential for civilian casualties. Some nations are developing \"smart\" or sensor-fuzed weapons with greater reliability and a variety of self-destruct mechanisms intended to address the residual hazard of submunitions. Experts maintain that self-destruct features reduce\u2014but do not eliminate\u2014the unexploded ordnance problem caused by cluster munitions and that the advantage gained by using \"smart\" cluster munitions is negated when high-failure rate and/or \"dumb\" cluster munitions are used in the same area. For some nations, replacing \"dumb\" and high-failure rate cluster munitions may not be an option\u2014China, Russia, and the Republic of Korea maintain that they cannot afford to replace all current submunitions with \"smart\" submunitions."], "subsections": []}]}, {"section_title": "International Attempts to Regulate Use", "paragraphs": [], "subsections": [{"section_title": "U.N. Convention on Prohibitions or Restrictions on the Use of Certain Conventional Weapons (CCW)", "paragraphs": ["In an effort to restrict or ban specific types of weapons used in armed conflicts, 51 states negotiated the CCW in 1980. When the treaty entered into force in December 1983, it applied only to incendiary weapons, mines and booby-traps, and weapons intended to cause casualties through very small fragments. Since then, some states-parties have added provisions through additional protocols to address other types of weapons. Acting in accordance with the recommendation of a group of experts established during the 2006 CCW review conference, states-parties to the convention decided in 2007 to \"negotiate a proposal to address urgently the humanitarian impact of cluster munitions.\" Negotiations took place in 2008 and 2009, but the parties have not reached agreement on a new proposal. The experts group continued negotiations in 2011 \"informed by\" a Draft Protocol on Cluster Munitions. However, the CCW states-parties were unable to reach agreement on a protocol during their November 2011 review conference."], "subsections": []}, {"section_title": "Convention on Cluster Munitions (CCM)15", "paragraphs": ["Described as \"frustrated with the CCW process,\" a number of CCW members\u2014led by Norway\u2014initiated negotiations in 2007 outside of the CCW to ban cluster munitions. On May 30, 2008, they reached an agreement to ban cluster munitions. The United States, Russia, China, Israel, Egypt, India, and Pakistan did not participate in the talks or sign the agreement. During the Signing Conference in Oslo on December 3-4, 2008, 94 states signed the convention and 4 of the signatories ratified the convention at the same time. China, Russia, and the United States did not sign the convention, but France, Germany, and the United Kingdom were among the 18 NATO members to do so. The convention was to enter into force six months after the deposit of the 30 th ratification. The United Nations received the 30 th ratification on February 16, 2010, and the convention entered into force on August 1, 2010. As of January 2, 2019, 105 states were party to the convention.", "The Convention on Cluster Munitions (CCM), inter alia, bans the use of cluster munitions, as well as their development, production, acquisition, transfer, and stockpiling. The convention does not prohibit cluster munitions that can detect and engage a single target or explosive submunitions equipped with an electronic self-destruction or self-deactivating feature \u2014an exemption that seemingly permits sensor-fuzed or \"smart\" cluster submunitions. U.S. officials were concerned that early versions of the CCM would prevent military forces from non-states-parties from providing humanitarian and peacekeeping support and significantly affect NATO military operations, but the version signed May 30, 2008, does permit states-parties to engage in military cooperation and operations with non-states-parties (Article 21, Paragraph 3)."], "subsections": []}]}, {"section_title": "U.S. Policy on Cluster Munitions", "paragraphs": ["Then-Acting Assistant Secretary for Political-Military Affairs Stephen Mull stated in May 2008 that the United States relies on cluster munitions \"as an important part of our own defense strategy,\" and that Washington's preferred alternative to a ban is \"to pursue technological fixes that will make sure that these weapons are no longer viable once the conflict is over.\" U.S. officials note that", "Cluster munitions are available for use by every combat aircraft in the U.S. inventory, they are integral to every Army or Marine maneuver element and in some cases constitute up to 50 percent of tactical indirect fire support. U.S. forces simply can not fight by design or by doctrine without holding out at least the possibility of using cluster munitions.", "The United States also maintains that using cluster munitions reduces the number of aircraft and artillery systems needed to support military operations, and that if cluster munitions were eliminated, significantly more money would need to be spent on new weapons systems, ammunition, and logistical resources. Officials further suggest that if cluster munitions were eliminated, most militaries would increase their use of massed artillery and rocket barrages, which would likely increase destruction of key infrastructure. Then-Department of State Legal Adviser Harold Koh stated November 9, 2009, that the United States has determined that its \"national security interests cannot be fully ensured consistent with the terms\" of the CCM."], "subsections": [{"section_title": "2008 Department of Defense (DOD) Policy on Cluster Munitions25", "paragraphs": ["The Barack Obama Administration announced on November 25, 2011, that the United States would continue to implement the DOD policy on cluster munitions issued June 19, 2008, which recognized the need to minimize harm to civilians and infrastructure but also reaffirmed that \"cluster munitions are legitimate weapons with clear military utility.\" The central directive in the Pentagon's policy was the unwaiverable requirement that cluster munitions used after 2018 must leave less than 1% of unexploded submunitions on the battlefield. Prior to that deadline, U.S. use of cluster munitions that did not meet this criterion required combatant commander approval. "], "subsections": []}, {"section_title": "Revised 2017 DOD Policy on Cluster Munitions", "paragraphs": ["On November 30, 2017, then-Deputy Secretary of Defense Patrick Shanahan issued a revised policy on cluster munitions. The memorandum describing the policy noted that", "[c]luster munitions provide the Joint Force with an effective and necessary capability to engage area targets, including massed formations of enemy forces, individual targets dispersed over a defined area, targets whose precise location are not known, and time-sensitive or moving targets. Cluster munitions are legitimate weapons with clear military utility, as they provide distinct advantages against a range of threats in the operating environment. Additionally, the use of cluster munitions may result in less collateral damage than the collateral damage that results from use of unitary munitions alone.", "Since the inception of the 2008 policy, in the midst of extended combat operations in Iraq and Afghanistan, we have witnessed important changes in the global security environment and experienced several years of budgets that under-invested in replacement systems and the modernization of the Joint Force more broadly. Our adversaries and our potential adversaries have developed advanced capabilities and operational approaches specifically designed to limit our ability to project power.", "Both Shanahan and Admiral Harry Harris Jr. have also argued that sustaining the current U.S. cluster munitions arsenal is necessary to prepare for a potential conflict with North Korea.", "The revised policy reverses the 2008 policy that established an unwaiverable requirement that cluster munitions used after 2018 must leave less than 1% of unexploded submunitions on the battlefield. Combatant commanders can use cluster munitions that do not meet the 1% or less unexploded submunitions standard in extreme situations to meet immediate warfighting demands. Furthermore, the new policy does not establish a deadline to replace cluster munitions exceeding the 1% rate, and these munitions will be removed only after new munitions that meet the 1% or less unexploded submunitions standard are fielded in sufficient quantities to meet combatant commander requirements. However, the new DOD policy stipulates that the department \"will only procure cluster munitions containing submunitions or submunition warheads\" meeting the 2008 UXO requirement or possessing \"advanced features to minimize the risks posed by unexploded submunitions.\"", "Specifically, DOD's revised policy stipulates the following:", "Continuing or beginning with their respective FY2019 budgets, the military departments will program for capabilities to replace cluster munitions currently in active inventories that do not meet the above-described standards for procuring new cluster munitions. The department's annual Program and Budget Review will be used to assess the sufficiency of the replacement efforts. The department's operational planners should plan for the availability of cluster munitions. The approval authority to employ cluster munitions that do not meet the standards prescribed by this policy for procuring new cluster munitions, however, rests with the combatant commanders. In accordance with their existing authorities, commanders may use cluster munitions that meet the standards prescribed by this policy for procuring new cluster munitions. The military departments and combatant commands, in keeping with U.S. legal obligations under CCW Protocol V on Explosive Remnants of War and consistent with past practices, will continue to record and retain information on the use of cluster munitions and provide relevant information to facilitate the removal or destruction of unexploded submunitions. The military departments and combatant commands will maintain sufficient inventories and a robust stockpile surveillance program to ensure operational quality and reliability of cluster munitions. In extremis, to meet immediate warfighting demand, combatant commanders may accept transfers of cluster munitions that do not meet the above-described cluster-munition procurement standards. Cluster munitions that do not meet the standards prescribed by this policy for procuring new cluster munitions will be removed from active inventories and demilitarized after their capabilities have been replaced by sufficient quantities of munitions that meet the standards in this policy. The department will not transfer cluster munitions except as provided for under U.S. law. The operational use of cluster munitions that include Anti-Personnel Landmines (APL) submunitions shall comply with presidential policy.", "Furthermore, the Deputy Secretary of Defense", "Expect(s) the Department to achieve the goals in this policy as rapidly as industry can support. Combatant Commanders will continue to ensure that the employment of cluster munitions is consistent with the law of war and applicable international agreements in order to minimize their harmful effects on civilian populations and infrastructure.", "In developing a new generation of cluster munitions less dangerous to civilians, DOD will need to determine whether such a high level of performance is achievable under both controlled laboratory conditions and real-world conditions. Factors such as delivery technique, landing in soft or muddy ground, getting caught in trees and vegetation, and submunitions being damaged after dispersal or landing could result in an appreciable number of dud submunitions, even if they have a self-deactivation feature."], "subsections": []}]}, {"section_title": "DOD Efforts to Reduce Unexploded Ordnance Rates for Its Cluster Munitions", "paragraphs": ["DOD and the services have been and are currently involved in efforts to reduce cluster munitions failure rates. The Army's Alternative Warhead Program (AWP) is intended to assess and recommend new technologies to reduce or eliminate cluster munitions failure rates. The AWP program is viewed as particularly relevant, as the Pentagon estimates that \"upward of 80 percent of U.S. cluster munitions reside in the Army artillery stockpile.\" In December 2008, the Army decided to cease procurement of a Guided Multiple Launch Rocket System (GMLRS) warhead\u2014the Dual-Purpose Improved Conventional Munition (DPICM) warhead\u2014because its submunitions had a dud rate up to 5%. The Air Force has also acquired cluster munitions that comply with the less than 1% failure rate\u2014the CBU-97 Sensor Fuzed Weapon (SFW) and the CBU-105 WCMD/SFW. ", "While DOD's new 2017 cluster munitions policy calls for DOD to continue its efforts to meet the 1% or less unexploded submunitions standard \"as rapidly as industry can support,\" it is not yet known how this policy will affect the aforementioned programs or how it could result in the establishment of new programs. "], "subsections": []}, {"section_title": "Potential Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "Cluster Munitions in an Era of Precision Weapons", "paragraphs": ["It may be argued that even with advances in \"sensor-fuzed\" type submunitions that seek out and destroy certain targets, cluster munitions are still essentially an indiscriminate area weapon in an era where precision weapons are increasingly becoming the military norm. In Operation Desert Storm in 1991, only about 10% of ordnance used were precision-guided, but by the time of the Iraq invasion in 2003, \"the ratio of 'smart' to dumb weapons was nearly reversed.\" Since then, this trend toward greater precision has continued, if not accelerated with the development of precision rocket, artillery, mortar munitions, and smaller precision aerial bombs designed to reduce collateral damage. Given current and predicted future precision weaponry trends, cluster munitions might be losing their military relevance\u2014much as chemical weapons did between World War I and World War II."], "subsections": []}, {"section_title": "Other Weapons in Lieu of Cluster Munitions", "paragraphs": ["According to the State Department, the U.S. military suspended its use of cluster munitions in Iraq and Afghanistan in 2003. For subsequent military operations, where cluster munitions would otherwise have been the weapon of choice, Congress might review what types of weapons were substituted in place of cluster munitions and how effective they were in achieving the desired tactical results. Also worth considering are effects-based weapons systems and operations, which seek to achieve the same or similar effect against a potential target without applying a \"kinetic solution\" such as a cluster munition. Such insights could prove valuable in analyzing U.S. policy options on the future of cluster munitions."], "subsections": []}, {"section_title": "What Is the Impact of DOD's 2017 Revised Cluster Munitions Policy?", "paragraphs": ["DOD's November 2017 revised policy on cluster munitions potentially raises a number of issues for possible congressional consideration. With limits on cluster munition use after 2018 rescinded, how does this affect combatant commanders' operational plans in their respective theaters? Does this mean a lesser degree of military risk because combatant commanders can employ cluster munitions to meet warfighting demands, possibly translating into fewer forces needed to achieve the same result when the 2008 policy was in effect? Despite DOD emphasis on achieving a 1% or less unexploded submunitions standard \"as rapidly as industry can support,\" will DOD funding restrictions slow or stall programs previously intended to replace those systems that exceeded 1% because there no longer is an urgent operational need to replace those systems? In a similar manner, will defense industry view this as a renewed opportunity to develop systems with a 1% or less unexploded submunitions standard or take a more sanguine view that since DOD is no longer time constrained to develop and field 1% or less weapons that funding these programs will be less of a priority and, therefore, an unprofitable venture? Another possible issue for consideration is how this U.S. policy reversal on the military use of cluster munitions will be perceived by the international community and how this might affect future U.S. and international military treaty initiatives."], "subsections": []}]}, {"section_title": "Selected Legislation", "paragraphs": ["Consolidated Appropriations Acts ", "The Consolidated Appropriations Act, 2010 ( P.L. 111-117 ), which the President signed into law December 16, 2009, prohibits the provision of military assistance for cluster munitions, the issuing of defense export licenses for cluster munitions, or the sale or transfer of cluster munitions or cluster munitions technology unless \"the submunitions of the cluster munitions, after arming, do not result in more than 1 percent unexploded ordnance across the range of intended operational environments.\" Moreover, any agreement \"applicable to the assistance, transfer, or sale of such cluster munitions or cluster munitions technology\" must specify that the munitions \"will only be used against clearly defined military targets and will not be used where civilians are known to be present or in areas normally inhabited by civilians.\" Subsequent appropriations laws have included similar provisions; the most recent is the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), which the President signed into law on February 15, 2019. "], "subsections": []}]}}
{"id": "R45720", "title": "United States Foreign Intelligence Relationships: Background, Policy and Legal Authorities, Risks, Benefits", "released_date": "2019-05-15T00:00:00", "summary": ["From its inception, the United States Intelligence Community (IC) has relied on close relations with foreign partners. These relationships often reflect mutual security interests and the trust each side has of the other's credibility and professionalism. They are generally strategic and cover a range of national security priorities involving national defense, emerging threats, counterterrorism, counter-proliferation, treaty compliance, cybersecurity, economic and financial security, counter-narcotics, and piracy.", "U.S. intelligence relations with foreign counterparts offer a number of benefits: indications and warning of an attack, expanded geographic coverage, corroboration of national sources, accelerated access to a contingency area, and a diplomatic backchannel. They also present risks of compromise due to poor security, espionage, geopolitical turmoil, manipulation to influence policy, incomplete vetting of foreign sources, over-reliance on a foreign partner's intelligence capabilities, and concern over a partner's potentially illegal or unethical tradecraft. Because intelligence failures involving a foreign partner sometimes become public, the risks to the IC of cooperating with a foreign intelligence service are more easily understood. Nevertheless, the persistent cultivation of intelligence relations with foreign partners suggests that the IC remains confident that the benefits outweigh the risks.", "These benefits are not always widely recognized due to their sensitivity and the potential for compromising the scope and details of what amounts to intelligence collection. The best known of these intelligence relationships are the decades-long ties to America's closest allies, who have shared history, values, and similar perspectives on national security threats. Such ties are often one component of a broader security cooperation arrangement. Less well known are liaison relationships with U.S. adversaries over a particular issue of mutual concern, or relations with non-state foreign intelligence organizations such as Kurdish groups. Regardless of the partner, the U.S. Intelligence Community's aim is to enhance national intelligence resources and capabilities and to further U.S. national security by better understanding the threat environment and thereby enabling informed strategic planning, better policy decisions, and successful military operations. Thus, U.S. foreign intelligence relationships can be an overlooked component of public discussion of various aspects of international cooperation.", "Foreign intelligence agencies with ties to U.S. intelligence have often escaped the reach of congressional oversight. Yet Congress, at various times, has been interested in both the benefits and the risks of foreign intelligence relationships to U.S. national security. While sometimes extolling the value intelligence foreign partners can provide, Congress has also been critical of occasions when the IC has become too dependent on such partners at the expense of IC investment in its own intelligence capabilities. Congress has also been concerned with the IC's ability to independently assess the credibility of foreign intelligence sources, as well as the vulnerability of a foreign intelligence partner's telecommunications infrastructure to compromise by a hostile foreign intelligence service. Of particular sensitivity to Congress has been the poor record of human rights by certain foreign intelligence agencies and the potential for foreign intelligence partners to collect and share with the United States information on U.S. persons.", "This report uses publicly available, unclassified sources as the basis of its research, and does not reference information in the public domain that was unlawfully disclosed."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["U.S. foreign intelligence relations are a component of U.S. international relations that involve cooperation between a U.S. and a foreign state or non-state intelligence service over an area of mutual interest. This cooperation may include simple liaison to discuss or exchange information, raw data, or finished intelligence. Intelligence liaison leverages the relative strengths of the interested intelligence services to provide tactical, operational, or strategic insight and perspective to provide warning of attack, corroboration of national sources, or additional, possibly unique, intelligence that the other service lacks. Other forms of cooperation include basing rights to enhance the range of U.S. collection coverage, joint operations and collection from the sovereign territory of a foreign state, and training to improve the capacity and professionalism of a foreign intelligence service. In areas of the world where the U.S. Intelligence Community (IC) has few national intelligence assets, cooperative relations with a foreign intelligence service based in the region can effectively increase the range of U.S. intelligence coverage by using the partner's source network and linguistic, political, and cultural expertise. Although the Director of National Intelligence (DNI) provides the policy and criteria, and conducts oversight for all IC element intelligence relationships with foreign intelligence services, the IC elements themselves have the statutory authority to enter into agreements with foreign counterparts. Normally every relationship is formalized through a memorandum of understanding (MOU) or other written agreement. ", "This report provides a historic perspective of traditional and nontraditional foreign intelligence partnerships with the U.S. It also discusses their risks and benefits in the context of the broader public discussion over the sorts of relationships the United States should have with various actors in the international community. In many\u2014but not all\u2014instances, intelligence relations with a foreign partner may be viewed as an approximate reflection of the strategic condition of the relationship between the U.S. and that partner generally. They indicate shared interests and a degree of trust in the professional ability of the partner to provide credible intelligence while protecting sources and maintaining security about the nature and extent of the relationship. In discussing risk, this report emphasizes the risk to the United States. However, foreign partners also bear risk (e.g., relying too heavily on U.S. intelligence, or having their sensitive sources compromised).", "Congress has a vested interest in understanding the nature and scope of the IC's relations with foreign intelligence services. Congress has expressed both confidence in the value of these relationships and reservations. When the IC reduced national intelligence collection resources in the 1970s and the 1990s and the IC became heavily dependent upon intelligence obtained from foreign partners, Congress intervened to rebalance national intelligence collection with collection from foreign partners. Congress was also critical of deficiencies in the IC's ability to assess independently the credibility of foreign intelligence sources, one of whom fabricated reporting on Iraqi weapons of mass destruction, one reason cited by the Bush Administration for invading Iraq in 2003. Most recently, Congress has expressed interest in the vulnerability of foreign intelligence partners' telecommunications technology to penetration by hostile intelligence services. "], "subsections": []}, {"section_title": "Background and Historical Context", "paragraphs": ["The United States has cultivated intelligence liaison relations with foreign partners through (1) the exchange of information, raw data, or finished intelligence; (2) basing rights for conducting intelligence operations, or privileges to host technical intelligence equipment; (3) burden sharing in the collection and reporting on issues of mutual interest; (4) joint covert action, collection, or exploitation operations; and (5) training. Most are bilateral. The relationship with the United Kingdom is among the oldest and the best known. The IC also has multilateral relationships, with NATO member states, Five Eyes partners (United States, United Kingdom, Canada, Australia, and New Zealand), and the intelligence organizations supporting coalition partners in operational theaters such as Iraq and Afghanistan. ", "U.S. IC relationships with foreign intelligence partners have developed in parallel with global IC coverage, as well as the growing number of interests the U.S. shares with foreign partners; it is also generally recognized that intelligence partnerships can provide mutual benefits for national security. IC foreign partnerships have developed as consequences of the most pressing challenges for U.S. national security over the past century: two world wars, the Cold War, and post-9/11 counter-terrorism operations. Although the U.S. has periodically shared intelligence with adversaries involving a narrow range of mutual interests, this type of exchange represents the exception to the norm. More typically, most intelligence sharing takes place with allied countries or U.S. affiliated non-state actors within relationships that have been shaped by decades of shared experience in war and peace. U.S. intelligence exchange relationships with foreign partners, therefore, often reflect the high level of trust and professional confidence the U.S. IC places in partnerships with particular foreign allies' intelligence services, involving a broad range of overlapping national security, political, and economic interests. A fundamental assumption, supported by decades of experience, is that building and maintaining these partnerships enhances U.S. national security by providing some benefit that the U.S. would otherwise lack: access to otherwise inaccessible or hostile targets, corroboration of sources, cultural or linguistic expertise, the capacity to conduct joint assessments, providing indications and warning of an attack, obtaining basing rights, or jointly planning and conducting covert operations or intelligence collection. "], "subsections": [{"section_title": "Early Years", "paragraphs": ["The earliest efforts by the United States to formally cooperate with foreign partners in intelligence took place during World War I, when the British and French provided training, advice, and tactical intelligence exchanges with the American Expeditionary Force (AEF) under General John Pershing. At the time, the United States had only an incipient intelligence capability. The British, in contrast, had had a national intelligence service since 1909 when the Secret Service Bureau was established to address growing concerns about a perceived threat posed by imperial Germany.", "The United States forged closer intelligence ties with allied governments in the years leading up to World War II and during the war itself. The UK and U.S. navies began sharing naval intelligence in the 1930s. The first formal arrangement, involving signals intelligence, was reached in October 1942 when the U.S. Navy and British Government Code and Cypher School (GC & CS) at Bletchley Park signed the Holden Agreement. That agreement enabled collaboration on Japanese, German, and Italian signals intelligence targets that included a division of labor between each side for more streamlined, integrated technical collection and analysis. The British-U.S. communication intelligence agreement (BRUSA Agreement) signed in 1943 between GC & CS and the U.S. War Department\u2014representing the Army as well as the Navy signals intelligence capabilities\u2014superseded the Holden Agreement. This agreement also provided for a division of labor similar to the Holden Agreement, whereby the United States had responsibility for collection of signals intelligence targeting the Japanese (an operation called Magic), and the British had responsibility for collection of signals intelligence on German and Italian targets (referred to as Ultra). This collaboration proved pivotal in the Allies establishing information dominance during the war."], "subsections": []}, {"section_title": "Cold War", "paragraphs": ["Shared interests during the Cold War influenced the next period in the evolution of U.S. foreign intelligence partnerships. U.S. intelligence relations with traditional allies solidified as one of multiple areas of security cooperation based on a shared perception of the threat posed by the Soviet Union. The UKUSA Agreement of March 1946 superseded the BRUSA Agreement and other U.S.-UK signals intelligence agreements from WWII that had focused exclusively on targeting the Axis powers. The UKUSA Agreement added the State Department, the Army, and Navy on the U.S. side of the board overseeing the partnership. The agreement provided for an expanded exchange of signals intelligence-related products and services concerning targets involving \"any country \u2026 excluding only the U.S., the British Commonwealth of Nations, and the British Empire.\" Canada, Australia, and New Zealand were formally included as \"collaborating\" partners in the late 1940s and early 1950s. Subsequently, in a separate agreement, the United States and United Kingdom formally established standards for the protection of classified information involved in exchanges. ", "Before the establishment of the Office of Strategic Services (OSS) in 1942 with the encouragement and assistance of the United Kingdom, the United States had no foreign intelligence collection or covert action capability to compare to the capabilities of Britain's Secret Intelligence Service (MI6). The WWII experience of OSS personnel and the investment the United States made in national intelligence (including establishing the CIA in 1947), enabled the U.S. to influence the organization and development of other nations' intelligence agencies; these agencies have since become close bilateral partners. ", "One example is the establishment of the West German Federal Intelligence Service, the Bundesnachrichtendienst (BND). In 1946 the former head of the eastern branch of the Nazi German intelligence, Reinhard Gehlen, who was responsible for intelligence targeting the Soviet Union, negotiated terms for establishing an intelligence organization in occupied postwar Germany with the United States. During the war, Gehlen had developed extensive agent networks, and had later copied and concealed for safekeeping voluminous amounts of intelligence on the Soviet Union that he knew would be valuable to the United States. Using this leverage, Gehlen, following his surrender, was able to obtain U.S. support for an autonomous German intelligence organization for collecting and analyzing intelligence on the Soviet Union and other communist states that would become part of a reconstituted German government. The Gehlen Organization, as it was known, became the BND in 1956 and has remained a close, albeit independent, partner of the United States IC. ", "Similarly, the United States was influential in the early years of the Mossad, Israel's human intelligence agency. The Mossad, like the Gehlen organization, provided the United States a means to acquire information on the Soviet Union that the United States could not otherwise collect through national sources, as Israel was able to draw upon its eastern European \u00e9migr\u00e9 population's extensive contacts in the Soviet Union. The CIA, in turn, was able to offer training to Mossad agents. ", "U.S. relations with the intelligence organizations of Japan, Egypt, pre-revolutionary Iran, Saudi Arabia, and Pakistan were also influenced by mutual concern over the threat from the Soviet Union. The Soviet invasion of Afghanistan in 1979, in particular, contributed to the CIA's forming closer ties to Saudi Arabia's General Intelligence Directorate (GID) and Pakistan's Inter-Services Intelligence (ISI) agency in an effort to provide funding and other covert assistance to the Mujahideen."], "subsections": []}, {"section_title": "Post-Cold War", "paragraphs": ["After the Cold War, former communist countries that had long been allied with the Soviet Union became NATO allies and intelligence partners of the United States (i.e., Poland, Hungary, Czechoslovakia (now the Czech Republic and Slovakia), Bulgaria, Romania, and the Baltic states of Estonia, Latvia, and Lithuania). Initially, there was some ambivalence about these new partnerships. On one hand, the history of Soviet influence over Warsaw Pact intelligence organizations suggested the reconstituted intelligence agencies of the eastern European NATO states could pose a counterintelligence risk of Russian penetration and result in greater restraint in intelligence sharing. On the other hand, by virtue of these services' extensive experience with the Soviets Union, they might prove more capable of providing for themselves protections against Russian penetration. These services offered not only a presumable wealth of perspective on and access to post-communist Russia, but also support for the U.S. in other areas of the world where they had had operational experience, extensive contacts, or were commitment to supporting NATO or U.S.-led military coalition operations. In some cases (e.g., the Polish presence in Iraq), part of the motivation may have been simply to gain western or NATO experience and prove their worth as a reliable ally and intelligence partner. ", "In the aftermath of the terrorist attacks of 9/11, the U.S. IC expanded its foreign intelligence liaison relationships as a major component of counterterrorist strategy. Working with intelligence partners in the war on terror is broadly viewed as essential to protecting the U.S. homeland and the allied states who share western values that make them attractive targets for al Qa'ida, and the so-called Islamic State. These relationships include nontraditional partners, in addition to allies: non-state organizations (such as Kurdish groups in northern Iraq and Syria) and traditional adversaries such as Russia. The CIA has solidified many of these partnerships through the establishment of a network of Counterterrorist Intelligence Centers (CTIC) around the world to facilitate sharing intelligence on terrorism, such as indications and warning of an attack, with a host-nation government to effect the killing or capture of high-value targets. The Counterterrorist Center (CTC) at CIA headquarters manages the CTICs overseas. The National Security Agency (NSA) is also represented in the CTICs, underscoring the importance of signals intelligence (and the corresponding foreign partnerships) to counterterrorist operations. Simultaneously, the U.S. IC has found that nontraditional partners remain loyal to their own interests and internal dynamics despite heavy inducement by the U.S. While these partnerships have proven valuable in certain circumstances, they are not all completely beneficial to the U.S.", "Each period in the evolution of U.S. intelligence relations with foreign partners\u2014Pre-World War II, World War II, the Cold War, Post-Cold war \u2014has enabled the United States to strengthen ties to traditional allies, while presenting challenges from necessary yet incompletely reliable partners. The post-Cold War has been marked by a concerted effort to forge or strengthen ties with allies old and new, and to expand the scope of counterterrorism coverage by initiating or increasing the frequency of intelligence exchanges with nontraditional intelligence partners. "], "subsections": []}]}, {"section_title": "Policy and Legal Authorities", "paragraphs": ["Policy and authorities for initiating and managing ties between the IC and foreign intelligence services, and specifying the roles and responsibilities of personnel supporting these relationships, are found in statute, executive orders, and intelligence directives.", "Intelligence Community Directive (ICD)-403, Foreign Disclosure and Release of Classified National Intelligence, states U.S. Government policy on disclosure of U.S. intelligence to foreign state or non-state intelligence entities:", "U.S. intelligence is a national asset to be conserved and protected and will be shared with foreign entities only when consistent with U.S. national security and foreign policy objectives and when an identifiable benefit can be expected to accrue to the U.S. It is the policy of the U.S. Government to share intelligence with foreign governments whenever it is consistent with U.S. law and clearly in the national interest to do so, and when it is intended for a specific purpose and general limited in duration.", "ICD-403 also requires that determinations to disclose or release U.S. intelligence should take into account the professional ability of a foreign intelligence service to protect the classified intelligence from subsequent compromise posing a risk to U.S. national security. However,", "In exceptional cases, there may be a benefit to U.S. interests to disclose or release intelligence to foreign entities under conditions where the recipient's safeguards are likely to be inadequate. In such cases, the anticipated benefits must outweigh the potential damage of a likely compromise.", "Intelligence Community Policy Guidance 403.1 (ICPG-403.1) further expounds policy in ICD-403 by providing criteria for disclosing or releasing classified intelligence to a foreign intelligence entity. Its guidance pertains to classified U.S. intelligence only, which does not include other classified information , such as defense, military, or diplomatic information that is not intelligence. Disclosure or release of classified intelligence is appropriate when it:", "is consistent with U.S. foreign policy and national security objectives; can be expected to result in an identifiable, commensurate benefit to the U.S.; supports a U.S. diplomatic, political, economic, military, or security policy or treaties; and aids U.S. intelligence or counterintelligence activities. An intelligence sharing agreement is often formalized in a memorandum of understanding (MOU) between the U.S. IC element and its foreign intelligence counterpart. There are hundreds of these agreements between the IC and foreign intelligence services. They are not legally binding and are generally classified. This can present challenges for congressional oversight. As one observer of the Intelligence Community remarked, \"The near invisibility of liaison arrangements to oversight by elected officials is problematic. Oversight mechanisms have not kept pace with global issues.\" For military exchanges that include other types of classified information as well as intelligence, the Department of Defense (DOD) uses General Security of Military Information Agreements (GSOMIA) that detail the level of classification for the exchange and the categories of information that can be exchanged. Whether an MOU or GSOMIA, these agreements provide formal frameworks for intelligence relationships that can be fundamental to broader security relationships (legal enforceability notwithstanding). "], "subsections": [{"section_title": "Roles and Responsibilities", "paragraphs": ["The DNI has the statutory authority to \"oversee the coordination between elements of the Intelligence Community and the intelligence or security services of foreign governments or international organizations on all matters involving intelligence related to the national security or involving intelligence acquired through clandestine means.\" Assistant DNI for Partner Engagement (ADNI/PE) supports the DNI in carrying out his/her statutory responsibilities, which include:", "Entering into intelligence and counterintelligence arrangements with foreign governments and international organizations; Formulating policies concerning these arrangements; Aligning and synchronizing foreign intelligence and counterintelligence relationships among IC elements \"to further United States national security, policy, and intelligence objectives;\" Establishing, with the concurrence of departments and agencies concerned, joint procedures to coordinate and synchronize intelligence activities conducted by an IC element or funded by the National Intelligence Program (NIP), with activities that involve foreign intelligence and security services.", "The Director of the CIA (D/CIA) is responsible for implementing the DNI's foreign intelligence engagement policy and coordinating foreign intelligence relationships. These responsibilities are specified in Executive Order (EO) 12333, United States Intelligence Activities : CIA has the authority \"under the direction and guidance of the DNI \u2026 to coordinate the implementation of intelligence and counterintelligence relationships between elements of the IC and the intelligence or security services of foreign governments or international organizations.\" This authority is reiterated in ICD-310, Coordination of Clandestine Human Source and Human-Enabled Foreign Intelligence Collection and Counterintelligence Activities o utside the United States . ", "Overseas, the U.S. ambassador or Chief of Mission is responsible for \"the direction, coordination, and supervision of all Government executive branch employees\" in a country \u2026 who shall be kept \"fully and currently informed with respect to all activities and operations of the Government within that country.\" In other words, the U.S. ambassador has authority over United States intelligence activities within that country. The actual management of intelligence programs and activities in a U.S. embassy, however, falls to the CIA Chief of Station (COS), who is to ensure the Chief of Mission is kept appropriately informed.", "ICD-402, Director of National Intelligence Representatives , buttresses the CIA's responsibility to coordinate the implementation of policy for the IC's foreign intelligence relationships by assigning to the CIA's Chiefs of Station responsibility as the DNI's representatives in the locations or organizations where they are assigned. In each foreign country, therefore, the COS has day-to-day management and oversight of not only CIA but all liaison relationships by any IC element, with state or non-state foreign intelligence organizations.", "Subject to DNI policy and DCI/COS management and guidance, each element of the IC has the statutory authority to conduct relations with foreign intelligence services particular to the element's capability and operational or analytical focus. The National Security Agency (NSA), for example, has the statutory authority to conduct foreign cryptologic liaison relations; the Defense Intelligence Agency (DIA) and military service intelligence organizations have the authority to conduct defense intelligence liaison relationships with their foreign defense or military intelligence counterparts. ", "ICD-403 specifies the roles and responsibilities of officials making decisions involving the disclosure or release of classified intelligence to a foreign intelligence entity. Each IC element has a Senior Foreign Disclosure and Release Authority (SFDRA), who is a senior official with responsibility for the organization's foreign disclosure and release program. The SFDRA, in turn, designates Foreign Disclosure and Release Officer(s) (FDRO) with the authority to approve or deny requests for disclosure or release of intelligence that originated with that IC element, or coordinate with the FDROs of another organization to request disclosure or release of intelligence that originated with that other IC element and has dissemination control markings. Under ICD-403, the DNI may authorize disclosures or releases of classified intelligence requested by the National Security Council or under circumstances that are not otherwise provided for in policy. The DNI is also the final arbiter in resolving any disputes on what can be disclosed or released. "], "subsections": []}, {"section_title": "Foreign Intelligence Service Collection on U.S. Persons", "paragraphs": ["Among the more sensitive aspects of U.S. relations with any given foreign intelligence partner\u2014and of interest to Congress\u2014are instances of any such partner providing to the IC information on U.S. persons. This may occur unprompted as a result of routine collection or a bulk data transfer, or at the request of the United States, subject to approval by specifically designated, trained individuals. In instances when the United States requests intelligence on U.S. persons from a foreign intelligence service, there must be probable cause to believe that U.S. persons are involved in terrorism, espionage, other illicit activities, or are themselves the target of hostile foreign intelligence services that may threaten U.S. national security. Counterintelligence collected by a foreign intelligence partner (to support its own internal national security) and shared with the United States that includes information on U.S. persons requires special handling. In these instances, the IC must follow the A ttorney General Guidelines for implementing Executive Order (EO) 12333 on properly requesting, obtaining, and handling the information in order to adhere to privacy and civil liberties protections. Information is authorized and handled according to whether it was obtained by standard or special collection techniques. ", "Standard collection techniques involve authorization for an IC element to request, receive, and document routinely acquired information or records on a U.S. person. This can include requests made of a foreign intelligence service for information on U.S. persons abroad that exists in their files, or requests of a foreign intelligence service to use their assets to collect information targeting a U.S. person abroad using standard collection techniqu es . Officials with the authority to authorize standard collection techniques include a Chief of Station, Chief of Installation, or Chief of Base, the Deputy Director of the CIA for Operations (DDO), the Associate Deputy Director of CIA for Operations (ADDO), the Chief or Deputy Chiefs of Operations in a CIA Mission Center, a first, second, or third in command of a DO Division or DO Center, or supervisory personnel who are designed by these officials. ", "Standard collection techniques may also include occasions when an IC element obtains unevaluated bulk data, such as a hard drive, from a foreign intelligence service that may contain information on U.S. persons collected by routine, unexceptional means. In these instances, \"specifically designated officials must document the purpose of the collection activity, how the data was acquired, what steps were taken to limit the collection to the smallest subset containing the information necessary to achieve the purpose of the collection, and further determine how sensitive the acquired data is so that appropriate controls regarding access, querying, and retention may be imposed.\" ", "Special collection techniques are defined as techniques conducted outside the United States targeting a U.S. person that would require a warrant for the same techniques conducted by the FBI inside the United States. They include, for example, physical search, search of nonpublic telephone records, and electronic surveillance. Both the authorization and handling of this kind of information is more restricted than for standard collection techniques . Special collection techniques require exceptional handling as outlined in the A ttorney General Guidelines implementing EO 12333 . For authorization of special collection techniques \u2014including requests for special collection on U.S. persons by a foreign intelligence service\u2014requests must be forwarded through the agency's General Counsel for concurrence and approval by the Director of the CIA or a designee, the U.S. Attorney General, and, where applicable, the Foreign Intelligence Surveillance Court. ", "A foreign intelligence partner may provide to its counterpart(s) in the United States intelligence on U.S. persons acquired by special collection techniques without it being specifically requested by the U.S. counterpart. This would involve occasions where the foreign partner may want to alert U.S. IC or law enforcement officials of serious counterintelligence concerns in the course of a collection activity employing special collection techniques targeting a mutual adversary such as Russia or China. Exceptional handling is required when information is collected by special collection techniques that involves U.S. persons, and subsequently shared with the U.S., whether or not it is specifically requested by the United States."], "subsections": []}]}, {"section_title": "Benefits of Foreign Intelligence Liaison", "paragraphs": ["A former member of the Senate Select Committee on Intelligence remarked recently that foreign intelligence services provide the United States some of its most significant intelligence. Two examples are readily apparent. Following 9/11, then-French President Jacques Chirac directed the French intelligence services (the DGSE and DGSI) to share counterterrorist intelligence with the United States \"as if they were your own service.\" Similarly, on September 12, 2001, the day after the attacks, the senior leadership of the British intelligence services (MI5 and MI6) visited their counterparts in Washington, DC, to offer their assistance. The U.S. IC also benefits from intelligence liaison with traditional adversaries, and non-state actors (e.g., Kurdish organizations), on areas of mutual interest."], "subsections": [{"section_title": "Intelligence and Information Sharing", "paragraphs": ["Intelligence sharing or collaboration can be defined as \"the liaison or collaboration between [intelligence] bodies responsible for the collection, analysis and/or dissemination of information in the field of national security and defense.\" Sharing finished intelligence derived from multiple sources provides less risk of revealing information of any particular source and is thus more typical of many bilateral or multilateral intelligence relationships. The sharing or exchange of raw data or unfinished intelligence takes place either where there is sufficient trust between partners to provide the necessary security from compromise of collection sources and methods (as there is between the U.S. and Five Eyes partners, plus France, Germany, Norway, and Japan, among others), or it can also occur in situations where there is an immediate need to provide perishable information\u2014such as indications and warning of an impending terrorist attack\u2014that may take precedence over the risk of revealing a source. The exchange of intelligence or information among the United States and intelligence partners is a daily occurrence treated with great sensitivity. Intelligence sharing may help to corroborate U.S. national sources in addition to possibly providing unique information. Intelligence and information exchanges may involve secure conferencing, phone calls, or, among the closest partnerships, automated data exchange. Attach\u00e9s belonging to the Defense Attach\u00e9 Service (DAS) of the Department of Defense or attach\u00e9s representing other departments, such as the Departments of Justice and Homeland Security, also regularly conduct exchanges with their host-country counterparts. "], "subsections": [{"section_title": "Indications and Warning (I&W)", "paragraphs": ["Foreign intelligence relationships that provide indications and warning (I&W) of an impending attack or serious threat to the national security of the partner country may take place by means of sharing proprietary intelligence of a partner agency, or collecting intelligence through a joint operation. Among the instances that have become part of the public record are these.", "In 1962, a human intelligence asset of the CIA and British Secret Intelligence Service (SIS, also known as MI6), Soviet GRU Colonel Oleg Penkovsky, provided details of the Soviet nuclear weapons capabilities and nuclear missile sites in Cuba. The information Penkovsky provided during the Cuban Missile Crisis enabled President Kennedy to understand he had three days before the Soviet intermediate range nuclear missiles would be fully operational. It was a warning that the CIA credited as \"altering the course of the Cold War.\" In February 2006, GCHQ (the UK signals intelligence counterpart of the U.S. National Security Agency) shared with the United States information from intercepted communications between two Al Qa'ida operatives in Pakistan and the United Kingdom, respectively, indicating their plans to bomb civilian aircraft. Subsequently, the CIA was able to share this information with Pakistan's Inter-Service Intelligence agency leading to the ISI's apprehension of the lead Al Qa'ida planner. In 2010, Saudi Arabia, once reluctant to share intelligence with the United States on Al Qa'ida, obtained perishable indications of a sophisticated Al Qa'ida plot to attack cargo planes en route to the United States. The Saudis provided the information to U.S., British, German, and Emirati officials who were able to intercept the bombs and prevent the attack. In December 2017, acting on a tip from the CIA, Russia's Federal Security Service (FSB) was able to break up a plot by an Islamic State-linked terrorist cell to bomb Kazan Cathedral and other prominent sites in St. Petersburg, Russia. "], "subsections": []}, {"section_title": "Burden Sharing, Expanded Coverage, and Time-Sensitive Contingency Response", "paragraphs": ["Burden sharing, or a division of labor between the personnel and resources of the IC and foreign intelligence partners, is possible with the most trusted, most capable allied intelligence services. The early collaboration between the United States and United Kingdom during the Second World War, which resulted in the success of the Magic and Ultra operations, has continued to the present day with the integration of personnel and burden sharing or \"divisions of effort\" involving signals intelligence (SIGINT) target areas. The integration is so close that U.S. and British customers/consumers of their products often do not know which country generated the intelligence they are reading/reviewing/consuming. Similarly, U.S. reliance on Japanese signals intelligence coverage of the western Pacific enabled the United States, through receipt of Japanese intercepts of communications between Russian ground controllers and fighter pilots, to pinpoint the cause of the shoot-down of Korean Air Lines Flight 007 in 1983.", "Following the end of the Cold War, the United States embarked on a deliberate strategy to benefit from a perceived peace dividend . This amounted to relying on foreign partners for intelligence coverage of areas of the world where the United States either did not have access or did not want to expend the resources and effort to establish coverage. Foreign intelligence relationships can provide the benefit of second-hand understanding of issues and areas of the world where the United States may lack national intelligence assets. Moreover, since 9/11, the IC has had to rapidly expand its liaison relationships with state and non-state foreign intelligence organizations for time-sensitive contingency support of fluid counterterrorism operations. Yet there is a risk of over-reliance on foreign partnerships, as a joint congressional inquiry found, when they are not balanced by national intelligence capabilities."], "subsections": []}]}, {"section_title": "Joint Intelligence Operations", "paragraphs": ["Joint operations may be conducted when the United States and a foreign partner intelligence service contribute complementary abilities in intelligence collection or covert action to achieve a common objective. For example, one partner may be able to provide access to a source of information, and the other the technical capacity to exploit the information for intelligence value. In 1949, at the beginning of the Cold War, the British Secret Intelligence Service was able to tap the communications cables of the Soviet command center during its post-war occupation of Austria. The CIA joined the operation due to its technical ability to read the enciphered messages that the SIS intercepted. ", "Because of the close link of covert action to national security policy, deliberations over conducting joint covert action operations with a foreign partner may affect U.S. policy decisions and outcomes. In 1953 the British lobbied the Eisenhower Administration for a joint covert action operation that resulted in the overthrow of the elected Iranian government of Prime Minister Mohammad Mosaddegh. Similarly, the British argued against the United States embarking upon covert action in the 1950s to destabilize Soviet bloc governments in Europe. "], "subsections": []}, {"section_title": "Basing Rights/Hosting Equipment", "paragraphs": ["Intelligence relations are often part of broader security arrangements with U.S. partners who may provide privileges to base operational and intelligence personnel and equipment in geographic proximity to both the target area and intelligence personnel and facilities of the allied partner. Host-country partners provide political clearance that enables the United States to establish intelligence facilities, and may also provide various degrees of infrastructure support. This has been true of many close U.S. allies, such as Germany, the United Kingdom, Japan, Italy, Spain, Portugal, and South Korea. Other partners that have provided basing rights have risked more politically in doing so (e.g., Turkey, Pakistan, Iran [under the Shah], Iraq, and Afghanistan). During the Cold War, Pakistan permitted the United States to maintain a signals intelligence site in the country, and permitted the CIA to conduct reconnaissance flights from Pakistani airfields. In Iran, in return for significant amounts of military aid, the Shah's government permitted two U.S. signals intelligence sites in the north of the country that enabled the IC to collect missile telemetry from the Soviet missile test facility at Tyuratam. ", "U.S. intelligence liaison relationships, which expanded significantly after 9/11, included a multilateral facility in France for collaboration on counterterrorist intelligence. Multilateral intelligence sharing\u2014Five Eyes excepted\u2014can sometimes be cited as providing products and services at a level of the least trusted member of the multilateral arrangement. The facility in France, however, which also included representation from the United States, United Kingdom, Canada, Germany, and Australia, underscored the significant level of cooperation by the French in orchestrating counterterrorist collaboration among allied intelligence services to successfully target terrorists outside of Iraq and Afghanistan.", "U.S. drone facilities in Djibouti, Pakistan, and elsewhere, have contributed to elimination of certain terrorist threats, and have benefited from support from the host-country intelligence services, despite\u2014in the case of Pakistan\u2014opposition to the U.S. presence by many of the local population. The CIA drone operations in Pakistan successfully targeted members of the Haqqani Network, the Afghan Taliban, and the Pakistani Taliban, among others. From Djibouti, drone strikes have been conducted over Yemen and Somalia with the assistance of the French and permission of the Djiboutian government."], "subsections": []}, {"section_title": "Diplomatic Back Channel", "paragraphs": ["The IC has been used for a diplomatic back channel to foreign governments when there may be few alternatives to reliably communicate important information between heads of state. Generally this involves countries with which the United States does not have diplomatic relations. In these situations, the foreign intelligence services are often closely linked to the head of state and exercise influence similar to that of the foreign ministry. Using intelligence services as a diplomatic back channel may be necessary to convey a personal message, clarify intentions, or diffuse tension. One instance that has become public involves the intelligence ties between the CIA, North Korea's Reconnaissance General Bureau, and South Korea's National Intelligence Service. This channel between IC counterparts, begun in 2009 during the Obama Administration, has been used by senior IC officials to send or receive personal communications between the U.S. President and the North Korean leader."], "subsections": []}]}, {"section_title": "Risks and Obstacles", "paragraphs": ["There is a variety of risks and obstacles to U.S. intelligence relationships with foreign partners. They result from policy differences, differences in assumptions about a threat, failure to respect human rights, lapses in security, espionage, and legal and informal limits each side may place upon the other. The strongest, most enduring relationships have weathered differences in policy or lapses in security that have led to temporary setbacks in intelligence cooperation. More formidable to overcome are obstacles to intelligence sharing resulting from fundamental differences in values."], "subsections": [{"section_title": "Training", "paragraphs": ["Bilateral intelligence training of foreign partners' intelligence services can provide certain advantages to the United States, but can also create noteworthy risks. In its earliest years, the United States, as has been noted, benefited from the assistance of British and French mentors of the fledgling U.S. Military Intelligence Division (MID) during the First World War. Since the CIA's creation, training in intelligence collection and analysis has become a means by which the agency and other IC elements have established and maintained ties to foreign partners. This report cites elsewhere the efforts by the United States to build the German and Israeli intelligence services. Among many other examples of the IC reinforcing strategic ties to foreign partners through intelligence training are U.S. support in training Iran's Ministry of State Security (SAVAK) and Egypt's General Intelligence Directorate (GID). Yet subsequent problems in U.S. relations with these countries and others like them underscore the inherent risks of anticipating the second- and third-order effects of establishing close intelligence ties to fragile and unstable foreign governments.", "The Iraqi National Intelligence Service (INIS) provides a similar example of both the benefits and risks of intelligence-training relationships with foreign partners. This organization, established with the CIA's support, was one factor\u2014among others\u2014in turning the tide against the Sunni insurgency of 2004-2008. However, it also became caught up in Iraq's Shia-Sunni sectarian conflict and linked to a proxy fight for influence in Iraq between the United States and Iran. Iran reportedly was involved in an assassination campaign against the Sunni-dominant INIS, 209 of whose officers were reportedly killed from 2004-2009. This was partly a consequence of a rivalry with Iraq's Shia-dominant\u2014and unofficial\u2014intelligence organization within the Ministry of State for National Security, operating under Iran's influence and aligned with Iraq's then-Prime Minister Nouri al-Maliki. "], "subsections": []}, {"section_title": "Ethics and Human Rights", "paragraphs": ["Historically, adhering to internationally sanctioned standards for ethics and human rights has challenged the United States IC and its foreign intelligence partners, especially in times of crisis. While the United States can benefit from intelligence shared by authoritarian regimes in the Middle East and elsewhere, these regimes have relatively few restraints against obtaining information by harsh interrogation, or even torture. As articulated by one scholar,", "Authoritarian regimes can employ, among other things, relatively extensive population control measures and invasive intelligence collection methods, can readily obtain information superiority, and are under relatively little pressure to use minimum force.", "A lack of control and accountability over an authoritarian foreign intelligence partner employing such methods can undermine the credibility of the information obtained. Political backing for such methods can also produce the same effect. For the U.S., even the perception of engaging in an intelligence liaison relationship with a foreign partner with a poor human rights record can leave the United States vulnerable to criticism. The policy of the IC, as described by a former director of the CIA, is to refrain from exchanging intelligence with regimes that abuse human rights:", "We, the U.S. government, and we, CIA, are very, very clear in terms of the types of behaviors and actions that we will not tolerate \u2026. We, CIA, have not only threatened to cut off relations with some of those liaison partners [when] we have information that they practice [abuses of human rights], we have cut off relations. So I think we need to keep the pressure on them \u2026. The navigation of the shoals that stand between these governments today and a thriving democracy are significant. And I think we have to help them navigate it. ", "However, the U.S. IC itself has leveraged foreign intelligence partnerships to commit ethical abuses, including the well-documented use of so-called black sites overseas. Six days after the 9/11 terrorist attacks, President George W. Bush signed a memorandum of notification (MON) that granted the CIA a number of counterterrorism authorities, including to \"undertake operations designed to capture and detain persons who pose a continuing, serious threat of violence of death to U.S. persons and interests or who are planning terrorist activities.\" Subsequently, DCI George Tenant ordered the agency's Deputy Director of Operations and the Director of the Counterterrorism Center to assume authority for the capture and detention of terrorists. The CIA conducted detentions and interrogations at various secret black sites abroad where CIA personnel, including contract interrogators, employed what has been termed \"enhanced interrogation techniques\" as authorized by the Department of Justice.", "In its study of the program, the Senate Select Committee on Intelligence (SSCI) reported ten detention sites abroad. Media sources have indicated as many as nine more sites. Although the landmark 2006 Supreme Court ruling Hamdan vs Rumsfeld effectively ended the \"enhanced interrogation techniques\" the CIA employed at the time, and contributed ultimately to the closure of the black sites by 2009, the program proved an embarrassment to the CIA, and complicated the IC's counterterrorism intelligence engagements with foreign partners. "], "subsections": []}, {"section_title": "Challenges Vetting Sources, Security Lapses, and Espionage", "paragraphs": ["U.S. intelligence agencies' often long-standing ties to foreign intelligence services have been tested by sharing of uncorroborated information and improper source vetting. Germany and Jordan are close intelligence partners of the United States. Both, however, provide examples of the risk of accepting information or intelligence from partner-controlled, improperly vetted sources.", "The now-discredited information of a German Federal Intelligence Service (Bundesnachrichtendienst or BND) source codenamed Curveball, alleging Iraq was in possession of weapons of mass destruction, influenced the 2003 U.S. decision to invade Iraq. Although the lessons learned from this historic failure to properly vet a foreign intelligence source have reduced the risk of repetition, any intelligence organization can fall victim to accepting unreliable information from an otherwise trusted foreign partner. Further, some foreign partners could render their controlled sources' information unreliable through use of duress or torture. In December 2009, a source under control of Jordan's General Intelligence Directorate (GID), Humam Khalil al-Balawi, blew himself up at a CIA facility at Forward Operating Base Chapman in Khost, Afghanistan, killing seven CIA agents. Al-Balawi, who had claimed to be the physician to Ayman al-Zawahiri, then-deputy to Osama bin Laden, was in fact working for al-Qa'ida. At the time, however, he offered the prospect that he could assist the CIA in locating al-Qa'ida's senior leadership. A subsequent CIA assessment of the circumstances that led to the attack concluded that al-Balawi \"was not fully vetted\" despite having previously provided information to the U.S. and Jordan that had been verified. In a statement outlining corrective measures resulting from the attack, then-CIA Director Leon Panetta determined, in part, that the agency needed to \"more carefully manage information sharing with other intelligence services.\" ", "The intelligence partnership with Britain has also proven vulnerable to the problems of vetting employees or sources of a foreign intelligence agency. The most notorious instance involved five British graduates of Cambridge University (the Cambridge Five ), serving in senior positions in MI6 while engaging in espionage as agents of the Soviet Union in the 1940s and 1950s. One of the five, Kim Philby, served for a time as First Secretary (Chief of Station-equivalent) of the British embassy in Washington, DC. ", "Problems with espionage and violations of security have also affected the U.S. IC. Some close partners have brought U.S. citizens under control as sources for intelligence on the U.S. These include the cases of Jonathan Pollard and Robert Kim spying on behalf of Israel and South Korea, respectively. ", "Another dimension of the risk to intelligence sharing with foreign partners involves advances in technology. Recently, the Trump Administration expressed concern over the potential decision of a foreign intelligence partner to purchase 5G telecommunications infrastructure that could be vulnerable to penetration by a hostile foreign intelligence service or a company controlled by a hostile foreign intelligence service. The United States Ambassador to Germany, in a letter to the German Minister for Economic Affairs, reportedly warned against Germany purchasing 5 th -generation technology (5G) telecommunications equipment from China's Huawei Technologies Co., suggesting that doing so might require the United States, out of concern for security, to cut back on intelligence sharing between the United States and its long-standing ally. The proposed Intelligence Authorization Act of Fiscal Years 2018 and 2019 ( S. 245 ) would require the head of an IC element entering into an agreement with a foreign intelligence service to consider the vulnerability of the foreign service's telecommunications infrastructure to an adversary of the United States."], "subsections": []}, {"section_title": "Limited Cooperation or Lack of Reciprocation", "paragraphs": ["Limited cooperation or a lack of reciprocation can occasionally afflict even the closest intelligence foreign intelligence relationships. Close partners generally work through these challenges. Policy differences may create more persistent obstacles. Intelligence sharing may be more limited with foreign intelligence services that do not share western democratic values or that have a fundamentally different perspective of the global environment. Non-Five Eyes allies have occasionally expressed frustration with bilateral intelligence ties that are evidently not as close as those of each of the Five Eye countries to the United States. Sometimes these limitations are structural; intelligence sharing agreements (MOUs and GSOMIAs) generally define the limits of what can be disclosed or released. This may result in either partner placing restrictions on what is shared on an issue of mutual national security interest. These structured exchanges may result in overly-general assessments that contribute little to policy-makers' understanding of an issue. ", "Another limitation affecting cooperation on counterterrorist-related intelligence involves the more restrictive privacy protections of some countries compared to those of the United States. This was true in Europe prior to the terrorist attacks in Paris and Brussels in 2015 and 2016, respectively. European allies' stricter privacy laws prevented their processing and sharing with the United States air passenger name request (PNR) data that could be important to preventing a terrorist attack. Since the attacks in Paris and Brussels, however, the U.N. Security Council (UNSC) and European Union (EU) have partially addressed U.S. concerns by adopting measures to improve tracking and interception of PNR data; these measures are intended to facilitate the sharing of perishable intelligence indicators of terrorist travel.", "In situations involving fundamentally different values and assumptions about the global environment, the United States and a foreign partner may limit the intelligence they are willing to share. Describing the long-standing U.S. strategic intelligence relationship with Saudi Arabia, for example, one scholar noted,", "The [Saudi] Kingdom in general was often slow to recognize the threat of terrorism and reluctant to cooperate with the United States. After the 1996 Khobar Towers bombing, the Saudi government did not share vital information with U.S. intelligence. Many of the causes linked to the global jihadist movement, like the fighting in Kashmir and Chechnya, enjoyed wide legitimacy within the Kingdom, and citizen support for these conflicts seemed to pose no direct threat to Saudi security.", "In instances where intelligence relations with foreign entities are part of a larger relationship, the benefit to each side might not be directly reciprocated. A foreign partner, for example, may leverage a capability in intelligence, such as human intelligence access to a difficult target, in order to extract benefits from the United States in other areas of the bilateral relationship, such as military assistance. ", "In one example, Pakistan for years benefited from a relationship with U.S. intelligence that was part of a broader cooperative relationship in defense, counterterrorism, governance, and development. This relationship survived despite strong American objections to indications of Pakistan's support for the Afghan Taliban, Haqqani Network, and other Islamist militant groups, and Pakistan's objections to alleged U.S. violations of its sovereignty. In January 2018 the Trump Administration announced a major policy decision to suspend security aid to Pakistan. Pakistan retaliated by terminating its counterterrorism intelligence cooperation with the United States.", "The IC also has (or has had) intelligence liaison relationships with adversaries such as Russia, China, Syria, and Libya. There has been benefit in doing so over a relatively narrow range of mutual interests. However, the apparent benefit of exchanging intelligence with adversaries, such as on counterterrorism, is typically weighed alongside the risks. There is a danger of exposing U.S. intelligence sources and methods to a traditional adversary. Furthermore, intelligence liaison about a particular issue\u2014over time\u2014may risk exposing U.S. sources and methods to the foreign agency, as well as exposing knowledge of corruption connected to that government. Serious policy differences also can reduce or negate the benefits of sharing intelligence. In the case of Syria, both Russia and the U.S. have an interest in resolving the conflict. However, Russia's broader strategic objectives oppose those of the United States. "], "subsections": []}, {"section_title": "Over-Reliance on the Capabilities of a Foreign Partner", "paragraphs": ["Although foreign intelligence partnerships may have the benefit of expanding the reach of U.S. intelligence in areas where the U.S. lacks collection assets, they also may pose a risk of the IC relying too heavily on a partner's unique access and capabilities. In the 1970s, the IC's reliance on Iran's SAVAK intelligence organization contributed to the U.S. failure to comprehend developments leading up to the overthrow of the Shah. More recently, Congress, in a Joint Inquiry into the conditions leading up to 9/11, the congressional intelligence committees cited the \"excessive reliance on foreign liaison services,\" as a factor contributing to the failure of the IC to develop its own human intelligence sources that could penetrate Al Qa'ida.", "Lacking access to senior, high level al-Qa'ida leadership, the [Intelligence] Community relied on secondhand, fragmented and often questionable human intelligence information, a great deal of which was obtained from volunteers or sources obtained through the efforts of foreign liaison. ", "The dispersed character of terrorists and terrorist organizations is such that it would be difficult to expect the IC to have an optimal number of U.S.-recruited human intelligence sources in place everywhere they might be needed. There will always be an inherent risk in relying on foreign partners in areas where the United States has not had the time, resources, or capacity to develop its own assets. However, a greater risk was arguably incurred by the U.S. intelligence community in its deliberate, resource-driven strategy of leveraging foreign partnerships during the 1990s. "], "subsections": []}]}, {"section_title": "Conclusion", "paragraphs": ["U.S. foreign intelligence relationships may be easily overlooked in discussions of the importance and inherent risks of cooperation with state and non-state actors in the international community. Little is publicly known about them, in particular how they are structured and how they contribute to U.S. national security. The benefits of these relationships to the United States are weighed against their potential hazards, including outright failure. Congress's role in providing oversight here is different than its oversight of intelligence in other respects. With the exception of covert action with foreign partners (which is covered by oversight provisions in statute), congressional oversight of U.S. foreign intelligence relationships can be especially challenging due to the passive, low-profile character of sharing intelligence, and Congress's inability to penetrate the internal dynamics of a foreign intelligence service. Nonetheless, these relationships will remain an integral, daily aspect of intelligence activities supporting U.S. national security objectives, and thus Congress has a vested interest in conducting oversight of them."], "subsections": []}]}}
{"id": "R45030", "title": "Federal Role in Voter Registration: The National Voter Registration Act of 1993 and Subsequent Developments", "released_date": "2019-01-23T00:00:00", "summary": ["Historically, most aspects of election administration have been left to state and local governments, resulting in a variety of practices across jurisdictions with respect to voter registration. States can vary on a number of elements of the voter registration process, including whether or not to require voter registration; where or when voter registration occurs; and how voters may be removed from registration lists. The right of citizens to vote, however, is presented in the U.S. Constitution in the Fifteenth, Nineteenth, and Twenty-sixth Amendments. Beginning with the Voting Rights Act (VRA) in 1965, Congress has sometimes passed legislation requiring certain uniform practices for federal elections, intended to prevent any state policies that may result in the disenfranchisement of eligible voters. The National Voter Registration Act (NVRA) was enacted in 1993 and set forth a number of voter registration requirements for states to follow regarding voter registration processes for federal elections.", "NVRA is commonly referred to as the motor-voter bill, as it required states to provide voter registration opportunities alongside services provided by departments of motor vehicles (DMVs), although NVRA required other state and local offices providing public services to provide voter registration opportunities as well. NVRA also created a federal mail-based voter registration form that all states are required to accept and created criteria for state voter registration forms. Certain procedures states must follow for performing voter registration list maintenance or removing voters from registration lists are also set forth in NVRA. The Federal Election Commission (FEC) provided guidance to state election officials and issued biennial reports to Congress on NVRA implementation and voter registration in each state until these roles were transferred to the Election Assistance Commission (EAC) in 2002.", "NVRA remains a fundamental component of federal voter registration policy and has not undergone many significant revisions since its enactment, though voter registration remains a subject of interest to Congress. The Help America Vote Act (HAVA) of 2002 enacted a number of election administration measures, several of which were based on recommendations from the FEC's biennial NVRA reports, and affected federal voter registration. These included the computerization of state voter lists; grants to states for election technology upgrades; changes to the federal mail-based voter registration form; and the transfer of the FEC's role in administering NVRA to the newly created EAC. More comprehensive information on HAVA can be found in CRS Report RS20898, The Help America Vote Act and Election Administration: Overview and Selected Issues for the 2016 Election.", "In the 115th Congress, 66 bills were introduced related to federal voter registration or NVRA. Some of these measures were narrow in scope, whereas others were more comprehensive electoral reforms. Many of these bills sought to expand the ways in which states must allow individuals to register to vote. This can include adding other public service agencies to the list of NVRA voter registration agencies, or requiring online voter registration, same-day voter registration, preregistration of teenagers not yet eligible to vote, or automatic voter registration. A number of other bills reflected ongoing concerns about the technology used to maintain voter registration data and about balancing the efficiency technology provides for citizens and election officials with sufficient cybersecurity protections."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The National Voter Registration Act of 1993 (NVRA) requires that states follow certain voter registration requirements for federal elections. NVRA does not set requirements for state or local elections. The stated purposes of NVRA are to establish procedures to increase the number of eligible citizens registered to vote in federal elections; enable enhanced voter participation in federal elections; protect the integrity of the electoral process; and ensure accurate voter registration records. ", "NVRA was not the first piece of federal legislation addressing state electoral activities, but it did create a more significant federal presence in voter registration activities. NVRA may be viewed as an extension of the Voting Rights Act of 1965 (VRA) and other federal legislation that sought to create uniformity across state electoral processes in order to expand voter enfranchisement and ensure constitutionally protected voter rights. ", "NVRA is sometimes referred to as the motor-voter bill, since one of its provisions requires that eligible citizens must be able to simultaneously apply for voter registration when they apply within a state for a motor vehicle driver's license or other personal identification document issued by a state department of motor vehicles. In addition to these motor-voter registration opportunities, NVRA requires that states establish mail-based voter registration processes and accept a federal mail-in registration form. States must also provide in-person voter registration opportunities at the designated, residence-based voter registration sites, in accordance with state law, and at designated federal, state, or nongovernmental offices, including state agencies providing public assistance or services to persons with disabilities.", "In addition to voter registration methods, NVRA included procedural requirements for states to follow when performing voter registration list maintenance or when adding, removing, or modifying records for registered voters. NVRA further required that the Federal Election Commission (FEC) provide guidance to the states for implementing NVRA. NVRA also directed the FEC to publish a biennial election report assessing the impact of the act on federal election administration and offering recommendations for improvements to federal and state procedures, forms, and other matters affected by NVRA. These FEC responsibilities were transferred to the U.S. Election Assistance Commission (EAC) following enactment of the Help America Vote Act (HAVA) in 2002.", "NVRA, as amended by HAVA, provides much of the framework for federal voter registration policy. The first portion of this report provides a brief background on the federal role in voter registration and the passage of NVRA, followed by a discussion of the key components of NVRA. The implementation of NVRA, subsequent modifications to its provisions, and ongoing considerations related to federal voter registration are also discussed. The final sections of this report provide descriptions of types of common legislative proposals addressing voter registration, with a full list of related bills introduced in the 115 th Congress provided in the Appendix . "], "subsections": []}, {"section_title": "Background and Context for NVRA Passage", "paragraphs": ["Many elements of election administration remain under the domain of state and local governments, but the federal government has become more involved in some election aspects since the 1960s. The Voting Rights Act of 1965 (VRA) and several subsequent federal laws, including NVRA, reflect congressional initiatives to increase voter participation across the states. Various proposals were introduced in the 1970s and 1980s to create national standards for voter registration, but the enactment of NVRA in 1993 marked the first comprehensive federal policy addressing voter registration.", "The House and Senate considered measures during multiple Congresses in the 1970s, for example, that would have created a postcard-based national voter registration form administered by the Census Bureau. In the 95 th Congress (1977-1978), congressional attention turned toward creating national standards for same-day voter registration, but neither chamber passed related legislation. Congress considered other voter registration measures between 1983 and 1988, but no proposals appear to have reached the floor in either the House or Senate. Previous versions of NVRA were introduced in the 101 st Congress (1989-1990) and 102 nd Congress (1991-1992) before similar legislation was ultimately signed into law on May 20, 1993.", "Two laws enacted prior to NVRA, the Voting Accessibility for the Elderly and Handicapped Act of 1984 (VAEHA) and the Uniformed and Overseas Citizens Absentee Voting Act of 1986 (UOCAVA), may be viewed as legislative predecessors to NVRA. Primarily, these laws focused on voting access, but they also contained provisions that addressed voter registration. VAEHA and UOCAVA represented extensions of the federal government's role in some electoral activities that had traditionally been the domain of state and local governments. ", "VAEHA required that states make polling places more accessible for persons who are elderly or disabled; provide absentee ballots for handicapped voters with no notarization or medical certification required; and offer voting aids for elderly or disabled individuals to use in federal elections. With regards to voter registration, VAEHA also required that states establish \"a reasonable number of accessible permanent registration facilities,\" and offer registration aids for elderly or handicapped individuals to use in federal elections.", "UOCAVA required each state to permit uniformed servicemembers, their spouses and dependents, and overseas citizens who do not maintain a residence in the United States to vote absentee in federal elections using a federal write-in absentee ballot or a state absentee ballot approved by the presidential designee and made available at least 60 days before an election. UOCAVA also required states to accept and process any valid voter registration applications received at least 30 days prior to a federal election from military or overseas voters and created an official postcard form states would accept for these individuals containing both a voter registration application and an absentee ballot application."], "subsections": []}, {"section_title": "Major Provisions of NVRA", "paragraphs": ["NVRA's shorthand name, the motor-voter bill, refers to one of its more well-known provisions\u2014the requirement that states establish procedures for eligible individuals to register to vote in federal elections, or to update their voter registration records, simultaneously with their applications for motor vehicle driver's licenses or for any other form of personal identification provided by the state's department of motor vehicles (DMVs). Under NVRA, states must also establish other in-person voter registration locations, including at federal, state, or nongovernmental offices that primarily provide public assistance or services to persons with disabilities, and at other locations as described in Section 7 of NVRA. In addition to specifying locations for voter registration opportunities, NVRA also contains criteria for states' voter registration forms and requires states to accept a national mail-based registration form created by the FEC. States must also meet certain procedural requirements when adding, removing, or modifying records in their voter registration lists. Today, the EAC provides states with guidance for implementing NVRA and publishes a biennial election report assessing the impact of NVRA on federal election administration and providing recommendations, if necessary, for improvements to federal and state procedures, forms, and other matters affected by NVRA."], "subsections": [{"section_title": "Voter Registration at Departments of Motor Vehicles (DMVs)", "paragraphs": ["Section 5 of NVRA provides that \"Each State motor vehicle driver's license application (including any renewal application) submitted to the appropriate State motor vehicle authority under State law shall serve as an application for voter registration with respect to elections for Federal office unless the applicant fails to sign the voter registration application.\" An applicant submitting a change of address to a state DMV can also designate that the change should be relayed to election officials as an update to his or her voter registration. Voter registration information collected by DMVs must be relayed to election officials no later than 10 days after it is received. If the DMV receives voter registration information within 5 days of the state's voter registration deadline, it must be relayed to election officials no later than 5 days after its receipt. This is the same timeline for application turnaround that NVRA requires for the other voter registration agencies it covers, as discussed in the following section, \" Other Voter Registration Agencies .\" ", "Proponents of NVRA expected that most voter registration would eventually occur through this type of application. In the years since NVRA was enacted, DMVs have become a popular source for voter registrations. Among the voter registration methods denoted in NVRA and tracked in the biennial NVRA reports, DMVs are consistently the most common source of voter registration applications. The EAC reports that between 2014 and 2016, departments of motor vehicles accounted for a higher proportion of voter registration applications received than any other source of voter registrations designated under NVRA. Table 1 provides information on DMV-based registration and other sources for selected years. "], "subsections": []}, {"section_title": "Other Voter Registration Agencies", "paragraphs": ["In addition to DMVs, under NVRA, states are required to provide opportunities for individuals to register to vote in-person at other locations. These include \"the appropriate registration site designated with respect to the residence of the applicant in accordance with state law,\" as well as at certain federal, state, or nongovernmental offices. Section 7 of NVRA identifies these additional locations as \"voter registration agencies.\" Any office in a state that provides public assistance or administers state-funded programs primarily designed to provide services to persons with disabilities must be designated as voter registration agencies. Recruitment offices for the U.S. armed services are also designated as voter registration agencies. Beyond these required designations, states are also directed to designate other locations, such as public libraries, schools, city or county government offices, unemployment compensation offices, and fishing and hunting license bureaus. The Higher Education Amendments of 1998 further required that colleges and universities in states exempt from NVRA \"make a good faith effort\" to request and distribute mail-based voter registration forms to enrolled students.", "Each designated voter registration agency must distribute mail-based voter registration forms; provide assistance to applicants completing the form, unless such assistance is refused by the applicant; and transmit completed applications to the appropriate state election official no later than 10 days after they are received or within 5 days of their receipt if received within 5 days of the state's voter registration deadline. This timeline is the same as NVRA requires for state DMVs that receive voter registration forms. Individuals assisting with registration applications cannot seek to influence the applicant's political preference or party registration; display a political preference or party allegiance; or make any statement or take any action that has the intent or effect of discouraging an applicant from registering to vote or leading the applicant to believe that the availability of other services provided by the agencies is dependent upon the decision to register or not register. "], "subsections": []}, {"section_title": "Mail-In Voter Registration", "paragraphs": ["Section 6 of NVRA further directs states to make available mail-based voter registration applications for federal elections. These mail-based applications can also be used for voters to update a change of address. Section 6 requires states to accept and make available a mail-based application created by the federal government, but also permits states to use a mail-based form of their own creation. NVRA directed the FEC to develop and maintain the mail-based federal voter registration application, but this function was transferred to the EAC following the passage of HAVA, effective in 2004. Mail-based voter registration applications created by the states were required to meet all the criteria specified by Section 9 of NVRA, which are described in the subsequent section, \" Voter Registration Form Requirements .\" ", "States were required to make mail registration forms available to governmental and private entities for distribution, with an emphasis on making forms available for organized voter registration programs. Under NVRA, state laws could require that voters new to a jurisdiction who registered by mail vote in-person for their first election. If a registrar sends a notice to an individual regarding the disposition of a mail-based voter registration application via nonforwardable postal mail and the notice is returned as undeliverable, the registrar may begin the process of removing the individual from the state's voter list, as detailed in Section 8(d)."], "subsections": []}, {"section_title": "Voter Registration Form Requirements", "paragraphs": ["In addition to how and where states are required to provide voter registration opportunities, NVRA contains requirements for the information presented on and collected by voter registration forms for federal elections. These requirements are presented in Section 9(b) of NVRA, and also serve as the criteria used for the federal, mail-based voter registration application created under NVRA. States are also required to make the FEC mail-based registration form available at governmental and private entities for distribution, with a particular focus on distributing forms to nongovernmental voter registration programs.", "Instead of listing a number of information fields that must be included on voter registration forms, NVRA minimizes the amount of information an applicant needs to provide by utilizing personal information the applicant provides elsewhere. At state DMVs, for example, the application for registering to vote must be incorporated into the application form for a driver's license and cannot require the applicant to duplicate any information already provided on the driver's license portion of the form. For voter registration on driver's license applications and for state mail-in applications, a form may only request the minimum amount of information necessary to prevent duplicate registrations and enable state election officials to determine the eligibility of the applicant and administer voter registration laws. ", "Voter registration applications under NVRA must include statements listing federal voting eligibility requirements (including citizenship) and require a signature from the applicant, attesting that he or she meets the eligibility criteria. Voter registration forms may not include \"any requirement for notarization or other formal authentication.\" In recent years, the EAC and U.S. Supreme Court have interpreted this to preclude states from requiring proof of U.S. citizenship in order to submit an application for federal voter registration. The forms also include a statement about penalties for submitting a false voter registration application, and a statement asserting that information about declining to register or the office where a citizen registered would be kept confidential."], "subsections": []}, {"section_title": "Maintenance and Updates to State Voter Lists", "paragraphs": ["As noted above, agencies providing voter registration forms, including DMVs, are required by NVRA to accept completed forms from applicants and transmit the forms to the appropriate state election official within 10 days of receipt. If the completed form is collected by an agency within 5 days of the state's voter registration deadline, the form must be transmitted to state election officials within 5 days of receipt. Under NVRA, once state election officials have received and approved or denied an application, they are required to send each applicant a notice regarding the disposition of his or her application. State election officials are also directed to ensure that any eligible applicant is registered to vote in time for a federal election, as long as the applicant's information was submitted to a voter registration agency or postmarked no later than 30 days before a federal election (or the state's registration deadline, if that is less than 30 days before Election Day). ", "Once a voter is registered, his or her name is not to be removed from the list or roster of eligible voters unless the voter requests removal; has died; has moved out of the jurisdiction; or, as provided by state law, has received a disqualifying criminal conviction or is found to be mentally incapacitated. Voters may not be removed from the registration rolls solely due to nonvoting, or for moving within the same electoral jurisdiction. States may \"conduct a general program that makes a reasonable effort\" to remove voters from the list due to death or a change of residence. States may also remove a voter from the registration rolls if the registrant has notified the election office that he or she has moved. States may also remove voters from the registration rolls if the registrant does not respond to a notice sent by the registrar (containing a forwardable mail response card with prepaid postage) and fails to vote or appear to vote in two consecutive general elections for federal office.", "The processes states use to maintain accurate, up-to-date voter registration lists for use in federal elections must be undertaken in a \"uniform, nondiscriminatory\" fashion and in compliance with the Voting Rights Act of 1965. States could use the U.S. Postal Service (USPS) \"National Change of Address\" program as one way to help maintain their voter registration rolls. Removal of ineligible voters from the registration rolls must be completed at least 90 days prior to the date of any federal election (general or primary). Beyond these guidelines, NVRA does not specify any particular process states must follow when removing individuals from their registered voter lists."], "subsections": []}, {"section_title": "\"Fail-Safe\" Provisions for Within-Jurisdiction Residence Changes", "paragraphs": ["NVRA includes \"fail-safe\" voting provisions, enabling voters who have moved within a jurisdiction but lack updated registrations to vote on Election Day and to update the state's records. These \"fail-safe\" provisions are limited to registrants who move within the same election jurisdiction, under the principle that \"once registered, a voter should remain on the list of voters so long as the individual remains eligible to vote in that jurisdiction.\" This situation could arise because voters did not realize their information required an update, or because of technical or bureaucratic mistakes in processing a registrant's updated application. A voter whose residence was formerly covered by one polling place but whose residence is currently covered by another polling place in the same jurisdiction must be allowed to update his or her voting records and vote, either at the voter's former polling place, current polling place, or at a central location within the jurisdiction. "], "subsections": []}, {"section_title": "Criminal Penalties", "paragraphs": ["Section 12 of NVRA establishes criminal penalties for federal election fraud and voter intimidation. No individual may \"knowingly and willfully\" attempt to intimidate, threaten, or coerce anyone who is attempting to register to vote, assisting with voter registration, voting, or exercising any right under NVRA. Individuals may also be charged for attempting to deprive state residents of a \"fair and impartially conducted election process\" by procuring or submitting voter registration applications or ballots that are known to be fraudulent according to state law. Individuals committing these acts could be fined in accordance with Title 18 of the U.S. Code and/or imprisoned for up to five years."], "subsections": []}, {"section_title": "Records and Reporting Requirements", "paragraphs": ["Under NVRA, states are required to keep records pertaining to voter registration list maintenance and to make these records publicly available. NVRA also required the FEC to produce a biennial report \"assessing the impact of this Act on the administration of elections for federal office ... including recommendations for improvements in Federal and State procedures, forms, and other matters affected by this Act.\" Since 2003, these NVRA reports have been produced by the EAC. The biennial NVRA reports are submitted to Congress by June 30 of each odd-numbered year. No further instructions on the content of the reports were provided by NVRA; in practice, the FEC/EAC has chosen to conduct surveys of the states to collect information that it deems necessary to carry out its statutory requirement.", "The biennial NVRA reports provide statistics and detailed discussion on the voter registration activities of the states for the preceding two-year period under study. This includes information on the total number of registered voters, new registrants, and sources of registrations covered by NVRA (i.e., motor vehicle agencies, in-person, by mail, or other designated state office). The NVRA reports also provide information on the removal of voters from registration lists and reasons for removals. Issues with list maintenance have at times been discussed in these reports, as have recommendations for improvements."], "subsections": []}]}, {"section_title": "Initial NVRA Implementation", "paragraphs": ["Many of NVRA's requirements were designed to be implemented through state-level policy changes, if existing state laws were not already in compliance with its provisions. Six states were exempt from NVRA at the time of its enactment because they either had no voter registration requirement or provided voter registration at polling places on Election Day. The other 44 states were tasked with implementing NVRA by January 1, 1995; however, if something in a state's constitution precluded compliance, NVRA allowed for a later enactment date to allow for the state's constitutional amendment process. ", "NVRA provided no federal funding to the states to carry out any of its prescribed requirements. States are, however, eligible to use reduced mailing rates from USPS for voter registration mailings. Each state was required to designate a state officer or employee to serve as the chief state election official and coordinate state responsibilities related to NVRA. ", "NVRA also created specific roles for the FEC and made the Department of Justice (DOJ) responsible for civil enforcement of its provisions. The FEC was responsible for providing information to states about their responsibilities under NVRA; developing a mail-based federal voter registration form; and producing a biennial report to Congress, in consultation with states' chief election officers. Within the FEC, the Office of Election Administration (OEA) carried out its NVRA responsibilities, until the passage of HAVA in 2002 transferred these responsibilities to the EAC. ", "The initial NVRA report from the FEC noted that \"[NVRA] is something of an experiment in governance in that the federal responsibilities for its proper implementation are divided between two separate federal agencies,\" meaning the FEC and DOJ. In early guidance to states regarding NVRA implementation, the FEC stated it \"does not have legal authority either to interpret the Act or to determine whether this or that procedure meets the requirements of the Act,\" noting that such activities would fall under the DOJ's civil enforcement responsibilities.", "While NVRA was under consideration by Congress, some were concerned about the costs it could impose upon states, since the bill contained a number of requirements for state election officials and other state agencies but no funding to carry them out. As states began to implement NVRA, however, costs were not cited in the FEC reports as a significant impediment, and implementation generally proceeded without many reported complications. In the 1995-1996 NVRA report, for example, the FEC said that the motor vehicle provisions \"appeared to be the easiest for States to implement,\" and that states reported \"relatively few problems\" with implementing the mail registration provisions. The FEC attributed this, in part, to the fact that 26 of the 43 states responding to the survey had already enacted some form of motor voter registration prior to NVRA, and that 25 of the responding states already had voter registration by mail prior to NVRA. Voter registration rates did increase in the years following the passage of NVRA, as compared to the years immediately preceding its passage. Some have suggested, however, that it is difficult to isolate the particular effect NVRA had on this increase, due to a number of other factors that could lead voters to register or to not register.", "In its 1993-1994 NVRA report, the FEC noted that statewide computerization of voter registration \"greatly facilitates the implementation of NVRA,\" and that \"even larger networks linking motor vehicle, public assistance, vital statistics, and courts to the voter registration system\" could further assist with intake and verification of voter records. At the time, FEC found varying degrees of computerized record systems across states, and noted that in some states, the record systems used by different local jurisdictions were incompatible with one another. ", "States were granted some latitude to comply with other provisions in NVRA that were not as strictly specified by the legislation, such as the designation of voter registration agencies and state procedures for voter list maintenance; as a result, the ways in which they approached these provisions varied. As one example, for NVRA's requirement that states designate other offices as voter registration agencies, the FEC's 1995-1996 report found four states had not designated any agencies, and the 21 other states that responded had selected \"a wide variety of agencies.\" Regarding voter list maintenance, the FEC stated that \"[a]s one might expect, [the] States covered by this report approached the rather technical and detailed problems of list maintenance quite differently and unevenly.\""], "subsections": []}, {"section_title": "Help America Vote Act (HAVA) of 2002", "paragraphs": ["The Help America Vote Act (HAVA) was enacted in 2002 and serves as another key piece of federal election policy, addressing a number of election administration elements in light of issues revealed during the 2000 presidential election. This section focuses only on the parts of HAVA that affected NVRA or voter registration in federal elections, namely, the computerization of state voter lists; changes to the federal mail-based voter registration form; and transferring the FEC's role to a newly created Election Assistance Commission (EAC). HAVA has many additional components, however, and more comprehensive information on it can be found in CRS Report RS20898, The Help America Vote Act and Election Administration: Overview and Selected Issues for the 2016 Election .", "In the years preceding HAVA, the FEC's biennial NVRA reports contained a number of recommendations related to the voter registration and list maintenance requirements set forth by NVRA. HAVA incorporated several of these recommendations, some as its own provisions and others as amendments to NVRA. Notably, HAVA established requirements for states to utilize computerized statewide voter registration lists, which the FEC had frequently suggested in its NVRA reports. HAVA also provided funding to help states carry out this requirement and its other objectives, many of which were related to modernizing voting equipment and generally improving federal election administration across all the states. ", "HAVA required four specific additions to the NVRA mail-based voter registration form: (1) a question asking whether the registrant was a citizen, with corresponding answer check boxes; (2) a question asking whether the registrant would be 18 years of age or older by the next election, with corresponding answer check boxes; (3) a statement that if the registrant had answered \"no\" to either of the preceding questions, that he or she was to stop filling out the form and not register; and (4) a statement alerting the registrant to submit copies of appropriate documentation with his or her application, if he or she is a first-time registrant, and the completed forms are submitted through the mail, or else he or she may be required to provide such documentation when voting for the first time. ", "Prior to HAVA, the FEC's Office of Election Administration (OEA) carried out federal activities related to election administration. HAVA created the Election Assistance Commission, an independent, bipartisan agency, which absorbed the OEA's responsibilities in addition to carrying out other new requirements. The EAC's responsibilities included carrying out payment and grant programs related to federal elections; testing and certifying voting systems; studying election issues; and issuing guidelines and other guidance related to voting systems and implementation of HAVA's requirements, in consultation with election officials and other stakeholders."], "subsections": []}, {"section_title": "Biennial Report Recommendations Since HAVA", "paragraphs": ["Since the passage of HAVA in 2002, the biennial EAC reports have often contained further recommendations related to voter registration and election administration. Many of these recent recommendations pertain to modernizing data collection and improving data sharing practices within and among states. The recommendations are typically broad-based and use generalized language; they serve only as suggestions to the states, or possibly to Congress, since the EAC lacks the authority to require states to take any action related to voter registration. Table 2 presents a summary of NVRA recommendations contained in the EAC reports since 2004."], "subsections": []}, {"section_title": "Voter Registration Sources Since NVRA", "paragraphs": [" Table 1 (earlier in report) provides information on the sources of voter registration applications for states covered by NVRA during 1995-1996, 2005-2006, and 2015-2016. These data include new voter registration applications and applications requesting an update or modification for an existing registered voter. Nationwide, DMV offices have remained the most common source among those covered by NVRA for voter registration applications received by state election officials. Mail-based forms are consistently the second-most common source for voter registration applications. The EAC notes that online voter registration has grown in recent years, accounting for 17.4% of new voter registration applications for the 2016 election. For the 2014 election, 6.5% of voter registration applications were submitted online, and for the 2012 election, 5.3% of voter registration applications were submitted online."], "subsections": []}, {"section_title": "Legislative Proposals Regarding Voter Registration", "paragraphs": ["Bills that address voter registration are routinely introduced in Congress. Table A-1 in the Appendix lists 66 pieces of legislation that were introduced in the 115 th Congress related to voter registration or to other elements of election administration covered by NVRA. Often, these bills sought to expand the ways in which individuals can register to vote or to update the technologies states use to share and store voter registration data. Some of these bills were narrowly tailored to address a particular part of voter registration, whereas other bills proposed broader policies affecting a number of components of election administration. The sections below categorize some of the common types of policy proposals related to NVRA and federal voter registration. Given the variety and quantity of measures typically before Congress, this is not meant to be a comprehensive discussion of all available voter registration policy options."], "subsections": [{"section_title": "Automatic Voter Registration Legislation (\"Opt-Out\")", "paragraphs": ["Under NVRA, federal voter registration opportunities are made available at a number of state and local government offices and are presented alongside state driver's license applications. Currently, an individual must indicate that he or she wishes to register to vote when applying for a driver's license, or complete a separate voter registration form at other agencies. Some have proposed changing this to an \"opt-out\" system, where an individual is automatically registered to vote when submitting a driver's license application or other eligible agency form, rather than being given the opportunity to opt in to register to vote through an additional selection. An option for declining to register to vote could be presented on the form itself, or provided to the individual at a later time through a notice mailed by election officials.", "Automatic voter registration currently occurs in 17 states and the District of Columbia. Proponents argue that automatic voter registration could increase the number of registered voters, particularly among demographic groups that are less likely to be registered, and decrease registration costs. Others have raised concerns that the government should not require citizens to register to vote, and that \"opt-out\" forms, if sent by mail, may not sufficiently ensure that an individual who wishes not to register can decline registration. Similarly, automatic registration may require more work for state election officials who must sort out eligible and ineligible voter registration applicants. In the 115 th Congress, 14 bills proposed some form of automatic voter registration requirement. Another bill would have provided grants to states for implementing automatic voter registration."], "subsections": []}, {"section_title": "Same-Day Voter Registration", "paragraphs": ["Nine bills introduced in the 115 th Congress would have required states to provide for same-day voter registration, which would enable a qualified individual to register to vote and cast a ballot simultaneously at a designated polling place. Seventeen states and the District of Columbia currently have some form of same-day voter registration. By combining these two steps, proponents believe same-day voter registration simplifies the process for citizens and can increase registration rates and turnout. The month before an election is often a peak time for political campaigning, but unregistered individuals who are mobilized to participate during this period may be unable to vote if the voter registration deadline has passed; in many jurisdictions, the registration cut-off can be 30 days before Election Day. Others believe that preelection registration deadlines remain necessary for state election officials to sufficiently process individuals' applications. In some places with same-day registration, voters who register on Election Day cast provisional ballots until their information can be verified, but this may create a delay in determining election results."], "subsections": []}, {"section_title": "Online (or Electronic) Voter Registration", "paragraphs": ["A number of government forms and applications can be submitted on the internet, and some have proposed a federal requirement for online (or electronic) voter registration applications. Currently, 38 states and the District of Columbia allow for online voter registration. Seven bills introduced in the 115 th Congress proposed requiring nationwide availability of online voter registration for federal elections. Proponents believe that online voter registration could increase registration rates, particularly among younger voters, and could serve as an extension of existing accessibility accommodations for individuals with disabilities. Proponents note that online forms can include required fields, which could reduce the number of errors on submitted voter registration applications. Although there are some upfront costs to implement online registration, proponents believe it may be a relatively inexpensive way for state election officials to maintain up-to-date and accurate voter lists. Others, however, have concerns about the ability to confirm applicants' identities and the overall security of online voter registration systems. Without accurate checks on the voter registration process, some believe that it could be easier for individuals to vote illegally."], "subsections": []}, {"section_title": "Outreach or Preregistration for Teenagers", "paragraphs": ["Under the Twenty-sixth Amendment, individuals must be 18 years old to vote in federal elections, but some proposals related to voter registration seek to reach younger teenagers, usually 16 or 17 years old. Five bills introduced in the 115 th Congress, for example, proposed a preregistration program in which younger individuals could submit, in advance, an application to register to vote; five bills also proposed voter education or participation outreach programs for minors. Currently, each state that requires voter registration and the District of Columbia let individuals under 18 preregister to vote, using a variety of age criteria. Proponents consider these measures a means to help improve the turnout rate for younger voters, which is typically lower than for older voters. By encouraging 18-year-olds to vote in the first election in which they are eligible, some believe that there will be longer-term effects of these policies on voter turnout, as voting becomes a lifelong habit for these individuals. Others, however, are concerned that preregistered individuals are likely to move between the time of their application and the first election they are qualified to vote in, which could render a number of the preregistrations invalid. This could cause some young voters who have moved to mistakenly believe they are eligible to vote in their new jurisdiction without updating their registration information, or create extra costs for state election officials as they seek to update these individuals' records and maintain accurate voter lists."], "subsections": []}, {"section_title": "Protecting Voter Information and Voter List Integrity", "paragraphs": ["Verification of voter registration data is a continual challenge for state election officials seeking to prevent fraudulent voting. An initial check on a prospective voter's identity occurs when election officials confirm the identity and eligibility of an individual at the time he or she first submits a voter registration application, based on criteria set by state law. Laws requiring individuals to show a form of identification when voting exist in a number of states to prevent ineligible individuals from voting, individuals voting twice, or other forms of voting fraud. Some have proposed requiring photo identification earlier in the process, at the time of a voter's application for registration, to help verify the individual's identity. One bill introduced in the 115 th Congress, for example, proposed that photo identification must accompany any voter registration application. Others believe that voter identification laws may prevent some individuals who are otherwise qualified to vote from participating in elections, if these individuals cannot or do not wish to obtain the necessary identification. A different bill introduced in the 115 th Congress would have prohibited states from requiring photo identification when an individual submits a voter registration application. ", "After an individual's initial application, there are a number of reasons why his or her voter registration information may subsequently change. These reasons may include a name change, moving to a new address, a criminal conviction, mental incapacity, or death. NVRA sets out some processes states must follow for performing voter list maintenance, and one bill introduced in the 115 th Congress would have added criteria to NVRA's voter removal requirements. In the years since NVRA's passage, technological advancements have made it possible for agencies and officials to share and cross-reference records, which can help improve list accuracy but has also raised some concerns about protecting voters' personal information. Three bills in the 115 th Congress, for example, addressed how voter registration information can be used; one of these bills would have also required a record of all requests submitted to voter registration databases.", "Personally identifiable information, such as full names, addresses, and birthdays, is commonly stored in state voter registration databases, and in related state or federal databases that election officials use to help update their voter registration records within the state. Interstate information sharing systems, such as the Electronic Registration Information Center (ERIC) or the Interstate Voter Registration Crosscheck Program (Crosscheck), are used by some states to compare voter registration records with one another. These systems, proponents argue, can help states identify ineligible voters or individuals who are registered in more than one state. ", "These data-sharing practices, however, raise concerns among some about information security and appropriate use of voters' data, particularly if states choose to use matching systems as the basis for their voter removal processes. Some of the cross-referencing systems states use to identify and remove voters from their registration lists have been criticized for the methodologies they use to create matches. Matches created using voters' names and birthdays, for example, may falsely identify multiple, unique individuals as a single voter registered in different states. ERIC and Crosscheck, however, both request additional data from voter registration files that, if available, states could utilize to better ensure that duplicate registrants are accurately identified. "], "subsections": []}, {"section_title": "Technology Improvements", "paragraphs": ["The enactment of HAVA in 2002 led to a number of election technology upgrades for states, but in many of its subsequent reports, the EAC has continued to recommend that states further modernize and improve the ways in which they collect voter data and maintain their registered voter lists, as summarized in Table 2 . States increasingly use electronic methods to register voters, maintain voter lists, administer voting, and track election results, making cybersecurity an important consideration for election officials. Some considerations involve protecting the personal information of applicants and registered voters from those who seek to use it for other purposes. Additional considerations involve ensuring system reliability during periods of high usage, or near critical statutory deadlines for voter registration or Election Day vote counting. These are familiar cybersecurity concerns, similar to those faced by any government agencies, businesses, or other organizations that store individuals' personal data. Other considerations, however, are more specific to election integrity, such as the concern that voter databases or other election systems may be targeted in attempts to manipulate election results. ", "The Department of Homeland Security (DHS) designated federal election infrastructure as a component of U.S. critical infrastructure in January 2017, following a series of cyberattacks on state and local election systems prior to the 2016 election. After evidence of these cyberattacks was discovered in August 2016, DHS and the EAC provided some assistance to state election officials to address security concerns. In September 2017, the Department of Homeland Security notified 21 states that hackers had targeted their election systems ahead of the 2016 election. In many cases, the systems may have been targeted but not successfully breached. Some observers, however, have raised concerns that a successful hack may be difficult to detect. Several bills during the 115 th Congress included measures to protect election systems (including voter registration websites and databases) from hackers or foreign interference. ", "Often, legislative proposals in this area involve technology or cybersecurity upgrades to the software or equipment used by state election officials. For voter registration, these upgrades could involve the websites used for online applications, the databases and/or servers used to store voter list data, and the means by which voter applicant data are shared between agencies or jurisdictions. Establishing best practices or required standards for equipment and data systems used in federal elections are possible ways to initiate technology improvements. The decentralized nature of election administration and the variety of software and database systems in use may present challenges if uniform federal requirements are introduced. Twelve bills introduced in the 115 th Congress proposed improvements to the technology systems states use for voter registration and records. Some proposals included grant programs or other funding to help offset costs to states for implementing these upgrades."], "subsections": []}]}, {"section_title": "Concluding Observations", "paragraphs": ["Voter registration has remained a subject of interest to Congress in the years since the enactment of NVRA. Many proposals addressing federal voter registration have been introduced in Congress, but federal policies have remained largely unchanged, with the notable exception of revisions made by HAVA in 2002. Many individuals believe that providing widespread access to voter registration opportunities is a worthy objective and in keeping with protecting the constitutional right to vote. In addition to providing voters with access to registration, state election officials face the continuing challenges of updating and maintaining accurate voter registration lists. Technological advancements in the years since NVRA have made it somewhat easier for election officials to keep up-to-date voter records, but the increased reliance on computer systems has also introduced new challenges regarding data security.", "Some individuals may also question whether it is necessary to expand existing federal voter registration requirements for states, believing that existing provisions are sufficient, or that the perceived benefits of voter registration policy changes must be weighed against other considerations. It can be challenging, for example, to impose uniform regulations across states, which have each developed their own system of election laws. Many federal policy proposals regarding voter registration tend to mirror initiatives that have already been enacted across several states, which may provide lessons for broader implementation, if enacted. Other proposals may prioritize measures to protect election integrity or other areas of election administration, outside of voter registration. "], "subsections": [{"section_title": "Appendix. Legislation", "paragraphs": [], "subsections": []}]}]}}
{"id": "RL33865", "title": "Arms Control and Nonproliferation: A Catalog of Treaties and Agreements", "released_date": "2019-03-18T00:00:00", "summary": ["Arms control and nonproliferation efforts are two of the tools that have occasionally been used to implement U.S. national security strategy. Although some believe these tools do little to restrain the behavior of U.S. adversaries, while doing too much to restrain U.S. military forces and operations, many other analysts see them as an effective means to promote transparency, ease military planning, limit forces, and protect against uncertainty and surprise. Arms control and nonproliferation efforts have produced formal treaties and agreements, informal arrangements, and cooperative threat reduction and monitoring mechanisms. The pace of implementation for many of these agreements slowed during the Clinton Administration, and the Bush Administration usually preferred unilateral or ad hoc measures to formal treaties and agreements to address U.S. security concerns. The Obama Administration resumed bilateral negotiations with Russia and pledged its support for a number of multilateral arms control and nonproliferation efforts, but succeeded in negotiating only a few of its priority agreements. The Trump Administration has offered some support for existing agreements, but has announced the U.S. withdrawal from the INF Treaty, citing Russia's violation of that agreement, and has not yet determined whether it will support the extension of the 2010 New START Treaty through 2026. It shows little interest in pursuing further agreements.", "The United States and Soviet Union began to sign agreements limiting their strategic offensive nuclear weapons in the early 1970s. Progress in negotiating and implementing these agreements was often slow, and subject to the tenor of the broader U.S.-Soviet relationship. As the Cold War drew to a close in the late 1980s, the pace of negotiations quickened, with the two sides signing treaties limiting intermediate-range and long-range weapons. But progress again slowed in the 1990s, as U.S. missile defense plans and a range of other policy conflicts intervened in the U.S.-Russian relationship. At the same time, however, the two sides began to cooperate on securing and eliminating Soviet-era nuclear, chemical, and biological weapons. Through these efforts, the United States has allocated more than $1 billion each year to threat reduction programs in the former Soviet Union. These programs have recently reached their conclusion.", "The United States is also a prominent actor in an international regime that attempts to limit the spread of nuclear weapons. This regime, although suffering from some setbacks in recent years in Iran and North Korea, includes formal treaties, export control coordination and enforcement, U.N. resolutions, and organizational controls. The Nuclear Nonproliferation Treaty (NPT) serves as the cornerstone of this regime, with all but four nations participating in it. The International Atomic Energy Agency not only monitors nuclear programs to make sure they remain peaceful, but also helps nations develop and advance those programs. Other measures, such as sanctions, interdiction efforts, and informal cooperative endeavors, also seek to slow or stop the spread of nuclear materials and weapons.", "The international community has also adopted a number of agreements that address non-nuclear weapons. The CFE Treaty and Open Skies Treaty sought to stabilize the conventional balance in Europe in the waning years of the Cold War. Other arrangements seek to slow the spread of technologies that nations could use to develop advanced conventional weapons. The Chemical Weapons and Biological Weapons Conventions sought to eliminate both of these types of weapons completely.", "This report will be updated annually or as needed."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": [], "subsections": [{"section_title": "National Security, Arms Control, and Nonproliferation", "paragraphs": ["For much of the past century, U.S. national security strategy focused on several core, interrelated objectives. These include enhancing U.S. security at home and abroad; promoting U.S. economic prosperity; and promoting free markets and democracy around the world. The United States has used both unilateral and multilateral mechanisms to achieve these objectives, with varying amounts of emphasis at different times. These mechanisms have included a range of military, diplomatic, and economic tools.", "One of these core objectives\u2014enhancing U.S. security\u2014generally is interpreted as the effort to protect the nation's interests and includes, for instance, protecting the lives and safety of Americans; maintaining U.S. sovereignty over its values, territory, and institutions; and promoting the nation's well-being. The United States has wielded a deep and wide range of military, diplomatic, and economic tools to protect and advance its security interests. These include, for instance, the deployment of military forces to deter, dissuade, persuade, or compel others; the formation of alliances and coalitions to advance U.S. interests and counter aggression; and the use of U.S. economic power to advance its agenda or promote democratization, or to impose sanctions or withhold U.S. economic support to condemn or punish states hostile to U.S. interests.", "In this context, arms control and nonproliferation efforts are two of the tools that have occasionally been used to implement the U.S. national security strategy. They generally are not pursued as ends in and of themselves, and many argue that they should not become more important than the strategy behind them. But many believe their effective employment can be critical to the success of that broader strategy. Many analysts see them as a complement to, rather than a substitute for, military or economic efforts.", "Effective arms control measures are thought to enhance U.S. national security in a number of ways. For example, many arms control and nonproliferation tools include monitoring mechanisms that can provide early warning of efforts to evade or ignore the obligations. These mechanisms also promote transparency in a way that might increase U.S. knowledge about and understanding of the size, makeup, and operations of an opposing military force. This might not only ease U.S. military planning, but it might also reduce an opponent's incentives for and opportunities to attack U.S. forces, or the forces of its friends and allies. Transparency measures can also build confidence among wary adversaries. Effective arms control measures can also be designed to complement U.S. force structure objectives by limiting or restraining U.S. and other nations' forces. During times of declining defense budget resources, arms control measures may also help ensure reciprocity in force reductions. Indeed, some analysts consider such arms control measures essential to the success of our national military objectives.", "Similarly, U.S. officials from several Administrations have identified efforts to prevent the further spread of weapons of mass destruction and their means of delivery to be an essential element of U.S. national security. For one reason, proliferation can exacerbate regional tensions that might escalate to conflict and involve or threaten U.S. forces or those of its friends and allies. Proliferation might also introduce new and unexpected threats to U.S. allies or the U.S. homeland. Furthermore, proliferation can greatly complicate U.S. national military strategy, force structure design, and conduct of operations. And these weapons could pose a threat to the U.S. homeland if they were acquired by terrorists or subnational groups. Hence, the United States employs diplomatic, economic, and military tools to restrain these threats and enhance its national security.", "This view is not universal, however, as critics of arms control and nonproliferation arrangements often argue that the United States should not limit its own forces or flexibility in exchange for the promise that others might do so as well. They often argue that, absent stringent enforcement mechanisms that force other nations to comply with their obligations, these agreements can become unbalanced, with the United States abiding by the terms while others fail to do so. ", "During the Cold War, arms control played a key role in the relationship between the United States and Soviet Union. Although the agreements rarely forced either side to accept significant changes in i ts planned nuclear forces, the arms control process, and the formal negotiations, were often one of the few channels for communication between the United States and Soviet Union. Further, the United States participated in many multilateral regimes that sought to limit the spread of nuclear, chemical, and biological weapons and their means of delivery. Beginning in the early 1990s, it also extended assistance to Russia and other former Soviet states in an effort to reduce the threat that these weapons might fall into the hands of hostile states or nonstate actors. It has explored the possible use of similar tools to provide other nations with assistance in containing and controlling weapons and weapons-grade materials.", "During the George W. Bush Administration, the President and many in his Administration questioned the degree to which arms control negotiations and formal treaties could enhance U.S. security objectives. They argued that the United States did not need formal treaties to reduce or restrain its strategic nuclear forces. As a result, President Bush initially intended to reduce U.S. nuclear forces without signing a treaty that would require Russia to do the same. The Bush Administration only incorporated these reductions into a formal treaty after Russia insisted on such a document. Similarly, some in the Bush Administration argued that some formal, multilateral arms control regimes went too far in restraining U.S. options without limiting the forces of potential adversaries. Instead, the Administration preferred, when necessary, that the United States take unilateral military action or join in ad hoc coalitions to stem the proliferation of weapons of mass destruction.", "The absence of confidence in arms control during the George W. Bush Administration extended to the State Department, where the Administration removed the phrase \"arms control\" from all bureaus that were responsible for this policy area. The focus remained on nonproliferation, but it was seen as a policy area that no longer required formal treaties to meet its objectives. This changed with the Obama Administration. The State Department restored the phrase \"arms control\" to some bureau titles, and \"arms control\" was again listed as a central issue on the State Department website.", "The Obama Administration sought to enhance the role of arms control and nonproliferation agreements in U.S. national security policy. In a speech in Prague in April 2009, the President outlined an agenda that included the pursuit of a new strategic arms control treaty with Russia, efforts to secure the ratification and entry into force of the Comprehensive Test Ban Treaty, and the eventual negotiation of a Fissile Material Control Treaty. President Obama also convened an international nuclear security summit, in April 2010, in an effort to win global cooperation in efforts to contain and eliminate vulnerable nuclear materials. The United States has participated in three additional nuclear security summits, with the fourth and final summit occurring in early April 2016 in Washington. President Obama also pledged to take a number of steps to strengthen the Nuclear Nonproliferation Treaty in conjunction with its review conference in May 2010.", "President Obama's embrace of arms control and nonproliferation tools to address U.S. national security needs led many to expect wide-ranging agreements and activities in pursuit of these goals. However, efforts on this agenda produced limited results during President Obama's first term. The United States and Russia signed the 2010 New START Treaty, and have completed the implementation of its modest reductions, but there was little evidence of progress toward discussions on further reductions on nuclear weapons. President Obama also did not seek Senate advice and consent on the Comprehensive Test Ban Treaty, and the Fissile Material Control Treaty remained stalled in the U.N. Conference on Disarmament.", "Progress was also scant in President Obama's second term. Not only did the United States and Russia fail to negotiate further reductions in their offensive nuclear weapons, the United States highlighted concerns with Russia's compliance with past agreements. Specifically, the United States accused Russia of violating the 1987 Intermediate-range Nuclear Forces (INF) Treaty and the 1992 Open Skies Treaty. Some have argued that these actions, when combined with Russia's annexation of Crimea and invasion of Ukraine in early 2014, indicate that Russia may be rejecting the web of arms control and security agreements that have contributed to U.S., Russian, and European security for the past two decades. On the other hand, in 2015, the United States, Russia, and other nations reached an agreement with Iran that restricted Iran's nuclear program and introduced new, extensive international monitoring mechanisms to ensure that Iran does not acquire a nuclear weapon. The debate in Congress over its provisions and implications revealed broad disagreement about the role and value of arms control and nonproliferation agreements in supporting U.S. national security.", "The Trump Administration, like the Bush Administration, has voiced skepticism about the role that arms control and nonproliferation agreements can play in strengthening U.S. national security. This view reflects growing concerns about Russian compliance with existing arms control agreements, but also derives from the view that arms control does too much to restrict U.S. flexibility and too little to limit the capabilities of others. Moreover, while some would argue that growing tensions between the United States and Russia strengthen the case for further negotiated limits on U.S. and Russian forces, the Trump Administration, and the Obama Administration in its later years, notes that Russia is not, at this time, willing to pursue such agreements. In response to these views, and after years of trying to convince Russia to return to compliance with the INF Treaty, the Trump Administration announced on February 1, 2019, that the United States was suspending its participation in INF and would withdraw on August 2, 2019, following the treaty-mandated six-month withdrawal period. Moreover, while President Trump's approach to diplomatic engagement with North Korea has raised hope for some resolution to the nuclear crisis with that country, the Trump Administration has withdrawn U.S. support for the agreement with Iran."], "subsections": []}, {"section_title": "The Arms Control Agenda", "paragraphs": ["The United States has participated in numerous arms control and nonproliferation efforts over the past 60 years. These efforts have produced formal treaties and agreements that impose restrictions on U.S. military forces and activities, informal arrangements and guidelines that the United States has agreed to observe, and unilateral restraints on military forces and activities that the United States has adopted either on its own, or in conjunction with reciprocal restraints on other nations' forces and activities. Because these arms control arrangements affect U.S. national security, military programs, force levels, and defense spending, Congress has shown a continuing interest in the implementation of existing agreements and the prospects for further negotiations.", "The changing international environment in the 1990s led many analysts to believe that the United States and other nations could enter a new era of restraint in weapons deployments, weapons transfers, and military operations. These hopes were codified in several treaties signed between 1991 and 1996, such as the Strategic Arms Reduction Treaties (START I and START II), the Chemical Weapons Convention, and the Comprehensive Nuclear Test Ban Treaty. Yet, for many, hopes for a new era were clouded by the slow pace of ratification and implementation for many agreements. The 1991 START I Treaty did not enter into force until late 1994; the 1993 START II Treaty never entered into force and was replaced by a new, less detailed Strategic Offensive Reductions Treaty in 2002. The 1996 Comprehensive Test Ban Treaty (CTBT), in spite of widespread international support, failed to win approval from the U.S. Senate in October 1999. Furthermore, India, Pakistan, Iran, and North Korea raised new questions about the viability of the Nuclear Nonproliferation Treaty and its role in stemming nuclear proliferation.", "Some progress did occur in the latter years of the decade. In 1997, the United States and Russia, the two nations with the largest stockpiles of chemical weapons, both ratified the Chemical Weapons Convention. In December 1997, more than 120 nations signed an international agreement banning the use of antipersonnel land mines; however, a number of major nations, including the United States, have so far declined to sign. However, the U.S. Senate's rejection of the CTBT, the Bush Administration's withdrawal from the ABM Treaty in 2002, and the U.S. rejection of a verification protocol for the Biological Weapons Convention led many nations to question the U.S. commitment to the arms control process.", "During the Bush Administration, the United States outlined new initiatives in nonproliferation policy that took a far less formal approach, with voluntary guidelines and voluntary participation replacing treaties and multilateral conventions. The Bush Administration also signaled a change in the focus of U.S. nonproliferation policy. Instead of offering its support to international regimes that sought to establish nonproliferation norms that apply to all nations, the Bush Administration turned to arrangements that sought, instead, to prevent proliferation only to those nations and groups that the United States believed could threaten U.S. or international security. In essence, nonproliferation became a tool of antiterrorism policy.", "The Obama Administration also viewed nonproliferation policy as a tool of antiterrorism policy, and highlighted the importance of keeping nuclear, chemical, and biological weapons away from nonstate actors who might threaten the United States or its allies. But it also viewed nonproliferation as a more general tool of U.S. national security policy. And, where the Bush Administration focused its efforts on denying these weapons to specific nations or groups who might threaten the United States, the Obama Administration adopted the more general goals of establishing and supporting international norms and regimes to control these weapons, regardless of which nations might seek them. For example, in a speech in Moscow in July 2009, President Obama noted that \"the notion that prestige comes from holding these weapons, or that we can protect ourselves by picking and choosing which nations can have these weapons, is an illusion.\" He went on to state that stopping the spread of nuclear weapons \"is not about singling out individual nations\u2014it's about the responsibilities of all nations.\"", "The Trump Administration has offered some support for existing arms control and nonproliferation tools; it noted, in the 2018 Nuclear Posture Review, that the United States continues to support the goals of the 1968 Nuclear Nonproliferation Treaty and that it would continue to abide by the terms of the 2010 New START Treaty, although it had not decided whether to extend it past 2021. At the same time, the Administration has noted that, in the current international security environment, the United States might be better served by bolstering its military capabilities than by negotiating additional limits or reductions.", "This report provides an overview of many of the key arms control and nonproliferation agreements and endeavors of the past 40 years. It is divided into three sections. The first describes arms control efforts between the United States and the states of the former Soviet Union, covering both formal, bilateral treaties, and the cooperative threat reduction process. The second section describes multilateral nuclear nonproliferation efforts, covering both formal treaties and less formal accommodations that have been initiated in recent years. The final section reviews treaties and agreements that address chemical, biological, and conventional weapons.", "The report concludes with several appendices. These provide a list of treaties and agreements that the United States is a party to, a description of the treaty ratification process, and a list of the bilateral and international organizations tasked with implementation of arms control efforts."], "subsections": []}]}, {"section_title": "Arms Control Between the United States and States of the Former Soviet Union", "paragraphs": [], "subsections": [{"section_title": "The Early Years: SALT I and SALT II", "paragraphs": ["The United States and Soviet Union signed their first formal agreements limiting nuclear offensive and defensive weapons in May 1972. The Strategic Arms Limitation Talks, known as SALT, produced two agreements\u2014the Interim Agreement ... on Certain Measures with Respect to the Limitation of Strategic Offensive Arms and the Treaty ... on the Limitation of Anti-Ballistic Missile Systems. These were followed, in 1979, by the Strategic Arms Limitation Treaty, known as SALT II, which sought to codify equal limits on U.S. and Soviet strategic offensive nuclear forces."], "subsections": [{"section_title": "The Interim Agreement on Offensive Arms", "paragraphs": ["The Interim Agreement on Offensive Arms imposed a freeze on the number of launchers for intercontinental ballistic missiles (ICBMs) and submarine-launched ballistic missiles (SLBMs) that the United States and Soviet Union could deploy. The parties agreed that they would not begin construction of new ICBM launchers after July 1, 1972; at the time the United States had 1,054 ICBM launchers and the Soviet Union had 1,618 ICBM launchers. They also agreed to freeze their number of SLBM launchers and modern ballistic missile submarines, although they could add SLBM launchers if they retired old ICBM launchers. A protocol to the Treaty indicated that the United States could deploy up to 710 SLBM launchers on 44 submarines, and the Soviet Union could deploy up to 950 SLBM launchers on 62 submarines.", "The inequality in these numbers raised serious concerns both in Congress and in the policy community in Washington. When approving the agreement, Congress adopted a provision, known as the Jackson amendment, that mandated that all future arms control agreements would have to contain equal limits for the United States and Soviet Union.", "The Interim Agreement was to remain in force for five years, unless the parties replaced it with a more comprehensive agreement limiting strategic offensive weapons. In 1977, both nations agreed to observe the agreement until the completed the SALT II Treaty."], "subsections": []}, {"section_title": "The Strategic Arms Limitation Treaty (SALT II)", "paragraphs": ["The United States and Soviet Union completed the SALT II Treaty in June 1979, after seven years of negotiations. During these negotiations, the United States sought limits on quantitative and qualitative changes in Soviet forces. The U.S. negotiating position also reflected the congressional mandate for numerically equal limits on both nations' forces. As a result, the treaty limited each nation to a total of 2,400 ICBM launchers, SLBM launchers, and heavy bombers, with this number declining to 2,250 by January 1, 1981. Within this total, the Treaty contained sublimits for the numbers launchers that could be deployed for ICBMs with multiple independent reentry vehicles (MIRVed ICBMs); MIRVed ICBMs and MIRVed SLBMs; and MIRVed ICBMs, MIRVed SLBMs, MIRVed air-to-surface ballistic missiles (ASBMs), and heavy bombers. The Treaty would not have limited the total number of warheads that could be carried on these delivery vehicles, which was a growing concern with the deployment of large numbers of multiple-warhead missiles, but the nations did agree that they would not increase the numbers of warheads on existing types of missiles and would not test new types of ICBMs with more than 10 warheads and new types of SLBMs with more than 14 warheads. They also agreed to provisions that were designed to limit missile modernization programs, in an effort to restrain qualitative improvements in their strategic forces.", "Although it contained equal limits on U.S. and Soviet forces, the SALT II Treaty still proved to be highly controversial. Some analysts argued that the Treaty would fail to curb the arms race because the limits on forces were equal to the numbers already deployed by the United States and Soviet Union; they argued for lower limits and actual reductions. Other analysts argued that the Treaty would allow the Soviet Union to maintain strategic superiority over the United States because the Soviet force of large, land-based ballistic missiles would be able to carry far greater numbers of warheads, even within the equal limits on delivery vehicles, than U.S. ballistic missiles. Some argued that, with this advantage, the Soviet Union would be able to target all U.S. land-based ICBMs in a first strike, which created a \"window of vulnerability\" for the United States. The Treaty's supporters argued that the Soviet advantage in large MIRVed ICBMs was more than offset by the U.S. advantage in SLBM warheads, which could not be destroyed in a first strike and could retaliate against Soviet targets, and the U.S. advantage in heavy bombers.", "The continuing Soviet build-up of strategic nuclear forces, along with the taking of U.S. hostages in Iran and other challenges to the U.S. international position in the late 1970s, combined with the perceived weaknesses to the Treaty to raise questions about whether the Senate would muster the votes needed to consent to the Treaty's ratification. Shortly after the Soviet Union invaded Afghanistan in December 1979, President Carter withdrew the Treaty from the Senate's consideration."], "subsections": []}, {"section_title": "The ABM Treaty", "paragraphs": ["The 1972 ABM Treaty permitted the United States and Soviet Union to deploy ABM interceptors at two sites, one centered on the nation's capital and one containing ICBM silo launchers. Each site could contain up to 100 ground-based launchers for ABM interceptor missiles, along with specified radars and sensors. The ABM Treaty also obligated each nation not to develop, test, or deploy ABM systems for the \"defense of the territory of its country\" and not to provide a base for such a defense. It forbade testing and deployment of space-based, sea-based, or air-based ABM systems or components and it imposed a number of qualitative limits on missile defense programs. The Treaty, however, imposed no restrictions on defenses against aircraft, cruise missiles, or theater ballistic missiles.", "In a Protocol signed in 1974, each side agreed that it would deploy an ABM system at only one site, either around the nation's capital or around an ICBM deployment area. The Soviet Union deployed its site around Moscow; this system has been maintained and upgraded over the years, and remains operational today. The United States deployed its ABM system around ICBM silo launchers located near Grand Forks, ND; it operated this facility briefly in 1974 before closing it down when it proved to be not cost effective.", "The ABM Treaty was the source of considerable controversy and debate for most of its history. Presidents Reagan, George H. W. Bush, and Clinton all wrestled with the conflicting goals of defending the United States against ballistic missile attack while living within the confines of the ABM Treaty. President George W. Bush resolved this conflict in 2002, when he announced that the United States would withdraw from the ABM Treaty so that it could deploy ballistic missile defenses. The substance of this debate during the Clinton and Bush years is described in more detail below."], "subsections": []}]}, {"section_title": "The Reagan and Bush Years: INF and START", "paragraphs": ["During the election campaign of 1980, and after taking office in January 1981, President Ronald Reagan pledged to restore U.S. military capabilities, in general, and nuclear capabilities, in particular. He planned to expand U.S. nuclear forces and capabilities in an effort to counter the perceived Soviet advantages in nuclear weapons. Initially, at least, he rejected the use of arms control agreements to contain the Soviet threat. However, in 1982, after Congress and many analysts pressed for more diplomatic initiatives, the Reagan Administration outlined negotiating positions to address intermediate-range missiles, long-range strategic weapons, and ballistic missile defenses. These negotiations began to bear fruit in the latter half of President Reagan's second term, with the signing of the Intermediate-Range Nuclear Forces Treaty in 1987. President George H. W. Bush continued to pursue the first Strategic Arms Reduction Treaty (START), with the United States and Soviet Union, signing this Treaty in July 1991. The collapse of the Soviet Union later that year led to calls for deeper reductions in strategic offensive arms. As a result, the United States and Russia signed START II in January 1993, weeks before the end of the Bush Administration."], "subsections": [{"section_title": "The Intermediate-Range Nuclear Forces (INF) Treaty", "paragraphs": ["In December 1979, NATO decided upon a \"two track\" approach to intermediate-range nuclear forces (INF) in Europe: it would seek negotiations with the Soviets to limit such systems, and at the same time schedule deployments as a spur to such negotiations. Negotiating sessions began in the fall of 1980 and continued until November 1983, when the Soviets left the talks upon deployment of the first U.S. INF systems in Europe. The negotiations resumed in January 1985. At the negotiations, the Reagan Administration initially called for a \"double zero\" option, which would eliminate all short- as well as long-range INF systems, a position at the time viewed by most observers to be unattractive to the Soviets. The negotiations proceeded to discuss possible limits on the systems, with progress slowed by the Soviet refusal to consider limits on its systems in Asia. Nevertheless, significant progress began to occur during the Gorbachev regime. At the Reykjavik summit in October 1986, Gorbachev agreed to include reductions of Soviet INF systems in Asia. Then, in June 1987, the Soviets proposed a global ban on short- and long-range INF systems, which was similar to the U.S. proposal for a double zero. Gorbachev also accepted the U.S. proposal for an intrusive verification regime.", "The United States and the Soviet Union signed the Treaty on Intermediate-Range Nuclear Forces (INF) on December 8, 1987. The INF Treaty was seen as a significant milestone in arms control because it established an intrusive verification regime and because it eliminated entire classes of weapons that both sides regarded as modern and effective. The United States and Soviet Union agreed to destroy all intermediate-range and shorter-range nuclear-armed ballistic missiles and ground-launched cruise missiles, which are those missiles with a range between 300 and 3,400 miles. The launchers associated with the controlled missiles were also to be destroyed. The signatories agreed that the warheads and guidance systems of the missiles need not be destroyed; they could be used or reconfigured for other systems not controlled by the Treaty.", "The Soviets agreed to destroy approximately 1,750 missiles and the United States agreed to destroy 846 missiles, establishing a principle that asymmetrical reductions were acceptable in order to achieve a goal of greater stability. On the U.S. side, the principal systems destroyed were the Pershing II ballistic missile and the ground-launched cruise missile (GLCM), both single-warhead systems. On the Soviet side, the principal system was the SS-20 ballistic missile, which carried three warheads. These systems, on both sides, were highly mobile and able to strike such high-value targets as command-and-control centers, staging areas, airfields, depots, and ports. The Soviets also agreed to destroy a range of older nuclear missiles, as well as the mobile, short-range SS-23, a system developed and deployed in the early 1980s. The parties had eliminated all their weapons by May 1991.", "The verification regime of the INF Treaty permitted on-site inspections of selected missile assembly facilities and all storage centers, deployment zones, and repair, test, and elimination facilities. Although it did not permit \"anywhere, anytime\" inspections, it did allow up to 20 short-notice inspections of sites designated in the Treaty. The two sides agreed to an extensive data exchange, intended to account for all systems covered by the agreement. The Treaty also established a continuous portal monitoring procedure at one assembly facility in each country. Inspections under the INF Treaty continued until May 2001, however, the United States continues to operate its site at Russia's Votkinsk Missile Assembly facility under the terms of the 1991 START Treaty.", "The INF Treaty returned to the news in 2007. Russia, partly in response to U.S. plans to deploy a missile defense radar in the Czech Republic and interceptor missiles in Poland, stated that it might withdraw from the INF Treaty. Some Russian officials claimed this would allow Russia to deploy missiles with the range needed to threaten the missile defense system, in case it were capable of threatening Russia's strategic nuclear forces. Analysts outside Russia also noted that Russia might be responding to concerns about the growing capabilities of China's missiles, or of those in other countries surrounding Russia. ", "During the Obama Administration, the United States grew concerned about Russia's testing and development of a new ground-launched cruise missile of INF range. Since 2014, the United States has expressed these concerns in the State Department's annual report on Adherence to and Compliance with Arms Control, Nonproliferation, and Disarmament Agreements and Commitments . This report has stated that the United States has determined that \"the Russian Federation is in violation of its obligations under the [1987 Intermediate-range Nuclear Forces] INF Treaty not to possess, produce, or flight-test a ground-launched cruise missile (GLCM) with a range capability of 500 km to 5,500 km, or to possess or produce launchers of such missiles.\" In the 2018 version of the report, it identified the missile's designation as the 9M729. ", "The United States addressed its concerns about this missile repeatedly with Russia in a number of diplomatic meetings, including in 2016 and 2017 meetings of the Treaty's Special Verification Commission (SVC). Russia first denied that any such cruise missile existed, and after the United States identified the specific missile, Russia denied that it had been tested to INF range. It responded with its own accusations of U.S. noncompliance, noting, particularly, that U.S. missile defense launchers located in Romania could be equipped with offensive ground-launched cruise missiles. The United States has denied this accusation.", "According to U.S. officials, Russia began to deploy the new cruise missile in late 2016. The Trump Administration conducted an extensive review of the INF Treaty during 2017 to assess the potential security implications of Russia's violation and to determine how the United States would respond going forward. On December 8, 2017\u2014the 30 th anniversary of date when the Treaty was signed\u2014the Administration announced that the United States would implement an integrated response that included diplomatic, military, and economic measures. This includes establishing a new program in the Pentagon that will fund research into a possible new ground-launched cruise missile. However, in October 2018, then-Secretary of Defense Mattis informed U.S. allies in NATO that the situation had become \"untenable\" because Russia refused to acknowledge and address its violation. On October 20, 2018, President Trump announced that the United States would withdraw from the Treaty, and Secretary of State Pompeo announced that the United States had submitted its formal notice of withdrawal to Russia on February 1, 2019. Russia followed suit by suspending its participation in the Treaty, leading to the near certainty that the Treaty will lapse on August 2, 2019."], "subsections": []}, {"section_title": "The Strategic Arms Reduction Treaty (START)", "paragraphs": ["Like INF, START negotiations began in 1982, but stopped between 1983 and 1985 after a Soviet walk-out in response to the U.S. deployment of intermediate-range missiles in Europe. They resumed later in the Reagan Administration, and were concluded in the first Bush Administration. The United States and Soviet Union signed the first Strategic Arms Reduction Treaty (START) on July 31, 1991."], "subsections": [{"section_title": "START After the Soviet Union", "paragraphs": ["The demise of the Soviet Union in December 1991 immediately raised questions about the future of the Treaty. At that time, about 70% of the strategic nuclear weapons covered by START were deployed at bases in Russia; the other 30% were deployed in Ukraine, Kazakhstan, and Belarus. Russia initially sought to be the sole successor to the Soviet Union for the Treaty, but the other three republics did not want to cede all responsibility for the Soviet Union's nuclear status and treaty obligations to Russia. In May 1992, the four republics and the United States signed a Protocol that made all four republics parties to the Treaty. At the same time, the leaders of Belarus, Ukraine, and Kazakhstan agreed to eliminate all of their nuclear weapons during the seven-year reduction period outlined in START. They also agreed to sign the Nuclear Non-Proliferation Treaty (NPT) as non-nuclear weapons states.", "The U.S. Senate gave its consent to the ratification of START on October 1, 1992. The Russian parliament consented to the ratification of START on November 4, 1992, but it stated that Russia would not exchange the instruments of ratification for the Treaty until all three of the other republics adhered to the NPT as non-nuclear states. Kazakhstan completed the ratification process in June 1992 and joined the NPT as a non-nuclear weapon state on February 14, 1994. Belarus approved START and the NPT on February 4, 1993, and formally joined the NPT as a non-nuclear weapon state on July 22, 1993. Ukraine's parliament approved START in November 1993, but its approval was conditioned on Ukraine's retention of some of the weapons based on its territory and the provision of security guarantees by the other nuclear weapons states.", "In early 1994, after the United States, Russia, and Ukraine agreed that Ukraine should receive compensation and security assurances in exchange for the weapons based on its soil, the parliament removed the conditions from its resolution of ratification. But it still did not approve Ukraine's accession to the NPT. The Ukrainian parliament took this final step on November 16, 1994, after insisting on and apparently receiving additional security assurances from the United States, Russia, and Great Britain. START officially entered into force with the exchange of the instruments of ratification on December 5, 1994."], "subsections": []}, {"section_title": "START Provisions", "paragraphs": ["START limited long-range nuclear forces\u2014land-based intercontinental ballistic missiles (ICBMs), submarine-launched ballistic missiles (SLBMs), and heavy bombers\u2014in the United States and the newly independent states of the former Soviet Union. Each side could deploy up to 6,000 attributed warheads on 1,600 ballistic missiles and bombers. (Some weapons carried on bombers do not count against the Treaty's limits, so each side could deploy 8,000 or 9,000 actual weapons.) Each side could deploy up to 4,900 warheads on ICBMs and SLBMs. Throughout the START negotiations, the United States placed a high priority on reductions in heavy ICBMs because they were thought to be able to threaten a first strike against U.S. ICBMs. Therefore, START also limits each side to 1,540 warheads on \"heavy\" ICBMs, a 50% reduction in the number of warheads deployed on the SS-18 ICBMs in the former Soviet republics.", "START did not require the elimination of most of the missiles removed from service. The nations had to eliminate launchers for missiles that exceeded the permitted totals, but, in most cases, missiles could be placed in storage and warheads could either be stored or reused on missiles remaining in the force.", "START contained a complex verification regime. Both sides collect most of the information needed to verify compliance with their own satellites and remote sensing equipment\u2014the National Technical Means of Verification (NTM). But the parties also used data exchanges, notifications, and on-site inspections to gather information about forces and activities limited by the Treaty. Taken together, these measures are designed to provide each nation with the ability to deter and detect militarily significant violations. (No verification regime can ensure the detection of all violations. A determined cheater could probably find a way to conceal some types of violations.) Many also believe that the intrusiveness mandated by the START verification regime and the cooperation needed to implement many of these measures built confidence and encouraged openness among the signatories.", "The United States and Russia completed the reductions in their forces by the designated date of December 5, 2001. All the warheads from 104 SS-18 ICBMs in Kazakhstan were removed and returned to Russia and all the launchers in that nation have been destroyed. Ukraine has destroyed all the SS-19 ICBM and SS-24 ICBM launchers on its territory and returned all the warheads from those missiles to Russia. Belarus had also returned to Russia all 81 SS-25 missiles and warheads based on its territory by late November 1996."], "subsections": []}, {"section_title": "START Expiration", "paragraphs": ["The START Treaty expired in December 2009. According to the terms of the Treaty, the parties could allow START to lapse, extend it without modification for another five years, or seek to modify the Treaty before extending it for five-year intervals. The United States and Russia began, in 2006, to hold a series of discussions about the future of START, but, through the latter years of the Bush Administration, the two sides held sharply different views on what that future should be. Russian officials believed that the two nations should replace START with a new Treaty that would reduce the numbers of deployed warheads but contain many of the definitions, counting rules, and monitoring provisions of START. The Bush Administration rejected that approach; it noted that the new Moscow Treaty (described below) called for further reductions in offensive nuclear weapons and it argued that many of the detailed provisions in START were no longer needed because the United States and Russia were no longer enemies. The United States suggested that the two sides reaffirm their commitment to the Moscow Treaty, and add to it an informal monitoring regime that would extend some of the monitoring and verification provisions in START. Analysts outside government also suggested that the nations extend the monitoring provisions, at least through 2012, as the Moscow Treaty did not have its own verification regime. Some in the United States, however, objected to this approach because some of the monitoring provisions had begun to impinge on U.S. strategic weapons and missile defense programs.", "The Obama Administration altered the U.S. approach and decided to negotiate a new Treaty that would replace START (this is discussed in more detail below). The United States and Russia began these discussions in April 2009, but were unable to complete them before START expired on December 5, 2009. As is noted, below, they did complete a New START Treaty in April 2010."], "subsections": []}]}, {"section_title": "START II", "paragraphs": ["The United States and Russia signed the second START Treaty, START II, on January 3, 1993, after less than a year of negotiations. The Treaty never entered into force. Its consideration was delayed for several years during the 1990s, but it eventually received approval from both the U.S. Senate and Russian parliament. Nevertheless, it was overcome by events in 2002."], "subsections": [{"section_title": "START II Provisions", "paragraphs": ["START II would have limited each side to between 3,000 and 3,500 warheads; reductions initially were to occur by the year 2003 and would have been extended until 2007 if the nations had approved a new Protocol. It would have banned all MIRVed ICBMs and would have limited each side to 1,750 warheads on SLBMs.", "To comply with these limits the United States would have removed two warheads (a process known as \"downloading\") from each of its 500 3-warhead Minuteman III missiles and eliminated all launchers for its 50 10-warhead MX missiles. The United States also stated that it would reduce its SLBM warheads by eliminating 4 Trident submarines and deploying the missiles on the 14 remaining Trident submarines with 5, rather than 8, warheads. Russia would have eliminated all launchers for its 10-warhead SS-24 missiles and 10-warhead SS-18 missiles. It would also have downloaded to a single warhead 105 6-warhead SS-19 missiles, if it retained those missiles. It would also have eliminated a significant number of ballistic missile submarines, both for budget reasons and to reduce to START II limits. These changes would have brought Russian forces below the 3,500 limit because so many of Russia's warheads are deployed on MIRVed ICBMs. As a result, many Russian officials and Duma members insisted that the United States and Russia negotiate a START III Treaty, with lower warhead numbers, so that Russia would not have to produce hundreds of new missiles to maintain START II levels.", "START II implementation would have accomplished the long-standing U.S. objective of eliminating the Soviet SS-18 heavy ICBMs. The Soviet Union and Russia had resisted limits on these missiles in the past. Russia would have achieved its long-standing objective of limiting U.S. SLBM warheads, although the reductions would not have been as great as those for MIRVed ICBMs. The United States had long resisted limits on these missiles, but apparently believed a 50% reduction was a fair trade for the complete elimination of Russia's SS-18 heavy ICBMs.", "START II would have relied on the verification regime established by START, with a few new provisions. For example, U.S. inspectors would be allowed to watch Russia pour concrete into the SS-18 silos and to measure the depth of the concrete when Russia converted the silos to hold smaller missiles. In addition, Russian inspectors could have viewed the weapons carriage areas on U.S. heavy bombers to confirm that the number of weapons the bombers are equipped to carry did not exceed the number attributed to that type of bomber."], "subsections": []}, {"section_title": "START II Ratification", "paragraphs": ["Although START II was signed in early January 1993, its full consideration was delayed until START entered into force at the end of 1994. The U.S. Senate further delayed its consideration during a Senate dispute over the future of the Arms Control and Disarmament Agency. The Senate eventually approved ratification of START II, by a vote of 87-4, on January 26, 1996.", "The Russian Duma also delayed its consideration of START II. Many members of the Duma disapproved of the way the Treaty would affect Russian strategic offensive forces and many objected to the economic costs Russia would bear when implementing the treaty. The United States sought to address the Duma's concerns during 1997, by negotiating a Protocol that would extend the elimination deadlines in START II, and, therefore, reduce the annual costs of implementation, and by agreeing to negotiate a START III Treaty after START II entered into force. But this did not break the deadlock; the Duma again delayed its debate after the United States and Great Britain launched air strikes against Iraq in December 1998. The Treaty's future clouded again after the United States announced its plans in January 1999 to negotiate amendments to the 1972 ABM Treaty, and after NATO forces began their air campaign in Yugoslavia in April 1999.", "President Putin offered his support to START II and pressed the Duma for action in early 2000. He succeeded in winning approval for the treaty on April 14 after promising, among other things, that Russia would withdraw from the Treaty if the United States withdrew from the 1972 ABM Treaty. However, the Federal Law on Ratification said the Treaty could not enter into force until the United States approved ratification of several 1997 agreements related to the 1972 ABM Treaty. President Clinton never submitted these to the Senate, for fear they would be defeated. The Bush Administration also never submitted these to the Senate, announcing, instead, in June 2002, that the United States would withdraw from the ABM Treaty. Russia responded by announcing that it had withdrawn from START II and would not implement the Treaty's reductions."], "subsections": []}]}]}, {"section_title": "The Clinton and Bush Years: Moving Past START and the ABM Treaty", "paragraphs": ["The arms control process between the United States and Russia essentially stalled during the 1990s, as efforts to ratify and implement START II dragged on. In 1997, in an effort to move the agenda forward, Presidents Clinton and Yeltsin agreed to a framework for a START III Treaty. But these negotiations never produced a Treaty, as the U.S.-Russian arms control agenda came to be dominated by U.S. plans for ballistic missile defenses and issues related to the ABM Treaty. When President Bush took office in 2001, he had little interest in pursuing formal arms control agreements with Russia. He signed the Strategic Offensive Reductions Treaty (known as the Moscow Treaty) in 2002, even though he would have preferred that the United States and Russia each set their force levels without any formal limits."], "subsections": [{"section_title": "START III Framework for Strategic Offensive Forces", "paragraphs": ["Many in Russia argued the United States and Russia should bypass START II and negotiate deeper reductions in nuclear warheads that were more consistent with the levels Russia was likely to retain by the end of the 1990s. The Clinton Administration did not want to set START II aside, in part because it wanted to be sure Russia eliminated its MIRVed ICBMS. However, many in the Administration eventually concluded that Russia would not ratify START II without some assurances that the warhead levels would decline further. So the United States agreed to proceed to START III, but only after START II entered into force; Presidents Clinton and Yeltsin agreed to this timeline in March 1997. The START III framework called for reductions to between 2,000 and 2,500 warheads for strategic offensive nuclear weapons on each side.", "The United States and Russia held several rounds of discussions on START III, but they did not resolve their differences before the end of the Clinton Administration. President Bush did not pursue the negotiations after taking office in 2001. The demise of these discussions left many issues that had been central to the U.S.-Russian arms control process unresolved. For example, Presidents Clinton and Yeltsin had agreed to explore possible measures for limiting long-range, nuclear-armed, sea-launched cruise missiles and other tactical nuclear weapons in the START III framework. These weapons systems are not limited by existing treaties. Many in Congress have joined analysts outside the government in expressing concerns about the safety and security of Russia's stored nuclear weapons and about the numerical discrepancy between U.S. and Russian nonstrategic nuclear weapons.", "In addition, when establishing the START III framework, the United States and Russia agreed that they would explore proposals to enhance transparency and promote the irreversibility of warhead reductions. Many analysts viewed this step as critical to lasting, predictable reductions in nuclear weapons. The Bush Administration, however, rejected this approach. Although it pledged to eliminate some warheads removed from deployment, and implemented deep reductions in the U.S. stockpile of stored nuclear weapons, it did not offer any measures promoting the transparency or irreversibility of this process. It wanted to retain U.S. flexibility and the ability to restore warheads to deployed forces. Many critics of the Bush Administration opposed this policy, in part, because they argued it would undermine U.S. efforts to encourage Russia to eliminate warheads that might be at risk of loss or theft."], "subsections": []}, {"section_title": "Ballistic Missile Defenses and the ABM Treaty", "paragraphs": ["As was noted above, the 1972 Anti-Ballistic Missile (ABM) Treaty and 1974 Protocol allowed the United States and Soviet Union to deploy limited defenses against long-range ballistic missiles. The United States completed, then quickly abandoned a treaty-compliant ABM system near Grand Forks, ND, in 1974. The Soviet Union deployed, and Russia continues to operate, a treaty-compliant system around Moscow."], "subsections": [{"section_title": "Missile Defense Plans and Programs", "paragraphs": ["During the 1980s and early 1990s, the United States conducted research on a variety of ballistic missile defense technologies. In 1983 President Reagan collected and expanded these programs in the Strategic Defense Initiative (SDI), which sought to develop and deploy comprehensive missile defenses that would defend the United States against a deliberate, massive attack from the Soviet Union. The first Bush Administration changed this focus, seeking instead to provide a defense against possible limited missile attacks that might arise from any number of countries throughout the world.", "After the Persian Gulf War in 1991, with Iraq's attacks with Scud missiles alerting many to the dangers of missile proliferation and the threats posed by short- and medium-range theater ballistic missiles, the United States began developing several advanced theater missile defense (TMD) systems. At the same time, the Clinton Administration pursued research and technology development for national missile defenses (NMD). The Department of Defense concluded that there was no military requirement for the deployment of such a system after intelligence estimates found that no additional nations (beyond China, Russia, France, and Great Britain) were likely to develop missiles that could threaten the continental United States for at least the next 10-15 years. However, after a congressionally mandated commission raised concerns about the proliferation of long-range missiles in July 1998 and North Korea tested a three-stage missile in August 1998, the Clinton Administration began to consider the deployment of an NMD, with a program structured to achieve that objective in 2005. On September 1, 2000, after disappointing test results, President Clinton announced that he would not authorize construction needed to begin deployment of an NMD.", "President George W. Bush altered U.S. policy on missile defenses. His Administration sought to develop a layered defense, with land-based, sea-based, and space-based components, that could protect the United States, its allies, and its forces overseas from short-, medium-, and long-range ballistic missiles. It deployed land-based missile interceptors for defense against long-range missiles in Alaska and California, and pursued the deployment of defenses against shorter-range missiles on naval ships. The Bush Administration declared the interceptors in Alaska to be operational in late 2004, but their status and capabilities remain uncertain."], "subsections": []}, {"section_title": "ABM Treaty Issues and Negotiations", "paragraphs": ["The missile defense systems advocated by the Reagan Administration and first Bush Administration would not have been permitted under the ABM Treaty. In 1985, the United States proposed, in negotiations with the Soviet Union, that the two sides replace the ABM Treaty with an agreement that would permit deployment of more extensive defenses. These negotiations failed, and, in 1993, the Clinton Administration altered their focus. It sought a demarcation agreement to clarify the difference between theater missile defenses and strategic missile defenses so the United States could proceed with theater missile defense (TMD) programs without raising questions about compliance with the Treaty.", "The United States and Russia signed two joint statements on ABM/TMD Demarcation in September 1997. As amendments to the ABM Treaty, these agreements required the advice and consent of the Senate before they entered into force. But President Clinton never submitted them to the Senate, knowing that the required 67 votes would prove elusive as many of the Senators in the Republican majority believed the ABM Treaty, even if modified, would stand in the way of the deployment of robust missile defenses.", "In February 1999, the United States and Russia began to discuss ABM Treaty modifications that would permit deployment of a U.S. national missile defense (NMD) system. The United States sought to reassure Russia that the planned NMD would not interfere with Russia's strategic nuclear forces and that the United States still viewed the ABM Treaty as central to the U.S.-Russian strategic balance. The Russians were reportedly unconvinced, noting that the United States could expand its system so that it could intercept a significant portion of Russia's forces. They also argued that the United States had overstated the threat from rogue nations. Furthermore, after Russia approved START II, President Putin noted that U.S. withdrawal from the ABM Treaty would lead not only to Russian withdrawal from START II, but also Russian withdrawal from a wider range of arms control agreements. Through the end of the Clinton Administration, Russia refused to consider U.S. proposals for modifications to the ABM Treaty. Some argued that Russia's position reflected its belief that the United States would not withdraw from the ABM Treaty and, therefore, if Russia refused to amend it, the United States would not deploy national missile defenses.", "Officials in the George W. Bush Administration referred to the ABM Treaty as a relic of the Cold War and the President stated that the United States would need to move beyond the limits in the Treaty to deploy robust missile defenses. In discussions that began in the middle of 2001, the Bush Administration sought to convince Russia to accept a U.S. proposal for the nations to \"set aside\" the Treaty together. The Administration also offered Russia extensive briefings to demonstrate that its missile defense program would not threaten Russia but that the ABM Treaty would interfere with the program. Russia would not agree to set the Treaty aside, and, instead, suggested that the United States identify modifications to the Treaty that would allow it to pursue the more robust testing program contained in its proposals. But, according to some reports, Russia would have insisted on the right to determine whether proposed tests were consistent with the Treaty. The Bush Administration would not accept these conditions and President Bush announced, on December 13, 2001, that the United States would withdraw from the ABM Treaty. This withdrawal took effect on June 13, 2002. Russia's President Putin stated that this action was \"mistaken.\" Russia responded by withdrawing from the START II Treaty, but this action was largely symbolic as the Treaty seemed likely to never enter into force."], "subsections": []}, {"section_title": "Missile Defense After the ABM Treaty", "paragraphs": ["In addition to deploying long-range missile defense interceptors in Alaska and California, the George W. Bush Administration proposed that the United States deploy a third missile defense site in Europe to defend against a potential Iranian missile threat. The system was to include 10 interceptors based in Poland and a radar in the Czech Republic. Russia's President Putin and his successor, Vladimir Medvedev, argued that the proposal would reignite the arms race and upset U.S.-Russian-European security relations. U.S. officials disputed Russia's objections, noting that the interceptors would not be able to intercept Russian missiles or undermine Russia's deterrent capabilities. In mid-2007, Russia offered to cooperate on missile defense, proposing the use of a Russian-leased radar in Azerbaijan, but urging that U.S. facilities not be built in Eastern Europe. President Bush welcomed the idea in principle, but insisted upon the need for the European sites. Despite ongoing discussions over the issue, sharp Russian criticism of the program continued. Medvedev said that Russia might deploy Iskander tactical missiles to Kaliningrad, but later stated that Moscow would not do so if the United States reversed its plan to emplace GMD facilities in Poland and the Czech Republic. ", "Congress resisted the Bush Administration's request for funding for this system. It withheld much of the funding, pending at least two successful tests and the completion of agreements with the Polish and Czech governments. It also requested further reports on the need for and capabilities of the proposed system. ", "The Obama Administration reviewed and restructured U.S. plans for a missile defense site in Europe. On September 17, 2009, the Administration announced it would cancel the system proposed by the Bush Administration. Instead, Defense Secretary Gates announced U.S. plans to develop and deploy a regional BMD capability that could be deployed around the world on relatively short notice during crises or as the situation may demand. Gates argued this new capability, based primarily around current BMD sensors and interceptors, would be more responsive and adaptable to growing concern over the direction of Iranian short- and medium-range ballistic missile proliferation. This capability would continue to evolve and expand as the United States moved forward with the concept known as the \"Phased Adaptive Approach.\" As missile threats matured during the next decade, the missile defense system would include interceptors that could respond against more numerous and more sophisticated threats. ", "The United States and its NATO allies have moved forward with the deployment of components of this missile defense system; ships armed with the Aegis missile defense system are deployed at Rota, Spain, and patrol regularly in the Mediterranean. The United States has also deployed missile defense assets on land in Europe, in an effort known as Aegis Ashore. The United States completed deployment of the site in Romania on December 1, 2015, and plans to complete the deployment in Poland in the 2018-2019 time frame. While the United States insists that these systems do not have the range or capability to threaten Russian ballistic missiles, Russia continues to object to these deployments and to insist that it is unwilling to discuss further limits on offensive weapons until the United States agrees to limit the numbers and capabilities of its missile defense systems.", "The Trump Administration is conducting a new Missile Defense Review that will chart a path forward for U.S. missile defense systems. While this review is likely to continue to support the deployment of missile defenses in Europe and Asia to address regional missile threats from nations such as North Korea and Iran, it may also outline plans to move toward the deployment of more robust sensors, and possibly interceptors, that could address threats from other nations."], "subsections": []}]}, {"section_title": "The Strategic Offensive Reductions Treaty", "paragraphs": ["During a summit meeting with President Putin in November 2001, President George W. Bush announced that the United States would reduce its \"operationally deployed\" strategic nuclear warheads to a level between 1,700 and 2,200 warheads during the next decade. He stated that the United States would reduce its forces unilaterally, without signing a formal agreement. President Putin indicated that Russia wanted to use the formal arms control process, emphasizing that the two sides should focus on \"reaching a reliable and verifiable agreement.\" Russia sought a \"legally binding document\" that would provide \"predictability and transparency\" and ensure for the \"irreversibilty of the reduction of nuclear forces.\" The United States wanted to maintain the flexibility to size and structure its nuclear forces in response to its own needs. It preferred a less formal process, such as an exchange of letters and, possibly, new transparency measures that would allow each side to understand the force structure plans of the other side.", "Within the Bush Administration, Secretary of State Powell supported the conclusion of a \"legally binding\" agreement because he believed it would help President Putin's standing with his domestic critics. He apparently prevailed over the objections of officials in the Pentagon. Although the eventual outcome did differ from the initial approach of the Bush Administration, most observers agree that it did not undermine the fundamental U.S. objectives in the negotiations because the Treaty's provisions would not impede the Bush Administration's plans for U.S. strategic nuclear forces.", "The United States and Russia signed the Strategic Offensive Reductions Treaty on May 24, 2002. The U.S. Senate gave its advice and consent to the ratification of the Treaty on March 6, 2003. The Russian Duma approved the Federal Law on Ratification for the Treaty on May 14, 2003. The Treaty entered into force on June 1, 2003. The Treaty was due to remain in force until December 31, 2012, after which it could be extended or replaced by another agreement. It lapsed, however, on February 5, 2011, when the New START Treaty (see below) entered into force."], "subsections": [{"section_title": "Treaty Provisions", "paragraphs": ["Article I contained the only limit in the Treaty, stating that the United States and Russia will reduce their \"strategic nuclear warheads\" to between 1,700 and 2,200 warheads by December 31, 2012. The text did not define \"strategic nuclear warheads\" and, therefore, did not indicate whether the parties would count only those warheads that are \"operationally deployed,\" all warheads that would count under the START counting rules, or some other quantity of nuclear warheads. The text did refer to statements made by Presidents Bush and Putin in November and December 2001, when each outlined their own reduction plans. This reference may have indicated that the United States and Russia could each use their own definition when counting strategic nuclear warheads. The Treaty did not limit delivery vehicles or impose sublimits on specific types of weapons systems. Each party could determine its own \"composition and structure of its strategic offensive arms.\""], "subsections": []}, {"section_title": "Monitoring and Verification", "paragraphs": ["The Strategic Offensive Reductions Treaty did not contain any monitoring or verification provisions. The Bush Administration noted that the United States and Russia already collected information about strategic nuclear forces under START I and during implementation of the Nunn-Lugar Cooperative Threat Reduction Program. Some in Congress questioned, however, whether this information would be sufficient for the duration of the Treaty, since START I was due to expire in 2009, three years before the end of implementation under the new Treaty."], "subsections": []}, {"section_title": "Nonstrategic Nuclear Weapons", "paragraphs": ["The Strategic Offensive Reductions Treaty also did not contain any limits or restrictions on nonstrategic nuclear weapons. Yet, as was noted above, many Members of Congress had argued that these weapons pose a greater threat to the United States and its allies than strategic nuclear weapons. During hearings before the Senate Foreign Relations Committee, Secretary of Defense Rumsfeld and Secretary of State Powell both agreed that the disposition of nonstrategic nuclear weapons should be on the agenda for future meetings between the United States and Russia, although neither supported a formal arms control regime to limit or contain these weapons. These discussions did not occur, and many analysts outside government have renewed their calls for reductions in nonstrategic nuclear weapons."], "subsections": []}]}]}, {"section_title": "The Obama Administration: New START", "paragraphs": ["The United States and Russia began to discuss their options for arms control after START in mid-2006. During the Bush Administration, they were unable to agree on a path forward. Neither side wanted to extend START in its original form, as some of the Treaty's provisions had begun to interfere with some military programs on both sides. Russia wanted to replace START with a new Treaty that would further reduce deployed forces while using many of the same definitions and counting rules in START. The United States initially did not want to negotiate a new treaty, but, under the Bush Administration, would have been willing to extend, informally, some of START's monitoring provisions. In 2008, the Bush Administration agreed to conclude a new Treaty, with monitoring provisions attached, but this Treaty would have resembled the far less formal Strategic Offensive Reductions Treaty. In December 2008, the two sides agreed that they wanted to replace START before it expired, but acknowledged that this task would have to be left to negotiations between Russia and the Obama Administration."], "subsections": [{"section_title": "Pursuing an Agreement", "paragraphs": ["The United States and Russia began to hold talks on a new treaty during the first few months of the Obama Administration. In early March 2009, Secretary of State Hillary Clinton and Russia's Foreign Minister Sergey Lavrov agreed that the two nations would seek to reach an agreement that would replace START by the end of 2009. In April, after their meeting in London prior to the G-20 summit, Presidents Obama and Medvedev endorsed these negotiations and their goal of reaching an agreement by the end of 2009. When Presidents Obama and Medvedev met in Moscow on July 6-7, 2009, they signed a Joint Understanding for the START follow-on Treaty. This statement contained a range for the numerical limits that would be in the Treaty\u2014between 500 and 1,100 of strategic delivery vehicles and between 1,500 and 1,675 for their associated warheads. It also included a list of other issues\u2014such as provisions for calculating the limits, provisions on definitions, and a provision on the relationship between strategic offensive and strategic defensive weapons\u2014that would be addressed in the Treaty.", "START expired on December 5, 2009. At the time, the negotiating teams continued to meet in Geneva, but the negotiations concluded shortly before the end of 2009 without reaching a final agreement. The formal talks resumed in late January 2010, and the parties concluded the New START Treaty in early April 2010. Presidents Obama and Medvedev signed the Treaty in Prague on April 8, 2010; it entered into force on February 5, 2011. The two parties completed their required reductions by the treaty's seven-year deadline of February 5, 2018."], "subsections": []}, {"section_title": "Treaty Provisions", "paragraphs": [], "subsections": [{"section_title": "Limits on Warheads and Launchers", "paragraphs": ["The New START Treaty contains three central limits on U.S. and Russian strategic offensive nuclear forces. First, it limits each side to no more than 800 deployed and nondeployed ICBM and SLBM launchers and deployed and nondeployed heavy bombers equipped to carry nuclear armaments. Second, within that total, it limits each side to no more than 700 deployed ICBMs, deployed SLBMs, and deployed heavy bombers equipped to carry nuclear armaments. Third, the treaty limits each side to no more than 1,550 deployed warheads. Deployed warheads include the actual number of warheads carried by deployed ICBMs and SLBMs, and one warhead for each deployed heavy bomber equipped for nuclear armaments. ", "According to New START's Protocol, a deployed ICBM launcher is \"an ICBM launcher that contains an ICBM and is not an ICBM test launcher, an ICBM training launcher, or an ICBM launcher located at a space launch facility.\" A deployed SLBM launcher is a launcher installed on an operational submarine that contains an SLBM and is not intended for testing or training. A deployed mobile launcher of ICBMs is one that contains an ICBM and is not a mobile test launcher or a mobile launcher of ICBMs located at a space launch facility. These deployed launchers can be based only at ICBM bases. A deployed ICBM or SLBM is one that is contained in a deployed launcher. A deployed heavy bomber is one that is equipped for nuclear armaments but is not a \"test heavy bomber or a heavy bomber located at a repair facility or at a production facility.\" Moreover, a heavy bomber is equipped for nuclear armaments if it is \"equipped for long-range nuclear ALCMs, nuclear air-to-surface missiles, or nuclear bombs.\" Nondeployed launchers are, therefore, those that are used for testing or training, those that are located at space launch facilities, or those that are located at deployment areas or on submarines but do not contain a deployed ICBM or SLBM.", "The warhead limits in New START differ from those in the original START Treaty. First, the original START Treaty contained several sublimits on warheads attributed to different types of strategic weapons, in part because the United States wanted the treaty to impose specific limits on elements of the Soviet force that were deemed to be \"destabilizing.\" New START, in contrast, contains only a single limit on the aggregate number of deployed warheads. This provides each nation with the freedom to mix their forces as they see fit. This change reflects, in part, a lesser concern with Cold War models of strategic and crisis stability. It also derives from the U.S. desire to maintain flexibility in determining the structure of its own nuclear forces. ", "Second, under START, to calculate the number of warheads that counted against the treaty limits, the United States and Russia counted deployed launchers, assumed launcher contained an operational missile, and assumed each missile carried an \"attributed\" number of warheads. The number of warheads attributed to each missile or bomber was the same for all missiles and bombers of that type. The parties then multiplied these warhead numbers by the number of deployed ballistic missiles and heavy bombers to determine the number of warheads that counted under the treaty's limits. Under New START, the United States and Russia will also count the number of deployed launchers. But they will not calculate the number of deployed warheads by multiplying the number of launchers by a warhead attribution number. Instead, each side will simply declare the total number of warheads deployed across their force. This counting method will provide the United States with the flexibility to reduce its forces without eliminating launchers and to structure its deployed forces to meet evolving operational needs."], "subsections": []}, {"section_title": "Monitoring and Verification", "paragraphs": ["The New START Treaty contains a monitoring and verification regime that resembles the regime in START, in that its text contains detailed definitions of items limited by the treaty; provisions governing the use of NTM to gather data on each side's forces and activities; an extensive database that identifies the numbers, types, and locations of items limited by the treaty; provisions requiring notifications about items limited by the treaty; and inspections allowing the parties to confirm information shared during data exchanges. At the same time, the verification regime has been streamlined to make it less costly and complex than the regime in START. It also has been adjusted to reflect the limits in New START and the current circumstances in the relationship between the United States in Russia. In particular, it focuses on maintaining transparency, cooperation, and openness, as well as on deterring and detecting potential violations.", "Under New START, the United States and Russia continue to rely on their NTM to collect information about the numbers and locations of their strategic forces. They may also broadcast and exchange telemetry\u2014the data generated during missile flight tests\u2014up to five times each year. They do not need these data to monitor compliance with any particular limits in New START, but the telemetry exchange will provide some transparency into the capabilities of their systems. The parties will also exchange a vast amount of data about those forces, specifying not only their distinguishing characteristics, but also their precise locations and the number of warheads deployed on each deployed delivery vehicle. They will notify each other, and update the database, whenever they move forces between declared facilities. The treaty also requires the parties to display their forces, and allows each side to participate in exhibitions, to confirm information listed in the database. ", "Under New START, each party can conduct up to 18 short-notice, on-site inspections each year; both sides used this full quota of inspections during the three years of the treaty's implementation. The treaty divides these into Type One inspections and Type Two inspections. Each side can conduct up to 10 Type One inspections and up to 8 Type Two inspections. Moreover, during each Type One inspection, the parties will be able to perform two different types of inspection activities\u2014these are essentially equivalent to the data update inspections and reentry vehicle inspections in the original START Treaty. As a result, the 18 short-notice inspections permitted under New START are essentially equivalent to the 28 short-notice inspections permitted under START."], "subsections": []}, {"section_title": "Relationship Between Offensive and Defensive Weapons", "paragraphs": ["In the Joint Understanding signed at the Moscow summit in July 2009, the United States and Russia agreed that the new treaty would contain a \"provision on the interrelationship of strategic offensive arms and strategic defensive arms.\" This statement, which appears in the preamble to New START, states that the parties recognize \"the existence of the interrelationship between strategic offensive arms and strategic defensive arms, that this interrelationship will become more important as strategic nuclear arms are reduced, and that current strategic defensive arms do not undermine the viability and effectiveness of the strategic offensive arms of the parties.\" Russia and the United States each issued unilateral statements when they signed New START that clarified their positions on the relationship between New START and missile defenses. Russia indicated that it might exercise its right to withdraw from the treaty if the United States increased the capabilities of its missile defenses \"in such a way that threatens the potential of the strategic nuclear forces of the Russian Federation. \" The United States responded by noting that its \"missile defense systems are not intended to affect the strategic balance with Russia. The United States missile defense systems would be employed to defend the United States against limited missile launches, and to defend its deployed forces, allies and partners against regional threats.\"", "Officials from the Obama Administration testified to the Senate and repeatedly emphasized that these statements did not impose any obligations on either the United States or Russia and would not result in any limits on U.S. missile defense programs. These statements also did not provide Russia with \"veto power\" over U.S. missile defense systems. Although Russia has said it may withdraw from the treaty if the U.S. missile defenses threaten \"the potential of the strategic nuclear forces of the Russian Federation,\" the United States has no obligation to consult with Russia to confirm that its planned defenses do not cross this threshold. It may develop and deploy whatever defenses it chooses; Russia can then determine, for itself, whether those defenses affect its strategic nuclear forces and whether it thinks the threat to those forces justifies withdrawal from the treaty. "], "subsections": []}, {"section_title": "Implementation", "paragraphs": ["New START has been in force for eight years. According to the U.S. State Department, the United States and Russia have successfully cooperated in implementing the treaty, and both have completed their required reductions. Russia, however, has raised concerns about the method that the United States has used to eliminate some of its accountable weapons, and has, therefore, been unwilling to agree, unequivocally that the United States is in compliance with the Treaty. According to the latest data exchange, with data current as of September 1, 2018, the United States had met its New START levels with 1,398 warheads on 659 deployed launchers, within a total of 800 deployed and nondeployed launchers. On February 5, 2018, Russia reported that it had met the New START limits with 1,420 warheads on 517 deployed launchers, within a total of 775 deployed and nondeployed launchers. The two sides have shared more than 17,375 notifications, and each has conducted its full allotment of 18 onsite inspections each year.", "New START is scheduled to expire on February 5, 2021. According to the terms of the Treaty, the parties can extend it for a period not to exceed five years, which would extend it through February 2026. Press reports indicate that President Putin proposed that the parties pursue this extension, but the United States has not yet announced its position on this issue. Administration officials have stated that the possible extension is under review in the interagency process. Some, including General John Hyten, the Chairman of U.S. Strategic Command (STRATCOM), have noted that the limits on Russian forces and the transparency afforded by the verification regime continue to serve U.S. national security interests. However, he and others have noted that Russia appears to be developing new kinds of long-range nuclear delivery systems that may not be captured by the Treaty limits. While some have argued that the United States and Russia should extend New START first, then discuss measures to bring these weapons into the Treaty framework, others have suggested that the United States withhold approval of an extension unless Russia first agrees to count these weapons under the Treaty limits."], "subsections": []}]}]}, {"section_title": "Threat Reduction and Nonproliferation Assistance", "paragraphs": ["As the Soviet Union collapsed in late 1991, many Members of Congress grew concerned that deteriorating social and economic conditions in Russia would affect control over Soviet weapons of mass destruction. In December 1991, Congress authorized the transfer of $400 million from the FY1992 Department of Defense (DOD) budget to help the republics that inherited the Soviet nuclear and chemical weapons stockpile\u2014Russia, Kazakhstan, Ukraine, and Belarus\u2014transport and dismantle these weapons. This effort grew substantially, with Congress appropriating more than $1 billion each year for nonproliferation and threat reduction programs administered by the Department of Defense (DOD), the State Department, and the Department of Energy (DOE). Funding for programs in the former Soviet Union has declined sharply in recent years, while funding for programs in other nations around the world has increased. "], "subsections": [{"section_title": "DOD's Cooperative Threat Reduction Program (CTR)", "paragraphs": ["At its inception, DOD's CTR program sought to provide Russia, Ukraine, Belarus, and Kazakhstan with assistance in the safe and secure transportation, storage, and dismantlement of nuclear weapons. The initial Nunn-Lugar legislation, which established the program in 1991, was tightly focused on the transport, storage, and destruction of weapons of mass destruction. But the focus of CTR funding has changed as the program has evolved. As the work on strategic offensive arms reductions was completed, a growing proportion of the funding focused on securing and eliminating chemical and biological weapons. Over the past decade, the United States has also viewed the CTR program, and other U.S. nonproliferation assistance to the former Soviet states, as a part of its efforts to keep weapons of mass destruction away from terrorists. Moreover, an increasing proportion of CTR funding has been allocated to projects outside the former Soviet Union, as the United States seeks to engage a greater number of nations as partners in the effort to secure vulnerable nuclear materials and other weapons of mass destruction."], "subsections": [{"section_title": "CTR Program Areas", "paragraphs": ["The United States has provided Russia and the other former Soviet states with extensive assistance with projects designed to help with the elimination of nuclear, chemical, and other weapons and their delivery vehicles. These projects helped Russia, Ukraine, Belarus, and Kazakhstan remove warheads, deactivate missiles, and eliminate launch facilities for nuclear weapons covered by the START Treaty. Several projects were also designed to enhance the safety, security, and control over nuclear weapons and fissile materials. The CTR program also funded several projects at storage facilities for nuclear weapons and materials, to improve security and accounting systems and to provide storage space for plutonium removed from nuclear warheads when they are dismantled.", "The United States and Russia also used CTR funds to construct a chemical weapons destruction facility at Shchuch'ye that was intended to help Russia comply with its obligations under the Chemical Weapons convention and to prevent the loss or theft of Soviet-era chemical weapons by ensuring their safe and secure destruction. The United States also helped install equipment at the destruction facility and to train the operating personnel. Operations at the facility began in March 2009, and it was officially dedicated in late May 2009. At the end of 2012, Russia had used it to eliminate over 3,321.5 metric tons of nerve agent.", "In the late 1990s, Congress added funds to the CTR budget for biological weapons proliferation prevention; this effort has expanded substantially in recent years. The Soviet Union had reportedly developed the world's largest biological weapons program and reportedly continued to pursue research and development of biological agents in the 1990s, even as the security systems and supporting infrastructure at its facilities began to deteriorate. The United State began to provide Russia with CTR assistance to improve safety and security at its biological weapons sites and to help employ biological weapons scientists during the late 1990s. Much of the work in Russia and other states of the former Soviet Union focused on safe and secure storage and handling of biological pathogen collections. ", "Biological proliferation prevention programs in Russia lapsed after the expiration of the memorandum of understanding in June 2013, but the United States has expanded its biological engagement programs beyond the former Soviet Union, and now works globally to secure pathogen collections, train scientists on security issues, and improve disease surveillance. The Obama Administration stated that the goal of the CBE program is to counter the \"threat of state and non-state actors acquiring biological materials and expertise that could be used to develop or deploy a biological weapon.\" In recent years, biological weapons engagement programs have accounted for more than 70% of the CTR budget."], "subsections": []}]}, {"section_title": "Future of the CTR Program", "paragraphs": ["The United States and Russia initially signed the Memorandum of Understanding, known as the Umbrella Agreement, that governs implementation of CTR projects in 1992. This agreement had an initial seven-year duration and was renewed in 1999 and 2006. It expired in June 2013. The United States and Russia replaced it with a bilateral protocol under the Multilateral Nuclear Environmental Program in the Russian Federation Agreement (MNEPR). Russia's Ministry of Defense no longer participates in these cooperative programs. As a result, many of the CTR projects in Russia have ended, although the two countries will continue to cooperate on some areas of nuclear security. The United States will also continue to fund cooperative engagement programs in countries around the world."], "subsections": []}, {"section_title": "Department of Energy Nonproliferation Cooperation Programs", "paragraphs": ["The Department of Energy has contributed to U.S. threat reduction and nonproliferation assistance to the former Soviet states from the start, when CTR included a small amount of funding for materials control and protection. Since then, the United States and Russia have cooperated, through several programs, to secure and eliminate many of the materials that could help terrorists or rogue nations acquire their own nuclear capabilities. In late 2014, however, Russia indicated that it would no longer cooperate in programs funded by DOE."], "subsections": [{"section_title": "Materials Protection, Control, and Accounting", "paragraphs": ["When the United States began to provide Russia with assistance securing its nuclear weapons and materials in the mid-1990s, concerns about the safety and security of nuclear materials located at civilian research facilities were paramount. Through the Material Protection, Control and Accounting (MPC&A) program, the United States has provided upgrades to security at more than 50 facilities in the former Soviet Union to security to reduce the risk of a loss of materials. The United States also funded upgrades at nuclear weapons storage facilities and at research facilities that store nuclear materials. These upgrades include the installation of improved security systems that use modern technology and strict material control and accounting systems. The program has also provided security training for Russian nuclear specialists and helped Russia improve border security and monitoring to discourage and detect illicit efforts to transfer these materials."], "subsections": []}, {"section_title": "Global Threat Reduction Initiative", "paragraphs": ["On May 26, 2004, Secretary of Energy Spencer Abraham announced the Global Threat Reduction Initiative (GTRI). Over the years, GTRI has worked to secure, protect, and, in some cases, remove vulnerable nuclear and radiological materials at civilian facilities worldwide, in an effort to mitigate the risk of terrorists obtaining nuclear material that could be used in a nuclear or radiological device. Specifically, GTRI repatriates U.S.- and Russian-origin highly enriched uranium (HEU) spent and fresh nuclear fuel from research reactors located in countries around the world. In some cases, the United States converts those reactors to operate with low-enriched uranium (LEU) fuel, which is not useful for a nuclear weapon. In addition, GTRI installs physical security upgrades at nuclear and radiological sites, and recovers disused and unwanted radioactive sources at home and abroad. ", "In its FY2016 budget request, the Department of Energy outlined a reorganization of its nonproliferation programs. It identified two new program areas\u2014Material Management and Minimization, and Global Material Security\u2014that would incorporate most of the nonproliferation programs described above."], "subsections": []}, {"section_title": "Plutonium Disposition", "paragraphs": ["In the Plutonium Management and Disposition Agreement (PMDA), which was signed in 2000 and amended in 2010, the United States and Russia each agreed to dispose of 34 metric tons of weapons-grade plutonium, and to do so at roughly the same time. The parties agreed they could either convert the plutonium to mixed oxide fuel (MOX) for nuclear power reactors or immobilize it and dispose of it in a way that would preclude its use in nuclear weapons. Russia expressed little interest in the permanent disposal of plutonium, noting that the material could have great value for its civilian power program. The agreement was amended in 2010 to allow Russia to convert its plutonium to MOX fuel. The United States initially outlined a plan to convert almost all its surplus plutonium to MOX fuel. However, partially due to escalating costs of the U.S. MOX facility, both the Obama Administration and Trump Administration have sought to cancel the MOX program and instead pursue a dilute and dispose method. In October 2016, Russia announced that it was suspending its participation in the agreement due to what it called \"hostile actions\" by the United States. Nevertheless, both countries have said they were committed to keeping the 34 tons out of weapons and appear to be continuing their plans for surplus plutonium disposition."], "subsections": []}]}, {"section_title": "State Department Programs", "paragraphs": ["The United States, Japan, the European Union, and Russia established the International Science and Technology Center (ISTC) in Moscow. A similar center began operating in Kiev in 1993. In subsequent years, several other former Soviet states have joined and other nations have added their financial support. These centers responded to concerns that scientists from Russia's nuclear weapons complex might sell their knowledge to other nations seeking nuclear weapons. Most of these scientists spent fewer than 50 days per year on projects funded by the science centers and continued to work at their primary jobs. The Russian government announced in August 2010 that it would withdraw from the science centers, but other member states reaffirmed their commitment to their countries' participation.", "The State Department's Export Control and Related Border Security Assistance (EXBS) program helps the former Soviet states and other nations improve their ability to interdict nuclear smuggling and their ability to stop the illicit trafficking of all materials for weapons of mass destruction, along with dual-use goods and technologies. The EXBS program currently has projects underway in more than 30 nations, and is expanding its reach around the globe."], "subsections": []}]}]}, {"section_title": "Multilateral Nuclear Nonproliferation Activities", "paragraphs": [], "subsections": [{"section_title": "The International Nuclear Nonproliferation Regime", "paragraphs": ["The United States is a leader of an international regime that attempts to limit the spread of nuclear weapons through treaties, export control coordination and enforcement, and U.N. Security Council resolutions. Much of the focus of U.S. nonproliferation policy in the past decade has focused on the cases of Iran and North Korea. Moreover, increased awareness of the need to keep sensitive materials and technologies out of terrorist hands has reinvigorated efforts to control not just nuclear weapons and weapons-usable materials, but also radioactive materials that could be used in radiological dispersal devices. Key issues in this area that the 116 th Congress might consider include preventing Iran from developing nuclear weapons in the long term; North Korea's nuclear weapons program; U.S. civilian nuclear cooperation agreements; and tensions between India and Pakistan as amplified by their nuclear weapons programs, among other issues. Congress may also consider how cooperation under the international nonproliferation regimes can be leveraged to prevent nuclear terrorism."], "subsections": [{"section_title": "The Nuclear Nonproliferation Treaty", "paragraphs": ["The Nuclear Nonproliferation Treaty (NPT), which entered into force in 1970 and was extended indefinitely in 1995, is the centerpiece of the nuclear nonproliferation regime. The treaty currently has 191 states parties. It is complemented by International Atomic Energy Agency (IAEA) safeguards, national export control laws, coordinated export control policies under the Nuclear Suppliers Group, U.N. Security Council resolutions, and ad hoc initiatives. The NPT recognizes five nations (the United States, Russia, France, Britain, and China) as nuclear weapon states\u2014a distinction that is carried over in other parts of the regime and in national laws. Three nations that have not signed the NPT\u2014India, Israel, and Pakistan\u2014possess significant nuclear weapon capabilities. North Korea, which had signed the NPT but withdrew in 2003, is now thought to possess a small number of nuclear weapons. Several countries, including Argentina, Brazil, and South Africa, suspended their nuclear weapons programs and joined the NPT in the 1990s. Others\u2014Ukraine, Belarus, and Kazakhstan\u2014gave up former Soviet weapons on their territories and joined the NPT as non-nuclear weapon states in the 1990s.", "The Nuclear Nonproliferation Treaty is unique in its near universality\u2014only India, Pakistan, Israel, and North Korea are now outside the treaty. In signing the NPT, non-nuclear weapon states (NNWS) pledge not to acquire nuclear weapons in exchange for a pledge by the nuclear weapon states (NWS) not to assist the development of nuclear weapons by any NNWS and to facilitate \"the fullest possible exchange of equipment, materials and scientific and technological information for the peaceful uses of nuclear energy\" (NPT, Article IV-2). The NWS, defined as any state that tested a nuclear explosive before 1967, also agree to \"pursue negotiations in good faith on effective measures relating to cessation of the nuclear arms race at an early date and to nuclear disarmament\" (NPT, Article VI). A P-5 Dialogue, led by the United States, meets to coordinate and advance transparency and disarmament steps by all five nuclear weapon states. Many NNWS have often expressed dissatisfaction with the apparent lack of progress toward disarmament.", "Nuclear proliferation often has significant regional security repercussions, but there is also a growing realization that the current constellation of proliferation risks may require further improvements to the system itself. Concern has shifted from keeping technology from the states outside the NPT to stemming potential further proliferation, either from those states outside the regime or through black markets, such as the Pakistani A. Q. Khan network. "], "subsections": []}, {"section_title": "The International Atomic Energy Agency (IAEA)", "paragraphs": ["The International Atomic Energy Agency was established in 1957 to assist nations in their peaceful nuclear programs (primarily research and nuclear power programs) and to safeguard nuclear materials from these peaceful programs to ensure that they are not diverted to nuclear weapons uses. As of February 2019, it has 171 member states. The IAEA safeguards system relies on data collection, review, and periodic inspections at declared facilities. The IAEA may also inspect other facilities if it suspects undeclared nuclear materials or weapons-related activities are present.", "Non-nuclear weapon NPT members are required to declare and submit all nuclear materials in their possession to regular IAEA inspections to ensure that sensitive nuclear materials and technologies are not diverted from civilian to military purposes. Some states who are not parties to the NPT (India, Israel, Pakistan) are members of the IAEA and allow inspections of some, but not all, of their nuclear activities. The IAEA also provides technical assistance for peaceful applications of nuclear technology for energy, medicine, agriculture, and research.", "After the 1991 Persian Gulf War, IAEA inspection teams working with the U.N. Special Commission on Iraq (UNSCOM) revealed an extensive covert nuclear weapons program that had been virtually undetected by annual inspections of Baghdad's declared facilities. This knowledge inspired efforts to strengthen the IAEA's authority to conduct more intrusive inspections of a wider variety of installations, to provide the agency with intelligence information about suspected covert nuclear activities, and to provide the agency with the resources and political support needed to increase confidence in its safeguards system. In 1998, the IAEA adopted an \"Additional Protocol\" that would give the agency greater authority and access to verify nuclear declarations. The protocol enters into force for individual NPT states upon ratification. For the United States, the Senate gave its advice and consent to the protocol on March 31, 2004 (Treaty Doc. 107-7, Senate Executive Report 108-12), and it entered into force on January 6, 2009. As of February 2019, 148 countries have signed an Additional Protocol and 134 have entered into force.", "The IAEA has had an expanded mission in recent years, increasingly called upon to implement nuclear security-related activities. The IAEA also faces a potential worldwide expansion in the number of nuclear power plants it will need to monitor. Congress may consider U.S. support for the IAEA in light of these challenges. The Department of Energy's National Nuclear Security Administration is studying the future of international safeguards through its Next Generation Safeguards Initiative, which includes how to better share U.S. expertise and new safeguards technologies with the IAEA. "], "subsections": []}, {"section_title": "Nuclear-Weapon-Free Zones", "paragraphs": ["Several regions of the world have treaties in force that ban the development, deployment, and use of nuclear weapons, known as nuclear-weapon-free zones, including Latin America (Treaty of Tlatelolco), Central Asia (Treaty on a Nuclear-Weapon-Free Zone in Central Asia), the South Pacific (Treaty of Rarotonga), Africa (Treaty of Pelindaba), and Southeast Asia (Treaty of Bangkok). Mongolia has declared itself a single-state Nuclear-Weapon-Free Zone. Also, the Treaty of Antarctica established that Antarctica will be used for peaceful uses only. Nuclear weapons are also banned on the seabed, in outer space, and on the moon by international treaties. ", "The nuclear-weapon-free zones (NWFZs) reinforce the undertakings of NPT non-nuclear-weapon state members and give confidence at a regional level that states are not seeking nuclear weapons. Each treaty has protocols for nuclear weapon states to ratify. These protocols are pledges that the nuclear weapon states will not base nuclear weapons in the zone, test nuclear weapons in the zone, or use or threaten to use nuclear weapons against the countries in the zone. The \"negative security assurance\" provided to members of the zone through the nuclear weapon state protocol is considered one of the key benefits of membership for non-nuclear weapon states.", "The United States ratified the protocols to the Latin American NWFZ. The Obama Administration, as pledged at the 2010 NPT Review Conference, submitted the Protocols to the Treaties of Pelindaba (Africa) and Rarotonga (South Pacific) to the Senate for advice and consent for ratification on May 2, 2011. The United States signed the protocols at the time these treaties were open for signature (April 11, 1996, for the Treaty of Pelindaba and August 6, 1985, for the Treaty of Rarotonga). The other four nuclear weapon states besides the United States (China, France, Russia, United Kingdom) have ratified those protocols. ", "The Obama Administration has also said it would work with parties to the Southeast Asian Nuclear-Weapon-Free Zone and the Central Asian Nuclear-Weapon-Free Zone to resolve outstanding issues related to the protocols in order to \"sign the protocols to those treaties as soon as possible.\" In August 2011, the United States along with the other four NPT nuclear weapon states began consultations with the SEANWFZ countries regarding the NWS protocols to that agreement. Those consultations reportedly continue. ", "The five nuclear-weapon states announced their signature of the CANWFZ Protocol at the NPT Preparatory Committee meeting in May 2014. The Obama Administration submitted the CANFWZ Protocol to the Senate for its advice and consent to ratification on April 27, 2015. The presidential letter says that the protocol would require \"no changes in U.S. law, policy or practice.\" ", "The five nuclear weapon states recognized Mongolia as a single-state nuclear-weapon-free zone in September 2012 by signing parallel declarations formally acknowledging this status.", "Talks have been held to discuss the establishment of a Middle East WMD-free zone."], "subsections": []}, {"section_title": "Nuclear Suppliers Group", "paragraphs": ["The United States has been a leader in establishing export controls, a key component of the nuclear nonproliferation regime. The Atomic Energy Act of 1954 and Nuclear Nonproliferation Act of 1978 established controls on nuclear exports that gradually gained acceptance by other nuclear suppliers. The Export Administration Act of 1979 (EAA) authorized controls on dual-use technology that could contribute to foreign weapons. Export controls require exporters to get a license before selling sensitive technology to foreign buyers and, in some cases, ban certain exports to some countries.", "International nuclear controls are coordinated by an informal association of 48 nuclear exporters called the Nuclear Suppliers Group (NSG), founded in 1975. NSG members voluntarily agree to coordinate exports of civilian nuclear material and nuclear-related equipment and technology to non-nuclear weapon states. The Group agreed to guidelines for export that include lists of materials and equipment that are to be subject to export control. NSG guidelines require that the recipient country offer assurances that the importing items will not be used for a weapons program, will have proper physical security, and will not be transferred to a third party without the permission of the exporter. Recipient countries' nuclear programs must also have full-scope IAEA safeguards. In September 2008, the NSG agreed to exempt India from the full-scope safeguards requirement, although it retained a policy of restraint on the transfer of enrichment and reprocessing equipment. NSG members in June 2011 adopted additional guidelines that define eligibility criteria for the transfer of enrichment and reprocessing technologies to new states.", "The NSG's effectiveness is limited by its voluntary nature. Countries such as Iraq and Pakistan, and individuals like A. Q. Khan and others, have exploited weaknesses in the national export control systems of many countries to acquire a wide range of nuclear items."], "subsections": []}]}, {"section_title": "Convention on the Physical Protection of Nuclear Material", "paragraphs": ["The Convention on the Physical Protection of Nuclear Material (CPPNM), adopted in 1987, sets international standards for nuclear trade and commerce. The Convention established security requirements for the protection of nuclear materials against terrorism; parties to the treaty agree to report to the IAEA on the disposition of nuclear materials being transported and agree to provide appropriate security during such transport. As of June 2018, 157 countries are party to the CPPNM.", "The United States had advocated strengthening the treaty by extending controls to domestic security. In July 2005, states parties convened to extend the convention's scope in an amendment that covers not only nuclear material in international transport, but also nuclear material in domestic use, storage, and transport, as well as the protection of nuclear material and facilities from sabotage. President George W. Bush submitted the amendment to the Senate in September 2007 (Treaty Doc. 110-6), and the Senate approved a resolution of advice and consent to ratification on September 25, 2008.", "The new rules come into effect once two-thirds of the states parties of the convention have ratified the amendment. The United States submitted its instrument of ratification to the Amendment on July 31, 2015. As of July 2018, 118 states had deposited their instruments of ratification, acceptance, or approval of the amendment with the depositary. The amendment entered into force on May 8, 2016, following the deposit of the instrument of ratification by Nicaragua, the 102 nd state.", "Congress needed to also approve implementing legislation before the United States could deposit its instrument of ratification to the Amendment. In the 112 th Congress, the Obama Administration submitted draft implementing legislation to the Senate Judiciary Committee in April 2011. The House passed implementing legislation in the 112 th Congress, but the Senate did not take action. In the 113 th Congress, the House passed the Nuclear Terrorism Conventions Implementation and Safety of Maritime Navigation Act of 2013 ( H.R. 1073 ) in May 2013, which approved implementing legislation for the CPPNM Amendment and the Nuclear Terrorism Convention (as well as agreements on maritime security). The Senate did not take action.", "In the 114 th Congress, implementing legislation for three nuclear terrorism-related conventions, called the Nuclear Terrorism Conventions Implementation and Safety of Maritime Navigation Act ( H.R. 1056 ), was incorporated into Title VIII of the USA Freedom Act of 2015 ( P.L. 114-23 ), which became law on June 2, 2015 ( H.R. 2048 )."], "subsections": []}, {"section_title": "International Convention for the Suppression of Acts of Nuclear Terrorism", "paragraphs": ["The U.N. General Assembly adopted the International Convention for the Suppression of Acts of Nuclear Terrorism (also known as the Nuclear Terrorism Convention) in 2005 after eight years of debating a draft treaty proposed by Russia in 1997. Disputes over the definition of terrorism, omitted in the final version, and over the issue of nuclear weapons use by states, complicated the discussions for many years. After September 11, 2001, states revisited the draft treaty and the necessary compromises were made. The Convention entered into force in July 2007. There were 115 states parties and 115 signatories as of March 2019. ", "The United States has strongly supported the Convention, and President Bush was the second to sign it (after Russian President Putin) on September 14, 2005. The Senate recommended advice and consent on September 25, 2008 (Treaty Doc. 110-4). ", "Congress needed to also approve implementing legislation before the United States could deposit its instrument of ratification to the Convention. In the 112 th Congress, the Obama Administration submitted draft legislation to the Senate Judiciary Committee in April 2011. The House passed implementing legislation in the 112 th Congress, but the Senate did not take action. In the 113 th Congress, the House passed the Nuclear Terrorism Conventions Implementation and Safety of Maritime Navigation Act of 2013 ( H.R. 1073 ) in May 2013, which approved implementing legislation for the CPPNM Amendment and the Nuclear Terrorism Convention (as well as agreements on maritime security). The Senate did not take action.", "In the 114 th Congress, implementing legislation for three conventions\u2014 H.R. 1056 , called the Nuclear Terrorism Conventions Implementation and Safety of Maritime Navigation Act\u2014was incorporated into Title VIII of the USA Freedom Act of 2015 ( P.L. 114-23 ), which became law on June 2, 2015. The United States deposited its instrument of ratification with the United Nations on September 30, 2015. The Convention defines offenses related to the unlawful possession and use of radioactive or nuclear material or devices, and the use of or damage to nuclear facilities. The Convention commits each party to adopt measures in its national law to criminalize these offenses and make them punishable. It covers acts by individuals, not states, and does not govern the actions of armed forces during an armed conflict. The Convention also does not address \"the issue of legality of the use or threat of use of nuclear weapons by States.\" It also commits states parties to exchange information and cooperate to \"detect, prevent, suppress and investigate\" those suspected of committing nuclear terrorism, including extraditions."], "subsections": []}, {"section_title": "Comprehensive Test Ban Treaty12", "paragraphs": ["The Comprehensive Test Ban Treaty (CTBT) would ban all nuclear explosions. It opened for signature in 1996 but has not yet entered into force. Previous treaties have restricted nuclear testing: the 1963 Limited Test Ban Treaty barred explosions in the atmosphere, in space, and under water, and the 1974 U.S.-U.S.S.R. Threshold Test Ban Treaty and the 1976 Peaceful Nuclear Explosions Treaty limited the explosive yield of underground nuclear explosions. In the debate on the indefinite extension of the NPT in 1995, many non-nuclear weapon states saw the early conclusion of the CTBT as a key step by the nuclear weapon states to comply with their obligations under Article VI of the NPT; critics argue that the United States has taken many steps in support of these obligations. President Clinton signed the CTBT when it opened for signature and submitted the treaty to the Senate for advice and consent in 1997. The Senate rejected the treaty by a vote of 48 for, 51 against, and 1 present, on October 13, 1999.", "Parties to the treaty agree \"not to carry out any nuclear weapon test explosion or any other nuclear explosion.\" The treaty establishes a Comprehensive Nuclear-Test-Ban Treaty Organization (CTBTO) of all member states to implement the treaty. The CTBTO oversees a Conference of States Parties, an Executive Council, and a Provisional Technical Secretariat. The latter would operate an International Data Center to process and report on data from an International Monitoring System (IMS), a global network that, when completed, would consist of 321 monitoring stations and 16 laboratories. A Protocol details the monitoring system and inspection procedures. The CTBTO would come into effect if the treaty entered into force; until that time, the CTBTO Preparatory Commission conducts work to prepare for entry into force, such as building and operating the IMS.", "For the treaty to enter into force, 44 specified states must ratify it. As of April 11, 2018, 184 states had signed the CTBT and 168 had ratified. Of the 44 required nations, 36 have ratified, 3 have not signed (India, North Korea, and Pakistan), and another 5 have not ratified (China, Egypt, Iran, Israel, and the United States). States that have ratified the treaty have held conferences every two years since 1999 to discuss how to accelerate entry into force.", "The CTBT remains on the calendar of the Senate Foreign Relations Committee. The Bush Administration opposed U.S. ratification of the CTBT but continued a U.S. nuclear test moratorium in effect since October 1992. In contrast, President Obama stated his support for the CTBT. For example, he said, \"As president, I will reach out to the Senate to secure the ratification of the CTBT at the earliest practical date and will then launch a diplomatic effort to bring onboard other states whose ratifications are required for the treaty to enter into force.\" Senator Hillary Clinton, as nominee for Secretary of State, previewed the Administration's approach to securing the Senate's advice and consent: \"A lesson learned from [the treaty's defeat in] 1999 is that we need to ensure that the administration work intensively with Senators so they are fully briefed on key technical issues on which their CTBT votes will depend.... Substantial progress has been made in the last decade in our ability to verify a CTBT and ensure stockpile reliability.\" Critics responded that confidence in the nuclear stockpile requires nuclear testing, and that certain techniques would enable a determined cheater to avoid detection or attribution of its tests. ", "The Obama Administration decided not to submit the treaty to the Senate for its advice and consent before the end of its term. In a March 2016 speech, Ambassador Adam Scheinman said that \"we are realistic about prospects for U.S. ratification and have no set timeframe for pursuing the Senate's advice and consent. Instead, our aim is to re-introduce CTBT to the American public and generate discussion on the treaty and its merits.\"", "The Trump Administration's February 2018 Nuclear Posture Review said that \"although the United States will not seek ratification of the Comprehensive Nuclear Test Ban treaty, it will continue to support the Comprehensive Nuclear Test Ban Treaty Organization Preparatory Committee as well as the International Monitoring System and International Data Center.\""], "subsections": []}, {"section_title": "Fissile Material Production Cutoff Treaty (FMCT)", "paragraphs": ["The United States first proposed that the international community negotiate a ban on the production of fissile material (plutonium and enriched uranium) that could be used in nuclear weapons over 50 years ago. Negotiators of the NPT realized that fissile material usable for nuclear weapons could still be produced under the guise of peaceful nuclear activities within the Treaty. Consequently, a fissile material production ban, or FMCT, has remained on the long-term negotiating agenda at the Conference on Disarmament (CD) in Geneva. These negotiations have been largely stalled since 1993. In 1995, the CD agreed to the \"Shannon Mandate,\" which called for an \"non-discriminatory, multilateral and internationally and effectively verifiable treaty banning the production of fissile material for nuclear weapons or other nuclear explosive devices.\" ", "The Bush Administration undertook a comprehensive review of the U.S. position on the FMCT in 2004 and concluded that such a ban would be useful in creating \"an observed norm against the production of fissile material intended for weapons,\" but argued that such a ban is inherently unverifiable. The Bush Administration proposed a draft treaty in May 2006 that contained no verification measures. In contrast, the Obama Administration supported the negotiation of an FMCT with verification measures on the basis of the Shannon mandate. The Trump Administration \"will continue to support the commencement of negotiations on an FMCT,\" Assistant Secretary of State Christopher Ford stated on April 25, 2018. ", "One key issue is whether or not such a treaty would seek to include existing stocks of fissile material. The United States has strongly objected to such an approach, but it is supported by some non-nuclear weapon states. The Shannon Mandate states that it \"does not preclude any delegation\" from proposing the inclusion of existing stocks in the negotiations.", "Many observers believed that negotiations at the CD were preferable to other fora because they would establish a global norm and would not have the appearance of conferring nuclear weapons status upon India, Pakistan, and Israel. As of March 2019, such CD negotiations had not begun. Pakistan, which is widely regarded as the main opponent to the start of negotiations (the CD operates on the basis of consensus), argues that a treaty on fissile material should not only prohibit the production of new material, but should also require states with such material to reduce their stocks.", "A 2012 U.N. General Assembly resolution requested the U.N. Secretary-General to \"establish a group of governmental experts\" to make recommendations on \"possible aspects [of] ... a treaty banning the production of fissile material for nuclear weapons or other nuclear explosive devices.\" The group began its work in March 2014 and completed its work in 2015. The General Assembly resolution called upon the Secretary-General to transmit the group's report to the General Assembly and the CD. A 2016 U.N. General Assembly resolution requested the Secretary-General to establish a \"high-level fissile material cut-off treaty (FMCT) expert preparatory group,\" to \"examine\" the experts' group report, as well as \"consider and make recommendations on substantial elements of a future non-discriminatory, multilateral and internationally and effectively verifiable treaty banning the production of fissile material for nuclear weapons or other nuclear explosive devices, on the basis\" of the Shannon Mandate. The resolution required the group to meet for two-week sessions in both 2017 and 2018. The group presented its final report in June 2018."], "subsections": []}, {"section_title": "United Nations Security Council Resolution 1540", "paragraphs": ["In April 2004, the U.N. Security Council adopted Resolution 1540, which requires all states to \"criminalize proliferation, enact strict export controls and secure all sensitive materials within their borders.\" UNSCR 1540 called on states to enforce effective domestic controls over WMD and WMD-related materials in production, use, storage, and transport; to maintain effective border controls; and to develop national export and trans-shipment controls over such items, all of which should help interdiction efforts. The resolution did not, however, provide any enforcement authority, nor did it specifically mention interdiction. About two-thirds of all states have reported to the U.N. on their efforts to strengthen defenses against WMD trafficking. U.N. Security Council Resolutions 1673 (2006), 1810 (2008), 1977 (2011) (which extended the duration of the 1540 Committee), 2055 (2012), and 2325 (2016) all modified the original resolution. The 2011 resolution extended the committee's mandate for 10 years and called for a review after 5 years and for another before the end of the mandate. The 2012 resolution increased the number of members of the Group of Experts from eight to nine and the 2016 resolution reasserts the importance of full implementation of resolution 1540. The committee is currently focused on identifying assistance projects for states in need and matching donors to improve these WMD controls. Congress may consider how the United States is contributing to this international effort."], "subsections": []}, {"section_title": "Treaty on the Prohibition of Nuclear Weapons", "paragraphs": ["UNGA Resolution A/71/258 ( 2016) called on U.N. member states to negotiate in 2017 a legally binding Treaty on the Prohibition of Nuclear Weapons, also known as the nuclear \"ban treaty.\" Negotiations were held in New York, February 27-March 31, and June 15-July 7, 2017. At the end of the conference, 122 countries voted to approve the treaty. Singapore abstained, and the Netherlands voted against it, citing conflicts between the treaty and the Netherlands' commitments as a member of NATO. Article 1 says that adherents would never \"develop, produce, manufacture, otherwise acquire, possess or stockpile nuclear weapons or other nuclear explosive devices.\" This includes a prohibition on hosting nuclear weapons that are owned or controlled by another state. Nor would states parties transfer, receive control over, or assist others in developing nuclear weapons. They also would not use or threaten to use nuclear weapons or other nuclear explosive devices. Article 7 requires states to give assistance to individuals affected by the use or testing of nuclear weapons and provide for environmental remediation. As of March 2019, the treaty had 22 states parties and 70 signatories.", "Treaty supporters seek to establish an international norm against the possession and use of nuclear weapons, which they argue would strengthen nonproliferation norms and raise awareness of the humanitarian consequences of developing and using nuclear weapons. Some critics of the ban treaty are concerned that a new agreement would undermine the NPT and its verification system of International Atomic Energy Agency (IAEA) safeguards. ", "The Obama and Trump Administrations have opposed a ban treaty and, along with 40 other states, did not participate in negotiations. In response to the conclusion of the treaty, a joint press release from the United States, UK, and French Permanent Representatives said, \"A purported ban on nuclear weapons that does not address the security concerns that continue to make nuclear deterrence necessary cannot result in the elimination of a single nuclear weapon and will not enhance any country's security, nor international peace and security.\" "], "subsections": []}, {"section_title": "Informal Cooperative Endeavors", "paragraphs": [], "subsections": [{"section_title": "G-8 Global Partnership Against the Spread of Weapons and Materials of Mass Destruction", "paragraphs": ["At their June 2002 summit at Kananaskis, Canada, the Group of Eight (United States, Canada, UK, France, Germany, Italy, Japan [G-7] plus Russia [G-8]) formed the Global Partnership (GP) Against the Spread of Weapons and Materials of Mass Destruction. Under this partnership, the United States, other members of the G-7, and the European Union agreed to raise up to $20 billion over 10 years for projects related to disarmament, nonproliferation, counterterrorism, and nuclear safety. These projects were initially focused on programs in Russia. The Global Partnership spurred Russia to take on a greater portion of the financial burden for these projects, and increased donor funds from countries other than the United States. The United States promised an additional $10 billion in Global Partnership funds in the 2012-2022 time frame, subject to congressional appropriations. ", "Over the past decade, the Global Partnership has expanded its donors and its recipients. The G8 Global Partnership Working Group provides a coordinating mechanism for nonproliferation assistance globally, and sub-working groups concentrate on specific nonproliferation areas. Recent priorities have included biological threat reduction and radiological security. Since the 2013 invasion of Crimea, Russia has not participated in the G-8 or the Global Partnership. Canada chaired the G-7 in 2018, and placed priority on the Global Partnership. In the April 2018 communique, the G-7 reaffirmed their \"strong commitment\" to the GP and recognized the importance of continuing this joint effort to reduce WMD threats. France holds the G-7 Presidency in 2019."], "subsections": []}, {"section_title": "Proliferation Security Initiative (PSI)", "paragraphs": ["President Bush announced the Proliferation Security Initiative (PSI) on May 31, 2003. This Initiative is primarily a diplomatic tool developed by the United States to gain support for interdicting shipments of weapons of mass destruction-related (WMD) equipment and materials. Through the PSI, the Bush Administration sought to \"create a web of counterproliferation partnerships through which proliferators will have difficulty carrying out their trade in WMD and missile-related technology.\" The states involved in PSI have agreed to review their national legal authorities for interdiction, provide consent for other states to board and search their own flag vessels, and conclude ship-boarding agreements. The Proliferation Security Initiative has no budget, no formal offices supporting it, no international secretariat, and no formal mechanism for measuring its effectiveness (like a database of cases). To many, these attributes are positive, allowing the United States to respond swiftly to changing developments. Others question whether the international community can sustain this effort over the longer term. Obama Administration officials have pledged to \"institutionalize\" PSI, although how they will carry this out is not yet clear.", "As of April 2018, 105 countries have committed formally to PSI participation. Sixteen \"core\" nations have pledged their cooperation in interdicting shipments of WMD materials, agreeing in Paris in 2003 on a set of interdiction principles. The 9/11 Commission Act of 2007 recommended that PSI be expanded and coordination within the U.S. government improved. The United States has prioritized the conclusion of ship-boarding agreements with key states that have high volumes of international shipping. The United States has signed 11 agreements with Antigua and Barbuda, the Bahamas, Belize, Croatia, Cyprus, Liberia, Malta, the Marshall Islands, Mongolia, Panama, and Saint Vincent and the Grenadines. ", "Since PSI is an activity rather than an organization, and has no budget or internal U.S. government organization, it may be difficult for Congress to track PSI's progress. Several intelligence resource issues may be of interest to Congress, including whether intelligence information is good enough for effective implementation and whether intelligence-sharing requirements have been established with non-NATO allies. Another issue may be how PSI is coordinated with other federal interdiction-related programs, like export control assistance. Reporting and coordination requirements now in public law may result in more information and better interagency coordination than in the past."], "subsections": []}, {"section_title": "Global Initiative to Combat Nuclear Terrorism", "paragraphs": ["In July 2006, Russia and the United States announced the creation of the Global Initiative to Combat Nuclear Terrorism before the G-8 Summit in St. Petersburg. Like PSI, this initiative is nonbinding, and requires agreement on a statement of principles. Thirteen nations\u2014Australia, Canada, China, France, Germany, Italy, Japan, Kazakhstan, Morocco, Turkey, the United Kingdom, the United States, and Russia\u2014endorsed a Statement of Principles at the initiative's first meeting in October 2006. The International Atomic Energy Agency (IAEA), European Union (EU), Interpol, U.N. Office on Drugs and Crime (UNODC), and the United Nations Interregional Crime and Justice Research Institute (UNICRI) have observer status. As of April 2018, 88 states have agreed to the statement of principles and are Global Initiative partner nations.", "U.S. officials have described the Initiative as a \"flexible framework\" to prevent, detect, and respond to the threat of nuclear terrorism. It is meant to enhance information sharing and build capacity worldwide. The Statement of Principles pledges to improve each nation's ability to secure radioactive and nuclear material, prevent illicit trafficking by improving detection of such material, respond to a terrorist attack, prevent safe haven to potential nuclear terrorists and financial resources, and ensure liability for acts of nuclear terrorism. Participating states share a common goal to improve national capabilities to combat nuclear terrorism by sharing best practices through multinational exercises and expert level meetings. Without dues or a secretariat, actions under the Initiative will take legal guidance from the International Convention on the Suppression of Acts of Nuclear Terrorism, the Convention on the Physical Protection of Nuclear Materials, and U.N. Security Council Resolutions 1540 and 1373.", "Global Initiative partner nations periodically hold exercises and workshops to improve coordination and exchange best practices. These are the primary activities held under the initiative. The Global Initiative does not have program funding of its own in the U.S. budget, and therefore Congress may consider whether its goals can be achieved within these constraints."], "subsections": []}, {"section_title": "Ad Hoc Sanctions and Incentives", "paragraphs": ["Other efforts\u2014such as economic, military, or security assistance\u2014may also help slow the proliferation of nuclear weapons. These cooperative measures have been effective in some cases (South Korea, Taiwan, Belarus, Kazakhstan, Ukraine), but failed in others (Iraq, Israel, Pakistan). Some favor greater use of sanctions against countries that violate international nonproliferation standards, while others view sanctions as self-defeating. Most observers conclude that a mix of positive and negative incentives, including diplomacy to address underlying regional security problems, provides the best opportunity for controlling the spread of nuclear weapons. However, when diplomacy fails, some policymakers have argued that military measures may be necessary to attack nuclear and other weapons of mass destruction and related facilities in states hostile to the United States or its allies. For example, the Bush Administration claimed that the overthrow of the Saddam Hussein regime in Iraq was justified, in part, on the basis of claims that Iraq possessed chemical and biological weapons and might resume efforts to develop nuclear weapons. As developments revealed, however, accurate intelligence is a key component of both diplomatic and military approaches to nonproliferation."], "subsections": []}]}]}, {"section_title": "Non-Nuclear Multilateral Endeavors", "paragraphs": ["The international community has concluded a number of arms control agreements, conventions, and arrangements that affect non-nuclear weapons. Two of these, the Conventional Armed Forces in Europe Treaty (CFE) and the Open Skies Treaty, were a part of the late-Cold War effort to enhance stability and predictability in Europe. Others seek to control the spread of technologies that might contribute to developing conventional or unconventional weapons programs. Finally, several seek to ban whole classes of weapons through international conventions."], "subsections": [{"section_title": "European Conventional Arms Control", "paragraphs": [], "subsections": [{"section_title": "Conventional Armed Forces in Europe Treaty (CFE)", "paragraphs": ["In late 1990, 22 members of NATO and the Warsaw Pact signed the Conventional Armed Forces in Europe (CFE) Treaty, agreeing to limit NATO and Warsaw Pact non-nuclear forces in an area from the Atlantic Ocean to the Ural Mountains. The CFE treaty did not anticipate the dissolution of the Soviet Union and the Warsaw Pact. Consequently, the participants signed the so-called \"Tashkent Agreement\" in May 1992, allocating responsibility for the Soviet Union's Treaty-Limited items of Equipment (TLEs) among Azerbaijan, Armenia, Belarus, Kazakhstan, Moldova, Russia, Ukraine, and Georgia. It also established equipment ceilings for each nation and the implied responsibility for the destruction/transfer of equipment necessary to meet these national ceilings. In 1999, the CFE Adaptation Agreement was signed to further adjust to the dissolution of the Warsaw Pact and the expansion of NATO. As discussed below, this agreement has not entered into force pending its ratification by NATO members, and Russia has suspended its participation in the CFE Treaty."], "subsections": [{"section_title": "Key Limits and Restrictions", "paragraphs": ["CFE placed alliance-wide, regional (zonal), and national ceilings on specific major items of military equipment. It sought to promote stability not only by reducing armaments, but also by reducing the possibility of surprise attack by preventing large concentrations of forces. The CFE treaty also provides for (1) very detailed data exchanges on equipment, force structure, and training maneuvers; (2) specific procedures for the destruction or redistribution of excess equipment; and (3) verification of compliance through on-site inspections. Its implementation has resulted in an unprecedented reduction of conventional arms in Europe, with over 50,000 (TLEs) removed or destroyed; almost all agree it has achieved most of its initial objectives.", "Under the CFE treaty all equipment reductions needed to comply with overall, national, and zonal ceilings were to have been completed by November 1995. As this deadline approached, it was evident that Russia would not meet those requirements, particularly in the so-called \"flank zones,\" which include the Leningrad Military District in the north, and more importantly, the North Caucasus Military District in the south. The outbreak of armed ethnic conflicts in and around the Caucasus, most notably in Chechnya, led Russia to claim it needed to deploy equipment in excess of treaty limits in that zone. Russia placed this claim in the context of broader assertions that some CFE provisions reflected Cold War assumptions and did not fairly address its new national security concerns. Further, it argued that economic hardship was making the movement of forces unaffordable in some cases.", "To address these concerns, the CFE parties negotiated a Flank Agreement, in early 1996. This agreement removed several Russian (and one Ukrainian) administrative districts from the old \"flank zone,\" thus permitting existing flank equipment ceilings to apply to a smaller area. To provide some counterbalance to these adjustments, reporting requirements were enhanced, inspection rights in the zone increased, and district ceilings were placed on armored combat vehicles to prevent their concentration."], "subsections": []}, {"section_title": "The Adaptation Agreement", "paragraphs": ["The 1996 CFE Review Conference opened negotiations to modify the treaty to account for the absence of the USSR and the Warsaw Pact, and the expansion of NATO into the Czech Republic, Poland, and Hungary. Most CFE signatories did not want to completely renegotiate the treaty. Russia, however, sought broader revisions, and, ironically, it sought to maintain the alliance-wide equipment ceilings. An alliance-wide cap on NATO would presumably force adjustments of national holdings as the NATO alliance expanded; such adjustments probably would not favor new member nations close to Russia's borders. The CFE parties did not adopt Russia's position and Russia ultimately agreed to a largely NATO-drafted document. This agreement called for, among other things, lower equipment levels throughout the \"Atlantic to the Urals\" area; enhanced verification procedures; and the replacement of NATO-Warsaw Pact \"bloc to bloc\" ceilings with national limits on all categories of TLEs. It also stated that the Flank Agreement was to remain in effect. The Adaptation Agreement reiterates that NATO has \"no plan, no intention, and no reason\" to deploy nuclear weapons on new members' territory; and seeks to improve new members' defensive capabilities through interoperability and capability for reinforcement, rather than by stationing additional combat forces on new members' territory. Russia's most serious focus has been, however, on NATO enlargement and how CFE could adapt to mitigate what many Russians see as an encroaching threat. Russia has called for the new members of NATO, particularly the Baltic states of Latvia, Lithuania, and Estonia, to become CFE state parties. These countries have indicated a willingness to join, however, they cannot do so until the Adaptation Agreement is ratified and the new CFE regime comes into force.", "At the Istanbul Summit in 1999, where the Adaptation Agreement was concluded, Russia undertook the so-called Istanbul Commitments to remove its troops from both the Republic of Georgia and the \"breakaway\" province of Transdniestra in Moldova. Though not part of the CFE Adaptation Agreement document, NATO members considered Russian fulfillment of these commitments a prerequisite for the ratification of the Agreement. Consequently, of the CFE signatories only Russia, Belarus, Ukraine, and Kazakhstan ratified the adapted treaty."], "subsections": []}, {"section_title": "Compliance Concerns", "paragraphs": ["In past compliance reports, the State Department asserted that Russian equipment holdings \"continue to exceed most of the legally binding limits for both the original and revised flank zones.\" It also cited Russia for relatively minor reporting violations and for its failure to complete withdrawals of its troops from Georgia and Moldova. It also cited Armenia, Azerbaijan, Belarus, and Ukraine for noncompliance. Armenia and Azerbaijan, engaged in a conflict over the Nagorno-Karabakh territory, have not completed equipment reductions; nor provided complete equipment declarations; nor provided timely notification of new equipment acquisition. Belarus was also cited for questionable equipment declarations and its refusal to allow inspectors access to an equipment storage site. The State Department deems Ukraine to have substantially complied with CFE requirements, but notes that it retained several hundred equipment items in excess of treaty limits. The State Department has raised significant issues with Russia's compliance, particularly in the years since Russia suspended its participation in the treaty."], "subsections": []}, {"section_title": "Russian CFE Suspension", "paragraphs": ["On April 26, 2007, Russian President Putin announced a \"moratorium\" on Russian CFE compliance, pointing to, among other things, the NATO nations' not having ratified the treaty as adapted. Subsequently, in statements to the press and diplomatic conferences, Russian officials elucidated the Russian position and its concerns. Among the major points are the following:", "During its CFE \"moratorium\" Russia will not allow CFE inspections nor will it report on its military movements. The Istanbul Commitments regarding troop withdrawals in Georgia and Moldova are not an integral part of the CFE Adaptation Agreement document, and consequently not legally binding and should not stand in the way of NATO members' ratification of the Agreement. The Baltic States and Slovakia are not bound by the CFE and their NATO membership, coupled with the new U.S. basing agreements with Poland, Bulgaria, and Romania, constitute an unacceptable encroachment on Russian national security. If the NATO nations do not ratify the CFE Adaptation Agreement within a year, Russia will consider complete withdrawal from the treaty.", "Russian officials, military leaders, and political commentators increasingly referred to the CFE treaty as a \"Cold War agreement,\" which no longer reflected the realities of the European security environment. Russian military officials' consultations at NATO Headquarters on May 10 brought no softening of the Russian position. A Russian request to the Organization for Security and Cooperation in Europe for a special conference of CFE signatories in June was granted. The conference failed to resolve any of the outstanding issues, and the State Parties were unable to find sufficient common ground to issue a final joint statement.", "The European and U.S. governments reacted with some surprise at the harshness of Russian statements, and urged Russia to address its concerns within the consultative framework of the treaty rather than pursue a withdrawal. However, then-Secretary of State Rice and Secretary of Defense Gates, in conversations with President Putin and Russian Foreign Minister Lavrov, and the Assistant Secretary of State for European and Eurasian Affairs, in testimony before the U.S. Commission on Security and Cooperation in Europe, reiterated the U.S. position that ratification of the CFE Adaptation Agreement still remained contingent upon Russia fulfilling its commitment to withdraw its military forces from Georgia and Moldova.", "On November 30, 2007, President Putin signed legislation from the Duma that suspended Russian compliance with CFE, effective December 12, 2007. This action came during the Madrid OSCE summit meeting and evoked an expression of regret on the part of NATO officials, who noted that Russia's military posture would be under discussion at the NATO foreign ministers meeting in December. Under Secretary of State Nicholas Burns characterized the Russian action as a \"mistake\" and urged Russia to negotiate its concerns within the CFE framework. ", "Russian officials emphasized that this action was not a withdrawal from the treaty, and that they were willing to participate in further discussions if they perceived a greater willingness on the part of the NATO allies to address their concerns. However, in recent years, it has become clear that Russia does not intend to return to the CFE Treaty; it would prefer the negotiation of a new agreement that reflected the new security environment in Europe. Moreover, in March 2015, Russia suspended its participation in the Joint Consultative Group of the CFE Treaty, leaving little room for continued dialogue or cooperation.", "Russian officials indicated, in 2007, that Russia did not plan to conduct any significant redeployment of forces outside the treaty limits. However, in August 2008, Russia sent military forces into Georgia without the consent of the Georgian government and recognized two provinces of Georgia, Abkhazia and South Ossetia, as independent states. U.S. officials have noted that these steps are inconsistent with Russia's obligation under the CFE Treaty \"to refrain ... from the threat or use of force against the territorial integrity or political independence of any State.\" In addition, because Russia has suspended its participation in the treaty, it has not allowed any on-site inspections and has not provided any data mandated by the treaty.", "Some observers, and Russian spokesmen, portrayed the Russian moves regarding CFE as an asymmetrical response to the Bush Administration's proposed deployment of a U.S. ground-based missile defense system in Poland and the Czech Republic. Others, including Chief of the Russian General Staff Baluyevsky, discounted a specific linkage, seeing the missile defense controversy as merely one element of a more broadly ranged dissatisfaction with changes in the European security environment, which, from the Russian perspective, have favored the NATO allies."], "subsections": []}, {"section_title": "The U.S. Response", "paragraphs": ["In November 2011, the United States announced that it would stop implementing its data exchange obligations under the CFE Treaty with respect to Russia. The United States would continue to share data with other treaty partners, and would not exceed the numerical limits on conventional armaments and equipment established by the treaty. But it would withhold data from Russia because Russia has refused to accept inspections and ceased to provide information to other CFE Treaty parties since its 2007 decision. ", "The U.S. State Department, in its statement on the treaty, indicated that the United States remained committed to revitalizing conventional arms control in Europe. It also indicated that, in order to increase transparency and promote stability in the region, the United States would voluntarily inform Russia of any significant change in the U.S. force posture in Europe."], "subsections": []}]}, {"section_title": "Treaty on Open Skies34", "paragraphs": ["Open Skies was originally proposed by President Eisenhower in 1955. In the years before satellites began to collect intelligence data, aerial overflights were seen as a way to gain information needed for both intelligence and confidence-building purposes. The Soviet Union rejected President Eisenhower's proposal because it considered the overflights equal to espionage. ", "President George H. W. Bush revived the Open Skies proposal in May 1989. By this time, both the United States and Soviet Union employed satellites and remote sensors for intelligence collection, so aircraft overflights would add little for that objective. But, at the time when Europe was emerging from the East-West divide of the Cold War, the United States supported increased transparency throughout Europe as a way to reduce the chances of military confrontation and to build confidence among the participants. ", "On March 24, 1992, the United States, Canada, and 22 European nations signed the Treaty on Open Skies. The U.S. Senate gave its advice and consent to the ratification of the Open Skies Treaty in August 1993, but Russia and Belarus delayed their ratification until May 2001. The Treaty entered into force on January 1, 2002. It currently has 34 participating member states that have conducted more than 1,000 observation flights since the treaty entered into force.", "Under the Open Skies Treaty, the parties agreed to permit unarmed aircraft to conduct observation flights over their territories. Although the flights often focus on military activities, the information they gather was not intended to be used to verify compliance with limits in other arms control agreements. Instead, Open Skies is designed as a confidence-building measure, to promote openness and enhance mutual understanding about military activities. It was designed to allow all nations, including those without access to satellites, to collect information on military forces and activities of other parties to the treaty and to gain an improved understanding of military activities in other nations. Overflights may provide early signs of efforts to build up military forces or, conversely, assurances that an adversary or neighbor is not preparing its military for a possible conflict. In addition, in recent years, it has helped nations in Europe observe and monitor Russian forces in areas near its border with Ukraine, where Russian forces are supporting an insurgency."], "subsections": [{"section_title": "The Provisions of Open Skies", "paragraphs": ["The parties to the Open Skies Treaty have agreed to make all of their territory accessible to overflights by unarmed fixed wing observation aircraft. They can restrict flights over areas, such as nuclear power plants, where safety is a concern, but they cannot impede or prohibit flights over any area, including military installations that are considered secret or otherwise off-limits. In most cases, the nation conducting the observation flight will provide the aircraft and sensors for the flight. However, Russia insisted that the Treaty permit the observed country to provide the aircraft if it chose to do so. Nations can also team up to conduct overflights to share the costs of the effort or use aircraft and sensor suites provided by other nations. Each nation is assigned a quota of overflights that it can conduct and must be willing to receive each year. The quota is determined, generally, by the size of the nation's territory. For the United States, this quota is equal to 42 observation flights per year.", "The treaty permits the nations to use several types of sensors\u2014including photographic cameras, infrared cameras, and synthetic aperture radars\u2014during their observation flights. The permitted equipment allows the nations to collect basic information on military forces and activities, but it is not intended to provide them with detailed technical intelligence. For example, the resolution on the sensors would allow the nations to identify vehicles and distinguish between tanks and trucks, but probably will not allow them to tell one type of tank from another. Each observation flight produces two sets of data\u2014one for the observing nation and one for the observed nation. This allows the nation under observation to know what information was collected during the flight. Other parties to the treaty can purchase copies of the data, so all parties can share in the information collected during all flights. Each nation is responsible for its own analysis of the data. ", "The participants to the treaty have revisited the agreement's list of permitted sensors as technology has moved forward. For example, the permitted cameras use film that is no longer available, and parts that are no longer supported by most manufacturers, leading several countries to pursue a transition to digital cameras. Russia, in particular, has petitioned the Open Skies Consultative Commission to use digital cameras in flights over the United States. Russia has also asked the Open Skies Consultative Commission for permission to use high-powered digital cameras on flights over the United States. The capabilities of these cameras are within the scope permitted by the treaty and they use commercially available, unclassified technology. Russia already uses them on flights over Europe. However, some officials in the Pentagon and U.S. intelligence community have expressed concern about the quality of data that Russia may collect with these cameras, noting that the information could help Russia fill in gaps in its satellite surveillance capabilities."], "subsections": []}, {"section_title": "Implementation", "paragraphs": ["Although several of the participating nations conducted practice missions in the years before the Treaty entered into force, the first official overflight mission occurred in 2002. The parties conduct approximately 100 observation flights each year. In recent years, the United States has received 4-9 observation flights from Russia and has conducted 14-16 flights over Russia each year, although there were no flights in 2018. The United States also, occasionally, uses its open skies aircraft to monitor natural disasters, such as the recent earthquake in Haiti. It has also joined with Ukraine and other participants to conduct flights over Ukraine that can monitor Russian military forces across the border in Russia.", "In recent years, the United States has raised concerns about Russia's compliance with the Open Skies Treaty. For example, according to the U.S. State Department's annual report on compliance with arms control agreements, Russia has refused access for Open Skies observation over Chechnya and nearby areas of southwestern Russia. It has also limited access to a region over Moscow, and along the border of Russia with the Georgian regions of South Ossetia and Abkhazia. Moreover, according to the State Department, Russia has failed to provide priority flight clearance for Open Skies flights on a few occasions. The United States has responded to limitations imposed by Russia by restricting Russian flights over the United States. In late 2017, it limited the length of flights over Hawaii and removed access to two U.S. air force bases the Russians used to overnight during their missions over the United States. In 2018, the United States also blocked approval of Russia's use of new cameras on its Open Skies Aircraft, although this decision was quickly reversed and flights have resumed in 2019."], "subsections": []}]}, {"section_title": "The Missile Technology Control Regime", "paragraphs": ["The United States, Canada, France, Germany, Italy, Japan, and the United Kingdom established the Missile Technology Control Regime (MTCR) on April 16, 1987. Designed to slow the proliferation of ballistic and cruise missiles, rockets, and unmanned air vehicles (UAV) capable of delivering weapons of mass destruction, the MTCR is an informal, voluntary arrangement in which participants agree to adhere to common export policy guidelines applied to an \"annex\" that lists controlled items. Partner-countries adopt the guidelines as national policy and are responsible for restraining their own missile-related transfers. In addition, partners regularly exchange information on relevant export licensing issues, including denials of technology transfers. The MTCR has neither an independent means to verify whether states are adhering to its guidelines nor a mechanism to penalize states if they violate them.", "The MTCR is based on the premise that foreign acquisition or development of delivery systems can be delayed and made more difficult and expensive if major producers restrict exports. Analysts credit the MTCR with slowing missile development in Brazil and India, blocking a cooperative missile program of Argentina, Egypt, and Iraq, and eliminating missile programs in South Africa and Hungary. Moreover, partner countries have tightened their export control laws and procedures, and several have taken legal action against alleged missile-technology smugglers. On the other hand, some analysts note that the MTCR does not regulate countries' acquisition or production of missiles and cannot prevent nonpartners from exporting missiles and technology. It has also been difficult to restrain exports of ballistic and cruise missile technology from some partners\u2014Russia has exported technology to Iran and Great Britain has done so to the United Arab Emirates. In addition, many analysts have argued that advances in missile-related technology will challenge the MTCR's future ability to check missile proliferation. Analysts and experts in the international community have also discussed the possibility that the \"supply side\" approach of the MTCR has outlived its usefulness and that a \"demand side\" approach to proliferation, on a regional or global basis, might prove more effective."], "subsections": [{"section_title": "Participants", "paragraphs": ["Since 1987, the number of MTCR partners has grown from 7 to 35, with India joining the regime in 2016. Several nonpartners, including China, Israel, Romania, Slovakia, and India, have said they will restrict their transfers of missile equipment and technology according to the MTCR. Membership in the regime is decided by consensus. According to former MTCR Chairman Per Fischer, \"[p]otential members are reviewed on a case-by case basis, and decisions regarding applications are based on the effectiveness of a state's export controls \u2026 its potential contribution to the regime and its proliferation record.\" The United States supports new requests for membership to the regime only if the country in question agrees not to develop or acquire missiles (excluding space launch vehicles) that exceed MTCR guidelines."], "subsections": []}, {"section_title": "Substance of the MTCR", "paragraphs": ["The MTCR guidelines call on each partner country to exercise restraint when considering transfers of equipment or technology, as well as \"intangible\" transfers, that would provide, or help a recipient country build, a missile capable of delivering a 500 kilogram (1,100 pound) warhead to a range of 300 kilometers (186 miles) or more. The 500 kilogram weight threshold was intended to limit transfers of missiles that could carry a relatively crude nuclear warhead. A 1993 addition to the guidelines calls for particular restraint in the export of any missiles or related technology if the nation controlling the export judges that the missiles are intended to be used for the delivery of weapons of mass destruction (nuclear, chemical, or biological). Thus some missiles with warheads weighing less than 500 kilograms also fall under MTCR guidelines. From time to time, regime partners update the MTCR guidelines and annex.", "The MTCR annex contains two categories of controlled items. Category I items are the most sensitive. There is \"a strong presumption to deny such transfers,\" according to the MTCR guidelines. Regime partners have greater flexibility in exports of Category II items.", "Category I items include complete rocket systems (including ballistic missiles, space launch vehicles, and sounding rockets), UAV systems (including cruise missiles systems, target and reconnaissance drones), production facilities for such systems, and major subsystems (including rocket stages, reentry vehicles, rocket engines, guidance systems, and warhead mechanisms). Transfers of Category I production facilities are not to be authorized. Category II items are other less sensitive and dual-use missile-related components that could be used to develop a Category I system, and complete missiles and major subsystems of missiles capable of delivering a payload of any size to a range of 300 km."], "subsections": []}]}, {"section_title": "Hague Code of Conduct Against Ballistic Missile Proliferation (HCOC)", "paragraphs": ["The Hague Code of Conduct Against Ballistic Missile Proliferation (HCOC) was inaugurated on November 25, 2002. The HCOC is not a treaty but instead a set of \"fundamental behavioral norms and a framework for cooperation to address missile proliferation.\" It focuses on the possession of ballistic missiles, as a complement to the supply-side-oriented MTCR. Subscribing states have held regular conferences since the code came into effect. ", "The code intends to \"prevent and curb the proliferation of Ballistic Missile systems capable of delivering weapons of mass destruction.\" It calls on subscribing states \"to exercise maximum possible restraint in the development, testing and deployment of Ballistic Missiles capable of delivering weapons of mass destruction [WMD], including, where possible, to reduce national holdings of such missiles.\" Subscribing states also agree not to assist ballistic missile programs in countries suspected of developing WMD. The HCOC also calls for subscribing states to \"exercise the necessary vigilance\" in assisting other countries' space-launch programs, which could serve as covers for ballistic missile programs.", "Additionally, subscribing states \"resolve to implement\" several transparency measures, such as producing annual declarations that provide outlines of their ballistic missile policies, as well as \"information on the number and generic class\" of such missiles launched during the preceding year. The code also calls on subscribing states to provide similar annual declarations regarding their \"expendable Space Launch Vehicle\" programs. Furthermore, the HCOC calls on states to \"exchange pre-launch notifications on their Ballistic Missile and Space Launch Vehicle launches and test flights.\" Signatories are required to provide such notifications to Austria, which serves as the Immediate Central Contact and Executive Secretariat for the HCOC. The United States and Russia each provide such notifications and the annual declarations described above."], "subsections": []}, {"section_title": "The Wassenaar Arrangement", "paragraphs": ["In July 1996, 33 nations approved the Wassenaar Arrangement (formally titled the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies) on export controls for conventional arms and dual-use goods and technologies. This agreement replaces the Coordinating Committee for Multilateral Export Controls (CoCom)\u2014the Cold War organization that controlled sensitive exports of technologies to Communist nations.", "According to its Guidelines and Procedures, the Wassenaar Arrangement is not formally targeted at \"any state or group of states.\" But it is \"intended to enhance co-operation to prevent the acquisition of armaments and sensitive dual-use items for military end-uses, if the situation in a region or the behaviour of a state is, or becomes, a cause for serious concern.\"", "The arrangement is designed \"to contribute to regional and international security and stability, by promoting transparency and greater responsibility in transfers of conventional arms and dual-use goods and technologies, thus preventing destabilizing accumulations.\" Member decisions are made by consensus. This group has a broader membership but smaller lists of controlled goods than did CoCom. Its control regime is also less rigorous. Under Wassenaar, each national government regulates its own exports, whereas under CoCom, any member could disapprove any other members' export by of a controlled item to a proscribed destination. There is also no mechanism to punish a participating state for violating Wassenaar guidelines."], "subsections": [{"section_title": "Membership", "paragraphs": ["The arrangement's guidelines specify that several factors must be considered when deciding on a potential new member's eligibility. These include whether the state has adopted the arrangement's control lists \"as a reference in its national export controls,\" the government's \"adherence to fully effective export controls,\" and whether the state adheres to several other multilateral agreements."], "subsections": []}, {"section_title": "Items Controlled", "paragraphs": ["Participating states agree to control exports and retransfers of items on a Munitions List and a List of Dual-Use Goods and Technologies. The decision to allow or deny transfer of an item is the sole responsibility of each participating state. The control lists are updated frequently."], "subsections": []}, {"section_title": "Organization and Operations", "paragraphs": ["Twice a year participating states report all transfers or licenses issued for sensitive dual-use goods or technology and all deliveries of items on the Munitions List. The data exchange identifies the supplier, recipient, and items transferred.", "Participating states also report denials of licenses to transfer items on the dual-use list to nonmember states. The arrangement does not prohibit a participating country from making an export that has been denied by another participant (this practice is called \"undercutting\"). But participants are required to report soon after they approve a license for an export of dual-use goods that are essentially identical to those that have been denied by another participant during the previous three years.", "During plenary and working group discussions, participating states voluntarily share information on potential threats to peace and stability and examine dangerous acquisition trends. The participants review the scope of reporting and coordinating national control policies and develop further guidelines and procedures. Twice a year, the group reviews the Munitions List with a view to extending information and notifications."], "subsections": []}]}]}, {"section_title": "Weapons Control and Elimination Conventions", "paragraphs": [], "subsections": [{"section_title": "Chemical Weapons Convention", "paragraphs": ["The Chemical Weapons Convention (CWC) bans the development, production, transfer, stockpiling, and use of chemical and toxin weapons, mandates the destruction of all chemical weapons production facilities, and seeks to control the production and international transfer of the key chemical components of these weapons. Negotiations began in 1968, but made little progress for many years. Verification issues, in particular, stalled the talks until the Soviet Union accepted challenge inspections. In September 1992, the Conference on Disarmament's 40 member-nations agreed on the final draft for the Convention, and it opened for signature in January 1993. As of November 30, 2015, 192 nations were party to the treaty, which entered into force on April 29, 1997. Israel has signed but not ratified the Convention. Egypt, North Korea, and South Sudan have not signed the CWC. Under the convention, states-parties provide declarations, which detail chemical weapons-related activities or materials and relevant industrial activities, to the Organization for the Prohibition of Chemical Weapons (OPCW). The OPCW inspects and monitors states-parties' facilities and activities that are relevant to the convention.", "The U.S. Senate held hearings and debated the CWC for more than four years before consenting to its ratification on April 24, 1997. Congress passed the CWC implementing legislation, as a part of the FY1999 Omnibus Appropriations Act ( P.L. 105-277 ), in late October 1998. This legislation provides the statutory authority for U.S. domestic compliance with the convention's provisions. The legislation also provides detailed procedures to be used for on-site inspections by the OPCW, including limitations on access and search warrant procedures, should they be required."], "subsections": [{"section_title": "Limits and Restrictions", "paragraphs": ["Parties to the convention have agreed to cease all offensive chemical weapons research and production and close all relevant facilities. They agreed to declare all chemical weapons stockpiles, allow an inventory by international inspectors, and seal their stocks. They must also destroy their weapons within 10 years, unless the OPCW approves an extension. They must also destroy all chemical weapons production facilities within 10 years. In \"exceptional cases of compelling need,\" the OPCW may approve the conversion of these facilities to peaceful purposes.", "The CWC contains a complex verification regime, with different obligations applying to different types of chemical facilities. The convention establishes three schedules of chemicals, grouped by relevance to chemical weapons production and extent of legitimate peaceful uses. Some facilities are subject to systematic on-site verification; others are subject to periodic verification inspections. Facilities for a third class of chemicals are subject to random or \"ad hoc\" inspections. Signatories may also request challenge inspections at facilities suspected to be in violation of the convention. The OPCW will carry out these inspections on short notice. Inspected nations will have the right to negotiate the extent of inspectors' access to any facility, but must make every reasonable effort to confirm compliance."], "subsections": []}, {"section_title": "Destruction Deadlines", "paragraphs": ["According to the OPCW, all of the member-states' declared chemical weapons production facilities have been inactivated and, as of March 13, 2018, approximately 96% of declared chemical weapons agent stockpiles had been destroyed. This amount does not include the chemical stockpiles declared by Syria (see below).", "Six countries declared possession of chemical weapons, but none destroyed their stocks by the original April 29, 2007, deadline. In July 2007, Albania became the first country to have destroyed its declared chemical weapons. South Korea became the second on July 10, 2008. India became the third on March 16, 2009. Five other states\u2014Iraq, Libya, Russia, Syria, and the United States\u2014have declared possession of such weapons. "], "subsections": []}, {"section_title": "Libya", "paragraphs": ["Libya joined the CWC in January 2004. At that time, Libya declared nearly 25 metric tonnes of bulk sulfur mustard agent, several thousand unloaded aerial munitions designed for use with chemical warfare agents, and several chemical weapons production facilities. The declared aerial munitions were destroyed in March 2004. Production facilities were destroyed or converted under OPCW supervision. ", "Libya had said that it would destroy its Category One weapons by December 31, 2010, and its Category Two weapons by December 31, 2011. However, Tripoli was given until May 15, 2011, to destroy all of its Category One weapons. As of October 31, 2010, Libya had destroyed approximately 4% of its Category One weapons and over 39% of its Category Two weapons. These weapons, which included some undeclared stocks of mustard gas, remained on Libyan territory after the 2011 revolution and fall of the Muammar al Qadhafi regime. Libya's Permanent Representative to the OPCW stated March 11, 2011, that the country's \"situation regarding the chemical weapons to be destroyed remains unchanged and under control.\" In January 2012, OPCW inspectors returned to Libya to verify the status of Libya's chemical weapons stockpiles. ", "In 2013, Libya completed the destruction of its stock of bulk mustard agent. Libya announced in January 2014 that it had completed destruction of the CW-filled munitions it had discovered and declared in 2011 and 2012. Libya was to have destroyed its stocks of Category 2 (precursor) chemicals by the end of 2016, but stated in a February 2016 letter to the OPCW Director-General that \"it is not realistic to expect that the destruction of these chemical weapons will be completed within the set time frame without an effective international assistance.\" Libya had informed the OPCW Executive Council in September 2015 that Tripoli lacked the appropriate technology for destroying its remaining stockpile. On February 24, 2016, the council requested the OPCW Director-General \"to identify and evaluate the technical, operational, security, financial, and legal factors relevant to all the options for addressing the destruction of the remaining Libyan chemical weapons, including the removal of some or all the chemicals from Libya and destruction outside Libya, and options for in-country destruction.\" The U.N. Security Council endorsed this in July (UNSC Resolution 2298 [2016]). ", "In August 2016, Denmark led a maritime operation that removed all 500 metric tons of precursor chemicals from Libya to a destruction facility in Germany. According to the OPCW, Canada, Denmark, Finland, France, Germany, Italy, Malta, Spain, United Kingdom, and the United States contributed financial and technical assistance. The OPCW confirmed the complete destruction of all of Libya's chemical weapons in January 2018."], "subsections": []}, {"section_title": "Syria52", "paragraphs": ["Syria acceded to the CWC as part of a diplomatic effort in the fall of 2013. The United States threatened military action against Syria in response to chemical weapons use against civilians in August 2013. The United States withdrew the threat, and Syria agreed to join the CWC and declare and destroy all of its chemical weapons stocks and production facilities. U.N. Security Council Resolution 2118 (2013) mandated that Syria give up all its chemical weapons under Chapter VII provisions of the U.N. Charter and created a mechanism for verifying this process, with a primary role for the OPCW Secretariat.", "At the start of its civil war, Syria had more than 1,000 metric tons of chemical warfare agents and precursor chemicals, including several hundred metric tons of the nerve agent sarin, several hundred metric tons of mustard agent in ready-to-use form, and several metric tons of the nerve agent VX. A U.N. and OPCW Joint Mission oversaw the removal and destruction of these chemical weapons agents from Syria, and all Category 1 and 2 declared chemicals were destroyed as of June 2014. Destruction of chemical weapons facilities is still underway, and serious questions remain over whether Syria has declared all of its chemical weapons stocks. The OPCW's Declaration Assessment Team (DAT) continues to investigate these outstanding issues through interviews and lab analysis of samples from site visits. ", "The State Department's 2018 report assessing CWC compliance says that the United States cannot certify that Syria is in compliance with the CWC, that Syria has been using chemical weapons systematically for years, and that Syria has not declared \"all the elements of its chemical weapons program\" and has retained some chemical weapons.", "The Syrian government continues to deny categorically that it has used chemical weapons or toxic chemicals, while accusing opposition forces of doing so. The U.N. representatives of the United States, France, and the United Kingdom continue to cite information they believe suggests Syrian government complicity in conducting ongoing chemical attacks, particularly with chlorine. Expert teams affiliated with the Joint U.N. Mission to Investigate Allegations of the Use of Chemical Weapons in the Syrian Arab Republic (JIM) and the OPCW Fact Finding Mission (FFM) in Syria have investigated some of these allegations and have found evidence that in some cases confirms and in others suggests that chemical weapons (such as sarin) and/or toxic chemicals have been used in attacks. "], "subsections": []}, {"section_title": "Russia", "paragraphs": ["The CWC Conference of States-Parties gave Russia until December 31, 2009, to destroy 45% of its Category One stockpiles and until April 29, 2012, to destroy the rest. Russia did not meet the 2012 deadline but stated that it planned to destroy its stockpiles by December 31, 2020. In September 2017, the OPCW confirmed that the Russian Federation had totally destroyed its declared chemical weapons stockpile. The OPCW had verified the destruction of 39,967 metric tons of Category One chemical weapons at seven facilities. Moscow had previously destroyed its Category Two and Category Three chemical weapons stockpiles. Under DOD's Cooperative Threat Reduction Program, the United States and other partner countries provided Russia with considerable financial assistance for chemical weapons destruction. ", "In congressionally mandated annual reports to Congress, the State Department has said it could not certify that the Russian Federation was in compliance with the CWC because its required declarations of stockpile and development and production facilities were incomplete. In addition, the 2018 report said that due to \"Russia's March 4, 2018, use of a military-grade nerve agent to attack two individuals in the United Kingdom, the United States certifies that the Russian Federation is in non-compliance with its obligations under the CWC.\""], "subsections": []}, {"section_title": "The United States", "paragraphs": ["The United States has also encountered difficulties in destroying its Category One chemical weapons stockpile and did not meet its 2007 deadline for doing so. Washington has already destroyed its Category Three stockpile and has declared no Category Two weapons. In April 2006, the United States submitted its formal request to the OPCW Chairman and Director-General to extend the United States' final chemical weapons destruction deadline from April 2007 to April 29, 2012, the latest possible date allowed under the CWC. However, Ambassador Eric Javits, then-U.S. Permanent Representative to the OPCW, added that the United States did \"not expect to be able to meet that deadline\" because Washington had encountered \"delays and difficulties\" in destroying its stockpile. These delays have generally resulted from the need to meet state and federal environmental requirements and from both local and congressional concerns over the means of destruction. ", "The 2008 Defense Appropriations Act ( P.L. 110-116 ) required the Defense Department to \"complete work on the destruction\" of the U.S. chemical weapons stockpile by the 2012 deadline \"and in no circumstances later than December 31, 2017.\" The National Defense Authorization Act for Fiscal Year 2016 ( P.L. 114-92 ) changed this deadline to December 31, 2023. The OPCW reported in April 2018 that the organization had verified the destruction of about 90.5% of the U.S. Category One stockpile. The United States projects that the Colorado and Kentucky facilities will destroy the remaining chemical agents stockpiles. According to a 2017 Defense Department report, these stockpiles are to be destroyed by November 2019 and September 2023, respectively."], "subsections": []}, {"section_title": "Iraq", "paragraphs": ["Iraq used chemical weapons during its 1980-1988 war with Iran and against Iraqi Kurds in 1988. Following the 1991 Persian Gulf War, the U.N. Security Council adopted Resolution 687 on April 3, 1991. This resolution was the first in a series of resolutions that required Iraq to declare its programs for nuclear, chemical, and biological weapons, as well as missiles with ranges exceeding 150 kilometers, and to destroy the weapons and related materials under U.N. monitoring. Regarding chemical weapons, Resolution 687 required Iraq to \"unconditionally accept the destruction, removal, or rendering harmless, under international supervision of ... [a]ll chemical and biological weapons and all stocks of agents and all related subsystems and components and all research, development, support and manufacturing facilities.\" The resolutions also required Baghdad to accept an ongoing U.N. monitoring regime to prevent Iraqi reconstitution of its prohibited weapons programs. The U.N. Secretary-General subsequently formed the United Nations Special Commission (UNSCOM) to verify Iraq's compliance with the resolution. ", "Iraq's chemical weapons generally met one of four fates: they were used during the Iran-Iraq war; they were destroyed by Iraq under UNSCOM supervision; they were secretly destroyed by Iraq outside UNSCOM supervision; or they were destroyed by coalition forces during the 1991 Persian Gulf War. Although \"a number of issues relating to Iraq's chemical weapons programme remain unresolved,\" according to a 2006 U.N. report, the inspectors \"were able to identify the major parameters of this programme, its scope and the results achieved.\" Moreover, the \"vast majority\" of chemical agents and munitions which Iraq possessed in 1991 were \"declared by Iraq, identified by the inspectors and destroyed under international supervision,\" according to the report.", "Iraq's legacy chemical weapons were \"contained in two sealed bunkers\" at an old Iraqi chemical weapons production facility, according to a July 31, 2012, British Ministry of Defense statement. These weapons were \"left over after being rendered unusable by the UN inspection teams,\" OPCW Director-General Ambassador Ahmet \u00dcz\u00fcmc\u00fc said in a June 6, 2013, speech. Iraq acceded to the CWC in 2009 and worked with the OCPW and several countries to devise an appropriate disposal method for these weapons. ", "Permanent Representative of Iraq Mohamed Alhakim stated in a June 30, 2014, letter to U.N. Secretary\u2013General Ban Ki-moon that Iraq is currently \"unable to fulfill its obligations to destroy chemical weapons\" and will resume these \"obligations as soon as the security situation has improved and control of the facility has been regained.\" Iraq reiterated its \"commitment to continue implementing the destruction plan for the remnants of the former regime's chemical programme, as early as possible,\" according to a March 17, 2015, statement. \"Due to the ongoing security situation, no further action has been taken,\" \u00dcz\u00fcmc\u00fc stated on November 30, 2015. However, Iraq began to destroy the weapons in 2017, \"once the on-going security situation had been addressed.\" The OPCW confirmed in November 2017 and February 2018 that the four former chemical weapons production facilities in Iraq were completely destroyed. \u00dcz\u00fcmc\u00fc stated in March 2018 that Iraq had completed destroying its \"chemical weapons remnants.\"", "On June 11, 2014, the Islamic State of Iraq and the Levant (ISIL) invaded the al-Muthanna chemical weapons facility. The Iraqi government has stated that \"the relevant Iraqi authorities saw to it that all sensitive equipment and instruments\" at the site \"were transferred to safe locations.\" Iraqi armed forces regained control of the site on October 28, 2014. An Iraqi assessment \"confirmed the integrity\" of the bunkers' \"walls and entries.\" However, ISIL has apparently been using chemical weapons in Iraq. The group \"was likely responsible\" for some attacks in Iraq with mustard agent, State Department spokesperson Elizabeth Trudeau told reporters on April 1, 2016. Director-General \u00dcz\u00fcmc\u00fc stated on March 23, 2016, that the OPCW has helped Iraq confirm \"the use of sulfur mustard in an attack in the Kurdistan Region of Iraq.\" Experts and government officials have argued that ISIL probably did not obtain chemical agents from Iraqi stockpiles."], "subsections": []}, {"section_title": "Other Compliance Issues", "paragraphs": ["A State Department report covering 2014 raised some additional compliance questions, but did not conclude that any other CWC state-party had a chemical weapons program in violation of the Convention."], "subsections": []}]}, {"section_title": "Biological Weapons Convention", "paragraphs": ["In 1969, the Nixon Administration unilaterally renounced U.S. biological weapons (BW). Offensive BW development and production ceased, and destruction of the U.S. BW stockpile began. Simultaneously, the United States pressed the Soviet Union to follow its example. After some delay, agreement was reached, and the Biological Weapons Convention (BWC) was signed in 1972. The United States, after lengthy Senate consultations, ratified the convention in 1975, the same year that the convention entered into force.", "The BWC bans the development, production, stockpiling, and transfer of biological weapons, as well as biological agents and toxins. It also bans \"equipment or means of delivery designed to use such agents or toxins for hostile purposes or in armed conflict.\" In addition, the convention requires states-parties to destroy all relevant \"agents, toxins, weapons, equipment and means of delivery.\" The BWC permits only defensive biological warfare research (e.g., vaccines, protective equipment) and allows production and stockpiling of BW agents only in amounts justifiable for protective or peaceful purposes. Unlike the Chemical Weapons Convention (CWC), the BWC does not specify particular biological agents, but generically defines them as \"microbial or other biological agents or toxins whatever their origin or method of production, of types and in quantities that have no justification for prophylactic or peaceful purposes.\" The convention does not contain any independent verification or enforcement mechanisms."], "subsections": [{"section_title": "Verification and Enforcement", "paragraphs": ["The Fifth Review Conference of the BWC, which took place in November 2001, ended in disarray, with the parties unable to agree upon a final declaration. The primary deadlock was the issue of an adaptive protocol to the convention, intended to enhance its enforcement. In July 2001, after almost seven years of negotiations, the United States declared the 200-page protocol unacceptable as basis for further negotiation. A Bush Administration review concluded that the draft protocol would not provide adequate security against covert violations, yet could endanger the security of U.S. biodefense programs and U.S. commercial proprietary information. Alone in its complete rejection of the draft protocol, the United States came under widespread international criticism, including from close allies, for \"jeopardizing\" the future of biological arms control. In response, the Administration put forward several proposals at the 2001 Review Conference, urging their adoption by BWC State Parties at the national level. These included the following:", "Criminalization of BWC violations and expedited extradition procedures for violators. United Nations investigation of suspicious disease outbreaks or alleged BW use. Procedures for addressing BWC compliance concerns. Improved international disease control. Improved security over research on pathogenic organisms.", "The Review Conference was unable to reach a compromise final declaration on future activities satisfactory to all state parties, and adjourned until November 2002. The United States has continued to oppose further negotiations on verification. Confronted with the U.S. position, the chairman of the 2002 Review Conference presented a minimal program emphasizing only annual meetings to discuss strengthening national laws and ways to respond to BW attacks. These were endorsed by the United States and accepted by the conference.", "The 6 th BWC Review Conference, held in December 2006, could not reach consensus on a comprehensive set of guidelines for national implementation of the convention owing to differences between the United States and the nonaligned nations group over technology transfer control issues. The assumption of U.S. opposition also precluded consideration of enhanced verification or enforcement provisions for the convention. The conference, however, did establish a new program of work for annual meetings, which took place before the 7 th Review Conference in December 2011. The meetings included discussion and information exchanges on a variety of issues, including domestic enforcement of BWC provisions, pathogen security, and oversight of potentially dual-use research. The United States required, however, that these sessions be prohibited from reaching binding decisions. Beginning in 2007, the BWC states-parties have met annually.", "The Obama Administration chose not to support revival of the negotiations on a BWC verification protocol, Under Secretary for Arms Control and International Security Ellen Tauscher announced in a December 9, 2009, address to the BWC states-parties. The Administration has \"determined that a legally binding protocol would not achieve meaningful verification or greater security,\" she explained, adding ", "[t]he ease with which a biological weapons program could be disguised within legitimate activities and the rapid advances in biological research make it very difficult to detect violations. We believe that a protocol would not be able to keep pace with the rapidly changing nature of the biological weapons threat.", "Instead, Tauscher stated, the United States believes that \"confidence in BWC compliance should be promoted by enhanced transparency about activities and pursuing compliance diplomacy to address concerns.\" Pointing out that part of the November 2009 U.S. National Strategy for Countering Biological Threats is to \"reinvigorate\" the BWC, Tauscher exhorted the convention's states-parties to join the United States in \"increasing transparency, improving confidence building measures and engaging in more robust bilateral compliance discussions.\" She proposed such measures as increasing participation in the convention's confidence-building measures, as well as bilateral and multilateral cooperation in such areas as pathogen security and disease surveillance and response. ", "The 7 th Review Conference took place from December 5 to 22, 2011. The conference participants decided to continue the intersessional process with some changes. The annual meetings will address three standing agenda items: cooperation and assistance, review of relevant scientific and technological developments, and strengthening national implementation. In addition, during the intersessional program, the states-parties were to discuss enabling fuller participation in BWC-related confidence-building measures and strengthening implementation of Article VII of the convention. After the most recent review conference, which took place from November 7 to 25, 2016, the conference participants decided that the states-parties are to meet annually. The first meeting was to \"seek to make progress on issues of substance and process for the period before the next Review Conference, with a view to reaching consensus on an intersessional process,\" according to the final conference document. During that meeting, w hich took place from December 4 to 8, 2017, the participants decided that a group of experts meeting would also take place annually. Groups of experts have met annually in the past as part of the intersessional process. "], "subsections": []}]}, {"section_title": "The Arms Trade Treaty", "paragraphs": ["The Arms Trade Treaty (ATT) is a multilateral treaty of unlimited duration. Its stated objectives are to \"[e]stablish the highest possible common international standards for regulating or improving the regulation of the international trade in conventional arms ...\" and to \"[p]revent and eradicate the illicit trade in conventional arms and prevent their diversion.\" ", "Though various concepts similar to the ATT have been discussed in international circles for decades, a speech by the UK Foreign Secretary backing the concept in 2004 is widely credited as giving critical momentum to the movement by adding a major conventional arms exporter to it. Beginning in 2006, the treaty was negotiated in the U.N. General Assembly (UNGA) and specialized fora. A UNGA vote in early April 2013 approved the treaty in its negotiated form. ", "The ATT opened for signature on June 3, 2013, and entered into force on December 24, 2014. The United States participated in drafting the ATT and voted for it in the UNGA on April 2, 2013. The United States signed the ATT on September 25, 2013, but has not ratified it. Because the United States already has strong export control laws in place, the ATT would likely require no significant changes to policy, regulations, or law.", "The ATT regulates trade in conventional weapons between and among countries. It does not affect sales or trade in weapons among private citizens within a country. The treaty obligates states parties engaged in the international arms trade to establish national control systems to review, authorize, and document the import, export, brokerage, transit, and transshipment of conventional weapons, their parts, and ammunition. The treaty also requires that states parties report on their treaty-specified transfers to other nations on an annual basis to the Secretariat. The scope of the weapons covered by the treaty includes the following, though states parties may voluntarily include other conventional weapons as well:", "battle tanks, armored combat vehicles, large-caliber artillery systems, combat aircraft, attack helicopters, warships, missiles and missile launchers, and small arms and light weapons.", "The ATT also binds states parties to certain preexport review processes that take into account various criteria related to possible destabilizing effects on international security, terrorism, transnational crime, human rights, and other factors in determining whether or not a transfer should be approved. A state party is specifically prohibited from approving a transfer to another nation that violates a United Nations Security Council Resolution adopted under Chapter VII of the United Nations Charter, especially an arms embargo. Also explicitly prohibited is any transfer where a state party \"has knowledge\" when reviewing the proposed transfer that the treaty-specified arms, parts, or ammunition would be used in the \"commission of genocide, crimes against humanity, grave breaches of the Geneva Conventions of 1949, attacks directed against civilian objects or civilians protected as such, or other war crimes as defined by international agreements to which it is a party.\" Parties to the treaty are obligated to take measures to prevent the illegal diversion of covered arms and ammunition, to mitigate risks of diversion occurring by cooperating with each other and exchanging information, and to \"take appropriate measures\" if a diversion is detected. States parties are also encouraged to exchange relevant information about effectively addressing illicit diversion. Finally, the ATT encourages cooperation between states parties in the development of implementing legislation, institutional capacity building, and other pertinent areas.", "According to the treaty text, the ATT's Secretariat will have a \"minimized structure\" and shall ", "receive, make available and distribute the reports as mandated by this Treaty; maintain and make available to States Parties the list of national points of contact; facilitate the matching of offers of and requests for assistance for Treaty implementation and promote international cooperation as requested; facilitate the work of the Conference of States Parties, including making arrangements and providing the necessary services for meetings under this Treaty; and perform other duties as decided by the Conferences of States Parties."], "subsections": []}, {"section_title": "Controlling the Use of Antipersonnel Landmines", "paragraphs": ["Antipersonnel landmines (APL) are small, inexpensive weapons that kill or maim people upon contact. Abandoned, unmarked minefields can remain dangerous to both soldiers and civilians for an indefinite time. Mines were addressed in The Convention on Prohibitions or Restrictions on the Use of Certain Conventional Weapons Which May Be Deemed To Be Excessively Injurious or To Have Indiscriminate Effects , also known as the Convention on Conventional Weapons (CCW). Protocol II of this contains rules for marking, registering, and removing minefields. The CCW was concluded in 1980 and entered into force in 1993. The United States signed it in 1982 and the U.S. Senate gave its advice and consent to ratification on March 24, 1995."], "subsections": [{"section_title": "U.S. Initiatives", "paragraphs": ["In 1992, Congress established a one year moratorium on U.S. exports of APL ( P.L. 102-484 ) and subsequently extended it for 15 more years (see P.L. 107-115 ). H.R. 948 , introduced in the first session, 107 th Congress, sought to make the ban permanent but was not brought to a vote. Many nations have followed the U.S. example and imposed their own moratoria. In the FY1996 Foreign Operations Appropriations Act ( P.L. 104-107 ), Congress established a one-year ban on the use of APL by U.S. personnel to begin in 1999, but the 105 th Congress repealed the moratorium in the FY1999 Defense Authorization Act ( P.L. 105-261 ). ", "In 1996, President Clinton announced a policy that immediately discontinued U.S. use of \"dumb\" APL (except in the DMZ of Korea); supported negotiation of a worldwide ban on APL in the United Nations; and supported development of alternative technologies to perform landmine functions without endangering civilians and expanded mine detection and clearing technology efforts and assistance to mine-plagued countries. This initiative temporarily retained the possible use of \"smart\" mines that render themselves harmless after a certain period of time, either through self-destruction, self-neutralization, or self-deactivation. Clinton subsequently set a goal of 2003 to replace even smart mines everywhere except Korea, and of 2006 in Korea.", "In November 1996, the United States introduced a resolution to the U.N. General Assembly to pursue an international agreement that would ban use, stockpiling, production, and transfer of APL\u2014there were 84 cosponsors. Some countries, such as Canada, already abided by the intent of the proposed agreement and pushed for an early deadline to reach agreement. Others, however, were concerned that verifying such an agreement would be difficult, or that AP landmines still have a useful and legitimate role in their security planning. Landmine control, specifically a ban on exports, was briefly on the agenda of the Conference on Disarmament (CD) in Geneva for 1999. During 2000, however, that body could not agree on its program of work and the landmine issue was not addressed again.", "During 1997, the government of Canada and a number of nongovernmental organizations, such as the International Campaign to Ban Landmines, sponsored conferences to craft a treaty outside the CD process. Over 100 nations signed the Ottawa Treaty, formally titled the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-personnel Mines and on Their Destruction, which entered into force for its parties on March 1, 1999. The Clinton Administration participated in the Ottawa Process, but declined to sign the treaty after failing to gain certain temporary exceptions to treaty language. Specifically, the United States wanted to continue to use APL in the defense of South Korea until 2006 if necessary, and the ability to include smart APL (or \"devices\") within antitank landmine munitions. President Clinton suggested that the United States would sign the Ottawa Treaty in 2006 if effective alternatives to APL were available.", "The Ottawa Convention requires states parties to stop the production, use, and transfer of APL, as well as destroy all stockpiled APL, except for the \"minimum number absolutely necessary\" for training purposes, within four years. As of April 8, 2016, 162 countries had become states-parties to the treaty. Belarus, Greece, Turkey, and Ukraine all missed their stockpile destruction deadlines. Turkey completed destroying its APL in June 2011. Poland must also destroy APL stockpiles. States parties are also required to clear APL within 10 years of becoming party to the convention, but can request extensions of up to 10 years to complete this task. Thirty-one states-parties have not yet met their clearance obligations.", "The Convention does not include a verification body, but states parties may submit allegations of noncompliance, as well as requests for \"clarification\" from relevant governments, to the U.N. Secretary-General. A State-Party may also request that a special meeting of other treaty members address the compliance matters. States parties can initiate fact-finding missions and also request relevant governments to address compliance issues.", "In February 2004, the Bush Administration announced that, after 2010, the United States would not use any type of persistent landmines, whether antipersonnel or\u2014a new policy\u2014antivehicle. Self-destruct and self-deactivating landmines will be used and will meet or exceed specifications of the Amended Mines Protocol, CCW. It also indicated that alternatives to persistent landmines would be developed that incorporate enhanced technologies. This policy did not include a date to join the Ottawa Treaty. Richard Kidd, then-Director of the State Department's Office of Weapons Removal and Abatement, said in a November 21, 2007, speech that the United States would not sign the Ottawa Convention. If needed, U.S. forces will use nonpersistent mines. Various U.S. landmine systems were reportedly prepositioned in the Middle East in preparation for the 2003 war in Iraq, but were not used.", "The Obama Administration conducted a review of U.S. policy regarding landmines. On June 27, 2014, during the Third Review Conference of the Ottawa Convention, the United States announced that it \"will not produce or otherwise acquire any anti-personnel landmines in the future,\" including for the purpose of replacing expiring stockpiles. Moreover, the United States is \"conducting a high fidelity modeling and simulation effort to ascertain how to mitigate the risks associated with the loss\" of such mines. On September 23, 2014, the Obama Administration stated that the United States is aligning its \"APL policy outside the Korean Peninsula with the key requirements of the Ottawa Convention.\" Specifically, the United States will \"not use APL outside the Korean Peninsula; not assist, encourage, or induce anyone outside the Korean Peninsula to engage in activity prohibited by the Ottawa Convention; and undertake to destroy APL stockpiles not required for the defense of the Republic of Korea.\" Puneet Talwar, Assistant Secretary of State for the Bureau of Political-Military Affairs, stated on December 9, 2014, that the United States is \"pursuing solutions that would be compliant with the convention and that would ultimately allow us to accede to the convention while ensuring that we are still able to meet our alliance commitments\" to South Korea. Tina Kaidanow, Principal Deputy Assistant Secretary of State for Political-Military Affairs, stated during a December 13, 2017, press conference that \"[t]here is no current review\" of U.S. policy regarding landmines, adding that \"in most places we have hewn to those standards [of the Ottawa Convention], with an exception, for an example, in the Korean Peninsula, where we cannot make that commitment.\""], "subsections": []}]}, {"section_title": "Cluster Munitions89", "paragraphs": ["Cluster munitions are weapons that open in midair and dispense smaller submunitions\u2014anywhere from a few dozen to hundreds\u2014into an area. They can be delivered by aircraft or from ground systems such as artillery, rockets, and missiles. Cluster munitions are valued militarily because one munition can kill or destroy many targets within its impact area, and fewer weapons systems are needed to deliver fewer munitions to attack multiple targets. They also permit a smaller force to engage a larger adversary and are considered by some an \"economy of force\" weapon. On the other hand, critics note that cluster munitions disperse their large numbers of submunitions imprecisely over an extended area, that they frequently fail to detonate and are difficult to detect, and that the submunitions can remain explosive hazards for decades. They can also produce high civilian casualties if they are fired into areas where soldiers and civilians are intermixed or if inaccurate cluster munitions land in populated areas."], "subsections": [{"section_title": "Convention on Cluster Munitions (CCM)", "paragraphs": ["A number of CCW members, led by Norway, initiated negotiations in 2007 outside of the CCW to ban cluster munitions. On May 30, 2008, they reached an agreement to ban cluster munitions. The United States, Russia, China, Israel, Egypt, India, and Pakistan did not participate in the talks or sign the agreement. During the Signing Conference in Oslo on December 3-4, 2008, 94 states signed the convention and 4 of the signatories ratified the convention at the same time. China, Russia, and the United States abstained, but France, Germany, and the United Kingdom were among the 18 NATO members to sign the convention. The convention entered into force on August 1, 2010. The Convention on Cluster Munitions (CCM), inter alia, bans the use of cluster munitions, as well as their development, production, acquisition, transfer, and stockpiling. The convention does not prohibit cluster munitions that can detect and engage a single target or explosive submunitions equipped with an electronic self-destruction or self-deactivating feature \u2014an exemption that seemingly permits sensor-fuzed or \"smart\" cluster submunitions.", "Appendix A. List of Treaties and Agreements", "This appendix lists a wide range of arms control treaties and agreements. The date listed in each entry indicates the year in which the negotiations were completed. In some cases, entry into force occurred in a subsequent year.", "The Geneva Protocol, 1925: Bans the use of poison gas and bacteriological weapons in warfare.", "The Antarctic Treaty, 1959: Demilitarizes the Antarctic continent and provides for scientific cooperation on Antarctica.", "Memorandum of Understanding ... Regarding the Establishment of a Direct Communications Link (The Hot Line Agreement), 1963: Provides for a secure, reliable communications link between Washington and Moscow. Modified in 1971, 1984, and 1988 to improve the method of communications.", "Limited Test Ban Treaty, 1963: Bans nuclear weapons tests or any nuclear explosions in the atmosphere, outer space, and under water.", "Outer Space Treaty, 1967: Bans the orbiting or stationing on celestial bodies (including the moon) of nuclear weapons or other weapons of mass destruction.", "Treaty for the Prohibition of Nuclear Weapons in Latin America (Treaty of Tlatelolco), 1967: Obligates nations in Latin America not to acquire, possess, or store nuclear weapons on their territory.", "Treaty on the Non-Proliferation of Nuclear Weapons, 1968: Non-nuclear signatories agree not to acquire nuclear weapons; nuclear signatories agree to cooperate with non-nuclear signatories in peaceful uses of nuclear energy.", "Seabed Arms Control Treaty, 1971: Bans emplacement of military installations, including those capable of launching weapons, on the seabed.", "Agreement on Measures to Reduce the Risk of Outbreak of Nuclear War (Accident Measures Agreement), 1971: Outlines measures designed to reduce the risk that technical malfunction, human failure, misinterpreted incident, or unauthorized action could start a nuclear exchange.", "Biological Weapons Convention, 1972: Bans the development, production, stockpile, or acquisition of biological agents or toxins for warfare.", "Agreement ... on the Prevention of Incidents On and Over the High Seas, 1972: Establishes \"rules of the road\" to reduce the risk that accident, miscalculation, or failure of communication could escalate into a conflict at sea.", "Interim Agreement ... on Certain Measures with Respect to the Limitation of Strategic Offensive Arms (SALT I Interim Agreement), 1972: Limits numbers of some types of U.S. and Soviet strategic offensive nuclear weapons.", "Treaty ... on the Limitation of Anti-Ballistic Missile Systems (ABM Treaty), 1972: Limits United States and Soviet Union to two ABM sites each; limits the number of interceptor missiles and radars at each site to preclude nationwide defense. Modified in 1974 to permit one ABM site in each nation. U.S. withdrew in June 2002.", "Agreement ... on the Prevention of Nuclear War, 1973: United States and Soviet Union agreed to adopt an \"attitude of international cooperation\" to prevent the development of situations that might lead to nuclear war.", "Treaty ... on the Limitation of Underground Nuclear Weapons Tests (Threshold Test Ban Treaty), 1974: Prohibits nuclear weapons tests with yields of more than 150 kilotons. Ratified and entered into force in 1990.", "Treaty ... on Underground Nuclear Explosions for Peaceful Purposes (Peaceful Nuclear Explosions Treaty), 1976: Extends the limit of 150 kilotons to nuclear explosions occurring outside weapons test sites. Ratified and entered into force in 1990.", "Concluding Document of the Conference on Security and Cooperation in Europe (Helsinki Final Act), 1975: Outlines notifications and confidence-building measures with respect to military activities in Europe.", "Convention on the Prohibition of Military or any other Hostile Use of Environmental Modification Techniques, 1978: Bans the hostile use of environmental modification techniques that have lasting or widespread effects.", "Treaty ... on the Limitation of Strategic Offensive Arms (SALT II), 1979: Places quantitative and qualitative limits on some types of U.S. and Soviet strategic offensive nuclear weapons. Never ratified.", "The Convention on Prohibitions or Restrictions on the Use of Certain Conventional Weapons Which May Be Deemed To Be Excessively Injurious or To Have Indiscriminate Effects: This Convention, also known as the Convention on Conventional Weapons (CCW), was concluded in Geneva in 1980 and entered into force in 1993. Protocol II (Protocol on Prohibitions or Restrictions on the Use of Mines, Booby-traps and Other Devices) contains rules for marking, registering, and removing minefields, in an effort to reduce indiscriminate casualties caused by antipersonnel landmines. Protocol IV prohibits laser weapons designed to cause blindness.", "Document of the Stockholm Conference on Confidence- and Security-Building Measures and Disarmament in Europe (Stockholm Document), 1986: Expands on the notifications and confidence-building measures in the Helsinki Final Act. Provides for ground and aerial inspection of military activities.", "Treaty of Rarotonga, 1986: Establishes a Nuclear Weapons Free Zone in the South Pacific. The United States signed the Protocols in 1996; the Senate has not yet provided its advice and consent to ratification.", "Agreement ... on the Establishment of Nuclear Risk Reduction Centers, 1987: Establishes communications centers in Washington and Moscow and improves communications links between the two.", "Treaty ... on the Elimination of their Intermediate-Range and Shorter-Range Missiles, 1987: Bans all U.S. and Soviet ground-launched ballistic and cruise missiles with ranges between 300 and 3,400 miles. U.S. announced withdrawal on February 1, 2019.", "Agreement ... on Notifications of Launches of Intercontinental Ballistic Missiles and Submarine Launched Ballistic Missiles, 1988: Obligates United States and Soviet Union to provide at least 24 hours' notice before the launch of an ICBM or SLBM.", "Agreement on the Prevention of Dangerous Military Activities, 1989: Outlines cooperative procedures that are designed to prevent and resolve peacetime incidents between the armed forces of the United States and Soviet Union.", "U.S.-U.S.S.R. Chemical Weapons Destruction Agreement, 1990: Mandates the destruction of the bulk of the U.S. and Soviet chemical weapons stockpiles.", "Vienna Document of the Negotiations on Confidence- and Security-Building Measures, 1990: Expands on the measures in the 1986 Stockholm Document.", "Treaty on Conventional Armed Forces in Europe (CFE Treaty), 1990: Limits and reduces the numbers of certain types of conventional armaments deployed from the \"Atlantic to the Urals.\"", "Treaty ... on the Reduction and Limitation of Strategic Offensive Arms (START), 1991: Limits and reduces the numbers of strategic offensive nuclear weapons. Modified by the Lisbon Protocol of 1992 to provide for Belarus, Ukraine, Kazakhstan, and Russia to succeed to Soviet Union's obligations under the Treaty. Entered into force on December 5, 1994.", "Vienna Document of the Negotiations on Confidence- and Security-Building Measures, 1992: Expands on the measures in the 1990 Vienna Document.", "Treaty on Open Skies, 1992: Provides for overflights by unarmed observation aircraft to build confidence and increase transparency of military activities.", "Agreement ... Concerning the Safe and Secure Transportation, Storage, and Destruction of Weapons and Prevention of Weapons Proliferation, 1992: Provides for U.S. assistance to Russia for the safe and secure transportation, storage, and destruction of nuclear, chemical, and other weapons.", "Agreement Between the United States and Republic of Belarus Concerning Emergency Response and the Prevention of Proliferation of Weapons of Mass Destruction, 1992: Provides for U.S. assistance to Belarus in eliminating nuclear weapons and responding to nuclear emergencies in Belarus.", "Treaty ... on the Further Reduction and Limitation of Strategic Offensive Arms (START II) 1993: Would have further reduced the number of U.S. and Russian strategic offensive nuclear weapons. Would have banned the deployment of all land-based multiple-warhead missiles (MIRVed ICBMs), including the Soviet SS-18 \"heavy\" ICBM. Signed on January 3, 1993; U.S. Senate consented to ratification in January 1996; Russian Duma approved ratification in April 2000. Treaty never entered into force.", "Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on their Destruction: Bans chemical weapons and requires elimination of their production facilities. Opened for signature on January 13, 1993; entered into force in April 1997.", "Agreement ... Concerning the Disposition of Highly Enriched Uranium Resulting from the Dismantlement of Nuclear Weapons in Russia, 1993: Provides for U.S. purchase of highly enriched uranium removed from Russian nuclear weapons; uranium to be blended into low enriched uranium for fuel in commercial nuclear reactors. Signed and entered into force on February 18, 1993.", "Agreement Between the United States and Ukraine Concerning Assistance to Ukraine in the Elimination of Strategic Nuclear Arms, and the Prevention of Proliferation of Weapons of Mass Destruction: Provides for U.S. assistance to Ukraine to eliminate nuclear weapons and implement provisions of START I. Signed in late 1993, entered into force in 1994.", "Agreement Between the United States and Republic of Kazakhstan Concerning the Destruction of Silo Launchers of Intercontinental Ballistic Missiles, Emergency Response, and the Prevention of Proliferation of Weapons of Mass Destruction, 1993: Provides for U.S. assistance to Kazakhstan to eliminate nuclear weapons and implement provisions of START I.", "Trilateral Statement by the Presidents of the United States, Russia, and Ukraine, 1994: Statement in which Ukraine agreed to transfer all nuclear warheads on its territory to Russia in exchange for security assurances and financial compensation. Some compensation will be in the form of fuel for Ukraine's nuclear reactors. The United States will help finance the compensation by purchasing low enriched uranium derived from dismantled weapons from Russia.", "Treaty of Pelindaba, 1996: Establishes a nuclear weapons free zone in Africa. The United States has signed, but not yet ratified Protocols to the Treaty.", "Comprehensive Nuclear Test Ban Treaty (CTBT), 1996: Bans all nuclear explosions, for any purpose. The United States and more than 130 other nations had signed the Treaty by late 1996. The U.S. Senate voted against ratification in October, 1999.", "Ottawa Treaty, 1997: Convention for universal ban against the use of antipersonnel landmines, signed in 1997 and entered into force in 1999. The United States and other significant military powers are not signatories.", "Strategic Offensive Reductions Treaty (Moscow Treaty), 2002: Obligates the United States and Russia to reduce strategic nuclear forces to between 1,700 and 2,200 warheads. Does not define weapons to be reduced or provide monitoring and verification provisions. Reductions must be completed by December 31, 2012. Treaty lapsed upon entry into force of New START. Signed in May 2002, entered into force June 1, 2003.", "Treaty \u2026 On Measures for the Further Reduction and Limitation of Strategic Offensive Arms (New START), 2010: Obligates the United States and Russia to reduce strategic nuclear forces to 1,550 warheads on up to 700 deployed delivery vehicles, within a total of 800 deployed and nondeployed delivery vehicles. Reductions must occur within 7 years, treaty remains in force for 10 years. Signed on April 10, 2010, entered into force on February 5, 2011. ", "Treaty On the Prohibition of Nuclear Weapons , 2017: Obligates the parties to never \"develop, produce, manufacture, otherwise acquire, possess or stockpile nuclear weapons or other nuclear explosive devices.\" Parties agree not to host nuclear weapons that are owned or controlled by another state or to transfer, receive control over, or assist others in developing nuclear weapons. The United States has not signed this treaty and does not support its entry into force.", "Appendix B. The U.S. Treaty Ratification Process", "Article II, Section 2, Clause 2 of the U.S. Constitution establishes responsibilities for treaty ratification. It provides that the President \"shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur.\" Contrary to common perceptions, the Senate does not ratify treaties; it provides its advice and consent to ratification by passing a resolution of ratification. The President then \"ratifies\" a treaty by signing the instrument of ratification and either exchanging it with the other parties to the treaty or depositing it at a central repository (such as the United Nations).", "In Section 33 of the Arms Control and Disarmament Act (P.L. 87-297, as amended), Congress outlined the relationship between arms control agreements and the treaty ratification process. This law provides that \"no action shall be taken under this or any other law that will obligate the United States to disarm or to reduce or to limit the Armed Forces or armaments of the United States, except pursuant to the treaty-making power of the President under the Constitution or unless authorized by further affirmative legislation by the Congress of the United States.\"", "In practice, most U.S. arms control agreements have been submitted as treaties, a word reserved in U.S. usage for international agreements submitted to the Senate for its approval in accordance with Article II, Section 2 of the Constitution. The Senate clearly expects future arms control obligations would be made only pursuant to treaty in one of its declarations in the resolution of ratification of the START Treaty. The declaration stated: \"The Senate declares its intention to consider for approval international agreements that would obligate the United States to reduce or limit the Armed Forces or armaments of the United States in a militarily significant manner only pursuant to the treaty power set forth in Article II, Section 2, Clause 2 of the Constitution.\"", "Nonetheless, some arms control agreements have been made by other means. Several \"confidence building\" measures have been concluded as legally binding international agreements, called executive agreements in the United States, without approval by Congress. These include the Hot Line Agreement of June 20, 1963, the Agreement on Prevention of Nuclear War of June 22, 1973, and agreements concluded in the Standing Consultative Commission established by the Anti-ballistic Missile Treaty. In another category that might be called statutory or congressional-executive agreements, the SALT I Interim Agreement was approved by a joint resolution of Congress in 1972. In a third category, the executive branch has entered some arms control agreements that it did not submit to Congress on grounds that they were \"politically binding\" but not \"legally binding.\" Such agreements include several measures agreed to through the Conference on Security and Cooperation in Europe, such as the Stockholm Document on Confidence- and Security-Building Measures and Disarmament in Europe, signed September 19, 1986.", "Senate Consideration", "The conclusion or signing of a treaty is only the first step toward making the agreement legally binding on the parties. First, the parties decide whether to ratify, that is, express their consent to be bound by, the treaty that the negotiators have signed. Each party follows its own constitutional process to approve the treaty.", "In the United States, after a treaty has been signed, the President at a time of his choice submits to the Senate the treaty and any documents that are to be considered an integral part of the treaty and requests the Senate's advice and consent to ratification. The President's message is accompanied by a letter from the Secretary of State to the President which contains an analysis of the treaty. After submittal, the Senate may approve the agreement, approve it with various conditions, or not approve it.", "Senate consideration of a treaty is governed by Senate Rule XXX, which was amended in 1986 to simplify the procedure. The treaty is read a first time and the injunction of secrecy is removed by unanimous consent, although normally the text of a treaty has already been made public. The treaty is then referred to the Senate Committee on Foreign Relations under Senate Rule XXV on jurisdiction. After consideration, the committee reports the treaty to the Senate with a proposed resolution of ratification that may contain any of the conditions described below. If the committee objects to a treaty, or believes the treaty would not receive the necessary majority in the Senate, it usually simply does not report the treaty to the Senate and the treaty remains pending indefinitely on the committee calendar.", "After it is reported from the committee, a treaty is required to lie over for one calendar day before Senate consideration. The Senate considers the treaty after adoption of a nondebatable motion to go into executive session for that purpose. Rule XXX provides that the treaty then be read a second time, after which amendments to the treaty may be proposed. The majority leader typically asks unanimous consent that the treaty be considered to have passed through all the parliamentary stages up to and including the presentation of the resolution of ratification. After the resolution of ratification is presented, amendments to the treaty itself, which are rare, may not be proposed. The resolution of ratification is then \"open to amendment in the form of reservations, declarations, statements, or understandings.\" Decisions on amendments and conditions are made by a majority vote. Final approval of the resolution of ratification with any conditions that have been approved requires a two-thirds majority of those Senators present.", "After approving the treaty, the Senate returns it to the President with the resolution of ratification. If he accepts the conditions of the Senate, the President then ratifies the treaty by signing a document referred to as an instrument of ratification. Included in the instrument of ratification are any of the Senate conditions that State Department officials consider require tacit or explicit approval by the other party. The ratification is then complete at the national level and ready for exchange or deposit. The treaty enters into force in the case of a bilateral treaty upon exchange of instruments of ratification and in the case of a multilateral treaty with the deposit of the number of ratifications specified in the treaty. The President then signs a document called a proclamation which publicizes the treaty domestically as in force and the law of the land.", "If the President objects to any of the Senate conditions, or if the other party to a treaty objects to any of the conditions and further negotiations occur, the President may resubmit the treaty to the Senate for further consideration or simply not ratify it.", "Approval with Conditions", "The Senate may stipulate various conditions on its approval of a treaty. Major types of Senate conditions include amendments, reservations, understandings, and declarations or other statements or provisos. Sometimes the executive branch recommends the conditions, such as the December 16, 1974, reservation to the 1925 Geneva Protocol prohibiting the use of poison gas and the understandings on the protocols to the Treaty for the Prohibition of Nuclear Weapons in Latin America.", "An amendment to a treaty proposes a change to the language of the treaty itself, and Senate adoption of amendments to the text of a treaty is infrequent. A formal amendment to a treaty after it has entered into force is made through an additional treaty often called a protocol. An example is the ABM (Anti-Ballistic Missile) Protocol, signed July 3, 1974, which limited the United States and the Soviet Union to one ABM site each instead of two as in the original 1972 ABM Treaty. While the Senate did not formally attach amendments to the 1974 Threshold Test Ban and 1976 Peaceful Nuclear Explosion treaties, it was not until Protocols relating to verification were concluded in 1990 that the Senate approved these two Treaties.", "A reservation is a limitation or qualification that changes the obligations of one or more of the parties. A reservation must be communicated to the other parties and, in a bilateral treaty, explicitly agreed to by the other party. President Nixon requested a reservation to the Geneva Protocol on the use of poison gases stating that the protocol would cease to be binding on the United States in regard to an enemy state if that state or any of its allies failed to respect the prohibition. One of the conditions attached to the INF treaty might be considered a reservation although it was not called that. On the floor the sponsors referred to it as a Category III condition. The condition was that the President obtain Soviet consent that a U.S.-Soviet agreement concluded on May 12, 1988, be of the same effect as the provisions of the treaty.", "An understanding is an interpretation or elaboration ordinarily considered consistent with the treaty. In 1980, the Senate added five understandings to the agreement with the International Atomic Energy Agency (IAEA) for the Application of Safeguards in the United States. The understandings concerned implementation of the agreement within the United States. A condition added to the INF treaty resolution, requiring a presidential certification of a common understanding on ground-launched ballistic missiles, might be considered an understanding. The sponsor of the condition, Senator Robert Dole, said, \"this condition requires absolutely nothing more from the Soviets, but it does require something from our President.\"", "A declaration states policy or positions related to the treaty but not necessarily affecting its provisions. Frequently, like some of the understandings mentioned above, declarations and other statements concern internal procedures of the United States rather than international obligations and are intended to assure that Congress or the Senate participate in subsequent policy. The resolution of ratification of the Threshold Test Ban Treaty adopted in 1990 made approval subject to declarations (1) that to preserve a viable deterrent a series of specified safeguards should be an ingredient in decisions on national security programs and the allocation of resources, and (2) the United States shared a special responsibility with the Soviet Union to continue talks seeking a verifiable comprehensive test ban. In a somewhat different step, in 1963 the Senate attached a preamble to the resolution of ratification of the limited nuclear test ban treaty. The preamble contained three \"Whereas\" clauses of which the core one stated that amendments to treaties are subject to the constitutional process.", "The important distinction among the various conditions concerns their content or effect. Whatever designation the Senate applies to a condition, if the President determines that it may alter an international obligation under the treaty, he transmits it to the other party or parties and further negotiations or abandonment of the treaty may result.", "During its consideration of the SALT II Treaty, the Senate Foreign Relations Committee grouped conditions into three categories to clarify their intended legal effect; (I) those that need not be formally communicated to or agreed to by the Soviet Union, (II) those that would be formally communicated to the Soviet Union, but not necessarily agreed to by them, and (III) those that would require the explicit agreement of the Soviet Union. In the resolution of ratification of the START Treaty, the Senate made explicit that some of the conditions were to be communicated to the other parties.", "The Senate approves most treaties without formally attaching conditions. Ten arms control treaties were adopted without conditions: the Antarctic, Outer Space, Nuclear Non-Proliferation, Seabed, ABM, Environmental Modification, and Peaceful Nuclear Explosions Treaties, the Biological Weapons and the Nuclear Materials Conventions, and the ABM Protocol. In some of these cases, however, the Senate Foreign Relations Committee included significant understandings in its report.", "Even when it does not place formal conditions in the resolution of ratification, the Senate may make its views known or establish requirements on the executive branch in the report of the Foreign Relations Committee or through other vehicles. Such statements become part of the legislative history but are not formally transmitted to other parties. In considering the Limited Nuclear Test Ban Treaty in 1963, the Senate turned down a reservation that \"the treaty does not inhibit the use of nuclear weapons in armed conflict,\" but Senate leaders insisted upon a written assurance on this issue, among others, from President Kennedy. In reporting the Nuclear Non-Proliferation Treaty, the committee stated that its support of the Treaty was not to be construed as approving security assurances given to the non-nuclear-weapon parties by a U.N. Security Council resolution and declarations by the United States, the Soviet Union, and the United Kingdom. The security assurances resolution and declarations were, the committee reported, \"solely executive measures.\"", "Appendix C. Arms Control Organizations"], "subsections": []}]}]}]}]}}
{"id": "RS22640", "title": "What\u2019s the Difference?\u2014Comparing U.S. and Chinese Trade Data", "released_date": "2019-03-20T00:00:00", "summary": ["The size of the U.S. bilateral trade deficit with China has been and continues to be an important issue in bilateral trade relations. President Trump and some Members of Congress view the deficit as a sign of unfair economic policies in China. The Trump Administration has reportedly asked China to develop a plan to reduce the bilateral trade deficit by $100 billion. In the 116th Congress, the Fair Trade with China Enforcement Act (H.R. 704 and S. 2) and the United States Reciprocal Trade Act (H.R. 764) mention U.S. trade deficits as a reason for the proposed legislation.", "There is a large and growing difference between the official trade statistics released by the United States and the People's Republic of China. According to the United States, the 2018 bilateral merchandise trade deficit with China was $419.2 billion. According to China, its trade surplus with the United States was $323.3 billion\u2014a $95.9 billion difference.", "This report examines the differences in the trade data from the two nations in two ways. First, it compares the trade figures using the Harmonized Commodity Description and Coding System (Harmonized System) to discern any patterns in the discrepancies between the U.S. and Chinese data. This comparison reveals that more than 94% of the difference in the value of China's exports to the United States in 2018 was attributable to five types of goods. Those five types of goods, in order of the size of the discrepancy, were electrical machinery, machinery, toys and sporting goods, optical and medical equipment, and footwear.", "The second approach to examining the differing trade data involves a review of the existing literature on the technical and non-technical sources of the trade data discrepancies. The literature reveals that the leading sources of the discrepancies are differences in the list value of shipments when they leave China and when they enter the United States, and differing attributions of origin and destination of Chinese exports that are transshipped through a third location (such as Hong Kong) before arriving in the United States.", "In light of the differences in the official bilateral merchandise trade data, the U.S.-China Joint Commission on Commerce and Trade (JCCT) established a statistical working group in 2004. The working group has released two reconciliation studies (in 2009 and 2012) to identify the causes of the statistical discrepancies. The Working Group stated that the adjustments contained in the two studies are not meant to imply errors in the official statistics of either country.", "This report is updated annually, after the release of official trade data by China and the United States."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The U.S. merchandise trade deficit with the People's Republic of China (China) remains a major source of bilateral tension. Some Members of Congress and other U.S. government officials often point to the bilateral trade imbalance as evidence that China is not competing fairly in the global market. In March 2018, the Trump Administration reportedly asked China to develop a plan to reduce the bilateral trade deficit by $100 billion. ", "On March 31, 2017, President Trump issued Executive Order 13786, which states:", "Within 90 days of the date of this order, the Secretary of Commerce and the United States Trade Representative (USTR), in consultation with the Secretaries of State, the Treasury, Defense, Agriculture, and Homeland Security, and the heads of any other executive departments or agencies with relevant expertise, as determined by the Secretary of Commerce and the USTR, shall prepare and submit to the President an Omnibus Report on Significant Trade Deficits (Report).", "President Trump also issued Executive Order 13796, \"Addressing Trade Agreement Violations and Abuses,\" on April 29, 2017, which, among other things, requires the Secretary of Commerce and the USTR to \"conduct comprehensive performance reviews\" of \"all trade relations with countries governed by the rules of the World Trade Organization with which the United States does not have free trade agreements but with which the United States runs significant trade deficits in goods.\" China is one such country. ", "Despite the priority the Trump Administration has placed on reducing bilateral trade deficits in general, and with China in particular, according to official U.S. trade statistics, the overall U.S. merchandise trade deficit and the bilateral deficit with China increased in 2017 and 2018. The overall deficit rose from $736.6 billion in 2016 to $795.7 billion in 2017, and $878.7 billion in 2018. The bilateral deficit with China accounted for 47.1%, 47.2%, and 47.7% of the total merchandise trade deficit for the last three years, respectively. ", "Debate over this trade deficit is hampered by disagreement between the two countries on how large the deficit actually is. According to official U.S. figures, China has surpassed Canada as the largest supplier of U.S. imports, running up a bilateral merchandise trade surplus in 2018 of $419.2 billion. However, according to official Chinese figures, China's trade surplus with the United States in 2018 was $323.9 billion\u2014$95.9 billion less than the U.S. figure (see Table 1 ).", "The U.S. trade deficit with China plays a role, directly and indirectly, in proposed legislation addressing bilateral trade relations. The Fair Trade with China Enforcement Act ( H.R. 704 and S. 2 ), for example, refers to \"a severely imbalanced trading relationship\" with China, and would impose restrictions on Chinese investment in the United States \"due to its negative effect on the United States trade deficit and wages of workers in the United States.\" The United States Reciprocal Trade Act ( H.R. 764 ) finds, \"The lack of reciprocity in tariff levels and nontariff barriers contributes to the large and growing United States trade deficit in goods, which is a drag on economic growth and undermines economic prosperity.\" The act would authorize the President to negotiate an agreement with a country that has higher tariff or nontariff barriers than the United States, or impose additional duties on that country's exports to the United States. "], "subsections": []}, {"section_title": "Comparison of U.S. and Chinese Merchandise Trade Data", "paragraphs": [" Table 1 lists the official trade statistics from the United States and China for the years 2001 to 2018, using official trade data. From the U.S. perspective, its bilateral trade deficit with China more than quintupled in value over the last 18 years, from just over $83 billion in 2001 to over $419 billion in 2018. However, from the Chinese view, its bilateral trade surplus with the United States increased more than 11-fold, from about $28 billion in 2001 to more than $323 billion in 2018.", " Table 1 reveals that most of the discrepancy between the trade data from the two nations stems from significantly different figures for China's exports to the United States. The difference between the U.S. and Chinese figures for U.S. exports to China was generally less than $10 billion until 2011, but the discrepancy has been rising in recent years. China's figures for its exports to the United States differed from U.S. figures by $48.3 billion in 2001 and $61.1 billion in 2018. "], "subsections": []}, {"section_title": "Delving into the Data: Examining HS Code", "paragraphs": ["The most widely used international system for classifying traded goods is the Harmonized Commodity Description and Coding System, commonly referred to as the Harmonized System or simply HS Code. Every product traded is classified into a 10-digit code. The first two digits of the product's code correspond to one of the 98 HS \"chapters,\" that classify all goods in general categories. The U.S. International Trade Commission maintains the U.S. version of the HS Code, officially called the \"Harmonized Tariff Schedule of the United States,\" or HTS. Since both the United States and China use the same HS chapters, it is possible to compare the trade data at this level.", " Table 2 lists in rank order the top five HS chapters where the value of U.S. imports from China exceeds the value of Chinese exports to the United States for 2018. The top five HS chapters\u2014footwear (64), machinery (84), electrical machinery (85), optical and medical instruments (90), and toys and sporting goods (95)\u2014account for more than 94% of the difference between the U.S. and Chinese figures for U.S. imports from China (or Chinese exports to the United States).", "All five of these chapters also ranked high according to both countries in terms of their absolute value of trade. Machinery (84), electrical machinery (85), and toys and sporting goods (95) were among the top five ranked chapters in terms of the value of imports from China, according to the United States, and accounted for 54.7% of the total value of imports in 2018. The same three chapters were among the top five sources of exports to the United States, according to China, and accounted for 50.5% of the total value of exports in 2018. ", "In addition, China's export value for four chapters exceeded U.S. import value by more than $1 billion (in order): Railway equipment (86) - $2.856 billion; knit apparel (61) - $2.840 billion; woven apparel (62) - $1.618 billion; and non-railway vehicles (87) - $1.130 billion. ", "On the other side of the trade equation, there were 10 chapters where China's imports exceeded U.S. exports by more than $1 billion: miscellaneous grains (12); mineral fuel (27); pharmaceutical products (30); miscellaneous chemical products (38); plastic (39); precious stones and metals (71); machinery (84); electrical machinery (85); non-railway vehicles (87); and optical and medical equipment (90). In one chapter\u2014railway equipment (86)\u2014U.S. exports exceeded Chinese imports by more than $1 billion. ", "On both sides of the trade balance equation, two of the greatest differences in the official trade statistics of the two nations occurred in the same HS chapters\u2014machinery (84) and electrical machinery (85). The discrepancies between the official trade statistics for these two types of goods have been consistently large for flows in both directions since 2001, indicating a systemic difference in the evaluation of the bilateral trade of these goods."], "subsections": []}, {"section_title": "Explaining the Differences: Literature Summary", "paragraphs": ["The question as to why China's official statistics (on trade flows) are routinely much lower in value than the official U.S. trade statistics has been and continues to be the subject of analysis by scholars, government officials, and other interested parties. Nor is the issue unique to the United States; Canada also reports bilateral trade statistics that differ significantly from China's reported figures, and has investigated the reasons for those differences. ", "The following is a short review of some of the key explanations provided in this literature, categorized into \"technical\" and \"non-technical\" explanations. \"Technical\" explanations refer to procedural or administrative causes for the discrepancies; \"non-technical\" explanations include causes arising from non-procedural or non-administrative sources."], "subsections": [{"section_title": "Technical Explanations", "paragraphs": [], "subsections": [{"section_title": "Official Definitions of Exports and Imports", "paragraphs": ["In its official statistics, China evaluates exports using the more commonly used \"free on board\" (F.O.B.) terms, and evaluates imports using \"cost, insurance, and freight\" (C.I.F.) terms. The use of F.O.B. for exports and C.I.F. for imports is a common, but not universal, international practice. The United States, however, reports its exports using \"free alongside\" (F.A.S.) terms and values imports using a customs definition. As a result, official U.S. trade data place a lower value on both U.S. exports to China and imports from China than the official Chinese data. In addition, direct comparisons of the official U.S. and Chinese trade balances reported in the media are potentially misleading, because the goods trades are being evaluated using different methods. For more accurate direct comparisons, the trade data for both nations should be evaluated using the same terms. "], "subsections": []}, {"section_title": "Definition of Territory", "paragraphs": ["The United States includes Puerto Rico and the U.S. Virgin Islands in its trade data; China does not. China treats Puerto Rico and the U.S. Virgin Islands as separate customs territories. According to most studies, this is a comparatively minor source of difference in the trade figures."], "subsections": []}, {"section_title": "Timing", "paragraphs": ["Because of the distance between China and the United States, it takes time between the export of the goods from China and their import in the United States. Goods in transit at the end of the year are counted as exports by China, but not as imports by the United States. However, the lag between shipments occurs at the beginning and the end of the year, thus minimizing the effect of timing on the overall trade balance difference."], "subsections": []}, {"section_title": "Declaration of Country of Origin", "paragraphs": ["The current practice of U.S. Customs is to rely on the declaration of the importer to determine the country of origin. Some analysts believe that importers are misidentifying a significant amount of imports as Chinese."], "subsections": []}, {"section_title": "Exchange Rates", "paragraphs": ["Because China's currency, the renminbi (RMB), is allowed to fluctuate within a small range, the exchange rate between the renminbi and the U.S. dollar changes over time. The value of a shipment may change between the date it leaves China and the date it arrives in the United States due to changes in the exchange rate. Although the renminbi has appreciated against the U.S. dollar over the last decade, exchange rate changes are generally not considered a major factor in the discrepancy in the trade figures."], "subsections": []}]}, {"section_title": "Non-Technical Explanations", "paragraphs": [], "subsections": [{"section_title": "Value Differences in Direct Trade", "paragraphs": ["According to two joint China-U.S. studies (see \" Joint China-U.S. Studies of Discrepancies \" below), about half of the merchandise trade discrepancy between U.S. imports from China and Chinese exports to the United States\u2014or eastbound trade\u2014is attributable to changes in the values of the export price in China and the import value in the United States for goods shipped directly between the two countries. Part of the difference may be caused by mid-shipment transfers in ownership resulting in the new owner adding a markup in the price. Another possible explanation is intentional under-invoicing of exports (see below)."], "subsections": []}, {"section_title": "Under-Invoicing", "paragraphs": ["Some analysts believe that Chinese importers may intentionally under-value imports from the United States to lower the import tariff due on the shipment. In addition, some analysts believe that Chinese exporters may intentionally under-value exports to the United States to maximize their net proceeds overseas for various tax and regulatory reasons. More recently, bilateral trade figures may have been distorted by \"phantom goods\" shipments from China to the United States (and other locations) used to disguise attempts to move financial capital offshore. Due to the \"hidden nature\" of under-invoicing, it is difficult to assess how much, if at all, this may be contributing to the differences in the trade data."], "subsections": []}, {"section_title": "Intermediation", "paragraphs": ["Although estimates vary, many analysts agree that a large portion of China's exports arrive in the United States via a third party, Hong Kong being the most commonly identified location. The intermediation of shipments raises two sources of discrepancies. First, the exporter from China may not know that the goods eventually will be shipped to the United States, and may therefore list the third party (e.g., Hong Kong) as its destination, but U.S. Customs may list the source of shipment as being China, based on U.S. laws and regulations. Second, the value of the shipment may change\u2014with or without any actual change in the goods\u2014between its arrival in and departure from the third location. The joint China-U.S. study of discrepancies in merchandise trade statistics determined that value differences account for about half of the differences between Chinese and U.S. trade statistics. "], "subsections": []}]}]}, {"section_title": "Joint China-U.S. Studies of Discrepancies", "paragraphs": ["In April 2004, the 15 th JCCT established a statistical working group, with representatives of China's Ministry of Commerce and General Administration of Customs, and the U.S. Department of Commerce and Office of the USTR. The initial focus of the working group was to examine the \"unusually large and growing statistical discrepancies in the bilateral merchandise trade data officially published by [the] two countries.\" The Working Group subsequently decided to conduct a reconciliation study to determine the causes of the discrepancies. However, the Working Group stated that the results of the study were not intended to imply errors in either nation's statistical systems and/or methods of calculating official merchandise trade data. ", "Under the auspices of the U.S.-China Joint Commission on Commerce and Trade (JCCT), China's Ministry of Commerce and the U.S. Department of Commerce and Office of the U.S. Trade Representative (USTR) have conducted two studies to determine the causes of the statistical discrepancies in the official merchandise trade data reported by both nations. The first report was released in October 2009; the second in December 2012.", "The main conclusions of the two studies are largely the same. The greatest discrepancy is in the \"eastbound trade\" data, which accounts for 80%-90% of the overall difference in annual trade balance. Roughly half of the \"eastbound trade\" data discrepancy can be attributed to goods that \"leave China, enter the commerce of intermediate countries or regions, and then [are] re-exported to the United States.\" "], "subsections": []}, {"section_title": "Implications for Congress", "paragraphs": ["The release of the official U.S. annual trade figures has been frequently followed by expressions of concern about the size of U.S. bilateral trade deficit with China. According to official U.S. trade figures, the bilateral trade deficit with China in 2017 was more than five times the size of the next largest bilateral trade deficit (Mexico, $71.1 billion) and greater than the sum of the next eight largest bilateral trade deficits. ", "China has not accepted the \"accuracy\" of the official U.S. figure for the Sino-U.S. trade balance for at least two decades. A 1997 White Paper issued by China's State Council, \"On Sino-US Trade Balance,\" states, \"Statistics and analyses prove it true that Sino-US trade has been in favour of China in recent years, but it is obvious that the size of the US deficit has been largely exaggerated by the US side.\" In 2007, China's Foreign Ministry spokeswoman, Jiang Yu, said, \"imbalances in China-U.S. trade are an objective fact, but this is also related to the two sides' different statistical methods.\" ", "Also, when considering means or actions designed to reduce the U.S. trade deficit with China, it is useful to know which goods are the main sources of discrepancies between Chinese and U.S. trade figures, and how important they are in the overall trade flow between the two nations, so that \"trade remedies\" may be better targeted at the perceived problem. According to this report, the main problems appear to be in the trade figures for electrical machinery, machinery, and toys and sporting goods.", "For those causes of the differences resulting from data compilation\u2014such as misidentification of value or country of origin of imports\u2014Congress may choose through oversight or other means to encourage the responsible U.S. agency to examine and adjust its procedures for compiling trade data. In addition, Congress may decide to press or otherwise encourage China's customs services to conduct a similar review of its trade compilation procedures. In other cases, more detailed analysis of the trade data may be helpful in persuading China to amend or alter its laws, regulations, and policies pertaining to the import or export of goods to the United States."], "subsections": []}, {"section_title": "Selected Bibliography on the Differences Between U.S. and Chinese Bilateral Trade Figures", "paragraphs": ["\"Accounting for Discrepancies in Bilateral Trade: The Case of China, Hong Kong, and the United States,\" by Michael J. Ferrantino and Zhi Wang, China Economic Review , vol. 19 (2008), pp.\u00a0502-520. ", "Adjusted Estimates of United States-China Bilateral Trade Balances\u2014An Update . K.C. Fung, Lawrence J. Lau and Yangyan Xiong. June 2006. Stanford Center for International Development, Working Paper No. 278.", "Comparing Canada's and China's Bilateral Trade Data . China-Canada Joint Working Group on Trade Statistics Reconciliation. August 29, 2018. ", "Methodology of U.S.-China-Hong Kong Triangular Merchandise Trade Statistic Reconciliation . Alexander Hammer, Lin Jones, and Zhi Wang. August 2013. Office of Economics Research Note, U.S. International Trade Commission, No. RN-2013-08A.", "Report on the Statistical Discrepancy of Merchandise Trade Between the United States and China, Report by the Joint Commission on Commerce and Trade Statistical Working Group, October 2009. ", "The Second Phase Report on the Statistical Discrepancy of Merchandise Trade between the United States and China , Report by the Joint Commission on Commerce and Trade Statistical Working Group, December 2012. ", "Statistical Differences in Sino-US Trade Balance . February 12, 2007. China Online. http://chinaculture.about.com/library/china/whitepaper/blstrade2.htm .", "The U.S.-China Bilateral Trade Balance: Its Size and Determinants . Robert C. Feenstra, Wen Hai, Wing T. Woo, and Shunli Yao. May 1998. Paper presented at the UNDP-HIID Conference on China's Integration in the Global Economy, January 17, 1998.", "The U.S.-China Trade Imbalance: How Big Is It Really? Sarah Y. Tong. March 2005. China: An International Journal. Volume 3, No. 1, pp. 131-154."], "subsections": []}]}}
{"id": "R40985", "title": "Small Business: Access to Capital and Job Creation", "released_date": "2019-02-01T00:00:00", "summary": ["The U.S. Small Business Administration (SBA) administers several programs to support small businesses, including loan guaranty and venture capital programs to enhance small business access to capital; contracting programs to increase small business opportunities in federal contracting; direct loan programs for businesses, homeowners, and renters to assist their recovery from natural disasters; and small business management and technical assistance training programs to assist business formation and expansion. Congressional interest in these programs has increased in recent years, primarily because assisting small business is viewed as a means to enhance economic growth.", "Some have argued that the SBA should be provided additional resources to assist small businesses in acquiring capital necessary to start, continue, or expand operations and create jobs. Others worry about the long-term adverse economic effects of spending programs that increase the federal deficit. They advocate business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to assist small business economic growth and job creation.", "Over the past several Congresses, several laws were enacted to assist small businesses, including", "P.L. 111-5, the American Recovery and Reinvestment Act of 2009 (ARRA), provided the SBA an additional $730 million, including $375 million to temporarily subsidize SBA fees and increase the 7(a) loan guaranty program's maximum loan guaranty percentage to 90%. P.L. 111-240, the Small Business Jobs Act of 2010, authorized numerous changes to the SBA's loan guaranty and contracting programs; provided $510 million to continue the SBA's fee subsidies and 90% maximum loan guaranty percentage through December 31, 2010; and provided about $12 billion in tax relief for small businesses. P.L. 111-322, the Continuing Appropriations and Surface Transportation Extensions Act, 2011, continued the SBA's fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage through March 4, 2011, or until available funding was exhausted, which occurred on January 3, 2011. P.L. 112-106, the Jumpstart Our Business Startups Act, established a regulatory structure for startups and small businesses to raise capital through securities offerings using the Internet through crowdfunding. P.L. 113-76, the Consolidated Appropriations Act, 2014, increased the annual authorization amount for the SBA's Small Business Investment Company (SBIC) venture capital program to $4 billion from $3 billion. P.L. 114-38, the Veterans Entrepreneurship Act of 2015, authorized and made permanent the SBA's practice of waiving the SBAExpress loan program's one-time, up-front loan guaranty fee for veterans and increased the 7(a) loan program's FY2015 authorization limit from $18.75 billion to $23.5 billion. P.L. 114-113, the Consolidated Appropriations Act, 2016, expanded the projects eligible for refinancing under the 504/CDC loan guaranty program in any fiscal year in which the refinancing program and the 504/CDC program as a whole do not have credit subsidy costs, increased the SBIC program's family of funds limit (the amount of outstanding leverage allowed for two or more SBIC licenses under common control) to $350 million from $225 million, and increased the 7(a) loan program's authorization limit to $26.5 billion for FY2016. P.L. 115-31, the Consolidated Appropriations Act, 2017, increased the 7(a) program's authorization limit to $27.5 billion for FY2017. P.L. 115-141, the Consolidated Appropriations Act, 2018, increased the 7(a) program's authorization limit to $29.0 billion for FY2018.", "This report addresses a core issue facing the 116th Congress: What, if any, additional action should the federal government take to enhance small business access to capital? It discusses the role of small business in job creation and retention, then provides an assessment of the supply and demand for small business loans and recently enacted laws designed to enhance small business access to capital by increasing either the supply of small business loans or the demand for small business loans, or both. It also examines recent actions concerning the SBA's budget and concludes with a brief overview of three legislative options available to address small business access to capital issues during the 116th Congress: wait-and-see, enact additional programs, or reduce and consolidate existing programs."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Small Business Access to Capital", "paragraphs": ["The Small Business Administration (SBA) administers several programs to support small businesses, including venture capital programs to provide \"long-term loans and equity capital to small businesses, especially those with potential for substantial job growth and economic impact\" and loan guaranty programs to encourage lenders to provide loans to small businesses \"that might not otherwise obtain financing on reasonable terms and conditions.\" Historically, one of the justifications presented for funding the SBA's access to capital programs has been that small businesses can be at a disadvantage, compared with other businesses, when trying to obtain sufficient capital and credit. As an economist explained", "Growing firms need resources, but many small firms may have a hard time obtaining loans because they are young and have little credit history. Lenders may also be reluctant to lend to small firms with innovative products because it might be difficult to collect enough reliable information to correctly estimate the risk for such products. If it's true that the lending process leaves worthy projects unfunded, some suggest that it would be good to fix this \"market failure\" with government programs aimed at improving small businesses' access to credit.", "Congressional interest in the SBA's access to capital programs has increased in recent years, primarily because assisting small business in accessing capital is viewed as a means to enhance job creation and economic growth.", "Some have argued that the SBA should be provided additional resources to assist small businesses in acquiring capital necessary to start, continue, or expand operations and create jobs. Others worry about the long-term adverse economic effects of spending programs that increase the federal deficit. They advocate business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to assist small business economic growth and job creation.", "Economists generally do not view job creation as a justification for providing federal assistance to small businesses. They argue that in the long term such assistance will likely reallocate jobs within the economy, not increase them. In their view, jobs arise primarily from the size of the labor force, which depends largely on population, demographics, and factors that affect the choice of home versus market production (e.g., the entry of women in the workforce). However, economic theory does suggest that increased federal spending may result in additional jobs in the short term. For example, the SBA reported in September 2010 that the $730 million in additional funding provided to the agency by P.L. 111-5 , the American Recovery and Reinvestment Act of 2009 (ARRA), created or retained 785,955 jobs.", "As will be discussed, the tightening of private-sector lending standards and the disruption of credit markets in 2008 and 2009 led to increased concern in Congress that small businesses might be prevented from accessing sufficient capital to start, continue, or expand their operations\u2014actions that were expected to lead to higher levels of employment. As the SBA indicated in its FY2010 congressional budget justification report", "Over the last decade, small businesses across this country have been responsible for the majority of new private sector jobs, leaving little doubt that they are a vital engine for the nation's economic growth. However, with the United States facing the most severe economic crisis in more than 70 years, small businesses are confronted with a frozen lending market and limited access to the capital they need to survive and grow at this critical time.", "Since then credit markets have improved and lending standards have moderated, but congressional concern about the economy and disagreements concerning the best means to enhance job creation and economic growth remain. ", "During the 111 th Congress, several laws were enacted to enhance small business access to capital. For example", "P.L. 111-5 , provided the SBA an additional $730 million, including $375 million to temporarily subsidize SBA fees and increase the 7(a) loan guaranty program's maximum loan guaranty percentage from 85% on loans of $150,000 or less and 75% on loans exceeding $150,000 to 90% for all regular 7(a) loans. P.L. 111-240 , the Small Business Jobs Act of 2010, authorized the Secretary of the Treasury to establish a $30 billion Small Business Lending Fund (SBLF) ($4.0 billion was issued) to encourage community banks with less than $10 billion in assets to increase their lending to small businesses; $1.5 billion State Small Business Credit Initiative to provide funding to participating states with small business capital access programs; numerous changes to the SBA's loan guaranty and contracting programs; funding to continue the fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage through December 31, 2010; and about $12 billion in tax relief for small businesses (see Table A-1 in the Appendix for a list of its key provisions). P.L. 111-322 , the Continuing Appropriations and Surface Transportation Extensions Act, 2011, authorized the SBA to continue its fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage through March 4, 2011, or until available funding was exhausted, which occurred on January 3, 2011. ", "According to the SBA, the temporary fee subsidies and 90% maximum loan guaranty for the 7(a) program \"engineered a significant turnaround in SBA lending.... The end result is that the agency helped put more than $42 billion in the hands of small businesses through the Recovery Act and Jobs Act combined.\"", "During the 112 th Congress, several bills were introduced to enhance small business access to capital through the SBA, including bills to extend the SBA's temporary fee subsidies and increase the 7(a) program's loan guaranty percentage to 90%. Congress did not adopt these legislative efforts. Instead, Congress passed legislation designed to enhance small business contracting opportunities, expand access to the SBA's surety bond guarantee program, amend the SBA's size standard practices, require a review and reassessment of the federal procurement small business goaling program, and expand small business mentor-prot\u00e9g\u00e9 programs. Congress also adopted the Jumpstart Our Business Startups Act ( P.L. 112-106 ) that established a regulatory structure for startups and small businesses to raise capital through securities offerings using the Internet through crowdfunding (discussed later).", "During the 113 th Congress, P.L. 113-76 , the Consolidated Appropriations Act, 2014, increased the SBA's Small Business Investment Company (SBIC) venture capital program's authorization amount to $4 billion from $3 billion as a means to provide small businesses additional access to venture capital. ", "During the 114 th Congress", "P.L. 114-38 , the Veterans Entrepreneurship Act of 2015, authorized and made permanent the SBA's waiving of the SBAExpress loan program's one-time, up-front loan guaranty fee for veterans (and their spouse). The act also increased the 7(a) loan program's FY2015 authorization limit from $18.75 billion to $23.5 billion; and P.L. 114-113 , the Consolidated Appropriations Act, 2016, expanded the projects eligible for refinancing under the 504/CDC loan guaranty program in any fiscal year in which the refinancing program and the 504/CDC program as a whole do not have credit subsidy costs; generally limited refinancing under this provision to no more than 50% of the dollars loaned under the 504/CDC program during the previous fiscal year; and increased the SBIC program's family of funds limit (the amount of outstanding leverage allowed for two or more SBIC licenses under common control) to $350 million from $225 million. The act also increased the 7(a) loan program's authorization limit to $26.5 billion for FY2016.", "During the 115 th Congress", "P.L. 115-31 , the Consolidated Appropriations Act, 2017, increased the 7(a) program's authorization limit to $27.5 billion for FY2017 and P.L. 115-141 , the Consolidated Appropriations Act, 2018, increased the 7(a) program's authorization limit to $29.0 billion for FY2018.", "This report addresses a core issue facing the 116 th Congress: What, if any, additional action should the federal government take to enhance small business access to capital? It discusses the role of small business in job creation and retention, provides an assessment of the supply and demand for small business loans, and discusses recently enacted laws designed to enhance small business access to capital by increasing the supply of small business loans, the demand for small business loans, or both. It also examines recent actions concerning the SBA's budget and concludes with a brief overview of three legislative options available to address small business access to capital issues during the 116 th Congress: wait-and-see, enact additional programs, or reduce and consolidate existing programs."], "subsections": []}, {"section_title": "Two Indicators of the Supply and Demand for Private-Sector Small Business Loans", "paragraphs": [], "subsections": [{"section_title": "Federal Reserve Board: Surveys of Senior Loan Officers", "paragraphs": ["Each quarter, the Federal Reserve Board surveys senior loan officers concerning their bank's lending practices. The survey includes a question concerning their bank's credit standards for small business loans: \"Over the past three months, how have your bank's credit standards for approving applications for C&I [commercial and industrial] loans or credit lines\u2014other than those to be used to finance mergers and acquisitions\u2014for small firms (annual sales of less than $50 million) changed?\" The senior loan officers are asked to indicate if their bank's credit standards have \"Tightened considerably,\" \"Tightened somewhat,\" \"Remained basically unchanged,\" \"Eased somewhat,\" or \"Eased considerably.\" Subtracting the percentage of respondents reporting \"Eased somewhat\" and \"Eased considerably\" from the percentage of respondents reporting \"Tightened considerably\" and \"Tightened somewhat\" provides an indication of the market's supply of small business loans.", "As shown in Figure 1 , senior loan officers reported that they generally tightened small business loan credit standards from 2007 through late 2009. Since 2009, small business credit markets have generally improved, with some tightening in 2016. ", "The survey also includes a question concerning the demand for small business loans: \"Apart from normal seasonal variation, how has demand for C&I loans changed over the past three months for small firms (annual sales of less than $50 million)?\" Senior loan officers are asked to indicate if demand was \"Substantially stronger,\" \"Moderately stronger,\" \"About the same,\" \"Moderately weaker,\" or \"Substantially weaker.\" Subtracting the percentage of respondents reporting \"Moderately weaker\" and \"Substantially weaker\" from the percentage of respondents reporting \"Substantially stronger\" and \"Moderately stronger\" provides an indication of the market's demand for small business loans.", "As shown in Figure 1 , senior loan officers reported that the demand for small business loans declined somewhat in 2007 and 2008 and declined significantly in 2009. Demand then leveled off (at a relatively reduced level) during 2010, increased somewhat during the first half of 2011, declined somewhat during the latter half of 2011, generally increased in 2012 through 2015, and has varied somewhat\u2014increasing in some quarters and declining in others\u2014since then."], "subsections": []}, {"section_title": "FDIC Call Reports: Outstanding Small Business Loans", "paragraphs": ["The Federal Deposit Insurance Corporation (FDIC) reports bank lending statistics on a quarterly basis drawn from the banks' Consolidated Reports of Condition and Income (Call Report). The FDIC has maintained comparable small business lending data for the second quarter (June 30) of each year since 2002. Figure 2 shows the amount of outstanding small business loans (defined by the FDIC as commercial and industrial loans of $1 million or less) for non-agricultural purposes as of June 30 of each year since 2006. As shown in Figure 2 , the amount of outstanding small business loans for non-agricultural purposes increased at a relatively steady pace from June 30, 2006, to June 30, 2008, declined over the next several years, and has increased since June 30, 2013.", "Although changes in small business outstanding debt are not necessarily a result of changes in the supply of small business loans, many, including the SBA, view a decline in small business outstanding debt as a signal that small businesses might be experiencing difficulty accessing sufficient capital to enable them to lead job growth."], "subsections": []}]}, {"section_title": "SBA Lending", "paragraphs": [" Table 1 shows selected financial statistics for the SBA from FY2005 to FY2018. It provides an overview of the extent of the SBA's various programs to enhance small business access to capital.", "The first column reports the total face value of non-disaster business loans that were disbursed by the SBA from FY2005 to FY2018. The second column indicates the number of non-disaster business loans approved by the SBA (after full cancellations) from FY2005 to FY2018. Each year, 7% to 10% of the loans approved by the SBA are subsequently canceled for a variety of reasons, typically by the borrower.", "The third column reports the contract value of bonds guaranteed under the SBA's surety bond guarantee program. A surety bond is a three-party instrument between a surety (someone who agrees to be responsible for the debt or obligation of another), a contractor, and a project owner. The agreement binds the contractor to comply with the contract's terms and conditions. If the contractor is unable to successfully perform the contract, the surety assumes the contractor's responsibilities and ensures that the project is completed. It is designed to reduce the risk of contracting with small businesses that may not have the credit history or prior experience of larger businesses. The SBA does not issue surety bonds. Instead, it provides and manages surety bond guarantees for qualified small and emerging businesses through its Surety Bond Guarantee (SBG) Program. The SBA reimburses a participating surety (within specified limits) for losses incurred due to a contractor's default on a bond.", "The fourth column shows the outstanding principal balance for the SBA's 7(a) secondary market guarantee program, which is discussed later in this report. The final column reports the SBA's outstanding principal balance of loans that have not been charged off as of the end of the fiscal year. It provides a measure of the SBA's scope of lending.", "As shown in Table 1 , the amount of non-disaster small business loans disbursed by the SBA declined in FY2008 and FY2009; increased, but remained below pre-recession levels in FY2010; and has generally exceeded pre-recession levels since FY2011.", "The decline in the amount of small business loans guaranteed by the SBA during FY2008 and FY2009 was, at least in part, due to the following three interrelated factors:", "many lending institutions become increasingly reluctant to lend to small businesses, even with an SBA loan guarantee, as loan defaults increased due to the recession, earnings fell, and an increasing number of lending institutions failed; the secondary market for small business loans, as with other secondary markets, began to contract in October 2008, reached its nadir in January 2009, and then began a relatively prolonged recovery. The SBA estimates that about half of the lenders that make SBA guaranteed loans resell them to obtain additional capital to make additional loans; and the demand for small business loans declined as many small business owners (and entrepreneurs considering starting a new small business) became more risk adverse during the recession.", "In 2009, the number and amount of small business loans guaranteed by the SBA declined sharply early in the year, followed by modest increases during the second and third quarters, and briefly surpassed pre-recession levels in the fourth quarter as small business owners took advantage of ARRA funded fee subsidies for the SBA's 7(a) and 504/CDC loan guaranty programs and an increase in the 7(a) program's maximum loan guaranty percentage to 90%, which were expected to end by the end of the year.", "The SBA argued that the increase in the number and amount of small business loans it guaranteed during FY2010 was primarily due to fee subsidies and loan enhancements first put in place under ARRA and later extended by law to cover most of the fiscal year. The SBA noted that its average weekly loan volume for FY2010 ($333 million) was 29% higher than its average weekly loan volume for FY2009 ($258 million). Another likely factor contributing to the higher loan volume was a general improvement in the economy as the recession ended (officially in June 2009) and the economic recovery began, albeit slowly in many parts of the nation.", "The demand for SBA loans increased significantly during the first quarter of FY2011 (October-December 2010), as borrowers took advantage of SBA fee subsidies that were expected to expire at the end of the calendar year. The SBA announced, on January 3, 2011, that it \"approved nearly 22,000 small business loans for $10.47 billion, supporting a total of $12.16 billion in lending\" during the first quarter of FY2011, which \"was the highest volume in a fiscal year's first quarter than at any time in the agency's history.\" After the fee subsidies ended, SBA lending declined during the second quarter of FY2011, and then increased somewhat during the final two quarters of FY2011. As mentioned previously, the amount of non-disaster small business loans disbursed by the SBA has continued at or above pre-recession levels since FY2011. "], "subsections": []}, {"section_title": "Recent Laws Designed to Enhance the Supply of Small Business Loans", "paragraphs": ["As mentioned previously, several laws were enacted during the 110 th and 111 th Congresses to enhance small business access to capital. The following laws were enacted largely in response to the contraction of financial credit markets which started in 2008, and reached its nadir in early 2009.", "P.L. 110-343 , the Emergency Economic Stabilization Act of 2008, was designed to enhance the supply of loans to businesses of all sizes. The act authorized the Troubled Asset Relief Program (TARP) to \"restore liquidity and stability to the financial system of the United States\" by purchasing or insuring up to $700 billion in troubled assets from banks and other financial institutions. TARP's purchase authority was later reduced from $700 billion to $475 billion by P.L. 111-203 , the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Department of the Treasury has disbursed $389 billion in TARP funds, including $337 million to purchase SBA 7(a) loan guaranty program securities. The authority to make new TARP commitments expired on October 3, 2010.", "P.L. 111-5 (ARRA) included several provisions to enhance the supply of loans to small businesses. It", "authorized the SBA to establish a temporary secondary market guarantee authority to provide a federal guarantee for pools of first lien 504/CDC program loans that are to be sold to third-party investors. The SBA was granted emergency rulemaking authority to issue regulations for the program within 15 days after enactment (by March 4, 2009). After experiencing unanticipated delays in implementing the program due to \"limited staff resources\" and determining how to meet ARRA reporting requirements, the SBA issued regulations for its 504/CDC First Mortgage Loan Pooling program on October 30, 2009, and it became operational in June 2010. The program was scheduled to end on February 16, 2011, or until $3 billion in new pools are created, whichever occurred first. As will be discussed, the Small Business Jobs Act of 2010 extended the program. authorized the SBA to use emergency rulemaking authority to issue regulations within 30 days after enactment (by March 19, 2009), to make below market interest rate direct loans to SBA-designated \"Systemically Important Secondary Market (SISM) Broker-Dealers.\" These broker-dealers would use the loan funds to purchase SBA-guaranteed loans from commercial lenders, assemble them into pools, and sell them to investors in the secondary loan market. The SBA experienced unanticipated delays in implementing the program primarily due to the need to determine \"the extent to which broker-dealers, and perhaps small business lenders, would be required to share in the potential losses associated with extending the guarantee in the 504 loan program.\" The SBA issued regulations to establish the Direct Loan Program for Systemically Important Secondary Market Broker-Dealers on November 19, 2009. provided $255 million for a temporary, two-year small business stabilization program to guarantee loans of $35,000 or less to small businesses for qualified debt consolidation, later named the America's Recovery Capital (ARC) Loan program (the program ceased issuing new loan guarantees on September 30, 2010); $15 million for the SBA's surety bond program, and temporarily increased the maximum bond amount from $2 million to $5 million, and up to $10 million under certain conditions (the higher maximum bond amounts ended on September 30, 2010); $6 million for the SBA's Microloan program's lending program and $24 million for the Microloan program's technical assistance program; and increased the funds (\"leverage\") available to SBA-licensed Small Business Investment Companies (SBICs) to no more than 300% of the company's private capital or $150,000,000, whichever is less. authorized the SBA to guarantee 504/CDC loans used to refinance business expansion projects as long as the existing indebtedness did not exceed 50% of the project cost of the expansion and the borrower met specified requirements.", "P.L. 111-240 was enacted after the financial credit markets had stabilized. It included several provisions designed to enhance the supply of loans to small businesses. For example, the act ", "authorized the Secretary of the Treasury to establish a $30 billion Small Business Lending Fund (SBLF) to encourage community banks to provide small business loans ($4 billion was issued) and a $1.5 billion State Small Business Credit Initiative (SSBCI) to provide funding to participating states with small business capital access programs. extended the SBA's secondary market guarantee authority from two years after the date of ARRA's enactment to two years after the date of the program's first sale of a pool of first lien position 504/CDC loans to a third-party investor (which took place on September 24, 2010). authorized $22.5 million for a temporary, three-year Small Business Intermediary Lending Pilot Program to provide direct loans to intermediaries which provide loans to small business startups, newly established small businesses, and growing small businesses. On August 4, 2011, the SBA announced the first 20 community lenders which were selected to participate in the program. authorized $15 million in additional funding for the SBA's 7(a) loan guaranty program. increased the loan guarantee limits for the SBA's 7(a) program from $2 million to $5 million, and for the 504/CDC program from $1.5 million to $5 million for \"regular\" borrowers, from $2 million to $5 million if the loan proceeds are directed toward one or more specified public policy goals, and from $4 million to $5.5 million for manufacturers. increased the SBA's Microloan program's loan limit for borrowers from $35,000 to $50,000 and for microlender intermediaries after their first year in the program from $3.5 million to $5 million. temporarily increased for one year the SBA 7(a) Express Program's loan limit from $350,000 to $1 million (the temporary increase expired on September 26, 2011). required the SBA to establish an on-line lending platform listing all SBA lenders and information concerning their loan rates. authorized the SBA to temporarily guarantee for two years, under specified circumstances, 504/CDC loans that refinance existing business debt even if the project does not involve the expansion of the business.", "For additional details concerning provisions in the Small Business Jobs Act of 2010, see Table A-1 in the Appendix .", "During the 112 th Congress, P.L. 112-106 , the Jumpstart Our Business Startups Act (JOBS Act), established \"a regulatory structure for startups and small businesses to raise capital through securities offerings using the Internet through crowdfunding.\" The JOBS Act's crowdfunding provisions \"were intended to help provide startups and small businesses with capital by making relatively low dollar offerings of securities, featuring relatively low dollar investments by the 'crowd,' less costly.\" ", "On November 16, 2015, the Securities and Exchange Commission (SEC) published a final rule, effective May 16, 2016, to implement the JOBS Act's crowdfunding provisions (e.g., the SEC established limits on the amount of money an issuer can raise and individual investors can invest over a 12-month period under the crowdfunding exemption to the securities laws, imposed disclosure requirements on the issuer's business and securities offering, and created a regulatory framework for the broker-dealers and funding portals that facilitate the crowdfunding transactions).", "During the 113 th Congress, P.L. 113-76 , the Consolidated Appropriations Act, 2014, included a provision increasing the annual authorization amount for the SBA's Small Business Investment Company (SBIC) program to $4 billion from $3 billion. The SBIC program provides privately owned and managed SBA-licensed SBICs loans at favorable rates (called leverage), and, in exchange, the SBICs provide equity capital to small businesses in various ways, including by purchasing small business equity securities (e.g., stock, stock options, warrants), making loans to small businesses, purchasing debt securities from small businesses, and providing small businesses, subject to limitations, a guarantee of their monetary obligations to creditors not associated with the SBIC. The SBIC program is designed to stimulate and supplement \"the flow of private equity capital and long term loan funds which small business concerns need for the sound financing of their business operations and for their growth, expansion, and modernization, and which are not available in adequate supply.\" ", "In FY2013, the SBA committed to guarantee $2.15 billion in SBIC small business investments, and SBICs invested another $1.34 billion from private capital, for almost $3.5 billion in financing for 1,068 small businesses. Although the SBA's commitment of $2.15 billion in SBIC leverage in FY2013 was well below the new $4 billion threshold amount, advocates of the higher threshold argued that the increase would enable the program to grow, providing more capital to a larger number of small businesses in the future. Subsequently, the SBA committed to guarantee $2.55 billion in SBIC small business investments in FY2014, $2.55 billion in FY2015, $2.51 billion in FY2016, $1.96 billion in FY2017, and $2.52 billion in FY2018.", "During the 114 th Congress, P.L. 114-38 , the Veterans Entrepreneurship Act of 2015, increased the supply of 7(a) loans by increasing the program's FY2015 authorization limit of $18.75 billion (on disbursements) to $23.5 billion. The increased authorization amount was necessary to accommodate an unexpected increase in the demand for SBA loans. In addition, P.L. 114-113 , the Consolidated Appropriations Act, 2016, further increased the 7(a) program's authorization limit to $26.5 billion for FY2016. The act also increased the supply of 504/CDC loans by expanding the projects eligible for refinancing under the program in any fiscal year in which the refinancing program and the 504/CDC program as a whole do not have credit subsidy costs. The act generally limited the expanded refinancing to no more than 50% of the dollars loaned under the 504/CDC program during the previous fiscal year. The act also increased the supply of SBIC financings by increasing the SBIC program's family of funds limit (the amount of outstanding leverage allowed for two or more SBIC licenses under common control) to $350 million from $225 million.", "During the 115 th Congress, P.L. 115-31 , the Consolidated Appropriations Act, 2017, increased the 7(a) program's authorization limit to $27.5 billion for FY2017 from $26.5 billion in FY2016 and P.L. 115-141 , the Consolidated Appropriations Act, 2018, increased the 7(a) program's authorization limit to $29.0 billion for FY2018."], "subsections": []}, {"section_title": "Recent Laws Designed to Enhance the Demand for Small Business Loans", "paragraphs": ["ARRA provided the SBA $375 million to subsidize fees for the SBA's 7(a) and 504/CDC loan guaranty programs and to increase the 7(a) program's maximum loan guaranty percentage from up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000 to 90% for all regular 7(a) loans through September 30, 2010, or when appropriated funding for the subsidies and loan modification was exhausted. The fee subsidies were designed to increase the demand for SBA loans by reducing loan costs.", "ARRA's funding for the fee subsidies and 90% maximum loan guaranty percentage was about to be exhausted in November 2009, when Congress passed the first of six laws to extend the loan subsidies and 90% maximum loan guaranty percentage:", "P.L. 111-118 , the Department of Defense Appropriations Act, 2010, provided the SBA $125 million to continue the fee subsides and 90% maximum loan guaranty percentage through February 28, 2010. P.L. 111-144 , the Temporary Extension Act of 2010, provided the SBA $60 million to continue the fee subsides and 90% maximum loan guaranty percentage through March 28, 2010. P.L. 111-150 , an act to extend the Small Business Loan Guarantee Program, and for other purposes, provided the SBA authority to reprogram $40 million in previously appropriated funds to continue the fee subsides and 90% maximum loan guaranty percentage through April 30, 2010. P.L. 111-157 , the Continuing Extension Act of 2010, provided the SBA $80 million to continue the SBA's fee subsides and 90% maximum loan guaranty percentage through May 31, 2010. P.L. 111-240 , the Small Business Jobs Act of 2010, provided $505 million (plus an additional $5 million for administrative expenses) to continue the SBA's fee subsides and 90% maximum loan guaranty percentage from the act's date of enactment (September 27, 2010) through December 31, 2010. P.L. 111-322 , the Continuing Appropriations and Surface Transportation Extensions Act, 2011, authorizes the SBA to use funds provided under the Small Business Jobs Act of 2010 to continue the SBA's fee subsides and 90% maximum loan guaranty percentage through March 4, 2011, or until available funding is exhausted.", "On January 3, 2011, the SBA announced that funding for the fee subsidies and 90% maximum loan guaranty percentage had been exhausted. ", "ARRA also included 11 tax relief provisions that have the potential to benefit small businesses in a broad range of industries. By reducing costs, it could be argued that providing tax relief for small businesses may lead to increased demand for small business loans because small business owners have additional resources available to invest in their business. The following five ARRA tax provisions provided about $5.7 billion in tax relief and were targeted at small businesses, whereas the other ARRA tax provisions were available to businesses of all sizes:", "allowed businesses with $15 million or less in average annual gross receipts in the past three years to carry back net operating losses from 2008 for up to five years instead of two years. extended through 2009 the enhanced expensing allowance, which allows businesses to deduct up to $250,000 of the cost of eligible assets placed in service in 2009, within certain limits. increased the exclusion of the gain on the sale of small business stock to 75% (instead of 50%) of any gain realized on the sale of eligible small business stock acquired between February 18, 2009, and December 31, 2010. reduced the recognition period from 10 years to seven years for corporate tax on sale of appreciated assets in 2009 or 2010 by S corporations that once were organized as C corporations. allowed individuals who had an adjusted gross income in 2008 of less than $500,000 and can prove that over half their income came from a small business to base their estimated tax payments for 2009 on 90% of their tax liability for 2008.", "P.L. 111-240 was designed to increase the demand for SBA loans by providing $505 million (plus an additional $5 million for related administrative expenses) to temporarily subsidize SBA's fees and increase the 7(a) program's maximum loan guaranty percentage to 90%. The act also required the SBA to establish an alternative size standard for the SBA's 7(a) and 504/CDC loan guaranty programs that uses maximum net worth and average net income as an alternative to the use of industry standards. It also established the following interim alternative size standard for both the 7(a) and 504/CDC programs: the business qualifies as small if it does not have a tangible net worth in excess of $15 million and does not have an average net income after federal taxes (excluding any carry-over losses) in excess of $5 million for two full fiscal years before the date of application. These changes were designed to increase the demand for small business loans by increasing the number of small businesses that are eligible for SBA assistance.", "P.L. 111-240 also provided small businesses with about $12 billion in tax relief. The act", "raised the exclusion of gains on the sale or exchange of qualified small business stock from the federal income tax to 100%, with the full exclusion applying only to stock acquired the day after the date of enactment through the end of 2010; increased the deduction for qualified start-up expenditures from $5,000 to $10,000 in 2010, and raised the phaseout threshold from $50,000 to $60,000 for 2010; placed limitations on the penalty for failure to disclose reportable transactions based on resulting tax benefits; allowed general business credits of eligible small businesses for 2010 to be carried back five years; exempted general business credits of eligible small businesses in 2010 from the alternative minimum tax; allowed a temporary reduction in the recognition period for built-in gains tax; increased expensing limitations for 2010 and 2011 and allowed certain real property to be treated as Section 179 property; allowed additional first-year depreciation for 50% of the basis of certain qualified property; and removed cellular telephones and similar telecommunications equipment from listed property so their cost can be deducted or depreciated like other business property.", "As mentioned earlier, P.L. 114-38 authorized and made permanent the Obama Administration's waiver of the up-front, one-time loan guaranty fee for veteran loans under the SBAExpress loan guaranty program beginning on or after October 1, 2015, except during any upcoming fiscal year for which the President's budget, submitted to Congress, includes a credit subsidy cost for the 7(a) program, in its entirety, that is above zero. The fee waiver is designed to encourage veterans to apply for a small business loan."], "subsections": []}, {"section_title": "Discussion", "paragraphs": ["As mentioned previously, congressional interest in the SBA's access to capital programs has increased in recent years, primarily because assisting small business in accessing capital is viewed as a means to enhance job creation and economic growth. Some have argued that the SBA should be provided additional resources to assist small businesses in acquiring capital necessary to start, continue, or expand operations and create jobs. Others worry about the long-term adverse economic effects of spending programs that increase the federal deficit. They also point to surveys of small business firms conducted by the National Federation of Independent Business (NFIB) which suggest that small business owners consistently place financing issues near the bottom of their most pressing concerns. Instead of increasing federal funding for the SBA, they advocate small business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to assist small business and foster increased levels of economic growth and job creation.", "Some advocates of providing additional resources to the SBA have argued that the federal government should enhance small business access to capital by creating a SBA direct lending program for small businesses. During the 111 th Congress, H.R. 3854 , the Small Business Financing and Investment Act of 2009, was passed by the House on October 29, 2009, by a vote of 389-32. It would have authorized a temporary SBA direct lending program. Also, during the 112 th Congress, H.R. 3007 , the Give Credit to Main Street Act of 2011, introduced on September 21, 2011, and referred to the House Committee on Small Business, would have authorized the SBA to provide direct loans to small businesses that have been in operation as a small business for at least two years prior to its application for a direct loan. The maximum loan amount would have been the lesser of 10% of the firm's annual revenues or $500,000. Also, H.R. 5835 , the Veterans Access to Capital Act of 2012, introduced on May 18, 2012, and referred to the House Committee on Small Business, would have authorized the SBA to provide up to 20% of the annual amount available for guaranteed loans under the 7(a) and 504/CDC loan guaranty programs, respectively, in direct loans to veteran-owned and -controlled small businesses. ", "During the 113 th Congress, H.R. 2451 , the Strengthening Entrepreneurs' Economic Development Act of 2013, introduced on June 20, 2013, and referred to the House Committee on Small Business, would have authorized the SBA to establish a direct lending program for small businesses that have fewer than 20 employees. Under the bill, each loan would be limited to $150,000 and have a term of six years or less. Before issuing a direct loan, the SBA would be required to make the loan available to eligible lenders within 50 miles of the applicant's principal office. If no local lenders agree to originate, underwrite, close, and service the loan within five business days, the SBA would make the loan available to lenders in the Preferred Lender program. If still no lenders agree to originate, underwrite, close, and service the loan, the SBA shall, within 10 business days, consider the application for a direct loan. ", "The SBA has authority to make direct loans, both for disaster relief and for business purposes. The SBA limited the eligibility for direct business loans in 1984, 1994, and 1996 as a means to reduce costs. Until October 1, 1985, the SBA provided direct business loans to qualified small businesses. From October 1, 1985, to September 30, 1994, SBA direct business loan eligibility was limited to qualified small businesses owned by individuals with low income or located in an area of high unemployment, owned by Vietnam-era or disabled veterans, owned by the handicapped or certain organizations employing them, or certified under the minority small business capital ownership development program. Microloan program intermediaries were also eligible. On October 1, 1994, SBA direct loan eligibility was limited to Microloan program intermediaries and to small businesses owned by the handicapped. Funding to support direct loans to the handicapped through the Handicapped Assistance (renamed the Disabled Assistance) Loan program ended in 1996. The last loan issued under the Disabled Assistance Loan program took place in FY1998. The SBA currently offers direct business loans only to Microloan program intermediaries.", "Advocates for a small business direct lending program have argued that such a program would provide \"rapid access to much-needed capital without having to face the administrative delays posed by the current Small Business Administration lending process.\" Advocates of a temporary SBA direct lending program argued that such a program was necessary during periods of economic difficulty because", "In prosperous times, small businesses are able to shop around to different lenders to find the best available terms and conditions for a loan. But in times of economic downturns, those same lenders aren't as willing to lend to small businesses. More than ever during these times, it's the government's responsibility to step in to help small businesses access the loans they need to keep their businesses running and workers employed.", "Opponents of a small business direct lending program argue that the SBA's mission is to augment the private sector by guaranteeing loans, not compete with it by providing direct loans to small businesses. They also argue that these loans hold greater risk than most; otherwise the private sector would accept them. They worry that SBA defaults may increase, resulting in added expense, either to taxpayers in the form of additional appropriations or to other small business borrowers in the form of higher fees, to cover the defaults. They argue that the SBA stopped offering direct loans in 1995, primarily because the subsidy rate was \"10 to 15 times higher than that of our guaranty programs.\" They also assert that providing direct loans to small businesses might invite corruption. They note that the Reconstruction Finance Corporation (RFC), the SBA's predecessor, made direct loans to business and was accused of awarding loans based on the applicant's political connections or personal ties with RFC loan officers. Opponents also argue that the SBA does not have the human, physical, and technical resources to make direct loans.", "Still others argue that providing additional funding for SBA programs is largely a symbolic gesture because the SBA's guaranteed loan programs account for a relatively small fraction of small business lending. They argue that, in a typical year, no more than 1% of small businesses receive an SBA-guaranteed loan, and those loans account for less than 3% or 4% of the total amount loaned to small businesses. They assert that \"these numbers show that the private banking system finances most loans and that the SBA is therefore largely irrelevant in the capital market.\""], "subsections": []}, {"section_title": "SBA Funding", "paragraphs": ["As mentioned previously, some have argued that the SBA should be provided additional funding to assist small businesses in acquiring capital necessary to start, continue, or expand operations and create jobs. Others worry about the long-term adverse economic effects of spending programs that increase the federal deficit. They advocate fiscal restraint as the best means to assist small business and foster increased levels of economic growth and job creation. Both of these views have been reflected in recent SBA budget discussions as Congress has focused on ways to reduce the SBA's budget while not compromising the SBA's ability to assist small businesses access capital and assist individuals and businesses of all sizes cope with damages caused by natural disasters. ", "As shown in Table 2 , the SBA's appropriations have varied significantly since FY2005, ranging from a high of $2.360 billion in FY2018 to a low of $571.8 million in FY2007. Much of this volatility has resulted from significant increases in appropriations for disaster assistance in response to major hurricanes; increases in appropriations for business loan credit subsidies following recessions; and significant, temporary increases in appropriations for the SBA's other programs in FY2009 ($724.0 million) and FY2010 ($962.5 million) that were designed to enhance small businesses' access to capital following the Great Recession.", "The SBA's appropriations are separated into four categories in Table 2 (disaster assistance, disaster assistance supplemental, business loan credit subsidies, and other programs) because the need for disaster assistance is largely beyond congressional control and expenditures for business loan credit subsidies tend to vary with changes in the national economy. As a result, it could be argued that comparisons of SBA appropriations over time can be made more meaningful if those comparisons include appropriations for all four categories of spending. ", "For example, the SBA's appropriation of $2.360 billion in FY2018 was nearly double its appropriation of $1.337 billion in FY2017 and nearly three times its appropriation of $871.0 million in FY2016. However, most of this increase was due to increased supplemental funding for disaster assistance. ", "As shown in Table 2 , the SBA's FY2018 appropriation of $2.360 billion includes $1.659 billion in supplemental funding for disaster assistance, $3.4 million for business loan credit subsidies (for the Microloan program), and $697.4 million for all other SBA programs ($268.5 million for salaries and expenses; $247.1 million for entrepreneurial development programs, such as SCORE, Small Business Development Centers, and Women Business Centers; $152.8 million for administrative expenses related to the SBA's business loan programs; $19.9 million of the Office of Inspector General; and $9.1 million for the Office of Advocacy)."], "subsections": []}, {"section_title": "Concluding Observations", "paragraphs": ["Congress approved many changes during the 111 th Congress to enhance small business access to capital. For example, P.L. 111-240 authorized the Secretary of the Treasury to establish a $30 billion Small Business Lending Fund (SBLF) to make capital investments in eligible community banks ($4 billion was issued). It authorized a $1.5 billion State Small Business Credit Initiative Program to be administered by the Department of the Treasury. It made numerous changes to SBA programs in an attempt to make them more accessible to small businesses, such as increasing maximum loan amounts, creating an alternative size standard so more businesses can qualify for assistance, waiving some matching requirements, and temporarily expanding refinancing options under the 504/CDC program. It provided funding to extend SBA fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage, passed legislation to increase small business contracting opportunities, and provided about $12 billion in tax relief for small businesses. In addition, Congress approved legislation to temporarily reduce, for calendar years 2011 and 2012, payroll taxes by two percentage points for workers (including self-employed small business owners) who pay into Social Security. The NFIB has long advocated a reduction of federal payroll taxes as a means to reduce small business expenses. ", "During the 112 th Congress, Congress passed legislation to expand access to the SBA's surety bond guarantee program, amend the SBA's size standard practices, require a review of the federal procurement small business goaling program, expand small business mentor-prot\u00e9g\u00e9 programs, and establish a regulatory structure for startups and small businesses to raise capital through securities offerings using the Internet through crowdfunding.", "During the 113 th and 114 th Congresses, Congress approved legislation that increased the annual authorization amount for the SBA's SBIC program to $4 billion from $3 billion, authorized and made permanent the Obama Administration's waiver of the up-front, one-time loan guaranty fee for veteran loans under the SBAExpress loan guaranty program, expanded the projects eligible for refinancing under the 504/CDC loan guarantee program, and increased the SBIC program's family of funds limit (the amount of outstanding leverage allowed for two or more SBIC licenses under common control) to $350 million from $225 million.", "The question for the 116 th Congress is what, if any, additional action should the federal government take to enhance small business access to capital? Should Congress decide to take further action, three not necessarily mutually exclusive options are readily apparent.", "First, Congress could adopt a wait-and-see strategy that focuses on congressional oversight of the programmatic changes to the SBA's programs that were enacted during recent Congresses. Advocates of this approach could argue that small business credit markets have generally improved over the past several years, the SBA's lending now exceeds pre-recession levels, and the demand for small business loans is increasing. Therefore, it could be argued that evaluating the impact of the programmatic changes to the SBA's programs that have been enacted over the past several years, especially given that economic conditions appear to be improving, should take place before taking further congressional action to improve small business access to capital.", "Second, Congress could consider additional changes to the SBA's programs in an effort to enhance small business access to capital, such as considering a direct lending program, providing additional funding for SBA fee subsidies and loan modifications, modifying the Microloan program, or increasing funding for SBA programs. Advocates of this approach could argue that although small business credit markets have generally improved over the past several years, job growth is still a concern. In their view, assisting small businesses access capital would help to create and retain jobs.", "Third, Congress could consider the repeal of portions of the Small Business Jobs Act of 2010, or other SBA programs. For example, on March 15, 2011, the House Committee on Small Business approved its views and estimates for the concurrent resolution on the budget for FY2012. The committee recommended that the SBA's budget be \"cut nearly $100 million.\" The committee recommended that 14 programs, including several management and technical assistance training programs, be defunded \"because they duplicate existing programs at the SBA or at other agencies\" or \"where there is an absence of any evidence that they will help small businesses create new jobs.\" In its views and estimates letter for the FY2013 budget, the House Committee on Small Business recommended, on March 7, 2012, that funding be reduced for several SBA programs, including funding for 7(j) technical assistance, microloan technical assistance, and the National Women's Business Council. It also recommended that funding be eliminated for Women's Business Centers, Veterans Business Centers, Prime Technical Assistance, HUBZone outreach, the Office of Native American Affairs, and the Office of International Trade. It also recommended that funding be eliminated for several SBA initiatives, including the Drug-Free Workplace, Clusters, and National Veterans Entrepreneurial Training Program.", "Advocates of this option argue that instead of increasing federal funding for the SBA, the federal government should focus on small business tax reduction and federal fiscal restraint as the best means to assist small business and foster increased levels of economic growth and job creation."], "subsections": [{"section_title": "Appendix. Selected Provisions in the Small Business Jobs Act of 2010", "paragraphs": [], "subsections": []}]}]}}
{"id": "R44306", "title": "The H-2B Visa and the Statutory Cap: In Brief", "released_date": "2019-05-14T00:00:00", "summary": ["The Immigration and Nationality Act (INA) of 1952, as amended, enumerates categories of foreign nationals, known as nonimmigrants, who are admitted to the United States for a temporary period of time and a specific purpose. One of these nonimmigrant visa categories\u2014known as the H-2B visa\u2014is for temporary nonagricultural workers.", "The H-2B visa allows for the temporary admission of foreign workers to the United States to perform nonagricultural labor or services of a temporary nature if unemployed U.S. workers are not available. Common H-2B occupations include landscape laborer, housekeeper, and amusement park worker.", "The H-2B program is administered by the U.S. Department of Homeland Security's (DHS's) U.S. Citizenship and Immigration Services (USCIS) and the U.S. Department of Labor's (DOL's) Employment and Training Administration. DOL's Wage and Hour Division also has certain concurrent enforcement responsibilities. The H-2B program currently operates under regulations issued by DHS in 2008 on H-2B requirements, by DHS and DOL jointly in 2015 on H-2B employment, and by DHS and DOL jointly in 2015 on H-2B wages.", "Bringing workers into the United States under the H-2B program is a multiagency process involving DOL, DHS, and the Department of State (DOS). A prospective H-2B employer must apply to DOL for labor certification. Approval of a labor certification application reflects a finding by DOL that there are not sufficient U.S. workers who are qualified and available to perform the work and that the employment of foreign workers will not adversely affect the wages and working conditions of U.S. workers who are similarly employed.", "If granted labor certification, an employer can file a petition with DHS to bring in the approved number of H-2B workers. If the petition is approved, a foreign worker overseas who the employer wants to employ can go to a U.S. embassy or consulate to apply for an H-2B nonimmigrant visa from DOS. If the visa application is approved, the worker is issued a visa that he or she can use to apply for admission to the United States at a port of entry. H-2B workers can be accompanied by eligible spouses and children.", "By law, the H-2B visa is subject to an annual numerical cap. Under the INA, the total number of individuals who may be issued H-2B visas or otherwise provided with H-2B nonimmigrant status in any fiscal year may not exceed 66,000. USCIS is responsible for implementing the H-2B cap, which it does at the petition receipt stage. Spouses and children accompanying H-2B workers are not counted against the H-2B cap. In addition, certain categories of H-2B workers are exempt from the cap. Among these categories are current H-2B workers who are seeking an extension of stay, change of employer, or change in the terms of their employment.", "Employer demand for H-2B workers has varied over the years. In recent years, demand has exceeded supply, and special provisions have been enacted to make additional H-2B visas available. For FY2016, a temporary statutory provision exempted certain H-2B workers from the cap. It applied to H-2B workers who had been counted against the cap in any one of the three prior fiscal years and would be returning as H-2B workers in FY2016. For FY2017, FY2018, and FY2019, a different type of H-2B cap-related provision authorized DHS to issue additional H-2B visas (above the cap) subject to specified conditions."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["FY2019 is the fourth year in a row that Congress has enacted a special provision to allow for the issuance of H-2B visas beyond the annual statutory cap of 66,000 in response to high levels of demand for the visa. For FY2016, Congress exempted certain H-2B workers from the statutory cap. For the three past fiscal years, Congress has authorized the Department of Homeland Security (DHS) to make additional H-2B visas available subject to certain conditions. For FY2017 and FY2018, DHS used this authority to make an additional 15,000 H-2B visas available each year. For FY2019, DHS is making an additional 30,000 H-2B visas available. "], "subsections": []}, {"section_title": "H-2B Nonagricultural Worker Visa", "paragraphs": ["The Immigration and Nationality Act (INA) of 1952, as amended, enumerates categories of aliens, known as nonimmigrants, who are admitted to the United States for a temporary period of time and a specific purpose. Nonimmigrant visa categories are identified by letters and numbers, based on the sections of the INA that established them. Among the major nonimmigrant visa categories is the \"H\" category for temporary workers. Included in this category is the H-2B visa for temporary nonagricultural workers. ", "The H-2B program allows for the temporary admission of foreign workers to the United States to perform nonagricultural labor or services of a temporary nature if unemployed U.S. workers are not available. H-2B workers perform a wide variety of jobs. Top H-2B occupations in recent years have included landscape laborer, groundskeeper, forest worker, housekeeper, and amusement park worker. By regulation, participation in the H-2B program is limited to designated countries, and DHS publishes a list of eligible countries each year. ", "Bringing workers into the United States under the H-2B program is a multiagency process involving the U.S. Department of Labor (DOL), DHS, and the Department of State (DOS). The program itself is administered by DHS's U.S. Citizenship and Immigration Services (USCIS) and DOL's Employment and Training Administration (ETA). DOL's Wage and Hour Division (WHD) also has certain concurrent enforcement responsibilities. The H-2B program currently operates under regulations issued by DHS in 2008 on H-2B requirements, DHS and DOL jointly in 2015 on H-2B employment, and DHS and DOL jointly in 2015 on H-2B wages.", "For work to qualify as temporary under the H-2B visa, the employer's need for the duties to be performed by the worker must \"end in the near, definable future\" and must be a one-time occurrence, a seasonal need, a peak load need, or an intermittent need. The employer's need for workers generally must be for a period of one year or less, but in the case of a one-time occurrence, can be for up to three years.", "In order to bring H-2B workers into the United States, an employer must first receive labor certification from DOL. An interim final rule on H-2B employment that was issued jointly by DHS and DOL in April 2015 establishes a new registration requirement as a preliminary step in the labor certification process; once it is implemented, prospective H-2B employers would demonstrate their temporary need to DOL through this registration process before submitting a labor certification application. (As of the date of this report, however, DOL continues to make determinations about temporary need during the processing of labor certification applications.)", "At the same time that the employer submits the labor certification application to DOL, the employer must submit a job order to the state workforce agency (SWA) serving the area of intended employment. The job order is used to recruit U.S. workers. The employer also must conduct its own recruitment.", "In order to grant labor certification to an employer, DOL must determine that (1) there are not sufficient U.S. workers who are qualified and available to perform the work, and (2) the employment of foreign workers will not adversely affect the wages and working conditions of U.S. workers who are similarly employed. To prevent an adverse effect on U.S. workers, H-2B employers must offer and provide required wages and benefits to H-2B workers and workers in \"corresponding employment.\" H-2B employers must pay their workers the highest of the prevailing wage rate or the federal, state, or local minimum wage. They must provide a \"three-fourths guarantee\"; that is, they must guarantee to offer workers employment for at least three-fourths of the contract period. H-2B employers also must pay worker visa fees and certain worker transportation costs. H-2B employers are not required to provide health insurance coverage. ", "After receiving labor certification, a prospective H-2B employer can submit an application, known as a petition, to DHS to bring in foreign workers. If the foreign workers are already in the United States, the employer can request a change of status to H-2B status on the petition. In the typical case, however, the workers are abroad. If the petition is approved, they can visit a U.S. embassy or consulate to apply for H-2B nonimmigrant visas from DOS. If the visa applications are approved, the workers are issued visas that they can use to apply for admission to the United States at a port of entry. H-2B workers can be accompanied by eligible spouses and children, who are issued H-4 visas. ", "An alien's total period of stay as an H-2B worker may not exceed three consecutive years. An H-2B alien who has spent three years in the United States may not seek an extension of stay or be readmitted to the United States as an H-2B worker until he or she has been outside the country for at least three months.", "The INA grants enforcement authority with respect to the H-2B program to DHS, but allows for the delegation of that authority to DOL. DHS has delegated that authority to DOL, and now DOL's WHD has responsibility for enforcing compliance with the conditions of an H\u20102B petition and temporary labor certification."], "subsections": [{"section_title": "Seafood Industry Staggered Entry Provision", "paragraphs": ["As part of the labor certification process, prospective H-2B employers must accurately indicate the starting and ending dates of their period of need for H-2B workers. According to the supplementary information to the 2015 DHS-DOL interim final rule on H-2B employment: \"An application with an accurate date of need will be more likely to attract qualified U.S. workers to fill those open positions, especially when the employer conducts recruitment closer to the actual date of need.\" If within a season an employer has more than one date of need for workers to perform the same job, the employer must file a separate labor certification application for each date of need. The employer is not allowed to stagger the entry of H-2B workers based on one date of need. ", "There is an exception to this prohibition on the staggered entry of H-2B workers, however, that applies to employers in the seafood industry. First enacted as part of the Consolidated Appropriations Act, 2014, and subsequently incorporated into the 2015 DHS-DOL interim final rule on H-2B employment, this provision permits an employer with an approved H-2B petition to bring in the H-2B workers under that petition any time during the 120 days beginning on the employer's starting date of need. In order to bring in the workers between day 90 and day 120, though, the employer must conduct additional U.S. worker recruitment. This provision has been reenacted in DOL appropriations acts for each year from FY2015 through FY2019."], "subsections": []}]}, {"section_title": "Numerical Limitations", "paragraphs": ["The H-2B program is subject to an annual statutory numerical limit. Under the INA, as amended by the Immigration Act of 1990, the total number of aliens who may be issued H-2B visas or otherwise provided with H-2B nonimmigrant status in any fiscal year may not exceed 66,000. Also, since FY2006 there has been a cap of 33,000 on the number of aliens subject to H-2B numerical limits who may enter the United States on an H-2B visa or be granted H-2B status during the first six months of a fiscal year. This INA amendment, enacted as part of the REAL ID Act of 2005, effectively divided the annual H-2B cap of 66,000 into two semiannual caps of 33,000, respectively covering work in the first and second halves of the fiscal year.", "Certain categories of H-2B workers are exempt from the cap, including the following:", "current H-2B workers seeking an extension of stay, change of employer, or change in the terms of employment; H-2B workers previously counted toward the cap in the same fiscal year; fish roe processors, fish roe technicians, and/or supervisors of fish roe processing; and H-2B workers performing labor in the U.S. territories of the Commonwealth of the Northern Mariana Islands (CNMI) and/or Guam until December 31, 2029.", "As noted, spouses and children who are accompanying H-2B workers are issued H-4 visas and, as such, are not counted against the H-2B cap."], "subsections": [{"section_title": "Special H-2B Cap-Related Provisions", "paragraphs": ["Legislation has been regularly introduced in Congress concerning the H-2B cap. Several measures have been enacted since 2005 to provide for the issuance of H-2B visas, or the granting of H-2B status, beyond the statutory cap. The enacted provisions have been of two main types."], "subsections": [{"section_title": "Returning Worker Exemption", "paragraphs": ["The INA was amended during the 109 th Congress to add a provision establishing a temporary exemption from the H-2B statutory cap for certain H-2B returning workers. The provision, initially in effect for FY2005 and FY2006, exempted from the cap H-2B returning workers who had been counted against the cap in any one of the three prior fiscal years. This H-2B returning worker provision was subsequently extended for FY2007, and expired at the end of that fiscal year. An H-2B returning worker exemption of the same type was reinstated for FY2016. It provided that an H-2B returning worker who had been counted against the statutory cap in FY2013, FY2014, or FY2015 would not be counted again in FY2016. Multiple bills were introduced in the 115 th Congress to enact temporary or permanent H-2B returning worker exemptions from the statutory cap. At least one H-2B returning worker bill has been introduced in the 116 th Congress as of the date of this report."], "subsections": []}, {"section_title": "Provision Authorizing Additional H-2B Visas", "paragraphs": ["For FY2017 and FY2018, a different type of H-2B cap-related provision was enacted by the 115 th Congress. For each of these years, provisions in year-end omnibus appropriations laws authorized DHS to make additional H-2B visas available beyond the statutory cap after consultation with DOL and \"upon the determination that the needs of American businesses cannot be satisfied\" with available U.S. workers. Under these provisions, the number of additional aliens who could receive H-2B visas each year was limited to \"not more than the highest number of H\u20132B nonimmigrants who participated in the H\u20132B returning worker program in any fiscal year in which returning workers were exempt from such numerical limitation.\"", "The FY2019 Consolidated Appropriations Act includes a provision of the same type for FY2019. Using the same language as the FY2017 and FY2018 provisions, the FY2019 provision authorizes DHS, after consultation with DOL and \"upon the determination that the needs of American businesses cannot be satisfied\" with available U.S. workers, to make additional H-2B visas available for FY2019 up to a maximum of \"the highest number of H\u20132B nonimmigrants who participated in the H\u20132B returning worker program in any fiscal year in which returning workers were exempt from such numerical limitation.\" As discussed below, the DHS-DOL rule implementing this provision limits the additional visas to H-2B returning workers."], "subsections": [{"section_title": "FY2017 Provision", "paragraphs": ["In July 2017, DHS and DOL jointly published a final rule to implement the FY2017 provision. The rule temporarily amended DHS regulations on the H-2B visa to state that for FY2017, DHS \"has authorized up to an additional 15,000 aliens who may receive H\u20132B nonimmigrant visas.\" In the supplementary information to the rule, DHS explained that the statutory provision applied only to H-2B workers entering the United States on visas and not to aliens in the United States who were seeking a change of status to H-2B status.", "The statutory definition of the maximum authorized number (i.e., \"the highest number of H\u20132B nonimmigrants who participated in the H\u20132B returning worker program in any fiscal year\") can be interpreted in different ways, as DHS acknowledged in the supplementary information to the rule. However, the agency determined that 64,716 was the most appropriate maximum number of additional H-2B visas authorized under the special FY2017 provision, this being \"the number of beneficiaries covered by H\u20132B returning worker petitions that were approved for FY 2007.\" ", "The supplementary information to the rule included the following explanation for limiting the FY2017 numerical increase to 15,000:", "Most recently, in FY 2016, 18,090 returning workers were approved for H\u20132B petitions, despite Congress having reauthorized the returning worker program with more than three-quarters of the fiscal year remaining. Of those 18,090 workers authorized for admission, 13,382 were admitted into the United States or otherwise acquired H\u20132B status.... [T]he Secretary, in consideration of the statute's reference to returning workers, determined that it would be appropriate to use these recent figures as a basis for the maximum numerical limitation under section 543. This rule therefore authorizes up to 15,000 additional H\u20132B visas (rounded up from 13,382) for FY 2017.", "In addition, in implementing the statutory provision, DHS decided to limit eligibility for the additional H-2B workers to certain U.S. businesses. Under the FY2017 rule, the prospective H-2B employer must submit to DHS, along with the H-2B petition, a new attestation form ", "evidencing that without the ability to employ all of the H\u20132B workers requested on the petition ... its business is likely to suffer irreparable harm (that is, permanent and severe financial loss)."], "subsections": []}, {"section_title": "FY2018 Provision", "paragraphs": ["In May 2018, DHS and DOL jointly published a final rule to implement the FY2018 H-2B cap-related provision. The FY2018 rule, which is similar to the FY2017 rule, temporarily amended DHS H-2B regulations to state that for FY2018, DHS had authorized the issuance of up to 15,000 additional H\u20132B visas. In supplementary information to the FY2018 rule, DHS explained its decision to authorize up to 15,000 additional visas despite the fact that all 15,000 additional visas authorized in FY2017 were not used. ", "Out of a maximum of 15,000 supplemental H\u20132B visas for FY 2017, a total of 12,294 beneficiaries were approved for H\u20132B classification.... [T]he Secretary has determined that it is appropriate to authorize 15,000 additional visas again, as employers will have a longer period in which to submit their petitions due to the earlier publication date of this rule, thereby allowing for the possibility of more petitions being filed this fiscal year than in FY 2017.", "The FY2018 rule also included the same language as the FY2017 rule requiring an employer petitioning for supplemental visas to submit an attestation along with the H-2B petition evidencing that without the ability to employ all the requested H\u20132B workers the employer's business would likely suffer irreparable harm."], "subsections": []}, {"section_title": "FY2019 Provision", "paragraphs": ["In May 2019, DHS and DOL jointly published a final rule to implement the FY2019 provision. The FY2019 rule temporarily amends DHS H-2B regulations to state that for FY2019, DHS has authorized the issuance of up to 30,000 additional H\u20132B visas. As it did in the supplementary information to the FY2017 and FY2018 rules, DHS clarifies in the supplementary information to the FY2019 rule that the FY2019 provision only authorizes DHS to increase the number of H-2B visas; it does not cover individuals in the United States who change to H-2B status. As a result, DHS states that the supplemental cap is limited to workers who obtain visas abroad and then seek admission to the United States.", "The supplementary information to the FY2019 rule, consistent with the supplementary information to the FY2017 and FY2018 rules, indicates that the most appropriate maximum number of additional H-2B visas authorized under the statutory provision is 64,716. DHS explains its decision to allow 30,000 supplemental visas as follows:", "In setting the number of additional H\u20132B visas to be made available during FY 2019, DHS considered this number [i.e., 64,716], overall indications of increased need, and the time remaining in FY 2019, and determined that it would be appropriate to limit the supplemental cap to approximately half of the highest number for returning workers, or up to 30,000.", "Like its FY2017 and FY2018 predecessors, the FY2019 rule requires an employer petitioning for supplemental visas to submit an attestation along with the H-2B petition evidencing that without the ability to employ all the requested H\u20132B workers the employer's business would likely suffer irreparable harm.", "In addition, the FY2019 rule imposes a limitation not applicable under the FY2017 and FY2018 rules. Under the FY2019 rule, an employer may request supplemental visas only for H-2B workers \"who have been issued an H\u20132B visa or otherwise granted H\u20132B status in Fiscal Years 2016, 2017, or 2018.\" DHS offers the following rationale for limiting the additional visas to H-2B returning workers:", "Such workers (i.e., those who recently participated in the H\u20132B program) have previously obtained H\u2013 2B visas and therefore been vetted by DOS, would have departed the United States after their authorized period of stay as generally required by the terms of their nonimmigrant admission, and therefore may obtain their new visas through DOS and begin work more expeditiously.", "The supplementary information to the rule highlights the importance, in particular, of returning workers' proven \"willingness to return home after they have completed their temporary labor or services or their period of authorized stay.\" It states:", "The returning workers condition therefore provides a basis to believe that H\u20132B workers under this cap increase will likely return home again after another temporary stay in the United States. That same basis does not exist for non-returning workers, not all of whom have a track record of returning home. Although the returning worker requirement limits the flexibility of employers, the requirement provides an important safeguard, which DHS deems paramount."], "subsections": []}]}]}, {"section_title": "Implementation of H-2B Numerical Limits", "paragraphs": ["USCIS is responsible for implementing numerical limits on temporary worker visas (including the H-2B visa), which it does at the petition receipt stage. Under DHS regulations:", "When calculating the numerical limitations ... USCIS will make numbers available to petitions in the order in which the petitions are filed. USCIS will make projections of the number of petitions necessary to achieve the numerical limit of approvals, taking into account historical data related to approvals, denials, revocations, and other relevant factors. USCIS will monitor the number of petitions (including the number of beneficiaries requested when necessary) received and will notify the public of the date that USCIS has received the necessary number of petitions (the \"final receipt date\").... If the final receipt date is any of the first five business days on which petitions subject to the applicable numerical limit may be received (i.e., if the numerical limit is reached on any one of the first five business days that filings can be made), USCIS will randomly apply all of the numbers among the petitions received on any of those five business days.", "In one recent fiscal year, the final receipt date announced by USCIS ended up being too early. For FY2015, USCIS announced on April 2, 2015, that March 26, 2015, was the final receipt date for new H-2B petitions. The agency had accepted about 3,900 H-2B petitions for FY2015 through March 26, 2015, which it believed was sufficient to reach the annual 66,000 cap. In early June 2015, however, USCIS announced that it would reopen the H-2B cap for the second half of FY2015 and accept additional petitions for new H-2B workers. It offered the following public explanation:", "USCIS continues to work in collaboration with DOS to monitor the issuance of H-2B visas and has determined that as of June 5, 2015, DOS received fewer than the expected number of requests for H-2B visas. A recent analysis of DOS H-2B visa issuance and USCIS petition data reveals that the number of actual H-2B visas issued by DOS is substantially less than the number of H-2B beneficiaries seeking consular notification listed on cap-subject H-2B petitions approved by USCIS. In light of this new information, USCIS has determined that there are still available H-2B visa numbers remaining for the second half of the FY15 cap.", "Following a brief reopening, USCIS announced that June 11, 2015, was the final receipt date for new H-2B worker petitions for FY2015."], "subsections": [{"section_title": "FY2018", "paragraphs": ["Until FY2018, the final receipt date for H-2B petitions had never fallen within the first five days of filing and, thus, the random selection process (lottery) described in the regulatory provision in the preceding section had never been required. As described below, that changed with petition filings by employers seeking to hire H-2B workers for the second half of FY2018, which began on April 1, 2018. DOL was also impacted by the high level of employer demand for H-2B workers for the second half of FY2018 since an employer must receive labor certification from DOL before filing an H-2B petition."], "subsections": [{"section_title": "DOL Labor Certification Applications", "paragraphs": ["In accordance with H-2B regulations, January 1, 2018, was the first date that employers could submit H-2B temporary labor certifications to DOL requesting a work start date of April 1, 2018. On January 1, 2018, DOL received about 4,498 applications requesting an April 1, 2018, start date; those applications covered 81,008 workers. In response, DOL announced a process change. It indicated in a Federal Register notice that it would not begin releasing certified H\u20132B applications, which employers need in order to petition USCIS for H-2B workers (see \" H-2B Nonagricultural Worker Visa \"), until February 20, 2018, and on that date, it would issue such certified applications in order of receipt. DOL offered the following explanation for adopting this procedure:", "This process change will allow employers who filed promptly on January 1, 2018, sufficient time to meet regulatory requirements, including the recruitment and hiring of qualified and available U.S. workers, thus preserving the sequential order of filing that took place on January 1, 2018, to the extent possible."], "subsections": []}, {"section_title": "DHS Petitions", "paragraphs": ["On March 1, 2018, USCIS announced that in the first five business days of accepting H-2B petitions for the second half of FY2018, it had received petitions requesting about 47,000 H-2B workers subject to the statutory cap. It further reported that it had conducted a lottery on February 28, 2018, to randomly select a sufficient number of these petitions to meet the statutory cap.", "As discussed, on May 31, 2018, USCIS published a final rule authorizing the issuance of up to 15,000 additional H\u20132B visas for FY2018. In the first five business days of accepting petitions under this supplemental cap, USCIS received petitions for more beneficiaries than the number of H-2B visas available. As a result, it conducted a second FY2018 H-2B lottery on June 7, 2018, to randomly select a sufficient number of petitions to meet the supplemental cap."], "subsections": []}]}, {"section_title": "FY2019", "paragraphs": ["Employer demand for H-2B visas and associated temporary labor certifications for the second half of FY2019 reached new heights. "], "subsections": [{"section_title": "DOL Labor Certification Applications", "paragraphs": ["January 1, 2019, was the first day that employers could file H-2B labor certification applications for the second half of FY2019. On January 2, 2019, DOL announced that due to high demand its iCERT online application filing system had \"experienced a system disruption\" on January 1, 2019, that prevented some employers from submitting their H-2B certification applications: \"Within the first five minutes of opening the semi-annual H-2B certification process on January 1, 2019, the U.S. Department of Labor iCERT system had an unprecedented demand for H-2B certifications with more than 97,800 workers requested in pending applications for the 33,000 available visas.\" When the system re-opened on January 7, 2019, it \"handled the submission of approximately 4,749 H-2B applications covering more than 87,900 workers positions for an April 1, 2019, start date of work within the first one hour of operation.\" This experience led DOL to announce additional process changes for FY2020, as described below."], "subsections": []}, {"section_title": "DHS Petitions", "paragraphs": ["On February 19, 2019, the first day of accepting H-2B petitions for the second half of FY2019, USCIS announced that it had received petitions for more H-2B workers than there were remaining H-2B numbers under the FY2019 cap. On February 21, 2019, USCIS conducted a lottery to randomly select a sufficient number of petitions to meet the cap. "], "subsections": []}]}, {"section_title": "FY2020", "paragraphs": ["In February 2019, in light of its experience with H-2B submissions in January 2019 and the unanticipated \"burdens\" placed on \"its electronic filing system, network infrastructure, and staff resources,\" DOL announced new H-2B temporary labor certification application processing changes for FY2020. It indicated that beginning with H-2B certification applications for the first half of FY2020, it would randomly order and assign for processing all applications submitted within designated groups. The first group would consist of applications requesting the earliest start date of work (e.g., October 1, 2019, for the first half of FY2020) and filed during the first three calendar days of the filing period (which begins on July 3, 2019, for the first half of FY2020). DOL maintains that this new process \"balances employers' interest in utilizing the H-2B program with OFLC's [DOL's Office of Foreign Labor Certification's] interest in ensuring that access to its filing system is equitable and occurs with no user disruption.\" DOL is seeking comments on these changes and plans for the new procedures to take effect on July 3, 2019."], "subsections": []}]}, {"section_title": "Numbers Granted H-2B Status", "paragraphs": ["In any year, most, but not all, foreign nationals who obtain H-2B status acquire that status through admission to the United States on H-2B visas. Those who obtain H-2B status but are not issued visas include H-2B workers who are admitted to the United States without visas (mostly Canadians) and individuals who change to H-2B status while in the United States. USCIS data are available on the latter group. These data show that between FY2009 and FY2017, the number of individuals who were approved for a change of status to H-2B status ranged from about 110 (in FY2017) to about 470 (in FY2010)."], "subsections": [{"section_title": "H-2B Visa Issuances", "paragraphs": [" Figure 1 provides data on H-2B visa issuances from FY1992 through FY2018. These data offer one way to measure the growth of the H-2B program over the years. As explained above, the visa application and issuance process occurs after DOL has granted labor certification and DHS has approved the visa petition. ", "As illustrated in Figure 1 , the number of H-2B visas issued generally increased from FY1992 until FY2007, when H-2B visa issuances reached a highpoint of 129,547 (see the Appendix for yearly visa issuance data). H-2B visa issuances fell after FY2007 with the start of the economic recession, but, as shown in Figure 1 , they have generally been increasing since FY2009.", "In FY2005-FY2007 and FY2016-FY2018, as discussed, temporary provisions established exceptions to the statutory annual cap of 66,000. In some other years in which visa issuances surpassed 66,000, it seems reasonable to assume that the H-2B cap was exceeded given the magnitude of the numbers. "], "subsections": []}]}]}, {"section_title": "Conclusion", "paragraphs": ["With employer demand for H-2B visas exceeding supply, H-2B admissions and the statutory cap are once again receiving attention from policymakers. While previous Congresses considered broad immigration reform bills that included proposals for new temporary worker programs to address any perceived shortfalls in the supply of foreign workers, any legislative efforts to address the numerical limitations on nonagricultural guest workers in the near term seem likely to be focused on the existing H-2B program."], "subsections": [{"section_title": "Appendix. H-2B Visa Issuances", "paragraphs": [], "subsections": []}]}]}}
{"id": "RS21333", "title": "Northern Ireland: Current Issues and Ongoing Challenges in the Peace Process", "released_date": "2019-03-08T00:00:00", "summary": ["Between 1969 and 1999, almost 3,500 people died as a result of political violence in Northern Ireland, which is one of four component \"nations\" of the United Kingdom (UK). The conflict, often referred to as \"the Troubles,\" has its origins in the 1921 division of Ireland and has reflected a struggle between different national, cultural, and religious identities. Protestants in Northern Ireland (48%) largely define themselves as British and support remaining part of the UK (unionists). Most Catholics in Northern Ireland (45%) consider themselves Irish, and many desire a united Ireland (nationalists).", "On April 10, 1998, the UK and Irish governments and key Northern Ireland political parties reached a negotiated political settlement. The resulting Good Friday Agreement (also known as the Belfast Agreement) recognized the \"consent principle\" (i.e., a change in Northern Ireland's status can come about only with the consent of a majority of its people). It called for devolved government\u2014the transfer of power from London to Belfast\u2014with a Northern Ireland Assembly and Executive Committee in which unionist and nationalist parties would share power; it also contained provisions on decommissioning (disarmament) of paramilitary weapons, policing, human rights, UK security normalization (demilitarization), and the status of prisoners.", "Despite a much-improved security situation since 1998, full implementation of the peace accord has been challenging. For many years, decommissioning and police reforms were key sticking points that generated instability in the devolved government. In 2007, however, the hard-line Democratic Unionist Party (DUP) and Sinn Fein, the associated political party of the Irish Republican Army (IRA), reached a landmark power-sharing deal.", "Although many analysts view implementation of the most important aspects of the Good Friday Agreement as having been completed, tensions remain in Northern Ireland and distrust persists between the unionist and nationalist communities and their respective political parties. In January 2017, the devolved government led by the DUP and Sinn Fein collapsed, prompting snap Assembly elections in March 2017. Amid a renewable energy scandal involving DUP leader Arlene Foster and unease in much of Northern Ireland about \"Brexit\"\u2014the UK's expected exit from the European Union (EU)\u2014Sinn Fein made significant electoral gains. Negotiations to form a new power-sharing government have been unsuccessful to date.", "Northern Ireland continues to face a number of broader challenges in its search for peace and reconciliation. These challenges include reducing sectarian strife, fully grappling with Northern Ireland's legacy of violence (often termed dealing with the past); addressing lingering concerns about paramilitary and dissident activity; and promoting further economic development. Brexit also may have significant political and economic repercussions for Northern Ireland. The future of the border between Northern Ireland and the Republic of Ireland was a central issue in the UK's withdrawal negotiations with the EU and has posed a key stumbling block to approving the withdrawal agreement in the UK Parliament. Brexit also has renewed questions about Northern Ireland's status within the UK in the longer term.", "Successive U.S. Administrations and many Members of Congress have actively supported the Northern Ireland peace process. For decades, the United States provided development aid through the International Fund for Ireland (IFI). In recent years, congressional hearings have focused on the peace process, police reforms, and the status of public inquiries into several murders in Northern Ireland in which collusion between the security forces and paramilitary groups is suspected. Such issues may continue to be of interest in the 116th Congress."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["Between 1969 and 1999, almost 3,500 people died as a result of political violence in Northern Ireland, which is a part of the United Kingdom (UK). The conflict, which has its origins in the 1921 division of Ireland and is often referred to as \"the Troubles,\" has reflected a struggle between different national, cultural, and religious identities. Protestants in Northern Ireland (48%) largely define themselves as British and support continued incorporation in the UK ( unionists ). Catholics in Northern Ireland (45%) consider themselves Irish, and many Catholics desire a united Ireland ( nationalists ). More militant unionists are often termed loyalists , while more militant nationalists are referred to as republicans ; in the past, loyalists and republicans have been willing to use force to achieve their goals.", "The latest version of the Troubles was sparked in late 1968, when a civil rights movement was launched in Northern Ireland mostly by Catholics, who had long faced discrimination in areas such as electoral rights, housing, and employment. This civil rights movement was met with violence by some unionists, loyalists, and the police, which in turn prompted armed action by nationalists and republicans. Increasing chaos and escalating violence led the UK government to deploy the British Army on the streets of Northern Ireland in 1969 and to impose direct rule from London in 1972 (between 1920 and 1972, Northern Ireland had its own regional government at Stormont, outside Belfast).", "For years, the British and Irish governments sought to facilitate a negotiated political settlement to the conflict in Northern Ireland. After many ups and downs, the two governments and the Northern Ireland political parties participating in the peace talks announced an agreement on April 10, 1998. This accord became known as the Good Friday Agreement (for the day on which it was concluded); it is also known as the Belfast Agreement.", "At the core of the Good Friday Agreement is the \"consent principle\"\u2014that is, a change in Northern Ireland's status can come about only with the consent of the majority of its people (as well as with the consent of a majority in Ireland). While the agreement acknowledged that a substantial section of the population in Northern Ireland and a majority on the island desired a united Ireland, it recognized that the majority of people in Northern Ireland wished to remain part of the UK. If the preferences of these majorities were to change, the agreement asserted that both the British and Irish governments would have a binding obligation to bring about the wish of the people; thus, the agreement included provisions for future polls to be held in Northern Ireland on its constitutional status should events warrant.", "The Good Friday Agreement set out a framework for devolved government\u2014the transfer of specified powers over local governance from London to Belfast\u2014and called for establishing a Northern Ireland Assembly and Executive Committee in which unionist and nationalist parties would share power. To ensure that neither unionists nor nationalists could dominate the Assembly, the agreement specified that \"key decisions\" must receive cross-community support. The Executive Committee would be composed of a first minister, deputy first minister, and other ministers with departmental responsibilities (e.g., health, education, employment).", "In addition, the Good Friday Agreement contained provisions on several issues viewed as central to the peace process: decommissioning (disarmament) of paramilitary weapons; policing; human rights; UK security normalization (demilitarization); and the status of prisoners. Negotiations on many of these areas had been extremely contentious. Experts assert that the final agreed text thus reflected some degree of \"constructive ambiguity\" on such issues.", "Finally, the Good Friday Agreement created new \"North-South\" and \"East-West\" institutions. A North-South Ministerial Council was established to allow leaders in the northern and southern parts of the island of Ireland to consult and cooperate on cross-border issues. A British-Irish Council also was formed, composed of representatives of the two governments and the devolved administrations of Northern Ireland, Scotland, Wales, the Channel Islands, and the Isle of Man to discuss matters of regional interest.", "Voters in Northern Ireland and the Republic of Ireland approved the Good Friday Agreement in separate referendums on May 22, 1998. Elections to the new Northern Ireland Assembly, which had 108 seats at that time, took place on June 25, 1998. The two biggest and mainstream unionist and nationalist parties at the time\u2014the Ulster Unionist Party (UUP) and the Social Democratic and Labour Party (SDLP)\u2014won 28 and 24 seats respectively. The harder-line Democratic Unionist Party (DUP), despite its continued opposition to many parts of the Good Friday Agreement, won 20 seats; Sinn Fein, the associated political party of the Irish Republican Army (IRA), won 18; and a number of smaller parties claimed the rest of the Assembly seats."], "subsections": []}, {"section_title": "Implementing the Peace Agreement", "paragraphs": ["Despite a much-improved security situation since the signing of the Good Friday Agreement in 1998, full implementation has been difficult. For years, decommissioning and police reforms were key sticking points. Sporadic violence from dissident republican and loyalist paramilitary groups that refused to accept the peace process and sectarian strife between Protestants and Catholics also helped to feed ongoing mistrust between the unionist and nationalist communities."], "subsections": [{"section_title": "1999-2002: Instability in the Devolved Government", "paragraphs": ["Although Assembly elections were held in June 1998, devolution of power from London to Belfast did not follow promptly because of unionist concerns about decommissioning, or the surrender of paramilitary weapons. The text of the agreement states \"those who hold office should use only democratic, non-violent means, and those who do not should be excluded or removed from office.\" Unionists argued, however, that Sinn Fein could not assume its ministerial posts on the Executive Committee until the IRA had surrendered at least some of its weapons. Sinn Fein countered that the Good Friday Agreement did not specify a start date for decommissioning. The IRA had been observing a cease-fire since 1997, but it viewed decommissioning as tantamount to surrender and had long resisted such calls.", "In the fall of 1999, former U.S. Senator George Mitchell (who had chaired the peace talks) led a review of the Good Friday Agreement's implementation. This review succeeded in getting unionists to drop their precondition that the IRA had to decommission first, before Sinn Fein representatives could assume their ministerial posts. After 27 years of direct rule from London, authority over local affairs was transferred to the Northern Ireland Assembly and Executive on December 1, 1999. David Trimble, the leader of the UUP at the time, was elected First Minister; Seamus Mallon of the SDLP was elected Deputy First Minister.", "On February 11, 2000, however, London suspended Northern Ireland's devolved government because First Minister Trimble was poised to resign to protest the continued absence of IRA decommissioning. British officials feared that Trimble would have been replaced as UUP party leader by someone less supportive of, if not opposed to, the peace agreement. After the IRA pledged to initiate a process to put its arms \"beyond use,\" Northern Ireland's power-sharing institutions were reinstated in June 2000.", "For the next 12 months, unionists remained frustrated by the ongoing lack of actual IRA decommissioning. As a result, Trimble resigned as First Minister on July 1, 2001. Negotiations led by the British and Irish governments to restore the devolved government proved difficult. Finally, in late October 2001, the IRA announced that it had put a quantity of arms, ammunition, and explosives \"beyond use\" to \"save the peace process.\" The UUP agreed to rejoin the Executive, and the Assembly reconvened in November 2001. Trimble was reelected First Minister, and Mark Durkan, the new leader of the SDLP, was elected Deputy First Minister.", "In April 2002, the IRA carried out a second act of decommissioning. Still, unionists continued to worry about the IRA's long-term commitment to the peace process. In early October 2002, police raided Sinn Fein's Assembly offices and arrested four officials as part of an investigation into a suspected IRA spy ring. Both the UUP and the DUP threatened to withdraw from the government unless Sinn Fein was expelled. With the political process in turmoil, London once again suspended the devolved government and reinstated direct rule on October 14, 2002."], "subsections": []}, {"section_title": "2003-2007: The Struggle to Restore Devolution", "paragraphs": ["Despite the suspension of the devolved government, Assembly elections took place in November 2003. The elections produced a significant shift in the balance of power in Northern Ireland politics in favor of perceived hard-liners on both sides of the conflict. The DUP\u2014led by the Reverend Ian Paisley\u2014overtook the UUP as the dominant unionist party. Sinn Fein surpassed the more moderate SDLP to become the largest nationalist party. Immediately after the elections, the DUP asserted that it would not enter into government with Sinn Fein until the IRA disarmed and disbanded; the DUP also refused to talk directly to Sinn Fein. ", "For much of 2004, negotiations to restore the devolved government continued but remained stalemated. Talks were further complicated by a December 2004 bank robbery in Belfast, which police believed was carried out by the IRA, and the January 2005 murder of a Belfast man, Robert McCartney, during a bar brawl involving IRA members. These incidents increased pressure on the IRA and Sinn Fein to address the additional issue of IRA criminality. In April 2005, Sinn Fein leader Gerry Adams effectively called on the IRA to abandon violence and pursue politics as an \"alternative\" to \"armed struggle.\"", "In July 2005, the IRA ordered an end to its armed campaign. It instructed all members to pursue objectives through \"exclusively peaceful means\" and to \"not engage in any other activities whatsoever.\" All IRA units were ordered to \"dump arms.\" Although many analysts asserted that the IRA's statement was the least ambiguous one ever, unionists were wary, noting that it did not explicitly address the issue of IRA criminality or whether the IRA would disband. The DUP and other unionists also wanted Sinn Fein to support Northern Ireland's new police service. In September 2005, Northern Ireland's Independent International Commission on Decommissioning (IICD) announced that the IRA had put all of its arms beyond use, asserting that the IRA weaponry dismantled or made inoperable matched estimates provided by the security forces. ", "With no real progress on restoring Northern Ireland's devolved government, then-UK Prime Minister Tony Blair and then-Irish Prime Minister Bertie Ahern called an all-party meeting in Scotland in October 2006. Blair and Ahern put forth a road map, known as the St. Andrews Agreement, intended to break the political stalemate. It called for negotiations between November 2006 and March 2007 on forming a new devolved government; during this time, the DUP would agree to share power with Sinn Fein and Sinn Fein would agree to support the police service and join the Policing Board. In January 2007, Sinn Fein members voted to support Northern Ireland's police and the criminal justice system in the context of the reestablishment of the political institutions. Many experts viewed Sinn Fein's resolution as historic, given the IRA's traditional view of the police as a legitimate target.", "On March 26, 2007, Paisley and Adams met for the first time ever and announced a deal to form a power-sharing government on May 8, 2007. Observers contended that the image of Paisley and Adams sitting at the same table was unprecedented, as were the statements of both leaders pledging to work toward a better future for \"all\" the people of Northern Ireland.", "On May 8, 2007, Paisley and Sinn Fein's chief negotiator, Martin McGuinness, were sworn in as First Minister and Deputy First Minister, respectively, and the power-sharing Assembly and Executive began work. Many experts believed that unlike past efforts, this deal would stick, given that it was reached by the DUP and Sinn Fein, viewed as the two most polarized forces in Northern Ireland politics. At the same time, tensions continued to persist within the devolved government and between the unionist and nationalist communities."], "subsections": []}, {"section_title": "2008-2010: The Transfer of Policing and Justice Powers", "paragraphs": ["At the time of the Good Friday Agreement's signing, the parties had been unable to reach an accord on the devolution of the sensitive matters of policing, prisons, and the criminal justice system. Consequently, the parties agreed to postpone the devolution of policing and justice powers until an undetermined point in the future. The 2006 St. Andrews Agreement called for the devolution of policing and justice powers by May 2008, but the DUP and Sinn Fein remained at odds over this timeline. The DUP maintained that May 2008 was merely an aspirational date to which it was not committed.", "In July 2008, the lack of progress on devolving police and justice powers from London to Belfast prompted Sinn Fein to block the regular meetings of the Executive Committee, essentially bringing the formal work of the Assembly to a standstill. Executive Committee meetings resumed in late November 2008 following a DUP-Sinn Fein agreement on a road map for devolving authority for policing and justice affairs. As part of the road map, the DUP and Sinn Fein agreed that a Northern Ireland Justice Department would be established, as well as an independent attorney general for Northern Ireland. In addition, the parties agreed on a system for choosing a justice minister. Although Executive Committee ministerial portfolios are normally allocated based on party strength, the two sides asserted that given the sensitive nature of this position, the new justice minister would be elected by a cross-community vote in the Assembly.", "Nevertheless, progress on transferring police and justice powers to the devolved government remained slow. Nationalists increasingly warned that the failure to do so could lead to renewed political instability. In late January 2010, then-British Prime Minister Gordon Brown and then-Irish Prime Minister Brian Cowen convened a summit with the parties to try to hammer out a deal and set a date for the devolution of authority for policing and justice affairs.", "On February 4, 2010, the DUP and Sinn Fein announced that they had reached the Hillsborough Agreement, setting April 12, 2010, as the date for the devolution of policing and justice authority from London to Belfast. As part of the deal, the Hillsborough Agreement also established a timeline for developing a new mechanism to address how contentious sectarian parades in the region were managed. On March 9, 2010, the Northern Ireland Assembly approved the Hillsborough Agreement. On April 12, as agreed and for the first time in 38 years, London transferred power over policing and justice affairs to Belfast. That same day, David Ford, of the smaller, cross-community Alliance Party, was elected as Northern Ireland's new Justice Minister."], "subsections": []}, {"section_title": "Police Reforms", "paragraphs": ["Police reforms have long been recognized as a key element in achieving a comprehensive peace in Northern Ireland. The Royal Ulster Constabulary (RUC)\u2014Northern Ireland's former, 92% Protestant police force\u2014was long viewed by Catholics as an enforcer of Protestant domination. Human rights organizations accused the RUC of brutality and collusion with loyalist paramilitary groups. Defenders of the RUC pointed to its tradition of loyalty and discipline and its record in fighting terrorism. The Good Friday Agreement called for an independent commission to make recommendations to help \"ensure policing arrangements, including composition, recruitment, training, culture, ethos and symbols, are such that ... Northern Ireland has a police service that can enjoy widespread support from ... the community as a whole.\"", "In September 1999, this independent commission (the so-called Patten Commission) released a report with 175 recommendations. It proposed a new name for the RUC, a new badge, and new symbols free of the British or Irish states. Other key measures included reducing the size of the force from 11,400 to 7,500, and increasing the proportion of Catholic officers (from 8% to 30% in 10 years). Unionists responded negatively, but nationalists were mostly positive.", "In May 2000, the Blair government introduced the Police Bill in the UK House of Commons, and maintained that the reform bill was faithful to the Patten report's \"broad intention\" and \"detailed recommendations.\" Nationalists were critical, arguing that Patten's proposals had been gutted. London responded that amendments would deal with human rights training, promoting 50-50 recruitment of Catholics and Protestants, and oversight responsibilities. The Police (Northern Ireland) Bill became law in November 2000. Recruitment for the future Police Service of Northern Ireland (PSNI) began in March 2001, but it was unclear whether the SDLP or Sinn Fein would support it or join the 19-member Policing Board, a new democratic oversight body. To help ensure nationalist support, London proposed further concessions in July 2001, including halving the antiterrorist \"Special Branch\" and prohibiting new recruits from using plastic bullets.", "In August 2001, the SDLP broke with Sinn Fein and accepted the British government's additional concessions on policing. The SDLP agreed to nominate representatives to the Policing Board and urged young Catholics to join the new police service. The UUP and the DUP also agreed to join the Policing Board, which came into being on November 4, 2001. That same day, the RUC was renamed the PSNI, and the first class of recruits drawn 50-50 from both Catholic and Protestant communities began their training. Sinn Fein maintained that the changes in the police service were largely cosmetic and continued to charge that the new PSNI\u2014like the RUC before it\u2014would be unduly influenced by elements of the security services opposed to the peace process. Some say that Sinn Fein's absence from the Policing Board discouraged more Catholics from joining the PSNI, and prevented the PSNI's full acceptance by the nationalist community.", "Following the suspension of Northern Ireland's devolved institutions in October 2002, Sinn Fein asserted that its acceptance of the PSNI and the Policing Board hinged on a deal to revive the devolved government and the transfer of policing and justice powers from London to a restored Assembly and Executive. As noted previously, in January 2007, Sinn Fein members voted to support the police and join the Policing Board. Sinn Fein members assumed their places on the Policing Board in late May 2007, following the reestablishment of the devolved government. ", "In March 2011, the 50-50 recruitment process for Catholic and Protestant PSNI officers was brought to a close. In making this decision, UK officials asserted that Catholic officers now made up almost 30% of the PSNI, and as such, the 50-50 process had fulfilled the goal set out by the Patten Commission. Although some nationalists viewed this decision as premature, many unionists applauded it, viewing the 50-50 rule as unfairly discriminating against Protestants.", "In recent years, concerns have increased that not enough Catholics have been seeking to join the PSNI, partly because of lingering suspicions about the police within the Catholic/nationalist community but also because of fears that Catholic police recruits may be key targets of dissident republicans. According to one news report, of the 401 new officers recruited to join the PSNI between 2013 and 2015, only 77 were Catholic. Following a PSNI review of the recruitment process in 2016, the PSNI introduced a number of procedural changes in 2017 to help attract more Catholics (and more women)."], "subsections": []}, {"section_title": "Security Normalization", "paragraphs": ["In July 2007, the British army ended its 38-year-long military operation in Northern Ireland in the context of the peace process and the improved security situation. Although a regular garrison of 5,000 British troops remains based in Northern Ireland, they no longer have a role in policing and may be deployed worldwide. Policing in Northern Ireland is now the responsibility of the PSNI."], "subsections": []}]}, {"section_title": "Current Crisis in the Devolved Government", "paragraphs": ["In light of the 2007 political agreement to restore Northern Ireland's devolved government, the transfer of policing and justice powers in 2010, and the extensive police reforms, many analysts view the implementation of the most important aspects of the Good Friday Agreement as having been completed. In March 2011, the Northern Ireland Assembly and Executive concluded its first full term in office in 40 years. The regularly scheduled Assembly elections in May 2011 and May 2016 produced successive power-sharing governments led by the DUP and Sinn Fein. ", "Nevertheless, deep distrust persists between unionists and nationalists and their respective political parties. A series of events over the past few years\u2014including protests over the use of flags and emblems, a crisis over implementing welfare reform, a controversy over a past deal for republican \"on the runs,\" and the arrest of a Sinn Fein leader in connection with the murder of a former IRA member\u2014have highlighted the fragility of community relations and periodically threatened the stability of the devolved government. In January 2017, after only 10 months in office, the devolved government led by First Minister Arlene Foster of the DUP and Deputy First Minister Martin McGuinness of Sinn Fein collapsed, prompting snap Assembly elections."], "subsections": [{"section_title": "The March 2017 Snap Assembly Elections", "paragraphs": ["The immediate cause of the devolved government's collapse in January 2017 was a scandal over flaws in a renewable energy program (the Renewable Heat Incentive, or RHI), initially overseen by First Minister Foster when she served as Northern Ireland's Enterprise Minister in 2012. The problems in the RHI, which sought to increase consumption of heat from renewable energy sources by offering businesses financial incentives to do so, are expected to cost Northern Ireland taxpayers \u00a3490 million (roughly $600 million). Sinn Fein called for Foster to temporarily stand aside as First Minister while an investigation was conducted into the energy scheme; she refused, and McGuinness resigned as Deputy First Minister in protest.", "Under the rules governing Northern Ireland's power-sharing arrangements, if either the First Minister or the Deputy First Minister resigns (without a replacement being nominated), the government cannot continue and new elections must be held. New elections were called for March 2, 2017. Arlene Foster led the DUP's campaign, but McGuinness stepped down as Sinn Fein's northern leader due to health reasons (he passed away a few weeks after the election). Michelle O'Neill succeeded McGuinness as Sinn Fein's leader in Northern Ireland.", "Tensions with the DUP on several issues besides the RHI scandal likely contributed to Sinn Fein's decision to force snap Assembly elections. The elections were called amid continued uncertainty over the implications for Northern Ireland of \"Brexit\"\u2014the UK's pending exit from the European Union (EU). The DUP was the only major Northern Ireland political party to back Brexit ahead of the June 2016 referendum on EU membership, and Northern Ireland voted 56% to 44% against leaving the EU (the UK overall voted in favor, 52% to 48%). Other points of contention included the introduction of a potential Irish Language Act\u2014a long-standing nationalist demand to give the Irish language the same official status as English in Northern Ireland\u2014and legalizing same-sex marriage. Both measures are supported by Sinn Fein but opposed by the DUP.", "As seen in Table 1 , the number of Northern Ireland Assembly seats contested in 2017 was 90 rather than 108 because of previously agreed reforms to reduce the size of the Assembly.", "The DUP retained the largest number of seats, but Sinn Fein was widely regarded as the biggest winner given its success in reducing the previous gap between the two parties from 10 seats to 1. A high voter turnout of almost 65%\u2014fueled by anger over the energy scandal and a perceived lack of concern from London about Brexit's impact on Northern Ireland\u2014appears to have favored Sinn Fein and the cross-community Alliance Party.", "For the first time in the Assembly, unionist parties will not have an overall majority (a largely symbolic status because of the power-sharing rules but highly emblematic for the unionist community). With fewer than 30 seats, the DUP also lost its unilateral ability to trigger a \"petition of concern,\" a procedure used by the DUP to block legislation on various social policy issues, including same-sex marriage. At the same time, the election results reinforced the DUP and Sinn Fein as the dominant voices for their respective communities, suggesting continued and possibly increased polarization in Northern Ireland's politics."], "subsections": []}, {"section_title": "Status of Negotiations", "paragraphs": ["Two years after Assembly elections, Northern Ireland remains without a devolved government. Negotiations have proceeded in fits and starts but appear to be stalemated at present. Press reports indicate that the biggest sticking point is Sinn Fein's demand for a stand-alone Irish Language Act, which the DUP continues to oppose. Some analysts suggest that the June 2017 UK general election, which resulted in Prime Minister Theresa May's Conservative Party losing its majority in the House of Commons and forming a minority government that relies on support from the DUP, has hardened the positions of the DUP and Sinn Fein and made reaching an agreement on a new devolved government more difficult.", "In February 2018, media reports signaled that the DUP and Sinn Fein were close to reaching a deal to restore the devolved government. No deal materialized, however. DUP leaders apparently judged that the party's base would not support a possible \"package deal\" addressing both the Irish and Ulster Scots languages (and other cultural matters). Arlene Foster contended that it was not a \"fair and balanced package\" and there was \"no current prospect\" for reestablishing Northern Ireland's power-sharing institutions; she also urged the UK government to \"start making policy decisions.\" While Foster maintained that the DUP was committed to restoring devolved government, some nationalists interpreted her statements as calling for a return to direct rule. Sinn Fein's new leader, Mary Lou McDonald (who replaced Gerry Adams in early 2018), asserted that \"direct rule is not acceptable.\" London does not appear eager to reinstate direct rule or call new elections. Secretary of State for Northern Ireland Karen Bradley has stated that \"devolved government is in the best interests of everyone in Northern Ireland.\"", "In February 2019, Secretary of State Bradley and Irish Foreign Minister Simon Coveney met with Northern Ireland's five main political parties; news reports indicate that both Bradley and Coveney pledged to present proposals to restart negotiations. Some observers contend that the ongoing internal debate within the UK on Brexit\u2014and in particular, the \"backstop\" designed to ensure no \"hard\" land border between Northern Ireland and Ireland following the UK's departure from the EU\u2014has consumed UK and Northern Ireland politicians' time and attention and largely overshadowed discussions on a new devolved government. Analysts suggest that any significant progress on reestablishing the devolved government likely will only occur after Brexit and the backstop issue are resolved (see \"Possible Implications of Brexit\" for more information).", "Several commentators have speculated that the British and Irish governments might seek to establish some sort of joint authority if a devolved government cannot be formed, but this approach is largely viewed as a nonstarter for the DUP and other unionists who would be leery of giving Dublin a formal role in Northern Ireland affairs. In the continued absence of a devolved government, Sinn Fein has called for the British-Irish Intergovernmental Conference\u2014provided for in the Good Friday Agreement to promote bilateral cooperation between British and Irish government ministers\u2014to be reconvened (it has not met since the DUP-Sinn Fein power-sharing agreement of 2007). In late 2017, Irish Prime Minister Leo Varadkar appeared to support this idea, but also noted that reviving the intergovernmental conference should not be construed as \"joint rule.\""], "subsections": []}]}, {"section_title": "Initiatives to Further the Peace Process", "paragraphs": ["Over the past few years, the Northern Ireland political parties and the British and Irish governments have made several attempts to resolve outstanding issues related to the peace process, reduce tensions between the unionist and nationalist communities, and promote reconciliation. Such efforts also have sought to address concerns such as ongoing sectarian strife, paramilitary and dissident activity, and Northern Ireland's legacy of violence (often termed \"dealing with the past\"). Major endeavors include the 2013 Haass initiative, the 2014 Stormont House Agreement, and the 2015 Fresh Start Agreement."], "subsections": [{"section_title": "The Haass Initiative", "paragraphs": ["In July 2013, the Northern Ireland Executive appointed former U.S. diplomat and special envoy for Northern Ireland Richard Haass as the independent chair of interparty talks aimed at tackling some of the most divisive issues in Northern Ireland society. In particular, Haass was tasked with setting out recommendations by the end of 2013 on dealing with the past and the sectarian issues of parading, protests, and the use of flags and emblems. At the end of December 2013, Haass released a draft proposal outlining the way forward in these areas, but was unable to broker a final agreement among the Northern Ireland political parties participating in the talks. (The specifics of the Haass proposals are discussed below in \" Ongoing Challenges .\")"], "subsections": []}, {"section_title": "The Stormont House Agreement and Implementation Problems", "paragraphs": ["During the summer of 2014, the devolved government was tested by financial pressures and disagreement over UK-wide welfare reforms (passed by the UK parliament in February 2013 but which Sinn Fein and the SDLP opposed implementing in Northern Ireland). Northern Ireland also faced significant spending cuts given the imposition of austerity measures throughout the UK. Analysts contend that the welfare and budgetary disputes decreased public confidence in the devolved government's effectiveness and raised broader questions about its stability. ", "In September 2014, then-First Minister Peter Robinson asserted that the current governing arrangements were \"no longer fit for purpose\" and called for new interparty discussions to improve Northern Ireland's institutions and decisionmaking processes. A few weeks later, the UK government announced it would convene talks with Northern Ireland's main political parties (the DUP, Sinn Fein, the UUP, the SDLP, and the Alliance) on government stability and finances. The talks also would address the issues previously tackled by Richard Haass in 2013 (managing parades and protests, the use of flags and emblems, and dealing with the past).", "On December 23, 2014, the Northern Ireland political parties and the British and Irish governments announced that a broad, multifaceted agreement had been reached on financial and welfare reform; governing structures; and the contentious issues of parades, flags, and the past (see \" Ongoing Challenges \" for more information on these latter provisions). As part of the resulting \"Stormont House Agreement,\" the five main political parties agreed to support welfare reform (with certain mitigating measures), balance the budget, address Northern Ireland's heavy economic reliance on the public sector, and reduce the number of Executive departments and Assembly members over the next few years to improve efficiency and cut costs.", "London and Dublin hailed the Stormont House Agreement as a welcome step forward. The five main Northern Ireland political parties also appeared largely satisfied with the new agreement, despite some reservations. Some Alliance and UUP members worried that the accord did not make greater progress toward resolving the parades issue, while Sinn Fein and the SDLP expressed disappointment that the deal did not call for an Irish Language Act, a bill of rights for Northern Ireland, or a public inquiry into the 1989 murder of Belfast lawyer Patrick Finucane.", "In early 2015, as promised in the Stormont House Agreement, the devolved government brought forward a welfare reform bill to enact the required changes. In March 2015, however, as the bill was nearing completion in the Assembly, Sinn Fein announced it would block the bill. Sinn Fein accused the DUP of reneging on commitments to fully protect current and future welfare claimants and argued that the UK government must provide more money to assist welfare recipients negatively affected by the reforms. The DUP responded that Sinn Fein's behavior was \"dishonorable and ham-fisted.\"", "The failure to resolve the welfare reform issue also stalled implementation of the other aspects of the Stormont House Agreement, including measures aimed at dealing with sectarian issues and the past. Some observers and analysts worried that the continued impasse was increasingly threatening to collapse the devolved government. On September 3, 2015, the UK and Irish governments decided to convene a new round of cross-party talks.", "On September 9, 2015, the devolved government was further rocked by the arrest of Bobby Storey, a senior Sinn Fein leader (and former IRA commander). Storey was arrested in connection with the August 2015 murder of ex-IRA member Kevin McGuigan (believed to be a revenge killing for the murder of another former IRA commander in May). Shortly after the McGuigan murder, PSNI Police Chief George Hamilton claimed that the IRA continued to exist (with some of its structures and operatives still \"broadly in place\") but that McGuigan's murder did not appear to have been sanctioned or directed by the IRA. Sinn Fein asserted that the IRA had \"gone away\" and no longer existed. Storey and two others (described as \"senior republicans\") arrested as part of the McGuigan investigation ultimately were released without charge. Nevertheless, the McGuigan killing and Storey's arrest renewed lingering unionist concerns about continuing IRA activities and further complicated efforts to implement the Stormont House Agreement."], "subsections": []}, {"section_title": "The Fresh Start Agreement", "paragraphs": ["After 10 weeks of talks in the fall of 2015 on the implementation of the Stormont House Agreement and the legacy of paramilitary activity, the British and Irish governments, the DUP, and Sinn Fein reached a new \"Fresh Start Agreement\" on November 17, 2015. The deal was broadly welcomed in Northern Ireland, although the other main Northern Ireland political parties\u2014the SDLP, the UUP, and the Alliance Party\u2014reportedly objected to some elements. Many Northern Ireland political leaders and human rights groups were dismayed that negotiators failed to reach final agreement on establishing new institutions to deal with the past, as called for in the Stormont House Agreement.", "A key part of the Fresh Start Agreement focused on welfare reform and improving the stability and sustainability of Northern Ireland's budget and governing institutions. The DUP and Sinn Fein agreed to allow the UK parliament to implement changes to the welfare system in Northern Ireland and on a financial package worth \u00a3585 million (roughly $832 million) to soften the effects of the welfare and tax credit cuts (funded from the Northern Ireland budget). In exchange, the UK government pledged up to \u00a3500 million (about $711 million) in new funding to tackle issues \"unique to Northern Ireland,\" such as addressing security concerns and removing Northern Ireland's \"peace walls\" (physical barriers that separate Protestant and Catholic neighborhoods). ", "The new accord also confirmed institutional reforms originally outlined in the Stormont House Agreement. These reforms included reducing the size of the Assembly from 108 to 90 members, which would have effect from the first Assembly election after the May 2016 election (and was thus implemented in the March 2017 snap elections). The Stormont House Agreement also decreased the number of government departments from 12 to 9 and made provision for an official opposition in the Assembly.", "Paramilitary activity was the other main issue addressed in the Fresh Start Agreement. The new accord established \"fresh obligations\" on Northern Ireland's elected representatives to work together toward ending all forms of paramilitary activity and disbanding paramilitary structures. It also called for enhanced efforts to combat organized crime and cross-border crime. (See \" Ongoing Challenges \" for more information on these provisions in the Fresh Start Agreement.)"], "subsections": []}]}, {"section_title": "Ongoing Challenges", "paragraphs": ["Although Northern Ireland has made considerable progress in the years since the 1998 Good Friday Agreement, the search for peace and reconciliation remains challenging. Controversial issues include bridging sectarian divisions and managing key sticking points (especially parading, protests, and the use of flags and emblems); dealing with the past; curbing remaining paramilitary and dissident activity; and furthering economic development. As noted, the 2013 Haass initiative, the 2014 Stormont House Agreement, and the 2015 Fresh Start Agreement all attempted to tackle at least some aspects of these long-standing challenges. Some measures agreed in these successive accords have been delayed amid the current absence of a devolved government. Significant concerns also exist about the possible implications of Brexit for Northern Ireland."], "subsections": [{"section_title": "Sectarian Sticking Points: Parading, Protests, and the Use of Flags and Emblems", "paragraphs": ["Observers suggest that Northern Ireland remains a largely divided society, with Protestant and Catholic communities existing in parallel. Peace walls that separate Protestant and Catholic neighborhoods are perhaps the most tangible sign of such divisions. Estimates of the number of peace walls vary depending on the definition used. Northern Ireland's Department of Justice recognizes around 50 peace walls for which it has responsibility; when other types of \"interfaces\" are included\u2014such as fences, gates, and closed roads\u2014the number of physical barriers separating Protestant and Catholic communities is over 100. Northern Ireland's Executive is working to remove the peace walls, but a 2015 survey of public attitudes toward the walls found that 30% of those interviewed want the walls to remain in place; it also found that more than 4 in 10 people have never interacted with anyone from the community living on the other side of the nearest peace wall. Furthermore, experts note that schools and housing estates in Northern Ireland remain mostly single-identity communities.", "Some analysts contend that sectarian divisions are particularly evident during the annual summer \"marching season,\" when many unionist parades commemorating Protestant history are held. Although the vast majority of these annual parades by unionist cultural and religious organizations are not contentious, some are held through or close to areas populated mainly by Catholics (some of whom perceive such parades as triumphalist and intimidating). During the Troubles, the marching season often provoked fierce violence. Many Protestant organizations view the existing Parades Commission that arbitrates disputes over parade routes as largely biased in favor of Catholics and have repeatedly urged its abolition.", "Although the Hillsborough Agreement called for a new parading structure to be established by the end of 2010, this process quickly stalled. The DUP-Sinn Fein-led Northern Ireland Executive proposed new parades legislation in mid-2010 that would have abolished the Parades Commission and promoted local solutions to disputed marches. However, the Protestant Orange Order\u2014a group at the center of many contentious parades in the past\u2014opposed several elements of the plan. The DUP asserted that it a new parading structure would not succeed without the support of the Orange Order.", "Frictions between the unionist and nationalist communities were also highlighted by a series of protests in late 2012-early 2013 following a decision to fly the union (UK) flag at Belfast City Hall only on designated days, rather than year-round (nationalist city councilors had originally wanted the flag removed completely but agreed to a compromise plan to fly it on certain specified days instead). The protests, mostly by unionists and loyalists, occurred in Belfast and elsewhere in Northern Ireland, and some turned violent. Northern Ireland leaders on both sides of the sectarian divide received death threats, and some political party offices were vandalized.", "As mentioned previously, parading, protests, and the use of flags and emblems were discussed during the talks led by Richard Haass in the fall of 2013. According to Haass, dealing with flags and symbols was the \"toughest area of negotiations,\" and the draft agreement proposed at the end of December 2013 noted that the parties had been unable to reach consensus on any new policies surrounding the display of flags or emblems. Instead, the Haass proposals called for establishing a commission to hold public discussions throughout Northern Ireland on the use of flags and emblems (among other issues) to try to find a way forward. The December 2014 Stormont House Agreement essentially endorsed this idea and asserted that a new Commission on Flags, Identity, Culture and Tradition would be set up, composed of 15 members (with 7 to be appointed by Northern Ireland's main political parties and 8 drawn from outside the government).", "As for parading, the Haass proposals recommended transferring authority over parading from the Parades Commission to the devolved government and establishing two new institutions: one to receive all event notifications and promote community dialogue and mediation; and another to make decisions in cases where parading and protest disputes remained. The Haass proposals also called for establishing in law a code of conduct for both marchers and protesters. In the Stormont House Agreement, the parties agreed that responsibility for parades and related protests should, in principle, be devolved to the Northern Ireland Assembly and that new legislation should be introduced. The Stormont House Agreement, however, did not provide further specifics and did not reference the parading institutions proposed by Haass.", "As noted above, the crisis over welfare reform and paramilitary activity largely stalled implementation of the Stormont House Agreement. According to the Fresh Start Agreement of November 2015, the measures outlined in the Stormont House Agreement on the issues of flags and parades would move forward. The Commission on Flags, Identity, Culture and Tradition began work in June 2016. As for legislation on parading and related protests, the Fresh Start Agreement called for a discussion paper to be prepared for Northern Ireland's Executive Committee. This paper is expected to outline options for the regulation of parades and related protests and evaluate how key outstanding issues, such as a code of conduct, could be addressed in new legislation. To date, the discussion paper on parading has not yet been presented given the impasse in the devolved government."], "subsections": []}, {"section_title": "Dealing with the Past", "paragraphs": ["Fully addressing the legacy of violence in Northern Ireland remains controversial. The Good Friday Agreement asserted that \"it is essential to acknowledge and address the suffering of the victims of violence as a necessary element of reconciliation.\" In 2008, the Northern Ireland Assembly established a Commission for Victims and Survivors aimed at supporting victims and their families. Several legal processes for examining crimes stemming from the Troubles also exist. These include police investigations into deaths related to the conflict; investigations by the Police Ombudsman for Northern Ireland (PONI) of historical cases involving allegations of police misconduct; and public inquiries, such as the Saville inquiry (concluded in 2010) into the 1972 Bloody Sunday incident.", "Critics argue that these various legal processes represent a \"piecemeal\" approach and give some deaths or incidents priority over others. Some observers point out that more than 3,000 conflict-related deaths have never been solved. In 2005, a Historical Enquiries Team (HET) was established within the PSNI to review over 3,200 deaths relating to the conflict between 1968 and 1998, but, despite the HET's efforts, progress was slow; the HET was wound down at the end of 2014, and its work was taken over by another, smaller unit within the PSNI. Others note the expense and time involved with some of these processes; for example, the Bloody Sunday inquiry cost \u00a3195 million (more than $300 million) and took 12 years to complete. Some analysts and human rights advocates argue that Northern Ireland needs a comprehensive mechanism for dealing with its past, both to meet the needs of all victims and survivors and to contain costs.", "At the same time, many commentators assert that there is no consensus in Northern Ireland on the best way to deal with the past. This is in large part because many unionists and nationalists continue to view the conflict differently and retain competing narratives. Recommendations issued in 2009 by the Consultative Group on the Past (set up by the UK government) were widely criticized for a variety of reasons by nearly all segments of Northern Ireland society.", "Dealing with the past was a key focus of the talks chaired by Richard Haass in December 2013. Among other recommendations related to the past, the draft proposals put forward by Haass called for establishing new mechanisms to consolidate police investigations and better address the needs of victims and survivors. The December 2014 Stormont House Agreement largely endorsed the proposals suggested by Haass. Among other measures for dealing with the past, the Stormont House Agreement called for setting up four bodies:", "Historical Investigations Unit (HIU) . This body would take forward outstanding cases from the HET process and the historical unit of the Police Ombudsman dealing with past police misconduct cases. The HIU would be overseen by the Northern Ireland Policing Board and would aim to complete its work within five years of its establishment. The HIU would be established through UK legislation, and the UK government pledged to make \"full disclosure\" to the HIU. Independent Commission for Information Retrieval (ICIR) . The ICIR would enable victims and survivors to seek and privately receive information about conflict-related violence. It would be established by the British and Irish governments with a five-year mandate and would be entirely separate from the justice systems in each jurisdiction. The ICIR would not disclose the identities of those coming forward with information to law enforcement authorities, and any information provided to it would be inadmissible in criminal and civil proceedings; individuals who provide information, however, would not be immune to prosecution for any crime committed should evidentiary requirements be met by other means. Oral History Archive. The Northern Ireland Executive would establish this archive by 2016 to provide a central place for people from all backgrounds to share experiences and narratives related to the Troubles. Implementation and Reconciliation Group (IRG) . This body would be set up to oversee work on themes, archives, and information recovery in an effort to promote reconciliation and reduce sectarianism.", "In September 2015, the Secretary of State for Northern Ireland published a policy paper outlining the UK government's proposal for the legislation required to establish the HIU, the ICIR, and the Oral History Archive. Amid the crisis in the devolved government in the fall of 2015, however, work on setting up these new bodies largely came to a standstill. Controversy also arose over the UK government's assertion in its policy paper that \"the HIU must protect information that, if [publicly] disclosed, would or would be likely to prejudice national security\" and that \"where the HIU proposes to disclose information of this nature, it will be required to refer the matter to the UK government, which may prevent disclosure, if necessary.\" Victims groups and many nationalists strongly objected to such \"national security caveats,\" viewing them as essentially providing the UK government with a veto over the release of information by the proposed HIU.", "Divisions over such \"national security caveats\" appear to be a key reason that a final deal on establishing the HIU (and the other bodies to deal with the past) was not possible in the Fresh Start Agreement. In February 2016, then-Secretary of State for Northern Ireland Theresa Villiers stated that the proposed national security provisions have \"led some to assume that the government will be constantly seeking to block the onward disclosure by the HIU of information to victims' families and the public. This is simply not the case.\" She went on to note that during the Fresh Start talks, the UK government offered a \"significant compromise,\" in which families would be told whether the government had required the HIU to withhold certain sensitive information, and that the families or the HIU director would have the right to challenge this decision in Northern Ireland's High Court. ", "Press reports indicate that victims groups and nationalists remained concerned that \"national security\" could be used to cover up criminal wrongdoing by state agents. Sinn Fein reportedly argued that an international panel of judges should be appointed to hear any appeals, rather than the High Court. Despite continued discussions in 2016 between the UK government, Sinn Fein, the DUP, and other stakeholders, the \"national security caveats\" continued to pose a stumbling block to implementing the \"dealing with the past\" provisions in the Stormont House Agreement. The stalemate since 2017 in reestablishing a devolved government further stalled work on mechanisms to address Northern Ireland's legacy of violence.", "In May 2018, the UK government launched a public consultation process on a draft bill to establish the four legacy institutions called for in the Stormont House Agreement\u2014the HIU, the ICIR, the Oral History Archive, and the IRG. The government envisions that the HIU would have a caseload of about 1,700 Troubles-related deaths. \"National security caveats\" for the HIU would remain, but, as described by former Secretary of State Villiers, families or the HIU director would be able to appeal government decisions to withhold information to Northern Ireland's High Court. At the same time, unionists have voiced concerns that the HIU could unfairly target former soldiers and police officers, and many argue that any measures to deal with the past in Northern Ireland should contain a statute of limitation on the prosecution of former soldiers. Nationalists strongly reject any such statute of limitations or amnesty to prosecutions. Human rights groups have complained that the government's proposals largely neglect the right of individuals injured during the Troubles to have their cases investigated. The public consultation process concluded in October 2018, but its findings have yet to be released."], "subsections": []}, {"section_title": "Remaining Paramilitary and Dissident Activity", "paragraphs": [], "subsections": [{"section_title": "Paramilitary Concerns", "paragraphs": ["Experts contend that the major paramilitary organizations active during the Troubles are now committed to the political process and remain on cease-fire. However, the apparent continued existence of such groups and their engagement in criminality worries many in both the unionist and nationalist communities. In response to the heightened concerns about paramilitary activity in Northern Ireland in 2015, former Secretary of State for Northern Ireland Villiers commissioned a study on the status of republican and loyalist paramilitary groups. This review was drafted jointly by the PSNI and MI5 (the UK's domestic intelligence service) and reviewed by three independent observers. Published in October 2015, the assessment found that", "all the main paramilitary groups operating during the Troubles still existed, but they remained on cease-fire, and the leadership of each group, \"to different degrees,\" is \"committed to peaceful means to achieve their political objectives.\" although such paramilitary groups continue to \"organize themselves along militaristic lines,\" none are planning or conducting terrorist attacks and they do not have significant capabilities to do so. at the same time, individual members of paramilitary groups still represent a threat to national security. Some have committed murders or other violence, and many are engaged in organized crime. None of the leaderships have complete control over the activities of their members, and \"there is regular unsanctioned activity including behavior in direct contravention of leadership instruction.\"", "The Fresh Start Agreement sought to address some of the most pressing concerns about the main paramilitary groups in Northern Ireland. Among the measures, the accord established", "a new set of principles for members of the Executive and Assembly that commits them to work toward the disbandment of all paramilitary organizations and their structures, to challenge paramilitary attempts to control communities, and to take no instructions from such groups; an independent three-member panel tasked with recommending a strategy for disbanding paramilitary groups; a new, four-member international body to monitor paramilitary activity and to report annually on progress toward ending paramilitary activity; and a cross-border Joint Agency Task Force to bring together officials from the PSNI and UK and Irish police, intelligence, and tax agencies to tackle paramilitarism and organized crime throughout the island of Ireland.", "Some Northern Ireland politicians and analysts suggested that some of these proposals did not go far enough. Press reports indicated that some unionists were unhappy that the new international paramilitary monitoring body\u2014unlike the former Independent Monitoring Commission (IMC)\u2014would not have the power to recommend the exclusion of political parties from the Assembly should it be determined that the parties are not living up to their commitments to exclusively peaceful means. As part of the Fresh Start Agreement, the UK government pledged a total of \u00a3188 million (roughly $267 million) more in security-related spending, with the bulk of this amount (\u00a3160 million, or $228 million) going to the PSNI to improve its ability to tackle dissident groups, remaining paramilitarism, and organized crime.", "In June 2016, the so-called Three Person Panel published its report with 43 recommendations for disbanding paramilitary groups; in July 2016, Northern Ireland's Executive set out an action plan on tackling paramilitary activity, criminality, and organized crime based on the panel's work. In September 2016, the British and Irish governments agreed to establish the four-person Independent Reporting Commission (IRC), tasked with monitoring progress on ending paramilitary activity, including the Executive's new action plan. In December 2016, the British and Irish governments named one representative each to the IRC and the Northern Ireland Executive named two. The IRC released its first annual report in October 2018; the IRC assessed that although some progress has been made, paramilitarism remains a \"stark reality of life in Northern Ireland\" and that the lack of political decisionmaking institutions since January 2017 has negatively affected efforts to tackle paramilitarism."], "subsections": []}, {"section_title": "The Dissident Threat", "paragraphs": ["Security assessments indicate that the threat posed by dissident republican and loyalist groups not on cease-fire and opposed to the 1998 peace agreement remains serious. The aforementioned October 2015 review of paramilitary groups maintained that the most significant terrorist threat in Northern Ireland was posed not by the groups evaluated in that report but rather by dissident republicans. The review described dissident loyalist groups as posing another, albeit \"smaller,\" threat. Some loyalists are heavily engaged in a wide range of serious crimes.", "At the same time, experts note that dissident groups do not have the same capacity to mount a sustained terror campaign as the IRA did between the 1970s and the 1990s. Most of the dissident republican groups are small in comparison to the IRA during the height of the Troubles. Moreover, the actual number of individuals actively involved has not grown significantly in recent years, although such dissident republican groups have proliferated.", "UK security services assert that there are currently four main dissident republican groups: the Continuity IRA (CIRA); \u00d3glaigh na h\u00c9ireann (\u00d3NH); Arm na Poblachta (ANP), and the New IRA (which reportedly was formed in 2012 and brought together the Real IRA, the Republican Action Against Drugs, or RAAD, and a number of independent republicans). These groups have sought to target police officers, prison officers, and other members of the security services in particular. Between 2009 and 2017, dissident republicans were responsible for the deaths of two PSNI officers, two British soldiers, and two prison officers. ", "In January 2018, \u00d3NH declared itself on cease-fire. However, the other groups remain active, and authorities warn that the threat posed by the New IRA in particular is severe. The New IRA has carried out about 40 attacks since 2012. Police believe the New IRA may have been responsible for the January 2019 car bomb that exploded in Londonderry (or Derry). Some experts are concerned that dissident republicans could seek to step up attacks in an effort to exploit the divisions due to Brexit."], "subsections": []}]}, {"section_title": "Economic Issues", "paragraphs": ["Many assert that one of the best ways to ensure a lasting peace in Northern Ireland and deny dissident groups new recruits is to promote continued economic development and equal opportunity for Catholics and Protestants. Northern Ireland's economy has made significant advances since the 1990s. Between 1997 and 2007, Northern Ireland's economy grew an average of 5.6% annually (marginally above the UK average of 5.4%). Unemployment decreased from over 17% in the late 1980s to 4.3% by 2007. The 2008-2009 global recession, however, significantly affected Northern Ireland. Economic recovery has been slow in Northern Ireland, although it appears to have gained momentum since 2017. In the four quarters ending September 2018, Northern Ireland's economic activity grew by approximately 2.1%, as compared to 1.5% growth for the UK overall. Unemployment in Northern Ireland is currently 3.8%, lower than the UK average (4.0%), and that in the Republic of Ireland (5.3%) and the EU (6.7%).", "Income earned and living standards in Northern Ireland remain below the UK average. Of the UK's 12 economic regions, Northern Ireland had the third-lowest gross value added per capita in 2017 (\u00a321,172), considerably below the UK's average (\u00a327,555). Northern Ireland also has both a high rate of economic inactivity (27%) and a high proportion of working-age individuals with no qualifications. Studies indicate that the historically poorest areas in Northern Ireland (many of which bore the brunt of the Troubles) remain so and that many of the areas considered to be the most deprived are predominantly Catholic.", "At the same time, Northern Ireland has made strides in promoting equality in its workforce. The gap in economic activity rates between Protestants and Catholics has shrunk considerably since 1992 (when there was a 10 percentage point difference) and has largely converged in recent years (in 2017, the economic activity rate was 70% for Protestants and 67% for Catholics). In addition, the percentage point gap in unemployment rates between the two communities has decreased from 9% in 1992 to 0% in 2017.", "To improve Northern Ireland's economic recovery and strengthen its long-term performance, Northern Ireland leaders are seeking to promote export-led growth, decrease Northern Ireland's economic dependency on the public sector by growing the private sector, and attract more foreign direct investment. Reducing Northern Ireland's economic dependency on the public sector (which accounts for about 70% of the region's GDP and employs roughly 30% of its workforce) and devolving power over corporation tax from London to Belfast to help increase foreign investment were key issues addressed in the cross-party negotiations in both 2014 and 2015. In 2015, the UK passed legislation to permit the devolution of corporation tax-setting power to the Northern Ireland Assembly (subject to certain financial conditions). The Fresh Start Agreement set April 2018 as the target date for introducing a devolved corporate tax rate of 12.5% in Northern Ireland (the same rate as in the Republic of Ireland). In the absence of devolved government, however, reducing Northern Ireland's corporate tax rate is on hold."], "subsections": []}, {"section_title": "Possible Implications of Brexit55", "paragraphs": ["The UK is scheduled to exit the EU on March 29, 2019. Many officials and analysts are concerned about Brexit's possible implications for Northern Ireland's peace process, economy, and, in the longer term, constitutional status. At the time of the 1998 Good Friday Agreement, the EU membership of both the United Kingdom and the Republic of Ireland was viewed as essential to underpinning the peace process by providing a common European identity for both unionists and nationalists. In the years since, as security checkpoints were removed in accordance with the peace agreement, and because both the UK and Ireland belonged to the EU's single market and customs union, the circuitous 300-mile land border between Northern Ireland and Ireland effectively disappeared. This served as an important political symbol on both sides of the sectarian divide and helped produce a dynamic cross-border economy. Preventing a \"hard\" land border (with customs checks and physical infrastructure) on the island of Ireland has been a key goal, as well as a major stumbling block, in negotiating and finalizing the UK's withdrawal agreement with the EU."], "subsections": [{"section_title": "The Irish Border, the Peace Process, and Status Issues", "paragraphs": ["Many on both sides of Northern Ireland's sectarian divide have expressed concerns that Brexit could lead to a return of a hard border with the Republic of Ireland and destabilize the fragile peace in Northern Ireland, in part because it could pose a considerable security risk. During the Troubles, the border regions were considered \"bandit country,\" with smugglers and gunrunners, and checkpoints were frequently the site of sectarian conflict, especially between British soldiers and the IRA. PSNI Police Chief George Hamilton warns that if physical border posts were reinstated as a result of Brexit, they would be seen as \"fair game\" by violent dissident republicans opposed to the peace process, endangering the lives of police and customs officers. Such renewed violence not only would threaten the security and stability of the border regions but also could put the entire peace process at risk. In addition, establishing checkpoints would pose logistical difficulties given that estimates suggest there are upward of 275 crossing points along the Northern Ireland-Ireland border.", "UK, Irish, and EU leaders have asserted repeatedly that they do not want a hard border and have sought to prevent such a possibility. Resolving the border issue, however, has presented one of the most difficult challenges in UK-EU negotiations on Brexit. Analysts contend that ensuring an open border has been complicated by the UK government's pursuit of a largely \"hard Brexit\" that would keep the UK outside of the EU's single market and customs union.", "In December 2017, the UK and the EU reached an agreement in principle on main aspects of three priority issues in the withdrawal negotiations (citizens' rights, financial settlement, and Ireland/Northern Ireland). Among other measures related to Northern Ireland, the UK pledged to uphold the Good Friday Agreement, avoid a hard border (and any physical infrastructure), and protect North-South cooperation on the island of Ireland. Crucially, the UK also committed to the so-called backstop\u2014a mechanism designed to guarantee that the border would remain invisible under all circumstances.", "Finding agreement on precisely how this backstop would function, however, did not prove easy for UK and EU negotiators. In November 2018, the UK and the EU concluded a draft withdrawal agreement (outlining the terms of the \"divorce\") and a draft political declaration (setting out the broad contours of the future UK-EU relationship). The withdrawal agreement contains a 21-month transition period (in which the UK would cease to be an EU member but would continue to apply EU rules while negotiations continue on the details of the UK's future political and economic relationship with the EU). The backstop arrangement ultimately reached in the withdrawal agreement essentially would keep all of the UK in a customs union with the EU (with areas of deeper regulatory alignment between Northern Ireland and the EU) pending agreement on a more preferable solution in forthcoming negotiations on the future UK-EU relationship.", "Various elements of the withdrawal agreement have faced opposition in the UK Parliament, but the backstop has emerged as the primary sticking point. Many critics argued that the backstop, if triggered, would tie the UK to an EU customs union indefinitely, prohibit the UK from concluding its own free trade deals with other countries, and leave the UK in the position of having to accept EU rules without having a say in EU decisionmaking. The DUP warned that the backstop would create regulatory divergence between Northern Ireland and the rest of the UK and thus would threaten the constitutional integrity of the United Kingdom. UK officials maintain that it will never be necessary to implement the backstop.", "On January 15, 2019, the UK Parliament decisively rejected the withdrawal agreement by a vote of 432 to 202. This has intensified fears about a disorderly \"no deal\" scenario in which the UK would \"crash out\" of the EU at the end of March without a transition period and settled arrangements in place. Prime Minister May has approached the EU about devising \"alternative arrangements\" to the backstop or modifying it in an effort to secure the UK Parliament's approval. UK officials have proposed possibly imposing a time limit on the backstop or a mechanism by which the UK could withdraw from the backstop. The EU insists that the backstop and the withdrawal agreement are not open for renegotiation, and press reports suggest that the UK government has been unsuccessful to date in gaining any EU concessions. Prime Minister May intends to put the withdrawal agreement to another vote in the UK Parliament on March 12, 2019. If Parliament again fails to approve the withdrawal agreement, it is then expected to consider whether to back \"no deal\" or direct the government to seek to extend the March 29 deadline. Extending the deadline for the UK's departure from the EU would require the unanimous agreement of the other 27 EU member states.", "Although the UK, the EU, and Ireland have escalated contingency planning for a \"no deal\" Brexit, the Irish government continues to resist making any plans for physical infrastructure on the Irish border. The Irish government maintains that there will be no hardening of the Irish border under any circumstances and insists that an arrangement similar to the backstop would have to be negotiated even if there is no approved UK withdrawal agreement. Irish Prime Minister Varadkar admits that a \"no deal\" scenario would entail \"difficult discussions\" with the EU and the UK. Some analysts assert, however, that in the event of a \"no deal\" Brexit, protecting the integrity of the single market will be an EU priority, which will necessitate customs checks and some sort of border infrastructure.", "Some \"Brexiteers\"\u2014or those in the UK who strongly favor a \"hard Brexit\"\u2014contend that the border issue is being exploited by the EU and those in the UK who would prefer a \"soft Brexit\" (in which the UK remains inside the EU single market and/or customs union). Some Brexiteers have ruminated whether the Good Friday Agreement has outlived its usefulness, especially in light of the stalemate in reestablishing Northern Ireland's devolved government. The Prime Minister's office responded that the UK government remains \"fully committed\" to the Good Friday Agreement.", "Brexit also has revived questions about Northern Ireland's constitutional status within the UK in the longer term. Sinn Fein argues that \"Brexit changes everything\" and could generate greater support for a united Ireland. At the same time, most experts believe that the conditions required to hold a \"border poll\" on Northern Ireland's constitutional status do not currently exist. Opinion polls indicate that a majority of people in Northern Ireland continue to support Northern Ireland's position within the UK, although some surveys suggest that a \"damaging Brexit\" could increase support for a united Ireland. According to one recent press report, concerns appear to be growing within the UK government that a \"no deal\" Brexit could change the dynamics and lead to a border poll on Irish unification."], "subsections": []}, {"section_title": "Economic Concerns", "paragraphs": ["Many experts contend that Brexit could have serious negative economic consequences for Northern Ireland. According to a UK parliamentary report, Northern Ireland depends more on the EU market (and especially that of the Republic of Ireland) for its exports than does the rest of the UK. Approximately 52% of Northern Ireland exports go to the EU, including 38% to the Republic of Ireland. UK government statistics indicate that Ireland is the top external export and import partner for Northern Ireland. Analysts worry in particular that a \"hard Brexit\" outside of the EU's single market and customs union could jeopardize Northern Ireland's extensive cross-border trade with Ireland, as well as integrated labor markets and industries that operate on an all-island basis. Some analysts note that access to the EU single market has been one reason for Northern Ireland's success in attracting foreign direct investment, and they suggest that Brexit could deter future investment. Post-Brexit, Northern Ireland also stands to lose EU regional funding (roughly $1.3 billion between 2014 and 2020) and agricultural aid (direct EU farm subsidies to Northern Ireland are nearly $375 million annually).", "UK officials assert that the government is determined to safeguard Northern Ireland's interests and \"make a success of Brexit\" for Northern Ireland. UK and DUP leaders maintain that the rest of the UK is more important economically, historically, and culturally to Northern Ireland than the EU. They note, for example, that the UK is the most significant market for businesses in Northern Ireland, with sales to other parts of the UK worth one and a third times the value of all Northern Ireland exports and nearly four times the value of exports to Ireland (in 2016). UK and DUP officials insist that Northern Ireland will continue to trade with the EU (including Ireland) and that Brexit offers new economic opportunities for Northern Ireland outside the EU."], "subsections": []}]}]}, {"section_title": "U.S. Policy", "paragraphs": ["Successive U.S. Administrations have viewed the Good Friday Agreement as the best framework for a lasting peace in Northern Ireland. The Clinton Administration was instrumental in helping the parties forge the agreement, and the George W. Bush Administration strongly backed its full implementation. U.S. officials welcomed the end to the IRA's armed campaign in 2005 and the restoration of the devolved government in 2007. ", "The Obama Administration remained engaged in the peace process. In October 2009, then-U.S. Secretary of State Hillary Clinton visited Northern Ireland, addressed the Assembly, and urged Northern Ireland's leaders to reach an agreement on devolving policing and justice powers. In February 2010, President Obama welcomed the resulting Hillsborough Agreement. In June 2013, President Obama visited Northern Ireland in the context of a G8 summit meeting and noted that the United States would always \"stand by\" Northern Ireland. The Obama Administration welcomed the conclusion of both the December 2014 Stormont House Agreement and the November 2015 Fresh Start Agreement.", "Like its predecessors, the Trump Administration has offered support and encouragement to Northern Ireland. In March 2017, Vice President Mike Pence noted that, \"the advance of peace and prosperity in Northern Ireland is one of the great success stories of the past 20 years\" and paid tribute to Senator Mitchell and his role in the peace process. In November 2017, the State Department spokesperson expressed regret at the impasse in discussions to restore Northern Ireland's power-sharing institutions, urged continued dialogue, and asserted that the United States remained \"ready to support efforts that ensure full implementation of the Good Friday Agreement and subsequent follow-on cross-party agreements.\"", "Many Members of Congress have actively supported the peace process for decades. Encouraged by progress on police reforms, several Members prompted the Bush Administration in December 2001 to lift a ban on contacts between the Federal Bureau of Investigation and the new PSNI. Congress had initiated this prohibition in 1999 because of the former RUC's human rights record. More recently, congressional hearings have focused on the peace process, policing reforms, human rights, and the status of public inquiries into several past murders in Northern Ireland in which collusion between the security forces and paramilitary groups is suspected; these murders have included the 1989 slaying of Belfast attorney Patrick Finucane and the 1997 killing of Raymond McCord, Jr. Some Members of Congress have urged the Trump Administration to name a special envoy for Northern Ireland to signal that the United States remains committed to the region, especially in light of the stalemate in reestablishing the devolved government.", "On the economic front, the United States is an important source of investment for Northern Ireland. According to one study, foreign direct investment by U.S.-based companies in Northern Ireland totaled \u00a31.48 billion (nearly $2.1 billion) between 2003-2004 and 2015-2016 and was responsible for creating 13,875 jobs. Between 2009 and 2011, a special U.S. economic envoy to Northern Ireland worked to further economic ties between the United States and Northern Ireland and to underpin the peace process by promoting economic prosperity."], "subsections": [{"section_title": "International Fund for Ireland", "paragraphs": ["The United States has provided aid to the region through the International Fund for Ireland (IFI), which was created in 1986. Although the IFI was established by the British and Irish governments based on objectives in the Anglo-Irish Agreement of 1985, the IFI is an independent entity. The IFI supports economic regeneration and social development projects in areas most affected by the civil unrest in Northern Ireland and in the border areas of the Republic of Ireland; in doing so, it has also sought to foster contact, dialogue, and reconciliation between nationalists and unionists. The United States has contributed more than $540 million since the IFI's establishment, roughly half of total IFI funding. The EU, Canada, Australia, and New Zealand also have provided funding for the IFI. During the 1980s and 1990s, U.S. appropriations for the IFI averaged around $23 million annually; in the 2000s, U.S. appropriations averaged $18 million each year.", "According to the fund, the vast majority of projects that it has supported with seed funding have been located in disadvantaged areas that have suffered from high unemployment, a lack of facilities, and little private sector investment. In its first two decades, IFI projects in Northern Ireland and the southern border counties focused on economic and business development and sectors such as tourism, agriculture, and technology. In 2006, amid an improved economic situation, the IFI released a five-year \"Sharing this Space\" program, in which the IFI announced that it would began shifting its strategic emphasis away from economic development and toward projects aimed at promoting community reconciliation and overcoming past divisions.", "Successive U.S. Administrations and many Members of Congress have backed the IFI as a means to promote economic development and encourage divided communities to work together. Support for paramilitary groups in Northern Ireland has traditionally been strongest in communities with high levels of unemployment and economic deprivation. Thus, many observers have long viewed the creation of jobs and economic opportunity as a key part of resolving the conflict in Northern Ireland and have supported the IFI as part of the peace process. Many U.S. officials and Members of Congress also encouraged the IFI to place greater focus on reconciliation activities, and were pleased with the IFI's decision to do so in 2006.", "However, critics have questioned the IFI's effectiveness, viewing some IFI projects as largely wasteful and unlikely to bridge community divides in any significant way. Others suggest that the IFI was never intended to continue in perpetuity. Some also argue that it is time to move the U.S. relationship with Ireland and Northern Ireland onto a more mature and equal footing, and that U.S. development assistance undermines this goal.", "Between FY2006 and FY2011, neither the Bush nor the Obama Administration requested funding for the IFI in the President's annual budget request. Administration officials maintained that the lack of a funding request for the IFI did not signal a decreased U.S. commitment to Northern Ireland; rather, they asserted that the IFI was expected to begin winding down as an organization. The 2006 \"Sharing this Space\" program was intended as the \"last phase\" of the IFI, and in its 2009 Annual Report, the IFI stated that it would no longer be seeking contributions from its donors. Despite the lack of an Administration request, Congress continued to appropriate funding for the IFI between FY2006 and FY2010 ($17 million for FY2010), viewing these contributions as an important and tangible sign of the ongoing U.S. commitment to the peace process.", "In FY2011, however, amid the U.S. economic and budget crisis, some Members of Congress began to call for an end to U.S. funding for the IFI as part of a raft of budget-cutting measures. Many asserted that U.S. contributions to the IFI were no longer necessary given Ireland and Northern Ireland's improved political and economic situation (relative to what it was in the 1980s). The sixth FY2011 continuing resolution ( P.L. 112-6 ) did not specify an allocation for the IFI, nor did the final FY2011 continuing resolution ( P.L. 112-10 , the Department of Defense and Full-Year Continuing Appropriation Act of 2011).", "Other Members of Congress continued to support U.S. funding for the IFI, noting the financial woes in Ireland and Northern Ireland stemming from the 2008-2009 global recession and increasing concerns about the possibility of dissident violence, and ongoing sectarian tensions in the region. They pointed out that in light of these evolved circumstances, the IFI itself reversed course, announcing it would continue functioning for the near term. Press reports indicated that the British and Irish governments also supported the IFI's continuation, as did Northern Ireland's Executive. Subsequent to the FY2011 budget deliberations, the Obama Administration allocated $2.5 million from FY2011 Economic Support Fund (ESF) resources to the IFI in the form of a grant for specific IFI activities to support peace and security in Ireland and Northern Ireland.", "For FY2012, the Obama Administration requested $2.5 million in ESF funding for the IFI in its annual budget request, asserting that \"a permanent political settlement in Northern Ireland remains a priority foreign policy goal of the United States\" and that \"cross-community relations continue to be hampered by a lack of economic development and high unemployment.\" The FY2012 budget request also noted an increase in sectarian-driven hate crimes and paramilitary-style shootings and assaults in Northern Ireland, and that U.S. assistance would seek to counter these negative trends \"by addressing the root causes of violence and intolerance.\" For similar reasons, in its FY2013 and FY2014 budget requests the Administration proposed $2.5 million for the IFI, as part of its ESF request for the Europe and Eurasia region aimed at promoting peace and reconciliation programs. The Obama Administration did not request funding for the IFI in its subsequent annual budget requests.", "According to the U.S. Agency for International Development (USAID), U.S. funding provided between FY2011 and FY2014 enabled the United States to meet an existing $7.5 million commitment to the IFI's Peace Impact Program, targeting those communities in Ireland and Northern Ireland most prone to dissident recruitment and activity. In June 2016, the Obama Administration allocated $750,000 from FY2015 ESF resources to the IFI in the form of a grant to support activities aimed at promoting a sustained peace in Northern Ireland and the border counties of Ireland; examples of programs to be supported included cross-community workshops on violence prevention and job training for unemployed youth in communities with high rates of joblessness and sectarian violence. For similar purposes as described for FY2015, the Obama Administration allocated $750,000 from FY2016 ESF funds to the IFI in the form of a grant in December 2016, and the Trump Administration allocated $750,000 from FY2017 ESF funds to the IFI in August 2018, also in the form of a grant. The Trump Administration did not request funding for the IFI in its FY2018 or FY2019 budget requests."], "subsections": []}]}]}}
{"id": "R42037", "title": "SBA Surety Bond Guarantee Program", "released_date": "2019-02-22T00:00:00", "summary": ["The Small Business Administration's (SBA's) Surety Bond Guarantee Program is designed to increase small businesses' access to federal, state, and local government contracting, as well as private-sector contracts, by guaranteeing bid, performance, and payment bonds for small businesses that cannot obtain surety bonds through regular commercial channels. The program guarantees individual contracts of up to $6.5 million, and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary. The SBA's guarantee currently ranges from 80% to 90% of the surety's loss if a default occurs. In FY2018, the SBA guaranteed 10,800 bid and final surety bonds with a total contract value of nearly $6.5 billion.", "A surety bond is a three-party instrument between a surety (who agrees to be responsible for the debt or obligation of another), a contractor, and a project owner. The agreement binds the contractor to comply with the contract's terms and conditions. If the contractor is unable to successfully perform the contract, the surety assumes the contractor's responsibilities and ensures that the project is completed. Surety bonds encourage project owners to contract with small businesses that may not have the credit history or prior experience of larger businesses and may be at greater risk of failing to comply with the contract's terms and conditions.", "Surety bonds are important to small businesses interested in competing for federal contracts because the federal government requires prime contractors\u2014prior to the award of a federal contract exceeding $150,000 for the construction, alteration, or repair of any building or public work of the United States\u2014to furnish a performance bond issued by a surety satisfactory to the contracting officer in an amount that the officer considers adequate to protect the government.", "P.L. 112-239, the National Defense Authorization Act for Fiscal Year 2013, increased the program's bond limit to $6.5 million, or up to $10 million if a federal contracting officer certifies that such a guarantee is necessary. The limit had been $2 million since 2000, with a temporary increase from February 17, 2009, through September 30, 2010, to $5 million, and up to $10 million if a federal contracting officer certified in writing that such a guarantee was necessary. Advocates of raising the program's bond limit argued that doing so would increase contracting opportunities for small businesses and bring the limit more in line with limits of other small business programs, such as the 8(a) Minority Small Business and Capital Ownership Development Program and the Historically Underutilized Business Zone (HUBZone) Program. Opponents argued that raising the limit could lead to higher amounts being guaranteed by the SBA and, as a result, increase the risk of program losses.", "This report examines the program's origin and development, including (1) the decision to supplement the original Prior Approval Program with the Preferred Surety Bond Guarantee Program that initially provided a lower guarantee rate (not to exceed 70%) than the Prior Approval Program (not to exceed 80% or 90%, depending on the size of the contract and the type of small business) in exchange for allowing preferred sureties to issue SBA-guaranteed surety bonds without the SBA's prior approval; (2) P.L. 114-92, the National Defense Authorization Act for Fiscal Year 2016, which increased the Preferred Surety Bond Guarantee Program's guarantee rate from not to exceed 70% to not to exceed 90% of losses; and (3) the decision to increase the program's bond limit."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Congressional Interest in Surety Bonds", "paragraphs": ["The Small Business Administration (SBA) administers several programs to support small businesses, including loan guaranty programs to enhance small business access to capital; contracting programs to increase small business opportunities in securing federal contracts; direct loan programs for businesses, homeowners, and renters to assist their recovery from natural disasters; and small business management and technical assistance training programs to assist business formation and expansion. Congressional interest in these programs has increased in recent years, primarily because assisting small business is viewed as a means to enhance economic growth.", "The SBA's Surety Bond Guarantee Program has been operational since April 1971. It is designed to increase small business' access to federal, state, and local government contracting, as well as private-sector contracting, by guaranteeing bid, performance, payment, and specified ancillary bonds \"on contracts \u2026 for small and emerging contractors who cannot obtain bonding through regular commercial channels.\" The program guarantees individual contracts of up to $6.5 million, and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary. The $6.5 million limit is periodically adjusted for inflation. The SBA's guarantee currently ranges from 80% to 90% of the surety's loss if a default occurs.", "In FY2018, the SBA guaranteed 10,800 bid and final surety bonds (a payment bond, performance bond, or both a payment and performance bond) with a total contract value of nearly $6.5 billion. Although the surety industry does not report the total value of the bonds it issues each year, estimates based on the total amount of premiums collected by the private sector in recent years suggest that the SBA's Surety Bond Guarantee Program represents, by design, a relatively small percentage of the market for surety bonds (from about 1.1% to 6.7% of the value of surety bonds issued by the private sector).", "A surety bond is a three-party instrument between a surety (that agrees to be responsible for the debt or obligation of another), a contractor, and a project owner. The agreement binds the contractor to comply with the contract's terms and conditions. If the contractor is unable to successfully perform the contract, the surety assumes the contractor's responsibilities and ensures that the project is completed. The surety bond reduces the risk of contracting.", "Surety bonds are viewed as a means to encourage project owners to contract with small businesses that may not have the credit history or prior experience of larger businesses and are considered to be at greater risk of failing to comply with the contract's terms and conditions. The four general types of surety bonds are ", "bid bonds guarantee that the bidder on a contract will enter into the contract and furnish the required payment and performance bonds if awarded the contract, payment bonds guarantee that suppliers and subcontractors will be paid for work performed under the contract, performance bonds guarantee that the contractor will perform the contract in accordance with its terms and conditions, and ancillary bonds ensure completion of requirements outside of performance or payment, such as maintenance.", "Surety bonds are important to small businesses interested in competing for a federal contract because the federal government requires prime contractors, prior to the award of a federal contract exceeding $150,000 for the construction, alteration, or repair of any building or public work of the United States, to furnish a performance bond issued by a surety satisfactory to the officer awarding the contract, and in an amount the contracting officer considers adequate, to protect the government. Prime contractors are also required to post a payment bond with a surety satisfactory to the contracting officer for the protection of all persons supplying labor and material in carrying out the work provided for in the contract. Both bonds become legally binding upon award of the contract and their \"penal amounts,\" or the maximum amount of the surety's obligation, must generally be 100% of the original contract price plus 100% of any price increases. Most state and local governments have adopted similar legislation, often called \"Little Miller Acts,\" referencing the Miller Act of 1935 that established the federal requirement. Many private project owners also require contractors to furnish a surety bond before awarding them a contract.", "This report opens with an examination of the SBA's Surety Bond Guarantee Program's legislative origin and provides a historical summary of the major issues that have influenced the program's development, including ", "the decision to supplement the original Prior Approval Program with a Preferred Surety Bond Guarantee Program (PSB program) that initially provided SBA-approved sureties a lower guarantee rate (not to exceed 70%) than those participating in the Prior Approval Program (not to exceed 80% or 90%, depending on the size of the contract and the type of small business) in exchange for allowing preferred sureties to issue SBA-guaranteed bonds to small businesses without the SBA's prior approval; P.L. 114-92 , the National Defense Authorization Act for Fiscal Year 2016, which increased the PSB program's guarantee rate from not to exceed 70% to not to exceed 90% of losses; and the decision to increase the program's bond limit. ", "It then examines the program's current eligibility standards and requirements, and provides performance statistics, including the number and amount of bond guarantees issued annually. ", "In addition, it provides data concerning the number and amount of final bonds guaranteed from FY1971 through FY2017 (see Table A-1 ) and for bid and final bonds combined from FY2000 through FY2017 (see Table A-2 )."], "subsections": []}, {"section_title": "Legislative Origin", "paragraphs": ["P.L. 91-609, the Housing and Urban Development Act of 1970, authorized the SBA's Surety Bond Guarantee Program. The act amended Title IV of the Small Business Investment Act of 1958 (P.L. 85-699, as amended) to provide the SBA authority to guarantee any surety against loss as the result of a breach of the terms of a bid bond, payment bond, or performance bond by a principal on any contract up to $500,000. The act specified that (1) the principal of the bond is a small business, (2) the bond is required as a condition of bidding on the contract or serving as a prime contractor or subcontractor on the project, (3) the small business is not able to obtain such bond on reasonable terms and conditions without the guarantee, (4) the SBA determines that there is a reasonable expectation that the small business will perform the covenants and conditions of the contract, (5) the contact meets SBA requirements concerning the feasibility of the contract being completed successfully and at a reasonable cost, and (6) the bond's terms and conditions are reasonable in light of the risks involved and the extent of the surety's participation. The act also required that the SBA's guarantee not exceed 90% of the loss incurred by the surety in the event of a breach of the bond's terms and conditions by the small business.", "The SBA was authorized to finance the program through the Leasing Guarantee Revolving Loan Fund within the Department of the Treasury, which renamed that fund the Lease and Surety Bond Guarantee Revolving Fund. The act authorized the transfer of $5 million from the SBA's Business Loan and Investment Revolving Fund to the Lease and Surety Bond Guarantee Revolving Fund, raising that fund's capital to $10 million available without fiscal year limitation, to support both the lease guarantee program and the surety bond guarantee program. The act also recommended that the program be appropriated up to $1.5 million each fiscal year for three fiscal years after its date of enactment (December 31, 1970) if additional funding were needed to offset the program's expenses.", "The SBA was directed to administer the program \"on a prudent and economically justifiable basis.\" It was authorized to offset the program's administrative costs by charging a uniform annual fee, subject to periodic review to ensure that the fee is the \"lowest fee that experience under the program shows to be justified,\" and uniform fees for the processing of applications for guarantees. The SBA also was authorized to \"obligate the surety to pay the Administration such portions of the bond fee as the Administration determines to be reasonable in light of the relative risks and costs involved.\"", "The program's sponsors argued in 1970 that \"there is widespread evidence that a significant number of construction contracting organizations find varying degrees of difficulty in obtaining surety bonds\" and that \"the major share of these organizations are small businesses, and many of them are headed by minority groups.\" They argued that the Surety Bond Guarantee Program would \"facilitate the entry and advancement of small and minority contractors in the construction business.\" At that time, witnesses at congressional hearings testified that surety bonds were not necessarily required for most private sector construction contracts, but they were required for most public sector construction contracts."], "subsections": []}, {"section_title": "Initial Demand and Costs Exceed Expectations", "paragraphs": ["The SBA implemented the program on a pilot basis on April 5, 1971, in Kansas City. The program later was expanded to Los Angeles and became nationwide on September 2, 1971. Initially, the SBA guaranteed 90% of the amount of all of the surety bonds in the program and charged sureties 10% of the bond premium paid to the surety company by the contractor. It also charged small business applicants for payment and performance bonds 0.2% of the contract price upon their obtaining the contract. It did not charge for the processing of bid bonds, rejected applications, or applications that did not result in a contract award. Contractors wishing to participate in the program were required to have less than $750,000 in gross annual receipts for the past fiscal year or to have averaged less than $750,000 in gross annual receipts over the past three fiscal years. This size standard was more stringent than for other SBA programs, and it was designed \"to reach that segment of small business which was obviously intended to benefit from the legislation as evidenced by the limit of $500,000 on any one contract.\"", "Demand for the program exceeded the SBA's expectations. In 1971, the SBA estimated that it would guarantee about 8,000 contracts amounting to about $540 million from FY1972 through FY1974. Instead, it guaranteed 16,118 contracts amounting to nearly $1.1 billion (see Table A-1 in the Appendix). Because the demand for the program exceeded expectations and the initial fees proved to be insufficient to recoup the program's expenses, in 1974, the SBA requested an additional $25 million for the program. The SBA argued that the additional funds were necessary to take into account the program's projected growth and to establish a reserve fund \"to protect against having to suspend [the] program in the fact of more rapid growth than is projected.\"", "In response to the SBA's request for additional funding for the program, Congress held congressional hearings to reassess the need for the program and to explore options concerning how to finance the program's proposed expansion. The financing discussions focused on the relative merits of relying primarily on higher fees to increase the program's revenue, reductions in the guarantee percentage to reduce the program's expenses, or additional appropriations to finance the program's proposed expansion. Although the SBA has periodically increased the program's fees and later instituted a tiered system of guarantee percentages, historically, the SBA has tried to keep the program's fees as low as economically feasible and the guarantee percentage as high as economically feasible to encourage the program's use. As an SBA official testified before Congress in 1975:", "SBA's loss exposure could be reduced by a decrease in the guarantee extended to sureties from 90% to 80%. Before proceeding with this recommendation, a thorough analysis will have to be made of the adverse effect on the willingness of sureties to participate in the program which would result from the increase from 10% to 20% of the sureties' share of the loss potential. ", "An increase in contractor's fees would obviously be beneficial to the operating income of the program, but would also increase the bids which small business-contractors would have to make, thus placing them at a competitive disadvantage with contractors with more ready access to bonding.", "Moreover, as mentioned previously, the SBA is required by statute to ensure that the fees are the lowest \"that experience under the program shows to be justified.\"", "Determining the program's appropriate size became a recurring theme at congressional hearings, and continues to be of congressional interest today. For example, Congress has regularly requested testimony from representatives of the surety bond industry and various construction organizations concerning the extent to which the program is necessary to assist small businesses generally, and minority-owned small businesses in particular, in gaining access to surety bonds. Congress has also periodically asked the Government Accountability Office (GAO) to examine the need for the SBA's surety bond guarantee program and to recommend ways to improve the program's management. That testimony and GAO's reports have supported a need for the program, but, as will be discussed, have had somewhat limited usefulness in helping Congress determine the program's appropriate size.", "In 1974, Congress responded to the SBA's request for additional funding by passing P.L. 93-386 , the Small Business Amendments of 1974. It established a separate Surety Bond Guarantees Revolving Fund account (hereinafter Revolving Fund) within the Department of the Treasury to support the program. The act also increased the total contract amount that could be guaranteed to $1 million from $500,000 and recommended that the Revolving Fund receive $35 million in additional funding.", "The Ford Administration objected to providing additional appropriations for the Revolving Fund. Instead, the Administration recommended that the Revolving Fund receive a $20 million transfer from the SBA's Business Loan and Investment Revolving Fund. The transfer would provide the program access to additional capital without affecting the federal budget deficit. Congress approved the Administration's proposal.", "As shown in Table 1 , the Revolving Fund received $130.5 million in additional appropriations for FY1976 through FY1979 and continued to receive additional appropriations during the 1980s and 1990s. In addition, the program's bond limit was increased to $1.25 million from $1 million in 1986. As discussed below, the increased appropriations and bond limit were not sufficient to continue the program's growth. Instead, both the number and amount of final surety bonds guaranteed by the SBA began to slowly diminish. This general trend continued until the maximum individual surety contract amount was increased, first on a temporary basis by P.L. 111-5 , the American Recovery and Reinvestment Act of 2009, and later, on a permanent statutory basis, by P.L. 112-239 , the National Defense Authorization Act for Fiscal Year 2013.", "As shown in Table 1 , Congress did not appropriate funding for the Revolving Fund from FY2000 to FY2004, allowing the program to cover the cost of claim defaults through its reserve. Congress also increased the program's bond limit to $2 million from $1.25 million in 2000.", "Congress provided the Revolving Fund $2.9 million in FY2005, $2.86 million in FY2006, $2.86 million in FY2007, and $3 million in FY2008. During the 111 th Congress, P.L. 111-5 provided the Revolving Fund a separate appropriation of $15 million to support a temporary increase in the program's bond limit to $5 million, and up to $10 million if a federal contracting officer certified in writing that a guarantee in excess of $5 million was necessary, from $2 million. Those funds were in addition to the $2 million appropriation that had already been approved for FY2009.", "In FY2010, the Revolving Fund received $1 million. Congress has not approved appropriations for the Revolving Fund since then, noting that there have been sufficient funds in the program's reserve to cover the cost of anticipated claim defaults.", "As mentioned previously, the SBA relied primarily on increased appropriations to finance the program's expansion during the 1970s, but it also increased the program's fees charged to applicants and sureties. For example, in 1976, the SBA increased its fees to sureties to 20% from 10% of the bond premium, instituted a deductible clause on bond claims, and generally limited its approval for bid, participation, and performance bonds to $250,000 unless specified circumstances were met. In 1977, it increased the contractor applicant fee for payment and performance bonds to 0.5% from 0.2% of the contract price upon obtaining the contract. The program's current fee structure is discussed later in this report."], "subsections": []}, {"section_title": "Rapid Growth Is Not Sustained", "paragraphs": ["Both the number and amount of final surety bonds guaranteed by the SBA increased relatively rapidly during the 1970s (see Table A-1 in the Appendix). The number of final surety bonds guaranteed by the SBA increased from 1,339 in FY1972 to 20,095 in FY1979, and the amount guaranteed by the SBA increased from $94.4 million in FY1972 to $1.39 billion in FY1979.", "During the 1980s and 1990s, both the number and amount of final surety bonds guaranteed by the SBA generally declined, in both nominal and inflation-adjusted dollars. A review of congressional testimony during that period suggests that there was no single, discernible factor to account for the program's slow contraction. Because the demand for surety bonds tends to fluctuate with changes in the economy, the program might have been expected to contract somewhat during recessions, but the economy experienced periods of both economic growth and decline during the 1980s and 1990s. There also was no indication that the ability of small businesses to access surety bonds in the private marketplace without the SBA's assistance had materially improved, which, if that had been the case, might have contributed to the decline by reducing the number of small businesses applying for assistance.", "One possible contributing factor to the decline in SBA-guaranteed surety bonds during that period was the continuing reluctance of many surety companies to participate in the program, either because they did not view the program as particularly profitable or they \"had developed alternative methods to the program, such as requiring collateral or funds controls and underwriting programs based in part on credit scores, in order to write small and emerging contractors.\" Another possible contributing factor was a change in the way the program was perceived by congressional leaders and their reluctance to provide additional resources to continue the program's expansion.", "During the 1970s, at congressional hearings, witnesses praised the program as a great success in helping small businesses access surety bonds and compete for government contracts. During the 1980s and 1990s, congressional hearings focused less on the program's successes and more on its shortcomings. For example, in 1982, the chair of the Senate Committee on Small Business indicted that the program was subject to \"the most insidious types of fraud,\" including \"evidence of involvement of organized crime figures.\" In addition, reports by both GAO and the SBA's inspector general questioned the SBA's management of the program, arguing, among other things, that the SBA lacked useful underwriting guidelines for surety companies and adequate procedures for verifying applicants' information.", "During the 1980s, the SBA guaranteed, on average, 11,840 final surety bonds each fiscal year, with the SBA's share of those bonds' value averaging $1.0 billion. During the 1990s, the SBA guaranteed, on average, 5,859 final surety bonds each fiscal year, with the SBA's share of those bonds' value averaging $823 million. During the first decade of the 2000s, the SBA guaranteed, on average, about 1,802 final surety bonds each fiscal year, with the SBA's share of those bonds' value averaging about $385 million. ", "Since then, as indicated in Table 2 and Table A-1 , the number and amount of final surety bonds guaranteed by the SBA has generally increased. This increase is likely due to generally improving economic conditions and the increase in 2013 of the maximum individual contract amount that could be guaranteed from $2 million to $6.5 million, and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary."], "subsections": []}, {"section_title": "The Preferred Surety Bond Guarantee Program", "paragraphs": ["The surety bonding process begins when a contractor applies for a bond. As GAO has reported", "Surety companies are generally corporations that are licensed under various insurance laws and, under their charters, have legal power to act as a surety (making themselves responsible for another's obligations) for others. Most surety companies accept business only through independent agents and brokers. In screening a bond applicant, a surety attempts to measure the contractor's ability to undertake and complete the job. When the surety's evaluation of the contractor's acceptability to perform the contract is favorable, the surety underwrites the bond. If the surety does not provide a bond to the bond applicant, the appropriate forms are forwarded to SBA for consideration of a surety bond guarantee.", "Initially, the SBA surety guaranteed program's bonds were underwritten and issued by large, \"standard\" surety companies. However, these companies' participation in the program soon began to decline, reportedly because of the administrative burdens associated with the program, such as the SBA's requirement that sureties submit all bond applications to the SBA for review and approval. In addition, the administrative costs of dealing with relatively small bonds versus relatively large ones may have also played a role in the larger, standard surety companies leaving the program. As a congressional witness testified in 1976:", "You have a professional underwriter, who ... is going to be asked to spend 3 or 4 days looking into a $25,000 first-time application. There are many expenses involved. That same underwriter could very easily be writing four or five bonds for $10 million for contractors that everyone knows can perform. And it becomes a matter of how much time and resources can the surety industry devote to this type of business.", "Another reason may have been the outbreak of the Israeli-Egyptian War in 1973, which was followed by a tripling of oil prices and double-digit inflation. This led to the failure of many smaller contracting companies. In response to the economic downturn, many surety companies enhanced their underwriting standards to protect themselves from rising defaults. As a result, many of the larger surety companies became increasingly reluctant to participate in a program in which the profit margins were relatively small given the required paperwork and the program's limitation on the bond amount, and when the risk of defaults was at a historically high level.", "As standard sureties left the program, \"specialty\" surety companies filled the void. Initially, specialty sureties devoted almost all their business exclusively to SBA-guaranteed surety bonds. These companies later expanded their business into offering other high-risk bonds not normally handled by standard sureties. Specialty sureties typically required the contractor to provide collateral for the projects they bonded, and, in most cases, charged higher premiums than standard sureties.", "In 1982, the SBA invited officials from the Surety Association of America, representing the standard surety companies, to recommend ways to encourage their participation in the program. As mentioned previously, at that time, some specialty surety companies had been accused of associating with organized crime and GAO and the SBA's inspector general had reported fraud and mismanagement in the program. This may help to explain why the SBA was interested in encouraging the larger, more established surety companies to return to the program. The SBA also hoped that greater participation by the larger sureties would lead to lower premiums for small business contractors.", "During this outreach period, standard surety companies indicated a willingness to increase their participation in the program if the SBA would create a second special program, similar to the SBA's 7(a) loan guarantee program's Preferred Lenders Program. Under the proposal, a surety meeting specified qualification standards would be designed as a \"preferred surety\" and would be allowed to issue SBA-guaranteed surety bonds prior to receiving the SBA's approval. To participate in the preferred program, the surety's underwriting and administrative standards and procedures would be pre-approved by the SBA, and the surety's decisions would be subject to regular, annual audits. In addition, the SBA's reporting and access to records requirements would be retained. As a measure of their confidence in their own underwriting standards and claims decisions, the standard surety firms indicated that they would accept a 70% guarantee against losses as opposed to the then-allowed 80% or 90% guarantee against losses, as long as firms would not be required to seek the SBA's prior approval for underwriting decisions, bond administration, and claims procedures.", "Congress subsequently authorized the proposed Preferred Surety Bond Guarantee Program in P.L. 100-590 , the Small Business Administration Reauthorization and Amendment Act of 1988 (Title II, the Preferred Surety Bond Guarantee Program Act of 1988). The program was initially authorized on a three-year trial basis, and it was provided permanent statutory authority by P.L. 108-447 , the Consolidated Appropriations Act, 2005.", "As discussed in \" 114th Congress: Preferred Surety Bond Guarantee Rates \" below, P.L. 114-92 , the National Defense Authorization Act for Fiscal Year 2016, increased the SBA's guarantee for preferred sureties from not less than 70% to not less than 90% of losses. "], "subsections": []}, {"section_title": "Small Business Eligibility Standards and Program Requirements", "paragraphs": ["The SBA is authorized to guarantee surety bonds issued to contractors or subcontractors when ", "the business, together with its affiliates, meets the SBA's size standard for the primary industry in which it is engaged; the bond is required; the applicant is not able to obtain such bond on reasonable terms and conditions without a guarantee; and there is a reasonable expectation that the applicant will perform the covenants and conditions of the contract, and the terms and conditions of the bond are reasonable in light of the risks involved and the extent of the surety's participation. ", "The applicant must also \"possess good character and reputation,\" as demonstrated by (1) not being under indictment, being convicted of a felony, or having a final civil judgment stating that the applicant has committed a breach of trust or has violated a law or regulation protecting the integrity of business transactions or business relationships; (2) not having a regulatory authority revoke, cancel, or suspend a license held by the applicant, which is necessary to perform the contract; and (3) never having obtained a bond guarantee by fraud or material misrepresentation or failing to keep the surety informed of unbonded contracts or of a contract bonded by another surety.", "Applicants must also certify the percentage of work under the contract to be subcontracted. The SBA does not guarantee bonds for applicants that are primarily brokers or have effectively transferred control over the project to one or more subcontractors. Applicants must also certify that they are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from transactions with any federal department or agency. In addition, the SBA will not guarantee a bond issued by a particular surety if that surety, an affiliate of that surety, or a close relative or member of the household of that surety or affiliate owns, directly or indirectly, 10% or more of the business applying for the guarantee. This conflict of interest prohibition also applies to ownership interests in any of the applicant's affiliates.", "As mentioned previously, the SBA guarantees contracts up to $6.5 million, and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary. There is no limit to the number of bonds that can be guaranteed for any one contractor. ", "The SBA guarantees up to 90% of the loss incurred and paid by a surety if the contract is $100,000 or less, or if the bond is issued on behalf of a socially and economically disadvantaged-owned and controlled small business, a qualified HUBZone small business, a veteran-owned and controlled small business, or a service-disabled veteran-owned and controlled small business. The guarantee rate is 80% if the contract is greater than $100,000, and the business is not owned and controlled by socially and economically disadvantaged individuals, a qualified HUBZone small business, or a veteran-owned or service-disabled veteran-owned small business.", "The SBA does not charge principals (small business applicants) application or bid bond guarantee fees. If the SBA guarantees a final bond, the principal must pay a contractor fee equal to a percentage of the contract amount, which is determined by the SBA and published in the Federal Register . The FY2019 contractor fee is 0.6% of the contract price for a final bond. The contractor fee is rounded to the nearest dollar, paid to the surety, and the surety remits the fee to the SBA.", "Sureties also charge principals a premium for issuing and servicing the bond. Sureties are not allowed to charge principals a premium that is more than the amount permitted under applicable state law. Premiums vary depending on the surety's assessment of the risk involved and job size; typically ranging from 1.5% to 3.0% of the contract amount. "], "subsections": []}, {"section_title": "Surety Eligibility Standards and Program Requirements", "paragraphs": ["Sureties interested in participating in the Prior Approval Program or the Preferred Surety Bond Guarantee Program (PSB program) must apply in writing to the SBA. Applicants must be a corporation listed by the U.S. Treasury as eligible to issue bonds in connection with federal procurement contracts.", "The SBA considers several factors when evaluating sureties for the PSB program:", "the surety must have an underwriting limitation of at least $6.5 million on the Department of the Treasury's list of acceptable sureties; the surety must agree that it will neither charge a bond premium in excess of that authorized by the appropriate state insurance department nor impose any non-premium fee unless such fee is permitted by applicable state law and approved by the SBA; the surety's premium income from contract bonds guaranteed by any government agency (federal, state, or local) can account for no more than one-quarter of the surety's total contract bond premium income; and the surety must vest the underwriting authority for SBA guaranteed bonds to its own employees and final settlement authority for claims and recovery to employees in the surety's permanent claims department.", "The SBA also considers the surety's rating or ranking designation assigned by a recognized authority. Sureties participating in the PSB program are not eligible to participate in the Prior Approval Program. However, this prohibition does not apply to the surety's affiliates provided that the affiliate is not a participant in the PSB program, their affiliation has been fully disclosed to the SBA, and the affiliate has been approved to participate in the Prior Approval Program.", "Sureties in the Prior Approval Program must obtain the SBA's approval before issuing a guaranteed bond. Sureties in the PSB program may issue, monitor, and service SBA-guaranteed bonds without prior approval. However, these sureties must notify the SBA electronically of all bonds issued and, for final bonds, they must report and submit to the SBA on a monthly basis all contractor and surety fees that are due. These sureties are also subject to a periodic maximum guarantee authority amount set by the SBA. In addition, effective August 21, 2017, sureties are required, during their initial nine months in the PSB program, to obtain the SBA's prior written approval before executing a bond greater than $2 million. The SBA argued that it was in the taxpayer's interest to require newer sureties to \"demonstrate an understanding of the program before being allowed to issue bonds larger than $2 million without SBA's oversight.\"", "The terms and conditions of the SBA's bond guarantee agreements with the surety, including the guarantee percentage, may vary from surety to surety, depending on past experience with the SBA. The SBA may take into consideration, among other things, the rating or ranking assigned to the surety by recognized authorities, the surety's loss rate, average contract amount, average bond penalty per guaranteed bond, and the ratio of bid bonds to final bonds, all in comparison with other sureties participating in the same SBA Surety Bond Guarantee Program (Prior Approval or PSB programs).", "Sureties are required, among other things, to", "evaluate the credit, capacity, and character of a principal using standards generally accepted by the surety industry and in accordance with the SBA's standard operating procedures on underwriting and the surety's principles and practices on unguaranteed bonds; reasonably expect that the principal will successfully perform the contract to be bonded; provide bond terms and conditions that are reasonable in light of the risks involved and the extent of the surety's participation; be satisfied as to the reasonableness of cost and the feasibility of successful completion of the contract; ensure that the principal remains viable and eligible for the program; monitor the principal's progress on guaranteed contracts; maintain documentation of job status requests; take all reasonable action to minimize risk of loss, including, but not limited to, obtaining from each principal a written indemnity agreement, secured by such collateral as the surety or the SBA finds appropriate, which covers actual losses under the contract and imminent breach payments; and in the case of loss, pursue all possible sources of salvage and recovery.", "Participating sureties are subject to audits by SBA-selected and -approved examiners. Prior Approval Program sureties are audited at least once each year and PSB sureties are audited at least once every three years.", "The SBA does not charge sureties (or small businesses) application or bid bond guarantee fees. It does require sureties to pay a guarantee fee on each SBA-guaranteed bond (other than bid bonds). The surety fee, which is determined by the SBA and published in the Federal Register , is a percentage of the bond premium. The FY2019 surety fee is 20% of the bond premium that the surety charges the small business, rounded to the nearest dollar. The surety fee is due within 60 days after the SBA's approval of the prior approval payment or performance bond. The SBA does not receive any portion of a surety's non-premium charges."], "subsections": []}, {"section_title": "Program Statistics", "paragraphs": ["As shown in Table 2 , the number and amount of bid bonds guaranteed by the SBA has generally increased in recent years. For example, in FY2007, the SBA guaranteed 4,192 bid bonds totaling $1.7 billion. In FY2018, the SBA guaranteed 7,354 bid bonds totaling $4.7 billion. ", " Table 2 also shows that the number and amount of SBA-guaranteed final bonds declined somewhat from FY2007 through FY2009 (coinciding with the 2007-2009 recession), and has generally increased since then. Recent increases are likely due to generally improving economic conditions and legislation that temporarily ( P.L. 111-5 ) and then permanently ( P.L. 112-239 ) raised the program's maximum individual contract amount from $2 million to $5 million, and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary. ", "As shown in Table 3 , excluding program costs of about $4 million annually, the program has experienced a net positive cash flow in each of the past 12 fiscal years. ", "There is about $97 million in the Surety Bond Guarantee Program Revolving Fund.", "Historically, the program's default rate has averaged about 3% to 5%. According to the SBA, on average, the default rate on larger contracts tends to be lower than for smaller contracts and the recovery rate for larger contract defaults tends to be greater than for smaller contract defaults. ", "Currently, 28 sureties participate in the Prior Approval Program and 6 participate in the PSB program. Agents empowered to represent a participating surety company are located, or licensed, in all 50 states, American Samoa, the District of Columbia, Guam, the Marshall Islands, Micronesia, the Northern Mariana Islands, Palau, Puerto Rico, and the Virgin Islands. About 80% of the SBA's surety bonds are issued through the Prior Approval Program and 20% through the PSB program."], "subsections": []}, {"section_title": "Congressional Issues: Bond Limits and Guarantee Rates", "paragraphs": [], "subsections": [{"section_title": "111th Congress: Bond Limits", "paragraphs": ["P.L. 111-5 , the American Recovery and Reinvestment Act of 2009 (ARRA), provided the program an additional appropriation of $15 million and temporarily increased, from February 17, 2009, through September 30, 2010, the maximum bond amount from $2 million to $5 million. The act also authorized the SBA to guarantee a bond of up to $10 million if a federal contracting officer certified in writing that a guarantee in excess of $5 million was necessary. It also revised the program's size standard to \"the size standard for the primary industry in which such business concern, and the affiliates of such business concern, is engaged, as determined by the Administrator in accordance with the North American Industry Classification System.\" The new size standard (e.g., up to $36.5 million in average annual receipts over the previous three years for most heavy construction contractors, and up to $15 million in average annual receipts over the previous three years for specialty trade contractors) increased the number of businesses that qualified for the program. Using its rulemaking authority, the SBA made ARRA's temporary size standard permanent on August 11, 2010.", "Proponents argued that the increased bond limit and size were necessary to \"ensure that small businesses are able to secure the surety bonds they need to compete for contracts, grow, and hire more employees.\" They also argued that \"in our current economic recession, small businesses are finding it even more difficult to secure the credit lines necessary to get bonds in the private sector.\" In their view, the temporary changes would create \"significant opportunities to create jobs now in which small businesses will participate and be the driving engine for creation of new jobs in our country.\"", "There was no apparent organized opposition to these specific temporary changes to the Surety Bond Guarantee Program. However, there was opposition to ARRA's package of program enhancements for the SBA as a whole, which among other things, provided the SBA $730 million in additional funding, including $255 million for a temporary, two-year small business stabilization program to guarantee loans of $35,000 or less to small businesses for qualified debt consolidation, later named the America's Recovery Capital (ARC) Loan program and $375 million to temporarily subsidize fees for the SBA's 7(a) and 504/CDC loan guaranty programs and increase the 7(a) program's maximum loan guaranty percentage to 90%. Instead of modifying the SBA's program requirements and increasing the SBA's appropriation, opponents advocated business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to assist small businesses, generate economic growth, and create jobs."], "subsections": []}, {"section_title": "112th Congress: Bond Limits", "paragraphs": ["On September 12, 2011, the Obama Administration advocated, as part of its proposed American Jobs Act, a temporary increase in the SBA surety bond limit to $5 million until the end of FY2012. The Administration argued that raising the program's bond limit \"will make it easier for small businesses to take advantage of contracting opportunities generated by the American Jobs Act's proposed infrastructure investments.\"", "On December 7, 2012, the Administration also recommended, as part of its request for an additional $60.4 billion in federal resources to address damage caused by Hurricane Sandy, that the SBA surety bond limit be increased to $5 million to enable \"more small businesses to participate in the recovery efforts.\"", "There were several legislative efforts during the 112 th Congress to increase the program's bond limit. S. 1334 , the Expanding Opportunities for Main Street Act of 2011, and its companion bill in the House, H.R. 2424 , would have reinstated and made permanent ARRA's higher limits (up to $5 million and up to $10 million if a federal contracting officer certifies in writing that a guarantee in excess of $5 million is necessary). Neither of these bills was reported by a committee for consideration by the House or the Senate.", "S. 1660 , the American Jobs Act of 2011, and its companion bill in the House, H.R. 12 , would have provided $3 million in additional funding to pay for the cost of temporarily increasing the program's bond limit to $5 million from $2 million until the end of FY2012. Cloture on a motion to proceed to S. 1660 was not invoked in the Senate on October 11, 2011, by a vote of 50 to 49. H.R. 12 was not reported by a committee for consideration in the House. ", "On December 12, 2012, the Senate Committee on Appropriations released its draft of the Hurricane Sandy Emergency Assistance Supplemental bill. It included a provision to increase the program's bond limit to $5 million. This provision was later removed following congressional approval of H.R. 4310 , the National Defense Authorization Act for Fiscal Year 2013, which became law ( P.L. 112-239 ) on January 2, 2013. It increased the program's bond limit to $6.5 million, and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary. ", "There was relatively little discussion in the legislative record concerning the reasons for increasing the surety bond program's bond limits, and even less discussion of the reasons for not increasing the limits. Hearings were not held on S. 1334 and H.R. 2424 . Also, only one witness during hearings on H.R. 4310 addressed the SBA surety bond program. That witness supported an increase in the surety bond limit to $5 million, and up to $10 million if a contracting officer certifies its necessity.", "Advocates argued that bond limits should be raised to bring them more in line with the contracting amounts for other small business programs, such as the 8(a) Minority Small Business and Capital Ownership Development Program, the Historically Underutilized Business Zone (HUBZone) program, the Women-Owned Small Business Federal Contract program, and the Service-Disabled Veteran-Owned Small Business Concerns Program. For example, under 8(a) Minority Small Business and Capital Ownership Development Program, federal contracting officials, at that time, could provide a sole source award to a 8(a) small business if the anticipated award price of the contract did not exceed $6.5 million for manufacturing contracts (now $7.0 million) or $4 million for other contract opportunities, and the contracting officer believed that the award could be made at a fair and reasonable price. Advocates argued that raising the program's bond limit would provide more consistency across small business contracting programs and make it easier for agencies experiencing difficulty issuing contracts in increments of $2 million or less (e.g., the Department of Defense [DOD], the General Services Administration, and the Department of State) to participate in the program. ", "Advocates also argued that small businesses awarded contracts exceeding $2 million under the other small business contracting programs are at risk of not being able to complete those contracts due to difficulties in securing a surety bond. For example, the House Committee on Armed Services' Panel on Business Challenges in the Defense Industry argued that the SBA surety bond program's limit should be increased to $6.5 million to match the 8(a) program's $6.5 million threshold for manufacturing contracts and to \"increase the opportunities for small businesses to compete for federal contracts, especially in those departments, such as the Department of Defense, where the average size of construction contracts awarded to small businesses for FY2010 exceeded $5.9 million\u2014nearly triple the size for which SBA can provide bonding support.\" ", "There was no organized opposition to raising the program's bond limits. One possible argument that could have been raised is that higher limits could lead to higher amounts being guaranteed by the SBA and, as a result, increase the risk of program losses. However, the SBA's experience with Recovery Act bonds (over $2 million) suggested that raising the limit may not lead to an increased risk of program losses. The SBA reported that the program's default rate on Recovery Act bonds was lower, in 2009 and 2010, than for its other bonds. The SBA guaranteed 166 Recovery Act bid bonds valued at $518 million and 52 Recovery Act final bonds valued at $145.4 million. There were two defaults, with a bond value of $2.7 million and $2.2 million, respectively. "], "subsections": []}, {"section_title": "113th Congress: Guarantee Rates", "paragraphs": ["In an effort to enhance surety participation in the SBA's program, H.R. 776 , the Security in Bonding Act of 2013, introduced and referred to the House Committee on the Judiciary and the House Committee on Small Business on February 15, 2013, would have increased the PSB program's guarantee rate from not to exceed 70% to not to exceed 90% of losses. The bill was reported favorably by both committees on May 21, 2014, and included in H.R. 4435 , the Howard P. \"Buck\" McKeon National Defense Authorization Act for Fiscal Year 2015, which was passed by the House on May 22, 2014. This provision was not included in the final version of the bill which was subsequently passed by Congress.", "Advocates of increasing the PSB program's guarantee rate argued that", "Despite the different guarantee amounts and the differing levels of review, both the PAP [Prior Approval Program] and PSBP [Preferred Surety Bond Guarantee Program] have similar levels of default. However, over the years, the PSBP program has become less effective for small businesses since only four sureties currently participate in the program because the guarantee rates are no longer competitive enough to encourage commercial sureties to participate. Therefore, since the PSBP is the more efficient program and \u2026 does not expose taxpayers to any risk, this legislation amends the SBIA [Small Business Investment Act] to standardize the guarantee rate at 90 percent.", "The SBA did not formally endorse the proposed guarantee rate increase. However, in its FY2015 and FY2016 congressional budget justification documents, the SBA indicated that it \"will investigate establishing a single guaranty percentage in the Prior Approval and PSB programs and restructuring the Prior Approval program.\" Also, when asked at a congressional hearing held on May 23, 2013, about the proposed guarantee rate increase, an SBA official testified that ", "We are looking very closely at the program. We have seen a decline in the preferred sureties going down from 50% to 14% of our program, which is a very small number. We would like to see more participation in that program. Because of the additional cash flow we have, we do not expect it to increase our costs. And we have some history in our other programs that demonstrate that having the same guarantee level is not a disincentive.", "There was no discussion in the legislative record during the 113 th Congress opposing an increase in the guarantee rate for the PSB program. One possible objection might have been that increasing the guarantee rate could increase the risk of program losses and result in higher program fees. Higher fees, in turn, could cause hardship for some companies seeking a surety bond. "], "subsections": []}, {"section_title": "114th Congress: Preferred Surety Bond Guarantee Rates Increased", "paragraphs": ["H.R. 838 , the Security in Bonding Act of 2015, was introduced and referred to the House Committee on the Judiciary and the House Committee on Small Business on February 10, 2015. The bill would have increased the PSB program's guarantee rate from not to exceed 70% to not to exceed 90%, specify requirements concerning the pledge of assets by individual sureties, and require GAO to examine the effects of these changes on small businesses. ", "The House-passed version of H.R. 1735 , the National Defense Authorization Act for Fiscal Year 2016, included H.R. 838 's provisions. The Senate-passed version of the bill did not. The conference agreement for H.R. 1735 , which became P.L. 114-92 , included H.R. 838 's provision to increase the PSB program's guarantee rate from not to exceed 70% to not to exceed 90% of losses and its provision to specify requirements concerning the pledge of assets by individual sureties, subject to a one-year delay \"to allow for the necessary rulemaking.\" Congress specified additional requirements concerning the pledge of assets by individual sureties as a means to ensure that \"individual sureties have sufficient assets to redeem the bonds.\"", "The SBA's final rule implementing the increased PSB program's guarantee rate was effective as of September 20, 2017."], "subsections": []}]}, {"section_title": "Congressional Issues: Program Structure", "paragraphs": ["The SBA has reported that it is focusing on \"strengthening relationships with individual surety companies and the large network of bond agents and producers across the country in order to reach more small businesses in need of bonding.\" As part of this outreach effort, the SBA has reported that it will continue to emphasize \"process improvements that will streamline the application requirements for small businesses and surety companies and their agents.\" For example, in August 2012, the SBA announced a \"Quick APP\" for surety bonds up to $250,000 that provides a streamlined underwriting and application process by combining \"two applications into one to make it easier and faster for small businesses and contractors, including veteran-owned small businesses, to compete for contracts.\" The SBA increased the Quick APP (now called the Quick Bond Program) eligibility threshold to $400,000 in 2017.", "In addition, the SBA reported in 2016 that it was also considering combing the Prior Approval Program and PSB program into a single program featuring the streamlined bond approval and monitoring processes under the PSB program. Several industry groups, including the National Association of Surety Bond Producers and The Surety & Fidelity Association of America, have recommended that the programs be merged, the emphasis on reduced regulatory burdens under the PSB program be maintained, and the program's fees kept as low as economically feasible as a means to encourage more sureties to participate in the program.", "Perhaps because the proposal has not been formally introduced as a bill, there are no public statements opposing the merger of the two programs. Opposition might come from (1) those who are not convinced that the Surety Bond Guarantee Program is necessary to supplement the private market for surety bonds and would prefer that the program be eliminated rather than reformed or (2) those who believe that a federal program is necessary to supplement the private market for surety bonds, but the existing program is sufficient to meet that need and does not require changes to encourage its expansion. Still other opponents might argue that providing additional authority to sureties to approve and monitor bonds could increase the risk of defaults and program losses."], "subsections": []}, {"section_title": "Concluding Observations", "paragraphs": ["Throughout the program's history, both congressional testimony and GAO examinations have indicated that smaller contracting firms, and especially minority-owned and women-owned small business contracting firms, often have a more difficult time accessing surety bonds in the private marketplace than larger firms. For example, in 1995, GAO reported that \"it is not unusual for a small construction company to have some difficulty in obtaining a surety bond.\" GAO found that about one in three of the smallest contracting firms it surveyed, compared with about one in six of the larger contracting firms it surveyed, reported that they were required to provide collateral. GAO also reported", "The experiences of the minority-owned firms differed from those of the firms not owned by minorities in several areas. For example, these firms were more likely to be asked to provide certain types of financial documentation, as well as to provide collateral or to meet other conditions; were more likely to be denied a bond and to report losing an opportunity to bid because of delays in processing their request for a bond; and were more likely to depend on jobs requiring bonds for a higher proportion of their revenues.", "The women-owned firms differed from the firms not owned by women in a few key respects. For example, they \u2026 were more likely to be asked to provide more types of financial or other documentation to obtain a bond.", "In addition, the minority-owned firms reported more often than the firms not owned by minorities that they had to (1) establish an escrow account controlled by the surety company, (2) hire a CPA or a management or consulting firm selected by the surety company to manage the contract, and (3) enter into an arrangement that allows the surety company to manage the job even when the firm is not in default.", "Although congressional testimony and GAO examinations have supported the need for a program such as the SBA's Surety Bond Guarantee Program, that testimony and GAO's surveys of businesses have been somewhat less useful in helping Congress determine the appropriate size for the program. For example, a review of congressional hearings since the program's inception suggests that congressional witnesses representing the surety companies and various construction organizations, including minority-owned small contracting businesses, have focused their testimony on the need to reduce the SBA's paperwork requirements, which are designed to prevent fraud but increase the sureties' costs; keep the program's fees as low as possible; and keep the program's guarantee rates as high as possible. The SBA's testimony has tended to focus on the need to attract more sureties to the program so that it can reverse the slow downward trajectory the program has experienced over the past two decades in the number and amount of final bonds guaranteed. There has been relatively little testimony provided concerning the broader issue of how large the program should be in comparison with the private sector and what measures or metrics could be used to help make that determination.", "One possible starting point for determining the program's size in comparison with the private sector is to examine congressional testimony concerning the supply and demand for sureties in the private sector. That testimony suggests that the supply and demand for sureties tends to fluctuate with changes in the overall economy, with the supply of sureties contracting during economic recessions and expanding during economic expansions and the demand for sureties slowing during economic recessions and increasing during economic expansions. Arguably, federal policies could take these fluctuations into account\u2014enacting policies that expand federal support for surety guarantees when supply is tight and reducing federal support for surety guarantees when supply is more plentiful. Of course, when making these decisions, it is necessary to first establish measures or metrics to determine current market conditions. In addition, this line of reasoning assumes that having a federal presence in the surety marketplace is desirable, an assumption not held by all. Ultimately, although having established measures or metrics concerning the supply and demand for surety bonds might be helpful in determining the appropriate size for the SBA's Surety Bond Guarantee Program, that decision will largely rest on personal views concerning the role of the federal government in the private marketplace and the level of acceptable risk in assisting small businesses to gain greater access to surety bonds."], "subsections": [{"section_title": "Appendix. SBA Surety Bond Guarantee Program Statistics", "paragraphs": [], "subsections": []}]}]}}
{"id": "R43846", "title": "Small Business Administration (SBA) Funding: Overview and Recent Trends", "released_date": "2019-04-03T00:00:00", "summary": ["This report examines the Small Business Administration's (SBA's) appropriations (new budget authority, minus rescissions and sequestration) over time, focusing on developments and trends since FY2000. It also provides total available funding (which includes carryover from the prior fiscal year, carryover into the next fiscal year, account transfers, rescissions, and sequestration) and, for entrepreneurial development noncredit programs, actual and anticipated expenditures for comparative purposes.", "SBA appropriations, as a whole, have varied significantly from year to year since FY2000 and across all three of the agency's major spending categories: disaster assistance, business loan credit subsidies, and \"other programs,\" a category that includes salaries and expenses, business loan administration, the Office of Inspector General, the Office of Advocacy, and entrepreneurial development programs. Overall, the SBA's appropriations have ranged from a high of $2.359 billion in FY2018 to a low of $571.8 million in FY2007. Much of this volatility is due to significant variation in appropriations for disaster assistance, which ranged from a high of $1.7 billion in FY2006 to a low of $0 in FY2009. This variation can be attributed primarily to supplemental appropriations provided to address disaster needs arising from the impact of major hurricanes, such as Hurricanes Katrina and Sandy, and more recently, Hurricanes Harvey, Irma, and Maria.", "The SBA's appropriations for business loan credit subsidies have also varied since FY2000, ranging from a high of $319.7 million in FY2013 ($337.3 million before sequestration and rescission) to a low of $1.3 million in FY2006 and FY2007. This variation is due to the impact of changing economic conditions on the SBA's guaranteed loan portfolios. During good economic times, revenue from SBA fees and collateral liquidation is typically sufficient to cover the costs of purchasing guaranteed loans that have defaulted. During and immediately following recessions, however, that revenue is typically insufficient to cover the costs of purchasing guaranteed loans that have defaulted.", "The SBA's appropriations for other programs, as a collective, have also varied since FY2000, ranging from a high of $1.6253 billion in FY2010 to a low of $455.6 million in FY2007. This variation is primarily due to congressional response to changing economic conditions. For example, Congress approved significant, temporary increases in appropriations for the SBA's other programs spending category in FY2009 and FY2010. Overall, since FY2000, appropriations for other programs have increased at a pace that exceeds inflation. This report provides appropriations for all five major components of the other programs spending category, including the SBA's entrepreneurial development programs.", "The SBA's appropriations for FY1954 through FY1999 are provided in the Appendix."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Small Business Administration (SBA) currently administers several types of programs to support small businesses, including loan guaranty and venture capital programs to enhance small businesses' access to capital; contracting programs to increase small businesses' opportunities in federal contracting; direct loan programs for businesses, homeowners, and renters to aid in their recovery from natural disasters; and small business management and technical assistance training programs to assist in business formation and expansion. Congressional interest in these programs has increased in recent years, primarily because small businesses are viewed as a means to stimulate economic activity and create jobs. Many Members of Congress also regularly receive constituent inquiries about the SBA's programs.", "This report examines appropriations for the SBA (new budget authority, minus rescissions and sequestration) over time, focusing on developments and trends since FY2000. ", "This report also provides total available funding (which includes carryover from the prior fiscal year, carryover into the next fiscal year, account transfers, rescissions, and sequestration) and, for comparative purposes, actual and anticipated expenditures for the SBA's entrepreneurial development noncredit programs.", "SBA appropriations, as a whole, have varied significantly from year to year since FY2000 and across all three major SBA spending categories: appropriations for disaster assistance, business loan credit subsidies, and \"other programs,\" a spending category that includes appropriations for salaries and expenses, business loan administration, the Office of Inspector General, the Office of Advocacy, and entrepreneurial development noncredit programs.", "The variation in appropriations for disaster assistance since FY2000 is largely due to supplemental appropriations provided to address disaster needs arising from the impact of major hurricanes.", "Business loan credit subsidies represent the net present value of cash flows to and from the SBA over the life of the agency's loan portfolios. For guaranteed loans, the net present value of cash flows is affected by several factors, but it is primarily the difference between the cost of purchasing loans that have defaulted and the revenue generated from fees and collateral liquidation. For direct (Microloan) lending, it is primarily the cost of offering below-market interest rates to Microloan intermediaries.", "The variation in appropriations for SBA business loan credit subsidies since FY2000 is primarily due to the impact of changing economic conditions on the SBA's guaranteed loan portfolios. During good economic times, revenue from SBA fees and collateral liquidation is typically sufficient to cover the SBA's cost of purchasing guaranteed loans that have defaulted. During and immediately following economic slowdowns, however, revenue from SBA fees and collateral liquidation is typically insufficient to cover the SBA's cost of purchasing guaranteed loans that have defaulted. The shortfall occurs because the SBA's cost of purchasing guaranteed loans tends to increase when the economy slows (primarily because guaranteed loans are more likely to default during and immediately following recessions) and revenue from loan liquidation tends to be constrained during slow economic times (primarily because commercial real estate values typically fall during and immediately following recessions). As a result, additional appropriations are needed to cover these expenses, which are guaranteed by the \"full faith and credit of the United States.\"", "Since FY2000, the variation in appropriations for the other programs spending category is attributable primarily to congressional response to changing economic conditions. As the report will discuss, appropriations for this spending category have generally increased at a pace that exceeds inflation. In addition, Congress approved significant, temporary increases in appropriations for SBA programs in the other programs spending category in FY2009 and FY2010. It approved these temporary increases primarily as a means to enhance small businesses' access to capital, which had become constrained during and immediately following the Great Recession (December 2007 to June 2009). ", "The SBA's appropriations for FY1954 through FY1999 are provided in the Appendix ."], "subsections": []}, {"section_title": "SBA Funding Trends: FY2000-FY2019", "paragraphs": ["As shown in Table 1 , the SBA's appropriations have varied significantly since FY2000, ranging from a high of $2.359 billion in FY2018 to a low of $571.8 million in FY2007. Much of this volatility is due to significant variation in appropriations for disaster assistance, which ranged from a high of $1.7 billion in FY2006 to a low of $0 in FY2009. This variation is attributable primarily to supplemental appropriations provided to address disaster needs arising from the impact of major hurricanes, such as Hurricanes Katrina, Sandy, Harvey, Irma, and Maria.", "In addition, as shown in Table 1 , appropriations for business loan credit subsidies have varied significantly since FY2000, ranging from a high of $319.7 million in FY2013 ($337.3 million before sequestration and rescission) to a low of $1.3 million in FY2006 and FY2007. As mentioned previously, the variation in appropriations for business loan credit subsidies results primarily from the impact of changing economic conditions on the SBA's loan portfolios. During good economic times, revenue from fees and collateral liquidation is typically sufficient to cover the costs of purchasing defaulted loans. During and immediately following recessions, revenue from fees and collateral liquidation is typically not sufficient to cover those costs. ", "As shown in Table 1 , appropriations for the all other programs category have also varied since FY2000, ranging from a high of $1.6253 billion in FY2010 to a low of $455.6 million in FY2007. Much of this variation resulted from significant, temporary increases in appropriations for the SBA's other programs in FY2009 ($724.0 million) and FY2010 ($962.5 million). These additional appropriations were approved primarily as a means to enhance small businesses' access to capital, which had become constrained during and immediately following the Great Recession. As mentioned previously, from FY2000 to FY2019, appropriations for the SBA's other programs spending category, as a whole, have exceeded the rate of inflation.", "For comparative purposes, Table 1 also presents the SBA's total available funds. As indicated in the table, the SBA's carryovers and account transfers tend to reduce variation in its budget from one fiscal year to the next. Much of this \"evening out\" process is due to disaster assistance appropriations, which are provided in one fiscal year and then typically spent over several fiscal years."], "subsections": []}, {"section_title": "SBA Funding Within the Other Programs Category", "paragraphs": ["The following section examines appropriations and total available funding for FY2000-FY2019 for the five main components of the SBA's other programs spending category: (1) salaries and expenses, (2) business loan administration, (3) the Office of Inspector General (OIG), (4) the Office of Advocacy (Advocacy), and (5) entrepreneurial development (ED) noncredit programs."], "subsections": [{"section_title": "Salaries and Expenses", "paragraphs": ["The SBA's salaries and expenses account currently provides funding for the following:", "office operating budgets, which are used by program and administrative offices for daily operations, such as travel, supplies, and contracted services; agency-wide costs, such as rent and telecommunications, which are managed centrally; employee compensation and benefits, which are also managed centrally; and reimbursable expenses for programs for which the SBA receives reimbursable budget authority from other federal government agencies.", "Several adjustments were made to the SBA's reported appropriations for its salaries and expenses account to enable meaningful comparisons over time. For example, prior to FY2014, appropriations for the SBA's ED programs were included in the salaries and expenses account. They now have their own, separate appropriations account. Therefore, to allow for meaningful comparisons with current appropriations, Table 2 lists and deducts the reported appropriations for ED programs prior to FY2014 from the reported appropriations for salaries and expenses.", "In addition, the SBA previously included appropriations for congressional initiatives (earmarks) under the salaries and expenses account. Therefore, to allow for meaningful comparisons with current appropriations and focus the comparison on administrative expenses, appropriations for earmarks are deducted from the reported appropriations for salaries and expenses.", "Prior to FY2012, Advocacy was funded through the salaries and expenses' executive direction subaccount. Advocacy now has its own, separate appropriations account. To allow for meaningful comparisons with current appropriations, Table 2 lists Advocacy's funding provided through the salaries and expenses' executive direction subaccount prior to FY2012 and deducts that amount from the reported appropriation s for salaries and expenses .", "As discussed in greater detail below (see \"Office of Advocacy\"), data concerning Advocacy's funding provided through the salaries and expenses' executive direction subaccount are not available for FY2006-FY2010. However, in FY2003, FY2004, and FY2005, Advocacy's funding provided through the salaries and expenses' executive direction subaccount was 79% of its reported total cost. The estimates provided in the table for FY2006-FY2010 were derived by multiplying Advocacy's total program cost reported for each of those fiscal years by 79%.", "As shown in Table 2 , the SBA's appropriations for salaries and expenses have varied from year to year, with increases in some years and decreases in others. Overall, appropriations for the SBA's salaries and expenses have increased from $176.490 million in FY2000 to $267.500 million in FY2019. This increase has exceeded the rate of inflation.", "The SBA has statutory authorization to transfer appropriations from the business loan administration account into the salaries and expenses account. As evidenced by the amounts listed in the total available funds column in the table, the SBA exercised that authority in every fiscal year from FY2000 to FY2018 (and is expected to do so again in FY2019), transferring the entire appropriation for business loan administration into the salaries and expenses account in each of those fiscal years."], "subsections": []}, {"section_title": "Business Loan Administration", "paragraphs": ["Appropriations for the SBA's business loan administration account have varied since FY2000, increasing in some years and decreasing in others (see Table 3 ). Overall, appropriations for SBA business loan administration increased from $129 million in FY2000 to $155.150 million in FY2019. The program's recommended appropriations have not kept pace with inflation.", "As evidenced by the $0.0 balance in the total funds available column for the business loan administration account, the SBA has routinely transferred all business loan administration appropriations to the salaries and expenses account. The combined appropriations for SBA salaries and expenses and business loan administration increased from $305.490 million in FY2000 to $422.650 million in FY2019. This increase has not kept pace with inflation."], "subsections": []}, {"section_title": "Office of Inspector General", "paragraphs": ["According to the SBA, the OIG's mission is to \"provide independent, objective oversight to improve the integrity, accountability, and performance of the SBA and its programs for the benefit of the American people.\" The office was created within the SBA by the Inspector General Act of 1978 ( P.L. 95-452 , as amended). The inspector general, who is nominated by the President and confirmed by the Senate, directs the office. The Inspector General Act provides the OIG with the following responsibilities:", "promote economy, efficiency, and effectiveness in the management of SBA programs and supporting operations; conduct and supervise audits, investigations, and reviews relating to the SBA's programs and support operations; detect and prevent fraud, waste, and abuse; review existing and proposed legislation and regulations and make appropriate recommendations; maintain effective working relationships with other governmental agencies and nongovernmental entities regarding the inspector general's mandated duties; keep the SBA administrator and Congress informed of serious problems and recommend corrective actions and implementation measures; comply with the comptroller general's audit standards; avoid duplication of Government Accountability Office activities; and report violations of federal criminal law to the U.S. attorney general.", "As shown in Table 4 , the OIG's appropriations have increased from $11.405 million in FY2000 to $21.900 million in FY2019. This increase has exceeded the rate of inflation.", "The OIG typically receives a transfer of appropriations from the disaster assistance account for auditing expenses. It was also provided additional appropriations in FY2006, FY2013, and FY2018 for expenses related to the review of SBA disaster loans following major hurricanes (e.g., Hurricanes Katrina, Rita, and Wilma in 2005, Hurricane Sandy in 2012, and Hurricanes Harvey, Irma, and Maria in 2018) and in FY2009 to conduct reviews and audits of $730 million provided to the SBA by P.L. 111-5 , the American Recovery and Reinvestment Act of 2009."], "subsections": []}, {"section_title": "Office of Advocacy14", "paragraphs": ["The SBA indicates that its Office of Advocacy is \"an independent voice for small business within the federal government.\" The chief counsel for Advocacy, who is nominated by the President and confirmed by the Senate, directs the office. Advocacy's mission is to \"encourage policies that support the development and growth of American small businesses\" by", "intervening early in federal agencies' regulatory development processes on proposals that affect small businesses and providing Regulatory Flexibility Act compliance training to federal agency policymakers and regulatory development officials; producing research to inform policymakers and other stakeholders on the impact of federal regulatory burdens on small businesses, document the vital role of small businesses in the economy, and explore and explain the wide variety of issues of concern to the small business community; and fostering two-way communication between federal agencies and the small business community.", "As shown in Table 5 , Advocacy's funding has increased from $5.620 million in FY2000 to $9.120 million in FY2019. This increase has exceeded the rate of inflation.", "P.L. 111-240 , the Small Business Jobs Act of 2010, enhanced Advocacy's independence by ending the practice of funding Advocacy through the SBA's salaries and expenses' executive direction subaccount. Instead, P.L. 111-240 requires the President to provide a separate statement of the appropriations request for Advocacy, \"which shall be designated in a separate account in the General Fund of the Treasury.\" The act also requires the SBA administrator to provide Advocacy with \"appropriate and adequate office space at central and field office locations, together with such equipment, operating budget, and communications facilities and services as may be necessary, and ... necessary maintenance services for such offices and the equipment and facilities located in such offices.\" In addition, Congress has provided Advocacy its own, separate appropriations amount since FY2012.", "As mentioned previously, prior to FY2012, the SBA reported Advocacy's total program cost, which includes funding provided through the salaries and expenses' executive direction subaccount, agency-wide overhead costs (rent, telecommunications, etc.), and other support costs (e.g., management and administrative support, including human resources support). From FY2000 to FY2005, the SBA provided relatively detailed information concerning Advocacy's budget, including the amount of funding Advocacy received through the salaries and expenses' executive direction subaccount. Also, Advocacy's FY2013 congressional budget justification document included the amount of funding Advocacy received through the salaries and expenses' executive direction subaccount in FY2011. However, those data are not available for FY2006-FY2010, and it was therefore necessary to estimate Advocacy's funding from the salaries and expenses' executive direction subaccount for those years. The estimates provided in the table were derived by multiplying Advocacy's total program cost for each of those fiscal years by 79%, which was the proportion of Advocacy's total program costs provided from the salaries and expenses' executive direction subaccount in FY2003, FY2004, and FY2005."], "subsections": []}, {"section_title": "Entrepreneurial Development Noncredit Programs18", "paragraphs": ["The SBA's entrepreneurial development (ED) noncredit programs provide a variety of management and training services to small businesses. Congress provides appropriations for", "eight management and technical assistance training programs: Small Business Development Centers, the Microloan Technical Assistance Program, Women Business Centers, SCORE, the Program for Investment in Microentrepreneurs (PRIME), Veterans Programs (including Veterans Business Outreach Centers, Boots to Business, Boots to Business: Reboot, Veteran Women Igniting the Spirit of Entrepreneurship [VWISE], and Entrepreneurship Bootcamp for Veterans with Disabilities), the 7(j) Technical Assistance Program, and the Native American Outreach Program; two relatively long-standing nontraining programs: the National Women's Business Council and HUBZone administration; three initiatives: the Entrepreneurial Development Initiative (Clusters), the Entrepreneurship Education Initiative, and Growth Accelerators; and the Step Trade and Export Promotion (STEP) Pilot Grant program.", "Initially, the SBA provided its own management and technical assistance training programs. Over time, however, the SBA has increasingly relied on third parties to provide that training. The SBA reports that more than 1 million aspiring entrepreneurs and small business owners receive training from an SBA-supported resource partner each year.", "Congress specifies appropriations in appropriations acts for the Small Business Development Center (SBDC) program, the Microloan Technical Assistance program, and the STEP program. Congress provides an overall appropriation for the SBA's ED programs and recommends appropriations for the SBA's other ED programs, typically in the conference agreement or \"Explanatory Statement\" accompanying the appropriations act. As a result, the following tables refer to appropriations for the SBDC and Microloan Technical Assistance programs and recommended appropriations for other ED programs. Although not legally binding, the SBA has traditionally adhered to these recommended funding amounts."], "subsections": [{"section_title": "Small Business Development Centers", "paragraphs": ["SBDCs provide free or low-cost assistance to small businesses using programs customized to local conditions. SBDCs support small business in marketing and business strategy, finance, technology transfer, government contracting, management, manufacturing, engineering, sales, accounting, exporting, and other topics. They are funded by grants from the SBA and matching funds. There are 63 lead SBDC service centers, at least one in each state (with four in Texas and six in California), the District of Columbia, Puerto Rico, the Virgin Islands, Guam, and American Samoa. These lead SBDC service centers manage more than 900 SBDC outreach locations.", "As shown in Table 6 , appropriations for SBDCs have increased from $84.179 million in FY2000 to $131.000 million in FY2019. This increase has exceeded the rate of inflation. In addition, as shown in the table, SBDCs received an additional $50 million in temporary funding in FY2010, which was spent over two fiscal years.", "The SBA reports actual and anticipated expenditures for its ED programs in its annual budget justification document. SBDC expenditures in FY2000-FY2018 and anticipated SBDC expenditures in FY2019 are presented in the table's last column for comparative purposes. "], "subsections": []}, {"section_title": "Microloan Technical Assistance Program", "paragraphs": ["The SBA's Microloan lending program is designed to address the perceived disadvantages faced by women, low-income, veteran, and minority entrepreneurs and business owners in gaining access to capital for starting or expanding their business (see P.L. 102-140 , the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1992). Under the Microloan program, the SBA provides direct loans to qualified nonprofit intermediary Microloan lenders who, in turn, provide \"microloans\" of up to $50,000 to small business owners, entrepreneurs, and nonprofit child care centers.", "The SBA's Microloan Technical Assistance program is part of the SBA's Microloan program but receives a separate appropriation. It provides grants to Microloan intermediaries to offer management and technical training assistance to Microloan program borrowers and prospective borrowers. There are currently 147 active Microloan intermediaries, serving 49 states, the District of Columbia, and Puerto Rico.", "As shown in Table 7 , the Microloan Technical Assistance program's appropriations have varied over the years. Overall, Microloan Technical Assistance Program appropriations have increased from $23.112 million in FY2000 to $31.000 million in FY2019. This increase has been less than the rate of inflation. ", "Microloan Technical Assistance expenditures in FY2000-FY2018 and anticipated Microloan Technical Assistance expenditures in FY2019 are presented in the table's last column for comparative purposes."], "subsections": []}, {"section_title": "Women Business Centers", "paragraphs": ["Women Business Centers (WBCs) provide financial, management, and marketing assistance to small businesses, including start-up businesses, owned and controlled by women. Since its inception, the program has targeted the needs of socially and economically disadvantaged women (see P.L. 100-533 , the Women's Business Ownership Act of 1988). Currently, there are 121 WBCs located throughout most of the United States and the territories.", "As shown in Table 8 , WBC's recommended appropriations have increased from $8.966 million in FY2000 to $18.500 million in FY2019. This increase has exceeded the rate of inflation. ", "WBC expenditures in FY2000-FY2018 and anticipated WBC expenditures in FY2019 are presented in the table's last column for comparative purposes."], "subsections": []}, {"section_title": "SCORE", "paragraphs": ["The SBA provides financial assistance to SCORE (formerly the Service Corps of Retired Executives) to provide in-person mentoring and online training to small business owners and prospective owners. SCORE's 320 chapters and more than 800 branch offices are located throughout the United States and partner with more than 11,000 volunteer counselors, who are working or retired\u00a0business owners, executives and corporate leaders, to provide management and training assistance to small businesses \"at no charge or at very low cost.\"", "As shown in Table 9 , SCORE's recommended appropriations have increased from $3.487 million in FY2000 to $11.700 in FY2019. This increase has exceeded the rate of inflation.", "SCORE expenditures in FY2000-FY2018 and anticipated SCORE expenditures in FY2019 are presented in the table's last column for comparative purposes."], "subsections": []}, {"section_title": "Program for Investment in Microentrepreneurs", "paragraphs": ["The Program for Investment in Microentrepreneurs (PRIME) provides grants to nonprofit microenterprise development organizations or programs that have \"a demonstrated record of delivering microenterprise services to disadvantaged entrepreneurs; an intermediary; a microenterprise development organization or program that is accountable to a local community, working in conjunction with a state or local government or Indian tribe; or an Indian tribe acting on its own, if the Indian tribe can certify that no private organization or program referred to in this paragraph exists within its jurisdiction.\"", "As shown in Table 10 , PRIME's recommended appropriations have varied, starting at $14.964 million in FY2001 (the program's first recommended appropriation) and falling to $2 million in FY2006 and FY2007. PRIME has received $5.0 million since FY2015. ", "PRIME expenditures in FY2001-FY2018 and anticipated PRIME expenditures in FY2019 are presented in the table's last column for comparative purposes.", "The Obama Administration argued that PRIME overlaps and duplicates the SBA's Microloan Technical Assistance program and recommended in its FY2012-FY2017 budget requests that PRIME receive no appropriations. As shown in the table, in FY2013, the Obama Administration eliminated PRIME's appropriation as part of the SBA's sequestration process. ", "The Trump Administration recommended in its FY2018 and FY2019 budget requests that the PRIME program receive no appropriations."], "subsections": []}, {"section_title": "Veterans Programs", "paragraphs": ["The SBA's Office of Veterans Business Development (OVBD) administers several management and training programs to assist veteran-owned businesses, including", "the Entrepreneurship Bootcamp for Veterans with Disabilities Consortium of Universities, which provides \"experiential training in entrepreneurship and small business management to post-9/11 veterans with disabilities\" at eight universities; the Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE) program, which is administered through a cooperative agreement with Syracuse University, offers women veterans a 15-day, online course focused on entrepreneurship skills and the \"language of business,\" followed by a 3-day conference (offered twice a year at varying locations) in which participants \"are exposed to successful entrepreneurs and CEOs of Fortune 500 companies and leaders in government\" and participate in courses on business planning, marketing, accounting and finance, operations and production, human resources, and work-life balance; the Operation Endure and Grow Program, which is administered through a cooperative agreement with Syracuse University, offers an eight-week online training program \"focused on the fundamentals of launching and/or growing a small business\" and is available to National Guard and reservists and their family members; the Boots to Business program (started in 2012), which is \"an elective track within the Department of Defense's revised Training Assistance Program called Transition Goals, Plans, Success (Transition GPS) and has three parts: the Entrepreneurship Track Overview\u2014a 10-minute introductory video shown during the mandatory five-day Transition GPS course which introduces entrepreneurship as a post-service career option; Introduction to Entrepreneurship\u2014a two-day classroom course on entrepreneurship and business fundamentals offered as one of the three Transition GPS elective tracks; and Foundations of Entrepreneurship\u2014an eight-week, instructor-led online course that offers in-depth instruction on the elements of a business plan and tips and techniques for starting a business\"; the Boots to Business Reboot program (started in 2014), which assists veterans who have already transitioned to civilian life; and the Veterans Business Outreach Centers (VBOC) program, which provides veterans and their spouses management and technical assistance training at 15 locations, including assistance with the Boots to Business program, the development and maintenance of a five-year business plan, and referrals to other SBA resource partners when appropriate for additional training or mentoring services. ", "Prior to FY2016, Congress recommended appropriations for VBOCs and, in FY2014 and FY2015, for the Boots to Business initiative ($7.0 million in FY2014 and $7.5 million in FY2015). Funding for the OVBD's other veterans assistance programs were provided through the SBA's salaries and expenses account. ", "Starting in FY2016, Congress has recommended appropriations for OVBD's programs as a whole: $12.3 million in FY2016, FY2017, and FY2018, and $12.7 million in FY2019. This increase has not kept pace with inflation.", "OVBD expenditures in FY2015-FY2018 and anticipated OVBD expenditures in FY2019 are presented in the table's last column for comparative purposes.", "Recommended appropriations for VBOCs from FY2000-FY2015 are presented in Table 12 for historical comparisons. As the data indicate, recommended appropriations for VBOCs increased from $0.613 million in FY2000 to $3.000 million in FY2015. This increase has exceeded the rate of inflation. ", "OVBD expenditures in FY2000-FY2015 are presented in the table's last column for comparative purposes."], "subsections": []}, {"section_title": "7(j) Technical Assistance Program", "paragraphs": ["The SBA's 7(j) Technical Assistance Program provides \"a wide variety of management and technical assistance to eligible individuals or concerns to meet their specific needs, including: (a) counseling and training in the areas of financing, management, accounting, bookkeeping, marketing, and operation of small business concerns; and (b) the identification and development of new business opportunities.\" Eligible individuals and businesses include \"8(a) certified firms, small disadvantaged businesses, businesses operating in areas of high unemployment, or low income or firms owned by low income individuals.\"", "As shown in Table 13 , recommended appropriations for the 7(j) Technical Assistance Program have varied since FY2000, with increases in some years and decreases in others. Overall, the SBA's 7(j) Technical Assistance Program's recommended appropriations have decreased from $3.584 million in FY2000 to $2.800 million in FY2019. ", "7(j) Technical Assistance Program expenditures in FY2000-FY2018 and anticipated 7(j) Technical Assistance Program expenditures in FY2019 are presented in the table's last column for comparative purposes."], "subsections": []}, {"section_title": "Native American Outreach Program", "paragraphs": ["The SBA's Native American Outreach (NAO) program provides management and technical educational assistance to American Indians, Alaska natives, native Hawaiians, and \"the indigenous people of Guam and American Samoa \u2026 to promote entity-owned and individual 8(a) certification, government contracting, entrepreneurial education, and capital access.\" The program's management and technical assistance services are available to members of these groups living in most areas of the nation.", "As shown in Table 14 , the NAO program's recommended appropriations have varied somewhat since FY2003 (the first year it received recommended appropriations), ranging from $1.0 million to $2.0 million. The program's recommended appropriations have not kept pace with inflation. NAO program expenditures in FY2003-FY2018 and anticipated NAO expenditures in FY2019 are presented in the table's last column for comparative purposes."], "subsections": []}, {"section_title": "National Women's Business Council", "paragraphs": ["The National Women's Business Council (NWBC) is a bipartisan federal advisory council created to serve as an independent source of advice and counsel to the President, Congress, and the SBA on economic issues of importance to women business owners. The council's mission \"is to promote bold initiatives, policies, and programs designed to support women's business enterprises at all stages of development in the public and private sector marketplaces\u2014from start-up to success to significance.\"", "As shown in Table 15 , the recommended appropriation for the NWBC has increased from $0.598 million in FY2000 to $1.500 million in FY2019. This increase has exceeded the rate of inflation. ", "NWBC expenditures in FY2000-FY2018 and NWBC anticipated expenditures in FY2019 are presented in the table's last column for comparative purposes. "], "subsections": []}, {"section_title": "HUBZone Administration", "paragraphs": ["The HUBZone program helps small businesses located in designated Historically Underutilized Business Zones (HUBZones) to compete for federal contracts. Federal agencies may award contracts directly to HUBZone-certified small businesses through a sole-source contract, limit contact competitions to HUBZone-certified firms through a contract set-aside, or provide HUBZone-certified firms a price evaluation preference in full and open competitions.", "The HUBZone program was initially funded through the SBA's salary and expenses account. As shown in Table 16 , Congress started recommending an appropriation for the program in FY2004. This recommended appropriation remained relatively stable until FY2015, when it increased to $3.0 million. With this increase, the HUBZone program's recommended appropriations have exceeded inflation. ", "The HUBZone program's expenditures in FY2000-FY2018 and the HUBZone program's anticipated expenditures in FY2019 are presented in the table's last column for comparative purposes."], "subsections": []}, {"section_title": "The Entrepreneurial Development Initiative (Regional Innovation Clusters)", "paragraphs": ["The SBA reports that \"regional innovation clusters are on-the-ground collaborations between business, research, education, financing and government institutions that work to develop and grow a particular industry or related set of industries in a particular geographic region.\" The SBA has supported regional innovative clusters since FY2009, and the initiative has received recommended appropriations from Congress since FY2010.", "As shown in Table 17 , funding for the Entrepreneurial Development Initiative (Regional Innovation Clusters) has been reduced from a recommended appropriation of $10.0 million in FY2010 to $5.0 million in FY2019. The table's last column indicates that the SBA's expenditures for the initiative have often been less than the amount appropriated.", "The Trump Administration recommended in its FY2018 and FY2019 budget requests that the Entrepreneurial Development Initiative receive no appropriations."], "subsections": []}, {"section_title": "Entrepreneurship Education Initiative", "paragraphs": ["The SBA's Entrepreneurship Education initiative offers high\u2010growth small businesses in underserved communities \"a seven\u2010month executive leader education series\" consisting of \"more than 100 hours of specialized training, technical resources, a professional networking system, and other resources to strengthen their business model and promote economic development within urban communities.\" At the conclusion of the training, \"participants produce a three\u2010year strategic growth action plan with benchmarks and performance targets that help them access the necessary support and resources to move forward for the next stage of business growth.\"", "As shown in Table 18 , the Entrepreneurship Education initiative received its first recommended appropriation from Congress in FY2014 ($5.0 million), $7.0 million in FY2015, $10.0 million in FY2016, FY2017, and FY2018, and $3.5 million in FY2019. "], "subsections": []}, {"section_title": "Growth Accelerator Initiative", "paragraphs": ["The SBA describes growth accelerators as \"organizations that help entrepreneurs start and scale their businesses.\" Growth accelerators are typically run by experienced entrepreneurs and help small businesses access seed capital and mentors. The SBA claims that growth accelerators \"help accelerate a startup company's path towards success with targeted advice on revenue growth, employee growth, sourcing outside funding and avoiding pitfalls.\" ", "As shown in Table 19 , the Growth Accelerator initiative received its first recommended appropriation from Congress in FY2014 ($2.5 million), $4.0 million in FY2015, $1.0 million in FY2016, FY2017, and FY2018, and $2 million in FY2019. It provides $50,000 matching grants each year to universities and private sector accelerators \"to support the development of accelerators and their support of startups in parts of the country where there are fewer conventional sources of access to capital (i.e., venture capital and other investors).\"", "The Trump Administration recommended in its FY2018 and FY2019 budget requests that the Growth Accelerator Initiative receive no appropriations."], "subsections": [{"section_title": "Appendix. SBA Appropriations, FY1954-FY1999", "paragraphs": [], "subsections": []}]}]}]}]}}
{"id": "R45716", "title": "The Potential Decline of Cash Usage and Related Implications", "released_date": "2019-05-10T00:00:00", "summary": ["Electronic forms of payment have become increasingly available, convenient, and cost efficient due to technological advances in digitization and data processing. Anecdotal reporting and certain analyses suggest that businesses and consumers are increasingly eschewing cash payments in favor of electronic payment methods. Such trends have led analysts and policymakers to examine the possibility that the use and acceptance of cash will significantly decline in coming years and to consider the effects of such an evolution.", "Cash is still a common and widely accepted payment system in the United States. Cash's advantages include its simplicity and robustness as a payment system that requires no ancillary technologies. In addition, it provides privacy in transactions and protection from cyber threats or financial institution failures. However, using cash involves costs to businesses and consumers who pay fees to obtain, manage, and protect cash and exposes its users to loss through misplacement, theft, or accidental destruction of physical currency. Cash also concurrently generates government revenues through \"profits\" earned by producing it and by acting as interest-free liabilities to the Federal Reserve (in contrast to reserve balances on which the Federal Reserve pays interest), while reducing government revenues by facilitating some tax avoidance.", "The relative advantages and costs of various payment methods will largely determine whether and to what degree electronic payment systems will displace cash. Traditional noncash payment systems (such as credit and debit cards and interbank clearing systems) involving intermediaries such as banks and central banks address some of the shortcomings of cash payments. These systems can execute payments over physical distance, allow businesses and consumers to avoid some of the costs and risks of using cash, and are run by generally trusted and closely regulated intermediaries. However, the maintenance and operation of legacy noncash systems involve their own costs, and the intermediaries charge fees to recoup those costs and earn profits. The time it takes to finalize certain transactions\u2014including crediting customer accounts for check or electronic deposits\u2014can lead to consumers incurring additional costs. In addition, these systems involve cybersecurity risks and generally require customers to divulge their private personal information to gain system access, which raises privacy concerns.", "To date, the migration away from cash has largely been in favor of traditional noncash payment systems; however, some observers predict new alternative systems will play a larger role in the future. Such alternative systems aim to address some of the inefficiencies and risks of traditional noncash systems, but face obstacles to achieving that aim and involve costs of their own. Private systems using distributed ledger technology, such as cryptocurrencies, may not serve the main functions of money well and face challenges to widespread acceptance and technological scalability. These systems also raise concerns among certain observers related to whether these systems could facilitate crime, provide inadequate protections to consumers, and may adversely affect governments' ability to implement or transmit monetary policy. The potential for increased payment efficiency from these systems is promising enough that certain central banks have investigated the possibility of issuing government-backed, electronic-only currencies\u2014called central bank digital currencies (CBDCs)\u2014in such a way that the benefits of certain alternative payment systems could be realized with appropriately mitigated risk. How CBDCs would be created and function are still matters of speculation at this time, and the possibility of their introduction raises questions about the appropriate role of a central bank in the financial system and the economy.", "If the relative benefits and costs of cash and the various other payment methods evolve in such a way that cash is significantly displaced as a commonly accepted form of payment, that evolution could have a number of effects, both positive and negative, on the economy and society. Proponents of reducing cash usage (or even eliminating it all together and becoming a cashless society) argue that doing so will generate important benefits, including potentially improved efficiency of the payment system, a reduction of crime, and less constrained monetary policy. Proponents of maintaining cash as a payment option argue that significant reductions in cash usage and acceptance would further marginalize people with limited access to the financial system, increase the financial system's vulnerability to cyberattack, and reduce personal privacy. Based on their assessment of the magnitude of these benefits and costs and the likelihood that market forces will displace cash as a payment system, policymakers may choose to encourage or discourage this trend."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "The Once, But Perhaps Not Future, King", "paragraphs": ["Because of technological advances in digitization and data processing, electronic forms of payment have become increasingly available, convenient, and cost efficient. Established technologies, such as credit and debit cards, have long been a popular payment option. In addition, new payment methods (e.g., PayPal's Venmo app and Square's point-of-sale hardware, among others) use underlying traditional banking and payments systems to make electronic payments less expensive and more available to individuals and small businesses. Newer digital currencies, such as cryptocurrencies, offer alternative (though not yet widely adopted) options that have a high degree of independence from traditional systems.", "Although cash remains an important method of payment in the United States (see Figure 1 ), anecdotal reporting suggests that various electronic payment systems have become so effective and inexpensive relative to cash payments that some U.S. businesses\u2014even those at which sales generally have a low dollar value\u2014are increasingly choosing not to accept cash. In some developed countries, such as Sweden, cash payments are becoming relatively scarce. In addition, a number of central banks worldwide are examining the possibility of issuing government-backed digital currencies that exist only electronically. These trends suggest that due to buyer or seller preference or government policy, the role of cash in the payment system may continue to decline, perhaps significantly, in coming years.", "Some observers have examined the consequences of an evolution away from cash. Proponents of reducing the use of physical currency (or even eliminating it all together and becoming a cashless society ) argue that it will generate important benefits, including potentially improved efficiency of the payment system, a reduction of crime, and less constrained monetary policy. Proponents of maintaining cash as a payment option argue that significant reductions in cash usage and acceptance would further marginalize people with limited access to the financial system, increase the financial system's vulnerability to cyberattack, and reduce personal privacy. Given developments and debate in this area, Congress may consider policy issues related to the declining use of cash relative to electronic forms of payment.", "This report is divided into two parts. The first part analyzes cash and noncash payment systems, and the second analyzes potential outcomes if cash were to be significantly displaced as a commonly accepted form of payment. Part I describes the characteristics of cash and the various electronic payment systems that could potentially supplant cash. The noncash payment systems include traditional electronic payment systems (such as credit cards or payment apps) and alternative electronic payment systems, focusing on private systems using distributed ledger technology (such as cryptocurrencies) and central bank digital currencies (which are only under consideration by central banks at this time). Part I also examines the advantages and costs specific to each payment system and the potential obstacles to the adoption of alternative electronic payment systems. Part II of this report analyzes the potential implications of a reduced role of cash payments in the economy, including potential benefits, costs, and risks. The report also includes an Appendix that presents two international case studies of economies in which noncash payment systems rapidly expanded."], "subsections": []}, {"section_title": "Part I: Analysis of Cash and Noncash Payment Systems", "paragraphs": ["This section provides analysis of cash, traditional noncash payment systems, and potential alternative payment systems. It describes the characteristics, presents usage data, and analyzes the advantages and costs of each system. It also includes a discussion on the potential decline in cash usage and a short inset on the legality of businesses' refusing to accept cash. "], "subsections": [{"section_title": "Physical Currency\u2014Cash", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["How well something serves as money in a payment system depends on how well it serves as (1) a medium of exchange, (2) a unit of account, and (3) a store of value. To function as a medium of exchange , the thing must be tradable and agreed to have value. To function as a unit of account , the thing must act as a good measurement system. To function as a store of value , the thing must be able to purchase approximately the same value of goods and services at some future date as it can purchase now.", "Currently, cash continues to serve the three functions of money well as part of a robust, physical payment system. Physical currency can be carried easily in a pocket and thus is tradeable. Each unit of currency (e.g., a dollar) is identical and can be divided into fractions (e.g., cents) of the whole, making dollars effective units of account. A bill or coin, when well cared for, will not degrade substantively for years, meaning it can function as a store of value. ", "In the United States, paper currency and coins are produced by the Bureau of Engraving and Printing (BEP) and the United States Mint, respectively, both of which are units within the Department of the Treasury (Treasury). The Federal Reserve (the Fed) distributes the currency and coin to banks, savings associations, and credit unions upon request, and the banks in turn make the cash available to their customers. When a bank orders cash, the Fed deducts the amount from the bank's Fed account. The revenues and costs to the government from this system are examined in the \" Cash Effects on Government \" section below.", "Data suggests that the demand for cash in the United States has continued to grow despite the introduction of new payment services and systems. Fed data indicates that the amount of currency in circulation has increased steadily over at least the past 20 years (see Figure 2 ). As of December 31, 2018, there were more than 43 billion notes (more commonly called bills ) worth over $1.67 trillion in circulation. The Fed determines how many new notes \"are needed to meet the public's demand [, which]\u2026reflects the Board's assessment of the expected growth rates for payments of currency to and receipts of currency from circulation.\"", "This growth in demand is not wholly surprising, because demand for cash would be expected to grow as does the economy, the population, and price levels. In addition, the demand for cash is growing because certain people may be increasingly using it solely as a store of value or safe investment (imagine the proverbial risk-averse saver keeping money under the mattress), rather than to make purchases. In addition, there remains a high demand for U.S. currency abroad, both as a store of value and medium of exchange. ", "Some evidence suggests people are using cash for payments less often. For example, according to preliminary findings of a Fed survey, cash transactions in the United States fell from 40.7% of all transactions in 2012 to 32.5% in 2015. Taken together with data from the triennial Federal Reserve Payment S tudy , these survey results suggest the number of cash transactions during that time fell from roughly 84.8 billion per year to 69.4 billion. However, Fed economists have subsequently noted that significant changes in the survey methodology and unaccounted for effects from economic conditions means the eight-point decline in the share of transactions \"almost surely does not accurately reflect actual changes in consumer preferences for cash.\" After making adjustments to account for these factors, those economists estimated the decline in the percentage of transactions that were in cash was roughly half of the initially estimated decline in the share of cash transactions. ", "The most recent data indicates that Americans used cash for 31% of their transactions in 2016, with stronger cash preference for small, in-person transactions (60% of in-person transactions under $10)."], "subsections": []}, {"section_title": "Advantages and Costs of Cash", "paragraphs": [], "subsections": [{"section_title": "Cash Advantages for Consumers and Businesses", "paragraphs": ["One of the main benefits of cash is that it is a simple, easy, robust payment mechanism that requires no ancillary technologies. Payers and payees validate and settle transactions simply by physically exchanging the currency; the consumer needs no magnetic-stripe card or mobile device, and the seller does not need a card-reading machine or other payment-receiving device. Relatedly, some observers assert cash provides a security against potential disruptions to electronic payment systems. For example, in the event of a significant cyberattack or extended power outage, cash could continue to serve the functions of money while electronic payment systems could not. ", "Cash also acts as a safe asset in which to invest savings and its usage can involve a high degree of privacy, features that will be examined in more detail in the \" Potential Costs and Risks of a Reduced Role for Cash \" section below. In addition, holding cash might impart other psychological benefits to a consumer, such as feelings of greater control over budgeting and associations with wealth."], "subsections": []}, {"section_title": "Cash Costs for Consumers and Businesses", "paragraphs": ["Using and accepting cash involves certain costs to consumers and businesses. For example, consumers may have to pay fees to withdraw cash from automatic teller machines (ATMs). Banks with more than $1 billion in assets are required to report their revenue from ATM fees, and a Congressional Research Service (CRS) analysis indicates those banks collected at least $1.9 billion in ATM fees in 2018. Other costs\u2014including consumer losses through theft, misplacement, or accidental destruction of cash\u2014are more difficult to estimate. ", "Businesses must pay for cash management services, such as cash delivery with armored trucks (an industry with estimated annual U.S. revenues of $2.8 billion) and security systems to dissuade thieves or robbers from attempting to steal cash kept on the retailer's premises. Despite these efforts, U.S. businesses lose about $40 billion in employee cash thefts per year. Similar to consumer's costs, quantifying all the costs of cash to businesses presents challenges, as certain costs are not straightforward and easily measurable. For example, some portion of retail staff and managers' paid time is spent counting cash and reconciling tills."], "subsections": []}, {"section_title": "Cash Effects on Government Revenues", "paragraphs": ["In addition to its impacts on consumers and businesses, cash directly affects government revenues through three main mechanisms: (1) seigniorage (i.e., the \"profit\" the government makes by producing cash), (2) Federal Reserve remittances to the Treasury, and (3) tax evasion. Two of these mechanisms\u2014seigniorage and remittances\u2014increase government revenues. The third mechanism\u2014tax evasion, facilitated by the anonymous and difficult-to-trace nature of cash transactions\u2014decreases government revenue. ", "Revenue Generating: Seignoriage . In general, the value of the physical currency produced by the government exceeds the cost incurred to produce it. For example, a $100 bill costs about 14 cents to print, generating revenues $99.86 greater than cost. The profit generated by this difference is called seigniorage, and this income would decrease if demand for cash were to fall. In FY2017, the U.S. Mint generated $391.5 million in net income from circulating coins and the U.S. Bureau of Engraving and Printing generated revenues $693 million greater than expenses. ", "Revenue Generating: Fed Remittances . The second source of cash-generating revenue is remittances, which are transferred from the Fed to the U.S. Treasury. Any income the Fed earns after expenses and dividends paid to member banks, it remits to the Treasury (in 2017, the amount was $80.6 billion), and hence becomes a source of revenue for the federal government. A significant expense for the Fed is the interest it pays on depository institutions' deposits held in their Fed accounts. Such payments accounted for $28.9 billion of the Fed's $35.4 billion total expenses in 2017. However, currency is a Fed liability on which it pays no interest. Recall that when a bank orders cash from the Fed, the Fed deducts the amount from the bank's account. Thus, the more cash that is in circulation, the less interest the Fed must pay, and the greater its remittances to Treasury.", "In January 2019, there was approximately $1.7 trillion of currency in circulation, and the Fed (as of this publication) paid an annual interest rate of 2.4% on reserve balances. By these measures, if all currency were instead bank reserve balances held at the Fed, it could increase Fed expenses (and thus reduce government revenues) by more than $40 billion a year. If interest rates on reserves (which change when the Fed alters monetary policy) rose or fell, then expenses would increase or decrease, respectively, in this scenario.", "Revenue Reducing: Tax Evasion . Because cash leaves no electronic record, wage earners and businesses are able to underreport (in general, illegally) how much cash they receive in order to reduce their tax payments. Thus, cash contributes to the tax gap \u2014the difference between what the government is owed and what is actually paid. The most recent Internal Revenue Service estimate released in 2016 examined the tax gap for the years 2008-2010, and found that the gap due to underreporting averaged $387 billion a year. This estimate does not directly measure how much underreporting is facilitated by cash payments, and the figure for recent years is likely to be different. However, it provides a general context for how much tax revenue the government does not collect due to underreporting that is at least in part made possible by cash transactions."], "subsections": []}]}, {"section_title": "The Potential Decline of Cash Usage", "paragraphs": ["Businesses have long set conditions under which they would not accept cash. For example, certain businesses refuse to accept high-denomination bills. However, according to anecdotal reporting, retail businesses are increasingly deciding that the costs of transacting in cash are high enough that they would rather not accept it at all. Notably, this is occurring at businesses at which transactions are typically in-person for small dollar amounts\u2014traditionally viewed as the type of transactions for which cash is the least costly option. If these stories are in fact indicative of a sustained trend, widespread non-acceptance of cash could have a variety of effects on consumers, businesses, as well as society and the economy at large. One particular effect that has drawn significant attention, as well as litigation, is that non-acceptance of cash could potentially marginalize those that have limited access to the financial system or mobile technological devices. This issue is examined in the \" Lack of Financial Access for Certain Groups \" section later in the report."], "subsections": []}]}, {"section_title": "Traditional Noncash Payment Systems", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["Were cash to decline as a payment system, the most likely replacement\u2014at least at the current time\u2014would appear to be traditional noncash, electronic payment systems, such as debit cards, credit cards, or payment mobile apps. ", "In traditional noncash payment systems like those that are prevalent today, participants hold their money in an account at a bank or other financial intermediary that maintains accurate ledgers of how much money each customer has available. To make a payment, the payer instructs (using a physical check or an electronic message) the intermediary to transfer money to the recipient's account. If the recipient holds an account at a different intermediary, those intermediaries will send messages to each other via messaging networks connecting them, instructing each to make the necessary changes to their ledgers. The intermediaries validate the transaction, ensure the payer has sufficient funds for the payment, deduct the appropriate amount from the payer's account, and add that amount to the payee's account. For example, in the United States, a retail consumer may initiate an electronic payment by swiping a debit card, at which time an electronic message is sent over a network instructing the purchaser's bank to send payment to the seller's bank. Those banks then make the appropriate changes to their account ledgers (possibly using the Fed's payment system) reflecting that value has been transferred from the purchaser's account to the seller's account.", "As with physical currency, digital entries in account ledgers can serve the three functions of money well for use in payments. Instructions to change entries in a ledger can easily be sent, making the values in the ledger easily tradable. Numerical entries can be denominated in identical and divisible units, making them good units of account. Because numbers in a ledger can remain unchanged during periods when no transactions are made, they can serve as a store of value. ", "According to the most recent complete Federal Reserve Payment S tudy on noncash payments, the number of traditional noncash payments made in the U.S. totaled more than 144 billion transactions with a value of almost $178 trillion in 2015. These included payments via debit cards (69.5 billion transactions worth $2.56 trillion), credit cards (33.8 billion transactions worth $3.16 trillion), automated clearing house payments (ACH; 23.5 billion transactions worth $26.83 trillion), and check payments (17.3 billion payments worth $26.83 trillion). Between 2012 and 2015, the number of transactions of the three electronic systems, debit, credit, and ACH, grew at annual rates of 7.1%, 8.0%, and 4.9%, respectively. Their values grew by 6.8%, 7.4%, and 4.0%, respectively. Check payments declined by an annual rate of 4.4% by number and 0.5% by value. According to a recent supplement to that study, both the growth of electronic payments and the decline of check payments accelerated in 2017."], "subsections": []}, {"section_title": "Advantages and Costs of Traditional Noncash Payment Systems", "paragraphs": [], "subsections": [{"section_title": "Traditional Noncash Payment System's Advantages", "paragraphs": ["Payment based on physically exchanging currency has some notable shortcomings that can be addressed by a payment system based on maintaining account ledgers. One is that physical currency requires both the payer and the payee to either (1) be physically near each other, allowing the physical currency to pass from the possession of the former into the possession of the latter; or (2) have a sufficient trust in each other that the payee believes an assurance that he or she will receive the currency later. Another shortcoming is that holders of physical currency may have little recourse if it is lost, stolen, or accidentally destroyed. If, instead, money is exchanged by making valid changes in ledgers maintained by trusted intermediaries, the exchange can be accomplished without the risk of lost, stolen, or damaged currency. ", "In addition, noncash systems can make payments fast, easy, and convenient. Using them decreases the need for people to make regular estimations of how much cash they need to have on a particular day, the frequency of trips to the bank or ATM to get cash, and the amount of time waiting for cashiers to make change. Instead, a plastic card or an app on a mobile device can replace those activities with a card swipe or button push. ", "As information technology has progressed, the convenience has increased and the option to use electronic payments has become nearly ubiquitous. Until fairly recently, it was not uncommon for a retail establishment to reject card payments. Now, services such as Venmo, Apple Pay, and Google Pay, and card-reading devices, such as those made by Square, have made electronic payment options increasingly available, even for individuals to accept electronic payments from other individuals. The previously mentioned anecdotal reporting suggests there is a growing number of establishments that only accept electronic payments.", "For these systems to work well, participants must trust that banks and other intermediaries are keeping accurate ledgers that are changed only for valid transfers. Otherwise, an individual's money could be lost or stolen if a bank records the account as having an inaccurately low amount or transfers value without his or her permission. Another advantage of systems using traditional intermediaries is that they have a number of features that generate a high degree of trust and accuracy. Banks and other intermediaries have both a market and governmental incentive to be accurate. A bank or financial intermediary that does not have a good reputation for protecting a customer's money and processing transactions accurately would likely lose customers. In addition, governments typically subject banks to laws and regulations designed in part to ensure that banks are well run and that the money they hold is safe. As such, banks take substantial measures to ensure security and accuracy.", "In addition, intermediaries generally are required to provide certain protections to consumers involved in electronic transactions, in part to protect them from losses resulting from unauthorized transfers. For example, the Electronic Fund Transfer Act ( P.L. 95-630 ) limits consumers' liability for unauthorized transfers made using their accounts. Similarly, the Fair Credit Billing Act ( P.L. 93-495 ) requires credit card companies to take certain steps to correct billing errors, including when the goods or services a consumer purchased are not delivered as agreed. Both laws also require financial institutions to make certain disclosures to consumers related to the costs and terms of using an institution's services. "], "subsections": []}, {"section_title": "Traditional Noncash Payment System's Costs", "paragraphs": ["Significant costs and physical infrastructure underlie systems for electronic money transfers to ensure the systems' integrity, performance, and availability. For example, payment system providers operate and maintain robust digital networks to connect retail locations with banks. The Fed operates and maintains electronics networks to connect banks to itself and each other. These intermediaries store and protect huge amounts of data. Because these intermediaries are generally highly regulated, they incur regulatory compliance costs. Intermediaries recoup the costs associated with these systems and regulations and earn profits by charging fees directly when the system is used (such as the fees a merchant pays to have a card reading machine and \"swipe fees\" on each card transaction) or by charging fees for related services (such as checking account fees).", "It is difficult to quantify how much traditional noncash payment systems cost and what portion of those costs is passed on to consumers and businesses. Performing a quantitative analysis is beyond the scope of this report. What bears mentioning here is that certain costs of traditional payment systems\u2014and, in particular, the fees intermediaries in those systems charge\u2014have at times been high enough to raise policymakers' concern and elicit policy responses. ", "For example, in response to businesses' assertions that Visa and MasterCard had exercised market power in setting debit card swipe fees at unfairly high levels, Congress included Section 1075 in the Dodd-Frank Consumer Protection and Wall Street Reform Act (Dodd-Frank Act; P.L. 111-203 )\u2014sometimes called the Durbin Amendment. Section 1075 directs the Fed to limit debit card swipe fees charged by banks with assets of more than $10 billion. ", "In addition, studies on unbanked and underbanked populations cite the fees associated with traditional bank accounts, a portion of which may be the result of providing payment services, as a possible cause for those populations' limited interaction with the traditional banking system.", "Although electronic payment systems protect customers from physical theft and are subject to a complex and sometimes overlapping array of state and federal laws, regulators, and regulations related to cybersecurity, they could nevertheless expose individuals to cyber-theft and identity theft. In addition, the systems themselves could be susceptible to disruption from cyberattacks. ", "The occurrence of successful hacks of banks and other financial institutions, wherein huge amounts of individuals' personal information are stolen or compromised, illustrates cyber-related risks. For example, in 2014, JPMorgan Chase, the largest U.S. bank, experienced a data breach that exposed financial records of 76 million households. However, no consensus exists on how best to reduce the occurrence of such incidents, and whether current cybersecurity measures and regulatory frameworks are effective and efficient in mitigating cybersecurity risk is an open question. For a more detailed examination of cybersecurity at financial institutions, see CRS Report R44429, Financial Services and Cybersecurity: The Federal Role , by N. Eric Weiss and M. Maureen Murphy. ", "In addition, although the traditional electronic payment system is sufficiently fast and convenient to complete many transactions, other transactions can involve problematic delays. One such delay that can be particularly costly for consumers is the lag between when a payment (such as a paycheck) is deposited and when the full amount of the funds are available to the individual. Depending on factors related to which networks the payer's and payee's bank uses to process payments, it can take up to two business days (or more under certain circumstances) after a deposit is made for banks to fully validate, process, and settle the deposit. ", "Settlement delays can create a situation in which an individual has made a deposit that would give sufficient funds to pay a bill that is due, but nevertheless may overdraw the account because the deposit is awaiting processing. In such a situation, the individual faces a choice between costly outcomes\u2014a late payment penalty on the bill, an overdraft fee on the bank account, or a fee from a check cashing or payday lending service. These costs are likely disproportionately borne by low- or moderate-income individuals who typically have low balances in their bank accounts. Faster or immediate payment processing could potentially reduce or eliminate costs incurred by individuals facing this situation.", "While delays in the payment system may seem anachronistic at a time when digital messages can be sent and data processed nearly instantaneously, the fact remains that aspects of the systems, networks, and infrastructures used today (including those operated by the Fed) were developed and deployed decades ago. Both the Fed and private institutions are working to increase system speed and efforts are underway to make real-time payments in the United States the norm. However, payment system operators arguably have little incentive to achieve faster or real-time payments because (1) they are in compliance with the current requirement facing banks pursuant to the Expedited Funds Availability Act of 1987 ( P.L. 108-100 ) to generally make most types of deposits available by the second business day, (2) updating legacy systems is costly for the institutions that operate them, and (3) banks are generating revenue through overdraft fees. "], "subsections": []}]}]}, {"section_title": "Alternative Electronic Payment Systems", "paragraphs": ["Currently, it appears that the traditional noncash payment systems described above likely would replace cash payments should cash usage significantly decline. However some observers, citing the various costs and disadvantages associated with those systems\u2014including delays in processing as well as reliance on traditional financial intermediaries\u2014point to alternative electronic payment systems as potential dominant payment systems of the future. ", "Cryptocurrenc y , such as Bitcoin , is the most well-known of these alternatives. Described in more detail below, cryptocurrencies use blockchain technology and public or \"distributed\" ledgers to achieve validated transfers of digital representations of value. The use of these systems to make payments is quite rare relative to cash and traditional systems, and the role they will play in the future is speculative. Nevertheless, their potential to significantly affect the usage of cash and traditional systems for payments has drawn the attention of central banks. Some central banks are examining whether they should create a comparable payment system of digital currencies to offer the advantages of those systems themselves and to avoid being bypassed in the future.", "This section briefly describes (1) existing private alternative electronic payment systems and (2) possible future central bank-run systems. With respect to alternative electronic payment systems, the section examines their potential advantages, costs, and obstacles to their widespread adoption. With respect to a potential central bank-run system, which is more speculative at this time, the section examines potential advantages and obstacles to their widespread adoption and uncertainties they present. "], "subsections": [{"section_title": "Private Payment Systems Using Distributed Ledgers", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["In general, private electronic payment systems using distributed ledgers allow individuals to establish an account identified by a string of numbers and characters (often called an address or public key ) that is paired with a password or private key known only to the account holder. A transaction occurs when two parties agree to transfer digital currency (perhaps in payment for a good or service) from one account to another. The buying party will \"unlock\" the currency used as payment with her private key, allowing some amount to be transferred from her account to the seller's. The seller then \"locks\" the currency in her account using her own private key. From the perspective of the individuals using the system, the mechanics are similar to authorizing payment on any website that requires an individual to enter a username and password. In addition, companies offer applications or interfaces that users can download onto a device to make transacting in cryptocurrencies more user-friendly.", "Many digital currency platforms use blockchain technology to validate changes to the ledgers. In a blockchain-enabled system, payments are validated on a public or \"distributed\" ledger by a decentralized network of system users and cryptographic protocols. In these systems, parties that otherwise do not know each other can exchange something of value (i.e., a digital currency) not because they trust each other but because they trust the platform and its protocols to prevent invalid changes to the ledger. A notable feature of transfers using blockchain is that they require no centralized, trusted intermediary such as a bank, government central bank, or other financial or government institution. Proponents envision these systems could achieve instantaneous transfers, although they currently require minutes or hours to finalize transfers. ", "The decentralized nature of digital currencies and their recent proliferation poses challenges to performing industry-wide analysis of their use in payments. For example, as of August 27, 2018, one industry group purported to track trading prices of 1,890 cryptocurrencies alone. For brevity and clarity, this report uses statistics on Bitcoin\u2014the first and most well-known cryptocurrency, the total value of which accounts for more than half of the industry as a whole \u2014as an illustrative example of a digital currency's use in payments.", "In January 2017, the price of a Bitcoin on an exchange was about $993. The price surged during the year, peaking at about $19,650 in December 2017, an almost 1,880% increase. However, the price then dramatically declined. Overall, the price of Bitcoin has experienced a high degree of volatility. On March 12, 2018, the price of Bitcoin was $3,860, down 80% from its peak. More recently, the price rebounded and was $5,948 on May 8, 2019. ", "Although price data on Bitcoin illustrates the public interest in and overall demand for this cryptocurrency, it is a poor indicator of how often it is being exchanged for goods and services (i.e., how often it is being used as money). Certain analyses appear to show that digital currencies are not being widely used and accepted as payment for goods and services, but rather as investment vehicles. ", "The number of Bitcoin transactions may serve as a better indicator\u2014though a flawed one\u2014of the use of Bitcoin as a payment system. This number reveals how many times Bitcoins are transferred between accounts each day, and data indicates the number of transactions is miniscule compared with those of traditional systems. For example, in 2019 through March 12, the Bitcoin system averaged about 310,000 transactions per day globally, a pace that would result in about 113 million transactions per year. Recall that in the United States alone, more than 144 billion traditional (nearly 1,275 times as many) noncash payments were made in 2015. Moreover, one problem with this measure it that it is a count of how many times two parties have exchanged Bitcoin, not a count of how many times Bitcoin has been used to buy something. Some portion of those exchanges, possibly a significantly large portion, is driven by investors giving fiat currency to an exchange to buy and hold the Bitcoin as an investment. In those transfers, Bitcoin is not acting as money (i.e., not being exchanged for a good or service)."], "subsections": []}, {"section_title": "Potential Advantages, Obstacles, and Costs to Private Payment Systems Using Distributed Ledgers", "paragraphs": ["Advantages of Private Payment Systems Using Distributed Ledgers . As discussed in an earlier section, traditional electronic payment systems involve a number of intermediaries, such as government central banks and private financial institutions. To carry out transactions, these institutions operate and maintain extensive electronic networks and other infrastructure, employ workers, and require time to finalize transactions. To meet costs and earn profits, these institutions charge various user fees. Cryptocurrency advocates anticipate that a decentralized payment system operated through the internet could be less costly than traditional payment systems and existing infrastructures. However, whether such efficiencies can or will be achieved remains an open question.", "In addition, opening a bank account or otherwise using traditional electronic payment systems generally requires an individual to divulge to a financial institution certain basic personal information, such as name, Social Security number, and birthdate. Financial institutions store and may analyze or share this information. In some instances hackers have stolen personal information from financial institutions, causing concerns over how well these institutions can protect sensitive data. Individuals seeking a higher degree of privacy or control over their personal data than that afforded by traditional systems may choose to use an alternative digital currency system that provides a degree of pseudonymity or anonymity.", "Although inflation in the United States and other developed economies has been low in recent decades, some individuals may nevertheless believe that nontraditional digital money may maintain its value better than government-backed money in traditional systems. The dollar and most modern currencies are fiat money\u2014that is, money that derives value based solely on government decree. Historically, incidents of hyperinflation in certain countries have seen government-backed currencies lose most or nearly all of their value. Thus, some individuals may judge the probability of their fiat money losing a significant portion of its value to be undesirably high. These individuals may place greater trust in the ability of a decentralized network using cryptographic protocols that limit the creation of new money to maintain stable value of money than in the ability of government institutions to do so.", "Obstacles to Widespread Adoption of Private Payment Systems Using Distributed Ledgers . Several characteristics of cryptocurrency undermine its ability to serve the functions of money in a payment system. Currently, a relatively small number of businesses and individuals use or accept cryptocurrency for payment. As discussed above, Bitcoin transactions have averaged about 310,000 per day globally. Cryptocurrency may be used as a medium of exchange less frequently than traditional money for several reasons. Unlike the dollar and most other government-backed currencies, cryptocurrencies are not legal tender, meaning creditors are not legally required to accept them to settle debts. Consumers and businesses also may be hesitant to place their trust in these systems because they have limited understanding of them. Relatedly, consumers and businesses may have sufficient trust in and be generally satisfied with traditional payment systems.", "The recent high volatility in the price of many cryptocurrencies undermines their ability to serve as a unit of account and a store of value. Cryptocurrencies can have significant value fluctuations within short periods of time; as a result, pricing goods and services in units of cryptocurrency would require frequent repricing and likely would cause confusion among buyers and sellers.", "Whether cryptocurrency systems are scalable \u2014meaning their capacity can be increased in a cost-effective way without loss of functionality\u2014is uncertain. At present, the systems underlying cryptocurrencies do not appear capable of processing the number of transactions that would be required of a widely adopted, global payment system. One concern involves the significant energy consumption required to run and cool the computers that validate the transactions on these platforms.", "Costs of Private Payment Systems Using Distributed Ledgers . As the energy consumption of a digital currency system demonstrates, these systems are not costless. In addition to energy, they require computer hardware and facilities. Often making payments on these platforms involves paying fees. Whether these direct economic costs of using the system are fixed or\u2014as they develop and mature\u2014become less than existing systems is an open question.", "Digital currency systems, at least as currently designed and regulated, also might impose other costs on society. Some critics of these systems fear their pseudonymous, decentralized nature may provide a new avenue for criminals to launder money, evade taxes, or sidestep financial sanctions. For example, Bitcoin was the currency used on the internet-based, illegal drug marketplace and Bitcoin escrow service called Silk Road. This marketplace facilitated more than 100,000 illegal drug sales from approximately January 2011 to October 2013, at which time the government shut down the website and arrested the individuals running the site.", "Consumer groups and other observers are also concerned that digital currency users are inadequately protected against unfair, deceptive, and abusive acts and practices. The way cryptocurrencies are sold, exchanged, or marketed can subject cryptocurrency exchanges or other cryptocurrency-related businesses to generally applicable consumer protection laws, and certain state laws and regulations are being applied to cryptocurrency-related businesses. However, other laws and regulations aimed at protecting consumers engaged in electronic financial transactions may not apply. ", "For example, the Electronic Fund Transfer Act of 1978 (EFTA; P.L. 95-630 ) requires traditional financial institutions engaging in electronic fund transfers to make certain disclosures about fees, correct errors when identified by the consumer, and limit consumer liability in the event of unauthorized transfers. Because no bank or other centralized financial institution is involved in digital currency transactions, EFTA generally has not been applied to these transactions. In addition, the laws and regulations that do apply generally have not been implemented specifically to address digital currencies or related businesses. Whether the current regulatory regime applied to digital currency transactions, but originally implemented for different financial activities (e.g., traditional money transmission), is effective and efficient is a debated issue.", "Finally, some central bankers and other experts and observers have speculated that the widespread adoption of cryptocurrencies could affect the ability of the Fed and other central banks to implement and transmit monetary policy. The Fed conducts monetary policy with the goals of achieving price stability and low unemployment. Like other central banks it achieves its goals by, putting it simply, controlling the amount of money in circulation in the economy. If one or more additional currencies that the government did not control the supply of were also prevalent and viable payment options, it could limit central banks' ability to transmit monetary policy to financial markets and the real economy. In this scenario, central banks likely would have to make larger adjustments to the fiat currency they do control to have the same effect as previous adjustments. Another possibility is that they would have to start buying and selling the digital currencies themselves in an effort to affect the availability of these currencies. These risks have led some central banks and other observers to suggest that perhaps central banks could issue their own digital currencies."], "subsections": []}]}, {"section_title": "Central Bank Digital Currencies", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The risks and challenges posed by private digital currencies have led some observers to suggest that perhaps central banks should offer their own central bank digital currencies (CBDCs) to realize certain hoped-for efficiencies in the payment system in a way that would be \"safe, robust, and convenient.\" To date, no country has successfully created a CBDC for payment use by the general public. ", "The extent to which a central bank could or would want to create a new, digital-only payment system likely would be weighed against the consideration that these government institutions already have trusted digital payment systems in place. Because of such considerations, the exact form that CBDCs would take could vary across a number of features and characteristics. Nevertheless, some central banks are examining the idea of CBDCs and the possible benefits and issues they may present. ", "For the purposes of this discussion, this report examines a CBDC that would be available to consumers for retail payments. Some proposals would limit CBDCs to wholesale payments between banks and other financial institutions."], "subsections": []}, {"section_title": "Potential Advantages, Obstacles, and Uncertainties of CBDCs", "paragraphs": ["Potential Advantages of CBDCs . Proponents of CBDCs generally argue they could provide efficiency gains over traditional legacy systems and contend that central banks could use the technologies underlying digital currencies to deploy a faster, less costly government-supported payment system. ", "Observers have speculated that a CBDC could take the form of a central bank allowing individuals to hold accounts directly at the central bank. Advocates argue that a CBDC created in this way could increase systemic stability by imposing additional discipline on commercial banks. Because consumers would have the alternative of safe deposits made directly with the central bank, commercial banks likely would have to offer interest rates and limit risks at levels necessary to attract deposits above any deposit insurance limit.", "In addition, CBDCs could increase government revenue through a seignoriage-like mechanism. A more expansive definition of seignoriage is the income government obtains from having government liabilities act as money. Physical money\u2014because it is liquid and low-risk\u2014earns no interest rate and carries a cost to produce. Money\u2014both physical and electronic in the traditional system\u2014is also a balance sheet liability to the issuing authority, such as the Fed or other central banks. If the Fed allowed individuals to hold accounts directly with the Fed, the Fed would issue low- or no-interest liabilities to individuals (as electronic entries in a ledger produced at less cost than physical currency). Then, as happens now, the Fed would use those liabilities to fund purchases of assets that earn a higher interest rate than what the Fed pays on liabilities. This would produce income, perhaps greater income than is earned through traditional seignoriage.", "Potential Obstacles to Creation of CBDCs . One of the main arguments critics\u2014including various central bank officials\u2014make against CBDCs is that there is no \"compelling demonstrated need\" for such a currency, because central banks and private banks already operate trusted electronic payment systems that generally offer fast, easy, and inexpensive transfers of value. ", "Opponents also argue that a CBDC in the form of individual direct accounts at the central bank would reduce the role of private banks in financial intermediation and potentially expand the role of government central banks inappropriately. A portion of consumers likely would shift their deposits away from private banks toward central bank digital money, which would be a safe, government-backed liquid asset. Deprived of this funding, private banks likely would have to reduce their lending, leaving central banks to decide whether or how they should support lending markets to avoid a reduction in credit availability. ", "In addition, skeptics of CBDCs object to the assertion that these currencies would increase systemic stability, arguing that CBDCs would create a less-stable system because they would facilitate runs on private banks. These critics argue that at the first signs of distress at an individual institution or the bank industry, depositors would transfer their funds to this alternative liquid, government-backed asset.", "Uncertaint y : CBDCs' Potential Effects on Monetary Policy . Observers also disagree over whether CBDCs would have a desirable effect on central banks' role and abilities in carrying out monetary policy. Proponents argue that, if individuals held a CBDC on which the central bank set interest rates, the central bank could directly transmit a policy rate to the macroeconomy, rather than achieving transmission through the rates the central bank charges banks and the indirect influence of rates in particular markets. In addition, if holding cash (which in effect has a 0% interest rate) were not an option for consumers, central banks potentially would be less constrained by the zero lower bound . The zero lower bound is the idea that the ability of individuals and businesses to hold cash and thus avoid negative interest rates limits central banks' ability to transmit negative interest rates to the economy.", "Critics argue that taking on such a direct and influential role in private financial markets is an inappropriately expansive role for a central bank. They assert that if CBDCs were to displace cash and private bank deposits, central banks would have to increase asset holdings, support lending markets, and otherwise provide a number of credit intermediation activities that private institutions currently perform in response to market conditions."], "subsections": []}]}]}]}, {"section_title": "Part II: Potential Implications of a Reduced Role for Cash", "paragraphs": ["As discussed above, although cash remains a frequently used payment system, other payment systems continue to develop that offer their own advantages and costs. Various trends suggest that due to market preference or government policy, the role of cash in the payment system has begun to decline and may continue to decline, perhaps significantly, in coming years. If the relative benefits and costs of cash and the various other payment methods evolve in such a way that cash is significantly displaced as a commonly accepted form of payment, that evolution could have a number of effects, both positive and negative, on the economy and society. This section of the report describes a number of potential benefits of a reduced role for cash in the U.S. economy and the various risks and costs that may occur. Many of the factors discussed below may not occur wholly as a benefit, risk, or cost; rather, a potential benefit may bring with it a risk, and vice versa. "], "subsections": [{"section_title": "Potential Benefits of a Reduced Role for Cash", "paragraphs": ["Some observers argue that reducing or eliminating cash payments in the U.S. economy will produce certain beneficial outcomes, including improved efficiency in payments, reduced criminality, and improved ability for the Fed to implement certain monetary policy. As discussed below, although these outcomes generally may be beneficial, that does not mean that there are not certain costs, or drawbacks, that may counterbalance these positive effects."], "subsections": [{"section_title": "More Efficient Payments", "paragraphs": ["Proponents of noncash payment systems assert that net economic benefits from the use and maintenance of a cash payment system are (or will become as technology advances) less than the net benefits of using and maintaining noncash systems. Put another way, they argue that the resources, labor, and capital that go into the cash system\u2014for example, producing currency; stocking and maintaining ATMs; safely transporting cash; protecting businesses from theft and robbery\u2014make it less efficient than noncash systems. If true\u2014and absent policy interventions\u2014market forces likely will result in the displacement of cash by other payment methods as businesses increasingly choose not to accept cash and consumers increasingly prefer not to use it.", "Under this scenario, although the payment system on net may be more efficient, it would not necessarily be true that all people would benefit, as is discussed in the \" Potential Costs and Risks of a Reduced Role for Cash \" section."], "subsections": []}, {"section_title": "Impediment to Crime", "paragraphs": ["Proponents of cashless societies assert that the elimination of cash would reduce crime by making operating an illegal enterprise more difficult and certain crimes, such as robbery and burglary, less remunerative. These proponents argue that criminals are more likely to conduct business in cash and to hold cash as an asset, in large part because cash is anonymous and allows them to avoid establishing relationships with and generating records at financial institutions that may be subject to anti-money laundering reporting and compliance requirements. Accordingly, they assert that the elimination of cash would be beneficial on net, because operating a criminal enterprise would become more difficult.", "Certain studies have shown that the prevalence of cash is correlated with the incidence of crime. In addition, the amount of \"strong\" currencies (i.e., highly valuable and highly stable currencies) in circulation exceeds what many people would consider a reasonable amount needed for typical consumer transactions. For example, with the U.S. population at approximately 329 million, the $1.6 trillion of currency in circulation equates to about $4,900 per person. Proponents of a cashless society assert that this number is inflated due in part to the cash demand of criminals (although part is also due to demand for the U.S. dollar from abroad).", "Although a robust analysis of this question is beyond the scope of this report, arguments that cash facilitates crime and even that reducing cash may reduce crime appear in certain cases to be well founded. However, when analyzing the net benefit to society of going cashless, reduced crime should be weighed against any cost that a reduction in cash would impose on legitimate cash users. One such legitimate group is examined in more detail in the \" Lack of Financial Access for Certain Groups \" section below. The effect a reduction in cash payments would have on crime should not be overstated, as criminals likely would seek other ways to commit and hide their crimes. For example, the prevalence of cybercrime may increase."], "subsections": []}, {"section_title": "Elimination of a Monetary Policy Constraint", "paragraphs": ["Another benefit (from a macroeconomic perspective) of a cashless society cited by economists would be the potential elimination of the practical inability of central banks, such as the Fed, to implement negative interest rates. When an economy is in recession or otherwise performing poorly, one monetary policy response is to lower interest rates. Lower interest rates can spur companies to borrow in order to invest and spur consumers to borrow in order to make additional purchases, thus boosting economic activity and mitigating the impact of recessions. However, many economists believe that policymakers are constrained by a zero lower bound\u2014that whatever policy rate they may set, interest rates in many markets will not fall below zero. The reason is that holding cash offers a zero interest rate. Thus, if the Fed attempted to implement negative interest rates, individuals could avoid those rates by transferring their funds into cash. If holding cash was not an available option, it would be easier for negative interest rates to be transmitted to more financial markets.", "However, any benefit provided by increasing policymakers' ability to affect the macroeconomy with negative interest rates should be weighed against the cost it would impose on the individual savers whose account balances would decrease in value during a period of negative interest rates."], "subsections": []}]}, {"section_title": "Potential Costs and Risks of a Reduced Role for Cash", "paragraphs": ["Skeptics of reducing or eliminating the role of cash in the economy assert that cash serves a number of beneficial purposes, and argue that eliminating it would have adverse effects on certain financially vulnerable groups, eliminate an asset that provides safety against cyber vulnerabilities and financial crises, and reduce individuals' privacy. As with potential benefits to a reduction in cash, many of the factors discussed below may not occur wholly as a risk or cost, and they must be weighed against potential benefits when considering their overall impact."], "subsections": [{"section_title": "Lack of Financial Access for Certain Groups", "paragraphs": ["If the United States were to move toward becoming a cashless society that required consumers to use noncash, electronic payment services, it could present difficulties for those segments of the population who lack access to the financial system or to an electronic network. Access to electronic payments typically requires an account with some financial institution, usually a bank. Often\u2014and increasingly\u2014it also involves using or accessing a device connected to the internet. However, these factors can present hardships and obstacles for certain vulnerable groups. The Federal Deposit Insurance Corporation reported that in the United States in 2015, 9 million households were unbanked, meaning that no member had a bank account. Of these, 37.8% reported that the main reason was that they do not have enough money to keep in an account, 9.4% reported that fees were too high, and 1.9% reported fees were unpredictable. In total, this indicates almost half of the total unbanked, or roughly 4.5 million households, do not access banking services due to economic obstacles. ", "Sweden has been at the forefront of the move away from cash (see Appendix ), and observers there, including Stefan Ingves, governor of Sweden's central bank, have voiced some of these concerns about going cashless. In addition, anecdotal reporting indicates that retirees in Sweden are finding the change difficult and costly.", "In the United States, many assert that it would be beneficial to bring the unbanked into the banking system. Nevertheless, if the unbanked engaged with the banking system at a relatively high cost only because cash (which was a less expensive option for them) was no longer available, it would likely be a detrimental outcome for this group. Conversely, if the move to a cashless system led to less costly financial access for this group, they may stand to benefit."], "subsections": []}, {"section_title": "Loss of Safety Provided by Cash", "paragraphs": ["Proponents of cash often cite the robustness of physical currency as a payment system. Once in an individual's possession, cash does not rely on financial institutions or information technology (IT) based payment networks. These proponents argue that if payments became entirely electronic, events such as power outages, hacker attacks, or (in the event of future cyber war) a state-sponsored attack would be capable of shutting down the most simple financial transaction\u2014the exchange of money for goods and services. The financial system is already exposed to these threats to varying degrees, but the argument is that the elimination of cash amplifies those risks.", "Because it functions well as a store of value, cash is a relatively safe asset in which to invest savings with no risk of losses resulting from a decline in a securities value or the failure of financial institutions or other entities. The perceived safety of cash and its non-reliance on financial institutions also makes it desirable in times of financial turmoil or distress, when confidence in such institutions decreases. During these periods, many people prefer assets that are free from credit risk. For some of these individuals, deposit insurance guarantees may not wholly eliminate their fear of losses, whereas the safety of physical currency would. Holding cash, then, could also provide a sense of security to risk-adverse people that may mistrust the financial system. "], "subsections": []}, {"section_title": "Privacy Concerns", "paragraphs": ["Opening a bank account or otherwise using traditional noncash payment systems generally requires an individual to divulge certain basic personal information, such as name, Social Security number, and birthdate, to a financial institution. Financial institutions store this information and information about the transactions linked to this identity. Under certain circumstances, they may analyze or share this information, such as with a credit-reporting agency. In some instances hackers have stolen personal information from financial institutions, causing concerns over how well these institutions can protect sensitive data. Finally, provided it follows proper legal procedures, the government also can access this information under certain circumstances. Similarly, although new alternative payment systems may offer a degree of anonymity or pseudonymity, these systems still generate an unalterable record of transactions between parties.", "Cash, by contrast, can be used anonymously, and people may wish to use cash for legitimate purposes to ensure their privacy. Certain consumers who are uncomfortable divulging and generating private information\u2014even basic information that a transaction occurred\u2014may prefer cash to any electronic payment methods. "], "subsections": []}]}]}, {"section_title": "Prospectus", "paragraphs": ["Cash has a number of advantageous features that has made it a simple and robust payment system throughout most of human history. It is difficult to imagine conditions under which cash would be replaced entirely, and disappear from the economy, at least in the near future. Nevertheless, its hegemony as a payment system appears to have come to an end, as electronic payment systems have gained popularity, and the ubiquity of cash acceptance for in-person purchases also seems precarious. If noncash payment systems significantly displace cash and cash usage and acceptance significantly declines, there would be a number of effects (both positive and negative) on the economy and society. Now or in the near future, policymakers may face decisions about whether to impede or hasten the decline of cash and consider the implications of doing so. "], "subsections": [{"section_title": "Appendix. International Case Studies", "paragraphs": ["Two countries provide interesting case studies of market forces drastically changing the way a society makes payments.", "Sweden", "In recent years, the use of cash in Sweden has quickly and substantially declined, dropping from 40% to 13% of transactions between 2010 and 2018. In many cases, businesses no longer accept cash, and one survey indicated that two-thirds of small businesses planned to stop accepting cash. Anecdotal reporting indicates that about 5% of bank branches accept cash deposits or offer cash withdrawals. Furthermore, Sweden's central bank is examining the possibility of creating registered accounts for the purpose of issuing currency electronically. Reportedly, many Swedes are generally in favor of the trend (the displacement of cash is due largely to consumer preference), though some have voiced concerns about financial access issues that the change causes for certain groups, such as the elderly.", "Observers have put forward a number of explanations for the Sweden's growing preference for electronic payment methods such as cards and mobile app enabled payments. One argument asserts that Sweden is an especially technology savvy country. As such, Swedes are comfortable using electronic payment systems, and Swedish companies have developed fast and easy payment technologies, such as iZettle and Swish. Some observers also have suggested that Swedes are especially trusting of institutions and thus have fewer privacy concerns. Some have noted that the timing of the start of the decline in cash use among Swedes coincided with the start of a transition to new Swedish banknotes and coins. They suggest that this spurred people and businesses to make a switch not to the new bills and coins but instead to electronic payment methods.", "Kenya", "In 2007, a company named Safaricom\u2014Kenya's largest mobile phone network operator\u2014introduced a \"mobile money\" service called M-Pesa (\"M\" stands for \"mobile\" and \"pesa\" is the Swahili word for money). Users of the service download a phone application and deposit cash with M-Pesa employees called \"agents.\" They can then transfer money into any other M-Pesa account using their phone. Originally intended as a service for Kenyans who had moved to a city to earn money to send back home to rural areas, the service became tremendously popular as a general use payment system. By 2016, there were approximately 31.6 million mobile money accounts in Kenya, which had a total population of 47.6 million in 2017.", "Many observers identify the combination of lack of access to traditional banking services and the proliferation of mobile phones in Kenya as a driving factor for the expansion of M-Pesa and subsequent mobile money services. These observers argue that in Kenya, as with many developing and largely rural nations, both consumers and banks view financial and bank services as a business need of the rich. In 2006, before the introduction of M-Pesa, just 19% of Kenyans had bank accounts and there was 1.5 bank branches for every 100,000 people. However, 54% of Kenyans had their own mobile phone or access to one. ", "Another explanation for the rise of mobile money is that Safaricom successfully identified a large, profitable, and previously untapped market in Kenya. Available mobile technology and its proliferation among the population meant low-cost money transfers could be profitably offered to lower-income consumers. Certain observers assert that the success of M-Pesa has caused Kenyan financial institutions to reevaluate their business models, shifting their focus to offering services to lower-income groups than they previously targeted, and cite the increase in bank accounts and the decline of the average account balances as evidence of this change. As a result, the portion of the Kenyan population with access to some type of formal financial services has grown from 27% in 2006 to 75% in 2017.", "Although mobile money appears to have filled a market need, the degree to which it has displaced cash should not be overstated. An official at Safaricom estimated in February 2018 that as many as 8 out of 10 transactions are still cash transactions, as Kenyans still reportedly prefer cash for small, in-person purchases because of convenience and using M-Pesa generally involves fees. In addition, workers are still generally paid in cash."], "subsections": []}]}]}}
{"id": "R43315", "title": "Water Infrastructure Financing: The Water Infrastructure Finance and Innovation Act (WIFIA) Program", "released_date": "2019-05-01T00:00:00", "summary": ["The Water Infrastructure Finance and Innovation Act (WIFIA) program provides financial assistance for water infrastructure projects, including projects to build and upgrade wastewater and drinking water treatment systems. Congress established the WIFIA program in the Water Resources Reform and Development Act of 2014 (WRRDA 2014, P.L. 113-121).", "The WIFIA concept is modeled after a similar program that finances transportation projects, the Transportation Infrastructure Finance and Innovation Act (TIFIA) program. Proponents of the WIFIA approach, including water utility organizations, cite several potential benefits:", "WIFIA provides credit assistance to large water infrastructure projects that may otherwise have difficulty obtaining financing. WIFIA provides credit assistance, namely direct loans, at U.S. Treasury rates, potentially lowering the cost of capital for borrowers. WIFIA assistance has less of a federal budgetary effect than conventional project grants that are not repaid, because only the subsidy cost of a loan (representing the presumed default rate on loans) is required to be appropriated. WIFIA support limits the federal government's exposure to default, because projects must be found creditworthy with a revenue stream for repayment to be eligible for assistance.", "On the other hand, opponents of the WIFIA approach, including organizations that represent state environmental agency officials, have cited several concerns:", "Federal funding for a WIFIA program could have a detrimental effect on federal support for established State Revolving Fund (SRF) programs that provide the largest source of water infrastructure assistance today. If WIFIA funding resulted in a decrease in SRF assistance, smaller projects may face financing challenges. The Congressional Budget Office has warned that the future costs of a WIFIA program to the federal budget may be underestimated.", "America's Water Infrastructure Act of 2018 (AWIA; P.L. 115-270), enacted on October 23, 2018, removed the pilot designation from the WIFIA program, reauthorized appropriations, and revised provisions related to program administration.", "Appropriations for the WIFIA program have increased since its inception, allowing EPA to provide increasing amounts of credit assistance each year:", "FY2017 appropriations totaled $30 million. FY2018 appropriations totaled $63 million. FY2019 appropriations totaled $68 million.", "On April 5, 2019, EPA announced a third round of WIFIA funding, inviting prospective borrowers to submit letters of interest to EPA. From these submittals, the agency will select projects for funding. EPA estimated that its budget authority would provide approximately $6 billion in credit assistance."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Water infrastructure issues, particularly regarding funding, continue to receive attention from some Members of Congress and a wide array of stakeholders. Localities are primarily responsible for providing wastewater and drinking water infrastructure services. According to the most recent estimates by states and the U.S. Environmental Protection Agency (EPA), expected capital costs for such facilities total $744 billion over a 20-year period. While some analysts and stakeholders debate whether these estimates understate or overstate capital needs, most agree that the affected communities face formidable challenges in providing adequate and reliable water infrastructure services.", "Capital investments in water infrastructure are necessary to maintain high quality service that protects public health and the environment, and capital facilities are a major investment for local governments. The vast majority of public capital projects are debt-financed (i.e., they are not financed on a pay-as-you-go basis from ongoing revenues to the water utility). The principal financing tool that local governments use is the issuance of tax-exempt municipal bonds. At least 70% of U.S. water utilities rely on municipal bonds and other debt to some degree to finance capital investments. Beyond municipal bonds, federal assistance through grants and loans is available for some projects but is insufficient to meet all needs. Finally, public-private partnerships (P3s), which are long-term contractual arrangements between a public utility and a private company, currently provide only limited capital financing in the water sector. Although they are increasingly used in transportation and some other infrastructure sectors, especially P3s that involve private sector debt or equity investment in a project, most P3s for water infrastructure involve contract operations for operation and maintenance. Numerous drinking water utilities are privately owned and make significant private capital investments in water infrastructure, unlike the wastewater sector, in which facilities are generally owned by municipalities. ", "In recent years, Congress has considered several legislative options to help finance water infrastructure projects, including projects to build and upgrade wastewater and drinking water treatment facilities. Some Members have offered proposals that would amend, supplement, and/or complement the existing clean water and drinking water State Revolving Fund (SRF) programs. Other proposals would address water infrastructure issues outside the framework of the SRF programs.", "In 2014, Congress established the Water Infrastructure Finance and Innovation Act (WIFIA) program, which creates a new mechanism of providing financial assistance for water infrastructure projects. The first section of this report provides an overview of the WIFIA program, including its origins, scope, and applicability. The second section describes WIFIA program appropriation levels and estimates of the amount of credit assistance the federal funding would provide. The third section discusses EPA's implementation of the WIFIA program, including recent developments. The fourth section identifies selected issues that may be of interest to policymakers. "], "subsections": []}, {"section_title": "Program Overview", "paragraphs": ["The WIFIA approach for supporting investment in water infrastructure is modeled after the Transportation Infrastructure Finance and Innovation Act (TIFIA) program, which was established in 1998 (see textbox below for further details). As the name suggests, only transportation projects are eligible for TIFIA assistance. The TIFIA program generated interest in creating a similar program for water infrastructure.", "As discussed below, the Water Resources Reform and Development Act of 2014 (WRRDA 2014) established and authorized appropriations for the WIFIA program. Congress provided the first appropriations for EPA to offer credit assistance, such as direct loans, under the WIFIA program in FY2017. In 2018, America's Water Infrastructure Act of 2018 (AWIA) reauthorized appropriations for the program and amended certain WIFIA provisions. "], "subsections": [{"section_title": "WRRDA 2014", "paragraphs": ["WRRDA 2014 established a five-year WIFIA pilot program. The act authorized (1) EPA to provide credit assistance (loans or loan guarantees) for a range of drinking water and wastewater projects and (2) the U.S. Army Corps of Engineers to provide similar assistance for water resource projects, such as flood control or hurricane and storm damage reduction. ", "Congress provided appropriations to EPA to administer the WIFIA program in FY2014. Congress has not appropriated analogous funds to the Corps (nor has the Administration requested funds for a Corps WIFIA program) that would enable the Corps to implement a WIFIA program as laid out in WRRDA 2014. Regardless, this section identifies WIFIA provisions relating to both EPA and the Corps.", "To implement the program, the act authorized appropriations of $175 million over five years to both EPA and the Corps (beginning with $20 million for each agency in FY2015 and increasing to $50 million in FY2019). Project costs must generally be $20 million or larger to be eligible for credit assistance. For projects in less populous communities (defined by WIFIA as populations of 25,000 or less), project costs must be $5 million or more. WIFIA credit assistance is available to ", "state infrastructure financing authorities; a corporation; a partnership; a joint venture; a trust; or a federal, state, local, or tribal government (or consortium of tribal governments). ", "In the case of projects carried out by private entities, such projects must be publicly sponsored. To meet this requirement, WIFIA allows a project applicant to demonstrate to the EPA or the Corps that the affected state, local, or tribal government supports the project. The maximum amount of a loan is 49% of eligible project costs, but the act authorizes EPA or the Corps to make available up to 25% of available funds each year for credit assistance in excess of 49% of project costs. Except for certain projects in rural areas, the total amount of federal assistance (i.e., WIFIA and other sources combined) may not exceed 80% of a project's cost.", "Activities eligible for assistance under the WIFIA pilot program include project development and planning, construction, acquisition of real property, and carrying costs during construction. Categories eligible for assistance by EPA include", "projects eligible for assistance through the clean water state revolving fund (CWSRF) and drinking water state revolving fund (DWSRF) programs (i.e., wastewater treatment and community drinking water facilities); enhanced energy efficiency of a public water system or wastewater treatment works; repair or rehabilitation of aging wastewater and drinking water systems; desalination, water recycling, aquifer recharge, or development of alternative water supplies to reduce aquifer depletion; prevention, reduction, or mitigation of the effects of drought; or a combination of eligible projects. ", "Categories eligible for assistance by the Corps include", "flood control or hurricane and storm damage reduction projects, environmental restoration, coastal or inland harbor navigation improvement, or inland and intracoastal waterways navigation improvement. ", "The EPA Administrator or Secretary of the Army, as appropriate, determines project eligibility based on creditworthiness and dedicated revenue sources for repayment. Selection criteria include", "the national or regional significance of the project, extent of public or private financing in addition to WIFIA assistance, use of new or innovative approaches, the amount of budget authority required to fund the WIFIA assistance, the extent to which a project serves regions with significant energy development or production areas, and the extent to which a project serves regions with significant water resources challenges. ", "Responding to concerns from some groups that WIFIA could impair and diminish support for clean water and drinking water SRF programs under the Clean Water Act and Safe Drinking Water Act (see discussion below), the act requires the EPA Administrator, when the agency receives applications for WIFIA assistance, to notify state infrastructure financing authorities and give them the opportunity to commit funds to the project.", "WIFIA-assisted projects must use American-made iron and steel products. Projects must also comply with the prevailing wage requirements of the Davis-Bacon Act in the same manner that they would under the SRF provisions of the Clean Water Act.", "In addition, the act directed EPA and the Corps to provide information on a website concerning applications and projects that have received assistance, and the Government Accountability Office must report to Congress (four years after enactment, i.e., June 10, 2018) on the program and provide recommendations for continuing, changing, or terminating the WIFIA program. As discussed below, AWIA extended the deadline for this report."], "subsections": []}, {"section_title": "AWIA 2018", "paragraphs": ["AWIA, enacted on October 23, 2018, amended WIFIA in several ways:", "It removed WIFIA's designation as a pilot program. It authorized appropriations of $50.0 million for each of FY2020 and FY2021 for EPA program implementation. It authorized EPA to administer the WIFIA program for relevant agencies (through an interagency agreement), specifically directing EPA to enter into such an agreement with the commissioner of the Bureau of Reclamation within the Department of the Interior. It required the Government Accountability Office to prepare a report for Congress by October 23, 2021. ", "In addition, AWIA authorized an additional $5 million in WIFIA appropriations to provide credit assistance to state finance authorities to support combined projects eligible for assistance from the CWSRF and DWSRF. This additional appropriation authority is available for FY2020 and FY2021 and is available only if (1) Congress appropriates funding for both the CWSRF and the DWSRF at FY2018 levels or 105% or more of the previous year's funding, whichever is greater, and (2) EPA receives at least $50.0 million in WIFIA appropriations. State financing authorities may use funding from WIFIA appropriations to cover 100% of project costs, in contrast to the 80% federal financial assistance cap that applies to most WIFIA-financed projects."], "subsections": []}]}, {"section_title": "Appropriations", "paragraphs": ["For each of FY2015 and FY2016, Congress provided $2.2 million for EPA to hire staff and design the new water infrastructure assistance program. In FY2017, Congress provided the first appropriations to cover the subsidy cost of the program, thus allowing implementation of WIFIA (i.e., making project loans). Congress provided a total of $30 million for the WIFIA program for FY2017 through two appropriations acts:", "The Further Continuing and Security Assistance Appropriations Act, 2017 ( P.L. 114-254 ), enacted on December 10, 2016, provided the first appropriation of funds to cover the subsidy cost of the program. P.L. 114-254 appropriated $20 million to EPA to begin making loans and allowed the agency to use up to $3 million of the total for administrative purposes. The act authorized EPA to use these appropriations to subsidize costs to provide credit assistance not to exceed $2.1 billion. The Consolidated and Further Continuing Appropriations Act, 2017 ( P.L. 115-31 ), enacted on May 5, 2017, provided an additional $8 million for EPA to apply toward loan subsidy costs and $2 million for EPA's administrative expenses. The act authorized EPA to use funds to guarantee as much as $976 million in direct loans.", "For FY2018, the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), provided $63 million for the WIFIA program (including $8 million for administrative costs). The act authorized EPA to use funds to guarantee as much as $6.71 billion in direct loans. EPA estimated that its budget authority ($55 million) would provide approximately $5.5 billion in credit assistance.", "For FY2019, the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provided $68 million for the WIFIA program, including $8 million for administrative costs. The act authorized EPA to use funds to guarantee as much as $7.31 billion in direct loans. EPA estimated that its budget authority ($60 million) would provide approximately $6 billion in credit assistance.", " Figure 1 illustrates the WIFIA appropriations for administrative purposes and for loan subsidy costs between FY2017 and FY2019. The appropriations acts for FY2017 through FY2019 state that the appropriations for the subsidy costs would be available until expended. In contrast, fiscal year appropriations for WIFIA administrative costs are not available after specific dates. ", "As discussed above, WRRDA 2014 authorized a parallel program for water resources projects to be administered by the Corps. Congress has not yet appropriated funds (nor has the Administration requested funds for a Corps WIFIA program) that would enable the Corps to begin preparations or begin making WIFIA loans under the authority in the 2014 statute. "], "subsections": []}, {"section_title": "EPA Implementation", "paragraphs": ["EPA began preparing for implementation of the WIFIA program, including through a series of public listening sessions in several U.S. cities, in 2014. The intended audience was municipal, state, and regional water utility officials; private sector financing professionals; and other interested organizations and parties. The purpose was to discuss project ideas, potential selection and evaluation criteria, and numerous other implementation issues. ", "In 2016, EPA issued two rules intended to explain and clarify some provisions of the program and establish guidelines for the application process. One was an interim final rule that sets guidelines for the application and selection of projects, defines the requirements for credit assistance, and defines reporting requirements and a fee collection structure. In this rule, EPA said that it would initially give funding priority to four types of projects: ", "1. adaptation to extreme weather and climate change; 2. enhanced energy efficiency of wastewater treatment works and public water systems; 3. green infrastructure; and 4. repair, rehabilitation, and replacement of infrastructure and conveyance systems. ", "Through the second rulemaking, EPA proposed a fee structure for WIFIA (application fee, credit processing fee, and servicing fee). EPA finalized this rule in June 2017. WIFIA authorizes EPA to charge fees to recover all or a portion of the agency's costs administering the program. EPA's final rule requires a nonrefundable fee for each project that is invited to submit a full WIFIA application. The application fee is $100,000, or $25,000 for projects serving small communities. The fees are not required in connection with submission of letters of interest but would be required for projects that EPA expects might reasonably proceed to closing on a credit assistance agreement. Enacted December 16, 2016, the Water Infrastructure Improvements for the Nation (WIIN) Act ( P.L. 114-322 , Section 5008(c)) amended WIFIA to allow fees to be financed as part of the loan at the request of an applicant. In 2018, AWIA amended WIFIA to clarify that state financing authorities cannot pass along application fees on to the parties that utilize WIFIA assistance. ", "After EPA received its first appropriations to cover loan subsidy costs, it announced its first round of funding for the WIFIA program in January 2017. Additional rounds of funding have followed with each fiscal year's enacted appropriations. ", " Table 1 provides details for each of EPA's funding rounds, including the project priorities EPA listed in its annual funding notices, the number of letters of interest submitted, selected projects, and loans closed. "], "subsections": []}, {"section_title": "Selected Issues", "paragraphs": [], "subsections": [{"section_title": "Subsidy Amount for Credit Assistance", "paragraphs": ["From the federal perspective, an advantage of the WIFIA program is that it can provide a large amount of credit assistance relative to the amount of budget authority provided. In federal budgetary terms, WIFIA assistance has less of an impact than a grant, which is not repaid to the U.S. Treasury.", "The volume of loans and other types of credit assistance that the program can provide is determined by the size of congressional appropriations and calculation of the subsidy amount. WIFIA defines the \"subsidy amount\" as follows:", "The amount of budget authority sufficient to cover the estimated long-term cost to the Federal Government of a Federal credit instrument, as calculated on a net present value basis, excluding administrative costs and any incidental effects on governmental receipts or outlays in accordance with the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).", "The subsidy amount, which is often expressed in percentage terms or as a ratio (i.e., subsidy rate), largely determines the amount of credit assistance that can be made available to project sponsors. For example, if a project's subsidy rate is 10% and is the only charge against available budget authority, a $20 million budgetary allocation could theoretically support a $200 million loan. A lower subsidy rate would support a larger loan amount. ", "As a reference point, the Office of Management and Budget (OMB) identified a TIFIA subsidy rate of 6.30% for direct loans in FY2020. Proponents of WIFIA have argued that loans for water projects are likely to be less risky than transportation projects, because water utility collections for services (i.e., water rates) provide an established revenue stream and repayment mechanism; thus the subsidy cost would be lower and the amount of credit assistance higher (per dollar of budget authority). Adding caution, however, analysts note that, even with stable revenue mechanisms, some communities and water utilities have recently experienced problems with borrowing and bond repayments, so repayment of a WIFIA loan is not a certainty.", "In the Trump Administration's FY2020 budget proposal, OMB estimated a 0.91% subsidy rate for WIFIA. This equates to a 1:110 ratio. At this subsidy rate, a $10 million appropriation could support a direct loan (or loans) totaling $1.10 billion. However, this subsidy rate is an estimate for budgetary purposes. In the context of WIFIA implementation, subsidy rates are project-specific. EPA stated that the subsidy rate ", "is used for budgetary purposes and provides an estimate for what will be available for loans each year based on the anticipated riskiness of the future loan portfolio. The actual ratio will be determined for each project at the time of loan obligation. Project A with a higher credit quality would consume less of the credit subsidy than Project B with a lower credit quality, even if the projects are otherwise identical. Each applicant will be scored independently."], "subsections": []}, {"section_title": "Loan Interest Rates and Default Risk", "paragraphs": ["The WIFIA program provides capital at a low cost to the borrower, because even though the interest on 30-year Treasury securities is taxable, Treasury rates can be less expensive than rates on traditional tax-exempt municipal debt. Moreover, WIFIA financing may be characterized as patient capital, because loan repayment does not need to begin until five years after substantial completion of a project, the loan can be for up to 35 years from substantial completion, and the amortization schedule can be flexible. In addition, there is less perceived investment risk, because the project has been determined to be creditworthy (i.e., there is a revenue stream for repayment).", "Additionally, the WIFIA program has the potential to limit the federal government's exposure to default by relying on market discipline through creditworthiness standards and encouraging private capital investment. ", "On the other hand, the Congressional Budget Office (CBO) has argued that the federal government underestimates the cost of providing credit assistance under such programs because it excludes", "the cost of market risk\u2014the compensation that investors require for the uncertainty of expected but risky cash flows. The reason is that the [Federal Credit Reform Act] requires analysts to calculate present values by discounting expected cash flows at the interest rate on risk-free Treasury securities (the rate at which the government borrows money). In contrast, private financial institutions use risk-adjusted discount rates to calculate present values.", "In an effort to encourage nonfederal and private sector financing, WIFIA funding assistance generally cannot exceed 49% of project costs. In addition, WIFIA limits all sources of federal assistance to no more than 80% of a project's cost. "], "subsections": []}, {"section_title": "Interactions with Existing Water Financing Programs", "paragraphs": ["In general, the WIFIA program is designed to support larger infrastructure projects with eligible costs exceeding $20 million. For this reason, some have argued that the WIFIA program complements existing water infrastructure financing tools\u2014SRF programs under the Clean Water Act and Safe Drinking Water Act\u2014which are often used for smaller-scale projects. ", "Policymakers set a lower minimum threshold for project costs ($5 million) for WIFIA projects in communities with populations less than 25,000. One of 12 projects selected in the FY2017 funding round is located in a less populous community (Morro Bay, CA). Two of the 39 projects in the FY2018 funding round are located in less populous communities (Frontenac, KS, and Cortland, NY).", "Generally, the level of interest from less populous communities in WIFIA financing is uncertain, particularly considering the other financing options that may be available. The U.S. Department of Agriculture has a variety of water and waste disposal programs to provide loans and grants for wastewater and drinking water infrastructure in rural communities (10,000 people or fewer). In addition, both of the SRF programs authorize states to provide subsidized financial assistance\u2014such as principal forgiveness, negative interest loans, or a combination\u2014under certain conditions. Appropriations acts in recent years have required states to use minimum percentages of their federal grant amounts to provide additional subsidization. The FY2019 appropriations act requires 10% of the CWSRF grants and 20% of the DWSRF grants to be used \"to provide additional subsidy to eligible recipients in the form of forgiveness of principal, negative interest loans, or grants (or any combination of these).\" ", "WIFIA financing can potentially support smaller projects by grouping, or aggregating, them through a single application for financial assistance. For example, during the first round of WIFIA funding (FY2017), one of the 12 entities selected to submit a loan application was the Indiana Finance Authority, which administers the clean water and drinking water SRF programs in Indiana. Indiana's prospective WIFIA loan would provide $436 million to support multiple projects in the state. ", "A major source of debate among opponents and proponents has been and continues to be potential impacts of WIFIA on funds for the Clean Water Act and Safe Drinking Water Act SRF programs. Several groups representing state environmental officials opposed the establishment of a WIFIA program (in the 113 th Congress). They argued that WIFIA funding could result in reduced spending on the SRF programs, which are capitalized by federal appropriations. States are concerned that WIFIA would likely be funded (through congressional appropriations) to the detriment of the SRF programs. ", "On the other hand, water utility groups that support WIFIA have argued that it would complement, not harm, existing SRF programs. In their view, WIFIA will provide a new funding opportunity for large water infrastructure projects that are unlikely to receive SRF assistance. As described above, in part to address concerns about impacts of WIFIA on the SRF programs, WIFIA requires EPA to notify state infrastructure financing authorities about WIFIA application and gives state infrastructure financing authorities an opportunity to commit funds to the project. Nevertheless, some states and environmental advocacy groups remain concerned that WIFIA will compete with SRFs for congressional funding and that WIFIA will not prioritize public health or affordability, as the SRFs can. The 2016 Water Infrastructure Improvements for the Nation Act includes a \"sense of the Congress\" that WIFIA funding should be in addition to robust funding for the SRFs."], "subsections": []}, {"section_title": "Potential Federal Revenue Loss from Tax-Exempt Bonds", "paragraphs": ["Enacting the WIFIA program raised a federal budgetary and revenue issue. Legislation reported by congressional committees is typically scored by the CBO for the effects on discretionary and mandatory, or direct, spending and by the Joint Committee on Taxation (JCT) for effects on revenue. The initial CBO cost estimate for S. 601 , as approved by the Environment and Public Works Committee in April 2013, concluded that the WIFIA provisions would cost $260 million over five years. In addition, it would result in certain revenue loss to the U.S. Treasury; thus, pay-as-you-go procedures would have applied to the bill. CBO cited the JCT estimate that enactment of the bill would reduce revenues by $135 million over 10 years, because states would be expected to issue tax-exempt bonds for water projects in order to acquire additional funds not covered by WIFIA assistance. To avoid the pay-as-you-go requirement in the bill, the committee added a provision to S. 601 to prohibit recipients of WIFIA assistance from issuing tax-exempt bonds for the non-WIFIA portions of project costs. CBO re-estimated the bill and concluded that, because the change would make the WIFIA program less attractive to entities, most of which rely on tax-exempt bonds for project financing, the cost of the bill would be $200 million less over five years. CBO also said that the bill would have no impact on revenues, because the demand for federal credit would be lower without the option of using tax-exempt financing. WRRDA 2014 retained the bar on tax-exempt financing for WIFIA-assisted projects. Thus, the apparent solution to one issue in the legislation\u2014potential revenue loss to the U.S. Treasury\u2014raised a different kind of issue for entities seeking WIFIA credit assistance, because tax-exempt municipal bonds are the principal mechanism used by local governments to finance water infrastructure projects. ", "The restriction was widely criticized by potential users of WIFIA assistance. In their view, the bond financing restriction in WRRDA 2014, together with the provision that caps WIFIA assistance at 49% of project costs, would make it very difficult to finance needed projects. Congressional interest in addressing the tax-exempt bond restriction was soon evident. For example, H.R. 1710 in the 114 th Congress proposed to make an exception from the limitation on use of tax-exempt bonds for WIFIA loans made to finance water infrastructure projects in states in which the governor has issued a state of drought emergency declaration.", "More generally, in July 2015, the Senate passed H.R. 22 , a bill to reauthorize highway and transportation programs for six years. It included repeal of the provision in P.L. 113-121 that limits any project receiving federal credit assistance under the WIFIA program from being financed with tax-exempt bonds. However, repeal of the provision raised similar revenue questions to those that arose in connection with P.L. 113-121 . CBO's report on S. 1647 (the Senate Environment and Public Works Committee's bill, which was the basis of Senate-passed H.R. 22 ) stated that the Joint Committee on Taxation (JCT) estimated that repealing the WIFIA limitation would increase states' issuance of tax-exempt bonds for water projects and would decrease federal revenues by $17 million over the FY2016-FY2025 period. Further, CBO estimated that the change would increase demand for federal credit under the WIFIA program, resulting in additional spending stemming from the appropriation levels authorized in P.L. 113-121 . Consequently, CBO estimated that implementing the WIFIA program would cost $146 million over the FY2016-FY2025 period.", "The issue of identifying offsets, or \"pay-fors,\" for the estimated federal revenue loss was addressed in the conference agreement on H.R. 22 , the FAST Act ( P.L. 114-94 ). CBO estimated that the conference agreement included offsets to fully cover the cost of the bill by reducing spending or raising revenues. Thus, the enacted bill retained the provision repealing the tax-exempt bond financing restriction on WIFIA assistance."], "subsections": []}]}]}}
{"id": "R44045", "title": "The Renewable Fuel Standard (RFS): Waiver Authority and Modification of Volumes", "released_date": "2019-01-23T00:00:00", "summary": ["The Clean Air Act requires that transportation fuels contain a minimum volume of renewable fuel. This renewable fuel standard (RFS) was established by the Energy Policy Act of 2005 (EPAct05; P.L. 109-58) and amended by the Energy Independence and Security Act of 2007 (EISA; P.L. 110-140). The RFS includes scheduled volume mandates that grow each year (starting with 9 billion gallons in 2008 and ascending to 36 billion gallons in 2022). The U.S. Environmental Protection Agency (EPA), which is responsible for administering the RFS, determines the annual volume after 2022. Within the overall RFS, there are submandates for advanced biofuels, including cellulosic biofuel, biomass-based diesel, and other advanced biofuels.", "EPA has the authority to waive the RFS requirements, in whole or in part, if certain conditions outlined in statute prevail. More specifically, the statute identifies a general waiver for the overall RFS and waivers for two types of advanced biofuel: cellulosic biofuel and biomass-based diesel. Statute requires EPA to announce each year's standards by November 30 of the previous year, except for biomass-based diesel, which must be announced 14 months before the year for which the applicable volume is to apply. Further, the final section of the waiver provision\u2014which some refer to as the \"reset\" section\u2014requires a permanent modification of applicable volumes of the RFS starting in 2016 and carried forward, if certain conditions are met.", "In several instances, EPA has used, has proposed to use, or has been petitioned to use its waiver authority when implementing the RFS. In November 2018, EPA announced in its final rule for 2019 for the RFS that it was using the cellulosic biofuel waiver authority to reduce the cellulosic biofuel, advanced biofuel, and total renewable fuel volume requirements. EPA's use of the cellulosic biofuel waiver authority is not new. EPA has repeatedly issued a waiver, reducing the volume required for cellulosic biofuel. For the last few years, the use of the cellulosic biofuel waiver led EPA to also reduce the total advanced biofuel volume requirement. For various reasons (e.g., technology issues, financial support, policy uncertainty), the U.S. cellulosic biofuel industry has been unable, by a wide margin, to produce the volume amounts identified in statute.", "The 2019 final RFS program rule issued by EPA triggers the RFS \"reset\" section of the waiver provision for total renewable fuel. The reset was triggered in previous final rules for both advanced biofuel and cellulosic biofuel. It is unclear what impact the use of the reset section will have on RFS standards in future years. EPA reports it will issue a rulemaking in early 2019 that proposes to reset the cellulosic biofuel, advanced biofuel, and total renewable fuel volume targets for the years 2020-2022.", "A possible issue for Congress is whether the waiver authority and the reset provisions are sufficient options for EPA to address the statutory advanced biofuel volume shortfalls\u2014shortfalls that may have been more than what Congress envisioned when it expanded the RFS in 2007. Another issue is how the Administration might apply the reset provision, and if it would contribute to uncertainty for industry, financiers, and other interested parties."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Renewable Fuel Standard (RFS) requires that the nation's transportation fuel supply contains renewable fuels. This mandate\u2014established in the Energy Policy Act of 2005 (EPAct05; P.L. 109-58 ) and expanded in the Energy Independence and Security Act of 2007 (EISA; P.L. 110-140 )\u2014requires the use of renewable fuel, although it does not explicitly require the production of that fuel. Obligated parties, such as refiners or importers of gasoline or diesel fuel, are responsible for complying with the RFS requirements. The Environmental Protection Agency (EPA) administers the mandate, which is an amendment to Clean Air Act (CAA) provisions governing the regulation of fuels. The statutory renewable fuel volume increases annually until 2022, with EPA determining the volume after 2022 within certain limitations. In general, EPA has the authority to waive the RFS requirements, in whole or in part, if certain conditions outlined in statute prevail.", "The RFS is a complex and highly technical policy initiative. It deals with multiple sectors of the economy and requires the use of some advanced renewable fuel production technologies that have yet to reach maturity. The RFS also incorporates thresholds for greenhouse gas emission reduction. This complexity is exacerbated by multiple stakeholders with differing perspectives on what the RFS should accomplish, how it should be implemented, and whether it should exist, which leads to debate about the RFS and its future. Congressional debate about the RFS is expected to continue with special attention to how EPA administers the program. As Congress continues its oversight of the RFS, it may be useful to understand the RFS waiver authority granted to EPA. This report discusses the waiver provisions of the RFS, including the modification-of-applicable-volumes (\"reset\") section."], "subsections": []}, {"section_title": "RFS Requirements", "paragraphs": ["EPAct05 established a renewable fuel program requiring that transportation fuel sold or introduced into commerce in the United States, on an annual average basis, contain a specified amount of renewable fuel. The RFS mandate, as amended by EISA, calls for the consumption of 9 billion gallons of total renewable fuel in 2008, ascending to 36 billion gallons in 2022, with EPA determining the annual volume after 2022. The statute identifies four categories of renewable fuels that must be used to meet the mandate. However, these four categories can be aggregated into two major categories: unspecified biofuel (mainly cornstarch ethanol) and advanced biofuel (e.g., cellulosic biofuel, biomass-based diesel, and other advanced biofuels), shown in Figure 1 . Over time, the growth in the RFS transitions from biofuels that, in practice, are made mostly from food and feed crops to biofuels made from nonfood and nonfeed crops. For instance, in 2022, the statute requires that advanced biofuels constitute close to 60% of the 36 billion gallon mandate and unspecified biofuels constitute about 40%. "], "subsections": []}, {"section_title": "RFS Annual Volume Reduction Deadlines", "paragraphs": ["Congress gave the EPA Administrator waiver authority to adjust the renewable fuel volumes specified in statute given certain conditions (e.g., inadequate domestic renewable fuel supply). The EPA Administrator is required to set the standards by November 30 of the preceding year (e.g., under statute the 2020 standard is required to be finalized by November 30, 2019). Further, when the EPA Administrator reduces the cellulosic biofuel volume, the Administrator also may reduce the total renewable fuel and total advanced biofuel volumes by the same or a lesser volume. For biomass-based diesel, the statute specifies volumes for four years (2009-2012) and requires EPA to announce the remaining annual biomass-based diesel volume \"14 months before the first year for which such applicable volume will apply\" (e.g., the 2021 biomass-based diesel standard is required to be finalized by November 2019)."], "subsections": []}, {"section_title": "Current RFS Requirements", "paragraphs": ["EPA issued the final 2019 standards (and the 2020 standard for biomass-based diesel) in November 2018. The RFS statutory requirements and the EPA requirements for 2014 through 2019 are provided in Table 1 . "], "subsections": []}, {"section_title": "RFS Waiver Provisions", "paragraphs": ["The RFS provisions of the CAA contains a set of waiver provisions. The provisions contain three separate waivers\u2014a general waiver, a cellulosic biofuel waiver, and a biomass-based diesel waiver\u2014that the EPA Administrator may use to waive, in whole or in part, the volume of renewable fuel mandated by statute. The waivers referred to in this report should not be confused with small refinery exemptions. If a waiver is issued, it expires after one year (60 days for the biomass-based diesel waiver), unless the Administrator renews the waiver. Additionally, starting in 2016, the waiver provision allows for a modification of applicable volumes. The waivers and the modification of applicable volumes are described in further detail in the following sections of this report."], "subsections": [{"section_title": "General Waiver", "paragraphs": ["The RFS statute gives the EPA Administrator the authority to waive the overall RFS requirements, in whole or in part, if ", "domestic renewable fuel supply is inadequate to meet the mandate, or implementation of the requirement would severely harm the economy or environment of a state, a region, or the United States. ", "The Administrator may issue the general waiver at his or her discretion or if petitioned by a state or fuel provider. In those instances in which the Administrator receives a petition for a waiver, the Administrator has 90 days after receipt of the petition to approve or disapprove it. Prior to making a decision, the Administrator is required to consult with the Secretary of Agriculture and Secretary of Energy and to allow for public notice and the opportunity for comment. If a general waiver is granted, any adjustment applies to the total national renewable fuel requirement. Thus, EPA may not issue a general waiver for an individual state or supplier within a state. "], "subsections": []}, {"section_title": "Cellulosic Biofuel Waiver", "paragraphs": ["CAA Section 211(o) obligates the EPA Administrator to reduce the cellulosic biofuel mandate when the projected production capacity for a given year is less than what is identified in statute. The law does not require the EPA Administrator to consult with the Secretary of Agriculture or the Secretary of Energy when issuing a cellulosic biofuel waiver, or to give public notice and opportunity for comment. However, the Administrator must base the projection on the U.S. Energy Information Administration estimate provided under the applicable percentages provision. Although it is not required by the statute to do so, EPA has consulted with federal agencies, industry, and others when the agency has considered issuance of a cellulosic biofuel waiver. EPA also has provided opportunity for public comment. The Administrator must set the new required amount at the \"projected available volume during that calendar year\" by November 30 of the preceding year. Should the Administrator reduce the cellulosic biofuel volume, the Administrator also may reduce the volumes of advanced biofuel and renewable fuel by the same or lesser volume. When the Administrator issues a cellulosic biofuel waiver, the Administrator must offer cellulosic biofuel waiver credits for obligated parties to purchase for that compliance year in lieu of using actual cellulosic biofuel."], "subsections": []}, {"section_title": "Biomass-Based Diesel Waiver", "paragraphs": ["The RFS statutory provisions give the EPA Administrator authority to reduce the amount of biomass-based diesel required for up to 60 days if the Administrator determines that there are significant market circumstances (including feedstock disruptions) \"that would make the price of biomass-based diesel fuel increase significantly.\" If these market circumstances continue past the initial 60-day period, the Administrator may issue another waiver for an additional 60 days. The Administrator is to consult with the Secretaries of Energy and Agriculture prior to issuing such a waiver. If the Administrator issues a biomass-based diesel waiver, the Administrator also may reduce the volumes of advanced biofuel and renewable fuel by the same or lesser volume. To date, EPA has not used the biomass-based diesel waiver authority."], "subsections": []}, {"section_title": "Modification of Applicable Volumes", "paragraphs": ["The last section of the waiver provision is the modification-of-applicable-volumes section, referred to by some as the \"reset\" section for the RFS. This section requires that the EPA Administrator modify the applicable volumes of the RFS in future years starting in 2016 if certain conditions are met. Specifically, it provides that, starting in 2016, the EPA Administrator shall modify the applicable volumes of the RFS for subsequent years if the Administrator waives the renewable fuel mandate, the advanced biofuel mandate, the cellulosic biofuel mandate, or the biomass-based diesel mandate by at least 20% for two consecutive years or by at least 50% for a single year. This reset section does not state what the modified amount must be. Rather, it requires that the Administrator determine the applicable volumes\u2014in coordination with the Secretaries of Energy and Agriculture\u2014based on a review of program implementation thus far and analysis of certain factors (e.g., the impact of the production and use of renewable fuels on the environment)."], "subsections": []}]}, {"section_title": "RFS Waiver Authority Use", "paragraphs": ["EPA has repeatedly used its cellulosic biofuel waiver authority to reduce the cellulosic biofuel volume required, and, since 2014, to also reduce both the advanced biofuel and total renewable fuel volume required. In November 2018, EPA announced that it used the cellulosic biofuel waiver to reduce the applicable total renewable fuel, advanced biofuel, and cellulosic biofuel volume requirements for 2019. According to the agency, the \"13.0 billion gallons specified in the statute for advanced biofuel cannot be reached in 2019 \u2026 primarily due to the expected continued shortfall in cellulosic biofuel.\"", "The EPA Administrator issued a general waiver for prior final rules (which covered 2014 through 2016) and repeatedly issued cellulosic biofuel waivers for 2010 through 2018. The Administrator used the waivers for 2014, 2015, and 2016 to reduce the total renewable fuel (including a lowering of the unspecified biofuel mandate), advanced biofuel, and cellulosic biofuel volume requirements. The Administrator has not granted a biomass-based diesel waiver. "], "subsections": []}, {"section_title": "RFS Waiver Impacts", "paragraphs": ["Waiver authority is intended, in part, to assist EPA with implementation of the RFS. One of EPA's program tasks is to use the waiver authority, when required, to determine the annual final standard, and to announce that final standard by the statutory deadline. The challenge of projecting advanced biofuel production, political pressure from some stakeholders, and other factors may have contributed to past delays in issuing final standards under the waiver authority. Such delays could lead to difficulty for obligated parties who have to demonstrate program compliance and for renewable fuel producers who are interested in producing the required fuel. For 2016 through 2019, EPA has issued the final rule according to the statutory schedule. ", "There are three stakeholders that generally have had distinct views about the impacts of the waiver authority: the advanced biofuel industry, the conventional biofuel industry, and the petroleum industry. Some advanced biofuel advocates assert that granting of waivers, in conjunction with other factors, could weaken confidence in renewable fuel markets and the chosen technologies, specifically cellulosic biofuel. Advanced biofuel production, particularly cellulosic biofuel production, has not been produced at the levels called for in the statutory provisions by relatively large margins. Some conventional biofuel advocates have not always been content with EPA's proposals to use the waiver authority to reduce conventional biofuel volumes. Conventional biofuel production has remained in line with what the statutory provisions require. Some in the petroleum industry assert that the waiver authority is an option that addresses the use of more ethanol than can be used by certain vehicles (i.e., the blend wall) or supported by existing infrastructure. While perspectives about EPA's use of the waiver authority vary among stakeholders, the waivers have provided EPA with the flexibility to establish volume requirements that have been attained. "], "subsections": []}, {"section_title": "Impacts of RFS Modification of Applicable Volumes", "paragraphs": ["The 2019 final rule has triggered the reset section of the waiver provision for total renewable fuel. Previous final rules had already triggered a reset for both advanced biofuels and cellulosic biofuels. EPA reports that in early 2019 it will issue a rulemaking that proposes to \"reset\" the cellulosic biofuel, advanced biofuel, and total renewable fuel volume targets for the years 2020-2022. Many have questions and concerns about how EPA may implement the reset section (the modification-of-applicable-volumes section of the RFS). This section requires the EPA Administrator to modify the applicable volumes of the RFS in its entirety starting in 2016 if certain conditions are met. It is not clear how EPA may carry out this action . ", "The Administrator has the discretion to set the modified amounts. Depending on how the reset is applied, there could be interest in its impact on public and private investment for biofuels. There might also be interest in the reset's potential impact on the transition of the program from mostly conventional biofuel to mostly advanced biofuel by 2022. Additionally, there may be interest about whether a reset could address the concerns expressed by some obligated parties (i.e., refiners) about high compliance costs. Going forward, reset implementation could have implications for the entire fuel industry, given the potential for EPA to reduce the applicable volumes or maintain ambitious targets."], "subsections": []}]}}
{"id": "RS21048", "title": "U.S. Special Operations Forces (SOF): Background and Issues for Congress", "released_date": "2019-03-28T00:00:00", "summary": ["Special Operations Forces (SOF) play a significant role in U.S. military operations and, in recent years, have been given greater responsibility for planning and conducting worldwide counterterrorism operations. U.S. Special Operations Command (USSOCOM) has about 70,000 Active Duty, National Guard, and reserve personnel from all four services and Department of Defense (DOD) civilians assigned to its headquarters, its four service component commands, and eight sub-unified commands.", "In 2013, based on a request from USSOCOM (with the concurrence of Geographic and Functional Combatant Commanders and the Military Service Chiefs and Secretaries), the Secretary of Defense assigned command of the Theater Special Operations Commands (TSOCs) to USSOCOM. USSOCOM now has the responsibility to organize, train, and equip TSOCs. While USSOCOM is now responsible for the organizing, training, and equipping of TSOCs, the Geographic Combatant Commands will continue to have operational control over the TSOCs. Because the TSOCs are now classified as sub-unified commands, the services are responsible to provide non-SOF support to the TSOCs in the same manner in which they provide support to the Geographic Combatant Command headquarters.", "The current Unified Command Plan (UCP) stipulates USSOCOM responsibility for synchronizing planning for global operations to combat terrorist networks. This focus on planning limits its ability to conduct activities designed to deter emerging threats, build relationships with foreign militaries, and potentially develop greater access to foreign militaries. USSOCOM is proposing changes that would, in addition to current responsibilities, include the responsibility for synchronizing the planning, coordination, deployment, and, when directed, the employment of special operations forces globally and will do so with the approval of the Geographic Combatant Commanders, the services, and, as directed, appropriate U.S. government agencies. Further, the proposed changes would give broader responsibility to USSOCOM beyond counterterrorism activities, to include activities against other threat networks. In August 2016, the Obama Administration assigned USSOCOM the leading role in coordinating DOD's efforts to counter WMDs, a mission previously assigned to U.S. Strategic Command (USSTRATCOM). USSOCOM is also the DOD proponent for Security Force Assistance and recently was assigned the mission to field a transregional Military Information Support Operations (MISO) capability.", "USSOCOM's FY2020 budget request is for $13.8 billion, and USSOCOM has requested a force structure of 66,553 military and 6,651 civilian personnel.", "A potential issue for Congress is the future of USSOCOM and U.S. SOF."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["Special operations are military operations requiring unique modes of employment, tactical techniques, equipment, and training. These operations are often conducted in hostile, denied, or politically sensitive environments and are characterized by one or more of the following elements: time sensitive, clandestine, low visibility, conducted with and/or through indigenous forces, requiring regional expertise, and/or a high degree of risk. Special Operations Forces (SOF) are those active and reserve component forces of the services designated by the Secretary of Defense and specifically organized, trained, and equipped to conduct and support special operations. The U.S. Special Operations Command (USSOCOM), headquartered at MacDill Air Force Base in Tampa, FL, is a functional combatant command responsible for training, doctrine, and equipping for all U.S. SOF units."], "subsections": []}, {"section_title": "Command Structures and Components", "paragraphs": ["In 1986, Congress, concerned about the status of SOF within overall U.S. defense planning, passed legislation ( P.L. 99-661 ) to strengthen special operations' position within the defense community and to strengthen interoperability among the branches of U.S. SOF. These actions included the establishment of USSOCOM as a new unified command. USSOCOM headquarters currently consists of approximately 2,500 military and Department of Defense (DOD) civilians (not including government contractors). As stipulated by U.S.C. Title X, Section 167, the commander of USSOCOM is a four-star officer who may be from any military service. U.S. Army General Raymond A. Thomas III is the current USSOCOM Commander. Army Lieutenant General Richard Clarke has been approved to replace General Thomas when he retires in March 2019. The USSOCOM Commander reports directly to the Secretary of Defense. The Assistant Secretary of Defense for Special Operations and Low Intensity Conflict (ASD SOLIC), a member of the Office of the Secretary of Defense for Policy (OSD-P), provides civilian oversight over USSOCOM activities and is chain of supervision between the Secretary of Defense and USSOCOM Commander. The current ASD SOLIC is Owen West.", "As of 2019, USSOCOM consists of over 70,000 active duty, reserve, National Guard, and civilian personnel assigned to its headquarters (about 2,500 personnel), its four components, and sub-unified commands. USSOCOM's components are the U.S. Army Special Operations Command (USASOC); the Naval Special Warfare Command (NSWC); the Air Force Special Operations Command (AFSOC); and the Marine Corps Forces Special Operations Command (MARSOC). The Joint Special Operations Command (JSOC) is a USSOCOM sub-unified command."], "subsections": [{"section_title": "Theater Special Operations Commands (TSOCs)", "paragraphs": ["Theater-level command and control responsibilities are vested in Theater Special Operations Commands (TSOCs). TSOCs are sub-unified commands under their respective Geographic Combatant Commanders (GCCs). TSOCs are special operational headquarters elements designed to support a GCC's special operations logistics, planning, and operational command and control requirements, and are normally commanded by a general officer. ", "In February 2013, based on a request from USSOCOM and with the concurrence of every geographic and functional combatant commander and military service chiefs and Secretaries, the Secretary of Defense transferred combatant command of the TSOCs from the GCCs to USSOCOM. This means USSOCOM has the responsibility to organize, train, and equip TSOCs, as it previously had for all assigned SOF units as specified in U.S. Code, Title 10, Section 167. This change is intended to enable USSOCOM to standardize, to the extent possible, TSOC capabilities and manpower requirements. While USSOCOM is now responsible for the organizing, training, and equipping of TSOCs, the GCCs continue to have operational control over the TSOCs and all special operations in their respective theaters. TSOC commanders are the senior SOF advisors for their respective GCCs. Each TSOC is capable of forming the core of a joint task force headquarters for short-term operations, and can provide command and control for all SOF in theater on a continuous basis. The services have what the DOD calls \"Combatant Command Service Agency (CCSA)\" responsibilities for providing manpower, non-SOF peculiar equipment, and logistic support to the TSOCs. The current TSOCs, the GCCs they support, and the CCSA responsibility for those TSOCs are as follows.", "Special Operations Command South (SOCSOUTH), Homestead Air Force Base, FL; supports U.S. Southern Command; its CCSA is the Army. Special Operations Command Africa (SOCAFRICA), Stuttgart, Germany; supports U.S. Africa Command; its CCSA is the Army. Special Operations Command Europe (SOCEUR), Stuttgart, Germany; supports U.S. European Command; its CCSA is the Army. Special Operations Command Central (SOCCENT), MacDill Air Force Base, FL; supports U.S. Central Command; its CCSA is the Air Force. Special Operations Command Pacific (SOCPAC), Camp Smith, HI; supports U.S. Pacific Command; its CCSA is the Navy. Special Operations Command Korea (SOCKOR), Yongsang, Korea; supports U.S. Forces Korea; its CCSA is the Army. Special Operations Command U.S. Northern Command (SOCNORTH), Peterson Air Force Base, CO; supports U.S. Northern Command; its CCSA is the Air Force."], "subsections": []}]}, {"section_title": "Additional USSOCOM Responsibilities", "paragraphs": ["In addition to Title 10 authorities and responsibilities, USSOCOM has been given additional responsibilities. In the 2004 Unified Command Plan (UCP), USSOCOM was given the responsibility for synchronizing DOD planning against global terrorist networks and, as directed, conducting global operations against those networks. In this regard, USSOCOM \"receives, reviews, coordinates and prioritizes all DOD plans that support the global campaign against terror, and then makes recommendations to the Joint Staff regarding force and resource allocations to meet global requirements.\" In October 2008, USSOCOM was designated the DOD proponent for Security Force Assistance (SFA). In this role, USSOCOM performs a synchronizing function in global training and assistance planning similar to the previously described role of planning against terrorist networks. In 2018, USSOCOM was also assigned the mission to field a transregional Military Information Support Operations (MISO) capability intended to \"address the opportunities and risks of global information space.\" By April of 2019, a Joint MISO WebOps Center (JMWC) is planned to be operating with the Interagency and Combatant Command teams to provide joint messaging capabilities. "], "subsections": []}, {"section_title": "Army Special Operations Command", "paragraphs": ["U.S. Army SOF (ARSOF) includes approximately 33,000 soldiers from the active Army, National Guard, and Army Reserve organized into Special Forces, Ranger, and special operations aviation units, along with civil affairs units, military information units, and special operations support units. ARSOF Headquarters and other resources, such as the John F. Kennedy Special Warfare Center and School, are located at Fort Bragg, NC. Five active Special Forces (SF) Groups (Airborne), consisting of about 1,400 soldiers each, are stationed at Fort Bragg and at Fort Lewis, WA; Fort Campbell, KY; Fort Carson, CO; and Eglin Air Force Base, FL. Special Forces soldiers\u2014also known as the Green Berets\u2014are trained in various skills, including foreign languages, that allow teams to operate independently throughout the world. ", "Two Army National Guard Special Forces groups are headquartered in Utah and Alabama. In addition, an elite airborne light infantry unit specializing in direct action operations, the 75 th Ranger Regiment, is headquartered at Fort Benning, GA, and consists of three battalions of about 800 soldiers each and a regimental special troops battalion providing support to the three Ranger battalions. The Army's special operations aviation unit, the 160 th Special Operations Aviation Regiment (Airborne) (SOAR), consists of five battalions and is headquartered at Fort Campbell, KY. The 160 th SOAR features pilots trained to fly the most sophisticated Army rotary-wing aircraft in the harshest environments, day or night, and in adverse weather and supports all USSOCOM components, not just exclusively Army units.", "Some of the most frequently deployed SOF assets are Civil Affairs (CA) units, which provide experts in every area of civil government to help administer civilian affairs in operational theaters. The 95 th Civil Affairs Brigade (Airborne) is the only active CA unit that exclusively supports USSOCOM. In September 2011 the 85 th Civil Affairs Brigade was activated to support U.S. Army General Purpose Forces (GPFs). All other CA units reside in the Reserves and are affiliated with Army GPF units. Military Information Support Operations (formerly known as psychological operations) units disseminate information to large foreign audiences through mass media. Two active duty Military Information Support Groups (MISGs)\u2014the 4 th Military Information Support Group (MISG) (Airborne) and 8 th Military Information Support Group (MISG) (Airborne)\u2014are stationed at Fort Bragg, and their subordinate units are aligned with Geographic Combatant Commands. "], "subsections": []}, {"section_title": "Air Force Special Operations Command", "paragraphs": ["The Air Force Special Operations Command (AFSOC) is one of the Air Force's 10 major commands, with approximately 19,500 active, reserve, and civilian personnel. AFSOC units operate out of four major continental United States (CONUS) locations and two overseas locations. The headquarters for AFSOC, the 1 st Special Operations Wing (1 st SOW), 24 th Special Operations Wing (24 th SOW), and the Air Force Special Operations Air Warfare Center (AFSOAWC) are located at Hurlburt Field, FL. The AFSOAWC is responsible for training, education, irregular warfare program, innovation development, and operational testing. From AFSOAWC's fact sheet:", "The AFSOAWC's mission includes non-standard aviation in support of Army, Navy, Air Force, Marine and allied special operations forces. ", "The following units are consolidated under the Air Warfare Center [AFSOAWC]:", "\u25a0 U.S. Air Force Special Operations School, Hurlburt Field, FL ", "\u25a0 6 th Special Operations Squadron, Duke Field, FL ", "\u25a0 19 th Special Operations Squadron, Hurlburt Field, FL ", "\u25a0 551 st Special Operations Squadron, Cannon Air Force Base, NM", "\u25a0 5 th Special Operations Squadron, a reserve unit from the 919 th Special Operations Wing, Duke Field, FL ", "\u25a0 371 st Special Operations Combat Training Squadron, Hurlburt Field, FL", "\u25a0 18 th Flight Test Squadron, Hurlburt Field, FL", "\u25a0 592 nd Special Operations Maintenance Squadron, Duke Field, FL", "\u25a0 209 th Civil Engineer Squadron, a guard unit from Gulfport, MS", "\u25a0 280 th Special Operations Communications Squadron, a guard unit from Dothan, AL", "The Air Warfare Center provides mission qualification training in SOF aviation platforms to include AC-130U, AC-130W, U-28, MQ-1, MQ-9, C-145, C-146 as well as small unmanned aerial systems (SUAS), Combat Aviation Advisors, medical element personnel, and AFSOC Security Forces. In addition to AFSOC personnel, AFSOAWC is responsible for educating and training other USSOCOM components and joint/interagency/coalition partners.", "The 27 th SOW is at Cannon AFB, NM. The 352 nd and 353 rd Special Operations Wings provide forward presence in Europe (RAF Mildenhall, England) and in the Pacific (Kadena Air Base, Japan), respectively. The 6 th SOS's mission is to assess, train, and advise partner nation aviation units with the intent to raise their capability and capacity to interdict threats to their nation. The 6 th SOS provides aviation expertise to U.S. foreign internal defense (FID) missions. The Air National Guard's 193 rd SOW at Harrisburg, PA, and the Air Force Reserve Command's 919 th SOW at Duke Field, FL, complete AFSOC's major flying units. ", "The 24 th Special Operations Wing is one of three Air Force active duty special operations wings assigned to Air Force Special Operations Command. The 24 th SOW is based at Hurlburt Field, Fla. The 24 th SOW is the only Special Tactics wing in the Air Force."], "subsections": [{"section_title": "U.S. Air Force Special Tactics", "paragraphs": ["From the Air Force's Special Tactics fact sheet:", "The primary mission of the 24 SOW is to provide Special Tactics forces for rapid global employment to enable airpower success. The 24 SOW is U.S. Special Operation Command's tactical air and ground integration force, and the Air Force's special operations ground force to enable global access, precision strike, and personnel recovery operations.", "Core capabilities encompass: airfield reconnaissance, assessment, and control; personnel recovery; joint terminal attack control and environmental reconnaissance.", "Special Tactics is comprised of Special Tactics Officers, Combat Controllers, Combat Rescue Officers, Pararescuemen, Special Operations Weather Officers and Airmen, Air Liaison Officers, Tactical Air Control Party operators, and a number of combat support Airmen which compromise 58 Air Force specialties.", "These unique skills provide a full-spectrum, air-focused special operations capability to the combatant commander in order to ensure airpower success. With their unique skill sets, Special Tactics operators are often the first special operations elements deployed into crisis situations. Special Tactics Airmen often embed with Navy SEALs, Army Green Berets and Rangers to provide everything from combat air support to medical aid and personnel recovery, depending on their specialty.", "AFSOC's Special Tactics experts include Combat Controllers, Pararescuemen, Special Operations Weather Teams, Combat Aviation Advisors, and Tactical Air Control Party (TACPs). As a collective group, they are known as Special Tactics and have also been referred to as \"Battlefield Airmen.\" Their basic role is to provide an interface between air and ground forces, and these airmen have highly developed skill sets. Usually embedded with Army, Navy, or Marine SOF units, they provide control of air fire support, medical and rescue expertise, or weather support, depending on the mission requirements. "], "subsections": []}, {"section_title": "AFSOC Aircraft", "paragraphs": ["AFSOC's active duty and reserve component flying units operate fixed and rotary-wing aircraft, including the CV-22B, AC-130, C-130, EC-130, MC-130, MQ-1, MQ-9, U-28A, C-145A, C-146A, and PC-12."], "subsections": []}]}, {"section_title": "Naval Special Warfare Command19", "paragraphs": ["The Naval Special Warfare Command (NSWC) is composed of approximately 10,000 personnel, including active-duty Special Warfare Operators, known as SEALs; Special Warfare Boat Operators, known as Special Warfare Combatant-craft Crewmen (SWCC); reserve personnel; support personnel; and civilians. NSWC is organized around 10 SEAL Teams, 2 SEAL Delivery Vehicle (SDV) Teams, and 3 Special Boat Teams. SEAL Teams consist of six SEAL platoons each, consisting of 2 officers and 16 enlisted personnel. The major operational components of NSWC include Naval Special Warfare Groups One, Three, and Eleven, stationed in Coronado, CA, and Naval Special Warfare Groups Two, Four, and Ten and the Naval Special Warfare Development Group in Little Creek, VA. These components deploy SEAL Teams, SEAL Delivery Vehicle Teams, and Special Boat Teams worldwide to meet the training, exercise, contingency, and wartime requirements of theater commanders. Because SEALs are considered experts in special reconnaissance and direct action missions\u2014primary counterterrorism skills\u2014NSWC is viewed as well postured to fight a globally dispersed enemy ashore or afloat. NSWC forces can operate in small groups and have the ability to quickly deploy from Navy ships, submarines and aircraft, overseas bases, and forward-based units."], "subsections": []}, {"section_title": "U.S. Marine Corps Forces Special Operations Command (MARSOC)20", "paragraphs": ["On November 1, 2005, DOD announced the creation of the Marine Special Operations Command (MARSOC) as a component of USSOCOM. Now referred to as the U.S. Marine Corps Forces Special Operations Command, MARSOC consists of the Marine Raider Regiment, which includes 1 st , 2 nd , and 3 rd Marine Raider Battalions; the Marine Raider Support Group; 1 st , 2 nd , and 3 rd Marine Raider Support Battalions; and the Marine Special Operations School. MARSOC headquarters, the 2 nd and 3 rd Marine Raider Battalions, the Marine Special Operations School, and the Marine Raider Support Group are stationed at Camp Lejeune, NC. The 1 st Marine Raider Battalion is stationed at Camp Pendleton, CA. MARSOC forces have been deployed worldwide to conduct a full range of special operations activities. MARSOC missions include direct action, special reconnaissance, foreign internal defense, counterterrorism, and information operations. MARSOC currently has approximately 3,000 personnel assigned."], "subsections": []}]}, {"section_title": "Joint Special Operations Command (JSOC)22", "paragraphs": ["From USSOCOM's 2019 Factbook:", "The Joint Special Operations Command, located at Fort Bragg, North Carolina, is a sub-unified command of the U.S. Special Operations Command. It is charged to study special operations requirements and techniques, ensure interoperability and equipment standardization, plan and conduct Special Operations exercises and training, and develop joint Special Operations tactics."], "subsections": []}, {"section_title": "FY2020 USSOCOM Budget Request", "paragraphs": ["USSOCOM's FY2020 budget request of $13.8 billion represents an increase of $381 million (2.8%) from the FY2019-enacted position. USSOCOM's FY2020 base budget request totals $9.6 billion, a $435 million (5%) increase from the FY2019-enacted position of $9.2 billion, while overall FY2020 personnel increases by 1,358 (increases military personnel by 1,407 and reduces civilian personnel by 49). The FY2020 Overseas Contingency Operations (OCO) request totals $4.2 billion, a $54 million decrease (-1%) from the FY2019-enacted position."], "subsections": [{"section_title": "FY2020 USSOCOM Requested Force Structure", "paragraphs": ["USSOCOM's FY2020 budget request seeks a 2.2% manpower increase, from 71,612 personnel in FY2019 to 73,204 in FY2020. "], "subsections": []}]}, {"section_title": "Potential Issue for Congress", "paragraphs": [], "subsections": [{"section_title": "The Future of USSOCOM and U.S. SOF.", "paragraphs": ["After 17 years at the forefront of the global military campaign against terrorism, policymakers, defense officials, and academics are questioning the future role of USSOCOM and U.S. SOF. Three legislative provisions in the FY2019 National Defense Authorization Act ( P.L. 115-232 ) suggest growing congressional concern with misconduct, ethics, and professionalism; roles and responsibilities for ASD SOLIC; and SOF's ability to counter future threats across the spectrum of conflict. ", "SEC. 1066. COMPREHENSIVE REVIEW OF PROFESSIONALISM AND ETH ICS PROGRAM S FOR SPECIAL OPERATIONS FORCES", "(a) REVIEW REQUIRED.\u2014The Secretary of Defense shall conduct a comprehensive review of the ethics programs and professionalism programs of the United States Special Operations Command and of the military departments for officers and other military personnel serving in special operations forces.", "(b) ELEMENTS OF THE REVIEW.\u2014The review conducted under subsection (a) shall specifically include a description and assessment of each of the following:", "(1) The professionalism and ethics standards of the United States Special Operations Command and affiliated component commands.", "(2) The ethics programs and professionalism programs of the military departments available for special operations forces.", "(3) The ethics programs and professionalism programs of the United States Special Operations Command and affiliated component commands.", "(4) The roles and responsibilities of the military departments and the United States Special Operations Command and affiliated component commands in administering, overseeing, managing, and ensuring compliance and participation of special operations forces in ethics programs and professionalism programs, including an identification of\u2014", "(A) Any gaps in the administration, oversight, and management of such programs and in ensuring the compliance and participation in such programs; and", "(B) Any additional guidance that may be required for a systematic, integrated approach in administering, over- seeing, and managing such programs and in ensuring compliance with and participation in such programs in order to address issues and improve adherence to professionalism and ethics standards.", "(5) The adequacy of the existing management and oversight framework for ensuring that all ethics programs and professionalism programs available to special operations forces meet Department standards.", "(6) Tools and metrics for identifying and assessing individual and organizational ethics and professionalism issues with respect to special operations forces.", "(7) Tools and metrics for assessing the effectiveness of existing ethics programs and professionalism programs in improving or addressing individual and organizational ethics-related and professionalism issues with respect to special operations forces.", "(8) Any additional actions that may be required to address or improve individual and organizational ethics and professionalism issues with respect to special operations forces.", "(9) Any additional actions that may be required to improve the oversight and accountability by senior leaders of ethics and professionalism-related issues with respect to special operations forces.", "(c) LIMITATION ON DELEGATION.\u2014The Secretary of Defense may only delegate responsibility for any element of the review required by subsection (a) to the Assistant Secretary of Defense for Special Operations and Low Intensity Conflict, in coordination with other appropriate offices of the Secretary of Defense and the secretaries of the military departments.", "(d) DEADLINE FOR SUBMITTAL OF REVIEW.\u2014The Secretary of Defense shall submit the review required by subsection (a) to the Committees on Armed Services of the Senate and the House of Representatives by not later than March 1, 2019.", "(e) DEFINITIONS.\u2014In this section:", "(1) The term ''ethics program'' means a program that includes\u2014", "(A) Compliance-based ethics training, education, initiative, or other activity that focuses on adherence to rules and regulations; and", "(B) Values-based ethics training, education, initiative, or other activity that focuses on upholding a set of ethical principles in order to achieve high standards of conduct and incorporate guiding principles to help foster an ethical culture and inform decision-making where rules are not clear.", "(2) The term ''professionalism program'' means a program that includes training education, initiative, or other activity that focuses on values, ethics, standards, code of conduct, and skills as related to the military profession.", "SEC. 917. DEADLINE FOR COMPLETION OF FULL IMPLEMENTATION OF REQUIREMENTS IN CONNECTION WITH ORGANIZATION OF THE DEPARTMENT OF DEFENSE FOR MANAGEMENT OF SPECIAL OPERATIONS FORCES AND SPECIAL OPERATIONS", "The Secretary of Defense shall ensure that the implementation of Section 922 of the National Defense Authorization Act for Fiscal Year 2017 ( P.L. 114-114 \u2013328; 130 Stat. 2354) and the amendments made by that section is fully complete by not later than 90 days after the date of the enactment of this Act.", "SEC. 914. ASSISTANT SECRETARY OF DEFENSE FOR SPECIAL OPERATIONS AND LOW INTENSITY CONFLICT REVIEW OF UNITED STATES SPECIAL OPERATIONS COMMAND", "(a) REVIEW REQUIRED.\u2014The Assistant Secretary of Defense for Special Operations and Low Intensity Conflict shall, in coordination with the Commander of the United States Special Operations Command, conduct a comprehensive review of the United States Special Operations Command for purposes of ensuring that the institutional and operational capabilities of special operations forces are appropriate to counter anticipated future threats across the spectrum of conflict.", "(b) SCOPE OF REVIEW.\u2014The review required by subsection (a) shall include, at a minimum, the following:", "(1) An assessment of the adequacy of special operations forces doctrine, organization, training, materiel, education, personnel, and facilities to implement the 2018 National Defense Strategy, and recommendations, if any, for modifications for that purpose.", "(2) An assessment of the roles and responsibilities of special operations forces as assigned by law, Department of Defense guidance, or other formal designation, and recommendations, if any, for additions to or divestitures of such roles or responsibilities.", "(3) An assessment of the adequacy of the processes through which the United States Special Operations Command evaluates and prioritizes the requirements at the geographic combatant commands for special operations forces and special operations-unique capabilities and makes recommendations on the allocation of special operations forces and special operations unique capabilities to meet such requirements, and recommendations, if any, for modifications of such processes.", "(4) Any other matters the Assistant Secretary considers appropriate.", "(c) DEADLINES.\u2014", "(1) COMPLETION OF REVIEW.\u2014The review required by subsection (a) shall be completed by not later than 270 days after the date of the enactment of this Act.", "(2) REPORT.\u2014Not later than 30 days after completion of the review, the Assistant Secretary shall submit to the congressional defense committees a report on the review, including the findings and any recommendations of the Assistant Secretary as a result of the review."], "subsections": [{"section_title": "Discussion", "paragraphs": ["These three legislative provisions, in addition to directing the Secretary of Defense to fully implement directed changes in ASD SOLIC, call for ASD SOLIC and USSOCOM to take an introspective look at U.S. SOF's culture, roles and responsibilities, adequacy of resources, organizational structure, and the adequacy of train ing, education, and personnel. Some have suggested these provisions are a precursor for congressional and DOD actions to \"rein in and reorient\" U.S. SOF from fighting terrorists to taking on nation-states instead. Others, citing reportedly nonsanctioned military combat operations in Africa, where U.S. SOF are said to have strayed from their train and assist mandate, have questioned whether or not U.S. SOF was involved in direct combat in Niger. Some believe this situation calls into question the adequacy of civilian oversight and control of U.S. SOF. Others assert that the size of U.S. SOF and the scope of their missions have expanded beyond the ability of USSOCOM to handle them and that congressional actions to increase ASD SOLIC oversight and control of U.S. SOF are necessary to improve the current state of affairs. Aware that U.S. SOF are overburdened and that there is a need to find the right balance between continuing to challenge terrorist organizations while simultaneously addressing growing irregular warfare threats posed by nation-states, policymakers will likely make good use of the two forthcoming congressionally mandated reviews. It is possible that over the next few years, significant public policy debates on the future of USSOCOM and U.S. SOF will be undertaken, potentially resulting in a number of changes for ASD SOLIC, USSOCOM, and U.S. SOF. "], "subsections": []}]}]}]}}
{"id": "R45428", "title": "Sub-Saharan Africa: Key Issues and U.S. Engagement", "released_date": "2019-01-15T00:00:00", "summary": ["Congress may review existing U.S. policies and programs in sub-Saharan Africa (henceforth, \"Africa\") as it establishes its budgetary and policy priorities and responds to developments in the region. Key enduring issues for Congress include the authorization and appropriation of funding for U.S. foreign aid programs and U.S. military activities in the region, and oversight of U.S. programs and policies.", "Economic and Development Issues. Much of Africa experienced rapid economic growth starting in the early 2000s, reducing poverty and expanding the middle class in some countries. Since 2014, however, growth has slowed in many countries\u2014and almost all continue to face high poverty rates and long-standing development challenges such as food insecurity and malnutrition, ineffective health and education institutions, and infrastructure deficiencies. Other factors hindering socioeconomic development in Africa include low domestic buying power, a shortage of skilled labor, limited access to capital and other inputs, poor governance, and political instability and insecurity.", "Governance, Democracy, and Human Rights. Since the early 1990s, nearly all African countries have transitioned from military or single-party rule to at least nominally multiparty political systems in which elections are held regularly. Nonetheless, the development of accountable, functional democratic institutions remains limited in many countries. Corruption and mismanagement are pervasive across much of the region, and state services are limited. Authoritarian governments and armed belligerents in Africa commit serious human rights violations.", "Peace and Security. Civil wars and crises have broken out in multiple African countries since 2010, reversing the previous decade's trend of stabilization. Newer crises have unfolded in the Lake Chad Basin, the Central African Republic (CAR), Mali, Burkina Faso, Cameroon, Burundi, and South Sudan, while long-running conflicts continue to affect the Democratic Republic of Congo (DRC), Sudan, and Somalia. Porous borders, weak institutions, and corruption have created permissive environments for transnational threats such as terrorism, trafficking, and maritime piracy. Two conflict-affected African countries, South Sudan and Nigeria, face a credible risk of famine in early 2019; in both, insecurity has hindered aid access to affected zones.", "U.S.-Africa Policy under the Trump Administration. The Trump Administration has maintained several Africa-focused initiatives launched by its predecessors, but it also has proposed changes to U.S. trade policy and foreign assistance, including aid cuts, that could significantly affect U.S. engagement with Africa if implemented. The Administration's policy approach toward Africa, unveiled in late 2018, identifies three broad U.S. interests in the region: expanding U.S. trade and commercial ties with African countries, countering Islamist extremism and other forms of violent conflict, and imposing more stringent conditions on U.S. aid and U.N. peacekeeping missions in the region. Administration officials also have placed a high priority on countering Chinese and Russian influence in Africa, with the Department of Defense announcing in late 2018 that it would reorient its personnel and footprint in parts of Africa to align with that objective in the coming years. Country-specific goals identified in other Trump Administration statements and policy documents include the continued normalization of U.S. relations with Sudan, conflict resolution in South Sudan, an electoral transition in DRC, and democratic reforms in Ethiopia. The Administration also has signaled greater focus on reciprocity in trade relations, imposed tariffs affecting trade with some African countries, pressed African states to join efforts to put pressure on North Korea, and enacted immigration policies that have affected U.S.-Africa policy, among other initiatives."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides an introduction to select issues related to sub-Saharan Africa (henceforth, \"Africa,\" unless oth erwise noted) and U.S. policy toward the region. It includes general information concerning Africa's economic and development challenges, governance and human rights trends on the continent, and key issues related to peace and security. It also provides an overview of U.S. engagement in Africa and current U.S. policy approaches toward the region. ", "This report is intended to serve as a primer to help inform deliberations on key enduring issues for Congress, which include the authorization and appropriation of funding for U.S. foreign aid programs and U.S. military activities in the region and oversight of U.S. programs and policies. Other CRS products address in greater depth many of the topics considered in this report; several are cited in footnotes. "], "subsections": []}, {"section_title": "Africa's Economic and Development Challenges", "paragraphs": [], "subsections": [{"section_title": "What are the recent trends in Africa's economic development?", "paragraphs": ["Starting in the early 2000s, many countries in Africa exhibited high rates of economic growth. Buoyed by high commodity prices and strong domestic demand, some countries experienced middle class expansion, rapid growth in access to digital communications, and progress toward some of the U.N. Millennium Development Goals (MDGs), albeit starting from a low base by global standards. Outcomes varied widely across the region, however. Resource-rich states broadly recorded higher growth but achieved smaller declines in poverty and poorer progress toward human development than their resource-poor counterparts, although poverty alleviation was generally limited across the region. ", "Many African countries have confronted economic headwinds since 2014, as weak global commodity prices and poor agricultural conditions have hampered economic activity. Regional average gross domestic product (GDP) growth dropped from 5% in 2013 to 2.7% in 2016, before recovering slightly to 3.3% in 2017, according to the International Monetary Fund (IMF). Africa's economic outlook has since improved moderately, owing to accelerating global growth, which spurred rising demand for commodities and a resulting rise in some commodity prices. The IMF predicted in October 2018 that regional growth would gradually rise to 4.5% by 2023, while noting considerable variance between countries. Seven countries\u2014Ethiopia, C\u00f4te d'Ivoire, Rwanda, Senegal, Djibouti, Ghana, and Benin\u2014were projected to exceed 6% growth in 2018. Meanwhile, Nigeria, Africa's largest economy, is recovering from a 2016 recession, while South Africa entered recession in 2018. Some countries likely recorded declines in per capita income in 2018, including Equatorial Guinea, South Sudan, Angola, Burundi, South Africa, and Nigeria. Many African economies remain undiversified and rely on raw or minimally processed commodity exports, especially in the energy, mining, and agricultural sectors. Meanwhile, public debt-to-GDP levels, which fell sharply in the 2000s due to concerted debt relief efforts by international lenders, are rising in multiple countries. In early 2018, the World Bank classified 18 African countries as being \"at high risk of debt distress,\" up from eight in 2013. The World Bank attributed the trend to rising fiscal deficits and weak exchange rates, notably in commodity exporting states. Tax collection remains weak across the region, limiting fiscal policy options. "], "subsections": []}, {"section_title": "What major human development challenges does Africa face?", "paragraphs": ["On a per-capita basis and by other measures, Africa remains among the poorest global regions. Despite modest reductions in extreme poverty between 1990 and 2010, 41% of Africans lived under the international poverty line of $1.90 per day as of 2015 (latest data), and 21% were undernourished as of 2016. Only one sub-Saharan African country (the Seychelles) qualifies as \"high income\" as defined by the World Bank. Six more (Botswana, Equatorial Guinea, Gabon, Mauritius, Namibia, and South Africa) qualify as \"upper-middle-income\" economies, although wealth is unequally distributed and human development indicators remain poor in several of these countries. All other countries in the region are either \"lower-middle-income\" or \"low-income.\"", "Since 2013, economic turbulence, poor agricultural conditions, and violent conflict have hindered human development progress in much of the region. Many countries lack the institutional capacity to facilitate sustained growth and human development. Corruption and insecurity further hinder progress toward socioeconomic improvements in many countries.", "By several measures, Africa has lagged behind other developing regions in its pursuit of human development. Its maternal mortality rates remain the highest of any region; in 2015 (latest data), Africa accounted for almost two-thirds of all global deaths due to maternal causes. As a region, Africa's child mortality and stunted growth prevalence rates are also the highest in the world, as are rates of HIV/AIDS, tuberculosis, and malaria. Lack of access to safe drinking water\u2014which was available to only 24% of Africans in 2015\u2014and unsafe sanitation facilities also impair health in the region: the World Health Organization (WHO) reports that as of 2016, Africa's mortality rate due to exposure to unsafe drinking water and sanitation was four times the global average. ", "Africa also lags behind other regions with regard to primary education. Nearly one-third of African children aged six to seventeen do not attend school. African girls are disproportionately excluded, despite progress toward inclusion. Africa's labor market has struggled to absorb a growing working age population. Roughly 79% of Africans are unemployed or in vulnerable employment (such as self-employment), which are often associated with low earnings and insecurity. In 2017, 61% of African workers were in poverty (24%) or extreme poverty (37%). ", "Africa has a disproportionately youthful population. Sixty-two percent of sub-Saharan Africans were aged 24 or younger in 2018, although youth population shares vary across the region. Population growth projections reflect these rates; by one estimate, roughly 5.3 billion people will live in Africa (including North Africa) by 2050\u2014roughly a quarter of the world's population. While youthful populaces hold notable economic promise, realizing their potential presents governments with profound challenges related to the delivery of social services, political enfranchisement, and jobs. The risk associated with not meeting such demands is high. In many countries, youth are a key source of dissent."], "subsections": []}]}, {"section_title": "Governance, Democracy, and Human Rights", "paragraphs": [], "subsections": [{"section_title": "What is the state of democracy and governance in Africa?", "paragraphs": ["Since the early 1990s, nearly all African countries have transitioned from military or single-party rule to at least nominally multiparty political systems in which elections are held regularly. Some (such as Senegal, Cabo Verde, Benin, and Ghana) have experienced multiple peaceful electoral transfers of power, while others (such as Rwanda, Eritrea, Equatorial Guinea, South Sudan, and Sudan) exhibit autocratic regimes that limit civil society and opposition activity. ", "In parts of Africa, leaders have abolished, altered, or circumvented constitutional term limits to remain in power. The departures of long-serving leaders in The Gambia and Angola in 2017 may present opportunities for greater openness, as may Ethiopia's inauguration of a reformist prime minister in 2018\u2014though entrenched elites could threaten attempts at reform in each country. Meanwhile, a military crackdown after disputed 2018 elections in Zimbabwe diminished hopes of a democratic transition after the historic 2017 ouster of longtime president Robert Mugabe.", "According to Freedom House's annual Freedom in the World index, which charts global trends related to political rights and civil liberties, Africa has seen subregional divergence since the mid-1990s. Broadly, while states in Southern and coastal West Africa have seen substantial improvements in democratic governance, East and Central Africa \"have suffered major setbacks.\" Civil liberties trends generally follow this pattern. Progress in West and Southern Africa, however, remains fragile. Several Southern African states with relatively strong institutions (e.g., South Africa, Botswana, and Namibia) remain dominated by single parties born during liberation struggles against colonial or white-minority rule.", "In much of Africa, the development of accountable, functional democratic institutions remains limited. Even some countries that regularly hold democratic elections exhibit few effective internal checks and balances. Accountability for high-level crimes, such as the resignation of President Jacob Zuma of South Africa in early 2018 due to multiple corruption scandals, remains the exception rather than the rule in Africa. In many conflict-affected countries, state weakness and violence impede the development of institutions and the provision of even basic services.", "State institutions in Africa often fail to respond adequately to citizens' needs because they lack human and financial capacity or are beset by corruption and mismanagement. Countries such as Somalia, South Sudan, Sudan, Guinea-Bissau, and Equatorial Guinea rank near the bottom of Transparency International's Corruption Perceptions Index . Endemic corruption also corrodes state effectiveness in regional economic powerhouses such as Nigeria, Kenya, and Angola.", "Justice systems in many African countries are often weak and subject to political influence; this can weaken public trust in justice and law enforcement systems and has spurred incidents of vigilante justice in some states. Frustrations over a perceived lack of access to justice and protection also may drive Islamist extremist recruitment in some areas, such as central Mali. "], "subsections": []}, {"section_title": "What are the region's major human rights challenges?18", "paragraphs": ["Like governance trends, human rights conditions vary widely across Africa. Several countries have maintained generally positive human rights records in recent years but continue to face challenges such as security abuses, poor prison conditions, violence against women and children, discrimination against vulnerable groups, and human trafficking. Multiple states (such as Togo, Cameroon, the Democratic Republic of Congo [DRC], and Zimbabwe) actively restrict citizens' right to dissent through protest bans and/or violent repression. Media and civil society in Africa's most authoritarian countries (such as Sudan, Rwanda, Eritrea, and Equatorial Guinea) face state intimidation and barriers to operation. ", "Violence against civilians, including by state security forces, is a major concern in a number of countries. Police in Ghana, Liberia, Kenya, Nigeria, Sierra Leone, Uganda, and Zambia, among others, have been accused of using excessive force and mistreating detainees, often with impunity. In Burkina Faso, Cameroon, Mali, and Nigeria, local populations have faced attacks by Islamist extremist groups as well as abuses by national militaries. Internal conflicts and/or state repression in Burundi, DRC, and South Sudan have featured high levels of violence and widespread abuses that may amount to war crimes or crimes against humanity."], "subsections": []}]}, {"section_title": "Peace and Security Issues", "paragraphs": [], "subsections": [{"section_title": "What are Africa's major peace and security challenges?", "paragraphs": ["Armed conflict and instability continue to threaten regional security, impede development, and contribute to human suffering in parts of Africa. Beyond internal conflicts, the region faces diverse transnational threats, including from terrorist groups, illicit trafficking, wildlife crime, and maritime piracy. Key threats to African peace and security are outlined below.", "Internal Conflicts. Violent political crises, civil wars, and/or intercommunal violence have broken out in several African states in the past decade, reversing a previous trend toward greater stability. These crises have triggered mass population displacement and created widespread humanitarian need; multiple African countries rank among the most fragile states globally, according to the Fragile States Index (see Figure 2 ).", "Islamist Armed Groups . Violent Islamist extremist groups in Northwest and East Africa have spurred humanitarian crises and threaten stability in their areas of operation. Since 2013, mass casualty attacks on targets such as hotels, malls, peacekeeping facilities, government buildings, and restaurants popular with Westerners in such countries as Kenya, Mali, Burkina Faso, and C\u00f4te d'Ivoire have underscored the capacity of some groups to mount complex operations. ", "In a 2017 study of extremist recruitment in Africa, the United Nations Development Program (UNDP) identifies several factors that may encourage radicalization, including family circumstances, religious ideology, economic pressures, and perceptions of government. Seventy-one percent of respondents named state actions, such as the killing or arrest of a relative or friend, as a key factor in their decision to join violent extremist organizations.", "Maritime Security. Africa's coastal waters, particularly along the Gulf of Guinea, the Gulf of Aden, and the western Indian Ocean, have been highly susceptible to illegal fishing, trafficking, and piracy. Criminal elements smuggle people, drugs, and weapons, and dump hazardous waste. Maritime commerce and offshore oil production facilities in some zones have faced high rates of piracy, theft, kidnapping for ransom, and sabotage. The Gulf of Guinea has among the highest global rates of piracy and armed robbery, which surged in the first half of 2018 as compared to past years. International antipiracy efforts have sharply reduced pirate attacks in waters off the Somali coast since 2013, but analysts warn of a continued threat of piracy in the region. ", "Other Transnational Threats. In parts of the continent, porous borders, corruption, and weak justice and law enforcement mechanisms have allowed transnational crime networks to operate with relative impunity. U.S. policymakers have expressed concern over potential links between transnational drug traffickers and Africa-based armed groups. Illegal poaching and wildlife trafficking are also concerns for U.S. policymakers. Some African countries have made significant progress toward curbing such activities, while others have had limited success due to inadequate capacity and/or political will. ", "International Peacekeeping. Six U.N. peacekeeping operations are underway in sub-Saharan Africa. Under the U.N. system of assessed contributions, the United States is the top source of funding for U.N. peacekeeping. The United States also provides training and equipment to peacekeeping personnel contributors through bilateral programs, funded largely via the State Department's Peacekeeping Operations (PKO) and International Narcotics Control and Law Enforcement (INCLE) accounts. The United States has also provided extensive support to the African Union Mission in Somalia (AMISOM), which was authorized by the U.N. Security Council but is not U.N.-conducted. AMISOM carries out peacekeeping activities and stabilization and counterterrorist operations, primarily against Al Shabaab, an Al Qaeda-linked group. African states play a growing role in stability operations: Ethiopia was the world's top troop contributor to U.N. peacekeeping missions in 2018, and Rwanda, Ghana, and Tanzania ranked in the top 10."], "subsections": []}, {"section_title": "What are the major armed conflicts in Africa today?", "paragraphs": [], "subsections": [{"section_title": "West Africa", "paragraphs": ["In the Lake Chad Basin region, attacks by Boko Haram and its splinter faction, an Islamic State affiliate known as IS-West Africa (IS-WA, aka ISIS-WA) have caused a spiraling humanitarian crisis. Civilians in Nigeria's impoverished, predominately Muslim northeast have borne the brunt of the violence, with border areas of neighboring Cameroon, Chad, and Niger also hard-hit. By some estimates the violence has killed more than 15,500 people since 2011. As of mid-2018, 2.4 million people were internally displaced across the region, and 220,000 more were refugees. A U.S.-backed regional force, led by Nigeria, has curtailed Boko Haram's territorial control but struggled to subdue the groups. Separately, violence between herders and farmers in Nigeria has escalated in recent years, with some 2,500 killed in such clashes in 2016 alone. ", "In Mali, Islamist armed groups have expanded their reach, leveraging the shortfalls of a 2015 peace accord between the government and northern separatists. International interventions, including a U.N. peacekeeping mission and French military operations, have failed to contain extremist violence, which has spread south and east into neighboring countries. In 2017, regional states launched a \"joint force\" to counter terrorism and other threats. The force has drawn pledges of significant donor support, including from the United States, but it is not yet fully operational."], "subsections": []}, {"section_title": "East Africa", "paragraphs": ["The war in South Sudan, which erupted in late 2013, has also been of significant concern for U.S. policymakers. Successive attempts to negotiate an end to the crisis have failed to bring sustainable peace, amid reports of widespread atrocities during the conflict. A regionally backed peace deal signed in September 2018 has quieted some areas, but violence continues in others. According to one estimate, nearly 400,000 South Sudanese (including combatants) have died as a result of the war. The conflict has displaced over 4 million people, including nearly 2.5 million refugees. Acute food insecurity threatened more than 6 million South Sudanese in late 2018\u2014including an estimated 47,000 facing famine-like conditions. The United States is South Sudan's largest humanitarian aid donor. ", "Conflict and insecurity persist in parts of Sudan, notably the western Darfur region and Southern Kordofan and Blue Nile states, despite an official cessation of hostilities by the government and some armed groups. Over a decade since the United States declared a genocide in Darfur, the conflict eludes resolution: the peace process remains stalled and insecurity and access restrictions continue to aggravate dire humanitarian needs. Beyond Darfur, rising political unrest, spurred by a severe economic crisis, could ignite a broader conflict. As of mid-2018, 7.1 million Sudanese were in need of humanitarian assistance.", "In Somalia, Al Shabaab continues to wage an asymmetric campaign against the Somali state, AMISOM, and international targets. It has killed thousands of Somali civilians since the mid-2000s and has demonstrated the capacity to conduct attacks against targets in the broader East Africa region\u2014most notably Kenya, which has faced violence in part for its role in AMISOM. A small Islamic State faction based in northern Somalia also poses a threat. More than a decade of violence has generated a protracted humanitarian emergency: as of late 2018, 2.6 million Somalis were displaced internally, while 1.1 million were refugees. Some 4.6 million are food insecure, including 1.5 million in crisis- or emergency-level food insecurity."], "subsections": []}, {"section_title": "Central Africa", "paragraphs": ["Instability has endured in DRC since the mid-1990s despite extensive international stabilization efforts, contributing to a protracted humanitarian crisis and posing a threat to the broader Great Lakes region. There were 4.5 million internally displaced people (IDPs) in DRC as of early 2018, according to U.N. agencies, twice as many as in 2015. Another 800,000 Congolese are refugees; 13.1 million Congolese are estimated to need humanitarian assistance.", "CAR has struggled to emerge from conflict and state collapse since 2013, when rebels overthrew the government. The ensuing instability has featured widespread violence against civilians, much of it along ethnic and religious lines, and the disintegration of state institutions. Prospects for stabilization and socioeconomic development appear dim, as 2.5 million Central Africans\u2014including nearly 1.2 million IDPs and refugees\u2014require humanitarian aid as of late 2018. ", "In Cameroon, protests over the perceived marginalization of English speakers in the majority Francophone country have, since 2017, escalated into a separatist insurgency amid a harsh state crackdown. Government forces and a fractious array of rebel groups have reportedly committed widespread abuses against civilians, resulting in a budding displacement crisis. ", "In Burundi, President Pierre Nkurunziza's reelection to a third term in 2015, which many viewed as unconstitutional, sparked an ongoing violent political crisis. As of mid-2018, nearly 400,000 Burundians were refugees, while 160,000 were displaced internally. Civil society and perceived regime opponents face violence from security forces and the ruling party's youth wing."], "subsections": []}]}]}, {"section_title": "U.S. Engagement", "paragraphs": [], "subsections": [{"section_title": "U.S.-Africa Policy under the Trump Administration", "paragraphs": ["In a December 2018 public address, National Security Advisor John Bolton unveiled the Trump Administration's policy approach toward Africa. He identified three core U.S. interests in Africa: expanding U.S. trade and commercial ties with African countries, \"countering the threat from Radical Islamic Terrorism and violent conflict,\" and imposing more stringent conditions on U.S. aid and U.N. peacekeeping missions in the region. Bolton indicated that the Administration would prioritize efforts to counter \"Great power competitors, namely China and Russia, [which] are rapidly expanding their financial and political influence across Africa.\" The new policy framework appears to respond to criticism from some observers suggesting that the United States seems less engaged on the continent than in previous years, at a time when other foreign actors, including China and Russia, are seeking to expand their roles.", "In his remarks, Bolton emphasized the Administration's intention to pursue such goals largely through bilateral engagement with African countries as opposed to via multilateral mechanisms. He further stressed the Administration's aim to pursue \"fair and reciprocal\" U.S.-African trade, including through comprehensive bilateral trade agreements, and the promotion of private sector-centered economic deregulation. He also announced that the Administration would seek to \"streamline, reconfigure, or terminate\" U.N. peacekeeping missions that it deems ineffective. ", "An accompanying White House fact sheet echoed such aims while emphasizing, among other ends, the Administration's intention to promote the use of nonreciprocal U.S. trade preferences provided under the African Growth and Opportunity Act (AGOA, discussed below), respond to deadly infectious diseases, advance democracy in the region, \"strengthen states where failure to do so would threaten our homeland,\" and take unilateral action when doing so is in the interest of U.S. national security. Goals identified in other Administration statements and policy documents include the continued normalization of U.S. relations with Sudan, conflict resolution in South Sudan, a peaceful electoral transition in DRC, and reforms in Ethiopia. Officials also have pressed African states to sever ties with North Korea, in line with multilateral sanctions regimes.", "The Trump Administration has proposed one new Africa-focused trade and investment initiative, \"Prosper Africa,\" and has otherwise maintained most existing Africa-focused initiatives launched by its predecessors\u2014while in some cases seeking to fund them at far lower levels. Among the most notable are the global President's Emergency Plan for AIDS Relief (PEPFAR) and Feed the Future (FTF) initiatives, and the Africa-specific Young African Leaders Initiative (YALI) and Power Africa. PEPFAR, a global effort to counter HIV/AIDS, was first authorized by Congress during the George W. Bush Administration. FTF, launched by the Obama Administration and broadly backed by Congress under the Global Food Security Act ( P.L. 114-195 ), seeks to improve food access and agricultural development in developing countries. The Obama Administration also launched Power Africa, which seeks to expand electricity access in Africa, and YALI, which aims to foster the professional development of emergent African business and civic leaders.", "While maintaining such initiatives, the Trump Administration has proposed changes to foreign assistance, including aid cuts, that could significantly affect U.S.-Africa relations. In addition to the Administration's proposals to reduce overall aid to Africa (discussed below), National Security Advisor Bolton suggested in his December 2018 remarks that the Administration would curtail aid to countries whose governments are \"corrupt,\" or \"repeatedly vote against the United States in international forums, or take action counter to U.S. interests.\" He also noted that the Administration would direct U.S. assistance to governments that pursue democratic, accountable, and transparent governance, as well as fiscal transparency, the rule of law, and growth-centered economic reforms. How this policy might affect aid programs implemented, for example, by nongovernmental organizations in conflict-affected or authoritarian countries remains to be seen. ", "The Administration's immigration policies have affected U.S.-Africa policy. It has used executive orders to prohibit nationals from several African countries (Sudan, Chad, and Somalia) from entry to the United States, subject to certain exceptions, citing terrorism concerns\u2014although as of late 2018, only Somalia remained subject to such prohibitions. Implementing a decision made by the Obama Administration, it ended \"temporary protected status\" (TPS) for nationals of three West African countries (Sierra Leone, Guinea, and Liberia) affected by the 2014-2016 Ebola outbreak. A subsequent decision to end TPS for nationals of Sudan was stayed by a court injunction. The Administration has restricted visas, or threatened to do so, for nationals of some African countries whose governments do not cooperate with U.S. court-ordered immigration removals. ", "Some African leaders reacted negatively to a derogatory remark about African countries that was attributed to President Trump in early 2018. Since taking office in July 2018, Assistant Secretary of State for African Affairs Tibor Nagy has sought to challenge perceptions of U.S. indifference or disdain\u2014as did Bolton during his December remarks."], "subsections": [{"section_title": "How has the Administration approached foreign power involvement in Africa?", "paragraphs": ["National Security Advisor Bolton has placed a high priority on countering Chinese and Russian influence in Africa. In his December remarks, Bolton accused both countries of \"targeting their investments in the region to gain a competitive advantage over the United States\" and of engaging in \"predatory practices\" on the continent, including corrupt and opaque deal-making, exploitative lending, and self-interested extractive industry activity. Such comments align with the Administration's National Security Strategy, which portrays Chinese influence as undermining African development \"by corrupting elites, dominating extractive industries, and locking countries into unsustainable and opaque debts and commitments.\" Executive branch policy documents and statements also cite rising \"great power competition\" globally, including in Africa. Limited interest by many U.S. firms in African markets has restricted the scope for direct competition with Chinese or Russian actors to date, but the region's long-term potential as a growth market could make concerns over competition more significant in the future. ", "China replaced the United States as Africa's largest trading partner in 2009. Chinese firms have constructed infrastructure projects across Africa, often using Chinese state financing tied to the substantial use of Chinese goods or services and, in some cases, Chinese access to African natural resources. These activities, which may expand under China's global \"One Belt, One Road\" initiative, help to fill infrastructure gaps, but their linkage to broader Chinese commercial and strategic interests raises challenging questions for the United States. In 2017, China established its first overseas military base, in Djibouti, at a maritime chokepoint on the Red Sea, a key global trade route. In a 2018 report to Congress, DOD stated that the base extends \"the reach of China's armed forces, reflecting China's growing influence.\" The proximity of the Chinese and U.S. bases in Djibouti adds to U.S. concerns: in 2018, the Pentagon reported several instances in which Chinese lasers from the base were directed at U.S. aircraft; two U.S. pilots suffered eye injuries. ", "Russia also has shown increasing interest in expanding its presence in Africa; by one estimate, Russia has signed at least 19 military cooperation deals with African states since 2014. Russian engagement is generally centered on arms sales, military training, intelligence exchanges, and access to minerals, notably uranium. One country that has drawn particular attention is the Central African Republic, where more than 200 Russian military and private security personnel have deployed since 2017. Russia and Sudan also have reportedly expanded cooperation. The Horn of Africa appears to be of increasing strategic importance to international actors. Several of the Arab Gulf countries, namely the United Arab Emirates (UAE), Saudi Arabia, and Qatar, as well as Turkey, Russia, and China, have increased their involvement, and some have established military bases in the region. As noted above, China maintains a military base in Djibouti; Russia, for its part, has announced plans to build a logistics center in Eritrea. Gulf actors appear to have helped facilitate reconciliation between Ethiopia and Eritrea. Whether growing foreign interests in that subregion prove to be a more stabilizing or destabilizing force remains to be seen."], "subsections": []}]}, {"section_title": "U.S.-Africa Trade, Investment, and Economic Cooperation", "paragraphs": [], "subsections": [{"section_title": "What is the scope of U.S.-Africa trade and economic relations?", "paragraphs": ["Africa accounts for a small share of overall U.S. trade and investment activity, making up less than 1% of such U.S. global transactions in 2017. As it has over the past several years, the United States ran a goods trade deficit with the region in 2017 (totaling $10.8 billion), importing $24.9 billion and exporting $14.1 billion. U.S. exports are diverse while imports are mostly in primary products (oil alone accounts for over 40% but has declined significantly in recent years). Motor vehicles (exclusively from South Africa) and apparel are the region's only significant manufactured exports to the United States. Over half of U.S. trade with the region is with the two largest economies, Nigeria and South Africa. U.S. foreign direct investment (FDI) in the region is also concentrated in a few countries, including Mauritius ($10.4 billion in 2017), South Africa ($7.3 billion), Nigeria ($5.8 billion), Ghana ($1.7 billion), and Tanzania ($1.4). The small stock of sub-Saharan African FDI in the United States comes almost exclusively from South Africa ($4.1 billion in 2017). See Figure 3 for a snapshot of U.S.-Africa trade and investment.", "U.S. trade and investment policy toward Africa is focused on encouraging economic growth and development through trade within the region, with the United States, and internationally. The U.S. government also seeks to facilitate U.S. firms' access to opportunities for trade with and investment in Africa. A growing number of Members of Congress have supported expanded efforts to pursue such goals, and multiple committees have held hearings on these topics in recent years. A major increase in African trade and investment ties with other countries, particularly China, has been a growing concern of U.S. policymakers due to questions about both lost U.S. export opportunities and potential foreign policy influence associated with such ties. Total China-Africa trade surpassed U.S.-Africa trade in 2009, and in 2017, at $137 billion, was 3.5 times as large as U.S.-Africa trade. ", "Improving economic and political climates in some African countries have led to increasing interest in the region as a destination for U.S. goods, services, and investment. Despite these trends, many U.S. businesses remain skeptical of the region's investment and trade potential and focus their investments in other regions thought to offer more opportunity and less risk. Many avoid engaging in business in Africa due to economic governance challenges in many countries, the relative difficulty of doing business, and, in some instances, political instability."], "subsections": []}, {"section_title": "What programs and legislation support expanded U.S.-Africa trade and economic relations?", "paragraphs": ["Given development challenges in the region, U.S. efforts to boost trade and investment ties with Africa have historically focused largely on improving local economic conditions. U.S. trade preferences, or nonreciprocal duty-free treatment designed to encourage exports to the United States, are a central component of that policy, particularly as embodied in the African Growth and Opportunity Act (AGOA) passed by Congress in 2000 (see below). ", "The United States also provides aid for trade capacity building (TCB, see text box) in order to help countries better engage in international trade and take advantage of the benefits of U.S. trade preferences, as well as to encourage trade-led growth. TCB funds to the region totaled $826.5 million in FY2016. Three African trade hubs, established under the George W. Bush Administration, are a pillar of U.S. TCB in the region and work to increase regional export competitiveness, intraregional trade, and AGOA use. The Trump Administration has continued the Obama Administration's effort to expand these mandates by turning the hubs into two-way U.S.-Africa trade and investment centers aimed at boosting U.S. business activity in the region.", "U.S. efforts have increasingly focused on advancing U.S. business opportunities in the region. The Trump Administration has continued several initiatives established by the Obama Administration, including the Trade Africa Initiative and the President's Advisory Council on Africa. The private-sector-led Advisory Council provides recommendations to the Administration to help facilitate U.S. commercial engagement in the region. ", "To bolster U.S. commercial engagement and general economic development in the region, the Overseas Private Investment Corporation (OPIC) provides loans, guarantees, and political risk insurance for U.S. private investment in developing and emerging economies in order to advance U.S. development and foreign policy goals. As of September 2018, 25% of OPIC's portfolio exposure was in Africa, the second largest share of any region. The Better Utilization of Investments Leading to Development Act (BUILD Act, P.L. 115-254 ), signed by the President on October 5, 2018, creates a new U.S. International Development Finance Corporation (IDFC) that will combine OPIC together with certain components of USAID, including its Development Credit Authority (DCA). The reorganization received strong bipartisan support in Congress and is viewed by many as a tool for countering China's \"One Belt, One Road\" initiative and growing economic influence in developing countries, including in Africa. The new IDFC, by statute, has expanded authority and capacity compared to current U.S. development finance activities; its $60 billion exposure cap, however, is arguably dwarfed by finance from China, which in September 2018 offered $50 billion in finance to Africa alone.", "Other agencies that promote U.S. exports to the region include the Export-Import Bank (Ex-Im Bank) and the U.S. Trade and Development Agency (USTDA). Ex-Im Bank provides direct loans, loan guarantees, and export credit insurance to help finance U.S. exports to support U.S. jobs and includes a statutory requirement to target African export opportunities. USTDA seeks to advance economic growth in Africa by promoting export opportunities for U.S. businesses. It facilitates access to finance through such activities as funding project preparation and feasibility studies, and by supporting other trade-expanding efforts. As a region, Africa typically accounts for the largest share of USTDA funding.", "Other U.S. trade and investment policy tools in place with African countries include Trade and Investment Framework Agreements (TIFAs)\u2014intergovernmental forums for dialogue on trade and investment issues\u2014and bilateral investment treaties, which advance reciprocal commitments to facilitate and protect foreign investment. The United States has a Free Trade Agreement (FTA) with Morocco, but there are no existing U.S. FTAs with sub-Saharan African countries. The United States also encourages and provides TCB support aimed at fostering African participation in broader multilateral efforts to reduce trade barriers. This includes support to facilitate African accession to, and implementation of, WTO and other multilateral trade agreements, particularly the WTO Trade Facilitation Agreement."], "subsections": []}, {"section_title": "What is AGOA and how does it affect U.S.-Africa trade?83", "paragraphs": ["AGOA (Title I, P.L. 106-200 , as amended) is a nonreciprocal U.S. trade preference program that provides duty-free tariff treatment on certain imports from eligible sub-Saharan African countries. Congress first passed AGOA in 2000 as part of a U.S. effort to promote African development, deepen economic integration within the region, and strengthen U.S.-African trade and investment ties. The program builds on the Generalized System of Preferences (GSP), which provides similar duty-free treatment on U.S. imports from developing countries worldwide. AGOA covers a wider range of products and has typically been authorized over longer periods than GSP. The Trade Preferences Extension Act of 2015 ( P.L. 114-27 ) extended AGOA's authorization for an unprecedented 10 years, to September 2025, and amended some aspects of the program. Thirty-nine countries in sub-Saharan Africa were eligible for AGOA benefits in 2018.", "AGOA also requires the President, in consultation with Congress and AGOA beneficiary governments, to hold an annual U.S.-Africa Trade and Economic Cooperation Forum (typically referred to as the \"AGOA Forum\"). The 18 th AGOA Forum, themed \"Forging New Strategies for U.S.-Africa Trade and Investment,\" was held in July 2018 in Washington, DC, where U.S. Trade Representative (USTR) Robert Lighthizer focused his remarks on U.S. interest in reciprocal trade agreements in the region. ", "When it established AGOA in 2000, Congress directed the executive branch to pursue reciprocal trade agreements, where feasible, with interested countries in sub-Saharan Africa. Negotiations on a potential U.S.-Southern African Customs Union (SACU) FTA were initiated in 2003 but suspended in 2006 due to divergent views on the scope. During the 2015 AGOA reauthorization debate this issue resurfaced, in part due to concerns that AGOA countries' reciprocal trade agreements with other advanced economies, such as South Africa's agreement with the European Union (EU), place U.S. exporters at a disadvantage in certain African markets. Congress ultimately reauthorized AGOA for 10 years for all countries but again directed the executive branch to seek reciprocal agreements in Africa. It also mandated reporting requirements on a strategy and progress to that end, as well as on the status of countries' AGOA eligibility and other developments in U.S.-Africa trade relations. ", "Total U.S. imports under AGOA were $13.5 billion in 2017, and despite the decline in recent years, energy products, mostly crude oil, remain the top import under the program (see Figure 4 ). Most analysts, however, focus on AGOA and its relation to nonenergy trade as a potential catalyst for African development. U.S. imports of such products from beneficiary countries have grown three-fold between 2001 and 2017, signaling success in achieving some of the program's goals, but a handful of countries and products continue to account for the bulk of these imports. In 2017, more than half of the $4.3 billion in nonenergy imports under AGOA were from South Africa alone, which exports the broadest range of products, including motor vehicles. Kenya, Lesotho, Mauritius, and Madagascar are the other major beneficiaries of the program and primarily export apparel products under AGOA."], "subsections": []}, {"section_title": "How does the Administration's trade policy affect U.S. trade with the region?", "paragraphs": ["U.S. trade policy has been a key focus of the Trump Administration, particularly with regard to the U.S. trade deficit, foreign trade barriers, and the effects of import competition on U.S. manufacturing. While U.S. trade with Africa may be of less concern to the Administration, as such trade is minimal and U.S. imports mostly consist of primary products, U.S. trade policy changes could significantly affect U.S. trade with some African countries, notably South Africa.", "Tariff a ctions. Increased tariffs on steel (25%) and aluminum (10%) imposed under Section 232 of the Trade Expansion Act of 1962 are of particular concern for South Africa. In 2017, South Africa was the 14 th ($279 million) and 9 th ($340 million) largest supplier of affected U.S. steel and aluminum imports, respectively. The Administration has granted product exclusions for a limited number of steel and aluminum imports from South Africa. A Section 232 investigation on U.S. motor vehicle imports remains pending, however, and could result in increased tariffs on such products, South Africa's second-largest category of exports to the United States. U.S. imports of motor vehicles from South Africa totaled $1.1 billion in 2017. Eligibility for U.S. p reference p rograms. The statutes authorizing U.S. preference programs, including AGOA, give the Administration considerable discretion in determining country eligibility. The Administration's focus on the U.S. trade deficit suggests it may look skeptically at nonreciprocal preference programs such as AGOA, which have a direct and immediate effect on U.S. imports and an indirect and longer-term effect on U.S. exports. To date, the Administration has ended AGOA eligibility for two African countries, Rwanda and Mauritania, citing (respectively) protectionism and human rights concerns. Previous Administrations similarly revoked AGOA eligibility for a variety of issues, including related to governance and labor rights. Congress may seek to consult with the Administration over its enforcement of eligibility criteria to ensure adherence to congressional objectives. Focus on reciprocal trade agreements. The Administration has made reciprocal trade negotiations a top priority of its trade policy with Africa. It is likely, however, to confront the same challenges that have dogged previous U.S. pursuit of an FTA in the region, including concern among African countries over the extensive nature of U.S. FTA commitments and concern over how an agreement with select countries may negatively affect African efforts toward regional integration. On the first issue, the Trump Administration may be more flexible in its approach than previous Administrations, as evidenced by announcements for limited-scope bilateral U.S. negotiations with the EU and Japan. The Administration's stated preference for bilateral agreements rather than agreements with larger regional blocs, however, appears at odds with the push among many African states for more regionally integrated trade policy, including via the African Continental Free Trade Area, signed by 44 African states in March. Congress is also expected to play a role in determining the scope of any new U.S. agreements in the region and would have to approve such agreements through implementing legislation."], "subsections": []}]}, {"section_title": "U.S. Support for Governance, Democracy, and Human Rights", "paragraphs": ["U.S. policymakers use several tools to promote democracy and human rights in Africa, including:", "Diplomacy and r eporting. U.S. diplomats often publicly criticize or condemn undemocratic actions and human rights violations in Africa, and raise concerns in private meetings with African leaders. Some Members of Congress likewise raise concerns directly with African leaders, with U.S. executive branch officials, or through legislation. The State Department publishes annual congressionally mandated reports on human rights conditions globally, and on other issues of concern, such as religious freedom and trafficking in persons. Such reports document violations and, in some cases, provide the basis for U.S. policy actions, such as restrictions on assistance. Congress also has imposed certain human rights-related legal restrictions on aid, as discussed below. The State Department and USAID also finance international and domestic election observer missions in Africa that produce reports on the relative credibility of electoral contests.", "Foreign a id. Multiple U.S. aid programs support African electoral institutions; train African political parties, civil society organizations, parliaments, and journalists; and assist local government officials in improving service delivery. They also provide capacity-building support and technical assistance focused on issues such as legal changes and governance reforms. Some U.S. security assistance programs are designed to improve the human rights records of African security forces and/or advance the rule of law by building the capacity of judicial and law enforcement bodies. U.S. programs also provide legal and medical aid to foreign human rights defenders, and fund ad hoc programs to address particular human rights challenges.", "Foreign a id r estrictions. Congress has imposed human rights-related restrictions or conditions on aid to specific African countries (e.g., Ethiopia, South Sudan, Sudan, and Zimbabwe), often through the enactment of foreign aid appropriations measures. Aid to multiple African governments may also be restricted by legislation curtailing or denying certain types of aid to countries that fail to observe human rights norms. These norms include:", "religious freedom, under the International Religious Freedom Act of 1998 ( P.L. 105-292 ), with Sudan and Eritrea listed in 2018 as countries of particular concern subject to potential restrictions or other sanctions; the recruitment and use of child soldiers, under the Child Soldiers Prevention Act ( P.L. 110-457 ) and related legislation, with DRC, Mali, Niger, Nigeria, Somalia, and South Sudan listed in 2018 for potential security assistance restrictions; and trafficking in persons (TIP), under the Trafficking Victims Protection Act ( P.L. 106-386 , as amended) and related legislation, with Burundi, Comoros, DRC, Equatorial Guinea, Eritrea, Gabon, Mauritania, the Republic of Congo, and South Sudan listed in 2018 for potential foreign aid restrictions.", "Sanctions. Executive orders issued under previous Administrations permit U.S. sanctions on designated persons implicated in human rights violations and/or undermining democratic transitions or peace processes in several countries, including Burundi, CAR, DRC, Somalia, Sudan, South Sudan, and Zimbabwe. In 2017, citing progress by the Sudanese government toward key U.S. priorities, the Trump Administration permanently lifted economic sanctions on Sudan that the Obama Administration had eased, though some restrictions remain in place. Also in 2017, the Trump Administration issued a new Executive Order pertaining to global human rights abuses and corruption, which it has invoked to impose targeted financial sanctions on a key financier of DRC president Joseph Kabila, as well as on former Gambian leader Yahya Jammeh, and associated businesses.", "Prosecutions. The United States has helped fund special tribunals that investigated and prosecuted human rights violations in Sierra Leone, Rwanda, and Chad. The United States is not a state party to the International Criminal Court (ICC), which in practice has prioritized human rights cases in Africa; the American Servicemembers' Protection Act of 2002 (ASPA, Title II of P.L. 107-206 ) prohibits various forms of U.S. material cooperation with the Court. The Trump Administration has pledged to end a previous policy of providing legally permissible diplomatic, informational, and logistical support to ICC prosecutions on a case-by-case basis. U.S. federal prosecutors have sought charges against some alleged perpetrators of human rights abuses in African countries, notably Rwanda and Liberia, often on the basis of violations of U.S. immigration laws. The United States has been a proponent of the establishment by the African Union of a hybrid court to investigate abuses in South Sudan."], "subsections": []}, {"section_title": "U.S. Aid to Africa", "paragraphs": [], "subsections": [{"section_title": "What are the objectives of U.S. assistance programs in the region?", "paragraphs": ["The vast majority of U.S. bilateral aid for Africa aims to address health challenges, notably relating to HIV/AIDS, malaria, maternal and child health, and nutrition. U.S. aid programs also seek to encourage economic growth and development, meet urgent humanitarian needs, promote good governance, and improve security. The U.S. Agency for International Development (USAID) administers much of this aid, typically under country strategies that target specific development needs, as well as under multiple global and Africa-specific presidential development initiatives. The State Department administers various programs aimed at bolstering health, fostering the rule of law, countering trafficking, and improving military and police professionalism, often in coordination with other executive branch agencies. The Millennium Challenge Corporation (MCC) separately supports large-scale, multiyear development projects targeting impediments to economic growth (e.g., building roads or other infrastructure) in countries that meet various governance and development benchmarks. The Department of Defense (DOD) implements some State Department-funded security assistance programs and has been authorized by Congress to provide its own assistance to foreign militaries and internal security forces. DOD also carries out military-to-military cooperation in many African countries. "], "subsections": []}, {"section_title": "How much foreign aid does the United States provide to Africa?101", "paragraphs": ["In recent years, sub-Saharan Africa has generally received between 20% and 25% of total U.S. bilateral aid administered by the State Department and USAID. In FY2017, $7.03 billion in total bilateral State Department- and USAID-administered funds were allocated specifically to African countries, not including Food for Peace (FFP) assistance under P.L. 480 Title II. Top recipients (in descending order) were Kenya, Nigeria, South Africa, Tanzania, Mozambique, Zambia, Uganda, Ethiopia, Somalia, and DRC. Many countries receive additional globally or functionally allocated funding (such as humanitarian or counterterrorism aid), MCC assistance, and/or other ad hoc executive branch agency aid, which is not included in these totals. The United States also channels substantial aid to Africa through multilateral bodies, such as the World Bank. ", "The Administration proposed $5.28 billion specifically for Africa in FY2019, a 25% decrease compared to FY2017 (not counting FFP), but a slight increase compared to the FY2018 request of $5.24 billion. The Administration also proposed in both years to eliminate FFP funding under P.L. 480 Title II, most of which has gone to African countries in recent years. (USAID administers the program, for which Congress provides funding via agriculture appropriations measures. ) FFP funding for Africa reached $1.32 billion in FY2017, of which $1.02 billion was for emergency humanitarian purposes and the remainder for development programs. Administration officials asserted that International Disaster Assistance (IDA) funding would provide greater flexibility and efficiency than FFP, leaving the precise impact of the proposals uncertain. ", "Congress appropriated FY2018 foreign aid under the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), in which it largely did not adopt the Administration's 2018 proposals; final country-level FY2018 allocations are not yet available. FY2019 foreign aid appropriations measures reported during the 115 th Congress in the House ( H.R. 6385 ) and Senate ( S. 3108 ) would have largely not adopted the Administration's global proposals. "], "subsections": []}, {"section_title": "What changes to U.S. aid to Africa has the Trump Administration pursued?", "paragraphs": ["The Trump Administration contends that its proposals to reduce and reallocate U.S. aid funding for Africa are intended to reduce spending, enhance efficiency, and prioritize U.S. national security interests. In March 2018, USAID Administrator Mark Green testified that USAID's FY2019 budget request reflected efforts to \"balance fiscal needs here at home with our leadership role on the world stage.\" ", "As noted above, the Trump Administration has requested annual bilateral State Department- and USAID-administered assistance funding at levels far below those requested by the Obama Administration or appropriated by Congress in recent years. Additionally, the Trump Administration's FY2018 and FY2019 budget proposals would have ended Food for Peace (FFP) aid under P.L. 480 Title II, most of which has gone to African countries in recent years. The Administration also has proposed merging the Development Assistance (DA) and Economic Support Fund (ESF) accounts\u2014through which African countries received roughly $1.33 billion in FY2017\u2014with several smaller accounts under a new Economic Support and Development Fund (ESDF), and requested funding far below FY2018 levels for the accounts it would replace. Congress did not adopt these proposals in enacting the FY2018 omnibus appropriations act ( P.L. 115-141 ). FY2019 Department of State, Foreign Operations, and Related Programs appropriations bills pending during the 115 th Congress in the House and the Senate ( H.R. 6385 and S. 3108 , respectively), as well as agriculture appropriations measures ( H.R. 5961 and S. 2976 ) would have likewise retained the traditional account structure and maintained global DA, ESF, and FFP funding roughly at FY2018 levels."], "subsections": []}, {"section_title": "What types of security assistance does the United States provide to Africa?108", "paragraphs": ["U.S. security assistance in Africa comprises a range of activities, including programs to train and provide equipment to foreign security forces, professionalization and education initiatives, and law enforcement assistance. A large portion of such assistance seeks to help counter terrorism; the largest cumulative share in the past decade (over $2 billion) has supported African forces fighting Al Shabaab and pursuing stabilization in Somalia. The State Department and DOD each administer some types of security assistance, as authorized and appropriated by Congress. ", "In addition to peacekeeper support, the Peacekeeping Operations (PKO) account is the primary funding vehicle for State Department-administered military aid in Africa, including for counterterrorism, maritime security, and security sector reform. It is the primary vehicle for, inter alia, U.S. support to AMISOM, bilateral military aid to DRC, and two multiyear interagency counterterrorism programs in Africa: the Trans-Sahara Counter-Terrorism Partnership (TSCTP, in North-West Africa), and the Partnership for Regional East Africa Counterterrorism (PREACT, in East Africa). H.R. 6018 , which the House passed during the 115 th Congress, would have formally established TSCTP in law while imposing new notification and reporting requirements under the program.", "The State Department also administers programs to improve African law enforcement entities, enhance military professionalization through training and technical instruction, bolster security forces' capacity to conduct internal, border, and maritime security operations, and support antitrafficking and counternarcotics activities. While some of these programs are funded through the PKO account, those involving internal security forces are generally funded through the International Narcotics Control and Law Enforcement (INCLE) or Nonproliferation, Anti-terrorism, Demining, and Related Programs (NADR) accounts.", "DOD implements some State Department-administered programs, such as the International Military Education and Training (IMET) program. DOD also funds and administers certain congressionally authorized security cooperation programs to help build the capacity of foreign partner states. These include DOD's \"global train and equip\" program, which Congress codified under 10 U.S.C. 333 (\"Section 333\") in the FY2017 National Defense Authorization Act. Section 333 consolidated and superseded various \"partner capacity-building\" authorities that Congress had granted to DOD on a temporary or otherwise limited basis, related to counterterrorism, counterproliferation, maritime security, counternarcotics, and countering transnational organized crime. Top African recipients of DOD global train-and-equip assistance over the past decade include Kenya, Uganda, Niger, Chad, Somalia, Mauritania, and Cameroon. DOD is also authorized to carry out certain assistance related to activities such as countering wildlife crime and cooperative threat reduction. "], "subsections": []}]}, {"section_title": "U.S. Military Engagement in Africa", "paragraphs": [], "subsections": [{"section_title": "How large is the U.S. military presence in Africa?", "paragraphs": ["An October 2017 attack that killed four U.S. Special Operations Forces (SOF) soldiers in Niger, followed by a June 2018 attack on SOF personnel in Somalia that killed one U.S. soldier and injured four others, have drawn attention to the expanding U.S. military presence in Africa. Public statements by DOD officials suggest that there are up to 7,200 DOD personnel in Africa at any one time, presumably including personnel charged with guarding U.S. diplomatic facilities. The majority are stationed in Djibouti, which hosts Camp Lemonnier\u2014the only enduring U.S. military base in Africa. The second-largest number, as of mid-2018, were deployed in Niger, with about 730 troops engaged in a range of activities, including construction of a new airfield in the northern town of Agadez. News reports, citing DOD sources, indicate that DOD's presence in Africa includes an estimated 1,200 SOF members, including those involved in train, equip, advise, and/or accompany missions. In November 2018, DOD announced plans to reduce and \"realign\" the U.S. military presence in Africa in the coming years (see below)."], "subsections": []}, {"section_title": "What roles does the U.S. military play in Africa?", "paragraphs": ["U.S. Africa Command (AFRICOM)'s 2018 Posture Statement noted five lines of effort:", "1. Develop security and stability in East Africa, 2. Degrade violent extremist organizations in the Sahel and Maghreb regions and contain instability in Libya, 3. Contain Boko Haram and degrade Boko Haram and ISIS-West Africa, 4. Interdict illicit activity in the Gulf of Guinea and Central Africa, and 5. Build African peacekeeping, humanitarian assistance, and disaster response capacities.", "The 2018 Posture Statement also identified three enduring tasks of the U.S. military in Africa: protecting U.S. personnel and facilities, maintaining U.S. access, and building partner capacity. The last is conducted under AFRICOM's \"By, With, and Through\" framework, which \"emphasizes U.S. military capabilities employed in a supporting role, not as principal participants in an armed conflict.\" This approach aligns with DOD's 2018 National Defense Strategy , which sets out the U.S. military's goals in Africa of \"working by, with, and through local partners and the European Union to degrade terrorists\" and helping to \"build the capability required to counter violent extremism, human trafficking, trans-national criminal activity, and illegal arms trade with limited outside assistance; and limit the malign influence of non-African powers.\" ", "Under this framework, the U.S. military provides training, equipment, intelligence, logistical support, and, in some cases, advisory support to various African partner forces, as well as logistical and intelligence support to French forces operating in the Sahel, as authorized by Congress. Other major DOD activities in Africa include the deployment, since 2013, of hundreds of U.S. military personnel to sites in Niger and Cameroon to conduct intelligence, surveillance, and reconnaissance (ISR) activities in the Sahel and Lake Chad Basin. Separately, in Somalia, the number of U.S. military personnel increased significantly in 2017\u2014from roughly 200 to more than 500\u2014as the United States deployed more special operations advisers across the country to \"advise, assist, and accompany\" Somali and AU counterterrorism missions. ", "The U.S. military also has taken direct action (such as air strikes) against terrorist threats in Africa, notably in Somalia. U.S. strikes in Somalia were initiated under the George W. Bush Administration and have since expanded and accelerated. In 2015, President Obama notified Congress that military operations in Somalia were carried out not only \"to counter Al Qaeda and associated elements of Al Shabaab\" but also \"in support of Somali forces, AMISOM forces, and U.S. forces in Somalia.\" In 2016, the Obama Administration publicly referred to Al Shabaab as an \"associated force\" of Al Qaeda, in the context of the 2001 Authorization for Use of Military Force (AUMF). President Trump has further broadened the scope of U.S. military involvement in Somalia, authorizing DOD to conduct lethal action against Al Shabaab within a geographically defined \"area of active hostilities\" in support of partner forces in Somalia (such as AMISOM and elements of the Somali security forces). U.S. officials have described some airstrikes in Somalia as conducted in \"self-defense\" of U.S., Somali, or AMISOM forces. ", "In 2017, AFRICOM announced that it would end Operation Observant Compass (OOC), a U.S. military advisory mission deployed in 2011 to support African-led efforts to counter the Lord's Resistance Army (LRA) rebel group then active in CAR, South Sudan, and DRC. Citing progress made in degrading the LRA, AFRICOM stated that some U.S. military personnel would transition to \"broader scope security and stability activities\" in Central Africa. ", "The U.S. military also conducts exercises with African militaries and shares skills related to goals such as disaster and humanitarian response and maritime security. In the Sahel, these include a large multinational annual exercise known as Flintlock. A small number of U.S. military personnel (49 as of September 2018) are deployed as staff officers in U.N. peacekeeping operations in the region. Nearly every U.S. Embassy in Africa also hosts some U.S. military personnel, for example as part of the Defense Attach\u00e9 Office, Office of Security Cooperation, and/or Marine Security Detachment. "], "subsections": []}, {"section_title": "What changes to U.S. military engagement has the Administration pursued?", "paragraphs": ["As noted above, the Administration has broadened the scope of U.S. military involvement in Somalia\u2014to comprise lethal action against Al Shabaab within a geographically defined \"area of active hostilities\" in support of partner forces\u2014and has overseen a continued increase in the tempo of U.S. air strikes there. Reportedly, the Trump Administration also initially expanded the use of U.S. military advisors in several countries in Africa, including missions in which U.S. personnel were embedded with local security forces in the context of counterterrorism operations. Military commanders, however, have more recently signaled that they are reexamining or curtailing some such missions in the aftermath of the October 2017 deadly ambush in Niger. ", "More broadly, the Trump Administration has signaled that \"inter-state strategic competition, not terrorism, is now the primary concern in U.S. national security\" In this regard, DOD has announced \"force optimization\" plans, to be implemented over several years, entailing \"a reduction of about 10 percent of the 7,200 military forces serving in Africa Command\" and a reorientation of missions to emphasize great power competition. Precisely how the downsizing will be implemented, and its implications for specific missions, remain unclear. DOD's announcement suggested that counterterrorism activities would be de-emphasized overall, although operations in Somalia, Djibouti, and Libya would \"largely remain the same.\" In January 2019, however, conflicting reports citing DOD sources suggested a drawdown of U.S. military personnel in Somalia was under consideration. "], "subsections": []}]}, {"section_title": "The 115th Congress", "paragraphs": ["The 115 th Congress shaped U.S. engagement with Africa through its appropriations, authorization, and oversight roles. It enacted several pieces of legislation that have influenced U.S.-Africa policy and programs, including the African Growth and Opportunity Act and Millennium Challenge Act Modernization Act ( P.L. 115-167 ), the Zimbabwe Democracy and Economic Recovery Amendment Act of 2018 ( P.L. 115-231 ); the BUILD Act ( P.L. 115-254 ); the Global Food Security Reauthorization Act ( P.L. 115-266 ), annual National Defense Authorization Acts (most recently, P.L. 115-232 ), and foreign aid and defense appropriations measures (most recently, P.L. 115-141 ). The House and Senate also considered bills and resolutions responding to emerging developments in specific countries.", "As in past Congresses, legislative engagement by the 115 th Congress on Africa-related issues often centered on responding to humanitarian crises (e.g., S.Res. 114 , expressing the sense of the Senate regarding humanitarian crises in Nigeria, Somalia, South Sudan, and Yemen, and H.Res. 187 , on famine response efforts in South Sudan) and condemning human rights violations and undemocratic governance (e.g., H.Res. 128 , supporting respect for human rights and inclusive governance in Ethiopia, S.Res. 386 , urging the government of DRC to proceed with planned elections, and H.R. 6207 , which would have codified into law certain sanctions relating to DRC and require that the President submit to Congress a list of senior DRC political figures suitable for sanction). In addition, as noted above, H.R. 6018 would have established in law a long-running regional counterterrorism program in North-West Africa. Hearings in the House Foreign Affairs Committee and Senate Foreign Relations Committee attended to developments in Ethiopia, Cameroon, DRC, Zimbabwe, and South Sudan; humanitarian crises in Africa; human and civil rights issues on the continent; China's role in Africa; and U.S. military engagement in the region."], "subsections": []}]}, {"section_title": "Outlook", "paragraphs": ["Significant challenges and opportunities on the African continent, as well as shifts in U.S.-Africa policy under the Trump Administration, may continue to shape Congress' consideration of U.S. policy and programs in Africa. As it debates budgetary, policy, and oversight priorities, the Congress may consider issues such as", "Rapidly shifting politics and international engagement in the Horn of Africa, where a new government in Ethiopia has initiated sweeping changes at home and pursued peace with erstwhile rival Eritrea. Ongoing conflicts and humanitarian crises in South Sudan, Somalia, DRC, the Lake Chad Basin, CAR, and Mali, among others. The evolution of armed Islamist extremist threats in Africa, along with other transnational security issues, such as maritime piracy and narcotics smuggling in parts of the region. The prospects for expanding democracy in Africa, amid rising repression in Tanzania, leadership changes in Southern Africa, and enduring authoritarianism in countries such as Sudan, Rwanda, Eritrea, and Equatorial Guinea. Forthcoming presidential elections in several countries, including Nigeria (February 2019), Senegal (February 2019), Mauritania, Malawi, and South Africa (all in May 2019), and Mozambique (October 2019). U.S.-Africa trade and investment issues, including the effects of the Administration's tariff actions, possible reciprocal trade agreement negotiations, and the implementation of the BUILD Act as it affects the region. The scope, status, and operational goals of U.S. military deployments in Africa, following DOD's announcement of a proposed realignment that would reduce U.S. troop levels in the region. The scale and programmatic focus of U.S. foreign assistance to African countries in the context of the Trump Administration's forthcoming FY2020 aid budget proposal and FY2019 country allocations decisions. The involvement in Africa of foreign powers such as China, Russia, and Gulf states, and the implications for U.S. interests and policy.", "Congress may draw on a number of tools to shape U.S.-Africa policy, including foreign aid and defense authorization and appropriation legislation, other legislation, direct engagement with the Administration and African leaders, and oversight activities. While the 115 th Congress did not adopt many of the Administration's proposals regarding aid to Africa, it maintained a focus on areas of enduring congressional interest, including U.S. trade and investment, humanitarian crisis and response, human rights and democracy, and U.S. military activities. Congress may continue to consider similar issues as it weighs the appropriate balance between U.S. diplomacy, development and economic engagement, and defense priorities in Africa and responds to emerging developments in the region."], "subsections": []}]}}
{"id": "R43475", "title": "FY2020 Budget Documents: Internet and GPO Availability", "released_date": "2019-04-10T00:00:00", "summary": ["Every year the President submits a series of volumes to Congress containing the President's proposed budget for the coming fiscal year. The President's submission is required on or after the first Monday in January, but no later than the first Monday in February (31 U.S.C. \u00a71105(a)). This year the President released the budget submission, in two installments, on March 11, and March 18, 2019.", "This report provides brief descriptions of the FY2020 budget volumes and related documents, together with internet addresses, Government Publishing Office (GPO) stock numbers, and prices for obtaining print copies of these publications. It also explains how to find the locations of government depository libraries, which can provide both printed copies for reference use and internet access to the online versions. This report will be updated as events warrant.", "Please note that neither the Congressional Research Service (CRS) nor the Library of Congress (LOC) distributes print copies of the budget documents."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The President's budget for FY2020 consists of a multivolume set of materials issued by the Office of Management and Budget (OMB). The materials contain information on new budget proposals, summ ary tables, detailed financial information on individual programs and accounts, economic analysis, historical data, explanations of the budget processes, and supporting documents. Every year the President submits these materials to Congress at the start of the budget cycle for the next fiscal year. The President's submission is required on or after the first Monday in January, but no later than the first Monday in February (31 U.S.C. \u00a71105(a)). However, incoming presidential Administrations do not generally release multivolume budget sets in February. This year the President released the budget submission, in two installments, on March 11, and March 18, 2019. ", "Other budget-related documents include the annual Economic Report of the President , issued by the Council of Economic Advisors, and the Budget and Economic Outlook , an annual publication issued by the Congressional Budget Office (CBO). Details on these publications are included in this report."], "subsections": []}, {"section_title": "The President's Budget Documents, FY2020", "paragraphs": ["Both OMB and the Government Publishing Office (GPO) provide internet access to the main and supporting budget documents, spreadsheet files, the public budget database, and budget amendments and supplementals proposed by the President; see http://www.whitehouse.gov/omb/budget and https://www.govinfo.gov/app/collection/BUDGET , respectively. OMB provides additional summary table information on agency budgets and key issues in the form of fact sheets, available at https://www.whitehouse.gov/omb/fact-sheets/ .", "Information on purchasing print copies of these documents appears below, along with a brief description of the contents of each document. "], "subsections": [{"section_title": "The Budget of the U.S. Government, FY2020", "paragraphs": ["The annual budget volume contains information, charts, and graphs pertaining to the President's new budget proposals and overviews of government activities by topic (e.g., \"Modernizing Government\" and \"A Budget for a Better American\") within the FY2020 Budget volume. Summary Tables (pp. 105-139) contain projections of budget baselines, receipts, and outlays; deficits; debt; discretionary spending; and economic projections from FY2019 to FY2029. Federal programs that have been recommended by the Administration for termination or reduction are detailed in the document entitled Major Savings and Reforms , available at https://www.whitehouse.gov/wp-content/uploads/2019/03/msar-fy2020.pdf .", "(GPO stock number 041-001-00731-8, 150 pages, $22)"], "subsections": []}, {"section_title": "The Budget of the U.S. Government, FY2020 (CD-ROM)", "paragraphs": ["The FY20 20 Budget CD-ROM contains the full content of the budget documents and most supporting documents for the budget in PDF files. Some data files are also included in spreadsheet format. The CD-ROM provides software to search, display, and print.", "(GPO stock number and ordering information not yet available)"], "subsections": []}, {"section_title": "Analytical Perspectives, Budget of the United States Government, FY2020", "paragraphs": ["This volume includes economic, accounting, and crosscutting analyses of government programs and activities designed to highlight specific subject areas. It also includes information on federal receipts and collections, analysis of federal spending, detailed information on federal borrowing and debt, baseline or current service estimates, and other technical presentations. Chapter 17, \"Aid to State and Local Governments,\" contains a series of tables (pp. 231-247) that provide selected grant and other federal assistance data by state.", "The FY2020 Analytical Perspectives volume contains supplemental materials including tables showing the budget by agency and account and by function, subfunction, and program. The supplemental materials also include data on direct and guaranteed loan transactions of the federal government. The supplemental material is available on a CD-ROM, in the printed document, or on the GPO website at https://www.govinfo.gov/app/collection/BUDGET .", "(GPO stock number 041-001-00732-6, $52, 360 pages)"], "subsections": []}, {"section_title": "Appendix, Budget of the United States Government, FY2020", "paragraphs": ["Designed primarily for the use of the House and Senate appropriations committees, the Appendix contains more detailed financial information on individual programs and appropriations accounts than any of the other budget documents submitted by the President. In many presidential budget submissions, the volume often provides the following information for agencies:", "proposed text of the appropriation language, budget schedules for each account, new legislative proposals, explanations of the work to be performed and the funds needed, and proposed general provisions applicable to the appropriations of entire agencies or groups of agencies.", "Typically, elements within this information are distinguished by varying font, so that, for example, proposed appropriations (italics) and prior year funding (brackets and no italics) can be compared at a glance:", "For expenses necessary for the administration of the Department of Justice,", "[$111,500,000] $125,896,000 , of which not to exceed $4,000,000 for security and construction of Department of Justice facilities shall remain available until expended. ( Department of Justice Appropriations Act, 2016 )", "Note that the FY2020 budget appendix does not pair prior year funding figures with proposed appropriations.", "(GPO stock number 041-001-00733-4, $82, 1,3 20 pages)"], "subsections": []}, {"section_title": "Historical Tables, Budget of the United States Government, FY2020", "paragraphs": ["These detailed tables cover budget deficit/surplus, outlays, receipts, discretionary and mandatory spending, federal debt, federal employment, payments for individuals, spending by function and agency, and grants to states and local governments. These tables provide some data from 1940 (or earlier) and estimates through FY2024. Historical data are adjusted by OMB to be consistent with data in the FY2020 budget and to provide comparability over time. This year the Historical Tables are available online in spreadsheet and PDF instead of print. The Historical Tables are available at https://www.whitehouse.gov/omb/historical-tables/ . "], "subsections": []}]}, {"section_title": "Economic Report of the President, 2019", "paragraphs": ["This year's annual Economic Report of the President was submitted by the Council of Economic Advisers and transmitted to Congress in March 2019. It presents the Administration's economic policies and contains the annual report of the Council of Economic Advisers. It also presents an overview of the nation's economic progress using text and extensive data appendices. Appendix B of the Economic Report includes current and historical statistics on major aspects of economic activity (pp. 625-705). Statistics include national income and expenditures, government finance, population, employment, wages, productivity, prices, debt measures, corporate finance, and international statistics. The report is also available from the GPO website at https://www.govinfo.gov/app/collection/ERP/ . A searchable database of the Economic Report of the President for each year from 1995 to the present is also available at this site. Spreadsheet files from Appendix B of the report can be accessed at the link above .", "(GPO stock number and ordering information not yet available)"], "subsections": [{"section_title": "Mid-Session Review", "paragraphs": ["OMB issues revised estimates of budget receipts, outlays, and budget authority in the Mid-Session Review . This annual document is typically released in the summer following the President's budget submission. The FY2020 document is not currently available, but should be available in the summer on the OMB website .", "(GPO stock number and ordering information not yet available)"], "subsections": []}]}, {"section_title": "Agency Budget Justifications", "paragraphs": ["After the President's budget documents are released, Congress begins to hold hearings on agency budget requests. Agencies must submit their budget justifications to the appropriations subcommittees holding the hearings. Budget justifications generally contain more detailed descriptions of an agency's proposals and programs than are provided in the President's budget documents. As mandated by OMB in Section 22.6 of the 2006 edition of Circular A-11 and subsequent editions, executive agencies are required to post their congressional budget justification materials on the internet within two weeks of transmittal to Congress.", "Typically, Administration budget requests appear along with actual numbers for the previous fiscal year. The content and structure of these submissions may vary and some materials may not correspond exactly with the data and information provided to Congress in other fiscal years. A short overview on the agency budget justification request can be found within CRS Report RS20268, Agency Justification of the President's Budget , by Michelle D. Christensen. "], "subsections": []}, {"section_title": "Additional Comparative Budget Data by Agency and Account", "paragraphs": [], "subsections": [{"section_title": "Supporting Documents", "paragraphs": ["OMB produces a number of additional documents that further examines certain budgetary categories, including the Federal Credit Supplement , which provides summary information on certain federal loan and loan guarantee programs through a series of detailed tables; Object Class Analysis , a report on the federal government's obligations as broken out by object classifications; and Balances of Budget Authority , which provides data on unobligated balances carried forward to the start of the next fiscal year. All three documents are available online at https://www.whitehouse.gov/omb/supplemental-materials/ ."], "subsections": []}, {"section_title": "Public Budget Database, FY2020", "paragraphs": ["OMB also maintains a publicly accessible database in Excel and comma delimited format called the Public Budget Database . This resource provides account level detail data on budget authority for the years FY1976 to FY2024, and budget outlays and budget receipts for FY1962 to FY2024. This resource is available on the GPO FY2020 budget website at https://www.govinfo.gov/app/collection/BUDGET/ . A user's guide in PDF format is also available on this site by clicking on the expandable tab for the document."], "subsections": []}]}, {"section_title": "Congressional Budget Office", "paragraphs": [], "subsections": [{"section_title": "Analysis of the President's FY2020 Budget", "paragraphs": ["This report provides an analysis of the President's budgetary proposals and CBO's updated baseline budget projections. The FY2020 report should be forthcoming.", "(GPO ordering information is currently not available.)"], "subsections": []}, {"section_title": "Budget and Economic Outlook: FY2019-FY2029", "paragraphs": ["CBO's baseline budget projections typically span 11 fiscal years in its reports. The Budget and Economic Outlook includes separate chapters on the economic outlook, outlays, and receipts. This document is typically released in January, and it usually includes discussions on current economic conditions. The FY2019 report is available on the CBO website at https://www.cbo.gov/publication/54918 . CBO issues an annual summer update of the Budget and Economic Outlook with adjusted projections. This document and other budget and economic information, including CBO's monthly budget review are available at http://www.cbo.gov/topics/budget .", "(GPO stock number 052-070-07759-0, $30, 176 pages)"], "subsections": []}]}, {"section_title": "GPO Ordering Information", "paragraphs": ["Printed copies of budget documents are available for purchase from GPO by the following methods:", "online at the GPO website, at http://bookstore.gpo.gov/catalog/budget-economy/federal-budgets-year ; by telephone, [phone number scrubbed] or [phone number scrubbed]; by fax, [phone number scrubbed]; or, by mail using the GPO order form (check or money order), addressed to U.S. Government Publishing Office, P.O. Box 979050, St. Louis, MO 63197-9000."], "subsections": []}, {"section_title": "Depository Libraries", "paragraphs": ["Budget documents are often available for reference use at large public or university libraries, or any library participating in the Federal Library Depository Program. Addresses of the depository libraries can be obtained through a local library; from GPO's Customer Services department, [phone number scrubbed] or [phone number scrubbed]; or online from the GPO website at https://www.gpo.gov/askgpo/ . "], "subsections": []}, {"section_title": "Websites on Budget Legislation", "paragraphs": [], "subsections": [{"section_title": "Congressional Staff", "paragraphs": ["The Congressional Research Service (CRS) has developed (for Members of Congress and their staffs) web pages covering the budget and appropriations process.", "Appropriations and Budget Analysis. For CRS products on appropriations status, jurisdictions, processes, current appropriations bills, and other budget-related resources, Members and congressional staff can access the CRS website http://www.crs.gov/iap/appropriations . The CRS Appropriations Status Table, a table which tracks the progress of major actions related to appropriations bills, is available at http://www.crs.gov/AppropriationsStatusTable/Index . CRS Products on the Federal Budget Process. Explanations of budget concepts, terminology, congressional and executive budget process, congressional budget timetable, budget resolutions and reconciliation, the authorization and appropriations process, entitlements and discretionary spending, the Budget Enforcement Act, sequestration, and surpluses/deficits are available from the CRS website ."], "subsections": []}, {"section_title": "Public Use", "paragraphs": ["The public may access Congress.gov, the legislative website produced by the Library of Congress . The site includes a Status of Appropriations Legislation for the current year and several previous fiscal years, which include links to bills, committee and conference reports, and votes for the 12 regular, and any supplemental, appropriations bills. The Congress.gov Status Table of Appropriations is available at https://www.congress.gov/resources/display/content/Appropriations+and+Budget . A public version of the CRS Appropriations Status Table is available at https://crsreports.congress.gov/AppropriationsStatusTable . "], "subsections": []}]}]}}
{"id": "R44670", "title": "The Social Security Retirement Age", "released_date": "2019-03-07T00:00:00", "summary": ["The Social Security full retirement age (FRA) is the age at which workers can first claim full Social Security retired-worker benefits. Among other factors, a worker's monthly benefit amount is affected by the age at which he or she claims benefits relative to the FRA. Benefit adjustments are made based on the number of months before or after the FRA the worker claims benefits. The adjustments are intended to provide the worker with roughly the same total lifetime benefits, regardless of when he or she claims benefits, based on average life expectancy. Claiming benefits before the FRA results in a permanent reduction in monthly benefits (to take into account the longer expected period of benefit receipt); claiming benefits after the FRA results in a permanent increase in monthly benefits (to take into account the shorter expected period of benefit receipt).", "The FRA was 65 at the inception of Social Security in the 1930s. Under legislation enacted in 1983, the FRA is increasing gradually from 65 to 67 over a 22-year period (for those reaching age 62 between 2000 and 2022). The FRA will reach 67 for workers born in 1960 or later (i.e., for workers who become eligible for retirement benefits at age 62 in 2022). Currently, the FRA is 66 and 6 months for workers who become eligible for retirement benefits in 2019 (i.e., workers born in 1957).", "Workers can claim reduced retirement benefits as early as age 62 (the early eligibility age). Spouses can also claim reduced retirement benefits starting at age 62. Other dependents, such as widow(er)s, can claim benefits at earlier ages. For workers with an FRA of 66, for example, claiming benefits at age 62 results in a 25% reduction in monthly benefits. For workers with an FRA of 67, claiming benefits at age 62 results in a 30% benefit reduction. A majority of retired-worker beneficiaries claim benefits before the FRA. In 2017, 37% of new retired-worker beneficiaries were age 62; almost two-thirds (64%) were under the age of 66.", "Workers who delay claiming benefits until after the FRA receive a delayed retirement credit, which applies up to the age of 70. For workers with an FRA of 66, for example, claiming benefits at age 70 results in a 32% increase in monthly benefits. For workers with an FRA of 67, claiming benefits at age 70 results in a 24% benefit increase. In 2017, almost one-fourth (23%) of new retired-worker beneficiaries were age 66; 12% were over the age of 66.", "Some lawmakers have called for increasing the Social Security retirement age in response to the system's projected financial imbalance, citing gains in life expectancy for the population overall. Other lawmakers, however, express concern that increasing the retirement age would disproportionately affect certain groups within the population, citing differences in life expectancy by socioeconomic groups. Differential gains in life expectancy are important in the context of Social Security because the actuarial adjustments for claiming benefits before or after the full retirement age are based on average life expectancy. Proposals to increase the retirement age are also met with concerns about the resulting hardship for certain workers, such as those in physically demanding occupations, who may be unable to work until older ages and may not qualify for Social Security disability benefits. For an in-depth discussion of potential changes in the Social Security retirement age in the context of life expectancy trends, see CRS Report R44846, The Growing Gap in Life Expectancy by Income: Recent Evidence and Implications for the Social Security Retirement Age."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Social Security full retirement age (FRA) is the age at which workers can first claim full Social Security retired-worker benefits. Among other factors, the age at which an individual begins receiving Social Security benefits has an impact on the size of the monthly benefits. Claiming benefits before the FRA can substantially reduce monthly benefits, whereas claiming benefits after the FRA can lead to a substantial increase in monthly benefits. Benefit adjustments are made based on the number of months before or after the FRA the worker claims benefits. The adjustments are intended to result in roughly the same total lifetime benefits, regardless of when the worker claims benefits, based on average life expectancy.", "The FRA was 65 at the inception of Social Security in the 1930s. As part of legislation enacted in 1983, the FRA is increasing gradually from 65 to 67 over a 22-year period that started for those who turned age 62 in 2000. The increase in the FRA will be fully phased in (the FRA will reach 67) for workers born in 1960 or later (i.e., for workers who become eligible for retirement benefits at age 62 in 2022). For workers who become eligible for retirement benefits in 2019 (i.e., workers born in 1957), the FRA is 66 and 6 months.", "Workers can claim Social Security retired-worker benefits as early as age 62, the early eligibility age (EEA). However, workers who claim benefits before the FRA are subject to a permanent reduction in their benefits. Spouses can also claim reduced retirement benefits as early as age 62. Other types of dependents can claim benefits before the age of 62.", "Workers who claim benefits after the FRA receive a delayed retirement credit that results in a permanent increase in their monthly benefits. The credit applies up to the age of 70. Claiming benefits after attainment of age 70 does not result in any further increase in monthly benefits."], "subsections": []}, {"section_title": "Full Retirement Age", "paragraphs": ["The FRA was 65 at the inception of Social Security. According to Robert Myers, who worked on the creation of the Social Security program in 1934 and later served in various senior and appointed capacities at the Social Security Administration (SSA), \"[a]ge 65 was picked because 60 was too young and 70 was too old. So we split the difference.\" On the other hand, SSA suggests that the Committee on Economic Security (CES) made the proposal of 65 as the retirement age due to the prevalence of private and state pension systems using 65 as the retirement age and the favorable actuarial outcomes for 65 as the retirement age.", "In 1983, Congress increased the FRA as part of the Social Security Amendments of 1983, which made major changes to Social Security's financing and benefit structure to address the system's financial imbalance at the time. Among other changes, the FRA was increased gradually from 65 to 67 for workers born in 1938 or later. Under the scheduled increases enacted in 1983, the FRA increases to 65 and 2 months for workers born in 1938. The FRA continues to increase by two months every birth year until the FRA reaches 66 for workers born in 1943 to 1954. Starting with workers born in 1955, the FRA increases again in two-month increments until the FRA reaches 67 for workers born in 1960 or later. The increase in the FRA, one of many provisions in the 1983 amendments designed to improve the system's financial outlook, was based on the rationale that it would reflect increases in longevity and improvements in the health status of workers. The 1983 amendments did not change the early eligibility age of 62 (discussed below); however, the increase in the FRA results in larger benefit reductions for workers who claim benefits between the age of 62 and the FRA. Table 1 shows the FRA by worker's year of birth under current law."], "subsections": []}, {"section_title": "Early Eligibility Age", "paragraphs": ["Currently, the EEA is 62 for workers and spouses; this is the earliest age at which they can claim retirement benefits. Benefits claimed between age 62 and the FRA, however, are subject to a permanent reduction for \"early retirement.\" When the original Social Security Act was enacted in 1935, the earliest age to receive retirement benefits was the FRA (age 65). In 1956, the eligibility age was lowered from 65 to 62 for female workers, wives, widows, and female dependent parents. This was to allow wives, who traditionally were younger than their husbands, to qualify for benefits at the same time as their husbands. Benefits for female workers and wives were subject to reduction if claimed between the ages of 62 and 65; the reduction did not apply to benefits for widows and female dependent parents.", "In 1961, the eligibility age was lowered from 65 to 62 for men as well. Benefits for male workers and husbands were subject to reduction if claimed between the ages of 62 and 65; the reduction did not apply to widowers and male dependent parents. Although the eligibility age was made consistent for male and female workers, an inconsistency remained in the calculation of benefits. A man the same age as a woman needed more Social Security credits to qualify for benefits, and, if his earnings were identical to hers, usually received a lower benefit because his earnings were averaged over a longer period. This inconsistency was addressed in legislation enacted in 1972 which provided that retirement benefits would be computed the same way for men and women (the provision was fully effective for men reaching age 62 in 1975 or later).", "In subsequent years, further adjustments were made to the eligibility age for surviving spouses. The eligibility age was lowered to age 60 for widows (1965), age 50 for disabled widow(er)s (1967), and age 60 for widowers (1972). "], "subsections": []}, {"section_title": "Actuarial Modification to Benefits: Claiming Before or After the FRA", "paragraphs": ["Benefits are adjusted based on the age at which a person claims benefits to provide roughly the same total lifetime benefits regardless of when a person begins receiving benefits, based on average life expectancy. The earlier a worker begins receiving benefits (before the FRA), the lower the monthly benefit will be, to offset the longer expected period of benefit receipt. Conversely, the longer a worker delays claiming benefits (past the FRA), the higher the monthly benefit will be, to take into account the shorter expected period of benefit receipt. The benefit adjustment is based on the number of months between the month the worker attains the FRA and the month he or she claims benefits. The day of birth is ignored for adjustment purposes, except for those born on the first of the month. Workers born on the first of the month base their FRA as if their birthday was in the previous month (e.g., someone born on February 1, 1980, who has an FRA of 67, can apply for full retirement benefits in January 2047). A calculator on SSA's website allows the user to enter his or her date of birth and the expected month of initial benefit receipt to see the effect of early or delayed retirement; the effect is shown as a percentage of the full benefit payable at the FRA. "], "subsections": [{"section_title": "Actuarial Reduction for Claiming Benefits Before the FRA", "paragraphs": ["When a worker claims benefits before the FRA, there is an actuarial reduction in monthly benefits. The reduction for claiming benefits before the FRA can be sizable and it is permanent; all future monthly benefits are payable at the actuarially reduced amount. For each of the 36 months immediately preceding the FRA, the monthly rate of reduction from the full retirement benefit is five-ninths of 1%. This equals a 6\u2154% reduction each year. For each month earlier than three years (36 months) before the FRA, the monthly rate of reduction is five-twelfths of 1%. This equals a 5% reduction each year. The earliest a worker can claim retirement benefits is age 62. For a worker with an FRA of 67, claiming benefits at 62 results in a 30% reduction in their monthly benefit. Table 2 shows the actuarial reduction applied to retired-worker benefits based on the FRA and the age at which benefits are claimed."], "subsections": []}, {"section_title": "Delayed Retirement Credit for Claiming Benefits After the FRA", "paragraphs": ["Workers who claim benefits after the FRA receive a delayed retirement credit (DRC). As with the actuarial reduction for early retirement, the delayed retirement credit is permanent. The DRC has been modified over the years. Initially, the Social Security Amendments of 1972 provided a delayed retirement credit that increased benefits by one-twelfth of 1% for each month between ages 65 and 72 that a worker did not claim benefits (i.e., 1% per year). The credit, which was effective after 1970, applied only to the worker's benefit; it did not apply to a widow(er)'s benefit payable on the worker's record. The Social Security Amendments of 1977 increased the credit to 3% per year and included the credit in the computation of a widow(er)'s benefit.", "The credit was further increased under the Social Security Amendments of 1983. As shown in Table 3 , under current law, the amount of the credit varies based on the worker's year of birth (i.e., when the worker becomes eligible for benefits at age 62). The credit increases gradually until it reaches 8% per year (two-thirds of 1% per month) for workers born in 1943 or later (i.e., workers who became eligible for retirement benefits in 2005 or later). In addition, the maximum age at which the DRC applies was lowered from 72 to 70. Any further delay in claiming benefits past age 70 does not result in a higher benefit. The increase in the DRC was intended to ensure that workers who claim benefits after the FRA receive roughly the same total lifetime benefits as if they had claimed benefits earlier (based on average life expectancy). A worker with an FRA of 66, for example, receives a 32% benefit increase if he or she claims benefits at age 70; a worker with an FRA of 67 receives a 24% benefit increase.", " Figure 1 illustrates the effect of claiming age on benefit levels based on an FRA of 66. If the worker claims retirement benefits at age 62, for example, his or her benefit would be equal to 75% of the full benefit amount\u2014a 25% permanent reduction based on claiming retirement benefits four years before attaining the FRA. If the worker delays claiming retirement benefits until age 70, however, his or her benefit would be equal to 132% of the full benefit amount\u2014a 32% permanent increase for claiming benefits four years after the FRA. "], "subsections": []}]}, {"section_title": "Retirement Earnings Test", "paragraphs": ["The decision to claim Social Security benefits before the FRA results in a permanent reduction in monthly benefits for early retirement. In addition, if a Social Security beneficiary is below the FRA and has current earnings, he or she is subject to the retirement earnings test (RET). Stated generally, Social Security benefits are withheld partially or fully, for one or more months, if current earnings exceed specified thresholds.", "There are two separate earnings thresholds (or exempt amounts ) under the RET. The first (lower) threshold applies to beneficiaries who are below the FRA and w ill not attain the FRA during the year. In 2019, the lower earnings threshold is $17,640. If a beneficiary has earnings that exceed the lower threshold, SSA withholds $1 of benefits for every $2 of earnings above the threshold.", "The second (higher) threshold applies to beneficiaries who are below the FRA and will attain the FRA during the year. In 2019, the higher earnings threshold is $46,920. If a beneficiary has earnings that exceed the higher threshold, SSA withholds $1 of benefits for every $3 of earnings above the threshold. The RET no longer applies beginning with the month the beneficiary attains the FRA. In other words, once the beneficiary attains the FRA, his or her benefits are no longer subject to withholding based on earnings.", "During the first year of benefit receipt, a special monthly earnings test applies. Regardless of the amount of annual earnings in the first year of benefit receipt, benefits are not withheld for any month in which earnings do not exceed a monthly exempt amount (the monthly exempt amount is equal to 1/12 of the annual exempt amount). In 2019, the monthly exempt amounts are $1,470 ($17,640/12) and $3,910 ($46,920/12).", "For example, consider a worker who claims benefits at age 62 in January 2019 and has no earnings during the year except for a consulting project that pays $20,000 in July. Although the beneficiary's annual earnings ($20,000) exceed the annual exempt amount ($17,640), benefits are withheld only for the month of July. The beneficiary has $0 earnings in all other months; July is the only month in which earnings exceed the monthly exempt amount ($1,470). ", "Benefits withheld under the RET are not \"lost\" on a permanent basis. When a beneficiary attains the FRA and is no longer subject to the RET, SSA automatically recalculates the benefit, taking into account any months for which benefits were partially or fully withheld under the RET. Stated generally, there is no actuarial reduction for early retirement for any month in which benefits were partially or fully withheld under the RET. The recalculation results in a higher monthly benefit going forward. Starting at the FRA, the beneficiary begins to recoup the value of benefits withheld under the RET; the beneficiary recoups the full value of those benefits if he or she lives to average life expectancy. "], "subsections": []}, {"section_title": "Age Distribution of New Retired-Worker Beneficiaries", "paragraphs": ["Statistics published by SSA show that a majority of retired-worker beneficiaries claim benefits before the FRA. Figure 2 shows the age distribution of new retired-worker beneficiaries in 2017. Among nearly 2.5 million new retired-worker beneficiaries that year, 37% claimed benefits at age 62 (the first year of eligibility) and 64% were under the age of 66. About one-fourth (23%) of new retired-worker beneficiaries claimed benefits at age 66, while 12% were age 67 or older. The percentage of retired-worker beneficiaries who claim benefits at earlier ages has declined in recent years. In 2010, for example, more than one-half (52%) of new retired-worker beneficiaries were age 62 and 81% were under the age of 66."], "subsections": []}, {"section_title": "Proposals to Increase the Retirement Age", "paragraphs": ["The Social Security full retirement age was 65 when the program was established in the 1930s. It remained 65 until 1983, when Congress included an increase in the FRA among many provisions in the Social Security Amendments of 1983, which were designed to address serious near-term and long-range financing problems. The 1983 Amendments became law on April 20, 1983 . Without legislative action, it was anticipated that Social Security benefits could not be paid on time beginning in July 1983 . The 1983 provision that increased the FRA from 65 to 67 continues to be phased in; it will be fully phased in by 2022. ", "The Social Security system once again faces projected long-range funding shortfalls. The Social Security Board of Trustees (the Trustees) projects that full Social Security benefits can be paid on time until 2034 with a combination of annual Social Security tax revenues and asset reserves held by the Social Security trust funds. After the projected depletion of trust fund reserves in 2034, however, annual tax revenues are projected to cover about three-fourths of benefits scheduled under current law.", "Over the years, many proposals have been designed to improve Social Security's financial outlook as well as achieve other policy goals. A common proposal is to increase the early eligibility age or further increase the full retirement age. As in the past, lawmakers who support increasing the retirement age point to gains in average life expectancy as an indicator that people can work until older ages. Those who oppose this type of policy change, however, point out that gains in life expectancy have not been shared equally across different segments of the population. They cite research showing that life expectancy is lower for individuals with lower socioeconomic status (SES) compared to those with higher SES, and that the gap in life expectancy by SES has been growing over time.", "Differential gains in life expectancy are important in the context of Social Security. The actuarial adjustments to benefits for early or delayed retirement (i.e., for claiming benefits before or after the FRA) are based on average life expectancy. That is, the actuarial adjustments are designed to provide a person with roughly the same total lifetime benefits, regardless of the age at which he or she claims benefits, assuming the person lives to average life expectancy. Research has shown that differential gains in life expectancy have resulted in a widening gap in the value of lifetime Social Security retirement benefits between low earners and high earners.", "Over the years, deficit reduction commissions and other policymakers have recommended an increase in the Social Security retirement age. The recent proposals, for example, included the S.O.S. Act of 2016 ( H.R. 5747 , the 114 th Congress), which proposed increasing the FRA among other changes. Under the proposal, after the FRA reaches 67 for those attaining 62 in 2022, the FRA would increase by two months per year until the FRA reaches 69 for those attaining 62 in 2034. Thereafter, the FRA would increase one month every year. SSA's Office of the Chief Actuary (OCACT) projects that this option would improve the Social Security trust fund outlook by eliminating 39% of the system's projected long-range funding shortfall (based on the 2018 Annual Report of the Social Security Board of Trustees, intermediate assumptions).", "Another recent proposal from the Bipartisan Policy Center in 2016 recommended, among other changes, to increase the FRA by one month every two years after the FRA reaches 67 for those attaining age 62 in 2022 until the FRA reaches 69, and also increase the age up to which the DRC may be earned at the same rate (from 70 to 72). This option contains no change in the EEA. OCACT estimates that this option would improve the Social Security trust fund outlook by eliminating 19% of the system's projected long-range funding shortfall (based on the 2018 Annual Report of the Social Security Board of Trustees, intermediate assumptions).", "In 2010, the National Commission on Fiscal Responsibility and Reform (also called the Simpson-Bowles Commission after co-chairs Alan Simpson and Erskine Bowles) recommended increasing both the EEA and the FRA, among other Social Security changes. Under the commission's recommendations, after the FRA reaches 67 in 2027, both the EEA and the FRA would be indexed to increases in life expectancy. The commission estimated that the FRA would reach 68 by about 2050, and 69 by about 2075. The EEA would increase to 63 and 64 in step with increases in the FRA. OCACT estimates that this option would improve the Social Security trust fund outlook by eliminating 15% of the system's projected long-range funding shortfall.", "In conjunction with proposed increases in the EEA and FRA, the commission recommended policies that would provide people with more flexibility in claiming benefits. Specifically, the commission recommended allowing people to claim up to half of their benefits at age 62 (with an actuarial reduction) and the other half at a later age (with a smaller actuarial reduction). This option was intended to provide a smoother transition for those interested in phased retirement or for households where one member has retired and another continues to work. In general, it could provide a stream of income for those with financial difficulties by allowing them to claim a portion of their benefits early and avoid taking a permanent reduction on the full benefit amount.", "Recognizing that some workers may be physically unable to work beyond the current EEA (62) and may not qualify for Social Security disability benefits, the commission also recommended a hardship exemption for up to 20% of retirees. Under the proposal, as the EEA and FRA increase, certain beneficiaries could continue to claim benefits at age 62 and their benefits would not be subject to additional actuarial reductions. The commission specified that SSA would design the policy taking into consideration factors such as the physical demands of labor and lifetime earnings in developing eligibility criteria. Concerns regarding the effects of increasing the retirement age, especially on certain segments of the population, are not new. The Social Security Amendments of 1983, which increased the retirement age gradually from 65 to 67, mandated a study to examine the effects of increasing the retirement age on workers in physically demanding jobs or ill health. "], "subsections": []}]}}
{"id": "R43738", "title": "Fire Management Assistance Grants: Frequently Asked Questions", "released_date": "2019-02-14T00:00:00", "summary": ["Section 420 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (P.L. 93-288, hereinafter the Stafford Act) authorizes the President to \"declare\" a Fire Management Assistance Grant (FMAG). In the interest of saving time, the authority to make the declaration has been delegated to the Federal Emergency Management Agency's (FEMA's) Regional Administrators. Once issued, the FMAG declaration authorizes various forms of federal fire suppression assistance such as the provision of equipment, personnel, and grants to state, local, and tribal governments for the control, management, and mitigation of any fire on certain public or private forest land or grassland that might become a major disaster. This federal assistance requires a cost-sharing component such that state, local, and tribal governments are responsible for 25% of the expenses.", "This report answers frequently asked questions about FMAGs. This report will be updated as events warrant."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Section 420 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( P.L. 93-288 , hereinafter the Stafford Act) authorizes the President to \"declare\" a Fire Management Assistance Grant (FMAG). The current FMAG system was established by regulation in October of 2001. These grants provide federal assistance for fire suppression activities. This authority has been delegated to the Federal Emergency Management Agency's (FEMA's) Regional Administrators. Once issued, the FMAG declaration authorizes various forms of federal assistance such as the provision of equipment, personnel, and grants to state, local, and tribal governments for the control, management, and mitigation of any fire on certain public or private forest land or grassland that might become a major disaster. This federal assistance requires a cost-sharing component such that state, local, and tribal governments are responsible for 25% of the expenses.", "This report discusses the most frequently asked questions received by the Congressional Research Service on FMAGs. It addresses questions regarding how FMAGs are requested, how requests are evaluated using thresholds, and the types of assistance provided under an FMAG declaration."], "subsections": []}, {"section_title": "Declaration Process", "paragraphs": [], "subsections": [{"section_title": "How are FMAGs Requested?", "paragraphs": ["FMAGs can be requested by a state when the governor determines that a fire is burning out of control and threatens to become a major disaster. At that point, a request for assistance can be submitted to FEMA. Typically, requests are submitted to the FEMA Regional Administrator. Requests can be submitted any time\u2014day or night\u2014and can be submitted by telephone to expedite the process. Telephone requests must be followed by written confirmation within 14 days of the phone request."], "subsections": []}, {"section_title": "Can a Tribal Leader Request an FMAG Declaration?", "paragraphs": ["Under the Sandy Recovery Improvement Act of 2013 (SRIA, Division B of P.L. 113-2 ), tribes are equivalent to states in their ability to request a major disaster declaration, an emergency declaration, or a request for an FMAG declaration.", "Note that some tribal land holdings are administered by the federal government and, therefore, receive fire suppression support through the National Interagency Fire Center (NIFC). The NIFC supports interagency \"wildland\" firefighting efforts on federal lands by the U.S. Forest Service, National Weather Service, National Park Service, Bureau of Indian Affairs (BIA), U.S. Fish and Wildlife Service and FEMA's U.S. Fire Administration. Unlike FMAGs, such support generally does not require tribes to reimburse firefighting costs (FMAGs require the state to pay a 25% cost-share). In addition, tribes with their own fire suppression resources may receive reimbursement from BIA for their costs related to fire suppression on tribal lands."], "subsections": []}, {"section_title": "What Information Needs to Be Included in the FMAG Request?", "paragraphs": ["The FMAG request should include cost estimates to support the request as well as information about the fire including the size of the fire(s) in acres or square miles, the population of the community (or communities) threatened, the number of persons evacuated (if applicable), weather conditions, and the degree to which state and local resources are committed to this fire and other fires in federal, state, and/or local jurisdictions. The verbal request must be followed up with a completed \"Request for Fire Management Assistance Declaration\" (FEMA form 078-0-1) and the \"Principal Advisor's Report\" (FEMA form 078-0-2)."], "subsections": []}, {"section_title": "How Is FMAG Assistance Determined?", "paragraphs": ["The following criteria are used to evaluate wildfires and make a determination whether to issue an FMAG:", "the threat to lives and property including critical facilities, infrastructures, and watershed areas; the availability of state and local fire resources; high fire danger conditions based on nationally accepted indices such as the National Fire Danger Ratings System; and the potential economic impacts of the fire.", "In addition, FEMA has developed fire cost thresholds that are typically updated on an annual basis. There are two types of fire cost thresholds used to help determine if a state or tribal nation is eligible for fire assistance: (1) individual thresholds for a single fire, and (2) cumulative thresholds for multiple fires. Cumulative thresholds are applied to multiple fires burning simultaneously, or the accumulation of multiple fires in a single fire season. Threshold amounts vary by state (see Table 1 ). Taking Pennsylvania as an example, generally, a single fire would need to meet or exceed $927,274 in damages for Pennsylvania to be eligible for an FMAG declaration. ", "In contrast, the formula for the cumulative fire threshold for a given state is one of two amounts\u2014$500,000 or the amount of that state's individual fire threshold multiplied by three, whichever is greater. Returning to the Pennsylvania example, the sum of three individual fire thresholds equals $2,781,822. Since that amount is larger than $500,000, cumulative fire damages in Pennsylvania must meet or exceed $2,781,822 to be eligible for assistance. In contrast, the individual fire threshold for Alaska is $100,000, but the cumulative threshold is $500,000, not the sum of three individual fire thresholds ($300,000)."], "subsections": []}, {"section_title": "Can Denials for FMAG Assistance Be Appealed?", "paragraphs": ["If FEMA denies the request for assistance, the state has one opportunity to appeal the denial. The appeal must be submitted in writing to the Regional Administrator no later than 30 days from the date of the denial letter. The appeal should contain any additional information that strengthens the original request for assistance. The Regional Administrator will review the appeal, prepare a recommendation, and forward the appeal package to the FEMA Headquarters Office. The FEMA Headquarters Office will notify the state of its determination in writing within 90 days of receipt of the appeal (or receipt of additional requested information).", "The state may request a time extension to submit the appeal. The request for an extension must be submitted in writing to the Regional Administrator no later than 30 days from the date of the denial letter. The request for an extension must include a justification for the need for an extension. The FEMA Headquarters Office will notify the state in writing whether the extension request is granted or denied."], "subsections": []}, {"section_title": "Does an FMAG Exclude the Possibility of an Emergency or Major Disaster Declaration Under the Stafford Act?", "paragraphs": ["No, an emergency or major disaster can be declared after an FMAG declaration has been issued. However, the emergency or major disaster declaration must be initiated by a separate request for assistance by the state or tribal government. "], "subsections": []}]}, {"section_title": "Funding", "paragraphs": [], "subsections": [{"section_title": "How Are FMAGs Funded?", "paragraphs": ["FMAGs are funded through FEMA's Disaster Relief Fund (DRF), the main account FEMA uses to provide disaster assistance. The DRF is a no-year account\u2014unused funds from the previous fiscal year are carried over to the next fiscal year. ", "Funds in the DRF fall into two categories. The first category is for disaster relief costs associated with major disasters under the Stafford Act. This category reflects the impact of the Budget Control Act ( P.L. 112-25 , BCA), which allows appropriations to cover the costs incurred as a result of major disasters to be paid through an \"allowable adjustment\" to the discretionary spending limits. The second category is colloquially known as \"base funding.\" Base funding includes activities not tied to major disasters under the Stafford Act. Base funding is scored as discretionary spending that counts against the discretionary spending limits, whereas FMAGs are funded through the DRF's base funding category. "], "subsections": []}, {"section_title": "Can FMAGs Still Be Issued If the DRF Balance Is Low?", "paragraphs": ["The decision to issue a FMAG declaration is not contingent on the DRF balance. Similarly, FMAGs do not reduce the amount of funding available for major disasters. When the DRF balance was low in the past, FEMA used its \"immediate needs funding\" (INF) policy until supplemental appropriations were passed to replenish the DRF. Under INF, long-term projects (such as mitigation work) are put on hold and only activities deemed urgent are funded. FMAGs would most likely fall into the category of events with an \"urgent\" need. Under the INF policy, FEMA also delays interagency reimbursements, and recovers funds from previous years in order to stretch its available funds. "], "subsections": []}, {"section_title": "What Are the Cost-Share Requirements for FMAGs?", "paragraphs": ["As with many other Stafford Act disaster assistance grant programs (Public Assistance, Hazard Mitigation Grant assistance, Other Needs Assistance) the cost-share for FMAGs is based on a federal share of 75% of eligible expenses. The grantee (the state) and subgrantees (local communities) assume the remaining 25% of eligible costs. "], "subsections": []}, {"section_title": "Does FEMA Advance Funds to States or Reimburse States for Completed Work?", "paragraphs": ["Under the FMAG process, FEMA reimburses grantees for eligible activities they have undertaken. The state application for specific grant funds must be submitted within 90 days after the FMAG is granted. That time frame permits the state to gather all information and supporting data on potentially eligible spending to include in their grant application package. The package must also stipulate that the fire cost threshold was met. Following submission of the grant application FEMA has 45 days to approve or deny the application."], "subsections": []}]}, {"section_title": "FMAG Assistance", "paragraphs": [], "subsections": [{"section_title": "What Types of Assistance Are Provided Under an FMAG Declaration?", "paragraphs": ["FMAG assistance is similar in some basic respects to other FEMA assistance. For example, FMAGs will not replicate or displace the work of other federal agencies, nor will FEMA pay straight-time salaries for public safety forces, though it will reimburse overtime expenses for the event. Other eligible expenses can include costs for", "equipment and supplies (less insurance proceeds); mobilization and demobilization; emergency work (evacuations and sheltering, police barricading and traffic control, arson investigation); prepositioning federal, out-of-state, and international resources for up to 21 days when approved by the FEMA Regional Administrator; personal comfort and safety items for firefighter health and safety; field camps and meals in lieu of per diem; and/or the mitigation, management, and control of declared fires burning on comingled federal land, when such costs are not reimbursable by another federal agency."], "subsections": []}, {"section_title": "Is Mitigation Funding Included in an FMAG Declaration?", "paragraphs": ["Until recently, only major disaster declarations made statewide hazard mitigation grants available. Division D of P.L. 115-254 (Disaster Recovery Reform Act, hereinafter DRRA) amended the Stafford Act to make hazard mitigation available for FMAG declarations as well. Under Section 404 of the Stafford Act as amended by DRRA, mitigation grants from the Hazard Mitigation Grant Program (HMGP) are provided to states and tribes on a sliding scale based on the percentage of funds spent for FMAG assistance. For states and federally recognized tribes with a FEMA-approved Standard State or Tribal Mitigation Plan, the formula provides for up to 15% of the first $2 billion of estimated aggregate amounts of disaster assistance, up to 10% for amounts between $2 billion and $10 billion, and 7.5% for amounts between $10 billion and $35.333 billion."], "subsections": []}]}, {"section_title": "Interaction with Other Federal Agencies", "paragraphs": [], "subsections": [{"section_title": "How Are FMAGs Different from Other Types of Federal Fire Assistance?", "paragraphs": ["FEMA assistance through FMAGs is a direct relationship with the states to assist the state in fighting the fire on state lands. FMAGs are employed so a disaster declaration may not be necessary. The Forest Service and other federal agencies do provide other types of assistance related to wildfire management, such as postfire recovery assistance, or assistance planning and mitigating the potential risk from future wildfires. Most of these programs provide financial and technical assistance to state partners. In addition, other USDA agencies administer various other programs to provide disaster recovery assistance to nonfederal forest landowners, including the Emergency Forest Restoration Program and the Emergency Watershed Program. "], "subsections": []}, {"section_title": "Can FMAG Assistance Be Provided in Conjunction with Assistance from the Forest Service, or Is It Considered a Duplication of Benefits?", "paragraphs": ["This depends on the type of assistance being provided by the Forest Service. FMAG assistance is not generally available in conjunction with emergency suppression assistance from the Forest Service, or any other federal agency engaged in suppression operations. FMAGs provide assistance for suppression operations on nonfederal lands, whereas suppression operations on federal lands are the responsibility of the federal agency with jurisdiction. Limited exceptions may occur for declared fires on lands in which the ownership is comingled federal and nonfederal, and the costs incurred by the eligible entity are not entitled to any other type of federal reimbursement. However, FMAGs may be provided in conjunction with other Forest Service assistance programs, such as any technical and financial assistance provided through the agency's state and volunteer fire assistance programs or state and private forestry office.", "FMAG and other federal assistance may potentially occur in conjunction when there is a cooperative agreement between federal, state, and other governmental or tribal partners to coordinate emergency wildfire protection and response activities. The cooperative agreement often delineates different geographic areas where the state government is responsible for initial suppression operations, regardless of land ownership, and vice versa, where the federal government may be responsible for providing suppression operations in lands under nonfederal ownership. The cooperative agreements (sometimes referred to as \"fire compacts\") specify how costs are to be apportioned among the partners, including provisions allowing for reimbursement, in accordance with applicable federal and state statutes. In the circumstance where a state (or other eligible entity) conducted suppression operations on federal land and the costs were not reimbursable, an FMAG may potentially be applied for and used to cover eligible costs."], "subsections": []}, {"section_title": "Do FMAGs Assist with Fires on Federal Lands?", "paragraphs": ["No, most fires that begin on federal land are the responsibility of the federal agency that owns or manages the land, and are not eligible to receive FMAG assistance. There are some exceptions, however. For example, FMAGs may be available to assist with declared fires that occur in areas with a mix of federal and nonfederal land, if the state has a responsibility for suppression activities under a cooperative agreement with the applicable federal agency, and those costs are not reimbursable under another federal statute."], "subsections": []}]}]}}
{"id": "R41153", "title": "Changes in the Arctic: Background and Issues for Congress", "released_date": "2019-03-04T00:00:00", "summary": ["The diminishment of Arctic sea ice has led to increased human activities in the Arctic, and has heightened interest in, and concerns about, the region's future. The United States, by virtue of Alaska, is an Arctic country and has substantial interests in the region.", "Record low extents of Arctic sea ice over the past decade have focused scientific and policy attention on links to global climate change and projected ice-free seasons in the Arctic within decades. These changes have potential consequences for weather in the United States, access to mineral and biological resources in the Arctic, the economies and cultures of peoples in the region, and national security.", "The five Arctic coastal states\u2014the United States, Canada, Russia, Norway, and Denmark (of which Greenland is a territory)\u2014have made or are in the process of preparing submissions to the Commission on the Limits of the Continental Shelf regarding the outer limits of their extended continental shelves. The Russian submission includes the underwater Lomonosov Ridge, a feature that spans a considerable distance across the center of the Arctic Ocean.", "The diminishment of Arctic ice could lead in coming years to increased commercial shipping on two trans-Arctic sea routes\u2014the Northern Sea Route close to Russia, and the Northwest Passage\u2014though the rate of increase in the use of these routes might not be as great as sometimes anticipated in press accounts. International guidelines for ships operating in Arctic waters have been recently updated.", "Changes to the Arctic brought about by warming temperatures will likely allow more exploration for oil, gas, and minerals. Warming that causes permafrost to melt could pose challenges to onshore exploration activities. Increased oil and gas exploration and tourism (cruise ships) in the Arctic increase the risk of pollution in the region. Cleaning up oil spills in ice-covered waters will be more difficult than in other areas, primarily because effective strategies for cleaning up oil spills in ice-covered waters have yet to be developed.", "Large commercial fisheries exist in the Arctic. The United States is currently meeting with other countries regarding the management of Arctic fish stocks. Changes in the Arctic could affect threatened and endangered species, and could result in migration of fish stocks to new waters. Under the Endangered Species Act, the polar bear was listed as threatened on May 15, 2008. Arctic climate change is also expected to affect the economies, health, and cultures of Arctic indigenous peoples.", "Two of the Coast Guard's three polar icebreakers\u2014Polar Star and Polar Sea\u2014have exceeded their intended 30-year service lives, and Polar Sea is not operational. The Coast Guard has initiated a project to build up to three new heavy polar icebreakers. On May 12, 2011, representatives from the member states of the Arctic Council signed an agreement on cooperation on search and rescue in the Arctic.", "Although there is significant international cooperation on Arctic issues, the Arctic is increasingly being viewed by some observers as a potential emerging security issue. Some of the Arctic coastal states, particularly Russia, have announced an intention or taken actions to enhance their military presences in the high north. U.S. military forces, particularly the Navy and Coast Guard, have begun to pay more attention to the region in their planning and operations."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The diminishment of Arctic sea ice has led to increased human activities in the Arctic, and has heightened interest in, and concerns about, the region's future. Issues such as Arctic territorial disputes; commercial shipping through the Arctic; Arctic oil, gas, and mineral exploration; endangered Arctic species; and increased military operations in the Arctic could cause the region in coming years to become an arena of international cooperation or competition.", "The United States, by virtue of Alaska, is an Arctic country and has substantial political, economic, energy, environmental, and other interests in the region. Decisions that Congress makes on Arctic-related issues could significantly affect these interests.", "This report provides an overview of Arctic-related issues for Congress, and refers readers to more in-depth CRS reports on specific Arctic-related issues. Congressional readers with questions about an issue discussed in this report should contact the author or authors of the section discussing that issue. The authors are identified by footnote at the start of each section.", "This report does not track legislation on specific Arctic-related issues. For tracking of legislative activity, see the CRS reports relating to specific Arctic-related issues that are listed at the end of this report, just prior to Appendix A ."], "subsections": []}, {"section_title": "Background1", "paragraphs": [], "subsections": [{"section_title": "Definitions of the Arctic", "paragraphs": ["There are multiple definitions of the Arctic that result in differing descriptions of the land and sea areas encompassed by the term. Policy discussions of the Arctic can employ varying definitions of the region, and readers should bear in mind that the definition used in one discussion may differ from that used in another. This CRS report does not rely on any one definition."], "subsections": [{"section_title": "Arctic Circle Definition and Resulting Arctic Countries", "paragraphs": ["The most common and basic definition of the Arctic defines the region as the land and sea area north of the Arctic Circle (a circle of latitude at about 66.34 o North). For surface locations within this zone, the sun is generally above the horizon for 24 continuous hours at least once per year (at the summer solstice) and below the horizon for 24 continuous hours at least once per year (at the winter solstice).", "The Arctic Circle definition includes the northernmost third or so of Alaska, as well as the Chukchi Sea, which separates that part of Alaska from Russia, and U.S. territorial and Exclusive Economic Zone (EEZ) waters north of Alaska. It does not include the lower two-thirds or so of Alaska or the Bering Sea, which separates that lower part of the state from Russia.", "The area within the Arctic Circle is about 14.5 million square kilometers, or about 5.6 million square miles. This equates to about 2.8%, or about 1/36 th , of the world's surface. About 4 million people, or about 0.05% of the world's population, live in the Arctic, of which roughly half (roughly 2 million) live in Russia's part of the Arctic.", "Eight countries have territory north of the Arctic Circle: the United States (Alaska), Canada, Russia, Norway, Denmark (by virtue of Greenland, a member country of the Kingdom of Denmark), Finland, Sweden, and Iceland. These eight countries are often referred to as the Arctic countries, and they are the member states of the Arctic Council, which is discussed further below. A subset of the eight Arctic countries are the five countries that are considered Arctic coastal states: the United States, Canada, Russia, Norway, and Denmark (by virtue of Greenland)."], "subsections": []}, {"section_title": "Definition in Arctic Research and Policy Act (ARPA) of 1984", "paragraphs": ["Section 112 of the Arctic Research and Policy Act (ARPA) of 1984 (Title I of P.L. 98-373 of July 31, 1984) defines the Arctic as follows:", "As used in this title, the term \"Arctic\" means all United States and foreign territory north of the Arctic Circle and all United States territory north and west of the boundary formed by the Porcupine, Yukon, and Kuskokwim Rivers [in Alaska]; all contiguous seas, including the Arctic Ocean and the Beaufort, Bering, and Chukchi Seas; and the Aleutian chain.", "This definition, which is codified at 15 U.S.C. 4111, includes certain parts of Alaska below the Arctic Circle, including the Aleutian Islands and portions of central and western mainland Alaska, such as the Seward Peninsula and the Yukon Delta. Figure 1 below shows the Arctic area of Alaska as defined by ARPA; Figure 2 shows the entire Arctic area as defined by ARPA."], "subsections": []}, {"section_title": "Other Definitions", "paragraphs": ["Other definitions of the Arctic are based on factors such as average temperature, the northern tree line, the extent of permafrost on land, the extent of sea ice on the ocean, or jurisdictional or administrative boundaries. A definition based on a climate-related factor could circumscribe differing areas over time as a result of climate change.", "The 10 o C isotherm definition of the Arctic defines the region as the land and sea area in the northern hemisphere where the average temperature for the warmest month (July) is below 10 o Celsius, or 50 o Fahrenheit. This definition results in an irregularly shaped Arctic region that excludes some land and sea areas north of the Arctic Circle but includes some land and sea areas south of the Arctic Circle. This definition currently excludes all of Finland and Sweden, as well as some of Alaska above the Arctic Circle, while including virtually all of the Bering Sea and Alaska's Aleutian Islands.", "The definition of the Arctic adopted by the Arctic Monitoring and Assessment Programme (AMAP)\u2014a working group of the Arctic Council\u2014\"essentially includes the terrestrial and marine areas north of the Arctic Circle (66\u00b032' N), and north of 62\u00b0 N in Asia and 60\u00b0 N in North America, modified to include the marine areas north of the Aleutian chain, Hudson Bay, and parts of the North Atlantic, including the Labrador Sea.\" The AMAP website includes a map showing the Arctic Circle, 10o C isotherm, tree line, and AMAP definitions of the Arctic.", "Some observers use the term \"high north\" as a way of referring to the Arctic. Some observers make a distinction between the \"high Arctic\"\u2014meaning, in general, the colder portions of the Arctic that are closer to the North Pole\u2014and other areas of the Arctic that are generally less cold and further away from the North Pole, which are sometimes described as the low Arctic or the subarctic."], "subsections": []}]}, {"section_title": "U.S. Identity as an Arctic Nation", "paragraphs": ["As mentioned earlier, the United States, by virtue of Alaska, is an Arctic country and has substantial political, economic, energy, environmental, and other interests in the region. Even so, Alaska is geographically separated and somewhat distant from the other 49 states, and relatively few Americans\u2014fewer than 68,000 as of July 1, 2017\u2014live in the Arctic part of Alaska as shown in Figure 2 . A November 8, 2018, research paper on the Arctic in U.S. national identity, based on data collected in online surveys conducted in October and December 2017, stated the following:", "We found that Americans on average continue mildly to disagree with the canonical assertion of U.S. Arctic identity and interests as articulated in government policy. On a scale from 1 to 7, with higher numbers indicating stronger agreement, Americans' average rating was 3.51, up slightly from 3.16 in 2015, but still below the scale midpoint [of 4.0]. A plurality of respondents (27%) answered with a score of one, indicating the strongest disagreement. Men and older individuals showed greater inclination to agree with the assertion of Arctic identity and interests than women or younger respondents, a pattern also observed in 2015. No region of the country showed particularly greater inclination to agree or disagree, except Alaskans[, who] showed substantially greater agreement.", "We also conducted a series of comparative surveys and found that Canadians, with an average rating of 4.87, had a much greater sense of being an Arctic nation than did Americans. American respondents, however, did register somewhat higher agreement than British and Australians in judging their country an Arctic nation with strong Arctic interests. In a separate comparative survey, Americans indicated a stronger sense of being a Pacific nation than an Arctic one."], "subsections": []}, {"section_title": "U.S. Arctic Research", "paragraphs": [], "subsections": [{"section_title": "Arctic Research and Policy Act (ARPA) of 1984, As Amended", "paragraphs": ["The Arctic Research and Policy Act (ARPA) of 1984 (Title I of P.L. 98-373 of July 31, 1984) \"provide[s] for a comprehensive national policy dealing with national research needs and objectives in the Arctic.\" The act, among other things", "made a series of findings concerning the importance of the Arctic and Arctic research; established the U.S. Arctic Research Commission (USARC) to promote Arctic research and recommend Arctic research policy; designated the National Science Foundation (NSF) as the lead federal agency for implementing Arctic research policy; established the Interagency Arctic Research Policy Committee (IARPC) to develop a national Arctic research policy and a five-year plan to implement that policy, and designated the NSF representative on the IARPC as its chairperson; and defined the term \"Arctic\" for purposes of the act.", "The Arctic Research and Policy Act of 1984 was amended by P.L. 101-609 of November 16, 1990. For the texts of the Arctic Research and Policy Act of 1984 and P.L. 101-609 , see Appendix A and Appendix B , respectively."], "subsections": []}, {"section_title": "FY2019 NSF Budget Request for Arctic Research", "paragraphs": ["NSF\u2014the lead federal agency for implementing Arctic research policy\u2014carries out Arctic research activities through its Office of Polar Programs (OPP), which operates as part of the Directorate for Geosciences (GEO). NSF is requesting a total of $534.5 million for OPP for FY2019, an increase of 30.6% over the $409.18 million requested for FY2018, and an increase of 14.3% over the $467.85 million actual for FY2017. Within the $534.54 million requested for OPP for FY2019 is $113.56 million for research in both the Arctic and Antarctic, an increase of 2.7% over the $110.58 million requested for FY2018, and a reduction of 4.6% from the $119.05 million actual for FY2017. Also within the $534.54 million requested for OPP for FY2019 is $39.33 million for Arctic research and support logistics, an increase of 8.9% over the $36.11 million requested for FY2018, and a reduction of 12.7% from the $45.06 actual for FY2017.", "NSF states in the overview of its FY2019 budget request that", "In 2019, NSF will support 10 Big Ideas, which are bold ideas that identify areas for future, long-term investment at the frontiers of science and engineering. With its broad portfolio of investments, NSF is uniquely suited to advance this set of cutting-edge research agendas and processes that will require collaborations with industry, private foundations, other agencies, science academies and societies, and universities and other education institutions. The Big Ideas represent unique opportunities to position our Nation at the frontiers\u2014indeed to define the frontiers\u2014of global science and engineering leadership and to invest in fundamental research that advances America's economic competitiveness and security.", "Among the 10 big ideas, NSF states in its overview that number 6 is", "Navigating the New Arctic (NNA) \u2014Establishing an observing network of mobile and fixed platforms and tools across the Arctic to document and understand the Arctic's rapid biological, physical, chemical, and social changes.", "For FY2019, NSF is requesting $30.0 million for NNA under Integrative & Collaborative Education and Research (ICER) effort of GEO. NSF states that", "a number of GEO programs contribute directly to NSF's overarching theme of Navigating the New Arctic (NNA).... As part of NNA, and in partnership with the other research directorates and offices, GEO will invest funds in its ICER division to support convergent activities that transcend the traditional disciplinary boundaries of individual NSF directorates and offices. These activities will enable pursuit of fundamental research in Arctic regions. While budget management and reporting for this investment will be the responsibility of GEO, the convergent activities will be overseen and managed collaboratively by the multi-directorate/office NNA leadership team.", "Regarding its FY2019 budget request for OPP, NSF states that", "The Office of Polar Programs (OPP) is the primary U.S. supporter of fundamental research in the polar regions. In the Arctic, NSF helps coordinate research planning as directed by the Arctic Research Policy Act of 1984, and the NSF Director chairs the Interagency Arctic Research Policy Committee (IARPC) created for this purpose....", "OPP supports investments in research and education and provides support for research infrastructure, such as permanent stations and temporary field camps in the Antarctic and the Arctic. OPP's FY 2019 Budget Request is influenced by three key priorities: (1)\u00a0supporting critical facilities that enable frontier research in the Earth's polar regions; (2) maintaining strong disciplinary programs that provide a base for our investments in cross-disciplinary system science programs and; (3) maintaining U.S. research community activities in polar system science. As part of priority one, OPP will start the construction phase of the multi-year Antarctic Infrastructure Modernization for Science (AIMS) project. OPP will also prioritize investment in two of the Big Ideas: Navigating the New Arctic where OPP leads NSF efforts, and Windows on the Universe where OPP invests in underpinning activities. All of these priorities reflect opportunities for fundamental scientific discovery uniquely possible in polar regions, as well as studies to investigate the causes and future trajectory of environmental and ecosystem changes now being observed at the poles that could impact global systems. This work will implement the Foundation's lead-agency role in facilitating the Nation's investment in polar science.", "In addition to shared cross-directorate basic research objectives, OPP investments will be guided by recent sponsored studies to identify priority areas and ensure effective polar research programs:", "\u2022 For the Arctic, IARPC's Arctic Research Plan: FY 2017-20211 , and the World Meteorological Organization's Year of Polar Prediction Implementation Plan inform science investment priorities. Efforts to build an integrated research capacity to address the potential opportunities and challenges of Arctic change for the Nation's security and economics and well-being of Arctic residents will continue.", "Regarding the $39.33 million requested for FY2019 for Arctic Research Support and Logistics within OPP, NSF states the following:", "The Research Support and Logistics program in the Arctic Sciences section of OPP responds to science supported by the section. Funding is provided directly to grantees or to key organizations that provide or manage Arctic research support and logistics. A contractor provides research support and logistics services for NSF-sponsored activities in the Arctic. Additional major support components include: access to USCG and other icebreakers, University-National Oceanographic Laboratory (UNOLS) vessels and coastal boats; access to fixed- and rotary-wing airlift support; assets at Toolik Field Station, University of Alaska Fairbanks' field station for ecological research on Alaska's North Slope; safety training for field researchers and funding for field safety experts; global satellite telephones for emergency response and improved logistics coordination; and development of a network of strategically placed U.S. observatories linked to similar efforts in Europe and Canada....", "Arctic Sciences personnel support merit-reviewed research proposals in social, earth systems, and a broad range of natural sciences; its Research Support & Logistics program responds to research by assisting researchers with access to the Arctic and sharing of plans and results with local Arctic communities."], "subsections": []}]}, {"section_title": "Major U.S. Policy Documents Relating to the Arctic", "paragraphs": [], "subsections": [{"section_title": "January 2009 Arctic Policy Directive (NSPD 66/HSPD 25)", "paragraphs": ["On January 12, 2009, the George W. Bush Administration released a presidential directive establishing a new U.S. policy for the Arctic region. The directive, dated January 9, 2009, was issued as National Security Presidential Directive 66/Homeland Security Presidential Directive 25 (NSPD 66/HSPD 25). The directive was the result of an interagency review, and it superseded for the Arctic (but not the Antarctic) a 1994 presidential directive on Arctic and Antarctic policy. The directive, among other things,", "states that the United States is an Arctic nation, with varied and compelling interests in the region; sets forth a six-element overall U.S. policy for the region; describes U.S. national security and homeland security interests in the Arctic; and discusses a number of issues as they relate to the Arctic, including international governance; the extended continental shelf and boundary issues; promotion of international scientific cooperation; maritime transportation; economic issues, including energy; and environmental protection and conservation of natural resources.", "For the text of NSPD 66/HSPD 25, see Appendix C ."], "subsections": []}, {"section_title": "May 2010 National Security Strategy", "paragraphs": ["In May 2010, the Obama Administration released a national security strategy document that states the following:", "The United States is an Arctic Nation with broad and fundamental interests in the Arctic region, where we seek to meet our national security needs, protect the environment, responsibly manage resources, account for indigenous communities, support scientific research, and strengthen international cooperation on a wide range of issues."], "subsections": []}, {"section_title": "May 2013 National Strategy for Arctic Region", "paragraphs": ["On May 10, 2013, the Obama Administration released a document entitled National Strategy for the Arctic Region . The document appears to supplement rather than supersede the January 2009 Arctic policy directive (NSPD 66/HSPD 25) discussed above. The executive summary of National Strategy for the Arctic Region begins by quoting the above statement from the May 2010 national security strategy document, and then states the following:", "The National Strategy for the Arctic Region sets forth the United States Government's strategic priorities for the Arctic region. This strategy is intended to position the United States to respond effectively to challenges and emerging opportunities arising from significant increases in Arctic activity due to the diminishment of sea ice and the emergence of a new Arctic environment. It defines U.S. national security interests in the Arctic region and identifies prioritized lines of effort, building upon existing initiatives by Federal, state, local, and tribal authorities, the private sector, and international partners, and aims to focus efforts where opportunities exist and action is needed. It is designed to meet the reality of a changing Arctic environment, while we simultaneously pursue our global objective of combating the climatic changes that are driving these environmental conditions. Our strategy is built on three lines of effort:", "1. Advance United States Security Interests \u2013 We will enable our vessels and aircraft to operate, consistent with international law, through, under, and over the airspace and waters of the Arctic, support lawful commerce, achieve a greater awareness of activity in the region, and intelligently evolve our Arctic infrastructure and capabilities, including ice-capable platforms as needed. U.S. security in the Arctic encompasses a broad spectrum of activities, ranging from those supporting safe commercial and scientific operations to national defense.", "2. Pursue Responsible Arctic Region Stewardship \u2013 We will continue to protect the Arctic environment and conserve its resources; establish and institutionalize an integrated Arctic management framework; chart the Arctic region; and employ scientific research and traditional knowledge to increase understanding of the Arctic.", "3. Strengthen International Cooperation \u2013 Working through bilateral relationships and multilateral bodies, including the Arctic Council, we will pursue arrangements that advance collective interests, promote shared Arctic state prosperity, protect the Arctic environment, and enhance regional security, and we will work toward U.S. accession to the United Nations Convention on the Law of the Sea (Law of the Sea Convention).", "Our approach will be informed by the following guiding principles:", "\u2022 Safeguard Peace and Stability \u2013 Seek to maintain and preserve the Arctic region as an area free of conflict, acting in concert with allies, partners, and other interested parties. Support and preserve: international legal principles of freedom of navigation and overflight and other uses of the sea and airspace related to these freedoms, unimpeded lawful commerce, and the peaceful resolution of disputes for all nations.", "\u2022 Make Decisions Using the Best Available Information \u2013 Across all lines of effort, decisions need to be based on the most current science and traditional knowledge.", "\u2022 Pursue Innovative Arrangements \u2013 Foster partnerships with the state of Alaska, Arctic states, other international partners, and the private sector to more efficiently develop, resource, and manage capabilities, where appropriate and feasible, to better advance our strategic priorities in this austere fiscal environment.", "\u2022 Consult and Coordinate with Alaska Natives \u2013 Engage in a consultation process with Alaska Natives, recognizing tribal governments' unique legal relationship with the United States and providing for meaningful and timely opportunity to inform Federal policy affecting Alaskan Native communities.", "For the main text of the document, see Appendix D ."], "subsections": []}, {"section_title": "January 2014 Implementation Plan for National Strategy for Arctic Region", "paragraphs": ["On January 30, 2014, the Obama Administration released an implementation plan for the May 2013 national strategy for the Arctic region. The plan states that it", "complements and builds upon existing initiatives by Federal, State, local, and tribal authorities, the private sector, and international partners, and focuses efforts where opportunities exist and action is most needed. The Implementation Plan reflects the reality of a changing Arctic environment and upholds national interests in safety, security, and environmental protection, and works with international partners to pursue global objectives of addressing climatic changes.", "This Implementation Plan follows the structure and objectives of the Strategy's three lines of effort and is consistent with the guiding principles. The lines of effort of the Strategy and the Implementation Plan are as follows:", "\u2022 Advance United States Security Interests", "\u2022 Pursue Responsible Arctic Region Stewardship", "\u2022 Strengthen International Cooperation", "These lines of effort and guiding principles are meant to be implemented as a coherent whole.", "The plan also states the following:", "Climate change is already affecting the entire global population, and Alaska residents are experiencing the impacts in the Arctic. To ensure a cohesive Federal approach, implementation activities must be aligned with the Executive Order on Preparing the United States for the Impacts of Climate Change while executing the Strategy. In addition to the guiding principles, the following approaches are important in implementing the activities across all of the lines of effort:", "\u2022 Foster Partnerships with Arctic Stakeholders. As outlined in the Strategy, all lines of effort must involve Arctic partners, particularly the State of Alaska and Alaska Natives in the Arctic region. Federal agencies, the State of Alaska, tribal communities, local governments, and academia will work with other nations, industry stakeholders, non-governmental organizations, and research partners to address emerging challenges and opportunities in the Arctic environment. The Federal Government should strive to maintain the free flow of communication and cooperation with the State of Alaska to support national priorities.", "\u2022 Coordinate and Integrate Activities across the Federal Government. Multiple Federal bodies currently have authority for Arctic policy (e.g., the National Ocean Council (NOC), Arctic Policy Group, and Interagency Arctic Research Policy Committee (IARPC)). The National Security Council Staff will develop an Executive Order through the interagency process to maximize efficiency, align interagency initiatives, and create unity of effort among all Federal entities conducting activities in the Arctic.", "The plan outlines about 36 specific initiatives. For each, it presents a brief statement of the objective, a list of next steps to be taken, a brief statement about measuring progress in achieving the objective, and the names of the lead and supporting federal agencies to be involved.", "On March 9, 2016, the Obama Administration released three documents discussing the implementation of the national strategy for the Arctic: (1) a report entitled 2015 Year in Review\u2014Progress Report on the Implementation of the National Strategy for the Arctic Region ; (2) an appendix to that report entitled Appendix A, Implementation Framework for the National Strategy for the Arctic Region : and (3) another appendix to that report entitled Appendix B, Interagency Arctic Research Policy Committee 5-Year Plan Collaboration Teams: 2015 Summary of Accomplishments and 2016 Priorities ."], "subsections": []}, {"section_title": "January 2015 Executive Order for Enhancing Coordination of Arctic Efforts", "paragraphs": ["On January 21, 2015, then-President Obama issued Executive Order 13689, entitled \"Enhancing Coordination of National Efforts in the Arctic.\" The order states the following in part:", "As the United States assumes the Chairmanship of the Arctic Council, it is more important than ever that we have a coordinated national effort that takes advantage of our combined expertise and efforts in the Arctic region to promote our shared values and priorities.", "As the Arctic has changed, the number of Federal working groups created to address the growing strategic importance and accessibility of this critical region has increased. Although these groups have made significant progress and achieved important milestones, managing the broad range of interagency activity in the Arctic requires coordinated planning by the Federal Government, with input by partners and stakeholders, to facilitate Federal, State, local, and Alaska Native tribal government and similar Alaska Native organization, as well as private and nonprofit sector, efforts in the Arctic....", "There is established an Arctic Executive Steering Committee (Steering Committee), which shall provide guidance to executive departments and agencies (agencies) and enhance coordination of Federal Arctic policies across agencies and offices, and, where applicable, with State, local, and Alaska Native tribal governments and similar Alaska Native organizations, academic and research institutions, and the private and nonprofit sectors....", "... the Steering Committee will meet quarterly, or as appropriate, to shape priorities, establish strategic direction, oversee implementation, and ensure coordination of Federal activities in the Arctic....", "The Steering Committee, in coordination with the heads of relevant agencies and under the direction of the Chair, shall:", "(a) provide guidance and coordinate efforts to implement the priorities, objectives, activities, and responsibilities identified in National Security Presidential Directive 66/Homeland Security Presidential Directive 25, Arctic Region Policy, the National Strategy for the Arctic Region and its Implementation Plan, and related agency plans;", "(b) provide guidance on prioritizing Federal activities, consistent with agency authorities, while the United States is Chair of the Arctic Council, including, where appropriate, recommendations for resources to use in carrying out those activities; and", "(c) establish a working group to provide a report to the Steering Committee by May 1, 2015, that:", "(i) identifies potential areas of overlap between and within agencies with respect to implementation of Arctic policy and strategic priorities and provides recommendations to increase coordination and reduce any duplication of effort, which may include ways to increase the effectiveness of existing groups; and", "(ii) provides recommendations to address any potential gaps in implementation....", "It is in the best interest of the Nation for the Federal Government to maximize transparency and promote collaboration where possible with the State of Alaska, Alaska Native tribal governments and similar Alaska Native organizations, and local, private-sector, and nonprofit-sector stakeholders. To facilitate consultation and partnerships with the State of Alaska and Alaska Native tribal governments and similar Alaska Native organizations, the Steering Committee shall:", "(a) develop a process to improve coordination and the sharing of information and knowledge among Federal, State, local, and Alaska Native tribal governments and similar Alaska Native organizations, and private-sector and nonprofit-sector groups on Arctic issues;", "(b) establish a process to ensure tribal consultation and collaboration, consistent with my memorandum of November 5, 2009 (Tribal Consultation). This process shall ensure meaningful consultation and collaboration with Alaska Native tribal governments and similar Alaska Native organizations in the development of Federal policies that have Alaska Native implications, as applicable, and provide feedback and recommendations to the Steering Committee;", "(c) identify an appropriate Federal entity to be the point of contact for Arctic matters with the State of Alaska and with Alaska Native tribal governments and similar Alaska Native organizations to support collaboration and communication; and", "(d) invite members of State, local, and Alaska Native tribal governments and similar Alaska Native organizations, and academic and research institutions to consult on issues or participate in discussions, as appropriate and consistent with applicable law.", "As stated in the above-quoted passage, Executive Order 13689, among other things, established an Arctic Executive Steering Committee (AESC) to \"provide guidance to executive departments and agencies (agencies) and enhance coordination of Federal Arctic policies across agencies and offices, and, where applicable, with State, local, and Alaska Native tribal governments and similar Alaska Native organizations, academic and research institutions, and the private and nonprofit sectors.\" Regarding the AESC, a February 28, 2019, press report states the following: \"Although the [executive] order has not been rescinded, the Trump administration has left the committee dormant for the past two years.\""], "subsections": []}]}, {"section_title": "U.S. Special Representative for the Arctic (Currently Vacant)", "paragraphs": ["On July 16, 2014, during the Obama Administration, then-Secretary of State John Kerry announced the appointment of retired Coast Guard Admiral Robert J. Papp Jr., who served as Commandant of the Coast Guard from May 2010 to May 2014, as the first U.S. Special Representative for the Arctic. Under the Obama Administration, the duties of this position involved, among other things, interacting with ambassadors to the Arctic region from other countries. Papp served as the U.S. Special Representative until January 20, 2017, the final day of the Obama Administration and the first day of the Trump Administration; the position has gone unfilled since then."], "subsections": []}, {"section_title": "Arctic Council37", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["A series of meetings initiated by Finland in 1989 led in 1996 to the creation of the Arctic Council via the Ottawa Declaration of September 19, 1996. The council is \"the leading intergovernmental forum promoting cooperation, coordination and interaction among the Arctic States, Arctic indigenous communities and other Arctic inhabitants on common Arctic issues, in particular on issues of sustainable development and environmental protection in the Arctic.\" Specific issues addressed by the council include regional development, the environment, emergency response, climate change, and natural resource extraction. The council states that its mandate, \"as articulated in the Ottawa Declaration, explicitly excludes military security.\" The council's standing Secretariat formally became operational in 2013 in Troms\u00f8, Norway."], "subsections": []}, {"section_title": "Organization and Operations", "paragraphs": [], "subsections": [{"section_title": "Eight Member States", "paragraphs": ["The Arctic Council's membership consists of the eight countries that have sovereign territory within the Arctic Circle: the United States, Canada, Russia, Iceland, Norway, Sweden, Finland, and Denmark (by virtue of its territory Greenland). The council states that \"decisions at all levels in the Arctic Council are the exclusive right and responsibility\" of these eight states."], "subsections": []}, {"section_title": "Indigenous Permanent Participants", "paragraphs": ["In addition to the eight member states, \"six organizations representing Arctic indigenous peoples have status as Permanent Participants. The category of Permanent Participant was created to provide for active participation and full consultation with the Arctic indigenous peoples within the council. They include: the Aleut International Association, the Arctic Athabaskan Council, Gwich'in Council International, the Inuit Circumpolar Council, Russian Association of Indigenous Peoples of the North and the Saami Council.\""], "subsections": []}, {"section_title": "Observers", "paragraphs": ["Thirteen states have been approved as observers to the Arctic Council: Germany, the Netherlands, Poland, and the United Kingdom (approved in 1998); France (2000); Spain (2006); China, India, Italy, Japan, Singapore, and South Korea (2013); and Switzerland (2017). In addition, 13 intergovernmental and interparliamentary organizations and 13 nongovernmental organizations have been approved as observers, making for a total of 39 observer states or organizations."], "subsections": []}, {"section_title": "Working Groups", "paragraphs": ["The Arctic Council's work is carried out primarily in six working groups that focus on Arctic contaminants; Arctic monitoring and assessment; conservation of Arctic flora and fauna; emergency prevention, preparedness and response; protection of the Arctic marine environment; and sustainable development. The council may also establish task forces or expert groups for specific projects."], "subsections": []}, {"section_title": "Chairmanships", "paragraphs": ["The council has a two-year chairmanship that rotates among the eight member states. The United States held the chairmanship from April 24, 2015, to May 11, 2017, a period which began during the Obama Administration and continued into the first 16 weeks of the Trump Administration. The United States had previously held the chairmanship from 1998 to 2000, and will next hold it in 2031-2033. During the Obama Administration's portion of the period of U.S. chairmanship, the U.S. chairmanship team was led by then-Secretary of State John Kerry. For a statement from the Obama Administration regarding U.S. goals for the Obama Administration's portion of the U.S. period of chairmanship, see Appendix E .", "On May 11, 2017, the chairmanship of the Arctic Council was transferred from the United States to Finland. A May 11, 2017, press report states the following: \"Finland's chairmanship program emphasizes climate change and ways the Paris emissions targets can mitigate it, said Timo Soini, Finland's foreign minister. 'We recognize that global warming is the main driver of change in the Arctic,' Soini said.\""], "subsections": []}, {"section_title": "Senior Arctic Officials (SAOs)", "paragraphs": ["Each member state is represented by a Senior Arctic Official (SAO), who is usually drawn from that country's foreign ministry. The SAOs hold meetings every six months. The council convenes ministerial-level meetings every two years, at the end of each chairmanship, while the working groups meet more frequently."], "subsections": []}]}, {"section_title": "Limits of Arctic Council as a Governing Body", "paragraphs": ["Regarding the limits of the Arctic Council as a governing body, the council states that it \"does not and cannot implement or enforce its guidelines, assessments or recommendations. That responsibility belongs to each individual Arctic State.\" In addition, as mentioned earlier, the council states that \"the Arctic Council's mandate, as articulated in the [1996] Ottawa Declaration [establishing the Council], explicitly excludes military security.\""], "subsections": []}]}, {"section_title": "The Arctic and the U.N. Convention on Law of the Sea (UNCLOS)49", "paragraphs": [], "subsections": [{"section_title": "Background to UNCLOS", "paragraphs": ["In November 1994, the United Nations Convention on the Law of the Sea (UNCLOS) entered into force. UNCLOS establishes a treaty regime to govern activities on, over, and under the world's oceans. It builds on four 1958 law of the sea conventions to which the United States is a party, and sets forth a framework for future activities in parts of the oceans that are beyond national jurisdiction. As of December 13, 2018, 168 nations were party to the treaty. The 1982 Convention and its 1994 Agreement relating to Implementation of Part XI of the Convention were transmitted to the Senate on October 6, 1994. In the absence of Senate advice and consent to adherence, the United States is not a party to the convention and agreement."], "subsections": []}, {"section_title": "Part VI of UNCLOS and Commission on Limits of Continental Shelf", "paragraphs": ["Part VI of the convention, dealing with the Continental Shelf, and Annex II, which established a Commission on the Limits of the Continental Shelf, are most pertinent to the Arctic as it becomes more accessible ocean space, bordered by five coastal states. The convention gives a coastal state sovereign jurisdiction over the resources, including oil and gas, of its continental shelf. Under Article 76 of the convention, a coastal state with a broad continental margin may establish a shelf limit beyond 200 nautical miles. This jurisdiction is subject to the submission of the particulars of the intended limit and supporting scientific and technical data by the coastal state to the commission for review and recommendation. The commission reviews the documentation and, by a two-thirds majority, approves its recommendations to the submitting state. Coastal states agree to establish the outer limits of their continental shelf, in accordance with this process and with their national laws. In instances of disagreement with the commission's recommendations, the coastal state may make a revised or new submission. The actions of the commission \"shall not prejudice matters relating to delimitation of boundaries between States with opposite or adjacent coasts.\" The \"limits established by a coastal State on the basis of these recommendations shall be final and binding.\""], "subsections": []}, {"section_title": "Extended Continental Shelf and United States as a Nonparty to UNCLOS", "paragraphs": ["The U.S. government's State Department-led interagency Extended Continental Shelf Project makes the following points regarding the extended continental shelf and the United States as a nonparty to UNCLOS:", "As a nonparty to UNCLOS, U.S. nationals may not serve as members of the Commission on the Limits of the Continental Shelf. The question of whether nonparties may make a submission to the commission has not been resolved. Becoming a party to UNCLOS would help the United States maximize international recognition and legal certainty regarding the outer limits of the U.S. continental shelf. Even for nonparties to UNCLOS, however, customary international law, as reflected in UNCLOS, confers on coastal states rights and obligations relating to the continental shelf. This view is well supported in international law. The International Court of Justice, for example, has already declared Article 76(1) to have the status of customary international law (Nicaragua v. Colombia, 2012). Article 76(1) provides that the continental shelf extends to \"the outer edge of the continental margin or to a distance of 200 nautical miles,\" whichever is further. Paragraphs 2 through 7 of Article 76 set forth the detailed rules for determining the precise outer limits of the continental shelf in those areas where the continental margin extends beyond 200 nautical miles from shore. The United States, like other countries, is using these provisions to determine its continental shelf limits. As a matter of customary international law, the United States also respects the continental shelf limits of other countries that abide by Article 76. The commission is not a claims process, and continental shelf entitlement does not depend on going through this procedure. The mandate of the commission is instead to make \"recommendations\" on the \"outer limits\" of the continental shelf. The word \"claim\" does not appear in Article 76, Annex II, or the commission's rules. Article 77(3) and the case law of the International Court of Justice indicate that continental shelf rights exist as a matter of fact and do not need to be expressly claimed. Delineating the continental shelf is a very complex and technical exercise, and the commission's process is important for obtaining international recognition and legal certainty of the outer limits of the continental shelf. The United States has potentially overlapping extended continental shelf areas with two countries in the Arctic\u2014Russia and Canada. The United States and the Soviet Union (now Russia) agreed to a maritime boundary, including in the Arctic, in 1990. The treaty was approved by the U.S. Senate in 1991; it has not been approved by Russia's Duma. Pending the treaty's entry into force, the two countries continue to provisionally apply the terms of the treaty. In determining its extended continental shelf limits, Russia has respected this agreement. Russia has not asserted an extended continental shelf in any areas that might be considered part of the U.S. extended continental shelf. The Russian submission to the commission respects the U.S.-Russia maritime boundary. Canada and the United States have not yet established a maritime boundary in the Arctic. The United States and Canada have cooperated extensively to collect the data necessary to define the continental shelf in the Arctic Ocean. The areas where the continental shelf of the United States and Canada overlap will not be fully known until both countries determine the extent of their extended continental shelf in the Arctic Ocean. Once those areas are identified, the United States and Canada will address the maritime boundary on a bilateral basis at an appropriate time.", "Over the years, the United States has submitted observations on submissions to the commission made by other states, requesting that those observations be made available online and to the commission. In addition, since 2001, the United States has gathered and analyzed data to determine the outer limits of its extended continental shelf. Starting in 2007, this effort became the Extended Continental Shelf Project."], "subsections": []}, {"section_title": "Additional Points", "paragraphs": ["Some observers have suggested that a separate international legal regime be negotiated to address the changing circumstances in the Arctic. They maintain that these changing circumstances were not envisioned at the time UNCLOS was negotiated. Other observers suggest that the Arctic region above a certain parallel be designated a wilderness area. As precedent, they cite Article 4 of the Antarctic Treaty, under which any current claims to sovereign territory are frozen and ", "No acts or activities taking place while the present Treaty is in force shall constitute a basis for asserting, supporting or denying a claim to territorial sovereignty in Antarctica or create any rights of sovereignty in Antarctica. No new claim, or enlargement of an existing claim, to territorial sovereignty in Antarctica shall be asserted while the present Treaty is in force.", "Supporters of UNCLOS maintain that changing circumstances in the Arctic strengthen their argument that the United States should become a party to the convention. In this way, they argue, the United States can be best situated to protect and serve its national interests, under both Article 76 and other parts of UNCLOS.", "The Obama Administration's January 2014 implementation plan for its national strategy for the Arctic region (see discussion above) includes, as one of its 36 or so initiatives, one entitled \"Accede to the Law of the Sea Convention.\" Under this initiative, the State Department and other federal agencies are to \"continue to seek the Senate's advice and consent to accede to the Law of the Sea Convention.\" The document states that \"the [Obama] Administration is committed, like the last three Administrations, to pursuing accession to the Convention on the Law of the Sea and will continue to place a priority on attaining Senate advice and consent to accession.\""], "subsections": []}]}, {"section_title": "Senate Arctic Caucus", "paragraphs": ["On March 4 and 5, 2015, Senator Lisa Murkowski and Senator Angus King announced the formation of a Senate Arctic Caucus \"to spotlight this region and open up a wider conversation about the nation's future in the region as America prepares to accede to the Chair of the Arctic Council.\""], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "Climate Change and Loss of Arctic Sea Ice64", "paragraphs": ["Record low extents of Arctic sea ice in 2012 and 2007 have focused scientific and policy attention on climate changes in the high north, and on the implications of projected ice-free seasons in the Arctic within decades. The Arctic has been projected by several scientists to be ice-free in most late summers as soon as the 2030s. This opens opportunities for transport through the Northwest Passage and the Northern Sea Route, extraction of potential oil and gas resources, and expanded fishing and tourism ( Figure 3 ).", "More broadly, physical changes in the Arctic include warming ocean, soil, and air temperatures; melting permafrost; shifting vegetation and animal abundances; and altered characteristics of Arctic cyclones. All these changes are expected to affect traditional livelihoods and cultures in the region and survival of polar bear and other animal populations, and raise risks of pollution, food supply, safety, cultural losses, and national security. Moreover, linkages (\"teleconnections\") between warming Arctic conditions and extreme events in the mid-latitude continents are increasingly evident, identified in such extreme events as the heat waves and fires in Russia in 2010; severe winters in the eastern United States and Europe in 2009/2010 and in Europe in 2011/2012; and Indian summer monsoons and droughts. Hence, changing climate in the Arctic suggests important implications both locally and across the Hemisphere.", "Like the rest of the globe, temperatures in the Arctic have varied but show a significant warming trend since the 1970s, and particularly since 1995. The annual average temperature for the Arctic region (from 60 o to 90 o N) is now about 1.8 o F warmer than the \"climate normal\" (the average from 1961 to 1990). Temperatures in October-November are now about 9 o F above the seasonal normal. Scientists have concluded that most of the global warming of the last three decades is very likely caused by human-related emissions of greenhouse gases (GHG, mostly carbon dioxide); they expect the GHG-induced warming to continue for decades, even if, and after, GHG concentrations in the atmosphere have been stabilized. The extra heat in the Arctic is amplified by processes there (the \"polar amplification\") and may result in irreversible changes on human timescales.", "The observed warmer temperatures along with rising cyclone size and strength in the Arctic have reduced sea ice extent, thickness, and ice that persists year-round (\"perennial ice\"); natural climate variability has likely contributed to the record low ice extents of 2007 and 2012. The 2007 minimum sea ice extent was influenced by warm Arctic temperatures and warm, moist winds blowing from the North Pacific into the central Arctic, contributing to melting and pushing ice toward and into the Atlantic past Greenland. Warm winds did not account for the near-record sea ice minimum in 2008. In early August 2012, an unusually large storm with low pressure developed over the Arctic, helping to disperse the already weak ice into warmer waters and accelerating its melt rate. By August 24, 2012, sea ice extent had shrunk below the previous observed minimum of late September 2007.", "Modeling of GHG-induced climate change is particularly challenging for the Arctic, but it consistently projects warming through the 21 st century, with annual average Arctic temperature increases ranging from +1\u00b0 to +9.0\u00b0 C (+2\u00b0 to +19.0\u00b0 F), depending on the GHG scenario and model used. While such warming is projected by most models throughout the Arctic, some models project slight cooling localized in the North Atlantic Ocean just south of Greenland and Iceland. Most warming would occur in autumn and winter, \"with very little temperature change projected over the Arctic Ocean\" in summer months.", "Due to observed and projected climate change, scientists have concluded that the Arctic will have changed from an ice-covered environment to a recurrent ice-free ocean (in summers) as soon as the late 2030s. The character of ice cover is expected to change as well, with the ice being thinner, more fragile, and more regionally variable. The variability in recent years of both ice quantity and location could be expected to continue."], "subsections": []}, {"section_title": "Extended Continental Shelf Submissions, Territorial Disputes, and Sovereignty Issues74", "paragraphs": [], "subsections": [{"section_title": "Extended Continental Shelf Submissions", "paragraphs": ["Motivated in part by a desire to exercise sovereign control over the Arctic region's increasingly accessible oil and gas reserves (see \" Oil, Gas, and Mineral Exploration \"), the four Arctic coastal states other than the United States\u2014Canada, Russia, Norway, and Denmark (of which Greenland is a territory)\u2014have made or are in the process of preparing submissions to the Commission on the Limits of the Continental Shelf regarding the outer limits of their extended continental shelves. (For further discussion of the commission, see \" Extended Continental Shelf and United States as a Nonparty to UNCLOS .\")", "Russia has been attempting to chart the Arctic Ocean's enormous underwater Lomonosov Ridge in an attempt to show that it is an extension of Russia's continental margin. The ridge spans a considerable distance across the Arctic Ocean. A 2001 submission by Russia was rejected as insufficiently documented. Canada views a portion of the ridge as part of its own continental shelf.", "In August 2007, a Russian submersible on a research expedition deposited an encased Russian Federation flag on the seabed of the presumed site of the North Pole. The action captured worldwide attention, but analysts note that it did not constitute an official claim to the Arctic seabed or the waters above it, that it has no legal effect, and that it therefore was a purely symbolic act.", "At a May 2008 meeting in Ilulissat, Greenland, the five Arctic coastal states reaffirmed their commitment to the UNCLOS legal framework for the establishment of extended continental shelf limits in the Arctic. (For further discussion, see \" Extent of the Continental Margin \" in \" Oil, Gas, and Mineral Exploration .\")"], "subsections": []}, {"section_title": "Territorial Disputes and Sovereignty Issues", "paragraphs": ["In addition to this process, there are four unresolved Arctic territorial disputes:", "Scientists have forecast that in coming decades, global warming will reduce the ice pack in Canada's northern archipelago sufficiently to permit ships to use the trans-Arctic shipping route known as the Northwest Passage during the summer months (see \" Commercial Sea Transportation \"). The prospect of such traffic raises a major jurisdictional question. Ottawa maintains that such a passage would be an inland waterway, and would therefore be sovereign Canadian territory subject to Ottawa's surveillance, regulation, and control. The United States, the European Union, and others assert that the passage would constitute an international strait between two high seas. The United States and Canada are negotiating over a binational boundary in the Beaufort Sea. The United States and Russia in 1990 signed an agreement regarding a disputed area of the Bering Sea; the U.S. Senate ratified the pact the following year, but the Russian Duma has yet to approve the accord. Denmark and Canada disagree over which country has the territorial right to Hans Island, a tiny, barren piece of rock between Greenland and Canada's Ellesmere Island. Some analysts believe the two countries are vying for control over a future sea lane that might be created if the Arctic ice were to melt sufficiently to create a Northwest Passage. Others claim that the governments are staking out territorial claims in the event that future natural resource discoveries make the region economically valuable.", "In addition to these disputes, Norway and Russia had been at odds for decades over the boundary between the two in the so-called \"Grey Zone\" in the Barents Sea, an area believed to hold rich undersea deposits of petroleum. On September 15, 2010, Norwegian Prime Minister Jens Stoltenberg and Russian President Dmitry Medvedev signed an agreement in Murmansk, a Russian city near the Norwegian border. The accord awards roughly half of the 175,000-square-kilometer area to each country; it spells out fishing rights, and provides for the joint development of future oil and gas finds that straddle the boundary line. Some observers believe it is noteworthy that Russia would concede sovereignty over such a large, resource-rich area to a small, neighboring country. But others have noted that Moscow may be hoping for Norwegian cooperation in developing offshore resources, and eventually in winning approval when Russia makes its Article 76 UNCLOS submission.", "In August 2010, Canadian Foreign Minister Lawrence Cannon announced a new \"Statement of Canada's Arctic Policy,\" which reaffirmed the government's commitment to Canada's sovereignty in the region, to economic and social development, to environmental protection, and to empowerment of the peoples in the north. The statement also emphasized the government's intention to negotiate settlements to its disputes with the United States over the Beaufort Sea boundary, and with Denmark over Hans Island. Minister Cannon declared that \"making progress on outstanding boundary issues will be a top priority.\" Also, despite their dispute over Hans Island, Canada and Denmark have been working together on Arctic issues. In May 2010, the two countries' military chiefs of staffs signed a memorandum of understanding on Arctic Defense, Security, and Operational Cooperation, committing the two countries to \"enhanced consultation, information exchange, visits, and exercises.\""], "subsections": []}]}, {"section_title": "Commercial Sea Transportation81", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["The search for a shorter route from the Atlantic to Asia has been the quest of maritime powers since the Middle Ages. The melting of Arctic ice raises the possibility of saving several thousands of miles and several days of sailing between major trading blocs. If the Arctic were to become a viable shipping route, the ramifications could extend far beyond the Arctic. For example, lower shipping costs could be advantageous for China (at least its northeast region), Japan, and South Korea because their manufactured products exported to Europe or North America could become less expensive relative to other emerging manufacturing centers in Southeast Asia, such as India. Melting ice could potentially open up two trans-Arctic routes (see Figure 3 ):", "The Northern Sea Route (NSR, a.k.a. the \"Northeast Passage\"), along Russia's northern border from Murmansk to Provideniya, is about 2,600 nautical miles in length. It was opened by the Soviet Union to domestic shipping in 1931 and to transit by foreign vessels in 1991. This route would be applicable for trade between northeast Asia (north of Singapore) and northern Europe. In recent summers, less than a handful of large, non-Russian-flagged cargo ships have transited the NSR. Russia reportedly seeks to reserve carriage of oil and gas extracted along the NSR to Russian-flagged ships. The Northwest Passage (NWP) runs through the Canadian Arctic Islands. The NWP actually consists of several potential routes. The southern route is through Peel Sound in Nunavut, which has been open in recent summers and contains mostly one-year ice. However, this route is circuitous, contains some narrow channels, and is shallow enough to impose draft restrictions on ships. The more northern route, through McClure Strait from Baffin Bay to the Beaufort Sea north of Alaska, is much more direct and therefore more appealing to ocean carriers, but more prone to ice blockage. The NWP is potentially applicable for trade between northeast Asia (north of Shanghai) and the northeast of North America, but it is less commercially viable than the NSR. Cargo ship transits have been extremely rare but cruise vessel excursions and research vessels are more common. "], "subsections": [{"section_title": "Destination Traffic, Not Trans-Arctic Traffic", "paragraphs": ["Most cargo ship activity currently taking place in the Arctic is to transport natural resources from the Arctic or to deliver general cargo and supplies to communities and natural resource extraction facilities. Thus, cargo ship traffic in the Arctic presently is mostly regional, not trans-Arctic. While there has been a recent uptick in Arctic shipping activity, this activity has more to do with a spike in commodity prices than it does with the melting of Arctic ice. Even so, fewer ships ply the Arctic seas now than in the past. The NSR continues to account for the bulk of Arctic shipping activity. "], "subsections": []}, {"section_title": "Unpredictable Ice Conditions Hinder Trans-Arctic Shipping", "paragraphs": ["Arctic waters do not necessarily have to be ice free to be open to shipping. Multiyear ice can be over 10 feet thick and problematic even for icebreakers, but one-year ice is typically 3 feet thick or less. This thinner ice can be more readily broken up by icebreakers or ice-class ships (cargo ships with reinforced hulls and other features for navigating in ice-infested waters). However, more open water in the Arctic has resulted in another potential obstacle to shipping: unpredictable ice flows. In the NWP, melting ice and the opening of waters that were once covered with one-year ice has allowed blocks of multiyear ice from farther north and icebergs from Greenland to flow into potential sea lanes. The source of this multiyear ice is not predicted to dissipate in spite of climate change. Moreover, the flow patterns of these ice blocks are very difficult to forecast. Thus, the lack of ice in potential sea lanes during the summer months can add even greater unpredictability to Arctic shipping. This is in addition to the extent of ice versus open water, which is also highly variable from one year to the next and seasonally. ", "The unpredictability of ice conditions is a major hindrance for trans-Arctic shipping in general, but can be more of a concern for some types of ships than it is for others. For instance, it would be less of a concern for cruise ships, which may have the objective of merely visiting the Arctic rather than passing through and could change their route and itinerary depending on ice conditions. On the other hand, unpredictability is of the utmost concern for container ships that carry thousands of containers from hundreds of different customers, all of whom expect to unload or load their cargo upon the ship's arrival at various ports as indicated on the ship's advertised schedule. The presence of even small blocks of ice or icebergs from a melting Greenland ice sheet requires slow sailing and could play havoc with schedules. Ships carrying a single commodity in bulk from one port to another for just one customer have more flexibility in terms of delivery windows, but would not likely risk an Arctic passage under prevailing conditions.", "Ice is not the sole impediment to Arctic shipping. The region frequently experiences adverse weather, including not only severe storms, but also intense cold, which can impair deck machinery. During the summer months when sea lanes are open, heavy fog is common in the Arctic. ", "Commercial ships would face higher operating costs on Arctic routes than elsewhere. Ship size is an important factor in reducing freight costs. Many ships currently used in other waters would require two icebreakers to break a path wide enough for them to sail through; ship owners could reduce that cost by using smaller vessels in the Arctic, but this would raise the cost per container or per ton of freight. Also, icebreakers or ice-class cargo vessels burn more fuel than ships designed for more temperate waters and would have to sail at slower speeds. The shipping season in the Arctic only lasts for a few weeks, so icebreakers and other special required equipment would sit idle the remainder of the year. None of these impediments by themselves may be enough to discourage Arctic passage but they do raise costs, perhaps enough to negate the savings of a shorter route. Thus, from the perspective of a shipper or a ship owner, shorter via the Arctic does not necessarily mean cheaper and faster."], "subsections": []}, {"section_title": "Basic Navigation Infrastructure Is Lacking", "paragraphs": ["Considerable investment in navigation-related infrastructure would be required if trans-Arctic shipping were to become a reality. Channel marking buoys and other floating visual aids are not possible in Arctic waters because moving ice sheets will continuously shift their positions. Therefore, vessel captains would need to rely on marine surveys and ice charts. For some areas in the Arctic, however, these surveys and charts are out of date or not sufficiently accurate. To remedy this problem, aviation reconnaissance of ice conditions and satellite images would need to become readily available for ship operators. Ship-to-shore communication infrastructure would need to be installed where possible. Refueling stations may be needed, as well as, perhaps, transshipment ports where cargo could be transferred to and from ice-capable vessels at both ends of Arctic routes. Shipping lines would need to develop a larger pool of mariners with ice navigation experience. Marine insurers would need to calculate the proper level of risk premium for polar routes, which would require more detailed information about Arctic accidents and incidents in the past. ", "The U.S. Army Corps of Engineers, along with the state of Alaska, has studied the feasibility of a \"deep-draft\" port in the Arctic (accommodating ships with a draft of up to 35 feet). The northern and northwestern coastlines of Alaska are exceptionally shallow, generally limiting harbor and near-shore traffic to shallow-draft barges. Coast Guard cutters and icebreakers have drafts of 35 to 40 feet while NOAA research vessels have drafts of 16 to 28 feet, so at present these vessels are based outside the Arctic and must sail considerable distances to reach Arctic duty stations. Supply vessels supporting offshore oil rigs typically have drafts over 20 feet. A deep-draft port could serve as a base of operations for larger vessels, facilitating commercial maritime traffic in the Arctic. The study concluded that the existing harbors of Nome or Port Clarence on Alaska's west coast may be the most suitable for deepening because of their proximity to the Bering Strait and deeper water. However, at a July 2016 hearing, the Coast Guard indicated its preferred strategy was to rely on mobile assets (vessels and aircraft) and seasonal bases of operation rather than pursue a permanent port in the Arctic.", "The U.S. Committee on the Marine Transportation System, a Cabinet-level committee of federal agencies with responsibilities for marine transportation, identified a list of infrastructure improvements for Arctic navigation in a 2013 report. The report prioritizes improvements to information infrastructure (weather forecasting, nautical charting, ship tracking) and emergency response capabilities for ships in distress. "], "subsections": []}, {"section_title": "Regulation of Arctic Shipping", "paragraphs": ["Due to the international nature of the shipping industry, maritime trading nations have adopted international treaties that establish standards for ocean carriers in terms of safety, pollution prevention, and security. These standards are agreed upon by shipping nations through the International Maritime Organization (IMO), a United Nations agency that first met in 1959. ", "Key conventions that the 168 IMO member nations have adopted include the Safety of Life at Sea Convention (SOLAS), which was originally adopted in response to the Titanic disaster in 1912 but has since been revised several times; the Prevention of Pollution from Ships (MARPOL), which was adopted in 1973 and modified in 1978; and the Standards for Training, Certification, and Watchkeeping for Seafarers (SCTW), which was adopted in 1978 and amended in 1995. It is up to ratifying nations to enforce these standards. The United States is a party to these conventions, and the U.S. Coast Guard enforces them when it boards and inspects ships and crews arriving at U.S. ports and the very few ships engaged in international trade that sail under the U.S. flag. ", "Like the United States, most of the other major maritime trading nations lack the ability to enforce these regulations as a \"flag state\" because much of the world's merchant fleet is registered under so-called \"flags of convenience.\" While most ship owners and operators are headquartered in major economies, they often register their ships in Panama, Liberia, the Bahamas, the Marshall Islands, Malta, and Cyprus, among other \"open registries,\" because these nations offer more attractive tax and employment regulatory regimes. Because of this development, most maritime trading nations enforce shipping regulations under a \"port state control\" regime\u2014that is, they require compliance with these regulations as a condition of calling at their ports. The fragmented nature of ship ownership and operation can be a further hurdle to regulatory enforcement. It is common for cargo ships to be owned by one company, operated by a second company (which markets the ship's space), and managed by a third (which may supply the crew and other services a ship requires to sail), each of which could be headquartered in different countries. "], "subsections": []}, {"section_title": "New Arctic Polar Code", "paragraphs": ["While SOLAS and other IMO conventions include provisions regarding the operation of ships in ice-infested waters, they were not specific to the polar regions. To supplement these requirements, a new IMO polar code went into effect on January 1, 2017. The code applies to passenger and cargo ships of 500 gross tons or more engaged in international voyages. It does not apply to fishing vessels, military vessels, pleasure yachts, or smaller cargo ships. The polar requirements are intended to improve safety and prevent pollution in the Arctic, and they include provisions on ship construction, ship equipment related to navigation, and crew training and ship operation. The code requires ships to carry fully or partially enclosed lifeboats. The code requires that the crew have training in ice navigation. Nations can enforce additional requirements on ships arriving at their ports or sailing through their coastal waters. For instance, U.S. Coast Guard regulations largely follow IMO conventions but mandate additional requirements in some areas. U.S. coastal states can require ships calling at their ports to take additional safety and pollution prevention safeguards. Canada and Russia have additional pollution regulations for Arctic waters exceeding MARPOL. The U.S. Coast Guard has studied and has recommended a specific vessel traffic separation scheme for the Bering Strait between Alaska and Russia, which experiences over 400 transits per year. The U.S. Coast Guard is seeking IMO approval of this routing scheme."], "subsections": []}]}]}, {"section_title": "Oil, Gas, and Mineral Exploration102", "paragraphs": ["Decreases in summer polar ice may alter options for oil, gas, and mineral exploration in Arctic offshore or onshore areas. Offshore of Alaska, the U.S. outer continental shelf (OCS) covers more than 1 billion acres, including some areas with high oil and gas potential. Even with warmer temperatures, exploration and development in the Arctic are still subject to harsh conditions, especially in winter. This makes it costly and challenging to develop the infrastructure necessary to produce, store, and transport oil, gas, and minerals from newly discovered deposits. Severe weather poses challenges to several ongoing offshore operations as well as to new exploration. ", "Offshore oil and gas exploration is affected by efforts to map the margins of the U.S. OCS. Shrinking sea ice cover in the Arctic has intensified interest in surveying and mapping the continental margins of multiple countries with lands in the Arctic. Delineating the extent of the continental margins beyond the 200 nautical mile Exclusive Economic Zone (EEZ) could lead to consideration of development on substantial amounts of submerged lands. Mapping projects are underway, by individual countries and through cooperative government studies, to support submissions to the Commission on the Limits of the Continental Shelf, including for areas that may contain large amounts of oil, natural gas, methane hydrates, or minerals. ", "With respect to onshore development, shrinking glaciers could expose land containing economic deposits of gold, iron ore, or other minerals previously covered by glacial ice. At the same time, warming that causes permafrost to melt could pose challenges to oil, gas, and mineral activities because ground structures, such as pipelines and other infrastructure that depend on footings sunk into the permafrost for support, could be compromised. In addition, warmer temperatures shorten the ice road transport seasons for oil, gas, and mineral development, creating transportation challenges."], "subsections": [{"section_title": "Offshore Oil and Gas Exploration", "paragraphs": ["The shrinking Arctic ice cap, or conversely, the growing amount of ice-free ocean in the summertime, has increased interest in exploring for offshore oil and gas in the Arctic. Reduced sea ice in the summer means that ships towing seismic arrays can explore regions of the Arctic Ocean, Chukchi Sea, Beaufort Sea, and other offshore regions for longer periods of time with less risk of colliding with floating sea ice. Less sea ice over longer periods compared to previous decades also means that the seasonal window for offshore Arctic drilling remains open longer in the summer, increasing the chances for making a discovery. ", "In addition to the improved access to larger portions of the Arctic afforded by shrinking sea ice, interest in Arctic oil and gas was fueled by a 2008 U.S. Geological Survey (USGS) appraisal of undiscovered oil and gas north of the Arctic Circle. The USGS stated that the \"extensive Arctic continental shelves may constitute the geographically largest unexplored prospective area for petroleum remaining on Earth.\" In the report, the USGS estimated that 90 billion barrels of oil, nearly 1,700 trillion cubic feet of natural gas, and 44 billion barrels of natural gas liquids may remain to be discovered in the Arctic (including both U.S. and international resources north of the Arctic Circle). A 2009 article in Science magazine indicated that 30% of the world's undiscovered natural gas and 13% of the world's undiscovered oil may be found north of the Arctic Circle. In terms of U.S. resources specifically, DOI's Bureau of Ocean Energy Management (BOEM) estimated in 2016 that the Alaska portions of the U.S. OCS contain undiscovered, technically recoverable resources of approximately 27 billion barrels of oil and 131 trillion cubic feet of natural gas (although not all of these resources may be economically viable to recover). A 2015 report by the National Petroleum Council stated that U.S. offshore oil and gas exploration in the Arctic over the next 35 years \"would help sustain domestic supplies as production of U.S. shale oil and tight oil may decline.\"", "Despite the warming trend in the Arctic, severe weather and sea ice continue to pose challenges to exploration. In addition, any discovery of new oil and gas deposits far from existing storage, pipelines, and shipping facilities could not be developed until infrastructure is built to extract and transport the petroleum.", "Some have expressed interest in expanding America's ocean energy portfolio in the region. Currently, among 15 federal planning areas in the region, the Beaufort Sea and Cook Inlet are the only two areas with active federal leases, and only the Beaufort Sea has any producing wells in federal waters (from a joint federal-state unit). The Trump Administration has stated its interest in promoting offshore development in the region. In January 2018, the Administration issued a draft five-year offshore oil and gas leasing program for 2019-2024 that would schedule lease sales in all 15 Alaska planning areas, including three sales in the Beaufort Sea and three in the Chukchi Sea. Current lease sales on the Alaska OCS are governed by the Obama Administration's leasing program for 2017-2022, which includes one lease sale in the Cook Inlet (scheduled for 2021) and none in other Alaska planning areas. ", "Activities on existing federal leases in the region have fluctuated as industry weighs changing oil prices, development costs, and regulations. For example, in 2015, Shell Oil Company announced its decision to cease exploration in offshore Alaska for the foreseeable future. Shell cited several reasons for the decision, including insufficient indications of oil and gas at its Burger J well in the Chukchi Sea, the high costs associated with Arctic exploration, and the \"challenging and unpredictable\" federal regulatory environment for offshore Alaska. BOEM also reported that, between February and November 2016, companies relinquished more than 90% of leases they had held in the Beaufort and Chukchi Sea planning areas, in the midst of a slump in oil prices. While there were 450 active leases in the Chukchi Sea planning area at the end of 2015, at the end of 2018 there were none. More recently, some activities have indicated stronger industry interest in the region. For example, in November 2017, the Trump Administration approved an application for permit to drill (APD) on a lease in the Beaufort Sea held by the Eni U.S. Operating Company. In October 2018, BOEM issued conditional approval to Hilcorp Alaska LLC for an oil and gas development and production plan in the Beaufort Sea, which would be the region's first production facility entirely in federal waters. ", "The evolving federal regulatory environment for Arctic offshore activities has been shaped by concerns about industry's ability to respond to potential oil spills, given the region's remoteness and harsh conditions. The section of this report on \" Oil Pollution Implications of Arctic Change \" discusses this issue in greater detail. In July 2016, BOEM and the Bureau of Safety and Environmental Enforcement (BSEE) released final safety regulations for Arctic exploratory drilling that include multiple requirements for companies to reduce the risks of potential oil spills\u2014for example, the requirement that companies have a separate rig available at drill sites to drill a relief well in case of a loss of well control. Some Members of Congress and industry stakeholders opposed the regulations as overly prescriptive and unnecessarily burdensome, while other Members and environmental organizations asserted that the rules did not go far enough in protecting the region from potential environmental damage and addressing the potential contributions of Arctic oil and gas activities to climate change. In a 2017 executive order, President Trump directed the Secretary of the Interior to review the Arctic regulations, and in 2018 the Department of the Interior announced work on rule revisions. Legislation was introduced in the 115 th Congress both to repeal the Obama Administration's version of the Arctic rule and, conversely, to codify it in law. ", "Concerns about the impacts of oil and gas activities have led in the past to bans by both Congress and the President on leasing in certain Arctic Ocean areas deemed especially sensitive. For example, congressional and presidential moratoria since the 1980s effectively banned federally regulated planning and permitting in the Bristol Bay area of the North Aleutian Basin. Congress allowed most statutory bans in the region to expire in 2004. President Obama reinstated the moratorium in the North Aleutian Basin, indefinitely withdrawing acreage located in Bristol Bay from eligibility for oil and gas leasing. Also, in December 2016, President Obama indefinitely withdrew from leasing disposition other large portions of the U.S. Arctic, including the entire Chukchi Sea planning area and almost all of the Beaufort Sea planning area. President Obama separately withdrew from leasing consideration planning areas in the North Bering Sea. In April 2017, President Trump issued Executive Order 13795, which modified President Obama's withdrawals so as to open all of these areas for leasing consideration except for the North Aleutian Basin. "], "subsections": []}, {"section_title": "Extent of the Continental Margin", "paragraphs": ["Increased interest in developing offshore resources in the Arctic has sparked efforts by nations bordering the Arctic Ocean to map the extent of their continental margins beyond the 200-mile EEZ limit. As discussed earlier (see \" Extended Continental Shelf and United States as a Nonparty to UNCLOS \"), under Article 76 of UNCLOS, nations can make a submission to the Commission on the Limits of the Continental Shelf (hereinafter referred to as the Commission) concerning the extent of their continental shelves. Under Article 76, the extent of the continental margin beyond the 200-mile limit depends on the position of the foot of the continental slope, the thickness of sediments, and the depth of water. Also, the continental margin could include geologic features that extend from the continent out to sea, which may include undersea ridges continuing for hundreds of miles offshore.", "Arctic border countries have conducted complex investigations needed to support submissions to the Commission for an extended continental shelf in the Arctic. Submissions have been made by several countries, including the Russian Federation, which made its initial UNCLOS submission to a portion of the Arctic continental shelf in 2001. Russia's 2001 submission included the Lomonosov Ridge, an undersea feature spanning the Arctic from Russia to Canada, as an extension of its continental margin. The submission demonstrated Russia's bid to extend activities in Arctic regions. The Russian Federation presented a revised submission in 2015 to the Commission that included not only the Lomonosov Ridge but also the Mendeleev Rise\u2014another subsea feature claimed by Russia to be a natural part of their continental margin\u2014as components of the extended Russian continental shelf. The Commission has not rendered a decision on the revised Russian Federation submission as of early 2018.", "The United States has started to gather and analyze data for a potential submission through an initiative called the Extended Continental Shelf (ECS) Project. The U.S. ECS project has also assisted more than 30 countries with their efforts to delineate their extended continental shelves worldwide. Canada and the United States share overlapping regions of the seabed as part of the extended continental margin of both nations. Much of the data to delineate the ECS for both countries was collected in a two-ship operation involving the U.S. Coast Guard Cutter Healy and the Canadian Coast Guard ship Louis S. Saint Laurent . The two-ship operation collected more than 13,000 linear kilometers (about 8,078 miles) of seismic data over four field seasons in the Arctic beginning in 2007. The data collected will help each country delineate the extent of their own ECS, which should then enable the countries to determine the amount of overlap in the seabed and ultimately establish a maritime boundary in the Arctic. ", "The United States also has potentially overlapping ECS areas with Russia. Russia (then the Soviet Union) and the United States agreed to a maritime boundary in 1990, and so far Russia has not asserted its ECS in any areas that might be considered part of the U.S. ECS."], "subsections": []}, {"section_title": "Onshore Mineral Development", "paragraphs": ["A warming Arctic means new opportunities and challenges for mineral exploration and development onshore. Receding glaciers expose previously ice-covered land that could host economic mineral deposits that were previously undetectable and unmineable below the ice. Longer summers would also extend exploration seasons for areas that are not currently ice-covered but are only accessible for ground surveys during the warmer months. In some parts of the Arctic, such as Baffin Island, Canada, less sea ice allows ships to transport heavy equipment to remote locations, and to convey ore from mines to the market further south. Some railway and mining operators are considering developing railroads and other infrastructure to transport ore year-round. As with onshore oil and gas development, however, mining infrastructure that depends on footings sunk into permafrost could become unstable if the permafrost melts in response to warmer temperatures. Also, as with oil and gas development, mineral deposits that may be technically recoverable with current technology may not be economically profitable.", "Some industry commentators suggest that mining might offer better long-term economic development opportunities compared to oil and gas development because of a larger permanent workforce and project lifetimes of several decades. Similar to oil and gas, however, industry observers note that uncertainties and knowledge gaps exist in the understanding of environmental change in the Arctic, and how to deal with the risks associated with significant Arctic industrial activity.", "One important part of the current infrastructure in the Arctic that supports oil, gas, and mineral development is the construction and use of ice roads\u2014built and used during the winter, but not passable during the warmer months. Warmer temperatures are shortening the ice road transport seasons and creating transportation challenges. For example, the opening date for tundra roads in northern Alaska usually occurred in early November prior to 1991 and has shifted to January in recent years."], "subsections": []}]}, {"section_title": "Oil Pollution and Pollution Response142", "paragraphs": [], "subsections": [{"section_title": "Oil Pollution Implications of Arctic Change", "paragraphs": ["Climate change impacts in the Arctic, particularly the decline of sea ice and retreating glaciers, have stimulated human activities in the region, many of which have the potential to create oil pollution. A primary concern is the threat of a large oil spill in the area. Although a major oil spill has not occurred in the Arctic region, recent economic activity, such as oil and gas exploration and tourism (cruise ships), increases the risk of oil pollution (and other kinds of pollution) in the Arctic. Significant spills in high northern latitudes (e.g., the 1989 Exxon Valdez spill in Alaska and spills in the North Sea) suggest that the \"potential impacts of an Arctic spill are likely to be severe for Arctic species and ecosystems.\""], "subsections": [{"section_title": "Risk of Oil Pollution in the Arctic", "paragraphs": ["A primary factor determining the risk of oil pollution in the Arctic is the level and type of human activity being conducted in the region. Although climate changes in the Arctic are expected to increase access to natural resources and shipping lanes, the region will continue to present logistical challenges that may hinder human activity in the region. For example (as discussed in another section of this report), the unpredictable ice conditions may discourage trans-Arctic shipping. If trans-Arctic shipping were to occur on a frequent basis, it would represent a considerable portion of the overall risk of oil pollution in the region. In recent decades, many of the world's largest oil spills have been from oil tankers, which can carry millions of gallons of oil.", "Although the level of trans-Arctic shipping is uncertain, many expect oil exploration and extraction activities to intensify in the region. Oil well blowouts from offshore oil extraction operations have been a source of major oil spills, eclipsing the largest tanker spills. The largest unintentional oil spill in recent history was from the 2010 Deepwater Horizon incident in the Gulf of Mexico. During that incident, the uncontrolled well released (over an 87-day period) approximately 200 million gallons of crude oil. The second-largest unintentional oil spill in recent history\u2014the IXTOC I , estimated at 140 million gallons\u2014was due to an oil well blowout in Mexican Gulf Coast waters in 1979.", "Until the 2010 Deepwater Horizon incident, the spill record for offshore platforms in U.S. federal waters had shown improvement from prior years. A 2003 National Research Council (NRC) study of oil and gas activities on Alaska's North Slope stated \"blowouts that result in large spills are unlikely.\" Similar conclusions were made in federal agency documents regarding deepwater drilling in the Gulf of Mexico before the 2010 Deepwater Horizon event. Some would likely contend that the underlying analyses behind these conclusions should be adjusted to account for the 2010 Gulf oil spill. However, others may argue that the proposed activities in U.S. Arctic waters present less risk of an oil well blowout than was encountered by the Deepwater Horizon drill rig, because the proposed U.S. Arctic operations would be in shallower waters (150 feet) than the deepwater well (approximately 5,000 feet) that was involved in the 2010 Gulf oil spill. In addition, Shell Oil has stated that the pressures in the Chukchi Sea (the location of Shell's recent interest) would be two to three times less than they were in well involved in the 2010 Gulf oil spill. Regardless of these differences, even under the most stringent control systems, some oil spills and other accidents are likely to occur from equipment failure or human error. "], "subsections": []}, {"section_title": "Potential Impacts", "paragraphs": ["No oil spill is entirely benign. Even a relatively minor spill, depending on the timing and location, can cause significant harm to individual organisms and entire populations. Regarding aquatic spills, marine mammals, birds, bottom-dwelling and intertidal species, and organisms in early developmental stages\u2014eggs or larvae\u2014are especially vulnerable. However, the effects of oil spills can vary greatly. Oil spills can cause impacts over a range of time scales, from only a few days to several years, or even decades in some cases.", "Conditions in the Arctic may have implications for toxicological effects that are not yet understood. For example, oil spills on permafrost may persist in an ecosystem for relatively long periods of time, potentially harming plant life through their root systems. Moreover, little is known about the effects of oil spills on species that are unique to the Arctic, particularly, species' abilities to thrive in a cold environment and the effect temperature has on toxicity.", "The effects of oil spills in high-latitude, cold-ocean environments may last longer and cause greater damage than expected. Some recent studies have found that oil spills in lower latitudes have persisted for longer than initially expected, thus raising the concern that the persistence of oil in the Arctic may be understated. In terms of wildlife, population recovery may take longer in the Arctic because many of the species have longer life spans and reproduce at a slower rate."], "subsections": []}]}, {"section_title": "Response and Cleanup Challenges in the Arctic Region", "paragraphs": ["Climate changes in the Arctic are expected to increase human activities in the region, many of which impose a risk of oil pollution, particularly from oil spills. Conditions in the Arctic region impose unique challenges for personnel charged with (1) oil spill response, the process of getting people and equipment to the incident, and (2) cleanup duties, either recovering the spilled oil or mitigating the contamination so that it poses less harm to the ecosystem. These challenges may play a role in the policy development for economic activities in the Arctic."], "subsections": [{"section_title": "Spill Response Challenges", "paragraphs": ["Response time is a critical factor for oil spill recovery. With each hour, spilled oil becomes more difficult to track, contain, and recover, particularly in icy conditions, where oil can migrate under or mix with surrounding ice. Most response techniques call for quick action, which may pose logistical challenges in areas without prior staging equipment or trained response professionals. Many stakeholders are concerned about a \"response gap\" for oil spills in the Arctic region. A response gap is a period of time in which oil spill response activities would be unsafe or infeasible. The response gap for the northern Arctic latitudes is likely to be extremely high compared to other regions. ", "According to a 2014 National Research Council (NRC) report, \"the lack of infrastructure in the Arctic would be a significant liability in the event of a large oil.\" The Coast Guard has no designated air stations north of Kodiak, AK, which is almost 1,000 miles from the northernmost point of land along the Alaskan coast in Point Barrow, AK. Although some of the communities have airstrips capable of landing cargo planes, no roads connect these communities. Vessel infrastructure is also limited. The nearest major port is in the Aleutian Islands, approximately 1,300 miles from Point Barrow. Two of the major nonmechanical recovery methods\u2014in situ burning and dispersant application\u2014may be limited (or \"precluded\") by the Arctic conditions and lack of logistical support: aircraft, vessels, and other infrastructure.", "A 2010 Government Accountability Office (GAO) report identified further logistical obstacles that would hinder an oil spill response in the region, including \"inadequate\" ocean and weather information for the Arctic and technological problems with communications. A 2014 GAO report highlighted steps taken by some groups (e.g., the National Oceanic and Atmospheric Administration) to improve some of these logistical elements. "], "subsections": []}, {"section_title": "Oil Spill Cleanup Challenges", "paragraphs": ["The history of oil spill response in the Aleutian Islands highlights the challenges and concerns for potential spills in the Arctic region: ", "The past 20 years of data on response to spills in the Aleutians has also shown that almost no oil has been recovered during events where attempts have been made by the responsible parties or government agencies, and that in many cases, weather and other conditions have prevented any response at all.", "The behavior of oil spills in cold and icy waters is not as well understood as oil spills in more temperate climates. The 2014 NRC report highlights some recent advancements in understanding oil spill behavior in arctic climates. At the same time, the report recommends further study in multiple areas.", "The 2014 NRC report states that in colder water temperatures or sea ice, \"the processes that control oil weathering\u2014such as spreading, evaporation, photo-oxidation, emulsification, and natural dispersion\u2014are slowed down or eliminated for extended periods of time.\" In some respects, the slower weathering processes may provide more time for response strategies, such as in situ burning or skimming. On the other hand, the longer the oil remains in an ecosystem, the more opportunity there is for exposure.", "In addition, the 2014 report states the following:", "Arctic conditions impose many challenges for oil spill response\u2014low temperatures and extended periods of darkness in the winter, oil that is encapsulated under ice or trapped in ridges and leads, oil spreading due to sea ice drift and surface currents, reduced effectiveness of conventional containment and recovery systems in measurable ice concentrations, and issues of life and safety of responders."], "subsections": []}, {"section_title": "Existing Policy Framework", "paragraphs": ["Considering both the recent increase in human activity in the region (and expectation of further interest) and the response and recovery challenges that an oil spill would impose in Arctic waters, many would assert that the region warrants particular attention in terms of governance. However, the existing framework for international governance of maritime operations in the Arctic region lacks legally binding requirements. While the Safety of Life at Sea Convention (SOLAS) and other International Maritime Organization (IMO) conventions include provisions regarding ships in icy waters, the provisions are not specific to the polar regions. Although the IMO has \"Guidelines for Ships Operating in Arctic,\" a 2009 NOAA report described the nonbinding IMO provisions as \"inconsistent with the hazards of Arctic navigation and the potential for environmental damage from such an incident.\"", "In 2013, the member states of the Arctic Council signed an Agreement on Cooperation on Marine Oil Pollution Preparedness and Response in the Arctic. The agreement's objective is to \"strengthen cooperation, coordination, and mutual assistance ... on oil pollution preparedness and response in the Arctic.\" ", "In addition, the United States has separate bilateral agreements with Canada and Russia that address oil spill response operations. The agreement with Canada was established in 1974 for the Great Lakes and has been amended several times to add more geographic areas, including Arctic waters. According to the 2014 NRC report: \"Formal contingency planning and exercises with Canada have enabled both the United States and Canada to refine procedures and legal requirements for cross-border movement of technical experts and equipment in the event of an emergency.\" ", "The U.S.-Russian agreement was made in 1989 and applies to oil spills in Arctic waters. However, the 2014 NRC report asserts that the agreement has not been tested to the same extent as the U.S.-Canada agreement."], "subsections": []}]}]}, {"section_title": "Fisheries171", "paragraphs": ["The effects of climate change such as increasing sea surface temperatures and decreasing permanent sea ice are altering the composition of marine ecosystems in the Arctic. These changes are likely to affect the ranges and productivity of living marine resources including species that support marine fisheries. Furthermore, as a greater portion of the waters in the central Arctic Ocean become open for longer periods, the region's resources will become more accessible to commercial fishing. Large commercial fisheries already exist in the Arctic, including in the Barents and Norwegian Seas north of Europe, the Central North Atlantic off Greenland and Iceland, the Bering Sea off Russia and the United States (Alaska), and the Newfoundland and Labrador Seas off northeastern Canada. As environmental changes occur, fisheries managers will be challenged to adjust management measures for existing fisheries. Uncertainties related to these changes and potential new fisheries in the central Arctic Ocean have prompted many fishery managers to support precautionary approaches to fisheries management in the region. ", "On June 1, 2008, Congress passed a joint resolution ( P.L. 110-243 ) that directed \"the United States to initiate international discussions and take necessary steps with other nations to negotiate an agreement for managing migratory and transboundary fish stocks in the Arctic Ocean.\" The joint resolution also supported establishment of a new international fisheries management organization or organizations for the region. International cooperation is necessary to manage Arctic resources because fish stocks are shared to some degree among the five adjacent jurisdictional zones of the Arctic rim nations. Further, a large portion of the central Arctic Ocean lies outside the Exclusive Economic Zones (EEZ) of these nations. Ideally, regional management would recognize the need to coordinate management for those fish populations that move among these national jurisdictional zones and high seas.", "For waters under U.S. jurisdiction, in 2009, the National Marine Fisheries Service in the Department of Commerce's National Oceanic and Atmospheric Administration implemented the North Pacific Council's Fishery Management Plan for Fish Resources of the Arctic Management Area. The management area includes marine waters in the U.S. EEZ of the Chukchi and Beaufort Seas. The plan initially prohibits commercial fishing in the Arctic Management Area and moves the northern boundary of the Bering Sea/Aleutian Islands king and tanner crab fishery management plan out of the Arctic Management Area south to the Bering Strait. The plan takes a precautionary approach by requiring the collection of more information before developing commercial fisheries in the region. ", "On July 16, 2015, the five nations that surround the Arctic Ocean signed a declaration to prevent unregulated commercial fishing in the high seas portion of the central Arctic Ocean. The five nations agree that a precautionary approach to fishing is needed because there is limited scientific knowledge of marine resources in the region. Currently, there is no commercial fishing in central Arctic Ocean and it is questionable whether existing fisheries resources could sustain a fishery. The declaration includes the following interim measures:", "to authorize our vessels to conduct commercial fishing in the high seas area only pursuant to one or more marine regional or subregional fisheries management organizations or arrangements that are or may be established to manage such fishing in accordance with recognized international standards; to establish a joint program of scientific research with the aim of improving understanding of the ecosystems of this area and promote cooperation with relevant scientific bodies; to promote compliance with these interim measures and with relevant international law, including by coordinating our monitoring, control, and surveillance activities in this area; and to ensure that any noncommercial fishing in this area does not undermine the purpose of the interim measures, is based on scientific advice and is monitored, and that data obtained through any such fishing is shared.", "The declaration also recognizes the interests of indigenous peoples and the need to encourage other countries to take actions that are consistent with the interim measures. It appears that future management arrangements may include China, the EU, Iceland, Japan, and South Korea. Iceland has stated it regrets that although it has repeatedly asked to participate in the collaboration, the five states decided to keep Iceland outside consultations on the declaration. It remains an open question as to whether an Arctic Ocean regional fishery management organization will be established, which countries would be included in such an arrangement, and if commercial fisheries will be developed in the central Arctic Ocean."], "subsections": []}, {"section_title": "Protected Species177", "paragraphs": ["Concern over development of the Arctic relates to how such development might affect threatened and endangered species. Under the Endangered Species Act (ESA, 16 U.S.C. \u00a7\u00a71531-1543), the polar bear was listed as threatened on May 15, 2008. The failure by the Fish and Wildlife Service (FWS) to make a 90-day finding on a 2008 petition to list Pacific walrus led to submission of 60-days' notice of a future citizen suit. However, eventually walruses were listed as candidate species under ESA; this status means that federal agencies carrying out actions that may affect the species must confer with FWS though they are not necessarily obliged to modify their actions. Both polar bears and walruses are heavily dependent during their life cycles on thick sea ice, making them especially susceptible to the shrinking Arctic ice cap. ", "On December 30, 2008, the National Marine Fisheries Service (NMFS) determined that a listing of ribbon seal as threatened or endangered was not warranted. On October 22, 2010, NMFS listed the southern distinct population segment (DPS) of spotted seals as threatened. Listing of two other DPS (Okhotsk and Bering Sea) had earlier been determined to not be warranted. On December 10, 2010, NMFS proposed that (1) four subspecies of ringed seal be listed as threatened, and (2) that two DPS of one subspecies of bearded seal be listed as threatened.", "In either terrestrial or marine environments, the extreme pace of change makes a biological response many times more difficult. For species with adaptations for a specific optimum temperature for egg development, or production of young timed to match the availability of a favored prey species, or seed dispersal in predictable fire regimes, etc., evolutionary responses may well not keep pace with the rate of change. While species of plants and animals farther south might migrate, drift, or be transplanted from warming habitats to more northerly sites that may continue to be suitable, once a terrestrial species reaches the Arctic Ocean, it is very literally at the end of the line. No more northern or colder habitat is available.", "The Marine Mammal Protection Act (MMPA; 16 U.S.C. \u00a7\u00a71361 et seq.) protects whales, seals, walruses, and polar bears. The MMPA established a moratorium on the \"taking\" of marine mammals in U.S. waters and by U.S. nationals on the high seas, including the Arctic. The MMPA protects marine mammals from \"clubbing, mutilation, poisoning, capture in nets, and other human actions that lead to extinction.\" Under the MMPA, the Secretary of Commerce, acting through National Marine Fisheries Service, is responsible for the conservation and management of whales and seals. The Secretary of the Interior, acting through the Fish and Wildlife Service, is responsible for walruses and polar bears. Despite the MMPA's general moratorium on taking, the MMPA allows U.S. citizens to apply for and obtain authorization for taking small numbers of mammals incidental to activities other than commercial fishing (e.g., offshore oil and gas exploration and development) if the taking would have only a negligible impact on any marine mammal species or stock, provided that monitoring requirements and other conditions are met."], "subsections": []}, {"section_title": "Indigenous People Living in the Arctic187", "paragraphs": ["People have been living in the Arctic for thousands of years, and indigenous peoples developed highly specialized cultures and economies based on the physical and biological conditions of the long-isolated region. However, with trade, the influx of additional populations especially since the 19 th century, and ongoing physical changes in the Arctic, indigenous populations have already experienced substantial change in their lifestyles and economies. Over the past two decades, greater political organization across indigenous populations has increased their demands for international recognition and broader rights, as well as attention to the economic, health, and safety implications of climate change in the North."], "subsections": [{"section_title": "Background", "paragraphs": ["Seven of the eight Arctic nations have indigenous peoples, whose predecessors were present in parts of the Arctic over 10,000 years ago, well before the arrival of peoples with European backgrounds. Current Arctic indigenous peoples comprise dozens of diverse cultures and speak dozens of languages from eight or more non-Indo-European language families. ", "Before the arrival of Europeans, Arctic indigenous peoples lived in economies that were chiefly dependent, in varying proportions, on hunting land and marine mammals, catching salt- and fresh-water fish, herding reindeer (in Eurasia), and gathering, for their food, clothing, and other products. Indigenous peoples' interaction with and knowledge of Arctic wildlife and environments has developed over millennia and is the foundation of their cultures.", "The length of time that Arctic indigenous peoples were in contact with Europeans varied across the Arctic. As recorded by Europeans, contact began as early as the 9 th century CE, if not before, in Fennoscandia and northwestern Russia, chiefly for reasons of commerce (especially furs); it progressed mostly west-to-east across northern Asia, reaching northeastern Arctic Asia by the 17 th century. North American Arctic indigenous peoples' contact with Europeans started in Labrador in the 16 th century and in Alaska in the 18 th century, and was not completed until the early 20 th century. Greenland's indigenous peoples first saw European-origin peoples in the late 10 th century, but those Europeans died out during the 15 th or 16 th century and Europeans did not return permanently until the 18 th century. ", "Contact led to significant changes in Arctic indigenous economies, political structures, foods, cultures, and populations, starting especially in the 20 th century. For example, life expectancy among Alaska Natives has increased from 47 years in 1950 to over 69 years in 2000 (though it still lags behind that of U.S. residents overall, at 77 years). ", "Also, at present, most Arctic indigenous peoples have become minorities in their countries' Arctic areas, except in Greenland and Canada. (One source estimates that, around 2003, about 10% of an estimated 3.7 million people in the Arctic were indigenous.) While many Arctic indigenous communities remain heavily dependent on hunting, fishing, and herding and are more likely to depend on traditional foods than nonindigenous Arctic inhabitants, there is much variation. Most Arctic indigenous people may no longer consume traditional foods as their chief sources of energy and nutrition. Major economic change is also relatively recent but ongoing. Many Arctic indigenous communities have developed a mixture of traditional economic activities and wage employment. The economics of subsistence and globalization will be key factors in the effects of climate change on Arctic indigenous peoples, and on their reactions to Arctic climate change. ", "Arctic indigenous peoples' current political structures vary, as do their relationships with their national governments. Some indigenous groups govern their own unique land areas within the national structure, as in the United States and Canada; others have special representative bodies, such as the Saami parliaments in Norway, Finland, and Sweden; a few areas have general governments with indigenous majorities, such as Greenland (a member country of Denmark), Nunavut territory in Canada, and the North Slope and Northwest Arctic boroughs in Alaska. Control of land, through claims and ownership, also varies among Arctic indigenous peoples, as do rights to fishing, hunting, and resources. Arctic indigenous peoples' political relationships to their national and local governments, and their ownership or claims regarding land, are also significant factors in the responses to Arctic climate change by the indigenous peoples and by Arctic nations' governments. "], "subsections": []}, {"section_title": "Effects of Climate Change", "paragraphs": ["Arctic climate change is expected to affect the economies, population, subsistence, health, infrastructure, societies, and cultures of Arctic indigenous peoples. Changes in sea ice and sea level, permafrost, tundra, weather, and vegetation distributions, as well as increased commercial shipping, mineral extraction, and tourism, will affect the distribution of land and sea mammals, of freshwater and marine fish, and of forage for reindeer. These will in turn affect traditional subsistence activities and related indigenous lifestyles. Arctic indigenous peoples' harvesting of animals is likely to become riskier and less predictable, which may increase food insecurity, change diets, and increase dependency on outside, nontraditional foods. Food cellars in many locations have thawed during summers, threatening food safety. Related health risks of diabetes, obesity, and mental illness have been associated with these changes. ", "Sea, shoreline ice, and permafrost changes have damaged infrastructure and increased coastal and inland erosion, especially in Alaska, where GAO found in 2003 that \"coastal villages are becoming more susceptible to flooding and erosion caused in part by rising temperatures.\" In response, Congress funded the U.S. Army Corps of Engineers to conduct a Baseline Erosion Assessment that identified and prioritized among the 178 communities identified at risk from erosion. (Risks from flooding were not examined.) GAO concluded in 2009 that many Native villages must relocate, but even those facing imminent threats have been impeded by various barriers, including difficulties identifying appropriate new sites, piecemeal programs for state and federal assistance, and obstacles to eligibility for certain federal programs. The Alaska Federation of Natives placed among its 2010 federal priorities a request to Congress to mitigate flooding and erosion in Alaska Native villages and to fund relocation of villages where necessary. However, \"the cost is extraordinary,\" acknowledges Senator Lisa Murkowski.", "Oil, gas, and mineral exploration and development are expected to increase, as are other economic activities, such as forestry and tourism, and these are expected to increase economic opportunities for all Arctic residents, including indigenous peoples. Pressures to increase participation in the wage economy, however, may speed up changes in indigenous cultures. Increased economic opportunities may also lead to a rise in the nonindigenous population, which may further change the circumstances of indigenous cultures. Some representatives of Arctic indigenous people have related a \"conflicting desire between combating climate change and embracing the potential for economic growth through foreign investment.\"", "Although important advances in public health have occurred in indigenous communities over past decades, some health problems may increase with continued Arctic climate change. Economic development may exacerbate Arctic pollution problems, including higher exposure to mercury, air pollution, and food contamination. The influx and redistribution of contaminants in the air, oceans, and land may change in ways that are now poorly understood. Warmer temperatures and longer warm seasons may increase insect- and wildlife-borne diseases. Climate change may lead to damage to water and sanitation systems, reducing protection against waterborne diseases. Changes in Arctic indigenous cultures may increase mental stress and behavioral problems. ", "The response to climate change by Arctic indigenous peoples has included international activities by Arctic indigenous organizations and advocacy before their national governments. As one report noted, \"the rise of solidarity among indigenous peoples organizations in the region is surely a development to be reckoned with by all those interested in policy issues in the Arctic.\" Six national or international indigenous organizations are permanent participants of the Arctic Council, the regional intergovernmental forum. Due in part to advocacy by Arctic indigenous people, the United Nations General Assembly adopted in 2007 the Declaration on the Rights of Indigenous Peoples. In April 2009, the Inuit Circumpolar Council (an organization of Inuit in the Arctic regions of Alaska, Canada, Greenland, and Russia) hosted in Alaska the worldwide \"Indigenous Peoples Global Summit on Climate Change.\" The conference report, forwarded to the Copenhagen Conference of the Parties of the U.N. Framework Convention on Climate Change (December 2009), noted \"accelerating\" climate change caused by \"unsustainable development\" and, among several recommendations, called for a greater indigenous role in national and international decisions on climate change, including a greater role for indigenous knowledge in climate change research, monitoring, and mitigation."], "subsections": []}]}, {"section_title": "Polar Icebreaking225", "paragraphs": [], "subsections": [{"section_title": "Polar Icebreaker Operations", "paragraphs": ["Within the U.S. government, the Coast Guard is the U.S. agency responsible for polar icebreaking. U.S. polar ice operations conducted in large part by the Coast Guard's polar icebreakers support nine of the Coast Guard's 11 statutory missions. The roles of U.S. polar icebreakers can be summarized as follows:", "conducting and supporting scientific research in the Arctic and Antarctic; defending U.S. sovereignty in the Arctic by helping to maintain a U.S. presence in U.S. territorial waters in the region; defending other U.S. interests in polar regions, including economic interests in waters that are within the U.S. exclusive economic zone (EEZ) north of Alaska; monitoring sea traffic in the Arctic, including ships bound for the United States; and conducting other typical Coast Guard missions (such as search and rescue, law enforcement, and protection of marine resources) in Arctic waters, including U.S. territorial waters north of Alaska.", "The Coast Guard's large icebreakers are called polar icebreakers rather than Arctic icebreakers because they perform missions in both the Arctic and Antarctic. Operations to support National Science Foundation (NSF) research activities in both polar regions account for a significant portion of U.S. polar icebreaker operations.", "Supporting NSF research in the Antarctic focuses on performing an annual mission, called Operation Deep Freeze (ODF), to break through Antarctic sea ice so as to reach and resupply McMurdo Station, the large U.S. Antarctic research station located on the shore of McMurdo Sound, near the Ross Ice Shelf. The Coast Guard states that Polar Star , the Coast Guard's only currently operational heavy polar icebreaker, \"spends the [northern hemisphere] winter [i.e., the southern hemisphere summer] breaking ice near Antarctica in order to refuel and resupply McMurdo Station. When the mission is complete, the Polar Star returns to dry dock [in Seattle] in order to complete critical maintenance and prepare it for the next ODF mission. Once out of dry dock, it's back to Antarctica, and the cycle repeats itself.\" In terms of the maximum thickness of the ice to be broken, the annual McMurdo resupply mission generally poses the greatest icebreaking challenge for U.S. polar icebreakers, though Arctic ice can frequently pose its own significant icebreaking challenges for U.S. polar icebreakers. The Coast Guard's medium polar icebreaker, Healy , spends most of its operational time in the Arctic supporting NSF research activities and performing other operations.", "Although polar ice is diminishing due to climate change, observers generally expect that this development will not eliminate the need for U.S. polar icebreakers, and in some respects might increase mission demands for them. Even with the diminishment of polar ice, there are still significant ice-covered areas in the polar regions, and diminishment of polar ice could lead in coming years to increased commercial ship, cruise ship, and naval surface ship operations, as well as increased exploration for oil and other resources, in the Arctic\u2014activities that could require increased levels of support from polar icebreakers, particularly since waters described as \"ice free\" can actually still have some amount of ice. Changing ice conditions in Antarctic waters have made the McMurdo resupply mission more challenging since 2000."], "subsections": []}, {"section_title": "Current Polar Icebreaker Fleet", "paragraphs": ["The operational U.S. polar icebreaking fleet currently consists of one heavy polar icebreaker, Polar Star , and one medium polar icebreaker, Healy . In addition to Polar Star , the Coast Guard has a second heavy polar icebreaker, Polar Sea . Polar Sea , however, suffered an engine casualty in June 2010 and has been nonoperational since then. Polar Star and Polar Sea entered service in 1976 and 1978, respectively, and are now well beyond their originally intended 30-year service lives. The Coast Guard has used Polar Sea as a source of spare parts for keeping Polar Star operational."], "subsections": []}, {"section_title": "Polar Security Cutter (PSC) Program", "paragraphs": ["A Department of Homeland Security (DHS) Mission Need Statement (MNS) approved in June 2013 states that \"current requirements and future projections ... indicate the Coast Guard will need to expand its icebreaking capacity, potentially requiring a fleet of up to six icebreakers (3 heavy and 3 medium) to adequately meet mission demands in the high latitudes....\"", "The Coast Guard initiated in its FY2013 budget a program to acquire three new heavy polar icebreakers, to be followed by the acquisition of up to three new medium polar icebreakers. The program was originally referred to as the polar icebreaker program but is now referred to as the Polar Security Cutter (PSC) program. The Coast Guard wants to begin construction of the first new heavy polar icebreaker in FY2019 and have it enter service in 2023. ", "The acquisition cost of a new heavy polar icebreaker had earlier been estimated informally at roughly $1 billion, but the Coast Guard and Navy now believe that three heavy polar icebreakers could be acquired for a total cost of about $2.1 billion, or an average of about $700 million per ship. The first ship will cost more than the other two because it will incorporate design costs for the class and be at the start of the production learning curve for the class.", "The PSC program received about $359.6 million in procurement funding through FY2018, including $300 million provided through the Navy's shipbuilding account (which is part of the Department of Defense's budget) and $59.6 million provided through the Coast Guard's procurement account (which is part of the Department of Homeland Security's [DHS's] budget). The FY2019 DHS appropriations act (Division A of H.J.Res 31 / P.L. 116-6 of February 15, 2019) provides an additional $675 million for the PSC program through the Coast Guard's procurement account, including $20 million for the procurement of long leadtime materials (LLTM) for the second ship in the program.", "The PSC program has thus received a total of $1,034.6 million (i.e., about $1.0 billion) in procurement funding through FY2019. Excluding the $20 million provided for the procurement of LLTM for the second ship in the program, the remaining total of $1,014.6 million appears to be enough (or perhaps more than enough) to fully fund the design and construction of the first ship in the program while also funding FY2019 and prior-year program administrative expenses. The Coast Guard's FY2019 five-year (FY2019-FY2023) Capital Investment Plan (CIP) projected that the Coast Guard's FY2020 budget would request an additional $125 million in FY2020 procurement funding for the PSC program, most of which would presumably be used as a second increment of procurement funding for the second ship in the class.", "Issues for Congress for the PSC program include, inter alia, whether to approve, reject, or modify the Coast Guard's annual procurement funding requests for the program; whether to use a contract with options or a block buy contract to procure the ships; whether to continue providing at least some of the procurement funding for the PSC program through the Navy's shipbuilding account; technical, schedule, and cost risk in the PSC program; and whether to procure heavy and medium polar icebreakers to a common basic design."], "subsections": []}]}, {"section_title": "Search and Rescue (SAR)233", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["Increasing\u00a0sea and air traffic through\u00a0Arctic waters has increased concerns regarding Arctic-area search and rescue (SAR) capabilities. Table 1 presents figures on ship casualties in Arctic Circle waters from 2005 to 2014, as shown in the 2015 edition of an annual report on shipping and safety by the insurance company Allianz Global Corporate & Specialty.", "Given the location of current U.S. Coast Guard operating bases, it could take Coast Guard aircraft several hours, and\u00a0Coast Guard cutters days or even weeks, to reach a ship in distress or a downed aircraft in\u00a0Arctic waters. In addition, the harsh climate complicates SAR operations in the region. Particular concern has been expressed about cruise\u00a0ships carrying large numbers of civilian passengers that may experience problems and need assistance. There have already been incidents of this kind with cruise ships in recent years in waters off Antarctica, and a Russian-flagged passenger ship with 162 people on board ran aground on Canada's Northwest Passage on August 24, 2018. Coast Guard officials have noted the long times that would be needed to respond to potential emergency situations in certain parts the Arctic. The Coast Guard is participating in exercises focused on improving Arctic SAR capabilities.", "Increasing U.S. Coast Guard SAR capabilities for the Arctic could require\u00a0one or more of the following: enhancing or creating new Coast Guard operating bases in the region; procuring additional Arctic-capable aircraft, cutters, and rescue boats for the Coast Guard; and adding systems to improve Arctic maritime communications, navigation, and domain awareness. It may also entail enhanced forms of cooperation with navies and coast guards of other Arctic countries."], "subsections": []}, {"section_title": "2017 Arctic SAR Capabilities Survey", "paragraphs": ["A 2017 survey of Arctic SAR capabilities conducted as part of the Finnish Border Guard's Arctic Maritime Safety Cooperation project in cooperation with the Arctic Coast Guard Forum stated the following:", "The key challenges for Arctic search and rescue identified in this survey include long distances, severe weather, ice and cold conditions, a poor communications network, lack of infrastructure and lack of resource presence in the region. In addition, the capacity to host patients, achieving situational awareness, and unsuitable evacuation and survival equipment pose major challenges for maritime safety and SAR in the Arctic.", "The Arctic SAR authorities have recognized a need to further develop advanced information sharing between coast guards, emergency authorities, and other stakeholders involved in SAR operations. In addition, joint training and systematic sharing of lessons learned, as well as technological innovation in communications networks and connections, navigation, survival and rescue equipment, and healthcare services are being called for in order to improve SAR capabilities in the Arctic.", "The survey recommends enhancing practical cooperation between various stakeholders involved in Arctic SAR such as coast guards, rescue centers, other authorities, industry groups, private operators, academia and volunteer organizations. It encourages further information sharing on infrastructure projects and resource assets, Automatic Identification System and weather data, emergency plans and standard operating procedures, as well as exercises and lessons learned via a common database. Furthermore, developing joint courses specifically intended for Arctic SAR and establishing a working group that examines new innovations and technological developments, are recommended as potential initiatives for improving practical international cooperation."], "subsections": []}, {"section_title": "May 2011 Arctic Council Agreement on Arctic SAR", "paragraphs": ["On May 12, 2011, representatives from the member states of the Arctic Council, meeting in Nuuk, Greenland, signed an agreement on cooperation on aeronautical and maritime SAR in the Arctic. Key features of the agreement include the following:", "Article 3 and the associated Annex to the agreement essentially divide the Arctic into SAR areas within which each party has primary responsibility for conducting SAR operations, stating that \"the delimitation of search and rescue regions is not related to and shall not prejudice the delimitation of any boundary between States or their sovereignty, sovereign rights or jurisdiction,\" and that \"each Party shall promote the establishment, operation and maintenance of an adequate and effective search and rescue capability within its area.\" Article 4 and the associated Appendix I to the agreement identify the competent authority for each party. For the United States, the competent authority is the Coast Guard. Article 5 and the associated Appendix II to the agreement identify the agencies responsible for aeronautical and maritime SAR for each party. For the United States, those agencies are the Coast Guard and the Department of Defense. Article 6 and the associated Appendix III to the agreement identify the aeronautical and/or maritime rescue coordination centers (RCCs) for each party. For the United States, the RCCs are Joint Rescue Coordination Center Juneau (JRCC Juneau) and Aviation Rescue Coordination Center Elmendorf (ARCC Elmendorf). Article 12 states that \"unless otherwise agreed, each Party shall bear its own costs deriving from its implementation of this Agreement,\" and that \"implementation of this Agreement shall be subject to the availability of relevant resources.\"", " Figure 4 shows an illustrative map of the national areas of SAR responsibility based on the geographic coordinates listed in the Annex to the agreement.", "An October 12, 2015, press report states the following:", "More people are wishing to explore icy environments, says Peter Hellberg, manager responsible for the SAR process at the Swedish Maritime Administration. Hellberg is part of an IMO/International Civil Aviation Organization (ICAO) working group that is re-evaluating search and rescue (SAR) operations in Polar waters as a result of this push.", "The working group includes both a maritime and aeronautical perspective, and it has identified a need for more detailed guidance for SAR organizations which will be achieved through an update of the International Aeronautical and Maritime Search and Rescue Manual (IAMSAR) planned for 2019. ", "While the IAMSAR manual is not mandatory, it is followed by most SAR organizations around the world. It provides the framework for setting up a multi-national SAR, giving different parties guidance on the necessary arrangements for Arctic areas. ", "The guidance will be expanded on based on the Polar Code and other recent IMO regulatory updates, and from an aeronautical perspective, from lessons learned after the disappearance of Malaysian Airlines' MH370."], "subsections": [{"section_title": "John S. McCain National Defense Authorization Act for Fiscal Year 2019 (H.R. 5515/S. 2987)", "paragraphs": ["The Senate Armed Services Committee, in its report ( S.Rept. 115-262 of June 5, 2018) on S. 2987 , states the following:", "Arctic search and rescue", "The committee is aware that growing international interest and changing environmental conditions in the Arctic have led to increased commercial and governmental activity in the High North. With this steady surge, the committee remains concerned by the limited capabilities of the United States to conduct search-and-rescue operations throughout the Arctic region. The committee notes that the Department of Defense's Report to Congress on Strategy to Protect United States National Security Interests in the Arctic Region, a report required in section 1068 of the National Defense Authorization Act for Fiscal Year 2016 (Public-Law 114\u201392), identified the need for additional personnel recovery capability in this region. Specifically, the report calls for \"forward-deployed/based assets in a sustainable location and/or rapidly deployable air drop response/sustainment packages suitable to remote land, cold water, or ice pack operating environments.\" (Pages 139-140)", "The committee understands that the 176th Wing of the Alaska National Guard is the closest dedicated response force with the only refueling capability to respond to a search-and-rescue incident in the Arctic. The unit currently possesses two air-dropped, palletized Arctic Sustainment Packages (ASPs) to enable the survival of 50 individuals for 3 or more days in extreme Arctic conditions. The ASP is rapidly deployable over varied terrain, and allows personnel to survive and operate in the High North. Each ASP requires considerable resources for sustainability, demanding 500 man-hours to re-pack ASPs after testing and to continually keep contents viable. In light of the increased activity in this region, the committee believes that this capability could benefit from additional sustainment funding to maintain the two existing ASPs, and encourages the Secretary of Defense to prioritize its resourcing. (Pages 139-140)"], "subsections": []}]}]}, {"section_title": "Geopolitical Environment242", "paragraphs": [], "subsections": [{"section_title": "Shift to Era of Renewed Great Power Competition", "paragraphs": ["A principal factor affecting the geopolitical environment for the Arctic is the shift that has occurred in recent years from the post-Cold War era that began in the late 1980s and early 1990s, also sometimes known as the unipolar moment (with the United States as the unipolar power), to a new and different international security environment that features, among other things, renewed great power competition with China and Russia and challenges by these two countries and others to elements of the U.S.-led international order that has operated since World War II. This shift in the international security environment, combined with the diminishment of Arctic ice and the resulting increase in human activities in the Arctic, has several potential implications for the geopolitical environment for the Arctic, which are discussed in the following sections."], "subsections": []}, {"section_title": "Arctic Tradition of Cooperation and Low Tensions", "paragraphs": ["The shift in the international security environment has raised a basic question as to whether the Arctic in coming years will continue to be a region generally characterized by cooperation and low tensions, as it was during the post-Cold War era, or instead become a region characterized at least in part by competition and increased tensions, as it was during the Cold War. In this regard, the shift in the international security environment poses a potential challenge to the tradition of cooperation, low tensions, peaceful resolution of disputes, and respect for international law that has characterized the approach used by the Arctic states, particularly since the founding of the Arctic Council in 1996, for managing Arctic issues.", "Some observers argue that the Arctic states and other Arctic stakeholders should attempt to maintain the region's tradition of cooperation and low tensions, and work to prevent the competition and tensions that have emerged in Europe, Asia, and elsewhere in recent years from crossing over into the Arctic. These observers argue that the Arctic tradition of cooperation and low tensions has proven successful in promoting the interests of the Arctic states and other Arctic stakeholders on a range of issues, that it has served as a useful model for other parts of the world to follow, and that in light of tensions and competition elsewhere in the world, this model is needed more now than ever.", "Other observers could argue that, notwithstanding the efforts of Arctic states and other Arctic stakeholders to maintain the Arctic as a region of cooperation and low tensions, it is unreasonable to expect that the Arctic can be kept fully isolated from the competition and tensions that have arisen in other parts of the world. As a consequence, these observers could argue, the Arctic states and other Arctic stakeholders should begin taking steps to prepare for increased competition and higher tensions in the Arctic, precisely so that Arctic issues can continue to be resolved as successfully as conditions may permit, even in a situation of competition and increased tensions.", "Still other observers might argue that a policy of attempting to maintain the Arctic as a region of cooperation and low tensions, though well-intentioned, could actually help encourage aggressive behavior by Russia or China in other parts of the world by giving those two countries confidence that their aggressive behavior in other parts of the world would not result in punitive costs being imposed on them in the Arctic. These observers might argue that maintaining the Arctic as a region of cooperation and low tensions in spite of aggressive Russian or Chinese actions elsewhere could help legitimize those aggressive actions and provide little support to peaceful countries elsewhere that might be attempting to resist them. This, they could argue, could facilitate a divide-and-conquer strategy by Russia or China in their relations with other countries, which in the long run could leave Arctic states with fewer allies and partners in other parts of the world for resisting unwanted Russian or Chinese actions in the Arctic.", "Still others might argue that there is merit in some or all of the above perspectives, and that the challenge is to devise an approach that best mixes the potential strengths of each perspective."], "subsections": []}, {"section_title": "Arctic Governance", "paragraphs": [], "subsections": [{"section_title": "Spotlight on Arctic Governance and Limits of Arctic Council", "paragraphs": ["The shift in the international security environment to a situation of renewed great power competition may put more of a spotlight on the issue of Arctic governance and the limits of the Arctic Council as a governing body. As noted earlier in this report, regarding the limits of the Arctic Council as a governing body, the council states that it \"does not and cannot implement or enforce its guidelines, assessments or recommendations. That responsibility belongs to each individual Arctic State.\" In addition, the council states that \"the Arctic Council's mandate, as articulated in the [1996] Ottawa Declaration [establishing the Council], explicitly excludes military security.\"", "During the post-Cold War era\u2014the period when the Arctic Council was established and began operating\u2014the limits of the Arctic Council as a governing body may have been less evident or problematic, due to the post-Cold War era's general situation of lower tensions and reduced overt competition between the great powers. In the new situation of renewed great power competition, however, it is possible that these limits could become more evident or problematic, particularly with regard to addressing Arctic-related security issues.", "If the limits of the Arctic Council as a governing body are judged as having become more evident or problematic, one option might be to amend the rules of the council to provide for some mechanism for enforcing its guidelines, assessments, or recommendations. Another option might be to expand the council's mandate to include an ability to address military security issues. ", "Supporters of such options might argue that they could help the council adapt to the major change in the Arctic's geopolitical environment brought about the shift in the international security environment, and thereby help maintain the council's continued relevance in coming years. They might also argue that continuing to exclude military security from the council's mandate risks either leaving Arctic military security issues unaddressed, or shifting them to a different forum that might have traditions weaker than those of the Arctic Council for resolving disputes peacefully and with respect for international law.", "Opponents of such options might argue that they could put at risk council's ability to continue addressing successfully nonmilitary security issues pertaining to the Arctic. They might argue that there is little evidence to date that the council's limits as a governing body have become problematic, and that in light of the council's successes since its founding, the council should be viewed as an example of the admonition, \"if it isn't broke, don't fix it.\"", "Some relatively little-publicized multilateral discussions of Arctic security issues have taken place. For example, in mid-2011, the U.S. European Command (EUCOM), in cooperation with the Norwegian Ministry of Defense, established the Arctic Security Forces Roundtable (ASFR), consisting of high-ranking military officers from the eight members of the Arctic Council, plus France, Germany, the Netherlands, and the UK. Another newly formed venue at which military leaders discuss Arctic issues is the Northern Chiefs of Defense conference, which held its first meeting in May 2012, with military representatives from the eight Arctic Council governments in attendance.", "A February 9, 2019, blog post stated", "The function of the Arctic Council has been largely defined by the form imposed upon it in the [1996] Ottawa Declaration on the Establishment of the Arctic Council. Arguably, among its most distinctive features are:", "\u2022 The inheritance of the Working Groups from the 1991 Arctic Environmental Protection Strategy;", "\u2022 A lack of legal personality as an international organisation;", "\u2022 A lack of defined financial contributions;", "\u2022 The inclusion of Indigenous representatives as Permanent Participants;", "\u2022 Its constitution as a consensus based forum; and", "\u2022 The exclusion of military security from its agenda.", "The Arctic and the global context have evolved substantially since regional cooperation was initiated over two decades ago. Therefore, it is worthwhile to ask what reforms of the Arctic Council are required given the governance needs of the contemporary political situation, yet still practicable given the constraints of path dependence.", "The Arctic Council itself has recognized the need to reassess its form to allow for improved function. Most recently, the 2017 Fairbanks Declaration saw the Arctic States", "Recognize that the Arctic Council continues to evolve, responding to new opportunities and challenges in the Arctic, and instruct the Senior Arctic Officials to develop a strategic plan based on the Arctic Council's foundational documents and subsidiary body strategies and guiding documents, for approval by Ministers in 2019.", "It is in this context that we submit for consideration an analysis of what works well in the Arctic Council, where there are inadequacies, and what role it can most effectively play in Arctic politics\u2026.", "Although the Arctic Council has a good foundation, it is constrained in significant ways. The first of these is funding. While the Arctic Council Secretariat seems adequately funded (1.24 million USD in 2017, with Norway contributing half), it has very little discretionary funding. Similarly, the Working Groups rely on one or two states to fund a secretariat but have limited ongoing project funds. Almost all activities are funded on an ad hoc basis by the states who advocated for them and by individual experts who secure their own funding through national channels. Thus, all too often it is funding that drives projects, not projects that drive funding\u2026.", "While the Arctic Council has made good progress on becoming more transparent in recent years through its open access archive, it still struggles to be accountable to stakeholders, northerners, and taxpayers.\u2026", "There has been perennial confusion about the role and relationship of Observers, especially with regard to non-Arctic states\u2026.", "Related to this is the rather muted role of northern regional governments such as Alaska, Greenland, the Canadian territories, northern Nordic municipalities, and Russian Arctic okrugs, republics, krais, and oblasts\u2026.", "Respecting sustainable development, it would be difficult to argue that the Arctic Council has had a broad impact.\u2026 in practice environmental protection has received the lion's share of attention, resources and outcomes. Education, health services, and local infrastructure\u2014the fundamentals of developmen\u2014are expensive public services that the Arctic Council has neither the funding nor the mandate to address. Development in the Arctic has a local and subnational nature that any international-level organization is unsuited to address.\u2026", "With regards to economic development, the very topic was relatively taboo in regional politics until recent years, as it was synonymous in the Arctic with resource exploitation. Efforts to promote economic development have been mostly relegated to the Arctic Economic Council (AEC), an independent organization of business representatives facilitated by the Arctic Council in 2014. The AEC has limited capacity and its relationship with the Arctic Council\u2014participation, reporting, support, etc.\u2014remains ambiguous\u2026.", "The elephant in the room in regional Arctic politics is climate change.\u2026 the Arctic Council has no expert group, no task force, and no working group devoted exclusively to it. The frequent reluctance of American and Russian, and occasionally other, governments to openly accept and commit to mitigating climate change through reducing greenhouse gases, let alone discuss the challenges of adapting to a necessary post-petroleum future, has precluded the Council from addressing one of the major threats to sustainable development and environmental protection in the region\u2026.", "The Working Group structure was inherited from the 1991 Arctic Environmental Protection Strategy (AEPS)\u2026 [it is] a product of the particular challenges and opportunities that were becoming apparent at the time of the fall of the Soviet Union, especially regarding pollution in the Barents region and long-range transport of persistent pollutants\u2026.", "The Ottawa Declaration called on states to \"oversee and coordinate the programs established under the AEPS\"; nonetheless, as a forum, it proscribed no formal reporting structure or hierarchy. As it happened, the Working Groups have developed unique and divergent organizational designs, largely dependent on the incorporation laws of the states which host their secretariats and the amount of funding they receive. Working Groups conduct many projects and meetings, but it is difficult to measure their relative effectiveness. As mentioned, the category of Task Force was established in 2009 seemingly to provide the Arctic Council with a better means by which to advance time-sensitive, policy-oriented initiatives\u2026.", "Much has been made about the Arctic Council's lack of legal personality as an international organization; as a condition of US involvement in the 1990s, the Arctic Council was established as a consensus-based forum, not a treaty organization. States have not committed to abide by its decisions nor have they granted the organization any independent law-making authority. Thus, there are no 'votes' because no state is obliged to go along with the will of the majority of the group. The three legally binding agreements to come out of the Arctic Council are described as falling 'under its auspices'.", "There is an argument to be made that a more formal legal structure would strengthen the Arctic Council, and allow it to be more vigorous in implementing and monitoring policies such as environmental regulations. However, the informal nature of the partnership has allowed it to be flexible, accommodate the interests of different states, and adapt to varying levels of readiness to adopt and enforce new national legislation (e.g. stricter environmental regulations). Importantly, it has also allowed for the full involvement of the Permanent Participants, whereas a legal international institution would by definition exclude them from decision-making, as they have no obligations under international law.", "It is also worth noting that the Arctic Council's lack of a legal personality as an international organization has not prevented it from being involved in discussions, primarily through its Working Groups, that have led the Arctic states to enter into legally binding agreements outside of the forum's parameters\u2026.", "The Ottawa Declaration set in place the Arctic Council's two year rotating Chairmanship, which began with Canada in 1998 and ended with Sweden in 2013 before beginning the cycle anew. The short-term length has its detractors, as it has led to a lack of continuity in the Arctic Council's work\u2026.", "At the same time, the rotating Chairmanship has ensured that every state, at least periodically, becomes heavily invested in the success of the Council, and develops familiarity with the forum and its inner workings. The establishment of the permanent Secretariat in Troms\u00f8 in 2013 removed many of the most glaring issues with the rotating Chairmanship\u2026.", "Based on this assessment of the Arctic Council's strengths and weaknesses, we offer these recommendations to improve the Arctic Council's form and function as it undergoes a strategic planning process:", "1. Evaluate, and if warranted overhaul, the Working Group structure\u2026.", "2. Ensure that the Arctic Council has the appropriate capacity and resources, through a Working Group, Task Force or some other dedicated mechanism, to take on the key challenge of climate change mitigation.", "3. Address capacity issues with more stable core funding and the creation of a substantial project fund to enhance the timeliness, sustainability, and effectiveness of what are determined to be the Council's most vital activities.\u2026", "4. Limit the Arctic Council's role to functions which only it can perform, and be more comfortable devolving work and resources to more appropriate bodies as needed (as has been done with e.g. fisheries and shipping).", "5. More formally engage with sub-national governments by encouraging states to support their participation in relevant Working Groups projects.", "6. Expand the Amarok tracking tool to more comprehensively evaluate, rather than simply track, the performance and outcomes of Arctic Council projects. Avoid having reports as a project outcome in and of themselves.", "7. Embrace a knowledge transfer role, as opposed to a policy development role, on relevant issues of sustainable development, such as sanitation, local energy infrastructure, internet connectivity, economic development, cold climate technologies, and adaptation to future changes in climate and the global energy system.", "8. Continue to maintain good international relations and compartmentalize global geopolitical issues outside the Council."], "subsections": []}, {"section_title": "China and Arctic Governance", "paragraphs": ["The shift in the international security environment to a situation of renewed great power competition may put more of a spotlight on differing perspectives between China and the eight member states of the Arctic Council regarding Arctic governance. A July 6, 2018, press report states that Russia and China", "diverge on the fundamental question of who makes international law in the Arctic. For a long time, admittedly, China wasn't interested: Way back in 1925, the Nationalist government [of China] signed the critical Spitsbergen Treaty granting non-Arctic nations rights in the northern seas, [said Sun Yun, the Stimson's Center's China program director], but his Communist successors didn't actually realize they'd inherited those rights until 1991, [which was] \"a pleasant surprise.\" In the '90s, however, the eight Arctic Council nations\u2014the US, Canada, Iceland, Finland, Russia, Sweden, Norway, and Denmark, which owns Greenland\u2014set up a system of governance that largely sidelined other states. 13 countries do rate observer status on the Council, including China as of 2013 (even stranger bedfellows include Italy, India, and Singapore). But the eight voting members are generally not keen on diluting their control.", "China, by contrast, sees itself as a rising global superpower with commensurate influence everywhere on earth. It declared itself a near-Arctic state in January [2018]\u2014a term actually coined by Great Britain but not widely recognized. China wants non-Arctic nations, especially \"near-Arctic\" ones, to have greater influence and more rights in the Arctic, with binding international law based on the UN Convention on the Law of the Sea (UNCLOS) rather than the current patchwork of mostly voluntary regional arrangements. Indeed, said Sun, \"what they would like to argue is the format and the content of the Arctic governance system currently is not effective.\"", "Naturally the Russians, US, Canada, and Nordics disagree. \"The Arctic states would argue there is very little governance gap,\" said Norway-based expert Elana Wilson Rowe, as they did in 2008 when they rejected an Antarctica-style treaty regime. Though the key agreements up north are admittedly non-binding, she said, the Arctic has become \"a fairly heavily governed landscape.\"", "An October 15, 2018, blog post states that", "China's interest in the Arctic extends beyond the purely economic: it is also pressing for a greater role in its governance. Compared to the Antarctic\u2014where governance is heavily institutionalized, governance of the Arctic is much less developed, largely due to their distinctly different natures\u2026.", "The legal framework [for the Arctic] is a patchwork affair, drawn from various treaties of global application (including the UN Charter and the UN Convention on the Law of the Sea), the Svalbard Treaty(recognizing Norway's sovereignty over the eponymous Arctic archipelago), as well as customary international law and general principles of law. So far, the Arctic Council has been the forum for the conclusion of only three legally binding agreements.", "China sees a gap for new ideas, rules and participants in this space. A white paper released by the government in January [2018] contains sophisticated and detailed analysis of the international legal framework applicable to the Arctic and demonstrates China's increasing knowledge and capability in this area, as reflected in the growing number of Chinese international lawyers specializing in Arctic matters. ", "The white paper seeks to justify China's involvement in Arctic affairs as a 'near Arctic state', noting that the Arctic's climate, environment and ecology are of concern for all states. The white paper uses familiar phrases from China's vision for its foreign policy\u2014such as the 'shared future of mankind' and 'mutual benefit'\u2014to argue for a pluralist (i.e. global, regional and bilateral) approach to Arctic governance\u2026.", "\u2026 As an observer state, China has very limited rights in the council, but has been creatively using other routes to influence Arctic governance, including active engagement within the International Maritime Organization (IMO) and the International Seabed Commission. ", "China participated in the formation of the IMO's Polar Code of January 2017, which sets out rules for ships operating in polar waters. China was also one of ten states involved in the recent adoption of the Agreement to Prevent Unregulated High Seas Fisheries in the Central Arctic Ocean, which took place outside the umbrella of the Arctic Council. ", "At a recent roundtable in Beijing co-hosted by Chatham House, Chinese experts noted China's aspirations to develop the international rule of law in the Arctic through playing an active role in developing new rules in areas currently under (or un-) regulated, for example, through a treaty to strengthen environmental protection in the region. It was also suggested that China may also seek to clarify the meaning of existing rules through its own practice. ", "China also has ambitions to contribute to the research of the Arctic Council's Working Groups, which develop proposals for Arctic Council projects and rules. It remains to be seen to what extent Arctic states, protective of theirown national interests in an increasingly fertile area, will cede space for China to participate.", "China's push to be a rule shaper in the Arctic fits into a wider pattern of China seeking a more influential role in matters of global governance. This trend is particularly apparent in areas where the rules are still emerging and thus where China feels more confident than in areas traditionally dominated by Western powers.", "A similar assertiveness by China is increasingly visible in other emerging areas of international law, such as the international legal framework applicable to cyber operations and international dispute settlement mechanisms relating to trade and investment.", "China's approach to Arctic governance offers an interesting litmus test as to how far China intends to deploy international law to assert itself on governance issues with significant global economic, environmental, and security implications \u2013 along with the degree to which it will be perceived as acting in the common interest in doing so.", "A November 22, 2018, press report states", "China has become a \"rule maker\" in the global governance of the Arctic, a blue paper said Thursday, calling on the country to \"stay calm\" and respond with action in the face of the hyped-up \"China threat\" theory. ", "Jointly released by Beijing-based Social Sciences Academic Press and Qingdao-based Ocean University of China on Thursday, the blue paper said China's role in promoting global governance in the region cannot be ignored.", "In terms of global governance of the Arctic, China's role has shifted from a \"rule follower\" to a \"rule maker,\" said the blue paper.", "China has led the governance philosophy and is taking the initiative in shaping the global governance agenda in the Arctic, it stressed.", "China is a \"near-Arctic country\" geographically. The natural conditions and changes in the Arctic have a direct impact on China' s climate system and ecological environment, which in turn affects China's economic interests in the fields of agriculture, forestry, fisheries and oceans, the blue paper said. ", "Arctic countries also have concerns, of which China is aware, said the blue paper, stressing that maintaining regional security and promoting world peace has been the basic rule of China's diplomatic policies. ", "The associate editor of the blue paper, Dong Yue, who is the deputy head of the Law School of Ocean University of China, told the Global Times on Thursday that the paper's call for China to \"stay calm\" means China won't take any \"radical\" action. ", "The paper said that China holds the principle of respecting the sovereignty of Arctic states, not hurting their basic rights and guaranteeing the decision-making powers of the Arctic Council. China has been an observer member at the council since 2013. ", "The \"China threat theory\" may mean other countries will unfairly raise the threshold for Chinese enterprises to become involved in the development of the Arctic, Zhang Xia, director of the Shanghai-based Polar Strategy Center at the Polar Research Institute of China, told the Global Times on Thursday.", "A November 29, 2018, statement to a committee of the Canadian parliament states that China", "is not the only non-Arctic state to develop an Arctic policy and look for a deeper commitment to the region. Most other observer states to the Arctic Council have an Arctic strategy, a polar strategy, or at least some official guidelines regarding their Arctic policy.\u2026 It remains to be seen whether, like China, these non-Arctic nations see themselves as \"near Arctic states\" that cannot leave the leadership of a strategic region to eight nations only; and whether they might find it advantageous to coalesce as a group of like-minded countries to seek more political and decisional weight both within the Arctic Council and in other international fora.", "So far, the approach of Arctic states has been to coopt non-Arctic states rather than exclude them. Most have been eventually accepted as observer states in the Arctic Council, and they are participating in the development of new rules for the Arctic.\u2026 Yet Arctic nations have made clear that the broader legal background for such development should remain the United Nations Convention on the Law of the Sea and other existing principles of international law. As stated in the 2008 Ilulissat Declaration, they reject the development of new international rules specifically for the Arctic\u2014an equivalent of the Antarctica Treaty\u2014as such a treaty would require painful negotiations and would likely be less advantageous for them than the current system."], "subsections": []}]}, {"section_title": "Arctic and World Order", "paragraphs": ["Another potential implication for the Arctic of the shift in the international security environment concerns the new environment's challenges to elements of the U.S.-led international order that has operated since World War II. One element of the U.S.-led international order that has come under challenge is the principle that force or threat of force should not be used as a routine or first-resort measure for settling disputes between countries. Another is the principle of freedom of the seas (i.e., that the world's oceans are to be treated as an international commons). If either of these elements of the U.S.-led international order is weakened or overturned, it could have potentially major implications for the future of the Arctic, given the Arctic's tradition of peaceful resolution of disputes and respect for international law and the nature of the Arctic as a region with an ocean at its center that washes up against most of the Arctic states.", "More broadly, some observers assess that the U.S.-led international order in general may be eroding or collapsing, and that the nature of the successor international order that could emerge in its wake is uncertain. An erosion or collapse of the U.S.-led international order, and its replacement by a new international order of some kind, could have significant implications for the Arctic, since the Arctic's tradition of cooperation and low tensions, and the Arctic Council itself, can be viewed as outgrowths of the U.S.-led order."], "subsections": []}, {"section_title": "Relative Priority of Arctic in U.S. Policymaking", "paragraphs": ["The shift in the international security environment has raised a question concerning the priority that should be given to the Arctic in overall U.S. policymaking. During the post-Cold War era, when the Arctic was generally a region of cooperation and low tensions, there may have been less need to devote U.S. policymaker attention and resources to the Arctic. Given how renewed great power competition and challenges to elements of the U.S.-led international order might be expressed in the Arctic in terms of issues like resource exploration, disputes over sovereignty and navigation rights, and military forces and operations, it might be argued that there is now, other things held equal, more need for devoting U.S. policymaker attention and resources to the Arctic.", "On the other hand, renewed great power competition and challenges to elements of the U.S.-led international order are also being expressed in Europe, the Middle East, the Indo-Pacific, Africa, and Latin America. As a consequence, it might be argued, some or all these other regions might similarly be in need of increased U.S. policymaker attention and resources. In a situation of constraints on total U.S. policymaker attention and resources, the Arctic would need to compete against these other regions for U.S. policymaker attention and resources."], "subsections": []}, {"section_title": "U.S., Canadian, and Nordic Relations with Russia in Arctic", "paragraphs": ["The shift in the international security environment to a situation of renewed great power competition raises a question for U.S., Canadian, and Nordic policymakers regarding the mix of cooperation and competition to pursue (or expect to experience) with Russia in the Arctic. In considering this question, geographic points that can be noted include the following:", "Russia, according to one assessment, \"has at least half of the Arctic in terms of area, coastline, population and probably mineral wealth.\" Russia has numerous cities and towns in its Arctic, uses its coastal Arctic waters as a maritime highway for supporting its Arctic communities, is promoting the Northern Sea Route that runs along Russia's Arctic coast for use by others, and is keen to capitalize on natural resource development in the region, both onshore and offshore. In this sense, of all the Arctic states, Russia might have the most at stake in the Arctic in absolute terms. Arctic ice is diminishing more rapidly or fully on the Russian side of the Arctic than it is on the Canadian side. Consequently, the Northern Sea Route along Russia's coast is opening up more quickly for trans-Arctic shipping than is the Northwest Passage through the Canadian archipelago.", "On the one hand, the United States, Canada, and the Nordic countries continue cooperate with Russia on a range of issues in the Arctic, including, to cite just one example, search and rescue (SAR) under the May 2011 Arctic Council agreement on Arctic SAR (see \" Search and Rescue (SAR) \"). More recently, the United States and Russia cooperated in creating a scheme for managing two-way shipping traffic through the Bering Strait and Bering Sea. A July 17, 2018, opinion piece states that", "It's likely that few, if any, of either [President Trump's or President Putin's] advisors, let alone commentators, are looking to the Arctic\u2014yes, the Arctic\u2014as a starting point for common ground and improving relations going forward\u2026.", "Yet, other than the International Space Station, the Far North is perhaps the only setting in which the United States and the Russian Federation cooperate today on a wide variety of issues.", "These two practical examples of cooperation might provide a foundation upon which both sides can regain some trust and positive momentum in their bilateral relationship (that is, if there is will on both sides to do so).", "If such momentum could be sustained over any meaningful period of time, it may create a more functional context to address other pressing and multilateral issues of global importance\u2026.", "Clearly the recent agreements on Central Arctic Ocean fishing and research provide pathways for cooperation. Perhaps a joint Arctic marine expedition in the remote Central Arctic Ocean in support of the new fisheries agreement could be proposed? ", "The U.S. and Russia could take the lead in the Arctic Coast Guard Forum (now chaired by Finland) in exploring enforcement issues with the new IMO International Code for Ships Operating in Polar Waters.", "Renewed military-to-military cooperation could be feasible if the joint meetings were to focus on Arctic emergency operations, something more likely as shipping and development activities increase. ", "Presidents Trump and Putin could support renewed friendship flights and cultural exchanges between the indigenous communities that border our shared Bering and Chukchi Seas.", "On the other hand, as discussed later in this report, a significant increase in Russian military capabilities and operations in the Arctic in recent years has prompted growing concerns among U.S., Canadian, and Nordic observers that the Arctic might once again become a region of military tension and competition, as well as concerns about whether the United States, Canada, and the Nordic countries are adequately prepared militarily to defend their interests in the region.", "In protest of Russia's forcible occupation and annexation of Crimea and its actions elsewhere in Ukraine, Canada announced that it would not participate in an April 2014 working-level-group Arctic Council meeting in Moscow. In addition, former Secretary of State Hillary Clinton, during whose tenure a \"reset\" in relations with Russia was sought, reportedly stated that Arctic cooperation may be jeopardized if Russia pursues expansionist policies in the high north. More recently, economic sanctions that the United States imposed on Russia in response to Russian actions in Ukraine could affect Russian Arctic offshore oil exploration.", "Another potential concern for U.S. policymakers in connection with Russia in the Arctic relates to the Northern Sea Route. Russia considers certain parts of the Northern Sea Route to be internal Russian waters\u2014a position that creates a potential source of tension with the United States, which may consider at least some of those waters to be international waters. A dispute over this issue could have implications not only for the Arctic, but for other parts of the world as well, since international law is universal in its application, and a successful challenge to international waters in one part of the world can serve as a precedent for challenging it in other parts of the world. A November 30, 2018, press report states", "Russia plans to restrict the passage of foreign warships in the Arctic Ocean next year, a top defense official has said\u2026.", "On Friday [November 30], Defense Ministry spokesman Mikhail Mizintsev said that Russia's ministries were working on amending legislation that would require foreign warships to notify Russia before being able to pass through the Arctic.", "The work will be completed by the time the waters are navigable in 2019, Mizintsev was cited by Interfax as saying at a conference on Friday."], "subsections": []}, {"section_title": "NATO, the EU, and the Arctic", "paragraphs": ["The shift in the international security environment has led to a renewal of NATO interest in NATO's more northerly areas. During the Cold War, NATO member Norway and its adjacent sea areas were considered to be the northern flank of NATO's defensive line against potential aggression by the Soviet-led Warsaw Pact alliance. With the end of the Cold War and the shift to the post-Cold War era, NATO planning efforts shifted away from defending against potential aggression by Russia, which was considered highly unlikely, and toward other concerns, such as the question of how NATO countries might be able to contribute to their own security and that of other countries by participating in out-of-area operations, meaning operations in areas outside Europe.", "With the ending of the post-Cold War era and the shift in the international security environment to a period of renewed great power competition, NATO is now once again focusing more on the question of how to deter potential Russian aggression against NATO countries. As one consequence of that, Norway and its adjacent sea areas are once again receiving more attention in NATO planning. For example, a NATO exercise called Trident Juncture 18 that was held from October 25 to November 7, 2018, in Norway and adjacent waters of the Baltic and the Norwegian Sea, with participation by all 29 NATO members plus Sweden and Finland, was described as NATO's largest exercise since the Cold War, and featured a strong Arctic element, including the first deployment of a U.S. Navy aircraft carrier above the Arctic Circle since 1991.", "The question of NATO's overall involvement in the Arctic, however, has been a matter of debate within NATO. A 2012 report stated that \"[t]here is currently no consensus within the alliance that NATO has any role to play in the Arctic, as Canada strongly opposes any NATO involvement on sovereignty grounds and other NATO members are concerned with negative Russian reaction.\" A 2013 NATO Parliamentary Assembly report noted that \"50% of the territory surrounding the Arctic Sea is a territory of a NATO member state,\" and suggested that \"NATO could serve as a forum for dialogue on military issues.... \" The report argued that the alliance is well-equipped to play a key role in addressing security challenges that will likely emerge, particularly those that involve surveillance, search-and-rescue, and environmental cleanup. However, observers stated that the lack of unanimity over a NATO presence in the Arctic was reflected by the fact that the high north was not mentioned in either in NATO's 2010 strategic concept, nor in the final declaration of NATO's 2012 Chicago summit. On May 8, 2013, following a visit to Norway, then-NATO Secretary General Rasmussen stated that \"at the present time,\" the alliance had \"no intention of raising its presence and activities in the High North.\"", "In May 2017, it was reported that NATO \"may revive a Cold War naval command to counter Moscow's increased submarine activity in the Arctic and protect Atlantic sea lanes in the event of a conflict, according to allied diplomats and officials briefed on the planning work.\"", "An April 4, 2018, press report states the following:", "Despite rising tensions with Russia in Eastern Europe, the Baltics and more recently in the United Kingdom, NATO would like to keep the Arctic an area of low tensions, the chief of the North Atlantic Alliance said Wednesday [April 4].", "\"We used to say that in the High North we have low tensions,\" NATO Secretary General Jens Stoltenberg told reporters during a joint press conference with Prime Minister Justin Trudeau. \"And I think we should continue to strive for avoiding an arms race and higher tensions in the High North.\"", "At the same time the alliance needs to respond to the increased Russian military presence in the North Atlantic and the Arctic regions with more of its own naval forces, said Stoltenberg who was in Ottawa for a two-day visit.", "\"Therefore part of the adaptation of NATO is that we are also increasing our naval capabilities, including the High North,\" Stoltenberg said.", "Two observers state in a June 27, 2018, policy paper that", "The North Atlantic Treaty Organization (NATO) summit in Brussels on July 11 and 12 is an opportunity for the Alliance to finally focus on a region it has long ignored: the Arctic\u2026.", "NATO has no agreed common position on its role in the Arctic region. The [July 2016 NATO] Warsaw Summit Declaration did not mention the word Arctic, and neither does the Alliance's most recent Strategic Concept published in 2010.", "NATO has been internally divided on the role that the Alliance should play in the High North. Norway is the leading voice inside the Alliance for promoting NATO's role in the Arctic. It is the only country in the world that has its permanent military headquarters above the Arctic Circle, and it has invested extensively in Arctic defense capabilities.", "Canada has likewise invested heavily in Arctic defense capabilities. However, unlike Norway, Canada has stymied past efforts by NATO to take a larger role in the region. Generally speaking, there is a concern inside Canada that an Alliance role in the Arctic would afford non-Arctic NATO countries influence in an area where they otherwise would have none.", "A July 2, 2018, opinion piece by another observer stated the following:", "Since 2014, the alliance has adapted to focus on Russia's actions in eastern Europe, notably in the Baltic region and in Poland\u2026.", "But strengthening NATO's eastern flank is not enough. Little has been done to work out a coherent vision for how to protect NATO interests in the Arctic or in the Black Sea. This is worrying since Russia is emboldened in both regions, as seen through brinksmanship such as provocative air manoeuvring, an assertive force posture and constant military drilling\u2026.", "The Kremlin defined its Arctic strategy back in 2008 and named the High North a region of strategic importance in its 2017 naval doctrine\u2026.", "NATO by contrast lacks any comparable strategy for the High North: its 2010 Strategic Concept does not even mention the region and discussions on the North Atlantic do not automatically include the High North. The creation of a new NATO North Atlantic Joint Force Command this February, without a proper Arctic angle, proves this point. Furthermore, the 'GIUK gap' (Greenland, Iceland and the UK), connecting the North Atlantic to the Arctic region, is often overlooked.", "The European Union (EU) is also showing increased interest in the Arctic. A February 20, 2019, press report states that", "Just as it is in Russia and in China, the Arctic is rapidly rising to the top of the political agenda of the European Union. Increased geopolitical focus on the Arctic is creating renewed urgency in Brussels when it comes to securing a proper role for the EU in the Arctic and to increasing European access to Arctic oil, gas, minerals, fish stocks and shipping routes.\u2026", "The EU has played for a number of years an increasing, if somewhat disjointed role in the Arctic. Sweden and Finland, both members of the EU, embrace large Arctic regions that are subject to EU legislation. The Kingdom of Denmark consists of Denmark, which is a EU member country, and the Faroe Islands and Greenland, both territories that are not part of the EU.\u2026", "The Faroe Islands and Greenland are both influenced by economic ties to the EU and by a number of international agreements involving the EU. The two non-EU-countries Norway and Iceland, both members of the Arctic Council, are members of the European Economic Area and thus part of the inner market of the European Union and its customs regime. The EU is an important importer of Arctic fish, shrimp, minerals and gas and a central sponsor of Arctic science programs. The EU is a key signatory to the recent moratorium on fishing in the central parts of the Arctic Ocean, the Polar Code of the IMO and several other key international regimes (and European industry contributes significantly to emission of carbon dioxide and black carbon that accelerates climate change in the Arctic).", "But recently, the EU has taken a more urgent interest in the region, Vilen says.", "EU Commission President Jean Claude Juncker has personally positioned the Arctic in the very foreground of policy making in Brussels by commissioning a policy paper on the EU's Arctic priorities. The timing of this initiative is a point in itself. The forthcoming policy paper, due in the early part of May [2019], will have the potential to influence not only electoral campaigns prior to the elections to the European Parliament later that month, but also the next EU Commission, which is to be formed most likely late this year, and the next seven-year budget of the European Union, which is currently very much on the table\u2026.", "\"The Arctic policy importance comes with the change of the geopolitical setting of the Arctic,\" Vilen told me. \"The position of the Arctic is different today due to China's increased interest, Russia's increased interest, increased American policy positions and because of the needs and demand for natural resources, gas, oils, minerals and fishing stocks. The Arctic has changed, but what has not changed is the European positions and assessments on how we should be engaged. I am trying to argue that the European Union should be ready to take a leadership role in the Arctic, because if we don't do it, someone else will try to.\"\u2026", "After years of preparation, the European Commission and the EU's High Representative for Foreign Affairs and Security Policy adopted in 2016 the European Union's first comprehensive Arctic strategy, the \"Integrated Arctic Policy,\" legally binding for all 28 member states. Such a policy would normally not be overhauled for another four or five years, but Juncker has obviously seen a need for a quicker update.", "The upcoming policy paper will not be legally binding for the member states, nor will it formally change the policy adopted in 2016, but as Vilen explained it will likely strengthen focus, priorities and overall attention to the Arctic in Brussels at a conspicuous moment in European affairs\u2026.", "The wish to secure European access to oil, gas, minerals, fishing stocks, shipping routes and other Arctic resources is a main pillar of Vilen's approach\u2026.", "Traditionally, the EU has not involved itself in Arctic security and Vilen has no intention to change this approach. The EU is engaged in a prolonged and deep sanctions standoff with Russia following Russia's military annexation of Crimea in 2014, but like the Arctic states and the Arctic Council, the EU still treasures its dialogue with Russia on Arctic affairs; this allows for the dialogue that is otherwise missing. Russia is still blocking the EU's admission as a formal observer to the Arctic Council, but Vilen downplays this aspect of the EU's Russia relations:", "\"In practice, it has not affected the European Union's engagement in any way. We continue to work as a de facto observer in the working groups [of the Arctic Council], and a lot of the material information to the groups come from the European Commission services and also a lot of the financing for the projects. So we are in. The de jure position is not here, but our de facto position is in place,\" he said."], "subsections": []}, {"section_title": "China in the Arctic", "paragraphs": [], "subsections": [{"section_title": "China's Growing Activities in Arctic", "paragraphs": ["China's activities in the Arctic have grown steadily in recent years. As noted earlier in this report, China was one of six non-Arctic states that were approved for observer status by the Arctic Council in 2013. China in recent years has engaged in growing diplomatic activities with the Nordic countries, and has increased the size of its diplomatic presences in some of them. In April 2013, China and Iceland signed a free trade agreement\u2014China's first such pact with a European government\u2014and has pursued the possibility of oil exploration in waters off Iceland. China has also engaged in growing economic discussions with Greenland, a territory of Denmark that might be moving toward eventual independence.", "China has an Arctic-capable icebreaker, Xue Long (Snow Dragon), that in recent years has made several transits of Arctic waters\u2014operations that China describes as research expeditions. China is completing construction of its second Arctic-capable icebreaker (the first that China has built domestically), to be named Xue Long 2 , and has announced an intention to eventually build a 30,000-ton nuclear-powered icebreaker, which would make China only the second country (along with Russia) to operate a nuclear-powered icebreaker. Like several other nations, China has established a research station in the Svalbard archipelago.", "China in January 2018 released a white paper on China's Arctic policy that refers to China as a \"near-Arctic state.\" (China's northernmost territory, northeast of Mongolia, is at about the same latitude as the Aleutian Islands in Alaska, which, as noted earlier in this report, the United States includes in its definition of the Arctic for purposes of U.S. law.) The white paper refers to trans-Arctic shipping routes as the Polar Silk Road, and identifies these routes as a third major transportation corridor for the Belt and Road Initiative (BRI), China's major geopolitical initiative, first announced by China in 2013, to knit Eurasia and parts of Africa together in a Chinese-anchored or Chinese-led infrastructure and economic network.", "China appears to be interested in using the Northern Sea Route (NSR) linking Europe and Asia via waters running along Russia's Arctic coast to shorten commercial shipping times between Europe and China and perhaps also to reduce China's dependence on southern sea routes (including those going to the Persian Gulf) that pass through the Strait of Malacca\u2014a maritime choke point that China appears to regard as vulnerable to being closed off by other parties (such as the United States) in time of crisis or conflict. China reportedly reached an agreement with Russia on July 4, 2017, to create an \"Ice Silk Road,\" and in June 2018, China and Russia agreed to a credit agreement between Russia's Vnesheconombank (VEB) and the China Development Bank that could provide up to $9.5 billion in Chinese funds for the construction of select infrastructure projects, including in particular projects along the NSR. In September 2013, the Yong Shen , a Chinese cargo ship, became the first commercial vessel to complete the voyage from Asia to Rotterdam via the NSR. ", "China is interested in oil and gas exploration in the Arctic, and has made significant investments in Russia's Arctic oil and gas industry. In March 2013, it was announced that Russia and China had signed an agreement under which China would purchase oil from Russia in exchange for exploration licenses in the Arctic. China's investments in Russia's Arctic oil and gas industry include an ownership stake of at least 20% in the Yamal natural gas megaproject located on Russia's Yamal Peninsula in the Arctic. The facility includes onshore and offshore natural gas wells, a deepwater port, liquefied natural gas (LNG) storage and feeder lines, permafrost-resilient support buildings, and rail lines. In July 2018, an LNG shipment reportedly arrived in China from the Yamal LNG facility, via the NSR, for the first time.", "China is also interested in mining opportunities in the Arctic seabed and in Greenland. Given Greenland's very small population, China may view Greenland as an entity that China can seek to engage using an approach similar to ones that China has used for engaging with small Pacific and Indian Ocean island states. China may also be interested in Arctic fishing grounds.", "China's growing activities in the Arctic may also reflect a view that as a major world power, China should, like other major world powers, be active in the polar regions for conducting research and other purposes. (Along with its growing activities in the Arctic, China has recently increased the number of research stations in maintains in the Antarctic.) Particularly since China published its Arctic white paper in January 2018, observers have expressed curiosity or concern about China's exact mix of motivations for its growing activities in the Arctic, and about what China's ultimate goals for the Arctic might be."], "subsections": []}, {"section_title": "Arctic States' Response", "paragraphs": ["The shift in the international security environment to a situation of renewed great power competition underscores a question for the Arctic states regarding whether and how to respond to China's growing activities in the Arctic. China's growing activities in the Arctic could create new opportunities for cooperation between China and the Arctic states. They also, however, have the potential for posing challenges to the Arctic states in terms of defending their own interests in the Arctic.", "For U.S. policymakers, a general question is how to integrate China's activities in the Arctic into the overall equation of U.S.-China relations, and whether and how, in U.S. policymaking, to link China's activities in the Arctic to its activities in other parts of the world. One specific question concerns potential areas for U.S.-Chinese cooperation in the Arctic. Another specific question could be whether to impose punitive costs on China in the Arctic for unwanted actions that China takes elsewhere. As one hypothetical example of such a cost-imposing action, U.S. policymakers could consider moving to suspend China's observer status on the Arctic Council as a punitive cost-imposing measure for unwanted Chinese actions in the South China Sea. In February 2019, it was reported that the United States in 2018 had urged Denmark to finance airports that China had offered to build in Greenland, so as to counter China's attempts to increase its presence and influence there.", "For Russia, the question of whether and how to respond to China's activities in the Arctic may pose particular complexities. On the one hand, Russia is promoting the NSR for use by others, in part because Russia sees significant economic opportunities in offering icebreaker escorts, refueling posts, and supplies to the commercial ships that will ply the waterway. In that regard, Russia presumably would welcome increased use of the route by ships moving between Europe and China. More broadly, Russia and China have increased their cooperation on security and other issues in recent years, in no small part as a means of balancing or countering the United States in international affairs, and Russian-Chinese cooperation in the Arctic can both reflect and contribute to that cooperation.", "On the other hand, Russian officials are said to be wary of China's continued growth in wealth and power, and of how that might eventually lead to China becoming the dominant power in Eurasia, and to Russia being relegated to a secondary or subordinate status in Eurasian affairs relative to China. Increased use by China of the NSR could accelerate the realization of that scenario: As noted above, the NSR forms part of China's geopolitical Belt and Road Initiative (BRI). Some observers argue that actual levels of Sino-Russian cooperation in the Arctic are not as great as Chinese or Russian announcements about such cooperation might suggest. A July 6, 2018, press report states the following:", "China and Russia are working together ever more closely in the Arctic, exploiting a policy vacuum in the US, an international panel of experts said here. But Sino-Russian cooperation is almost entirely commercial, focused on trade routes, offshore oil, telecommunications (most satellites don't cover the Arctic), and tourism. A military alliance is unlikely given Russia's deep ambivalence about China's growing influence in general and their very different views on who should run the Arctic in particular: the eight circumpolar countries alone\u2014including both Russia and the US [through the Arctic Council]\u2014or a larger group that includes self-declared \"near-Arctic\" nations like China.", "A July 12, 2018, press report states the following:", "China's actions both before and especially since [it published its Arctic white paper in January 2018] suggest that it is actually seeking not equality with others in the global frozen North, but rather a dominant position. And this prospect has already prompted some Russian commentators to suggest China wants to reduce Russia to the status of \"a younger brother\" in the Arctic\u2026.", "China's expansive moves in the region have, to date, taken three forms. First, it is increasing its share of orders for goods carried across Arctic waters by the ships of other countries\u2014especially those of the Russian Federation\u2014something that gives it clout in Moscow in particular\u2026. Moreover, China is boosting its ownership stake in ships flying the Russian flag. Second, it has launched a program to build both ice breakers and ice-capable ships so that it will be able to carry more of the goods and raw materials it wants with its own vessels rather than having to rely on anyone else's. And third\u2014and perhaps most dramatically in terms of Beijing's long-term goals\u2014Chinese firms are establishing drilling platforms in areas of the Arctic Ocean that Moscow claims as part of its exclusive economic zone (EEZ). Similarly, it is building port facilities on Russian territory that are located far from China and that may soon eclipse Russian ones.", "All three of these developments merit close attention, both for what they say about China's intentions as well as Beijing's increasing upper hand regarding a region and waterway Moscow has long insisted are exclusively Russian.", "A November 7, 2018, press report states", "An article published on October 5 by the Russian International Affairs Council (RIAC) discusses Russia's strategy in the Arctic region and the evolving role of China therein\u2026. It frames the United States and the European Union as Russia's main regional competitor. But China is notably presented as a \"strategic partner\" for whom \"the Arctic region is not a top strategic priority\" and whose efforts to build up its naval strength are related to a desire to challenge the US, not Russia. The sentiments expressed in the above-mentioned RIAC article appear to reflect how Moscow views the prior concrete steps the Russian Federation and People's Republic of China (PRC) have been taking to strengthen bilateral cooperation in the Arctic.\u2026 Nonetheless, Chinese ambitions in the Arctic seem to extend beyond the level of such joint initiatives\u2026.", "\u2026 Russia's expectations in this matter are premised on three assumptions:", "\u2013 China will save Russia's stagnant north\u2026", "\u2013 China has no alternatives but to work with Russia \u2026.", "\u2013 China will be unable to \"sideline\" Russia (Topwar.ru, January 30, 2018), given Russia's dominant position in the Arctic and the nature of relations between Beijing and Moscow\u2026.", "However, these assumptions appear questionable at best:", "First, the NEP [Northeast Passage, aka Northern Sea Route] still requires a staggering amount of infrastructure investment\u2014realistic estimates run in the trillions of US dollars\u2014before it can start yielding profits\u2026. Moreover, the facts do not bear out the Russian conviction that Beijing can choose only between the NEP and the NWP, with no available alternative\u2026.", "Second, Russia is not China's only potential partner in the Arctic. The PRC white paper clearly points to the fact that Chinese involvement there will be a multilateral, not a bilateral affair\u2026.", "Third, China is likely to ultimately sideline Russia. As rightfully pointed out by Dr. Pavel Gudev, a senior research fellow at the Institute of World Economy and International Relations (IMEMO), China's strategy in the Arctic region is dictated by the desire to \"downplay exclusivity in relations between Arctic nations\" and \"internationalize the Arctic as much as possible,\" which \"runs counter to Russia's national interests in the region\"\u2026.", "And finally, international competition by other Arctic players may further outflank Russian efforts.", "A November 29, 2018, statement to a committee of the Canadian parliament states", "So far, Arctic nations have cautiously welcomed China's willingness to play a larger role in the Arctic.\u2026", "Arctic nations are also setting limits. In 2011, Iceland blocked the sale of a large plot of land to a Chinese investor; in 2016, Denmark declined to sell a vacant naval base in Greenland to a Chinese mining company; and in that same year, a projected Chinese resort in Svalbard, under Norwegian sovereignty, was canceled. Each Arctic state\u2014often under public pressure\u2014is setting its own limits when it comes to welcoming Chinese presence.", "Russia's approach toward China shows a similar mix of interest and caution. China is a key investor in Russia's Yamal LNG project, and Chinese funds are particularly welcome, as Russia has been shunned by some of its more traditional investors since its annexation of Crimea. Russia also welcomes Chinese interest in developing port infrastructure along the NSR. Yet Russia is also very much intent on keeping the NSR under its control. This may eventually create tensions with China, as China sees the NSR as one element of the Belt and Road Initiative and will resent obstacles to its free use of the route (the alternative route, the Northwestern Passage along the northern shore of Canada, is not considered a viable replacement because of poor navigation conditions and a lack of infrastructure). While Russia and China are formally allies through the Shanghai Cooperation Organization, Russia remains wary of China's military power on its southern border and, as an Arctic nation, is irritated by the intrusion in Arctic affairs of non-Arctic states, as evidenced by its long-standing reluctance to grant observer status to these countries in the Arctic Council.", "A policy paper released in December 2018 states", "Since 2017, a series of events have raised optimism about the potential for Sino-Russian cooperation in the Arctic region, including unilateral and bilateral statements between Beijing and Moscow about their shared vision for and commitment to joint development of the Arctic energy resources and shipping lane. China's economic interests in natural resources extractions and alternative transportation routes largely align with Russia's stated goals to revitalize its Arctic territory\u2026.", "Despite the rhetorical enthusiasm from the two governments, concrete, substantive joint projects on the Northern Sea Route are lacking, especially in key areas such as infrastructure development. A careful examination of Chinese views on joint development of the Northern Sea Route reveals divergent interests, conflicting calculations and vastly different cost-benefit analyses. From the Chinese perspective, the joint development of the Northern Sea Route is a Russian proposal to which China reacted primarily out of strategic and political considerations rather than practical economic ones. While China is in principle interested in the Northern Sea Route, the potential and practicality of this alternative transportation route remains tentative and yet to be realized. For China, their diverging interests, especially over what constitutes mutually beneficial compromises, will be the biggest obstacle to future progress. Moscow needs to demonstrate much more sincerity or flexibility in terms of improving China's cost-benefit spreadsheet. In this sense, expectations and assessments of the impact of Sino-Russian cooperation specifically on the Northern Sea Route should be focused on moderate, concrete plans rather than glorified rhetoric\u2026.", "Although the Chinese are fond of optimistically discussing the potential for Sino-Russian cooperation on the Northern Sea Route, they have been unable to reach an optimistic conclusion for its viability, feasibility, and practicality. China and Russia have identified their converging interests in such cooperation. However, their diverging interests, especially over what constitutes mutually beneficial compromises, will be the biggest obstacle to future progress. China's view of the economic practicality of the Northern Sea Route remains a lofty future ambition that is steeped in hopes of the project's potential. In the best-case scenario, few Chinese experts see the Northern Sea Route as a viable substitute/alternative to traditional shipping routes. Instead, the Northern Sea Route is seen primarily as a potential supplement. The unfavorable assessment of the economic practicality of the Northern Sea Route underscores the fact that there has been more discussion about development than actual projects on the ground.", "China has demonstrated greater interest in other areas of infrastructure cooperation, such as on the Primorye International Transportation Corridor and energy development projects. However, interest regarding joint development of the Northern Sea Route has been markedly less impressive or present. China's apparent enthusiasm on Northern Sea Route cooperation with Russia is motivated primarily by political and strategic considerations. Cooperation helps to pave China's entry into the otherwise relatively exclusive Arctic region and affords China an advantaged and prioritized position in the projects for which Russia is accepting or seeking international cooperation. Russia's options for other international partners might expand after international sanctions are lifted and/or if the United States identifies China as the biggest threat and Russia as a partner in the Sino-U.S.-Russian strategic triangle. However, such hypotheticals do not appear to be coming to fruition anytime soon.", "A 2019 report on China's strategic ambitions stated the following:", "The Sino-Russian partnership has both supported China's Arctic ambitions and at times acted as a check on them. Broadly speaking, the region serves as a testing ground for key goals of [Chinese leader] Xi Jinping's foreign policy agenda\u2026. Focusing on climate change, sustainable development, and global governance, [China's Arctic] white paper downplays China's security interests in the region, especially the link between the projection of power in the polar region and the development of naval capabilities needed for great-power status. The PLA [People's Liberation Army\u2014China's military], however, has been integral to the development of China's Arctic capabilities, and the changing Arctic (and China's evolving role in it) are becoming a key part of the country's maritime strategy\u2026.", "China faces several obstacles to fulfilling its Arctic ambitions. At present, the country has limited experience in cold-water navigation and polar research, though the Chinese government has been making substantial investments, particularly in the latter. In the short term, fears about Russia in Northern Europe may contribute to greater receptivity to China's activities in the Arctic, but this may no longer be the case if China seeks to play a more substantial role\u2026.", "China's ambitions in the Arctic could also complicate its relations with Russia. China's entry into the region has been importantly facilitated by Russia's acceptance of Chinese investments and provision of Arctic navigation training (though\u2026 Russia was initially wary of China's quest for observer status in the Arctic Council). Yet China may not need a gatekeeper in the region for much longer if Arctic ice continues to recede. If the NSR [Northern Sea Route] is no longer frozen, then Russia may lose its legal rationale for administering the waterway, potentially leading to tensions with China and other users hoping to avoid Russian oversight and fees\u2026. ", "\u2026 China's relationship with Russia is central to its Arctic ambitions, though Russia's positions on Arctic shipping also set limits to the Chinese role\u2026.", "Although Russia is China's key partner in the Arctic, Chinese officials have sought to improve relations with all the Arctic states. As an observer in the Arctic Council, China depends on members to put forward its proposals and will only be able to participate in Arctic resource development in cooperation with these states\u2026.", "China's Arctic ambitions have elicited concern among regional states for two sets of reasons. First, countries like Russia that view Arctic coastal waterways as subject to their own jurisdiction are apprehensive about China's position. Second, most of the Arctic states have significant resource deposits or coastal access to such stores and are concerned about the consequences of China's investments and economic power in the region. This is particularly acute for smaller Arctic states such as Iceland, where a large infusion of Chinese funds might have an outsized political and economic impact\u2026.", "While Canada, which views the Northwest Passage as internal waters, and Russia, with its assertion of administrative rights over the still ice-covered NSR, have had some reservations about China playing a greater role in the Arctic, Nordic countries have largely welcomed its growing interest in the region. Chinese policy toward these states has involved multilateralism, as well as bilateral diplomacy and investments under BRI [the Belt and Road Initiative]\u2026.", "Chinese investments in Greenland have been especially controversial due to its strategic location and domestic pressures for political independence from Denmark\u2026.", "While Chinese officials and analysts have been cautiously avoiding discussion of Greenland's political future, China's approach to the Nordic states is in keeping with its general approach to Europe\u2026.", "China is playing a long game in the Arctic, slowly building up its presence, scientific capacity, and naval capabilities in anticipation of future economic bounties as the ice recedes. China has had to tread carefully as an outsider, however \"near-Arctic\" it claims to be, because even small steps by Chinese investors could have a big impact on small Arctic states. While somewhat wary of China's intentions and protective of its own status as an Arctic littoral state, Russia has provided an important entry point, via transit through the NSR and investment opportunities in the Russian Arctic. Nonetheless, China has to balance its aspirations with the need to be mindful of Russian sensitivities on Arctic issues\u2026.", "For China, the Arctic is a promised land of untapped resources and an opportunity to exert its influence in global governance, yet these benefits are largely promised to insiders. However loudly China proclaims itself to be a near-Arctic state, it nonetheless has to demonstrate its presence through economic, scientific, and political activities. These same activities raise concerns among Arctic states about China's intentions and willingness to accept the status quo, which for Russia means the authority to administer currently ice-covered waterways. The Arctic is not a static environment, however, and its melting ice will have profound political consequences as well as environmental ones.", "For Xi, the Arctic and polar regions more broadly are the testing grounds for his global ambitions, both as a maritime power and as a participant in the development of new forms of global governance."], "subsections": []}, {"section_title": "Linkages Between Arctic and South China Sea", "paragraphs": ["Another potential implication of the shift in the international security environment to a situation of great power competition is a linkage that is sometimes made between the Arctic and the South China Sea relating to international law of the sea or the general issue of international cooperation and competition. One aspect of this linkage relates to whether China's degree of compliance with international law of the sea in the South China Sea has any implications for understanding potential Chinese behavior regarding its compliance with international law of the sea (and international law generally) in the Arctic.", "A second aspect of this linkage, mentioned earlier, is whether the United States should consider the option of moving to suspend China's observer status on the Arctic Council as a punitive cost-imposing measure for unwanted Chinese actions in the South China Sea.", "A third aspect of this linkage concerns the question of whether the United States should become a party to UNCLOS: Discussions of that issue sometimes mention both the situation in the South China Sea and the extended continental shelf issue in the Arctic (see \" Extended Continental Shelf and United States as a Nonparty to UNCLOS \")."], "subsections": []}]}]}, {"section_title": "U.S. Military Forces and Operations307", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["During the Cold War, the Arctic was an arena of military competition between the United States and the Soviet Union, with both countries, for example, operating nuclear-powered submarines, long-range bombers, and tactical aircraft in the region. The end of the Cold War and the collapse of most elements of the Russian military establishment following the dissolution of the Soviet Union in December 1991 greatly reduced this competition and led to a reduced emphasis on the Arctic in U.S. military planning.", "Renewed tensions with Russia following its seizure and annexation of Crimea in March 2014, combined with a significant increase in Russian military capabilities and operations in the Arctic in recent years, have led to growing concerns among observers that the Arctic is once again becoming a region of military tension and competition, and to concerns about whether the United States is adequately prepared militarily to defend its interests in the region.", "U.S. military officials, military officials from other Arctic states, and other observers have stressed the cooperative aspects of how the Arctic states have addressed Arctic issues, and have sometimes suggested that the competitive aspects of the situation have been exaggerated in some press accounts. Some observers argue that that Russia's recent military investment in the Arctic is being exaggerated, or reflects normal modernization of aging capabilities, or is intended partly for domestic Russian consumption. Even so, U.S. military forces (and U.S. intelligence agencies) are paying renewed attention to the Arctic. This is particularly true in the case of the Navy and Coast Guard, for whom diminishment of Arctic sea ice is opening up potential new operating areas for their surface ships. The U.S. Air Force, Army, and Marine Corps, too, are now focusing more on Arctic operations. Canada, the UK, and the Nordic countries are taking or contemplating steps to increase their own military presence and operations in the region."], "subsections": []}, {"section_title": "DOD in General", "paragraphs": [], "subsections": [{"section_title": "2010 QDR (Submitted February 2010)", "paragraphs": ["DOD's report on the 2010 QDR, submitted to Congress in February 2010, states the following:", "The effect of changing climate on the Department's operating environment is evident in the maritime commons of the Arctic. The opening of the Arctic waters in the decades ahead[,] which will permit seasonal commerce and transit[,] presents a unique opportunity to work collaboratively in multilateral forums to promote a balanced approach to improving human and environmental security in the region. In that effort, DoD must work with the Coast Guard and the Department of Homeland Security to address gaps in Arctic communications, domain awareness, search and rescue, and environmental observation and forecasting capabilities to support both current and future planning and operations. To support cooperative engagement in the Arctic, DoD strongly supports accession to the United Nations Convention on the Law of the Sea."], "subsections": []}, {"section_title": "April 2011 Change to DOD Unified Command Plan", "paragraphs": ["In April 2011, President Obama assigned responsibility for the Arctic to U.S. Northern Command. Previously, U.S. Northern Command, U.S. European Command, and U.S. Pacific Command had shared responsibility for the Arctic. The April 2011 change in DOD's Unified Command Plan also assigned Alaska to U.S. Northern Command. Previously, U.S. Northern Command and U.S. Pacific Command had shared responsibility for Alaska and adjacent waters. "], "subsections": []}, {"section_title": "May 2011 DOD Report to Congress", "paragraphs": ["In May 2011, DOD submitted a report to Congress on Arctic operations and the Northwest Passage that was prepared at congressional direction. A January 2012 GAO report reviewed the May 2011 DOD report."], "subsections": []}, {"section_title": "November 2013 DOD Arctic Strategy", "paragraphs": ["On November 22, 2013, DOD released a DOD strategy for the Arctic that was subsequently updated by the December 2016 report to Congress on Arctic strategy discussed below."], "subsections": []}, {"section_title": "January 2014 Implementation Plan for National Strategy for Arctic Region", "paragraphs": ["The Obama Administration's January 2014 implementation plan for its national strategy for the Arctic region (see \" Background \") makes DOD the lead federal agency for one of the plan's 36 or so specific initiatives, and a supporting agency for 18 others. The initiative for which DOD is designated the lead federal agency is entitled \"Develop a framework of observations and modeling to support forecasting and prediction of sea ice.\""], "subsections": []}, {"section_title": "2014 Quadrennial Defense Review (QDR) (Submitted March 2014)", "paragraphs": ["The Department of Defense's (DOD's) report on the 2014 Quadrennial Defense Review (QDR), submitted to Congress in March 2014, states the following:", "Climate change also creates both a need and an opportunity for nations to work together, which the Department will seize through a range of initiatives. We are developing new policies, strategies, and plans, including the Department's Arctic Strategy and our work in building humanitarian assistance and disaster response capabilities, both within the Department and with our allies and partners."], "subsections": []}, {"section_title": "2015 National Security Strategy", "paragraphs": ["The February 2015 National Security Strategy mentions the Arctic three times, stating that \"the present day effects of climate change are being felt from the Arctic to the Midwest. Increased sea levels and storm surges threaten coastal regions, infrastructure, and property.\" It also states that \"we seek to build on the unprecedented international cooperation of the last few years, especially in the Arctic as well as in combatting piracy off the Horn of Africa and drug-smuggling in the Caribbean Sea and across Southeast Asia,\" and that \"we will also stay engaged with global suppliers and our partners to reduce the potential for energy-related conflict in places like the Arctic and Asia.\""], "subsections": []}, {"section_title": "June 2015 GAO Report", "paragraphs": ["A June 2015 Government Accountability Office (GAO) report states the following:", "Recent strategic guidance on the Arctic issued by the [Obama] administration and the Department of Defense (DOD) establish a supporting role for the department relative to other federal agencies, based on a low level of military threat expected in the region. In January 2014 the [Obama] administration issued the Implementation Plan to the National Strategy for the Arctic Region that designated DOD as having a largely supporting role for the activities outlined in the plan. Additionally, DOD's Arctic Strategy issued in November 2013 and the Navy's Arctic Roadmap 2014-2030 issued in February 2014 emphasize that, as sea ice diminishes and the Arctic Ocean opens to more activity, the department may be called upon more frequently to support other federal agencies and work with partners to ensure a secure and stable region. To further its role, DOD participates in a number of forums focused on military security cooperation in the Arctic, including the Arctic Security Forces Roundtable, a senior-level event aimed at encouraging discussion among the security forces of Arctic and non-Arctic nations. In addition, DOD leads training exercises focused on building partner capacity in the region, including Arctic Zephyr, a multilateral scenario-based exercise. DOD continues to monitor the security environment in the region and is tracking indicators that could change its threat assessment and affect DOD's future role.", "DOD has taken actions, along with interagency partners, to address some near-term capabilities needed in the Arctic, such as maritime domain awareness and communications. In recent years, DOD has conducted a number of studies to identify near-term capabilities the department needs to operate in the Arctic. The Implementation Plan to the National Strategy for the Arctic Region created an interagency framework and identified activities to address many of these needed capabilities. For example, as the lead agency for Arctic sea ice forecasting, DOD has established an interagency team to focus on improved sea ice modeling. DOD has also begun other efforts within the department to address capability needs. For example, the Navy's Arctic Roadmap prioritizes near-term actions to enhance its ability to operate in the Arctic and includes an implementation plan and timeline for operations and training, facilities, equipment, and maritime domain awareness, among other capabilities.", "U.S. Northern Command\u2014the DOD advocate for Arctic capabilities\u2014stated that it is in the process of updating its regional plans for the Arctic and is conducting analysis to determine future capability needs. For example, Northern Command is updating the Commander's Estimate for the Arctic, which establishes the commander's intent and missions in the Arctic and identifies near-, mid-, and long-term goals. Additionally, the command is conducting studies of various Arctic mission areas, such as maritime homeland defense and undersea surveillance, to identify future capability needs. However, according to DOD's Arctic Strategy, uncertainty remains around the pace of change and commercial activity in the region that may affect its planning timelines. Difficulty in developing accurate sea ice models, variability in the Arctic's climate, and the uncertain rate of activity in the region create challenges for DOD to balance the risk of having inadequate capabilities or insufficient capacity when required to operate in the region with the cost of making premature or unnecessary investments. According to its Arctic Strategy, DOD plans to mitigate this risk by monitoring the changing Arctic conditions to determine the appropriate timing for capability investments."], "subsections": []}, {"section_title": "June 2016 DOD Report on Funding for 2013 Arctic Strategy", "paragraphs": ["A June 2016 DOD report to Congress on resourcing the Arctic Strategy states that DOD", "is making investments in research, military infrastructure, and capabilities to execute the 2013 Arctic Strategy and support the development of the Arctic as a secure and stable region where U.S. national interests are safeguarded, the U.S. homeland is protected, and nations work cooperatively to address challenges. Fiscal year (FY) 2017 investments focus mainly on capabilities, followed by long-term investments in research and development of next-generation capabilities. The Department's challenge is balancing the risk of being late-to-need with the opportunity cost of making Arctic investments for potential future contingencies at the expense of resourcing other urgent military requirements....", "Data provided by the Combatant Commands and Military Departments from the FY 2017 budget identifies about $6 billion of FY 2017 investments....", "The report includes a summary table showing that of $6.032 billion requested by DOD for FY2017 for implementing the Arctic strategy, about $461.3 million is for Army, Navy, and Air Force research and development work, $362.2 million is for Air Force military construction (MILCON) work, and about $5.209 billion is for Army, Navy, Air Force, defense-wide, and classified capabilities. Within the $5.209 billion figure, about 85% is accounted for by Air Force operations and maintenance (O&M), with about $2.281 billion, Air Force procurement, with about $1.109 billion, and Army military personnel (MILPERS) costs, with about $1.036 billion."], "subsections": []}, {"section_title": "December 2016 Report to Congress on Arctic Strategy", "paragraphs": ["A December 2016 report to Congress on strategy to protect U.S. national security interests in the Arctic region that was required by Section 1068 of FY2016 National Defense Authorization Act ( S. 1356 / P.L. 114-92 of November 25, 2015) states the following (italics and bold as in original):", "The Department of Defense (DoD) remains committed to working collaboratively with allies and partners to promote a balanced approach to improving security in the Arctic region. DoD's strategy in the Arctic builds upon the 2009 National Security Presidential Directive 66/Homeland Security Presidential Directive 25, Arctic Region Policy , and the 2013 National Strategy for the Arctic Region (NSAR).", "DoD's 2013 Arctic Strategy nested under those two overarching national-level guidance documents. DoD's 2016 Arctic Strategy updates DoD's 2013 Arctic Strategy as required by Section 1068 of the National Defense Authorization Act for FY 2016 ( P.L. 114-92 ) in light of significant changes in the international security environment. It refines DoD's desired end-state for the Arctic: a secure and stable region where U.S. national interests are safeguarded, the U.S. homeland is defended, and nations work cooperatively to address challenges. The two main supporting objectives remain unchanged: 1) Ensure security, support safety, promote defense cooperation; and 2) prepare to respond to a wide range of challenges and contingencies\u2014operating in conjunction with like-minded nations when possible and independently if necessary\u2014in order to maintain stability in the region. This update also adds a classified annex.", "In this strategy, near-term refers to the timeframe from the present to 2023, during which DoD will operate with current forces and execute resources programmed across the Future Years Defense Program (FYDP). The mid-term (2023-2030) and far-term (beyond 2030) are also addressed where relevant to global posture and force development. Timeframes are approximate due to uncertainty about future environmental, economic, and geopolitical conditions and the pace at which human activity in the Arctic region will increase.", "The 2016 Arctic Strategy also updates the ways and means DoD intends to use to achieve its objectives as it implements the NSAR. These include", "--Enhance the capability of U.S. forces to defend the homeland and exercise sovereignty;", "--Strengthen deterrence at home and abroad;", "--Strengthen alliances and partnerships;", "--Preserve freedom of the seas in the Arctic;", "--Engage public, private, and international partners to improve domain awareness in the Arctic;", "--Evolve DoD Arctic infrastructure and capabilities consistent with changing conditions and needs;", "--Provide support to civil authorities, as directed;", "--Partner with other departments, agencies, and nations to support human and environmental security; and", "--Support international institutions that promote regional cooperation and the rule of law.", "DoD's strategic approach is guided by its main objectives of ensuring security, supporting safety, and promoting defense cooperation as it prepares to respond to a wide range of challenges and contingencies in the Arctic in the years to come. Alliances and strategic partnerships remain the center of gravity in achieving DoD's desired end-state and ensuring that the Arctic remains a secure and stable region. Wherever possible, DoD will continue to seek innovative, cost-effective, small-footprint ways to achieve its objectives. DoD will also continue to apply the four overarching principles articulated in the NSAR: working with allies and partners to safeguard peace and stability; making decisions using the best available scientific information; pursuing innovative partnerships to develop needed capabilities and capacity over time; and following established Federal and DoD tribal consultation policy as applicable."], "subsections": []}, {"section_title": "FY2018 National Defense Authorization Act (H.R. 2810/P.L. 115-91)", "paragraphs": ["Section 1054 of the conference version ( H.Rept. 115-404 of November 9, 2017) of H.R. 2810 / P.L. 115-91 of December 12, 2017, requires DOD to submit a report on steps DOD is taking to resolve Arctic security capability and resource gaps, and the requirements and investment plans for military infrastructure required to protect U.S. national security interests in the Arctic region."], "subsections": []}, {"section_title": "2017 National Security Strategy", "paragraphs": ["The December 2017 National Security Strategy mentions the Arctic once, stating that \"a range of international institutions establishes the rules for how states, businesses, and individuals interact with each other, across land and sea, the Arctic, outer space, and the digital realm. It is vital to U.S. prosperity and security that these institutions uphold the rules that help keep these common domains open and free.\""], "subsections": []}, {"section_title": "2018 National Defense Strategy", "paragraphs": ["The January 2018 unclassified summary of the 2018 National Defense Strategy does not specifically mention the Arctic."], "subsections": []}, {"section_title": "John S. McCain National Defense Authorization Act for Fiscal Year 2019 (H.R. 5515/S. 2987)", "paragraphs": ["In the conference report ( H.Rept. 115-874 of July 25, 2018) on H.R. 5515 , Section 1071 states the following:", "SEC. 1071. REPORT ON AN UPDATED ARCTIC STRATEGY.", "(a) REPORT ON AN UPDATED STRATEGY.\u2014Not later than June 1, 2019, the Secretary of Defense shall submit to the congressional defense committees a report on an updated Arctic strategy to improve and enhance joint operations.", "(b) ELEMENTS.\u2014The report required by subsection (a) shall include the following:", "(1) A description of United States national security interests in the Arctic region.", "(2) An assessment of the threats and security challenges posed by adversaries operating in the Arctic region, including descriptions of such adversaries' intents and investments in Arctic capabilities.", "(3) A description of the roles and missions of each military service in the Arctic region in the context of joint operations to support the Arctic strategy, including\u2014", "(A) a description of a joint Arctic strategy for sea operations, including all military and Coast Guard vessels available for Arctic operations;", "(B) a description of a joint Arctic strategy for air operations, including all rotor and fixed wing military aircraft platforms available for Arctic operations; and", "(C) a description of a joint Arctic strategy for ground operations, including all military ground forces available for Arctic operations.", "(4) A description of near-term and long-term training, capability, and resource gaps that must be addressed to fully execute each mission described in the Arctic strategy against an increasing threat environment.", "(5) A description of the level of cooperation between the Department of Defense, any other departments and agencies of the United States Government, State and local governments, and tribal entities related to the defense of the Arctic region.", "(c) FORM OF REPORT.\u2014The report required by subsection (a) shall be submitted in unclassified form, but may include a classified annex.", "H.Rept. 115-874 also states the following:", "The conferees direct the Secretary of Defense to submit a report to the congressional defense committees not later than 180 days after the date of enactment of this Act on current cold weather capabilities and readiness of the United States Armed Forces. The report shall contain the following elements:", "(1) A description of current cold weather capabilities and training to support United States military operations in cold climates across the joint force;", "(2) A description of anticipated requirements for United States military operations in cold and extreme cold weather in the Arctic, Northeast Asia, and Northern and Eastern Europe;", "(3) A description of the current cold weather readiness of the joint force, the ability to increase cold weather training across the joint force, and any equipment, infrastructure, personnel, or resource limitations or gaps that may exist;", "(4) An analysis of potential opportunities to expand cold weather training for the Army, the Navy, the Air Force, and the Marine Corps and the resources or infrastructure required for such expansion; and", "(5) An analysis of potential partnerships with State, local, Tribal, and private entities to maximize training potential and to utilize local expertise, including traditional indigenous knowledge. (Pages 835-836)"], "subsections": []}, {"section_title": "FY2019 DOD Appropriations Act (S. 3159)", "paragraphs": ["The Senate Appropriations Committee, in its report ( S.Rept. 115-290 of June 28, 2018) on S. 3159 , states the following:", "Arctic Broadband Infrastructure .\u2014The Committee is concerned that broadband infrastructure in the Arctic, particularly in northern Alaska and the Aleutian Islands, is not capable of supporting current military operations. Therefore, the Committee directs the Secretary of Defense to conduct an evaluation of broadband infrastructure in the United States Arctic and provide a report to the congressional defense committees not later than 180 days after enactment of this act. The report shall list an inventory of all existing broadband and communications infrastructure in the Aleutian Is land chain and Alaska's northwest and northern slope communities, as well as present limitations and needs for the future. (Pages 35-36)"], "subsections": []}, {"section_title": "DOD Cooperation with Canada and Other Countries", "paragraphs": ["DOD has been taking a number of steps in recent years to strengthen U.S.-Canadian cooperation and coordination regarding military operations in the Arctic."], "subsections": []}]}, {"section_title": "Navy and Coast Guard in General", "paragraphs": ["The Navy and Coast Guard are exploring the potential implications that increased human activities in the Arctic may have for Navy and Coast Guard required numbers of ships and aircraft, ship and aircraft characteristics, new or enlarged Arctic bases, and supporting systems, such as navigation and communication systems. The Navy and Coast Guard have sponsored or participated in studies and conferences to explore these implications, the Coast Guard annually deploys cutters and aircraft into the region to perform missions and better understand the implications of operating such units there, and the Navy has deployed ships to the region.", "Points or themes that have emerged in studies, conferences, and deployments regarding the potential implications for the U.S. Navy and Coast Guard of diminished Arctic sea ice include but are not limited to the following:", "The diminishment of Arctic ice is creating potential new operating areas in the Arctic for Navy surface ships and Coast Guard cutters. U.S. national security interests in the Arctic include \"such matters as missile defense and early warning; deployment of sea and air systems for strategic sealift, strategic deterrence, maritime presence, and maritime security operations; and ensuring freedom of navigation and overflight.\" SAR in the Arctic is a mission of increasing importance, particularly for the Coast Guard, and one that poses potentially significant operational challenges (see \" Search and Rescue (SAR) \" above). More complete and detailed information on the Arctic is needed to more properly support expanded Navy and Coast Guard ship and aircraft operations in the Arctic. The Navy and the Coast Guard currently have limited infrastructure in place in the Arctic to support expanded ship and aircraft operations in the Arctic. Expanded ship and aircraft operations in the Arctic may require altering ship and aircraft designs and operating methods. Cooperation with other Arctic countries will be valuable in achieving defense and homeland security goals."], "subsections": []}, {"section_title": "Navy", "paragraphs": [], "subsections": [{"section_title": "November 2009 Navy Arctic Roadmap", "paragraphs": ["The Navy issued its first Arctic roadmap on November 10, 2009. The document, dated October 2009, was intended to guide the service's activities regarding the Arctic for the period FY2010-FY2014. The document has now been succeeded by the 2014-2030 Navy Arctic roadmap (see discussion below)."], "subsections": []}, {"section_title": "August 2011 Navy Arctic Environmental Assessment and Outlook Report", "paragraphs": ["In August 2011, the Navy released an Arctic environment assessment and outlook report. The report states the following:", "As the Arctic environment continues to change and human activity increases, the U.S. Navy must be prepared to operate in this region. It is important to note that even though the Arctic is opening up, it will continue to be a harsh and challenging environment for the foreseeable future due to hazardous sea ice, freezing temperatures and extreme weather. Although the Navy submarine fleet has decades of experience operating in the Arctic, the surface fleet, air assets, and U.S. Marine Corps ground troops have limited experience there. The Navy must now consider the Arctic in terms of future policy, strategy, force structure, and investments."], "subsections": []}, {"section_title": "November 2013 DOD Arctic Strategy", "paragraphs": ["The November 2013 DOD Arctic strategy (see discussion above in the section on DOD) states that \"The Department of the Navy, in its role as DoD Executive Agent for Maritime Domain Awareness, will lead DoD coordination on maritime detection and tracking,\" and that \"DoD will take steps to work with other Federal departments and agencies to improve nautical charts, enhance relevant atmospheric and oceanic models, improve accuracy of estimates of ice extent and thickness, and detect and monitor climate change indicators. In particular, the Department of the Navy will work in partnership with other Federal departments and agencies (e.g., DHS, the Department of Commerce) and international partners to improve hydrographic charting and oceanographic surveys in the Arctic.\""], "subsections": []}, {"section_title": "January 2014 Implementation Plan for National Strategy for Arctic Region", "paragraphs": ["The Obama Administration's January 2014 implementation plan for its national strategy for the Arctic region (see \" Background \") mentions the Navy by name only once, as one of several agencies that will \"collaborate to improve marine charting in the Arctic (Integrated Ocean and Coastal Mapping) and topographic mapping (Alaska Mapping Executive Committee).\" As noted above in the discussion of DOD in general, however, the January 2014 implementation plan makes DOD the lead federal agency for one of the plan's 36 or so specific initiatives and a supporting agency for 18 others. The Navy will likely be a prominent participant in DOD's activities for a number of these 19 initiatives."], "subsections": []}, {"section_title": "February 2014 Updated Navy Arctic Roadmap for 2014-2030", "paragraphs": ["On February 24, 2014, the Navy released an updated Arctic roadmap intended to guide Navy activities regarding the Arctic for the period 2014-2030. The document is the successor to the November 2009 Navy Arctic roadmap (see discussion above). The executive summary of the 2014-2030 Navy Arctic roadmap states the following:", "The United States Navy, as the maritime component of the Department of Defense, has global leadership responsibilities to provide ready forces for current operations and contingency response that include the Arctic Ocean. The Arctic Region remains a challenging operating environment, with a harsh climate, vast distances, and little infrastructure. These issues, coupled with limited operational experience, are just a few substantial challenges the Navy will have to overcome in the Arctic Region. While the Region is expected to remain a low threat security environment where nations resolve differences peacefully, the Navy will be prepared to prevent conflict and ensure national interests are protected....", "Navy functions in the Arctic Region are no different from those in other maritime regions; however, the Arctic Region environment makes the execution of many of these functions much more challenging....", "In support of National and Department of Defense aims, the Navy will pursue the following strategic objectives:", "\u2022 Ensure United States Arctic sovereignty and provide homeland defense ;", "\u2022 Provide ready naval forces to respond to crisis and contingencies;", "\u2022 Preserve freedom of the seas ; and", "\u2022 Promote partnerships within the United States Government and with international allies and partners....", "Resource constraints and competing near-term mission demands require that naval investments be informed, focused, and deliberate. Proactive planning today allows the Navy to prepare its forces for Arctic Region operations. This Roadmap emphasizes low-cost, long-lead activities that position the Navy to meet future demands. In the near to mid-term, the Navy will concentrate on improving operational capabilities, expertise, and capacity, extending reach, and will leverage interagency and international partners to achieve its strategic objectives. The Roadmap recognizes the need to guide investments by prudently balancing regional requirements with national goals....", "This Roadmap provides direction to the Navy for the near-term (present-2020), mid-term (2020-2030), and far-term (beyond 2030), placing particular emphasis on near-term actions necessary to enhance Navy's ability to operate in the Arctic Region in the future. In the near-term, there will be low demand for additional naval involvement in the Region. Current Navy capabilities are sufficient to meet near-term operational needs. Navy will refine doctrine, operating procedures, and tactics, techniques, and procedures to guide future potential operations in the Arctic Region. In the mid-term, the Navy will provide support to the Combatant Commanders, United States Coast Guard, and other United States Government agencies. In the far-term, increased periods of ice-free conditions could require the Navy to expand this support on a more routine basis.", "Regarding \"United States Navy Ways and Means for Near-Term, Mid-Term, and Far-Term Operations,\" the roadmap states the following:", "Near-term: Present to 2020.", "The Navy will continue to provide capability and presence primarily through undersea and air assets. Surface ship operations will be limited to open water operations in the near-term. Even in open water conditions, weather factors, including sea ice, must be considered in operational risk assessments. During shoulder seasons, the Navy may employ ice strengthened Military Sealift Command (MSC) ships to conduct Navy missions.", "By 2020, the Navy will increase the number of personnel trained in Arctic operations. The Navy will grow expertise in all domains by continuing to participate in exercises, scientific missions, and personnel exchanges in Arctic-like conditions. Personnel exchanges will provide Sailors with opportunities to learn best practices from other United States' military services, interagency partners, and international allies and partners.", "The Navy will refine or develop the necessary strategy, policy, plans, and requirements for the Arctic Region. Additionally, the Navy will continue to study and make informed decisions on pursuing investments to better facilitate Arctic operations. The Navy will emphasize low cost, long-lead time activities to match capability and capacity to future demands. The Navy will update operating requirements and procedures for personnel, ships, and aircraft to operate in the Region with interagency partners and allies. Through ongoing exercises, such as Ice Exercise (ICEX) and Scientific Ice Expeditions (SCICEX) research, and transits through the region by Navy submarines, aircraft and surface vessels, the Navy will continue to learn more about the evolving operating environment. The Navy will focus on areas where it provides unique capabilities and will leverage joint and coalition partners to fill identified gaps and seams.", "Mid-term: 2020 to 2030.", "By 2030, the Navy will have the necessary training and personnel to respond to contingencies and emergencies affecting national security. As the Arctic Ocean becomes increasingly ice-free, surface vessels will operate in the expanding open water areas. The Navy will improve its capabilities by participating in increasingly complex exercises and training with regional partners. While primary risks in the mid-term will likely be meeting search and rescue or disaster response mission demands, the Navy may also be called upon to ensure freedom of navigation in Arctic Ocean waters. The Navy will work to mitigate the gaps and seams and transition its Arctic Ocean operations from a capability to provide periodic presence to a capability to operate deliberately for sustained periods when needed.", "Far-term: Beyond 2030.", "In the far-term, Navy will be capable of supporting sustained operations in the Arctic Region as needed to meet national policy guidance. The Navy will provide trained and equipped personnel, along with surface, subsurface, and air capabilities, to achieve Combatant Commander's objectives. The high confidence of diminished ice coverage and navigable waterways for much of the year will enable naval forces to operate forward, ready to respond to any potential threat to national security, or to provide contingency response. Far-term risks include increased potential for search and rescue and DSCA [Defense Support of Civil Authorities], but may also require naval forces to have a greater focus on maritime security and freedom of navigation in the Region."], "subsections": []}, {"section_title": "2018 Reestablishment of 2nd Fleet for North Atlantic and Arctic", "paragraphs": ["In May 2018, the Navy announced that it would reestablish the 2 nd Fleet, which was the Navy's fleet during the Cold War for countering Soviet naval forces in the North Atlantic. The fleet's formal reestablishment occurred in August 2018. The 2 nd Fleet was created in 1950 and disestablished in September 2011. In its newly reestablished form, it is described as focusing on countering Russian naval forces not only in the North Atlantic but in the Arctic as well."], "subsections": []}, {"section_title": "Upcoming Freedom of Navigation (FON) Operation in Arctic", "paragraphs": ["In January 2019, the Navy announced that \"in coming months\" it will send a Navy warship through Arctic waters on a freedom of navigation (FON) operation to assert U.S. navigational rights under international law in Arctic waters. The U.S. government's FON program was established in 1979 and annually includes multiple U.S. Navy FON operations conducted in various parts of the world. The upcoming FON operation in the Arctic, however, will reportedly be the Navy's first ever FON operation in the Arctic."], "subsections": []}]}, {"section_title": "Coast Guard", "paragraphs": [], "subsections": [{"section_title": "Overview\u2014November 2015 Coast Guard Testimony", "paragraphs": ["At a November 17, 2015, hearing on Arctic operations before two subcommittees of the House Foreign Affairs Committee, the Coast Guard testified that", "The Coast Guard has been operating in the Arctic Ocean since 1867, when Alaska was purchased from Russia. Then, as now, our mission is to enforce U.S. laws and regulations, conduct search and rescue, assist scientific exploration, and foster navigation safety and environmental stewardship. The Coast Guard uses mobile command and control platforms including large cutters and ocean-going ice-strengthened buoy tenders, as well as seasonal air and communications capabilities to execute these missions within more than 950,000 square miles of ocean off the Alaskan coast.", "Since 2008, the Coast Guard has conducted operations in the Arctic Region to assess our capabilities and mission requirements as maritime activity and environmental conditions warrant. These operations have included establishing small, temporary Forward Operating Locations along the North Slope to test our capabilities with boats, helicopters, and personnel. Each year from April to November we also fly aerial sorties to evaluate activities in the region. We will continue to deploy a suite of Coast Guard cutters to test our equipment, train our crews, and increase our awareness of Arctic activity."], "subsections": []}, {"section_title": "Coast Guard High Latitude Study Provided to Congress in July 2011", "paragraphs": ["In July 2011, the Coast Guard provided to Congress a study on the Coast Guard's missions and capabilities for operations in high-latitude (i.e., polar) areas. The study, commonly known as the High Latitude Study, is dated July 2010 on its cover. The High Latitude Study concluded the following:", "[The study] concludes that future [Coast Guard] capability and capacity gaps will significantly impact four [Coast Guard] mission areas in the Arctic: Defense Readiness, Ice Operations, Marine Environmental Protection, and Ports, Waterways, and Coastal Security. These mission areas address the protection of important national interests in a geographic area where other nations are actively pursuing their own national goals. U.S. national policy and laws define the requirements to assert the nation's jurisdiction over its territory and interests; to ensure the security of its people and critical infrastructure; to participate fully in the collection of scientific knowledge; to support commercial enterprises with public utility; and to ensure that the Arctic environment is not degraded by increased human activity.", "The Coast Guard's ability to support Defense Readiness mission requirements in the Arctic is closely linked to DoD responsibilities. The Coast Guard presently possesses the only surface vessels capable of operating in ice-covered and ice-diminished waters. The Coast Guard supports (1) DoD missions such as the resupply of Thule Air Base in Greenland and logistics support (backup) for McMurdo Station in Antarctica and (2) Department of State (DoS) directed Freedom of Navigation Operations. These unique Coast Guard capabilities have been noted by the Joint Chiefs of Staff, the Navy's Task Force Climate Change, and the recently issued Naval Operations Concept 2010.", "The common and dominant contributor to these significant mission impacts is the gap in polar icebreaking capability....", "Other capability gaps contributing to the impact on Coast Guard ability to carry out its missions in the Arctic include", "\u2022 Communications System Capability \u2013 Continuous coverage along Alaska's West Coast, the Bering Strait, and throughout the North Slope is required for exchanging voice and data communications with Coast Guard units and other government and commercial platforms offshore.", "\u2022 Forward Operating Locations - No suitable facilities currently exist on the North Slope or near the Bering Strait with facilities sufficient to support extended aircraft servicing and maintenance. Aircraft must travel long distances and expend significant time transiting to and from adequate facilities. This gap reduces on-scene presence and capability to support sustained operations in the region.", "\u2022 Environmental response in ice-covered waters - The technology and procedures for assessment and mitigation measures for oil spills in ice-covered waters are not fully developed or tested.", "Capability gaps in the Arctic region have moderate impacts on [the Coast Guard's] Aids to Navigation (AtoN), Search and Rescue (SAR), and Other Law Enforcement (OLE) missions. Both AtoN and SAR involve the safety of mariners and will gain more importance not only as commerce and tourism cause an increase in maritime traffic, but as U.S. citizens in northern Alaska face more unpredictable conditions. Performance of OLE will be increasingly necessary to ensure the integrity of U.S. living marine resources from outside pressures....", "In addition to the assessment of polar icebreaking needs, the Arctic mission analysis examined a set of theoretical mixes (force packages) of Coast Guard assets consisting of icebreakers, their embarked helicopters, and deployment alternatives using aviation forward operating locations in Arctic Alaska....", "All [six] of the force mixes [considered in the study] add assets to the existing Coast Guard Alaska Patrol consisting of (1) a high-endurance cutter (not an icebreaker) deployed in the Bering Sea carrying a short range recovery helicopter, and (2) medium range recovery helicopters located at Kodiak in the Gulf of Alaska, and seasonally deployed to locations in Cold Bay and St. Paul Island....", "These force packages and associated risk assessment provide a framework for acquisition planning as the Coast Guard implements a strategy for closing the capability gaps. By first recapitalizing the aging icebreakers, the Coast Guard provides a foundation for buildout of these force mixes. In addition to the cost of the icebreakers, the force packages require investment in forward operating locations and in medium range helicopters. The mission analysis reports developed rough order-of-magnitude cost estimates for forward operating locations at approximately $36M [million] each and for helicopters at $9M each....", "The analysis shows that the current Coast Guard deployment posture is not capable of effective response in northern Alaska and that response may be improved through a mix of deployed cutters, aircraft, and supporting infrastructure including forward operating locations and communications/navigation systems."], "subsections": []}, {"section_title": "May 2013 Coast Guard Arctic Strategy", "paragraphs": ["On May 21, 2013, the Coast Guard released a strategy document for the Arctic. The executive summary of the document states the following in part:", "The U.S. Coast Guard, as the maritime component of the U.S. Department of Homeland Security (DHS), has specific statutory responsibilities in U.S. Arctic waters. This strategy outlines the ends, ways, and means for achieving strategic objectives in the Arctic over the next 10 years. The Coast Guard is responsible for ensuring safe, secure, and environmentally responsible maritime activity in U.S. Arctic waters. Our efforts must be accomplished in close coordination with DHS components, and involve facilitating commerce, managing borders, and improving resilience to disasters.", "The Coast Guard's current suite of cutters, boats, aircraft, and shore infrastructure must meet a number of near-term mission demands. The Coast Guard employs mobile command and control platforms such as large cutters and ocean-going ice-strengthened buoy tenders, as well as seasonal air and communications capabilities through leased or deployable assets and facilities. These mobile and seasonal assets and facilities have proven to be important enablers for front-line priorities in the region, including search and rescue operations, securing the maritime border, collecting critical intelligence, responding to potential disasters, and protecting the marine environment....", "Although winter sea travel is still severely limited due to extensive ice coverage across the region, recent summer and early autumn sea ice extent record lows have made seasonal maritime navigation more feasible. Economic development, in the forms of resource extraction, adventure tourism, and trans-Arctic shipping drives much of the current maritime activity in the region.", "[Oil and gas exploration] activities [in the region] bring risk, which can be mitigated through appropriate maritime governance. Additionally, tourism is increasing rapidly in the Arctic. Due to undeveloped shore-based infrastructure, much of the increased tourism is expected to involve transportation via passenger vessel, further increasing near- and offshore activities in Arctic waters.", "This document outlines three strategic objectives in the Arctic for the U.S. Coast Guard over the next 10 years:", "\u2022 Improving Awareness", "\u2022 Modernizing Governance", "\u2022 Broadening Partnerships", "Improving Awareness: Coast Guard operations require precise and ongoing awareness of activities in the maritime domain. Maritime awareness in the Arctic is currently restricted due to limited surveillance, monitoring, and information system capabilities. Persistent awareness enables identification of threats, information-sharing with front-line partners, and improved risk management. Improving awareness requires close collaboration within DHS, as well as with the Departments of State, Defense, Interior, the National Science Foundation and other stakeholders to enhance integration, innovation, and fielding of emerging technologies. The Intelligence Community and non-federal partners are also vital stakeholders.", "Modernizing Governance: The concept of governance involves institutions, structures of authority, and capabilities necessary to oversee maritime activities while safeguarding national interests. Limited awareness and oversight challenge maritime sovereignty, including the protection of natural resources and control of maritime borders. The Coast Guard will work within its authorities to foster collective efforts, both domestically and internationally, to improve Arctic governance. In so doing, the Coast Guard will review its own institutions and regimes of governance to prepare for future missions throughout the Arctic.", "Broadening Partnerships: Success in the Arctic requires a collective effort across both the public and private sectors. Such a collective effort must be inclusive of domestic regulatory regimes; international collaborative forums such as the Arctic Council, International Maritime Organization (IMO), and Inuit Circumpolar Council; domestic and international partnerships; and local engagements in Arctic communities focusing on training and volunteer service. Success in the Arctic also depends upon close intergovernmental cooperation to support national interests, including working closely within DHS, as well as with the Department of State, Department of Interior and other Federal partners as the U.S. prepares to assume Chairmanship of the Arctic Council in 2015.", "Beyond these three strategic objectives, there are a number of additional factors that will position the Coast Guard for long-term success. These factors include building national awareness of the Arctic and its opportunities, strengthening maritime regimes, improving public-private relationships through a national concept of operations, seeking necessary authorities, and identifying future requirements and resources to shape trends favorably. This strategy outlines a number of priorities, ranging from capabilities and requirements to advances in science and technology that will facilitate our Nation's success in the region. Specifically, the strategy advocates to leverage the entire DHS enterprise and component capabilities to secure our borders, prevent terrorism, adapt to changing environmental conditions, enable community resilience and inform future policy.", "Operating in the Arctic is not a new venture for the Coast Guard. However, adapting to changing conditions will require foresight, focus, and clear priorities. This strategy will ensure we attain the aim of safe, secure, and environmentally responsible maritime activity in the Arctic by improving awareness, modernizing governance, and broadening partnerships to ensure long-term success."], "subsections": []}, {"section_title": "January 2014 Implementation Plan for National Strategy for Arctic Region", "paragraphs": ["The Obama Administration's January 2014 implementation plan for its national strategy for the Arctic region (see \" Background \") makes \"Department of Homeland Security (United States Coast Guard)\" the lead federal agency for 6 of the plan's 36 or so specific initiatives, and a supporting agency for 13 others. The six initiatives where the Coast Guard is designated the lead federal agency include ", "enhance Arctic domain awareness; improve hazardous material spill prevention, containment, and response; promote Arctic oil pollution preparedness, prevention, and response internationally; enhance Arctic SAR; expedite International Maritime Organization (IMO) Polar Code development and adoption; and promote Arctic waterways management.", "For the second initiative above\u2014\"Improve Hazardous Material Spill Prevention, Containment, and Response\"\u2014the Coast Guard shares lead-agency status with the Environmental Protection Agency (EPA), with the Coast Guard being the lead federal agency for open ocean and coastal spills, and EPA being the lead federal agency for inland spills."], "subsections": []}, {"section_title": "October 2015 Agreement on Arctic Coast Guard Forum (ACGF)", "paragraphs": ["The Coast Guard, working with coast guards of other Arctic nations, in October 2015 established an Arctic Coast Guard Forum (ACGF). The Coast Guard states that", "The Arctic Coast Guard Forum (ACGF), modeled after the successful North Pacific Coast Guard Forum, is a unique maritime governance group where Principals of all eight Arctic countries discuss coordination of exercises, strengthen relationships, and share best practices. Complimentary to the Arctic Council, the chairmanship of the ACGF will reside with the country holding the rotating chair of the Arctic Council. The first \"experts-level\" meetings of the ACGF in 2014 garnered enthusiastic approval of the concept. Representatives of the eight Arctic nations finalized and agreed on a Terms of Reference document, determined working groups (Secretariat and Combined Operations), and drafted a Joint Statement. The first ever \"Heads of Arctic Coast Guards\" meeting took place on October 28-30, 2015 at the U.S. Coast Guard Academy, and the participating nations approved the Terms of Reference and released the Joint Statement."], "subsections": []}, {"section_title": "June 2016 GAO Report on Coast Guard Arctic Capabilities", "paragraphs": ["A June 2016 GAO report on Coast Guard Arctic capabilities states the following:", "The U.S. Coast Guard, within the Department of Homeland Security, reported making progress implementing its Arctic strategy. For example, the Coast Guard reported conducting exercises related to Arctic oil spill response and search and rescue, and facilitating the formation of a safety committee in the Arctic, among other tasks in its strategy. To track the status of these efforts, the Coast Guard is developing a web-based tool and anticipates finalizing the tool in mid-2016.", "The Coast Guard assessed its capability to perform its Arctic missions and identified various capability gaps\u2014including communications, infrastructure, and icebreaking, and has worked to mitigate these gaps with its Arctic partners, such as other federal agencies. Specifically, Coast Guard officials stated that the agency's actions to implement the various Arctic strategies and carry out annual Arctic operations have helped to mitigate Arctic capability gaps. However, the Coast Guard has not systematically assessed the extent to which its actions agency-wide have helped to mitigate these gaps. Coast Guard officials attributed this, in part, to not being able to unilaterally close the gaps. While mitigating these gaps requires joint efforts among Arctic partners, the Coast Guard has taken actions in the Arctic that are specific to its missions and therefore has responsibility for assessing the extent to which these actions have helped to mitigate capability gaps. By systematically assessing and measuring its progress, the Coast Guard will better understand the status of these gaps and be better positioned to effectively plan its Arctic operations.", "The Coast Guard has been unable to fulfill some of its polar icebreaking responsibilities with its aging icebreaker fleet, which currently includes two active polar icebreakers. In 2011 and 2012, the Coast Guard was unable to maintain assured, year-round access to the Arctic and did not meet 4 of 11 requests for polar icebreaking services. With its one active heavy icebreaker\u2014which has greater icebreaking capability\u2014nearing the end of its service life, the Coast Guard initiated a program in 2013 to acquire a new one and is working to determine the optimal acquisition strategy. However, the Coast Guard's efforts to acquire an icebreaker, whether by lease or purchase, will be limited by legal and operational requirements. In addition, current projections show that the Coast Guard is likely to have a 3- to 6-year gap in its heavy icebreaking capability before a new icebreaker becomes operational.... The Coast Guard is developing a strategy to determine how to best address this expected gap."], "subsections": []}, {"section_title": "March 2017 Arctic Coast Guard Forum Joint Statement", "paragraphs": ["A March 24, 2017, press report states the following:", "Coast guard leaders from the world's eight Arctic nations met in Boston Friday [March 24] to sign a joint statement for cooperation on emergency maritime response and combined operations in the high northern seas.", "U.S. Coast Guard Commandant Adm. Paul Zukunft joined leaders representing Canada, Denmark, Finland, Iceland, Norway, Sweden and the Russian Federation in the signing, and a ceremony handing off chairmanship of the group from the U.S. to the Finnish Border Guard.", "Maritime and environmental groups alike have stressed the need for closer international cooperation, as more Arctic shipping routes became navigable with retreating ice, opening access for shipping, energy and mineral exploration and commercial tourism.", "The statement adopts doctrine, tactics, procedures and information-sharing protocols for emergency maritime response and combined operations in the Arctic. It culminated two years of international collaboration, as working groups established strategies, objectives and tactics aimed towards achieving common operational goals in the region.", "So far, nation representatives have participated in table top exercises in Reykjavik, Iceland, and the District of Columbia. A live exercise in the Arctic is planned for later this year. Coast Guard officials describe the forum as \"an operationally-focused, consensus-based organization with the purpose of leveraging collective resources to foster safe, secure and environmentally responsible maritime activity in the Arctic.\"", "\"This forum \u2014 one of many ways in which the Coast Guard uses our unique roles to enhance our Nation's diplomacy \u2014 has quickly established itself as a premier platform for fostering safe, secure and environmentally responsible maritime activity in the Arctic,\" said Zukunft.", "In testimony to U.S. senators earlier this week, Zukunft spoke of the need to engage with other Arctic nations, characterizing it as a clear preference for cooperation over competition. Nevertheless, he stressed the need for the U.S. to press forward with building a new fleet of three heavy and three medium icebreakers."], "subsections": []}, {"section_title": "FY2019 DHS Appropriations Act (S. 3109)", "paragraphs": ["The Senate Appropriations Committee, in its report ( S.Rept. 115-283 of June 21, 2108) on S. 3109 , states the following:", "Arctic Program Office .\u2014Recognizing the growing national security imperatives for an enhanced U.S. presence in the Arctic, the Committee is pleased that the Coast Guard has established an Arctic Strategy, an Arctic Strategy Implementation Plan, and an Arctic Program Office. This office has furthered the Nation's national defense and security interests in the Arctic through its extensive participation, coordination, and collaboration with other international, Federal, and SLTT partners to improve awareness, broaden partnerships, and modernize governance in the Arctic. Most recently, the office supported the completion of the Bering Strait Port Access Route Study, a study that resulted in a joint recommendation by the United States and the Russian Federation to the International Maritime Organization [IMO] to establish a common vessel traffic measure. Recently approved by the IMO, the traffic measure is the first IMO-approved measure for navigation safety in polar waters. The Coast Guard is to report to the Committee if additional resources are needed for the Arctic Program Office to further its important mission. (Pages 61-62)"], "subsections": []}]}]}]}, {"section_title": "CRS Reports on Specific Arctic-Related Issues", "paragraphs": ["CRS Report RL34266, Climate Change: Science Highlights , by Jane A. Leggett", "CRS Report RS21890, The U.N. Law of the Sea Convention and\u00a0the\u00a0United States: Developments Since\u00a0October\u00a02003 , by Marjorie Ann Browne", "CRS Report RL33872, Arctic National Wildlife Refuge (ANWR): An Overview , by M. Lynne Corn, Michael Ratner, and Laura B. Comay ", "CRS Report RL32838, Arctic National Wildlife Refuge (ANWR): Votes and Legislative Actions Since the 95th Congress , by M. Lynne Corn and Beth Cook", "CRS Report RL34547, Possible Federal Revenue from Oil Development of ANWR and Nearby Areas , by Salvatore Lazzari", "CRS Report RL33705, Oil Spills: Background and Governance , by Jonathan L. Ramseur", "CRS Report RL33941, Polar Bears: Listing Under the Endangered Species Act , by Eugene H. Buck, M. Lynne Corn, and Kristina Alexander", "CRS Report RL34391, Coast Guard Polar Security Cutter (Polar Icebreaker) Program: Background and Issues for Congress , by Ronald O'Rourke ", "CRS Report RL34342, Homeland Security: Roles and Missions for United States Northern Command , by William Knight", "Appendix A. Arctic Research and Policy Act (ARPA) of 1984 (Title I of P.L. 98-373 )", "The text of the Arctic Research and Policy Act (ARPA) of 1984 (Title I of P.L. 98-373 of July 31, 1984) is as follows:", "TITLE I \u2013 ARCTIC RESEARCH AND POLICY", "SHORT TITLE", "SEC. 101. This title may be cited as the \"Arctic Research and Policy Act of 1984\".", "FINDINGS AND PURPOSES", "SEC. 102. (a) The Congress finds and declares that-", "(1) the Arctic, onshore and offshore, contains vital energy resources that can reduce the Nation's dependence on foreign oil and improve the national balance of payments;", "(2) as the Nation's only common border with the Soviet Union, the Arctic is critical to national defense;", "(3) the renewable resources of the Arctic, specifically fish and other seafood, represent one of the Nation's greatest commercial assets;", "(4) Arctic conditions directly affect global weather patterns and must be understood in order to promote better agricultural management throughout the United States;", "(5) industrial pollution not originating in the Arctic region collects in the polar air mass, has the potential to disrupt global weather patterns, and must be controlled through international cooperation and consultation;", "(6) the Arctic is a natural laboratory for research into human health and adaptation, physical and psychological, to climates of extreme cold and isolation and may provide information crucial for future defense needs;", "(7) atmospheric conditions peculiar to the Arctic make the Arctic a unique testing ground for research into high latitude communications, which is likely to be crucial for future defense needs;", "(8) Arctic marine technology is critical to cost-effective recovery and transportation of energy resources and to the national defense;", "(9) the United States has important security, economic, and environmental interests in developing and maintaining a fleet of icebreaking vessels capable of operating effectively in the heavy ice regions of the Arctic;", "(10) most Arctic-rim countries, particularly the Soviet Union, possess Arctic technologies far more advanced than those currently available in the United States;", "(11) Federal Arctic research is fragmented and uncoordinated at the present time, leading to the neglect of certain areas of research and to unnecessary duplication of effort in other areas of research;", "(12) improved logistical coordination and support for Arctic research and better dissemination of research data and information is necessary to increase the efficiency and utility of national Arctic research efforts;", "(13) a comprehensive national policy and program plan to organize and fund currently neglected scientific research with respect to the Arctic is necessary to fulfill national objectives in Arctic research;", "(14) the Federal Government, in cooperation with State and local governments, should focus its efforts on the collection and characterization of basic data related to biological, materials, geophysical, social, and behavioral phenomena in the Arctic;", "(15) research into the long-range health, environmental, and social effects of development in the Arctic is necessary to mitigate the adverse consequences of that development to the land and its residents;", "(16) Arctic research expands knowledge of the Arctic, which can enhance the lives of Arctic residents, increase opportunities for international cooperation among Arctic-rim countries, and facilitate the formulation of national policy for the Arctic; and", "(17) the Alaskan Arctic provides an essential habitat for marine mammals, migratory waterfowl, and other forms of wildlife which are important to the Nation and which are essential to Arctic residents.", "(b) The purposes of this title are-", "(1) to establish national policy, priorities, and goals and to provide a Federal program plan for basic and applied scientific research with respect to the Arctic, including natural resources and materials, physical, biological and health sciences, and social and behavioral sciences;", "(2) to establish an Arctic Research Commission to promote Arctic research and to recommend Arctic research policy;", "(3) to designate the National Science Foundation as the lead agency responsible for implementing Arctic research policy; and", "(4) to establish an Interagency Arctic Research Policy Committee to develop a national Arctic research policy and a five year plan to implement that policy.", "ARCTIC RESEARCH COMMISSION", "SEC. 103. (a) The President shall establish an Arctic Research Commission (hereafter referred to as the \"Commission\").", "(b)(1) The Commission shall be composed of five members appointed by the President, with the Director of the National Science Foundation serving as a nonvoting, ex officio member. The members appointed by the President shall include-", "(A) three members appointed from among individuals from academic or other research institutions with expertise in areas of research relating to the Arctic, including the physical, biological, health, environmental, social, and behavioral sciences;", "(B) one member appointed from among indigenous residents of the Arctic who are representative of the needs and interests of Arctic residents and who live in areas directly affected by Arctic resource development; and", "(C) one member appointed from among individuals familiar with the Arctic and representative of the needs and interests of private industry undertaking resource development in the Arctic.", "(2) The President shall designate one of the appointed members of the Commission to be chairperson of the Commission.", "(c)(1) Except as provided in paragraph (2) of this subsection, the term of office of each member of the Commission appointed under subsection (b)(1) shall be four years.", "(2) Of the members of the Commission originally appointed under subsection (b)(1)-", "(A) one shall be appointed for a term of two years;", "(B) two shall be appointed for a term of three years; and", "(C) two shall be appointed for a term of four years.", "(3) Any vacancy occurring in the membership of the Commission shall be filled, after notice of the vacancy is published in the Federal Register, in the manner provided by the preceding provisions of this section, for the remainder of the unexpired term.", "(4) A member may serve after the expiration of the member's term of office until the President appoints a successor.", "(5) A member may serve consecutive terms beyond the member's original appointment.", "(d)(1) Members of the Commission may be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5703 of title 5, United States Code. A member of the Commission not presently employed for compensation shall be compensated at a rate equal to the daily equivalent of the rate for GS-16 of the General Schedule under section 5332 of title 5, United States Code, for each day the member is engaged in the actual performance of his duties as a member of the Commission, not to exceed 90 days of service each year. Except for the purposes of chapter 81 of title 5 (relating to compensation for work injuries) and chapter 171 of title 28 (relating to tort claims), a member of the Commission shall not be considered an employee of the United States for any purpose.", "(2) The Commission shall meet at the call of its Chairman or a majority of its members.", "(3) Each Federal agency referred to in section 107(b) may designate a representative to participate as an observer with the Commission.", "These representatives shall report to and advise the Commission on the activities relating to Arctic research of their agencies.", "(4) The Commission shall conduct at least one public meeting in the State of Alaska annually.", "DUTIES OF COMMISSION", "SEC. 104. (a) The Commission shall-", "(1) develop and recommend an integrated national Arctic research policy;", "(2) in cooperation with the Interagency Arctic Research Policy Committee established under section 107, assist in establishing a national Arctic research program plan to implement the Arctic research policy;", "(3) facilitate cooperation between the Federal Government and State and local governments with respect to Arctic research;", "(4) review Federal research programs in the Arctic and suggest improvements in coordination among programs;", "(5) recommend methods to improve logistical planning and support for Arctic research as may be appropriate and in accordance with the findings and purposes of this title;", "(6) suggest methods for improving efficient sharing and dissemination of data and information on the Arctic among interested public and private institutions;", "(7) offer other recommendations and advice to the Interagency Committee established under section 107 as it may find appropriate; and", "(8) cooperate with the Governor of the State of Alaska and with agencies and organizations of that State which the Governor may designate with respect to the formulation of Arctic research policy.", "(b) Not later than January 31 of each year, the Commission shall-", "(1) publish a statement of goals and objectives with respect to Arctic research to guide the Interagency Committee established under section 107 in the performance of its duties; and", "(2) submit to the President and to the Congress a report describing the activities and accomplishments of the Commission during the immediately preceding fiscal year.", "COOPERATION WITH THE COMMISSION", "SEC. 105. (a)(1) The Commission may acquire from the head of any Federal agency unclassified data, reports, and other nonproprietary information with respect to Arctic research in the possession of the agency which the Commission considers useful in the discharge of its duties.", "(2) Each agency shall cooperate with the Commission and furnish all data, reports, and other information requested by the Commission to the extent permitted by law; except that no agency need furnish any information which it is permitted to withhold under section 552 of title 5, United States Code.", "(b) With the consent of the appropriate agency head, the Commission may utilize the facilities and services of any Federal agency to the extent that the facilities and services are needed for the establishment and development of an Arctic research policy, upon reimbursement to be agreed upon by the Commission and the agency head and taking every feasible step to avoid duplication of effort.", "(c) All Federal agencies shall consult with the Commission before undertaking major Federal actions relating to Arctic research.", "ADMINISTRATION OF THE COMMISSION", "SEC. 106. The Commission may-", "(1) in accordance with the civil service laws and subchapter III of chapter 53 of title 5, United States Code, appoint and fix the compensation of an Executive Director and necessary additional staff personnel, but not to exceed a total of seven compensated personnel;", "(2) procure temporary and intermittent services as authorized by section 3109 of title 5, United States Code;", "(3) enter into contracts and procure supplies, services, and personal property; and", "(4) enter into agreements with the General Services Administration for the procurement of necessary financial and administrative services, for which payment shall be made by reimbursement from funds of the Commission in amounts to be agreed upon by the Commission and the Administrator of the General Services Administration.", "LEAD AGENCY AND INTERAGENCY ARCTIC RESEARCH POLICY COMMITTEE", "SEC. 107. (a) The National Science Foundation is designated as the lead agency responsible for implementing Arctic research policy, and the Director of the National Science Foundation shall insure that the requirements of section 108 are fulfilled.", "(b)(1) The President shall establish an Interagency Arctic Research Policy Committee (hereinafter referred to as the \"Interagency Committee\").", "(2) The Interagency Committee shall be composed of representatives of the following Federal agencies or offices:", "(A) the National Science Foundation;", "(B) the Department of Commerce;", "(C) the Department of Defense;", "(D) the Department of Energy;", "(E) the Department of the Interior;", "(F) the Department of State;", "(G) the Department of Transportation;", "(H) the Department of Health and Human Services;", "(I) the National Aeronautics and Space Administration;", "(J) the Environmental Protection Agency; and", "(K) any other agency or office deemed appropriate.", "(3) The representative of the National Science Foundation shall serve as the Chairperson of the Interagency Committee.", "DUTIES OF THE INTERAGENCY COMMITTEE", "SEC. 108. (a) The Interagency Committee shall-", "(1) survey Arctic research conducted by Federal, State, and local agencies, universities, and other public and private institutions to help determine priorities for future Arctic research, including natural resources and materials, physical and biological sciences, and social and behavioral sciences;", "(2) work with the Commission to develop and establish an integrated national Arctic research policy that will guide Federal agencies in developing and implementing their research programs in the Arctic;", "(3) consult with the Commission on-", "(A) the development of the national Arctic research policy and the 5-year plan implementing the policy;", "(B) Arctic research programs of Federal agencies;", "(C) recommendations of the Commission on future Arctic research; and", "(D) guidelines for Federal agencies for awarding and administering Arctic research grants;", "(4) develop a 5-year plan to implement the national policy, as provided for in section 109;", "(5) provide the necessary coordination, data, and assistance for the preparation of a single integrated, coherent, and multiagency budget request for Arctic research as provided for in section 110;", "(6) facilitate cooperation between the Federal Government and State and local governments in Arctic research, and recommend the undertaking of neglected areas of research in accordance with the findings and purposes of this title;", "(7) coordinate and promote cooperative Arctic scientific research programs with other nations, subject to the foreign policy guidance of the Secretary of State;", "(8) cooperate with the Governor of the State of Alaska in fulfilling its responsibilities under this title;", "(9) promote Federal interagency coordination of all Arctic research activities, including-", "(A) logistical planning and coordination; and", "(B) the sharing of data and information associated with Arctic research, subject to section 552 of title 5, United States Code; and", "(10) provide public notice of its meetings and an opportunity for the public to participate in the development and implementation of national Arctic research policy.", "(b) Not later than January 31, 1986, and biennially thereafter, the Interagency Committee shall submit to the Congress through the President, a brief, concise report containing-", "(1) a statement of the activities and accomplishments of the Interagency Committee since its last report; and", "(2) a description of the activities of the Commission, detailing with particularity the recommendations of the Commission with respect to Federal activities in Arctic research.", "5-YEAR ARCTIC RESEARCH PLAN", "SEC. 109. (a) The Interagency Committee, in consultation with the Commission, the Governor of the State of Alaska, the residents of the Arctic, the private sector, and public interest groups, shall prepare a comprehensive 5-year program plan (hereinafter referred to as the \"Plan\") for the overall Federal effort in Arctic research. The Plan shall be prepared and submitted to the President for transmittal to the Congress within one year after the enactment of this Act and shall be revised biennially thereafter.", "(b) The Plan shall contain but need not be limited to the following elements:", "(1) an assessment of national needs and problems regarding the Arctic and the research necessary to address those needs or problems;", "(2) a statement of the goals and objectives of the Interagency Committee for national Arctic research;", "(3) a detailed listing of all existing Federal programs relating to Arctic research, including the existing goals, funding levels for each of the 5 following fiscal years, and the funds currently being expended to conduct the programs;", "(4) recommendations for necessary program changes and other proposals to meet the requirements of the policy and goals as set forth by the Commission and in the Plan as currently in effect; and", "(5) a description of the actions taken by the Interagency Committee to coordinate the budget review process in order to ensure interagency coordination and cooperation in (A) carrying out Federal Arctic research programs, and (B) eliminating unnecessary duplication of effort among these programs.", "COORDINATION AND REVIEW OF BUDGET REQUESTS", "SEC. 110. (a) The Office of Science and Technology Policy shall-", "(1) review all agency and department budget requests related to the Arctic transmitted pursuant to section 108(a)(5), in accordance with the national Arctic research policy and the 5-year program under section 108(a)(2) and section 109, respectively; and", "(2) consult closely with the Interagency Committee and the Commission to guide the Office of Science and Technology Policy's efforts.", "(b)(1) The Office of Management and Budget shall consider all Federal agency requests for research related to the Arctic as one integrated, coherent, and multiagency request which shall be reviewed by the Office of Management and Budget prior to submission of the President's annual budget request for its adherence to the Plan. The Commission shall, after submission of the President's annual budget request, review the request and report to Congress on adherence to the Plan.", "(2) The Office of Management and Budget shall seek to facilitate planning for the design, procurement, maintenance, deployment, and operations of icebreakers needed to provide a platform for Arctic research by allocating all funds necessary to support icebreaking operations, except for recurring incremental costs associated with specific projects, to the Coast Guard.", "AUTHORIZATION OF APPROPRIATIONS; NEW SPENDING AUTHORITY", "SEC. 111. (a) There are authorized to be appropriated such sums as may be necessary for carrying out this title.", "(b) Any new spending authority (within the meaning of section 401 of the Congressional Budget Act of 1974) which is provided under this title shall be effective for any fiscal year only to such extent or in such amounts as may be provided in appropriation Acts.", "DEFINITION", "SEC. 112. As used in this title, the term \"Arctic\" means all United States and foreign territory north of the Arctic Circle and all United States territory north and west of the boundary formed by the Porcupine, Yukon, and Kuskokwim Rivers; all contiguous seas, including the Arctic Ocean and the Beaufort, Bering, and Chukchi Seas; and the Aleutian chain.", "Appendix B. P.L. 101-609 of 1990, Amending Arctic Research and Policy Act (ARPA) of 1984", "The Arctic Research and Policy Act (ARPA) of 1984 (see Appendix A ) was amended by P.L. 101-609 of November 16, 1990. The text of P.L. 101-609 is as follows:", "SECTION 1. Except as specifically provided in this Act, whenever in this Act an amendment or repeal is expressed as an amendment to, or repeal of a provision, the reference shall be deemed to be made to the Arctic Research and Policy Act of 1984.", "SEC. 2. Section 103(b)(1) (15 U.S.C. 4102(b)(1)) is amended\u2014", "(1) in the text above clause (A), by striking out `five' and inserting in lieu thereof `seven';", "(2) in clause (A), by striking out `three' and inserting in lieu thereof `four'; and", "(3) in clause (C), by striking out `one member' and inserting in lieu thereof `two members'.", "SEC. 3. Section 103(d)(1) (15 U.S.C. 4102(d)(1)) is amended by striking out `GS-16' and inserting in lieu thereof `GS-18'.", "SEC. 4. (a) Section 104(a) (15 U.S.C. 4102(a)) is amended\u2014", "(1) in paragraph (4), by striking out `suggest' and inserting in lieu thereof `recommend';", "(2) in paragraph (6), by striking out `suggest' and inserting in lieu thereof `recommend';", "(3) in paragraph (7), by striking out `and' at the end thereof;", "(4) in paragraph (8), by striking out the period and inserting in lieu thereof a semicolon; and", "(5) by adding at the end thereof the following new paragraphs:", "'(9) recommend to the Interagency Committee the means for developing international scientific cooperation in the Arctic; and", "'(10) not later than January 31, 1991, and every 2 years thereafter, publish a statement of goals and objectives with respect to Arctic research to guide the Interagency Committee established under section 107 in the performance of its duties.'.", "(b) Section 104(b) is amended to read as follows:", "'(b) Not later than January 31 of each year, the Commission shall submit to the President and to the Congress a report describing the activities and accomplishments of the Commission during the immediately preceding fiscal year.'.", "SEC. 5. Section 106 (15 U.S.C. 4105) is amended\u2014", "(1) in paragraph (3), by striking out 'and' at the end thereof;", "(2) in paragraph (4), by striking out the period at the end thereof and inserting in lieu thereof; and'; and", "(3) by adding at the end thereof the following new paragraph:", "'(5) appoint, and accept without compensation the services of, scientists and engineering specialists to be advisors to the Commission. Each advisor may be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5703 of title 5, United States Code. Except for the purposes of chapter 81 of title 5 (relating to compensation for work injuries) and chapter 171 of title 28 (relating to tort claims) of the United States Code, an advisor appointed under this paragraph shall not be considered an employee of the United States for any purpose.'", "SEC. 6. Subsection (b)(2) of section 108 (15 U.S.C. 4107(b)(2)) is amended to read as follows:", "'(2) a statement detailing with particularity the recommendations of the Commission with respect to Federal interagency activities in Arctic research and the disposition and responses to those recommendations.'", "Appendix C. January 2009 Arctic Policy Directive (NSPD 66/HSPD 25)", "On January 12, 2009, the George W. Bush Administration released a presidential directive establishing a new U.S. policy for the Arctic region. The directive, dated January 9, 2009, was issued as National Security Presidential Directive 66/Homeland Security Presidential Directive 25 (NSPD 66/HSPD 25). The text of NSPD 66/HSPD 25 is as follows:", "SUBJECT: Arctic Region Policy", "I. PURPOSE", "A. This directive establishes the policy of the United States with respect to the Arctic region and directs related implementation actions. This directive supersedes Presidential Decision Directive/NSC-26 (PDD-26; issued 1994) with respect to Arctic policy but not Antarctic policy; PDD-26 remains in effect for Antarctic policy only.", "B. This directive shall be implemented in a manner consistent with the Constitution and laws of the United States, with the obligations of the United States under the treaties and other international agreements to which the United States is a party, and with customary international law as recognized by the United States, including with respect to the law of the sea.", "II. BACKGROUND", "A. The United States is an Arctic nation, with varied and compelling interests in that region. This directive takes into account several developments, including, among others: ", "1. Altered national policies on homeland security and defense;", "2. The effects of climate change and increasing human activity in the Arctic region; ", "3. The establishment and ongoing work of the Arctic Council; and", "4. A growing awareness that the Arctic region is both fragile and rich in resources. ", "III. POLICY", "A. It is the policy of the United States to:", "1. Meet national security and homeland security needs relevant to the Arctic region;", "2. Protect the Arctic environment and conserve its biological resources;", "3. Ensure that natural resource management and economic development in the region are environmentally sustainable;", "4. Strengthen institutions for cooperation among the eight Arctic nations (the United States, Canada, Denmark, Finland, Iceland, Norway, the Russian Federation, and Sweden);", "5. Involve the Arctic's indigenous communities in decisions that affect them; and", "6. Enhance scientific monitoring and research into local, regional, and global environmental issues.", "B. National Security and Homeland Security Interests in the Arctic", "1. The United States has broad and fundamental national security interests in the Arctic region and is prepared to operate either independently or in conjunction with other states to safeguard these interests. These interests include such matters as missile defense and early warning; deployment of sea and air systems for strategic sealift, strategic deterrence, maritime presence, and maritime security operations; and ensuring freedom of navigation and overflight.", "2. The United States also has fundamental homeland security interests in preventing terrorist attacks and mitigating those criminal or hostile acts that could increase the United States vulnerability to terrorism in the Arctic region.", "3. The Arctic region is primarily a maritime domain; as such, existing policies and authorities relating to maritime areas continue to apply, including those relating to law enforcement.[1] Human activity in the Arctic region is increasing and is projected to increase further in coming years. This requires the United States to assert a more active and influential national presence to protect its Arctic interests and to project sea power throughout the region.", "4. The United States exercises authority in accordance with lawful claims of United States sovereignty, sovereign rights, and jurisdiction in the Arctic region, including sovereignty within the territorial sea, sovereign rights and jurisdiction within the United States exclusive economic zone and on the continental shelf, and appropriate control in the United States contiguous zone.", "5. Freedom of the seas is a top national priority. The Northwest Passage is a strait used for international navigation, and the Northern Sea Route includes straits used for international navigation; the regime of transit passage applies to passage through those straits. Preserving the rights and duties relating to navigation and overflight in the Arctic region supports our ability to exercise these rights throughout the world, including through strategic straits.", "6. Implementation: In carrying out this policy as it relates to national security and homeland security interests in the Arctic, the Secretaries of State, Defense, and Homeland Security, in coordination with heads of other relevant executive departments and agencies, shall:", "a. Develop greater capabilities and capacity, as necessary, to protect United States air, land, and sea borders in the Arctic region;", "b. Increase Arctic maritime domain awareness in order to protect maritime commerce, critical infrastructure, and key resources; ", "c. Preserve the global mobility of United States military and civilian vessels and aircraft throughout the Arctic region;", "d. Project a sovereign United States maritime presence in the Arctic in support of essential United States interests; and", "e. Encourage the peaceful resolution of disputes in the Arctic region.", "C. International Governance", "1. The United States participates in a variety of fora, international organizations, and bilateral contacts that promote United States interests in the Arctic. These include the Arctic Council, the International Maritime Organization (IMO), wildlife conservation and management agreements, and many other mechanisms. As the Arctic changes and human activity in the region increases, the United States and other governments should consider, as appropriate, new international arrangements or enhancements to existing arrangements.", "2. The Arctic Council has produced positive results for the United States by working within its limited mandate of environmental protection and sustainable development. Its subsidiary bodies, with help from many United States agencies, have developed and undertaken projects on a wide range of topics. The Council also provides a beneficial venue for interaction with indigenous groups. It is the position of the United States that the Arctic Council should remain a high-level forum devoted to issues within its current mandate and not be transformed into a formal international organization, particularly one with assessed contributions. The United States is nevertheless open to updating the structure of the Council, including consolidation of, or making operational changes to, its subsidiary bodies, to the extent such changes can clearly improve the Council's work and are consistent with the general mandate of the Council.", "3. The geopolitical circumstances of the Arctic region differ sufficiently from those of the Antarctic region such that an \"Arctic Treaty\" of broad scope\u2014along the lines of the Antarctic Treaty\u2014is not appropriate or necessary. ", "4. The Senate should act favorably on U.S. accession to the U.N. Convention on the Law of the Sea promptly, to protect and advance U.S. interests, including with respect to the Arctic. Joining will serve the national security interests of the United States, including the maritime mobility of our Armed Forces worldwide. It will secure U.S. sovereign rights over extensive marine areas, including the valuable natural resources they contain. Accession will promote U.S. interests in the environmental health of the oceans. And it will give the United States a seat at the table when the rights that are vital to our interests are debated and interpreted.", "5. Implementation: In carrying out this policy as it relates to international governance, the Secretary of State, in coordination with heads of other relevant executive departments and agencies, shall:", "a. Continue to cooperate with other countries on Arctic issues through the United Nations (U.N.) and its specialized agencies, as well as through treaties such as the U.N. Framework Convention on Climate Change, the Convention on International Trade in Endangered Species of Wild Fauna and Flora, the Convention on Long Range Transboundary Air Pollution and its protocols, and the Montreal Protocol on Substances that Deplete the Ozone Layer;", "b. Consider, as appropriate, new or enhanced international arrangements for the Arctic to address issues likely to arise from expected increases in human activity in that region, including shipping, local development and subsistence, exploitation of living marine resources, development of energy and other resources, and tourism; ", "c. Review Arctic Council policy recommendations developed within the ambit of the Council's scientific reviews and ensure the policy recommendations are subject to review by Arctic governments; and", "d. Continue to seek advice and consent of the United States Senate to accede to the 1982 Law of the Sea Convention.", "D. Extended Continental Shelf and Boundary Issues", "1. Defining with certainty the area of the Arctic seabed and subsoil in which the United States may exercise its sovereign rights over natural resources such as oil, natural gas, methane hydrates, minerals, and living marine species is critical to our national interests in energy security, resource management, and environmental protection. The most effective way to achieve international recognition and legal certainty for our extended continental shelf is through the procedure available to States Parties to the U.N. Convention on the Law of the Sea.", "2. The United States and Canada have an unresolved boundary in the Beaufort Sea. United States policy recognizes a boundary in this area based on equidistance. The United States recognizes that the boundary area may contain oil, natural gas, and other resources.", "3. The United States and Russia are abiding by the terms of a maritime boundary treaty concluded in 1990, pending its entry into force. The United States is prepared to enter the agreement into force once ratified by the Russian Federation.", "4. Implementation: In carrying out this policy as it relates to extended continental shelf and boundary issues, the Secretary of State, in coordination with heads of other relevant executive departments and agencies, shall:", "a. Take all actions necessary to establish the outer limit of the continental shelf appertaining to the United States, in the Arctic and in other regions, to the fullest extent permitted under international law; ", "b. Consider the conservation and management of natural resources during the process of delimiting the extended continental shelf; and ", "c. Continue to urge the Russian Federation to ratify the 1990 United States-Russia maritime boundary agreement.", "E. Promoting International Scientific Cooperation", "1. Scientific research is vital for the promotion of United States interests in the Arctic region. Successful conduct of U.S. research in the Arctic region requires access throughout the Arctic Ocean and to terrestrial sites, as well as viable international mechanisms for sharing access to research platforms and timely exchange of samples, data, and analyses. Better coordination with the Russian Federation, facilitating access to its domain, is particularly important.", "2. The United States promotes the sharing of Arctic research platforms with other countries in support of collaborative research that advances fundamental understanding of the Arctic region in general and potential Arctic change in particular. This could include collaboration with bodies such as the Nordic Council and the European Polar Consortium, as well as with individual nations.", "3. Accurate prediction of future environmental and climate change on a regional basis, and the delivery of near real-time information to end-users, requires obtaining, analyzing, and disseminating accurate data from the entire Arctic region, including both paleoclimatic data and observational data. The United States has made significant investments in the infrastructure needed to collect environmental data in the Arctic region, including the establishment of portions of an Arctic circumpolar observing network through a partnership among United States agencies, academic collaborators, and Arctic residents. The United States promotes active involvement of all Arctic nations in these efforts in order to advance scientific understanding that could provide the basis for assessing future impacts and proposed response strategies.", "4. United States platforms capable of supporting forefront research in the Arctic Ocean, including portions expected to be ice-covered for the foreseeable future, as well as seasonally ice-free regions, should work with those of other nations through the establishment of an Arctic circumpolar observing network. All Arctic nations are members of the Group on Earth Observations partnership, which provides a framework for organizing an international approach to environmental observations in the region. In addition, the United States recognizes that academic and research institutions are vital partners in promoting and conducting Arctic research.", "5. Implementation: In carrying out this policy as it relates to promoting scientific international cooperation, the Secretaries of State, the Interior, and Commerce and the Director of the National Science Foundation, in coordination with heads of other relevant executive departments and agencies, shall:", "a. Continue to play a leadership role in research throughout the Arctic region;", "b. Actively promote full and appropriate access by scientists to Arctic research sites through bilateral and multilateral measures and by other means;", "c. Lead the effort to establish an effective Arctic circumpolar observing network with broad partnership from other relevant nations; ", "d. Promote regular meetings of Arctic science ministers or research council heads to share information concerning scientific research opportunities and to improve coordination of international Arctic research programs;", "e. Work with the Interagency Arctic Research Policy Committee (IARPC) to promote research that is strategically linked to U.S. policies articulated in this directive, with input from the Arctic Research Commission; and", "f. Strengthen partnerships with academic and research institutions and build upon the relationships these institutions have with their counterparts in other nations.", "F. Maritime Transportation in the Arctic Region", "1. The United States priorities for maritime transportation in the Arctic region are:", "a. To facilitate safe, secure, and reliable navigation; ", "b. To protect maritime commerce; and ", "c. To protect the environment.", "2. Safe, secure, and environmentally sound maritime commerce in the Arctic region depends on infrastructure to support shipping activity, search and rescue capabilities, short- and long-range aids to navigation, high-risk area vessel-traffic management, iceberg warnings and other sea ice information, effective shipping standards, and measures to protect the marine environment. In addition, effective search and rescue in the Arctic will require local, State, Federal, tribal, commercial, volunteer, scientific, and multinational cooperation.", "3. Working through the International Maritime Organization (IMO), the United States promotes strengthening existing measures and, as necessary, developing new measures to improve the safety and security of maritime transportation, as well as to protect the marine environment in the Arctic region. These measures may include ship routing and reporting systems, such as traffic separation and vessel traffic management schemes in Arctic chokepoints; updating and strengthening of the Guidelines for Ships Operating in Arctic Ice-Covered Waters; underwater noise standards for commercial shipping; a review of shipping insurance issues; oil and other hazardous material pollution response agreements; and environmental standards. ", "4. Implementation: In carrying out this policy as it relates to maritime transportation in the Arctic region, the Secretaries of State, Defense, Transportation, Commerce, and Homeland Security, in coordination with heads of other relevant executive departments and agencies, shall:", "a. Develop additional measures, in cooperation with other nations, to address issues that are likely to arise from expected increases in shipping into, out of, and through the Arctic region;", "b. Commensurate with the level of human activity in the region, establish a risk-based capability to address hazards in the Arctic environment. Such efforts shall advance work on pollution prevention and response standards; determine basing and logistics support requirements, including necessary airlift and icebreaking capabilities; and improve plans and cooperative agreements for search and rescue;", "c. Develop Arctic waterways management regimes in accordance with accepted international standards, including vessel traffic-monitoring and routing; safe navigation standards; accurate and standardized charts; and accurate and timely environmental and navigational information; and", "d. Evaluate the feasibility of using access through the Arctic for strategic sealift and humanitarian aid and disaster relief.", "G. Economic Issues, Including Energy", "1. Sustainable development in the Arctic region poses particular challenges. Stakeholder input will inform key decisions as the United States seeks to promote economic and energy security. Climate change and other factors are significantly affecting the lives of Arctic inhabitants, particularly indigenous communities. The United States affirms the importance to Arctic communities of adapting to climate change, given their particular vulnerabilities.", "2. Energy development in the Arctic region will play an important role in meeting growing global energy demand as the area is thought to contain a substantial portion of the world's undiscovered energy resources. The United States seeks to ensure that energy development throughout the Arctic occurs in an environmentally sound manner, taking into account the interests of indigenous and local communities, as well as open and transparent market principles. The United States seeks to balance access to, and development of, energy and other natural resources with the protection of the Arctic environment by ensuring that continental shelf resources are managed in a responsible manner and by continuing to work closely with other Arctic nations.", "3. The United States recognizes the value and effectiveness of existing fora, such as the Arctic Council, the International Regulators Forum, and the International Standards Organization. ", "4. Implementation: In carrying out this policy as it relates to economic issues, including energy, the Secretaries of State, the Interior, Commerce, and Energy, in coordination with heads of other relevant executive departments and agencies, shall: ", "a. Seek to increase efforts, including those in the Arctic Council, to study changing climate conditions, with a view to preserving and enhancing economic opportunity in the Arctic region. Such efforts shall include inventories and assessments of villages, indigenous communities, subsistence opportunities, public facilities, infrastructure, oil and gas development projects, alternative energy development opportunities, forestry, cultural and other sites, living marine resources, and other elements of the Arctic's socioeconomic composition; ", "b. Work with other Arctic nations to ensure that hydrocarbon and other development in the Arctic region is carried out in accordance with accepted best practices and internationally recognized standards and the 2006 Group of Eight (G-8) Global Energy Security Principles;", "c. Consult with other Arctic nations to discuss issues related to exploration, production, environmental and socioeconomic impacts, including drilling conduct, facility sharing, the sharing of environmental data, impact assessments, compatible monitoring programs, and reservoir management in areas with potentially shared resources; ", "d. Protect United States interests with respect to hydrocarbon reservoirs that may overlap boundaries to mitigate adverse environmental and economic consequences related to their development;", "e. Identify opportunities for international cooperation on methane hydrate issues, North Slope hydrology, and other matters; ", "f. Explore whether there is a need for additional fora for informing decisions on hydrocarbon leasing, exploration, development, production, and transportation, as well as shared support activities, including infrastructure projects; and", "g. Continue to emphasize cooperative mechanisms with nations operating in the region to address shared concerns, recognizing that most known Arctic oil and gas resources are located outside of United States jurisdiction. ", "H. Environmental Protection and Conservation of Natural Resources", "1. The Arctic environment is unique and changing. Increased human activity is expected to bring additional stressors to the Arctic environment, with potentially serious consequences for Arctic communities and ecosystems. ", "2. Despite a growing body of research, the Arctic environment remains poorly understood. Sea ice and glaciers are in retreat. Permafrost is thawing and coasts are eroding. Pollutants from within and outside the Arctic are contaminating the region. Basic data are lacking in many fields. High levels of uncertainty remain concerning the effects of climate change and increased human activity in the Arctic. Given the need for decisions to be based on sound scientific and socioeconomic information, Arctic environmental research, monitoring, and vulnerability assessments are top priorities. For example, an understanding of the probable consequences of global climate variability and change on Arctic ecosystems is essential to guide the effective long-term management of Arctic natural resources and to address socioeconomic impacts of changing patterns in the use of natural resources.", "3. Taking into account the limitations in existing data, United States efforts to protect the Arctic environment and to conserve its natural resources must be risk-based and proceed on the basis of the best available information.", "4. The United States supports the application in the Arctic region of the general principles of international fisheries management outlined in the 1995 Agreement for the Implementation of the Provisions of the United Nations Convention on the Law of the Sea of December 10, 1982, relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks and similar instruments. The United States endorses the protection of vulnerable marine ecosystems in the Arctic from destructive fishing practices and seeks to ensure an adequate enforcement presence to safeguard Arctic living marine resources.", "5. With temperature increases in the Arctic region, contaminants currently locked in the ice and soils will be released into the air, water, and land. This trend, along with increased human activity within and below the Arctic, will result in increased introduction of contaminants into the Arctic, including both persistent pollutants (e.g., persistent organic pollutants and mercury) and airborne pollutants (e.g., soot).", "6. Implementation: In carrying out this policy as it relates to environmental protection and conservation of natural resources, the Secretaries of State, the Interior, Commerce, and Homeland Security and the Administrator of the Environmental Protection Agency, in coordination with heads of other relevant executive departments and agencies, shall:", "a. In cooperation with other nations, respond effectively to increased pollutants and other environmental challenges;", "b. Continue to identify ways to conserve, protect, and sustainably manage Arctic species and ensure adequate enforcement presence to safeguard living marine resources, taking account of the changing ranges or distribution of some species in the Arctic. For species whose range includes areas both within and beyond United States jurisdiction, the United States shall continue to collaborate with other governments to ensure effective conservation and management;", "c. Seek to develop ways to address changing and expanding commercial fisheries in the Arctic, including through consideration of international agreements or organizations to govern future Arctic fisheries;", "d. Pursue marine ecosystem-based management in the Arctic; and ", "e. Intensify efforts to develop scientific information on the adverse effects of pollutants on human health and the environment and work with other nations to reduce the introduction of key pollutants into the Arctic.", "IV. Resources and Assets", "A. Implementing a number of the policy elements directed above will require appropriate resources and assets. These elements shall be implemented consistent with applicable law and authorities of agencies, or heads of agencies, vested by law, and subject to the availability of appropriations. The heads of executive departments and agencies with responsibilities relating to the Arctic region shall work to identify future budget, administrative, personnel, or legislative proposal requirements to implement the elements of this directive.", "\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014", "[1] These policies and authorities include Freedom of Navigation (PDD/NSC-32), the U.S. Policy on Protecting the Ocean Environment (PDD/NSC-36), Maritime Security Policy (NSPD-41/HSPD-13), and the National Strategy for Maritime Security (NSMS).", "Appendix D. May 2013 National Strategy for Arctic\u00a0Region", "On May 10, 2013, the Obama Administration released a document entitled National Strategy for the Arctic Region . The executive summary of the document is reprinted earlier in this report (see \" May 2013 National Strategy for Arctic Region \" in \" Background \"). This appendix reprints the main text of the document. The main text states the following:", "Introduction", "We seek an Arctic region that is stable and free of conflict, where nations act responsibly in a spirit of trust and cooperation, and where economic and energy resources are developed in a sustainable manner that also respects the fragile environment and the interests and cultures of indigenous peoples.", "As the United States addresses these opportunities and challenges, we will be guided by our central interests in the Arctic region, which include providing for the security of the United States; protecting the free flow of resources and commerce; protecting the environment; addressing the needs of indigenous communities; and enabling scientific research. In protecting these interests, we draw from our long-standing policy and approach to the global maritime spaces in the 20 th century, including freedom of navigation and overflight and other internationally lawful uses of the sea and airspace related to these freedoms; security on the oceans; maintaining strong relationships with allies and partners; and peaceful resolution of disputes without coercion.", "To achieve this vision, the United States is establishing an overarching national approach to advance national security interests, pursue responsible stewardship of this precious and unique region, and serve as a basis for cooperation with other Arctic states and the international community as a whole to advance common interests.", "Even as we work domestically and internationally to minimize the effects of climate change, the effects are already apparent in the Arctic. Ocean resources are more readily accessible as sea ice diminishes, but thawing ground is threatening communities as well as hindering land-based activities, including access to resources. Diminishing land and sea ice is altering ecosystems and the services they provide. As an Arctic nation, the United States must be proactive and disciplined in addressing changing regional conditions and in developing adaptive strategies to protect its interests. An undisciplined approach to exploring new opportunities in this frontier could result in significant harm to the region, to our national security interests, and to the global good.", "When implementing this strategy, the United States will proceed in a thoughtful, responsible manner that leverages expertise, resources, and cooperation from the State of Alaska, Alaska Natives, and stakeholders across the entire nation and throughout the international community. We will encourage and use science-informed decisionmaking to aid this effort. We will endeavor to do no harm to the sensitive environment or to Alaska native communities and other indigenous populations that rely on Arctic resources. Just as a common spirit and shared vision of peaceful partnership led to the development of an international space station, we believe much can be achieved in the Arctic region through collaborative international efforts, coordinated investments, and public-private partnerships.", "Structure of the Strategy", "Through this National Strategy for the Arctic Region, we seek to guide, prioritize, and synchronize efforts to protect U.S. national and homeland security interests, promote responsible stewardship, and foster international cooperation.", "This strategy articulates three priority lines of effort. It also identifies guiding principles as a foundation for Arctic region activities. Through a deliberate emphasis on the priority lines of effort and objectives, it aims to achieve a national unity of effort that is consistent with our domestic and international legal rights, obligations, and commitments and that is well coordinated with our Arctic neighbors and the international community. These lines of effort identify common themes where specific emphasis and activities will be focused to ensure that strategic priorities are met. The three lines of effort, as well as the guiding principles are meant to be acted upon as a coherent whole.", "Changing Conditions", "While the Arctic region has experienced warming and cooling cycles over millennia, the current warming trend is unlike anything previously recorded. The reduction in sea ice has been dramatic, abrupt, and unrelenting. The dense, multi-year ice is giving way to thin layers of seasonal ice, making more of the region navigable year-round. Scientific estimates of technically recoverable conventional oil and gas resources north of the Arctic Circle total approximately 13 percent of the world's undiscovered oil and 30 percent of the world's undiscovered gas deposits, as well as vast quantities of mineral resources, including rare earth elements, iron ore, and nickel. These estimates have inspired fresh ideas for commercial initiatives and infrastructure development in the region. As portions of the Arctic Ocean become more navigable, there is increasing interest in the viability of the Northern Sea Route and other potential routes, including the Northwest Passage, as well as in development of Arctic resources.", "For all of the opportunities emerging with the increasing accessibility and economic and strategic interests in the Arctic, the opening and rapid development of the Arctic region presents very real challenges. On the environmental front, reduced sea ice is having an immediate impact on indigenous populations as well as on fish and wildlife. Moreover, there may be potentially profound environmental consequences of continued ocean warming and Arctic ice melt. These consequences include altering the climate of lower latitudes, risking the stability of Greenland's ice sheet, and accelerating the thawing of the Arctic permafrost in which large quantities of methane \u2013 a potent driver of climate change \u2013 as well as pollutants such as mercury are stored. Uncoordinated development \u2013 and the consequent increase in pollution such as emissions of black carbon or other substances from fossil fuel combustion \u2013 could have unintended consequences on climate trends, fragile ecosystems, and Arctic communities. It is imperative that the United States proactively establish national priorities and objectives for the Arctic region.", "Lines of Effort", "To meet the challenges and opportunities in the Arctic region, and in furtherance of established Arctic Region Policy, we will pursue the following lines of effort and supporting objectives in a mutually reinforcing manner that incorporates the broad range of U.S. current activities and interests in the Arctic region.", "1. Advance United States Security Interests", "Our highest priority is to protect the American people, our sovereign territory and rights, natural resources, and interests of the United States. To this end, the United States will identify, develop, and maintain the capacity and capabilities necessary to promote safety, security, and stability in the region through a combination of independent action, bilateral initiatives, and multilateral cooperation. We acknowledge that the protection of our national security interests in the Arctic region must be undertaken with attention to environmental, cultural, and international considerations outlined throughout this strategy. As many nations across the world aspire to expand their role in the Arctic, we encourage Arctic and non-Arctic states to work collaboratively through appropriate fora to address the emerging challenges and opportunities in the Arctic region, while we remain vigilant to protect the security interests of the United States and our allies.", "To accomplish this line of effort, the United States Government will seek to:", "\u2022 Evolve Arctic Infrastructure and Strategic Capabilities \u2013 Working cooperatively with the State of Alaska, local, and tribal authorities, as well as public and private sector partners, we will develop, maintain, and exercise the capacity to execute Federal responsibilities in our Arctic waters, airspace, and coastal regions, including the capacity to respond to natural or man-made disasters. We will carefully tailor this regional infrastructure, as well as our response capacity, to the evolving human and commercial activity in the Arctic region.", "\u2022 Enhance Arctic Domain Awareness \u2013 We seek to improve our awareness of activities, conditions, and trends in the Arctic region that may affect our safety, security, environmental, or commercial interests. The United States will endeavor to appropriately enhance sea, air, and space capabilities as Arctic conditions change, and to promote maritime-related information sharing with international, public, and private sector partners, to support implementation of activities such as the search-and-rescue agreement signed by Arctic states.", "\u2022 Preserve Arctic Region Freedom of the Seas \u2013 The United States has a national interest in preserving all of the rights, freedoms, and uses of the sea and airspace recognized under international law. We will enable prosperity and safe transit by developing and maintaining sea, under-sea, and air assets and necessary infrastructure. In addition, the United States will support the enhancement of national defense, law enforcement, navigation safety, marine environment response, and search-and-rescue capabilities. Existing international law provides a comprehensive set of rules governing the rights, freedoms, and uses of the world's oceans and airspace, including the Arctic. The law recognizes these rights, freedoms, and uses for commercial and military vessels and aircraft. Within this framework, we shall further develop Arctic waterways management regimes, including traffic separation schemes, vessel tracking, and ship routing, in collaboration with partners. We will also encourage other nations to adhere to internationally accepted principles. This cooperation will facilitate strategic partnerships that promote innovative, low-cost solutions that enhance the Arctic marine transportation system and the safe, secure, efficient and free flow of trade.", "\u2022 Provide for Future United States Energy Security \u2013 The Arctic region's energy resources factor into a core component of our national security strategy: energy security. The region holds sizable proved and potential oil and natural gas resources that will likely continue to provide valuable supplies to meet U.S. energy needs. Continuing to responsibly develop Arctic oil and gas resources aligns with the United States \"all of the above\" approach to developing new domestic energy sources, including renewables, expanding oil and gas production, and increasing efficiency and conservation efforts to reduce our reliance on imported oil and strengthen our nation's energy security. Within the context of this broader energy security strategy, including our economic, environmental and climate policy objectives, we are committed to working with stakeholders, industry, and other Arctic states to explore the energy resource base, develop and implement best practices, and share experiences to enable the environmentally responsible production of oil and natural gas as well as renewable energy.", "2. Pursue Responsible Arctic Region Stewardship", "Responsible stewardship requires active conservation of resources, balanced management, and the application of scientific and traditional knowledge of physical and living environments. As Arctic environments change, increased human activity demands precaution, as well as greater knowledge to inform responsible decisions. Together, Arctic nations can responsibly meet new demands \u2013 including maintaining open sea lanes for global commerce and scientific research, charting and mapping, providing search-and-rescue services, and developing capabilities to prevent, contain, and respond to oil spills and accidents \u2013 by increasing knowledge and integrating Arctic management. We must improve our ability to forecast future conditions in the Arctic while being mindful of the potential for unexpected developments.", "To realize this line of effort, we will pursue the specific objectives outlined below:", "\u2022 Protect the Arctic Environment and Conserve Arctic Natural Resources \u2013 Protecting the unique and changing environment of the Arctic is a central goal of U.S. policy. Supporting actions will promote healthy, sustainable, and resilient ecosystems over the long term, supporting a full range of ecosystem services. This effort will be risk-based and proceed on the basis of best available information. The United States in the Arctic will assess and monitor the status of ecosystems and the risks of climate change and other stressors to prepare for and respond effectively to environmental challenges.", "\u2022 Use Integrated Arctic Management to Balance Economic Development, Environmental Protection, and Cultural Values \u2013 Natural resource management will be based on a comprehensive understanding of environmental and cultural sensitivities in the region, and address expectations for future infrastructure needs and other development-related trends. This endeavor can promote unity of effort and provide the basis for sensible infrastructure and other resource management decisions in the Arctic. We will emphasize science-informed decisionmaking and integration of economic, environmental, and cultural values. We will also advance coordination among Federal departments and agencies and collaboration with partners engaged in Arctic stewardship activities.", "\u2022 Increase Understanding of the Arctic through Scientific Research and Traditional Knowledge \u2013 Proper stewardship of the Arctic requires understanding of how the environment is changing, and such understanding will be based on a holistic earth system approach. Vast areas of the Arctic Ocean are unexplored, and we lack much of the basic knowledge necessary to understand and address Arctic issues. The changes in the Arctic cannot be understood in isolation and must be viewed in a global context. As we learn more about the region, we have identified several key subcomponents of the Arctic that require urgent attention: land ice and its role in changing sea level; sea-ice and its role in global climate, fostering biodiversity, and supporting Arctic peoples; and, the warming permafrost and its effects on infrastructure and climate. Better earth system-level knowledge will also help us meet operational needs such as weather and ice forecasting. We can make faster progress through a well-coordinated and transparent national and international exploration and research agenda that reduces the potential for duplication of effort and leads to better leveraging of resources.", "\u2022 Chart the Arctic region \u2013 We will continue to make progress in charting and mapping the Arctic region's ocean and waterways, so long obscured by perennial ice, and mapping its coastal and interior lands according to reliable, modern standards. Given the vast expanse of territory and water to be charted and mapped, we will need to prioritize and synchronize charting efforts to make more effective use of resources and attain faster progress. In so doing, we will make navigation safer and contribute to the identification of ecologically sensitive areas and reserves of natural resources.", "3. Strengthen International Cooperation", "What happens in one part of the Arctic region can have significant implications for the interests of other Arctic states and the international community as a whole. The remote and complex operating conditions in the Arctic environment make the region well-suited for collaborative efforts by nations seeking to explore emerging opportunities while emphasizing ecological awareness and preservation. We will seek to strengthen partnerships through existing multilateral fora and legal frameworks dedicated to common Arctic issues. We will also pursue new arrangements for cooperating on issues of mutual interest or concern and addressing unique and unprecedented challenges, as appropriate.", "U.S. efforts to strengthen international cooperation and partnerships will be pursued through four objectives:", "\u2022 Pursue Arrangements that Promote Shared Arctic State Prosperity, Protect the Arctic Environment, and Enhance Security \u2013 We will seek opportunities to pursue efficient and effective joint ventures, based on shared values that leverage each Arctic state's strengths. This collaboration will assist in guiding investments and regional activities, addressing dynamic trends, and promoting sustainable development in the Arctic region.", "Arctic nations have varied commercial, cultural, environmental, safety, and security concerns in the Arctic region. Nevertheless, our common interests make these nations ideal partners in the region. We seek new opportunities to advance our interests by proactive engagement with other Arctic nations through bilateral and multilateral efforts using of a wide array of existing multilateral mechanisms that have responsibilities relating to the Arctic region.", "As appropriate, we will work with other Arctic nations to develop new coordination mechanisms to keep the Arctic region prosperous, environmentally sustainable, operationally safe, secure, and free of conflict, and will protect U.S., allied, and regional security and economic interests.", "\u2022 Work through the Arctic Council to Advance U.S. Interests in the Arctic Region \u2013 In recent years, the Arctic Council has facilitated notable achievements in the promotion of cooperation, coordination, and interaction among Arctic states and Arctic indigenous peoples. Recent successes of the Council include its advancement of public safety and environmental protection issues, as evidenced by the 2011 Arctic Search-and-Rescue Agreement and by the 2013 Arctic Marine Oil Pollution Preparedness and Response Agreement. The United States will continue to emphasize the Arctic Council as a forum for facilitating Arctic states' cooperation on myriad issues of mutual interest within its current mandate.", "\u2022 Accede to the Law of the Sea Convention \u2013 Accession to the Convention would protect U.S. rights, freedoms, and uses of the sea and airspace throughout the Arctic region, and strengthen our arguments for freedom of navigation and overflight through the Northwest Passage and the Northern Sea Route. The United States is the only Arctic state that is not party to the Convention. Only by joining the Convention can we maximize legal certainty and best secure international recognition of our sovereign rights with respect to the U.S. extended continental shelf in the Arctic and elsewhere, which may hold vast oil, gas, and other resources. Our extended continental shelf claim in the Arctic region could extend more than 600 nautical miles from the north coast of Alaska.", "In instances where the maritime zones of coastal nations overlap, Arctic states have already begun the process of negotiating and concluding maritime boundary agreements, consistent with the Law of the Sea Convention and other relevant international law. The United States supports peaceful management and resolution of disputes, in a manner free from coercion. While the United States is not currently a party to the Convention, we will continue to support and observe principles of established customary international law reflected in the Convention.", "\u2022 Cooperate with other Interested Parties \u2013 A growing number of non-Arctic states and numerous non-state actors have expressed increased interest in the Arctic region. The United States and other Arctic nations should seek to work with other states and entities to advance common objectives in the Arctic region in a manner that protects Arctic states' national interests and resources. One key example relates to the promotion of safe, secure, and reliable Arctic shipping, a goal that is best pursued through the International Maritime Organization in coordination with other Arctic states, major shipping states, the shipping industry and other relevant interests.", "Guiding Principles", "The U.S. approach to the Arctic region must reflect our values as a nation and as a member of the global community. We will approach holistically our interests in promoting safety and security, advancing economic and energy development, protecting the environment, addressing climate change and respecting the needs of indigenous communities and Arctic state interests. To guide our efforts, we have identified the following principles to serve as the foundation for U.S. Arctic engagement and activities.", "\u2022 Safeguard Peace and Stability by working to maintain and preserve the Arctic region as an area free of conflict, acting in concert with allies, partners, and other interested parties. This principle will include United States action, and the actions of other interested countries, in supporting and preserving international legal principles of freedom of navigation and overflight and other uses of the sea related to these freedoms, unimpeded lawful commerce, and the peaceful resolution of disputes. The United States will rely on existing international law, which provides a comprehensive set of rules governing the rights, freedoms, and uses of the world's oceans and airspace, including the Arctic.", "\u2022 Make Decisions Using the Best Available Information by promptly sharing \u2013 nationally and internationally \u2013 the most current understanding and forecasts based on up-to-date science and traditional knowledge.", "\u2022 Pursue Innovative Arrangements to support the investments in scientific research, marine transportation infrastructure requirements, and other support capability and capacity needs in this region. The harshness of the Arctic climate and the complexity associated with developing, maintaining, and operating infrastructure and capabilities in the region necessitate new thinking on public-private and multinational partnerships.", "\u2022 Consult and Coordinate with Alaska Natives consistent with tribal consultation policy established by Executive Order. This policy emphasizes trust, respect, and shared responsibility. It articulates that tribal governments have a unique legal relationship with the United States and requires Federal departments and agencies to provide for meaningful and timely input by tribal officials in development of regulatory policies that have tribal implications. This guiding principle is also consistent with the Alaska Federation of Natives Guidelines for Research.", "Conclusion", "We seek a collaborative and innovative approach to manage a rapidly changing region. We must advance U.S. national security interests, pursue responsible stewardship, and strengthen international collaboration and cooperation, as we work to meet the challenges of rapid climate-driven environmental change. The melting of Arctic ice has the potential to transform global climate and ecosystems as well as global shipping, energy markets, and other commercial interests. To address these challenges and opportunities, we will align Federal activities in accordance with this strategy; partner with the State of Alaska, local, and tribal entities; and work with other Arctic nations to develop complementary approaches to shared challenges. We will proactively coordinate regional development. Our economic development and environmental stewardship must go hand-in-hand. The unique Arctic environment will require a commitment by the United States to make judicious, coordinated infrastructure investment decisions, informed by science. To meet this challenge, we will need bold, innovative thinking that embraces and generates new and creative public-private and multinational cooperative models.", "Appendix E. Obama Administration Statement Regarding U.S. Chairmanship of Arctic Council", "This appendix presents the text of a statement from the Obama Administration regarding the two-year period of U.S. chairmanship of the Arctic Council that began in April 2015. The text of the statement is as follows:", "Given the increased strategic importance of the region, the next two years offers the United States an unprecedented opportunity to make significant progress on our Arctic policy objectives, which were first laid out in the National Strategy for the Arctic Region released by the White House in May 2013 and followed by an Implementation Plan in January 2014.", "The U.S. will be chairing the Arctic Council at a crucial moment when the effects of climate change are bringing a myriad of new environmental, human and economic opportunities and challenges to the Arctic. During the U.S. Chairmanship, the State Department will focus the Arctic work it carries out through the Arctic Council, various international scientific cooperation mechanisms and, in some cases, domestic initiatives led by U.S. states or other U.S. government agencies. The three thematic areas of the U.S. Chairmanship are: improving economic and living conditions in Arctic communities; Arctic Ocean safety, security and stewardship; and addressing the impacts of climate change. The theme of the U.S. Chairmanship of the Arctic Council is \"One Arctic: Shared Opportunities, Challenges and Responsibilities,\" which recognizes the peaceful and stable nature of the Arctic. The U.S. chairmanship will conclude in spring 2017 with a Ministerial meeting in Alaska, at which point the United States will hand the chairmanship to Finland.", "To guide U.S. engagement on the Arctic during this crucial period, U.S. Secretary of State John Kerry appointed the former Commandant of the U.S. Coast Guard, Admiral Robert J. Papp, Jr., as the first-ever U.S. Special Representative for the Arctic in July 2014.", "The U.S. has developed an ambitious and balanced program for its Arctic Council Chairmanship that focuses on three crucial areas: improving economic and living conditions; Arctic Ocean safety, security and stewardship; and addressing the impacts of climate change.", "1. Improving Economic and Living Conditions in Arctic Communities", "Remote Arctic communities face a number of threats to the health and well-being of their citizens, including food and water security, safe water, sewer and sanitation, affordable and renewable energy, adequate mental health services, and the need to ensure the continued economic viability of their communities. ", "Our work in this area will aim to:", "\u2014Promote the development of renewable energy technology, such as modular micro-grid systems, to spur public-private partnerships and improve energy affordability;", "\u2014Provide a better understanding of freshwater security in the Arctic, including through the creation of a Water Resources Vulnerability Index; ", "\u2014Coordinate an Arctic-wide telecommunications infrastructure assessment to promote the build-out of commercial infrastructure in the region;", "\u2014Support mental wellness , including suicide prevention and resilience; ", "\u2014Harness the expertise and resources of the Arctic Economic Council to inform the Arctic Council's work on economic and living conditions; ", "\u2014Mitigate public health risks and reduce black carbon output in Arctic communities;", "\u2014Promote better community sanitation and public health by facilitation collaboration between industry, researchers and public policy experts to increase access to and reduce the operating costs of in-home running water and sewer in remote communities.", "2. Arctic Ocean Safety, Security and Stewardship ", "The acceleration of maritime activity in the Arctic increases risk in an already harsh and challenging environment. U.S. Chairmanship priorities include building upon existing preparedness and response programs; enhancing the ability of Arctic states to execute their search and rescue responsibilities; and emphasizing safe, secure, and environmentally sound shipping as a matter of high priority. To ensure that future maritime development avoids negative impacts, particularly in areas of ecological and cultural significance, the Arctic Council is also continuing its work towards a network of marine protected areas and enhanced international cooperation in the Arctic Ocean. Ocean acidification is one of the most urgent issues facing the world's ocean today and the Arctic Council is responding by supporting research to improve the capability to monitor and track acidification in the Arctic Ocean. ", "Our work in this area will aim to:", "\u2014Better prepare those responsible to better address search and rescue challenges in the Arctic; ", "\u2014Ensure marine environmental protection, including working toward the establishment of a network of marine protected areas ;", "\u2014Explore the creation of a Regional Seas Program of the Arctic Ocean; ", "\u2014Create a better understanding of Arctic Ocean acidification and its effects on Arctic organisms and the economies that rely on them; ", "\u2014Encourage all parties take the steps necessary to allow for the proper implementation of the Agreement on Cooperation on Marine Oil Pollution, Preparedness and response in the Arctic .", "3. Addressing the Impacts of Climate Change", "The impacts of climate change affect the Arctic and the many people, wildlife, and plants that depend on the region for survival. The United States recognizes that we need to reduce black carbon (soot) and methane emissions, which disproportionally impact the Arctic. The Arctic Council is addressing the impacts of climate change by facilitating cooperation on action to reduce black carbon and methane emissions. Arctic Council activities to enhance access to adaptation and resilience tools, and promote the development of climate change indicators and high-resolution mapping are also priorities of the U.S. chairmanship that will increase scientists', communities', policymakers' and the public's understanding of the impacts of climate change. ", "Our work in this area will aim to:", "\u2014Target short-lived climate pollutants through reductions in black carbon and methane emissions; ", "\u2014Support Arctic climate adaptation and resilience efforts including the creation of an Early Warning Indicator System; ", "\u2014Create a Pan-Arctic Digital Elevation Map that will increase our understanding of the impacts of climate change on shorelines and surface areas in the Arctic."], "subsections": []}]}}
{"id": "RS22373", "title": "Navy Irregular Warfare and Counterterrorism Operations: Background and Issues for Congress", "released_date": "2019-04-25T00:00:00", "summary": ["In the years following the terrorist attacks of September 11, 2001, the Navy has carried out a variety of irregular warfare (IW) and counterterrorism (CT) activities. Among the most readily visible of these were operations carried out by Navy sailors serving ashore in the Middle East and Afghanistan, as well as the May 1-2, 2011, U.S. military operation in Abbottabad, Pakistan, that killed Osama bin Laden.", "During these years, the Navy took certain actions intended to improve its IW capabilities. For example, the Navy established the Navy Expeditionary Combat Command (NECC) informally in October 2005 and formally in January 2006. NECC consolidated and facilitated the expansion of a number of Navy organizations that have a role in IW operations. The Navy also established the Navy Irregular Warfare Office in July 2008, published a vision statement for irregular warfare in January 2010, and established \"a community of interest\" (COI) to develop and advance ideas, collaboration, and advocacy related to IW in December 2010.", "The Navy during these years also reestablished its riverine force and initiated The Global Maritime Partnership, which was a U.S. Navy initiative to achieve an enhanced degree of cooperation between the U.S. Navy and foreign navies, coast guards, and maritime police forces, for the purpose of ensuring global maritime security against common threats. In addition, the Navy operated the Southern Partnership Station (SPS) and the Africa Partnership Station (APS), which were Navy ships, such as amphibious ships or high-speed sealift ships, that deployed to the Caribbean and to waters off Africa, respectively, to support U.S. Navy engagement with countries in those regions, particularly for purposes of building security partnerships with those countries and for increasing the capabilities of those countries for performing maritime-security operations.", "The Navy's current IW and CT activities pose a number of potential oversight issues for Congress, including how much emphasis to place on IW and CT activities in Navy budgets, particularly in a context of constraints on Navy budgets and Navy desires to devote resources to developing \"high end\" combat capabilities for countering improved conventional military capabilities of countries such as China and Russia."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides background information and potential issues for Congress on the Navy's irregular warfare (IW) and counterterrorism (CT) operations. The Navy's IW and CT activities pose a number of potential oversight issues for Congress, including how much emphasis to place on IW and CT activities in Navy budgets, particularly in a context of constraints on Navy budgets and Navy desires to devote resources to developing \"high end\" combat capabilities for countering improved conventional military capabilities of countries such as China and Russia. Congress's decisions regarding Navy IW and CT operations can affect Navy operations and funding requirements, and the implementation of the nation's overall IW and CT strategies.", "This report focuses on Navy IW and CT operations. Another CRS report discusses U.S. special operations forces (SOF) across the military services.", "For an overview of the strategic and budgetary context in which Navy IW and CT operations may be considered, see CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress , by Ronald O'Rourke."], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "Navy Irregular Warfare (IW) Operations", "paragraphs": [], "subsections": [{"section_title": "Note on Terminology", "paragraphs": ["The Navy has sometimes used the phrase confronting irregular challenges (CIC) instead of the term irregular warfare. For purposes of convenience, this report continues to use the term irregular warfare and the abbreviation IW."], "subsections": []}, {"section_title": "Navy IW Operations in Middle East and Afghanistan", "paragraphs": ["In the years following the terrorist attacks of September 11, 2001, the Navy carried out a variety of irregular warfare (IW) and counterterrorism (CT) activities. Among the most readily visible of these were operations carried out by Navy sailors serving ashore in the Middle East and Afghanistan. Regarding current operations in the Middle East, the Department of the Navy (DON) states the following in its FY2020 budget highlights book:", "The Marine Corps has an active duty force of approximately 1,300 Marines ashore in the U.S. CENTCOM area of operations (AOR) and another roughly 850 Marine Reserve members supporting CENTCOM. Beyond the Marines participating in counterinsurgency, security cooperation, and civil-military operations; on any given day there are about 1,000 Sailors ashore and another roughly 6,500 afloat throughout the CENTCOM AOR. These sailors are conducting activities such as air operations, maritime infrastructure protection, combat construction engineering, cargo handling, combat logistics, maritime security, detainee operations, customs inspections, civil affairs, base operations, and other forward presence activities."], "subsections": []}, {"section_title": "Navy IW Operations Elsewhere", "paragraphs": ["In addition to participating in U.S. military operations in the Middle East and Afghanistan, Navy IW operations in the years following the terrorist attacks of September 11, 2011, have also included the following:", "security force assistance operations , in which forward-deployed Navy ships have exercised and worked with foreign navies, coast guards, and maritime police forces, so as to improve their abilities to conduct maritime security operations; civic assistance operations , in which forward-deployed Navy units, including Navy hospital ships, expeditionary medical teams, fleet surgical teams, and naval construction units have provided medical and construction services in foreign countries as a complement to other U.S. diplomatic and development activities in those countries; disaster relief operations , of which Navy forces have performed several in recent years; and counter-piracy operations , particularly off the Horn of Africa.", "DON states in its FY2020 budget highlights book that", "In the past year, the Marine Corps executed 170 operations, eight amphibious operations, 115 theater security cooperation events and participated in 51 exercises and relief operations for Hurricanes Maria, Florence, and Michael. Within the context of these efforts, Amphibious Ready Groups / Marine Expeditionary Units (ARG/MEU) supported Combatant commands along-side regional partners providing a range of deliberate and crisis response options. Major exercises were held in Romania, Israel, Jordan, Malaysia, and off the coast of Djibouti. The Marine Corps also participated in theater security cooperation (TSC) exercises held in Brazil, Latvia, Jordan, Mexico, and Philippines that enhanced military cooperation, capability, and interoperability with partner nations while sustaining a ready, forward presence in support of the Combatant Commander requirements\u2026.", "The Navy has active and reserve forces continually deployed in support of contingency operations overseas serving as members of Carrier Strike Groups, Expeditionary Strike Groups, Special Operating Forces, Seabee units, Marine forces, and medical units; some also serve as Individual Augmentees (IAs)."], "subsections": []}, {"section_title": "Navy Individual Augmentees (IAs)", "paragraphs": ["Some of the Navy's contributions to IW operations around the world in the years following the terrorist attacks of September 11, 2001, were made by Navy individual augmentees (IAs)\u2014individual Navy sailors assigned to various DOD operations. DON stated in 2014 that", "Navy IAs are providing combat support and combat service support for Army and Marine Corps personnel in Afghanistan. As IAs they are fulfilling vital roles by serving in traditional Navy roles such as USMC support, maritime and port security, cargo handling, airlift support, Seabee units, and as a member of joint task force/Combatant Commanders staffs. Non-traditional roles include detainee operations, custom inspections teams, and civil affairs."], "subsections": []}]}, {"section_title": "Navy Counterterrorism (CT) Operations", "paragraphs": [], "subsections": [{"section_title": "In General", "paragraphs": ["Navy CT operations (and anti-terrorism/force protection activities) at various points since the late 1990s, and particularly in the years following the terrorist attacks of September 11, 2001, have included the following:", "Operations by Navy special operations forces, known as SEALs (an acronym standing for Sea, Air, and Land), that have been directed against terrorists; Tomahawk cruise missile attacks on suspected terrorist training camps and facilities, such as those reportedly conducted in Somalia on March 3 and May 1, 2008, and those conducted in 1998 in response to the 1998 terrorist bombings of U.S. embassies in East Africa; surveillance by Navy ships and aircraft of suspected terrorists overseas; maritime intercept operations (MIO) that were aimed at identifying and intercepting terrorists or weapons of mass destruction at sea, or potentially threatening ships or aircraft that are in or approaching U.S. territorial waters\u2014an activity that has included Navy participation in the multilateral Proliferation Security Initiative (PSI); protection of forward-deployed Navy ships, an activity that was intensified following the terrorist attack on the Navy Aegis destroyer Cole (DDG-67) in October 2000 in the port of Aden, Yemen; protection of domestic and overseas Navy bases and facilities; working with the Coast Guard to build maritime domain awareness (or MDA, meaning a real-time understanding of activities on the world's oceans), and engaging with the U.S. Coast Guard to use the National Strategy for Maritime Security to more rapidly develop capabilities for Homeland Security, particularly in the area of MDA; assisting the Coast Guard in port-security operations; developing Global Maritime Intelligence Integration (GMII) as part of Joint Force Maritime Component Command (JFMCC) and Maritime Domain Awareness (MDA); and operations by the Naval Criminal Investigative Service (NCIS), for which combating terrorism is a core mission area.", "DON stated in 2014 that", "While forward, acting as the lead element of our defense-in-depth, naval forces will be positioned for increased roles in combating terrorism.... Expanded Maritime Interdiction Operations are authorized by the President and directed by the Secretary of Defense to intercept vessels identified to be transporting terrorists and/or terrorist-related materiel that poses an imminent threat to the United States and its allies.....", "We have done small, precise attacks against terrorist cells and missile attacks against extremist sanctuaries.", "DON stated in 2013 that", "Our defense efforts are aimed at countering violent extremists and destabilizing threats, as well as upholding our commitments to allies and partner states. These armed adversaries such as terrorists, insurgents, and separatist militias are a principal challenge to U.S. interests in East Africa.", "An April 8, 2013, press report about U.S. counterterrorism operations stated, regarding one particular operation, that", "The uncertainties were evident nine months into Mr. Obama's first term, when intelligence agencies tracked down Saleh Ali Saleh Nabhan, a suspect in the attacks on two American embassies in East Africa in 1998.", "The original plan had been to fire long-range missiles to hit Mr. Nabhan and others as they drove in a convoy from Mogadishu, Somalia, to the seaside town of Baraawe. But that plan was scrubbed at the last minute, and instead a Navy SEALs team helicoptered from a ship and strafed Mr. Nabhan's convoy, killing him and three others. The SEALs landed to collect DNA samples to confirm the identities of the dead."], "subsections": []}, {"section_title": "May 1-2, 2011, U.S. Military Operation That Killed Osama Bin Laden", "paragraphs": ["The May 1-2, 2011, U.S. military operation in Abbottabad, Pakistan, that killed Osama bin Laden\u2014reportedly called Operation Neptune's Spear\u2014reportedly was carried out by a team of 23 Navy special operations forces, known as SEALs (an acronym standing for Sea, Air, and Land). The SEALs reportedly belonged to an elite unit known unofficially as Seal Team 6 and officially as the Naval Special Warfare Development Group (DEVGRU). The SEALs reportedly were flown to and from Abbottabad by Army special operations helicopters. Bin Laden's body reportedly was flown by a U.S. military helicopter from Abbottabad to a base in Afghanistan, and from there by a Marine Corps V-22 tilt-rotor aircraft to the aircraft carrier Carl Vinson (CVN-70), which was operating at the time in the Northern Arabian Sea. A few hours later, bin Laden's body reportedly was buried at sea from the ship. Differing accounts have been published regarding certain details of the operation.", "Press reports in July 2010 stated that U.S. forces in Afghanistan included at that time a special unit called Task Force 373, composed of Navy SEALs and Army Delta Force personnel, whose mission is \"the deactivation of top Taliban and terrorists by either killing or capturing them.\" ", "A July 2015 Government Accountability Office (GAO) report and a separate CRS report provide additional background information on the SEALs. Another CRS report provides further discussion of the operation that killed Osama bin Laden."], "subsections": []}, {"section_title": "Detention of Terrorist Suspects on U.S. Navy Ships", "paragraphs": ["An August 16, 2015, press report stated the following:", "After a suspected militant was captured last year to face charges for the deadly 2012 attacks on Americans in Benghazi, Libya, he was brought to the U.S. aboard a Navy transport ship on a 13-day trip that his lawyers say could have taken 13 hours by plane.", "Ahmed Abu Khattala faced days of questioning aboard the USS New York from separate teams of American interrogators, part of a two-step process designed to obtain both national security intelligence and evidence usable in a criminal prosecution.", "The case, still in its early stages, is focusing attention on an interrogation strategy that the Obama administration has used in just a few recent terrorism investigations and prosecutions. Abu Khattala's lawyers already have signaled a challenge to the process, setting the stage for a rare court clash over a tactic that has riled civil liberties groups but is seen by the government as a vital and appropriate tool in prosecuting suspected terrorists captured overseas.", "\"I think they view it as important to show that terrorists can be prosecuted in U.S. courts, and this is an attempt to find a compromise between using people they capture as intelligence assets and prosecuting them in U.S. courts,\" said David Deitch, a former Justice Department terrorism prosecutor. \"It's a very hard balance to strike\u2014and may not be possible.\"", "The administration has turned to questioning in international waters as an alternative to past practices in which suspects were sent to the U.S. detention facility at Guantanamo Bay, Cuba, or secret CIA prisons. The process ordinarily begins with questioning from a specialized team of interrogators who collect intelligence that can inform government decisions, such as for drone strikes, but cannot be used in court. Then a team of FBI investigators starts from scratch, advising the detainee of his Miranda rights, such as the right to remain silent, and gathering statements that prosecutors can present as evidence in a trial.", "Some legal experts expect the hybrid interrogation technique to survive legal challenges. But defense lawyers are concerned that such prolonged detention can be used to wrangle a confession or amounts to an end-run around the government's obligation to promptly place a suspect before a judge.", "\"Basically by holding the suspects on a ship and delaying their presentment in federal court, they're able to get a leg up in interrogations,\" said Seton Hall University law professor Jonathan Hafetz, who has handled terrorism cases.", "Abu Khattala is facing charges in Washington in the Sept. 11-12, 2012, attack on the U.S. diplomatic mission in Benghazi that killed U.S. Ambassador Chris Stevens and three other Americans. Following his June 2014 capture in Libya by U.S. special forces, he was placed aboard a Navy ship that his lawyers say made its way to the U.S. as slowly as possible to allow maximum time for interrogation. They say Abu Khattala was questioned for days by representatives from the High Value Detainee Interrogation Group, then for another stretch by FBI agents....", "One early point of contention in the court case is the onboard interrogation. Abu Khattala's lawyers submitted court filings this month contending that the government held him \"captive on a military ship\u2014without the protection of and in spite of constitutional guarantees\u2014for the explicit purpose of illegally interrogating him for almost two weeks.\"", "Federal prosecutors have yet to respond.", "Whatever a judge decides, the case taps into a broader legal debate about the prosecution of terrorist suspects and presents a rare opportunity for a possible ruling on the admissibility of statements gathered aboard a military vessel.", "For additional background information on detention of terrorist suspects on U.S. Navy ships, see Appendix E ."], "subsections": []}]}, {"section_title": "Navy Initiatives to Improve Its IW and CT Capabilities", "paragraphs": ["In the years following the terrorist attacks of September 11, 2001, the Navy took certain actions intended to improve its IW and CT capabilities and activities, including those discussed below. Some of the actions the Navy took during those years are described briefly below."], "subsections": [{"section_title": "Navy Irregular Warfare Office (NIWO)/Navy Warfare Group (NWG)", "paragraphs": ["The Navy in July 2008 established the Navy Irregular Warfare Office (NIWO) so as to \"institutionalize current ad hoc efforts in IW missions of counterterrorism and counterinsurgency and the supporting missions of information operations, intelligence operations, foreign internal defense and unconventional warfare as they apply to [CT] and [counterinsurgency].\"", "In January 2013, the Navy directed the establishment of a Navy Warfare Group (NWG) \"to provide a dedicated organization to systematically evaluate, develop, and implement new strategic concepts deemed useful to the service....\" NIWO was disbanded, and its responsibilities were transferred to NWG, which is to \"[s]erve as the Navy lead for irregular warfare (IW) to incorporate IW into Navy capstone documents and to inform the PPBE [Planning, Programming, Budgeting, and Execution] process.\""], "subsections": []}, {"section_title": "2010 Navy Vision Statement for Countering Irregular Challenges", "paragraphs": ["The Navy in January 2010 published a vision statement for countering irregular challenges, which stated the following in part:", "The U.S. Navy will meet irregular challenges through a flexible, agile, and broad array of multi-mission capabilities. We will emphasize Cooperative Security as part of a comprehensive government approach to mitigate the causes of insecurity and instability. We will operate in and from the maritime domain with joint and international partners to enhance regional security and stability, and to dissuade, deter, and when necessary, defeat irregular forces.", "The full text of the vision statement is reproduced in Appendix C ."], "subsections": []}, {"section_title": "Navy Community of Interest (COI) for Countering Irregular Challenges", "paragraphs": ["The Navy in December 2010 established \"a community of interest [COI] to develop and advance ideas, collaboration and advocacy related to confronting irregular challenges (CIC).\""], "subsections": []}, {"section_title": "Navy Expeditionary Combat Command (NECC)", "paragraphs": ["The Navy Expeditionary Combat Command (NECC), headquartered at Naval Amphibious Base, Little Creek, VA, was established informally in October 2005 and formally on January 13, 2006. NECC consolidated and facilitated the expansion of a number of Navy organizations that have a role in IW operations. DON stated in 2014 that", "Navy Expeditionary Combat Command (NECC) is a global force provider of expeditionary combat service support and force protection capabilities to joint warfighting commanders. It is responsible for centrally managing the current and future readiness, resources, manning, training and equipping of a scalable, self-sustaining, integrated expeditionary force of active and reserve sailors. Expeditionary sailors are deployed from around the globe, supporting contingency operations and Combatant Commanders' Theater Security Cooperation Plans, providing a forward presence of waterborne and ashore anti-terrorism force protection; theater security cooperation and engagement; and humanitarian assistance and disaster relief.", "DON also stated in 2014 that", "The Reserve Component expeditionary forces are integrated with the Active Component forces to provide a continuum of capabilities unique to the maritime environment within NECC. Blending the AC and RC brings strength to the force and is an important part of the Navy's ability to carry out the Naval Maritime Strategy from blue water into green and brown water and in direct support of the Joint Force. The Navy Reserve trains and equips over half of the Sailors supporting NECC missions, including naval construction and explosive ordnance disposal in the CENTCOM region, as well as maritime expeditionary security, expeditionary logistics (cargo handling battalions), maritime civil affairs, expeditionary intelligence, and other mission capabilities seamlessly integrated with operational forces around the world. In addition, Coastal Riverine Group 2 has taken on a new armed escort mission for High Value Units (HVU) which has traditionally been provided by the U.S. Coast Guard. The escort enhances force protection for HVUs while transiting into and out of CONUS ports during restricted maneuvering."], "subsections": []}, {"section_title": "Global Maritime Partnership", "paragraphs": ["The Global Maritime Partnership was a U.S. Navy initiative to achieve an enhanced degree of cooperation between the U.S. Navy and foreign navies, coast guards, and maritime police forces, for the purpose of ensuring global maritime security against common threats. DON stated in 2014 that \"through partnerships with a growing number of nations, including those in Africa and Latin America, we will strive for a common vision of freedom, stability, and prosperity.\""], "subsections": []}, {"section_title": "Partnership Stations", "paragraphs": ["The Southern Partnership Station (SPS) and the Africa Partnership Station (APS) were Navy ships, such as amphibious ships or high-speed sealift ships, that deployed to the Caribbean and to waters off Africa, respectively, to support U.S. Navy engagement with countries in those regions, particularly for purposes of building security partnerships with those countries, and for increasing the capabilities of those countries for performing maritime-security operations. The SPS and APS can be viewed as specific measures for promoting the above-mentioned global maritime partnership. A July 2010 Government Accountability Office (GAO) report discussed the APS."], "subsections": []}, {"section_title": "Coastal Riverine Force", "paragraphs": ["The Navy in May 2006 reestablished its riverine force by standing up Riverine Group 1 at Naval Amphibious Base, Little Creek, VA (now part of Joint Expeditionary Base Little Creek-Fort Story, or JEBLC-FS). Riverine Group 1 included three active-duty riverine squadrons of 12 boats each that were established in 2006-2007. Operations of the squadrons from 2006 to 2011 included multiple deployments to Iraq for the purpose, among other things, of relieving Marines who until 2006 had been conducting maritime security operations in Iraqi ports and waterways.", "On June 1, 2012, the Navy merged the riverine force and the Maritime Expeditionary Security Force (MESF) to create Coastal Riverine Force (CORIVFOR). The Navy stated that CORIVFOR \"performs core maritime expeditionary security missions in the green and brown waters, bridging the gap between traditional Navy blue water operations and land-based forces, providing port and harbor security for vital waterways and protection of high value assets and maritime infrastructure.\" The Navy stated that CORIVFOR was scheduled to reach initial operating capability (IOC) in October 2012 and full operational capability (FOC) in October 2014, and that \"all current and scheduled routine deployments will continue as normal.\"", "A July 14, 2014, news report states the following:", "In 2012, the Navy merged Riverine Forces and Maritime Expeditionary Security Forces to form the Coastal Riverine Force. There are currently seven squadrons. Squadrons 1, 3 and 11 are home ported on the west coast and Squadrons 2, 4, 8 and 10 are home ported on the east coast. The force currently consists of both active and reserve service members who man and operate more than 100 boats, ranging from rubber combat raiding crafts to 53-foot command boats that can carry up to 26 personnel.", "A January 18, 2013, Navy news report stated the following:", "Sailors, former Riverines, and family members attended a disestablishment ceremony for Naval Expeditionary Combat Command's Riverine Squadron (RIVRON) 3 at Naval Weapons Station Yorktown, Jan. 17.", "The disestablishment marks the merger of offensive Riverine forces with defensive Maritime Expeditionary Security Forces to form the Coastal Riverine Force (CORIVFOR), formally established June 1[, 2012]....", "CORIVFOR's primary mission is to conduct maritime security operations across all phases of military operations by defending high value assets, critical maritime infrastructure, ports and harbors, both inland and on coastal waterways, and when commanded, conduct offensive combat operations.", "The budget-initiated merger moved portions of the force to San Diego as part of the National Defense Strategy's rebalance to the Pacific, which will bring Riverine capability to the West coast for the first time since 1974, according to Capt. Eric B. Moss, commander of Coastal Riverine Group 1, formerly Maritime Expeditionary Security Group 1.", "\"The Riverine forces will do what they've always done, which is continuing to hone their skills and work in brown water and green water areas,\" said Moss. \"There is no abatement of requirements. We continue to get missions and are sourced to meet those requirements. We're doing the same with less.\"", "The merge cuts the former seven active Maritime Expeditionary Security Force (MESF) squadrons and three active RIVRONs down to three active Coastal Riverine squadrons and four reserve squadrons.", "\"This is a reduction in capacity, but not in capability,\" said Moss. \"I would say this is a very affordable force. We are light, expeditionary, and bring a lot capability in small packages. We are familiar with disaggregated operations, so immediately we give the combatant commander a tailor-able and scalable force.\"...", "Commissioned July 6, 2007, RIVRON 3 served two deployments in Iraq, fulfilling a total of 502 combat missions, 268 water security operations and countless U.S./Iraq tactical convoy operations."], "subsections": []}, {"section_title": "Other Organizational Initiatives", "paragraphs": ["Other Navy initiatives in recent years for supporting IW and CT operations include establishing a reserve civil affairs battalion, a Navy Foreign Area Officer (FAO) community consisting of officers with specialized knowledge of foreign countries and regions, a maritime interception operation (MIO) intelligence exploitation pilot program, and an intelligence data-mining capability at the National Maritime Intelligence Center (NMIC)."], "subsections": []}]}, {"section_title": "Appendices with Additional Background Information", "paragraphs": ["For additional information on Navy and Marine Corps special operations forces, see the prepared statements of the Navy and Marine Corps witnesses for an April 1,1 2018, hearing before the Senate Armed Services Committee reprinted in Appendix A .", "The Navy outlined its IW activities as of 2011 in its prepared statement for a November 3, 2011, hearing on the services' IW activities before the Emerging Threats and Capabilities subcommittee of the House Armed Services Committee. For the text of the Navy's prepared statement, see Appendix B .", "As noted earlier, for the text of the Navy's January 2010 vision statement for irregular warfare, see Appendix C .", "A 2012 report on maritime irregular warfare from RAND Corporation, a research firm, provides additional background information on U.S. maritime irregular warfare operations, both historical and more recent (i.e., up to the time of the report's writing). The report also made a series of findings and recommendations relating to U.S. maritime irregular warfare; for a summary of these findings and recommendations, see Appendix D .", "As noted earlier, for additional background information on detention of terrorist suspects on U.S. Navy ships, see Appendix E ."], "subsections": []}, {"section_title": "FY2020 Funding Request", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["DON states that the proposed FY2020 budget \"continues funding to counter the Islamic State of Iraq and the Levant (ISIL) and for operations in Afghanistan, the Horn of Africa, and other locations in theater, as well as for the European Deterrence Initiative,\" and \"supports building a more experienced, better trained, and more capable force by increasing the number of Marines with special skills, like those required for special operations, intelligence operations, electronic, information, and cyber warfare.\" Special Operations Command's (SOCOM's) proposed FY2020 budget requests, among other things,", "$72.6 million in the FY2020 Research, Development, Test, and Evaluation, Defense-Wide (RDT&EDW) account for Program Element (PE) 1160483BB, maritime systems (line 263 in the FY2020 RDT&EDW account), including $45.2 million for Project S0417: Underwater Systems, and $27.4 million for S1684: Surface Craft; and $59.0 million in the FY2020 Procurement, Defense-Wide (PDW) appropriation account for procurement of underwater systems for SOCOM (line 63 in the FY2020 PDW account).", "For additional background information on the FY2020 funding requests for lines 263 and 63, see Appendix F ."], "subsections": []}]}]}, {"section_title": "Potential Oversight Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "Degree of Emphasis on IW in Navy Budgets", "paragraphs": ["One potential oversight issue for Congress concerns how much emphasis to place on IW activities in Navy budgets, particularly in a context of constraints on Navy budgets and Navy desires to devote resources to developing \"high end\" combat capabilities for countering improved conventional military capabilities of countries such as China and Russia. Although the Navy, as discussed earlier in this report, took actions in the years following the terrorist attacks of September 11, 2001, that were intended to improve its IW capabilities, the Navy in more recent years has taken other actions that might be viewed as reflecting a reduced Navy emphasis on IW. In that connection, the following points were provided to CRS by the Joint Staff J-7 Irregular Warfare office in August 2016:", "\"US Navy IW funding and force structure have declined over the last few years.\" \"NIWO's responsibilities now belong to OPNAV N515 [i.e., the office within the Chief of Naval Operations that oversees the NWG], with dedicated IW staff decreasing from 13 government/military personnel along with 6 contractors led by a RDML [rear admiral] to 2 contractors and one O-5 [an officer that in the Navy is a commander] under O-6 [an officer that in the Navy is a captain] oversight.\" In May 2014, the Navy closed its Maritime Civil Affairs and Security Training Command (MCAST), an action \"which reduced civil affairs (CA) and security force assistance (SFA) capacity. The MCAST's mission was to train sailors to perform civil-military affairs and security force assistance missions. It also provided approximately 50 percent of Navy expeditionary training.... MCAST functions are now distributed across the Navy. The Naval Education and Training Security Assistance Field Activity serves as the focal point for security assistance training issues. The Expeditionary Combat Readiness Center processes individual augmentees for deployment. Civil affairs functions were not replaced.\" A July 2015 Navy memo states \"that the Navy does not 'possess dedicated CA units or members.'\" The Navy's FY2017 budget requested funding to preserve Helicopter Sea Combat (HSC) Squadron 85, a unit that \"supports Naval Special Warfare and other SOCOM [Special Operations Command] assets,\" which was \"a positive development.\" On the other hand, the Navy in March 2016 \"disbanded HSC 84, a sister squadron providing similar support.... This action essentially cut experienced, operational capacity in half. Whether the TSUs [i.e., the two Tactical Support Units that are to be stood up under the Navy's proposed FY2017 budget] will meet SOF requirements remains to be seen.\" The Navy Community of Interest (COI) for Countering Irregular Challenges \"does not extend beyond the Navy Analytic Group. This body, tied to the Community of Interest, submits IW program gap, technical demonstration, and study initiatives to N515 for funding. Members include Fleet Forces Command, the NECC, the Navy Undersea Warfare Center, and the Navy War College. The larger COI has not [as of August 2016] had a formal meeting in approximately 3 years.\"", "A January 17, 2019, press report stated:", "After spending the better part of the past two decades supporting wars in a desert region, the U.S. Navy is starting to bring the SEALs back into the fold as it faces threats from major powers such as China and Russia.", "The Navy is incorporating its elite special warfare teams into strategic calculations for every potential major power combat scenario, from China and Russia to Iran and North Korea, said Vice Chief of Naval Operations Adm. Bill Moran in a round-table with reporters at the Surface Navy Association's annual symposium.", "The movement toward reconnecting with the blue water force (the Navy's regular ships, aircraft and submarine forces) started under former Naval Special Warfare Command head Rear Adm. Brian Losey, who retired in 2016. The effort has continued to grow under subsequent commanders, said Moran.", "\"It's to the point now where we include them in all of our exercises, our war games, our tabletops \u2014 because as much as it is their chance to 're-blue,' it's our chance to reconnect from the blue side,\" he added. \"We've grown used to not having them in a lot of those situations. Now as we've done the tabletops, the exercises and the war games, we see: 'Wow, there is some great capability here that can set the conditions for the kind of operations in every single one of those campaigns.' And that will continue to grow, I think.\"", "There have been indications that the SEALs are specifically eyeing environments similar to those in the South China Sea. A recent environmental assessment obtained by the Honolulu Star Advertiser revealed that the SEALs were looking to triple the amount of training time spent in the Hawaiian islands, expanding from Oahu and Hawaii island to Kauai, Maui, Molokai and Lanai.", "A January 30, 2019, press report similarly stated:", "Having spent 17 years conducting counterinsurgency and counterterrorism operations in the deserts and mountains of the Middle East, the Naval Special Warfare community is shifting its focus to threats from China, Russia and aspiring adversaries.", "Navy operations planners are including Navy SEALs in all aspects of planning and training, such as war games, exercises and tabletop scenarios, Vice Chief of Naval Operations Adm. Bill Moran told reporters Jan. 16 at the Surface Navy Association's annual conference.", "The shift began in 2013 when Rear Adm. Brian Losey, then-commander of Naval Special Warfare Command, began making \"a concerted effort to talk to his teams about getting back to the 'blue side,'\" Moran said, referring to the Navy's large fighting forces of ships, submarines and aircraft.", "That focus has continued since Losey retired in 2016, Moran added.", "\"[Losey] saw the 'great power competition,' he saw the threats of an emerging Russia, China, North Korea and Iran,\" Moran said. [SEALs] have a very specific and important role to play in all situations.\"", "Since the U.S. insertion into Afghanistan in 2001, special operations forces, including the SEALs, have focused on a specific selection of their skill sets, including small-scale strikes and offensive actions, counterinsurgency, hostage rescue, counterterrorism and countering weapons of mass destruction.", "But these forces have other expertise that is relevant to both large-scale military conflicts as well as the type of posturing and competing for regional and global dominance that currently is happening, according to a 2017 report by David Broyles and Brody Blankenship, analysts at CNA, an Arlington, Virginia-based think tank that concentrates on the U.S. Navy.", "Those skills include preparing an environment for operations, reconnaissance, unconventional operations, military information support operations and foreign humanitarian assistance, according to the report, The Role of Special Operations Forces in Global Competition.", "\"Special operations forces have a greater role to play in today's global competition through a counteractive approach to adversary maneuvers,\" Broyles and Blankenship wrote. \"The United States has only recently recognized that adversaries are exploiting the U.S. view of 'preparing for future war' vice 'competing in the here and now.' \"", "Moran agreed that Navy SEALs have a unique talent set that the \"blue side\" had largely forgotten.", "\"We've grown used to not having them in a lot of situations. ... Wow, there are some great capabilities here that can set the conditions in the world for the kind of operations we are going to need in every single one of our campaigns,\" he said.", "A draft environmental assessment published by the Navy on Nov. 8 indicated that the SEALs are planning to increase training in Hawaii, asking to increase the number of exercises from the 110 events allowed now on non-federally owned land to as many as 330 training events on non-federal land or waterways and 265 training events on federal property.", "The proposed training also would expand the area for conducting exercises to include Kauai, Lanai, Maui and Molokai, in addition to Oahu and Hawaii.", "The training, in a location relatively near to and similar in climate to the South China Sea, where China continues to assert its dominance, is necessary to enhance the Navy Special Warfare Command's traditional skill sets, including diving and swimming; operating with submersibles and unmanned aircraft systems; insertion and extraction; reconnaissance and parachuting; and rope suspension training activities, according to the report.", "Moran said the SEALs' return to their roots will bolster lethality of the Navy as a whole.", "\"As much as it's their chance to re-blue, it's our chance to reconnect from the blue side,\" he said. \"That will continue to grow, I think.\"", "Potential oversight questions for Congress include the following:", "How do current Navy IW capabilities and capacity compare with those of 5 or 10 years ago? Under proposed Navy budgets, how will Navy IW capabilities and capacity in coming years compare to those of today? In a context of constraints on Navy budgets and Navy desires to devote resources to developing \"high end\" combat capabilities for countering improved conventional military capabilities of countries such as China and Russia, is the Navy striking the right balance between funding for IW capabilities and capacity and funding for other Navy priorities? Does Congress have sufficient visibility into the operations of U.S. SOF, including Navy SEALs, to support congressional oversight over those operations?"], "subsections": []}, {"section_title": "Role of Naval Special Warfare Development Group (Seal Team 6)", "paragraphs": ["Another potential oversight issue for Congress concerns the role of Seal Team 6 in Navy CT and IW operations. A June 6, 2015, press report states the following:", "They have plotted deadly missions from secret bases in the badlands of Somalia. In Afghanistan, they have engaged in combat so intimate that they have emerged soaked in blood that was not their own. On clandestine raids in the dead of the night, their weapons of choice have ranged from customized carbines to primeval tomahawks.", "Around the world, they have run spying stations disguised as commercial boats, posed as civilian employees of front companies and operated undercover at embassies as male-female pairs, tracking those the United States wants to kill or capture.", "Those operations are part of the hidden history of the Navy's SEAL Team 6, one of the nation's most mythologized, most secretive and least scrutinized military organizations. Once a small group reserved for specialized but rare missions, the unit best known for killing Osama bin Laden has been transformed by more than a decade of combat into a global manhunting machine.", "That role reflects America's new way of war, in which conflict is distinguished not by battlefield wins and losses, but by the relentless killing of suspected militants.", "Almost everything about SEAL Team 6, a classified Special Operations unit, is shrouded in secrecy\u2014the Pentagon does not even publicly acknowledge that name\u2014though some of its exploits have emerged in largely admiring accounts in recent years. But an examination of Team 6's evolution, drawn from dozens of interviews with current and former team members, other military officials and reviews of government documents, reveals a far more complex, provocative tale.", "While fighting grinding wars of attrition in Afghanistan and Iraq, Team 6 performed missions elsewhere that blurred the traditional lines between soldier and spy. The team's sniper unit was remade to carry out clandestine intelligence operations, and the SEALs joined Central Intelligence Agency operatives in an initiative called the Omega Program, which offered greater latitude in hunting adversaries.", "Team 6 has successfully carried out thousands of dangerous raids that military leaders credit with weakening militant networks, but its activities have also spurred recurring concerns about excessive killing and civilian deaths....", "When suspicions have been raised about misconduct, outside oversight has been limited. Joint Special Operations Command, which oversees SEAL Team 6 missions, conducted its own inquiries into more than a half-dozen episodes, but seldom referred them to Navy investigators. \"JSOC investigates JSOC, and that's part of the problem,\" said one former senior military officer experienced in special operations, who like many others interviewed for this article spoke on the condition of anonymity because Team 6's activities are classified.", "Even the military's civilian overseers do not regularly examine the unit's operations. \"This is an area where Congress notoriously doesn't want to know too much,\" said Harold Koh, the State Department's former top legal adviser, who provided guidance to the Obama administration on clandestine war....", "Like the C.I.A.'s campaign of drone strikes, Special Operations missions offer policy makers an alternative to costly wars of occupation. But the bulwark of secrecy around Team 6 makes it impossible to fully assess its record and the consequences of its actions, including civilian casualties or the deep resentment inside the countries where its members operate. The missions have become embedded in American combat with little public discussion or debate."], "subsections": []}]}, {"section_title": "Legislative Activity for FY2020", "paragraphs": ["DOD's proposed FY2020 budget requests, among other things,", "$72.6 million in the FY2020 Research, Development, Test, and Evaluation, Defense-Wide (RDT&EDW) account for Program Element (PE) 1160483BB, (Special Operations Command [SOCOM]) maritime systems (line 263 in the FY2020 RDT&EDW account), including $45.2 million for Project S0417: Underwater Systems, and $15.6 million for S1684: Surface Craft; and $27.4 million in the FY2020 Procurement, Defense-Wide (PDW) appropriation account for procurement of underwater systems for SOCOM (line 63 in the FY2020 PDW account).", " Table 1 summarizes congressional action on the above funding requests.", "Appendix A. April 2018 Navy and Marine Corps Testimony on Special Operations Forces", "This appendix reprints the prepared statements of Rear Admiral Tim Szymanski, U.S. Navy, Commander, Naval Warfare Special Warfare Command, and Major General Carl E. Mundy, III, U.S. Marine Corps, Commander, U.S. Marine Corps Forces Special Operations Command, for an April 11, 2018, hearing the Special Operations Command's efforts to transform the force for future security challenges.", "Prepared Statement of Rear Admiral Szymanski", "The text of Admiral Szymanski's statement is as follows:", "Chairwoman Ernst, Ranking Member Heinrich and distinguished Members of the Committee, I am honored to appear before you, and proud to provide an update on your Navy's Special Operations Force and the U.S. Special Operations Command's maritime component.", "As you are aware, the security challenges facing our nation today are numerous, and are made more difficult by adversaries who are exploiting emerging technologies and gaining ground. We will continue to face Violent Extremist Organizations (VEOs), while the battlefield expands and becomes more complex and chaotic. Today, our most pressing security concerns involve the aggressive, coercive, and disruptive actions of near-peer competitors and rogue regimes. Exerting power by fighting below the level of armed conflict favors these players to the point that they are gaining advantages that threaten our national security. We must continue to be smarter, stronger, quicker, and more lethal than our adversaries, in order to protect our nation in a world that grows more complex every day.", "As an enterprise of nearly 10,000 personnel\u20142,810 SEALs; 780 Special Warfare Combatant-craft Crewmen; 4,100 support personnel; 780 reservists; 1,240 civilians\u2014your Naval Special Warfare (NSW) Command accounts for only 2.4 percent of the Navy's personnel. Our budget accounts for less than one percent of the Department of the Navy's budget, and approximately 12 percent of U.S. Special Operations Command (USSOCOM) budget.", "We continue to have a global presence\u2014operating in more than 35 countries on any given day. We are networked with the U.S. Navy and Joint Forces, the interagency, and allies and foreign partners, executing missions in support of USSOCOM, the U.S. Navy, geographic Combatant Commanders, and ultimately, national objectives across a full range of political and operational environments.", "NSW's ALIGNMENT TO THE NATIONAL DEFENSE STRATEGY", "The National Defense Strategy (NDS) published earlier this year charged the Department of Defense (DoD) to be more agile, more lethal, and more innovative in order to maintain our competitive advantage. The Chief of Naval Operations, in turn, laid out the maritime responsibilities articulated in the NDS, focusing on increasing Naval Power through balancing capability and capacity with readiness and sustainment.", "As the Commander, my challenge is to man, train, and equip the Force to be better positioned to support the NDS, the National Military Strategy and the Navy's Strategy for Maintaining Maritime Superiority, while supporting the operational requirements of the theater commanders. Furthermore, the long-term sustainment, health, and well-being of our people remains my highest priority.", "NSW RESOURCING", "After nearly 17 years of war in Afghanistan and Iraq, we are focused on reasserting our capabilities as the maritime component to Special Operations, properly postured to meet the threats of the future, enhancing our partnership with the Navy and exploring opportunities for increased integration and interoperability, while building capabilities and capacity with fleet, submarine, aviation and cyber forces.", "Acknowledging that manpower requirements have outpaced authorized and actual growth, we have spent the last year taking a hard look at our force structure to determine how we can best use the resources we have to optimize the impacts we are making on the battlefield. We looked at how to eliminate redundancy, redirect resources and merge assets to build depth and agility and how to meet transregional threats and provide increased combat lethality to the Theater Special Operation Commands. Optimizing our Force is paramount to meeting current operational requirements and provide greater agility to meet future requirements.", "We recently collaborated with the Naval Post graduate school to conduct a maritime, multi-thread experiment in Southern California. The exercise allowed us to explore a realistic scenario using unmanned systems in a multi-domain (sea, air and land) environment. We learned a lot and advanced the potential use of artificial intelligence and human-machine teaming in current conflicts which will eventually increase our lethality while reducing risk.", "We have made necessary investments aimed at increasing our lethality, and refining our capabilities that enable access to contested areas.", "We have made significant increases in our unmanned aerial vehicle lethality by adding targeting capabilities, increasing the capabilities of current sensor suites, and using algorithms and artificial intelligence to speed up the targeting cycle.", "We have modernized numerous small arms systems, including procuring a purpose built, full-time suppressed, medium range weapons system; a lighter weight medium machine gun that matches and, in some cases, surpasses the effective range of a .50 caliber machine gun; a sniper weapons system with optics and wind sensing technology; and shoulder-launched munitions that allow for very precise engagements through hardened structures.", "We have made great strides in modernizing our maritime mobility platforms. In fact, our partnerships with maritime industries has never been stronger.", "We have introduced high performance surface combatant craft into our fleet to serve across the spectrum of maritime operations. They include our new Combatant Craft Assault which replaced the NSW 11-meter rigid-hull inflatable boat and our Combatant Craft Medium which replaced the Mark V Special Operations Craft and the introduction of the new Combatant Craft Heavy.", "Special Operations Force (SOF) undersea mobility platforms provide uniquely capable, clandestine means to access peer/near-peer locations. To that end, we expect to introduce two new undersea submersibles this year\u2013 the Shallow Water Combat Submersible (SWCS), which will replace our legacy SEAL Delivery Vehicle (SDV), and the Dry Combat Submersible (DCS), a new platform to our inventory.", "Nearly a year ago, we piloted a deliberate effort to realize the Secretary of Defense's guidance of exploiting Industry's investment in technology to relentlessly pursue innovative and advanced operational capabilities for our warfighters at a greater speed, relevant to the pace of technology in order to outpace our adversaries. This venture allowed us to understand and take advantage of new DoD contracting and procurement authorities as well as maximizing the utilization of DoD and USSOCOM outreach-to-industry platforms such as Defense Innovation Unit Experimental (DIUx) and SOFWERX.", "NSW has learned and applied how to effectively make use of these and other new and emerging opportunities to rapidly bring future operational concepts to the present: such as our realization of Artificial Intelligence-Autonomy of ISR Drones. This example among others, show promise to have exponential impacts on our capabilities to accomplish our mission in a more agile, lethal and sustainable manner. Our efforts\u2014to rapidly prototype, experiment with and lead in new and emerging technologies are aimed at delivering capabilities at the speed of relevancy to our warfighters.", "Finally, bottom up, operator-inspired innovation drives experimentation during exercises, and training eventually equates to relevancy and leads to greater success on the battlefield. With our component partners and throughout USSOCOM, innovation is happening at the unit level up and through headquarters. Our focus on innovation is driven by our people \u2013 buying down risk to our force while increasing our speed, accuracy, and lethality.", "PEOPLE: THE FIRST SOF TRUTH", "Our primary weapons system remains The Operator. We continue to invest heavily in our personnel, whether it's to train, retain or sustain them. We select, train and maintain persons of character, who are mature, highly skilled, culturally attuned and trusted to execute our nation's most sensitive missions.", "Thank you for your role in the preservation of our Force with the 10-year, $1 billion Silver Strand Training Center-South, the single most important military construction effort impacting the current and future operational readiness of the NSW Force. Once complete, the complex will consolidate the training requirements of today's force, creating efficiencies and synergy of improved operational planning and preparedness, but also allow our operators to spend more time with their families and communities.", "We remain committed to the physical and mental health of our operators, as we have a moral obligation to ensure their well-being. Preservation of the Force and Families, our Human Performance Program, and our most important initiatives involving Cognitive Health are about keeping our warriors in the fight, extending their service life, and giving them a high quality life post-service.", "With strong Congressional support, the USSOCOM Preservation of the Force and Family program continues to meet and exceed the intent to build resilience and facilitate the long-term care of our operators and their families, while never forgetting our fallen teammates with ongoing support to our Gold Star Families.", "Embedded professional care providers working within validated programs have helped turn the corner on many of the negative trends that have impacted those who have been in this long fight. Our usage data shows an increase in service members and families going to see clinical psychologists, licensed clinical social workers, nurse case managers, which speaks directly to de-stigmatization and trust. Similarly, there is a high number of cross referrals among the various care providers that demonstrates mutual support and clinical trust and reliance.", "In regard to Human Performance, our athletic trainers, strength coaches and physical therapists provide tailored and operationally relevant programs have resulted in injury reduction and increased recovery time from injuries with a direct impact to overall team readiness.", "Our Warrior and Family Support staff provide hands on, personal touch and connection to our families and children, connecting them to all the Service-provided and SOF-unique programs that are so vital to the strength and resilience of our family members.", "We have also learned that long-term physical and psychological challenges may result in impacts to one's memory, attention, processing speed, problem-solving, visuospatial function and impulse control which can affect operational performance and mission accomplishment. Given that we are in the longest continuous stretch of armed conflict in our history, learning about the cognitive health of our force is a critical initiative.", "We have initiated a Cognitive Surveillance Program that will be a more pre-emptive approach to intervention where cognitive impacts are indicated. More broadly, this initiative will seek to identify injuries earlier, track individual trends, and assist in developing comprehensive treatment plans to aid in the recovery of our service members. The end-state is to get NSW operators back into the fight while contributing to their long-term wellness.", "The Surveillance Program entails an initial baseline screening of all SEAL/SWCC operators within NSW by 30 June 2018; and ongoing re-testing every two years to assess significant change, similar to other routine exams such as dental or audiogram.", "Aggressive efforts include increasing awareness of potential issues and not waiting for perfect solutions. Therefore, we are actively 'driving the science' through our blast exposure research efforts, ultimately looking to create a 'dive-table-like' approach to heavy weapons/breaching exposure levels and mitigation needs.", "NSW continues to seek and offer best practices as we develop our cognitive health emphases. We rely on education, informed research efforts, and leadership support across the continuum of care to help mitigate the range of brain injuries and increase recovery rates for our members.", "Part of that continuum of care focuses on our transitioning veterans, whether at four years or after forty, with a holistic, SOF-unique initiative called Future Former Frogmen, or F3. F3 focuses on ensuring the successful transition of our active duty into civilian life by leveraging our neurocognitive science initiatives, continuum of leadership development efforts, readiness support programs, and veteran's resources. F3 provides structure, process and guidance throughout the complex transition experience giving the service member access to existing programs to ensure NSW veterans remain resilient. SOF for Life, a powerful support network, continues from active duty life to veteran life.", "Today in Coronado, California, at the Basic Underwater and Demolition / SEAL school, otherwise known as BUD/S, there are approximately 100 of America's best and brightest going through training to be part of the Navy's elite special operations maritime force as part of the most recent class, Class 330.", "Just like those seeking to be part of my brethren's communities, those seeking to be part of the SEAL community, those who succeed in the 63-week course will earn their Trident.", "At the end of 63 weeks, each student will have swam 48 miles; hiked or patrolled over 150 miles; and conducted at least 40 dives while spending a minimum of 60 hours, or two and a half days under water. As a class, at the end of those 63 weeks, they will have completed the equivalent of swimming from Cuba to the southern tip of Florida, then running to New York City.", "And that is just a snapshot of what we ask them to do before they have taken their first step into their first operation in defense of our country. It is precisely because of what we ask them to do, starting in Coronado, then around the world, through operation after operation, that we are focused on their long-term health, and the well-being of our Force and Families.", "Naval Special Warfare Command will continue to place priority on strengthening, equipping and protecting our people; outpacing our enemies in the employment of new technologies and accelerating trends, enabling us to compete below the threshold of conflict. We will refine and adapt our organizational structure to ensure Naval Special Warfare remains relevant and lethal, and when necessary, stands ready, willing and able to engage in combat to fight and win decisively for many years to come.", "Thank you for your time, your care for our Naval Special Warfare community, and I welcome the opportunity today to answer your questions.", "Prepared Statement of Major General Mundy", "The text of Major General Mundy's statement is as follows:", "Introduction", "Marine Raiders are the Marine Corps' contribution to United States Special Operations Command (USSOCOM). Through specialized and advanced training, MARSOC builds upon its unique attributes and ethos as Marines to produce agile, scalable, fully-enabled, and responsive special operations forces (SOF) comprised of operators and special operations-specific combat support and combat service support specialists. MARSOC formations task organize for every assigned mission and leverage their robust command and control capability and their ability to fuse operations with intelligence down to the team level. All of these factors enable our Raiders to succeed in distributed environments and enable partners at the tactical and operational levels of war. MARSOC contributes to the SOF enterprise and US combatant commands by providing full spectrum special operations capabilities to combat complex transregional problems.", "Established in 2006, our organization continues to address the most immediate threats to our Nation and has become a key participant in the ongoing fight against violent extremist organizations. Accepting this, we are also cognizant that we must work to minimize pressure on our force and our families as we simultaneously prepare for future threats. We ensure preparedness by adapting our training methods using feedback from currently deployed forces to better prepare our Raiders for what they will encounter while deployed. Simultaneously, we minimize pressure on the force by ensuring adequate access to Preservation of the Force and Families (POTFF) resources. We recognize that our operational capability ultimately rests upon a foundation of outstanding individuals and their families. In order to safeguard and sustain MARSOC's human capital, our most valuable resource, we continually strive to balance operational commitments with time Raiders spend at home station. Part of our effort to take care of families involves ensuring that our POTFF program not only delivers responsive and effective support, but that it continues to evolve with changing demands and needs of our force.", "Background", "During my tenure as the Commander of MARSOC, I have continually been impressed by the caliber of our individuals, be they Marines, Sailors, or civilians. They are well trained, well equipped, and provide the full spectrum special operations capability that has been crucial to success on the modern battlefield in places as diverse as Mali in West Africa, contested areas of Iraq, and Marawi in the Philippines. Twelve years on, MARSOC is maturing into a full and integral member of the SOF enterprise just as it continues to provide Raiders to counter our Nation's threats. Taking into account where MARSOC is today, we would be remiss if we did not acknowledge some of the formative episodes in the history of our Marine Corps that got us here.", "The United States Marines Corps' rich history is one that is replete with expeditionary operations against what we know today as irregular threats. These actions serve as the foundation for what is Marine Corps Special Operations today. Although the United States Marine Corps (USMC) did not provide a service component to the United States Special Operations Command (USSOCOM) until 2005, the Marine Corps has demonstrated an ability to conduct and support special operations throughout its history.", "In the early years of America's involvement in World War II, President Franklin Delano Roosevelt was determined to bring the war to our enemies as rapidly as possible. Because of the Marine Corps' historical successes in small wars and its recent development of amphibious operational concepts, it was considered to be the ideal parent organization for the president's vision for \"commando\" operations.", "In January 1942 the United States Marine Corps established two Raider battalions. The mission of the new Raider units was to spearhead amphibious landings, conduct raiding expeditions against Japanese held territory, as well as conduct guerilla-type operations behind enemy lines for extended periods. Marine Raiders were intellectually dynamic, morally disciplined, and physically fit with an irrepressible sense of duty, loyalty to one another, and imbued with a \"Gung Ho\" spirit in the face of adversity\u2026 much like the Marines and Sailors we select and train as Raiders today.", "During the Vietnam War and throughout the Cold War era, the Marine Corps did not formally possess a specialized unit. However, many Marines were members of specialized Joint and certain, tailored conventional units, such as force reconnaissance and Marine Expeditionary Units (Special Operations Capable). These units performed some of the types of missions we associate with Special Operations today. The complex global environment produced by the end of the Cold War as well as the world changing events of September 11, 2001, prompted an almost immediate need for additional special operations capacity capable of achieving operational and strategic effects. In light of these events and the pressing need for more SOF, Secretary of Defense Donald Rumsfeld called for the Marines to work more closely with USSOCOM.", "After validating an initial proof of concept in 2004 known as the Marine Corps Special Operations Command Detachment (DET One), the Secretary of Defense directed the Marine Corps to provide a permanent contribution to USSOCOM \u2013 what would become Marine Corps Forces, Special Operations Command \u2013 in November 2005. On 24 February 2006, MARSOC activated at Camp Lejeune, North Carolina as a service component assigned to USSOCOM. MARSOC today comprises a headquarters, one Marine Raider Regiment, one Marine Raider Support Group, and the Marine Raider Training Center. The Command has forces on both the east coast at Camp Lejeune, North Carolina, and on the west coast at Camp Pendleton, California. Presiding over a total force of approximately 3,000 Marines, Sailors, and 200 Federal Civilians, the Command is employed across the globe executing special operations missions in support of SOCOM and the geographic combatant commands that span the SOF core activities. With a focus on counterterrorism, direct action, special reconnaissance, foreign internal defense, security force assistance, and counterinsurgency, your modern-day Raiders also have the capability to directly support hostage rescue and recovery, countering of weapons of mass destruction, unconventional warfare, foreign humanitarian assistance, military information, and civil affairs operations. In order to achieve success and provide full spectrum capability across this wide swathe of core activities, we must prioritize our efforts.", "MARSOC Priorities", "Understanding our role as a force provider and capability generator within the SOF enterprise, we have taken the SOCOM Commander's priorities of \"Win, Transform, and People,\" and applied them to how we prepare our forces to accomplish assigned missions. To this end, MARSOC currently focuses on four priority areas: the provision of integrated full spectrum SOF, capabilities integration between SOF and Marine Air Ground Task Forces (MAGTF), future force development, and the preservation of the force and families.", "Priority 1: Force Provider", "Our first priority is to provide integrated full spectrum SOF that are task organized, trained and equipped to accomplish assigned special operations tasks. At any given point in the year, MARSOC has approximately 400 Raiders deployed across 18 countries carrying out assigned missions. We maintain three, forward task organized Marine Special Operations Companies; one each in Central Command, Africa Command, and the Pacific Command areas of responsibility. In addition to company-level deployments, we maintain one persistent O-5 (Lieutenant Colonel) level Special Operations Task Force in Central Command and a one-third rotational split with Naval Special Warfare Command for an O-6 (Colonel) level Combined/Joint Special Operations Task Force Headquarters, also in Central Command. At every level, these deployed formations bring integrated capabilities across all functional areas and allow us to operate across the full range of special operations missions. We believe that it is these high-end capabilities that provide our forces with a competitive edge against the adversaries we face.", "Providing our force begins with the recruitment process and continues through our assessment, selection, and individual training pipeline. We are focused on recruiting the best individuals from across the Marine Corps. Based on the results of our deployed forces and feedback from supported commanders, our recruiting and selection methods are working. Our training is progressive. As individuals earn new special operations specialties, they are moved to teams or special skills training environments. This training continues until deployment and covers everything from individual skill sets to high-end, advanced, complex unit collective training.", "In order to assess and certify Marine Special Operations Companies for deployment, MARSOC has created the RAVEN exercise. Held six times each year, RAVEN emphasizes realistic decision making for company and team commanders and provides a venue to practice the full planning, decision, execution, and assessment cycle. Alternating between Gulfport, Mississippi and Smyrna, Tennessee, RAVEN is a living exercise that enables MARSOC to incorporate the most current lessons from our deployed units as well as anticipated enemy actions inform and support ongoing joint contingency planning. For example, our most recent RAVEN conducted in Tennessee, featured a more robust foreign intelligence threat that undertook both physical and technical surveillance against our Marine Special Operations Teams. During this RAVEN we also exposed our teams to the degraded communications environment we would expect to encounter when facing a near-peer/emerging competitor.", "The training environments we create are dynamic. Not only do they prepare our Raiders for the current operational challenge, but they also evolve based on emerging threats and our expected participation in support of standing operational plans. Another benefit of the RAVEN exercises is its utility as a venue for integrating conventional Marine Corps resources into what is otherwise a SOF-centric exercise.", "Priority 2: Capabilities Integration with MAGTFs (Interoperability, Integration, and Interdependence)", "Second, we provide a bridge for routine capabilities integration with SOF and the deployed Marine Air Ground Task Forces to fully maximize the complimentary capabilities of each formation; especially in light of near-peer/emerging competitors. Given the threats present on contemporary battlefields and considering those we expect to face in the future, it has become increasingly important for SOF to be able to integrate \"seamlessly\" with the conventional forces and vice versa. Conventional forces offer capabilities and a capacity that simply do not exist in our small formations. In today's complex operating environment, the extent to which we, across the Joint Force, are able to leverage one another's strengths, and thereby offset our vulnerabilities, could determine the difference between success and failure. Cyber and space based capabilities, intelligence exploitation, mobility, fire support, logistics and medical support, are all examples of capabilities that we partially rely on conventional forces to provide\u2013 especially in scenarios involving high intensity combat.", "Examples of interoperability and capabilities integration occur every day across the globe from Syria and Iraq, Afghanistan, the Philippines and remote locations in Africa. With deliberate efforts to participate in each other's wargames, exercises, and training, we can institutionalize these efforts to the point that they become routine.", "Priority 3: Future Force Development", "As the operating environment evolves and more complex threats emerge, MARSOC must adapt its force to meet these new challenges. Constant and deliberate innovation, and evolution is critical to our success. Our concept for development is based on both a bottom-up driven process that incorporates immediate battlefield feedback into our training curricula, equipment research, testing, procurement; and a top-down approach that combines more traditional capability acquisition processes with longer-term future concept and wargaming efforts.", "Regarding equipment development and acquisition, we are tightly integrated with SOCOM and the Marine Corps and look forward to benefiting from the ongoing efforts of SOCOM's Acquisition Technology &Logistics, SOFWERX, and the Marine Corps' Rapid Capabilities Office. All of these organizations offer us an expedited procurement process for emerging technology. We have already taken steps to bring our vision to fruition with regard to capability development in particular technology areas. These include freeze dried plasma, semi-autonomous seeing and sensing capability, organic precision fires, counter-UAS rapid self-defense, unmanned cargo UAS and ground systems, rapid fusion of big data analytics and machine assisted learning, broadband tactical edge communications, and specialized insertion capabilities. As we research and improve our warfighting capabilities, we must kept in mind that our near-peer/emerging competitors are also making similar advances and investing in emerging technology. It is critical that we ensure that the technological capabilities we opt for are able to operate, communicate, and self-heal in a signals degraded environment.", "Likewise from a training perspective, we recognize the need to simulate operations in a degraded/denied communications environment that reflect what we might face when confronting near-peer/emerging competitors. We also plan to continue to improve our proficiency in the critical combined arms skills that both increase our lethality and allow us to maintain a tactical advantage over our adversaries. Last, we acknowledge that we must be able to operate in any clime and place, therefore we are committed to training in environments that replicate the full range of what we may experience on the battlefield.", "Complementing our near and mid-term efforts at capability development is longer term work on the development of a MARSOC-specific futures concept. Although this concept bears a resemblance to similar initiatives undertaken with the Department, it very much reflects MARSOC's unique place within SOF and interpretation of what the future operating environment might look like. We see a world overwhelmingly influenced by a resurgence of regional competition and instability. As these two themes collide, the complexity of the operating environment will dramatically challenge the ability of leaders at all levels to first, understand what is happening and, second, make sound decisions. This is the very situation in which Raider formations of the future must be prepared to operate; an urgent, volatile, complex, high-stakes problem that comprises multiple actors and defies the application of traditional US strengths and solutions.", "The results of our futures analysis, conducted over the past 18 months, have provided broad implications for the force as well as options which MARSOC can use to shape future capability to meet the challenges posed by the future operating environment. Throughout our internal wargame series, four discrete concepts or 'themes' consistently emerged. Each theme describes a distinct aspect of a vision for MARSOC, but at the same time each built upon the others such that the four are interconnected and mutually supporting. Together they provide a strong conceptual basis for a future MARSOC force that outpaces changes in the operating environment and remains a reliable force across warfighting and Title X functions. Collectively, these themes have come together to form the four, core pathways of innovation: MARSOF as a Connector, Combined Arms for the Connected Arena, The Cognitive Operator, and Enterprise Level Agility.", "Our futures vision document, MARSOF 2030 explains each of these innovation pathways in depth and also explores how they interconnect with one another. I will briefly introduce them here for the benefit of the committee. 'MARSOF as a Connector' is intended to capture MARSOC's facility in building cohesive, task organized teams. It is the idea that MARSOC can be the ideal integrator and synchronizer of U.S. Governmental capabilities with USSOF and partner nation actions. It also acknowledges the non-military nature of many of the problems we face and the need to look beyond for more durable solutions that involve tools other than the military.", "'Combined Arms for the Connected Arena' aims to get at the requirement to 'sense' and 'make sense of' what is happening in diverse and multi-dimensional environments. This second pathway also speaks to the use of cyber and information 'domains' as potential venues for conflict now, but certainly with increasing relevance as we look toward the future. From our standpoint, we must become as comfortable operating in these 'virtual' domains as we are in the physical.", "Perhaps the most foundational of all of our innovation pathways is 'the Cognitive Operator'. This pathway touches all others. At its core is the idea that the future requires a SOF operator with an equal amount of brains to match the brawn; foresight in addition to fortitude. Your future Raiders must preside over expanded capabilities that include the ability to influence allies and partners; understand complex problems; apply a broad set of national, theater, and interagency capabilities to those problems; and fight as adeptly in the virtual space as the physical.", "The last innovation pathway, 'Enterprise Level Agility', leverages MARSOC's relatively small size as an advantage. MARSOC possesses the advantage of being a relatively small force with its own component headquarters \u2013 this allows the command to rapidly reorient the organization to confront new challenges as they emerge. In other words, MARSOC's organizational dexterity can provide SOCOM with an agile, adaptable force to meet unexpected or rapidly changing requirements. In this context, MARSOC's small size becomes a strength; one that can provide both institutional and operational agility to the SOCOM Commander.", "Priority 4: Preservation of the Force and Families", "Calling to mind the SOF Truth that \"people are more important than hardware,\" our fourth priority is the preservation of our force and families program that provide our Raiders and their families with the access to resources promoting personal resiliency increasing longevity in service. Although listed as my fourth priority, preservation of the force and families is equally as important as the previous three priorities because people are at the heart of all we do. Currently, MARSOF special operators average 1 day overseas for every 1.9 days at home. Our capability specialists that enable communications, intelligence, air support, explosive ordnance disposal, and our canine handlers, vary by occupational specialty but average between 1 to 1.7 and 1 to 1.2 days deployed as opposed to days spent at home station. What these numbers do not reflect is the additional time that is spent away from home while training in CONUS. Although difficult to measure, Personnel Tempo or PERSTEMPO receives significant attention at all leadership levels within the Command such that we aim to balance our service members' schedules between training at and training away from home station.", "Because of this high operational tempo, POTFF has become an integral tool for maintaining the overall health of our force through programs that are focused on improving human performance, providing resources for behavioral health, developing spiritual fitness, and offering other family-oriented opportunities that are designed to strengthen the family unit. We appreciate the continual support from Congress on providing the funding for programs and specialized capabilities to make these programs effective.", "Culture of accountability:", "Closely tied to these efforts, in concert with both SOCOM and the Marine Corps, is our command-wide push to enhance our culture of accountability as it relates to issues such as sexual misconduct, illicit drug use, personal accountability, and unauthorized media release. As an example, our reported number of sexual assault cases remains in the low single digits and we have not had any victim reported incidents in Fiscal Year 18. We attribute this low number of incidents to our constant command level messaging campaign and our strong Sexual Assault Prevention and Response (SAPR) program. While we believe that even a single incident is one too many, we continue to strive to eradicate sexual and other forms of misconduct from our force. We strive each day to provide you SOF personnel that continue to embody the values of accountability, integrity, and commitment in honorable service to our nation.", "Conclusion:", "In conclusion, I am committed to providing Marine Raiders that provide the nation with full spectrum special operations capability and whose actions continually demonstrate our motto of Spiritus Invictus, or 'unconquerable spirit'. Your Marine Special Operators will remain always faithful, always forward. I thank the committee for your continued support of our military members and their families and also for your commitment to national security.", "Appendix B. November 2011 Navy Testimony on Navy IW Activities", "This appendix presents the text of the Navy's prepared statement for a November 3, 2011, hearing before the Emerging Threats and Capabilities subcommittee of the House Armed Services Committee on the IW activities of the military services. The text of the statement, by Rear Admiral Sinclair Harris, Director, Navy Irregular Warfare Office, is as follows:", "Chairman Thornberry, Congressman Langevin, and distinguished members of the House Armed Services Emerging Threats and Capabilities Subcommittee, it is an honor for me to be here with you today to address the U.S. Navy's efforts to institutionalize and develop proficiency in irregular warfare mission areas. These efforts are vital to our national interests and, as part of a comprehensive approach for meeting complex global challenges, remain relevant in a time of uncertainty and constant change. To meet these challenges Admiral Greenert, Chief of Naval Operations, recently provided his Sailing Directions to our Navy emphasizing the mission to deter aggression and, if deterrence fails, to win our Nation's wars. Today, the Navy is engaged around the world conducting preventive activities that stabilize, strengthen, and secure our partners and allies providing regional deterrence against state and non-state actors, while at the same time fighting, and winning, our Nation's wars. We expect the demand for these activities to increase in the future security environment as a capacity constrained Navy seeks to maintain access and presence. Emphasis on increased training and education will enable our continued readiness to effectively meet global demand.", "As demand for our Navy continues to grow, we continue to leverage our Maritime Strategy with our partners, the Marine Corps and Coast Guard. The maritime domain supports 90% of the world's trade and provides offshore options to help friends in need, and to confront and defeat aggression far from our shores as part of a defense in depth approach to secure our homeland. CNO's Sailing Directions, coupled with an enduring Maritime Strategy, underscore the Navy's focus on multi-mission platforms and highly trained Sailors that conduct activities across the operational spectrum. Key tenets of the force are readiness to fight and win today while building the ability to win tomorrow; to provide offshore options to deter, influence, and win; and to harness the teamwork, talent and imagination of our diverse force. While the Maritime Strategy spans the spectrum of warfare, the Navy's Vision for Confronting Irregular Challenges (CIC), released in January 2010, addresses mission areas of irregular warfare as well as maritime activities to prevent, limit, and interdict irregular threats and their influence on regional stability through, insurgency, crime, and violent extremism.", "The CIC Vision is derived from our Maritime Strategy with the intention to implement steps towards increasing the Navy's proficiency in supporting direct and indirect approaches that dissuade and defeat irregular actors who exploit uncontrolled or ungoverned spaces in order to employ informational, economic, technological, and kinetic means against civilian populations to achieve their objectives. The CIC Vision is guiding the alignment of organizations, investments, innovation, procedures, doctrine, and training needed to mainstream CIC capabilities within the Fleet. These efforts are focused on outcomes of increased effectiveness in stabilizing and strengthening regions, enhancing regional awareness, increasing regional maritime partner capacity, and expanding coordination and interoperability with joint, interagency, and international partners. These outcomes support promoting regional security and stability and advancing the rule of law allowing good governance and promoting prosperity by helping partners better protect their people and resources. In addition to preventive activities, the Vision guides efforts to inhibit the spread of violent extremism and illicit, terrorist, and insurgent activities. To achieve these outcomes, the Navy is actively reorienting doctrine and operational approaches, rebalancing investments and developmental efforts, and refining operations and partnerships to better support a comprehensive approach to U.S. efforts. These efforts will provide a Navy capable of confronting irregular challenges through a broad array of multi-mission capabilities and a force proficient in the CIC missions of security force assistance, maritime security, stability operations, information dominance, and force application necessary to support counterinsurgency, counterterrorism, and foreign internal defense missions.", "In line with its strategy for confronting irregular challenges the Navy has leveraged key force providers, such as the Navy Expeditionary Combat Command, and established Maritime Partnership Stations, and Maritime Headquarters with Maritime Operations Centers to meet the demands and missions consistent with its strategy and vision. The evolution of intelligence and strike capabilities has enabled the Navy to meet urgent Combatant Commander requirements for counterterrorism and counterinsurgency operations and highlighted further opportunities for the Navy as an important joint partner. While these operational organizations and activities deliver Navy capabilities in theater, the Navy Irregular Warfare Office, established by the CNO in July 2008, has guided the implementation and institutionalization of the CIC Vision. The Navy Irregular Warfare Office, working closely with USSOCOM, other Combatant Commanders, Services, interagency and international partners, has rapidly identified and deployed Navy capabilities to today's fight, and is institutionalizing confronting irregular challenges concepts in the Navy's planning, investment, and capability development.", "The Navy Irregular Warfare Office operates under three primary imperatives consistent with the Maritime Strategy, CNO's Sailing Directions, and the Navy's Vision for Confronting Irregular Challenges. They provide integration and institutionalization in CIC mission areas and are; (1) improve the level of understanding concerning the maritime contribution to the joint force; (2) increase proficiency of the whole of Navy to confront irregular challenges; and (3) drive maritime and special operations forces to seamless integration in addressing irregular challenges. These three imperatives focus the Navy's implementation efforts and mainstream the concept that preventing wars is as important as winning them. Our Navy must be ready to transition seamlessly between operational environments, with the capability and training inherent in the Fleet.", "Department of Defense Directive 3000.07 directs the services to \"improve DoD proficiency for irregular warfare, which also enhances its conduct of stability operations\" and directs reporting to the Chairman of the Joint Chiefs of Staff annually. Navy efforts to institutionalize and provide proficiency in confronting irregular challenges, includes proficiency in irregular warfare missions along with missions of maritime security operations and information dominance, a key enabler for CIC. Currently, the Navy leverages its access and persistent presence to both better understand and respond to irregular challenges and is actively evolving its proficiency to prevent and counter irregular threats while maintaining its ability to conduct the full spectrum of naval warfare. Its access, presence, and emphasis on maritime partnerships enable broader government efforts to address underlying conditions of instability that enhance regional security. Through its mix of multi-mission capabilities, the Navy provides political leaders with a range of offshore options for limiting regional conflict through assurance, deterrence, escalation and de-escalation, gaining and maintaining access, and rapid crisis response. In addition to its inherent ability to protect the maritime commons, its effectiveness in building maritime partner capability and capacity contributes to achieving partner security and economic objectives. Operating in and from the maritime domain with joint and international partners, the Navy is enhancing regional security while dissuading, deterring, and when necessary, defeating irregular threats.", "The Navy acknowledges the complexity of the future security environment and continues to explore balanced approaches. Following are the Navy's current focus areas:", "Fleet-SOF Integration: Navy's afloat basing support to special operations forces has extended their reach into denied or semi-permissive areas enabling highly successful counterterrorism missions. Navy provides inherent combat capabilities, multi-mission ships and submarines collecting mission critical information, approval for 1052 support billets for Naval Special Warfare, two dedicated HCS squadrons, and shipboard controlled UAV orbits supporting counterterrorism operations. The Navy is aligned to improve this integration through pre-deployment training, mission rehearsals, improvements to fleet bandwidth allocation, shipboard C4I enhancements, and C2 relationships needed to prosecute time sensitive targets.", "Maritime Partnerships: Establishing enduring maritime partnerships is a long-term strategy for securing the maritime commons. Legal, jurisdictional, and diplomatic considerations often complicate efforts to secure the maritime commons, especially from exploitation by highly adaptive irregular actors. In recognition of these considerations, the Navy is emphasizing partnership engagements with U.S. and international maritime forces to strengthen regional security.", "Information Sharing Initiatives: In an information dominated environment, initiatives that link joint warfighters, the technology community, and academia are crucial to rapidly fielding solutions to emerging irregular challenges. These initiatives are the basis for longer-term efforts to adapt and improve proficiency of Navy platforms to address irregular challenges.", "Doctrine: Development of Tri-Service (Navy, Marine Corps, and Coast Guard) Maritime Stability Operations doctrine that will enable a more effective response to instability in the littorals.", "Organization: Navy Expeditionary Combat Command, which continues to provide in-demand capabilities such as Maritime Civil Affairs Teams, Riverine Forces, Maritime Security Forces, Explosive Ordnance Disposal Teams, and Expeditionary Intelligence Teams.", "Today, the Navy continues to meet planned global operational commitments and respond to crises as they emerge. Overseas Contingency Operations continue with more than 12,000 active and reserve Sailors serving around the globe and another 15,000 at sea in Central Command. Navy's Carrier Strike Groups provide 30 percent of the close air support for troops on the ground in Afghanistan and our Navy and Marine Corps pilots fly almost 60% of electronic attack missions. Yet, as our national interests extend beyond Iraq and Afghanistan, so do the operations of our Navy. Over the last year, more than 50 percent of our Navy has been underway daily; globally present, and persistently engaged. Last year, our Navy conducted counter-piracy operations in the Indian Ocean and North Arabian Sea with a coalition of several nations, trained local forces in maritime security as part of our Global Maritime Partnership initiatives in Europe, South America, Africa and the Pacific and forces in the Sixth Fleet supported NATO in complex operations in Libya. Navy responded with humanitarian assistance and disaster relief to the earthquake in Haiti, the flooding in Pakistan, and the earthquake and tsunami in Japan; and, conducted the world's largest maritime exercise, Rim of the Pacific (RIMPAC), which brought together 14 nations and more than 20,000 military personnel, to improve coordination and trust in multi-national operations in the Pacific. Our Sailors continue to deploy forward throughout the world, projecting US influence, responding to contingencies, and building international relationships that enable the safe, secure, and free flow of commerce that underpins our economic prosperity and advances the mission areas that address irregular challenges.", "The future vision of the Navy in meeting the uncertain challenges around the globe remains a force forward, present, and persistent in areas critical to the national interests of the United States. CNO, in previous testimony, stated: Our Navy continues to conduct a high tempo of global operations, which we expect to continue even as forces draw down in Afghanistan. Global trends in economics, demographics, resources, and climate change portend an increased demand for maritime presence, power, and influence. America's prosperity depends on the seas\u2026 and as disruption and disorder persist in our security environment, maritime activity will evolve and expand. Seapower allows our nation to maintain U.S. presence and influence globally and, when necessary, project power without a costly, sizeable, or permanent footprint ashore. We will continue to maintain a forward-deployed presence around the world to prevent conflict, increase interoperability with our allies, enhance the maritime security and capacity of our traditional and emerging partners, confront irregular challenges, and respond to crises. To continue as a global force in the preventive and responsive mission areas that confront irregular challenges, including those of irregular warfare, the Navy will be faced with increasing demand in a fiscally induced capacity constrained environment. Constrained capacity requires a prioritization of areas requiring persistent presence, to include those regions of current or forecast instability. Also required is an understanding of the risk incurred to mission, and to force, if we do not get that priority correct. We must ensure our Navy remains the finest, best trained, and most ready in the world to sustain key mission areas that support confronting irregular challenges, and has the ability to face a highly capable adversary. The Navy looks forward to working with Congress to address our future challenges and thank you for your support of the Navy's mission and personnel at this critical crossroads in U.S. history.", "Appendix C. 2010 Navy Irregular Warfare Vision Statement", "This appendix reproduces the Navy's January 2010 vision statement for irregular warfare.", "Appendix D. 2012 RAND Corporation Report Findings and Recommendations", "This appendix presents findings and recommendations from a 2012 report on maritime regular warfare by RAND Corporation, a research firm.", "Findings", "The report made the following findings, among others:", "The study's main findings span the strategic, operational, and tactical levels. Several are specific to MIW, while others have implications both for MIW [maritime irregular warfare] and for IW operations more broadly.", "First, the maritime force is generally considered to play a supportive role to ground forces in IW and therefore has the potential to be underutilized even in IW operations conducted in a predominantly maritime environment ....", "Second, countries that have a prevalent maritime dimension associated with an insurgency could potentially benefit from the enhancement of civil-military operations (CMOs) in the maritime arena ....", "Third, maritime operations in IW can allow the United States to scale its ground involvement in useful ways ....", "Fourth, if one assumes that future MIW engagements that entail building a partner's capacity will resemble OEF-P [Operation Enduring Freedom\u2014Philippines], it is important to manage strategic expectations based on realistic assessments of the partner's capabilities ....", "Fifth, when building partner capacity, either in MIW or land-based IW, the United States should make efforts to provide equipment and technology that the partner will be able to maintain and operate without difficulty ....", "Sixth, with regard to operational methods, coastal maritime interdiction can play an instrumental role in setting the conditions for success in IW by cutting the supply lines that sustain an insurgency ....", "Seventh, as the [1980s] Nicaragua case illustrates, U.S. partners in MIW may only have to influence and monitor the sensibilities of a local population, but the legitimacy of U.S. involvement may be tested in worldwide public opinion ....", "Finally, international cooperation in confronting MIW adversaries is often necessary, and the U.S. Navy should make an effort to ensure that it is tactically and operationally interoperable with partner navies in order to facilitate coordination ....", "Recommendations", "The report made the following recommendations, among others:", "The findings presented here have several direct implications for the U.S. conventional Navy and Naval Special Warfare Command (NSW). First, U.S. naval forces should continue to provide U.S. partners with suitable equipment that they will be able to operate and maintain and should continually strive to increase their interoperability with partner forces. Second, U.S. naval forces may have to continue or expand training of partner forces to confront future MIW threats. Third, when conducting MIW, operating from a sea base offers advantages to NSW. However, due to the costs of such a practice, both NSW and the conventional Navy must also recognize that decisions regarding when and where to support sea basing of this sort need to be made carefully. Fourth, in support of future MIW operations, NSW is likely to have ongoing requirements for maritime interdiction and containment. Fifth, the United States could benefit from maintaining operational and tactical capabilities with which to assist its partners in surveillance, particularly against small submarines and mining threats. Sixth, NSW should consider increasing its capacity to conduct maritime-based CMOs.", "Conventional U.S. naval forces should similarly consider their role in supporting significant irregular ground operations launched from the sea, as well as their role in interdiction and containment campaigns. In contrast to those of NSW, conventional U.S. Navy capabilities to support IW might entail CMOs and related activities to a greater extent than direct action.", "Appendix E. Detention of Terrorist Suspects on U.S. Navy Ships", "This appendix presents additional background information on detention of terrorist suspects on U.S. Navy ships.", "On July 6, 2011, it was reported that", "The U.S. military captured a Somali terrorism suspect [named Ahmed Abdulkadir Warsame] in the Gulf of Aden in April and interrogated him for more than two months aboard a U.S. Navy ship before flying him this week to New York, where he has been indicted on federal charges....", "Other U.S. officials, interviewed separately, said Warsame and another individual were apprehended aboard a boat traveling from Yemen to Somalia by the U.S. military's Joint Operations Command. The vessel was targeted because the United States had acquired intelligence that potentially significant operatives were on board, the officials said. Court documents said the capture took place April 19.", "One of the senior administration officials who briefed reporters said that the other suspect was released \"after a very short period of time\" after the military \"determined that Warsame was an individual that we were very much interested in for further interrogation.\"", "According to court documents, Warsame was interrogated on \"all but a daily basis\" by military and civilian intelligence interrogators. During that time, officials in Washington held a number of meetings to discuss the intelligence being gleaned, Warsame's status and what to do with him.", "The options, one official said, were to release him, transfer him to a third country, keep him prisoner aboard the ship, subject him to trial by a military commission or allow a federal court to try him. The decision to seek a federal indictment, this official said, was unanimous.", "Administration officials have argued that military commission jurisdiction is too narrow for some terrorism cases - particularly for a charge of material support for terrorist groups - and the Warsame case appeared to provide an opportunity to try to prove the point.", "But some human rights and international law experts criticized what they saw as at least a partial return to the discredited \"black site\" prisons the CIA maintained during the Bush administration....", "Warsame was questioned aboard the ship because interrogators \"believed that moving him to another facility would interrupt the process and risk ending the intelligence flow,\" one senior administration official said.", "The official said Warsame \"at all times was treated in a manner consistent with all Department of Defense policies\" - following the Army Field Manual - and the Geneva Conventions.", "Warsame was not provided access to an attorney during the initial two months of questioning, officials said. But \"thereafter, there was a substantial break from any questioning of the defendant of four days,\" court documents said. \"After this break, the defendant was advised of his Miranda rights\" - including his right to legal representation \u2013 \"and, after waiving those rights, spoke to law enforcement agents.\"", "The four-day break and separate questioning were designed to avoid tainting the court case with information gleaned through un-Mirandized intelligence interrogation, an overlap that has posed a problem in previous cases. The questioning continued for seven days, \"and the defendant waived his Miranda rights at the start of each day,\" the documents said....", "U.S. Navy Vice Adm. William H. McRaven alluded to the captures in testimony before a Senate committee last week in which he lamented the lack of clear plans and legal approvals for the handling of terrorism suspects seized beyond the war zones of Iraq and Afghanistan.", "At one point in the hearing, Sen. Carl Levin (D-Mich.), the chairman of the Senate Armed Services Committee, referred to \"the question of the detention of people\" and noted that McRaven had \"made reference to a couple, I think, that are on a ship.\"", "McRaven replied affirmatively, saying, \"It depends on the individual case, and I'd be more than happy to discuss the cases that we've dealt with.\"", "Another press report on July 6, 2011, stated the following:", "In a telephone briefing with reporters, senior administration officials said Mr. Warsame and another person were captured by American forces somewhere \"in the Gulf region\" on April 19. Another official separately said the two were picked up on a fishing trawler in international waters between Yemen and Somalia. That other person was released.", "Mr. Warsame was taken to a naval vessel, where he was questioned for the next two months by military interrogators, the officials said. They said his detention was justified by the laws of war, but declined to say whether their theory was that the Shabab are covered by Congress's authorization to use military force against the perpetrators of the Sept. 11, 2001, attacks; whether the detention was justified by his interactions with Al Qaeda's Yemen branch; or something else.", "The officials also said interrogators used only techniques in the Army Field Manual, which complies with the Geneva Conventions. But they did not deliver a Miranda warning because they were seeking to gather intelligence, not court evidence. One official called those sessions \"very, very productive,\" but declined to say whether his information contributed to a drone attack in Somalia last month.", "After about two months, Mr. Warsame was given a break for several days. Then a separate group of law enforcement interrogators came in. They delivered a Miranda warning, but he waived his rights to remain silent and have a lawyer present and continued to cooperate, the officials said, meaning that his subsequent statements would likely be admissible in court.", "Throughout that period, administration officials were engaged in deliberations about what to do with Mr. Warsame's case. Eventually, they \"unanimously\" decided to prosecute him in civilian court. If he is convicted of all the charges against him, he would face life in prison.", "Last week, Vice Adm. William H. McRaven, who was until recently in charge of the military's Joint Special Operations Command, told a Senate hearing that detainees are sometimes kept on Navy ships until the Justice Department can build a case against them, or they are transferred to other countries for detention.", "Another senior administration official said Tuesday that such detentions are extremely rare, and that no other detainees are now being held on a Navy ship.", "A July 7, 2011, press report stated the following:", "In interrogating a Somali man for months aboard a Navy ship before taking him to New York this week for a civilian trial on terrorism charges, the Obama administration is trying out a new approach for dealing with foreign terrorism suspects.", "The administration, which was seeking to avoid sending a new prisoner to Guant\u00e1namo Bay, Cuba, drew praise and criticism on Wednesday [July 6] for its decisions involving the Somali suspect, Ahmed Abdulkadir Warsame, accused of aiding Al Qaeda's branch in Yemen and the Shabab, the Somali militant group.", "A July 6, 2011, entry in a blog that reports on naval-related events stated that the U.S. Navy ship to which Warsame was taken was the amphibious assault ship Boxer (LHD-4).", "An October 24, 2012, press report stated the following:", "Over the past two years, the Obama administration has been secretly developing a new blueprint for pursuing terrorists, a next-generation targeting list called the \"disposition matrix.\"", "The matrix contains the names of terrorism suspects arrayed against an accounting of the resources being marshaled to track them down, including sealed indictments and clandestine operations. U.S. officials said the database is designed to go beyond existing kill lists, mapping plans for the \"disposition\" of suspects beyond the reach of American drones.", "Although the matrix is a work in progress, the effort to create it reflects a reality setting in among the nation's counterterrorism ranks: The United States' conventional wars are winding down, but the government expects to continue adding names to kill or capture lists for years....", "The database is meant to map out contingencies, creating an operational menu that spells out each agency's role in case a suspect surfaces in an unexpected spot. \"If he's in Saudi Arabia, pick up with the Saudis,\" the former official said. \"If traveling overseas to al-Shabaab [in Somalia] we can pick him up by ship. If in Yemen, kill or have the Yemenis pick him up.\"", "Officials declined to disclose the identities of suspects on the matrix. They pointed, however, to the capture last year of alleged al-Qaeda operative Ahmed Abdulkadir Warsame off the coast of Yemen. Warsame was held for two months aboard a U.S. ship before being transferred to the custody of the Justice Department and charged in federal court in New York.", "\"Warsame was a classic case of 'What are we going to do with him?'\" the former counterterrorism official said. In such cases, the matrix lays out plans, including which U.S. naval vessels are in the vicinity and which charges the Justice Department should prepare.", "An October 6, 2013, press report stated the following:", "An accused operative for Al Qaeda seized by United States commandos in Libya over the weekend is being interrogated while in military custody on a Navy ship in the Mediterranean Sea, officials said on Sunday [October 6]. He is expected eventually to be sent to New York for criminal prosecution.", "The fugitive, known as Abu Anas al-Libi, is seen as a potential intelligence gold mine, possessing perhaps two decades of information about Al Qaeda, from its early days under Osama bin Laden in Sudan to its more scattered elements today. ", "The decision to hold Abu Anas and question him for intelligence purposes without a lawyer present follows a pattern used successfully by the Obama administration with other terrorist suspects, most prominently in the case of Ahmed Abdulkadir Warsame, a former military commander with the Somali terrorist group Shabab....", "\"Warsame is the model for this guy,\" one American security official said....", "Abu Anas is being held aboard the U.S.S. San Antonio, a vessel brought in specifically for this mission, officials said.", "A June 27, 2014, press report stated the following:", "Right now, a suspected terrorist is sitting in the bowels of a U.S. Navy warship somewhere between the Mediterranean Sea and Washington, D.C. Ahmed Abu Khattala, the alleged leader of the September 2012 attack on the U.S. embassy in Benghazi, Libya, is imprisoned aboard the USS New York, likely in a bare cell normally reserved for U.S. military personnel facing disciplinary action at sea. En route to the United States for more than a week, he's being questioned by military and civilian interrogators looking for critical bits of intelligence before he's read his Miranda rights, formally arrested, and transferred to the U.S. District Court in Washington, where he'll face trial. Meanwhile, the sailors aboard are going about the daily business of operating an amphibious transport ship\u2014even as the ship's mission has been redefined by the new passenger in their midst.", "This isn't the first time the Navy has played such a critical, curious, and largely under-reported role in U.S. counterterrorism efforts. In 2011, Ahmed Abdulkadir Warsame, a military commander for the Somali terrorist group al-Shabab, was captured aboard a fishing boat in the Gulf of Aden and detained by the Navy, on the high seas, for two months. In 2013, Abu Anas al-Libi, the alleged mastermind of the 1998 terrorist attacks on American embassies in Kenya and Tanzania, was held aboard the USS San Antonio\u2014an identical ship to the one being used this week. Both men were interrogated at sea before being flown to the United States to face criminal charges in federal courts....", "In many ways, it's not surprising that the U.S. government has been turning Navy assets into floating prisons for these dangerous men. Taking the slow route back to the United States offers interrogators the time and space to gather crucial intelligence from high-value sources like al-Qaeda-linked operatives. During the two months that Warsame was at sea, a select team of FBI, CIA, and Defense Department officials, part of the Obama administration's High-Value Detainee Interrogation Group, questioned the Somali terrorist on \"all but a daily basis.\" He was cooperative throughout and some reports suggest that subsequent U.S. counterterrorism operations, including a drone attack in Somalia shortly after his capture, were a direct result of intelligence Warsame provided to authorities. While al-Libi was only detained at sea for about a week\u2014a chronic medical condition prevented him from being held on a ship for an extended period\u2014reports suggest that similar intelligence-collection efforts were underway in his case as well.", "The U.S. government has also embraced the approach because it has limited options for holding and interrogating men like Abu Khattala after capture. The Obama administration remains committed to ending detention operations at Guant\u00e1namo Bay, Cuba. While the facility is still home to almost 150 alleged terrorists, the United States has not sent any new detainees there since March 2008. Detaining suspected terrorists at other overseas facilities is likewise not an option. For a time, U.S.-run prisons in Afghanistan were a possibility. But the detention facility in Parwan is now an Afghan-run prison, and using facilities in other countries would raise a host of legal, operational, and humanitarian concerns. Even if U.S. officials were willing to forgo the opportunity to question Abu Khattala before he's arraigned in federal court and provided with a lawyer, flying alleged terrorists to the United States immediately presents its own set of problems. Seemingly small operational and political considerations about the ways in which the United States transports terrorists captured abroad have major strategic implications, particularly given lingering questions about U.S. rendition efforts under the Bush administration. In this context, the Navy has taken on the role of high-seas prison warden, even as lawyers continue to debate whether and what international legal rules apply to terrorists captured abroad and detained, temporarily, on a ship.", "Appendix F. Background Information on FY2020 Funding Requests for Lines 263 and 63", "As noted earlier in this report, DOD's proposed FY2020 budget requests, among other things,", "$72.6 million in the FY2020 Research, Development, Test, and Evaluation, Defense-Wide (RDT&EDW) account for Program Element (PE) 1160483BB, (Special Operations Command [SOCOM]) maritime systems (line 263 in the FY2020 RDT&EDW account), including $45.2 million for Project S0417: Underwater Systems, and $15.6 million for S1684: Surface Craft; and $27.4 million in the FY2020 Procurement, Defense-Wide (PDW) appropriation account for procurement of underwater systems for SOCOM (line 63 in the FY2020 PDW account).", "Research and Development for Maritime Systems (Line 263)", "Regarding the FY2020 funding request for line 263, DOD states that", "This program element provides for engineering and manufacturing development (EMD) of Special Operations Forces (SOF) Surface and Undersea Mobility platforms. This program element also provides for pre-acquisition activities to quickly respond to new requirements for SOF surface and undersea mobility, looking at multiple alternatives to include cross-platform technical solutions, service-common solutions, Commercial-Off-The-Shelf technologies, and new development efforts. Middle-Tier Acquisition (2016 NDAA, Section 804) to accommodate rapid prototyping, may be utilized.", "The Underwater Systems project provides for EMD of combat submersibles, SOF operator diving systems, underwater support systems, and underwater equipment. This project also provides for pre-acquisition activities (material solutions analysis, advanced component, prototype development, and exploitation of emerging technology opportunities to deliver enhanced capabilities) to respond to emergent requirements. These submersibles, equipment, and diving systems are used by SOF in the conduct of infiltration/extraction, personnel/material recovery, hydrographic/inland reconnaissance, beach obstacle clearance, underwater ship attack, and other missions. The capabilities of the submersible systems, diving systems, and unique equipment provide small, highly trained forces the ability to successfully engage the enemy and conduct clandestine operations associated with SOF maritime missions.", "The Surface Craft project provides for EMD of medium and heavy surface combatant craft, combatant craft mission equipment, and pre-planned product improvement and technology insertion engineering changes to meet the unique requirements of SOF. This project element also provides for pre-acquisition activities (materiel solutions analysis, advanced component development and prototypes) to quickly respond to new requirements for maritime craft and subsystems. The craft capabilities and unique equipment provide small, highly trained forces the ability to successfully engage the enemy and conduct operations associated with SOF maritime missions\u2026.", "[S0417: Underwater Systems] provides for engineering and manufacturing development of combat underwater submersibles, Special Operations Forces (SOF) operator diving systems, underwater support systems, and underwater equipment. This project also provides for pre-acquisition activities (materiel solutions analysis, advanced component development and prototypes) to respond to emergent requirements. Middle-Tier acquisitions to accommodate rapid prototyping may be utilized. These submersibles, equipment, and diving systems are used by SOF in the conduct of infiltration/extraction, personnel/material recovery, hydrographic/inland reconnaissance, beach obstacle clearance, underwater ship attack, and other missions. The capabilities of the submersible systems, diving systems, and unique equipment provides small, highly trained forces the ability to successfully engage the enemy and conduct clandestine operations associated with SOF maritime missions\u2026.", "[Within Project S0417, the subproject for Shallow Water Combat Submersible (SWCS)] provides for the design, development, test, manufacturing and sustainment of one Engineering Development Model (EDM) and ten production units to replace the legacy MK 8 MOD 1 Seal Delivery Vehicle (SDV) system. SWCS is a free-flooding combat submersible mobility platform suitable for transporting and deploying SOF and their payloads for a variety of SOF missions. SWCS will be deployable from a Dry Deck Shelter (DDS), surface ships, and land. The SWCS system includes the SWCS vehicle and SWCS support Equipment, comprised of Mission Support Equipment (MSE), Pack-Up Kit (PUK), and Transportation and Handling (T&H). It also includes integration efforts with the current Dry Deck Shelter (DDS) and development of product improvements accomplished throughout the lifecycle of the system\u2026.", "[The sub-project for Dry Deck Shelter (DDS) Modernization] provides for the pre-planned product improvements, testing, and integration of specialized underwater systems to meet the unique requirements of SOF, and compatibility with the submarine fleet. The current DDS is a certified diving system which attaches to modified host submarines that provides for insertion of SOF forces and platforms. Funding supports product improvements to the current DDS, as well as associated diver equipment for in-service submarine support systems, unmanned underwater vehicles, and follow on development efforts for future SOF payloads\u2026.", "[The sub-project for combat diving] is a Middle Tier of Acquisition designated program which provides for the development, testing, and rapid fielding and prototyping of SOF peculiar diving equipment providing the SOF combat diver the ability to engage the enemy and conduct operations. SOF Combat Diving will support the SDV, SWCS, and DCS with the conduct of infiltration/extraction, material recovery, underwater ship attack, beach clearance, and other missions. Technologies include, but are not limited to, commercial and developmental life support, maneuverability and propulsion, diver navigational accuracy and situation awareness, environmental protection, and communications between dive teams as well as between divers and external vessels/craft\u2026.", "[The sub-project for Undersea Craft Mission Equipment (UCME)] provides a rapid response capability to support SOF underwater craft and diver systems, subsystems, and their emerging requirements. UCME provides technology refresh efforts to correct system deficiencies, improve asset life, and enhance mission capability to leverage and exploit emerging technologies within the maritime Special Operations Forces undersea capability portfolio\u2026.", "[Project S1684: Surface Craft] provides for engineering and manufacturing development of medium and heavy surface combatant craft, combatant craft mission equipment, and preplanned product improvement (P3I) and technology insertion engineering changes to meet the unique requirements of Special Operations Forces (SOF). This project also provides for pre-acquisition activities (materiel solutions analysis, advanced component development and prototypes) to quickly respond to new requirements for maritime craft and subsystems Middle-Tier acquisition to accommodate rapid prototyping, may be utilized. The craft capabilities and unique equipment provide small, highly trained forces the ability to successfully engage the enemy and conduct operations associated with SOF maritime missions\u2026.", "[The sub-project for Combatant Craft Medium (CCM) Mk 1] is a semi-enclosed multi-mission combatant craft for platoon-size maritime mobility in maritime denied environments. It is multi-mission capable, including Maritime Interdiction, Insert / Extract, and Visit, Board, Search, and Seizure (VBSS) Operations. CCM is Naval Special Warfare's (NSW) craft-of-choice for long-range, high-payload SOF mobility operations in denied environments up to high threat. CCM has NSW's best Iron Triangle: 40 knot (kt) speed; 4 crew + 19 passengers (pax) / 10,000 pound (lb) payload; and 600 nautical miles (nm) range. CCM Mk 1 payload capacity enables inclusion of shock mitigating seats, which is critical for ride quality, operator tactical readiness, and operator health. At 60 feet long, CCM is C-17 / C5 transportable and can launch/recover by well deck or shore based trailer\u2026.", "[The sub-project for Combatant Craft Heavy (CCH)] represents a family of solutions that provides platoon-size maritime surface mobility. The current CCH is the Sea, Air, Land Insertion, Observation, and Neutralization (SEALION) craft. SEALION is a fully-enclosed, climate- controlled, semi-submersible craft that operates in denied environments up to high-threat. SEALION is NSW's most versatile and survivable combatant craft and the craft-of-choice for sensitive maritime intelligence, surveillance, and reconnaissance missions. Iron Triangle: 40 kt speed; 7 crew + 12 pax / 3,300 lb payload; and 400 nm range. SEALION payload capacity enables inclusion of shock mitigating seats, which is critical for ride quality, operator tactical readiness, and operator health. At 77+ feet long, SEALION is C-17/C-5 transportable and can launch/recover by well deck or shore based mobile travel lift or crane\u2026.", "[The sub-project for Combatant Craft Mission Equipment (CCME)] provides a rapid response capability to support SOF combatant craft systems, subsystems, and their emerging requirements. CCME provides technology refresh efforts to correct system deficiencies, improve asset life, and enhance mission capability. Demonstrations and modifications may be made to support emerging capability enhancements such as, but not limited to, conformal antennas, identification friend-or-foe capabilities, enhanced communications, weapon integration, software refresh, and navigation subsystems in support of future missions. Solutions to these emerging requirements may be commercial-off-the-shelf leveraged from other government agencies, or new solutions\u2026.", "[The sub-project for Combatant Craft Assault (CCA)] is a combatant craft for squad-size maritime mobility operations in maritime denied environments. CCA is NSW's best craft for VBSS in maritime denied environments up to and including medium threat. It is the craft-of-choice for maritime interdiction and boarding operations because of the open deck space, maneuverability, and interoperability with an Afloat Forward Staging Base. Iron Triangle: 40 kt speed; 3 crew + 12 pax / 5,000 lb payload; and 300 nm range. At 41 feet long, CCA is air transportable by C-130 / C-17 / C-5 and can launch/recover by crane, davit, well deck, or shore based trailer\u2026.", "[The sub-project for Threat Awareness System (TAS)] provides SOF with an Electronic Intelligence capability for enhanced force protection of SOF in Maritime denied environments by allowing them to identify and avoid enemy detection capabilities. TAS will utilize technological advancements to gain significant improvements in capability such as miniaturization and marinization to enable seamless craft integration\u2026.", "[The sub-project for Maritime Precision Engagement (MPE)] is a family of standoff, loitering, man-in-the-loop weapons systems deployed on combatant craft and capable of targeting individuals, groups, vehicles, high value targets, and small oceangoing craft with low collateral damage. The program consists of combatant craft alterations, launcher systems, and munitions.", "Procurement of Underwater Systems (Line 63)", "Regarding the FY2020 funding request for line 63, DOD states that", "The Underwater Systems line item procures dry and wet combat submersibles, modifications, field changes to the Dry Deck Shelter (DDS), and various systems and components for Special Operations Forces (SOF) Combat Diving. Current acquisition procurement programs of record are the Shallow Water Combat Submersible (SWCS) program, Dry Combat Submersible (DCS), SOF Combat Diving and Dry Deck Shelter (DDS). Middle-Tier Acquisition (2016 NDAA, Section 804) to accommodate rapid fielding, may be utilized. SWCS is the next generation free-flooding combat submersible that transports SOF personnel and their combat equipment in hostile waters for a variety of missions. SOF units require specialized underwater systems that improve their warfighting capability and survivability in harsh operating environments. The DCS will provide the capability to insert and extract SOF and/or payloads into denied areas from strategic distances. The program is structured to minimize technical, cost, and schedule risks by leveraging commercial technologies, procedures, and classing methods to achieve an affordable DCS. SOF Combat Diving supports the unique requirements impacting fully equipped operators while conducting underwater, real-world missions. Examples of underwater systems and maritime equipment include, underwater navigation, diving equipment, and underwater propulsion systems. These systems and equipment are used for infiltration/extraction, reconnaissance, beach obstacle clearance, and other missions. The capabilities of submersible systems and unique equipment provides small, highly trained forces the ability to successfully engage the enemy and conduct operations associated with SOF maritime missions\u2026.", "Justification:", "1. DDS: The DDS is a certified diving system that attaches to modified host submarines and provides for insertion of SOF forces and platforms. SOCOM has a cost share agreement with the Navy to support the modernization of the DDS in order to accommodate current and future Naval Special Warfare payloads as well as large U.S. Navy payloads.", "FY 2020 PROGRAM JUSTIFICATION: Funding continues the support of the DDS modernization effort, which includes relocation of equipment inside the DDS Hangar to support current and future payloads. Funding also includes field changes for product improvements developed to overcome obsolescence and Diminishing Manufacturing Sources and Material Shortages (DMSMS).", "2. SWCS: Shallow Water Combat Submersible (SWCS) is a free-flooding combat submersible mobility platform suitable for transporting and deploying SOF and their payloads for a variety of SOF missions. SWCS will be deployable from a DDS, surface ships, and land.", "FY 2020 PROGRAM JUSTIFICATION: Purchases two SWCS vehicles and support equipment, Government Furnished Equipment (GFE), engineering change proposals (ECP), detachment deployment packages, and initial spares.", "3. DCS: The DCS provides SOF with a dry diver lock-in and lock-out capability that transports personnel and their combat equipment in hostile waters for a variety of missions.", "FY 2020 PROGRAM JUSTIFICATION: Purchases initial spares, GFE, ECP, system integration lab, and simulator.", "4. SOF Combat Diving: This is designated a Middle-tier Acquisition program allowing for rapid fielding which provides the transition of SOF peculiar diving technologies for the SOF combat diver while conducting underwater, real-world missions.", "FY 2020 PROGRAM JUSTIFICATION: Procures total of 10 divers' maritime environmental protection and diver navigation.", "Press Reports", "A November 30, 2016, press report states the following:", "USSOCOM is currently pursuing two programmes to enhance the sub-surface capabilities of US Navy (USN) SEALs including the Shallow Water Combat Submersible (SWCS) and Dry Combat Submersible (DCS). Both solutions are fully enclosed vehicles for operators, thereby reducing any requirement for teams to wear rebreathing equipment during mission insertions and extractions....", "The main difference between SWCS and DCS is range, with the latter solution providing a longer insertion distance with a greater depth capability.", "The SWCS, for example, is being designed to replace legacy Mk 8 Mod 1 SEAL Swimmer Delivery Vehicles (SDVs), bringing an improved electronic architecture and software on top of the requirements list for NSWC. SOF sources associated with USSOCOM explained to IHS Jane's how the first SWCS could be delivered to the Command in 2017. This would be followed by extensive operational evaluation with NSWC elements ahead of initial and full entry into service, sources added.", "According to USSOCOM officials, a total of two SWCS platforms will be procured by the DoD in 2017, along with associated batteries, trailers, mission system suites, and spares. Capable of transporting six operators at low-level depths close to the surface, the SWCS can carry a total payload of 10,000 lb (4,535 kg). SWCS contractor Teledyne Brown Engineering was unable to provide further details to IHS Jane's because of operational security reasons. However, industry sources have suggested that the SWCS measures approximately 22 ft (6.7 m) in length and 5 ft in width.", "The SWCS has yet to be officially designated, but the nomenclature Mk 9 is expected to be granted to the platform type. Teledyne Brown Engineering beat the incumbent manufacturer of the Mk 8 Mod 1, Columbus Group, to the programme in 2011 when it was awarded a USD383 million contract by the DoD.", "Ahead of SWCS's entry into service, General Dynamics Information Technology (GDIT) continues to assist the NSWC with ongoing support for legacy Mk 8 Mod 1 SDV systems. Work will include projects relating to SDVs as well as other NSWC-specific efforts associated with the Maritime Mission Systems Division. The latest support contract, worth USD4 million, was signed in December 2015.", "Elsewhere, the DCS solution has been designed as a dry diver lock-in/lock-out solution, capable of inserting and extracting personnel and all associated combat equipment, including in hostile waters, according to USSOCOM sources. The development of this option follows the cancellation of the Advanced SEAL Delivery System (ASDS) in 2006.", "Designed to carry six operators, the DCS has a larger payload capacity than the SWCS, with the ability to carry up to 40,000 lb at depths as low as 58 m. Sources also informed IHS Jane's that the DCS could have a maximum operating range of 60 n miles.", "In July 2016, it was announced that Lockheed Martin and Submergence Group would jointly design, develop, and manufacture the DCS for USSOCOM, with industry figures reiterating the vessel's ability to provide improved endurance and operating depths.", "According to Lockheed Martin, a USD166 million contract will involve the delivery of three DCS vehicles over a five-year period, with the gross weight for each vessel being more than 30 tons. A company spokesperson explained to IHS Jane's how NSWC concepts of operations would see the DCS launched at a stand-off position from surface vessels, before inserting SEAL operators over \"long distances underwater\" onto objectives and target areas....", "Details regarding the DCS design remain scarce. However, sources indicated to IHS Jane's that the solution will feature technology drawn from Lockheed Martin's S302 Manned Combat Submersible (MCS) craft, which is capable of carrying six personnel as well as a pilot and navigator.", "According to Lockheed Martin company literature, \"The dry one-atmosphere environment of these vehicles provides an alternative to traditional wet submersibles being used by the US and international Special Forces communities today, and will deliver operators to their destination in better physical condition to complete a mission.\"", "Vessels are fitted with standard inertial navigation systems and Doppler velocity logs, as well as a communications suite featuring an underwater telephone and a UHF radio; obstacle avoidance sonar; and fathometer. Additional sensor payloads, dependent upon mission requirements, can also be integrated, Lockeed Martin explained.", "The S302 MCS measures 31 ft in length, and can operate 100 m below the surface for more than 24 hours. The craft can travel up to 60 n miles at a 5 kt cruising speed, although it has a top speed of more than 7.5 kt for rapid reaction.", "USSOCOM continues to integrate Dry Deck Shelter (DDS) technology on board a variety of Ohio-class nuclear-powered ballistic missile submarines (SSBNs) and Virginia-class nuclear-powered attack submarines (SSNs) for special operations support....", "Although a total of six DDS systems are currently in service with the USN and USSOCOM, by the end of 2016 nine submarines will possess DDS capabilities, enabling them to launch and recover SDVs, sources explained.", "Featuring automated launch-and-recovery technology, DDS enables combat divers to enter and leave the dry dock individually, as was explained during a press briefing by NSWC officials at the Special Operations Forces Industry Conference (SOFIC) in Tampa, Florida, in May 2016.", "In 2017, the USN aims to concentrate on a series of modifications to the DDS in order to allow for the integration of DCS and SWCS, including the relocation of equipment stowage in the DDS and upgrades in lighting, cameras, and mechanical noise reduction.", "Industry sources have noted that DDS solutions are being extended by 50 inches to enable the integration of DCS and SWSC variants, thereby supporting a 'mothership' concept of operations (CONOPS) for maritime special forces. This would enable SOF teams to insert at greater distances from submarines and surface vessels, before entering the water at a suitable stand-off range from target areas and inserting via onboard DCS or SWCS craft.", "A September 15, 2016, press report states the following:", "SEALs will soon have new underwater vehicles delivering them to targets that officials say will make a huge difference during missions.", "SEALs now use a delivery vehicle that one SEAL described as a kind of underwater sled. ", "SEALs ride in the sled in full scuba gear completely exposed to the water, in often freezing cold and in \"pure blackout\" conditions and total silence for eight to 10 hours.", "Ask a SEAL what that's like, and they'll say it's like being locked in a cold, dark, wet closet for hours....", "The new vehicles, which are called dry combat submersibles, will be akin to mini-submarines, and allow SEALs to stay warmer and drier for longer, and more physically ready, as they close in on their target. ", "That's a huge advantage for missions that one retired SEAL who is now a congressman described as \"can't fail.\"...", "The vehicles will also allow the SEALs to communicate before a mission, compared with \"only seeing your buddy's eyes\" and a glow stick for 10 hours, the SEAL joked. ", "The first submersible is due to arrive in July 2018, and it will be operational as early as the fall. Final testing is to be completed in 2019. ", "As SEALs await the delivery of the first vehicle, they have two \"demonstrator\" vehicles to experiment with....", "That demonstrator is about 39 feet long, is about 7 to 8 feet in diameter, and weighs about 30 tons. So far, it has gone up to five knots for 60 nautical miles....", "It is also surface-launched, which means it is launched into the water by a crane or from a surface ships with a crane, versus from a submarine. ", "The vehicle is able to hold up to eight SEALs and their gear, in addition to a pilot and navigator. ", "The submersible consists of three compartments: a swimmers' compartment where the SEALs will ride for the duration of the time, a \"line in and line out\" compartment where they exit and enter the submersible, and a compartment for the navigator and pilot. ", "The swimmers' compartment is only about 10 to 12 feet long, which could be a tight squeeze for eight SEALs. ", "Still, officials say it'll be a huge improvement over the current systems.", "\"The DCS Program is on track to provide a capability that our warfighters have not had in a long time,\" said Navy Capt. Kate Dolloff, who is in charge of all maritime programs for Special Operations Command Acquisition, Technology and Logistics. ", "\"We still have a long way to go, but a stepped approach using technology demonstrators to mitigate risk and a close relationship with the user community has been extremely successful to date and led to contract award,\" she said. ", "The U.S. Special Operations Command (SOCOM) finalized a contract in July with Lockheed Martin for the first submersible to be delivered in July 2018, with the option of two more by 2020\u2014an unusually fast schedule for acquiring new technology. ", "The total cost for the three submersibles is $236 million. ", "The timeline and cost is years shorter and hundreds of millions cheaper than a previous submersible program, which was killed in 2006 after cost overruns and other issues. ", "That program would have cost $1 billion for one submersible and have taken two to three times longer to build, officials said. ", "Officials say the costs are much lower because they're taking off-the-shelf commercial technology developed by Lockheed Martin and modifying it to fit their needs, whereas the previous program started from scratch. ", "Officials say the new vehicles will have 80 to 90 percent of the same capability, but will be delivered much faster at a much lower cost. ", "The new program also comes with a \"fixed price incentive fee\" structure, where the cost of the program is fixed and any overruns are shared with the manufacturer.", "A July 22, 2016, press report states that", "... a new 'missile sub' promises to deliver to battle underwater far more easily\u2014and keep them dry when they travel. ", "Called the Swimmer Delivery Vehicle, it will be built by Lockheed Martin and Submergence Group after winning a US$166 million contract to supply the US Special Operations Command (USSOCOM) with a new class of combat submersibles.", "According to Lockheed, the three 30-ton (27-tonne) DCS [Dry Combat Submersible] vehicles that it is contracted to build will allow warfighters to travel deeper and farther underwater than today.", "The craft are dry submersibles that support two operators (pilot and navigator) plus up to six swimmers with the ability to lock them out and in. ", "'The dry one-atmosphere environment of these vehicles provides an alternative to traditional wet submersibles being used by the U.S. and international Special Forces communities today, and will deliver operators to their destination in better physical condition to complete a mission,' Lockheed Martin says....", "It will carry two pilots and six passengers, have a depth rating of 328 ft (100 m), a lock-out depth of 98 ft (30 m), and a top speed of 5 knots (6 mph, 9 km/h).", "Lockheed says the new DCS will boast improved hydrodynamics and propulsion compared to the previous vehicles.", "An August 20, 2014, blog post states the following:", "The U.S. Navy is hard at work developing new underwater transports for its elite commandos. The SEALs expect the new craft\u2014and improvements to large submarine \"motherships\" that will carry them\u2014to be ready by the end of the decade.", "SEALs have ridden in small submersibles to sneak into hostile territory for decades. For instance, the special operators reportedly used the vehicles to slip into Somalia and spy on terrorists in 2003.", "Now the sailing branch is looking to buy two new kinds of mini-subs. While details are understandably scarce, the main difference between the two concepts appears to be the maximum range.", "The Shallow Water Combat Submersible will haul six or more naval commandos across relatively short distances near the surface. The SWCS, which weighs approximately 10,000 pounds, will replace older Mark 8 Seal Delivery Vehicles, or SDVs.", "The other sub, called the Dry Combat Submersible, will carry six individuals much farther and at greater depths. The most recent DCS prototype weighs almost 40,000 pounds and can travel up to 60 nautical miles while 190 feet below the waves.", "Commandos could get further into enemy territory or start out a safer distance away with this new vehicle. SEALs could also use this added range to escape any potential pursuers.", "Both new miniature craft will also be fully enclosed. The current SDVs are open to water and the passengers must wear full scuba gear\u2014seen in the picture above.", "In addition, the DCS appears to pick up where a previous craft, called the Advanced SEAL Delivery System, left off. The Pentagon canceled that project in 2006 because of significant cost overruns.", "But the Navy continued experimenting with the sole ASDS prototype for two more years. The whole effort finally came to a halt when the mini-sub was destroyed in an accidental fire.", "Special Operations Command hopes to have the SWCS ready to go by 2017. SOCOM's plan is to get the DCS in service by the end of the following year.", "Underwater motherships", "SOCOM and the sailing branch also want bigger submarines to carry these new mini-subs closer to their targets. For decades now, attack and missile submarines have worked as motherships for the SEALs.", "Eight Ohio- and Virginia-class subs currently are set up to carry the special Dry-Deck Shelter used to launch SDVs, according to a presentation at the Special Operations Forces Industry Conference in May.", "The DDS units protect the specialized mini-subs inside an enclosed space. Individual divers also can come and go from the DDS airlocks.", "The first-in-class USS Ohio\u2014and her sisters Michigan, Florida and Georgia\u2014carried ballistic missiles with nuclear warheads during the Cold War. The Navy had expected to retire the decades-old ships, but instead spent billions of dollars modifying them for new roles. Today they carry Tomahawk cruise missiles and SEALs.", "The Virginias\u2014Hawaii, Mississippi, New Hampshire, North Carolina and the future North Dakota\u2014are newer. The Navy designed these attack submarines from the keel up to perform a variety of missions.", "SOCOM projects that nine submersible motherships\u2014including North Carolina as a backup\u2014will be available by the end of the year.", "The Navy has a pool of six shelters to share between the subs. SOCOM expects the DDS to still be in service in 2050.", "But prototype DCS mini-subs cannot fit inside the current shelter design. As a result, a modernization program will stretch the DDS units by 50 inches, according to SOCOM's briefing.", "The project will also try to make it easier to launch undersea vehicles and get them back into the confines of the metal enclosure. Right now, divers must manually open and close the outside hatch to get the SDVs out.", "Crews then have to drive the craft back into the shelter without any extra help at the end of a mission\u2014underwater and likely in near-total darkness. The sailing branch wants to automate this process.", "With any luck, the SEALs will have their new undersea chariots and the motherships to carry them ready before 2020."], "subsections": []}]}}
{"id": "98-228", "title": "House Voting Procedures: Forms and Requirements", "released_date": "2019-02-06T00:00:00", "summary": [], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["In the House, there are four forms of votes: voice vote, division vote, yea and nay (or roll call) vote, and recorded vote. In the Committee of the Whole, the forms are voice vote, division vote, and recorded vote. Members may vote in the House. Members, Delegates, and the Resident Commissioner may vote in the Committee of the Whole.", "The Speaker counts division votes and determines if there is sufficient support for yea and nay votes and recorded votes. The Speaker also has the authority to postpone and cluster certain votes. Postponed votes occur within two legislative days."], "subsections": []}, {"section_title": "In the House", "paragraphs": [], "subsections": [{"section_title": "Voice Vote", "paragraphs": ["Most questions are initially put to a voice vote. Representatives will call out \"aye\" or \"no\" when a question is first put by the Speaker or Speaker pro tempore. As Rule I, clause 6, states, the Speaker will say, \"Those in favor [of the question], say 'Aye.'\" Then the Speaker will ask: \"Those opposed, say 'No.'\" Following the response, the Speaker states that, in his or her opinion, \"the ayes [or the noes] appear to have it.\" There is no record of how an individual Member votes on a voice vote. "], "subsections": []}, {"section_title": "Division Vote", "paragraphs": ["Division votes are rare in current practice. Like a voice vote, this procedure does not provide a public record of how each Member voted. Rule XX, clause 1(a), states that if the Speaker is uncertain about the outcome of a voice vote, or if a Member demands a division, the House shall divide. \"Those in favor of the question shall first rise from their seats to be counted,\" and then those who are opposed to the proposition shall stand to be counted. Only vote totals (95 for, 65 against, for instance) are announced in this method of voting. "], "subsections": []}, {"section_title": "Yea and Nay Vote", "paragraphs": ["Yay and nay votes provide a record of how each Member voted. These votes are taken by electronic device unless the computerized voting system malfunctions, in which case standby procedures outlined in Rule XX, clause 2(b), are used to conduct the votes.", "The Constitution (Article I, Section 5) states that \"the Yeas and Nays of the Members ... on any question\" shall be obtained \"at the Desire of one fifth of those present.\" Under this provision, it does not matter if a quorum of the House (218 Members when the House has no vacancies) is not present to conduct business, because any Member can say, \"Mr. [or Madam] Speaker, on that vote, I demand the yeas and nays.\" If the demand is supported by one-fifth of those present, the Speaker will say that \"the yeas and nays\" are ordered.", "Rule XX, clause 6, provides another type of yea and nay vote. If it is evident to a lawmaker that a quorum is not present in the chamber, he or she may object to a voice vote on that ground. Assuming the chair sustains the point of order, the chair will order a yea and nay vote. To make a quorum point of order, a Member says, \"I object to the vote on the ground that a quorum is not present, and I make a point of order that a quorum is not present.\" The actual vote will then simultaneously determine both issues: the presence of a quorum and the vote on the pending question. ", "In addition, clause 10 of Rule XX states that the \"yeas and nays shall be considered as ordered\" on final passage of a limited number of measures or matters, such as concurrent budget resolutions. The Constitution requires that votes to override presidential vetoes shall be determined by the yeas and nays."], "subsections": []}, {"section_title": "Recorded Vote", "paragraphs": ["Recorded votes also identify how each Member voted and are taken by electronic device. Under Rule XX, clause 1(b), if any Member, Delegate, or Resident Commissioner \"requests a recorded vote, and that request is supported by at least one-fifth of a quorum, such vote shall be taken by electronic device.\" ", "To obtain a recorded vote, a Member states, \"Mr. [or Madam] Speaker, on that I demand a recorded vote.\" If at least one-fifth of a quorum of 218\u2014or 44 Members\u2014stand and support the request, then the recorded vote will be taken by electronic device. The distinction between recorded votes and the yeas and nays is the number of Members required to support each request: one-fifth of those present for the yeas and nays and one-fifth of a quorum (44 of 218) for recorded votes."], "subsections": []}]}, {"section_title": "In the Committee of the Whole", "paragraphs": ["Three methods of voting are available in the Committee of the Whole: voice, division, and recorded. Yea and nay votes are not permitted.", "Members, Delegates, and the Resident Commissioner have the right to vote in the Committee of the Whole. However, if the question is decided within the margin of votes cast by the Delegates and the Resident Commissioner, the committee shall rise and the Speaker shall put the question de novo (as if new) to the House.", "Rule XVIII, clause 6(e) states that the \"Chair shall order a recorded vote on a request supported by at least 25 Members, Delegates, and the Resident Commissioner.\" Thus, any Member, Delegate, or the Resident Commissioner may say, \"I request a recorded vote,\" and, if 25 supporters (the Member who made the request can be part of the tally, too) rise and are counted by the chair, the recorded vote will occur by electronic device. ", "If few Members are present in the chamber, a lawmaker who plans to request a recorded vote will usually say, \"Mr. [or Madam] Chair, I request a recorded vote and, pending that, I make a point of order that a quorum is not present.\" (A quorum in the Committee of the Whole is 100 Members, Delegates, and the Resident Commissioner.) Assuming that the point of order is sustained, the statement prompts a quorum call, and the Member who requested the recorded vote can ask 24 other colleagues to support his or her request as they come onto the floor."], "subsections": []}, {"section_title": "The Speaker's Authority", "paragraphs": ["When the Speaker or chair of the Committee of the Whole counts to determine sufficient support for yea and nay votes or recorded votes, the accuracy of the count is assumed and cannot be challenged. This assumption also applies to division votes and determining the presence of a quorum. ", "Under House Rule XX, clause 8, the Speaker has the authority to postpone and cluster certain votes. For most questions, postponed votes occur within two legislative days. A vote to agree to the Speaker's approval of the Journal, however, is to occur within the same legislative day."], "subsections": []}, {"section_title": "Length of Time for Voting", "paragraphs": ["Under Rule XX, clause 2(a), the minimum time for a vote by electronic device is 15 minutes in either the House or the Committee of the Whole. The 15-minute period is the minimum time allowed, rather than the maximum, for the conduct of a recorded vote. The chair has the discretion to hold the vote open longer. ", "The voting period for some votes may be shorter than 15 minutes under certain circumstances. The Speaker may reduce the voting time to not less than five minutes (Rule XX, clause 9) \"on any question that follows another electronic vote or a report from the Committee of the Whole, if in the discretion of the Speaker Members would be afforded an adequate opportunity to vote.\" Certain votes in the Committee of the Whole may also be reduced to not less than two minutes, as noted in Rule XVIII, clause 6. "], "subsections": []}]}}
{"id": "RS21212", "title": "Agricultural Disaster Assistance", "released_date": "2019-03-28T00:00:00", "summary": ["The U.S. Department of Agriculture (USDA) offers several programs to help farmers recover financially from natural disasters, including drought and floods. All the programs have permanent authorization, and one requires a federal disaster designation (the emergency loan program). Most programs receive mandatory funding amounts that are \"such sums as necessary\" and are not subject to annual discretionary appropriations.", "The federal crop insurance program offers subsidized policies designed to protect crop producers from risks associated with adverse weather, as well as weather-related plant diseases and insect infestations and declines in commodity prices. Policies must be purchased prior to the planting season. Eligible commodities include most major crops and many specialty crops (including fruit, tree nut, vegetable, and nursery crops), as well as forage and pastureland for livestock producers. Producers who grow a crop that is currently ineligible for crop insurance may apply for the Noninsured Crop Disaster Assistance Program (NAP). NAP provides a catastrophic level of coverage, as well as options to purchase additional coverage. Similar to crop insurance, policies must be purchased prior to the planting season.", "There are four permanently reauthorized disaster programs for livestock and trees. Producers do not pay a fee to participate, and advanced sign-up is not required. The programs are:", "1. the Livestock Indemnity Program (LIP), which provides payments to eligible livestock owners and contract growers at a rate of 75% of market value for livestock deaths in excess of normal mortality or sold at a reduced sale price caused by adverse weather, attacks by reintroduced wild animals, and disease; 2. the Livestock Forage Disaster Program (LFP), which makes payments to eligible livestock producers who have suffered grazing losses on drought-affected pasture or grazing land or on rangeland managed by a federal agency due to a qualifying fire; 3. the Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP), which provides payments to producers of livestock, honey bees, and farm-raised fish as compensation for losses due to disease, adverse weather, and feed or water shortages; and 4. the Tree Assistance Program (TAP), which makes payments to orchardists/nursery tree growers for losses in excess of 15% to replant trees, bushes, and vines damaged by natural disasters.", "Separately, for all types of farms and ranches, when a county has been declared a disaster area by either the President or the Secretary of Agriculture, producers in that county may become eligible for low-interest emergency disaster loans.", "USDA has several permanent disaster assistance programs designed to help producers repair damaged land following natural disasters. It also has authority to issue disaster payments to farmers with funds from \"Section 32,\" or the Commodity Credit Corporation (CCC). Finally, USDA can use a variety of existing programs to address disaster issues as they arise, such as allowing emergency grazing on land enrolled in the Conservation Reserve Program.", "The Agricultural Improvement Act of 2018 (P.L. 115-334) made a number of amendments to the permanent farm bill disaster assistance programs, NAP, and crop insurance, including changes to payment limits, definitions, eligibility, and coverage."], "reports": {"section_title": "", "paragraphs": ["T he U.S. Department of Agriculture (USDA) offers several programs designed to help farmers and ranchers recover from the financial effects of natural disasters, including (1) federal crop insurance, (2) the Noninsured Crop Disaster Assistance Program (NAP), (3) livestock and fruit tree disaster programs, and (4) emergency disaster loans for both crop and livestock producers. All have permanent authorization, while the emergency loan program is the only one requiring a federal disaster designation (see Table 1 ). Most programs receive mandatory funding amounts of \"such sums as necessary\" and are not subject to annual discretionary appropriations. The Agricultural Improvement Act of 2018 (2018 farm bill, P.L. 115-334 ) made a number of amendments to these programs, generally to expand availability and support.", "Prior to the creation of many of the permanently authorized programs at USDA, Congress had historically provided farmers and ranchers with ad hoc disaster assistance payments authorized through supplemental appropriations. Subsequently, policies shifted away from the temporary forms of assistance in favor of enacting more permanent forms of support. More recently, policies have shifted to supplement permanent programs with ad hoc assistance for select agriculture losses. The Bipartisan Budget Act of 2018 ( P.L. 115-123 ) amended existing disaster assistance programs and authorized $2.36 billion for production losses from hurricanes and wildfires in 2017 that were not covered by existing programs. ", "This report provides an overview of permanently authorized federal disaster assistance programs for agricultural losses as well as discretionary authority that USDA may use to provide assistance. Recent amendments in the 2018 farm bill and ad hoc assistance authorized by Congress in the Bipartisan Budget Act of 2018 are also discussed. "], "subsections": [{"section_title": "Federal Crop Insurance", "paragraphs": ["The federal crop insurance program is permanently authorized by the Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et seq. ), and is administered by USDA's Risk Management Agency (RMA). The program is designed to protect crop producers from risks associated with adverse weather, as well as weather-related plant diseases and insect infestations and declines in commodity prices.", "Crop insurance is available for most major crops and many specialty crops (including fruit, tree nut, vegetable, and nursery crops), as well as forage and pastureland for livestock producers. A producer who chooses to purchase an insurance policy must do so by an administratively determined deadline date, which varies by crop and usually coincides with the planting season. Insurance products that protect against loss in revenue and profit margins are also available. Policies are typically available in major growing regions. ", "The federal crop insurance program was instituted in the 1930s and was subject to major legislative reforms in 1980 and again in 1994 and 2000. The Agriculture Risk Protection Act of 2000 ( P.L. 106-224 ) authorized new federal spending for the program primarily through more generous premium subsidies to help make the program more affordable to farmers and enhance farmer participation levels in an effort to preclude the need for ad hoc emergency disaster payments. ", "Under the current crop insurance program, a producer who grows an insurable crop selects a level of crop yield and price coverage and pays a premium that increases as the levels of yield and price coverage rise. However, all eligible producers can receive catastrophic (CAT) coverage without paying a premium. The premium for this portion of coverage is completely subsidized by the federal government. Under CAT coverage, participating producers can receive a payment equal to 55% of the estimated market price of the commodity on crop losses in excess of 50% of normal yield\u2014referred to as 50/55 coverage.", "Although eligible producers do not have to pay a premium for CAT coverage, they are required to pay upon enrollment a $655 administrative fee per covered crop for each county where they grow the crop. USDA can waive the fee for financial hardship cases. In addition to the administrative fee, producers can elect to pay a premium, which is partially subsidized by the government, to increase the 50/55 CAT coverage to any equivalent level of coverage between 50/100 and 85/100 (i.e., 85% of yield and 100% of the estimated market price) in increments of 5%. These higher levels of coverage are known as \"buy up\" coverage.", "For many insurable commodities, an eligible producer can purchase revenue insurance. Under such a policy, a farmer could receive an indemnity payment when actual farm revenue for a crop falls below the target level of revenue, regardless of whether the shortfall in revenue was caused by poor production or low farm commodity prices. Insured producers are also eligible for reduced coverage if they are late or prevented from planting because of flooding. ", "The annual agriculture appropriations bill traditionally makes two separate appropriations for the federal crop insurance program. It provides discretionary funding for the salaries and expenses of the RMA. It also provides \"such sums as are necessary\" for the Federal Crop Insurance Corporation, which finances all other expenses of the program, including premium subsidies, indemnity payments, and reimbursements to the private insurance companies. The total cost of the program varies by year, primarily due to fluctuating levels of indemnity payments from changes in commodity prices, planting decisions, and weather conditions. Across all policies, the average premium subsidy was about 63% of total premiums in 2017. The federal government also subsidizes the costs of selling and servicing the policies (as delivery subsidies to Approved Insurance Providers) and absorbs underwriting losses (indemnities in excess of premiums received) in years when indemnities are high.", "For a more detailed analysis of the federal crop insurance program, see CRS Report R45193, Federal Crop Insurance: Program Overview for the 115th Congress ."], "subsections": []}, {"section_title": "Noninsured Crop Disaster Assistance Program (NAP)", "paragraphs": ["Producers who grow a crop that is currently ineligible for crop insurance may apply for NAP. NAP has permanent authority under Section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333) and is administered by USDA's Farm Service Agency (FSA). It was first authorized under the Federal Crop Insurance Reform Act of 1994 ( P.L. 103-354 ). NAP is not subject to annual appropriations. Instead, it receives such sums as are necessary through USDA's Commodity Credit Corporation (CCC), which has a line of credit with the U.S. Treasury to fund an array of farm programs.", "Eligible crops under NAP include any commercial crops grown for food, fiber, or livestock consumption for which there is no CAT coverage available under the federal crop insurance program, with limited exceptions. These crops include mushrooms, floriculture, ornamental nursery, Christmas trees, turfgrass sod, aquaculture, honey, maple sap, ginseng, and industrial crops used in manufacturing or grown as a feedstock for energy production, among others. Trees grown for wood, paper, or pulp products are not eligible. To be eligible for a NAP payment, a producer first must apply for coverage by the application closing date, which varies by crop but is generally about 30 days prior to the final planting date for an annual crop. Like CAT coverage under crop insurance, NAP applicants must also pay an administrative fee at the time of application. The NAP service fee is the lesser of $325 per crop or $825 per producer per administrative county, not to exceed a total of $1,950 for farms in multiple counties. ", "In order to receive a NAP payment, a producer must experience at least a 50% crop loss caused by a natural disaster or be prevented from planting more than 35% of intended crop acreage. For any losses in excess of the minimum loss threshold, a producer can receive 55% of the average market price for the covered commodity. Hence, NAP is similar to CAT coverage in that it pays 55% of the market price for losses in excess of 50% of normal historical production. ", "Additional coverage (referred to as buy-up coverage) may be purchased at 50% to 65% (in 5% increments) of established yield and 100% of average market price, contract price, or other premium price. The farmer-paid fee for additional coverage is 5.25% times the product of the selected coverage level and value of production (acreage times yield times average market price times the producer's share of the crop). Grazing land is not eligible for buy-up coverage.", "A producer of a noninsured crop is subject to an annual payment limit of $125,000 per person for catastrophic coverage and $300,000 for buy-up coverage. A producer is ineligible under NAP if the producer's total adjusted gross income (AGI) exceeds $900,000. The total federal cost of NAP was $165 million in FY2014, $125 million in FY2015, $137 million in FY2016, $157 million in FY2017, and $164.3 million in FY2018."], "subsections": []}, {"section_title": "Supplemental Agricultural Disaster Assistance Programs", "paragraphs": ["Four agricultural disaster assistance programs are permanently authorized for livestock and fruit trees: (1) the Livestock Indemnity Program (LIP); (2) the Livestock Forage Disaster Program (LFP); (3) the Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP); and (4) the Tree Assistance Program (TAP). They operate nationwide and are administered by FSA. Producers do not pay fees to participate and can apply at their local FSA offices.", "All programs receive \"such sums as necessary\" in mandatory funding via the CCC to reimburse eligible producers for their losses. Total payments vary each year based on eligible loss conditions. For FY2018, LFP payments totaled $487.5 million, LIP payments totaled $36.6 million, TAP payments totaled $11.3 million, and ELAP payments totaled $47 million. All payments are reduced by sequestration.", "For individual producers, payments under LFP may not exceed $125,000 per year. There are no limits on the amount of payments received under LIP, ELAP, and TAP. To be eligible for a payment under any of these programs, a producer's total AGI cannot exceed $900,000."], "subsections": [{"section_title": "Livestock Indemnity Program (LIP)", "paragraphs": ["LIP provides payments to eligible livestock owners and contract growers for livestock deaths in excess of normal mortality caused by an eligible loss condition (e.g., adverse weather, disease, or animal attack). Payments may also be made when the animal is injured as a direct result of an eligible loss condition but does not die and is sold at a reduced price. Eligible loss conditions may include (1) extreme or abnormal damaging weather that is not expected to occur during the loss period for which it occurred, (2) disease that is caused or transmitted by a vector and is not susceptible to control by vaccination, and (3) an attack by animals reintroduced into the wild by the federal government or protected by federal law. Eligibility is predicated on not only the occurrence of an eligible loss condition but direct causation to the death of the animal.", "Eligible livestock include beef and dairy cattle, bison, hogs, chickens, ducks, geese, turkeys, sheep, goats, alpacas, deer, elk, emus, llamas, reindeer, caribou, and equine. The livestock must have been maintained for commercial use and not produced for reasons other than commercial use as part of a farming operation. The program excludes wild free-roaming animals, pets, and animals used for recreational purposes, such as hunting, roping, or for show. Poultry and swine are the only eligible livestock for contract growers.", "The LIP payment rate is equal to 75% of the average fair market value of the deceased animal type. USDA publishes a payment rate for each type of livestock for each year (e.g., $983.90 per adult beef cow and $4.39 per duck in 2018). For eligible livestock contract growers, the payment rate is based on 75% of the national average input costs for the applicable livestock. For livestock sold at a reduced sale price, payments are calculated by multiplying the national payment rate for the livestock category minus the amount the owner received at sale times the owner's share."], "subsections": []}, {"section_title": "Livestock Forage Disaster Program (LFP)", "paragraphs": ["LFP makes payments to eligible livestock producers who have suffered grazing losses on drought-affected pastureland (including cropland planted specifically for grazing), or on rangeland managed by a federal agency due to a qualifying fire. ", "Eligible producers must own, cash or share lease, or be a contract grower of covered livestock during the 60 calendar days before the beginning date of a qualifying drought or fire. They must also provide pastureland or grazing land for covered livestock that is either (a) physically located in a county affected by a qualifying drought during the normal grazing period for the county or (b) managed by a federal agency where grazing is not permitted due to fire. ", "Eligible livestock types are livestock that have been grazing on eligible grazing land or pastureland or would have been had a disaster not struck. These include alpacas, beef cattle, buffalo, beefalo, dairy cattle, sheep, deer, elk, emus, equine, goats, llamas, poultry, reindeer, and swine. Livestock must be maintained for commercial use as part of a farming operation. Livestock owned for noncommercial uses, or livestock that is in (or would have been in) feedlots, are excluded. ", "Payments are generally triggered by the drought intensity level for an individual county as published in the U.S. Drought Monitor, a federal report published each week. The number of monthly payments depends on the drought severity and length of time the county has been designated as such ( Table 2 ). For drought, the payment amount is equal to the number of monthly payments times 60% of estimated monthly feed cost. For producers who sold livestock because of drought conditions, the payment rate is equal to 80% of the estimated monthly feed cost."], "subsections": []}, {"section_title": "Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP)", "paragraphs": ["ELAP provides payments to producers of livestock, honey bees, and farm-raised fish as compensation for losses due to disease, adverse weather, feed or water shortages, or other conditions (such as wildfires) that are not covered under LIP or LFP. ", "ELAP specifically provides assistance for the loss of honey bee colonies in excess of normal mortality. In order to meet the eligibility requirements for honey bee colony losses, they must be the direct result of an eligible adverse weather or loss condition such as colony collapse disorder, eligible winter storm, excessive wind, and flood. For livestock losses, ELAP covers four categories: (1) livestock death losses caused by an eligible loss condition, (2) livestock feed and grazing losses that are not due to drought or wildfires on federally managed lands, (3) losses resulting from the additional cost of transporting water to livestock due to an eligible drought, and (4) losses resulting from the additional cost associated with gathering livestock for inspection and treatment related to cattle tick fever. "], "subsections": []}, {"section_title": "Tree Assistance Program (TAP)", "paragraphs": ["TAP makes payments to qualifying orchardists and nursery tree growers to replant or rehabilitate trees, bushes, and vines damaged by natural disasters. Losses in crop production\u2014as opposed to the tree, bush, or vine itself\u2014are generally covered by federal crop insurance or NAP. Eligible trees, bushes, and vines are those from which an annual crop is produced for commercial purposes. Nursery trees include ornamental, fruit, nut, and Christmas trees produced for commercial sale. Trees used for pulp or timber are ineligible.", "To be considered an eligible loss, the individual stand must have sustained a mortality loss or damage loss in excess of 15% after adjustment for normal mortality or damage. Normal mortality or damage is determined based on (a) each eligible disaster event, except for losses due to plant disease, or (b) for plant disease, the time period for which the stand is infected. Also, the loss could not have been prevented through reasonable and available measures.", "For replacement, replanting, and/or rehabilitation of trees, bushes, or vines, the payment calculation is the lesser of (a) 65% of the actual cost of replanting (in excess of 15% mortality) and/or 50% of the actual cost of rehabilitation (in excess of 15% damage), or (b) the maximum eligible amount established for the practice by FSA. The total quantity of acres planted to trees, bushes, or vines for which a producer can receive TAP payments cannot exceed 1,000 acres annually."], "subsections": []}]}, {"section_title": "Emergency Disaster Loans", "paragraphs": ["When either the President or the Secretary of Agriculture declares a county a disaster area or quarantine area, agricultural producers in that county may become eligible for low-interest emergency disaster (EM) loans available through FSA. Producers in counties that are contiguous to a county with a disaster designation also become eligible for EM loans. EM loan funds may be used to help eligible farmers, ranchers, and aquaculture producers recover from production losses (when the producer suffers a significant loss of an annual crop) or from physical losses (such as repairing or replacing damaged or destroyed structures or equipment or for the replanting of permanent crops such as orchards). A qualified applicant can then borrow up to 100% of actual production or physical losses (not to exceed $500,000). ", "Once a county is declared eligible, an individual producer within the county (or a contiguous county) must also meet the following requirements for an EM loan: A producer must (1) be an established family farmer and a citizen or permanent resident of the United States; (2) experience a crop loss of more than 30% or a physical loss of livestock, livestock products, real estate, or property; and (3) be unable to obtain credit from a commercial lender but still show the potential to repay the loan, including having acceptable credit history and collateral to secure the loan. Applications must be received within eight months of the county's disaster designation date. Loans for nonreal-estate purposes must generally be repaid within seven years. Loans for physical losses to real estate have terms up to 20 years. Depending on the repayment ability of the producer and other circumstances, these terms can be extended to 20 years for nonreal-estate losses and up to 40 years for real estate losses.", "The EM loan program is permanently authorized by Title III of the Consolidated Farm and Rural Development Act (P.L. 87-128), as amended, and is subject to annual appropriations. In FY2018, the program received $25.6 million of new loan authority. Unused funds are carried over and available in the next fiscal year. Therefore, the total loan authority can vary greatly depending on appropriated levels, annual use, and total carryover. In FY2019, the total loan authority is $99.5 million.", "Also in counties with disaster designations, producers who have existing direct loans with FSA may be eligible for Disaster Set-Aside. If, as a result of disaster, a borrower is unable to pay all expenses and make loan payments that are coming due, up to one full year's payment can be moved to the end of the loan."], "subsections": []}, {"section_title": "Other USDA Assistance", "paragraphs": ["USDA also has several permanent disaster assistance programs that help producers repair damaged land following natural disasters. It also has authority to issue disaster payments to farmers with \"Section 32\" or \"CCC\" funds and can use a variety of existing programs to address disaster issues as they arise. "], "subsections": [{"section_title": "Emergency Agricultural Land Assistance Programs", "paragraphs": ["Several USDA programs offer financial and technical assistance to producers to repair, restore, and mitigate damage by a natural disaster on private land. ", "The Emergency Conservation Program (ECP) and the Emergency Forest Restoration Program (EFRP) are administered by FSA. For both programs, FSA pays participants a percentage of the cost to restore the land to a productive state. ECP also funds water for livestock and installing water conserving measures during times of drought. EFRP was created to assist private forestland owners with losses caused by a natural disaster on nonindustrial private forest land. The Emergency Watershed Protection (EWP) program and the EWP floodplain easement program are administered by USDA's Natural Resources Conservation Service and the U.S. Forest Service. EWP assists sponsors, landowners, and operators in implementing emergency recovery measures for runoff retardation and erosion prevention to relieve imminent hazards to life and property created by a natural disaster. The EWP floodplain easement program is a mitigation program that pays for permanent easements on private land meant to safeguard lives and property from future floods and drought and the products of erosion. ", "For more information on these programs, see CRS Report R42854, Emergency Assistance for Agricultural Land Rehabilitation ."], "subsections": []}, {"section_title": "\"Section 32\" and \"CCC\" Funds for Farm Disaster Payments", "paragraphs": ["USDA has discretionary authority to distribute emergency payments to farmers with \"Section 32\" and CCC funds. While both Section 32 and CCC have broad authority to support U.S. agriculture, the majority of their activities are required under various statutes, such as omnibus farm bills. Beginning in FY2012, annual appropriations acts limited USDA's discretionary use of CCC and Section 32. The FY2018 omnibus appropriation removed this limitation for CCC and allowed for limited carryover funding under Section 32 to be used pending congressional notification.", "USDA's Section 32 program is funded by a permanent appropriation of 30% of the previous year's customs receipts, and funds are used for a variety of activities, including child nutrition programs, the purchase of commodities for domestic food programs, and farm disaster assistance. The statutory authority is Section 32 of the Agricultural Adjustment Act Amendment of 1935 (P.L. 74-320, 7 U.S.C. 612c). The authority to provide disaster assistance is attributed to clause 3 of Section 32, which provides that funds \"shall be used to re-establish farmers' purchasing power by making payments in connections with the normal production.\" The FY2019 omnibus (\u00a7714, P.L. 116-6 ) limits clause 3 to carryover funding of no more than $350 million following a two-week advance notice to Congress. The CCC serves as the funding institution for carrying out federal farm support programs, such as commodity price support and production programs, conservation programs, disaster assistance, agricultural research, and bioenergy development. It is federally chartered by the CCC Charter Act of 1948 (P.L. 80-806), as amended. The authority to provide disaster assistance is attributed to Section 5 of the act (15 U.S.C. 714c), which, among other activities, authorizes the CCC to support the prices of agricultural commodities through loans, purchases, payments, and other operations."], "subsections": []}, {"section_title": "Adjustments to Existing USDA Programs", "paragraphs": ["In addition to implementing the disaster assistance programs discussed above, USDA can use authority under other existing programs to help producers recover from natural disasters. For example, in response to the major drought affecting a large part of the United States in recent years, USDA took a number of administrative actions to assist producers, including", "extending emergency grazing and haying on Conservation Reserve Program (CRP) acres; reducing the emergency loan interest rate and making emergency loans available earlier in the season; targeting conservation assistance through the Environmental Quality Incentives Program for the most extreme and exceptional drought areas; additional funding helps farmers and ranchers implement conservation practices that conserve water resources, reduce wind erosion on drought-impacted fields, and improve livestock access to water (farmers and ranchers contribute about half the cost of implementing the practices); and directing Emergency Community Water Assistance Grants for rural water systems experiencing emergencies resulting from a significant decline in quantity or quality of drinking water. "], "subsections": []}, {"section_title": "Assistance to Prevent Spread of Animal Diseases", "paragraphs": ["Under the Animal Health Protection Act (7 U.S.C. 8301, et seq. ), USDA is authorized to take protective actions against the spread of livestock disease, including seizing, treating, or destroying animals if USDA determines that an extraordinary emergency exists because of the presence of a pest or disease of livestock. As part of its animal health program, USDA's Animal and Plant Health Inspection Service compensates producers for animals that must be euthanized, for their disposition, and for infected materials that must also be destroyed. Funding is provided by annual appropriations or through the CCC for larger amounts. The most recent example of a large-scale outbreak that resulted in payments to producers was in 2015 and 2016 during outbreaks of highly pathogenic avian influenza affecting the U.S. poultry industry. "], "subsections": []}]}, {"section_title": "Amendments in the 2018 Farm Bill", "paragraphs": ["The 2018 farm bill amended the supplemental disaster assistance programs as well as NAP, crop insurance, and emergency loans. The following provides a summary of changes to select programs included in this report. For a more comprehensive review of amendments under the 2018 farm bill, see CRS Report R45525, The 2018 Farm Bill (P.L. 115-334): Summary and Side-by-Side Comparison ."], "subsections": [{"section_title": "Federal Crop Insurance Amendments", "paragraphs": ["The 2018 farm bill generally expands coverage under the federal crop insurance program, including for forage, grazing, and hemp. Amendments authorize catastrophic level coverage for insurance plans covering grazing crops and grasses. It also allows producers to purchase separate crop insurance policies for crops that can be both grazed and mechanically harvested on the same acres during the same growing season and to receive independent indemnities for each intended use. A number of amendments were also made related to hemp, including eligibility, post-harvest losses, and waivers that allow for the development of policies for hemp. For all crops, the administrative fee for catastrophic coverage was increased from $300 to $655 per crop per county."], "subsections": []}, {"section_title": "NAP Amendments", "paragraphs": ["The 2018 farm bill expands crop eligibility to include crops that may be covered by select forms of crop insurance but only under whole farm plans or weather index policies. It also amends the payment calculation to consider the producer's share of the crop, raises the service fees, and creates separate payment limits for catastrophic ($125,000/person) and buy-up ($300,000/person) coverage. Payments under buy-up coverage are also expanded to include other premium prices (e.g., local, organic, or direct market price), which may be higher than the average market price. The law makes buy-up coverage permanent and adds data collection and program coordination requirements. "], "subsections": []}, {"section_title": "Supplemental Agriculture Disaster Assistance Program Amendments", "paragraphs": ["The 2018 farm bill expands payments for livestock losses caused by disease and for losses of unweaned livestock that occur before vaccination. The law also expands the definition of eligible producer to include Indian tribes or tribal organizations and increases replanting and rehabilitation payment rates for beginning and veteran orchardists. The law amends the limits on payments received under select disaster assistance programs: Of the four disaster assistance programs, only LFP is now subject to the $125,000/person payment limit."], "subsections": []}, {"section_title": "Emergency Loan Amendments", "paragraphs": ["Eligibility is expanded to allow borrowers who have received a debt write-down or restructuring of a farm loan (due to circumstances beyond the control of the borrower) to maintain eligibility for an emergency loan."], "subsections": []}]}, {"section_title": "Ad Hoc Assistance", "paragraphs": ["The U.S. farm policy mix that provides assistance to agricultural producers for damage and loss following a natural disaster continues to shift between permanent and temporary authorized support. The authorization of permanent disaster assistance programs in the 2008 and 2014 farm bills, as well as expanded crop insurance and NAP policies, were designed to reduce the need for ad hoc disaster assistance. Following enactment of the 2008 farm bill, Congress appropriated little in the way of supplemental disaster assistance for agriculture, most of which was for land rehabilitation efforts under EWP and ECP. This changed in 2018, when an active hurricane and wildfire season in 2017 resulted in the authorization of supplemental assistance in the Bipartisan Budget Act of 2018. In addition to the programmatic changes discussed in the \" Supplemental Agricultural Disaster Assistance Programs \" section of this report, the Bipartisan Budget Act of 2018 also authorized $2.36 billion for production losses not covered under NAP or crop insurance."], "subsections": [{"section_title": "2017 Wildfires and Hurricanes Indemnity Program", "paragraphs": ["On July 16, 2018, USDA announced the availability of the bulk of the 2018 Bipartisan Budget Act funding through the Wildfires and Hurricanes Indemnity Program (WHIP). Only crop, tree, bush, and vine losses from a wildfire or hurricane in 2017 are eligible for assistance under WHIP.", "Payments to producers who purchased crop insurance or NAP coverage range from 70% to 95% of the expected value of the crop, depending on the level of coverage purchased. For producers who did not purchase crop insurance or NAP in advance of the natural disaster, payments under WHIP are limited to 65% of expected value of the crop. All payments are reduced by the value of the crop harvested, if any, and any insurance indemnity paid through crop insurance or NAP. All participants are required to purchase crop insurance or NAP for the next two years. ", "Payments are limited to $125,000 if less than 75% of the participant's AGI is from farming. If more than 75% of the participant's AGI is from farming, then payments are limited to a maximum of $900,000. USDA's initial announcement stated that only 50% of the participant's payment rate will be made up front, with additional payments possible depending on fund availability."], "subsections": []}, {"section_title": "Florida Citrus Block Grant", "paragraphs": ["USDA used a portion of the 2018 Bipartisan Budget Act funding for a $340 million block grant to the state of Florida. Under the grant, the state is expected to assist the citrus industry with the cost of buying and planting replacement trees\u2014including resetting and grove rehabilitation\u2014and for repairing damage to irrigation systems, among other activities."], "subsections": []}, {"section_title": "Pecan Trees", "paragraphs": ["The Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), also provided supplemental assistance but through an existing program\u2014TAP. The act authorized $15 million for payments to eligible pecan orchardists or pecan nursery tree growers for mortality losses incurred during calendar year 2017. The act lowers the mortality loss threshold under TAP to cover losses in excess of 7.5% but not more than 15%, adjusted for normal mortality. If losses exceeded 15%, then the loss is already eligible for TAP. If applications for these losses (i.e., between 7.5% and 15%) exceed the available $15 million, then payments would be proportionally reduced."], "subsections": []}]}]}}
{"id": "R45697", "title": "U.S. Farm Income Outlook for 2019", "released_date": "2019-04-16T00:00:00", "summary": ["This report uses the U.S. Department of Agriculture's (USDA) farm income projections (as of March 6, 2019) and agricultural trade outlook update (as of February 21, 2019) to describe the U.S. farm economic outlook. According to USDA's Economic Research Service (ERS), national net farm income\u2014a key indicator of U.S. farm well-being\u2014is forecast at $69.4 billion in 2019, up $6.3 billion (+10%) from last year. The forecast rise in 2019 net farm income is the result of an increase in gross returns (up $8.5 billion or +2%)\u2014including continued payments under the trade aid package announced by USDA in July 2018\u2014partially offset by slightly higher production expenses (up $2.2 billion or +0.6%). Net farm income is calculated on an accrual basis. Net cash income (calculated on a cash-flow basis) is also projected higher in 2019 (+4.7%) to $95.7 billion.", "The 2019 net farm income forecast is substantially below (-18%) the 10-year average of $84.8 billion (in nominal dollars)\u2014primarily the result of the outlook for continued weak prices for most major crops. Commodity prices are under pressure from a record soybean and near-record corn harvest in 2018, diminished export prospects due to an ongoing trade dispute with China, and burdensome stocks.", "Government payments are projected down nearly 17% from 2018 at $11.5 billion\u2014due largely to lower market facilitation payments by USDA. Market facilitation payments to qualifying agricultural producers\u2014in response to the U.S.-China trade dispute\u2014were an estimated $5.2 billion in 2018 and are projected at $3.5 billion in 2019. Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) payments are also projected lower in 2019 ($1.7 billion) versus 2018 ($3.0 billion). Payments to dairy producers under the new Dairy Margin Coverage (DMC) program are projected up over 200% at $600 million, while payments under conservation and disaster assistance are projected up in 2019 at $4.3 billion (+8.6%) and $1.4 billion (+20%).", "Since 2008, U.S. agricultural exports have accounted for a 20% share of U.S. farm and manufactured or processed agricultural sales. In 2018 total agricultural exports were estimated up 2% at $143.4 billion. However, abundant supplies in international markets, strong competition from major foreign competitors, and the ongoing U.S.-China trade dispute are expected to shift trade patterns and lower U.S. export prospects slightly (-1%) in 2019.", "In addition to the outlook for slightly higher farm income, farm asset value is also projected up 1.5% from 2018 to $3.1 trillion. However, aggregate farm debt is projected record large at $426.7 billion\u2014up 3.9% from 2018. Farm asset values reflect farm investors' and lenders' expectations about long-term profitability of farm sector investments. USDA farmland values are projected to rise 1.8% in 2019, similar to the increases of 1.9% in 2018 and 2.3% in 2017. Because they comprise such a significant portion of the U.S. farm sector's asset base (83%), change in farmland values is a critical barometer of the farm sector's financial performance. At the farm household level, average farm household incomes have been well above average U.S. household incomes since the late 1990s. However, that advantage has narrowed in recent years. In 2014, the average farm household income (including off-farm income sources) was about 77% higher than the average U.S. household income. In 2017 (the last year with comparable data), that advantage is expected to decline to 32%.", "The outlook for below average net farm income and relatively weak prices for most major program crops signals the likelihood of continued relatively lean times ahead. The U.S. agricultural sector's well-being remains dependent on continued growth in domestic and foreign demand to sustain prices at current modest levels. In addition to commodity prices, the financial picture for the agricultural sector as a whole heading into 2019 will hinge on both domestic and international macroeconomic factors, including interest rates, economic growth, and consumer demand.", "This report uses the U.S. Department of Agriculture's (USDA) farm income projections (as of March 6, 2019) and agricultural trade outlook update (as of February 21, 2019) to describe the U.S. farm economic outlook. According to USDA's Economic Research Service (ERS), national net farm income\u2014a key indicator of U.S. farm well-being\u2014is forecast at $69.4 billion in 2019, up $6.3 billion (+10%) from last year. The forecast rise in 2019 net farm income is the result of an increase in gross returns (up $8.5 billion or +2%)\u2014including continued payments under the trade aid package announced by USDA in July 2018\u2014partially offset by slightly higher production expenses (up $2.2 billion or +0.6%). Net farm income is calculated on an accrual basis. Net cash income (calculated on a cash-flow basis) is also projected higher in 2019 (+4.7%) to $95.7 billion.", "The 2019 net farm income forecast is substantially below (-18%) the 10-year average of $84.8 billion (in nominal dollars)\u2014primarily the result of the outlook for continued weak prices for most major crops. Commodity prices are under pressure from a record soybean and near-record corn harvest in 2018, diminished export prospects due to an ongoing trade dispute with China, and burdensome stocks.", "Government payments are projected down nearly 17% from 2018 at $11.5 billion\u2014due largely to lower market facilitation payments by USDA. Market facilitation payments to qualifying agricultural producers\u2014in response to the U.S.-China trade dispute\u2014were an estimated $5.2 billion in 2018 and are projected at $3.5 billion in 2019. Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) payments are also projected lower in 2019 ($1.7 billion) versus 2018 ($3.0 billion). Payments to dairy producers under the new Dairy Margin Coverage (DMC) program are projected up over 200% at $600 million, while payments under conservation and disaster assistance are projected up in 2019 at $4.3 billion (+8.6%) and $1.4 billion (+20%).", "Since 2008, U.S. agricultural exports have accounted for a 20% share of U.S. farm and manufactured or processed agricultural sales. In 2018 total agricultural exports were estimated up 2% at $143.4 billion. However, abundant supplies in international markets, strong competition from major foreign competitors, and the ongoing U.S.-China trade dispute are expected to shift trade patterns and lower U.S. export prospects slightly (-1%) in 2019.", "In addition to the outlook for slightly higher farm income, farm asset value is also projected up 1.5% from 2018 to $3.1 trillion. However, aggregate farm debt is projected record large at $426.7 billion\u2014up 3.9% from 2018. Farm asset values reflect farm investors' and lenders' expectations about long-term profitability of farm sector investments. USDA farmland values are projected to rise 1.8% in 2019, similar to the increases of 1.9% in 2018 and 2.3% in 2017. Because they comprise such a significant portion of the U.S. farm sector's asset base (83%), change in farmland values is a critical barometer of the farm sector's financial performance. At the farm household level, average farm household incomes have been well above average U.S. household incomes since the late 1990s. However, that advantage has narrowed in recent years. In 2014, the average farm household income (including off-farm income sources) was about 77% higher than the average U.S. household income. In 2017 (the last year with comparable data), that advantage is expected to decline to 32%.", "The outlook for below average net farm income and relatively weak prices for most major program crops signals the likelihood of continued relatively lean times ahead. The U.S. agricultural sector's well-being remains dependent on continued growth in domestic and foreign demand to sustain prices at current modest levels. In addition to commodity prices, the financial picture for the agricultural sector as a whole heading into 2019 will hinge on both domestic and international macroeconomic factors, including interest rates, economic growth, and consumer demand."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The U.S. farm sector is vast and varied. It encompasses production activities related to traditional field crops (such as corn, soybeans, wheat, and cotton) and livestock and poultry products (including meat, dairy, and eggs), as well as fruits, tree nuts, and vegetables. In addition, U.S. agricultural output includes greenhouse and nursery products, forest products, custom work, machine hire, and other farm-related activities. The intensity and economic importance of each of these activities, as well as their underlying market structure and production processes, vary regionally based on the agro-climatic setting, market conditions, and other factors. As a result, farm income and rural economic conditions may vary substantially across the United States. ", "Annual U.S. net farm income is the single most watched indicator of farm sector well-being, as it captures and reflects the entirety of economic activity across the range of production processes, input expenses, and marketing conditions that have prevailed during a specific time period. When national net farm income is reported together with a measure of the national farm debt-to-asset ratio, the two summary statistics provide a quick and widely referenced indicator of the economic well-being of the national farm economy."], "subsections": []}, {"section_title": "USDA's 2019 Farm Income Forecast", "paragraphs": ["In the first of three official U.S. farm income outlook releases scheduled for 2019, ERS projects that U.S. net farm income will rise slightly in 2019 to $69.4 billion, up $6.3 billion (+10%) from last year. Net cash income (calculated on a cash-flow basis) is also projected higher in 2019 (+4.7%) to $95.7 billion. However, the initial 2019 net farm income forecast is below (-18%) the 10-year average of $84.8 billion and represents continued agriculture-sector economic weakness since 2013's record high of $123.8 billion. "], "subsections": [{"section_title": "Substantial Uncertainties Underpin the Outlook", "paragraphs": ["Abundant domestic and international supplies of grains and oilseeds suggest a fourth straight year of relatively weak commodity prices in 2018 ( Figure A-1 through Figure A-4 , and Table A-4 ). However, considerable uncertainty remains concerning whether the United States will achieve a resolution to its trade dispute with China and other major trading partners, what crops U.S. producers will decide to plant across the major growing regions of the United States ( Figure 3 ), whether farmers and ranchers will continue to expand livestock production ( Figure 8 ), what weather and growing conditions will prevail during the principal plant-growth season, and how domestic and international demand will evolve during the year."], "subsections": []}, {"section_title": "Selected Highlights", "paragraphs": ["Since the record highs of 2012 and 2013, net cash income and net farm income have fallen by 29% and 44%, respectively ( Figure 1 ), thus continuing a general downward trend in farm income since 2013\u2014primarily the result of a significant decline in most farm commodity prices since 2013-2014. Cash receipts for most major field crops (feed grains, hay, and wheat), oilseeds ( Figure 12 ), and animal products (beef, pork, broilers, eggs, and milk\u2014 Figure 14 ), are projected at $381.5 billion in 2019 (+2.3%) but have declined since their highs in 2012 and 2014 as U.S. and global grain and oilseed stocks and animal herds have rebuilt. Government payments in 2019 are projected down (-17%) from 2018 at $11.5 billion\u2014due largely to lower payments under both the Market Facilitation Program (MFP) and revenue-support programs ( Figure 16 ). Total production expenses for 2019 ( Figure 18 ), at $372 billion, are projected up slightly from 2018 (+0.6%), driven largely by feed, labor, and interest costs. Global demand for U.S. agricultural exports ( Figure 22 ) is projected at $141.5 billion in 2019, down 1% from 2018, due largely to a decline in sales to China. Farm asset values and debt levels are projected to reach record levels in 2019\u2014asset values at $3.1 trillion (+1.5%) and farm debt at $427 billion (+3.9%)\u2014pushing the projected debt-to-asset ratio up to 13.9%, the highest level since 2002 ( Figure 28 )."], "subsections": []}, {"section_title": "U.S. Agriculture Outlook: 2019 Overview", "paragraphs": ["Farm production choices in 2019 will largely be determined by producers' expectations for relative net returns from both the market and government programs across the various crops and livestock activities. Growing-season weather, yields, and harvest-time market prices are unknown early in the year when producers must lock in their production decisions for the year.", "Heading into 2019, most of the major growing zones ( Figure 3 ) across the Corn Belt, Plain States, Delta, and Southeast are largely free of drought ( Figure 4 ). Some dryness persists primarily in the mountain states, the Pacific Northwest, and southern Texas.", "Instead of dryness, excessive precipitation and early spring flooding present potential hindrances to the normal crop-choice and planting routines for 2019, particularly in the western Corn Belt ( Figure 5 )."], "subsections": [{"section_title": "Large Corn and Soybean Crops Continue to Dominate Commodity Markets", "paragraphs": ["Corn and soybeans are the two largest U.S. commercial crops in terms of both value and acreage. For the past several years, U.S. corn and soybean crops have experienced strong growth in both productivity and output, thus helping to build stockpiles at the end of the marketing year. This has been particularly true for soybeans, which have seen rapid growth in yield, acres planted, and stocks. This pattern reached a historic point in 2018 when, for the first time in history, U.S. soybean plantings (at 89.196 million acres) narrowly exceeded corn plantings (89.120 million acres). The record soybean plantings, coupled with the second-highest yields on record (51.6 bushels/acres), produced a record U.S. soybean harvest of 4.5 billion bushels and record ending stocks (900 million bushels) in 2018. The record harvest and abundant supply, coupled with the sudden loss of China as the principal buyer of U.S. soybeans in 2018, have pressured soybean farm prices lower (-8%) to a projected $8.60/bushel for the 2018/2019 marketing year\u2014the lowest farm price since 2006 ( Figure 6 ).", "Like soybeans, USDA estimated the second-highest corn yields on record in 2018 at 176.4 bushels/acre (just behind the previous year's record yield of 176.6 bushels/acre). As a result, the United States produced the third-largest corn harvest on record at 14.4 billion bushels. Despite the near-record production, USDA predicts that record large domestic usage (including for livestock feed, ethanol production, other industrial processing, and seed) plus large exports will result in a small reduction in corn ending stocks, a decline in the ending stocks-to-use ratio to 14.0% (down from 14.5%) and a slightly higher season average farm price of $3.55/bushel.", "Both wheat and upland cotton farm prices are projected up slightly from 2017 despite relatively abundant stocks-to-use ratios, largely on the strength of international demand.", "The corn and soybean crops provide important inputs for the domestic livestock, poultry, and biofuels sectors. In addition, the United States is traditionally one of the world's leading exporters of corn, soybeans, and soybean products\u2014vegetable oil and meal. During the recent five-year period from 2013/2014 to 2017/2018, the United States exported 49% of its soybean production and 15% of its corn crop. As a result, the export outlook for these two crops is critical to both farm sector profitability and regional economic activity across large swaths of the United States as well as in international markets. However, a tariff-related trade dispute between the United States and several major trading partners (in particular, China) has cast uncertainty over the corn and soybean markets. ", "The trade dispute has resulted in lower purchases of U.S. agricultural products by China in 2018, with continued diminished prospects for 2019. China was the top export market for U.S. agricultural products in 2017 with $25.9 billion in purchases. With the realization of diminished Chinese purchases, USDA has revised downward its expected export value to China for 2018 to $20.5 billion and for 2019 to $13.6 billion. Similarly, USDA has lowered its U.S. soybean export forecast from its initial estimate of 2.3 billion bushels in May 2018 to 1.875 billion bushels in its March 8, 2019, World Agricultural Supply and Demand Estimates report. The marketing year for corn and soybeans extends through August 2019. Thus, these forecasts depend on whether the trade dispute continues unabated or how the terms of any resolution (if one were to occur) would impact trade in the remaining months of the marketing year in 2019.", "The rapid expansion of U.S. soybean production has come largely at the expense of the wheat sector, which has been steadily losing acreage over the past several decades ( Figure 7 ). In 2017 U.S. wheat-planted acres were the lowest in over 100 years. Poor planting conditions in the fall of 2018 (for the 2019 winter wheat crop) across several states have resulted in the lowest estimated plantings outlook for winter wheat since 1909. The contraction in area is expected to support wheat prices and possibly lead to expanded spring wheat plantings in the Northern Plains in 2019."], "subsections": []}, {"section_title": "Livestock Outlook for 2019", "paragraphs": ["USDA's February 2019 Cattle report reported that U.S. cattle herd expansion, which has been growing since 2015, has slowed markedly but is still projected to grow through 2019. Similarly, U.S. hog and poultry flocks have been growing and are expected to continue to expand in 2019. A key uncertainty for the meat-producing sector is whether demand will expand rapidly enough to absorb the continued growth in output or whether surplus production will begin to pressure prices lower. For 2019, expected production of beef (+1.6%), pork (+4.2%), broilers (+1.2%), and eggs (+2.3%) are projected to expand relatively robustly. This growth in protein production was preceded by strong growth rates in 2018: beef (+2.6%), pork (+2.9%), broilers (+2.2%), and eggs (+2.1%). USDA projects that combined domestic and export demand will continue to grow for red meat (+1.7%) and poultry (+0.9%) but at slower rates than projected meat production, thus contributing to the outlook for lower prices and profit margins for livestock in 2019."], "subsections": [{"section_title": "Feed Margins Signal Profit Outlook", "paragraphs": ["The changing conditions for the U.S. livestock sector may be tracked by the evolution of the ratios of livestock output prices to feed costs ( Figure 10 ). A higher ratio suggests greater profitability for producers. The cattle-, hog-, and broiler-to-feed margins all moved upward in during 2014 but have exhibited volatility during the 2015-2018 period. The hog, cattle, and broiler sectors remain profitable. However, continued production growth of between 2% and 4% for red meat and poultry suggests that prices are vulnerable to weakness in demand. Both the milk- and hog-to-feed ratios fell during 2018, suggesting eroding profitability. While this result varies widely across the United States, many small or marginally profitable hog and milk producers face continued financial difficulties. In addition, both U.S. and global milk production are projected to continue growing in 2019. As a result, milk prices could come under further pressure in 2019, although USDA is currently projecting milk prices up slightly in 2019."], "subsections": []}, {"section_title": "Background on the U.S. Cattle-Beef Sector", "paragraphs": ["Record profitability among cow-calf producers in 2014, coupled with then-improved forage conditions, helped to trigger the beef cow herd expansion ( Figure 9 ). The continued cattle expansion through 2019\u2014despite weakening profitability\u2014is primarily the result of a lag in the biological response to the strong market price signals of late 2014. During the 2007-2014 period, high feed and forage prices plus widespread drought in the Southern Plains\u2014the largest U.S. cattle production region\u2014had resulted in an 8% contraction of the U.S. cattle inventory ( Figure 9 ). Reduced beef supplies led to higher producer and consumer prices, which in turn triggered the slow rebuilding phase in the cattle cycle that started in 2014 (see the price-to-feed ratio for steers and heifers, Figure 10 ). The resulting continued expansion of beef supplies pressured market prices lower in 2016. The lower price outlook is expected to persist through 2019 despite strong domestic and international demand across all meat categories\u2014beef, pork, and poultry ( Table A-4 ). "], "subsections": []}]}]}, {"section_title": "Gross Cash Income Highlights", "paragraphs": ["Projected farm-sector revenue sources in 2019 include crop revenues (47% of sector revenues), livestock receipts (42%), government payments (3%), and other farm-related income (8%), including crop insurance indemnities, machine hire, and custom work. Total farm sector gross cash income for 2019 is projected to be up (+1.4%) to $427.5 billion, driven by increases in both crop (+2%) and livestock (+2.6%) receipts ( Figure 11 ). Cash receipts from direct government payments (-17%) and other farm-related income (-1.2) are down slightly from 2018. "], "subsections": [{"section_title": "Crop Receipts", "paragraphs": ["Total crop sales peaked in 2012 at $231.6 billion when a nationwide drought pushed commodity prices to record or near-record levels. In 2019, crop sales are projected at $201.7 billion, up slightly from 2018 ( Figure 12 ). Projections for 2019 and percentage changes from 2018 include: ", "Feed crops\u2014corn, barley, oats, sorghum, and hay: $58.8 billion (+4.0%); Oil crops\u2014soybeans, peanuts, and other oilseeds: $39.5 billion (-6.6%); Fruits and nuts: $32.9 billion (+8.2%); Vegetables and melons: $18.6 billion (+0.9%); Food grains\u2014wheat and rice: $12.4 billion (+6.2%); Cotton: $8.3 billion (+6.5%); and Other crops including tobacco, sugar, greenhouse, and nursery: $29.8 billion (+2%)."], "subsections": []}, {"section_title": "Livestock Receipts", "paragraphs": ["The livestock sector includes cattle, hogs, sheep, poultry and eggs, dairy, and other minor activities. Cash receipts for the livestock sector grew steadily from 2009 to 2014, when it peaked at a record $212.8 billion. However, the sector turned downward in 2015 (-11.0%) and again in 2016 (-14.1%), driven largely by projected year-over-year price declines across major livestock categories ( Table A-4 and Figure 14 ). In 2017, livestock sector cash receipts recovered with year-to-year growth of 8.1% to $176.0 billion. In 2018, cash receipts were nearly unchanged. In 2019, cash receipts are projected up 2.6% for the sector at $179.9 billion as cattle and dairy sales partially offset declines in hog and poultry. Projections for 2019 (and percentage changes from 2018) include:", "Cattle and calf sales: $69.2 billion (+4.0%); Poultry and egg sales: $46.0 billion (-0.7%); Dairy sales, valued at $37.8 billion (+7.8%); Hog sales: $19.5 billion (-3.2%); and Miscellaneous livestock, valued at $7.4 billion (+2.7%)."], "subsections": []}, {"section_title": "Government Payments", "paragraphs": ["Government payments include direct payments (decoupled payments based on historical planted acres), price-contingent payments (program outlays linked to market conditions), conservation payments (including the Conservation Reserve Program and other environmental-based outlays), ad hoc and emergency disaster assistance payments (including emergency supplemental crop and livestock disaster payments and market loss assistance payments for relief of low commodity prices), and other miscellaneous outlays (including market facilitation payments, cotton ginning cost-share, biomass crop assistance program, peanut quota buyout, milk income loss, tobacco transition, and other miscellaneous payments).", "Total government payments of $11.5 billion still represent a relatively small share (3%) of projected gross cash income of $427.5 billion in 2019. In contrast, government payments are expected to represent 16% of the projected net farm income of $69.4 billion. However, the importance of government payments as a percentage of net farm income varies nationally by crop and livestock sector and by region.", "Government payments in 2019 are projected down 16.8% from 2018 at $11.5 billion ( Figure 16 and Table A-4 ). Government payments in 2018 were inflated by unexpected payments of approximately $5.2 billion under the MFP initiated by USDA in response to the U.S.-China trade dispute. MFP payments to qualifying agricultural producers were estimated at $5.7 billion in 2018 and are projected at $3.5 billion in 2019, thus accounting for a year-to-year difference of -$2.2 billion. USDA ad hoc disaster assistance, at $1.4 billion, is projected up (+20.4%). MFP and ad hoc disaster assistance payments are expected to add $6.8 billion, or about 12%, to net farm income in 2018 and $4.9 billion, or about 8%, to net farm income in 2019.", "Payments under the Agricultural Risk Coverage and Price Loss Coverage programs are projected lower in 2019 at $1.7 billion compared with an estimated $3.0 billion in 2018 (see \"Price Contingent\" in Figure 16 ). No payments are forecast under the marketing loan program in 2019, the same as in 2018, as program crop prices are expected to remain above most farm-bill loan rates through 2019. The new Dairy Margin Coverage program is expected to make $600 million in payments in 2019, up from $188 million under the previous milk Margin Protection Program (MPP) in 2018 (see next section for details).", "Conservation programs include all conservation programs operated by USDA's Farm Service Agency and the Natural Resources Conservation Service that provide direct payments to producers. Estimated conservation payments of $4.3 billion are forecast for 2019, up slightly from $4.0 billion in 2018."], "subsections": []}, {"section_title": "Dairy Margin Coverage Program Outlook", "paragraphs": ["The 2018 farm bill (Agricultural Improvement Act of 2018, P.L. 115-334 ) made several changes to the previous MPP program, including a new name\u2014the Dairy Margin Coverage (DMC) program\u2014and expanded margin coverage choices from the original range of $4.00-$8.00 per hundredweight (cwt.). Under the 2018 farm bill, milk producers have the option of covering the milk-to-feed margin at a $9.50/cwt. threshold on the first 5 million pounds of milk coverage under the program. ", "The DMC margin differs from the USDA-reported milk-to-feed ratio shown in Figure 10 but reflects the same market forces. As of January 2019, the formula-based milk-to-feed margin used to determine government payments was below the newly instituted $9.50/cwt. threshold ( Figure 17 ), thus increasing the likelihood of DMC payments in 2019. "], "subsections": []}]}, {"section_title": "Production Expenses", "paragraphs": ["Total production expenses for 2019 for the U.S. agricultural sector are projected to be up slightly (+0.6%) from 2018 in nominal dollars at $372.0 billion ( Figure 18 ). Production expenses peaked in both nominal and inflation-adjusted dollars in 2014, then declined for two years before resuming their upward trend in nominal dollars in 2017. ", "But how have production expenses moved relative to revenues? A comparison of the indexes of prices paid (an indicator of expenses) versus prices received (an indicator of revenues) reveals that the prices received index generally declined from 2014 through 2016, rebounded in 2017, then declined again in 2018 ( Figure 19 ). Farm input prices (as reflected by the prices paid index) showed a similar pattern but with a much smaller decline from their 2014 peak, thus suggesting that farm sector profit margins have been squeezed since 2014.", "Production expenses will affect crop and livestock farms differently. The principal expenses for livestock farms are feed costs, purchases of feeder animals and poultry, and hired labor. Feed costs, labor expenses, interest costs, and property taxes are all projected up in 2019 ( Figure 20 ). In contrast, fuel, land rent, and fertilizer costs are projected lower. "], "subsections": [{"section_title": "Cash Rental Rates", "paragraphs": ["Renting or leasing land is a way for young or beginning farmers to enter agriculture without incurring debt associated with land purchases. It is also a means for existing farm operations to adjust production more quickly in response to changing market and production conditions while avoiding risks associated with land ownership. The share of rented farmland varies widely by region and production activity. However, for some farms it constitutes an important component of farm operating expenses. Since 2002, about 38% of agricultural land used in U.S. farming operations has been rented. ", "The majority of rented land in farms is rented from nonoperating landlords. Nationally in 2012, 30% of all land in farms was rented from someone other than a farm operator. Some farmland is rented from other farm operations\u2014nationally about 8% of all land in farms in 2012 (the most recent year for which data are available)\u2014and thus constitutes a source of income for some operator landlords. Total net rent to nonoperator landlords is projected to be down (-2.1%) at $14.3 billion in 2019.", "Cash rental rates for 2019 are not yet available. Average cash rental rates for 2018 were up year-over-year ($138 per acre versus $136 in 2017). Although rental rates\u2014which for 2019 were set the preceding fall of 2018 or in early spring of 2019\u2014dipped in 2016, they still reflect the high crop prices and large net returns of the preceding several years, especially the 2011-2014 period ( Figure 21 ). The national rental rate for cropland peaked at $144 per acre in 2015. "], "subsections": []}]}]}, {"section_title": "Agricultural Trade Outlook", "paragraphs": ["U.S. agricultural exports have been a major contributor to farm income, especially since 2005. As a result, the downturn in those exports that started in 2015 ( Figure 22 ) deepened the downturn in farm income that had started in 2013 ( Figure 1 ). "], "subsections": [{"section_title": "Key U.S. Agricultural Trade Highlights", "paragraphs": ["USDA projects U.S. agricultural exports at $141.5 billion in FY2019, down slightly (-1%) from $143.4 billion in FY2018. Export data include processed and unprocessed agricultural products. This downturn masks larger country-level changes that have occurred as a result of ongoing trade disputes (as discussed below). In FY2019, U.S. agricultural imports are projected nearly unchanged at $127.0 billion, but the resultant agricultural trade surplus of $14.5 billion would be the lowest since 2007.", "A substantial portion of the surge in U.S. agricultural exports that occurred between 2010 and 2014 was due to higher-priced grain and feed shipments, including record oilseed exports to China and growing animal product exports to East Asia. As commodity prices have leveled off, so too have export values (see the commodity price indexes in Figure A-1 and Figure A-2 ). In FY2017, the top three markets for U.S. agricultural exports were China, Canada, and Mexico, in that order. Together, these three countries accounted for 46% of total U.S. agricultural exports during the five-year period FY2014-FY2018 ( Figure 23 ). However, in FY2019 the combined share of U.S. exports taken by China, Canada, and Mexico is projected down to 42% largely due to sharply lower exports to China. The ordering of the top three markets is reordered to Canada, Mexico, and China, as China is projected to barely stay ahead of the European Union and Japan as a destination for U.S. agricultural exports. From FY2014 through FY2017, China imported an average of $26.2 billion of U.S. agricultural products. However, USDA forecasts China's imports of U.S. agricultural products to decline to $20.5 billion in FY2018 and to $13.6 billion in FY2019 as a result of the U.S.-China trade dispute. The fourth- and fifth-largest U.S. export markets are the European Union and Japan, which have accounted for a combined 17% of U.S. agricultural exports during the FY2014-FY2018 period. This same share is projected to continue in FY2019 ( Figure 23 ). These two markets have shown relatively limited growth in recent years when compared with the rest of the world.", "The \"Rest of World\" (ROW) component of U.S. agricultural trade\u2014South and Central America, the Middle East, Africa, and Southeast Asia\u2014has shown strong import growth in recent years. ROW is expected to account for 41% of U.S. agricultural exports in FY2019. ROW import growth is being driven in part by both population and GDP growth but also from shifting trade patterns as some products previously targeting China have been diverted to new markets. Over the past four decades, U.S. agricultural exports have experienced fairly steady growth in shipments of high-value products\u2014including horticultural products, livestock, poultry, and dairy. High-valued exports are forecast at $94.3 billion for a 66.6% share of U.S. agricultural exports in FY2019 ( Figure 24 ). In contrast, bulk commodity shipments (primarily wheat, rice, feed grains, soybeans, cotton, and unmanufactured tobacco) are forecast at a 33.4% share of total U.S. agricultural exports in FY2019 at $47.2 billion. This compares with an average share of over 60% during the 1970s and into the 1980s. As grain and oilseed prices decline, so will the bulk value share of U.S. exports."], "subsections": []}, {"section_title": "U.S. Farm and Manufactured Agricultural Product Export Shares", "paragraphs": ["The share of agricultural production (based on value) sold outside the country indicates the level of U.S. agriculture's dependence on foreign markets, as well as the overall market for U.S. agricultural products. ", "As a share of total farm and manufactured agricultural production, U.S. exports were estimated to account for 19.8% of the overall market for agricultural products from 2008 through 2016\u2014the most recent data year for this calculation ( Figure 25 ). The export share of agricultural production varies by product category.", "At the upper end of the range for export shares, the bulk food grain export share has varied between 50% and 80% since 2008, while the oilseed export share has ranged between 47% and 58%. The mid-spectrum range of export shares includes the export share for fruit and tree nuts, which has ranged from 37% to 45%, while meat products have ranged from 27% to 41%. At the low end of the spectrum, the export share of vegetable and melon sales has ranged from 15% to 18%, the dairy products export share from 9% to 24%, and the agricultural-based beverage export share between 7% and 13%."], "subsections": []}]}, {"section_title": "Farm Asset Values and Debt", "paragraphs": ["The U.S. farm income and asset-value situation and outlook suggest a relatively stable financial position heading into 2019 for the agriculture sector as a whole\u2014but with considerable uncertainty regarding the downward outlook for prices and market conditions for the sector and an increasing dependency on international markets to absorb domestic surpluses", "Farm asset values\u2014which reflect farm investors' and lenders' expectations about long-term profitability of farm sector investments\u2014are projected to be up 1.5% in 2019 to a nominal $3.1 trillion ( Table A-3 ). In inflation-adjusted terms (using 2017 dollars), farm asset values peaked in 2014 ( Figure 26 ).", "Nominally higher farm asset values are expected in 2019 due to higher real estate values (+1.8%), which offset a slight decrease in nonreal estate values (-0.1%). Real estate is projected to account for 83% of total farm sector asset value. Crop land values are closely linked to commodity prices. The leveling off of crop land values since 2015 reflects mixed forecasts for commodity prices (corn, soybeans, and cotton lower; wheat, rice, and livestock products higher) and the uncertainty associated with international commodity markets ( Figure 27 ). Total farm debt is forecast to rise to a record $426.7 billion in 2019 (+3.9%) ( Table A-3 ). Farm equity\u2014or net worth, defined as asset value minus debt\u2014is projected to be up slightly (+1.1%) at $2.7 trillion in 2019 ( Table A-3 ). The farm debt-to-asset ratio is forecast up in 2019 at 13.9%, the highest level since 2002 but still relatively low by historical standards ( Figure 28 )."], "subsections": []}, {"section_title": "Average Farm Household Income", "paragraphs": ["A farm can have both an on-farm and an off-farm component to its income statement and balance sheet of assets and debt. Thus, the well-being of farm operator households is not equivalent to the financial performance of the farm sector or of farm businesses because of the inclusion of nonfarm investments, jobs, and other links to the nonfarm economy. ", "Average farm household income (sum of on- and off-farm income) is projected at $115,588 in 2019 ( Table A-2 ), up 4.3% from 2018 and below the record of $134,164 in 2014. About 18% ($20,365) of total farm household income is from farm production activities, and the remaining 82% ($95,223) is earned off the farm (including financial investments). The share of farm income derived from off-farm sources had increased steadily for decades but peaked at about 95% in 2000 ( Figure 29 )."], "subsections": [{"section_title": "Total vs. Farm Household Average Income", "paragraphs": ["Since the late 1990s, farm household incomes have surged ahead of average U.S. household incomes ( Figure 30 ). In 2017 (the last year for which comparable data were available), the average farm household income of $113,495 was about 32% higher than the average U.S. household income of $86,220 ( Table A-2 )."], "subsections": [{"section_title": "Appendix. Supporting Charts and Tables", "paragraphs": [" Figure A-1 to Figure A-4 present USDA data on monthly farm prices received for several major farm commodities\u2014corn, soybeans, wheat, upland cotton, rice, milk, cattle, hogs, and chickens. The data are presented in an indexed format where monthly price data for year 2010 = 100 to facilitate comparisons.", "USDA Farm Income Data Tables", " Table A-1 to Table A-3 present aggregate farm income variables that summarize the financial situation of U.S. agriculture. In addition, Table A-4 presents the annual average farm price received for several major commodities, including the USDA forecast for the 2018-2019 marketing year."], "subsections": []}]}]}, {"section_title": "", "paragraphs": [], "subsections": []}]}}
{"id": "R45552", "title": "Changes to House Rules Affecting the Congressional Budget Process Included in H.Res. 6 (116th Congress)", "released_date": "2019-03-04T00:00:00", "summary": ["On January 3, 2019, the House adopted Title I of H.Res. 6 , the standing rules for the House of Representatives for the 116 th Congress. In addition to the standing rules, H.Res. 6 included a separate order related to the consideration of appropriations bills. This report provides information on changes to both the standing rules and separate orders that might affect the consideration of budgetary legislation in the House of Representatives. These include the following:", "Deleting language in Rule X added in the 115 th Congress providing for committees to include a review of authorizations for programs or agencies within their jurisdiction in their oversight plans. Deleting language in Rule XIII, previously adopted in the 114 th and 115 th Congresses, requiring that any budgetary estimates provided by the Congressional Budget Office (CBO) include, to the extent practicable, a macroeconomic impact analysis (often referred to as \"dynamic scoring\") as well as a requirement that any estimate provided to CBO by the Joint Committee on Taxation also include a macroeconomic impact analysis. Deleting language added to Rule XXI in the 104 th Congress requiring the vote of a three-fifths majority to approve a federal income tax rate increase as well as a requirement in Rule XX to automatically order the yeas and nays for a vote of the House on such measures. Establishing new language as Rule XXVIII providing for certain measures concerning the debt limit to automatically be engrossed and deemed to have been passed by the House. This measure would suspend the debt limit through the end of the budget year in the concurrent resolution on the budget (but not through the period covered by any outyears beyond the budget year). The engrossed measure would then be transmitted to the Senate for further action. This rule is similar to language that was previously part of House rules from the 96 th -107 th Congresses (known as the \"Gephardt Rule\"). Reestablishing a PAYGO requirement in the House, which had previously been in effect during the 110 th and 111 th Congresses. This PAYGO rule (Rule XXI, clause 10) replaces the CUTGO rule that was a part of Rule XXI between the 112 th and 115 th Congresses. The new rule prohibits the consideration of direct spending or revenue legislation that is projected to increase or cause a deficit in either of two time periods: (1) the period consisting of the current fiscal year, the budget year, and the four ensuing fiscal years following the budget year or (2) the 11-year period consisting of the current year, the budget year, and the ensuing nine fiscal years following the budget year. The rule applies to any bill, joint resolution, amendment, motion, or conference report that affects direct spending or revenues.", "H.Res. 6 also included a separate order establishing a limit on advance appropriations, defined as applying to funding provided in FY2019 appropriations acts that are to become available in any fiscal year following FY2019.", "In addition, several separate orders from previous congresses are not included in H.Res. 6 for the 116 th Congress. These include", "language prohibiting House consideration of measures estimated by CBO as causing a net increase in spending in excess of $5 billion in any of the four 10-year periods beginning with the fiscal year 10 years after the current fiscal year, two points of order that previously supplemented the point of order in Section 302(f) of the Congressional Budget Act of 1974 as a means for enforcing 302(b) suballocations, language requiring that appropriations bills include a spending reduction account, and language allowing certain legislative amendments in appropriations bills (known as the \"Holman Rule\")."], "reports": {"section_title": "", "paragraphs": ["A t the beginning of each Congress, the House of Representatives must adopt rules to govern its proceedings. The House does this by readopting the rules of the previous Congress along with any changes that will apply in the new Congress. On January 3, 2019, the House considered and adopted H.Res. 5 , a resolution providing for the consideration of H.Res. 6 , including separate votes on each of the three titles comprising H.Res. 6 . Title I, the standing rules for the House of Representatives for the 116 th Congress, was adopted by a vote of 234-197 on January 3, 2019. In addition to the standing rules, H.Res. 6 includes several additional provisions, called separate orders, that also govern proceedings in the House. A number of the provisions adopted both as part of the standing rules of the House and as separate orders might affect the consideration of budgetary legislation. In many cases, these provisions are similar to provisions adopted in previous Congresses. This report provides information on changes to both the standing rules and separate orders that might affect the consideration of budgetary legislation in the House of Representatives during the 116 th Congress."], "subsections": [{"section_title": "Rules Change Related to Authorizations", "paragraphs": ["The 104 th Congress (1995-1996) added a provision to clause 2(d) of House Rule X that required that each standing committee adopt (by February 15 of the first session of a Congress) its own oversight plan for the Congress. H.Res. 5 (115 th Congress) added language specifically requesting that committees review authorizations for programs or agencies within their jurisdiction. This language was dropped from Rule X for the 116 th Congress."], "subsections": []}, {"section_title": "Rules Change Related to Budget Estimates", "paragraphs": ["A provision was added to House rules in the 105 th Congress that authorized the chair of the Committee on Ways and Means to request the Joint Committee on Taxation to prepare a dynamic estimate of revenue changes proposed in a measure designated by the majority leader as major tax legislation. In the 108 th Congress, this provision was modified to establish a point of order against the consideration of a measure reported from the Committee on Ways and Means to amend the Internal Revenue Code of 1986 unless the report included a macroeconomic impact analysis (often referred to as \"dynamic scoring\") or an explanation of why such an analysis was not calculable. In the 114 th Congress, this provision was supplanted by a requirement that any budgetary estimates provided by the Congressional Budget Office (CBO) include, to the extent practicable, a macroeconomic impact analysis as well as a requirement that any estimate provided to CBO by the Joint Committee on Taxation also include a macroeconomic impact analysis. This language was dropped from Rule XIII for the 116 th Congress."], "subsections": []}, {"section_title": "Rule Change Related to the Passage of Certain Revenue Legislation", "paragraphs": ["A provision was added to House rules in the 104 th Congress that required the vote of a three-fifths majority to approve a federal income tax rate increase. In the 105 th Congress, this provision was modified to clarify its application. This language was dropped from Rule XXI for the 116 th Congress.", "In addition, a requirement in House Rule XX to automatically order the yeas and nays for a vote of the House on such measures was also dropped for the 116 th Congress."], "subsections": []}, {"section_title": "Rule Change Related to the Consideration of Public Debt Legislation3", "paragraphs": ["A limit on the public debt is fixed by law and may be changed or suspended by enactment of a bill or joint resolution. A former rule of the House (known as the ''Gephardt rule'' after Representative Richard Gephardt of Missouri) provided for a measure to amend the debt to automatically be engrossed and deemed to have been passed by the House by the same vote as the adoption by the House of a conference report on a concurrent resolution on the budget setting forth a level of the public debt different from the existing statutory limit, thereby avoiding the need for a separate vote on the debt limit. The engrossed measure would then be transmitted to the Senate for further action.", "This rule was first added to the standing rules of the House as Rule XLIX by P.L. 96-78 , although it was renumbered as Rule XXVIII as part of the recodification of House rules in the 106 th Congress. In several instances in the 104 th -106 th Congresses the rule was suspended so that it did not provide for the automatic engrossment of legislation based on changes in the public debt in concurrent resolutions. The rule was repealed in the 107 th Congress, reinstated in the 108 th Congress, and repealed again in the 112 th Congress.", "H.Res. 6 established a similar requirement as House Rule XXVIII. This new language provides for a measure to automatically be engrossed and deemed to have been passed by the House by the same vote as the adoption by the House of the concurrent resolution on the budget setting forth a level of the public debt different from the existing statutory limit. Rather than a specific level of debt, this measure would suspend the debt limit through the end of the budget year for the concurrent resolution on the budget (but not through the period covered by any outyears beyond the budget year). As with the earlier version of the rule, the engrossed measure would then be transmitted to the Senate for further action."], "subsections": []}, {"section_title": "Rule Changes Related to the Consideration of Revenue and Direct Spending Legislation", "paragraphs": [], "subsections": [{"section_title": "The \"PAYGO\" Rule6", "paragraphs": ["H.Res. 6 reestablished a PAYGO requirement in the House, which had been in effect during the 110 th and 111 th Congresses. The new PAYGO rule (Rule XXI, clause 10) prohibits the consideration of direct spending or revenue legislation that is projected to increase or cause a deficit in either of two time periods: (1) the period consisting of the current fiscal year, the budget year, and the four ensuing fiscal years following the budget year or (2) the 11-year period consisting of the current year, the budget year, and the ensuing nine fiscal years following the budget year. The rule applies to any bill, joint resolution, amendment, motion, or conference report that affects direct spending or revenues. ", "The House PAYGO rule replaced the House CUTGO rule that was adopted by the House at beginning of the 112 th Congress and was in effect though the end of the 115 th Congress. The CUTGO rule prohibited the consideration of any legislation that would have the net effect of increasing direct spending over the same two time periods noted above.", "Under the House PAYGO rule, one or more provisions in a measure may be exempted from the rule by being designating as an \"emergency.\" Section (c) of the rule states that the exemption may apply to any legislative text designated as an emergency within a bill or joint resolution, an amendment made in order as original text by a resolution reported from the House Committee on Rules, a conference report, or an amendment between the Houses. The exemption does not apply to other amendments even if the amendment includes an emergency designation.", "The House PAYGO rule also provides flexibility by allowing two measures that have been combined to \"offset\" one another so long as their net effect would comply with the rule. Specifically, Section (b) of the rule states that in the event that a resolution reported from the House Committee on Rules directs the Clerk of the House to add legislative text (that has already passed the House) as new matter to another piece of legislation, the legislative provisions can be evaluated together for compliance with the rule."], "subsections": []}, {"section_title": "Prohibiting Consideration of Legislation Causing a Long-Term Increase in\u00c2 Spending", "paragraphs": ["Language prohibiting House consideration of legislation that would cause a long-term increase in spending was previously adopted by the House as a separate order in the 112 th and 115 th Congresses and adopted in budget resolutions in the 113 th Congress ( H.Con.Res. 96 ) and 114 th Congress ( S.Con.Res. 11 ). This language generally required CBO to estimate whether certain legislation would cause a net increase in spending in excess of $5 billion in any of the four 10-year periods beginning with the fiscal year 10 years after the current fiscal year and also prohibited the House from considering legislation that would cause such an increase. This language was not included in H.Res. 6 ."], "subsections": []}]}, {"section_title": "Rule Changes Related to the Consideration of Appropriations Legislation", "paragraphs": [], "subsections": [{"section_title": "Limiting Advance Appropriations", "paragraphs": ["Although budget authority for most federal programs is provided through annual appropriations actions that allow those funds to be obligated during the ensuing fiscal year, funding for certain programs is provided with a different period of availability. The term advance appropriations is applied to funds that will become available for obligation one or more fiscal years after the budget year covered by the appropriations act.", "In recent years the House has adopted limits on the level of advance appropriations that may be provided as well as the programs or activities for which it may be provided. In some instances, these limits have been established in a budget resolution, as in S.Con.Res. 13 (111 th Congress) and S.Con.Res. 11 (114 th Congress). In other instances, the House has adopted the limit as a separate order as part of the resolution adopting the chamber's rules, as in H.Res. 5 (112 th Congress) and H.Res. 5 (115 th Congress).", "In the 116 th Congress, a separate order prohibits advance appropriations that exceed (1) $28,852,000,000 for FY2020 in new budget authority for programs or activities identified in a list submitted to the Congressional Record by the chair of the Budget Committee under the heading \"Accounts Identified for Advance Appropriations\" and (2) $75,550,600,000 for FY2020 in new budget authority for programs and activities identified under the heading \"Veterans Accounts Identified for Advance Appropriations.\" Advance appropriation is defined in the provision to apply to funding provided in FY2019 appropriations acts that are to become available in any fiscal year following FY2019."], "subsections": []}, {"section_title": "Enforcing Spending Limits", "paragraphs": ["A point of order under Section 302(f) of the Congressional Budget Act prohibits the consideration of measures or amendments that would cause the measure to exceed an allocation made pursuant to Section 302(a) or, in the case of appropriations bills, a suballocation pursuant to Section 302(b). In addition, as a consequence of this point of order, Members may offer amendments to increase the amount of budget authority in an appropriations bill only if it included budget authority less than the level of the applicable 302(b) suballocation, or if it was accompanied by one (or more) provisions that could serve as an offset.", "This point of order was previously supplemented by a separate order\u00e2\u0080\u0094first adopted during the 109 th Congress (2005-2006) as a freestanding resolution ( H.Res. 248 )\u00e2\u0080\u0094providing that a motion that the Committee of the Whole rise and report an appropriations bill to the House is not in order if the bill, as amended, exceeds the applicable 302(b) suballocation. This provision was adopted as a separate order for the 110 th -115 th Congresses, but it is not applicable for the 116 th Congress.", "The House also previously supplemented enforcement of 302(b) suballocations through language prohibiting amendments to general appropriations bills that would result in a net increase in the level of budget authority in the bill. This did not, however, prohibit amendments that would increase budget authority for an item in the bill if the amendment also included an equal or greater offset. This prohibition was adopted as a separate order in the 112 th , 113 th , and 114 th Congresses and as part of House Rule XXI for the 115 th Congress, but it is not applicable for the 116 th Congress."], "subsections": []}, {"section_title": "Requiring a Spending Reduction Account", "paragraphs": ["This provision was previously included as a standing order for the 112 th -115 th Congresses. The order required that any general appropriations bill include a spending reduction account. This \"account\" was a provision in the last section of the bill to function as a temporary deposit box into which amendments could transfer budget authority and not be available as an offset for further amendments during consideration of that bill. This language was not included in \u00c2\u00a0 H.Res. 6 . "], "subsections": []}, {"section_title": "Allowing Certain Legislative Amendments: The Holman Rule", "paragraphs": ["Although congressional rules establish a general division of responsibility under which questions of policy are kept separate from questions of funding, House rules provide for exceptions in certain circumstances. One such circumstance allows for the inclusion of legislative language in general appropriations bills or amendments thereto for \"germane provisions that retrench expenditures by the reduction of amounts of money covered by the bill.\" This exception appears in clause 2(b) of House Rule XXI and is known as the \"Holman rule\" (after Representative William Holman of Indiana, who first proposed the exception in 1876).", "In the 115 th Congress the House adopted a special order to provide that retrenchments of expenditures by a reduction of amounts of money covered by the bill shall be construed as applying to", "any provision or amendment that retrenches expenditures by\u00e2\u0080\u0094", "(1) the reduction of amounts of money in the bill;", "(2) the reduction of the number and salary of the officers of the United States; or", "(3) the reduction of the compensation of any person paid out of the Treasury of the United States.", "This language was initially adopted in H.Res. 5 (115 th Congress) to apply to the first session of the 115 th Congress. Its applicability was extended to the second session of the 115 th Congress by H.Res. 787 (115 th Congress), but this language is not applicable in the 116 th Congress ."], "subsections": []}]}]}}
{"id": "R45100", "title": "The 10-20-30 Provision: Defining Persistent Poverty Counties", "released_date": "2019-03-27T00:00:00", "summary": ["Antipoverty interventions that provide resources to local communities, based on the characteristics of those communities, have been of interest to Congress. One such policy, dubbed the \"10-20-30 provision,\" was implemented in the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5). Title I, Section 105 of ARRA required the Secretary of Agriculture to allocate at least 10% of funds from three rural development program accounts to persistent poverty counties; that is, to counties that have had poverty rates of 20% or more for the past 30 years, as measured by the 1980, 1990, and 2000 decennial censuses. One notable characteristic of this provision is that it did not increase spending for the rural development programs addressed in ARRA, but rather targeted existing funds differently.", "Research has suggested that areas for which the poverty rate (the percentage of the population that is below poverty) reaches 20% experience systemic problems that are more acute than in lower-poverty areas. Therefore, policy interventions at the community level (such as applying the 10-20-30 provision to other programs besides those cited in ARRA), and not only at the individual or family level, could continue to be of interest to Congress.", "Poverty rates are computed using data from household surveys. The list of counties identified to be persistently poor may differ by roughly 70 to 100 counties in a particular year, depending on the surveys selected to compile the list and the rounding method used for the poverty rate estimates. Before the mid-1990s, the decennial census was the only source of county poverty estimates. However, currently, the only data sources that provide poverty estimates for all U.S. counties are the American Community Survey (ACS) and the Small Area Income and Poverty Estimates program (SAIPE). Therefore, to determine whether an area is \"persistently\" poor in a time span that ends after the year 2000, it must first be decided whether ACS or SAIPE poverty estimates will be used for the later part of that time span.", "When determining the rounding method and data source to be used to compile a list of persistent poverty counties, the following may be relevant to consider:", "Characteristics of interest: SAIPE is suited for poverty or median income alone; ACS for other topics in addition to poverty and income. Geographic areas of interest: SAIPE is recommended for counties and school districts only; ACS produces estimates for other small geographic areas as well. Reference period of estimate: SAIPE for one year; ACS for a five-year span. Rounding method for poverty rates: rounding to 20.0% (one decimal place) yields a shorter list than rounding to 20% (whole number).", "Poverty status is not defined for all persons: foster children (unrelated individuals under age 15), institutionalized persons, and residents of college dormitories are excluded; the homeless are not targeted by household surveys; and areas with large numbers of students living off-campus may have high poverty rates."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Antipoverty interventions that provide resources to local communities, based on the characteristics of those communities, have been of interest to Congress. One such policy, dubbed the \"10-20-30 provision,\" was implemented in the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5 ). Title I, Section 105 of ARRA required the Secretary of Agriculture to allocate at least 10% of funds provided in that act from three rural development program accounts to persistent poverty counties; that is, to counties that have had poverty rates of 20% or more for the past 30 years, as measured by the 1980, 1990, and 2000 decennial censuses. ", "One notable characteristic of this provision is that it did not increase spending for the rural development programs addressed in ARRA, but rather targeted existing funds differently. Given Congress's interest both in addressing poverty and being mindful about levels of federal spending, the past four Congresses included 10-20-30 language in multiple appropriations bills, some of which were enacted into law. However, the original language used in ARRA could not be used verbatim, because the data source used by ARRA to define persistent poverty\u2014the decennial census\u2014stopped collecting income information. As a consequence, the appropriations bills varied slightly in their definitions of \"persistent poverty counties\" as it was applied to various programs and departments, sometimes even within different sections of the same bill, if the bill included language on different programs. In turn, because the definitions of \"persistent poverty\" differed, so did the lists of counties identified as persistently poor and subject to the 10-20-30 provision. The bills included legislation for rural development, public works and economic development, technological innovation, and brownfields site assessment and remediation. Most recently, in the 116 th Congress, much of the language used in these previous bills was included in P.L. 116-6 (Consolidated Appropriations Act, 2019). ", "This report discusses how data source selection, and the rounding of poverty estimates, can affect the list of counties identified as persistently poor. After briefly explaining why targeting funds to persistent poverty counties might be of interest, this report explores how \"persistent poverty\" is defined and measured, and how different interpretations of the definition and different data source selections could yield different lists of counties identified as persistently poor. This report does not compare the 10-20-30 provision's advantages and disadvantages against other policy options, nor does it examine the range of programs or policy goals for which the 10-20-30 provision might be an appropriate policy tool. "], "subsections": []}, {"section_title": "Motivation for Targeting Funds to Persistent Poverty Counties", "paragraphs": ["Research has suggested that areas for which the poverty rate (the percentage of the population that is below poverty) reaches 20% experience systemic problems that are more acute than in lower-poverty areas. The poverty rate of 20% as a critical point has been discussed in academic literature as relevant for examining social characteristics of high-poverty versus low-poverty areas. For instance, property values in high-poverty areas do not yield as high a return on investment as in low-poverty areas, and that low return provides a financial disincentive for property owners to spend money on maintaining and improving property. The ill effects of high poverty rates have been documented both for urban and rural areas. Therefore, policy interventions at the community level, and not only at the individual or family level, have been and may continue to be of interest to Congress. "], "subsections": []}, {"section_title": "Defining \"Persistent Poverty\" Counties", "paragraphs": ["Persistent poverty counties are counties that have had poverty rates of 20% or greater for at least 30 years. The county poverty rates for 1999 and previous years are measured using decennial census data, and for more recent years, either the Small Area Income and Poverty Estimates (SAIPE) or the American Community Survey (ACS). The data sources used, and the level of precision of rounding for the poverty rate, affects the list of counties identified as persistent poverty counties, as will be described below. "], "subsections": [{"section_title": "Computing the Poverty Rate for an Area", "paragraphs": ["Poverty rates are computed by the Census Bureau for the nation, states, and smaller geographic areas such as counties. The official definition of poverty in the United States is based on the money income of families and unrelated individuals. Income from each family member (if family members are present) is added together and compared against a dollar amount called a poverty threshold, which represents a level of economic hardship and varies according to the size and characteristics of the family (ranging from one person to nine persons or more). Families (or unrelated individuals) whose income is less than their respective poverty threshold are considered to be in poverty. ", "Every person in a family has the same poverty status. Thus, it is possible to compute a poverty rate based on counts of persons (dividing the number of persons below poverty within a county by the county's total population, and multiplying by 100 to express as a percentage). "], "subsections": []}, {"section_title": "Data Sources Used in Identifying Persistent Poverty Counties", "paragraphs": ["Poverty rates are computed using data from household surveys. Currently, the only data sources that provide poverty estimates for all U.S. counties are the American Community Survey (ACS) and the Small Area Income and Poverty Estimates program (SAIPE). Before the mid-1990s, the only poverty data available at the county level came from the Decennial Census of Population and Housing, which was only collected once every 10 years, and used to be the only source of estimates that could determine whether a county had persistently high poverty rates (ARRA referred explicitly to decennial census poverty estimates for that purpose). However, after Census 2000, the decennial census no longer collects income information, and as a result cannot be used to compute poverty estimates. Therefore, to determine whether an area is persistently poor in a time span that ends after 2000, it must first be decided whether ACS or SAIPE poverty estimates will be used for the later part of that time span. ", "The ACS and the SAIPE program serve different purposes. The ACS was developed to provide continuous measurement of a wide range of topics similar to that formerly provided by the decennial census long form, available down to the local community level. ACS data for all counties are available annually, but are based on responses over the previous five-year time span (e.g., 2013-2017). The SAIPE program was developed specifically for estimating poverty at the county level for school-age children and for the overall population, for use in funding allocations for the Improving America's Schools Act of 1994 ( P.L. 103-382 ). SAIPE data are also available annually, and reflect one calendar year, not five. However, unlike the ACS, SAIPE does not provide estimates for a wide array of topics. For further details about the data sources for county poverty estimates, see the Appendix . "], "subsections": []}]}, {"section_title": "Considerations When Identifying and Targeting Persistent Poverty Counties", "paragraphs": [], "subsections": [{"section_title": "Selecting the Data Source: Strengths and Limitations of ACS and SAIPE Poverty Data", "paragraphs": ["Because poverty estimates can be obtained from multiple data sources, the Census Bureau has provided guidance on the most suitable data source to use for various purposes. "], "subsections": [{"section_title": "Characteristics of Interest: SAIPE for Poverty Alone; ACS for Other Topics in Addition to Poverty", "paragraphs": ["The Census Bureau recommends using SAIPE poverty estimates when estimates are needed at the county level, especially for counties with small populations, and when additional demographic and economic detail is not needed at that level. When additional detail is required, such as for county-level poverty estimates by race and Hispanic origin, detailed age groups (aside from the elementary and secondary school-age population), housing characteristics, or education level, the ACS is the data source recommended by the Census Bureau. "], "subsections": []}, {"section_title": "Geographic Area of Interest: SAIPE for Counties and School Districts Only; ACS for Other Small Areas", "paragraphs": ["For counties (and school districts) of small population size, SAIPE data have an advantage over ACS data in that the SAIPE model uses administrative data to help reduce the uncertainty of the estimates. However, ACS estimates are available for a wider array of geographic levels, such as ZIP code tabulation areas, census tracts (subcounty areas of roughly 1,200 to 8,000 people), cities and towns, and greater metropolitan areas. "], "subsections": []}, {"section_title": "Reference Period of Estimate: SAIPE for One Year, ACS for a Five-Year Span", "paragraphs": ["While the ACS has greater flexibility in the topics measured and the geographic areas provided, it can only provide estimates in five-year ranges for the smallest geographic areas. Five years of survey responses are needed to obtain a sample large enough to produce meaningful estimates for populations below 65,000 persons. In this sense the SAIPE data, because they are based on a single year, are more current than the data of the ACS. The distinction has to do with the reference period of the data\u2014both data sources release data on an annual basis; the ACS estimates for small areas are based on the prior five years, not the prior year alone. "], "subsections": []}]}, {"section_title": "Other Considerations", "paragraphs": [], "subsections": [{"section_title": "Treatment of Special Populations in the Official Poverty Definition", "paragraphs": ["Poverty status is not defined for persons in institutions, such as nursing homes or prisons, nor for persons residing in military barracks. These populations are excluded from totals when computing poverty statistics. Furthermore, the homeless population is not counted explicitly in poverty statistics. The ACS is a household survey, thus homeless individuals who are not in shelters are not counted. SAIPE estimates are partially based on Supplemental Nutrition Assistance Program (SNAP) administrative data and tax data, so the part of the homeless population that either filed tax returns or received SNAP benefits might be reflected in the estimates, but only implicitly. ", "In the decennial census, ACS, and SAIPE estimates, poverty status also is not defined for persons living in college dormitories. However, students who live in off-campus housing are included. Because college students tend to have lower money income (which does not include school loans) than average, counties that have large populations of students living off-campus may exhibit higher poverty rates than one might expect given other economic measures for the area, such as the unemployment rate. ", "Given the ways that the special populations above either are or are not reflected in poverty statistics, it may be worthwhile to consider whether counties that have large numbers of people in those populations would receive an equitable allocation of funds. Other economic measures may be of use, depending on the type of program for which funds are being targeted. "], "subsections": []}, {"section_title": "\"Persistence\" Versus Flexibility to Recent Situations", "paragraphs": ["The 10-20-30 provision was developed to identify counties with persistently high poverty rates. Therefore, using that funding approach by itself would not allow flexibility to target counties that have recently experienced economic hardship, such as counties that had a large manufacturing plant close within the past three years. Other interventions besides the 10-20-30 provision may be more appropriate for counties that have had a recent spike in the poverty rate. "], "subsections": []}, {"section_title": "Effects of Rounding and Data Source Selection on Lists of Counties", "paragraphs": ["In ARRA, persistent poverty counties were defined as \"any county that has had 20 percent or more of its population living in poverty over the past 30 years, as measured by the 1980, 1990, and 2000 decennial censuses.\" Poverty rates published by the Census Bureau are typically reported to one decimal place. The numeral used in the ARRA language was the whole number 20. Thus, for any collection of poverty data, there are two reasonable approaches to compiling a list of persistent poverty counties: using poverty rates of at least 20.0% in all three years, or using poverty rates that round up to the whole number 20% or greater in all three years (i.e., poverty rates of 19.5% or more in all three years). The former approach is more restrictive and results in a shorter list of counties; the latter approach is more inclusive. ", " Table 1 illustrates the number of counties identified as persistent poverty counties using the 1990 and 2000 decennial censuses, and various ACS and SAIPE datasets for the last data point, under both rounding schemes. The rounding method and data source selection can each have large impacts on the number of counties listed. Approximately 30 more counties appear in SAIPE-based lists compared to ACS-based lists using the same rounding method. Compared to using 20.0% as the cutoff (rounded to one decimal place), rounding up to 20% from 19.5% adds approximately 50 to 60 counties to the list. Taking both the data source and the rounding method together, the list of persistent poverty counties could vary by roughly 70 to 100 counties in a given year depending on the method used."], "subsections": []}]}]}, {"section_title": "Example List of Persistent Poverty Counties", "paragraphs": ["The list of persistent poverty counties below ( Table 2 ) is based on data from the 1990 Census, Census 2000, and the 2017 SAIPE estimates, and included counties with poverty rates of 19.5% or greater (that is, counties with poverty rates that were at least 20% with rounding applied to the whole number). These same counties are mapped in Figure 1 ."], "subsections": [{"section_title": "Appendix. Details on the Data Sources", "paragraphs": ["Decennial Census of Population and Housing, \"Long Form\" ", "Poverty estimates are computed using data from household surveys, which are based on a sample of households. In order to obtain meaningful estimates for any geographic area, the sample has to include enough responses from that area so that selecting a different sample of households from that area would not likely result in a dramatically different estimate. If estimates for smaller geographic areas are desired, a larger sample size is needed. A national-level survey, for instance, could produce reliable estimates for the United States without obtaining any responses from many counties, particularly counties with small populations. In order to produce estimates for all 3,143 county areas in the nation, however, not only are responses needed from every county, but those responses have to be plentiful enough from each county so that the estimates are meaningful (i.e., their margins of error are not unhelpfully wide). ", "Before the mid-1990s, the only data source with a sample size large enough to provide meaningful estimates at the county level (and for other small geographic areas) was the decennial census. The other household surveys available prior to that time did not have a sample size large enough to produce meaningful estimates for small areas such as counties. Income questions were asked on the census long form, which was sent to one-sixth of all U.S. households; the rest received the census short form, which did not ask about income. While technically still a sample, one-sixth of all households was a large enough sample to provide poverty estimates for every county in the nation, and even for smaller areas such as small towns. The long form was discontinued after Census 2000, and therefore poverty data are no longer available from the decennial census. Beginning in the mid-1990s, however, two additional data sources were developed to ensure that poverty estimates for small areas such as counties would still be available: the American Community Survey (ACS), and the Small Area Income and Poverty Estimates program (SAIPE). ", "American Community Survey (ACS)", "The ACS replaced the decennial census long form. It was developed to accommodate the needs of local government officials and other stakeholders who needed detailed information on small communities on a more frequent basis than once every 10 years. To that end, the ACS questionnaire was designed to reflect the same topics asked in the census long form. ", "In order to produce meaningful estimates for small communities, however, the ACS needs to collect a number of responses comparable to what was collected in the decennial census. In order to collect that many responses while providing information more currently than once every 10 years, the ACS collects information from respondents continuously, in every month, as opposed to at one time of the year, and responses over time are pooled to provide estimates at varying geographic levels. To obtain estimates for geographic areas of 65,000 or more persons, one year's worth of responses are pooled\u2014these are the ACS one-year estimates. For the smallest geographic levels, which include the complete set of U.S. counties, five years of monthly responses are needed: these are the ACS five-year estimates. Even though data collection is ongoing, the publication of the data takes place only once every year, both for the one-year estimates and the estimates that represent the previous five-year span. ", "Small Area Income and Poverty Estimates (SAIPE) ", "The SAIPE program was developed in the 1990s in order to provide state and local government officials with poverty estimates for local areas in between the decennial census years. In the Improving America's Schools Act of 1994 (IASA, P.L. 103-382 ), which amended the Elementary and Secondary Education Act of 1965 (ESEA), Congress recognized that providing funding for children in disadvantaged communities created a need for poverty data for those communities that were more current than the once-a-decade census. In the IASA, Congress provided for the development and evaluation of the SAIPE program for its use in Title I-A funding allocations. ", "SAIPE estimates are model-based, meaning they use a mathematical procedure to compute estimates using both survey data (ACS one-year data) and administrative data (from tax returns and numbers of participants in the Supplemental Nutrition Assistance Program, or SNAP). The modeling procedure produces estimates with less variability than estimates computed from survey data alone, especially for counties with small populations. ", "Guidance from the U.S. Census Bureau, \"Which Data Source to Use\" ", "The CPS ASEC provides the most timely and accurate national data on income and is the source of official national poverty estimates, hence it is the preferred source for national analysis. Because of its large sample size, the ACS is preferred for subnational data on income and poverty by detailed demographic characteristics. The Census Bureau recommends using the ACS for 1-year estimates of income and poverty at the state level. Users looking for consistent, state-level trends before 2006 should use CPS ASEC 2-year averages.", "For substate areas, like counties, users should consider their specific needs when picking the appropriate data source. The SAIPE program produces overall poverty and household income 1-year estimates with standard errors usually smaller than direct survey estimates. Users looking to compare estimates of the number and percentage of people in poverty for counties or school districts or the median household income for counties should use SAIPE, especially if the population is less than 65,000. Users who need other characteristics such as poverty among Hispanics or median earnings, should use the ACS, where and when available.", "The SIPP is the only Census Bureau source of longitudinal poverty data. It provides national estimates and since the 2004 Panel, provides reliable state-level estimates for select states. As SIPP collects monthly income over 3 or 4 year panels, it is also a source of poverty estimates for time periods more or less than one year, including monthly poverty rates.", " Table A-1 below reproduces the Census Bureau's recommendations, summarized for various geographic levels:"], "subsections": []}]}]}}
{"id": "R45148", "title": "U.S. Trade Policy Primer: Frequently Asked Questions", "released_date": "2019-01-29T00:00:00", "summary": ["Congress plays a major role in U.S. trade policy through its legislative and oversight authority. Since the end of World War II, U.S. trade policy has focused on fostering an open, rules-based global trading system, liberalizing markets by reducing trade and investment barriers through negotiations and agreements, and enforcing trade commitments and related laws. International trade and investment issues can affect the overall health of the U.S. economy and specific sectors, the success of U.S. businesses, U.S. employment opportunities, and the overall standard of living of Americans. The benefits and costs of international trade and the future direction of trade policy are active areas of interest for many in Congress.", "This report addresses frequently asked questions regarding U.S. trade policy and is intended to assist Members and staff who may be new to trade issues. The report provides context for basic trade concepts and data on key U.S. trade and investment trends. It also addresses how U.S. trade policy is formulated and describes the trade and investment policy tools used to advance U.S. objectives. The report is divided into five sections:", "The Basics of Trade explains key economic concepts, including why countries trade, the benefits and costs of trade expansion, and the role of global value chains in international trade. The section also highlights common trade terms and principles.", "U.S. Trade Trends provides data on key U.S. trade relationships, the U.S. trade deficit, and sector-specific issues related to manufacturing, agriculture, services, and digital trade.", "Formulation of U.S. Trade Policy describes key objectives and functions of trade policy. The section outlines the roles of Congress, the executive branch, private stakeholders, and the judiciary in the formulation and implementation of U.S. trade policy.", "U.S. Trade Policy Tools explains some of the key vehicles for advancing U.S. trade policy objectives, including trade negotiations and agreements, special trade programs, tariff policy and trade remedies, trade adjustment assistance, and export promotion programs and controls.", "Link Between International Investment and Trade explains the motivations of foreign direct investment (FDI) and its relationship to trade. The section provides data on top sources of FDI in the United States as well as destinations of U.S. FDI abroad, and explains the role of investment agreements and the Committee on Foreign Investment in the United States (CFIUS).", "This report is intended as an introduction to U.S. trade policy and does not provide in-depth coverage of all trade and investment issues. For more detail on U.S. trade policy issues, refer to the following CRS products:", "CRS Report R45474, International Trade and Finance: Overview and Issues for the 116th Congress, coordinated by Rebecca M. Nelson and Andres B. Schwarzenberg. CRS Report R45420, U.S. Trade Trends and Developments, by Andres B. Schwarzenberg. CRS Report R44546, The Economic Effects of Trade: Overview and Policy Challenges, by James K. Jackson. CRS Report R45243, Trade Deficits and U.S. Trade Policy, by James K. Jackson. CRS In Focus IF10156, U.S. Trade Policy: Background and Current Issues, by Shayerah Ilias Akhtar, Ian F. Fergusson, and Brock R. Williams. CRS In Focus IF11016, U.S. Trade Policy Functions: Who Does What?, by Shayerah Ilias Akhtar."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "The Basics of Trade1", "paragraphs": [], "subsections": [{"section_title": "Economics of Trade", "paragraphs": [], "subsections": [{"section_title": "Why do countries trade?", "paragraphs": ["Economics is largely the study of making the most efficient use of scarce resources. According to mainstream economic theory, trade occurs because it is mutually enriching and can leave both trade partners better off . Through trade, a country can enjoy a higher standard of living by producing those things it does efficiently and trading for things that it produces less efficiently, driven by comparative advantage (see below). This enables a country to produce more from its resources and enjoy a higher level of consumption than would be possible without trade.", "A major benefit of trade is the ability to import goods and services and boost consumer welfare. The United States imports for several reasons: some goods cannot be produced domestically in sufficient quantities to satisfy demand or would be costly to produce relative to other economic activities; other products and services are imported because they can be produced less expensively or more efficiently by foreign firms. Because of global value chains, many U.S. imports contain U.S.-made components (e.g., semiconductors in a computer) or U.S.-grown raw materials (e.g., cotton used to make t-shirts). Through trade, consumers can access a greater variety of goods at lower cost. Trade improves consumer purchasing power, particularly for lower-income households that spend a greater share of income on imported goods like clothing. These factors also help control the rate of inflation. ", "Through trade, producers can access lower-cost inputs used in production and exports, which can improve global competitiveness. Overseas markets for exports provide opportunities for domestic firms to exploit economies of scale\u2014expanding production to reduce average costs and take advantage of increasing returns to scale. In the long term, trade leads to greater competition and can pressure firms to innovate and invest in research and development (R&D), supporting increased productivity and economic growth. "], "subsections": []}, {"section_title": "What is comparative advantage?", "paragraphs": ["Economist David Ricardo developed the idea of comparative advantage in the early 19 th century, and the theory's insights remain relevant to explaining how countries trade today. Ricardo argued that specialization and trade are mutually beneficial even if a country is more efficient than its trading partners at producing all goods: a country has absolute advantage if it produces a given good at a lower cost than another country. But Ricardo argued that because resources, particularly labor, are (assumed to be) immobile between countries, a comparison of a good's absolute cost of production in each country is less relevant for determining whether specialization and trade should occur. Instead, what matters is the opportunity cost \u2014how much output of good Y must be forgone to produce one more unit of good X. If the opportunity costs of producing the two goods differ in each country, then each has a comparative advantage in one of the goods. Ricardo predicted that a country can realize gains from trade by specializing in goods that it can produce relatively well (and in which it has a comparative advantage) and then trading those for goods that it produces relatively less well (and in which it has a comparative disadvantage). ", "Subsequent economic theories have expanded on and qualified the theory of comparative advantage. Economists continue to examine to what extent comparative advantage explains the increasingly complex trade patterns in the 21 st century with the rise of global value chains\u2014where different stages of production of a single good take place in several countries\u2014and with the rise of services and digital trade, and cross-border flows of data and technology."], "subsections": []}, {"section_title": "What determines comparative advantage and specialization in trade?", "paragraphs": ["Differences in comparative advantage between countries may arise and evolve because of differences in the relative abundance of factors of production\u2014so-called factor endowments \u2014such as labor, physical capital (plants and equipment), human capital (skills and knowledge, including entrepreneurial talent), as well as technology. Economic theory predicts that a country will have comparative advantage in activities that make intensive use of the country's relatively abundant factors of production. For example, compared to other countries, the United States has relative abundance of high-skilled labor and relative scarcity of low-skilled labor. Thus, U.S. comparative advantage is expected in the production of goods that use high-skilled labor intensively, such as aircraft rather than apparel. In addition, differences in productive technology among countries can affect relative efficiency and may be a basis for comparative advantage. The information and communications technology (ICT) revolution and new platforms for digital trade have broken down some barriers to technology and knowledge-flows across countries. "], "subsections": []}, {"section_title": "Can governments shape or distort comparative advantage?", "paragraphs": ["Governments can potentially influence comparative advantage through certain policies that either indirectly nurture comparative advantage (often by compensating for market failures, but not targeted at a specific industry or activity) or directly nurture advantages in particular industries (often called industrial policy). For example, indirect influence can include policies that aim to eliminate corruption, enforce property rights, liberalize trade and foreign investment barriers, build transport and communication infrastructure, and support mass education. More direct influence can include policies (such as subsidies or tariffs) that promote and protect certain industries considered to have significant strategic and economic potential but that require initial government support to help a country reach its economic targets. There has been a broad debate on the impact and effectiveness of such targeted policies. Some economists contend that protectionist policies that arise through direct policy interventions can potentially distort a country's trade and investment flows, reduce economic efficiency, or undermine the development of competitive industries that do not receive support."], "subsections": []}, {"section_title": "What is intra-industry trade?", "paragraphs": ["A sizable portion of global trade occurs via countries exporting and importing goods within the same industry to each other\u2014called intra-industry trade. This type of trade is particularly characteristic of the large flows of products between advanced economies, which have similar resource endowments and levels of development. These trade patterns suggest that there is another basis for trade, other than comparative advantage: the use of economies of scale or increasing returns to scale . Economies of scale exist when a production process is more efficient (i.e., has lower unit costs) the larger the scale at which it takes place. While the United States and Germany, for example, could be equally proficient at producing a wide array of goods such as autos and pharmaceuticals, neither has the productive capacity to produce the full range of goods optimally. Therefore, a pattern of specialization tends to occur with countries producing and trading some sub-set or \"niche\" of these goods."], "subsections": []}]}, {"section_title": "Trade, Jobs, and Wages", "paragraphs": [], "subsections": [{"section_title": "What are the benefits and costs of trade expansion?", "paragraphs": ["From a broad perspective of the U.S. economy as a whole, trade is one of a number of forces that drive changes in employment, wages, the distribution of income, and ultimately the standard of living. There is a broad consensus that trade overall has a net positive effect on a country's economic well-being. Trade benefits can include the more efficient use of resources, greater competition, economies of scale, and consumption gains through lower prices and more choices for consumers. Increases in trade can boost GDP because of the increased competition, efficiency gains, and consumer welfare increases. According to the World Bank, liberalizing trade and investment globally has reduced the number of people in extreme poverty by half over the past 25 years. However, the benefits from trade are not necessarily distributed evenly within an economy. Trade can disrupt some sectors, and the costs, such as job losses and stagnant wages, may be concentrated in certain regions and import-sensitive industries. The economic impact of trade on jobs and wages is widely debated because there are numerous factors that impact jobs, including changes to technology. ", "While economic analyses indicate that economy-wide gains from trade generally exceed the costs, the difficult policy issue is how to reap these gains while dealing equitably with those hurt by the process. Economists argue that policies that facilitate the adjustment and compensate for the losses of those harmed by market forces, including trade, are economically less costly than protective policies that insulate workers and industries from trade and greater competition. In addition, from a political standpoint, experts also view adjustment assistance for those who are potentially displaced as an important factor for maintaining political support for free trade. Policymakers continue to debate the effectiveness of existing policies that help communities affected by trade; in the United States, many experts conclude they have been inadequate."], "subsections": []}, {"section_title": "Does trade cause job loss in the United States?", "paragraphs": ["Trade \"creates\" and \"destroys\" jobs in the economy\u2014often called \"job churn\"\u2014just as other market forces, such as technological change, do. Trade can have different effects on workers in different occupations, which some economists call \"occupational exposure\" to trade. Such disruptions can also occur through domestic trade when firms relocate from one state to another for various economic reasons. As a result, trade liberalization can have a different effect not only between sectors of the economy, but also within the same industry. Economy-wide, trade causes jobs to shift into industries in which a country has comparative advantage and away from industries with comparative disadvantage. In the process, the composition of employment may change, but there may not be a net loss of jobs. Estimates suggest that job loss attributed to trade is a small share of jobs lost economy-wide each year\u2014one study finds that between 2001 and 2016 more than 150,000 U.S. net jobs were lost annually due to expanded trade in manufactured goods, which accounted for 1% of workers laid off in a typical year. While some jobs might be displaced, some workers are likely to be reemployed elsewhere. On the other hand, some estimates find that the short-run costs to workers attempting to switch occupations or industries to obtain new jobs due to trade liberalization may be \"substantial,\" including reduced wages. Studies suggest that increased import competition from China in particular negatively affected U.S. local labor markets and manufacturing jobs. ", "Most economists argue, however, that equating net imports\u2014or importing more than exporting, known as a trade deficit\u2014with a specific amount of unemployment in the economy is questionable given the underlying drivers of the trade deficit (see \" What is the trade deficit? \"). Historically, during periods of economic growth, U.S. global trade has also expanded. The U.S. trade deficit and unemployment rate have generally moved in tandem (see Figure 1 )\u2014GDP growth reduces the number of unemployed while increasing aggregate demand, including for imports as well as attracting increased capital inflows, which often leads to an increased trade deficit."], "subsections": []}, {"section_title": "Does trade reduce the wages of U.S. workers?", "paragraphs": ["International trade can positively and negatively affect the wages of workers. Several studies have examined this relationship. There is no overall consensus on the impact of trade and trade agreements on wages of U.S. workers (which have been relatively stagnant for decades) and income inequality in the United States (which has also deepened). Many studies have found that other factors, such as technological change, have had a significantly larger effect on relative wages.", "In economic theory, trade tends to increase the return to the abundant factors of production\u2014capital and high-skilled workers in the United States\u2014and to decrease the return to less-abundant factors\u2014low-skilled labor in the United States. Therefore, other factors held constant, a large increase in imports, particularly from economies with vast supplies of low-skilled labor such as China, could negatively affect wages of low-skilled U.S. workers in import-sensitive industries (even though they too benefit from lower-priced imports from China). U.S. low-skilled workers have increasingly faced competition from lower-cost producers, largely in developing countries. The growth of global value chains has led some U.S. multinational corporations (MNCs) to shift low-value, labor-intensive production overseas. On the other hand, MNCs may keep or expand production in the United States or retain the high-end services aspects of their businesses; such jobs often require high levels of education and skills. In addition, U.S. workers in export-oriented industries earn, on average, more than workers in non-exporting industries. The U.S. International Trade Commission (ITC) estimated, on average, a 16% earnings premium in export-intensive manufacturing industries and 15.5% premium in services. "], "subsections": []}]}, {"section_title": "Economic Globalization", "paragraphs": [], "subsections": [{"section_title": "What is economic globalization?", "paragraphs": ["In general, economic globalization broadly refers to the increasing integration of national economies around the world, particularly through trade and financial flows. Economic globalization involves trade in goods and services, capital flows and trade in assets (e.g., currency, stocks), the transfer of technology and ideas, and international flows of labor or migration. There have been several periods of economic globalization; some experts also contend there have been periods of deglobalization\u2014the slowdown or reverse of globalization.", "Scholars have dated the start of the most recent period of economic globalization to sometime in decades following World War II. From 1960 to 2017, global trade as a percentage of global GDP increased from 25% to 57%. In the post-World War II period, global trade grew consistently faster than GDP (though this trend has not held in recent years). The stock of global foreign direct investment (FDI) grew from 6% of global GDP in 1980 to 39% in 2017. The growing integration of the world economy has been facilitated by myriad technical advances in transport and communication, which have significantly reduced natural geographic barriers that separate economies. In addition, both domestic and multilateral policies have steadily lowered man-made barriers to international exchange since World War II (such as tariffs, quotas, subsidies, immigration regulations, and capital controls). While most economists argue that globalization has lifted living standards worldwide, an ongoing debate remains regarding the extent to which greater economic integration has been inclusive, benefited some groups more than others, and contributed to inequality within countries. "], "subsections": []}, {"section_title": "What are global value chains and how to they relate to globalization?", "paragraphs": ["A global value chain (GVC) is the interrelated organizations, resources, and processes that create and deliver a product to the final consumer. GVCs, organized mostly by multinational corporations (MNCs), mean that products once produced in one country may now be produced by assembling parts and components produced in several countries, often traded across borders multiple times. More than half of global manufacturing imports are intermediate goods traveling within supply chains, while over 75% of global services imports are intermediate services. The latest data from the Organization for Economic Cooperation and Development (OECD) suggests that, on average, more than a quarter of the value of national exports included foreign content in the form of imported inputs. For the United States, the foreign value-added share in U.S. exports increased in most industries from 1995 to 2011 (most recent data available) (see Figure 2 ).", "GVCs have been an important driver of globalization and are considered the \"backbone of the global economy.\" The international fragmentation of production has raised the level of trade associated with a particular final product, as well as trade with advanced economies/emerging markets and developing countries. The growth of GVCs has helped facilitate lower trade barriers and technological advances, making international transport faster and accelerating the flow of information across borders. These linkages have blurred the distinction between exports and imports as strictly domestic or foreign activities. This, in turn, has made it increasingly difficult to understand who benefits from global trade and complicated the interpretation of bilateral trade balances. Trade in intermediates means that imports have become essential inputs into the production of exports; as a result, policies that affect a nation's imports ultimately affect its exports and vice versa. Analysts point to several fundamental shifts in GVCs as they continue to evolve that are likely to shape the latest wave of globalization and future policy challenges."], "subsections": []}, {"section_title": "What is the relationship between trade and foreign direct investment?", "paragraphs": ["Trade and investment flows are complements, and foreign direct investment (FDI) is considered to be a major driver of trade. FDI is a type of cross-border capital flow, which takes place when a resident of one country (including a company) obtains a lasting interest in\u2014and a degree of influence over\u2014the management of, a business enterprise in another country. FDI has supported the development of global value chains by multinational corporations (MNCs), which source production globally. As a result, the majority of trade takes place within MNCs that send components to and from locations at home and abroad to transform into final products. FDI has thus supported the significant expansion of inter- and intra-firm trade, which represents trade between parent companies and their foreign affiliates, and trade between affiliates of foreign firms and the foreign parent company (see \" Link Between International Investment and Trade \"). ", "A predominant reason U.S. firms make investments abroad is to sell goods and services to foreign markets. Many firms want to maintain operations close to their customers to gauge preferences and tastes that may differ from U.S. consumers (e.g., SUVs preferred in the United States versus small cars in Japan). According to the latest data on activities of U.S. multinationals, in 2016, 11% of the sales of U.S. foreign affiliates went to U.S. parent companies, while 59% of sales went to the local market of the host country and 30% went to other foreign countries (see Figure 3 ). However, some firms may also establish operations abroad to replace exports or production, or to gain access to raw materials or less expensive labor abroad. Foreign firms may invest in the United States to access the U.S. consumer market, high-skilled labor, and other resources. "], "subsections": []}, {"section_title": "How does globalization affect jobs?", "paragraphs": ["Greater global integration through trade and investment flows, combined with specialization in certain stages of production, can disrupt markets. This disruption may create concerns about \"offshoring\" or \"outsourcing,\" the shift of manufacturing and business functions to countries with lower labor costs. For example, some U.S. multinational corporations (MNCs) focus on high-end activities associated with innovating products, such as research and development (R&D), while outsourcing production of components and final product assembly to suppliers and locations abroad. Although most economists maintain that globalization and trade liberalization are unlikely to affect the overall U.S. employment rate, greater volatility of U.S. worker incomes and employment in some sectors are possible effects. For example, the shifting of manufacturing assembly abroad may reduce the number of U.S. manufacturing jobs in some industries but boost the number of service-related jobs in others. ", "Another issue is the impact of globalization on wealth distribution; for example, through dampening wages for U.S. lower-skilled workers facing greater foreign competition compared to higher-skilled workers, or through higher returns to capital over labor. In one study, the OECD concluded that \"in advanced economies, at least 10% of the decline of the labour share [in total national income] is accounted for by increasing globalisation\u2014and in particular by the pressures from the delocalisation of some parts of the production chain as well as from import competition from firms producing in countries with low labour cost.\" A range of studies suggests that within the United States, globalization has contributed marginally to rising U.S. wage inequality at a factor ranging from 10% to 20%."], "subsections": []}]}, {"section_title": "Key Trade Terms and Principles", "paragraphs": [], "subsections": [{"section_title": "What is most-favored-nation (MFN) treatment?", "paragraphs": ["Most-favored-nation treatment (MFN) is the fundamental principle of nondiscrimination in the multilateral trading system. MFN requires World Trade Organization (WTO) members to grant each other member country treatment at least as favorable as it grants to its most-favored trade partner\u2014in other words, every member must treat all members equally. For example, if a country grants a trade benefit or concession to one country, such as lower tariffs, it would have to extend the same benefit to all other members. There are a number of permitted exceptions to MFN treatment, however. For example, countries can establish trade agreements with one another outside of the WTO, granting additional preferences to those in the agreement, provided certain conditions are met. In addition, more favorable treatment can be given to developing countries, often called \"special and differential treatment.\""], "subsections": []}, {"section_title": "What is national treatment?", "paragraphs": ["National treatment is another fundamental principle of nondiscrimination in the multilateral trading system. It obligates each trading partner not to discriminate between domestic and foreign products. In other words, once an imported product enters a country, it must be treated no less favorably than a \"like\" product produced domestically. The same concept is also applied to foreign and domestic services and intellectual property rights."], "subsections": []}, {"section_title": "What is Permanent Normal Trade Relations (PNTR) status?", "paragraphs": ["\"Most-favored nation\" (MFN) trade status, called permanent normal trade relations (PNTR) in U.S. law, denotes nondiscriminatory treatment of a trading partner. According to U.S. Customs and Border Protection, Cuba and North Korea do not have PNTR with the United States. Other countries at times have received temporary or conditional NTR status before graduating to PNTR. In practice, imports from countries with NTR status face lower duty rates than imports from countries without that status. Title IV of the Trade Act of 1974 prohibits the President from granting PNTR status to any country not receiving such treatment at the time of the law's enactment in January 1975 (in effect, the majority of then-communist countries). The so-called, Jackson-Vanik amendment further denies PNTR status for countries that deny citizens freedom of emigration (subject to presidential waiver). As a WTO member, the United States is required to extend MFN treatment \"immediately and unconditionally\" to all WTO members. Thus upon accession to the WTO for countries like China (joined in 2001), Vietnam (2007), and Russia (2012) for example, PNTR had to concurrently be established under U.S. law for the United States to receive the full benefits of their membership. "], "subsections": []}, {"section_title": "What is the Harmonized Tariff Schedule of the United States?", "paragraphs": ["The Harmonized Tariff Schedule of the United States (HTSUS) determines the tariffs (also known as duties) that are imposed on imported goods. The HTS uses a structure of tariff classification, based on standard commodity codes and descriptions developed by the World Customs Organization (WCO), the so-called Harmonized System (HS). The HS groups 1,200 product headings into 96 chapters. Each heading is divided into product subheadings at the four-digit and six-digit levels, for a total of 5,000 separate groups of goods at the 6-digit level, with harmonized digit and category descriptions. In other words, the higher the digits the more detailed the product category. For example, the 2-digit chapter 08 stands for \"edible fruits and nuts.\" Within that chapter, \"citrus fruits\" are identified by the 4-digit HS code 0805; and within that subheading, \"oranges\" are identified by 6-digit HS code 0805.10. HS codes are standard worldwide up to the 6-digit level. The HTSUS further subdivides each product subheading into 8-digit and 10-digit tariff lines that are unique to the United States. The U.S. International Trade Commission publishes the HTS and keeps it up to date. U.S. Customs and Border Protection is responsible for interpreting and enforcing the tariff code. "], "subsections": []}, {"section_title": "What are rules of origin?", "paragraphs": ["Rules of origin (ROO) determine the \"nationality\" of imported products. ROO are important for several reasons, including determining admissibility of imports, assessing duty rates, and establishing eligibility for preferential trade programs and free trade agreements (FTAs). Determining a product's origin can be relatively straightforward if the product's raw materials and parts are manufactured and assembled in a single country. However, in today's global economy, determining origin can be complex because goods such as autos, computers, and clothing are assembled with parts sourced from many countries.", "The United States negotiates different ROO within its FTAs to ensure that only eligible trading partners receive the agreement's tariff benefits. But some rules may also be crafted to limit the impact of liberalized trade on import-sensitive industries. For example, the \"yarn-forward\" rule requires that all yarn and fabric used in most apparel must come from FTA partners themselves, in addition to the assembly process. Some in Congress with retailers in their districts argue that the yarn-forward rule is relatively strict compared to the rules negotiated by other countries; others with textile interests maintain that the rule is crucial for the survival of the U.S. industry."], "subsections": []}]}]}, {"section_title": "U.S. Trade Trends53", "paragraphs": [], "subsections": [{"section_title": "The Role of Trade in the U.S. and Global Economy54", "paragraphs": [], "subsections": [{"section_title": "How important is trade to the global economy?", "paragraphs": ["Global trade is an important engine of the global economy\u2014trade as a share of global GDP has risen from 25% in 1960 to about 57% in 2017. Greater openness to trade and trade reforms worldwide have been linked to higher growth in productivity and real incomes, as well as reduced poverty worldwide. For decades since World War II, annual real global trade growth outpaced GDP growth, growing on average 1.5 times faster (see Figure 4 ). This trend has not held in recent years as the global economy recovered from the financial crisis in 2008; 2016 marked the slowest pace of trade growth since 2009. Weakened trade growth in previous years had been attributed to several factors, including weak import demand, exchange rate fluctuations, and falling commodity prices. The slowdown in investment and China's rebalancing toward a consumption-driven economy were seen as major structural factors, while others considered growing trade protectionism to be an important factor. ", "Trade growth has since rebounded, increasing from 2% in 2016 to above 5% in 2017\u2014the strongest rate since 2011, driven mainly by cyclical factors, in particular increased investment and consumption expenditure. With the improving global economic outlook, the IMF and the WTO had projected a rebound in trade growth for 2018 and 2019. Amid several downside risks, including rising trade tensions between major economies like the United States and China, and heightened trade policy uncertainty, the IMF and WTO now expect global trade growth to slow. Restrictive trade policy measures imposed by the United States and some of its major trading partners may be affecting trade flows and prices in targeted sectors. Analysts claim that some recent policy announcements also have harmed businesses' outlooks and investment plans, due to heightened concern over possible disruptions to supply chains and the risks of potential increases in the scope or intensity of trade restrictions. "], "subsections": []}, {"section_title": "What countries are the largest global trading economies?", "paragraphs": ["In 2017, the top-five largest trading economies (in terms of the value of goods and services trade) were the United States, China, Germany, Japan, and the United Kingdom (see Table 1 ). However, if the 28 EU members are treated as a single trading bloc, the EU would be the largest trading economy, with extra-EU trade of $6.0 trillion. China was the largest exporter, while the United States was the largest importer. In goods trade, the United States was the largest importer and second-largest exporter (behind China). In services trade, the United States was both the largest importer and exporter. The U.S. share of global goods exports fell from 15% in 1960 to 9% in 2017, largely due to the rapid increase of global trade, especially among developing countries and emerging markets. The U.S. export share of global services is 14%.", "In 2017, U.S. exports and imports of goods and services combined were equivalent to 27% of GDP. Although the United States is a major global trader, the size of trade relative to the size of the U.S. economy is smaller compared to other major trading economies. Various organizations have developed indexes to assess the \"openness\" or \"competitiveness\" of the U.S. economy relative to other economies. The United States ranked first out of 140 economies in the World Economic Forum's (WEF's) latest \"Global Competitiveness Index.\" "], "subsections": []}, {"section_title": "How important is trade to the U.S. economy?", "paragraphs": ["In 2017, the United States exported $2.4 trillion in goods and services and imported $2.9 trillion. Over the past decade, U.S. exports have grown more than 40%, while U.S. imports have grown more than 20%. Since 1960, trade relative to GDP has risen markedly (see Figure 5 ). U.S. exports as a percent of GDP expanded from 5% in 1960 to 12% of GDP in 2017, while U.S. imports expanded from 4% to 15% of GDP. "], "subsections": []}, {"section_title": "What countries are the top U.S. trade partners?", "paragraphs": ["In 2017, China was the top U.S. trading partner, with $712 billion in total goods and services trade, followed by Canada, Mexico, Japan, and Germany (see Figure 6 ). China was the largest source of U.S. imports, while Canada was the largest destination for U.S. exports. However, considering the 28 EU member states as a single trading partner, the EU is both the largest export destination and source of imports for the United States. The majority of U.S. global trade, about 65%, is with countries with which the United States does not have a free trade agreement. (See \" How many free trade agreements (FTAs) does the United States have? \")"], "subsections": []}, {"section_title": "How do global value chains complicate interpretation of U.S. trade data?", "paragraphs": ["Today, multinational corporations (MNCs) produce worldwide, using inputs designed and produced by many countries; as a result, the \"value added\" occurs through multistage production processes and services. The growth of global value chains, intra-firm trade, and trade in intermediate goods has made it increasingly difficult to interpret the implications of trade data for the U.S. economy. Traditional trade statistics, which attribute the value of an import or export to a single country, do not fully reflect the source of resources used in producing goods and services, or who ultimately benefits from that trade. ", "To illustrate, products of the U.S. firm Apple, such as iPhones, are developed in the United States but assembled in China using imported components from several countries. When the United States imports iPhones, it attributes the full value of those imports as occurring in China, even though the value added in China is quite small. Apple is the largest beneficiary in terms of the profits generated by the sale of its products; most of the product design, software development, product management, marketing, and other high-wage functions and employment occur in the United States. In this case and many others, U.S. imports from China in fact comprise imports from many countries, but the full value of the final imported product is attributed to China. This results in what might be considered an inflated bilateral trade deficit between the two countries. \"Trade in value-added\" (or TiVA, a joint initiative by the OECD and WTO) is a broad measure that attempts to identify the origin of the value added of goods and services according to the country where that value was added. According to TiVA estimates, the U.S trade deficit with China would have been reduced by one-third in 2011 if bilateral trade flows had been measured this way. "], "subsections": []}]}, {"section_title": "The U.S. Trade Deficit", "paragraphs": [], "subsections": [{"section_title": "What is the trade deficit?", "paragraphs": ["The \"trade deficit\" generally is used to refer to three things: the balance of trade in goods, balance of trade in goods and services, and balance on the current account. The trade balance is the difference between a country's exports and imports of goods and services; this applies to each bilateral trading relationship, as well as to the aggregate across all trading partners. A deficit occurs when a country imports more than it exports. A trade deficit is an indicator that a nation consumes more than it produces and does not save enough domestically to fund its investment needs (see below). The United States has run trade deficits annually for most of the post-WWII period. In 2017, the United States had a global trade deficit in goods and services of $552.3 billion. The deficit is driven by goods trade\u2014the U.S. trade deficit in goods was $807.5 billion (down from a peak of $837.3 billion in 2006) (see Figure 7 ). A large and growing level of U.S. trade is in services, where the United States usually runs annual surpluses, exporting more than it imports. In 2017, the U.S. services trade surplus was $255.2 billion. ", "The broadest measure of a country's trade balance is the current account, which includes trade in goods, services, net income (payments and receipts on foreign investments), and some official, or government, flows. The United States has experienced an annual current account deficit since the mid-1970s. In 2017, the United States had a $449.1 billion current account deficit, down from its historic peak of $806 billion in 2006. The shrinking deficit was largely due to the economic slowdown following the global financial crisis in 2008, which significantly reduced U.S. (and global) demand for imports, and the decline of commodity prices and U.S. oil imports in the wake of the shale oil and gas boom."], "subsections": []}, {"section_title": "Why does the United States run a trade deficit?", "paragraphs": ["Put simply, the U.S. global trade deficit reflects that the United States consumes more than it produces and imports more than it exports. Most economists argue that the trade deficit stems largely from U.S. macroeconomic policies, primarily an imbalance between domestic savings and total investment in the economy. The most significant cause of the trade deficit is the low rate of U.S. domestic savings by households, firms, and the government relative to its investment needs. To make up for that shortfall, Americans must borrow from countries abroad (such as China) with excess savings. Such borrowing enables Americans to enjoy a higher rate of economic growth than would be obtained if the United States had to rely solely on domestic savings. This boosts U.S. consumption and demand for imports, producing a trade deficit. A number of other factors can affect the size of the U.S. trade deficit in the short run, such as differences in economic growth between countries. The role of the dollar is also an important factor in sustaining the U.S. trade deficit. As a de facto global reserve currency, the U.S. dollar facilitates the trade deficit by broadening the availability of dollars and dollar-denominated assets. Foreign investors seek dollar-denominated assets as safe-haven assets, especially during times of economic stress. As long as foreigners (both governments and private entities) are willing to loan the United States the funds to finance the lack of savings in the U.S. economy, such as through buying U.S. Treasury securities, the trade deficit can continue. "], "subsections": []}, {"section_title": "How significant is the size of the U.S. trade deficit, and how does it compare with other major economies?", "paragraphs": ["The U.S. trade deficit relative to the size of the economy provides a metric to examine trends over time and compare with other countries. The U.S. current account deficit relative to GDP reached a historic high of 5.8% of GDP in 2006, but it has declined since to 2.3% of GDP in 2017\u2014consistent with the average trend in the mid-1980s (see Figure 8 ). Table 2 shows current account balances as a percentage of GDP for selected economies, as well as ratios of gross domestic savings to total investment. A ratio below 100 indicates savings are not enough to meet investment needs\u2014such countries, including the United States, are net borrowers and typically run current account deficits. Among selected countries, as of 2017, the United Kingdom, Canada, and the United States had the largest current account deficits as a percent of GDP, while the countries with the largest current account surpluses included the Netherlands, Germany, and South Korea."], "subsections": []}, {"section_title": "What role do foreign trade barriers play in causing trade deficits?", "paragraphs": ["Some policymakers view the size of U.S. bilateral trade deficits with certain countries\u2014such as China, the largest single source of the U.S. overall trade deficit\u2014as an indicator that the trade relationship is \"unfair\" and the result of market-distorting trade policies, such as trade barriers, subsidies, and discriminatory regulations. Such policies may potentially affect the volume of bilateral trade in specific products and with particular countries, but they have less effect on the size of the global U.S. trade deficit, which is largely a reflection of the low level of U.S. savings. The evidence suggests that high tariffs and trade barriers are not correlated with smaller overall trade deficits. If protectionist trade measures were reduced in certain countries, U.S. exporters might sell more products. However, if U.S. overall consumption and savings behavior did not change, increased demand for imports would leave the overall U.S. trade deficit relatively unchanged, all things held equal. Similarly, the reduction or imposition of protectionist trade measures in one country might simply result in trade diversion, the shifting of trade from one country to another, and do little to change the overall trade deficit. ", "Bilateral trade balances provide a useful snapshot of the U.S. trade relationship with a particular country, but they are influenced by various factors beyond trade barriers including: the overall level of economic development and relative rates of economic growth, abundance of raw materials, and rates of technological change. Moreover, bilateral trade deficits with certain trading partners often marks complex supply chain relationships, where one country (such as China) is the final point of assembly for products (such as iPhones) or a supplier of inputs and components, where the added value that occurred in one country is relatively small compared to the value that occurred in other parts of the supply chain."], "subsections": []}, {"section_title": "How does the trade deficit affect the exchange value of the dollar?", "paragraphs": ["Without sufficient inflows of capital, a trade deficit causes other parts of the economy to adjust, in particular a country's exchange rate (e.g., the value of the dollar relative to the yen or euro). Net imports cause a surplus of U.S. dollars to flow abroad. If converted to other national currencies, the dollar's excess supply tends to lower its value relative to other currencies. In practice, this should make imports more expensive for Americans and exports cheaper for foreign buyers, gradually leading to a smaller trade deficit. However, the dollar holds a special status in global financial markets; countries use the dollar both as a medium of exchange and reserve currency. The U.S. economy is a safe haven for storing wealth and an attractive destination for investments, especially for countries with high savings rates, like China. When foreigners exchange their currency for U.S. dollars to buy U.S. Treasury securities, for example, the dollar appreciates, which makes U.S. exports more expensive. In addition, foreign governments (with large domestic savings) have intervened to keep the value of their currency from appreciating relative to the dollar by buying dollars and investing them back in the United States. Some analysts contend that past intervention in currency markets by China and other countries seeking to hold down the value of their currencies in order to boost exports has hampered the realignment of global trade balances."], "subsections": []}, {"section_title": "Is the trade deficit a problem for the U.S. economy?", "paragraphs": ["As discussed, trade deficits reflect the savings/investment shortfall, which means the United States is borrowing from abroad. One major concern is the debt accumulation from sustained trade deficits. Ultimately, whether borrowing to finance imports is worthwhile depends on whether those funds are used for greater investments in productive capital with high returns that raise future standards of living, or whether they are used for current consumption. If U.S. consumers, business, and the government are borrowing to finance new technology, equipment, or other productivity-enhancing products, borrowing results in a deficit and can be paid off because such investments are expected to result in a higher long-run economic growth. However, borrowing to finance consumer purchases (e.g., clothes, household electronics) pushes repayment to future generations, without investments to raise the ability to finance those repayments. Some economists also warn that under certain circumstances, a rising U.S. trade deficit could spark a large and sudden fall in the value of the dollar, risking financial turmoil in the United States and abroad. For example, foreigners could lose faith in U.S. ability to honor its debt or no longer see the United States as an optimal place to invest in. ", "Many economists argue that attempting to reduce the U.S. trade deficit without addressing the underlying macroeconomic imbalances could negatively affect the economy, including reducing economic growth, and do little to affect the trade balance in the long run. The current account deficit could be reduced by boosting domestic savings (i.e., reducing domestic consumption and government budget deficits) or reducing foreign investment (i.e., reducing borrowing from abroad). Realigning exchange rates through the depreciation of the dollar, or ensuring other countries are not intervening in the market to artificially devalue their currencies, is another means. Trade policies are generally not viewed as the most effective policy tools for affecting the overall trade balance."], "subsections": []}]}, {"section_title": "Sector-Specific Issues in U.S. Trade", "paragraphs": [], "subsections": [{"section_title": "How important are manufactured goods in U.S. trade?", "paragraphs": ["In 2017, the United States exported $1.3 trillion in manufactured goods and imported $2.0 trillion, creating a merchandise trade deficit of $698 billion (see Figure 9 ). U.S. manufactures exports accounted for 56% of total U.S. exports of goods and services and 70% of total U.S. imports of goods and services. Manufactures share of U.S. exports fell 4 percentage points over the past decade, as the services export share expanded; manufactures share of U.S. imports expanded by 4 percentage points. Top U.S. exports and imports by subsector included transportation equipment, computer and electronic products, chemicals, and machinery."], "subsections": []}, {"section_title": "Is the U.S. manufacturing sector shrinking due to increased trade?", "paragraphs": ["The growth of global value chains has transformed U.S. manufacturing in certain industries, with the expansion of production that requires advanced technology but relatively less labor. As a result, for many products, labor-intensive activities like assembly have moved abroad, while activities such as design, product development, and distribution increasingly drive the manufacturing process. Reports of some factory closings and layoffs, such as at the Carrier plant in Indiana and GM factories in the Midwest, and labels indicating merchandise made in China, Mexico, or other countries, have reinforced the perception that the U.S. manufacturing sector is shrinking. Many consider relative changes in output and employment, among other metrics, to examine the health of the sector (see Figure 10 ). Such data paint a mixed picture. The United States has seen a long-term decline in employment in manufacturing. At the same time, manufacturing output has increased, reflecting increased productivity, with fewer workers needed for a given level of production. While the sector's importance relative to the economy and relative to services has declined, manufacturing remains a significant component of the U.S. economy. To summarize:", "From 1980 to 2017, U.S. manufacturing real output increased more than 80%; since 2009, it increased by about 20%. At the same time, value-added of manufacturing as a share of GDP decreased, accounting for 11% of GDP in 2017 compared to 21% in 1980, just as value-added of services increased from 55% to 70% of GDP. U.S. employment in manufacturing, which peaked at 19.4 million in 1979, fell by more than one-third to 12.4 million in 2017. Despite this long-term trend, the level of employment has risen each year since 2010. In 2017, employment in manufacturing accounted for 8.5% of total nonfarm employment, compared to 20.7% in 1980; the services share expanded by 20 percentage points over the same time period. Business services employment within manufacturing has also increased in recent years.", "Falling employment and the declining importance of physical production in the manufacturing process are not unique to the United States and have occurred in most advanced economies. Although some changes in the sector may be a result of factors specific to the United States, others may be due to changes related to technology, consumer preferences, or broader macroeconomic factors. The role of trade has been widely debated. Some estimate that increased imports from China contributed to the steep decline in U.S. manufacturing employment in the 2000s; others estimate that job loss in manufacturing was substantially offset by job gains in services due to the expansion of U.S. exports globally. Others contend that trade has played a less dominant role compared to automation and other factors. Taking a broader view, a fundamental restructuring of the U.S. manufacturing sector was underway for more than two decades prior to China joining the World Trade Organization (WTO). ", "Measuring manufacturing activity can be challenging, and existing data may not fully capture how manufacturing has changed, the sources of employment, and how value is created (see above). Manufacturing remains a significant component of the U.S. economy by many measures: U.S. manufacturers account for nearly 70% of all private-sector research and development (R&D), and nearly 60% of U.S. exports. While the U.S. share of global manufacturing value-added has declined, the United States remains a top global manufacturer."], "subsections": []}, {"section_title": "How important are agricultural goods in U.S. trade?", "paragraphs": ["In 2017, the United States exported $138 billion in agricultural goods and imported $121 billion, creating a trade surplus of $17 billion (see Figure 9 ). U.S. agricultural exports accounted for 6% of total U.S. exports of goods and services and 4% of total U.S. imports. Agriculture's share of U.S. exports has fallen slightly below the average of 8% over the past decade, while the import share remains on trend. Although small relative to trade in manufactured goods, trade remains a significant component of the U.S. agricultural sector, with exports accounting for about 20% of total farm production by value. Foreign markets are a major outlet for many agricultural goods; for example, wheat and cotton rely on other countries for absorbing over half of U.S. output. According to the U.S. Department of Agriculture, imports of certain products, such as coffee, cocoa and spices, fish, and juices, accounted for a large share of U.S. food consumption in recent years."], "subsections": []}, {"section_title": "What is trade in services, and how is it different from goods trade?", "paragraphs": ["\"Services\" refers to an expanding range of economic activities, such as audiovisual, construction, computer and related services, energy, express delivery, e-commerce, financial, professional, retail and wholesaling, transportation, tourism, and telecommunications. Services not only function as end-use products, but they also facilitate the rest of the economy. For example, transportation services move intermediate products along global value chains and final products to consumers; telecommunications services open e-commerce channels; and financial services provide credits for the manufacture of goods. Intermediate services embedded within a supply chain can include R&D, design and engineering, and business services. ", "As with trade in goods, foreign barriers may prevent U.S. trade in services from expanding to its full potential, but services barriers are often different from those faced by goods suppliers. Many barriers to goods trade\u2014tariffs and quotas, for example\u2014are at the border. By contrast, restrictions on services trade occur largely within the importing country as \"behind the border\" barriers. Some restrictions are in the form of discriminatory regulations that may favor domestic service providers over foreign service providers. Because services transactions more often require direct contact between the consumer and provider, many of the trade barriers faced by companies relate to the ability to establish a commercial presence in the consumers' country in the form of direct investment or to the temporary movement of providers and consumers across borders."], "subsections": []}, {"section_title": "How important are services in U.S. trade?", "paragraphs": ["In 2017, the United States exported $798 billion in services and imported $542 billion, creating a trade surplus of $255 billion (see Figure 9 ). U.S. services exports accounted for 34% of total U.S. exports of goods and services, while services imports accounted for 19% of total U.S. imports. Although smaller relative to trade in goods, services trade plays an important role in the U.S. economy, accounting for about 79% of U.S. GDP and 82% of U.S. private sector full-time employment. Unlike trade in goods, each year the United States exports more services than it imports, thus surpluses in services trade have partially offset U.S. trade deficits in goods trade.", "Conventional trade data may underestimate trade in services because the data are not measured on a value-added basis and do not attribute any portion of the traded value of manufactured and agricultural products to services inputs. Intermediate services embedded within a value chain as inputs include not only transportation and distribution to help move goods along, but also R&D, design and engineering, and business services. The independent value of these services (as opposed to the value of the final product) can be captured in trade in value-added statistics. As manufacturing and agriculture grow more complex and technologically advanced, their consumption of value-added services also grows."], "subsections": []}, {"section_title": "How is digital trade different from other trade in goods and services?", "paragraphs": ["Digital trade includes not only end-products such as movies, software, or video games; it also serves as a means to facilitate economic activity, potentially enhancing productivity and competitiveness. Examples of digital trade include online shopping; transmission of information to manage business operations; online health or educational services; communication channels, such as email; and financial services used in e-commerce or electronic trading. Information and communication technologies (ICT) services are outpacing the growth of trade in ICT goods. ", "As with traditional trade barriers, digital trade constraints can be classified as tariff or nontariff barriers. Nontariff barriers establish restrictions that may affect what a firm offers in a market or how it operates. Because digital trade is intangible and does not require direct interaction between individuals, trade barriers are often in the form of localization requirements that restrict the flow of commercial data. Digitally delivered exports and services in particular rely on cross-border data flows. But trade in manufactured goods and agricultural products also increasingly depends on data flows. For example, farmers may use real-time satellite data to optimize the productivity of crops and soil. Data transfer regulations that restrict cross-border data flows or require use of locally based servers or infrastructure, so-called data localization barriers, may limit the type of services that a firm can sell or how it can communicate and share data with subsidiaries or headquarters abroad. Such restrictions may also prevent the ability of providers that offer or rely on cloud-computing from entering a market. "], "subsections": []}]}]}, {"section_title": "Formulation of U.S. Trade Policy", "paragraphs": [], "subsections": [{"section_title": "Trade Policy Objectives and Functions", "paragraphs": [], "subsections": [{"section_title": "What have been the overall objectives of U.S. trade policy?", "paragraphs": ["The United States was a key architect of the global economic order that evolved after World War II, which established multilateral institutions to advance a rules-based, open trading system. Historically, U.S. trade policy has focused on supporting economic growth and jobs through trade, liberalizing markets by reducing trade and investment barriers through trade agreements and negotiations, enforcing trade commitments and related laws, and providing time-limited relief to companies and workers facing unfair or injurious import competition. Another key objective of U.S. trade policy has been to advance U.S. strategic goals by supporting economic development and integration of developing countries, strengthening regional alliances, and extending U.S. influence abroad. U.S. administrations outline key trade policy objectives in an annual trade policy agenda established by the U.S. Trade Representative (USTR). Based on the latest agenda, objectives of the current Administration include pursuing trade policies that support U.S. national security and preserve national sovereignty; negotiating \"new and better trade deals\"; strictly enforcing U.S. trade laws and protecting U.S. rights under trade agreements; and reforming the multilateral trading system."], "subsections": []}, {"section_title": "What are the key functions of U.S. trade policy?", "paragraphs": ["Key trade functions of the U.S. government include formulating and coordinating trade policy; negotiating trade and investment agreements; enforcing U.S. trade laws and U.S. rights under trade agreements; and administering trade and investment programs, such as export financing, import inspection and safety, and trade adjustment assistance. Congress plays a major role in U.S. trade policy through its legislative and oversight authority, working together with the executive branch to negotiate and implement trade agreements. ", "The USTR and multiple U.S. agencies are generally involved in implementing trade policy, making interagency coordination an important part of the process. By statute, the USTR is the President's principal advisor on trade policy, chief U.S. trade negotiator, and head of the interagency trade policy coordinating process. Certain other agencies have primary roles in specific regards, such as the Commerce Department, which holds operational responsibility over key trade programs, and the Department of Agriculture, which aims to promote and regulate U.S. agricultural trade. Agency roles have evolved over time, both through legislative and administrative actions."], "subsections": []}]}, {"section_title": "Role of Congress", "paragraphs": [], "subsections": [{"section_title": "What is the role of Congress in making trade policy?", "paragraphs": ["The U.S. Constitution designates Congress as the primary authority over trade policy. Article 1, Section 8, of the U.S. Constitution expressly grants Congress the power \"To lay and collect Taxes, Duties, Imposts and Excises\" and \"To regulate Commerce with foreign Nations, and among the several States,\" as well as the general provision \"To make all Laws which shall be necessary and proper\" to carry out these specific authorities. Congress exercises this power in many ways, such as through the enactment of tariff schedules and trade remedy laws, and the approval and implementation of reciprocal trade agreements."], "subsections": []}, {"section_title": "How does Congress make trade policy?", "paragraphs": ["U.S. trade policy is based on statutory authorities, as passed by Congress. These include laws authorizing trade programs and governing trade policy generally in areas such as tariffs, nontariff barriers, trade remedies, and import and export policies, as well as trade policy functions of the federal government. Congress also sets trade negotiating objectives in law, through trade promotion authority (TPA, see below); requires formal notification and consultation from the executive branch and opportunity to provide advice on trade negotiations; and conducts oversight hearings on trade programs and agreements to assess their conformity to U.S. law and congressional intent. ", "Congress has delegated certain powers to the President to negotiate reciprocal trade agreements and take certain executive action regarding trade policy. In 1934, Congress enacted the Reciprocal Trade Agreements Act, which authorized the President to enter into reciprocal agreements to reduce tariffs within congressionally preapproved levels, and to implement the new tariffs by proclamation without additional legislation. Congress renewed this authority periodically until the 1960s. Subsequently, Congress enacted the Trade Act of 1974, combining tariff proclamation authority with a broader mandate for the executive branch to open markets and to negotiate nondiscriminatory international trade norms for nontariff barriers as well (see below)."], "subsections": []}, {"section_title": "What committees lead in exercising congressional authority over trade?", "paragraphs": ["Because of the revenue implications inherent in most trade agreements and trade policy changes, the House Ways and Means Committee and Senate Finance Committee have primary responsibility for trade matters. Each committee has a subcommittee dedicated exclusively to trade issues. Other committees may also have a role should trade agreements, policies, and other trade issues include matters under their jurisdiction. For example, the House Foreign Affairs and Senate Banking Committees have jurisdiction over export controls. The foreign affairs committees in both chambers also examine trade relationships as part of their broader oversight of foreign relations.", "Congressional Advisory Groups on Negotiations (CAGs) consult and provide advice to USTR before and during trade agreement negotiations. Separate CAGs are established for both houses: a House Advisory Group on Negotiations (HAG), chaired by the chair of the Ways and Means Committee, and a Senate Advisory Group on Negotiations (SAG), chaired by the chair of the Finance Committee. CAGs can receive briefings and can access trade negotiating documents."], "subsections": []}, {"section_title": "How can individual Members of Congress affect trade policy decisions?", "paragraphs": ["Individual Members affect trade policy first as voting representatives who collectively determine the statutes governing trade matters. They may also exercise influence as sitting members on relevant committees, in testimony before committees whether or not they are members, in written letters to USTR weighing in on trade policy decisions, and in exercising informal influence over other Members through the exercise of the political authority and power invested in them by the electorate."], "subsections": []}, {"section_title": "What is Trade Promotion Authority (TPA)?", "paragraphs": ["Trade promotion authority (TPA), also at times called \"fast track,\" refers to the process for approving and implementing most trade agreements. If a trade agreement negotiated by the President requires changes in U.S. law, Congress is responsible for implementing the agreement through legislation. TPA ensures expedited consideration of implementing legislation through a guaranteed, up-or-down vote with no amendments, provided the implementing bill and the negotiating process meet certain requirements (see Figure 11 ). To be eligible for expedited consideration, a trade agreement must be negotiated, concluded, and notified to Congress, during the time period in which TPA is in effect, and it must reflect the negotiating objectives specified in the TPA statute. In addition, negotiations must be conducted in conjunction with various notifications and consultations with Congress and other stakeholders. More broadly, TPA defines how Congress is to exercise its constitutional authority over trade policy, while affording the President added negotiating credibility, by giving U.S. trading partners an assurance that the final agreement will be considered by Congress in a timely manner and without amendments. ", "Congress first enacted TPA under the Trade Act of 1974 and has renewed this authority four times. Some aspects of TPA have evolved during these renewals. The most recent legislation was signed into law on June 29, 2015 ( P.L. 114-26 ), and applies to concluded trade agreements, notified to Congress before July 1, 2021."], "subsections": []}]}, {"section_title": "Role of the Executive Branch", "paragraphs": [], "subsections": [{"section_title": "What are the functions of the executive branch in U.S. trade policy?", "paragraphs": ["The executive branch executes trade policy in various ways. Under the Constitution, the President has the responsibility for conducting the nation's foreign relations and negotiating treaties with other nations. The executive branch negotiates, implements, and monitors U.S. trade agreements. The executive branch is also responsible for customs enforcement, collection of duties, implementation of trade remedy and other trade laws, budget proposals for trade programs and agencies, and administering export and import policies, among other functions. "], "subsections": []}, {"section_title": "Who is in charge of U.S. trade policy?", "paragraphs": ["The President directs overall trade policy in the executive branch and performs specific trade functions granted by statute, such as adjusting tariff rates through delegated authority. The chief adviser on trade policy to the President is the USTR, a Cabinet-level appointment. The USTR has primary responsibility for developing, coordinating, and implementing trade policy, as well as negotiating multilateral, regional, and bilateral trade agreements and enforcing U.S. trade laws. The USTR reports annually on the President's trade policy agenda\u2014due to Congress by March 1 st each year\u2014and on foreign trade barriers. Congress created the USTR in 1962 (originally the Office of the Special Representative for Trade Negotiations) to heighten the profile of trade and provide better balance between competing domestic and international interests in the formulation and implementation of U.S. trade policy and negotiations, previously managed by the State Department. ", "Many trade functions have been delegated by Congress and the President to various departments and agencies within the executive branch. These agencies administer the government's trade functions, coordinating U.S. positions through an interagency process and with input from public and private sector advisory groups. Other key agencies with trade policymaking and enforcement responsibilities include the Departments of Commerce, Agriculture, State and the Treasury. The Departments of Homeland Security and Labor are also involved in trade enforcement."], "subsections": []}, {"section_title": "What is the interagency process?", "paragraphs": ["The USTR has primary responsibility for trade negotiations and trade policy decisions. However, such decisions often involve areas of responsibility that fall under other Cabinet-level departments, requiring a multidepartment interagency process. To implement this process, Congress initially established the Trade Policy Committee, chaired by USTR and consisting of the Secretaries of the Treasury, Commerce, State, Agriculture, Labor, and other department heads as USTR deems appropriate. Two sub-Cabinet groups were subsequently established\u2014the Trade Policy Review Group (TPRG, sub-Cabinet or deputies level) and the Trade Policy Staff Committee (TPSC, staff level), composed of some 20 agencies. The executive branch also solicits advice from a three-tier trade advisory committee system mandated by Congress that consists of private sector and nonfederal government representatives (see below). "], "subsections": []}, {"section_title": "When does the President get involved in trade decisions?", "paragraphs": ["The President is responsible for influencing the direction of trade legislation, signing trade legislation into law, and making other specific decisions on U.S. trade policies and programs when the President deems that the national interest or the political environment requires direct participation. This can take place in many areas of trade policy, such as requesting TPA, initiating critical trade remedy cases and/or deciding whether to impose recommended import restrictions in certain investigations. In addition, the President can influence trade relations through meetings or communications with foreign heads of state, and regarding other trade policy areas subject to or requiring high political visibility."], "subsections": []}]}, {"section_title": "Role of the Private Sector and Other Stakeholders", "paragraphs": [], "subsections": [{"section_title": "What is the formal role of the private sector and other stakeholders in the formulation of U.S. trade policy?", "paragraphs": ["The role of the private sector and other stakeholders in the formulation of U.S. trade policy is embodied in a three-tiered committee system that Congress established in Section 135 of the Trade Act of 1974, as amended. The advisory system consists of 28 committees (with about 700 citizen advisors), which is administered by USTR's Office of Intergovernmental Affairs & Public Engagement (IAPE) in cooperation with other agencies. The three-tier system consists of (1) the President's Advisory Committee for Trade Policy and Negotiations (ACTPN); (2) five general policy advisory committees dealing with environment, labor, agriculture, Africa, and intergovernmental issues; and (3) 20 technical advisory committees in the areas of industry and agriculture. Committees were set up to ensure that U.S. public and private sector views are considered in trade policies and programs. The advisory system provides information and advice on negotiating objectives and bargaining positions for trade agreements, among other issues."], "subsections": []}, {"section_title": "What is the informal role of the private sector and other stakeholders?", "paragraphs": ["The private sector, nongovernment organizations (NGOs), labor groups, and other stakeholders shape U.S. trade policy in a number of other ways. For example, representatives from industry and NGOs may be invited to testify before congressional committees. Private sector representatives are also invited or requested to testify before the U.S. International Trade Commission, USTR, the Department of Commerce, or other government bodies to provide assessments of the potential impact of pending trade negotiations on their industries and sectors. In addition, the executive branch regularly seeks comments from interested stakeholders through Federal Register notices regarding a variety of trade initiatives, including new trade negotiations, eligibility for preferential trading programs, and trade investigations. Private sector, NGOs and labor groups also lobby Congress and the executive branch to promote their interests in U.S. trade policies and trade agreements."], "subsections": []}, {"section_title": "Why do groups attempt to lobby on trade decisions?", "paragraphs": ["Trade is an integral part of the U.S. economy. Virtually all kinds of agricultural and manufactured goods are tradeable\u2014they can be exported and imported. In addition, a growing number of services\u2014once considered non-tradeable because of their intangibility\u2014can be bought and sold across borders because of technological advancements. As a result, implementing trade policy can affect a broad spectrum of interests in the United States. For some industries, firms, and workers, congressional decisions to support a particular trade agreement or rulings on antidumping and other cases could affect both employment and economic growth; those decisions also influence product choices and prices facing U.S. consumers. Such groups are also concerned with obtaining greater market access in various countries. In addition, the increasing focus of trade agreements on nontariff issues, such as intellectual property rights and labor and environmental protections, has broadened the scope of stakeholder interest. Consequently, groups representing businesses, farmers, workers, consumers, and various public interest groups strive to ensure that their views on trade policy decisions are represented."], "subsections": []}]}, {"section_title": "Role of the Judiciary", "paragraphs": [], "subsections": [{"section_title": "How do federal courts get involved in trade?", "paragraphs": ["Legal challenges may be brought in federal court by importers, exporters, domestic manufacturers, and other injured parties to appeal governmental actions and decisions concerning trade. Cases may involve, for example, customs classification decisions, agency determinations in antidumping (AD) and countervailing duty (CVD) proceedings, Section 201 safeguards, Section 232 national security investigations (see \" Tariffs and Trade Remedies \"), or the constitutionality of state economic sanctions. The federal government may also initiate legal proceedings against individuals and firms to enforce customs laws or statutory restrictions on particular imports and exports. Some trade statutes may preclude judicial review. For example, most preliminary determinations in AD and CVD proceedings and governmental actions involving the implementation of World Trade Organization (WTO) and free trade agreements may not be challenged in federal court. While most federal cases involving trade laws are heard in the U.S. Court of International Trade (see below), cases may also be filed in other federal courts depending on the nature of the cause of action or proceeding involved. Court decisions may significantly affect U.S. trade policy when they (1) examine whether an agency has properly interpreted its statutory mandate or has acted outside the scope of its statutory authority, (2) decide how much deference courts should accord actions of the executive branch undertaken pursuant to statutory grants of authority, or (3) rule on whether a trade statute violates the U.S. Constitution."], "subsections": []}, {"section_title": "What is the U.S. Court of International Trade?", "paragraphs": ["The U.S. Court of International Trade (USCIT) is an Article III federal court located in New York City with exclusive jurisdiction over a number of trade-related matters, including customs decisions, trade remedy determinations, import embargoes imposed for reasons other than health and safety, and the recovery of customs duties and penalties. Formerly known as the Customs Court, the USCIT was renamed in the Customs Court Act of 1980, which also significantly enlarged its jurisdiction. The court consists of nine judges, no more than five of whom may be from the same political party. Judges are appointed by the President with the advice and consent of the Senate. USCIT decisions may be appealed by right to the U.S. Court of Appeals for the Federal Circuit and possibly to the U.S. Supreme Court. Statutory provisions related to the USCIT can be found at 28 U.S.C. Sections 251-258 (establishment), 28 U.S.C. Sections 1581-1585 (jurisdiction), and 28 U.S.C. Sections 2631-2647 (procedure)."], "subsections": []}]}]}, {"section_title": "U.S. Trade Policy Tools119", "paragraphs": [], "subsections": [{"section_title": "Trade Negotiations and Agreements", "paragraphs": [], "subsections": [{"section_title": "Why does the United States negotiate trade liberalizing agreements?", "paragraphs": ["The United States negotiates trade liberalizing agreements for economic and commercial reasons, as well as foreign policy and national security reasons. Objectives include: ", "encourage trade partners to reduce or eliminate tariffs and nontariff barriers and increase market access for U.S. exporters; gain competitive advantages for U.S. firms over foreign competitors in third country markets; increase access to lower-cost imports that offer domestic and industrial consumers a wider choice of products; encourage trading partners, especially developing countries, to liberalize their trade and investment regimes, and thereby improve the efficiency of their economies and their integration with the global economy; and strengthen alliances, forge new strategic relationships, and deepen U.S. presence and influence in a geographic region."], "subsections": []}, {"section_title": "What are the types of trade agreements?", "paragraphs": ["The United States participates in three major categories of trade agreements:", "Multilateral agreements are negotiated in the World Trade Organization (WTO), and include all 164 WTO members. F ree trade agreements (FTAs) are negotiated outside the WTO and can be further divided by the number of participants. Bilateral FTAs involve two countries, while regional FTAs , such as the North American Free Trade Agreement (NAFTA) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP or TPP-11) involve three or more countries, typically in a geographic region. Plurilateral agreements involve more than two countries but not all WTO members and typically focus on a specific sector, such as the Information Technology Agreement (ITA) or ongoing Trade in Services Agreement (TiSA) negotiations."], "subsections": []}, {"section_title": "How many free trade agreements (FTAs) does the United States have?", "paragraphs": ["The United States currently has 14 FTAs in force, covering 20 countries (see Figure 12 ). Globally, nearly 300 trade agreements have been notified to the WTO and are in force as of late 2018. The majority of U.S. FTA partners are small, developing countries. While U.S. FTAs cover some major U.S. trading partners, like Canada and Mexico, only 35% of total U.S. trade is with FTA partners. More than 99% of U.S. trade is with WTO member countries and thus subject to WTO commitments and provisions\u201465% of U.S. trade is with WTO members with which the U.S. does not have an FTA. ", "U.S. trade policy under the Trump Administration has brought a shift in approach to trade negotiations. In January 2017, President Trump withdrew the United States from the Trans-Pacific Partnership (TPP)\u2014a regional FTA negotiated during the Obama Administration with 11 other countries in the Asia-Pacific\u2014and committed to negotiate future trade deals bilaterally. President Trump has also renegotiated two U.S. FTAs and proposed a number of new negotiations.", "The United States signed the proposed renegotiated NAFTA agreement, the U.S.-Mexico-Canada Agreement (USMCA) on November 30, 2018. The renegotiation was conducted under TPA procedures, which potentially allows for expedited consideration by Congress of the implementing legislation required to bring the new agreement into force. The United States also recently negotiated amendments to the U.S.-South Korea FTA (KORUS). These more limited amendments were not negotiated under TPA procedures. The delayed reduction of the U.S. light truck tariff on imports from South Korea, the most significant of the negotiated amendments, took effect through presidential proclamation at the beginning of 2019. In October 2018, under TPA procedures, USTR notified Congress of its intent to negotiate new trade agreements with Japan, the European Union and United Kingdom\u2014the negotiations could begin in early 2019. "], "subsections": []}, {"section_title": "How do U.S. FTAs differ from FTAs negotiated among other countries?", "paragraphs": ["FTAs negotiated by the United States are often more comprehensive\u2014both in terms of tariff coverage and the overall scope of enforceable commitments\u2014than those negotiated among other countries. In general, U.S. FTA rules and obligations also go beyond those established in the WTO. Nearly all U.S. FTAs include not only the elimination of the majority of tariffs on trade in goods, but also reduction of barriers to services trade, rules on foreign investment, intellectual property rights protection, commitments on opening government procurement markets, and enforceable provisions on labor standards and the environment. The United States has sought to establish new trading rules within recent trade negotiations and agreements on emerging issues like digital trade and state-owned enterprises."], "subsections": []}, {"section_title": "What are Trade and Investment Framework Agreements (TIFAs)?", "paragraphs": ["A Trade and Investment Framework Agreement (TIFA) is an agreement between the United States and another country or group of countries to consult on issues of mutual economic interest in order to promote trade and investment. The USTR is the U.S. lead representative in TIFA talks. The United States has more than 50 TIFAs, most of which are with developing countries. The United States and its TIFA partners can agree to establish a joint ministerial-level council as the overall mechanism for consultations, as well as issue-oriented working groups. A TIFA is a nonbinding agreement and does not involve changes in U.S. law; therefore, TIFAs do not require congressional approval. In some cases however, TIFAs have led to FTA or bilateral investment treaty (BIT) negotiations. "], "subsections": []}, {"section_title": "What is the General Agreement on Tariffs and Trade (GATT)?", "paragraphs": ["The General Agreement on Tariffs and Trade (GATT) was created in 1947 as a part of the post-WWII effort to build a stable, open international economic framework. The GATT was not a formal international organization, but it became the principal set of rules governing international trade for 47 years, until the creation of the World Trade Organization (WTO) in 1995. With some slight modifications, the GATT continues to be applied today. The core principles and articles of the GATT committed the original 23 signatories, including the United States, to lower tariffs on a range of goods and to apply tariffs in a nondiscriminatory manner\u2014the so-called most-favored nation, or MFN principle. Although the GATT mechanism for the enforcement of these rules or principles was viewed as largely ineffective, the agreement nonetheless brought about a substantial reduction of tariffs and other trade barriers."], "subsections": []}, {"section_title": "What is the World Trade Organization (WTO)?", "paragraphs": ["The WTO is a 164-member international organization that administers the trade rules and agreements negotiated by its members, including the United States, to eliminate barriers and create nondiscriminatory rules to govern trade. It also serves as a forum for trade liberalization negotiations and dispute settlement resolution. The United States was a major force behind the establishment of the WTO on January 1, 1995, as well as the new rules and trade agreements that resulted from multilateral trade negotiations (Uruguay Round, 1986-1994). The WTO succeeded and encompassed the General Agreement on Tariffs and Trade (GATT), established in 1947. The WTO administers a number of agreements and separate commitments including under the GATT (for trade in goods), the General Agreement on Trade in Services (GATS, for trade in services), the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and others. It also oversees multilateral and plurilateral negotiations among subsets of WTO members, such as the Government Procurement Agreement (GPA) and Information Technology Agreement (ITA). The last major negotiation\u2014the Doha Development Agenda\u2014began in 2001; however, it was beset with persistent differences among the United States, the EU, and developing countries on major issues, such as agriculture, industrial tariffs and nontariff barriers, services, and trade remedies. It has been in abeyance since the WTO Nairobi Ministerial did not reaffirm its continuation in 2015. At the latest WTO Ministerial Conference in December 2017, no major deliverables were announced. Several members committed to make progress on ongoing talks, such as in fisheries subsidies and e-commerce, and pursue new plurilateral negotiations, while other areas remain stalled. ", "The WTO's effectiveness as a negotiating body for broad-based trade liberalization has come under intensified scrutiny since the collapse of the Doha Round, as has its role in resolving trade disputes. Several members believe the WTO needs to adopt reforms to continue its role as the foundation of the global trading system, and have begun to explore aspects of reform and future negotiations. Proposed reforms also aim to improve the working of the WTO's dispute settlement system. The Trump Administration is currently withholding approval for appointments to the WTO Appellate Body (AB)\u2014the 7-member body that reviews appeals in a dispute case\u2014amid concerns over \"judicial overreach\" and certain procedures. The dispute settlement system could cease to function by late 2019, if new appointments are not approved."], "subsections": []}, {"section_title": "How are disputes resolved at the WTO?", "paragraphs": ["A WTO member may initiate dispute settlement proceedings under the WTO to challenge another member's trade practices that allegedly violate a WTO agreement. The dispute settlement process begins with consultations between the two parties. If the consultations fail to resolve the dispute, the member may request a dispute panel to adjudicate the dispute; a panel decision may be appealed to the WTO Appellate Body (AB). If the defending member is found to have violated a WTO obligation, the member will be expected to remove the challenged measure within a compliance period; otherwise, the prevailing member may request authorization from the WTO to take temporary retaliatory action, such as increased tariffs, or seek compensation. ", "Since 1995, 575 dispute settlement complaints have been filed in the WTO, as of January 2019. The United States has been an active user of the WTO dispute settlement system and, among WTO members, has been the complainant or respondent in the most WTO cases (see Figure 13 ). Several pending WTO disputes are of significance to the United States, including challenges by a number of countries to recent tariff measures imposed by the Trump Administration. ", "WTO decisions do not have direct effect in U.S. law. Thus, if a panel finds a U.S. statute, policy or practice to be inconsistent with U.S. WTO obligations, the findings may not be implemented except through U.S. legislative action. Where an administrative action is successfully challenged, USTR decides what, if any, compliance action will be taken. If there is sufficient statutory authority to amend or modify a regulation or practice or to issue a new determination in a challenged administrative proceeding, USTR may direct the agency involved to make the change (provided certain statutory procedures for such actions are followed). In some cases, the United States may pay compensation to the complainant country instead changing U.S. rules or regulations. As a matter of policy, the United States generally seeks to comply with WTO decisions against it. This helps ensure that other WTO members also comply with the rulings in dispute cases initiated by the United States. "], "subsections": []}, {"section_title": "How are disputes resolved under U.S. FTAs?", "paragraphs": ["U.S. FTAs establish procedures to resolve disputes in both state-to-state and investor-state fora. Similar to WTO dispute settlement, U.S. FTAs aim first to resolve disputes through consultations; otherwise, a panel can be requested to adjudicate the dispute. Once a decision is issued by the panel, the offending party is expected to come into compliance or can face possible suspension of trade benefits or other remedies. If a dispute is common to both FTA and WTO rules, a country may choose the forum in which to bring the dispute. State-state dispute settlement has not been frequently used under U.S. FTAs\u2014three cases have been decided under NAFTA\u2014and disputes are usually resolved via consultations. Most other U.S. disputes with FTA partners have been adjudicated under WTO rules. Other than NAFTA, the United States has brought one FTA labor dispute (with Guatemala under CAFTA-DR) to formal dispute settlement. Most U.S. FTAs also contain a separate dispute system for investment-related provisions, called investor-state dispute settlement. (See \" What is investor-state dispute settlement (ISDS)? \"). NAFTA contains (and the proposed USMCA maintains) a unique binational panel system to review an administrative agency application of a country's trade remedy laws."], "subsections": []}]}, {"section_title": "Trade and Development", "paragraphs": [], "subsections": [{"section_title": "What are trade preferences programs?", "paragraphs": ["Trade preference programs provide temporary, nonreciprocal, duty-free access to the U.S. market for selected exports from eligible developing countries. Since 1974, Congress has created six programs: (1) Generalized System of Preferences (GSP); (2) Andean Trade Preference Act (APTA; expired July 2013); (3) Caribbean Basin Economic Recovery Act (CBERA; permanent); (4) United States-Caribbean Basin Trade Partnership Act (CBTPA); (5) African Growth and Opportunity Act (AGOA); and (6) Haitian Hemispheric Opportunity Through Partnership Encouragement Act (HOPE). In 2016, Congress also passed country-specific trade preferences for Nepal. ", "GSP is the largest U.S. trade preference program, covering 120 countries and territories. It provides duty-free treatment to about 3,500 products imported from designated beneficiary developing countries and 1,500 additional products from least-developed countries. In 2017, $21 billion imports entered the United States under the program, out of $220 billion total imports from GSP countries. Countries must meet such criteria specified by Congress to be eligible, including protections for intellectual property rights and worker rights. USTR is currently conducting eligibility reviews of several GSP beneficiary countries, including India, Indonesia, Kazakhstan, and Turkey."], "subsections": []}, {"section_title": "What is trade capacity building?", "paragraphs": ["Trade capacity building (TCB) involves U.S. assistance, such as funding, training, and technical expertise, to support developing countries' integration and participation in international trade. According to USAID, in FY2016, the United States invested about $1.2 billion in 651 TCB activities across 134 countries, regions or trade groups. The U.S. government has viewed TCB as an important way to help developing countries \"negotiate and implement market opening and reform-oriented trade agreements and improve their capacity to benefit from increased trade.\" Examples include U.S. assistance to implement customs reforms required by the WTO Trade Facilitation Agreement, improve labor and environment protections, and meet export standards and phyto-sanitary rules. Currently no single agency is responsible for coordinating U.S. government TCB. USAID typically receives the most funding to implement TCB activities; the Millennium Challenge Corporation (MCC) also comprises a large share of funds related to infrastructure. Other agencies have TCB responsibilities, including the Departments of Agriculture, Labor, and State, and the Trade and Development Agency."], "subsections": []}]}, {"section_title": "Tariffs and Trade Remedies", "paragraphs": [], "subsections": [{"section_title": "What is U.S. tariff policy?", "paragraphs": ["The Constitution empowers Congress to set tariffs\u2014a customs duty levied on imports and exports; this power has been partially delegated to the President. While historically tariffs were used as a primary means of collecting government revenue, today developed countries like the United States rely on other means for generating revenue. U.S. Customs and Border Protection (CBP) administers the collection of tariffs at U.S. ports of entry\u2014in 2016, CBP collected $32 billion in tariffs, just 1% of total federal revenue. ", "Over the past 80 years, the United States used its tariff policy to encourage global trade liberalization toward various ends, such as increasing global trade, supporting global peace and economic prosperity, and opening markets for U.S. exports. Toward these ends, the United States has reduced or eliminated many of its tariffs through bilateral and multilateral trade negotiations and agreements (see above). Beginning in 1934, Congress began periodically authorizing the President to negotiate reciprocal reductions in tariffs bilaterally. Following World War II, the United States encouraged tariff reduction globally by supporting a rules-based trading system under the GATT and the WTO. By 2012, global tariffs had fallen to less than 7% on average. As of 2016, the simple mean of U.S. tariffs applied across all products was 3.3% (see Figure 14 ), the lowest among the top five global economies by GDP. Roughly 70% of all products enter the United States duty free. The Trump Administration has been critical of low-tariff policies and has made greater use of its discretionary authority to increase tariffs on certain goods imported from key U.S. trading partners.\u00a0"], "subsections": []}, {"section_title": "What are the main U.S. trade remedy laws?", "paragraphs": ["U.S. trade laws include trade remedies used by the United States to mitigate the adverse impact of various foreign trade practices on domestic industries and workers. The two most frequently used trade remedies aimed at unfair trade practices are antidumping (AD) and countervailing duty (CVD) laws, found in Title VII or the Trade Act of 1930 (19 U.S.C. 1671-1677n, as amended). These laws are administered primarily through the Department of Commerce's International Trade Administration (ITA), which determines the existence and amount of dumping or subsidies, and the U.S. International Trade Commission (ITC), which determines the injury or threat thereof to U.S. industries. Other trade remedy laws include Section 201 of the Trade Act of 1974, which focuses on import surges of fairly traded goods; Section 301 of the Trade Act of 1974, which focuses on violations of trade agreements or other foreign practices found to be unjustifiable and restrict U.S. commerce; and Section 337 of the Trade Expansion Act of 1962, which focuses on patent and copyright infringements, and counterfeit goods. All laws must comply with U.S. WTO obligations, including articles under the GATT, known as the Antidumping Agreement, Agreement on Subsidies and Countervailing Measures, and the Agreement on Safeguards. ", "Supporters of trade remedies say that they are necessary to shield U.S. industries and workers from unfair competition. Others, including some importers and downstream consuming industries, are concerned that AD/CVD actions can serve as disguised protectionism and create inefficiencies in the world trading system by \"artificially\" raising prices on imported goods."], "subsections": []}, {"section_title": "What is the purpose of the antidumping law?", "paragraphs": ["Antidumping (AD) is the most frequently used U.S. trade remedy law. Dumping generally refers to an unfair trade practice in which an exporter sells goods in one export market at lower prices than comparable goods sold in the home market or in other export markets. Companies sometimes dump products to gain market share, deter competition, or get rid of industrial overcapacity. U.S. law provides for the assessment and collection of AD duties when an administrative determination is made by the ITA that foreign goods are being sold at \"less than fair value\" in the United States, and if the ITC determines that such imports cause material injury to a U.S. industry or the threat thereof. AD orders are not permanent and are subject to annual review if requested by an interested party, and a sunset review every five years. As of mid-December 2018, the United States had 354 AD orders in place; more than one-third were against China (see Figure 15 )."], "subsections": []}, {"section_title": "What is the purpose of the countervailing duty law?", "paragraphs": ["After AD laws, countervailing duty (CVD) is the most frequently used U.S. trade remedy law. The purpose of the CVD law is to offset injurious competitive advantage that foreign manufacturers or exporters might enjoy over U.S. producers as a result of receiving a subsidy from the government or another public entity. Countervailing duties are designed to offset the net amount of the foreign subsidy and are levied upon imports of the subsidized goods into the United States. Although AD and CVD laws are intended to remedy fundamentally different kinds of unfair trade, the procedures for both investigations are similar. As of mid-December 2018, the United States had 113 CVD orders in place, nearly half of which were against China (see Figure 15 )."], "subsections": []}, {"section_title": "What is the Section 201 safeguards law?", "paragraphs": ["Section 201 of the Trade Act of 1974 (19 U.S.C. \u00a72251, as amended) authorizes the President to restrict temporarily imports that are found to cause or threaten serious injury to domestic industry. So-called \"safeguard\" actions are designed to provide temporary relief\u2014for example, through additional tariffs or quotas\u2014to facilitate \"positive adjustment\" of a domestic industry to import competition. Unlike AD and CVD cases, no allegation of \"unfair\" trade practices is required to trigger a safeguard investigation. The ITC conducts an investigation, generally initiated by petition filed by a trade association, company, or union representing a U.S. industry. If the ITC finds imports are a substantial cause of serious injury, it makes recommendations on temporary relief to the President, who takes the final action on whether or not to implement the recommendations. ", "In 2017, two safeguard investigations were initiated under the Trump Administration. In January 2018, the President decided to impose a four-year safeguard measure on imports of solar cells and a three-year safeguard on large residential washing machines. The last safeguard investigation was in 2001 over steel products. From 1975 to 2001, the ITC conducted 73 investigations; the ITC determined in the negative in 32 cases and in the affirmative in 34 cases (6 cases ended in ties). The President imposed some type of safeguard measure in 19 cases during this time."], "subsections": []}, {"section_title": "What is Section 232 of the Trade Expansion Act of 1962?", "paragraphs": ["Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. \u00a71862, as amended) is often called the \"national security clause,\" because it provides the President with the ability to impose restrictions on imports that the Secretary of Commerce determines are being imported in \"such quantities or under such circumstances as to threaten to impair the national security.\" If requested or upon self-initiation, the Commerce Department's Bureau of Industry and Security (BIS) consults with the Secretary of Defense and other agencies, and conducts the investigation. Section 232 specifies the factors that Commerce must consider regarding the impact of the U.S. imports on national security. Depending on the findings, the President has the discretion to impose tariffs, quotas, or other measures to offset the adverse effect, subject to few limits. ", "Section 232 has been invoked infrequently, with about 28 investigations completed since 1963. In February 2018, Commerce completed two Section 232 investigations and determined that U.S. imports of steel and aluminum were a threat to national security. In March 2018, the President decided to impose a 25% tariff on steel imports and a 10% tariff on aluminum imports. The Administration is currently conducting Section 232 investigations of uranium imports and imports of autos and auto parts. "], "subsections": []}, {"section_title": "What is Section 301 of the Trade Act of 1974?", "paragraphs": ["Section 301 of the Trade Act of 1974, as amended, is one of the principal statutory means by which the United States can enforce U.S. rights under trade agreements and respond to certain \"unfair\" barriers to U.S. exports, including inadequate protection of intellectual property rights (IPR). Specifically, Section 301 applies to foreign acts, policies, and practices that USTR determines either (1) violate, or are inconsistent with, a trade agreement; or (2) are unjustifiable and burden or restrict U.S. commerce. Section 301 cases can be initiated by petition filed by a company or self-initiated by USTR. USTR must seek a negotiated settlement with the trading partner concerned, through compensation or elimination of the specific trade barrier or practice. For cases involving trade agreements, such as the WTO, USTR is required to use the agreement's formal dispute settlement proceedings. If a resolution is not reached, USTR determines whether or not to retaliate, usually through the imposition of tariffs on selected products.", "A separate provision, commonly called \"Special 301,\" directs USTR to annually report to Congress on countries that deny adequate protection or market access for U.S. IPR. USTR issues a three-tier list (based on the level of U.S. concern) of countries considered to maintain inadequate IPR regimes. A designation of \"Priority Foreign Country\" indicates countries whose practices are considered to be the most serious or harmful; such countries can also be subject to Section 301 investigations.", "Since 1974, USTR has initiated 125 Section 301 cases, retaliating in 16 instances. Almost half of Section 301 cases took place during the 1980s. In 2017, USTR launched a new investigation of China's IPR technology policies that may harm U.S. economic interests. In March 2018, USTR found that certain Chinese policies and practices are \"unreasonable or discriminatory and burden or restrict U.S. commerce.\" The Trump Administration subsequently increased tariffs on $250 billion worth of U.S. imports from China and threatened an additional $267 billion in new tariff increases. To date, China has responded by increasing tariffs on $110 billion worth of U.S. products. Both sides have also pursued dispute cases at the WTO. In November 2018, USTR reported that \"China has not fundamentally altered its unfair, unreasonable, and market-distorting practices\" that spurred the Section 301 investigation.", "On the sidelines of the 2018 G-20 Leaders' Summit, according to a White House statement, President Trump and Chinese President Xi Jinping agreed to immediately begin negotiations on \"structural changes\" in regards to IP and technology issues related to the Section 301 case, along with agriculture and services, with the goal of achieving an agreement in 90 days. China reportedly agreed to make \"very substantial\" purchases of U.S. agricultural, energy, and industrial products. In turn, the United States agreed to suspend the Section 301 tariff increases (from 10% to 25%) that were planned to take effect on January 1, 2019, contingent on an agreement in 90 days. "], "subsections": []}, {"section_title": "What is Section 337 of the Tariff Act of 1930?", "paragraphs": ["Section 337 of the Tariff Act of 1930, as amended, prohibits unfair acts or unfair methods of competition in importing goods or selling imports in the United States. In recent years, the statute has become increasingly used for IPR enforcement. Section 337 prohibits imports that infringe U.S. patents, copyrights, processes, trademarks, semiconductor products produced by infringing a protected mask work (such as integrated circuit designs), or protected design rights. The import or sale of an infringing product is illegal only if U.S. industry is producing an article covered by the relevant IPR or in the process of establishing such production. Unlike other trade remedies, no proof of injury due to the import is required. ", "The ITC is responsible for Section 337 investigations. If a violation is found, the ITC may issue an exclusion order and/or cease-and-desist order, subject to presidential disapproval. As of 2018, there were 130 active section 337 investigations. "], "subsections": []}]}, {"section_title": "Trade Adjustment", "paragraphs": [], "subsections": [{"section_title": "What is the Trade Adjustment Assistance (TAA) Program?", "paragraphs": ["Trade Adjustment Assistance (TAA) programs provide federal assistance to workers and firms that have been adversely affected by trade. TAA programs are authorized by the Trade Act of 1974, as amended, and were last reauthorized by the Trade Adjustment Assistance Reauthorization Act of 2015 (Title IV of P.L. 114-27 ). TAA for Workers (TAAW) is the largest program, with appropriations of $790 million in FY2019. TAAW provides assistance to trade-affected workers who have been separated from their jobs due to foreign competition, either through increased imports or because their jobs were relocated abroad. The program is administered at the federal level by the Department of Labor and supports various benefits and services, including funding for career services and training, and income support for workers, formally known as Trade Readjustment Allowance. Table 3 presents program data from FY2017, the most recent year available. Actual benefits are provided to individual workers through state workforce systems and state unemployment insurance systems. Smaller TAA programs are also authorized for firms and farmers affected by foreign competition."], "subsections": []}, {"section_title": "What is the rationale for TAA?", "paragraphs": ["While trade liberalization may increase the overall economic welfare of the affected trade partners, it can cause adjustment problems for firms and workers facing import competition. Trade Adjustment Assistance (TAA) has long been justified on the grounds that it is among the least disruptive options for offsetting policy-driven trade liberalization. Justification for TAA rests on arguments for (1) economic efficiency, by facilitating the adjustment process and returning workers to work more quickly; (2) equity, by compensating those who lose out due to liberalized trade and spreading the costs to society as a whole; and (3) generating support for international trade, by defusing domestic opposition to trade agreements and other trade policy measures. TAA skeptics argue that assistance is costly and economically inefficient, reduces worker and firm incentives to relocate and adjust to increased competition, and may not be equitable given that many groups hurt by changing economic circumstances caused by factors other than trade policies are not afforded special economic assistance. Others argue that TAA programs are not extensive enough to be effective. Despite widespread disagreement, Congress has consistently reached compromise to maintain the program in some form over the past five decades."], "subsections": []}]}, {"section_title": "Export Promotion and Export Controls", "paragraphs": [], "subsections": [{"section_title": "How does the U.S. government promote exports?", "paragraphs": ["Several federal agencies promote U.S. exports and support U.S. investment. The Export-Import Bank (Ex-Im Bank), the Department of Agriculture, and the Overseas Private Investment Corporation (OPIC) administer various finance programs aimed at helping U.S. firms export and invest in certain developing countries, including through fee-based services. The Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act), enacted in October 2018, establishes a new successor agency for OPIC . Agency mandates vary in their emphasis on U.S. commercial interests and foreign policy objectives, but their activities can have implications in both areas. In some cases, U.S. trade financing intends to help U.S. firms obtain a \"level playing field\" against foreign firms that may be receiving subsidized financing from their governments. In addition, the Department of Commerce's International Trade Administration (ITA) promotes U.S. exports, particularly by small and medium-sized companies (SMEs), through various support services, such as export counseling. ", "The Ex-Im Bank, the official U.S. export credit agency, provides direct loans, loan guarantees, and export credit insurance, backed by the U.S. government, to help finance U.S. exports to developing economies, in part to counter similar activities by foreign governments. It operates under a renewable general statutory charter (Export-Import Bank Act of 1945, as amended), which was extended by the Export-Import Bank Reform and Reauthorization Act of 2015 (Division E, P.L. 114-94 ) through September 30, 2019. Despite its reauthorization, Ex-Im Bank has not been fully operational as its board of directors lacks a quorum due to unfilled positions, which has constrained the board's approval of medium- and long-term export financing above $10 million. Presidential appointments to the board require Senate approval, and have been part of the broader debate over Ex-Im Bank and the role of government in financing exports."], "subsections": []}, {"section_title": "What is the purpose of export controls?", "paragraphs": ["Congress has authorized the President to control the export of various items for national security, foreign policy, and economic reasons. Export controls have been a controversial policy issue due to the difficulty striking a balance between national security goals and maintaining export competitiveness. Through the Arms Export Control Act (AECA), the Export Controls Act of 2018 (ECA), the International Emergency Economic Powers Act (IEEPA), and other authorities, the United States restricts exports of defense items or munitions; dual-use goods and technology; certain nuclear materials and technology; and items that would assist in the proliferation of nuclear, chemical, and biological weapons or related missile technology. U.S. export controls are also used to restrict trade with certain countries on which the United States imposes economic sanctions. The Departments of Commerce, State, Energy, and the Treasury administer export control programs and various types of licenses required before certain exports can be undertaken. ", "The ECA ( P.L. 115-232 , Subtitle B, Part I), which became law on August 13, 2018, provides broad legislative authority for the President to implement dual-use export controls. The law repealed the Export Administration Act of 1979, which had been the underlying statutory authority for such controls until it expired in 2001. Notably, the ECA authorizes the Department of Commerce to establish controls on the export and transfer of so-called \"emerging and foundational technologies\" that are deemed essential to U.S. national security, but, as of yet, are not defined as an existing commodity, software, or technology. "], "subsections": []}, {"section_title": "What are \"dual-use\" goods and technology?", "paragraphs": ["Dual-used goods are commodities, software, or technologies that have both civilian and military applications. Examples include product categories like nuclear materials, microorganisms, electronics and computers, and lasers and sensors. Exports of dual-use goods and technologies are licensed by the Commerce Department's Bureau of Industry and Security (BIS). Licenses are issued depending on an item's technical characteristics, destination and end use, and other activities of the end user."], "subsections": []}]}]}, {"section_title": "Link Between International Investment and Trade159", "paragraphs": [], "subsections": [{"section_title": "What are the main kinds of capital flows?", "paragraphs": ["Generally, the two main kinds of capital flows are foreign direct investment (FDI) and foreign portfolio investment (FPI). FDI involves the acquisition of real assets such as real estate, a manufacturing plant, or controlling interest in an ongoing enterprise by a person or entity from another country. Foreign portfolio investment involves the purchase of foreign equities or bonds, loans to foreign residents, or the opening of foreign bank accounts. FDI often involves a long-term commitment and can have the advantage of stimulating direct employment for the host country. By contrast, portfolio investments are extremely liquid and can be withdrawn often at the click of a computer mouse. In addition, official capital flows are generated by governments for various purposes, such as humanitarian assistance and other foreign aid."], "subsections": []}, {"section_title": "Which is larger\u2014trade or capital flows?", "paragraphs": ["It depends. From 1990 to 2017, global trade in goods and services, as measured by exports, grew more than five times, from about $4 trillion a year to $23 trillion. During the same period, gross capital flows, as measured in the balance of payments accounts (direct, portfolio, and other official investments), expanded from around $1 trillion a year to about $4 trillion\u2014but with a pre-crisis peak of more than $12 trillion in 2007, which showed significant growth since the 1990s. During this time period, there was also an explosion in growth in other types of capital flows, known as foreign exchange and over-the-counter derivatives markets. These markets facilitate trade in foreign exchange and other types of assets. While the capital flows associated with these markets do not directly relate to transactions in the balance of payments, they do affect the international exchange value of the dollar, which in turn affects prices of goods and services and the cost of securities. The latest survey of the world's leading central banks indicated that the total daily trading of foreign currencies was more than $5.1 trillion in 2016."], "subsections": []}, {"section_title": "Why do companies invest abroad?", "paragraphs": ["Broadly, firms invest abroad to increase their profits. However, a range of factors can influence a firm's decision to invest. Multinational corporations (MNCs) generally invest abroad because they possess some special process or product knowledge or special managerial abilities, which give them an advantage over foreign firms. Major determinants of FDI include the presence of competitive advantages, resources such as low-cost labor in a host country, and greater commercial benefits through an intra-firm relationship as opposed to an arm's-length relationship between the investor and host country. MNCs are motivated by more than a single factor and likely invest abroad not only to gain access to low-cost resources, but to improve efficiency or market share. FDI has supported the development of global value chains by multinational corporations (MNCs), which source production globally. In addition, many firms find it advantageous to operate close to their customers in foreign countries, where tastes and preferences may differ from the home market. Foreign markets also enable MNCs to access various resources, such as a well-educated work force, which might contribute to a firm's R&D activities. Last, some FDI transactions involve mergers and acquisitions, which can help make a firm become more globally competitive. "], "subsections": []}, {"section_title": "What countries are the largest source of and destinations for global foreign direct investment (FDI)?", "paragraphs": ["According to the United Nations Conference on Trade and Development (UNCTAD), the total stock of global outward FDI in 2017 was $31 trillion. The United States remains the largest source of FDI worldwide, followed by Hong Kong, Germany, the Netherlands, the United Kingdom, and Japan, all with individual outward investment positions about one-fourth or less than that of the United States. The United States is also the largest recipient of FDI, followed by Hong Kong, China, the United Kingdom, and Singapore. By region, developing Asia accounted for the largest share of global FDI inflows (33%), followed by Europe (26%), North America (21%), Latin America and the Caribbean (11%), and Africa (3%)."], "subsections": []}, {"section_title": "What are the levels of U.S. outward and inward FDI?", "paragraphs": ["The United States is the largest source and the largest recipient of FDI. FDI to and from the United States has increased rapidly over the past few decades. From 1985 to 2017, the stock of U.S. FDI abroad rose from $238 billion to $6.0 trillion, while the stock of FDI in the United States increased from $184 billion to $4.0 trillion (see Figure 16 ). The largest destinations for cumulative (or the stock of) U.S. FDI outflows through 2017 included the Netherlands, United Kingdom, Luxembourg, Ireland, Canada, Singapore, Australia, Germany, and Japan. The largest sources of cumulative FDI inflows included the United Kingdom, Japan, Canada, Luxembourg, the Netherlands, Germany, Switzerland, and France and Ireland. Nearly 60% of U.S. direct investment abroad is in Europe, while 68% of FDI in the United States comes from Europe. By sector, U.S. outward FDI is primarily concentrated in high-technology, finance, and services. The largest share of U.S. inward FDI is in manufacturing sector, primarily chemicals and transport industries."], "subsections": []}, {"section_title": "What are the benefits of FDI?", "paragraphs": ["Generally, economists argue for unimpeded international flows of capital, such as FDI, because such flows complement domestic economic activity and positively affect both the domestic (home) and foreign (host) economies. For the home country, direct investment benefits the firms that invest abroad, because they are better able to exploit their competitive advantages and acquire additional skills and other advantages in foreign markets. Direct investment is also associated with a strengthened competitive position, a higher level of skills of the employees, and higher incomes of firms that invest abroad. Host countries benefit from inward FDI because the investment adds permanently to the capital stock and often to the skill set of the economy. Direct investment also brings technological advances, since firms that invest abroad generally possess advanced technology and production processes, boosts capital formation and contributes to a more competitive business environment and productivity growth. More broadly, FDI contributes to international trade and global economic integration, since most firms investing abroad are established MNCs that operate within global value chains.", "Both inward and outward FDI play a role in U.S. trade, jobs, and production. In 2016, the affiliates of foreign firms in the United States employed 7.1 million workers, exported $369.8 billion in goods, and imported $649.9 billion in goods. Foreign firm affiliates contributed $894.0 billion value-added to U.S. GDP, with larger annual growth in value-added on average compared to other private U.S. firms. "], "subsections": []}, {"section_title": "Are there costs associated with FDI?", "paragraphs": ["Some stakeholders raise concerns that U.S. firms invest abroad to send manufacturing and jobs overseas and that U.S. FDI in operations and production facilities abroad supplants U.S. production and exports, thereby reducing employment and wages in the United States. There have been examples of U.S. firms closing a domestic plant and opening another plant abroad, but no official sources track such activities. As a result, most data on the activity of U.S. firms shifting plants or jobs abroad remain anecdotal. More broadly, most U.S. outward FDI is concentrated in high-income developed countries, where markets and consumer tastes are broadly similar to those in the United States, and most of this production is consumed abroad.", "Most economists argue there is no conclusive evidence that U.S. direct investment abroad leads to fewer jobs or lower incomes overall for Americans. Instead, they generally argue that the loss of U.S. manufacturing jobs in recent decades reflects a broad restructuring of the sector, responding primarily to improvements in productivity and other domestic economic forces. That said, jobs in particular companies and sectors can be adversely affected when a company makes decisions to produce similar products abroad. "], "subsections": []}, {"section_title": "What are international investment agreements (IIAs)?", "paragraphs": ["International investment agreements (IIAs) establish binding rules on investment protections. While World Trade Organization (WTO) agreements address some investment issues to a limited extent, there are no comprehensive multilateral rules on investment. IIAs have thus become the primary vehicle for promoting investment rules: there are over 2,600 IIAs in force globally. IIAs generally aim to reduce FDI restrictions and ensure nondiscriminatory treatment of investors and investments. The agreements also include provisions to safeguard a government's right to regulate in the public interest and generally provide for national security and prudential exceptions. U.S. IIAs entail reciprocal commitments; in exchange for specific protections offered to foreign investors in the United States, U.S. investors investing in partner countries expect to receive the same protections. The primary forms of U.S. IIAs are bilateral investment treaties (BITs), which must be ratified by the Senate with two-thirds approval, and investment chapters in free trade agreements (FTAs). USTR and the State Department negotiate U.S. IIAs."], "subsections": []}, {"section_title": "How many IIAs does the United States have?", "paragraphs": ["The United States has bilateral investment treaties (BITs) in force with 40 countries, most of which are with developing countries (see Figure 17 ). The latest BIT ratified by the U.S. Senate, with Rwanda, entered into force in 2012. The United States had been pursuing BIT negotiations with China and India, but both talks have stalled. The United States also has 14 FTAs in force covering 20 countries, most of which include chapters on investment. "], "subsections": []}, {"section_title": "What is investor-state dispute settlement (ISDS)?", "paragraphs": ["Investor-state dispute settlement (ISDS) enables private investors to bring claims against host country governments for alleged violations of investment agreements before an international arbitration panel. ISDS provisions are intended to establish a binding and impartial procedure for settling disputes, with proceedings conducted under the auspices of the World Bank-affiliated International Centre for Settlement for Investment Disputes (ICSID) or comparable rules. While a successful claim by an investor can result in monetary penalties, a country cannot be compelled to change its laws over a decision. ", "The number of ISDS cases has expanded significantly with the growth of global FDI in recent decades (see Figure 18 ). U.S. investors account for about one-fifth of investment claims worldwide. Of 16 cases brought by foreign investors against the United States, the U.S. government has yet to lose a case. ISDS provisions are included in the majority of U.S. BITs and FTAs; nearly all ISDS cases brought against the United States were under the North American Free Trade Agreement (NAFTA). The use of ISDS, however, has become a subject of debate within recent U.S. trade negotiations. At the center of the debate is ensuring robust investor protections, while protecting the government's right to regulate in the public interest. The Trump Administration departed from past practice with major changes to ISDS under the NAFTA renegotiation. The proposed U.S.-Mexico-Canada Agreement (USMCA), signed in November 2018 and pending ratification by each country, would eliminate ISDS between the United States and Canada and places specific limits with respect to Mexico. ISDS was also a major point of contention in the Transatlantic Trade and Investment Partnership (T-TIP) talks during the Obama Administration. The EU has been pushing to include an investment court system in place of ISDS in its recent trade agreements and negotiations."], "subsections": []}, {"section_title": "What is the Committee on Foreign Investment in the United States (CFIUS)?", "paragraphs": ["Foreign investment, particularly by firms owned or controlled by a foreign government, can raise concerns about national security. CFIUS is an interagency committee that assists the President in overseeing foreign investment transactions that could affect U.S. national security. The committee is composed of nine Cabinet members, two ex officio members, and other members as appointed. CFIUS was originally established by an executive order in 1975 with broad responsibilities and few powers. The authority to review foreign investments, known as the Exon-Florio provision, was formally established in 1988 with the passage of P.L. 100-418 . In 2007, the Foreign Investment and National Security Act ( P.L. 110-49 ) established CFIUS in statute and expanded the committee's role in reviewing FDI transactions that could affect \"homeland security\" and \"critical industries.\"\u00a0The Secretary of the Treasury serves as chairman of CFIUS, and a designated lead agency conducts a \"risk-based analysis\" of the threat posed by mergers, acquisitions, or takeovers of a U.S. firm by a foreign investor. The President has the authority to block proposed or pending transactions; this authority has been invoked five times since 1988. In some cases, issues and concerns raised by CFIUS have led foreign investors to cancel a planned purchase or to divest if the deal had already been completed. Most recently, President Trump blocked the acquisition of Lattice Semiconductor Corp. by a Chinese investment firm in 2017, and the acquisition of Qualcomm by Singapore-based Broadcom in 2018. ", "The Foreign Investment Risk Review Modernization Act of 2018\u00a0(FIRRMA, P.L. 115-232 , Title XVII), signed into law on August 13, 2018, amends the current process for investment reviews under CFIUS and expands the scope of transactions subject to review, including any non-controlling investment in U.S. businesses involved in critical technology or critical infrastructure. Some have objected to an expanded role of CFIUS as being counter to the long-standing U.S. position of an open investment climate."], "subsections": []}, {"section_title": "How does the U.S. government promote investment?", "paragraphs": ["The United States promotes both inward and outward FDI. The Overseas Private Investment Corporation (OPIC), which operates under the Foreign Assistance Act of 1961, as amended, provides political risk insurance, financing, and other services to help facilitate U.S. private investments abroad in developing countries and emerging markets. The Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act), enacted on October 5, 2018 ( P.L. 115-254 , Division F) establishes a new U.S. International Development Finance Corporation (DFC) as a successor to OPIC by both expanding and consolidating the development finance functions of OPIC and USAID.", "SelectUSA, a Department of Commerce program established in 2011 via executive order, coordinates federal efforts to attract FDI in the United States. Primary functions of SelectUSA include providing information and data on investments to businesses and economic development organizations (EDOs), helping to resolve issues involving federal programs, and advocating at the national level for making investments in the United States over a foreign location."], "subsections": []}]}]}}
{"id": "R44822", "title": "Cuba: U.S. Policy in the 115th Congress", "released_date": "2019-01-15T00:00:00", "summary": ["Cuba remains a one-party authoritarian state with a poor human rights record. Current President Miguel D\u00edaz-Canel succeeded Ra\u00fal Castro in April 2018, although Castro is continuing as first secretary of Cuba's Communist Party. Over the past decade, Cuba has implemented gradual market-oriented economic policy changes, but critics maintain that it has not taken enough action to foster sustainable economic growth. Most observers do not anticipate major policy changes under D\u00edaz-Canel, at least in the short term; the president faces the enormous challenges of reforming the economy and responding to desires for greater freedom.", "U.S. Policy", "Congress has played an active role in shaping policy toward Cuba, including the enactment of legislation strengthening and at times easing U.S. economic sanctions. Since the early 1960s, the centerpiece of U.S. policy has consisted of economic sanctions aimed at isolating the Cuban government. In 2014, however, the Obama Administration initiated a major policy shift, moving away from sanctions toward a policy of engagement. The policy change included the restoration of diplomatic relations (July 2015); the rescission of Cuba's designation as a state sponsor of international terrorism (May 2015); and an increase in travel, commerce, and the flow of information to Cuba implemented through regulatory changes.", "In June 2017, President Trump unveiled a new policy toward Cuba that increased sanctions and partially rolled back some of the Obama Administration's efforts to normalize relations. The most significant changes include restrictions on transactions with companies controlled by the Cuban military and the elimination of individual people-to-people travel. In response to unexplained injuries of members of the U.S. diplomatic community at the U.S. Embassy in Havana, the State Department reduced the staff of the U.S. Embassy by about two-thirds; the reduction has affected embassy operations, especially visa processing, and made bilateral engagement more difficult.", "Legislative Activity", "In the 115th Congress, debate over Cuba policy continued, especially with regard to economic sanctions. The 2018 farm bill, P.L. 115-334 (H.R. 2), enacted in December 2018, has a provision permitting funding for two U.S. agricultural export promotion programs in Cuba. Two FY2019 House appropriations bills, Commerce (H.R. 5952) and Financial Services (H.R. 6258 and H.R. 6147), had provisions that would have tightened economic sanctions, but final action was not completed by the end of the 115th Congress. Other bills were introduced, but not acted upon, that would have eased or lifted sanctions altogether: H.R. 351 and S. 1287 (travel); H.R. 442/S. 472 and S. 1286 (some economic sanctions); H.R. 498 (telecommunications); H.R. 525 (agricultural exports and investment); H.R. 572 (agricultural and medical exports and travel); H.R. 574, H.R. 2966, and S. 1699 (overall embargo); and S. 275 (private financing for U.S. agricultural exports).", "Congress continued to provide funding for democracy and human rights assistance in Cuba and for U.S.-government sponsored broadcasting. For FY2017, Congress provided $20 million in democracy assistance and $28.1 million for Cuba broadcasting (P.L. 115-31). For FY2018, it provided $20 million for democracy assistance and $28.9 million for Cuba broadcasting (P.L. 115-141; explanatory statement to H.R. 1625). For FY2019, the Trump Administration requested $10 million in democracy assistance and $13.7 million for Cuba broadcasting. The House Appropriations Committee's FY2019 State Department and Foreign Operations appropriations bill, H.R. 6385, would have provided $30 million for democracy programs, whereas the Senate version, S. 3108, would have provided $15 million; both bills would have provided $29 million for broadcasting. The 115th Congress approved a series of continuing resolutions (P.L. 115-245 and P.L. 115-298 ) that continued FY2019 funding at FY2018 levels through December 21, 2018, but did not complete action on FY2019 appropriations, leaving the task to the 116th Congress.", "In other action, several approved measures\u2014P.L. 115-232, P.L. 115-244, and P.L. 115-245\u2014have provisions extending a prohibition on FY2019 funding to close or relinquish control of the U.S. Naval Station at Guantanamo Bay, Cuba; the conference report to P.L. 115-232 also requires a report on security cooperation between Russia and Cuba. The FAA Reauthorization Act of 2018 (P.L. 115-254) requires the Transportation Security Administration to brief Congress on certain aspects of Cuban airport security and efforts to better track public air charter flights between the United States and Cuba. In April 2018, the Senate approved S.Res. 224, commemorating the legacy of Cuban democracy activist Oswaldo Pay\u00e1. For more on legislative initiatives in the 115th Congress, see Appendix A."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Recent Developments", "paragraphs": ["On January 2, 2019, for the second year in a row, the Cuban Commission for Human Rights and National Reconciliation (CCDHRN) reported a significant decline in the annual number of short-term detentions for political reasons. In 2018, according to the CCDHRN, there were 2,873 short-term detentions, almost a 45% decline from 2017 and the lowest level since 2010. (See \" Human Rights ,\" below.)", "On December 22, 2018, Cuba's National Assembly approved a draft constitution that will be subject to a national referendum planned for February 24, 2019. Due to public opposition orchestrated by religious groups, the draft eliminated a provision that eventually could have led to approval of same-sex marriage and instead remained silent on defining matrimony. (See discussion on constitutional changes in \" Cuba's Transition to a New President ,\" below.)", "On December 20, 2018, President Trump signed into law the 2018 farm bill, P.L. 115-334 ( H.R. 2 ), with a provision that permits funding for two export promotion programs\u2014the Market Access Program and the Foreign Market Development Cooperation Program\u2014for U.S. agricultural products in Cuba. (See \" U.S. Exports and Sanctions ,\" below.)", "On December 19, 2018, Major League Baseball announced it had reached an agreement with the Cuban Baseball Federation to allow baseball players from Cuba to sign contracts without defecting from Cuba. Some press reports indicate that the Trump Administration might take action to prevent the deal from moving forward. ", "On November 15, 2018, the Trump Administration updated its list of restricted Cuban entities controlled by the Cuban military, intelligence, or security services or personnel with which direct financial transactions would disproportionately benefit those services or personnel at the expense of the Cuban people or private enterprise in Cuba. Currently, there are 205 entities on the list, including 99 hotels. (See \" Partial Rollback of Engagement and Increased Sanctions ,\" below.)", "On November 1, 2018, National Security Adviser John Bolton made a speech in Miami, FL, strongly criticizing the Cuban government on human rights. In a press interview, Bolton also maintained that the Administration was considering whether to continue to suspend Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (LIBERTAD Act; P.L. 104-114) to allow lawsuits in U.S. federal court against those \"trafficking\" in confiscated property in Cuba, an action that would significantly ratchet up U.S. sanctions on Cuba. (For more on Title III, see \" U.S. Property Claims ,\" below.)", "On November 1, 2018, the United Nations General Assembly approved a resolution (as it has annually since 1991) opposing the U.S. embargo on Cuba. The vote was 189-2, with Israel joining the United States in opposing it. The United States also proposed eight amendments to the resolution criticizing Cuba's human rights record, but all these amendments were defeated by wide margins. (See \" Cuba's Foreign Relations ,\" below.)", "On October 26, 2018, U.S. media reports highlighted a disturbing TV Mart\u00ed program originally aired in May 2018 that disparaged U.S. businessman George Soros through anti-Semitic language and unfounded conspiracy theories. Subsequently, the Office of Cuba Broadcasting pulled the program from its website and the chief executive officer of the U.S. Agency for Global Media stated that the program was \"inconsistent with our professional standards and ethics.\" (See \" Radio and TV Mart\u00ed ,\" below.)", "On October 16, 2018, the State Department's U.S. Mission to the United Nations launched a campaign to call attention to Cuba's estimated 130 political prisoners. (See \" Human Rights ,\" below.)", "On October 15, 2018, the Cuban government released Cuban political opposition activist Tom\u00e1s N\u00fa\u00f1ez Magdariaga from prison after a 62-day hunger strike. The State Department had called for his release, maintaining that he was imprisoned on false charges and convicted in a sham trial. (See \" Human Rights ,\" below.)", "On October 6, 2018, President Trump signed into law the FAA Reauthorization Act of 2018 ( P.L. 115-254 ) with a provision requiring the Transportation Security Administration to brief Congress on certain aspects of Cuban airport security, develop and implement a mechanism to better track public air charter flights between the United States and Cuba, and direct public air charters to provide updated data on such flights. (See \" U.S. Travel to Cuba ,\" below.)"], "subsections": []}, {"section_title": "Introduction", "paragraphs": ["Political and economic developments in Cuba and U.S. policy toward the island nation, located just 90 miles from the United States, have been significant congressional concerns for many years. Especially since the end of the Cold War, Congress has played an active role in shaping U.S. policy toward Cuba, first with the enactment of the Cuban Democracy Act of 1992 (CDA; P.L. 102-484 , Title XVII) and then with the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 ( P.L. 104-114 ). Both measures strengthened U.S. economic sanctions on Cuba that had first been imposed in the early 1960s but also provided road maps for a normalization of relations, dependent upon significant political and economic changes in Cuba. Congress partially modified its sanctions-based policy toward Cuba when it enacted the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA; P.L. 106-387 , Title IX) allowing for U.S. agricultural exports to Cuba.", "Over the past decade, much of the debate in Congress over U.S. policy has focused on U.S. sanctions. In 2009, Congress took legislative action in an appropriations measure ( P.L. 111-8 ) to ease restrictions on family travel and travel for the marketing of agricultural exports, marking the first congressional action easing Cuba sanctions in almost a decade. The Obama Administration took further action in 2009 by lifting all restrictions on family travel and on cash remittances by family members to their relatives in Cuba. In 2011, the Obama Administration announced the further easing of restrictions on educational and religious travel to Cuba and on donative remittances to other than family members. ", "In December 2014, just after the adjournment of the 113 th Congress, President Obama announced a major shift in U.S. policy toward Cuba, moving away from a sanctions-based policy aimed at isolating Cuba toward a policy of engagement and a normalization of relations. The policy shift led to the restoration of diplomatic relations, the rescission of Cuba's designation as a state sponsor of international terrorism, and the easing of some restrictions on travel and commerce with Cuba. There was mixed reaction in Congress, with some Members of Congress supporting the change and others opposing it. Legislative initiatives in the 114 th Congress reflected this policy divide, with some bills introduced that would have further eased U.S. economic sanctions and others that would have blocked the policy shift and introduced new sanctions. ", "This report examines U.S. policy toward Cuba in the 115 th Congress. It is divided into three major sections analyzing Cuba's political and economic environment; U.S. policy toward Cuba; and selected issues in U.S.-Cuban relations, including restrictions on travel and trade, funding for democracy and human rights projects in Cuba and for U.S. government-sponsored radio and television broadcasting, migration, antidrug cooperation, U.S. property claims, and U.S. fugitives from justice in Cuba. Legislative initiatives in the 115 th Congress are noted throughout the report, and Appendix A lists enacted measures and other bills and resolutions. Appendix B provides links to U.S. government information and reports on Cuba. For more on Cuba from CRS, see", "CRS In Focus IF10045, Cuba: U.S. Policy Overview , by Mark P. Sullivan; CRS Report R43888, Cuba Sanctions: Legislative Restrictions Limiting the Normalization of Relations , by Dianne E. Rennack and Mark P. Sullivan; CRS Report RL31139, Cuba: U.S. Restrictions on Travel and Remittances , by Mark P. Sullivan; CRS Insight IN10798, U.S. Response to Injuries of U.S. Embassy Personnel in Havana, Cuba , by Mark P. Sullivan and Cory R. Gill; CRS Insight IN10788, Hurricanes Irma and Maria: Impact on Caribbean Countries and Foreign Territories , by Mark P. Sullivan; CRS Insight IN10722, Cuba: President Trump Partially Rolls Back Obama Engagement Policy , by Mark P. Sullivan; CRS Report R44119, U.S. Agricultural Trade with Cuba: Current Limitations and Future Prospects , by Mark A. McMinimy; CRS Report R44137, Naval Station Guantanamo Bay: History and Legal Issues Regarding Its Lease Agreements , by Jennifer K. Elsea and Daniel H. Else; and CRS Report R44714, U.S. Policy on Cuban Migrants: In Brief , by Andorra Bruno."], "subsections": []}, {"section_title": "Cuba's Political and Economic Environment", "paragraphs": [], "subsections": [{"section_title": "Brief Historical Background1", "paragraphs": ["Cuba became an independent nation in 1902. From its discovery by Columbus in 1492 until the Spanish-American War in 1898, Cuba was a Spanish colony. In the 19 th century, the country became a major sugar producer, with slaves from Africa arriving in increasing numbers to work the sugar plantations. The drive for independence from Spain grew stronger in the second half of the 19 th century, but independence came about only after the United States entered the conflict, when the USS Maine sank in Havana Harbor after an explosion of undetermined origin. In the aftermath of the Spanish-American War, the United States ruled Cuba for four years until Cuba was granted its independence in 1902. Nevertheless, the United States retained the right to intervene in Cuba to preserve Cuban independence and maintain stability in accordance with the Platt Amendment, which became part of the Cuban Constitution of 1901. The United States subsequently intervened militarily three times between 1906 and 1921 to restore order, but in 1934, the Platt Amendment was repealed.", "Cuba's political system as an independent nation often was dominated by authoritarian figures. Gerardo Machado (1925-1933), who served two terms as president, became increasingly dictatorial until he was ousted by the military. A short-lived reformist government gave way to a series of governments that were dominated behind the scenes by military leader Fulgencio Batista until he was elected president in 1940. Batista was voted out of office in 1944 and was followed by two successive presidents in a democratic era that ultimately became characterized by corruption and increasing political violence. Batista seized power in a bloodless coup in 1952, and his rule progressed into a brutal dictatorship that fueled popular unrest and set the stage for Fidel Castro's rise to power. ", "Castro led an unsuccessful attack on military barracks in Santiago, Cuba, on July 26, 1953. He was jailed but subsequently freed. He went into exile in Mexico, where he formed the 26 th of July Movement. Castro returned to Cuba in 1956 with the goal of overthrowing the Batista dictatorship. His revolutionary movement was based in the Sierra Maestra Mountains in eastern Cuba, and it joined with other resistance groups seeking Batista's ouster. Batista ultimately fled the country on January 1, 1959, leading to 47 years of rule under Fidel Castro until he stepped down from power provisionally in July 2006 because of poor health and ceded power to his brother Ra\u00fal Castro. ", "Although Fidel Castro had promised a return to democratic constitutional rule when he first took power, he instead moved to consolidate his rule, repress dissent, and imprison or execute thousands of opponents. Under the new revolutionary government, Castro's supporters gradually displaced members of less radical groups. Castro moved toward close relations with the Soviet Union, and relations with the United States deteriorated rapidly as the Cuban government expropriated U.S. properties. In April 1961, Castro declared that the Cuban revolution was socialist, and in December 1961, he proclaimed himself to be a Marxist-Leninist. Over the next 30 years, Cuba was a close ally of the Soviet Union and depended on it for significant assistance until the dissolution of the Soviet Union in 1991.", "From 1959 until 1976, Castro ruled by decree. In 1976, however, the Cuban government enacted a new Constitution setting forth the Cuban Communist Party (PCC) as the leading force in state and society, with power centered in a Political Bureau headed by Fidel Castro. Cuba's Constitution also outlined national, provincial, and local governmental structures. Since then, legislative authority has been vested in a National Assembly of People's Power that meets twice annually for brief periods, although the Assembly has permanent commissions that work throughout the year. When the Assembly is not in session, a Council of State, elected by the Assembly, acts on its behalf. According to Cuba's Constitution, the president of the Council of State is the country's head of state and government. Executive power in Cuba is vested in a Council of Ministers, also headed by the country's head of state and government, that is, the president of the Council of State. ", "Fidel Castro served as head of state and government through his position as president of the Council of State from 1976 until February 2008. Although he provisionally stepped down from power in July 2006 because of poor health and ceded power to his brother Ra\u00fal (who held the position of first vice president), Fidel still officially retained his position as head of state and government. National Assembly elections were held in January 2008, and Fidel was once again among the slate of candidates elected to the legislative body. But as the new Assembly was preparing to select the members of the Council of State from among its ranks in February 2008, Fidel announced that he would not accept the position as president of the Council of State. This announcement confirmed his departure as titular head of the Cuban government, and Ra\u00fal was selected as president. ", "More than 10 years after stepping down from power, Fidel Castro died in November 2016 at 90 years of age. While out of power, Fidel had continued to author essays published in Cuban media that cast a shadow on Ra\u00fal Castro's rule, and many Cubans reportedly believed that he had encouraged so-called hard-liners in Cuba's Communist Party and government bureaucracy to slow the pace of economic reforms advanced by his brother. His death accentuated the generational change that has already begun in the Cuban government and a passing of the older generation of the 1959 revolution. "], "subsections": []}, {"section_title": "Political Conditions", "paragraphs": ["Current President Miguel D\u00edaz-Canel Berm\u00fadez was selected by Cuba's National Assembly of People's Power to succeed 86-year-old Ra\u00fal Castro on April 19, 2018, after Castro completed his second five-year term as president. Most observers saw D\u00edaz-Canel, who had been serving as first vice president since 2013, as the \"heir apparent,\" but Ra\u00fal will continue in his position as first secretary of the PCC until 2021. Cuba does not have direct elections for president. Instead, Cuba's legislature, the National Assembly of People's Power, selects the president of the country's 31-member Council of State; the president, pursuant to Cuba's constitution (Article 74), serves as Cuba's head of state and government.", "Ra\u00fal Castro had succeeded his long-ruling brother Fidel Castro in 2006, serving provisionally until 2008 and then officially serving two five-year terms as president. He had announced in 2013 that he would not seek a third term, in line with his government's imposition of a two-term limit in 2012. Under Ra\u00fal, Cuba implemented gradual market-oriented economic policy changes over the past decade, but critics maintain that the government did not take enough action to foster sustainable economic growth. ", "Elections for the 605 member-National Assembly (as well as for 15 provincial assemblies) had been expected to be held in January 2018, but the elections were postponed until March 2018. The delay was not unexpected since Cuba's municipal elections, scheduled for September 2017, had been postponed to November 2017 because of significant damage caused by Hurricane Irma. The municipal contests involved the direct election of more than 12,000 officials among 27,000 candidates, but the electoral process was tightly controlled, with the government preventing 175 independent candidates from being nominated. Candidates for the National Assembly and provincial assemblies were also tightly controlled by candidacy commissions, and voters were presented with one candidate for each position."], "subsections": [{"section_title": "Cuba's Transition to a New President", "paragraphs": ["President D\u00edaz-Canel, who turned 58 a day after becoming president, is an engineer by training. His appointment as first vice president in 2013 made him the official constitutional successor in case Castro died or could not fulfill his duties. His appointment also represented a move toward bringing about generational change in Cuba's political system. D\u00edaz-Canel became a member of the Politburo in 2003 (the PCC's highest decisionmaking body), held top PCC positions in two provinces, and was higher education minister from 2009 until 2012, when he was tapped to become a vice president on the Council of State. ", "Although some observers believed D\u00edaz-Canel to be a moderate and more open to reform, a leaked video released in August 2017 appears to contradict that characterization. The video shows him speaking at a closed Communist Party meeting earlier in the year in which he strongly criticized dissidents and independent voices (including those arguing for reform of the socialist system), criticized the expansion of Cuba's private sector, and characterized U.S. efforts toward normalization under President Obama as an attempt to destroy the Cuban revolution. Some observers believe that D\u00edaz-Canel's rhetoric could have been aimed at increasing his acceptance by so-called hard-liners in Cuba's political system who are more resistant to change.", "Cuba's political transition is notable because it is the first time since the 1959 Cuban revolution that a Castro is not in charge of the government. A majority of Cubans today have lived under the rule only of the Castros. Ra\u00fal's departure can be viewed as a culmination of the generational leadership change that began several years ago in the government's lower ranks.", "It is also the first time that Cuba's head of government is not leader of the PCC. Although separating the roles of government and party leaders could elevate the role of government institutions over the PCC, Ra\u00fal Castro has indicated that he expects D\u00edaz-Canel to take over as first secretary of the PCC when his term as party leader ends. ", "Another element of the transition is the composition of the new 31-member Council of State. The National Assembly selected 72-year-old Salvador Vald\u00e9s Mesa as First Vice President, not from the younger generation, but also not from the historical revolutionary period. Vald\u00e9s Mesa, who already had been serving as one of five vice presidents and is on the Politburo, is the first Afro-Cuban to hold such a high government position. Of the Council of State's members, 45% are new, 48% are women, and 45% are Afro-Cuban or mixed race. Several older revolutionary-era leaders remained on the Council, including Ramiro Vald\u00e9s, 86 years old, who continues as a vice president. Nevertheless, the average age of Council of State members was 54, with 77% born after the 1959 Cuban revolution.", "Challenges for President D\u00edaz-Canel . Although most observers do not anticipate immediate major policy changes under President D\u00edaz-Canel, his government will face two enormous challenges\u2014reforming the economy and responding to desires for greater freedom. ", "Ra\u00fal Castro managed the opening of Cuba's economy to the world, with diversified trade relations, increased foreign investment, and a growing private sector. Yet the slow pace of economic reform has stunted economic growth and disheartened Cubans yearning for more economic freedom. From mid-2017 through much of 2018, the government appeared to backtrack by restricting private-sector development and slowing reforms, and for several years the government has delayed a long-anticipated end to its dual-currency system that creates economic distortion (see \" Economic Conditions \" below). A challenge for D\u00edaz-Canel will be moving forward with economic reforms opposed by some conservative elements in the party and state bureaucracy. ", "Few observers expect the D\u00edaz-Canel government to ease tight control over the political system, at least in the short to medium term, but it will need to contend with increasing calls for political reform and freedom of expression. The liberalization of some individual freedoms that occurred under Ra\u00fal Castro (such as legalization of cell phones and personal computers, and expansion of internet connectivity) has increased Cubans' appetite for access to information and the desire for more social and political expression. More broadly, if the next government continues to repress political dissidents and human rights activists, it will remain a point of contention in Cuba's foreign relations. ", "An important question looking ahead is the extent of influence that Castro and other revolutionary figures will have on government policy. Some observers assert that Ra\u00fal will continue to have a role in the decisionmaking process because he will head the PCC until 2021.The former president also headed up a commission making changes to Cuba's 1976 constitution (see discussion below). In July 2018, President D\u00edaz-Canel named his Council of Ministers or Cabinet, but a majority of ministers were holdovers from the Castro government, including those occupying key ministries such as defense, interior, finance, and foreign relations; just 9 of 26 ministers were new, including 2 vice presidents and 7 new ministers. After D\u00edaz-Canel marked his first 100 days in office in July 2018, some observers maintained that little had changed politically or economically.", "By the end of 2018, however, President D\u00edaz-Canel made several decisions that appeared to demonstrate his independence from the previous Castro government and indicate that he was more responsive to public concerns and criticisms. In early December, as described below in the section on \" Economic Conditions ,\" D\u00edaz-Canel eased forthcoming harsh regulations that were about to be implemented on the private sector; many observers believed these regulations would have shrunk the sector. Also in December, the Cuban government backed away from full implementation of controversial Decree 349 that had been issued in July 2018 to regulate artistic expression. After the unpopular decree triggered a flood of criticism from Cuba's artistic community, the government announced that the measure would be implemented gradually and applied with consensus (it remains to be seen, however, whether the government's action will satisfy those working in Cuba's vibrant arts community). In a third action in December, the government eliminated a proposed constitutional change that could have paved the way for same-sex marriage after strong public criticisms of the provision (see discussion below on constitutional changes).", "Constitutional Changes. As noted, Cuba is in the midst of a process to rewrite and update its 1976 constitution that will be subject to a referendum in February 2019. Drafted by a commission headed by Ra\u00fal Castro and approved by the National Assembly in July 2018, the proposed changes were subject to public debate in thousands of workplaces and community meetings into November. After considering public suggestions, the National Assembly made additional changes to the draft constitution, and the National Assembly approved this new version on December 22, 2018. Voters are now scheduled to go to the polls to approve the new constitution on February 24, 2019; it would then be approved in April 2019. ", "One of the more controversial changes made by the commission in its new draft in December was the elimination of a provision that would have redefined matrimony as gender neutral compared to the current constitution, which refers to marriage as the union between a man and a woman. Cuba's evangelical churches orchestrated a campaign against the provision, and Cuban bishops issued a pastoral message against it. The commission chose to eliminate the proposed provision altogether, with the proposed constitution remaining silent on defining matrimony, and maintained that the issue would be addressed in future legislation within two years. ", "Among other provisions of the draft constitution are the addition of an appointed prime minster to oversee government operations, an age limit of 60 to become president (Article 127) with a limit of two five-year terms (Article 126), and the right to own private property (Article 22). The draft constitution would still ensure the state's control over the economy and the role of centralized planning (Article 19), and the Communist Party still would be the only recognized party (Article 5)."], "subsections": []}]}, {"section_title": "Human Rights", "paragraphs": ["The Cuban government has a poor record on human rights, with the government sharply restricting freedoms of expression, association, assembly, movement, and other basic rights since the early years of the Cuban revolution. The government has continued to harass members of human rights and other dissident organizations. These organizations include the Ladies in White ( Las Damas de Blanco ), currently led by Berta Soler, formed in 2003 by the female relatives of the \"group of 75\" dissidents arrested that year, and the Patriotic Union of Cuba (UNPACU), led by Jos\u00e9 Daniel Ferrer Garc\u00eda, established in 2011 by several dissident groups with the goal of fighting peacefully for civil liberties and human rights; in August 2018, the Cuban government imprisoned Ferrer arbitrarily for 11 days with no access to his family, according to Amnesty International. In recent years, several political prisoners have conducted hunger strikes; two hunger strikers died\u2014Orlando Zapata Tamayo in 2010 and Wilman Villar Mendoza in 2012. In February 2017, Hamel Santiago Maz Hern\u00e1ndez, a member of UNPACU who had been imprisoned since June 2016 after being accused of descato (lack of respect for the government), died in prison. ", "Although the human rights situation in Cuba remains poor, the country has made some advances in recent years. In 2008, Cuba lifted a ban on Cubans staying in hotels that previously had been restricted to foreign tourists in a policy that had been pejoratively referred to as \"tourist apartheid.\" In recent years, as the government has enacted limited economic reforms, it has been much more open to debate on economic issues. In 2013, Cuba eliminated its long-standing policy of requiring an exit permit and letter of invitation for Cubans to travel abroad. The change has allowed prominent dissidents and human rights activists to travel abroad and return to Cuba. In recent years, the Cuban government has moved to expand internet connectivity through \"hotspots\" first begun in 2015 and through the launching of internet capability on cellphones in late 2018. As noted below, short-term detentions for political reasons declined significantly in 2017 and 2018, although there were still almost 2,900 such detentions in 2018. ", "Congressional Resolutions. On April 11, 2018, the Senate approved S.Res. 224 (Durbin), which commemorated the legacy of democracy activist Oswaldo Pay\u00e1, called on the Cuban government to allow an impartial, third-party investigation into the circumstances surrounding Pay\u00e1's death in a car accident in July 2012, and called on the Cuban government to cease violating human rights and begin providing democratic freedoms to Cuban citizens. In 2012, the Senate had approved S.Res. 525 (Nelson), which honored the life and legacy of Pay\u00e1 and also called for an impartial, third-party investigation. Pay\u00e1 had founded the Christian Liberation Movement in 1988, a civil society group advocating peaceful democratic change and respect for human rights. He founded the Varela Project in 1996, which collected thousands of signatures supporting a national plebiscite for political reform in Cuba.", "Two similar but not identical resolutions introduced in May 2018, S.Res. 511 (Rubio) and H.Res. 916 (Diaz-Balart), would have honored Las Damas de Blanco as the recipient of the 2018 Milton Friedman Prize for Advancing Liberty. The resolutions also would have expressed solidarity and commitment to the democratic aspirations of the Cuban people and call on the Cuban government to allow members of the group to travel freely.", "Political Prisoners. On October 16, 2018, the State Department's U.S. Mission to the United Nations launched a campaign to call attention to the plight of Cuba's \"estimated 130 political prisoners.\" Cuban diplomats attempted to disrupt the event by making noise and shouting, although their actions appeared to call more attention to the event and, for some observers, demonstrated the Cuban government's disdain for freedom of expression. Secretary of State Mike Pompeo wrote an open letter to Cuban Foreign Minister Bruno Rodriguez on December 7, 2018, asking for a substantive explanation for the continued detention of eight specific political prisoners and an explanation of the charges and evidence against other individuals held as political prisoners.", "In January 2019, the Havana-based Cuban Commission for Human Rights and National Reconciliation (CCDHRN) estimated that Cuba held some 130-140 political prisoners in some 150 prisons and internment camps. In June 2018, the CCDHRN made public a list with 120 prisoners for political reasons, consisting of 96 opponents or those disaffected toward the regime (over 40 are members of UNPACU) and 24 accused of employing or planning some form of force or violence. ", "According to the State Department's human rights report on Cuba covering 2017, issued in April 2018, the exact number of political prisoners was difficult to determine, but human rights organizations estimated that there were 65 to 100 political prisoners. The report noted the lack of governmental transparency, along with its systematic violations of due process rights, which masked the nature of criminal charges and prosecutions and allowed the government to prosecute peaceful human rights activists for criminal violations or \"dangerousness.\" As noted in the report, the government refused international humanitarian organizations and the United Nations access to its prisons and detention centers, and closely monitored and often harassed domestic organizations that tracked political prisoner populations. ", "Political activist Dr. Eduardo Cardet, designated by Amnesty International (AI) as a \"prisoner of conscience,\" has been imprisoned since November 2016 for publicly criticizing Fidel Castro and was sentenced to three years in prison. AI maintains that Cardet, a leader in the dissident Christian Liberation Movement, was sent to prison solely for peacefully exercising his right to freedom of expression and has called for his immediate release. The human rights group issued an urgent action notice in January 2018 calling attention to Cardet's case after he was attacked by several prisoners in December 2017. In June 2018, AI issued another urgent action notice for Cardet, maintaining that Cuban authorities suspended family visiting rights for him because of his family's activism on the case.", "A second AI-designated prisoner of conscience, Cuban biologist Dr. Ariel Ruiz Urquiola, was sentenced to a year in prison in May 2018 for the crime of disrespecting authority ( desacato ). Urquiola reportedly had referred to several Cuban government forest rangers as \"rural guards,\" a derogatory reference to a repressive agency before the Cuban revolution. The rangers had been checking whether Urquiola had proper permits to cut down several trees and build a fence, which reportedly he had. In June 2018, AI issued two urgent action notices on Urquiola calling for his release and for visits while imprisoned. He was conditionally released from prison on July 3, 2018, following a prolonged hunger strike.", "On October 15, 2018, the Cuban government released UNPACU activist Tom\u00e1s N\u00fa\u00f1ez Magdariaga from prison after a 62-day hunger strike. Magdariaga had been sentenced to a year in jail for allegedly making threats to a security agent. The State Department had called for his release, maintaining he was falsely charged and convicted in a sham trial. Amnesty International had expressed concern for his health and called on Cuba to make public evidence against him.", "Over the past decade, the Cuban government has released large numbers of political prisoners at various junctures. In 2010 and 2011, with the intercession of the Cuban Catholic Church, the government released some 125 political prisoners, including the remaining members of the \"group of 75\" arrested in 2003 who were still in prison. In the aftermath of the December 2014 shift in U.S. policy toward Cuba, the Cuban government released another 53 political prisoners, although several were subsequently rearrested. In 2017, the Cuban government released several political prisoners that had been dubbed \"prisoners of conscience\" by Amnesty International. This included graffiti artist Danilo Maldonado Machado (known as El Sexto) who subsequently testified before a Senate Foreign Relations Committee hearing in February 2017. ", "Short- T erm Detentions. Short-term detentions for political reasons increased significantly from 2010 through 2016, a reflection of the government's change of tactics in repressing dissent away from long-term imprisonment. The CCDHRN reports that the number of such detentions grew annually from at least 2,074 in 2010 to at least 8,899 in 2014. The CCDHRN reported a very slight decrease to 8,616 short-term detentions in 2015, but this figure increased again to at least 9,940 detentions for political reasons in 2016, the highest level recorded by the human rights organization. ", "Since 2017, however, the CCDHRN has reported a significant decline in short-term detentions. In 2017, the number of short-term detentions fell to 5,155, almost half the number detained in 2016 and the lowest level since 2011. The decline in short-term detentions continued in 2018, with 2,873 reported short-term detentions, almost a 45% decline from 2017 and the lowest level since 2010. ", "Bloggers and Civil Society Groups. Over the past several years, numerous independent Cuban blogs have been established. Cuban blogger Yoani S\u00e1nchez has received considerable international attention since 2007 for her website, Generaci\u00f3n Y , which includes commentary critical of the Cuban government. In May 2014, S\u00e1nchez launched an independent digital newspaper in Cuba, 14 y medio , available on the internet, distributed through a variety of methods in Cuba, including CDs, USB flash drives, and DVDs.", "The Catholic Church became active in broadening the debate on social and economic issues through its publications. The Church also has played a role in providing social services, including soup kitchens, services for the elderly and other vulnerable groups, after-school programs, job training, and even college coursework. ", "Estado de SATS , a forum founded in 2010 by human rights activist Antonio Rodiles, has had the goal of encouraging open debate on cultural, social, and political issues. The group has hosted numerous events and human rights activities over the years, but it also has been the target of government harassment, as has its founder. ", "Other notable online forums and independent or alternative media that have developed include Cuba Posible (founded by two former editors of the Catholic publication Espacio Laical ) , Periodismo del Barrio (focusing especially on environmental issues), El Toque , and O nCuba (a Miami-based digital magazine with a news bureau in Havana).", "Trafficking in Persons. The State Department released its 2018 Trafficking in Persons (TIP) Report on June 28, 2018, and for the fourth consecutive year Cuba was placed on the Tier 2 Watch List (in prior years, Cuba had Tier 3 status). Tier 3 status refers to countries whose governments do not fully comply with the minimum standards for combatting trafficking and are not making significant efforts to do so. In contrast, Tier 2 Watch List status refers to countries whose governments, despite making significant efforts, do not fully comply with the minimum standards and still have some specific problems (e.g., an increasing number of victims or failure to provide evidence of increasing antitrafficking efforts) or whose governments have made commitments to take additional antitrafficking steps over the next year. A country normally is automatically downgraded to Tier 3 status if it is on the Tier 2 Watch List for three consecutive years unless the Secretary of State authorizes a waiver. The State Department issued such a waiver for Cuba in 2017 because the government had devoted sufficient resources to a written plan that, if implemented, would constitute significant efforts to meet the minimum standards for the elimination of trafficking. In the 2018 TIP report, the State Department again issued a waiver for Cuba allowing it to remain on the Tier 2 Watch List for the fourth consecutive year. Such a waiver, however, is only permitted for two years. After the third year, the country must either go up to Tier 2 or down to Tier 3.", "The State Department initially upgraded Cuba from Tier 3 to Tier 2 Watch List status in its 2015 TIP report because of the country's progress in addressing and prosecuting sex trafficking, including the provision of services to sex-trafficking victims, and its continued efforts to address sex tourism and the demand for commercial sex. ", "In its 2016 TIP report, the State Department maintained that Cuba remained on the Tier 2 Watch List for the second consecutive year because the country did not improve antitrafficking efforts compared to 2015. Nevertheless, the 2016 report noted that the Cuban government continued efforts to address sex trafficking, including prosecution and conviction, and the provision of services to victims. The State Department noted that the Cuban government released a report on its antitrafficking efforts in October 2015; that multiple government ministries were engaged in antitrafficking efforts; and that the government funded child protection centers and guidance centers for women and families, which served crime victims, including trafficking victims. However, the report also noted that the Cuban government did not prohibit forced labor, report efforts to prevent forced labor, or recognize forced labor as a possible issue affecting Cubans in medical missions abroad. ", "In its 2017 TIP report, the State Department maintained that the Cuban government demonstrated significant efforts during the reporting period by prosecuting and convicting sex traffickers, providing services to sex trafficking victims, releasing a written report on its antitrafficking efforts, and coordinating antitrafficking efforts across government ministries. The State Department noted, however, that the Cuban penal code did not criminalize all forms of trafficking and did not prohibit forced labor, report efforts to prevent forced labor domestically, or recognize forced labor as a possible issue affecting Cubans working in medical missions abroad.", "In its 2018 TIP report, the State Department noted the Cuban government's significant efforts of prosecuting and convicting more traffickers, creating a directorate to provide specialized attention to child victims of crime and violence, including trafficking, and publishing its antitrafficking plan for 2017-2020. The State Department also noted, however, that the Cuban government did not demonstrate increasing efforts compared to the previous reporting period. It maintained that the government did not criminalize most forms of forced labor or sex trafficking for children ages 16 or 17, and did not report providing specialized services to identified victims. The State Department also made several recommendations for Cuba to improve its antitrafficking efforts, including the enactment of a comprehensive antitrafficking law that prohibits and sufficiently punishes all forms of trafficking. ", "Engagement between U.S. and Cuban officials on antitrafficking issues has increased in recent years. In January 2017, U.S. officials met with Cuban counterparts in their fourth such exchange to discuss bilateral efforts to address human trafficking. Subsequently, on January 16, 2017, the United States and Cuba signed a broad memorandum of understanding on law enforcement cooperation in which the two countries stated their intention to collaborate on the prevention, interdiction, monitoring, and prosecution of transnational or serious crimes, including trafficking in persons. In February 2018, the State Department and the Department of Homeland Security hosted meetings in Washington, DC, with Cuban officials on efforts to combat trafficking in persons."], "subsections": []}, {"section_title": "Economic Conditions", "paragraphs": ["Cuba's economy continues to be largely state-controlled, with the government owning most means of production and employing a majority of the workforce. Key sectors of the economy that generate foreign exchange include the export of professional services (largely medical personnel to Venezuela); tourism, which has grown significantly since the mid-1990s, with an estimated 4.75 million tourists visiting Cuba in 2018; nickel mining, with the Canadian mining company Sherritt International involved in a joint investment project; and a biotechnology and pharmaceutical sector that supplies the domestic health care system and has fostered a significant export industry. Remittances from relatives living abroad, especially from the United States, also have become an important source of hard currency, amounting to some $3 billion in 2016. The once-dominant sugar industry has declined significantly over the past 20 years. Because of drought, damage from Hurricane Irma, and subsequent months of heavy rains, the 2017-2018 sugar harvest dropped by almost 44% to just over 1 million metric tons (MT), compared to 1.8 million MT the previous year. The outlook for the 2018-2019 harvest is 1.5 million MT, almost a 50% improvement; for comparison, in 1990, Cuba produced 8.4 million MT of sugar. ", "For more than 15 years, Cuba has depended heavily on Venezuela for its oil needs. In 2000, the two countries signed a preferential oil agreement (essentially an oil-for-medical-personnel barter arrangement) that until recently provided Cuba with some 90,000-100,000 barrels of oil per day, about two-thirds of its consumption. Cuba's goal of becoming a net oil exporter with the development of its offshore deepwater oil reserves was set back in 2012, when the drilling of three exploratory oil wells was unsuccessful. This setback, combined with Venezuela's economic difficulties, has raised Cuban concerns about the security of the support received from Venezuela. Since 2015, Venezuela has cut the amount of oil that it sends to Cuba, and Cuba has increasingly turned to other suppliers for its oil needs, including Russia and Algeria. In the summer of 2018, from June through August, Venezuela reportedly resumed exporting a key crude oil to Venezuela that it had suspended in 2017 due to needs in Venezuela. ", "The government of Ra\u00fal Castro implemented a number of economic policy changes, but economists were disappointed that more far-reaching reforms were not implemented. At the PCC's seventh party congress, held in April 2016, Ra\u00fal Castro reasserted that Cuba would move forward with updating its economic model \"without haste, but without pause.\" A number of Cuba's economists have pressed the government to enact more far-reaching reforms and embrace competition for key parts of the economy and state-run enterprises. These economists criticize the government's continued reliance on central planning and its monopoly on foreign trade. ", "Economic Growth. Cuba experienced severe economic contraction from 1990 to 1993, with an estimated decline in gross domestic product ranging from 35% to 50% when the Soviet Union collapsed and Russian financial assistance to Cuba practically ended. Growth resumed after that time, as Cuba moved forward with some limited market-oriented economic reforms, and growth was especially strong in the 2004-2007 period, averaging more than 9% annually. The economy benefitted from the growth of the tourism, nickel, and oil sectors and from support from Venezuela and China in terms of investment commitments and credit lines. The economy was hard-hit by several hurricanes and storms in 2008 and the global financial crisis in 2009, with the government forced to implement austerity measures that slowed growth. From 2010 to 2015, Cuba's economy experienced low to moderate economic growth, ranging from a low of 1% in 2014 to a high of 4.4% in 2015. In 2016, however, the economy grew by just 0.5% because of lower export earnings, reduced support from Venezuela, and austerity measures (preliminary Cuban government estimates had forecast an economic contraction of 0.9%, but this was revised to 0.5% growth in January 2018).", "In September 2017, Hurricane Irma struck in September, killing 10 people in Cuba and affecting more than 2 million people along 300 miles of the northern coast. The storm damaged infrastructure (electric power, water and sanitation systems), the agricultural sector, and tourism facilities, and it flooded low-lying areas of Havana.", "Nevertheless, the Cuban government reports that the economy grew 1.8% in 2017 and an estimated 1.2% in 2018, and it predicts 1.5% growth in 2019. President D\u00edaz-Canel has said that austerity measures begun in 2016 will continue in 2019. The economy has been hurt by reduced support from Venezuela over the past several years and the unexpected December 2018 ending of Cuba's program sending medical professionals to Brazil, which had provided Cuba with some $400 million a year. The Economist Intelligence Unit (EIU) predicts economic growth will slow to 0.8% in 2019 and 0.4% in 2020, as tourism grows more moderately because of a slowdown in arrivals from the United States. According to the EIU, the biggest risk to Cuba's economic performance is the complete elimination of support from Venezuela.", "Private Sector. The Cuban government employs a majority of the labor force, but the government has been allowing more private-sector activities. In 2010, the government opened up a wide range of activities for self-employment and small businesses to almost 200 categories of work allowed; the number of self-employed or cuentapropistas rose from 144,000 in 2009 to about 588,000 as of October 2018. Analysts contend that the government needs to do more to aid the development of the private sector, including an expansion of authorized activities to include more white-collar occupations and state support for credit to support small businesses. ", "Beginning in mid-2017, the government took several steps to restrict private-sector development. In August 2017, it stopped issuing new licenses for 27 private-sector occupations, including for private restaurants and for renting private residences; closed a fast-growing cooperative that had provided accounting and business consultancy services; and put restrictions on construction cooperatives. The government maintains that it took the actions to \"perfect\" the functioning of the private sector and curb illicit activities, such as the sale of stolen state property, tax evasion, and labor violations.", "In February 2018, press reports provided details about draft government regulations being considered that would increase state control over the private sector, limit business licenses to a single activity, reduce and consolidate the current 200 categories of work to 123 categories, and limit the size of private restaurants. The regulations ultimately were released in July 2018 and were to take effect in December, at the same time the government would resume issuing licenses for business activities that had been frozen since August 2017. The objectives of the new regulations were to increase taxation oversight of the private sector and to control the concentration of wealth and rising inequality, but many observers believed the regulations were aimed at stifling private-sector growth because of the government's concerns regarding that sector's independence from the government.", "Just two days before the regulations were to go into effect, President D\u00edaz-Canel did an about-face and announced on December 5, 2018, that some aspects of the regulations viewed as especially egregious by the private sector would be eliminated or eased. Most significantly, individuals would not be limited to one licensed activity; restaurants, bars, and cafeterias would not be not subject to a limit of 50 seats; and the requirements for maintaining a minimum balance in bank accounts would be reduced from the equivalent of three months of tax payments to two months and would apply to just 6 of the 123 categories of employment. Analysts view the backtracking as an indication that President D\u00edaz-Canel is willing to make policy changes in response to public opinion and as a sign that the government does not want to shrink the private sector.", "Currency Unification/Reform. A major challenge for the development of the private sector is the lack of money in circulation. Most Cubans do not make enough money to support the development of small businesses. Cuba has two official currencies\u2014Cuban pesos (CUPs) and Cuban convertible pesos (CUCs); for personal transaction, the exchange rate for the two currencies is CUP24/CUC1. Most people are paid CUPs, and the minimum monthly wage in Cuba is 225 CUPs (just over $9), although this minimum wage does not apply to the nonstate sector. According to the State Department, even with other government support such as free education, housing, some food, and subsidized medical care, the average monthly wage of 700 CUPs ($29) does not provide for a reasonable standard of living. For increasing amounts of consumer goods, CUCs are used. Cubans with access to foreign remittances or who work in private-sector activities catering to tourists and foreign diplomats have fared better than those serving the Cuban market.", "The Cuban government announced in 2013 that it would end its dual-currency system and move toward monetary unification, but the action has been delayed for several years. Currency reform is ultimately expected to lead to productivity gains and improve the business climate, but an adjustment would create winners and losers. At the PCC's April 2016 Congress, Ra\u00fal Castro called for moving toward a single currency as soon as possible to resolve economic distortions. In January 2018, EU officials visiting Cuba offered technical assistance regarding currency reform and unification. Some economists assert, however, that Cuba is unlikely to go forward with currency reform this year because of the country's deep structural economic problems and because of the ongoing constitutional reform process.", "Agricultural Sector. A reform effort under Ra\u00fal Castro focused on the agricultural sector, a vital issue because Cuba reportedly imports some 70%-80% of its food needs, according to the World Food Programme. In an effort to boost food production, the government turned over idle land to farmers and given farmers more control over how to use their land and what supplies to buy. Despite these and other efforts, overall food production has been significantly below targets. In addition, as noted above, Hurricane Irma caused damage to the agricultural sector, particularly sugar, in September 2017. As a result, in the first six months of 2018, overall food production reportedly decreased about 10% to 15% compared to the same period in 2017.", "Foreign Investment. The Cuban government adopted a new foreign investment law in 2014 with the goal of attracting increased levels of foreign capital to the country. The law cuts taxes on profits by half, to 15%, and exempts companies from paying taxes for the first eight years of operation. The law also eliminates employment or labor taxes, although companies still must hire labor through state-run companies, with agreed wages. A fast-track procedure for small projects reportedly streamlines the approval process, and the government agreed to improve the transparency and time of the approval process for larger investments. ", "A Mariel Special Development Zone (ZED Mariel) was established in 2014 near the port of Mariel to attract foreign investment. To date, ZED Mariel has approved some 43 investment projects, which are at various stages of development. In November 2017, Cuba approved a project for Rimco (the exclusive dealer for Caterpillar in Puerto Rico, the U.S. Virgin Islands, and the Eastern Caribbean) to become the first U.S. company to be located in the ZED Mariel. Rimco plans to set up a warehouse and distribution center in 2018 to distribute Caterpillar equipment. In September 2018, the Roswell Park Comprehensive Cancer Center of Buffalo, NY, announced it was entering into a joint venture with Cuba's Center for Molecular Immunology focused on the development of cancer therapies; the joint venture will be located in the ZED Mariel. ", "According to Cuba's Minister of Foreign Trade and Investment Rodrigo Malmierca, Cuba has signed more than 200 investment projects valued at $5.5 billion since it made changes to its investment law in 2014, with $1.5 billion of that in 2018. The actual amount invested reportedly is much less, with about $500 million annually. In November 2018, the Cuban government updated its wish list for foreign investment, which includes 525 projects representing potential investment of $11.6 billion in such high-priority areas as tourism, agriculture and food production, oil, the industrial sector, and biotechnology."], "subsections": []}, {"section_title": "Cuba's Foreign Relations", "paragraphs": ["During the Cold War, Cuba had extensive relations with, and support from, the Soviet Union, which provided billions of dollars in annual subsidies to sustain the Cuban economy. This subsidy system helped to fund an activist foreign policy and support for guerrilla movements and revolutionary governments abroad in Latin America and Africa. With an end to the Cold War, the dissolution of the Soviet Union, and the loss of Soviet financial support, Cuba was forced to abandon its revolutionary activities abroad. As its economy reeled from the loss of Soviet support, Cuba was forced to open up its economy and engage in economic relations with countries worldwide. In ensuing years, Cuba diversified its trading partners, although Venezuela under populist leftist President Hugo Ch\u00e1vez (1999-2013) became one of Cuba's most important partners, leading to Cuba's dependence on Venezuela for oil imports. In 2017, the leading sources of Cuba's imports in terms of value were Venezuela (18.1%, down from 40% in 2014), China (16.3%), and Spain (10.8%); the leading destinations of Cuban exports were Canada (19.4%), Venezuela (15.6%), China (5.2%), and Spain (8.6%).", "Russia. Relations with Russia, which had diminished significantly in the aftermath of the Cold War, have strengthened somewhat over the past several years. Cuban President D\u00edaz-Canel visited Russia for three days beginning November 1, 2018, after which he visited North Korea, China, Vietnam, and Laos. ", "Russia's interest in the broader Latin America and Caribbean region appeared to increase in response to U.S. actions taken in the aftermath of Russia's intervention in Georgia in 2008 and Russia's annexation of the Crimea region and military intervention in Ukraine in 2014. For many observers, one of Russia's main objectives in the Latin American and Caribbean region is to demonstrate that it is a global power that can operate in the U.S. neighborhood, or \"backyard.\" ", "Just before a 2014 trip to Cuba, Russian President Vladimir Putin signed into law an agreement writing off 90% of Cuba's $32 billion Soviet-era debt, with some $3.5 billion to be paid back by Cuba over a 10-year period that would fund Russian investment projects in Cuba. In the aftermath of Putin's trip, press reports claimed that Russia would reopen its signals intelligence facility at Lourdes, Cuba, which had closed in 2002, but President Putin denied that his government would reopen the facility.", "Trade relations between Russia and Cuba have not been significant, although they grew in 2017 because of new Russian oil exports to Cuba. According to Russian trade statistics, total trade between the two countries was valued at $290 million in 2017, an almost 17% increase over 2016. This represented less than 2% of Cuba's trade worldwide. Russia's imports from Cuba amounted to almost $14 million in 2017, led by pharmaceutical products and rum, while Russia's exports to Cuba amounted to almost $277 million, led by motor vehicles (and parts) and oil.", "Russian energy companies have been involved in oil exploration in Cuba. Gazprom was in a partnership with the Malaysian state oil company, Petronas, which conducted unsuccessful deepwater oil drilling off Cuba's western coast in 2012. The Russian oil company Zarubezhneft began drilling in Cuba's shallow coastal waters east of Havana in late 2012 but stopped work in 2013 because of disappointing results. In 2014, Russian energy companies Zarubezhneft and Rosneft signed an agreement with Cuba's state oil company Uni\u00f3n Cuba- Petr\u00f3leo (CUPET) for the development of an offshore exploration block, and Rosneft agreed to cooperate with Cuba in studying ways to optimize existing production at mature fields. In 2017, Rosneft began to ship oil to Cuba, a result of Cuba's efforts to diversify its sources of foreign oil because of Venezuela's diminished capacity.", "Russian officials publicly welcomed the improvement in U.S.-Cuban relations under the Obama Administration, although some viewed the change in U.S. policy as setback for Russian overtures in the region. As U.S.-Cuban normalization talks were beginning in Havana in January 2015, a Russian intelligence ship docked in Havana. In October 2016, a Russian military official maintained that Russia was reconsidering reestablishing a military presence in Cuba (and Vietnam), although there was no indication that Cuba would be open to the return of the Russian military. The two countries signed a bilateral cooperation agreement in December 2016 for Russia's support to help Cuba modernize its defense sector until 2020.", "In June 2017, when President Trump announced a partial rollback of the U.S. policy of engagement with Cuba, Russia's foreign ministry criticized the president for resorting to \"Cold War\" rhetoric. Some reports indicate that as U.S. relations with Cuba have deteriorated over the past year, Russia has been attempting to further increase its ties to Cuba, with high-level meetings between Cuban and Russian officials and increased economic, military, and cultural engagement. In March 2018, the same Russian intelligence ship noted above again stopped in Havana.", "For Cuba, a deepening of relations with Russia could help economically, especially regarding oil, and also could serve as a counterbalance to the partial rollback of U.S. engagement policy by the Trump Administration. However, President D\u00edaz-Canel's November 2018 trip to Russia reportedly did not yield significant results. Press reports indicate that Cuba received a $50 million credit line for purchases of Russian military weapons and spare parts and contracts valued at more than $260 million (some that already were in the pipeline) to modernize three power plants and a metal processing plant and upgrade Cuba's railway system.", "The U.S. Southern Command's February 2018 posture statement presented to Congress expressed concern about Russia's increased role in the Western Hemisphere. It stated that Russia's expanded port and logistics access in Cuba (as well as Nicaragua and Venezuela) provide the country \"with persistent, pernicious presence, including more frequent maritime intelligence collection and visible force projection in the Western Hemisphere.\" It stated that Russia's robust relationships with these three countries provide it \"with a regional platform to target U.S. and partner nation facilities and assets, exert negative influence over undemocratic governments, and employ strategic options in the event of a global contingency.\" Along these lines, there has been concern in Congress about the role of Russia in Latin America, including in Cuba. The conference report to the John S. McCain National Defense Authorization Act for FY2019, P.L. 115-232 ( H.R. 5515 ), requires the Defense Intelligence Agency to submit a report on security cooperation between Russia, and Cuba, Nicaragua, and Venezuela, including a description of any military or intelligence infrastructure, facilities, and assets developed by Russia in the three countries and any associated agreements or understanding between Russia and the three countries.", "China. During the Cold War, Cuba and China did not have close relations because of Sino-Soviet tensions, but bilateral relations with China have grown closer over the past 15 years, including a notable increase in trade. Since 2004, Chinese leaders have made a series of visits to Cuba: then-President Hu Jintao visited in 2004 and 2008; President Xi Jinping visited in 2014 (and when he was vice president in 2011); and, most recently, Chinese Premier Li Keqiang visited in 2016, reportedly signing some 30 economic cooperation agreements. Ra\u00fal Castro also visited China in 2008 and 2012; during the 2012 trip, he signed cooperation agreements focusing on trade and investment issues. In January 2018, Ra\u00fal Castro met with Song Tong, a special envoy of President Xi Jinping, with discussion reportedly focused on strengthening ties. Castro noted that the Cuban Communist Party (PCC) would like to promote exchanges with its Chinese counterpart in an effort to help upgrade Cuba's social and economic model. ", "More recently, as noted above, Cuban President D\u00edaz-Canel visited China in early November 2018. According to Chinese state media, President Xi called for a long-term plan to promote the development of China-Cuba ties and said that China would welcome Cuba's participation in the Belt and Road Initiative, which is focused on infrastructure development around the world. President Xi called on both countries to enhance cooperation on trade, energy, agriculture, tourism, and biopharmaceutical manufacturing. ", "While Cuba's relationship with China undoubtedly has an ideological component since both are the among the world's remaining communist regimes, economic linkages and cooperation appear to be the most significant component of bilateral relations.", "According to Cuban trade statistics, total Cuba-China trade in 2017 was valued at almost $2 billion (accounting for 16.1% of Cuba's trade worldwide), with Cuba exporting $364 million to China and importing almost $1.7 billion. This was a 21% drop from 2016, when total Cuba-China trade almost reached $2.6 billion, and an almost 30% drop in Cuba's imports from China in 2016. The fall in imports from China in reflects Cuba's difficult economic situation as Venezuelan support has diminished. In response to a cash crunch, the Cuban government has cut imports and reduced the use of fuel and electricity. In contrast to declining imports from China, Cuba's exports to China increased by about 42% in 2017, led by increased exports of seafood, nickel, and to a lesser extent cigars. According to Chinese trade statistics, the lion's share of Cuba's exports to China in 2017 were sugar (53%), nickel (35%), and fish (almost 9%), whereas Cuba's imports from China included electrical machinery and equipment (22%), motor vehicles (17%), machinery and appliances (15%), and a wide variety of other industrial and consumer products.", "China reportedly had been reluctant to invest in Cuba because of the uninviting business environment, but that has begun to change over the past several years. In 2015, the Chinese cellphone company Huawei reached an agreement with the Cuban telecommunications company ETECSA to set up Wi-Fi hotspots at public locations, and is helping to wire homes. In 2016, the Chinese company Haier set up a plant assembling laptops and tablets in Cuba. Over the past two years, Chinese financing has been supporting the modernization of a port in Santiago Cuba. Other planned Chinese investment projects reportedly include pharmaceuticals as well as the tourism sector involving two hotels and a golf course.", "European Union. The European Union (EU) and Cuba held seven rounds of talks from 2014 to 2016 on a Political Dialogue and Cooperation Agreement covering political, trade, and development issues; ultimately, a cooperation agreement was reached and initialed in Havana in March 2016 and the European Council signed the agreement in December 2016. The agreement was submitted to the European Parliament, which overwhelmingly endorsed the agreement in early July 2017, welcoming it as a framework for relations and emphasizing the importance of the human rights dialogue between the EU and Cuba. The agreement will enter into force in full after it has been ratified in all EU member states, but the provisional application of the agreement began in November 2017. ", "The new cooperation agreement replaces the EU's 1996 Common Position on Cuba, which stated that the objective of EU relations with Cuba included encouraging \"a process of transition to pluralist democracy and respect for human rights and fundamental freedoms.\" The position also had stipulated that full EU economic cooperation with Cuba would depend upon improvements in human rights and political freedom. Nevertheless, the new agreement states that a human rights dialogue will be established within the framework of the overall political dialogue and has numerous provisions related to democracy, human rights, and good governance. In October 2018, the EU and Cuba held their first human rights dialogue under the agreement, with the meeting addressing issues related to civil and political rights, economic, social and cultural rights, and multilateral cooperation.", "As noted above, EU officials visiting Cuba in January 2018 offered to provide Cuba with technical assistance regarding the country's long-awaited currency unification (see \" Economic Conditions ,\" above).", "Venezuela and Other Latin American Countries. For more than 15 years, Venezuela has been a significant source of support for Cuba. Dating back to 2000 under populist President Hugo Ch\u00e1vez, Venezuela began providing subsidized oil and investment to Cuba. For its part, Cuba has sent thousands of personnel to Venezuela. Cuba has been concerned about the future of Venezuelan financial support, however, as a result of Ch\u00e1vez's death in 2013 and Venezuela's mounting economic and political challenges since 2014 due to the rapid decline in oil prices and the unpopularity of the increasingly authoritarian regime of President Nicol\u00e1s Maduro. As noted above, oil imports from Venezuela have declined, leading to Cuba's imposition of austerity measures and contributing to economic contraction. ", "Estimates of the number of Cuban personnel in Venezuela vary, but a 2014 Brookings study reported that \"by most accounts there are 40,000 Cuban professionals in Venezuela,\" with 75% of those healthcare workers. The roughly 30,000 healthcare personnel include doctors and nurses, while the balance of Cuban personnel in Venezuela includes teachers, sports instructors, military advisers, and intelligence operatives. According to the Brookings study, various sources estimate that the number of Cuban military and intelligence advisers in Venezuela range from hundreds to thousands, coordinated by Cuba's military attach\u00e9 in Venezuela. The extent to which the level of Cuban personnel in Venezuela has declined because of the drop in Venezuelan oil exports to Cuba and Venezuela's deepening economic crisis is uncertain, but Cuba may have withdrawn some personnel.", "Cuba also is engaged in Latin America beyond its close relations with Venezuela. Cuba is a member of the Bolivarian Alliance for the Americas, a Venezuelan-led integration and cooperation scheme founded in 2004 that has been weakened by Venezuela's economic and political decline. For several years, Cuba also hosted peace talks between the Colombian government and the Revolutionary Armed Forces of Colombia, which culminated in a peace agreement in 2016. ", "Brazil was a major investor in the development of the port of Mariel, west of Havana, from 2009 to 2014, although in 2018 Cuba missed payments to Brazil's development bank on loans for the project. In 2013, Cuba began deploying thousands of doctors to rural Brazil in a program known as Mais M\u00e9dicos , with Cuba earning hard currency for supplying the medical personnel. Even before his inauguration in January 2019, Brazil's new right-wing president, Jair Bolsonaro, espoused a more confrontational policy approach toward Cuba by warning in November 2018 that he may break diplomatic relations with Cuba and abolish the medical assistance program. Bolsonaro strongly criticized the medical program, maintaining that Cuban doctors should be able to receive 100% of the money Brazil pays Cuba for them (instead of the 25% they receive) and should be able to bring their families with them to Brazil. Cuba responding by ending the program and bringing its more than 8,000 medical personnel home by late December 2018. Although Bolsonaro and other critics have labeled the medical workers as \"slave labor,\" others contend that the Cuban medical personnel understand the conditions they will be working in and sign contracts for the work. Cuba has a long history of providing medical personnel overseas. ", "International and Regional Organizations. Cuba is an active participant in international forums, including the United Nations (U.N.) and the controversial United Nations Human Rights Council. Cuba also has received support over the years from the United Nations Development Programme and the United Nations Educational, Scientific, and Cultural Organization, both of which have offices in Havana. Cuba is also a member of the U.N. Economic Commission for Latin America and the Caribbean (ECLAC, also known by its Spanish acronym, CEPAL), one of the five regional commissions of the U.N., and hosted ECLAC's 37 th session in May 2018. U.N. Secretary-General Ant\u00f3nio Guterres attended the opening of the conference. ECLAC's Executive Secretary Alicia B\u00e1rcena reaffirmed the organization's commitment to accompanying Cuba in its efforts toward achieving sustainable development. B\u00e1rcena referred to the U.S. embargo on Cuba as costing Cuba more than $130 billion at current prices, the same estimate as the Cuban government. Since 1991, the U.N. General Assembly (UNGA) has approved a resolution annually criticizing the U.S. embargo and urging the United States to lift it (see text box above).", "Among other international organizations, Cuba was a founding member of the World Trade Organization, but it is not a member of the International Monetary Fund, the World Bank, or the Inter-American Development Bank. In 2016, Cuba signed a memorandum of understanding with the Development Bank of Latin America (CAF) with the objective of supporting technical cooperation programs for Cuba's social and economic development and laying the foundation for Cuba's future membership in the CAF; the CAF's current membership includes 17 Latin American and Caribbean countries as well as Spain and Portugal.", "Cuba was excluded from participation in the Organization of American States (OAS) in 1962 because of its identification with Marxism-Leninism, but in 2009, the OAS overturned that policy in a move that eventually could lead to Cuba's reentry into the regional organization in accordance with the practices, purposes, and principles of the OAS. Although the Cuban government welcomed the OAS vote to overturn the 1962 resolution suspending Cuba's OAS participation, it asserted that it would not return to the OAS. In February 2017, Cuba denied OAS Secretary-General Luis Almagro entry into the country to accept a democracy award in honor of the late democracy activist Oswaldo Pay\u00e1.", "Cuba became a full member of the Rio Group of Latin American and Caribbean nations in November 2008 and a member of the succeeding Community of Latin American and Caribbean States (CELAC) officially established in December 2011 to boost regional cooperation, but without the participation of the United States or Canada. In 2013, Cuba assumed the presidency of the organization for one year. Cuba also hosted the group's second summit in 2014, which was attended by leaders from across the hemisphere as well as by then-U.N. Secretary-General Ban Ki-moon, who reportedly raised human rights issues with Cuban officials. "], "subsections": []}]}, {"section_title": "U.S. Policy Toward Cuba", "paragraphs": [], "subsections": [{"section_title": "Background on U.S.-Cuban Relations94", "paragraphs": ["In the early 1960s, U.S.-Cuban relations deteriorated sharply when Fidel Castro began to build a repressive communist dictatorship and moved his country toward close relations with the Soviet Union. The often tense and hostile nature of the U.S.-Cuban relationship is illustrated by such events and actions as U.S. covert operations to overthrow the Castro government culminating in the ill-fated April 1961 Bay of Pigs invasion; the October 1962 missile crisis, in which the United States confronted the Soviet Union over its attempt to place offensive nuclear missiles in Cuba; Cuban support for guerrilla insurgencies and military support for revolutionary governments in Africa and the Western Hemisphere; the 1980 exodus of around 125,000 Cubans to the United States in the so-called Mariel boatlift; the 1994 exodus of more than 30,000 Cubans who were interdicted and housed at U.S. facilities in Guantanamo Bay, Cuba, and Panama; and the 1996 shootdown by Cuban fighter jets of two U.S. civilian planes operated by the Cuban-American group Brothers to the Rescue, which resulted in the deaths of four U.S. crew members.", "Beginning in the early 1960s, U.S. policy toward Cuba consisted largely of isolating the island nation through comprehensive economic sanctions, including an embargo on trade and financial transactions. President Kennedy proclaimed an embargo on trade between the United States and Cuba in February 1962, citing Section 620(a) of the Foreign Assistance Act of 1961 (FAA), which authorizes the President \"to establish and maintain a total embargo upon all trade between the United States and Cuba.\" At the same time, the Department of the Treasury issued the Cuban Import Regulations to deny the importation into the United States of all goods imported from or through Cuba. The authority for the embargo was later expanded in March 1962 to include the Trading with the Enemy Act (TWEA). ", "In July 1963, the Department of the Treasury revoked the Cuban Import Regulations and replaced them with the more comprehensive Cuban Assets Control Regulations (CACR)\u201431 C.F.R. Part 515\u2014under the authority of TWEA and Section 620(a) of the FAA. The CACR, which include a prohibition on most financial transactions with Cuba and a freeze of Cuban government assets in the United States, remain the main body of Cuba embargo regulations and have been amended many times over the years to reflect changes in policy. They are administered by the Department of the Treasury's Office of Foreign Assets Control (OFAC) and prohibit financial transactions as well as trade transactions with Cuba. The CACR also require that all exports to Cuba be licensed by the Department of Commerce, Bureau of Industry and Security (BIS), under the provisions of the Export Administration Act of 1979, as amended ( P.L. 96-72 ; 50 U.S.C. Appendix 2405(j)). The Export Administration Regulations (EAR) are found at 15 C.F.R. Sections 730-774.", "Congress subsequently strengthened sanctions on Cuba with enactment of the Cuban Democracy Act of 1992 (CDA; P.L. 102-484 , Title XVII), the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 ( P.L. 104-114 ), and the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA; P.L. 106-387 , Title IX). ", "Among its provisions, the CDA prohibits U.S. foreign subsidiaries from engaging in trade with Cuba and prohibits entry into the United States for any seaborne vessel to load or unload freight if it has been involved in trade with Cuba within the previous 180 days unless licensed by the Department of the Treasury. (In October 2016, OFAC issued a general license for vessels involved in trade with Cuba.) The LIBERTAD Act, enacted in the aftermath of Cuba's shooting down two U.S. civilian planes in February 1996, combines a variety of measures to increase pressure on Cuba and provides for a plan to assist Cuba once it begins the transition to democracy. Most significantly, the act codified the Cuban embargo as permanent law, including all restrictions imposed by the executive branch under the CACR. This provision is noteworthy because of its long-lasting effect on U.S. policy options toward Cuba. The executive branch is prevented from lifting the economic embargo without congressional concurrence through legislation until certain democratic conditions set forth in the law are met, although the President retains broad authority to amend the regulations therein. Another significant sanction in Title III of the law holds any person or government that traffics in U.S. property confiscated by the Cuban government liable for monetary damages in U.S. federal court. Acting under provisions of the law, however, all Administrations (including the Trump Administration) have suspended the implementation of Title III at six-month intervals, most recently in June 2018 (effective August 1, 2018 through January 2019). In November 2018, National Security Adviser John Bolton maintained in a press interview that the Administration was exploring whether to continue to suspend Title III or to allow lawsuits to go forward. (For additional information, see section on \" U.S. Property Claims ,\" below.) TSRA authorizes U.S. commercial agricultural exports to Cuba, but it also includes prohibitions on U.S. assistance and private financing and requires \"payment of cash in advance\" or third-country financing for the exports. The act also prohibits tourist travel to Cuba.", "In addition to these acts, Congress enacted numerous other provisions of law over the years that impose sanctions on Cuba, including restrictions on trade, foreign aid, and support from international financial institutions. The State Department also designated the government of Cuba as a state sponsor of international terrorism in 1982 under Section 6(j) of the Export Administration Act and other laws because of the country's alleged ties to international terrorism.", "Beyond sanctions, another component of U.S. policy has consisted of support measures for the Cuban people. This support includes U.S. private humanitarian donations, medical exports to Cuba under the terms of the CDA, U.S. government support for democracy-building efforts, and U.S.-sponsored radio and television broadcasting to Cuba. The enactment of TSRA by the 106 th Congress also led to the United States becoming one of Cuba's largest commercial suppliers of agricultural products. Authorization for purposeful travel to Cuba and cash remittances to Cuba has constituted an important means to support the Cuban people, although significant congressional debate has occurred over these issues for many years. ", "Despite the poor state of U.S.-Cuban relations, several examples of bilateral cooperation took place over the years in areas of shared national interest. Three areas that stand out are alien migrant interdiction (with migration accords negotiated in 1994 and 1995), counternarcotics cooperation (with increased cooperation dating back to 1999), and cooperation on oil spill preparedness and prevention (since 2011). "], "subsections": []}, {"section_title": "Obama Administration Policy", "paragraphs": ["During its first six years, the Obama Administration continued the dual-track policy approach toward Cuba that had been in place for many years. It maintained U.S. economic sanctions and continued measures to support the Cuban people, such as U.S. government-sponsored radio and television broadcasting and funding for democracy and human rights projects. ", "At the same time, however, the Obama Administration instituted some changes in policy that advanced support for the Cuban people. In April 2009, at the Summit of the Americas held in Trinidad and Tobago, President Obama fulfilled a campaign pledge by lifting all restrictions on family travel and remittances (for more details, see \" U.S. Travel to Cuba ,\" below). The President said that \"the United States seeks a new beginning with Cuba.\" While recognizing that it would take time to \"overcome decades of mistrust,\" the President said \"there are critical steps we can take toward a new day.\" He stated that he was prepared to have his Administration \"engage with the Cuban government on a wide range of issues\u2014from drugs, migration, and economic issues, to human rights, free speech, and democratic reform.\" In 2011, the Obama Administration introduced new measures to further reach out to the Cuban people through increased purposeful travel (including people-to-people educational travel) and an easing of restrictions on nonfamily remittances. ", "Overall, however, engagement with the Cuban government during the Administration's first six years was stymied because of Cuba's December 2009 imprisonment of an American subcontractor, Alan Gross, who had been working on democracy projects funded by the U.S. Agency for International Development. Securing the release of Alan Gross became a top U.S. priority, and the State Department maintained that it was using every appropriate channel to press for his release."], "subsections": [{"section_title": "Shift Toward Normalizing Relations", "paragraphs": ["On December 17, 2014, President Obama announced major developments in U.S.-Cuban relations and unveiled a new policy approach toward Cuba. First, he announced that the Cuban government had released Alan Gross on humanitarian grounds after five years of imprisonment. He also announced that, in a separate action, the Cuban government released an individual imprisoned since 1995 who had been an important U.S. intelligence asset in Cuba in exchange for three Cuban intelligence agents who had been imprisoned in the United States since 1998. In the aftermath of these releases, President Obama announced a major shift in U.S. policy toward Cuba, moving away from a sanctions-based policy aimed at isolating Cuba toward a policy of engagement. The President said that his Administration would \"end an outdated approach that, for decades, has failed to advance our interests.\" He maintained that the United States would continue to raise concerns about democracy and human rights in Cuba but stated that \"we can do more to support the Cuban people and promote our values through engagement.\"", "President Obama outlined three major steps to move toward normalization: (1) a review of Cuba's designation by the Department of State as a state sponsor of international terrorism; (2) the reestablishment of diplomatic relations with Cuba; and (3) an increase in travel, commerce, and the flow of information to and from Cuba."], "subsections": [{"section_title": "Rescission of Cuba's Designation as a State Sponsor of International Terrorism", "paragraphs": ["Cuba was first added to the so-called terrorism list in 1982 pursuant to Section 6(j) of the Export Administration Act of 1979 and other laws because of its alleged ties to international terrorism and support for terrorist groups in Latin America. President Obama directed the State Department to review Cuba's designation as a state sponsor of terrorism and stated that \"at a time when we are focused on threats from al Qaeda to ISIL, a nation that meets our conditions and renounces the use of terrorism should not face this sanction.\"", "Following the State Department's review, the President transmitted a report to Congress in April 2015 justifying the rescission, which maintained that Cuba had provided assurances that it would not support acts of international terrorism. No resolutions of disapproval were introduced in Congress to block the rescission, which paved the way for then-Secretary of State John Kerry to rescind Cuba's designation on May 29, 2015, 45 days after the submission of the report to Congress. Subsequently, to reflect the rescission of Cuba's designation as a state sponsor of terrorism in U.S. regulations, the Department of the Treasury's OFAC amended the Cuban Assets Control Regulations (CACR) in June 2015 and the Department of Commerce's BIS amended the Export Administration Regulations (EAR) in July 2015. "], "subsections": []}, {"section_title": "Reestablishment of Diplomatic Relations and Advancement of Engagement", "paragraphs": ["U.S.-Cuban diplomatic relations were severed by the Eisenhower Administration in January 1961 in response to the Cuban government's demand to decrease the number of U.S. Embassy staff within 48 hours. In 1977, under the Carter Administration, both countries established Interests Sections in each other's capitals to represent each country's interests. Beginning in January 2015, the United States and Cuba conducted four rounds of talks on reestablishing relations. Ultimately, the United States and Cuba reestablished diplomatic relations in July 2015 and embassies were reopened in Havana and Washington. ", "With the restoration of diplomatic relations, government-to-government engagement increased significantly under the Obama Administration. U.S. and Cuban officials held five Bilateral Commission meetings to coordinate efforts to advance the normalization process. ", "Officials negotiated numerous bilateral agreements after the restoration of relations, including those in the following areas: marine protected areas (November 2015); environmental cooperation on range of issues (November 2015); direct mail service (December 2015); civil aviation (February 2016); maritime issues related to hydrography and maritime navigation (February 2016); agriculture (March 2016); health cooperation (June 2016); counternarcotics cooperation (July 2016); federal air marshals (September 2016); cancer research (October 2016); seismology (December 2016); meteorology (December 2016); wildlife conservation (December 2016); animal and plant health (January 2017); oil spill preparedness and response (January 2017); law enforcement cooperation (January 2017); and search and rescue (January 2017). The United States and Cuba also signed a bilateral treaty in January 2017 delimiting their maritime boundary in the eastern Gulf of Mexico. Bilateral dialogues were held on all of these issues as well as on other issues including counterterrorism, claims (U.S. property, unsatisfied court judgments, and U.S. government claims), economic and regulatory issues, human rights, renewable energy and efficiency, trafficking in persons, and migration.", "In March 2016, President Obama traveled to Cuba, the first presidential visit since 1928, with the goals of building on progress toward normalizing relations and expressing support for human rights. In a press conference with Ra\u00fal Castro, President Obama said that the United States would \"continue to speak up on behalf of democracy, including the right of the Cuban people to decide their own future.\" He also spoke out forcefully for advancing human rights during his televised speech to the Cuban nation. He stated his belief that citizens should be free to speak their minds without fear and that the rule of law should not include arbitrary detentions.", "In October 2016, President Obama issued a presidential policy directive on the normalization of relations with Cuba. The directive set forth the Administration's vision for normalization of relations and laid out six medium-term objectives: (1) government-to-government interaction; (2) engagement and connectivity; (3) expanded commerce; (4) economic reform; (5) respect for universal human rights, fundamental freedoms, and democratic values; and (6) Cuba's integration into international and regional systems. The directive also outlined the roles and responsibilities for various U.S. departments and agencies to move the normalization process forward. It noted that the Administration would seek to build support in Congress to lift the embargo and other statutory provisions constraining efforts to normalize economic relations with Cuba. The directive can be viewed as an attempt to keep up the momentum toward normalizing relations in the next Administration and to protect the changes that have been made to date in U.S. policy toward Cuba. (As noted below, however, President Trump issued a national security presidential memorandum on June 16, 2017, that superseded and replaced the October 2016 policy directive.)"], "subsections": []}, {"section_title": "Increase in Travel, Commerce, and the Flow of Information", "paragraphs": ["The Obama Administration's third step of increasing travel, commerce, and the flow of information to and from Cuba required amendments to U.S. regulations\u2014the CACR and EAR\u2014administered, respectively, by the Department of the Treasury's OFAC and the Commerce Department's BIS. To implement the President's new policy, the two agencies issued five rounds of amendments to the CACR and EAR in January and September 2015 and in January, March, and October 2016. ", "The Treasury and Commerce Department amendments to the regulations eased restrictions on travel, remittances, trade, telecommunications, and banking and financial services. They also authorized certain U.S. companies or other entities to have a physical presence in Cuba, such as an office, retail outlet, or warehouse. These entities include news bureaus, exporters of authorized goods to Cuba, entities providing mail or parcel transmission services, telecommunication or internet-based service providers, entities organizing or conducting certain educational activities, religious organizations, and carrier and travel service providers. (For more on the regulatory changes, see \" U.S. Travel to Cuba \" and \" U.S. Exports and Sanctions ,\" below.)", "Such changes fall within the scope of the President's discretionary licensing authority to make changes to the embargo regulations. When President Obama unveiled his policy shift, however, he acknowledged that he did not have the authority to lift the embargo because it was codified in permanent law (Section 102(h) of the LIBERTAD Act). As noted above, the LIBERTAD Act ties the lifting of the embargo to conditions in Cuba (including that a democratically elected government is in place). Lifting the overall economic embargo would require amending or repealing the LIBERTAD Act as well as other statutes that have provisions impeding normal economic relations with Cuba, such as the CDA and TSRA."], "subsections": []}]}]}, {"section_title": "Trump Administration Policy", "paragraphs": ["During the electoral campaign, then-candidate Trump said he would cancel or reverse President Obama's policy on Cuba unless Cuba took action to improve political and religious freedom and free political prisoners. After Fidel Castro's death in November 2016, then-President-elect Trump issued a statement referring to Castro as a \"brutal dictator who oppressed his own people for nearly six decades.\" This statement was followed by a longer message maintaining that \"If Cuba is unwilling to make a better deal for the Cuban people, the Cuban/American people and the U.S. as a whole, I will terminate [the] deal.\" ", "In February 2017, the White House maintained that the Trump Administration was conducting a full review of U.S. policy toward Cuba and that human rights would be at the forefront of those policy discussions. In May 2017, then-Acting Assistant Secretary of State for Western Hemisphere Affairs Francisco Palmieri emphasized that \"one of the areas that is going to be a high priority is ensuring that Cuba makes more substantive progress toward a greater respect for human rights inside the country.\"", "On May 20, 2017, President Trump issued a statement to the Cuban American community and the people of Cuba in celebrating the anniversary of Cuban independence. That date is in commemoration of Cuba's independence from the United States in 1902 in the aftermath of the Spanish-American War in 1898, but is not celebrated in Cuba because of the continued U.S. intervention in Cuba under the Platt Amendment until its repeal in 1935 (see \" Brief Historical Background \" above). In the strongly worded statement, President Trump said, \"The Cuban people deserve a government that peacefully upholds democratic values, economic liberties, religious freedoms, and human rights, and my Administration is committed to achieving that vision.\" Cuba's state television published an \"official note\" describing the statement as \"controversial and ridiculous.\""], "subsections": [{"section_title": "Partial Rollback of Engagement and Increased Sanctions", "paragraphs": ["President Trump unveiled his Administration's policy on Cuba on June 16, 2017, which partially rolls back some of the Obama Administration's efforts to normalize relations with Cuba. President Trump set forth his Administration's policy in a speech in Miami, FL, where he signed a national security presidential memorandum (NSPM) on Cuba replacing President Obama's October 2016 presidential policy directive (discussed above), which had laid out objectives for the normalization process. The new policy leaves most of the Obama-era policy changes in place, including the reestablishment of diplomatic relations and a variety of eased sanctions to increase travel and commerce with Cuba. The new policy also keeps in place the Obama Administration's action ending the so-called wet foot/dry foot policy toward Cuban migrants, which, according to the NSPM, had \"encouraged untold thousands of Cuban nationals to risk their lives to travel unlawfully to the United States.\"", "The most significant policy changes set forth in President Trump's NSPM included (1) restrictions on financial transactions with companies controlled by the Cuban military, intelligence, or security services or personnel and (2) the elimination of individual people-to-people travel. President Trump's memorandum directed the heads of departments (Treasury and Commerce, in coordination with the State Department) to initiate a process within 30 days to adjust current regulations. On November 8, 2017, the Treasury and Commerce Departments issued amended regulations (effective November 9) to implement the new policy, and, as discussed below, the State Department took complementary action in November 2017 and November 2018.", "On November 1, 2018, National Security Adviser John Bolton made a speech in Miami, FL, strongly criticizing the Cuban government on human rights and stating that that \"we will only engage with a Cuban government that is willing to undertake necessary and tangible reforms\u2014a government that respects the interests of the Cuban people.\" Bolton's speech was full of anti-communist rhetoric reminiscent of the Cold War era. Bolton referred to Cuba, Venezuela, and Nicaragua as a \"troika of tyranny\" and the \"cause of immense human suffering, the impetus of enormous regional instability, and the genesis of a sordid cradle of communism in the Western Hemisphere.\" He referred to the three countries' leaders as \"three stooges of socialism\" and as \"clownish pitiful figures.\" In a press interview before the speech, Bolton also maintained that the Administration was considering whether to continue to suspend Title III of the LIBERTAD Act to allow lawsuits in U.S. federal court against those \"trafficking\" in confiscated property in Cuba, an action that would significantly ratchet up U.S. sanctions on Cuba; since the enactment of the LIBERTAD Act in 1996, all Administrations have suspended, at six month intervals, the right to file such lawsuits. (For more on Title III, see \" U.S. Property Claims ,\" below.)", "Restrictions on Transactions with the Cuban Military. Pursuant to the NSPM, the State Department was tasked with identifying entities controlled by the Cuban military, intelligence, or security services or personnel and publishing a list of those entities with which direct financial transactions would disproportionately benefit those services or personnel at the expense of the Cuban people or private enterprise in Cuba. The NSPM specifically identified the Grupo de Administraci\u00f3n Empresarial S.A . (GAESA), a holding company of the Cuban military involved in most sectors of the Cuban economy, particularly the tourism sector. ", "The State Department issued a list of \"restricted entities\" in November 2017 and updated the list with additional entries in November 2018. Currently, there are 205 entities on the list, including 2 ministries, 5 holding companies (including GAESA) and 43 of their subentities (including the Mariel Special Development Zone), 99 hotels (with 28 in Havana), 2 tourist agencies, 5 marinas, 10 stores in Old Havana, and 39 entities serving the defense and security sectors. The Treasury Department forbids financial transactions with those entities, with certain exceptions, including transactions related to air or sea operations supporting permissible travel, cargo, or trade; the sale of agricultural and medical commodities; direct telecommunications or internet access for the Cuban people; and authorized remittances. The new prohibitions limit U.S. economic engagement with Cuba, particularly in travel-related transactions and potential investment opportunities.", "Restrictions on People-to-People Travel. With regard to people-to-people travel, the Department of the Treasury amended the CACR to require that people-to-people educational travel take place under the auspices of an organization specializing in such travel, with travelers accompanied by a representative of the organization. Individuals are no longer authorized to engage in such travel on their own. The Obama Administration had authorized such individual travel in March 2016, which, combined with the beginning of regular commercial flights and cruise ship service, led to an increase in Americans visiting Cuba. With the new Treasury Department regulations issued, the level of U.S. travel to Cuba has fallen. (Also see \" U.S. Travel to Cuba ,\" below.)", "Cuban Government Reaction. As expected, the Cuban government's reaction to President Trump's June 2017 speech announcing Cuba policy changes was critical. Foreign Minister Bruno Rodr\u00edguez asserted that the speech \"was a grotesque spectacle straight from the Cold War.\" Nevertheless, the Cuban government also reiterated its willingness to continue a respectful and cooperative dialogue on issues of mutual interest and the negotiation of outstanding issues, although it maintained that Cuba would not make concessions to its sovereignty and independence. ", "At a meeting of Cuba's National Assembly in July 2017, then-Cuban President Ra\u00fal Castro criticized the Trump Administration's new policy toward Cuba as a setback to bilateral relations and reaffirmed that any strategy with the goal of destroying the Cuban revolution would fail. Nevertheless, Castro also reiterated that Cuba has the will to continue negotiating outstanding bilateral issues with the United States. He maintained that \"Cuba and the United States can cooperate and live side by side, respecting differences and promoting all that can benefit both countries and peoples,\" but he also asserted that no one should expect Cuba to make concessions inherent to its sovereignty and independence. "], "subsections": []}, {"section_title": "Continued Focus on Human Rights", "paragraphs": ["When President Trump announced his Cuba policy, he asserted that he was \"canceling the last administration's policy change with Cuba,\" which he labeled as \"a terrible and misguided deal with the Castro regime.\" The President maintained that \"the outcome of the last administration's executive action has been only more repression and a move to crush the peaceful democratic movement.\" Although the Cuban government's human rights record remained poor after the Obama Administration's policy of engagement was initiated in December 2014, President Obama continued to speak out strongly about human rights conditions in Cuba, including during his March 2016 visit to Havana; the two countries subsequently engaged in a bilateral human rights dialogue in October 2016. ", "In his June 2017 Miami speech, President Trump called for the Cuban government to end the abuse of dissidents, release political prisoners, stop jailing innocent people, and return U.S. fugitives from justice in Cuba, all issues that the Obama Administration had raised with the Cuban government. The President stated that \"any changes to the relationship between the United States and Cuba will depend on real progress toward these and other goals.\" Once Cuba takes concrete steps in these areas, President Trump said \"we will be ready, willing and able to come to the table to negotiate that much better deal for Cubans, for Americans.\"", "The Trump Administration also cited concern about human rights for its November 1, 2017, vote against the annual UNGA resolution condemning the U.S. embargo. In October 2016, under the Obama Administration, the United States abstained for the first time on the resolution, but U.S. officials also took the opportunity to express profound concerns about the Cuban government's Cuba's poor human rights record. (For more on the U.N. votes, see \" Cuba's Foreign Relations \" above.)", "Trump Administration officials continued to speak out on Cuba's human rights situation in 2018. Vice President Mike Pence spoke out on the human rights situation in Cuba during an address to the OAS in May. Pence stated that \"the longest-surviving dictatorship in the Western Hemisphere still clings to power\" and that even though \"the Castro name is now fading, the oppression and police state they imposed is as powerful as ever.\" He asserted, \"Today, the United States once again stands with the Cuban people in their stand for freedom.\" As noted above, National Security Adviser John Bolton also spoke out on Cuba's poor human rights record in a November 1, 2018, speech in Miami, ", "The State Department has continued to call attention to the plight of political prisoners in Cuba. In April 2018, then-Acting Secretary of State John Sullivan and USAID Administrator Mark Green met with members of Cuba's independent civil society on the margins of the Summit of the Americas held in Peru. According to the State Department, Sullivan called \"for democratic reforms to Cuba's flawed electoral process and an end to arbitrary detention and intimidation of independent civil society.\" In June 2018, the State Department reiterated the U.S. call for the release of all political prisoners in Cuba and highlighted U.S. concern for two Cuban political prisoners declared \"prisoners of conscience\" by Amnesty International\u2014Dr. Eduardo Cardet and Dr. Ariel Ruiz Urquiola, who was subsequently released in July 2018. In October 2018, the State Department called for the release of UNPACU activist Tom\u00e1s N\u00fa\u00f1ez Magdariaga, who had been on a hunger strike since August; the Cuban government subsequently released him on October 15, 2018. A day later, the U.S. Mission to the United Nations launched a campaign to call attention to Cuba's \"estimated 130 political prisoners.\" Cuban diplomats attempted to disrupt the event by making noise, an action that Secretary of State Mike Pompeo dubbed \"a childish tantrum.\" Secretary of State Pompeo subsequently wrote an open letter to Cuban Foreign Minister Bruno Rodriguez in early December 2018 asking for evidence against those held as political prisoners. (For more details, see \" Human Rights \" section, above.)", "Internet Task Force. In January 2018, the State Department announced the establishment of a Cuba Internet Task Force, composed of U.S. government and non-U.S. government representatives, to examine the technological challenges and opportunities for expanding internet access and independent media in Cuba. The task force was convened pursuant to President Trump's NSPM on Cuba and held its first meeting on February 7, 2018, with two subcommittees formed to develop recommendations\u2014one to explore the role of media and freedom of information in Cuba and the other to explore internet access in Cuba. According to the State Department, the task force will review the subcommittees' recommendations and prepare a final report for the Secretary of State within a year.", "Cuban state media criticized the State Department's establishment of the task force, maintaining that the move \"was aimed at subverting Cuba's internal order.\" Cuba's foreign ministry issued a note of diplomatic protest to the U.S. Embassy in Havana and called upon the U.S. government to respect Cuba sovereignty."], "subsections": []}, {"section_title": "Continued Engagement in Some Areas", "paragraphs": ["In a demonstration of continuity in U.S. policy between the Trump and Obama Administrations, the U.S. and Cuban governments have continued to engage on various bilateral issues through meetings and dialogues. The two countries have continued to hold semiannual migration talks, which, since 1995, have provided a forum to review and coordinate efforts to ensure safe, legal, and orderly migration between Cuba and the United States; talks were held in April and December 2017, and most recently in July 2018. ", "The United States and Cuba also have continued to hold Bilateral Commission meetings that began under the Obama Administration in which the two government review priorities and areas for engagement. Officials held a sixth Bilateral Commission meeting in September 2017 and a seventh meeting in June 2018. According to the State Department, at the June 2018 meeting, the two countries reviewed such areas for engagement as trafficking in persons, civil aviation safety, law enforcement matters, agriculture, maritime safety and search and rescue, certified claims, and environmental challenges. The State Department maintained that the United States reiterated the urgent need to identify the source of the \"attacks\" on U.S. diplomats and to ensure they cease, expressed continued concerns about the arbitrary detention of independent journalists and human rights defenders, and acknowledged Cuba's progress in repatriating Cubans with final orders while also emphasizing that Cuba needs to accept greater numbers of returnees. Cuba's Ministry of Foreign Affairs maintained the meeting provided an opportunity to review areas of exchange and cooperation, but it also criticized several aspects of U.S. policy, including the \"intensification\" of the U.S. embargo and what Cuba viewed as the \"political manipulation of the alleged health cases\" that became a \"pretext\" to reduce staff and therefore affect embassy operations in both countries. ", "Both countries also have continued engagement on other bilateral issues. The U.S. Coast Guard and the Cuban Border Guard participated in professional exchanges in July 2017 and January 2018 covering a variety of topics, including search and rescue. The U.S. Departments of State, Justice, and Homeland Security participated in law enforcement dialogues with Cuban counterparts in September 2017 and July 2018; the 2018 dialogue included such topics as fugitives and the return of Cuban nationals with final orders of removal. Additional bilateral meetings and exchanges have been held in 2018 on such topics as cybersecurity and cybercrime, counternarcotics efforts, and counterterrorism in January; anti-money laundering efforts and trafficking in persons in February; search and rescue in March; and agriculture and scientific cooperation related to environmental disaster in April.", "As noted below, for more than a decade, Cuba has returned some wanted fugitives to the United States on a case-by case basin. In 2018, this included the return of a man wanted on charges related to ecoterrorism in August and the return in November of a fugitive from New Jersey wanted for murder. In February, with assistance from U.S. law enforcement, Cuba prosecuted a Cuban national for the 2015 murder of a Florida doctor. (See \" U.S. Fugitives from Justice ,\" below.)"], "subsections": []}, {"section_title": "U.S. Response to Injuries of U.S. Personnel in Havana147", "paragraphs": ["On September 29, 2017, the U.S. Department of State ordered the departure of nonemergency personnel assigned to the U.S. Embassy in Havana, as well as their families, to minimize the risk of their exposure to harm because of a series of unexplained injuries suffered by embassy personnel since November 2016. As a result, the embassy's U.S. staffing level, which numbered over 50, was reduced by about two-thirds. According to the State Department, the U.S. government personnel suffered from \"attacks of an unknown nature,\" at U.S. diplomatic residences and hotels where temporary duty staff were staying, with symptoms including \"ear complaints, hearing loss, dizziness, headache, fatigue, cognitive issues, and difficulty sleeping.\" U.S. officials maintain that they do not know the mechanism used to cause the health injuries, the source, who is responsible, or the motive behind the alleged \"attacks.\"", "The State Department reports that 26 Americans have experienced health effects from the incidents. Twenty-four of the incidents occurred from as early as November 2016 to August 2017. In June 2018, two new cases stemming from occurrences in May 2018 were confirmed after medical evaluations, bringing the total to 26 cases.", "On October 3, 2017, the State Department ordered the departure of 15 Cuban diplomats from the Cuban Embassy in Washington, DC. According to then-Secretary of State Rex Tillerson, the decision was made because of Cuba's failure to protect U.S. diplomats in Havana and to ensure equity in the impact on respective diplomatic operations. Previously, in May 2017, the State Department had asked two Cuban diplomats to depart the United States because some U.S. diplomats in Cuba had returned to the United States for medical reasons. State Department officials maintain that the United States would need full assurances from the Cuban government that the \"attacks\" will not continue before contemplating the return of diplomatic personnel. ", "On March 5, 2018, the State Department began a permanent staffing plan at the U.S. Embassy in Havana, operating it as an \"unaccompanied post\" without family members. The change took place because the temporary \"ordered departure\" status for the embassy had reached its maximum allowable days. According to the State Department, \"the embassy will continue to operate with the minimum personnel necessary to perform core diplomatic and consular functions, similar to the level of emergency staffing maintained during ordered departure.\"", "Although responsibility for injuries to U.S. personnel in Cuba is unknown, speculation by some observers has focused on such possibilities as a rogue faction of Cuba's security services or a third country, such as Russia, with the apparent motivation of wanting to disrupt U.S.-Cuban relations. Some maintain that Cuba's strong security apparatus makes it unlikely that a third country would be involved without the Cuban government's acquiescence. Others stress that there has been no evidence implicating a third country and that it would be highly unusual for a rogue Cuban security faction to operate contrary to the interests of the Cuban government.", "Questions have revolved around what might cause such a variety of symptoms, including whether a faulty surveillance device could be responsible for some of the incidents. Since the incidents were first made public by the State Department in August 2017, numerous press reports have referred to them as being caused by some type of sonic device. Yet some scientists and experts in acoustics have cast doubt on this possibility, arguing that the laws of physics render it unlikely that the use of ultrasound, which they see as the most plausible type of acoustic employed, could be effectively used to harm personnel. They add that some of the reported symptoms individuals have encountered would not have resulted from the use of such a device. Some point to other possible scenarios, such as personnel coming into contact with toxins that damage hearing, or even the spread of anxiety or other psychogenic contributors capable of triggering symptoms. Some scientists assert that data regarding the potential effects of an ultrasound weapon on human health is currently slim. ", "An article in the Journal of the American Medical Association ( JAMA ), published February 15, 2018, reported that University of Pennsylvania physicians who evaluated individuals from the U.S. Embassy community in Havana maintained that the individuals \"appeared to have sustained injury to widespread brain networks without an associated history of head trauma.\" The study, however, found no conclusive evidence of the cause of the brain injuries. An accompanying editorial in JAMA cautioned about drawing conclusions from the study, noting that the evaluations were conducted an average of 203 days after the onset of the symptoms and that it was unclear whether individuals who developed symptoms were aware of earlier reports by others. In August 2018, JAMA published several letters that raised additional questions concerning the February 2018 study, including one that asserted mass psychogenic illness could not be discounted; the study's authors, however, pushed back against the criticism, maintaining that a complex constellation of neurological symptoms was consistent across the cohort that was studied.", "A March 2018 University of Michigan report by three computer scientists concluded that the sounds recorded in Cuba could have been caused by two eavesdropping devices placed in close proximity to each other. The study concluded that the sounds could have been inadvertently produced without malicious intent. ", "In December 2018, a group of doctors from the University of Miami and the University of Pittsburgh published a study maintaining that those diplomats exhibiting symptoms suffered from ear damage as opposed to brain injury. ", "In January 2019, a group of biologists from the University of California Berkeley and the U.K's University of Lincoln issued a study on a recording of the alleged sounds heard by some U.S. Embassy employees that had been released by the Associated Press in October 2017. The study maintains that the sound matched the echoing call of a Caribbean cricket.", "The Canadian government announced in April 2018, that it also was changing the designation of its embassy in Havana as an \"unaccompanied post,\" meaning that diplomatic staff will not be accompanied by their family members. Since 2017, 13 Canadians reportedly experienced symptoms such as headaches, dizziness, nausea, and difficulty concentrating, with the most case confirmed in November 2018. Canadian medical specialists raised concerns about a possible new type of acquired brain injury, the cause of which is unknown, but the Canadian government maintains that there is no evidence to suggest that Canadian travelers to Cuba are at risk. "], "subsections": [{"section_title": "Accountability Review Board and Health Incidents Task Force", "paragraphs": ["The State Department convened an Accountability Review Board (ARB) in January 2018 to examine the circumstances regarding unexplained injuries in Cuba. The State Department submitted a report to Congress on August 30, 2018, and at the same time released a fact sheet on its website. The ARB's mandate, according to the State Department, was not to determine the cause of the incidents but rather to examine the State Department's response and the adequacy of security and other related procedures. The ARB found that the department's security systems and procedures were adequate and properly implemented overall but that there were significant vacancies in security staffing and some challenges with information sharing and communication. The ARB issued 30 recommendations to the State Department concerning accountability, interagency coordination, medical issues, internal communication and information sharing, risk/benefit analysis, and diplomatic security. The State Department maintains that it accepted all of the recommendations.", "In May 2018, the State Department announced that a U.S. government employee serving in Guangzhou, China, experienced a health incident similar to that experienced by members of the U.S. diplomatic community in Havana. Secretary of State Michael Pompeo noted the incident in testimony before the House Foreign Affairs Committee on May 23. Subsequently, on June 5, Pompeo announced the establishment of a multiagency Health Incidents Response Task Force to serve as a coordinating body for State Department and interagency activities, including identification and treatment of affected personnel and family members abroad, investigation and risk mitigation, messaging, and diplomatic outreach. "], "subsections": []}, {"section_title": "Vienna Convention", "paragraphs": ["Under the 1961 Vienna Convention on Diplomatic Relations and the 1963 Vienna Convention on Consular Relations, nearly all countries worldwide participate in reciprocal obligations regarding the diplomatic facilities of other countries in their territory. The United States and Cuba are both party to these conventions. U.S. officials have repeatedly noted the Cuban government's obligations under the Vienna Convention to protect U.S. diplomats in Cuba. ", "Under the 1961 convention, the safety of diplomatic agents (Article 29), the private residences of diplomatic agents (Article 30), and the premises of diplomatic missions (Article 22) are protected, with the receiving state under special duty to guarantee such protection. Similarly, under the 1963 convention (Article 40), the receiving state is responsible for treating consular officers with due respect and taking \"all appropriate steps to prevent any attack on their person, freedom or dignity.\""], "subsections": []}, {"section_title": "Cuba's Response", "paragraphs": ["The Cuban government denies responsibility for the injuries of U.S. personnel, maintaining that it would never allow its territory to be used for any action against accredited diplomats or their families. In the aftermath of the order expelling its diplomats, Cuba's Ministry of Foreign Affairs issued a statement strongly protesting the U.S. action, asserting that it was motivated by politics and arguing that ongoing investigations have reached no conclusion regarding the incidents or the causes of the health problems. The statement noted that Cuba had permitted U.S. investigators to visit Cuba and reiterated the government's willingness to continue cooperating on the issue. ", "At a November 2, 2017, press conference in Washington, DC, Cuban Foreign Minister Rodr\u00edguez called for the U.S. government to \"stop politicizing the issue,\" maintaining that it could \"take bilateral relations further back\" with \"harmful consequences for both peoples and countries.\" Rodr\u00edguez reiterated that Cuban authorities \"preliminarily concluded there is no evidence whatsoever of the occurrence of the alleged incidents or the cause and the origin of these ailments reported by U.S. diplomats and their relatives.\" The foreign minister also maintained that U.S. cooperation on the investigation has been very limited and raised a series of questions regarding the adequacy and timeliness of information provided to Cuban experts and medical personnel.", "In September 2018, a delegation of Cuban scientists visited the United States to have meetings with the State Department, the National Academy of Sciences, and on Capitol Hill. The director of the Cuban Neuroscience Center, Dr. Mitchell Joseph Vald\u00e9s-Sosa, maintains that there could be various reasons why the diplomats became sick (such as hypertension, stress, other preexisting conditions, and psychogenesis) but that Cuban scientists have not seen any credible evidence that some type of high-tech weapon was used. The Cuban delegation expressed disappointment that U.S. officials have not shared more medical and clinical data on the illnesses experienced by the U.S. diplomats. In November 2018, Dr. Vald\u00e9s-Sosa coauthored a letter in Science magazine with a professor from the University of Pennsylvania's Department of Bioengineering maintaining that some \"scientists have allowed speculation about the causes of these health issue to outpace the evidence\" and that \"there is insufficient evidence to guess about the cause of the sounds.\" "], "subsections": []}, {"section_title": "Cuba Travel Advisory", "paragraphs": ["The State Department issued a travel warning in September 2017, stating that due to the drawdown in staff, the U.S. Embassy in Havana had limited ability to assist U.S. citizens in Cuba. The warning advised U.S. citizens to avoid travel to Cuba because of the risk of being subject to injury, since some of the incidents occurred at hotels frequented by U.S. citizens. In January 2018, the State Department revamped its travel advisory system to include four advisory levels: Level 1, exercise normal precautions; Level 2, exercise increased caution; Level 3, reconsider travel; and Level 4, do not travel. At the time, the advisory for Cuba was set at Level 3, recommending that travelers should reconsider travel to Cuba but indicating that if the decision to travel was made, travelers should avoid the Hotel Nacional and Hotel Capri, where some of the injuries occurred.", "On August 23, 2018, however, the State Department eased its travel advisory for Cuba to Level 2, exercise increased caution, with a spokesman maintaining that the agency \"undertook a thorough review of the risks to private U.S. citizens in Cuba and decided a Level 2 travel advisory was appropriate.\" According to the advisory, travelers are still advised to avoid the Hotel Nacional and the Hotel Capri and to immediately move to another area if they experience any acute auditory or sensory phenomena. Travel agencies and organizations sponsoring travel to Cuba lauded the State Department's easing of the travel advisory."], "subsections": []}, {"section_title": "Effect of Staff Reduction on U.S. Embassy Havana Operations", "paragraphs": ["The two-thirds staff reduction at the U.S. Embassy in Havana has had implications for bilateral relations. Most visa processing at the U.S. Embassy in Havana has been suspended. Most Cubans applying for nonimmigrant visas must go to a U.S. embassy or consulate in another country, and applications and interviews for immigrant visas are currently being handled at the U.S. Embassy in Georgetown, Guyana. ", "The suspension of nonimmigrant visa processing has made it more difficult and increased costs for Cubans visiting family in the United States and for Cuban cuentapropistas (private sector workers) traveling to the United States to bring back inputs for their businesses. The suspension also has increased the costs for Cuban musicians, dancers, and other artists who now face a decision whether to travel to a third country to apply for a nonimmigrant visa if they want to perform in the United States; as a result, some have canceled tours in the United States. In 2013, the United States had begun granting multiple entry visas, good for five years, for Cubans visiting the United States. As those visas expire, Cubans will need to travel to a third country to request a new visa if they want to visit the United States.", "In a 1994 bilateral migration accord with Cuba, the United States committed to issue 20,000 travel documents annually. It met that commitment in FY2017, but the embassy staff reduction has negatively affected the United States' ability to meet its commitment in FY2018. The State Department acknowledged in April 2018 that it would not be able to issue 20,000 travel documents for this fiscal year. Ultimately in FY2018, according to the Department of State, the Department issued 4,060 travel documents in the categories specified under the migration accord.", "Since the staff reduction at the U.S. Embassy in Havana, information posted on the website of the U.S. Embassy in Havana has stated that the State Department and the Department of Homeland Security (DHS) are determining arrangements for continuing to process applications under the Cuban Family Reunification Parole Program (CFRP), a program administered by DHS's U.S. Citizenship and Immigration Services (USCIS). The CFRP was established in 2007 by USCIS to help the United States meet its annual obligation under the 1994 U.S.-Cuba migration accord. Staff reductions led USCIS to suspend operations at its field office in Havana in 2017 due to the drawdown in staff; USCIS permanently closed its offices in Havana on December 10, 2018. In past years, around 75% of the immigrant travel documents issued for Cuban nationals annually were issued under the CFRP. In October 2017, State Department officials indicated that they would work with DHS to ensure continued operation of the CFRP, but no plans have been announced since then. Given that a majority of immigrant travel documents issued for Cubans are from the CFRP program, it could be difficult for the United States to reach the annual 20,000 target level without the CFRP program being reactivated and without USCIS reestablishing its presence at the embassy.", "The staff reduction at the U.S. Embassy in Havana also led to the closure of the Refugee Section which had administered the U.S. Refugees Admission Program in Cuba. The embassy is not accepting any new applications or processing refugee cases. The section was run by the State Department's Bureau of Population, Refugees and Migration in conjunction with USCIS and the Office of Refugee Resettlement of the Department of Health and Human Services. In FY2017, at least 177 Cubans were admitted to the United States as refugees, whereas in FY2018, through August 4, 2018, no Cubans were admitted as refugees.", "The embassy staff reduction likely also has made it more difficult to cover significant economic and political developments in Cuba, including outreach to civil society and human rights activists. The Political Section used to have several officers covering economic and political issues, including human rights; due to the staff reduction, there is one U.S. official in the section."], "subsections": []}]}]}, {"section_title": "Debate on the Direction of U.S. Policy", "paragraphs": ["Over the years, although U.S. policymakers have agreed on the overall objectives of U.S. policy toward Cuba\u2014to help bring democracy and respect for human rights to the island\u2014there have been several schools of thought about how to achieve those objectives. Some have advocated a policy of keeping maximum pressure on the Cuban government until reforms are enacted, while continuing efforts to support the Cuban people. Others have argued for an approach, sometimes referred to as constructive engagement, that would lift some U.S. sanctions that they believe are hurting the Cuban people and would move toward engaging Cuba in dialogue. Still others have called for a swift normalization of U.S.-Cuban relations by lifting the U.S. embargo. Legislative initiatives introduced over the past decade have reflected these three policy approaches.", "Dating back to 2000, there have been efforts in Congress to ease U.S. sanctions, with one or both houses at times approving amendments to appropriations measures that would have eased U.S. sanctions on Cuba. Until 2009, these provisions were stripped out of final enacted measures, in part because of presidential veto threats. In 2009, Congress took action to ease some restrictions on travel to Cuba, marking the first time that Congress had eased Cuba sanctions since the approval of the Trade Sanctions Reform and Export Enhancement Act of 2000 ( P.L. 106-387 , Title IX). In light of Fidel Castro's departure as head of government in 2006 and the gradual economic changes made by Ra\u00fal Castro, some observers had called for a reexamination of U.S. policy toward Cuba. In this new context, two broad policy approaches were advanced to contend with change in Cuba: an approach that called for maintaining the U.S. dual-track policy of isolating the Cuban government while providing support to the Cuban people and an approach aimed at influencing the attitudes of the Cuban government and Cuban society through increased contact and engagement. ", "The Obama Administration's December 2014 change of U.S. policy from one of isolation to one of engagement and movement toward the normalization of relations has highlighted divisions in Congress over Cuba policy. Some Members of Congress lauded the Administration's actions as in the best interests of the United States and a better way to support change in Cuba, whereas other Members strongly criticized the President for not obtaining concessions from Cuba to advance human rights. Some Members vowed to oppose the Administration's efforts toward normalization, whereas others have, as in the past, introduced legislation to normalize relations with Cuba by lifting the embargo in its entirety or in part by easing some aspects of it. ", "The Trump Administration's policy of rolling back some of the Obama-era changes also highlights divisions in Congress over Cuba policy, with some Members supporting the President's action because of Cuba's lack of progress on human rights and others opposing it because of the potential negative effect on the Cuban people and U.S. business interests. ", "Public opinion polls have showed a majority of Americans support normalizing relations with Cuba. Among the Cuban American community in South Florida, however, a 2018 poll by Florida International University showed an increase in those supporting a continuation of the U.S. embargo compared to a 2016 poll. In the 2018 poll, although a majority of Cuban Americans in South Florida supported diplomatic relations and unrestricted travel to Cuba by all Americans, 51% polled favored continuing the embargo and 49% opposed it. This contrasts with 2016, when 63% of Cuban Americans in South Florida favored ending the embargo and 37% opposed it.", "In general, those who advocate easing U.S. sanctions on Cuba make several policy arguments. They assert that if the United States moderated its policy toward Cuba\u2014through increased travel, trade, and dialogue\u2014then the seeds of reform would be planted, which would stimulate forces for peaceful change on the island. They stress the importance to the United States of avoiding violent change in Cuba, with the prospect of a mass exodus to the United States. They argue that since the demise of Cuba's communist government does not appear imminent (despite more than 50 years of sanctions), the United States should espouse a more pragmatic approach in trying to bring about change in Cuba. Supporters of changing policy also point to broad international support for lifting the U.S. embargo, to the missed opportunities for U.S. businesses because of the unilateral nature of the embargo, and to the increased suffering of the Cuban people because of the embargo. In addition, proponents of change argue that the United States should be consistent in its policies with the world's few remaining communist governments, including China and Vietnam.", "On the other side, opponents of lifting U.S. sanctions maintain that the two-track policy of isolating Cuba but reaching out to the Cuban people through measures of support is the best means for realizing political change in Cuba. They point out that the LIBERTAD Act sets forth the steps that Cuba must take for the United States to normalize relations. They argue that softening U.S. policy without concrete Cuban reforms boosts Cuba's communist regime, politically and economically, and facilitates its survival. Opponents of softening U.S. policy argue that the United States should stay the course in its commitment to democracy and human rights in Cuba and that sustained sanctions can work. Critics of loosening U.S. sanctions further argue that Cuba's failed economic policies, not the U.S. embargo, are the causes of Cuba's difficult living conditions."], "subsections": []}]}, {"section_title": "Selected Issues in U.S.-Cuban Relations", "paragraphs": ["For many years, Congress has played an active role in U.S. policy toward Cuba through the enactment of legislative initiatives and oversight on numerous issues. These issues include U.S. economic sanctions on Cuba, such as restrictions on travel, remittances, and agricultural and medical exports; terrorism issues, including Cuba's designation as a state sponsor of international terrorism; human rights issues, including funding and oversight of U.S.-government sponsored democracy and human rights projects; funding and oversight for U.S.-government sponsored broadcasting to Cuba (Radio and TV Mart\u00ed); migration issues; bilateral antidrug cooperation; and U.S. claims for property confiscated by the Cuban government."], "subsections": [{"section_title": "U.S. Travel to Cuba189", "paragraphs": ["Restrictions on travel to Cuba have been a key and often contentious component of U.S. efforts to isolate Cuba's communist government for more than 50 years. Numerous changes to the restrictions have occurred over time, and for five years, from 1977 until 1982, there were no restrictions on travel. Restrictions on travel are part of the CACR, the embargo regulations administered by the Department of the Treasury's OFAC. Under the George W. Bush Administration, enforcement of U.S. restrictions on Cuba travel increased and restrictions on travel were tightened. ", "Under the Obama Administration, Congress took legislative action in March 2009 to ease restrictions on family travel and on travel related to U.S. agricultural and medical sales to Cuba ( P.L. 111-8 , Sections 620 and 621 of Division D). In April 2009, the Obama Administration went further when the President announced that he was lifting all restrictions on family travel. In January 2011, the Obama Administration made a series of changes further easing restrictions on travel. The measures increased purposeful travel to Cuba related to religious, educational, and journalistic activities, including people-to-people travel exchanges, and allowed U.S. international airports to become eligible to provide services to licensed charter flights to and from Cuba. In most respects, these new measures were similar to policies that were undertaken by the Clinton Administration in 1999 but subsequently curtailed by the George W. Bush Administration in 2003 and 2004. ", "As discussed above, President Obama announced a major shift in U.S. policy toward Cuba in December 2014 that included an easing of U.S. restrictions on travel to Cuba. As part of the change in policy, OFAC amended the CACR in 2015 to include general licenses for the 12 existing categories of travel to Cuba set forth in the regulations: (1) family visits; (2) official business of the U.S. government, foreign governments, and certain intergovernmental organizations; (3) journalistic activity; (4) professional research and professional meetings; (5) educational activities, including people-to-people travel; (6) religious activities; (7) public performances, clinics, workshops, athletic and other competitions, and exhibitions; (8) support for the Cuban people; (9) humanitarian projects (now including microfinancing projects); (10) activities of private foundations or research or educational institutes; (11) exportation, importation, or transmission of information or information materials; and (12) certain export transactions that may be considered for authorization under existing regulations and guidelines.\u00a0", "Before the policy change, travelers under several of these categories had to apply for a specific license from the Department of the Treasury before traveling. Under the new regulations, both travel agents and airlines are able to provide services for travel to Cuba without the need to obtain a specific license. Authorized travelers no longer have a per diem limit for expenditures, as in the past, and can bring back goods from Cuba as accompanied baggage for personal use, including alcohol and tobacco.", "Despite the easing of travel restrictions, travel to Cuba solely for tourist activities remains prohibited. Section 910(b) of TSRA prohibits travel-related transaction for tourist activities, which are defined as any activity not expressly authorized in the 12 categories of travel in the CACR (31 C.F.R. 515.560).", "In January 2016, the Department of the Treasury made additional changes to the travel regulations. Among the changes, authorization for travel and other transactions for transmission of informational materials now include professional media or artistic productions in Cuba (movies, television, music recordings, and creation of artworks). Authorization for travel and other transactions for professional meetings, public performances, clinics, workshops, athletic and nonathletic competitions, and exhibitions now includes permission to organize these events, not just participate in them. ", "The Department of the Treasury amended the travel regulations in March 2016 to permit travel to Cuba for individual people-to-people educational travel, but as discussed above, President Trump, as part of his partial rollback of engagement with Cuba, directed the Department of the Treasury in June 2017 to eliminate the authorization for such travel for individuals. As set forth in amended regulations issued on November 9, 2017, people-to-people educational travel is required to take place under the auspices of an organization specializing in such travel, with travelers accompanied by a representative of the organization.", "U.S. Travelers to Cuba. According to Cuban government statistics, the number of U.S. travelers increased from 91,254 in 2014 to 619,523 in 2017. This figure is in addition to thousands of Cuban Americans who visit family in Cuba each year; in 2017, almost 454,000 Cubans living outside the country visited Cuba, the majority from the United States. The number of U.S. visitors began to slow in the latter half of 2017 in the aftermath of Hurricane Irma, which struck in September, the Trump Administration's tighter restrictions on people-to-people travel and restrictions on transactions with the Cuban military (which keeps a number of hotels off limits to U.S. visitors), and the U.S. travel warning issued in September 2017 related to the unexplained health injuries to U.S. diplomatic personnel in Cuba (see discussion above on \" Cuba Travel Advisory \"). ", "In the first half of 2018, the number of U.S. visitors to Cuba, not including Cuban Americans, reportedly declined by 24% compared to the same period in 2017. By the end of 2018, however, U.S. travel to Cuba reportedly had recovered, with a growth of 1% over 2017. The recovery was spurred by a 48% increase in cruise ship arrivals (which bring in less revenue compared to land-based travelers). Another factor in the recovery in travel could be the August 2018 change in the U.S. travel advisory for Cuba from Level 3 (reconsider travel) to Level 2 (exercise increased caution) (see \" Cuba Travel Advisory ,\" above). Some U.S. schools with academic exchange programs reportedly do not allow travel to a country with a Level 3 advisory, so the easing of the advisory to Level 2 allows schools to once again include Cuba as part of their exchange programs.", "Regular Air Service. U.S. and Cuban officials signed a bilateral arrangement (in a memorandum of understanding) in February 2016 permitting regularly scheduled air flights as opposed to charter flights, which have operated between the two countries for many years. The arrangement provided an opportunity for U.S. carriers to operate up to a total of 110 daily round-trip flights between the United States and Cuba, including up to 20 daily round-trip flights to and from Havana. In June 2016, the Department of Transportation announced that six U.S. airlines were authorized to provide air service for up to 90 daily flights between five U.S. cities (Miami, Fort Lauderdale, Chicago, Philadelphia, and Minneapolis-St. Paul) and nine Cuban cities other than Havana. JetBlue became the first U.S. airline to begin regularly scheduled flights in August 2016. In August 2016, the Department of Transportation announced a final decision for eight U.S. airlines to provide up to 20 regularly scheduled round-trip flights between Havana and 10 U.S. cities (Atlanta, Charlotte, Fort Lauderdale, Houston, Los Angeles, Miami, Newark, New York [JFK], Orlando, and Tampa). American Airlines became the first airline to begin regular direct flights to Havana from Miami in November 2016.", "Four U.S. airlines that had been awarded flights to Cuba\u2014Silver Airways, Frontier Airlines, Spirit Airlines, and Alaska Airlines\u2014have ended their air service to Cuba, citing competition from other airlines and low demand. In March 2018, the Department of Transportation awarded flights to Havana that had been given up (as well as a flight from Boston) to five U.S. airlines already serving Cuba\u2014American Airlines, Delta Air Lines, JetBlue, Airways, Southwest Airlines, and United Airlines. The U.S. air cargo company FedEx was supposed to begin operations to Cuba in April 2017, but the company requested and granted several extensions to begin service until it finally canceled its plans in December 2018.", "In May 2016, the House Committee on Homeland Security, Subcommittee on Transportation Security, held a hearing on potential security risks from the resumption of regularly scheduled flights from Cuba. Some Members of Congress expressed concerns that Cuba's airport security equipment and practices were insufficient and that the Administration was rushing plans to establish regular air service to Cuba; other Members viewed such concerns as a pretext to slow down or block the Administration's efforts to normalize relations with Cuba. Officials from the Department of Homeland Security (including Customs and Border Protection and the Transportation Security Administration) testified at the hearing regarding their work to facilitate and ensure security of the increased volume of commercial air travelers from Cuba. Subsequently, in September 2016, the United States and Cuba finalized an aviation-security agreement for the deployment of U.S. In-Flight Security Officers, more commonly known as Federal Air Marshals, on board certain regularly scheduled flights to and from Cuba.", "Cruise Ship Service. The Carnival cruise ship company began direct cruises to Cuba from the United States in May 2016 using smaller ships, accommodating about 700 passengers, under its cruise brand Fathom, which targeted people-to-people educational travel. The Fathom cruises stopped in May 2017, but Carnival began using a larger ship for cruises to Cuba in June 2017. Since then, numerous other cruise ship companies\u2014Royal Caribbean, Norwegian, Azamara Club Cruises, Oceania Cruises, Regent Seven Seas Cruises, Pearl Seas Cruises, Holland America Line, Viking, and Seabourn\u2014began offering cruises to Cuba from the United States. Several companies began looking to establish ferry services between the United States and Cuba in 2015, but the services still require Cuban approval, and Cuban facilities need to be developed to handle the services.", "Pro/Con Arguments. Major arguments made for lifting the Cuba travel ban altogether are that the ban abridges the rights of ordinary Americans to travel, hinders efforts to influence conditions in Cuba, and may be aiding the Cuban government by helping restrict the flow of information. In addition, supporters of lifting the ban point to the fact that Americans can travel to other countries with communist or authoritarian governments. Major arguments in opposition to lifting the Cuba travel ban are that more American travel would support the Cuban government with potentially millions of dollars in hard currency; that legal provisions allowing travel to Cuba for humanitarian purposes exist and are used by thousands of Americans each year; and that the President should be free to restrict travel for foreign policy reasons. ", "Legislative Activity. In the 115 th Congress, six bills were introduced that would have lifted remaining restrictions on travel. H.R. 351 (Sanford) would have prohibited restrictions on travel to Cuba, directly or indirectly, or any transactions incident to such travel. S. 1287 (Flake) would have prohibited the President from restricting travel to Cuba or any transactions incident to Cuba. H.R. 572 (Serrano) would have facilitated the export of U.S. agricultural exports to Cuba and would have lifted travel restrictions. H.R. 574 (Serrano), H.R. 2966 (Rush), and S. 1699 (Wyden) would have lifted the economic embargo on Cuba and prohibited restrictions on travel. ", "In October 2017, the House approved (by voice vote) H.R. 3328 (Katko), the Cuban Airport Security Act of 2017. The bill would have required a congressional briefing regarding certain security measures and equipment at each of Cuba's 10 international airports. The measure also would have prohibited a U.S. air carrier from employing a Cuban national in Cuba unless the carrier had publicly disclosed the full text of the formal agreement between the air carrier and the Empresa Cubana de Aeropuertos y Servicios Aeronauticos or any other entity associated with the Cuban government. The bill would also have, to the extent practicable, prohibited U.S. air carriers from hiring Cuban nationals if they had been recruited, hired, or trained by entities owned, operated, or controlled in whole or in part by Cuba's Council of State, Council of Ministers, Communist Party, Ministry of the Revolutionary Armed Forces, Ministry of Foreign Affairs, or Ministry of the Interior. An identical bill, S. 2023 (Rubio), was introduced in the Senate on October 26, 2017.", "In October 2018, Congress completed action on the FAA Reauthorization Act of 2018, signed into law as P.L. 115-254 ( H.R. 302 ), which includes a provision in Section 1957 (similar, although not identical, to a provision in H.R. 3328 noted above) requiring the Transportation Security Administration (TSA) to provide Congress a briefing on certain aspects of security measures at airports in Cuba that have air service to the United States. The law also requires the TSA Administrator (1) to direct all public charters to provide updated flight data to more reliably track the public charter operations of air carriers between the United States and Cuba and (2) to develop and implement a mechanism that corroborates and validates flight schedule data to more reliably track the public charter operations of air carries between the United States and Cuba. This requirement relating to public air charters to and from Cuba stems from a recommendation made by the Government Accountability Office (GAO) in a July 2018 report examining TSA's assessments of Cuban aviation security."], "subsections": []}, {"section_title": "U.S. Exports and Sanctions205", "paragraphs": ["U.S. commercial medical exports to Cuba have been authorized since the early 1990s pursuant to the Cuban Democracy Act of 1992 (CDA), and commercial agricultural exports have been authorized since 2001 pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), but with numerous restrictions and licensing requirements. For medical exports to Cuba, the CDA requires on-site verification that the exported item is to be used for the purpose for which it was intended and only for the use and benefit of the Cuban people. TSRA allows for one-year export licenses for selling agricultural commodities to Cuba, although no U.S. government assistance, foreign assistance, export assistance, credits, or credit guarantees are available to finance such exports. TSRA also denies exporters access to U.S. private commercial financing or credit; all transactions must be conducted in cash in advance or with financing from third countries. ", "Cuba purchased almost $5.8 billion in U.S. products from 2001 to 2017, largely agricultural products. For many of those years, the United States was Cuba's largest supplier of agricultural products. U.S. exports to Cuba rose from about $7 million in 2001 to a high of $712 million in 2008, far higher than in previous years. This increase was in part because of the rise in food prices and because of Cuba's increased food needs in the aftermath of several hurricanes and tropical storms that severely damaged the country's agricultural sector. U.S. exports to Cuba declined considerably from 2009 through 2011, rose again in 2012, and fell every year through 2015, when U.S. exports amounted to just $180 million. (See Figure 3 .)", "Reversing that trend, however, U.S. exports to Cuba increased to $245 million in 2016 and $283 million in 2017. In 2017, U.S. exports to Cuba increased by 15% over the previous year. In the first three quarters of 2018, through September, U.S. exports to Cuba amounted to almost $229 million, about the same amount over the same period in 2017.", "Looking at the composition of U.S. exports to Cuba from 2012 to 2017, the leading products were poultry, soybean oilcake and other solid residue, soybeans, corn, and soybean oil. Poultry has been the leading U.S. export to Cuba since 2012; in 2017, for example, it accounted for about 57% % of U.S. exports. Beyond agricultural products, other categories of products that have increased over the past several years are parts for steam turbines, pesticides, pharmaceutical products, and civilian aircraft, engines, and parts. President Obama's policy changes, as set forth in regulatory changes made to the CACR and EAR, included several measures designed to facilitate commercial exports to Cuba:", "U.S. financial institutions are permitted to open correspondent accounts at Cuban financial institutions to facilitate the processing of authorized transactions. U.S. private export financing is permitted for all authorized export trade to Cuba, except for agricultural goods exported pursuant to TSRA. The definition of the term cash in advance for payment for U.S. exports to Cuba was revised to specify that it means cash before transfer of title . In 2005, OFAC had clarified that payment of cash in advance meant that the payment for the goods had to be received prior to the shipment of the goods from the port at which they were loaded in the United States. The regulatory change means that payment can once again occur before an export shipment is offloaded in Cuba rather than before the shipment leaves a U.S. port. Commercial exports to Cuba of certain goods and services to empower Cuba's nascent private sector are authorized, including for certain building materials for private residential construction, goods for use by private-sector Cuban entrepreneurs, and agricultural equipment for small farmers. Licenses for certain categories of exports are included under a \"general policy of approval.\" These categories include exports for civil aviation and commercial aircraft safety; telecommunications; U.S. news bureaus; human rights organizations and nongovernmental organizations; environmental protection of U.S. and international air quality, waters, and coastlines; and agricultural inputs (such as insecticides, pesticides, and herbicides) that fall outside the scope of those exports already allowed under TSRA. Licenses for exports that will be considered on a case-by-case basis include certain items exported to state-owned enterprises, agencies, and other organizations of the Cuban government that provide goods and services for the use and benefit of the Cuban people. These items include exports for agricultural production, artistic endeavors, education, food processing, disaster preparedness, relief and response, public health and sanitation, residential construction and renovation, public transportation, wholesale and retail distribution for domestic consumption by the Cuban people, construction of facilities for treating public water supplies, facilities for supplying electricity or other energy to the Cuban people, sports and recreation facilities, and other infrastructure that directly benefits the Cuban people. Note: The Trump Administration's policy changes on Cuba, as set forth by amended Commerce Department regulations issued in November 2017, stipulate that export licenses for exports to state-owned enterprises will generally be denied to export items for use by entities or subentities on the State Department's list of restricted entities associated with the Cuban military, police, intelligence, or security services. The commercial export of certain consumer communication devices, related software, applications, hardware, and services, and items for the establishment and update of communications-related systems is authorized; previously such exports were limited to donations. The export of items for telecommunications, including access to the internet, use of internet services, infrastructure creation, and upgrades, also is authorized. Companies exporting authorized goods to Cuba are authorized to have a physical presence in Cuba, such as an office, retail outlet, or warehouse. Persons subject to U.S. jurisdiction generally are authorized to enter into certain contingent contracts for transactions currently prohibited by the embargo. Certain consumer goods sold directly to eligible individuals in Cuba for their personal use generally are authorized.", "USDA Reports. In a June 2015 report, the U.S. Department of Agriculture's (USDA's) Foreign Agricultural Service noted that \"the U.S. share of the Cuban market has slipped dramatically, from a high of 42% in FY2009 to only 16% in FY2014.\" The report contended that the decline in U.S. market share in Cuba \"is largely attributable to a decrease in bulk commodity exports from the United States in light of favorable credit terms offered by key competitors.\" It maintained that the United States had lost market share to those countries able to provide export credits to Cuba. The report concluded that lifting U.S. restrictions on travel and capital flow to Cuba and enabling USDA to conduct market development and credit guarantee programs in Cuba would help the United States recapture its market share in Cuba. ", "Another USDA report published in June 2015 by its Economic Research Service maintained that a more normal economic relationship between the United States and Cuba would allow \"U.S. agricultural exports to develop commercial ties in Cuba that approximate their business relationship in other parts of the world\" (such as the Dominican Republic) and could \"feature a much larger level of U.S. agricultural exports to Cuba.\" According to the report, increased U.S. exports could include such commodities as milk, wheat, rice, and dried beans, as well as intermediate and consumer-oriented commodities.", "U .S. International Trade Commission (U STIC ) Reports. The USITC has issued three studies since 2007 examining the effects of U.S. restrictions on trade with Cuba, with its most recent report issued in April 2016. According to the findings of its 2016 report, U.S. restrictions on trade and travel reportedly have shut U.S. suppliers out of a market in which they could be competitive on price, quality, and proximity. The most problematic U.S. restrictions cited are the inability to offer credit, travel to or invest in Cuba, and use funds sourced and administered by the U.S. government. Cuban nontariff measures and other factors also may limit U.S. exports to and investment in Cuba if U.S. restrictions are lifted, according to the report. These factors include Cuban government control of trade and distribution, legal limits on foreign investment and property ownership, and politically motivated decisionmaking regarding trade and investment. Absent U.S. restrictions, U.S. exports in several sectors likely would increase somewhat in the short term, with prospects for larger increases in the longer term, subject to changes in Cuban policy and economic growth. U.S. exports could increase further if Cuban import barriers were lowered. If U.S. restrictions were removed, U.S. agricultural and manufactured exports to Cuba could increase to almost $1.8 billion annually; if both U.S. restrictions were removed and Cuban barriers were lowered, U.S. exports could approach $2.2 billion annually.", "Legislative Activity. In the 115 th Congress, the 2018 farm bill, P.L. 115-334 ( H.R. 2 ) has a provision permitting funding for two U.S. agricultural export promotion programs. Several other introduced bills would have lifted or eased restrictions on U.S. exports to Cuba.", "In December 2018, both houses approved the conference report ( H.Rept. 115-1072 ) to the 2018 farm bill, P.L. 115-334 ( H.R. 2 ), which retains a Senate provision that permits funding for certain U.S. export promotion programs (Market Access Program and Foreign Market Development Cooperation Program) for U.S. agricultural products in Cuba. As stipulated, the funds cannot be used in contravention with directives set forth under the National Security Presidential Memorandum issued by President Trump in June 2017 that prohibits transactions with entities owned, controlled, or operated by or on behalf of military, intelligence, or security services of Cuba. The provision originated from a Heitkamp amendment to the original Senate version of the farm bill, S. 3042 , approved during markup of the bill by the Senate Committee on Agriculture, Nutrition, and Forestry. H.R. 442 (Emmer)/ S. 472 (Moran) would have repealed or amended various provisions of law restricting trade with Cuba, including certain restrictions in the CDA, the LIBERTAD Act, and TSRA. The bills would have repealed restrictions on private financing for Cuba in TSRA but would have continued to prohibit U.S. government support for foreign assistance or financial assistance, loans, loan guarantees, extension of credit, or other financing for export to Cuba, albeit with presidential waiver authority for national security or humanitarian reasons. The federal government would have been prohibited from expending any funds to promote trade with or develop markets in Cuba, although certain federal commodity promotion programs would have been allowed. H.R. 525 (Crawford) would have permitted U.S. government assistance for U.S. agricultural exports to Cuba as long as the recipient of the assistance was not controlled by the Cuban government; authorized the private financing by U.S. entities of sales of agricultural commodities; and authorized investment for the development of an agricultural business in Cuba as long as the business was not controlled by the Cuban government and did not traffic in property of U.S. nationals confiscated by the Cuban government. S. 275 (Heitkamp) would have amended TSRA to allow for the private financing by U.S. entities of agricultural commodities to Cuba. H.R. 572 (Serrano), among its various provisions, had the goal of facilitating the export of U.S. agricultural and medical exports to Cuba by permanently redefining the term payment of cash in advance to mean that payment is received before the transfer of title and release and control of the commodity to the purchaser; authorizing direct transfers between Cuban and U.S. financial institutions for products exported under the terms of TSRA; establishing an export-promotion program for U.S. agricultural exports to Cuba; and repealing the on-site verification requirement for medical exports to Cuba under the CDA. H.R. 574 (Serrano), H.R. 2966 (Rush), and S. 1699 (Wyden) would have lifted the overall economic embargo on Cuba, including restrictions on exports to Cuba in the CDA and TSRA. S. 1286 (Klobuchar) would have repealed or amended various provisions of law restricting trade with Cuba, including certain restrictions in the CDA, the LIBERTAD Act, and TSRA."], "subsections": []}, {"section_title": "Trademark Sanction", "paragraphs": ["For more than 15 years, the United States has imposed a trademark sanction specifically related to Cuba. A provision in the FY1999 omnibus appropriations measure (\u00a7211 of Division A, Title II, P.L. 105-277 , signed into law October 21, 1998) prevents the United States from accepting payment from Cuban nationals for trademark registrations and renewals that were used in connection with a business or assets in Cuba that were confiscated, unless the original owner of the trademark has consented. U.S. officials maintain that the sanction prohibits a general license under the CACR for transactions or payments for such trademarks. The provision also prohibits U.S. courts from recognizing such trademarks without the consent of the original owner. ", "The measure was enacted because of a dispute between the French spirits company Pernod Ricard and the Bermuda-based Bacardi Limited. Pernod Ricard entered into a joint venture in 1993 with Cubaexport, a Cuban state company, to produce and export Havana Club rum. Bacardi maintains that it holds the rights to the Havana Club name because in 1995 it entered into an agreement for the Havana Club trademark with the Arechabala family, who had originally produced the rum until its assets and property were confiscated by the Cuban government in 1960. The Arechabala family had let the trademark registration lapse in the United States in 1973, and Cubaexport successfully registered it in 1976. Although Pernod Ricard cannot market Havana Club in the United States because of the trade embargo, it wants to protect its future distribution rights should the embargo be lifted. ", "The European Union initiated World Trade Organization (WTO) dispute settlement proceedings in June 2000, maintaining that the U.S. law violates the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). In January 2002, the WTO ultimately found that the trademark sanction violated WTO provisions on national treatment and most-favored-nation obligations in the TRIPS agreement. In March 2002, the United States agreed that it would come into compliance with the WTO ruling through legislative action by January 2003. That deadline was extended several times because no legislative action had been taken to bring Section 211 into compliance with the WTO ruling. In July 2005, however, in an EU-U.S. understanding, the EU agreed that it would not request authorization to retaliate at that time, but reserved the right to do so at a future date, and the United States agreed not to block a future EU request. ", "The U.S. Patent and Trademark Office (USPTO) did not process Cubaexport's 10-year renewal of the Havana Club trademark when it was due in 2006 because the Department of the Treasury's OFAC denied the company the specific license that it needed to pay the fee for renewing the trademark registration. In providing foreign policy guidance to OFAC at the time, the State Department recommended denial of the license, maintaining that doing so would be consistent with \"the U.S. approach toward non-recognition of trademark rights associated with confiscated property\" and consistent with U.S. policy to deny resources to the Cuban government to hasten a transition to democracy.", "Almost a decade later, in January 2016, OFAC issued a specific license to Cubaexport, allowing the company to pay fees to the USPTO for the renewal of the Havana Club trademark registration for the 2006-2016 period. Subsequently, in February 2016, USPTO renewed the trademark registration for 10 additional years, until 2026.", "OFAC had requested foreign policy guidance from the State Department in November 2015 for Cubaexport's request for a specific license. According to the State Department, in evaluating the case, it took into account the \"landmark shift\" in U.S. policy toward Cuba, U.S. foreign policy with respect to its key allies in Europe, and U.S. policy with regard to trademark rights associated with confiscated property. State Department and USPTO officials maintain that the renewal of the Havana Club trademark registration does not resolve the trademark dispute. The State Department notes that federal court proceedings are pending in which Bacardi has filed suit against Cubaexport to contest the Havana Club trademark ownership in the United States and that OFAC's issuance of a license permitting USPTO to renew the trademark registration will allow the two parties to proceed toward adjudication of the case.", "Legislative Activity. In Congress, two different approaches have been advocated for a number of years to bring Section 211 into compliance with the WTO ruling. Some Members want a narrow fix in which Section 211 would be amended so that it applies to all persons claiming rights in trademarks confiscated by Cuba, whatever their nationality, instead of being limited to designated nationals, meaning Cuban nationals. Advocates of this approach argue that it would treat all holders of U.S. trademarks equally. Other Members want Section 211 repealed altogether. They argue that the law endangers more than 5,000 trademarks of more than 400 U.S. companies registered in Cuba. The House Judiciary Committee's Subcommittee on Courts, Intellectual Property, and the Internet held a hearing in February 2016 on the trademark issue and on the issue of confiscated property, but this did not lead to any legislative action.", "In the 115 th Congress, S. 259 (Nelson)/ H.R. 1450 (Issa) would have applied the narrow fix so that the trademark sanction applied to all nationals, whereas four broader bills on Cuba sanctions, H.R. 572 (Serrano), H.R. 574 (Serrano), H.R. 2966 (Rush), and S. 1699 (Wyden), had provisions that would have repealed Section 211. ", "Two FY2018 House appropriations bills, H.R. 3267 (Commerce) and H.R. 3280 (Financial Services), had provisions that would have introduced new sanctions related to Cuba and trademarks, but neither of these were included in the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ). H.R. 3267 had a provision that would have prohibited funds to approve the registration or renewal, or the maintenance of the registration, of a mark, trade name, or commercial name used in connection with a business or assets that were confiscated by the Cuban government unless the original owner has expressly consented. H.R. 3280 had a provision that would have prohibited funding to approve or otherwise allow the licensing (general or specific) of a mark, trade name, or commercial name used in connection with a business or assets that were confiscated by the Cuban government unless the original owner has expressly consented. These provisions had also been included in the House-passed version of a FY2018 omnibus appropriations measure, H.R. 3354 , approved in September 2017.", "Likewise for FY2019, two House Appropriations bill, H.R. 5952 (Commerce) and H.R. 6258 / H.R. 6147 (Financial Services), had provisions related to Cuba and trademarks similar to those that had been included in House bills for FY2018. H.R. 5952 had a provision that would have prohibited funds in the act from being used to approve the registration, renewal, or maintenance of the registration of a mark, trade name, or commercial name that was confiscated in Cuba unless the original owner had expressly consented. H.R. 6258 / H.R. 6147 had a provision that would have provided that no funds made available by the act could be used to authorize a general license or approve a specific license with respect to a mark, trade name, or commercial name that was substantially similar to one that was used in connection with a business or assets that were confiscated by the Cuban government unless the original owner expressly consented. The 115 th Congress did not complete action on either appropriations measure. "], "subsections": []}, {"section_title": "Democracy and Human Rights Funding", "paragraphs": ["Since 1996, the United States has provided assistance\u2014through the U.S. Agency for International Development (USAID), the State Department, and the National Endowment for Democracy (NED)\u2014to increase the flow of information on democracy, human rights, and free enterprise to Cuba. USAID and State Department efforts are funded largely through Economic Support Funds (ESF) in the annual foreign operations appropriations bill. From FY1996 to FY2018, Congress appropriated some $344 million in funding for Cuba democracy efforts. In recent years, this funding included $20 million in each fiscal year from FY2014 through FY2018. For FY2018, however, the Trump Administration, as part of its attempt to cut foreign assistance levels, did not request any democracy and human rights assistance funding for Cuba, but Congress ultimately provided $20 million. For FY2019, the Trump Administration requested $10 million to provide democracy and civil society assistance for Cuba.", "Although USAID received the majority of this funding for many years, the State Department began to receive a portion of the funding in FY2004 and in recent years has been allocated more funding than USAID. The State Department generally has transferred a portion of the Cuba assistance that it administers to NED. ", "USAID's Cuba program has supported a variety of U.S.-based nongovernmental organizations with the goals of promoting a rapid, peaceful transition to democracy, helping to develop civil society, and building solidarity with Cuba's human rights activists. ", "NED is not a U.S. government agency but an independent nongovernmental organization that receives U.S. government funding. Its Cuba program is funded by the organization's regular appropriations by Congress as well as by funding from the State Department. Until FY2008, NED's democratization assistance for Cuba had been funded largely through the annual Commerce, Justice, and State appropriations measure, but it is now funded through the State Department, Foreign Operations and Related Programs appropriations measure. According to information provided by NED on its website, its Cuba funding from FY2014 through FY2017 amounted to $15.9 million.", "FY2017 Appropriations. For FY2017, the Obama Administration had requested $15 million in ESF for Cuba democracy and human rights programs, a 25% reduction from FY2016. According to the request, the assistance would support civil society initiatives that promote democracy, human rights, and fundamental freedoms, particularly freedoms of expression and association. The programs would \"provide humanitarian assistance to victims of political repression and their families, strengthen independent civil society, support the Cuban people's desire to freely determine their future, reduce their dependence on the Cuban state, and promote the flow of uncensored information to, from and within the island.\" ", "In the 114 th Congress, the House version of the FY2017 State Department, Foreign Operations, and Related Programs appropriations bill, H.R. 5912 ( H.Rept. 114-693 ), reported July 15, 2016, would have provided $30 million for democracy promotion in Cuba, double the Administration's request. The bill also would have prohibited funding for business promotion, economic reform, entrepreneurship, or any other assistance that was not democracy building authorized by the LIBERTAD Act of 1996. In contrast, the Senate version of the FY2017 foreign operations appropriations bill, S. 3117 ( S.Rept. 114-290 ), reported June 29, 2016, would have recommended fully funding the Administration's request of $15 million. However, it also would have provided that $3 million be made available for USAID to support free enterprise and private business organizations and people-to-people educational and cultural activities. ", "Because the 114 th Congress did not complete action on FY2017 appropriations, the 115 th Congress took final action in early May 2017 through enactment of the Consolidated Appropriations Act, 2017 ( P.L. 115-31 ). The explanatory statement to the measure provided $20 million in democracy assistance for Cuba, $5 million more than requested, and did not include any of the directives noted above in the House and Senate appropriations bills in the 114 th Congress. ", "FY2018 Appropriations. For FY2018 appropriations, given the strong congressional record of appropriating such aid for many years, some Members of Congress strongly opposed the Trump Administration's proposal to cut all democracy and human rights funding for Cuba. The House Appropriations Committee's version of the FY2018 State Department and Foreign Operations appropriations bill, H.R. 3362 ( H.Rept. 115-253 ), would have provided $30 million in democracy assistance for Cuba but would have prohibited the obligation of funds for business promotion, economic reform, entrepreneurship, or any other assistance that is not democracy-building as expressly authorized in the LIBERTAD Act of 1996 and the CDA of 1992. These provisions were included in the House-passed version of the FY2018 omnibus appropriations measure, H.R. 3354 , approved in September 2017.", "The Senate Appropriations Committee's version of the FY2018 State Department and Foreign Operations appropriations bill, S. 1780 ( S.Rept. 115-152 ), would have provided $15 million for democracy programs in Cuba, with not less than $3 million to support free enterprise and private business organizations in Cuba and people-to-people educational and cultural activities.", "In final action in March 2018, Congress provided $20 million for democracy programs in Cuba in the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ; explanatory statement, Division K) without any of the directives in the House and Senate appropriations bills and reports noted above.", "FY2019 Appropriations. For FY2019, the Trump Administration requested $10 million for democracy and civil society assistance in support of the Administration's Cuba policy. The House Appropriations Committee's State Department and Foreign Operations appropriations bill, H.R. 6385 , would have provided $30 million to promote democracy and strengthen civil society in Cuba, with, according to the report to the bill ( H.Rept. 115-829 ), not less than $8 million for the National Endowment for Democracy; the report would have prohibited the obligation of funds for business promotion, economic reform, entrepreneurship, or any other assistance that was not democracy-building and stipulated that grants exceeding $1 million, or grants to be implemented over a period of 12 months, would be awarded only to organizations with experience promoting democracy inside Cuba. The Senate Appropriations version of the bill, S. 3108 , would have provided $15 million for democracy programs in Cuba. A series of continuing resolutions ( P.L. 115-245 and P.L. 115-298 ) continued FY2019 funding at FY2018 levels through December 21, 2018, but the 115 th Congress did not complete action on FY2019 appropriations, leaving the task to the 116 th Congress. ", "Oversight of U.S. Democracy Assistance to Cuba. The GAO has issued three major reports since 2006 examining USAID and State Department democracy programs for Cuba. In the most recent report, issued in 2013, GAO concluded that USAID had improved its performance and financial monitoring of implementing partners' use of program funds, but found that the State Department's financial monitoring had gaps. Both agencies were reported to be taking steps to improve financial monitoring. ", "In 2014, two investigative news reports alleged significant problems with U.S. democracy promotion efforts in Cuba. In April, an Associated Press (AP) investigative report alleged that USAID, as part of its democracy promotion efforts for Cuba, had established a \"Cuban Twitter\" known as ZunZuneo, a communications network designed as a \"covert\" program \"to undermine\" Cuba's communist government built with \"secret shell companies\" and financed through foreign banks. According to the press report, the project, which was used by thousands of Cubans, lasted more than two years until it ended in 2012. USAID, which strongly contested the report, issued a fact sheet about the ZunZuneo program. It maintained that program was not \"covert\" but rather that, just as in other places where USAID is not always welcome, the agency maintained a \"discreet profile\" on the project to minimize risk to staff and partners and to work safely. Some Members of Congress strongly criticized USAID for not providing sufficient information to Congress about the program when funding was appropriated, whereas other Members staunchly defended the agency and the program.", "In August 2014, the AP reported on another U.S.-funded democracy program for Cuba in which a USAID contractor sent about a dozen youth from several Latin American countries (Costa Rica, Peru, and Venezuela) in 2010 and 2011 to Cuba to participate in civic programs, including an HIV-prevention workshop, with the alleged goal to \"identify potential social-change actors\" in Cuba. The AP report alleged that \"the assignment was to recruit young Cubans to anti-government activism under the guise of civic programs.\" USAID responded in a statement maintaining that the AP report \"made sensational claims against aid workers for supporting civil society programs and striving to give voice to these democratic aspirations.\"", "In December 2015, USAID's Office of Inspector General issued a report on USAID's Cuban Civil Society Support Program that examined both the ZunZuneo and HIV-prevention projects. The report cited a number of problems with USAID's management controls of the civil society program and made a number of recommendations, including that USAID conduct an agency-wide analysis to determine whether a screening policy is needed to address intelligence and subversion threats and, if so, develop and implement one."], "subsections": []}, {"section_title": "Radio and TV Mart\u00ed229", "paragraphs": ["U.S.-government-sponsored radio and television broadcasting to Cuba\u2014Radio and TV Mart\u00ed\u2014began in 1985 and 1990, respectively. Until October 1999, U.S.-government-funded international broadcasting programs had been a primary function of the United States Information Agency (USIA). When USIA was abolished and its functions were merged into the Department of State at the beginning of FY2000, the Broadcasting Board of Governors (BBG) became an independent agency that included such entities as the Voice of America, Radio Free Europe/Radio Liberty, Radio Free Asia, and the Office of Cuba Broadcasting (OCB). In August 2018, the BBG officially changed its name to the U.S. Agency for Global Media (USAGM). ", "Today, OCB, which has been headquartered in Miami, FL, since 1998, manages Radio and TV Mart\u00ed and the Mart\u00ednoticiaas.com website and its social media platforms on YouTube, Google, and Facebook. According to the BBG's 2019 Congressional Budget Justification , the Mart\u00eds reach 11.1% of Cubans on a weekly basis with audio, video, and digital content delivered by radio, satellite TV, online, and on distinctly Cuban digital \"packages\" ( paquetes ). The largest audiences reportedly are for Radio Mart\u00ed and TV Mart\u00ed, with weekly audiences respectively reaching 8% and 6.8% of Cubans, while online content reaches a smaller audience of 5.3%. OCB also administers a shortwave transmitting station in Greenville, NC. Additional newer transmitters at Greenville reportedly have helped increase Radio Mart\u00ed's presence in Cuba, and the increase in the number of frequencies has made it harder for the Cuban government to interfere with the radio broadcasts.", "Funding. From FY1984 through FY2018, Congress appropriated about $882 million for broadcasting to Cuba. In recent years, funding has amounted to some $27-$29 million in each fiscal year from FY2014 to FY2018. The Trump Administration's FY2019 request is for almost $13.7 million.", "For FY2017, the Obama Administration requested $27.1 million for the OCB, about the same amount appropriated in FY2016. The Administration also requested authority for the BBG to establish a new Spanish-language, nonfederal media organization that would receive a BBG grant and perform the functions of the current OCB. The House version of the FY2017 State Department, Foreign Operations, and Related Programs appropriations bill, H.R. 5912 ( H.Rept. 114-693 ), had a provision that would have blocked the Administration's request by prohibiting funding to establish an independent grantee organization to carry out any and all broadcasting and related programs to the Latin American and Caribbean region or otherwise substantially alter the structure of the OCB unless specifically authorized by a subsequent act of Congress. The funding prohibition pertained to the merger of the OCB and the Voice of America Latin America Division. The Senate version of the bill, S. 3117 ( S.Rept. 114-290 ), would have provided $27.4 million for the OCB, $300,000 more than the Administration's request. The report to the bill stated that the committee did not support the proposed contractor reduction of $300,000 at the OCB. ", "The 115 th Congress completed final action on FY2017 appropriations in early May 2017 through enactment of the Consolidated Appropriations Act, 2017 ( P.L. 115-31 ). The explanatory statement to the measure provided $28.056 million for the Office of Cuba Broadcasting, $1 million more than requested. According to the BBG, the actual amount provided for the OCB in FY2017 was $28.938 million.", "For FY2018, the Trump Administration requested $23.656 million for the OCB, $4.4 million less than the amount Congress appropriated for FY2017. According to the BBG's request, the funding reduction would be covered by a reduction in contractor support, elimination of most vacant staff positions and reduction of other government positions through attrition, elimination of ineffective leased broadcast transmissions, and a reduction of administrative costs. The report to the House Appropriations Committee's version of the FY2018 State Department and Foreign Operations appropriations bill ( H.Rept. 115-253 to H.R. 3362 ) would have provided $28.1 million for broadcasting to Cuba, $4.4 million above the request; this also was included in the House-passed version of the FY2018 omnibus appropriations measure, H.R. 3354 , approved in September 2017. The Senate Appropriations Committee's version of the FY2018 State Department and Foreign Operations appropriations bill, S. 1780 ( S.Rept. 115-152 ), would have provided not less than $28.6 million for broadcasting to Cuba. In final action Congress provided $28.936 million for Cuba broadcasting, $5.28 million more than requested, in the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ; explanatory statement, Division K), signed into law in March 2018. ", "For FY2019, the Trump Administration requested $13.656 million for the OCB, $10 less than the Administration's FY2018 request and $15.3 million less than the amount provided in FY2017. The rationale for the proposed cut in funding for the OCB was to find efficiencies between OCB and the Voice of America's Latin American division. The House Appropriations Committee's FY2019 State Department and Foreign Operations bill, H.R. 6385 , would have provided $29.1 million for Cuba broadcasting, while the Senate Appropriations Committee's bill, S. 3108 , would have provided $29.2 million. The report to the Senate bill, S.Rept. 115-282 , would also have called for a State Department Cuba report on Internet access, the use of cell phones to access data, the impact of access to telecommunications technology on increased political and economic opportunities, and the impact of telecommunications development on human rights. The 115 th Congress did not complete action on FY2019 appropriations, leaving the task to the 116 th Congress. Nevertheless, the 115 th Congress approved a series of continuing resolutions ( P.L. 115-245 and P.L. 115-298 ) that continued FY2019 funding at FY2018 levels through December 21, 2018. ", "Oversight Issues. Both Radio and TV Mart\u00ed have at times been the focus of controversies, including questions about adherence to broadcast standards. From 1990 through 2011, there were almost dozen government studies and audits of the OCB, including investigations by the GAO, by a 1994 congressionally established Advisory Panel on Radio and TV Mart\u00ed, by the State Department Office Inspector General, and by the combined State Department/BBG Office Inspector General. In 2009, GAO issued a report on the issue of small audience levels for both Radio and TV Mart\u00ed as well as concerns with adherence to relevant domestic laws and international standards, including the domestic dissemination of OCB programming, inappropriate advertisements during OCB programming, and TV Mart\u00ed's interference with Cuban broadcasts. In 2010, the Senate Foreign Relations Committee majority issued a staff report that cited problems with adherence to broadcast standards, audience size, and Cuban government jamming. Among its recommendations, the report called for OCB to be moved to Washington, DC, and integrated fully into the Voice of America. A 2011 GAO report recommended that the BBG provide an analysis on the estimated costs and savings of sharing resources between OCB and the Voice of America's Latin America Division.", "Concerns About TV Mart\u00ed Program in 2018. On October 26, 2018, media reports highlighted a disturbing TV Mart\u00ed program originally aired in May 2018 (which remained on Radio and Television Mart\u00ed's website) that referred to U.S. businessman and philanthropist George Soros as \"the multimillionaire Jew of Hungarian origin\" and as a \"non-believing Jew of flexible morals.\" The program espoused a number of conspiracy theories about Soros, including that he was the architect of the 2008 financial crisis.", "Senator Jeff Flake spoke out against the TV Mart\u00ed program, which he referred to as \"taxpayer-funded anti-Semitism.\" He sent a letter to John Lansing, chief executive officer (CEO) of the USAGM, on October 29, 2018, asking for an investigation into the program, including its evolution, from initial inception to final approval; who produced the program; and what review process was in place to ensure it met VOA journalistic standards. Senator Flake also called for those approving anti-Semitic content to be removed from their positions immediately, asserting that \"lack of action on this matter will further denigrate the United States as a credible voice overseas, the repercussion of which will be severe.\"", "Initially, OCB Director Tom\u00e1s Regalado, who began his appointment in early June 2018, responded by pulling the original program and related shorter segments from the OCB's online website and acknowledging that the program \"did not have the required balance.\" USAGM's CEO Lansing took further action on October 29, 2018, by issuing a statement that the program about Soros \"is inconsistent with our professional standards and ethics.\" He stated that those deemed responsible for the production would be immediately placed on administrative leave pending an investigation into their apparent misconduct. Lansing also directed \"an immediate, full content audit to identify any patterns of unethical reporting at the network\" and asked Regalado to \"require ethics and standards refresher training for all OCB journalists. \" ", "Lansing wrote a letter of apology to Soros in early November 2018 in which he said that the program \"was based on extremely poor and unprofessional journalism,\" and \"was utterly offensive in its anti-Semitism and clear bias.\" Lansing also stated in the letter that he had instructed OCB Director Regalado \"to remove the offensive story from the TV Mart\u00ed website and social media\" and \"to hire a full time \"standards and practices\" editor to oversee all outgoing content with strict adherence to the highest professional standards of journalism.\" The audit of reporting at the network reportedly uncovered an earlier story about Soros that included anti-Semitic language as well as an anti-Muslim opinion piece published in September 2018, that were also removed from the website. As of mid-December 2018, press reports maintain that four OCB employees have been placed on leave and two contract staffers have been fired because of the offensive programming. ", "The TV Mart\u00ed program raises significant concerns about the OCB's adherence to broadcast standards and questions about the program's intended audience. TV Mart\u00ed's authorizing legislation, the Television Broadcasting to Cuba Act ( P.L. 101-246 , Title II, Part D, 22 U.S.C. 1465bb ) has a provision stating that television broadcasting to Cuba \"shall be in accordance with all Voice of America standards to ensure the broadcast of programs which are objective, accurate, balance, and which present a variety of views.\" ", "U.S. law sets forth the following principles for VOA broadcasts: (1) VOA will serve as a consistently reliable and authoritative source of news. VOA news will be accurate, objective, and comprehensive; (2) VOA will represent America, not any single segment of American society, and will therefore present a balanced and comprehensive projection of significant American thought and institutions; and (3) VOA will present the polices of the United States clearly and effectively and also will present responsible discussion and opinion on these policies. These VOA principles and broader U.S. international broadcasting standards and principles are set forth in 22 U.S.C. 6202 ( P.L. 103-236 , Title III, Section 303, and P.L. 103-415 ).", "The anti-Semitic program broadcast by TV Mart\u00ed prompted the Senate Foreign Relations Committee to approve an amendment to S. 3654 , the U.S. Agency for Global Media Reform Act, during committee consideration of the bill on November 28, 2018. Offered by Senator Jeff Flake, the amendment was aimed at holding USAGM accountable for the incident. The provision would have required USAGM's CEO to brief or report to the appropriate congressional committees on any employee of the agency or an agency grantee network who has been suspended or placed on administrative leave without a formal disciplinary determination for writing or approving content in programming inconsistent with the agency's mission to \"inform, engage, and connect people around the world in support of freedom and democracy.\" The briefing or report would have been required to include information on the employment status of the suspended employee and the \"reasons for the Agency's failure to made a formal disciplinary determination.\" The Senate Foreign Relations Committee reported the bill on November 28, 2018, but no further action was taken on the measure before the end of the 115 th Congress. "], "subsections": []}, {"section_title": "Migration Issues249", "paragraphs": ["In its final days in office, the Obama Administration announced another major Cuba policy shift. On January 12, 2017, the United States ended the so-called \"wet foot/dry foot\" policy under which thousands of undocumented Cuban migrants entered the United States in recent years. (Under that policy, those Cuban migrants interdicted at sea generally were returned to Cuba whereas those reaching U.S. land were allowed entrance into the United States and generally permitted to stay.) Under the new policy, as announced by President Obama and then-Secretary of Homeland Security Jeh Johnson, Cuban nationals who attempt to enter the United States illegally and do not qualify for humanitarian relief are now subject to removal. The Cuban government also agreed to begin accepting the return of Cuban migrants who have been ordered removed. ", "At the same time, the Obama Administration announced that it was ending the special Cuban Medical Professional Parole program, a 10-year-old program allowing Cuban medical professionals in third countries to be approved for entry into the United States.", "Background. Cuba and the United States reached two migration accords in 1994 and 1995 designed to stem the mass exodus of Cubans attempting to reach the United States by boat. On the minds of U.S. policymakers was the 1980 Mariel boatlift, in which 125,000 Cubans fled to the United States with the approval of Cuban officials. In response to Fidel Castro's threat to unleash another Mariel, U.S. officials reiterated U.S. resolve not to allow another exodus. Amid escalating numbers of fleeing Cubans, on August 19, 1994, President Clinton abruptly changed U.S. immigration policy, under which Cubans attempting to flee their homeland were allowed into the United States, and announced that the U.S. Coast Guard and Navy would take Cubans rescued at sea to the U.S. Naval Station at Guantanamo Bay, Cuba. Despite the change in policy, Cubans continued to flee in large numbers.", "As a result, in early September 1994, Cuba and the United States began talks that culminated in a September 9, 1994, bilateral agreement to stem the flow of Cubans fleeing to the United States by boat. In the agreement, the United States and Cuba agreed to facilitate safe, legal, and orderly Cuban migration to the United States, consistent with a 1984 migration agreement. The United States agreed to ensure that total legal Cuban migration to the United States would be a minimum of 20,000 each year, not including immediate relatives of U.S. citizens. (For information on the effect of the staff reduction at the U.S. Embassy in Havana on visa processing, see \" Effect of Staff Reduction on U.S. Embassy Havana Operations \" above.)", "In May 1995, the United States reached another accord with Cuba under which the United States would parole the more than 30,000 Cubans housed at Guantanamo into the United States but would intercept future Cuban migrants attempting to enter the United States by sea and would return them to Cuba. The two countries would cooperate jointly in the effort. Both countries also pledged to ensure that no action would be taken against those migrants returned to Cuba as a consequence of their attempt to immigrate illegally. In January 1996, the Department of Defense announced that the last of some 32,000 Cubans intercepted at sea and housed at Guantanamo had left the U.S. naval station, most having been paroled into the United States.", "Maritime Interdictions. Since the 1995 migration accord, the U.S. Coast Guard has interdicted thousands of Cubans at sea and returned them to their country. Until early January 2017, those Cubans who reached the U.S. shore were allowed to apply for permanent resident status in one year, pursuant to the Cuban Adjustment Act of 1966 (P.L. 89-732). In short, most interdictions, even in U.S. coastal waters, resulted in a return to Cuba, whereas those Cubans who touched shore were allowed to stay in the United States. Some had criticized this so-called wet foot/dry foot policy as encouraging Cubans to risk their lives to make it to the United States and as encouraging alien smuggling. Cuba had long opposed the policy, which it viewed as encouraging illegal, unsafe, and disorderly migration, alien smuggling, and Cubans' irregular entry into the United States from third countries.", "Over the years, the number of Cubans interdicted at sea by the U.S. Coast Guard has fluctuated annually, influenced by several factors, including the economic situations in Cuba and the United States. The number of interdictions rose from 666 in FY2002 to 2,868 in FY2007 (see Figure 4 ). In the three subsequent years, maritime interdictions declined significantly to 422 by FY2010. Major reasons for the decline were reported to include the U.S. economic downturn, more efficient coastal patrolling, and more aggressive prosecution of migrant smugglers by both the United States and Cuba. From FY2011 through FY2016, however, the number of Cubans interdicted by the Coast Guard increased each year, from 1,047 in FY2011 to 5,230 in FY2016. The increase in the flow of maritime migrants in 2015 and 2016 was driven by concerns among Cubans that the favorable treatment granted to Cuban migrants would end.", "With the change in U.S. immigration policy toward Cuba in January 2017, the number of Cubans interdicted by the Coast Guard dropped to a trickle. For FY2017, the Coast Guard interdicted 2,109 Cubans, with the majority of these interdictions occurring before the policy change. For FY2018, as of August 14, 2018, the Coast Guard interdicted 200 Cubans at sea.", "Arrival of Undocumented Cuban Migrants. According to statistics from the Department of Homeland Security, the number of undocumented Cubans entering the United States both at U.S. ports of entry and between ports of entry rose from almost 8,170 in FY2010 to 58,269 in FY2016 (see Table 1 ). Beginning around FY2013, according to the State Department, undocumented Cuban migrants began to favor land-based routes to enter the United States, especially via ports of entry from Mexico. Since that time and the change in U.S. immigration policy in early 2017, the number of undocumented Cubans entering by land increased significantly, with a majority entering through the southwestern border.", "Just as the number of Cubans interdicted by the U.S. Coast Guard at sea has dropped precipitously since the change in U.S. immigration policy toward Cuba, the number of undocumented Cuban migrants entering the United States at ports of entry and between ports of entry has fallen considerably. In FY2017, 20,955 undocumented Cubans entered the United States at and between ports of entry, with the majority of these, almost 18,000, entering before the change in U.S. immigration policy. In FY2018, as of August 21, 2018, 6,044 undocumented Cubans arrived in the United States at or between ports of entry, about a 70% decline from all of FY2017."], "subsections": []}, {"section_title": "Antidrug Cooperation", "paragraphs": ["Cuba is not a major producer or consumer of illicit drugs, but its extensive shoreline and geographic location make it susceptible to narcotics-smuggling operations. Drugs that enter the Cuban market are largely the result of onshore wash-ups from smuggling by high-speed boats moving drugs from Jamaica to the Bahamas, Haiti, and the United States or by small aircraft from clandestine airfields in Jamaica. For a number of years, Cuban officials have expressed concerns about the use of their waters and airspace for drug transit and about increased domestic drug use. The Cuban government has taken a number of measures to deal with the drug problem, including legislation to stiffen penalties for traffickers, increased training for counternarcotics personnel, and cooperation with a number of countries on antidrug efforts. Since 1999, Cuba's Operation Hatchet has focused on maritime and air interdiction and the recovery of narcotics washed up on Cuban shores. Since 2003, Cuba has aggressively pursued an internal enforcement and investigation program against its incipient drug market with an effective nationwide drug prevention and awareness campaign.", "Over the years, there have been varying levels of U.S.-Cuban cooperation on antidrug efforts. In 1996, Cuban authorities cooperated with the United States in the seizure of almost 6 metric tons of cocaine aboard the Miami-bound Limerick , a Honduran-flag ship. Cuba turned over the cocaine to the United States and cooperated fully in the investigation and subsequent prosecution of two defendants in the case in the United States. Cooperation has increased since 1999, when U.S. and Cuban officials met in Havana to discuss ways of improving antidrug cooperation. Cuba accepted an upgrading of the communications link between the Cuban Border Guard and the U.S. Coast Guard as well as the stationing of a U.S. Coast Guard drug interdiction specialist at the U.S. Interests Section in Havana. The Coast Guard official was posted to the U.S. Interests Section in September 2000.", "Since the reestablishment of diplomatic relations with Cuba in 2015, U.S. antidrug cooperation has increased further, with several dialogues and exchanges on counternarcotics issues. In December 2015, U.S. and Cuban officials held talks at the headquarters of the Drug Enforcement Administration (DEA) in Washington, DC, with delegations discussing ways to stop the illegal flow of narcotics and exploring ways to cooperate on the issue. In April 2016, Cuban security officials toured the U.S. Joint Interagency Task Force South (JIATF-South) based in Key West, FL. JIATF-South has responsibility for detecting and monitoring illicit drug trafficking in the region and for facilitating international and interagency interdiction efforts. At a July 2016 dialogue in Havana with U.S. officials from the State Department, DEA, the U.S. Coast Guard, and Immigration and Customs Enforcement/Homeland Security Investigations, Cuba and the United States signed a counternarcotics arrangement to facilitate cooperation and information sharing. Technical exchanges between the U.S. Coast Guard and Cuba's Border Guard on antidrug efforts and other areas of cooperation occur periodically. ", "According to the State Department's 2018 International Narcotics Control Strategy Report (INCSR), issued in March 2018, Cuba has 40 bilateral agreements for antidrug cooperation with countries worldwide, including the 2016 U.S.-Cuban agreement noted above. The report also stated that Cuban authorities and the U.S. Coast Guard share tactical information related to vessels transiting through Cuban territorial waters suspected of trafficking and coordinate responses. In addition, as noted in the report, direct communications were established in July 2016 between the U.S. DEA and Cuban counterparts within the Ministry of Interior's National Anti-Drug Directorate. Since then, according to the INCSR, the DEA has received approximately 20 requests for information related to drug investigations in addition to cooperation leading to Cuba's arrest of a fugitive wanted in the United States. More broadly, the INCR reports that Cuba has provided assistance to U.S. state and federal prosecutions by providing evidence and information, and has demonstrated a willingness to cooperate on law enforcement matters. ", "As in the past, the State Department contended in the 2018 INCSR that \"enhanced communication and cooperation between the United States, international partners, and Cuba, particularly in terms of real-time information-sharing, would likely lead to increased interdictions and disruptions of illegal drug trafficking.\" As noted in the INCSR, Cuba reported maritime seizures of 2.72 metric tons (MT) of illicit drugs in 2016 (2.5 MT of marijuana and 225 kilograms of cocaine). This compares to 906 kilograms of maritime seizures in 2015. "], "subsections": []}, {"section_title": "U.S. Property Claims", "paragraphs": ["An issue in the process of normalizing relations is Cuba's compensation for the expropriation of thousands of properties of U.S. companies and citizens in Cuba. The Foreign Claim Settlement Commission (FCSC), an independent agency within the Department of Justice, has certified 5,913 claims for expropriated U.S. properties in Cuba valued at $1.9 billion in two different claims programs; with accrued interest, the properties' value would be some $8 billion. In 1972, the FCSC certified 5,911 claims of U.S. citizens and companies that had their property confiscated by the Cuban government through April 1967, with 30 U.S. companies accounting for almost 60% of the claims. In 2006, the FCSC certified two additional claims in a second claims program covering property confiscated after April 1967. Many of the companies that originally filed claims have been bought and sold numerous times. There are a variety of potential alternatives for restitution or compensation schemes to resolve the outstanding claims, but resolving the issue likely would entail considerable negotiation and cooperation between the two governments. ", "Although Cuba has maintained that it would negotiate compensation for the U.S. claims, it does not recognize the FCSC valuation of the claims or accrued interest. Instead, Cuba has emphasized using declared taxable value as an appraisal basis for expropriated U.S. properties, which would amount to almost $1 billion, instead of the $1.9 billion certified by the FCSC. Moreover, Cuba generally has maintained that any negotiation should consider losses that Cuba has accrued from U.S. economic sanctions. Cuba estimates cumulative damages of the U.S. embargo at $134.5 billion in current prices as of 2018.", "Several provisions in U.S. law specifically address the issue of compensation for properties expropriated by the Cuban government. Section 620(a)(2) of the Foreign Assistance Act of 1961 prohibits foreign assistance, a sugar quota authorizing the importation of Cuban sugar into the United States, or any other benefit under U.S. law until the President determines that the Cuban government has taken appropriate steps to return properties expropriated by the Cuban government to U.S. citizens and entities not less than 50% owned by U.S. citizens, or to provide equitable compensation for the properties. The provision, however, authorizes the President to waive its restrictions if he deems it necessary in the interest of the United States.", "The LIBERTAD Act includes the property claims issue as one of the many factors that the President needs to consider in determining when a transition government is in power in Cuba and when a democratically elected government is in power. These determinations are linked, respectively, to the suspension and termination of the economic embargo on Cuba. For a transition government, as set forth in Section 205(b)(2) of the law, the President shall take into account the extent to which the government has made public commitments and is making demonstrable progress in taking steps to return property taken by the Cuban government on or after January 1, 1959, to U.S. citizens (and entities that are 50% or more beneficially owned by U.S. citizens) or to provide equitable compensation for such property. A democratically elected government, as set forth in Section 206 of the law, is one that, among other conditions, has made demonstrable progress in returning such property or providing full compensation for such property, in accordance with international law standards and practice. ", "Section 103 of the LIBERTAD Act also prohibits a U.S. person or entity from financing any transaction that involves confiscated property in Cuba where the claim is owned by a U.S. national. The sanction may be suspended once the President makes a determination that a transition government is in power and shall be terminated when the President makes a determination that a democratically elected government is in power.", "In the 114 th Congress, two House hearings focused on the property claims issue. The House Western Hemisphere Subcommittee of the Committee on Foreign Affairs held a hearing in June 2015, and the House Judiciary Committee's Subcommittee on Courts, Intellectual Property, and the Internet held a hearing in February 2016.", "Since the reestablishment of diplomatic relations with Cuba in 2015, U.S. and Cuban officials have held three meetings on claims issues. The first meeting took place in December 2015 in Havana, with talks including discussions of the FCSC-certified claims of U.S. nationals, claims related to unsatisfied U.S. court judgments against Cuba (reportedly 10 U.S. state and federal judgments totaling about $2 billion), and some claims of the U.S. government. The Cuban delegation raised the issue of claims against the United States related to the U.S. embargo. A second claims meeting was held in July 2016, in Washington, DC. According to the State Department, the talks allowed for an exchange of views on historical claims-settlement practices and processes going forward. A third claims meeting was held in Havana in January 2017. ", "As noted above, Title III of the LIBERTAD Act holds any person or government that traffics in U.S. property confiscated by the Cuban government liable for monetary damages in U.S. federal court. To date, however, pursuant to provisions of the law, all Administrations have suspended the right to file law suits at six-month intervals, For the suspension, the President (since 2013, the Secretary of State) must determine that it is necessary to the national interests of the United States and will expedite a transition to democracy in Cuba. Secretary of State Pompeo made the most recent determination in June 2018, which is effective from August 1, 2018, through January 2019. ", "In November 2018, National Security Adviser John Bolton maintained in a press interview that the Administration was exploring whether to continue to suspend Title III or to allow lawsuits to go forward. If the right to file lawsuits was not suspended, Title III would permit those U.S. nationals with claims certified by the FCSC to file suit against those trafficking in confiscated property. Significantly, Title III also would permit U.S. nationals who were not U.S. nationals at the time of the confiscation to file suit. A 1996 report to Congress by the State Department required by the LIBERTAD Act estimated that there could be some 75,000 to 200,000 claims by Cuban Americans with the value running into the tens of billions of dollars. ", "When the LIBERTAD Act was enacted in 1996, the intent of Title III was to prevent foreign investment in properties confiscated by the Cuban government. However, since some U.S. companies have entered into transactions or investment projects with Cuban companies in recent years as a result of the U.S. engagement process with Cuba, some potentially could be susceptible to legal action if the Administration did not continue to suspend the right to file lawsuits. Lifting the suspension of the right to file lawsuits under Title III could have a significant effect on foreign companies conducting business in Cuba because of the potential risk emanating from such lawsuits. When the LIBERTAD Act was passed in 1996, several foreign governments strongly objected, and some (Canada, EU, and Mexico) enacted countermeasures to block enforcement of the U.S. sanctions. The EU could revive a WTO dispute against the LIBERTAD Act, which it suspended in 1998 when it reached an understanding on the issue with the United States that included the presumption of continued suspension of Title III."], "subsections": []}, {"section_title": "U.S. Fugitives from Justice", "paragraphs": ["An issue that had been mentioned for many years in the State Department's annual terrorism report was Cuba's harboring of fugitives wanted in the United States. The most recent mention of the issue was in the 2014 terrorism report (issued in April 2015), which stated that Cuba \"does continue to harbor fugitives wanted to stand trial or to serve sentences in the United States for committing serious violations of U.S. criminal laws, and provides some of these individuals limited support, such as housing, food ration books, and medical care.\" With the resumption of diplomatic relations with Cuba, the United States have held several law enforcement dialogues in that reportedly has included the issue of fugitives from justice. ", "U.S. fugitives from justice in Cuba include convicted murderers and numerous hijackers, most of whom entered Cuba in the 1970s and early 1980s. For example, Joanne Chesimard, also known as Assata Shakur, was added to the Federal Bureau of Investigation's (FBI's) Most Wanted Terrorist list in May 2013. Chesimard was part of militant group known as the Black Liberation Army. In 1977, she was convicted for the 1973 murder of a New Jersey State Police officer and sentenced to life in prison. Chesimard escaped from prison in 1979 and, according to the FBI, lived underground before fleeing to Cuba in 1984. Another fugitive, William \"Guillermo\" Morales, who was a member of the Puerto Rican militant group known as the Armed Forces of National Liberation, reportedly has been in Cuba since 1988 after being imprisoned in Mexico for several years. In 1978, both of his hands were maimed by a bomb he was making. He was convicted in New York on weapons charges in 1979 and sentenced to 10 years in prison and 5 years' probation, but he escaped from prison the same year. In addition to Chesimard and other fugitives from the past, a number of U.S. fugitives from justice wanted for Medicare and other types of insurance fraud have fled to Cuba in recent years. ", "Although the United States and Cuba have an extradition treaty in place dating to 1905, in practice the treaty has not been utilized. Instead, for more than a decade, Cuba has returned wanted fugitives to the United States on a case-by-case basis. For example, in 2011, U.S. Marshals picked up a husband and wife in Cuba who were wanted for a 2010 murder in New Jersey, and in April 2013, Cuba returned a Florida couple who allegedly had kidnapped their own children (who were in the custody of the mother's parents) and fled to Havana. In August 2018, Cuba arrested and returned to the United States a long-sought U.S. fugitive from justice wanted in connection with ecoterrorism who had stopped in Cuba on his way to Russia. In November 2018, Cuba returned to the United States a New Jersey man wanted on murder charges. In another case demonstrating U.S.-Cuban law enforcement cooperation, Cuba successfully prosecuted a Cuban national in February 2018 who had fled to Cuba after murdering a doctor in Florida in 2015\u2014the main witness was a Palm Beach detective. ", "Cuba generally, however, has refused to render to U.S. justice any fugitive judged by Cuba to be \"political,\" such as Chesimard, who they believe could not receive a fair trial in the United States. Moreover, in the past Cuba has responded to U.S. extradition requests by stating that approval would be contingent upon the United States returning wanted Cuban criminals from the United States. ", "When President Trump announced his policy toward Cuba on June 16, 2017, he called for Cuba to return to the United States U.S. fugitives from justice and specifically called for the return of Joanne Chesimard. Cuban Foreign Minister Rodr\u00edguez rejected the return of certain political refugees, such as Chesimard, who had received asylum from the Cuban government. ", "In the 115 th Congress, the explanatory statement (Division K) to the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) directed the Secretary of State to engage the government of Cuba \"to resolve cases of fugitives from justice, including persons sought by the United States Department of Justice for such crimes committed in the United States, such as Joanne Chesimard.\" Two resolutions also were introduced, H.Res. 664 (King) and S.Res. 391 (Menendez), that would have called for the immediate extradition or rendering to the United States of all fugitives from justice in Cuba receiving safe harbor to escape prosecution or confinement for criminal offenses committed in the United States. Another initiative, H.R. 1744 (Smith, New Jersey), would have require a report on fugitives from U.S. justice in Cuba and U.S. efforts to secure the return of such fugitives. No further action was taken on these measures. "], "subsections": []}]}, {"section_title": "Outlook", "paragraphs": ["First Vice President Miguel D\u00edaz-Canel succeeded Ra\u00fal Castro as president in April 2018, but any near-term change to the government's one-party communist political system is unlikely. Cuba is now in the midst of rewriting its 1976 constitution, with a planned national referendum on February 24, 2019. Among the changes are the addition of a new appointed prime minister to oversee government operations, age and term limits on the president, and some market-oriented economic reforms, including the right to private property. However, the new constitution still would ensure the state sector's dominance over the economy and the role of the Communist Party in the political system as the only official party.", "Ra\u00fal Castro is continuing as first secretary of the party until 2021, and he played a key role heading the commission rewriting the constitution. Nevertheless, the government of D\u00edaz-Canel, who is 58 years of age, brings to power a leader from a new generation and can be viewed as the culmination of generational change in Cuba's governmental institutions that began several years ago. The government of Ra\u00fal Castro began the implementation of significant economic policy changes, moving toward a more mixed economy with a stronger private sector, but its slow gradualist approach did not produce major improvements to the Cuban economy. In December 2018, President D\u00edaz-Canel backtracked on implementing regulations that likely would have shrunk the private sector, and he slowed down implementation of a controversial decree regulating artistic expression, actions that appeared to demonstrate his responsiveness to public criticism and concerns and his independence from the previous Castro government. Looking ahead, President D\u00edaz-Canel continues to faces two significant challenges\u2014moving forward with economic reforms that produce results and responding to desires for greater freedom. ", "The Obama Administration's shift in U.S. policy toward Cuba opened up engagement with the Cuban government in a variety of areas. Economic linkages with Cuba increased because of the policy changes, although to what extent they will continue to increase is uncertain given that the overall embargo and numerous other sanctions against Cuba remain in place. ", "President Trump's partial rollback of Obama-era changes and introduction of new economic sanctions has limited opportunities for U.S. business engagement and contributed to a downturn in American travel to Cuba in the second half of 2017 and first part of 2018, although reports indicate that travel increased in the second part of the year because of a large increase in those visiting via cruise ships. The U.S. decision to downsize the diplomatic staff of the U.S. Embassy in Havana in response to unexplained injuries to U.S. diplomatic personnel in Cuba resulted in the suspension of most visa processing at the embassy and reduced other embassy operations, which has made bilateral engagement and existing areas of government-to-government cooperation more difficult. ", "Just as there were diverse opinions in the 114 th Congress over U.S. policy toward Cuba, debate over Cuba policy continued in the 115 th Congress, especially with regard to U.S. economic sanctions. Most significantly, in the 2018 farm bill, P.L. 115-334 , enacted in December 2018, Congress approved a provision permitting funding for two U.S. agricultural export promotion programs in Cuba. Although any such future funding likely would be small, this was the first congressional action easing U.S. economic sanctions on Cuba in almost a decade. The human rights situation in Cuba remained a key congressional concern in the 115 th Congress and likely will remain a key concern in the future, although there are diverse views regarding the best approach to influence the Cuban government. ", "Appendix A. Legislative Initiatives in the 115 th Congress", "Enacted Legislation and Approved Resolutions", "P.L. 115-31 ( H.R. 244 ). Consolidated Appropriations Act, 2017. Introduced January 4, 2017, as the Honoring Investments in Recruiting and Employing American Military Veterans Act of 2017; subsequently, the bill became the vehicle for the FY2017 appropriations measure known as the Consolidated Appropriations Act, 2017. House agreed to Senate amendments (309-118) May 3, 2017; Senate agreed to House amendment to Senate amendments (79-18) May 4, 2017. President signed into law May 5, 2017. ", "Division C (Department of Defense), Section 8127, provided that none of the funds made available in the act may be used to carry out the closure or realignment of the U.S. Naval Station, Guantanamo Bay, Cuba. Division J (State Department and Foreign Operations), Section 7007, continued a long-standing provision prohibiting direct funding for the government of Cuba (including direct loans, credits, insurance, and guarantees of the Export-Import Bank). Section 7015(f) continues to require that foreign aid for Cuba not be obligated or expended except as provided through the regular notification procedures of the Committees on Appropriations. The explanatory statement to the measure provided $20 million in democracy assistance for Cuba ($5 million more than requested) and $28.056 million for the Office of Cuba Broadcasting ($1 million more than requested). ", "P.L. 115-91 ( H.R. 2810 ) . National Defense Authorization Act (NDAA) for Fiscal Year 2018. H.R. 2810 introduced June 7, 2017; reported ( H.Rept. 115-200 ) by House Committee on Armed Services July 6, 2017. S. 1519 introduced and reported ( S.Rept. 115-125 ) by the Senate Committee on Armed Services July 10, 2017. House passed H.R. 2810 , amended, July 14, 2017. Senate passed H.R. 2810 , amended, September 18, 2017. ", "Section 1026 of the House-approved version H.R. 2810 would continue a provision in the FY2017 NDAA ( P.L. 114-328 , Section 1035) prohibiting funds made available for the Department of Defense (DOD) for FY2018 from being used to close or abandon the U.S. Naval Station at Guantanamo Bay, Cuba, relinquish control of Guantanamo Bay to Cuba, or implement a material modification to a 1934 treaty between the United States and Cuba that constructively closes the naval station. Section 1034 of the Senate-approved version of H.R. 2810 would have extended the provision regarding the realignment or closure of the U.S. naval station in P.L. 114-328 from FY2017 through FY2021. ", "Conference report ( H.Rept. 115-404 ) filed November 9, 2017. In the conference report, the Senate receded and accepted the House language on the provision regarding the U.S. Naval Station. Section 1036 continues to prohibit funds made available for DOD for FY2018 from being used to close or abandon the U.S. Naval Station at Guantanamo Bay, Cuba, relinquish control of Guantanamo Bay to Cuba, or implement a material modification to a 1934 treaty between the United States and Cuba that constructively closes the naval station. The House agreed (356-70) to the conference report November 14, and the Senate agreed (voice vote) to it on November 16, 2017. Signed into law December 12, 2017.", "P.L. 115-141 ( H.R. 1625 ). Consolidated Appropriations Act, 2018. Originally introduced March 20, 2017, as the Targeted Rewards for the Global Eradication of Human Trafficking Act, in March 2018, the bill became the vehicle for the FY2018 omnibus appropriations measure known as the Consolidated Appropriations Act, 2018. House agreed (256-167) to an amendment to the Senate amendment March 22, 2018; Senate agreed (65-32) to the House amendment to the Senate amendment March 23, 2018. President signed into law March 23, 2018. The measure did not include policy provisions tightening sanctions or limiting funding for a U.S. diplomatic presence that had been included in several FY2018 House appropriations bills (Commerce, H.R. 3267 ; Financial Services, H.R. 3280 ; Homeland Security, H.R. 3355 ; and State Department and Foreign Operations, H.R. 3362 \u2014all of which had been incorporated into House-passed H.R. 3354 ). ", "Division C (Department of Defense), Section 8123, carries over a prior-year provision providing that none of the funds made available by the act may be used to carry out the closure or realignment of the U.S. Naval Station, Guantanamo Bay, Cuba. Division J (Military Construction, Veterans Affairs, and Related Agencies), Section 128, provides that none of the funds made available by the act may be used to carry out the closure or realignment of the U.S. Naval Station, Guantanamo Bay, Cuba. Division K (State, Foreign Operations, and Related Programs), Section 7007, continues a long-standing provision prohibiting direct funding for the government of Cuba, including direct loans, credits, insurance, and guarantees of the Export-Import Bank or its agents. Section 7015(f) continues a long-standing provision prohibiting the obligation or expending of assistance for Cuba except through the regular notification procedures of the Committees on Appropriations. The explanatory statement to H.R. 1625 , Division K, provided $28.936 million for Cuba broadcasting, $5.28 million more than requested. This compared to $28.1 million recommended by the House appropriations bill ( H.R. 3362 , H.Rept. 115-253 ) and not less than $28.6 million recommended by the Senate appropriations bill ( S. 1780 , S.Rept. 115-152 ). The explanatory statement provided $20 million for democracy programs in Cuba, compared to the Administration's zeroing out of the assistance. The House appropriations bill would have provided $30 million in democracy assistance and the Senate bill would have provided $15 million, with not less than $3 million to support free enterprise and private business organizations in Cuba and people-to-people educational and cultural activities. In the explanatory statement, the Secretary of State is directed to engage with foreign governments, such as the government of Cuba, not covered by Section 7067 of the act, \"to resolve cases of fugitives from justice, including persons sought by the United States Department of Justice for such crimes committed in the United States, such as Joanne Chesimard.\"", "P.L. 115-232 ( H.R. 5515 ). John S. McCain National Defense Authorization Act for Fiscal Year 2019. Introduced April 13, 2018. House passed (351-66) May 24, 2018. Senate passed (85-10) June 18, 2018, substituting the language of S. 2987 , the John S. McCain National Defense Authorization Act for Fiscal Year 2019. As approved by the Senate, H.R. 5515 had two Cuba-related provisions: Section 1024 would extend the prohibition on the use of funds in FY2019 to close or relinquish control of the U.S. Naval Station at Guantanamo Bay, Cuba; Section 1027 would require the Defense Intelligence Agency to submit a report to the appropriate congressional committees within 180 days on security cooperation between Russia and Cuba, Nicaragua, and Venezuela. Conference report ( H.Rept. 115-874 ) filed July 25, 2018; House agreed (359-54) to the conference July 26 and Senate agreed (86-10) August 1, 2018. Signed into law August 13, 2018. ", "As signed into law, Section 1032 extends the prohibition on the use of funds in FY2019 to close or relinquish control of the U.S. Naval Station at Guantanamo Bay, Cuba. In the conference report, the conferees expressed concern about Russian military and intelligence activity in the Western Hemisphere, urged the Department of Defense to engage in dialogue and cooperation on security partners and allies in the region, and directed the Director of the Defense Intelligence Agency to submit a report to several key committees on security cooperation between the Russian Federation and Cuba, Nicaragua, and Venezuela.", "P.L. 115-244 ( H.R. 5895 ). Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs Appropriations Act, 2019. Originally introduced as the Energy and Water Appropriations bill on May 21, 2018, the bill subsequently also became the vehicle for the Legislative Branch and Military Construction appropriations bills. House passed (235-179) June 8, 2018. Senate passed (235-179) June 25, 2018. Section 128 (Division C) of the House version and Section 127 (Division C) of the Senate version would continue a provision prohibiting funding to carry out the closure or realignment of the U.S. Naval Station at Guantanamo Bay, Cuba. Conference report, H.Rept. 115-929 , filed September 10, 2018; Senate agreed to the conference report September 12, and House agreed September 13. Signed into law September 21, 2018. In the final acted measure, Section 128 (Division C) would continue the funding prohibition for FY2019 to carry out the closure or realignment of the naval station. (Also see H.R. 5786 and S. 3024 below.)", "P.L. 115-245 ( H.R. 6157 ). Department of Defense and Labor, Health, and Human Services, and Education Appropriations Act, 2019, and Continuing Appropriations Act, 2019. H.R. 6157 introduced and reported by House Committee on Appropriations ( H.Rept. 115-769 ) June 20, 2018, as the Department of Defense Appropriations Act, 2019. House passed (359-49) June 28, 2018. S. 3159 introduced and reported ( S.Rept. 115-290 ) by the Senate Appropriations Committee June 28, 2018. Senate passed (85-7) H.R. 6157 on August 23, 2018, substituting the language of S. 3159 (defense) and S. 3158 , covering the Departments of Labor, Health and Human Services, and Education. Both the House and Senate versions of H.R. 6157 (Section 8115 in the House version and Section 8109 in the Senate version) had a provision to continue a prohibition against FY2019 funds being used to carry out the closure or realignment of the U.S. Naval Station, Guant\u00e1namo Bay, Cuba. Conference report, H.Rept. 115-952 , filed September 13, 2018; Senate agreed to the conference September 18, and House agreed on September 26. Signed into law September 28, 2018. In the final enacted measure, Section 8125 of Division A continues the prohibition against FY2019 funds from being used to carry out the closure or realignment of the naval station. ", "P.L. 115-254 ( H.R. 302 ). FAA Reauthorization Act of 2018. Originally introduced as the Sports Medicine Licensure Clarity Act of 2017 in January 2017, the bill became the legislative vehicle for the FAA Reauthorization Act of 2018 in September 2018. As signed into law October 5, 2018, the measure includes a provision in section 1957 requiring the Administrator of the Transportation Security Administration (1) to direct all public charters to provide updated flight data to more reliably track the public charter operations of air carriers between the United States and Cuba and (2) to develop and implement a mechanism that corroborates and validates flight schedule data to more reliably track the public charter operations of air carries between the United States and Cuba. The provision also requires the TSA Administrator to provide to Congress a confidential briefing on certain aspects of security measure at airports in Cuba that have air service to the United States. ", "P.L. 115-334 ( H.R. 2 ) . 2018 Farm bill, Agriculture Improvement Act of 2018. H.R. 2 introduced May 3, 2018. S. 3042 introduced June 11, 2018; reported by Senate Committee on Agriculture, Nutrition, and Forestry June 18, 2018. House passed H.R. 2 (213-211) June 21, 2018. Senate passed (86-11) June 28, 2018, substituting the language of S. 3042 , as amended. As approved by the Senate, H.R. 2 had a provision, as amended by S.Amdt. 3364 (Rubio), that would permit funding for certain U.S. export promotion programs (Market Access Program and Foreign Market Development Cooperation Program) for U.S. agricultural products in Cuba, with the caveat that funds could not be used in contravention with directives under the National Security Presidential Memorandum issued by President Trump in June 2017 that prohibits transactions with entities owned, controlled, or operated by or on behalf of military, intelligence, or security services of Cuba. The conference report ( H.Rept. 115-1072 ) to the bill, filed December 10, 2018, retained the Senate provision on Cuba and appears in Title III, Subtitle B, Section 3201(a) of the bill. Senate agreed (87-13) to the conference report December 11, 2018, and the House agreed (369-47) December 12. Signed into law December 20, 2018.", "S.Res. 224 ( Durbin). The resolution recognizes the sixth anniversary of the death of Oswaldo Pay\u00e1 Sardi\u00f1as (July 2012) and commemorates his legacy and commitment to democratic values and principles. The resolution also calls on the Cuban government to allow an impartial, third-party investigation into the circumstances of Pay\u00e1's death and to cease violating human rights, begin providing democratic freedoms to Cuban citizens, and provide amnesty for political prisoners. It urges the Inter-American Commission on Human Rights to continue reporting on human rights issues in Cuba and to request a visit to Cuba in order to investigate the circumstances surrounding the death of Oswaldo Pay\u00e1. It also urges the United States to continue to support policies and programs that promote respect for human rights and democratic principles in Cuba in a manner consistent with the aspirations of the Cuban people. Introduced July 19, 2017; reported by the Senate Foreign Relations Committee, amended, March 21, 2018. Senate agreed to the resolution by Unanimous Consent on April 11, 2018. ", "Additional Legislative Initiatives", "H.Res. 664 (King)/ S.Res. 391 (Menendez). Similar resolutions would have called for the immediate extradition or rendering to the United States of convicted felons William Morales, Joanne Chesimard, and all other fugitives from justices who are receiving safe harbor in Cuba to escape prosecution or confinement for criminal offenses committed in the United States. H.Res. 664 introduced December 13, 2017; referred to the House Committee on Foreign Affairs. S.Res. 391 introduced February 5, 2018; referred to the Senate Committee on Foreign Relations.", "H.R. 351 (Sanford). Freedom to Travel Act of 2017. The bill would have prohibited the President from prohibiting or regulating travel to or from Cuba by U.S. citizens or legal residents. Introduced January 6, 2017; referred to House Committee on Foreign Affairs. ", "H.R. 442 (Emmer)/ S. 472 (Moran). Cuba Trade Act of 2017. Among its provisions, the initiative would have repealed or amended many provisions of law restricting trade and other relations with Cuba, including in the Cuban Democracy Act of 1992 (CDA; P.L. 102-484 , Title XVII), the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 ( P.L. 104-114 ), and the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA; P.L. 106-387 , Title IX). It would have repealed restrictions on private financing for Cuba but would have continued to prohibit U.S. government foreign assistance or financial assistance, loans, loan guarantees, extension of credit, or other financing for export to Cuba, albeit with presidential waiver authority for national security or humanitarian reasons. The federal government would have been prohibited from expending any funds to promote trade with or develop markets in Cuba, although certain federal commodity promotion programs would be allowed. H.R. 442 introduced January 11, 2017; referred to House Committee on Foreign Affairs and in addition to the Committees on Ways and Means, Financial Services, and Agriculture. S. 472 introduced February 28, 2017; referred to the Senate Committee on Banking, Housing, and Urban Affairs. ", "H.R. 498 (Cramer). Cuba Digital and Telecommunications Advancement Act of 2017, or the Cuba DATA Act. Among its provisions, the bill would have authorized the exportation of consumer communications devices to Cuba and the provision of telecommunications services to Cuba and would have repealed certain provisions of the CDA and the LIBERTAD Act. Introduced January 12, 2017; referred to the House Committee on Foreign Affairs and in addition to the Committee on Energy and Commerce. ", "H.R. 525 (Crawford). Cuba Agricultural Exports Act. The bill would have amended TSRA to permit U.S. government assistance for agricultural exports under TSRA, but not if the recipient would be an entity controlled by the Cuban government. The bill also would have authorized both the private financing of sales of agricultural commodities and investment for the development of an agricultural business in Cuba as long as the business was not controlled by the Cuban government or did not traffic in property of U.S. nationals confiscated by the Cuban government. Introduced January 13, 2017; referred to the House Committee on Foreign Affairs and in addition to the Committees on Financial Services and Agriculture. ", "H.R. 572 (Serrano). Promoting American Agricultural and Medical Exports to Cuba Act of 2017. Among its provisions, the bill would have permanently redefined the term payment of cash in advance to mean that payment is received before the transfer of title and release and control of the commodity to the purchaser; authorized direct transfers between Cuban and U.S. financial institutions for products exported under the terms of TSRA; established an export promotion program for U.S. agricultural exports to Cuba; permitted nonimmigrant visas for Cuban nationals for activities related to purchasing U.S. agricultural goods; repealed a trademark sanction related to Cuba in a FY1999 omnibus appropriations measure (\u00a7211 of Division A, Title II, P.L. 105-277 ); prohibited restrictions on travel to Cuba; repealed the on-site verification requirement for medical exports to Cuba under the CDA; and established an agricultural export promotion trust fund. Introduced January 13, 2017; referred to House Committee on Foreign Affairs and in addition to the Committees on Ways and Means, Judiciary, Agriculture, and Financial Services. ", "H.R. 573 (Serrano). Baseball Diplomacy Act. The bill would have waived certain prohibitions with respect to nationals of Cuba coming to the United States to play organized professional baseball. Introduced January 13, 2017; referred to the House Committee on Foreign Affairs and in addition to the Committee on the Judiciary. ", "H.R. 574 (Serrano). Cuba Reconciliation Act. Among its provisions, the bill would have lifted the trade embargo on Cuba by removing provisions of law restricting trade and other relations with Cuba; authorized common carriers to install and repair telecommunications equipment and facilities in Cuba and otherwise provide telecommunications services between the United States and Cuba; and prohibited restrictions on travel to and from Cuba. Introduced January 13, 2017; referred to the House Committee on Foreign Affairs and in addition to the Committees on Ways and Means, Energy and Commerce, Financial Services, Judiciary, Oversight and Government Reform, and Agriculture. ", "H.R. 1301 (Frelinghuysen). Department of Defense Appropriations Act, 2017. Introduced March 2, 2017; referred to the House Committee on Appropriations and in addition to the Committee on the Budget. House passed (371-48) March 8, 2017. As passed, Section 8127 provides that no funds in the act may be used to carry out the closure or realignment of the U.S. Naval Station at Guantanamo Bay, Cuba. (For further action, see P.L. 115-31 above.)", "H.R. 1744 (Smith, New Jersey) . Walter Patterson and Werner Foerster Justice and Extradition Act. The bill would have called for a report on fugitives from U.S. justice in Cuba, U.S. efforts to secure the return of such fugitives, and other information on those cases. Introduced March 27, 2017; referred to Committee on Foreign Affairs. ", "H.R. 2966 (Rush). United States-Cuba Normalization Act of 2017. The bill would have removed provisions of law restricting trade and other relations with Cuba; authorized common carriers to install and repair telecommunications equipment and facilities in Cuba, and otherwise provide telecommunications services between the United States and Cuba; prohibited restrictions on travel to and from Cuba and on transactions incident to such travel; called on the President to continue discussions with Cuba for the purpose of settling claims of U.S. nationals for the taking of property by the Cuban government and securing the protection of internationally recognized human rights; extended nondiscriminatory trade treatment to the products of Cuba; and prohibited limits on remittances to Cuba. Introduced June 20, 2017; referred to House Committee on Foreign Affairs, and in addition to the Committees on Ways and Means, Energy and Commerce, the Judiciary, Agriculture, and Financial Services. ", "H.R. 2998 (Dent) / S. 1557 (Moran) . Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2018. H.R. 2998 introduced and reported ( H.Rept. 115-188 ) by the House Appropriations Committee on Appropriations June 22, 2017. S. 1557 introduced and reported ( S.Rept. 115-130 ) by the Senate Committee on Appropriations July 13, 2017. Section 128 of the House bill and Section 127 of the Senate bill would provide that none of the funds made available by this act may be used to carry out the closure or realignment or the U.S. Naval Station at Guantanamo Bay, Cuba. The provision would extend the current similar provision for FY2017 set forth in P.L. 115-31 (Division C, Section 8127). As stated in the House and Senate committee reports to the respective bills, \"the provision is intended to prevent the closure or realignment of the installation out of the possession of the United States, and maintain the Naval Station's longstanding regional security and migrant operations missions.\" The bill became a part of a \"minibus\" appropriations package, H.R. 3219 , approved by the House in July 2017, and a full-year FY2018 omnibus appropriations bill, H.R. 3354 , approved by the House in September 2017. For final action on FY2018 appropriations, see P.L. 115-141 above.", "H.R. 3180 (Nunes). Intelligence Authorization Act for Fiscal Year 2018. Introduced July 11, 2017, and reported by the House Committee on Intelligence July 24, 2017 ( H.Rept. 115-251 ). House passed (380-35) July 28, 2017. As approved, Section 609 would have expressed the sense of Congress that, pursuant to the statutory requirement for the intelligence community (IC) to keep the congressional intelligence committees \"fully and currently informed,\" about all \"intelligence activities\" of the United States, IC agencies must submit prompt written notification after becoming aware that an individual in the executive branch has disclosed certain classified information outside established intelligence channels to adversary foreign governments, which are defined in the provision as the governments of North Korea, Iran, China, Russia, and Cuba. The Senate companion bill, S. 1761 (Burr), did not include a similar provision. For additional action, see H.R. 6237 below. ", "H.R. 3219 (Granger). Defense, Military Construction, Veterans Affairs, Legislative Branch, and Energy and Water Development National Security Appropriations Act, 2018, or the Make America Secure Appropriations Act, 2018. Introduced and reported ( H.Rept. 115-219 ) July 13, 2017, by the House Committee on Appropriations as the Department of Defense Appropriations Act, 2018, the bill subsequently became the vehicle for four other appropriations measures. House approved (235-192) July 27, 2017. As approved, Section 8116 of Division A (Defense appropriations) would provide that no funds made available by the act could be used to carry out the closure or realignment of the U.S. Naval Station at Guantanamo Bay, Cuba. The provision would extend the current similar provision for FY2017 set forth in P.L. 115-31 (Division C, Section 8127). Section 128 of Division C (Military Construction appropriations) also would provide that none of the funds made available by the act may be used to carry out the closure or realignment or the U.S. Naval Station at Guantanamo Bay, Cuba. Also see H.R. 3354 below, and for final action on FY2018 appropriations, see P.L. 115-141 above.", "H.R. 3267 (Culberson). Commerce, Justice, Science, and Related Agencies Appropriations, 2018. Introduced and reported ( H.Rept. 115-231 ) July 17, 2017, by the House Committee on Appropriations. Section 536 would have prohibited funds in the act from being used to approve the registration, renewal, or maintenance of the registration of a mark, trade name, or commercial name that was confiscated in Cuba unless the original owner has expressly consented. In the report to the bill, the minority expressed the view that the provision was an inappropriate rider that did not belong in the bill, which would place restrictions on the U.S. Patent and Trademark Office (USPTO's) ability to issue trademarks to Cuban nationals, even in cases in which a specific license has been issued by the Department of the Treasury's Office of Foreign Assets Control. The minority stated that the provision would meddle in foreign policy, harm diplomatic efforts with Cuba, and create a significant burden, and set an impossible standard for the USPTO. The Senate companion bill, S. 1662 , did not have a comparable provision. Also see H.R. 3354 below, and for final action on FY2018 appropriations, see P.L. 115-141 above.", "H.R. 3280 (Graves). Financial Services and General Government Appropriations Act, 2018. Introduced and reported ( H.Rept. 115-234 ) July 18, 2017, by the House Committee on Appropriations. Section 130 would have provided that no funds made available by the act could be used to approve, license, facilitate, authorize, or otherwise allow the use, purchase, trafficking, or import of property confiscated by the Cuban government. Section 131 would have provided that no funds made available by the act could be used to authorize a general license or approve a specific license with respect to a mark, trade name, or commercial name that is substantially similar to one that was used in connection with a business or assets that were confiscated by the Cuban government unless the original owner expressly consented. Also see H.R. 3354 below, and for final action on FY2018 appropriations, see P.L. 115-141 above.", "H.R. 3328 ( Katko ) / S. 2023 (Rubio) . Cuban Airport Security Act of 2017. Identical bills would have required, among other provisions, a briefing for the House Committee on Homeland Security, Senate Committee on Commerce, Science, and Transportation, and the Comptroller General of the United States regarding certain security measures and equipment at each of Cuba's 10 international airports. The bill also would have prohibited a U.S. air carrier from employing a Cuban national in Cuba (pursuant to 31 CFR 515.573) unless the air carrier has publicly disclosed the full text of the formal agreement between the air carrier and the Empresa Cubana de Aeropuertos y Servicios Aeronauticos or any other entity associated with the Cuban government. The bill would also, to the extent practicable, have prohibited U.S. air carriers from hiring Cuban nationals if they had been recruited, hired, or trained by entities that are owned, operated, or controlled in whole or in part by Cuba's Council of State, Council of Ministers, Communist Party, Ministry of the Revolutionary Armed Forces, Ministry of Foreign Affairs, or Ministry of the Interior. H.R. 3328 introduced July 20, 2017; reported by the Committee on Homeland Security ( H.Rept. 115-308 ) and discharged by Committees on Foreign Affairs and Transportation September 13, 2017. House passed (voice vote) October 23, 2017. S. 2023 introduced October 26, 2017; referred to the Committee on Commerce, Science, and Transportation. Also see action above on P.L. 115-254 , FAA Reauthorization Act of 2018.", "H.R. 3354 ( Calvert ). Make America Sure and Prosperous Appropriations Act, 2018. Introduced as the Department of the Interior, Environment, and Related Agencies Appropriation Act on July 21, 2017, the bill subsequently became the vehicle for the FY2018 omnibus appropriations measure covering 12 FY2018 appropriations bills. House passed (211-198) September 14, 2017. As approved by the House, the measure had numerous provisions on Cuba that were included in individual House Appropriations Committee-reported appropriations bills. For final action on FY2018 appropriations, see P.L. 115-141 above.", "Division C (Commerce, Justice, Science). Section 536 would have prohibited funds in the act from being used to approve the registration, renewal, or maintenance of the registration of a mark, trade name, or commercial name that was confiscated in Cuba unless the original owner had expressly consented. (See H.R. 3267 above.) Division D (Financial Services and General Government). Section 130 would have provided that no funds made available by the act could be used to approve, license, facilitate, authorize, or otherwise allow the use, purchase, trafficking, or import of property confiscated by the Cuban government. Section 131 would have provided that no funds made available by the act could be used to authorize a general license or approve a specific license with respect to a mark, trade name, or commercial name that is substantially similar to one that was used in connection with a business or assets that were confiscated by the Cuban government unless the original owner expressly consented. (See H.R. 3280 above.) Division E (Homeland Security). Section 208 would have prohibited funds from being used to approve, license, facilitate, authorize, or allow the trafficking or import of property confiscated by the Cuban government. (See H.R. 3355 below.) Division G (State Department and Foreign Operations). Section 7007 would have continued to prohibit direct funding for the government of Cuba. Section 7015(f) would have continued to require notification to the Committees on Appropriations for funds for assistance to Cuba. Section 7045(c)(1) would have prohibited funding in the act and prior appropriation measures for the establishment or operation of a U.S. diplomatic presence in Cuba beyond that which was in existence prior to December 17, 2014. Section 7045(c)(2) would have provided $30 million in Economic Support Fund assistance to promote democracy and strengthen civil society but would have prohibited the obligation of funds for business promotion, economic reform, entrepreneurship, or any other assistance that was not democracy-building as expressly authorized in the LIBERTAD Act of 1996 and the CDA of 1992. (See H.R. 3362 below.) Division I (Defense). Section 8116 would have continued to provide that no funds made available by the act could be used to carry out the closure or realignment of the U.S. Naval Station at Guantanamo Bay, Cuba. (See H.R. 3219 above.) Division K (Military Construction). Section 128 would have continued to provide that none of the funds made available by this act could be used to carry out the closure or realignment or the U.S. Naval Station at Guantanamo Bay, Cuba. (See H.R. 2998 and H.R. 3219 above.)", "H.R. 3355 (Carter). Department of Homeland Security Appropriations, 2018. Introduced and reported ( H.Rept. 115-239 ) July 21, 2017, by the House Committee on Appropriations. Section 208 would have prohibited funds from being used to approve, license, facilitate, authorize, or allow the trafficking or import of property confiscated by the Cuban government. Also see H.R. 3354 above, and for final action on FY2018 appropriations see P.L. 115-141 above.", "H.R. 3362 (Rogers) / S. 1780 ( Graham) . Department of State, Foreign Operations, and Related Programs Appropriations, 2018. H.R. 3362 introduced and reported ( H.Rept. 115-253 ) by the House Committee on Appropriations on July 24, 2017. S. 1780 introduced and reported ( S.Rept. 115-152 ) by the Senate Appropriations Committee September 7, 2017. Also see H.R. 3354 above, and for final action on FY2018 appropriations, see P.L. 115-141 above. ", "Both bills would continue two long-standing provisions: Section 7007 would prohibit direct funding for the government of Cuba, and Section 7015(f) would require notification to the Committees on Appropriations for funds for assistance to Cuba. Section 7045(c)(1) of the House bill would have prohibited funding in the act and prior appropriation measures for the establishment or operation of a U.S. diplomatic presence in Cuba beyond that which was in existence prior to December 17, 2014, including the hiring of additional staff, unless such staff were necessary for protecting the health, safety, or security of diplomatic personnel or facilities in Cuba; the prohibition would not have applied to support for democracy-building efforts for Cuba or if the President determined that Cuba had met the requirements and factors specified in Section 205 of the LIBERTAD Act of 1996 for determining when a transition government is in power in Cuba. Section 7045(c)(2) of the House bill would have provided $30 million in Economic Support Funds (ESF) assistance to promote democracy and strengthen civil society but would have prohibited the obligation of funds for business promotion, economic reform, entrepreneurship, or any other assistance that is not democracy-building as expressly authorized in the LIBERTAD Act of 1996 and the CDA of 1992. In the Senate bill, Section 7045(c) would have provided $15 million in ESF for democracy programs in Cuba; of this, the provision would have provided that not less than $3 million be made available to USAID to support free enterprise and private business organizations in Cuba and people-to-people educational and cultural activities. The report to the House bill would have provided not less than $28.056 million for the Office of Cuba Broadcasting, whereas the report to the Senate bill would have provided $28.569 million.", "H.R. 4583 (Wilson , Joe ). Ensuring Diplomats' Safety Act. The bill would have suspended all U.S. diplomatic presence in Cuba until the conclusion of any U.S. law enforcement investigation relating to \"the attacks on 17 United States diplomats.\" Introduced December 7, 2017; referred to the House Committee on Foreign Affairs.", "H.R. 5786 (Dent ) / S. 3024 (Boozman). Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2019. H.R. 5786 introduced and reported ( H.Rept. 115-673 ) by the House Committee on Appropriations May 11, 2018. S. 3024 introduced and reported ( H.Rept. 115-269 ) by the Senate Appropriations Committee June 7, 2018. Section 128 of the House bill and Section 127 of the Senate bill would continue a provision prohibiting funding to carry out the closure or realignment of the U.S. Naval Station at Guantanamo Bay, Cuba. (For further action, see P.L. 115-244 above)", "H.R. 5952 (Culberson). Commerce, Justice, Science, and Related Agencies Appropriations, 2019. Introduced and reported ( H.Rept. 115-704 ) by the House Appropriations Committee May 24, 2018). Section 535 would have prohibited funds in the act from being used to approve the registration, renewal, or maintenance of the registration of a mark, trade name, or commercial name that was confiscated in Cuba unless the original owner had expressly consented. In the report to the bill, the minority expressed the view that the provision was an inappropriate rider that did not belong in the bill, which would place restrictions on the U.S. Patent and Trademark Office (USPTO's) ability to issue trademarks to Cuban nationals, even in cases in which a specific license has been issued by the Department of the Treasury's Office of Foreign Assets Control. The minority stated that the provision would meddle in foreign policy, harm diplomatic efforts with Cuba, and create a significant burden, and set an impossible standard for the USPTO. The Senate companion bill, S. 3072 , did not have a comparable provision. ", "H.R. 6147 (Calvert). Interior, Environment, and Financial Services and General Government Appropriations, 2019. Originally introduced as the FY2019 Department of the Interior, Environment, and Related Agencies appropriations bill, the measure also became the House vehicle for Financial Services and General Government appropriations and incorporated the House version of H.R. 6258 as Division B; House passed (217-199) July 19, 2018. As approved by the House: Section 128 would have provided that no funds made available by the act could be used to approve, license, facilitate, authorize, or otherwise allow the use, purchase, trafficking, or import of property confiscated by the Cuban government; Section 129 would have provided that no funds made available by the act could be used to authorize a general license or approve a specific license with respect to a mark, trade name, or commercial name that is substantially similar to one that was used in connection with a business or assets that were confiscated by the Cuban government unless the original owner expressly consented. The Senate version of the bill, approved (92-6) August 1, 2018, also became the vehicle for Financial Services and General Government, Agriculture, and Transportation, Housing and Urban Development appropriations; it did not include the two Cuba-related provisions in the House version. Also see H.R. 6258 below. ", "H.R. 6237 (Nunes). Matthew Young Pollard Intelligence Authorization for Fiscal Years 2018 and 2019. Introduced June 27, 2018; reported ( H.Rept. 115-805 ) by the House Committee on Intelligence July 3, 2018. House passed (363-54) July 12, 2018. As approved, the bill included a provision that would have expressed the sense of Congress that, pursuant to the statutory requirement for the intelligence community (IC) to keep the congressional intelligence committees \"fully and currently informed,\" about all \"intelligence activities\" of the United States, IC agencies must submit prompt written notification after becoming aware that an individual in the executive branch has disclosed certain classified information outside established intelligence channels to adversary foreign governments, which were defined in the provision as the governments of North Korea, Iran, China, Russia, and Cuba. The Senate companion bill, S. 3153 (Burr), did not include a similar provision.", "H.R. 6258 (Graves) . Financial Services and General Government Appropriations Act, 2019. Introduced and reported ( H.Rept. 115-792 ) by the House Committee on Appropriations June 28, 2018. Section 128 would have provided that no funds made available by the act could be used to approve, license, facilitate, authorize, or otherwise allow the use, purchase, trafficking, or import of property confiscated by the Cuban government. Section 129 would have provided that no funds made available by the act could be used to authorize a general license or approve a specific license with respect to a mark, trade name, or commercial name that was substantially similar to one that was used in connection with a business or assets that were confiscated by the Cuban government unless the original owner expressly consented. The Senate companion bill, S. 3107 , did not have similar provisions. Also see H.R. 6147 for additional legislative action.", "H.R. 6385 (Rogers) / S. 3108 (Graham) . Department of State, Foreign Operations, and Related Programs Appropriations, 2019. House Appropriations Committee introduced and reported H.R. 6385 ( H.Rept. 115-829 ) on July 16, 2018. Senate Appropriations Committee introduced and reported S. 3108 ( S.Rept. 115-282 ) June 21, 2018. Both bills would continue long-standing provisions prohibiting direct funding for the government of Cuba and prohibiting the obligation or expending of assistance for Cuba except through the regular notification procedures of the Committees on Appropriations. The House bill would have provided $30 million to promote democracy and strengthen civil society in Cuba, with, according to the report to the bill ( H.Rept. 115-829 ), not less than $8 million for the National Endowment for Democracy; the report would have prohibited the obligation of funds for business promotion, economic reform, entrepreneurship, or any other assistance that is not democracy-building and stipulate that grants exceeding $1 million or to be implemented over a period of 12 months would be awarded only to organizations with experience promoting democracy inside Cuba. In the Senate bill, Section 7045(c) would have provided $15 million for democracy programs in Cuba. With regard to Cuba broadcasting, the House report would have provided $29.1 million and the Senate report ( S.Rept. 115-282 ) would have provided $29.2 million. The report to the Senate bill would also have called for a State Department Cuba report on Internet access, the use of cell phones to access data, the impact of access to telecommunications technology on increased political and economic opportunities, and the impact of telecommunications development on human rights. ", "S.Res. 511 (Rubio)/ H.Res. 916 (Diaz-Balart). Similar but not identical resolutions would have honored Las Damas de Blanco as the recipient of the 2018 Milton Friedman Prize for Advancing Liberty. S.Res. 511 introduced May 16, 2018; referred to the Committee on Foreign Relations. H.Res. 916 introduced May 25, 2018; referred to the Committee on Foreign Affairs. ", "S. 259 (Nelson)/ H.R. 1450 (Issa). No Stolen Trademarks Honored in America Act. The initiative would have modified a 1998 prohibition (\u00a7211 of Division A, Tile II, P.L. 105-277 ) on recognition by U.S. courts of certain rights to certain marks, trade names, or commercial names. The bill would have applied a fix so that the sanction would apply to all nationals and would bring the sanction into compliance with a 2002 World Trade Organization dispute settlement ruling. S. 259 introduced February 1, 2017; referred to the Senate Committee on the Judiciary. H.R. 1450 introduced March 9, 2017; referred to House Committee on the Judiciary. ", "S. 275 (Heitkamp). Agricultural Export Expansion Act of 2017. The bill would have amended TSRA to allow private financing by U.S. persons of sales of agricultural commodities to Cuba. Introduced February 2, 2017; referred to Senate Committee on Banking, Housing, and Urban Affairs. ", "S. 539 (Cruz). The bill would have designated the area between the intersections of 16 th Street, Northwest and Fuller Street, Northwest, and 16 th Street, Northwest, and Euclid Street, Northwest, in Washington, DC, as \"Oswaldo Paya Way.\" Introduced March 7, 2017; referred to the Committee on Homeland Security and Governmental Affairs. ", "S. 1286 (Klobuchar). Freedom to Export to Cuba Act of 2017. The bill would have repealed or amended many provisions of law restricting trade and other relations with Cuba, including certain restrictions in the CDA, the LIBERTAD Act, and TSRA. Introduced May 25, 2016; referred to the Senate Committee on Banking, Housing, and Urban Affairs.", "S. 1287 (Flake). Freedom for Americans to Travel Act of 2017. The bill would have prohibited the President from regulating travel to or from Cuba by U.S. citizens or legal residents, or any of the transactions incident to such travel, including banking transactions. It would have provided for the President to regulate such travel or restrictions on a case-by-case basis if the President determined that such restriction was necessary to protect the national security of the United States or was necessary to protect the health or safety of U.S. citizens or legal residents resulting from traveling to or from Cuba; to implement such a restriction, the President would have been required to submit a written justification not later than seven days to several congressional committees. Introduced May 25, 2017; referred to the Committee on Foreign Relations. ", "S. 1655 (Collins). Transportation, Housing, and Urban Development, and Related Agencies Appropriations Act, 2018. Introduced and reported ( S.Rept. 115-138 ) July 27, 2017. Section 119E would have allowed foreign air carriers traveling to or from Cuba to make transit stops in the United States for refueling and other technical services. ", "S. 1699 (Wyden). United States-Cuba Trade Act of 2017. The bill, among its provisions, would have repealed or amended provisions of law restricting trade and other relations with Cuba; authorized common carriers to install, maintain, and repair telecommunications equipment and facilities in Cuba and provided telecommunications services between the United States and Cuba; prohibited restrictions on travel to Cuba; called for the President to take all necessary steps to advance negotiations with the Cuban government for settling property claims of U.S. nationals and for securing the protection of internationally recognized human rights; extended nondiscriminatory trade treatment to Cuba; prohibited restrictions on remittances to Cuba; and required a presidential report to Congress prior to the denial of foreign tax credit with respect to certain foreign countries. Introduced August 1, 2017; referred to the Senate Committee on Finance. ", "S. 3654 (Menendez). U.S. Agency for Global Media Reform Act. Introduced November 15, 2018 and referred to the Senate Committee on Foreign Relations; reported by Senator Corker November 28, 2018, with an amendment in the nature of a substitute and without written report. As reported, Section 8(b), included a requirement for a briefing or report from the CEO of the United States Agency for Global Media on any employee of the agency or an agency grantee network who has been suspended or placed on administrative leave without a formal disciplinary determination for writing or approving content in programming inconsistent with the agency's mission to \"inform, engage, and connect people around the world in support of freedom and democracy.\" The briefing or report would have been required to include information on the employment status of the suspended employee and the \"reasons for the Agency's failure to made a formal disciplinary determination.\" The provision originated from an amendment offered by Senator Flake, adopted by Unanimous Consent, during Senate Foreign Relation Committee consideration of the bill on November 28, 2018. ", "Appendix B. Links to U.S. Government Reports", "U.S. Relations with Cuba, Fact Sheet , Department of State", "Date: November 8, 2017 Full Text: https://www.state.gov/r/pa/ei/bgn/2886.htm", "Congressional Budget Justificati on for Foreign Operations FY2019 , Appendix 2 , pp. 474-475, Department of State", "Date: March 14, 2018 Full Text: https://www.state.gov/documents/organization/279517.pdf", "Country Report s on Human Rights Practices for 2017 , Cuba , Department of State", "Date: April 20, 2018 Full Text: https://www.state.gov/documents/organization/277567.pdf", "Cuba web page, Department of State", "Link: https://www.state.gov/p/wha/ci/cu/index.htm", "Cuba web page, Department of Commerce, Bureau of Industry and Security", "Link: https://www.bis.doc.gov/index.php/policy-guidance/country-guidance/sanctioned-destinations/cuba", "Cuba web page, Department of Agriculture, Foreign Agricultural Service", "Link: https://www.fas.usda.gov/regions/cuba ", "Cuba Sanctions web page, Department of the Treasury, Office of Foreign Assets Control", "Link: https://www.treasury.gov/resource-center/sanctions/Programs/Pages/cuba.aspx", "International R eligious Freedom Report for 2017 , Cuba , Department of State", "Date: May 29, 2018 Full Text: https://www.state.gov/documents/organization/281308.pdf", "International Narcotics Control Strategy Report 2018 , Volume I, Drug and Chemical Control, p. 146, Department of State", "Date: March 2018 Link: http://www.state.gov/documents/organization/278759.pdf", "International Narcotics Control Strategy Report 2018, Volume II , Money Laundering, pp. 85-87, Department of State", "Date: March 2018 Link: http://www.state.gov/documents/organization/278760.pdf", "Overview of Cuban Imports of Goods and Services and Effects of U.S. Restrictions , U.S. International Trade Commission, Publication 4597", "Date: March 2016 Link: https://www.usitc.gov/sites/default/files/publications/332/pub4597_0.pdf", "Trafficking in Persons Report 2018 , Cuba, Department of State", "Date: June 2018", "Link: https://www.state.gov/j/tip/rls/tiprpt/countries/2018/282640.htm"], "subsections": []}]}}
{"id": "RL33313", "title": "Congressional Membership and Appointment Authority to Advisory Commissions, Boards, and Groups", "released_date": "2019-05-08T00:00:00", "summary": ["Over the past several decades, Congress, by statute, has established a wide array of commissions, boards, and advisory bodies to provide it with assistance in meeting various legislative, investigative, and administrative responsibilities. Some of these entities are temporary and created to serve specific functions, such as studying a discrete policy area or performing one-time tasks. Others are permanent, serving an ongoing purpose, such as overseeing an institution or performing a regular administrative function.", "The majority of these congressional bodies provide that Members of Congress, particularly the leadership, be intimately involved in the appointment process, either through direct service on a commission, or by appointing or recommending candidates for membership.", "The choice of a particular mechanism for membership appointment may have implications for the ability of these entities to fulfill their congressional mandates. Examination of the statutory language creating these bodies reveals several common approaches to membership selection. Each alternative schema has its advantages.", "For example, a commission or board composed entirely of Members permits a high degree of congressional control over the entity's operations. Bodies composed mainly of qualified private citizens or executive branch appointees may provide a broader expertise than Member-only bodies. Assemblages of mixed membership provide some of the advantages of both Member and citizen-only appointment schemes.", "This report contains a compilation of existing commissions and boards that demonstrates the range of alternative membership-appointment structures. It includes any statutorily created advisory entity (e.g., boards, advisory panels, task forces) whose membership scheme mandates the participation of Members of Congress either as potential members or as participants in the process of appointing the membership. For each entity, information on the purpose, duration, appointment structure, and term of appointment is provided. Finally, information on the involvement of Members of Congress in the appointment process is presented in a series of tables."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Congress has created a wide array of advisory bodies, separate from each chamber's committees and officers, in order to better exercise its legislative, oversight, and investigative mandates, and to attend to both temporary and ongoing administrative tasks and responsibilities. During the past two decades, Congress has established or renewed the existence of hundreds of statutory entities to study, advise on, coordinate, or monitor matters of particular interest to Congress. These entities vary in several dimensions, including their official designation, purpose, lifespan, membership, and mechanism by which members are appointed.", "Many of these bodies are expressly identified as commissions, but others are designated as boards, advisory committees, or other terms. In this report, they are referred to generically as \"congressional advisory bodies.\" These groups are sometimes created to address a single purpose\u2014to study a discrete policy issue or to attend to one-time or recurring administrative functions. Often, they have a well-defined mandate, which typically includes the submission of a final report to Congress with detailed findings and recommendations. Although some have a specific lifespan, others have been created to provide ongoing support and advice (e.g., the boards of visitors for the U.S. military service academies, or the Commission to Recommend Individuals to the President for Appointment to the Office of Architect of the Capitol).", "The statutory provisions creating a substantial proportion of congressional advisory bodies provide for a membership that, either entirely or in part, (1) includes, (2) is chosen by, or (3) is recommended by Members of Congress. This report addresses only those statutory groups whose membership involves congressional participation in one or more of these forms. It provides selected background information on these groups and specific information relating to the role of Members of Congress in the appointment process.", "This report is intended to inform Members of Congress of their specific appointment responsibilities and to make them aware of their opportunities to serve as members of congressional advisory bodies. Additionally, observations regarding the rationale and effects for the many variations in the appointment schemes for existing bodies are intended to provide some alternatives to legislators to facilitate the drafting of membership language in potential future statutes."], "subsections": []}, {"section_title": "Scope", "paragraphs": ["Following an examination of the appointment schemes to various congressional advisory bodies, this compilation attempts to identify all congressional advisory bodies currently in existence on which Members of Congress serve directly, or for which they make appointments or recommend potential members to another appointing authority (e.g., the President). It includes any statutorily created advisory entity (e.g., boards, advisory panels, task forces) whose membership scheme mandates the participation of Members of Congress, either as potential members or as participants in the process of appointing the membership. Entities created by Congress that have neither congressional membership nor congressional involvement in the appointment process have been omitted. Boards and commissions for which the Senate has \"advise and consent\" authority are also omitted, unless Members of Congress otherwise participate in the appointment process.", "Also excluded are ad-hoc commissions and advisory groups empaneled by individual congressional committees under their general authority to procure the \"temporary services\" of consultants to \"make studies and advise the committee with respect to any matter within its jurisdiction,\" pursuant to 2 U.S.C. \u00a772a or under chamber rules or resolutions. The membership of these entities, such as the Advisory Commission to Study the Consumer Price Index, might be selected by the chairman and ranking minority member of the committee concerned, and these bodies are generally empaneled for short durations. This report also does not include caucuses, observer groups, or working groups created by means other than statute.", "Tracking the provisions of law that create congressional advisory bodies is an inherently inexact exercise. Although many such bodies are created in easily identifiable freestanding statutes, others are contained within the statutory language of lengthy omnibus legislation. It is also sometimes difficult to determine when such bodies have ceased to operate, as termination dates are not always included in the organic statute, or may be tied to ambiguous conditions."], "subsections": []}, {"section_title": "Membership Composition", "paragraphs": ["When making appointments to congressional advisory bodies, Members of Congress may be empowered to act independently or in concert with other Members. Structurally, variations in the authority of appointment officials fall within several common patterns."], "subsections": [{"section_title": "Direct Designation", "paragraphs": ["The statutory scheme may mandate that membership of a congressional advisory body be made up in whole or in part by specifically designated Members of Congress, typically members of the leadership or of specified committees.", "In most such cases, leadership service is limited to bodies concerned with the internal administrative functions of the House and Senate. For example, membership of the Commission to Recommend Individuals to the President for Appointment to the Office of Architect of the Capitol includes the Speaker of the House, the President pro tempore of the Senate, the majority and minority leaders of the House and the Senate, and the chairmen and the ranking minority members of the Committee on House Administration of the House of Representatives, the Committee on Rules and Administration of the Senate, the Committee on Appropriations of the House of Representatives, and the Committee on Appropriations of the Senate. "], "subsections": []}, {"section_title": "Appointment", "paragraphs": ["Selected leaders, often with balance between the parties, may appoint congressional advisory body members, who may or may not be Members of Congress. For appointments made by congressional leaders, the statutory scheme generally mandates that appointments be made by leaders of both parties. The members of some congressional advisory bodies are selected by majority and minority party leaders in equal numbers. In other instances, the majority party appoints a greater number. In a few cases, the majority/minority ratio of appointments to a commission varies, depending upon whether the President is of the same party as the majority in the House or the Senate.", "One common component of statutory appointment schemes for certain congressional advisory bodies is the requirement that Members of Congress serve on these panels. Certain bodies, such as the British American Parliamentary Group, are composed entirely of Members of Congress. In other instances, a statute may require that a certain specified number of Senators or Representatives be selected, or may prohibit Members of Congress from serving.", "For appointments made by the President pro tempore of the Senate, 2 U.S.C. \u00a7199 specifies involvement of the majority and minority leaders of the Senate."], "subsections": []}, {"section_title": "Recommendation", "paragraphs": ["Selected leaders, again often with balance between the parties, may be authorized to recommend members, who may or may not be Members of Congress, for appointment to a congressional advisory body. They may do so either in parallel or jointly, and the recommendations may be made to other congressional leaders, such as the Speaker of the House and President pro tempore of the Senate, to the President, or to a cabinet official."], "subsections": []}, {"section_title": "Qualification Provisos", "paragraphs": ["Some statutory provisos may have the effect of limiting the degree of autonomy a Member has in appointing or making recommendations of individuals for congressional advisory body membership. For example, the appointing official may be required by law to select members who are specifically qualified by virtue of their education, knowledge, training, experience, expertise, distinguished service, or recognized eminence in a particular field or fields. In other instances, appointments are expressly limited to individuals occupying specific federal, state, or local government positions, representing a particular occupation, or serving as head of a particular public or private sector institution or organization."], "subsections": []}]}, {"section_title": "Separation of Powers", "paragraphs": ["In many instances, the authority to appoint members to the entities covered in this report is shared by the executive and legislative branches. When the appointment authority set out in a statute creating a congressional advisory body is shared by the President (or other executive branch officials) and Members of Congress, questions about implementation of the appointment scheme have sometimes prompted the President to comment on separation-of-powers issues raised under the Appointments Clause of the Constitution. Some statutes instruct the President to appoint congressional advisory body members from a list provided by congressional leadership. For example, the appointment scheme for the Commission on Interoperable Data Sharing provides for nine members, one member appointed by the President to serve as chairman, and eight members appointed by the President \"from a list of nominees jointly provided by the Speaker of the House of Representatives, the minority leader of the House of Representatives, the majority leader of the Senate, and the minority leader of the Senate.\"", "In the signing statement accompanying the law, President George W. Bush noted that methods of selection included in the Appointment Clause of the Constitution include \"appointment by the President with Senate consent, or by the President alone,\" but not by the President \"from a pool of persons selected by congressional leadership.\" Similarly, in a statement accompanying the signing of legislation creating the Brown v. Board of Education 50 th Anniversary Commission, President Bush made it clear that he would not be bound by the membership recommendations of House and Senate leadership required by the statute, but would rather \"welcome, as a matter of comity, the suggestions of the congressional leadership for those positions.\""], "subsections": []}, {"section_title": "Impact of Appointment Framework", "paragraphs": ["As the foregoing discussion suggests, several alternative approaches are available to legislators in drafting membership selection language. Inclusion of legislators on such panels insures that Congress will be able to exercise a certain degree of control over the operations of the entity concerned. At the same time, service by Members on congressional advisory bodies is arguably antithetical to at least one of the rationales for creating the entity in the first place, namely, to reduce the workload of Congress by delegating certain functions to temporary bodies.", "Even in the absence of direct membership on a congressional advisory body, in drafting the particulars of an appointment scheme, legislators can dictate, to some degree, the measure of autonomy an entity enjoys. For example, although the legislation creating the National Commission on Terrorist Attacks Upon the United States (the 9-11 Commission) did not stipulate that Members of Congress be included in the commission's membership, it did call for 9 of the 10 members of the commission to be selected by congressional leaders. Attention to the proper balance between the number of members appointed by congressional leaders and by other individuals, or to the number of Members of Congress required to be among the appointees, or to the qualifications of appointees, can be significant factors in enabling an advisory body to fulfill its congressional mandate."], "subsections": []}, {"section_title": "Organization of the Report", "paragraphs": ["Each currently functioning congressional advisory body that was identified, regardless of when it was initially established, is profiled following the narrative portion of this report. For each entity, a brief summary of its purpose or role is provided, as well as the following information:", "Statutory D uration of the A dvisory B ody . The termination date is provided for each advisory body, where appropriate. Occasionally, termination dates are ambiguous, due to their contingency upon an associated time line within the statute, such as the date of submission of a final report. FACA A pplicability . Advisory bodies established in the executive branch that report to the President are subject to the Federal Advisory Committee Act (FACA), which governs their creation, administration, and management. Advisory bodies that are appointed by Congress and report only to Congress are not specifically bound by the requirements set forth in FACA. Because many commissions involve both congressional and presidential participation, some of the entities in this report may be governed by FACA. Occasionally, statutes creating congressional advisory bodies will incorporate explicit statutory language exempting a commission from FACA requirements, in whole or in part. Membership Appointment Structure . Each entry includes the advisory body's membership appointment scheme. The particulars of congressional involvement in the appointment process are varied. The statutory language of membership appointment schemes detail a wide range of membership patterns that may be of interest to lawmakers who might be contemplating creation of advisory bodies. In the legislative branch, the individuals most commonly empowered to make appointments to commissions and similar bodies are the Speaker of the House, the President or President pro tempore of the Senate, and the majority and minority leaders of the House and Senate. The majority leader of the House is less often included in these mechanisms, since the appointment role of the minority leader may be paired with the Speaker's appointment role. For each board, the appointment structure is outlined, with the participation of Members of Congress highlighted. For Member appointments, the appointer's role is provided in (parentheses) in the left-hand column. Additionally, the role of noncongressional officials is also provided. Term of Appointment . Most ongoing congressional advisory bodies have fixed terms of appointment set by statute. Statutes creating temporary commissions often provide that appointments are for the \"life of the commission.\"", "Additionally, commissions are divided into two groups: temporary advisory commissions (e.g., those with a statutory end date) and permanent entities."], "subsections": []}, {"section_title": "Listing of Individual Advisory Bodies", "paragraphs": ["The more than 90 entries on the following pages highlight the broad diversity of matters Congress has felt deserved examination beyond the established organizational structure of Congress. Entries are arranged alphabetically. Citations to the U.S. Code and the Statutes at Large are provided where particulars relating to the scope, purpose, and composition of these bodies may be located. The internet address of the entity's website is also provided, if available.", "Information on the involvement of Members of Congress in the appointment process for congressional commissions is also presented in a series of tables. Table 1 through Table 6 list the appointment responsibilities of each of these major congressional leaders. Table 7 lists other congressional leaders, namely the chair or ranking minority members of specified committees in the House and Senate who may also be granted authority to make or recommend appointments, or be designated as members of a commission."], "subsections": []}, {"section_title": "Temporary Advisory Commissions", "paragraphs": [], "subsections": [{"section_title": "400 Years of African-American History Commission", "paragraphs": [], "subsections": []}, {"section_title": "Adams Memorial Commission", "paragraphs": [], "subsections": []}, {"section_title": "Advisory Committee on International Exchange Rate Policy", "paragraphs": [], "subsections": []}, {"section_title": "Alyce Spotted Bear and Walter Soboleff Commission on Native Children", "paragraphs": [], "subsections": []}, {"section_title": "Commission on Farm Transactions-Needs for 2050", "paragraphs": [], "subsections": []}, {"section_title": "Coltsville National Historical Park Advisory Commission", "paragraphs": [], "subsections": []}, {"section_title": "Creating Options for Veterans' Expedited Recovery Commission", "paragraphs": [], "subsections": []}, {"section_title": "Cyberspace Solarium Commission", "paragraphs": [], "subsections": []}, {"section_title": "Dwight D. Eisenhower Memorial Commission", "paragraphs": [], "subsections": []}, {"section_title": "Frederick Douglass Bicentennial Commission", "paragraphs": [], "subsections": []}, {"section_title": "National Commission on Military Aviation Safety", "paragraphs": [], "subsections": []}, {"section_title": "National Security Commission on Artificial Intelligence", "paragraphs": [], "subsections": []}, {"section_title": "Public Buildings Reform Board", "paragraphs": [], "subsections": []}, {"section_title": "Public-Private Partnership Advisory Council to End Human Trafficking", "paragraphs": [], "subsections": []}, {"section_title": "Syria Study Group", "paragraphs": [], "subsections": []}, {"section_title": "United States Semiquincentennial Commission", "paragraphs": [], "subsections": []}, {"section_title": "Western Hemisphere Drug Policy Commission", "paragraphs": [], "subsections": []}, {"section_title": "Women's Suffrage Centennial Commission", "paragraphs": [], "subsections": []}, {"section_title": "World War I Centennial Commission", "paragraphs": [], "subsections": []}]}, {"section_title": "Permanent Entities", "paragraphs": [], "subsections": [{"section_title": "Advisory Committee on Student Financial Assistance", "paragraphs": [], "subsections": []}, {"section_title": "Advisory Committee on the Protection of Presidential and Vice-Presidential Candidates", "paragraphs": [], "subsections": []}, {"section_title": "Advisory Committee on the Records of Congress", "paragraphs": [], "subsections": []}, {"section_title": "American Folklife Center in the Library of Congress, Board of Trustees", "paragraphs": [], "subsections": []}, {"section_title": "Barry Goldwater Scholarship and Excellence in Education Foundation, Board of Trustees", "paragraphs": [], "subsections": []}, {"section_title": "British American Parliamentary Group", "paragraphs": [], "subsections": []}, {"section_title": "Canada-United States Interparliamentary Group", "paragraphs": [], "subsections": []}, {"section_title": "Citizen's Coinage Advisory Committee", "paragraphs": [], "subsections": []}, {"section_title": "Commission for the Judiciary Office Building", "paragraphs": [], "subsections": []}, {"section_title": "Commission for the Preservation of America's Heritage Abroad", "paragraphs": [], "subsections": []}, {"section_title": "Commission on Security and Cooperation in Europe (Helsinki Commission)", "paragraphs": [], "subsections": []}, {"section_title": "Commission on Social Impact Partnerships", "paragraphs": [], "subsections": []}, {"section_title": "Commission to Recommend Individuals to the President for Appointment to the Office of Architect of the Capitol", "paragraphs": [], "subsections": []}, {"section_title": "Congressional-Executive Commission on the People's Republic of China", "paragraphs": [], "subsections": []}, {"section_title": "Congressional Advisers for Trade Policy and Negotiations", "paragraphs": [], "subsections": []}, {"section_title": "Congressional Award Board", "paragraphs": [], "subsections": []}, {"section_title": "Coordinating Council on Juvenile Justice and Delinquency Prevention", "paragraphs": [], "subsections": []}, {"section_title": "Denali Commission", "paragraphs": [], "subsections": []}, {"section_title": "Election Assistance Commission", "paragraphs": [], "subsections": []}, {"section_title": "Election Assistance Commission, Board of Advisors", "paragraphs": [], "subsections": []}, {"section_title": "Federal Judicial Center Foundation Board", "paragraphs": [], "subsections": []}, {"section_title": "Federal Law Enforcement Congressional Badge of Bravery Board", "paragraphs": [], "subsections": []}, {"section_title": "Federal Retirement Thrift Investment Board", "paragraphs": [], "subsections": []}, {"section_title": "Financial Oversight and Management Board", "paragraphs": [], "subsections": []}, {"section_title": "Gallaudet University, Board of Trustees", "paragraphs": [], "subsections": []}, {"section_title": "Harry S Truman Scholarship Foundation, Board of Trustees", "paragraphs": [], "subsections": []}, {"section_title": "Health Information Technology (HIT) Advisory Committee", "paragraphs": [], "subsections": []}, {"section_title": "Help America Vote Foundation, Board of Directors", "paragraphs": [], "subsections": []}, {"section_title": "Henry M. Jackson Foundation, Council of Directors", "paragraphs": [], "subsections": []}, {"section_title": "House Commission on Congressional Mailing Standards (Franking Commission)", "paragraphs": [], "subsections": []}, {"section_title": "House Child Care Center, Advisory Board", "paragraphs": [], "subsections": []}, {"section_title": "House of Representatives Fine Arts Board", "paragraphs": [], "subsections": []}, {"section_title": "House Office Building Commission", "paragraphs": [], "subsections": []}, {"section_title": "Human Space Flight Independent Investigation Commission", "paragraphs": [], "subsections": []}, {"section_title": "Institute of American Indian and Alaska Native Culture and Arts Development Board of Trustees", "paragraphs": [], "subsections": []}, {"section_title": "International Clean Energy Foundation, Board of Directors", "paragraphs": [], "subsections": []}, {"section_title": "James Madison Memorial Fellowship Foundation, Board of Trustees", "paragraphs": [], "subsections": []}, {"section_title": "Japan-United States Friendship Commission", "paragraphs": [], "subsections": []}, {"section_title": "John C. Stennis Center for Public Service Training and Development, Board of Trustees", "paragraphs": [], "subsections": []}, {"section_title": "John F. Kennedy Center for the Performing Arts, Board of Trustees", "paragraphs": [], "subsections": []}, {"section_title": "Library of Congress Trust Fund Board", "paragraphs": [], "subsections": []}, {"section_title": "Medal of Valor Review Board (Public Safety Officer)", "paragraphs": [], "subsections": []}, {"section_title": "Mexico-United States Interparliamentary Group Delegation", "paragraphs": [], "subsections": []}, {"section_title": "Migratory Bird Conservation Commission", "paragraphs": [], "subsections": []}, {"section_title": "Millennium Challenge Corporation, Board of Directors", "paragraphs": [], "subsections": []}, {"section_title": "Morris K. Udall and Stewart L. Udall Foundation, Board of Trustees", "paragraphs": [], "subsections": []}, {"section_title": "National Advisory Committee on Institutional Quality and Integrity", "paragraphs": [], "subsections": []}, {"section_title": "National Capital Planning Commission", "paragraphs": [], "subsections": []}, {"section_title": "National Committee on Vital and Health Statistics", "paragraphs": [], "subsections": []}, {"section_title": "National Council on Disability", "paragraphs": [], "subsections": []}, {"section_title": "National Council on the Arts", "paragraphs": [], "subsections": []}, {"section_title": "National Historical Publications and Records Commission", "paragraphs": [], "subsections": []}, {"section_title": "NATO Parliamentary Assembly, U.S. Group", "paragraphs": [], "subsections": []}, {"section_title": "Office of Congressional Workplace Rights, Board of Directors", "paragraphs": [], "subsections": []}, {"section_title": "", "paragraphs": [], "subsections": []}, {"section_title": "Open World Leadership Center, Board of Trustees", "paragraphs": [], "subsections": []}, {"section_title": "Senate Commission on Art", "paragraphs": [], "subsections": []}, {"section_title": "Smithsonian Institution, Board of Regents", "paragraphs": [], "subsections": []}, {"section_title": "Social Security Advisory Board", "paragraphs": [], "subsections": []}, {"section_title": "State and Local Law Enforcement Congressional Badge of Bravery Board", "paragraphs": [], "subsections": []}, {"section_title": "Tribal Advisory Committee", "paragraphs": [], "subsections": []}, {"section_title": "United States Air Force Academy, Board of Visitors", "paragraphs": [], "subsections": []}, {"section_title": "United States Capitol Preservation Commission", "paragraphs": [], "subsections": []}, {"section_title": "United States-China Economic and Security Review Commission", "paragraphs": [], "subsections": []}, {"section_title": "United States Coast Guard Academy, Board of Visitors", "paragraphs": [], "subsections": []}, {"section_title": "United States Commission on Civil Rights", "paragraphs": [], "subsections": []}, {"section_title": "United States Commission on International Religious Freedom", "paragraphs": [], "subsections": []}, {"section_title": "United States Delegation to the Parliamentary Assembly of the Organization for Security and Cooperation in Europe", "paragraphs": [], "subsections": []}, {"section_title": "United States Group of the United States Senate-China Interparliamentary Group", "paragraphs": [], "subsections": []}, {"section_title": "United States Group of the United States Senate-Russia Interparliamentary Group", "paragraphs": [], "subsections": []}, {"section_title": "United States Holocaust Memorial Council", "paragraphs": [], "subsections": []}, {"section_title": "United States International Development Finance Corporation, Board of Directors", "paragraphs": [], "subsections": []}, {"section_title": "United States Merchant Marine Academy, Board of Visitors", "paragraphs": [], "subsections": []}, {"section_title": "United States Military Academy, Board of Visitors", "paragraphs": [], "subsections": []}, {"section_title": "United States Naval Academy, Board of Visitors", "paragraphs": [], "subsections": []}, {"section_title": "United States Senate Caucus on International Narcotics Control", "paragraphs": [], "subsections": []}, {"section_title": "Utah Reclamation Mitigation and Conservation Commission", "paragraphs": [], "subsections": []}, {"section_title": "Western Hemisphere Institute for Security Cooperation, Board of Visitors", "paragraphs": [], "subsections": []}]}]}}
{"id": "R45667", "title": "Pittman-Robertson Wildlife Restoration Act: Understanding Apportionments for States and Territories", "released_date": "2019-04-05T00:00:00", "summary": ["The Federal Aid in Wildlife Restoration Act (16 U.S.C. \u00a7\u00a7669 et seq.), enacted in 1937 and now known as the Pittman-Robertson Wildlife Restoration Act, provides funding for states and territories to support wildlife restoration, conservation, and hunter education and safety programs. The U.S. Fish and Wildlife Service (FWS), within the Department of the Interior, administers Pittman-Robertson. All 50 states (but not the District of Columbia) as well as the 5 inhabited U.S. territories receive Pittman-Robertson funds.", "Funding for FWS to carry out Pittman-Robertson programs comes from excise taxes on firearms, ammunition, and archery equipment. Receipts from these excise taxes are deposited into the Federal Aid to Wildlife Restoration Fund in the Treasury, and monies from the fund are made available for FWS in the fiscal year following their collection without any further action by Congress. Between FY1939 and FY2019, FWS disbursed $18.8 billion (in 2018 dollars) for wildlife restoration and hunter education and safety activities for Pittman-Robertson programs.", "FWS apportions and disburses funds to states and territories through three formula-based programs: Wildlife Restoration (known as Section 4(b)), Basic Hunter Education and Safety (Section 4(c)), and Enhanced Hunter Education and Safety Grants (Section 10). FWS also allocates nonformula funding for multistate conservation grants and program administration. State apportionments for wildlife restoration projects are based on the land and inland water area and the number of hunting licenses sold in each state. State population is used to determine apportionments for both the Basic and Enhanced Hunter Education and Safety programs. FWS also apportions funding for territories. For Wildlife Restoration, Puerto Rico receives not more than 0.5% of the apportionments made under the act and American Samoa, Guam, the Commonwealth of Northern Mariana Islands, and the U.S. Virgin Islands each receive not more than 0.17%. Each territory receives 0.17% of the total apportionments for both the Basic and Enhanced Hunter Education and Safety programs.", "Amending Pittman-Robertson is of perennial interest to some in Congress. Members routinely consider legislation to amend how states and territories may use their Pittman-Robertson apportionments, sources of funding to support Pittman-Robertson, and the Pittman-Robertson apportionment formulas. Issues of interest have included whether Pittman-Robertson funds should be available for hunter recruitment and retention activities and the amount available for the expansion or construction of public shooting ranges. Because Pittman-Robertson derives its funding through an excise tax on shooting and archery equipment, the number of people participating in these and related activities influences the amount of available funding for these programs. This, in turn, can lead some to consider issues related to funding sources and whether the existing revenue sources derived from excise taxes on shooting and archery equipment should be modified. Other issues that Congress has addressed include whether to modify the existing apportionment structure, including whether to amend how funding is apportioned for states and territories."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Enacted in 1937, the Federal Aid in Wildlife Restoration Act, now known as the Pittman-Robertson Wildli fe Restoration Act (hereinafter referred to as Pittman-Robertson), provides funding for states and territories to support projects that promote the conservation and restoration of wild birds and mammals and their habitats and programs that provide hunter education and safety training and opportunities. ", "The U.S. Fish and Wildlife Service (FWS), an agency within the Department of the Interior, administers Pittman-Robertson as part of its Wildlife and Sport Fish Restoration program. Revenues generated through excise taxes on pistols and revolvers, other firearms, ammunition, bows, and other archery equipment provide the funding for Pittman-Robertson. After collection, receipts from these excise taxes are deposited into the Federal Aid to Wildlife Restoration Fund in the Treasury, and monies from the fund are made available for FWS for Pittman-Robertson activities in the fiscal year following their collection without any further action by Congress. For three programs within Pittman-Robertson, FWS apportions the funds directly among the states and territories. All 50 states as well as Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands (collectively referred to as territories in this report) are eligible to receive funding through Pittman-Robertson. Since its creation, Pittman-Robertson has provided over $18.8 billion (in 2018 dollars; $12.2 billion in nominal dollars) to states and territories.", "This report provides an overview of the Pittman-Robertson state and territory programs that support wildlife restoration and hunter education and safety activities, including a breakdown of the various apportionment formulas and an analysis of related issues that may be of interest to Congress. This report focuses on the formula-based programs within Pittman-Robertson that provide funding for states and territories."], "subsections": []}, {"section_title": "Revenues and Apportionments7", "paragraphs": ["The Pittman-Robertson Wildlife Restoration Act apportions and allocates funding for five distinct purposes: ", "1. program administration (Section 4(a)); 2. Wildlife Restoration (Section 4(b)); 3. Basic Hunter Education and Safety (Section 4(c)); 4. Enhanced Hunter Education and Safety Grants (Section 10); and 5. Multistate Conservation Grants (Section 11). ", "Funds for three of these programs\u2014Wildlife Restoration, Basic Hunter Education and Safety, and Enhanced Hunter Education and Safety Grants\u2014are disbursed directly to states based on two apportionment formulas (both hunter education and safety programs use the same formula). The formulas take into account a state's acreage, number of hunting licenses sold, and population ( Figure 1 and Table A-1 ). Territories are apportioned a set percentage of the funds for each program. Washington, DC, does not receive funding under these programs. States and territories can use their apportionments to support the federal share of wildlife and hunter and safety projects that receive Pittman-Robertson funding. Additionally, Pittman-Robertson provides for FWS to allocate nonformula based funding for multistate conservation grants and program administration."], "subsections": [{"section_title": "Revenues", "paragraphs": ["Funding for programs authorized in Pittman-Robertson comes from excise taxes on certain firearms, ammunition, and archery equipment. Taxes on these items are imposed on the manufacturer, producer, or importer of these goods. However, these taxes may result in higher prices for the purchaser if part or all of the cost is passed on in the final purchase price. The tax rates are 10% for pistols and revolvers, 11% for other firearms and ammunition, 11% for bows and archery equipment, and a per shaft tax for arrows that is adjusted annually for inflation. Receipts from these excise taxes are deposited into the Federal Aid to Wildlife Restoration Fund in the Treasury, and monies from the fund are made available for FWS in the fiscal year following their collection without any further action by Congress.", "Revenues generated from these excise taxes vary year by year both in total revenue ( Figure 2 ) and in revenue attributable to a specific item group ( Table 1 ). From FY2007 through FY2016, FWS reported a total of $6.2 billion (in 2018 dollars) of revenue. Ammunition accounted for $2.1 billion (34%), firearms for $1.9 billion (32%), pistols and revolvers for $1.7 billion (27%), and archery equipment for $0.5 billion (8%) of the total (in 2018 dollars). The revenues attributable to \u00bd the revenues generated from excise taxes on pistols, revolvers, and archery equipment accounted for 17% of the total revenue. These revenues determined the amount available for apportionments through the Basic Hunter Education and Safety program for the years from FY2008 through FY2017 (the years following excise tax collection). The remaining revenues, 83% for FY2007 through FY20016, provide funds for the Wildlife Restoration and Enhanced Hunter Education and Safety programs as well as the Multistate Conservation Grant program and the set-aside for administration.", "While the overall revenues generated determines the total amount available for apportionment in the year following collection, the amount available for Basic Hunter Education and Safety program (Section 4(c)) is solely based on revenues generated from pistols, revolvers, and archery equipment. As such, amounts available for apportionment and disbursement are program specific and fluctuate based on the total volume of shooting and archery equipment and the type of goods. "], "subsections": []}, {"section_title": "State and Territory Apportionment", "paragraphs": ["Between FY1939 and FY2019, FWS disbursed $18.8 billion (in constant 2018 dollars; $12.2 billion in nominal dollars) for wildlife restoration and hunter education and safety activities to states and territories ( Figure 3 ). Annual apportionments have increased over time. However, in recent years, there have been fluctuations of over $100 million between years. FWS disbursed $3.8 billion (in nominal dollars)\u2014an average of $751 million per year\u2014to states and territories for the Wildlife Restoration and the two Hunter Education and safety programs for FY2015 through FY2019 ( Figure 3 ). Each year, individual states received between $4.5 million and $34.7 million, on average, in total apportionments for FY2015 through FY2019. American Samoa, Guam, the Commonwealth of Northern Mariana Islands, and the Virgin Islands each received $1.3 million per year, on average, and Puerto Rico received $3.3 million per year, on average. Table B-1 provides the annual total apportionment for each state and territory for FY2015 through FY2019."], "subsections": [{"section_title": "Wildlife Restoration Program", "paragraphs": ["The Wildlife Restoration program, also known as Section 4(b), comprises the largest funding stream within Pittman-Robertson. From FY2015 through FY2019, annual state and territory apportionments for the Wildlife Restoration Program averaged $606 million (81% of the $751 million, on average, disbursed directly to states and territories under Pittman-Robertson; see Figure 3 and Table B-2 ). The total amount of funding available for the Wildlife Restoration program for states is determined by deducting the amounts available for administration, the Basic and Enhanced Hunter Education and Safety programs (Sections 4(c) and 10, respectively), multistate conservation grants, and territorial allocations for wildlife restoration activities from the total amount of revenues generated from the excise taxes on pistols, revolvers, firearms, ammunition, and archery equipment in the previous year. States and territories may use this funding to pay the federal share of wildlife restoration projects. States and territories may use their apportionments to pay for up to 75% of the total project cost; they are responsible for the remaining cost of the project using non-Pittman-Robertson funds. Wildlife Restoration program funds are available for use by the states and territories for the fiscal year in which they are apportioned and the following fiscal year.", "FWS calculates the Wildlife Restoration apportionment for each state using a two-part formula, with each part determining half of the amount apportioned. The formula is based on ", "the ratio of the area of a state compared with the total area of all 50 states and the number of paid hunting licenses sold in a state compared with the total number of paid hunting licenses sold in all 50 states.", "The area of and number of licenses sold in the territories and Washington, DC, are not included in the totals for all 50 states.", "However, the minimum and maximum amount any state may receive is 0.5% and 5%, respectively. Territorial apportionments are not formula based. Rather, the caps for territorial apportionments for wildlife restoration activities are set in statute: Puerto Rico receives not more than one-half of 1% (0.5%), and Guam, the U.S. Virgin Islands, American Samoa, and the Commonwealth of the Northern Mariana Islands each receive not more than one-sixth of 1% (0.17%) of the total funds apportioned. Collectively, territories can receive slightly more than 1% of the allocated funding.", "FWS calculates state area as the sum of land and inland water areas in a state. State area does not include coastal, Great Lakes, or territorial waters. The area within an individual state is compared to the total area in all 50 states (territorial area is not counted in the total). In total, the United States contains 3.6 million square miles of land and inland water areas. States' areas vary from 0.03% (Rhode Island) to over 16% (Alaska) of the total U.S. area ( Figure 4 ). States' areas do not change on an annual basis, though they may be updated periodically.", "The number of paid hunting-license holders used for the calculation in a given apportionment year (also known as calculation year) is \"the number of paid hunting-license holders in each State in the second fiscal year preceding the fiscal year for which such apportionment is made.\" The act does not distinguish between in-state and out-of-state hunters; a hunting license purchased by a nonresident would be equivalent under this formula to one purchased by a resident. For calculation years 2015 to 2019, states collectively sold 15.4 million licenses per year, on average, in the United States. During these five years, Rhode Island sold the fewest licenses per year (8,404, on average) and Texas sold the most (1.1 million per year, on average) ( Figure 4 ). Unlike area, the number of hunting licenses sold varies from year to year ( Table A-2 ). This annual variation influences the apportionment level and can result in states receiving more or less in a given year (subject to minimum and maximum requirements; Table 2 ).", "From FY2015 through FY2019, 8 states each received the minimum of 0.5% of the apportionments for the Wildlife Restoration program ($3.0 million per year, on average), 40 states received between the minimum and maximum, and 2 states received the maximum of 5% ($30.3 million). All 8 states receiving the minimum allocation are comparatively small (each consists of less than 0.5% of the total U.S. area) and sold a comparatively small number of hunting licenses in recent years (on average, each sold less than 0.5% of the U.S. total). The 2 states\u2014Texas and Alaska\u2014that received the maximum apportionment of 5% are both large (7.4% and 16.3% of the total U.S. area, respectively) but differed significantly in license sales in recent years (on average 7.4% and 0.7%, respectively)."], "subsections": []}, {"section_title": "Hunter Education and Safety Programs", "paragraphs": ["Two programs within Pittman-Robertson provide support to states and territories for hunter education and safety projects: Basic Hunter Education and Safety (Section 4(c)) and Enhanced Hunter Education and Safety Grants (Section 10). The amount of funding available for state and territorial apportionments for the Basic Hunter Education and Safety program fluctuates based on annual revenues deposited in the Federal Aid to Wildlife Restoration Fund from excise taxes on pistols, revolvers, and archery equipment ( Figure 1 ). The Enhanced Hunter Education and Safety Grants program receives a statutorily fixed amount of $8 million per year. Both programs use the same apportionment structure, premised on the ratio of a state's population to the total population of the United States, as reported in the most recent decennial census. Statute dictates a minimum (1%) and maximum (3%) state apportionment cap for both programs. Each of the five eligible territories receives one-sixth of 1% (0.17%) of the total amount available for each program. States and territories may use their apportionments to pay for up to 75% of the total cost of a project.", "Based on the 2010 decennial census, 21 states each contain less than 1% of the U.S. population. Of the 29 remaining, 12 contain between 1% and 2%, 7 between 2% and 3%, 4 between 3% and 4%, and 6 more than 4%. The most populous state, California, contains 12.1% of the total U.S. population. Figure 5 shows the percentage of the population for each state compared with the total for all 50 states calculated from the 2010 U.S. decennial census. ", "Because apportionments are determined based on the decennial census, which only changes when a new decennial census is conducted, the percentage of apportionment each state receives is constant in the years between decennial censuses, though the actual apportionment will fluctuate based on revenues generated by the excise tax on pistols, revolvers, and archery equipment. Based on the 2010 decennial census, 21 states have received the minimum 1%, 3 states have received between 1% and 2%, 9 states between 2% and 3%, and 17 states the 3% cap. The territories have received 0.17% as required in statute. "], "subsections": [{"section_title": "Basic Hunter Education and Safety Program (Section 4(c))", "paragraphs": ["The total amount of funding available for the Basic Hunter Education and Safety program is equal to the revenue generated by half of the excise taxes collected on pistols, revolvers, and archery equipment but not other firearms and ammunition. Apportionments for the Basic Hunter Education and Safety program represent the second-largest component of Pittman-Robertson in terms of funding. Between FY2015 and FY2019, the Basic Hunter Education and Safety program apportioned an average of $136 million per year in total to states and territories (18.2% of the $751 million total average annual apportionments disbursed to states and territories under Pittman-Robertson apportionment programs; see Figure 3 and Table B-3 ). Between FY2015 and FY2019, the majority of states received either the minimum or the maximum allocation established in statute each year; 21 states received the minimum amount required by law (1%, or $1.4 million per year, on average), and 17 states received the maximum (3%, or $4.1 million per year, on average). Each territory received 0.17% ($227,473 per year, on average), as required by statute. States may use funding under this program to pay the federal share of the \"costs of a hunter safety program and the construction, operation, and maintenance of public target ranges, as part of such program.\" Basic Hunter Education and Safety program funds are available for use by states and territories for the fiscal year in which they are apportioned and the following fiscal year."], "subsections": []}, {"section_title": "Enhanced Hunter Education and Safety Grants Program (Section 10)", "paragraphs": ["Congress passed legislation to add the Enhanced Hunter Education and Safety Grants program (also known as Section 10) to Pittman-Robertson in 2000. Since FY2003, $8.0 million has been set aside annually for the program for firearm and bow hunter education and safety grants. Pittman-Robertson states that the allowed uses for these grants are determined based on whether a state or territory has \"used all of the funds apportioned to the State under section 669c(c) [Section 4(c)] of this title for the fiscal year.\" If a state or territory has not used all the funds apportioned to it under the Basic Hunter Education and Safety program, it may use monies apportioned under the Enhanced Hunter Education and Safety Grants program for the enhancement of ", "hunter education programs, hunter and firearm safety programs, and hunter development programs; interstate coordination, hunter education, and shooting range programs; bow hunter and archery education, safety, and development; and construction and updating of firearm and archery shooting ranges.", "If a state or territory has used all of its Basic Hunter Education and Safety program apportionment, it may use its Enhanced Hunter Education and Safety Grants apportionment for any purpose authorized by Pittman-Robertson.", "FWS annually apportions and disburses funding to states and territories under the Enhanced Hunter Education and Safety Grants program ( Figure 3 and Table B-4 ). For FY2015 to FY2019, each state received between 1% ($80,160 per year, on average) and 3% ($240,480 per year, on average) of the total amount apportioned for these grants. Each eligible territory received 0.17% ($13,360 per year, on average) of the total Enhanced Hunter Education and Safety Grants program apportionments. Because both hunter education programs use the same distribution formula, apportionments for the Enhanced Hunter Education and Safety Grants program follow the same pattern as apportionments for the Basic Hunter Education and Safety program. Unlike the Basic Hunter Education and Safety program, Enhanced Hunter Education and Safety Grant program funds are available for use by states and territories only for the fiscal year in which they are apportioned."], "subsections": []}]}]}]}, {"section_title": "Issues for Congress", "paragraphs": ["Members of Congress have routinely introduced legislation to amend Pittman-Robertson. In particular, Congress has considered issues related to eligible uses of state and territorial apportionments, the funding structure and funding sources for the program, and the apportionment formulas."], "subsections": [{"section_title": "Eligible Uses", "paragraphs": ["In recent Congresses, some Members have introduced several bills that would amend the way states and territories are able to spend their apportionments. Some bills have proposed amending Pittman-Robertson to allow additional uses, such as hunter recruitment and retention; others have proposed modifying the federal share and eligible uses of funds for existing or related activities, such as for public target ranges. Some Members introduced multiple bills for both purposes in recent Congresses, including in the 115 th and 116 th Congresses. "], "subsections": [{"section_title": "Recruitment, Retention, and Promotion", "paragraphs": ["Several bills in the 115 th Congress would have allowed and in the 116 th Congress would allow states to use funds provided through Pittman-Robertson to promote hunting and recreational shooting, recruitment and retention of hunters and shooters, and public relations. According to the 2016 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation , the number of hunters in the United States declined by 16% (2.2 million individuals) compared to the similar survey in 2011 (from 13.7 million in 2011 to 11.5 million in 2016). These bills would allow states to use funds currently provided for the Wildlife Restoration, Basic Hunter Education and Safety, and Enhanced Hunter Education and Safety Grants programs for hunter and recreational shooter recruitment and retention. In addition, they would create a funding mechanism for the Secretary of the Interior to use for recruitment and retention purposes at the national level. Currently, Pittman-Robertson prohibits the use of Wildlife Restoration program apportionments for public relations related to wildlife management activities. These proposals would remove this prohibition. ", "Proponents of this type of legislation have argued that these bills would provide states with flexibility to use Pittman-Robertson apportionments to support recruitment efforts that would promote participation in hunting and shooting sports. They contend there is a need to attract and retain hunters and recreational shooters, which, in turn, could increase excise tax revenues that support Pittman-Robertson. Stakeholders also point out that wildlife restoration would remain the primary purpose of the act even if amended. Other stakeholders have raised the concern that these bills would diminish wildlife restoration activities by allowing states to use funds currently apportioned for wildlife restoration purposes for recruitment and retention. "], "subsections": []}, {"section_title": "Shooting Ranges", "paragraphs": ["Other legislation has been introduced, including in the 115 th and 116 th Congresses, that would change the terms under which states may use Pittman-Robertson allocations for projects related to the construction and expansion of public target ranges. Currently, Pittman-Robertson allows states to use funds apportioned under the Basic Hunter Education and Safety program (Section 4(c)) for the \"construction, operation, and maintenance of public target ranges.\" Funds apportioned under the Enhanced Hunter Education and Safety Grants program (Section 10) may be used for \"enhancement of construction or development of firearm shooting ranges and archery ranges, and the updating of safety features of firearm shooting ranges and archery ranges.\" However, both programs have a 75% cap for the federal share of projects supported by Pittman-Robertson funding. All of the proposals in the 115 th and 116 th Congress to amend the eligibility of activities related to shooting ranges would", "allow states and territories to use their Basic Hunter Education and Safety program apportionments for land acquisition, expansion, and construction related to a target range, rather than solely for construction, operation, and maintenance of a range; allow states and territories to use up to 10% of funds apportioned to them through the Wildlife Restoration program to supplement apportionments for the Enhanced Hunter Education and Safety Grants program to be used for land acquisition, expansion, and construction related to a target range; allow states and territories to use their apportionments to pay for up to 90% of the total cost of a project related to a shooting range, instead of the current 75% federal cost-share cap; and extend the obligation and expenditure window of Enhanced Hunter Education and Safety Grants program apportionments used for shooting ranges to up to five fiscal years from the current window (the fiscal year for which they were apportioned). ", "According to their authors, these bills would address a stated decline in the availability of public target ranges and would provide increased opportunity for target practice at public shooting ranges. Some proponents have further argued that this type of legislation would allow the use of more funds to provide the public with opportunities to \"embrace hunting and shooting sports,\" which could lead to economic benefits. Some proponents also contend that this legislation would make it easier for states to use federal funding, because it would lower the state matching requirement from at least 25% to 10% for target range-related projects and extend the funding window for certain funds. Some stakeholders have raised concerns that this legislation would allow states to use funding for target range-purposes that otherwise would be available for wildlife restoration activities under Section 4(b). "], "subsections": []}]}, {"section_title": "Funding Sources and Structure", "paragraphs": ["Under current law, the Federal Aid to Wildlife Restoration Fund receives revenues generated through an excise tax on firearms, ammunition, and archery equipment. Because Pittman-Robertson funding is entirely reliant on revenues from these taxes, it is subject to spending patterns on these items and can fluctuate with the markets for these goods. In addition, although firearm and archery equipment owners, hunters, and recreational shooters generate the funds used by Pittman-Robertson, many stakeholders contend that the act's wildlife restoration benefits accrue to the American public at large (this is often referred to as user-pay, public-benefit). Both the potential for market-based fluctuation of the excise tax structure and the public benefit nature of Pittman-Robertson have led some stakeholders to propose amending the act to include a funding source that they argue is more stable and not solely reliant on hunters and recreational shooters. ", "Congress has structured revenue sources for Pittman-Robertson so that those who recreate with firearms or bows contribute to funding that is used to maintain and preserve wildlife and hunter safety programs. Upon enactment of the Federal Aid in Wildlife Restoration Act, in 1937, Congress only included revenues generated from excise taxes on firearms (not including pistols and revolvers) and shells and cartridges. In debating this act, some Members stated that taxes imposed on sporting arms and ammunition should be used to benefit wildlife restoration. In 1970, Congress enacted legislation to deposit revenues from an excise tax on pistols and revolvers into the Federal Aid to Wildlife Restoration Fund rather than into the general fund of the Treasury, into which they were being deposited. The purpose of this legislation was to increase revenues available to support wildlife restoration and programs for hunter safety. Congress further amended the revenue sources in 1972, providing that an excise tax on bows and arrows, also created in the same law, also be deposited into the Federal Aid to Wildlife Restoration Fund. This inclusion provided that archers also contribute to the benefits provided by the act.", "The concept of providing more stable and diversified funds for Pittman-Robertson is not new, and both stakeholders and Congress have addressed this issue on several occasions. For example, some stakeholders have suggested that given the public benefit nature of Pittman-Robertson, an excise tax should be imposed on other categories of goods and services related to outdoor recreation (e.g., backpacks, bicycles, climbing gear, and sport utility vehicles, among other items). This proposal\u2014sometimes referred to as a backpack tax \u2014has spurred an ongoing debate for several decades. Proponents have contended that it would be fairer for all users, not just hunters and shooters, to support wildlife conservation and restoration and that broadening the tax base could raise more revenue for restoration. Conversely, opponents have suggested that the proposal would place an untenable burden on the outdoor industry, leading to fewer sales and making items prohibitively expensive for some stakeholders, and that it could deter individuals from enjoying the outdoors. ", "Congress has not enacted legislation to broaden the excise tax base supporting Pittman-Robertson beyond firearms, ammunition, and archery equipment. However, in FY2001, Congress amended Pittman-Robertson to include an additional subaccount within the Federal Aid to Wildlife Restoration Fund, the Wildlife Restoration and Conservation Account, to provide supplemental funding for wildlife restoration and conservation. In the same law that created the subaccount, Congress appropriated $50 million to the subaccount \"for the development, revision, and implementation of wildlife conservation and restoration plans and programs.\" Congress appropriated funding to this subaccount only in FY2001.", "In recent Congresses, including the 115 th Congress, some Members have introduced legislation that would have amended Pittman-Robertson to repurpose the subaccount. These bills would have transferred up to $1.3 billion per year into the subaccount from revenues deposited into the Treasury under the Outer Continental Shelf Lands Act and the Mineral Leasing Act. These funds would have been available for states and territories for a variety of conservation and restoration activities.", "In the 116 th Congress, Congress may continue to consider alternate funding sources for Pittman-Robertson through existing or new mechanisms. Proponents have argued that additional funds from alternate sources would bolster restoration and conservation activities and provide a secure source of funding for Pittman-Robertson. Some stakeholders also have stated that a bill authorizing such alternate funding sources could provide additional resources for federal agencies or tribal partners to implement the conservation of threatened and endangered species, among other concerns. However, Congress may consider if providing funding for conservation and restoration under Pittman-Robertson could affect other potential uses of federal funds."], "subsections": []}, {"section_title": "Apportionment Formulas", "paragraphs": ["In addition to eligible uses and funding sources, Congress may consider amending Pittman-Robertson's apportionment structure. Currently, states and territories are treated differently under the program; states are apportioned funds based on area, population, and number of hunting licenses (see \" State and Territory Apportionment \" above), whereas territories are allocated funding based on a set percentage or percentage caps. For the Wildlife Restoration program, states receive a minimum of 0.5% of the program's total apportionment, Puerto Rico receives not more than 0.5%, and each of the remaining four eligible territories receives not more than 0.17%. For both the Basic and Enhanced Hunter Education and Safety programs, states receive at least 1% of the total apportionments and territories receive 0.17% of the apportionments. Under current law, Washington, DC, does not receive funding through any of these programs. However, in FY2001, Washington, DC, received funding through the Wildlife Conservation and Restoration Account. ", "Congress may consider issues related to apportionment formulas, including topics related to parity between states, territories, and others. It also may consider amending the apportionment structures, including minimum and maximum allocations, in general. The current structure is the result of multiple congressional actions since the original enactment in 1937. Through these actions, Congress has added and modified apportionment formula and eligibility. Some stakeholders have expressed concern over the discrepancy between the minimum apportionment to states and the set percentage provided to territories; they contend there should be greater parity between states and territories. Other stakeholders have suggested that tribes also should be eligible to receive allocations under Pittman-Robertson programs. ", "Appendix A. State Characteristics", "Appendix B. Annual Pittman-Robertson Wildlife Restoration Act Apportionments by State and Territory, FY2015-FY2019"], "subsections": []}]}]}}
{"id": "R45178", "title": "Artificial Intelligence and National Security", "released_date": "2019-01-30T00:00:00", "summary": ["Artificial intelligence (AI) is a rapidly growing field of technology with potentially significant implications for national security. As such, the U.S. Department of Defense (DOD) and other nations are developing AI applications for a range of military functions. AI research is underway in the fields of intelligence collection and analysis, logistics, cyber operations, information operations, command and control, and in a variety of semiautonomous and autonomous vehicles. Already, AI has been incorporated into military operations in Iraq and Syria. Congressional action has the potential to shape the technology's development further, with budgetary and legislative decisions influencing the growth of military applications as well as the pace of their adoption.", "AI technologies present unique challenges for military integration, particularly because the bulk of AI development is happening in the commercial sector. Although AI is not unique in this regard, the defense acquisition process may need to be adapted for acquiring emerging technologies like AI. In addition, many commercial AI applications must undergo significant modification prior to being functional for the military. A number of cultural issues also challenge AI acquisition, as some commercial AI companies are averse to partnering with DOD due to ethical concerns, and even within the department, there can be resistance to incorporating AI technology into existing weapons systems and processes.", "Potential international rivals in the AI market are creating pressure for the United States to compete for innovative military AI applications. China is a leading competitor in this regard, releasing a plan in 2017 to capture the global lead in AI development by 2030. Currently, China is primarily focused on using AI to make faster and more well-informed decisions, as well as on developing a variety of autonomous military vehicles. Russia is also active in military AI development, with a primary focus on robotics.", "Although AI has the potential to impart a number of advantages in the military context, it may also introduce distinct challenges. AI technology could, for example, facilitate autonomous operations, lead to more informed military decisionmaking, and increase the speed and scale of military action. However, it may also be unpredictable or vulnerable to unique forms of manipulation. As a result of these factors, analysts hold a broad range of opinions on how influential AI will be in future combat operations. While a small number of analysts believe that the technology will have minimal impact, most believe that AI will have at least an evolutionary\u2014if not revolutionary\u2014effect.", "Military AI development presents a number of potential issues for Congress:", "What is the right balance of commercial and government funding for AI development? How might Congress influence defense acquisition reform initiatives that facilitate military AI development? What changes, if any, are necessary in Congress and DOD to implement effective oversight of AI development? How should the United States balance research and development related to artificial intelligence and autonomous systems with ethical considerations? What legislative or regulatory changes are necessary for the integration of military AI applications? What measures can Congress take to help manage the AI competition globally?"], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction1", "paragraphs": ["Artificial intelligence (AI) is a rapidly growing field of technology that is capturing the attention of commercial investors, defense intellectuals, policymakers, and international competitors alike, as evidenced by a number of recent initiatives. On July 20, 2017, the Chinese government released a strategy detailing its plan to take the lead in AI by 2030. Less than two months later Vladimir Putin publicly announced Russia's intent to pursue AI technologies, stating, \"[W]hoever becomes the leader in this field will rule the world.\" Similarly, the U.S. National Defense Strategy, released in January 2018, identified artificial intelligence as one of the key technologies that will \"ensure [the United States] will be able to fight and win the wars of the future.\" ", "The U.S. military is already integrating AI systems into combat via a spearhead initiative called Project Maven, which uses AI algorithms to identify insurgent targets in Iraq and Syria. These dynamics raise several questions that Congress addressed in hearings during 2017 and 2018: What types of military AI applications are possible, and what limits, if any, should be imposed? What unique advantages and vulnerabilities come with employing AI for defense? How will AI change warfare, and what influence will it have on the military balance with U.S. competitors? Congress has a number of oversight, budgetary, and legislative tools available that it may use to influence the answers to these questions and shape the future development of AI technology."], "subsections": []}, {"section_title": "AI Terminology and Background5", "paragraphs": ["Almost all academic studies in artificial intelligence acknowledge that no commonly accepted definition of AI exists, in part because of the diverse approaches to research in the field. Likewise, although Section 238 of the FY2019 National Defense Authorization Act (NDAA) directs the Secretary of Defense to produce a definition of artificial intelligence by August 13, 2019, no official U.S. government definition of AI currently exists. The FY2019 NDAA does, however, provide a definition of AI for the purposes of Section 238: ", "Any artificial system that performs tasks under varying and unpredictable circumstances without significant human oversight, or that can learn from experience and improve performance when exposed to data sets.", "An artificial system developed in computer software, physical hardware, or other context that solves tasks requiring human-like perception, cognition, planning, learning, communication, or physical action.", "An artificial system designed to think or act like a human, including cognitive architectures and neural networks.", "A set of techniques, including machine learning that is designed to approximate a cognitive task.", "An artificial system designed to act rationally, including an intelligent software agent or embodied robot that achieves goals using perception, planning, reasoning, learning, communicating, decision-making, and acting.", "This definition encompasses many of the descriptions in Table 1 below, which summarizes various AI definitions in academic literature. ", "The field of AI research began in 1956, but an explosion of interest in AI began around 2010 due to the convergence of three enabling developments: (1) the availability of \"big data\" sources, (2) improvements to machine learning approaches, and (3) increases in computer processing power. This growth has advanced the state of Narrow AI, which refers to algorithms that address specific problem sets like game playing, image recognition, and navigation. All current AI systems fall into the Narrow AI category. The most prevalent approach to Narrow AI is machine learning, which involves statistical algorithms that replicate human cognitive tasks by deriving their own procedures through analysis of large training data sets. During the training process, the computer system creates its own statistical model to accomplish the specified task in situations it has not previously encountered. ", "Experts generally agree that it will be many decades before the field advances to develop General AI, which refers to systems capable of human-level intelligence across a broad range of tasks. Nevertheless, the growing power of Narrow AI algorithms has sparked a wave of commercial interest, with U.S. technology companies investing an estimated $20-$30 billion in 2016. Some studies estimate this amount will grow to as high as $126 billion by 2025. DOD's unclassified expenditures in AI contracts for FY2016 totaled just over $600 million, increasing to over $800 million in FY2017. ", "AI has a number of unique characteristics that may be important to consider as these technologies enter the national security arena. First, AI has the potential to be integrated across a variety of applications, improving the so-called \"Internet of Things\" in which disparate devices are networked together to optimize performance. As Kevin Kelley, the founder of Wired magazine, states, \"[AI] will enliven inert objects, much as electricity did more than a century ago. Everything that we formerly electrified we will now cognitize.\" Second, many AI applications are dual-use, meaning they have both military and civil applications. For example, image recognition algorithms can be trained to recognize cats in YouTube videos as well as terrorist activity in full motion video captured by uninhabited aerial vehicles over Syria or Afghanistan. Third, AI is relatively transparent, meaning that its integration into a product is not immediately recognizable. By and large, AI procurement will not result in countable objects. Rather, the algorithm will be purchased separately and incorporated into an existing system, or it will be part of a tangible system from inception, which may not be considered predominantly AI. An expert in the field points out, \"We will not buy AI. It will be used to solve problems, and there will be an expectation that AI will be infused in most things we do.\" "], "subsections": []}, {"section_title": "Issues for Congress", "paragraphs": ["A number of Members of Congress have called for action on military AI. During the opening comments to a January 2018 hearing before the House Armed Services Subcommittee on Emerging Threats, the subcommittee chair called for a \"national level effort\" to preserve a technological edge in the field of AI. Former Deputy Secretary of Defense Robert Work argued in a November 2017 interview that the federal government needs to address AI issues at the highest levels, further stating that \"this is not something the Pentagon can fix by itself.\" Other analysts have called for a national AI strategy to articulate AI objectives and drive whole-of-government initiatives and cross-cutting investments. ", "In the meantime, DOD has published a classified AI strategy and is carrying out multiple tasks directed by DOD guidance and the FY2019 NDAA, including", "establishing a Joint Artificial Intelligence Center (JAIC), which will \"coordinate the efforts of the Department to develop, mature, and transition artificial intelligence technologies into operational use\"; publishing a strategic roadmap for AI development and fielding, as well as guidance on \"appropriate ethical, legal, and other policies for the Department governing the development and use of artificial intelligence enabled systems and technologies in operational situations\"; establishing a National Security Commission on Artificial Intelligence; and conducting a comprehensive assessment of militarily relevant AI technologies and providing recommendations for strengthening U.S. competitiveness. ", "These initiatives will present a number of oversight opportunities for Congress. ", "In addition, Congress may consider the adequacy of current DOD funding levels for AI. Lieutenant General John Shanahan, the lead for the Pentagon's most prominent AI program, identified funding as a barrier to future progress, and a 2017 report by the Army Science Board states that funding is insufficient for the service to pursue disruptive technology like AI. Although DOD funding for AI has increased in 2018\u2014to include the JAIC's $1.75 billion six-year budget and the Defense Advanced Research Projects Agency's (DARPA's) $2 billion multiyear investment in over 20 AI programs\u2014some experts have argued that additional DOD funding will be required to keep pace with U.S. competitors and avoid an \"innovation deficit\" in military technology. ", "Critics of increased federal funding contend that significant increases to appropriations may not be required, as the military should be leveraging research and development (R&D) conducted in the commercial sector. The 2017 National Security Strategy identifies a need to \"establish strategic partnerships to align private sector R&D resources to priority national security applications\" and to reward government agencies that \"take risks and rapidly field emerging commercial technologies.\" In addition, the Office of Management and Budget directed DOD in preparing its FY2020 budget to \"seek to rapidly field innovative technologies from the private sector, where possible, that are easily adaptable to Federal needs, rather than reinventing solutions in parallel.\" Some experts in the national security community also argue that it would not be a responsible use of taxpayer money to duplicate efforts devoted to AI R&D in the commercial sector when companies take products 90% of the way to a useable military application. Others contend that a number of barriers stand in the way of transitioning AI commercial technology to DOD, and that reforming aspects of the defense acquisition process may be necessary. These issues are discussed in more detail later in this report. ", "One impediment to accurately evaluating funding levels for AI is the lack of a stand-alone AI Program Element (PE) in DOD funding tables. As a result, AI R&D appropriations are spread throughout generally titled PEs and incorporated into funding for larger systems with AI components. For example, in the FY2019 National Defense Authorization Act, AI funding is spread throughout the PEs for the High Performance Computing Modernization Program and Dominant Information Sciences and Methods, among others. On the other hand, a dedicated PE for AI may lead to a false precision, as it may be challenging to identify exact investments in enabling technologies like AI. The lack of an official U.S. government definition of AI could further complicate such an assessment. ", "Congress may also consider specific policies for the development and use of military AI applications. Many experts fear that the pace of AI technology development is moving faster than the speed of policy implementation. Former Chairman of the House Armed Services Committee Representative Mac Thornberry has echoed this sentiment, stating, \"It seems to me that we're always a lot better at developing technologies than we are the policies on how to use them.\" Congress may assess the need for new policies or modifications to existing laws to account for AI developments and ensure that AI applications are free from bias. Perhaps the most immediate policy concern among AI analysts is the absence of an independent entity to develop and enforce AI safety standards and to oversee government-wide AI research. Former Secretary of Defense Ashton B. Carter, for example, has suggested the need for an \"AI czar\" to coordinate such efforts. ", "Relatedly, Congress may consider debating policy options on the development and fielding of Lethal Autonomous Weapons Systems (LAWS), which may use AI to select and engage targets. Since 2014, the United States has participated in international discussions of LAWS at the United Nations (U.N.) Convention on Certain Conventional Weapons (CCW). Approximately 25 state parties have called for a treaty banning \"fully autonomous weapon systems\" due to ethical considerations, while others have called for formal regulations or political declarations. Some analysts are concerned that efforts to ban or regulate LAWS could impose strict controls on AI applications that could be adapted for lethal use, thereby stifling development of other useful military\u2014or even commercial\u2014technology. During recent testimony to the U.N., one expert stated, \"If we agree to foreswear some technology, we could end up giving up some uses of automation that could make war more humane. On the other hand a headlong rush into a future of increasing autonomy with no discussion of where it is taking us, is not in humanity's interest either.\" He suggested the leading question for considering military AI applications ought to be, \"What role do we want humans to play in wartime decision making?\" ", "Congress may consider the growth of international competition in the AI market and the danger of foreign exploitation of U.S. AI technology for military purposes. In particular, the Chinese government is reported to be aggressively pursuing AI investments in the United States. Amid growing scrutiny of transactions involving Chinese firms in the semiconductor industry, in September 2017 President Trump, following the recommendation of the Committee on Foreign Investment in the United States (CFIUS), blocked a Chinese firm from acquiring Lattice Semiconductor, a U.S. company that manufactures chips that are a critical design element for AI technology. In this way, some experts believe that CFIUS may provide a means of protecting strategically significant technologies like AI. Indeed, the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) expands CFIUS's ability to review certain foreign investments, including those involving \"emerging and foundational technologies.\" It also authorized CFIUS to consider \"whether a covered transaction involves a country of special concern that has a demonstrated or declared strategic goal of acquiring a type of critical technology or critical infrastructure that would affect United States leadership in areas related to national security.\" Congress may monitor the implementation of FIRRMA and assess whether additional reforms might be necessary to maintain effective congressional oversight of sensitive transactions. ", "In addition, many analysts believe that it may be necessary to reform federal data policies associated with AI. Large data pools serve as the training sets needed for building many AI systems, and government data may be particularly important in developing military AI applications. However, some analysts have observed that much of this data is either classified, access-controlled, or otherwise protected on privacy grounds. These analysts contend that Congress should implement a new data policy that balances data protection and privacy with the need to fuel AI development. ", "Closely related, AI development may increase the imperative for strict security standards. As discussed later in this report, AI algorithms are vulnerable to bias, theft, and manipulation, particularly if the training data set is not adequately curated or protected. During a February 2018 conference with defense industry CEOs, Deputy Defense Secretary Patrick Shanahan advocated for higher cybersecurity standards in the commercial sector, stating, \"[W]e want the bar to be so high that it becomes a condition of doing business.\" Some leading commercial technology companies have issued similar calls for increased scrutiny, with Microsoft's president Brad Smith arguing that a lack of regulation in this area could lead to \"a commercial race to the bottom, with tech companies forced to choose between social responsibility and market success.\" ", "Finally, commercial companies have long cited the potential loss of intellectual property rights as a key impediment to partnering with DOD. In recognition of this issue, Section 813 of the FY2016 NDAA established a \"government-industry advisory panel\" to provide recommendations on technical data rights and intellectual property reform. The panel's report, released in November 2018, offers a number of recommendations, including increased training in intellectual property rights for acquisitions professionals and a pilot program for intellectual property valuation in the procurement process."], "subsections": []}, {"section_title": "AI Applications for Defense", "paragraphs": ["DOD is considering a number of diverse applications for AI. Currently, AI R&D is being left to the discretion of research organizations in the individual services, as well as to DARPA and the Intelligence Advanced Research Projects Agency (IARPA). However, DOD components are currently required to coordinate with the JAIC regarding any planned AI initiatives costing more than $15 million annually. In addition, the JAIC has been tasked with overseeing the National Mission Initiatives, projects that will leverage AI to address pressing operational challenges. The Office of the Under Secretary of Defense for Research and Engineering, which oversaw the development of DOD's AI Strategy, will continue to support AI development and delivery.", "The Algorithmic Warfare Cross-Functional Team, also known as Project Maven, has previously been a focal point for DOD AI integration and will transition from the Under Secretary of Defense for Intelligence to the JAIC, where it will become the first of the JAIC's National Mission Initiatives. Project Maven was launched in April 2017 and charged with rapidly incorporating AI into existing DOD systems to demonstrate the technology's potential. Project Maven's inaugural director stated, \"Maven is designed to be that pilot project, that pathfinder, that spark that kindles the flame for artificial intelligence across the department.\" AI is also being incorporated into a number of other intelligence, surveillance, and reconnaissance applications, as well as in logistics, cyberspace operations, information operations, command and control, semiautonomous and autonomous vehicles, and lethal autonomous weapon systems."], "subsections": [{"section_title": "Intelligence, Surveillance, and Reconnaissance", "paragraphs": ["AI is expected to be particularly useful in intelligence due to the large data sets available for analysis. For example, Project Maven's first phase involves automating intelligence processing in support of the counter-ISIL campaign. Specifically, the Project Maven team is incorporating computer vision and machine learning algorithms into intelligence collection cells that would comb through footage from uninhabited aerial vehicles and automatically identify hostile activity for targeting. In this capacity, AI is intended to automate the work of human analysts who currently spend hours sifting through videos for actionable information, potentially freeing analysts to make more efficient and timely decisions based on the data. ", "The intelligence community also has a number of publicly acknowledged AI research projects in progress. The Central Intelligence Agency alone has around 140 projects in development that leverage AI in some capacity to accomplish tasks such as image recognition and predictive analytics. IARPA is sponsoring several AI research projects intended to produce other analytic tools within the next four to five years. Some examples include developing algorithms for multilingual speech recognition and translation in noisy environments, geo-locating images without the associated metadata, fusing 2-D images to create 3-D models, and building tools to infer a building's function based on pattern-of-life analysis."], "subsections": []}, {"section_title": "Logistics", "paragraphs": ["AI may have a promising future in the field of military logistics. The Air Force, for example, is beginning to use AI for predictive aircraft maintenance. Instead of making repairs when an aircraft breaks or in accordance with monolithic fleet-wide maintenance schedules, the Air Force is testing an AI-enabled approach that tailors maintenance schedules to the needs of individual aircraft. This approach, currently used by the F-35's Automated Logistics Information System, extracts real-time sensor data embedded in the aircraft's engines and other onboard systems and feeds the data into a predictive algorithm to determine when technicians need to inspect the aircraft or replace parts. ", "Similarly, the Army's Logistics Support Activity (LOGSA) has contracted IBM's Watson (the same AI software that defeated two Jeopardy champions) to develop tailored maintenance schedules for the Stryker fleet based on information pulled from the 17 sensors installed on each vehicle. In September 2017, LOGSA began a second project that will use Watson to analyze shipping flows for repair parts distribution, attempting to determine the most time- and cost-efficient means to deliver supplies. This task is currently done by human analysts, who have saved the Army around $100 million a year by analyzing just 10% of shipping requests; with Watson, the Army will have the ability to analyze 100% of shipping requests, potentially generating even greater cost savings in a shorter period of time. "], "subsections": []}, {"section_title": "Cyberspace Operations", "paragraphs": ["AI is likely to be a key technology in advancing military cyber operations. In his 2016 testimony before the Senate Armed Services Committee, Commander of U.S. Cyber Command Admiral Michael Rogers stated that relying on human intelligence alone in cyberspace is \"a losing strategy.\" He later clarified this point, stating, \"If you can't get some level of AI or machine learning with the volume of activity you're trying to understand when you're defending networks ... you are always behind the power curve.\" Conventional cybersecurity tools look for historical matches to known malicious code, so hackers only have to modify small portions of that code to circumvent the defense. AI-enabled tools, on the other hand, can be trained to detect anomalies in broader patterns of network activity, thus presenting a more comprehensive and dynamic barrier to attack. ", "DARPA's 2016 Cyber Grand Challenge demonstrated the potential power of AI-enabled cyber tools. The competition challenged participants to develop AI algorithms that could autonomously \"detect, evaluate, and patch software vulnerabilities before [competing teams] have a chance to exploit them\"\u2014all within a matter of seconds, rather than the usual months. The challenge demonstrated not only the potential speed of AI-enabled cyber tools but also the potential ability of a singular algorithm to play offense and defense simultaneously. These capabilities could provide a distinct advantage in future cyber operations. "], "subsections": []}, {"section_title": "Information Operations and \"Deep Fakes\"66", "paragraphs": ["AI is enabling increasingly realistic photo, audio, and video forgeries, or \"deep fakes,\" that adversaries could deploy as part of their information operations. Indeed, deep fake technology could be used against the United States and U.S. allies to generate false news reports, influence public discourse, erode public trust, and attempt to blackmail diplomats. Although most previous deep fakes have been detectable by experts, the sophistication of the technology is progressing to the point that it may soon be capable of fooling forensic analysis tools. ", "In order to combat deep fake technologies, DARPA has launched the Media Forensics (MediFor) project, which seeks to \"automatically detect manipulations, provide detailed information about how these manipulations were performed, and reason about the overall integrity of visual media.\" MediFor has developed some initial tools for identifying AI-produced forgeries, but as one analyst has noted, \"a key problem \u2026 is that machine-learning systems can be trained to outmaneuver forensics tools.\" For this reason, DARPA plans to host follow-on contests to ensure that forensic tools keep pace with deep fake technologies.", "Artificial intelligence could also be used to create full \"digital patterns-of-life,\" in which an individual's digital \"footprint\" is \"merged and matched with purchase histories, credit reports, professional resumes, and subscriptions\" to create a comprehensive behavioral profile of servicemembers, suspected intelligence officers, government officials, or private citizens. As in the case of deep fakes, this information could, in turn, be used for targeted influence operations or blackmail. "], "subsections": []}, {"section_title": "Command and Control", "paragraphs": ["The U.S. military is seeking to exploit AI's analytic potential in the area of command and control. The Air Force is developing a system for Multi-Domain Command and Control (MDC2), which aims to centralize planning and execution of air-, space-, cyberspace-, sea-, and land-based operations. In the immediate future, AI may be used to fuse data from sensors in all of these domains to create a single source of information, also known as a \"common operating picture,\" for decisionmakers. Currently, information available to decisionmakers comes in diverse formats from multiple platforms, often with redundancies or unresolved discrepancies. An AI-enabled common operating picture would theoretically combine this information into one display, providing a comprehensive picture of friendly and enemy forces, and automatically resolving variances from input data. Although MDC2 is still in a concept development phase, the Air Force is working with Lockheed Martin, Harris, and several AI start-ups to develop such a data fusion capability. A series of war-games in 2018 sought to refine requirements for this project. Similarly, DARPA's Mosaic Warfare program seeks to leverage AI to coordinate autonomous forces and dynamically generate multidomain command and control nodes. ", "Future AI systems may be used to identify communications links cut by an adversary and find alternative means of distributing information. As the complexity of AI systems matures, AI algorithms may also be capable of providing commanders with a menu of viable courses of action based on real-time analysis of the battle-space, in turn enabling faster adaptation to complex events. In the long run, many analysts believe this area of AI development could be particularly consequential, with the potential to improve the quality of and accelerate wartime decisionmaking."], "subsections": []}, {"section_title": "Semiautonomous and Autonomous Vehicles", "paragraphs": ["All U.S. military services are working to incorporate AI into semiautonomous and autonomous vehicles, including fighter aircraft, drones, ground vehicles, and naval vessels. AI applications in this field are similar to commercial semiautonomous vehicles, which use AI technologies to perceive the environment, recognize obstacles, fuse sensor data, plan navigation, and even communicate with other vehicles. ", "The Air Force Research Lab completed phase-two tests of its Loyal Wingman program, which pairs an older-generation, uninhabited fighter jet (in this case, an F-16) with an inhabited F-35 or F-22. During this event, the uninhabited F-16 test platform autonomously reacted to events that were not preprogrammed, such as weather and unforeseen obstacles. As the program progresses, AI may enable the \"loyal wingman\" to accomplish tasks for its inhabited flight lead, such as jamming electronic threats or carrying extra weapons. ", "The Army and the Marine Corps tested prototypes of similar vehicles that follow soldiers or vehicles around the battlefield to accomplish independent tasks. For example, the Marine Corps' Multi-Utility Tactical Transport (MUTT) is a remote-controlled, ATV-sized vehicle capable of carrying hundreds of pounds of extra equipment. Although the system is not autonomous in its current configuration, the Marine Corps intends for follow-on systems to have greater independence. Likewise, the Army plans to field a number of Robotic Combat Vehicles (RCVs) with different types of autonomous functionality, including navigation, surveillance, and IED removal. These systems will be deployed as \"wingmen\" for the optionally inhabited Next Generation Ground Vehicle, tentatively scheduled for initial soldier evaluations in FY2020. ", "DARPA completed testing of the Anti-Submarine Warfare Continuous Trail Unmanned Vessel prototype, or \"Sea Hunter,\" in early 2018 before transitioning program development to the Office of Naval Research. If Sea Hunter enters into service, it would provide the Navy with the ability to autonomously navigate the open seas, swap out modular payloads, and coordinate missions with other unmanned vessels\u2014all while providing continuous submarine-hunting coverage for months at a time. Some analysts estimate that Sea Hunter would cost around $20,000 a day to operate, in contrast to around $700,000 for a traditionally inhabited destroyer. ", "DOD is testing other AI-fueled capabilities to enable cooperative behavior, or swarming . Swarming is a unique subset of autonomous vehicle development, with concepts ranging from large formations of low-cost vehicles designed to overwhelm defensive systems to small squadrons of vehicles that collaborate to provide electronic attack, fire support, and localized navigation and communication nets for ground-troop formations. A number of different swarm capabilities are currently under development. For example, in November 2016, the Navy completed a test of an AI-enabled swarm of five unmanned boats that cooperative ly patrolled a 4-by-4-mile section of the Chesapeake Bay and intercepted an \"intruder\" vessel. The results of this experiment may lead to AI technology adapted for defending harbors, hunting submarines, or scouting in front of a formation of larger ships. The Navy also plans to test swarms of underwater drones, and the Strategic Capabilities Office has successfully tested a swarm of 103 air-dropped micro-drones. "], "subsections": []}, {"section_title": "Lethal Autonomous Weapon Systems (LAWS)", "paragraphs": ["Lethal Autonomous Weapon Systems (LAWS) are a special class of weapon systems capable of independently identifying a target and employing an onboard weapon system to engage and destroy it with no human interaction. LAWS require a computer vision system and advanced machine learning algorithms to classify an object as hostile, make an engagement decision, and guide a weapon to the target. This capability enables the system to operate in communications-degraded or -denied environments where traditional systems may not be able to operate. The U.S. military does not currently have LAWS in its inventory, although there are no legal prohibitions on the development of LAWS.", "DOD Directive 3000.09, \"Autonomy in Weapon Systems,\" outlines department policies for semiautonomous and autonomous weapon systems. The directive requires that all systems, regardless of classification, be designed to \"allow commanders and operators to exercise appropriate levels of human judgment over the use of force\" and to successfully complete the department's weapons review process. Any changes to the system's operating state require that the system go through the weapons review process again to ensure that it has retained the ability to operate as intended. Autonomous weapons and a limited type of semiautonomous weapons must additionally be approved before both development and fielding by the Under Secretary of Defense for Policy; the Under Secretary of Defense for Acquisition, Technology, and Logistics; and the Chairman of the Joint Chiefs of Staff. Human-supervised autonomous weapons used for point defense of manned installations or platforms\u2014but that do not target humans\u2014and autonomous weapons that \"apply non-lethal, non-kinetic force, such as some forms of electronic attack, against materiel targets\" are exempted from this senior-level review.", "Despite this policy, some senior military and defense leaders have expressed concerns about the prospect of fielding LAWS. For example, in 2017 testimony before the Senate Armed Services Committee, Vice Chairman of the Joint Chiefs of Staff General Paul Selva stated, \"I do not think it is reasonable for us to put robots in charge of whether or not we take a human life.\" Regardless, Selva explained that the military will be compelled to address the development of this class of technology in order to find its vulnerabilities, given the fact that potential U.S. adversaries are pursuing LAWS. "], "subsections": []}]}, {"section_title": "Military AI Integration Challenges", "paragraphs": ["From the Cold War era until recently, most major defense-related technologies, including nuclear technology, the Global Positioning System (GPS), and the internet, were first developed by government-directed programs before later spreading to the commercial sector. Indeed, DARPA's Strategic Computing Initiative invested over $1 billion between 1983 and 1993 to develop the field of artificial intelligence for military applications, but the initiative was ultimately cancelled due to slower-than-anticipated progress. Today, commercial companies\u2014sometimes building on past government-funded research\u2014are leading AI development, with DOD later adapting their tools for military applications. Noting this dynamic, one AI expert commented, \"It is unusual to have a technology that is so strategically important being developed commercially by a relatively small number of companies.\" In addition to the shift in funding sources, a number of challenges related to technology, process, personnel, and culture continue to impede the adoption of AI for military purposes. "], "subsections": [{"section_title": "Technology", "paragraphs": ["A wide variance exists in the ease of adaptability of commercial AI technology for military purposes. In some cases, the transition is relatively seamless. For example, the aforementioned aircraft maintenance algorithms, many of which were initially developed by the commercial sector, will likely require only minor data adjustments to account for differences between aircraft types. In other circumstances, significant adjustments are required due to the differences between the structured civilian environments for which the technology was initially developed and more complex combat environments. For example, commercial semiautonomous vehicles have largely been developed in and for data-rich environments with reliable GPS positions, comprehensive terrain mapping, and up-to-date information on traffic and weather conditions obtained from other networked vehicles. In contrast, the military variant of such a vehicle would need to be able to operate in locations where map data are comparatively poor and in which GPS positioning may be inoperable due to adversary jamming. Moreover, semiautonomous or autonomous military ground vehicles would likely need the ability to navigate off-road in rough terrain\u2014a capability not inherent in most commercial vehicles. "], "subsections": []}, {"section_title": "Process", "paragraphs": ["Standing DOD processes\u2014including those related to standards of safety and performance, acquisitions, and intellectual property and data rights\u2014present another challenge to the integration of military AI. Often, civilian and military standards of safety and performance are either not aligned or are not easily transferable. A failure rate deemed acceptable for a civilian AI application may be well outside of tolerances in a combat environment\u2014or vice versa. In addition, a recent research study concluded that unpredictable AI failure modes will be exacerbated in complex environments, such as those found in combat. Collectively, these factors may create another barrier for the smooth transfer of commercially developed AI technology to DOD. ", "DOD may need to adjust its acquisitions process to account for rapidly evolving technologies such as AI. A 2017 internal study of the process found that it takes an average of 91 months to move from the initial Analysis of Alternatives, defining the requirements for a system, to an Initial Operational Capability. In contrast, commercial companies typically execute an iterative development process for software systems like AI, delivering a product in six to nine months. A Government Accountability Office (GAO) study of this issue surveyed 12 U.S. commercial companies who choose not to do business with DOD, and all 12 cited the complexity of the defense acquisition process as a rationale for their decision. ", "As a first step in addressing this, DOD has created a number of avenues for \"rapid-acquisitions,\" including the Strategic Capabilities Office, the Defense Innovation Unit, and Project Maven, in order to accelerate the acquisitions timeline and streamline cumbersome processes. Project Maven, for example, was established in April 2017; by December, the team was fielding a commercially acquired prototype AI system in combat. Although some analysts argue that these are promising developments, critics point out that the department must replicate the results achieved by Project Maven at scale and implement more comprehensive acquisitions reform.", "Commercial technology companies are also often reluctant to partner with DOD due to concerns about intellectual property and data rights. As an official interviewed for a 2017 GAO report on broader challenges in military acquisitions noted, intellectual property is the \"life blood\" of commercial technology companies, yet \"DOD is putting increased pressure on companies to grant unlimited technical data and software rights or government purpose rights rather than limited or restricted rights.\" "], "subsections": []}, {"section_title": "Personnel", "paragraphs": ["Some reports indicate that DOD and the defense industry also face challenges when it comes to recruiting and retaining personnel with expertise in AI due to research funding and salaries that significantly lag behind those of commercial companies. Other reports suggest that such challenges stem from quality-of-life factors, as well as from a belief among many technology workers that \"they can achieve large-scale change faster and better outside the government than within it.\" Regardless, observers note that if DOD and defense industry are unable to recruit and retain the appropriate experts, military AI applications could be delayed, \"deficient, or lacking in appropriate safeguards and testing.\" ", "To address these challenges, the Obama Administration launched the Defense Digital Service in 2015 as a means of recruiting private sector technology workers to serve in DOD for one to two year assignments\u2014a \"tour of duty for nerds,\" according to director Chris Lynch. Similarly, former Deputy Secretary of Defense Bob Work has proposed an \"AI Training Corps,\" in which DOD \"would pay for advanced technical education in exchange for two days a month of training with government systems and two weeks a year for major exercises.\" Participants in the program could additionally be called to government service in the event of a national emergency. Other analysts have recommended the establishment of new military training and occupational specialties to cultivate AI talent, as well as the creation of government fellowships and accelerated promotion tracks to reward the most talented technology workers. "], "subsections": []}, {"section_title": "Culture", "paragraphs": ["An apparent cultural divide between DOD and commercial technology companies may also present challenges for AI adoption. A recent survey of leadership in several top Silicon Valley companies found that nearly 80% of participants rated the commercial technology community's relationship with DOD as poor or very poor. This was due to a number of factors, including process challenges, perceptions of mutual distrust, and differences between DOD and commercial incentive structures. ", "Moreover, some companies are refusing to work with DOD due to ethical concerns over the government's use of AI in surveillance or weapon systems. Notably, Google canceled existing government contracts for two robotics companies it acquired\u2014Boston Dynamics and Schaft\u2014and prohibited future government work for DeepMind, a Google-acquired AI software startup. In May 2018, Google employees successfully lobbied the company to withdraw from Project Maven and refrain from further collaboration with DOD. Other companies, however, have pledged to continue supporting DOD contracts, with Amazon CEO Jeff Bezos noting that \"if big tech companies are going to turn their back on the U.S. Department of Defense, this country is going to be in trouble.\" ", "Cultural factors within the defense establishment itself may also impede AI integration. The integration of AI into existing systems alters standardized procedures and upends well-defined personnel roles. Members of Project Maven have reported a resistance to AI integration because integration can be disruptive without always providing an immediately recognizable benefit. Deputy Director for CIA technology development Dawn Meyerriecks has also expressed concern about the willingness of senior leaders to accept AI-generated analysis, arguing that the defense establishment's risk-averse culture may pose greater challenges to future competitiveness than the pace of adversary technology development. ", "Finally, some analysts are concerned that DOD will not capitalize on AI's potential to produce game-changing warfighting benefits and will instead simply use AI to incrementally improve existing processes or reinforce current operational concepts. Furthermore, the services may reject certain AI applications altogether if the technology threatens service-favored hardware or missions. Members of Congress may explore the complex interaction of these factors as DOD moves beyond the initial stages of AI adoption. "], "subsections": []}]}, {"section_title": "International Competitors", "paragraphs": ["As military applications for AI grow in scale and complexity, many in Congress and the defense community are becoming increasingly concerned about international competition. In his opening comments at \"The Dawn of AI\" hearing before the Senate Subcommittee on Space, Science, and Competitiveness, Senator Ted Cruz stated, \"Ceding leadership in developing artificial intelligence to China, Russia, and other foreign governments will not only place the United States at a technological disadvantage, but it could have grave implications for national security.\" ", "Since at least 2016, AI has been consistently identified as an \"emerging and disruptive technology\" at the Senate Select Intelligence Committee's annual hearing on the \"Worldwide Threat Assessment.\" In his written testimony for the 2017 hearing, Director of National Intelligence Daniel Coates asserted, \"The implications of our adversaries' abilities to use AI are potentially profound and broad. They include an increased vulnerability to cyberattack, difficulty in ascertaining attribution, facilitation of advances in foreign weapon and intelligence systems, the risk of accidents and related liability issues, and unemployment.\" Consequently, it may be important for Congress to understand the state of rival AI development\u2014particularly because U.S. competitors may have fewer moral, legal, or ethical qualms about developing military AI applications."], "subsections": [{"section_title": "China", "paragraphs": ["China is by far the United States' most ambitious competitor in the international AI market. China's 2017 \"Next Generation AI Development Plan\" describes AI as a \"strategic technology\" that has become a \"focus of international competition.\" According to the document, China will seek to develop a core AI industry worth over 150 billion RMB \u2014or approximately $21.7 billion\u2014by 2020 and will \"firmly seize the strategic initiative\" and reach \"world leading levels\" of AI investment by 2030. ", "Recent Chinese achievements in the field demonstrate China's potential to realize its goals for AI development. In 2015, China's leading AI company, Baidu, created AI software capable of surpassing human levels of language recognition, almost a year in advance of Microsoft, the nearest U.S. competitor. In 2016 and 2017, Chinese teams won the top prize at the Large Scale Visual Recognition Challenge, an international competition for computer vision systems. Many of these systems are now being integrated into China's domestic surveillance network and social credit system, which aims to monitor and, based on social behavior, \"grade\" every Chinese citizen by 2021. ", "China is researching various types of air, land, sea, and undersea autonomous vehicles. In the spring of 2017, a civilian Chinese university with ties to the military demonstrated an AI-enabled swarm of 1,000 uninhabited aerial vehicles at an airshow. A media report released after the fact showed a computer simulation of a similar swarm formation finding and destroying a missile launcher. Open-source publications indicate that the Chinese are developing a suite of AI tools for cyber operations. ", "Chinese development of military AI is influenced in large part by China's observation of U.S. plans for defense innovation and fears of a widening \"generational gap\" in comparison to the U.S. military. Similar to U.S. military concepts, the Chinese aim to use AI for exploiting large troves of intelligence, generating a common operating picture, and accelerating battlefield decisionmaking. The close parallels between U.S. and Chinese AI development have some DOD leaders concerned about the prospects for retaining conventional U.S. military superiority as envisioned in current defense innovation guidance. ", "Analysts do, however, point to a number of differences that may influence the success of military AI adoption in China. Significantly, unlike the United States, China has not been involved in active combat for several decades. While on the surface this may seem like a weakness, some argue that it may be an advantage, enabling the Chinese to develop more innovative concepts of operation. On the other hand, Chinese military culture, which is dominated by centralized command authority and mistrust of subordinates, may prove resistant to the adoption of autonomous systems or the integration of AI-generated decisionmaking tools. ", "China's management of its AI ecosystem stands in stark contrast to that of the United States. In general, few boundaries exist between Chinese commercial companies, university research laboratories, the military, and the central government. As a result, the Chinese government has a direct means of guiding AI development priorities and accessing technology that was ostensibly developed for civilian purposes. To further strengthen these ties, the Chinese government created a Military-Civil Fusion Development Commission in 2017, which is intended to speed the transfer of AI technology from commercial companies and research institutions to the military. In addition, the Chinese government is leveraging both lower barriers to data collection and lower costs to data labeling to create the large databases on which AI systems train. According to one estimate, China is on track to possess 20% of the world's share of data by 2020, with the potential to have over 30% by 2030. ", "China's centrally directed effort is fueling speculation in the U.S. AI market, where China is investing in companies working on militarily relevant AI applications\u2014potentially granting it lawful access to U.S. technology and intellectual property. Figure 2 depicts Chinese venture capital investment in U.S. AI companies between 2010 and 2017, totaling an estimated $1.3 billion. The CFIUS reforms introduced in FIRRMA are intended to provide increased oversight of such investments to ensure that they do not threaten national security or grant U.S. competitors undue access to critical technologies. ", "Even with these reforms, however, China may likely gain access to U.S. commercial developments in AI given its extensive history of industrial espionage and cyber theft. Indeed, China has reportedly stolen design plans in the past for a number of advanced military technologies and continues to do so despite the 2015 U.S.-China Cyber Agreement, in which both sides agreed that \"neither country's government will conduct or knowingly support cyber-enabled theft of intellectual property.\"", "While most analysts view China's unified, whole-of-government effort to develop AI as having a distinct advantage over the United States' AI efforts, many contend that it does have shortcomings. For example, some analysts characterize the Chinese government's funding management as inefficient. They point out that the system is often corrupt, with favored research institutions receiving a disproportionate share of government funding, and that the government has a potential to overinvest in projects that produce surpluses that exceed market demand. ", "In addition, China faces challenges in recruiting and retaining AI engineers and researchers. Over half of the data scientists in the United States have been working in the field for over 10 years, while roughly the same proportion of data scientists in China have less than 5 years of experience. Furthermore, fewer than 30 Chinese universities produce AI-focused experts and research products. Although China surpassed the United States in the quantity of research papers produced from 2011 to 2015, the quality of its published papers, as judged by peer citations, ranked 34 th globally. China is, however, making efforts to address these deficiencies, with a particular focus on the development of military AI applications. Indeed, the Beijing Institute of Technology\u2014one of China's premier institutes for weapons research\u2014recently established the first educational program in military AI in the world. ", "Some experts believe that China's intent to be the first to develop military AI applications may result in comparatively less safe applications, as China will likely be more risk-acceptant throughout the development process. These experts stated that it would be unethical for the U.S. military to sacrifice safety standards for the sake of external time pressures, but that the United States' more conservative approach to AI development may result in more capable systems in the long run. "], "subsections": []}, {"section_title": "Russia", "paragraphs": ["Like China, Russia is actively pursuing military AI applications. At present, Russian AI development lags significantly behind that of the United States and China. In 2017, the Russian AI market had an estimated value of $12 million and, in 2018, the country ranked 20 th in the world by number of AI startups. However, Russia is initiating plans to close the gap. As part of this effort, Russia will continue to pursue its 2008 defense modernization agenda, with the aim of robotizing 30% of its military equipment by 2025. ", "Russia is establishing a number of organizations devoted to the development of military AI. In March 2018, the Russian government released a 10-point AI agenda, which calls for the establishment of an AI and Big Data consortium, a Fund for Analytical Algorithms and Programs, a state-backed AI training and education program, a dedicated AI lab, and a National Center for Artificial Intelligence, among other initiatives. In addition, Russia recently created a defense research organization, roughly equivalent to DARPA, dedicated to autonomy and robotics called the Foundation for Advanced Studies, and initiated an annual conference on \"Robotization of the Armed Forces of the Russian Federation.\" Some analysts have noted that this recent proliferation of research institutions devoted to AI may, however, result in overlapping responsibilities and bureaucratic inertia, hindering AI development rather than accelerating it. ", "The Russian military has been researching a number of AI applications, with a heavy emphasis on semiautonomous and autonomous vehicles. In an official statement on November 1, 2017, Viktor Bondarev, chairman of the Federation Council's Defense and Security Committee, stated that \"artificial intelligence will be able to replace a soldier on the battlefield and a pilot in an aircraft cockpit\" and later noted that \"the day is nearing when vehicles will get artificial intelligence.\" Bondarev made these remarks in close proximity to the successful test of Nerehta, an uninhabited Russian ground vehicle that reportedly \"outperformed existing [inhabited] combat vehicles.\" Russia plans to use Nerehta as a research and development platform for AI and may one day deploy the system in combat, intelligence gathering, or logistics roles. Russia has also reportedly built a combat module for uninhabited ground vehicles that is capable of autonomous target identification\u2014and, potentially, target engagement\u2014and plans to develop a suite of AI-enabled autonomous systems. ", "In addition, the Russian military plans to incorporate AI into uninhabited aerial, naval, and undersea vehicles and is currently developing swarming capabilities. It is also exploring innovative uses of AI for electronic warfare, including adaptive frequency hopping, waveforms, and countermeasures. Finally, Russia has made extensive use of AI technologies for domestic propaganda and surveillance, as well as for information operations directed against the United States and U.S. allies, and can be expected to continue to do so in the future.", "Despite Russia's aspirations, analysts argue that it may be difficult for Russia to make significant progress in AI development. In 2017, Russian military spending dropped by 20% in constant dollars, with subsequent cuts forecast in both 2018 and 2019. In addition, many analysts note that Russian academics have produced few research papers on AI and that the Russian technology industry has yet to produce AI applications that are on par with those produced by the United States and China. Others analysts counter that such factors may be irrelevant, arguing that while Russia has never been a leader in internet technology, it has still managed to become a notably disruptive force in cyberspace. "], "subsections": []}]}, {"section_title": "International Institutions", "paragraphs": ["A number of international institutions have examined issues surrounding AI, including the Group of Seven (G7), the Organisation for Economic Co-operation and Development (OECD), and the Asia-Pacific Economic Cooperation (APEC). The U.N. CCW, however, has made the most concerted effort to consider certain military applications of AI, with a particular focus on LAWS. In general, the CCW is charged with \"banning or restricting the use of specific types of weapons that are considered to cause unnecessary or unjustifiable suffering to combatants or to affect civilian populations\" and has previously debated weapons such as mines, cluster munitions, and blinding lasers. The CCW began discussions on LAWS in 2014 with informal annual \"Meetings of Experts.\" In parallel, the International Committee of the Red Cross (ICRC) held similar gatherings of interdisciplinary experts on LAWS that produced reports for the CCW on technical, legal, moral, and humanitarian issues. During the CCW's April 2016 meeting, state parties agreed to establish a formal Group of Governmental Experts (GGE), with an official mandate to \"assess questions related to emerging technologies in the area of LAWS.\" Although the GGE has now convened three times, it has not produced an official definition of LAWS or issued official guidance for their development or use. As a result, one U.S. participant cautioned that the international community is in danger of \"the pace of diplomacy falling behind the speed of technological advancement.\" "], "subsections": []}, {"section_title": "AI Opportunities and Challenges", "paragraphs": ["AI poses a number of unique opportunities and challenges within a national security context. However, its ultimate impact will likely be determined by the extent to which developers, with the assistance of policymakers, are able to maximize its strengths while identifying options to limit its vulnerabilities."], "subsections": [{"section_title": "Autonomy", "paragraphs": ["Many autonomous systems incorporate AI in some form. Such systems were a central focus of the Obama Administration's \"Third Offset Strategy,\" a framework for preserving the U.S. military's technological edge against global competitors. Depending on the task, autonomous systems are capable of augmenting or replacing humans, freeing them up for more complex and cognitively demanding work. In general, experts assert that the military stands to gain significant benefits from autonomous systems by replacing humans in tasks that are \"dull, dangerous, or dirty.\" Specific examples of autonomy in military systems include systems that conduct long-duration intelligence collection and analysis, clean up environments contaminated by chemical weapons, or sweep routes for improvised explosive devices. In these roles, autonomous systems may reduce risk to warfighters and cut costs, providing a range of value to DOD missions, as illustrated in Figure 3 . Some analysts argue these advantages create a \"tactical and strategic necessity\" as well as a \"moral obligation\" to develop autonomous systems."], "subsections": []}, {"section_title": "Speed and Endurance", "paragraphs": ["AI introduces a unique means of operating in combat at the extremes of the time scale. It provides systems with an ability to react at gigahertz speed, which in turn holds the potential to dramatically accelerate the overall pace of combat. As discussed below, some analysts contend that a drastic increase in the pace of combat could be destabilizing\u2014particularly if it exceeds human ability to understand and control events\u2014and could increase a system's destructive potential in the event of a loss of system control. Despite this risk, some argue that speed will confer a definitive warfighting advantage, in turn creating pressures for widespread adoption of military AI applications. In addition, AI systems may provide benefits in long-duration tasks that exceed human endurance. For example, AI systems may enable intelligence gathering across large areas over long periods of time, as well as the ability to autonomously detect anomalies and categorize behavior. "], "subsections": []}, {"section_title": "Scaling", "paragraphs": ["AI has the potential to provide a force-multiplying effect by enhancing human capabilities and infusing less expensive military systems with increased capability. For example, although an individual low-cost drone may be powerless against a high-tech system like the F-35 stealth fighter, a swarm of such drones could potentially overwhelm high-tech systems, generating significant cost-savings and potentially rendering some current platforms obsolete. AI systems could also increase the productivity of individual servicemembers as the systems take over routine tasks or enable tactics like swarming that require minimal human involvement. ", "Finally, some analysts caution that the proliferation of AI systems may decouple military power from population size and economic strength. This decoupling may enable smaller countries and nonstate actors to have a disproportionately large impact on the battlefield if they are able to capitalize on the scaling effects of AI. "], "subsections": []}, {"section_title": "Information Superiority", "paragraphs": ["AI may offer a means to cope with an exponential increase in the amount of data available for analysis. According to one DOD source, the military operates over 11,000 drones, with each one recording \"more than three NFL seasons worth\" of high-definition footage each day. However, the department does not have sufficient people or an adequate system to comb through the data in order to derive actionable intelligence analysis. ", "This issue will likely be exacerbated in the future as data continue to accumulate. According to one study, by 2020 every human on the planet will generate 1.7 megabytes of information every second, growing the global pool of data from 4.4 zettabytes today to almost 44.0 zettabytes. AI-powered intelligence systems may provide the ability to integrate and sort through large troves of data from different sources and geographic locations to identify patterns and highlight useful information, significantly improving intelligence analysis. In addition, AI algorithms may generate their own data to feed further analysis, accomplishing tasks like converting unstructured information from polls, financial data, and election results into written reports. AI tools of this type thus hold the potential to bestow a warfighting advantage by improving the quality of information available to decisionmakers. "], "subsections": []}, {"section_title": "Predictability", "paragraphs": ["AI algorithms often produce unpredictable and unconventional results. In March 2016, the AI company DeepMind created a game-playing algorithm called AlphaGo, which defeated a world-champion Go player, Lee Sedol, four games to one. After the match, Sedol commented that AlphaGo made surprising and innovative moves, and other expert Go players subsequently stated that AlphaGo overturned accumulated wisdom on game play. AI's capacity to produce similarly unconventional results in a military context may provide an advantage in combat, particularly if those results surprise an adversary. ", "However, AI systems can fail in unexpected ways, with some analysts characterizing their behavior as \"brittle and inflexible.\" Dr. Arati Prabhakar, the former DARPA Director, commented, \"When we look at what's happening with AI, we see something that is very powerful, but we also see a technology that is still quite fundamentally limited ... the problem is that when it's wrong, it's wrong in ways that no human would ever be wrong.\" ", "AI-based image recognition algorithms surpassed human performance in 2010, most recently achieving an error rate of 2.5% in contrast to the average human error rate of 5%; however, some commonly cited experiments with these systems demonstrate their capacity for failure. As illustrated in Figure 4 , researchers combined a picture that an AI system correctly identified as a panda with random distortion that the computer labeled \"nematode.\" The difference in the combined image is imperceptible to human eyes, but the AI system labeled the image as a gibbon with 99.3% confidence. ", "In another experiment, an AI system described the picture in Figure 5 as \"a young boy is holding a baseball bat,\" demonstrating the algorithm's inability to understand context. Some experts warn that AI may be operating with different assumptions about the environment than human operators, who would have little awareness of when the system is outside the boundaries of its original design. ", "Similarly, AI systems may be subject to algorithmic bias as a result of their training data. For example, researchers have repeatedly discovered instances of racial bias in AI facial recognition programs due to the lack of diversity in the images on which the systems were trained, while some natural language processing programs have developed gender bias. This could hold significant implications for AI applications in a military context, particularly if such biases remain undetected and are incorporated into systems with lethal effects.", "\"Domain adaptability,\" or the ability of AI systems to adjust between two disparate environments, may also present challenges for militaries. For example, one AI system developed to recognize and understand online text was trained primarily on formal language documents like Wikipedia articles. The system was later unable to interpret more informal language in Twitter posts. Domain adaptability failures could occur when systems developed in a civilian environment are transferred to a combat environment.", "AI system failures may create a significant risk if the systems are deployed at scale. One analyst noted that although humans are not immune from errors, their mistakes are typically made on an individual basis, and they tend to be different every time. However, AI systems have the potential to fail simultaneously and in the same way, potentially producing large-scale or destructive effects. Other unanticipated results may arise when U.S. AI systems interact with adversary AI systems trained on different data sets with different design parameters and cultural biases. ", "Analysts warn that if militaries rush to field the technology prior to gaining a comprehensive understanding of potential hazards, they may incur a \"technical debt,\" a term that refers to the effect of fielding AI systems that have minimal risk individually but compounding collective risk due to interactions between systems. This risk could be further exacerbated in the event of an AI arms race."], "subsections": []}, {"section_title": "Explainability", "paragraphs": ["Further complicating issues of predictability, the types of AI algorithms that have the highest performance are currently unable to explain their processes. For example, Google created a cat-identification system, which achieved impressive results in identifying cats on YouTube; however, none of the system's developers were able to determine which traits of a cat the system was using in its identification process. This lack of so-called \"explainability\" is common across all such AI algorithms. To address this issue, DARPA is conducting a five-year research effort to produce explainable AI tools. ", "Other research organizations are also attempting to do a backwards analysis of these types of algorithms to gain a better understanding of their internal processes. In one such study, researchers analyzed a program designed to identify curtains and discovered that the AI algorithm first looked for a bed rather than a window, at which point it stopped searching the image. Researchers later learned that this was because most of the images in the training data set that featured curtains were bedrooms. The project demonstrated the possibility that training sets could inadvertently introduce errors into a system that might not be immediately recognized or understood by users. ", "Explainability can create additional issues in a military context, because the opacity of AI reasoning may cause operators to have either too much or too little confidence in the system. Some analysts are particularly concerned that humans may be averse to making a decision based entirely on AI analysis if they do not understand how the machine derived the solution. Dawn Meyerriecks, Deputy Director for Science and Technology at the CIA, expressed this concern, arguing, \"Until AI can show me its homework, it's not a decision quality product.\" Increasing explainability will thus be key to humans building appropriate levels of trust in AI systems. As a U.S Army study of this issue concludes, only \"prudent trust\" will confer a competitive advantage for military organizations. ", "Additional human-machine interaction issues that may be challenged by insufficient explainability in a military context include the following:", "Goal Alignment . The human and the machine must have a common understanding of the objective. As military systems encounter a dynamic environment, the goals will change, and the human and the machine must adjust simultaneously based on a shared picture of the current environment. Task A lignment. Humans and machines must understand the boundaries of one another's decision space, especially as goals change. In this process, humans must be consummately aware of the machine's design limitations to guard against inappropriate trust in the system. Human Machine Interface. Due to the requirement for timely decisions in many military AI applications, traditional machine interfaces may slow down performance, but there must be a way for the human and machine to coordinate in real time in order to build trust. ", "Finally, explainability could challenge the military's ability to \"verify and validate\" AI system performance prior to fielding. Due to their current lack of an explainable output, AI systems do not have an audit trail for the military test community to certify that a system is meeting performance standards. DOD is currently developing a framework to test AI system lifecycles and building methods for testing AI systems in diverse environments with complex human-machine interactions. "], "subsections": []}, {"section_title": "Exploitation", "paragraphs": ["AI systems present unique pathways for adversary exploitation. First, the proliferation of AI systems will increase the number of \"hackable things,\" including systems that carry kinetic energy (e.g., moving vehicles), which may in turn allow exploitive actions to induce lethal effects. These effects could be particularly harmful if an entire class of AI systems all have the same exploitable vulnerability. ", "In addition, AI systems are particularly vulnerable to theft by virtue of being almost entirely software-based. As one analyst points out, the Chinese may be able to steal the plans for an F-35, but it will take them years to find the materials and develop the manufacturing processes to build one. In contrast, stolen software code can be used immediately and reproduced at will. This risk is amplified by the dual-use nature of the technology and the fact that the AI research community has been relatively open to collaboration up to this point. Indeed, numerous AI tools developed for civilian use\u2014but that could be adapted for use in weapon systems\u2014have been shared widely on unclassified internet sites, making them accessible to major military powers and nonstate actors alike. ", "Finally, adversaries may be capable of deliberately introducing the kinds of image classification and other errors discussed in the \" Predictability \" section above. In one such case, researchers who had access to the training data set and algorithm for an image classifier on a semiautonomous vehicle used several pieces of strategically placed tape (as illustrated in Figure 6 ) to cause the system to identify a stop sign as a speed limit sign. In a later research effort, a team at MIT successfully tricked an image classifier into thinking that a picture of machine guns was a helicopter\u2014without access to the system's training data or algorithm. These vulnerabilities highlight the need for robust data security, cybersecurity, and testing and evaluation processes as military AI applications are developed. "], "subsections": []}]}, {"section_title": "AI's Impact on Combat", "paragraphs": ["Although AI has not yet entered the combat arena in a serious way, experts are predicting the potential impact that AI will have on the future of warfare. This influence will be a function of many factors, including the rate of commercial investment, the drive to compete with international rivals, the research community's ability to advance the state of AI capability, the military's general attitude toward AI applications, and the development of AI-specific warfighting concepts. ", "Many experts assert that there is a \"sense of inevitability\" with AI, arguing that it is bound to be substantially influential. Nevertheless, in January 2016, the Vice Chairman of the Joint Chiefs of Staff, General Paul Selva, intimated that it may be too early to tell, pointing out that DOD is still evaluating AI's potential. He stated, \"The question we're trying to pose now is, 'Do the technologies that are being developed in the commercial sector principally provide the kind of force multipliers that we got when we combined tactical nuclear weapons or precision and stealth?' If the answer is yes, then we can change the way that we fight.... If not, the military will seek to improve its current capabilities slightly to gain an edge over its adversaries.\" There are a range of opinions on AI's trajectory, and Congress may consider these future scenarios as it seeks to influence and conduct oversight of military AI applications. "], "subsections": [{"section_title": "Minimal Impact on Combat", "paragraphs": ["While many analysts admit that military AI technology is in a stage of infancy, it is difficult to find an expert who believes that AI will be inconsequential in the long run. However, AI critics point to a number of trends that may minimize the technology's impact. From a technical standpoint, there is a potential that the current safety problems with AI will be insurmountable and will make AI unsuitable for military applications. In addition, there is a chance the perceived current inflection point in AI development will instead lead to a plateau. Some experts believe that the present family of algorithms will reach its full potential in another 10 years, and AI development will not be able to proceed without significant leaps in enabling technologies, such as chips with higher power efficiency or advances in quantum computing. The technology has encountered similar roadblocks in the past, resulting in periods called \"AI Winters,\" during which the progress of AI research slowed significantly. ", "As discussed earlier, the military's willingness to fully embrace AI technology may pose another constraint. Many academic studies on technological innovation argue that military organizations are capable of innovation during wartime, but they characterize the services in peacetime as large, inflexible bureaucracies that are prone to stagnation unless there is a crisis that spurs action. Members of the Defense Innovation Board, composed of CEOs from leading U.S. commercial companies, remarked in their most recent report, \"DOD does not have an innovation problem, it has an innovation adoption problem\" with a \"preference for small cosmetic steps over actual change.\" ", "Another analysis asserts that AI adoption may be halted by poor expectation management. The report asserts that overhyped AI capabilities may cause frustration that will \"diminish people's trust and reduce their willingness to use the system in the future.\" This effect could have a significant chilling effect on AI adoption."], "subsections": []}, {"section_title": "Evolutionary Impact on Combat", "paragraphs": ["Most analysts believe that AI will at a minimum have significant impact on the conduct of warfare. One study describes AI as a \"potentially disruptive technology that may create sharp discontinuities in the conduct of warfare,\" further asserting that the technology may \"produce dramatic improvements in military effectiveness and combat potential.\" These analysts point to research projects to make existing weapon systems and processes faster and more efficient, as well as providing a means to cope with the proliferation of data that complicate intelligence assessments and decisionmaking. However, these analysts caution that in the near future AI is unlikely to advance beyond narrow, task-specific applications that require human oversight. ", "Some AI proponents contend that although humans will be present, their role will be less significant, and the technology will make combat \"less uncertain and more controllable,\" as machines are not subject to the emotions that cloud human judgment. However, critics point to the enduring necessity for human presence on the battlefield in some capacity as the principle restraining factor that will keep the technology from upending warfare. An academic study of this trend argues, ", "At present, even an AI of tremendous power will not be able to determine outcomes in a complex social system, the outcomes are too complex \u2013 even without allowing for free will by sentient agents.... Strategy that involves humans, no matter that they are assisted by modular AI and fight using legions of autonomous robots, will retain its inevitable human flavor. ", "Pointing to another constraining factor, analysts warn of the psychological impact that autonomous systems will have on an adversary, especially in conflict with cultures that place a premium on courage and physical presence. One study on this topic quotes a security expert from Qatar who stated, \"How you conduct war is important. It gives you dignity or not.\" ", "In addition, experts highlight that the balance of international AI development will affect the magnitude of AI's influence. As one analyst states, \"[T]he most cherished attribute of military technology is asymmetry.\" In other words, military organizations seek to develop technological applications or warfighting concepts that confer an advantage for which their opponent possesses no immediate countermeasure. Indeed, that is the U.S. military's intent with the current wave of technological development as it seeks \"an enduring competitive edge that lasts a generation or more.\" For this reason, DOD is concerned that if the United States does not increase the pace of AI development and adoption, it will end up with either a symmetrical capability or a capability that bestows only a fleeting advantage, as U.S. competitors like China and Russia accelerate their own respective military AI programs. ", "The democratization of AI technology will further complicate the U.S. military's pursuit of an AI advantage. As the 2018 National Defense Strategy warns, \"The fact that many technological developments will come from the commercial sector means that state competitors and nonstate actors will also have access to them, a fact that risks eroding the conventional overmatch to which our Nation has grown accustomed.\" In these circumstances, AI could still influence warfighting methods, but the technology's overall impact may be limited if adversaries possess comparable capabilities. "], "subsections": []}, {"section_title": "Revolutionary Impact on Combat", "paragraphs": ["A sizeable contingent of experts believe that AI will have a revolutionary impact on warfare. One analysis asserts that AI will induce a \"seismic shift on the field of battle\" and \"fundamentally transform the way war is waged.\" The 2018 National Defense Strategy counts AI among a group of emerging technologies that will change the character of war, and Frank Hoffman, a professor at the National Defense University, takes this a step further, arguing that AI may \"alter the immutable nature of war.\" ", "Statements like this imply that AI's transformative potential is so great that it will challenge long-standing, foundational warfighting principles. In addition, members of the Chinese military establishment assert that AI \"will lead to a profound military revolution.\" Proponents of this position point to several common factors when making their case. They argue that the world has passed from the Industrial Era of warfare into the Information Era, in which gathering, exploiting, and disseminating information will be the most consequential aspect of combat operations. ", "In light of this transition, AI's potential ability to facilitate information superiority and \"purge combat of uncertainty\" will be a decisive wartime advantage, enabling faster and higher-quality decisions. As one study of information era warfare states, \"[W]inning in the decision space is winning in the battlespace.\" Members of this camp argue that AI and autonomous systems will gradually distance humans from a direct combat role, and some even forecast a time in which humans will make strategic-level decisions while AI systems exclusively plan and act at the tactical level. In addition, analysts contend that AI may contest the current preference for quality over quantity, challenging industrial era militaries built around a limited number of expensive platforms with exquisite capabilities, instead creating a preference for large numbers of adequate, less expensive systems. ", "A range of potential consequences flow from the assumptions surrounding AI's impact on warfighting. Some studies point to overwhelmingly positive results, like \"near instantaneous responses\" to adversary operations, \"perfectly coordinated action,\" and \"domination at a time and place of our choosing\" that will \"consistently overmatch the enemy's capacity to respond.\" However, AI may create an \"environment where weapons are too fast, small, numerous, and complex for humans to digest ... taking us to a place we may not want to go but are probably unable to avoid.\" In other words, AI systems could accelerate the pace of combat to a point in which machine actions surpass the rate of human decisionmaking, potentially resulting in a loss of human control in warfare. ", "There is also a possibility that AI systems could induce a state of strategic instability. The speed of AI systems may put the defender at an inherent disadvantage, creating an incentive to strike first against an adversary with like capability. In addition, placing AI systems capable of inherently unpredictable actions in close proximity to an adversary's systems may result in inadvertent escalation or miscalculation. ", "Although these forecasts project dramatic change, analysts point out that correctly assessing future impacts may be challenging. Historians of technology and warfare emphasize that previous technological revolutions are apparent only in hindsight, and the true utility of a new application like AI may not be apparent until it has been used in combat. ", "Nevertheless, given AI's disruptive potential, for better or for worse, it may be incumbent on military leaders and Congress to evaluate the implications of military AI developments and exercise oversight of emerging AI trends. Congressional actions that affect AI funding, acquisitions, norms and standards, and international competition have the potential to significantly shape the trajectory of AI development and may be critical to ensuring that advanced technologies are in place to support U.S. national security objectives and the continued efficacy of the U.S. military. "], "subsections": []}]}]}}
{"id": "R44879", "title": "Juvenile Justice Funding Trends", "released_date": "2019-03-13T00:00:00", "summary": ["Although juvenile justice has always been administered by the states, the federal government has played a role in this area through the administration of grant programs. Congress has influenced juvenile justice by authorizing and funding grant programs administered by the Department of Justice's (DOJ's) Office of Juvenile Justice and Delinquency Prevention (OJJDP).", "The Juvenile Justice and Delinquency Prevention Act (JJDPA; P.L. 93-415), enacted in 1974, was the first comprehensive juvenile justice legislation passed by Congress. The JJDPA authorized a series of grant programs designed to support state juvenile justice systems and prevent juvenile delinquency. Since its enactment, the JJDPA has undergone several key amendments, including a significant reorganization in 2002 (by the 21st Century Department of Justice Appropriations Authorization Act; P.L. 107-273). Its grant programs were most recently amended and reauthorized by the Juvenile Justice Reform Act of 2018 (P.L. 115-385).", "Funding for programs authorized by the JJDPA, as well as for other non-JJDPA grant programs that are administered by OJJDP, is provided through the Juvenile Justice Programs account in the annual Commerce, Justice, Science, and Related Agencies appropriations act. After the restructuring of juvenile justice grant programs in 2002, total funding for these programs began to decline. This decline generally continued through FY2007, after which funding for these programs started to increase. For FY2010, Congress provided $424 million for juvenile justice programs\u2014the largest appropriation since FY2003. Juvenile justice funding then generally declined again from FY2010 through FY2017. After appropriating a low of $247 million for juvenile justice programs in FY2017, Congress increased funding for both FY2018 and FY2019. Through the Consolidated Appropriations Act, 2019 (P.L. 116-6), Congress appropriated $287 million for juvenile justice programs for FY2019\u2014the largest appropriation since the $424 million in FY2010."], "reports": {"section_title": "", "paragraphs": ["T he federal government has no juvenile justice system of its own. Rather, juvenile justice is administered by the states. The federal government, though, seeks to influence states' juvenile justice systems through the administration of grant programs and the provision of funds. ", "This report provides a brief overview of funding for the juvenile justice-related grant programs administered by the Department of Justice's (DOJ's) Office of Juvenile Justice and Delinquency Prevention (OJJDP)."], "subsections": [{"section_title": "Juvenile Justice Legislation and Grant Programs", "paragraphs": ["A number of federally funded juvenile justice grant programs are authorized by the Juvenile Justice and Delinquency Prevention Act of 1974 (JJDPA, P.L. 93-415 ). Since its enactment, the JJDPA has been revised by several key amendments, including a significant reorganization in 2002 (by the 21 st Century Department of Justice Appropriations Authorization Act; P.L. 107-273 ). Its grant programs were most recently amended and reauthorized by the Juvenile Justice Reform Act of 2018 ( P.L. 115-385 ). ", "The JJDPA as originally enacted had three main components: (1) it established OJJDP to coordinate and administer federal juvenile justice efforts; (2) it created grant programs to assist states with their juvenile justice systems; and (3) it promulgated core mandates to which states must adhere in order to be eligible for certain grant funding. Although the JJDPA has been amended several times over the past 40 years, it continues to feature these three components. ", "The JJDPA has been the primary channel through which the federal government has provided juvenile justice funding to states. However, other programs also administered by OJJDP have contributed to overall federal juvenile justice funding. ", "The following section outlines various juvenile justice grant programs, including those authorized by the JJDPA. Grants noted in this section have been congressionally authorized at some point in time and have received an appropriation at least once since FY2010. Congress has also provided appropriations for programs that it has not authorized; these programs are not discussed in this section, but they are included in Table 1 , which outlines funding for juvenile justice programs since FY2010."], "subsections": [{"section_title": "State Formula Grant Program", "paragraphs": ["The JJDPA authorizes OJJDP to make formula grants to states for the planning, establishment, operation, coordination, and evaluation of projects that develop more effective juvenile delinquency programs and improve juvenile justice systems. Funds are allocated annually based on each state's proportion of people under the age of 18. States must adhere to certain core mandates to receive their funding. The Juvenile Justice Reform Act of 2018 ( P.L. 115-385 ) amended and reauthorized this program through FY2023."], "subsections": []}, {"section_title": "Developing, Testing, and Demonstrating Promising New Initiatives and Programs (Challenge Grants)", "paragraphs": ["The JJDPA authorizes OJJDP to make grants to state, local, and tribal governments and nongovernmental organizations for programs to develop, test, or demonstrate promising new initiatives that may prevent, control, or reduce juvenile delinquency. The Juvenile Justice Reform Act of 2018 ( P.L. 115-385 ) amended and reauthorized this program through FY2023. Of note, this grant program has not received an appropriation since FY2010."], "subsections": []}, {"section_title": "Title V Incentive Youth Promise Grants for Local Delinquency Prevention", "paragraphs": ["The JJDPA authorizes OJJDP to make grants to states, which are then transmitted through subgrants to units of local government (or nonprofits in partnership with units of local government) for delinquency prevention programs for juveniles who have come into contact with, or are at risk to come into contact with, the juvenile justice system. The Juvenile Justice Reform Act of 2018 ( P.L. 115-385 ) amended and reauthorized this program through FY2023. The JJDPA also authorizes OJJDP to make grants to eligible Indian tribes to support delinquency prevention programs for at-risk youth or those who have come into contact with the juvenile justice system. Traditionally, Congress dedicates amounts from the total appropriation for the Title V program for specific programs and purposes areas (e.g., the Tribal Youth program or preventing gang violence). "], "subsections": []}, {"section_title": "Victims of Child Abuse Act Grants", "paragraphs": ["The Victims of Child Abuse Act of 1990 (Title II of the Crime Control Act of 1990, P.L. 101-647 ) authorizes OJJDP to fund technical assistance, training, and administrative reforms for state juvenile and family courts to improve the way they handle cases of child abuse and neglect. This program was most recently reauthorized in the Violence Against Women Act Reauthorization Act of 2013 ( P.L. 113-4 ). Its authorization of appropriations expired in FY2018, but it has continued to receive funding."], "subsections": []}, {"section_title": "Juvenile Mentoring Program", "paragraphs": ["The Juvenile Mentoring Program was authorized by the Incentive Grants for Local Delinquency Prevention Programs Act ( P.L. 102-586 ). Grants under this program are awarded to local educational agencies (in partnership with public or private agencies) to establish and support mentoring programs to reduce delinquent behavior, improve scholastic performance, and reduce school dropouts. The program has continued to receive appropriations even though its authorization was repealed ( P.L. 107-273 ). "], "subsections": []}, {"section_title": "Juvenile Accountability Block Grants", "paragraphs": ["Congress initially established the Juvenile Accountability Block Grant (JABG) program by appropriating funding for it in the FY1998 Department of Justice Appropriations Act ( P.L. 105-119 ). Congress subsequently authorized the JABG program through P.L. 107-273 . Although the authorization for the JABG program is not a part of the JJDPA, it nevertheless is administered by OJJDP. The JABG program authorizes the Attorney General to make grants to states and units of local government to strengthen their juvenile justice systems, including holding juveniles accountable for their actions. Authorization for this program expired in FY2009, but Congress continued to provide appropriations through FY2013."], "subsections": []}]}, {"section_title": "Juvenile Justice Appropriations", "paragraphs": ["Congress appropriates funding for programs authorized by the JJDPA as well as for other non-JJDPA grant programs through the Juvenile Justice Programs account in the annual Commerce, Justice, Science, and Related Agencies Appropriations Act. Figure 1 shows total appropriations for juvenile justice programs from FY2002 through FY2019.", "Overall funding for juvenile justice programs, which had typically been above $500 million, peaked at $565 million in FY2002. From FY2002 to FY2007, however, overall funding fell by 38% to $348 million. The majority of this reduction came from cuts to the JABG program. Appropriations for JABG fell from a high of $250 million in FY2002 to $49 million in FY2007. From FY2007 to FY2010, total funding for juvenile justice programs increased by almost 22% to $424 million, with funding for JJDPA programs increasing by 27% to $331 million over this same period. This was the largest juvenile justice appropriation since FY2003. ", "Funding for juvenile justice programs again began to decline in FY2011, and that decline generally continued through FY2017. From FY2010 to FY2017, total funding for juvenile justice programs decreased by nearly 42%, from $424 million to $247 million. Contributing to this drop, Congress eliminated funding for the Challenge Grants in FY2011 and for the JABG program in FY2014. During this time period, however, Congress also started appropriating funding for programs that had not previously been funded under the Juvenile Justice Programs account (including funding for missing and exploited children programs, child abuse training programs for judicial personnel and practitioners, and grants and technical assistance in support of a National Forum on Youth Violence Prevention). ", "After appropriating a low of $247 million for juvenile justice programs in FY2017, Congress increased funding in both FY2018 and FY2019. Congress increased funding for juvenile justice programs to nearly $283 million for FY2018, and it included funds for a new Opioid Affected Youth Initiative. Congress most recently appropriated $287 million for juvenile justice programs for FY2019\u2014the largest appropriation since the $424 million in FY2010. Historically, Congress has set aside funding from the Title V grant for gang prevention activities; however, for FY2019 Congress did not delineate funding for this purpose. It also did not include funding for community-based violence prevention, an administratively established initiative that had received appropriations since FY2010. Policymakers did, though, set aside money for an initiative serving children exposed to violence."], "subsections": [{"section_title": "Historical Appropriations by Program", "paragraphs": [" Table 1 provides a breakdown of funding for the Juvenile Justice Programs account by program for the 10-year period from FY2010 to FY2019. ", "Appropriations for specific programs in the Juvenile Justice Programs account can vary from year to year. For example, starting in FY2012, Congress moved funding for missing and exploited children programs from the Justice Assistance account to the Juvenile Justice Programs account. In addition, Congress sometimes provides funding for programs as a specific line item in the Juvenile Justice Programs account, but in other years funding for those programs is provided as a set-aside from another program in the account. For example, the Community Based Violence Prevention Initiative and the Competitive Grants Focusing on Girls in the Juvenile Justice System Program have received line item appropriations in some fiscal years and have been funded by set-asides from the Title V Incentive Grants Program in other years. By contrast, some programs have consistently been funded through set-asides from the Title V program (e.g., tribal youth and gang prevention grants)."], "subsections": []}]}]}}
{"id": "R44268", "title": "U.S. Agent Orange/Dioxin Assistance to Vietnam ", "released_date": "2019-02-21T00:00:00", "summary": ["U.S. assistance to Vietnam for the environmental and health damage attributed to a dioxin contained in Agent Orange and other herbicides sprayed over much of the southern portion of the country during the Vietnam War remains a major bilateral issue. Between fiscal years (FY) 2007 and 2019, Congress appropriated nearly $255 million to address these two issues. In addition, the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (P.L. 115-232) authorized the transfer of up to $15 million to the U.S. Agency for International Development (USAID) for the dioxin cleanup of the Bien Hoa Airbase.", "Most of the appropriated funds have been used by USAID for the environmental cleanup of Danang airport, one of the major airbases used for storing and spraying the herbicides between 1961 and 1971. A lesser amount of the appropriated funds have been used by USAID for assistance to Vietnam's persons with disabilities, generally, but not always in the vicinity of Danang or other dioxin-contaminated areas.", "Congressional interest in Agent Orange/dioxin in Vietnam has largely been focused on two issues. The first issue is determining the appropriate amount and type of assistance to provide to address the environmental damage and the health effects of dioxin contamination in Vietnam. The second issue is oversight of how such assistance has been utilized by the State Department and USAID.", "In November 2017, the United States and Vietnam completed the environmental remediation of approximately 90,000 cubic meters (118,000 cubic yards) of contaminated soil and 60,000 cubic meters (78,000 cubic yards) of lower risk materials at Danang airport by a process known as in-pile thermal desorption (IPTD). Restoration and project closure operations were completed in November 2018. The project took six years, with an estimated overall cost of $116 million.", "Field studies have identified a number of other areas in Vietnam contaminated with the dioxin associated with Agent Orange, including the airports near Bien Hoa and Phu Cat, as well as sections of the A Luoi Valley. In January 2018, U.S. and Vietnamese governments signed a memorandum of intent (MOI) to begin the cleanup of the Bien Hoa airport. According to a USAID study, the environmental cleanup of Bien Hoa airport could cost an estimated $137 million to $794 million, depending on what form of remediation is used.", "The provision of health-related assistance to areas contaminated with Agent Orange/dioxin has raised questions about how USAID has utilized appropriated funds. By May 2017, USAID had obligated less than two-thirds of the appropriated funds for FY2011-FY2017. The funds have generally been used for disability assistance programs regardless of the cause of the disability, rather than for both health and disability programs targeting populations residing near Agent Orange/dioxin \"hot spots.\"", "While the obligations for environmental remediation activities generally have not been a matter of congressional concern, how USAID has obligated appropriations for health and disability activities has drawn some attention.", "The Consolidated Appropriations Act, 2019 (P.L. 116-6) appropriated \"not less than $20 million\" for environmental remediation and \"not less than $12.5 million \u2026 for health and disability programs in areas sprayed with Agent Orange and otherwise contaminated with dioxin.\" The Victims of Agent Orange Relief Act of 2019 (H.R. 326) would require the Secretary of State to provide assistance to individuals in Vietnam with health issues related to exposure to Agent Orange, as well as \"to institutions in Vietnam that provide health care for covered individuals.\" The act would also require the Secretary of State to provide assistance \"to remediate those geographic areas of Vietnam that the Secretary determines contain high levels of Agent Orange.\""], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["During the Vietnam War, the U.S. military conducted Operation Ranch Hand, a program that sprayed an estimated 18-20 million gallons of herbicides\u2014including approximately 11-12 million gallons of Agent Orange \u2014over about 12,000 square miles of southern Vietnam between 1961 and 1971. A contaminant of the manufacture of Agent Orange (as well as two other herbicides used, Agent Pink and Agent Purple) was 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD), a developmental toxicant and a probable human carcinogen according to the U.S. Environmental Protection Agency.", "Environmental surveys conducted in Vietnam have identified a number of dioxin \"hot spots,\" including the airbases at Bien Hoa, Danang, and Phu Cat, that are contaminated with TCDD well above internationally acceptable levels (see Figure 1 ). In addition, the A Luoi (or A Shau) Valley, south of Quang Tri and west of Danang, was considered an important segment of the Ho Chi Minh Trail, a key supply route used by North Vietnamese forces and their allies, and was therefore heavily sprayed. The former U.S. military base in the A Luoi Valley has been identified as another \"hot spot.\"", "In recent years, U.S. response to the environmental damage and health problems caused by Agent Orange and its associated dioxin in Vietnam has been viewed as helping to advance bilateral relations between the two nations. After a meeting with President Tran Dai Quang in May 2016, President Obama stated the following:", "With regard to security, the United States will continue to do our part to address the painful legacy of war.... We'll continue to help remove unexploded landmines and bombs. And now that our joint effort to remove dioxin\u2014Agent Orange\u2014from Danang Airport is nearly complete, the United States will help in the cleanup at Bien Hoa Air Base.", "The joint statement issued after that meeting included the following statements:", "Vietnam welcomed cooperation leading to the successful conclusion of the first phase of dioxin remediation at Danang International Airport, with the final phase underway. The United States committed to partnering with Vietnam to make a significant contribution to the clean-up of dioxin contamination at Bien Hoa Air Base.", "The Trump Administration has continued the past commitment to provide assistance to Vietnam to address the Agent Orange/dioxin issue. Following their meeting in May 2017 in Washington, DC, President Trump and Prime Minister Nguyen Xuan Phuc released a joint statement, which stated:", "The two sides committed to work together to address war legacy issues, including through such joint efforts as dioxin remediation, taking note of the progress that has been made at Da Nang Airport and intent to discuss continued collaboration at Bien Hoa Airport, and the removal of unexploded ordnances.", "On November 10, 2017, Under Secretary of State Thomas Shannon and Senior Lieutenant General Nguyen Phuong Nam held a ceremony to celebrate the completion of the environmental remediation of Danang Airport. On January 23, 2018, the two governments signed a Memorandum of Intent (MOI) to begin the process of dioxin decontamination of Bien Hoa. ", "From 2007 to the present, Congress has appropriated a total of $254.8 million for the environmental remediation of Agent Orange/dioxin and health and disability programs in areas of Vietnam sprayed with Agent Orange or otherwise contaminated by dioxin. Starting with the 112 th Congress, the legislation has appropriated separate amounts for these two purposes, generally with more funds appropriated for environmental remediation than for health and disability programs. All of the amounts appropriated by Congress are subject to the provisions of Section 653(a) (22 U.S.C. \u00a72413(a)) of the Foreign Assistance Act of 1961, as amended (P.L. 87-195; 22 U.S.C. \u00a72151 et seq.). As a consequence, the actual amount available for such assistance may be less than the amount specified in the various laws and their accompanying reports. ", "In addition, the 115 th Congress, under Section 1052 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 ( P.L. 115-232 ), authorized the Secretary of Defense to transfer \"not more than $15,000,000\" in FY2019 to the Secretary of State, for use by USAID, \"to be used for the Bien Hoa dioxin cleanup in Vietnam.\" Any funds transferred are to be taken from the Department of Defense's \"Operation and Maintenance, Defense-wide\" account. ", "The appropriated funds for environmental remediation generally have been allocated under the State Department's Economic Support Fund account (ESF), while the funds for health and disability programs have been allocated under the Development Assistance account (DA). In general, the funds appropriated under both accounts have been made available for two fiscal years. The State Department has delegated responsibility for the administration and obligation of the appropriated funds to the U.S. Agency for International Development (USAID). ", "To date, most of the environmental remediation effort has been focused on the cleanup of the Danang airport, while the funds appropriated for health and disability programs have been used primarily for disability support programs in Danang and other parts of Vietnam. The cleanup of Danang airport has been completed, and U.S. and Vietnamese officials have made arrangements for joint dioxin removal operations at the airbase in Bien Hoa. In addition, the two governments are discussing the appropriate manner to address health and disability problems among Vietnamese nationals that may be attributable to dioxin exposure. ", "The programs and projects funded by the appropriated funds have been administered by the State Department and USAID, in cooperation with various ministries and agencies within the Vietnamese government. In 1999, Vietnam's central government created the Office of the National Steering Committee on Overcoming Consequences of Agent Orange/Dioxin in Vietnam (Office 33, or Committee 33), an interministerial body, to oversee and coordinate its government's policy on Agent Orange and dioxin. Office 33 includes representatives from Vietnam's Ministry of Natural Resources and Environment (MONRE, where Office 33 is administratively located); Ministry of Finance (MOF); Ministry of Foreign Affairs (MOFA); Ministry of Health (MOH); Ministry of Labour, Invalids, and Social Affairs (MOLISA); Ministry of National Defence (MND); Ministry of Planning and Investment (MOPI); and Vietnam Academy of Science and Technology (VAST). ", "Congressional interest has generally focused on two issues. The first issue is determining the amount to allocate for the environmental remediation of dioxin \"hot spots\" in Vietnam and health and disability programs in areas of Vietnam sprayed with Agent Orange or otherwise contaminated by dioxin. The second issue is oversight to ascertain if the State Department and USAID are effectively and appropriately obligating and expending the available funds. In particular, Congress has paid attention to the rate at which USAID has obligated the funds Congress appropriated for use on health and disability activities. "], "subsections": []}, {"section_title": "Congressional Appropriations Since 2007", "paragraphs": ["The appropriation of funds explicitly to address the Agent Orange/dioxin issue in Vietnam started in May 2007, when the 110 th Congress passed the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 ( P.L. 110-28 ). That act appropriated $3 million \"for the remediation of dioxin contaminated sites in Vietnam, and to support health programs in communities near those sites.\" After more than a year of internal consultation, the State Department decided that the administration and obligation of the $3 million would be handled by USAID, setting a precedent for the handling of future appropriations for Agent Orange/dioxin assistance to Vietnam. ", "The 111 th Congress in three separate pieces of legislation appropriated a total of $18 million for dioxin cleanup in Vietnam and related health services (see Table 1 ). In March 2009, the 111 th Congress appropriated $3 million for Agent Orange/dioxin remediation and health care assistance in the vicinity of the Danang \"hot spot\" in the Omnibus Appropriations Act, 2009 ( P.L. 111-8 ). In December 2009, Congress passed the Consolidated Appropriations Act, 2010 ( P.L. 111-117 ), which included $3 million for dioxin cleanup and related health services in Vietnam. In July 2010, Congress included $12 million \"to support the remediation of dioxin contamination at the Danang Airport, which poses extreme risks to human health and welfare, and related health activities\" in the Supplemental Appropriations Act, 2010 ( P.L. 111-212 ). In addition, the State Department and USAID allocated $1.9 million in Development Assistance funds for FY2010 for environmental remediation at Danang airport.", "The conference report accompanying P.L. 112-74 also endorsed language in a Senate report associated with an earlier reported to Senate version of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2012 ( S. 1601 ) directing USAID, in consultation with the Senate Appropriations Committee, the Department of State, the Government of Vietnam, and \"other interested parties,\" to develop a \"comprehensive, multiyear plan\" for Agent Orange-related activities in Vietnam within 180 days after the enactment of the law.", "The 113 th Congress continued to appropriate funds for the environmental remediation of Agent Orange/dioxin in Vietnam and related health services. The Consolidated and Further Continuing Appropriations Act, 2013 ( P.L. 113-6 ), which superseded P.L. 112-175 , renewed the appropriation levels contained in P.L. 112-74 for FY2013, subject to sequestration requirements. Similarly, P.L. 113-46 and P.L. 113-73 renewed appropriations for FY2014 until being superseded by the Consolidated Appropriations Act, 2014 ( P.L. 113-76 ), which appropriated $22.0 million for environmental remediation and $7.0 million for \"health and disability programs in areas sprayed with Agent Orange or otherwise contaminated by dioxin.\" Section 7043(h) of the Consolidated and Further Continuing Appropriations Act, 2015 ( P.L. 113-235 ) states the following:", "Funds appropriated by this Act under the heading \"Economic Support Fund\" shall be made available for remediation of dioxin contaminated sites in Vietnam and may be made available for assistance for the Government of Vietnam, including the military, for such purposes, and funds appropriated under the heading \"Development Assistance\" shall be made available for health/disability activities in areas sprayed with Agent Orange or otherwise contaminated with dioxin.", "The act's accompanying \"Explanatory Statement\" specifies that $7.5 million is to be provided under \"Development Assistance\" for \"Vietnam health/disability programs\" and $15.0 million is to be provided under \"Economic Support Fund\" for \"Vietnam (Environmental remediation of dioxin).\"", "In Section 7043(g) of P.L. 114-113 , the 114 th Congress appropriated funds under the Economic Support Fund for \"remediation of dioxin contaminated sites in Vietnam\" and under Development Assistance for \"health and disability programs in areas sprayed with Agent Orange and otherwise contaminated with dioxin, to assist individuals with severe upper or lower body mobility impairment and/or cognitive or developmental disabilities.\" S.Rept. 114-79 , which accompanied P.L. 114-113 , provided \"not less than $25 million\" for environmental remediation and $7 million for \"health/disability programs in areas sprayed with Agent Orange or otherwise contaminated by dioxin, to address the mobility, psycho-social, vocational, and other needs of persons with severe upper and lower body mobility impairment and/or cognitive or developmental disabilities.\" The report continued with the statement, \"In order to minimize administrative costs and maximize impact in the field, the Committee intends that, to the maximum extent practicable, health/disability funds shall be implemented by Vietnamese organizations and entities.\"", "Funding for FY2017 was included in the Consolidated Appropriations Act, 2017 ( P.L. 115-31 ). Section 7043(h) states:", "(1) DIOXIN REMEDIATION\u2014Notwithstanding any other provision of law, of the funds appropriated by this Act under the heading `Economic Support Fund', not less than $20,000,000 shall be made available for activities related to the remediation of dioxin contaminated sites in Vietnam and may be made available for assistance for the Government of Vietnam, including the military, for such purposes.", "(2) HEALTH AND DISABILITY PROGRAMS\u2014Of the funds appropriated by this Act under the heading 'Development Assistance', not less than $10,000,000 shall be made available for health and disability programs in areas sprayed with Agent Orange and otherwise contaminated with dioxin, to assist individuals with severe upper or lower body mobility impairment and/or cognitive or developmental disabilities. ", "The act permits, for the first time since the United States has funded dioxin environmental remediation in Vietnam, the provision of assistance to the Government of Vietnam. It also reiterates that health and disability programs are to be in areas sprayed with Agent Orange or otherwise contaminated with dioxin.", "In March 2018, the 115 th Congress appropriated in the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) \"not less than $20 million\" for \"activities related to the remediation of dioxin contaminated sites in Vietnam.\" The act also provided that the funds \"may be made available for assistance for the Government of Vietnam, including the military, for such purposes.\" In addition, the act appropriated \"not less than $10 million\" for \"health and disability programs in areas sprayed with Agent Orange and otherwise contaminated with dioxin, to assist individuals with severe upper or lower body mobility impairment or cognitive or developmental disabilities.\"", "In February 2019, 116 th Congress appropriated in the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) \"not less than $20,000,000\" for \"activities related to the remediation of dioxin contaminated sites in Vietnam and may be made available for assistance for the Government of Vietnam, including the military, for such purposes.\" The Act also appropriated \"not less than $12,500,000 \u2026 for health and disability programs in areas sprayed with Agent Orange and otherwise contaminated with dioxin, to assist individuals with severe upper or lower body mobility impairment or cognitive or developmental disabilities.\""], "subsections": []}, {"section_title": "USAID Obligations", "paragraphs": ["The State Department has designated USAID as the responsible agency for the obligation of the appropriated funds for Agent Orange/dioxin-related activities in Vietnam . Table 2 lists the amounts USAID has obligated of funds appropriated over FY2007 to FY2017 by type of activity, implementing partner, and fiscal year. As of May 2018, USAID has obligated 81% of the $127 million appropriated for FY2011-FY2017 for environmental remediation projects, and 63.5% of the $44.3 million appropriated for FY2011-FY2017 for health- and disability-related services. Of the $21 million appropriated for FY2007-FY2011 for either environmental remediation or health- and disability-related services, USAID has obligated $20.3 million, or 96.9%.", "The manner in which USAID has obligated the appropriated funds has, at times, been an issue with Congress. While the rate of obligations for environmental remediation activities generally has not been a matter of concern, how USAID has obligated appropriations for health and disability activities has drawn some congressional attention. The two main concerns about the health and disability obligations are the seemingly slower pace of utilization (when compared to the environmental remediation funds), and the types of programs being funded. ", "Since Congress began appropriating funds specifically for Agent Orange/dioxin-related activities in Vietnam in FY2007, it generally has designated that the health and disability services are to be provided in locations near Agent Orange/dioxin-contaminated areas. The $3 million appropriated in FY2007 in P.L. 110-28 was \"to support health programs in communities near those sites,\" according to the accompanying Senate report. The joint committee print accompanying P.L. 111-8 stipulated that \"$3,000,000 is provided to continue environmental remediation of dioxin contamination at the Danang Airport and related health activities in nearby communities in Vietnam.\" H.Rept. 112-331 , which accompanied P.L. 112-74 , stated, \"The conferees recommend not less than $5,000,000 under this heading be made available for health/disability activities in areas in Vietnam that were targeted with Agent Orange or remain contaminated with dioxin.\" It is unclear if the State Department and USAID have in all cases obligated these funds in accordance with this locational guidance.", "Based on the information provided by USAID, funds for health- and disability-related services in FY2007-FY2009 were obligated to programs in Danang. However, for FY2010 to FY2013, the appropriated health and disability funds were largely obligated to Development Alternatives, Inc. (DAI) for a disability support program that was designed to \"broadly address the needs and improve the lives of persons with disabilities,\" without explicit reference to Agent Orange/dioxin \"hot spots.\" According to USAID, this three-year program ended in January 2016. ", "Following consultations with the Ministry of Labour, Invalids, and Social Affairs (MOLISA), Congress, and other interested parties, as of FY2014, USAID reportedly returned to directly obligating funds for health- and disability-related services in smaller amounts and increased its outreach to Vietnamese nongovernmental organizations. This shift to smaller direct program funding is reflected in Table 1 . For more about USAID's disability programs in Vietnam, see \" Disability Programs \" below."], "subsections": []}, {"section_title": "Danang Airport Environmental Remediation Project", "paragraphs": ["One of the main activities financed by congressional appropriations related to Agent Orange/dioxin in Vietnam is the environmental remediation project at Danang Airport. Since its beginnings in 2008, when the U.S. and Vietnamese governments started plans for the environmental remediation of Danang airport, the project has experienced delays in implementation, unexpected increases in the amount of material requiring decontamination, and rising costs. While USAID's initial intent was to complete the project by October 2013, a November 2014 U.S. government audit indicated that the estimated completion date for the project was March 31, 2017. The decontamination was completed in August 2017. During the life of the project, the amount of material to be decontaminated rose from an estimated 61,700 cubic meters (m 3 ) to approximately 90,000 m 3 , plus an additional 60,000 m 3 of \"lower risk material.\" The estimated cost of the project increased from $33.7 million to over $110 million.", "The joint military/civilian airport in Danang was a major operational hub for the U.S. military's Operation Ranch Hand. One study of Danang airbase found soil concentrations of \"TCDD toxic equivalents\" (TEQ) of up to 365 parts per billion (ppb)\u2014365 times the international maximum level of 1.0 ppb . Seventeen out of the 23 soil samples taken at Danang airbase exceeded the international maximum standard. ", "Work on the project began in December 2009, when the State Department and Vietnam's Ministry of Natural Resources and the Environment (MONRE) signed a memorandum of understanding (MOU) setting the framework for implementing environmental health and remediation programs in Danang. The MOU designated USAID and Office 33 as the implementing agencies. According to a State Department press release, the MOU covered $6.0 million in funds appropriated in FY2007 and FY2009. Among the activities included in the MOU was a grant to CDM International, Inc., in association with Hatfield Associates, to design an environmentally sound engineering approach to dioxin containment at Danang airport. ", "In June 2010, USAID completed an Environmental Assessment (EA) of Danang airport that recommended the use of thermal desorption to decontaminate an estimated 61,700 m 3 of contaminated material in six separate \"hotspots\" at the airport. The EA estimated that the decontamination would take two years to complete at a cost of $33.7 million, but noted that implementation would present \"challenges\" that could increase the cost by 50%. ", "USAID and Vietnam's Ministry of National Defence (MND) signed a Memorandum of Intent in Hanoi on December 30, 2010, with the goal of starting the remediation project in the summer of 2011 and completing the project by October 2013. The Prime Minister approved the remediation of Danang airport by in-pile thermal desorption (IPTD) in February 2011, and MND approved the project in April 2011. ", "USAID posted a Request for Proposals (RFP #486-11-028) in May 2011 for bids on the project. In July 2012, USAID awarded two contracts for the environmental remediation of Danang airport by IPTD. CDM Smith, a U.S. firm headquartered in Massachusetts, was granted $8.37 million for project oversight and construction management. Tetra Tech, Inc., headquartered in California, was awarded $17 million for the excavation and construction components of the project. A ceremony to launch the Danang airport environmental remediation project was held at Danang airport on August 9, 2012; onsite work began on August 20, 2012. ", "An internal USAID audit of the remediation project conducted in November 2014 indicated that six contracts have been awarded for the environmental assessment and remediation project at Danang airport, plus an assessment of Bien Hoa airbase (see Table 3 ). Three of the awarded contracts correspond to the amounts provided by USAID in Table 2 , but three do not, probably reflecting work beyond FY2013.", "The thermal desorption of the contaminated soil was done in two phases, due to the amount of material involved. The gradual heating of Phase 1, which involved the treatment of approximately 45,000 m 3 of soil contained in an area 70 meters wide and 100 meters long (about the size of a football field) and 8 meters (26 feet) high, began in April 2014. The cooling down of Phase 1 started in April 2015, after soil sampling revealed that more than 95% of the dioxin had been removed. Excavation for Phase 2, which involved the draining of three small lakes and the removal of the exposed lake beds, began in January 2015. The treatment of 45,000 m 3 of Phase 2 soil began in November 2016, and was completed in August 2017. ", "Progress on the decontamination of Danang airport was delayed by several factors. Weather during Vietnam's rainy season (September to December) hampered progress on the excavation of soil and the construction of the thermal treatment area. Soil testing following the drainage of the small lakes determined more soil and sediment would require decontamination than previously estimated. The secondary treatment facility was shut down in July 2014 to change the filtering system. It also took more time than anticipated to raise the ambient temperature of the Phase 1 soil to the target 335\u00b0C. ", "USAID's Office of Inspector General conducted an internal audit of the environmental remediation project in November 2014, and noted several potential risks that could delay the project and, by extension, raise its overall cost, including the problems associated with inclement weather and cooling the treated soil. The audit particularly noted the lack of a formal risk management plan to address some of the project risks identified by USAID and the project's contractors, and recommended that a formal risk management plan be implemented. The audit also cited CDM for providing inaccurate performance data and not fulfilling its obligations to provide training to Vietnamese officials, and recommended that more training be provided and better data documentation procedures be adopted. USAID agreed with all of the audit's recommendations. ", "On November 7, 2018, the two governments held a ceremony to mark the completion of the Danang Airport environmental remediation project. The completed project took more than twice as long and cost more than three times as much as initially projected by USAID. According to Pham Quang Vu, head of Vietnam's Air Force and Air Defense Military Science Division, the higher cost and greater time was due to underestimating the contamination at the airport, indicating that 162,500 cubic meters of soil\u2014not 72,900 cubic meters\u2014were contaminated. Anthony Kolb, chief of USAID's environmental remediation unit, stated that the dioxin had percolated three meters deeper than expected."], "subsections": []}, {"section_title": "Disability Programs", "paragraphs": ["USAID has, in general, utilized the funds Congress appropriated for health/disability activities in areas sprayed with Agent Orange or otherwise contaminated with dioxin as part of its overall program to provide support for persons with disabilities in Vietnam, regardless of the cause of the disability or proximity to Agent Orange \"hot spots.\" According to USAID, starting in 1989 with a program financed by the Leahy War Victims Fund, the U.S. government has provided over $60 million in assistance to disabled Vietnamese, regardless of the cause of the disability. This assistance includes funds specifically appropriated for health services in areas located near Agent Orange/dioxin-contaminated sites and other sources of developmental or health assistance. ", "Between FY2007 and FY2010, the State Department and USAID utilized the funds appropriated for health services for grants to various agencies to offer programs to improve the quality of life for persons with disabilities in Danang. A December 2010 USAID assessment of these grants noted the \"many accomplishments\" of these programs, but also noted that the three-year time period was \"very short for meeting program objectives.\" ", "In 2012, USAID approved a three-year, nationwide Persons with Disability Support Program (PDSP) to be jointly implemented with Development Alternatives, Inc. (DAI) and Vietnam Assistance for the Handicapped (VNAH). The request for applications (RFA) for the project indicated that the program was intended to \"build on the accomplishments of the previous USAID assistance to people with disabilities (PWD) living in communities in Danang, as well as include additional relevant public health activities.\" The project's geographic focus was to be primarily in Danang, and \"to some extent other areas, proposed by the Recipient, where there is a high disability burden, the need is the greatest, and in regions where dioxin hot spots are located.\" The RFA specifically calls for a needs assessment to be conducted in Bien Hoa and Phu Cat. Funding for PDSP was initially set at $9 million. ", "As part of PDSP's cooperative agreement, DAI was to award grants to local partners and organizations providing assistance to persons with disabilities, including health services, rehabilitation therapy, vocational training, and community awareness. In addition, USAID provided assistance to VNAH to work on disability policy and legal framework needs of the Government of Vietnam.", "The PDSP program was headquartered in Danang, and initially operated in the provinces of Binh Dinh, Danang, and Dong Nai\u2014where the three dioxin \"hot spots\" of Phu Cat, Danang, and Bien Hoa (respectively) are located. According to a June 2015 USAID update, the PDSP program has been extended to the provinces of Quang Nam, Tay Ninh, and Thua Thien-Hue. According to the Aspen Institute, all three provinces were heavily sprayed with Agent Orange during the Vietnam War, but have not been identified as \"hot spots.\" A USAID summary of the program after two years reported that \"nearly US$900,000 in grants to 14 local partners and organizations\" had been awarded.", "In June 2014, USAID adopted a new approach to the provision of assistance to persons with disabilities in Vietnam. According to the USAID statement, one of the key objectives of USAID assistance to Vietnam is to foster expanded opportunities to vulnerable populations, such as persons with disabilities. To that end, USAID aims \"to address key challenges for persons with disabilities through provision of direct assistance to improve health, independence, and participation in economic and social life.\"", "In addition to continuing to support changes in Vietnam's disability policies, USAID will finance the provision of physical, occupational, and speech therapies to persons with disabilities, as well as provide training to Vietnamese practitioners and technicians in the delivery of such services. Target areas for these programs are to be locations \"where disability prevalence and poverty rates are high.\" Among the identified locations are the provinces of Binh Dinh, Binh Phuoc, Dong Nai, Quang Nam, Tay Ninh, Thai Binh, and Thua Thien-Hue. All these provinces have been identified by the Aspen Institute as heavily sprayed areas, except Thai Binh. USAID, in consultation with various Vietnamese agencies, will directly administer the new approach. "], "subsections": []}, {"section_title": "Bien Hoa Airbase", "paragraphs": ["With the environmental cleanup of Danang airport completed, the two governments have begun jointly to explore undertaking a similar cleanup of the dioxin \"hot spot\" located at the Bien Hoa airbase. Bien Hoa airbase was the airport used for the most Agent Orange spraying missions during the war, and is where the most herbicide was stored and used by the U.S. military. One study of soil samples from the Bien Hoa airbase found a sample with a TEQ concentration at over 1,000 ppb\u2014higher than typical samples at the Danang airbase, and 1,000 times higher than the international limit. ", "The Vietnamese government has already conducted some mitigation measures to contain the dioxin contamination at Bien Hoa. A passive landfill (in which the contaminated soil is left untreated) containing 43,000 m 3 of contaminated soil excavated from the herbicide storage area was completed in 2009. However, the airbase has several other distinct dioxin \"hot spots\" that have not been addressed, according to a study conducted by a private consulting firm, Hatfield Consultants, hired by Office 33. The study also determined that contaminated soil had spread from the \"hot spots\" into nearby lakes, ponds, creeks, and drainage ditches, increasing the amount of soil and sediment that will require treatment. ", "The United Nations Development Programme (UNDP) has been working with Office 33 and MONRE for five years to map out the dioxin contamination at Bien Hoa airbase, and develop a master plan for dioxin remediation. According to their joint investigation, released in 2014, approximately 250,000 m 3 of soil would require decontamination with an estimated cost of at least $250 million. ", "In September 2013, USAID contracted CDM International Inc. to conduct an environmental assessment of the Bien Hoa airbase to examine a number of dioxin remediation alternatives. CDM International Inc. partnered with Hatfield Consulting on the project. In May 2016, USAID released the final environmental assessment report.", "The report determined that an estimated 408,500 to 495,300 m 3 of contaminated soils and sediments are located on or nearby the airbase, or about four to five times as much as is being treated at Danang airport. Five different treatment methods were considered, ranging from containment to in-pile thermal desorption (as was used in Danang). The estimated costs of the five methods ranged from $137 million (for containment in a landfill) to $794 million (using incineration and ex situ thermal treatment). The report noted, however, that these estimated costs may vary from 40% less to 75% more than the stated amounts, expanding the possible range to between $82 million and $1.4 billion. According to USAID, over $3.7 million has been obligated so far to assess the possible environmental remediation of Bien Hoa Airbase.", "In September 2017, Vietnam's Ministry of National Defence announced work on infrastructure construction for the dioxin decontamination of Bien Hoa airport. The construction, with a reported budget of $11.8 million, included demining operations, road construction, and removing facilities from contaminated areas. ", "On January 23, 2018, USAID and Vietnam's Ministry of National Defence signed a memorandum of intent (MOI) to begin the decontamination of Bien Hoa airport. U.S. Ambassador to Vietnam Daniel J. Kritenbrink reportedly said at the MOI signing ceremony, \"The United States looks forward to working with the Ministry of National Defence on this important initiative, deepening our partnership further, and building a prosperous future for both our countries.\" The MOI commits the two nations to work together to design a remediation program for the Bien Hoa airport. ", "USAID and the Ministry of National Defence signed a five-year, $183 million nonrefundable aid agreement on May 11, 2018, for the decontamination of Bien Hoa airport. At the time of the signing of the agreement, the project was projected to take 10 years at an estimated cost of $390 million. Approximately 500,000 cubic meters of soil, or nearly 50 hectares (123 acres) of land, are to be decontaminated. ", "In September 2018, the Ministry of National Defence signed a memorandum of understanding with the Japanese general contractor, Shimizu Corporation, to construct a decontamination factory at Bien Hoa airport. The factory reportedly will decontaminate the soil by a filtered sponge technique, and be capable of decontaminating 40 tons of soil per hour. The new technique is expected to cost about half as much as the in-pile thermal desorption used at Danang airport. ", "U.S. Secretary of Defense Jim Mattis visited Bien Hoa airport on October 17, 2018. During his tour of the former Agent Orange storage site, Secretary Mattis reportedly said, \"We had promised to help \u2026 so this is America keeping her promise to remediate some of the past.\" He also reportedly stated prior to the visit, \"I just want to get eyes on [the site] so when I go back and talk to Congress, I can tell them my impression with actually having seen the site.\" "], "subsections": []}, {"section_title": "Issues Before Congress", "paragraphs": ["Congressional interest in Agent Orange/dioxin in Vietnam has largely been focused on two issues. The first issue is determining the appropriate amount and type of assistance to provide to address the environmental damage and the health effects of dioxin contamination in Vietnam. The second issue is oversight of how such assistance has been utilized by the State Department and USAID."], "subsections": [{"section_title": "Funding Assistance", "paragraphs": ["Congress and the Obama Administration demonstrated a common interest in providing assistance to address the environmental remediation of Agent Orange and dioxin in Vietnam; the Trump Administration has indicated its support for the Agent Orange projects in Vietnam. The State Department regularly has requested funding for decontamination of dioxin \"hot spots\" in Vietnam in its budget request to Congress. ", "As described above, Congress has generally appropriated funds for health and disability services for persons residing in areas sprayed by Agent Orange and otherwise contaminated with dioxin. The State Department and USAID have utilized those funds for various programs for persons with disabilities regardless of the cause. In many, but not all, cases, those programs were conducted in locations near known Agent Orange \"hot spots.\" President Obama's budget requests to Congress did not include funding requests explicitly for health and disability assistance programs for areas sprayed with Agent Orange or otherwise contaminated with dioxin. The Obama Administration budget requests were for disability programs and/or \"vulnerable groups.\" ", "The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) continues the past practice of designating funds for health and disability services for places contaminated with Agent Orange/dioxin. Section 7043(h)(2) of the act, states", "Of the funds appropriated by this Act under the heading 'Development Assistance', not less than $12,500,000 shall be made available for health and disability programs in areas sprayed with Agent Orange and otherwise contaminated with dioxin, to assist individuals with severe upper or lower body mobility impairment or cognitive or developmental disabilities.", "The Victims of Agent Orange Relief Act of 2019 ( H.R. 326 ) would \"direct the Secretary of State, the Secretary of Health and Human Services, and the Secretary of Veterans Affairs to provide assistance for individuals affected by exposure to Agent Orange, and for other purposes.\" Section 3 would require the Secretary of State to \"provide assistance to address the health care needs of covered individuals. Such assistance shall include the provision of medical and chronic care services, nursing services, vocational employment training, and medical equipment.\" \"Covered individuals\" is defined as Vietnamese residents affected by health issues related to their exposure to Agent Orange between January 1, 1961, and May 7, 1975, or is \"the child or descendant of an individual\" who was exposed to Agent Orange during the designated time period. ", "Under Section 3, the Secretary of State would also be required to provide assistance \"to repair and rebuild substandard homes in Vietnam for covered individuals and the families of covered individuals.\" Section 4 would require the Secretary of State and the Secretary of Veterans Affairs to \"identify and provide assistance to support research relating to health issues of individuals affected by Agent Orange.\"", "Section 3 also would require the Secretary of State to provide assistance to \"institutions in Vietnam that provide health care for covered individuals,\" and to \"remediate those geographic areas of Vietnam that the Secretary determines contain high levels of Agent Orange.\" The section further states, \"the Secretary of State shall give priority to heavily sprayed areas, particularly areas that served as military bases where Agent Orange was handled, and areas where heavy spraying and air crashes resulted in harmful deposits of Agent Orange.\" ", "Section 8 states, \"Not later than 30 days after the last day of each fiscal quarter beginning on or after 18 months after the date of the enactment of this Act, the Secretary of State, the Secretary of Health and Human Services, and the Secretary of Veterans Affairs shall each submit to Congress a report on the implementation of the provisions of this Act applicable to such Secretary during the immediately preceding fiscal quarter.\""], "subsections": []}, {"section_title": "Oversight of Assistance", "paragraphs": ["Beyond determining the level of funding for environmental remediation and the provision of health services to Agent Orange/dioxin-contaminated locations in Vietnam, Congress has overseen the utilization of appropriated funds. With regard to environmental remediation, congressional oversight has focused on the rising cost of the cleanup effort at Danang airport, and the potential implications for funding for the proposed cleanup of Bien Hoa. With regard to USAID's provision of related health services, congressional oversight has focused on what some Members perceive to be a slow pace at which available funds are being obligated and changes in USAID's approach to administering those funds. ", "As noted above, the estimated total cost of the environmental remediation of Danang airport rose from $33.7 million in 2010 to $116 million. Members could point to cost overruns at Danang airport when Congress looks ahead to possibly funding a similar environmental remediation project at Bien Hoa airport, where a USAID study indicated that approximately 500,000 m 3 of soil\u2014about four to five times the amount at Danang\u2014is contaminated. ", "Although the Danang airport cleanup experienced rising costs and delays, USAID was able to keep the project going and the funding flowing. USAID has not been as successful in utilizing the funds provided for health services to areas contaminated with Agent Orange/dioxin. According to information provided by USAID, 63.5% of the funds appropriated in FY2011 to FY2017 have been obligated. In addition, USAID's approach to utilizing health services funds has shifted from direct obligation by USAID, to establishing a cooperative agreement to administer the funds, and back again to direct obligation by USAID. Some observers question whether the health services funds are being used effectively, and in accordance with congressional priorities. The specific language in Section 7043(h)(2) of Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) and H.R. 326 regarding health and/or disability assistance to Vietnam may in part reflect congressional dissatisfaction with State Department and USAID management of previously appropriated funds."], "subsections": [{"section_title": "Appendix. Text of Public Laws Appropriating Funds for Environmental Remediation and Health and Disability Services in Vietnam", "paragraphs": ["Congress has included language in legislation indicating that it is appropriating funds for environmental remediation and health and disability services in Vietnam. The precise amounts appropriated, however, in most cases have been stipulated in either an accompanying report or explanatory statement. The table below provides the relevant text in the public law, as well as the associated language in the accompanying report or explanatory statement."], "subsections": []}]}]}]}}
{"id": "R45725", "title": "Shipping Under the Jones Act: Legislative and Regulatory Background", "released_date": "2019-05-17T00:00:00", "summary": ["The Jones Act, which refers to Section 27 of the Merchant Marine Act of 1920 (P.L. 66-261), requires that vessels transporting cargo from one U.S. point to another U.S. point be U.S.-built, and owned and crewed by U.S. citizens. The act provides a significant degree of protection for U.S. shipyards, domestic carriers, and American merchant sailors. It is a subject of debate because some experts point out that it leads to high domestic ocean shipping costs and constrains the availability of ships for domestic use. The Jones Act has come into prominence amid debates over Puerto Rico's economic challenges and recovery from Hurricane Maria in 2017; in the investigation into the sinking of the ship El Faro with 33 fatalities during a hurricane in 2015; and in discussions about domestic transportation of oil and natural gas. The law's effectiveness in achieving national security goals has also been the subject of attention in conjunction with a congressional directive that the Administration develop a national maritime strategy, including strategies to increase the use of short sea shipping and enhance U.S. shipbuilding capability.", "The Jones Act of 1920 was not the first law requiring that vessels transporting cargo domestically be U.S.-built, owned, and crewed. It restated a long-standing restriction that was temporarily suspended during World War I. Since 1920, Congress has enacted provisions that could be said to tighten Jones Act requirements as well as provisions that exempt certain maritime activity from the requirements. In 1935, Congress forbade Jones Act-qualified vessels that were sold to foreign owners or registered under a foreign flag to subsequently requalify as Jones Act-eligible (P.L. 74-191). This provides additional protection from competition for Jones Act carriers if coastal shipping demand increases, because it can take around two years to construct a new ship. In 1940, Congress expanded the Jones Act to include towing and salvage vessels (P.L. 76-599). In 1988, Congress specified that waterborne transport of valueless material required use of a Jones Act-qualified vessel, such that transport of dredge spoil or municipal waste would fall under the law (P.L. 100-329). Generally, dredging and towing vessels, as well as Great Lakes ships, have occasioned less debate about the Jones Act than oceangoing ships and offshore supply vessels.", "Congress has enacted numerous exemptions or exceptions to the Jones Act. In some cases, Congress has enacted an exemption if there are no Jones Act-qualified carriers interested in providing service in a particular market (for example, passenger travel to and from Puerto Rico). Congress has allowed waivers of the Jones Act for national defense reasons, which most often have been executed to speed fuel deliveries to a region after a natural disaster disrupted normal supply lines.", "Regulatory interpretations of the Jones Act have been significant in defining what constitutes a \"U.S.-built\" vessel, what constitutes \"transportation\" between two U.S. points, and what are \"U.S. points.\" The Coast Guard has determined that a U.S.-built vessel can be assembled with major foreign components such as engines, propellers, and stern and bow sections. This interpretation has been consistent from the late 1800s. Customs and Border Protection (CBP) has determined that cruise ship voyages that involve visits to foreign ports in addition to a domestic port are not domestic transportation and therefore not subject to the Jones Act. This interpretation also dates to the late 1800s. CBP's interpretations of what constitutes domestic transportation and U.S. points are significant to the offshore oil industry, as some of the vessels supporting that industry must be Jones Act-compliant while others need not be.", "By long-standing agreement, the military is to utilize U.S.-flag commercial ships for sealift before it utilizes government-owned vessels in its reserve fleet. Jones Act mariners are expected to crew sealift ships when needed, and thus the decades-long shrinkage of the oceangoing Jones Act fleet and mariner pool has been raised as a concern. The Department of Defense is planning to buy more used foreign-built ships for sealift rather than building them in the United States for cost reasons. It also has found that repairing its current fleet in U.S. shipyards is three times more expensive and has taken twice as long as estimated.", "Much of the commercial fleet is relatively old, raising safety concerns. Some useful types of ships are missing from the Jones Act-qualified fleet, such as heavy-lift vessels, liquefied natural gas (LNG) tankers, and deepwater offshore construction vessels. Both situations appear to some observers to be contrary to the policy goal of the Jones Act, which is to \"have a merchant marine of the best equipped and most suitable types of vessels sufficient to carry the greater portion of its commerce and serve as a naval or military auxiliary in times of war or national emergency.\""], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Jones Act, which refers to Section 27 of the Merchant Marine Act of 1920 (P.L. 66-261), requires that vessels transporting cargo from one U.S. point to another U.S. point be U.S.-built, and owned and crewed by U.S. citizens. The act provides a significant degree of protection from foreign competition for U.S. shipyards, domestic carriers, and American merchant sailors. It is a subject of debate because some experts point out that it makes domestic ocean shipping relatively expensive, constrains the availability of ships, and contributes to making it much more costly to build merchant vessels in U.S. shipyards than in shipyards abroad. ", "The Jones Act has been an issue in recent Congresses, coming into prominence amid debates over Puerto Rico's economic challenges and recovery from Hurricane Maria in 2017; in the investigation into the sinking of the 40-year-old ship El Faro with 33 fatalities during a hurricane in 2015; and in discussions about domestic transportation of oil and natural gas. The law's effectiveness in achieving national security goals has also been the subject of attention in conjunction with a congressional directive that the Administration develop a national maritime strategy, including strategies to increase the use of short sea shipping and enhance U.S. shipbuilding capability. In May 2018, the Office of Management and Budget requested public comment on federal requirements that could be modified or repealed to increase efficiency and reduce or eliminate unnecessary or unjustified regulatory burdens in the maritime sector. "], "subsections": []}, {"section_title": "Legislative Context", "paragraphs": ["The Jones Act of 1920 was not the first law requiring that vessels transporting cargo domestically be U.S.-built, owned, and crewed. Rather, it was a restatement of a long-standing restriction that was temporarily suspended during World War I by P.L. 65-73, enacted October 6, 1917. ", "Laws favoring a U.S.-flag fleet over a foreign fleet were initiated by the third act of the First Congress (1 Stat. 27, enacted July 20, 1789), which assessed lesser duties on vessels built and owned domestically than on those foreign-built and -owned. On September 1 of the same year, Congress specified that only a U.S.-built vessel owned by U.S. citizens and with a U.S. citizen captain could register as a U.S. vessel (1 Stat. 55). In 1817, Congress enacted a precursor to the Jones Act by disallowing any vessel wholly or partially foreign-owned from transporting domestic cargo between U.S. ports (3 Stat. 351). In 1886, this prohibition was extended to vessels transporting passengers domestically (24 Stat. 81). ", "The early United States had a comparative advantage in shipbuilding due to its ample supplies of large timber. During the second half of the 1800s, it lost that advantage as wooden sailing ships gave way to iron steamships, with the advantage shifting to Scotland and England. Congress began debating how to respond to the steep drop-off in the share of U.S. foreign trade carried by U.S. vessels. The fall-off in domestic coastwise transport was less severe, but railroads began offering competition to coastal shipping. Proposals to allow foreign-built vessels to sail under the U.S. flag became known as the \"free ship\" movement. Opponents of the free ship movement argued that the higher cost of U.S. crews in and of itself would prevent a resurgence of trade carried by U.S. vessels even if foreign-built ships were allowed. While bills that would have allowed foreign-built vessels to qualify for U.S.-flag international service were reported by House and Senate committees in the late 1800s, it was in 1912 that Congress enacted such a measure (P.L. 62-33, 37 Stat. 562). Thus, since 1912, the domestic build requirement has principally applied to vessels making domestic voyages. ", "In the late 1800s, Congress considered but did not pass bills that would have allowed foreign-built ships in domestic trade. Rather, Congress tightened the language concerning coastwise transport in response to shippers' attempts to avoid high-cost U.S. vessels. For instance, in 1891 a shipper loaded 250 kegs of nails at the Port of New York with an ultimate destination of Los Angeles (Redondo).The shipper loaded the merchandise on a foreign-flag ship bound for Antwerp, Belgium, where the goods were transferred to another foreign-flag ship bound for Los Angeles. Despite the circuitous routing and extra port charges, the freight charges were apparently less than they would have been using a U.S.-built and U.S.-owned ship to carry the nails directly between New York and Los Angeles. A court found that the shipper had acted legally. Similarly, shipments from Seattle to Alaska often were routed via Vancouver, Canada, so shippers could use foreign-flag ships for both legs. Congress amended the coastwise law in 1893 (27 Stat. 455) and again in 1898 (30 Stat. 248) to prohibit shippers from routing cargo through a foreign port so as to avoid coastwise laws. ", "Nonetheless, U.S. shippers continued to use foreign-flag vessels in the Alaska trade by moving cargo between the United States and Vancouver, Canada, by rail. In the Merchant Marine Act of 1920, Senator Wesley Jones of Washington, chair of the Commerce Committee, sought to stop this practice by requiring Alaska-bound cargo to move through the Port of Seattle by amending the coastwise language to cover shipments \"by land and water\" and replacing shipments between \"U.S. ports\" with shipments between \"U.S. points.\" These amendments remain current law. "], "subsections": [{"section_title": "Shipbuilding Costs Debated", "paragraphs": ["The relative cost of building ships in the United States versus foreign countries was part of the debate leading up to passage of the Jones Act. Four years earlier, in the Shipping Act of 1916, Congress had requested annual reports on the subject from the federal agency in charge of maritime transportation. The minority report to a 1919 House committee report to the bill that would become the Jones Act expressed the view that banning foreign-built ships would result in more costly domestically built ships:", "\u2026 in order to build up and sustain an American merchant marine it is absolutely necessary to remove every restriction against American merchants acquiring ships, whether built in the United States or out of the United States, at the lowest possible price, in order to enable them to compete with other nations in the transportation of the commerce of the world. If our merchants are allowed to buy ships in the open world market and place them under American registry with the privilege of using them both in the coastwise and overseas trade, it will inevitably follow that ships under the American flag will be bought as cheaply as ships under other flags.", "On the other hand, if the American merchant shall be permitted to buy ships only from American builders in order to engage in our coastwise trade, it necessarily follows that every ship built in the United States will command a higher price than any foreign-built ship.", "Our American iron and steel manufacturers were unable to compete until they had to. When they had to they did compete successfully. Our shipbuilders can and will do likewise.", "A 1922 government report on shipbuilding indicated that U.S.-built ships cost 20% more than those built in foreign yards. The cost differential increased to 50% in the 1930s. In the 1950s, U.S. shipyard prices were double those of foreign yards, and by the 1990s, they were three times the price of foreign yards. Today, the price of a U.S.-built tanker is estimated to be about four times the global price of a similar vessel, while a U.S.-built container ship may cost five times the global price, according to one maritime consulting firm. The cost differential is also an issue for Department of Defense officials in charge of military sealift ships. As discussed later in this report, the military has modified a plan to build sealift ships domestically, finding it unaffordable, and instead will buy more used foreign-built cargo ships. Since U.S. shipyards do not build vessels for export, they are not required to compete with foreign shipyards on price or vessel characteristics.", "However, as was argued in the late 1800s, shipbuilding costs are not the only cost factor. U.S. crewing costs are higher than those of foreign-flag vessels. U.S.-flag ships have an operating cost differential estimated to be over $6 million per ship per year compared to foreign-flag ships. While crewing is the primary cost element, this estimate also includes insurance and ship maintenance costs. A 2011 study by the U.S. Maritime Administration (MARAD) found that in 2010, the average operating cost of a U.S.-flag ship was 2.7 times greater than a foreign-flag ship, but MARAD estimates that this cost differential has since increased. "], "subsections": []}, {"section_title": "Statement of U.S. Maritime Policy", "paragraphs": ["A main thrust of the Merchant Marine Act of 1920 concerned the sale of a surplus of government cargo ships constructed for World War I. A second important and enduring aspect of the bill is its statement of maritime policy. The policy goals stated in the 1920 act, which appear in Section 27, have continued to the present day (46 U.S.C. \u00a750101). The law stated the following:", "That it is necessary for the national defense and for the proper growth of its foreign and domestic commerce that the United States shall have a merchant marine of the best equipped and most suitable types of vessels sufficient to carry the greater portion of its commerce and serve as a naval or military auxiliary in times of war or national emergency, ultimately to be owned and operated privately by citizens of the United States; and it is hereby declared to be the policy of the United States to do whatever may be necessary to develop and encourage the maintenance of such a merchant marine. ", "This statement reflects the United States' status as an emerging power at that time. When World War I began in 1914, European nations utilized their ships for the war effort or kept them in harbors for fear of submarine attacks, leaving the United States with a shortage of ships for carrying its foreign trade. The Merchant Marine Act therefore emphasized that the United States should have its own merchant marine so as not to be dependent on any other nations' merchant vessels. "], "subsections": []}]}, {"section_title": "What the Jones Act Requires", "paragraphs": ["The Jones Act applies only to domestic waterborne shipments. It does not apply to the nation's international waterborne trade, which is almost entirely carried by foreign-flag ships. The U.S. citizen crewing requirement means that the master, all of the officers, and 75% of the remaining crew must be U.S. citizens. If the U.S. owner of a Jones Act ship is a corporation, 75% of the corporation's stock must be owned by U.S. citizens. ", "Regarding U.S. territories, the U.S. Virgin Islands, America Samoa, and the Northern Mariana Islands are exempt from the Jones Act. Therefore, foreign-flag ships can transport cargo between these islands and other U.S. points. Puerto Rico is exempt for passengers but not for cargo. Vessels traveling between Guam and another U.S. point must be U.S.-owned and -crewed but need not be U.S.-built. "], "subsections": []}, {"section_title": "Regulatory Background", "paragraphs": ["The Coast Guard is in charge of enforcing the U.S.-build requirement for vessels (46 C.F.R. \u00a7\u00a767.95-67.101), U.S. ownership of the carriers (46 C.F.R. \u00a7\u00a767.30-67.43), and U.S. crewing (46 C.F.R. \u00a710.221)\u2014essentially, the licensing of Jones Act operators. It enforces these requirements when an operator seeks a \"coastwise endorsement\" (46 C.F.R. \u00a767.19) from the agency. The terms \"coastwise qualified\" and \"Jones Act qualified\" are synonymous. Customs and Border Protection (CBP) is primarily responsible for determining what maritime activity falls under the act, namely defining what constitutes \"transportation\" and whether the origin and destination of a voyage are \"U.S. points\" (19 C.F.R. \u00a7\u00a74.80\u20134.93). Agency interpretations of domestic shipping restrictions have been consistent since the late 1800s and early 1900s, as discussed further below."], "subsections": [{"section_title": "\"U.S.-Built\" Vessel Defined", "paragraphs": ["A significant element of the Jones Act is the requirement to use only \"U.S.-built\" vessels. Competing freight transportation modes have no requirement to purchase only domestically built equipment. Congress has not defined what constitutes a U.S.-built vessel, leaving this determination to the Coast Guard. Coast Guard regulations deem a vessel to be U.S.-built if (1) all \"major components\" of its hull and superstructure are fabricated in the United States, and (2) the vessel is assembled in the United States. The \"superstructure\" means the main deck and any other structural part above the main deck (e.g., the bridge, forecastle, pilot house). ", "The Coast Guard holds that propulsion machinery (the ship's engine), other machinery, small engine room equipment modules, consoles, wiring, piping, certain mechanical systems and outfitting have no bearing on a U.S.-build determination. Consequently, for oceangoing ships, U.S. shipyards typically import engines from foreign manufacturers. This is allowed because engines are deemed components that are attached to the hull rather than an integral part of the hull's structure. A ship part or component that is self-supporting and independent of the vessel's structure and does not contribute to the overall integrity of the vessel or compromise the watertight envelope of the hull can be manufactured in a foreign country. However, the part or component must be attached or joined to the vessel in a U.S. shipyard, not an overseas yard. ", "The Coast Guard's test for \"major components\" of the hull or superstructure is based on weight; up to 1.5% of the steel weight of hull and superstructure components can be manufactured abroad. By this reasoning, the propeller, stern bulb, bulbous bow, some rudders (depending on their design), and watertight closures used in U.S.-built vessels are often imported, as long as they (in the aggregate) do not exceed the steel weight limit. The Coast Guard also permits steel products in standard forms (\"off the shelf\") to be imported with no limit on their weight, but any shaping, molding, and cutting of the steel that is custom to the design of the vessel must be performed in a U.S. shipyard.", "Shipyards typically seek confirmation from the Coast Guard that incorporating certain foreign-built components in construction of a vessel will not disqualify the vessel from the Jones Act trade. These \"determination letters\" written by the Coast Guard detail which and to what extent foreign components are permissible. In the Coast Guard Authorization Act of 2018 ( P.L. 115-282 , \u00a7516) Congress directed the Coast Guard to publish these letters.", "Shipyard unions refer to ships built in this manner as \"kit ships.\" They sued the Coast Guard in 2007, arguing that the Coast Guard's interpretation of the statute violated the Administrative Procedure Act. The U.S. District Court for the Eastern District of Pennsylvania sided with the Coast Guard, noting in part that the Coast Guard's interpretation is rooted and consistent with the Treasury Department's interpretation dating to at least the late 1800s (the Treasury Department was the agency of jurisdiction at that time), as well as U.S. Attorney General interpretations dating to the early 1900s. The shipyard unions' lawsuit was prompted by a Philadelphia shipyard's partnership with a South Korean shipbuilder, begun in 2004, to use the Korean builder's ship designs and other procurement services to build a series of Jones Act tankers. This partnership continues today and also includes container ships built in the Philadelphia shipyard. Since 2006, General Dynamics NASSCO of San Diego, another builder of Jones Act oceangoing ships, has partnered with Daewoo Shipbuilding of South Korea to procure vessel designs, engineering, and some of the materials for the commercial ships it has since built for Jones Act carriers.", "Importing engines and other major ship components would appear to undermine the Jones Act policy objective of a domestic shipbuilding capability independent of foreign yards. In the court case cited above, the shipyards argued that not allowing use of such foreign components would increase the cost of ships further. This would reduce orders for new ships and harm the domestic fleet. "], "subsections": []}, {"section_title": "Passenger Vessel Itineraries", "paragraphs": ["The United States is the largest cruise ship market, but most Americans board foreign-flag cruise ships. This is because CBP has determined that a cruise ship serving a U.S. port does not have to be Jones Act-compliant as long as it has visited a distant foreign port (any port outside North and Central America, Bermuda, the Bahamas, and the Virgin Islands). Thus, for example, if a cruise ship includes Aruba or Curacao in its itinerary, it does not need to be Jones Act-compliant. The reasoning is that the main objective of such a cruise itinerary is to visit such foreign ports, not to transport passengers from one U.S. port to another U.S. port. This reasoning was articulated in a 1910 Attorney General's opinion. ", "Another significant regulatory interpretation allowing for the prevalence of foreign cruise ships at U.S. ports is a 1985 rulemaking by the U.S. Customs Service (the predecessor of CBP). In this rulemaking, Customs allowed foreign-flag cruise ships to make round trips from a U.S. port and to visit other U.S. ports as long as they also include a visit to a nearby foreign port (such as those in Canada, Mexico, or Bermuda). All passengers must continue with the cruise until the cruise terminates at the same dock at which it began. Again, the reasoning is based on the primary intent of the cruise voyage; if the main purpose of the voyage is not domestic transportation of passengers then the Jones Act is not violated.", "Another type of passenger vessel excursion involves visits to no other ports. The purpose of the voyage could be whale watching, recreational diving, gambling, duty-free shopping, or deep-sea fishing, for example. These are so-called \"voyages to nowhere\" since passengers do not visit any other ports besides the one at which they embark and disembark. In these cases, CBP has determined that if such vessels stay within the 3-mile zone of U.S. territorial waters they must be Jones Act-compliant since CBP considers any places within such waters as \"U.S. points.\" This interpretation is based on Treasury Decision 22275, issued in 1900. However, CBP has determined that if the vessel journeys beyond 3 miles from shore (into international waters), then it does not need to be Jones Act-compliant. This determination is based on a 1912 Attorney General opinion. But the policy regarding charter fishing boats differs from that regarding other passenger vessels. If charter fishing boats venture into international waters, they still must be Jones Act-compliant. This determination is by virtue of a 1936 ruling by the Bureau of Navigation and Steamboat Inspection (Circular Letter No. 103, June 3, 1936), and affirmed by Treasury Decision 55193(2) in 1960.", "Another element of CBP's interpretation of the Jones Act with respect to passenger vessels is its definition of a passenger. According to CBP, a passenger need not be a paying customer (such as a tour boat or cruise ship ticket holder); rather, the term encompasses anyone aboard a vessel who is not a member of the crew or an owner of the vessel. Thus, for example, an owner of a yacht who chooses to entertain business clients aboard his or her vessel must comply with the Jones Act. A construction company transporting construction workers to a construction site must use a Jones Act-compliant vessel."], "subsections": []}, {"section_title": "Offshore Oil and Gas Vessels", "paragraphs": ["In the offshore oil market, CBP's interpretations have affected \"lightering\" (the transfer of oil offshore from an oil tanker too large to transit a harbor to a smaller vessel) and offshore supply vessels (OSVs) used to supply oil platforms. CBP has determined that if a tanker to be lightered is anchored to the seabed and within 3 nautical miles of shore (which are U.S. territorial waters), it is a \"U.S. point.\" Many lightering areas in the Gulf of Mexico are 60 to 80 miles offshore and therefore the lightering vessels can be foreign-flagged. Lightering operations in the Delaware Bay and elsewhere are within the 3-mile zone, and therefore lightering vessels operating in these areas must be Jones Act-compliant (in which case tank barges rather than ships are typically used as lighters).", "Regarding OSVs, two factors determine whether these vessels must be Jones Act-compliant in servicing offshore oil rigs. By virtue of the Outer Continental Shelf Lands Act of 1953 (P.L. 83-212), U.S. waters extend 200 miles offshore strictly for purposes related to the exploration, development, and production of offshore natural resources. CBP has determined that within this zone, only oil rigs attached to the seabed (anchored or submerged to) are \"U.S. points.\" Another type of oil rig is not attached to the seabed: some mobile offshore drilling units (MODUs) are semisubmerged and can hold their positions with the use of propellers. CBP had determined that MODUs not attached to the seabed are not \"U.S. points,\" and therefore foreign-flagged vessels were permitted to service these units. However, in 2008, Congress required that OSVs servicing MODUs be U.S.-owned and -crewed, but need not be U.S.-built ( P.L. 110-181 , \u00a73525), which is the same requirement applied to U.S.-flag vessels engaged in international voyages. ", "A second factor determining whether OSVs must be Jones Act-compliant is whether the OSV is transporting supplies or workers to the oil rig, or if the vessel is involved in installing equipment necessary for the operation of the rig. CBP defines \"vessel equipment\" as anything \"necessary and appropriate for the navigation, operation or maintenance of a vessel or for the comfort and safety of persons on board.\" Consequently, a vessel laying cable or pipeline in U.S. waters does not need to be Jones Act-compliant. Similarly, while OSVs transporting supplies and rig workers must be Jones Act-compliant (if the rig is attached to the seabed), vessels involved in installing rig equipment or conducting geophysical surveying or diving inspections can be foreign-flagged, as well as \"flotels,\" which are vessels that provide living quarters for construction workers. The distinction can be unclear. In 2017, CBP proposed that most or all activities performed by OSVs fall under the Jones Act, but after reviewing comments, the agency withdrew the proposal. "], "subsections": []}, {"section_title": "Offshore Wind Farms", "paragraphs": ["Some question whether the Outer Continental Shelf Lands Act, and therefore the Jones Act, applies to offshore wind farms located beyond 3 miles from shore. Currently, wind farm developers are being guided by CBP's interpretations of the Jones Act with respect to OSVs and oil rigs. The Department of Energy has noted that the nonavailability of Jones Act-compliant \"Tower Installation Vessels\" (TIVs) can be a hindrance to offshore wind farm development, especially for installations in deeper water. In Europe, TIVs not only install the towers but also transport the equipment from shore to the offshore site. Since there are no Jones Act-compliant TIVs, U.S. wind developers either transport the equipment from foreign countries or use Jones Act-compliant vessels to transport the equipment to the site from a U.S. port alongside non-Jones Act-compliant TIVs to install the equipment. "], "subsections": []}, {"section_title": "Foreign Blending Ports", "paragraphs": ["A third CBP interpretation of the Jones Act has been significant in shaping coastal maritime activity. CBP determined that if merchandise is transformed (manufactured or processed) into a new and different product at an intermediate foreign port, then the vessels transporting the original product from a U.S. port to this foreign port and transporting the transformed product from the foreign port to a U.S. port do not need to be Jones Act-compliant. For example, a Texas oil producer has shipped a gasoline product to a Bahamian storage facility where its product is blended with a different imported petroleum product to produce a final gasoline product that is shipped to New York. Foreign-flag tankers are allowed to make all of these shipments even though it could be argued that a portion of the cargo is being shipped between two U.S. points (Texas and New York). The transformation of the product into a new and different product at an intermediate foreign port distinguishes this case from the 1891 kegs-of-nails case mentioned above. This interpretation has precedent in a 1964 Customs Service ruling involving California rice being processed in the U.S. Virgin Islands (exempt from the Jones Act) before being shipped to Puerto Rico, with both shipment legs involving foreign-flag ships. "], "subsections": []}]}, {"section_title": "The Jones Act Since 1920", "paragraphs": ["Since 1920, Congress has enacted provisions that could be said to tighten Jones Act requirements, as well as provisions that exempt certain maritime activities from the requirements. In 1935, Congress forbade Jones Act-qualified vessels sold to foreign owners or registered under a foreign-flag to subsequently requalify as Jones Act-eligible (P.L. 74-191), meaning that they could never again be used in U.S. domestic trade. This provides additional protection from competition for Jones Act carriers if coastal shipping demand increases, because it can take two years to construct a new ship. In 1940, Congress expanded the Jones Act to cover towing vessels, such as river tugs that push barge tows and harbor tugs that assist larger ships, and salvage vessels operating in U.S. waters (P.L. 76-599). In 1988, Congress specified that waterborne transport of valueless material, such as dredge spoil or municipal solid waste, requires use of a Jones Act-qualified vessel ( P.L. 100-329 )."], "subsections": [{"section_title": "Precedents for Exempting the Jones Act", "paragraphs": ["Congress has enacted numerous exemptions or exceptions to the Jones Act. A list of these legislated exemptions and exceptions can be found in the Appendix .", "It has waived the Jones Act's restrictions when finding that no Jones Act-qualified operator was interested in providing service in a particular market, reasoning that the waiver thus would bring no harm to the domestic maritime industry. For instance, in 1984, Congress exempted passenger travel between Puerto Rico and any other U.S. port as long as no Jones Act-qualified operator was able to provide comparable service ( P.L. 98-563 ). This exemption remains in force, allowing foreign-flag cruise ships to carry passengers between the U.S. mainland and the island. On two occasions, in 1996 ( P.L. 104-324 ) and again in 2011 ( P.L. 112-61 ), Congress has permitted certain foreign-flagged liquefied natural gas (LNG) tankers to provide domestic service because none existed in the Jones Act fleet; no ship owners have made use of these exemptions (see Table A-1 ). ", "Congress has also enacted exemptions due to a sudden spike in demand for Jones Act-qualified vessels. To address a vessel shortage, Congress enacted an exemption for iron ore carried on the Great Lakes during the 1940s that was related to a surge in steelmaking for the war effort. It did the same for a bumper grain harvest in 1951 (see Table A-1 ). In 1996, Congress enacted an exemption for vessels participating in oil spill cleanup operations when an insufficient number of Jones Act-qualified vessels are available. ", "Congress has enacted Jones Act waivers for two innovations in vessel designs used in foreign trade but whose cargo operations included domestic legs that technically would otherwise fall under the Jones Act. One concerned a ship designed to carry river barges on international voyages, a technology known as Lighter Aboard Ship (LASH). In 1971, Congress exempted these specific barges from the Jones Act (P.L. 92-163). The exemption is no longer relevant, as this type of shipping is not now in use. In 1965, as container ships were about to come into use internationally, Congress exempted the movement of empty containers between U.S. ports from the Jones Act (P.L. 89-194). This exemption is restricted to containers used for international shipments, thus allowing the foreign-flagged container carriers to reposition their empty equipment along U.S. coastlines.", "Jones Act-compliant ships are necessary for transshipment of loaded international containers. This distinction between carriage of loaded and unloaded containers has ramifications for the development of marine highways or short sea shipping routes. Transshipment of international containerized cargo by feeder ships is prevalent abroad, but the practice does not exist in the United States. The Jones Act would require such ships be U.S.-built, -crewed, and -owned. Lack of transshipment services increases demand for rail and road connections to ports, as smaller feeder container ships do not play a role in distributing international containerized cargo among U.S. ports."], "subsections": [{"section_title": "Waivers for Specifically Named Vessels", "paragraphs": ["In addition to authorizing exemptions to the Jones Act under certain circumstances, Congress has enacted exemptions for specific vessels identified by name and identification number (a registration number with a state government, the Coast Guard, or International Maritime Organization). Typically, the legislative language does not indicate why a waiver was needed or describe the kind of vessel, its size, or its function. A search of the statutes at large under the terms \"coastwise\" and \"endorsement\" and \"certificate of documentation\" indicates that since 1989, at least 133 specific vessels have been granted Jones Act waivers by Congress in 16 separate legislative acts.", "These waivers typically appear in maritime-related legislation, such as a Coast Guard authorization bill. One act contains waivers for 67 vessels and another for 35 vessels. It appears in most cases that these vessels are not commercially significant\u2014for instance, that they are not large or even moderately sized cargo or passenger vessels. Some of them are owned by nonprofit entities. One exception was the previously mentioned 2011 granting of waivers to three LNG tankers built in the United States in the late 1970s that subsequently became foreign-registered ( P.L. 112-61 ). In many cases, it appears the vessel needs a waiver because of a technicality in meeting Jones Act requirements; for example, the U.S.-citizen ownership history may be missing some records. In many cases, the statute granting the waiver places specific conditions on how the vessel can be used."], "subsections": []}, {"section_title": "Administrative Waivers in The Interest of National Defense", "paragraphs": ["As noted, the domestic shipping restrictions were waived during World War I. They were waived again in preparation for World War II (P.L. 77-507, 1942). In 1950, after the Korean War began, Congress enacted a provision allowing the executive branch to issue waivers \"in the interest of national defense\" (P.L. 81-891). This authority is still in effect, as the language did not specify that it was intended only for the conduct of that war. In 1991 and 2011, waivers were granted on national defense grounds to expedite oil shipments from the Strategic Petroleum Reserve in response to the Persian Gulf War and a conflict in Libya, respectively.", "In addition to military conflicts, the executive branch has waived the Jones Act for fuel resupply in the aftermath of natural disasters. This so-called \"national defense waiver\" authority has been the basis for recent waivers granted in the aftermath of major hurricanes, beginning with Hurricane Katrina in 2005 up to and including Hurricanes Harvey, Irma, and Maria in 2017 (see Table A-2 ). In 2008 ( P.L. 110-417 ), Congress inserted a role for MARAD to check on the availability of any Jones Act-qualified vessel before granting certain waivers.", "The lack of heavy-lift vessels in the Jones Act fleet has also prompted national defense waivers: in 2005 to allow a foreign-flag heavy-lift vessel to transport a radar system from Texas to Hawaii and in 2006 to allow an oil company to use a Chinese-flagged heavy-lift vessel to transport an oil rig from the Gulf Coast to Alaska. The national defense justification for the oil rig waiver was apparently based on addressing a fuel shortage in that region of Alaska. However, in 1992, Customs denied a waiver request to use a foreign-flag heavy-lift vessel to transport replicas of Christopher Columbus's Ni\u00f1a, Pinta, and Santa Maria vessels from Boston to San Francisco. A specific type of heavy-lift vessel is used in the construction of offshore oil rigs, but CBP has denied Jones Act waivers for these vessels even after Coast Guard and the Bureau of Safety and Environmental Enforcement in the Department of the Interior advised that not granting a waiver created a safety hazard for these operators. ", "CBP has stated that the \"national defense\" justification is a high standard and that national defense waivers would not be issued for economic reasons such as commercial practicality or expediency. Consistent with this view, while CBP has issued national defense waivers in circumstances involving fuel shortages, it has not issued waivers that would merely favor domestic supply lines over offshore ones, even though one might argue the latter is a national security issue. For instance, in 1976, arguing that offshore supply lines are more vulnerable, some Members of Congress representing Gulf Coast states sought to have the Jones Act extended to the U.S. Virgin Islands. At the time, the largest refinery in North America was located in the U.S. Virgin Islands, and the refinery supplied petroleum products to the U.S. Northeast on foreign-flagged tankers. In 2014, northeast refineries reportedly contemplated seeking a Jones Act waiver to ship crude oil from Texas. These refineries import much of their crude oil. In 2018, the United States exported between 40 million and 80 million barrels of crude oil per month on foreign-flag tankers, imported about 150 million barrels per month from overseas sources on foreign-flag tankers, and shipped about 15 million barrels per month domestically on Jones Act tankers. ", "A similar situation is occurring with liquefied natural gas (LNG): the United States has begun exporting substantial quantities by ship while continuing to import LNG by ship, but no LNG is shipped domestically. There are no LNG tankers in the Jones Act fleet, and it is unclear why shippers have not utilized the 1996 or 2011 waivers for LNG tankers mentioned above. Puerto Rico, which currently imports LNG from Trinidad and Tobago, is seeking a 10-year waiver of the Jones Act to receive bulk shipments of LNG from the U.S. mainland."], "subsections": []}]}]}, {"section_title": "The Jones Act Fleet", "paragraphs": ["Recent controversies over the Jones Act have concerned the oceangoing ship and offshore supply vessel sectors. The Jones Act also covers ships on the Great Lakes, river barges, harbor tugs, dredging vessels, and various kinds of passenger vessels. The Jones Act ship fleet, in particular, has shortcomings compared to the merchant fleet desired by the drafters of the 1920 act as they described it in the aforementioned statement of U.S. maritime policy. "], "subsections": [{"section_title": "Oceangoing Ships", "paragraphs": ["As of March 2018, there were 99 oceangoing ships in the Jones Act-compliant fleet, employing about 3,380 mariners. The largest category of Jones Act ships is tankers. Of the 57 tankers in the fleet, 11 carry Alaskan crude oil to refineries on the West Coast, 44 are medium-sized product tankers that mostly carry refined products along the Atlantic Coast, and 2 are chemical or asphalt tankers. The dry cargo fleet includes 24 small to medium-sized container ships, 7 ships that have ramps for carrying vehicles (known as roll on/roll off vessels), and 2 dry bulk vessels designed to carry such commodities as grain and coal in bulk form. The fleet also includes 9 relatively small general-cargo vessels supplying subsistence harbors along Alaska's coast. ", "As Figure 1 indicates, the number of oceangoing ships in the Jones Act fleet has shrunk to less than a quarter of what it was in 1950. The ships are much larger today than they were then, but their aggregate carrying capacity (DWT) is still less than in 1950. ", "As shown in the figure, there was a pronounced drop in the size of the fleet in the late 1950s and early 1960s. At a 1967 congressional hearing, Alan Boyd, Secretary of Transportation in the Lyndon B. Johnson Administration, testified that the U.S. merchant marine was \"too small, too old, and too unproductive,\" and stated, \"you do not revitalize an industry by flooding it with Federal dollars and imprisoning it within a wall of protection.\" The Lyndon B. Johnson Administration appears to be the only Administration in the modern era that has called for the repeal of the Jones Act.", "While domestic ships are carrying fewer tons of freight today than they did in the 1950s, their most direct competitors, railroads and pipelines, are carrying more. Domestic ships have lost market share to land modes even though ships have economic advantages. Ocean carriers do not need to acquire and maintain rights-of-way like railroads and pipelines. They can move much more cargo per trip and per gallon of fuel than trucks and railroads. Although ships are slower than truck and rail modes, many shippers are willing to sacrifice transit time for substantially lower costs, as long as delivery schedules are reliable. ", "The Jones Act fleet is almost entirely engaged in domestic trade routes where overland modes are not an option, serving Alaska, Hawaii, and Puerto Rico. In other words, it operates in markets where shippers have little alternative. Although the Jones Act can be said to have preserved a nucleus of a U.S. maritime industry, it has not succeeded in meeting the stated policy goal of sustaining a growing merchant marine that carries an increasing proportion of the nation's commerce. ", "In the Merchant Marine Act of 1936 (P.L. 74-835, Section 101), Congress amended the policy goals articulated in the 1920 Act by adding the phrase \"providing shipping service on all routes essential for maintaining the flow [of commerce] at all times,\" and also added the word \"safest\" to the policy goal of having the best equipped and most suitable types of vessels. At present, the Jones Act fleet does not appear to achieve either of these goals"], "subsections": [{"section_title": "Ship Designs Missing from the Fleet", "paragraphs": ["One can also question whether the policy objective of having \"the best equipped and most suitable types of vessels\" has been achieved. Not all ship designs are represented in the Jones Act fleet. \"Project cargo\" or \"heavy-lift\" vessels are often used to carry oversized pieces of equipment such as smaller vessels, ship engines and modules, wind turbine parts, and power generation equipment. They would be useful for moving dredging fleets to project sites. There have not been any such vessels in the Jones Act fleet in recent decades. The Department of Defense has used \"national defense\" waivers of the Jones Act (see below) to move radar systems and newly built vessels on foreign-flag heavy-lift vessels. This type of cargo typically does not generate regular shipments in any one region; thus these ships would likely need to extend their market reach beyond the United States to include the international market. However, the higher cost structure of Jones Act operators is an obstacle to competing for international shipments. ", "Two dry bulk ships are in the oceangoing Jones Act fleet, and they appear to be mostly inactive, possibly because they are nearly 40 years old. This is twice the economic life of a ship in the global fleet (where ships are typically sent for scrapping between 15 and 20 years of age). The sole Jones Act-qualified chemical tanker was built in 1968. No LNG tankers are in the Jones Act fleet despite new domestic markets as a result of the shale gas boom. The lack of sufficient Jones Act-qualified tanker capacity to move booming shale oil production coastwise added to pressure for lifting the crude oil export ban in 2015."], "subsections": []}, {"section_title": "Seagoing Barges", "paragraphs": ["In response to the high cost of U.S.-built and U.S.-crewed ships, the U.S. market has developed a unique vessel design, a seagoing barge called an articulated tug barge (ATB). MARAD estimates that over 150 ATBs are operating in the Jones Act trades. While ATBs are more capable than flatwater barges in handling sea swells (with a hinge between the tug and barge), they are still less capable than ships in handling heavy sea states. They are less reliable and less efficient over longer voyages because they are slower and smaller than tanker ships, and the notch between the barge and tug creates more resistance through the water than a single hull. Since ATBs sail closer to the coasts, they could pose a higher risk of grounding and provide less time to prevent spilled oil from reaching shorelines. ATB crews are not qualified to sail sealift ships. ATBs now carry more cargo (predominantly oil) on coastal voyages than does the tanker fleet (see Figure 2 ). "], "subsections": []}, {"section_title": "Age of Fleet Raises Safety Concerns", "paragraphs": ["The El Faro was a Jones Act general cargo ship that sank in a hurricane in 2015. Because the ship was built in 1975, it was required to have only open lifeboats rather than the closed lifeboats with auto launchers required on ships built since 1983. After its sinking, the Coast Guard forbade its sister ship of the same age from sailing, and in congressional testimony noted concern about the condition of the rest of the U.S.-flag fleet:", "We looked a little further beyond this particular incident, caused us to look at other vessels in the fleet and did cause us concern about their condition.\u2026 And the findings indicate that it is not unique to the El Faro . We have other ships out there that are in substandard condition.\u2026 You know, some of our fleet\u2014our fleet is almost three times older than the average fleet sailing around the world today. Just like your old car, those are the ones likely to breakdown. Those are the (inaudible) one\u2014the ones that are more difficult to maintain and may not start when I go out, turn the key.", "Substantiating the Coast Guard's concern, in February 2019, the crew of the 46 year-old Jones Act containership Matsonia found a crack in the hull when looking for the source of an oil sheen in Oakland harbor. ", "The Jones Act fleet today is relatively young compared to its prior composition because of shipbuilding undertaken after the large increase in shale oil production and before the lifting of the oil export ban. In part, new ships were needed to comply with tighter emissions requirements in the newly created North American emission control area. Today, just over one-third of the Jones Act oceangoing fleet (35 ships) is 21 years old or older, down from two-thirds (64 ships) in 2007. "], "subsections": []}]}, {"section_title": "The Great Lakes Fleet", "paragraphs": ["Jones Act-compliant vessels operating in the Great Lakes are considerably older than the oceangoing fleet. The Great Lakes fleet consists of 33 dry bulk ships and several large barges carrying mostly iron ore, limestone, and coal used in steelmaking, and cement. The U.S. fleet of 1,000-foot freighters, the largest ships operating on the Great Lakes, was built between 1972 and 1981. The second-largest class of ships, around 700 feet in length, is older, with some of the vessels having originally been built in the 1940s or 1950s; a number of these were rebuilt in the 1970s. According to the U.S. Lake Carriers Association, ships operating in freshwater, such as the Great Lakes, can have longer lives than oceangoing vessels. Jones Act-compliant Great Lakes ships are much narrower for their length compared to the global dry bulk fleet because of the dimensions of the Soo Locks in Michigan. Domestic tonnage on the Great Lakes has declined steadily since the 1950s, and is now about half what it was then. ", "The Canadian Great Lakes fleet illustrates the effect that vessel import policy can have on a domestic fleet. Canada's fleet was of similar age as the Jones Act fleet, with the youngest ship having been built in 1985, before Canada imposed a 25% tariff on newly constructed imported ships. While this import tariff was in effect, no new ships were added to the Canadian fleet. In 2010, Canada repealed the import tariff, and since then over 35 new dry bulk ships have been constructed in other countries specifically for service on the Great Lakes. These vessels cannot carry cargo between U.S. points. "], "subsections": []}, {"section_title": "Inland River Fleet", "paragraphs": ["Thousands of tugs and barges carry mostly dry and liquid bulk commodities on the nation's inland rivers. The fleet includes several thousand tugs or pushboats that push the barge tows, about 20,000 dry cargo barges, and several thousand tank barges that carry liquid bulk cargoes. Tonnage is dominated by the export of corn and soybeans and domestic movement of coal. Since 1990, overall tonnage on the system has been flat or declining slightly. One of the two leading manufacturers of river barges ceased operation in April 2018 in response to the fall-off in demand for coal deliveries by barge."], "subsections": []}, {"section_title": "The Dredging Fleet", "paragraphs": ["The Dredging Act of 1906 (P.L. 59-185, 34 Stat. 204) requires that vessels engaged in dredging in U.S. waters be U.S.-built, -operated, and -crewed. The 1906 act was prompted by dredging work then being carried out in Galveston Bay, TX, after a calamitous 1900 hurricane. It required all dredge vessels henceforth to be U.S.-built. In 1988, Congress amended the Jones Act to define \"merchandise\" transported domestically by vessel to also include any valueless material ( P.L. 100-329 ). This change effectively required that dredge spoil be transported in Jones Act-qualified vessels. ", "According to one study, the ban on foreign-built dredgers and foreign operators raises the cost of dredging U.S. harbors substantially. According to U.S. Army Corps of Engineers figures, while federal spending on navigation dredging has increased over the last decade by several hundred million dollars per year, the spending increase has not resulted in a larger volume of material being dredged from U.S. harbors. In addition to a limited supply of dredging vessels, increases in the cost of fuel, steel, and labor, as well as more stringent environmental requirements, are factors that may be causing cost increases.", "The U.S. privately owned fleet is much older and smaller, both in terms of the capacity of individual vessels and the total size of the fleet, compared to the four leading European dredging firms that perform work worldwide (except in U.S. waters). Each of the four European firms has a fleet of hopper dredges, the preferred type for dredging coastal harbors, whose total capacity is around three to four times the capacity of the entire U.S. hopper fleet. Three-quarters of the U.S. privately owned hopper dredge fleet is over 20 years of age, while about three-quarters of the European fleet is under 20 years. When the Army Corps bids harbor work requiring a hopper dredge, one of the four U.S. firms is the sole bidder over a third of the time. When the Army Corps schedules dredging projects for an upcoming year, it has periods when an insufficient number of dredges can perform the work. In addition to the dredge vessel, dredging projects involve a number of support vessels. One study found that mobilization and demobilization of the equipment in the U.S. market can amount to more than one-third of total project costs. Foreign firms use heavy-lift vessels to transport their dredge fleets to the next project. As indicated earlier, no such vessels are available in the Jones Act fleet. "], "subsections": []}, {"section_title": "Offshore Supply Vessels", "paragraphs": ["The size of the OSV fleet can change significantly with changes in the oil market. In 2017, the offshore supply vessel fleet consisted of about 1,800 vessels, working mainly in the Gulf of Mexico. Over the last decade, annual construction averaged 32 vessels, but ranged between 4 and 53 vessels. Foreign-built vessels are relied upon for construction of rigs in deeper waters. These vessels need dynamic positioning propulsion systems to keep the vessel in place while performing the construction work, as the waters are too deep for anchoring. As mentioned above, similar vessels are lacking in the Jones Act fleet for installing wind towers in deeper waters."], "subsections": []}]}, {"section_title": "The Jones Act and Sealift Capability", "paragraphs": ["As with the commercial aspirations stated in the maritime policy of the Jones Act, there are also perceived shortcomings with respect to the domestic fleet's ability to serve as a naval auxiliary in times of war or national emergency. Since 1920, Congress has enacted programs that designate other fleets for sealift support, but the merchant mariners crewing Jones Act ships are still identified as contributing to the pool of mariners available to crew the sealift fleet. The shrinking size of the U.S. mariner pool puts in doubt its ability to sufficiently crew a reserve sealift fleet, as discussed further below. In 2014 ( P.L. 113-76 ), Congress directed the Department of Transportation and the Department of Defense to develop a national sealift strategy. This has yet to be issued. "], "subsections": [{"section_title": "Sealift Crews", "paragraphs": ["The crews of Jones Act oceangoing ships are arguably the most salient and immediate element that could be called upon to support military sealift. Jones Act mariners typically have six months of shore leave per year, and those mariners on shore leave would be expected to crew a reserve fleet of government-owned cargo ships kept on standby for military sealift purposes (the Ready Reserve Force, or RRF). The Jones Act crew of oceangoing ships consists of about 3,380 merchant mariners, which is about 29% of the total mariner pool of 11,678 mariners that MARAD estimates would be required to crew the government-owned reserve fleet while still concurrently being able to operate the commercial fleet. The remaining pool of mariners would come from (1) the U.S.-flag privately owned international fleet enrolled in the Maritime Security Program (MSP) consisting of 60 ships and 2,386 commercial mariners, and (2) the Military Sealift Command (MSC) fleet of government-owned ships consisting of about 120 ships and 5,576 mariners. ", "While MARAD estimates that there is a sufficient commercial mariner pool to crew the reserve sealift fleet during a surge lasting up to 180 days, a more prolonged sealift effort would start to entail crew rotations, and MARAD estimates a shortfall of about 1,800 mariners in that scenario. That the mariner pool is barely sufficient to sustain an immediate surge and is insufficient for a longer sealift effort has been a consistent finding of sealift officials for decades, even in previous periods when the mariner pool was much larger than it is today. For instance, this was the same finding by the Department of Defense Transportation Command (TRANSCOM) in 2004, when the RRF consisted of 59 ships and the mariner pool was 16,900. And in 1991, when the RRF consisted of 96 ships and the mariner pool was 25,000 (more than twice the size that it is today), the then MARAD Administrator testified that the mariner pool was barely sufficient to crew the reserve sealift fleet."], "subsections": []}, {"section_title": "Sealift Ships", "paragraphs": ["While the Jones Act's statement of maritime policy indicated a desire for a commercial fleet that also could provide sealift in times of war, since then three other fleets of ships have been established for purposes of military sealift: the RRF, MSC, and MSP. These ships are predominantly foreign-built. The RRF, a concept that originates in a 1954 act of Congress (P.L. 83-608), today consists of 46 ships that can sail upon either 5 or 10 days' notice and are on standby with a skeleton crew of about 600 commercial mariners (13 per ship), but would require an additional 1,200 mariners to sustain its operation once activated. The MSC fleet is controlled by TRANSCOM and has a subset of about 50 ships that carry military cargoes in port-to-port voyages similar to those undertaken by commercial ships. MSC ships are mostly crewed by civilian mariners who are federal employees. The MSP ships, a fleet established by Congress in 1996 ( P.L. 104-239 ), receive an operating subsidy of about $5 million per vessel per year to cover the additional cost of American crews and rely heavily on government cargoes (military and food aid) that pursuant to \"cargo preference\" law are reserved for them. As per long-standing agreements between MARAD, acting as advocate for the U.S. maritime industry, and the Department of Defense, the military is to utilize MSP ships and exhaust that capacity before it utilizes MSC ship capacity. ", "While Jones Act operators are required to purchase more costly U.S.-built ships, the military sealift fleet is largely composed of more economical foreign-built ships. Jones Act operators are competing in the commercial marketplace while the sealift fleet is not. Instead of relying on the Jones Act commercial fleet to provide oceangoing shipbuilding capability, the sealift fleet could be required to be built domestically. The higher cost of the domestically built sealift fleet would be shared nationally, as is the case with other defense assets. Lower-cost coastwise ships would be more price-competitive with railroads, pipelines, and ATBs, thereby enlarging the mariner pool available for sealift support and increasing repair and maintenance work for U.S. shipyards. The sealift ships could also be designed to military specifications rather than be in conflict with commercial needs (see below)."], "subsections": [{"section_title": "Divergence in Design of Commercial and Sealift Ships", "paragraphs": ["The military seeks cargo ships with flexible capabilities: ships not so large that they could face draft restrictions in some overseas harbors, ships with ramps or onboard cranes so that they can still unload cargo at underdeveloped or damaged ports, and ships that can carry a wide variety of cargo types and sizes. The majority of the military sealift fleet consists of product tankers for carrying fuel and roll-on/roll-off (Ro/Ro) ships that have ramps for moving tanks, trucks, and helicopters. It also consists of container ships used for moving ammunition and other supplies. ", "The military's preference for versatility is in conflict with the commercial fleet's trend toward more specialized and larger ships, a trend driven by the need for ships with the lowest operating cost. General cargo and break-bulk ships capable of carrying a wide variety of cargo types and sizes and that were typically equipped with their own onboard cranes have been largely replaced by container ships without onboard cranes. Thus, commercial mariners may no longer have experience operating cargo cranes, as might be required in foreign ports where shore-based cranes are out of service or are not available. ", "The largest container ships require 45 to 50 feet of water below the waterline, far more depth than many ports can provide. Ro/Ro ships have been replaced by \"pure car carriers\" that maximize the number of passenger cars they can carry, but may be less useful for military purposes. Cost pressures have induced commercial carriers to install engines that minimize fuel costs by operating at lower speeds and cannot achieve the higher speeds desired for military sealift ships. In addition, more stringent sulfur emission regulations recently enacted have prompted ship operators to convert to LNG-fueled engines, a fuel not globally available, or to install scrubbers, equipment that takes up cargo space and has no military utility. Licensing of engine crews is specific to engine type. Thus, a growing disparity exists between the military's ideal vessel designs and those of commercial carriers, as well as in the skill sets of the crew."], "subsections": []}]}, {"section_title": "Shipbuilding and Repair Industrial Base", "paragraphs": ["Besides the deep-sea ship crews, another purported Jones Act contribution to military sealift is preservation of a shipyard industrial base with the knowledge and skills to build and repair ships. The Merchant Marine Act of 1970 (P.L. 91-469) added as an additional objective of U.S. maritime policy to have a merchant marine \"supplemented by efficient facilities for building and repairing vessels.\" U.S. shipyards typically build only two or three oceangoing ships per year, and none for export, so they do not achieve economies of scale. There may be gaps of several years in between orders for container ships. In recent years, the demand has been sufficient to sustain one shipyard that builds only commercial ships. However, this yard stated that its employment had fallen below 100 people and that it had no vessels under construction or on order as of March 31, 2019. The other shipyard that builds commercial ships also relies heavily on Navy orders. ", "A larger number of shipyards build smaller vessels such as tour boats, ferries, tugs, barges, and offshore supply vessels. Around 1,000 barges are built in a typical year. These vessels also fall under the Jones Act domestic build requirement and are rarely built for export. However, the shipyards building smaller vessels lack dry docks of sufficient size to repair large ships. The government-owned sealift fleet is 44 years old on average, and many of the vessels are in need of repair. According to the Maritime Administrator, there is an insufficient number of large dry docks to service the sealift fleet, delaying their readiness to sail. Some of the reserve fleet has failed Coast Guard safety inspection, and some ships have too much steel rusted from their hulls to be seaworthy. For example, while sailing to a readiness exercise, a hole was found in the hull of one of the ships. According to TRANSCOM, the Navy's plan to recapitalize the reserve fleet includes building new vessels in domestic shipyards, repairing ships in the current fleet to extend their service life out to 60 years, and purchasing used, foreign-built ships. The Navy has found that repairing the vessels has thus far been three times more expensive and has taken twice as long as originally projected. It therefore is contemplating the need to accelerate the purchase of used, foreign-built ships because building new ships in U.S. yards is estimated to be 26 times more expensive and thus not affordable. ", "In addition to the Jones Act, the Tariff Act of 1930 is intended to support U.S. shipyards by assessing a 50% duty on the price of any nonemergency repairs on U.S. flag ships done in foreign shipyards. A 2011 MARAD study found that many U.S.-flag international trading ships have repairs performed in foreign yards because, even with the 50% duty, the total cost is less than if the repairs were performed in a domestic shipyard. A U.S.-flag operator confirms that this is still the case in 2018."], "subsections": [{"section_title": "Appendix. Exemptions and Waivers", "paragraphs": [], "subsections": []}]}]}]}}
{"id": "R45283", "title": "The Servicemembers Civil Relief Act (SCRA): Section-by-Section Summary", "released_date": "2019-03-25T00:00:00", "summary": ["Congress enacted the Servicemembers Civil Relief Act (SCRA) in 2003 in response to the increased deployment of Reserve and National Guard military and as a modernization and restatement of the protections and rights previously available to servicemembers under the Soldiers' and Sailors' Civil Relief Act of 1940 (SSCRA). The SCRA has been amended since its initial passage, and Congress continues to consider amendments from time to time.", "Congress has long recognized the need for protective legislation for servicemembers whose service to the nation compromises their ability to meet obligations and protect their legal interests. The SCRA is an exercise of Congress's power to raise and support armies and to declare war. The purpose of the act is to provide for, strengthen, and expedite the national defense by protecting servicemembers, enabling them to \"devote their entire energy to the defense needs of the Nation.\" The SCRA protects servicemembers by temporarily suspending certain judicial and administrative proceedings and transactions that may adversely affect their legal rights during military service. The SCRA does not provide forgiveness of all debts or the extinguishment of contractual obligations on behalf of active-duty servicemembers, nor does it grant absolute immunity from civil lawsuits. Instead, the SCRA provides for the suspension of claims and protection from default judgments against servicemembers. In this way, it seeks to balance the interests of servicemembers and their creditors, spreading the burden of national military service to a broader portion of the citizenry. Some protections are contingent on whether military service materially affects the servicemember's ability to meet obligations, while others are not. Courts are to construe the SCRA liberally in favor of servicemembers, but retain discretion to deny relief in certain cases. The Services are required to provide information to servicemembers explaining their rights under the SCRA.", "Many of the SCRA provisions are especially beneficial for Reservists activated to respond to a national crisis, but many provisions are also useful for career military personnel. One measure that affects many who are called to active duty is the cap on interest at an annual rate of 6% on debts incurred prior to a person's entry into active-duty military service. Creditors are required to forgive the excess interest and are prohibited from retaliating against servicemembers who invoke the 6% interest cap by submitting adverse credit reports solely on that basis. Other measures protect military families from being evicted from rental or mortgaged property; from cancellation of life insurance and professional liability insurance; from taxation in multiple jurisdictions; from losing domicile for voting and other purposes due to being stationed elsewhere; from losing child custody due to deployment or the possibility of deployment; from foreclosure of property to pay taxes that are due; and from losing certain rights to public land.", "The SCRA makes it unlawful for lienholders or lessors to foreclose or seize property owned or used by servicemembers without a court order. It also permits servicemembers to prematurely terminate leases and other term contracts without incurring any early termination penalties. Statutes of limitations that might otherwise prevent servicemembers from pursuing remedies in court or before any governmental agency, including state and local entities, are tolled for the duration of the servicemember's military service. Servicemembers may initiate an action in court for relief prior to defaulting on any pre-service obligation or liability, in order to obtain restructuring of loan repayments or other equitable relief without incurring any penalty. Servicemembers may bring an action in court to enforce their rights under the SCRA, or the Attorney General may bring a civil action in U.S. district court for violations of the SCRA by a person who (1) engages in a pattern or practice of violating the act; or (2) engages in a violation that raises an issue of significant public importance."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Soldiers' and Sailors' Civil Relief Act of 1940 (SSCRA) provided civil protections and rights to individuals based on their service in the U.S. Armed Forces. Congress enacted the Servicemembers Civil Relief Act (SCRA) in 2003 in response to the increased deployment of Reserve and National Guard military and as a modernization and restatement of the protections and rights previously available to servicemembers under the SSCRA. The SCRA has been amended since its initial passage, and Congress continues to consider amendments from time to time. Most recently, Congress has enacted amendments to extend certain benefits to the spouses of servicemembers.", "Congress has long recognized the need for protective legislation for servicemembers whose service to the nation compromises their ability to meet obligations and protect their legal interests. For example, Congress tolled all judicial actions during the Civil War, civil and criminal, for persons who \"by reason of resistance to the execution of the laws of the United States, or the interruption of the ordinary course of judicial proceedings,\" were beyond the reach of legal process. During World War I, Congress passed the Soldiers' and Sailors' Civil Relief Act of 1918, which, unlike many state laws of the Civil War era, did not create a moratorium on legal actions against servicemembers, but instead directed trial courts to apply principles of equity to determine the appropriate action to take whenever a servicemember's rights were implicated in a controversy. During World War II, Congress essentially reenacted the expired 1918 statute as the Soldiers' and Sailors' Civil Relief Act of 1940, and then amended it substantially in 1942 to take into account the new economic and legal landscape that had developed between the wars. Congress enacted amendments to the SSCRA on several occasions during subsequent conflicts, including in 2002, when the benefits of the SSCRA were extended to certain members of the National Guard. ", "The SCRA is an exercise of Congress's power to raise and support armies and to declare war. The purpose of the act is to provide for, strengthen, and expedite the national defense by protecting servicemembers, enabling them to \"devote their entire energy to the defense needs of the Nation.\" The SCRA protects servicemembers by temporarily suspending certain judicial and administrative proceedings and transactions that may adversely affect their legal rights during military service. The SCRA does not provide forgiveness of all debts or the extinguishment of contractual obligations on behalf of active-duty servicemembers, nor grant absolute immunity from civil lawsuits. Instead, the SCRA provides for the suspension of claims and protection from default judgments against servicemembers. In this way, it seeks to balance the interests of servicemembers and their creditors, spreading the burden of national military service to a broader portion of the citizenry. Courts are to construe the SCRA liberally in favor of servicemembers, but retain discretion to deny relief in certain cases.", "Many of the SCRA provisions are especially beneficial for Reservists activated to respond to a national crisis, but some provisions are also useful for career military personnel. One measure that affects many who are called to active duty is the cap on interest at an annual rate of 6% on debts incurred prior to a person's entry into active-duty military service. Other measures protect military families from being evicted from rental or mortgaged property ; from cancellation of life insurance ; from taxation in multiple jurisdictions ; from foreclosure of property to pay taxes that are due ; and from losing certain rights to public land.", "This report provides a section-by-section summary of the SCRA."], "subsections": []}, {"section_title": "Title I: General Provisions", "paragraphs": [], "subsections": [{"section_title": "Definitions\u2014Section 101 (50 U.S.C. \u00a7 3911).", "paragraphs": ["For the purposes of the SCRA, the following definitions apply:", "'Servicemember' \u2014Persons covered by the SCRA include members of the \"uniformed services\" found in 10 U.S.C. \u00a7 101(a)(5), which include the Army, Navy, Air Force, Marine Corps, Coast Guard, and the commissioned corps of the National Oceanic and Atmospheric Administration and the Public Health Service.", "'Military Service' \u2014\"Military service\" includes \"active duty\" as defined in 10 U.S.C. \u00a7\u00a0101(d)(1); National Guard service as service under a call to active service authorized by the President or the Secretary of Defense for a period of more than 30 consecutive days under 32 U.S.C. \u00a7 502(f) for purposes of responding to a national emergency declared by the President and supported by federal funds; for officers of the Public Health Service or the National Oceanic and Atmospheric Administration, \"active service\" (not further defined); and any period during which a servicemember is absent from duty on account of sickness, wounds, leave, or other lawful case.", "\"Active duty\" for armed services is defined in 10 U.S.C. \u00a7 101(d)(1) as \"full-time duty in the active military service of the United States ... [including] full-time training duty, annual training duty, and attendance, while in the active military service, at a school designated as a service school by law or by the Secretary of the military department concerned.\" \"Active military service\" is not further defined in Section 101 of Title 10, U.S. Code , although \"active service\" is given the meaning \"service on active duty or full-time National Guard duty,\" in 10 U.S.C. \u00a7\u00a0101(d)(3).", "Under the SSCRA, the definition of \"military service\" included language referring to \"periods of training or education under the supervision of the United States preliminary to induction into military service.\" Under the SCRA, persons on active duty and attending a service school are covered, while persons attending training prior to entering active duty, such as officer candidates, may not be covered. It is unclear, for example, whether \"active military service\" under 10 U.S.C. \u00a7 101(d) covers training as a member of the Reserve Officer Training Corps or attendance at a military academy.", "The SCRA does not cover servicemembers who are absent without leave (AWOL). It apparently does not protect individuals who are in a delayed entry status. Nor does it cover personnel entered on the temporary disability retirement list (TDRL). It does not cover civilian contractor employees who are deployed to serve alongside the Armed Forces.", "'Period of military service' \u2014A servicemember's \"period of military service\" begins when she enters military service and ends on the date of release from military service or upon death during military service.", "'Dependent' \u2014\"Dependent\" is defined as a servicemember's spouse or child (as defined for purposes of veterans' benefits, in 38 U.S.C. \u00a7 101 ), or another individual for whom the servicemember provided more than one-half of the support in the 180 days prior to an application for relief under the act. This language appears to codify courts' treatment of the term \"dependent\" as relating to financial dependency rather than strict familial relationships.", "'Court' \u2014The term \"court\" includes federal and state courts and administrative agencies, whether or not a court or agency of record.", "'State' \u2014\"State\" includes commonwealth, territory, or possession of the United States and the District of Columbia.", "'Secretary Concerned' \u2014With respect to a member of the Armed Forces, \"secretary concerned\" refers to the meaning in 10 U.S.C. \u00a7 101(a)(9) with respect to commissioned officers of the Public Health Service, the Secretary of Health and Human Services; and with respect to commissioned officers of the National Oceanic and Atmospheric Administration, the Secretary of Commerce.", "'Motor Vehicle' \u2014\"Motor vehicle\" is a vehicle driven or drawn by mechanical power and manufactured primarily for use on public streets, roads, and highways, but does not include a vehicle operated only on a rail line (as defined in 49 U.S.C. \u00a7 30102(a)(7)).", "'Judgment' \u2014\"Judgment\" includes any judgment, decree, order, or ruling, final or temporary."], "subsections": []}, {"section_title": "Jurisdiction and applicability of act\u2014Section 102 (50 U.S.C. \u00a7 3912).", "paragraphs": ["The SCRA applies everywhere in the United States, including the District of Columbia, and in any territory \"subject to the jurisdiction of\" the United States. It applies to any civil judicial or administrative proceeding in any court or agency in any jurisdiction subject to the act; however, it does not apply to criminal proceedings."], "subsections": []}, {"section_title": "Protection of persons secondarily liable\u2014Section 103 (50 U.S.C. \u00a7 3913).", "paragraphs": ["The SCRA extends protection to persons who share a debt with one or more covered servicemembers or have secondary liability as a \"surety, guarantor, endorser, accommodation maker, co-maker, or other person who is or may be primarily or secondarily subject to the obligation or liability\" at issue. If the SCRA provisions are invoked as to the servicemember, the court has discretion to grant a stay, postponement, or suspension of the proceedings against such persons, or to set aside or vacate a judgment. Whether a court grants such relief appears to be influenced by equitable considerations, including whether the servicemember is able to appear in court, whether the servicemember's presence is necessary for the defense, and whether an unjust forfeiture could otherwise result. If the servicemember is only nominally a party to the suit, as in cases of negligence where the insurance company might be considered the \"true defendant,\" the modern trend is to deny a stay. Courts do not have the discretion to grant a stay to a co-debtor if the servicemember has not been granted a stay.", "The act added the term \"co-maker\" to the list of persons who may be entitled to a stay in an action that has been stayed with respect to a servicemember. This effectively codifies courts' interpretations of the previous version of the SCRA.", "Bail bondsmen who are unable to procure the appearance of the principal due to that person's active-duty service receive protection under the act. In such a case, the court hearing the charge may not enforce the bond during the period of military service of the accused, and has the discretion to return the bail in its entirety to the bail bondsman in the interest of equity and justice. While some courts have interpreted this subsection to allow for no discretion, others have required sureties to make a further showing that the appearance of the principal was in fact prevented due to military service and that the surety made an effort to secure the appearance of the principal in court.", "Persons who are primarily or secondarily liable on the obligation of a person in military service may waive their rights under the SCRA, but such a waiver must be executed in a separate instrument from that which creates the obligation. If the individual executes the waiver and then enters active military service, the waiver as applied to the individual, or to the dependents of the person, is invalidated. In the event that the waiver is executed after the person receives orders to active duty, but before entering active service, the waiver remains valid."], "subsections": []}, {"section_title": "Extension of protections to citizens serving with allied forces\u2014Section 104 (50 U.S.C. \u00a7 3914).", "paragraphs": ["The SCRA protects citizens of the United States who serve in the Armed Forces of allies of the United States in the prosecution of a war or military action, as long as such service is similar to the service in the U.S. Armed Forces."], "subsections": []}, {"section_title": "Notification of benefits\u2014Section 105 (50 U.S.C. \u00a7 3915).", "paragraphs": ["Military authorities are required to provide servicemembers with written information describing their rights and benefits under the SCRA."], "subsections": []}, {"section_title": "Information for members of the Armed Forces and their dependents on rights and protections of the Servicemembers Civil Relief Act\u2014Section 105a (50 U.S.C. \u00a7 3916).", "paragraphs": ["Military authorities must provide servicemembers with pertinent information on rights and protections available under the SCRA during initial orientation or, in the case of reserve servicemembers, during initial orientation and when mobilized. Additionally, military authorities may provide pertinent information to the adult dependents of servicemembers on the rights and protections available to the servicemembers and dependents."], "subsections": []}, {"section_title": "Extension of rights and protections to Reserves ordered to report for military service and to persons ordered to report for induction\u2014Section 106 (50 U.S.C. \u00a7 3917).", "paragraphs": ["Benefits under Titles I, II, and III of the SCRA are applicable to servicemembers during the period of time between the date they receive their induction or activation orders and the date they report for active duty. The coverage ends in the event the orders to active duty are revoked."], "subsections": []}, {"section_title": "Waiver of rights pursuant to written agreement\u2014Section 107 (50 U.S.C. \u00a7 3918).", "paragraphs": ["Servicemembers may waive some of the benefits of the SCRA by agreeing to modify or terminate a contract, lease or bailment, or an obligation secured by a mortgage, trust, deed, lien, or other security in the nature of a mortgage. In order for the waiver to be effective, it must be executed during or after the servicemember's period of active military service. The written agreement must specify the legal instrument to which the waiver applies and, if the servicemember is not a party to that instrument, the identity of the servicemember concerned. This section extends the protections to servicemembers covered under Section 106 of the act (reservists ordered into active duty and persons ordered to report for induction).", "Congress amended the SCRA in 2004 to include two additional requirements for a waiver to be effective. The first requirement is that it must be executed separately from the legal instrument to which it applies. The second is that it must be printed in at least 12-point type."], "subsections": []}, {"section_title": "Exercise of rights under act not to affect certain future financial transactions\u2014Section 108 (50 U.S.C. \u00a7 3919).", "paragraphs": ["The SCRA protects servicemembers from any penalty imposed solely due to their invocation of rights. In other words, a lender cannot revoke a covered person's credit card or exercise foreclosure rights because the servicemember requests that the rate of interest be capped at 6% pursuant to the SCRA. The SCRA provides that no stay, postponement, or suspension of any tax, fine, penalty, insurance premium, or other civil obligation or liability applied for, or received by, a person in military service can be the sole basis for any of the following:", "1. a determination by a lender (or other person) that the servicemember is unable to pay the civil obligation or liability; 2. a decision by a creditor to deny or to revoke credit; to change the terms of an existing credit arrangement; or to refuse to grant credit in substantially the amount, or on substantially the terms, requested; 3. an adverse creditworthiness report by, or to, a consumer credit information enterprise; 4. an insurer's refusal to sell insurance coverage; 5. an annotation by the creditor or a credit reporting agency to reference the servicemember's reserve or National Guard military status on her credit report; or 6. a change in the terms offered or conditions required for issuance of insurance.", "Creditors may, however, take adverse action against a servicemember who fails to comply with obligations after they are adjusted by reason of the act. The act does not appear to preclude insurers or creditors from offering different terms or conditions, denying credit, or taking other adverse actions based solely on the servicemember's status in anticipation that the servicemember might later invoke a right under the act."], "subsections": []}, {"section_title": "Legal representatives\u2014Section 109 (50 U.S.C. \u00a7 3920).", "paragraphs": ["Legal representatives, such as attorneys or persons possessing a power of attorney, may assert the benefits of the act when acting on the servicemember's behalf."], "subsections": []}]}, {"section_title": "Title II: General Relief", "paragraphs": ["Sections 201 through 208 describe the general relief available in most kinds of court actions. They serve to suspend civil liabilities of military personnel and preserve causes of action either for or against them."], "subsections": [{"section_title": "Protection of servicemembers against default judgments\u2014Section 201 (50 U.S.C. \u00a7 3931).", "paragraphs": ["In a civil lawsuit, the failure of the defendant to appear in court may result in the award of a default judgment on behalf of the plaintiff. The SCRA protects servicemembers from default judgments in civil actions when they are unable to appear in court due to military service. An amendment to the act in 2008 added language clarifying that civil lawsuits include child custody proceedings.", "Before a court can grant a default judgment, a plaintiff must file an affidavit stating that the defendant is not on active duty in military service showing necessary facts to support the affidavit or that the plaintiff was unable to determine whether or not the defendant is in military service. A false affidavit is punishable by imprisonment for up to one year, a fine of up to $1,000, or both.", "The court, before entering a default judgment, must also appoint an attorney to represent the person on active duty in order to protect her legal rights and interests. However, if the attorney appointed to the case cannot locate the servicemember, actions by the attorney do not waive any defenses or otherwise bind the servicemember. Additionally, if the court is unable to determine if a defendant is in military service, the court may require a bond which may later be used to indemnify the defendant if it is determined that she was in military service and the judgment against the defendant is set aside or vacated in part. Moreover, if a court enters a default judgment against a servicemember, the court may set aside its judgment if the servicemember files a motion within 60 days after leaving active military service and can demonstrate that military service prejudiced her availability to appear in court and that there are meritorious or legal defenses to the suit.", "This section does not provide a means to challenge judgments resulting from cases in which the servicemember made an appearance before the court. Some courts have found that a communication to the court regarding the servicemember's military status, and the resulting applicability of the SCRA to the suit, constitutes an appearance and bars asserting certain defenses and negates the right to petition to have the judgment overturned. An informal communication, such as a letter or a telegram to the court asking for protection under the SCRA should not be counted as an appearance, but some courts have found that a letter from a legal assistance attorney constitutes an appearance, waiving the servicemember's protection against a default judgment. An appearance by defendant's counsel may also waive protection, unless the counsel was appointed pursuant to this section.", "Subsection (h) contains a provision to protect the rights of a bona fide purchaser by stating that vacating, setting aside, or reversing any judgment under the SCRA will not impair any right or title acquired by any bona fide purchaser for value under the judgment. Therefore, it may be impossible to recover property that had been attached to satisfy a default judgment, although the servicemember would have the right to damages for the value of the property."], "subsections": []}, {"section_title": "Stay of proceedings when servicemember has notice\u2014Section 202 (50 U.S.C. \u00a7 3932).", "paragraphs": ["A court may stay further proceedings in civil litigation, including any child custody proceeding, where the servicemember's ability to participate in the litigation, as either the plaintiff or the defendant, is materially affected by absence due to military service. It applies to servicemembers who are in military service or within 90 days after termination or release from military service. The court must grant a stay of at least 90 days upon receipt of a qualifying application by the servicemember. The court may also grant a stay with respect to co-defendants who are not themselves protected under the SCRA.", "In an application for a stay under this section, the servicemember must set forth facts stating the manner in which current military duty requirements materially affect her ability to appear, and state a date when she will be able to appear. Additionally, the servicemember must submit a letter from her commanding officer certifying that leave is not authorized to attend proceedings at that time. While a stay is considered under the SCRA as a reasonable imposition upon an individual citizen on behalf of those discharging their obligations to the common defense, it is not available to shield wrongdoing or lack of diligence or to postpone relief indefinitely, or to be used to stay proceedings in matters where the interests or safety of the general public may be at stake. Courts may deny a stay in cases involving purely legal issues or where the servicemember is not the true party in interest or in which the presence of the individual is not essential.", "A request for a stay under this section does not constitute an appearance for jurisdictional purposes or a waiver of any substantive or procedural defense. Therefore, a servicemember may apply for relief without waiving the right, for example, to assert that the court has no jurisdiction in the case. Moreover, additional stays may be granted based on continuing material effect of military duty. If additional stays are denied, the court must appoint counsel to represent the servicemember. A servicemember who is unsuccessful in securing a stay under this section is precluded from seeking the protections against default judgments granted under Section 201. This section is inapplicable to Section 301 (protection from eviction or distress)."], "subsections": []}, {"section_title": "Fines and penalties under contracts\u2014Section 203 (50 U.S.C. \u00a7 3933).", "paragraphs": ["Whenever an action is stayed by the court pursuant to the SCRA, penalties that would otherwise accumulate against the person for failing to carry out the terms of a contract cannot be imposed for the period the stay remains in effect. Even without a stay, courts have the discretion to reduce or waive any fines or penalties imposed on a servicemember for failure to carry out the terms of a contract, but only if the servicemember's ability to perform those obligations was impaired by military service. This provision would cover penalties such as early termination fees or fines for late payments."], "subsections": []}, {"section_title": "Stay or vacation of execution of judgments, attachments, and garnishments\u2014Section 204 (50 U.S.C. \u00a7 3934).", "paragraphs": ["If a servicemember is materially affected by reason of service from complying with a court judgment or order, the court may, on its own motion, and must, on the application of the servicemember, stay the execution of any judgment or order against the servicemember and vacate or stay an attachment or a garnishment of property, money, or debts in the possession of the person on active duty for actions or proceedings commenced against the servicemember. This section applies to actions brought against the servicemember before or during the period of military service or within 90 days after termination of service."], "subsections": []}, {"section_title": "Duration and term of stays; co-defendants not in service\u2014Section 205 (50 U.S.C. \u00a7 3935).", "paragraphs": ["Stays granted by courts under the SCRA can remain in effect for the entire period of a servicemember's military service plus 90 days, or any part thereof. As a practical matter, however, courts do not look favorably on protracted stays, and expect most military members to make themselves available to participate in proceedings within a reasonable period of time, especially during peacetime if the servicemember is not stationed abroad. With the court's approval, suits against any co-defendants not in military service may proceed even if the suit has been stayed with respect to the person in the military. This section does not apply to Sections 202 (stays for actions for which the defendant has notice) and 701 (anticipatory relief). These sections contain their own rules for determining the maximum length of a stay."], "subsections": []}, {"section_title": "Statute of limitations\u2014Section 206 (50 U.S.C. \u00a7 3936).", "paragraphs": ["This section tolls the time period applicable for bringing any action by a covered servicemember for an amount of time equal to the person's period of military service. There is no discretion for the court to deny the tolling of an action. The time of service is not counted in determining the servicemember's deadline, for example, for exercising the right to redeem real estate that has been sold or forfeited to enforce an obligation, tax, or assessment. The section applies not just to an action or proceeding in a court but also to any federal or state board, commission, or agency, and may be exercised by the servicemember's heirs, executors, administrators, or assigns, regardless of whether the right or cause of action arose prior to or during the person's period of military service. There is no need to show that military service adversely affected the servicemember's ability to meet relevant obligations. The section does not toll the statute of limitations with respect to federal tax laws."], "subsections": []}, {"section_title": "Maximum rate of interest on debts incurred before military service\u2014Section 207 (50 U.S.C. \u00a7 3937).", "paragraphs": ["This section caps the maximum interest charged on any debt incurred by a servicemember individually or with the servicemembers' spouse jointly prior to entering active duty at a rate of interest no higher than six percent (6%) a year, if the servicemember's ability to pay is materially affected by active-duty status. The interest above the 6% cap is to be forgiven by the creditor and does not accrue to be owed after the debtor's release from active duty. The monthly payments of an obligation or liability covered by this section are to be reduced by the amount in excess of the 6%, but the terms of the original obligation are to remain the same. The 6% cap is not automatic. The servicemember must provide written notice to the creditor along with a copy of her military orders or other appropriate indicator of military service not later than 180 days after the servicemember is released from military service. A court may grant a creditor relief from this section if, in the opinion of the court, the ability of the servicemember to pay an interest rate in excess of 6% is not materially affected by the military service.", "A servicemember who wrongly receives an adverse credit report or has her credit limit reduced or further credit denied after invoking the 6% interest cap provision may seek relief through the Fair Credit Reporting Act (FCRA) provisions for \"adverse actions\" and consumer remedies for \"willful or negligent noncompliance by credit reporting agencies upon consumer showing of causal connection between inaccurate credit report and denial of credit or other consumer benefit.\"", "Historically, federally guaranteed student loans were not eligible for the 6% interest rate cap. Section 428(d) of the Federal Family Education Loan Program, which addressed the applicability of usury laws to federally guaranteed student loans, excluded these loans from the SCRA interest rate limitation. In 2001, the Higher Education Opportunity Act amended Section 428(d) to permit explicitly application of the SCRA interest rate cap to federally guaranteed student loans. As of August 14, 2008, federally guaranteed student loans are treated like all other debts incurred prior to entering active duty. Loans disbursed prior to enactment of the amendment are not covered and therefore are not subject to the 6% interest rate limitation. Additionally, servicemembers currently on active duty who received student loans prior to entering active duty will not be able to claim the 6% cap, but may be entitled to defer repayment or pursue benefits under other laws.", "In 2008, the Veterans' Benefits Improvement Act added two new subsections to the SCRA addressing penalties for violation of Section 207. Section 207, as amended, closely mirrors the penalty and preservation of remedies provisions found in other sections of the SCRA. Anyone who violates the maximum interest prohibition may be fined or imprisoned for not more than one year. An individual claiming protection under this section may also be awarded consequential or punitive damages.", "The 6% cap does not apply to loans made after entry into military service; however, Congress has enacted legislation to protect servicemembers and their dependents from certain practices of so-called payday lenders."], "subsections": []}, {"section_title": "Child custody protection\u2014Section 208 (50 U.S.C. \u00a7 3938).", "paragraphs": ["Added in 2014, Section 208 provides protections to servicemembers in connection with child custody proceedings beyond the stay provisions discussed above. If a court enters a temporary change in custody based solely on the deployment or anticipated deployment of a servicemember, the order must expire no later than the conclusion of a period of time justified by the deployment. The section also prohibits a court from considering deployment or possible deployment of the custodial parent as the sole factor in determining the best interest of the child when contemplating a permanent change in custody. Finally, the section does not create a right to remove the child custody dispute to a federal court; and it does not preempt state law that provides greater protections for deploying servicemembers."], "subsections": []}, {"section_title": "Annual notice regarding child custody protection\u2014 (50 U.S.C. \u00a7 3938a).", "paragraphs": ["This provision, added in 2016, requires the secretaries of each military department to ensure that servicemembers receive annually, and prior to deployment, notice of the child custody protections under the SCRA."], "subsections": []}]}, {"section_title": "Title III: Rent, Installment Contracts, Mortgages, Liens, Assignments, Leases, Telephone Service Contracts", "paragraphs": ["Sections 301 through 308 provide protections from eviction and loss of other benefits or rights due to the failure of a servicemember to meet payments on rent, loans, mortgages, or insurance policies. Unlike the other parts of the SCRA, the rights described in these sections can be asserted by a servicemember's dependents in their own right."], "subsections": [{"section_title": "Evictions and distress\u2014Section 301 (50 U.S.C. \u00a7 3951).", "paragraphs": ["Under this section as it was enacted in 2003, unless a court orders otherwise, a landlord or person with \"paramount title\" may not evict a servicemember or her dependents from a rented home (such as an apartment, a trailer, or a house occupied as a residence by the servicemember or dependents) if the rent is $2,400 per month or less. Nor can the property be subject to distress without a court order during the servicemember's period of service. Traditionally, the rent ceiling is adjusted annually for inflation, and in 2018 the amount was $3,716.73.", "In a case where the landlord seeks a court order for the eviction of a servicemember or her dependents, the court is obligated to stay the proceedings for up to three months if the servicemember requests it. In the alternative, the court may adjust the obligation under the lease to preserve the interests of all the parties. Section 202 (stay of proceedings when servicemember has notice) of the act is not applicable to this section.", "The section provides that anyone who knowingly takes part in an eviction or distress in violation of this section can be punished by imprisonment for up to one year, a fine as provided in Title 18, U.S. Code , or both.", "Additionally, courts are allowed to grant landlords, or other persons with \"paramount title,\" equitable relief in cases where a stay is granted. For example, a court might reduce the monthly rent for the duration of a servicemember's deployment but require the servicemember to make up the difference over time after her return. If the court orders payment to the landlord, Subsection (d) authorizes the Secretary concerned to make an allotment from the servicemember's military pay to satisfy the terms of the order."], "subsections": []}, {"section_title": "Protection under installment contracts for purchase or lease\u2014Section 302 (50 U.S.C. \u00a7 3952).", "paragraphs": ["Except by court order, no one who has collected a deposit as partial payment for property, where the remainder of the price is to be paid in installments, can repossess the property or cancel the sale, lease, or bailment because of the failure to meet the terms of the contract, if the buyer enters active-duty military service after paying the deposit and subsequently breaches the terms of the contract. A violation of this section is punishable by imprisonment for up to one year, a fine as provided in Title 18, U.S. Code , or both. A court may order the cancellation of the installment sale, mandating the return of the property to the seller as well as the return of paid installments to the buyer, or the court may stay the proceedings, or order such other disposition of the property the court deems equitable. This section does not permit a servicemember unilaterally to terminate a contract, although the servicemember may be able to bring an action under Section 701 for anticipatory relief, as discussed further below."], "subsections": []}, {"section_title": "Mortgages and trust deeds\u2014Section 303 (50 U.S.C. \u00a7 3953).", "paragraphs": ["This section covers servicemembers who, prior to a period of active military service, entered into a property transaction subject to a mortgage, a trust deed, or other security loan. The sale, foreclosure, or seizure of property during a servicemember's period of military service, and one year after, is prohibited unless such action is taken under a court order issued prior to foreclosure on the property, or pursuant to an agreement under Section 107 of the act. A federal appeals court has held that the prohibition on foreclosure bars the charging of fees associated with a notice of foreclosure, even though no foreclosure took place. If the servicemember's ability to comply with the terms of the obligation is materially affected by military service and the servicemember thereby breaches the terms of a mortgage, trust deed, or other loan, the court may adjust the obligation to preserve the interests of all parties, or may stay any proceeding against the servicemember for a period of time as justice and equity require.", "Property foreclosure or other similar action against a servicemember protected by this section taken without benefit of a court order is punishable by imprisonment of up to one year, a fine as provided by Title 18, U.S. Code , or both."], "subsections": []}, {"section_title": "Settlement of stayed cases relating to personal property\u2014Section 304 (50 U.S.C. \u00a7 3954).", "paragraphs": ["If a court stays an action for foreclosure on property, repossession, or the cancellation of a sales contract against a servicemember, the court can appoint three disinterested persons to appraise the property and, on the basis of the appraisal, order the amount of the servicemember's equity to be paid back to the person on active duty as a condition for allowing the foreclosure, repossession, or cancellation. The court is required to consider whether its action would cause undue hardship to the servicemember's dependents\u2014for example, through loss of use of the property."], "subsections": []}, {"section_title": "Termination of residential or motor vehicle leases\u2014Section 305 (50 U.S.C. \u00a7 3955).", "paragraphs": ["Military persons who live in rental property are allowed to terminate leases to which they are a party early under certain circumstances. This section applies to (1) property leased for a dwelling or for professional, business, or farm use, or other similar purpose, where the person leasing the property later enters active duty in military service, or where the servicemember executes the lease while in military service and thereafter receives military orders for a permanent change of duty station (PCS) or to deploy with a military unit for a period of at least 90 days; and (2) motor vehicle leases for personal or business transportation where the person later enters active military service of not less than 180 days or where the servicemember executes the lease while in military service and thereafter receives PCS orders outside of the continental United States or to deploy with a military unit for at least 180 days. Servicemembers who rent premises are advised to ensure the rental agreement contains a \"military\" clause to allow for early termination of a lease in case of military orders to deploy. In 2004, this right to terminate leases early was expanded to also apply to joint leases. The added language specifies that any lease terminated pursuant to this section also terminates any obligation a dependent of the lessee may have under the lease. In 2018, the right to terminate leases was extended to include the spouse of a servicemember who dies while in military service or performing full-time National Guard duty, active Guard and Reserve duty, or inactive-duty training. The spouse must exercise the right within one year after the death of the servicemember.", "The servicemember may terminate a property lease early by delivering by hand, private business carrier, or mailing return receipt requested, a written notice and a copy of her military orders to the lessor or its agent. As for a residential lease, if the lease called for monthly rent, then cancellation takes effect 30 days after the next due date for rent following the day the written notice is sent. For all other property leases, the cancellation is considered effective at the end of the month following the month in which the written notice is sent. Any unpaid rent prior to the effective cancellation must be paid to the landlord on a prorated basis. The servicemember is entitled to a refund of any prepaid rent for time after the lease is canceled within 30 days of the termination of the lease. The 2010 amendment to the act prohibits the lessor from charging an early termination fee, but the servicemember is liable for any taxes, summonses, or other obligation in accordance with the terms of the lease. A court can make adjustments if the landlord petitions the court for an \"equitable offset\" prior to the date the lease is effectively canceled. ", "To terminate a motor vehicle lease early under this section, the servicemember must return the motor vehicle to the lessor or its agent no later than 15 days after the date of delivery of the written notice. The cancellation is considered effective on the day on which the vehicle is returned to the lessor. The lessor cannot impose early termination fees on a servicemember, but the servicemember is still responsible for taxes, summonses, title and registration fees, and any other obligation and liability under the lease, including reasonable fees for excessive wear, use, and mileage.", "Anyone who knowingly seizes personal effects, withholds a security deposit, or otherwise interferes with the return of any other property belonging to a person who has lawfully canceled a lease pursuant to this section is subject to punishment. Specifically, anyone who seizes or otherwise interferes with the removal of property in order to satisfy a claim for rent due for any time after the date of the effective cancellation of the lease may be punished by imprisonment for up to one year, a fine as provided in Title 18, U.S. Code , or both."], "subsections": []}, {"section_title": "Termination of telephone service contracts, multichannel video programming, and internet access service contracts \u2014Section 305a (50 U.S.C. \u00a7 3956).", "paragraphs": ["Originally added to the SCRA by the Veterans' Benefits Improvement Act of 2008, this section was replaced in its entirety by the Veterans' Benefits Act of 2010. Under the new Section 305a, a servicemember is able to terminate a contract for telephone exchange service, in addition to the previously covered cellular phone service, in certain circumstances. In 2018, Congress added cable and internet services. To be eligible, the servicemember must receive orders to relocate for a period of at least 90 days to a location that does not support the contract, and the contract must have been entered into prior to receiving the orders. The telephone service provider is required to cancel the contract without assessing an early termination charge and, in the case of a period of relocation less than three years in duration, allow the servicemember to retain the phone number previously terminated. Additionally, dependents of the servicemember may also terminate their cellular telephone service if they accompany the servicemember to an area that does not support the service contract. If the servicemember re-subscribes to the carrier within 90 days of returning from relocation, the service provider is prohibited from charging a reinstatement fee, but may charge ordinary fees for equipment installation or acquisition. A servicemember who terminates any service must return provider-owned equipment to the service provider within ten days after service is disconnected."], "subsections": []}, {"section_title": "Protection of life insurance policy\u2014Section 306 (50 U.S.C. \u00a7 3957).", "paragraphs": ["If a person entering military service has used a life insurance policy as collateral to secure a debt, she is protected from foreclosure on the policy to satisfy the debt unless the assignee first obtains a court order, except where the assignee is the insurance company itself (in which case the debt amounts to a policy loan). A court may refuse to grant the order if it determines that the servicemember's ability to repay is materially affected by military service. This rule applies during the entire time the insured is on active duty plus one year. The rule does not apply in three cases: (1) if the insured gives her written permission to let a creditor make a claim against the policy in order to satisfy the debt involved; (2) if any premiums required under the life insurance policy are due and unpaid (excluding premiums guaranteed under Title IV of this act); or (3) if the person whose life is insured has died. Anyone who knowingly takes or attempts action contrary to this section shall be punished by imprisonment for up to a year, or a fine as provided in Title 18, U.S. Code , or both."], "subsections": []}, {"section_title": "Enforcement of storage liens\u2014Section 307 (50 U.S.C. \u00a7 3958).", "paragraphs": ["A servicemember with property or effects subject to a lien, including liens for storage, repair, or cleaning of property, is protected from foreclosure or enforcement of the lien during the period of military service plus three months unless a court finds that the servicemember's ability to meet the obligation is not materially affected by military service. A court can also stay the proceedings in these types of enforcement actions or order some other disposition of the case it deems equitable to the parties. This section does not affect the scope of Section 303 (mortgages and trust deeds). Anyone who knowingly takes any action contrary to the provisions shall be punished by imprisonment up to one year, a fine as provided by Title 18, U.S. Code , or both. Servicemembers whose property is seized and sold in order to satisfy a lien may recover damages."], "subsections": []}, {"section_title": "Extension of protections to dependents\u2014Section 308 (50 U.S.C. \u00a7 3959).", "paragraphs": ["The benefits of the rules provided under Title III (50 U.S.C. \u00a7\u00a7 3951-59) of the SCRA are extended to dependents of active-duty personnel in their own right. A dependent must petition a court for permission to take advantage of those rules, and the court is not required to grant permission if it determines that the ability of the applicant dependent to comply with the terms of the obligation, contract, lease, or bailment has not been materially impaired by the military service of the person upon whom the applicant is dependent."], "subsections": []}]}, {"section_title": "Title IV: Life Insurance", "paragraphs": ["Title IV provides relief from insurance premiums and guarantees servicemembers' continued coverage under certain commercial life insurance policies. A servicemember who applies for protection under this title will eventually have to pay all of the premiums due, either to the insurer or to the government, in the event the United States pays the delinquent premiums. In this way, servicemembers may defer payments of insurance premiums without losing coverage. There is no need to show that military service materially affects the servicemember's ability to pay."], "subsections": [{"section_title": "Definitions\u2014Section 401 (50 U.S.C. \u00a7 3971).", "paragraphs": ["For the purposes of Title IV of the SCRA, the following definitions apply:", "'Policy' \u2014 \"Policy\" includes any individual contract for whole, endowment, universal, or term life insurance (other than group term life insurance), or benefit similar to life insurance that comes from membership in any fraternal or beneficial association that satisfies all of the following conditions:", "1. the policy does not include a provision limiting the amount of insurance coverage based on the insured's military service; 2. the policy does not require the insured to pay higher premiums if she is in military service; 3. the policy does not include a provision that limits or restricts coverage if the insured engages in any activity required by military service; and 4. the policy is \"in force\" (premiums have to be paid on time before any benefit guaranteed by these sections of the law can be claimed) for at least 180 days before the insured enters military service.", "'Premium' \u2014\"Premium\" is the amount specified in the policy to be paid to keep the policy in force.", "'Insured' \u2014\"Insured\" is defined as a servicemember who owns a life insurance policy.", "'Insurer' \u2014\"Insurer\" includes any firm, corporation, partnership, association, or business that can, by law, provide insurance and issue contracts or policies."], "subsections": []}, {"section_title": "Insurance rights and protections\u2014Section 402 (50 U.S.C. \u00a7 3972).", "paragraphs": ["Either the person insured, an insured's legal representative, or, when the insured person is outside the United States, a beneficiary of the insurance policy must apply for protection of a covered policy under the act. The written application must be submitted to the insurer with a copy sent to the Secretary of Veterans Affairs. The total amount of policies covered is limited to the greater of $250,000, or an amount equal to the maximum limit of the Servicemember's Group Life Insurance (SGLI). The maximum limit of SGLI currently is $400,000."], "subsections": []}, {"section_title": "Application for insurance protection\u2014Section 403 (50 U.S.C. \u00a7 3973).", "paragraphs": ["In order to invoke protection for the policies covered under this part of the SCRA, the servicemember, her legal representative, or beneficiary must submit an application in writing identifying the policy and insurer, with an acknowledgment that the insured's rights under the policy are subject to and modified by the provisions of Title IV of this act. The Secretary of Veterans Affairs may require the parties to provide additional information as necessary. The insurer then reports the action to the Department of Veterans Affairs as required by regulation (found in 38 C.F.R. Part 7). By making an application for the protection guaranteed by these sections of the law, the insurer and insured are deemed to have accepted any necessary modifications to the terms of the life insurance policy."], "subsections": []}, {"section_title": "Policies entitled to protection and lapse of protections\u2014Section 404 (50 U.S.C. \u00a7 3974).", "paragraphs": ["The Secretary of Veterans Affairs determines whether a policy is entitled to the protection guaranteed by these sections, and is responsible for notifying the insurer and the insured of that determination. Once the policy is deemed qualified for protection, it may not lapse or otherwise be terminated or be forfeited for the nonpayment of a premium, or interest or indebtedness on a premium. This protection applies during the time the insured person is in military service and for two years after she leaves military service."], "subsections": []}, {"section_title": "Policy restrictions\u2014Section 405 (50 U.S.C. \u00a7 3975).", "paragraphs": ["The approval of the Secretary of Veterans Affairs is necessary for a policyholder to make certain withdrawals and other payments or credits under a policy protected by this part of the SCRA. If such approval is not obtained, rather than paying dividends to the insured or reinvesting them to purchase additional coverage, the insurer must add dividends to the value of the policy to be treated as a credit. The insured is not permitted to take out loans against the policy or cash it in while it is protected without the approval of the Secretary of Veterans Affairs. However, the insured retains the right to modify the designation of beneficiaries."], "subsections": []}, {"section_title": "Deduction of unpaid premiums\u2014Section 406 (50 U.S.C. \u00a7 3976).", "paragraphs": ["If a covered policy matures due to the death of the insured, the insurance company must reduce its settlement with the beneficiaries by the amount of any unpaid premiums (plus interest). If the rate of interest is not specified in the policy, it will be the same rate applied to policy loans in other policies issued at the time when the insured's policy was issued. Deductions must be reported to the Secretary of Veterans Affairs."], "subsections": []}, {"section_title": "Premiums and interest guaranteed\u2014Section 407 (50 U.S.C. \u00a7 3977).", "paragraphs": ["In the event the insured fails to pay any premiums owed on a policy at the time the guarantee period expires and the cash surrender value of the policy is less than the amount due, the insurance company may terminate the policy and the United States will pay the insurance company the difference between the cash surrender value and the amount of the outstanding debt. The amount paid to the insurer becomes a debt owed by the insured to the United States that is not dischargeable in bankruptcy. Any funds collected from the insured are added to appropriations for the payment of guaranteed premiums under this part of the SCRA. If the unpaid premiums do not exceed the policy's cash surrender value, the insurer will treat them as a policy loan."], "subsections": []}, {"section_title": "Regulations\u2014Section 408 (50 U.S.C. \u00a7 3978).", "paragraphs": ["The Secretary of Veterans Affairs is responsible for promulgating regulations to carry out the provisions of Title IV, which are found in 38 C.F.R. Part 7."], "subsections": []}, {"section_title": "Review of findings of fact and conclusions of law\u2014Section 409 (50 U.S.C. \u00a7 3979).", "paragraphs": ["The findings of fact and conclusions of law made by the Secretary in administering these sections are subject to review by the Board of Veterans' Appeals and the U.S. Court of Appeals for Veterans' Claims. Judicial review is permitted only to the extent provided by chapter 72 of Title 38, U.S. Code , which sets forth the scope of review and procedures to be followed."], "subsections": []}]}, {"section_title": "Title V: Taxes and Public Lands", "paragraphs": ["The fifth broad category of provisions of the SCRA provides certain rights regarding public lands and relieves servicemembers from having to pay certain taxes to multiple jurisdictions. It also prevents the attachment of certain personal or real property in order to satisfy tax liens."], "subsections": [{"section_title": "Taxes respecting personal property, money, credits, and real property\u2014Section 501 (50 U.S.C. \u00a7 3991).", "paragraphs": ["A servicemember's personal property (including motor vehicles) and real property used by the servicemember as a home, a business, or for agriculture\u2014as long as the property continues to be occupied by the servicemember's family or employees\u2014cannot be sold to collect unpaid taxes or assessments (other than income taxes) without a court order. A court may stay an action to force the sale of property belonging to a person in military service for the collection of unpaid taxes if it finds that the debtor's ability to pay the taxes is materially affected by her military service. In the event a servicemember's property is sold to satisfy tax liabilities, the servicemember has the right to redeem the property for up to six months after the person leaves military service unless a longer period is provided by state or local law. If a servicemember fails to pay a tax or assessment on property covered by this section when due, the amount unpaid and due shall accrue interest at 6%, but no other penalties or interest may be assessed. Additionally, real and personal properties owned jointly by a servicemember and her dependents are covered by this section. However, properties owned through a separate business entity such as a limited liability company may not be covered by this section, even if the servicemember is the sole owner."], "subsections": []}, {"section_title": "Rights in public lands\u2014Section 502 (50 U.S.C. \u00a7 3992).", "paragraphs": ["Servicemembers cannot be deemed to have forfeited any right (including mining and mineral leasing rights) they had for the use of public lands of the United States prior to entering military service based on absence from the land or failure to perform required maintenance or other improvements. Holders of permits and licenses for grazing livestock on public lands who subsequently enter military service may suspend the licenses for the duration of military service plus six months, allowing the servicemember to obtain a reduction or cancellation of fees for the duration of that time."], "subsections": []}, {"section_title": "Desert-land entries\u2014Section 503 (50 U.S.C. \u00a7 3993).", "paragraphs": ["Servicemembers with claims to desert lands prior to entering military service may not have those claims contested or canceled for failing to expend required amounts in improvements annually, or for failing to effect the reclamation of the claim during the period of service or during hospitalization or rehabilitation due to an injury or disability incurred in the line of duty. The protection is in force during and for six months after she leaves military service or is released from hospitalization. An honorably discharged servicemember whose line-of-duty disability prevents her reclamation of land or ability to pay may apply for a patent for the entered or claimed land. To qualify for this protection, notice must be given to the appropriate land office within six months after entering military service."], "subsections": []}, {"section_title": "Mining claims\u2014Section 504 (50 U.S.C. \u00a7 3994).", "paragraphs": ["Certain requirements for maintaining a mining claim are suspended during the holder's period of active military service and for six months thereafter or for the duration of hospitalization due to wounds or disability suffered while in the line of duty. During this period, the mining claim cannot be forfeited due to nonperformance of the requirements of the lease. To qualify for this protection, the servicemember must notify the appropriate claims office of commencement of military service within 60 days after the end of the assessment year in which the service began."], "subsections": []}, {"section_title": "Mineral permits and leases\u2014Section 505 (50 U.S.C. \u00a7 3995).", "paragraphs": ["Any person who holds a permit or a lease under the federal mineral leasing laws who enters military service is allowed to suspend all operations during military service (plus six months), in which case the period of service is not counted as part of the term of the person's permit or license and the holder is not required to pay rentals or royalties during that time. However, to qualify for these privileges, the servicemember has six months after entry into military service to notify the Bureau of Land Management of her entry into service."], "subsections": []}, {"section_title": "Perfection or defense of rights\u2014Section 506 (50 U.S.C. \u00a7 3996).", "paragraphs": ["Nothing in Title V of the SCRA prevents a person in military service from taking any action authorized by law or regulations of the Department of the Interior to assert, perfect, or protect the rights covered in those sections. A servicemember may submit any evidence required to assert this right in the form of affidavits or notarized documents. Affidavits provided pursuant to this section are subject to 18 U.S.C. \u00a7 1001."], "subsections": []}, {"section_title": "Distribution of information concerning benefits of title\u2014Section 507 (50 U.S.C. \u00a7 3997).", "paragraphs": ["The Secretary of the Interior is responsible for providing military authorities with information explaining the benefits of this Title (except those pertaining to taxation) as well as related application forms for distribution among servicemembers."], "subsections": []}, {"section_title": "Land rights of servicemembers\u2014Section 508 (50 U.S.C. \u00a7 3998).", "paragraphs": ["Protection of land rights under this Title are extended to servicemembers under the age of 21. Residency requirements related to the establishment of a residence within a limited time will be suspended for six months after release from military service for both the servicemember and her spouse."], "subsections": []}, {"section_title": "Regulations\u2014Section 509 (50 U.S.C. \u00a7 3999).", "paragraphs": ["The Secretary of the Interior has the authority to issue regulations necessary to carry out Title V of the act, other than the sections that concern taxes."], "subsections": []}, {"section_title": "Income taxes\u2014Section 510 (50 U.S.C. \u00a7 4000).", "paragraphs": ["The collection of federal, state, and local income taxes (excluding Social Security (FICA) taxes) a servicemember owes, either before or after entering service, must be deferred during the period of service and for up to six months after release, if her ability to pay the taxes is materially affected by military service. No interest or other penalty may be imposed on a debt deferred under this section. The statute of limitations for paying the debt is tolled for the length of the person's period of service plus nine months."], "subsections": []}, {"section_title": "Residence for tax purposes\u2014Section 511 (50 U.S.C. \u00a7 4001).", "paragraphs": ["In order to prevent multiple state taxation on the property and income of military personnel serving within various tax jurisdictions by reason of military service, this section provides that servicemembers neither lose nor acquire a state of domicile or residence for taxation purposes when they serve at a duty station outside their home state in compliance with military orders. A servicemember who conducts other business while in military service may be taxed by the appropriate jurisdiction for any resulting income. However, a tax jurisdiction cannot include the military compensation earned by nonresident servicemembers to compute the tax liability imposed on the non-military income earned by the servicemember.", "Spouses of servicemembers neither lose nor acquire a state of domicile or residence for taxation purposes when they are present in any tax jurisdiction solely to be with the servicemember in compliance with the servicemember's orders. However, the guarantee of residency is contingent on the spouse having the same original residence or domicile as the servicemember. As amended in 2018, the section provides that in the tax year during which the marriage takes place, the spouse may elect to use the same residence for tax purposes regardless of the date of marriage. The section further provides that income earned by a spouse while in a duty-station tax jurisdiction, other than her original residence or domicile, solely to be with the servicemember may not be taxed by that tax jurisdiction.", "Personal property of a servicemember and her spouse will not be subject to taxation by a jurisdiction other than their domicile or residence while stationed at a duty station outside of their home state. However, relief from personal property taxes does not depend on whether the property is taxed by the state of domicile. Property used for business is not exempt from taxation. An Indian servicemember whose legal residence or domicile is a federal Indian reservation will pay taxes only under the laws of the federal Indian reservation and not to the state where the reservation is located.", "\"Tax jurisdiction\" is defined to include \"a State or a political subdivision of a State,\" which includes the District of Columbia and any commonwealth, territory, or possession of the United States (Section 101(6)). \"Taxation\" includes licenses, fees, or excises imposed on an automobile that is also subject to licensing, fees, or excise in the servicemember's state of residence. \"Personal property\" includes intangible and tangible property including motor vehicles."], "subsections": []}]}, {"section_title": "Title VI: Administrative Remedies", "paragraphs": ["Title VI provides courts the authority to deny remedies to servicemembers that would abuse the purpose of the SCRA. It also indicates how a servicemember's military and financial status can be established in court, and covers other procedural requirements."], "subsections": [{"section_title": "Inappropriate use of act\u2014Section 601 (50 U.S.C. \u00a7 4011).", "paragraphs": ["A court may deny a servicemember the protections of the act with respect to a transfer it finds was made with the intent to exploit the provisions of the act, in order to delay enforcement of the contract, to obtain reduced interest rates, or to avoid obligations with respect to property that was the subject of the transaction."], "subsections": []}, {"section_title": "Certificates of service; persons reported missing\u2014Section 602 (50 U.S.C. \u00a7 4012).", "paragraphs": ["A certificate signed by the Secretary concerned serves as prima facie evidence in an action under the SCRA that the individual is in the military service, the date of induction or discharge, residence at time of induction, rank and rate of pay, and other facts relevant to asserting rights under the SCRA. A servicemember who is missing in action is presumed to continue in military service until she is accounted for or her death has been reported to the Department of Defense or determined by a court or board with the authority to make such determination."], "subsections": []}, {"section_title": "Interlocutory orders\u2014Section 603 (50 U.S.C. \u00a7 4013).", "paragraphs": ["Courts may revoke, modify, or extend any interlocutory orders they issued pursuant to the SCRA."], "subsections": []}]}, {"section_title": "Title VII: Further Relief", "paragraphs": ["Title VII of the SCRA provides a means for servicemembers to petition for relief without having to wait until a creditor brings an enforcement action against them. It also treats powers of attorney and provides relief from liability insurance premiums for servicemembers who need to maintain such policies for their civilian occupations."], "subsections": [{"section_title": "Anticipatory relief\u2014Section 701 (50 U.S.C. \u00a7 4021).", "paragraphs": ["A servicemember may initiate an action for relief prior to defaulting on any pre-service obligation or liability, including tax obligations, rather than waiting for the creditor to commence proceedings. Dependents do not have independent protection under this section as they do for the provisions of Title III.", "Courts may grant the following relief:", "1. if the obligation involves payments of installments for the purchase of real estate (like a mortgage), the court can stay enforcement of the obligation by adding a period of time, no greater than the period of military service, to the remaining life of the contract, subject to the payment of the balance of principal and accumulated interest that remains unpaid at the termination of the applicant's military service, in equal installments over the duration of the extended life of the contract; and 2. for any other type of obligation, liability, tax, or assessment, the court can stay enforcement, for a period of time equal to the petitioner's period of military service, subject to payment of the balance of principal due plus accumulated interest in equal installments over the duration of the stay.", "If a stay has been granted under this section, no fine or penalty can be imposed for its duration as long as the servicemember complies with the terms and conditions of the stay. This provision allows servicemembers who are not yet in default on an obligation, but whose ability to make payments is materially affected by military service, to petition the court in effect to rewrite the contract by extending its life, allowing the servicemember to pay down the amount in arrears with equal installments over a longer of period of time. The servicemember must resume making regular payments on the debt after leaving active duty, in addition to the payments to make up for the smaller payments she made while on active duty."], "subsections": []}, {"section_title": "Power of attorney\u2014Section 702 (50 U.S.C. \u00a7 4022).", "paragraphs": ["A valid power of attorney for a person who is declared to be missing in action is automatically extended for the entire period the person remains in a missing status, unless it expressly provides a date of expiration. The extension is limited to documents that designate the servicemember's spouse, parent, or named relative as the servicemember's attorney in fact. The power of attorney must have been executed during the servicemember's military service or before entry into active service but after receiving an order to report for military service or a notification from the Department of Defense that such an order could be forthcoming."], "subsections": []}, {"section_title": "Professional liability protection\u2014Section 703 (50 U.S.C. \u00a7 4023).", "paragraphs": ["Certain persons who, prior to being called to active duty, were furnishing health care, legal, or any other services which the Secretary of Defense determines to be professional services and who had in effect a professional liability (i.e., malpractice) insurance policy may suspend payment of premiums on their liability insurance while they serve on active duty without losing any coverage. The section covers insurance policies that, according to their terms, would not continue to cover claims arising prior to a lapse in coverage unless the insured continues to pay premiums.", "Definitions \u2014 \"Profession\" is defined in Subsection (i) to include \"occupation.\" Similarly, the expression \"professional\" includes the term \"occupational.\" Neither \"occupation\" nor \"occupational\" is defined. Subsection (i) also defines \"active duty,\" adopting the definition used in Section 101 of Title 10, U.S. Code . However, the provision is further limited to persons called to active duty (other than for training) under 10 U.S.C. \u00a7\u00a7 688 (retired members of regular Armed Forces, members of the Retired Reserves, and members of the Fleet Reserve or Fleet Marine Corps Reserve); 12301(a) (activation of Reserves during war or national emergency declared by Congress); 12301(g) (member of Reserve component in captive status); 12302 (Ready Reserve); 12304 (Selected Reserve and certain Individual Ready Reserve members called to active duty other than during war or national emergency); 12306 (Standby Reserve); 12307 (Retired Reserve); and, if any of the preceding sections are invoked, Section 12301(d) (volunteer member of a Reserve component).", "Suspension of coverage \u2014Professional liability insurance policies covered by this section are suspended from the time the insurer receives a request for protection until the insured requests in writing to have the policy reinstated. In the case of a joint insurance policy, no suspension of coverage is required for the policyholders who are not called to active duty. For example, if several physicians jointly purchase a group policy of malpractice insurance, and only one of them is called to active duty, the coverage of those not called to active duty need not be suspended by the insurer.", "Premiums \u2014The insurer may not charge premiums for coverage that is suspended. The insurer must either refund any amount already paid for coverage that is suspended or, if the insured professional person chooses, apply the amount toward payment of any premium that comes due after coverage is reinstated.", "Liability during suspension \u2014The insurer is not obligated to pay any claim that is based on a professional's actions (or inaction) during a period when a policy is suspended. In the case of claims involving obligations imposed by state law on a professional person to assure that her patients or clients will receive professional assistance in her absence to serve on active duty, the section clarifies that the failure of the professional person to satisfy such an obligation will generally be considered to be a breach that occurred before the professional person began active duty. In such a situation, the insurer would be liable for the claim. In the event a claim arises while the patient is receiving alternate care as arranged by the servicemember for patients during her absence, the insurer would not be liable for the claim.", "Actions against policyholder during suspension of coverage \u2014In the event a malpractice suit (or administrative action) is filed during the period when the insurance is suspended, the litigation will be stayed until the end of the suspension period. The stay applies only where the malpractice is alleged to have occurred before the suspension began, and would thus be covered by the policy. Litigation stayed under this rule is deemed to be filed on the date the suspended insurance is reinstated. The period of any stay granted under this provision is not counted when computing whether or not the relevant statute of limitations has run.", "In the event that a professional person whose malpractice insurance coverage has been suspended should die during the period of the suspension, any stay of litigation or administrative action against the person under this section is lifted. In addition, the insurer providing the coverage that was suspended is to be liable under the policy just as if the deceased person had died while covered by the policy but before the claim was filed.", "Reinstatement of coverage \u2014The insurer is required to reinstate the insurance coverage on the date the servicemember transmits a written request for reinstatement, which must occur within 30 days after the covered servicemember is released from active duty. The insurer must notify the policyholder of the due date for payment of any premium required for reinstatement of the policy, and that the premium must be paid within 30 days after the notice is received by the professional person. The section also limits the premium that the insurer can charge for reinstated coverage to the rate that would have applied if the servicemember had not been deployed. The insurer is not allowed to recoup missing premiums by charging higher rates for reinstated coverage. The insurer may charge higher rates for reinstated coverage if it raised the rates for all policyholders with similar coverage, provided that the servicemember would have had to pay a higher premium even if she had not suspended coverage."], "subsections": []}, {"section_title": "Health insurance reinstatement\u2014Section 704 (50 U.S.C. \u00a7 4024).", "paragraphs": ["This section grants servicemembers who were called to military service, as described in \u00a7\u00a0703(a)(1), the right, upon termination or release from military service, to reinstatement of any health insurance policy that was in effect on the day before the servicemember entered military service, and that terminated at any time during her service. Servicemembers must apply for reinstatement within 120 days of termination or release from active duty. An insurer may not impose new exclusions from coverage or waiting periods for reinstatement of coverage with respect to conditions arising prior to or during the servicemember's period of military service, if such an exclusion or waiting period would not have applied during regular coverage and the condition has not been determined to be a disability incurred in the line of duty under 38 U.S.C. \u00a7\u00a0105. The section does not apply to employer-sponsored health insurance plans covered by the provisions of the Uniformed Services Employment and Reemployment Rights Act (USERRA). Insurance plans covered by USERRA are subject to similar protections under 38 U.S.C. \u00a7 4317. ", "In 2006, Congress added language to Section 704 limiting the ability for insurers to charge a servicemember premium increases on a health insurance policy covered by the section. The amount of the premium may not be increased, on a policy being reinstated for the balance of the period for which the coverage would have continued had it not been terminated, above an amount that would have been charged before termination. In the event that the premiums for similarly covered individuals increased during the terminated period, the increased premium may be assessed to the servicemember upon reinstatement of the policy."], "subsections": []}, {"section_title": "Guarantee of residency for military personnel and spouses of military personnel\u2014Section 705 (50 U.S.C. \u00a7 4025).", "paragraphs": ["Military personnel and their spouses are not deemed to have changed their state of residence or domicile for the purpose of voting for any federal, state, or local office, solely because of their absence from the respective state in compliance with military or naval orders. As amended in 2018, the section provides that a spouse may elect to use the same residence regardless of the date of marriage."], "subsections": []}, {"section_title": "Business or trade obligations\u2014Section 706 (50 U.S.C. \u00a7 4026).", "paragraphs": ["The assets of a servicemember are protected from attachments to satisfy business debts for which the servicemember is personally liable, as long as the assets sought to be attached are not held in connection with the business. The obligor would have the right to apply to the court for a modification of the servicemember's relief when warranted by equitable considerations."], "subsections": []}]}, {"section_title": "Title VIII: Civil Liability115", "paragraphs": ["Title VIII provides the Attorney General the authority to bring civil actions against violators of the SCRA. Servicemembers who are aggrieved by a violation can join an action brought by the Attorney General or can initiate their own civil action against a violator. "], "subsections": [{"section_title": "Enforcement by the Attorney General\u2014Section 801 (50 U.S.C. \u00a7 4041).", "paragraphs": ["This section authorizes the U.S. Attorney General to commence a civil action in U.S. district court for violations of the SCRA by a person who (1) engages in a pattern or practice of violating the act; or (2) engages in a violation that raises an issue of significant public importance. Courts may grant any appropriate equitable or declaratory relief, including monetary damages. Additionally, courts, in order to vindicate the public interest, may assess a civil penalty up to $55,000 for a first violation, and up to $110,000 for subsequent violations. Finally, individuals alleging violations of the SCRA, for which the Attorney General has commenced an action, are authorized to intervene in previously commenced cases as a plaintiff."], "subsections": []}, {"section_title": "Private right of action\u2014Section 802 (50 U.S.C. \u00a7 4042).", "paragraphs": ["In addition to the right to join a previously commenced case, persons aggrieved by a violation of the SCRA have the ability to commence a civil action in their own right. The court may grant appropriate equitable or declaratory relief, including monetary damages. The court is also authorized to award the costs of the action and reasonable attorney fees to an individual who prevails in a civil action under this section."], "subsections": []}, {"section_title": "Preservation of remedies\u2014Section 803 (50 U.S.C. \u00a7 4043).", "paragraphs": ["This section provides that Sections 801 and 802 do not preclude or limit any other remedies available under the law, including consequential or punitive damages for violations of the SCRA."], "subsections": []}]}]}}
{"id": "R45558", "title": "The First Step Act of 2018: An Overview", "released_date": "2019-03-04T00:00:00", "summary": ["On December 21, 2018, President Trump signed into law the First Step Act of 2018 (P.L. 115-391). The act was the culmination of several years of congressional debate about what Congress might do to reduce the size of the federal prison population while also creating mechanisms to maintain public safety. This report provides an overview of the provisions of the act.", "The act has three major components: (1) correctional reform via the establishment of a risk and needs assessment system at the Bureau of Prisons (BOP), (2) sentencing reform via changes to penalties for some federal offenses, and (3) the reauthorization of the Second Chance Act of 2007 (P.L. 110-199). The act also contains a series of other criminal justice-related provisions.", "The First Step Act requires the Department of Justice (DOJ) to develop a risk and needs assessment system to be used by BOP to assess the recidivism risk of all federal prisoners and to place prisoners in programs and productive activities to reduce this risk. Prisoners who successfully complete recidivism reduction programming and productive activities can earn additional time credits that will allow them to be placed in prerelease custody (i.e., home confinement or a Residential Reentry Center) earlier than they were previously allowed. The act prohibits prisoners convicted of any one of dozens of offenses from earning additional time credits, though these prisoners can earn other benefits, such as additional visitation time, for successfully completing recidivism reduction programming. Offenses that make prisoners ineligible to earn additional time credits can generally be categorized as violent, terrorism, espionage, human trafficking, sex and sexual exploitation, repeat felon in possession of firearm, certain fraud, or high-level drug offenses.", "The act makes changes to the penalties for some federal offenses. The act modified mandatory minimum prison sentences for some drug traffickers with prior drug convictions by increasing the threshold for prior convictions that count toward triggering higher mandatory minimums for repeat offenders, reducing the 20-year mandatory minimum (applicable where the offender has one prior qualifying conviction) to a 15-year mandatory minimum, and reducing a life-in-prison mandatory minimum (applicable where the offender has two or more prior qualifying convictions) to a 25-year mandatory minimum. The act made the provisions of the Fair Sentencing Act of 2010 (P.L. 111-220) retroactive so that currently incarcerated offenders who received longer sentences for possession of crack cocaine than they would have received if sentenced for possession of the same amount of powder cocaine before the enactment of the Fair Sentencing Act can submit a petition in federal court to have their sentences reduced. The act also expands the safety valve provision, which allows courts to sentence low-level, nonviolent drug offenders with minor criminal histories to less than the required mandatory minimum for an offense. Finally, the act eliminated the stacking provision, which allowed prosecutors to charge offenders with a second and subsequent use of a firearm in furtherance of a drug trafficking or violent offense in the same criminal incident, which, if the offender is convicted, carries a 25-year mandatory minimum. Now, the mandatory minimum will only apply when the offender has a prior conviction for use of a firearm in furtherance of a drug trafficking or violent crime from a previous criminal prosecution.", "The First Step Act contains the Second Chance Reauthorization Act of 2018. This act reauthorizes appropriations for and expands the scope of some grant programs that were initially authorized under the Second Chance Act of 2007 (P.L. 110-199). The reauthorized programs include the Adult and Juvenile State and Local Offender Demonstration Program, Grants for Family-Based Substance Abuse Treatment, Careers Training Demonstration Grants, the Offender Reentry Substance Abuse and Criminal Justice Collaboration Program, and the Community-Based Mentoring and Transitional Service Grants to Nonprofit Organizations Program. The act also reauthorized and modified a pilot program that allows BOP to place certain elderly and terminally ill prisoners on home confinement to serve the remainder of their sentences.", "Finally, the First Step Act includes a series of other criminal justice-related provisions. These provisions include a prohibition on the use of restraints on pregnant inmates in the custody of BOP and the U.S. Marshals Service; a change to the way good time credit is calculated so prisoners can earn 54 days of good time credits for each year of imposed sentence rather than for each year of time served; a requirement for BOP to provide a way for employees to safely store firearms on BOP grounds; a requirement for BOP to try to place prisoners within 500 driving miles of their primary residences; authority for the Federal Prison Industries to sell products to public entities for use in correctional facilities, disaster relief, or emergency response, to the District of Columbia government, and to nonprofit organizations; a prohibition against the use of solitary confinement for juvenile delinquents in federal custody; and a requirement that BOP aid prisoners with obtaining identification before they are released."], "reports": {"section_title": "", "paragraphs": ["O n December 21, 2018, President Trump signed into law the First Step Act of 2018 ( P.L. 115-391 ). The act was the culmination of several years of congressional debate about what Congress might do to reduce the size of the federal prison population while also creating mechanisms to maintain public safety. ", "Correctional and sentencing reform was an issue that drew interest from many Members of Congress. Some Members took it up for fiscal reasons; they were concerned that the increase in the Bureau of Prisons' (BOP) budget would take resources away from the Department of Justice's (DOJ) other priorities. Other Members were interested in correctional reform due to concerns about the social consequences (e.g., the effects incarceration has on employment opportunities and the families of the incarcerated, or the normalizing of incarceration) of what some deem mass incarceration , or they wanted to roll back some of the tough on crime policy changes that Congress put in place during the 1980s and early 1990s. ", "This report provides an overview of the provisions of the First Step Act. The act has three major components: (1) correctional reform via the establishment of a risk and needs assessment system at BOP, (2) sentencing reform that involved changes to penalties for some federal offenses, and (3) the reauthorization of the Second Chance Act of 2007 ( P.L. 110-199 ). The act also contains a series of other criminal justice-related provisions that include, for example, changes to the way good time credits are calculated for federal prisoners, prohibiting the use of restraints on pregnant inmates, expanding the market for products made by the Federal Prison Industries, and requiring BOP to aid prisoners with obtaining identification before they are released."], "subsections": [{"section_title": "Correctional Reforms", "paragraphs": ["The correctional reform component of the First Step Act involves the development and implementation of a risk and needs assessment system (system) at BOP. "], "subsections": [{"section_title": "Development of the Risk and Needs Assessment System", "paragraphs": ["The act requires DOJ to develop the system to be used by BOP to assess the risk of recidivism of federal prisoners and assign prisoners to evidence-based recidivism reduction programs and productive activities to reduce this risk. DOJ is required to develop and release the system within 210 days of enactment of the First Step Act. The system is to be used to", "determine the risk of recidivism of each prisoner during the intake process and classify each prisoner as having a minimum, low, medium, or high risk; assess and determine, to the extent practicable, the risk of violent or serious prison misconduct of each prisoner; determine the type and amount of recidivism reduction programming that is appropriate for each prisoner and assign each prisoner to programming based on the prisoner's specific criminogenic needs ; periodically reassess the recidivism risk of each prisoner; reassign prisoners to appropriate recidivism reduction programs or productive activities based on their reassessed risk of recidivism to ensure that all prisoners have an opportunity to reduce their risk classification, that the programs address prisoners' criminogenic needs, and that all prisoners are able to successfully participate in such programs; determine when to provide incentives and rewards for successful participation in recidivism reduction programs or productive activities; determine when a prisoner is ready to transfer into prerelease custody or supervised release; and determine the appropriate use of audio technology for program course materials to accommodate prisoners with dyslexia.", "DOJ is authorized to use existing risk and needs assessment instruments, validated annually, to meet the requirements of the act.", "When developing the system, the Attorney General is required to consult with", "the Director of BOP; the Director of the Administrative Office of the United States Courts; the Director of the Office of Probation and Pretrial Services; the Director of the National Institute of Justice; the Director of the National Institute of Corrections; and the Independent Review Committee, which is established by the First Step Act.", "When developing the system, the Attorney General, with the assistance of the Independent Review Committee, is required to", "conduct a review of the existing risk and needs assessment systems; develop recommendations regarding recidivism reduction programs and productive activities; conduct ongoing research and data analysis on (1) evidence-based recidivism reduction programs related to the use of risk and needs assessment, (2) the most effective and efficient uses of such programs, (3) which programs are the most effective at reducing recidivism, and the type, amount, and intensity of programming that most effectively reduces the risk of recidivism, and (4) products purchased by federal agencies that are manufactured overseas and could be manufactured by prisoners participating in a prison work program without reducing job opportunities for other workers in the United States; annually review and validate the risk and needs assessment system, including an evaluation to ensure that assessments are based on dynamic risk factors (i.e., risk factors that can change); validate any tools that the system uses; and evaluate the recidivism rates among similarly classified prisoners to identify any unwarranted disparities, including disparities in such rates among similarly classified prisoners of different demographic groups, and make any changes to the system necessary to address any that are identified; and submit an annual report to Congress each year for five years starting in 2020 (see below).", "Also, prior to releasing the system, DOJ is required to consult with the Independent Review Committee to", "review the effectiveness of recidivism reduction programs in prisons operated by BOP; review available information regarding the effectiveness of recidivism reduction programs and productive activities provided in state prisons; review the policies for entering into recidivism reduction partnerships authorized by the act; and direct BOP regarding (1) evidence-based recidivism reduction programs, (2) the ability for faith-based organizations to provide educational programs outside of religious courses, and (3) the addition of any new effective recidivism reduction programs that DOJ finds.", "Under the act, the system is required to provide guidance on the type, amount, and intensity of recidivism reduction programming and productive activities to which each prisoner is assigned, including information on which programs prisoners should participate in based on their criminogenic needs and the ways that BOP can tailor programs to the specific criminogenic needs of each prisoner to reduce their risk of recidivism. The system is also required to provide guidance on how to group, to the extent practicable, prisoners with similar risk levels together in recidivism reduction programming and housing assignments. ", "The act requires BOP, when developing the system, to take steps to screen prisoners for dyslexia and to provide programs to treat prisoners who have it."], "subsections": []}, {"section_title": "Implementation of the Risk and Needs Assessment System", "paragraphs": ["Within 180 days of DOJ releasing the system, BOP is required to", "complete the initial risk and needs assessment for each prisoner (including for prisoners who were incarcerated before the enactment of the First Step Act); begin to assign prisoners to appropriate recidivism reduction programs based on the initial assessment; begin to expand the recidivism reduction programs and productive activities available at BOP facilities and add any new recidivism reduction programs and productive activities necessary to effectively implement the system; and begin to implement any other risk and needs assessment tools necessary to effectively implement the system over time. ", "BOP is required to expand recidivism reduction programming and productive activities capacity so that all prisoners have an opportunity to participate in risk reduction programs within two years of BOP completing initial risk and needs assessments for all prisoners. During the two-year period when BOP is expanding recidivism reduction programs and productive activities, prisoners who are nearing their release date are given priority for placement in such programs.", "BOP is required to provide all prisoners with the opportunity to participate in recidivism reduction programs that address their criminogenic needs or productive activities throughout their term of incarceration. High- and medium-risk prisoners are to have priority for placement in recidivism reduction programs, while the program focus for low-risk prisoners is on participation in productive activities.", "Prisoners who successfully participate in recidivism reduction programming or productive activities are required to be reassessed not less than annually, and high- and medium-risk prisoners who have less than five years remaining until their projected release date are required to have more frequent reassessments. If the reassessment shows that a prisoner's risk of recidivating or specific needs have changed, BOP is required to reassign the prisoner to recidivism reduction programs or productive activities consistent with those changes.", "DOJ is required to develop and administer a training program for BOP employees on how to use the system. This training program must include", "initial training to educate employees on how to use the system in an appropriate and consistent manner, continuing education, periodic training updates, and a requirement that employees biannually demonstrate competence in administering the system.", "To ensure that BOP is using the system in an appropriated and consistent manner, DOJ is required to monitor and assess how the system is used at BOP, including an annual audit of the system's use."], "subsections": []}, {"section_title": "Incentives and Rewards for Program Participation", "paragraphs": ["The First Step Act requires the use of incentives and rewards for prisoners to participate in recidivism reduction programs, including the following: ", "additional phone privileges, and if available, video conferencing privileges, of up to 30 minutes a day, and up to 510 minutes a month; additional time for visitation at the prison, as determined by the warden of the prison; transfer to a facility closer to the prisoner's release residence, subject to the availability of bedspace, the prisoner's security designation, and the recommendation from the warden of the prison at which the prisoner is incarcerated at the time of making the request; and additional incentives and rewards as determined by BOP, to include not less than two of the following: (1) increased commissary spending limits and product offerings, (2) greater email access, (3) consideration for transfer to preferred housing units; and (4) other incentives solicited from prisoners and determined appropriate by BOP. ", "Rewards or incentives prisoners earn are in addition to any other rewards or incentives for which they may be eligible (e.g., good time credit under 18 U.S.C. Section 3624(b))."], "subsections": []}, {"section_title": "Earned Time Credits for Program Participation", "paragraphs": ["Under the act, prisoners who successfully complete recidivism reduction programming are eligible to earn up to 10 days of time credits for every 30 days of program participation. Minimum and low-risk prisoners who successfully completed recidivism reduction or productive activities and whose assessed risk of recidivism has not increased over two consecutive assessments are eligible to earn up to an additional five days of time credits for every 30 days of successful participation. However, prisoners serving a sentence for a conviction of any one of multiple enumerated offenses are ineligible to earn additional time credits regardless of risk level, though these prisoners are eligible to earn the other incentives and rewards for program participation outlined above. Offenses that make prisoners ineligible to earn additional time credits can generally be categorized as violent, terrorism, espionage, human trafficking, sex and sexual exploitation, repeat felon in possession of firearm, certain fraud, or high-level drug offenses. Prisoners who are subject to a final order of removal under immigration law are ineligible for additional earned time credits provided by the First Step Act. ", "Prisoners cannot retroactively earn time credits for programs they completed prior to the enactment of the First Step Act, and they cannot earn time credits for programs completed while detained pending adjudication of their cases.", "The act requires BOP to develop guidelines for reducing time credits prisoners earned under the system for violating institutional rules or the rules of recidivism reduction programs and productive activities. The guidelines must also include a description of a process for prisoners to earn back any time credits they lost due to misconduct."], "subsections": []}, {"section_title": "Prerelease Custody", "paragraphs": ["A prisoner is not eligible to be placed in prerelease custody until", "the amount of time credits the prisoner has earned is equal to the remainder of his/her imposed term of imprisonment; the prisoner has shown a reduced risk of recidivism or has maintained a minimum or low recidivism risk during his/her term of imprisonment; the remainder of his/her imposed term of imprisonment has been computed under applicable law (e.g., any good time credits the prisoner has earned have been credited to his/her sentence); and the prisoner has been determined to be a minimum or low risk to recidivate based on his/her last two assessments, or has had a petition to be transferred to prerelease custody approved by the warden, after the warden's determination that the prisoner (1) would not be a danger to society if transferred to prerelease custody, (2) has made a good faith effort to lower his/her recidivism risk through participation in recidivism reduction programs or productive activities, and (3) is unlikely to recidivate.", "A prisoner who is required to serve a period of supervised release after his/her term of incarceration and has earned time credits equivalent to the time remaining on his/her prison sentence can be transferred directly to supervised release if the prisoner's latest reassessment shows that he/she is a minimum or low risk to recidivate. However, BOP cannot allow a prisoner to start serving a period of supervised release more than 12 months before he/she would otherwise be eligible to do so. If a prisoner has earned more than 12 months of additional time credits, the amount in excess of 12 months would be served in prerelease custody.", "Prisoners who are placed on prerelease custody on home confinement are subject to a series of conditions. Per the act, prisoners on home confinement are required to have 24-hour electronic monitoring that enables the identification of their location and the time, and must remain in their residences, except to ", "go to work or participate in job-seeking activities, participate in recidivism reduction programs or similar activities, perform community service, participate in crime victim restoration activities, receive medical treatment, attend religious activities, or participate in family-related activities that facilitate a prisoner's successful reentry. ", "When monitoring adherence to the conditions of prerelease custody, BOP is required, to the extent practicable, to reduce the restrictiveness of those conditions for prisoners who demonstrate continued compliance with their conditions.", "If a prisoner violates the conditions of prerelease custody, BOP is authorized to place more conditions on the prisoner, or revoke prerelease custody and require the prisoner to serve the remainder of the sentence in prison. If the violation is nontechnical in nature (e.g., committing a new crime), BOP is required to revoke the prisoner's prerelease custody.", "BOP is required to expand its capacity, if necessary, so that all eligible prisoners can be placed in prerelease custody."], "subsections": []}, {"section_title": "Reporting Requirements", "paragraphs": ["The act requires the submission of several reports to help Congress oversee the implementation and assess the effects of the system."], "subsections": [{"section_title": "Department of Justice Report to Congress", "paragraphs": ["Two years after the enactment of the First Step Act, and each year thereafter for the next five years, DOJ is required to submit a report to the House and Senate Judiciary Committees and the House and Senate Subcommittees on Commerce, Justice, Science, and Related Agencies (CJS) Appropriations that includes information on", "the types and effectiveness of recidivism reduction programs and productive activities provided by BOP, including the capacity of each program and activity at each prison and any gaps or shortages in capacity of such programs and activities; the recidivism rates of prisoners released from federal prison, based on the following criteria: (1) the primary offense of conviction; (2) the length of the sentence imposed and served; (3) the facility or facilities in which the prisoner's sentence was served; (4) the type of recidivism reduction programming; (5) prisoners' assessed and reassessed risk of recidivism; and (6) the type of productive activities; the status of prison work programs offered by BOP, including a strategy to expanding prison work opportunities for prisoners without reducing job opportunities for nonincarcerated U.S. workers; and any budgetary savings that have resulted from the implementation of the act, and a strategy for investing those savings in other federal, state, and local law enforcement activities and expanding recidivism reduction programs and productive activities at BOP facilities. "], "subsections": []}, {"section_title": "Report from the Independent Review Committee", "paragraphs": ["Within two years of the enactment of the First Step Act, the Independent Review Committee is required to submit a report to the House and Senate Judiciary Committees and the House and Senate CJS Appropriations Subcommittees that includes", "a list of all offenses that make prisoners ineligible for earned time credits under the system, and the number of prisoners excluded for each offense by age, race, and sex; the criminal history categories of prisoners ineligible to receive earned time credits under the system, and the number of prisoners excluded for each category by age, race, and sex; the number of prisoners ineligible for earned time credits under the system who did not participate in recidivism reduction programming or productive activities by age, race, and sex; and any recommendations for modifications to the list of offenses that make prisoners ineligible to earn time credits and any other recommendations regarding recidivism reduction."], "subsections": []}, {"section_title": "Government Accountability Office Audit", "paragraphs": ["Within two years of BOP implementing the system, and every two years thereafter, the Government Accountability Office is required to audit how the system is being used at BOP facilities. The audit must include an analysis of the following:", "whether prisoners are being assessed under the system with the required frequency; whether BOP is able to offer recidivism reduction programs and productive activities as defined in 18 U.S.C. Section 3632(f); whether BOP is offering the type, amount, and intensity of recidivism reduction programs and productive activities that allow prisoners to earn the maximum amount of additional time credits for which they are eligible; whether DOJ is carrying out the duties required by the First Step Act; whether employees of the BOP are receiving the training required by the act; whether BOP offers work assignments to all prisoners who might benefit from them; whether BOP transfers prisoners to prerelease custody or supervised release as soon as they are eligible; and the rates of recidivism among similarly classified prisoners to identify any unwarranted disparities, including disparities among similarly classified prisoners of different demographic groups."], "subsections": []}]}, {"section_title": "Authorization of Appropriations", "paragraphs": ["The First Step Act authorizes $75 million per fiscal year from FY2019 to FY2023 for DOJ to establish and implement the system; 80% of this funding is to be directed to BOP for implementation."], "subsections": []}]}, {"section_title": "Sentencing Reforms10", "paragraphs": ["The First Step Act makes several changes to federal sentencing law. The act reduced the mandatory minimum sentences for certain drug offenses, expanded the scope of the safety valve, eliminated the stacking provision, and made the provisions of the Fair Sentencing Act of 2010 ( P.L. 111-220 ) retroactive."], "subsections": [{"section_title": "Changes to Mandatory Minimums for Certain Drug Offenders", "paragraphs": ["The act adjusts the mandatory minimum sentences for certain drug traffickers with prior drug convictions. The act reduces the 20-year mandatory minimum (applicable where the offender has one prior qualifying conviction) to a 15-year mandatory minimum and reduces the life sentence mandatory minimum (applicable where the offender has two or more prior qualifying convictions) to a 25-year mandatory minimum. The act also changes the prior conviction criteria under which these mandatory minimum penalties apply. In order for these mandatory minimums to apply, the offender's prior convictions must meet the new criteria of a serious drug felony or a serious violent felony rather than any felony drug offense ."], "subsections": []}, {"section_title": "Expanding the Safety Valve", "paragraphs": ["The act makes drug offenders with minor criminal records eligible for the safety valve provision, which previously applied only to offenders with virtually spotless criminal records. The safety valve allows judges to sentence low-level, nonviolent drug offenders to a term of imprisonment that is less than the applicable mandatory minimum."], "subsections": []}, {"section_title": "Eliminating the Stacking Provision", "paragraphs": ["The act eliminates stacking by providing that the 25-year mandatory minimum for a \"second or subsequent\" conviction for use of a firearm in furtherance of a drug trafficking crime or a violent crime applies only where the offender has a prior conviction for use of a firearm that is already final. Under prior law, two violations that were charged concurrently triggered the enhanced mandatory minimum."], "subsections": []}, {"section_title": "Retroactivity of the Fair Sentencing Act", "paragraphs": ["The First Step Act authorizes courts to apply retroactively the Fair Sentencing Act of 2010, which increased the threshold quantities of crack cocaine sufficient to trigger mandatory minimum sentences, by resentencing qualified prisoners as if the Fair Sentencing Act had been in effect at the time of their offenses. The retroactive application of the Fair Sentencing Act is not automatic. A prisoner must petition the court in order to have his/her sentence reduced."], "subsections": []}]}, {"section_title": "Reauthorization of the Second Chance Act", "paragraphs": ["The Second Chance Reauthorization Act of 2018 (Title V of the First Step Act) reauthorizes many of the grant programs that were initially authorized by the Second Chance Act of 2007 ( P.L. 110-199 ). The Second Chance Reauthorization Act also reauthorized a BOP pilot program to provide early release to elderly prisoners."], "subsections": [{"section_title": "Reauthorization of the Adult and Juvenile State and Local Offender Demonstration Program", "paragraphs": ["The Second Chance Reauthorization Act amends the authorization for the Adult and Juvenile State and Local Offender Demonstration Program so grants can be awarded to states, local governments, territories, or Indian tribes, or any combination thereof, in partnership with interested persons (including federal correctional officials), service providers, and nonprofit organizations, for the strategic planning and implementation of reentry programs. The Second Chance Reauthorization Act amended the authorization for this program to allow grants to be used for reentry courts and promoting employment opportunities consistent with a transitional jobs strategy in addition to the purposes for which grants could already be awarded. ", "The act also amended the Second Chance Act authorizing legislation for the program to allow DOJ to award both planning and implementation grants. DOJ is required to develop a procedure to allow applicants to submit a single grant application when applying for both planning and implementation grants. ", "Under the amended program, DOJ is authorized to award up to $75,000 for planning grants and is prohibited from awarding more than $1 million in planning and implementation grants to any single entity. The program period for planning grants is limited to one year and implementation grants are limited to two years. DOJ is also required to make every effort to ensure the equitable geographic distribution of grants, taking into account the needs of underserved populations, including tribal and rural communities. ", "Under the amended program, applicants for implementation grants are subject to several requirements, including", "demonstrating that the application has the explicit support of the chief executive, or the designee, of the state, unit of government, territory, or Indian tribe applying for the grant; discussing the role of federal and state corrections, community corrections, juvenile justice systems, and tribal and local jail systems in ensuring the successful reentry of ex-offenders into the applicants' communities; providing evidence of collaboration with state, local, and tribal agencies overseeing health, housing, child welfare, education, substance abuse, victim services, employment agencies, and local law enforcement agencies; providing a plan for analyzing the barriers (e.g., statutory, regulatory, rules-based, or practice-based) to reentry for ex-offenders in the applicants' communities; demonstrating that a state, local, territorial, or tribal reentry task force will be used to carry out the activities funded under the grant; providing a plan for continued collaboration with a local evaluator; and demonstrating that the applicant participated in the planning grant process, or engaged in a comparable reentry planning process.", "DOJ is also required to give priority consideration to applications for implementation grants that focus on areas with a disproportionate population of returning prisoners, received input from stakeholders and coordinated with prisoners families, demonstrate effective case assessment and management, review the process by which violation of community supervision are adjudicated, provide for an independent evaluation of reentry programs, target moderate and high-risk returning prisoners, and target returning prisoners with histories of homelessness, substance abuse, or mental illness.", "Under the amended program, applicants for implementation grants would be required to develop a strategic reentry plan that contains measurable three-year performance outcomes. Applicants would be required to develop a feasible goal for reducing recidivism using baseline data collected through the partnership with the local evaluator. Applicants are required to use, to the extent practicable, random assignment and controlled studies, or rigorous quasi-experimental studies with matched comparison groups, to determine the effectiveness of the program. ", "As authorized by the Second Chance Act, grantees under the Adult and Juvenile State and Local Offender Demonstration program are required to submit annual reports to DOJ that identify the specific progress made toward achieving their strategic performance outcomes, which they are required to submit as a part of their reentry strategic plans. Data on performance measures only need to be submitted by grantees that receive an implementation grant. The act repeals some performance outcomes (i.e., increased housing opportunities, reduction in substance abuse, and increased participation in substance abuse and mental health services) and adds the following outcomes:", "increased number of staff trained to administer reentry services; increased proportion of eligible individuals served by the program; increased number of individuals receiving risk screening needs assessment and case planning services; increased enrollment in and completion of treatment services, including substance abuse and mental health services for offenders who need them; increased enrollment in and degrees earned from educational programs; increased number of individuals obtaining and maintaining employment; increased number of individuals obtaining and maintaining housing; increased self-reports of successful community living, including stability of living situation and positive family relationships; reduction in drug and alcohol use; and reduction in recidivism rates for individuals receiving reentry services after release, as compared to either baseline recidivism rates in the jurisdiction of the grantee or recidivism rates of the comparison or control group.", "The act allows applicants for implementation grants to include a cost-benefit analysis as a performance measure under their required reentry strategic plan.", "The act reauthorizes appropriations for the program at $35 million for each fiscal year from FY2019 to FY2023."], "subsections": []}, {"section_title": "Reauthorization of Grants for Family-Based Substance Abuse Treatment", "paragraphs": ["The Second Chance Act authorized DOJ to make grants to states, local governments, and Indian tribes to develop, implement, and expand the use of family-based substance abuse treatment programs as an alternative to incarceration for parents who were convicted of nonviolent drug offenses and to provide prison-based family treatment programs for incarcerated parents of minor children. ", "The Second Chance Reauthorization Act amends the authorization for the program to allow grants to be awarded to nonprofit organizations and requires DOJ to give priority consideration to nonprofit organizations that demonstrate a relationship with state and local criminal justice agencies, including the judiciary and prosecutorial agencies or local correctional agencies. ", "The act reauthorizes appropriations for the program at $10 million for each fiscal year from FY2019 to FY2023. "], "subsections": []}, {"section_title": "Reauthorization of the Grant Program to Evaluate and Improve Educational Methods at Prisons, Jails, and Juvenile Facilities", "paragraphs": ["The Second Chance Act authorized a grant program to evaluate and improve academic and vocational education in prisons, jails, and juvenile facilities. This program authorizes DOJ to make grants to states, units of local government, territories, Indian tribes, and other public and private entities to identify and implement best practices related to the provision of academic and vocational education in prisons, jails, and juvenile facilities. Grantees are required to submit reports within 90 days of the end of the final fiscal year of a grant detailing the progress they have made, and to allow DOJ to evaluate improved academic and vocational education methods carried out with grants provided under this program. ", "The Second Chance Reauthorization Act amends the authorizing legislation for this program to require DOJ to identify and publish best practices relating to academic and vocational education for offenders in prisons, jails, and juvenile facilities. In identifying best practices, the evaluations conducted under this program must be considered.", "The act reauthorizes appropriations for this program at $5 million for each fiscal year from FY2019 to FY2023."], "subsections": []}, {"section_title": "Reauthorization of the Careers Training Demonstration Grants", "paragraphs": ["The Second Chance Act authorized DOJ to make grants to states, units of local government, territories, and Indian tribes to provide technology career training for prisoners. Grants could be awarded for programs that establish technology careers training programs for inmates in a prison, jail, or juvenile detention facility.", "The Second Chance Reauthorization Act expanded the scope of the program to allow grant funds to be used to provide any career training to those who are soon to be released and during transition and reentry into the community. The act makes nonprofit organizations an eligible applicant under the program. Under the legislation, grants funds could be used to provide subsidized employment if it is a part of a career training program. The act also requires DOJ to give priority consideration to any application for a grant that", "provides an assessment of local demand for employees in the geographic area to which offenders are likely to return, conducts individualized reentry career planning upon admission to a correctional facility or post-release employment planning for each offender served under the grant, demonstrates connections to local employers, and evaluates employment outcomes.", "The act reauthorizes appropriations for this program at $10 million for each fiscal year from FY2019 to FY2023."], "subsections": []}, {"section_title": "Reauthorization of the Offender Reentry Substance Abuse and Criminal Justice Collaboration Program", "paragraphs": ["The Second Chance Act authorized DOJ to make grants to states, units of local governments, territories, and Indian tribes in order to improve drug treatment programs in prisons and reduce the post-prison use of alcohol and other drugs by long-term users under correctional supervision. Grants may be used to continue or improve existing drug treatment programs, develop and implement programs for long-term users, provide addiction recovery support services, or establish medication assisted treatment (MAT) services as part of any drug treatment program offered to prisoners. ", "The Second Chance Reauthorization Act reauthorizes appropriations for this program at $15 million for each fiscal year from FY2019 to FY2023."], "subsections": []}, {"section_title": "Reauthorization of the Community-Based Mentoring and Transitional Service Grants to Nonprofit Organizations Program", "paragraphs": ["The Second Chance Act authorized DOJ to make grants to nonprofit organizations and Indian tribes to provide mentoring and other transitional services for offenders being released into the community. Funds could be used for mentoring programs in prisons or jails and during reentry, programs providing transition services during reentry, and programs providing training for mentors on the criminal justice system and victims issues. ", "The Second Chance Reauthorization Act amends the authorization for the program to pivot the focus toward providing community-based transitional services to former inmates returning to the community. Reflecting the change in focus, the reauthorization changed the name of the program to \"Community-based Mentoring and Transitional Services Grants to Nonprofit Organizations.\" The act specifies the transitional services that can be provided to returning inmates under the program, including educational, literacy, vocational, and the transitional jobs strategy; substance abuse treatment and services; coordinated supervision and services for offenders, including physical health care and comprehensive housing and mental health care; family services; and validated assessment tools to assess the risk factors of returning prisoners. ", "The act reauthorizes appropriations for this program at $15 million for each fiscal year from FY2019 to FY2023."], "subsections": []}, {"section_title": "Reauthorization and Expansion of the BOP Early Release Pilot Program", "paragraphs": ["The Second Chance Reauthorization Act reauthorized and expanded the scope of a pilot program initially authorized under the Second Chance Act that allowed BOP to place certain elderly nonviolent offenders on home confinement to serve the remainder of their sentences. BOP was authorized to conduct this pilot program at one facility for FY2009 and FY2010. An offender eligible to be released through the program had to meet the following requirements:", "at least 65 years old; never have been convicted of a violent, sex-related, espionage, or terrorism offense; sentenced to less than life; served the greater of 10 years or 75% of his/her sentence; not received a determination by BOP to have a history of violence, or of engaging in conduct constituting a sex, espionage, or terrorism offense; not escaped or attempted to escape; received a determination that release to home detention would result in a substantial reduction in cost to the federal government; and received a determination that he/she is not a substantial risk of engaging in criminal conduct or of endangering any person or the public if released to home detention.", "The Second Chance Reauthorization Act reestablishes the pilot program and allows BOP to operate it at multiple facilities from FY2019 to FY2023. The act also modifies the eligibility criteria for elderly offenders so that any offenders who are at least 60 year old and have served two-thirds of their sentences can be placed on home confinement.", "The act also expands the program so that terminally ill offenders can be placed on home confinement. Eligibility criteria for home confinement for terminally ill offenders under the pilot program is the same as that for elderly offenders, except that terminally ill offenders of any age and who have served any portion of their sentences, even life sentences, are eligible for home confinement. Terminally ill prisoners are those who are deemed by a BOP medical doctor to need care at a nursing home, intermediate care facility, or assisted living facility, or those who have been diagnosed with a terminal illness."], "subsections": []}, {"section_title": "Reauthorization of Reentry Research", "paragraphs": ["The Second Chance Act authorized appropriations for a series of reentry-related research projects, including the following:", "a study by the National Institute of Justice (NIJ) identifying the number and characteristics of children with incarcerated parents and their likelihood of engaging in criminal activity; a study by NIJ identifying mechanisms to compare recidivism rates between states; a study by NIJ on the characteristics of individuals released from prison who do not recidivate; a study by the Bureau of Justice Statistics (BJS) analyzing the populations that present unique reentry challenges; studies by BJS to determine the characteristics of individuals who return to prison, jail, or a juvenile facility (including which individuals pose the highest risk to the community); annual reports by BJS on the profile of the population leaving prisons, jails, or juvenile facilities and entering the community; a national recidivism study by BJS every three years; a study by BJS of violations and revocation of community-based supervision (e.g., probation, parole, or other forms of post-incarceration supervision) violations; providing grants to states to fund studies aimed at improving data collection on former prisoners who have their post-incarceration supervision revoked in order to identify which such individuals pose the greatest risk to the community; and collecting data and developing best practices concerning the communication and coordination between state corrections and child welfare agencies, to ensure the safety and support of children of incarcerated parents. ", "The Second Chance Reauthorization Act reauthorizes appropriations for these research projects at $5 million for each fiscal year from FY2019 to FY2023."], "subsections": []}, {"section_title": "Evaluation of the Second Chance Act", "paragraphs": ["Within five years of the enactment of the Second Chance Reauthorization Act, NIJ is required to evaluate grants used by DOJ to support reentry and recidivism reduction programs at the state, local, tribal, and federal levels. Specifically, NIJ is required to evaluate the following:", "whether the programs are cost-effective, including the extent to which the programs improved reentry outcomes; whether the programs effectively delivered services; the effects programs had on the communities and participants involved; the effects programs had on related programs and activities; the extent to which programs met the needs of various demographic groups; the quality and effectiveness of technical assistance provided by DOJ to grantees for implementing such programs; and other factors as may be appropriate.", "NIJ is required to identify outcome measures, including employment, housing, education, and public safety, that are the goals of programs authorized by the Second Chance Act and metrics for measuring whether those programs achieved the intended results. As a condition of receiving funding under programs authorized by the Second Chance Act, grantees are required to collect and report data to DOJ related to those metrics.", "NIJ is required to make data collected during evaluations of Second Chance Act programs publicly available in a manner that protects the confidentiality of program participants and is consistent with applicable law. NIJ is also required to make the final evaluation reports publicly available."], "subsections": []}, {"section_title": "Recidivism Reduction Partnerships", "paragraphs": ["The Second Chance Reauthorization Act requires BOP to develop policies for wardens of prisons and community-based facilities to enter into recidivism-reducing partnerships with nonprofit and other private organizations, including faith-based and community-based organizations to deliver recidivism reduction programming."], "subsections": []}, {"section_title": "Repealed Programs", "paragraphs": ["The Second Chance Reauthorization Act repealed the authorization for the State, Tribal, and Local Reentry Courts program (Section 111 of the Second Chance Act), the Responsible Reintegration of Offenders program (Section 212), and the Study on the Effectiveness of Depot Naltrexone for Heroin Addiction program (Section 244)."], "subsections": []}]}, {"section_title": "Other Provisions", "paragraphs": ["In addition to correctional and sentencing reform and reauthorizing the Second Chance Act, the First Step Act contained a series of other criminal justice-related provisions."], "subsections": [{"section_title": "Modification of Good Time Credits", "paragraphs": ["The act amended 18 U.S.C. Section 3624(b) so that federal prisoners can earn up to 54 days of good time credit for every year of their imposed sentence rather than for every year of their sentenced served . Prior to the amendment, BOP interpreted the good time credit provision in Section 3624(b) to mean that prisoners are eligible to earn 54 days of good time credit for every year they serve. For example, this means that an offender who was sentenced to 10 years in prison and earned the maximum good time credits each year could be released after serving eight years and 260 days, having earned 54 days of good time credit for each year of the sentence served, but in effect, only 47 days of good time credit for every year of the imposed sentence."], "subsections": []}, {"section_title": "Bureau of Prisons Secure Firearm Storage", "paragraphs": ["The act requires BOP to provide a secure storage area outside of the secure perimeter of a correctional institution for qualified law enforcement officers employed by BOP to store firearms or allow this class of employees to store firearms in their personal vehicles in lockboxes approved by BOP. The act also requires BOP, notwithstanding any other provision of law, to allow these same employees to carry concealed firearms on prison grounds but outside of the secure perimeter of the correctional institution. "], "subsections": []}, {"section_title": "Prohibition on the Use of Restraints on Pregnant Prisoners", "paragraphs": ["The act prohibits BOP or the U.S. Marshals Service (USMS) from using restraints on pregnant inmates in their custody. The prohibition on the use of restraints begins on the date that pregnancy is confirmed by a healthcare professional. The restriction ends when the inmate completes postpartum recovery.", "The prohibition on the use of restraints does not apply if the inmate is determined to be an immediate and credible flight risk or poses an immediate and serious threat of harm to herself or others that cannot be reasonably prevented by other means, or a healthcare professional determines that the use of restraints is appropriate for the medical safety of the inmate. Only the least restrictive restraints necessary to prevent escape or harm can be used. The exception to the use of restraints does not permit BOP or USMS to use them around the ankles, legs, or waist of an inmate; restrain an inmate's hands behind her back; use four-point restraints; or attach an inmate to another inmate. Upon the request of a healthcare professional, correctional officials or deputy marshals shall refrain from using restraints on an inmate or shall remove restraints used on an inmate.", "If restraints are used on a pregnant inmate, the correctional official or deputy marshal who used the restraints is required to submit a report within 30 days to BOP or USMS, and the healthcare provider responsible for the inmate's health and safety, that describes the facts and circumstances surrounding the use of the restraints, including the reason(s) for using them; the details of their use, including the type of restraint and length of time they were used; and any observable physical effects on the prisoner.", "BOP and USMS are required to develop training guidelines regarding the use of restraints on inmates during pregnancy, labor, and postpartum recovery. The guidelines are required to include the following:", "how to identify certain symptoms of pregnancy that require immediate referral to a healthcare professional; circumstances under which exceptions to the prohibition on the use of restraints would apply; in cases where an exception applies, how to use restraints in a way that does not harm the inmate, the fetus, or the newborn; the information required to be reported when restraints are used; and the right of a healthcare professional to request that restraints not be used and the requirement to comply with such a request. "], "subsections": []}, {"section_title": "Placement of Prisoners Closer to Families", "paragraphs": ["The act amends 18 U.S.C. Section 3621(b) to require BOP to house prisoners in facilities as close to their primary residence as possible, and to the extent practicable, within 500 driving miles, subject to a series of considerations. When making decisions about where to house a prisoner, BOP must consider bedspace availability, the prisoner's security designation, the prisoner's programmatic needs, the prisoner's mental and medical health needs, any request made by the prisoner related to faith-based needs, recommendations of the sentencing court, and other security concerns. BOP is also required, subject to these considerations and a prisoner's preference for staying at his/her current facility or being transferred, to transfer a prisoner to a facility closer to his/her primary residence even if the prisoner is currently housed at a facility within 500 driving miles."], "subsections": []}, {"section_title": "Home Confinement for Low-Risk Prisoners", "paragraphs": ["The act amends 18 U.S.C. Section 3624(c)(2) to require BOP, to the extent practicable, to place prisoners with lower risk levels and lower needs on home confinement for the maximum amount of time permitted under this paragraph. Under Section 3624(c)(2), BOP is authorized to place prisoners in prerelease custody on home confinement for 10% of the term of imprisonment or six months, whichever is shorter."], "subsections": []}, {"section_title": "Increasing the Use and Transparency of Compassionate Release", "paragraphs": ["The act amends 18 U.S.C. Section 3582(c) regarding when a court can modify a term of imprisonment once it is imposed. Under Section 3582(c)(1)(A), a court, upon a petition from BOP, can reduce a prisoner's sentence and impose a term of probation or supervised release, with or without conditions, equal to the amount of time remaining on the prisoner's sentence if the court finds that \"extraordinary and compelling reasons warrant such a reduction,\" or the prisoner is at least 70 years of age, the prisoner has served at least 30 years of his/her sentence, and a determination has been made by BOP that the prisoner is not a danger to the safety of any other person or the community. This is sometimes referred to as compassionate release . The amendments made by the act allow the court to reduce a prisoner's sentence under Section 3582(c)(1)(A) upon a petition from BOP or the prisoner if the prisoner has fully exhausted all administrative rights to appeal a failure by BOP to bring a motion on the prisoner's behalf or upon a lapse of 30 days from the receipt of such a request by the warden of the prisoner's facility, whichever is earlier.", "The act also requires BOP within 72 hours of a prisoner being diagnosed with a terminal illness to notify the prisoner's attorney, partner, and family about the diagnosis and inform them of their option to submit a petition for compassionate release on the prisoner's behalf. Within seven days, BOP is required to provide the prisoner's partner and family with an opportunity to visit. BOP is also required to provide assistance to the prisoner with drafting and submitting a petition for compassionate release if such assistance is requested by the prisoner or the prisoner's attorney, partner, or family. BOP is required to process requests for compassionate release within 14 days.", "If a prisoner is mentally or physically unable to submit a petition for compassionate release, BOP is required to notify the prisoner's attorney, partner, or family that they can submit a petition on the prisoner's behalf. BOP is required to accept and process requests for compassionate release that are drafted by the prisoner's attorney, partner, or family. BOP is also required to assist prisoners who are mentally or physically unable to prepare their own request if such assistance is requested by the prisoner's attorney, partner, or family.", "BOP is required to make available to prisoners information regarding their ability to request compassionate release, the timeline for submitting a request, and their right to appeal to a court the denial of a request after exhausting all administrative appeals BOP makes available to prisoners. This information is to appear in written materials for prisoners and staff, and be visibly posted", "The act also requires BOP to submit annual reports to the House and Senate Judiciary Committees that provides data on how BOP is processing applications for compassionate release."], "subsections": []}, {"section_title": "Identification for Returning Citizens", "paragraphs": ["The act amends the authorization for the federal prisoner reentry initiative (34 U.S.C. Section 60541(b)) to require BOP to assist prisoners and offenders who were sentenced to a period of community confinement with obtaining a social security card, driver's license or other official photo identification, and birth certificate prior to being released from custody. ", "The act also amends 18 U.S.C. Section 4042(a) to require BOP to establish prerelease planning procedures to help prisoners apply for federal and state benefits and obtain identification, including a social security card, driver's license or other official photo identification, and birth certificate. BOP is required to help prisoners secure these benefits, subject to any limitations in law, prior to being released. The act also amends Section 4042(a) to require prerelease planning to include any individuals who only served a sentence of community confinement. "], "subsections": []}, {"section_title": "Expanding Prisoner Employment Through the Federal Prison Industries", "paragraphs": ["The act authorizes the Federal Prison Industries (FPI, also known by its trade name, UNICOR) to sell products to public entities for use in correctional facilities, disaster relief, or emergency response; to the District of Columbia government; and to nonprofit organizations. However, FPI is not allowed to sell office furniture to nonprofit organizations. ", "The act also requires BOP to set aside 15% of the wages paid to prisoners with FPI work assignments in a fund that will be payable to the prisoner upon release to aid with the cost of transitioning back into the community."], "subsections": []}, {"section_title": "De-escalation Training", "paragraphs": ["The act requires BOP to provide training to correctional officers and other BOP employees (including correctional officers and employees of facilities that contract with BOP to house prisoners) on how to de-escalate encounters between a law enforcement officer or an officer or employee of BOP and a civilian or a prisoner, and how to identify and appropriately respond to incidents that involve people with mental illness or other cognitive deficits."], "subsections": []}, {"section_title": "Evidence-Based Treatment for Opioid and Heroin Abuse", "paragraphs": ["Within 90 days of enactment of the act, BOP is required to submit a report to the House and Senate Judiciary and Appropriations Committees that assesses the availability of, and the capacity of BOP to provide, evidence-based treatment to prisoners with opioid and heroin abuse problems, including MAT, where appropriate. As a part of the report, BOP is required to provide a plan to expand access to evidence-based treatment for prisoners with heroin and opioid abuse problems, including MAT, where appropriate. After submitting the report, BOP is required to execute the plan it outlines in the report.", "The act places a similar requirement on the Administrative Office of the United States Courts (AOUSC) regarding evidence-based treatment for opioid and heroin abuse for prisoners serving a term of supervised release. AOUSC has 120 days after enactment to submit its report to the House and Senate Judiciary and Appropriations Committees."], "subsections": []}, {"section_title": "BOP Pilot Programs for Mentoring and Rescue Animals", "paragraphs": ["The act requires BOP to establish two pilot programs that are to run for five years in at least 20 facilities. The first is a mentoring program that is to pair youth with volunteer mentors from faith-based or community organizations. The other program is to use prisoners to provide training and therapy to animals seized by federal law enforcement officers and to abandoned or rescued animals in the care of organizations that provide shelter and similar services."], "subsections": []}, {"section_title": "National Prisoner Statistics Program", "paragraphs": ["The act requires BJS to expand data collected under its National Prisoner Statistics program to include 26 new data elements related to federal prisoners. Some of the data the act requires BJS to collect include the following:", "the number of prisoners who are veterans; the number of prisoners who have been placed in solitary confinement in the past year; the number of female prisoners who are known to be pregnant and the result of those pregnancies; the number of prisoners who received MAT to treat a substance abuse problem; the number of prisoners who are the parent or guardian of a minor child; the number of assaults on BOP staff by prisoners and the number of criminal prosecutions that resulted from those assaults; the capacity of recidivism reduction programs and productive activities to accommodate eligible prisoners at each BOP facility; and the number of prisoners enrolled in recidivism reduction programs and productive activities at each BOP facility, broken down by risk level and by program, and the number of those enrolled prisoners who successfully completed each program.", "Starting one year after the enactment of the act, BJS is required to submit an annual report to the House and Senate Judiciary Committees for a period of seven years that contains the data specified in the act."], "subsections": []}, {"section_title": "Healthcare Products", "paragraphs": ["The act requires BOP to provide tampons and sanitary napkins that meet industry standards to prisoners for free and in a quantity that meets the healthcare needs of each prisoner."], "subsections": []}, {"section_title": "Federal Interagency Reentry Coordination", "paragraphs": ["The act requires the Attorney General to coordinate with the Secretary of Housing and Urban Development, the Secretaries of Labor, Education, Health and Human Services, Veterans Affairs, and Agriculture, and the heads of other relevant federal agencies, as well as interested persons, service providers, nonprofit organizations, and state, tribal, and local governments, on federal reentry policies, programs, and activities, with an emphasis on evidence-based practices and the elimination of duplication of services.", "The Attorney General, in consultation with the secretaries specified in the act, is required to submit a report to Congress within two years of the enactment of the act that summarizes the achievements of the coordination, and includes recommendations for Congress on how to further reduce barriers to successful reentry."], "subsections": []}, {"section_title": "Juvenile Solitary Confinement", "paragraphs": ["The act prohibits juvenile facilities from using room confinement for discipline, punishment, retaliation, or any reason other than as a temporary response to a covered juvenile's behavior that poses a serious and immediate risk of physical harm to any individual. The provisions of the act only apply to juveniles who have been charged with an alleged act of juvenile delinquency; have been adjudicated as delinquent under Chapter 403, Title 18 of the U.S. Code; or are facing charges as an adult in a federal district court for an alleged criminal offense. ", "Juvenile facilities are required to try to use less restrictive techniques, such as talking with the juvenile in an attempt to de-escalate the situation or allowing a mental health professional to talk to the juvenile, before placing the juvenile in room confinement. If the less restrictive techniques do not work and the juvenile is placed in room confinement, the staff of the juvenile facility is required to tell the juvenile why he/she is being placed in room confinement. Staff are also required to inform the juvenile that he/she will be released from room confinement as soon as he/she regains self-control and no longer poses a threat of physical harm to himself/herself or others. If a juvenile who poses a threat of harm to others does not sufficiently regain self-control, staff must inform the juvenile that he/she will be released within three hours of being placed in room confinement, or in the case of a juvenile who poses a threat of harm to himself/herself, that he/she will be released within 30 minutes of being placed in room confinement. If after the maximum period of confinement allowed the juvenile continues to pose a threat of physical harm to himself/herself or others, the juvenile is to be transferred to another juvenile facility or another location in the current facility where services can be provided to him/her. If a qualified mental health professional believes that the level of crisis services available to the juvenile are not adequate, the staff at the juvenile facility is to transfer the juvenile to a facility that can provide adequate services. The act prohibits juvenile facilities from using consecutive periods of room confinement on juveniles. "], "subsections": []}]}]}}
{"id": "RL33028", "title": "Social Security: The Trust Funds", "released_date": "2019-05-08T00:00:00", "summary": ["The Social Security program pays monthly cash benefits to retired or disabled workers and their family members and to the family members of deceased workers. Program income and outgo are accounted for in two separate trust funds authorized under Title II of the Social Security Act: the Federal Old-Age and Survivors Insurance (OASI) Trust Fund and the Federal Disability Insurance (DI) Trust Fund. Projections show that the OASI fund will remain solvent until 2034, whereas the DI fund will remain solvent until 2052, meaning that each trust fund is projected to be able to pay benefits scheduled under current law in full and on time up to that point. Following the depletion of trust fund reserves (2052 for DI and 2034 for OASI), continuing income to each fund is projected to cover 91% of DI scheduled benefits and 77% of OASI scheduled benefits. The two trust funds are legally distinct and do not have authority to borrow from each other. However, Congress has authorized the shifting of funds between OASI and DI in the past to address shortfalls in a particular fund. Therefore, this CRS report discusses the operations of the OASI and DI trust funds on a combined basis, referring to them collectively as the Social Security trust funds. On a combined basis, the trust funds are projected to remain solvent until 2035. Following depletion of combined trust fund reserves at that point, continuing income is projected to cover 80% of scheduled benefits.", "Social Security is financed by payroll taxes paid by covered workers and their employers, federal income taxes paid by some beneficiaries on a portion of their benefits, and interest income from the Social Security trust fund investments. Social Security tax revenues are invested in U.S. government securities (special issues) held by the trust funds, and these securities earn interest. The tax revenues exchanged for the U.S. government securities are deposited into the General Fund of the Treasury and are indistinguishable from revenues in the General Fund that come from other sources. Because the assets held by the trust funds are U.S. government securities, the trust fund balance represents the amount of money owed to the Social Security trust funds by the General Fund of the Treasury. Funds needed to pay Social Security benefits and administrative expenses come from the redemption or sale of U.S. government securities held by the trust funds.", "The Social Security trust funds represent funds dedicated to pay current and future Social Security benefits. However, it is useful to view the trust funds in two ways: (1) as an internal federal accounting concept and (2) as the accumulated holdings of the Social Security program.", "By law, Social Security tax revenues must be invested in U.S. government obligations (debt instruments of the U.S. government). The accumulated holdings of U.S. government obligations are often viewed as being similar to assets held by any other trust on behalf of the beneficiaries. However, the holdings of the Social Security trust funds differ from those of private trusts because (1) the types of investments the trust funds may hold are limited and (2) the U.S. government is both the buyer and seller of the investments.", "This report covers how the Social Security program is financed and how the Social Security trust funds work."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Social Security program pays benefits to retired or disabled workers and their family members and to the family members of deceased workers. As of March 2019, there were 63.3 million Social Security beneficiaries. Approximately 70% of those beneficiaries were retired workers and 13% were disabled workers. The remaining beneficiaries were the survivors of deceased insured workers or the spouses and children of retired or disabled workers.", "Social Security is financed primarily by payroll taxes paid by covered workers and their employers. The program is also credited with federal income taxes paid by some beneficiaries on a portion of their benefits, reimbursements from the General Fund of the Treasury for various purposes, and interest income from investments held by the Social Security trust funds. Social Security tax revenues are invested in U.S. government securities (special issues) held by the trust funds, and these securities earn interest. The tax revenues exchanged for the U.S. government securities are deposited into the General Fund of the Treasury and are indistinguishable from revenues in the General Fund that come from other sources. Because the assets held by the trust funds are U.S. government securities, the trust fund balance represents the amount of money owed to the Social Security trust funds by the General Fund of the Treasury. Funds needed to pay Social Security benefits and administrative expenses come from the redemption or sale of U.S. government securities held by the trust funds.", "The Secretary of the Treasury (the Managing Trustee of the Social Security trust funds) is required by law to invest Social Security revenues in securities backed by the U.S. government. The purchase of U.S. government securities allows any surplus Social Security revenues to be used by the federal government for other (non-Social Security) spending needs at the time. This trust fund financing mechanism allows the General Fund of the Treasury to borrow from the Social Security trust funds. In turn, the General Fund pays back the trust funds (with interest) when the trust funds redeem the securities. The process of investing Social Security revenues in securities and redeeming the securities as needed to pay benefits is ongoing.", "The Social Security trust funds are both designated accounts within the U.S. Tr easury and the accumulated holdings of special U.S. government obligations. Both represent the funds designated to pay current and future Social Security benefits."], "subsections": []}, {"section_title": "How the Social Security Program Is Financed", "paragraphs": ["The Social Security program is financed primarily by revenues from Federal Insurance Contributions Act (FICA) taxes and Self-Employment Contributions Act (SECA) taxes. FICA taxes are paid by both employers and employees, but it is employers who remit the taxes to the U.S. Treasury. Employers remit FICA taxes on a regular basis throughout the year (e.g., weekly, monthly, quarterly or annually), depending on the employer's level of total employment taxes (including FICA and federal personal income tax withholding). The FICA tax rate of 7.65% each for employers and employees has two components: 6.2% for Social Security and 1.45% for Medicare Hospital Insurance. The SECA tax rate is 15.3% for self-employed individuals, with 12.4% for Social Security and 2.9% for Medicare Hospital Insurance. The respective Social Security contribution rates are levied on covered wages and net self-employment income up to $132,900 in 2019. Self-employed individuals may deduct one-half of the SECA taxes for federal income tax purposes. SECA taxes are normally paid once a year as part of filing an annual individual income tax return. In 2018, Social Security payroll taxes totaled $885.1 billion and accounted for 88.2% of the program's total income.", "In addition to payroll taxes, the Social Security program receives income from other sources. First, certain Social Security beneficiaries must include a portion of their Social Security benefits in taxable income for the federal income tax, and the Social Security program receives a portion of those taxes. In 2018, revenue from the taxation of benefits totaled $35.0 billion, accounting for 3.5% of the program's total income. Second, the program receives reimbursements from the General Fund of the Treasury for a variety of purposes. General Fund reimbursements totaled $0.2 billion, accounting for less than 0.1% of the program's total income. Finally, the Social Security program receives interest income from the U.S. Treasury on its investments in special U.S. government obligations. Interest income totaled $83.3 billion, accounting for 8.3% of the program's total income.", "The Internal Revenue Service (IRS) processes the tax returns and tax payments for federal employment taxes and federal individual income taxes. All of the tax payments are deposited in the U.S. Treasury along with all other receipts from the public for the federal government."], "subsections": []}, {"section_title": "The Social Security Trust Funds as Designated Accounts", "paragraphs": ["Within the U.S. Treasury, there are numerous accounts established for internal accounting purposes. Although all of the monies within the U.S. Treasury are federal monies, the designation of an account as a trust fund allows the government to track revenues dedicated for specific purposes (as well as expenditures). In addition, the government can affect the level of revenues and expenditures associated with a trust fund through changes in the law.", "Social Security program income and outgo are accounted for in two separate trust funds authorized under Title II of the Social Security Act: (1) the Federal Old-Age and Survivors Insurance (OASI) Trust Fund and (2) the Federal Disability Insurance (DI) Trust Fund. Under current law, the two trust funds are legally distinct and do not have authority to borrow from each other. This is important given projections showing that the asset reserves held by the OASI fund will be depleted in 2034, whereas the asset reserves held by the DI fund will be depleted in 2052. Following the depletion of trust fund reserves (2052 for DI and 2034 for OASI), continuing income is projected to cover 91% of DI scheduled benefits and 77% of OASI scheduled benefits. In the past, Congress has authorized temporary interfund borrowing and payroll tax reallocations between OASI and DI to address funding imbalances. This CRS report discusses the operations of the OASI and DI trust funds on a combined basis, referring to them collectively as the Social Security trust funds . On a combined basis, the trust funds are projected to remain solvent until 2035, at which point continuing income is projected to cover 80% of program costs. (For a discussion of the status of the DI trust fund, see CRS Report R43318, The Social Security Disability Insurance (DI) Trust Fund: Background and Current Status .)"], "subsections": [{"section_title": "Social Security Trust Fund Revenues", "paragraphs": ["The Social Security trust funds receive a credit equal to the Social Security payroll taxes deposited in the U.S. Treasury by the IRS. The payroll taxes are allocated between the OASI and DI trust funds based on a proportion specified by law. A provision included in the Bipartisan Budget Act of 2015 ( P.L. 114-74 ) temporarily directs a larger share of total payroll tax revenues to the DI fund. For 2016 to 2018, the 12.4% payroll tax rate is allocated as follows: 10.03% for the OASI fund and 2.37% for the DI fund. Beginning in 2019, the allocation reverts back to 10.6% for the OASI fund and 1.8% for the DI fund."], "subsections": []}, {"section_title": "Social Security Trust Fund Costs", "paragraphs": ["The U.S. Treasury makes Social Security benefit payments to individuals on a monthly basis, as directed by the Social Security Administration (SSA) as to whom to pay and the amount of the payment. When benefit payments are made by the U.S. Treasury, the Social Security trust funds are debited for the payments. Periodically, the Social Security trust funds are also debited for the administrative costs of the Social Security program. These administrative costs are incurred by several government agencies, including SSA, the U.S. Treasury, and the IRS."], "subsections": []}, {"section_title": "Social Security Trust Fund Operations", "paragraphs": ["The annual revenues to the Social Security trust funds are used to pay current Social Security benefits and administrative expenses. If, in any year, revenues are greater than costs, the surplus Social Security revenues in the U.S. Treasury are available for spending by the federal government on other (non-Social Security) spending needs at the time. If, in any year, costs are greater than revenues, the cash flow deficit is offset by selling some of the accumulated holdings of the trust funds (U.S. government securities) to help pay benefits and administrative expenses.", "There are two measures of Social Security trust fund operations: the annual cash flow operations and the accumulated holdings (or trust fund balance). The annual cash flow operations of the Social Security trust funds are a measure of current revenues and current costs. The cash flow operations are positive when current revenues exceed costs (a cash flow surplus) and negative when current costs exceed revenues (a cash flow deficit). In years with cash flow deficits, the Social Security program (unlike other federal programs that operate without a trust fund) may use the accumulated holdings of the Social Security trust funds from prior years to help pay benefits and administrative expenses.", "Although Social Security is a pay-as-you-go system, meaning that current revenues are used to pay current costs, changes made to the Social Security program in 1983 began a sustained period of annual cash flow surpluses through 2009. Since 2010, however, Social Security has had annual cash flow deficits (program costs have exceeded tax revenues). The 2019 Annual Report of the Social Security Board of Trustees projects that, under their intermediate assumptions, annual cash flow deficits will continue throughout the 75-year projection period (2019-2093).", "At the end of 2018, the Social Security trust funds had accumulated holdings (asset reserves) of more than $2.9 trillion. The 2019 Annual Report projects that the trust funds will have asset reserves (a positive balance) until 2035, meaning that Social Security benefits scheduled under current law can be paid in full and on time until then. This is the same year projected in last year's report.", "In addition, the 2019 Annual Report shows the 75-year actuarial deficit for the Social Security trust funds. The actuarial deficit is the difference between the present discounted value of scheduled benefits and the present discounted value of future taxes plus asset reserves held by the trust funds. It can be viewed as the amount by which the payroll tax rate would have to be increased to support the level of benefits scheduled under current law throughout the 75-year projection period (or, roughly the amount by which the payroll tax rate would have to be increased for the trust funds to remain fully solvent throughout the 75-year period). The 2019 Annual Report projects that the 75-year actuarial deficit for the trust funds is equal to 2.78% of taxable payroll. With respect to the change in the projected 75-year actuarial deficit, the trustees state,", "A 0.05 percentage point increase in the OASDI actuarial deficit would have been expected if nothing had changed other than the one-year shift in the valuation period from 2018 through 2092 to 2019 through 2093. The effects of updated demographic, economic, and programmatic data, and improved methodologies, collectively reduced the actuarial deficit by 0.11 percent of taxable payroll, offsetting most of the effect of changing the valuation period.", "As noted above, on a combined basis, the Social Security trust funds are projected to have asset reserves sufficient to pay full scheduled benefits until 2035 . Considered separately, the OASI Trust Fund is projected to have sufficient asset reserves until 2034 (last year's report also projected 2034 as the depletion year) and the DI Trust Fund is projected to have sufficient asset reserves until 2052 (20 years later than projected in last year's report). The trustees note,", "In last year's report, the projected reserve depletion year was the same for OASI and 20 years earlier (2032) for DI. The change in the reserve depletion for DI is largely due to continuing favorable experience for DI applications and benefit awards. Disability applications have been declining steadily since 2010, and the total number of disabled-worker beneficiaries in current payment status has been falling since 2014. Relative to last year's Trustees Report, disability incidence rates are lower in 2018. They are also assumed to rise more gradually from current levels to reach ultimate levels at the end of 10 years that are slightly lower. Accordingly, the projected Trust Fund depletion date is 20 years later and the 75-year actuarial deficit (0.12 percent of taxable payroll) is 0.09 percentage points lower than was projected last year.", " Table 1 shows the annual cash flow operations of the Social Security trust funds (noninterest income, cost, and cash flow surplus/deficit) for the historical period 1957 to 2018. From 1957 to 1983, the last time Congress enacted major amendments to the program, the Social Security trust funds operated with cash flow deficits (cost exceeded noninterest income) in 20 of the 28 years. Since 1984, the trust funds have operated with cash flow deficits in nine of the past 35 years (2010 to 2018). ", " Table 2 shows projected cash flow operations of the Social Security trust funds (noninterest income, cost, and cash flow deficits) for the 2019 to 2034 period, as projected by the trustees in the 2019 Annual Report (under the intermediate assumptions). ", "One way to measure the cash flow operations of the trust funds is to take the ratio of noninterest income to cost for each year. A ratio greater than 100% indicates positive cash flow (a cash flow surplus); a ratio less than 100% indicates negative cash flow (a cash flow deficit). Figure 1 shows the ratio of current noninterest income to current cost for the Social Security trust funds each year over the historical period 1957 to 2018 and over the 2019 to 2034 period, as projected by the trustees in the 2019 Annual Report (under the intermediate assumptions).", "As shown in the figure, in 2009, noninterest income of $689.2 billion divided by a cost of $685.8 billion results in a ratio just over 100% (100.5%), indicating a cash flow surplus for the Social Security trust funds that year. By comparison, in 2018, noninterest income of $920.1 billion divided by a cost of $1,000.2 billion results in a ratio of 92.0%, indicating a cash flow deficit. ", "In the 2019 Annual Report, the Social Security trustees project that the ratio of current noninterest income to current cost will remain below 100% for the 75-year projection period (2019-2093), with the gap between noninterest income and cost increasing over time (under the intermediate assumptions).", "When the Social Security trust funds operate with annual cash flow deficits, the U.S. Treasury can continue to pay benefits scheduled under current law as long as the accumulated balance in the trust funds is sufficient to cover the costs. This is because the Social Security program has budget authority to pay benefits in full and on time as long as there is an adequate balance in the Social Security trust funds (the designated accounts). When current Social Security revenues are not sufficient to pay benefits, however, the U.S. government must raise the funds necessary to honor the redemption of U.S. government obligations held by the Social Security trust funds as they are needed to pay benefits. If there are no surplus governmental receipts, the U.S. government may raise the necessary funds by increasing taxes or other income, reducing non-Social Security spending, borrowing from the public (i.e., replacing bonds held by the trust funds with bonds held by the public), or a combination of these measures."], "subsections": []}, {"section_title": "Investment of the Social Security Trust Funds", "paragraphs": ["The Secretary of the Treasury is required by law to invest Social Security revenues in securities backed by the U.S. government. In addition, the Social Security trust funds receive interest on its holdings of special U.S. government obligations. Each U.S. government security issued by the U.S. Treasury for purchase by the Social Security trust funds must be a paper instrument in the form of a bond, note, or certificate of indebtedness. Specifically, Section 201(d) of the Social Security Act states,", "Each obligation issued for purchase by the Trust Funds under this subsection shall be evidenced by a paper instrument in the form of a bond, note, or certificate of indebtedness issued by the Secretary of the Treasury setting forth the principal amount, date of maturity, and interest rate of the obligation, and stating on its face that the obligation shall be incontestable in the hands of the Trust Fund to which it is issued, that the obligation is supported by the full faith and credit of the United States, and that the United States is pledged to the payment of the obligation with respect to both principal and interest. The Managing Trustee may purchase other interest-bearing obligations of the United States or obligations guaranteed as to both principal and interest by the United States, on original issue or at the market price, only where he determines that the purchase of such other obligations is in the public interest.", "Any interest or proceeds from the sale of U.S. government securities held by the Social Security trust funds must be paid in the form of paper checks from the General Fund of the Treasury to the Social Security trust funds. The interest rates paid on the securities issued to the Social Security trust funds are tied to market rates.", "For internal federal accounting purposes, when special U.S. government obligations are purchased by the Social Security trust funds, the U.S. Treasury is shifting surplus Social Security revenues from one government account (the Social Security trust funds) to another government account (the General Fund). The special U.S. government obligations are physical documents held by SSA, not the U.S. Treasury. The securities held by the Social Security trust funds are redeemed on a regular basis. These special U.S. government obligations, however, are not resources for the federal government because they represent both an asset and a liability for the government."], "subsections": []}, {"section_title": "Off-Budget Status of the Social Security Trust Funds", "paragraphs": ["For federal budget purposes, on-budget status generally refers to programs that are included in the annual congressional budget process, whereas off-budget status generally refers to programs that are not included in the annual congressional budget process.", "Social Security is a federal government program that, like the Postal Service, has had its receipts and (most) outlays designated by law as off budget. The off-budget designation, however, has no practical effect on program funding, spending, or operations. The annual congressional budget resolution, in its legislative language, separates the off-budget totals (receipts and outlays) from the on-budget totals (receipts and outlays). The report language accompanying the congressional budget resolution usually shows the unified budget totals (which combine the on- and off-budget amounts) as well as the separate on- and off-budget totals. The President's budget tends to use the unified budget measures in discussing the budget totals. The President's budget documents also include the totals for the on- and off-budget components, as required by law. The Congressional Budget Office uses the unified budget numbers in its analyses of the budget; it generally does not include on- and off-budget data in its regular annual reports.", "The unified budget framework is important because it includes all federal receipts and outlays, providing a more comprehensive picture of the size of the federal government and the federal budget's impact on the economy. In the unified budget, the Social Security program is a large source of both federal receipts (35.2% in FY2018) and federal outlays (25.1% in FY2018). For purposes of the unified budget, the annual Social Security cash flow surplus or deficit is counted in determining the overall federal budget surplus or deficit."], "subsections": []}]}, {"section_title": "The Social Security Trust Funds as Accumulated Holdings", "paragraphs": ["The Social Security trust funds can be viewed as trust funds, similar to any private trust funds, that are to be used for paying current and future benefits (and administrative expenses). By law, the Social Security revenues credited to the trust funds (within the U.S. Treasury) are invested in non-marketable U.S. government obligations. These obligations are physical (paper) documents issued to the trust funds and held by SSA. When the obligations are redeemed, the U.S. Treasury must issue a check (a physical document) to the Social Security trust funds for the interest earned on the obligations.", "Unlike a private trust that may hold a variety of assets and obligations of different borrowers, the Social Security trust funds can hold only U.S. government obligations. The sale of these obligations by the U.S. government to the Social Security trust funds is federal government borrowing (from itself) and counts against the federal debt limit. The requirement that the Social Security trust funds purchase U.S. government obligations serves several purposes, such as", "offering a mechanism for the Social Security program to recoup the surplus revenues loaned to the rest of the government; paying interest so that the loan of the surplus revenues does not lose value over time; ensuring that the Social Security trust funds (and not other government accounts) receives credit for the interest earnings; ensuring a level of return (interest) to the Social Security trust funds; and providing a means outside of the securities market for the U.S. government to borrow funds.", "The accumulated holdings of the Social Security trust funds represent the sum of annual surplus Social Security revenues (for all past years) that were invested in U.S. government obligations, plus the interest earned on those obligations. As a result of surplus Social Security revenues from 1984 to 2009 and the interest income credited to the Social Security trust funds, the accumulated holdings of the Social Security trust funds totaled about $2.9 trillion at the end of calendar year 2018. It is the accumulated holdings of the Social Security trust funds (or the trust fund balance) that many people refer to when discussing the Social Security trust funds. Table 3 shows the accumulated holdings of the Social Security trust funds for the historical period 1957 to 2018. Table 4 shows the projected accumulated holdings of the Social Security trust funds for the 2019 to 2034 period, as projected by the Social Security trustees in the 2019 Annual Report (under the intermediate assumptions). The Social Security trustees project that in 2020 the program's total cost will exceed its total income. Under intermediate assumptions, this relationship is projected to continue until the trust funds are depleted in 2034.", "The Social Security trustees project that, on average over the next 75 years (2019 to 2093), program costs will exceed income by an amount equal to 2.78% of taxable payroll (on average, costs are projected to exceed income by at least 20%). The gap between income and costs, however, is projected to increase over the 75-year period. For example, in 2035, the cost of the program is projected to exceed income by an amount equal to 3.15% of taxable payroll (costs are projected to exceed income by about 19%). By 2093, the cost of the program is projected to exceed income by an amount equal to 4.11% of taxable payroll (costs are projected to exceed income by about 24%).", "For illustration purposes, the trustees project that the Social Security trust funds would remain solvent throughout the 75-year projection period if, for example,", "revenues were increased by an amount equivalent to an immediate and permanent payroll tax rate increase of 2.70 percentage points (from 12.40% to 15.10%; a relative increase of 21.8%); or benefits scheduled under current law were reduced by an amount equivalent to an immediate and permanent reduction of (1) about 17% if applied to all current and future beneficiaries, or (2) about 20% if applied only to those who become eligible for benefits in 2019 or later; or some combination of these approaches were adopted."], "subsections": [{"section_title": "The Social Security Trust Funds and the Level of Federal Debt", "paragraphs": ["As part of the annual congressional budget process, the level of federal debt (the federal debt limit) is established for the budget by Congress. The federal debt limit includes debt held by the public, as well as the internal debt of the U.S. government (i.e., debt held by government accounts). Borrowing from the public and the investment of the Social Security trust funds in special U.S. government obligations both fall under the restrictions of the federal debt limit. This means that the balance of the Social Security trust funds has implications for the federal debt limit."], "subsections": []}, {"section_title": "The Social Security Trust Funds and Benefit Payments", "paragraphs": ["The accumulated holdings of the Social Security trust funds represent funds designated to pay current and future benefits. When current Social Security tax revenues fall below the level needed to pay benefits, however, these funds become available only as the federal government raises the resources needed to redeem the securities held by the trust funds. The securities are a promise by the federal government to raise the necessary funds. In past years, when Social Security was operating with annual cash flow surpluses, Social Security's surplus revenues were invested in U.S. government securities and used at the time to pay for other federal government activities. Social Security's past surplus revenues, therefore, are not available to finance benefits directly when Social Security is operating with annual cash flow deficits, as it does today. The securities held by the trust funds must be redeemed for Social Security benefits to be paid.", "Stated another way, when Social Security is operating with a cash flow deficit, the program relies in part on the accumulated holdings of the trust funds to pay benefits and administrative expenses. Because the trust funds hold U.S. government securities that are redeemed with general revenues, there is increased reliance on the General Fund of the Treasury. With respect to reliance on the General Fund when Social Security is operating with a cash flow deficit, it is important to note that Social Security does not have authority to borrow from the General Fund. Social Security cannot draw upon general revenues to make up for any current funding shortfall. Rather, Social Security relies on revenues that were collected for the program in previous years and used by the federal government at the time for other (non-Social Security) spending needs, plus the interest earned on its trust fund investments. Social Security draws on its own previously collected tax revenues and interest income (accumulated trust fund holdings) when current Social Security tax revenues fall below current program expenditures.", "As the trustees point out, over the program's history, Social Security has collected approximately $21.9 trillion and paid out $19.0 trillion, leaving asset reserves of $2.9 trillion at the end of 2018. The accumulated trust fund holdings of $2.9 trillion represent the amount of money that the General Fund of the Treasury owes to the Social Security trust funds. The General Fund could be said to have fully paid back the Social Security trust funds if the trust fund balance were to reach zero (i.e., if all of the trust funds' asset reserves were depleted).", "The trustees project that the asset reserves held by the Social Security trust funds will be depleted in 2035. At that point, the program will continue to operate with incoming receipts to the trust funds. Incoming receipts are projected to be sufficient to pay about 80% of scheduled benefits through the end of the projection period in 2093 (under the intermediate assumptions of the 2019 Annual Report). Title II of the Social Security Act, which governs the program, does not specify what would happen to the payment of benefits in the event that the trust funds' asset reserves are depleted and incoming receipts to the trust funds are not sufficient to pay scheduled benefits in full and on time. Two possible scenarios are (1) the payment of full monthly benefits on a delayed basis or (2) the payment of partial monthly benefits on time."], "subsections": [{"section_title": "Appendix. Projected Trust Fund Dates, 1983-2019", "paragraphs": ["The following table shows the key dates projected for the Social Security trust funds by the Social Security Board of Trustees (based on their intermediate set of assumptions) in each of their annual reports from 1983 to 2019."], "subsections": []}]}]}]}}
{"id": "R43546", "title": "Navy John Lewis (TAO-205) Class Oiler Shipbuilding Program: Background and Issues for Congress", "released_date": "2019-05-17T00:00:00", "summary": ["The Navy began procuring John Lewis (TAO-205) class oilers in FY2016, and a total of four have been procured through FY2019, including two in FY2019. The first six ships are being procured under a block buy contract that was authorized by Section 127 of the FY2016 National Defense Authorization Act (S. 1356/P.L. 114-92 of November 25, 2015). The Navy wants to procure a total of 20 TAO-205s.", "The Navy's proposed FY2020 budget requests the procurement of the fifth and sixth ships in the program. The Navy estimates the combined procurement cost of the two ships at $1,056.3 million, or an average of $528.1 million each. The two ships have received $75.0 million in prior-year advance procurement (AP) funding, and the Navy's proposed FY2020 budget requests the remaining $981.2 million in procurement funding needed to complete the two ships' estimated combined procurement cost. The Navy's proposed FY2020 budget also requests $73.0 million in AP funding for TAO-205s to be procured in future fiscal years, and $3.7 million in cost-to-complete procurement funding to cover cost growth on TAO-205s procured in prior fiscal years, bringing the total FY2020 procurement funding request for the TAO-205 program (aside from outfitting and post-delivery costs) to $1,057.9 million.", "Issues for Congress include the following:", "whether to approve, reject, or modify the Navy's FY2020 procurement funding request for the TAO-205 program; the number of oilers the Navy will require in coming years to support its operations; and whether to encourage or direct the Navy to build TAO-205s with more ship self-defense equipment than currently planned by the Navy."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides background information and issues for Congress on the John Lewis (TAO-205) class oiler shipbuilding program, a program to build a new class of 20 fleet oilers for the Navy. The Navy's proposed FY2020 budget requests the procurement of the fifth and sixth ships in the program.", "Issues for Congress regarding the TAO-205 program include the following: whether to approve, reject, or modify the Navy's FY2020 procurement funding request for the program; the number of oilers the Navy will require in coming years to support its operations; and whether to encourage or direct the Navy to build TAO-205s with more ship self-defense equipment than currently planned by the Navy. Decisions that Congress makes regarding the program could affect Navy capabilities and funding requirements and the U.S. shipbuilding industrial base.", "For an overview of the strategic and budgetary context in which the TAO-205 program and other Navy shipbuilding programs may be considered, see CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress , by Ronald O'Rourke."], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "Navy Fleet Oilers", "paragraphs": [], "subsections": [{"section_title": "Role of Fleet Oilers", "paragraphs": ["The primary role of Navy fleet oilers is to transfer fuel to Navy surface ships that are operating at sea, so as to extend the operating endurance of these surface ships and their embarked aircraft. Fleet oilers also provide other surface ships with lubricants, fresh water, and small amounts of dry cargo. Fleet oilers transfer fuel and other supplies to other surface ships in operations called underway replenishments (UNREPs). During an UNREP, an oiler steams next to the receiving ship and transfers fuel by hose (see Figure 1 , Figure 2 , and Figure 3 ).", "Oilers are one kind of Navy UNREP ship; other Navy UNREP ships include ammunition ships, dry cargo ships, and multiproduct replenishment ships. The Navy's UNREP ships are known more formally as the Navy's combat logistics force (CLF). Most of the Navy's CLF ships are operated by the Military Sealift Command (MSC).", "Navy oilers carry the designation TAO (sometimes written as T-AO). The T means that the ships are operated by MSC with a mostly civilian crew; the A means it is an auxiliary ship of some kind; and the O means that it is, specifically, an oiler.", "Although the role of fleet oilers might not be considered as glamorous as that of other Navy ships, fleet oilers are critical to the Navy's ability to operate in forward-deployed areas around the world on a sustained basis. The U.S. Navy's ability to perform UNREP operations in a safe and efficient manner on a routine basis is a skill that many other navies lack. An absence of fleet oilers would significantly complicate the Navy's ability to operate at sea on a sustained basis in areas such as the Western Pacific or the Indian Ocean/Persian Gulf region. The Navy states that", "the ability to rearm, refuel and re-provision our ships at sea, independent of any restrictions placed on it by a foreign country, is critical to the Navy's ability to project warfighting power from the sea.", "As the lifeline of resupply to Navy operating forces underway, the ships of the Navy's Combat Logistic Force (CLF) enable Carrier Strike Groups and Amphibious Ready Groups to operate forward and remain on station during peacetime and war, with minimal reliance on host nation support."], "subsections": []}, {"section_title": "Existing Henry J. Kaiser (TAO-187) Class Oilers", "paragraphs": ["The Navy's existing force of fleet oilers consists of 15 Henry J. Kaiser (TAO-187) class ships ( Figure 4 ). These ships were procured between FY1982 and FY1989 and entered service between 1986 and 1996. They have an expected service life of 35 years; the first ship in the class will reach that age in 2021. The ships are about 677 feet long and have a full load displacement of about 41,000 tons, including about 26,500 tons of fuel and other cargo. The ships were built by Avondale Shipyards of New Orleans, LA, a shipyard that eventually became part of the shipbuilding firm Huntington Ingalls Industries (HII). HII subsequently wound down Navy shipbuilding operations at Avondale, and the facility no longer builds ships. (HII continues to operate two other shipyards that build Navy ships.)"], "subsections": []}]}, {"section_title": "TAO-205 Program", "paragraphs": [], "subsections": [{"section_title": "Program Name", "paragraphs": ["The TAO-205 class program was originally called the TAO(X) program, with the (X) meaning that the exact design of the ship had not yet been determined. On January 6, 2015, then-Secretary of the Navy Ray Mabus announced that ships in the class will be named for \"people who fought for civil rights and human rights,\" and that the first ship in the class, TAO-205, which was procured in FY2016, will be named for Representative John Lewis. The class consequently is now known as the John Lewis (TAO-205) class."], "subsections": []}, {"section_title": "Quantity", "paragraphs": ["As part of its goal for achieving a fleet of 355 ships, the Navy wants to procure a total of 20 TAO-205 class ships. The required number of oilers largely depends on the numbers and types of other surface ships (and their embarked aircraft) to be refueled, and the projected operational patterns for these ships and aircraft."], "subsections": []}, {"section_title": "Schedule", "paragraphs": ["The first TAO-205 class ship was procured in FY2016, the second in FY2018, and the third and fourth in FY2019. The Navy's FY2020 five-year (FY2020-FY2023) shipbuilding plan calls for procuring the next seven ships in the class in annual quantities of 2-1-1-2-1. The Navy's FY2020 30-year (FY2020-FY2049) shipbuilding plan calls for procuring the remaining nine ships in the program at a rate of one per year starting in FY2025. The first TAO-205 is scheduled for delivery in November 2020."], "subsections": []}, {"section_title": "Funding", "paragraphs": [" Table 1 shows procurement funding for the TAO-205 program in the Navy's FY2020 budget submission. The Navy's FY2020 budget submission estimates the total procurement cost of the 20 planned TAO-205s at $12,196.1 million (i.e., about 12.2 billion) in then-year dollars, or an average of $609.8 million each. Since the figure of $12,196.1 million is in then-year dollars, it incorporates estimated annual inflation rates for TAO-205s to be procured out to FY2033."], "subsections": []}, {"section_title": "Ship Design and Capabilities", "paragraphs": ["The TAO-205 class design ( Figure 5 ) will have capabilities similar to those of the Kaiser-class ships, and will rely on existing technologies rather than new technologies. To guard against oil spills, TAO-205s are to be double-hulled, like modern commercial oil tankers, with a space between the two hulls to protect the inner hull against events that puncture the outer hull. (The final Kaiser-class ships are double-hulled, but earlier ships in the class are single-hulled.)"], "subsections": []}, {"section_title": "Builder", "paragraphs": ["TAO-205s are being built by General Dynamics/National Steel and Shipbuilding Company (GD/NASSCO) of San Diego, CA, a shipyard that builds Navy auxiliaries and DOD sealift ships."], "subsections": [{"section_title": "Combined Solicitation Limited to Two Builders8", "paragraphs": ["On June 25, 2015, the Navy, as part of its acquisition strategy for TAO-205 program, issued a combined solicitation consisting of separate Requests for Proposals (RFPs) for", "the detailed design and construction (DD&C) of the first six TAO-205s; the DD&C in FY2017 (and also procurement of long lead-time materials in FY2016) for an amphibious assault ship called LHA-8 that the Navy procured in FY2017; and contract design support for the LPD-17 Flight II program (previously called the LX[R] program), a program to procure a new class of 13 amphibious ships.", "The Navy limited bidding in this combined solicitation to two bidders\u2014Ingalls Shipbuilding of Huntington Ingalls Industries (HII/Ingalls) and GD/NASSCO\u2014on the grounds that these are the only two shipbuilders that have the capability to build both TAO-205s and LHA-8.", "Under the Navy's plan for the combined solicitation, one of these two yards was to be awarded the DD&C contract for the first six TAO-205s, the other yard was to be awarded the DD&C contract (and procurement of long lead-time materials) for LHA-8, and the shipyard with the lowest combined evaluated price was to receive a higher profit on its DD&C contract and was to be awarded the majority of the LPD-17 Flight II contract design engineering man-hours."], "subsections": []}, {"section_title": "Block Buy Contract Awarded to GD/NASSCO", "paragraphs": ["On June 30, 2016, the Navy announced its awards in the above-described combined solicitation, awarding a fixed price incentive block buy contract for the DD&C of the first six TAO-205s to GD/NASSCO. (The Navy awarded the contract for the DD&C of LHA-8 to HII/Ingalls. HII/Ingalls was also awarded the majority of the LPD-17 Flight II contract design engineering man-hours.) The Navy was granted authority for using a block buy contract to procure the first six TAO-205s by Section 127 of the FY2016 National Defense Authorization Act ( S. 1356 / P.L. 114-92 of November 25, 2015).", "It was earlier estimated that the block buy contract would reduce the procurement cost of the second through sixth TAO-205s by an average of about $45 million each, compared to costs under the standard or default DOD approach of annual contracting. The Navy states that about $35 million of the $45 million in per-ship savings will come from using advance procurement (AP) funding for batch-ordering TAO-205 components. The Navy states that this use of AP funding could have occurred under annual contracting, and that the savings that are intrinsic to the block buy contract are thus about $10 million per ship."], "subsections": []}]}, {"section_title": "U.S. Content Requirement for Certain Components", "paragraphs": ["Section 8117 of the FY2019 Appropriations Act (Division A of H.R. 6157 / P.L. 115-245 of September 28, 2018) states the following:", "Sec. 8117. None of the funds provided in this Act for the TAO Fleet Oiler program shall be used to award a new contract that provides for the acquisition of the following components unless those components are manufactured in the United States: Auxiliary equipment (including pumps) for shipboard services; propulsion equipment (including engines, reduction gears, and propellers); shipboard cranes; and spreaders for shipboard cranes."], "subsections": []}, {"section_title": "May 2019 GAO Report", "paragraphs": ["The Appendix presents the Government Accountability Office's (GAO's) assessment of the TAO-205 class program from GAO's annual report surveying DOD major acquisition programs."], "subsections": []}, {"section_title": "FY2020 Procurement Funding Request", "paragraphs": ["The Navy's proposed FY2020 budget requests the procurement of the 5th and 6th ships in the program. The Navy estimates the combined procurement cost of the two ships at $1,056.3 million, or an average of $528.1 million each. The two ships have received $75.0 million in prior-year advance procurement (AP) funding, and the Navy's proposed FY2020 budget requests the remaining $981.2 million in procurement funding needed to complete the two ships' estimated combined procurement cost. The Navy's proposed FY2020 budget also requests $73.0 million in AP funding for TAO-205s to be procured in future fiscal years, and $3.7 million in cost-to-complete procurement funding to cover cost growth on TAO-205s procured in prior fiscal years, bringing the total FY2020 procurement funding request for the TAO-205 program (aside from outfitting and post-delivery costs) to $1,057.9 million."], "subsections": []}]}]}, {"section_title": "Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "FY2020 Procurement Funding", "paragraphs": ["One issue for Congress is whether to approve, reject, or modify the Navy's FY2020 procurement funding request for the TAO-205 program. In assessing this issue, Congress may consider, among other things, whether the Navy has accurately priced the work that it is requesting to fund in FY2020."], "subsections": []}, {"section_title": "Required Number of Oilers", "paragraphs": ["Another issue for Congress concerns the number of oilers the Navy will require in coming years to support its operations. The Navy is implementing a new operational concept, called Distributed Maritime Operations (DMO), that could lead to the development of a fleet with larger numbers of individually smaller ships, and to more-widely dispersed Navy operations. DMO could affect requirements for Navy logistics, including oilers. The Navy states that", "Recapitalizing the auxiliary and sealift fleet in support of DMO has become a top priority. The initial reviews of the requirements to support this operational maritime concept indicate potential growth across the five lines of effort: refuel, rearm, resupply, repair, and revive. Coincident is the review of the level of effort needed to distribute logistics into a contested maritime environment following safe transfer by the logistics fleet\u2014smaller, faster, multi-mission transports likely resident within the future battle force. The work to fully flesh out the requirement is ongoing, but the aggregate is expected to be no less than the current requirement, reinforcing the urgency to recapitalize the current fleet.", "An August 2017 GAO report states the following:", "The readiness of the surge sealift and combat logistics fleets has trended downward since 2012. For example, GAO found that mission-limiting equipment casualties\u2014incidents of degraded or out-of-service equipment\u2014have increased over the past 5 years, and maintenance periods are running longer than planned, indicating declining materiel readiness across both fleets....", "The Navy has not assessed the effects of widely distributed operations, which could affect the required number and type of combat logistics ships. The Navy released its new operational concept of more widely distributed operations\u2014ships traveling farther distances and operating more days to support a more distributed fleet\u2014in 2017. The Navy has not assessed the effects that implementing this concept will have on the required number and type of combat logistics ships. These effects could be exacerbated in the event that the Navy is less able to rely on in-port refueling\u2014which has comprised about 30 percent of all refuelings over the past 3 years\u2014placing greater demand on the combat logistics fleet. Given the fleet's dependence on the combat logistics force, waiting until 2019 or 2020 to conduct an assessment, as planned, could result in poor investment decisions as the Navy continues to build and modernize its fleet. Furthermore, without assessing the effects of widely distributed operations on logistics force requirements and modifying its force structure plans accordingly, the Navy risks being unprepared to provide required fuel and other supplies."], "subsections": []}, {"section_title": "TAO-205 Ship Self-Defense Equipment", "paragraphs": ["Another issue for Congress is whether to encourage or direct the Navy to build TAO-205s with more ship self-defense equipment than currently planned by the Navy. The issue relates to how changes in the international security environment might affect how the Navy operates and equips its underway replenishment ships.", "During the Cold War, the Navy procured underway replenishment ships to support a two-stage approach to underway replenishment in which single-product \"shuttle\" ships (such as oilers, ammunition ships, and dry stores ships) would take their supplies from secure ports to relatively safe midocean areas, where they would then transfer them to multiproduct \"station\" ships called TAOEs and AORs. The TAOEs and AORs would then travel to Navy carrier strike groups operating in higher-threat areas and transfer their combined supplies to the carrier strike group ships. As a result, single-product shuttle ships were equipped with lesser amounts of ship self-defense equipment, and TAOEs and AORs were equipped with greater amounts of such equipment.", "When the Cold War ended and transitioned to the post-Cold War era, threats to U.S. Navy ships operating at sea were substantially reduced. As a consequence, the amount of ship self-defense equipment on the TAOEs and AORs was reduced, and a single-stage approach to underway replenishment, in which oilers and dry stores ships took supplies from secure ports all the way to carrier strike group ships, was sometimes used.", "Now that the post-Cold War era has transitioned to a new strategic environment featuring renewed great power competition with countries like China and Russia, and a consequent renewal of potential threats to U.S. Navy ships operating at sea, the question is whether TAO-205s should be equipped with lesser amounts of ship self-defense equipment, like oilers were during both the Cold War and post-Cold War eras, or with greater amounts of ship self-defense equipment, like TAOEs and AORs were during the Cold War. Building TAO-205s with more ship self-defense equipment than currently planned by the Navy could increase TAO-205 procurement costs by tens of millions of dollars per ship, depending on the amount of additional ship self-defense equipment.", "Section 1026 of the FY2016 National Defense Authorization Act ( S. 1356 / P.L. 114-92 of November 25, 2015) required an independent assessment of the Navy's combat logistics force ships. The report was delivered to Congress in February 2016. A copy of the report was posted by the media outlet Politico on March 11, 2016. The report states the following:", "The T-AO(X) will only have a limited capability to defeat a submarine launched torpedo attack and no capability to defeat a missile attack. When delivered, the TAO(X) will have:", "\u2014[the] NIXIE Torpedo Countermeasure System [for decoying certain types of torpedoes]", "\u2014[the] Advanced Degaussing System (Anti-Mine) [for reducing the ship's magnetic signature, so as to reduce the likelihood of attack by magnetically fused mines]", "When required, the T-AO(X) will also have ability to embark Navy Expeditionary Combat Command Expeditionary Security Teams (EST). The ESTs will embark with several crew served weapons and are designed to provide limited self-defense against a small boat attack.", "The T-AO(X) will have Space, Weight, Power and Cooling (SWAP-C) margins for future installations of the following systems:", "\u2014[the] Close In Weapon System (CIWS) or SeaRAM (Rolling Airframe Missile) [for defense against missile attack]", "\u2014[the] Anti-Torpedo Torpedo Defense System (ATTDS) [for destroying torpedoes]", "Even after the installation of a CIWS or ATTDS, if the T-AO(X) was to operate in anything other than a benign environment, the ship will require both air and surface escorts.", "The decision to rely on [other] Fleet assets to provide force protection [i.e., defense against attacks] for the T-AO(X) was validated by the JROC [in June 2015]."], "subsections": []}]}, {"section_title": "Legislative Activity for FY2020", "paragraphs": [], "subsections": [{"section_title": "Summary of Congressional Action on FY2020 Funding", "paragraphs": [" Table 2 summarizes congressional action on the Navy's request for FY2020 procurement funding for the TAO-205 program."], "subsections": [{"section_title": "Appendix. May 2019 GAO Report", "paragraphs": ["A May 2019 GAO report\u2014the 2019 edition of GAO's annual report surveying DOD major acquisition programs\u2014stated the following regarding the TAO-205 program:", "Technology Maturity and Design Stability", "The Navy has matured all Lewis class critical technologies and stabilized the ships' design. In 2014, the Navy identified three critical technologies for the Lewis class, all of which involved a new system for transferring cargo at sea. Prior to initiating detail design activities in June 2016, the Navy completed prototype tests of the critical technologies and found that they were fully mature\u2014an approach consistent with shipbuilding best practices. In 2017, the Navy removed one critical technology\u2014the Heavy e-STREAM cargo delivery system\u2014from the Lewis class design. The Navy had intended to use this system to deliver F-35 Lightning II power modules. The Navy subsequently decided to deliver these by air, which precluded any need for the Heavy system.", "Lead ship construction began in September 2018 with 95 percent of the ship's total design effort complete. Program officials stated that this figure meant that 100 percent of the ship's basic and functional design were by then complete\u2014an approach consistent with best practices. Throughout detail design and now into construction, the Navy has not changed the Lewis class program's performance requirements. The Navy also leveraged commercial vessel designs to minimize design and construction risks. The Lewis class features a modern double-hull construction, an environmental-based design standard for commercial tankers, to ensure the ships can dock at ports-of-call. This design was included in the final three Kaiser class oilers.", "Production Readiness", "The program office has largely kept to its construction schedule to date for the first ship, but a flooding incident at a NASSCO graving dock in July 2018 has affected the delivery of future ships. The program office stated that this incident has not affected current ship fabrication activities. However, the dock's unavailability while repairs are planned and implemented has disrupted the contractor's schedule for future ships. According to the program office, the incident has resulted in some delays to certain delivery dates for ships two through six.", "Other Program Issues", "As part of the Navy's plan to expand the fleet, the Navy concluded that it would need an additional three Lewis class ships. The Navy's budget request for fiscal year 2019 increased its planned one-ship-per-year buy to two for fiscal years 2019, 2021, and 2023. The Congress provided appropriations for the additional fiscal year 2019 ship in support of the Navy's request. To account for the additional ships in fiscal years 2019 and 2021, the Navy plans to add two more ships to the low-rate initial production phase. Subsequently, program officials stated that they plan to compete a new contract for the remaining 12 ships using the construction knowledge gained from efforts under the existing contract.", "Program Office Comments", "We provided a draft of this assessment to the program office for review and comment. The program office provided technical comments, which we incorporated where appropriate. The program office stated that it continues to follow GAO shipbuilding best practices and has leveraged commercial vessel design practices to minimize risk. The program office also stated that it is currently revising its acquisition baseline to reflect the update in total quantities to 20 ships. In addition, the program office noted that, in fiscal year 2019, it fully funded the third and fourth ships and funded advance procurement for the fifth ship."], "subsections": []}]}]}]}}
{"id": "R45666", "title": "Drug Pricing and Intellectual Property Law: A Legal Overview for the 116th Congress", "released_date": "2019-04-04T00:00:00", "summary": ["Intellectual property (IP) rights play an important role in the development and pricing of pharmaceutical products such as prescription drugs and biologics. In order to encourage innovation, IP law grants the rights holder a temporary monopoly on a particular invention or product, potentially enabling him to charge higher-than-competitive prices. IP rights, if sufficiently limited, are typically justified as necessary to allow pharmaceutical manufacturers the ability to recoup substantial costs in research and development, including clinical trials and other tests necessary to obtain regulatory approval from the Food and Drug Administration (FDA). However, because they may operate to deter or delay competition from generic drug and biosimilar manufacturers, IP rights have been criticized as contributing to high prices for pharmaceutical products in the United States.", "Two main types of IP may protect pharmaceutical products: patents and regulatory exclusivities. Patents, which are available to a wide range of technologies besides pharmaceuticals, are granted by the U.S. Patent and Trademark Office (PTO) to new and useful inventions. Pharmaceutical patents may claim chemical compounds in the pharmaceutical product, a method of using the product, a method of making the product, or a variety of other patentable inventions relating to a drug or biologic. The holder of a valid patent generally has the exclusive right to make, use, sell, and import the invention for a term lasting approximately 20 years. If a court concludes that a competitor's generic or biosimilar version infringes a valid patent, the court may issue an injunction precluding the competitor from making, using, selling, and importing that competing product until the patent expires.", "In some circumstances, FDA grants regulatory exclusivities to a pharmaceutical manufacturer upon the completion of the process required to market pharmaceutical products. Before a new drug or biologic can be sold in the United States, companies must apply for regulatory approval or licensure from FDA, which determines if the pharmaceutical is safe and effective. For certain pharmaceuticals, such as innovative products or those that serve particular needs, FDA provides a term of marketing exclusivity upon the successful completion of the regulatory process. If a product is covered by an unexpired regulatory exclusivity, FDA generally may not accept and/or approve an application seeking FDA approval of a follow-on product (i.e., a generic drug or biosimilar). Regulatory exclusivities vary in length from as little as six months to as much as 12 years depending on the specific type of drug or biologic at issue and other factors.", "Like regulatory exclusivities, patent rights can affect when generic and biosimilar manufacturers can market their follow-on products. Pharmaceutical patent disputes are subject to certain specialized procedures under the Hatch-Waxman Act and the Biologics Price Competition and Innovation Act (BPCIA). Under Hatch-Waxman, applicants seeking approval of a generic version of an existing FDA-approved drug must make a certification with respect to each patent that the brand-name drug manufacturer lists as covering the product. If the generic manufacturer challenges those patents, FDA generally cannot approve the generic drug application for 30 months while the patent dispute is litigated. For biologics, applicants seeking approval of a biosimilar version of an existing biological product may choose to engage in the BPCIA's \"patent dance,\" a complex scheme of private information exchanges made in preparation for formal patent disputes between brand-name biologic and biosimilar manufacturers. The patent dance does not affect FDA's ability to approve a biosimilar application.", "Some pharmaceutical companies have been criticized for charging high prices and engaging in practices that are perceived by some to exploit the existing legal system governing IP rights on pharmaceutical products. For example, some generic manufacturers have claimed that brand-name drug manufacturers have unreasonably refused to sell them samples of brand-name drugs in order to impede their ability to obtain FDA approval and delay market entry of generic competition. Other commentators have criticized the practice of \"pay-for-delay\" settlements, through which brand-name drug companies settle patent litigation with generic or biosimilar manufacturers by paying them to delay their entry into the market. Still others criticize so-called patent \"evergreening,\" in which pharmaceutical companies are alleged to serially patent minor improvements or ancillary features of their products in order to extend the effective term of patent protection.", "In recent years, a number of congressional proposals have been introduced that seek to address these and other issues in IP law that are perceived by some to contribute to high prices for pharmaceutical products. These proposed reforms range from relatively modest changes, such as increasing patent transparency, to more sweeping reforms such as pricing controls and government compulsory licensing provisions."], "reports": {"section_title": "", "paragraphs": ["T he prices paid by consumers for prescription drugs have been a recent area of significant congressional interest. Several committees in the House and Senate have held hearings this year on drug pricing issues, and a number of bills have been introduced in the 116 th Congress that seek to address the perceived high costs of prescription drugs and other pharmaceutical products. Because intellectual property (IP) rights, including patent rights and regulatory exclusivities, play an important role in the development and pricing of pharmaceutical products, a key focus of this debate is whether existing IP law promptly balances the need for innovation with the costs that IP may impose on the public. Understanding the interplay between several complex legal regimes is necessary in order to fully make sense of this debate.", "IP law comprises a set of exclusive rights that prevent others from making, copying, or using certain intangible creations of the human mind. Federal law contains several different varieties of IP, depending on the type of intellectual creation at issue. For example, copyright law generally grants authors of original creative works (such as literary works or musical compositions) the exclusive right to reproduce their work, publicly perform and display it, distribute it, and adapt it, for a specified term of years. Other species of federal IP include patent law, which protects novel inventions, and trademark law, which protects symbols used to identify goods and services. Each form of IP covers a different type of creation, has a different procedure for obtaining rights, and grants the IP owner legal rights that vary in scope and duration.", "Although each of these forms of IP is legally distinct, they broadly share a common motivation: providing incentives to create. Patents and copyrights are typically justified by a utilitarian rationale that exclusive rights are necessary to provide incentives to produce new creative works and technological inventions. This rationale maintains that absent legal protections, competitors could freely copy such creations, denying the original creators the ability to recoup their investments in time and effort, and thereby reduce the incentive to create in the first place. IP incentives are said to be particularly necessary for products, such as pharmaceuticals, that are costly to develop but easily copied once marketed. In the words of the Supreme Court, IP rights are premised on an \"economic philosophy\" that the \"encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors.\" From this perspective, the fundamental aim of IP law is to find the optimal balance between providing incentives for innovation and the costs that IP rights impose on the public. ", "By design, IP rights may lead to increased prices for goods or services that are protected by IP. IP rights are often said to grant a temporary and limited \"monopoly\" to the rights holder. The existence of a patent on a particular manufacturing process, for example, generally means that only the patent holder (and persons licensed by the patent holder) can use that patented process for a set period of time. In some circumstances, this legal exclusivity may allow the patent holder (or her licensees) to charge higher-than-competitive prices for goods made with the patented process, as a monopolist would, because the patent effectively shields the patent holder from competition.", "New pharmaceutical products generally benefit from two main forms of IP protection: patent rights and regulatory exclusivities. These two sets of exclusive rights are distinct, yet often confused. Patents, which are available to a wide variety of technologies beyond pharmaceuticals, are granted by the U.S. Patent and Trademark Office (PTO) to inventions that are new, useful, nonobvious, and\u00a0directed at patentable subject matter. The holder of a valid patent generally has the exclusive right to make, use, sell, or import a patented invention within the United States for a period beginning when the patent is issued by the PTO and ending 20 years after the date of the patent application. ", "The Food and Drug Administration (FDA) grants regulatory exclusivities upon the completion of the FDA regulatory process necessary to market pharmaceutical products (i.e., drugs and biological products). Exclusivities are granted only to certain pharmaceutical products such as innovative products (e.g., a new active ingredient or new indication for an existing drug) or those that serve a specific need (e.g., treating rare diseases). Regulatory exclusivities prevent FDA from accepting or approving an application by a competitor for FDA approval of a follow-on product (i.e., a generic or biosimilar version) of a previously approved pharmaceutical for a set time period, and/or preclude a competitor from relying on safety and efficacy data submitted by the original manufacturer for a period of time. Depending on the type of pharmaceutical product at issue and other factors, regulatory exclusivities may last anywhere from six months to 12 years. In overlapping ways, both patent rights and regulatory exclusivities can operate to deter or delay the market entry of a generic drug or biosimilar.", "The Department of Health and Human Services (HHS) has found that national spending on pharmaceutical products has been rising in recent years, predicting that these expenditures would continue to rise faster than overall health spending. Many factors other than IP rights contribute to the price consumers pay for prescription drugs and biologics, including demand, manufacturing costs, R&D costs, the terms of private health insurance, and the involvement of a government insurance program such as Medicaid. That said, pharmaceutical products are frequently protected by IP rights, and some studies have shown that IP rights are among the most important factors driving high drug prices. For example, FDA has found that increased competition from generic drug manufacturers is associated with lower prices for pharmaceuticals. Given that IP rights may allow the rights holder to charge higher-than-competitive prices, and can deter or delay the market entry of generic drug or biosimilar competitors, changes to IP rights or otherwise facilitating competition is seen by some to offer a potential means of lowering prices for pharmaceutical products. Accordingly, several current proposed congressional reforms to lower drug prices would reform the existing legal structure of IP rights in the pharmaceutical context.", "This report explains how several of these congressional proposals to reduce drug prices would interact with and/or alter existing IP law for pharmaceutical products. First, the report reviews the basics of patent law, FDA law and regulatory exclusivities, and the interaction between patent rights and FDA approval of pharmaceutical products. With this legal background in hand, the report overviews the details of a number of current legislative proposals to change these laws in order to reduce the drug prices paid by consumers."], "subsections": [{"section_title": "Legal Background", "paragraphs": ["Several different legal and regulatory regimes create or affect IP rights in pharmaceutical products. As noted above, pharmaceuticals are subject to two principal forms of IP protection\u2014patents and regulatory exclusivities\u2014which are generally distinct, but at times overlap and interact. Complicating matters further is the fact that FDA regulates pharmaceutical products differently depending on whether they derive from natural sources. In particular, before they can be marketed or sold, nonbiological \"drugs\" must be approved by FDA under the Federal Food, Drug, and Cosmetic Act (FD&C Act), whereas \"biologics\" must be licensed by FDA under the Public Health Service Act (PHSA). Finally, patents on pharmaceutical drugs or biologics are subject to specialized patent dispute resolution procedures that can affect a manufacturer's ability to bring a follow-on product (i.e., a generic drug or biosimilar) to market. Specifically, provisions of the Drug Price Competition and Patent Term Restoration Act of 1984 (the Hatch-Waxman Act) govern FDA approval and patent disputes for generic drugs, whereas the Biologics Price Competition and Innovation Act of 2009 (BPCIA) governs FDA licensure and patent disputes for biosimilars.", "In light of these complexities, a fair amount of background is necessary to understand how IP rights are obtained in pharmaceuticals, how these rights may impact drug prices, and the various reforms that have been proposed in Congress to reduce drug prices for consumers. This section provides this background, proceeding in three parts. First, it reviews patent law, including the requirements for obtaining a patent, the rights granted to patent holders, and various limitations on those rights. Second, it overviews FDA requirements for obtaining approval to market a drug or biological product, the abbreviated pathways for generic drug approval under the Hatch-Waxman Act and biosimilar licensure under the BPCIA, and different regulatory exclusivities that FDA grants to certain types of approved pharmaceutical products. Finally, this section describes and compares the different specialized patent dispute procedures for generic drugs and biosimilars under Hatch-Waxman and the BPCIA, respectively."], "subsections": [{"section_title": "Patent Law", "paragraphs": ["Congress's authority to grant patents derives from the IP Clause of the U.S. Constitution, which grants Congress the power \"[t]o promote the Progress of Science and useful Arts, by securing for limited Times to . . . Inventors the exclusive Right to their . . . Discoveries.\" The IP Clause was included in the Constitution to create a national, uniform law governing IP rights. In the view of the Framers, the states could not effectively protect copyrights or patents separately because obtaining IP rights in multiple states with differing standards would be difficult and expensive for authors and inventors, undermining the effectiveness of the legal regime.", "Patent rights do not arise automatically. Rather, to obtain patent protection under the Patent Act, an inventor must file a patent application with the PTO, and a PTO patent examiner must review the application and conclude that the application meets the statutory requirements before the PTO will issue a patent. This section briefly overviews the requirements for obtaining a patent, the scope of the legal rights granted to the holder of a valid patent, and an important limitation on patent rights: the authority of the federal government to grant compulsory licenses for a patent under certain circumstances."], "subsections": [{"section_title": "Requirements for Obtaining a Patent", "paragraphs": ["Patents are generally available to anyone who \"invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.\" To obtain a patent, the inventor must formally file an application for a patent with the PTO, beginning a process called patent prosecution. During prosecution, a patent examiner at the PTO evaluates the patent application to ensure that it meets all the applicable legal requirements to merit the grant of a patent. In addition to requirements regarding the technical disclosure of the invention, the claimed invention must be (1)\u00a0directed at patentable subject matter, (2) new, (3)\u00a0nonobvious, and (4) useful. If granted, patents typically expire twenty years after the date of the initial patent application."], "subsections": [{"section_title": "Patentable Subject Matter", "paragraphs": ["The field of patentable inventions is broad, embracing nearly \"anything under the sun that is made by man.\" By statute, patents are available on any new and useful \"process, machine, manufacture, or composition of matter, or . . . improvement thereof.\" Examples of technological areas for patentable inventions include pharmaceuticals, biotechnology, chemistry, computer hardware and software, electrical engineering, mechanical engineering, and manufacturing processes. Although the subject matter of patents is wide-ranging, the Supreme Court has long held that \"laws of nature, natural phenomena, and abstract ideas are not patentable.\" The Court has reasoned that to permit a monopoly on the \"'basic tools of scientific and technological work' .\u00a0. . might tend to impede innovation more than it would tend to promote it.\"", "In a series of recent cases, the Supreme Court has established a two-step test for patentable subject matter, sometimes called the Alice test. The first step addresses whether the patent claims are \"directed to\" ineligible subject matter, that is, a law of nature, natural phenomenon, or abstract idea. If not, the invention is patentable. If it is directed at ineligible subject matter, the invention is not patentable unless the patent claims have an \"inventive concept\" under the second step of the Alice test. To have an \"inventive concept,\" the patent claims must contain elements \"sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself,\" transforming the nature of the claim to a patent-eligible application of ineligible subject matter."], "subsections": []}, {"section_title": "Novelty and Nonobviousness", "paragraphs": ["Perhaps the most fundamental requirement for patentability is that the claimed invention must be actually new . Specifically, the PTO will not issue a patent if \"the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.\" In other words, if every element of the claimed invention is already disclosed in the \"prior art\"\u2014the information available to the public at the time of the patent application\u2014then the alleged inventor \"has added nothing to the total stock of knowledge,\" and no valid patent may issue to her.", "Even if a claimed invention is novel in the narrow sense that it is not \"identically disclosed\" in a prior art reference (such as an earlier patent or publication), the invention must further be nono bvious to be patentable. Specifically, an invention cannot be patented if \"the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious . . . to a person having ordinary skill\" in the relevant technology. When determining obviousness, courts may evaluate considerations such as \"commercial success, long felt but unsolved needs, [or] failure of others . . . to give light to the circumstances surrounding the origin of the subject matter sought to be patented.\" By its nature, obviousness is an \"expansive and flexible\" inquiry that cannot be reduced to narrow, rigid tests. Nonetheless, if an invention does no more than combine \"familiar elements according to known methods,\" yielding only \"predictable results,\" it is likely to be obvious."], "subsections": []}, {"section_title": "Utility", "paragraphs": ["In addition to being novel and nonobvious, an invention must be useful to be patentable, that is, it must have a specific and substantial utility. The utility requirement derives from the IP Clause's command that patent laws exist to \"promote the Progress of . . . useful Arts.\" The constitutional purpose of patent law thus requires a \"benefit derived by the public from an invention with substantial utility,\" where the \"specific benefit exists in currently available form.\" This standard for utility is relatively low, however, requiring only that the claimed invention have some \"significant and presently available benefit to the public\" that \"is not so vague as to be meaningless.\""], "subsections": []}, {"section_title": "Disclosure Requirements", "paragraphs": ["In addition to substantive requirements relating to the invention, the Patent Act imposes a number of requirements relating to the form of the patent application. These provisions are intended to ensure that the patent adequately discloses the invention to the public such that the public can use the invention after the expiration of the patent term. Section 112 of the Patent Act requires that patents must contain a \"specification\" that includes:", "a written description of the\u00a0 invention , and of the manner and \u00a0process\u00a0 of making and using it , in such full, clear, concise, and exact terms as to enable any person skilled in the art to .\u00a0.\u00a0.\u00a0make and use the same, and shall set forth the best mode contemplated by the \u00a0inventor\u00a0 or\u00a0 joint inventor \u00a0of carrying out the \u00a0invention.", "This statutory language yields three basic disclosure requirements for patentability. First, to satisfy the written description requirement , the specification must \"reasonably convey[] to those skilled in the art that the inventor had possession of the claimed subject matter as of the filing date\" of the patent application. Second, to satisfy the enablement requirement , the specification must contain enough information to teach a person skilled in the art how \"to make and use the invention without undue experimentation.\" Finally, to satisfy the best mode requirement , the specification must demonstrate that the inventor \"possessed a best mode for practicing the invention\" at the time of the patent application, and disclose that preferred way of practicing the invention."], "subsections": []}, {"section_title": "Patent Claims", "paragraphs": ["If granted, the legal scope of the patent is defined by the patent claims , words which \"particularly point[] out and distinctly claim[] the subject matter which the inventor . . . regards as the invention.\" In essence, while the specification explains the invention in a technical sense, the claims set forth the legal effect of the patent. Much as a deed may describe the boundaries of a tract of land, the claims define the \"metes and bounds\" of the patent right. Patent claims must be sufficiently definite to be valid\u2014that is, when the claims are read in context, they must \"inform, with reasonable certainty, those skilled in the art about the scope of the invention.\""], "subsections": []}]}, {"section_title": "Rights of Patent Holders", "paragraphs": ["Once granted, the holder of a valid patent has the exclusive right to make, use, sell, or import the invention in the United States until the patent expires. Any other person who practices the invention (i.e., makes, uses, sells, offers to sell, or imports it) without permission from the patent holder infringes the patent and is liable for monetary damages, and possibly injunctive relief, if sued by the patentee. Patents have the attributes of personal property and may be sold or assigned to by the patentee to a third party. A patentee may also license other parties to practice the invention, that is, grant them permission to make, use, sell, or import the invention, usually in exchange for consideration (such as monetary royalties).", "Patents thus provide a negative right to exclude another person from practicing the claimed invention. However, patents do not grant the patentee any affirmative right to practice the invention. In the pharmaceutical context, this means that even if a manufacturer has a patent on a particular drug (or inventions related to making or using that drug), it nonetheless cannot market that drug without FDA approval.", "With some exceptions, a patent is generally granted \"for a term beginning on the date on which the patent issues and ending 20 years from the date on which the application for the patent was filed.\" The Patent Act includes provisions that may modify the 20-year term, including to account for excessive delays in patent examination at the PTO, or delays associated with obtaining marketing approval from other federal agencies (including FDA). In the pharmaceutical context, patents claiming a drug product or medical device (or a method of using or manufacturing the same) may be extended for up to five years to account for delays in obtaining regulatory approval, if certain statutory conditions are met.", "Patents are not self-enforcing: to obtain relief from infringement, the patentee must sue in court. Patent law is an area of exclusive federal jurisdiction, and the traditional forum for most patent disputes is federal district court. Although patent suits may be filed in any district court across the country with jurisdiction over the defendant and proper venue, all appeals in patent cases are heard by a single specialized court, the U.S. Court of Appeals for the Federal Circuit (the Federal Circuit). ", "If the patentee succeeds in proving infringement, the patent holder may obtain two major forms of judicial relief: monetary damages and injunctive relief. Damages must be \"adequate to compensate for the infringement,\" and typically take the form of either (1) lost profits , that is, the net revenue \"lost to the patentee because of the infringement,\" or (2) a reasonable royalty , which awards the amount that the patentee would have received in a \"hypothetical negotiation\" if the patentee and the infringer had negotiated a license in good faith prior to the infringement. Courts have discretion to increase the damages \"up to three times the amount found or assessed,\" but such enhanced damages are \"generally reserved for egregious cases of culpable behavior\" by the infringer. Finally, courts have discretion to award attorneys' fees in \"exceptional cases,\" that is, ones that \"stand[] out from others with respect to the substantive strength of a party's litigating position\" or \"the unreasonable manner in which the case was litigated.\"", "In addition to monetary damages, a patent holder may also ask courts to order various forms of injunctive relief. At the outset of a patent litigation, a patent holder may seek a preliminary injunction , a court order that prevents the defendant from committing the allegedly infringing acts while the litigation proceeds. If a patent infringement lawsuit is successful, the patent holder may seek a permanent injunction , an order prohibiting the defendant from infringing the patent in the future.", "Parties accused of patent infringement may defend on several grounds. First, although patents are subject to a presumption of validity, the accused infringer may assert that the patent is invalid . To prove invalidity, the accused infringer must show, by clear and convincing evidence, that the patent should never have been granted by the PTO because it failed to meet the requirements for patentability. Thus, for example, the accused infringer may argue that the invention lacks novelty, is obvious, or claims nonpatentable subject matter; that the patent fails to enable the invention; or that the patent claims are indefinite. Second, the accused infringer may claim an \"absence of liability\" on the basis of noninfringement . In other words, even presuming the patent is valid, the patentee may fail to prove that the activities of the accused infringer fall within the scope of the patent claims. Finally, the accused infringer may argue that the patent is unenforceable based on the inequitable or illegal activities of the patent holder, such as obtaining the patent through fraud on the PTO.", "Following the passage of the 2011 Leahy-Smith America Invents Act (AIA), the Patent Trial and Appeal Board (PTAB) has become an increasingly important forum for patent disputes. The AIA created several new administrative procedures for challenging patent validity, including (1) post-grant revie w (PGR), which allows petitioners to challenge patent validity based on any of the requirements of patentability if the PGR petition is filed within nine months of the patent's issuance; (2) inter partes review (IPR), which allows any person other than the patentee to challenge patent validity on limited grounds (novelty or obviousness based on prior patents or printed publications) at any time after nine months following the patent's issuance; and (3) a transitional program for covered business method patents (CBM), a PGR-like process limited to certain patents claiming \"business methods\" that will be available only through September 2020. Of these procedures, IPR is by far the most widely used."], "subsections": []}, {"section_title": "Types of Pharmaceutical Patents", "paragraphs": ["If a person is the first to synthesize a particular chemical believed to be useful for the treatment of human disease, she may file for a patent on that chemical itself, and\u2014presuming that the application meets all requirements for patentability\u2014the PTO will grant the patent. Patents on a pharmaceutical product's active ingredient may be of particular value to the manufacturer because these patents are unusually difficult, if not impossible, to \"invent around\" (i.e., develop a competing product that does not infringe the patent). However, active ingredient patents are hardly the only patents relating to pharmaceuticals and not necessarily the most important to manufacturers as a practical matter. Indeed, in the case of biological products, if the active ingredient is naturally occurring, it may not be legally possible to patent the biologic itself because it constitutes patent-ineligible subject matter. ", "Pharmaceutical patents may cover many different features of a drug or biologic beyond a claim on the active ingredient itself. Such patents may claim, among other things: ", "1. a formulation of the drug (e.g., an administrable form and dosage); 2. a method of using the pharmaceutical (e.g., an indication or use for treating a particular disease); 3. technologies used to administer the pharmaceutical or a method of administration; 4. a method of manufacturing or manufacturing technology used to make the pharmaceutical; 5. other chemicals related to the active ingredient, such as crystalline forms, polymorphs, intermediaries, salts, and metabolites. ", "To be patentable, all of these types of inventions must be new, useful, and nonobvious, and sufficiently described in the patent application, like any other invention.", "In addition, if a person invents an improvement on any of these technologies\u2014for example, a more effective formulation of the drug, a new use, a different manufacturing process, etc.\u2014then the inventor can file for a patent on that improvement, which receives its own patent term. To be patentable, the improvement must be new and nonobvious, that is, \"more than the predictable use of prior art elements according to their established functions.\" Any person wishing to practice the improved form of the invention will need permission from both the holder of the patent on the original technology and the holder of the improvement patent (who need not be the same entity), if neither patent has yet expired. In the case where the original patent has expired but the improvement patent has not, permission from the improvement patentee is required to practice the improved version, but as a matter of patent law any person is free to make and use the original, unimproved version.", "Because many different aspects of pharmaceutical products (and improvements thereon) are patentable, some pharmaceutical products are protected by dozens of different patents. For example, one recent study of the top 12 drugs by gross U.S. revenue found that pharmaceutical manufacturers had obtained an average of 71 patents on each of these drugs. AbbVie, the maker of the top-selling arthritis biologic Humira, was found to have filed 247 patent applications relating to that product, resulting in 132 issued patents claiming methods of treatment, formulations, methods of manufacturing, and other related inventions.", "The number and timing of nonactive ingredient patents (sometimes called \"secondary\" patents) have contributed to long-standing concerns by some commentators about so-called patent \"evergreening.\" Evergreening, also known as patent \"layering\" or \"life-cycle management,\" is an alleged practice by which \"drug innovators [seek] to prolong their effective periods of patent protection [through] strategies that add new patents to their quivers as old ones expire.\" Critics of evergreening maintain that, by obtaining later patents on improvements or ancillary aspects of a pharmaceutical, pharmaceutical manufacturers effectively extend patent protection beyond the term set by Congress, deterring follow-on competitors and keeping prices high. In the view of evergreening critics, many secondary pharmaceutical patents are of questionable value and validity. ", "A similar, but distinct, concern voiced by some commentators is the notion of a patent \"thicket.\" This term is used in two slightly different ways, both relating to products with a high number of patents. First, a patent thicket may describe the situation where multiple parties have overlapping patent rights on one product, such that a \"potential manufacturer must negotiate licenses with each patent owner in order to bring a product to market without infringing.\" Patent thickets, in this sense, raise concerns about inefficient exploitation of a technology because the multiplicity of owners increases transaction costs and creates coordination challenges. Second, the term may be used in a looser sense to describe an incumbent manufacturer's practice of amassing of a large volume of patents relating to a single product, with the intent to intimidate follow-on competitors from entering the market (or to make it too costly and risky to do so). AbbVie's Humira patent portfolio has been alleged to be an example of this sort of patent thicket. ", "Although some critics deride patent thickets and evergreening, others assert that these are unfairly pejorative terms for legitimate uses of the patent system. On this view, much innovation is incremental in nature, and sound public policy permits patents on improvements: like any other form of technology, society ought to provide incentives to develop more effective formulations of a drug, methods of treatment, and the like. Secondary pharmaceutical patents may represent inventions with true medical benefits to patients, in which case the effect they may have on competition is arguably justified. Finally, even presuming that some improvement patents granted by the PTO are obvious or not truly innovative, defenders of evergreening may point out that existing law already has several mechanisms to challenge the validity of patents."], "subsections": []}, {"section_title": "Compulsory Licensing", "paragraphs": ["As explained above, the patent holder generally has the exclusive right to practice the invention. Thus, any other person who wishes to make, use, sell, or import the invention will ordinarily need a license (i.e., permission) from the patent holder, or else be exposed to legal liability. In certain cases, however, patents may be subject to a \"compulsory license,\" which allows another person to use the invention without the prior consent from the patent holder. Compulsory licenses are typically a creation of statute and usually require the sanction of a governmental entity and the payment of compensation to the patent holder. Compulsory licenses differ from ordinary licenses in two important respects: (1) the person seeking to use the invention need not seek advance permission from the patent holder; and (2) the compensation paid to the patentee is ordinarily determined by operation of law, not by private contractual negotiations between the licensee and the patent holder. ", "Current federal law contains a number of compulsory license provisions for patents. For example, under 28 U.S.C. \u00a7 1498, which is sometimes described as an \"eminent domain\" provision for patents, the U.S. government has the authority to use any patented invention \"without license.\" The patentee, however, has the right to sue in the U.S. Court of Federal Claims for \"reasonable and entire compensation\" for the government's use of the patented invention. In no event, however, will a court issue an injunction against the United States to prevent its use of the invention. In effect, then, section 1498 allows the United States to issue itself a compulsory license to use any patented invention without obtaining the permission of the patentee, in exchange for the payment of reasonable compensation. The federal government uses its section 1498 authority with some frequency, although it has not been used recently in the pharmaceutical context.", "Compulsory licensing is also available for inventions made with federal funding under the provisions of the Bayh-Dole Act. In general, the Bayh-Dole Act permits certain government contractors to obtain patents on inventions produced with federal funding. However, the federal government retains the authority to \"march in\" and grant compulsory licenses to third parties for federally funded inventions under certain specified circumstances, such as a failure to practice the patented invention or health or safety needs. A license granted pursuant to Bayh-Dole's march-in provisions must be \"upon terms that are reasonable under the circumstances,\" which may require some compensation to be paid by the licensee to the patentee. The federal government has never exercised its march-in rights under Bayh-Dole. "], "subsections": []}]}, {"section_title": "Food and Drug Administration (FDA) Law", "paragraphs": ["Unlike patent law, which is centrally motivated by promoting innovation, FDA law generally arose to promote public health by protecting consumers from pharmaceuticals that are adulterated, misbranded, unsafe, or ineffective. To this end, new drugs and biologics cannot be marketed without FDA approval. FDA regulates which drugs and biologics may be marketed in the United States through similar but distinct approval processes.", "Nonetheless, the principle of balancing advancement through innovation against the benefits of competition applies to FDA law as well as patent law. To that end, federal law provides certain regulatory exclusivities for companies that obtain approval for pharmaceutical products that meet the requisite criteria.", "This section provides an overview of the approval processes for new and follow-on drugs and biologics. It also describes the exclusivities Congress has created to encourage research and development of new pharmaceutical products as well as competition from follow-on products."], "subsections": [{"section_title": "New and Generic Drug Approval", "paragraphs": ["Drugs are articles, generally chemical compounds, \"intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease\" or \"intended to affect the structure or any function of the body.\" New drugs are those drugs that scientific experts do not generally recognize as safe and effective for their intended use. A new drug may contain an active ingredient that FDA has not previously approved or contain a previously approved active ingredient but modify another aspect of the drug, such as the indication, patient population, formulation, strength, dosage form, or route of administration. All new drugs require FDA approval before they are marketed. "], "subsections": [{"section_title": "New Drug Approval", "paragraphs": ["New drugs are approved through the new drug application (NDA) process. To obtain approval for a new drug, a sponsor must conduct \"costly and time-consuming studies\" demonstrating the drug's safety and effectiveness for humans. Clinical trials, conducted after the company has completed basic research and animal testing, test the safety, efficacy, and effectiveness of the drug in volunteer human subjects under carefully controlled conditions. When the company is ready to begin clinical trials, it submits an investigational new drug (IND) application to FDA. The IND application provides FDA with information about the drug, including what the drug does, the condition(s) and population(s) the drug is intended to treat, and any data from and analysis of animal studies with the drug. It also includes a proposed clinical study design and written approval from an Institutional Review Board, which reviews the study design. FDA has 30 days to review the IND application and object before clinical investigations proceed.", "Clinical testing occurs in three phases. Phase I clinical trials test the drug in a small number of subjects and focus on evaluating the safety of the drug. During Phase I clinical trials, the company evaluates how the drug is processed (metabolized and excreted) in the body, determines the highest tolerable dose and optimal dose of the drug, and identifies any acute adverse side effects from the drug. Phase II and Phase III clinical trials evaluate the drug's efficacy and effectiveness in addition to safety. These trials use a larger group of test subjects who have the characteristic, condition, or disease the drug treats. ", "Once clinical trials are complete, the company submits the results in an NDA to FDA's Center for Drug Evaluation and Research (CDER), along with a list of articles used as components of the drug; a statement of the drug's composition; a description of manufacturing methods, facilities, and controls; specimens of the proposed labeling; any required pediatric assessments; and patient information. In general, an NDA also contains the product description, the indication(s) (i.e., the disease or condition and population for which the drug will be used), information about the manufacturing process, and proposed labeling. The NDA may also include a proposed Risk Evaluation and Mitigation Strategy as needed.", "The FD&C Act provides for two types of NDAs: 505(b)(1) and 505(b)(2). Both types include \"full reports of investigations of safety and effectiveness.\" However, the nature of the company's relationship to the underlying studies differs. For 505(b)(1) NDAs, the company has a right to all of the studies that support the investigational reports, either because the studies were conducted by or for the company, or because the company obtained the right to reference or use the studies from the person who conducted them. ", "For 505(b)(2) NDAs, by contrast, at least some of the information contained in the application relies on studies that were not conducted by or for the company and for which the company has not obtained a right of reference or use. This information to which the company does not have reference takes two forms: (1) published literature where the applicant has not obtained a right to the underlying studies or (2) the FDA's finding of safety and effectiveness for an approved drug. The 505(b)(2) pathway is used to obtain approval for modifications of approved drugs\u2014drugs that are \"neither 'entirely new' nor 'simply a generic version of a branded drug.'\" ", "FDA regulations also permit NDA holders to make changes to the drug or label after approval. Minor changes require only notice, but changes to the drug's label, dosage, strength, or manufacturing methods require a supplemental NDA (sNDA). Because the sNDA relates to a drug already on the market, sNDAs must include post-market information, such as commercial marketing experience and reports in scientific literature and unpublished scientific papers, in addition to descriptions and analyses of clinical studies. ", "FDA reviews the NDA to determine whether there is substantial evidence that the drug is safe and effective for the proposed use, including whether the benefits of the drug outweigh the risks. The agency also reviews the proposed labeling and the manufacturing controls. ", "When FDA completes its review, it sends a letter to the company with the agency's determination. If the NDA meets the requirements for approval, FDA sends an approval letter or, if patent rights or exclusivities bar approval, a tentative approval letter. FDA may impose conditions on its approval of the NDA, such as requiring the company to conduct additional post-market clinical studies referred to as Phase IV clinical trials. If the NDA does not meet the requirements for approval, FDA sends a \"complete response letter\" explaining the deficiencies FDA identified in the NDA and how they could be remedied."], "subsections": []}, {"section_title": "Generic Drug Approval", "paragraphs": ["Before the Hatch-Waxman Act was enacted in 1984, every new drug submitted to the FDA for preapproval required a complete application under Section 505(b) supported by clinical trial data demonstrating safety and effectiveness. To encourage generic drug entry, the Hatch-Waxman Act established a pathway for abbreviated new drug applications (ANDAs), which allows generic manufacturers to rely on FDA's prior approval of another drug with the same active ingredient\u2014the reference listed drug (RLD)\u2014to establish that the generic drug is safe and effective. The ANDA pathway allows generic manufacturers to avoid the long, expensive process of conducting their own clinical trials. Instead, the generic manufacturer need only conduct studies with its generic product and samples of the RLD to demonstrate that the generic drug is pharmaceutically equivalent and bioequivalent to the RLD. The ANDA also includes the generic manufacturer's proposed labeling, which must be identical to the RLD labeling except for manufacturing information and any approved changes from the RLD specifications. ANDA filers submit this information, its proposed labeling, and any patent certifications to FDA to obtain approval. "], "subsections": []}]}, {"section_title": "Biological Product and Biosimilar Licensure", "paragraphs": ["A biological product is derived from biological material, such as a virus, toxin, vaccine, blood component, or protein, and used for \"the prevention, treatment, or cure of a disease or condition of human beings.\" Biological products \"are generally large, complex molecules\" that \"may be produced through biotechnology in a living system, such as a microorganism, plant cell, or animal cell.\" \"Inherent variations\" between different batches of the same biological product are \"normal and expected.\" According to FDA, the complexity and variability of biological products \"can present challenges in characterizing and manufacturing these products that often do not exist in the manufacture of small molecule drugs.\" FDA's process for approving biological products and generic versions of previously approved products aims to account for these challenges."], "subsections": [{"section_title": "Biological Products", "paragraphs": ["To be marketed in the United States, a biological product must be (1) covered by a valid biologics license; and (2) marked with the product's proper name; the manufacturer's name, address, and applicable license number; and the product's expiration date. A biological product manufacturer may obtain a biologics license by submitting a biologics license application (BLA) to FDA's Center for Biologics Evaluation and Research (CBER) or CDER for approval. The BLA must include, among other things:", "\"data derived from nonclinical laboratory and clinical studies\"; \"[a] full description of manufacturing methods; data establishing stability of the product through the dating period\"; representative samples of the product; the proposed labels, enclosures, and containers to be used; \"the address of each location involved in the manufacture of the biological product\"; and if applicable, a proposed Medication Guide. ", "FDA must also be able to examine the product and determine that it \"complies with the standards established\" in the BLA and other requirements, including good manufacturing practices. ", "To approve a BLA, FDA must determine that the biological product is \"safe, pure, and potent\" and that the production and distribution process \"meets standards designed to assure that the biological product continues to be safe, pure, and potent.\" As with drug approvals, FDA either issues the license or issues a complete response letter detailing the reasons for denying the license. After approval, BLA holders must notify FDA of any changes to \"the product, production process, quality controls, equipment, facilities, responsible personnel, or labeling.\""], "subsections": []}, {"section_title": "Biosimilar or Interchangeable Products", "paragraphs": ["As with the Hatch-Waxman Act, Congress created an abbreviated approval process for biological products through the BPCIA. Under the abbreviated process, a company can obtain a license to market a biological product if it can demonstrate that the product is biosimilar to, or interchangeable with, an approved biological product, referred to as the \"reference product.\" To obtain a BLA for a biosimilar, the manufacturer must submit data demonstrating that its product is \"highly similar to the reference product notwithstanding minor differences in clinically inactive components\" with no \"clinically meaningful differences\" between the two products \"in terms of the safety, purity, and potency of the product.\" \"[T]he condition or conditions of use prescribed, recommended, or suggested in the labeling\" must have been approved for the reference product. The biosimilar product must use \"the same mechanism or mechanisms of action\" to treat any applicable conditions and have the same route of administration, dosage form, and strength as the reference product. Finally, the biosimilar product license application must demonstrate that the production and distribution facilities meet \"standards designed to assure that the biological product continues to be safe, pure, and potent.\"", "To obtain a BLA for an interchangeable product, the manufacturer must submit data demonstrating that the product is biosimilar to the reference product and \"can be expected to produce the same clinical result as the reference product in any given patient.\" Additionally, for a biological product administered to an individual more than once, the manufacturer must also show that the product does not create a greater \"risk in terms of safety or diminished efficacy\" from alternating from or switching between the biosimilar product and reference product than if the reference product was used alone. Interchangeable products \"may be substituted for the reference product without the intervention of the health care provider who prescribed the reference product.\""], "subsections": []}]}, {"section_title": "Regulatory Exclusivities", "paragraphs": ["In order to balance interests in competition\u2014which the abbreviated approval pathways aim to encourage\u2014with the countervailing interest in encouraging innovation, federal law establishes periods of regulatory exclusivity that limit FDA's ability to approve generic drugs and biosimilars under certain circumstances. This right to exclusivity aims to encourage new drug or biologics applicants to undertake the expense of generating clinical data and other information needed to support an NDA or BLA. It also encourages follow-on product manufacturers to submit abbreviated applications as soon as permissible. ", "There are two general categories of regulatory exclusivity: (1) data exclusivity, which precludes applicants from relying on FDA's safety and effectiveness findings for the reference product (based on the NDA or BLA holder's data) to demonstrate the safety and effectiveness of the follow-on product; and (2) marketing exclusivity, which precludes FDA from approving any other application for the same pharmaceutical product and use, regardless of whether the applicant has generated its own safety and effectiveness data. During a period of data exclusivity, a company could submit an NDA or BLA for the same pharmaceutical product and use. Functionally, however, data exclusivity and marketing exclusivity may generate the same result due to the investment required to generate the necessary data."], "subsections": [{"section_title": "New Drugs or Biological Products", "paragraphs": ["Federal law provides regulatory exclusivities for new drug and biological products that differ based on such factors as how innovative the product was or the nature of the treatment population. For new drugs, an NDA filer that obtains approval for a drug that contains a new chemical entity (i.e., a new active ingredient) for which no other drug has been approved is eligible for five years of data exclusivity running from the time of NDA approval. During that period, no ANDA or 505(b)(2) NDA (i.e., applications that, by definition, would reference the NDA data) containing that same active ingredient may be submitted to FDA. The one exception is that after four years , FDA may accept for review an ANDA or 505(b)(2) application for the same active ingredient if the application contains a paragraph (IV) certification that a listed patent for the RLD is invalid or not infringed by the generic drug. ", "NDA or sNDA sponsors that obtain approval for significant changes to approved chemical entities that require additional clinical studies are eligible for three years of data exclusivity running from the time of NDA approval. Significant changes would include new indications for or formulations of chemical entities that FDA previously approved. Unlike five-year exclusivity for new chemical entities, FDA may accept ANDA and 505(b)(2) submissions that reference the changes meriting exclusivity during the three year time period. The three-year exclusivity relates to when FDA may approve such applications. To obtain such three-year exclusivity, the NDA or sNDA must \"contain[] reports of new clinical investigations (other than bioavailability studies)\" that were \"essential to the approval\" of the application. In other words, the sponsor must have conducted or sponsored additional clinical trials that were necessary to obtain approval of the new use or formulation of the active ingredient in order to benefit from the three-year exclusivity for that new condition. ", "For brand-name biological products, the BPCIA establishes two applicable periods of exclusivity. First, no biosimilar applications can be submitted for four years \"after the date on which the reference product was first licensed.\" Second, approval of biosimilar application cannot become effective until 12 years \"after the date on which the reference product was first licensed.\" Together, these exclusivity periods mean that for the first four years after a reference biological product is licensed, FDA does not accept any biosimilar applications for review; for the next eight years, FDA accepts biosimilar applications for review, but it would not approve any biosimilar application until 12 years after the date on which the reference product was first licensed. FDA has not adopted a formal position on whether these exclusivity periods are data or marketing exclusivity periods. Supplemental BLAs, for example to change the \"indication, route of administration, dosing schedule, dosage form, delivery system, delivery device, or strength,\" are not eligible for these four and 12-year regulatory exclusivity periods."], "subsections": []}, {"section_title": "Generic Drug and Biosimilar Exclusivities", "paragraphs": ["In addition to providing incentives for innovation, regulatory exclusivities are also used to promote competition by encouraging the entry of follow-on products. When a patent listed for an RLD has not expired, potential ANDA applicants have two choices: (1) wait until the patent expires to be approved or (2) file a paragraph (IV) certification that the patent is invalid or not infringed by the generic product. The potential for ensuing patent litigation raises the expected costs for the first ANDA filer with a paragraph (IV) certification as compared to other ANDA filers. To incentivize generic manufacturers to be the first filer and challenge listed patents, the Hatch-Waxman Act provides 180 days of exclusivity to the first ANDA applicant that successfully challenges an active patent listed for the RLD using a paragraph (IV) certification that the patent is invalid. This exclusivity period precludes FDA from approving another ANDA for the same RLD during the 180-day period.", "The BPCIA similarly awards regulatory exclusivity to the first interchangeable biological product for a particular reference product. This exclusivity precludes FDA from making an interchangeability determination for a subsequent biologic relying on the same reference product for any condition of use until such exclusivity expires, the timing of which depends on the status of a relevant patent dispute. Specifically, the exclusivity period ends at the earlier of one year after the commercial marketing of the first interchangeable product, 18 months after a final court decision in a patent infringement action against the first applicant or dismissal of such an action, 42 months after approval if the first applicant has been sued and the litigation is still ongoing, or 18 months after approval if the first applicant has not been sued."], "subsections": []}, {"section_title": "Other Regulatory Exclusivities", "paragraphs": ["There are also a number of regulatory exclusivities aimed at encouraging entry into markets that serve smaller or underserved populations or have limited competition. For example, the FD&C Act provides a 180-day exclusivity to an ANDA filer if\u2014at the applicant's request\u2014FDA designates the drug as a \"competitive generic therapy\" (CGT) due to \"inadequate generic competition.\" To receive the exclusivity, the first ANDA approved for the CGT drug must have submitted the ANDA when there were \"no unexpired patents or exclusivities listed in the Orange Book for the relevant RLD,\" and the applicant must commercially market the drug within 75 days of approval.", "In addition, Congress passed the Orphan Drug Act in 1983 to encourage the development of drugs and biologics to treat rare diseases and conditions. Because these drugs\u2014called \"orphan drugs\" \u2014often treat small patient populations and thus may provide fewer financial incentives for pharmaceutical manufacturers to develop them, the law (among other measures) provides a seven-year marketing exclusivity for companies that obtain approval for these drugs. During the seven-year period, FDA cannot approve an NDA or BLA for the same drug or biologic to treat the same disease or condition, even if the second application generates its own safety and efficacy data. To receive this exclusivity, (1) the drug must treat \"rare diseases or conditions,\" and (2) FDA must not have approved another drug \"for the same use or indication.\"", "To encourage manufacturers to evaluate the safety and effectiveness of their pharmaceutical products for children, NDA and BLA filers may obtain a \"pediatric exclusivity\" if FDA determines the drug or biological product \"may produce health benefits\" in the pediatric population and the filer completes pediatric studies at FDA's request. Pediatric exclusivity adds six months to any existing exclusivity the NDA or BLA filer has obtained. For example, if the NDA filer obtains a five-year exclusivity for a new active ingredient and conducts the requested pediatric studies, it is entitled to five and a half years of exclusivity. "], "subsections": []}]}]}, {"section_title": "Patent Dispute Procedures for Generic Drugs and Biosimilars", "paragraphs": ["As Table 1 summarizes below, patent rights granted by the PTO and regulatory exclusivities granted by FDA are legally distinct as a general matter. They are, however, motivated by similar purposes. Patents are designed to encourage innovation by providing an economic incentive for inventors to invest their time and resources in the development of novel inventions. Analogously, regulatory exclusivities granted by FDA can be viewed as providing an incentive for pharmaceutical manufacturers to undertake the investments necessary to complete the FDA approval process and bring new drugs and biologics to market.", "In some circumstances, patent rights can affect when a follow-on generic or a biosimilar can be marketed. For example, if a court hearing a patent dispute grants an injunction against a generic drug manufacturer that prohibits that manufacturer from infringing by making the generic drug, that product cannot be brought to market until after the patent expires. In addition, as discussed below, the Hatch-Waxman Act's specialized patent dispute procedures can affect FDA's ability to approve an ANDA, even prior to a judicial decision. Patent rights may also affect follow-on market entry indirectly , if a generic or biosimilar manufacturer declines to seek FDA approval because of the number of existing patents relating to a product or the costs of challenging them."], "subsections": [{"section_title": "Rationale for Specialized Pharmaceutical Patent Procedures", "paragraphs": ["One of the core aims of the Hatch-Waxman Act was to correct \"two unintended distortions\" in the patent term resulting from the interaction between the temporally limited patent monopoly and FDA premarketing requirements for products such as prescription drugs. The first distortion affected new drug manufacturers: because obtaining FDA marketing approval could take years, the effective patent life (i.e., the period during which the patentee can derive profit from the invention) was shortened by FDA regulatory requirements. In response, the Hatch-Waxman Act granted a patent term extension for certain inventions relating to drug products or medical devices based on delays in obtaining regulatory marketing approval.", "The other distortion concerned the end of the patent term and affected generic manufacturers. In general, once a patent is expired, the patented invention should be available for anyone to use. As a result, in the pharmaceutical context, generic manufacturers can (at least in theory) enter the market once the applicable patents and/or regulatory exclusivities have expired. However, prior to the Hatch-Waxman Act, some judicial decisions had held that uses of a patented drug necessary to obtain FDA approval, such as conducting tests on a patented drug, constituted patent infringement. Thus, as a practical matter, generic manufacturers could not even begin the process of seeking FDA approval until the applicable patents expired. The result was an \"effective extension of the patent term\" based on the \"combined effect of the patent law and the premarket regulatory approval requirement.\" In response, the Hatch-Waxman Act created a \"safe harbor,\" providing that making, using, or selling an invention \"solely for uses reasonably related to the development and submission of information under a federal law which regulates the manufacture, use, or sale of drugs\" is not patent infringement.", "A potential side effect of this safe harbor, however, was to limit the ability of a pharmaceutical patent holder to file a lawsuit for patent infringement prior to the generic manufacturer's marketing of the follow-on product. If actions relating to the FDA approval process are no longer infringing, patent litigation against an ANDA filer might not occur until the generic or biosimilar is actually marketed, following the completion of the FDA approval process. However, earlier resolution of such patent disputes is often considered beneficial, as it provides greater legal certainty to the parties. In particular, generic manufacturers can obtain clarity on patent issues before they market a drug and expose themselves to monetary damages.", "For this reason, the Hatch-Waxman Act made the filing of an ANDA or paper NDA itself an \"artificial\" act of patent infringement. For its part, the BPCIA contains an analogous provision making the filing of a biosimilar or interchangeable BLA an artificial act of patent infringement. Functionally, these artificial acts of infringement enable the original manufacturer, in some circumstances, to sue for patent infringement at the time of the follow-on application, enabling patent disputes to be litigated prior to the marketing of the follow-on product.", "In short, both of the laws that created an abbreviated pathway for the regulatory approval for follow-on products enacted specialized patent dispute resolution procedures intended to facilitate the early resolution of patent issues. This section reviews these procedures."], "subsections": []}, {"section_title": "The Hatch-Waxman Act: Patents and Generic Drug Approval", "paragraphs": ["Under the Hatch-Waxman Act, a drug manufacturer must list as part of its NDA any patent that claims the drug that is the subject of the application, or a method of using that drug. FDA includes information on listed patents in a publication known as the Orange Book . When a generic drug manufacturer files an ANDA, it must provide a certification for each patent listed in the Orange Book with respect to the referenced listed drug (RLD). In particular, with some exceptions, the generic applicant must provide one of four certifications: ", "(I) there is no patent information listed;", "(II) the patent has expired;", "(III) the date the patent will expire; or ", "(IV) the patent is invalid and/or not infringed by the generic applicant's product.", "Paragraph (I) and (II) certifications do not affect FDA's ability to approve the ANDA. If the generic applicant makes a paragraph (III) certification, however, FDA may not approve the ANDA until the patent at issue has expired. A paragraph (IV) certification triggers Hatch-Waxman's specialized patent dispute procedures, often resulting in litigation. First, the generic applicant must give notice of the ANDA and the paragraph (IV) certification to the patentee and the NDA holder. The patent holder then has 45 days in which to bring a lawsuit against the generic applicant. If the patent holder declines to file suit by the deadline, the ANDA applicant may file a \"civil action for patent certainty\" to obtain a declaratory judgment that the Orange Book -listed patents are invalid or not infringed.", "If the patent holder timely files suit after being notified of the paragraph (IV) certification, this lawsuit triggers the so-called \"thirty-month stay\": FDA generally cannot approve the ANDA for 30 months while the parties litigate their patent dispute. If, prior to the expiration of the 30-month stay, the district court concludes that the patent is invalid or not infringed by the ANDA applicant, FDA may approve the ANDA as of the date of the court's judgment or settlement order to that effect. If the court concludes that the patent is infringed (and that decision is not appealed or affirmed), then the effective date of ANDA approval must be \"not earlier than the date of the expiration of the patent which has been infringed.\" FDA approval of a generic drug application can thus be significantly delayed based upon patent rights asserted by the NDA holder.", "By statute, the only patents that must be listed with an NDA are those that either (1) \"claim[] the drug\" that is the subject of the NDA or (2) claim \"a method of using such drug.\" FDA regulations make clear that \"drug substance (active ingredient) patents, drug product (formulation and composition) patents, and method-of-use patents\" must be listed, whereas \"[p]rocess patents, patents claiming metabolites, and patents claiming intermediates\" must not be listed. As a result, patents on a process for manufacturing a drug, for example, should not be included in the NDA or listed in the Orange Book . However, FDA does not actively police the patent information listed in the Orange Book , viewing its role as merely \"ministerial.\" This approach has raised concerns among some commentators that irrelevant or inapplicable patents may be listed by NDA holders and included in the Orange Book as a means to deter generic competition.", "Because of the availability of the 30-month stay and the requirement that ANDA filers make a certification for each patent listed in the Orange Book , it is generally in the interest of NDA holders to list all relevant patents. However, there is no statutory provision providing that the patentee or NDA holder forfeits the right to sue if she fails to list the applicable patents. In addition, because only certain types of patents relating to a drug may be included in the Orange Book , some patent litigation concerning generic drugs takes place outside the specialized procedures of the Hatch-Waxman Act."], "subsections": []}, {"section_title": "The BPCIA: Patents and Biosimilar Licensure", "paragraphs": ["A different patent dispute resolution scheme applies to biological products and biosimilars, which are subject to regulatory licensure under the PHSA, as amended by the BPCIA. Under the BPCIA, regulatory approval of biologics is not directly contingent on resolution of patent disputes. In contrast to the Hatch-Waxman approach, a BLA filed need not list any patent information as part of its BLA. As a result, no patent information is currently listed in the Purple Book , FDA's list of approved biological products that is the biologics analog of the Orange Book. Table 2 summarizes the key differences between the patent dispute resolution regimes for drugs under Hatch-Waxman and for biologics under the BPCIA.", "Instead of the Hatch-Waxman certification process, patent disputes regarding biosimilars may be resolved through the BPCIA's \"patent dance.\" The patent dance is \"a carefully calibrated scheme for preparing to adjudicate, and then adjudicating, claims of infringement.\" The first step in the patent dance process is triggered when, not later than 20 days after FDA accepts a biosimilar BLA, the biosimilar applicant provides its application to the reference product sponsor (i.e., the brand-name biologic manufacturer), along with information on how the biosimilar is manufactured. \"These disclosures enable the [reference product] sponsor to evaluate the biosimilar for possible infringement of patents it holds on the reference product (i.e., the corresponding biologic).\" The biosimilar applicant and reference product sponsor then engage in a series of back-and-forth information exchanges regarding the patents that each party believes are relevant, as well as the parties' positions as to the validity and infringement of those patents. Depending on their participation in this information exchange, each party has the opportunity to litigate the patents in two phases: either at the conclusion of the patent dance, or when the applicant provides a notice of commercial marketing no later than 180 days before the date that the biosimilar will be marketed. ", "BLA holders cannot obtain injunctive relief to compel the biosimilar applicant to engage in the patent dance. In practice, this limitation means that biosimilar applicants can choose whether or not they wish to commence the patent dance. However, if the biosimilar applicant chooses not to commence the patent dance, the BPCIA \"authorizes the [reference product] sponsor, but not the applicant, to bring an immediate declaratory-judgment action for artificial [patent] infringement.\" Thus, although the biosimilar applicant need not immediately reveal his manufacturing information if he chooses not to commence the patent dance, he exposes himself to an immediate lawsuit for a declaratory judgment of patent infringement. ", "Unlike patent listing under Hatch-Waxman, the BPCIA contains an express statutory penalty for failing to list relevant patents during the patent dance. If the biosimilar applicant commences the patent dance, the reference product sponsor must provide a list of all \"patents for which the reference product sponsor believes a claim of patent infringement could reasonably be asserted .\u00a0.\u00a0. if a person not licensed by the reference product sponsor engaged in the making, using, offering to sell, selling, or importing [the biological product at issue]\" without permission of the patentee. Under the \"list it or lose it\" requirement, the patent holder may forfeit his right to sue if this list is not submitted or is incomplete. Specifically, if a patent \"should have been included in the list [as required during the patent dance], but was not timely included in such list,\" then the patent owner \"may not bring an action under this section for infringement of the patent with respect to the biological product.\""], "subsections": []}]}]}, {"section_title": "Selected Drug Pricing Proposals in the 115th and 116th Congresses", "paragraphs": ["This section reviews a number of legislative proposals in the 115 th and 116 th Congresses that seek to reduce pharmaceutical drug and biological product prices through reforming IP laws and/or facilitating increased competition from generic drug and biosimilar manufacturers. This review is not intended to be comprehensive, nor does it evaluate the merits of these proposals. Rather, proposals are reviewed merely as representative examples of the various types of legal changes under consideration. Related or similar proposals are referenced in the footnotes.", "As noted above, IP rights are only one factor that may contribute to consumer prices in a highly complex pharmaceutical market. Thus, congressional proposals related to IP rights are merely one potential means to reduce drug prices that is currently under consideration in Congress. Other legislative proposals seeking to reduce drug prices would, for example, permit the Secretary of HHS (the Secretary) to negotiate drug prices for Medicare Part D, allow consumers to import (often cheaper) pharmaceuticals from Canada under certain circumstances, or reform health insurance requirements to institute a cap on consumers' out-of-pocket costs for prescription drugs. Because these and other similar proposals relate only indirectly to IP rights in pharmaceuticals, they are outside the scope of this report.", "In part due to the complexity of the legal regimes governing IP rights in pharmaceutical products, there are many different approaches that legislators seeking to reduce drug and biologic prices might take. These approaches include efforts to facilitate generic and biosimilar market entry, curtail practices perceived to be anticompetitive, limit IP rights based on pricing behavior, and increase patent transparency. This section surveys some of the specific means used in existing legislative proposals."], "subsections": [{"section_title": "Facilitating Follow-On Product Entry: The CREATES Act of 2019", "paragraphs": ["For many looking at how to reduce drug prices, encouraging the entry of follow-on products\u2014which provide lower-cost alternatives to brand products\u2014is often an area of focus. Accordingly, proposals have been made to overcome perceived barriers to follow-on product entry. One such proposal is the CREATES Act of 2019, which aims to facilitate the timely entry of certain follow-on products by addressing the concern that some brand manufacturers have improperly restricted the distribution of their products to deny follow-on product manufacturers access to samples of brand products (i.e., the reference drug or biological product). Because brand samples are necessary to conduct certain comparative testing required for an ANDA or biosimilar BLA, some have attributed the inability to timely obtain samples as a cause of delay in the entry of generic products. "], "subsections": [{"section_title": "Restricted Distribution and Sample Denial", "paragraphs": ["While follow-on product manufacturers can usually obtain brand samples by purchasing them from licensed wholesalers, some brand products are subject to restricted distribution that limits how they can be sold. This restriction can occur in one of two ways. First, a brand manufacturer can voluntarily place its products into restricted distribution in order to have more control over who can purchase them. Second, some high-risk drugs are subject to restricted distributions under statute and FDA regulations. ", "Under the FD&C Act, as amended by the Food and Drug Administration Amendments Act of 2007 (FDAA Act), where a pharmaceutical product entails serious safety concerns (e.g., potentially acute side effects that may warrant special monitoring), FDA may require the sponsor of the NDA or BLA to submit a proposed Risk Evaluation and Mitigation Strategies (REMS), a risk-management plan that uses strategies beyond labeling to ensure that the benefits of a drug or biological product outweigh its risks. Examples of less restrictive REMS requirements include medication guides for patients and communication plans for health care providers. More restrictive REMS programs have elements to assure safe use (ETASU), which can include prescriber and dispenser certification requirements, patient monitoring or registration, or controlled distribution that limits how the product can be sold. If a brand product is subject to REMS with ETASU, the brand manufacturer and the generic or biosimilar manufacturers generally must agree on a single, shared REMS system before the generic product goes on the market. However, FDA can waive the shared REMS requirement and allow the use of a different, comparable system by the generic or biosimilar manufacturer.", "Since the enactment of the FDAA Act, some generic manufacturers have complained that they have been improperly denied access to samples through restricted distribution. Some brand manufacturers have implemented voluntary, contractual restrictions that target generic manufacturers. Alternatively, if their products are subject to REMS with ETASU, some brand manufacturers have either (1) invoked the restricted distribution component of a REMS with ETASU to deny sales to generic manufacturers, or (2) used the existence of REMS with ETASU to substantially prolong negotiations over the sale of samples or the development of a single, shared REMS system."], "subsections": []}, {"section_title": "Existing Law Governing Sample Denials", "paragraphs": ["The existing statutory and regulatory framework provides limited legal recourse to generic manufacturers who have been denied access to or experience long delays in obtaining samples. As an initial matter, there are no statutes or regulations that specifically prohibit a company from imposing voluntary distribution restrictions on its products. For products subject to REMS, the brand manufacturers are generally prohibited from using their REMS to \"block or delay approval of an application . . . to a drug that is subject to the abbreviated new drug application.\" The statute, however, does not expressly authorize FDA to enforce this provision. Accordingly, consistent with FDA's long-standing view that \"issues related to ensuring that marketplace actions are fair and do not block competition would be best addressed by [the Federal Trade Commission],\" FDA has not asserted that it has the authority to compel the sale of samples for comparative testing.", "Given the lack of recourse under federal drug law, generic manufacturers have attempted to seek relief by suing withholding brand manufacturers for violations of antitrust law. Specifically, they argue that the brand manufacturer's refusal to sell samples or its delay in selling samples constitutes an anticompetitive effort to maintain a monopoly in the brand product market in violation of section 2 of the Sherman Act . Whether this conduct violates antitrust law, however, is unclear because courts have not defined a clear standard for when a refusal to deal is anticompetitive. A generic manufacturer's ability to obtain relief for sample denial under antitrust law is therefore uncertain under existing law."], "subsections": []}, {"section_title": "The Proposed Bill", "paragraphs": ["The CREATES Act seeks to address the uncertainties in the existing legal framework by creating a private cause of action that follow-on product developers can use to initiate expedited litigation to obtain needed brand samples. Instead of asserting an antitrust claim, the bill would allow a follow-on product developer to sue to compel the provision of brand samples if specific statutory elements are met.", "For brand products not subject to a REMS with ETASU (including a product that is subject to voluntary restrictive distribution imposed by the brand manufacturer), the follow-on product developer would need to show that: ", "1. it had made a request for samples; 2. the brand manufacturer failed to deliver, on commercially reasonable, market-based terms, sufficient quantities of the samples within 31 days of receiving the request; and 3. as of the filing date of the action, the follow-on product developer is still unable to obtain sufficient quantities of the needed samples on commercially reasonable, market-based terms. ", "For products subject to REMS with ETASU, the bill would create a process by which the follow-on product developer can request from FDA an authorization to obtain sufficient quantities of the relevant samples. FDA would issue the authorization if it determines that the follow-on product developer has agreed to comply with or otherwise met the safety conditions or requirements deemed necessary by FDA. In this situation, the follow-on product developer would need to show the first and third elements above, and that the brand manufacturer failed to deliver, on commercially reasonable, market-based terms, sufficient quantities of samples either within 31 days of receiving the request or within 31 days of receiving notice of FDA's authorization, whichever is later. ", "If a follow-on product developer prevails under either cause of action, the bill would require the court to issue injunctive relief compelling the brand manufacturer to provide the samples without delay and award attorney's fees and costs. If the court finds that the brand manufacturer delayed providing the samples without a \"legitimate business justification,\" the court could also award monetary damages. Monetary damages are not to exceed the revenue the brand manufacturer earned on the product during the period beginning on the day that is 31 days after the receipt of the request for samples (or, if the product is subject to REMS with ETASU, on the day that is 31 days after the receipt of the FDA notice of authorization, if that date is later), and ending on the date on which the follow-on product developer receives sufficient quantities of the brand sample. ", "The bill would also provide FDA more latitude to approve a separate REMS system that the follow-on product developer could use if it cannot reach an agreement on a shared strategy with the brand manufacturer. Specifically, rather than requiring the use of a shared system as the default, the bill would amend the relevant statutory provisions to permit the use of a shared system or a different but comparable system as available alternative options.", "To address the concern that a more relaxed REMS requirement may expose the brand manufacturers to liability, the bill includes a provision that limits the brand manufacturer's liability against claims arising out of a follow-on product developer's failure to follow adequate safeguards during the development and testing of the generic product."], "subsections": []}]}, {"section_title": "Facilitating Public Production of Follow-On Products: The Affordable Drug Manufacturing Act of 2018", "paragraphs": ["Rather than promoting follow-on product entry by providing production incentives to private parties (as the Hatch-Waxman Act did), or by removing certain barriers to entry for private parties (as the CREATES Act would), the Affordable Drug Manufacturing Act of 2018 (ADMA) would direct the government itself to manufacture certain pharmaceuticals. In particular, ADMA aims to facilitate competition in the market for pharmaceutical products by establishing an Office of Drug Manufacturing within HHS that would oversee the production of certain \"applicable drugs.\"", "ADMA would define an \"applicable drug\" as a drug or biological product that FDA has approved or licensed under specified provisions of the FD&C Act or PHSA, and which would further satisfy one of two conditions. The first condition would require that any patent listed in the Orange Book with respect to such drug has expired, and that any period of regulatory exclusivity granted by FDA under listed provisions of the FD&C Act or PHSA has expired. Moreover, to meet the first condition for an \"applicable drug,\" the drug would have to either (a) not be currently marketed in the United States or (b) be marketed by fewer than three manufacturers. In the case where the drug is being marketed by fewer than three manufacturers, the drug would be required to further meet one of a number of additional criteria such as experiencing a recent price increase or being included on FDA's drug shortage list.", "The second, alternative condition for meeting the \"applicable drug\" definition would be the existence of a license or other authorization of \"patent use\" under a number of provisions of federal law. These provisions include the United States' \"eminent domain\" authority for patents under 28 U.S.C. \u00a7 1498, and the United States' \"march-in rights\" under the Bayh-Dole Act, both of which are discussed above. In short, the \"applicable drug\" definition would generally limit the Office of Drug Manufacturing to producing drugs for which either (1) the applicable patent and regulatory exclusivities have expired (in addition to not being widely marketed currently) or (2) the government already has a patent license under current law. ", "With respect to an applicable drug, the Office would be required to (1) prepare and submit the relevant applications for FDA approval or contract with other entities to do so; (2) acquire the relevant manufacturing rights and then either manufacture the drugs or contract with other entities to do so; (3) sell the drugs at a fair price, which takes into account certain specified factors, and (4) use the money received for the activities of the Office. In addition, the Office would also manufacture or contract with other entities to manufacture active pharmaceutical ingredients (APIs) under specified conditions, including if an API is not readily available from existing suppliers, and set the API's prices based on specified factors. ", "The bill would set forth certain selection criteria for the applicable drugs and require a gradual increase in the number of drugs produced over time. Specifically, the bill would require the Office to prioritize the manufacturing of applicable drugs that would have the greatest impact on (1)\u00a0lowering drug costs to patients, (2) increasing competition and addressing drug shortages, (3) improving the public health, or (4) reducing costs to Federal and State health programs. In the first year following enactment, the Office would be required to manufacture, or enter into contracts with entities to manufacture, at least 15 applicable drugs. During that time, the Office would also be required to begin the manufacturing of insulin. Within three years of enactment, the Office would be required to manufacture, or enter into contracts with entities to manufacture, at least 25 applicable drugs. ", "Beginning three years after the date upon which the Office first begins manufacturing a drug and annually thereafter, the Secretary would also be required to make available for sale the approved FDA application. If the purchaser of the application either fails to market the applicable drug within six months of purchase or increase its price above the fair price (as adjusted by the consumer price index), the Secretary would be required to revoke the purchaser's approved application and resume production of that drug.", "The Office would be required to report to the President and Congress annually on specified topics, including a description of the status of applicable drugs for which manufacturing has been authorized. The bill would authorize the Office to be appropriated such sums as may be necessary."], "subsections": []}, {"section_title": "Reforming Pay-for-Delay Settlements: The Preserve Access to Affordable Generics and Biosimilars Act", "paragraphs": ["As described above, patent litigation can result when generic drug and biosimilar manufacturers seek to market a drug or biological product before patent rights expire by challenging the validity of the brand-name companies' patents and/or their applicability to the follow-on product. Some brand-name companies have resolved or settled such litigation through agreements with the generic manufacturer wherein the brand-name company pays the generic manufacturer a sum of money in return for the generic manufacturer agreeing to wait to enter the market. ", "This practice, referred to as \"reverse payment settlements\" or \"pay-for-delay settlements,\" allows the brand-name company to avoid the risk that its patent will be invalidated, delay the market entry of generic competition, and effectively extend its exclusive right to market the listed drug. A valid patent affords the owner the right to exclude infringing products from the market, but \"an invalidated patent carries with it no such right,\" \"[a]nd even a valid patent confers no right to exclude products or processes that do not actually infringe.\" Because these agreements terminate the litigation, the questions of validity and infringement remain open. ", "The FTC and private parties have alleged that these pay-for-delay agreements entail the brand-name company paying the follow-on applicant \"many millions of dollars to stay out of its market\" and, accordingly, \"have significant adverse effects on competition\" in violation of antitrust laws. The Preserve Access to Affordable Generics and Biosimilars Act (PAAGBA) seeks to limit the ability of drug and biological product manufacturers (i.e., brand-name companies) to pay generic or biosimilar manufacturers to delay their entry into the market."], "subsections": [{"section_title": "Antitrust Law", "paragraphs": ["Pay-for-delay agreements may contravene existing antitrust laws if they have anticompetitive effects. Section 1 of the Sherman Act prohibits \"contracts . . . in restraint of trade or [interstate] commerce.\" The Supreme Court has held that the Sherman Act prohibits only unreasonable restraints, recognizing that all contracts operate as a restraint on trade. Section 5 of the Federal Trade Commission Act (FTCA) further prohibits \"unfair methods of competition,\" \u2014a category that includes (but is not limited to) conduct that violates the Sherman Act. When evaluating agreements for potential antitrust violations, the court focuses its inquiry on \"form[ing] a judgment about the competitive significance of the restraint . . . 'based either (1) on the nature or character of the contracts, or (2) on surrounding circumstances giving rise to the inference or presumption that they were intended to restrain trade and enhance prices.'\" The Supreme Court has recognized that \"reverse payment settlements . . . can sometimes violate the antitrust laws,\" and courts have allowed antitrust litigation challenging certain reverse payment settlements to proceed under existing law. ", "In evaluating the reasonableness of contractual restraints on trade, courts have found that \"some agreements and practices are invalid per se, while others are illegal only as applied to particular situations.\" Courts generally apply a \"rule of reason\" analysis unless the agreement falls within a per se illegal category. However, courts use \"something of a sliding scale in appraising reasonableness\" and, in certain instances, apply a more abbreviated rule of reason analysis to an agreement, referred to as a \"quick look.\" ", "Rule of Reason Analysis . While the Supreme Court has not developed a \"canonical\" analytical framework to guide this totality-of-the-circumstances inquiry, most courts take a similar approach in resolving rule-of-reason cases. Under the standard approach, a Section 1 plaintiff has the initial burden of demonstrating that a challenged restraint has anticompetitive effects in a properly defined product and geographic market\u2014that is, that the restraint causes higher prices, reduced output, or diminished quality in the relevant market. If the plaintiff succeeds in making this showing, the burden then shifts to the defendant to rebut the plaintiff's evidence with a procompetitive justification for the challenged practice. If the defendant is unable to produce such a justification, the plaintiff is entitled to prevail. However, if the defendant rebuts the plaintiff's evidence, the burden then shifts back to the plaintiff to show either (1) that the restraint's anticompetitive effects outweigh its procompetitive effects or (2) that the restraint's procompetitive effects could be achieved in a manner that is less restrictive of competition.", "Per Se Illegal . Certain agreements are considered per se illegal \"without regard to a consideration of their reasonableness\" \"because the probability that these practices are anticompetitive is so high.\" Only restraints that \"have manifestly anticompetitive effects\" and lack \"any redeeming virtue\" are held to be per se illegal. The most common categories are agreements for horizontal price fixing, market allocation, or output limitation. The plaintiff need only demonstrate that the agreement in question falls in one of the per se categories; \"liability attaches without need for proof of power, intent or impact.\"", "Quick Look Analysis . A \"quick look\" is an abbreviated rule of reason analysis. In identifying this intermediate standard of review, the Court has explained that because \"[t]here is always something of a sliding scale in appraising reasonableness,\" the \"quality of proof required\" to establish a Section 1 violation \"should vary with the circumstances.\" As a result, the Court has concluded that in certain cases\u2014specifically, those in which \"no elaborate industry analysis is required to demonstrate the anticompetitive character\" of a challenged agreement\u2014plaintiffs can establish a prima facie case that an agreement is anticompetitive without presenting the sort of market power evidence traditionally required at the first step of rule-of-reason analysis. ", "While there is no universally accepted \"quick look\" framework, several courts of appeals have endorsed an approach to \"quick look\" cases initially adopted by the FTC. Under this approach, if a Section 1 plaintiff can establish that the nature of a challenged restraint makes it likely to harm consumers, the restraint is deemed \"inherently suspect\" and therefore presumptively anticompetitive. A defendant can rebut this presumption by presenting \"plausible reasons\" why the challenged practice \"may not be expected to have adverse consequences in the context of the particular market in question,\" or why the practice is \"likely to have beneficial effects for consumers.\" If the defendant fails to offer such reasons, the plaintiff is entitled to prevail. However, if the defendant does offer such an explanation, the plaintiff must address the justification by either (1) explaining \"why it can confidently conclude, without adducing evidence, that the restraint very likely harmed consumers,\" or (2) providing \"sufficient evidence to show that anticompetitive effects are in fact likely.\" If the plaintiff succeeds in making either showing, \"the evidentiary burden shifts to the defendant to show the restraint in fact does not harm consumers or has 'procompetitive virtues' that outweigh its burden upon consumers.\" However, if the plaintiff fails to rebut the defendant's initial justification, its challenge becomes a full rule-of-reason case.", "In Actavis v. FTC , the Supreme Court held that the rule of reason is the appropriate level of analysis for pay-for-delay agreements. Though it recognized the potential for such agreements to have anticompetitive effects, it acknowledged that \"offsetting or redeeming virtues are sometimes present.\" Such justifications might include \"traditional settlement considerations, such as avoided litigation costs or fair value for services.\" Accordingly, the FTC (or other plaintiff) has to fully prove the anticompetitive effects of a particular agreement before the burden shifts to the defendant. "], "subsections": []}, {"section_title": "Proposed Legislation", "paragraphs": ["PAAGBA seeks to prohibit brand-name manufacturers from compensating follow-on product manufacturers to delay their entry into the market by creating a presumption of illegality, moving away from a rule of reason analysis. The proposed legislation would amend the FTCA to specifically authorize the FTC to initiate enforcement proceedings against parties to \"any agreement resolving or settling, on a final or interim basis, a patent infringement claim, in connection with the sale of a drug product or biological product.\" Such agreements would be presumed to have anticompetitive effects and violate antitrust laws if the brand-name company agrees to provide the generic with \"anything of value,\" including monetary payments or distribution licenses, in exchange for the generic company agreeing \"to limit or forego research, development, manufacturing, marketing, or sales\" of the generic product \"for any period of time.\" The presumption would not attach, however, to agreements where the only consideration from the brand-name company is the right to market the product before relevant patents or exclusivities expire, reasonable litigation expenses, or a covenant not to sue for infringement.", "The presumption would not make the agreement per se illegal. The parties to the agreement would have the opportunity to overcome the presumption with \"clear and convincing evidence\" that (1) the agreement provides compensation \"solely for other goods or services\" from the generic company or (2) the agreement's \"procompetitive benefits . . . outweigh the anticompetitive effects.\" In evaluating this evidence, the fact-finder cannot presume that entry would not have occurred\u2014even without the agreement\u2014until the patent or statutory exclusivity expired. It also cannot presume that allowing entry into the market before the patent or statutory exclusivity period expires is necessarily procompetitive. ", "If the FTC proves that parties to an agreement violated these provisions, the proposed legislation provides for assessment of a civil penalty against each violating party. The civil penalty must be \"sufficient to deter violations,\" but no more than three times the value gained by the respective violating party from the agreement. In the event the NDA holder did not gain demonstrable value from the agreement, the value received by the ANDA filer would be used to calculate the penalty. In calculating the penalty for a particular party, an FTC administrative law judge would consider \"the nature, circumstances, extent, and gravity of violation,\" the impact on commerce of the agreement, and the culpability, history of violations, ability to pay, ability to continue doing business, and profits or compensation gained by all parties (i.e., the NDA or BLA holder(s) and ANDA or biosimilar BLA filer(s)). Any penalties assessed would be in addition to, rather than in lieu of, any penalties imposed by other federal law. The FTC would also be able to seek injunctions and other equitable relief, including cease-and-desist orders. In addition, an ANDA filer that was party to such an agreement would forfeit its 180-day exclusivity awarded for challenging a patent using a paragraph (IV) certification."], "subsections": []}]}, {"section_title": "Compulsory Licensing of IP Rights: The Prescription Drug Price Relief Act of 2019", "paragraphs": ["Some commentators have proposed using the government's authority to grant compulsory licenses on patents as a means to lower prices for pharmaceutical products. This could be accomplished through reliance on existing legal authorities, or through legislation that either expands existing authority or specifies conditions for its exercise. An example of the latter approach is the Prescription Drug Price Relief Act of 2019 (PDPRA). PDPRA would create a process by which the Secretary would review the pricing of all brand-name drugs and biological products to determine whether the prices of any such products are \"excessive.\" The Secretary would determine whether a brand-name drug price is excessive in part based on whether the average price in the U.S. exceeds the median price charged for the drug in five foreign \"reference countries.\" If the Secretary determines that the price of a brand-name pharmaceutical product is excessive, he would have the authority to waive or void any government-granted exclusivities, including FDA regulatory exclusivities, and issue compulsory licenses allowing any person to make, use, sell, or import the excessively priced drug despite applicable patents.", "To accomplish this, the bill would require that NDA and BLA holders submit an annual report to HHS including detailed information about the pricing of \"brand name drugs,\" including information on costs, revenues, R&D expenditures, and the \"average manufacturer price of the drug in the United States and in the reference countries.\" \"Brand name drugs\" are prescription drugs and biologics approved or licensed by FDA under a nonabbreviated regulatory pathway (i.e., not generic drugs or biosimilars) and that are \"claimed in a patent or the use of which is claimed in a patent.\"", "Using this information, the Secretary would, on at least an annual basis, determine whether the price of any brand-name drug is excessive. The bill envisions two ways in which the Secretary would determine that a brand-name drug price is excessive. First, the Secretary would be required to determine that a drug has an excessive price if the \"average [U.S.] manufacturing price\" exceeds \"the median price charged for such drug in the 5 reference countries.\" Second, the Secretary would determine that a drug has an excessive price if \"the price of the drug is higher than reasonable\" taking into account a number of factors, including the value of the drug to patients, R&D costs, health outcomes, revenues, and recent price increases. Members of the public would be able to petition the Secretary to make an excessive price determination with respect to a particular drug under some circumstances.", "If the Secretary determines that the price of a brand-name drug is excessive, the Secretary would be authorized to (1) \"waive or void any government-granted exclusivities\" with respect to such drug, and (2) issue \"open, non-exclusive [compulsory] licenses\" that allow competitors to \"make, use, offer to sell or sell, and import [the brand-name drug] and to rely upon the regulatory test data\" of the brand-name drug manufacturer. \"Government-granted exclusivity\" is defined to explicitly include common FDA regulatory exclusivities as well as \"[a]ny other provision of law that provides for exclusivity . . . with respect to a drug.\" The compulsory patent license, which the bill calls a \"excessive drug price license,\" would permit the Secretary to authorize third parties to make and use the excessively priced drug despite patents that \"claim[] a brand name drug or the use of a brand name drug.\" It would also allow third parties to \"rely upon regulatory test data for such drug.\" However, any entity that accepts this compulsory license would be required to pay a \"reasonable royalty\" to the applicable patent holder and any NDA holder whose regulatory exclusivity was voided under the bill's provisions. The royalty rate would either be based on an average rate for pharmaceuticals estimated by the Internal Revenue Service or set by the Secretary based on a number of factors.", "Any party accepting a compulsory license for an excessively priced drug would still need to apply for FDA approval (or licensure) in order to market a generic (or biosimilar) version. Accordingly, the bill would require FDA to expedite review of such applications and \"act within 8 months.\" During the period between the Secretary's excessive price determination and follow-on product approval, the bill would prohibit the brand-name drug manufacturer from increasing the price of the drug or biologic.", "In addition to excessive price determinations, the Secretary would use the information received pursuant to the bill to establish a \"comprehensive, up-to-date database\" of brand-name drugs and excessive price determinations. Further, the Secretary would be required to submit an annual report to Congress describing its excessive price reviews and determinations for the preceding year. The Secretary would be required to make both the report and the database available to the public online.", "Compulsory licensing provisions, like those of the PDPRA, may implicate the Takings Clause of the U.S. Constitution, to the extent that they retroactively affect property rights. The Takings Clause provides that private property shall not \"be taken for a public use, without just compensation.\" Presuming that patents are treated as \"private property\" under the Fifth Amendment, and that the Secretary invoked the compulsory licensing authority, courts may be asked to address: (1) whether compulsory licensing provisions constitute a \"taking\" of private property; (2) whether any such taking was for \"public use\"; and (3) if so, whether the compensation (if any) provided to the rights holder suffices to provide the \"just compensation\" required by the Constitution. Legislative provisions that retroactively void regulatory exclusivities may raise analogous Takings Clause issues."], "subsections": []}, {"section_title": "Limiting Regulatory Exclusivities Based on Price Increases: The FLAT Prices Act469", "paragraphs": ["Just as compulsory licensing proposals may limit patent rights based on pharmaceutical product pricing, other proposed reforms would limit FDA regulatory exclusivities based on pricing behavior. For example, the FLAT Prices Act aims to discourage pharmaceutical product manufacturers from significantly increasing the prices of their products. The bill would shorten the relevant periods of regulatory exclusivity for a pharmaceutical product if the manufacturer increases the price by certain percentages within specified time periods. Specifically, the regulatory exclusivity period would be shortened by 180 days if the price increases by more than: (1) 10% over a one-year period; (2) 18% over a two-year period, or (3) 25% over a three-year period. For every price increase that is 5% over the 10%, 18%, or 25% thresholds for these three respective time periods, the exclusivity period would be shortened by an additional 30 days (i.e., a total of 210 days).", "The bill would also require manufacturers to report any relevant price increases described above to the Secretary within 30 days of the increase. If a manufacturer fails to timely submit the report, the exclusivity period for the relevant drug or biological product would be shortened by an additional 30 days for each day that the report is late.", "The bill would authorize the Secretary to waive or decrease the reduction in the exclusivity period if (1) the manufacturer submits a report on the price increase that contains all the relevant information, and, (2) based on the report, the Secretary determines that \"the price increase is necessary to enable production of the drug, does not unduly restrict patient access to the drug, and does not negatively impact public health.\""], "subsections": []}, {"section_title": "Orange Book and Purple Book Reform: The Biologic Patent Transparency Act478", "paragraphs": ["Another potential reform under consideration concerns patent listings and other information included in FDA's lists of approved chemical drugs (the Orange Book ) and biologics (the Purple Book ). One such proposal is the Biologic Patent Transparency Act (BPTA), which would amend the PHSA and patent law to do three principal things: (1) require that BLA applicants (and current BLA holders) provide patent information to FDA; (2) mandate by statute that FDA publish and maintain the Purple Book as a single, searchable list; and (3) require that patent and regulatory exclusivity information be included in the Purple Book . The overall effect would be to make the Purple Book more similar to the Orange Book in some respects. The stated aim of the bill is to curtail patent thickets through greater transparency and limits on the enforcement of late-listed biologic patents.", "More specifically, the BPTA requires that, within 30 days, the holder of an approved BLA must submit to FDA \"a list of each patent required to be disclosed.\" The patents that would be required to be disclosed include \"any patent for which the holder of [an approved BLA] believes that a claim of patent infringement could reasonably be asserted by the [BLA] holder, or patent owner that has granted an exclusive license to the holder\" if \"a person not licensed by the holder engaged in the making, using, offering to sell, selling, or importing\" the biological product at issue. The bill would also change the \"patent dance\" to require that (if the patent dance is initiated) the list of relevant patents that the reference product sponsor provides to the biosimilar applicant must be drawn from the list provided to FDA. Finally, the bill would enforce its patent listing requirement through a new \"list it or lose it\" provision, providing that the owner of a patent that \"should have been included in the list\" given to FDA, but \"was not timely included in such list, may not bring an action under this section for infringement of the patent.\"", "The BPTA would codify FDA's practice of publishing the Purple Book and further require that the Purple Book include more information that it does presently, in a more accessible form. In particular, under the bill, the Purple Book would have to include: ", "the official and brand name of each licensed biological product; the date of licensure for each licensed biological product; information about the marketing status, dosage, and route of administration of the biological product; if the product is a biosimilar or interchangeable, the relevant reference product (i.e., the brand-name biologic); and any determination related to biosimilarity or interchangeability for the biological product.", "Notably, FDA would be required to include patent information, information about whether the product is subject to a period of regulatory exclusivity, and when such exclusivity expires, and to make all the information publicly available as a \"single, easily searchable list.\" Currently, the Purple Book lacks any patent information, contains only partial information on regulatory exclusivities, and is published as two separate files as opposed to a single searchable database."], "subsections": []}]}, {"section_title": "Conclusion", "paragraphs": ["Concerns about perceived high prices for prescription drugs and other pharmaceutical products implicate a complex set of legal regimes, including patent law, FDA law, and specialized patent dispute procedures for drugs and biological products. Much of the debate over allegedly high pharmaceutical prices is fundamentally a matter of public policy: in particular, finding the appropriate balance between providing incentives to create innovative new medicines versus the costs those incentives may impose on the public in the form of higher prices. Nonetheless, knowledge of the workings of the existing legal regimes governing IP rights in pharmaceutical products is necessary to fully understand the implications of the variety of legislative approaches to reduce pharmaceutical prices."], "subsections": []}]}}
{"id": "R44175", "title": "Navy Lasers, Railgun, and Gun-Launched Guided Projectile: Background and Issues for Congress", "released_date": "2019-05-17T00:00:00", "summary": ["Three new ship-based weapons being developed by the Navy\u2014solid state lasers (SSLs), the electromagnetic railgun (EMRG), and the gun-launched guided projectile (GLGP), also known as the hypervelocity projectile (HVP)\u2014could substantially improve the ability of Navy surface ships to defend themselves against surface craft, unmanned aerial vehicles (UAVs), and eventually anti-ship cruise missiles (ASCMs).", "The Navy has been developing SSLs for several years, and in 2014 installed on a Navy ship a prototype SSL called the Laser Weapon System (LaWS) that was capable of countering surface craft and UAVs. The Navy is now developing SSLs with improved capability for countering surface craft and UAVs, and eventually a capability for countering ASCMs. Navy efforts to develop these more capable lasers include", "the Solid State Laser Technology Maturation (SSL-TM) effort; the Ruggedized High Energy Laser (RHEL); the Optical Dazzling Interdictor, Navy (ODIN); the Surface Navy Laser Weapon System (SNLWS) Increment 1, also known as the high-energy laser with integrated optical dazzler and surveillance (HELIOS); and the High Energy Laser Counter-ASCM Program (HELCAP).", "The Navy refers to the first four efforts above collectively as the Navy Laser Family of Systems (NFLoS). Under the Navy's laser development approach, NFLOS and HELCAP, along with technologies developed by other parts of DOD, are to support the development of future, more capable shipboard lasers.", "The Navy has been developing EMRG for several years. It was originally conceived as a naval surface fire support (NSFS) weapon for supporting Marines and other friendly forces ashore. Subsequently, it was determined that ERGM could also be used for air and missile defense, which strengthened interest in ERGM development. More recently, it was determined that the projectile to be fired by ERGM could also be fired by existing powder-propellant guns, including 5-inch and 155 mm guns on Navy cruisers and destroyers, and 155 mm artillery guns operated by the Army and Marine Corps. When fired from power guns, the projectile does not fly as quickly as it does when fired from an ERGM, but it still flies quickly enough to be of use as an air-defense weapon. The concept of firing the projectile from powder guns is referred to as GLGP and HVP. One potential advantage of HVP/GLGP is that, once developed, it can be rapidly deployed on Navy cruisers and destroyers and in Army and Marine Corps artillery units, because the powder guns in question already exist.", "In addition to the question of whether to approve, reject, or modify the Navy's FY2020 funding requests for SSLs, ERGM, and HVP/GLGP, issues for Congress include the following:", "whether the Navy is moving too quickly, too slowly, or at about the right speed in its efforts to develop these weapons; the Navy's plans for transitioning these weapons from development to procurement and fielding aboard Navy ships; and whether Navy the Navy's shipbuilding plans include ships with appropriate amounts of space, weight, electrical power, and cooling capacity to accommodate these weapons."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": [], "subsections": [{"section_title": "Issue for Congress", "paragraphs": ["This report provides background information and issues for Congress on three new ship-based weapons being developed by the Navy\u2014solid state lasers (SSLs), the electromagnetic railgun (EMRG), and the gun-launched guided projectile (GLGP), also known as the hypervelocity projectile (HVP)\u2014that could substantially improve the ability of Navy surface ships to defend themselves against surface craft, unmanned aerial vehicles (UAVs), and eventually anti-ship cruise missiles (ASCMs).", "Any one of these three new weapons, if successfully developed and deployed, might be regarded as a \"game changer\" for defending Navy surface ships against enemy missiles and UAVs. If two or three of them are successfully developed and deployed, the result might be considered not just a game changer, but a revolution. Rarely has the Navy had so many potential new types of surface-ship air-defense weapons simultaneously available for development and potential deployment.", "The issue for Congress is whether to approve, reject, or modify the Navy's acquisition strategies and funding requests for these three potential new weapons. Congress's decisions on this issue could affect future Navy capabilities and funding requirements and the defense industrial base.", "This report supersedes an earlier CRS report that provided an introduction to potential Navy shipboard lasers. Another CRS report provides an overview of the strategic and budgetary context in which the programs covered in this report, and other Navy programs, may be considered."], "subsections": []}, {"section_title": "Scope of Report", "paragraphs": ["High-energy lasers (HELs) and railguns are being developed by multiple parts of the Department of Defense (DOD), not just the Navy. HELs, railguns, and GLGP have potential application to military aircraft and ground forces equipment, not just surface ships. And SSLs, EMRG, and GLGP could be used for performing missions other than defense against missiles, UAVs, and surface craft. In particular for the Navy and Marine Corps, EMRG could provide the Navy with a new naval surface fire support (NSFS) weapon for attacking land targets in support of Marines or other friendly ground forces ashore. This report focuses on Navy efforts to develop SSLs, EMRG, and GLGP for potential use in defending Navy surface ships against missiles and UAVs. "], "subsections": []}]}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "Strategic and Budgetary Context", "paragraphs": [], "subsections": [{"section_title": "Concern About Survivability of Navy Surface Ships", "paragraphs": ["Although Navy surface ships have a number of means for defending themselves against missiles and UAVs, some observers are concerned about the survivability of Navy surface ships in potential combat situations against adversaries, such as China, that are armed with large numbers of missiles, including advanced models, and large numbers of UAVs. Concern about this issue has led some observers to conclude that the Navy's surface fleet in coming years might need to avoid operating in waters that are within range of these weapons, or that the Navy might need to move toward a different and more distributed fleet architecture that relies less on larger surface ships and more on smaller surface ships, unmanned vehicles, and submarines. Perspectives on whether it would be cost effective to spend money on the procurement and operation of larger surface ships might be influenced by views on whether such ships can adequately defend themselves against enemy missiles and UAVs."], "subsections": []}, {"section_title": "Depth of Magazine and Cost Exchange Ratio", "paragraphs": ["Two key limitations that Navy surface ships currently have in defending themselves against missiles and UAVs are limited depth of magazine and unfavorable cost exchange ratios. Limited depth of magazine refers to the fact that Navy surface ships can use surface-to-air missiles (SAMs) and their Close-in Weapon System (CIWS) Gatling guns to shoot down only a certain number of enemy missiles and UAVs before running out of SAMs and CIWS ammunition \u2014a situation (sometimes called \"going Winchester\") that can require a ship to withdraw from battle, spend time travelling to a safe reloading location (which can be hundreds of miles away), and then spend more time traveling back to the battle area.", "Unfavorable cost exchange ratios refer to the fact that a SAM used to shoot down a missile or UAV can cost the Navy more (perhaps much more) to procure than it cost the adversary to build or acquire the missile or UAV. Procurement costs for Navy air-defense missiles range from several hundred thousand dollars per mission to a few million dollars per missile, depending on the type. In combat scenarios against an adversary with a limited number of missiles or UAVs, an unfavorable cost exchange ratio can be acceptable because it saves the lives of Navy sailors and prevents very expensive damage to Navy ships. But in combat scenarios (or an ongoing military capabilities competition) against a country such as China that has many missiles and UAVs and a capacity for building or acquiring many more, an unfavorable cost exchange ratio can become a very expensive\u2014and potentially unaffordable\u2014approach to defending Navy surface ships against missiles and UAVs, particularly in a context of constraints on U.S. defense spending and competing demands for finite U.S. defense funds.", "SSLs, EMRG, and GLGP offer a potential for dramatically improving depth of magazine and the cost exchange ratio:", "D epth of magazine . SSLs are electrically powered, drawing their power from the ship's overall electrical supply, and can be fired over and over, indefinitely, as long as the laser continues to work and the ship has fuel to generate electricity. EMRG projectiles and GLGPs can be stored by the hundreds in a Navy surface ship's weapon magazine. C ost exchange ratio . An SSL can be fired for a marginal cost of less than one dollar per shot (which is the cost of the fuel needed to generate the electricity used in the shot), while GLGP reportedly had an estimated unit procurement cost in 2018 of about $85,000.", "High-energy SSLs that have enough beam power to counter small boats and UAVs, but not enough to counter missiles, could nevertheless indirectly improve a ship's ability to counter missiles by permitting the ship to use fewer of its SAMs for countering UAVs, and more of them for countering missiles. Similarly, even though GLGPs fired from 5-inch powder guns might not be able to counter anti-ship ballistic missiles (ASBMs), they could indirectly improve a ship's ability to counter ASBMs by permitting the ship to use fewer of its SAMs for countering ASCMs and more of its SAMs for countering ASBMs."], "subsections": []}]}, {"section_title": "Navy Shipboard Lasers in Brief", "paragraphs": [], "subsections": [{"section_title": "SSLs in General", "paragraphs": ["The Navy in recent years has leveraged both significant advancements in industrial SSLs and decades of research and development work on military lasers done by other parts of DOD to make substantial progress toward deploying high-energy SSLs on Navy surface ships. Navy surface ships would use high-energy SSLs initially for jamming or confusing (i.e., \"dazzling\") intelligence, surveillance, and reconnaissance (ISR) sensors, for countering small boats and UAVs, and potentially in the future for countering enemy missiles as well. High-energy SSLs on Navy ships would generally be short-range defensive weapons\u2014they would generally counter targets at ranges of about one mile to perhaps eventually a few miles.", "In addition to a low marginal cost per shot and deep magazine, potential advantages of shipboard lasers include fast engagement times, an ability to counter radically maneuvering missiles, an ability to conduct precision engagements, and an ability to use lasers for graduated responses ranging from detecting and monitoring targets to causing disabling damage. Potential limitations of shipboard lasers relate to line of sight; atmospheric absorption, scattering, and turbulence (which prevent shipboard lasers from being all-weather weapons); an effect known as thermal blooming that can reduce laser effectiveness; countering saturation attacks; possible adversary use of hardened targets and countermeasures; and risk of collateral damage, including damage to aircraft and satellites and permanent damage to human eyesight, including blinding. These potential advantages and limitations are discussed in greater detail in the Appendix ."], "subsections": []}, {"section_title": "Earlier Developments Regarding Navy SSLs", "paragraphs": ["Earlier developments in the Navy's efforts to develop high-energy SSLs include the following:", "Between 2009 and 2012, the Navy successfully tested a prototype SSL called the Laser Weapon System (LaWS) against UAVs in a series of engagements that took place initially on land and subsequently on a Navy ship at sea. LaWS had a reported beam power of 30 kilowatts (kW). Between 2010 and 2011, the Navy tested another prototype SSL called the Maritime Laser Demonstration (MLD) in a series of tests that culminated with an MLD installed on a Navy ship successfully engaging a small boat. In August 2014, the Navy installed LaWS on the USS Ponce (pronounced pon-SAY)\u2014a converted amphibious ship that operated in the Persian Gulf as an interim Afloat Forward Staging Base (AFSB[I]) \u2014to conduct evaluation of shipboard lasers in an operational setting against swarming boats and swarming UAVs ( Figure 1 and Figure 2 ). In December 2014, the Navy declared LaWS on the Ponce to be an \"operational\" system . Ponce remained in the Persian Gulf until it was relieved in September 2017 by its replacement, the new-construction Expeditionary Sea Base ship Lewis B. Puller (ESB-3). Ponce returned to the United States and was decommissioned in October 2017, at which point LaWS was removed from Ponce. LaWS is to be refurbished to serve as a land-based test asset for the HELIOS effort discussed below."], "subsections": []}, {"section_title": "Current Navy SSL Development Efforts", "paragraphs": ["The Navy is now developing SSLs with improved capability for countering surface craft and UAVs, and eventually a capability for countering ASCMs. Navy efforts to develop these more capable lasers include", "the Solid State Laser Technology Maturation (SSL-TM) effort; the Ruggedized High Energy Laser (RHEL); the Optical Dazzling Interdictor, Navy (ODIN); the Surface Navy Laser Weapon System (SNLWS) Increment 1, also known as the high-energy laser with integrated optical dazzler and surveillance (HELIOS); and the High Energy Laser Counter-ASCM Program (HELCAP).", "As shown in Figure 3 , the Navy refers to the first four efforts above collectively as the Navy Laser Family of Systems (NFLoS). As also shown in Figure 3 , under the Navy's laser development approach, NFLOS and HELCAP, along with technologies developed by other parts of DOD, are to support the development of future, more capable lasers referred to as SNLWS Increment 2 and SNLWS Increment 3. The Navy's FY2020 budget submission states that \"HELCAP will leverage the knowledge gained in the Navy Laser Family of Systems (NLFoS) efforts\u2026. This leveraged knowledge and new HELCAP technical solutions to the C-ASCM problem will enable a fully informed decision to rapidly field an integrated, fleet ready, HEL Weapon.\""], "subsections": [{"section_title": "SSL-TM", "paragraphs": ["As a follow-on effort to LaWS and MLD, the Navy initiated the SSL Technology Maturation (SSL-TM) program, in which industry teams led by BAE Systems, Northrop Grumman, and Raytheon, among others, competed to develop a shipboard laser with a beam power of up to 150 kW, which would provide increased effectiveness against small boats and UAVs. Technology developed in the SSL-TM effort will support development of the SNLWS Increment 2 system.", "On October 22, 2015, DOD announced that it had selected Northrop Grumman as the winner of the SSL-TM competition. Figure 4 is an Office of Naval Research (ONR) graphic illustration of the SSL-TM system and its components as installed on the Navy's Self Defense Test Ship (the ex-USS Paul F. Foster [DD-964], an old Spruance [DD-963] class destroyer). In January 2018, the Navy announced that it intended to install the SSL-TM laser on the newly built amphibious ship USS Portland (LPD-27). Sea testing of SSL-TM on the Portland is scheduled for the fourth quarter of FY2019."], "subsections": []}, {"section_title": "RHEL", "paragraphs": ["RHEL reportedly is \"a 150-kilowatt laser that will apparently employ 'different laser architectures' that will handle more powerful laser beams eventually.\" The Navy's FY2020 budget submission states that Budget Activity 3 development (i.e., advanced technology development) associated with RHEL was completed in FY2019; that HELCAP, discussed below, was previously known as RHEL Phase II; and that HELCAP will leverage, among other things, \"Alternative Laser Sources for higher powers, also known as the Ruggedized High Energy Laser (RHEL) activities.\" Congress added about $11.6 million in development funding for RHEL in FY2018; the funding was used for \"long lead procurement for the beam director required to support integrated laser weapons system testing, mission analysis, lethality and defeat of anti-ship cruise missile threats.\""], "subsections": []}, {"section_title": "SNLWS Increment 1 (HELIOS)", "paragraphs": ["SNLWS Increment 1 is called HELIOS, an acronym meaning high energy laser with integrated optical dazzler and surveillance. The HELIOS effort is focused on rapid development and rapid fielding of a 60 kW-class high-energy laser (with growth potential to 150 kW) and dazzler in an integrated weapon system, for use in countering UAVs, small boats, and ISR sensors, and for combat identification and battle damage assessment.", "Following a full and open competition based on a request for proposals (RFP) released on June 18, 2017, the Navy on January 26, 2018, awarded Lockheed Martin a $150 million contract for the development, manufacture, and delivery of two HELIOS systems\u2014one for installation on a Navy Arleigh Burke (DDG-51) class Aegis destroyer, the other for land-based testing\u2014by FY2020. The contract includes options for up to 14 additional HELIOS systems that if exercised could increase the total value of the contract to $942.8 million. Figure 5 and Figure 6 show an artist's renderings of HELIOS installed on a DDG-51.", "A March 21, 2019, press report states:", "The Navy is planning to install the High Energy Laser and Integrated Optical-dazzler with Surveillance (HELIOS) directed energy (DE) system on a DDG-51 Flight IIA destroyer by FY 2021 as it learns how to integrate laser weapons on its ships, a top official said Wednesday [March 20].", "Rear Adm. Ron Boxall, director of Navy Surface Warfare, called characterized the Navy's plans to integrate directed energy weapons as \"yes we are going to burn the boats if you will, and move forward with this technology.\"", "Boxall said the Navy plans to install a HELIOS system on a West Coast DDG-51 in 2021. \"It's already POM'ed in there to do that, hopefully a West Coast destroyer in '21, onboard. We'll be testing it and then putting it aboard the ship.\"", "The Lockheed Martin [LMT] HELIOS will consist of a 60-150 kW single laser beam that can target unmanned aircraft systems (UAS) and small boats. The HELIOS is expected to be integrated on to a destroyer for its lifetime.", "The weapon will also feed intelligence, surveillance and reconnaissance (ISR) data into the ship's combat system and provide a counter-UAS (C-UAS) ISR dazzler capability. The dazzler uses a lower power setting to confuse or reduce ISR capabilities of a hostile UAS.", "Boxall said he is confident increased DE power outputs will come, but he is not yet confident in integrating them into existing combat systems.", "\"Because if I'm going to burn the boats, I'm going to replace something that I have on ships today doing that mission with these weapons. And if I do that, I've got to be confident that it's going to work and it's going to cover those missions.\"", "He added that if a ship has a new DE laser weapon that will both sense and kill targets, \"then I have to make sure it integrates with the other things that I have on my ship that can sense and kill\u2014namely the Aegis weapon system. And so to me the most important aspect of the integrated laser is its integration into my existing combat system, period.\"", "While Boxall is confident the Navy can continue to increase laser weapon power on ship, one major limiting factor is power margin.", "The first HELIOS going on a destroyer will go on a Flight IIA ship, but the Flight III as a downside that it uses almost the same hull but focuses more power generation on the new AN/SPY-6 Air and Missile Defense Radar (AMDR). The AMDR will better detect air and missile threats, but \"we are out of schlitz with regard to power. We used a lot of power for that and we don't have as much\" extra for additional functions.", "Boxall said to get a HELIOS on a DDG-51 Flight III, the Navy will have to either remove something or look at \"very aggressive power management.\" This is part of the calculus in the successor to the DDG-51, the Large Surface Combatant (LSC)\u2026.", "Last year, the Navy awarded Lockheed Martin a $150 million contract to develop two HELIOS systems in early 2018, with one to integrate on a DDG-51 and one for land-based testing\u2026.", "However, the FY '19 defense authorization bill restricted the Navy to only one HELIOS per fiscal year without first receiving a detailed contracting and acquisition strategy report.", "The HELIOS will not merely be bolted on the ship, but integrated into its Aegis combat system to direct the DE weapon\u2026.", "More recently, in January Lockheed Martin officials said they plan to put HELIOS through a production design review in 2019\u2026."], "subsections": []}]}, {"section_title": "Summary of FY2020 Activities for SSL-TM, RHEL, and HELCAP", "paragraphs": [" Figure 7 shows a summary of the Navy's proposed FY2020 activities for SSL-TM, RHEL, and HELCAP."], "subsections": []}, {"section_title": "Electromagnetic Railgun (EMRG)", "paragraphs": ["The Navy since 2005 has been developing EMRG, a cannon that uses electricity rather than chemical propellants (i.e., gunpowder charges) to fire a projectile. In EMRG, \"magnetic fields created by high electrical currents accelerate a sliding metal conductor, or armature, between two rails to launch projectiles at [speeds of] 4,500 mph to 5,600 mph,\" or roughly Mach 5.9 to Mach 7.4 at sea level. Like SSLs, EMRG draws its power from the ship's overall electrical supply. The Navy originally began developing EMRG as a naval surface fire support (NSFS) weapon for supporting U.S. Marines operating ashore, but subsequently determined that the weapon also has potential for defending against missiles.", "Following tests with early Navy-built EMRG prototypes, the Navy funded the development of two industry-built EMRG prototype demonstrators, one by BAE Systems and the other by General Atomics (see Figure 8 and Figure 9 ).", "The two industry-built prototypes are designed to fire projectiles at energy levels of 20 to 32 megajoules, which is enough to propel a projectile 50 to 100 nautical miles. (Such ranges might refer to using the EMRG for NSFS missions. Intercepts of missiles and UAVs might take place at much shorter ranges.) The Navy began evaluating the two industry-built prototypes in 2012.", "A February 27, 2017, press report stated that", "a new full and open competition is in the works for the railgun. While the Office of Naval Research and several companies will continue their development of the railgun and projectile, [Naval Sea Systems Command spokeswoman Christianne] Witten said the program office is planning to hold a new competition for the technologies prior to them entering the engineering and manufacturing development phase of the acquisition process, known as \"milestone B.\"", "\"The railgun acquisition program will avoid being 'locked in' to proprietary solutions for key system components,\" Witten wrote. \"It is the Navy's objective to leverage the industry competition that ONR initially held for the subsystems of pulse power, barrel technology maturation and projectiles. Another round of system full and open competition is planned at milestone B.\"", "A July 21, 2017, press report stated the following:", "The U.S. Office of Naval Research (ONR) is proceeding in its electromagnetic railgun research and expects to reach a capacity of 10 rounds per minute with a 32 Mega-Joule muzzle launch for each round, officials said Thursday [July 20].", "Dr. Thomas Beutner, department head of Code 35 in ONR's Naval Air Warfare and Weapons Department, told reporters that the railgun research is going well and has made several scientific advances....", "Tom Boucher, program officer at Code 35 said the ONR S&T program calls for a maturation of achieving 10 rounds per minute at 32 megajoules by fiscal year 2019. To reach that goal, ONR is building a series of barrels and incorporating lessons learned. They will achieve the full rep-rate and muzzle energy in 2018 and in 2019 demonstrate the longest life of a barrel at that muzzle energy.", "After reaching these goals the S&T portion of the program should be complete. Separately the Navy's Program Executive Office Integrated Warfare Systems (PEO IWS) will look at shipboard integration if the Navy decides to do that and that office will make any follow-on acquisition decisions, Boucher said....", "ONR's rep-rate composite launcher, which can repeat launches quicker than other test devices, will be able to achieve the 10 round-per-minute rate the program seeks by later this summer. ONR plans to gradually ramp up this launcher to higher rep-rate and energy levels through the end of the year, Beutner said.", "He also talked about how ONR has demonstrated the ability to use pulse power, having fired 5,000 pulse shots. For the rep-rate firing, ONR has to use a larger energy farm or capacitor base resulting in pulse power using over one megajoule per cubic meter energy density.", "\"That's an important scientific advance in terms of energy density in those capacitors, but even more important that's a size factor that will fit into the ships. Both crewed combatants and future combatants,\" Beutner said.", "A March 9, 2018, press report states the following:", "Following a flurry of reports in December predicting the Navy's $500 million electromagnetic railgun experiment was dead on arrival, the chief of Naval Operations told lawmakers this week that the death of the program was greatly exaggerated.", "\"[We are] fully invested in railgun; we continue to test it,\" Adm. John Richardson told the House Appropriations subcommittee on defense during a Wednesday hearing on Navy and Marine Corps budget issues. \"We've demonstrated it at lower firing rates and ... shorter ranges. Now we have to do the engineering to, sort of, crank it up and get it at the designated firing rates, at the 80- to 100-mile range.\"...", "Business Insider reported in December that the Pentagon's Strategic Capabilities office was shifting research efforts from the railgun, which uses electromagnetic energy to shoot large projectiles at speeds of up to 4,500 miles per hour, to broader high-velocity projectile study.", "The Navy has never acknowledged a loss of interest in railgun technology, however. Last July, officials with the Office of Naval Research told reporters that the power behind the gun would be increased to 32 megajoules over the summer, giving the weapon a range of 110 miles....", "While Richardson acknowledged the challenges and said Navy brass were \"very conscious\" of reported Chinese achievements in railgun technology, he maintained the service was still invested in the program."], "subsections": []}, {"section_title": "Gun-Launched Guided Projectile (GLGP)", "paragraphs": ["As the Navy was developing EMRG, it realized that the guided projectile being developed for EMRG, which weighs about 23 pounds, could also be fired from 5-inch and 155mm powder guns. When fired from EMRG, the projectile reaches hypervelocity (i.e., Mach 5+) speeds, and thus came to be known as the hypervelocity projectile (HVP). When fired from a power gun, the projectile flies quickly, but not as quickly as it does when fired from EMRG. In addition, whereas the Navy's original concept was to use the EMRG projectile for both EMRG and powder guns\u2014and might still decide to do that\u2014the Navy now states that the high-speed projectile fired from powder guns might instead be a different projectile. For both of these reasons, the high-speed projectile for powder guns, which was originally called HVP, is now referred to by the Navy as the gun-launched guided projectile (GLGP). The Navy states that", "The terms HVP and GLGP are both still used. Hyper Velocity Projectile (HVP) is the term used in the current development programs that [DOD's] SCO [Strategic Capabilities Office] and [Office of naval Research] ONR have ongoing with BAE Systems. Gun Launch Guided Projectile (GLGP) is the term that describes the future acquisition program and the associated performance specification that industry will compete for. GLGP is the RDT&E [research, development, test, and evaluation] budget program element [i.e., line item] covering all guided projectile development effort including HVP.", "As noted earlier, GLGP had an estimated unit procurement cost in 2018 of about $85,000. Figure 10 and Figure 11 show the then-named HVP. ", "One advantage of GLGP is that the 5-inch and 155mm guns from which it would be fired are already installed on Navy cruisers and destroyers, creating a potential for rapidly proliferating GLGP through the cruiser-destroyer force, once development of GLGP is complete and the weapon has been integrated into cruiser and destroyer combat systems. Navy cruisers each have two 5-inch guns, Navy Arleigh Burke (DDG-51) class destroyers each have one 5-inch gun, and the Navy's three new Zumwalt class (DDG-1000) destroyers each have two 155mm guns. Figure 12 shows launch packages for the then-named HVP configured for 5-inch guns, 155mm guns, and EMRG.", "In September 2012, when the concept was to use the then-named HVP as a common projectile for both EMRG and powder guns (which might still happen), the Navy described the projectile as", "a next generation, common, low drag, guided projectile capable of completing multiple missions for gun systems such as the Navy 5-Inch, 155-mm, and future railguns. Types of missions performed will depend on gun system and platform. The program goal is to address mission requirements in the areas of Naval Surface Fire Support, Cruise Missile Defense, Anti-Surface Warfare, and other future Naval mission areas. Mission performance will vary from gun system, launcher, or ship. HVP's low drag aerodynamic design enables high velocity, maneuverability, and decreased time-to-target. These attributes coupled with accurate guidance electronics provide low cost mission effectiveness against current threats and the ability to adapt to air and surface threats of the future. ", "The high velocity compact design relieves the need for a rocket motor to extend gun range. Firing smaller more accurate rounds improves danger close/collateral damage requirements and provides potential for deeper magazines and improved shipboard safety. Responsive wide area coverage can be achieved using HVP from conventional gun systems and future railgun systems. ", "The modular design will allow HVP to be configured for multiple gun systems and to address different missions. The hypervelocity projectile is being designed to provide lethality and performance enhancements to current and future gun systems. A hypervelocity projectile for multiple systems will allow for future technology growth while reducing development, production, and total ownership costs.", "Research Challenges & Opportunities [include]:", "-- High acceleration tolerant electronic components ", "-- Lightweight, high strength structural composites", "-- Miniature, high density electronic components", "-- Safe high energy propellants compatible with shipboard operations ", "-- Aerothermal protection systems for flight vehicles", "When fired from 5-inch powder guns, GLGP reportedly achieves a speed of roughly Mach 3, which is roughly half the speed it achieves when fired from EMRG, but more than twice the speed of a conventional 5-inch shell fired from a 5-inch gun. This is apparently fast enough for countering at least some ASCMs. The Navy states that \"The HVP\u2014combined with the MK 45 [5-inch gun] \u2014will support various mission areas including naval surface fire support, and has the capacity to expand to a variety of anti-air threats, [and] anti-surface [missions], and could expand the Navy's engagement options against current and emerging threats.\"", "A December 21, 2016, opinion column states the following:", "Now the Navy is acquiring rail guns that use such energy to fire 15- to 25-pound, 18-inch projectiles at 5,000 miles per hour. They hit with the impact of a train slamming into a wall at 100\u2009miles per hour. The high-speed, hence high-energy projectiles, which cost just $25,000, can radically improve fleet-protection capabilities: A barrage of them could counter an enemy's more expensive anti-ship missiles.", "The daunting challenge posed by defense against the proliferating threat of ballistic missiles is that it is prohibitively expensive to be prepared to intercept a swarm of incoming missiles. New technologies, however, can revolutionize defense against ballistic missiles because small, smart projectiles can be inexpensive. It takes 300 seconds to pick up such a launched missile's signature, the missile must be tracked and a vector calculated for defensive projectiles. A single 25-pound projectile can dispense more than 500 three-gram tungsten impactors and be fired at hypervelocity by electromagnetic energy. Their impact force\u2014their mass times the square of their velocity\u2014can destroy expensive missiles and multiple warheads.", " Figure 13 is a slide showing the potential application of the then-named HVP to 5-inch power guns, 155mm powder guns, and EMRG. The first line of the slide in Figure 13 , for example, discusses then-named HVP's use with 5-inch powder guns, stating that it uses a high-explosive (HE) warhead for the NSFS mission; that a total of 113 5-inch gun barrels are available in the fleet (which could be a reference to 22 cruisers with two guns each, and 69 destroyers with one gun each); and that as a game-changing capability, it is guided and can be used at ranges of up to 26 nautical miles to 41 nautical miles for NSFS operations, for countering ASCMs, and for anti-surface warfare (ASuW) operations (i.e., attacking surface ships and craft).", " Figure 14 is a not-to-scale illustration of how then-named HVPs fired from EMRGs and 5-inch guns could be used to counter various targets, including ASCMs and ASBMs."], "subsections": [{"section_title": "DOD Interest in GLGP", "paragraphs": ["GLGP emerged as a program of particular interest to DOD, which has exploring the potential for using the weapon across multiple U.S. military services. An April 11, 2016, press report states the following:", "The Pentagon wants to take a weapon originally designed for offense, flip its punch for defense and demonstrate by 2018 the potential for the Army and Navy to conduct missile defense of bases, ports and ships using traditional field guns to fire a new hypervelocity round guided by a mobile, ground variant of an Air Force fighter aircraft radar.", "The Strategic Capabilities Office [SCO] is working with the Army, Navy and Air Force to craft a Hypervelocity Gun Weapon System that aims, in part, to provide China and Russia an example of a secret collection of new U.S. military capabilities the Defense Department is bringing online in an effort to strengthen conventional deterrence.", "\"It is a fantastic program,\" Will Roper, [then-]Strategic Capabilities Office director, said in a March 28 interview with reporters, who said the project aims \"to completely lower the cost of doing missile defense\" by defeating missile raids at a lower cost per round and, as a consequence, imposing higher costs on attackers.", "A May 2, 2016, press report states the following:", "\"We thought rail guns were something we were really going to go after, but it turns out that powder guns firing the same hypervelocity projectiles gets you almost as much as you would get out of the electromagnetic rail gun, but it's something we can do much faster,\" [then-Deputy Secretary of Defense Robert] Work said. \"We are going to say [to the next administration] 'Look, we believe this is the place where you want to put your money, but we're going to have enough money in there for both the electromagnetic rail gun and the powder gun.' So if the new administration says 'No really the electromagnetic rail gun is the way I want to go,' knock yourself out, we've set you up for success.\"", "A May 5, 2016, press report similarly states the following:", "Come January [2017], the Pentagon will almost assuredly have new leadership, complete with a new vision for how the Department of Defense should operate, organize and plan for the future.", "It's a reality facing down [then-]Defense Secretary Ash Carter and [then-]Deputy Secretary Bob Work as they try to complete a transformation at the Pentagon, one which both men have said is vital to making sure the US is able to maintain its technological edge against great powers like Russia and China in the future....", "\"One of the things we have done in our program is build in a lot of different options that they [i.e., officials in the next administration] can pull levers on,\" Work explained.", "As an example, he pointed to the idea of an electromagnetic railgun. Initially, Work and his team thought that was an area that would be a major focus of development, but as they experimented they realized that a powder gun with a hypervelocity round could have almost the same impact\u2014but at a fraction of the cost, because it did not require the development, testing and adaptation of a new gun.", "\"We're going to say 'look, this is the place where [we think] you want to put your money,' but we're going to have enough money in both the electromagnetic railgun and the powder gun that if the new administration says 'I really want the electromagnetic railgun, this is the way I want to go,' knock yourself out,\" Work said. \"We've set you up for success.\"", "A May 9, 2016, press report states the following:", "[Then-]Deputy Defense Secretary Bob Work said last week that current Pentagon leaders have made investments intended to position the next presidential administration to offset expected Russian and Chinese technological advancements, specifically highlighting lessons learned about a new hypervelocity gun.", "Work... said one of the key findings to emerge from the effort was the Hypervelocity Gun Weapon System, which he said could be poised to displace much of what the Defense Department had planned to invest in the Navy's electromagnetic rail gun.", "\"We thought rail guns were going to be something we were really going to go after,\" he said, adding that \"it turns out that powder guns\" are capable of firing the same projectiles, at the same velocity, for far less cost.", "A July 18, 2016, press report states the following:", "The Pentagon's office tasked with tweaking existing and developing military technology for new uses is pushing development of ammo meant for the electromagnetic railgun for use in existing naval guns and artillery pieces....", "About year and a half ago, researchers at the Pentagon's Strategic Capabilities Office and inside the service realized that there was more short-term promise for not only the Navy but the Army to use the Hyper Velocity Projectiles (HVP) rounds overseen by the Office of Naval Research (ONR) in both services existing powder guns, said [then-]SCO [Strategic Capabilities Office] head William Roper said last week.", "\"To me they were just interesting test articles a few years ago, but thanks to that service input and us funding some high-risk demonstration we now think that we can do pretty revolutionary things with existing powder guns\u2014think howitzers, Paladins, the Navy's five-inch guns. We've shifted emphasis to that,\" Roper said during a Wednesday talk at the Center for Strategic and International Studies (CSIS).", "\"Not that we're not interested in railgun\u2014we are\u2014but if you look at the delta between fielding in quantity\u2014we have [more than] a 1,000 powder guns, we have very few railguns.\"...", "The SCO-led research effort will work to create HVP sensor and a fire control regime that will find its way eventually to the railgun project, Roper said.", "\"So when the railgun is ready to field it will be able to just be dropped in place as a better launcher as opposed to being a great technology that we have to build a new architecture for,\" he said.", "\"We're going to take the bet and let's see if we can field this and let's completely flip the paradigm of missile defense.\"", "A September 19, 2016, press report states the following:", "After much deliberation, both public and private, the Pentagon, which has shifted emphasis away from the electromagnetic rail gun as a next-generation missile defense platform, sees a new hypervelocity powder gun technology as the key to demonstrating to potential adversaries like China and Russia that U.S. military units on land and sea can neutralize large missile salvos in future conflicts....", "\"If you do that, you change every 155 [mm] howitzer in the U.S. Army in every NATO country into a cruise missile and tactical ballistic missile defender and, oh by the way, you extend their offensive range,\" [then-Deputy Secretary of Defense Robert] Work said.", "The article states that Work \"is pushing hard to lay the groundwork for the next presidential administration to conduct a military exercise called 'Raid Breaker' that would demonstrate the capabilities of the Hypervelocity Gun Weapon System program.\" It quotes him as stating that if DOD conducted such an exercise against 100 cruise missiles and ballistic missiles, \"and were able to convince [potential adversaries] that we're able to knock down 95 to 98 of them, then that would have an enormous impact on the competition in the Pacific, on the competition in Europe and would [clearly] improve conventional deterrence.\" It further quotes him as stating that DOD's modeling shows that \"if we can close the fire support with a controlled solution,\" the weapon would be able to shoot down most of a 100-missile raid.", "A May 19, 2017, press report states the following:", "An Army Howitzer is now firing a super high-speed, high-tech, electromagnetic Hyper Velocity Projectile, initially developed as a Navy weapon, an effort to fast-track increasing lethal and effective weapons to warzones and key strategic locations, Pentagon officials said. ", "Overall, the Pentagon is accelerating developmental testing of its high-tech, long-range Electro-Magnetic Rail Gun by expanding the platforms from which it might fire and potentially postponing an upcoming at-sea demonstration of the weapon, Pentagon and Navy officials told Scout Warrior. ", "While initially conceived of and developed for the Navy's emerging Rail Gun Weapon, the Pentagon and Army are now firing the Hyper Velocity Projectile from an Army Howitzer in order to potential harness near-term weapons ability, increase the scope, lethality and range ability to accelerate combat deployment of the lethal, high-speed round.", "A January 26, 2018, press report states the following:", "The Pentagon's Strategic Capabilities Office will test-fire a radical new missile defense system in less than a year....", "\"That projectile is being designed to engage multiple threats,\" [Vincent Sabio, the HVP program manager at the Pentagon's Strategic Capabilities Office] said of the HVP. \"There may be different modes that it operates in (in terms of) how does it maneuver, how does it close on the threat, and whether it engages a (explosive) warhead or whether it goes into a hit-to-hill mode. Those will all be based on the threat, and we can tell it as it's en route to the threat, 'here's what you're going after, this is the mode you're going to engage in.'\"...", "So when will the Army and Navy actually get Hyper Velocity Projectiles? Both services are already working with SCO to plan a handover of the program, Sabio said. His role is just to prove the key technology works: specifically, to demonstrate that an HVP can maneuver close enough to \"an inbound, maneuvering threat\" that it could have destroyed it if fitted with the proper warhead. Sabio's not developing that warhead.", "\"We are building out the full fire control loop including the sensors, the coms links, the projectile, the launchers (i.e.) the guns,\" he said. \"The command and control\u2026. I leave that to my independent transition partners, Navy and Army.\"", "And by when will the demonstration happen? \"Well,\" said Sabio, \"my program ends less than a year from now.\"", "A January 8, 2019, press report states:", "Last summer USS Dewey (DDG-105) fired 20 hyper velocity projectiles (HVP) from a standard Mk 45 5-inch deck gun in a quiet experiment that's set to add new utility to the weapon found on almost every U.S. warship, officials familiar with the test have told USNI News.", "The test, conducted by the Navy and the Pentagon's Strategic Capabilities Office as part of the Rim of the Pacific (RIMPAC) 2018 international exercise, was part of a series of studies to prove the Navy could turn the more than 40-year-old deck gun design into an effective and low-cost weapon against cruise missiles and larger unmanned aerial vehicles\u2026.", "While officials confirmed to USNI News that the RIMPAC test was unclassified, both the Office of the Secretary of Defense and the Office of Naval Research would not acknowledge the test when asked by USNI News."], "subsections": []}]}]}, {"section_title": "Remaining Development Challenges", "paragraphs": ["Although the Navy in recent years has made considerable progress in developing SSLs, EMRG, and GLGP, a number of significant development challenges remain. Overcoming these challenges will likely require years of additional development work, and ultimate success in overcoming them is not guaranteed."], "subsections": [{"section_title": "Solid-State Lasers (SSLs)", "paragraphs": ["Remaining development challenges for high-energy SSLs include, among other things, making the system rugged enough for extended shipboard use, making the beam director (the telescope-like part of the laser that sends the beam toward the target) suitable for use in a marine environment (where moisture and salt in the air can be harsh on equipment), and integrating the system into the ship's electrical power system and combat system. A January 23, 2015, blog post co-authored by the Office of Naval Research's program officer for the Navy's SSL program states the following:", "In the near term, many challenges remain to develop and operate high-energy laser systems in the maritime environment that are unique to the Navy and Marine Corps. Among these challenges is dealing with the heat generated as power levels increase. A second issue is packing sufficient power on the platform, which will require advanced battery, generator, power conditioning, and hybrid energy technologies. Current laser technologies are approximately 30 percent electrically efficient. Corrosion and contamination of optical windows by shipboard salt spray, dirt, and grime also are technical challenges. In addition, atmospheric turbulence resulting from shifting weather conditions, moisture, and dust is problematic. Turbulence can cause the air over long distances to act like a lens, resulting in the laser beam's diffusing and distorting, which degrades its performance.", "Much progress has been made in demonstrating high-energy laser weapon systems in the maritime environment, but there is still much to be done. Additional advances will be required to scale power levels to the hundreds of kilowatts that will make high[-]energy lasers systems robust, reliable, and affordable. Higher power levels are important for the ability to engage more challenging threats and improve the rate and range at which targets can be engaged.", "The programs managed by ONR are addressing these remaining issues while positioning this important warfighting capability toward an acquisition program and eventual deployment with the fleet and force.", "Skeptics sometimes note that proponents of high-energy military lasers over the years have made numerous predictions about when lasers might enter service with DOD, and that these predictions repeatedly have not come to pass. Viewing this record of unfulfilled predictions, skeptics have sometimes stated, half-jokingly, that \"lasers are X years in the future\u2014and always will be.\" Laser proponents acknowledge the record of past unfulfilled predictions, but argue that the situation has now changed because of rapid advancements in SSL technology and a shift from earlier ambitious goals (such as developing megawatt-power lasers for countering targets at tens or hundreds of miles) to more realistic goals (such as developing kilowatt-power lasers for countering targets at no more than a few miles). Laser proponents might argue that laser skeptics are vulnerable to what might be called cold plate syndrome (i.e., a cat that sits on a hot plate will not sit on a hot plate again\u2014but it will not sit on a cold plate, either)."], "subsections": []}, {"section_title": "EMRG and GLGP", "paragraphs": ["Remaining development challenges for EMRG involve items relating to the gun itself (including increasing barrel life to desired levels), the projectile, the weapon's electrical power system, and the weapon's integration with the ship. Fielding GLGP on cruisers and destroyers equipped with 5-inch and 155mm powder guns would additionally require GLGP to be integrated with the combat systems of those ships. The Navy stated the following in 2017:", "The Railgun INP is in the second phase of a two-phase development effort. INP Phase I (FY 2005-2011) successfully advanced foundational enabling technologies and explored, through analysis and war gaming, the railgun's multi-mission utility. Launcher energy was increased by a factor of five to the system objective muzzle energy of 32 mega joules (110 nautical miles range) and barrel life was increased from tens of shots to hundreds of shots. Two contractors delivered tactical-style advanced containment launchers proving the feasibility of composite wound launchers. Pulsed power size was cut in half while thermal management for firing rate (rep-rate) was added to the design. INP Phase II focuses on increasing rep-rate capability. Rep-rate adds new levels of complexity to all of the railgun sub-systems, including thermal management, autoloader, and energy storage. A new test facility capable of supporting rep-rate testing at full energy level is coming on line at the Terminal Range at the Naval Surface Warfare Center, Dahlgren, Virginia. A new demonstration launcher (DL1) has been delivered and installed at the Terminal Range to commission the new facility. Additional rep-rate composite launchers (RCLs) capable of rep-rate are in various stages of design and fabrication. The Office of Naval Research will develop a tactical prototype railgun launcher and pulsed-power architecture suitable for advanced testing both afloat and ashore.", "A May 19, 2017, press report states the following:", "Consider 35 pounds of metal moving at Mach 5.8. Ten shots per minute. 1,000 shots before the barrel wears out under the enormous pressures. That's the devastating firepower the Navy railgun program aims to deliver in the next two years, and they're well on their way.", "\"We continue to make great technical progress,\" said Office of Naval Research program manager Tom Boucher. Boucher and an aide briefed me in the blazing hot courtyard of the Pentagon, which was hosting the annual DoD Lab Day \u2014 a kind of military-grade science fair.", "Three years ago, then-Chief of Naval Operations Jonathan Greenert declared that railguns \u2014 which fire projectiles with electromagnetic pulses rather than gunpowder \u2014 had come so close to battle-ready that he wanted to test-fire one at sea. Since then the Navy has changed course, deciding that permanent land-based test sites would provide more and better data for fewer dollars than an ad hoc installation aboard a repurposed fast transport (variously known as JHSV or EFP). So on November 17, along the Potomac River at the Naval Surface Warfare Center in Dahlgren, Va., a new 32-megajoule railgun built by BAE Systems opened fire for the first time.... A second railgun is being set up at the Army's White Sands Missile Range in the New Mexico desert, where there's enough wide-open space to fire the weapon at its maximum range of more than a hundred nautical miles.", "While White Sands tests the long-range performance of the projectile, Dahlgren will work on the weapon itself. Previous test weapons were like medieval bombards, firing just a few times per day. The Dahlgren team is now making multiple shots per hour as they work out the bugs, and by the end of the year they expect to reach the goal of 10 shots per minute.", "Once they've reached the 10-round a minute rate, Dahlgren will switch focus to barrel life. A decade ago, experimental railguns often wore out their barrel with a single shot. With new materials better able to endure the intense stresses, the barrels on the current test weapons can last for hundreds of shots before requiring replacement \u2014 roughly how long a battleship's 16\u2033 barrels lasted back in World War II. The goal is a barrel that lasts 1,000 rounds."], "subsections": []}, {"section_title": "Transitioning from Development to Procurement", "paragraphs": ["Transitioning military technology efforts from the research and development phase to the procurement phase can sometimes be a challenge. Some military technology efforts fail to make the transition, falling into what observers sometimes refer to as the \"valley of death\" metaphorically located between the research and development phase and the procurement phase. A February 27, 2017, press report states that", "The Navy has established programs for high-energy lasers and the electromagnetic railgun at Naval Sea Systems Command acquisition directorates, paving the way for technologies that have long been stuck in research and development to potentially be installed on the service's ships one day.", "The program executive office for integrated warfare systems (PEO IWS) is developing acquisition plans for lasers and the electromagnetic railgun, as well as the railgun's associated weapon, the hypervelocity projectile, according to NAVSEA spokeswoman Christianne Witten.", "Last August, a \"Directed Energy Program Office\" was set up at the above-water sensors directorate within PEO IWS, Witten wrote in a Feb. 22 email. The new office was established to \"accelerate the fielding of High Energy Laser (HEL) weapon systems to the fleet,\" according to the spokeswoman.", "Additionally, last June, the Navy's acquisition executive charged the surface-ship weapons program office at PEO IWS with developing an acquisition and fielding plan for the railgun and the hypervelocity projectile, Witten said."], "subsections": []}]}]}, {"section_title": "Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "Potential Oversight Questions", "paragraphs": ["Potential oversight questions for Congress regarding Navy programs for SNLWS, EMRG, and GLP include the following:", "Using currently available air-defense weapons, how well could Navy surface ships defend themselves in a combat scenario against an adversary such as China that has or could have large numbers of missiles and UAVs? How would this situation change if Navy surface ships in coming years were equipped with SNLWS, EMRG, GLGP, or some combination of these systems? How significant are the remaining development challenges for SNLWS, EMRG, and GLGP? Are current schedules for developing SNLWS, EMRG, and GLGP appropriate in relation to remaining development challenges and projected improvements in enemy missiles? When does the Navy anticipate issuing roadmaps detailing its plans for procuring and installing production versions of SNLWS, EMRG, and GLGP on specific Navy ships by specific dates? Will the kinds of surface ships that the Navy plans to procure in coming years have sufficient space, weight, electrical power, and cooling capability to take full advantage of SNLWS and EMRG? What changes, if any, would need to be made in Navy plans for procuring large surface combatants (i.e., destroyers and cruisers) or other Navy ships to take full advantage of SNLWS and EMRGs? Given the Navy's interest in HPV, how committed is the Navy to completing the development of EMRG and eventually deploying EMRGs on Navy ships? Are the funding line items for SNLWS, EMRG, and GLDP sufficiently visible for supporting congressional oversight sufficiently visible for supporting congressional oversight?"], "subsections": []}]}, {"section_title": "Legislative Activity for FY2020", "paragraphs": [], "subsections": [{"section_title": "Summary of Congressional Action on FY2020 Funding", "paragraphs": [" Table 1 summarizes congressional action on selected Navy FY2020 research and development account line items (known as program elements, or PEs) that related to shipboard lasers, EMRG, and GLGP. These PEs do not necessarily capture all Navy research and development work related to these efforts\u2014additional funding for these efforts may occur in other PEs that do not explicitly indicate that they include funding for these efforts."], "subsections": [{"section_title": "Appendix. Potential Advantages and Limitations of Shipboard Lasers", "paragraphs": ["This appendix presents additional information on potential advantages and limitations of shipboard lasers.", "Potential Advantages", "In addition to a low marginal cost per shot and deep magazine, potential advantages of shipboard lasers include the following:", "F ast engagement times . Light from a laser beam can reach a target almost instantly (eliminating the need to calculate an intercept course, as there is with interceptor missiles) and, by remaining focused on a particular spot on the target, cause disabling damage to the target within seconds. After disabling one target, a laser can be redirected in several seconds to another target. A bility to counter radically maneuvering missiles . Lasers can follow and maintain their beam on radically maneuvering missiles that might stress the maneuvering capabilities of Navy SAMs. P recision engagements . Lasers are precision-engagement weapons\u2014the light spot from a laser, which might be several inches in diameter, affects what it hits, while generally not affecting (at least not directly) separate nearby objects. G raduated responses. Lasers can perform functions other than destroying targets, including detecting and monitoring targets and producing nonlethal effects, including reversible jamming of electro-optic (EO) sensors. Lasers offer the potential for graduated responses that range from warning targets to reversibly jamming their systems, to causing limited but not disabling damage (as a further warning), and then finally causing disabling damage.", "Potential Limitations", "Potential limitations of shipboard lasers include the following:", "L ine of sight . Since laser light tends to fly through the atmosphere on an essentially straight path, shipboard lasers would be limited to line-of-sight engagements, and consequently could not counter over-the-horizon targets or targets that are obscured by intervening objects. This limits in particular potential engagement ranges against small boats, which can be obscured by higher waves, or low-flying targets. Even so, lasers can rapidly reacquire boats obscured by periodic swells. A tmospheric absorption, scattering, and turbulence . Substances in the atmosphere\u2014particularly water vapor, but also things such as sand, dust, salt particles, smoke, and other air pollution\u2014absorb and scatter light from a shipboard laser, and atmospheric turbulence can defocus a laser beam. These effects can reduce the effective range of a laser. Absorption by water vapor is a particular consideration for shipboard lasers because marine environments feature substantial amounts of water vapor in the air. There are certain wavelengths of light (i.e., \"sweet spots\" in the electromagnetic spectrum) where atmospheric absorption by water vapor is markedly reduced. Lasers can be designed to emit light at or near those sweet spots, so as to maximize their potential effectiveness. Absorption generally grows with distance to target, making it in general less of a potential problem for short-range operations than for longer-range operations. Adaptive optics, which make rapid, fine adjustments to a laser beam on a continuous basis in response to observed turbulence, can counteract the effects of atmospheric turbulence. Even so, lasers might not work well, or at all, in rain or fog, preventing lasers from being an all-weather solution. T hermal blooming . A laser that continues firing in the same exact direction for a certain amount of time can heat up the air it is passing through, which in turn can defocus the laser beam, reducing its ability to disable the intended target. This effect, called thermal blooming, can make lasers less effective for countering targets that are coming straight at the ship, on a constant bearing (i.e., \"down-the-throat\" shots). Other ship self-defense systems, such as interceptor missiles or a CIWS, might be more suitable for countering such targets. Most tests of laser systems have been against crossing targets rather than \"down-the-throat\" shots. In general, thermal blooming becomes more of a concern as the power of the laser beam increases. S aturation attacks . Since a laser can attack only one target at a time, requires several seconds to disable it, and several more seconds to be redirected to the next target, a laser can disable only so many targets within a given period of time. This places an upper limit on the ability of an individual laser to deal with saturation attacks\u2014attacks by multiple weapons that approach the ship simultaneously or within a few seconds of one another. This limitation can be mitigated by installing more than one laser on the ship, similar to how the Navy installs multiple CIWS systems on certain ships. H ardened targets and countermeasures . Less-powerful lasers\u2014that is, lasers with beam powers measured in kilowatts (kW) rather than megawatts (MW)\u2014can have less effectiveness against targets that incorporate shielding, ablative material, or highly reflective surfaces, or that rotate rapidly (so that the laser spot does not remain continuously on a single location on the target's surface) or tumble. Small boats (or other units) could employ smoke or other obscurants to reduce their susceptibility to laser attack. Measures such as these, however, can increase the cost and/or weight of a weapon, and obscurants could make it more difficult for small boat operators to see what is around them, reducing their ability to use their boats effectively. R isk of collateral damage to aircraft , satellites , and human eyesight . Since light from an upward-pointing laser that does not hit the target would continue flying upward in a straight line, it could pose a risk of causing unwanted collateral damage to aircraft and satellites. The light emitted by SSLs being developed by the Navy is of a frequency that can cause permanent damage to human eyesight, including blinding. Blinding can occur at ranges much greater than ranges for damaging targeted objects. Scattering of laser light off the target or off fog or particulates in the air can pose a risk to exposed eyes.", "For additional background information on potential Navy shipboard SSLs, see CRS Report R41526, Navy Shipboard Lasers for Surface, Air, and Missile Defense: Background and Issues for Congress , by Ronald O'Rourke."], "subsections": []}]}]}]}}
{"id": "R43166", "title": "Democratic Republic of Congo: Background and U.S. Relations", "released_date": "2019-04-30T00:00:00", "summary": ["The United States and other donors have focused substantial resources on stabilizing the Democratic Republic of Congo (DRC) since the early 2000s, when \"Africa's World War\"\u2014a conflict that drew in multiple neighboring countries and reportedly caused millions of deaths\u2014drew to a close. DRC hosts the world's largest U.N. peacekeeping operation and is a major recipient of donor aid. Conflict has nonetheless persisted in eastern DRC, prolonging instability and an enduring humanitarian crisis in Africa's Great Lakes region. New unrest erupted as elections were repeatedly delayed past 2016, their scheduled date, leaving widely unpopular President Joseph Kabila in office. Security forces brutally cracked down on protests, while new conflicts emerged in previously stable regions, possibly fueled by political interference. An ongoing Ebola outbreak in the east has added to DRC's challenges. In April 2019, the Islamic State organization claimed responsibility for an attack on local soldiers in the Ebola-affected area, an apparent effort to rebrand a local armed group known as the Allied Democratic Forces.", "National elections were ultimately held on December 30, 2018, following intense domestic and regional pressure. Opposition figure Felix Tshisekedi unexpectedly won the presidential contest, though his ability to assert a popular mandate may be undermined by allegations that the official results were rigged to deny victory to a more hardline opposition rival. Many Congolese nonetheless reacted to the outcome with relief and/or enthusiasm, noting that Kabila would step down and that voters had soundly defeated his stated choice of successor, a former Interior Minister. Kabila's coalition nonetheless won sweeping majorities in simultaneous legislative and provincial-level elections, ensuring enduring influence for the former president and his supporters. Whether President Tshisekedi will make durable progress toward spurring inclusive economic growth, reforming state institutions, or ending security force abuses remains to be seen.", "The Trump and Obama Administrations expended significant efforts to encourage an electoral transfer of power in DRC, that is, \"credible\" elections in which Kabila was not a candidate. U.S. officials have welcomed Tshisekedi's election and pledged to work with him, but they also imposed sanctions against top election officials in the aftermath of the polls, citing corruption in the electoral process. The Trump Administration has more broadly maintained a high-level focus on human rights and governance in DRC, expanding a U.S. unilateral sanctions regime targeting high-level security commanders and appointing regional specialist J. Peter Pham as Special Envoy in 2018. U.S. diplomats have also called on DRC authorities to credibly prosecute the murder in 2017 of two U.N. sanctions investigators, one of whom was a U.S. citizen. The United States remains the largest humanitarian donor in DRC and the largest financial contributor to the U.N. peacekeeping operation, MONUSCO, though the Administration has advocated broad cuts to U.S. peacekeeping funding and secured a decrease in MONUSCO's troop level in 2017. U.S. bilateral aid to DRC totaled $375 million in FY2018, higher than in previous years.", "Congress has shaped U.S. policy toward DRC, often focusing on human rights and democracy. Recent foreign aid appropriations measures have directed bilateral economic assistance for DRC. In the 115th Congress, the House passed H.R. 6207, which would have codified Executive Orders authorizing U.S. targeted sanctions, while the Senate agreed to S.Res. 386, urging the U.S. President to \"deter further electoral calendar slippage and abuses against the people of Congo.\" For more than a decade, Congress has also sought to deter Rwandan and Ugandan proxy involvement in DRC, including via provisions in aid appropriations legislation. Laws restricting U.S. aid to countries that, like DRC, have poor records on curtailing the use of child soldiers or human trafficking have also shaped U.S. engagement and aid. See also CRS In Focus IF11100, Ebola Outbreak: Democratic Republic of Congo; CRS Report R44402, Rwanda: In Brief; and CRS Report R42618, Conflict Minerals in Central Africa: U.S. and International Responses."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The U.S. State Department welcomed opposition figure Felix Tshisekedi's victory in DRC's December 2018 presidential election, applauding the Congolese people \"for their insistence on a peaceful and democratic transfer of power.\" Election day was indeed largely peaceful, and alternate scenarios that outgoing President Joseph Kabila might have preferred (e.g., his own reelection or the election of his chosen successor, former Interior Minister Emmanuel Ramazani Shadary) ultimately did not materialize. Many Congolese reacted positively to the results. ", "Whether the election was \"democratic\" is debatable, however, as is the degree to which Tshisekedi's presidency represents a \"transfer of power.\" Former President Kabila\u2014whose decision to cling to power past the end of his two constitutionally permitted terms in 2016 sparked a national political crisis and widespread protests\u2014appears poised to retain significant political influence. Kabila, who first assumed the presidency in 2000, now holds the title of \"Senator-for-Life,\" while his Common Front for Congo (FCC) coalition won sweeping majorities in parliament and provincial assemblies, and in subsequent indirect elections for the Senate and provincial governors. Tshisekedi's Union for Democracy and Social Progress (UDPS) won very few sub-national contests, and it has agreed to form a coalition government with the FCC. These factors, along with evidence that a more hardline opposition figure won more votes than Tshisekedi, have led many observers to speculate that the official election results reflected a power-sharing deal between Tshisekedi and Kabila (see \" Politics \" ) . ", "Attention has now turned to gauging President Tshisekedi's performance in office and the extent of his independence. The challenges facing DRC are stark. The country is rich in minerals, forest resources, freshwater, and agricultural potential, but most Congolese live in poverty. Prior to the 2016-2018 impasse over the elections delay and Kabila's political future, international attention toward DRC was overwhelmingly focused on addressing long-running conflicts in the east and supporting the extension of state authority. Security threats, political uncertainty, \"endemic corruption,\" poor infrastructure, and unpredictable regulatory enforcement have contributed to a poor business climate. Ahead of a visit by Tshisekedi to Washington, DC in April 2019, the State Department pledged to work with the new president \"to advance his agenda to combat corruption, strengthen the rule of law, enhance security, protect human rights and promote economic growth through increased foreign investment and trade, particularly with the United States.\"", "Enduring conflicts and humanitarian suffering in the east both reflect and contribute to regional instability. Neighboring countries such as Rwanda and Uganda have periodically backed Congolese rebel proxies, and the security vacuum has drawn in foreign-origin militias. State security forces have been implicated in serious abuses, including extrajudicial killings and mass rapes. There were 4.5 million internally displaced persons (IDPs) in DRC as of late 2017 (latest U.N. figure available), one of the highest numbers in the world, while another 825,000 Congolese are refugees in neighboring countries. About 12.8 million people (15% of the country's estimated population) were reportedly in \"dire need of assistance\" as of late 2018. ", "A potential new security challenge emerged in April 2019, when the Islamic State (IS, a.k.a. ISIS/ISIL) organization claimed an attack on local security forces in eastern DRC. This appeared to be the latest in a series of developments linking the Islamic State to a nebulous locally based armed group known as the Allied Democratic Forces (ADF), although the extent of ties is subject to debate (see text box on the ADF under \" Conflict in Eastern DRC ,\" below). ", "DRC ranked 176 out of 189 countries on the 2018 U.N. Human Development Index, and its per capita gross domestic product (GDP) stood at $449 in 2018 (see Figure 1 ), among the world's lowest. Industrial mining\u2014particularly of copper and cobalt\u2014is the mainstay of DRC's formal economy, although much of the population is engaged in informal economic activity (including widespread small-scale artisanal mining). In recent years, DRC has produced over half of the world's supply of cobalt, a key ingredient in electric car batteries, among other industrial uses. Relations with international financial institutions have been poor since 2012, when the International Monetary Fund (IMF) ceased its concessional lending program in DRC due to a lack of transparency in state mining contracts. "], "subsections": [{"section_title": "Historical Background", "paragraphs": ["Due to its resources, vast territory, and location ( Figure 1 ), DRC has long served as an arena of regional and international competition. Belgium's King Leopold II claimed \"Congo Free State\" as his personal possession. His administration of the territory became notorious for its plunder of Congo's natural resources, mismanagement, and egregious abuses against the local population, and the Belgian government transitioned the territory into a formal colony in 1908. Belgium granted Congo independence in 1960, shortly after parliamentary elections in which nationalist leader Patrice Lumumba became prime minister. The country's early years following independence were plagued by instability, including a secession movement in southeastern Katanga and an army mutiny that culminated in Lumumba's murder in 1961. One of the first U.N. peacekeeping operations deployed from 1960 to 1964 in response to the Katanga crisis. ", "In 1965, Colonel Joseph Mobutu (a.k.a. Mobutu Sese Seko), who was involved in the mutiny against Lumumba, seized power in a coup and gradually instituted a more centralized and authoritarian form of government. Mobutu's pursuit of an \"authentic\" indigenous Congolese national identity led him to rename the country Zaire. Mobutu's 32-year reign was backed by the United States and other Western powers in the context of Cold War rivalry in Africa. He also relied on fraudulent elections, brute force, and patronage networks fueled by extensive corruption, leading many analysts to brand his regime a \"kleptocracy.\" At the same time, petty corruption came to constitute a crucial economic safety net for many Congolese. ", "Domestic and international pressures mounted on Mobutu as the Cold War drew to a close and as the aging president's health faltered. Mobutu agreed in principle to a multiparty democratic system in 1990 but repeatedly delayed elections. State institutions and the military fractured, while conflicts in neighboring states spilled into DRC, diverting state resources and destabilizing local communities. Hutu extremists who orchestrated the 1994 genocide in Rwanda fled across the border to Zaire, where they used refugee camps to remobilize against the new Tutsi-dominated Rwandan government, reportedly with Mobutu's backing. Rwanda launched cross-border military operations in response, reportedly also targeting civilians on a large scale. Rwanda and Uganda then backed a 1996 rebellion against Mobutu by Laurent D\u00e9sir\u00e9 Kabila, an exiled Congolese militant. The ensuing conflict came to be known as the \"first\" Congo war. With Mobutu's security forces and personal health in tatters, Laurent Kabila seized power in 1997 and renamed the country DRC. Mobutu died in exile in Morocco the same year. ", "Tensions among the erstwhile allies soon erupted. In 1998, amid growing popular hostility toward Rwandan soldiers and Congolese of Rwandan descent who had comprised the core of his rebel army, Laurent Kabila attempted to expel these forces, provoking a mutiny. Rwanda and Uganda then deployed troops into DRC and cultivated rebel groups as proxies, this time against Kabila. They also fought each other. Angola, Zimbabwe, Sudan, and others intervened on the government's side. This conflict, dubbed \"Africa's World War,\" caused a major humanitarian crisis and is estimated to have (directly and indirectly) caused 3.3 million deaths. ", "In 2001, Laurent Kabila was assassinated by one of his bodyguards. His son, Joseph Kabila, assumed the presidency and advanced a U.N.-backed peace process. A 2002 peace accord called for foreign troops to withdraw and for Congolese rebels to be integrated into the military and government. Kabila headed a transitional government between 2003 and 2006, and citizens voted overwhelmingly to adopt a new constitution in a referendum in 2005. Landmark national elections were held in 2006, the first relatively open multiparty vote in the country since independence. International observers concluded that those elections were credible, despite procedural shortcomings and significant election-related violence. President Kabila won reelection, following a tense and violent run-off against former rebel leader Jean-Pierre Bemba. ", "Kabila was reelected in 2011 in a vote that international and domestic observers characterized as extremely flawed. The late opposition leader Etienne Tshisekedi, Felix Tshisekedi's father, rejected the results and declared himself president, but his calls for mass protests did not materialize. Kabila's party lost seats in the legislature compared to 2006, but nonetheless assembled a majority coalition. ", "DRC's relations with Uganda, Rwanda, and Angola remain complex and volatile. Tensions with Rwanda have periodically flared since the conclusion of the 1998-2003 war with reports of Rwandan support for Congolese rebel groups, which have fueled xenophobia in DRC. In 2008-2009, Kabila and Rwandan President Paul Kagame agreed to reestablish diplomatic ties and subsequently launched joint military operations in DRC's eastern border regions. Tensions surged during a 2012-2013 Rwandan-backed rebellion known as the M23, but they appear to have eased since then. In early 2018, the eastern province of Ituri experienced a resurgence of militia conflict that spurred a flood of refugees into Uganda and echoed similar dynamics from the early 2000s."], "subsections": []}]}, {"section_title": "Politics", "paragraphs": ["Felix Tshisekedi's inauguration as president in January 2019 represented DRC's first peaceful transfer of executive power in its postcolonial history. That he is the son of the late opposition leader Etienne Tshisekedi\u2014who was revered by many Congolese for his role in DRC's political liberalization in the 1990s and uncompromising stance against former president Kabila\u2014added potent symbolism. For the Western donor community, Tshisekedi's victory also averted several scenarios that might have sparked a popular backlash (and thus, a potential for increased instability) or posed other challenges. These included 1) an unconstitutional third-term bid by outgoing president Joseph Kabila; 2) further election delays; or 3) a victory by Kabila's unpopular choice of successor, Emmanuel Ramazani Shadary, who is under European Union (EU) sanctions due to his role in political repression. ", "Whether Tshisekedi is able to deliver on Congolese hopes for change remains to be seen. As discussed above, Kabila appears poised to retain influence over state decision-making, including, potentially, over the security apparatus and lucrative mining sector. An electoral data leak and a parallel vote tabulation overseen by the widely respected Congolese Conference of Catholic Bishops (CENCO) reportedly each showed him losing by a wide margin to rival opposition candidate Martin Fayulu, who was backed by key exiled opposition figures and ran a campaign that was more ardently critical of Kabila. Fayulu has refused to recognize the official results. DRC's election commission (known as the CENI) has not published disaggregated results by polling station that could be checked against election observer data. These factors have led some observers to speculate that the official results reflected a backroom deal\u2014a \"Plan B\" after voters resoundingly rejected Shadary\u2014in which Kabila granted Tshisekedi victory in exchange for protection and continued influence via control of the legislature and provincial governments. ", "The current electoral cycle is scheduled to be completed with local elections due in September 2019, which would be the first multiparty local-level polls since independence. Local elections have repeatedly been scheduled over the past decade, only to be canceled or indefinitely delayed.", "Uncertainty over the election process and Kabila's succession dominated national politics and preoccupied donors between 2014 and 2018, as it became clear that Kabila would seek to remain in office past the end of his term in 2016 and that this would provoke significant popular opposition and unrest. Local civil society groups, youth activists, CENCO, and regional powers (notably Angola) played a key role in pressuring the government to hold elections in which Kabila was not a candidate. Large street protests first erupted in 2015 in opposition to a ruling party proposal to delay elections pending a time-consuming national census. Local activists, opposition parties, and Catholic lay organizations organized periodic protests through 2018 despite violent repression by state security forces, which fired on civilians, arrested activists, shuttered media outlets, expelled international researchers, and besieged churches where marchers gathered. After the 2018 election results were announced, a few areas saw violent clashes, but much of the country appeared calm or celebratory.", "Overall, the election process was characterized by flaws and irregularities, and polls showed that voters held a dim view of the CENI. In addition to evidence of high-level CENI corruption, observers noted state restrictions on opposition activism and critical media, a problematic voter registry, a last-minute decision to cancel the presidential vote in four pro-opposition districts, and the fact that two prominent exiled opposition figures (former governor Mo\u00efse Katumbi and former rebel leader Jean-Pierre Bemba) were barred from running. Several of these factors, along with repeated election delays, violated a political agreement brokered by CENCO in December 2016 (known as the St. Sylvestre accord) that aimed to encourage relatively fair and timely elections. The DRC government also rejected U.N. logistical support for moving electoral materials around the vast, infrastructure-poor country, which could have averted some disenfranchisement and delays. Despite welcoming Tshisekedi's presidency, the U.S. government has assailed corruption and political repression tied to the electoral process that brought him to office and designated election officials for sanctions (see \" U.S. Policy \" below)."], "subsections": []}, {"section_title": "Security and Humanitarian Trends", "paragraphs": ["Uncertainty over DRC's political future coincided with a surge in conflicts throughout the country between 2016 and 2018. Violence worsened in the east, while new conflicts emerged in previously stable areas, notably the central Kasai region (a stronghold of Tshisekedi's UDPS party) and southeastern Tanganyika province (see map, Figure 1 ). Violence also erupted along ethnic lines in northeastern Ituri in early 2018, reportedly fueled by competition over political influence and resource extraction. In the rural district of Yumbi in western DRC, hundreds of people were killed in December 2018 during an outbreak of violence fueled by local political and ethnic tensions. In some areas, government officials allegedly sought to bolster Kabila's political support by intervening in delicate local power dynamics, while elsewhere, armed groups appeared to jockey for position in anticipation of a power vacuum. The conflicts in Kasai and Tanganyika alone caused the displacement of nearly 2 million people at their peak. Political unrest in urban areas, a string of prison breaks, and attacks in Kinshasa by members of an opaque religious sect known as Bundu dia Kongo contributed to worsening security trends. ", "The conflict in Kasai, which erupted in 2016 after state security forces killed a traditional leader, spawned a humanitarian crisis featuring widespread atrocities, the recruitment and abuse of children, and severe food insecurity. U.N. officials had documented at least 87 mass graves in the region as of 2017. The DRC government blamed the violence on a shadowy antigovernment militia known as Kamuina Nsapu, while U.N. officials attributed many of the killings to the Congolese military and state-backed militias known as the Bana Mura. In March 2017, two U.N. sanctions investigators\u2014one of them a U.S. citizen\u2014were murdered while probing human rights abuses in Kasai, and four Congolese who were with them disappeared. Researchers reported evidence of state security force involvement.", "Conflict and displacement underlie widespread food insecurity in DRC, despite ample surface water and arable land. Pest infestations and weather patterns also periodically limit harvests. Efforts to contain the ongoing Ebola outbreak in the east have been stymied by security threats as well as deeply entrenched distrust of state actors and outsiders.", "In the final years of Kabila's presidency (2017-2018), the government lashed out at the donor community as U.S. and European issued targeted sanctions and criticized election delays. In April 2018, the government refused to attend a U.N. humanitarian donor conference in Geneva, accusing aid groups of \"a demonization campaign\" and asserting that \"there is no humanitarian crisis here.\" The government subsequently called for donors to send aid funds directly to a state agency. Aid organizations reported increasing bureaucratic impediments, and as of mid-2018, a draft bill to regulate nongovernmental organizations threatened to impose new constraints. "], "subsections": [{"section_title": "Conflict in Eastern DRC", "paragraphs": ["Civilians have been the primary victims of 25 years of brutal violence in DRC's mineral-rich, agriculturally fertile, and densely inhabited east. Tensions over access to land and citizenship rights, as well as localized disputes, criminal activity, and regional geopolitics have helped drive conflict. The DRC armed forces (FARDC) and other state security forces such as the police and national intelligence service (known as the ANR) have been implicated in widespread atrocities, including during counter-insurgency operations and as part of illicit involvement in mining.", "The spillover of violence from Rwanda and Burundi in the early 1990s aggravated long-standing tensions between and among communities seen as \"indigenous\" and those that trace their origins (however distant) to Rwanda. Since then, various rebellions in the east have drawn backing from Rwanda and escalated into regional crises. Rwanda's proxy involvement in eastern DRC conflicts may have been motived by various factors, including its own national security concerns, solidarity with cross-border ethnic communities, and economic motivations. The most recent example was a 2012-2013 rebellion known as the M23, which originated as a mutiny among members of a Rwandan-backed insurgent group who had been integrated into the military. Anti-Rwandan sentiment, at times expressed as ethnic hate speech, has endured as a recurrent theme in DRC national politics and in grassroots dynamics in the east.", "Under a U.N.-brokered regional \"Framework Agreement\" signed in 2013, neighboring states agreed to respect DRC's sovereignty and not to sponsor DRC-based armed groups, while the DRC government committed to institutional and security sector reforms. Later that year, the DRC military, backed by a newly created U.N. \"Intervention Brigade,\" defeated the M23. The DRC government never fully implemented its commitments under the 2013 accord or a separate peace process with the M23. In 2017, Human Rights Watch reported that senior DRC security officers had recruited ex-M23 members to suppress protests and protect then President Kabila.", "Multiple armed groups remain active in the east, including \"Mai Mai\" militias\u2014disparate groups that operate variously as self-defense networks and criminal rackets\u2014as well as foreign-origin groups seeking safe haven and illicit revenues. The latter include the Democratic Forces for the Liberation of Rwanda (FDLR), founded by perpetrators of the 1994 Rwandan genocide, and the aforementioned ADF, a Ugandan-origin group implicated in large massacres (see text box below). Elements of the South Sudanese rebel movement known as the SPLM-iO have also entered DRC. Smaller foreign-origin groups include elements of the Burundian ex-rebel group the National Liberation Forces (FNL) and the Ugandan-origin Lord's Resistance Army (LRA)."], "subsections": [{"section_title": "Sexual Violence", "paragraphs": ["Particular international attention has been paid to the issue of sexual and gender-based violence in eastern DRC due to reports of gang rape, child rape, mutilation, and other abuses by armed groups and FARDC personnel. Attacks may be opportunistic and/or designed to systematically intimidate local populations. The prevalence of sexual violence in Congolese conflict zones has been attributed to factors such as the eroded status of women, weak state authority, a deeply flawed justice system, and a breakdown in community protection mechanisms. While women and girls are the primary targets, men and boys have also been victims. As with other human rights problems, sexual violence has also been linked to structural problems within the security sector. Donor efforts to improve accountability for perpetrators of serious abuses have produced legal reforms and some high-profile prosecutions, but appear to have had limited systemic impact."], "subsections": []}, {"section_title": "Wildlife Poaching", "paragraphs": ["Ivory poaching has been notable in two DRC national parks affected by armed conflict and insecurity: Virunga (Africa's oldest national park) in North Kivu, and Garamba in Haut-Uele. A range of actors reportedly participate, including state security force elements from DRC and neighboring states, Congolese militias, Sudanese poaching syndicates, and foreign-origin armed groups such as the FDLR in Virunga and the LRA in Garamba. Poachers are apparently increasingly well-armed and sophisticated, as are park rangers. According to U.N. sanctions monitors, poaching and ivory trafficking present a \"catastrophic threat\" to elephant survival in DRC, but \"the widespread disappearance of elephant populations has made it an ever-diminishing and increasingly marginal source of armed group financing.\""], "subsections": []}]}]}, {"section_title": "U.N. Peacekeeping: Current Issues", "paragraphs": ["MONUSCO is the world's largest U.N. peacekeeping operation, authorized to comprise up to 16,875 military and 1,441 police personnel. Its mandate has long focused on protecting civilians in conflict zones and supporting stabilization in the east. U.N. Security Council Resolution 2409 (2018) identified two top \"strategic priorities\": (1) protection of civilians and (2) \"support to the implementation of the 31 December 2016 [St. Sylvestre] agreement and the electoral process.\" In March 2019, the Security Council extended MONUSCO's mandate and authorized troop ceiling for nine months, while reorienting the mission's second priority task toward supporting state institutional strengthening and reforms. Other enduring tasks include the protection of U.N. personnel and facilities, support for demobilization of ex-combatants, and support for security sector reform. The Council has also called for an independent strategic review of the mission in 2019, including the articulation of a phased, progressive, and comprehensive \"exit strategy.\"", "A previous strategic review of MONUSCO by the U.N. Secretary-General in 2017 found that the spike in violence in Kasai and urban locations since 2016 had \"placed a major strain on limited resources.\" Prior to 2016, MONUSCO had positioned the bulk of its forces in the east, in part due to Security Council pressure to align itself with active conflict zones that posed the most pressing threats to civilians. Security Council members and troop-contributing countries continue to debate how MONUSCO should respond to threats to civilians posed by state security forces, as well as what conditions, if any, should be placed on any logistical assistance for future elections (including local elections due in September 2019). ", "MONUSCO has drawn criticism for failing to protect Congolese civilians in various instances. Such shortfalls may be attributed to a combination of factors, including a wide-ranging mandate, logistical challenges, the DRC government's limited commitment to work with the mission to improve stability, and limited capacity and political will among troop-contributing countries. MONUSCO's mandate instructs it to support the DRC government in various ways, and its ability to operate is de facto contingent on government acceptance. MONUSCO personnel have also repeatedly been implicated in sexual abuse and exploitation.", "Ahead of MONUSCO's mandate renewal in March 2019, the U.S. acting Permanent Representative to the U.N. praised President Tshisekedi for committing to \"work closely with MONUSCO to neutralize armed groups and pave the way for MONUSCO's drawdown and departure,\" but did not explicitly call for an immediate drawdown of personnel. In 2017, the Trump Administration successfully advocated a decrease in MONUSCO's troop ceiling, asserting that the mission was propping up a \"corrupt\" government in Kinshasa. Some observers expressed concern at the time that the troop reduction coincided with the emergence of new conflicts and threats to civilians, as well as election preparations. It also appeared to grant a concession to the Kabila administration, which repeatedly called for MONUSCO to draw down. The U.N. Secretary-General stated in 2017 that MONUSCO had pursued reforms to \"yield efficiencies,\" but called for U.N. member states to \"exercise caution in making further cuts to the Mission's budget that may compromise its ability to deliver on its core priorities.\" The Security Council did not alter the troop ceiling in 2018 or in the March 2019 renewal.", "Since 2013, the Security Council has authorized a Force Intervention Brigade (FIB) within MONUSCO to target armed groups, including through unilateral operations. The FIB has conducted such operations periodically, but the scope of FIB activity has been limited by troop contributors' evolving perceptions of their own national security interests in DRC, as well as a lack of capacity. A U.N. investigation into a deadly ADF attack on a Tanzanian FIB contingent in 2017 found \"gaps in the training and posture\" of FIB troops. Observers have debated whether the FIB concept could be a useful model for other situations, such as South Sudan and Mali."], "subsections": []}, {"section_title": "The Economy", "paragraphs": ["DRC has some of the world's largest natural resource endowments, but most Congolese depend on subsistence farming and/or informal activities for survival. Per-capita income and human development indicators are among the world's lowest. Industrial mining in the southeast is the mainstay of the formal economy, although small-scale artisanal miners also account for substantial production. DRC is a top global copper producer, and in 2018 it produced 64% of the global supply of cobalt (a key ingredient in batteries for electric cars as well as jet engines, among other industrial uses), along with 24% of natural industrial diamonds and 39% of tantalum. ", "Private sector growth has been constrained by DRC's poor business environment, including its underdeveloped infrastructure, uneven contract enforcement, limited access to credit, continued insecurity in the east, endemic corruption, shortage of skilled labor, and lack of reliable electricity. The State Department assessed in 2018 that DRC's business climate had \"deteriorated,\" reporting (among other concerns) that \"government agencies \u2026 exert significant administrative pressure on businesses with audits and inspections that often result in questionable legal fines.\" The country ranked 182 out of 190 in the World Bank's 2018 Doing Business Report. China is the largest consumer of Congolese copper and cobalt, and is DRC's largest overall trading partner. China first emerged as a key player in the economy in 2007, when it pledged $6 billion in loans to DRC for infrastructure, to be repaid through joint-venture mining.", "A crash in global mineral prices, combined with political and regulatory uncertainty, produced a fiscal crisis in 2015-2017, but booming demand for copper and cobalt has since produced a rebound. GDP growth improved moderately to 3.8% in 2018, compared to 2.4% in 2016, although it remains well below the 2014 rate of 9.5%. During the price slump, major investors pulled back or divested of their assets. Notably, the U.S.-based multinational Freeport McMoRan sold its controlling stake in DRC's largest industrial mine, the Tenke Fungurume copper concession, to a Chinese firm, in an effort to alleviate its global debt. ", "The government has approved oil production contracts around the perimeter of Virunga National Park, a UNESCO World Heritage site, and signaled plans in mid-2018 to open the park to oil exploration, raising concern from conservationists. In 2014, independent researchers accused a British oil company, SOCO, of bribing DRC military commanders to intimidate opponents of oil exploration in Virunga. SOCO later announced that it had ceased operations there. "], "subsections": [{"section_title": "The Mining Sector: Policy Concerns", "paragraphs": ["DRC's \"conflict minerals\" are associated with the informal artisanal mining sector in the east. As of 2016, U.N. sanctions monitors reported that industry-led due-diligence measures had deprived armed groups of some opportunities to benefit from illicit mining of tin, tantalum, and tungsten, but that \"supply chains face numerous challenges, such as the involvement of FARDC elements, corruption of government officials and smuggling and leakage of minerals from non-validated mining sites into the legitimate supply chain.\" Gold smuggling through Uganda and Rwanda, and via intermediaries in the Gulf, reportedly continues to provide financing for armed groups. Mineral smuggling also arguably continues to deprive the state of revenues.", "DRC's industrial mining operations have drawn a different set of concerns. The organization Global Witness has described DRC's mining parastatal G\u00e9camines\u2014headed by Albert Yuma, a prominent Congolese businessman\u2014as central to corrupt networks that it labels a \"regime cash machine.\" In 2012, the IMF ended its concessional loan program due to a lack of transparency in state mining contracts involving G\u00e9camines. Dan Gertler, an Israeli businessman closely tied to President Kabila, has drawn particular international attention due to deals in which he has flipped state-held mining concessions for large profits. In recent years, firms linked to Gertler have been targeted in corruption probes in the United States, Canada, and the UK. In 2017 and 2018, the Trump Administration imposed sanctions on Gertler and various firms linked to him, asserting that he \"used his close friendship with ... Kabila to act as a middleman for mining asset sales in the DRC.\" The Department of the Treasury cited an independent investigation that found DRC had lost over $1.36 billion in potential revenues from underpricing mining assets sold to firms linked to Gertler. Gertler has said he is being unfairly targeted, and that his success reflects his appetite for political risk and focus on DRC.", "In early 2018, the DRC government promulgated a new mining code that steeply elevates taxes and royalty payments that foreign mining firms will owe the state. President Kabila signed the law in the face of intense opposition from international firms, who objected to the government's decision to ignore \"stability clauses\" that would otherwise have protected existing contracts for 10 years. The new mining code appeared popular among Congolese, while adding to Western investor perceptions of risk."], "subsections": []}]}, {"section_title": "U.S. Policy", "paragraphs": ["The Trump Administration welcomed Tshisekedi's victory and has pledged to work with him (as noted), while strongly criticizing the process that delivered him the presidency. In March 2019, the Administration imposed targeted financial sanctions on three top CENI officials, citing \"persistent corruption\" and a \"flawed electoral process\" in which the CENI \"failed to ensure the vote reflected the will of the Congolese people.\" This followed the State Department's decision in February to prohibit U.S. entry visas for the same CENI officials, along with the outgoing National Assembly speaker, the head of DRC's Constitutional Court (which confirmed Tshisekedi's victory), and other, unnamed DRC officials, citing corruption and political repression. In a media interview, U.S. Assistant Secretary of State for African Affairs Tibor Nagy asserted that the 2018 vote was \"perhaps the most democratic election that Congo has ever known,\" while nonetheless acknowledging that it had been marked by \"enormous problems.\"", "Some observers view these various statements as contradictory, while others perceive a U.S. effort \"to help Tshisekedi to curb Kabila,\" and/or evidence of disagreements within the U.S. government on how to respond to the election results. The Administration's broad emphasis on encouraging trade and investment ties while countering \"great power competitors\" in Africa may contribute to its interest in establishing a positive relationship with Tshisekedi. China is DRC's largest trading partner by far, and Chinese firms are prominent in the mining sector. Russia has also intensified its outreach to the country, focusing on military cooperation. ", "Generally, the Trump Administration continued its predecessor's efforts to ensure an electoral transfer of power from Kabila to a new president, and has maintained a high-level focus on DRC human rights issues. Although the Administration initially discontinued the post of Special Envoy to the DRC and Great Lakes region (which the Obama Administration maintained from 2013 to 2016), regional specialist J. Peter Pham was named to the position in late 2018. The Administration has also expanded a policy, initiated under President Obama, of sanctioning DRC state security officials for human rights abuses and obstruction of democracy. In 2017, the Administration further broadened the scope of U.S. sanctions in DRC by issuing an Executive Order pertaining to global human rights abuses and corruption, and using it to designate a prominent businessman and close Kabila associate, Dan Gertler, and his firms, for sanctions. ", "As U.S. Permanent Representative to the U.N. in 2017-18, Ambassador Nikki Haley played a high-profile role in DRC policy by calling for fair elections and greater respect for human rights. Her trip to DRC in October 2017, during which she met with then President Kabila and called for elections by the end of 2018, appeared to spur the CENI's decision to announce an election date. U.S. diplomats then urged DRC authorities to adhere to the stated timetable and to confirm publicly that Kabila would not be a candidate. In February 2018, Ambassador Haley expressed concern about the electoral process and the government's failure to \"release political prisoners, end politically motivated prosecutions, and guarantee the rights of peaceful assembly and freedom of expression.\" U.S. officials simultaneously rejected opposition calls for a \"transition without Kabila\"\u2014that is, for Kabila to be replaced by a transitional government that would, in turn, organize elections\u2014as \"unconstitutional\" and contrary to the 2016 St. Sylvestre accord. ", "U.S. officials have called for a credible investigation into the murders of two U.N. sanctions investigators, U.S. citizen Michael Sharp and Swedish citizen Zaida Catal\u00e1n, in Kasai in 2017. U.N. sanctions monitors reported in mid-2018 that cooperation between DRC authorities and U.N. experts tasked with assisting DRC's investigation into the case had been \"deficient,\" adding that \"the Congolese security services have interfered with the investigations.\" A colonel in the FARDC was reportedly arrested in connection with the killings in December 2018."], "subsections": [{"section_title": "Foreign Assistance", "paragraphs": ["U.S. bilateral aid programs in DRC seek to promote stability, economic growth, health, good governance, education, security force professionalization, and military justice. The Trump Administration's FY2020 aid budget request includes $201 million in bilateral funding for DRC, which would be a 25% decrease compared to FY2018 actual allocations. FY2018 bilateral aid levels were, in turn, higher than prior years (see Table 1 below). The United States provides additional funds for emergency humanitarian aid, and for MONUSCO's budget under the U.N. system of assessed contributions for peacekeeping.", "The Trump Administration's evolving policy toward implementing the Child Soldiers Prevention Act of 2008 (CSPA) and the Trafficking Victims Protection Act (TVPA), as amended, may reshape U.S. aid programs in FY2019. The State Department has repeatedly designated DRC under CSPA (in response to state-backed militias' use of child soldiers) and ranked it as \"Tier III\" (worst) under the TVPA; both designations trigger legal prohibitions on aid, subject to a presidential waiver. In FY2018, President Trump partially waived both types of restrictions for DRC, as the prior Administration had done. For FY2019, in contrast, President Trump did not grant waivers for DRC, meaning\u2014pursuant to the TVPA\u2014that no \"nonhumanitarian, nontrade-related\" assistance may be provided to the government. In principle, this means that military aid is generally prohibited, along with certain economic aid implemented by, or in coordination with, the DRC government. Some discretion may be involved in interpreting and applying the restrictions. The Administration has not publicly detailed which programs are affected by the policy, but it has notified some U.S. aid implementers that their funding may be discontinued."], "subsections": []}, {"section_title": "Recent Congressional Actions", "paragraphs": ["In the 115 th Congress, attention toward DRC focused on deterring President Kabila from clinging to power. H.R. 6207 , which passed the House, would have codified the U.S. sanctions framework for DRC (currently imposed under Executive Orders) and potentially compelled additional designations. The Senate agreed to S.Res. 386 , which called on President Trump to use \"appropriate means\" to assist elections in DRC and \"deter further electoral calendar slippage and abuses against the people of Congo,\" among other provisions. The resolution also called on the DRC government to enable a credible independent investigation into the murders of the two U.N. sanctions investigators in Kasai. In the 114 th Congress, the Senate and House passed resolutions ( S.Res. 485 and H.Res. 780 ) expressing concern over DRC election delays and calling for punitive measures against those responsible for abusing human rights or undermining democracy. ", "More broadly, Congress often focused on human rights challenges in DRC, such as sexual violence, child soldiers, and the international trade in \"conflict minerals\" (see Appendix ). As discussed above (\" Foreign Assistance \"), legislative restrictions on certain types of aid for countries that, like DRC, use child soldiers (Title IV of P.L. 110-457 , the Child Soldiers Prevention Act of 2008 or CSPA, as amended) or have a poor record on human trafficking ( P.L. 106-386 , the Trafficking Victims Protection Act or TVPA, as amended) have affected U.S. engagement and aid funding. The Administration's decision not to issue waivers for DRC in FY2019 has led to the suspension of military assistance and may have a significant impact on other U.S. programs and funding, although the full extent has not been publicly detailed.", "For the past decade, Congress has placed conditions on U.S. military aid to neighboring countries\u2014at times specifically targeting Rwanda and/or Uganda\u2014in order to deter proxy involvement in conflicts in DRC. Most recently, the Consolidated Appropriations Act, 2019, restricts International Military Education and Training (IMET) funds for any government in Africa's Great Lakes region until the Secretary of State reports that it is not involved in \"destabilizing activities in a neighboring country\" (\u00a77042([a] of Division F, P.L. 116-6 ). ", "Members continue to debate the impact of Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( P.L. 111-203 ), requiring the Securities and Exchange Commission (SEC) to regulate the disclosure by U.S. firms of their use of designated \"conflict minerals\" originating in DRC or neighboring states. The SEC issued a regulatory rule in 2012 but a court challenge partially stayed its implementation in 2014. In January 2017, the then acting SEC chairman directed staff to \"consider whether the 2014 guidance is still appropriate and whether any additional relief is appropriate in the interim.\" During the 115 th Congress, many Members in the House backed legislation that would have repealed Section 1502 or prohibited its implementation, asserting that the provision has imposed burdensome compliance costs on U.S. firms and/or is harming the Congolese people by deterring trade and investment. Examples included H.R. 4248 , H.R. 10 (\u00a7862), and H.R. 3354 (\u00a71108 of Division D). Other Members defended Section 1502 as an important contribution to international efforts to stabilize DRC."], "subsections": []}]}, {"section_title": "Outlook and Issues for Congress", "paragraphs": ["Achieving greater stability in DRC\u2014a U.S. regional policy goal for over two decades\u2014may depend on how President Tshisekedi and former president Kabila navigate their respective roles in policymaking, and how their rivals\u2014such as Martin Fayulu, Moise Katumbi, and Jean-Pierre Bemba\u2014choose to pursue their interests. Instability in DRC may be rooted in local-level grievances\u2014namely, \"poverty, unemployment, corruption, criminality, and poor access to land, justice, and education\" \u2014but such issues, and the decision by some to take up arms in response, have often been inflamed by absent, biased, or abusive political leadership. Events in the turbulent surrounding region\u2014notably, rising tensions between Uganda and Rwanda, which have historically intervened in DRC when they feel their interests are threatened\u2014may also impact DRC's stability. Humanitarian crises in neighboring South Sudan, Central African Republic, and Burundi will likely continue to divert international attention and resources. ", "The Trump Administration has pledged to work with DRC's new president to advance reforms and economic prosperity, but similar previous efforts have been stymied by entrenched dysfunction, which appears to benefit certain elites. If President Tshisekedi owes his political survival to former president Kabila, and his electoral victory to flawed political institutions, he may be unlikely or unable to confront these problems. Reforming the security apparatus and the role of G\u00e9camines in governing the mining sector are core challenges that could also be dangerous for a new and largely untested president to take on. Restrictions on U.S. bilateral aid stemming from DRC's designation under child soldiers and trafficking in persons legislation (see \" Foreign Assistance \") may also constrain the kinds of support that the United States is able to provide for the reform of state institutions, including the military. Policymakers in Congress and the executive branch are likely to continue to debate the relative effectiveness of various tools for exerting U.S. influence in DRC, such as diplomacy, sanctions, foreign assistance, and U.S. actions in multilateral forums. "], "subsections": [{"section_title": "Appendix. Selected Enacted Legislation", "paragraphs": ["P.L. 116-6 , Consolidated Appropriations Act, 2019 . Restricts certain International Military Education and Training (IMET) funds for any government in Central Africa' s Great Lakes region until the Secretary of State reports that it is not involved in \"destabilizing activities\" in a neighboring country. Similar provisions were included in appropriations measures for FY2017-FY2018. P.L. 114-231 , Eliminate, Neutralize, and Disrupt Wildlife Trafficking Act of 2016 (October 7, 2016). Requires the State Department annually to provide to Congress a list of foreign countries that are major sources, transit points, or consumers of wildlife trafficking products; urges the United States to continue providing certain military assistance to African security forces for countering wildlife trafficking and poaching; and other provisions to address the illegal trade in endangered and threatened wildlife. P.L. 113-235 , Consolidated and Further Continuing Appropriations Act, 2015 (December 16, 2015). Restricted Foreign Military Financing (FMF) for Rwanda, with various exceptions, unless the Secretary of State certified that Rwanda is \"implementing a policy to cease political, military and/or financial support to armed groups\" in DRC that have violated human rights or are involved in illegal exports; among other provisions. P.L. 113-76 , Consolidated Appropriations Act, 2014 (January 17, 2014). Restricted FMF for Rwanda, with various exceptions, unless the Secretary of State certified that Rwanda \"is taking steps to cease ... support to armed groups\" in DRC implicated in human rights violations or illegal exports of certain goods. P.L. 113-66 , National Defense Authorization Act for Fiscal Year 2014 (December 26, 2013). Authorized certain types of Defense Department support for foreign forces participating in operations against the LRA (as had P.L. 112-81 , the National Defense Authorization Act for Fiscal Year 2012). P.L. 112-239 , Nat ional Defense Authorization Act for Fiscal Year 2013 (January 2, 2013). Mandated the Secretary of the Treasury and Secretary of State to impose travel and financial sanctions against individuals found by the President to have provided support to the M23 rebellion, subject to a waiver. P.L. 112-74 , Consolidated Appropriations Act, 2012 (December 23, 2011). Restricted FMF for Rwanda and Uganda, with some exceptions, if the Secretary of State found that they were providing support to armed groups in DRC that violated human rights or were involved in illegal mineral exports. P.L. 111-212 , Supplemental Appropriations Act, 2010 (July 29, 2010). Provided $15 million in Economic Support Fund (ESF) for emergency security and humanitarian aid for civilians, particularly women and girls, in eastern DRC. P.L. 111-203 , Dodd-Frank Wall Street Reform and Consumer Protection Act (July 21, 2010). Required the Securities and Exchange Commission (SEC) to issue a regulation requiring U.S.-listed companies whose products rely on certain designated \"conflict minerals\" to disclose whether such minerals originated in DRC or adjoining countries, and to describe related due diligence measures. P.L. 111-172 , Lord's Resistance Army Disarmament and Northern Uganda Recovery Act (May 24, 2010). Directed the President to submit to Congress a strategy to guide U.S. support for multilateral efforts to eliminate the threat posed by the LRA, among other provisions. P.L. 111-117 , Consolidated Appropriations Act, 2010 (December 16, 2009). Restricted FMF grants for Rwanda if it was found to support DRC armed groups. P.L. 111-84 , National Defense Authorization Act for Fiscal Year 2010 (October 28, 2009). Required the executive branch to produce a map of mineral-rich areas under the control of armed groups in DRC. P.L. 111-32 , Supplemental Appropriations Act, 2009 (June 24, 2009). Provided $15 million in Peacekeeping Operations (PKO) funds for DRC, which were used to train a Light Infantry Battalion in an effort to promote security sector reform. P.L. 110-457 (Title IV), William Wilberforce Trafficking Victims Protection Reauthorization Act of 2008 (December 23, 2008). Prohibits certain security assistance for countries identified by the Secretary of State as supporting the recruitment and use of child soldiers, and to countries ranked as Tier 3 (worst) in the State Department's annual Trafficking in Persons Report , subject to waiver provisions (pursuant to P.L. 106-386 ; see below). P.L. 109-456 , Democratic Republic of the Congo Relief, Security, and Democracy Promotion Act of 2006 (December 22, 2006). Outlined U.S. policy toward DRC. Set a minimum funding level for bilateral foreign aid in FY2006-FY2007 and stated the sense of Congress that the Secretary of State should withhold certain aid if the DRC government was making insufficient progress toward policy objectives. Authorized the Secretary of State to withhold certain types of foreign assistance for countries acting to destabilize DRC. P.L. 106-386 (Division A), Trafficking Victims Protection Act of 2000 (October 28, 2000). Established a ranking system for measuring government efforts to eliminate human trafficking, and prohibits certain types of U.S. aid to the worst-ranked (\"Tier 3\") countries."], "subsections": []}]}]}}
{"id": "RL34544", "title": "Iran\u2019s Nuclear Program: Status", "released_date": "2019-05-10T00:00:00", "summary": ["Iran's nuclear program began during the 1950s. The United States has expressed concern since the mid-1970s that Tehran might develop nuclear weapons. Iran's construction of gas centrifuge uranium enrichment facilities is currently the main source of proliferation concern. Gas centrifuges can produce both low-enriched uranium (LEU), which can be used in nuclear power reactors, and weapons-grade highly enriched uranium (HEU), which is one of the two types of fissile material used in nuclear weapons.", "Is Iran Capable of Building Nuclear Weapons?", "The United States has assessed that Tehran possesses the technological and industrial capacity to produce nuclear weapons. But Iran has not yet mastered all of the necessary technologies for building such weapons. Whether Iran has a viable design for a nuclear weapon is unclear. A National Intelligence Estimate made public in 2007 assessed that Tehran \"halted its nuclear weapons program\" in 2003. The estimate, however, also assessed that Tehran is \"keeping open the option to develop nuclear weapons\" and that any decision to end a nuclear weapons program is \"inherently reversible.\" U.S. intelligence officials have reaffirmed this judgment on several occasions.", "Obtaining fissile material is widely regarded as the most difficult task in building nuclear weapons. As of January 2014, Iran had produced an amount of LEU containing up to 5% uranium-235, which, if further enriched, could theoretically have produced enough HEU for as many as eight nuclear weapons. Iran had also produced LEU containing nearly 20% uranium-235; the total amount of this LEU, if it had been in the form of uranium hexafluoride and further enriched, would have been sufficient for a nuclear weapon.. After the Joint Plan of Action, which Tehran concluded with China, France, Germany, Russia, the United Kingdom, and the United States (collectively known as the \"P5+1\"), went into effect in January 2014, Iran either converted much of its LEU containing nearly 20% uranium-235 for use as fuel in a research reactor located in Tehran, or prepared it for that purpose. Iran has diluted the rest of that stockpile so that it contained no more than 5% uranium-235. In addition, Tehran has implemented various restrictions on, and provided the IAEA with additional information about, its nuclear program pursuant to the July 2015 Joint Comprehensive Plan of Action (JCPOA), which Tehran concluded with the P5+1.", "Although Iran claims that its nuclear program is exclusively for peaceful purposes, the program has generated considerable concern that Tehran is pursuing a nuclear weapons program. The U.N. Security Council responded to Iran's refusal to suspend work on its uranium enrichment program by adopting several resolutions that imposed sanctions on Tehran. Despite evidence that sanctions and other forms of pressure have slowed the program, Iran continued to enrich uranium, install additional centrifuges, and conduct research on new types of centrifuges. Tehran has also worked on a heavy-water reactor, which was a proliferation concern because its spent fuel would have contained plutonium\u2014the other type of fissile material used in nuclear weapons. However, plutonium must be separated from spent fuel\u2014a procedure called \"reprocessing.\" Iran has said that it will not engage in reprocessing.", "Who Is Monitoring Iran's Nuclear Program?", "The International Atomic Energy Agency (IAEA) monitors Iran's nuclear facilities and has verified that Tehran's declared nuclear facilities and materials have not been diverted for military purposes. The agency has also verified that Iran's compliance with the JCPOA. On the JCPOA's Implementation Day, which took place on January 16, 2016, all of the previous Security Council resolutions' requirements were terminated. The nuclear Nonproliferation Treaty (NPT) and U.N. Security Council Resolution 2231, which the council adopted on July 20, 2015, compose the current legal framework governing Iran's nuclear program. Iran has continued to comply with the JCPOA and Resolution 2231. Iran and the IAEA agreed in 2007 on a work plan to clarify outstanding questions regarding Tehran's nuclear program, most of which concerned possible Iranian procurement activities and research directly applicable to nuclear weapons development. A December 2015 report to the IAEA Board of Governors from agency Director-General Yukiya Amano contains the IAEA's \"final assessment on the resolution\" of these outstanding issues.", "How Soon Could Iran Produce a Nuclear Weapon?", "Then-Under Secretary of State for Political Affairs Wendy Sherman explained during an October 2013 hearing of the Senate Committee on Foreign Relations that Iran would need as much as one year to produce a nuclear weapon if the government decided to do so. At the time, Tehran would have needed two to three months to produce enough weapons-grade HEU for a nuclear weapon. Iran's compliance with the JCPOA has increased that time frame to one year, according to U.S. officials. These estimates apparently assume that Iran would use its declared nuclear facilities to produce fissile material for a weapon. However, Tehran would probably use covert facilities for this purpose; Iranian efforts to produce fissile material for nuclear weapons by using its known nuclear facilities would almost certainly be detected by the IAEA."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["Iran's nuclear program began during the 1950s. Construction of a U.S.-supplied research reactor, called the Tehran Research Reactor (TRR), located in Tehran began in 1960; the reactor went critical in 1967. During the 1970s, Tehran pursued an ambitious nuclear power program. According to contemporaneous U.S. documents, Iran wanted to construct 10-20 nuclear power reactors and produce more than 20,000 megawatts of nuclear power by 1994. Iran also began constructing a light-water nuclear power reactor near the city of Bushehr, and it considered obtaining uranium enrichment and reprocessing technology."], "subsections": [{"section_title": "Proliferation Concerns", "paragraphs": ["Iran took steps to demonstrate that it was not pursuing nuclear weapons. For example, Tehran signed the nuclear Nonproliferation Treaty (NPT) in 1968 and ratified it in 1970. Iran also submitted a draft resolution to the U.N. General Assembly in 1974 that called for establishing a nuclear-weapons-free zone in the Middle East. Nevertheless, mid-1970s U.S. intelligence reports expressed concern that Iran might pursue a nuclear weapons program. Although Iran cancelled its nuclear program after its 1979 revolution, a 1981 Department of State draft paper argued that Iran might develop a nuclear weapons program in response to a then-suspected Iraqi nuclear weapons program, although Iran was not one of several countries of \"near to medium term proliferation concern\" cited in the paper. ", "Tehran \"reinstituted\" its nuclear program in 1982. According to International Atomic Energy Agency (IAEA) reports, Iran conducted experiments during the 1980s and early 1990s related to uranium conversion, heavy-water production, and nuclear reactor fuel fabrication. A 1985 National Intelligence Council report, which cited Iran as a potential \"proliferation threat,\" stated that Tehran was \"interested in developing facilities that ... could eventually produce fissile material that could be used in a [nuclear] weapon.\" The report, however, added that it \"would take at least a decade\" for Iran to do so. A 1986 CIA report went further, citing \"the advantage of long-range missiles to deliver warheads quickly, virtually without warning, and-unlike aircraft-without facing any defense\" as a \"factor\" that would incentivize Iranian development of nuclear weapons \"in the late 1990s.\" A 1995 U.S. intelligence report stated that Iran was \"aggressively pursuing a nuclear weapons capability and, if significant foreign assistance were provided, could produce a weapon by the end of the decade.\" Somewhat less urgently, an Arms Control and Disarmament Agency report covering 1995 observed that \"Iran's rudimentary program has apparently met with limited success so far, [but] we believe Iran has not abandoned its efforts to expand its nuclear capabilities with a view to supporting nuclear weapons development.\" ", "In 1996 congressional testimony, then-Director of Central Intelligence John Deutch described Iranian efforts to acquire from the former Soviet Union fissile material for a nuclear weapon:", "In an attempt to shorten the timeline to a weapon, Iran has launched a parallel effort to purchase fissile material, mainly from sources in the former Soviet Union.", "Iranian agents have contacted officials at nuclear facilities in Kazakhstan on several occasions, attempting to acquire nuclear-related materials. For example, in 1992, Iran unsuccessfully approached the Ulba Metallurgical Plant to obtain enriched uranium. In 1993, three Iranians believed to have had connections to Iran's intelligence service were arrested in Turkey while seeking to acquire nuclear material from smugglers from the former Soviet Union.", "More recently, the Iranian government has said that it plans to expand its reliance on nuclear power to generate electricity. This program will, Tehran says, reduce Iran's oil and gas consumption and allow the country to export additional fossil fuels; the previous Iranian regime also made this argument. Iran has begun to operate the Bushehr reactor, and Tehran says it intends to build additional reactors to generate 20,000 megawatts of power within the next 20 years. The 2015 Joint Comprehensive Plan of Action (JCPOA) requires Iran to refrain from building heavy-water-moderated reactors for 15 years. Pursuant to the agreement, Iran has pledged to refrain from constructing any such reactors indefinitely. Iranian officials say that Tehran has begun design work on its first indigenously produced light-water reactor, to be constructed at Darkhovin. According to official U.S. and Iranian sources, France agreed to construct the reactor during the 1970s but ended the project after the 1979 revolution in Iran. Atomic Energy Organization of Iran (AEOI) President Ali Akbar Salehi stated in September 2016 that \"we are almost about to sign a contract for designing\" the reactor, \"but it will take a rather long time.\""], "subsections": []}, {"section_title": "Scope and Purpose of Iran's Nuclear Program", "paragraphs": ["Iranian officials have repeatedly asserted that the country's nuclear program is exclusively for peaceful purposes (see Appendix A ). Nevertheless, prior to the JCPOA, the United States and other governments argued that Iran may be pursuing, at a minimum, the capability to produce nuclear weapons. Discerning a peaceful nuclear program from a nuclear weapons program can be difficult because much nuclear technology is dual-use. In addition, military nuclear programs may coexist with civilian programs, even without an explicit governmental decision to produce nuclear weapons. Jose Goldemberg, Brazil's former secretary of state for science and technology, observed that a country developing the capability to produce nuclear fuel", "does not have to make an explicit early [political] decision to acquire nuclear weapons. In some countries, such a path is supported equally by those who genuinely want to explore an energy alternative and by government officials who either want nuclear weapons or just want to keep the option open.", "Some analysts argue that several past nuclear programs, such as those of France, Sweden, and Switzerland, illustrate this approach. A Swedish official involved in that country's nuclear weapons program \"argued that the main aim should be the generation of nuclear energy, with plutonium production, which would make possible the manufacture of nuclear weapons as a side-effect.\" Moreover, a 1975 U.S. intelligence assessment argued that countries might develop an \"unweaponized\" nuclear explosive device \"to further their political, and even military, objectives.\" ", "The main source of proliferation concern generated by Iran's nuclear program has been Tehran's construction of gas centrifuge uranium-enrichment facilities. Gas centrifuges enrich uranium by spinning uranium hexafluoride gas at high speeds to increase the concentration of the uranium-235 isotope. Such centrifuges can produce both low-enriched uranium (LEU), which can be used in nuclear power reactors, and highly enriched uranium (HEU), which is one of the two types of fissile material used in nuclear weapons. HEU can also be used as fuel in certain types of nuclear reactors. Iran also has a uranium-conversion facility, which converts uranium ore concentrate into several compounds, including uranium hexafluoride. This program is currently constrained by the JCPOA. German Minister of State Niels Annen argued in a February 19, 2019, speech that the JCPOA \"effectively prevents Iran from acquiring a nuclear weapon for as long as the agreement stands.\"", "However, following the May 8, 2018, U.S. announcement that the United States would no longer participate in the JCPOA and would reimpose sanctions that had been suspended pursuant to the agreement, Iranian President Hassan Rouhani ordered the AEOI to \"go ahead with adequate preparations to resume enrichment at the industrial level without any limit.\" A year later, Rouhani announced additional Iranian responses. (see Appendix C , \"Multilateral Diplomacy Concerning Iran's Nuclear Program\"). Iranian officials have asserted that the country can rapidly reconstitute its fissile material production capability, although Tehran has adhered to the JCPOA-specified limits. ", "Iran claims that it wants to produce LEU fuel for its planned light-water nuclear power reactors, as well as the Tehran Research Reactor (TRR) and other planned future research reactors. The latter reactors will be used to produce isotopes for medical purposes, according to Tehran. Although Iran has expressed interest in purchasing nuclear fuel from other countries, the government asserts that the country should have an indigenous enrichment capability as a hedge against possible fuel supply disruptions. President Rouhani ordered AEOI President Salehi on December 13, 2016, to provide a plan \"for designing and manufacturing nuclear-propulsion system to be used in maritime transportation,\" as well as producing fuel for such a system. However, Iranian officials have indicated that Tehran would not produce enriched uranium exceeding JCPOA-established enrichment limits. In a January 2018 letter, Iran informed the IAEA of the government's \"decision \u2026 to construct naval nuclear propulsion in future.\" Tehran explained in an April 2018 letter to the agency that \"[f]or the first five years, no [nuclear] facility will be involved\" and the \"[n]uclear fuelled engines/reactors will be used for civilian purpose.\" Salehi stated in early February 2019 that at the project will take \"at least 15 years\" to complete. ", "A reactor moderated by heavy water, which Iran was constructing at Arak, has also been a source of concern. Although Tehran says that the reactor is intended for the production of radioisotopes for medical purposes, the reactor previously under construction was a proliferation concern because its spent fuel would have contained plutonium well-suited for use in nuclear weapons. Spent nuclear fuel from nuclear reactors contains plutonium, the other type of fissile material used in nuclear weapons. In order to be used in nuclear weapons, however, plutonium must be separated from the spent fuel\u2014a procedure called \"reprocessing.\" Iran has said that it will not engage in reprocessing. This reactor is designed to use natural uranium fuel, which does not require enrichment. Iran has rendered the Arak reactor's original core inoperable pursuant to the JCPOA, which also commits Tehran to redesign and rebuild the reactor based on a design agreed to by the P5+1.", "In addition to the dual-use nature of the nuclear programs described above, Iran's inconsistent cooperation with the IAEA contributed to suspicions that Tehran had a nuclear weapons program. In the past, Iran has taken actions that interfered with the agency's investigation of its nuclear program, including concealing nuclear activities and providing misleading statements. Then-IAEA Director-General Mohamed ElBaradei explained in a 2008 interview that Iran's cooperation lagged behind IAEA demands:", "[T]hey [the Iranians] have concealed things from us in the past, but that doesn't prove that they are building a bomb today. They continue to insist that they are interested solely in using nuclear power for civilian purposes. We have yet to find a smoking gun that would prove them wrong. But there are suspicious circumstances and unsettling questions. The Iranians' willingness to cooperate leaves a lot to be desired. Iran must do more to provide us with access to certain individuals and documents. It must make a stronger contribution to clarifying the last unanswered set of questions\u2014those relating to a possible military dimension of the Iranian nuclear program.", "Consistent with ElBaradei's statement, IAEA Director-General Yukiya Amano explained in a 2012 interview that the IAEA did not claim that \"Iran [has] made a decision to obtain nuclear weapons.\" Notably, Tehran has implemented various restrictions on, and provided the IAEA with additional information about, its uranium enrichment program and heavy-water reactor program pursuant to the JCPOA.", "Iran and the IAEA agreed in August 2007 on a work plan to clarify the outstanding questions regarding Tehran's nuclear program, most of which concerned possible Iranian procurement activities and research directly applicable to nuclear weapons development. A December 2015 report to the IAEA Board of Governors from agency Director-General Amano contains the IAEA's \"final assessment on the resolution\" of these outstanding issues. ", "Iran also has extensive programs to develop ballistic missiles and cruise missiles. (For more details on Iran's ballistic missile program, see CRS Report R42849, Iran's Ballistic Missile and Space Launch Programs , by Steven A. Hildreth.)"], "subsections": []}]}, {"section_title": "Recent Nuclear Controversy", "paragraphs": ["The public controversy over Iran's nuclear program began in August 2002, when the National Council of Resistance on Iran (NCRI), an Iranian exile group, revealed information during a press conference (some of which later proved to be accurate) that Iran had built nuclear-related facilities at Natanz and Arak that it had not revealed to the IAEA. The United States had been aware of at least some of these activities, according to knowledgeable former officials. During the mid-1990s, Israel's intelligence services detected Iranian \"efforts to develop a military nuclear industry,\" according to a 2004 Israeli Knesset committee report. ", "Iran ratified the nuclear Nonproliferation Treaty (NPT) in 1970. States-parties to the treaty are obligated to conclude a comprehensive safeguards agreement with the IAEA; Tehran concluded such an agreement in 1974. In the case of nonnuclear-weapon states-parties to the treaty (of which Iran is one), such agreements are designed to enable the IAEA to detect the diversion of nuclear material from peaceful purposes to nuclear weapons uses, as well as to detect undeclared nuclear activities and material. As a practical matter, however, the IAEA's ability to inspect and monitor nuclear facilities, as well as obtain relevant information, pursuant to a comprehensive safeguards agreements is limited to facilities that have been declared by the government. Additional Protocols (see text box below) to IAEA safeguards agreements increase the agency's authority to inspect certain facilities and demand additional information from states-parties, thereby augmenting the agency's ability to investigate clandestine nuclear facilities and activities . The IAEA's statute requires the agency's Board of Governors to refer cases of noncompliance with safeguards agreements to the U.N. Security Council. Prior to the NCRI's revelations, the IAEA had expressed concerns that Iran had not been providing the agency with all relevant information about its nuclear programs, but the IAEA had never found Iran in violation of its safeguards agreement.", "In fall 2002, the IAEA began to investigate Iran's nuclear activities at Natanz and Arak; inspectors visited the sites the following February. During a June 2003 meeting, the IAEA board first expressed \"concern\" about Iran's past undeclared nuclear activities and urged Tehran to cooperate with the agency's investigation. The IAEA board's first resolution, which was adopted during a September 2003 meeting, called on Tehran to increase its cooperation with the agency's investigation and to suspend its uranium enrichment activities. (For more detail about Iran's nuclear organization, see Appendix B ).", "President Rouhani identified the Atomic Energy Organization of Iran (AEOI) as \"the authority that was,\" prior to the June 2003 IAEA board meeting, \"basically handling all political and technical issues concerning\" the agency's investigation of Iran's nuclear program. Following that meeting, Iran's Supreme National Security Council created the Supreme Nuclear Committee, which was composed of officials from various agencies, including the AEOI and the ministries of defense, foreign affairs, and intelligence. After the IAEA board adopted its September 2003 resolution, the government placed Rouhani, who was the head of the Supreme National Security Council at the time, in charge of the negotiations concerning Iran's nuclear program. Rouhani explained the resulting nuclear decisionmaking process in 2011:", "Even though some people thought the nuclear team was operating with complete prerogatives, the facts were otherwise. The work procedure for every issue was that we first had to discuss the matter in the Supreme Nuclear Committee, then we took that result to the Meeting of Leaders, and finally we acted in accordance with the decision of the leaders.", "In October 2003, Iran concluded an agreement with France, Germany, and the United Kingdom, collectively known as the \"E3,\" to suspend its enrichment activities, sign and implement an Additional Protocol to its IAEA safeguards agreement, and comply fully with the IAEA's investigation. As a result, the IAEA board decided to refrain from referring the matter to the U.N. Security Council, despite U.S. advocacy for such a referral. Statements from current and former Iranian officials indicate that, during fall 2003, Tehran feared that the United States might use Security Council referral as a means to undertake military action or other coercive measures against Iran. Rouhani argued in February 2005 that the United States would not take such action as long as Iran was cooperating with the IAEA and negotiating with the E3.", "After October 2003, Iran continued some of its enrichment-related activities, but Tehran and the E3 agreed in November 2004 to a more detailed suspension agreement. During negotiations between fall 2003 and summer 2005, both Iran and the E3 offered a number of proposals, although the two sides never reached agreement. The IAEA's investigation, as well as information Tehran provided after the October 2003 agreement, ultimately revealed that Iran had engaged in a variety of clandestine nuclear-related activities, some of which violated Iran's safeguards agreement. These activities included plutonium separation experiments, uranium enrichment and conversion experiments, and importing various uranium compounds.", "Current and former Iranian officials have depicted a government deeply divided during this time over diplomatic approaches regarding its nuclear program. For example, Seyed Hossein Mousavian, who was Iran's spokesperson during the government's 2003-2005 negotiations with France, Germany, and the United Kingdom (collectively known as the \"E3\"), explained that in 2003 \"there were two schools of thought in Iran. One group advocated engagement with the West, while others were proponents of resistance.\" President Rouhani, who headed the 2003-2005 negotiations, explained during a July 2005 interview that certain parts of the Iranian government opposed the diplomatic track, adding that \"[t]he problems included both disharmony and sabotage.\" Indeed, Rouhani later argued that Iran's Supreme National Security Council took charge of the diplomacy concerning the nuclear program because ", "the Foreign Ministry was not able to be responsible for this task in a good way because some organizations did not pay sufficient attention to this ministry's decisions, especially since there had been disagreements for months between the Foreign Ministry and the Atomic Energy Organization. ", "In a 2005 article, an Iranian Foreign Ministry official explained that the decision to delegate responsibility for the nuclear issue to the Supreme National Security Council was ", "aimed at creating domestic consensus and preventing any possible discrepancies in the decision making process and its implementation at the national level. It was demonstrated in practice that this decision was crucial in preventing the friction between the government, parliament and all other relevant agencies.", "Iran resumed uranium conversion in August 2005 under the leadership of then-President Ahmadinejad, who had been elected two months earlier. On September 24, 2005, the IAEA Board of Governors adopted a resolution that, for the first time, found Iran to be in noncompliance with its IAEA safeguards agreement. The board, however, did not refer Iran to the Security Council, choosing instead to give Tehran additional time to comply with the board's demands. Iran announced in January 2006 that it would resume research and development on its centrifuges at Natanz. In response, the IAEA board adopted a resolution on February 4, 2006, that referred Iran's case to the Security Council. Two days later, Tehran announced that it would stop implementing its Additional Protocol. ", "In March 2006, the U.N. Security Council President issued a statement, which was not legally binding, that called on Iran to \"take the steps required\" by the February IAEA board resolution. The council subsequently adopted six resolutions concerning Iran's nuclear program: 1696 (July 2006), 1737 (December 2006), 1747 (March 2007), 1803 (March 2008), 1835 (September 2008), and 1929 (June 2010). The second, third, fourth, and sixth resolutions imposed a variety of restrictions on Iran. In addition, these resolutions required Iran to cooperate fully with an ongoing IAEA investigation of its nuclear activities, suspend its uranium enrichment program, suspend its construction of a heavy-water reactor and related projects, and ratify the Additional Protocol to Iran's IAEA safeguards agreement. Resolution 1929 also required Tehran to refrain from \"any activity related to ballistic missiles capable of delivering nuclear weapons\" and to comply with a modified provision (called code 3.1) of Iran's subsidiary arrangement to its IAEA safeguards agreement. Beginning in June 2006, Iran later held multiple rounds of talks with China, France, Germany, Russia, the United Kingdom, and the United States, collectively known as the \"P5+1,\" concerning various proposals for resolving the nuclear dispute. Saeed Jalili, then-head of Iran's Supreme National Security Council, conducted Iran's nuclear negotiations.", "Following his June 2013 election, Iranian President Rouhani delegated the \"nuclear negotiations portfolio\" to the Foreign Ministry, he explained in a September 2013 interview. The AEOI continued to be responsible for Tehran's negotiations with the IAEA. Supreme Leader Ayatollah Ali Khamene'i was the ultimate decisionmaker regarding Iran's diplomacy concerning the Joint Comprehensive Plan of Action. Then-Under Secretary of State for Political Affairs Wendy Sherman explained during a December 2013 hearing that Khamene'i \"is the only one who really holds the nuclear file\u2014makes the final decisions about whether Iran will reach a comprehensive agreement to forego much of what it has created in return for the economic relief it seeks.\" ", "The Supreme Leader remained in charge of decisions regarding the nuclear program following Rouhani's 2013 election. Deputy Foreign Minister Seyed Abbas Araqchi explained in July 2016 that the nuclear issue was \"under the senior management\" of Khamene'i, adding that ", "With regards the major foreign policy issues the more the decision making progresses and enters important levels the higher the level of engagement; it moves up from the ministry to the administration level and from the administration to the level of Supreme National Security Council and at the end to the supreme leader.", "Iran and the P5+1 met three times before concluding the Joint Plan of Action (JPA) on November 24, 2013. This agreement placed certain limitations on Iran's nuclear program and established an approach toward reaching a long-term comprehensive solution to international concerns regarding Iran's nuclear program. The two sides began implementing the JPA on January 20, 2014. The P5+1 and Iran reached a framework of a Joint Comprehensive Plan of Action (JCPOA) on April 2, 2015, and finalized the JCPOA on July 14, 2015. The parties began implementing the JCPOA on January 16, 2016. On that day, all of the previous Security Council resolutions' requirements were terminated. The NPT and U.N. Security Council Resolution 2231 compose the current legal framework governing Iran's nuclear program.", "On May 8, 2018, President Donald Trump announced that the United States would no longer participate in the JCPOA. The United States subsequently reimposed sanctions that had been suspended pursuant to the agreement. Other P5+1 countries immediately reiterated their support for the JCPOA and announced that they intend to fulfill their JCPOA commitments and protect their companies from the effects of any U.S.-imposed sanctions. President Rouhani has pledged to continue implementing the accord, provided Iran continues to receive the economic benefits of the agreement. (For more information about multilateral diplomacy concerning Iran's nuclear program, including the JCPOA's status, see Appendix C . For more information about the Trump administration's JCPOA policy, see Appendix D .) "], "subsections": [{"section_title": "Iran's Cooperation with the IAEA", "paragraphs": ["As noted, the IAEA investigation of Iran's nuclear program began in 2002. Iran and the IAEA agreed in August 2007 on a work plan to clarify the outstanding questions regarding Tehran's nuclear program. Most of these issues, which had contributed to suspicions that Iran had been pursuing a nuclear weapons program, were essentially resolved by June 2008.However, then-IAEA Director-General ElBaradei told the IAEA Board of Governors on June 2, 2008, that there is \"one remaining major [unresolved] issue,\" which concerns questions regarding \"possible military dimensions to Iran's nuclear programme.\""], "subsections": [{"section_title": "Possible Military Dimensions", "paragraphs": ["Iran and the IAEA subsequently held a series of discussions regarding these issues. The agency provided Iran with documents or, in some cases, descriptions of documents, which had been provided to the IAEA by several governments. The documents indicated that Iranian entities may have conducted studies related to nuclear weapons development. The subjects of these studies included uranium conversion, missile reentry vehicles for delivering nuclear warheads, and conventional explosives used in nuclear weapons. Iranian officials have claimed that the documents are not authentic, but ElBaradei told the IAEA board on June 17, 2009, that there was \"enough in these alleged studies to create concern in the minds of our professional inspectors.\" Iranian officials acknowledged that some of the information in the documents is accurate, but they argued that the activities described were exclusively for nonnuclear purposes. Tehran has provided some relevant information about these matters to the IAEA, but ElBaradei reported in August 2009 that the government should \"provide more substantive responses\" to the IAEA, as well as \"the opportunity to have detailed discussions with a view to moving forward on these issues, including granting the agency access to persons, information and locations identified in the documents.\" ", "IAEA Director-General Amano issued a report to the IAEA board in November 2011 stating that Iran had not \"engaged with the agency in any substantive way\" on the alleged studies since August 2008. According to this report, which provided the most detailed account to date of the IAEA's evidence regarding Iran's suspected nuclear weapons-related activities, the agency has \"credible\" information that Iran has carried out activities \"relevant to the development of a nuclear explosive device,\" including", "acquisition of \"nuclear weapons development information and documentation,\" work to develop \"an indigenous design of a nuclear weapon including the testing of components,\" efforts \"to procure nuclear related and dual use equipment and materials by military related individuals and entities,\" and work to \"develop undeclared pathways for the production of nuclear material.\"", "Although some of these activities have civilian applications, \"others are specific to nuclear weapons,\" the report notes. Most of these activities were conducted before the end of 2003, though some may have continued. (See Appendix E and \" Nuclear Weapon Development Capabilities \" for more details.)", "The IAEA Board of Governors adopted a resolution on November 18, 2011, stating that \"it is essential\" for Iran and the IAEA \"to intensify their dialogue aiming at the urgent resolution of all outstanding substantive issues.\" IAEA and Iranian officials met 10 times between January 2012 and May 2013 to discuss what the agency termed a \"structured approach to the clarification of all outstanding issues related to Iran's nuclear programme.\" However, during an October 2013 meeting, IAEA officials and their Iranian counterparts decided to adopt a \"new approach\" to resolving these issues. Iran signed a joint statement with the IAEA on November 11, 2013, describing a \"Framework for Cooperation.\" According to the statement, Iran and the IAEA agreed to \"strengthen their cooperation and dialogue aimed at ensuring the exclusively peaceful nature of Iran's nuclear programme through the resolution of all outstanding issues that have not already been resolved by the IAEA.\" Tehran subsequently provided the IAEA with information about several of the outstanding issues and later agreed in May 2014 to provide information to the agency by August 25, 2014, about five additional issues, including alleged Iranian research on high explosives and \"studies made and/or papers published in Iran in relation to neutron transport and associated modelling and calculations and their alleged application to compressed materials.\" Iran subsequently provided information about four of these issues."], "subsections": [{"section_title": "Road Map to Assessing Possible Military Dimensions", "paragraphs": ["The July 2015 JCPOA states that Tehran was to \"complete\" a series of steps set out in an Iran-IAEA \"Roadmap for Clarification of Past and Present Outstanding Issues.\" According to IAEA Director-General Amano, this road map, which the two sides concluded in July 2015, set out \"a process\" under the November 2013 JPA \"to enable the Agency, with the cooperation of Iran, to make an assessment of issues relating to possible military dimensions to Iran's nuclear programme.\" According to a December 2, 2015, report to the IAEA Board of Governors from Amano, \"[a]ll the activities contained in the road-map were implemented in accordance with the agreed schedule.\" The road map required Amano to present this report, which contains the agency's \"final assessment on the resolution\" of the aforementioned outstanding issues. ", "In response, the board adopted a resolution on December 15, 2015, that notes Iran's cooperation with the road map and \"further notes that this closes the Board's consideration\" of the \"outstanding issues regarding Iran's nuclear programme.\" Because the IAEA has verified that Iran has taken the steps required for Implementation Day to take effect, the board is no longer focused on either Iran's compliance with past Security Council resolutions or past issues concerning Iran's safeguards agreement. Instead, the board is focused on monitoring and verifying Iran's JCPOA implementation \"in light of\" United Nations Security Council Resolution 2231, which the council adopted on July 20, 2015. The December 2015 IAEA resolution requests the Director General to issue quarterly reports to the board regarding Iran's \"implementation of its relevant commitments under the JCPOA for the full duration of those commitments.\" The Director General is also to report to the IAEA Board of Governors and the Security Council \"at any time if the Director General has reasonable grounds to believe there is an issue of concern\" regarding Tehran's compliance with its JCPOA or safeguards obligations."], "subsections": []}, {"section_title": "Parchin", "paragraphs": ["Parchin is an Iranian military site. As part of its investigation into \"possible military dimensions\" of Iran's nuclear program, the IAEA requested that Tehran respond to information which the agency obtained from unnamed governments regarding activity at the military site. Information provided to IAEA indicated that in 2000 \"Iran constructed a large explosives containment vessel\" at Parchin to conduct experiments related to the development of nuclear weapons, according to Amano's November 2011 report. The report did not say whether Iran actually built the vessel or conducted these experiments. IAEA inspectors visited the site twice in 2005, but they did not visit the location \"believed to contain the building which houses the explosives chamber.\" The agency requested access to this latter building in February 2012, but Iran did not provide such access until September 2015 as part of the road map described above. At that time, IAEA officials conducted and supervised verification activities, including \"visual observation and environmental sampling,\" but they \"did not observe a chamber or any associated equipment inside the building.\" Iranian officials told their IAEA counterparts in October 2015 that the building in question \"had always been used for the storage of chemical material for the production of explosives,\" but the \"information available\" to the IAEA, \"does not support Iran's statements on the purpose of the building.\" Beginning in February 2012, Iran apparently undertook efforts to remove evidence of past nuclear-related activities at the site. These efforts, which included landscaping, refurbishing buildings, demolishing buildings, and removing and replacing external wall structures, \"seriously undermined the Agency's ability to conduct effective verification,\" according to Amano's December 2, 2015, report. ", "Iranian officials have implied that the government's refusal to allow IAEA post-2005 access to Parchin was due to Defense Ministry resistance. Fereydoun Abbasi-Davani, then-AEOI President, indicated in 2012 that allowing inspectors to the site was the Iranian military's decision. Rouhani in 2011 described a contentious internal debate regarding access to Parchin: ", "In the area of Agency inspections and especially the inspections of military centers such as Parchin, this was debated for months inside the country and this issue was therefore raised in various meetings over the circumstances in which these inspections would take place. There was serious opposition to the Agency's request to inspect Parchin; the nation's domestic political climate was vigorously opposed to inspectors inspecting Parchin and military centers in general.", "For more information about the Parchin site, see Appendix E ."], "subsections": []}]}, {"section_title": "Other IAEA Cooperation Issues", "paragraphs": ["Iran cooperated with the IAEA in other respects, albeit with varying consistency. The IAEA was (and still is) able to verify that Iran's declared nuclear facilities and materials have not been diverted for military purposes. Moreover, Tehran provided the agency with \"information similar to that which Iran had previously provided pursuant to the Additional Protocol,\" ElBaradei reported to the IAEA board in February 2008, adding that this information clarified the agency's \"knowledge about Iran's current declared nuclear programme.\" Iran, however, provided this information \"on an ad hoc basis and not in a consistent and complete manner,\" the report said. Indeed, the IAEA requested in April 2008 that Iran provide \"as a transparency measure, access to additional locations related ... to the manufacturing of centrifuges, research and development (R&D) on uranium enrichment, and uranium mining.\" Tehran provided such access pursuant to the 2013 JPA.", "ElBaradei's February 2008 report underscored the importance of full Iranian cooperation with the IAEA investigation, as well as Tehran's implementation of its Additional Protocol:", "Confidence in the exclusively peaceful nature of Iran's nuclear programme requires that the Agency be able to provide assurances not only regarding declared nuclear material, but, equally importantly, regarding the absence of undeclared nuclear material and activities in Iran.... Although Iran has provided some additional detailed information about its current activities on an ad hoc basis, the Agency will not be in a position to make progress towards providing credible assurances about the absence of undeclared nuclear material and activities in Iran before reaching some clarity about the nature of the alleged studies, and without implementation of the Additional Protocol.", "The IAEA also asked Iran to \"reconsider\" its March 2007 decision to stop complying with a portion of the subsidiary arrangements for its IAEA safeguards agreement. That provision (called code 3.1), to which Iran agreed in February 2003, requires Tehran to provide design information for new nuclear facilities \"as soon as the decision to construct, or to authorize construction, of such a facility has been taken, whichever is earlier.\" Previously, Iran was required to provide design information for a new facility 180 days before introducing nuclear material into it. Iran invoked the March 2007 decision when it withheld from the IAEA until September 2009 \"preliminary design information\" for the planned Darkhovin reactor; the agency first requested the information in December 2007. Although Iran provided the agency with preliminary design information about the Darkhovin reactor in a September 22, 2009, letter, the IAEA requested Tehran to \"provide additional clarifications\" of the information. Amano reported in September 2010 that Iran had \"provided only limited design information with respect to\" the reactor."], "subsections": [{"section_title": "Arak Reactor", "paragraphs": ["Tehran also refused to provide updated design information for the Arak reactor\u2014a decision which, according to a May 2013 report from Amano, had \"an adverse impact on the Agency's ability to effectively verify the design of the facility.\" As part of the JPA, Iran submitted this information to the IAEA on February 12, 2014. Pursuant to the JCPOA, Iran has committed to redesign and rebuild the Arak reactor based on a design agreed to by the P5+1 so that it will not produce weapons-grade plutonium. Iran has rendered the reactor's original core inoperable.", "Iran had also refused to allow IAEA officials to conduct an inspection of the Arak reactor in order to verify Iranian-provided design information. ElBaradei argued in a June 2009 report to the IAEA board that this continued refusal \"could adversely impact the Agency's ability to carry out effective safeguards at that facility,\" adding that satellite imagery was insufficient because Iran has completed the \"containment structure over the reactor building, and the roofing for the other buildings on the site.\" However, IAEA inspectors visited the reactor facility in August 2009 to verify design information, according to ElBaradei's report issued the same month. IAEA inspectors had last visited the reactor in August 2008. Inspectors have visited the facility several more times, according to reports from Amano. "], "subsections": []}, {"section_title": "Fordow Fuel Enrichment Plant", "paragraphs": ["In addition, Iran failed to notify the IAEA until September 2009 that it was constructing a uranium enrichment facility, called the Fordow Fuel Enrichment Plant, near the city of Qom. Iran revealed in September 2009 that it had been constructing the facility and provided some details about it to the IAEA in a September 21, 2009, letter. Four days after the IAEA received the letter, British, French, and U.S. officials revealed that they had previously developed intelligence on the facility. The three governments provided a detailed intelligence briefing to the IAEA after the agency received Iran's letter. U.S. officials have said that, despite its letter to the agency, Iran intended for the facility to be kept secret. Tehran placed the facility under IAEA safeguards after its September 2009 letter. (For more details, see the \" Fordow Enrichment Facility \" section below.) Pursuant to the JCPOA, Iran has begun to convert its Fordow enrichment facility into \"a nuclear, physics, and technology centre\" in which no nuclear material will be present. ", "In a letter published on October 1, 2009, the IAEA asked Iran to provide additional information about the facility, including \"further information with respect to the name and location of the pilot enrichment facility, the current status of its construction and plans for the introduction of nuclear material into the facility.\" The letter also requested that Tehran provide IAEA inspectors with access to the facility \"as soon as possible.\" IAEA officials inspected the facility and met with Iranian officials in late October 2009. According to a November 2009 report from ElBaradei to the IAEA board, Tehran \"provided access to all areas of the facility,\" which \"corresponded with the design information provided by Iran\" a week before the visit. IAEA officials have since conducted regular inspections of the facility. Although Iran provided additional design information about the facility to the IAEA, the agency still had questions about the facility's \"purpose and chronology\" and wished to interview other Iranian officials and review additional documentation, according to ElBaradei's report. Amano reported in May 2012 that Iran had provided the IAEA with some requested information regarding the Fordow construction decision, but the agency still wanted more information from Tehran. Tehran, according to Amano's November 2015 report, has not yet provided all of this information. Subsequent reports from Amano have not addressed the issue."], "subsections": []}, {"section_title": "Heavy-Water Reactor", "paragraphs": ["The IAEA has also requested additional information about Iran's production of heavy water. As noted, Iran is constructing a heavy-water nuclear reactor. ElBaradei's November 2009 report states that, during an inspection of Iran's uranium conversion facility the previous month, IAEA inspectors \"observed 600 50-litre drums said by Iran to contain heavy water.\" The inspectors visited the facility to verify updated design information submitted by Iran in August 2009. The inspectors observed the drums after gaining access to an area of the facility that agency inspectors had not previously visited. Tehran told the IAEA that the water originated in Iran and permitted agency inspectors to count the number of drums and weigh a \"small number of randomly selected drums.\" For a time, Tehran did not permit the agency to take samples of the heavy water, but the government did allow such access in February 2014. Similarly, Iran for some time did not grant repeated IAEA requests for \"further access\" to the country's heavy-water production plant since agency inspectors visited the facility in August 2011. However, Iran granted such access in December 2013.", "The IAEA apparently resolved a discrepancy discovered during an August 2011 inspection of an Iranian research laboratory that had been used to conduct uranium conversion experiments. IAEA measurements revealed that Iran had overstated the amount of material in the facility, described in Amano's November 2011 report as \"natural uranium metal and process waste,\" by almost 20 kilograms. Iran and the IAEA appear to have resolved the issue in 2013."], "subsections": []}]}]}]}, {"section_title": "Status of Iran's Nuclear Facilities", "paragraphs": ["Some nongovernmental experts and former U.S. officials have argued that, rather than producing fissile material for nuclear weapons indigenously, Iran could obtain such material from foreign sources. A November 2007 National Intelligence Estimate (NIE) states that the intelligence community \"cannot rule out that Iran has acquired from abroad\u2014or will acquire in the future\u2014a nuclear weapon or enough fissile material for a weapon.\" A senior intelligence official characterized such acquisition as \"an inherent option\" for Iran. However, Tehran's potential ability to produce its own fissile material is a greater cause of concern; the official explained that \"getting bits and pieces of fissile material from overseas is not going to be sufficient\" to produce a nuclear arsenal. As noted, uranium enrichment facilities can produce highly enriched uranium (HEU), which is one of the two types of fissile material used in nuclear weapons. The other type is plutonium, which is separated from spent nuclear reactor fuel. ", "According to a November 14, 2013, IAEA report, Iran had generally stopped expanding its enrichment and heavy-water reactor programs during the negotiations leading up to the JPA, which the parties finalized later that month. That agreement essentially froze most aspects of Iran's nuclear program to allow time to negotiate the July 2015 JCPOA. When the JPA went into effect in January 2014, Iran had enough uranium hexafluoride containing up to 5% uranium-235 to yield\u2014if further enriched\u2014weapons-grade HEU for as many as eight nuclear weapons. If it had been further enriched, the total amount of Iranian uranium hexafluoride containing 20% uranium-235 would have been sufficient for a nuclear weapon. Pursuant to the JCPOA, Iran has restricted and/or dismantled various portions of its nuclear program. Iran currently lacks enough low-enriched uranium hexafluoride to produce a nuclear weapon.", "Since the JCPOA's Implementation Day, Iran has imported items for its nuclear program via a JCPOA-established \"procurement channel,\" which, according to the agreement, is to last for a duration of 10 years. A Procurement Working Group, which is part of the JCPOA-established Joint Commission, reviews proposals for nuclear-related transfers to Iran. The working group provides its recommendations to the UN Security Council, which approves any exports. The JCPOA requires Iran to provide the IAEA with \"access to the locations of intended use of all items, materials, equipment, goods and technology\" listed in the NSG's \"Guidelines for Nuclear Transfers.\" Tehran is also to permit exporting governments to \"verify the end-use of all items, materials, equipment, goods and technology\" listed in the NSG's \"Guidelines for Transfers of Nuclear-Related Dual-Use Equipment, Materials, Software, and Related Technology.\" According to a December 6, 2018, report by U.N. Secretary-General Ant\u00f3nio Guterres, the Security Council had received 42 nuclear-related export proposals since Implementation Day; the council approved 28 of those proposals and disapproved four. Nine proposals were withdrawn by the submitting states and one was under review."], "subsections": [{"section_title": "Uranium Enrichment Facilities", "paragraphs": ["Iran has used three centrifuge facilities to enrich uranium: a pilot centrifuge facility and a larger commercial facility, both located at Natanz, and the Fordow centrifuge facility located near the city of Qom. Iran also has a variety of facilities and workshops involved in the production of centrifuges and related components. (See Appendix F and CRS Report R42443, Israel: Possible Military Strike Against Iran's Nuclear Facilities , coordinated by Jim Zanotti.) During a July 31 , 2015, press briefing about possible Iranian undeclared nuclear facilities, U.S. Secretary of Energy Ernest Moniz stated that \"we feel pretty confident that we know their current configuration.\""], "subsections": [{"section_title": "Natanz Commercial Facility", "paragraphs": ["This facility was to have held approximately 50,000 centrifuges. Former Vice President Gholamreza Aghazadeh, who also headed the AEOI until July 2009, explained in February 2009 that Iran intended to install all of the centrifuges by 2015. Iran began enriching uranium in the facility after mid-April 2007; as of November 5, 2013, the facility had produced 10,357 kilograms of low-enriched uranium hexafluoride containing up to 5% uranium-235. This quantity of LEU, if it had been further enriched, would have yielded enough weapons-grade HEU for as many as eight nuclear weapons. As of October 31, 2015, the facility had produced 15,525 kilograms of uranium hexafluoride containing up to 5% uranium-235. However, Iran had only approximately 8,305 kilograms of this material because the rest had been converted into various other chemical forms. ", "Individual centrifuges are linked together in cascades; each cascade in the commercial facility contained either 164 or 174 centrifuges. As of May 17, 2015, Tehran had installed about 15,400 first generation (IR-1) centrifuges, approximately 9,150 of which were enriching uranium. Iran had also installed about 1,000 centrifuges of greater efficiency, called IR-2m centrifuges, in the facility. The IR-2m centrifuges were not enriching uranium. Amano reported in February 2017 that, pursuant to its JCPOA commitments, Iran had 5,060 IR-1 centrifuges installed in the facility and had removed all other centrifuges. Iran had been producing enriched uranium hexafluoride continuing no more than 3.67% uranium-235 but also shipped out most of its LEU to Russia on December 28, 2015, to reduce its stockpile to the required levels. Iran's total stockpile of this material has not exceeded 300 kilograms since Tehran began implementing its JCPOA commitments."], "subsections": []}, {"section_title": "Natanz Pilot Facility", "paragraphs": ["Iran began enriching uranium up to 20% uranium-235 in the Natanz pilot facility in February 2010. Iranian officials stated that this enriched uranium was to serve as fuel in Iran's Tehran Research Reactor (TRR), as well as future such research reactors. Construction of the U.S.-supplied TRR began in 1960, and it went critical in 1967. Initially fueled by U.S.-supplied HEU, the reactor was converted to use LEU fuel in 1994 after Argentina agreed to supply the reactor with such fuel in 1987. Fereydun Abbasi-Davani, then-President of the Atomic Energy Organization of Iran, stated in a 2012 interview that once Iran had \"enough\" uranium enriched to this level, the country would use its enrichment facilities to produce enriched uranium containing 3.5% uranium-235. "], "subsections": [{"section_title": "Centrifuge Research and Development", "paragraphs": ["Iran has tested several types of more-advanced centrifuges in the pilot facility; these centrifuges could increase the other enrichment facilities' capacity. Tehran has altered this facility to comply with the JCPOA's limits on Iranian centrifuge research and development. Iran's development of new centrifuges has apparently been less successful than development of the IR-1 centrifuge; past estimates from Iranian officials regarding the deployment of more-advanced centrifuges have been excessively optimistic. According to a 2012 report from a U.N. panel of experts, the advanced centrifuge program's lack of success may have been \"the result of sanctions limiting\" Tehran's \"ability to procure items necessary for its centrifuge programme,\" as well as \"[o]ther variables, including design and manufacturing limitations, or a shortage of other necessary materials.\"", "The JCPOA contains a detailed description of centrifuge research and development (R&D) that Iran is permitted to conduct under the agreement. Iran is to conduct centrifuge R&D with uranium only at the Natanz pilot facility and will conduct mechanical testing of centrifuges only at the pilot facility and the Tehran Research Centre. Iran submitted an \"enrichment R&D plan\" to the IAEA in January 2016 as part of Tehran's initial declaration for its Additional Protocol. Iranian adherence to that plan is a JCPOA requirement."], "subsections": []}]}, {"section_title": "Fordow Enrichment Facility118", "paragraphs": ["In December 2011, Iran began enriching uranium up to 20% uranium-235 in the Fordow Fuel Enrichment Plant, according to IAEA reports. As of November 1, 2013, Iran was feeding uranium hexafluoride into four cascades (696 centrifuges) of IR-1 centrifuges and had installed a total of 2,710 IR-1 centrifuges in the facility. Tehran had planned to install a total of 16 cascades containing approximately 3,000 centrifuges. Tehran told the IAEA that the facility would be configured to produce both uranium enriched to 5% uranium-235 and 20% uranium-235. Iran also told the IAEA that \"the facility could be reconfigured to contain centrifuges of more advanced types should Iran take a decision to use such centrifuges in the future.\" Iran agreed under the JCPOA to convert the facility into \"a nuclear, physics, and technology centre.\" The facility will not contain any nuclear material. Pursuant to this commitment, Iran has decreased the number of IR-1 centrifuges to 1,044, and it has removed all nuclear material from the facility. In addition, Iran has modified two cascades \"for the production of stable isotopes\" for medical and industrial uses. ", "As noted, Iran revealed in September 2009 that it had been constructing the facility. That same month, Tehran provided some details about the facility to the IAEA. The United States had been \"observing and analyzing the facility for several years,\" according to September 25, 2009, Obama Administration talking points, which added that \"there was an accumulation of evidence\" earlier in 2009 that the facility was intended for enriching uranium. Some of this evidence apparently indicated that \"Iran was installing the infrastructure required for centrifuges earlier\" in 2009. U.S. officials have not said exactly when Iran began work on the facility, which is \"located in an underground tunnel complex on the grounds of an Islamic Revolutionary Guard Corps\" base near the Iranian city of Qom. Nevertheless, the Atomic Energy Organization of Iran (AEOI), rather than the Iranian military, is responsible for the development and management of the facility, according to the September 2009 U.S. talking points described above. According to a November 2009 report from then-IAEA Director-General ElBaradei, Iran informed the IAEA that construction on the site began in the second half of 2007. However, citing information in its possession that appears to contradict Tehran's claim, the IAEA asked Iran to provide more information about the facility's chronology.", "U.S. officials suggested that the facility may have been part of a nuclear weapons program. President Obama stated on September 25, 2009, that \"the size and configuration of this facility is inconsistent with a peaceful program.\" But the Administration's talking points were somewhat more vague, stating that the facility \"is too small to be viable for production of fuel for a nuclear power reactor,\" although it \"could be used\" for centrifuge research and development or \"configured to produce weapons-grade uranium.\" The facility \"would be capable of producing approximately one weapon's worth\" of HEU per year, according to the talking points.", "Iran's failure to inform the IAEA of the Fordow plant's existence until well after Tehran had begun constructing it raised concerns that the country may have had other covert nuclear facilities. A November 2009 IAEA Board of Governors resolution stated that Iran's declaration of the Fordow facility \"reduces the level of confidence in the absence of other nuclear facilities and gives rise to questions about whether there are any other [undeclared] nuclear facilities under construction in Iran.\" Furthermore, then-UK Foreign Office Minister Alistair Burt told Parliament in February 2012 that the Fordow facility \"which Iran initially kept secret from the IAEA, also raises our concerns that there may also be other, undeclared sites in Iran that could be engaged in work\" related to nuclear weapons.", "Tehran's shifting explanations regarding the facility's purpose also raised concerns that Iran would, in the future, use the facility to produce fissile material for nuclear weapons. Iran's 2009 letter to the IAEA described the Fordow facility as a \"new pilot fuel enrichment plant\" that would produce uranium enriched to no higher than 5% uranium-235. Tehran subsequently changed the plant's stated purpose several times. For example, Tehran, as noted, later told the IAEA that the facility would be configured to produce both uranium enriched to 5% uranium-235 and 20% uranium-235. Apparently suggesting that Iran might later produce uranium containing higher levels of uranium-235, a U.S. official told the IAEA Board of Governors on March 8, 2012, that \"[w]e cannot help but wonder ... whether Iran has finally informed us of the ultimate purpose of this facility.\" ", "For its part, Iran has asserted that the facility is for peaceful purposes and that the government has acted in accordance with its international obligations. As noted, Tehran argued that it was producing enriched uranium containing up to 20% uranium-235 for use as fuel in research reactors, to be used to produce isotopes for medical purposes. Regarding the facility's secret nature, Iranian officials argued that Tehran was not previously obligated to disclose it to the IAEA and stated on several occasions that the facility was concealed to protect it from military attacks. Iran told the IAEA in 2009 that the Fordow facility was to serve as a \"contingency enrichment plant, so that the enrichment activities shall not be suspended in the case of any military attack.\" The Natanz commercial facility \"was among the targets threatened with military attacks,\" Iran explained. Iranian officials stated during a June 2012 meeting with the P5+1 that the Fordow facility is \"not a military base\" and is \"not located on a military base.\" "], "subsections": []}, {"section_title": "Enriched Uranium Containing Up To 20% Uranium-235", "paragraphs": ["As noted, Iran argued that it was producing LEU containing nearly 20% uranium-235 for use in research reactors; as of January 20, 2014, when the JPA went into effect, Tehran had used the Natanz pilot facility and the Fordow facility to produce a total of 447.8 kilograms of uranium hexafluoride containing up to 20% uranium-235. Iran's production of uranium enriched to this level has caused concern because such production requires approximately 90% of the effort necessary to produce weapons-grade HEU, which contains about 90% uranium-235. If further enriched, this amount of material would have been sufficient for a nuclear weapon. Iran would need approximately 215 kilograms of uranium hexafluoride containing 20% uranium-235 to produce approximately 27.8 kilograms of uranium containing 90% uranium-235\u2014a sufficient amount of weapons-grade HEU for a nuclear weapon. This is a conservative estimate; the specific characteristics of Iran's enrichment facilities may necessitate using more than 215 kilograms of such material. Then-Director of National Intelligence James Clapper suggested during a February 16, 2012, Senate Armed Services Committee hearing that \"a number of factors\" could impede Tehran's ability to produce weapons-grade HEU from uranium enriched to 20% uranium-235.", "As of January 20, 2014, approximately 160 kilograms of the LEU described above was in the form of uranium hexafluoride and, therefore, available to be further enriched in the near term. Since that date, Iran has either converted much of that material for use as fuel in the Tehran Research Reactor or prepared it for that purpose. Iran diluted the rest of that stockpile so that it contained no more than 5% uranium-235. AEOI spokesperson Behrouz Kamalvandi said in February 2014 that Iran had \"the necessary reservoirs of fuel for 5 years for the Tehran research reactor.\""], "subsections": []}, {"section_title": "Future Centrifuge Facilities", "paragraphs": ["Iranian officials indicated in the past that Tehran intended to construct 10 additional centrifuge plants\u2014a goal that many analysts argued was virtually unachievable. Then- Atomic Energy Organization President Ali Akbar Salehi stated in 2009 that Iran is investigating locations for the sites. (Salehi was president of the organization from 2009 to 2010; he became president again in August 2013.) In 2012, then-Atomic Energy Organization President Abbasi argued that \"mastering\" centrifuge enrichment technology would enable Iran to \"develop [centrifuge] sites in various locations to avoid any threat by foreign enemies.\" According to the JCPOA, Iran is to enrich uranium only at the Natanz commercial facility for 15 years. Expiration of the JCPOA enrichment restrictions will be \"followed by gradual evolution, at a reasonable pace\" of Iran's enrichment program. According to the JCPOA, Iran's centrifuge-testing program may proceed under strict limits, which will begin to ease approximately eight years after the beginning of the agreement's implementation. An AEOI spokesperson stated in January 2016 that Iran's nuclear program \"will begin to accelerate from the 13 th or 14 th year onwards,\" adding that Tehran plans to increase its enrichment capacity by approximately \"20-fold\" by the end of the 15 th year. Iran plans to produce enough enriched uranium to fuel five or six nuclear reactors, Deputy Foreign Minister Araqchi stated in August 2015.", "AEOI spokesperson Kamalvandi explained in June 2018 that Iran would begin the process of \"manufacturing and assembly of centrifuge rotors,\" which are critical components of such machines. Iran \"will begin building a centrifuge rotor plant,\" he noted. In addition, Salehi announced in June that Iran has completed building a centrifuge assembly center in the Natanz facility; Tehran had not previously disclosed this facility publicly. The facility's completion \"does not mean that we are going to produce these centrifuges now,\" Salehi said in September 2018, adding that the facility provides Iran with the capability to mass-produce such centrifuges, should the government decide to do so. "], "subsections": []}, {"section_title": "Inconsistent Progress", "paragraphs": ["A senior U.S. intelligence official said in 2007 that a country needs to be able to \"operate large numbers of centrifuges for long periods of time with very small failure rates\" in order to be able to \"make industrial quantities of enriched uranium.\" Iran's record indicates that the country has not always met this standard. The 2007 National Intelligence Estimate stated that Iran still faced \"significant technical problems operating\" its centrifuges. Although a 2008 report to Congress submitted by the Deputy Director for National Intelligence described the amount of LEU that Iran produced in 2008 as a \"significant improvement\" over the amount it had produced during the previous year, data from an August 2015 Institute for Science and International Security report indicate that the average per-centrifuge performance at that facility peaked in 2010 and subsequently fluctuated. ", "The extent to which Iran's progress is sustainable is open to question. Former Pakistani nuclear official Abdul Qadeer Khan described Pakistan's first-generation centrifuges as \"unsuccessful\" in a 1998 interview. Furthermore, Mark Fitzpatrick of the International Institute for Strategic Studies observed that \"[i]t can be years before it is clear whether an enrichment programme is working well,\" observing that centrifuges at a Japanese enrichment facility \"started to crash seven years after installation.\" And, as noted, Iran has struggled to develop and deploy more-advanced centrifuges. Nevertheless, historical experience indicates that sustained operation of gas centrifuges appears to be a manageable task for governments with even modest technical capabilities. According to a U.S. Nuclear Regulatory Commission document, some centrifuges of simple design \"have operated 30 years with a failure rate of less than one percent.\" (See also \" Effects of Sanctions and Sabotage on Iran's Enrichment Program .\") "], "subsections": []}]}, {"section_title": "Uranium Conversion", "paragraphs": ["As noted, uranium conversion is a process whereby uranium ore concentrate is converted into several compounds, including uranium hexafluoride\u2014the feedstock for Iran's centrifuges. Iran produced approximately 541 metric tons of uranium hexafluoride between March 2004 and August 10, 2009, using both imported uranium ore concentrate and domestically produced uranium ore concentrate. Iran has not produced any uranium hexafluoride since August 2009, according to IAEA reports, although Tehran has transferred domestically produced uranium ore concentrate to the uranium conversion facility. The 2012 U.N. Panel of Experts report concluded that, based on data from Amano's February 2012 report, Iran had \"an ample supply of uranium hexafluoride to maintain current levels of enrichment for the foreseeable future.\" On June 27, 2018, Iran's official news agency announced that Iran has resumed operations at the conversion facility.", "According to a report from the Director of National Intelligence to Congress covering 2011, Iran had \"almost exhausted\" its supply of imported uranium ore concentrate. Tehran apparently did not import any more such material prior to December 2015. According to the 2012 U.N. Panel of Experts report, \"a number\" of governments believed that Tehran was \"seeking new sources of uranium ore to supply its enrichment efforts\"; the report added that \"the Panel is not aware of any confirmed cases of actual transfers.\" British Foreign and Commonwealth Office official Tobias Ellwood informed Parliament in June 2015 that the British government was \"not aware of\" any recent reports that Iran had attempted to purchase foreign uranium. Former State Department official Richard Nephew wrote in September 2015 that there had \"not been any verified transfer of uranium to Iran aside from fuel for the Bushehr power reactor.\" In late December 2015, Iran imported between 200 and 220 metric tons of uranium ore concentrate in exchange for LEU that Iran shipped to Russia in order to reduce its stockpile to JCPOA-required levels. The IAEA verified Iran's receipt in February 2017 of approximately 125 metric tons of uranium ore concentrate. During March 2017, Iranian officials stated that the country had imported between 382 and 384 metric tons of this material since concluding the JCPOA. The imported uranium ore concentrate is to serve as fuel for the Bushehr reactors, according to Iranian officials. ", "Prior to 2009, Tehran apparently improved its ability to produce centrifuge feedstock of sufficient purity for light-water reactor fuel; information in a 2010 IAEA report indicated that Iran was purifying its centrifuge feedstock. Whether Iran is currently able to produce feedstock pure enough for weapons-grade HEU is unclear, however."], "subsections": []}, {"section_title": "Plutonium", "paragraphs": ["Iran acknowledged to the IAEA in 2003 that it had conducted plutonium-separation experiments\u2014an admission that contributed to suspicions that Iran could have a program to produce plutonium for nuclear weapons. The IAEA, however, continued to investigate the matter; then-IAEA Director-General ElBaradei reported in August 2007 that the agency had resolved its questions about Iran's plutonium activities. As noted above, Iran has said that it does not plan to engage in reprocessing, and IAEA Director-General Amano's November 2011 report described an \"absence of any indicators that Iran is currently considering reprocessing irradiated nuclear fuel to extract plutonium.\" Amano's November 2015 report states that the agency could \"confirm that there are no ongoing reprocessing related activities\" at the Iranian facilities to which the agency has access.", "The JCPOA prohibits Iran from reprocessing spent reactor fuel, except to produce \"radio-isotopes for medical and peaceful industrial purposes.\" The JCPOA text states that Iran \"does not intend\" to engage in reprocessing after the 15-year period expires and specifies Iran's intention to \"ship out all spent fuel for all future and present nuclear power and research reactors, for further treatment or disposition as provided for in relevant contracts to be concluded consistent with national laws with the recipient party.\" According to the IAEA, Iran has adhered to this requirement. "], "subsections": [{"section_title": "Arak Reactor and Redesign174", "paragraphs": ["Iran says that its reactor under construction at Arak is intended for the production of medical isotopes and various other purposes. According to a 2008 presentation by Ambassador Soltanieh, the reactor, which was originally designed to be moderated by heavy water, is to substitute for the \"outdated\" Tehran Research Reactor (TRR), which has been in operation since 1967. As noted, Iran subsequently decided to refuel the TRR. According to a 2012 AEOI report, the reactor has several objectives:", "a suitable replacement for the aging Tehran Research Reactor using local engineers and scientist [sic] with the least dependency to foreign countries; medical, industrial and research radioisotope production of [sic] the country; performing research in the fields of neutron physics, reactor chemistry, thermal-hydraulics, and health physics; obtaining technological and scientific experience in design and construction of nuclear reactors using local experts within the country; training of specialists in the nuclear field; and enhancing the technological levels of the local industries in design and manufacturing of various components such as reactor vessels, heat exchangers, pumps, etc. using nuclear standards.", "Iran told the IAEA in 2012 that the reactor was scheduled to begin operating during the second half of 2013. The project was about 75% complete as of July 2011. Iran suspended several aspects of the reactor's construction pursuant to the 2013 Joint Plan of Action. ", "The originally designed Arak reactor was a proliferation concern because its spent fuel would have contained plutonium better suited for nuclear weapons than the plutonium produced by light-water moderated reactors, such as the TRR and Bushehr reactor. The original Arak reactor, if it had been completed, could have produced enough plutonium for between one and two nuclear weapons per year. In addition, Iran would have been able to operate the reactor with natural uranium and, therefore, would not have been dependent on supplies of enriched uranium. ", "The JCPOA requires Tehran to render the Arak reactor's original core inoperable. Iran has met this requirement. The agreement also commits Tehran to redesign and rebuild the Arak reactor based on a design agreed to by the P5+1 so that the reactor will not produce weapons-grade plutonium. Tehran is \"trying to complete the project in five years,\" an AEOI spokesperson said in January 2016. AEOI President Salehi stated in September 2016 that China will supply the reactor's first fuel load \"in the next five-year time.\" Iran will subsequently produce the reactor fuel, he said. Iran is to export the spent fuel from this reactor and all other nuclear reactors. In addition, the JCPOA requires Iran to refrain from building heavy-water-moderated reactors for 15 years, and Tehran has pledged to refrain from constructing any such reactors indefinitely.", "According to IAEA reports and Iranian officials, Iran began to operate its heavy-water production plant located near Arak in August 2006. Reports from Amano since the start of JCPOA implementation indicate that the plant, which is to produce heavy water for the reactor and deuterated solvents, is operating. Pursuant to the JCPOA, Tehran has committed to refrain from accumulating heavy water \"beyond Iran's needs.\" Iran is to \"sell any remaining heavy water on the international market for 15 years.\" According to the agreement, these \"needs\" are 130 metric tons of \"nuclear grade heavy water or its equivalent in different enrichments\" prior to commissioning the redesigned Arak reactor and 90 metric tons after the reactor is commissioned.", "Iran's stock of heavy water has exceeded 130 metric tons on two occasions since the JCPOA began implementation. On February 17, 2016, the IAEA verified that Tehran's heavy-water stock had exceeded 130 metric tons; on November 8, 2016, the IAEA verified that Iran's stock of heavy water had again exceeded the JCPOA limit. Iran resolved the issue on both occasions by exporting the excess heavy water. Tehran sent this material to Russia and the United States, shipping at least some of it via Oman. Iran told the IAEA on June 18, 2017, that it had transferred 19.1 metric tons of heavy water to a destination outside the country. According to an April 2018 State Department report covering 2017, \"[m]ost Iranian excess heavy water has been sold and delivered to international buyers; the remainder is awaiting sale and is stored in a location outside Iran, under IAEA seal, though it remains Iranian property.\" Tehran has continued to ship heavy water outside Iran, according to the three most recent IAEA reports. the IAEA reported in August and November 2018. The IAEA verified on February 16, 2019, that Iran had 122.8 metric tons of heavy water. "], "subsections": []}, {"section_title": "Bushehr Reactor", "paragraphs": ["Iran is also operating a 1,000-megawatt nuclear power reactor, moderated by light water, near the city of Bushehr. The original German contractor, which began constructing the reactor in 1975, abandoned the project following Iran's 1979 revolution. Russia agreed in 1995 to complete the reactor, but the project subsequently encountered repeated delays; both Russian and Iranian officials attributed those delays to technical issues. In February 2005, Moscow and Tehran concluded an agreement stating that Russia would supply fuel for the reactor for 10 years. Atomstroyexport, a subsidiary of Rosatom, the Russian company, sent the first shipment of LEU fuel to Iran on December 16, 2007, and the reactor received the last shipment near the end of January 2008. The fuel, which is under IAEA seal, will contain no more than 3.62% uranium-235, according to an Atomstroyexport spokesperson. An August 2014 IAEA inspection revealed that the reactor \"was operating at 100% of its nominal power.\" ", "Before 2002, the United States had previously urged Moscow to end the project, citing concerns that it could aid an Iranian nuclear weapons program by providing the country with access to nuclear technology and expertise. However, U.S. officials said in 2002 that Washington would drop these public objections if Russia took steps to mitigate the project's proliferation risks. The 2005 deal requires Iran to return the spent nuclear fuel to Russia. This measure is designed to ensure that Tehran will not separate plutonium from the spent fuel. Moscow argues that the reactor will not pose a proliferation risk because it will operate under IAEA safeguards. It is worth noting that light-water reactors are generally regarded as more proliferation-resistant than other types of reactors. Although the U.N. Security Council resolutions restricted the supply of nuclear-related goods to Iran, they did permit the export of nuclear equipment and fuel related to light-water reactors. ", "Experts have expressed strong doubts regarding Iran's ability to produce fuel for the reactor. According to a July 2014 Iranian government report, Russia and Iran may renew the fuel supply agreement, but they are also \"engaged in negotiations ... to engage in cooperative arrangements for the domestic manufacturing of fuel for the facility after the expiration of the current contract.\" According to an interview published in April 2017, AEOI Deputy Director Pezhman Rahimian stated that the two governments had almost completed a \"road map\" for such manufacturing. AEOI President Salehi expressed \"hope\" in September 2018 that a second power reactor at the Bushehr plant \"will become operational in the next six years.\" A Rosatom official told the IAEA General Conference in September 2018 that \"[p]ractical work to build the second and third\" Bushehr power plant units \"has begun.\" Salehi told the same conference that \"the first concrete pouring\" for the second Bushehr reactor \"has been planned for the third quarter of 2019.\""], "subsections": []}, {"section_title": "Possible Future Reactors", "paragraphs": ["Iran and Russia signed a contract in November 2014 for the construction of two additional light-water nuclear power reactors in Bushehr, according to Rosatom, the Russian company. The project's construction began in September 2016 and is expected to take 10 years to complete. Iran was \"negotiating with China for building two 100 megawatt power plants,\" Salehi stated in a July 2015 speech. Iran informed the IAEA in an October 2017 letter that Tehran had decided to \"design and construct a critical facility (Light Water Critical Reactor) \u2026 for research purposes in near future.\" Iran \"provided preliminary design information for the facility,\" which indicates that the reactor fuel is to contain \"up to 3.67%\" uranium-235. "], "subsections": []}]}, {"section_title": "Fuel Manufacturing Facilities", "paragraphs": ["Iran intended its fuel manufacturing plant to produce fuel for the Arak and Darkhovin reactors. The plant started the process of producing fuel for the pre-JCPOA Arak reactor. Iran's Fuel Plate Fabrication Plant has produced fuel for the Tehran Research Reactor. "], "subsections": []}, {"section_title": "Uranium Mines and Mills", "paragraphs": ["Iran has a uranium mill and a uranium mine located at a site called Bandar Abbas, which is sometimes referred to as Gchine. Iran also has a uranium mine at a site called Saghand and an associated uranium mill called the Ardakan Yellowcake Production Plant. Salehi stated in a January 30, 2019, interview that Tehran plans to construct several more such mills. Iranian officials acknowledge that the country's uranium deposits are insufficient for its planned nuclear power program. These reserves are sufficient, however, to produce 250-300 nuclear weapons, according to a past U.S. estimate. Salehi indicated in February 2019 that Iran continues to explore for uranium. "], "subsections": []}]}, {"section_title": "Effects of Sanctions and Sabotage on Iran's Enrichment Program", "paragraphs": ["A number of governments employed sanctions and, apparently, sabotage to impede Iran's nuclear program."], "subsections": [{"section_title": "Sanctions", "paragraphs": ["Iran has tried to improve its capabilities to produce materials and components for its centrifuge program, according to former IAEA Deputy Director General Olli Heinonen. Some Iranian officials have claimed that the country can manufacture centrifuges on its own. For example, then-Iranian Ambassador to the IAEA Ali Asghar Soltanieh said in 2012 that Iran \"has 'fully mastered' the nuclear energy technology and can produce all the 90 pieces of a centrifuge machine on its own and without foreign assistance.\" However, a 2014 U.N. Panel of Experts report observed that the \"quality of such [Iranian-produced] equipment is not known.\" Furthermore, other Iranian officials have suggested that Tehran is not yet able to produce all of the necessary centrifuge components. Then-President of Iran's Atomic Energy Organization Abbasi stated during a 2012 television broadcast that \"Iran could not claim that it did not need other countries\" for its enrichment program, adding that \"domestic production of all items was not economically viable.\" AEOI Director Salehi stated in 2014 that Iran was purchasing some items for its nuclear program \"from some developing and growing Eastern countries.\" Moreover, then-Principal Deputy Assistant Secretary of State for International Security and Nonproliferation Vann Van Diepen said that Iran in 2014 was still attempting to \"procure items\" for the nuclear program.", "Nevertheless, according to the 2014 Panel of Experts report, several governments told the panel that, since mid-2013, there had been a \"been a decrease in the number of detected [Iranian] attempts ... to procure items for prohibited programmes, and related seizures.\" A 2015 Panel of Experts report states that the panel had not \"identified cases of procurement for activities prohibited\" by Security Council resolutions in force at the time. No governments reported any such cases, the report adds.", "According to various sources, international sanctions made it difficult for Iran to obtain components and materials for its centrifuge program. For example, the U.N. Panel of Experts 2011 report stated that \"sanctions are constraining Iran's procurement of items related to prohibited nuclear and ballistic missile activity and thus slowing development of these programmes.\" Similarly, the 2012 U.N. Panel of Experts report observed that \"[s]anctions are slowing the procurement by the Islamic Republic of Iran of some critical items required for its prohibited nuclear programme.\" A June 2013 report suggested that this condition still existed, arguing that \"Iran's reliance on procurement abroad continues to provide the international community with opportunities to limit Iran's ability to maintain and expand certain activities.\" Then-UK Foreign Secretary William Hague wrote in 2013 that \"[w]e judge that sanctions have been effective in slowing the nuclear programme to some degree.\"", "U.S. officials have argued that the sanctions have impeded Iran's ability to acquire technology for its nuclear programs. Then-State Department Special Advisor for Nonproliferation and Arms Control Robert Einhorn told a Washington audience in 2011 that \"[w]e believe Iran has had difficulty in acquiring some key technologies and we judge this has had an effect of slowing some of its programs.\" Similarly, then-National Security Adviser Tom Donilon argued in 2011 that \"[s]anctions and export control efforts have made it more difficult and costly for Iran to acquire key materials and equipment for its enrichment program, including items that Iran can't produce itself.\" ", "However, the extent to which sanctions slowed Tehran's program is unclear. Donilon also cited \"mistakes and difficulties in Iran\" as obstacles to the program's progress. Former IAEA Deputy Director General Heinonen stated that \"[w]e do not know\" whether Iran's delays in deploying advanced centrifuges are attributable to \"lack of raw materials or design problems,\" according to a 2012 press report. Furthermore, reports from the Office of the Director of National Intelligence covering 2009-2011 stated that \"some obstacles slowed\" the progress of Iran's nuclear program during those years, but the report did not name those obstacles. "], "subsections": []}, {"section_title": "Sabotage", "paragraphs": ["The extent to which alleged efforts by the United States and other governments, including Israel's, to sabotage Iran's centrifuge program have affected Tehran's nuclear program is unclear. The New York Times reported in 2009 that such efforts have included \"undermin[ing] electrical systems, computer systems and other networks on which Iran relies,\" according to unnamed senior U.S. and foreign government officials. One effort involved foreign intelligence services sabotaging \"individual power units that Iran bought in Turkey\" for Tehran's centrifuge program. \"A number of centrifuges blew up,\" according to the Times . Western governments have reportedly made other efforts to sabotage centrifuge components destined for Iran, according to some nongovernmental experts. Iranian officials have asserted that Western countries have tampered with components in transit to Iran's enrichment facilities, directly sabotaged those facilities, and conducted espionage in the country. In addition, New York Times reporter James Risen wrote in 2006 that, according to unnamed U.S. officials, the United States engaged in a covert operation to provide Iran with flawed blueprints for a device designed to trigger a nuclear explosion. ", "The United States and Israel have also reportedly executed cyberattacks on Iran's nuclear facilities. Perhaps the best known of these used the Stuxnet computer worm, which was discovered in 2010 and probably developed by a government to attack Iran's enrichment facilities. Some governments have reportedly assassinated Iranians associated with Iran's nuclear program. The United States also may have obtained information from Iranian officials who defected as part of a CIA program to induce them to do so. "], "subsections": []}]}, {"section_title": "Nuclear Weapon Development Capabilities", "paragraphs": ["Statements from the U.S. intelligence community indicate that Iran has the technical capability to produce nuclear weapons. For example, the 2007 National Intelligence Estimate (NIE) assessed that \"Iran has the scientific, technical and industrial capacity eventually to produce nuclear weapons if it decides to do so.\" More recently, then-Director of National Intelligence Clapper stated during a February 2016 Senate Armed Services Committee hearing that Iran \"does not face any insurmountable technical barriers to producing a nuclear weapon.\"", "Obtaining fissile material is widely regarded as the most difficult task in building nuclear weapons. As noted, Iran is enriching uranium, but whether and to what extent Tehran has taken the other steps necessary for producing a nuclear weapon is unclear. A 2008 report from former IAEA Director-General ElBaradei points out that the IAEA, with the exception of a document related to uranium metal, has \"no information ... on the actual design or manufacture by Iran\" of components, nuclear or otherwise, for nuclear weapons. However, according to IAEA Director-General Amano's November 2011 report, the IAEA has \"credible\" information that Iran has carried out activities \"relevant to the development of a nuclear explosive device.\" These include acquisition of \"nuclear weapons development information and documentation\" and work to develop \"an indigenous design of a nuclear weapon including the testing of components.\" Although some of these activities have civilian applications, \"others are specific to nuclear weapons,\" the report notes. Most of the report provides additional details about Iranian activities applicable to nuclear weapons development that were described in previous IAEA reports, although it does contain some previously unreported material. The program's purpose was \"to develop a nuclear warhead for the Shahab-3 missile,\" a senior Administration official stated during a November 8, 2011, briefing about Amano's November 2011 report. A 2012 Department of Defense report described Amano's report as containing \"extensive evidence of past and possibly ongoing Iranian nuclear weapons-related research and development work.\" (See Appendix E for more details about the IAEA's information regarding suspected military aspects of Iran's nuclear program.)", "Amano's November 2011 report states that, according to information available to the IAEA, Iranian activities related to building a nuclear explosive device \"took place under a structured programme\" prior to the end of 2003. That program, however, \"was stopped rather abruptly pursuant to a 'halt order' instruction issued in late 2003 by senior Iranian officials,\" the report says. The weapons-related activities were consolidated under the \"AMAD Plan\" and \"appear to have been conducted during 2002 and 2003.\" Nevertheless, \"[t]here are also indications that some activities relevant to the development of a nuclear explosive device continued after 2003, and that some may still be ongoing,\" according to the report. According to an August 2014 State Department announcement, Iran established the Organization of Defensive Innovation and Research (SPND), which \"is primarily responsible for research in the field of nuclear weapons development,\" in 2011. The SPND \"took over some of the activities related to Iran's undeclared nuclear program,\" the announcement said. According to a 2012 Israeli intelligence report, the SPND ", "was established for the purposes of preserving the technological ability and the joint organizational framework of Iranian scientists in the area of R&D of nuclear weapons, and for the purposes of retaining the skills of the scientists. This is [to] allow renewal of the activity necessary to produce weapon immediately when the Iranian leadership decides to do so.", "This report also indicates that Iran had not restarted the nuclear weapons program.", "During an March 2019 press briefing, a senior U.S. official described the SPND as", "an organization, chunks of which seem to have been created precisely in order to employ people on dual-use things that could easily be repurposed into the very kind of work that was being done before on the weapons program and\u2026in a sense, to keep their skills sharp and available to the Iranian clerical regime.", "Amano's December 2, 2015, report assesses that Iran conducted \"a range of activities relevant to the development of a nuclear explosive device ... prior to the end of 2003 as a coordinated effort,\" adding that \"some [nuclear weapons-related] activities took place after 2003,\" but \"were not part of a coordinated effort.\" The report concludes that \"these activities did not advance beyond feasibility and scientific studies, and the acquisition of certain relevant technical competencies and capabilities.\" The IAEA \"has no credible indications of activities in Iran relevant to the development of a nuclear explosive device after 2009,\" the report explains. Iran presented a written assessment of Amano's report on January 7, 2016. The document apparently acknowledges Iranian \"scientific studies of dual-use technologies\" for \"peaceful civilian or conventional military uses,\" but also reiterated previous Iranian claims that the country has done no work on nuclear weapons and that some of the evidence underlying the agency's concerns is inauthentic. ", "A May 1, 2018, IAEA statement reiterated the December 2015 report's conclusions following Israeli Prime Minister Benjamin Netanyahu's disclosure of documents concerning Iran's past nuclear weapons program, though the agency did not comment on the documents specifically. Similarly, Nicole Shampaine, the Charg\u00e9 d'Affaires at the U.S. Mission to International Organizations in Vienna UNVIE, stated on June 5, 2018, that the Israeli disclosure \"further reaffirms\" the IAEA's December 2015 conclusion that Iran had conducted such research in the past. U.S. Ambassador Jackie Wolcott discussed the Israeli-disclosed documents in a March 2019 statement:", "The troubling question remains of why Iran sought to preserve this information and expertise. Iran's retention of the archive not only underscores the key weakness of the temporary restrictions in the JCPOA, but strikes at the heart of longstanding concerns that Iran continues to keep its nuclear options open. As we move forward, Iran must end its longstanding efforts to deny and conceal the reality of past nuclear weapons work. Our interest in resolving these issues is not to score political points, but to address critical verification issues with direct relevance to how we move forward. The facts of Iran's past nuclear weapons activities continue to have bearing on current questions about the possibility of undeclared nuclear material and activities in Iran. These issues must be addressed in a clear and straightforward manner, without further delay.", "The United States supports the IAEA's \"continued, careful assessment of the nuclear archive materials,\" Wolcott added.", "According to some nongovernmental organization reports, the IAEA has assessed that Iran \"has sufficient information to be able to design and produce a workable implosion nuclear device based upon HEU as the fission fuel.\" However, these reports cite information from an internal 2009 IAEA document that ElBaradei has described as ", "a rolling text complied by the Agency's Department of Safeguards that included all the various pieces of information that had come in from different intelligence organizations, most of which IAEA inspectors had been unable to verify or authenticate ... by definition, it was a series of best guesses.", "The IAEA Deputy Director General for Safeguards at the time had neither \"assessed\" nor \"signed off on\" the document, ElBaradei added. ", "For its part, the U.S. government has assessed that Iran has not mastered \"all the necessary technologies\" for building a nuclear weapon, a senior Administration official stated in November 2011. During the same briefing, a senior Administration official explained that \"the fact that some activities have apparently continued after the full-scale program was shut down in 2003 suggests that there's been some advancement\" in Iran's ability to develop nuclear weapons, but \"since it appears to be relatively uncoordinated and sporadic activity ... the advancement probably hasn't been that dramatic.\" Perhaps reinforcing this point, Director Clapper stated during the February 2012 Senate Armed Services Committee hearing that \"there are certain things\" that Iran has not yet done to develop a nuclear weapon, but he did not elaborate. Ambassador Stephen D. Mull, then-Coordinator for Implementation of the JCPOA, told a Washington audience on January 21, 2016, that \"there was a portion of the Iranian Government working in a very organized, systematic way to develop the capability to build a nuclear weapon. We don't know to the extent to which that knowledge has been tested or even survived.\" ", "Amano's November 2011 report states that, according to a member of a \"clandestine nuclear supply network\" run by former Pakistani official Abdul Qadeer Khan, Iran \"had been provided with nuclear explosive design information.\" However, this information may not be sufficient to produce a nuclear weapon. Although Khan's network supplied Libya with \"documents related to the design and fabrication of a nuclear explosive device,\" according to the IAEA, these documents lacked \"important parts\" for making a nuclear weapon, according to ElBaradei. In addition to the documents supplied to Tripoli, members of the Khan network had computer files containing \"drawings for the components of two smaller, more advanced nuclear weapons.\" However, according to former IAEA Deputy Director-General Olli Heinonen, these \"detailed designs\" were not \"complete sets\" of weapons design information. Other members of the network could have possessed more complete nuclear weapons designs, he said.", "The JCPOA indefinitely prohibits specific activities \"which could contribute to the design and development of a nuclear explosive device.\" Neither Iran's comprehensive safeguards agreement nor its additional protocol explicitly prohibit these activities. As noted, the U.S. government assesses that Tehran has not mastered all of the necessary technologies for building a nuclear weapon. In addition, for 15 years Iran is to refrain from \"producing or acquiring plutonium or uranium metals or their alloys\" and \"conducting R&D on plutonium or uranium (or their alloys) metallurgy, or casting, forming, or machining plutonium or uranium metal.\" Producing uranium or plutonium metals is a key step in producing nuclear weapons. "], "subsections": [{"section_title": "Timelines", "paragraphs": ["A senior intelligence official explained during a December 2007 press briefing that the \"acquisition of fissile material ... remains the governing element in any timelines\" regarding Iran's production of a \"nuclear device.\" The 2007 NIE argued that \"centrifuge enrichment is how Iran probably could first produce enough fissile material for a weapon\" and added that \"the earliest possible date Iran would be technically capable of producing enough HEU for a weapon is late 2009.\" However, it was \"very unlikely\" that Iran would attain such a capability by that date, the estimate says, adding that \"Iran probably would be technically capable of producing enough HEU for a weapon sometime during the 2010-2015 time frame.\" But the State Department Bureau for Intelligence and Research, the estimate says, judged that Tehran \"is unlikely to achieve this capability before 2013\" and all intelligence agencies recognized \"the possibility that this capability may not be attained until after 2015.\" ", "The frequently-cited benchmark for determining the minimum sufficient amount of weapons-grade HEU for a nuclear weapon is 27.8 kilograms of uranium containing 90% uranium-235, but the amount assumed by U.S. government estimates is unclear. To produce its first nuclear weapon, Tehran would likely need to produce more uranium-235. According to a 2011 International Institute for Strategic Studies report, \"the fabrication of an initial bomb would involve an amount of unavoidable wastage.\" Then-Deputy Assistant Secretary of Defense Colin Kahl explained during a November 15, 2011, hearing that \"the time to actually complete a testable [Iranian nuclear] device could shrink over time.\" ", "Then-Secretary of Defense Leon Panetta told 60 Minutes in 2012 that, if Iran were to decide to build a nuclear weapon, \"it would probably take them about a year to be able to produce a bomb and then possibly another one to two years in order to put it on a deliverable vehicle of some sort in order to deliver that weapon.\" Although, as noted, the United States estimated that Iran's Fordow enrichment facility \"would be capable of producing approximately one weapon's worth\" of HEU per year, whether and how that assessment factored into the U.S. timelines for Iranian nuclear weapons development is unclear. Then-Under Secretary of State for Political Affairs Wendy Sherman explained during an October 3, 2013, Senate Foreign Relations Committee hearing that Iran would need as much as one year to produce a nuclear weapon if the government made the decision to do so. At the time, Tehran would have needed two to three months to produce enough weapons-grade HEU for a nuclear weapon. Iran's December 28, 2015, JCPOA-mandated shipment of LEU to Russia lengthened this time to one year, according to February 9, 2016, congressional testimony from then-Director of National Intelligence Clapper. Current Director of National Intelligence Daniel Coats reiterated this assessment in several congressional hearings. A senior U.S. official followed suit in a March 2019 press briefing."], "subsections": [{"section_title": "Declared Versus Undeclared Nuclear Facilities", "paragraphs": ["The U.S. estimates described above apparently assume that Iran would use its declared nuclear facilities to produce fissile material for a weapon. However, the 2007 NIE states that Iran \"probably would use covert facilities\u2014rather than its declared nuclear sites\u2014for the production of highly enriched uranium for a weapon.\" Similarly, a CIA report covering 2004 concluded that \"inspections and safeguards will most likely prevent Tehran from using facilities declared to the IAEA directly for its weapons program as long as Iran remains a party to the NPT.\" Director Clapper echoed this assessment in a March 2015 interview. ", "Iran would probably prefer to avoid using its safeguarded facilities, partly because the IAEA would likely detect an Iranian attempt to use them for producing weapons-grade HEU. According to former Deputy Assistant Secretary Kahl, Tehran \"is unlikely to dash for a bomb in the near future because IAEA inspectors would probably detect Iranian efforts to divert low-enriched uranium and enrich it to weapons-grade level at declared facilities.\" Similarly, then-Deputy Assistant Secretary of Defense for Media Operations John Kirby told reporters on December 21, 2011, that were Iran to begin producing a nuclear weapon, IAEA inspectors would likely give sufficient warning for the United States to take action. Former IAEA Deputy Director-General Heinonen observed in 2010 that Iran would probably be caught if it attempted to divert more than \"small quantities\" of nuclear material from its safeguarded nuclear facilities. It would be extremely difficult to reconfigure the cascades in the Natanz facility without detection and, in any case, IAEA inspectors measure the isotopic content of enriched uranium and would thereby detect Iranian production of weapons-grade HEU. More recently, Clapper testified that the JCPOA ", "has also enhanced the transparency of Iran's nuclear activities ... [a]s a result, the international community is well postured to quickly detect changes to Iran's declared nuclear facilities designed to shorten the time Iran would need to produce fissile material.", "Although Iran could eject IAEA inspectors and/or withdraw from the NPT, such a move would be \"an incredibly provocative action and very risky for Iran to undertake,\" then-Department of State Special Advisor Einhorn argued in 2011, adding that Iran was unlikely to take such a risk because its operating first-generation centrifuges are inefficient. It is worth noting that such an action would be virtually unprecedented.", "A senior intelligence official explained in December 2007 that Iran could use knowledge gained from its Natanz facilities at covert enrichment facilities. According to the NIE, a \"growing amount of intelligence indicates Iran was engaged in covert uranium conversion and uranium enrichment activity,\" but Tehran probably stopped those efforts in 2003. U.S. officials have argued that Iran currently does not appear to have any nuclear facilities unknown to the United States. Then- CIA Director John Brennan stated during a March 2015 interview that the United States has \"a good understanding of what the Iranian nuclear program entails.\" During a July 31 , 2015, press briefing about possible Iranian undeclared nuclear facilities, U.S. Secretary of Energy Ernest Moniz stated that \"we feel pretty confident that we know their current configuration.\" U.S. officials have express ed confidence in the ability of U.S. intelligence to detect Iranian covert nuclear facilities ."], "subsections": []}]}]}, {"section_title": "Does Iran Have a Nuclear Weapons Program?", "paragraphs": ["In addition to the possible nuclear weapons-related activities discussed above, Iran has continued to develop ballistic missiles, which could potentially be used to deliver nuclear weapons. It is worth noting, however, that then-Director of National Intelligence Dennis Blair indicated during a 2009 Senate Armed Services Committee hearing that Iran's missile developments do not necessarily indicate that the government is also pursuing nuclear weapons, explaining that \"I don't think those missile developments ... prejudice the nuclear weapons decision one way or another. I believe those are separate decisions.\" Iran is developing missiles and space launch vehicles \"for multiple purposes,\" he added. Similarly, in a June 2015 statement to Parliament, British Foreign and Commonwealth Office official Tobias Ellwood stated that \"we are not aware of any current links between Iran's ballistic missile programme and nuclear programme.\"", "In any case, Tehran's nuclear program raised concerns for various other reasons. First, Iran was secretive about the program. For example, Tehran hindered the IAEA investigation by failing to disclose numerous nuclear activities, destroying evidence, and making false statements to the agency. Moreover, although Iran's cooperation with the agency improved, the IAEA still repeatedly criticized Tehran for failing to cooperate fully with the agency's investigation of certain issues concerning Iran's nuclear program. ", "Second, many observers have questioned Iran's need for nuclear power, given the country's extensive oil and gas reserves. The fact that Tehran resumed its nuclear program during its 1980-1988 war with Iraq has also cast doubt on the energy rationale. Furthermore, many countries with nuclear power reactors purchase nuclear fuel from foreign suppliers\u2014indeed, Russia has provided fuel for the Bushehr reactor\u2014a fact that calls into question Iran's need for an indigenous enrichment capability. Moreover, Iranian officials acknowledge that Iran lacks sufficient uranium deposits for its planned nuclear power program.", "Some government officials have expressed skepticism regarding Iran's stated rationale for its Arak reactor. Tehran says that the reactor is necessary to produce medical isotopes and to replace the Tehran Research Reactor (TRR). However, the TRR is capable of producing such isotopes and has unused capacity. Furthermore, as noted, Iran expressed the desire to obtain more fuel for the TRR. In addition, nonproliferation experts have argued that a new heavy-water reactor would be unnecessary for producing such isotopes. As noted, Iran has rendered the Arak reactor's original core inoperable pursuant to the JCPOA, which also commits Tehran to redesign and rebuild the reactor based on a design agreed to by the P5+1.", "Iran has maintained that its nuclear program has always been exclusively for peaceful purposes. As noted, the Iranian government says that it plans to expand its reliance on nuclear power in order to generate electricity. Indeed, some experts have documented Tehran's projected difficulty in exporting oil and natural gas without additional foreign investment in its energy infrastructure. Iran has argued that its covert nuclear procurement efforts were necessary to counter Western efforts to deny it nuclear technology\u2014a claim that appears to be supported by a 1997 CIA report.", "Tehran argues that it cannot depend on foreign suppliers for such fuel because such suppliers have been unreliable in the past. At least one expert has described Iran's inability to obtain nuclear fuel from an international enrichment consortium called Eurodif. During the 1970s, Iran had reached an agreement with Eurodif that entitled Iran to enriched uranium from the consortium in exchange for a loan. Former AEOI President Aghazadeh also argued that although Iran does not need to produce fuel for the Bushehr reactor, the government needed to complete the Natanz facility to provide fuel for the planned Darkhovin reactor. ", "Other factors also suggest that Iran may not have had an active nuclear weapons program after 2003. First, as noted, the IAEA has resolved the outstanding issues described in the August 2007 Iran-IAEA work plan, and the agency has not discovered significant undeclared Iranian nuclear activities for a number of years. Second, Tehran, beginning in 2003, has been willing to disclose previously undeclared nuclear activities to the IAEA. Third, Iran made important changes to the administration of its nuclear program in the second half of 2003\u2014changes that produced greater openness with the IAEA and may have indicated a decision to stop a nuclear weapons program. ", "Fourth, as noted above, Iranian officials have stated numerous times that Tehran is not seeking nuclear weapons, partly for religious reasons\u2014indeed, Khamene'i has issued a fatwa declaring that \"the production, stockpiling, and use of nuclear weapons are forbidden under Islam,\" according to Iranian officials. A change in this stance could damage Iranian religious leaders' credibility. In 2013, an Iranian Foreign Ministry spokesperson described the fatwa as the \"operational instruction\" for Iran's government. A senior Iranian official stated in February 2019 that \"according to the fatwa (religious verdict) of Ayatollah Khamenei, which is based on the hadith of the Prophet, Iran has no intention to make an atomic bomb.\"", "Mark Fitzpatrick of the International Institute for Strategic Studies has argued that \"given the pervasive religiosity of the regime, it is unlikely that Iran's supreme leader would be secretly endorsing military activity in explicit contradiction of his own religious edict.\" ", "Fifth, Iranian officials argued that nuclear weapons would not improve the country's security, arguing that Iran would not be able to compete with the nuclear arsenals of larger countries, such as the United States. Moreover, the Iranian government has asserted that \"Iran today is the strongest country in its immediate neighborhood. It does not need nuclear weapons to protect its regional interests.\" The U.S.-led spring 2003 invasion of Iraq, which overthrew Iraqi leader Saddam Hussein and thereby eliminated a key rival of Iran, may also have induced Tehran to decide that it did not need nuclear weapons. The government has also argued that a nuclear weapons program \"would be prohibitively expensive, draining the limited economic resources of the country.\" ", "In any case, since Iran has implemented its JCPOA commitments, which, as noted, include significant limits on Iran's nuclear program and transparency requirements with respect to that program, U.S. officials have argued that the Iranian nuclear program poses a less severe proliferation threat. For example, then-Secretary of Defense Ashton Carter testified in March 2016 that the agreement \"places significant limitations on Iran that will effectively cut off its pathways to the fissile material for a nuclear bomb.\""], "subsections": [{"section_title": "Government Estimates", "paragraphs": ["Since at least 2007, the U.S. intelligence community has issued unclassified assessments that Iran has not decided whether to develop nuclear weapons. According to the 2007 NIE, \"Iranian military entities were working under government direction to develop nuclear weapons\" until fall 2003, after which Iran halted its nuclear weapons program \"primarily in response to international pressure.\" The NIE defines \"nuclear weapons program\" as \"Iran's nuclear weapon design and weaponization work and covert uranium conversion-related and uranium enrichment-related work.\" The NIE adds that the intelligence community also assessed \"with moderate-to-high confidence that Tehran at a minimum is keeping open the option to develop nuclear weapons.\" The NIE also states that, because of \"intelligence gaps,\" the Department of Energy and the National Intelligence Council assessed \"with only moderate confidence that the halt to those activities represents a halt to Iran's entire nuclear weapons program.\" The NIE added that \"[s]ince fall 2003, Iran has been conducting research and development projects with commercial and conventional military applications\u2014some of which would also be of limited use for nuclear weapons.\"", "The NIE also states that \"Tehran's decision to halt its nuclear weapons program suggests it is less determined to develop nuclear weapons than we have been judging since 2005.\" The change in assessments, a senior intelligence official said in December 2007, was the result of \"new information which caused us to challenge our assessments in their own right, and illuminated previous information for us to be able to see it perhaps differently than we saw before, or to make sense of other data points that didn't seem to self-connect previously.\" According to press accounts, this information included various written and oral communications among Iranian officials indicating that the program had been halted. As noted, the United States may also have obtained information from Iranian officials who defected as part of a CIA program to induce them to do so, as well as from penetration of Iran's computer networks. In addition, the NIE incorporated open-source information, such as photographs of the Natanz facility that became available after members of the press toured the facility.", "According to the 2007 NIE, the intelligence community assessed \"with moderate-to-high confidence that Iran [did] not have a nuclear weapon.\" The community assessed \"with low confidence that Iran probably [had] imported at least some weapons-usable fissile material,\" but still judged \"with moderate-to-high confidence\" that Tehran still lacked sufficient fissile material for a nuclear weapon. ", "On several occasions, the U.S. intelligence community has reaffirmed the 2007 NIE's assessment that Iran halted its nuclear weapons program but is keeping its options open. The late-September 2009 revelation of the Fordow facility increased suspicions that Iran may have restarted its nuclear weapons program. As noted, some U.S. officials indicated that the facility was likely intended for a nuclear weapons program. Nevertheless, Administration talking points made public on September 25, 2009, stated that the intelligence community still assessed that \"Iran halted its nuclear weapons program in 2003.\" More recently, then-Director of National Intelligence Clapper testified in February 2016 that ", "[w]e continue to assess that Iran's overarching strategic goals of enhancing its security, prestige, and regional influence have led it to pursue capabilities to meet its nuclear energy and technology goals and give it the ability to build missile-deliverable nuclear weapons, if it chooses to do so. Its pursuit of these goals will dictate its level of adherence to the JCPOA over time. We do not know whether Iran will eventually decide to build nuclear weapons.\"", "Director of National Intelligence Coats reiterated the last sentence in May 2017 testimony. He testified in January 2019 that the U.S. intelligence community \"continue[s] to assess that Iran is not currently undertaking the key nuclear weapons-development activities we judge necessary to produce a nuclear device.\" Additional recent statements from U.S. officials indicate that Iran has not resumed its nuclear weapons program. Any decision to produce nuclear weapons \"will be made by the Supreme Leader,\" Clapper stated in April 2013.", "The November 2011 report from IAEA Director-General Amano appears to support the U.S. assessment. As noted, the report states that Iranian activities related to building a nuclear explosive device \"took place under a structured programme,\" but senior Iranian officials ordered a halt to the program in late 2003. Echoing the judgment of the 2007 NIE, Amano's report mentions \"indications that some activities relevant to the development of a nuclear explosive device continued after 2003,\" adding that some such activities \"may still be ongoing.\" Most of the activities listed in the report occurred before the end of 2003. During a briefing about Amano's report, a senior Administration official described Iran's post-2003 weapons-related work as \"a much less coordinated ... more sporadic set of research activities,\" some of which \"are sort of related to nuclear weapons development.\" As noted, an April 2012 Department of Defense report described Amano's report as containing \"extensive evidence of past and possibly ongoing Iranian nuclear weapons-related research and development work.\" Amano's December 2, 2015, report assesses that \"before the end of 2003, an organizational structure was in place in Iran suitable for the coordination of a range of activities relevant to the development of a nuclear explosive device.\" S ome Iranian nuclear weapons-related activities \" took place after 2003,\" the report adds, noting that these activities \"were n ot part of a coordinated effort. \" The IAEA \"has no credible indications of activities in Iran relevant to the development of a nuclear explosive device after 2009,\" the report explains. (See also \" Nuclear Weapon Development Capabilities .\")", "Some foreign intelligence agencies have apparently concurred with the U.S. assessment that Iran has not yet decided to build nuclear weapons. Director of the French General Directorate of External Security Erard Corbin de Mangoux stated in an interview published in 2010 that \"[w]e do not yet know whether Tehran's objective is to enable itself to acquire such a capability (so-called 'threshold status') or actually to possess it.\" In 2012, Israeli Foreign Minister Avigdor Lieberman appeared to confirm reports that Israeli intelligence shares this U.S. assessment. Moreover, according to a 2012 Israeli intelligence report, \"until 2003,\" Iran had a \"set nuclear program ... for R&D of nuclear weapons.\" However, the report indicates that Iran had not restarted the nuclear weapons program. German intelligence assessments have also reportedly concurred with this assessment. ", "It is worth noting that the February 2018 Nuclear Posture Review asserts that \"Iran's development of increasingly long-range ballistic missile capabilities, and its aggressive strategy and activities to destabilize neighboring governments, raises questions about its long-term commitment to foregoing nuclear weapons capability.\" National Security Adviser John Bolton stated during a January 6, 2019, press conference that \"we have little doubt that Iran's leadership is still strategically committed to achieving deliverable nuclear weapons.\""], "subsections": []}, {"section_title": "Living with Risk", "paragraphs": ["Other findings of the NIE indicate that the international community may, for the foreseeable future, have to accept some risk that Iran will develop nuclear weapons. According to the 2007 NIE, \"only an Iranian political decision to abandon a nuclear weapons objective would plausibly keep Iran from eventually producing nuclear weapons\u2014and such a decision is inherently reversible.\" As noted, the U.S. intelligence community assesses that Iran has the capacity to produce nuclear weapons at some point. This is not to say that an Iranian nuclear weapons capability is inevitable. As noted above, Iran does not yet have such a capability. But Tehran adherence to the JCPOA is probably necessary to provide the international community with confidence that it is not pursuing a nuclear weapon."], "subsections": []}, {"section_title": "Other Constraints on Nuclear Weapons Ambitions325", "paragraphs": ["The production of fissile material is widely considered the most difficult step in nuclear weapons development. However, even if it had the ability to produce weapons-grade HEU, Iran would still face challenges in producing nuclear weapons, such as developing a workable physics package and effective delivery vehicles. A 1978 CIA report points out that there is a ", "great difference between the development and testing of a simple nuclear device and the development of a nuclear weapons system, which would include both relatively sophisticated nuclear designs and an appropriate delivery system.", "Moreover, Iran would face significant challenges if it were to attempt to develop and produce HEU-based nuclear weapons covertly; although, as noted, covert production would probably be Tehran's preferred option. Covert centrifuge facilities are notoriously difficult for intelligence agencies to detect, but Iran may not be able to complete a covert centrifuge facility without detection. A 2005 International Institute for Strategic Studies report concluded that \"an Iranian planner would have little basis for confidence that significant nuclear facilities could be kept hidden.\" Tehran would need to hide a number of activities, including uranium conversion, the movement of uranium from mines, and the movement of centrifuge feedstock. Alternatively, Iran could import uranium ore or centrifuge feedstock, but the government would also need to do so covertly. Tehran's implementation of the JCOA has further decreased the probability that the government could successfully conceal a nuclear weapons program. ", "The difficulty of the above task becomes clearer when one considers that foreign intelligence agencies apparently possess a significant amount of information about the Iran's enrichment program. First, both the Natanz and Fordow facilities were discovered by foreign governments before they became operational. Second, the development of the Stuxnet computer worm, discussed above, indicates that at least one foreign government possesses a large amount of information about Iran's centrifuge program, which could not have been obtained via IAEA reporting, according to some experts. As noted, U.S. officials have express ed confidence in the ability of U.S. intelligence to detect Iranian covert nuclear facilities .", "It is worth noting that, without conducting explosive nuclear tests, Iran could produce only fairly simple nuclear weapons, which are not deliverable by longer-range missiles. Such tests, many analysts argue, would likely be detected. Francois Geleznikoff, director of military applications at Le Commissariat \u00e0 L'Energie Atomique et aux \u00c9nergies Alternative in France, described during a 2018 National Assembly hearing his directorate's monitoring of Iran's and North Korea's nuclear programs:", "This monitoring depends primarily on the detection of any nuclear tests that they may carry out. Thanks to the international detection system established by the Comprehensive Nuclear Test Ban Treaty, in which France participates actively, and thanks to our own analysis, we are able to alert the French authorities within 30 minutes of a North Korean test, and the same would apply in the event of an Iranian test, for instance.", "Moreover, moving from the production of a simple nuclear weapon to more sophisticated nuclear weapons could take several additional years.", "Appendix A. Iranian Statements on Nuclear\u00a0Weapons", "Iranian officials have repeatedly asserted that the country's nuclear program is exclusively for peaceful purposes. For example, Supreme Leader Ayatollah Ali Khamene'i declared during a June 3, 2008, speech that Iran is opposed to nuclear weapons \"based on religious and Islamic beliefs as well as based on logic and wisdom.\" He added, \"Nuclear weapons have no benefit but high costs to manufacture and keep them. Nuclear weapons do not bring power to a nation because they are not applicable. Nuclear weapons cannot be used.\" Similarly, then-Iranian Foreign Ministry spokesperson Hassan Qashqai stated on November 10, 2008, that \"pursuance of nuclear weapons has no place in the country's defense doctrine.\" Khamene'i stated in 2012 that", "Ideologically and religiously speaking, we believe that it is not right [to have nuclear weapons]. We believe that this move [making nuclear weapons] and the use of such weapons are a great sin. We also believe that stockpiling such weapons is futile, expensive and harmful; and we would never seek this.", "Asked in 2012 if Iran is trying to develop the capability to produce a nuclear weapon, Ambassador Mohammad Chasee, Iran's Permanent Representative to the United Nations, stated that \"[w]e are not going to develop the capacity to be able to make any weapon of mass destruction.\" Iranian Foreign Minister Javad Zarif argued in 2014 that Khamene'i \"has explicitly declared his opposition with regard to the manufacture, stockpile and use of nuclear weapons,\" and observed that \"nuclear weapons have no place in Iran's defense doctrine.\" More recently, President Hassan Rouhani stated in 2018 that \"we are not thinking about developing nuclear weapons, nor will we think about it. The Supreme Leader [Ali Khamenei] has banned it and said that it is not appropriate.\"", "Appendix B. Organization of Iran's Nuclear Program", "The Atomic Energy Organization of Iran (AEOI), which the government established in 1974, operates Iran's declared nuclear program and has a variety of peaceful programs in areas such as agriculture, medicine, and basic nuclear research and development. According to the U.S. Department of the Treasury, the AEOI \"has operational and regulatory control over Iran's nuclear program,\" \"reports directly to the Iranian President,\" and is the \"main Iranian organization responsible for research and development activities in the field of nuclear technology.\" Iran's Minister of Science, Research and Technology stated in January 2019 that \"the AEOI acts upon decisions made by the country's Supreme National Security Council.\"", "The AEOI has been Tehran's main interlocutor with the IAEA. According to an August 2008 Institute for Science and International Security (ISIS) report, the AEOI controls the country's centrifuge program, but that program is operated by an AEOI entity called the Kalaye Electric Company. AEOI officials have told the IAEA that Iran decided to begin its centrifuge enrichment program in 1985. The program ", "consisted of three phases: activities during the first phase, from 1985 until 1997, had been located mainly at the AEOI premises in Tehran; during the second phase, between 1997 and 2002, the activities had been concentrated at the Kalaye Electric Company in Tehran; during the third phase, 2002 to the present, the R&D and assembly activities were moved to Natanz.", "Gholamreza Aghazadeh's term as AEOI president, which began in 1997, marked an acceleration of Iran's enrichment program. According to President Hassan Rouhani, who headed the 2003-2005 negotiations concerning the nuclear program, the government in 1998 formed the Supreme Council for New Technologies, chaired by then-President Mohammad Khatami, which focused on the nuclear program. Beginning around 1999, Iran's central government gave the AEOI \"authorities that it did not have before,\" Rouhani stated in a 2004 speech, explaining that ", "we gave the agency a freer hand with new credits and a more liberal spending procedure, new facilities, and special regulations. This allowed them to become more active, without being forced to go through bureaucratic and regulatory labyrinths. ", "Nuclear Weapons Program", "Beginning in the late 1980s, Iran's nuclear weapons program was coordinated by entities connected with Iran's Ministry of Defense Armed Forces Logistics (MODAFL). The AMAD Plan took over these activities several years later; the projects were \"allegedly managed through the 'Orchid Office.'\" After Iran ended the nuclear weapons program in 2003, \"staff remained in place to record and document the achievements of their respective projects,\" according to information provided to the IAEA by unnamed governments. Later, \"equipment and work places were either cleaned or disposed of so that there would be little to identify the sensitive nature of the work which had been undertaken.\" Tehran established an organization called the Organization of Defensive Innovation and Research (SPND) in 2011 by an individual who had \"managed activities useful in the development of a nuclear explosive device\" as part of the Amad Plan and associated entities. The SPND \"is completely separate from Iran's civil nuclear program,\" a senior U.S. official explained during a March 2019 press briefing.", "According to a 2012 Israeli intelligence document, Iran established the SPND \"for the purposes of preserving the technological ability and the joint organizational framework of Iranian scientists in the area of R&D in nuclear weapons, and for the purposes of retaining the skills of the scientists.\" These activities were to \"allow renewal of the activity necessary to produce weapons immediately when the Iranian leadership decides to do so.\" During an March 2019 press briefing, a senior U.S. official described the SPND as", "an organization, chunks of which seem to have been created precisely in order to employ people on dual-use things that could easily be repurposed into the very kind of work that was being done before on the weapons program and \u2026 in a sense, to keep their skills sharp and available to the Iranian clerical regime.", "Nevertheless, the IAEA reported in December 2015 that, despite the SPND's establishment in 2011, the post-2003 activities \"were not part of a coordinated effort\" and the agency \"has no credible indications of activities in Iran relevant to the development of a nuclear explosive device after 2009.\" (For more details, see Appendix E .)", "The AEOI had links with some entities that were apparently connected to the Amad Plan. For example, a company called Kimia Maadan \"was a cover company for chemical engineering operations under the AMAD Plan while also being used to help with procurement for the [AEOI].\" The organization contracted with the same company to design and build the Gchine mill. Furthermore, Tehran's AEOI-run centrifuge program had connections to entities controlled by Iran's MODAFL, which controlled the Amad Plan. For example, Iran fabricated some components for its second-generation centrifuge in a workshop located on a site belonging to Iran's Defence Industries Organization, which was part of MODAFL. ", "Nevertheless, several factors indicate that the AEOI's illicit nuclear activities were not necessarily part of the nuclear weapons program. First, the NIE appeared to exclude the AEOI-run enrichment program. Explaining that the U.S. intelligence community defined the weapons activities as \"nuclear weapon design and weaponization work and covert uranium conversion-related and uranium enrichment-related work,\" the estimate added that \"Iran's declared civil work related to uranium conversion and enrichment\" was not part of the weapons program. Moreover, a November 2011 IAEA description of the suspected past nuclear weapons program's management structure omits the AEOI. Lastly, September 2009 U.S. intelligence community talking points regarding the September 2009 joint British, French, and U.S. revelation of Iran's Fordow centrifuge facility state that the plant's existence did \"not contradict\" the 2007 NIE's conclusions regarding Iran's nuclear weapons program. One reason for this assessment, the talking points suggest, was that the Fordow facility was developed by the AEOI.", "U.S. and British officials have stated that Iranian missile development is not currently linked to the nuclear program. Iran's MODAFL oversees Iran's ballistic missile program. The Aerospace Industries Organization, a MODAFL subsidiary, oversees the country's missile production. Although some Islamic Revolutionary Guard Corps (IRGC) entities are associated with MODAFL and the IRGC Air Force operates Iran's ballistic missiles, these entities do not appear to be associated with the AEOI. A State Department official explained in October 2016 that the IRGC \"was not responsible for\" activities related to the possible military dimensions of Iran's nuclear program.", "Appendix C. Multilateral Diplomacy Concerning Iran's Nuclear Program", "In fall 2002, the IAEA began to investigate Iran's nuclear activities at Natanz and Arak. Inspectors visited the sites the following February. The IAEA board adopted its first resolution, which called on Tehran to increase its cooperation with the agency's investigation and to suspend its uranium enrichment activities, in September 2003. The next month, Iran concluded an agreement with France, Germany, and the United Kingdom, collectively known as the \"E3,\" to suspend its enrichment activities, sign and implement an Additional Protocol to its IAEA safeguards agreement, and comply fully with the IAEA's investigation. As a result, the IAEA board decided to refrain from referring the matter to the U.N. Security Council, despite U.S. advocacy for such a referral. Statements from current and former Iranian officials indicate that during fall 2003, Tehran feared that the United States might use Security Council referral as a means to undertake military action or other coercive measures against Iran. ", "The IAEA's investigation, as well as information Tehran provided after the October 2003 agreement, ultimately revealed that Iran had engaged in a variety of clandestine nuclear-related activities, some of which violated Iran's safeguards agreement. These included plutonium separation experiments, uranium enrichment and conversion experiments, and importing various uranium compounds.", "After October 2003, Iran continued some of its enrichment-related activities, but Tehran and the E3 agreed in November 2004 to a more detailed suspension agreement. During negotiations between fall 2003 and summer 2005, both Iran and the E3 offered a number of proposals, although the two sides never reached agreement. According to one former British official involved in the negotiations, a chief obstacle was E3 opposition to a 2005 Iranian proposal that would have included a limited Iranian enrichment program. A former Iranian official argued that the perceived lack of success of Iranian officials who had participated in negotiations with the E3 discredited those officials in the eyes of other Iranian officials. ", "The United States influenced several aspects of the E3 negotiations during this time. For example, the George W. Bush Administration opposed an E3 request to ease sanctions on certain U.S. goods. The United States also persuaded the E3 to refrain from agreeing to any arrangement with Iran that included even a limited Iranian enrichment program, according to accounts from E3 officials directly involved in the diplomacy. Former President George W. Bush has written that the United States' \"ultimate goal\" was \"stopping Iranian enrichment.\" ", "Iran resumed uranium conversion in August 2005 under the leadership of President Mahmoud Ahmadinejad, who had been elected two months earlier. On September 24, 2005, the IAEA Board of Governors adopted a resolution that, for the first time, found Iran to be in noncompliance with its IAEA safeguards agreement. The board, however, did not refer Iran to the Security Council, choosing instead to give Tehran additional time to comply with the board's demands. Iran announced in January 2006 that it would resume research and development on its centrifuges at Natanz. In response, the IAEA board adopted a resolution on February 4, 2006, that referred the matter to the Security Council. Two days later, Tehran announced that it would stop implementing its Additional Protocol.", "In June 2006, China, France, Germany, Russia, the United Kingdom, and the United States, collectively known as the \"P5+1,\" presented a proposal to Iran that offered a variety of incentives in return for Tehran taking several steps to assuage international concerns about its enrichment and heavy-water programs. The proposal called on the government to address the IAEA's \"outstanding concerns ... through full cooperation\" with the agency's ongoing investigation of Tehran's nuclear programs, to \"suspend all enrichment-related and reprocessing activities,\" and to resume implementing its Additional Protocol.", "Then-European Union High Representative for Common Foreign and Security Policy Javier Solana presented a revised version of the 2006 offer to Iran in June 2008. P5+1 representatives discussed the new proposal with Iranian officials the next month. Iran provided a follow-up response in August 2008, but the six countries deemed it unsatisfactory. Tehran told the IAEA that it would implement its Additional Protocol \"if the nuclear file\" were \"returned from the Security Council\" to the agency. It is not clear that the council could have met this condition. The 2006 offer's requirements were also included in several U.N. Security Council resolutions, including Resolution 1929, which was adopted on June 9, 2010. Iran issued another proposal in early September 2009, which described a number of economic and security issues as potential topics for discussion but only obliquely mentioned nuclear issues and did not explicitly mention Iran's nuclear program.", "Tehran Research Reactor Discussions", "After an October 1, 2009, meeting in Geneva with the P5+1 and High Representative Solana, Iranian officials repeatedly stated that Tehran wanted future discussions about its September 2009 proposal. Nevertheless, during that meeting, Iranian officials agreed in principle to a proposal that would provide LEU fuel containing about 20% uranium-235 for Iran's U.S.-supplied Tehran Research Reactor (TRR), which produces medical isotopes and operates under IAEA safeguards. Iran asked the IAEA in a June 2, 2009, letter to provide fresh fuel for its U.S-supplied TRR. Initially fueled by U.S.-supplied HEU, the reactor was converted to use LEU fuel in 1994 after Argentina in 1987 agreed to supply the reactor with such fuel, which contained about 20% uranium-235. Subsequent to Iran's June 2009 request, the United States and Russia presented a proposal to the IAEA (which the agency conveyed to Iran) for providing fuel for the reactor. ", "According to the proposal, Iran would have transferred approximately 1,200 kilograms of its low-enriched uranium hexafluoride to Russia, which would have either enriched the uranium to about 20% uranium-235 or produced such LEU from Russian-origin uranium. Moscow would then have transferred the low-enriched uranium hexafluoride to France for fabrication into fuel assemblies. Finally, Paris would have transferred the assemblies to Russia for shipment to Iran. France would have delivered the fuel within about one year. As of October 30, 2009, Iran had produced 1,763 kilograms of low-enriched uranium hexafluoride containing less than 5% uranium-235. ", "Beginning on October 19, 2009, Iranian officials met with officials from the IAEA, France, Russia, and the United States to discuss details of implementing the proposal, such as the fuel price, contract elements, and a timetable for shipping the fuel. Two days later, then-IAEA Director-General Mohamed ElBaradei announced the conclusion of a \"draft agreement,\" which was drafted by the IAEA. Iran, France, Russia, and the United States held further discussions regarding the proposal's implementation, but they did not reach agreement with Tehran. Iran resisted transferring all 1,200 kilograms of low-enriched uranium hexafluoride out of the country before receiving the reactor fuel, arguing that the proposal needed more credible assurances that the fuel would actually be delivered. During the last few months of 2009, Iranian officials suggested different compromises, such as shipping its low-enriched uranium hexafluoride out of the country in phases or simultaneously exchanging that material for the TRR fuel on an Iranian island or in a third country, but these proposals were not accepted by the United States, France, and Russia. ", "Further details about the French, Russian, and U.S. proposals later became public. For example, the IAEA had agreed to take formal custody of any Iranian low-enriched uranium hexafluoride transferred pursuant to a TRR agreement. In addition, France, Russia, and the United States had agreed to a \"legally binding Project and Supply Agreement\"; agreed to \"support technical assistance through the IAEA to ensure\" that the TRR would operate safely; and expressed support for allowing Iran to transfer its low-enriched uranium hexafluoride to a third country, which would hold that material in escrow until the TRR fuel was fabricated. The United States also offered \"substantial political assurances that the agreement would be fulfilled.\" An April 20, 2010, letter from then-President Obama to then-President Brazilian President Luis In\u00e1cio Lula da Silva stated that the United States had expressed its willingness to \"potentially even play a more direct role in the fuel production process,\" but did not elaborate. ", "The October 2009 IAEA draft did not include an explicit prohibition on Iranian production of uranium enriched to about 20% uranium-235. Instead, the agreement's proponents argued that the supply of fuel for the TRR would obviate the need for Tehran to produce the fuel on its own. The escrow proposal described in the previous paragraph was not contained in the October 2009 IAEA draft. Whether the other provisions described above were explicitly contained in that draft is unclear because no public official copy of it exists. Following a November 20, 2009, meeting, the P5+1 issued a joint statement expressing disappointment with Tehran's failure to respond positively to the TRR proposal. \"We have agreed to remain in contact and expect a further meeting soon to complete our assessment of the situation and to decide on our next steps,\" the statement said. Although some subsequent Iranian statements suggested that Iran was still open to some version of the IAEA proposal, Tehran never officially accepted it. ", "Following a May 17, 2010, meeting of Iranian President Ahmadinejad, Turkish Prime Minister Recep Tayyip Erdogan, and Brazilian President Lula, Iran accepted a proposal, known as the Tehran Declaration, for supplying the TRR with fuel. Iran conveyed its acceptance of the declaration in a May 24, 2010, letter to the IAEA. The Tehran Declaration contained some of the same elements as the October 2009 IAEA draft proposal and other elements described in a February 12, 2010, letter to the IAEA. For example, the declaration stated that Iran would be willing to \"deposit\" 1,200 kilograms of LEU in Turkey. Iran would deposit the fuel, which would be subject to IAEA monitoring in Turkey, \"not later than one month\" after reaching an agreement regarding the details of the exchange with France, Russia, the United States, and the IAEA. However, unlike the IAEA draft proposal, the declaration did not mention an ultimate destination for the LEU to be deposited in Turkey. As noted, Tehran had resisted transferring all 1,200 kilograms of LEU out of the country before receiving fuel for the TRR.", "IAEA Director-General Amano told the agency's Board of Governors on June 7, 2010, that he had \"immediately conveyed Iran's letter\" to France, Russia, and the United States \"and asked for their views.\" Those three governments responded to the IAEA two days later with letters and a joint paper titled \"Concerns about the Joint Declaration Conveyed by Iran to the IAEA.\" The paper conveyed several reservations about the Tehran Declaration, but did not reject it outright. One reason for the U.S. refusal to accept the proposal was fear that the proposal would disrupt efforts to persuade the Security Council to adopt a resolution imposing additional sanctions on Iran (the council adopted Resolution 1929 in June 2010).", "Further Talks", "Iran and the P5+1 met in December 2010 and January 2011, but the two meetings, held in Geneva and Istanbul, respectively, produced no results. In April 2012, the two sides resumed talks in Istanbul. Iran and the P5+1 subsequently held two rounds of talks\u2014a May meeting in Baghdad and a June meeting in Moscow. In addition, the two sides held expert-level discussions in Istanbul in July 2012. Former U.S. officials involved in the JCPOA negotiations have stated that the U.S. decision, articulated to Iran during 2013, to drop its previous insistence that Iran end its enrichment program was decisive for reaching a final agreement. Iranian and Russian officials have made similar claims.", "Following the April 2012 talks, the P5+1 stated that the process of inducing Iranian compliance with \"all its international obligations\" would be \"guided by the principle of the step-by-step approach and reciprocity.\" The P5+1 presented their proposal the next month during the Baghdad meeting. The six governments demanded that Tehran end its production of enriched uranium containing approximately 20% uranium-235; ship to a third country Iran's stockpile of uranium enriched to this level (this uranium would be under IAEA monitoring); halt enriching uranium, as well as installing centrifuges and centrifuge components, at the Fordow facility; and cooperate fully with the IAEA's investigation. Then-European Union High Representative Catherine Ashton for Common Foreign and Security Policy stated on May 24, 2012, that the P5+1 \"put ideas on the table on reciprocal steps we would be prepared to take.\" These included ", "refraining from imposing new sanctions on Iran; facilitating Iranian access to spare aircraft parts, as well as safety and repair inspections; providing fuel for the TRR; supporting IAEA technical cooperation regarding the TRR's safety; providing medical isotopes to Tehran; potentially reviewing suspended IAEA technical cooperation projects with Iran; and cooperating on Tehran's acquisition of a light-water reactor for producing radioisotopes.", "The two sides again held talks in February 2013. Technical experts from the P5+1 and Iran met the next month, and another round of talks at the political director level took place in April 2013. Following the June 2013 election of Iranian President Hassan Rouhani, many observers expressed optimism that these negotiations would produce an agreement. After Rouhani took office in August 2013, Iran and the P5+1 met twice later that year (once in October and once in November). The two sides met again on November 20, 2013, and agreed to an accord called the Joint Plan of Action (JPA) on November 24. This agreement set out an approach toward reaching a long-term comprehensive solution to international concerns regarding Iran's nuclear program. The two sides began implementing the JPA on January 20, 2014. The P5+1 and Iran agreed on a framework for a Joint Comprehensive Plan of Action (JCPOA) on April 2, 2015, and finalized the JCPOA on July 14, 2015. ", "JCPOA Status", "On May 8, 2018, President Donald Trump announced that the United States would no longer participate in the JCPOA. The United States subsequently reimposed sanctions that had been suspended pursuant to the agreement. (For more information about the Trump Administration's JCPOA policy, see Appendix D .) The U.S. withdrawal attracted broad criticism among the other parties to the JCPOA, which states that the P5+1 and Iran \"commit to implement\" the agreement \"in good faith and in a constructive atmosphere, based on mutual respect, and to refrain from any action inconsistent with the letter, spirit and intent of this JCPOA that would undermine its successful implementation.\" Whether the U.S. withdrawal violates UN Security Council Resolution 2231 is unclear; U.S. officials have argued that the JCPOA is not legally binding, but a European Union official told CRS in a November 30, 2016, email that \"the commitments under the JCPOA have been given legally binding effect through UNSC Resolution 2231 (2015).\" ", "Following the initial reactions to the U.S. exit from the accord, Iran and the other parties began negotiations on concrete steps that would continue to provide Iran with the economic benefits of the JCPOA. On May 16, 2018, in an apparent effort to meet Iran's demands for remaining in the agreement, the EU announced \"practical measures\" for continued implementation of the JCPOA, including the following:", "maintaining and deepening economic relations with Iran; the continued sale of Iran's oil and gas condensate petroleum products and petrochemicals and related transfers; effective banking transactions with Iran; continued sea, land, air, and rail transportation relations with Iran; provision of export credit and special provisions in financial banking to facilitate economic and financial cooperation and trade and investment; further memoranda of understanding and contracts between European companies and Iranian counterparts; further investments in Iran; the protection of European Union economic operators and ensuring legal certainty; and further development of a transparent, rules-based business environment in Iran.", "Several E3 officials asserted in a November 2, 2018, statement with EU High Representative for Foreign Affairs and Security Policy Federica Mogherini that ", "[i]t is our aim to protect European economic operators engaged in legitimate business with Iran\u2026. As parties to the JCPoA, we have committed to work on, inter alia, the preservation and maintenance of effective financial channels with Iran, and the continuation of Iran's export of oil and gas. ", "On January 31, 2019, France, Germany, and the United Kingdom, announced the creation of \"a Special Purpose Vehicle aimed at facilitating legitimate trade between European economic operators and Iran.\" Called the Instrument for Supporting Trade Exchanges (INSTEX SAS), the vehicle \"will support legitimate European trade with Iran, focusing initially on the sectors most essential to the Iranian population\u2014such as pharmaceutical, medical devices and agri-food goods,\" according to the January 31 announcement. It added that the E3 should reaffirm that its \"efforts to preserve the economic provisions of the JCPOA are conditioned upon Iran's full implementation of its nuclear-related commitments, including full and timely cooperation with the IAEA.\" ", "In a May 9 statement with Mogherini, the E3 Foreign Ministers responded to an Iranian announcement the previous day that Tehran would stop performing some of its JCPOA commitments. \"We remain fully committed to the preservation and full implementation of the JCPOA,\" the statement explained, adding that the participants \"strongly urge Iran to continue to implement its [JCPOA] commitments \u2026 and to refrain from any escalatory steps.\" The statement also reiterated the participants' determination \"to continue pursuing efforts to enable the continuation of legitimate trade with Iran.\"", "Iranian Reaction", "Iranian officials have repeatedly stated that Tehran would fulfill its JCPOA commitments as long as the United States did, and they repeatedly have rejected renegotiating the JCPOA or negotiating a new agreement, such as the sort described by U.S. officials. Amano told the IAEA Board of Governors on March 4, 2019, that \"Iran is implementing its nuclear-related [JCPOA] commitments.\" ", "Iran \"is fully prepared to return to the pre-JCPOA situation or even [to conditions] more robust than that if the US reneges on its promises to the extent that the JCPOA's continuation harms our national interests,\" Iranian Foreign Minister Javad Zarif asserted the previous month. Deputy Foreign Minister Seyed Abbas Araqchi claimed that Iran \"will be able to reach the industrial enrichment phase in less than two years\"; other Iranian officials have asserted that the country can rapidly reconstitute its fissile material production capability. \"Iran will remain committed to the nuclear deal if the remaining signatories to the JCPOA abide by their commitments,\" Araqchi stated in late January 2019. Atomic Energy Organization of Iran (AEOI) spokesperson Behrouz Kamalvandi stated about two weeks later that, should the remaining JCPOA parties fail to fulfill their JCPOA obligations, the AEOI will accelerate the nuclear program with \"dazzling speed.\"", "Iranian officials have described a number of possible responses to a U.S. decision to reimpose U.S. sanctions, including resuming uranium enrichment, referring the matter to the Joint Commission, decreasing cooperation with the IAEA, and withdrawing from the NPT. These responses do not include the possible Iranian development of nuclear weapons, Iranian officials have said. Asked on April 21, 2018, if Iran will continue to meet its JCPOA obligations if all P5+1 parties except for the United States continue to uphold their obligations, Zarif replied, \"I believe that's highly unlikely.\" He added that ", "it is important for Iran receive the benefits of the agreement. And there is no way that Iran would do a one-sided implementation of the agreement. And it would require a major effort because right now, with the United States ostensibly in the agreement, a lot has been lacking in terms of Iran benefiting from the deal. ", "Following Trump's May 2018 announcement, Iranian officials rejected negotiating any new agreements. In a May 10, 2018, letter to U.N. Secretary General Ant\u00f3nio Guterres, Foreign Minister Zarif wrote that \"[i]f JCPOA is to survive, the remaining JCPOA Participants and the international community need to fully ensure that Iran is compensated unconditionally through appropriate national, regional and global measures.\" He added that ", "Iran has decided to resort to the JCPOA mechanism in good faith to find solutions in order to rectify the United States' multiple cases of significant non-performance and its unlawful withdrawal, and to determine whether and how the remaining JCPOA Participants and other economic partners can ensure the full benefits that the Iranian people are entitled to derive from this global diplomatic achievement.", "Supreme Leader Ayatollah Ali Khamene'i stated on May 23 that Iran will continue to participate in the JCPOA only if Europe provides \"concrete guarantees\" that it maintains Iran's existing revenue stream from oil sales to the EU countries. He also demanded that Europe not raise the issues of Iran's missiles programs or regional influence, adding that \"Iran has the right to resume its nuclear activities.\" President Rouhani expressed a similar view in a July 4 speech. ", "According to Iranian officials, Tehran has begun preparations for expanding its uranium enrichment program, albeit within the parameters of the JCPOA for the time being. AEOI spokesperson Kamalvandi stated on June 5, 2018, that the organization \"will start the process of boosting the capacity of the country's uranium enrichment,\" by increasing Iran's capacity to produce uranium hexafluoride. On June 27, Iran's official news agency announced that Iran has resumed operations at its uranium conversion facility, which Iran has used to produce this material. ", "Kamalvandi explained that Iran would begin the process of \"manufacturing and assembly of centrifuge rotors,\" which are critical components of such machines. Iran \"will begin building a centrifuge rotor plant,\" he noted. In addition, AEOI head Ali Akbar Salehi stated that Tehran will begin using an \"advanced centrifuge assembly centre in the Natanz nuclear facility,\" which Iran had not disclosed publicly. Kamalvandi noted that Iran would continue to operate within the constraints of its JCPOA commitments, but added that, should the JCPOA collapse, Iran would produce centrifuges beyond those constraints. As noted, Iran remains subject to its obligations pursuant to the JCPOA and Resolution 2231 and could be subject to the reimposition of multilateral sanctions if Tehran violates these obligations. ", "Several multilateral meetings since the U.S. withdrawal have not produced a firm Iranian commitment to the JCPOA. At Iran's request, the Joint Commission held meetings, attended by all of the JCPOA parties except for the United States, on May 25 and July 6. At the conclusion of the July 6 meeting, the Joint Commission participants reaffirmed their commitment to the EU \"practical measures\" enumerated above. However, President Rouhani reacted to the pledges by saying that \"[u]nfortunately, the EU's package of proposals lacked an operational solution and a specific method for cooperation.\" Reacting to the January 2019 E3 announcement of the Special Purpose Vehicle, Foreign Minister Zarif warned on February 17, 2019, that \"INSTEX falls short of the commitments by the E3 to 'save' the JCPOA,\" adding that \"Europe needs to be willing to get wet if it wants to swim against the dangerous tide of U.S. unilateralism.\"", "In May 8 letters to the other JCPOA participant governments, Iran announced that, as of that day, Tehran had stopped \"some of its measures under the JCPOA,\" though the government emphasized that it was not withdrawing from the agreement. Specifically, Iran will not transfer LEU or heavy water out of the country in order to maintain those stockpiles below the JCPOA-mandated limits described above. The Iranian government has stated that it will resume full compliance with the JCPOA if the remaining JCPOA participants agree during a 60-day period following the May 8 announcement to meet Tehran's \"main demands, specifically in the banking and oil sectors.\" Absent such an agreement, Iran will cease to accept any constraints on the amount of uranium-235 contained in any Iranian-produced enriched uranium. Iran may then also resume work on the Arak reactor according to the JCPOA-mandated design. Iran will \"take other steps,\" should Tehran fail to reach an agreement with the remaining JCPOA participants during a 60-day period to begin after Iran takes this second set of steps. Iran has also announced that Tehran \"will show a strong and immediate response\" if the remaining JCPOA participants respond to the May 8 action by referring Iran's case to the Security Council or imposing additional sanctions on Iran.", "Appendix D. Trump Administration Joint Cooperative Plan of Action Policy", "On May 8, 2018, President Donald Trump announced that the United States would no longer participate in the Joint Cooperative Plan of Action (JCPOA) and would reimpose U.S. sanctions that had been suspended pursuant to the agreement. President Trump ordered Secretary of State Michael Pompeo to \"take all appropriate steps to cease the participation of the United States in the JCPOA,\" and, along with Secretary of the Treasury Steven Mnuchin, to immediately \"begin taking steps to reimpose all United States sanctions lifted or waived in connection\" with the agreement. The United States has notified the other P5+1 states that it will no longer attend meetings of the Joint Commission, the working group concerning the Arak reactor, or the procurement working group, all of which were established pursuant to the JCPOA. ", "Secretary Pompeo detailed a new U.S. approach with respect to Iran during a May 21, 2018, speech as applying \"unprecedented financial pressure on the Iranian regime,\" working \"with the Department of Defense and our regional allies to deter Iranian aggression,\" and advocating \"tirelessly for the Iranian people.\" He asserted that, in exchange for \"major changes\" in Iran's behavior, the United States is \"prepared to end the principal components of every one of our sanctions against the regime \u2026, re-establish full diplomatic and commercial relationships with Iran ..., [a]nd support the modernization and reintegration of the Iranian economy into the international economic system.\"", "Pompeo listed a number of essential elements for any new agreement:", "First, Iran must declare to the IAEA a full account of the prior military dimensions of its nuclear program, and permanently and verifiably abandon such work in perpetuity. Second, Iran must stop enrichment and never pursue plutonium reprocessing. This includes closing its heavy-water reactor. Third, Iran must also provide the IAEA with unqualified access to all sites throughout the entire country. Iran must end its proliferation of ballistic missiles and halt further launching or development of nuclear-capable missile systems. Iran must release all U.S. citizens, as well as citizens of our partners and allies, each of them detained on spurious charges. Iran must end support to Middle East terrorist groups, including Lebanese Hizballah, Hamas, and the Palestinian Islamic Jihad. Iran must respect the sovereignty of the Iraqi Government and permit the disarming, demobilization, and reintegration of Shia militias. Iran must also end its military support for the Houthi militia and work toward a peaceful political settlement in Yemen. Iran must withdraw all forces under Iranian command throughout the entirety of Syria. Iran, too, must end support for the Taliban and other terrorists in Afghanistan and the region, and cease harboring senior al-Qaida leaders. Iran, too, must end the IRGC [Islamic Revolutionary Guard Corps] Qods Force's support for terrorists and militant partners around the world. And too, Iran must end its threatening behavior against its neighbors\u2014many of whom are U.S. allies. This certainly includes its threats to destroy Israel, and its firing of missiles into Saudi Arabia and the United Arab Emirates. It also includes threats to international shipping and destructive ... cyberattacks.", "On May 21, 2018, State Department Director for Policy Planning Hook stated that \"the plan is to continue working with our allies, as we have been over the last few months, to create a new security architecture.\" During a July 2, 2018, press briefing, Hook explained that following Trump's May 8, 2018, announcement, Secretaries Pompeo and Mnuchin \"decided to create joint teams of senior officials to visit every region of the world. These teams were launched on June 4.\" ", "The United States has reimposed sanctions on Iran in two tranches: the first in May 2018 and the second in November 2018. The Administration waived sanctions in November 2018 for non-U.S. persons participating in a number of Iranian nuclear activities:", "the JCPOA-mandated projects at Arak, Bushehr, and Fordow; transfers from Iran of enriched uranium for the purpose of preventing Iran's low-enriched uranium (LEU) stockpile from exceeding 300 kilograms and exports of natural uranium to Iran in exchange for such transfers; authorized transfers to Iran of LEU fuel for the Tehran Research Reactor; transfers from Iran of \"nuclear fuel scrap,\" which \"cannot be fabricated into fuel plates\" for the reactor; transfers from Iran of spent nuclear reactor fuel; and storage of Iranian heavy water exported before November 5, 2018.", "In May 2019, the United States renewed waivers for these activities except for the transfers of LEU out of Iran, the \"storage for Iran of heavy water\" that Tehran has \"produced in excess of current limits,\" and \"assistance to expand\" the Bushehr plant \"beyond the existing reactor unit.\" On February 14, 2019, Vice President Michael Pence called on the E3 \"to withdraw from the Iran nuclear deal.\"", "Trump Administration officials continue to insist that the current U.S. policy is not \"regime change\" in Tehran. Instead, they describe a policy that threatens the Iranian government with the prospect of sanctions-induced political unrest and economic collapse, should Tehran refuse to make certain concessions. State Department Director for Policy Planning Brian Hook explained in a November 2, 2018, press briefing that the reimposition of sanctions is \"designed to do two things: deny the regime the revenue it needs to fund violent wars abroad, and also to change the cost-benefit analysis in our favor so that Iran decides to come back to the negotiating table.\" Hook told National Public Radio on November 9, 2018 that ", "[w]e're not talking about regime change. The future of this regime is up to the Iranian people. What we have been looking for is a change in their behavior, and we are very hopeful that our campaign of maximum economic pressure on this regime is going to help accelerate the path to reform that not only we want but the Iranian people want. ", "Assistant Secretary of State Christopher Ford explained in a December 18, 2018, speech that the U.S. reimposition of sanctions is \"setting the stage for a diplomatic process that can resolve the crisis created by Iran's extraordinary range of malign acts in the Middle East and beyond.\"", "Trump Administration officials have threatened Iran with possible military action, should Tehran violate its JCOPA nuclear commitments. Pompeo himself stated, during a June 22 television interview, that if Iran were to \"ramp up\" work on its nuclear program, \"the wrath of the entire world will fall upon\" the government, explaining that \"wrath\" referred to \"moral opprobrium and economic power,\" rather than military action. Several months later, Pompeo wrote that", "[e]conomic pressure is one part of the U.S. campaign. Deterrence is another. President Trump believes in clear measures to discourage Iran from restarting its nuclear program or continuing its other malign activities. With Iran and other countries, he has made it clear that he will not tolerate attempts to bully the United States; he will punch back hard if U.S. security is threatened. Chairman Kim has felt this pressure, and he would never have come to the table in Singapore without it. The president's own public communications themselves function as a deterrence mechanism. The all-caps tweet he directed at Iranian President Hassan Rouhani in July, in which he instructed Iran to stop threatening the United States, was informed by a strategic calculation: the Iranian regime understands and fears the United States' military might. In September, militias in Iraq launched life-threatening rocket attacks against the U.S. embassy compound in Baghdad and the U.S. consulate in Basra. Iran did not stop these attacks, which were carried out by proxies it has supported with funding, training, and weapons. The United States will hold the regime in Tehran accountable for any attack that results in injury to our personnel or damage to our facilities. America will respond swiftly and decisively in defense of American lives.", "Appendix E. Possible Military Dimensions of Iran's Nuclear Program", "Then-International Atomic Energy Agency (IAEA) Director-General Mohamed ElBaradei told the agency's Board of Governors on June 2, 2008, that questions regarding \"possible military dimensions\" to Iran's nuclear program constituted the \"one remaining major issue\" concerning the IAEA's investigation of the program. A November 2011 report by current IAEA Director-General Yukiya Amano to the IAEA board contains the most detailed account to date of the IAEA's evidence regarding Iran's suspected nuclear weapons-related activities. Unless otherwise noted, this appendix is based on Amano's November 2011 report.", "The IAEA has \"credible\" information that Iran has carried out activities \"relevant to the development of a nuclear explosive device.\" Although some of these activities have civilian applications, \"others are specific to nuclear weapons,\" the report notes. Most of these activities were conducted before the end of 2003, though some may have continued. The Iranian government managed these activities via a program structure that included \"senior Iranian figures.\" Amano's report contains a detailed description of the program's structure, which was established in the late 1980s. The program's activities were managed by an institution called the Physics Research Center and were overseen by an Iranian Ministry of Defense entity. About a decade later, the center's activities were consolidated under a new entity called the AMAD Plan. After the Iranian regime halted the AMAD Plan's work in 2003, \"staff remained in place to record and document the achievements of their respective projects,\" according to information provided to the IAEA by unnamed governments. Later, \"equipment and work places were either cleaned or disposed of so that there would be little to identify the sensitive nature of the work which had been undertaken.\" ", "The IAEA has \"other information\" from governments that \"indicates that some activities previously carried out under the AMAD Plan were resumed later.\" Some of these activities \"would be highly relevant to a nuclear weapon programme.\" A December 2015 report from Amano assesses that although s ome Iranian nuclear weapons-related activities \" took place after 2003,\" these activities \"were n ot part of a coordinated effort. \" The IAEA \"has no credible indications of activities in Iran relevant to the development of a nuclear explosive device after 2009,\" the report explains. ", "The IAEA has information that the AMAD Plan either obtained or attempted to obtain dual-use \"equipment, materials and services which ... would be useful in the development of a nuclear explosive device.\" In addition, the program may have conducted studies on uranium conversion, missile reentry vehicles for delivering nuclear warheads, and conventional explosives used in nuclear weapons. ", "Nuclear Explosive Device Components", "The IAEA has information indicating that Iran may have conducted work on components for nuclear weapons. Iran possesses a document \"describing the procedures\" for reducing uranium hexafluoride to uranium metal, as well as \"machining ... enriched uranium metal into hemispheres,\" which are \"components of nuclear weapons.\" Tehran has previously told the IAEA that it was offered equipment for casting uranium but never actually received it. Moreover, a member of a clandestine nuclear supply network run by former Pakistani official Abdul Qadeer Khan told the IAEA that Iran \"had been provided with nuclear explosive design information.\" However, this information may not be sufficient to produce a nuclear weapon. (See \" Nuclear Weapon Development Capabilities .\") The IAEA has received information from an unnamed government that Iran carried out \"preparatory work, not involving nuclear material, for the fabrication of natural and high enriched uranium metal components for a nuclear explosive device.\" ", "As noted, the AMAD Plan may have conducted studies on conventional explosives used in nuclear weapons. Implosion-type nuclear explosive devices use conventional explosives to compress a core of highly enriched uranium or plutonium to start a nuclear chain reaction. Specifically, Iran developed detonators that have limited nonnuclear applications but also could be used in a nuclear explosive device. In addition, Tehran may have experimented with a multipoint initiation system, which could be used in conjunction with the detonators. Furthermore, Iran may have conducted high explosive testing, possibly in association with nuclear materials, at the Parchin military site (see below). Lastly, Iran may have worked on neutron initiators, which are used in implosion-type nuclear weapons.", "Reentry Vehicle", "As noted, the IAEA has assessed that the AMAD Plan may have conducted studies on missile reentry vehicles for delivering nuclear warheads. These efforts possibly included \"engineering studies to examine\" integrating a payload into the reentry vehicle of Iran's Shahab-3 ballistic missile. Although these activities \"may be relevant to the development of a non-nuclear payload, they are highly relevant to a nuclear weapon programme.\" Tehran also may have conducted work on a \"prototype firing system\" that would enable a missile's nuclear payload \"to explode both in the air above a target, or upon impact of the re-entry vehicle with the ground.\" ", "Parchin ", "Parchin is an Iranian military site. The Institute for Science and International Security described the complex in a 2004 report as \"a huge site dedicated to the research, development, and production of ammunition, rockets, and high explosives,\" adding that the site \"is owned by Iran's military industry and has hundreds of buildings and test sites.\" IAEA inspectors investigated the Parchin site in 2005 after receiving \"information ... from a Member State in the early 2000s alleging that Iran was conducting high explosive testing, possibly in association with nuclear materials.\" Such testing could contribute to the development of implosion-type nuclear explosive devices. IAEA inspectors visited the site twice in 2005, but they \"did not uncover anything of relevance.\" ", "Parchin was not under IAEA safeguards. However, the IAEA requested that Tehran respond to information obtained from unnamed governments indicating that \"Iran constructed a large explosives containment vessel\" in 2000 at Parchin \"in which to conduct hydrodynamic experiments.\" Such experiments are conducted to validate the design of an implosion-type nuclear weapon and are \"strong indicators of possible weapon development.\" The IAEA has not publicly reported whether Iran actually conducted these experiments. The inspectors in 2005 did not visit the building that the IAEA identified as housing the containment vessel. The agency requested access to this building in February 2012, but Iran did not provide such access until September 2015. At that time, IAEA officials \"did not observe a chamber or any associated equipment inside the building.\" Iranian officials told their IAEA counterparts in October 2015 that the building in question \"had always been used for the storage of chemical material for the production of explosives,\" but the \"information available\" to the IAEA, \"does not support Iran's statements on the purpose of the building.\" ", "Other Issues", "The IAEA asked Tehran about other indications, some of which do not appear in Amano's November 2011 report, suggesting that the country may have pursued nuclear weapons. These include", "\"information about a high level meeting in 1984 on reviving Iran's pre-revolution nuclear programme\"; \"the scope of a visit by officials\" associated with Iran's Atomic Energy Organization \"to a nuclear installation in Pakistan in 1987\"; information on meetings in 1993 between Iranian officials and members of a clandestine procurement network run by former Pakistani official Khan; information about work done in 2000 that apparently related to reprocessing; Iranian scientists' mathematical research with nuclear weapons applications; and information indicating that Iran \"may have planned and undertaken preparatory experimentation which would be useful were Iran to carry out a test of a nuclear explosive device.\"", "Appendix F. Iranian Centrifuge Workshops and Related Entities", "This appendix lists Iranian entities that appear to have manufactured centrifuges or related components, as well as those that appear to have conducted work closely related to these activities. The appendix excludes entities that have been identified as solely involved in procuring materials or components for Iran's centrifuge program. This list is not exhaustive, and some of the publicly available information about Iran's centrifuge workshops may be outdated. International Atomic Energy Agency (IAEA) inspectors had access to Iranian centrifuge workshops until early 2006, in order to verify the October 2003 agreement under which Iran suspended its enrichment program. However, the agency's knowledge of Iran's workshops deteriorated after Tehran ended this access in early 2006. Iran may have subsequently moved centrifuge-related work to other locations and likely built more such workshops. Tehran has provided the IAEA with access to some centrifuge workshops pursuant to the Joint Plan of Action and the Joint Comprehensive Plan of Action. The latter agreement requires Iran to declare specific types of equipment for producing certain centrifuge components, as well as the locations where such production takes place. ", "Kalaye Electric ", "U.N. Security Council Resolution 1737 describes Kalaye Electric, which is located in Tehran, as a \"provider\" to Iran's pilot centrifuge facility located at Natanz. According to an August 2008 Institute for Science and International Security (ISIS) report, Kalaye Electric, an Atomic Energy Organization of Iran (AEOI) entity, operates the country's centrifuge program, but the AEOI controls the program. A December 2011 European Union Council regulation describes several entities as current suppliers to Kalaye Electric, suggesting that the company was still involved in Iran's centrifuge program at that time.", "7 th of Tir", "Resolution 1737 describes 7 th of Tir, located in Esfahan, as \"directly involved\" in Iran's nuclear program. This facility was involved in manufacturing centrifuge components, according to the ISIS report, which added that Iran moved \"the key centrifuge manufacturing equipment and components to Natanz and other AEOI sites\" when the IAEA began monitoring the 2003 suspension agreement. Whether and to what extent the facility is still involved in manufacturing centrifuge components is unknown, the report says.", "Farayand Technique", "Resolution 1737 describes this entity, which is located in Esfahan, as \"involved in\" Iran's centrifuge program. The facility was involved in \"making and assembling\" centrifuge components, according to the 2008 ISIS report. According to a 2010 European Council regulation, another entity, called the Iran Centrifuge Technology Company, \"has taken over the activities of Farayand Technique,\" which include \"manufactur[ing] uranium enrichment centrifuge parts.\"", "Iran Centrifuge Technology Company", "As noted, this entity, which is apparently located in Esfahan, took over \"the activities of Farayand Technique,\" which have included \"manufactur[ing] uranium enrichment centrifuge parts,\" according to the 2010 European Council regulation.", "Pars Trash", "Resolution 1737 describes this Tehran-based entity as \"involved in\" Iran's centrifuge program. According to the ISIS report, the company manufactured centrifuge components. The report does not say whether Pars Trash is still involved in Iran's centrifuge program.", "Kaveh Cutting Tools Company", "This entity, according to the 2008 ISIS report, manufactured centrifuge components. The company is \"part of\" Khorasan Metallurgy Industries, the ISIS report says. Both of these entities are located in Mashad. Khorasan Metallurgy Industries is \"involved in the production of centrifuge components,\" according to the 2010 European Council regulation.", "Khorasan Metallurgy Industries ", "This entity, which is located in Mashad, has been \"involved in the production of centrifuge components,\" according to the 2010 European Council regulation.", "Sanam Electronic Industry Group ", "Located in Tehran, this entity was, according to ISIS, \"involved in making centrifuge components.\" ", "Abzar Boresh Kaveh Company ", "U.N. Security Council Resolution 1803 describes this company as \"[i]nvolved in the production of centrifuge components.\" ", "Parto Sanat Company", "The 2010 European Council regulation describes this company, located in Tehran, as a \"[m]anufacturer of frequency changers ... capable of developing/modifying imported foreign frequency changers in a way that makes them usable in gas centrifuge enrichment.\"", "Eyvaz Technic", "The 2011 European Council regulation states that, as recently as 2011, this Tehran-based company supplied Iran's Natanz and Fordow centrifuge facilities with equipment relevant to centrifuge operations.", "Ghani Sazi Uranium Company ", "According to the 2011 European Council regulation, this company, which is located in Tehran, had \"production contracts\" with Kalaye Electric and Iran Centrifuge Technology Company.", "Iran Pooya ", "The 2011 European Council regulation describes this Tehran-based entity as \"a major manufacturer of aluminium cylinders for centrifuges whose customers\" included the AEOI and Iran Centrifuge Technology Company. ", "Mohandesi Toseh Sokht Atomi Company", "The 2011 European Council regulation describes this company, located in Tehran, as \"contracted to\" Kalaye Electric \"to provide design and engineering services across the nuclear fuel cycle.\" ", "Saman Nasb Zayendeh Rood", "The 2011 European Council regulation describes this company, located in Esfahan, as a \"[c]onstruction contractor that has installed piping and associated support equipment at the uranium enrichment site at Natanz.\" The company \"has dealt specifically with centrifuge piping,\" according to the regulation.", "Jelvesazan Company ", "This company, located in Esfahan, was a possible supplier of vacuum pumps to the Iran Centrifuge Technology Company, according to a December 2012 European Council regulation.", "Iran Aluminium Company ", "According to the December 2012 European Council regulation, this company, located in Arak, was a supplier to the Iran Centrifuge Technology Company as of mid-2012.", "Simatec Development Company", "The December 2012 European Council regulation identified this company, apparently located in Tehran, as a supplier of inverters for centrifuges to the Kalaye Electric Company.", "Sharif University of Technology ", "This university, located in Tehran, has provided laboratories for use by the entity Kalaye Electric Company and the Iran Centrifuge Technology Company, according to the December 2012 European Council regulation.", "Zirconium Production Plant", "A 2012 report from the AEOI identified this plant, located in Esfahan, as a \"provider of pipes and aluminum sheets used in different parts of centrifuge machines.\"", "Aluminat", "This Tehran-based company had a contract in 2012 to supply aluminum to the Iran Centrifuge Technology Company, according to the December 2012 European Council regulation.", "Pishro Systems Research Company", "This company, according to a 2013 State Department announcement, was \"responsible for research and development efforts across the breadth of Iran's nuclear program,\" including Iran's enrichment program. The company \"likely has or will have a facility\" in Tehran, the State Department said.", "Fulmen Group", "This company \"was involved in procuring goods\" and installing \"electrical equipment\" for Iran's Fordow enrichment facility prior to 2009, according to the State Department and the European Union. The company also worked with Kalaye Electric \"on the construction of elements of the Natanz Uranium Enrichment Plant.\"", "Appendix G. Post-2003 Suppliers to Iran's Uranium Enrichment Program", "Iran has obtained components, expertise, and material for its nuclear program from a variety of foreign sources. Tehran sought assistance for the program from the Russian and Chinese governments, but it also obtained relevant components, expertise, and material via deceptive procurement techniques. Perhaps Iran's best-known source was a clandestine procurement network run by former Pakistani official Abdul Qadeer Khan. This network began supplying Iran's centrifuge program in 1987, but U.S. and Pakistani officials have characterized the network as defunct since Pakistan publicly revealed the network in early 2004. ", "It is worth noting that, according to former Deputy Director General of the International Atomic Energy Agency (IAEA) Olli Heinonen, the IAEA has not determined the source of material that Iran obtained for its advanced centrifuges. (CRS has not found additional information on this subject.) ", "Methodology", "Because the original Khan network appears to be defunct, this appendix focuses on post-2003 suppliers to Iran's enrichment program. To obtain the information for this appendix, CRS reviewed official U.S. government reports, as well as lists of entities sanctioned by the United States and the European Union since early 2004. CRS also reviewed public information from the Department of Justice, reports from a U.N. Panel of Experts, and selected nongovernmental reports. To identify suppliers germane to this appendix, CRS excluded Iranian entities or nationals, Iranian ships under foreign flags, and entities associated with the Khan network. ", "This methodology has limitations. Official reports generally do not provide enough information to identify specific suppliers to Iran's enrichment program and Federal Register announcements of the imposition of sanctions generally do not explain the specific transactions that warranted the sanctions. Even if official reports do identify suppliers to Iran's nuclear program, they often do not say whether those entities were supplying Iran's enrichment program. For example, an October 2008 Justice Department fact sheet stated that the sales director of a California-based corporation attempted to illegally export to Iran \"machinery and software to measure the tensile strength of steel,\" explaining that these items \"can make a contribution to nuclear activities of concern.\" The fact sheet, however, did not provide additional information, and neither 2007 testimony from a Department of Commerce official nor a 2008 Commerce Department announcement explained whether the exports were intended for Iran's enrichment program. Similarly, a 2008 report from the Czech Republic's Security Information Service stated that an Iranian company \"subject to sanctions because of its involvement in the Iranian nuclear program\" attempted to acquire \"specific machinery\" from a Czech supplier, but the report did not specify further. ", "Suppliers to Iran's Enrichment Program ", "The information reviewed for this appendix indicates that Iranian-owned entities were using deceptive means in attempts to acquire enrichment technology from foreign entities. However, the sources described above contain no evidence that foreign governments are currently supplying Iran's enrichment program. According to a 2009 State Department report, \"all major suppliers, apart from Russia which is providing assistance to Iran's Bushehr Nuclear Power Plant, have agreed not to provide nuclear technology to Iran.\" In addition, State Department reports covering countries' compliance with international nonproliferation agreements between 2004 and 2010 indicate that the Chinese government is not involved in supplying Iran's suspected nuclear weapons program. ", "Chinese Entities", "Robert J. Einhorn, then-State Department Special Advisor for Nonproliferation and Arms Control, stated in March 2011 that the United States continued \"to have concerns about the transfer of proliferation-sensitive equipment and materials to Iran by Chinese companies.\" Similarly, the State Department compliance reports mentioned above indicate that unspecified non-Chinese entities have attempted to acquire \"nuclear-related\" materials and equipment from Chinese entities. Furthermore, a CIA report covering 2007 stated that \"private Chinese businesses continue to sell materials, manufacturing equipment, and components suitable for use in ballistic missile, chemical weapon and nuclear weapon programs to North Korea, Iran and Pakistan.\" The report did not specify further. It is worth noting that Chinese entities may have supplied Iran with enrichment-related equipment obtained from Western suppliers. According to court documents made public in July 2012, an Iranian national attempted to obtain U.S.-origin components for Iran's enrichment program using entities in China and the Philippines. More recently, a Chinese citizen pleaded guilty in December 2015 to exporting U.S.-origin components used for uranium enrichment to Iranian entities via China.", "Other Suppliers ", "Iran has reportedly established front companies in Turkey in order to obtain nuclear-related items. Notably, Turkish entities were involved with the Khan network. Iranian entities have also attempted to obtain nuclear-related items from companies in the Czech Republic, according to reports from that government's Security Information Service. ", "Iran has also attempted to obtain enrichment-related equipment from U.S. suppliers. For example, according to a January 2012 Justice Department fact sheet, a man was sentenced in 2010 for attempting in March 2009 to export pressure transducers, which he had purchased in the United States, to Iran via Canada and the United Arab Emirates. \"Pressure transducers have applications in the production of enriched uranium,\" according to the fact sheet. Also, the Justice Department announced in January 2016 that a Chinese citizen was sentenced in the United States for exporting U.S.-origin pressure transducers to Iran from 2009 to 2012. \u00a0In addition, a California-based firm exported \"vacuum pumps and pump-related equipment to Iran through a free trade zone located in the United Arab Emirates [UAE]\" between December 2007 and November 2008. This equipment has \"a number of applications, including in the enrichment of uranium,\" according to the Justice Department fact sheet. In July 2013, an Iranian national pleaded guilty to arranging the illegal export of carbon fiber in 2008 to an Iranian entity. The individuals obtained the material from a U.S. supplier and shipped it to Iran via Europe and the UAE. Carbon fiber \"has nuclear applications in uranium enrichment as well applications in missiles,\" according to an October 2014 Justice Department fact sheet. ", "Declassified documents from the Canada Services Border Agency state that Iranian entities were also attempting to acquire items from Canada for Iran's nuclear program, though the documents do not specifically mention Tehran's enrichment program. The documents also state that \"Iranian procurement agents have ... been able to export items [from Canada],\" international sanctions notwithstanding. The documents, however, do not specify whether exported items were destined for Iran's nuclear program. Moreover, as noted, court documents made public in July 2012 state that an Iranian national attempted to obtain U.S.-origin components via Canada for Iran's enrichment program.", "Entities in the UAE were part of the Khan network and have been cited as shippers for enrichment-related technology to Iran. Einhorn described the UAE in March 2011 as a \"trans-shipment hub for Iran,\" but added that the UAE \"has also taken strong steps in recent months to curtail illicit Iranian activities.\" A 2011 European Council regulation identified two UAE entities, Modern Technologies FZC and Qualitest FZE, as \"[i]nvolved in procurement of components for [the] Iranian nuclear programme,\" although the regulation did not specify whether the components were for uranium enrichment."], "subsections": []}]}]}}
{"id": "R40760", "title": "House Office of Congressional Ethics: History, Authority, and Procedures", "released_date": "2019-03-28T00:00:00", "summary": ["The House Office of Congressional Ethics (OCE) was established on March 11, 2008, with the passage of H.Res. 895. It was most recently reauthorized by the House as part of the rules package (H.Res. 6) adopted by the 116th Congress on January 3, 2019.", "The office's establishment followed years of efforts by groups within and outside Congress to create an independent entity to investigate allegations of misconduct by Members, officers, and employees of Congress. During the 110th Congress (2007-2008), Speaker of the House Nancy Pelosi and Minority Leader John Boehner created the bipartisan Special Task Force on Ethics Enforcement, chaired by Representative Michael Capuano, to consider whether the House should create an \"outside\" ethics-enforcement entity. The task force worked for nearly a year before issuing its recommendations for the creation of the OCE.", "The mandate of the OCE, which has jurisdiction only in the House, is to review information, and when appropriate, refer findings of fact to the House Committee on Ethics. Only this committee, pursuant to House rules, has the authority to recommend House discipline of Members and staff. Information of alleged wrongdoing by Members, officers, and employees of the House may be accepted by the OCE from the general public, but only the OCE board can initiate a review.", "The OCE is composed of six board members, and at least two alternates, each of whom serves a four-year term. The Speaker and the minority leader are each responsible for the appointment of three board members and one alternate. The chair is selected by the Speaker and a co-chair is selected by the minority leader. Current Members of the House, federal employees, and lobbyists are not eligible to serve on the board.", "OCE rules for the conduct of investigations and code of conduct can be found at their website, https://oce.house.gov.", "This report describes the history and rationale behind the creation of the OCE, its operations, its relationship with the House Committee on Ethics, and options potentially available for Congress if further amendments to the House ethics process are desired.", "For additional information, please refer to CRS Report RL30764, Enforcement of Congressional Rules of Conduct: A Historical Overview, by Jacob R. Straus; CRS Report RL30650, Senate Select Committee on Ethics: A Brief History of Its Evolution and Jurisdiction, by Jacob R. Straus; and CRS Report 98-15, House Committee on Ethics: A Brief History of Its Evolution and Jurisdiction, by Jacob R. Straus."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["In the Federalist Papers , James Madison commented that \"no man is allowed to be a judge in his own case, because his interest would certainly bias his judgment, and, not improbably, corrupt his integrity. With equal, nay with greater reason, a body of men are unfit to be both judge and parties at the same time.\" Since the first session of Congress in 1789, the House of Representatives and the Senate have contemplated how to judge fellow Members. Investigating and judging Members of Congress continues to be an issue for Congress. ", "In 1964, the Senate established the Select Committee on Ethics, and in 1967, the House created the Committee on Standards of Official Conduct, which was renamed the Committee on Ethics in the 112 th Congress (2011-2012). These two committees formally assumed the duties of investigating allegations of wrongdoing against Members of their respective chambers. In the House, the Committee on Ethics has had sole responsibility to investigate and recommend the discipline of Members. Self-discipline by the Committee on Ethics has, at various times, been considered problematic, as Members are dependent on one another to do their jobs, bring individual perspectives on chamber rules to investigations, and are judged by the public at the same time they are judging congressional colleagues. This creates a difficult investigative environment and often leads to closed-door investigations and media allegations of improper enforcement of chamber rules.", "Historically, Congress has used its ethics power neither arbitrarily nor frequently. Congress has, however, \"periodically tightened its ethics codes and procedures for dealing with misconduct.\" In addition to amending internal congressional ethics codes and procedures, Congress has considered numerous legislative proposals since 1951 to create an independent ethics advisory body that would replace or assist the Committee on Ethics with investigations or enforcement.", "In the 110 th Congress (2007-2008), the House created the Office of Congressional Ethics (OCE) to review complaints, and when appropriate, refer findings of fact to the Committee on Ethics. The OCE is the first independent, outside body charged by Congress to investigate complaints against Members and refer valid complaints to the Committee on Ethics.", "The OCE is intended to perform an important public service for the House and the public by assuring the integrity of the chamber. It provides a way for groups and individuals to provide information about alleged misconduct by Members, officers, and employees of the House to an investigative body. The office is designed to \"supplement but not supplant\" the role of the House Committee on Ethics.", "The OCE formally opened on January 23, 2009, after adopting rules for conducting investigations and a code of conduct for its board members and staff. It has jurisdiction only over current Members, officers, and employees of the House. This report focuses only on the House of Representatives and the House ethics process."], "subsections": []}, {"section_title": "Previous Legislative Attempts for Outside or Independent Enforcement of Congressional Rules of Conduct", "paragraphs": ["Since the establishment of the Senate Select Committee on Ethics and the House Committee on Ethics, members of both committees have sometimes been perceived as reluctant to investigate and discipline colleagues. Seeking to be fair and not to pre-judge or prejudice the consideration of an allegation, the committees operate with little publicity. As a result they have often been criticized by the media for \"failure to properly implement and enforce the internal rules of their respective house of Congress.\" Until 2008, these perceptions led to unsuccessful calls for investigative and enforcement mechanisms to supplement or replace the ethics committees.", "Over the years, proposals have been offered to create an office of public integrity, an independent ethics commission, and a public review board or office within the legislative branch, composed of former Members of Congress, retired judges, private citizens, or a combination of these. For some, having a panel of senior statesmen help investigate allegations of wrongdoing by Members of Congress is viewed as a way to strengthen Congress. Dennis Thompson, a Harvard professor of public policy and congressional scholar, has long advocated countering the institutional conflict of interest inherent in Members judging Members with an independent body such as an ethics commission. Thompson sees such an outside body as ", "likely to reach more objective and independent judgments. It could more credibly protect members' rights and enforce institutional obligations without regard to political or personal loyalties. It would provide more effective accountability and help restore the confidence of the public. And\u2014an advantage that should appeal to Congress\u2014it would reduce the time members would have to spend on the chores of ethics regulation. ", "Beginning in 1951, even before the ethics committees were created, there were legislative proposals to create an independent entity to investigate complaints in both the House and the Senate or within one house. None of these were enacted. Only the legislative proposals that prompted hearings are discussed below. Proposals receiving no committee action are listed in Table 1 and Table 2 ."], "subsections": [{"section_title": "Congress-Wide Proposals", "paragraphs": ["Between 1951 and 1996, several proposals were introduced in both the House and Senate to create a bicameral independent ethics panel. In 1951, Senate hearings were held on a proposal to create a Commission on Ethics in Government. In 1993, 42 years later, the Joint Committee on the Organization of Congress held hearings on the congressional ethics process. Table 1 also lists legislation introduced to create a Congress-wide independent ethics entity."], "subsections": [{"section_title": "Commission on Ethics in Government", "paragraphs": ["In the 82 nd Congress (1951-1952), Senator J. William Fulbright introduced S.Con.Res. 21, to create a congressional commission to \"strengthen the faith and confidence of the American people in their Government by assisting in the establishment of higher moral standards in the official conduct of the executive and legislative branches of the Government.\" The resolution was referred to the Senate Committee on Labor and Human Resources, where a special subcommittee was established to examine the resolution. Chaired by Senator Paul Douglas, the Special Subcommittee on the Establishment of a Commission on Ethics in Government held a series of hearings in June and July of 1951. In his introductory remarks, Senator Douglas summarized the importance of ethical standards and why the hearings would focus on more than just Senator Fulbright's concurrent resolution.", "I think the time has come for positive proposals to deal with the ethical problems of government. This should include not merely the executive agencies, but the Congress itself\u2014because if we investigate others, we should be willing to submit ourselves to investigation\u2014and all private citizens. We all have a great stake in lifting the standards of our governmental performance.", "Following the hearings, the subcommittee endorsed the passage of S.Con.Res. 21 and the creation of a commission on ethics in government. The subcommittee recommended that", "A Commission on Ethics in Government should be established by joint resolution of Congress. The Commission's function should be twofold, the first to investigate and report to the President and to the Congress on the moral standards of official conduct of officers and employees of the United States; the effect thereon of the moral standards in business and political activity of persons and groups doing business with the Government or seeking to influence public policy and administration; and the moral standards generally prevailing in society which condition the conduct of public affairs or which affect the strength and unity of the Nation.", "... The second function of the Commission should be to recommend measures to improve and maintain at a high level moral standards of official conduct in the Federal Government and of all persons who participate in or are responsible for the conduct of public affairs. It should be noted that the Commission would not be concerned with the morals of individuals\u2014governmental personnel or private citizens\u2014except as they are involved in the conduct of public affairs.", "In addition to recommending the creation of a commission, the subcommittee also recommended amendments to the Administrative Procedure Act; mandatory disclosure of income, assets, and certain transactions by Members of Congress and certain federal officials; a thorough study of proposed changes to criminal law governing conflict of interest and bribery laws; creation of a citizens' organization to work for better government on the national level; and 12 measures related to ethics issues that merited additional study and consideration. S.Con.Res. 21 was not debated further in either the full committee or on the Senate floor."], "subsections": []}, {"section_title": "Joint Committee on the Organization of Congress", "paragraphs": ["In 1993, the Joint Committee on the Organization of Congress held hearings on the congressional ethics process that included former and incumbent Members of Congress, as well as academic scholars. Their testimonies dealt with the advantages and disadvantages of independent ethics entities and how an outside body might assist the ethics committees in the enforcement of congressional rules of conduct. The joint committee's final report summarized the differing opinions of witnesses on the role of an independent entity and its ramifications on Congress:", "While no witnesses advocated giving the entire responsibility to a group of outsiders, some wanted non-members to be able to investigate charges and recommend punishment. Representative Robert Andrews, when testifying in favor of an external ethics commission, said, \"Our system purports to conduct review of ethics by our peers, but I think we misdefine what it means to be a peer. Ultimately, our peers are not fellow Representatives or Senators, ultimately our peers are ordinary citizens.\" Conversely, other witnesses wanted ethics proceedings to be conducted only by members. As former Senator Warren Rudman testified, \"I believe that the Constitution, when it says that we ought to be the judge of our own members, means precisely what it says.\" A former Chairman of the Standards of Official Conduct Committee, Representative Louis Stokes was \"troubled by calls for further procedural reforms, which are based on the notion that the Ethics Committee has not done its job or has not done it properly.\"", "Subsequently, the House members of the committee recommended that \"the Committee on Standards of Official Conduct should be authorized to use, on a discretionary basis, a panel of non-members in ethics cases.\" No further action was taken on any of the ethics proposals discussed by the joint committee."], "subsections": []}]}, {"section_title": "House Proposals", "paragraphs": ["Prior to the passage of H.Res. 895 in the 110 th Congress (2007-2008), the House considered numerous proposals to create an independent ethics commission. These proposals ranged in scope and included proposals to abolish the Committee on Standards of Official Conduct, authorize an independent entity for all ethics issues, and create an independent entity to work with the committee. Prior to H.Res. 895 , none of the proposals received further consideration after being referred to committee. Table 2 lists proposals that were offered between 1988 and 2007 to create an independent ethics entity in the House.", "While none of the legislative proposals listed in Table 2 moved beyond introduction, in 2007, the Speaker of the House and the minority leader restarted the conversation about an independent ethics entity by creating a Special Task Force on Ethics Enforcement. The result of the task force's work was the introduction of H.Res. 895 (110 th Congress) and the creation of the Office of Congressional Ethics to collect information from the public; investigate Members, officers, and staff of the House of Representatives; and provide that information to the House Committee on Ethics."], "subsections": []}]}, {"section_title": "Special Task Force on Ethics Enforcement", "paragraphs": ["On January 31, 2007, House Speaker Nancy Pelosi and Minority Leader John Boehner announced the creation of the Special Task Force on Ethics Enforcement in the House of Representatives. Chaired by Representative Michael Capuano, the task force was charged with considering \"whether the House should create an outside enforcement entity, based on examples in state legislatures and private entities.\"", "During the next eight months, the task force met 29 times in executive session to discuss the investigative process and to hear from current and former Members of Congress, academic experts, and citizen advocacy groups. The executive sessions both preceded and followed a public hearing in April 2007.", "Establishment of the task force was part of Speaker Nancy Pelosi's emphasis on ethics reform in the 110 th Congress and followed several congressional scandals in the previous Congresses. In January 2006, congressional Democrats from around the country joined in a Washington, DC, press conference to pledge \"honest leadership and open government.\" At the same time, Public Citizen, a watchdog group, issued a list of six benchmarks for reform which included the establishment of an independent congressional Office of Public Integrity to monitor allegations of ethics violations and refer them to the congressional ethics committees. Public opinion also appeared to favor reform; a January 2006 CNN/USAToday/Gallup poll found that \"corruption in government\" was ranked as an \"extremely important\" or \"very important\" issue by 81% of respondents."], "subsections": [{"section_title": "Hearing", "paragraphs": ["On April 19, 2007, the Special Task Force on Ethics Enforcement held a public hearing to discuss \"whether the House should create an independent entity relative to the ethics process, and if so, what form, makeup, authority, et cetera, that entity should be.\" In his opening remarks, Ranking Member Lamar Smith summarized both the positive and negative aspects of creating an independent ethics entity in the House.", "Today we examine proposals to create an independent ethics commission. I know there are some independent legislative ethics commissions operating ... that would have been considered a success. But I also know there are unique items at work in Washington, DC, and issues of Federal law that do not apply elsewhere. I know some see the need for a commission that operates independently of the duly elected membership of the House of Representatives. Yet I also know there are those who are concerned that the ethics enforcement entity not be so independent from duly elected members that it upsets the checks and balances. That system must exist within our Constitution which requires separation of powers among the executive, judicial and legislative branches.", "The task force heard from four witnesses, three in favor of an independent ethics entity and one who was opposed. Testifying in favor of an independent entity were Tom Fitton, president of Judicial Watch; Meredith McGehee, policy director of the Campaign Legal Center; and Fred Wertheimer, president of Democracy 21. They each spoke of their belief that creating an independent, impartial, and investigative entity would end the conflict of interest that exists when Members are asked to judge their colleagues. For example, Tom Fitton testified that the \"House ethics process is broken and in need of reform,\" and that \"[a]s this Task Force considers ways for the House to honor its constitutional obligation to uphold its own rules of conduct, I respectfully suggest you strongly consider an independent entity, answerable to House members, which can undertake investigations and make independent findings and recommendations for action to the appropriate House body.\"", "Testifying against an independent ethics entity was Don Wolfensberger, director of the Congress Project at the Woodrow Wilson International Center for Scholars. Mr. Wolfensberger stated,", "The bottom line is that the power of Congress to punish its members is rooted in the need to protect the institution from actions and behavior that would bring the body into disrepute or disarray. It is not a power that can be properly exercised, even in part, by non-members for the very reason that only members have the institutional sense, instincts, and legitimacy to exercise it correctly and effectively for the good of the House. Others would tend to confine themselves to the question of justice for the individual member accused.", "Mr. Wolfensberger further suggested that the House ethics process could be strengthened if", "the chair and ranking Member kept the full committee membership apprised of the status of all complaints filed with the committee; the full committee determined when an investigative subcommittee should be created; an investigative subcommittee was not allowed to enter into an agreement with a respondent, but instead recommended a proposed settlement that the full committee could finalize, modify, or reject; when an investigative subcommittee report did not adopt a statement of alleged violation, it should be sent to the House (and public) and not to the full committee; and the committee's authority to issue a letter of reproval or other appropriate action be available, as a matter of privilege, for possible House action.", "Following the hearing, Representative Capuano received a letter signed by 27 House Democrats asking the task force to \"address the structural flaws that underlie the current enforcement process.\"", "Our current ethics process is also out of step with how these matters are handled in almost half the state legislatures. The experience in the states has proven that effective safeguards can be put in place to deter potential abuse of the ethics process without undermining its integrity and free of any constitutional concerns. Under such a revamped ethics process, final determination of any alleged ethical misconduct would remain the responsibility of the members, as is constitutionally required. We believe that building greater independence into the ethics enforcement process, especially in the investigatory phase, is an appropriate response to the problems of the past and will be a safeguard against any recurrences."], "subsections": []}, {"section_title": "Final Report", "paragraphs": ["In December 2007, the Special Task Force on Ethics Enforcement issued its final report. Only the Democratic members of the task force, however, penned their names to the report. The Republican members chose to withhold comment. The report recommended the creation of an Office of Congressional Ethics as an independent office within the House to \"review information on allegations of misconduct by members, officers, and employees of the House and make recommendations to the Committee on Standards of Official Conduct for the Committee's official consideration and action.\" ", "The task force proposed a six-member entity to investigate possible violations of House rules. The report stated that \"[t]he new Office of Congressional Ethics will act as an origination point for independent review of possible violations of standards of conduct, but will not prevent the Standards Committee from accepting complaints filed by members.\" In a press release accompanying the report, Representative Capuano reported that the task force was recommending that", "a nonpartisan professional staff be hired by the panel, and current House Members and lobbyists not be permitted to serve on the panel; the OCE conduct preliminary reviews, then refer all matters subject to a second-phase review to the Committee on Standards for disposition; if no merit is found, the board may recommend dismissal; the OCE be given up to 30 calendar days or 5 legislative days, whichever was greater, to conduct a preliminary review, and 45 calendar days or 5 legislative days to review a matter in the second phase before referral to the Committee on Standards; the Committee on Standards be given up to 45 calendar or 5 legislative days, whichever was greater, to consider the matter as allowed pursuant to current Committee on Standards Rules 16b-16e; and the Committee on Standards be required to make a public statement, or finding, on referrals from the OCE by the end of the 45-calendar-day or 5-legislative-day period."], "subsections": []}, {"section_title": "H.Res. 895", "paragraphs": ["In coordination with the release of the task force members' report recommending the creation of an independent ethics entity, Representative Capuano introduced H.Res. 895 on December 19, 2007. In preparation for a Committee on Rules hearing on H.Res. 895 , Representative Capuano sent a Dear Colleague letter in March 2008 and wrote an opinion article in Roll Call advocating adoption of the task force's recommendations for an independent ethics entity. On March 10, the Committee on Rules reported H.Res. 1031 , which provided for adoption of H.Res. 895 , as amended, with a recommendation that the resolution be adopted. ", "The Committee on Rules report included amendments to H.Res. 895 that were to be considered as adopted. The amendments made 13 changes to the original text of H.Res. 895 . A comparison of the amendments adopted by the Committee on Rules and the original language, as proposed by Representative Capuano, can be found in the Appendix .", "On March 11, 2008, the House debated and agreed to H.Res. 1031 , which provided for the adoption of H.Res. 895 , as amended under a closed, self-executing rule. In his remarks following the passage of H.Res. 895 , Representative Capuano stated,", "Tonight's passage of H.Res. 895 establishing an Office of Congressional Ethics (OCE) represents the most dramatic progress in years in the drive to strengthen ethics enforcement in the House. It is the culmination of many months of deliberation and review by the Special Task Force on Ethics Enforcement, created jointly by Speaker Pelosi and Minority Leader Boehner. I strongly believe that the approach we have taken to ethics enforcement will improve the reputation of the House and will break the appearance of an 'old boy network' forever. The OCE brings a level of independence to the process because no current members of Congress can serve on the panel. It also brings a level of transparency that is sorely lacking in the current process by requiring that a public statement be issued on most matters reviewed by the OCE. Taken together, these two fundamental elements will go a long way toward restoring the public's confidence in the people's House."], "subsections": []}]}, {"section_title": "Office of Congressional Ethics", "paragraphs": ["The OCE held its first public meeting on January 23, 2009, and began to implement the structural requirements of H.Res. 895 . It also adopted rules of procedure, a code of conduct, and rules for the conduct of a review. The Office of Congressional Ethics was most recently reauthorized by the House as part of the rules package (H.Res. 6) adopted by the 116 th Congress on January 3, 2019. The following sections outline the structure, powers, authority, and procedures of the OCE."], "subsections": [{"section_title": "Structure", "paragraphs": ["The OCE is structured to be nonpartisan. This goal is reflected in the composition of the board's membership, leadership schema, statutory qualifications, employment status of its members and staff, and required oath (or affirmation) of office. In addition, the authorizing resolution specifies a particular hiring process and requires an oath (or affirmation) of staff that OCE information not be disclosed."], "subsections": [{"section_title": "Board Membership", "paragraphs": ["Six members and two alternates constitute the board. Each member may serve for two Congresses and may be reappointed. Three members and an alternate are appointed by the Speaker, after consultation with the minority leader. Additionally, three members and an alternate are appointed by the minority leader, after consultation with the Speaker. Vacancies on the board are filled by the most senior alternate nominated by the same congressional leader who nominated the departing member. The alternate serves on the board until a replacement is named. If a permanent replacement is not named within 90 days of the vacancy, the alternate continues to serve for the remainder of the term, and the Speaker or minority leader, as applicable, is to nominate a new alternate. The Speaker and the minority leader, acting jointly, may remove a board member for cause.", "The OCE membership structure is designed to create an incentive for the Speaker and the minority leader to consult when choosing board members. Because no formal confirmation process was established in H.Res. 895 , the nominations of the Speaker and the minority leader result in de facto appointments of chosen individuals to the board. Table 3 lists the members of the board for the 116 th Congress. ", "Pursuant to H.Res. 895 (110 th Congress), Members of the OCE board were restricted to serving on the board for no more than four consecutive Congresses (two consecutive terms). In the 115 th Congress (2017-2018), the House adopted H.Res. 5 , which removed term limits for most board members. This remains in effect for the 116 th Congress."], "subsections": []}, {"section_title": "Oath of Office", "paragraphs": ["Before board members begin their term, they are required to sign a document agreeing not to be a candidate for the U.S. Senate or the House of Representatives and execute an oath or affirmation on disclosure of information. ", "Copies of the signed document are retained by the Clerk of the House as part of the records of the House. The Clerk makes the documents available to the public, publishes the documents as part of the Congressional Record , and makes a cumulative list of names available on the Clerk's website. The document contains the following statement:", "I agree not to be a candidate for the Office of Senator or Representative in, or Delegate or Resident Commissioner to, the Congress for purposes of the Federal Election Campaign Act of 1971 until at least 3 years after I am no longer a member of the board or staff of the Office of Congressional Ethics.", "Additionally, board members must execute an oath or affirmation in writing prior to assuming board responsibilities. Copies of the oath or affirmation are provided to the Clerk as part of the records of the House. The text of the oath is as follows:", "I do solemnly swear (or affirm) that I will not disclose to any person or entity outside of the Office any information received in the course of my service with the Office, except as authorized by the board as necessary to conduct official business or pursuant to its rules."], "subsections": [{"section_title": "Board Leadership", "paragraphs": ["The board is led by a chair and a co-chair. The chair is designated by the Speaker and the co-chair is designated by the minority leader. The chair, or a majority of board members, has the authority to call a board meeting."], "subsections": []}, {"section_title": "Qualifications", "paragraphs": ["Board members are expected to be \"individuals of exceptional public standing who are specifically qualified to serve on the board by virtue of their education, training, or experience in one or more of the following fields: legislative, judicial, regulatory, professional ethics, business, legal, and academic.\" Selection of board members is to be made without regard to political affiliation.", "Individuals are prohibited from serving as board members if they were (1) a registered lobbyist under the Lobbying Disclosure Act of 1995; (2) registered as a lobbyist during the year prior to appointment; (3) engaged in lobbying, or employed to lobby Congress; (4) an agent of a foreign principal registered under the Foreign Agents Registration Act (FARA); (5) a Member of Congress; or (6) an officer or employee of the federal government. Additionally, former Members, officers, and employees of the House cannot be appointed to the board in the year following their time as a Member, officer, or employee of the House. ", "Restrictions on the political and outside activities of board members are designed to create the independent, nonpartisan group necessary to conduct investigations in an expeditious manner. As explained under \" Investigative Procedure ,\" the OCE has a short time frame to conduct investigations."], "subsections": []}, {"section_title": "Employment Status", "paragraphs": ["Members of the OCE board are not considered officers or employees of the House, but do receive remuneration for their service. Board members receive a per diem equal to the daily equivalent of the minimum rate of basic pay for GS-15 employees of the General Schedule for each day of service, including travel time. Pay is only for time when the board member is engaged in performance of duties for the board."], "subsections": []}]}, {"section_title": "Staff", "paragraphs": ["The board, with the affirmative vote of at least four members, has the authority to hire staff and fix their compensation. Staff is prohibited from engaging in \"partisan political activity directly affecting any congressional or presidential election,\" and may not \"accept public speaking engagements or write for publication on any subject that is in any way related to [their] employment or duties with the Office without specific prior approval from the chairman and cochairman.\" The board can terminate an employee with an affirmative vote of at least four members.", "Before staff may begin employment they are required to execute an oath or affirmation on disclosure of information. Copies of the oath or affirmation are provided to the Clerk as part of the records of the House. The text of the oath is as follows:", "I do solemnly swear (or affirm) that I will not disclose to any person or entity outside of the Office any information received in the course of my service with the Office, except as authorized by the board as necessary to conduct official business or pursuant to its rules.", "Staff is required to be impartial and unbiased when conducting an investigation. If a staff member has a conflict of interest arising from \"a personal or professional relationship with a subject, a subject's opponent in any election or a witness involved in an investigation, staff shall disclose that fact to the Staff Director who shall disclose it to the Board.\" If the board determines the investigator cannot be impartial, he or she can be terminated from that investigation."], "subsections": []}]}, {"section_title": "Powers", "paragraphs": ["The OCE is provided with specific powers to conduct investigations, hold hearings, pay witnesses, and adopt rules. Some of these powers are enumerated in the OCE's authorizing resolution, and others are detailed in rules of conduct to be approved by the OCE."], "subsections": [{"section_title": "Investigations", "paragraphs": ["The OCE's primary responsibility is to conduct investigations in an independent, nonpartisan manner, regarding allegations of misconduct against Members, officers, and staff of the House. Following the investigation, the OCE is charged with referring matters, when appropriate, to the Committee on Ethics. Investigations by the OCE are restricted to activities that occurred after March 11, 2008, where a violation of \"law, rule, regulation, or other standard of conduct in effect at the time the conduct occurred and [were] applicable to the subject in the performance of his or her duties or the discharge of his or her responsibilities.\" ", "In the 114 th Congress, two changes related to OCE's investigations were made with the adoption of H.Res. 5 . First, \"any individual who is the subject of a preliminary review or second-phase review by the board shall be informed of the right to be represented by counsel and invoking that right should not be held negatively against them.\" Second, the OCE has been instructed that it \"may not take any action that would deny any person any right or protection provided under the Constitution of the United States.\" In the 115 th and 116 th Congresses, these provisions were continued."], "subsections": []}, {"section_title": "Hearings and Evidence", "paragraphs": ["The OCE is authorized to conduct meetings, hold hearings, meet in executive session, solicit testimony, and receive evidence necessary to conduct investigations. Pursuant to OCE rules, documents, recordings, or physical evidence \"that was obtained in violation of any law, rule, or regulation\" may not be reviewed. To ensure compliance, individuals submitting evidence to the OCE are asked to affirm that the evidence was not obtained in an illegal manner. OCE rules also allow for witnesses and individuals subject to investigation to submit written comments to the OCE. The OCE is also prohibited from considering privileged evidence without a waiver from the House."], "subsections": []}, {"section_title": "Pay Witnesses", "paragraphs": ["The OCE is authorized to pay witnesses in the same manner as prescribed in House Rule XI, clause 5."], "subsections": []}, {"section_title": "OCE Rules", "paragraphs": ["The OCE is authorized to adopt rules necessary to carry out its duties. H.Res. 895 prescribes five rules that the OCE must adopt. These rules cover", "termination of a preliminary review on any ground, including de minimis matters; recommendations calling for the Committee on Ethics to dismiss a matter that was subject to a second-phase review on any ground, including being de minimis in nature; witness signing statements, acknowledging that the False Statements Act applies to testimony and documents provided to the OCE; prohibition of ex parte communications between board members or OCE staff and individuals who are subjects of review or interested parties, and communication between Members, officers, or employees of the House with board members or OCE staff regarding matters under review, except as authorized by the board; and an OCE code of conduct, which includes the avoidance of conflicts of interest, to govern the behavior of board members and staff."], "subsections": []}, {"section_title": "Information Disclosure", "paragraphs": ["The OCE is required to establish procedures to prevent the unauthorized disclosure of information received by the office. Breaches in confidentiality are to be investigated by the board.", "Testimony received or information obtained by the OCE may not be disclosed to any individual or group outside the OCE without the authorization of the board for purposes of conducting official business. Testimony before the Committee on Ethics by board members and staff is exempt from disclosure requirements.", "Prior to transmittal of recommendations or statements to the Committee on Ethics, individuals under investigation have the right to present, orally or in writing, a statement on the investigation to the board."], "subsections": []}]}, {"section_title": "Investigative Procedure", "paragraphs": ["Pursuant to the authority granted by H.Res. 895 , Section 1(c)(2)(F), the board is authorized to create an investigatory process to examine and make recommendations on cases brought to the OCE's attention. The process consists of four steps: submission of information, preliminary review, second-phase review, and referral to the Committee on Ethics for further investigation or dismissal of the complaint. Each step, with its authority pursuant to H.Res. 895 , and relevant OCE rules are detailed below."], "subsections": [{"section_title": "Submission of Information", "paragraphs": ["The OCE was established to conduct independent, nonpartisan reviews of allegations of misconduct by Members, officers, and employees of the House and, when appropriate, to refer matters to the Committee on Ethics under the Rules of the House. Accordingly, it has established procedures for the public to file information alleging wrongdoing and outlines the process for doing so on its website, http://oce.house.gov .", "The following should be included in any submission:", "(1) the name, address, telephone number and e-mail address, if any, of the person submitting the information, and the organization s/he is affiliated with, if any; ", "(2) the full name of the subject of the allegation; ", "(3) the date(s) the alleged conduct occurred; ", "(4) a concise statement of facts (or, the source of the information in the event that the person submitting the information does not have first-hand knowledge of the facts); ", "(5) the law, regulation or rule allegedly violated, if known; ", "(6) if applicable, name(s) and contact information for any potential witness(es); ", "(7) if applicable, copies of any documents related to the allegation; and ", "(8) a signed declaration acknowledging that section 1001 of title 18 United States Code (popularly known as the False Statement Act) applies to the information provided. A copy of the False Statements [Act] is available on the OCE's website and can be provided on request. ", "All information will be reviewed by the OCE; however, submitting information does not trigger an investigation. The decision to begin an investigation (preliminary review) lies solely with the Board.", "OCE staff is to review information submitted by the public as well as information derived from other sources, including the press. OCE staff or any board member may submit information for the board's consideration. For an investigation to proceed, at least two board members must concur."], "subsections": []}, {"section_title": "Preliminary Stage Review", "paragraphs": ["The first stage of an investigation is a preliminary review. The preliminary review requires a \" reasonable basis to believe the allegation based on all the information then known to the board,\" the written concurrence of two board members (one appointed by the Speaker and one by the minority leader), and written notification by the board to the Committee on Ethics and the individual subject to the review.", "Once a preliminary review has begun, it must be completed within 30 calendar or 5 legislative days, whichever is later, from the receipt of the written request by a minimum of two board members. Prior to, or at the conclusion of, the 30 calendar or 5 legislative days, the board votes on whether to continue the review and advance the inquiry to a second-phase. To continue the review, the board must find \" probable cause to believe the alleged violation occurred based on all the information then known to the board.\" An affirmative vote of at least three board members is required to proceed to a second-phase review. If the board does not vote to begin a second-phase investigation by the end of the 30-calendar- or 5-legislative-day time period, the investigation is terminated. The board, however, may vote to terminate an investigation at any time during the preliminary-phase review with the affirmative vote of at least four members.", "Regardless of the OCE's decision on proceeding to a second-phase review, the board must notify, in writing, both the Committee on Ethics and the individual under investigation of the board's decision to continue or terminate the investigation. If the board terminates the inquiry, it has the option of sending a report to the Committee on Ethics with its findings."], "subsections": []}, {"section_title": "Second-Phase Review", "paragraphs": ["Should the board vote to conduct a second-phase review, it must be completed within 45 calendar or 5 legislative days, whichever is later. Should the board determine that additional time is needed to conduct the second-phase review, the time period can be extended for an additional 14 calendar days upon a majority vote of the board. This requires the affirmative vote of at least four board members. ", "House rules also require that \"any individual who is the subject of a preliminary review or second-phase review by the board shall be informed of the right to be represented by counsel and invoking that right should not be held negatively against such individual.\"", "When the OCE completes the second-phase review, the board is required to transmit a written report, its findings, if any, and any supporting documentation to the Committee on Ethics. The referrals must be accompanied by two documents: (1) a report which recommends dismissal, further inquiry, or states that the board vote was a tie, and (2) findings. Neither document is to contain conclusions regarding the validity of the allegation or the guilt or innocence of the person subject to the review\u2014such matters are the sole purview of the Committee on Ethics.", "The OCE is also obligated to transmit the findings of its investigation, if any, to the Committee on Ethics along with supporting documentation. The findings should include", "findings of fact; descriptions of relevant information that was not obtained and witnesses not interviewed; recommendations for the issuance of subpoenas; and citations of relevant law, rule, regulation, or standard of conduct relevant to the investigation.", "The findings should not include the names of cooperative witnesses, any conclusions regarding the validity of the allegations, or statements on the guilt or innocence of the investigative subject. With the findings, the OCE may submit supporting documents, and provide the subject of the investigation a copy of the written report.", "Like the House Committee on Ethics, the OCE does not have jurisdiction over former Members of the House. Thus, once a Member leaves office, any inquiry or investigation against him or her by either entity will cease in whatever phase a review may be."], "subsections": []}, {"section_title": "The Committee on Ethics and Its Relationship to the OCE", "paragraphs": ["At the conclusion of any second-phase review, the OCE is required to submit a report, and may submit findings and supporting documentation, to the Committee on Ethics for final disposition. Pursuant to Article 1, Section 5, clause 2 of the Constitution, \"[e]ach House may determine the rules of its proceedings, punish its members for disorderly Behaviour, and, with the Concurrence of two thirds, expel a member.\" For the House of Representatives, the investigative role is generally delegated to the Committee on Ethics. Pursuant to House Rules, the Committee on Ethics can also open an investigation without an OCE referral.", "Pursuant to House rules, the Committee on Ethics may not receive any referral within 60 days before a federal, state, or local election in which the subject of the case is a candidate.", "Once the Committee on Ethics receives a referral from the OCE, it must act within 45 days. At that time, the chair must publicly release the committee's actions together with the OCE report and findings, unless the chair and ranking Member jointly decide, or the committee votes, to withhold the information for an additional 45 days. The committee is not required to release the OCE findings if it agrees with an OCE decision to dismiss a particular case or chooses to dismiss a case left unresolved by the OCE. The committee does, however, have the option of making the OCE report and findings public.", "If the committee decides to take the additional 45 days to consider an OCE referral, at the end of the second 45 days, the chair is required to make public the OCE written report and findings unless the committee votes to initiate an investigation. Should the committee proceed to an investigation, only that fact is announced. The announcement must include the name of the applicable Member, officer, or employee, and the alleged violation(s). If the committee deadlocks on a matter referred by the OCE, it must release the OCE's report and findings. At the end of each Congress, any reports and findings not previously related are required to be released.", "In the event the Committee on Ethics conducts an investigation, it is conducted pursuant to established committee rules. Pursuant to these rules, action on a case may be deferred at the request of law enforcement or regulatory authorities.", "Before the Committee on Ethics publicly releases OCE findings and the committee's statement and report, if any, on a referral, the committee is required to give advanced notice of one calendar day to the OCE and any Member, officer, or employee who was the subject of a referral.", "The Capuano task force envisioned that the Committee on Ethics and the OCE would work closely. The committee is to be notified early and throughout an OCE review. The committee may also ask the OCE to stop a review if the allegation becomes the subject of a Committee on Ethics investigation. In such an occurrence, the OCE board is required to refer the case to the committee, and to treat the matter under the same rules as other OCE referrals. If the committee does not reach a conclusion, it must notify the OCE board. The OCE board may choose to complete a suspended review. Once a matter is returned to the OCE, it must proceed according to the established process outlined above under \" Investigative Procedure .\""], "subsections": []}, {"section_title": "Referrals to Other Entities", "paragraphs": ["The OCE may also, when appropriate, refer allegations to the Office of Congressional Workplace Rights, House Office of the Inspector General, House Commission on Congressional Mail Standards, and state and federal authorities. OCE Rule 13 dictates situations under which referral to one of these entities may be made."], "subsections": [{"section_title": "Office of Congressional Workplace Rights123", "paragraphs": ["Allegations related to laws covered by the Congressional Accountability Act may be referred to the Office of Congressional Workplace Rights."], "subsections": []}, {"section_title": "House Office of the Inspector General", "paragraphs": ["Allegations of \"fraud, waste and abuse in the operations of the House or joint entities of Congress\" may be referred to the Office of the House Inspector General."], "subsections": []}, {"section_title": "House Commission on Congressional Mailing Standards", "paragraphs": ["Allegations \"relating to the proper use of the franking privilege\" may be referred to the House Commission on Congressional Mailing Standards."], "subsections": []}, {"section_title": "State and Federal Authorities", "paragraphs": ["In consultation with the OCE chair and co-chair, the OCE staff can refer \"information to state and federal authorities in the event that information indicates imminent harm or a threat to public safety.\""], "subsections": []}]}]}, {"section_title": "Implementation", "paragraphs": [], "subsections": [{"section_title": "Funding", "paragraphs": ["Pursuant to H.Res. 895 , the OCE is authorized \"such sums as necessary\" from applicable accounts of the House. Payments made by the OCE are made on vouchers signed by the chair of the board and approved in the manner directed by the Committee on House Administration. All funds expended by the OCE are subject to regulations prescribed by the Committee on House Administration. Table 4 shows the annual appropriations for the OCE since its inception in FY2009."], "subsections": []}, {"section_title": "Public Information", "paragraphs": ["Since the OCE was reauthorized in January 2009, the OCE, although not mandated to do so, has issued quarterly reports. Each quarterly report provides a brief summary of OCE activities, including citizen communications, a summary of the OCE process, and a summary of board actions taken during the quarter and for the Congress. Table 5 provides a summary of the number of cases OCE has considered between 2009 and 2018."], "subsections": []}]}]}, {"section_title": "Options for Congress", "paragraphs": ["Creation of the OCE changed the relationship between the public and the House ethics process. Even with OCE active since 2009, there continue to be options which might further clarify the OCE's relationship with the public, rank-and-file House Members, and the Committee on Ethics. These options each have advantages and disadvantages for the structure of the OCE, its relationship to the Committee on Ethics, and the House's constitutional responsibility to investigate its Members. Consequently, careful comparison of all options for the future of the OCE may be useful to ensure that the most effective process is created while ensuring the continued enforcement of House ethics procedures. CRS takes no position on any of the options identified in this report."], "subsections": [{"section_title": "Create a Statutory OCE", "paragraphs": ["The OCE exists pursuant to H.Res. 895 (110 th Congress) and faces renewal on a biannual basis as part of the House rules package. In January 2019, the OCE was reauthorized when H.Res. 6 was agreed to. Because the OCE operates pursuant to a House resolution, a change in party control or a decision to exclude the OCE from the rules package in a future Congress might result in the elimination of the office.", "If the House wanted to ensure the OCE's continuation, it could create a statutory ethics entity. A permanent statutory office would not require reauthorization each Congress. If the House chose to create a statutory office, should the House desire to alter or terminate the program, subsequent legislation would be necessary to amend or terminate the program. Creation of a statutory ethics office, even if only in the House, would require the concurrence of the Senate and the President's signature."], "subsections": []}, {"section_title": "Reform Committee on Ethics to Allow Public Input", "paragraphs": ["Prior to the creation of the OCE, the Committee on Ethics did not allow public complaints to be to made against Members of Congress. If the House wanted to provide an opportunity for citizens to be involved in the ethics process without the creation of an independent ethics entity (either by resolution or statute), the House could amend House or committee rules to allow the Committee on Ethics to receive formal complaints or information from the general public. ", "Allowing the public to provide information directly to the Committee on Ethics could allay constitutional concerns over the involvement of an independent entity in investigating and recommending action on internal House enforcement matters. Instead of giving power to an outside entity, the Committee on Ethics could establish mechanisms for the intake and evaluation of citizen complaints prior to investigation and potential action of the full committee. This work could be handled by a subcommittee or by the whole committee.", "Should the Committee on Ethics assume this responsibility, the committee's workload could increase substantially. The OCE specifies the number of contacts its staff has with the public and the number of investigations authorized as part of quarterly reports. It is possible that providing the public with direct access to the Committee on Ethics might result in more information (at least at the level currently handled by the OCE) being provided by the public. In addition, a citizen or group providing information might expect the committee to provide updates on the status of investigations."], "subsections": []}, {"section_title": "Amend OCE Authority", "paragraphs": ["The relationship between the OCE and the Committee on Ethics continues to evolve. Under the provisions of H.Res. 895, as the OCE completes second-phase reviews and determines that a further investigation is necessary, the OCE board forwards a report and supporting documentation to the Committee on Ethics."], "subsections": [{"section_title": "Subpoena Power", "paragraphs": ["The House could provide the OCE with limited subpoena power to enable the OCE board to conduct more thorough investigations prior to referral to the Committee on Ethics. Providing subpoena power to the OCE might reduce the workload and investigative burden of the Committee on Ethics and prevent duplicative efforts on behalf of the OCE and committee staffs.", "Chairman Capuano, in the task force report, explained that consideration was given to empowering the OCE with subpoena power. During the discussions, the task force sought the professional opinion of numerous experts (including the House parliamentarian, House general counsel, and the Congressional Research Service).", "The decision not to include subpoena authority was based on various factors, including timeliness. Challenges to a subpoena, it was felt, could hinder and complicate the OCE process and prevent a prompt investigation. Moreover, because of Congress's reluctance to delegate subpoena authority to independent entities, if the task force had recommended giving the OCE that authority, the legislative process might have been delayed while the House debated the merits of the proposal.", "Currently, if a subpoena is deemed necessary, the House provides the OCE with the ability to recommend to the Committee on Ethics that a subpoena be issued, as part of the authority already delegated to the committee."], "subsections": []}, {"section_title": "OCE Follow Up", "paragraphs": ["The House could also provide a mechanism whereby the OCE could formally follow up on investigations forwarded to the Committee on Ethics. Pursuant to current practice, the OCE has no recourse to follow a case once it is referred to the committee. Committee rules require that the committee release the OCE report under certain circumstances."], "subsections": []}, {"section_title": "Additional OCE Functions", "paragraphs": ["On March 5, 2009, Representative Ron Paul introduced H.Res. 216. The resolution, if agreed to by the House, would have amended House Rules to require a certain period of time to elapse between introduction of legislation and a vote by the House. Included in the resolutions provisions, Rule XXIX would be amended to allow citizens to petition the board of the Office of Congressional Ethics to investigate potential violations of the new rule. ", "Notwithstanding any provision of these rules, any citizen who is eligible to vote and who is not an employee of the executive or judicial branch of the Government may petition the board of the Office of Congressional Ethics to investigate allegations that a member voted for any measure that violated this rule.", "The addition to the OCE's jurisdiction by amending House rules could be a way to involve the investigative expertise of the OCE in other House matters. H.Res. 216 implied the OCE's authority to take \"complaints\" from the general public. This would appear to be incongruent with OCE's current mission to take \"information\" from public sources and would potentially need to be clarified by the board or by Congress."], "subsections": []}]}, {"section_title": "Place OCE Within the House Ethics Committee", "paragraphs": ["An amendment to the rules of the House that would reassign the functions of the OCE to the House Ethics Committee was initially proposed to be included as part of the rules package for the 115 th Congress (2017-2018). This language, which was not included in H.Res. 5, would have created a new Office of Congressional Complaint Review, as an office within the Ethics Committee. While much of the investigative structure of OCE would have been retained by this new entity, the timeline for completing a preliminary and second-phase review would have been altered, and the use of anonymous information in review would have been prohibited."], "subsections": []}, {"section_title": "Take No Immediate Action", "paragraphs": ["The House might determine that the current relationship between the OCE and the Committee on Ethics is effective. Instead of creating an independent statutory ethics entity, reforming the Committee on Ethics, or amending OCE statute, the House could continue to consider the OCE as part of the rules package in subsequent Congresses. Changes to the OCE could be made on an as-needed basis through House resolutions or through changes to the rules package for subsequent Congresses."], "subsections": [{"section_title": "Appendix. Rules Committee Amendments toH.Res. 895", "paragraphs": [], "subsections": []}]}]}]}}
{"id": "RL34391", "title": "Coast Guard Polar Security Cutter (Polar Icebreaker) Program: Background and Issues for Congress", "released_date": "2019-05-09T00:00:00", "summary": ["The Coast Guard Polar Security Cutter (PSC) program is a program to acquire three new heavy polar icebreakers, to be followed years from now by the acquisition of up to three new medium polar icebreakers. On April 23, 2019, the Coast Guard-Navy Integrated Program Office for the PSC program awarded a $745.9 million fixed-price, incentive-firm contract for the detail design and construction (DD&C) of the first PSC to VT Halter Marine of Pascagoula, MS, a shipyard owned by Singapore Technologies (ST) Engineering. VT Halter was the leader of one of three industry teams that competed for the DD&C contract. The first PSC is scheduled to begin construction in 2021 and be delivered in 2024, though the DD&C contract includes financial incentives for earlier delivery.", "The DD&C contract includes options for building the second and third PSCs. If these options are exercised, the total value of the contract would increase to $1,942.8 million (i.e., about $1.9 billion). The figures of $745.9 million and $1,942.8 million cover only the shipbuilder's costs; they do not include the cost of government-furnished equipment (GFE), which is equipment for the ships that the government purchases and then provides to the shipbuilder for incorporation into the ship, or government program-management costs. When GFE and government program-management costs are included, the total estimated procurement cost of the first PSC is between $925 million and $940 million, and the total estimated procurement cost of the three-ship PSC program is about $2.95 billion.", "The PSC program has received a total of $1,034.6 million (i.e., about $1.0 billion) in procurement funding through FY2019, including $300 million provided through the Navy's shipbuilding account in FY2017 and FY2018. The Coast Guard's proposed FY2020 budget requests $35 million in procurement funding for the PSC program, which is enough to cover the PSC program's FY2020 government program-management costs. The Coast Guard's FY2019 budget submission had projected that a total of $125 million in procurement funding would be requested for the PSC program in FY2020.", "The operational U.S. polar icebreaking fleet currently consists of one heavy polar icebreaker, Polar Star, and one medium polar icebreaker, Healy. In addition to Polar Star, the Coast Guard has a second heavy polar icebreaker, Polar Sea. Polar Sea, however, suffered an engine casualty in June 2010 and has been nonoperational since then. Polar Star and Polar Sea entered service in 1976 and 1978, respectively, and are now well beyond their originally intended 30-year service lives. The Coast Guard is using Polar Sea as a source of spare parts for keeping Polar Star operational.", "Issues for Congress for the PSC program include, inter alia, whether to approve, reject, or modify the Coast Guard's FY2020 procurement funding request for the program; whether to use a contract with options or a block buy contract to procure the ships; whether to continue providing at least some of the procurement funding for the PSC program through the Navy's shipbuilding account; technical, schedule, and cost risk in the PSC program; and whether to procure heavy and medium polar icebreakers to a common basic design."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides background information and issues for Congress on the Polar Security Cutter (PSC) program\u2014the Coast Guard's program for acquiring new polar icebreakers. The PSC program has received a total of $1,034.6 million (i.e., about $1.0 billion) in procurement funding through FY2019. The Coast Guard's proposed FY2020 budget requests $35 million in procurement funding for the PSC program, which is enough to cover FY2020 program-management costs.", "The issue for Congress is whether to approve, reject, or modify the Administration's FY2020 procurement funding request for the PSC program, and, more generally, whether to approve, reject, or modify the Coast Guard's overall plan for procuring new polar icebreakers. Congress's decisions on this issue could affect Coast Guard funding requirements, the Coast Guard's ability to perform its polar missions, and the U.S. shipbuilding industrial base.", "For a brief discussion of the Coast Guard's Great Lakes icebreakers, see Appendix E . A separate CRS report covers acquisition of general-purpose cutters for the Coast Guard. Another CRS report provides an overview of various issues relating to the Arctic."], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "Missions of U.S. Polar Icebreakers", "paragraphs": [], "subsections": [{"section_title": "Statutory Duties and Missions", "paragraphs": ["The permanent statute that sets forth the Coast Guard's primary duties\u201414 U.S.C. 102\u2014states that among other things, the Coast Guard shall (emphasis added) \"develop, establish, maintain, and operate, with due regard to the requirements of national defense, aids to maritime navigation, icebreaking facilities , and rescue facilities for the promotion of safety on, under, and over the high seas and waters subject to the jurisdiction of the United States,\" and \"pursuant to international agreements, develop, establish, maintain, and operate icebreaking facilities on, under, and over waters other than the high seas and waters subject to the jurisdiction of the United States....\"", "In addition, Section 888(a) of the Homeland Security Act of 2002 ( H.R. 5005 / P.L. 107-296 of November 25, 2002)\u2014the law that established the Department of Homeland Security (DHS) and transferred the Coast Guard from the Department of Transportation to DHS\u2014sets forth 11 specific missions for the Coast Guard (often referred to as the Coast Guard's 11 statutory missions), including the mission of \"ice operations.\""], "subsections": []}, {"section_title": "Multiple Missions (Not Just Icebreaking)", "paragraphs": ["The Coast Guard's polar icebreakers do not simply break ice\u2014they are multimission cutters that conduct a variety of other operations that are conducted in lower-latitude waters by the Coast Guard's general-purpose cutters. U.S. polar ice operations conducted in large part by the Coast Guard's polar icebreakers support 9 of the Coast Guard's 11 statutory missions. The roles of U.S. polar icebreakers can be summarized as follows:", "conducting and supporting scientific research in the Arctic and Antarctic; defending U.S. sovereignty in the Arctic by helping to maintain a U.S. presence in U.S. territorial waters in the region; defending other U.S. interests in polar regions, including economic interests in waters that are within the U.S. exclusive economic zone (EEZ) north of Alaska; monitoring sea traffic in the Arctic, including ships bound for the United States; and conducting other typical Coast Guard missions (such as search and rescue, law enforcement, and protection of marine resources) in Arctic waters, including U.S. territorial waters north of Alaska."], "subsections": []}, {"section_title": "Polar (Not Just Arctic) Operations", "paragraphs": ["The Coast Guard's large icebreakers are called polar icebreakers rather than Arctic icebreakers because they perform missions in both the Arctic and Antarctic. Operations to support National Science Foundation (NSF) research activities in both polar regions account for a significant portion of U.S. polar icebreaker operations.", "Supporting NSF research in the Antarctic focuses on performing an annual mission, called Operation Deep Freeze (ODF), to break through Antarctic sea ice so as to reach and resupply McMurdo Station, the large U.S. Antarctic research station located on the shore of McMurdo Sound, near the Ross Ice Shelf. The Coast Guard states that Polar Star , the Coast Guard's only currently operational heavy polar icebreaker, \"spends the [northern hemisphere] winter [i.e., the southern hemisphere summer] breaking ice near Antarctica in order to refuel and resupply McMurdo Station. When the mission is complete, the Polar Star returns to dry dock [in Seattle] in order to complete critical maintenance and prepare it for the next ODF mission. Once out of dry dock, it's back to Antarctica, and the cycle repeats itself.\" In terms of the maximum thickness of the ice to be broken, the annual McMurdo resupply mission generally poses the greatest icebreaking challenge for U.S. polar icebreakers, though Arctic ice can frequently pose its own significant icebreaking challenges for U.S. polar icebreakers. The Coast Guard's medium polar icebreaker, Healy , spends most of its operational time in the Arctic supporting NSF research activities and performing other operations.", "Although polar ice is diminishing due to climate change, observers generally expect that this development will not eliminate the need for U.S. polar icebreakers, and in some respects might increase mission demands for them. Even with the diminishment of polar ice, there are still significant ice-covered areas in the polar regions, and diminishment of polar ice could lead in coming years to increased commercial ship, cruise ship, and naval surface ship operations, as well as increased exploration for oil and other resources, in the Arctic\u2014activities that could require increased levels of support from polar icebreakers, particularly since waters described as \"ice free\" can actually still have some amount of ice. Changing ice conditions in Antarctic waters have made the McMurdo resupply mission more challenging since 2000.", "The Coast Guard's strategy document for the Arctic region, released on May 21, 2013, states that \"The United States must have adequate icebreaking capability to support research that advances fundamental understanding of the region and its evolution,\" and that \"The Nation must also make a strategic investment in icebreaking capability to enable access to the high latitudes over the long-term.\""], "subsections": []}]}, {"section_title": "Current U.S. Polar Icebreakers", "paragraphs": ["The operational U.S. polar icebreaking fleet currently consists of one heavy polar icebreaker, Polar Star , and one medium polar icebreaker, Healy . In addition to Polar Star , the Coast Guard has a second heavy polar icebreaker, Polar Sea . Polar Sea , however, suffered an engine casualty in June 2010 and has been nonoperational since then. Polar Sta r and Polar Sea entered service in 1976 and 1978, respectively, and are now well beyond their originally intended 30-year service lives. The Coast Guard is using Polar Sea as a source of spare parts for keeping Polar Star operational.", "For additional background information on current U.S. polar icebreakers and polar research ships, see Appendix A ."], "subsections": []}, {"section_title": "Required Numbers of U.S. Polar Icebreakers", "paragraphs": ["For background information on required numbers of U.S. polar icebreakers, see Appendix B ."], "subsections": []}, {"section_title": "Coast Guard Polar Security Cutter (PSC) Program", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The PSC program was initiated in the Coast Guard's FY2013 budget submission, and envisages the acquisition of three new heavy polar icebreakers, to be followed years from now by the acquisition of up to three new medium polar icebreakers. The Coast Guard wants to begin construction of the first new heavy polar icebreaker in 2021 and have it enter service in 2024. "], "subsections": []}, {"section_title": "Program Name", "paragraphs": ["The PSC program was previously known as the polar icebreaker (PIB) program. Changing the program's name to the PSC program is intended to call attention to the fact that the Coast Guard's polar icebreakers perform a variety of missions relating to national security, not just icebreaking. Although it is now called the PSC program, many observers, as a matter of convenience, may continue to refer to it as the polar icebreaker program."], "subsections": []}, {"section_title": "Coast Guard-Navy Integrated Program Office (IPO)", "paragraphs": ["The PSC program is managed by a Coast Guard-Navy Integrated Program Office (IPO). A key aim in establishing the IPO was to permit the Navy to share its ship-procurement best practices with the Coast Guard so as to help the Coast Guard reduce the time and cost needed to design and procure the PSCs."], "subsections": []}, {"section_title": "Parent Design Approach", "paragraphs": ["The PSC program is using the parent design approach, meaning that the design of the PSC will be based on an existing icebreaker design. A key aim in using the parent design approach is to reduce cost, schedule, and technical risk in the PSC program."], "subsections": []}, {"section_title": "Program Schedule", "paragraphs": ["The PSC program's schedule calls for delivering the three PSCs at 12-month intervals, at the end of the third quarters of FY2024, FY2025, and FY2026, respectively."], "subsections": []}, {"section_title": "Procurement Cost", "paragraphs": ["The Coast Guard and Navy estimate the procurement cost of the first PSC at $925 million to $940 million, and the total estimated procurement cost of the three-ship PSC program at about $2.95 billion. These figures include the shipbuilder's cost; the cost of government-furnished equipment (GFE), which is equipment for the ships that the government purchases and then provides to the shipbuilder for incorporation into the ship; and government program-management costs. Within these figures, the shipbuilder's contract-award cost for the first ship is $745.9 million, with options for the second and third ships that, if exercised, would increase the total value of the contract to $1,942.8 million (i.e., about $1.9 billion)."], "subsections": []}, {"section_title": "Program Funding", "paragraphs": ["The PSC program received about $359.6 million in procurement funding through FY2018, including $300 million provided through the Navy's shipbuilding account (which is part of DOD's budget) and $59.6 million provided through the Coast Guard's procurement account (which is part of the Department of Homeland Security's [DHS's] budget). The FY2019 DHS Appropriations Act (Division A of H.J.Res. 31 / P.L. 116-6 of February 15, 2019) provided an additional $675 million for the PSC program through the Coast Guard's procurement account, including $20 million for the procurement of long leadtime materials (LLTM) for the second ship in the program. The PSC program has thus received a total of $1,034.6 million (i.e., about $1.0 billion) in procurement funding through FY2019. The Coast Guard's proposed FY2020 budget requests $35 million in procurement funding for the PSC program, which is enough to cover the PSC program's FY2020 government program-management costs. As shown in Table C-2 , the Coast Guard's FY2019 budget submission had projected that a total of $125 million in procurement funding would be requested for the PSC program in FY2020.", "For additional background information on funding for the PSC program, see Appendix C ."], "subsections": []}, {"section_title": "Contract Award", "paragraphs": ["On April 23, 2019, the Coast Guard-Navy Integrated Program Office for the PSC program awarded a $745.9 million fixed-price, incentive-firm contract for the detail design and construction (DD&C) of the first PSC to VT Halter Marine of Pascagoula, MS, a shipyard owned by Singapore Technologies (ST) Engineering. VT Halter was the leader of one of three industry teams that competed for the DD&C contract; the other two bidders reportedly were Bollinger Shipyards of Lockport, Louisiana, and a partnership between Philly Shipyard of Philadelphia and Fincantieri/Marinette Marine, of Marinette, WI.", "The first PSC is scheduled to begin construction in 2021 and be delivered in 2024, though the DD&C contract includes financial incentives for earlier delivery. The DD&C contract includes options for building the second and third PSCs. If these options are exercised, the total value of the contract would increase to $1,942.8 million (i.e., about $1.9 billion). The figures of $745.9 million and $1,942.8 million cover the shipbuilder's costs; they do not include the cost of government-furnished equipment (GFE), which is equipment for the ships that the government purchases and then provides to the shipbuilder for incorporation into the ship, or government program-management costs."], "subsections": []}, {"section_title": "Ship Design", "paragraphs": [" Figure 1 , Figure 2 , and Figure 3 show three renderings of VT Halter's design for the PSC. An April 25, 2019, press report states that \"the Coast Guard and Navy said VT Halter Marine's winning design for the new Polar Security Cutter (PSC) 'meets or exceeds all threshold requirements' in the ship specification\" for the PSC program. ", "A May 7, 2019, press release from VT Halter about its design for the PSC stated:", "VT Halter Marine is teamed with Technology Associates, Inc. [TAI] as the ship designer and, for over two years, has participated in the U.S. Coast Guard's Heavy Polar Icebreaker Industry Study. The ship design is an evolution from the mature \"Polar Stern II\" [German icebreaker] currently in design and construction; the team has worked rigorously to demonstrate its maturity and reliability. During the study, TAI incrementally adjusted the design and conducted a series of five ship model tank tests to optimize the design. The vessels are 460 feet \u00edn length with a beam of 88 feet overall, a full load displacement of approximately 33,000 long tons at delivery. The propulsion will be diesel electric at over 45,204 horse power and readily capable of breaking ice between six to eight feet thick. The vessel will accommodate 186 personnel comfortably for an extended endurance of 90 days. In addition to TAI, VT Halter Marine has teamed with ABB/Trident Marine for its Azipod propulsion system, Raytheon for command and control systems integration, Caterpillar for the main engines, Jamestown Metal Marine for joiner package, and Bronswerk for the HVAC system. The program is scheduled to bring an additional 900 skilled craftsman and staff to the Mississippi-based shipyard.", "The German icebreaker design referred to in VT Halter's press release, Polar Stern II (also spelled Polarstern II ), is being built as the replacement for Polarstern , Germany's current polar research and supply icebreaker. A May 9, 2019, press report stated that Polar s tern II", "was designed by Germany's Ship Design & Consult (SDC) and is being built by German shipbuilder HDW.", "VT Halter's teammates on the PSC include ship designer Technology Associates, Inc. (TAI), which has been involved in the design for over two years and has made \"a lot of modifications\" in a number of areas to meet Coast Guard requirements, [Ronald Baczkowski, president and CEO of VT Halter Marine] said. The team went through six design spirals to refine the design and the major modifications include changes in the hull form to enhance the ship's icebreaking capabilities and keep the ice clear from the propulsors and sensors, habitability improvements for comfort particularly in open water, easier access to different areas of the ship, and maintenance and endurance capabilities\u2026.", "Raytheon [RTN] is the integrator for C5I capabilities on the ship and the main engines will be supplied by Caterpillar [CAT]. Switzerland-based ABB and Netherlands-based Trident are supplying the Azipod propulsion system, Florida-based Jamestown Metal Marine is supplying the joiner package, and Netherlands-based Bronswerk the heating, ventilation and cooling system.", " Figure 4 shows a rendering of the SDC's concept design for Polarstern II .", "SDC states that its concept design for Polarstern II has a length of 133 meters (about 436.4 feet) long, a beam of 27 meters (about 88.6 feet), and a draft of 10.5 meters (about 34.4 feet), but does not provide the design's displacement. A briefing on a preliminary version of the ship's design stated that the design at that point was somewhat larger, with a length of 145 meters (about 476 feet), a beam of 27.3 meters (about 89.6 feet), a draft of about 11 meters (about 36.1 feet), and a displacement (including payload) of about 26,000 tons. These figures suggest that SDC's somewhat smaller concept design for Polarstern II might have a displacement (including payload) of something less than 26,000 tons, and perhaps closer to 23,000 tons.", "VT Halter's 33,000-ton design for the PSC is considerably larger than the Coast Guard's current polar icebreakers. As shown in tons Table A-1 , the Coast Guard's largest polar icebreaker, Healy , is 420 feet long and has a full load displacement of 16,000 tons. VT Halter's 460-foot design for the PSC is 40 feet longer than Healy , and its 33,000-ton displacement is more than twice that of Healy . Indeed, in terms of full load displacement, VT Halter's design will be larger than some of Russia's existing nuclear-powered Arctic icebreakers, and about the same size as new nuclear-powered Arctic icebreakers that Russia is building and a nuclear-powered icebreaker that China has announced an intention to build.", "The horsepower generated by the propulsion plant in VT Halter's design (\"over 45,200\") is roughly one-quarter less than the 60,000 shaft horsepower of the propulsion plant in the Coast Guard's heavy polar icebreaker, Polar Star . A shown in Figure 1 and Figure 2 , however, VT Halter's design includes a centerline shafted propeller flanked by two azimuthing (i.e., swiveling) podded propulsors\u2014an arrangement that, along with other modern icebreaker hull design features, is expected to give VT Halter's design a capability for breaking ice comparable to that of Polar Star . A May 8, 2019 press report states:", "\"We picked the most modern icebreaker that was on the market, soon to be production-level design that roughly met the Coast Guard's requirements, and we took it and modified it,\" Baczkowski said.", "\"It has a contoured shape. The shape of the hull does the icebreaking. Instead of being a mass breaking ice, this actually slices the ice. The shape of the hull pushed the broken ice aside, so it doesn't interfere with your propulsion systems, with your instrumentation that's on the other side of the ship.\"", "The design of the cutter is optimized for seakeeping to support the long voyage from its homeport in Washington state to as far away as the Antarctic, he said.", "\"It's an optimum design between icebreaking and seakeeping.\"", "\"With the propulsors, with one fixed and two steerable, we were able to optimize the seakeeping capability so when you're going on long transits from Washington to Antarctica the crew is not beat to a pulp or heavily fatigued because of the stability characteristics in open water.\""], "subsections": []}]}]}, {"section_title": "Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "FY2020 Funding", "paragraphs": ["One issue for Congress is whether to approve, reject, or modify the Coast Guard's FY2020 procurement funding request for the PSC program. In considering this issue, Congress may consider, among other things, whether the Coast Guard has accurately priced the work it is proposing to do each year in the program, and whether the procurement of the second and/or third PSCs should be deferred or accelerated.", "As noted earlier, the $35 million in procurement funding that the Coast Guard has requested for the PSC program for FY2020 is enough to cover the program's FY2020 government program-management costs. As shown in Table C-2 , the Coast Guard's FY2019 budget submission had projected that a total of $125 million in procurement funding would be requested for the PSC program in FY2020, suggesting that the Coast Guard had projected requesting, beyond the $35 million, another $90 million or so for other costs, such as procurement of long leadtime materials (LLTM) for the second PSC. An April 15, 2019, press report states:", "The Coast Guard's fiscal year 2020 budget request of $35 million for its new heavy icebreaker is insufficient for the purchase of long-lead time materials to maintain the program schedule, Rep. Lou Correa (D-Calif.) said April 9th in his opening remarks at a House Homeland Security Transportation and Maritime Security Subcommittee hearing with the heads of the Coast Guard and Transportation Security Administration. Correa, chairman of the subcommittee, was referring to the advance purchase of materials for the second Polar Security Cutter (PSC). The Coast Guard is expected to award a contract for the detailed design and construction of the first PSC within a month and already has the funding. House staffers say the Coast Guard has told them it needs $100 million for long-lead materials for the second PSC or the ship's schedule will be a risk.", "Funding the procurement of LLTM for both the second and third PSCs in FY2020 might enable improved production economies of scale for that LLTM, which could reduce at the margin the procurement cost of the second and third PSCs."], "subsections": []}, {"section_title": "Contract with Options vs. Block Buy Contract", "paragraphs": ["Another potential issue for Congress is whether to use a contract with options or a block buy contract to acquire the ships. As noted earlier, the baseline plan for the PSC program calls for acquiring ships using a contract with options, but Coast Guard and Navy officials are open to the idea of instead using a block buy contract to acquire the ships, and have requested information on this possibility as part of the request for proposals (RFP) for the PSC program that was released on March 2, 2018. Section 311 of the Frank LoBiondo Coast Guard Authorization Act of 2018 ( S. 140 / P.L. 115-282 of December 4, 2018) provides permanent authority for the Coast Guard to use block buy contracting with economic order quantity (EOQ) purchases (i.e., up-front batch purchases) of components in its major acquisition programs. The authority is now codified at 14 U.S.C. 1137.", "Although a contract with options covers multiple years, it operates more like a form of annual contracting, and it does not generate the kinds of savings that are possible with a block buy contract. Compared to a contract with options, a block buy contract would reduce the government's flexibility regarding whether and when to acquire the second and third ships, and what design to build them to, and in return reduce the combined acquisition cost of the ships covered by the contract. The Navy has used block buy contracts to reduce procurement costs of Virginia-class attack submarines and (in more recent years) Littoral Combat Ships (LCSs) and John Lewis (TAO-205) class oilers. CRS estimates that compared to costs using a contract with options, using a block buy contract that included economic order quantity (EOQ) purchases (i.e., up-front batch purchases) of materials and components for three heavy polar icebreakers would reduce the combined acquisition cost of the three ships by upwards of 7%, which could equate to a savings of upwards of $150 million.", "A congressionally mandated July 2017 National Academies of Sciences, Engineering, and Medicine (NASEM) report on acquisition and operation of polar icebreakers states the following (emphasis as in original):", "3. Recommendation: USCG should follow an acquisition strategy that includes block buy contracting with a fixed price incentive fee contract and take other measures to ensure best value for investment of public funds.", "Icebreaker design and construction costs can be clearly defined, and a fixed price incentive fee construction contract is the most reliable mechanism for controlling costs for a program of this complexity. This technique is widely used by the U.S. Navy. To help ensure best long-term value, the criteria for evaluating shipyard proposals should incorporate explicitly defined lifecycle cost metrics....", "A block buy authority for this program will need to contain specific language for economic order quantity purchases for materials, advanced design, and construction activities. A block buy contracting program with economic order quantity purchases enables series construction, motivates competitive bidding, and allows for volume purchase and for the timely acquisition of material with long lead times. It would enable continuous production, give the program the maximum benefit from the learning curve, and thus reduce labor hours on subsequent vessels....", "If advantage is taken of learning and quantity discounts available through the recommended block buy contracting acquisition strategy, the average cost per heavy icebreaker is approximately $791 million, on the basis of the acquisition of four ships."], "subsections": []}, {"section_title": "Funding Coast Guard Polar Icebreakers through Navy's Shipbuilding Account", "paragraphs": ["Another potential issue for Congress is whether to continue providing at least some of the procurement funding for the PSC program through the Navy's shipbuilding account, known formally as the Shipbuilding and Conversion Navy (SCN) appropriation account. A May 2018 GAO report states that agreements between DHS, the Coast Guard, and the Navy that were made following the establishment of the Coast Guard-Navy integrated program office for the PSC program \"state that the program's contracting actions could be funded by either USCG or Navy appropriations, and the source of the appropriations will award the contract.\" As noted earlier, of the $300 million of the procurement funding that has provided for the PSC program was provided through the SCN account\u2014$150 million in FY2017, and another $150 million in FY2018.", "Although providing funding for Coast Guard ships through the SCN account creates some complexity in tracking and executing funding for Coast Guard ship acquisition, and can raise a question as to whether that funding would otherwise go toward the acquisition of Navy ships, it has been used in the past for funding Coast Guard ships other than heavy polar icebreakers:", "Healy was funded largely (about 89%) through the SCN account. Thirty-three of the Coast Guard's 49 Island-class 110-foot patrol boats (i.e., about 67% of the boats) were procured under a Navy contract. The contract was for the construction of 21 of the boats, and included FY1990 SCN funds and prior year DOD nonexpiring funding. During the construction phase of the contract, the Navy exercised options under the contract for the construction 12 additional boats using FY1990 SCN funding.", "Subsections (a), (b), and (c) of Section 122 of the FY2018 National Defense Authorization Act ( H.R. 2810 / P.L. 115-91 of December 12, 2017) state the following:", "SEC. 122. Icebreaker vessel.", "(a) Authority to procure one polar-class heavy icebreaker.\u2014", "(1) IN GENERAL.\u2014There is authorized to be procured for the Coast Guard one polar-class heavy icebreaker vessel.", "(2) CONDITION FOR OUT-YEAR CONTRACT PAYMENTS.\u2014A contract entered into under paragraph (1) shall provide that any obligation of the United States to make a payment under the contract for a fiscal year after fiscal year 2018 is subject to the availability of appropriations or funds for that purpose for such later fiscal year.", "(b) Limitation on availability of funds for procurement of icebreaker vessels.\u2014None of the funds authorized to be appropriated by this Act or otherwise made available for the Department of Defense for any fiscal year that are unobligated as of the date of the enactment of this Act may be obligated or expended for the procurement of an icebreaker vessel other than the one polar-class heavy icebreaker vessel authorized to be procured under subsection (a)(1).", "(c) Contracting authority.\u2014", "(1) COAST GUARD.\u2014If funds are appropriated to the department in which the Coast Guard is operating to carry out subsection (a)(1), the head of contracting activity for the Coast Guard shall be responsible for contracting actions carried out using such funds.", "(2) NAVY.\u2014If funds are appropriated to the Department of Defense to carry out subsection (a)(1), the head of contracting activity for the Navy, Naval Sea Systems Command shall be responsible for contracting actions carried out using such funds.", "(3) INTERAGENCY ACQUISITION.\u2014Notwithstanding paragraphs (1) and (2), the head of contracting activity for the Coast Guard or head of contracting activity for the Navy, Naval Sea Systems Command (as the case may be) may authorize interagency acquisitions that are within the authority of such head of contracting activity.", "Regarding Section 122, the conference report ( H.Rept. 115-404 of November 9, 2017) on H.R. 2810 / P.L. 115-91 states the following:", "Icebreaker vessel (sec. 122)", "The House bill contained provisions (sec. 122, 123, and 1012) that would authorize the Secretary of the Navy to act as a general agent for the Secretary of the Department in which the Coast Guard is operating and enter into a contract for icebreaker vessels; prohibit funds for the Department of Defense from being used for the procurement of an icebreaker vessel; and amend section 2218 of title 10, United States Code, to authorize funds associated with the National Defense Sealift Fund for the construction of icebreaker vessels.", "The Senate amendment contained a similar provision (sec. 1048).", "The Senate recedes with an amendment that would authorize one polar-class heavy icebreaker vessel, prohibit funds for the Department of Defense from being used for the procurement of an icebreaker vessel other than this one polar-class heavy icebreaker vessel, clarify contracting authorities, and require a Comptroller General report.", "The conferees recognize the national importance of recapitalizing the U.S. icebreaker fleet and the extraordinary circumstances that necessitated use of Department of Defense funding to procure the first polar-class heavy icebreaker, as partially provided in the Department of Defense Appropriations Act for Fiscal Year 2017. Accordingly, the conferees support the authorization of this icebreaker in this Act.", "The conferees note the Undersecretary of Management in the Department of Homeland Security (DHS) serves as the Acquisition Decision Authority for the Polar Icebreaker Program and that this program is governed in accordance with DHS Acquisition Management Directive 102\u201301 and Instruction 102\u201301\u2013001.", "The conferees believe maintaining clear lines of authority, responsibility, accountability, and resources with the Secretary and Acquisition Decision Authority of the department in which the U.S. Coast Guard is operating are essential to delivering icebreakers on cost and schedule.", "Accordingly, the conferees believe the Secretary of the Department of Homeland Security and the Undersecretary of Management in the DHS should be the officials provided with authorities and resources related to the Polar Icebreaker Program. ", "Therefore, the conferees expect subsequent icebreakers to be authorized by the congressional committees with jurisdiction over the Coast Guard and funded using Coast Guard appropriations. (Pages 765-766)"], "subsections": []}, {"section_title": "Technical, Schedule, and Cost Risk for PSC Program", "paragraphs": ["Another potential issue for Congress concerns technical, schedule, and cost risk in the PSC program. A September 2018 GAO report on the PSC program states that the Coast Guard", "did not have a sound business case in March 2018, when it established the cost, schedule, and performance baselines for its heavy polar icebreaker acquisition program, because of risks in four key areas:", "Design. The Coast Guard set program baselines before conducting a preliminary design review, which puts the program at risk of having an unstable design, thereby increasing the program's cost and schedule risks. While setting baselines without a preliminary design review is consistent with DHS's current acquisition policy, it is inconsistent with acquisition best practices. Based on GAO's prior recommendation, DHS is currently evaluating its policy to better align technical reviews and acquisition decisions.", "Technology. The Coast Guard intends to use proven technologies for the program, but did not conduct a technology readiness assessment to determine the maturity of key technologies prior to setting baselines. Coast Guard officials indicated such an assessment was not necessary because the technologies the program plans to employ have been proven on other icebreaker ships. However, according to best practices, such technologies can still pose risks when applied to a different program or operational environment, as in this case. Without such an assessment, the program's technical risk is underrepresented.", "Cost. The lifecycle cost estimate that informed the program's $9.8 billion cost baseline substantially met GAO's best practices for being comprehensive, well-documented, and accurate, but only partially met best practices for being credible. The cost estimate did not quantify the range of possible costs over the entire life of the program. As a result, the cost estimate was not fully reliable and may underestimate the total funding needed for the program.", "Schedule. The Coast Guard's planned delivery dates were not informed by a realistic assessment of shipbuilding activities, but rather driven by the potential gap in icebreaking capabilities once the Coast Guard's only operating heavy polar icebreaker\u2014the Polar Star\u2014reaches the end of its service life....", "GAO's analysis of selected lead ships for other shipbuilding programs found the icebreaker program's estimated construction time of 3 years is optimistic. As a result, the Coast Guard is at risk of not delivering the icebreakers when promised and the potential gap in icebreaking capabilities could widen."], "subsections": []}, {"section_title": "Common Design for Heavy and Medium Polar Icebreakers", "paragraphs": ["Another potential issue for Congress is whether to procure heavy and medium polar icebreakers to a common basic design. As noted earlier, the DHS polar icebreaker mission need statement (MNS) states that \"current requirements and future projections ... indicate the Coast Guard will need to expand its icebreaking capacity, potentially requiring a fleet of up to six icebreakers (3 heavy and 3 medium) to adequately meet mission demands in the high latitudes....\" Consistent with this statement, the Coast Guard envisages procuring up to three new medium icebreakers after it procures three new heavy polar icebreakers. The question is whether to develop a separate design for the medium polar icebreakers, or instead build the medium polar icebreakers to the same basic design as the heavy polar icebreakers.", "A congressionally mandated July 2017 report from the National Academies of Sciences, Engineering, and Medicine (NASEM) on the acquisition and operation of polar icebreakers concluded that notional operational requirements for new medium polar icebreakers would result in ships that would not be too different in size from new heavy polar icebreakers. (As shown in Table A-1 , the Coast Guard's current medium polar icebreaker, Healy , is actually somewhat larger than the Coast Guard's heavy polar icebreaker, Polar Star .) Given what it concluded as the probable similarity in size between future U.S. heavy and medium polar icebreakers, the NASEM report recommended building a single medium polar icebreaker to the same common design as three new heavy polar icebreakers. This approach, the report concluded, would reduce the cost of the medium icebreaker by avoiding the cost of developing a new design and by making the medium polar icebreaker the fourth ship on an existing production learning curve rather than the first ship on a new production learning curve. The NASEM report stated the following (emphasis as in original):", "2. Recommendation: The United States Congress should fund the construction of four polar icebreakers of common design that would be owned and operated by the United States Coast Guard (USCG).", "The current Department of Homeland Security (DHS) Mission Need Statement... contemplates a combination of medium and heavy icebreakers. The committee's recommendation is for a single class of polar icebreaker with heavy icebreaking capability. Proceeding with a single class means that only one design will be needed, which will provide cost savings. The committee has found that the fourth heavy icebreaker could be built for a lower cost than the lead ship of a medium icebreaker class....", "The DHS Mission Need Statement contemplated a total fleet of \"potentially\" up to six ships of two classes\u2014three heavy and three medium icebreakers. Details appear in the High Latitude Mission Analysis Report. The Mission Need Statement indicated that to fulfill its statutory missions, USCG required three heavy and three medium icebreakers; each vessel would have a single crew and would homeport in Seattle. The committee's analysis indicated that four heavy icebreakers will meet the statutory mission needs gap identified by DHS for the lowest cost.... ", "4. Finding: In developing its independent concept designs and cost estimates, the committee determined that the costs estimated by USCG for the heavy icebreaker are reasonable. However, the committee believes that the costs of medium icebreakers identified in the High Latitude Mission Analysis Report are significantly underestimated ....", "Although USCG has not yet developed the operational requirements document for a medium polar icebreaker, the committee was able to apply the known principal characteristics of the USCG Cutter Healy to estimate the scope of work and cost of a similar medium icebreaker. The committee estimates that a first-of-class medium icebreaker will cost approximately $786 million. The fourth ship of the heavy icebreaker series is estimated to cost $692 million. Designing a medium-class polar icebreaker in a second shipyard would incur the estimated engineering, design, and planning costs of $126 million and would forgo learning from the first three ships; the learning curve would be restarted with the first medium design. Costs of building the fourth heavy icebreaker would be less than the costs of designing and building a first-of-class medium icebreaker....", "6. Recommendation: USCG should ensure that the common polar icebreaker design is science-ready and that one of the ships has full science capability.", "All four proposed ships would be designed as \"science-ready,\" which will be more cost-effective when one of the four ships\u2014most likely the fourth\u2014is made fully science capable. Including science readiness in the common polar icebreaker design is the most cost-effective way of fulfilling both the USCG's polar missions and the nation's scientific research polar icebreaker needs.... The incremental costs of a science-ready design for each of the four ships ($10 million to $20 million per ship) and of full science capability for one of the ships at the initial build (an additional $20 million to $30 million) are less than the independent design and build cost of a dedicated research medium icebreaker.... In briefings at its first meeting, the committee learned that the National Science Foundation and other agencies do not have budgets to support full-time heavy icebreaker access or the incremental cost of design, even though their science programs may require this capability. Given the small incremental cost, the committee believes that the science capability cited above should be included in the acquisition costs.", "Science-ready design includes critical elements that cannot be retrofitted cost-effectively into an existing ship and that should be incorporated in the initial design and build. Among these elements are structural supports, appropriate interior and exterior spaces, flexible accommodation spaces that can embark up to 50 science personnel, a hull design that accommodates multiple transducers and minimizes bubble sweep while optimizing icebreaking capability, machinery arrangements and noise dampening to mitigate interference with sonar transducers, and weight and stability latitudes to allow installation of scientific equipment. Such a design will enable any of the ships to be retrofitted for full science capability in the future, if necessary....", "Within the time frame of the recommended build sequence, the United States will require a science-capable polar icebreaker to replace the science capabilities of the Healy upon her retirement. To fulfill this need, one of the heavy polar icebreakers would be procured at the initial build with full science capability; the ability to fulfill other USCG missions would be retained. The ship would be outfitted with oceanographic overboarding equipment and instrumentation and facilities comparable with those of modern oceanographic research vessels. Some basic scientific capability, such as hydrographic mapping sonar, should be acquired at the time of the build of each ship so that environmental data that are essential in fulfilling USCG polar missions can be collected.", "If policymakers decide to procure a second new medium polar icebreaker or a third new medium polar icebreaker, the same general approach recommended by the NASEM report could be followed\u2014a second medium polar icebreaker and third medium polar icebreaker could be built to the same common design used for the three new heavy polar icebreakers and the first new medium polar icebreaker.", "An April 12, 2018, press report states the following:", "As the Coast Guard prepares to review industry bids for a new heavy polar icebreaker, the service is keeping its options open for the right number and mix of polar icebreakers it will need in the future, Adm. Paul Zukunft, the [then-]commandant of the Coast Guard, said on Wednesday [April 11].", "The Coast Guard's program of record is for three heavy and three medium polar icebreakers but Zukunft said the \"jury is still out\" whether that will remain so. Right now, the service is aiming toward building three new heavy icebreakers, but it might make sense just to keep building these ships, he told reporters at a Defense Writers Group breakfast in Washington, D.C.", "Zukunft said that \"when you start looking at the business case after you build three, and then you need to look at what is the economy of scale when you start building heavy icebreakers, and would it be less expensive to continue to build heavies and not mediums.\" He added that the heavy icebreakers provide more capability, and if the price is \"affordable\" and in \"the same range\" as building medium icebreakers, then \"maybe you end up with one class of heavy icebreakers.\"", "Building only one class of ships has a number of advantages in terms of maintenance, crew familiarity, configuration management, and more, he said. A decision on what the future icebreaker fleet will consist of is \"still probably several years out .... but that's one option that we want to keep open going forward,\" Zukunft said."], "subsections": []}, {"section_title": "Short-Term Bridge to One or More New Polar Icebreakers", "paragraphs": [], "subsections": [{"section_title": "Overview: Two Basic Options", "paragraphs": ["As mentioned earlier, a new heavy polar icebreaker that begins construction in FY2019 might enter service in 2023, while Polar Star was refurbished and reentered service in December 2012 for an intended period of 7 to 10 years\u2014a period that will end between December 2019 and December 2022. Consequently, another potential issue for Congress concerns how to bridge a potential gap in time between the end of Polar Star's current intended service life and the entry into service of one or more new heavy polar icebreakers.", "As testified by CRS on July 21, 2016, there are at least two options for bridging this time period: One would be to further extend the service life of Polar Star . The other would be to charter (i.e., lease) one or more other icebreakers (perhaps foreign-owned ones), if such ships are available for charter and have capabilities for performing missions performed by U.S. heavy polar icebreakers. The United States has used both of these approaches in the past to mitigate polar icebreaking capacity gaps."], "subsections": []}, {"section_title": "Coast Guard Plan is to Further Extend Life of Polar Star", "paragraphs": ["The Coast Guard plans to pursue the first of the two options outlined above\u2014further extend the service life of Polar Star \u2014and has requested funding in its FY2019 budget for service life extension work on Polar Star . A September 25, 2017, GAO report on polar icebreakers states the following:", "While the Coast Guard considered various options to bridge this potential heavy icebreaker gap, in a January 2017 study the Coast Guard reported that it was planning for a limited service life extension of the Polar Star to keep it operational until fiscal year 2025, at an initial cost estimate of $75 million. However, the Coast Guard has not completed a formal cost estimate for this effort and we have previously reported that the $75 million estimate may be unrealistic....", "The Coast Guard's Capital Investment Plan for fiscal years 2018-2022 includes $60 million of a planned $75 million for polar icebreaker sustainment, which officials reported as being the rough estimate for the Polar Star's limited service life extension. Coast Guard officials stated that the $75 million rough estimate is based on the cost of the Polar Star's prior 7-10 year service life extension which was completed in fiscal year 2013. However, in July 2017 we reported that the Coast Guard has not completed a cost estimate for this effort, and that the $75 million estimate may be unrealistic based on the assumptions the Coast Guard used, such as continuing to use parts from the Polar Sea as has been done in previous maintenance events.", "A July 2018 GAO report states the following:", "The Coast Guard is planning a SLEP on the Polar Star to keep it operational until the first and second new heavy polar icebreakers are delivered (planned for 2023 and 2025, according to current acquisition plans) in order to bridge a potential operational gap. This approach would allow the Coast Guard to operate a minimum of two heavy icebreakers once the first polar icebreaker is delivered. The approach would also provide the Coast Guard with a self-rescue capability\u2014the ability for one icebreaker to rescue the other if it became incapacitated while performing icebreaking operations.", "The Coast Guard's plan to conduct the Polar Star SLEP during its existing annual depot-level maintenance periods may not be feasible given the amount of maintenance already required on the cutter. The Polar Star's mission capable rating has been decreasing in recent years and reached a low point of 29 percent\u2014well below the target of 41 percent\u2014from October 2016 to September 2017. Based on mission capable data, we found this is mostly due to additional time spent in depot-level maintenance, which has increased in recent years from about 6 months in 2015 to more than 8 months in 2017.", "Additionally, the Polar Star has required extensions of about 3 months for its annual dry dock periods\u2014the period of time when a cutter is removed from the water so that maintenance can be conducted\u2014in 2016 and 2017 to complete required maintenance activities. These dry docks were originally planned to last between 2-1/2 months and 4 months. These extensions also compressed the amount of time that the crew had to prepare for its annual mission to Antarctica, which, according to members of the Polar Star crew, placed a large stress on the crew, risked the quality of work, and reduced or eliminated the crews' planned rest and personal preparation for their roughly 4-month deployment. Based on our analysis, these delays and extensions are likely to continue as the cutter ages. According to Coast Guard officials, the Polar Star's SLEP work will be conducted during the annual dry dock periods by adding an additional 1 or 2 months to the annual dry docks. However, if the work is unable to be completed during this time frame, it could force the Coast Guard to miss its commitment to conduct the annual Antarctica mission. Coast Guard maintenance officials stated that until the Polar Star completes the SLEP, its repairs will likely continue to get more expensive and time consuming. We will continue to monitor the Polar Star's SLEP through our annual review of DHS programs.", "As we found in July 2017, the Polar Star SLEP effort has a rough order cost estimate of $75 million, which is based on the reactivation work completed in 2013.41 However, this estimate may be unrealistic based on assumptions the Coast Guard used, such as that it would continue to use parts from the Coast Guard's other heavy polar icebreaker, the Polar Sea, which has been inactive since 2010.42 The Coast Guard's recent assessment of the Polar Star's material condition\u2014the physical condition of the cutter, which includes the hull structure, habitability, major equipment systems, and spare parts availability\u2014was completed in January 2018.43 The material assessment stated that many of the available parts from the Polar Sea have already been removed and installed on the Polar Star. As a result of the finite parts available from the Polar Sea, the Coast Guard may have to acquire new parts for the Polar Star that could increase the $75 million SLEP estimate. The Polar Star's recent material assessment will form the basis to determine which systems will be overhauled during the SLEP and for a more detailed cost estimate. The Coast Guard expects the program to reach the obtain phase of the acquisition life cycle by December 2019, at which time the Polar Star could reach the end of its current useful service life (currently projected to be between 2020 to 2023). This timeline contains risk that the Polar Star could be rendered inoperable before the cutter is able to undergo a SLEP."], "subsections": []}, {"section_title": "Another Option: Chartering an Icebreaker", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The feasibility of the second of the two options outlined above\u2014charter (i.e., lease) one or more other icebreakers\u2014would depend on whether an icebreaker was available for charter at the time of the year when the United States would need it to perform desired missions in the Arctic or Antarctic. Foreign polar icebreakers are used by their own countries for icebreaking operations, and may not always be available for charter when the United States might want to use them. If an icebreaker were available for charter, the potential cost effectiveness of this option would then depend on the cost of the charter, the ability of the ship to perform U.S. polar icebreaker missions, and how these costs and capabilities compare to the option of extending the service life of Polar Star .", "The Coast Guard stated in July 2016 that", "NSF leased the icebreaker KRASIN from Russia from 2005-2006, ODEN from the Swedish government from 2007-2010, and VLADIMIR IGNATYUK from Russia in 2012 to support the McMurdo resupply mission. All leases were time charters, and crews were supplied with the leases. As a contingency measure, NSF obtained assurances of assistance from other vessels in the area, such as the Chinese flagged [icebreaking] vessel XUE LONG, in the event they encountered difficulty. They also hired icebreaker captains with previous McMurdo experience to supplement the crew. NSF acquired these leases through a RFP process, and had no assurances that icebreakers would be available to perform the mission, or what price would be quoted. ", "This process came with risks, as there was no way to gauge icebreaker availability until NSF received responses to their RFP. Additionally, a foreign-flagged commercial or state vessel can become unavailable for a variety of environmental and political reasons. For example, the Swedish government abruptly terminated their contract during the spring/summer of 2011, and NSF was left without a platform to conduct its mission. NSF requested support from CGC [Coast Guard cutter] HEALY, but it was employed in the Arctic. NSF ultimately leased the Russian icebreaker VLADIMIR IGNATYUK. After that incident, NSF decided to utilize CGC POLAR STAR to support the McMurdo mission, which it has been doing since 2013."], "subsections": []}, {"section_title": "Aiviq Being Offered for Lease", "paragraphs": ["One ship that is being offered for lease to the Coast Guard as an interim polar icebreaker is Aiviq ( Figure 5 ), an Arctic oil-exploration support ship owned by Edison Chouest Offshore (ECO). The 361-foot-long ship was ordered in 2009, completed in 2012, and chartered by Royal Dutch Shell to support that company's effort (now ended) to explore for oil in Arctic waters. Following Shell's decision to end that effort, alternative uses for Aiviq have been sought. The ship has been modified to serve as a polar icebreaker, and it is being offered to the Coast Guard for lease as an interim polar icebreaker. It reportedly has also been offered for use as an icebreaker to the Canadian government.", "The possibility of leasing Aiviq as an interim polar icebreaker has been discussed at certain recent hearings about the Coast Guard. For example, at a July 25, 2017, hearing on Coast Guard capabilities before the Coast Guard and Maritime transportation subcommittee of the House Transportation and Infrastructure Committee, the following exchange occurred:", "REPRESENTATIVE DON YOUNG (continuing): ", "Have you looked at, Admiral, I know this has been an ongoing battle with me and the Coast Guard over the years, the other possibility of getting an ice breaker into the arena quicker than having one constructed like leasing from another outfit? You know, I've been talking about this a long time. Have you analyzed this again?", "I know the last time we had a study, it was 1980. That's a long time ago. So is there a way we can put metal on the water, especially for the new shipping through and the\u2014and the cruise ships, because that Healy is old, and\u2014is\u2014have you looked at that at all?", "ADMIRAL PAUL ZUKUNFT, [THEN-]COMMANDANT, U.S. COAST GUARD: ", "We have. In fact, one potential vendor, we've had multiple interactions. They have a platform that has yet to complete ice trials. We\u2014we would not want to lease something they can't demonstrate its ability to actually operate in the ice that\u2014that Healy sees. Healy was actually beset in ice for 36 hours last year, so it's not ice free up there, and that's a medium ice breaker. This particular platform doesn't have the capability of Healy.", "But we would at least want to make sure that ice trials were completed. That we could actually be a good steward of taxpayer dollars, so at least a platform that would meet our requirements. So we've had multiple interactions, the last one was probably in May, and the issue of ice trials is still on the table right now.", "Later in the same hearing, the following exchange occurred:", "REPRESENATIVE DUNCAN HUNTER, CHAIRMAN: ", "Going back to Mr. Young's question. too, about leasing. You said you\u2014you're\u2014you're waiting for\u2014I'm\u2014I'm guessing money for ice trials. That's what you said.", "ZUKUNFT: ", "No real dollars have been negotiated in any of this. So...", "HUNTER: ", "But in\u2014in real terms, you're only paying for gas? I mean what\u2014what does it cost to do ice trials. It's gas, right? You're not going to hire more Coast Guardsmen to come in and\u2014and do it. I mean so that's a figure\u2014your\u2014your overhead's fixed. So what is the cost to\u2014to go do ice trials with the (inaudible)?", "ZUKUNFT: ", "That would really be for the...", "HUNTER: ", "The ice\u2014once again the only...", "ZUKUNFT: ", "... vendor to decide.", "HUNTER: ", "... existing U.S. made ice breaker in America.", "ZUKUNFT: ", "Yeah. So this\u2014this is a ship that is built with direct drive diesel. Ice breakers are typically diesel electric, which means the generators push the shaft, and they absorb that shock load every time you collide with ice.", "A reduction gear, fixed gear is going to that\u2014that gear box is going to absorb all that shock. So if you're going to do ice trials, there's a likelihood you might have to replace a reduction gear. There might be real hidden costs of doing ice trials. So if I'm a vendor, I might want to protect myself from some of that risk.", "Now I'm not the vendor but those would be some of my thoughts of, OK, if you're really serious about this and I do ice trials and now I've just caused X number of dollars that I am now going to have to fit. And oh, by the way, you're not going to lease it because it didn't meet your requirements. I think those are some of the issues that we still have to negotiate.", "At a June 14, 2016, hearing on Coast Guard mission needs and resource allocation before the Coast Guard and Maritime Transportation subcommittee of the House Transportation and Infrastructure Committee, the following exchange occurred:", "REPRESENTATIVE HUNTER (Chairman):", "How do you plan on\u2014on filling the capability gap until you get a heavy icebreaker, which is 10 years at the least based on the best projections of Congress and everybody working together? You still haven't answered that one.", "ADMIRAL MICHEL: ", "Well, right\u2014the alternatives now, since we'll provide the answer to that, and it's probably going to be either a rolling recapitalization of the Polar Star or to try to bring\u2014let Polar Star taper off and then try to bring Polar Sea back on and bridge out to the new icebreaker.", "I do not know which one at this point, which path we would want to take. I'm not aware of any other\u2014we've looked out there for vessels to lease for heavy icebreaking capabilities. There's nothing out there on planet earth that you can lease in the heavy icebreaking area. So that's kind of where we are, sir.", "HUNTER: ", "Was it the\u2014the Finns that came into my office?", "(UNKNOWN) ", "Mm-hmm.", "HUNTER: ", "Can't remember whether we had the Norwegians or the Finns. I mean, they\u2014have you\u2014you've obviously looked at that, right?", "MICHEL: ", "Yes. As a matter of fact I\u2014I traveled to Sweden and Finland...", "HUNTER: ", "Yeah.", "MICHEL: ", "... and talked to them. And they do not have heavy icebreaking capability that will meet the needs as in the FedBizOpps. As a matter of fact, in\u2014when I'm talking FedBizOpps [I mean] there's a technical package that the Coast Guard put out for our [new] heavy icebreaker [i.e., the one that the Obama Administration wanted to begin building in 2020].", "It kind of lays out our basic requirements including the long pole in the tent which is the icebreaking requirement, which is six foot minimum at three knots, desirable eight-foot minimum at three knots and then 21 feet backing and ramming.", "When I talked to the shipbuilders over there, they said there is not a vessel like that that currently exists that will meet those requirements in the\u2014in the FedBizOpps technical package. So you'd have to build a vessel like that. And that's the type of vessel that we're looking for."], "subsections": []}]}]}]}, {"section_title": "Legislative Activity for FY2020", "paragraphs": [], "subsections": [{"section_title": "Summary of Appropriation Action on FY2020 Funding Request", "paragraphs": ["The Coast Guard's proposed FY2020 budget requests $35 million in Coast Guard procurement funding for the PSC program. Table 1 summarizes congressional appropriation action on the program's FY2019 funding request.", "Appendix A. Current U.S. Polar Icebreakers and Polar Research Ships", "This appendix provides background information on current U.S. polar icebreakers and polar research ships.", "Three Coast Guard Polar Icebreakers", "Two Heavy Polar Icebreakers\u2014Polar Star and Polar Sea", "Polar Star (WAGB-10) and Polar Sea (WAGB-11), sister ships built to the same general design ( Figure A-1 and Figure A-2 ), were acquired in the early 1970s as replacements for earlier U.S. icebreakers. They were designed for 30-year service lives, and were built by Lockheed Shipbuilding of Seattle, WA, a division of Lockheed that also built ships for the U.S. Navy, but which exited the shipbuilding business in the late 1980s.", "The ships are 399 feet long and displace about 13,200 tons. They are among the world's most powerful nonnuclear-powered icebreakers, with a capability to break through ice up to 6 feet thick at a speed of 3 knots. Because of their icebreaking capability, they are considered (in U.S. parlance) heavy polar icebreakers. In addition to a crew of 134, each ship can embark a scientific research staff of 32 people.", "Polar Star was commissioned into service on January 19, 1976, and consequently is now more than 10 years beyond its originally intended 30-year service life. Due to worn-out electric motors and other problems, the Coast Guard placed the ship in caretaker status on July 1, 2006. Congress in FY2009 and FY2010 provided funding to repair Polar Star and return it to service for 7 to 10 years; the repair work, which reportedly cost about $57 million, was completed, and the ship was reactivated on December 14, 2012.", "Polar Sea was commissioned into service on February 23, 1978, and consequently is also more than 10 years beyond its originally intended 30-year service life. In 2006, the Coast Guard completed a rehabilitation project that extended the ship's expected service life to 2014. On June 25, 2010, however, the Coast Guard announced that Polar Sea had suffered an engine casualty, and the ship was unavailable for operation after that. The Coast Guard placed Polar Sea in commissioned, inactive status on October 14, 2011. The Coast Guard transferred certain major equipment from Polar Sea to Polar Star to facilitate Polar Star' s return to service, and continues to use Polar Sea as a source of spare parts for Polar Star .", "One Medium Polar Icebreaker\u2014Healy", "Healy (WAGB-20) ( Figure A-3 ) was funded in the early 1990s as a complement to Polar Star and Polar Sea , and was commissioned into service on August 21, 2000. The ship was built by Avondale Industries, a shipyard located near New Orleans, LA, that built numerous Coast Guard and Navy ships, and which eventually became part of Huntington Ingalls Industries (HII). (HII subsequently wound down shipbuilding activities at Avondale, and the facility is no longer building ships.)", "Although it is referred to (in U.S. parlance) as a medium polar icebreaker, Healy is actually larger than Polar Star and Polar Sea \u2014it is 420 feet long and displaces about 16,000 tons. Compared to Polar Star and Polar Sea , Healy has less icebreaking capability (which is why it is referred to as a medium polar icebreaker rather than a heavy polar icebreaker), but more capability for supporting scientific research. The ship can break through ice up to 4\u00bd feet thick at a speed of 3 knots, and embark a scientific research staff of 35 (with room for another 15 surge personnel and 2 visitors). The ship is used primarily for supporting scientific research and conducting other operations in the Arctic.", "Three National Science Foundation (NSF) Polar Research Ships", "Nathaniel B. Palmer", "Nathaniel B. Palmer was built for the NSF in 1992 by North American Shipbuilding, of Larose, LA. Called Palmer for short, it is operated for NSF by Edison Chouest Offshore (ECO) of Galliano, LA, a firm that owns and operates research ships and offshore deepwater service ships. Palmer is 308 feet long and has a displacement of about 6,500 tons. It has a crew of 22 and can embark a scientific staff of 27 to 37. It was purpose-built as a single-mission ship for conducting and supporting scientific research in the Antarctic. It is capable of breaking ice up to 3 feet thick at speeds of 3 knots, which is sufficient for breaking through the ice conditions found in the vicinity of the Antarctic Peninsula, so as to resupply Palmer Station, a U.S. research station on the peninsula. The ship might be considered less an icebreaker than an oceanographic research ship with enough icebreaking capability for the Antarctic Peninsula. Palmer 's icebreaking capability is not considered sufficient to perform the McMurdo resupply mission.", "Laurence M. Gould", "Like Palmer , the polar research and supply ship Laurence M. Gould was built for NSF by North American Shipping. It was completed in 1997 and is operated for NSF on a long-term charter from ECO. It is 230 feet long and has a displacement of about 3,800 tons. It has a crew of 16 and can embark a scientific staff of 26 to 28 (with a capacity for 9 more in a berthing van). It can break ice up to 1 foot thick with continuous forward motion. Like Palmer , it was built to support NSF operations in the Antarctic, particularly operations at Palmer Station on the Antarctic Peninsula.", "Sikuliaq", "Sikuli a q (see-KOO-lee-auk), which is used for scientific research in polar areas, was built by Marinette Marine of Marinette, WI, and entered service in 2015. It is operated for NSF by the College of Fisheries and Ocean Sciences at the University of Alaska Fairbanks as part of the U.S. academic research fleet through the University National Oceanographic Laboratory System (UNOLS). Sikuliaq is 261 feet long and has a displacement of about 3,600 tons. It has a crew of 22 and can embark an additional 26 scientists and students. The ship can break ice 2\u00bd or 3 feet thick at speeds of 2 knots. The ship is considered less an icebreaker than an ice-capable research ship.", "Summary", " Table A-1 summarizes the above six ships. In addition to the ships shown in Table A-1 , another U.S.-registered polar ship with icebreaking capability\u2014 the Arctic oil-exploration support ship Aiviq \u2014was used by Royal Dutch Shell oil company to support an oil exploration and drilling effort (now ended) in Arctic waters off Alaska. The ship, which completed construction in 2012, is owned by ECO and chartered by Royal Dutch Shell. It was used primarily for towing and laying anchors for drilling rigs, but is also equipped for responding to oil spills.", "Appendix B. Required Numbers of U.S. Polar Icebreakers", "This appendix provides background information on required numbers of U.S. polar icebreakers.", "June 2013 DHS Polar Icebreaker Mission Need Statement ", "DHS in June 2013 approved a Mission Need Statement (MNS) for the polar icebreaker recapitalization project. The MNS states the following (emphasis added):", "This Mission Need Statement (MNS) establishes the need for polar icebreaker capabilities provided by the Coast Guard, to ensure that it can meet current and future mission requirements in the polar regions....", "Current requirements and future projections based upon cutter demand modeling, as detailed in the HLMAR [High Latitude Mission Analysis Report], indicate the Coast Guard will need to expand its icebreaking capacity, potentially requiring a fleet of up to six icebreakers (3 heavy and 3 medium) to adequately meet mission demands in the high latitudes .... The analysis took into account both the Coast Guard statutory mission requirements and additional requirements for year-round presence in both polar regions detailed in the Naval Operations Concept (NOC) 2010.... The analysis also evaluated employing single and multi-crewing concepts.... Strategic home porting analysis based upon existing infrastructure and distance to operational areas provided the final input to determine icebreaker capacity demand.", "While the MNS can be viewed as an authoritative U.S. government statement regarding required numbers of U.S. polar icebreakers, it can be noted that the key sentence in the above-quoted passage from the MNS (i.e., the sentence in bold) includes the terms \"potentially\" and \"up to.\" These terms, which are often overlooked in discussions of required numbers of U.S. polar icebreakers, make the key sentence less ironclad as a requirements statement than it would have been if the terms had not been included, and could be interpreted as an acknowledgment that the requirement might amount to something less than three heavy and three medium polar icebreakers.", "It can also be noted, as stated in the above-quoted passage from the MNS, that the MNS was informed by the High Latitude Mission Analysis Report (HILMAR), and that the HLMAR took into account not only Coast Guard statutory mission requirements, but additional Department of Defense (DOD) requirements for year-round presence in both polar regions as detailed in the 2010 Naval Operations Concept (NOC). This is potentially significant, because DOD appears to have subsequently dropped its 2010 requirement for year-round presence in the polar regions.", "The use in the MNS of the terms \"potentially\" and \"up to,\" combined with DOD's decision to drop its requirement for year-round presence in the polar regions, together raise a question, other things held equal, as to whether required numbers of U.S. polar icebreakers might be something less than three heavy and three medium polar icebreakers. It is also possible, however, that there have been other changes since the MNS was issued in 2013 that would have the effect, other things held equal, of increasing U.S. requirements for polar icebreakers. The net result of this situation appears uncertain.", "In recent years, Coast Guard officials have tended to refer simply to a total Coast Guard requirement for three heavy and three medium polar icebreakers. For example, in the October 25, 2016, summary of a request for information (RFI) that the Coast Guard released the next day to receive industry feedback on its notional polar icebreaker acquisition approach and schedule, the Coast Guard states that \"the United States Coast Guard has a need for three Heavy Polar Icebreakers and three Medium Polar Icebreakers with the priority being Heavy Polar Icebreakers.\" A requirement for three heavy and three medium polar icebreakers is often abbreviated as 3+3.", "Short of a 3+3 requirement, Coast Guard officials in the past have sometimes stated that, as a bare minimum number of heavy polar icebreakers, the Coast Guard needs two such ships. For example, at a November 17, 2015, hearing before the Europe, Eurasia, and Emerging Threats subcommittee and the Western Hemisphere subcommittee of the House Foreign Affairs Committee, then-Vice Admiral Charles Michel, the Vice Commandant of the Coast Guard, stated during the discussion portion of the hearing that the \"Coast Guard needs at least two heavy icebreakers to provide year-round assured access and self-rescueability in the polar regions.\" Similarly, at a June 14, 2016, hearing before the Coast Guard and Maritime Transportation subcommittee of the House Transportation and Infrastructure Committee, Admiral Michel testified that \"our commandant also testified that we need self-rescue capability for our heavy icebreaker and that includes the existing Polar Star that we have out there now. So that means at least two [ships], [and] the High Latitude study says three heavy polar icebreakers is what the Coast Guard's requirement is. So that's kind of where we're talking about for heavy icebreakers.\"", "A September 25, 2017, Government Accountability Office (GAO) report on polar icebreakers states that", "the Coast Guard has been unable to address all polar icebreaking requests since 2010. For example, the Coast Guard reported fulfilling 78 percent (25 of 32) of U.S. government agency requests for polar icebreaking services during fiscal year 2010 through 2016. Coast Guard officials cited various factors affecting the Coast Guard's ability to meet all requests, particularly the unavailability of its heavy polar icebreakers.", "A July 2018 GAO report stated that", "the Coast Guard operates one medium icebreaker, the Healy, which has an expected end of service life in 2029. Despite the requirement for three medium icebreakers, Coast Guard officials said they are not currently assessing acquisition of the medium polar icebreakers because they are focusing on the heavy icebreaker acquisition and plan to assess the costs and benefits of acquiring medium polar icebreakers at a later time.", "In addition to the HILMAR, a number of other studies have been conducted in recent years to assess U.S. requirements for polar icebreakers and options for sustaining and modernizing the Coast Guard's polar icebreaker fleet.", "Polar Icebreakers Operated by Other Countries", "In discussions of U.S. polar icebreakers, observers sometimes note the size of the polar icebreaking fleets operated by other countries. Table B-1 shows a Coast Guard summary of major icebreakers around the world; the figures in the table include some icebreakers designed for use in the Baltic Sea.", "Observers sometimes highlight the difference between the number of U.S. polar icebreakers and the much larger number of Russian polar icebreakers. In considering these relative numbers, it can be noted that Russia's Arctic coastline is much longer than the U.S. Arctic coastline, that many more people live in Russia's Arctic (about roughly 2 million) than in the U.S. Arctic (fewer than 68,000 as of July 1, 2017), and that maritime transportation along Russia's Arctic coast is critical for supporting numerous Russian Arctic communities. Countries with interests in the polar regions have differing requirements for polar icebreakers, depending on the nature and extent of their polar interests and activities.", "July 2017 National Academies (NASEM) Report", "A July 2017 report on the acquisition and operation of polar icebreakers by the National Academies of Sciences, Engineering, and Medicine (NASEM) that was directed by Congress in Section 604 of the Coast Guard Authorization Act of 2015 ( H.R. 4188 / P.L. 114-120 of February 8, 2016) concluded the following:", "INTRODUCTION", "The United States has strategic national interests in the polar regions. In the Arctic, the nation must protect its citizens, natural resources, and economic interests; assure sovereignty, defense readiness, and maritime mobility; and engage in discovery and research. In the Antarctic, the United States must maintain an active presence that includes access to its research stations for the peaceful conduct of science and the ability to participate in inspections as specified in the Antarctic Treaty. The committee's charge... was to advise the U.S. House of Representatives and the U.S. Senate on an assessment of the costs incurred by the federal government in carrying out polar icebreaking missions and on options that could minimize lifecycle costs. The committee's consensus findings and recommendations are presented below. Unless otherwise specified, all estimated costs and prices for the future U.S. icebreakers are expressed in 2019 dollars, since that is the year in which the contracts are scheduled to be made. Supporting material is found in the appendices.", "FINDINGS AND RECOMMENDATIONS", "1. Finding: The United States has insufficient assets to protect its interests, implement U.S. policy, execute its laws, and meet its obligations in the Arctic and Antarctic because it lacks adequate icebreaking capability.", "For more than 30 years, studies have emphasized the need for U.S. icebreakers to maintain presence, sovereignty, leadership, and research capacity\u2014but the nation has failed to respond....The strong warming and related environmental changes occurring in both the Arctic and the Antarctic have made this failure more critical. In the Arctic, changing sea ice conditions will create greater navigation hazards for much of the year, and expanding human industrial and economic activity will magnify the need for national presence in the region. In the Antarctic, sea ice trends have varied greatly from year to year, but the annual requirements for access into McMurdo Station have not changed. The nation is ill-equipped to protect its interests and maintain leadership in these regions and has fallen behind other Arctic nations, which have mobilized to expand their access to ice-covered regions. The United States now has the opportunity to move forward and acquire the capability to fulfill these needs....", "2. Recommendation: The United States Congress should fund the construction of four polar icebreakers of common design that would be owned and operated by the United States Coast Guard (USCG).", "The current Department of Homeland Security (DHS) Mission Need Statement (DHS 2013) contemplates a combination of medium and heavy icebreakers. The committee's recommendation is for a single class of polar icebreaker with heavy icebreaking capability. Proceeding with a single class means that only one design will be needed, which will provide cost savings. The committee has found that the fourth heavy icebreaker could be built for a lower cost than the lead ship of a medium icebreaker class....", "The DHS Mission Need Statement contemplated a total fleet of \"potentially\" up to six ships of two classes\u2014three heavy and three medium icebreakers. Details appear in the High Latitude Mission Analysis Report. The Mission Need Statement indicated that to fulfill its statutory missions, USCG required three heavy and three medium icebreakers; each vessel would have a single crew and would homeport in Seattle. The committee's analysis indicated that four heavy icebreakers will meet the statutory mission needs gap identified by DHS for the lowest cost. Three of the ships would allow continuous presence in the Arctic, and one would service the Antarctic.", "As noted in the High Latitude Report, USCG's employment standard is 185 days away from home port (DAFHP) for a single crew. Three heavy icebreakers in the Arctic provide 555 DAFHP, sufficient for continuous presence. In addition, the medium icebreaker USCG Cutter Healy's design service life runs through 2030. If greater capacity is required, USCG could consider operating three ships with four crews, which would provide 740 DAFHP. The use of multiple crews in the Arctic could require fewer ships while providing a comparable number of DAFHP. For example, two ships (instead of the recommended three) operating in the Arctic with multiple crews could provide a similar number of annual operating days at a lower cost, but such an arrangement may not permit simultaneous operations in both polar regions and may not provide adequate redundancy in capability. More important, an arrangement under which fewer boats are operated more often would require more major maintenance during shorter time in port, often at increasing cost. In addition, if further military presence is desired in the Arctic, USCG could consider ice-strengthening the ninth national security cutter.", "One heavy icebreaker servicing the Antarctic provides for the McMurdo breakout and international treaty verification. The availability of the vessel could be extended by homeporting in the Southern Hemisphere. If the single vessel dedicated to the Antarctic is rendered inoperable, USCG could redirect an icebreaker from the Arctic, or it could rely on support from other nations. The committee considers both options to be viable and believes it difficult to justify a standby (fifth) vessel for the Antarctic mission when the total acquisition and lifetime operating costs of a single icebreaker are projected to exceed $1.6 billion. Once the four new icebreakers are operational, USCG can reasonably be expected to plan for more distant time horizons. USCG could assess the performance of the early ships once they are operational and determine whether additional capacity is needed.", "USCG is the only agency of the U.S. government that is simultaneously a military service, a law enforcement agency, a marine safety and rescue agency, and an environmental protection agency. All of these roles are required in the mission need statement for a polar icebreaker. USCG, in contrast to a civilian company, has the authorities, mandates, and competencies to conduct the missions contemplated for the polar icebreakers. Having one agency with a multimission capability performing the range of services needed would be more efficient than potentially duplicating effort by splitting polar icebreaker operations among other agencies.", "The requirement for national presence is best accomplished with a military vessel. In addition, USCG is fully interoperable with the U.S. Navy and the nation's North Atlantic Treaty Organization partners. USCG is already mandated to operate the nation's domestic and polar icebreakers. Continuing to focus this expertise in one agency remains the logical approach.... ", "Government ownership of new polar icebreakers would be less costly than the use of lease financing (see Appendix C). The government has a lower borrowing cost than any U.S.-based leasing firm or lessor. In addition, the lessor would use higher-cost equity (on which it would expect to make a profit) to cover a portion of the lease financing. The committee's analysis shows that direct purchase by the government would cost, at a minimum, 19 percent less than leasing on a net present value basis (after tax). There is also the risk of the lessor going bankrupt and compromising the availability of the polar icebreaker to USCG. For its analysis, the committee not only relied on its extensive experience with leveraged lease financing but also reviewed available Government Accountability Office reports and Office of Management and Budget rules, examined commercial leasing economics and current interest rates, and validated its analysis by consulting an outside expert on the issue....", "Chartering (an operating lease) is not a viable option.... The availability of polar icebreakers on the open market is extremely limited. (The committee is aware of the sale of only one heavy icebreaker since 2010.) U.S. experience with chartering a polar icebreaker for the McMurdo resupply mission has been problematic on two prior charter attempts. Chartering is workable only if the need is short term and mission specific. The committee notes that chartering may preclude USCG from performing its multiple missions....", "In the committee's judgment, an enlarged icebreaker fleet will provide opportunities for USCG to strengthen its icebreaking program and mission. Although the number of billets that require an expert is small compared with the overall number of billets assigned to these icebreakers, more people performing this mission will increase the pool of experienced candidates. This will provide personnel assignment officers with a larger pool of candidates when the more senior positions aboard icebreakers are designated, which will make icebreaking more attractive as a career path and increase the overall level of icebreaking expertise within USCG. Importantly, the commonality of design of the four recommended heavy icebreakers will reduce operating and maintenance costs over the service life of these vessels through efficiencies in supporting and crewing them. Having vessels of common design will likely improve continuity of service, build icebreaking competency, improve operational effectiveness, and be more cost-efficient.... ", "3. Recommendation: USCG should follow an acquisition strategy that includes block buy contracting with a fixed price incentive fee contract and take other measures to ensure best value for investment of public funds.", "Icebreaker design and construction costs can be clearly defined, and a fixed price incentive fee construction contract is the most reliable mechanism for controlling costs for a program of this complexity. This technique is widely used by the U.S. Navy. To help ensure best long-term value, the criteria for evaluating shipyard proposals should incorporate explicitly defined lifecycle cost metrics....", "A block buy authority for this program will need to contain specific language for economic order quantity purchases for materials, advanced design, and construction activities. A block buy contracting program with economic order quantity purchases enables series construction, motivates competitive bidding, and allows for volume purchase and for the timely acquisition of material with long lead times. It would enable continuous production, give the program the maximum benefit from the learning curve, and thus reduce labor hours on subsequent vessels.", "The acquisition strategy would incorporate (a) technology transfer from icebreaker designers and builders with recent experience, including international expertise in design, construction, and equipment manufacture; (b) a design that maximizes use of commercial off-the-shelf (COTS) equipment, applies Polar Codes and international standards, and only applies military specifications (MIL-SPEC) to the armament, aviation, communications, and navigation equipment; (c) reduction of any \"buy American\" provisions to allow the sourcing of the most", "suitable and reliable machinery available on the market; and (d) a program schedule that allows for completion of design and planning before the start of construction. These strategies will allow for optimization of design, reduce construction costs, and enhance reliability and maintainability.... ", "4. Finding: In developing its independent concept designs and cost estimates, the committee determined that the costs estimated by USCG for the heavy icebreaker are reasonable. However, the committee believes that the costs of medium icebreakers identified in the High Latitude Mission Analysis Report are significantly underestimated.", "The committee estimates the rough order-of-magnitude (ROM) cost of the first heavy icebreaker to be $983 million. (See Appendix D, Table D-6.) Of these all-in costs, 75 to 80 percent are shipyard design and construction costs; the remaining 20 to 25 percent cover government-incurred costs such as government-furnished equipment and government-incurred program expenses. If advantage is taken of learning and quantity discounts available through the recommended block buy contracting acquisition strategy, the average cost per heavy icebreaker is approximately $791 million, on the basis of the acquisition of four ships. The committee's analysis of the ship size to incorporate the required components (stack-up length) suggests an overall length of 132 meters (433 feet) and a beam of 27 meters (89 feet). This is consistent with USCG concepts for the vessel.", "Costs can be significantly reduced by following the committee's recommendations. Reduction of MIL-SPEC requirements can lower costs by up to $100 million per ship with no loss of mission capability.... The other recommended acquisition, design, and construction strategies will control possible cost overruns and provide significant savings in overall life-cycle costs for the program.", "Although USCG has not yet developed the operational requirements document for a medium polar icebreaker, the committee was able to apply the known principal characteristics of the USCG Cutter Healy to estimate the scope of work and cost of a similar medium icebreaker. The committee estimates that a first-of-class medium icebreaker will cost approximately $786 million. The fourth ship of the heavy icebreaker series is estimated to cost $692 million. Designing a medium-class polar icebreaker in a second shipyard would incur the estimated engineering, design, and planning costs of $126 million and would forgo learning from the first three ships; the learning curve would be restarted with the first medium design. Costs of building the fourth heavy icebreaker would be less than the costs of designing and building a first-of-class medium icebreaker... . In developing its ROM cost estimate, the committee agreed on a common notional design and basic assumptions.... Two committee members then independently developed cost estimating models, which were validated internally by other committee members. These analyses were then used to establish the committee's primary cost estimate....", "5. Finding: Operating costs of new polar icebreakers are expected to be lower than those of the vessels they replace.", "The committee expects the operating costs for the new heavy polar icebreakers to be lower than those of USCG's Polar Star. While USCG's previous experience is that operating costs of new cutters are significantly higher than those of the vessels they replace, the committee does not believe this historical experience applies in this case. There is good reason to believe that operating costs for new ships using commercially available modern technology will be lower than costs for existing ships.... The more efficient hull forms and modern engines will reduce fuel consumption, and a well-designed automation plant will require fewer operation and maintenance personnel, which will allow manning to be reduced or freed up for alternative tasks. The use of COTS technology and the minimization of MIL-SPEC, as recommended, will also reduce long-term maintenance costs, since use of customized equipment to meet MIL-SPEC requirements can reduce reliability and increase costs. A new vessel, especially over the first 10 years, typically has significantly reduced major repair and overhaul costs, particularly during dry-dock periods, compared with existing icebreakers\u2014such as the Polar Star\u2014that are near or at the end of their service life.... The Polar Star has many age-related issues that require it to be extensively repaired at an annual dry-docking. These issues will be avoided in the early years of a new ship. However, the committee recognizes that new ship operating costs can be higher than those of older ships if the new ship has more complexity to afford more capabilities. Therefore, any direct comparisons of operating costs of newer versus older ships would need to take into account the benefits of the additional capabilities provided by the newer ship.", "USCG will have an opportunity to evaluate the manning levels of the icebreaker in light of the benefits of modern technology to identify reductions that can be made in operating costs.... ", "6. Recommendation: USCG should ensure that the common polar icebreaker design is science-ready and that one of the ships has full science capability.", "All four proposed ships would be designed as \"science-ready,\" which will be more cost-effective when one of the four ships\u2014most likely the fourth\u2014is made fully science capable. Including science readiness in the common polar icebreaker design is the most cost-effective way of fulfilling both the USCG's polar missions and the nation's scientific research polar icebreaker needs.... The incremental costs of a science-ready design for each of the four ships ($10 million to $20 million per ship) and of full science capability for one of the ships at the initial build (an additional $20 million to $30 million) are less than the independent design and build cost of a dedicated research medium icebreaker.... In briefings at its first meeting, the committee learned that the National Science Foundation and other agencies do not have budgets to support full-time heavy icebreaker access or the incremental cost of design, even though their science programs may require this capability. Given the small incremental cost, the committee believes that the science capability cited above should be included in the acquisition costs.", "Science-ready design includes critical elements that cannot be retrofitted cost-effectively into an existing ship and that should be incorporated in the initial design and build. Among these elements are structural supports, appropriate interior and exterior spaces, flexible accommodation spaces that can embark up to 50 science personnel, a hull design that accommodates multiple transducers and minimizes bubble sweep while optimizing icebreaking capability, machinery arrangements and noise dampening to mitigate interference with sonar transducers, and weight and stability latitudes to allow installation of scientific equipment. Such a design will enable any of the ships to be retrofitted for full science capability in the future, if necessary....", "Within the time frame of the recommended build sequence, the United States will require a science-capable polar icebreaker to replace the science capabilities of the Healy upon her retirement. To fulfill this need, one of the heavy polar icebreakers would be procured at the initial build with full science capability; the ability to fulfill other USCG missions would be retained. The ship would be outfitted with oceanographic overboarding equipment and instrumentation and facilities comparable with those of modern oceanographic research vessels. Some basic scientific capability, such as hydrographic mapping sonar, should be acquired at the time of the build of each ship so that environmental data that are essential in fulfilling USCG polar missions can be collected.", "7. Finding: The nation is at risk of losing its heavy polar icebreaking capability\u2014experiencing a critical capacity gap\u2014as the Polar Star approaches the end of its extended service life, currently estimated at 3 to 7 years.", "The Polar Star, built in 1976, is well past its 30-year design life. Its reliability will continue to decline, and its maintenance costs will continue to escalate. Although the ship went through an extensive life-extending refit in 2011\u20132012, the Polar Star's useful life is estimated to end between 2020 and 2024. As USCG has recognized, the evaluation of alternative arrangements to secure polar icebreaking capacity is important, given the growing risks of the Polar Star losing its capability to fulfill its mission....", "8. Recommendation: USCG should keep the Polar Star operational by implementing an enhanced maintenance program (EMP) until at least two new polar icebreakers are commissioned.", "Even if the committee's notional schedule for new polar icebreakers is met, the second polar icebreaker would not be ready until July 2025.... The committee's proposed EMP could be designed with planned\u2014and targeted\u2014upgrades that allow the Polar Star to operate every year for its Antarctic mission. The necessary repairs could be performed in conjunction with the ship's current yearly dry-docking schedule within existing annual expenditures, estimated to average $5 million. In particular, the EMP would require improvements in the ship's operating systems, sanitary system, evaporators, main propulsion systems, and controllable pitch propellers. In the committee's judgment, the EMP could be accomplished within USCG's average annual repair expenditures for the Polar Star, which currently range between $2 million and $9 million.", "Coast Guard High Latitude Study Provided to Congress in July\u00a02011", "In July 2011, the Coast Guard provided to Congress a study on the Coast Guard's missions and capabilities for operations in high-latitude (i.e., polar) areas. The study, commonly known as the High Latitude Study, is dated July 2010 on its cover. The High Latitude Study concluded the following:", "[The study] concludes that future capability and capacity gaps will significantly impact four [Coast Guard] mission areas in the Arctic: Defense Readiness, Ice Operations, Marine Environmental Protection, and Ports, Waterways, and Coastal Security. These mission areas address the protection of important national interests in a geographic area where other nations are actively pursuing their own national goals....", "The common and dominant contributor to these significant mission impacts is the gap in polar icebreaking capability. The increasing obsolescence of the Coast Guard's icebreaker fleet will further exacerbate mission performance gaps in the coming years....", "The gap in polar icebreaking capacity has resulted in a lack of at-sea time for crews and senior personnel and a corresponding gap in training and leadership. In addition to providing multi-mission capability and intrinsic mobility, a helicopter-capable surface unit would eliminate the need for acquiring an expensive shore-based infrastructure that may only be needed on a seasonal or occasional basis. The most capable surface unit would be a polar icebreaker. Polar icebreakers can transit safely in a variety of ice conditions and have the endurance to operate far from logistics bases. The Coast Guard's polar icebreakers have conducted a wide range of planned and unscheduled Coast Guard missions in the past. Polar icebreakers possess the ability to carry large numbers of passengers, cargo, boats, and helicopters. Polar icebreakers also have substantial command, control, and communications capabilities. The flexibility and mobility of polar icebreakers would assist the Coast Guard in closing future mission performance gaps effectively....", "Existing capability and capacity gaps are expected to significantly impact future Coast Guard performance in two Antarctic mission areas: Defense Readiness and Ice Operations. Future gaps may involve an inability to carry out probable and easily projected mission requirements, such as the McMurdo resupply, or readiness to respond to less-predictable events. By their nature, contingencies requiring the use of military capabilities often occur quickly. As is the case in the Arctic, the deterioration of the Coast Guard's icebreaker fleet is the primary driver for this significant mission impact. This will further widen mission performance gaps in the coming years. The recently issued Naval Operations Concept 2010 requires a surface presence in both the Arctic and Antarctic. This further exacerbates the capability gap left by the deterioration of the icebreaker fleet....", "The significant deterioration of the Coast Guard icebreaker fleet and the emerging mission demands to meet future functional requirements in the high latitude regions dictate that the Coast Guard acquire material solutions to close the capability gaps....", "To meet the Coast Guard mission functional requirement, the Coast Guard icebreaking fleet must be capable of supporting the following missions:", "Arctic North Patrol. Continuous multimission icebreaker presence in the Arctic.", "Arctic West Science. Spring and summer science support in the Arctic.", "Antarctic, McMurdo Station resupply. Planned deployment for break-in, supply ship escort, and science support. This mission, conducted in the Antarctic summer, also requires standby icebreaker support for backup in the event the primary vessel cannot complete the mission.", "Thule Air Base Resupply and Polar Region Freedom of Navigation Transits. Provide vessel escort operations in support of the Military Sealift Command's Operation Pacer Goose; then complete any Freedom of Navigation exercises in the region.", "In addition, the joint Naval Operations Concept establishes the following mission requirements:", "Assured access and assertion of U.S. policy in the Polar Regions. The current demand for this mission requires continuous icebreaker presence in both Polar Regions.", "Considering these missions, the analysis yields the following findings:", "The Coast Guard requires three heavy and three medium icebreakers to fulfill its statutory missions. These icebreakers are necessary to (1) satisfy Arctic winter and transition season demands and (2) provide sufficient capacity to also execute summer missions. Single-crewed icebreakers have sufficient capacity for all current and expected statutory missions. Multiple crewing provides no advantage because the number of icebreakers required is driven by winter and shoulder season requirements. Future use of multiple or augmented crews could provide additional capacity needed to absorb mission growth.", "The Coast Guard requires six heavy and four medium icebreakers to fulfill its statutory missions and maintain the continuous presence requirements of the Naval Operations Concept. Consistent with current practice, these icebreakers are single-crewed and homeported in Seattle Washington.", "Applying crewing and home porting alternatives reduces the overall requirement to four heavy and two medium icebreakers. This assessment of nonmaterial solutions shows that the reduced number of icebreakers can be achieved by having all vessels operate with multiple crews and two of the heavy icebreakers homeporting in the Southern Hemisphere.", "Leasing was also considered as a nonmaterial solution. While there is no dispute that the Coast Guard's polar icebreaker fleet is in need of recapitalization, the decision to acquire this capability through purchase of new vessels, reconstruction of existing ships, or commercial lease of suitable vessels must be resolved to provide the best value to the taxpayer. The multi-mission nature of the Coast Guard may provide opportunities to conduct some subset of its missions with non government-owned vessels. However, serious consideration must be given to the fact that the inherently governmental missions of the Coast Guard must be performed using government-owned and operated vessels. An interpretation of the national policy is needed to determine the resource level that best supports the nation's interests....", "The existing icebreaker capacity, two inoperative heavy icebreakers and an operational medium icebreaker, does not represent a viable capability to the federal government. The time needed to augment this capability is on the order of 10 years. At that point, around 2020, the heavy icebreaking capability bridging strategy expires.", "At a July 27, 2011, hearing on U.S. economic interests in the Arctic before the Oceans, Atmosphere, Fisheries, and Coast Guard subcommittee of the Senate Commerce, Science, and Transportation Committee, the following exchange occurred:", "SENATOR OLYMPIA J. SNOWE: On the high latitude study, do you agree with\u2014and those\u2014I would like to also hear from you, Admiral Titley, as well, on these requirements in terms of Coast Guard vessels as I understand it, they want to have\u2014I guess, it was a three medium ice breakers. Am in correct in saying that? Three medium ice breakers.", "ADMIRAL ROBERT PAPP, COMMANDANT OF THE COAST GUARD: I agree with the mission analysis and as you look at the requirements for the things that we might do up there, if it is in the nation's interest, it identifies a minimum requirement for three heavy ice breakers and three medium ice breakers and then if you want a persistent presence up there, it would require\u2014and also doing things such as breaking out (inaudible) and other responsibilities, then it would take up to a maximum six heavy and four medium.", "SNOWE: Right. Do you agree with that?", "PAPP: If we were to be charged with carrying out those full responsibilities, yes, ma'am. Those are the numbers that you would need to do it.", "SNOWE: Admiral Titley, how would you respond to the high latitude study and has the Navy conducted its own assessment of its capability?", "REAR ADMIRAL DAVID TITLEY, OCEANORGRAPHER AND NAVIGATOR OF THE NAVY: Ma'am, we are in the process right now of conducting what we call a capabilities based assessment that will be out in the summer of this year.", "We are getting ready to finish that\u2014the Coast Guard has been a key component of the Navy's task force on climate change, literally since day one when the Chief of Naval Operations set this up, that morning, we had the Coast Guard invited as a member of our executive steering committee.", "So we have been working very closely with the Coast Guard, with the Department of Homeland Security, and I think Admiral Papp\u2014said it best as far as the specific comments on the high latitude study but we have been working very closely with the Coast Guard.", "January 2011 DHS Office of Inspector General Report", "A January 2011 report on the Coast Guard's polar icebreakers from the DHS Office of the Inspector General stated the following:", "The Coast Guard does not have the necessary budgetary control over its [polar] icebreakers, nor does it have a sufficient number of icebreakers to accomplish its missions in the Polar Regions. Currently, the Coast Guard has only one operational [polar] icebreaker [i.e., Healy ], making it necessary for the United States to contract with foreign nations to perform scientific, logistical, and supply activities. Without the necessary budgetary control and a sufficient number of icebreaking assets, the Coast Guard will not have the capability to perform all of its missions, will lose critical icebreaking expertise, and may be beholden to foreign nations to perform its statutory missions. The Coast Guard should improve its strategic approach to ensure that it has the long-term icebreaker capabilities needed to support Coast Guard missions and other national interests in the Arctic and Antarctic regions.", "Regarding current polar icebreaking capabilities for performing Arctic missions, the report states the following:", "The Coast Guard's icebreaking resources are unlikely to meet future demands. [The table below] outlines the missions that Coast Guard is unable to meet in the Arctic with its current icebreaking resources.", "The report also states the following:", "Should the Coast Guard not obtain funding for new icebreakers or major service life extensions for its existing icebreakers with sufficient lead-time, the United States will have no heavy icebreaking capability beyond 2020 and no polar icebreaking capability of any kind by 2029. Without the continued use of icebreakers, the United States will lose its ability to maintain a presence in the Polar Regions, the Coast Guard's expertise to perform ice operations will continue to diminish, and missions will continue to go unmet.", "Regarding current polar icebreaking capabilities for performing Antarctic missions, the report states the following:", "The Coast Guard needs additional icebreakers to accomplish its missions in the Antarctic. The Coast Guard has performed the McMurdo Station resupply in Antarctica for decades, but with increasing difficulty in recent years. The Coast Guard's two heavy-duty icebreakers [i.e., Polar Star and Polar Sea ] are at the end of their service lives, and have become less reliable and increasingly costly to keep in service....", "In recent years, the Coast Guard has found that ice conditions in the Antarctic have become more challenging for the resupply of McMurdo Station. The extreme ice conditions have necessitated the use of foreign vessels to perform the McMurdo break-in....", "As ice conditions continue to change around the Antarctic, two icebreakers are needed for the McMurdo break-in and resupply mission. Typically, one icebreaker performs the break-in and the other remains on standby. Should the first ship become stuck in the ice or should the ice be too thick for one icebreaker to complete the mission, the Coast Guard deploys the ship on standby. Since the Polar Sea and Polar Star are not currently in service, the Coast Guard has no icebreakers capable of performing this mission. [The table below] outlines the missions that will not be met without operational heavy-duty icebreakers.", "The report's conclusion and recommendations were as follows:", "Conclusion", "With an aging fleet of three icebreakers, one operational and two beyond their intended 30-year service life, the Coast Guard is at a critical crossroads in its Polar Icebreaker Maintenance, Upgrade, and Acquisition Program. It must clarify its mission requirements, and if the current mission requirements remain, the Coast Guard must determine the best method for meeting these requirements in the short and long term.", "Recommendations", "We recommend that the Assistant Commandant for Marine Safety, Security, and Stewardship:", "Recommendation #1: Request budgetary authority for the operation, maintenance, and upgrade of its icebreakers.", "Recommendation #2: In coordination with the Department of Homeland Security, request clarification from Congress to determine whether Arctic missions should be performed by Coast Guard assets or contracted vessels.", "Recommendation #3: In coordination with the Department of Homeland Security, request clarification from Congress to determine whether Antarctic missions should be performed by Coast Guard assets or contracted vessels.", "Recommendation #4: Conduct the necessary analysis to determine whether the Coast Guard should replace or perform service-life extensions on its two existing heavy-duty icebreaking ships.", "Recommendation #5: Request appropriations necessary to meet mission requirements in the Arctic and Antarctic.", "The report states that ", "The Coast Guard concurred with all five of the recommendations and is initiating corrective actions. We consider the recommendations open and unresolved. The Coast Guard provided information on some of its ongoing projects that will address the program needs identified in the report.", "2010 U.S. Arctic Research Commission Report", "A May 2010 report from the U.S. Arctic Research Commission (USARC) on goals and objectives for Arctic research for 2009-2010 stated the following:", "To have an effective Arctic research program, the United States must invest in human capital, research platforms, and infrastructure, including new polar class icebreakers, and sustained sea, air, land, space, and social observing systems.... The Commission urges the President and Congress to commit to replacing the nation's two polar class icebreakers.", "2007 National Research Council Report", "A 2007 National Research Council (NRC) report, Polar Icebreakers in a Changing World: An Assessment of U.S. Needs , assessed roles and future needs for Coast Guard polar icebreakers. The study was required by report language accompanying the FY2005 DHS appropriations act ( H.R. 4567 / P.L. 108-334 ). The study was completed in 2006 and published in 2007. Some sources refer to the study as the 2006 NRC report. The report made the following conclusions and recommendations:", "Based on the current and future needs for icebreaking capabilities, the [study] committee concludes that the nation continues to require a polar icebreaking fleet that includes a minimum of three multimission ships [like the Coast Guard's three current polar icebreakers] and one single-mission [research] ship [like Palmer]. The committee finds that although the demand for icebreaking capability is predicted to increase, a fleet of three multimission and one single-mission icebreakers can meet the nation's future polar icebreaking needs through the application of the latest technology, creative crewing models, wise management of ice conditions, and more efficient use of the icebreaker fleet and other assets. The nation should immediately begin to program, design, and construct two new polar icebreakers to replace the POLAR STAR and POLAR SEA.", "Building only one new polar icebreaker is insufficient for several reasons. First, a single ship cannot be in more than one location at a time. No matter how technologically advanced or efficiently operated, a single polar icebreaker can operate in the polar regions for only a portion of any year. An icebreaker requires regular maintenance and technical support from shipyards and industrial facilities, must reprovision regularly, and has to effect periodic crew changeouts. A single icebreaker, therefore, could not meet any reasonable standard of active and influential presence and reliable, at-will access throughout the polar regions.", "A second consideration is the potential risk of failure in the harsh conditions of polar operations. Despite their intrinsic robustness, damage and system failure are always a risk and the U.S. fleet must have enough depth to provide backup assistance. Having only a single icebreaker would necessarily require the ship to accept a more conservative operating profile, avoiding more challenging ice conditions because reliable assistance would not be available. A second capable icebreaker, either operating elsewhere or in homeport, would provide ensured backup assistance and allow for more robust operations by the other ship.", "From a strategic, longer-term perspective, two new Polar class icebreakers will far better position the nation for the increasing challenges emerging in both polar regions. A second new ship would allow the U.S. Coast Guard to reestablish an active patrol presence in U.S. waters north of Alaska to meet statutory responsibilities that will inevitably derive from increased human activity, economic development, and environmental change. It would allow response to emergencies such as search-and-rescue cases, pollution incidents, and assistance to ships threatened with grounding or damage by ice. Moreover, a second new ship will leverage the possibilities for simultaneous operations in widely disparate geographic areas (e.g., concurrent operations in the Arctic and Antarctic), provide more flexibility for conducting Antarctic logistics (as either the primary or the secondary ship for the McMurdo break-in), allow safer multiple-ship operations in the most demanding ice conditions, and increase opportunities for international expeditions. Finally, an up-front decision to build two new polar icebreakers will allow economies in the design and construction process and provide a predictable cost reduction for the second ship....", "The [study] committee finds that both operations and maintenance of the polar icebreaker fleet have been underfunded for many years, and the capabilities of the nation's icebreaking fleet have diminished substantially. Deferred long-term maintenance and failure to execute a plan for replacement or refurbishment of the nation's icebreaking ships have placed national interests in the polar regions at risk. The nation needs the capability to operate in both polar regions reliably and at will. Specifically, the committee recommends the following:", "The United States should continue to project an active and influential presence in the Arctic to support its interests. This requires U.S. government polar icebreaking capability to ensure year-round access throughout the region.", "The United States should continue to project an active and influential presence in the Antarctic to support its interests. The nation should reliably control sufficient icebreaking capability to break a channel into and ensure the maritime resupply of McMurdo Station.", "The United States should maintain leadership in polar research. This requires icebreaking capability to provide access to the deep Arctic and the ice-covered waters of the Antarctic.", "National interests in the polar regions require that the United States immediately program, budget, design, and construct two new polar icebreakers to be operated by the U.S. Coast Guard.", "To provide continuity of U.S. icebreaking capabilities, the POLAR SEA should remain mission capable and the POLAR STAR should remain available for reactivation until the new polar icebreakers enter service.", "The U.S. Coast Guard should be provided sufficient operations and maintenance budget to support an increased, regular, and influential presence in the Arctic. Other agencies should reimburse incremental costs associated with directed mission tasking.", "Polar icebreakers are essential instruments of U.S. national policy in the changing polar regions. To ensure adequate national icebreaking capability into the future, a Presidential Decision Directive should be issued to clearly align agency responsibilities and budgetary authorities.", "The Coast Guard stated in 2008 that it \"generally supports\" the NRC report, and that the Coast Guard \"is working closely with interagency partners to determine a way forward with national polar policy that identifies broad U.S. interests and priorities in the Arctic and Antarctic that will ensure adequate maritime presence to further these interests. Identification and prioritization of U.S. national interests in these regions should drive development of associated USCG [U.S. Coast Guard] capability and resource requirements.\" The Coast Guard also stated the following: \"Until those broad U.S. interests and priorities are identified, the current USG [U.S. Government] polar icebreaking fleet should be maintained in an operational status.\"", "Appendix C. PSC Program Funding", "This appendix presents additional background information on funding for the PSC program.", "Summary of Funding in FY2013-FY2020 Budget Submissions", " Table C-1 shows requested and projected funding for the PSC program in the Coast Guard's budget submissions from the initiation of the PSC program in the FY2013 submission through the FY2020 submission.", "The reduction in programmed five-year funding for a new polar icebreaker during the FY2014-FY2016 budget submissions shown in Table C-1 appears to have been related to the substantial reduction in the annual funding levels in the Coast Guard's Acquisition, Construction, and Improvements (AC&I) account in those budget submission that is shown in Table C-2 . Prior to the release of the Administration's September 1, 2015, fact sheet, the Coast Guard testified that if annual funding levels in the AC&I account were not increased from the reduced levels in those budget submissions, the icebreaker would be, essentially, an unfunded requirement. For example, at an April 28, 2015, hearing on Coast Guard resources and priorities before the Oceans, Atmosphere, Fisheries, and Coast Guard subcommittee of the Senate Commerce, Science, and Transportation Committee, Admiral Paul Zukunft, the then-Commandant of the Coast Guard, testified that", "by reactivating Polar Star, we have purchased up to 10 years of decision space to recapitalize our ice-breaking fleet. Two of those years have expired. And while I'm exploring several options to reconstitute our nation's fleet of icebreakers, I will need topline relief [i.e., an increase] in my acquisition budget to make this requirement a reality.", "For additional discussion of the issue of the funding level of the Procurement, Construction, and Improvements (PC&I) account, see Appendix D . Below are some additional details on each of the budget submissions since the FY2013 submission.", "FY2013 Submission", "The Administration's FY2013 budget submission initiated a new project for the design and construction of a new polar icebreaker, and included $860 million over five years for the acquisition of the ship ( Table C-1 )\u2014enough or almost enough to fully fund the acquisition of a new polar icebreaker. (Any remaining needed funding might have been projected for FY2018 and perhaps also FY2019, which were beyond the five-year window of the FY2013 budget submission.) The submission stated that DHS anticipated awarding a construction contract for the ship \"within the next five years\" (i.e., by FY2018) and taking delivery on the ship \"within a decade\" (i.e., by 2023).", "FY2014 Submission", "The Administration's FY2014 budget submission reduced the five-year funding for a new polar icebreaker to $230 million ( Table C-1 )\u2014a 73% reduction from the figure in the FY2013 budget submission\u2014but still stated that DHS anticipated awarding a construction contract for the ship \"within the next four years\" (i.e., by FY2018).", "FY2015 Submission", "The Administration's FY2015 budget submission maintained five-year funding for a new polar icebreaker at $230 million ( Table C-1 ), but did not state when a construction contract for the ship might be awarded, creating uncertainty about the timing of the project.", "FY2016 Submission", "The Administration's FY2016 budget submission, submitted to Congress in February 2015, reduced five-year funding for a new polar icebreaker further, to $166 million ( Table C-1 )\u2014an 81% reduction from the figure in the FY2013 budget submission\u2014and again did not state when a construction contract for the ship might be awarded, maintaining the uncertainty about the timing of the project.", "On September 1, 2015, the White House issued a fact sheet in conjunction with a visit to Alaska by President Obama indicating that the Administration, in its own internal planning, had at some point over the past two years deferred acquisition of a new polar icebreaker to FY2022, but that this had been changed to FY2020. The newly announced construction start date of FY2020 was a two-year acceleration from the previously unpublicized date of FY2022, and a two-year deferral from the FY2018 date implied in the FY2013 and FY2014 budget submissions. The fact sheet states that the Administration will also \"begin planning for construction of additional icebreakers\" beyond the one that the Obama Administration proposed to begin building in FY2020.", "On January 13, 2016, the Coast Guard announced that it intended to hold an industry day for the PSC program, followed by one-on-one meetings between the Coast Guard and prospective shipbuilders and ship designers, as a part of the Coast Guard's ongoing market research for the program. The industry day was held on March 18, 2016, and the one-on-one meetings between the Coast Guard and industry officials were scheduled for March 28-31, with industry feedback to be submitted to the Coast Guard by April 5, 2016.", "FY2017 Submission", "The Coast Guard's proposed FY2017 budget requested $150 million in procurement funding for a new polar icebreaker. The figure of $150 million included $147.6 million in the polar icebreaker line of the Coast Guard's Acquisition, Construction, and Improvements (AC&I) account, and $2.4 million that was embedded in the personnel and management line in the AC&I account. The Coast Guard's FY2017-FY2021 five-year Capital Investment Plan (CIP) included a total of $780 million in procurement funding for a new polar icebreaker. As shown in Table C-1 , the $150 million requested for FY2017 was the first major increment of procurement funding requested (not just projected for a future fiscal year) for a new polar icebreaker.", "FY2018 Submission", "The Coast Guard's proposed FY2018 budget requested $19 million in procurement funding for a new polar icebreaker and includes a total of $949 million over the five-year period FY2018-FY2022. The Coast Guard states that", "This request supports activities to complete and release a Request for Proposal (RFP) for Detail Design and Construction in FY 2018. Specifically, this funding supports program-wide activities including open water and ice tank model testing; review of Industry Studies contract deliverables; Integrated Program Office (IPO) and Ship Design Team (SDT) support; logistics and integration development for government furnished information and equipment; and additional modeling efforts to inform the evaluation and source selection process for the Detail Design & Construction RFP....", "Currently, the Program is maturing the system specification, developing the RFP for Detail Design & Construction, and completing required documentation to transition to the \"Obtain\" phase - planned for early FY 2018. In July 2016, the Coast Guard established an Integrated Program Office with the Navy to continue efforts to accelerate the construction timeline and leverage the expertise and best practices from shipbuilding programs in both services. Based on this collaboration and lessons learned by the Navy, the Program was able to significantly mature the acquisition approach with the incorporation of Industry Studies to identify solutions to minimize cost, schedule, production and technology risks. Industry Studies are focusing on leveraging industry perspectives, existing vessel designs, and use of mature technology to inform the iterative development of the Heavy Polar Icebreaker system specification. Future \"Obtain\" phase activities include award of a contract for Detail Design & Construction for the heavy polar icebreaker.", "FY2019 Submission", "The Coast Guard's proposed FY2018 budget requested $750 million in procurement funding for the PSC program and included a total of $1,805 million over the five-year period FY2019-FY2023. The request for $750 million for the PSC program was a late change to the FY2019 budget that is not reflected in Coast Guard FY2019 budget-justification documents that were printed prior to the change. In those earlier documents, the amount of funding requested for FY2019 shows as $30 million rather than $750 million, and the total amount of funding requested in the Coast Guard's PC&I account was correspondingly $720 million less than the figure of $1,886.8 million shown in Table C-2 .", "FY2020 Submission", "The Coast Guard's proposed FY2020 budget requests $35 million in procurement funding for the PSC program, which is enough to cover the PSC program's FY2020 government program-management costs.", "Appendix D. Funding Level in PC&I Account", "This appendix presents additional discussion of the funding level of the Coast Guard's Procurement, Construction, and Improvements (PC&I) account.", "Overview", "The Coast Guard has testified that funding the PC&I account at a level of about $1 billion to $1.2 billion per year\u2014the approximate average annual funding level programmed in the FY2014, FY2015, and FY2016 budget submissions, as shown in Table C-2 \u2014would make it difficult to fund various Coast Guard acquisition projects, including a new polar icebreaker and improvements to Coast Guard shore installations. Coast Guard plans call for procuring Offshore Patrol Cutters (OPCs) at an eventual rate of two per year. If each OPC costs roughly $400 million, procuring two OPCs per year in an PC&I account of about $1 billion to $1.2 billion per year would leave about $200 million to $400 million per year for all other PC&I-funded programs.", "Since 2017, Coast Guard officials have been stating more regularly what they stated only infrequently in earlier years: that executing the Coast Guard's various acquisition programs fully and on a timely basis would require the PC&I account to be funded in coming years at a level of about $2 billion per year. Statements from Coast Guard officials on this issue in past years have sometimes put this figure as high as about $2.5 billion per year.", "Using Past PC&I Funding Levels as a Guide for Future PC&I Funding Levels", "In assessing future funding levels for executive branch agencies, a common practice is to assume or predict that the figure in coming years will likely be close to where it has been in previous years. While this method can be of analytical and planning value, for an agency like the Coast Guard, which goes through periods with less acquisition of major platforms and periods with more acquisition of major platforms, this approach might not always be the best approach, at least for the PC&I account.", "More important, in relation to maintaining Congress's status as a co-equal branch of government, including the preservation and use of congressional powers and prerogatives, an analysis that assumes or predicts that future funding levels will resemble past funding levels can encourage an artificially narrow view of congressional options regarding future funding levels, depriving Congress of agency in the exercise of its constitutional power to set funding levels and determine the composition of federal spending.", "Past Coast Guard Statements About Required PC&I Funding Level", "At an October 4, 2011, hearing on the Coast Guard's major acquisition programs before the Coast Guard and Maritime Transportation subcommittee of the House Transportation and Infrastructure Committee, the following exchange occurred:", "REPRESENATIVE FRANK LOBIONDO: ", "Can you give us your take on what percentage of value must be invested each year to maintain current levels of effort and to allow the Coast Guard to fully carry out its missions?", "ADMIRAL ROBERT J. PAPP, COMMANDANT OF THE COAST GUARD:", "I think I can, Mr. Chairman. Actually, in discussions and looking at our budget\u2014and I'll give you rough numbers here, what we do now is we have to live within the constraints that we've been averaging about $1.4 billion in acquisition money each year.", "If you look at our complete portfolio, the things that we'd like to do, when you look at the shore infrastructure that needs to be taken care of, when you look at renovating our smaller icebreakers and other ships and aircraft that we have, we've done some rough estimates that it would really take close to about $2.5 billion a year, if we were to do all the things that we would like to do to sustain our capital plant.", "So I'm just like any other head of any other agency here, as that the end of the day, we're given a top line and we have to make choices and tradeoffs and basically, my tradeoffs boil down to sustaining frontline operations balancing that, we're trying to recapitalize the Coast Guard and there's where the break is and where we have to define our spending.", "An April 18, 2012, blog entry stated the following:", "If the Coast Guard capital expenditure budget remains unchanged at less than $1.5 billion annually in the coming years, it will result in a service in possession of only 70 percent of the assets it possesses today, said Coast Guard Rear Adm. Mark Butt.", "Butt, who spoke April 17 [2012] at [a] panel [discussion] during the Navy League Sea Air Space conference in National Harbor, Md., echoed Coast Guard Commandant Robert Papp in stating that the service really needs around $2.5 billion annually for procurement.", "At a May 9, 2012, hearing on the Coast Guard's proposed FY2013 budget before the Homeland Security subcommittee of the Senate Appropriations Committee, Admiral Papp testified, \"I've gone on record saying that I think the Coast Guard needs closer to $2 billion dollars a year [in procurement funding] to recapitalize\u2014[to] do proper recapitalization.\"", "At a May 14, 2013, hearing on the Coast Guard's proposed FY2014 budget before the Homeland Security Subcommittee of the Senate Appropriations Committee, Admiral Papp stated the following regarding the difference between having about $1.0 billion per year rather than about $1.5 billion per year in the PC&I account:", "Well, Madam Chairman, $500 million\u2014a half a billion dollars\u2014is real money for the Coast Guard. So, clearly, we had $1.5 billion in the [FY]13 budget. It doesn't get everything I would like, but it\u2014it gave us a good start, and it sustained a number of projects that are very important to us.", "When we go down to the $1 billion level this year, it gets my highest priorities in there, but we have to either terminate or reduce to minimum order quantities for all the other projects that we have going.", "If we're going to stay with our program of record, things that have been documented that we need for our service, we're going to have to just stretch everything out to the right. And when we do that, you cannot order in economic order quantities. It defers the purchase. Ship builders, aircraft companies\u2014they have to figure in their costs, and it inevitably raises the cost when you're ordering them in smaller quantities and pushing it off to the right.", "Plus, it almost creates a death spiral for the Coast Guard because we are forced to sustain older assets\u2014older ships and older aircraft\u2014which ultimately cost us more money, so it eats into our operating funds, as well, as we try to sustain these older things.", "So, we'll do the best we can within the budget. And the president and the secretary have addressed my highest priorities, and we'll just continue to go on the\u2014on an annual basis seeing what we can wedge into the budget to keep the other projects going.", "At a March 12, 2014, hearing on the Coast Guard's proposed FY2015 budget before the Homeland Security subcommittee of the House Appropriations Committee, Admiral Papp stated the following:", "Well, that's what we've been struggling with, as we deal with the five-year plan, the capital investment plan, is showing how we are able to do that. And it will be a challenge, particularly if it sticks at around $1 billion [per year]. As I've said publicly, and actually, I said we could probably\u2014I've stated publicly before that we could probably construct comfortably at about 1.5 billion [dollars] a year. But if we were to take care of all the Coast Guard's projects that are out there, including shore infrastructure that that fleet that takes care of the Yemen [sic: inland] waters is approaching 50 years of age, as well, but I have no replacement plan in sight for them because we simply can't afford it. Plus, we need at some point to build a polar icebreaker. Darn tough to do all that stuff when you're pushing down closer to 1 billion [dollars per year], instead of 2 billion [dollars per year].", "As I said, we could fit most of that in at about the 1.5 billion [dollars per year] level, but the projections don't call for that. So we are scrubbing the numbers as best we can.", "At a March 24, 2015, hearing on the Coast Guard's proposed FY2016 budget before the Homeland Security subcommittee of the House Appropriations Committee, Admiral Paul Zukunft, Admiral Papp's successor as Commandant of the Coast Guard, stated the following:", "I look back to better years in our acquisition budget when we had a\u2014an acquisition budget of\u2014of $1.5 billion. That allows me to move these programs along at a much more rapid pace and, the quicker I can build these at full-rate production, the less cost it is in the long run as well. But there's an urgent need for me to be able to deliver these platforms in a timely and also in an affordable manner. But to at least have a reliable and a predictable acquisition budget would make our work in the Coast Guard much easier. But when we see variances of\u2014of 30, 40% over a period of three or four years, and not knowing what the Budget Control Act may have in store for us going on, yes, we are treading water now but any further reductions, and now I am\u2014I am beyond asking for help. We are taking on water.", "An April 13, 2017, press report states the following (emphasis added):", "[Then-]Coast Guard Commandant Adm. Paul Zukunft on Wednesday [April 12] said that for the Coast Guard to sustain its recapitalization plans and operations the service needs a $2 billion annual acquisition budget that grows modestly overtime to keep pace with inflation.", "The Coast Guard needs a \"predictable, reliable\" acquisition budget \"and within that we need 5 percent annual growth to our operations and maintenance (O&M) accounts,\" Zukunft told reporters at a Defense Writers Group breakfast. Inflation will clip 2 to 3 percent from that, but \"at 5 percent or so it puts you on a moderate but positive glide slope so you can execute, so you can build the force,\" he said.", "In an interview published on June 1, 2017, Zukunft said the following (emphasis added):", "We cannot be more relevant than we are now. But what we need is predictable funding. We have been in over 16 continuing resolutions since 2010. I need stable and repeatable funding. An acquisition budget with a floor of $2 billion. Our operating expenses as I said, they've been funded below the Budget Control Act floor for the past five years. I need 5 percent annualized growth over the next five years and beyond to start growing some of this capability back. ", "But more importantly, we [need] more predictable, more reliable funding so we can execute what we need to do to carry out the business of the world's best Coast Guard.", "Appendix E. Great Lakes Icebreakers", "This appendix provides a brief discussion of the Coast Guard's Great Lakes icebreakers.", "The Coast Guard's current Great Lakes icebreaker fleet consists of nine cutters:", "one heavy icebreaker\u2014 Mackinaw (WLBB-30), a 240-foot ship displacing 3,500 tons; six 140-foot Bay -class icebreaking tugs displacing 662 tons each; and two 225-foot Juniper -class seagoing buoy tenders displacing about 2,000 tons each that have a light icebreaking capability.", "Although Mackinaw is referred to as a heavy icebreaker, the word heavy in this instance is being used in the context of Great Lakes icebreaking\u2014 Mackinaw is much larger and has more icebreaking capability than the eight other ships listed above. Mackinaw would not, however, qualify as a heavy polar icebreaker, as it is much smaller and has much less icebreaking capability than a heavy polar icebreaker.", "Coast Guard officials have stated that they do not view the procurement of additional Great Lakes icebreakers as an urgent near-term acquisition need. In support of this assessment, they cite the capabilities of the current Great Lakes icebreaking fleet, the relatively young age of Mackinaw (which entered service in 2006), service life extension work being done on the ice-breaking tugs that is designed to add 15 years to their service lives, and Canada's own Great Lakes icebreaking capabilities. A 2016 Coast Guard report to Congress on the Great Lakes icebreaking mission stated the following:", "The current mix of heavy and medium [Great Lakes] icebreakers is capable of managing priorities and requests for icebreaking in Tier 1 and 2 waterways. When a severe ice season stresses Coast Guard asset capabilities, the existing agreement and partnership with Canada fills the capability gap and brings in extra heavy-icebreaking resources to manage the ice.... [T]he 2014 and 2015 ice seasons were a 20-year anomaly, consuming almost twice as many cutter resource hours as in any other year since 2005.", "The Coast Guard cannot reliably predict the economic impact of maintaining a single heavy Great Lakes icebreaker. Additionally, given the extreme conditions when ice coverage exceeds 90 percent, it is not clear that shipping delays would be significantly mitigated by an increase in icebreaking capability. Delays can be associated with several factors such as slow transit speeds, availability of pilots, and simultaneous and competing demand signals for icebreaking services across the Great Lakes.", "The Coast Guard's position notwithstanding, some Members of Congress in recent years have expressed interest in the possibility of bolstering the Coast Guard's Great Lakes icebreaking fleet by procuring a second icebreaker with capabilities generally similar to those of Mackinaw . Interest in this option was reinforced by the winters of 2013-2014 and 2014-2015, which featured particularly high levels of ice coverage on the Great Lakes. The committee report language requiring the above-quoted Coast Guard report to Congress is one example of this interest. Another example is Section 820 of the Frank LoBiondo Coast Guard Authorization Act of 2018 ( S. 140 / P.L. 115-282 of December 4, 2018), which states the following:", "SEC. 820. Great Lakes icebreaker acquisition. ", "(a) Icebreaking on the Great Lakes.\u2014For fiscal years 2018 and 2019, the Commandant of the Coast Guard may use funds made available pursuant to section 4902 of title 14, United States Code, as amended by this Act, for the construction of an icebreaker that is at least as capable as the Coast Guard Cutter Mackinaw to enhance icebreaking capacity on the Great Lakes.", "(b) Acquisition plan.\u2014Not later than 45 days after the date of enactment of this Act, the Commandant shall submit a plan to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Transportation and Infrastructure of the House of Representatives for acquiring an icebreaker described in subsections (a) and (b). Such plan shall include\u2014 ", "(1) the details and schedule of the acquisition activities to be completed; and", "(2) a description of how the funding for Coast Guard acquisition, construction, and improvements that was appropriated under the Consolidated Appropriations Act, 2017 (Public Law 115\u201331) will be allocated to support the acquisition activities referred to in paragraph (1).", "An examination of procurement costs for Mackinaw , the National Science Foundation's ice-capable research ship Sikuliaq , new oceanographic research ships being procured for NOAA, and OPCs suggests that a new Mackinaw -sized heavy Great Lakes icebreaker built in a U.S. shipyard might have a design and construction cost between $175 million and $300 million, depending on its exact capabilities and the acquisition strategy employed. The design portion of the ship's cost might be reduced if Mackinaw's design or the design of some other existing icebreaker were to be used as the parent design. Depending on the capabilities and other work load of the shipyard selected to build the ship, the construction time for a new heavy Great Lakes icebreaker might be less than that of a new heavy polar icebreaker."], "subsections": []}]}]}}
{"id": "R45481", "title": "\u201cAffirmative Action\u201d and Equal Protection in Higher Education", "released_date": "2019-01-31T00:00:00", "summary": ["When federal courts have analyzed and addressed \"affirmative action\" in higher education, they have done so in two distinct but related senses, both under the Fourteenth Amendment's guarantee of \"equal protection.\"", "The first has its roots in the original sense of \"affirmative action:\" the mandatory use of race by public education systems to eliminate the remnants of state-imposed racial segregation. Because state-sanctioned race segregation in public education violates the Fourteenth Amendment's Equal Protection Clause, in certain cases involving a state's formerly de jure segregated public university system, a state's consideration of race in its higher education policies and practices may be an affirmative obligation. As the U.S. Supreme Court explained in its consequential 1992 decision United States v. Fordice, equal protection may require states that formerly maintained de jure segregated university systems to consider race for the purpose of eliminating all vestiges of their prior \"dual\" systems. Drawing upon its precedent addressing racially segregated public schools in the K-12 context, the Court established a three-part legal standard in Fordice for evaluating the sufficiency and effectiveness of a state's efforts in \"dismantl[ing]\" its formerly de jure segregated public university system. To that remedial end, mandatory race-conscious measures\u2014in this de jure context\u2014are not limited to admissions. Instead, remedies may also address policies and practices relating to academic programs, institutional missions, funding, and other aspects of public university operations.", "Outside this de jure context, \"affirmative action\" has come to refer to a different category of race-conscious policies. These involve what the Court at one time called the \"benign\" use of racial classifications\u2014voluntary measures designed not to remedy past de jure discrimination, but to help racial minorities overcome the effects of their earlier exclusion. And for institutions of higher education, the Court has addressed one type of affirmative action policy in particular: the use of race as a factor in admissions decisions, a practice now widely observed by both public and private colleges and universities.", "The federal courts have come to subject these voluntary race-conscious policies\u2014\"affirmative action\" in its perhaps more familiar sense\u2014to a particularly searching form of review known as strict scrutiny. And even though this heightened judicial scrutiny has long been regarded as strict in theory but fatal in fact, the Court's review of race-conscious admissions policies in higher education has proved a notable exception, with the Court having twice upheld universities' use of race as one of many factors considered when assembling their incoming classes. The Court has long grappled with this seeming tension\u2014between the strictness of its scrutiny and its approval of race-conscious admissions policies\u2014beginning with its landmark 1978 decision in Regents of the University of California v. Bakke through its 2016 decision in Fisher v. University of Texas.", "Though the Equal Protection Clause generally concerns public universities and their constitutional obligations under the Fourteenth Amendment, federal statutory law also plays a role in ensuring equal protection in higher education. To that end, Title VI of the Civil Rights Act of 1964 prohibits recipients of federal funding\u2014including private colleges and universities\u2014from, at a minimum, discriminating against students and applicants in a manner that would violate the Equal Protection Clause. Federal agencies, including the Departments of Justice and Education, investigate and administratively enforce institutions' compliance with Title VI."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The last several years have seen renewed debate over the role that race plays in higher education\u2014a debate over \"affirmative action.\" A high-profile lawsuit challenging Harvard University's consideration of race in admitting its incoming classes, and the recent withdrawal of Obama Administration-era guidance addressing similar race-conscious policies, have focused the debate on \"affirmative action\" in perhaps its more familiar sense: the voluntary consideration of student applicants' race as a way of increasing the participation of racial minorities in higher education. Meanwhile, a recent lawsuit involving Maryland's university system has brought renewed attention to \"affirmative action\" in its other, original sense: the mandatory use of race by public higher education systems to eliminate the remnants of state-imposed racial segregation. This report addresses \"affirmative action\" in each of these two senses and discusses how the federal courts have analyzed them under the Fourteenth Amendment's guarantee of \"equal protection.\"", "The report first considers \"affirmative action\" in its original sense: the mandatory race-conscious measures that the federal courts have imposed on de jure segregated public university systems. The Supreme Court has made clear that a state that had a segregated system of education must eliminate all \"vestiges\" of that system, including through expressly race-conscious remedies. In its consequential 1992 decision United States v. Fordice , the Court charted a three-step inquiry for assessing whether a state has fulfilled that constitutional obligation, examining whether a current policy is traceable to the de jure segregated system, has continued discriminatory effect, and can be modified or practicably eliminated consistent with sound educational policy.", "Outside this de jure context, \"affirmative action\" has come to refer to a different category of race-conscious policies. These involve what the Court once called the \"benign\" use of racial classifications \u2014voluntary measures designed not directly to remedy past governmental discrimination, but to increase the representation of racial minorities previously excluded from various societal institutions. And in the context of higher education the Court has addressed one type of policy in particular: the use of race as a factor in admissions decisions, a practice now observed by many public and private colleges and universities.", "As this report explains, the federal courts have come to subject these voluntary \"affirmative action\" policies to a particularly searching form of review, known today as strict scrutiny. And they have so far upheld those policies under a single theory: that the educational benefits that flow from a diverse student body uniquely justify some consideration of race when deciding how to assemble an incoming class. To rely on that diversity rationale, however, the Court now requires universities to articulate in concrete and precise terms what their diversity-related goals are, and why they have chosen those goals in particular. And even once those goals are established, a university must still show that its admissions policy achieves its diversity-related goals as precisely as possible, while ultimately \"treat[ing] each applicant as an individual.\" ", "Because both lines of cases discussed here have their roots in the Equal Protection Clause, this report focuses primarily on public universities, all of which are directly subject to constitutional requirements. But those same requirements apply equally to private colleges and universities that receive federal funds pursuant to Title VI of the Civil Rights Act of 1964 (Title VI or the Act), which similarly prohibits recipients of federal dollars from discriminating on the basis of race. This report concludes by discussing the role that Title VI plays in ensuring equal protection in higher education, both public and private, including several avenues for congressional action under the Act."], "subsections": []}, {"section_title": "\"Affirmative Action\" as Affirmative Obligation: Dismantling De Jure Segregation", "paragraphs": [], "subsections": [{"section_title": "De Jure Segregation in Higher Ed and the Equal Protection Clause", "paragraphs": ["Though government-sanctioned racial segregation in public education is commonly associated with primary and secondary schools, numerous states had also mandated or permitted racial segregation in institutions of higher education, including through the latter part of the 20 th century, categorically excluding black students solely because of their race. Though the Supreme Court held decades ago that state-sanctioned racial segregation in higher education violates the Equal Protection Clause, such intentional segregation, or practices arising from formerly de jure segregated university systems and their discriminatory effects, may still persist.", "Addressing such circumstances, the Supreme Court has held the Equal Protection Clause to require states to eliminate all vestiges of their formerly de jure segregated public university systems that continue to have discriminatory effect. As the Court concluded in United States v. Fordice , state actors \"shall be adjudged in violation of the Constitution and Title VI [of the Civil Rights Act]\" to the extent they have failed to satisfy this affirmative duty to dismantle a de jure segregated public university system. A state actor therefore remains in violation of the Equal Protection Clause today if it maintains a policy or practice \"traceable\" to a formerly de jure segregated public university system that continues to foster racial segregation. Where such a violation is shown, race-conscious measures are not only constitutionally permissible, but may be constitutionally required to remedy and eliminate such unconstitutional remnants."], "subsections": []}, {"section_title": "Segregated Colleges and Universities Before 1954", "paragraphs": ["As in the K-12 context, a number of states maintained racially segregated public university systems and denied black students admission to post-secondary schools\u2014including colleges, law schools, and doctoral programs \u2014on the basis that these institutions educated white students only. Prior to 1954\u2014the year of the Supreme Court's landmark Brown v. Board of Education decision ( Brown I ) \u2014the Court had interpreted the Equal Protection Clause to permit state-sanctioned racially segregated public educational systems, provided that the separate schools for black students were substantially equal to those reserved for white students.", "For example, in its 1950 decision Sweatt v. Painter , the Court addressed an equal protection claim raised by a black student challenging the University of Texas Law School's denial of his admission based on his race, pursuant to its white-only admissions policy. At the time of the plaintiff's application in 1946, the state did not have a law school that admitted black students. Denying the plaintiff's requested relief for admission, the state trial court instead granted additional time to Texas to create a law school for black students; the state thereafter created a law school at the Texas State University for Negroes. The Supreme Court, however, held that the law school\u2014which, among other features, lacked accreditation \u2014did not offer an education \"substantially equal\" to that which the plaintiff would receive at the University of Texas Law School. On that basis\u2014the absence of a separate but equivalent legal education\u2014the Court held that the Equal Protection Clause required the plaintiff's admission to the University of Texas Law School.", "A decisive turn in the Court's interpretation and application of the Equal Protection Clause, however, came by way of its 1954 decision in Brown I . There, the Court held for the first time that race-based segregation \"in the field of public education\" violates the Equal Protection Clause. The Court concluded that race-based segregation in public schools deprives minority students of equal educational opportunities, and observed that segregation commonly denotes inferiority of the minority group. Segregated educational facilities, the Court concluded, are \"inherently unequal.\"", "The Court's holding in Brown I applies with equal force to public higher education\u2014that is, to public colleges and universities \u2014as does the Court's subsequent 1955 decision in the same case (\" Brown II \"), in which the Court addressed how school authorities and federal courts were to implement the mandate of Brown I . Indeed, one of the Court's earliest applications of Brown I and Brown II was in the higher education context. In that case, State of Fla. Ex. Rel. Hawkins v. Board of Control , the Supreme Court vacated a Florida supreme court decision that declined to order the state's white-only law school to admit a black student. Relying on language in Brown II that courts could consider practical obstacles to a school's transition to desegregation, the Florida court refused to order the plaintiff's admission. The Supreme Court vacated the state court's decision, concluding that in the case of admitting a black student \"to a graduate professional school, there [wa]s no reason for delay\" and that he was \"entitled to prompt admission under the rules and regulations applicable to other qualified candidates.\""], "subsections": []}, {"section_title": "The Affirmative Duty to Eliminate De Jure Segregation in Higher Education", "paragraphs": ["Following Brown I and Brown II , the Court's equal protection jurisprudence in the public education context expanded significantly to address questions regarding the scope and sufficiency of state actions to \"dismantle\" racially segregated systems in public school districts across the country, and various challenges to district court-ordered remedies. As the Court revisited these legal standards over time, it continued to describe the affirmative duty of formerly segregated public school entities as the duty to \"take all steps necessary to eliminate the vestiges of the unconstitutional de jure system\" to the extent practicable. Turning to the context of higher education, the Court addressed, in its 1992 decision United States v. Fordice , how these equal protection principles and legal standards apply to a state's affirmative duty to dismantle a formerly de jure segregated public university system."], "subsections": [{"section_title": "United States v. Fordice (1992)", "paragraphs": ["Though it had \"many occasions to evaluate whether a public school district has met its affirmative obligation to dismantle its prior de jure segregated system in elementary and secondary schools,\" the Court explained, Fordice presented the issue of \"what standards to apply\" in determining whether the state has met this obligation in the university context.", "At issue before the Court was Mississippi's prior de jure public university system. The Court observed that since establishing the University of Mississippi as an institution of \"higher education exclusively of white persons\" in 1848, Mississippi had created four more exclusively white institutions and three exclusively black institutions through 1950. Thereafter, it continued to maintain its racially segregated public university system, and admitted its first black student to the University of Mississippi in 1962 \"only by court order.\" For the \"next 12 years,\" the state's segregated university system \"remained largely intact.\" Around 1987, when the case went to trial, over 99 percent of the state's white students attended the five universities that had been formerly white-only, while the three formerly black-only institutions had student bodies between 92 percent to 99 percent black.", "Citing its precedent addressing de jure segregation in the K-12 context, the Court stated that \"[o]ur decisions establish that a [s]tate does not satisfy its constitutional obligations until it eradicates policies and practices traceable to its prior de jure dual system that continue to foster segregation.\" Perhaps critically, in the context of remedying a formerly de jure segregated system, a state's \"adoption and implementation of race-neutral policies alone \" is not sufficient to demonstrate that it has \"completely abandoned its prior dual system.\" Aside from segregative admissions policies, the Court explained, a state's other policies may shape and determine student choice and attendance, and continue to foster segregation.", "Instead, to determine whether a state has satisfied its affirmative duty to dismantle its de jure public university system, the Court set out a three-step analysis. First , the analysis examines whether the challenged policy or practice maintained by the state is \"traceable to its prior [ de jure ] system.\" By way of example, the Court identified four policies that, in its view, were \"readily apparent\" vestiges of de jure segregation:", "admissions standards based on a test-score range originally adopted for discriminatory reasons; unnecessary program duplication throughout the university system (e.g., multiple institutions offering the same \"nonbasic\" courses); the state's academic mission assignments to its higher education institutions (e.g., assigning the broadest academic missions to only formerly white-only institutions and the narrowest academic mission to a formerly black-only institution); and the continued operation of all public universities established in the de jure segregated system.", "With respect to traceability, the Court's analysis reflects that where a current policy functions based on distinctions or a framework created in a formerly de jure system, traceability can be shown. For example, when concluding that the state's designation of academic missions to its universities was traceable to de jure segregation, the Court cited evidence that the state's current method of assigning its universities into three academic missions levels largely mirrored a three-tiered grouping of its universities in the de jure system. In addition and more generally, an interim change or new, nondiscriminatory justification for a current policy does not necessarily sever its traceability to a de jure system. Where the traceability of a policy or policies is shown, a party need not show discriminatory intent with respect to those challenged policies.", "Where traceability is not shown\u2014that is, where the policies \"do not have such historical antecedents\" to de jure segregation\u2014an equal protection challenge would then require \"a showing of discriminatory purpose.\" In those instances, the Court explained, \"the question becomes whether the fact of racial separation establishes a new violation of the Fourteenth Amendment under traditional principles.\"", "Second , once traceability is shown, the analysis turns to whether those traceable policies have continued discriminatory or \"segregative\" effects in student choice, enrollment, or other facets of the university system. At this stage, the Court noted that a court should not consider \"this issue in isolation,\" but rather examine the \"combined effects\" of all the challenged policies together \"in evaluating whether the State ha[s] met its duty to dismantle its prior de jure segregated system.\" In light of this instruction, it appears the focus of the second step of the test is not on establishing causation between specific racial disparities and specific policies\u2014by this stage, a court has already found traceability\u2014but rather to evaluate whether a state has sufficiently dismantled its formerly de jure system. Consistent with the state's burden of proving it has dismantled its de jure segregated system, the state must show the absence of segregative effects; plaintiffs are not required to establish this second element.", "Third , because traceable policies that have discriminatory effects \"run afoul of the Equal Protection Clause,\" such policies must accordingly \"be reformed to the extent practicable and consistent with sound educational practices.\" Thus, at the third step, a court assesses whether traceable policies can be \"practicably eliminated\" \"consistent with sound educational practices,\" with the burden on the state to show that the challenged policies are \"not susceptible to elimination without eroding sound educational policy.\" Because the Court remanded the case to the lower court to address practicable elimination, its analysis in Fordice on this point is limited. The Court suggested, however, that if a current policy lacks sound educational justification, it reasonably follows that it can be practicably eliminated in part or in whole. In addition, the Court observed that in some cases, a merger or closure of institutions could be constitutionally required to eliminate vestiges, should other methods fail to eliminate their discriminatory effects. Finally, the Court repeatedly stated that so long as vestiges remain, which have discriminatory effects, the state remains in violation of the Equal Protection Clause unless it can show it cannot practicably eliminate those policies or practices.", "In addition, Justice O'Connor, in a separate concurring opinion in Fordice , emphasized the \"narrow\" circumstances under which a state could maintain a traceable policy or practice with segregative effects. In her view, courts may \"infer lack of good faith\" on the part of the state if it could accomplish educational objectives through less segregative means, and the state has a \"'heavy burden'\" to explain its preference for retaining the challenged practice. Moreover, even if the state shows that retaining certain traceable policies or practices is \"essential to accomplish its legitimate goals,\" Justice O'Connor asserted that the state must still prove it has \"counteracted and minimized the segregative impact of such policies to the extent possible.\""], "subsections": []}, {"section_title": "Flagship Universities and Historically Black Colleges and Universities (HBCUs)", "paragraphs": ["The Court in Fordice observed that the closure or merger of certain institutions may be constitutionally required, consistent with its holding that any vestige of a de jure segregated system that continues to have discriminatory effect must be eliminated to the extent practicable and consistent with sound educational policy. Yet that invited a new\u2014and more difficult\u2014set of questions: which institutions would be most subject to closure or merger, and under what circumstances would such action be required?", "Significantly, the Court did not categorically identify which institutions would be most subject to such remedial action \u2014a state's flagship, formerly white-only institutions from which a de jure system originated, for example, or formerly black-only institutions created to preserve white-only admission at other institutions. Instead, the Court concluded that it was unable to determine\u2014on the record presented in Fordice \u2014whether closures or mergers were required in that case and directed the lower court on remand to \"carefully explore\" several considerations. This instruction to the lower court, while not part of the holding in Fordice , suggests that several factors are relevant for determining whether merger or closure is constitutionally required. In addition, the Court observed that maintaining all eight higher education institutions in Mississippi was \"wasteful and irrational,\" particularly in light of the close geographic proximity between some of the universities. This observation suggests that close proximity between institutions offering similar programs could be a relevant factor in assessing remedial closure or merger as well.", "Regarding the fate of a state's historically black institutions, Justice Thomas, in a concurring opinion, did not read Fordice to \"forbid[]\" those institutions' continued operation or \"foreclose the possibility that there exists 'sound educational justification' for maintaining historically black colleges as such .\" Justice Thomas emphasized that \"[d]espite the shameful history of state-enforced segregation,\" historically black colleges and universities were and remain institutions critical to the academic flourishing and leadership development of many students, and observed that \"[i]t would be ironic, to say the least, if the institutions that sustained blacks during segregation were themselves destroyed in an effort to combat its vestiges.\" In his view, though a state is not constitutionally required to maintain its historically black institutions as such, their continued operation is constitutionally permissible, so long as admission is open to all students \"on a race-neutral basis, but with established traditions and programs that might disproportionately appeal to one race or another.\""], "subsections": []}, {"section_title": "Legal Challenges Following Fordice", "paragraphs": ["Following Fordice , plaintiffs, including the United States in Title VI enforcement actions, have brought suit challenging practices allegedly traceable to a state's de jure segregated university system. Challenged practices have included unnecessary program duplication, which the Court identified in Fordice as one of the \"readily apparent\" remnants of de jure segregation, as well as others such as scholarship policies, funding practices, and the use of curricula at formerly white-only institutions with little representation of black history and culture. More recently, in 2018, a legal challenge against the State of Maryland alleged that practices relating to capital and operational funding, unnecessary program duplication, and the limited institutional missions of the state's formerly black-only institutions are traceable to the state's formerly de jure segregated higher education system.", "To date, however, only a few federal appellate courts have had occasion to analyze Fordice -based claims, and the Supreme Court has not, since its 1992 decision, addressed claims challenging higher education policies or practices as unconstitutional vestiges of de jure segregation. Though development of the Fordice standard in federal case law is limited, the few appellate decisions applying Fordice provide at least some analytical examples and reflect discernible differences in approach, particularly with respect to the evidence sufficient to satisfy the third element of the Fordice standard\u2014that elimination of a practice is not possible, despite being traceable and having continued discriminatory effect."], "subsections": []}, {"section_title": "Unnecessary Program Duplication: Program Transfers to Mergers", "paragraphs": ["As discussed above, the Supreme Court in Fordice identified \"unnecessary program duplication\" as a practice traceable to the prior de jure segregated system of higher education at issue in that case, stating that \"it can hardly be denied\" that such duplication was a requisite feature of the prior dual system because \"the whole notion of 'separate but equal' required duplicative programs in two sets of schools.\" Drawing upon that rationale, courts that have addressed unnecessary program duplication have generally had little difficulty tracing duplicative courses and degree programs to prior de jure segregation. On the matter of if and how program duplication might be eliminated, however, there is lesser consensus. Generally, federal courts have considered several methods for eliminating program duplication, such as transferring existing programs from one institution to another, eliminating certain programs altogether, creating cooperative programs, and\u2014perhaps most drastically\u2014merging institutions."], "subsections": []}, {"section_title": "Challenges to Disproportionate Allocations of Federal and State Land Grants", "paragraphs": ["Plaintiffs have also raised equal protection challenges to state funding practices that allocate all or most of their federal and state land grants to institutions that were formerly white-only in a de jure system while dedicating significantly less or no funds to formerly black-only institutions. More specifically, these cases have concerned a state's allocation of federal land grants provided annually to support research on agricultural issues and the dissemination or \"extension\" of that research.", "At issue in Knight v. Alabama , for example, was the State of Alabama's allocation of federal funds between its two land grant universities, Auburn University, formerly white-only in the de jure system, and Alabama A&M University (A&M), formerly established as black-only. The state allocated to Auburn the entirety of Alabama's approximately $4 million in federal aid for agricultural research, and allocated an additional $14 million to Auburn in state funds. Meanwhile, the state had \"for years\" allocated no federal aid to A&M and given state funds for agricultural research in amounts that \"today still totals less than $200,000 each year.\" The U.S. Court of Appeals for the Eleventh Circuit held that the state's current funding allocation was traceable to de jure segregation and instructed the lower court on remand to make determinations with respect to the second and third parts of the Fordice test. On the issue of practicable elimination, the Eleventh Circuit observed that reduced efficiency would not necessarily render a proposed modification impracticable or educationally unsound.", "By contrast, the Fifth Circuit affirmed a district court's ruling that permitted a state to retain its traceable funding practices. There, despite finding traceability and discriminatory effects, the district court had concluded, based on inefficiencies related to running more than one agricultural research program, that it was not practicable for the state to eliminate its exclusive funding allocation to its formerly white-only land grant institution."], "subsections": []}]}, {"section_title": "Open Questions After Fordice", "paragraphs": ["The Supreme Court has not revisited its analysis in Fordice , leaving open questions about the permissible applications of its three-part legal standard to an array of fact patterns and legal theories. Similarly, as discussed above, few courts of appeals have addressed claims under Fordice , limiting the development and interpretation of Fordice in federal case law.", "One such unresolved question is under what circumstances, if any, traceability can be established under Fordice when a state makes changes to an originally discriminatory policy such that the current policy functions differently, but there is still some evidence of traceability between the two, or perpetuation of similar segregative effects under the changed policy as under the original policy. In addition, the Supreme Court and circuit courts have not yet expressly addressed how far a district court may go in remedying an unconstitutional vestige or remnant of a prior de jure public university system. In the K-12 context, the Supreme Court has upheld district court orders that set certain faculty and student ratios at schools in noncompliant school districts, to desegregate them pursuant to Brown and its progeny . It remains unclear, however, whether the district courts enjoy similar authority under Fordice to order similarly extensive remedies. Indeed, the few cases alleging Fordice -type claims that did reach the federal appellate courts ultimately resolved in settlements, thus leaving little judicial guidance on the scope of a court's authority to mandate specific remedies if a state fails to dismantle its formerly de jure segregated public university system. With respect to these unresolved questions, the Supreme Court's express reliance in Fordice on precedent addressing de jure segregation in the primary and secondary school context suggests that at least some of this same precedent should inform future analyses, with adaptation to the higher education context."], "subsections": []}]}, {"section_title": "Racial Segregation and Discriminatory Intent", "paragraphs": ["A finding of a state entity's intent to segregate students by race in the higher education context is critical to showing a violation of the Equal Protection Clause, and has significant legal consequences. In such cases of de jure \u2014that is, intentional, state-imposed \u2014segregation, the state has an affirmative duty under the Equal Protection Clause to eliminate all vestiges of its de jure system by dismantling the infrastructure and other mechanisms that produced the discriminatory segregation. According to the Supreme Court's 1992 Fordice decision, this duty commands more than just the repeal of state laws sanctioning racial segregation in higher education. The state must also uproot or reform any policy or practice \"traceable\" to its formerly de jure system that continues to have discriminatory effect.", "In Fordice , the state's intent to racially segregate its higher education system was plain: with the founding of the University of Mississippi in 1848, Mississippi explicitly set out to create a public university \"dedicated to the higher education exclusively of white persons,\" and racially segregated its public university system over the next 100 years through the creation of other \"exclusively white institutions\" and \"solely black institutions.\" Nor was Mississippi's system unique in this regard. \"[D]ual system[s]\" of public higher education\u2014one for black students, another for white\u2014were codified in other state and local laws throughout the country. Thus far, federal courts that have addressed de jure segregation in higher education have done so in the context of such codified segregation, as in Fordice .", "The absence of a codified dual system of higher education, however, may not mean that a university system was not or is not intentionally segregated. As reflected in the Supreme Court decision Keyes v. School District No. 1, Denver, Colorado , even when state authorities have not segregated their public schools by statute, they may still have engaged in unconstitutional racial segregation. Thus, in the K-12 context, federal courts have found de jure segregation based on evidence reflecting a state actor's impermissible segregative intent. This line of cases would appear to apply in the context of higher education as well. As the Court noted in Fordice , where a plaintiff is unable to show that a policy or practice is a vestige of prior de jure segregation, she may nonetheless prove a \"new\" constitutional violation with evidence of a present-day intent to racially segregate students \"under traditional principles\" governing discriminatory intent. This would be consistent with the Court's application of Brown and its progeny broadly across \"the field of public education,\" including higher education, as reflected in Fordice .", "Because the Supreme Court has yet to address segregative intent in higher education, it is unclear what intent evidence would be sufficient to establish a de jure segregated public university or institution, apart from a law codifying such segregation. As a general matter, though, a court's determination of discriminatory intent is a fact-intensive, \"sensitive inquiry.\" And the Supreme Court has observed that this is even more so in cases alleging de jure segregation in public education. Where the evidence indicates, for example, that a state actor undertook a policy or practice knowing that doing so would have the \"foreseeable\" effect of segregating students by race, that evidence may support an inference of de jure segregation. In addition, at least in the K-12 context, a finding of a state entity's segregative intent in one part of a school system creates a rebuttable presumption that segregation found in other parts of the same system was also intentional. De jure segregation proved by such nonstatutory evidence generally triggers the same affirmative obligation on the state to eliminate the vestiges of its state-imposed segregation, as when de jure segregation is shown through state or local laws.", "Though segregative intent analyses at the K-12 level may be instructive, the guidance these decisions provide may be limited by the nature of the evidence at issue in those particular cases: the method of student assignment to elementary or secondary schools, for example, or the drawing of attendance zones to create racially segregated schools. It appears unlikely that such evidence would be at issue or directly applicable in cases alleging segregative intent at the collegiate or graduate level. Nonetheless, these decisions generally suggest that categorical distinctions\u2014between evidence indicative of de jure segregation and evidence of existing segregation insufficiently linked to state intent\u2014are difficult to draw. Indeed, given the difficulties that can arise in a court's analysis of \"segregative intent,\" over the years a number of Justices have called into question the rationale and basis for the distinction between de jure and so-called de facto segregation, though the majority of the Court has recognized and continues to recognize this distinction.", "Whatever the open questions may be regarding the evidence sufficient to show segregative intent, particularly in the higher education context, Fordice instructs that a plaintiff need not provide evidence of new discriminatory intent when alleging that a state has failed to eliminate vestiges of a prior de jure segregated system. And with respect to remedying intentional racial segregation, the Court has repeatedly held that a state not only may use a broad array of explicit race-conscious policies and practices to remedy its constitutional violation, but often must do so. By themselves, race-neutral measures simply may not be enough, the Court has explained, to provide equitable, make-whole relief for intentionally segregative acts.", "This affirmative obligation to consider race arises, however, only in the context of de jure segregation. Outside that de jure context, institutions of higher education subject to the Equal Protection Clause have no such duty to remedy racial segregation. Nor may they\u2014or the federal courts, for that matter\u2014use the same broad array of race-conscious measures available for remedying de jure segregation.", "De jure segregation, however, is not the only context in which race-conscious measures in higher education may be used. For over forty years colleges and universities have considered race as a way of increasing the racial diversity of their student bodies, independent from a legal basis relating to de jure segregation. Thus far, however, the Supreme Court has addressed only one type of discretionary race-conscious measure in the higher education context: admissions policies. And when evaluating these discretionary policies, the Court reviews them under a notably different analytical lens, looking to their precision in achieving certain concretely defined and \"compelling\" educational interests, as explained more fully below."], "subsections": []}, {"section_title": "Beyond De Jure: Judicial Scrutiny of Racial Classifications", "paragraphs": ["\"Affirmative action\" in its original sense grew out of the states' affirmative obligation under the Equal Protection Clause to rid their public institutions of the lingering vestiges of de jure segregation. But \"affirmative action\" has also come to refer to race-conscious policies developed outside this de jure context. These are policies voluntarily adopted by institutions to help racial minorities overcome the effects of their earlier exclusion. And unlike the measures ordered by the courts to right the wrongs of de jure segregation, these policies are strictly voluntary, with their legality consequently turning on constitutional considerations unlike those involved in the de jure context.", "\"Affirmative action\" in this more familiar, voluntary sense has also been among the most contentious subjects in constitutional law. In the forty years since Regents of the University of California v. Bakke , when the Court first addressed those programs' constitutionality, the Justices have divided sharply over when or whether such programs can survive constitutional scrutiny. And a major point of disagreement among the Justices\u2014lingering to this day \u2014is how strictly to review those policies and what the government or other state entity must do to justify its use of \"benign\" racial classifications. In recent decisions, the Court has reviewed such classifications under a seemingly \"elastic\" regime of strict scrutiny, accepting those classifications only where they have been narrowly tailored to serve compelling government interests."], "subsections": [{"section_title": "Equal Protection and Racial Classifications", "paragraphs": ["The constitutional guarantee of equal protection broadly prohibits the government from employing \"arbitrary classification[s].\" And the use of racial classifications in particular has long been of special concern for the courts. Indeed, this \"heightened judicial solicitude\" for racial categorizing has roots nearly as old as the Fourteenth Amendment itself. As the Supreme Court explained in an early decision under the Amendment, the \"spirit and meaning\" of the Equal Protection Clause was \"that the law in the States shall be the same for the black as for the white; that all persons, whether colored or white, shall stand equal before the laws of the States, and, in regard to the colored race, ... that no discrimination shall be made against them by law because of their color.\" In the decades since, the Court has only made clearer that it regards the government's use of racial classifications as \"inherently suspect\" and therefore subject to more demanding scrutiny than other classifications, which are typically reviewed only for basic rationality.", "There has been significant disagreement, however, over just how rigidly the courts should scrutinize a racial classification, especially when the point of the classification is to benefit racial minorities, as in the case of affirmative action. That issue came before the Court for the first time in Bakke , involving a challenge to an affirmative action admissions program begun at the then newly created medical school at the University of California at Davis (the Medical School). And the Court's fractured decision there prefigured the central disagreements that the Justices still face in reviewing so-called \"benign\" racial classifications."], "subsections": [{"section_title": "1. Bakke's Splintered Levels of Scrutiny", "paragraphs": ["In the early 1970s, not long after the Medical School opened, it adopted a race-conscious admissions policy to increase its enrollment of certain \"disadvantaged\" students. Under that policy, the school each year would set aside 16 seats in its entering class of 100 specifically for members of this \"disadvantaged\" group, to be admitted by a \"special admissions\" committee. Although many white students sought admission under this \"special\" policy, the committee considered only students of specifically identified racial minorities. After Allan Bakke, a white male, twice sought\u2014and was denied\u2014admission to the school, he brought suit challenging the set-aside under the Equal Protection Clause as well as Title VI, which prohibits institutional recipients of federal funds\u2014like the Medical School\u2014from discriminating on the basis of race.", "Bakke's case eventually found its way to the Supreme Court and into the hands of a divided bench. The Justices found themselves particularly at odds over the case's threshold question\u2014what level of scrutiny the Court should apply in reviewing Bakke's challenge. Justice Stevens, writing for a quartet of Justices, concluded that the program violated Title VI, sidestepping the constitutional question. Another four Justices would have reached the equal protection challenge, and in doing so would have required the Medical School to point to \"important governmental objectives\" that justified its admissions policy's use of \"remedial\" racial classifications, along with evidence that their use was \"substantially related to\" achieving those important objectives . Under that standard\u2014a form of intermediate scrutiny \u2014these Justices would have upheld the policy.", "Justice Powell, announcing the Court's judgment but writing for himself, insisted that all \"racial and ethnic distinctions\" drawn by the government must be regarded as \"inherently suspect,\" calling for \"the most exacting judicial examination.\" What that meant in Bakke , according to Justice Powell, was that the Medical School would need to prove that its use of the \"special admissions\" carve-out was \"precisely tailored to serve a compelling governmental interest\"\u2014the standard of review now known simply as strict scrutiny . And because, in his view, the school could come forward with no such proof, Justice Powell concluded that its affirmative-action policy could not survive the Court's scrutiny, whether under the Fourteenth Amendment or the overlapping standards of Title VI."], "subsections": []}, {"section_title": "2. Settling on Strict Scrutiny", "paragraphs": ["Because Bakke yielded no majority opinion, it could only hint at how the Court might treat other \"benign\" race-conscious policies that did not involve the sort of apparent quota invalidated in that case or cases outside the unique context of higher education. That uncertainty would last another decade, as the Court, in another series of splintered decisions, weighed constitutional challenges to differently structured affirmative action policies in other contexts, each time without resolving the appropriate standard of review.", "That uncertainty appeared to abate with the Court's 1989 decision in Richmond v. J.A. Croson , Co. There, for the first time, five Justices clearly signaled that they would apply strict scrutiny to affirmative action plans implemented at the state and local levels, including the program they invalidated in that case, involving the City of Richmond's set-aside of public work funds for minority-owned businesses. But the next year, in Metro Broadcasting, Inc. v. FCC , the Court, in another 5-4 ruling, suggested that it would review federal affirmative action plans differently. In the Court's view there, \"benign race-conscious measures mandated by Congress \" need only \"serve important governmental objectives\" and be \"substantially related to the achievement of those objectives\"\u2014satisfying an intermediate level of scrutiny.", "Just a few years later, however, in Adarand Constructors, Inc. v. Pe\u0144a , the Supreme Court reversed course. There, in a federal contracting case, the Court drew a different lesson from its pre- Metro line of race-classification cases: in the view of the Adarand majority, \"any person, of whatever race, has the right to demand that any governmental actor subject to the Constitution justify any racial classification subjecting that person to unequal treatment under the strictest judicial scrutiny.\" That simple rule therefore precluded the divided regime upheld in Metro Broadcasting , subjecting the states' use of racial classifications to strict scrutiny, while relaxing the review of comparable classifications enacted by Congress. Instead, the Adarand Court held, \"[f]ederal racial classifications, like those of a State, must serve a compelling governmental interest, and must be narrowly tailored to further that interest.\" And to the extent that Metro Broadcasting was \"inconsistent\" with that uniform rule, it was accordingly overruled.", "After Adarand strict scrutiny therefore became the test of any classification that subjected individuals to unequal treatment based on their race, no matter which state actor was doing the classifying. And the Court expressly extended that holding to the context of higher education. As the Court reaffirmed in Fisher v. University of Texas , \"because racial characteristics so seldom provide a relevant basis for disparate treatment,\" \"[r]ace may not be considered [by a university] unless [its] admissions process can withstand strict scrutiny.\"", "It therefore appears that a classification that subjects individuals to unequal treatment because of their race, even if for a \"benign\" purpose, will have to satisfy strict scrutiny. In its canonical formulation, that test calls for measuring such classifications along the two dimensions Justice Powell identified in Bakke : (1) the classification must serve a compelling governmental interest and (2) the use of that classification must also be narrowly tailored to achieving that interest. The government has the burden of proving both, and neither is easy to do. Indeed, in the sixty years that separated the Court's now-repudiated decision in Korematsu v. United States from Grutter v. Bollinger , when the Court first upheld an affirmative action policy at a public university, the only other \"racial classifications upheld under strict scrutiny [have been] race-based remedies for prior racial discrimination by the government.\" To many commentators \"strict scrutiny\" has thus come to seem rather more \"strict in theory, but fatal in fact\" \u2014a point sometimes echoed by the Justices themselves."], "subsections": []}]}]}, {"section_title": "Voluntary \"Affirmative Action\" in Higher Education: Scrutinizing Admissions", "paragraphs": ["Strict scrutiny may typically be fatal in fact, but affirmative action policies in higher education have been a notable exception. Partly this has to do with the Equal Protection Clause itself, and the often crucial difference that a particular context makes in deciding cases under that \"broad provision[].\" And for several Justices the context of affirmative action, involving the arguably \"benign\" use of race, has seemed particularly distinctive. Yet, despite this contextual difference, the Court has made it clear that its scrutiny of race-conscious admission policies is still every bit as strict. Or, as Justice Kennedy put the point in the first Fisher case, even though \"[s]trict scrutiny must not be 'strict in theory, but fatal in fact,'\" it must also \"not be strict in theory but feeble in fact.\"", "This seeming tension\u2014between the strictness of the Court's scrutiny and its approval of race-conscious admissions policies\u2014has led the Court to adjust its framework for scrutinizing similar policies over the years. And since Bakke that framework appears to have shifted in two significant respects, corresponding to each of the two prongs of strict scrutiny. First, the Court now requires public universities that adopt affirmative action admissions policies to explain in increasingly \"concrete and precise\" terms what diversity-related educational goals those policies serve and why the university has chosen to pursue them. Anything less, the Court has held, would fail to present an interest sufficiently compelling under strict scrutiny. Second, the Court also now expects universities to prove that their policies achieve those \"concrete and precise goals\" in an appropriately \"flexible\" way, as most clearly exemplified by the Harvard plan that Justice Powell singled out in Bakke . That model has yielded \"five hallmarks\" of an appropriately tailored affirmative action policy, criteria that have since guided lower courts in assessing other affirmative action plans."], "subsections": [{"section_title": "From \"Student Body Diversity\" to Concrete and Particular Diversity-Related Goals", "paragraphs": ["For a university's affirmative action policy to survive strict scrutiny, a university must first \"demonstrate with clarity that its 'purpose or interest is both constitutionally permissible and substantial.\" The Court has recognized only a single interest that meets that standard: \"the attainment of a diverse student body.\" What exactly that interest amounts to\u2014and how, consequently, a university should ensure it has appropriately tailored its policy to achieve that interest\u2014has been a point of uncertainty since Bakke . With its two decisions in Fisher v. University of Texas , however, the Court appears now to require a more \"concrete and precise\" articulation of the diversity-related educational goals a university hopes to achieve through its affirmative action admissions policy. In addition, the Court also now appears to expect a university to provide a reasoned and principled explanation of why the school believes it important to achieve those goals."], "subsections": [{"section_title": "1. Bakke and the Diversity Interest", "paragraphs": ["The diversity rationale emerged with the Court's first encounter with a voluntary affirmative-action policy, in Bakke . There\u2014in an opinion for the Court joined by no other Justice\u2014Justice Powell explained what interests clearly would not count as compelling enough to satisfy strict scrutiny. Those included the Medical School's alleged interest in having \"some specified percentage\" of certain racial or ethnic groups in a student body and its interest in \"remedying ... the effects of societal discrimination,\" as well as the school's particular interest in \"the delivery of health-care services to communities currently underserved.\" None of these interests, Justice Powell concluded, provided a reason substantial enough to justify turning to race-conscious measures. Nor has the Court said otherwise since.", "But Justice Powell was also clear about what interest he believed would satisfy strict scrutiny: \"student body diversity.\" And just as importantly, he also explained why: colleges and universities, he suggested, had a uniquely academic interest in promoting an \"atmosphere of speculation, experiment, and creation\"\u2014an interest, more simply, in \"academic freedom.\" That interest, Justice Powell observed, was not only \"essential to the quality of higher education,\" but had also long \"been viewed as a special concern of the First Amendment.\" Thus the \"right to select those students who will contribute the most to the robust exchange of ideas\" not only allowed a university \"to achieve a goal that is of paramount importance in the fulfillment of its mission,\" it also represented a \"countervailing constitutional interest\" that, in Justice Powell's view, called for the Court's respect.", "In Bakke , Justice Powell set out the basic theory for why diversity could justify an affirmative action policy, at least \"in the context of a university's admissions program. But he gave few details about what that interest encompassed. As he saw it, that interest must have its limits: pursuing diversity would not allow a university to resort to racial quotas, for example, nor could the school disregard other \"constitutional limitations protecting individual rights.\" But Justice Powell declined to indicate where those other limitations fell or how they circumscribed the goals a university could permissibly seek in the name of a diverse student body. And because the Bakke Court fractured as it did, with no one opinion commanding a majority of the Justices' votes, the lessons of that case have been hard to discern, especially after the Court appeared to decline a similar diversity rationale in later cases outside higher education. Perhaps unsurprisingly, the lower courts soon came to reflect this uncertain division of opinion in later cases involving affirmative action programs at other public universities."], "subsections": []}, {"section_title": "2. \"Critical Mass\" and Diversity", "paragraphs": ["Some clarity over Bakke 's diversity theory came in 2003, with a pair of decisions reviewing affirmative action policies of the University of Michigan: Grutter v. Bollinger , challenging the university's law school admission program, and Gratz v. Bollinger , challenging the policy used by the university's undergraduate program. Grutter , especially, helped clarify what an interest in diversity involved, and how a university could rely on that interest to defend a race-conscious admissions policy.", "Under the admissions policy of the University of Michigan Law School ( the Law School) challenged in Grutter , applicants to incoming classes were admitted under a policy that weighed a composite of the applicant's LSAT score and undergraduate GPA along with several more individualized factors, including the applicant's race. The Law School set out to create classes with what it called a \"critical mass of underrepresented minority students,\" to ensure that those students felt \"encourage[d] ... to participate in the classroom and not feel isolated.\" The school, however, never explicitly assigned a numerical target for any particular racial group, though it did track, on an ongoing basis, \"the racial composition of the developing class.\" A rejected white applicant claimed the Law School's admission policy discriminated against her based on her race, in violation of the Equal Protection Clause and Title VI. And her challenge eventually reached the Supreme Court, alongside its companion case, Gratz , challenging the university's admissions policy for its undergraduate program.", "Given the uncertainties surrounding Bakke 's bottom line, the first major question in Grutter centered on the basic goal of the Law School's policy: Is achieving student diversity an interest compelling enough to justify a school's use of race at all in its admissions decisions? And for the first time the Supreme Court held that it was. Writing for a clear majority, Justice O'Connor adopted the view Justice Powell set out in Bakke : \"student body diversity is a compelling state interest that can justify the use of race in university admissions.\"", "More than that, the Court made clear that it was willing to defer to the Law School's understanding of that interest, and its goal of \"enroll[ing] a 'critical mass' of minority students.'\" As Justice O'Connor explained for the Court, by enrolling a \"critical mass\" of students, the Law School was trying to achieve the \"substantial\" \"educational benefits that diversity is designed to produce\"\u2014benefits such as \"promot[ing] cross-racial understanding,\" \"break[ing] down racial stereotypes,\" \"promot[ing] learning outcomes,\" and \"better prepar[ing students] as professionals.\" Achieving a \"critical mass\" of underrepresented students, the Court agreed, was simply one way that the Law School could try to vindicate those diversity-related educational benefits. And because this interest was deemed compelling enough to satisfy strict scrutiny, the Court was therefore willing to treat the school's use of the \"critical mass\" target as a permissible proxy for achieving those benefits.", "Not all the Justices agreed, however, that the university's invocation of \"critical mass\" made the diversity interest more concrete or compelling. In dissent, Justice Kennedy sided with Chief Justice Rehnquist's view that \"the concept of critical mass [was] a delusion used by the Law School to mask its attempt to make race an automatic factor in most instances and to achieve numerical goals indistinguishable from quotas.\" That \"delusion,\" according to Justice Kennedy, did not just make the school's appeal to \"critical mass\" \"inconsistent with [the] individual consideration\" of applicants. It also, in his view, turned the school's admissions policy into a veiled form of racial balancing. And all four dissenting Justices found that result incompatible with the Equal Protection Clause."], "subsections": []}, {"section_title": "3. From \"Critical Mass\" to \"Concrete and Precise Goals\"", "paragraphs": ["Grutter appeared to settle the major question left open by the fractured decision in Bakke : whether achieving student diversity was a compelling enough interest for a public university to justify its consideration of race in its admissions policies. Grutter confirmed not only that the Court still viewed student diversity as a compelling interest, but also that a school could vindicate that interest by seeking to enroll a \"critical mass\" of underrepresented minorities in its incoming classes.", "The ruling also effectively swept aside contrary lower court decisions that struck down other state universities' affirmative action policies, including in Texas. In the wake of Grutter , the University of Texas (UT Austin) decided to revisit its applicant review process, eventually choosing to introduce race as one of the factors considered in its admissions policy. Under the revised policy, UT Austin would continue to admit all Texas high school students who graduated in the top ten percent of their class, and fill in the rest of its incoming undergraduate classes using an index score incorporating two assessments: (1) an \"Academic Index\" (AI) that weighed the applicant's SAT score and academic record; and (2) a \"Personal Achievement Index\" (PAI) that included a more holistic appraisal of the student's character and, following post- Grutter revisions, also factored in the applicant's race. Abigail Fisher, a white Texas student whose application to UT Austin was rejected under this process, challenged the AI-PAI system. That system, she argued, had discriminated against her as a white applicant by allegedly allowing race to figure in the decision to reject her application, in violation of the Equal Protection Clause. Her challenge eventually made its way to the Supreme Court as Fisher v. University of Texas , where the Supreme Court remanded the challenge to the lower court to review UT Austin's policy under strict scrutiny ( Fis her I ), and then upon appeal upheld the school's admission policy ( Fis her II ).", "In her suit, Fisher did not challenge Grutter 's basic holding\u2014that the university had a compelling interest in student diversity, or even that the school could pursue that interest in diversity by enrolling a \"critical mass\" of underrepresented minorities. But when the Court finally took up her challenge on the merits in Fisher II , Justice Kennedy also took the occasion to revisit Grutter 's analysis, offering several \"controlling principles\" on behalf of the four-Justice majority that would guide its review of UT Austin's race-conscious admissions policy.", "In Fisher II , as in Fisher I , Justice Kennedy confirmed that Grutter 's bottom line remained good law: \"obtaining 'the educational benefits that flow from student body diversity,'\" he confirmed, was still an interest compelling enough to satisfy strict scrutiny. But perhaps mindful of his dissent in Grutter , Justice Kennedy also clarified that \"asserting an interest in the educational benefits of diversity writ large\" would not suffice. That, he explained, would make the \"university's goals\" too \"elusory or amorphous\" \"to permit judicial scrutiny of the policies adopted to reach them.\"", "The Court thus cut two new benchmarks for reviewing a university's asserted interest in resorting to race as a factor in its admissions policy. First, the university had to articulate \"precise and concrete goals\" that its race-conscious policy served, goals \"sufficiently measurable\" under \"judicial scrutiny.\" And, second, the university had to provide a \"'reasoned, principled explanation' for its decision to pursue those goals\"\u2014a sound academic rationale, in other words, for wanting to achieve whatever diversity-related goals it set for itself. In the majority's view, UT Austin's use of race in its admissions decisions measured up to both benchmarks.", "According to the Court, the first benchmark was straightforwardly met: the goals UT Austin articulated, Justice Kennedy pointed out, effectively \"mirror[ed] the 'compelling interest' th[e] Court ha[d] approved in its prior cases.\" And under Grutter , the majority concluded, those benefits passed constitutional muster.", "Notably, however, achieving critical mass was not among those Justice Kennedy listed. Nor did Justice Kennedy return to the question he raised in Grutter : whether the \"critical mass\" concept even has a place among the \"concrete and precise goals\" that could survive strict scrutiny. But that question was also arguably beside the point in Fisher II . As Justice Kennedy emphasized for the Court, the goals that UT Austin articulated were clearly constitutionally adequate, having come nearly verbatim from the Court's case law. And the university's officials had all offered \"the same, consistent 'reasoned, principled explanation'\" for pursuing them\u2014meeting the Court's second benchmark. That was apparently enough for the Court to conclude that a compelling interest justified the university's diluted use of race in its holistic review of applications."], "subsections": []}]}, {"section_title": "The Harvard Plan and the Five Hallmarks of Narrow Tailoring", "paragraphs": ["With Fisher I and II , the Court reiterated that the educational benefits that come with a racially diverse student body count among the few interests compelling enough to survive strict scrutiny. But Fisher I and II also narrowed that interest: seeking student body diversity had to involve objectives more specific than the simple desire for \"diversity writ large.\" Rather, under the Fisher formulation, the university must articulate the \"concrete and precise goals\" it expects its affirmative action policy to accomplish, along with a \"reasoned, principled explanation\" of why it has chosen to pursue them. So long as a university does that, it will likely have a strong case, under Fisher I and II , that a compelling interest supports its use of a race-conscious admissions policy.", "That, however, is only the first of two tests that a policy has to pass under strict scrutiny. The second\u2014probing whether the university has narrowly tailored its policy to achieve those diversity-related benefits\u2014has proved equally critical in the Court's review of affirmative action policies. And once again owing to Justice Powell's opinion in Bakke , the Court appears to have embraced a model of what a narrowly tailored policy looks like: Harvard College's admissions program endorsed in Bakke , now more commonly known as the \"Harvard plan.\" The Harvard plan has also provided the Court with a basis for developing more specific criteria for evaluating other affirmative action policies\u2014what one court has described as the \"five hallmarks of a narrowly tailored affirmative action plan.\""], "subsections": [{"section_title": "A Narrowly Tailored Affirmative Action Policy: Bakke's Harvard Plan", "paragraphs": ["The first affirmative action program to come before the Court\u2014the policy challenged in Bakke at U.C. Davis's Medical School\u2014was also the first to falter under the Court's scrutiny. But because the Justices were unable to cobble together a majority there, they also settled on no single rationale for why the Medical School's policy could not survive the Court's scrutiny. This uncertainty left the lower courts without clear guidance on the permissibility of race-conscious admissions policies structured differently than the one struck down in Bakke . ", "In announcing the judgment in Bakke , however, Justice Powell offered a clear reason why, in his view, the Medical School's policy could not survive a challenge under the Equal Protection Clause. The school's 16-seat set-aside for minority students was not \"the only effective means of serving [the school's] interest in diversity\" \u2014in constitutional parlance, the set-aside was not narrowly tailored. And to explain why not, Justice Powell pointed to the Harvard plan as an example of an appropriately tailored affirmative action policy.", "That plan, according to Justice Powell, had several significant features that distinguished it\u2014favorably\u2014from the set-aside struck down in Bakk e :", "In [Harvard's] admissions program, race or ethnic background [is] deemed a \"plus\" in a particular applicant's file, yet it does not insulate the individual from comparison with all other candidates for the available seats. The file of a particular black applicant may be examined for his potential contribution to diversity without the factor of race being decisive when compared, for example, with that of an applicant identified as an Italian-American if the latter is thought to exhibit qualities more likely to promote beneficial educational pluralism. Such qualities could include exceptional personal talents, unique work or service experience, leadership potential, maturity, demonstrated compassion, a history of overcoming disadvantage, ability to communicate with the poor, or other qualifications deemed important ... [And] the weight attributed to a particular quality may vary from year to year depending upon the 'mix' both of the student body and the applicants for the incoming class.", "Unlike this \"flexible\" system of review, the Medical School policy at issue in Bakke was rigid: reserving a predetermined number of seats for a \"selected ethnic group.\" In Justice Powell's view, that technique effectively precluded a more holistic review, that \"treats each applicant as an individual.\" \"[R]ace or ethnic origin,\" as he saw it, did not serve as \"a single though important element\" of an applicant's file in the Medical School's policy; it had instead become a factor that \"foreclosed\" other applicants \"from all consideration for [certain] seat[s] simply because [they were] not the right color or had the wrong surname.\" A program like that, Justice Powell concluded, could not be narrowly tailored\u2014precisely because another more individualized and \"holistic\" model, like Harvard's, could serve instead."], "subsections": []}, {"section_title": "Ratifying the Harvard Model", "paragraphs": ["Even if Bakke suggested that the Court's scrutiny of a race-conscious admissions policy would be every bit as strict as for other racial classifications, later cases have made clear that such scrutiny need not always be fatal. The companion cases of Grutter v. Bollinger and Gratz v. Bollinger offer clear examples: each involved affirmative action admissions policies at the University of Michigan, and each yielded a different bottom line, with the Court upholding the Law School's policy in Grutter while striking down the university's undergraduate admissions policy in Gratz . But those diverging results appeared to proceed from a common starting point: how closely the challenged admissions policy resembled the Harvard plan.", "In the case of the Law School's admissions policy, the Court found the resemblance quite close. As Justice O'Connor explained for the Court in Grutter , \"the Law School engages in a highly individualized, holistic review of each applicant's file, giving serious consideration to all the ways an applicant might contribute to a diverse educational environment.\" It therefore did not award \"mechanical, predetermined diversity 'bonuses' based on race or ethnicity.\" And \"[l]ike the Harvard Plan, the Law School's admissions policy\" accorded each applicant the same sort of flexible consideration that Justice Powell had called for in Bakke .", "That \"policy st[ood] in sharp contrast,\" however, with the way the Court viewed the university's undergraduate admissions policy in Gratz . Under the undergraduate policy, admissions officers automatically awarded \"20 points, or one-fifth of the points needed to guarantee admission, to every single 'underrepresented minority' applicant solely because of race.\" As Chief Justice Rehnquist explained for the Court, that policy therefore violated a basic feature of \"[t]he admission program Justice Powell described\" in Bakke \u2014a program that \"did not contemplate that any single characteristic automatically ensured a specific and identifiable contribution to a university's diversity.\" The result was a policy that did not \"offer applicants the individualized selection process described in Harvard's example,\" and that could consequently not pass strict scrutiny.", "On that point Justice O'Connor also agreed. As she explained in supplying her decisive fifth vote, the undergraduate policy simply did not \"enable[] admissions officers to make nuanced judgments with respect to the contributions each applicant is likely to make to the diversity of the incoming class,\" unlike the Law School's more holistic policy. This was true even though the undergraduate policy \"assign[ed] 20 points to some 'soft' variables other than race,\" such as \"leadership and service, personal achievement, and geographic diversity.\" None of that, in Justice O'Connor's view, could counteract the more problematic effect of those factors' being \"capped at much lower levels,\" so that \"even the most outstanding national high school leader could never receive more than five points for his or her accomplishments\u2014a mere quarter of the points automatically assigned to an underrepresented minority solely based on the fact of his or her race.\" That weighting, though not problematic in all cases, had all but ensured there \"that the diversity contributions of applicants [could not] be individually assessed.\" A thumb pressed that heavily on the racial scale, Justice O'Connor concluded, came too close to the \"nonindividualized, mechanical\" balancing condemned by Bakke to survive strict scrutiny."], "subsections": []}, {"section_title": "Five Hallmarks of a Narrowly Tailored Admissions Policy", "paragraphs": ["Despite their contrasting results, Gratz and Grutter gestured at several basic criteria by which to assess a university's race-conscious admissions policy. Those criteria, as the U.S. Court of Appeals for the Ninth Circuit later described them, could be summed up in \"five hallmarks of a narrowly tailored affirmative action plan.\" And all five can be traced in one way or another to Justice Powell's analysis of the Harvard plan.", "1. No Quotas.", "Perhaps the clearest violation of the requirement that a policy be narrowly tailored is the use of racial quotas. As Justice O'Connor explained in Grutter , a \"'quota' is a program in which a certain fixed number or proportion of opportunities are reserved exclusively for certain minority groups,\" consequently \"insulat[ing] the individual [applicant] from comparison with all other candidates for the available seats.\" And as Justice Powell emphasized in Bakke , and as has been consistently reaffirmed by the Court since, \"[t]o be narrowly tailored, a race-conscious admissions program cannot use a quota system.\" This ban on quotas therefore precludes the use of a rigid set-aside like the one challenged in Bakke . And it likewise rules out the sort of \"mechanical,\" automatic points system that was once in place at the University of Michigan's undergraduate college and was later invalidated in Gratz .", "2. Individualized Consideration.", "The flip side of the Court's refusal to accept racial quotas has been its insistence on individualizing the consideration of applicants. As Justice Kennedy reaffirmed in Fisher I , echoing Justice Powell's description of the Harvard plan in Bakke , an appropriately tailored program \"must 'remain flexible enough to ensure that each applicant is evaluated as an individual and not in a way that makes an applicant's race or ethnicity the defining feature of his or her application.'\" And as the Court suggested in Gratz and Grutter , an acceptable plan will therefore engage in a \"highly individualized, holistic review of each applicant's file, giving serious consideration to all the ways an applicant might contribute to a diverse educational environment.\" Such review allows \"the use of race as one of many 'plus factors' in an admissions program,\" like in the University of Michigan Law School's policy upheld in Grutter . It also appears to bar a school from \"automatically award[ing] points to applicants from certain racial minorities\" as an effectively decisive factor, as it became under the university's undergraduate policy.", "3. Serious, Good-Faith Consideration of Race-Neutral or More Flexible Alternatives. ", "Neither of these two criteria, however, implies that a university must exhaust \"every conceivable race-neutral alternative\" before turning to a race-conscious policy. Instead, a university need only provide evidence that it undertook \"serious, good faith consideration of workable race-neutral alternatives\" before resorting to its choice of a race-conscious plan, but that those alternatives either did not suffice to meet its approved educational goals or would have required some sacrifice of its \"reputation for academic excellence.\" The same holds true, moreover, of more flexible race-conscious alternatives. Thus Justice Powell explained in Bakke that the Medical School's program was not narrowly tailored when the school could have adopted the more individualized, holistic program then in use at Harvard, an option the Medical School apparently did not consider.", "4. No Undue Harm.", "Even though the Court has allowed the use of race-conscious admissions policies under the exacting standard of strict scrutiny, it has also long \"acknowledge[d] that 'there are serious problems of justice connected with the idea of preference itself.'\" In Grutter , Justice O'Connor drew another corollary from that apparent discomfort with racial preferences. \"[A] race-conscious admissions program,\" she explained, must \"not unduly harm members of any racial group.\" What this corollary means more specifically remains unclear; so far it has received only passing attention from the Court. At the least, Justice O'Connor suggested, a race-conscious admissions policy must not \"unduly burden individuals who are not members of the favored racial and ethnic groups.\" And in Grutter , Justice O'Connor put more flesh on that analysis: an affirmative action policy that closely resembled the Harvard plan, she suggested, would not \"unduly harm\" other applicants. It remains to be seen, however, whether this principle might take on new life in the Court's review of other plans.", "5. Ongoing Review.", "In Grutter , Justice O'Connor also drew a fifth and final corollary from the basic premise that the Fourteenth Amendment was meant \"to do away with all governmentally imposed discrimination based on race.\" \"[R]ace-conscious admissions policies,\" she concluded, \"must be limited in time.\" This requirement, Justice O'Connor explained for the Court, reflected a consideration apparently unique to racial classifications: \"however compelling their goals, [they] are potentially so dangerous that they may be employed no more broadly than the interest demands.\" Doctrinally, this meant there could be no \"permanent justification\" for race-conscious admissions policies in higher education; sooner or later they had to end, as the university conceded in its briefing. Practically, this \"logical end point\" could come in one of several ways. It could take the form of an explicit \"durational limit,\" such as a sunset provision. Or it could arrive as a result of \"periodic reviews to determine whether racial preferences are still necessary to achieve student body diversity.\" But, however a university chooses to pursue that end, it has an \"ongoing obligation to engage in constant deliberation and continued reflection regarding its admissions policies\" and the role race plays in them, or whether it should continue to play one at all.", "For several Justices this ongoing obligation of review also pointed to something more definite\u2014an expiration date, when \"the use of racial preferences will no longer be necessary to further [the school's] interest\" in student body diversity. Looking back over the quarter-century since Bakke , Justice O'Connor \"expect[ed]\" that day to come twenty-five years after casting her deciding votes in Gratz and Grutter \u2014ten years from this writing. What exactly this meant, as either a practical or doctrinal matter, also remains unclear. Indeed, even then several of her fellow Justices seemed less sure, or simply unsure, what to make of that unusually specific constitutional deadline. But with six Justices having since departed the Court, Justices O'Connor and Kennedy included, it remains to be seen whether in the next ten years race-conscious admissions policies will reach this foreordained \"logical end point.\"", "What seems clear for now, however, is that the Harvard plan described in Bakke remains the Court's working model of a constitutionally satisfactory race-conscious admissions policy. And that, as the Court has consistently said since, is a policy capable of achieving the diversity \"essential\" to the life of a modern university, while still \"treat[ing] each applicant as an individual.\""], "subsections": []}]}]}, {"section_title": "Title VI and Higher Education", "paragraphs": ["Race has come to play two major doctrinal roles in higher education today, mirroring the two senses of \"affirmative action\" discussed in this report: the mandatory role, rooted in the affirmative obligation states have to eliminate the vestiges of de jure segregation, and the voluntary role, particularly in admissions decisions at selective colleges and universities. In the context of higher education, the Court has so far considered these two forms of \"affirmative action\" only in relation to public universities, and then primarily as a matter of constitutional law, under the Fourteenth Amendment's Equal Protection Clause. But many of those cases have also involved claims brought under Title VI of the Civil Rights Act of 1964 (Title VI or the Act). And while the Court has read Title VI's protections to overlap with the Equal Protection Clause, Congress still has a significant say over the substantive scope of Title VI as well as its enforcement."], "subsections": [{"section_title": "Agency Interpretation and Enforcement of Title VI", "paragraphs": ["Title VI generally protects participants in federally funded \"program[s] or activit[ies]\" from discrimination based on their \"race, color, or national origin.\" To ensure that statutory right, the Act grants all federal funding agencies the authority to issue implementing regulations, and the power to enforce the regulations they issue. In practice, much of the interpretive authority falls to the U.S. Department of Justice (DOJ), and for educational programs, the U.S. Department of Education (ED). Both DOJ and ED have also established their own processes for receiving and investigating complaints of suspected Title VI violations. ED, meanwhile, has also issued its own set of rules to govern the federal education dollars it disburses each year, reaching some 4,700 colleges and universities.", "Every agency that awards federal funds\u2014ED included\u2014has the authority not just to issue implementing regulations but to enforce those rules against noncompliant recipients, including through an investigation that may, upon a finding of noncompliance, result in the termination, suspension, or refusal to grant federal funds. Thus, for example, where ED finds a school in violation of Title VI or its implementing regulations the department may seek to cut off federal funding through an \"administrative fund termination proceeding,\" as it has in at least some cases. And since the passage of the Civil Rights Restoration Act of 1987, the courts have read the scope of liability under Title VI broadly. With respect to the termination of funds, a Title VI violation in one program at a college or university could therefore jeopardize funding for the institution as a whole.", "Withdrawing funds may be the ultimate means of enforcing Title VI, but it is far from exclusive. DOJ, for its part, has also sought to achieve compliance through the federal courts, intervening in some private suits alleging Title VI violations and otherwise representing executive branch agencies, such as ED, in lawsuits seeking enforcement of Title VI. DOJ has participated in cases challenging practices of formerly de jure segregated public university systems as well as in settlements resolving such Fordice -related claims. DOJ has also taken a position in cases challenging affirmative action admissions policies, most recently in the ongoing litigation surrounding Harvard College's admissions policies. ED has ventured into this area as well, having recently opened investigations into the admissions decisions at several prominent private universities."], "subsections": []}, {"section_title": "Congress and Title VI", "paragraphs": ["Congress continues to have considerable say over how Title VI works\u2014at least within the parameters of the Supreme Court's equal protection jurisprudence. Perhaps the most direct way of doing so is by amendment. As a general matter, Congress could revise Title VI in one of two directions, to make the statute either (1) more restrictive than the Court's current Equal Protection jurisprudence or (2) expressly permissive of race-conscious measures that the Court has upheld or has thus far not addressed.", "In the more restrictive direction, Congress could prohibit recipients of federal funds from using voluntary race-conscious measures at all\u2014a result that four Justices in Bakke argued Title VI already requires, but which the Court has so far not embraced. A statutory revision of that kind would also implicitly reject the Harvard Plan discussed in Bakke , by excluding race as a permissible factor in admissions decisions at the many universities subject to Title VI, including the many private universities that receive federal funds. And, consequently, an amendment along these lines would make unlawful the type of admissions policies that the Court has approved under the Equal Protection Clause, like those at issue in Grutter and Fisher II .", "On the other hand, Congress could expressly open other avenues for effectuating Title VI's antidiscrimination mandate. This could include incorporating a private right of action to bring suit under Title VI, which, at present, is an implied right with no statutorily defined remedies. More consequentially, Congress could also amend Title VI to provide for disparate impact liability\u2014that is, a Title VI violation based on a funding recipient's use of certain policies or practices that disproportionately and negatively impact members of a protected class, as already exists under Title VII of the same Act. A provision addressing disparate impact liability\u2014either its availability or foreclosure under Title VI\u2014would resolve a significant and ongoing debate on the issue. Such an addition would also be one way of clarifying whether Congress does in fact intend for Title VI to be read coextensively with the Equal Protection Clause.", "Beyond legislative amendments, Congress also exercises oversight over the agencies charged with carrying out Title VI's antidiscrimination mandate. As discussed earlier, DOJ and ED are primarily responsible for enforcing Title VI in educational programs. For its part, ED investigates and seeks compliance through its Office for Civil Rights, while the Educational Opportunities Section of the Department of Justice's (DOJ's) Civil Rights Division typically enforces Title VI in educational programs for the department. Both offices maintain public archives documenting their past and current investigations, as well as wider-ranging reports detailing their enforcement priorities and investigatory procedures. And because Title VI applies to a wide variety of entities that receive federal financial assistance, not just colleges and universities, DOJ also publishes news and updates on Title VI enforcement activity in other programmatic areas, from agencies across the federal government."], "subsections": []}]}, {"section_title": "Conclusion", "paragraphs": ["Race has come to play two major doctrinal roles in higher education today, reflecting the two senses of \"affirmative action\" discussed in this report. \"Affirmative action\" in its original sense grew out of the affirmative obligation imposed on the states by the Equal Protection Clause to eliminate the vestiges of de jure segregation from their public schools. And in that sense, \"affirmative action\" involves the mandatory use of race-conscious measures in higher education to right the enduring wrongs of state-sanctioned segregation. But \"affirmative action\" has also come to refer to race-conscious policies outside this de jure context\u2014policies voluntarily adopted by institutions to help racial minorities overcome the effects of their earlier exclusion. In higher education, none has been more salient\u2014or stirred more debate\u2014than the race-conscious admissions policies that colleges and universities across the country have used to diversify their student bodies.", "Thus far, remedial measures addressing de jure segregation, and voluntary measures designed to promote student-body diversity, have been the only race-conscious measures that the Court has approved under the Equal Protection Clause. And both remain areas of active litigation and administrative enforcement. Over the years, however, the Court has made it clear that it will subject voluntary \"affirmative action\" policies to especially close scrutiny, approving them only when they can be shown to be narrowly tailored to serve compelling educational goals. It has approved such polices twice already, most recently in 2016. Still, several Justices have suggested that the rationales supporting these voluntary race-conscious measures will one day run out. But for the time being, at least, these two lines of authority nevertheless provide a place for affirmative action in higher education today.", "This authority, however, leaves questions as of yet unexplored. It appears to be an open question, for example, whether a public institution of higher education can cite its own history of intentional exclusion, or else its \"past discrimination,\" as a basis for adopting a race-conscious admissions policy, among other measures. Whether\u2014and how\u2014the courts might assess such untested arguments would likely turn on a range of factors, including the further development of the two lines of authority addressed in this report. Regardless of those and other possible developments, however, Congress still has a significant say in in this area, through its authority not just to revise Title VI but to oversee the Act's enforcement."], "subsections": []}]}}
{"id": "R44001", "title": "Introducing a House Bill or Resolution", "released_date": "2019-01-31T00:00:00", "summary": ["Authoring and introducing legislation is fundamental to the task of representing voters as a Member of Congress. In fact, part of what makes the American political process unique is that it affords all Members an ability to propose their own ideas for chamber consideration. By comparison, most other democratic governments around the world rely on an executive official, often called a premier, chancellor, or prime minister, to originate and submit policy proposals for discussion and enactment by the legislature. Legislators serving in other countries generally lack the power to initiate legislative proposals of their own.", "In the American political system, ideas and recommendations for legislation come from a wide variety of sources. Any number of individuals, groups, or entities may participate in drafting bills and resolutions, but only Members of Congress may formally introduce legislation, and they may do so for any reason.", "When a Representative has determined that a bill or resolution is ready for introduction, it is placed in the box, or \"hopper,\" at the bill clerk's desk on the chamber floor when the House is in session. The sponsor must sign the measure and attach the names of any original cosponsors on a form provided by the Clerk's office. Cosponsors do not sign the bill, but sponsors are \"encouraged\" by the Speaker to obtain original signatures from cosponsors prior to submitting the cosponsorship form. Since the 112th Congress, House rules have required Members to provide at the time of introduction a statement of constitutional authority indicating why Congress has the authority to enact the proposed bill or joint resolution. There is no House rule that introduced bills and resolutions must be prepared by the House Office of the Legislative Counsel, but that office plays an important role by providing Members and staff, at their request, with drafts of legislation. Use of the office by Members and staff is nearly universal.", "Once introduced, the Speaker refers legislation to one or more committees based primarily on how its contents align with the subject matter jurisdictions of committees established in clause 1 of House Rule X. In practice, the Office of the Parliamentarian advises the Speaker in these referral decisions, and the Parliamentarian's recommendations are followed in virtually every case.", "This report is intended to assist Members and staff in preparing legislation for introduction. Its contents address essential elements of the process, including bill drafting, the mechanics of introduction, and the roles played by key House offices involved in the drafting, submission, and referral of legislation. Statistics on introduced measures are presented in the final section, and a brief explanation of patterns of introduction over time is also provided."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Developing Ideas for Legislation", "paragraphs": ["\"Ideas can come from anywhere,\" a scholar of American politics once wrote. To be sure, ideas and recommendations for legislation come from a wide variety of sources, such as individual Representatives; committees and other House working groups; legislative staff; party and chamber leaders; executive branch agencies and the White House; states and localities; members of the media; citizens; and interest groups. Any or all of these individuals or entities may participate in drafting legislation, but only a Member of Congress may formally introduce legislation. Some common considerations taken into account when drafting a bill include the following:", "What problem does the bill seek to address? Understanding the source of a problem is necessary in order to properly address it. An abundance of information is available to Members in the form of reports, studies, and presentations offered by a wide range of individuals, groups, and organizations, including CRS. Soliciting expert testimony in the context of a committee hearing is another common method by which the House gathers relevant information for use in policymaking. To what committee(s) is it likely to be referred? Committee referral can matter because one committee might be especially receptive to the proposed legislation in comparison to another committee. Members may also prefer that their bill be referred to a committee on which they serve in order to ensure their continued involvement at the committee stage of proceedings. Will the bill attract cosponsors? Cosponsorship conveys a Member's support for a measure, so bills that attract many cosponsors could be seen as enjoying broad support within the chamber. A measure with many cosponsors, especially if they include committee and party leaders, could encourage the relevant committee chair to take some action on the legislation, such as hold hearings on it. Does it have bipartisan appeal? Building a coalition of support for a proposal can take time, and some amount of bipartisan cooperation may be required to secure final passage. Measures that are limited in scope but have broad bipartisan appeal are often brought to the House floor under suspension of the rules, a parliamentary procedure that limits debate and amendment and requires a supermajority vote of two-thirds for a measure to pass. What are the budgetary implications? The House places a number of restrictions on legislation with budgetary consequences. For instance, if a proposal adds to the federal deficit, it may be subject to a point of order on the chamber floor for violating congressional budget rules (many of which are codified in the Congressional Budget Act of 1974). Support for a measure may also hinge on how its costs are paid for. Members may agree about the merits of a bill but disagree with how its provisions are funded. Should companion legislation be introduced in the Senate? To become law, a bill or joint resolution must pass both houses of Congress in identical form (the same text and bill number) and be signed by the President. For this reason, House sponsors sometimes encourage allies in the Senate to introduce identical or similarly worded legislation to expedite bicameral consideration. Companion bills might also attract wider public and Member attention to the issues addressed in the legislation. Is the measure best introduced at the beginning, in the middle, or toward the end of a Congress? Timing the introduction of a measure can be important. Comprehensive legislation is likely to require a great deal of time to work through, both in committee and on the floor. An early introduction will give the House more time to examine the measure's provisions. Advantage might also be gained by being the first to address an issue. Those who move first tend to attract media attention and may be seen by their colleagues as exercising leadership in that particular policy area.", "Strategic delay is another option. This approach might provide more time for an individual or committee to study the issue and build support for a preferred solution. To be sure, many bills do not follow a linear (or \"regular order\") legislative process\u2014introduction, consideration in committee, and arrival on the floor for further debate and amendment. For example, a legislative proposal that had languished in committee might suddenly be taken up because it deals with an unfolding crisis or emergency."], "subsections": []}, {"section_title": "Drafting Legislation", "paragraphs": ["There is no House rule that introduced bills and resolutions must be prepared by the House Office of the Legislative Counsel, but the office plays an important role by providing Members and staff, at their request, with drafts of legislation. Use of the office by Members and staff is nearly universal. Its staff attorneys are both subject matter specialists and experts in legislative drafting, and they focus almost exclusively on policy issues within their areas of expertise. Legislative attorneys are often assigned to serve a specific committee or committees as a kind of nonpartisan, shared staff, and they work closely with committee members and staff to ensure that the bill's language and form matches the intent of its sponsor and adheres to drafting rules and linguistic traditions of the House.", "Several drafts may be required before a measure is ready for formal introduction. Those drafting legislation may seek assistance from the Office of the Legislative Counsel at any stage. All communications with the office are treated as confidential. The office is located in Room 337 of the Ford House Office Building and can be reached at extension 5-6060 or by sending an email request to legcoun@mail.house.gov.", "Following introduction, the Speaker refers legislation to the appropriate committee(s) based primarily on how its contents align with the subject matter jurisdictions of committees established in clause 1 of House Rule X. According to clause 2 of House Rule XII, the Speaker shall refer legislation", "[I]n such a manner as to ensure to the maximum extent feasible that each committee that has jurisdiction under clause 1 of rule X over the subject matter of a provision thereof may consider such provision and report to the House thereon.", "The Office of the Parliamentarian advises the Speaker on committee referrals. In practice, the Parliamentarian has been delegated the responsibility for committee referrals. Representatives and staff involved in drafting legislation may consult the Office of the Parliamentarian regarding the committee(s) to which their draft measure might be referred. The office is located in Room H-209 of the Capitol (5-7373)."], "subsections": []}, {"section_title": "Introducing a Bill or Resolution", "paragraphs": ["The formal procedures that govern the introduction of legislation are few and are found in House Rule XII. \"The system for introducing measures in the House is a relatively free and open one,\" wrote former House Parliamentarian William Holmes Brown. House rules do not limit the number of bills a Member may introduce. Members may introduce legislation for any number of reasons, and they may do so on behalf of another individual, entity, or group \"by request.\" Between 1973 and 2018, Members introduced an average of about 20 bills and resolutions each per Congress. Statistics on introduced measures are presented in Table 1 .", "When a Representative has determined that a bill or resolution is ready for introduction, it is placed in the box, or \"hopper,\" at the bill clerk's desk on the chamber floor when the House is in session, including a \"pro forma\" session. The hopper is pictured in Figure 1 . The sponsor must sign the measure and attach the names of any original cosponsors on a form provided by the Clerk's office, which is located in Room H-154 of the Capitol Building (5-7000). Cosponsors do not sign the bill. Under the Speaker's announced policies of the 116 th Congress (2019-2020), sponsors are \"encouraged\" to obtain original signatures from cosponsors prior to submitting a cosponsorship form.", "The bill as drafted by legislative counsel leaves space both for the insertion of a bill number, which is assigned chronologically based on the date of introduction, and for the Parliamentarian's office to note the committee(s) to which the measure was referred. A Member need not seek recognition from the chamber's presiding officer in order to introduce a measure. Following introduction, Members often summarize the purpose and merits of their proposal in a statement published in the \"Extension of Remarks\" section of the Congressional Record .", "Since the 112 th Congress, House rules have required Members to provide at the time of introduction a statement of constitutional authority indicating why Congress has the authority to enact the proposed bill or joint resolution. The bill clerk does not accept a bill or joint resolution for introduction that lacks a constitutional authority statement. Clause 7(c) of Rule XII establishes that the statement must be as \"specific as practicable,\" and must be attached to the bill when it is dropped in the hopper for introduction. If no such statement is provided, then the measure will be returned to its sponsor. A point of order cannot be lodged against a bill based on the content of a constitutional authority statement.", "A sponsor may not reclaim a measure he or she has placed in the hopper after it has been assigned a number and referred to committee (a process that normally occurs the same day). Once a measure has been numbered and referred, it becomes the property of the House and cannot be modified by the sponsor. It is too late at this point to make any changes to the bill\u2014however cosmetic they might be\u2014except by amending the bill on the House floor during its consideration. Introduced bills or resolutions can be taken up by the House even if the sponsor resigns from the House or dies.", "In the first days of a new Congress, hundreds of bills and resolutions are introduced. Measures are usually numbered sequentially based on the date of introduction, but Representatives may seek to reserve bill numbers in advance by communicating with the Parliamentarian's office prior to introduction. Bill numbers are sometimes seen as a way to provide shorthand meaning to the legislation, enhance its visibility, or confer symbolic importance. Measures have sometimes been assigned the same number for several Congresses, perhaps because lawmakers and others have grown accustomed to referring to a bill by its number. For instance, sponsors of tax reform proposals may request H.R. 1040 as a bill number to draw attention to the 1040 tax form many individuals use to pay federal income taxes. By the same logic, a bill addressing ocular health or medical coverage for eyeglass and contact lenses might take the number H.R. 2020 because 20/20 is considered normal vision.", "In recent Congresses, the House has ordered that bill numbers H.R. 1 through H.R. 10 be reserved for assignment by the majority leader and numbers H.R. 11 through H.R. 20 be reserved for the minority leader. These bills, sometimes called \"message\" bills because they often represent the top agenda items of each political party, tend to generate considerable attention and coverage."], "subsections": []}, {"section_title": "Statistics on Introduced Measures", "paragraphs": ["The number of bills and resolutions introduced in a given Congress fluctuates over time as Table 1 shows. Some of this variation can be explained on the basis of changes in House rules and practices. From 1968 to 1978, for instance, a limit of 25 was placed on the number of cosponsorships a measure could obtain. One effect of this rule was to encourage the introduction of identically worded legislation (with a new bill number) to allow additional Members to sign on as cosponsors. The cosponsorship limit was removed in 1979, which accounts in part for the drop in introduced measures between the 95 th and 96 th Congresses. No longer was it necessary to introduce duplicative bills for the purpose of gaining cosponsors.", "The House has also sought to reduce the amount of commemorative legislation it considers. The rules for the 104 th Congress (1995-1996), for instance, included new restrictions on the introduction of measures that would express a commemoration \"through the designation of a specified period of time.\" The decline in the number of introduced measures in that Congress might be attributed at least in part to the new rule. The 116 th Congress (2019-2020) maintains this ban on temporal commemorations.", "Most measures are introduced by individual Members. Five House committees (Appropriations, Budget, Ethics, House Administration, and Rules) may also draft and report an \"original\" measure on specific subjects identified in House rules. This means that those particular committees do not have to wait for measures to be referred to them in order to act. The committee chair is often considered the sponsor when a committee reports original legislation, although the measure is perhaps best understood as a product that incorporates views and input from other committee members as well."], "subsections": []}]}}
{"id": "RS20120", "title": "Legislative Support Resources: Offices and Websites for Congressional Staff", "released_date": "2019-03-19T00:00:00", "summary": ["This report provides a brief list of key House, Senate, legislative support agencies, and executive branch offices, as well as links to online resources of use to new congressional staff who work with legislative procedures and conduct legislative research. Some of the websites listed are available only to congressional offices; other sites are restricted by chamber and are only available to those staff working in either House or Senate offices. This report is intended for congressional use only and will be updated annually."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "House Offices and Websites", "paragraphs": ["H ouse of Representatives Website http://www.house.gov House offices only (HouseNet): http://housenet.house.gov", "Websites of Representatives, leadership offices and organizations, committees, and support offices. The restricted HouseNet website serves as a portal to the other \"House Offices Only\" websites described below and includes access to \"Dear Colleague\" letters and commercial database subscriptions, including ProQuest Congressional.", "Clerk of the House H-154 Capitol [phone number scrubbed] http://clerk.house.gov House offices only: https://housenet.house.gov/campus/service-providers/legislative-resource-center/office-of-the-clerk", "For assistance with archiving records, Congressional Record submissions, introduction of legislation, submission of amendments, and roll call vote questions.", "Ho use Legislative Resource Center 292 Cannon House Office Building [phone number scrubbed] To order publications: [phone number scrubbed] or email [email address scrubbed] http://clerk.house.gov/about/offices_lrc.aspx House offices only: https://housenet.house.gov/campus/service-providers/legislative-resource-center", "For current and historical House documents, directories, payroll and financial disclosure reports, and lobbyist registrations. The House Legislative Resource Center is a part of the House Library (see below).", "House Legislative Counsel 337 Ford House Office Building [phone number scrubbed] https://legcounsel.house.gov House offices only: http://legcoun.house.gov/members/ ", "For assistance with legislative drafting and preparation of conference reports.", "House Library B81 Cannon House Office Building [phone number scrubbed] http://library.clerk.house.gov House offices only: http://library.house.gov", "Provides legislative reference assistance for House offices, including assistance in searching Congress.gov; offers classes on research topics, such as using the ProQuest Congressional database; preserves House documents and has the most complete collection of House publications. Also provides access to various subscription databases only available onsite at the House Library.", "House Parliamentarian H209 Capitol [phone number scrubbed] http://www.house.gov/content/learn/officers_and_organizations/parliamentarian.php", "For assistance with legislative rules, precedents, and practices.", "House Technology Call Center H2-694 Ford House Office Building [phone number scrubbed] or [phone number scrubbed] House offices only: https://housenet.house.gov/technology", "For technical assistance with, and training on, office computers and wireless devices, websites, software, and databases."], "subsections": []}, {"section_title": "Senate Offices and Websites", "paragraphs": ["Senate Website http://www.senate.gov Senate offices only (Webster): http://webster.senate.gov ", "Websites of Senators, leadership offices and organizations, committees, and support offices. The restricted Webster website is a portal to the various \"Senate Offices Only\" sites described below and also provides access to commercial database subscriptions, including ProQuest Congressional and LexisNexis.", "Secretary of the Senate S312 Capitol [phone number scrubbed] To order publications: [phone number scrubbed] Senate offices only: http://webster.senate.gov/secretary ", "For current and historical Senate documents, directories, payroll and financial disclosure reports, archival assistance, and lobbyist registrations.", "Note: The Senate Document Room is located at B04 Hart Senate Office Building and can be reached at [phone number scrubbed].", "Senate IT/Computer Supp or t Services 2 Massachusetts Avenue, NE (Postal Square Building, 6 th Floor) [phone number scrubbed] Senate offices only: http://webster.senate.gov/officeequipment/computers/itcomputer-support/", "Provides technical assistance with, and training on, office computers and wireless devices, websites, software, and databases.", "Senate Legislative Counsel 668 Dirksen Senate Office Building [phone number scrubbed] http://slc.senate.gov", "For assistance with legislative drafting and preparation of conference reports.", "Senate Library B15 Russell Senate Office Building [phone number scrubbed] or email [email address scrubbed] Senate offices only: http://webster.senate.gov/library ", "Provides reference assistance for Senate offices, including assistance in searching Congress.gov. Offers classes on research topics and has the most complete collection of Senate publications.", "Senate Parliamentarian S133 Capitol [phone number scrubbed] Senate offices only: http://webster.senate.gov/secretary/departments/Parliamentarian", "For assistance with legislative rules, precedents, and practices."], "subsections": []}, {"section_title": "Additional Legislative Support Resources", "paragraphs": ["Congress.gov Website https://www.congress.gov", "For timely, accurate and complete legislative information, 93 rd Congress (1973-1974)-present. Content includes legislation, floor votes, schedules, the Congressional Record , and committee publications. The site is also a portal to a variety of government, commercial, and academic legislative sources.", "Legislative branch users have additional access to restricted content on the site, such as CQ Markup Reports and CRS reports concerning specific bills.", "Congress.gov is a public legislative website that launched in 2016. It superseded THOMAS and will replace the LIS website for legislative branch users sometime in 2019. Staff may continue to use the LIS website at http://www.lis.gov for some search capabilities that are not yet replicated on Congress.gov.", "Congressional Research Service Library of Congress, Madison Building, LM-205 La Follette Congressional Reading Room, LM-202 Main number to place requests: [phone number scrubbed] Hotline for \"ready reference\" questions: [phone number scrubbed] Congressional offices only: http://www.crs.gov To register for Twitter feed, go to http://www.crs.gov/Resources/Twitter", "For confidential, authoritative, and objective research and analysis on legislative and oversight issues before Congress, as well as programs designed to help staffers learn about such topics as budget and appropriations, legal research, and legislative process and procedure.", "Congressional Budget Office H2-410 Ford House Office Building [phone number scrubbed] To order publications: email [email address scrubbed] http://www.cbo.gov https://twitter.com/uscbo", "For budget projections, budget information, and cost estimates for bills reported out of committee.", "Governmen t Accountability Office 441 G Street, NW [phone number scrubbed] To order publications: [phone number scrubbed] http://www.gao.gov http://twitter.com/USGAO Congressional offices only: http://watchdog.gao.gov", "For independent, nonpartisan reports on agency audits, policy analysis, and program evaluations. As the investigative arm of Congress, GAO supports congressional oversight by reporting on federal government programs, investigating allegations of improper agency activities, and adjudicating government contract disputes.", "Government Publishing Office https://www.gpo.gov", "https://www.govinfo.gov (see below)", "http://twitter.com/USGPO", "Congressional offices only: http://www.gpo.gov/congressional/ ", "Govinfo ( https://www.govinfo.gov ) replaced GPO's Federal Digital System (FDsys) website in December 2018. Govinfo provides access to the same publications and search functionality as FDsys, but has a new look and new features. ", "For congressional and executive branch documents, such as the Federal Register and the U.S. Government Manual.", "Law Library of Congress Law Library Reading Room, LM-242 Library of Congress [phone number scrubbed] Congressional offices only: [phone number scrubbed] http://www.loc.gov/law http://twitter.com/lawlibcongress Congressional offices only: http://www.loc.gov/law/congress ", "For legal research and reference; offers special services to congressional offices, including reports, briefings, and training on legal topics.", "National Archives and Records Administration 700 Pennsylvania Avenue, NW [phone number scrubbed] Congressional offices only: http://www.archives.gov/congress Listings of newly enacted laws and law numbers: http://www.archives.gov/federal-register/laws/current.html http://twitter.com/usnatarchives", "For newly enacted laws, older Executive Orders and Presidential Proclamations, and access to congressional committee records that are stored in the Center for Legislative Archives.", "For Office of the Federal Register and information about newly assigned public law numbers: [phone number scrubbed].", "PUBLAWS-L, an email list about newly enacted laws. To sign up: http://www.archives.gov/federal-register/laws/updates.html .", "Office of Management and Budget 725 17 th Street, NW (New Executive Office Building) [phone number scrubbed] https://www.whitehouse.gov/omb/ https://twitter.com/OMBPress ", "For copies of the President's federal budget proposals, proposed legislation, testimony, reports, PAYGO scorecards, and other documents associated with the Administration's agenda. OMB serves as the implementation and enforcement arm of presidential policy government-wide.", "White House Executive Clerk's Office 1600 Pennsylvania Avenue, NW [phone number scrubbed] (remain on the line after recording to reach a live person) https://www.whitehouse.gov/briefings-statements/ ", "To find out if the President has received, signed, or vetoed recent legislation.", "White House Website http://www.whitehouse.gov http://twitter.com/whitehouse", "For current presidential Administration documents, such as executive orders and presidential proclamations.", "Note: Older, as well as archived, executive orders are available through the National Archives' Executive Orders web page at http://www.archives.gov/federal-register/executive-orders/ . For executive orders, click on the link by President, by year, to view executive orders for each year. For presidential proclamations, click on the link \"view all Presidential Documents\" on the top right of this website page, then click on the link by President for a list arranged in reverse chronological order (most recent first)."], "subsections": []}]}}
{"id": "RL33964", "title": "Nigeria: Current Issues and U.S. Policy", "released_date": "2019-02-01T00:00:00", "summary": ["Successive Administrations have described the U.S. relationship with Nigeria, Africa's largest producer of oil and its largest economy, to be among the most important on the continent. The country is Africa's most populous, with more than 200 million people, roughly evenly divided between Muslims and Christians. Nigeria, which transitioned from military to civilian rule in 1999, ranked for years among the top suppliers of U.S. oil imports, and it is a major recipient of U.S. foreign aid. The country is the United States' second-largest trading partner in Africa and the third-largest beneficiary of U.S. foreign direct investment on the continent. Nigerians comprise the largest African diaspora group in the United States.", "Nigeria is a country of significant promise, but it also faces serious social, economic, and security challenges, some of which pose threats to state and regional stability. The country has faced intermittent political turmoil and economic crises since gaining independence in 1960 from the United Kingdom. Political life has been scarred by conflict along ethnic, geographic, and religious lines, and corruption and misrule have undermined the state's authority and legitimacy. Despite extensive petroleum resources, its human development indicators are among the world's lowest, and a majority of the population faces extreme poverty. In the south, social unrest, criminality, and corruption in the oil-producing Niger Delta have hindered oil production and contributed to piracy in the Gulf of Guinea. Perceived government neglect and economic marginalization have also fueled resentment in the predominately Muslim north, while communal grievances and competition over land and other resources\u2014sometimes subject to political manipulation\u2014drive conflict in the Middle Belt.", "The rise of Boko Haram has heightened concerns about extremist recruitment in Nigeria, which has one of the world's largest Muslim populations. Boko Haram has focused on a range of targets, but civilians in the impoverished, predominately Muslim northeast have borne the brunt of the violence. The group became notorious for its 2014 kidnapping of over 270 schoolgirls and its use of women and children as suicide bombers. It has staged attacks in neighboring countries and poses a threat to international targets in the region. Boko Haram appears primarily focused on the Lake Chad Basin region. Its 2015 pledge to the Islamic State and the emergence of a splinter faction, Islamic State-West Africa (IS-WA), have raised concerns from U.S. policymakers, though the extent of intergroup linkages is unclear. IS-WA is credited with a number of devastating attacks in 2018 against Nigerian military bases; the army has struggled to defend them.", "Domestic criticism of the government's response to corruption, economic pressures, and Boko Haram contributed to the election in 2015 of former military ruler Muhammadu Buhari. In what was widely hailed as a historic transition, the ruling People's Democratic Party and President Goodluck Jonathan lost power to Buhari and his All Progressives Congress, marking Nigeria's first democratic transfer of power. Buhari has since struggled to enact promised reforms amid persistent security challenges and a struggling economy. He faces a challenge from former vice president Atiku Abubakar in elections scheduled for February 2019; it is forecast to be a close race. As in previous elections, there are concerns about violence around the polls, and intense, high-stakes contests over a number of legislative and gubernatorial posts increase the risk of conflicts. U.S. officials and Members of Congress have called for credible, transparent, and peaceful elections.", "U.S.-Nigeria relations under the Trump Administration appear generally consistent with U.S. policy under the Obama Administration. Both Administrations have supported reform initiatives in Nigeria, including anticorruption efforts, economic and electoral reforms, energy sector privatization, and programs to promote peace and development. Congress oversees more than $500 million in U.S. foreign aid programs in Nigeria and regularly monitors political developments; some Members have expressed concern with corruption, human rights abuses, and violent extremism in Nigeria."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["Nigeria is considered a key power in Africa, not only because of its size, but also because of its political and economic role on the continent. Nigeria has overtaken South Africa as Africa's largest economy, and it is one of the world's major sources of high-quality crude oil. The country's commercial center, Lagos, is among the world's largest cities. Nigeria has the fastest-growing population globally, which is forecast to reach 410 million by 2050 and overtake the United States to become the world's third-most populous country. It also has one of Africa's largest militaries, and has played an important role in peace and stability operations on the continent. Few states in Africa have the capacity to make a more decisive impact on the region.", "Despite its oil wealth, Nigeria remains highly underdeveloped. Poor governance and corruption have limited infrastructure development and social service delivery, slowing economic growth and keeping much of the country mired in poverty. Nigeria has the world's second-largest HIV/AIDS-infected population and Africa's highest tuberculosis burden.", "The country is home to more than 250 ethnic groups, but the northern Hausa and Fulani, the southwestern Yoruba, and the southeastern Igbo have traditionally been the most politically active and dominant. Roughly half the population, primarily residing in the north, is Muslim. Southern Nigeria is predominantly Christian, and Nigeria's Middle Belt (which spans the country's central zone) is a diverse mix. Ethnic and religious strife have been common in Nigeria. Tens of thousands of Nigerians have been killed in sectarian and intercommunal clashes in the past two decades. Ethnic, regional, and sectarian divisions often stem from issues related to access to land, jobs, and socioeconomic development, and are sometimes fueled by politicians. ", "The violent Islamist group Boko Haram has contributed to a major deterioration of security conditions in the northeast since 2009. It espouses a Salafist interpretation of Islam and seeks to capitalize on local frustrations, discredit the government, and establish an Islamic state in the region. The insurgency has claimed thousands of lives and exacerbated an already-dire humanitarian emergency in the impoverished Lake Chad basin region, comprising Nigeria, Niger, Chad, and Cameroon. Nigeria now has one of the largest displaced populations in the world\u2014an estimated 2 million people\u2014most of whom have fled Boko Haram-related violence. In late 2013, the State Department designated Boko Haram and a splinter group, Ansaru, as Foreign Terrorist Organizations (FTOs). Boko Haram's 2015 pledge of allegiance to the Islamic State raised its profile, though the extent of operational ties between the two groups remains unclear. A Boko Haram leadership dispute led, in 2016, to the emergence of a splinter group, the Islamic State-West Africa (IS-WA). The State Department designated IS-WA as an FTO in early 2018.", "In the southern Niger Delta region, local grievances related to oil production in the area have fueled conflict and criminality for decades. Intermittent government negotiations with local militants and an ongoing amnesty program have quieted the region, but attacks on oil installations surged briefly in 2016 and remain a threat to stability and oil production. Some militants continue to be involved in various local and transnational criminal activities, including maritime piracy and drug and weapons trafficking. These networks often overlap with oil theft networks, which contribute to maritime piracy off the coast of Nigeria and the wider Gulf of Guinea (see map). Already among the most dangerous bodies of water in the world, the Gulf of Guinea has seen a dramatic increase in piracy and attacks against ships in recent years. ", "Presidential and legislative elections slated for mid-February 2019 and gubernatorial and state-level polls due two weeks later increase pressure on some of Nigeria's sociopolitical fault lines. Protests in the Igbo-dominated southeast over perceived marginalization by the government have led to clashes with security forces; separatist sentiment among some Igbo has arisen against the backdrop of a deadly civil war waged from 1967 to 1970, during which secessionists fought unsuccessfully to establish an independent Republic of Biafra. Economic frustration is reportedly widespread in the region, but by many accounts the majority of Igbo would not support insurrection. Meanwhile, an emerging conflict in border regions of neighboring Cameroon has led over 30,000 Cameroonians to seek refuge in Nigeria. In the Middle Belt, violent competition for resources between nomadic herders, largely Muslim, and settled farming communities, many of them Christian, has been on the rise in recent years and is spreading into Nigeria's southern states. Herder-farmer tensions in Nigeria are not new, but they overlap with ethnic and religious divisions and have been exacerbated by desertification, increasing access to sophisticated weapons, land-grabbing by politicians, and banditry."], "subsections": []}, {"section_title": "Politics", "paragraphs": ["Nigeria, which gained its independence from the United Kingdom in 1960, is a federal republic with 36 states. Its political structure is similar to that of the United States: it has a bicameral legislature with a 109-member Senate and a 360-member House of Representatives. Nigeria's president, legislators, and governors are directly elected for four-year terms. The country was ruled by the military for much of the four decades after independence before making the transition to civilian rule in 1999. Subsequent elections were widely viewed as flawed, with each poll progressively worse than the last. Elections in 2011 were seen as more credible, although they were followed by violent protests in parts of the north that left more than 800 people dead and illustrated northern mistrust and dissatisfaction with the government. ", "The contest for power between north and south that has broadly defined much of Nigeria's modern political history can be traced, in part, to administrative divisions under Britain's colonial administration. Northern military leaders dominated the political scene from independence until the country's democratic transition in 1999. Since the election of President Olusegun Obasanjo in 1999, there has been a de facto power-sharing arrangement, often referred to as \"zoning,\" between the country's geopolitical zones, through which the presidency is expected to rotate among regions. The death of President Obasanjo's successor, northern-born President Umaru Yar'Adua, during his first term in office in 2010, and the subsequent ascension of his southern-born vice president, Goodluck Jonathan, brought the zoning arrangement into question. Jonathan's decision to run in the 2011 elections was seen by many northerners as a violation of the arrangement, which contributed to the violence that followed the polls."], "subsections": [{"section_title": "The 2015 Elections", "paragraphs": ["Nigeria's 2015 elections were its most competitive contest to date and were viewed as a critical test for its leaders, security forces, and people. They were widely hailed as historic, with President Jonathan and the ruling People's Democratic Party (PDP) losing to a new opposition coalition led by former military ruler Muhammadu Buhari. Jonathan was Nigeria's first incumbent president to lose an election. Buhari's All Progressives Congress (APC) capitalized on popular frustration with rising insecurity, mounting economic pressures, and allegations of large-scale state corruption to win a majority in the legislature and a majority of state elections. Decreased turnout for the PDP appeared to be partly linked to broad discontent with the government's response to the Boko Haram threat, in particular the April 2014 kidnapping of 276 schoolgirls from the northeast town of Chibok and the group's subsequent territorial advances.", "U.S. government views on the 2015 elections were broadly positive. A White House statement described the event as demonstrating \"the strength of Nigeria's commitment to democratic principles.\" There had been significant concern about the potential for large-scale political violence around the polls, and then-Secretary of State John Kerry traveled to Nigeria months prior to the elections to stress U.S. views about the importance of the event. ", "President Buhari's popularity in the 2015 elections was notable, given his history. A Muslim from Katsina state in northern Nigeria, Buhari had formerly drawn support from across the predominately Muslim north, but had struggled to gain votes in the south. In 2014, his party joined with the other main opposition parties to form the diverse APC coalition. His vice president, Yemi Osinbajo, is an ethnic Yoruba (Nigeria's second-largest ethnic group) Pentecostal pastor and former state attorney general from the populous southwest. Osinbajo is reported to be widely respected, and he served as Acting President during Buhari's months-long stay in London in 2017, when the latter was receiving medical treatment for an undisclosed condition. Buhari's silence on the nature of his illness fueled speculation about his fitness for office. "], "subsections": []}, {"section_title": "The 2019 Elections", "paragraphs": ["With presidential and legislative elections scheduled for February 16, 2019, and gubernatorial and state assembly polls on March 2, prospects for the ruling APC are uncertain. In October 2018, the party affirmed Buhari as its presidential candidate, but his political standing has arguably weakened since 2015. In advance of the APC primary, several prominent former military and government officials, including former President Obasanjo, publicly urged him to not run again. ", "Buhari is set to run against Atiku Abubakar, a former vice president under Obasanjo and erstwhile Buhari ally who defected from the APC to rejoin the PDP in late 2017. Viewed as a successful businessman prior to his foray into politics, Abubakar has pledged to revive Nigeria's struggling economy. This will be his fourth attempt at the presidency; analysts expect the 2019 election to be closely fought. Abubakar, who like Buhari hails from the North and is Muslim, may be able to split the northern vote and thereby weaken what was previously an APC stronghold. ", "Abubakar is one of several recent high-profile defectors from the APC. In mid-2018, an anti-Buhari faction known as the Reformed APC (R-APC) emerged within the ruling party. Shortly thereafter, Senate President Bukola Saraki, several governors, and dozens of representatives defected to the PDP. In turn, a number of high-ranking PDP officials have joined the ruling party. While not unusual in advance of Nigerian elections, such rearrangements threaten to further paralyze an unproductive legislature and widen rifts between the presidency and parliament, hindering the government's ability to respond to pressing humanitarian and security challenges. ", "In July 2018, a joint preelection assessment by the National Democratic Institute (NDI) and International Republican Institute (IRI) met with senior officials of the Independent National Electoral Commission (INEC) as well as representatives from the government, political parties, civil society organizations, and media. In follow-up statements, the delegation praised INEC's efforts to reinforce the integrity of the electoral process, but noted a lack of public confidence in the neutrality of Nigeria's security services as well as popular concerns about \"vote buying, illegal voting, and efforts to compromise the secrecy of the vote on election day.\" INEC has taken steps to enable voting by marginalized voters, notably those displaced by Nigeria's multiple conflicts. Whether displaced voters are ultimately able to cast their ballots remains to be seen.", "In December 2018 testimony before Congress, Assistant Secretary of State for African Affairs Tibor Nagy noted other factors that could threaten the credibility of the 2019 polls, including politically motivated attacks on the legitimacy of INEC, intimidation by state security forces, electoral violence, and the possible exclusion of displaced persons and individuals with disabilities from voting. President Buhari's suspension, just weeks before the election, of the country's chief justice, who is head of the judiciary and was accused of failing to declare assets, prompted widespread criticism. The United States and other donors questioned the constitutionality of the decision, which Buhari made without the support of the legislature, and noted concerns that it could affect the perceived credibility of the elections, given the judiciary's role in resolving election disputes.", "Observers have expressed concern over the potential for the elections to spark violence in parts of the country. In some areas, subnational contests for gubernatorial and state legislative seats may present greater risks for violence than the presidential election, though the latter has received more attention from donors and Nigerian officials. The International Crisis Group (ICG) has identified six states as especially vulnerable to violence owing to their political importance and/or the presence of prevailing social fissures or conflicts: Rivers and Akwa Ibom (in the Niger Delta), Plateau and Adamawa (in the Middle Belt), and Kaduna and Kano (in the northwest). With Nigeria's security forces reportedly overstretched in responding to a range of security threats across the country (discussed below), allegations of politicians stoking divisions for political ends, and concerns about partisanship among some security officials, ICG has described the conditions around the 2019 elections as \"particularly combustible.\""], "subsections": []}]}, {"section_title": "Social Issues and Security Concerns", "paragraphs": [], "subsections": [{"section_title": "Islamic Sharia Law", "paragraphs": ["Nigeria is home to one of the world's largest Muslim populations. The north is predominately Sunni Muslim, and 12 northern states use sharia (Islamic law) to adjudicate criminal and civil matters for Muslims. Under the Nigerian constitution, sharia does not apply to non-Muslims in civil and criminal proceedings, but Islamic mores are reportedly often enforced in public without regard to citizens' religion. In some areas, citizen groups known as hisbah provide social services and enforce sharia-based rulings\u2014some with financial and legal backing from state governments. "], "subsections": []}, {"section_title": "Communal Violence", "paragraphs": ["Divisions among ethnic groups, between regions, and between Christians and Muslims often stem from issues related to access to land and jobs and are sometimes fueled by politicians. In Nigeria's Middle Belt, violence between nomadic herdsmen, many of them belonging to the largely Muslim Fulani ethnic group, and settled farming communities, many\u2014but not all\u2014of them Christian, has increased in recent years. An estimate by the International Crisis Group suggests that over 2011-2016, roughly 2,000 Nigerians died annually in herder-farmer clashes, which surged in 2016 to claim some 2,500 lives\u2014more than the total killed in Boko Haram-related violence that year. Amnesty International asserts that herder-farmer violence killed more than 2,000 Nigerians from January through October 2018 and contends that a failure by the Nigerian government to respond to the violence and hold perpetrators to account had fostered a climate of impunity and a cycle of violence characterized by retaliatory attacks. ", "Reports suggest that weapons used by all sides have grown more sophisticated, and that the recent surge in violence has involved the rise of ethnic militias and community vigilante groups backed by local leaders. The nongovernmental organization (NGO) Search for Common Ground describes the violence as \"neither an ethnic nor religious conflict, but rather a competition for resources playing out on ethno-religious lines in a fragile country characterized by impunity and corruption.\" Analysis by Reuters indicates that a decades-long expansion of farming activity into traditional grazing zones had resulted in a 38% decrease in land available for open grazing in the Middle Belt between 1975 and 2013. The U.S. Commission on International Religious Freedom (USCIRF) suggests, however, that the violence often takes on religious undertones and is perceived by some involved to be a religion-based conflict. Attackers have burned villages and destroyed a number of churches and mosques, even as the conflict has spread beyond the Middle Belt into southern states. The violence also affects northern states like Zamfara, where cattle rustling and banditry have fueled vigilantism; notably, in Zamfara the clashes are often occurring between settled Hausa communities and pastoralist Fulani, both Muslim. Illustrative of Nigeria's charged political climate, Buhari, himself an ethnic Fulani, has been accused of complicity in herder attacks due to what some call an insufficient state reaction to the violence. ", "Anti-Shia Muslim sentiment in northern Nigeria has gained increased attention amid reports that the Nigerian army killed hundreds of members of the Islamic Movement of Nigeria (IMN), a Shia group led by Iranian-trained cleric Ibrahim Zakzaky, in December 2015. According to USCIRF reports, the army killed and buried 347 IMN members, injured hundreds more, and arrested almost 200 others over a two-day span in Zaria, Kaduna State. A Kaduna state commission of inquiry found the army responsible for the mass killing, but no soldiers have faced prosecution; instead, state prosecutors brought murder charges against 177 IMN members\u2014dozens of whom, including Zakzaky, remained on trial as of December 2018. Zakzaky's supporters have called for his release and staged repeated demonstrations that have led to clashes with security forces and mass arrests. In October 2018, soldiers reportedly used live fire to disperse an IMN religious gathering and a separate peaceful protest, both in Abuja, killing dozens of IMN members over three days. Nigeria's Shia population has been estimated at between 4 million and 10 million people. ", "Separately, protests in the ethnic Igbo-dominated southeast have raised concern about resurgent separatism in a region that fought a secessionist war (the Biafra War) from 1967 to 1970 in which up to 2 million people died. Igbo political grievances appear to have risen under Buhari. In October 2015, protests led to clashes with security forces, and in 2016, soldiers killed at least 150 pro-Biafra demonstrators, according to Amnesty International. Economic frustration is reportedly widespread in the region, and some experts suggest that the government's forceful response to separatist sentiments could fuel support for taking up arms. "], "subsections": []}, {"section_title": "Boko Haram and Militant Islam in Nigeria", "paragraphs": ["Boko Haram has evolved since 2009 to become one of the world's deadliest terrorist groups, drawing in part on a narrative of vengeance for state abuses to elicit recruits and sympathizers. Key factors contributing to its rise in Nigeria include a legacy of overlapping intercommunal and Muslim-Christian tensions in the country; perceived disparities in access to development, jobs, state services, and investment in the north; and popular frustration with elite corruption and other state abuses. Some research suggests that the reportedly heavy-handed response of Nigerian security forces since 2009 has fueled extremist recruitment in some areas. The reported erosion of traditional leaders' perceived legitimacy among local populations in northeast Nigeria and northern Cameroon may also have contributed to the group's ascendance. Resource struggles related to the shrinking of Lake Chad, once one of Africa's largest lakes, have further exacerbated tensions among communities that Boko Haram has reportedly sought to exploit.", "The nickname Boko Haram was given by Hausa-speaking communities to describe the group's narrative that Western education and culture are corrupting influences and haram (\"forbidden\"). Boko Haram's ideology combines an exclusivist interpretation of Sunni Islam\u2014one that rejects not only Western influence but also democracy, pluralism, and more moderate forms of Islam\u2014with a \"politics of victimhood\" that resonates in parts of Nigeria's underdeveloped north. Some of its fighters have reportedly been recruited by financial incentives or under threat. ", "Some 16,000 people are estimated to have been killed in Boko Haram violence since 2011, and more than 2 million Nigerians are internally displaced. The group has also abducted a large number of civilians, including schoolgirls from Chibok (in 2014) and Dapchi (in 2018); some have escaped or been rescued or released, but dozens from Chibok remain missing as of late 2018, in addition to hundreds of other abductees. Boko Haram has routinely used women and children as suicide bombers since 2014."], "subsections": [{"section_title": "The Nigerian Response", "paragraphs": ["Boko Haram commenced a territorial offensive in mid-2014 that Nigerian forces struggled to reverse until early 2015, when regional forces, primarily from Chad, launched a counteroffensive. Regional efforts to counter Boko Haram and its Islamic State-affiliated splinter group (see below) are coordinated within the African Union-authorized Multi-National Joint Task Force (MNJTF). The MNJTF has received U.S. and other donor support. The regional force has found success reclaiming some Boko Haram-held territory, but many areas remain insecure and militants continue to stage attacks in northeastern Nigeria and border areas of Cameroon and Niger. ", "Multiple factors have undermined the Nigerian response to Boko Haram, notably security sector corruption and mismanagement. A July 2018 report by the Carnegie Endowment for International Peace concluded that \"decades of unchecked corruption have hollowed out the Nigerian military and security services and rendered them unable to effectively combat Boko Haram or address ethno-religious and communal conflict.\" The State Department has also identified other dynamics limiting the response, including a lack of coordination and cooperation between Nigerian security agencies, limited database use, the slow pace of the judicial system with regard to charging and trying suspected militants, and a lack of sufficient training for prosecutors and judges to implement antiterrorism laws. The International Crisis Group, among others, has called for comprehensive defense sector reform, including \"a drastic improvement in leadership, oversight, administration and accountability across the sector.\" "], "subsections": []}, {"section_title": "Boko Haram's Fracture and the Emergence of Islamic State-West Africa", "paragraphs": ["Boko Haram currently appears to pose a threat primarily in northern Nigeria and surrounding areas in neighboring countries. The group also poses a threat to international targets, including Western citizens, in the region. Boko Haram's self-described leader, Abubakar Shekau, has issued threats against the United States, but to date no U.S. citizens are known to have been kidnapped or killed by the group. Boko Haram's 2015 pledge of allegiance to the Islamic State raised its profile and may have provided recruitment and fundraising opportunities, though the extent to which affiliation has facilitated operational ties remains unclear (see text box). ", "In August 2016, the Islamic State recognized the leader of a breakaway faction, Abu Musab al-Barnawi, as the new leader of the Islamic State-West Africa (IS-WA). Barnawi is reported to be the son of Boko Haram founder Mohammed Yusuf and had previously served as Boko Haram's spokesman. His group has reportedly focused its attacks primarily on security force and government targets on both sides of the Nigeria-Niger border, mainly operating in Nigeria's Borno state, where both groups appear most active. The name \"Boko Haram\" is still often used to refer to both groups, reflecting their common history and underscoring debate over the extent to which they are perceived as distinct. Shekau apparently continues to head the other faction. The U.S. Department of Defense has estimated IS-WA to have approximately 3,500 fighters and Boko Haram to have roughly 1,500. ", "The Barnawi-led faction, IS-WA, was reportedly responsible for the February 2018 kidnapping of over 100 schoolgirls from the northeast town of Dapchi. It has also been credited with a series of devastating attacks against Nigerian military bases in 2018, including a spate of raids in late 2018 that reportedly killed more than 100 soldiers. The military has struggled to defend these bases, and the attacks and resulting death toll have reportedly damaged morale. ", "The State Department designated both Boko Haram and IS-WA as FTOs under Section 219 of the Immigration and Nationality Act, as amended, and as Specially Designated Global Terrorists (SDGTs) under Executive Order 13224. The FTO designations aim to assist U.S. and other law enforcement agencies in efforts to investigate and prosecute suspects associated with the group. The State Department had already designated three individuals linked to Boko Haram as SGDTs in June 2012, including Shekau, and in 2013 issued a $7 million reward for information on the location of Shekau through its Rewards for Justice program. The Nigerian government also formally designated Boko Haram and Ansaru as terrorist groups in 2013. The British government had named Ansaru as a \"Proscribed Terrorist Organization\" broadly aligned with Al Qaeda in 2012, and designated Boko Haram as such in July 2013. Boko Haram was added to the U.N. Al Qaeda sanctions list in May 2014. The State Department designated two more senior Boko Haram leaders as SDGTs in December 2015 and added IS-WA leader Barnawi in February 2018."], "subsections": []}]}, {"section_title": "The Niger Delta and its Militants", "paragraphs": ["Nigeria's oil wealth has long been a source of political tension, protest, and criminality in the Niger Delta region, where most of the country's oil is produced. Compared to national averages, the region's social indicators are low and unemployment is high. Millions of barrels of oil are believed to have been spilled in the region since production began, causing major damage to the fragile riverine ecosystem and to the livelihoods of many of the Delta's 30 million inhabitants. In 2011, the United Nations Environment Program (UNEP) estimated that it could take 25 to 30 years to clean up Ogoniland, a coastal region in Rivers State hard-hit by pollution. After several delays, the Nigerian government launched a $1 billion Ogoniland restoration program in 2017. ", "Local grievances related to oil production have fueled conflict and criminality for years. An amnesty program launched in 2009 that includes monthly stipends for former militants largely quieted the area, but attacks on oil installations by a militant group that emerged in 2016 pushed production to a 30-year low and sent Nigeria's economy into recession. The resurgence of militant activity may have been linked to President Buhari's intention to end the amnesty, which had originally been scheduled to expire in late 2015, or his decision to cancel pipeline security contracts awarded to prominent former militant leaders by the Jonathan government. In response to renewed violence, Buhari agreed to extend the amnesty and later nearly tripled its budget; a fractious peace returned to the region in mid-2017 and oil production has since rebounded. Nevertheless, ex-militants routinely threaten to resume attacks, and little has been done to develop long-term solutions to the violence.", "Research suggests some former Delta militants have leveraged the resources and patronage opportunities presented by the amnesty to enter politics. Meanwhile, some reportedly remain involved in local and transnational criminal activities, including piracy and drug and arms trafficking. These networks overlap with oil theft and contribute to piracy off the Nigerian coast in the Gulf of Guinea, one of the world's most dangerous bodies of water (see below)."], "subsections": []}, {"section_title": "Security Sector Abuses", "paragraphs": ["Nigerian military and police have been accused of serious human rights abuses, and activists contend that successive Nigerian administrations have done little to hold abusers accountable. The State Department's 2017 human rights report documents allegations by multiple sources of \"extrajudicial and arbitrary killings\" as well as \"torture, periodically in detention facilities, including sexual exploitation and abuse; use of children by some security elements, looting, and destruction of property.\" While Nigerian officials have acknowledged some abuses by security forces, few security personnel have been prosecuted. The State Department's report suggests that authorities do not investigate the majority of cases of police abuse or punish perpetrators. ", "Abuses by the Nigerian army have taken a toll on civilians and reportedly driven some support for Boko Haram; they have also complicated U.S. efforts to pursue greater counterterrorism cooperation (see below). Major incidents include the army's alleged massacre of more than 640 people at a military detention facility in northeast Borno state in 2014 and a January 2017 air force bombing raid on an internally displaced persons (IDP) camp in Borno that killed as many as 200 people, many of them children. The military also has been accused of committing human rights violations outside of the terror-affected northeast; in late 2017, for instance, an air raid in response to herder-farmer violence in Adamawa state reportedly killed dozens of villagers.", "The military also has cracked down on domestic and international civil society. In December 2018, citing national security concerns, Nigeria's military suspended activities by the U.N. Children's Fund (UNICEF)\u2014a ban it promptly revoked under widespread pressure\u2014and separately threatened to prohibit operations by Amnesty International. In January 2019, military personnel raided the offices of the Daily Trust , a respected Abuja-based newspaper, for \"undermining national security\" by reporting on a planned military operation in the northeast; soldiers reportedly confiscated computers and arrested several staff members.", "Human rights monitors have also documented serious abuses by the paramilitary Civilian Joint Task Force (CJTF), a militia that emerged to combat the Boko Haram insurgency. Some observers warn that the government may struggle to demobilize the CJTF, which reportedly numbers over 23,000; some of its members may be integrated into the military or police."], "subsections": []}]}, {"section_title": "Reform Initiatives", "paragraphs": [], "subsections": [{"section_title": "Efforts to Combat Corruption", "paragraphs": ["Corruption in Nigeria has been characterized as \"massive, widespread, and pervasive,\" by the State Department, and by many accounts, Nigeria's development will be hampered until it can address the perception of impunity for corruption and fraud. Several analyses have been done seeking to quantify the costs of corruption in Nigeria, which pervades a range of sectors and all levels of government. A 2017 study estimated that Nigeria had lost some $65 billion to power sector corruption from 1999 to 2015, for instance, while a nationwide survey estimated that Nigerian officials took some $4.6 billion in bribes in the year to May 2016. Several international firms have been implicated in Nigerian bribery scandals. Nigeria is also known globally for cybercrimes, including \"419 scams,\" advance-fee fraud so-named for the article in the country's penal code that outlaws fraudulent e-mails. More recently, analysts have drawn particular attention to \"security votes\"\u2014opaque discretionary funds widely used throughout the Nigerian government that are particularly vulnerable to embezzlement. Security votes are estimated to total over $670 million annually. According to Transparency International, the Buhari Administration has expanded the number and scale of such discretionary accounts in advance of the 2019 polls. In 2017, Nigeria ranked 148 th out of 180 countries on Transparency International's Corruption Perception Index , a measure of domestic perceptions of corruption.", "Most observers agree that the oil and gas industries form the core of illicit self-enrichment networks in Nigeria, where petroleum provides the majority of government revenues and export earnings. One expert considers petroleum revenues to be \"the lifeblood of official corruption in Nigeria,\" whose \"epicenter\" is the state oil company, the Nigerian National Petroleum Corporation (NNPC). According to Nigeria's Economic and Financial Crimes Commission (EFCC), a law enforcement agency created in 2003 to combat corruption and fraud, billions of dollars have been expropriated by political and military leaders since oil sales began. Former dictator Sani Abacha reportedly stole more than $3.5 billion, much of it originating in the country's oil sector, during his five years as head of state (1993-1998). Some stolen funds have been repatriated, but other Abacha assets remain frozen abroad. In 2014, the U.S. Department of Justice (DOJ) announced that a federal court in the District of Columbia had ordered forfeited to the United States more than $480 million in Abacha corruption proceeds laundered through U.S. banks and held in foreign bank accounts. DOJ has authority to pay restitution to the victims of the corruption out of the forfeited funds. In 2017, the Swiss government agreed to restitute $321 million through a project overseen by the World Bank, resulting in a total return of $1.2 billion by Switzerland in Abacha assets. In 2017, a Nigerian NGO requested that the Trump Administration return $500 million in Abacha assets \"separate from the $480 million\" forfeited by the DOJ in 2014. In a mid-2018 visit to the White House, President Buhari announced that Nigeria and the United States were collaborating to secure \"the return to Nigeria of over 500 million United States dollars of looted funds siphoned away in banks around the world.\" Other governments are reportedly assisting in that repatriation effort.", "Illicit expropriation of Nigeria's resources did not stop with Abacha. In a 2013 letter to President Jonathan later made public, central bank governor Lamido Sanusi asserted that up to $20 billion in NNPC revenue could not be accounted for and had likely been diverted in the course of opaque no-bid oil contracts and \"swap deals\" in which crude oil is exported in exchange for refined fuel, among other \"leakages.\" The NNPC denied the allegations, yet then-Minister of Petroleum Resources Diezani Alison-Madueke has since come under investigation for corrupt practices during her tenure as NNPC chairwoman. In December 2018, the EFCC issued an arrest warrant for Alison-Madueke, who also faces charges in an ongoing UK global corruption inquiry. Separately, in 2017, the U.S. DOJ filed a civil complaint seeking the forfeiture of $144 million in ill-gotten assets resulting from corrupt oil dealings between Alison-Madueke and her associates. ", "Observers have identified major structural challenges that render Nigeria's petroleum industry particularly vulnerable to corruption. One key shortcoming is the NNPC's reliance on direct sale-direct purchase (DSDP) contracts, whereby crude oil is exported in exchange for refined petroleum products\u2014transactions associated with high corruption risks, in part due to the abundance of intermediaries involved. Other factors include a general lack of oversight of the NNPC's operations and financial management, amid repeated concerns that the NNPC has failed to remit sufficient revenues to the federal government. Underscoring the extent of corruption in Nigeria's oil industry, investigations continue into bribes attending the 2011 purchase, by Eni and Royal Dutch Shell, of a license for OPL 245, a massive offshore block. The scandal has spurred a series of lawsuits, including an ongoing trial in which top Shell and Eni executives, including Eni's CEO, are defendants; in late 2018, an Italian court sentenced two accused intermediaries in the deal to four-year prison sentences. Global Witness, an international resource governance NGO, asserts that OPL 245's sale at an artificially deflated price may have cost the Nigerian government an estimated $6 billion in expected revenue.", "The Buhari Administration has introduced legislation to increase transparency in the oil industry (see below), and the EFCC is pursuing investigations into alleged large-scale graft during the Jonathan government. Notable targets of such inquiries include Alison-Madueke as well as former National Security Advisor Colonel Sambo Dasuki, accused of embezzling more than $2 billion through fraudulent security sector procurements. Acting EFCC Chairman Ibrahim Magu has also probed allegations against members of the ruling party, including former APC governors. Yet observers warn that the political influence of beneficiaries of grand corruption in Nigeria may thwart attempts at comprehensive reform. Magu's efforts have reportedly stirred discontent across the country's political class, and key targets of his campaign have thus far escaped prosecution. "], "subsections": []}, {"section_title": "Petroleum and Power Sector Reforms", "paragraphs": ["Despite its status as one of the world's largest crude oil exporters, Nigeria reportedly imported as much as 90% of the country's gasoline for domestic consumption in 2017 and suffers periodically from severe fuel and electricity shortages. In an effort to increase its refining capacity and halt oil imports by 2020, the government has granted permits in recent years for the construction of new independently owned refineries. ", "Nigeria's domestic subsidy on gasoline may have limited the attractiveness of refining capacity expansion plans to foreign investors. For years, the government has subsidized the price its citizens pay for fuel, and economists have long deemed the subsidy benefit unsustainable. At the recommendation of the International Monetary Fund (IMF) and others, President Jonathan cut the subsidy in 2011, sparking strong domestic opposition, including riots. In the face of mass protests and a nationwide strike, the government backtracked and reinstated a partial subsidy, then estimated at 2% of GDP. Public scrutiny of the program has increased amid revelations that billions of dollars allocated for the subsidy may have been misappropriated under Jonathan. The subsidy remains in place despite calls for its elimination from international financial institutions; in March 2018, the NNPC estimated that the subsidy costs more than $2 million per day, while warning that much of the oil sold in Nigeria is smuggled for sale at higher prices in neighboring countries. Analysts contend that the subsidy hampers growth, as gains in revenue associated with global oil price increases are at least partly offset by rising subsidy costs. ", "President Buhari has pledged to reform the oil and gas industry and to recover the \"mind-boggling\" amounts of money stolen from the sector over the years. His government overhauled and reintroduced the Petroleum Industry Bill (PIB), an ambitious piece of legislation aimed at increasing transparency in the industry, attracting investors, and creating jobs. First introduced during the Jonathan Administration, the PIB had stalled in parliament for years, and the regulatory uncertainty surrounding its passage has deterred investment. Lawmakers subsequently split the PIB into four different bills to enable more rapid passage; the first bill, the Petroleum Industry Governance Bill (PIGB), would restructure the NNPC to create four new entities to oversee and regulate bidding and exploration. The NNPC has long been criticized for its lack of transparency and observers have welcomed efforts to improve it, though substantive reform will likely face significant pushback from elites benefitting from the current system."], "subsections": []}, {"section_title": "Financial Sector Reforms", "paragraphs": ["Successive Nigerian administrations have made commitments to economic reform, but their track record has been mixed. According to the IMF, reforms initiated under Obasanjo\u2014most importantly the policies of maintaining low external debt and budgeting based on a conservative oil price benchmark to create a buffer of foreign reserves\u2014lessened the impact of the 2008-2009 global economic crisis on Nigeria's economy. Beginning in 2004, oil revenues above the benchmark price were saved in an Excess Crude Account (ECA), although the government drew substantially from the account in 2009-2010 in an effort to stimulate economic recovery. President Jonathan replaced the ECA with a sovereign wealth fund in 2011. ", "In response to revenue shortfalls due to the slump in oil prices, Nigeria has increasingly sought loans from the international community. In 2015, then-Finance Minister Ngozi Okonjo-Iweala announced that Nigeria had borrowed nearly $2.38 billion to pay government salaries and fund the 2015 budget. Engagement with international financial institutions has expanded under Buhari: in June 2018, the World Bank announced that it had approved a total of $2.1 billion in concessionary loans to Nigeria through its International Development Association (IDA) entity to support access to electricity, promote nutrition, and enhance governance. The government's Eurobond sales garnered $4.8 billion in 2017, with an additional $2.5 million sold in February 2018. The IMF notes that reforms under the Buhari Administration have resulted in \"significant strides in strengthening the business environment and steps to improve governance,\" but stresses the need for non-oil sector activity and revenue mobilization and further structural reforms. ", "The Buhari Administration has sought to shift spending toward capital investment and expanding the social safety net, seeking to stimulate the ailing economy through increased public expenditure. The IMF has lauded Buhari's Economic Growth and Recovery Plan (ERGP), which is intended to drive diversification, create jobs, and secure macroeconomic stability. The Fund has also welcomed the decline of Nigeria's external debt to GDP ratio, though public debt remains highly sensitive to fluctuations in oil sales and the currency exchange rate. "], "subsections": []}]}, {"section_title": "Economy", "paragraphs": ["Despite its oil wealth and large economy, Nigeria's population is among the world's poorest, and the distribution of wealth is highly unequal. The average life expectancy for Nigerians (estimated at 59 years in 2018) is rising, but the percentage of the population living on less than $1.90 per day has grown in the past decade to a projected 87 million, making Nigeria the country with the largest population living in extreme poverty. Over 30% of the population has no access to improved sources of water, less than one-fifth of households have piped water, and some 70% lack access to adequate sanitation, according to the World Bank. Nigeria ranked 157 out of 189 in the United Nations' 2018 Human Development Index (HDI). Decades of economic mismanagement, instability, and corruption have hindered investment in education and social services and stymied industrial growth.", "These challenges notwithstanding, Nigeria has attained notable success in public health provision. A small Ebola outbreak in mid-2014 was swiftly contained, enabling World Health Organization (WHO) authorities to declare the country Ebola-free in October 2014. The country has taken great strides to eradicate polio, though sporadic cases have precluded its designation as polio-free. Other successes include decreasing malaria and tuberculosis prevalence and reducing HIV prevalence among pregnant women. Nigeria's HIV/AIDS adult prevalence rate of 2.9% is relatively low in comparison to Southern African nations, but Nigeria comprises the largest HIV-positive population in the world after South Africa, with more than 3 million infected persons. Malaria remains the leading cause of death in Nigeria. ", "In 2014, the Nigerian government announced the rebasing of its economy, which is now recognized as the largest in Africa. The rebased GDP, substantially larger than South Africa's, was almost double what it was previously thought to have been and less reliant on the petroleum sector than expected. Nigeria's GDP now ranks 30 th in the world, according to the World Bank, with notable nonoil contributions from the country's mining, services, manufacturing, and agriculture sectors. Economists suggest that the economy nevertheless continues to underperform, held back by poor infrastructure and electricity shortages. ", "Low global oil prices, compounded by Niger Delta militant attacks on oil installations, led to a recession and sharp decline in real GDP growth in 2016. A subsequent rebound saw growth reach 1.9% in 2018; the IMF forecasts real GDP growth of 2.0% in 2019. The Organization of the Petroleum Exporting Countries estimated Nigeria's crude oil production to be 1.72 million barrels per day (BPD) in 2018, up from 1.66 BPD in 2017 yet below levels recorded in 2010-2015. Insecurity poses a perennial threat to this output: in June 2018, vandalism by oil thieves prompted Shell's Nigerian subsidiary to briefly declare force majeure on exports from one of its streams. ", "China has played a growing role in Nigeria's economy, notably through investment in transport infrastructure, manufacturing, and agriculture and energy projects. According to the American Enterprise Institute, Chinese investments and contracts in Nigeria totaled $8 billion in 2018, when Nigeria ranked as the largest recipient of Chinese investment in sub-Saharan Africa. Notable projects include the 700MW Zungeru hydropower plant, projected to be completed in 2020; CNEEC-Sinohydro Consortium, a Chinese firm, is developing the $1.3 billion project, which is jointly funded by the Nigerian and Chinese governments. China is also involved in the development of the massive Mambilla hydropower project, which is slated to produce more than 3,000MW of energy once operational. The four-dam, $5.8 billion Mambilla project is being constructed by Chinese firms and is largely funded by China's Exim Bank and other Chinese lenders; it is reportedly expected to be completed in 2023. "], "subsections": [{"section_title": "U.S.-Nigeria Trade", "paragraphs": ["Nigeria is the United States' second-largest trading partner in Africa and the third-largest beneficiary of U.S. foreign direct investment on the continent. Two-way trade was over $9 billion in 2017, when U.S. investment stood at $5.8 billion. Given Nigeria's ranking as one of Africa's largest consumer markets and its affinity for U.S. products and American culture, opportunities for increasing U.S. exports to the country, and the broader West Africa region, are considerable. ", "Nigeria is eligible for trade benefits under the African Growth and Opportunity Act (AGOA). AGOA-eligible exports, nearly all of which are petroleum products, have accounted for over 90% of exports to the United States. Gulf of Guinea crude is prized on the world market for its low sulphur content, and Nigeria's proximity to the United States relative to that of Middle East countries had long made its oil particularly attractive to U.S. interests. The country regularly ranked among the United States' largest sources of imported oil, although U.S. purchases of Nigerian sweet crude have fallen substantially since 2012 as domestic U.S. crude supply increased. U.S. imports, which accounted for over 40% of Nigeria's total crude oil exports until 2012, made the United States Nigeria's largest trading partner. India has recently been the largest importer of Nigerian crude. U.S. energy companies may face increasing competition for rights to the country's energy resources; China, for example, has offered Nigeria favorable loans for infrastructure projects in exchange for oil exploration rights. The U.S. Export-Import (Ex-Im) Bank signed an agreement in 2011 with the Nigerian government that aimed to secure up to $1.5 billion in U.S. exports of goods and services to support power generation reforms. Nigeria is a partner country under USAID's Power Africa initiative, which aims to facilitate 60 million new connections to electricity and 30,000 megawatts of new power generation in Africa by 2030."], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "U.S. Policy Toward Nigeria", "paragraphs": ["After a period of strained relations in the 1990s, when a military dictatorship ruled Nigeria, U.S.-Nigeria relations steadily improved under President Obasanjo (1999-2007) and remain robust. Diplomatic engagement is sometimes tempered by U.S. concerns with human rights, governance, and corruption issues, which Nigerian officials sometimes reject as U.S. interference in their domestic affairs. In 2010, the Obama and Jonathan Administrations established the U.S.-Nigeria Binational Commission (BNC) as a strategic dialogue to address issues of mutual concern. Buhari's election in 2015 ushered in an improvement in bilateral relations, which became strained due to U.S. criticisms of the Jonathan Administration's corruption and poor handling of the Boko Haram crisis. President Obama hosted President Buhari at the White House in 2015. ", "Bilateral relations under the Trump Administration appear broadly consistent with those pursued under the Obama Administration. President Trump's call to President Buhari in February 2017, his first to any sub-Saharan African leader, suggested continued emphasis on the importance of the bilateral relationship, and Nigeria was among the counties visited by then-Secretary of State Rex Tillerson in March 2018. President Buhari was the first sub-Saharan leader to visit the Trump White House, in April 2018. During the visit, President Trump lauded Nigeria's security efforts and U.S. cooperation while voicing the need to improve commercial and business ties. In November 2017, the Commerce Department launched the U.S.-Nigeria Commercial and Investment Dialogue (CID) with an initial focus on \"infrastructure, agriculture, digital economy, investment, and regulatory reform.\" Deputy Secretary of State John Sullivan outlined security cooperation, economic growth and development, and democracy and governance as defining goals of U.S.-Nigerian relations during the 2017 meeting of the BNC. ", "Assistant Secretary of State for African Affairs Tibor Nagy visited Nigeria during his first official trip to the continent, in November 2018. He indicated a U.S. interest in seeing Nigeria play a larger role in the region, both in terms of peacekeeping and advancing democracy. The Assistant Secretary described Nigeria as at the center of his efforts to increase U.S. trade and investment in Africa. He and other U.S. officials have stressed the importance of free, fair, transparent, and peaceful elections in 2019. The United States and like-minded donors expressed concern with reported intimidation, interference, and vote-buying during gubernatorial elections in 2018.", "The United States maintains an embassy in Abuja and a consulate in Lagos. The State Department also maintains \"American Corners\" in libraries throughout the country to share information on the culture and values of the United States. The State Department's travel advisory for U.S. citizens regarding travel to Nigeria notes the risks of armed attacks in the Niger Delta and the northeast as well as the threat of piracy in the Gulf of Guinea, and it warns against travel to Borno, Yobe, and northern Adamawa states."], "subsections": []}, {"section_title": "Nigeria's Role in Regional Stability and Counterterrorism Efforts", "paragraphs": ["Nigeria has played a significant role in peace and stability operations across Africa, and the United States has provided the country with security assistance focused on enhancing its peacekeeping capabilities. Given Nigeria's strategic position along the coast of the Gulf of Guinea, the United States has also coordinated with Nigeria through various regional forums and maritime security initiatives. Nigeria's waters have been named the most dangerous in the world for maritime piracy and armed robbery at sea. Nigeria is also considered a transshipment hub for narcotics trafficking, and several Nigerian criminal organizations have been implicated in the trade. The U.S. Navy has increased its operations in the Gulf of Guinea and in 2007 launched the African Partnership Station (APS) there. APS deployments have included port visits to Nigeria and joint exercises between U.S., Nigerian, European, and other regional navies.", "Bilateral counterterrorism cooperation increased in the aftermath of the 2009 bombing attempt of a U.S. airliner by a Nigerian national, but was constrained during the Jonathan Administration despite U.S. concern over the rising Boko Haram threat. The Nigerian government has coordinated with the Department of Homeland Security, the Federal Aviation Administration, and the International Civil Aviation Organization to strengthen its security systems. Cooperation with the Department of Defense has also expanded in recent years. Nigeria is a participant in the State Department's Trans-Sahara Counterterrorism Partnership (TSCTP), a U.S. interagency effort that aims to increase regional counterterrorism capabilities and coordination. Its role in that program, however, has been minor in comparison to Sahel countries. ", "U.S. military assistance for regional efforts to counter Boko Haram has been channeled primarily through engagement with Nigeria's neighbors: Cameroon, Chad, and Niger. Support has also been focused on the region's Multinational Joint Task Force (MNJTF). The United States and several other foreign countries conduct periodic aerial surveillance operations in the region.", "Many U.S. officials, while stressing the importance of the bilateral relationship and the gravity of security threats in and potentially emanating from the country, have been concerned about abuses by security services, and about the government's limited efforts to address perceived impunity within the forces. Obama Administration concerns culminated in the 2014 decision to block the sale of U.S.-manufactured Cobra helicopters by Israel to Nigeria. Security cooperation subsequently improved and the Obama Administration proceeded with plans for the sale of 12 Super Tucano A-29 aircraft and accompanying ammunition and weaponry, but when a Nigerian jet struck an IDP camp in early 2017, the United States suspended the process. The Trump Administration revisited and approved the sale, worth an estimated $345 million, in December 2017. In a joint press conference during Buhari's 2018 visit to the White House, President Trump downplayed the Obama Administration's concerns. Buhari has faced domestic pressure around the purchase, particularly over his withdrawal, reportedly without parliamentary approval, of nearly $900 million from Nigeria's Excess Crude Account to fund the Super Tucano acquisition and other security-related purchases. According to the contract award, work on the Super Tucanos is expected to be completed in May 2024.", "Nigerian officials are reportedly sensitive to perceived U.S. interference in internal affairs and have sometimes rejected other forms of assistance, in particular some U.S. military training offers. Upon taking office, President Buhari pledged to \"insist on the rule of law, and deal with any proven cases of deviation from laws of armed conflict, including human rights abuses.\" Nonetheless, observers question whether the government has taken serious steps to hold senior commanders responsible for abuses, and raise concern that \"scorched earth\" tactics may persist. "], "subsections": []}, {"section_title": "U.S. Assistance to Nigeria", "paragraphs": ["Nigeria routinely ranks among the top recipients of U.S. bilateral foreign assistance in Africa. The United States is Nigeria's largest bilateral donor, providing an average of over $450 million annually (see Table 1 ). According to the State Department's FY2019 Congressional Budget Justification, \"assistance will address the drivers of conflict by seeking to strengthen democratic governance, broaden economic growth by introducing methods that increase agricultural sector productivity and efficiency, and expand the provision of basic services to Nigerians at the state and local levels.\" Nigeria is a focus country under the President's Emergency Plan for AIDS Relief (PEPFAR) and the President's Malaria Initiative (PMI), and Nigerian farmers benefit from agriculture programs under the Feed the Future (FTF) initiative that focus on building partnerships with the private sector to expand exports and generate employment. Interventions to encourage private sector participation in trade and energy are also key components of economic growth initiatives in Nigeria.", "U.S. security assistance to Nigeria has focused on enhancing maritime security, counternarcotics, counterterrorism, and peacekeeping capacity. Counterterrorism assistance to Nigeria, while increasing, has been constrained by various factors, including human rights concerns. The State Department has included Nigeria on its Child Soldiers Prevention Act (CSPA) List since 2015 due to the CJTF's recruitment and use of children. Nigeria has received various equipment via the Excess Defense Articles (EDA) program, including naval vessels and Mine Resistant Ambush Protected vehicles (MRAPs). Nigeria was one of four country recipients of a $40 million Global Security Contingency Fund regional program launched in 2014 to counter Boko Haram. U.S. Africa Command (AFRICOM) has provided advanced infantry training for some of the troops deployed in the northeast and has deployed U.S. military advisors to the Nigerian military's operational headquarters in Maiduguri, in Borno. U.S. advisors have also supported the headquarters of the African Union-authorized, donor-supported MNJTF, which is commanded by a Nigerian general. U.S. military assistance has increased under the Trump Administration: the Department of Defense (DOD) has notified Congress of over $16 million in DOD Train-and-Equip support (10 U.S.C. 333) in FY2018 and FY2019. "], "subsections": []}, {"section_title": "Congressional Engagement", "paragraphs": ["Terrorism-related concerns have dominated congressional action on Nigeria in recent years, although some Members have also continued to monitor human rights, governance, and humanitarian issues; developments in the Niger Delta; Nigeria's energy sector; and violence in the country's Middle Belt. Nigeria's elections are often a focus of congressional interest: two resolutions introduced in the final weeks of the 115 th Congress, H.Res. 1170 and S.Res. 716 , would have called for Nigeria to hold credible, transparent, and peaceful elections in 2019; those resolutions have been reintroduced in the 116 th Congress as H.Con.Res. 4 and S.Con.Res. 1 .", "Several congressional committees have held hearings on Boko Haram in recent years. The House Homeland Security Subcommittee on Counterterrorism and Intelligence held Congress's first hearing to examine the group in late 2011. Prior to the State Department's decision to designate the group as an FTO, several Members in the 113 th Congress introduced legislation, including H.R. 3209 and S. 198 , that would have advocated for the designation. Other recent Boko Haram-related legislation includes, but is not limited to, the following:", "P.L. 114-92 (FY2016 National Defense Authorization Act, 114 th Congress), with report language directing the Secretaries of Defense and State to provide an assessment of the Boko Haram threat and a description of U.S. counter-Boko Haram efforts. P.L. 114-266 (Boko Haram Regional Threat Strategy, 114 th Congress), requiring a regional strategy to address the threat posed by Boko Haram. P.L. 115-31 (Consolidated Appropriations Act, 2017, 115 th Congress), making funds available for assistance for Nigeria, including counterterrorism programs, activities to support women and girls targeted by Boko Haram, and efforts to protect freedoms of expression, association, and religion."], "subsections": []}]}]}}
{"id": "R45185", "title": "Army Corps of Engineers: Water Resource Authorization and Project Delivery Processes", "released_date": "2019-04-19T00:00:00", "summary": ["At the direction of Congress, the U.S. Army Corps of Engineers (USACE) in the Department of Defense (DOD) undertakes water resource development activities. USACE develops civil works projects principally to improve navigable channels, reduce flood and storm damage, and restore aquatic ecosystems. Congress directs USACE through authorizations and appropriations legislation. Congress often considers USACE authorization legislation biennially and appropriations annually. USACE attracts congressional attention because its projects can have significant local and regional economic benefits and environmental effects. This report summarizes authorization legislation, project delivery, authorities for alternative project delivery, and other USACE authorities.", "Authorization Legislation. For USACE studies and projects, congressional study and project authorization generally is required prior to being eligible for federal appropriations. Congress generally considers an omnibus USACE authorization bill biennially. The bill is typically titled a Water Resources Development Act (WRDA). Agency action on an authorization typically requires funding; that is, both an authorization and an appropriation would be needed to proceed. Most water resource project authorizations in WRDAs fall into three general categories: project studies, construction projects, and modifications to existing projects. A few provisions in WRDA bills have time-limited authorizations; therefore, some WRDA provisions may reauthorize expired or expiring authorities. Recent authorization bills include:", "America's Water Infrastructure Act of 2018 (AWIA 2018; P.L. 115-270), which included Title I, Water Resources Development Act of 2018 (WRDA 2018) which focused on USACE civil works; Water Infrastructure Improvements for the Nation Act (WIIN; P.L. 114-322), which included Title I ,Water Resources Development Act of 2016 (WRDA 2016) which focused on USACE civil works; and Water Resources Reform and Development Act of 2014 (WRRDA 2014; P.L. 113-121), which was largely, but not wholly, focused on USACE civil works.", "In WRRDA 2014, Congress developed processes for identifying site-specific studies and projects for authorization to overcome concerns related to congressionally directed spending (known as earmarks). Congress also used these processes for WRDA 2016 and WRDA 2018.", "Standard and Alternative Project Delivery. The standard process for a USACE project requires two separate congressional authorizations\u2014one for studying feasibility, and a subsequent one for construction\u2014as well as appropriations for both. In recent years, congressional authorization for project construction has been based on a favorable report by the Chief of Engineers (a Chief's report) and an accompanying feasibility report. For most activities, Congress requires a nonfederal sponsor to share some portion of study and construction costs. For some project types (e.g., local flood control), nonfederal sponsors are responsible for operation and maintenance.", "WRRDA 2014, WRDA 2016, and WRDA 2018 expanded the opportunities for interested nonfederal entities, including private entities, to have greater roles in project development, construction, and financing. WRRDA 2014 also authorized, through the Water Infrastructure Finance and Innovation Act (WIFIA), a program to provide direct loans and loan guarantees for water projects. Although the WIFIA program administered by the U.S. Environmental Protection Agency is operational, the USACE WIFIA program for navigation, flood risk reduction, and ecosystem restoration projects has not been implemented.", "Other USACE Activities and Authorities. Congress has granted USACE general authorities to undertake some activities without requiring additional congressional authorization, including emergency actions related to flooding and limited actions in response to drought. Additionally, under the National Response Framework, USACE may be tasked with performing activities in response to an emergency or disaster, principally associated with public works and engineering such as providing temporary roofing and emergency power restoration. In addition to its work for the Department of the Army under USACE's military program, USACE under various authorities also may perform work on a reimbursable basis for other DOD entities, federal agencies, state and local governments, and foreign governments (e.g., USACE manages the construction of multiple border barrier projects on a reimbursable basis for Customs and Border Protection)."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The U.S. Army Corps of Engineers (USACE) is an agency within the Department of Defense with both military and civil works responsibilities. The agency's civil works mission has evolved with the changing needs of the nation. It began with improving and regulating navigation channels thereby facilitating the movement of goods between states and for import and export. Congress then charged the agency to help in reducing the damages from floods. More recently, Congress has authorized the agency to restore aquatic ecosystems. USACE operates more than 700 dams; has built 14,500 miles of levees; and improves and maintains more than 900 coastal, Great Lakes, and inland harbors, as well as 12,000 miles of inland waterways. ", "Congress directs and oversees the specific navigation, flood control, and ecosystem restoration projects that USACE plans and constructs through authorization legislation, annual and supplemental appropriations legislation, and oversight efforts. The agency typically is working with nonfederal project sponsors in the development of these water resource projects. The demand for USACE projects typically exceeds the federal appropriations for these projects. ", "Broadly, Congress is faced with considering how well the nation is addressing its water resource needs and what is the current and future role of USACE in addressing those needs. Part of the issue is how effective, efficient, and equitable is the USACE project delivery process in meeting the nation's needs. Unlike with federal funding for highways and municipal water infrastructure, the majority of federal funds provided to USACE for water resource projects are not distributed by formula to states or through competitive grant programs. Instead, USACE is directly engaged in the planning and construction of projects; the majority of its appropriations are used performing work on specific studies and contracting for construction of projects authorized by Congress."], "subsections": [{"section_title": "Scope and Structure of Report", "paragraphs": ["This report examines the standard development and delivery of a USACE water resource project (e.g., steps in the process, role of Congress, nonfederal project sponsor role). It also presents the evolving alternative project delivery and innovative finance options. This report provides an overview of USACE water resource authorization and project delivery processes and selected related issues. The report discusses the following topics:", "primer on the agency and its authorization legislation, typically titled as a Water Resources Development Act (WRDA); standard process for planning and construction of USACE water resource projects; interest in and authorities for alternative project delivery and innovative finance for water resource projects; and other USACE authorities, including its authorities for Continuing Authorities Programs (CAPs) and technical assistance, emergency response, and reimbursable work. ", " Appendix A describes the evolution of USACE water resource missions and authorities. Appendix B provides an overview of Water Resources Development Acts and other USACE civil works omnibus authorization bills enacted from 1986 through 2018, which are collectively referred to herein as WRDAs."], "subsections": []}]}, {"section_title": "Primer on the Agency and Its Authorization", "paragraphs": ["The civil works program is led by a civilian Assistant Secretary of the Army for Civil Works, who reports to the Secretary of the Army. A military Chief of Engineers oversees the agency's civil and military operations and reports on civil works matters to the Assistant Secretary for Civil Works. A civilian Director of Civil Works reports to the Chief of Engineers. The agency's civil works responsibilities are organized under eight divisions, which are further divided into 38 districts. The districts and divisions perform both military and civil works activities and are led by Army officers. An officer typically is in a specific district or division leadership position for two to three years; a Chief of Engineers often serves for roughly four years. In 2018, the Trump Administration has expressed interest in the possibility of removing USACE from the Department of Defense; for more information on the status of this proposal, see \" Proposals on Reorganizing USACE Functions \" later in this report. ", "Local interests and Members of Congress often are particularly interested in USACE pursuing a project because these projects can have significant local and regional economic benefits and environmental effects. In recent decades, Congress has legislated on most USACE authorizations through WRDAs. Congress uses WRDA legislation to authorize USACE water resource studies, projects, and programs and to establish policies (e.g., nonfederal cost-share requirements). WRDAs generally authorize new activities that are added to the pool of existing authorized activities. The authorization can be project-specific, programmatic, or general. Most project-specific authorizations in WRDAs fall into three general categories: project studies, construction projects, and modifications to existing projects. WRDAs also have deauthorized projects and established deauthorization processes. A limited set of USACE authorizations expire unless a subsequent WRDA extends the authorizations.", "Generally, a study or construction authorization by itself is insufficient for USACE to proceed. For the most part, the agency can only pursue what it is both authorized and funded to perform. Federal funding for USACE civil works activities generally is provided in annual Energy and Water Development appropriations acts and at times through supplemental appropriations acts. Over the last decade, annual USACE appropriations have ranged from $4.7 billion in FY2013 to $7.0 billion in FY2019. An increasing share of the appropriations has been used for operation and maintenance (O&M) of USACE owned and operated projects. In recent years, Congress has directed more than 50% of the enacted annual appropriations to O&M and limited the number of new studies and construction projects initiated with annual appropriations. For more on USACE appropriations, see the following:", "CRS Report R45326, Army Corps of Engineers Annual and Supplemental Appropriations: Issues for Congress , by Nicole T. Carter; CRS In Focus IF10864, Army Corps of Engineers: FY2019 Appropriations , by Nicole T. Carter; and CRS In Focus IF11137, Army Corps of Engineers: FY2020 Appropriations , by Nicole T. Carter and Anna E. Normand. ", "The agency identified a $98 billion backlog of projects that have construction authorization that are under construction or are awaiting construction funding. That is, the rate at which Congress authorizes USACE to perform work has exceeded the work that can be accomplished with the agency's appropriations. For context, annual appropriations for construction funding in FY2018 and FY2019 were $2.1 billion and $2.2 billion, respectively. Given that USACE starts only a few construction projects using discretionary appropriations in a fiscal year (e.g., five using annual appropriations provided in FY2019), numerous projects authorized for construction in previous WRDAs remain unfunded. USACE may have hundreds of authorized studies that are not currently funded, and few new studies are funded annually. Congress allowed USACE to initiate six new studies using FY2019 appropriations."], "subsections": [{"section_title": "USACE Authorization Legislation: 1986 to Present Process", "paragraphs": [], "subsections": [{"section_title": "1986 to 2014", "paragraphs": ["Beginning with WRDA 1986 ( P.L. 99-662 ), Congress loosely followed a biennial WRDA cycle for a number of years. WRDAs were enacted in 1988 ( P.L. 100-676 ), 1990 ( P.L. 101-640 ), 1992 ( P.L. 102-580 ), 1996 ( P.L. 104-303 ), 1999 ( P.L. 106-53 ), and 2000 ( P.L. 106-541 ). Deliberations on authorization of particular USACE projects and interest in altering how the agency developed, economically justified, and mitigated for its projects resulted extended beyond the biennial cycle, Congress enacting the next WRDA in 2007 ( P.L. 110-114 ). Congress did not enact a WRDA for a number of years following WRDA 2007. An issue that complicated enactment was devising a way to develop an omnibus water authorization bill that identified specific studies and projects to authorize and modify, as congressionally directed spending (known as earmarks ) received increasing scrutiny. "], "subsections": []}, {"section_title": "2014", "paragraphs": ["The Water Resources Reform and Development Act of 2014 (WRRDA 2014; P.L. 113-121 ) was enacted in June 2014. It authorized 34 construction projects that had received agency review, had Chief of Engineers reports (also known as Chief's r eports ), and had been the subject of a congressional hearing, thereby overcoming most concerns related to earmarks in the legislation. WRRDA 2014 also created a new process for identifying nonfederal interest in and support for USACE studies and projects. For more on WRRDA 2014, see CRS Report R43298, Water Resources Reform and Development Act of 2014: Comparison of Select Provisions , by Nicole T. Carter et al. "], "subsections": []}, {"section_title": "2016, 2018, and the Section 7001 Annual Report Process", "paragraphs": ["In Section 7001 of WRRDA 2014, Congress called for the Secretary of the Army to submit an annual report to the congressional authorizing committees\u2014the House Transportation and Infrastructure Committee and the Senate Environment and Public Works Committee\u2014of potential and publicly submitted study and project authorization proposals for Congress to consider for authorization. The process to develop and transmit this report, referred to as the Section 7001 process, provides Congress a means by which to identify new studies and other activities for potential inclusion in an omnibus authorization bill. The Assistant Secretary of the Army delivered to Congress a Section 7001 annual report in February 2015, February 2016, March 2017, and February 2018. A notice requesting public submissions for consideration for the fifth Section 7001 annual report was published on April 20, 2018. USACE accepted submissions through August 20, 2018. These submissions are to be considered for inclusion in the annual report expected to be delivered to the authorizing committees in mid-2019. USACE has indicated that the next call for submissions is expected to open in May 2019.", "With WRDA 2016, which was Title I of the Water Infrastructure Improvements for the Nation Act (WIIN; P.L. 114-322 , enacted in December 2016), Congress returned enactment of USACE authorization legislation to a biennial timeframe. WRDA 2016 authorized new studies based on proposals in the Section 7001 reports and construction projects based on Chief's reports.", "The 115 th Congress enacted America's Water Infrastructure Act of 2018 (AWIA 2018, P.L. 115-270 ) in October 2018. AWIA 2018 includes the Water Resources Development Act of 2018 (WRDA 2018) as Title I of the bill. Like WRDA 2016, Congress used the Section 7001 reports to identify new studies, and Chief's reports to identify the construction projects that Congress authorized in WRDA 2018. "], "subsections": []}]}, {"section_title": "Future Authorization Legislation", "paragraphs": ["Like previous Congresses, the 116 th Congress may consider WRDA legislation. These deliberations are likely to be shaped by many factors, such as policy proposals by the President, congressional policies on earmarks, and development of an infrastructure initiative or other actions or developments that may alter the framework and context for federal and nonfederal investments. Congress also may have available various reports to inform its WRDA development and deliberations. In addition to the Section 7001 reports and Chief's reports, the authorizing committees receive annually a report required by Section 1002 of WRRDA 2014. The Section 1002 report identifies when USACE feasibility studies\u2014the detailed studies of the water resource problem that are developed to inform the Chief's report and congressional authorization\u2014are anticipated to reach various milestones. At the start of FY2019, USACE currently had roughly 100 active feasibility studies. In addition to feasibility studies, Congress may be presented with other types of studies recommending actions that require congressional authorization. These studies include postauthorization change reports for modifying an authorized project prior to or during construction, reevaluation reports for a modification to a constructed project, and reports recommending deauthorization of constructed projects that no longer serve their authorized purposes. Reports and analyses by Government Accountability Office (GAO), Inspector Generals, Congressional Budget Office, National Academy of Sciences (NAS), National Academy of Public Administration, Inland Waterway Users Board, Environmental Advisory Board to the Chief of Engineers, advocacy and industry groups, and others also may influence congressional deliberations. "], "subsections": []}, {"section_title": "Efforts to Shape the Future of USACE", "paragraphs": [], "subsections": [{"section_title": "Proposals on Reorganizing USACE Functions", "paragraphs": ["In June 2018, the Trump Administration proposed to move the civil works activities from the Department of Defense to the Department of Transportation and the Department of the Interior to consolidate and align the USACE civil works missions with these agencies. Although some Members of Congress have indicated support for looking at which USACE functions may not need to be in the Department of Defense, the conference report that accompanied the USACE appropriations for FY2019 ( P.L. 115-244 ), H.Rept. 115-929 , stated the following:", "The conferees are opposed to the proposed reorganization as it could ultimately have detrimental impacts for implementation of the Civil Works program and for numerous non-federal entities that rely on the Corps' technical expertise, including in response to natural disasters.\u2026 Further, this type of proposal, as the Department of Defense and the Corps are well aware, will require enactment of legislation, which has neither been proposed nor requested to date. Therefore, no funds provided in the Act or any previous Act to any agency shall be used to implement this proposal.", "As previously noted, USACE's central civil works responsibilities are to support coastal and inland commercial navigation, reduce riverine flood and coastal storm damage, and protect and restore aquatic ecosystems in U.S. states and territories. Additional project benefits also may be developed, including water supply, hydropower, recreation, fish and wildlife enhancement, and so on. In addition, USACE has certain regulatory responsibilities that Congress has assigned to the Secretary of the Army; these responsibilities include issuing permits for private actions that may affect navigation, wetlands, and other waters of the United States. As part of its military and civil responsibilities and under the National Response Framework, USACE participates in emergency response activities (see \" Natural Disaster and Emergency Response Activities \" section of this report). For more information on USACE civil works responsibilities, see Appendix A .", "The Trump Administration has not provided additional details on its June 2018 reorganization proposal for USACE in subsequent public documents. More recently, USACE and the Assistant Secretary of the Army have focused their attention on efforts to \"revolutionize USACE civil works\" as part of the Trump Administration's reform of how infrastructure projects are regulated, funded, delivered, and maintained. The three objectives of the effort are: (1) accelerate USACE project delivery, (2) transform project financing and budgeting, and (3) regulatory reform (e.g., improve the permitting process). For more on how USACE projects are delivered and how options for project delivery and financing have changed, see \" Standard Project Delivery Process \" and \" Alternative Project Delivery and Innovative Finance ,\" respectively."], "subsections": []}, {"section_title": "WRDA 2018 Studies on Future of USACE and Economic Evaluation of Projects", "paragraphs": ["The 115 th Congress enacted provisions that support receiving information to inform discussions about improving the project delivery and budgeting for projects. In WRDA 2018, Congress included the following provisions: Section 1102, Study of the Future of the United States Army Corps of Engineers; and Section 1103, Study on Economic and Budgetary Analyses.", "In Section 1102 of WRDA 2018, Congress required that the Secretary of the Army to contract with the National Academy of Sciences to evaluate the following:", "USACE's ability of carry out its mission and responsibilities and the potential effects of transferring functions and resources from the Department of Defense to a new or existing federal agency; and how to improve USACE's project delivery, taking into account the annual appropriations process, the leadership and geographic structure at the divisions and districts, and the rotation of senior USACE leaders. ", "The legislation requires that the study be completed within two years of enactment (which would be October 2020).", "In Section 1103 of WRDA 2018, Congress required that the Secretary of the Army contract with the NAS to do the following:", "review the economic principles and methods used by the USACE to formulate, evaluate, and budget for water resources development projects, and recommend changes to improve transparency, return on federal investment, cost savings, and prioritization in USACE budgeting of these projects. "], "subsections": []}]}]}, {"section_title": "Standard Project Delivery Process", "paragraphs": ["Standard USACE project delivery consists of the agency leading the study, design, and construction of authorized water resource projects. Nonfederal project sponsors typically share in study and construction costs, providing the land and other real estate interests, and identifying locally preferred alternatives. Since the 1950s, questions related to how project beneficiaries and sponsors should share in the cost and delivery of USACE projects have been the subject of debate and negotiation. Much of the basic arrangement for how costs and responsibilities are currently shared was established by Congress in the 1980s, with adjustments in subsequent legislation, including in recent statutes.", "Congressional authorization and appropriations processes are critical actions in a multistep process to deliver a USACE project. This section describes the standard delivery process for most USACE projects, which consists of the following basic steps:", "Congressional study authorization is obtained in a WRDA or similar authorization legislation. USACE performs a feasibility study, if funds are appropriated. Congressional construction authorization is pursued. USACE can perform preconstruction engineering and design while awaiting construction authorization, if funds are appropriated. Congress authorizes construction in a WRDA or similar authorization legislation, and USACE constructs the project, if funds are appropriated.", "The process is not automatic. Appropriations are required to perform studies and construction; that is, congressional study and construction authorizations are necessary but insufficient for USACE to proceed. Major steps in the process are shown in Figure 1 . ", "For most water resource activities, USACE needs a nonfederal sponsor to share the study and construction costs. Since WRDA 1986, nonfederal sponsors have been responsible for funding a portion of studies and construction, and they may be 100% responsible for O&M and repair of certain types of projects (e.g., flood risk reduction and aquatic ecosystem restoration). Most flood risk reduction and ecosystem restoration projects are transferred to nonfederal owners after construction; many navigation and multipurpose dams are federally owned and operated.", "Nonfederal sponsors generally are state, tribal, territory, county, or local agencies or governments. Although sponsors typically need to have some taxing authority, Congress has authorized that some USACE activities can have nonprofit and other entities as the nonfederal project sponsor; a few authorities allow for private entities as partners.", " Table 1 provides general information on the duration and federal share of costs for various phases in USACE project delivery. Project delivery often takes longer than the combined duration of each phase shown in Table 1 because some phases require congressional authorization before they can begin and action on each step is subject to the availability of appropriations. "], "subsections": [{"section_title": "Feasibility Study and Chief's Report", "paragraphs": ["A USACE water resource project starts with a feasibility study (sometimes referred to as an investigation) of the water resource issue and an evaluation of the alternatives to address the issue. The purpose of the USACE study process is to inform federal decisions on whether there is a federal interest in authorizing a USACE construction project. USACE generally requires two types of congressional action to initiate a study\u2014study authorization and then appropriations. Congress generally authorizes USACE studies in WRDA legislation. ", "Once a study is authorized, appropriations are sought from monies generally provided in the annual Energy and Water Development appropriations acts. Within USACE, projects are largely planned at the district level and approved at the division level and USACE headquarters. Early in the study process, USACE assesses the level of interest and support of nonfederal entities that may be potential sponsors that share project costs and other responsibilities. USACE also investigates the nature of the water resource problem and assesses the federal government's interest. ", "If USACE recommends proceeding and a nonfederal sponsor is willing to contribute to the study, a feasibility study begins. The cost of the feasibility study (including related environmental studies) is split equally between USACE and the nonfederal project sponsor, as shown in Table 1 . The objective of the feasibility study is to formulate and recommend solutions to the identified water resource problem. During the first few months of a feasibility study, the local USACE district formulates alternative plans, investigates engineering feasibility, conducts benefit-cost analyses, and assesses environmental impacts under the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. \u00a74321). (For more information on NEPA compliance and cost-benefit analyses, see the box \"USACE Feasibility Studies: National Environmental Policy Act Compliance and Economic Analyses.\") The evaluation of USACE water resource projects is governed by the 1983 Principles and Guidelines for Water and Related Resources Implementation Studies (often referred to as the P&G) and by policy direction provided in WRDA bills and other enacted legislation. An important outcome of the feasibility analysis is determination of whether the project warrants further federal investment. Under the P&G, the federal objective in planning generally is to contribute to national economic development (NED) consistent with protecting the nation's environment. A feasibility study generally identifies a tentatively preferred plan, which typically is the plan that maximizes the NED consistent with protecting the environment (referred to as the NED plan). The Assistant Secretary of the Army has the authority to grant an exception and recommend a plan other than the NED plan. In some circumstances, the nonfederal sponsor may support an alternative other than the NED plan, which is known as the locally preferred plan (LPP). If the LPP is recommended and authorized, the nonfederal entity is typically responsible for 100% of the difference in project costs (construction and operation and maintenance costs) between the LPP and the NED plan. ", "Once the final feasibility study is available, the Chief of Engineers signs a recommendation on the project, known as the Chief's report. USACE submits the completed Chief's reports to the congressional authorizing committees (33 U.S.C. \u00a72282a) and transmits the reports to the Assistant Secretary of the Army for Civil Works and the Office of Management and Budget (OMB) for Administration review. Since the mid-1990s, Congress has authorized many projects based on Chief's reports prior to completion of the project review by the Assistant Secretary and OMB."], "subsections": []}, {"section_title": "Preconstruction Engineering and Design", "paragraphs": ["USACE preconstruction engineering and design (PED) of a project may begin after the Chief's report subject to the availability of appropriations (33 U.S.C. \u00a72287). PED consists of finalizing the project's design, preparing construction plans and specifications, and drafting construction contracts for advertisement. USACE work on PED is subject to the availability of USACE appropriations. Once funded, the average duration of PED is two years, but the duration varies widely depending on the size and complexity of a project. PED costs are distributed between the federal and nonfederal sponsor in the same proportion as the cost-share arrangement for the construction phase; see Table 2 for information on the cost-share requirements for construction."], "subsections": []}, {"section_title": "Construction and Operation and Maintenance", "paragraphs": ["Once the project receives congressional construction authorization, federal funds for construction are sought in the annual appropriations process. Once construction funds are available, USACE typically functions as the project manager; that is, USACE staff, rather than the nonfederal project sponsor, usually are responsible for implementing construction. Although project management may be performed by USACE personnel, physical construction is contracted out to private engineering and construction contractors. When USACE manages construction, the agency typically pursues reimbursement of the nonfederal cost share during project construction. Post-construction ownership and operations responsibilities depend on the type of project. When construction is complete, USACE may own and operate the constructed project (e.g., navigation projects) or ownership and maintenance responsibilities may transfer to the nonfederal sponsor (e.g., most flood damage reduction projects). ", "The cost-share responsibilities for construction and O&M vary by project purpose, as shown in Table 2 . Table 2 first provides the cost share for the primary project purposes of navigation, flood and storm damage reduction, and aquatic ecosystem restoration. Next, it provides the cost shares for additional project purposes, which can be added to a project that has at least one of the three primary purposes at its core. WRDA 1986 increased local cost-share requirements; some subsequent WRDAs further adjusted cost sharing. Deviation from the standard cost-sharing arrangements for individual projects is infrequent and typically requires specific authorization by Congress. "], "subsections": []}, {"section_title": "Changes After Construction Authorization", "paragraphs": ["A project may undergo some changes after authorization. If project features or estimated costs change significantly, additional congressional authorization may be necessary. Congressional authorization for a significant modification typically is sought in a WRDA. Requests for such modifications or for the study of such modifications also are solicited through the Section 7001 annual report process. For less significant modifications, additional authorization often is not necessary. Section 902 of WRDA 1986, as amended (33 U.S.C. \u00a72280), generally allows for increases in total project costs of up to 20% (after accounting for inflation of construction costs) without additional congressional authorization."], "subsections": []}, {"section_title": "Changes After Construction: Section 408 Permissions to Alter a USACE Project", "paragraphs": ["If nonfederal entities are interested in altering USACE civil works projects after construction, the entity generally must obtain permission from USACE. The agency's authority to allow alterations to its projects derives from Section 14 of the Rivers and Harbors Act of 1899, also known as Section 408 based on its codification at 33 U.S.C. \u00a7408. This provision states that the Secretary of the Army may \"grant permission for the alteration or permanent occupation or use of any of the aforementioned public works when in the judgment of the Secretary such occupation or use will not be injurious to the public interest and will not impair the usefulness of such work.\" Pursuant to the regulations, USACE conducts a technical review of the proposed alteration's effects on the USACE project. Section 408 permissions may be required not only for projects operated and maintained by USACE, but also federally authorized civil works projects operated and maintained by nonfederal project sponsors (e.g., many USACE-constructed, locally maintained levees). At the end of the Section 408 process, USACE chooses to approve or deny permission for the alteration. USACE may attach conditions to its Section 408 permission."], "subsections": []}, {"section_title": "Deauthorization Processes and Divestiture", "paragraphs": [], "subsections": [{"section_title": "Deauthorization of Projects", "paragraphs": ["Most authorizations of USACE construction projects are not time limited. To manage the backlog of authorized projects that are not constructed, Congress has enacted various deauthorization processes. ", "General Deauthorization Authority. Of the current deauthorization authorities for unconstructed projects, the oldest directs the Secretary of the Army to transmit to Congress annually a list of authorized projects and project elements that did not receive obligations of funding during the last five full fiscal years (33 U.S.C. \u00a7579a(b)(2)). If funds are not obligated for the planning, design, or construction of the project or project element during the following fiscal year, the project or project element is deauthorized. The final project deauthorization list is published in the Federal Register . The process is initiated when the Secretary of the Army transmits the list. WRDA 2018 One-Time Process. Section 1301 of WRDA 2018 created a one-time process to deauthorize at least $4 billion of authorized projects that are unconstructed and are \"no longer viable for construction.\" This process can deauthorize unconstructed projects or project elements authorized prior to WRDA 2007, projects on the list produced pursuant to the general deauthorization authority (33 U.S.C. \u00a7579a(b)(2)), and unconstructed projects requested to be deauthorized by the nonfederal sponsor. WRDA 2016 One-Time Process. Section 1301 of WRDA 2016 created a one-time process to deauthorize projects with federal costs to complete of at least $10 billion that are \"no longer viable for construction.\" This process can only deauthorize projects authorized prior to WRDA 2007. Projects Authorized in WRDA 2018, WRDA 2016 , and WRRDA 2014 . Section 1302 of WRDA 2018 requires that a project authorized in WRDA 2018 be automatically deauthorized if no funding had been obligated for its construction after 10 years of enactment (i.e., 10 years after October 2018), unless certain conditions apply). Section 1302 of WRDA 2016 requires that any project authorized in WRDA 2016 be automatically deauthorized if after 10 years of enactment (December 2026) no funding had been obligated for its construction, unless certain conditions apply. Section 6003 of WRRDA 2014, as amended by Sec. 1330 of WRDA 2018, requires that any project authorized in WRRDA 2014 be automatically deauthorized if after 10 years of enactment (June 2024) no funding had been obligated for its construction.", "USACE has not addressed uncertainties regarding how implementation of these authorities is to be coordinated.", "A separate divestiture process is used to dispose of constructed projects or project elements and other real property interests associated with civil works projects. Some divestitures also may require explicit congressional deauthorization. USACE divestitures historically either have been limited to projects or real property interests that no longer serve their authorized purposes (e.g., navigation channels that no longer have commercial navigation) or have been conducted pursuant to specific congressional direction. While Section 1301 of WRDA 2018 appears to provide a one-time opportunity for unconstructed projects to be deauthorized, there currently is no formal process similar to the Section 7001 annual report process for a nonfederal entity to propose that a constructed project be deauthorized. Congress has deauthorized unconstructed and constructed projects and project elements in WRDA legislation."], "subsections": []}, {"section_title": "Deauthorization of Studies", "paragraphs": ["There are two authorities for deauthorizing studies:", "The Secretary of the Army is directed to transmit to Congress annually a list of incomplete authorized studies that have not received appropriations for five full fiscal years (33 U.S.C. \u00a72264). The study list is not required to be published in the Federal Register . Congress has 90 days after submission of the study list to appropriate funds for a study; otherwise, the study is deauthorized. WRRDA 2014, as amended by WRDA 2018, requires that a feasibility study that remains incomplete 10 years after initiation is automatically deauthorized.", "CRS has no data indicating that studies have been deauthorized through these processes in recent years. USACE has indicated that the agency is reviewing its 5,600 study authorities to identify studies for deauthorization."], "subsections": []}]}]}, {"section_title": "Alternative Project Delivery and Innovative Finance", "paragraphs": [], "subsections": [{"section_title": "Interest in Alternative Delivery", "paragraphs": ["As nonfederal entities have become more involved in USACE projects and their funding, they have expressed frustration with the time it takes USACE to complete studies and construction. Delayed completion of water resource projects can postpone some or all of a project's anticipated benefits. The impact of these delays varies by the type of project. Delayed completion of flood risk reduction projects may prolong a community's vulnerability to certain coastal and riverine floods, thereby contributing to the potential cost of disaster response and recovery. Delayed investment in navigation projects may result in postponed transportation cost savings from improved efficiency and in greater reliance on road and rail transport. Delayed aquatic ecosystem restoration projects may result in missed opportunities to attenuate wetlands loss and realize related ecosystem benefits, such as those for water quality and fisheries. ", "Another concern with long project delivery is the potential for an increase in project costs. The Government Accountability Office in a 2013 report summarized its findings regarding cost growth at USACE flood control projects. GAO's detailed review of eight projects found that a factor contributing to cost increases at these USACE-led flood risk reduction projects was funding below the capability level. Other factors included design changes, initial USACE cost estimates being lower than later cost estimates, and differences in contract estimates and actual contract costs. When testifying in 2013, USACE Deputy Commanding General for Civil and Emergency Operations Major General Michael J. Walsh noted that how much funding is put toward a project significantly impacts the duration of project delivery. ", "Although President Trump (as well as previous Presidents) and many Members of Congress have expressed interest in improving the nation's infrastructure, including its water resource infrastructure, balancing the potential benefits of such improvements and concerns about increased federal expenditures poses an ongoing challenge. While a subset of authorized USACE construction activities is included in the President's budget request and funded annually by congressional appropriations, numerous authorized USACE projects or project elements have not received federal construction funding. ", "Competition for USACE discretionary appropriations has increased interest in alternative project delivery and innovative financing , including private financing and public-private partnerships (P3s). In a June 21, 2017, memorandum, the agency's Director of Civil Works announced the initiation of a comprehensive review to identify opportunities to enhance project delivery, organizational efficiency, and effectiveness. Congress, particularly in WRRDA 2014, WRDA 2016, and WRDA 2018, has authorized and extended alternative ways to advance and deliver USACE studies and projects. To expand delivery options, Congress has increased the flexibility in the nonfederal funding of USACE-led activities, nonfederal leadership of USACE studies and projects, and P3s. It also has authorized new financing mechanisms for water resource projects. Some of these expanded delivery and financed options are discussed below."], "subsections": []}, {"section_title": "Expansion of Delivery Options", "paragraphs": ["WRRDA 2014 and WRDA 2016 expanded the authorities for nonfederal entities to perform studies and construct projects (or elements of projects) that typically would have been undertaken by USACE. These statutes also provided that the costs of these nonfederal-led activities are shared by the federal government largely as if USACE had performed them. That is, nonfederal entities advancing water resource projects may be eligible to receive credit or reimbursement (without interest) subject to the availability of federal appropriations for their investments that exceed the required nonfederal share of project costs. These authorities typically require that the nonfederal entity leading the project comply with the same laws and regulations that would apply if the work were being performed by USACE. ", "Private sector access to financing and expertise and experience with complex project management are all seen as potential advantages for the delivery of some types of public infrastructure. Interest has expanded in recent years in allowing private engagement in U.S. water resource projects, which would follow the models used in other U.S. infrastructure sectors, such as transportation, and in international examples of private provision of public infrastructure and related services. WRRDA 2014 directed USACE to establish pilot programs to evaluate the effectiveness and efficiency of allowing nonfederal applicants to carry out certain authorized projects. For example, WRRDA 2014 included the following:", "Section 5014 authorized a P3 pilot program, and Section 1043 authorized the transfer of federal funds to nonfederal entities to use for the construction of authorized USACE projects.", "The 116th Congress may consider water resource project financing and delivery during deliberations on USACE appropriations and authorization legislation, as well as during discussions of broader infrastructure initiatives. In H.Rept. 115-929 , which accompanied USACE FY2019 appropriations, congressional appropriators directed USACE to continue to develop its policy approach for public-private partnerships. For a discussion of some of the issues that have impeded greater private-sector participation and P3 efforts for USACE and water resource projects (e.g., limitations on USACE entering into long-term contracts and challenges to assessing project-specific user fees) see CRS Testimony TE10023, America's Water Resources Infrastructure: Approaches to Enhanced Project Delivery , by Nicole T. Carter. ", "Under these authorities, additional nonfederal investments may, in the near term, achieve progress on some water resource projects, thereby potentially making federal funding available for other authorized USACE projects. However, additional nonfederal investment may have potential trade-offs for the federal government, including reduced federal influence over the set of studies and construction projects receiving, expecting, and eligible for federal support. Others raise concerns that these provisions alter how USACE funds are used by directing federal dollars toward projects with nonfederal sponsors that can provide more nonfederal funding upfront. A concern from the nonfederal perspective is the challenge of obtaining federal reimbursement. "], "subsections": []}, {"section_title": "Water Infrastructure Finance and Innovation Act", "paragraphs": ["WRRDA 2014 in Sections 5021 through 5035 authorized the Water Infrastructure Finance and Innovation Act (WIFIA), a program to provide direct loans and loan guarantees for identified categories of water projects. The WIFIA concept is modeled after a similar program that assists transportation projects: the Transportation Infrastructure Finance and Innovation Act, or TIFIA, program. Congress established WIFIA with roles for both USACE and the Environmental Protection Agency (EPA). EPA's WIFIA program is funded and operational; USACE's WIFIA program remains in the development phase.", "WIFIA authorized both agencies to provide assistance in the form of loans and loan guarantees, and it identified each agency to provide that assistance for certain types of water projects. Under the WIFIA program, USACE is authorized to provide WIFIA support for a number of different project types, such as flood damage reduction projects, hurricane and storm damage reduction projects, environmental restoration projects, coastal or inland harbor navigation improvement projects, inland and intracoastal waterways navigation projects, or a combination of these projects. WRRDA 2014 included a number of project selection criteria that would affect whether individual projects are eligible to receive USACE WIFIA funding. ", "WRDA 2018 amended the WIFIA authorization of appropriations provided by WRRDA 2014. WRRDA 2014 authorized WIFIA appropriations for each of FY2015 through FY2019 for $50 million for each of the EPA Administrator and the Secretary of the Army. WRDA 2018 added an authorization of appropriations for the EPA Administration for $50 million for each of FY2020 and FY2021. ", "Implementation of WIFIA requires congressional appropriations to cover administrative expenses (i.e., \"start-up\" costs) and subsidy costs (i.e., the presumed default rate on guaranteed loans). Each agency also must promulgate regulations for the implementation of its WIFIA program. EPA has developed its regulations; USACE has not. The Administration has requested and Congress has provided funds for EPA's WIFIA. EPA is implementing its WIFIA authority. In contrast, the Administration had not requested funding for USACE's WIFIA start-up costs. Congress has directed USACE to develop the structure for its WIFIA program; however, the USACE WIFIA program has not advanced sufficiently to be operational. In H.Rept. 115-929 for FY2019, congressional appropriators directed USACE to continue to develop its WIFIA proposals for future budget submissions and to allow for WIFIA development expenses to be funded through the USACE Expenses account. Similar to recent years, the President's FY2020 request did not request funding for USACE's WIFIA. For a discussion of issues related to USACE implementation of WIFIA, see CRS Testimony TE10023, America's Water Resources Infrastructure: Approaches to Enhanced Project Delivery , by Nicole T. Carter. "], "subsections": []}]}, {"section_title": "Other USACE Authorities and Activities", "paragraphs": ["There are exceptions to the standard project delivery process described above. USACE has some general authorities to undertake small projects, technical assistance, and emergency actions. Congress also has specifically authorized USACE to undertake numerous municipal water and wastewater projects. USACE also performs work on a reimbursable basis for other agencies and entities. These additional authorities are described below."], "subsections": [{"section_title": "Small Projects Under Continuing Authorities Programs", "paragraphs": ["The agency's authorities to undertake small projects are called Continuing Authorities Programs (CAPs). Projects under these authorities can be conducted without project-specific congressional study or construction authorization and without project-specific appropriations; these activities are performed at USACE's discretion without the need for inclusion in the Section 7001 reports. According to USACE, once funded, CAP projects generally take three years from feasibility phase initiation to construction completion. For most CAP authorities, Congress has limited the project size and scope as shown in Table 3 . The CAPs typically are referred to by the section number in the bill in which the CAP was first authorized. WRRDA 2014 requires the Assistant Secretary of the Army to publish prioritization criteria for the CAPs and an annual CAP report. For more information, see CRS In Focus IF11106, Army Corps of Engineers: Continuing Authorities Programs , by Anna E. Normand."], "subsections": []}, {"section_title": "Planning and Technical Assistance and Tribal Programs", "paragraphs": ["Congress has granted USACE some general authorities to provide technical assistance related to water resources planning and for floodplain management. Congress also has authorized USACE to provide technical and construction assistance to tribes. Except where noted in Table 4 , USACE does not need project-specific authority to undertake activities under the authorities listed in Table 4 ."], "subsections": []}, {"section_title": "Natural Disaster and Emergency Response Activities", "paragraphs": [], "subsections": [{"section_title": "National Response Framework", "paragraphs": ["For assistance for presidentially declared disasters pursuant to the Stafford Act ( P.L. 93-288 ), USACE may be tasked with performing various response and recovery activities. These activities are funded through the Disaster Relief Fund and performed at the direction of the Federal Emergency Management Agency (FEMA) and the President and at the request of the governor of a state or territory with an affected area. Under the National Response Framework, USACE coordinates emergency support for public works and engineering . This support includes technical assistance, engineering, and construction management as well as emergency contracting, power, and repair of public water and wastewater and solid waste facilities. USACE also assists in monitoring and stabilizing damaged structures and in demolishing structures designated as immediate hazards to public health and safety. In addition, the agency provides technical assistance in clearing, removing, and disposing of contaminated and uncontaminated debris from public property and in establishing ground and water routes into affected areas. USACE coordinates contaminated debris management with EPA."], "subsections": []}, {"section_title": "Flood Fighting and Emergency Response", "paragraphs": ["In addition to work performed as part of the National Response Framework, Congress has given USACE its own emergency response authority. This is commonly referred to as the agency's P.L. 84-99 authority, based on the act in which it was originally authorized, the Flood Control and Coastal Emergency Act (P.L. 84-99, 33 U.S.C. \u00a7701n). The act authorizes USACE to perform emergency response and disaster assistance. It also authorizes disaster preparedness, advance measures, emergency operations (disaster response and post-flood response), rehabilitation of certain damaged flood control works, protection or repair of certain federally authorized shore protection works threatened by coastal storms, emergency dredging, and flood-related rescue operations. These activities are limited to actions to save lives and protect improved property (public facilities/services and residential or commercial developments). USACE also has some authorities to assist with selected activities during drought.", "Most of the agency's emergency response work (including the repair program described below) generally is funded through supplemental appropriations provided directly to USACE. Until supplemental appropriations are provided, Congress has provided USACE with authority to transfer money from ongoing USACE projects to emergency operations (33 U.S.C. \u00a7701n)."], "subsections": []}, {"section_title": "Repair of Damaged Levees and Other Flood and Storm Projects", "paragraphs": ["In P.L. 84-99, Congress authorized USACE to rehabilitate damaged flood control works (e.g., levees) and federally constructed hurricane or shore protection projects (e.g., federal beach nourishment projects) and to conduct related inspections. This authority is referred to as the Rehabilitation and Inspection Program (RIP). To be eligible for rehabilitation assistance, the project must be in active status at the time of damage by wind, wave, or water action other than ordinary nature. Active RIP status is maintained by proper project maintenance as determined during an annual or semiannual inspection and by the correction of deficiencies identified during periodic inspections. As of early 2017, RIP included around 1,100 projects consisting of 14,000 miles of levees and 33 dams.", "For locally constructed projects, 80% of the cost to repair the damage is paid using federal funds and 20% is paid by the levee or dam owner. For federally constructed projects, the entire repair cost is a federal responsibility (except the nonfederal sponsor is responsible for the cost of obtaining the sand or other material used in the repair). For damage to be repaired, USACE must determine that repair has a favorable benefit-cost ratio. Local sponsors assume any rehabilitation cost for damage to an active project attributable to deficient maintenance. WRDA 2016 allows that in conducting repair or restoration work under RIP, an increase in the level of protection can be made if the nonfederal sponsor pays for the additional protection. "], "subsections": []}]}, {"section_title": "Assistance for Environmental Infrastructure/Municipal Water and Wastewater", "paragraphs": ["Since 1992, Congress has authorized and provided for USACE assistance with design and construction of municipal drinking water and wastewater infrastructure projects. This assistance has included treatment facilities, such as recycling and desalination plants; distribution and collection works, such as stormwater collection and recycled water distribution; and surface water protection and development projects. This assistance is broadly labeled environmental infrastructure at USACE. ", "Most USACE environmental infrastructure assistance is authorized for a specific geographic location (e.g., city, county, multiple counties) under Section 219 of WRDA 1992 ( P.L. 102-580 ), as amended; however, other similar authorities, sometimes covering regions or states, exist in multiple sections of WRDAs and in selected Energy and Water Development Appropriations acts. The nature of USACE's involvement (e.g., a grant from USACE to the project owner or USACE acting as the construction project manager) and nonfederal cost share vary according to the specifics of the authorization. Most USACE environmental infrastructure assistance requires cost sharing, typically designated at 75% federal and 25% nonfederal; however, some of the assistance authorities are for 65% federal and 35% nonfederal cost sharing. Under Section 219, USACE performs the authorized work; for environmental infrastructure projects authorized in other provisions, USACE often can use appropriated funds to reimburse nonfederal sponsors for work they perform.", "Since 1992, Congress has authorized USACE to contribute assistance to more than 300 of these projects and to state and regional programs, with authorizations of appropriations totaling more than $5 billion. WRRDA 2014 expanded authorizations and authorization of appropriations for specific multi-state environmental infrastructure activities. In WRDA 2016 and WRDA 2018, Congress expanded the Section 7001 process, allowing nonfederal entities to propose modifications to existing authorities for environmental infrastructure assistance. (For more on Section 7001 process, see \" 2016, 2018, and the Section 7001 Annual Report Process .\")", "Although no Administration has included environmental infrastructure in a USACE budget request since the first congressional authorization in 1992, Congress regularly includes USACE environmental infrastructure funds in appropriations bills. Congress provided $50 million in FY2015, $55 million in each of FY2016 and FY2017, $70 million in FY2018, and $77 million in FY2019. These funds are part of the \"additional funding\" provided by Congress in enacted appropriations bills. After enactment of an appropriations bill, the Administration follows guidance provided in the bill and accompanying reports to direct its use of these funds on authorized environmental infrastructure assistance activities. The selected environmental infrastructure assistance activities are identified in the agency's work plan for the fiscal year, which is typically available within two months after enactment of appropriations. Recently, funds have been used to continue ongoing environmental infrastructure assistance. ", "Because environmental infrastructure activities are not traditional USACE water resource projects, they are not subject to USACE planning process (e.g., a benefit-cost analysis and feasibility study are not performed). USACE environmental infrastructure assistance activities, however, are subject to federal laws, such as NEPA. "], "subsections": []}, {"section_title": "Reimbursable Work", "paragraphs": ["In addition to its work for the Department of the Army under USACE's military program, USACE under various authorities also may perform work on a reimbursable basis for other DOD entities, federal agencies, states, tribes, local governments, and foreign governments. Other departments and agencies often call upon USACE's engineering and contracting expertise, as well as experience with land and water restoration and research and development. USACE contracts with private firms to perform most of the work. According to the Chief of Engineers in March 2019 testimony, USACE only accepts requests for reimbursable work that are deemed consistent with USACE's core technical expertise, are in the national interest, and that can be executed without impacting USACE's primary military and civil works missions. ", "An example of reimbursable work include USACE's execution of contracts for EPA's efforts to remediate contaminated sites. Another example is USACE's contract management for border barrier and road construction at the U.S.-Mexico border for the Department of Homeland Security's Customs and Border Protection. USACE may perform this reimbursable work pursuant to broad authorities (e.g., Economy in Government Act, 31 U.S.C. \u00a71535; Intergovernmental Cooperation Act, 31 U.S.C. \u00a76505) or agency-specific authorities (e.g., 10 U.S.C \u00a73036(e) known as the Chief's Economy Act). ", "Appendix A. Evolution of USACE Civil Works Responsibilities", "The civil responsibilities of the U.S. Army Corps of Engineers (USACE) began with creating and regulating navigable channels and later flood control projects. Navigation projects include river deepening, channel widening, lock expansion, dam operations, and disposal of dredged material. Flood control projects are intended to reduce riverine and coastal storm damage; these projects range from levees and floodwalls to dams and river channelization. Many USACE projects are multipurpose\u2014that is, they provide water supply, recreation, and hydropower in addition to navigation or flood control. USACE environmental activities involve wetlands and aquatic ecosystem restoration and environmental mitigation activities for USACE facilities. The agency's regulatory responsibility for navigable waters extends to issuing permits for private actions that might affect navigation, wetlands, and other waters of the United States. ", "Navigation and Flood Control (1802-1950s)", "The agency's civil works mission developed in the 19 th century. In 1824, Congress passed legislation charging military engineers with planning roads and canals to move goods and people. In 1850, Congress directed USACE to engage in its first planning exercise\u2014flood control for the lower Mississippi River. In 1899, Congress directed the agency to regulate obstructions of navigable waters (see box titled \"USACE Regulatory Activities: Permits and Their Authorities). During the 1920s, Congress expanded USACE's ability to incorporate hydropower into multipurpose projects and authorized the agency to undertake comprehensive surveys to establish river-basin development plans. The Flood Control Act of 1928 (70 Stat. 391) authorized USACE to construct flood control projects on the Mississippi and Tributaries (known as the MR&T project), and modified a 1917 authority for flood control project on the Sacramento River in California. The modern era of federal flood control emerged with the Flood Control Act of 1936 (49 Stat. 1570), which declared flood control a \"proper\" federal activity in the national interest. The 1944 Flood Control Act (33 U.S.C. \u00a7708) significantly augmented the agency's involvement in large multipurpose projects and authorized agreements for the temporary use of surplus water. The Flood Control Act of 1950 (33 U.S.C. \u00a7701n) began the agency's emergency operations through authorization for flood preparedness and emergency operations. The Water Supply Act of 1958 (43 U.S.C. \u00a7390b) gave USACE authority to include some reservoir storage for municipal and industrial water supply in reservoir projects at 100% nonfederal cost.", "Changing Priorities (1960-1985)", "From 1970 to 1985, Congress authorized no major water projects, scaled back several authorized projects, and passed laws that altered project operations and water delivery programs to protect the environment. The 1970s marked a transformation in USACE project planning. The 1969 National Environmental Policy Act (42 U.S.C. \u00a74321) and the Endangered Species Act of 1973 (16 U.S.C. \u00a71531) required federal agencies to consider environmental impacts, increase public participation in planning, and consult with other federal agencies. Enactment in 1972 of what became the Clean Water Act also expanded the USACE's regulatory responsibilities; for more on the USACE role in implementing Section 404 of the Clean Water Act (33 U.S.C. \u00a71344), see the text box \"USACE Regulatory Activities: Permits and Their Authorities.\" ", "Executive orders (E.O. 11988 and E.O. 11990) united the goals of reducing flood losses and decreasing environmental damage by recognizing the value of wetlands and by requiring federal agencies to evaluate potential effects of actions on floodplains and to minimize wetlands impacts. Various dam failures and safety concerns in the United States\u2014Buffalo Creek Dam (private), West Virginia in 1972; Reclamation's Teton Dam (Bureau of Reclamation), Idaho in 1976; and Kelly Barnes Dam (private), Georgia in 1977; among others\u2014drew public and elected officials' attention. Much of the current federal dam safety framework developed out of executive orders and policies in the late 1970s and legislation in the 1980s. These include the USACE's lead role in the National Inventory of Dams; for more information, see the text box \"National Inventory of Dams.\"", "Environmental Mission and Nonfederal Responsibility (1986-2000)", "Congress changed the rules for USACE water projects and their funding through the 1986 Water Resources Development Act (WRDA 1986; 33 U.S.C. \u00a72211). WRDA 1986 established new cost-share formulas, resulting in greater financial and decision-making roles for nonfederal stakeholders. It also reestablished the tradition of biennial consideration of an omnibus USACE water resource authorization bill. ", "WRDA 1990 (33 U.S.C. \u00a7\u00a71252, 2316) explicitly expanded the agency's mission to include environmental protection and increased its responsibility for contamination cleanup, dredged material disposal, and hazardous waste management. WRDA 1992 (33 U.S.C. \u00a72326) authorized USACE to use the \"spoils\" from dredging in implementing projects for protecting, restoring, and creating aquatic and ecologically related habitats, including wetlands. WRDA 1996 (33 U.S.C. \u00a72330) gave USACE limited programmatic authority to undertake aquatic ecosystem restoration projects. Although USACE has been involved with numerous environmental restoration projects in recent years, WRDA 2000 approved a restoration program for the Florida Everglades that represented the agency's first multiyear, multibillion-dollar effort of this type. ", "Evolving Demands and Processes (2001-present)", "The agency's aging infrastructure and efforts to enhance the security of its infrastructure from terrorism and natural threats have expanded USACE activities in infrastructure rehabilitation, maintenance, and protection. USACE has been involved in significant flood-related disaster response and recovery activities, including following Hurricane Katrina in 2005, Hurricane Sandy in 2012, and the 2017 hurricane season. WRDA 2007 included provision to expand levee safety efforts. USACE also has redirected its flood control activities to incorporate concepts of flood risk management and, more recently, flood resilience. The regularity with which USACE has received congressional appropriations for natural disaster response has increased attention to its role in emergency response, infrastructure repair, and post-disaster recovery and to the potential for nature-based flood risk reduction measures.", "WRDA 2007 continued the expansion of the agency's ecosystem restoration activities by authorizing billions of dollars for these activities, including large-scale restoration efforts in coastal Louisiana and the Upper Mississippi River. WRRDA 2014, WRDA 2016, and WRDA 2018 have expanded opportunities for nonfederal public and private participation in project delivery and financing and aimed to improve the efficiency of USACE planning activities. ", "Appendix B. Water Resources Development Acts from 1986 through 2018", "This appendix provides an overview of omnibus U.S. Army Corps of Engineers (USACE) authorization legislation from 1986 to 2016. It first presents a table with the various pieces of legislation that functioned as USACE omnibus authorization bills and identifies the titles relevant to USACE. The appendix next provides supplementary information to what was provided in \" USACE Authorization Legislation: 1986 to Present Process \" regarding the evolution of the bills and the contents of specific bills.", "Overview Table", " Table B-1 provides additional information on each of the bills that functioned as an omnibus USACE authorization bill often titled as a Water Resource Development Act (WRDA) since 1986. The table includes the following bills.", "WRDA 1986 ( P.L. 99-662 ) WRDA 1988 ( P.L. 100-676 ) WRDA 1990 ( P.L. 101-640 ) WRDA 1992 ( P.L. 102-580 ) WRDA 1996 ( P.L. 104-303 ) WRDA 1999 ( P.L. 106-53 ) WRDA 2000 ( P.L. 106-541 ) WRDA 2007 ( P.L. 110-114 ) Water Resources Reform and Development Act of 2014 (WRRDA 2014; P.L. 113-121 ) Water Infrastructure Improvements for the Nation Act (WIIN; P.L. 114-322 ) America's Water Infrastructure Act of 2018 (AWIA 2018, P.L. 115-270 ) ", "The table lists the titles used in the bills and the agency or department related to the majority of the provisions in each of those titles. The titles are shown in the table as being primarily associated with either USACE civil works or primarily associated with programs and activities of agencies or departments other than USACE (with the relevant agency or department shown in parentheses). The placement in one of the two columns of the table is a broad sorting and does not reflect the details of each provision within a title. For titles listed as primarily USACE, a few provisions in a title may relate principally to other agencies or departments while the bulk of the title is USACE related, and vice versa for titles listed as not primarily associated with USACE. Titles related to revenue and trust funds that are closely associated with USACE projects and USACE appropriations are shown in the table as USACE titles. As appropriate, clarifying notes are provided in the final column. ", "As shown in Table B-1 , USACE was the focus of the majority of titles for all of the bills except WIIN and AWIA 2018. For two of the bills\u2014WRDA 1992 and WRRDA 2014\u2014there were titles for which the majority of the provisions were related to the U.S. Environmental Protection Agency (EPA) while also being related to USACE activities. For example, Title V of WRRDA 2014 included authorizations that included both EPA and USACE, authorities only related to EPA, and an authority only related to USACE. WRDA 1992 had a title with provisions that related most closely to EPA's role in sediment management; USACE, however, has a role in sediment management more broadly as well as being mentioned in a few of the provisions of Title V of WRDA 1992. In contrast, WIIN included titles on water-related programs and projects spanning various agencies and departments other than USACE. Title I of the bill\u2014which had a short title designated as WRDA 2016\u2014focused specifically on USACE water resource authorizations, while Titles II, III, and IV focused primarily on other agencies; many of the specific provisions in these titles had no or little relationship to USACE.", "1986 Through WRDA 2007", "WRDA 1986 marked the end of a stalemate between Congress and the executive branch regarding USACE authorizations. It resolved long-standing disputes related to cost sharing, user fees, and environmental requirements. Prior to 1986, disputes over these and other matters had largely prevented enactment of major USACE civil works legislation since 1970. Biennial consideration of USACE authorization legislation resumed after WRDA 1986 in part to avoid long delays between the planning and execution of projects. Interest in authorizing new projects, increasing authorized funding levels, and modifying existing projects is often intense, thus prompting regular WRDA consideration. ", "WRDA enactment was less consistent for a period. Controversial project authorizations and disagreements over the need for and direction of change in how USACE plans, constructs, and operates projects contributed to WRDA bills not being enacted in the 107 th , 108 th , and 109 th Congresses. The 110 th Congress enacted WRDA 2007 in November 2007, overriding a presidential veto. ", "2007 Through 2018", "No WRDA bill was enacted between WRDA 2007 and WRRDA 2014. With WRDA 2016, Congress returned enactment of USACE authorization legislation to a biennial time frame. WRRDA 2014 and WRDA 2016 attempted to address frustrations among some stakeholders with the pace of study and construction of USACE projects by allowing interested nonfederal entities, including private entities, to have greater roles in project development, construction, and financing. ", "WRRDA 2014, which was enacted on June 10, 2014, authorized 34 construction projects that had received agency review, had Chief of Engineers reports (also known as Chief's re ports ), and had been the subject of a congressional hearing, thereby overcoming concerns related to congressionally directed spending (known as earmarks ). These 34 construction projects represented $15.6 billion in federal authorization of appropriations. WRRDA 2014 also altered processes and authorizations for project delivery options, including expanded opportunities for nonfederal entities to lead projects and for innovative financing, such as public-private partnerships. ", "WRDA 2016 authorized new USACE water resource studies (which were among those studies identified in the Section 7001 annual reports submitted in February 2015 and February 2016) and projects, as well as modifications to ongoing construction projects. Each of the construction authorizations for new projects had a Chief's report. WRDA 2016 authorized 30 new construction projects at a federal cost of more than $10 billion. Various USACE provisions in WRDA 2016 related to how nonfederal sponsors may participate in the financing of water infrastructure activities. For more on WRDA 2016 and the other titles of WIIN, see CRS In Focus IF10536, Water Infrastructure Improvements for the Nation Act (WIIN) , by Nicole T. Carter et al. ", "The 115 th Congress enacted America's Water Infrastructure Act of 2018 (AWIA 2018, P.L. 115-270 ) in October 2018. AWIA 2018 included the Water Resources Development Act of 2018 (WRDA 2018) as Title I of the bill. WRDA 2018 focused on USACE activities and dam and levee safety programs (that also relate to authorities of the Federal Emergency Management Agency). Other titles of AWIA 2018 addressed EPA water programs, Department of the Interior water authorities, water and related infrastructure authorities related to tribes, and hydropower (including authorities of the Federal Energy Regulatory Commission). ", "Regarding USACE project authorizations, WRDA 2018 authorized 12 new construction projects at a total cost of $5.6 billion ($3.7 billion federal and $1.9 billion nonfederal); modified 4 projects, increasing the projects' authorization of appropriations by approximately $1.3 billion ($1.1 billion federal and $0.2 billion nonfederal); and authorized project studies. WRDA 2018 expanded most of the agency's programmatic authorization of appropriations levels by 25%. WRDA 2018 also amended existing deauthorization efforts and authorities and established a process to deauthorize $4 billion in construction projects previously authorized by Congress that have not been constructed. In addition, WRDA 2018 included provisions requiring various reports from USACE and reports by the National Academy of Sciences."], "subsections": []}]}]}}
{"id": "RL30666", "title": "The Role of the House Minority Leader: An Overview", "released_date": "2019-01-25T00:00:00", "summary": ["The House minority leader, the head of the \"loyal opposition,\" is elected every two years by secret ballot of his or her party caucus or conference. The minority leader occupies a number of important institutional and party roles and responsibilities, and his or her fundamental goal is to recapture majority control of the House.", "From a party perspective, the minority leader has a wide range of assignments, all geared toward retaking majority control of the House. Five principal party activities direct the work of the minority leader. First, he or she provides campaign assistance to party incumbents and challengers. Second, the minority leader devises strategies, in consultation with like-minded colleagues, to advance party objectives. Third, the minority leader works to promote and publicize the party's agenda. Fourth, the minority leader, if his or her party controls the White House, confers regularly with the President and his aides about issues before Congress, the Administration's agenda, and political events generally. Fifth, the minority leader strives to promote party harmony so as to maximize the chances for legislative and political success.", "From an institutional perspective, the rules of the House assign a number of specific responsibilities to the minority leader. For example, Rule XIII, clause 6, grants the minority leader (or a designee) the right to offer a motion to recommit with instructions; and Rule II, clause 6, states that the Inspector General shall be appointed by joint recommendation of the Speaker, majority leader, and minority leader. The minority leader also has other institutional duties, such as appointing individuals to certain federal or congressional entities."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The minority leader of the modern House is the head of the \"loyal opposition.\" As the minority party's nominee for Speaker at the start of a new Congress, the minority leader traditionally hands the gavel to the Speaker-elect, who is usually elected on a straight party-line vote. The speakership election illustrates the main problem that confronts the minority leader: the subordinate status of the minority party in an institution noted for majority rule. As David Bonior, D-MI, explained: \"This body, unlike the other, operates under the principle that a determined majority should be allowed to work its will while protecting the rights of the minority to be heard.\" Minority party lawmakers are certain to be heard, but whether they will be heeded is sometimes another matter. Thus, the uppermost goal of any minority leader is to recapture majority control of the House.", "The minority leader is elected every two years by secret ballot of his or her party caucus or conference. These party leaders are typically experienced lawmakers when they win election to this position. The current minority leader, Kevin McCarthy, R-CA, served 12 years in the House, including as majority leader, prior to assuming his current role (a position he also held during his time in the California state assembly). Speaker Nancy Pelosi, D-CA, served in the House for 16 years when she first became minority leader in the 108 th Congress (2003-2004). Following her first tenure as Speaker from 2007 to 2010, Pelosi was again elected minority leader in the 112 th Congress (2011-2012), at which point she was a 24-year veteran of the House. When her predecessor, John Boehner, R-OH, was elected minority leader in the 110 th Congress (2007-2008), he had served in the House for 18 years including as majority leader, committee chair (Education and the Workforce), and, prior to that, chair of the Republican Conference. Richard Gephardt, D-MO, began his tenure as minority leader in the 104 th Congress (1995-1996) as an 18-year House veteran and a former majority leader and chair of the Democratic Caucus. Gephardt's predecessor, Robert Michel, R-IL, became minority leader in 1981 after 24 years in the House. Much like his successors, John Rhodes, R-AZ, had served in the House for 20 years when he was elected minority leader in 1973.", "While the position itself is usually occupied by Members with significant House experience, the roles and responsibilities of the minority leader are not well-defined. To a large extent, the duties of the minority leader are based on tradition and custom. Representative Bertrand Snell, R-NY, minority leader from 1931 to 1938, described the position in the following way:", "He is spokesman for his party and enunciates its policies. He is required to be alert and vigilant in defense of the minority's rights. It is his function and duty to criticize constructively the policies and programs of the majority, and to this end employ parliamentary tactics and give close attention to all proposed legislation.", "Since Snell's description, other responsibilities have been added to the job. Broadly speaking, the role of the minority leader in the contemporary Congress is twofold: to serve as the leader and spokesperson for the minority party, and to participate in certain institutional prerogatives afforded to Members in the minority. How the minority leader handles these responsibilities is likely to depend on a variety of elements, including personality and contextual factors; the size and cohesion of the minority party; whether or not the party controls the White House; the general political climate both inside and outside the House; and expectations of the party's performance in upcoming elections. The next section of the report discusses the historical origin of this position, and the sections that follow take account of the various party and institutional responsibilities of the minority leader."], "subsections": []}, {"section_title": "Origin of the Minority Leader's Post", "paragraphs": ["To a large extent, the position of minority leader is a late-19 th -century innovation. Prior to this time congressional parties were often relatively disorganized, so it was not always evident who functioned as the opposition floor leader. Decades went by before anything like our modern two-party congressional system emerged on Capitol Hill with official titles for those who were selected as party leaders. However, from the beginning days of Congress, various House Members intermittently assumed the role of \"opposition leader.\" Some scholars suggest that Representative James Madison of Virginia informally functioned as the first \"minority leader\" because in the First Congress he led the opposition to Treasury Secretary Alexander Hamilton's fiscal policies.", "During this early period, it was common for neither major party grouping (Federalists and Republicans) to have an official leader. In 1813, for instance, a scholar recounts that the Federalist minority of 36 Members needed a committee of 13 \"to represent a party comprising a distinct minority\" and \"to coordinate the actions of men who were already partisans in the same cause.\" In 1828, a foreign observer of the House offered this perspective on the absence of formal party leadership on Capitol Hill:", "I found there were absolutely no persons holding the stations of what are called, in England, Leaders, on either side of the House.... It is true, that certain members do take charge of administration questions, and certain others of opposition questions; but all this so obviously without concert among themselves, actual or tacit, that nothing can be conceived less systematic or more completely desultory, disjointed.", "Internal party disunity compounded the difficulty of identifying lawmakers who might have informally functioned as a minority leader. For instance, \"seven of the fourteen speakership elections from 1834 through 1859 had at least twenty different candidates in the field. Thirty-six competed in 1839, ninety-seven in 1849, ninety-one in 1859, and 138 in 1855.\" With so many candidates competing for the speakership, it is not at all clear that one of the defeated lawmakers then assumed the mantle of \"minority leader.\" The Democratic minority from 1861 to 1875 was so completely disorganized that they did not \"nominate a candidate for Speaker in two of these seven Congresses and nominated no man more than once in the other five. The defeated candidates were not automatically looked to for leadership.\"", "In the judgment of one congressional scholar, since 1883 \"the candidate for Speaker nominated by the minority party has clearly been the Minority Leader.\" However, this assertion is subject to dispute. On December 3, 1883, the House elected Democrat John G. Carlisle of Kentucky as Speaker. Republicans nominated J. Warren Keifer of Ohio, who was Speaker the previous Congress. But Keifer was viewed by his colleagues as a discredited leader in part because as Speaker he arbitrarily handed out \"choice jobs to close relatives ... all at handsome salaries.\" Keifer received \"the empty honor of the minority nomination. But with it came a sting\u2014for while this naturally involves the floor leadership, he was deserted by his [party] associates and his career as a national figure terminated ingloriously.\" Representative Thomas Reed, R-ME, who later became Speaker, assumed the de facto role of minority floor leader in Keifer's stead. \"[A]lthough Keifer was the minority's candidate for Speaker, Reed became its acknowledged leader, and ever after, so long as he served in the House, remained the most conspicuous member of his party.\"", "Although congressional historians disagree as to the exact time period when the minority leadership emerged officially as a party position, it seems safe to conclude that the position was established during the latter part of the 19 th century. This era was \"marked by strong partisan attachments, resilient patronage-based party organizations, and ... high levels of party voting in Congress.\" These conditions were conducive to the establishment of a more highly differentiated House leadership structure in which Members assumed more specialized roles within the institution. (See the Appendix for a list of House minority leaders selected since 1899.)", "One other historical point merits brief mention. Until the 61 st Congress (1909-1910), \"it was the custom to have the minority leader also serve as the ranking minority member on the two most powerful committees, Rules and Ways and Means.\" Today, the minority leader no longer serves on these committees but does chair the Republican Steering Committee, a party leadership committee responsible for making recommendations to the Conference regarding the committee assignments of House Republicans."], "subsections": []}, {"section_title": "Party Functions", "paragraphs": ["The minority leader has a number of formal and informal party responsibilities. Formally, the rules of each party specify certain roles and responsibilities for their leader. For example, under Republican Conference rules for the 116 th Congress (2019-2020), the minority leader nominates party members to the Committees on Rules and House Administration, subject to Conference approval. Republican Conference rules also authorize the minority leader to appoint a \"Leadership Member\" to the Committee on the Budget who \"will serve as the second highest-ranking Republican on the committee,\" and to \"recommend to the House all Republican Members of such joint, select, and ad hoc committees as shall be created by the House, in accordance with law.\"", "Beyond their formal responsibilities, minority leaders are expected to handle a wide range of informal party assignments. Lewis Deschler, a former House Parliamentarian (1928-1974), summarized the diverse duties of a party's floor leader:", "A party's floor leader, in conjunction with other party leaders, plays an influential role in the formulation of party policy and programs. He is instrumental in guiding legislation favored by his party through the House, or in resisting those programs of the other party that are considered undesirable by his own party. He is instrumental in devising and implementing his party's strategy on the floor with respect to promoting or opposing legislation. He is kept constantly informed as to the status of legislative business and as to the sentiment of his party respecting particular legislation under consideration. Such information is derived in part from the floor leader's contacts with his party's members serving on House committees, and with the members of the party's whip organization.", "These and several other party roles merit further discussion because they influence significantly the minority leader's overarching objective: to retake majority control of the House. \"I want to get [my] members elected and win more seats,\" said former Minority Leader Richard Gephardt, D-MO. \"That's what [my party colleagues] want to do, and that's what they want me to do.\" Five activities illustrate how minority leaders seek to accomplish this primary goal."], "subsections": [{"section_title": "Provide Campaign Assistance", "paragraphs": ["Minority leaders are typically energetic and aggressive campaigners for party incumbents and challengers. For example, they assist in recruiting qualified and competitive candidates; they establish \"leadership PACs\" to raise and distribute funds to House candidates of their party; they encourage party colleagues not to retire or run for other offices so as to limit the number of open seats the party would need to defend; they coordinate their campaign activities with congressional and national party campaign committees; they encourage outside groups to back their candidates; they travel around the country to speak on behalf of party candidates; and they encourage incumbent colleagues to make significant financial contributions to the party's campaign committee. In the weeks leading up to the 2018 congressional elections, for instance, Minority Leader Pelosi was actively campaigning for Democratic incumbents and challengers:", "With 21 days until the midterm elections, the California Democrat and House minority leader is crisscrossing the country fundraising and rallying the Democratic troops\u2014and plotting her return to the speakership.... In the third quarter [of 2018], Pelosi will report raising $34.2 million for Democrats, including $30.5 million for the DCCC [Democratic Congressional Campaign Committee]. She is by far the biggest source of cash for House Democrats and House Democratic candidates."], "subsections": []}, {"section_title": "Devise Minority Party Strategies", "paragraphs": ["The minority leader, in consultation with other party colleagues, has a range of strategic options that can be employed to advance minority party objectives. The options selected depend on a wide range of circumstances, such as the visibility or significance of the issue and the relative degree of cohesion within the majority and minority parties. For instance, a majority party riven by internal dissension\u2014as occurred during the early 1900s when \"progressive\" and \"regular\" Republicans were at loggerheads, or beginning in the late 1930s when a \"conservative coalition\" of Southern Democrats and like-minded Republicans emerged\u2014may provide the minority leader with greater opportunities to achieve party priorities than if the majority party exhibited high degrees of party cohesion (and could simply outvote the minority). Among the variable strategies available to the minority party, which can vary from bill to bill and be used in combination or at different stages of the lawmaking process, are the following:", "Cooperation . The minority party supports and cooperates with the majority party in building winning coalitions on the floor. Inconsequential Opposition . The minority party offers opposition, but it is of marginal significance, typically because the minority is so small. Withdrawal . The minority party chooses not to take a position on an issue, perhaps because of intraparty divisions or to spotlight divisions within the majority party. Innovation . The minority party develops alternatives and agendas of its own and attempts to construct winning coalitions on their behalf. Partisan Opposition . The minority party offers strong opposition to majority party initiatives, but does not counter with policy alternatives of their own. Participation . The minority party is in the position of having to consider the views and proposals of a same-party President and to assess their majority-building role with respect to the President's priorities.", "A look at one minority leadership strategy\u2014partisan opposition\u2014may suggest why it might be employed in specific circumstances. The purposes of obstruction are several, such as frustrating the majority party's ability to govern or attracting media attention to the alleged ineffectiveness of the majority party. \"We know how to delay,\" remarked Minority Leader Gephardt. Dilatory motions to adjourn, appeals of the presiding officer's ruling, or numerous requests for roll call votes, including on noncontroversial items like approving the House Jou rnal , are standard time-consuming parliamentary tactics. By stalling action on the majority party's agenda, the minority leader may be able to launch a campaign against a \"do-nothing Congress\" and convince enough voters to elevate the party to the House majority. To be sure, the minority leader recognizes that outright opposition carries risks. As a congressional scholar explains, \"A program of consistent opposition to majority party proposals and a refusal to engage in compromise, while electorally valuable, means forsaking policy gains that may otherwise have been achieved.\""], "subsections": []}, {"section_title": "Promote and Publicize the Party's Agenda", "paragraphs": ["Another important aim of the minority leader is to develop an electorally attractive agenda of ideas and proposals that unites party members and appeals to core electoral supporters as well as independents and swing voters. Despite the minority leader's limited ability to set the House's agenda, there are still opportunities to raise minority priorities. For example, the minority leader may file discharge petitions in an effort to bring minority priorities to the floor. If the required 218 signatures on a discharge petition can be obtained\u2014a number that demands at least some support from the majority\u2014minority initiatives can be brought to the floor even despite opposition from the majority leadership or the committee(s) of jurisdiction (or both). As a GOP minority leader explained, the challenge here is to \"keep our people together, and to look for votes on the other side.\"", "Minority leaders may engage in a range of activities to publicize their party's priorities and to criticize those of the opposition. For instance, to keep their party colleagues \"on message,\" they ensure that their party colleagues are sent packets of suggested press releases or \"talking points\" for constituent meetings in their districts; they help to organize \"town hall meetings\" in Members' districts around the country to publicize the party's agenda or a specific priority, such as health care or tax reform; they sponsor party \"retreats\" to discuss issues and assess the party's public image; they create \"theme teams\" to craft party messages that might be conveyed during the one-minute, morning hour, or special order period in the House; they conduct surveys of party colleagues to discern their policy preferences; they establish websites and Twitter feeds to highlight party priorities; they organize task forces or issue teams to formulate party programs and to develop strategies for communicating these programs to the public; and they appear on various media programs or write newspaper articles to win public support for the party's agenda.", "House minority leaders also hold joint news conferences with party colleagues and consult with their counterparts in the Senate. The overall objectives are to develop a coordinated communications strategy, to share ideas and information, and to present a united front on issues. Minority leaders also make floor speeches and may close debate for their side on major issues before the House. They must also be prepared \"to debate on the floor, ad lib , no notes, on a moment's notice,\" remarked Minority Leader Michel. In brief, minority leaders are key strategists in developing and promoting the party's agenda and in outlining ways to respond to the opposition's arguments and proposals. A \"Dear Colleague\" letter delivered to House Democratic offices ahead of the August 2018 recess illustrates the point. In the letter, Minority Leader Pelosi outlined the party's agenda and provided this guidance to her Democratic colleagues:", "A key part of our For The People agenda is to clean up corruption to make Washington work for the American people.... To honor the pledge of our For The People agenda, a Democratic majority will swiftly act to pass tougher ethics and campaign finance laws and crack down on the conduct that has poisoned the GOP Congress and the Trump Administration.... In district events and on social media, we must drive home the clear contrast between the corruption of the GOP Congress and the better deal that Democrats are offering the American people. We will own August with strength, confidence and clarity, as we make our case to the American people."], "subsections": []}, {"section_title": "Confer with the White House", "paragraphs": ["If his or her party controls the White House, the minority leader confers regularly with the President and his aides about issues before Congress, the Administration's agenda, and political events generally. Strategically, the role of the minority leader will vary depending on whether the President is of the same party or the other party. In general, minority leaders will work to advance the goals and aspirations of their party's President in Congress. When Robert Michel, R-IL, was minority leader (1981-1994), he typically functioned as the \"point man\" for Republican Presidents. President Ronald Reagan's 1981 policy successes in the Democratic-controlled House were due in no small measure to Minority Leader Michel's effectiveness in wooing so-called \"Reagan Democrats\" to support, for instance, the Administration's landmark budget reconciliation bill. There are occasions, of course, when minority leaders will fault the legislative initiatives of their President. On an Administration proposal that could adversely affect his district, Michel stated that he might \"abdicate my leadership role [on this issue] since I can't harmonize my own views with the administration's.\" Minority Leader Gephardt publicly opposed a number of President Clinton's legislative initiatives, from \"fast track\" trade authority to various budget issues, and Minority Leader Pelosi came out against a multilateral trade agreement with Asian-Pacific countries negotiated by the Obama White House.", "When the President and House majority are of the same party, then the House minority leader assumes a larger role in formulating alternatives to executive branch initiatives and in acting as a national spokesperson for his or her party. \"As Minority Leader during [President Lyndon Johnson's] Democratic administration, my responsibility has been to propose Republican alternatives,\" said Minority Leader Gerald Ford, R-MI. Greatly outnumbered in the House, Minority Leader Ford devised a political strategy that allowed Republicans to offer their alternatives in a manner that provided them political protection. As Ford explained,", "We used a technique of laying our program out in general debate. When we got to the amendment phase, we would offer our program as a substitute for the Johnson proposal. If we lost in the Committee of the Whole, then we would usually offer it as a motion to recommit and get a vote on that. And if we lost on the motion to recommit, our Republican members had a choice: They could vote against the Johnson program and say we did our best to come up with a better alternative. Or they could vote for it and make the same argument. Usually we lost; but when you're only 140 out of 435, you don't expect to win many.", "Ford also teamed with Senate Minority Leader Everett McKinley Dirksen, R-IL, to act as national spokesmen for their party. They held a press conference every Thursday following the weekly joint leadership meeting, a tradition that began with Ford's predecessor as minority leader, Charles Halleck, R-IN. When Minority Leaders Dirksen and Halleck appeared together they were dubbed the \"Ev and Charlie Show\" by the press, and the \"Republican National Committee budgeted $30,000 annually to produce the weekly news conference.\""], "subsections": []}, {"section_title": "Foster Party Harmony", "paragraphs": ["Minority status, by itself, is often an important inducement for minority party members to stay together, to accommodate different interests, and to submerge intraparty factional disagreements. To hold a diverse membership together often requires extensive consultations and discussions with rank-and-file Members and with different factional groupings. As Minority Leader Gephardt said,", "We have weekly caucus meetings. We have daily leadership meetings. We have weekly ranking Member meetings. We have party effectiveness meetings. There's a lot more communication. I believe leadership is bottom up, not top down. I think you have to build policy and strategy and vision from the bottom up, and involve people in figuring out what that is.", "Gephardt added that \"inclusion and empowerment of the people on the line have to be done to get the best performance\" from the minority party. Other techniques for fostering party harmony include the appointment of task forces composed of party colleagues with conflicting views to reach consensus on issues; daily meetings in the l eader's office (or at breakfast, lunch, or dinner) to lay out floor strategy or political objectives for the minority party; periodic retreats to allow party members to discuss issues and interact with one another outside the confines of Capitol Hill; and the creation of new leadership positions as a way to reach out and involve a greater diversity of party members in the leadership structure."], "subsections": []}]}, {"section_title": "Institutional Functions", "paragraphs": ["Beyond the party responsibilities of the minority leader are a number of institutional obligations associated with their position as a top House official. Many of these assignments or roles are spelled out in the standing rules of the House, while others have devolved upon the position in other ways. To be sure, the minority leader is provided with extra staff resources\u2014beyond those accorded him or her as a Representative\u2014to assist in carrying out diverse leadership functions. There are limits on the institutional role of the minority leader, because the majority party exercises disproportionate influence over the legislative agenda, partisan ratios on committees, staff resources, administrative operations, and the day-to-day schedule and management of floor activities.", "Under the rules of the House, the minority leader has certain roles and responsibilities. They include, among others, the following:"], "subsections": [{"section_title": "Motion to Recommit with Instructions", "paragraphs": ["Under Rule XIII, clause 6(c), the Rules Committee may not issue a \"rule\" that prevents the minority leader or a designee from offering a motion to recommit with instructions during initial House consideration of a bill or joint resolution. This motion allows the minority leader (or a designee) to offer a policy alternative to what the majority is proposing and obtain a floor vote on the minority's preferred solution."], "subsections": []}, {"section_title": "Questions of Privilege", "paragraphs": ["Under Rule IX, clause 2, a resolution \"offered as a question of privilege by the Majority Leader or the Minority Leader ... shall have precedence of all other questions except motions to adjourn.\" This rule further references the minority leader with respect to the division of time for debate of these resolutions. If offered by the majority or minority leader, a valid question of privilege\u2014one that involves \"the rights of the House collectively, its safety, dignity and the integrity of its proceedings\"\u2014receives immediate consideration by the House."], "subsections": []}, {"section_title": "Inspector General", "paragraphs": ["Rule II, clause 6, states that the \"Inspector General shall be appointed for a Congress by the Speaker, the Majority Leader, and the Minority Leader, acting jointly.\" This rule further states that the minority leader and other specified House leaders shall be notified of any financial irregularity involving the House and receive audit reports of the inspector general."], "subsections": []}, {"section_title": "Oversight Plans", "paragraphs": ["Under Rule X, clause 2, not later \"than March 31 in the first session of a Congress, after consultation with the Speaker, the Majority Leader, and the Minority Leader, the Committee on Oversight and Government Reform shall report to the House the authorization and oversight plans\" of the standing committees along with any recommendations it or the House leaders have proposed to ensure the effective coordination of committees' oversight plans."], "subsections": []}, {"section_title": "Committee on Ethics: Investigative Subcommittees", "paragraphs": ["Rule X, clause 5, stipulates, \"At the beginning of a Congress, the Speaker or a designee and the Minority Leader or a designee each shall name 10 Members, Delegates, or the Resident Commissioner from the respective party of such individual who are not members of the Committee on Ethics to be available to serve on investigative subcommittees of that committee during that Congress.\""], "subsections": []}, {"section_title": "Permanent Select Committee on Intelligence", "paragraphs": ["Another institutional prerogative of the minority leader is attendance at meetings of the Intelligence Committee. Rule X, clause 11, provides, \"The Speaker and the Minority Leader shall be ex officio members of the select committee but shall have no vote in the select committee and may not be counted for purposes of determining a quorum thereof.\" In addition, each leader \"may designate a respective leadership staff member to assist in the capacity of the Speaker or Minority Leader as ex officio member.\""], "subsections": []}, {"section_title": "Other Institutional Responsibilities", "paragraphs": ["In addition, the minority leader has a number of other institutional functions. For instance, the minority leader is sometimes statutorily authorized to appoint individuals to certain federal entities. The minority leader also selects three Members to serve as Private Calendar objectors\u2014the majority leader names the other three\u2014and serves on various commissions and groups, including the House Office Building Commission, the United States Capitol Preservation Commission, and the Bipartisan Legal Advisory Group. After consultation with the Speaker the minority leader may convene an early organizational party caucus or conference. Informally, the minority leader maintains ties with majority party leaders to learn about the schedule and other House matters, consults with the majority with respect to reconvening the House per the usual formulation of conditional concurrent adjournment resolutions, and forges agreements or understandings with them insofar as feasible. By House tradition, time is not charged to their side when party leaders, including the minority leader, make extended remarks on the floor."], "subsections": []}]}, {"section_title": "Concluding Observations", "paragraphs": ["Given the concentration of agenda control and other institutional resources in the majority leadership, the minority leader faces real challenges in promoting and publicizing the party's priorities, serving the interests of his rank-and-file Members, managing intraparty conflict, and forging party unity. The ultimate goal of the minority leader is to lead the party into majority status. Yet there is no set formula on how this is to be done. \"If the history of elections is any guide,\" wrote a congressional scholar, \"it seems apparent that the congressional record of the minority party is only one of many factors that may result in majority status. Most of the other factors cannot be controlled by the minority party and its leaders .\"", "There is one central dilemma that confronts the minority leader: inferior numbers. This limitation can be overcome on occasion with the right strategic approach, but on many issues this might not be possible. One study of the House minority party summarizes the strategic challenge succinctly:", "The minority party in the House faces a strategic problem: how do you respond when given only a small slice of the legislative pie? Do you accept the slice you've been given, bargain for more, or use every means at your disposal to win the right to cut the pie yourself? It is this problem, and how the minority party chooses to solve it, that underlies the logic of minority party politics in the House of Representatives."], "subsections": [{"section_title": "Appendix. House Minority Leaders, 1899-2019", "paragraphs": [], "subsections": []}]}]}}
{"id": "R44245", "title": "Israel: Background and U.S. Relations in Brief", "released_date": "2019-04-08T00:00:00", "summary": ["Strong relations between the United States and Israel have led to bilateral cooperation in many areas. Matters of particular significance to U.S.-Israel relations include", "Israel's ability to address the threats it faces in its region. Shared U.S.-Israel concerns about Iran and its allies on the nuclear issue and in Syria and Lebanon. Israeli-Palestinian issues. Israeli domestic political issues, including elections scheduled for 2019.", "Israel relies on a number of strengths to manage potential threats to its security and existence. It maintains conventional military superiority relative to neighboring states and the Palestinians. It also takes measures to deter attack and defend its population and borders from evolving asymmetric threats such as rockets and missiles, cross-border tunneling, drones, and cyberattacks. Additionally, Israel has an undeclared but presumed nuclear weapons capability.", "Against a backdrop of strong bilateral cooperation, Israel's leaders and supporters routinely make the case that Israel's security and the broader stability of the region remain critically important for U.S. interests. A 10-year bilateral military aid memorandum of understanding (MOU)\u2014signed in 2016\u2014commits the United States to provide Israel $3.3 billion in Foreign Military Financing annually from FY2019 to FY2028, along with additional amounts from Defense Department accounts for missile defense. All of these amounts remain subject to congressional appropriations.", "Israeli officials seek to counter Iranian regional influence and prevent Iran from acquiring nuclear weapons. Prime Minister Binyamin Netanyahu released new Israeli intelligence on Iran's nuclear program in April 2018, days before President Trump announced the U.S. withdrawal from the 2015 international agreement that constrains Iran's nuclear activities. It is unclear whether Israel might take future military action in Iran if Iranian nuclear activities resume. Since 2018, Israel has conducted a number of military operations in Syria against Iran and its allies, including Lebanese Hezbollah. Israel and Iran also appear to be competing for military advantage over each other at the Israel-Lebanon border. Amid uncertainty in the area, in March 2019 President Trump recognized Israel's claim to sovereignty over the Golan Heights, changing long-standing U.S. policy that held\u2014in line with U.N. Security Council Resolution 497 from 1981\u2014the Golan was occupied Syrian territory whose final status was subject to Israel-Syria negotiation.", "The prospects for an Israeli-Palestinian peace process are complicated by many factors. Palestinian leaders cut off high-level political contacts with the Trump Administration after it recognized Jerusalem as Israel's capital in December 2017. U.S.-Palestinian tensions have since worsened amid U.S. cutoffs of funding to the Palestinians and diplomatic moves\u2014including the May 2018 opening of the U.S. embassy to Israel in Jerusalem. Palestinian leaders interpreted these actions as prejudicing their claims to a capital in Jerusalem and to a just resolution of Palestinian refugee claims. Israeli Prime Minister Netanyahu has welcomed these U.S. actions. The Trump Administration has suggested that it will release a proposed peace plan after Israeli elections, which are scheduled for April 9, 2019. Speculation continues about how warming ties between Israel and Arab Gulf states may affect Israeli-Palestinian diplomacy, though Saudi Arabia said that the U.S. policy change on the Golan Heights would negatively affect the peace process. Bouts of tension and violence between Israel and Hamas in Gaza have continued\u2014reportedly accompanied by indirect talks between the two parties that are being brokered by Egypt and aim for a long-term cease-fire.", "Domestically, Israel is preparing for the April 9 elections, which are closely contested. Former top general Benny Gantz is combining with former Finance Minister Yair Lapid to challenge Netanyahu, whom the attorney general has recommended be indicted for corruption in three separate cases. The elections and subsequent government formation process will have significant implications for Israel's future leadership and policies."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction: Major Issues for U.S.-Israel Relations", "paragraphs": ["Strong relations between the United States and Israel have led to bilateral cooperation in many areas. Matters of particular significance include the following: ", "Israel's own capabilities for addressing threats, and its cooperation with the United States. Shared U.S.-Israel concerns about Iran, within the context of the U.S. exit from the 2015 international nuclear agreement, and growing tension involving Iran and Hezbollah at Israel's northern border with Syria and Lebanon. Israeli-Palestinian issues, including those involving Jerusalem, Hamas and the Gaza Strip, funding for Palestinians, and a possible Trump Administration peace plan. Israeli domestic political issues, including probable corruption-related indictments against Prime Minister Binyamin Netanyahu and closely contested elections that are scheduled for April 9, 2019.", "For background information and analysis on these and other topics, including aid, arms sales, and missile defense cooperation, see CRS Report RL33476, Israel: Background and U.S. Relations , by Jim Zanotti; and CRS Report RL33222, U.S. Foreign Aid to Israel , by Jeremy M. Sharp."], "subsections": []}, {"section_title": "How Israel Addresses Threats", "paragraphs": ["Israel relies on a number of strengths to manage potential threats to its security and existence. These strengths include robust military and homeland security capabilities, as well as close cooperation with the United States."], "subsections": [{"section_title": "Military Superiority and Homeland Security Measures", "paragraphs": ["Israel maintains conventional military superiority relative to its neighbors and the Palestinians. Shifts in regional order and evolving asymmetric threats during this decade have led Israel to update its efforts to project military strength, deter attack, and defend its population and borders. Israel appears to have reduced some unconventional threats via missile defense systems, reported cyber defense and warfare capabilities, and other heightened security measures. ", "Israel has a robust homeland security system featuring sophisticated early warning practices and thorough border and airport security controls; most of the country's buildings have reinforced rooms or shelters engineered to withstand explosions. Israel also has proposed and partially constructed a national border fence network of steel barricades (accompanied at various points by watch towers, patrol roads, intelligence centers, and military brigades) designed to minimize militant infiltration, illegal immigration, and smuggling from Egypt, Syria, Lebanon, Jordan, and the Gaza Strip. Additionally, Israeli authorities have built a separation barrier in and around parts of the West Bank."], "subsections": []}, {"section_title": "Undeclared Nuclear Weapons Capability", "paragraphs": ["Israel is not a party to the Nuclear Nonproliferation Treaty (NPT) and maintains a policy of \"nuclear opacity\" or amimut . A 2017 report estimated that Israel possesses a nuclear arsenal of around 80-85 warheads. The United States has countenanced Israel's nuclear ambiguity since 1969, when Israeli Prime Minister Golda Meir and U.S. President Richard Nixon reportedly reached an accord whereby both sides agreed never to acknowledge Israel's nuclear arsenal in public. Israel might have nuclear weapons deployable via aircraft, submarine, and ground-based missiles. No other Middle Eastern country is generally thought to possess nuclear weapons."], "subsections": []}, {"section_title": "U.S. Cooperation", "paragraphs": ["Israeli officials closely consult with U.S. counterparts in an effort to influence U.S. decisionmaking on key regional issues, and U.S. law requires the executive branch to take certain actions to preserve Israel's \"qualitative military edge,\" or QME. Additionally, a 10-year bilateral military aid memorandum of understanding (MOU)\u2014signed in 2016\u2014commits the United States to provide Israel $3.3 billion in Foreign Military Financing and to spend $500 million annually on joint missile defense programs from FY2019 to FY2028, subject to congressional appropriations.", "Israel's leaders and supporters routinely make the case that Israel's security and the broader stability of the region remain critically important for U.S. interests. They also argue that Israel is a valuable U.S. ally. The United States and Israel do not have a mutual defense treaty or agreement that provides formal U.S. security guarantees."], "subsections": []}]}, {"section_title": "Iran and the Region", "paragraphs": ["Iran remains of primary concern to Israeli officials largely because of (1) Iran's antipathy toward Israel, (2) Iran's broad regional influence, and (3) the probability that some constraints on Iran's nuclear program could loosen in the future. In recent years, Israel and Arab Gulf states have discreetly cultivated closer relations with one another in efforts to counter Iran. "], "subsections": [{"section_title": "Iranian Nuclear Agreement and the U.S. Withdrawal", "paragraphs": ["Prime Minister Netanyahu has sought to influence U.S. decisions on the international agreement on Iran's nuclear program (known as the Joint Comprehensive Plan of Action, or JCPOA). He argued against the JCPOA when it was negotiated in 2015\u2014including in a speech to a joint session of Congress\u2014and welcomed President Trump's May 2018 withdrawal of the United States from the JCPOA and accompanying reimposition of U.S. sanctions on Iran's core economic sectors. A few days before President Trump's May announcement, Netanyahu presented information that Israeli intelligence operatives apparently seized in early 2018 from an Iranian archive. He used the information to question Iran's credibility and highlight its potential to parlay existing know-how into nuclear-weapons breakthroughs after the JCPOA expires. In his September 2018 speech before the U.N. General Assembly, Netanyahu claimed that Iran maintains a secret \"atomic warehouse for storing massive amounts of equipment and materiel.\" An unnamed U.S. intelligence official was quoted as saying in response, \"so far as anyone knows, there is nothing in [the facility Netanyahu identified] that would allow Iran to break out of the JCPOA any faster than it otherwise could.\"", "After Netanyahu publicly exposed the Iranian nuclear archive, some former Israeli officials speculated about what action Israel might consider taking against Iranian nuclear facilities if Iran abrogates the JCPOA and expands nuclear activities currently restricted under the agreement. However, Netanyahu had said in an interview that he was not seeking a military confrontation with Iran."], "subsections": []}, {"section_title": "Syria22", "paragraphs": ["Israel and Iran have engaged in hostile action over Iran's presence in Syria. In the early years of the Syria conflict, Israel primarily employed air strikes to prevent Iranian weapons shipments destined for the Iran-backed group Hezbollah in Lebanon. Later, as the Syrian government regained control of large portions of the country with Iranian backing, Israeli leaders began pledging to prevent Iran from constructing and operating bases or advanced weapons manufacturing facilities in Syria. Since 2018, Israeli and Iranian forces have repeatedly targeted one another in and over Syrian- and Israeli-controlled areas. In January 2019, Prime Minister Netanyahu said that Israel had targeted Iranian and Hezbollah targets in Syria \"hundreds of times.\" Limited Israeli strikes to enforce \"redlines\" against Iran-backed forces could expand into wider conflict, particularly if there is a miscalculation by one or both sides. ", "U.S. involvement in Syria could be one factor in Israeli calculations on this issue. The U.S. base at Al Tanf in southern Syria has reportedly \"served as a bulwark against Iran's efforts to create a land route for weapons from Iran to Lebanon.\" Israeli officials favor continued U.S. involvement in Syria, while also preparing for the possibility that they may need to take greater direct responsibility for countering Iran there. "], "subsections": [{"section_title": "Russia", "paragraphs": ["Russia's advanced air defense systems in Syria could make it more difficult for Israel to operate there. Since 2015, Russia has operated an S-400 system at Russia's Khmeimim air base in Lattakia, a city on Syria's Mediterranean coast. To date, however, Russia does not appear to have acted militarily to thwart Israeli air strikes against Iranian or Syrian targets, and Israel and Russia maintain communications aimed at deconflicting their operations. ", "In addition to the S-400 that it owns and operates, Russia delivered an S-300 air defense system for Syria's military to Khmeimim airbase in October 2018. The delivery followed Syria's downing of a Russian military surveillance plane in September 2018 under disputed circumstances, shortly after an Israeli operation in the vicinity. According to an Israeli satellite imagery analysis company, three launchers appeared to be operational as of February 2019. It is unclear to what extent Russia has transferred the S-300 to Syrian military control, and how this might affect future Israeli military action in Syria. An Israeli journalist wrote that \"Israel has the knowledge, experience and equipment to evade the S-300, but the fact that additional batteries, manned by Russian personnel, are on the ground, will necessitate greater care [when carrying out future operations against Iran-aligned targets in Syria].\" Since the September 2018 incident, Israeli air strikes appear to have decreased somewhat."], "subsections": []}, {"section_title": "Golan Heights", "paragraphs": ["On March 25, 2019, President Trump signed a proclamation stating that the United States recognizes the Golan Heights (hereinafter, the Golan) to be part of the State of Israel. The proclamation stated that \"any possible future peace agreement in the region must account for Israel's need to protect itself from Syria and other regional threats\" \u2014presumably including threats from Iran and the Iran-backed Lebanese group Hezbollah. Israel gained control of the Golan from Syria during the 1967 Arab-Israeli war, and effectively annexed it unilaterally by applying Israeli law to the region in 1981 (see Figure 2 ). ", "President Trump's proclamation changed long-standing U.S. policy on the Golan. Since 1967, successive U.S. Administrations supported the general international stance that the Golan is Syrian territory occupied by Israel, with its final status subject to negotiation. In reaction to the U.S. proclamation, others in the international community have insisted that the Golan's status has not changed. In Congress, Senate and House bills introduced in February 2019 ( S. 567 and H.R. 1372 ) support Israeli sovereignty claims to the Golan, and would treat the Golan as part of Israel in any existing or future law \"relating to appropriations or foreign commerce.\"", "For decades after 1967, various Israeli leaders, reportedly including Prime Minister Netanyahu as late as 2011, had entered into indirect talks with Syria aimed at returning some portion of the Golan as part of a lasting peace agreement. However, the effect of civil war on Syria and the surrounding region, including an increase in Iran's presence, may have influenced Netanyahu to shift focus from negotiating with Syria on a \"land for peace\" basis to obtaining international support for Israel's claims of sovereignty. As part of the periodic conflict in Syria between Israel and Iran , some Iranian missiles have targeted Israeli positions in the Golan. ", "The Syrian government has denounced the U.S. policy change as an illegal violation of Syrian sovereignty and territorial integrity, and insisted that Syria is determined to recover the Golan. Additionally, observers have argued that the policy change could unintentionally bolster Syrian President Bashar al Asad within Syria by rallying Syrian nationalistic sentiment in opposition to Israel's claims to the Golan and deflecting attention from Iran's activities inside Syria.", "Since 1974, the U.N. Disengagement Observer Force (UNDOF) has patrolled an area of the Golan Heights between the regions controlled by Israel and Syria, with about 880 troops from five countries stationed there as of January 2019. During that time, Israel's forces in the Golan have not faced serious military resistance to their continued deployment, despite some security threats and diplomatic challenges. Periodic resolutions by the U.N. General Assembly have criticized Israel's occupation as hindering regional peace and Israel's settlement and de facto annexation of the Golan as illegal."], "subsections": []}]}, {"section_title": "Hezbollah in Lebanon", "paragraphs": ["Hezbollah's forces and Israel's military have sporadically clashed near the Lebanese border for decades\u2014with the antagonism at times contained in the border area, and at times escalating into broader conflict. Speculation persists about the potential for wider conflict and its regional implications. Israeli officials have sought to draw attention to Hezbollah's buildup of mostly Iran-supplied weapons\u2014including reported upgrades to the range, precision, and power of its projectiles\u2014and its alleged use of Lebanese civilian areas as strongholds. ", "Ongoing tension between Israel and Iran over Iran's presence in Syria raises questions about the potential for Hezbollah's forces in Lebanon to open another front against Israel. After the September 2018 incident leading to Russia's installation of an S-300 system in Syria (discussed above), Iran reportedly began directly transferring weapons to Hezbollah in Lebanon while reducing Syria's use as a transshipment hub. One Israeli media account warned that Hezbollah's threat to Israel is increasing because of initiatives to build precision-weapons factories in Lebanon and to set up a military infrastructure in southern Syria. In late 2018 and early 2019, Israel's military undertook an effort\u2014dubbed \"Operation Northern Shield\"\u2014to seal six Hezbollah attack tunnels to prevent them from crossing into Israel. Israeli officials claim that they do not want another war, while at the same time taking measures aimed at constraining and deterring Hezbollah, including through consultation with the U.N. Interim Force in Lebanon (UNIFIL). "], "subsections": []}]}, {"section_title": "Israeli-Palestinian Issues", "paragraphs": [], "subsections": [{"section_title": "Recent Complicating Factors", "paragraphs": ["President Trump has expressed interest in brokering a final-status Israeli-Palestinian agreement, and his Administration has supposedly prepared a proposal to facilitate negotiations, but the Administration has repeatedly postponed releasing the proposal. Many factors may account for the delays, including recent U.S. actions regarding Jerusalem, tension in and around the Gaza Strip, reduced funding for the Palestinians, Israeli settlements in the West Bank, and political jockeying and domestic constraints among Israelis and Palestinians.", "The U.S. decision\u2014announced in December 2017\u2014to recognize Jerusalem as Israel's capital and move the U.S. embassy there has fed U.S.-Palestinian tensions. Israeli leaders generally celebrated the change, but Palestine Liberation Organization (PLO) Chairman and Palestinian Authority (PA) President Mahmoud Abbas strongly objected. Many other countries opposed President Trump's actions on Jerusalem, as reflected in action at the United Nations. Claiming U.S. bias favoring Israel, Palestinian leaders broke off high-level political contacts with the United States shortly after the December 2017 announcement and have made efforts to advance Palestinian national claims in international fora. However, the PA continues security coordination with Israel in the West Bank. ", "U.S.-Palestinian tensions appear to have influenced Administration decisions to cut off various types of U.S. funding to the Palestinians, and arguably have dimmed prospects for restarting Israeli-Palestinian talks. In a September 2018 address before the U.N. General Assembly, PLO Chairman/PA President Abbas denounced Administration actions that he characterized as taking disputed Israeli-Palestinian issues\u2014such as Jerusalem's status and Palestinian refugee claims\u2014off the negotiating table. ", "Funding for economic and humanitarian needs in the West Bank and Gaza could become even scarcer. In February 2019, Israel announced that it would withhold a portion of the tax revenue it collects for the PA because\u2014pursuant to a law passed by the Knesset in 2018\u2014Israel had determined that amount represented PLO/PA payments made on behalf of individuals allegedly involved in terrorist acts. In response, Abbas announced that the PA would completely reject monthly revenue transfers from Israel if it withheld any amount, even though the transfers comprise approximately 65% of the PA budget. For February, Israel withheld approximately $11 million from the $193 million due to the PA, with the PA rejecting the entire amount as a result. The PA is reportedly seeking temporary financial support from the private sector and local banks, and also asking the Arab League to follow through on its 2010 decision to provide $100 million per month as a \"financial safety net\" for the PA.", "At the end of January 2019, U.S. bilateral aid to the Palestinians\u2014including nonlethal security assistance that Israel generally supports\u2014ended completely due to the Anti-Terrorism Clarification Act (ATCA, P.L. 115-253 ), which became law on October 3, 2018. Two months after the law's enactment, PA Prime Minister Rami Hamdallah informed Secretary of State Michael Pompeo that the PA would not accept aid that subjected it to federal court jurisdiction. Apparently, U.S. aid will not resume unless Congress amends or repeals the ATCA, or the Administration channels the aid differently."], "subsections": []}, {"section_title": "Diplomatic Prospects and Concerns", "paragraphs": ["Assistant to the President and Senior Advisor Jared Kushner has stated that the Administration will publicly release a peace plan sometime after Israeli national elections, which are set to occur on April 9, 2019. According to Kushner, the peace plan contains detailed proposals on the various issues that divide Israel and the PLO. Many observers express skepticism about the prospect that these proposals can serve as a basis for the serious resumption of bilateral talks, but Kushner has reportedly said that the Administration is focusing on formulating \"realistic solutions,\" and that \"privately, people are more flexible.\" U.S. officials hope to surmount potential obstacles to the peace plan in the Israeli and Palestinian domestic arenas by obtaining political and economic support for the U.S. initiative from key Arab states in the region, including Saudi Arabia, the United Arab Emirates, Jordan, and Egypt. A number of Arab states share common interests in working behind the scenes with Israel to counter Iranian regional influence. ", "While some diplomatic developments have fed speculation about warming Arab-Israeli ties, reports suggest that key Arab Gulf states remain reluctant to embrace more formal relations with Israel without a resolution of the Palestinian issue. Saudi Arabia's press agency responded to the U.S. recognition of Israel's claims to sovereignty in the Golan Heights by saying that it \"will have significant negative effects on the peace process in the Middle East and the security and stability of the region.\" ", "In a statement with implications both for domestic and international audiences, Prime Minister Netanyahu reportedly said that the March 2019 change in U.S. policy on the Golan proves that countries can retain territory captured in a defensive war. His statement prompted speculation over the possibility that Israeli leaders might consider annexing part of the West Bank and whether the situation in the Golan is sufficiently similar to invite comparison. Days before the April elections, Netanyahu asserted that if he were to lead the next government, he would apply Israeli law to West Bank settlements."], "subsections": []}]}, {"section_title": "April 2019 Elections and Other Domestic Issues", "paragraphs": ["The closely contested Israeli national elections\u2014scheduled for April 9, 2019\u2014and the subsequent government formation process will have significant implications for the country's leadership and future policies. Prime Minister Netanyahu faces a challenge from the centrist Blue and White party under the combined leadership of former top general Benny Gantz and former Finance Minister Yair Lapid. Some setbacks for Netanyahu during the campaign have included the attorney general's announcement of probable corruption-related indictments against Netanyahu, new media allegations of possible misconduct relating to Israel's procurement of German submarines, and questions about some individuals or groups possibly spreading rumors against Netanyahu's opponents via social media. Yet, some observers calculate that Netanyahu's Likud could possibly get fewer Knesset seats than Blue and White and still form the next coalition. For more information on the actors involved in the elections, see CRS Insight IN11068, Israel: April 2019 Elections and Probable Indictments Against Prime Minister Netanyahu , by Jim Zanotti and this report's Appendix .", "In July 2018, the Knesset passed a Basic Law defining Israel as the national homeland of the Jewish people. Some observers have expressed concern that the law might further undermine the place of Arabs in Israeli society, while others view its effect as mainly symbolic. In March 2019, Netanyahu said that Israel is a Jewish, democratic state with equal rights for all its citizens, and \"the nation-state not of all its citizens, but only of the Jewish people,\" reviving domestic debate about the 2018 law and perhaps seeking support during the election campaign from sympathetic voter groups."], "subsections": [{"section_title": "Appendix. Major Israeli Political Parties and Their Leaders", "paragraphs": [], "subsections": []}]}]}}
{"id": "R45459", "title": "Federal Crop Insurance: Specialty Crops", "released_date": "2019-01-14T00:00:00", "summary": ["The federal crop insurance program offers subsidized crop insurance policies to farmers. Farmers can purchase policies that pay indemnities when their yields or revenues fall below guaranteed levels. While the majority of federal crop insurance policies cover yield or revenue losses, the program also offers policies with other types of guarantees, such as index policies that trigger an indemnity payment based on weather conditions. The Federal Crop Insurance Corporation (FCIC), a government corporation within the U.S. Department of Agriculture (USDA), pays part of the premium\u2014about 63%, on average\u2014across the federal crop insurance portfolio during crop year 2017, while policy holders\u2014farmers and ranchers\u2014pay the balance. Private insurance companies, known as Approved Insurance Providers (AIPs), deliver the policies in return for administrative and operating subsidies from FCIC. AIPs also share underwriting risk with FCIC through a mutually negotiated Standard Reinsurance Agreement. The USDA Risk Management Agency (RMA) administers the federal crop insurance program.", "The federal crop insurance program primarily covers traditional field crops (such as wheat, corn, and soybeans) that are supported by USDA's revenue-support programs. Unlike these traditional crops, specialty crops\u2014defined in statute as \"fruits and vegetables, tree nuts, dried fruits, and horticulture and nursery crops (including floriculture)\" (7 U.S.C. \u00a71621 note)\u2014have not been a major part of federal crop insurance support. Specialty crops are also generally not eligible for USDA's revenue-support programs. USDA estimates that the statutory definition of specialty crops covers more than 300 agricultural commodities, including fresh and processed fruits and vegetables, tree nuts, nursery plants (trees, shrubs, and flowering plants), herbs, spices, coffee, tea, honey, and maple syrup.", "Legislative changes, coupled with ongoing administrative efforts by USDA, have expanded federal crop insurance coverage for specialty crops, and they now account for a small but growing number of federal crop insurance policies bought by farmers. Among the issues Congress may consider if it seeks to further expand coverage for specialty crops are data collection and price discovery for commodities not sold on exchanges (such as most fruits and vegetables), coverage of quality losses, and the effect of ad hoc payments on the demand for crop insurance.", "Federal crop insurance policies currently cover around 38 specialty crop categories, which include roughly 80 types of fruits, vegetables, tree nuts, and nursery crops. Over the past few decades, total specialty crop insured liabilities rose from nearly $1 billion in 1989 to nearly $18.5 billion in 2017. In 2017, federal crop insurance policies covered about 9 million acres of specialty crops, around 800,000 bee colonies, about 100,000 tons of raisins, and roughly 60,000 fruit and coffee trees. Across all specialty crops, coverage and the premium subsidy paid by the federal government may vary depending on the crop. Moreover, for many specialty crops, crop-specific insurance policies are not available. Currently, about one-half of all U.S. specialty crop acres are covered by federal crop insurance policies. Some specialty crops may be covered under a Whole Farm Revenue Protection (WFRP) insurance policy. WFRP is designed to fill in coverage gaps for producers of uninsured crops that lack individual policy coverage and for producers marketing to local, farm-identity preserved, or direct markets. The average premium subsidy rate for WRFP was about 70% in 2017. Federal crop insurance for specialty crops and WFRP together accounted for about 17% of the entire federal crop insurance portfolio, as measured by liability, during crop year 2017."], "reports": {"section_title": "", "paragraphs": ["T he federal crop insurance program offers subsidized crop insurance policies to farmers. Historically, the federal crop insurance program has covered primarily traditional field crops such as wheat, corn, and soybeans. In contrast, s pecialty crops \u2014covering fruits, vegetables, tree nuts, and nursery crops\u2014have not been a major part of the federal crop insurance program. However, legislative changes, coupled with ongoing administrative efforts by the U.S. Department of Agriculture (USDA), have expanded federal crop insurance coverage for specialty crops, and they now account for a small but growing number of federal crop insurance policies bought by farmers. Over the past few decades, total specialty crop insured liabilities rose from nearly $1 billion in 1989 to nearly $18.5 billion in 2017. Federal crop insurance policies currently cover around 38 specialty crop categories, which include roughly 80 types of fruits, vegetables, tree nuts, and nursery crops. ", "Many specialty crops, however, do not have crop-specific insurance policies. Currently, about one-half of all U.S. specialty crop acres are covered by federal crop insurance policies. Some specialty crops may be covered under a Whole Farm Revenue Protection (WFRP) insurance policy, intended to fill in coverage gaps for producers of uninsured crops that lack individual policy coverage and for producers marketing to local, farm-identity preserved, or direct markets. Despite this expansion, coverage for specialty crops remains below that for traditional crops. Combined, federal crop insurance for specialty crops and WFRP together accounted for about 17% of the entire federal crop insurance portfolio by liability during crop year 2017. ", "This report focuses on how specialty crops are covered under the federal crop insurance program. For detailed background and historical information on the federal crop insurance program as a whole, and on how the federal crop insurance program operates, see CRS Report R45193, Federal Crop Insurance: Program Overview for the 115th Congress . "], "subsections": [{"section_title": "Crop Insurance Program Authority and Operation", "paragraphs": [], "subsections": [{"section_title": "Overview of the Federal Crop Insurance Program", "paragraphs": ["The federal crop insurance program is permanently authorized by the Federal Crop Insurance Act, as amended (7 U.S.C. \u00a71501 et seq .). The USDA's Risk Management Agency (RMA) regulates the program, and the Federal Crop Insurance Corporation (FCIC) funds it.", "Congress first authorized federal crop insurance in an effort to mitigate the effects on farmers of the Great Depression and of the crop losses seen in the Dust Bowl. In 1938, the FCIC was created to carry out the program, which focused on major crops like wheat in leading producing regions. During the same era, farm programs were established to support crop prices and boost farm income for producers of so-called program crops, including wheat, corn, and cotton. ", "The availability of federal crop insurance expanded with the passage of the Federal Crop Insurance Act of 1980 ( P.L. 96-365 ), which brought coverage to many more crops and regions of the country. To increase participation, Congress enhanced the crop insurance program in 1994 by raising subsidy levels and in 2000 by expanding geographic availability and again raising subsidy levels. The changes also expanded the role of the private sector in developing new products that would help farmers manage their risks. Today, many banks, when making operating loans, require that farmers purchase crop insurance. ", "The federal crop insurance program provides farmers with risk management tools to cope with yield and price declines. Under the program, farmers can purchase subsidized policies that pay indemnities when their production or revenue falls below a producer-selected coverage level. Insurance policies are sold and completely serviced through approved private insurance companies. The insurance companies' losses are reinsured by USDA, and their administrative and operating costs are subsidized by the federal government. ", "In purchasing a crop insurance policy, a producer selects a level of coverage (i.e., deductible) and pays a portion of the premium that increases with higher coverage levels (or none of it in the case of catastrophic coverage). The federal government pays the rest of the premium (63%, on average, in 2017). ", "The federal crop insurance program offers two main levels of coverage: Catastrophic Risk Protection (CAT) and buy-up coverage: ", "1. CAT coverage insures against losses in excess of 50% of normal yield, equal to 55% of the estimated market price of the crop (called 50/55 coverage). The premium is 100% subsidized. Producers pay an administrative fee of $655 per crop per county. Limited-resource producers may have this fee waived. CAT coverage is not available on all types of policies. 2. Buy- up coverage allows producers to obtain coverage beyond the catastrophic level and pay a premium that is subsidized by the federal government. Buy-up provides for additional coverage up to 85% of production per acre and 100% of a specified market price established for each crop and region. The premium subsidy for these policies ranges from 38% to 67%. Producers pay an administrative fee of $30 per crop per county.", "The availability of crop insurance for a particular crop in a particular region is an administrative decision made by RMA. The decision is made on a crop-by-crop and county-by-county basis based on farmer demand for coverage and the level of risk associated with the crop in the region, among other factors. In areas where a policy is not available, farmers may request that RMA expand the program to their county. The process usually starts with a pilot program in order for RMA to gain experience and test the program components before it becomes more widely available. Alternatively, a policy can be reviewed and later discontinued if it fails to perform at an acceptable level (e.g., it experiences low participation or high losses). ", "RMA also regularly responds to requests from commodity organizations or industry representatives for enhancements to existing coverage, such as adding revenue coverage. RMA offers pilot programs with various types of coverage for new crops (particularly specialty crops) or that include new geographical areas. It uses the performance of these programs to inform its decision on whether to extend coverage permanently. "], "subsections": []}, {"section_title": "Expansion of Coverage for Specialty Crops", "paragraphs": ["Efforts to expand federal crop insurance coverage to crops that had not traditionally been eligible under the program dates back to the 1990s. The Federal Crop Insurance Reform and Department of Agriculture Reauthorization Act of 1994 ( P.L. 103-354 ) helped initiate efforts to expand federal crop insurance coverage for specialty crop producers. It amended the Federal Crop Insurance Act to require (among other things) additional data collection, reporting to facilitate the development of new crop insurance policies, tracking the progress of newly developed policies, and an expected timetable for expanding crop insurance coverage to include \"new and specialty crops.\" Since then RMA has submitted episodic reports to Congress tracking this progress. The Agriculture Risk Protection Act of 2000 ( P.L. 106-224 ) further emphasized increasing the availability of risk management tools for producers of crops with no individual policy coverage. ", "Previous omnibus farm bills\u2014including the Agricultural Act of 2014 ( P.L. 113-79 , \"2014 farm bill\") and the Food, Conservation, and Energy Act of 2008 ( P.L. 110-246 , \"2008 farm bill\")\u2014also enhanced the federal crop insurance program by expanding its scope and broadening policy coverage for specialty crops, organic agriculture, and crops that are sold directly to local markets. These laws authorized and extended other USDA programs that help facilitate the formulation of crop insurance policies for specialty crop producers, including market data collection programs. ", "The 2008 and 2014 farm bills further expanded provisions governing how RMA administers and implements Section 508(h) of the Federal Crop Insurance Act, which governs new policy development, including how it is contracted out and funded, how policy ratings are undertaken, and how a policy may start as a pilot and may (or may not) evolve to a full-fledged insurance policy. Additional information on the Section 508(h) process is described in \" Development of New Policies and Section 508(h) .\"", "The 2014 farm bill also directed RMA to develop the WFRP insurance policy as part of an effort to provide additional options for crops that lack crop-specific policy coverage. WFRP policies insure revenue of the entire farm, rather than an individual crop, under a single insurance policy that is not limited to specialty crop production. The types of producers eligible for whole farm policies include direct-to-consumer marketers and producers of multiple agricultural commodities, including specialty crops, industrial crops, livestock, and aquaculture products. Coverage is also expanded for the value of packing, packaging, or any other similar on-farm activity. WFRP can be combined with other policies with buy-up coverage. WFRP does not offer CAT-level coverage and cannot be combined with CAT-level policies. WFRP is discussed further in \" Whole Farm Revenue Protection (WFRP) Insurance .\"", "Despite expansion of the federal crop insurance program, coverage for specialty crops remains below that for traditional crops in terms of individual crop policies and covered acres. Often insurers face technical difficulties in developing new policies such as price discovery, non-weather risks, and premium ratings. In some cases, USDA has not pursued policies for particular commodities because producers have expressed concerns that offering insurance could adversely affect the market (i.e., because an insurance policy reduces producer risk, farmers may plant more acreage, which could drive down prices and total crop revenue). This has been a particular concern for vegetable crops and explains in part lower levels of insured vegetable acreage compared with other crops. These and other challenges are discussed later in \" Challenges with Developing Specialty Crop Policies .\""], "subsections": []}]}, {"section_title": "Specialty Crop Insured Coverage and Participation", "paragraphs": [], "subsections": [{"section_title": "Definition of Specialty Crops", "paragraphs": ["In statute, specialty crops refers to \"fruits and vegetables, tree nuts, dried fruits, and horticulture and nursery crops (including floriculture)\" [7 U.S.C. \u00a71621 note]. This definition covers more than 300 individual agricultural commodities. It includes fresh and processed fruits and vegetables, tree nuts, a range of nursery plants (trees, shrubs, and flowering plants), culinary herbs and spices, coffee and tea, and also honey and maple syrup, according to guidelines established by USDA. The statutory definition of specialty crops ties to program eligibility and funding allocations for a number of USDA programs providing marketing and research assistance to eligible producer groups. ", "Unlike many traditional commodity crops, specialty crops are generally not eligible for USDA farm revenue support programs\u2014that is, programs such as the Agricultural Risk Loss Coverage (ARC), Price Loss Coverage (PLC), and Marketing Assistance Loans (MAL) programs. The federal government has historically supported specialty crops indirectly through research and marketing grants. The federal government provides direct assistance to individual specialty crop farmers via federal crop insurance and supplemental disaster assistance."], "subsections": []}, {"section_title": "Overview of Premiums, Product Introductions, and Participation", "paragraphs": ["Legislative changes coupled with USDA administrative efforts have contributed to broader federal crop insurance coverage of fruits, vegetables, tree nuts, and nursery crops over the past few decades. Total liability, or the estimated value of the insured portion of the crop, is a useful measure of program growth. Specialty crop insured liabilities rose from nearly $1 billion in 1989 to nearly $18.5 billion in 2017 ( Figure 1 ), reflecting increased production and participation. In contrast, total liabilities for all federally insured crops and livestock was $106.7 billion in 2017. At $18.5 billion, specialty crops represented about 17% of the federal crop insurance portfolio by liability in 2017 ( Figure 1 ).", " Table 1 provides summary statistics of federal crop insurance coverage for specialty crops for crop years 2015 through 2017. It provides total premium, premium subsidies, producer-paid premium, liabilities, indemnities (claim payments), and the number of policies earning premium. Premium subsidies across all commodities (not shown in the table) totaled $6.4 billion (63% of total premium), whereas premium subsidies for specialty crops totaled $701 million (64% of total specialty crop premium) in crop year 2017. Producer-paid premiums are the difference between total premium and premium subsidies.", "Looking back to 1999, insurance policies then covered 52 specialty crops with planned testing on another nine, according to the Government Accountability Office (GAO). These 61 crops reportedly accounted for a majority of the overall value of specialty crops at that time, but coverage on about 300 additional crops remained unavailable. Coverage expansion for specialty crops continued over the subsequent decade. By 2011, insurance was available for more than 80 specialty crops in counties considered to be major growing areas. Among the crops included were avocados, blueberries, grapes, citrus, onions, pumpkins, and tomatoes. ", "The cumulative new crop insurance product introductions for specialty crops increased from 10 in 2000 to 52 in 2012 ( Figure 2 ). Figure 3 shows the number of specialty crop policies earning premium under the federal crop insurance program from crop years 2000 to 2017. While the number of specialty crop policies shows a general upward trend from 2000 to 2017, the total liability (amount insured) for specialty crops shows a more consistent upward trend during the same time period ( Figure 4 ). A larger increase in liability than in the number of policies could be attributed to several factors, among them more high-value crop policies, increases in commodity prices, farm consolidation, and inflation."], "subsections": []}, {"section_title": "Specialty Crops: Covered and Uncovered Crops", "paragraphs": ["About 9 million acres of specialty crops, approximately 800,000 bee colonies, about 100,000 tons of raisins, and roughly 60,000 fruit and coffee trees were covered by federal crop insurance during crop year 2017. As of 2015, federal crop insurance policies were offered for 38 specialty crop categories ( Table 2 ), which include roughly 80 types of fruits, vegetables, tree nuts, and nursery crops. In 1999, insurance policies covered about 50 types of specialty crops. ", "Crops covered by individual federal crop insurance plans include almonds, apples, avocados, bananas, blueberries, cabbage, chili peppers, various citrus fruits, coffee, cranberries, cucumbers, dry beans, dry peas, figs, fresh market beans, fresh market sweet corn, fresh market tomatoes, grapes, green peas, macadamia nuts, mint, mustard, nursery, olives, onions, papaya, pears, pecans, peppers, pistachios, popcorn, potatoes, processing beans, pumpkins, raisins, policies on stone fruit (cherries, fresh apricots, fresh freestone peaches, fresh nectarines, peaches, plums, processing apricots, processing cling peaches, processing freestone peaches, prunes), strawberries, sweet corn, sweet potatoes, table grapes, tomatoes, other types of fruit and nut trees, and walnuts. Bee colonies are also covered.", "Although the availability of federal crop insurance has been expanding, it is not available for all specialty crops. Crops without insurance for which the USDA's National Agricultural Statistics Service (NASS) reports planted acreage include artichokes, asparagus, blackberries, boysenberries, broccoli, cantaloupes, carrots (fresh and for processing), cauliflower, celery, dates, garlic, guavas, hazelnuts, honeydews, kiwi fruit, lettuce, spinach, squash, tart cherries, and watermelons. In addition, specialty crops for which NASS does not report planted acreage that do not have crop-specific policies include cashews, chives, dates, eggplants, garlic, hazelnuts, leeks, lettuce, melons, most leafy greens, most herbs and spices, some tropical plants, and most root crops. "], "subsections": []}, {"section_title": "Market Penetration", "paragraphs": ["RMA reports that nearly 300 million acres were covered by federal crop insurance policies in crop year 2015. Of those acres, about 8.1 million acres (3%) were specialty crops ( Table 2 ). For the 38 specialty crop categories for which federal crop insurance policies are measured by acreage (as opposed to bee colonies, tons, trees, or plant inventory value), the average participation rate in federal crop insurance was about 76% of eligible acres in crop year 2015. ", " Figure 5 and Figure 6 show these data for selected fruit, tree nut, and vegetable categories. Market penetration often varies widely by crop. For fruits and tree nuts, the share of federally insured acres ranges from less than 1% (strawberries) to more than 80% (citrus and plums/prunes) ( Figure 5 ). For vegetables and melons, insured acres range from 5% of total acres (fresh beans and sweet potatoes) to more than 80% (dry peas, tomatoes) ( Figure 6 ).", "Insured acreage as a share of crop acreage is relatively high (about 70% of total specialty crop area) in major specialty crop states, including California, Florida, and Washington. Acreage participation for pulse crops (e.g., dry peas, dry beans) is high in Minnesota, Montana, North Dakota, and South Dakota. The 2015 FCIC report to Congress on specialty crops contains detailed acreage data by crop and state, along with maps showing crop insurance participation.", " Figure 7 shows liabilities for specialty crops with the highest liabilities for crop year 2017. Figure 8 shows a breakdown of crop insurance premium subsidies and producer-paid premium by specialty crop in crop year 2017. That year, the average premium subsidy amount across all specialty crop policies and WFRP was 64%, about 1 percent higher than the average premium subsidy rate for the entire crop insurance portfolio. "], "subsections": []}, {"section_title": "Whole Farm Revenue Protection (WFRP) Insurance", "paragraphs": ["RMA provides a WFRP policy option to growers insuring 50% to 85% of revenue for all the commodities on a farm under one insurance policy. WFRP benefits farms with specialty or organic commodities that lack individual policy coverage, as well as those farms marketing to local, regional, farm-identity preserved, or direct markets. RMA estimates that 2,700 such policies received premium subsidies in 2017, up from 1,100 policies in 2015 ( Figure 9 ). WFRP premium subsidies totaled about $102 million in 2017, and producer-paid premium amounted to about $42 million, while total liability was estimated at $2.8 billion, up from $1.1 billion in 2015. ", "The 2014 farm bill ( P.L. 113-79 ) required that RMA provide a WFRP policy option to agricultural producers and authorized higher premium subsidy levels for whole-farm policies than for other policy types. The WFRP pilot policy was first offered in 2015. Prior to that, USDA offered similar policies under other names (in particular, Adjusted Gross Revenue or \"AGR\" policies from 1999 to 2002, and AGR and AGR Lite policies from 2003 to 2014). WFRP insures 50% to 85% of revenue for all commodities on a farm under one insurance policy, including (but not limited to) farms with specialty or organic commodities or those marketing to local, regional, farm-identity preserved, specialty, or direct markets. ", "WFRP is available in all counties nationwide\u2014either as a stand-alone policy or in combination with other policies\u2014to farms with up to $10 million in insured revenue at the 85% coverage level and up to $17 million in insured revenue at the 50% coverage level. WFRP does not offer CAT-level coverage (high deductible, 100% premium subsidy) and cannot be combined with CAT-level policies. WFRP premium subsidies range from 55% to 80%, and coverage levels range from 50% to 85%. In crop year 2017, the average premium subsidy for WFRP was 70%, whereas the average premium subsidy across the entire crop insurance portfolio was 63%. That year WFRP policies accounted for 3% of all federal crop insurance liabilities. ", "WFRP requires producers to provide five consecutive years of Schedule F from their federal tax forms on which farm income and expenses are reported to determine their historical revenue guarantee. Some speculate that one of the reasons WFRP participation is not higher is that producers are reluctant to provide tax data. "], "subsections": []}]}, {"section_title": "Select Policy Types Relevant to Specialty Crops", "paragraphs": ["Federal crop insurance policies for specialty crops (and all other crops) are generally either yield-based or revenue-based. For most yield-based policies, a producer can receive an indemnity if there is a yield loss relative to the farmer's \"normal\" (historical) yield. Revenue-based policies protect against crop revenue loss resulting from declines in yield, price, or both. "], "subsections": [{"section_title": "Yield-Based Insurance Policies", "paragraphs": ["There are two types of yield-based insurance policies for specialty crops: (1) Actual Production History (APH) plans and (2) dollar plans. APH policies account for about 70% of specialty crops policies, with the exception of nursery crops, which tend to be mostly covered through dollar plans. Text Bo x 1 shows examples of an APH policy for citrus fruit with a 50% coverage level and a dollar plan for nursery products with a 65% coverage level."], "subsections": [{"section_title": "Actual Production History (APH) Plans", "paragraphs": ["APH policies insure producers against yield losses due to natural causes such as drought, excess precipitation, hail, frost, freeze, fire (if due to natural causes), and insects and disease. An indemnity is not paid if crop loss is caused by insufficient or improper applications of pest or disease control measures. The producer selects the amount of average yield to insure, ranging from 50% to 75% (in some areas up to 85%). The producer also selects the percent of the predicted price to insure, ranging between 55% and 100% of the crop price established annually by RMA. If the harvested crop plus any appraised production is less than the yield insured, the producer is paid an indemnity based on the difference. Indemnities are calculated by multiplying this difference by the insured percentage of the price selected when crop insurance was purchased and by the insured share (coverage level). ", "When purchasing an APH policy, a producer is assigned a \"normal\" crop yield based on the producer's actual production history and a price for the commodity based on estimated market conditions. The producer can then select a percentage of his normal yield to be insured and a percentage of the price he or she wishes to receive when crop losses exceed the selected loss threshold."], "subsections": []}, {"section_title": "Dollar Plans", "paragraphs": ["Dollar plans provide protection against declining value due to damage that causes a yield shortfall. Unlike APH policies, a dollar policy guarantees a dollar amount of coverage and not a level of production, with the amount of insurance based on the cost of growing a crop in a specific area. A loss occurs when the annual crop value is less than the amount of insurance. The maximum dollar amount of insurance is stated on the actuarial document. The insured may select a percentage of the maximum dollar amount equal to CAT or higher coverage levels. ", "The design and implementation of dollar plan policies have been criticized for not insuring actual losses and for covering fraudulent claims. A 1997 USDA Office of the Inspector General audit report on fresh market tomato dollar plans outlined several specific fraud, waste, and abuse concerns. More recently, in December 2017 an RMA-commissioned report on options for improving or replacing dollar plans concluded that the dollar plan as studied (limited area and three crops) \"is not sustainable.\" "], "subsections": []}]}, {"section_title": "Revenue-Based Insurance", "paragraphs": ["Revenue insurance is widely available for major program crops (e.g., wheat, corn, soybeans) and protects growers against losses from low yields, low prices, low quality, or any combination of these events. For specialty crops, designing revenue-based insurance products is challenging. These crops often do not have centralized price discovery mechanism such as a futures exchange for developing price projections prior to planting. They also often lack data on actual harvest-time prices.", "To address these types of data challenges, actual revenue history (ARH) insurance plans have been implemented on a pilot basis for certain specialty crops such as navel oranges and cherries. Rather than insuring historical yields, these pilot policies insure historical revenues using historical prices. This approach assumes that historical prices provide a reasonable estimate of expected future prices. This assumption is deemed viable for perishable crops, such as most fruit and vegetables, but is considered less tenable with storable crops where stock carryover from the previous year can affect current market-year prices. ARH insurance plans have parallels to the APH insurance plans, with the primary difference being that instead of insuring historical yields, the plan insures historical revenues. Text Box 2 shows an example of an ARH policy for California navel oranges. ", "Designed as a catch-all for a variety of crops that may not have individual revenue insurance plans, WFRP policies insure 50%-85% of revenue for all commodities on a farm under one policy. For more information on WFRP, see \" Whole Farm Revenue Protection (WFRP) Insurance .\""], "subsections": []}, {"section_title": "Index-Based Policies", "paragraphs": ["RMA offers a few index-based policies, which trigger claim payments based on a predetermined index that is entirely independent of the individual farm operation (e.g., rainfall level). Indemnities are automatically triggered whenever the index falls below a producer-selected coverage level instead of requiring insureds to file claims. One of those policies covers a specialty crop\u2014the Apiculture Pilot Insurance Program (API), which covers honey production. Text Box 3 provides detailed information on producers' choices under API."], "subsections": []}]}, {"section_title": "Development of New Policies and Section 508(h)", "paragraphs": ["The Federal Crop Insurance Act provides two methods for developing new crop insurance programs, including (1) internal products developed by RMA or under contract and (2) external products submitted through procedures specified in Section 508(h) of the Federal Crop Insurance Act (7 U.S.C. \u00a71508(h)). "], "subsections": [{"section_title": "RMA-Developed Products", "paragraphs": ["Section 522 of the Federal Crop Insurance Act (7 U.S.C. \u00a71522) grants RMA authority to develop new crop insurance policies. This authority was partially removed in 2000 but later reinstated by the 2014 farm bill ( P.L. 113-79 ). Before the enactment of Agricultural Risk Protection Act of 2000 (ARPA, P.L. 106-224 ), products were typically developed internally. ARPA added paragraph (e)(4) to Section 522, which stated, \"on and after October 1, 2000, the Corporation shall not conduct research and development for any new policy for an agricultural commodity offered under this subchapter.\" The 2014 farm bill repealed paragraph (e)(4)."], "subsections": []}, {"section_title": "Private Sector Developed Products", "paragraphs": ["ARPA expanded the role of the private sector, allowing private entities to participate in conducting research and development of new insurance products and features. With the expansion of the contracting and partnering authority, Congress authorized RMA to enter into contracts or to create partnerships for research and development of new and innovative insurance products. Private entities could also submit unsolicited proposals for insurance products to the FCIC Board of Directors for approval. In considering such proposals, the board is to evaluate whether the products (1) are in the best interests of producers, (2) follow sound insurance principles, and (3) are actuarially appropriate. ", "Section 508(h) governs new crop insurance policy development, including how it is contracted out and funded, how policy ratings are undertaken, and how a policy may start as a pilot and may (or may not) evolve to a full-fledged insurance policy. FCIC is authorized to reimburse private entities for research, development, and maintenance costs if they develop insurance programs that are approved by the FCIC board. ", "Private sector individuals may submit to the FCIC board (1) crop insurance policies, (2) provisions of policies, or (3) rates of premium. These submissions are commonly referred to as 508(h) submissions. If a private individual prefers, a concept proposal can be submitted to the board prior to fully developing a 508(h) submission. The board may approve an advance payment for the concept proposal for up to 75% of expected research and development expenses to aid in the development of the 508(h) submission.", "If approved by the board, these insurance products can receive reimbursement for research, development and operating costs, in addition to any approved premium subsidies and reinsurance. Private submitters are eligible to recoup maintenance costs for up to three years after products are offered on the market if they continue to provide support for the products. After three years, the private entity has the choice of turning the product over to RMA, thereby relinquishing all ownership rights in the product, or retaining ownership of the insurance product and continuing to update it in return for a user fee as approved by the board and paid by Approved Insurance Providers who sell the product. "], "subsections": []}, {"section_title": "Pilot Status of New Products", "paragraphs": ["The FCIC board must approve all new products. This process can take up to a year and generally depends on the quality and thoroughness of the submission package presented to the board, as well as the responsiveness of the submitter to issues raised by the board and the reviewers, among other factors. In most cases, an independent external panel of experts reviews a proposed product and assesses its actuarial weakness and suggests product improvements. The revised product is submitted to the FCIC board for approval. Once approved, the product is typically implemented as a pilot program in a limited area to test it for effectiveness while limiting financial exposure. ", "Pilot programs typically operate for four years but may be extended for additional testing if needed. Eventually the FCIC board either converts the pilot to a regular program or terminates it. Under law, RMA is not allowed to conduct pilot programs if insurance against the risk to be covered is generally available in the private sector without governmental support.", "RMA's 2010 Report to Congress describes selected pilot programs that have been developed through the internal procedure and authority, covering quarantine and policies based on actual revenue history (e.g., rather than yields). It also describes a range of private sector initiatives covering pumpkins, apiculture, plantains and bananas, sugarcane, and fresh market beans."], "subsections": []}]}, {"section_title": "Challenges with Developing Specialty Crop Policies", "paragraphs": ["Even though new crop insurance product introductions for specialty crops have been increasing, USDA and the industry continue to face a number of challenges when developing and making available new insurance policies for specialty crops that are not currently covered. Most challenges stem from the basic structure of the specialty crop industry, which is often characterized by relatively small acreages, multiple crop varieties (often targeting niche markets), differences in farming practices (which contribute to greater complexity and cost), quality and price discovery issues, grower interest, non-weather risks, and other coverage limitations. Factors such as these affect the potential marketability, actuarial soundness, and feasibility of an insurance policy. ", "A small market reduces sales incentive for companies selling insurance while contributing to higher per-unit costs for developing the product, training staff, modifying computer programs, and other activities. Small acreage also results in low market volume or the establishment of production contracts between producers and buyers. Crops grown and marketed in smaller quantities and/or targeting niche markets often command a price premium, resulting in often highly variable market prices, further complicating price discovery. Moreover, most specialty crops are intended primarily for sale in the higher-value fresh market versus the typically lower-value crops sold for further processing. Fresh product is highly perishable and non-storable, unlike the field crops that are more widely covered by federal crop insurance policies.", "In general, lack of reliable pricing data for crops not traded on commodity exchanges has been an ongoing challenge for USDA in the federal crop insurance program. RMA's price discovery for specialty crops largely relies on Agricultural Marketing Service, NASS, and other USDA agency data and academic and industry sources. In the absence of a well-developed cash market, such \"thin market\" conditions make it difficult to observe and forecast market prices. For example, in 2015 FCIC cancelled the Dry Bean Revenue Endorsement because USDA did not have sufficient market data from processors to establish a harvest price from which to calculate whether indemnities would be triggered under the endorsement. ", "Setting price guarantees correctly is critical for encouraging participation, the actuarial soundness of the program, and maintaining the overall market dynamics for the crop. If the insurance is priced (rated) too high, producers who tend to have few losses might decide against purchasing insurance, leaving only high-risk farmers in the pool (known as \"adverse selection\"). If the insurance is priced too low, premiums may not cover expected indemnities, potentially inflating the federal cost of the program by providing a greater premium and higher administrative and operating subsidies than was intended. Artificially low premiums might encourage additional crop production, further contributing to weak market prices, thereby adversely affecting financial returns for producers.", "Another challenge for insuring specialty crops is the diversity and multitude of crop varieties and production practices. Compared with field crops, specialty crops tend to have a wider variety of farming practices that depend on the crop variety, adding complexity to the policy and its development cost. For example, a vegetable crop may need to be grown on raised beds, use plastic, or have specific crop rotations. Various marketing claims made for products (such as that they are organic or other production or sustainability claims) can contribute to product complexity. Understanding how these factors affect potential yields is required for determining what practices can be insured and for developing and establishing underwriting standards. Variation across crops and variety within crop types also complicate the loss adjustment process (i.e., assessing the effect of weather on crop production).", "Finally, in some cases, USDA has reportedly not pursued policies for particular commodities because some producers have expressed concerns that offering insurance could adversely affect the market (i.e., because an insurance policy reduces producer risk, farmers may plant more acreage, which could drive down prices and total crop revenue). This has been a particular concern for producers of vegetable crops and explains in part lower levels of insured vegetable crop acreage compared with other crops.", "Producer interest in the availability of a new policy often starts at the local level and is channeled through RMA's regional offices. In general, for a policy to be viable, a crop must have established cultivars, defined farming practices, developed markets, and identified known perils. Significant producer interest (demand for the policy) is also critical. Perhaps more importantly, insurance policies are dependent on the availability of high quality data. High quality data , from an insurance standpoint, refers to data being timely (so that claims can be paid quickly), relevant (so the product offers reliable protection), audited to international reinsurance standards, and available over a sufficiently long time horizon (time series). Data availability and data quality often pose a challenge for crop insurance purposes."], "subsections": []}, {"section_title": "Alternatives to Crop Insurance", "paragraphs": ["USDA offers several programs to help farmers recover financially from natural disasters, including droughts and floods. These programs help to provide assistance to producers of noninsured crops or crops with no current individual policy coverage, including some specialty crops. Other supplemental disaster programs further provide assistance to some specialty crop producers from tree losses and the loss of bee colonies. USDA also provides low-interest emergency loans and land rehabilitation assistance to help farmers return land to production following natural disasters."], "subsections": []}, {"section_title": "Considerations for Congress", "paragraphs": ["Among the issues that may arise if Congress continues to consider the role of the federal crop insurance options for specialty crop producers are:", "Availability of crop-specific policies . Crop-specific policies have not been developed for a number of specialty crops, including artichokes, asparagus, blackberries, boysenberries, broccoli, cantaloupes, carrots (fresh and for processing), cashews, cauliflower, chives, celery, dates, eggplants, garlic, guavas, hazelnuts, honeydews, kiwi fruit, lettuce, spinach, squash, tart cherries, watermelons, most leafy greens, most herbs and spices, some tropical plants, and most root crops. Private submitters proposing to develop new policies must present evidence of marketability to FCIC and RMA. Congress might consider whether there are opportunities for USDA to facilitate market research and publish market data to assist with the development of new policies and spur greater competition among private submitters. Development cost benchmarks . Section 11120 of P.L. 115-334 modifies the definition of reasonable research and development costs related to policies that have been approved by the FCIC board for reimbursement. Costs are to be deemed reasonable if based on (1) for employees or contractors, wage rates equal to not more than two times the Bureau of Labor Statistics hourly wage rates, plus benefits; and (2) other actual documented costs incurred by the applicant. That section also limits the FCIC board's review of user fees. Given that Congress reinstated RMA's authority to develop new products in the 2014 farm bill ( P.L. 113-79 ), Congress might inquire whether costs incurred for RMA-developed policies could provide a benchmark for the reasonableness of private sector requests for reimbursement of development costs. Limited participation in WFRP policies . WFRP is available in every county of every state. Its premium subsidies range from 55% to 80%, and coverage levels range from 50% to 85%. In crop year 2017 the average premium subsidy for WFRP was 70%, whereas the average premium subsidy across the entire crop insurance portfolio was 63%. That year WFRP policies accounted for about 3% of all federal crop insurance liabilities. Some speculate that part of the reason that WFRP participation is not higher is that producers are reluctant to provide tax return data. These policies require producers to provide five consecutive years of Schedule F from their federal tax forms. Given the benefits of risk pooling achieved by insuring a whole farm's revenue and the fraud prevention benefits from requiring tax returns to set historical revenue guarantees, Congress might consider whether there are efficiencies to be gained from incentivizing greater participation in WFRP. Determining a \" market price\" for commodities not sold on exchanges . Lack of reliable pricing data for crops that are not traded on commodity exchanges has been an ongoing challenge for USDA in the federal crop insurance program. RMA's price discovery for specialty crops largely relies on Agricultural Marketing Service, NASS, and other USDA agency data and academic and industry sources. In the absence of a well-developed cash market, such \"thin market\" conditions make it difficult to observe and forecast market prices, which affects RMA's ability to set the appropriate level of price guarantees. Setting price guarantees correctly is critical to the actuarial soundness of the program and for maintaining overall market dynamics for the crop. Increased farm-level price data for commodities not sold on exchanges could also assist producers of those commodities in negotiating contracts and in their financial planning. Congress might consider whether there is a role for the federal government in supporting data collection of farm prices of commodities that are not sold on exchanges. Coverage of quality losses . Many crops are vulnerable to lower prices or to becoming unmarketable due to quality losses. Small markets for specialty crops that are not sold on commodity exchanges may be particularly price-sensitive to variations in quality (e.g., herbs and spices, certain fruits and vegetables, honey). Certain federal crop insurance policies cover some quality losses, but the range of such coverage is limited. Congress might consider (1) whether the current coverage for quality losses is available for all crops that are vulnerable to quality losses, (2) whether loss adjustment procedures for quality losses accurately assess the variations in quality and the effects on marketability and prices, and (3) whether the procedures for assessing quality losses properly balance cost efficiency and fraud prevention. Effect of ad h oc payments on demand for crop insurance . One of the stated policy goals of federal crop insurance has been to reduce the agricultural sector's reliance on supplemental or \"ad hoc\" disaster assistance payments. However, according to the Congressional Budget Office, it is difficult to assess whether this policy goal has been achieved. The 115 th Congress authorized ad hoc disaster assistance, and USDA has separately implemented a \"trade aid\" package, both of which apply to some specialty crops. Given the lower participation levels for certain specialty crop insurance policies as compared to non-specialty crops, Congress might consider whether repeated ad hoc payments in response to adverse events may have an effect on demand for federal crop insurance for crops generally and for specialty crops in particular."], "subsections": []}]}}
{"id": "RS22549", "title": "Older Americans Act: Funding Formulas", "released_date": "2019-03-18T00:00:00", "summary": ["The Older Americans Act (OAA) is the major vehicle for the delivery of social and nutrition services for older persons. The act's statutory funding formulas determine allotments to states and other entities under the following OAA Titles: Title III, Grants for State and Community Programs; Title V, the Community Service Senior Opportunities Act; Title VI, Grants for Older Native Americans; and Title VII, Vulnerable Elder Rights Protection Activities. This report describes the OAA statutory provisions that allocate funds to states and other entities under various titles of the act.", "Title III accounts for 73% of the act's total FY2019 discretionary appropriations ($1.498 billion out of $2.055 billion). States receive separate allotments of funds for the following six programs authorized under Title III: (1) supportive services and senior centers, (2) congregate nutrition services, (3) home-delivered nutrition services, (4) the Nutrition Services Incentive Program (NSIP), (5) disease prevention and health promotion services, and (6) the National Family Caregiver Support Program (NFCSP). Formula grants are allotted from the Administration on Aging (AOA), within the Administration for Community Living (ACL) in the Department of Health and Human Services (HHS), to State Units on Aging (SUAs) in all 50 states, the District of Columbia, Puerto Rico, and the U.S. territories. The states, in turn, award funds to approximately 629 Area Agencies on Aging (AAAs).", "Title V authorizes the Community Service Employment for Older Americans Program (CSEOA). Administered by the Department of Labor (DOL), Title V is OAA's second-largest program and is the only federally subsidized employment program for low-income older persons. Its FY2019 funding of $400 million represents 20% of the act's total discretionary funding. DOL allocates Title V funds for grants to state agencies in all 50 states, the District of Columbia, Puerto Rico, and the U.S. territories, and to national grantees who are typically nonprofit organizations that operate in more than one state. The total Title V state allotment is the sum of its respective state agency grantee allotment and national grantee allotment.", "Title VI authorizes funds for supportive and nutrition services to older Native Americans to promote the delivery of home and community-based supportive services, nutrition services, and family caregiver support. Funds are awarded directly to Indian tribal organizations, Alaskan Native organizations, and nonprofit groups representing Native Hawaiians.", "Title VII authorizes the Long-Term Care (LTC) Ombudsman Program and elder abuse, neglect, and exploitation prevention programs. Most Title VII funding is directed at the LTC Ombudsman Program, the purpose of which is to investigate and resolve complaints of residents of nursing facilities and other long-term care facilities. Funds for LTC ombudsman and elder abuse prevention activities are allotted to all 50 states, the District of Columbia, Puerto Rico, and the U.S. territories.", "The Older Americans Act Reauthorization Act of 2016 (P.L. 114-144) authorizes appropriations for most OAA programs through FY2019. P.L. 114-144 also made changes to the statutory funding formulas for several programs under Title III of the act. Appendix A of the report provides a detailed legislative history of the Title III funding formula changes, including changes under P.L. 114-144, as well as the OAA reauthorizations of 2000 and 2006. Appendix B provides an analysis of the state-based population data for the U.S. population age 60 and older. Appendix C compares FY2016 allotment amounts for states and other entities with actual allotment amounts under the statutory funding formula change in P.L. 114-144 for FY2017 to FY2019 for Title III Parts B, C, and D programs."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["First enacted in 1965, the Older Americans Act (OAA, P.L. 89-73, as amended) is the primary federal vehicle for the delivery of social and nutrition services for older persons. The majority of OAA grant funds are provided to states and other entities based on statutory formulas that exist in the following titles:", "Title III, Grants for State and Community Programs on Aging; Title V, Community Service Employment for Older Americans; Title VI, Grants for Older Native Americans; and Title VII, Vulnerable Elder Rights Protection Activities.", "These formula grants fund programs that assist older Americans with supportive services in their homes; congregate nutrition services (meals served at group sites such as senior centers, community centers, schools, churches, or senior housing complexes); home-delivered nutrition services; family caregiver support; community service employment; the long-term care ombudsman program; and services to prevent the abuse, neglect, and exploitation of older persons. The OAA also supports grants to older Native Americans for nutrition and supportive services. ,", "Since enactment of OAA, Congress has reauthorized and amended the act numerous times. Most recently, the Older Americans Act Reauthorization Act of 2016 ( P.L. 114-144 ) authorized appropriations for OAA programs for FY2017 through FY2019, and made other changes to the act, including changes to four Title III programs that receive funding under statutory formulas. Prior to the 2016 OAA reauthorization, the OAA Amendments of 2006 ( P.L. 109-365 ) reauthorized all programs under the act through FY2011. Although the authorizations of appropriations under the OAA expired at the end of FY2011, Congress continued to appropriate funding for OAA-authorized activities through FY2016.", "For most OAA programs, entities such as states, U.S. territories, and tribal organizations are allotted funding based on a population-based formula factor (e.g., aged 55 and over, aged 60 and over, or aged 70 and over). Some statutory requirements for program funding allocations include a \"hold harmless\" provision, which guarantees that states' or other entities' allotments will remain at a certain fiscal year level or amount, provided sufficient funding in a given year (e.g., FY2000 levels or FY2018 levels less 1%). The following describes the OAA statutory provisions that allocate funds to states and other entities under the various titles of the act."], "subsections": []}, {"section_title": "Title III: Grants for State and Community Programs on Aging", "paragraphs": ["Title III authorizes grants to State Units on Aging (SUAs) and Area Agencies on Aging (AAAs) in all 50 states, the District of Columbia, Puerto Rico, and the U.S. territories to act as advocates on behalf of, and to coordinate programs for, older persons (defined in the law as those aged 60 and older). The Administration on Aging (AOA) within the Administration for Community Living (ACL) in the Department of Health and Human Services (HHS), allocates Title III funds to SUAs. The states, in turn, award funds to more than 600 AAAs, which are designated by states to operate within specified planning and service areas. States must develop an intrastate funding formula for distribution of Title III funding within the state that takes into account the geographical distribution of older individuals in the state as well as the distribution of older individuals with greatest economic and social need (with particular attention to low-income minority older individuals) among specified planning and service areas. The state formula for distribution of Title III funding must be developed in accordance with AOA guidelines and approved by the Assistant Secretary for Aging.", "As the OAA's largest component, discretionary spending under Title III accounts for 73% of the act's total FY2019 appropriations ($1.498 billion out of $2.055 billion). States receive separate allotments of funds for the following six programs authorized under Title III: (1) supportive services and senior centers, (2) congregate nutrition services, (3) home-delivered nutrition services, (4) the Nutrition Services Incentive Program (NSIP), (5) disease prevention and health promotion services, and (6)\u00a0the National Family Caregiver Support Program (NFCSP). States are required to provide a matching share of 15% in order to receive funds for supportive services and congregate and home-delivered nutrition programs. A matching share of 25% is required for the NFCSP; no match is required for NSIP and disease prevention and health promotion services. To determine state allotments, a separate allocation is calculated for each of the six grant programs. The same formula is used to determine state allocations for supportive services and senior centers, congregate nutrition services, home-delivered nutrition services, and disease prevention and health promotion services. The formulas for the NSIP and NFCSP use different factors.", "The funding formula for four of these Title III programs\u2014supportive services and senior centers, the congregate and home-delivered nutrition programs, and disease prevention and health promotion services\u2014has been a major point of contention during the past three OAA reauthorizations of 2000, 2006, and 2016. Appendix A of the report provides a detailed legislative history of the Title III funding formula changes and describes the debate surrounding changes to the Title III funding formula during the OAA reauthorizations of 2000, 2006, and 2016. Appendix B provides an analysis of the state-based population data for the U.S. population age 60 and older for these Title III programs. Appendix C compares FY2016 allotment amounts for states and other entities with actual allotment amounts under the statutory funding formula changes in P.L. 114-144 for FY2017 to FY2019 for Title III Parts B, C1, C2 and D programs."], "subsections": [{"section_title": "Allocation for Supportive Services and Senior Centers, Congregate and Home-Delivered Nutrition Services, and Disease Prevention and Health Promotion", "paragraphs": ["Separate state allotments for (1) supportive services and senior centers, (2) congregate nutrition services, (3) home-delivered nutrition services, and (4) disease prevention and health promotion services are based on a population formula factor that is defined as each state's relative share of the total U.S. population aged 60 years and older. For the purposes of this calculation, the total U.S. population aged 60 and older includes all 50 states, the District of Columbia, Puerto Rico, and the U.S. territories. Population data are from annual population estimates published by the U.S. Census; the reference date for estimates is July 1. There is a two-year time lag between the reference year of the population estimates and the respective appropriation year. For example, FY2019 state allotments are calculated using 2017 estimates of the population aged 60 and older.", "For the purpose of determining state allotments, the law requires that allotments meet two criteria. The first criterion is the \"small state minimum.\" This ensures that all states (including the District of Columbia and Puerto Rico) receive a minimum amount of funds, which is defined as 0.5% (one-half of 1%) of the total grant appropriation for the respective fiscal year. Guam and the U.S. Virgin Islands each are allotted no less than 0.25% (one-quarter of 1%) of the total grant amount, and American Samoa and the Commonwealth of the Northern Mariana Islands are each allotted no less than 0.0625% (one-sixteenth of 1%) of the total grant amount.", "The second criterion is the \"hold harmless\" provision. The OAA Reauthorization Act of 2016 Amendments ( P.L. 114-144 ) reduces state and U.S. territory hold harmless amounts (previously referenced to FY2006 funding levels) by 1% from the previous fiscal year as follows: ", "For FY2017, no state receives less than 99% of the annual amount allotted to the state in FY2016. For FY2018, no state receives less than 99% of the annual amount allotted to the state in FY2017. For FY2019, no state receives less than 99% of the annual amount allotted to the state in FY2018. For FY2020 and each subsequent fiscal year, no state receives less than 100% of the annual amount allotted to the state in FY2019."], "subsections": []}, {"section_title": "Allocation for Nutrition Services Incentive Program", "paragraphs": ["The Nutrition Services Incentives Program (NSIP) provides funds to states, territories, and Indian tribal organizations to purchase food or to cover the costs of food commodities provided by the U.S. Department of Agriculture (USDA) for the congregate and home-delivered nutrition programs. NSIP funds are allotted to states and other entities based on a formula that takes into account each state's share of total meals served by the nutrition services program (both congregate and home-delivered meals) in all states and tribes during the prior year."], "subsections": []}, {"section_title": "Allocation for the National Family Caregiver Support Program", "paragraphs": ["The National Family Caregiver Support Program (NFCSP) provides direct services for caregivers in five core service areas:", "Information about health conditions, resources, and community-based services. Assistance with accessing available services. Individual counseling, support groups, and caregiver training. Respite care services to provide families temporary relief from caregiving responsibilities. Supplemental services on a limited basis that would complement care provided by family and other caregivers (e.g., adult day health care, home care, home modifications, and assistive devices).", "Funds for NFCSP are allotted to states based on each state's relative share of the population aged 70 years and older. States receive a minimum grant amount, which is defined as 0.5% (one-half of 1%) of the total grant appropriation for the respective fiscal year. Guam and the U.S. Virgin Islands are allotted no less than 0.25% (one-quarter of 1%) of the total grant appropriation, and American Samoa and the Commonwealth of the Northern Mariana Islands are allotted no less than 0.0625% (one-sixteenth of 1%) of the total grant appropriation. There is no hold harmless provision in the formula allocation for this grant program."], "subsections": []}]}, {"section_title": "Title V: Community Service Employment for Older Americans", "paragraphs": ["Title V authorizes the Community Service Employment for Older Americans Program (CSEOA). Administered by the Department of Labor (DOL), Title V is OAA's second-largest program and is the only federally subsidized employment program for low-income older persons (defined in the law as those aged 55 and older with incomes up to 125% of the federal poverty guidelines). Its FY2019 funding of $400 million represents 20% of the act's total discretionary funding. There is a 10% nonfederal match requirement for Title V grant activities.", "DOL allocates Title V funds for grants to state agencies in all 50 states, the District of Columbia, Puerto Rico, and the U.S. territories, and to national grantees who are typically nonprofit organizations that operate in more than one state. The total Title V state allotment is the sum of its respective state agency grantee allotment and national grantee allotment for activities in that state. To determine grant allotments for each state, a separate allocation is calculated for each grant type.", "The 2016 OAA reauthorization did not revise the Title V funding formula, but the formula had been an issue for Congress in the past. During the 2006 OAA reauthorization, the original House bill ( H.R. 5293 ) included a provision to update the \"hold harmless\" year in the Title V formula from FY2000 to FY2006; however, the Senate bill ( S. 3570 ) did not include this provision. The compromise bill ( H.R. 6197 ) enacted into law made no changes to the Title V formula. The following describes the Title V formula allocation.", "Before allocation of funds to states, DOL is required to reserve funds as follows:", "up to 1.5% of the total appropriation for Section 502(e) demonstration projects, pilot projects, and evaluation projects; 0.75% of the total appropriation for Guam, the U.S. Virgin Islands, American Samoa, and the Commonwealth of the Northern Mariana Islands; and \"such amount as may be necessary\" for national grants to public or private organizations serving eligible Indians and Pacific Island and Asian Americans.", "After these reservations, the remaining funds are divided into two amounts, one for all state agency grantees and the other for all national grantees. The allocation for these amounts is dependent on program funding. If funds for a given year are equal to their FY2000 level of $440.2 million, then amounts set aside for all state agencies and all national grantees are in proportion to their respective FY2000 levels. If funds for a given year are less than their FY2000 levels, then total amounts for the state and national grantees are reduced proportionately. If funds for a given year exceed the FY2000 level, up to $35 million of the excess is to be distributed as follows: 75% of the excess is to be provided for all state agency grantees and 25% of the excess is to be provided to all national grantees. Any funding amount over $35 million that remains is to be distributed 50/50 to all state agency and national grantees, respectively.", "Once the total funding levels for grants for state agency and national grantees have been determined, the same formula is used to determine the state agency allotment and the national grantee allotment for each state. Each allotment is distributed to states based on a formula that takes into account (1) a state's share of the total U.S. population aged 55 years and older (includes the District of Columbia and Puerto Rico), and (2) the state per capita income relative to other states. The formula favors states with a lower per capita income and a higher proportion of the population aged 55 and older relative to other states. Population data are from the annual population estimates published by the U.S. Census; the reference date for estimates is July 1. Per capita income data are from the Bureau of Economic Analysis (BEA) within the U.S. Department of Commerce (DOC). There is a two-year time lag between the data (reference year of the population estimates and per capita income) and the respective appropriation year.", "For the purpose of determining state allotments to state agency and national grantees, the law requires that allotments meet two criteria. The first criterion is that states (including the District of Columbia and Puerto Rico) are to receive at least a minimum grant allotment, which is defined as 0.5% (one-half of 1%) of the respective grant amount for the given fiscal year. The second criterion is the \"hold harmless\" provision. If grant amounts for a given year are equal to, or less than, their FY2000 level, states are to receive an allotment in proportion to their respective FY2000 levels. If grant amounts exceed their FY2000 levels, states are to receive no less than their FY2000 level plus a \"guaranteed growth\" of at least 30% of the percentage increase above the FY2000 level."], "subsections": []}, {"section_title": "Title VI: Grants for Older Native Americans", "paragraphs": ["Title VI authorizes funds for supportive and nutrition services to older Native Americans to promote the delivery of home and community-based supportive services, nutrition services, and family caregiver support. Funds are awarded directly to Indian tribal organizations, Alaskan Native organizations, and nonprofit groups representing Native Hawaiians. To be eligible for funding, a tribal organization must represent at least 50 Native American elders aged 60 or older. In FY2017, grants were awarded to 270 tribal organizations representing 400 Indian tribes, including one organization serving Native Hawaiian elders. FY2019 funding for supportive and nutrition services grants is $34.2 million, while FY2019 funding for the Native American caregiver program is $10.1 million. There is no requirement for tribal organizations to match these grant funds.", "Separate formula grant awards are made for (1) nutrition and supportive services and (2) family caregiver support services. Formula grants for services to older Native Americans are allocated to tribal and other representing organizations based on their share of the American Indian, Alaskan Native, and Native Hawaiian population aged 60 and over in their services area. Tribal organization allotments must meet a FY1991 \"hold harmless\" provision. If funds for a given year exceed the FY1991 amount, then the grant amount is either (1) increased to equal or approximate the amount the organization received in 1980 or (2) determined based on what the Assistant Secretary considers sufficient if the tribal organization did not receive a grant for either FY1980 or FY1991. For Native Hawaiian programs, formula allotments for services to representing organizations are only required to meet a FY1991 \"hold harmless\" provision."], "subsections": []}, {"section_title": "Title VII: Vulnerable Elder Rights Protection Activities", "paragraphs": ["Title VII authorizes the Long-Term Care (LTC) Ombudsman Program and elder abuse, neglect, and exploitation prevention programs. Most Title VII funding is directed at the LTC Ombudsman Program, the purpose of which is to investigate and resolve complaints of residents of nursing facilities and other long-term care facilities. For FY2019, funding for the LTC Ombudsman and Elder Abuse, Neglect, and Exploitation Prevention Programs totals $21.7 million. There is no requirement for states to match these grant funds.", "Funds for LTC ombudsman and elder abuse prevention activities are allotted to states based on each state's relative share of the population aged 60 years and older. For the purpose of determining state allotments, the law requires that states (including the District of Columbia and Puerto Rico) receive a minimum amount of funds, which is defined as 0.5% (one-half of 1%) of the total grant appropriation for the respective fiscal year. Guam and the U.S. Virgin Islands are allotted no less than 0.25% (one-quarter of 1%) of the total grant appropriation, and American Samoa and the Commonwealth of the Northern Mariana Islands are allotted no less than 0.0625% (one-sixteenth of 1%) of the total grant appropriation.", "State allotments must also meet a FY2000 \"hold harmless\" provision. SUAs may award funds for these activities to a variety of organizations for administration, including other state agencies, AAAs, county governments, nonprofit service providers, and volunteer organizations.", "Appendix A. Legislative History of OAA Title III Funding Formula", "When the OAA was enacted in 1965, Title III funds were allocated to states based on their relative share of the population aged 65 and over. The law also set certain minimum grant amounts for states and territories. For states, the minimum allotment was 1% of total funds appropriated, and for the U.S. Virgin Islands, Guam, and American Samoa, the minimum allotment was 0.5% (one-half of 1%) of funds appropriated. These provisions remained in effect until 1973. ", "The first significant change to the OAA Title III funding formula occurred under the 1973 amendments to the act, which based the formula on the states' relative share of the population aged 60 and over, rather than, as under prior law, aged 65 and over. The 1973 amendments also changed the minimum allotments states and territories were to receive, as follows: states were to receive no less than 0.5% of the total appropriation; and Guam, American Samoa, the U.S. Virgin Islands, and the Trust Territories of the Pacific Islands were to receive no less than 0.25% (one-fourth of 1%) of total funds. In addition, the 1973 amendments specified that states were to receive no less than they received in FY1973 (the hold harmless amount).", "These provisions remained in effect until the 1978 amendments, which changed the minimum amounts for American Samoa to one-sixteenth of 1% of the appropriation, and added a minimum funding amount for the Northern Marianas (also one-sixteenth of 1%). The 1978 amendments also changed the year for the hold harmless amount. The law stipulated that for fiscal years after 1978, states were to receive no less than they received in FY1978, rather than, as in prior law, FY1973. Successive amendments subsequently changed the hold harmless year. Amendments in 1984 required that for fiscal years after FY1984, states be allotted no less than they received for services in FY1984. There were no changes to the formula provisions under the 1987 amendments. The 1992 amendments moved the hold harmless reference year to FY1987. No further changes were made to these funding formulas until the 2000 amendments.", "The OAA Amendments of 2000 and 2006", "The Title III funding formula for supportive services and senior centers, the congregate and home-delivered nutrition programs, and disease prevention and health promotion services has been a point of controversy in recent congressional attempts to reauthorize the Older Americans Act. Initially, Congress was concerned that the method AOA used to distribute Title III funds was inconsistent with statutory requirements, thereby negatively affecting states experiencing faster growth in their older population. However, more recently, congressional debate has focused on whether or not the statutory formula itself accurately reflects trends in the aging of the U.S. population. The following provides a brief overview of the debate and legislative changes to the Title III funding formula in the OAA reauthorizations of 2000 and 2006.", "After unsuccessful attempts in the 104 th and 105 th Congresses to reauthorize the OAA, the 106 th Congress approved the Older Americans Act Amendments of 2000 ( P.L. 106-501 ). The Title III funding formula was a controversial issue during the six years of congressional debate on the 2000 OAA reauthorization. Prior to the reauthorization, a 1994 U.S. General Accounting Office (now the Government Accountability Office, or GAO) report found that the method AOA used did not distribute funds among states proportionately to their older population to the maximum extent possible. Instead, AOA allotted funds to states, first according to an amount equal to their FY1987 \"hold harmless\" allocation, with the remainder of the appropriations allotted to states based on their relative share of the population aged 60 and over. This methodology negatively affected states with faster-growing older populations, since the majority of funds were being distributed according to population estimates that did not reflect the most recent trends. The GAO report recommended that AOA revise its methodology for distributing funds to states.", "In response to these concerns, the 2000 OAA reauthorization resulted in the following changes to the law: (1) Congress clarified the law to ensure that, first, funds were allotted to states based on the most recent population data; (2) Congress created an FY2000 \"hold harmless\" requirement, thereby ensuring that no state would receive less than it received in FY2000; and (3) Congress created the \"guaranteed growth\" provision, ensuring that all states would receive a share of any appropriations increase over the FY2000 level.", "The Title III funding formula also became a major point of contention during the 2006 OAA reauthorization debate. Congress revisited the FY2000 \"hold harmless\" requirement and \"guaranteed growth\" provision. At the time, the \"hold harmless\" requirement ensured that, provided sufficient funds, every state and U.S. territory received at least its FY2000 amount. The \"guaranteed growth\" provision guaranteed that all states received a certain share of any increase above the FY2000 appropriation. These issues divided Members from states with relatively faster-growing older populations from lawmakers representing states with relatively slower growth in their older populations. High-growth states argued that the \"hold harmless\" provisions in current law provided protections to states whose populations were not increasing as quickly as others', resulting in an inequitable distribution of funds that disadvantaged high-growth states.", "The OAA 2006 Amendments ultimately resulted in changes to the law as follows: (1) Congress changed the formula to ensure that, provided sufficient funds, every state receives at least its FY2006 amount (creating a new fiscal year \"hold harmless\" amount); and (2) Congress phased out the \"guaranteed growth\" provision, reducing the share of any increase in appropriations from 20% to 0 by 5 percentage points annually beginning in FY2008. For FY2007 through FY2010, the guaranteed growth provisions were as follows:", "20% of the percentage increase in appropriations from FY2006 to FY2007; 15% of the percentage increase in appropriations from FY2006 to FY2008; 10% of the percentage increase in appropriations from FY2006 to FY2009; and 5% of the percentage increase in appropriations from FY2006 to FY2010.", "Under current law, for FY2011 and any succeeding fiscal years, the formula does not include the guaranteed growth provision.", "The OAA Reauthorization of 2016", "The Title III funding formula for supportive services and senior centers, the congregate and home-delivered nutrition programs, and disease prevention and health promotion services continued to be a major point of contention during the 2016 OAA reauthorization debate, which spanned multiple Congresses. Congress again revisited the issue of how much state population growth should influence state funding allocations versus retaining continuity in funding allocations for slower-growth states. In the 113 th Congress, comprehensive OAA reauthorization legislation was introduced in the Senate ( S. 1028 and S. 1562 ) which would have extended the authorizations of appropriations through FY2018 for most OAA programs and would have made various amendments to existing OAA authorities. The Senate HELP Committee ordered S. 1562 reported favorably with an amendment in the nature of a substitute. In the House of Representatives, two OAA reauthorization bills were introduced ( H.R. 3850 and H.R. 4122 ). These bills were referred to the Committee on Education and the Workforce, but saw no further legislative action.", "Prior to legislative consideration, the topic of OAA statutory funding formulas was again examined by GAO in an analysis of the OAA Title III and VII statutory funding formulas that focused on formula modifications that would capture state differences with respect to need by including factors that measure the needs of the elderly population, costs of services in addressing those needs, and the capacity of states to finance needed services. GAO found that the current formulas could better meet generally accepted equity standards in targeting OAA services to those with \"greatest economic need\" and \"greatest social need.\" For example, GAO found that the need for OAA services can be estimated using data on older individuals' functional limitations. GAO also noted that while revisions to the OAA statutory formula may pose challenges, options to ease the transition such as phasing in implementation over several years and/or instituting funding floors or ceilings may be further provisions for policymakers to consider in any statutory revisions.", "In the 113 th Congress, S. 1562 did not contain provisions that would amend OAA statutory funding formulas. However, during the Senate HELP Committee consideration of the OAA reauthorization bill, Senator Richard Burr introduced an amendment that would have removed the Title III Part B (supportive services and senior centers), Part C (nutrition services), and Part D (disease prevention and health promotion services) FY2006 hold harmless provision, which was rejected. Senator Tom Harkin, then chairman, stated there would be additional examination of the OAA funding formula by a Senate bipartisan workgroup with a possible solution prior to Senate floor consideration. The bill was subsequently reported out of committee and placed on the Senate Legislative Calendar, but did not receive consideration by the Senate. The bill saw no further action in the Senate.", "In the 114th Congress, the Older Americans Act Reauthorization Act of 2015 ( S. 192 ) was introduced on January 20, 2015. The bill authorized appropriations for most OAA programs for a three-year period from FY2016 to FY2018. It also made various amendments to existing OAA authorities, including changes to the statutory funding formula for the supportive services and senior centers, congregate nutrition, home-delivered nutrition, and disease prevention and health promotion services under Title III of the act, which lessens the effect of the hold harmless provision over time. The Senate HELP Committee ordered S. 192 reported favorably, and it subsequently passed the Senate on July 16, 2015. The House took up S. 192 on March 21, 2016, and passed the bill with an amendment authorizing appropriations for the three-year period from FY2017 to FY2019. S. 192 , as amended by the House, did not substantively change the hold harmless provision under S. 192 , as passed by the Senate. Rather, it amended the effective dates for the hold harmless reduction, from FY2016 through FY2018 to FY2017 through FY2019. It froze this reduction in place for FY2020 and future fiscal years, unless or until such language is amended. The Senate passed S. 192 as amended by the House on April 7, 2016. President Barack Obama signed P.L. 114-144 , the Older Americans Act Reauthorization Act of 2016, on April 19, 2016.", "Specifically, P.L. 114-144 changed the statutory funding allocations for OAA Title III, Parts B, C, and D. This provision retained the same state and U.S. territory minimum amounts allotted under current law and the same population-based formula factor (aged 60 and over), but reduced state and U.S. territory hold harmless amounts (currently referenced to FY2006 funding levels) by 1% from the previous fiscal year. The law lessens the effect of the FY2006 hold harmless provision by reducing state and U.S. territory hold harmless amounts by 1% for each of three years, and then freezes this reduction in place for FY2020 and future fiscal years, unless or until such language is amended. Effectively, for those states that receive an annual program allotment based on their FY2006 hold harmless amount, the policy change minimizes any reduction in funding to no more than 1% from the previous fiscal year, assuming a program's total funding level in fiscal years 2017 to 2019 is at or above the previous fiscal year's level.", "Appendix B. Population Trends", " Table B-1 shows the population aged 60 and older by state or U.S. territory and the proportion of the entity's population aged 60 and older relative to the total U.S. population aged 60 and over for selected years. U.S. Census data shown are for the 2000 and 2010 Decennial Censuses, as well as the 2017 Intercensal state population estimates, which is the most recent year for which data are available. There is a two-year time lag between the reference year of the population estimates and the respective appropriation year. For example, FY2019 state allotments are calculated using 2017 estimates of the population aged 60 and older. The column labeled \"% Age 60+\" is the entities' relative share of the 60+ population, which functions as its population-based formula factor used to determine state allotments under OAA Title III, Parts B, C, and D and Title VII.", "The final column of Table B-1 calculates the percentage point change in the population formula factor for each state and U.S. territory from 2000 to 2017. Among all 56 states and U.S. territories (which includes the District of Columbia and Puerto Rico), 29 entities saw a proportionate increase in the population formula factor from 2000 to 2017, while 27 saw a decrease over this time period. The top five states that experienced the greatest proportionate increase were Texas (+0.93%), California (+0.56%), Georgia (+0.47%), North Carolina (+0.37%), and Arizona (+0.37%). The bottom five states that experienced the greatest decline were Pennsylvania (-0.85%), New York (-0.79%), Ohio (-0.44%), Illinois (-0.42%), and New Jersey (-0.35%).", "Appendix C. The Older Americans Act Reauthorization Act of 2016 ( P.L. 114-144 ): Analysis of Formula Change", "The following analysis compares FY2016 allotment amounts for states and other entities with actual allotment amounts under the statutory funding formula change in P.L. 114-144 for FY2017 to FY2019. The following tables provide results by program: ", "Table C-1 : Title III, Part B, supportive services and senior centers; Table C-2 : Title III, Part C, subpart 1, congregate nutrition services; Table C-3 : Title III, Part C, subpart 2, home-delivered nutrition services; and Table C-4 : Title III, Part D, disease prevention and health promotion services programs. ", "Each table compares FY2016 state and U.S. territory allotments prior to the statutory funding formula change under P.L. 114-144 to allotments with the change, for FY2017 through FY2019. The columns in each table provide two types of analyses for each year. The first is the percentage change between the entities' FY2016 allotment and the entities' annual allotment for each year, respectively. The second is the entities' allotment type for each year of the change, where \"M\" refers to an entity that receives a minimum allotment amount; \"HH\" refers to an entity that receives an allotment amount based on 99% of the previous fiscal year's hold harmless funding amount; and \"P\" refers to an entity that receives an allotment amount based on the entities' population formula factor.", "For programs where the current law hold harmless is in effect (i.e., some states and territories receive an allotment based on their hold harmless), the change to the statutory funding formula, often also combined with increases in appropriated funding amounts, reduces the effect of the hold harmless over time. For example, 16 states and territories received an allotment based on their FY2006 hold harmless level for the congregate nutrition services program. Under the statutory funding formula change, the number of states and territories that received an allotment based on the hold harmless (99% of the previous fiscal year) remained at 16 in FY2017 with a 0.2% increase in the total allotment amount from the prior year. That number fell to 4 in FY2018 when combined with a 10% increase in the total allotment amount compared to the prior year and remained at 4 in FY2018. ", "As a state or territory's hold harmless amount is reduced gradually by 1% from the previous year's hold harmless over three fiscal years, additional states and territories received funding based on their hold harmless amount. Effectively, the change to the statutory funding formula, especially when combined with increases in appropriated funding amounts, allows funding freed up from the hold harmless reductions to be redistributed to states and territories based on the population formula factor. Thus, more states and territories received funding based on their population aged 60 and over.", "Under the supportive services and senior centers and disease prevention and health promotion services programs all states and territories received funding in FY2016 based on a proportionate reduction to their FY2006 hold harmless amount. Total FY2016 funding for these programs was below FY2006 funding levels. The statutory funding formula change combined with program funding increases reduced the number of entities receiving an allotment based on their hold harmless from FY2017 to FY2018 (for supportive services, 29 states in FY2017, to 10 in FY2018; and for disease prevention, 28 states in FY2017, to 0 in FY2018). From FY2018 to FY2019, appropriated amounts for these programs did not change and the number of entities receiving an allotment based on their hold harmless increased slightly\u2014to 12 entities for the supportive services program and 9 entities for disease prevention.", "For programs where the previous FY2006 hold harmless was not in effect, such as home-delivered nutrition services, the funding formula change had a smaller effect compared to prior law. Two states and territories receive funding for FY2017 based on their hold harmless amount. For FY2018 and FY2019 all states receiving funding based on either their population age 60 and older or the minimum grant amount. In general, the statutory funding formula change did not affect entities receiving an allotment based on the minimum grant amount as P.L. 114-144 made no change to this provision."], "subsections": []}]}}
{"id": "R42875", "title": "FHA Single-Family Mortgage Insurance: Financial Status of the Mutual Mortgage Insurance Fund (MMI Fund)", "released_date": "2019-03-04T00:00:00", "summary": ["The Federal Housing Administration (FHA) insures private lenders against losses on home mortgages that meet certain eligibility criteria. If the mortgage borrower defaults (that is, does not repay the mortgage as promised) and the home goes to foreclosure, FHA pays the lender the remaining principal amount owed. By insuring lenders against the possibility of borrower default, FHA is intended to expand access to mortgage credit to some households who might not otherwise be able to obtain affordable mortgages, such as those with small down payments.", "When an FHA-insured mortgage goes to foreclosure, the lender files a claim with FHA for the remaining amount owed on the mortgage. Claims on FHA-insured home mortgages are paid out of the Mutual Mortgage Insurance Fund (MMI Fund), which is funded through fees paid by borrowers (called premiums), rather than through appropriations. However, like all federal credit programs covered by the Federal Credit Reform Act of 1990, FHA can draw on permanent and indefinite budget authority with the U.S. Treasury to cover unanticipated increases in the cost of the loans that it insures, if necessary, without additional congressional action.", "Each year, as part of the annual budget process, the expected costs of mortgages insured in past years are re-estimated to take into account updated information on loan performance and economic assumptions. If the anticipated costs of insured mortgages have increased, then FHA must transfer funds from a secondary reserve account into its primary reserve account to cover the amount of the increase in the anticipated cost of insured loans. If there are not enough funds in the secondary reserve account, then the MMI Fund is required to take funds from Treasury using its permanent and indefinite budget authority in order to make the required transfer.", "Separately from the budget re-estimates, FHA is required by law to obtain an independent actuarial review of the MMI Fund each year. This review provides a view of the MMI Fund's financial status by estimating the MMI Fund's economic value\u2014that is, the amount of funds that the MMI Fund currently has on hand plus the net present value of all of the expected future cash flows on the mortgages that are currently insured under the MMI Fund. The actuarial review is used to determine whether the MMI Fund is in compliance with a statutory requirement to maintain a capital ratio of at least 2%. The capital ratio is the economic value of the MMI Fund divided by the total dollar amount of mortgages insured under the MMI Fund.", "In the years following the housing and mortgage market turmoil that began around 2007, increased foreclosure rates, as well as economic factors such as falling house prices, contributed to increases in expected losses on FHA-insured loans. This put pressure on the MMI Fund and reduced the amount of resources that FHA had available to pay for additional, unexpected future losses. The capital ratio fell below 2% in FY2009 and remained below 2% for several years thereafter, turning negative in FY2012 and FY2013. Concerns about FHA's finances culminated at the end of FY2013, when FHA announced that it would need $1.7 billion from Treasury to cover an increase in anticipated costs of insured loans. This marked the first time that FHA needed funds from Treasury to make the required transfer of funds between the primary and secondary reserve accounts.", "More recently, the financial position of the MMI Fund has improved. The capital ratio again exceeded the 2% threshold in FY2015 and has remained above 2% in the years since. The FY2018 actuarial review of the MMI Fund estimated the economic value of the MMI Fund to be positive $34.9 billion and the capital ratio to be 2.76%. This suggests that the MMI Fund would have about $34.9 billion remaining after realizing all of its expected future cash flows on currently insured mortgages. The FY2018 results represent an increase from FY2017, when the capital ratio was estimated to be 2.18% and the economic value was estimated to be $26.7 billion."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Federal Housing Administration (FHA) was established by the National Housing Act of 1934 and became part of th e Department of Housing and Urban Development (HUD) in 1965. It insures private lenders against losses on certain home mortgages. If the borrower does not repay the mortgage and the home goes to foreclosure, FHA pays the lender the remaining amount that the borrower owes (that is, it pays a claim to the lender). FHA charges borrowers fees, called premiums, in exchange for the insurance.", "FHA insurance is intended to encourage lenders to offer mortgages to some borrowers who otherwise might be unable to access mortgage credit at affordable interest rates or at all. For example, FHA requires a smaller down payment than many other types of mortgages, potentially making it easier for lower-wealth borrowers, first-time homebuyers, or others for whom a large down payment may present a barrier to homeownership to obtain a mortgage. To qualify for FHA insurance, both the borrower and the mortgage must meet certain criteria. For example, the principal balance of the mortgage must be under a certain dollar threshold. Lenders that originate FHA-insured mortgages must be approved by FHA.", "This report describes certain measures of the financial health of the FHA insurance fund for home mortgages, the Mutual Mortgage Insurance Fund. The discussion in this report assumes a certain degree of familiarity with FHA-insured mortgages. For more information on the basic features of FHA-insured mortgages and FHA's role in the mortgage market, see CRS Report RS20530, FHA-Insured Home Loans: An Overview . "], "subsections": []}, {"section_title": "The Mutual Mortgage Insurance Fund", "paragraphs": ["Most single-family mortgages insured by FHA are financed through an insurance fund called the Mutual Mortgage Insurance Fund (MMI Fund). Since FY2009, the MMI Fund has included FHA-insured reverse mortgages as well as traditional \"forward\" home mortgages. Much of the discussion in this report focuses only on traditional forward mortgages, rather than reverse mortgages. However, certain specified sections discuss both forward and reverse mortgages. ", "Money flows into the MMI Fund primarily from the mortgage insurance premiums paid by borrowers and from sales of foreclosed properties, and money flows out of the MMI Fund primarily from claims paid to lenders when FHA-insured mortgages default. The MMI Fund is intended to be self-supporting. It is meant to pay for costs related to insured loans (such as insurance claims paid to lenders) with money it earns on those loans (such as through premiums paid by borrowers), not through appropriations. ", "The MMI Fund is also required to maintain a capital ratio of 2% to help pay for any unexpected increases in losses on its insured mortgages, beyond the losses that it currently anticipates. (Capital in this context is defined as the assets that the MMI Fund currently has on hand, plus the net present value of future cash flows associated with the mortgages that it currently insures. The capital ratio is the ratio of capital to the total dollar amount of mortgages insured under the MMI Fund.) As will be discussed in more detail later in this report, the MMI Fund, like all federal loan and loan guarantee programs subject to the Federal Credit Reform Act of 1990, has permanent and indefinite budget authority to receive funds from the Department of the Treasury to cover increases in the costs of loan guarantees made in prior years.", "FHA faces an inherent tension between facilitating the provision of mortgage credit to underserved borrowers and safeguarding the health of the MMI Fund. In the years following the housing and mortgage market turmoil that began around 2007, rising mortgage default rates and falling home prices put pressure on the MMI Fund. This resulted in the capital ratio falling below the required 2% threshold in FY2009 and then turning negative for a period of time. The capital ratio became positive again in FY2014 and regained the 2% threshold in FY2015. ", "The capital ratio falling below 2%, and then turning negative, raised concerns that the MMI Fund would not have enough money to cover all of its expected future losses on the loans that it was currently insuring. At the end of FY2013, the MMI Fund received $1.7 billion from Treasury using its permanent and indefinite budget authority to ensure that it was holding enough funds to cover expected future losses on insured loans. This represented the first time that the MMI Fund ever had to draw on its permanent and indefinite budget authority with Treasury for this purpose. The MMI Fund has not needed to draw such funds from Treasury in subsequent years.", "Congress has expressed ongoing interest in the MMI Fund's financial status and its prospects for needing additional funds to pay for future losses on its insured loans. This report focuses on the financial position of the MMI Fund. It begins with a brief overview of some of the major factors that affect the MMI Fund's financial soundness. The remainder of the report focuses on (1) how the MMI Fund is accounted for in the federal budget and (2) the results of annual independent actuarial reviews that are mandated by Congress. The budgetary treatment of FHA-insured mortgages and the actuarial review are two different processes, but both examine how the loans insured under the MMI Fund have performed and are expected to perform in the future and the effect of this loan performance on the financial position of the MMI Fund. The annual actuarial review is the basis for determining the capital ratio. However, it is the annual budget process that determines whether or not the MMI Fund requires assistance from Treasury. "], "subsections": []}, {"section_title": "Major Factors Affecting the Stability of the MMI Fund", "paragraphs": ["This section briefly describes some of the major factors that can affect the MMI Fund's financial position. These factors include default and foreclosure rates on FHA-insured loans and the average loss to FHA when a loan goes to foreclosure, the amount of the premiums charged by FHA, the volume of loans that FHA insures, and current and future economic conditions."], "subsections": [{"section_title": "Foreclosures and Associated Loss Severities", "paragraphs": ["Traditionally, when an FHA-insured mortgage goes to foreclosure, FHA pays the lender the remaining amount that the borrower owes on the mortgage and takes ownership of the property. The payment to the lender is called a claim . The loss to FHA is the claim amount paid plus any other foreclosure-related expenses (such as the cost of maintaining the foreclosed property), minus any amount that FHA can recoup by selling the foreclosed home. FHA's total losses related to defaults and foreclosures can depend on, among other factors, (1) the number of delinquencies, defaults, and foreclosures on FHA-insured loans; (2) the success of efforts to help borrowers avoid foreclosure on FHA-insured loans or to minimize the costs to FHA associated with a foreclosure; and (3) how much FHA can recoup by reselling foreclosed homes. "], "subsections": [{"section_title": "Number of Mortgage Delinquencies and Foreclosures", "paragraphs": ["The number of FHA-insured mortgages that become delinquent on mortgage payments impacts FHA's financial status because higher numbers of delinquencies are likely to translate into higher numbers of foreclosures and more claims paid out by FHA. Not all delinquent or defaulted mortgages will necessarily result in completed foreclosures, but higher delinquency and default rates are more likely to lead to higher foreclosure rates. ", "During turmoil in the housing and mortgage markets starting around 2007, delinquency and foreclosure rates on all types of mortgages, including FHA-insured mortgages, increased, with FHA \"serious delinquency\" rates peaking in early 2012 at nearly 10%. (Seriously delinquent loans are generally defined as loans that are 90 or more days past due, in the foreclosure process, or in bankruptcy.) This increase in distressed mortgages put pressure on the MMI Fund. More recently, delinquency rates on FHA-insured mortgages have generally improved. As of December 2018, FHA reported that about 4% of its insured loans were seriously delinquent.", "A number of factors contributed to elevated delinquency and default rates on FHA-insured mortgages in the aftermath of the housing market turmoil. Unfavorable economic conditions, such as decreases in home prices and increases in unemployment, affected many regions of the country, leading to more defaults and foreclosures on FHA-insured loans. Other factors, such as the credit quality of some loans, also contributed to increased default rates. Similarly, many factors contributed to the improvement in loan performance beginning in 2013. These factors included improving economic conditions and better credit quality of newly insured loans. FHA data show that the loans insured by FHA in the years since 2009 have generally performed better to date than the loans insured in the years immediately preceding 2009, based on a comparison of serious delinquency rates at the same number of months after loan origination."], "subsections": []}, {"section_title": "Loss Mitigation Efforts", "paragraphs": ["Default and foreclosure rates can be affected by efforts to help borrowers avoid foreclosure, such as by offering mortgage modifications. Efforts to help borrowers avoid foreclosure and thereby mitigate the losses that the MMI Fund would experience due to a foreclosure are referred to as loss mitigation actions. When a borrower with an FHA-insured loan defaults, the servicer of the loan is required to evaluate whether the borrower is eligible for certain specified loss mitigation actions. If successful, these options can reduce the losses that FHA would otherwise bear on a troubled loan and help minimize losses to the MMI Fund. Some loss mitigation options are intended to result in a borrower keeping his or her home, such as loan forbearance or loan modifications. Other options will result in the borrower losing his or her home, but avoiding foreclosure, such as short sales and deeds-in-lieu of foreclosure.", "FHA pays incentive payments and, in some cases, partial insurance claim payments to lenders in connection with loss mitigation actions. These costs are likely to be less to FHA than the cost of paying a claim after a foreclosure. However, if the borrower defaults on the mortgage again in the future and the loan then goes to foreclosure, FHA could end up paying the full claim amount. Therefore, the extent to which loss mitigation actions minimize losses to FHA will depend on whether borrowers who receive any type of loan workout remain current on their mortgages or default again in the future. "], "subsections": []}, {"section_title": "Loss Severity Rates", "paragraphs": ["If a mortgage must ultimately go to foreclosure, FHA may be able to recoup some of the claim amount that it pays to the lender by selling the property. In general, the amount that it recoups will usually be less than the claim amount. FHA also incurs costs related to managing and marketing foreclosed properties before they are ultimately sold. The amount of money that FHA loses on a given claim as a share of the outstanding loan balance, after accounting for any amounts it recoups from selling the property, is referred to as its loss severity rate. ", "For the fourth quarter of FY2018, FHA reported that, on average, it lost about 41% of the unpaid principal balance of the loan when it paid insurance claims. (These rates can vary from quarter to quarter; for example, in FY2018 loss severity rates ranged from about 41% to about 46%; in FY2017 they ranged from about 46% to 54%.) FHA's loss severity rates have generally improved in recent years. For example, loss severity rates were 55% in the fourth quarter of FY2013 and 61% in the fourth quarter of FY2012, compared to about 41% in the fourth quarter of FY2018. This improvement has been driven in part by increased use of alternative methods of selling foreclosed properties, which have generally had lower loss severity rates than traditional foreclosures. However, the loss severity rates for traditional foreclosures have also decreased somewhat over time. A number of factors other than disposition methods can also affect loss severities, including home price appreciation or depreciation and the characteristics of the mortgages and properties in question."], "subsections": []}]}, {"section_title": "Mortgage Insurance Premiums", "paragraphs": ["FHA charges fees, or premiums, to borrowers who obtain FHA-insured mortgages. These premiums are intended to cover the costs of any claims that are paid out of the MMI Fund. Borrowers pay both an up-front premium and an annual premium. These fees represent the main source of revenue flowing into the MMI Fund.", "The amount of premium revenue that comes into the MMI Fund depends on a number of factors, including the amount of the premiums charged, the number and dollar amount of outstanding mortgages on which borrowers are paying premiums, and how many of these outstanding mortgages are ultimately prepaid\u2014through refinancing the mortgage, paying off the loan, or going to foreclosure\u2014resulting in the borrower no longer paying premiums. Raising premiums can bring more money into the insurance fund and help to ensure that FHA is pricing its insurance high enough to adequately cover its risks. However, if premiums are raised too high, fewer borrowers might choose to take out FHA-insured mortgages, potentially affecting the overall amount of premium revenue that FHA earns. Furthermore, raising premiums too high could reduce the overall quality of the mortgages that FHA insures by potentially making FHA-insured mortgages a less attractive option for all but the borrowers who present the largest credit risk. ", "FHA raised the annual premiums that it charges multiple times in the years following the housing market turmoil before announcing a decrease in the annual premium in January 2015. The annual premiums that FHA is currently charging are lower than at any time since October 2010, though they are higher than the premiums that were charged prior to that date."], "subsections": []}, {"section_title": "Loan Volume", "paragraphs": ["The number and dollar volume of loans that FHA insures plays a role in its economic stability. On the one hand, more loans insured by FHA could lead to more premium revenue coming into the MMI Fund as more borrowers pay premiums on their FHA-insured loans. On the other hand, more mortgages insured by FHA also increases FHA's liability for loan defaults. Ultimately, the quality of the loans insured and their future performance influence the overall impact of loan volume on the financial stability of the MMI Fund. "], "subsections": []}, {"section_title": "Economic Conditions and Projections", "paragraphs": ["Economic and housing market conditions impact FHA's financial position in several ways. First of all, economic conditions can contribute to default and foreclosure rates. If more people become unemployed or underemployed, or if home prices fall such that people cannot sell their homes if they can no longer afford their mortgages, then more people may face default or foreclosure. Falling house prices also limit the amount that FHA can recoup when it sells a foreclosed property.", "Projections of future economic conditions are also important factors in evaluating the health of the MMI Fund. The expected future paths of house prices and interest rates, in particular, play large roles in estimating how FHA-insured mortgages will perform in the future and, ultimately, how much money is expected to flow into and out of the MMI Fund. The future path of house prices is important because, as noted, house prices play a role in default and foreclosure rates and in how much FHA can recoup on foreclosures. Interest rates are important because they can affect home purchase activity as well as the decision by homeowners to refinance their mortgages, which affects how much premium revenue FHA expects to earn as well as affecting FHA's potential liability for future claims. If borrowers with FHA-insured mortgages refinance into new mortgages that are not insured by FHA, those borrowers will stop paying premiums to FHA, reducing the amount of revenue that FHA takes in. However, FHA's overall liabilities will also be reduced since it will no longer be responsible for repaying the lender if the borrower defaults on the mortgage.", "If assumptions about future economic conditions and their impact on loan performance are not accurate, then current estimates of the MMI Fund's financial position may also not be accurate. "], "subsections": []}]}, {"section_title": "The MMI Fund in the Federal Budget", "paragraphs": ["This section describes how FHA-insured mortgages are accounted for in the federal budget in the year that the loans are insured and in the years thereafter. It includes a discussion of the circumstances under which the MMI Fund would need an appropriation in order to cover the cost of insuring new single-family loans in an upcoming fiscal year (a situation which has never occurred), and the circumstances under which the MMI Fund can draw on permanent and indefinite budget authority with Treasury to reserve for higher-than-expected costs of loans insured in past years (an event that occurred at the end of FY2013). "], "subsections": [{"section_title": "Credit Reform Accounting and Credit Subsidy Rates", "paragraphs": ["The Federal Credit Reform Act of 1990 (FCRA) specifies the way in which the costs of federal loan guarantees, including FHA-insured loans, are recorded in the federal budget. The FCRA requires that the estimated lifetime cost of guaranteed loans (in net present value terms) be recorded in the federal budget in the year that the loans are insured. The lifetime cost per dollar of loans guaranteed is reflected in the budget as a credit subsidy rate , and the credit subsidy rate multiplied by the total dollar volume of loans insured that year results in the total amount of credit subsidy for those loans. ", "When a loan guarantee program is estimated to have a positive credit subsidy rate, it requires an appropriation to cover the cost of new loan guarantees before it can insure any new loans in that fiscal year. When a loan guarantee program is estimated to have a negative credit subsidy rate, it means that the present value of the lifetime cash flows associated with the guaranteed loans is expected to result in more money coming into the account than flowing out if it. Rather than requiring an appropriation, a negative credit subsidy rate generates negative subsidy, resulting in offsetting receipts. In the case of the MMI Fund, these offsetting receipts can offset other costs of the HUD budget.", "In accordance with the FCRA, each year as part of the President's budget request, FHA and the Office of Management and Budget (OMB) estimate the credit subsidy rate for the loans expected to be insured in the upcoming fiscal year. These estimates are based on factors such as projections of how much mortgage insurance premium revenue the loans insured in the upcoming year are expected to bring in, projections of how much FHA will have to pay in future insurance claims related to those loans, and projections of how much money FHA will be able to recover by selling foreclosed properties. These projections, in turn, rest on assumptions about the credit quality of the loans being made and assumptions about future economic conditions (including house prices and interest rates).", "Since credit reform accounting was implemented, FHA's single-family mortgages have always been estimated to have negative credit subsidy in the year that they are insured. That is, over the life of the loans, the insured loans are projected to make money for the government rather than require an appropriation from the government to pay for their costs. (This applies only to the costs associated with the insured loans themselves; credit subsidy rates do not include the administrative costs of a program. FHA does receive appropriations for administrative contract expenses and for salaries. ) The original credit subsidy rate estimates for FHA-insured loans have ranged from a low of -0.05% in FY2009 to a high of -9.03% in FY2015. The total amount of money that FHA would expect to earn on loans insured in a given year depends on the total dollar amount of loans it insures in that year as well as the credit subsidy rate.", "If FHA's single-family program were ever estimated to have a positive credit subsidy rate for the upcoming fiscal year, it would require an appropriation to cover the difference between the amount of money FHA expected to take in and pay out over the life of the loans. If funding was not appropriated to cover a positive subsidy rate, then FHA would not be able to insure new loans in that year. (For a brief discussion of a proposed change in the required method of calculating credit subsidy rates that could result in the MMI Fund having a positive credit subsidy rate, see the nearby text box, \" FHA and \"Fair Value\" Accounting .\")", "In the President's FY2019 budget request, the credit subsidy rate for the MMI Fund, excluding reverse mortgages, was estimated to be negative 3.20% for FY2019. At an expected insurance volume of $230 billion, the budget estimated that the MMI Fund forward portfolio would earn about $7.4 billion in negative credit subsidy in FY2019.", "CBO does its own credit subsidy estimates, and these estimates are the ones that are used during the appropriations process. For FY2019, CBO estimated that FHA's single-family programs (excluding reverse mortgages) would generate about $6.9 billion in negative credit subsidy. CBO's lower credit subsidy estimate, as compared to the budget request, results from slightly lower estimates of both the credit subsidy rate and overall loan volume for the FHA forward portfolio in FY2019."], "subsections": []}, {"section_title": "Annual Credit Subsidy Rate Re-estimates", "paragraphs": ["The amount of money that loans insured by FHA in a given year actually earn for or cost the government over the course of their lifetime is likely to be different from the original credit subsidy estimates due to better or worse than expected performance of those loans. Federal credit reform accounting recognizes this, and provides permanent and indefinite budget authority to federal credit programs to cover any increased costs of loan guarantees in the future.", "Each year, in consultation with OMB, FHA re-estimates each prior year's credit subsidy rates based on the actual performance of the loans and other factors, such as updated economic projections. Although the original credit subsidy rate for the single-family mortgage insurance program each year has historically been estimated to be negative, the credit subsidy rate re-estimates for the loans insured in several fiscal years are currently estimated to be positive, suggesting that FHA will actually pay out more money than it earns on the loans insured in those years. ", " Table 1 shows the original credit subsidy rate estimates and the most current re-estimated credit subsidy rates (as of the date of this report) for the loans insured in each fiscal year between 1992 and 2017. The first column shows the original credit subsidy rate. In all cases the original subsidy rate estimates were negative (shown in green), meaning that the loans insured in those years were originally expected to make money for the government. The second column shows the current re-estimated credit subsidy rate for each year. Re-estimated credit subsidy rates are shown in green if they remained negative (even if they are less favorable than the original estimate) and in red if they have become positive. (See the PDF version of this report to see the table in color.) ", "For most years, the current re-estimated credit subsidy rate is less favorable than the original estimate, although many of the re-estimated credit subsidy rates are still negative. A lower, but still negative, credit subsidy estimate suggests that the loans insured in that fiscal year will still make money for the government, but less than was originally estimated. In the years between FY2000 and FY2009, the re-estimates of the subsidy rates are positive (shown in red), meaning that the loans insured in these years are currently expected to lose money overall. In six years\u2014FY1992, FY2010, FY2011, FY2012, FY2013, and FY2016\u2014the current re-estimated subsidy rate is more favorable than the original estimated subsidy rate, meaning that the loans insured in those years are now expected to make more money than originally estimated. "], "subsections": []}, {"section_title": "MMI Fund Account Balances", "paragraphs": ["The credit subsidy rate re-estimates affect the way in which funds are held in the MMI Fund. The MMI Fund consists of two primary accounts: the Financing Account and the Capital Reserve Account. The Financing Account holds funds to cover expected future losses on FHA-insured loans. The Capital Reserve Account holds additional funds to cover any additional, unexpected future losses. Funds are transferred between the two accounts each year on the basis of the re-estimated credit subsidy rates to ensure that enough is held in the Financing Account to cover updated projections of expected losses on insured loans. If the credit subsidy rate re-estimates reflect an aggregate increase in expected losses, funds are transferred from the Capital Reserve Account to the Financing Account to cover the amount of the increase in expected losses. If the credit subsidy rate re-estimates reflect a decrease in aggregate expected losses, funds are transferred from the Financing Account to the Capital Reserve Account. ", " Table 2 illustrates the changes in these account balances between FY2008 and FY2018. In the years following the housing market turmoil that began around 2007, the credit subsidy rate re-estimates showed aggregate increases in expected losses on FHA-insured loans, requiring large transfers of funds from the Capital Reserve Account to the Financing Account to cover these additional expected future losses. At the end of FY2008, the MMI Fund held $9 billion in the Financing Account and $19.3 billion in the Capital Reserve Account. The amounts needed in the Financing Account increased over the next several years and the amounts held in the Capital Reserve Account decreased, reaching zero at the end of FY2013 (when the MMI Fund received funds from Treasury to make a required transfer of funds to the Financing Account). By the end of FY2014, the MMI Fund had begun to rebuild its reserves, holding $7.3 billion in the Capital Reserve Account. As of the end of FY2018, the Capital Reserve Account held $27.2 billion.", "Although the total resources held in these accounts have increased over the last several years, the total dollar volume of mortgages insured by FHA has also increased, from about $400 billion at the end of FY2008 to about $1.3 trillion at the end of FY2018."], "subsections": []}, {"section_title": "Permanent and Indefinite Budget Authority", "paragraphs": ["Recognizing the fact that estimating the lifetime cost of loan guarantees is inexact, the Federal Credit Reform Act of 1990 includes permanent and indefinite budget authority for federal loan guarantee programs to cover the cost of credit subsidy rate re-estimates. Therefore, if FHA ever needs to transfer more money than it has in the Capital Reserve Account to the Financing Account to cover an increase in expected losses on insured loans, it can draw on its permanent and indefinite budget authority to receive funds from Treasury to make this transfer without additional congressional action.", "Any funds drawn from Treasury to make a required transfer of funds to the Financing Account are not spent immediately. Rather, they are held in the Financing Account, and used to pay claims to lenders only if the rest of the funds in the Financing Account are exhausted. If economic conditions and loan performance improve, or if loans insured in the future bring in enough money to both cover their own costs and pay for past loans that defaulted, it is possible that any money received from Treasury would never actually be spent. On the other hand, if future insured loans do not bring in enough funds to cover losses on past loans, or if economic conditions and loan performance do not improve, any funds received from Treasury could eventually be spent to pay actual claims.", "When the President's budget request for FY2014 was released in April 2013, it included an estimate that the MMI Fund would need a mandatory appropriation of $943 million from Treasury during FY2013 in order to make a required transfer of funds from the Capital Reserve Account to the Financing Account. FHA had until the end of FY2013 to make the required transfer of funds, and there was a possibility that the MMI Fund would bring in enough additional funds through the negative credit subsidy it earned on loans that it insured in FY2013 to make the required transfer without depleting the Capital Reserve Account. However, due to reduced loan volumes in FY2013, the MMI Fund earned less than anticipated during the year. ", "At the end of September 2013, HUD announced that the MMI Fund needed about $1.7 billion to ensure that enough money was available in the Financing Account to cover all expected future losses on insured loans. It received these funds from Treasury using the permanent and indefinite budget authority provided under the FCRA. This amount was nearly twice what was anticipated in the President's budget, and represented the first time that FHA had ever needed funds from Treasury to make a required transfer of funds from the Capital Reserve Account to the Financing Account. FHA has not needed to draw additional funds from Treasury since that time."], "subsections": []}]}, {"section_title": "Annual Actuarial Review and Annual Report to Congress on the Financial Status of the MMI Fund", "paragraphs": ["Separately from the annual budget process, FHA is required by law to obtain an independent actuarial review each year that analyzes the financial position of the MMI Fund and to provide an annual report to Congress on the results of the actuarial review. This review traditionally analyzes the MMI Fund's financial position by reporting the amount of funds that it currently has on hand and estimating the net amount (in present value terms) that it expects to earn or lose in the future on loans that it currently insures. These numbers are added together to compute the \"economic value\" of the MMI Fund. The economic value is the amount of money that the MMI Fund would be projected to have on hand after all of the cash flows associated with its insured loans are realized, assuming that it does not insure any more loans going forward. The results of the actuarial review are presented in FHA's annual report to Congress on the financial status of the MMI Fund.", "The budgetary treatment and the actuarial review of the MMI Fund are two different ways of looking at the same thing\u2014namely, how the loans insured under the MMI Fund have performed and are expected to perform in the future, and the effect of this loan performance on the financial position of the MMI Fund. However, the annual actuarial review is separate from the federal budget process, and uses somewhat different economic assumptions than those used in the federal budget. This section describes the actuarial review and accompanying annual report to Congress along with important related concepts. It then discusses the results of the FY2018 actuarial review and annual report that were released in November 2018.", "In the annual actuarial review, the independent actuary reviews the MMI Fund's financial information to estimate the MMI Fund's current financial position, including both forward and reverse mortgages insured under the fund. This usually includes reporting the amount of funds that the MMI Fund currently has on hand and estimating the cash flows that it expects in the future\u2014such as premiums paid into the fund and claims paid out of the fund\u2014on the loans that it currently insures. It uses economic modeling to project the MMI Fund's financial status for the current year and several years into the future under a \"base case\" scenario and several alternative economic scenarios. Some of the key terms used in the actuarial report and FHA's annual report on the financial status of the MMI Fund include the following:", "Capital resources are the net assets (assets minus liabilities) that the MMI Fund currently has on hand that can be converted into cash to pay claims on defaulted mortgages or other expenses. Present value of future cash flows on outstanding business is the estimated amount that the MMI Fund is currently expected to gain or lose in the future, in present value terms, on the loans that it currently insures (this estimate does not take into account any new loans that might be insured in the future). Economic value or economic net worth is the MMI Fund's capital resources plus the present value of its future cash flows on outstanding business. It represents the amount of capital resources that the MMI Fund would have after expected future cash flows on currently insured loans are realized. In other words, it represents the amount that the MMI Fund could use to pay for any additional, unexpected losses on its outstanding loans.", "The law also mandates that FHA meet a 2% capital ratio requirement, which means that the economic value of the MMI Fund must be at least 2% of the total dollar volume of mortgages that FHA currently insures. The capital ratio is calculated on the basis of the actuarial report. The capital ratio fell below this 2% requirement in FY2009 and remained below 2% for several years thereafter, turning negative in FY2012 and FY2013. The capital ratio was estimated to be positive again in FY2014 and was estimated to exceed 2% in FY2015 and each subsequent year to date. "], "subsections": [{"section_title": "FY2018 Results", "paragraphs": ["The FY2018 annual actuarial review and FHA's accompanying annual report to Congress on the MMI Fund's financial status were released in November 2018. In its annual report, FHA reported the MMI Fund's total capital resources to be $49.2 billion. This is the amount of resources that FHA currently has on hand that can be converted into cash to pay claims. FHA estimated the present value of future cash flows on insured loans (including both forward and reverse mortgages) to be negative $14.4 billion. In other words, in net present value terms, the loans that FHA currently insures are expected to cost FHA about $14.4 billion over the remaining life of those loans. The economic value of the MMI Fund, therefore, was estimated by FHA to be approximately $34.9 billion ($49.2 billion-$14.4 billion), including both forward and reverse mortgages. The independent actuary separately estimated the present value of future cash flows on insured loans for the MMI Fund. While the actuary's estimate differed somewhat from FHA's, it found FHA's estimate to be reasonable.", "The estimated economic value of $34.9 billion was an increase of about $8.1 billion compared to FY2017, when the MMI Fund was estimated to have an economic value of $26.7 billion. ", "In FY2012 and FY2013, the MMI Fund was estimated to have a negative economic value. A negative economic value means that the funds that the MMI Fund currently has on hand, plus the present value of the funds that it expects to earn in premiums on loans that it currently insures, would not be enough to pay for the present value of claims on the loans that are currently insured. For example, in FY2013 the MMI Fund was estimated to have an economic value of negative $1.3 billion. This meant that, based on the MMI Fund's capital resources and estimates of future cash flows on insured loans as of the time the report was prepared, FHA was expected to be short about $1.3 billion when all of its currently insured loans were eventually paid off. In contrast, the FY2018 economic value of positive $34.9 billion means that the MMI Fund would be estimated to have that amount left over after all of the expected future cash flows (including premium payments and insurance claims) on its currently insured mortgages were realized. This provides a \"cushion\" should future losses on insured mortgages be higher than currently anticipated.", "The projections included in the actuarial report and the annual report to Congress rely on several assumptions. For one thing, the estimates of the MMI Fund's current status assume that FHA will not insure any more mortgages. In actuality, FHA will likely continue to insure loans, which will bring in additional resources in the form of premium revenues, but will also create new liabilities in terms of claims. ", "Furthermore, the actuarial review relies upon assumptions about future economic conditions. To the extent that actual future economic conditions differ from these assumptions, the estimates of the MMI Fund's value will also be different. Although FHA estimates that the MMI Fund's economic value in FY2018 is positive $34.9 billion, it notes that, under a variety of alternative future economic scenarios, the MMI Fund's economic value could be different, including potentially negative values in certain severe economic scenarios. Both the actuarial report and the annual report to Congress include an analysis of the MMI Fund's financial position under various alternative economic scenarios. "], "subsections": []}, {"section_title": "The 2% Capital Ratio Requirement", "paragraphs": ["As noted earlier, the MMI Fund is also required by law to maintain a capital ratio of 2%. This is often referred to as the capital ratio requirement. "], "subsections": [{"section_title": "Brief History of the Capital Ratio Requirement", "paragraphs": ["The capital ratio requirement for the MMI Fund was enacted in 1990 amid concerns about the solvency of the FHA single-family mortgage insurance program. At the time, the MMI Fund had a negative economic value. This meant that the expected future cash flows associated with the mortgages currently insured by the MMI Fund, when combined with the capital resources that the MMI Fund currently had on hand, were not expected to be enough to pay for all future claims on FHA-insured loans. ", "In response to these concerns, the Omnibus Budget Reconciliation Act of 1990 ( P.L. 101-508 ) mandated that, going forward, the MMI Fund's economic value must be at least 2% of the total dollar amount of loans that it is currently insuring. The capital ratio is an expression of the economic value of the MMI Fund as a percentage of the total dollar volume of loans insured by the MMI Fund. It is a measure of how much capital the MMI Fund will have available to pay for unexpected losses on currently insured loans, after the amounts estimated to be needed to cover expected losses are taken into account.", "In addition to establishing the capital ratio requirement, P.L. 101-508 also directed FHA to make certain changes that were intended to improve the MMI Fund's financial condition. The changes that the law required included charging borrowers an annual mortgage insurance premium to go along with the existing premium that was paid upfront and suspending certain payments (known as distributive shares) that had previously been paid to borrowers under certain conditions. The law also established the requirement for the annual independent actuarial review of the MMI Fund. Some of these changes, such as the additional mortgage insurance premium, essentially meant that FHA would charge more to future borrowers to build up reserves to pay for losses on mortgages made to past borrowers.", "As Congress considered the legislation prior to enactment, there was debate over the appropriate level for the capital ratio requirement. This debate highlights the ongoing tension that FHA faces between maintaining its financial soundness and carrying out its purpose of expanding access to affordable mortgage credit for underserved borrowers. The 2% threshold was adopted because it was viewed as being high enough to provide FHA with a cushion to withstand some unexpected losses, but without imposing an undue financial burden on future FHA-insured borrowers. A higher capital ratio requirement would have likely required FHA to charge higher premiums for FHA insurance. It was recognized that a 2% requirement would likely be high enough to withstand moderate future economic downturns, but would likely not be high enough to allow the MMI Fund to withstand a catastrophic economic downturn. According to testimony from the General Accounting Office (GAO, now the Government Accountability Office) from 2000:", "Determining what constitutes an adequate reserve level is essentially a question of what kinds of adverse economic conditions\u2014moderately severe or catastrophic\u2014the reserve should be able to withstand.... In the actuarial review of the Fund conducted by Price Waterhouse for fiscal year 1989, the researchers concluded that actuarial soundness would be consistent with a reserve that could withstand adverse, but not catastrophic, economic downturns. They further concluded that the Treasury implicitly covers catastrophic risk.... By contrast, rating agencies have taken the position, when evaluating private mortgage insurers, that they should have enough capital to withstand catastrophic risk.... However, requiring FHA to hold capital equivalent to that held by private mortgage insurers would likely impair FHA's public purpose.", "While the law requires the Secretary of HUD to ensure that the MMI Fund maintains a capital ratio of 2%, it does not currently specify consequences or specific actions that the Secretary must take if the capital ratio falls below that threshold. Furthermore, GAO has noted that the 2% capital ratio requirement does not take into account specific economic conditions the MMI Fund should be expected to withstand. It has suggested that Congress could consider enacting legislation to specify such conditions, and to require FHA to maintain a capital ratio that is based on the MMI Fund's ability to withstand those specific economic scenarios.", "While the results of the actuarial review and the estimate of the capital ratio provide important information about the financial soundness of the MMI Fund, the results of the actuarial review and the capital ratio estimate do not determine whether or not FHA will need to draw on its permanent and indefinite budget authority with Treasury for funds to hold against expected future losses or to pay claims. That is determined as part of the re-estimate process that is done as part of the federal budgeting process each year, which is described in the \" The MMI Fund in the Federal Budget \" section of this report. "], "subsections": []}, {"section_title": "FY2018 Capital Ratio", "paragraphs": ["The capital ratio is reported in FHA's annual report to Congress on the financial status of the MMI Fund, using the actuarial report's numbers for both traditional single-family forward mortgages and reverse mortgages insured by FHA. In FY2018, the annual report estimated the economic value of the MMI Fund to be $34.9 billion. The total dollar volume of mortgages currently insured by the MMI Fund was $1.265 trillion, which means that the capital ratio was estimated to be 2.76% ($34.9 billion divided by $1.265 trillion). This represents an increase from FY2017, when the capital ratio was estimated to be 2.18%. The capital ratio remained above 2% for the fourth straight year; FY2015 was the first time the capital ratio had exceeded 2% since FY2008.", "In FY2009, the capital ratio was estimated to be 0.53%. This was the first time that the capital ratio had fallen below 2% since the requirement was first met in FY1995. The capital ratio remained below 2% from FY2009 through FY2014, when the capital ratio was estimated to be 0.41%. In FY2012 and FY2013, the capital ratio was estimated to be negative 1.44% and negative 0.11%, respectively. FY2012 was the first time that the MMI Fund had been estimated to have a negative capital ratio since the early 1990s, when Congress enacted the series of changes aimed at ensuring the financial soundness of the MMI Fund, including the requirement for an independent annual actuarial review and the required capital ratio. ", "A negative capital ratio by itself does not trigger any special assistance from Treasury, although it suggests that such assistance could be needed at some point. Rather, any assistance from Treasury is triggered if the credit subsidy rate re-estimates described in the \" Annual Credit Subsidy Rate Re-estimates \" section show that FHA needs to transfer more funds than it has in its Capital Reserve Account into its Financing Account to cover increases in expected future losses. The amount of assistance required from Treasury is based on the credit subsidy rate re-estimates, not on the capital ratio or the economic value of the MMI Fund as reported in the actuarial report. ", " Table 3 shows the MMI Fund's financial position, including its economic value, dollar volume of insured mortgages, and capital ratio, as estimated by the independent actuary and FHA for each fiscal year between FY2006 and FY2018. ", "The drop in the capital ratio in the years after 2008 resulted from both a decrease in the numerator of the ratio (the MMI Fund's economic value) and an increase in the denominator of the ratio (total dollar volume of mortgages outstanding), which reflects the fact that FHA is insuring a greater volume of loans than it has in the recent past. The decrease in the MMI Fund's economic value, in turn, was mostly due to the fact that the present value of future cash flows became increasingly negative for a time, suggesting that FHA was expecting large net cash outflows over the life of the loans that it was currently insuring."], "subsections": []}]}]}, {"section_title": "Selected Current Issues Related to the Financial Status of the MMI Fund", "paragraphs": ["This section briefly describes selected current issues related to the financial status of the MMI Fund, and in particular certain issues that are often discussed in the context of the annual actuarial review and annual report to Congress. Namely, it discusses the inclusion of reverse mortgages in the MMI Fund, debate over the appropriate level for the premiums charged for FHA-insured mortgages, and certain trends in FHA-insured mortgage characteristics that FHA identified in its FY2018 annual report as worthy of monitoring. "], "subsections": [{"section_title": "Role of FHA-Insured Reverse Mortgages in the Annual Actuarial Review", "paragraphs": ["FHA-insured reverse mortgages, known as Home Equity Conversion Mortgages (HECMs), were moved into the MMI Fund beginning in FY2009. In contrast to traditional forward mortgages, HECMs are FHA-insured reverse mortgages for elderly homeowners who are seeking to access their accumulated home equity. HECMs that were insured by FHA prior to FY2009 are obligations of a different FHA insurance fund, but HECMs insured in FY2009 or later are obligations of the MMI Fund.", "The dollar amount of HECMs insured under the MMI Fund is much smaller than the amount of traditional forward mortgages: about $72 billion of the $1.3 trillion of insurance-in-force under the MMI Fund are HECMs. However, changes in the estimated value of HECMs can have a significant impact on the MMI Fund's overall economic value and on the capital ratio. ", "Estimates of HECM performance are particularly sensitive to economic assumptions, such as future house prices and interest rates, making the value of the HECM portfolio volatile. While the value of forward mortgages insured under the MMI Fund has consistently increased since FY2012, the value of HECMs has fluctuated between negative and positive values and has become increasingly negative in recent years. ", "The volatility in the HECM portfolio can be seen in the results of recent actuarial reviews and in the standalone capital ratios for the forward and HECM portfolios as reported by FHA. As shown in Figure 1 , the standalone capital ratio for the forward mortgage portfolio alone has steadily increased from negative 0.91% in FY2012 to positive 3.93% in FY2018. In comparison, the standalone capital ratio for HECMs has fluctuated during that time period, ranging from a high of positive 3.07% in FY2013 to a low of negative 18.83% in FY2018. (The capital ratio for the overall MMI Fund in FY2018 was estimated to be 2.76%.) Given the smaller overall insurance volume of the HECM portfolio, changes in the portfolio's economic value can have a larger impact on the HECM standalone capital ratio than a comparable dollar volume change in the larger forward portfolio would have on its standalone capital ratio. Nevertheless, the trends in the standalone capital ratios illustrate differences in the performance of the two portfolios. ", "The volatility of HECMs and their inclusion in the MMI Fund potentially raise some policy questions. In its FY2015 annual report on the status of the MMI Fund, FHA noted that including both HECMs and forward mortgages in the fund could make it more difficult to independently assess the financial health of the separate programs, particularly since the capital ratio for the entire MMI Fund is often used as a proxy for the performance of the much larger forward mortgage portfolio. Furthermore, including both types of mortgages in the same fund could impact policies related specifically to forward mortgages, such as the level of fees paid by borrowers, in response to instability in the MMI Fund driven by HECMs. For these reasons, some industry groups and other observers have argued that Congress should consider legislation to remove HECMs from the MMI Fund. However, GAO and others have noted that removing HECMs from the MMI Fund would involve tradeoffs."], "subsections": []}, {"section_title": "Debate over FHA Premium Levels", "paragraphs": ["The upfront and annual mortgage insurance premiums charged by FHA account for most of the revenue coming into the MMI Fund. As described earlier in the \" Mortgage Insurance Premiums \" section of this report, the levels of the premiums charged can impact the MMI Fund's status in several potentially conflicting ways. All else being equal, higher premiums should bring more money into the MMI Fund. However, higher premiums have the potential to negatively impact FHA's finances by leading to a reduction in FHA loan volume or impacting the credit quality of the loans that FHA insures. Higher premiums also increase the costs of FHA-insured mortgages for homebuyers, potentially making FHA-insured mortgages less affordable or pricing some potential homebuyers out of the market. Therefore, setting the appropriate levels for the mortgage insurance premiums requires striking a balance between maintaining affordability of FHA-insured mortgages and managing risk to the insurance fund. ", "In the years following the housing market turmoil that began around 2007, FHA increased the premiums that it charges for new FHA-insured forward mortgages several times. Most of these changes affected the annual premiums. Following several increases, FHA decreased the annual mortgage insurance premiums that it charges in January 2015. The current annual premiums are at their lowest levels since the beginning of October 2010, though they are higher than the premiums that FHA was charging previously. ", "In recent years, as the capital ratio has increased over 2%, some industry groups and housing advocates have called for FHA to further reduce the mortgage insurance premiums it charges for forward mortgages (or to reduce the amount of time that it charges the premiums ), arguing that the MMI Fund is strong enough to take such steps to increase the affordability of FHA-insured mortgages. The improvement in the MMI Fund's capital ratio in FY2018 again led to calls from some advocates and industry groups to decrease the mortgage insurance premiums. However, FHA has reportedly indicated that it is not likely to reduce the premiums in the near future. "], "subsections": [{"section_title": "Suspension of a Planned FHA Premium Decrease in 2017", "paragraphs": ["On January 9, 2017, in the last weeks of the Obama Administration, FHA had announced that it would again decrease the annual mortgage insurance premiums charged to borrowers who took out new FHA-insured mortgages that closed on or after January 27, 2017. However, on the first day of the Trump Administration, before the new premiums had gone into effect, FHA announced that it was suspending the planned premium reduction. In its announcement, FHA indicated a need to further study the impact that the fee decrease could have on the insurance fund and the long-term financial viability of FHA. ", "In its FY2017 annual report to Congress on the financial status of the MMI Fund, FHA estimated that had the premium decrease gone into effect, the capital ratio for the MMI Fund would have been 1.76% in FY2017, below the statutorily mandated level of 2%. The lower capital ratio would have resulted from the combination of an estimated decrease of $3.2 billion in the net present value of expected future cash flows on insured mortgages (stemming from lower premiums that would have been paid on FHA-insured mortgages originated in FY2017, including some borrowers refinancing their existing FHA-insured mortgages into new mortgages with lower premiums) and an estimated increase of $45 billion in FHA's insurance-in-force (stemming from more people obtaining FHA-insured mortgages as a result of the premium decrease). ", "These estimated differences in the net present value of future cash flows and insurance-in-force also would have reduced the economic net worth and the capital ratio for the forward mortgage portfolio alone. However, based on the figures provided in the annual report, the estimated capital ratio for forward mortgages alone would still have remained above 2% if the premium decrease had gone into effect, even though the capital ratio for the MMI Fund as a whole (including both forward mortgages and HECMs) would have fallen below that threshold. The capital ratio for the MMI Fund as a whole is the only number that matters for the purposes of complying with the law. Nevertheless, the estimated impact that the premium decrease would have had on the forward portfolio alone may be relevant to the extent that some are concerned that the inclusion of HECMs in the MMI Fund may affect policy decisions related specifically to the forward portfolio. "], "subsections": []}]}, {"section_title": "FHA-Insured Mortgage Origination Trends Identified by FHA in the FY2018 Annual Report", "paragraphs": ["In the FY2018 annual report to Congress, FHA identified several trends related to the credit quality of its forward mortgage insurance portfolio that it is monitoring due to their potential to increase risk to FHA. In particular, FHA noted the following five trends:", "Cash-Out Refinances : 75 Cash-out refinances are refinance transactions in which the borrower can access equity in the home by taking out a new mortgage for a higher amount than the remaining principal balance of the existing mortgage. The share of cash-out refinances insured by FHA has been increasing in recent years, reaching 63% of all FHA-insured refinance mortgages, and 15% of all FHA-insured forward mortgages, in FY2018. The share of cash-out refinances may be increasing for several reasons; for example, rising home prices may lead to more cash-out refinances by increasing borrowers' equity in their homes, and continuing low interest rates may be depressing other types of refinancing activity (making cash-out refinances a larger share of all refinance mortgages). Nevertheless, cash-out refinances have the potential to pose a risk to FHA by increasing borrowers' leverage and reducing the equity they have in their homes. If home prices should fall in the future, it is possible that some borrowers with higher loan-to-value ratios due to cash-out refinances could have difficulty repaying their mortgages. Debt-to-Income Ratios : 77 Debt-to-income ratios for borrowers with new FHA-insured purchase mortgages have been increasing in recent years. In FY2018, the average debt-to-income ratio for a new purchase borrower was about 43%, compared to 42% in FY2017 and 40% in FY2008. The share of FHA-insured purchase mortgages with borrower debt-to-income ratios above 50% has been increasing as well, reaching nearly 25% in FY2018. Higher debt-to-income ratios could increase the risk that some borrowers might have problems repaying their mortgages if they encounter financial difficulties. Credit Scores : 78 The average credit scores of borrowers who obtain FHA-insured mortgages have been decreasing since FY2011. In FY2018, the average borrower credit score for FHA-insured mortgages was 670, compared to 676 in FY2017 and 701 in FY2011. This in part reflects a return of FHA to its traditional role in the mortgage market; in the aftermath of the housing market turmoil that began around 2007, FHA insured a greater share of mortgages as mortgage credit conditions tightened, including mortgages for borrowers with higher credit scores who traditionally may not have sought FHA-insured mortgages. As mortgage credit conditions have eased somewhat, more high-credit-score borrowers may find it easier to obtain other types of mortgages. However, lower borrower credit scores could potentially suggest increased risk associated with these mortgages, and FHA has said that it \"will continue to monitor declining credit scores for new FHA endorsements for the risk they pose to the MMIF.\" Down Payment Assistance : 80 FHA has also been monitoring the increasing share of mortgages that have some form of down payment assistance, and in particular down payment assistance provided by a federal, state, or local governmental entity (rather than other sources, such as a family member). In FY2018, about 38% of FHA-insured purchase mortgages included some type of down payment assistance, compared to about 30% in FY2011. FHA has noted that mortgages with down payment assistance, and down payment assistance provided by a governmental entity specifically, tend to have somewhat higher default rates than other FHA-insured mortgages. FHA has also expressed some concerns about certain types of governmental down payment assistance programs and has suggested that it may be necessary to take action to provide more clarity about what types of down payment assistance are allowed. Non b ank Mortgage Originations : 83 The share of FHA-insured mortgages originated by nonbanks, rather than by traditional depository institutions, has been increasing in recent years. In FY2018, nonbank lenders originated nearly 87% of new FHA-insured mortgages. While all lenders that originate FHA-insured mortgages are required to meet certain standards, mortgages originated by nonbanks may pose different types of risks to FHA than traditional depository institutions. In its annual report, FHA stated that it \"believes it needs to strike a better balance in doing business\" with both nonbank and depository lenders. ", "There are several potential drivers of the trends identified by FHA, including, among other things, economic conditions and the availability of other types of mortgage credit. The overall impact of each of these trends on FHA loan performance and, by extension, its finances will depend on a variety of factors, and some of these trends may pose more of a potential risk to FHA than others. "], "subsections": []}]}]}}
{"id": "R45456", "title": "Federal Grand Jury Secrecy: Legal Principles and Implications for Congressional Oversight", "released_date": "2019-01-10T00:00:00", "summary": ["The Fifth Amendment to the U.S. Constitution states that \"[n]o person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury.\" This provision requires that a federal prosecutor, in order to charge a suspect with a serious federal crime, secure the assent of an independent investigative and deliberative body comprising citizens drawn from the jurisdiction in which the crime would be tried. Federal grand juries serve two primary functions: (1) they aid federal prosecutors in investigating possible crimes by issuing subpoenas for documents, physical evidence, and witness testimony; and (2) they determine whether there is sufficient evidence to charge a criminal suspect with the crime or crimes under investigation.", "Traditionally, the grand jury has conducted its work in secret. Secrecy prevents those under scrutiny from fleeing or importuning the grand jurors, encourages full disclosure by witnesses, and protects the innocent from unwarranted prosecution, among other things. The long-established rule of grand jury secrecy is enshrined in Federal Rule of Criminal Procedure 6(e), which provides that government attorneys and the jurors themselves, among others, \"must not disclose a matter occurring before the grand jury.\" Accordingly, as a general matter, persons and entities external to the grand jury process are precluded from obtaining transcripts of grand jury testimony or other documents or information that would reveal what took place in the proceedings, even if the grand jury has concluded its work and even if the information is sought pursuant to otherwise-valid legal processes.", "At times, the rule of grand jury secrecy has come into tension with Congress's power of inquiry when an arm of the legislative branch has sought protected materials pursuant to its oversight function. For instance, some courts have determined that the information barrier established in Rule 6(e) extends to congressional inquiries, observing that the Rule contains no reservations for congressional access to grand jury materials that would otherwise remain secret. Nevertheless, the rule of grand jury secrecy is subject to a number of exceptions, both codified and judicially crafted, that permit grand jury information to be disclosed in certain circumstances (usually only with prior judicial authorization). Perhaps the most significant of these for congressional purposes are (1) the exception that allows a court to authorize disclosure of grand jury matters \"preliminarily to or in connection with a judicial proceeding,\" and (2) the exception, recognized by a few courts, that allows a court to authorize disclosure of grand jury matters in special or exceptional circumstances. In turn, some courts have determined that one or both of these exceptions applies to congressional requests for grand jury materials in the context of impeachment proceedings, though there is authority to the contrary.", "Additionally, because Rule 6(e) covers only \"matters occurring before the grand jury,\" courts have recognized that documents and information are not independently insulated from disclosure merely because they happen to have been presented to, or considered by, a grand jury. As such, even if Rule 6(e) generally limits congressional access to grand jury information, Congress has a number of tools at its disposal to seek materials connected to a grand jury investigation.", "Prior Congresses have considered legislation that would have expressly permitted a court to authorize disclosure of grand jury matters to congressional committees on a showing of substantial need. However, in response to such proposals, the executive branch has voiced concerns that the legislation would raise due-process and separation-of-powers issues and potentially undermine the proper functioning of federal grand juries. These concerns may have resulted in Congress declining to alter Rule 6(e). As a result, to the extent Rule 6(e) constrains Congress's ability to conduct oversight, legislation seeking to amend the rules governing grand jury secrecy in a way that would give Congress independent access to grand jury materials may raise additional legal and pragmatic issues for the legislative branch to consider."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Fifth Amendment to the U.S. Constitution provides that \"[n]o person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury.\" This provision requires that a federal prosecutor, in order to charge a suspect with a serious federal crime, secure the assent of an independent investigative and deliberative body comprising citizens drawn from the jurisdiction in which the crime would be tried. Federal grand juries serve two primary functions: (1) they aid federal prosecutors in investigating possible crimes by issuing subpoenas for documents, physical evidence, and witness testimony; and (2) they determine whether there is sufficient evidence to charge a criminal suspect with the crime or crimes under investigation.", "Traditionally, the grand jury has done its work in secret. Secrecy prevents those under scrutiny from fleeing or importuning the grand jurors, encourages full disclosure by witnesses, and protects the innocent from unwarranted prosecution, among other things. The long-established rule of grand jury secrecy is enshrined in Federal Rule of Criminal Procedure 6(e), which provides that government attorneys and the jurors themselves, among others, \"must not disclose a matter occurring before the grand jury.\" Accordingly, as a general matter, persons and entities external to the grand jury process are precluded from obtaining transcripts of grand jury testimony or other documents or information that would reveal \"what took place\" in the proceedings, even if the grand jury has concluded its work and even if the information is sought pursuant to otherwise-valid legal processes.", "At times, the rule of grand jury secrecy has come into tension with Congress's power of inquiry when an arm of the legislative branch has sought protected materials pursuant to its oversight function. For example, some courts have determined that the information barrier established in Rule 6(e) extends to congressional inquiries, noting that the Rule \"contains no reservations in favor of . . . congressional access to grand jury materials\" that would otherwise remain secret. Nevertheless, the rule of grand jury secrecy is subject to a number of exceptions, both codified and judicially crafted, that permit grand jury information to be disclosed in certain circumstances (usually only with prior judicial authorization). And because Rule 6(e) covers only \"matters occurring before the grand jury,\" courts have recognized that documents and information are not independently insulated from disclosure merely because they happen to have been presented to, or considered by, a grand jury. As such, even if Rule 6(e) generally limits congressional access to grand jury information, Congress has a number of tools at its disposal to seek materials connected to a grand jury investigation.", "This report begins with an overview of the standards governing\u2014and exceptions applicable to\u2014grand jury secrecy under Federal Rule of Criminal Procedure 6(e). The report also addresses whether and how the rule of grand jury secrecy and its exceptions apply to Congress, including the circumstances under which Congress may obtain grand jury information and what restrictions apply to further disclosures. Concluding this report is a discussion of past legislative efforts to amend Rule 6(e) in order to provide congressional committees with access to grand jury materials."], "subsections": []}, {"section_title": "Brief Overview of the Federal Grand Jury12", "paragraphs": ["Federal law requires the various United States District Courts to order one or more grand juries to be summoned when the public interest requires. Grand jurors must be \"selected at random from a fair cross section of the community in the district or division wherein the court convenes,\" among other things. Grand jury panels consist of 16 to 23 members.", "After selection, the court swears in members of the grand jury; names a \"foreperson and deputy foreperson\"; and instructs the panel. Federal grand juries sit until discharged by the court, but generally for no longer than 18 months, with the possibility of one six-month extension.", "The authority of a federal grand jury is sweeping, but it is limited to the investigation of possible violations of federal criminal law triable in the district in which it is sitting. The grand jury may begin its examination even in the absence of probable cause or any other level of suspicion that a crime has been committed within its reach.", "The grand jury does not conduct its business in open court, nor does a federal judge preside over its proceedings. The grand jury meets behind closed doors, with only the jurors, attorney for the government, witnesses, someone to record testimony, and possibly an interpreter present.", "The grand jury acts on the basis of evidence presented by witnesses called for that purpose. The attorney for the government will ordinarily arrange for the appearance of witnesses before the grand jury, will suggest the order in which they should be called, and will take part in questioning them. The grand jury most often turns to the prosecutor for legal advice and to draft most of the indictments, which the grand jury returns.", "Grand jury witnesses usually appear before the grand jury under subpoena. Subpoenas may be issued and served at the request of the panel itself, although the attorney for the government usually arranges the case to be presented to the grand jury. Unjustified failure to comply with a grand jury subpoena may result in a witness being held in contempt. A witness who lies to a grand jury may be prosecuted for perjury or for making false declarations to the grand jury.", "Neither a potential defendant nor a grand jury target nor any of their counsel has any right to appear before the grand jury unless invited or subpoenaed. Nor does a potential defendant, a grand jury target, or their counsel have any right to present exculpatory evidence or substantive objection to the grand jury.", "There are four possible outcomes of convening a grand jury\u2014(1) indictment; (2) a vote not to indict; (3) discharge or expiration without any action; or (4) submission of a report to the court under certain circumstances. A grand jury indictment may issue upon the vote of 12 of its members that probable cause exists to believe the accused committed the crime charged."], "subsections": []}, {"section_title": "Overview of Grand Jury Secrecy", "paragraphs": [], "subsections": [{"section_title": "Historical Underpinnings", "paragraphs": ["\"Since the 17th Century, grand jury proceedings have been closed to the public, and records of such proceedings have been kept from the public eye.\" An early justification for maintaining the secrecy of grand jury proceedings in England was to prevent suspected criminals from learning of an inquest and absconding. By the late 17th century, legal scholars had begun to recognize the need for secrecy in most matters pertaining to grand jury inquiries\u2014including the identities of subjects and witnesses, the evidence collected, and the plans and deliberations of the jury\u2014in order to realize the additional aims of preserving juror independence, sussing out witness bias and mendacity, and allowing evidence to be fully developed.", "When the right to grand jury indictment crossed the Atlantic Ocean from England to the American colonies, the rule of grand jury secrecy came with it. Prior to the adoption of the Federal Rules of Criminal Procedure, the federal courts developed a fairly robust, though not unyielding, conception of grand jury secrecy at common law. Secrecy challenges most often arose in the context of criminal defendants' motions to dismiss their indictments on the grounds that the evidence considered by the grand jury could not justify the charges or that some type of misconduct had occurred. Recognizing that these motions called for inspecting records of the proceedings before the grand jury, courts typically acknowledged that they had the discretionary power to permit such inspection \"in the furtherance of justice\" but found that the power should be \"sparingly exercised\" in light of the traditional rule of secrecy. Thus, although a number of courts identified a theoretical imperative for \"removing the veil of secrecy whenever evidence of what has transpired before [the jury] becomes necessary to protect public or private rights,\" courts often declined to engage in such unveiling based merely on a defendant's \"general allegations\" or a potential \"fishing expedition.\"", "Nevertheless, when deemed \"essential\" to \"the purposes of justice,\" some courts would consider evidence of what occurred before a grand jury to determine whether an indictment against a criminal defendant should be dismissed. This unveiling apparently reflected an understanding that grand juries served not only an investigative function in furtherance of the governmental interest in law enforcement, but also as a \"protector of citizens against arbitrary and oppressive governmental action.\" Thus, as these decisions suggested, disclosure could be appropriate when continuing secrecy would be inconsistent with the citizen-protective function."], "subsections": []}, {"section_title": "Federal Rule of Criminal Procedure 6(e)", "paragraphs": [], "subsections": [{"section_title": "Background and Overview", "paragraphs": ["\"[T]he federal courts' modern version\" of the traditional rule of grand jury secrecy is established by Federal Rule of Criminal Procedure 6(e), in effect since 1946 and amended numerous times over the following 60 years. The Supreme Court has recognized that Rule 6(e) simply \"codifie[d]\" the pre-existing common law requirement \"that grand jury activities generally be kept secret,\" an \"integral part of [the United States] criminal justice system.\" An Advisory Committee Note reflects this understanding, making clear that the Rule \"continues the traditional practice of secrecy . . . except when the court permits a disclosure.\"", "Courts have identified five principal justifications underlying Rule 6(e)'s secrecy requirement:", "1. to prevent the escape of those whose indictment may be contemplated; 2. to insure the utmost freedom to the grand jury in its deliberations, and to prevent persons subject to indictment or their friends from importuning the grand jurors; 3. to prevent subornation of perjury or tampering with the witnesses who may testify before [the] grand jury and later appear at the trial of those indicted by it; 4. to encourage free and untrammeled disclosures by persons who have information with respect to the commission of crimes; 5. to protect [the] innocent accused who is exonerated from disclosure of the fact that he has been under investigation, and from the expense of standing trial where there was no probability of guilt.", "At the time of its adoption, Rule 6(e) ensured the secrecy of grand jury proceedings by authorizing \"[d]isclosure of matters occurring before the grand jury\" in only limited circumstances. First, such matters \"other than [the jury's] deliberations and the vote of any juror\" automatically could be disclosed to \"the attorneys for the government for use in the performance of their duties.\" Beyond this, \"a juror, attorney, interpreter or stenographer\" could disclose matters occurring before the grand jury only with court authorization (1) \"preliminarily to or in connection with a judicial proceeding,\" or (2) \"at the request of the defendant upon a showing that grounds may exist for a motion to dismiss the indictment because of matters occurring before the grand jury.\"", "Amendments to Rule 6(e) from 1966 to 2014 have sought, among other things, to align the Rule's text with court-developed exceptions and clarifications that have sometimes extended beyond the literal terms of the version of the Rule in force at a given point in time. The current iteration of Rule 6(e) establishes a general rule of secrecy by setting out a list of persons, including grand jurors and attorneys for the government, who \"must not disclose a matter occurring before the grand jury\" unless the Federal Rules of Criminal Procedure \"provide otherwise.\" Rule 6(e) then \"provide[s] otherwise\" by listing complex exceptions to the prohibition. The exceptions generally fall into two categories: (1) disclosures permitted without judicial authorization, and (2)\u00a0disclosures permitted with judicial authorization.", "In the first category, persons prohibited by the Rule from disclosing matters occurring before the grand jury may nevertheless disclose such matters (other than grand jury deliberations or grand juror votes) to an attorney for the government \"for use in performing that attorney's duty\" and to non-attorney \"government personnel\" who are needed to help a government attorney enforce federal criminal law. Government attorneys may also disclose such matters (1) to another federal grand jury; (2) to federal law enforcement, intelligence, protective, immigration, national defense, or national security officials only with respect to matters involving foreign intelligence or counterintelligence; and (3) to \"any appropriate . . . government official\" only with respect to matters involving threats of attack or intelligence gathering by foreign powers or threats of sabotage or terrorism.", "In the second category of exceptions, the court under whose auspices the grand jury was empaneled may authorize disclosure of a grand jury matter (1) preliminarily to or in connection with a judicial proceeding; (2) to a defendant who shows grounds may exist to dismiss the indictment because of something that occurred before the grand jury; or (3) at the request of the government, to a foreign court or prosecutor or to an \"appropriate\" state, state-subdivision, Indian tribal, military, or foreign government official for the purpose of enforcing or investigating a violation of the respective jurisdiction's criminal law.", "Beyond the express terms of Rule 6(e), three circuits and a number of district courts have held that courts have inherent authority to disclose grand jury materials in situations where an enumerated Rule 6(e) exception is not otherwise applicable, though the authority may be exercised only in rare or special cases. Additional Rules and statutes also permit disclosure in particular circumstances.", "When a court-authorized disclosure is at issue, the person or entity seeking grand jury information must make a \"strong showing of particularized need\" that \"outweighs the public interest in secrecy.\" If that showing is made, the court may authorize disclosure \"at a time, in a manner, and subject to any other conditions that it directs.\"", "The following sections of this report provide more detail on the various provisions of Rule 6(e)."], "subsections": []}, {"section_title": "Persons Subject to Rule 6(e)", "paragraphs": ["Rule 6(e)(2)(B) lists eight categories of persons who \"must not disclose a matter occurring before the grand jury\" unless an exception applies:", "1. grand jurors; 2. interpreters; 3. court reporters; 4. operators of recording devices ; 5. persons who transcribe recorded testimony; 6. attorneys for the government; 7. government personnel needed to assist attorneys for the government; 8. persons authorized to receive grand jury materials under 18 U.S.C. \u00a7 3322.", "In other words, the Rule generally imposes an obligation of secrecy on each person permitted to be present while the grand jury is in session, as well as certain persons given access to grand jury information. Yet there is a notable exception to this general imperative: though a \"witness being questioned\" is authorized by Rule 6(d) to be present during grand jury proceedings (for obvious reasons), grand jury witnesses are not included on the list of persons precluded from disclosing grand jury matters. Viewed in conjunction with Rule 6(e)(2)(A)'s admonition that \"[n]o obligation of secrecy may be imposed on any person except in accordance with Rule 6(e)(2)(B),\" the Rule by its plain terms does not obligate grand jury witnesses to maintain the secrecy of the proceedings or their testimony. An Advisory Committee note to the original adoption of Rule 6(e) supports this reading, stating that \"[t]he rule does not impose any obligation of secrecy on witnesses.\" According to the note, such an obligation would constitute \"an unnecessary hardship [that] may lead to injustice if a witness is not permitted to make a disclosure to counsel or to an associate.\" Court decisions generally have been in accord, although a handful of courts have taken the position that an order requiring a witness to refrain from discussing grand jury matters may be entered in rare circumstances when justified by a compelling need. Courts taking this position have relied on \"inherent judicial power\" to \"protect the integrity of the grand jury process,\" which the adoption of Rule 6(e) ostensibly did not undermine.", "Though a witness is ordinarily free to disclose grand jury information of which he is aware, witnesses cannot be compelled to disclose such information to investigation targets or in separate proceedings. Relatedly, courts have recognized that federal prosecutors may request (but not demand) that witnesses refrain from disclosing the existence of a subpoena or their testimony.", "Because Rule 6(e)'s language suggests that the list of persons prohibited from disclosing grand jury matters is exclusive, unlisted third parties who obtain grand jury information\u2014even from persons obligated to maintain grand jury secrecy\u2014are also generally not required to keep the information secret. That said, a court authorizing a disclosure under a Rule 6(e) exception may impose a condition that further disclosures not be made, subject to First Amendment limitations.", "At least one court has observed that courts themselves are not included on the list of those who must refrain from \"disclos[ing] a matter occurring before the grand jury\" under Rule 6(e)(2)(B), interpreting this omission to mean that courts have inherent authority to release grand jury materials regardless of whether a textual exception to grand jury secrecy in Rule 6(e) otherwise applies. This judicial \"inherent authority\" exception, which the Supreme Court has never endorsed, is discussed in more detail infra in the section addressing exceptions to grand jury secrecy."], "subsections": []}, {"section_title": "Disclosure of Matters Occurring Before the Grand Jury", "paragraphs": ["Rule 6(e) prohibits only \"disclosure of matters occurring before the grand jury.\" Accordingly, the Rule is not contravened unless something is \"disclos[ed],\" meaning that a person \"with information about the workings of the grand jury . . . [has] reveal[ed] such information to other persons who are not authorized to have access to it under the Rule.\" Thus, mere use of grand jury information by a person who has already been legitimately exposed to it does not constitute \"disclosure\" within the meaning of Rule 6(e).", "A more difficult issue is determining what types of information or materials fall within the meaning of \"matters occurring before the grand jury.\" Though not defined in Rule 6(e), courts have tended to view the phrase as broadly encompassing anything that might reveal what took place in the grand jury room. Clear examples include transcripts of proceedings and witness testimony, as well as written \"summaries\" or \"discussions\" of the proceedings or evidence presented. Information about the composition and focus of the grand jury\u2014including the identities of witnesses and jurors, the targets and subjects of the investigation, and even the dates and times a grand jury is in session \u2014are also covered by the Rule.", "Particular challenges arise in the context of documents such as business records that have been subpoenaed or considered by the grand jury but do not on their face relate to the grand jury itself. In general, \"[t]here is no per se rule against disclosure of any and all information which has reached the grand jury chambers,\" and thus \"[t]he mere fact that information [or documents have] been presented to the grand jury\" does not bar independent disclosure in other proceedings. For example, an agency or litigant may seek corporate records directly from a company, and the company has no basis to claim that the records are insulated from disclosure simply because a federal grand jury separately has subpoenaed them.", "However, utilizing various (and sometimes conflicting) tests, courts have acknowledged that independently generated documents presented to a grand jury may sometimes constitute \"matters occurring before the grand jury\" in a particular case if the context of a request would make production revelatory of the substance of the grand jury's investigation. For instance, a request for \"documents subpoenaed by the grand jury\" might impermissibly call for disclosure of grand jury matters, as production \"would reveal to the requester that [the documents] had been subpoenaed\" and potentially suggest the focus of the grand jury's investigation. By contrast, a request for documents presented to a grand jury, when coupled with broader requests for \"all evidence\" or documents related to a factual matter, would not necessarily call for disclosure of grand jury matters if production would leave the requester unable to \"determine which documents,\" if any, \"had been submitted to the grand jury.\" The framing of a particular request for documents, and the context in which the request is made, will thus impact whether documents presented to or obtained by a grand jury are considered \"matters occurring before\" it within the meaning of Rule 6(e).", "One court has addressed the difficulty inherent in parsing when and to what extent documents subpoenaed or reviewed by a grand jury constitute grand jury \"matters\" by applying a presumption that \"confidential documentary information not otherwise public obtained by the grand jury by coercive means\" is covered by the Rule. A party seeking disclosure may rebut the presumption, however, \"by showing that the information is public or was not obtained through coercive means or that disclosure would be otherwise available by civil discovery and would not reveal the nature, scope, or direction of the grand jury inquiry.\" In practice, then, the showing required to rebut the presumption may result in an inquiry similar to that employed by other courts.", "In addition to the substance of grand jury matters themselves (e.g., transcripts of testimony), Rule 6(e) protects against the indirect revelation of grand jury matters in ancillary proceedings and filings, such as hearings or orders addressing claims of privilege or efforts to quash a subpoena. The Rule provides that the court must \"close any hearing\" and keep \"[r]ecords, orders, and subpoenas relating to grand-jury proceedings\" under seal \"to the extent and as long as necessary\" to prevent unauthorized disclosure of a grand jury matter. Arguing that the public ordinarily has a First Amendment or common law right of access to criminal proceedings, members of the media have sometimes sought to obtain sealed records and orders notwithstanding these provisions, but multiple circuits have rejected such efforts.", "The prohibition on disclosure of matters occurring before a grand jury is indefinite\u2014in other words, the veil of secrecy is not lifted merely because a grand jury has completed its investigation and either issued an indictment or declined to do so. That said, because some of the \"interests\" underlying the rule of secrecy are \"reduced\" once a grand jury's work is completed, the passage of time may be relevant to whether a court will authorize disclosure pursuant to a Rule 6(e) exception in a particular case."], "subsections": []}]}, {"section_title": "Exceptions to Grand Jury Secrecy", "paragraphs": ["Federal Rule of Criminal Procedure 6(e)(3) contains a series of \"[e]xceptions\" to the general rule of grand jury secrecy that permit disclosure of grand jury matters to specified persons or in certain situations. The exceptions fall into two general categories: (1) disclosures that may be made without judicial authorization (though notice must in some cases be provided), and (2) disclosures that may be made only upon order of the court. Certain statutes and Federal Rules of Criminal Procedure beyond Rule 6(e) also permit disclosure of grand jury information in particular circumstances."], "subsections": [{"section_title": "Disclosures Without Judicial Authorization", "paragraphs": [], "subsections": [{"section_title": "Disclosure to a Government Attorney", "paragraphs": ["Rule 6(e)(3)(A)(i) provides that disclosure of a grand jury matter \"other than the grand jury's deliberations or any grand juror's vote\" may be made without court authorization to \"an attorney for the government for use in performing that attorney's duty.\" The term \"attorney for the government\" is defined elsewhere in the Federal Rules of Criminal Procedure as, in relevant part, (1) the Attorney General \"or an authorized assistant\"; (2) a United States attorney or an authorized assistant; or (3) \"any other attorney authorized by law to conduct proceedings under these rules as a prosecutor.\" Thus, an \"attorney for the government\" under Rule 6(e)(3)(A)(i) encompasses attorneys within the United States Department of Justice, as well as local or federal agency attorneys that have been appointed to act as federal prosecutors. Attorneys outside the Department of Justice who have not been so appointed, however, are excluded.", "Concerning the Rule's limitation that disclosure to a government attorney be \"for use in performing that attorney's duty,\" an Advisory Committee note states that attorneys are entitled to disclosure \"inasmuch as they may be present in the grand jury room during the presentation of evidence.\" The Supreme Court accordingly has determined that disclosure under the Rule \"is limited to use by those attorneys who conduct the criminal matters to which the materials pertain.\" Accordingly, \"every attorney (including a supervisor) who is working on a [particular] prosecution,\" but not a related civil matter, \"may have access to grand jury materials\" underlying that prosecution. And at least one court has taken a more expansive view, reading the Rule as permitting disclosure to \"government attorneys conducting other criminal matters to which the materials disclosed are relevant,\" even if such attorneys are located in a different jurisdiction than the empaneled grand jury.", "Once an attorney for the government has access to grand jury materials, he may use the materials as needed for the continued investigation and prosecution of the violations of federal criminal law to which they pertain, including in preparation for trial or during the examination of witnesses. Disclosures not connected to such violations of federal criminal law, however, are prohibited."], "subsections": []}, {"section_title": "Disclosure to Government Personnel", "paragraphs": ["Under Rule 6(e)(3)(A)(ii), disclosure of a grand jury matter, excluding grand jury deliberations and votes, may be made to \"any government personnel\u2014including those of a state, state subdivision, Indian tribe, or foreign government\u2014that an attorney for the government considers necessary to assist in performing that attorney's duty to enforce federal criminal law.\" This provision was added to Rule 6(e) in 1977 to address the need of Justice Department attorneys \"for active assistance from outside personnel\" in the course of grand jury investigations, including \"investigators from the F[ederal Bureau of Investigation], I[nternal Revenue Service], and other law enforcement agencies[,]\" without the \"time-consuming requirement of prior judicial interposition.\"", "The term \"government personnel\" has been interpreted to extend to non-attorney government employees such as law enforcement agents and subject-matter experts, as well as agency attorneys outside the Department of Justice who, because they have not been authorized to act as federal prosecutors, would not be entitled to disclosure under Rule 6(e)(3)(A)(i). One question that has arisen is the extent to which employees of private entities that are controlled by or connected to the government may be considered \"government personnel.\" The few cases addressing this question have tended to find that purely private entities and contractors are excluded from the Rule, though a \"quasi-governmental entity\" that has both public and private attributes may not be, \"depending on the facts of the situation.\"", "As the text of the Rule indicates, government personnel to whom disclosure of information is made may use that information only to assist government attorneys in enforcing federal criminal law. Resultantly, disclosure to government personnel is constrained to an equal degree as disclosure to government attorneys under Rule 6(e)(3)(A)(i), that is, for use in the investigation and prosecution of criminal law violations\u2014but not related civil matters\u2014to which the information pertains.", "To balance the benefit of disclosure to government personnel as needed against the risk that secrecy will thereby be compromised, Rule 6(e)(3)(B) requires prosecuting attorneys to \"promptly\" provide the court that impaneled the grand jury with the names of all government personnel to whom a disclosure is made under Rule 6(e)(3)(A)(ii). Though the text of this provision suggests that the names need only be provided after disclosure, the legislative history and an Advisory Committee note \"contemplate[] that the names of such personnel will generally be furnished to the court before disclosure is made to them.\"", "The attorney who provides the court with the names of government personnel to whom disclosure has been made must also \"certify\" that he has \"advised\" those personnel \"of their obligation of secrecy\" under Rule 6(e). Added in 1985, this requirement stemmed from concern that, particularly with respect to state and local government personnel who \"otherwise would likely be unaware of th[e] obligation[,]\" disclosure could result in \"inadvertent breach[es] of grand jury secrecy\" if personnel were not expressly advised to keep the information secret."], "subsections": []}, {"section_title": "Disclosure to Another Grand Jury", "paragraphs": ["Rule 6(e)(3)(C) permits an attorney for the government to disclose \"any grand jury-matter to another federal grand jury\" without court authorization. The Advisory Committee note to the Rule's 1983 addition reflects practical reasons for the exception: courts already \"permitted such disclosure in some circumstances\" despite the absence of a specific provision to that effect, and secrecy would \"be protected almost as well by the safeguards at the second grand jury proceeding . . . as by judicial supervision of the disclosure of such materials.\" In other words, when materials from one grand jury are disclosed to a second grand jury, \"secrecy is not thereby compromised, since the second grand jury is equally under Rule 6's requirement of secrecy.\"", "Courts have held that the exception allows grand jury materials to be transferred not only to \"successor\" grand juries within the same judicial district, but to grand juries in other jurisdictions pursuing separate investigations as well."], "subsections": []}, {"section_title": "Disclosure of Intelligence and National Security Information", "paragraphs": ["Two of the most recent, and unique, exceptions to grand jury secrecy in Rule 6(e) permit disclosure of certain information to specified government officials based on the subject matter of that information. First, as part of the USA PATRIOT Act of 2001, Congress amended Rule 6(e) to allow an attorney for the government to disclose any grand jury matter involving foreign intelligence , counterintelligence , or foreign intelligence information to \"any federal law enforcement, intelligence, protective, immigration, national defense, or national security official to assist the official receiving the information in the performance of that official's duties.\" The terms \" foreign intelligence \" and \" counterintelligence \" are respectively defined in a separate statute as", "information relating to the capabilities, intentions, or activities of foreign governments or elements thereof, foreign organizations, or foreign persons, or international terrorist activities,\" and \"information gathered, and activities conducted, to protect against espionage, other intelligence activities, sabotage, or assassinations conducted by or on behalf of foreign governments or elements thereof, foreign organizations, or foreign persons, or international terrorist activities.", "The Rule itself defines the term \" foreign intelligence informati on \" as", "(a) information, whether or not it concerns a United States person, that relates to the ability of the United States to protect against\u2014", "\u2022 actual or potential attack or other grave hostile acts of a foreign power or its agent;", "\u2022 sabotage or international terrorism by a foreign power or its agent; or", "\u2022 clandestine intelligence activities by an intelligence service or network of a foreign power or by its agent; or", "(b) information, whether or not it concerns a United States person, with respect to a foreign power or foreign territory that relates to\u2014", "\u2022 the national defense or the security of the United States; or", "\u2022 the conduct of the foreign affairs of the United States.", "The Intelligence Reform and Terrorism Prevention Act of 2004 added another exception, allowing an attorney for the government to disclose any grand jury matter \"involving, within the United States or elsewhere, a threat of attack or other grave hostile acts of a foreign power or its agent, a threat of domestic or international sabotage or terrorism, or clandestine intelligence gathering activities by an intelligence service or network of a foreign power or by its agent\" to \"any appropriate federal, state, state subdivision, Indian tribal, or foreign government official, for the purpose of preventing or responding to such threat or activities.\"", "As commentators have noted, these contemporary exceptions are fairly expansive in that they allow prosecutors to unilaterally disclose grand jury materials to persons not involved in the prosecution of federal crimes based on definitions that could arguably encompass a \"broad range of information.\" In this sense, the exceptions appear to be a significant departure from the traditional practice of strictly limiting dissemination of grand jury materials. In recognition of the potentially expansive application of the new exceptions, the Rule stipulates that any official to whom a disclosure is made \"may use the information only as necessary in the conduct of that person's official duties subject to any limitations on the unauthorized disclosure of such information.\" Additionally, with respect to state, local, Indian tribal, and foreign government officials, Rule 6(e) provides that they may \"use the information only in a manner consistent with any guidelines issued by the Attorney General and the Director of National Intelligence.\" Finally, within a \"reasonable time after\" any disclosure is made under Rule 6(e)(3)(D), an attorney for the federal government must file a sealed notice with the court indicating that \"such information was disclosed\" and identifying \"the departments, agencies, or entities to which the disclosure was made.\"", "Despite the facial breadth of the recently added exceptions, it does not appear that they have yet been subject to substantial judicial scrutiny or interpretation. At least one commentator, however, has anticipated that a constitutional challenge is inevitable, given the degree to which the exceptions impact grand jury secrecy (and thus potentially undermine the Fifth Amendment's grand jury requirement)."], "subsections": []}]}, {"section_title": "Disclosures with Judicial Authorization", "paragraphs": [], "subsections": [{"section_title": "Disclosure Related to a Judicial Proceeding", "paragraphs": ["Federal Rule of Criminal Procedure 6(e)(3)(E)(i) permits a court to authorize disclosure of a grand jury matter \"preliminarily to or in connection with a judicial proceeding.\" This exception, which has been part of the Rule since its inception in 1946, is one of the most frequently litigated.", "An oft-cited definition of the term \"judicial proceeding\" comes from an early U.S. Court of Appeals for the Second Circuit opinion: \"[A]ny proceeding determinable by a court, having for its object the compliance of any person, subject to judicial control, with standards imposed upon his conduct in the public interest, even though such compliance is enforced without the procedure applicable to the punishment of crime.\" Criminal and civil litigation qualify as judicial proceedings, but so too may quasi-judicial matters such as impeachment proceedings and certain disciplinary hearings. Purely administrative or nonjudicial investigations or hearings, on the other hand, typically do not qualify.", "One question that has arisen is whether the grand jury investigation itself is a \"judicial proceeding\" such that a court may permit materials generated by the investigation to be disclosed for use in connection with those proceedings. Answering this question in the affirmative would, for example, allow an expert witness to review grand jury material prior to testifying before the grand jury. Some courts have concluded either that a grand jury investigation is a judicial proceeding for these purposes or that it is \"preliminary\" to a judicial proceeding\u2014the criminal trial that would follow indictment. Consistent with this approach, said criminal trial generally has been viewed as a judicial proceeding permitting disclosure of materials from the underlying grand jury, though there is authority to the contrary. Conversely, courts have rejected the argument that a proceeding instituted primarily or solely to obtain grand jury materials can itself be considered the \"judicial proceeding\" needed to justify disclosure, recognizing that such a reading of the exception would be circular and \"rule-swallowing.\"", "With respect to the \"preliminarily to or in connection with\" requirement, the Supreme Court has said that the relevant inquiry is the use for which the grand jury information is being requested: \"the Rule contemplates only uses related fairly directly to some identifiable litigation, pending or anticipated.\" Thus, \"it is not enough to show that some litigation may emerge from the matter in which the material is to be used, or even that litigation is . . . likely to emerge . . . . If the primary purpose of disclosure is not to assist in preparation or conduct of a judicial proceeding, disclosure . . . is not permitted.\" What this limitation on the exception means is that a request for grand jury materials pursuant to a preliminary inquiry or investigation does not come within the scope of the exception where the prospect of a judicial proceeding stemming from the investigation is merely speculative. That said, an administrative or other investigative inquiry may be considered \"preliminar[y]\" to a judicial proceeding if \"a clear pathway exists\" between that process \"and the judicial process and the ultimate judicial role is a very substantial one.\""], "subsections": []}, {"section_title": "Disclosure to Defendant on Showing of Ground to Dismiss Indictment", "paragraphs": ["Rule 6(e)(3)(E)(ii) permits a court to order disclosure \"at the request of a defendant who shows that a ground may exist to dismiss the indictment because of a matter that occurred before the grand jury.\" Along with the \"judicial proceeding\" exception, this exception is the only other mechanism for seeking court authorization to disclose grand jury materials that has been in the Rule since its inception in 1946.", "There is a strong \"presumption of regularity\" in grand jury proceedings, and thus a defendant requesting court authorization for disclosure under this exception carries a heavy burden in seeking to make the requisite showing. First, dismissal of an indictment itself is a remedy only for misconduct before the grand jury that \"amounts to a violation of one of those 'few, clear rules which were carefully drafted and approved by [the Supreme] Court and by Congress to ensure the integrity of the grand jury's functions'\"\u2014such as violations of Rule 6 or certain statutory provisions establishing prosecutorial standards of conduct. For example, indictment dismissal may be warranted where the prosecutor secures the indictment by actively misleading the grand jury about key evidence, but mere failure to present evidence favorable to the defendant will not justify dismissal.", "Second, to make the requisite showing that one of the above-mentioned grounds exists, the defendant must do more than make \"conclusory or speculative allegations of misconduct.\" Rather, the defendant must identify a factual basis for inferring that misconduct warranting indictment dismissal has occurred. At least one court has described this as an \"exceedingly high burden.\" For this reason, courts rarely grant requests by defendants under Rule 6(e)(3)(E)(ii), as \"a defendant often can make the necessary showing only with the aid of the [very] materials he seeks to discover.\" Defendants have, at times, pointed out this conundrum, but courts have not been particularly sympathetic."], "subsections": []}, {"section_title": "Disclosure to a Foreign Court or Prosecutor", "paragraphs": ["Under Rule 6(e)(3)(E)(iii), a court \"at the request of the government\" may authorize disclosure of a grand jury matter \"when sought by a foreign court or prosecutor for use in an official criminal investigation.\" This provision was added to the Rule as part of the Intelligence Reform and Terrorism Prevention Act of 2004, and appears to have been intended to address uncertainty as to whether a foreign criminal investigation could be considered \"preliminar[y] to . . . a judicial proceeding\" within the meaning of that separate exception. With the 2004 addition, the Rule now expressly recognizes that government attorneys may seek court authorization to disclose materials for use in the course of a foreign criminal investigation, rather than having to separately subpoena the same documents in order to provide them to foreign prosecuting authorities."], "subsections": []}, {"section_title": "Disclosure for State, Foreign, or Military Law Enforcement", "paragraphs": ["Closely related to the exception for court-authorized disclosures to foreign courts and prosecutors, Rule 6(e)(3)(E)(iv) permits a court, \"at the request of the government\" and upon a showing by the government that a grand jury matter \"may disclose a violation of State, Indian tribal, or foreign criminal law,\" to order disclosure of a grand jury matter \"to an appropriate state, state-subdivision, Indian tribal, or foreign government official for the purpose of enforcing that law.\" Rule 6(e)(3)(E)(v) extends the same exception to \"an appropriate military official\" for enforcement of \"military criminal law under the Uniform Code of Military Justice.\"", "Before these exceptions were adopted in 1985, non-federal law enforcement officials could obtain federal grand jury materials for purposes other than federal law enforcement only with court authorization pursuant to the exception permitting disclosure \"preliminarily to or in connection with a judicial proceeding.\" The judicial proceeding exception proved to be \"of limited practical value\" in such circumstances, however, given the requirement that there be some \"identifiable litigation\" to which the disclosure related; where state or other non-federal officials were not already aware of the facts tending to show a violation of the relevant jurisdiction's criminal law, there would likely be no \"pending or anticipated\" judicial proceeding prior to disclosure that would justify such disclosure under the \"judicial proceeding\" exception.", "According to an Advisory Committee note, \"[t]his inability lawfully to disclose evidence of a [non-federal] criminal violation\u2014evidence legitimately obtained by the grand jury\"\u2014was perceived as \"an unreasonable barrier to the effective enforcement\" of criminal law across jurisdictions. Thus, pursuant to the exceptions, courts may now permit disclosure to a non-federal official \"when an attorney for the government so requests and makes the requisite showing.\" Department of Justice guidelines require that federal prosecutors request and receive internal authorization to apply for a court order under these exceptions before doing so.", "With respect to which officials are \"appropriate\" within the meaning of the Rule, the Department of Justice takes the position that the term \"shall be interpreted to mean any official whose official duties include enforcement of the . . . criminal law whose violation is indicated in the matters for which disclosure authorization is sought.\" The few court decisions construing the term appear to take a similar view."], "subsections": []}, {"section_title": "Courts' Inherent Authority to Order Disclosure", "paragraphs": ["The Supreme Court has said that where a statute \"explicitly enumerates certain exceptions to a general prohibition, additional exceptions are not to be implied, in the absence of evidence of a contrary legislative intent.\" As discussed above, Rule 6(e) provides that a matter occurring before a grand jury must not be disclosed \"[u]nless these rules provide otherwise.\" Rule 6(e) then explicitly \"provide[s] otherwise\" by granting authority to courts to order disclosure of grand jury matters in particular, enumerated circumstances. Thus, based solely on Rule 6(e)'s text and general principles of statutory construction, it would seem that courts can authorize disclosure of grand jury matters only if one of the express exceptions in Rule 6(e) applies. Some courts have appeared to agree with this proposition, at least in the abstract.", "Nevertheless, a number of federal courts have determined that the list of court-authorized exceptions in Rule 6(e) is not exclusive, and that courts have \"inherent authority\" to permit disclosure of grand jury information and materials in circumstances not expressly provided for in the Rule. Courts in this camp have pointed to various justifications for recognizing such extra-textual judicial authority to breach grand jury secrecy, including that", "courts have always had supervisory authority over the grand juries that they impanel, which historically included the discretion to determine when grand jury materials should be released; the advent of the Federal Rules of Criminal Procedure did not eliminate a court's supervisory authority as a general matter, meaning that courts may still take certain actions that are consistent with, though not explicitly authorized by, the Rules; Rule 6(e)(2)(B)'s list of persons who are prohibited from disclosing a matter occurring before the grand jury does not include the court itself; Rule 6(e)(3)(E)'s list of circumstances in which a court \"may\" authorize disclosure does not indicate that those circumstances are exclusive, and the presence of limiting language elsewhere in Rule 6 suggests its absence in (e)(3)(E) was intentional; and the history of the Rules and Advisory Committee notes indicates that Rule 6(e) was meant to be responsive to and reflective of common exceptions that courts developed of their own volition over time.", "Fearing that an exception to grand jury secrecy not textually constrained could undermine secrecy writ large, courts recognizing their \"inherent authority\" to release grand jury materials in situations not governed by Rule 6(e) have generally cabined the exercise of such authority to \"special\" or \"exceptional\" circumstances. Though a determination that such circumstances exist is \"highly discretionary and fact sensitive,\" factors that courts have considered include", "the identity of the party seeking disclosure; whether the defendant to the grand jury proceeding or the government opposes the disclosure; why disclosure is being sought in the particular case; what specific information is being sought for disclosure; how long ago the grand jury proceedings took place; the current status of the principals of the grand jury proceedings and that of their families; the extent to which the desired material\u2014either permissibly or impermissibly\u2014has been previously made public; whether witnesses to the grand jury proceedings who might be affected by disclosure are still alive; and the additional need for maintaining secrecy in the particular case in question.", "The circumstances in which courts have most often ordered disclosure of grand jury materials using their inherent authority have involved matters of significant public or historical interest related to grand jury proceedings that have long since concluded. For instance, one district court in the District of Columbia recently unsealed certain dockets associated with the 1998 investigation into the relationship between former President Clinton and a White House intern, citing the length of time that had elapsed and the substantial public interest in the information.", "Although the trend appears to be in favor of recognizing a court's extra-textual inherent authority to release grand jury materials, at least in exceptional circumstances, there is some reason to question whether the Supreme Court would agree that this authority exists if faced squarely with the question. Setting aside the text of Rule 6(e) and the general principles discussed above, the Supreme Court in recent years has expressed \"reluctan[ce] to invoke the judicial supervisory power as a basis for prescribing modes of grand jury procedure,\" as the grand jury's status as an independent constitutional fixture \"suggest[s] that any power federal courts may have to fashion\" such procedures \"is a very limited one[.]\" These statements have led one treatise to refer to the existence of judicial inherent authority to release grand jury materials beyond the terms of Rule 6(e) as \"exceedingly doubtful.\""], "subsections": []}, {"section_title": "Showings Required for Court Authorization to Disclose Grand Jury Matters", "paragraphs": ["Although Rule 6(e) enumerates the contexts in which a court is authorized to order disclosure of grand jury matters, courts have had to grapple with determining what standard governs the exercise of a court's discretion to order disclosure in a particular case\u2014that is, the showing a requester must make in order for a court to agree that releasing grand jury material is warranted under one of the exceptions for court-authorized disclosure in Rule 6(e).", "The Supreme Court has said that \"disclosure is appropriate only in those cases where the need for it outweighs the public interest in secrecy,\" and \"the burden of demonstrating this balance\" rests on the party seeking disclosure. Put differently, the secrecy of grand jury proceedings \"must not be broken except where there is a compelling necessity,\" and the \"instances when that need will outweigh the countervailing policy\" of secrecy \"must be shown with particularity\" by the requester.", "From these general principles has emerged the standard that Rule 6(e) \"require[s] a strong showing of particularized need for grand jury materials before any disclosure will be permitted.\" The Supreme Court announced the contours of this so-called \"particularized need\" standard in the context of the \"judicial proceeding\" exception to Rule 6(e), explaining that \"[p]arties seeking grand jury transcripts under Rule 6(e) must show that the material they seek is needed to avoid a possible injustice in another judicial proceeding, that the need for disclosure is greater than the need for continued secrecy, and that their request is structured to cover only material so needed.\"", "When the cases describing the \"particularized need\" standard were decided, the only Rule 6(e) exceptions permitting a court to authorize disclosure of grand jury matters were (1) the \"judicial proceeding\" exception, and (2) the exception for a defendant upon showing grounds to dismiss the indictment. As the number of Rule 6(e) exceptions permitting court-authorized disclosure has grown over time, however, one question that has arisen is whether and how the Supreme Court's \"particularized need\" standard applies outside of the \"judicial proceeding\" context in which it was announced. Courts have typically recognized that the general requirement imposed on a requester to show a need for the grand jury materials at issue extends to any exception authorizing court-ordered disclosure. This requirement, whether given the appellation \"particularized need\" or not, will obligate a person seeking court authorization for disclosure to show some factual exigency outweighing the interest in secrecy, which will vary depending on the precise exception being invoked. Thus, for example and as discussed above, a defendant seeking an order authorizing disclosure under Rule 6(e)(3)(E)(ii) must be able to present a factual basis for inferring that misconduct that would warrant dismissal of the indictment has occurred, and a government attorney seeking authorization under Rule 6(e)(3)(E)(iv) must show that the grand jury matter for which disclosure is sought may disclose a violation of State, Indian tribal, or foreign criminal law. Likewise, courts addressing whether to authorize release of grand jury materials pursuant to their inherent authority engage in \"a nuanced and fact-intensive assessment\" of whether the need for the materials is greater than the need to maintain secrecy.", "Courts considering whether a \"particularized need\" exists in a given case have emphasized that although the standard is \"highly flexible,\" a showing of \"mere relevance, economy, and efficiency will not suffice\" to meet it. Thus, the inquiry often focuses on the contemplated use of the materials at issue and whether alternative channels exist to obtain them. In the context of judicial proceedings, the need to impeach or refresh the recollection of a witness is a well-recognized and valid need, so long as the need is \"real\" and not merely a \"bald assertion[.]\" Other needs that courts have found valid include (1) to substantiate malicious prosecution allegations based on prosecutorial and witness misconduct; (2) to rehabilitate a witness at trial after he has been impeached on cross-examination; and (3) to avoid stymieing an investigation of official improprieties. On the other hand, the mere desire to discover what evidence the grand jury considered has been held to be insufficient. ", "Consistent with the flexible and fact-dependent nature of the \"particularized need\" inquiry, the Supreme Court has said that \"as the considerations justifying secrecy become less relevant, a party asserting a need for grand jury transcripts will have a lesser burden in showing justification.\" Thus, factors courts consider in weighing need against the interest in secrecy may include (1) the nature of the materials sought; (2) whether the requester is a government official or a private party; (3) the time that has elapsed between the grand jury proceedings and the request for disclosure; and (4) whether, in the case of witness testimony or documents, the witness objects to disclosure."], "subsections": []}]}, {"section_title": "Disclosures Authorized by Another Statute or Rule", "paragraphs": ["Despite the general presumption of grand jury secrecy established by Federal Rule of Criminal Procedure 6(e), other federal statutes and procedural rules sometimes permit (or even mandate) disclosure of grand jury information in particular circumstances. These statutes and rules are explicit in their limited retraction of grand jury secrecy, as they must be, for the Supreme Court has made clear that it \"will not infer\" that Congress has exercised its power to modify the secrecy requirement unless Congress has \"affirmatively express[ed] its intent to do so.\" ", "First, Rule 6(e) itself explicitly cross-references 18 U.S.C. \u00a7 3322, part of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), which authorizes government attorneys and personnel who are privy to grand jury information to disclose that information, without a court order, to any other government attorney for use in enforcing the civil penalty provisions of FIRREA or \"in connection with any civil forfeiture provision of Federal law.\" In other words, in the specified circumstances, Section 3322 acts as a statutory exception to the rule that government attorneys and personnel may not disclose grand jury matters for use in separate civil proceedings without a court order. The statute also establishes other specific circumstances in which a court may order disclosure of grand jury matters: during an investigation of a \"banking law violation,\" a court may direct disclosure \"to identified personnel of a Federal or State financial institution regulatory agency\" for use \"in relation to any matter within the jurisdiction of such regulatory agency\" or \"to assist an attorney for the government to whom matters have been disclosed\" under the statute.", "In addition, Federal Rule of Criminal Procedure 16 requires that a criminal defendant be given access to any grand jury testimony he has given relating to the charged offense. With respect to the grand jury testimony of other witnesses, Federal Rule of Criminal Procedure 26.2 and the Jencks Act require that such testimony be provided to the defendant only after the witness in question has testified on direct examination at trial. Disclosure is limited to grand jury testimony that \"relate[s] to the subject matter of the [trial] testimony of the witness.\" The purpose of these limitations is to balance a defendant's right to confront his accusers using information that may impeach their testimony with the need to protect government files \"from unnecessary and vexatious fishing expeditions by defendants.\""], "subsections": []}]}, {"section_title": "Disclosure Mechanics and Review", "paragraphs": ["Federal Rules of Criminal Procedure 6(e)(3)(F) and (G) address the procedures for seeking court-authorized disclosure of grand jury materials for use in connection with another judicial proceeding. A party seeking disclosure must file a petition in the district \"where the grand jury convened.\" If the petition is filed by \"the government,\" the court may\u2014but is not required to\u2014hear the matter ex parte . Otherwise, the petitioner must provide notice of the petition to (1)\u00a0an attorney for the government, (2) the parties to the judicial proceeding for which disclosure of the grand jury materials is sought, and (3) \"any other person whom the court may designate.\" The court must \"afford a reasonable opportunity\" to these persons \"to appear and be heard.\"", "Challenges arise when the judicial proceeding for which grand jury materials are sought is pending in a different judicial district than the district where the grand jury convened, as the latter court may be ill-suited to decide the disclosure question. The Supreme Court addressed this situation in Douglas Oil Co. v. Petrol Stops Northwest , and the Court's conclusions have essentially been adopted in Rule 6(e)(3)(G). The Rule provides that unless the court in which the petition is filed\u2014that is, the court in the district where the grand jury convened\u2014\"can reasonably determine whether disclosure is proper,\" it must transfer the matter to the district where the separate judicial proceeding is pending for determination. This provision reflects \"a preference for having the disclosure issue decided by the grand jury court,\" while recognizing that that court may be unable to reach a decision because it \"will have no first-hand knowledge of the litigation in which the transcripts allegedly are needed, and no practical means by which such knowledge can be obtained.\"", "To facilitate resolution by the transferee court, the grand jury court must transmit to the transferee court \"the material sought to be disclosed, if feasible, and a written evaluation of the need for continued grand jury secrecy.\" The first requirement \"facilitate[s] timely disclosure if it is thereafter ordered\" and assists the transferee court \"in deciding how great the need for disclosure actually is.\" The Rule does not require transmittal of the grand jury material if it is impracticable to do so, as, for example if the material is \"exceedingly voluminous.\" The requirement of a written evaluation of the need for continuing secrecy recognizes that the grand jury court \"is in the best position to assess the interest in continued grand jury secrecy in the particular instance,\" and it is thus \"important that the court which will now have to balance that interest against the need for disclosure receive the benefit of the [grand jury] court's assessment.\"", "Upon transfer, the same persons specified in Rule 6(e)(3)(F) must be given a reasonable opportunity to appear and be heard. The transferee court then makes the ultimate decision whether to disclose \"based on its own determination of the need for disclosure and the transferring court's evaluation of the competing need for continued secrecy.\"", "Generally, a court's order regarding disclosure under Rule 6(e) is immediately appealable. Because the determination of whether \"particularized need\" exists to justify disclosure in a given case is highly fact-specific and discretionary, an appellate court's review will be under the deferential \"abuse of discretion\" standard."], "subsections": []}, {"section_title": "Establishing and Remedying Violations of Grand Jury Secrecy", "paragraphs": ["A knowing violation of Rule 6, including the obligation of secrecy, \"may be punished as a contempt of court.\" Though not explicit in the Rule, courts have held that both criminal and civil contempt may be imposed, meaning that the remedy may include imprisonment, monetary sanctions, or equitable relief. In limited circumstances, an indictment may also be dismissed or evidence suppressed. For example, where the government unilaterally disclosed a defendant's grand jury testimony in a separate civil forfeiture proceeding to establish probable cause for seizure of the defendant's car, one court suggested that suppression of the testimony could be necessary to \"protect the integrity of the grand jury system.\"", "Courts disagree on whether the contempt provision of Rule 6 establishes a private right of action based on an alleged violation of grand jury secrecy.", "A party seeking one of the remedies noted above will be required to establish a prima facie case that a violation of grand jury secrecy has occurred. This showing will ordinarily require some basis to infer that the source of any leaked grand jury information was one prohibited under Rule 6(e), and the court may consider evidence submitted to rebut the allegation of wrongdoing. If a prima facie case is established, the court will hold an evidentiary hearing in which the alleged source of the unauthorized disclosure (typically the government) will bear the burden of \"attempt[ing] to explain its actions.\" For instance, the movants in one case made a prima facie showing that an independent counsel breached grand jury secrecy by submitting to the court \"various news articles indicating that information relating to grand jury proceedings or witnesses was obtained from sources associated with the\" independent counsel's office. The court thus recognized that the independent counsel would be called upon to attempt to rebut the inferences drawn from the news articles by submitting evidence (potentially including affidavits, documents, or live testimony) to show either that the information disclosed to the media did not constitute \"matters occurring before the grand jury\" or that the source of the information was not the government.", "An order denying a defendant's motion to dismiss the indictment based on a violation of Rule 6(e) is not immediately appealable, and any error may be considered harmless if the defendant is subsequently convicted."], "subsections": []}]}, {"section_title": "Grand Jury Secrecy and Congressional Oversight", "paragraphs": ["As the discussion of grand jury secrecy and Federal Rule of Criminal Procedure 6(e) above reflects, no exception to the general rule of secrecy explicitly authorizes disclosure of grand jury matters to Congress, either by agreement or pursuant to a congressional subpoena. Nevertheless, a few courts have addressed the applicability of Rule 6(e) and its exceptions to congressional requests for information, including in the course of committee investigations and preliminary to impeachment proceedings. At a minimum, these decisions indicate that Congress may be able to obtain grand jury materials by invoking a Rule 6(e) exception before a court under certain circumstances. Congress has also previously considered legislation that would have expressly permitted a court to authorize disclosure of grand jury matters to congressional committees, though the congressional-access provision ultimately did not become law.", "This section of the report addresses the circumstances in which Congress may obtain and disseminate grand jury materials under Rule 6(e) as it is presently construed; it then addresses legal issues to consider if Congress seeks to create a new Rule 6(e) exception for congressional committees."], "subsections": [{"section_title": "Congressional Investigative Authority", "paragraphs": ["Congress generally has broad authority to obtain information for oversight and investigative purposes. The power of Congress to conduct investigations is \"inherent in the legislative process,\" and such power is \"as penetrating and far-reaching as the potential power to enact and appropriate under the Constitution.\" As a corollary, the \"[i]ssuance of subpoenas .\u00a0.\u00a0.\u00a0has long been held to be a legitimate use by Congress of its power to investigate.\" Beyond subpoenas, Congress has exercised its power of inquiry through less formal means, such as by submitting letter requests for information.", "Congressional inquiries are broadly protected from judicial scrutiny. Provided that a committee's investigation is authorized and conducted pursuant to a valid legislative purpose, the Speech or Debate Clause of Article I of the Constitution creates \"an absolute bar to [judicial] interference.\""], "subsections": []}, {"section_title": "Application of Grand Jury Secrecy to Congressional Disclosures", "paragraphs": ["Pursuant to its broad authority to investigate, Congress has on several occasions sought grand jury information based on legislative interest in particular executive branch activities, either through letters or subpoenas to executive branch officials or through petitions filed with the court. Faced with these legislative efforts to obtain otherwise-secret grand jury materials, courts have reached conflicting conclusions as to whether the rule of grand jury secrecy enshrined in Rule 6(e) applies to disclosures to Congress at all.", "Relying on an apparently novel conception of the \"authority of Congress under the Speech or Debate Clause,\" two courts have held that Congress has a \"constitutionally independent legal right\" to obtain documents in furtherance of \"legitimate legislative activity\" regardless of whether the documents disclose matters occurring before a grand jury. First, in In re Grand Jury Investigation of Ven-Fuel , the chairman of the Subcommittee on Oversight and Investigations of the House of Representatives' Committee on Interstate and Foreign Commerce petitioned a district court for an order authorizing disclosure of documents presented to a federal grand jury in Florida in the course of its investigation of possible criminal conduct by a company called Ven-Fuel, Inc. The court recognized that the subcommittee's request implicated \"the powers and operations of the coequal, but interdependent, branches of the federal government . . . over theoretical fault lines,\" but concluded there was no \"direct conflict\" because the subcommittee's legitimate legislative purpose in seeking the documents meant that it was \"entitled to disclosure\" regardless of grand jury secrecy rules.", "Ten years after the decision in Ven-Fuel , the issue of congressional access to grand jury materials came before a different court in connection with the potential impeachment of a federal judge. The judge had been indicted for conspiring to solicit a bribe to influence a judicial decision, causing the House of Representatives to introduce a resolution calling for his impeachment. The resolution was referred to the House Committee on the Judiciary, which subsequently requested that the district court deliver all records of the grand jury that had indicted the judge. The judge objected, but the district court concluded that the committee was entitled to the records for several reasons, one of which was that, in accordance with Ven-Fuel , a \"congressional investigation relating to the impeachment of a federal judge\" falls within the authorized legislative activities \"embraced\" by the Speech or Debate Clause.", "Criticizing the decision in Ven-Fuel , other courts have sharply disagreed with the conclusion that the Speech or Debate Clause provides a basis to ignore grand jury secrecy when Congress is the requester. In In re Grand Jury Investigation of Uranium Industry , for instance, the Senate Judiciary Committee petitioned a court for an order authorizing disclosure of documents in the possession of the Department of Justice related to its investigation of the uranium industry. The committee's interest in the documents apparently stemmed from the fact that an expansive grand jury investigation conducted by the department's Antitrust Division had yielded no indictments. In seeking court-ordered disclosure of the grand jury materials, the committee asserted, among other things, that it was not required to establish the applicability of a Rule 6(e) exception or make a showing of particularized need because the Speech or Debate Clause entitled it to the materials. The court, however, considered \"the suggestion that Rule 6(e) does not apply to disclosures to Congress\" to be \"[un]acceptable.\" The court noted that Rule 6(e) \"contains no reservations in favor of Congress\" and rejected the Ven-Fuel court's suggestion that the Speech or Debate Clause may be \"used as a sword to enable Congress to penetrate an otherwise secret function of one of the other branches.\" While, in the court's view, the Clause would protect Congress from collateral interference if it were attempting to \"acquire materials which it has a legal right to obtain,\" the Clause would not sanction expansion of Congress's legal rights \"to manufacture a new right to obtain grand jury materials\" that could be affirmatively employed.", "As the court in Uranium Industry recognized, the Ven-Fuel decision's reliance on the Speech or Debate Clause as a font of constitutional authority permitting congressional access to grand jury materials finds little support in the broader case law on the Clause. Though the Clause functions to protect congressional activity, including lawful use of the subpoena power, from judicial interference when such activity is challenged by a third party, courts have not viewed the Clause to constitute a sword that Congress may use to affirmatively seek judicial authorization for disclosure of information in the possession of a coordinate branch. That said, the extent to which the rule of grand jury secrecy applies more generally along the \"theoretical fault line[]\" that exists between executive branch activity and Congress's Article I investigative authority remains unsettled. It is worth noting in this regard that although Congress's power to obtain information for legitimate legislative purposes is broad, it is not limitless.", "Though no federal appellate courts have spoken directly to the issue, decisions addressing the now-lapsed independent counsel statute appear to lend some support to the position that Congress enjoys no special constitutional solicitude in obtaining otherwise-secret grand jury materials. That statute required a duly appointed independent counsel to file a pre-termination \"final report\" with the court \"setting forth fully and completely a description of the work of the independent counsel,\" and the statute permitted the court to release \"to the Congress, the public, or any appropriate person, such portions of [the] report . . . as the division of the court considers appropriate.\" In several decisions considering whether to authorize such release of independent counsel reports to Congress and the public, the D.C. Circuit has recognized that Rule 6(e) applies to an independent counsel, meaning that \"any release of grand jury material\" in the final report authorized by statute \"falls within the protective provisions\" of the Rule unless an exception applies. Nevertheless, the court has read a provision of the independent counsel statute permitting a court to authorize disclosure of the report as establishing a \"judicial proceeding\" such that release of the report may fall within that exception to Rule 6(e). Pursuant to the exception, the court has proceeded to consider multiple factors in deciding whether to authorize the report's release. In other words, rather than finding an independent constitutional entitlement to grand jury material when faced with the question of whether to authorize the release to Congress of a report containing such material, the D.C. Circuit has simply applied Rule 6(e). It could be argued, however, that because these cases did not involve a congressional subpoena, the court was not faced with a direct exercise of Congress's constitutional power of inquiry. ", "The Department of Justice, for its part, agrees that it may release grand jury material to Congress in response to a subpoena only to the extent that disclosure is permitted under Rule 6(e). It takes the opposite position from the Ven-Fuel court with respect to separation-of-powers implications when Congress requests grand jury material: in the department's view, recognizing a congressional \"independent right of access\" to grand jury material would amount to \"legislative encroachment into the Executive's exclusive authority to enforce the law.\""], "subsections": []}, {"section_title": "Requests for Materials Not Constituting Grand Jury Matters", "paragraphs": ["Assuming that Rule 6(e) does apply to congressional requests, it is clear that Congress may nevertheless obtain materials that do not constitute \"matters occurring before the grand jury\" within the meaning of the Rule.", "Rule 6(e) protects from disclosure only those materials that \"tend to reveal some secret aspect of the grand jury's investigation.\" Thus, where a congressional committee has an interest in the subject matter of an ongoing grand jury investigation, the committee may be able to obtain most, if not all, of the same evidence the grand jury is considering from other sources.", "For instance, although the court in Ven-Fuel viewed Congress as constitutionally entitled to disclosure of documents that had been presented to a grand jury, the court also determined that the documents were not necessarily cloaked in secrecy under Rule 6(e) in the first instance. And while not all courts may take such a narrow view of grand jury \"matters,\" the principle that \"[t]here is no per se rule against disclosure of any and all information which has reached the grand jury chambers\" is a well-recognized one."], "subsections": []}, {"section_title": "Applicability of Rule 6(e) Exceptions to Congress", "paragraphs": ["Although no exception to grand jury secrecy explicitly encompasses disclosures to Congress, a few of the exceptions could apply to Congress in particular situations, which are discussed below in turn."], "subsections": [{"section_title": "Disclosures to Congress Without Judicial Authorization", "paragraphs": [], "subsections": [{"section_title": "Members of Congress as Government Personnel", "paragraphs": ["As discussed, Rule 6(e) permits disclosure of grand jury matters, excluding grand jury deliberations and votes, to \"any government personnel\u2014including those of a state, state subdivision, Indian tribe, or foreign government\u2014that an attorney for the government considers necessary to assist in performing that attorney's duty to enforce federal criminal law.\"", "The term \"government personnel\" is not defined in the Rule, and the provision's legislative history reflects a concern with information-sharing between federal prosecutors and federal law enforcement officers or agency subject-matter experts who were needed to understand certain issues in complex cases. That said, during the hearings on the proposed amendments that added the exception, there was some testimony indicating that the breadth of the term \"government personnel\" could mean that \"even Members of Congress or the military\" would be included.", "It is thus possible that a Member of Congress, or congressional staff, could be considered \"government personnel\" to whom disclosure could be made without a court order under this exception.", "Any such disclosure, however, would be exceedingly circumscribed in light of the exception's other requirements. First, disclosure would be at the discretion of the attorney for the government, and would be limited to a situation in which the attorney believed that the Member or staff was needed to assist the attorney in enforcing federal criminal law. Second, the Member or staff to whom disclosure was made could use the grand jury information only for the same purpose, that is, to assist the attorney in prosecuting the federal crimes to which the information related. Third, the Member or staff would be obligated to maintain the secrecy of the information and could further disclose it only in accordance with Rule 6(e).", "As such, even assuming Members of Congress or congressional staff fall within the meaning of \"government personnel,\" the exception would not permit Congress to seek grand jury materials for broader independent investigative or legislative purposes."], "subsections": []}, {"section_title": "Congressional Access to Intelligence and National Security Information", "paragraphs": ["Rule 6(e)(3)(D) permits an attorney for the government to disclose, among other things, any grand jury matter involving threats of attack or intelligence gathering by foreign powers or threats of sabotage or terrorism to \"any appropriate federal . . . government official\" (among others). Similar to the exception for \"government personnel,\" the Rule does not define the term \"appropriate . . . government official.\" Nonetheless, other statutory provisions suggest that the term \"government official\" could be construed to include a Member of Congress. As with the \"government personnel\" exception, however, disclosure under this exception would be limited: only grand jury information pertaining to the specified subject matter would be available, at the discretion of the attorney for the government, and the Member receiving the information could use it \"only as necessary in the conduct of [her] official duties subject to any limitations on the unauthorized disclosure of such information.\""], "subsections": []}]}, {"section_title": "Disclosures to Congress with Judicial Authorization", "paragraphs": [], "subsections": [{"section_title": "Congressional Activities as \"Judicial Proceedings\"", "paragraphs": ["Rule 6(e)'s \"judicial proceeding\" exception may also be relevant to Congress. As previously described, the Rule provides that a court may authorize disclosure of a grand jury matter \"preliminarily to or in connection with a judicial proceeding,\" with the term \"judicial proceeding\" generally contemplating some necessary resort to the judicial system. Two courts have determined that a congressional committee's request for grand jury materials pursuant to its ordinary investigative and oversight functions does not qualify under this exception, as the possibility that \"the actions it is investigating may wind up in the courts if wrongdoing is uncovered\" is \"too remote to trigger the Rule 6(e) exception.\" By contrast, where a congressional committee has sought grand jury materials in connection with the contemplated impeachment of a specific public official, several courts have recognized that court-ordered disclosure may be available pursuant to the \"judicial proceeding\" exception. Under this view, though \"impeachment proceedings before Congress . . . are not by a 'court,'\" a \"contemplated trial\" in the Senate is still \"very much a judicial proceeding.\"", "A committee seeking court-authorized disclosure on the basis of this exception must establish a \"particularized need\" for the materials at issue, which requires a showing that the need outweighs the public interest in secrecy. In the context of impeachment, courts have concluded that a congressional committee's need is sufficient to warrant disclosure, at least where the grand jury's work has concluded. Nevertheless, given that mere \"relevance\" or \"efficiency\" is generally insufficient to establish a particularized need for grand jury materials, the context of the request and the materials at issue could influence whether a committee can show such a need."], "subsections": []}, {"section_title": "\"Inherent Authority\" to Release Grand Jury Materials to Congress", "paragraphs": ["As discussed, some federal courts have recognized that courts have \"inherent authority\" to order the release of grand jury information in \"special\" or \"exceptional\" circumstances, regardless of whether an explicit Rule 6(e) exception would otherwise apply.", "One lower court has relied on this inherent authority over grand jury matters, among other things, to authorize the release to the House Judiciary Committee of a report prepared by the grand jury investigating the alleged\u2014and potentially impeachable\u2014improprieties of President Nixon. The D.C. Circuit essentially affirmed that decision, expressing \"general agreement\" with the lower court decision.", "Another court has also relied on its inherent authority to order the release of the records of a grand jury that had indicted a federal judge to an investigating committee of the judiciary, relying on the \"exceptional circumstance[]\" that the \"question under investigation\"\u2014whether a federal judge should be recommended for impeachment or otherwise disciplined\u2014was \"of great societal importance.\" Recognizing that the investigating committee still was required to show a sufficient need for the grand jury materials, the court concluded such a showing had been made (and was not outweighed by the interest in secrecy) because (1) the investigating committee was composed of federal judges who were acting pursuant to express statutory authority; (2) the grand jury investigation and trial of the judge had already concluded; and (3) only by \"examining all of the record\" could the committee \"determine the true state of the evidence for or against the charge.\"", "Assuming a court adopts the inherent authority view of Rule 6(e) based on the above decisions, it is possible that a court would be willing to authorize the disclosure of grand jury materials to a congressional committee pursuant to the court's inherent authority. Precedential support for disclosure is strongest in the context of an impeachment inquiry (assuming the court did not view such an inquiry as being \"preliminar[y] to . . . a judicial proceeding\"). It is less certain that an \"inherent authority\" disclosure order would be available to a congressional petitioner when not tied to a contemplated impeachment proceeding. In an appropriately \"exceptional\" situation, a court could be amenable to exercising its inherent authority to order the release of grand jury information in the face of a pressing congressional request. The outcome would depend in large part on whether Congress could establish a sufficiently weighty need for the materials, which would implicate a variety of circumstantial factors."], "subsections": []}]}]}, {"section_title": "Limitations on Further Disclosure by Congress", "paragraphs": ["Once grand jury materials find their way into the possession of a Member or committee of Congress, the question arises as to what limits exist on further dissemination of those materials. As previously discussed, Federal Rule of Criminal Procedure 6(e) imposes an obligation of secrecy only on specified persons, of which Congress (or, more generally, a recipient of grand jury information pursuant to the \"judicial proceeding\" or \"inherent authority\" exceptions) is not one.", "That said, Rule 6(e) does explicitly make court-authorized disclosures \"subject to any . . . conditions that [the court] directs.\" It is thus conceivable that in ordering the release of grand jury information, a court could impose a requirement that the information not be further distributed. However, such a requirement would be in tension with the Constitution's Speech or Debate Clause in the case of Congress, at least where further dissemination occurs in the course of legitimate legislative activity, as the Clause prevents a court from blocking disclosure of information in Congress's possession in such a circumstance. In any event, courts will \"presume that the committees of Congress will exercise their powers responsibly and with due regard for the rights of affected parties,\" though a court may consider the extent to which Congress has taken specific precautions to protect against further dissemination of grand jury materials in deciding whether disclosure is appropriate."], "subsections": []}, {"section_title": "Legal Considerations for Congress", "paragraphs": ["Past Congresses, faced with potential limitations on the ability to obtain grand jury materials, have considered legislation that would amend Federal Rule of Criminal Procedure 6(e) to, among other things, permit a court to authorize disclosure of grand jury matters \"upon a showing of substantial need\" to \"any committee of Congress . . . for use in relation to any matter within the jurisdiction of such . . . congressional committee.\"", "A bill to this effect was introduced during the 99th Congress, prompting the Department of Justice's Office of Legal Counsel to issue a memorandum opinion \"strongly oppos[ing] any provision that would permit Congress independently to petition the courts for Rule 6(e) material.\" In the Office's view, such a provision would \"codify legislative encroachment into the Executive's exclusive authority to enforce the law.\" In other words, the Office took the position that creating a mechanism for Congress to obtain grand jury materials from the court, without any opportunity for interposition by the executive branch, would be inconsistent with the Constitution's separation of powers and would invite \"legislative pressures\" that would interfere with prosecutorial discretion and due process of law.", "The Senate Judiciary Committee held a hearing on the legislation and a similar bill as to their impacts on Rule 6(e) and grand jury disclosure practices, during which the bill's sponsor, Senator Charles Grassley, expressed concern that Rule 6(e) had been \"utilized by the Justice Department as a shield against legitimate congressional inquiry.\" The Senator pointed out that the bill did not provide \"automatic congressional access to grand jury information,\" but rather allowed \"congressional committees[,] in performance of their constitutional duty to oversee the executive agencies, an opportunity to demonstrate to the court a 'substantial need' for access[.]\"", "An Associate Deputy Attorney General reiterated in testimony the Department of Justice's position that the provision for congressional access \"would raise substantial constitutional concerns in terms of separation of powers as to where the enforcement authority lies; due process issues in terms of fairness and the application of decisionmaking with respect to criminal prosecutions; as well as the issue of opening the door for raising concerns about potential political influence or persuasion upon criminal prosecutions.\" He did point out, however, that the department had \"accommodate[d] requests from particular congressional committees for investigative materials on an ad hoc basis by appropriate application to the courts, and subject to necessary protective conditions,\" which it would continue to do.", "In separate testimony, representatives of the American Bar Association and the National Association of Criminal Defense Lawyers argued that the provision under consideration could violate the separation-of-powers doctrine and undermine the \"fundamental tradition of grand jury secrecy\" by \"subvert[ing] the purpose of the grand jury\" to legislative ends.", "An attorney with expertise on the subject of congressional access to information also testified at the hearing and expressed the view that a bill permitting a court to provide grand jury materials to a congressional committee \"with legitimate oversight functions would not violate separation-of-powers principles.\" However, he believed that Congress should have access to grand jury materials only \"in very limited circumstances\" and suggested that an amendment to Rule 6(e) \"should instruct a Federal court to weigh congressional needs against grand jury secrecy requirements in determining whether to grant access.\" In the attorney's view, this weighing would include consideration of whether the committee could acquire sufficient information from non-grand-jury sources, whether the grand jury proceedings for which information was sought had terminated or were ongoing, and whether the committee had \"in place special provisions to protect the confidentiality of grand jury material.\" The attorney did not view the provision under consideration, as written, to be adequate in light of the considerations he identified.", "Ultimately, the bill was reported out of committee with the changes to Rule 6(e), including the congressional-access provision, excised, and it does not appear that the legislation was further pursued. Consequently, ambiguity remains regarding the relationship between grand jury secrecy and congressional access to grand jury materials. As the debate in the 99th Congress reflects, any change to the Rule could raise potentially difficult constitutional, interpretive, and policy questions. In any event, should Congress desire to create further exceptions to the secrecy framework beyond Rule 6(e), the Supreme Court has instructed that it must \"affirmatively express its intent to do so.\" "], "subsections": []}]}]}}
{"id": "R45689", "title": "FY2019 Defense Appropriations Act (P.L. 115-245)", "released_date": "2019-04-12T00:00:00", "summary": ["The FY2019 Department of Defense Appropriations Act, enacted as Division A of P.L. 115-245 , provides $667.3 billion in new budget authority to fund all activities of the Department of Defense (DOD) except for the construction of military facilities and the operation of military family housing complexes.", "While the total amount appropriated for DOD for FY2019 was nearly equal to the Administration's request, the act provides more funding than requested for dozens of weapons acquisition programs, with the gross increase exceeding $10 billion. Those additions are offset by hundreds of reductions made elsewhere within the budget request.", "In effect, these reductions allowed Congress to add billions of dollars to the Administration's DOD budget request without exceeding the cap on defense spending that arose from the Bipartisan Budget Act of 2018 ( P.L. 115-123 ). That cap applies to discretionary appropriations for DOD's base budget \u2014that is, appropriations designated by Congress and the President as funding for emergencies or for Overseas Contingency Operations (OCO). OCO activities include current operations in Afghanistan and Syria, and any other operations which are so designated by Congress and the President.", "A House-Senate conference committee reported a version of the bill on September 13, 2018. The Senate approved the conference report on September 18 by a vote of 93-7 and the House did likewise on September 26 by a vote of 361-61. President Donald J. Trump signed the bill into law ( P.L. 115-245 ) on September 28, 2018.", "As enacted, H.R. 6157 funds the Administration's major defense initiatives, including an increase of 16,500 active-duty military personnel. Among the weapons procurement programs for which the bill provides substantial additions add to the amounts requested are the F-35 Joint Strike Fighter used by the Air Force, Navy, and Marine Corps (77 aircraft requested and 93 funded) and the Navy's Littoral Combat Ship (one requested and three funded)."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides both an overview of the FY2019 defense appropriations act ( P.L. 115-245 ) and access to other CRS products providing additional detail and analysis on particular issues and programs dealt with by that law.", "The Overview section of the report immediately following this Introduction covers the legislative history of the bill and the strategic and budgetary context within which is was debated. Subsequent sections of the report detail the bill's treatment of specific issues including procurement of various types of weapons. Each section dealing with procurement of a certain type of weapon includes a table presenting basic budget information and links to any relevant CRS product."], "subsections": []}, {"section_title": "Overview", "paragraphs": ["For FY2019, the Trump Administration requested $668.4 billion to fund programs falling within the scope of the annual defense appropriations act. This included $67.9 billion to be designated by Congress and the President as funding for Overseas Contingency Operations (OCO) and $599.4 billion for DOD's base budget, comprising all operations not designated as OCO. OCO-designated funding is related to current operations in Afghanistan and Syria, but includes other activities that Congress and the President so-designate.", "As enacted, H.R. 6157 provides $667.3 billion, a net reduction of $1.09 billion amounting to less than two-tenths of 1% of the total (i.e., base budget plus OCO) request. Compared with the total amount provided by the FY2018 defense appropriations bill (P.L. 114-113), the FY2019 act provides an increase of 2.3%. (See Table 1 .)", "The House initially passed H.R. 6197 on June 28, 2018, by a vote of 359-49. On that same day, the Senate Appropriations Committee reported S. 3159 , its own version of the FY2019 Defense Appropriations bill. Subsequently, the Senate adopted several amendments to H.R. 6157 , including one that substituted the text of the Senate committee bill for the House-passed text. The Senate also adopted an amendment that added to the defense bill the text of S. 3158 , the FY2019 appropriations bill for the Departments of Labor, Health and Human Services, and Education, which the Senate Appropriations Committee had approved on August 20, 2018. The Senate then passed H.R. 6197 , as amended, on August 23, 2018, by a vote of 85-7.", "A House-Senate conference committee reported a version of the bill on September 13, 2018. The Senate approved the conference report on September 18 by a vote of 93-7 and the House did likewise on September 26 by a vote of 361-61. President Donald J. Trump signed the bill into law ( P.L. 115-245 ) on September 28, 2018. (See Table 2 .)", "The total amount requested for DOD that falls within the scope of the annual defense appropriations bill and amounts provided in P.L. 115-245 as enacted are relatively close. Within those gross totals, however, there are differences between the amounts requested and the amounts provided for hundreds of specific elements within the sprawling DOD budget. Many of these individual differences reflect congressional judgements about particular issues. However, there also are patterns of differences that reflect congressional views on broad policy or budgetary questions:", "Title I of the act, that funds Military Personnel accounts, provides $2.2 billion less than was requested for pay and benefits. House-Senate conferees said the reduction should have no adverse impact on the force. According to the conference report, revised estimates of the budgetary impact of recent changes in the military retirement system were the basis for a net reduction from the request of $1.54 billion. Other reductions totaling $430 million were justified by conferees on the basis of \"historical unobligated balances,\" that is, an accumulation of funds in certain accounts that were appropriated in prior years but were not spent. Base budget funding provided by the Operation and Maintenance (O&M) title of the act (Title II) amounts to a net reduction of $5.2 billion from the request. In part, the apparent cut reflects a transfer of nearly $2.0 billion to Title IX of the act, which funds OCO. The conferees justified additional reductions totaling $1.34 billion on the basis of either large unobligated balances or \"historical underexecution,\" (i.e., a pattern of repeatedly spending less on military personnel in a given fiscal year than had been appropriated).", "On the other hand, total procurement funding for the base budget (Title III) is $4.8 billion higher than the request. While the act makes hundreds of additions and cuts to the funding requested for particular items, three broad themes all push the act's procurement total upward: $2.48 billion is added to buy aircraft and other equipment for National Guard and reserve forces; $2.31 billion is added to fully fund or acquire major components for additional six ships (see Table 9 ); and $2.13 billion is added to the $8.49 billion requested for procurement of F-35 Joint Strike Fighters (see Table 10 ).", "Similarly, base budget funding in the act for research and development (Title IV) is $3.8 billion higher than the request, partly because the legislation would add $2.3 billion to the $13.7 billion requested for science and technology (S&T) programs \u2013 that is, the part of the R&D effort focused on developing new and potentially useful scientific and engineering knowledge rather than on designing specific pieces of equipment intended for production. "], "subsections": [{"section_title": "Strategic Context", "paragraphs": ["The Trump Administration presented its FY2019 defense budget request \u2013 nearly 96% of which is funded by the annual defense appropriations bill \u2013 as responding to an international security environment that has become increasingly contentious in recent years. Many observers view events such as China's construction of military bases in the South China Sea since 2013 and Russia's seizure of Crimea in March 2014 as marking an end to the post-Cold War era that began in the late 1980s and 1990s with the decline and collapse of the Soviet Union.", "Many observers of contemporary international security trends contend that the United States and its allies are entering an era of increased strategic complexity. Very broadly speaking, during the Cold War and beyond, U.S. national security challenges were difficult, yet relatively straightforward to conceptualize, prioritize, and manage. U.S. national security and foreign policies during the Cold War were focused on its strategic competition with the Union of Soviet Socialist Republics and on containing the spread of communism globally. In the years following the end of the Cold War, U.S. national security policies and practices were largely designed to curtail genocide in the Balkans and Iraq, while simultaneously containing regional aggressors such as Iran and North Korea and recalibrating relations with China and Russia. ", "The terrorist attacks on U.S. territory on September 11 th , 2001 ushered in an era of national security policy largely focused on countering terrorism and insurgencies in the Middle East while containing, if not reversing, North Korean and Iranian nuclear weapons programs. As a legacy of the Cold War's ending, U.S. and allied military forces had overwhelming military superiority over adversaries in the Middle East and the Balkans. Accordingly, operations were conducted in relatively permissive environments.", "The 2014 Russian invasion of the Crimean peninsula and subsequent proxy war in eastern Ukraine fostered concern in the United States and in Europe about an aggressive and revanchist Russia. Meanwhile, China began building and militarizing islands in the South China Sea in order to lay claim to key shipping lanes. Together, these events highlighted anew the salience in the U.S. national security agenda of dealing with other great powers , that is, states able and willing to employ military force unilaterally to accomplish their objectives. At the same time, the security challenges that surfaced at the end of the Cold War \u2013 fragile states, genocide, terrorism, and nuclear proliferation, to name a few \u2013 have remained serious threats to U.S. interests. In this international context, conceptualizing, prioritizing, and managing these myriad problems, arguably, is more difficult than it was in eras past. The situation is summarized by the December 2017 U.S. National Security Strategy (NSS), which notes:", "The United States faces an extraordinarily dangerous world, filled with a wide range of threats that have intensified in recent years. ", "Likewise, the January 2018 National Defense Strategy (NDS) argues: ", "We are facing increased global disorder, characterized by decline in the long-standing rules-based international order\u2014creating a security environment more complex and volatile than any we have experienced in recent memory. ", "The Trump Administration's 2017 NSS and the 11-page unclassified summary of the NDS explicitly reorients U.S. national security strategy (including defense strategy) toward a primary focus on great power competition with China and Russia and on countering Chinese and Russian military capabilities. ", "In addition to explicitly making the great power competition the primary U.S. national security concern, the NDS also argues for a focus on bolstering the competitive advantage of U.S. forces, which, the document contends, has eroded in recent decades vis-\u00e0-vis the Chinese and Russian threats. The NDS also maintains that, contrary to what was the case for most of the years since the end of the Cold War, U.S. forces now must assume that their ability to approach military objectives will be vigorously contested.", "The new U.S. strategy orientation set forth in the 2017 NSS and 2018 NDS is sometimes referred to a \"2+3\" strategy, meaning a strategy for countering two primary challenges (China and Russia) and three additional challenges (North Korea, Iran, and terrorist groups), although given the radically differing nature of these challenges, one might posit that such a heuristic oversimplifies the contours of the strategic environment."], "subsections": []}, {"section_title": "Budgetary Context", "paragraphs": ["Congressional action on all FY2019 appropriations bills was shaped by an effort to rein in federal spending, out of concern for the increasing indebtedness of the federal government. The fastest growing segment of federal spending in recent decades has been mandatory spending for entitlement programs such as Social Security, Medicare, and Medicaid. (See Figure 1 .) ", "The Budget Control Act (BCA) of 2011 (P.L. 112-25) was intended to reduce spending by $2.1 trillion over the period FY2012-FY2021, compared to projected spending over that period. One element of the act established binding annual limits (or caps) to reduce discretionary federal spending through FY2021 by $1.0 trillion. Separate annual caps on discretionary appropriations for defense-related activities and non-defense activities are enforced by a mechanism called sequestration . Sequestration provides for the automatic cancellation of previous appropriations, to reduce discretionary spending to the BCA cap for the year in question.", "The caps on defense-related spending apply to discretionary funding for DOD and for defense-related activities by other agencies, comprising the national defense budget function which is designated budget function 050 . The caps do not apply to funding designated by Congress and the president as emergency spending or spending on OCO.", "Congress has raised the annual spending caps repeatedly, most recently with the Bipartisan Budget Act of 2018 (P.L. 115-123), which set the national defense funding cap for FY2019 at $647 billion. Because the cap applies to defense-related spending in other agencies as well as to DOD, and because the annual defense appropriations bill covers most but not all of DOD's discretionary budget, the portion of the cap applicable to FY2019 defense appropriations bill is approximately $600 billion. The Administration's request for the bill was consistent with that cap, as is the enacted bill.", "The total FY2019 DOD request \u2013 including both base budget and OCO funding \u2013 continued an upswing that began with the FY2016 budget, which marked the end of a relatively steady decline in real (that is, inflation-adjusted) DOD purchasing power. Measured in constant dollars, DOD funding peaked in FY2010, after which the drawdown of U.S. troops in OCO operations drove a reduction in DOD spending. (See Figure 2 .)"], "subsections": []}]}, {"section_title": "Appropriations Overview", "paragraphs": [], "subsections": [{"section_title": "Military Personnel", "paragraphs": ["The law funds the Administration's proposal to increase the size of the armed forces by 15,600 personnel in the active components \u2013 with nearly half of that increase destined for the Navy \u2013 and by a total of 800 members of the Air Force Reserve and Air National Guard. The Senate-passed version of the bill would have funded less than half the amount of the proposed increase in active-duty personnel and none of the amount of the proposed increase in the reserve component. (See Table 3 .)", "The Senate Appropriations Committee report on S. 3159 (which became the basis for the Senate-passed version of the appropriations bill) stated no reason for recommending less than half the amount of the Administration's proposed increase. However, on this point, the Senate version of the appropriations bill mirrored the Senate-passed version of the companion John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year 2019 (H.R. 5515; P.L. 115-232), which also would have approved half the amount of the proposed increase in the active-duty components and none of the amount of the proposed reserve component increase. In the Senate Armed Services Committee report to accompany its version of the NDAA, the panel expressed concern that, because unemployment is at historically low levels, the services might have trouble recruiting enough additional personnel to fill a larger force while maintaining their current standards for enlistment.", "As with the FY2019 defense appropriations bill, the conference report on the FY2019 NDAA authorized the Administration's proposed increase in military end-strength.", "The enacted version of the appropriations bill funds the Administration's recommended 2.6 % increase in military basic pay effective January 1, 2019 (as both the House and Senate versions would have done). The Congressional Budget Office (CBO) estimates the cost of this raise to be $1.8 billion."], "subsections": []}, {"section_title": "Defense Health Program", "paragraphs": ["In terms of total funding, the act appropriates $34.0 billion for the Defense Health Program (DHP) in FY2019, which represents an increase of less than 1% over the Administration's $33.7 billion request. As usual, those similar totals mask a number of differences. Compared with the request, the enacted bill cuts:", "$213 million to force DOD to deal with what House and Senate conferees labelled \"excess growth\" in the cost of pharmaceuticals; $215 million in anticipation that the funds will not be needed because the program will continue to exhibit its pattern of historical underexecution; and $597 million to correct what the House Appropriations Committee said was erroneous accounting for congressional action on the FY2018 DHP budget.", "Among the amounts the enacted bill would add to the request are:", "$10 million for training therapeutic service dogs; and $2 million to coordinate the actions of DOD and the Department of Veterans Affairs to study the possible adverse health effects of the widespread use of open burning pits to dispose of trash at U.S. military sites in Iraq and Afghanistan.", "The Senate-passed version of the bill would have added to the request $750 million for maintenance and repair of DHP facilities, but this was not included in the final version of the bill."], "subsections": [{"section_title": "Congressionally-Directed Medical R&D", "paragraphs": ["Continuing a 28-year-long pattern, the act adds to the Administration's DHP budget request funds for medical research and development. Beginning with a $25 million earmark for breast cancer research in the FY1992 defense appropriations act ( P.L. 102-172 ), Congress has added a total of $13.2 billion to the DOD budget through FY2018 for research on a variety of medical conditions and treatments.", "The Administration's DHP budget request included $710.6 million for research and development. The House-passed version of H.R. 6157 would have added $775.6 million, most of which was allocated to one of 27 specific medical conditions or treatments. The Senate version would have added to the request $963.2 of which $431.5 million was allocated among 10 specific diseases or treatments. The enacted version of the bill appropriates a total of $2.18 billion for DHP-funded medical research, an increase of $1.47 billion over the request that covers each of the particular medical conditions and treatments that would have been funded by either chamber's bill. ", "As has been typical for several years, the largest amounts for particular diseases in both the House and Senate versions of the FY2019 bill are aimed at breast cancer, prostate cancer, and traumatic brain injury (TBI). (See Table 4 .)"], "subsections": []}]}, {"section_title": "Operation and Maintenance (O&M) Funds", "paragraphs": ["The act cuts $4.8 billion from the Administration's $199.5 billion request for base budget O&M funds, making the final appropriation $194.7 billion. However, more than one-third of the apparent reduction ($2.0 billion) is accounted for by funds that the bill appropriates as part of the budget for OCO, despite their having been requested in the base budget.", "For dozens of additional cuts from the base budget O&M request, House-Senate conferees cited rationales that imply that the reductions need not have an adverse impact on DOD activities:", "Cuts totaling $1.3 billion were justified by the assumption that particular programs would underspend their budget requests by that amount, often on the basis of what the conferees called a pattern of historic al underexecution of their annual appropriations; Cuts totaling $1.3 billion were justified on grounds that DOD had not justified its request for those funds; and Cuts totaling $343 million were justified on grounds that the requests amounted to unrealistically large increases over the prior year's appropriation."], "subsections": [{"section_title": "House-backed 'Readiness' Increases", "paragraphs": ["The House-passed version of the bill would have added a total of $1.0 billion spread across the active and reserve components of the armed forces to \"restore readiness.\" According to the House committee report, the funds were intended to be spent on training, depot maintenance, and base operations according to a plan DOD was to submit to Congress 30 days in advance of expenditure. The funds were not included in the enacted version of the bill."], "subsections": []}]}]}, {"section_title": "Selected Acquisition Programs", "paragraphs": [], "subsections": [{"section_title": "Strategic and Long-Range Strike Systems", "paragraphs": ["The Administration's FY2019 budget request continued the across-the-board modernization of the U.S. strategic arsenal that had been launched by the Obama Administration. Within that program, the initial House and Senate versions of H.R. 6157 funded the major initiatives with some changes, many of which reflected routine budget oversight. (See Table 5 .)", "The enacted version of the bill adds a total of more than $300 million to the amounts requested to develop three new long-range weapons. Specifically it adds:", "$69.4 million to the $345.0 million requested for a new, nuclear-armed intercontinental ballistic missile (ICBM) to replace Minuteman III missiles deployed in the 1970s, an increase conferees said would meet an unspecified \"unfunded requirement\"; $203.5 million for \"program acceleration\" to the $263.4 million requested to develop Conventional Prompt Global Strike weapon sufficiently accurate to strike a target at great range with a conventional (i.e., non-nuclear) warhead; and $50 million, also to meet an unspecified \"unfunded requirement,\" to the $614.9 million requested to develop a Long-Range Stand-Off (LRSO) weapon to replace the nuclear-armed air-launched cruise missile (ALCM) carried by long-range bombers. "], "subsections": []}, {"section_title": "Ballistic Missile Defense Systems", "paragraphs": ["The act supports the general thrust of the administration's funding request for ballistic missile defense, with the sort of funding adjustments that are routine in the appropriations process.", "For so-called mid-c ourse defense, intended to protect U.S. territory against a relatively small number of intercontinental-range warheads, the Administration's program would expand the fleet of interceptor missiles currently deployed in Alaska and California, while developing an improved version of that interceptor. The program also is deploying shorter-range THAAD, Aegis, and Patriot missiles to provide a so-called terminal defense intended to protect U.S. allies and forces stationed abroad and to provide a second-layer of protection for U.S. targets. (See Table 6 .)"], "subsections": [{"section_title": "Accounting for a FY2018 Windfall", "paragraphs": ["The act cuts a total $301.7 million from the amounts requested for various projects associated with mid-course defense of U.S. territory on grounds that these funds were intended for purposes Congress already had funded in the FY2018 defense appropriations act ( P.L. 115-141 ). That measure was enacted two months after the FY2019 budget request was sent to Congress, reiterating the request for the funds in question. "], "subsections": []}, {"section_title": "Missile Defense in South Korea", "paragraphs": ["The act adds more than $400 million to the amounts requested to develop and acquire missile defenses for South Korea and U.S. forces stationed there. North Korea has tested long-range and short-range ballistic missiles as well as nuclear weapon. The increase includes $284.4 million to develop a network linking THAAD interceptor missiles and shorter-range Patriot missiles based in South Korea and Japan with sensors that could track incoming North Korean missiles.", "The act also adds $140 million to the $874 million requested to procure THAAD interceptors that are deployed in Guam, in the Middle East, and in South Korea."], "subsections": []}]}, {"section_title": "Military Space Programs", "paragraphs": ["While Congress and the Administration weighed alternative ways to organize a new organization \u2013 a Space Force \u2013 to address long-standing criticisms of DOD's acquisition of space satellites and associated launchers, the debate was not cited by the House and Senate Appropriations Committees in their reports on the FY2019 defense appropriations bill. Nor was it cited by House and Senate conferees in their Joint Explanatory Statement to accompany the conference report on the bill. The enacted bill funded \u2013 with largely modest changes \u2013 the Administration's requests for several major defense-related space programs. (See Table 7 .) ", "The most sizeable departure from the Administration's request was the addition of $200 million to the $245.4 million requested in R&D funding associated with the Evolved Expendable Launch Vehicle (EELV), which is the program for acquiring satellite launch rockets and launch services for relatively heavy DOD space payloads."], "subsections": []}, {"section_title": "Ground Combat Systems", "paragraphs": ["The act supports the general thrust of the Administration's program to beef up the capacity of Army and Marine Corps units to prevail in full-scale, high-tech combat with the forces of near-peer adversaries, namely Russia and China. The increased DOD emphasis on conventional combat with major powers is rooted in the 2018 National Defense Strategy of which DOD published an unclassified synopsis on January 19, 2018.", "In addition to modernizing the ground forces' existing capabilities, the Administration's FY2019 budget request included stepped-up investments to improve two capabilities the Army identifies as among its top modernization priorities: mobile defenses against cruise missiles and drone aircraft; and improved firepower and mobility for infantry units. While taking some reductions from the amounts requested for some programs \u2013 cuts based on program delays, the availability of prior-year funds, and so forth \u2013 the bills would provide funding above the requested level to accelerate other programs. (See Table 8 .)"], "subsections": [{"section_title": "Existing Capabilities15", "paragraphs": ["The act funded most of the roughly $2.5 billion requested to continue upgrading the Army's fleet of M-1 tanks, built between 1980 and 1996. For the program to continue modernizing the service's Bradley armored troop carriers \u2013 which is roughly contemporary with the tank fleet \u2013 it would cut nearly a quarter of the $1.04 billion requested, mostly on grounds of a \"change of acquisition strategy.\"", "The act provided more funds than requested in order to accelerate modernization of two other components of the Army's current combat vehicle fleet, adding:", "$110.0 million to the $310.8 million requested to replace the chassis and powertrain of the M-109 Paladin self-propelled with the more powerful and robust chassis of the Bradley troop carrier; and $94.0 million to the $265.3 million requested to replace the flat underside of many types of Stryker wheeled combat vehicles with a V-shaped bottom intended to more effectively deflect the explosive force of buried landmines.", "The act generally funded programs to replace two older types of tracked vehicles, providing:", "$447.5 million (of $479.8 million requested) to continue procurement of the Advanced Multi-Purpose Vehicle (AMPV), intended to replace the Vietnam War-vintage M-113 tracked personnel carrier; and $167.5 million, as requested, for procurement of the Amphibious Combat Vehicle (ACV), a successor to the Marine Corps' equally dated AAV-7 amphibious troop carrier."], "subsections": []}, {"section_title": "Infantry Firepower and Mobility", "paragraphs": ["The Administration requested a total of $449 million to develop and begin purchasing vehicles intended to boost the lethality and mobility of Army infantry units \u2013 that is, forces not equipped with M-1 tanks and other armored vehicles. Nearly 90% of those funds were for development of a relatively light-weight tank (designated Mobile Protected Firepower or MPF) with the balance of the money intended to begin purchasing four-wheel-drive, off-road vehicles for reconnaissance missions and troop transport, designated Light Reconnaissance Vehicle (LRV) and Ground Mobility Vehicle (GMV), respectively.", "The act funds the three programs with some relatively small reduction reflecting concerns that their development or testing schedules are unrealistically ambitious."], "subsections": []}, {"section_title": "Anti-Aircraft Defense", "paragraphs": ["The FY2019 budget request includes nearly $450 million for programs intended to beef up mobile Army defenses against aircraft, including unmanned aerial systems and cruise missiles. These include a Stryker combat vehicle equipped to launch Stinger missiles (designated IM-SHORAD) and a larger, truck-mounted missile launcher (designated IFPC).", "The act cut the total R&D request for the programs by nearly 25% for various, relatively typical rationales including development program delays."], "subsections": []}]}, {"section_title": "National Guard and Reserve Force Equipment", "paragraphs": ["Following what has long been the usual practice, the act adds to the DOD budget $2.35 billion for procurement of aircraft, ground vehicles, and other equipment for National Guard or other reserve component units. These funds are provided in addition to the $3.64 billion worth of equipment for Guard and reserve forces that was included in the Administration's FY2019 budget request.", "The increase includes a total of $1.30 billion in the National Guard and Reserve Equipment Account (NGREA) which is allocated among the six reserve force components: the Army and Air National Guard, and the Army, Navy, Marine Corps, and Air Force Reserve. In their Joint Explanatory Statement on the final version of the bill, House and Senate conferees directed the funds to be used \"for priority equipment that may be used for combat and domestic response missions.\" ", "Amounts are not earmarked for specific purchases, but conferees on the defense bill directed that \"priority consideration\" in using the funds be given to 18 types of items. The 18 categories range in specificity from \"digital radar warning receivers for F-16s\" to \"cold-weather and mountaineering gear and equipment.\"", "Other congressional initiatives include specific increases for National Guard equipment:", "$640 million for 8 C-130J cargo planes; $168 million for 6 AH-64E attack helicopters; $156 million for 8 UH-60 Black Hawk helicopters; and $100 million for HMMWV (\"Hum-vee\") vehicles."], "subsections": []}, {"section_title": "Naval Systems", "paragraphs": ["The act funds the major elements of the Administration's shipbuilding program, which aims at enlarging and modernizing the Navy's fleet. The stated goals of the program are to improve the Navy's ability to respond to increasingly assertive military operations by China in the Western Pacific and Indian Oceans, and to halt, if not reverse, the decline in the technological edge that U.S. forces have enjoyed for decades. (See Table 9 .)"], "subsections": [{"section_title": "Carrier 'Block Buy'", "paragraphs": ["The Administration's $1.60 billion request to fund a Ford -class aircraft carrier was intended as the fourth of eight annual increments to cover the estimated $12.6 billion cost of what will be the third ship of the Ford class. That ship, designated CVN-80 and named Enterprise , is slated for delivery to the Navy at the end of FY2027.", "The act, which provides nearly the total amount requested, includes a provision that allows the Navy \u2013 under certain conditions \u2013 to use the funds for a block buy contract that would fund procurement of components for both CVN-80 and the planned fourth ship of the Ford class, designated CVN-81. Proponents of such an arrangement contend that it could accelerate the delivery of the fourth ship and reduce the overall cost of the two vessels. Before the funds could be used for a block buy, DOD would have to certify to Congress an analysis demonstrating that the approach would save money, as required by Section 121 of the companion FY2019 National Defense Authorization Act, H.R. 5515 ( P.L. 115-232 )."], "subsections": []}, {"section_title": "Amphibious Landing Ships", "paragraphs": ["The act adds to the Administration's request $1.1 billion to accelerate the planned production of ships to support amphibious landings and large air-cushion craft to haul tanks and other combat equipment ashore. This total includes:", "$350 million to begin construction of an LHA-class helicopter carrier; $350 million to begin construction of either an LPD-17-class amphibious landing transport or a variant of that ship designated LX(R); $225 million for an Expeditionary Fast Transport, a catamaran that can carry a few hundred troops and their gear hundreds of miles at 40 mph; and $182.5 million to buy eight air-cushion landing craft (instead of the five requested) to haul tanks and other equipment ashore from transport ships."], "subsections": []}]}, {"section_title": "Aviation Systems", "paragraphs": ["Generally speaking, the act funds the Administration's requests for military aircraft acquisition, subject to relatively minor cuts reflecting routine congressional oversight. The major departures from the request were increased funds to accelerate production of the F-35 Joint Strike fighter and the addition of funds to buy helicopters and C-130 cargo planes for the National Guard. "], "subsections": [{"section_title": "F-35 Joint Strike Fighter", "paragraphs": ["The act's largest addition to the Administration's request for a single weapons program is the addition of $1.70 billion to acquire 16 F-35 Joint Strike Fighters to the 77 F-35s funded in the budget request. The additional funds provides eight more aircraft in addition to the 48 requested for the Air Force, two more of the short-takeoff, vertical-landing (STOVL) F-35s for the Marine Corps (in addition to the 20 requested), and six more of the aircraft carrier-adapted version \u2013 four for the Navy (in addition to the nine requested), and two for the Marine Corps.", "Other notable funding increases in the bill for procurement of combat aircraft include:", "$65.0 million to extend the life of A-10 ground-attack planes by replacing their wings; and $100.0 million to begin acquisition of a relatively low-tech (and relatively inexpensive) ground-attack plane designated OA-X for use against other-than-top-tier adversaries."], "subsections": [{"section_title": "Appendix.", "paragraphs": ["Following are the full citations of CRS products identified in tables by reference number only.", "CRS Reports", "CRS Report RS22103, VH-71/VXX Presidential Helicopter Program: Background and Issues for Congress , by Jeremiah Gertler ", "CRS Report RS20643, Navy Ford (CVN-78) Class Aircraft Carrier Program: Background and Issues for Congress , by Ronald O'Rourke ", "CRS Report RL31384, V-22 Osprey Tilt-Rotor Aircraft Program , by Jeremiah Gertler ", "CRS Report RL32418, Navy Virginia (SSN-774) Class Attack Submarine Procurement: Background and Issues for Congress , by Ronald O'Rourke", "CRS Report RL33741, Navy Littoral Combat Ship (LCS) Program: Background and Issues for Congress , by Ronald O'Rourke ", "CRS Report RL33745, Navy Aegis Ballistic Missile Defense (BMD) Program: Background and Issues for Congress , by Ronald O'Rourke", "CRS Report RL34398, Air Force KC-46A Tanker Aircraft Program , by Jeremiah Gertler", "CRS Report R41129, Navy Columbia (SSBN-826) Class Ballistic Missile Submarine Program: Background and Issues for Congress , by Ronald O'Rourke ", "CRS Report R41464, Conventional Prompt Global Strike and Long-Range Ballistic Missiles: Background and Issues , by Amy F. Woolf", "CRS Report R42723, Marine Corps Amphibious Combat Vehicle (ACV): Background and Issues for Congress , by Andrew Feickert", "CRS Report R43049, U.S. Air Force Bomber Sustainment and Modernization: Background and Issues for Congress , by Jeremiah Gertler", "CRS Report R43240, The Army's Armored Multi-Purpose Vehicle (AMPV): Background and Issues for Congress , by Andrew Feickert", "CRS Report R43618, C-130 Hercules: Background, Sustainment, Modernization, Issues for Congress , by Jeremiah Gertler and Timrek Heisler ", "CRS Report R44463, Air Force B-21 Raider Long-Range Strike Bomber , by Jeremiah Gertler", "CRS Report R44968, Infantry Brigade Combat Team (IBCT) Mobility, Reconnaissance, and Firepower Programs , by Andrew Feickert", "CRS Report R44972, Navy Frigate (FFG[X]) Program: Background and Issues for Congress , by Ronald O'Rourke", "Insight, In Focus", "CRS Insight IN10931, U.S. Army's Initial Maneuver, Short-Range Air Defense (IM-SHORAD) System , by Andrew Feickert ", "CRS In Focus IF10954, Air Force OA-X Light Attack Aircraft Program , by Jeremiah Gertler"], "subsections": []}]}]}]}]}}
{"id": "R40482", "title": "Department of State, Foreign Operations Appropriations: A Guide to Component Accounts", "released_date": "2019-04-10T00:00:00", "summary": ["The annual Department of State, Foreign Operations, and Related Programs (SFOPS) appropriations legislation funds many of the nondefense international affairs activities of the United States. The State Department portion makes up about one-third of the funding, and the Foreign Operations accounts comprise the remainder. SFOPS is one of 12 annual appropriations acts that fund the federal government each fiscal year.", "Congress appropriated SFOPS in the Consolidated Appropriations Act, 2019 (P.L. 116-6), under Division F, \"Department of State, Foreign Operations, and Related Programs Appropriations Act, 2019.\" That act is divided into eight titles. Each title funds a variety of government activities, ranging from the operational and administrative costs of government agencies, to direct grant funds for private nonprofit or multilateral organizations. By title, SFOPS provisions set out activities as follows:", "Title I\u2014Department of State and Related Agency: Funds State Department general operations and diplomatic programs, such as cultural exchange programs, dues to the United Nations, international broadcasting, and grants to U.S. diplomacy-focused nongovernmental organizations such as the National Endowment for Democracy. Title II\u2014United States Agency for International Development (USAID): Funds general operations of USAID, but not USAID foreign assistance programs (see Title III). Title III\u2014Bilateral Economic Assistance: The primary funding source for humanitarian and international development programs of the U.S. government. Includes bilateral assistance for disaster relief, global health, and economic development activities, as well as funding several independent development-oriented agencies, notably the Millennium Challenge Corporation and Peace Corps. Title IV\u2014International Security Assistance: The primary title for U.S. security cooperation programs abroad outside of the National Defense appropriations bill. Includes antinarcotics and rule of law strengthening programs; nonproliferation, anti-terrorism, and demining programs; some assistance to foreign militaries; and some funding for international peacekeeping efforts. Title V\u2014Multilateral Assistance: Contributes funds to several multilateral finance and grant-making institutions. Title VI\u2014Export and Investment Assistance: Funds the three independent export promotion agencies of the U.S. government, the Export-Import Bank; the Overseas Private Investment Corporation; and the Trade and Development Agency. Title VII\u2014General Provisions: Establishes guidance for the allocation of funds appropriated in other titles and lays out restrictions and priorities for programming. Title VIII\u2014Overseas Contingency Operations/Global War on Terrorism: Provides additional funding to accounts in Titles I to V, to address ongoing U.S. military operations priorities overseas, particularly terrorist threats in Afghanistan and Iraq, as well as worldwide."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The annual Department of State, Foreign Operations, and Related Programs appropriations legislation (SFOPS) funds many of the nondefense international affairs activities of the government. It is one of 12 appropriations bills that Congress considers annually to fund the discretionary activities of the government. Congress structures SFOPS into several titles, which consist of broad spending categories. These titles are subdivided into paragraphs that each address one component account, a funding line item that includes one or several activities of the government. A single component account may cover one agency's entire annual budget, grant funds to an independent organization, or fund multiple activities associated with statutory authorities, among other things.", "In the FY2019 Consolidated Appropriations Act ( P.L. 116-6 ), the Department of State, Foreign Operations, and Related Programs Appropriations Act (Division F) is divided into eight titles, each associated with the following activities:", "Many of the component accounts within these titles correspond to one or several authorities in statute. Title 22 of the U.S. Code contains many of these authorities. Major acts in Title 22 include the State Department Basic Authorities Act of 1956 (P.L. 84-885; hereinafter the Basic Authorities Act), the Foreign Service Act of 1980 ( P.L. 96-465 ), and the Foreign Assistance Act of 1961 (P.L. 87-195; hereinafter the FAA), among others. This report identifies the statutory authorities that enable each component account to function. A list of these major acts, and cross-references to their location in the U.S. Code , are in Appendix A . For information on SFOPS funding levels, trends, and congressional action, see CRS Report R45168, Department of State, Foreign Operations and Related Programs: FY2019 Budget and Appropriations , by Susan B. Epstein, Marian L. Lawson, and Cory R. Gill."], "subsections": []}, {"section_title": "Account Descriptions", "paragraphs": [], "subsections": []}, {"section_title": "Title I\u2014Department of State and Related Agency", "paragraphs": ["Title I funds (1) State Department personnel, operations, and programs; (2) U.S. participation in international organizations, such as the United Nations, and international commissions; (3) U.S. government, nonmilitary international broadcasting; and (4) several U.S. nongovernmental agencies and other U.S. commissions and interparliamentary groups, such as the National Endowment for Democracy. "], "subsections": [{"section_title": "Administration of Foreign Affairs", "paragraphs": ["The Administration of Foreign Affairs account category provides funding for the State Department's personnel, operations, and programs; including diplomatic security and the construction and maintenance of its facilities in the United States and around the world. It is composed of the following component accounts:"], "subsections": [{"section_title": "Diplomatic Programs (DP)", "paragraphs": ["DP, the principal operating account of the State Department, includes four funding categories: ", "Human Resources . Funds the salaries of domestic and overseas State Department employees, training services at the Foreign Service Institute, the operating costs of the Bureau of Human Resources, and diversity recruitment and development programs such as the Pickering and Rangel Fellowships. Overseas Programs . Funds the Department's various regional and functional bureaus, along with bureau-administered foreign policy programs. Historically, the account has, for instance, funded the bureaus of African Affairs, International Organization Affairs, and Conflict and Stabilization Operations as well as the costs of department employees' travel on assignment. Diplomatic Policy and Support . Funds many of the Department's strategic and managerial units, such as the Office of the Secretary and the Bureaus of Administration, Budget and Planning, Legislative Affairs, Information Resource Management, the Comptroller and Global Financial Services, and Intelligence and Research, among others. Security Programs . Funds the Department's security programs and policies, including those implemented by the Bureau of Counterterrorism and Countering Violent Extremism and the Office of Foreign Missions. It is also the primary source of funding for the Worldwide Security Protection subaccount, which provides funds to the Bureau of Diplomatic Security and other bureaus to implement programs to protect the department's staff, property, and information. ", "Until FY2019, this account (named Diplomatic & Consular Programs in prior years) included some consular fees and surcharges that offset expenditures. Beginning with FY2019 appropriations, the State Department is to use that revenue to fund the administration of consular and border security programs directly under a new Consular and Border Security Programs account (the CBSP account). That account does not require annual appropriations and thus does not appear in the FY2019 act. "], "subsections": []}, {"section_title": "Capital Investment Fund (CIF)", "paragraphs": ["CIF funds information technology (IT) and other capital equipment procurement to ensure efficient management, coordination, and utilization of IT resources. Funds allocated to this account, established by Congress in 1994, have supported the ongoing IT modernization initiative at the State Department. "], "subsections": []}, {"section_title": "Office of Inspector General (OIG)", "paragraphs": ["This account funds the State Department's Office of Inspector General, which conducts independent audits, inspections, evaluations, and investigations of the programs and offices of the State Department and the Broadcasting Board of Governors (operationally renamed in 2018 as the U.S. Agency for Global Media). "], "subsections": []}, {"section_title": "Educational and Cultural Exchange Programs", "paragraphs": ["This account funds the State Department's management of U.S. educational, professional, and cultural exchanges, such as the Fulbright Scholar Program, the International Visitor Leadership Program, and the Congress-Bundestag Youth Exchange. Authority for these programs derive from the Mutual Education and Cultural Exchange Act of 1961 (popularly referred to as the Fulbright-Hays Act; P.L. 87-256 ), as amended, though several of these programs predate that act."], "subsections": []}, {"section_title": "Representation Expenses", "paragraphs": ["The Representation Expenses account reimburses Foreign Service Officers for entertainment of government officials to advance diplomacy."], "subsections": []}, {"section_title": "Protection of Foreign Missions and Officials", "paragraphs": ["This account funds reimbursable expenses to municipal, state, and federal law enforcement agencies throughout the United States for \"extraordinary\" services provided to foreign missions and officials, in particular to the New York Police Department to protect representatives to the United Nations. "], "subsections": []}, {"section_title": "Embassy Security, Construction, and Maintenance (ESCM)", "paragraphs": ["ESCM funds provide for the general management and maintenance of U.S. State Department embassies and other facilities in the United States and abroad. This includes ongoing renovations to the State Department headquarters in Washington, DC. This account also funds Worldwide Security Upgrades (WSU), which provides the State Department's share of the costs to plan, design, and build new embassies and facilities to comply with requirements of the Secure Embassy Construction and Counterterrorism Act of 1999 (Title VI of P.L. 106-113 )."], "subsections": []}, {"section_title": "Emergencies in the Diplomatic and Consular Service", "paragraphs": ["This account addresses unexpected events, such as the evacuation of U.S. diplomats and their families or, in some circumstances, private U.S. citizens or third-country nationals as a result of natural disasters, epidemics, terrorist attacks, or civil unrest. It also funds some nonemergency activities of senior Administration officials, such as G-20 Summits or the Organization for American States (OAS) General Assembly (Basic Authorities Act, \u00a74). This account also funds rewards for informants about international terrorism (the \"Rewards for Justice\" program), narcotics-related activities, transnational organized crime, and war crimes (Basic Authorities Act, \u00a736). For example, information obtained through Rewards for Justice led to the capture and conviction of one of the planners of the 1993 World Trade Center bombing in New York."], "subsections": []}, {"section_title": "Repatriation Loans Program Account", "paragraphs": ["The Repatriation Loans Program Account subsidizes small loans to destitute U.S. citizens abroad who are unable to fund their return to the United States (Basic Authorities Act, \u00a74). "], "subsections": []}, {"section_title": "Payment to the American Institute in Taiwan (AIT)", "paragraphs": ["AIT is a nonprofit, private corporation established for \"[p]rograms, transactions, and other relations conducted or carried out by the President or any agency of the United States Government with respect to Taiwan,\" in accordance with the Taiwan Relations Act ( P.L. 96-8 ). It provides consular services for Americans and the people of Taiwan. The account supports a contract providing for salaries, benefits, and other expenses associated with maintaining AIT. "], "subsections": []}, {"section_title": "International Center, Washington, DC", "paragraphs": ["The International Center, or the International Chancery Center (ICC), is a 47-acre diplomatic enclave owned by the U.S. government and is located in Washington, DC. Fees from other executive agencies and proceeds from past leases fund ICC development, maintenance, security, and repairs. Congress established and authorized the ICC in the International Center Act ( P.L. 90-553 ) to provide territory for diplomatic missions of foreign governments to the United States."], "subsections": []}, {"section_title": "Payment to the Foreign Service Retirement and Disability Fund", "paragraphs": ["The payment covers the U.S. government's contribution to the Foreign Service Retirement and Disability System and the Foreign Service Pension System for USAID and the Department of State. "], "subsections": []}]}, {"section_title": "International Organizations", "paragraphs": ["Through the following two accounts in the International Organizations category, the United States meets its assessed obligations (dues) to the many international organizations and peacekeeping efforts that the United States supports. Title V of SFOPS appropriates voluntary contributions to multilateral organizations."], "subsections": [{"section_title": "Contributions to International Organizations (CIO)", "paragraphs": ["The Contributions to International Organizations account funds U.S.-assessed contributions to the budget of the United Nations, certain U.N. system organizations, inter-American organizations, war crimes tribunals, and other intergovernmental organizations. "], "subsections": []}, {"section_title": "Contributions for International Peacekeeping Activities (CIPA)", "paragraphs": ["The Contributions for International Peacekeeping Activities account funds U.S.-assessed contributions to U.N. peacekeeping operations worldwide, as well as assessed contributions to certain ad hoc courts, such as the International Criminal Tribunal for the Former Yugoslavia and the International Residual Mechanism for Criminal Tribunals."], "subsections": []}]}, {"section_title": "American Sections, International Commissions", "paragraphs": ["Accounts under the International Commissions category provide funding for U.S. obligations under law or treaty to the following bilateral and multilateral commissions: ", "International Joint Commission and the International Boundary Commission (both between the United States and Canada), International Boundary and Water Commission and the Border Environment Cooperation Commission (both between the United States and Mexico); and International fisheries and waters commissions."], "subsections": []}, {"section_title": "Broadcasting Board of Governors (BBG)15", "paragraphs": ["The sole listing under the \"Related Agency\" category, BBG is the U.S. civilian international media agency. BBG was established as the successor to the U.S. Information Agency in the International Broadcasting Act of 1994 (Title III of P.L. 103-236 ). BBG renamed itself the United States Agency for Global Media in 2018, but recent appropriations have maintained the BBG title. It comprises the Voice of America (VOA) and Radio and TV Mart\u00ed (under the Office of Cuba Broadcasting [OCB]). BBG also funds grantee organizations Radio Free Europe/Radio Liberty (RFE/RL), Radio Free Asia (RFA), and Alhurra TV and Radio Sawa (under the Middle East Broadcasting Networks [MBN]). The broadcasting category is divided into two accounts, as follows."], "subsections": [{"section_title": "International Broadcasting Operations", "paragraphs": ["This account funds the operations of the BBG and all U.S. government, nonmilitary international broadcasts, including salaries and benefits for new hires and other operating expenses. Programmatic expansion priorities in FY2019 include new Russian and Korean language programs, an increased focus on Venezuela, and a digital media program in the Middle East and North Africa to counter extremist narratives. "], "subsections": []}, {"section_title": "Broadcasting Capital Improvements", "paragraphs": ["The Capital Improvements account supports improvements and maintenance of BBG's global transmission network and digital multimedia infrastructure and capital projects. "], "subsections": []}]}, {"section_title": "Related Programs", "paragraphs": ["This category includes funding to entities created by the U.S. government that today are nongovernmental but pursue objectives aligned with U.S. foreign policy. Several of these organizations fund themselves with income from trust funds created by Congress, so appropriations authorize use of that income and do not require appropriation of funds. Others receive funding exclusively from the U.S. government, or from both the U.S. government and other donors."], "subsections": [{"section_title": "The Asia Foundation", "paragraphs": ["The Asia Foundation is a nonprofit organization based in San Francisco that seeks to strengthen democratic institutions in Asia, counter violent extremism, promote economic opportunities for Asian and U.S. businesses, and improve U.S.-Asian relations. In addition to annual appropriations, it receives support from foreign governments, nonprofits, corporations, competitive grants, and individual charitable contributions."], "subsections": []}, {"section_title": "United States Institute of Peace (USIP)", "paragraphs": ["The U.S. Institute of Peace works to increase the United States' capacity to prevent, mitigate, and help resolve international conflict without violence. Congress established USIP in 1984 to offer training, analysis, and additional resources to governments, organizations, and individuals seeking to build peace (United States Institute of Peace Act, Title XVII of P.L. 98-525 ). It is prohibited from receiving non-U.S. government funding."], "subsections": []}, {"section_title": "Center for Middle Eastern-Western Dialogue Trust Fund", "paragraphs": ["The International Center for Middle Eastern-Western Dialogue (the Hollings Center), based in Istanbul, promotes dialogue between the United States and nations with significant Muslim populations to generate new thinking on key international issues and expand people-to-people contacts. Congress established it in 2004 with a dedicated trust fund ( P.L. 108-199 ). "], "subsections": []}, {"section_title": "Eisenhower Exchange Fellowship Program", "paragraphs": ["The Eisenhower Exchange Program brings professionals who are rising leaders in their countries to the United States and sends their U.S. counterparts abroad. Financed by a dedicated trust fund, it provides programs tailored to each participant and career development opportunities to prepare participants for increasingly senior positions in government, business, and nongovernmental institutions. "], "subsections": []}, {"section_title": "Israeli-Arab Scholarship Program (IASP)", "paragraphs": ["Financed by a dedicated trust fund, the IASP funds scholarships for Israeli Arabs to attend institutions of higher education in the United States. "], "subsections": []}, {"section_title": "East-West Center", "paragraphs": ["The East-West Center, based in Hawaii, promotes better relations and understanding among the people and nations of the Asia-Pacific region and the United States through cooperative study, training, and research. In addition to annual appropriations, it receives support from foreign governments, nonprofits, corporations, competitive federal grants, and individual charitable contributions."], "subsections": []}, {"section_title": "National Endowment for Democracy (NED)", "paragraphs": ["NED is a private, independent, nonprofit organization that is dedicated to fostering the growth of a wide range of democratic institutions abroad, including political parties, trade unions, free markets, and business organizations. Established in the National Endowment for Democracy Act of 1983 ( Title V of P.L. 98-164 ), NED supports a variety of organizations but maintains four \"core institutes,\" each affiliated with a U.S. domestic organization. The National Democratic Institute (NDI) and the International Republican Institute (IRI) are nonpartisan entities that promote election-related capacity building. The Center for International Private Enterprise, affiliated with the U.S. Chamber of Commerce, supports the private sector by strengthening democratic institutions, and the Solidarity Center, associated with the AFL-CIO, supports labor rights in workplaces abroad. NED also receives funding from the Democracy Fund in Title III of SFOPS."], "subsections": []}]}, {"section_title": "Other Commissions", "paragraphs": ["Congress has established a number of organizations to advance selected U.S. objectives in the international arena. Most of these organizations are listed under the Legislative Branch Boards and Commissions in the President's budget request to Congress. Though all except the Commission for the Preservation of America's Heritage Abroad are legislative branch bodies, Congress funds them through SFOPS appropriations given their international affairs focus."], "subsections": [{"section_title": "Commission for the Preservation of America's Heritage Abroad", "paragraphs": ["This 21-member independent executive agency seeks to identify cemeteries, monuments, and historic buildings in Eastern and Central Europe that are associated with the heritage of U.S. citizens, particularly endangered properties and especially American Jews. It works to obtain, in cooperation with the Department of State, assurances from the governments of the region that the properties will be protected and preserved. The commission also encourages, sponsors, assists, and otherwise facilitates private and foreign government site restoration, preservation, and memorialization projects."], "subsections": []}, {"section_title": "United States Commission on International Religious Freedom (USCIRF) 16", "paragraphs": ["Established in 1998, the commission seeks to promote international religious freedom in consultation with the State Department. Composed of both presidential and congressional appointees, it advises and makes policy recommendations to the President, the Secretary of State, and Congress through ad hoc publications and an annual report."], "subsections": []}, {"section_title": "Commission on Security and Cooperation in Europe (CSCE)", "paragraphs": ["The CSCE, established in 1975, seeks to advance U.S. interests by monitoring and promoting human rights, military security, and economic cooperation in the 57-country Organization on Security and Cooperation in Europe (OSCE). Members of Congress lead the commission jointly with executive branch officials."], "subsections": []}, {"section_title": "Congressional-Executive Commission on the People's Republic of China (CECC)", "paragraphs": ["The CECC monitors human rights and the development of rule of law in China . Members of Congress lead the CECC jointly with executive branch officials."], "subsections": []}, {"section_title": "United States-China Economic and Security Review Commission", "paragraphs": ["This commission, appointed by congressional leadership, monitors, investigates, and submits to Congress an annual report and recommendations on the national security implications of the bilateral trade and economic relationship between the United States and the People's Republic of China."], "subsections": []}, {"section_title": "Western Hemisphere Drug Policy Commission", "paragraphs": ["Established in 2017, this commission is required to submit a report evaluating and proposing alternatives for U.S. foreign policy regarding the supply and abuse of illicit drugs in the Western Hemisphere. Unlike the other commissions, it is scheduled to disband after the report's completion."], "subsections": []}]}]}, {"section_title": "Title II\u2014United States Agency for International Development (USAID)", "paragraphs": ["This title provides operational funds for USAID, an independent agency under the foreign policy guidance of the Department of State directly responsible for implementing most bilateral development assistance and disaster relief programs, many of which are funded in Title III of the State, Foreign Operations Appropriations Act. "], "subsections": [{"section_title": "Operating Expenses (OE)", "paragraphs": ["The OE account funds USAID's overseas and domestic operational expenses, including salaries and benefits, overseas mission activities, staff training, physical security, and information technology maintenance. "], "subsections": []}, {"section_title": "Capital Investment Fund (CIF)", "paragraphs": ["A program begun in FY2003, the CIF supports the modernization of USAID's information technology systems. Unlike the State Department's Capital Investment Fund, USAID's CIF also funds the construction of facilities overseas in lieu of a separate component account to that end."], "subsections": []}, {"section_title": "Office of Inspector General", "paragraphs": ["This account supports operational costs of USAID's Office of the Inspector General, which conducts audits and investigations of USAID programs, as well as of the Millennium Challenge Corporation, the Inter-American Foundation, the United States African Development Foundation, and the Overseas Private Investment Corporation."], "subsections": []}]}, {"section_title": "Title III\u2014Bilateral Economic Assistance", "paragraphs": ["Under this title, funds are appropriated in support of U.S. government departments and independent agencies conducting humanitarian, development, and other programs meeting U.S. foreign policy objectives throughout the world. "], "subsections": [{"section_title": "Global Health Programs (GHP)", "paragraphs": ["GHP is made up of two accounts supporting multiple health activities conducted by USAID and by the State Department (FAA, \u00a7104)."], "subsections": [{"section_title": "Global Health-USAID", "paragraphs": ["Managed by USAID, appropriations in this account fund programs focused on combating infectious diseases such as HIV/AIDS, malaria, and tuberculosis. Programs also focus on immunization, oral rehydration, maternal and child health, vulnerable children, and family planning and reproductive health."], "subsections": []}, {"section_title": "Global Health-State", "paragraphs": ["Managed by the Office of the Global AIDS Coordinator (OGAC) in the Department of State, this account is the largest source of funding for the President's Emergency Plan for AIDS Relief (PEPFAR). Funds from this account are transferred to programs implemented by USAID, the Department of Defense, the Centers for Disease Control and Prevention, and the Peace Corps, among others. A specified amount from the Global Health-State account supports the U.S. contribution to the multilateral Global Fund to Fight AIDS, Tuberculosis, and Malaria. "], "subsections": []}]}, {"section_title": "Development Assistance (DA)", "paragraphs": ["Managed by USAID, the Development Assistance account funds programs aligned with priorities in Part I of the FAA, including sectors referenced in Chapters 1 and 2 targeting", "agriculture and rural development (\u00a7103); education and human capital (\u00a7105); energy (\u00a7106[b]); urban economic and social development (\u00a7106[d]); technical cooperation and development (\u00a7106[d][1]); economic development research and evaluation (\u00a7106[d][2]); and disaster preparedness and reconstruction (\u00a7106[d][3]); U.S. citizen-sponsored schools and hospitals overseas (\u00a7214); and micro-, small-, and medium-enterprise development programs (including credit access) (\u00a7252). ", "Through the FAA's general authorities, DA also funds environment, democracy and governance, water and sanitation, and human rights programs, among others. In sub-Saharan Africa specifically, DA funds particular priorities for that region described in FAA Chapter 10, including agricultural production and natural resources, health, voluntary family planning services, education, and income-generating activities (\u00a7496). "], "subsections": []}, {"section_title": "International Disaster Assistance (IDA)", "paragraphs": ["Managed by the USAID Office of Foreign Disaster Assistance, this account provides relief and rehabilitation to nations struck by natural and manmade disasters and emergencies (FAA, \u00a7491[b]). In recent years, the account has been used increasingly to provide emergency food assistance to supplement commodity food aid provided through the P.L. 480 Title II account in the agriculture appropriation (FAA, \u00a7491[c]). In 2017, for example, approximately half of obligated IDA funding went to emergency food aid, compared with less than 5% in 2010."], "subsections": []}, {"section_title": "Transition Initiatives", "paragraphs": ["The Transition Initiatives account supports the activities of USAID's Office of Transition Initiatives (OTI), an entity launched in 1994 to bridge the gap between stabilization and sustainable development. It supports flexible, short-term assistance projects in political transition countries that are moving from war to peace, civil conflict to national reconciliation, or where political instability has not yet erupted into violence and where conflict mitigation might prevent the outbreak of such violence. Although both Transition Initiatives and IDA operate under disaster response authority of the FAA (\u00a7491), IDA focuses on humanitarian needs, while Transition Initiatives targets political factors to build peaceful and democratic societies. "], "subsections": []}, {"section_title": "Complex Crises Fund", "paragraphs": ["The fund supports USAID responses to emerging or unforeseen crises with projects aimed at addressing the root causes of conflict or instability. Previously funded through Defense appropriations (as authorized in the National Defense Authorization Act of 2006, Section 1207, P.L. 109-163 ), today USAID administers it under the general authorities of the FAA. Unlike IDA, it may not be used to respond to disasters, and unlike Transition Initiatives, this account is not associated with its own operational component; rather, it is a flexible funding source available to the USAID Administrator."], "subsections": []}, {"section_title": "Development Credit Authority (DCA)", "paragraphs": ["DCA is a USAID-administered mechanism to subsidize loan guarantees in support of housing projects, water and sanitation systems, and microcredit and small enterprise development, among other programs. In addition to appropriations for the administrative costs of running DCA, Congress authorizes transfers from other component accounts to DCA for loan guarantees. For FY2019, only DA, GHP, and Assistance for Europe, Eurasia, and Central Asia are authorized to transfer funds to DCA. In 2018, Congress passed the Better Utilization of Investments Leading to Development (BUILD) Act (Division F of P.L. 115-254 ), which requires the merger of DCA into a new United States International Development Finance Corporation. FY2019 appropriations for DCA also provide for the costs associated with this transfer. "], "subsections": []}, {"section_title": "Economic Support Fund (ESF)", "paragraphs": ["The Economic Support Fund, authorized under Part II, Chapter 4 of the FAA (\u00a7531), uses economic assistance to advance U.S. political and strategic goals in countries of special importance to U.S. foreign policy. Once used primarily in support of the Middle East peace process (in FY1997, for example, 87% of ESF went to Israel, Egypt, the West Bank and Jordan), the use of ESF funds has expanded in recent years to support a broader range of countries of importance to the U.S. counterterrorism strategy. ESF supports development projects that may be indistinguishable from those supported by other accounts, but is also used for occasional direct budget support aid and sovereign loan guarantees. The State Department makes ESF programming decisions; USAID, in large part, implements the programs."], "subsections": []}, {"section_title": "Democracy Fund", "paragraphs": ["This account supports democracy promotion programs overseen by the State Department's Bureau of Democracy, Human Rights and Labor (DRL). While in past years a portion of this funding was designated for USAID's Office of Democracy, Conflict, and Humanitarian Assistance, appropriations since FY2017 have gone exclusively to DRL, though transfers to USAID may occur. Authorities for this account are found throughout the FAA, but specific reference to the Democracy Fund was added in 2002 (\u00a7116, P.L. 107-228 )."], "subsections": []}, {"section_title": "Assistance for Europe, Eurasia, and Central Asia (AEECA)", "paragraphs": ["This account provides economic assistance to once-Communist states of the former Soviet Union and Eastern Europe, and is the successor to two earlier accounts that channeled aid to the region after the Cold War. AEECA was discontinued at the Obama Administration's request between FY2013 and FY2015, during which time these activities were funded through the ESF, GHP, and INCLE accounts, and reinstated in FY2016. Authorities under this account are found in the FAA (\u00a7498-499) and the Support for Eastern European Democracy (SEED) Act of 1989 ( P.L. 101-179 )."], "subsections": []}, {"section_title": "Migration and Refugee Assistance (MRA)", "paragraphs": ["The Migration and Refugee Assistance account, administered by the State Department's Bureau of Population, Refugees, and Migration (PRM), supports refugee assistance and protection activities worldwide. The MRA account supports U.S. contributions to U.N. entities such as the U.N. High Commissioner for Refugees (UNHCR) and the International Organization for Migration (IOM), as well as organizations such as the International Committee for the Red Cross. It funds resettlement of refugees to other countries as well as processing and initial placement of refugees to the United States. The Migration and Refugee Assistance Act of 1962, as amended, sets out these authorities ( P.L. 87-510 ). "], "subsections": []}, {"section_title": "United States Emergency Refugee and Migration Assistance (ERMA) Fund", "paragraphs": ["ERMA is a humanitarian contingency fund for rapid deployment in unanticipated urgent refugee and migrant emergencies. Appropriations typically replenish this account up to a congressionally authorized level, and the executive branch must notify Congress when funds are used."], "subsections": []}, {"section_title": "Independent Agencies", "paragraphs": ["Several agencies operate independently and report directly to the Executive Office of the President, unlike USAID, which operates under guidance from the Secretary of State. "], "subsections": [{"section_title": "Peace Corps23", "paragraphs": ["The Peace Corps sends U.S. volunteers to developing countries to provide technical aid and to promote mutual understanding on a people-to-people basis between the United States and citizens of foreign nations (Peace Corps Act of 1961, P.L. 87-293 ). "], "subsections": []}, {"section_title": "Millennium Challenge Corporation (MCC)24", "paragraphs": ["The MCC provides large-scale, five-year development grants to foreign governments. Known as \"compacts\" and underpinned by bilateral agreements, these grants are intended to promote economic growth and to eliminate extreme poverty in countries chosen and determined to be eligible, in part, based on their demonstrated commitment to just and democratic governance; investment in health, education, and the environment; and support for economic freedom. Congress established and authorized the MCC in the Millennium Challenge Act of 2003 (Title VI of P.L. 108-199 ). "], "subsections": []}, {"section_title": "Inter-American Foundation (IAF)", "paragraphs": ["The IAF is a nonprofit corporation that finances small-scale enterprise and grassroots community self-help activities aimed at the social and economic development of poor people in Latin America, as originally set out in the Foreign Assistance Act of 1969 ( P.L. 91-179 ) establishing it as an independent entity."], "subsections": []}, {"section_title": "United States African Development Foundation (USADF)", "paragraphs": ["The USADF is a nonprofit corporation that finances small-scale enterprise and grassroots community self-help activities aimed at the social and economic development of poor people in Africa. Modeled after the IAF, the African Development Foundation Act established it in 1980 (Title V of P.L. 96-533 )."], "subsections": []}]}, {"section_title": "Department of the Treasury: International Affairs Technical Assistance", "paragraphs": ["This program deploys financial advisors to provide technical assistance to developing or transitional countries in support of economic reforms, with a focus on banking and financial institutions, financial crimes, government debt, revenue policy, and budget and financial accountability (FAA \u00a7129, added in 1998 by P.L. 105-277 )."], "subsections": []}]}, {"section_title": "Title IV\u2014International Security Assistance", "paragraphs": [], "subsections": [{"section_title": "Department of State", "paragraphs": [], "subsections": [{"section_title": "International Narcotics Control and Law Enforcement (INCLE)", "paragraphs": ["INCLE funds international counternarcotics activities; programs combatting human and wildlife trafficking; and rule of law activities, including support for judicial reform and law enforcement capacity building. Many of the activities under INCLE are overseen and coordinated through the State Department's Bureau of International Narcotics and Law Enforcement Affairs (INL). More than half of funding in recent years has gone to programs in the western hemisphere; other major recipients have included Afghanistan, Pakistan, and West Bank/Gaza. INCLE authorities primarily derive from the FAA (\u00a7481-490)."], "subsections": []}, {"section_title": "Nonproliferation, Anti-terrorism, Demining, and Related Programs (NADR)", "paragraphs": ["This account funds a variety of State Department-managed activities aimed at countering proliferation of weapons of mass destruction (FAA, \u00a7581-586), supporting antiterrorism training and related activities (FAA, \u00a7571-575), and promoting demining operations in developing nations (FAA, \u00a7301). It also funds voluntary contributions to certain nonproliferation-focused international organizations (FAA, \u00a7301). Programs also finance certain defense articles related to nonproliferation, demining, and antiterrorism to friendly governments (Arms Export Control Act, \u00a723, P.L. 90-629), and disarmament in the former Soviet Union (FREEDOM Support Act, \u00a7504, P.L. 102-511 )."], "subsections": []}, {"section_title": "Peacekeeping Operations (PKO)", "paragraphs": ["Unlike the Title I Contributions to Peacekeeping Activities (CIPA) account, which provides assessed funds for U.N. peacekeeping operations, the PKO account provides voluntary support for multilateral efforts in conflict resolution, such as the training of African peacekeepers and funding operations of the Multinational Force and Observers mission in the Sinai. The State Department controls the funds and sets PKO program policies (FAA, \u00a7551-563). DOD implements the activities. Funding through this account has in recent years been devoted almost entirely on the Middle East and sub-Saharan Africa."], "subsections": []}]}, {"section_title": "Funds Appropriated to the President", "paragraphs": [], "subsections": [{"section_title": "International Military Education and Training (IMET)", "paragraphs": ["Through IMET, the United States provides training and education to selected foreign military and civilian personnel on U.S. military practices and standards, including democratic values like civilian control of the military. Participants take courses at military education facilities in the United States or receive instruction from U.S. training teams abroad. The State Department controls the funds and has policy authority over the program (FAA, \u00a7541-549), which the Department of Defense implements."], "subsections": []}, {"section_title": "Foreign Military Financing Program (FMF)", "paragraphs": ["The Foreign Military Financing Program supports U.S. overseas arms transfers on a loan and grant basis. Funding generally may be used by recipient countries only to purchase U.S. weapons, equipment and training, though a portion of FMF to Israel may be used to support purchases from Israeli defense firms. The State Department controls the funds and has policy authority (Arms Export Control Act, \u00a723). The Department of Defense implements this program. "], "subsections": []}]}]}, {"section_title": "Title V\u2014Multilateral Assistance", "paragraphs": [], "subsections": [{"section_title": "International Organizations and Programs (IO&P)", "paragraphs": ["This account provides voluntary State Department-administered U.S. donations that support the programs of international agencies involved in a range of development, humanitarian, and scientific activities, including the U.N. Development Program (UNDP), U.N. Environment Program (UNEP), U.N. Children's Fund (UNICEF), and U.N. Population Fund (UNFPA). This is distinct from the CIO account under Title I, which funds assessed contributions (dues) to international organizations. Authority is derived from the FAA (\u00a7\u00a7301-307 on International Organizations and Programs)."], "subsections": []}, {"section_title": "International Financial Institutions27", "paragraphs": ["Under this category, funds are provided through the Department of the Treasury to a wide range of multilateral financial institutions, which offer loans\u2014both \"soft\" (i.e., concessional) and \"hard\" (i.e., near-market rate)\u2014and some grants to developing countries and private sector entities in those countries. Not all international financial institutions require or receive U.S. contributions from year to year; some receive funding under multiyear \"replenishments.\" Authorizations for these contributions have historically been provided in appropriations acts of the relevant year.", "In the case of concessional lending or grant-making institutions, U.S. appropriations contribute through annual installments toward periodically-agreed donor replenishments as capital is drawn down. Nonconcessional bank institutions typically require new financial commitments only in order to increase the institution's capitalization, as in the ongoing capital increase for the African Development Bank (see below). In FY2019, funds were appropriated for the following entities:"], "subsections": [{"section_title": "Global Environment Facility (GEF)", "paragraphs": ["Cosponsored by the UNDP, UNEP, and the World Bank, the GEF, administered by the World Bank, makes grants to help developing countries deal with global environmental problems."], "subsections": []}, {"section_title": "World Bank: International Development Association (IDA)", "paragraphs": ["As the World Bank's \"soft loan\" window, IDA provides concessional loans, grants, and debt relief to the lowest-income countries in the world."], "subsections": []}, {"section_title": "Asian Development Fund (AsDF)", "paragraphs": ["The AsDF is the grants-only window of the Asian Development Bank (AsDB), which finances economic development programs in lower-income countries in Asia and the Pacific. AsDF ceased issuing concessional loans in 2017. AsDB now finances and issues all concessional loans directly through its capital reserves."], "subsections": []}, {"section_title": "African Development Bank (AfDB)", "paragraphs": ["The AfDB lends at near-market rates to public and private entities, with special emphasis on agriculture, infrastructure, and industrial development. To support a general capital increase, legislative provisions include both paid-in capital and callable capital subscriptions."], "subsections": []}, {"section_title": "African Development Fund (AfDF)", "paragraphs": ["Part of the African Development Bank, the AfDF provides concessional loans and grants to low-income African countries. "], "subsections": []}, {"section_title": "International Fund for Agricultural Development (IFAD)", "paragraphs": ["IFAD is a UN-system financial institution that issues grants and low-interest loans to developing countries to increase rural incomes, improve nutritional levels, and advance food security."], "subsections": []}]}]}, {"section_title": "Title VI\u2014Export and Investment Assistance", "paragraphs": [], "subsections": [{"section_title": "Export-Import Bank of the United States31", "paragraphs": ["Ex-Im Bank issues direct loans, loan guarantees, and export credit insurance to support U.S. exports of goods and services. It aims to support U.S. jobs by providing such financing and insurance when the private sector is unwilling or unable to do so alone and/or to counter financing offered by foreign countries through their export credit agencies. Ex-Im Bank program and administrative expenses are financed by collections such as loan interest, risk premia, and other fees, for which congressional appropriations establish a ceiling. Congress also provides an appropriation for the agency's Office of Inspector General. Ex-Im Bank's enabling legislation is the Export-Import Bank Act of 1945 (P.L. 79-173). "], "subsections": []}, {"section_title": "Overseas Private Investment Corporation (OPIC)32", "paragraphs": ["OPIC offers political risk insurance, guarantees, and investment financing to encourage U.S. firms to invest in developing countries, under the authority of the FAA (\u00a7231-240). Although the agency funds itself in full with loan receipts, appropriations set ceilings on administrative expenses to carry out the insurance programs and denotes a level of support for credit financing. The BUILD Act authorizes a new U.S. International Development Finance Corporation (IDFC), which is to absorb OPIC along with portions of USAID (See DCA section) and assume their responsibilities. It also adds new authorities to this entity. The aforementioned section of the FAA is to be repealed after the IDFC is operational, thereby terminating OPIC."], "subsections": []}, {"section_title": "Trade and Development Agency (TDA)34", "paragraphs": ["TDA funds project preparation services such as feasibility studies and other activities to link U.S. businesses to export opportunities in emerging markets for infrastructure and other development projects (FAA, \u00a7611). For example, TDA funds reverse trade missions which bring foreign decision-makers to the United States."], "subsections": []}]}, {"section_title": "Title VII\u2014General Provisions", "paragraphs": ["General Provisions set out limitations and prohibitions on assistance; administrative, notification, and reporting requirements; and more detailed funding requirements for specific accounts in other titles of the legislation. This title specifies also allocations for various aid sectors, including education, democracy promotion, water and sanitation, and food security, as well as cross-cutting issues such as gender equality. In addition, Title VII provides more detail about aid to certain countries and regions."], "subsections": []}, {"section_title": "Title VIII\u2014Overseas Contingency Operations/Global War on Terrorism", "paragraphs": ["Since FY2012, executive branch budget requests have distinguished between \"core\" or \"enduring\" international affairs funding and funding to support \"overseas contingency operations\" (OCO). The OCO designation was described initially in budget documents as reflecting \"the extraordinary costs of Department [of State] and U.S. Agency for International Development (USAID) operations and programs in Afghanistan, Iraq, and Pakistan,\" its use quickly expanded to include a broader range of activities and countries. OCO funds are not counted toward spending caps established by the Budget Control Act, 2011, as amended ( P.L. 112-25 ), and as a result have been used as a means of maintaining international affairs funding levels while complying with BCA budget restraints. While the Trump Administration has proposed the elimination of OCO funding under SFOPS for FY2019 and FY2020, Congress has continued to use the designation in SFOPS legislation. OCO funding supports accounts that received core funding in Titles I-V of the legislation, but is identified separately in Title VIII. ", "Appendix A. State, Foreign Operations Authorizing Legislation and U.S. Code References"], "subsections": []}]}}
{"id": "R44389", "title": "General and Flag Officers in the U.S. Armed Forces: Background and Considerations for Congress", "released_date": "2019-02-01T00:00:00", "summary": ["In the exercise of its constitutional authority over the Armed Forces, Congress has enacted an array of laws which govern important aspects of military officer personnel management, including appointments, assignments, grade structure, promotions, and separations. Some of these laws are directed specifically at the most senior military officers, known as general and flag officers (GFOs). Congress periodically reviews these laws and considers changes as it deems appropriate. Areas of congressional interest have included the number of GFOs authorized, the proportion of GFOs to the total force, compensation levels of GFOs, and duties and grades of certain GFOs.", "As of November 1, 2018, there were 891 active duty GFOs subject to statutory caps, which is 72 less than the maximum of 963 authorized by law. There were also another 29 exempt from the statutory caps. The current number is about average for the post-Cold War era, though substantially lower than the number of GFOs in the 1960s-1980s, when the Armed Forces were much larger in size than they are today. However, while always very small in comparison to the total force, the general and flag officer corps has increased as a percentage of the total force over the past five decades. GFOs made up about one-twentieth of one percent (0.048%) of the total force in 1965, while they made up about one-fifteenth of one percent (0.069%) of the total force in 2018, indicating that the share of the total force made up of GFOs increased by 44%. Some argue that this increased proportion of GFOs is wasteful and contributes to more bureaucratic decisionmaking processes. Others counter that the increased proportion is linked to the military's greater emphasis on joint and coalition operations, core organizational requirements, and the increasing use of advanced technologies.", "Compensation for GFOs varies. One commonly used measure of compensation, known as regular military compensation (RMC), includes basic pay, basic allowance for housing, basic allowance for subsistence, and the federal tax advantage associated with allowances, which are exempt from federal income tax. In 2019, the lowest-ranking GFOs make about $204,000 per year in RMC, while the highest-ranking GFOs make about $238,000 per year.", "Congress has also used its authority to specify the grade and duties of certain GFO positions. For example, Congress increased the grade of the Chief of the National Guard Bureau (CNGB) from Lieutenant General to General in 2008. Three years later, Congress again changed the law to specify that the CNGB was a member of the Joint Chiefs of Staff whose duties included \"the specific responsibility of addressing matters involving non-Federalized National Guard forces in support of homeland defense and civil support missions.\" In 2016, Congress removed the statutory grade requirement from 54 GFO positions.", "This report provides an overview of active duty GFOs in the United States Armed Forces\u2014including authorizations, duties, and compensation\u2014historical trends in the proportion of GFOs relative to the total force, criticisms and justifications of GFO to total force proportions, and statutory controls. National Guard and Reserve GFOs are not addressed in this report, unless they are serving on active duty in a manner that counts against the active duty caps on GFOs."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["The Constitution provides Congress with broad powers over the Armed Forces, including the power \"to raise and support Armies,\" \"to provide and maintain a Navy,\" and \"to make Rules for the Government and Regulation of the land and naval Forces.\" It also provides the Senate with the authority to provide \"Advice and Consent\" on presidential nominations of \"all other Officers of the United States,\" which includes military officers. On the basis of its constitutional authority, Congress has passed a number of laws which govern important aspects of military officer personnel management, including appointments, assignments, grade structure, promotions, and separations. ", "The most senior officers in the Army, Air Force, and Marine Corps are known as general officers. The most senior officers in the Navy are known as flag officers. The phrase \"general and flag officers\" or \"GFO\" refers to all officers in paygrades O-7 through O-10, thereby including one-star, two-star, three-star, and four-star officers. At the highest level, O-10, GFOs hold the most visible and important military positions in the Department of Defense, including the Chairman of the Joint Chiefs of Staff, the chiefs of the four military services, and the combatant commanders. At the lowest level, O-7, they hold positions that span an array of roles, including commanders, deputy commanders, and key staff roles in large organizations. ", "This report provides an overview of active duty GFOs in the United States Armed Forces\u2014including authorizations, duties, and compensation\u2014historical trends in the proportion of GFOs relative to the total force, criticisms and justifications of GFO to total force proportions, and statutory controls. National Guard and Reserve GFOs are not addressed in this report, unless they are serving on active duty in a manner that counts against the active duty caps on GFOs.", "Given the authority granted to general and flag officers, Congress has developed a statutory framework applicable to this elite group, and considers changes to these laws as it deems appropriate. Congress also periodically reviews the number, duties, and compensation of GFOs. A frequent tension during these reviews has been DOD requests for additional GFOs versus congressional concerns that there are too many GFOs. As one senior DOD official noted during a 1997 congressional hearing:", "throughout our history there has been a dialogue, just as is going on now, that has ebbed and flowed between the Congress and the military on the number of general and flag officers we need.... I think it is fair to say that over the years, the Congress has consistently taken the view that we have needed fewer general and flag officers, and that we have taken the opposite view, that we needed more than the Congress would allow. These debates tended to intensify during periods of major downsizing and restructuring of our forces, such as after World War II, the Korean War, the Vietnam War, and now after the cold war.", "References in this report to specific grades (ranks) within the general and flag officer corps will use the appropriate capitalized title, insignia, or paygrade as indicated in Table 1 ."], "subsections": [{"section_title": "Current Number of General and Flag Officers", "paragraphs": ["As of November 1, 2018, there were 920 active duty GFOs, of which 891 were subject to the statutory caps and 29 were exempt from the statutory caps. Distribution by grade and service is summarized in Table 2 . The 891 GFOS subject to the statutory caps is lower than the maximum of 963 authorized in statute (see \" Current Grade Limits \" later in this report). This is in accord with an intentional decision made by DOD in 2011 as part of an efficiency initiative directed by then-Secretary of Defense Robert Gates. By keeping GFO numbers substantially below the maximum authorized, this policy provides DOD flexibility to respond to new requirements for GFOs without the delays caused by the need to find an \"offset\" by downgrading or eliminating another GFO position."], "subsections": []}, {"section_title": "Responsibilities of General and Flag Officer Positions", "paragraphs": ["While Congress has specified functions or duties for some key positions\u2014such as members of the Joint Chiefs of Staff, the Combatant Commanders, the top two officers of each service, the Commander of U.S. Special Operations Command, and the Chief of the National Guard Bureau \u2014the great majority of GFO positions are not defined in statute. In these instances DOD uses the following criteria for determining whether a position should be filled by a general or flag officer:", "Nature, characteristics, and function of the position; Grade and position of superior, principal subordinates, and lateral points of coordination; Degree of independence of operation; Official relations with other U.S. and foreign governmental positions; Magnitude of responsibilities; Mission and special requirements; Number, type, and value of resources managed and employed; Forces, personnel, value of equipment, total obligation authority; Geographic area of responsibility; Authority to make decisions and commit resources; Development of policy; National commitment to international agreements; Impact on national security and other national interests; and Effect on the prestige of the nation or the armed force"], "subsections": []}, {"section_title": "Historical Changes in General and Flag Officer Levels", "paragraphs": ["A summary of the number of active duty GFOs and the proportion of GFOs relative to the total force over the past five decades is provided in Table 3 . A review of GFO levels indicates an 11% increase in the number of four-star officers (36 on September 30, 1965 vs. 40 on September 30, 2018) and a 24% increase in the number of three-star officers (119 vs. 147). At the same time, the number of one-star and two-star officers has decreased by about 35% (1,129 vs. 734). ", "However, during this time period, the size of the total force was cut roughly in half, dropping from 2.66 million on September 30, 1965, to 1.32 million on September 30, 2018. Thus, a more salient measure may be the proportion of GFOs to the total force. Looking at the data from this perspective, it is clear that while GFOs have always made up a very small percentage of the total force, the general and flag officer corps has increased as a percentage of the total force over the past five decades. GFOs made up about one-twentieth of one percent (0.048%) of the total force in 1965, while they made up about one-fifteenth of one percent (0.070%) of the total force in 2018, indicating that the share of the total force made up of GFOs increased by 46%. This historical trend is more pronounced with respect to four-star officers (which grew from 0.0014% of the total force to 0.0030%, a 114% increase) and three-star officers (which grew from 0.0045% of the total force to 0.0112%, a 149% increase). One- and two-star officers as a percentage of the total force increased less rapidly (from 0.0425% of the total force to 0.0557%, a 31% increase). ", "These increases occurred at the same time that the size of the officer corps in general was increasing as a percentage of the total force. As indicated in the last column of Table 3 , between 1965 and 2018, the officer corps increased from 12.76% of the total force in 1965 to 17.51% in 2018, indicating that the share of the total force made up of officers increased by 37%. "], "subsections": []}, {"section_title": "Criticisms of the Increasing Proportion of GFOs", "paragraphs": ["There have been two principal criticisms raised against the increasing proportion of GFOs relative the total force. The first criticism revolves around the increased cost of employing a GFO in comparison to a lower ranking officer. The second relates to the belief that too many GFOs slow down decisionmaking processes. Each point is explained in more detail below.", "Cost . GFOs cost more to employ than officers of a lower rank. In part, this is due to the higher compensation they receive. For example, the average GFO in paygrade O-7 receives $204,405 in regular military compensation 14 in 2019, while the average officer in paygrade O-6 receives $180,709. Additionally, there can be other costs associated with GFOs, particularly at higher grades, such as the costs of larger staffs, official travel, security details, and aides. An example of this perspective was provided by a witness at a 2011 congressional hearing, who stated \"The progression towards a more top-heavy force is not without its consequences.... The cost of officers increases markedly with their rank, so taxpayers are overpaying whenever a G/FO is in a position that could be filled by a lower ranking officer.\" Decision making . Another criticism is that an increasing proportion of GFOs slows down decisionmaking by adding additional layers of management between the highest echelons of command and the lowest. In a 2010 speech, former Secretary of Defense Robert Gates criticized the impact of an increase in GFOs and senior civilians in making the Department of Defense a top-heavy and overly bureaucratic organization:", "During the 1990s, the military saw deep cuts in overall force structure\u2014the Army by nearly 40 percent. But the reduction in flag officers\u2014generals and admirals\u2014was about half that. The Department's management layers\u2014civilian and military\u2014and numbers of senior executives outside the services grew during that same period. Almost a decade ago, Secretary Rumsfeld lamented that there were 17 levels of staff between him and a line officer. The Defense Business Board recently estimated that in some cases the gap between me and an action officer may be as high as 30 layers.... Consider that a request for a dog-handling team in Afghanistan\u2014or for any other unit\u2014has to go through no fewer than five four-star headquarters in order to be processed, validated, and eventually dealt with. This during an era when more and more responsibility\u2014including decisions with strategic consequences\u2014is being exercised by young captains and colonels on the battlefield."], "subsections": []}, {"section_title": "Justifications for Increasing Proportion of GFOs", "paragraphs": ["The increasing proportion of GFOs in comparison to the total force has been a topic of particular interest during past congressional hearings. During these hearings, and particularly during a 1997 congressional review of GFO authorizations, witnesses from the Department of Defense put forth a number of rationales for this growth, including the following:", "Joint requirements . One frequently cited cause of the increasing ratio of GFOs during past congressional hearings has been the increase in \"joint\" requirements that followed enactment of the Goldwater-Nichols Act (GNA) in 1986. While removing the Chairman of the Joint Chiefs of Staff from the chain of command, GNA enhanced the authority of the Chairman in other ways; significantly increased the roles and authorities of commanders of the joint Combatant Commands; and emphasized joint duty assignments for officers. These new institutional arrangements led to the creation of more joint GFO positions and powerful career incentives to serve in those positions. Testifying before Congress in 1997, the Vice Director of the Joint Staff emphasized how the growth of joint organizations affected the proportion of GFOs to the total force: \"There is really no law of proportionality here when you talk about joint growth. If you think about it, sir, where we have been since 1980, we stood up CENTCOM, SOCOM, Space Command; we have reorganized to form ACOM, TRANSCOM, [and] STRATCOM.\" Since then, additional joint headquarters have been established, to include U.S. Northern Command (established in 2002), Joint Task Force Guantanamo (established 2002), Combined Joint Task Force Horn of Africa (established 2002), U.S. Africa Command (2007), and U.S. Cyber Command (2009). Coalition Operations . Another rationale used to explain the increased proportion of GFOs has been an increased emphasis by the United States on forging coalitions with other nations to achieve common security objectives. This has, in turn, generated a demand for senior military leaders to conduct coordinated planning, training, and operations with their peers from foreign nations. The argument is also linked to the number of contingency operations the U.S. military has conducted since the end of the Cold War, which have often involved forces from dozens of countries, including the forces of the nation in which the operations take place. Examples of these coalition operations include Iraq and Afghanistan as well as smaller-scale contingencies such as Bosnia, Haiti, and Kosovo (ongoing). Contingency operations such as these are commanded by a GFO, who usually has additional GFOs as subordinate commanders and senior staff officers. Both their experience and the authority inherent in their grade can be considered important elements to the success of complex operations. Political and diplomatic considerations can also be a factor, as the officers leading these operations are normally expected to interact with the senior military and civilian leadership of the foreign nation where the operations are occurring. Organizational structure . As noted previously, the increase in the proportion of GFOs over the past 50 years has not been due to an increase in the number of GFOs, which has gone down in this time period, but to the much larger decrease in the size of the Armed Forces in general. In part, this slower reduction is due to the organizational structure of the Armed Forces, which includes certain GFO positions whether the Armed Forces are comparatively large or small. For example, there was a Chief of Staff of the Air Force at the peak of the Vietnam War, when the Air Force had about 900,000 airmen, and there is one today, when the Air Force has approximately 325,000 airmen. A similar case can be made for many of the GFOs who serve on the Joint Staff, the Service Staffs, the Combatant Commands, and certain defense agencies. Given the organizational structure of the Armed Forces\u2014some of which is required by law\u2014the amount of management \"overhead\" does not necessarily change in direct proportion to the size of the force. Another way of illustrating this is to consider what would happen if an Army division were disestablished: doing so would eliminate about 15,000 soldiers, but only three of them would be general officers. Technological changes . A fourth justification for increased GFO ratios is that technological advances have changed the way the United States fights its wars. Modern weapons systems, much more powerful and accurate than their predecessors, require fewer personnel to deliver greater firepower. Thus, while the number of personnel a GFO commands may decline as more sophisticated equipment is substituted for manpower, the lethality of those forces may increase. From this perspective, the lethality of the weapons systems, rather than the number of people, provides the justification for an organization to be led by a very senior military officer. Additionally, the advent and development of new domains of warfare\u2014such as space and cyber\u2014has led to the creation of new organizations to exploit advantages and defend against vulnerabilities in those environments."], "subsections": []}]}, {"section_title": "Regular Military Compensation for General and Flag Officers", "paragraphs": ["There are three main ways in which military personnel, including general and flag officers, are compensated: cash compensation (pay and allowances), non-cash compensation (benefits), and deferred compensation (retired pay and benefits). In this report, only the compensation elements which make up r egular m ilitary c ompensation will be discussed. "], "subsections": [{"section_title": "An Overview of Regular Military Compensation", "paragraphs": ["Regular Military Compensation (RMC) is a statutorily defined measure of the major compensation elements which every servicemember receives. It is widely used as a basic measure of military cash compensation levels and for comparisons with civilian salary levels. RMC, as defined in law, is \"the total of the following elements that a member of the uniformed services accrues or receives, directly or indirectly, in cash or in kind every payday: basic pay, basic allowance for housing, basic allowance for subsistence, and Federal tax advantage accruing to the aforementioned allowances because they are not subject to Federal income tax.\" These elements are described in more detail in the Appendix . Certain GFOs receive a \"personal money allowance\" as well. This is not part of RMC, but is described in a footnote below. Congress included provisions in recent National Defense Authorization Acts to deny GFOs any increase in basic pay during calendar years 2015 and 2016. "], "subsections": []}, {"section_title": "Regular Military Compensation for General and Flag Officers", "paragraphs": [" Table 4 provides the average RMC that general and flag officers received in 2019. It assumes that all GFOs receive BAH, rather than living in government provided housing. "], "subsections": []}]}, {"section_title": "Statutory Controls on GFOs", "paragraphs": ["Congress has established a statutory framework for GFOs which limits their numbers by grade, requires presidential determination of many three-star and four-star positions, and specifies the grade and/or duties of certain key positions. This framework provides for greater congressional control over the most senior GFO positions, while providing substantial latitude to the executive branch in the management of the remaining GFOs. "], "subsections": [{"section_title": "Current Grade Limits", "paragraphs": ["Sections 525 and 526 of Title 10 establish the number of general and flag officers that may be on active duty in the Army, Navy, Air Force, and Marine Corps. The two provisions establish separate caps for each service and for the joint community. There are certain circumstances under which a general or flag officer does not \"count\" against these caps. Additionally, the President has authority under 10 U.S.C. \u00a7527 to suspend the operation of the caps in time of war or national emergency declared by the Congress or the President. ", " Table 5 summarizes the statutory limitations by grade for GFOs for service-specific positions. Table 6 summarizes the statutory limitations for GFOs service in Joint positions. Combining the maximum number of service and joint GFO authorizations, the maximum number of GFO positions authorized is currently 963. The current number of active duty GFOs subject to the statutory caps is 891. There are another 29 active duty GFOs who are not subject to the statutory caps. (See \" Current Number of General and Flag Officers \" earlier in the report.)"], "subsections": []}, {"section_title": "Grade Limits after December 31, 2022", "paragraphs": ["The FY2017 National Defense Authorization Act included a provision, codified at 10 U.S.C. \u00a7526a, to reduce the number of GFOs authorized to be on active duty. The conference report that accompanied the bill highlighted congressional concerns that the military departments had not demonstrated a willingness to implement GFO reductions directed by then-Secretary of Defense Robert Gates in 2011 and, furthermore, noted the context of significant reductions in personnel strength that occurred in the 2011-2016 time frame. Starting in 2023, \u00a7526a will lower the number of GFOs that may be on active duty to a maximum of 620 for Service positions and 232 for Joint positions, a reduction of 111 from the current number of GFO positions authorized by 10 U.S.C. \u00a7526. "], "subsections": []}, {"section_title": "Presidential Determination for Three-Star and Four-Star positions", "paragraphs": ["Section 601 of Title 10 provides that \"[t]he President may designate positions of importance and responsibility to carry the grade of general or admiral or lieutenant general or vice admiral.... An officer assigned to any such position has the grade specified for that position if he is appointed to that grade by the President with the advice and consent of the Senate.\" Thus, with the exception of those so designated in statute, all three-star and four-star positions must be designated as such by the President. Congress can review the rationale for this designation as part of its oversight function, and the Senate retains the power to confirm or reject the nomination of an individual to fill such a position. The authority of the President to designate such positions is also limited by the strength caps on general and flag officers found in 10 U.S.C. \u00a7\u00a7525 and 526. "], "subsections": []}, {"section_title": "Statutorily Defined Positions", "paragraphs": ["Congress has established a number of GFO positions in law which carry designated grades, designated duties, or both. "], "subsections": [{"section_title": "Statutory Grades", "paragraphs": ["Congress has specified the grade for a number of key positions. For example, 10 U.S.C. \u00a7152 specifies that the Chairman of the Joint Chiefs of Staff holds the rank of General or Admiral. Similar language also exists for the Vice Chairman of the Joint Chiefs of Staff, the top two officers of each service, the Commander of U.S. Special Operations Command, and the Chief of the National Guard Bureau. Table 7 highlights some positions with statutorily required grades. Congress sometimes changes these statutory grades. For example, in 2008, Congress increased the grade of the Chief of the National Guard Bureau from Lieutenant General to General. Additionally, Section 502 of the FY2017 National Defense Authorization Act amended various statutory provisions to eliminate the statutory grade for 54 positions. As explained in the report that accompanied the Senate version of the FY2017 National Defense Authorization Act, where the provision originated: ", "The Committee determined that in order to effectively manage the reduction in the number of general and flag officers prescribed elsewhere in this Act, that the Secretary of Defense must be given the flexibility to assign appropriate officer grades to positions. The provision would not prohibit the position from being filled by an officer with the same, or a higher, or lower grade than the law currently requires."], "subsections": []}, {"section_title": "Statutory Duties", "paragraphs": ["Positions with statutorily required grades typically have statutorily required duties as well. Table 7 provides excerpts of the statutorily required responsibilities, duties, or functions of certain GFO positions. Congress sometimes changes these duties. For example, in 2011, Congress changed the law to specify that the Chief of the National Guard Bureau was a member of the Joint Chiefs of Staff whose duties included \"the specific responsibility of addressing matters involving non-Federalized National Guard forces in support of homeland defense and civil support missions.\""], "subsections": []}]}]}, {"section_title": "Considerations for Congress", "paragraphs": ["Congress has a long-standing interest in the military officer corps in general, and has periodically focused additional attention on its most senior officers. Should Congress elect to address GFO authorizations, duties, compensation, or other related topics in more detail, it may wish to consider the following:", "What is the most appropriate way to determine how many GFOs the Department of Defense should have? How closely should this be linked to total force size? What other factors would be useful in determining what the right number of GFOs is? How do advances in information technology and decisionmaking tools impact the need for GFOs? Could use of these technologies result in flattened management structures and decrease the need for GFOs? Should Congress modify the current statutory framework that governs GFOs? Should it modify the caps set out in 10 U.S.C. \u00a7\u00a7525, 526, and 526a? To what extent do other statutory requirements, such as the Goldwater-Nichols Act (GNA), drive GFO requirements? Should GNA be revised to alter this effect? Could organizational restructuring of the Joint Staff and Service Staffs decrease the need for GFOs, or allow positions to be held by lower graded GFOs? Could certain organizations be merged to reduce the requirements for GFOs? Could military relations with international partners be restructured so as to lessen the need for GFO representation? How important is rank equivalence when senior U.S. military personnel work with their allied peers? Could National Guard and Reserve GFOs be used to reduce the need for active duty GFOs? Are there GFO positions that could be eliminated or \"downgraded\" to a lower rank? Are there GFO positions that could be replaced by civilian employees? What are the costs and benefits associated with these actions? How might this impact military effectiveness? Can the direct and indirect costs associated with GFOs be reduced? For example, could compensation or staff costs be reduced without significantly affecting the ability of GFOs to carry out their duties?"], "subsections": [{"section_title": "Appendix. Elements of Regular Military Compensation", "paragraphs": ["Regular Military Compensation (RMC), as defined in law, is \"the total of the following elements that a member of the uniformed services accrues or receives, directly or indirectly, in cash or in kind every payday: basic pay, basic allowance for housing, basic allowance for subsistence, and Federal tax advantage accruing to the aforementioned allowances because they are not subject to Federal income tax.\" Each of these elements is described below. ", "Basic Pay", "All members of the Armed Forces receive basic pay, although the amount varies by pay grade (rank) and years of service (also called longevity). For most servicemembers, basic pay is the largest element of the compensation they receive in their paycheck and typically accounts for about two-thirds of an individual's RMC. It is roughly analogous to civilian salary.", "Basic Allowance for Housing", "All servicemembers living in the United States are entitled to either government-provided housing or a housing allowance, known as basic allowance for housing (BAH). About 17% of GFOs living in the United States receive government-provided housing with the remainder receiving BAH to offset the costs of the housing they rent or purchase in the civilian economy. The amount of BAH a servicemember receives is based on three factors: paygrade (rank), geographic location, and whether or not the servicemember has dependents. However, there is no increase in BAH after paygrade O-7. Therefore, the amount of BAH for GFOs does not vary by rank, but only by locality and dependency status.", "Paygrade and dependency status are used to determine the type of accommodation\u2014or \"housing profile\"\u2014that would be appropriate for the servicemember (for example, one-bedroom apartment, two-bedroom townhouse, or three-bedroom single family home). Geographic location is used to determine the average costs associated with each of these housing profiles. The average costs of these housing profiles are the basis for BAH rates. As a result of this methodology, BAH rates are much higher in some areas than others, but servicemembers of similar paygrade and dependent status should be able to pay for roughly comparable housing regardless of their duty location. ", "Basic Allowance for Subsistence", "Nearly all servicemembers receive a monthly payment to defray their personal food costs. This is known as basic allowance for subsistence (BAS). BAS is provided at a flat rate, with separate rates for officers and enlisted personnel. In 2019, all officers, including GFOs, received $254.39 a month.", "Federal Tax Advantage", "Military allowances are generally not considered part of gross income and are not subject to federal income tax, thus generating a tax benefit for servicemembers. RMC considers only the federal income tax advantage provided by the exemption of housing and subsistence allowances from gross income. The precise value of the federal tax advantage for an individual servicemember will vary depending on his or her unique tax situation."], "subsections": []}]}]}}
{"id": "R45685", "title": "Title IX and Sexual Harassment: Private Rights of Action, Administrative Enforcement, and Proposed Regulations", "released_date": "2019-04-12T00:00:00", "summary": ["Title IX of the Education Amendments of 1972 (Title IX) provides an avenue of legal relief for victims of sexual abuse and harassment at educational institutions. It bars discrimination \"on the basis of sex\" in an educational program or activity receiving federal funding. Although Title IX makes no explicit reference to sexual harassment or abuse, the Supreme Court and federal agencies have determined that such conduct can sometimes constitute discrimination in violation of the statute; educational institutions in some circumstances can be held responsible when a teacher sexually harasses a student or when one student harasses another. Title IX is mainly enforced (1) through private rights of action brought directly against schools by or on behalf of students subjected to sexual misconduct; and (2) by federal agencies that provide funding to educational programs.", "To establish liability in a private right of action, a party seeking damages for a Title IX violation must satisfy the standards set forth by the Supreme Court in Gebser v. Lago Vista Independent School District, decided in 1998, and Davis Next Friend LaShonda D. v. Monroe County Board of Education, decided the next year. Gebser provides that when a teacher commits harassment against a student, a school district is liable only when it has actual knowledge of allegations by an \"appropriate person,\" and so deficiently responds to those allegations that its response amounts to deliberate indifference to the discrimination. Davis instructs that, besides showing actual knowledge by an appropriate person and deliberate indifference, a plaintiff suing for damages for sexual harassment committed by a student must show that the conduct was \"so severe, pervasive, and objectively offensive\" that it denied the victim equal access to educational opportunities or benefits. Taken together, the Supreme Court's decisions set forth a high threshold for a private party seeking damages against an educational institution based on its response to sexual harassment. In turn, federal appellate courts have differed in how to apply the standards set in Gebser and Davis, diverging on the nature and amount of evidence sufficient to support a claim.", "In each of the last several presidential administrations, the Department of Education (ED) issued a number of guidance documents that instruct schools on their responsibilities under Title IX when addressing allegations of sexual harassment. These documents\u2014while sometimes subject to change\u2014generally reflected a different standard than the Supreme Court case law addressing private rights of action for damages for sexual abuse or harassment (the Court in Davis acknowledged that the threshold for liability in a private right of action could be higher than the standard imposed in the administrative enforcement context). Those guidance documents had, among other things, established that sometimes a school could be held responsible for instances of sexual harassment by a teacher, irrespective of actual notice; and schools could be held responsible for student-on-student harassment if a \"responsible employee\" knew or should have known of the harassment (constructive notice). ED's previous guidance also instructed educational institutions that they sometimes could be responsible for responding to incidents of sexual harassment occurring off campus. ED also cautioned schools on the use of mediation to resolve allegations of sexual harassment. With regard to the procedures used by schools to resolve sexual harassment allegations, ED informed schools that they must use the preponderance of the evidence standard to establish culpability, and the agency strongly discouraged schools from allowing parties in a hearing to personally cross-examine one another. In response to guidance from ED, as well as increased oversight from the department's Office for Civil Rights (OCR) between 2011 and 2016, schools developed several procedures to ensure that their responses to allegations of sexual harassment and assault complied with Title IX. A number of students faced with disciplinary action by public universities raised constitutional challenges to the Title IX procedures used to find them responsible for sexual misconduct, arguing that universities violated the Due Process Clause in handling their case.", "ED issued a notice of proposed rulemaking in late 2018, after revoking some of its previous guidance to schools in 2017. The proposed regulations would, in several ways, tether the administrative requirements for schools to the standard set by the Supreme Court in Gebser and Davis. In doing so, the proposed regulations would depart from the standards set by ED in previous guidance documents (some of which have since been rescinded). The new regulations would require \"actual notice,\" rather than constructive notice, of harassment by an education institution to trigger a school's Title IX responsibilities, and provide that a school's response to allegations of sexual harassment will violate Title IX only if it amounts to deliberate indifference. In addition, the new regulations would more narrowly define what conduct qualifies as sexual harassment under Title IX, and also impose new procedural requirements, which appear to reflect due process concerns, when schools investigate sexual harassment or assault allegations and make determinations of culpability."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["Title IX of the Education Amendments of 1972 (Title IX) provides an avenue of legal relief for victims of sexual abuse and harassment committed by professors, teachers, coaches, and others at educational institutions. The statute prohibits discrimination \"on the basis of sex\" of any person in an educational program or activity receiving federal funding. Though Title IX makes no explicit reference to sexual abuse or harassment, the Supreme Court has held that a school district can violate the statute, and be held liable for damages, based on a deliberately indifferent response to a teacher's sexual abuse or harassment of a student. The Court has also held that a school board may be liable under Title IX for a deliberately indifferent response to student-on-student sexual harassment. Meanwhile, federal agencies that administratively enforce the statute, such as the Department of Education (ED), have also determined that educational institutions can be held responsible for instances of sexual harassment under Title IX in certain circumstances.", "Title IX is thus primarily enforced in two ways: (1) through private rights of action directly against schools by or on behalf of students subject to such harassment in certain circumstances; and (2) by federal agencies that provide funding to educational programs. ", "With respect to the latter enforcement prong, like several other federal civil rights statutes, Title IX makes compliance with its antidiscrimination mandate a condition for receiving federal funding in any education program or activity. Title IX applies to federal-funded schools at all levels of education. For instance, all public school districts receive some federal financial assistance, as do most institutions of higher education through participation in federal student aid programs. Notably, when any part of a school district or institution of higher education receives federal funds, all of the recipient's operations are covered by Title IX.", "The text of Title IX does not expressly mention sexual abuse or harassment, while current regulations implementing the statute also do not explicitly address sexual harassment (although the regulations do require schools to designate at least one employee to function as a Title IX Coordinator). In each of the last several presidential administrations, however, the Department of Education (ED) has issued guidance documents that instruct schools regarding their responsibilities under Title IX when addressing allegations of sexual harassment. In response, educational institutions have developed procedures and practices to investigate and respond to allegations of sexual harassment and assault. And ED recently issued another notice of proposed rulemaking, after having revoked some of its prior guidance to schools in 2017. As discussed in this report, if adopted, the regulations would significantly change educational institutions' responsibilities for responding to sexual harassment allegations.", "To place the proposed Title IX regulations in context, this report provides background on the legal landscape that informs the proposal. First, the report examines how federal courts have understood Title IX's requirements in the context of private rights of actions brought by students directly against educational institutions seeking damages for sexual abuse or harassment. The report continues by examining how federal agencies have enforced Title IX, with particular focus on ED's guidance documents that direct schools on how to respond to sexual harassment and assault allegations. The report then considers various constitutional challenges brought by students against public universities, which claim that some universities' responses to allegations of sexual harassment have violated the due process rights of the accused. With this backdrop set, the report examines ED's proposed regulations with an emphasis on how they would alter the responsibilities of schools in complying with Title IX."], "subsections": []}, {"section_title": "A Private Right of Action to Enforce Title IX", "paragraphs": ["Title IX of the Education Amendments of 1972 states that \"No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance,\" subject to certain exemptions. In other words, recipients of federal funding, which administer an educational program or activity, are prohibited from discriminating on the basis of sex.", "The statute, however, does not expressly provide for a private right of action by which victims of sex discrimination may recover for a Title IX violation. Nor does the statute expressly prohibit sexual harassment, abuse, or molestation as forms of unlawful sex discrimination, or otherwise define unlawful sexual abuse or harassment. Title IX also does not delineate the circumstances in which a school or educational program may be liable for such conduct. ", "Given the absence of statutory text \"to shed light on Congress' intent,\" federal courts have played a primary, if not exclusive, role in establishing the remedial scheme by which victims of sexual harassment or abuse may seek relief under Title IX through a private right of action. The Supreme Court first interpreted Title IX to provide for a judicially implied private right of action against a federal-funded educational institution for sexual harassment, and later, an implied damages remedy in such actions. Since then, and in the absence of legislative amendments to Title IX on those issues, the Court has also created the legal standard for establishing liability under Title IX for sexual abuse or harassment committed by a teacher, and other students. The Court, and numerous federal courts of appeals, have described this judicially created liability standard\u2014which draws upon the \"deliberate indifference\" standard as applied under 42 U.S.C. \u00a7\u00a01983 \u2014as a \"high bar for plaintiffs to recover under Title IX.\"", "Critically, in a Title IX private right of action for damages, an educational institution (or other federally funded program or activity) is not strictly liable for a principal's or teacher's sexual harassment or abuse of a student. In other words, the fact that sexual harassment or abuse occurred and was committed by these individuals is not the basis for a funding recipient's liability under the Supreme Court's remedial scheme. Rather, Title IX liability turns on the recipient's response to its actual knowledge of that conduct. A recipient will be liable only when its response was so deficient as to amount to \"deliberate indifference\" to the alleged harassment or abuse. "], "subsections": [{"section_title": "Gebser and Davis: The Supreme Court's Title IX Liability Standard", "paragraphs": ["The private right of action currently available under Title IX is one of judicial implication\u2014that is, the Court has interpreted the statute to imply such a right, in the absence of express statutory language providing for it. A private right of action provides a personal legal remedy for victims of sex discrimination in the form of specific relief or damages. In contrast, and as discussed in a later section, administrative enforcement of the statute makes its general focus the institutional policies and practices of the recipient educational institution. ", "Two Supreme Court decisions, together, set out the requirements for establishing an educational funding recipient's liability under Title IX for damages for sexual abuse or harassment: Gebser v. Lago Vista Independent School District and Davis N ext Friend LaShonda D. v. Monroe County Board of Education . The Court's liability standard premises an institution's Title IX liability for sexual harassment or abuse based on the institution's \"deliberate indifference\" in responding to knowledge of that conduct. Thus\u2014and critical to understanding a Title IX private right of action for damages\u2014an educational institution (or other federally funded program or activity) is not strictly liable for a principal's or teacher's sexual harassment or abuse of a student. Indeed, the Supreme Court in Gebser expressly rejected such arguments urging it to apply agency principles to Title IX such that a school would be vicariously liable for such harassment. ", "Instead, liability attaches only if a plaintiff establishes that the funding recipient's response to its \"actual\" knowledge of the discrimination was deliberately indifferent. Put another way, under the Court's remedial scheme, liability under Title IX is based on the funding recipient's \" own failure to act\" adequately in response to known misconduct, not the misconduct itself. Thus, an institution will not be liable absent a showing of deliberate indifference, regardless of whether the conduct committed by a principal or teacher could be characterized as egregious.", "In creating this standard in Gebser , the Court had attempted to \"'infer how the [1972] Congress would have addressed the issue had the . . . action been included as an express provision in the' statute.\" That task, the Court observed, \"inherently entail[ed] a degree of speculation.\" To inform its analysis, the Court relied significantly on the statute's administrative enforcement provision because, in its view, the provision \"contain[ed] important clues\" from which to infer legislative intent regarding Title IX liability. The Court observed that, pursuant to that provision, agencies that disburse federal funds may suspend or cut funds to a funding recipient for violating Title IX, but only after they \"ha[ve] advised the appropriate person or persons of the failure to comply with the requirement and ha[ve] determined that compliance cannot be secured by voluntary means.\" Because the statute's administrative procedure \"require[s] notice to the recipient and an opportunity to come into voluntary compliance,\" the Court reasoned that it too would similarly require \"actual notice\" to an \"appropriate person\" to establish liability for damages in a private right of action under Title IX. ", "The Court also concluded that a recipient would be liable under Title IX only where a school official responds to that \"actual\" notice so deficiently that its response amounts to \"deliberate indifference.\" In so holding, the Court again looked to Title IX's administrative enforcement scheme and observed that it \"presupposes that an official who is advised of a Title IX violation refuses to take action to bring the recipient into compliance.\" The Court found \"a rough parallel in the standard of deliberate indifference,\" from case law arising under 42 U.S.C. \u00a7 1983 addressing claims \"alleging that a municipality's actions in failing to prevent a deprivation of federal rights\" caused a violation. ", "The Court thus held that \"[u]ntil Congress speaks directly on the subject . . . we will not hold a school district liable in damages under Title IX for a teacher's sexual harassment of a student absent actual notice and deliberate indifference\" \u2014a conclusion that elicited a strong dissent. "], "subsections": [{"section_title": "Deliberate Indifference", "paragraphs": ["Deliberate indifference is a \"high standard,\" as described by the Supreme Court in Davis , and must \"at a minimum, 'cause [students] to undergo' harassment or 'make them liable or vulnerable' to it.\" Notably, the \"deliberate indifference\" standard does not require funding recipients to \"remedy\" the harassment. Rather, under Davis , a recipient's response to harassment will amount to deliberate indifference only if it is \" clearly unreasonable in light of the known circumstances.\" Because this standard is not \"a mere 'reasonableness' standard,\" a plaintiff must show more than the unreasonableness of a funding recipient's response to sexual abuse or harassment. The plaintiff must show that the recipient was clearly unreasonable in its response. Accordingly, a funding recipient is not liable under Title IX if it responds to sexual abuse or harassment \"in a manner that is not clearly unreasonable.\" ", "In addition to the requisite showing of \"deliberate indifference,\" the Court's standard also requires a plaintiff to establish other threshold showings to prevail in a Title IX suit for damages\u2014both before reaching the question of \"deliberate indifference\" and after establishing \"deliberate indifference\" on the part of the school or entity."], "subsections": []}, {"section_title": "\"Actual\" Notice of Discrimination by \"An Appropriate Person\"", "paragraphs": ["Before reaching the issue of whether a funding recipient acted with \"deliberate indifference,\" Gebser requires that a plaintiff establish that \"an appropriate person\" at the funding recipient had \"actual knowledge of discrimination.\" Failure to show either \"actual\" notice or that such notice was provided to \"an appropriate person\" of the funding recipient may constitute the sole basis for a court's dismissal of a Title IX claim seeking damages for sexual harassment or abuse. An \"appropriate person,\" under Gebser , is \"an official who at a minimum has authority to address the alleged discrimination and to institute corrective measures on the recipient's behalf.\" As discussed later in this report, what constitutes \"actual\" notice, and who may constitute an \"appropriate person,\" have caused substantive splits among the circuits. "], "subsections": []}, {"section_title": "Student-to-Student Harassment: \"Substantial Control,\" \"Severe, Pervasive, and Objectively Offensive\" Harassment, Denial of Educational Access", "paragraphs": ["Even where \"deliberate indifference\" is established, the Supreme Court's liability standard further requires a plaintiff alleging student-to-student or peer harassment to make several additional showings: (1) that a funding recipient exercised \"substantial control\" over the harasser and the context in which the harassment occurred; (2) that the harassment itself was \"severe, pervasive, and objectively offensive\"; and (3) the denial of educational access resulting from the harassment.", "With respect to \"substantial control,\" Davis limits a school's liability for damages to circumstances in which the funding recipient exercised \"substantial control\" over the harasser and in which the harassment took place in a context subject to the recipient's control. If \"the harasser is under the school's disciplinary authority,\" a recipient of federal funding may be liable for its deliberate indifference to the harassment, as the Court in Davis particularly emphasized the recipient's authority to take \"remedial action\" against the harassment. As for \"substantial control\" over the environment, \"the harassment must take place in a context subject to the school district's control.\" ", "As to the nature of the sexual harassment itself, Davis requires that the plaintiff show that the conduct \"is so severe, pervasive, and objectively offensive, and [] so undermines and detracts from the victims' educational experience, that the victim-students are effectively denied equal access to an institution's resources and opportunities.\" Whether the conduct rises to this level depends, as the Court stated in Davis , \"on a constellation of surrounding circumstances, expectations, and relationships,\" \"including, but not limited to, the ages of the harasser and the victim and the number of individuals involved.\"", "Finally, for harassment to have sufficiently affected the victim's education, the Court in Davis made two additional observations. On the one hand, the Court noted that evidence of a decline in the victim's grades\u2014as was alleged there\u2014\"provides necessary evidence of a potential link between her education\" and the alleged harassment. Yet, the Court also concluded that harassment is actionable under Title IX only when it is \"serious enough to have the systemic effect of denying the victim equal access to an educational program or activity.\" Without defining what might constitute a \"systemic effect,\" the Court offered one example of harassment that does not have such effect: \"a single instance\" of harassment, even when \"sufficiently severe.\""], "subsections": []}]}, {"section_title": "Federal Courts' Application of Gebser and Davis to Title IX Claims for Sexual Harassment or Abuse", "paragraphs": ["The Supreme Court's Gebser and Davis decisions establish that a school or other educational program that receives federal funding will be liable under Title IX for damages for the sexual abuse or harassment of a student only if it acted with \"deliberate indifference\" in its response to known discrimination. Deliberate indifference, the Fifth Circuit has recently observed, \"'is an extremely high standard to meet.'\"", "Applying this and other components of the Supreme Court's Title IX liability standard, lower federal courts have varied in their formulations of the evidence required to prove a Title IX claim. Some courts, for example, have interpreted Gebser and Davis to adopt a \"hostile environment\" analysis of Title IX claims alleging teacher-to-student harassment, in light of precedent analyzing harassment claims in the workplace context under Title VII of the Civil Rights Act. Meanwhile, other federal courts have focused their teacher-to-student analysis on whether a plaintiff has established the following elements: ", "\"actual\" notice of discrimination; by an \"appropriate person\" authorized to take corrective measures; and \"deliberate indifference\" by the funding recipient in response to known discrimination.", "Where a Title IX claim alleges sexual harassment or assault committed by a student against another student , courts have additionally required the plaintiff to establish that:", "the harassment was \"so severe, pervasive, and objectively offensive\"; the \"victim-students [were] effectively denied equal access to an institution's resources and opportunities\"; and the recipient exercised \"substantial control\" over the harasser and the context in which the harassment occurred. ", "As discussed in further detail below, federal courts of appeals vary\u2014and at times directly conflict\u2014regarding the evidence sufficient to satisfy these elements. Failure to satisfy any one of the elements may be the sole basis for dismissal of a Title IX claim. "], "subsections": [{"section_title": "What Knowledge Gives Rise to \"Actual\" Notice?", "paragraphs": ["Under Gebser , a plaintiff must show that the funding recipient had \"actual\" notice of the discrimination; therefore, it is not enough to present evidence that a funding recipient reasonably s hould have known about the alleged sexual misconduct. Under the standard, then, what type of allegations reported to a school give rise to \"actual\" notice? Is it enough, for example, if a funding recipient has actual knowledge of a \" substantial risk of abuse\"? Does it require knowledge of specific allegations of harassment or abuse or\u2014perhaps most narrowly\u2014require knowledge of \"severe, pervasive, and objectively offensive\" conduct? Meanwhile, if a school is notified of a perpetrator's previous acts of sexual harassment or abuse, may that constitute actual notice of that individual's conduct as to others ? ", "Federal courts differ on these questions of actual notice, with some courts further differentiating between evidence that establishes actual notice of a teacher's sexual abuse versus actual notice of sexual violence or harassment committed by a student. As reflected below, which standard a court applies to evaluate \"actual notice\" is determinative\u2014the claim may either proceed to the next phase of the analysis or be foreclosed altogether.", "In Doe v. School Board of Broward County , the Eleventh Circuit addressed the question of whether complaints of two separate students about the same teacher were \"sufficient in substance to alert [the principal] to the possibility\" of that teacher's sexual assault of a third student. The court held in the affirmative, emphasizing the similarity between the two preceding reports, which alleged multiple occasions of the teacher's propositions for sex and dates, sexual touching, and sexual comments about their bodies. These reports, the court held, raised a triable issue that the principal had actual notice \"of a pattern of harassment.\" And where the analysis of \"actual notice\" looks to knowledge of the risk of sexual abuse or harassment, the court further observed, \"lesser harassment may [] provide actual notice of sexually violent conduct.\" ", "In Bay n ard v. Malone , however, the Fourth Circuit held that the school principal had no \"actual\" notice that a sixth grade teacher was sexually abusing a student in his class, despite receiving multiple prior reports that he molested children. There, the evidence reflected that before the plaintiff started sixth grade at the school, the principal had met with one of this teacher's former students, who reported that he had been sexually molested by the teacher while in the sixth grade, warned that the teacher was a pedophile, and that the principal should watch for certain behaviors. In addition, another teacher at the school told the principal about allegations that this teacher sexually molested children. Separately, the school librarian reported to the principal that she had walked in on the teacher with the plaintiff sitting in his lap, with his arm around the student, and their faces very close together, and that when the teacher saw her, he jumped up and the plaintiff fell to the floor. In relaying the incident, the librarian told the principal the behavior had been \"inappropriate.\" Though the court noted that the principal \"certainly should have been aware of the potential for abuse,\" it held that there was \"no evidence in the record to support a conclusion that [the principal] was in fact aware that a student was being abused.\" The court dismissed the Title IX claim on the basis that no appropriate person had actual notice of the abuse of the plaintiff student.", "As the above cases reflect, in the absence of a clear definition\u2014either in the statute or from the Supreme Court\u2014courts vary with respect to the nature, specificity, and frequency of allegations sufficient to constitute \"actual\" notice for the purpose of satisfying the first prong of the analysis for Title IX liability for sexual abuse or harassment. "], "subsections": []}, {"section_title": "Who Constitutes an \"Appropriate Person\"?", "paragraphs": ["The Supreme Court's liability standard for Title IX not only requires actual notice, but also that this notice be made to \"an appropriate person\"\u2014that is, \"an official who at a minimum has authority to address the alleged discrimination and to institute corrective measures on the recipient's behalf.\" Generally, federal appellate case law reflects that rather than treating an individual's title as dispositive, courts engage in fact-specific determinations that appear to focus principally on whether an individual had the ability to halt or address the misconduct or whether the individual occupied a position high enough within the hierarchy of the funding recipient to be fairly said to act in a representative capacity for the recipient. ", "Because the Court's opinions in Gebser and Davis do not clearly delineate which individuals may constitute \"appropriate person[s],\" federal courts have reached varying\u2014and at times conflicting\u2014determinations. ", "In the elementary or secondary school context, for example, courts vary as to which individuals\u2014 a principal, teacher, or guidance counselor \u2014have the requisite \"authority to address the alleged discrimination\" and \"institute\" corrective action to constitute \"an appropriate person.\" ", "Some federal courts of appeals have held that a public school principal may\u2014but not always\u2014constitute \"an appropriate person.\" In Warren ex rel . Good v. Reading School District , the Third Circuit held, in a Title IX case alleging sexual abuse by a fourth grade teacher, that the school principal was an \"appropriate person\" in light of her authority to investigate a teacher's misconduct, which in turn implied her authority to \"initiate\" corrective measures such as reporting her findings to the school board. The Fourth Circuit, however, reached the opposite conclusion in Baynard v. Malone , holding that the principal\u2014despite being responsible for supervising and evaluating teachers\u2014was not an \"appropriate person.\" The court emphasized that the principal could not \"be considered the functional equivalent of the school district\" and lacked the authority to \"hire, fire, transfer, or suspend teachers.\" ", "Meanwhile, at least one federal court of appeals has held that a principal who engages directly in sexual abuse or harassment may not constitute an \"appropriate person.\" In Salazar v. South San Antonio Independent School District , the Fifth Circuit interpreted Gebser to hold that where a school official sexually abuses a student, he or she cannot be considered an \"appropriate person,\" even if he would otherwise constitute an \"appropriate person.\" That case involved allegations that a vice principal, who later became principal, sexually abused a student from his third grade to seventh grade year. Though \"uncontroverted testimony at trial\" established that the school official had corrective authority to address sexual harassment during the time he molested the plaintiff, the Fifth Circuit reasoned that it was \"highly unlikely\" that he would take corrective measures or report his own behavior so as to provide actual notice to the funding recipient. The court further rejected the argument that the principal's abuse should be treated as an official action of the school district for Title IX liability purposes, given the Supreme Court's rejection of agency principles to Title IX. The Fifth Circuit concluded that the \"goals and purpose\" of Title IX \"would not be accomplished or effectuated by permitting damage awards\" in such circumstances.", "In the higher education context, federal courts of appeals have engaged in similarly fact-specific analyses to determine whether a university employee\u2014for example, a college dean, university counsel, or athletics director \u2014constitutes an \"appropriate person\" for the purposes of a Title IX private right of action. The analyses in these cases appear to emphasize evidence relating to the individual's ranking in the university hierarchy, responsibilities involving receiving allegations of harassment, and ability to correct or halt the misconduct. ", "Yet, even when there arguably is such evidence, it may not be sufficient to render that individual an \"appropriate person.\" In Ross v. University of Tulsa , for example, the Tenth Circuit held that campus security officers were not \"appropriate person[s]\" through whom the university could have actual notice of an on-campus sexual assault. The court rejected the contention that the officers' mandatory reporting of sexual assaults to university personnel rendered them \"appropriate person[s],\" instead likening mandatory reporting to a \"clerical act\" rather than taking corrective action. The court also rejected the argument that the officers' participation in investigations of campus violence rendered them \"appropriate person[s],\" as that contention, as presented, \"would assume that anyone participating in the initiation of a corrective process\" is an \"appropriate person.\" ", "Given the variability of courts' analyses as to who may constitute an \"appropriate person,\" it is unlikely that a school's or university's Title IX Coordinator will categorically constitute an \"appropriate person.\" Rather, as reflected in the above decisions, a court's determination\u2014based on the legal standard set out in Gebser \u2014will likely depend on the characteristics it finds indicative of an \"appropriate person\" and the evidence relating to the individual's responsibilities in that institution."], "subsections": []}, {"section_title": "Deliberate Indifference: A \"Clearly Unreasonable\" Response", "paragraphs": ["As discussed earlier, after establishing \"actual notice\" of the discrimination to an \"appropriate person,\" a plaintiff must additionally prove that the funding recipient acted with deliberate indifference in its response\u2014that is, that the entity acted in a manner that was \" clearly unreasonable in light of the known circumstances.\" Federal appellate courts interpret this standard to require more than a showing that the school or institution failed to respond or act reasonably, or was negligent. Nor is a school required to remedy the harassment to avoid liability in a private right of action based on \"deliberate indifference.\" ", "In these highly fact-intensive analyses, courts examine the nature of the allegations the funding recipient had knowledge of, and what actions the recipient took, if any, in response to that information to determine whether the response was so \"clearly unreasonable\" as to amount to \"deliberate indifference\" to the alleged sexual harassment or abuse. The clearest cases of \"deliberate indifference\" generally concern evidence that the recipient made no effort to respond at all to \"actual\" notice of sexual harassment or abuse. Evidence of such circumstances might include, for example, a funding recipient's failure to initiate an investigation into serious allegations, or take any disciplinary actions in light of repeated reports of sexual harassment.", "Where there is evidence that the funding recipient responded in some manner, however, federal case law reflects what appear to be divergent and variable analyses as to whether a response is so deficient as to amount to deliberate indifference. Federal appellate courts have commonly described the requisite showing for deliberate indifference as a \"high\" bar to meet.", "In Doe ex rel . Doe v. Dallas Independent School District , for example, the Fifth Circuit held that the school district's response did not amount to deliberate indifference, despite evidence that could arguably be described as reflecting a deficient response. In that case, the plaintiffs, a group of former students, alleged that the same third grade teacher had sexually abused numerous male students, over the course of four years. The plaintiffs presented evidence that in response to a report of sexual molestation, the principal told the parent that the alleged perpetrator was a \"good teacher\" and that he knew her son was lying; failed to report the allegation to Child Protective Services; did not monitor the teacher further or require him to attend any training; and never raised the issue of sexual abuse again with the teacher until he was ultimately arrested. In the court's view, this evidence failed to create a triable issue of deliberate indifference, as the principal had nonetheless interviewed the student, spoken with his mother, and warned the teacher that if the allegations were true, \"he would be 'dealt with.'\" It could not say, the court concluded, that these actions \"were an inadequate response\" to the student's allegation.", "When faced with apparently similar evidence of a school's response to allegations of teacher sexual misconduct, the Eleventh Circuit held that, given \"serious deficiencies,\" the district court had erred in holding that defendant's response, as a matter of law, was not deliberately indifferent. There, the principal had received sexual harassment complaints by two students about the same teacher. In its analysis, the court highlighted the response to the second complaint, because by that time, the principal had notice of a possible pattern. The principal, however, \"effectively did nothing other than obtain a written statement\" from the student and the teacher. In addition, though the principal, as he had with the first complaint, reported the second complaint to the school board's special investigative unit, he nonetheless failed to notify the unit that the allegation concerned \"the same teacher who had been the subject of a formal investigation just months earlier.\" It could not be said, the court concluded, that \"merely because school officials 'confronted [the teacher],' 'obtained statements' from the complaining students, and 'informed the [unit] of the sexual misconduct allegations' (while omitting material details),\" that this response was reasonable. Rather, the \"failure to institute any corrective measures aimed at ferreting out the possibility of [the teacher]'s sexual harassment of his students could constitute deliberate indifference.\"", "Meanwhile, some courts of appeals have analyzed allegations of deliberate indifference that, in their view, the Court's Gebser and Davis decisions did not directly address. In Simpson v. University of Colorado, Boulder , for example, the Tenth Circuit addressed allegations that a university had an \"official policy of deliberate indifference\" by failing to provide adequate training or guidance in light of an \"obvious\" need for such actions. There, the head coach and other staff of the university's football program selected current players to host high school recruits on campus, for the purpose of \"'show[ing] the recruits a good time.'\" During one such football recruiting visit, the plaintiffs, who had agreed to meet with them, alleged that university football players and high school recruits sexually assaulted them. ", "In analyzing the issue of deliberate indifference, the court highlighted evidence that the university coaching staff had prior and ongoing knowledge of sexual assaults occurring during football recruitment and by football players, including the rape of a female student by a university football player two months before the plaintiffs were assaulted. The university had also been previously advised by the local district attorney to implement changes and training to its football recruiting program in light of such sexual assaults. In addition, the head coach \"continued to resist recruiting reforms.\" One player testified that he received little guidance on his responsibilities as a \"player-host\"; and a handbook provided by the school to the players, the court observed, did not \"provide guidance to player-hosts on appropriate behavior by themselves and recruits.\" ", "The court emphasized that the evidence would support findings that, before the plaintiffs had been assaulted, the head coach had both general and specific knowledge of sexual assaults occurring during recruiting visits, that there had been no change in the recruiting program to lessen the likelihood of such assaults, and that the university \"nevertheless maintained an unsupervised player-host program.\" The evidence, the court held, created a triable issue of deliberate indifference. ", "As with the other components of the Supreme Court's standard for a Title IX private right of action\u2014\"actual\" notice to an \"appropriate person\"\u2014federal case law reflects fact-intensive, variable determinations with respect to the evidence necessary to meet the \"high\" bar for showing deliberate indifference on the part of a funding recipient. "], "subsections": []}]}]}, {"section_title": "Administrative Enforcement of Title IX", "paragraphs": ["In addition to the private rights of action discussed above, Title IX is also enforced by federal agencies that provide funding to educational programs. Title IX makes nondiscrimination based on sex a condition for receiving federal financial assistance in any education program or activity. In this administrative enforcement context, if a school is found to have violated Title IX, the ultimate sanction is termination or suspension of federal funds, rather than a legal judgment requiring payment of damages to a particular student. Agencies are authorized to issue regulations (subject to presidential approval) and orders to enforce the statute and are responsible for monitoring recipients' compliance with Title IX. While a number of federal agencies issue funds for educational programs, and thus are responsible for enforcing the statute with respect to recipients of financial assistance for educational programs, two agencies play particularly prominent roles in enforcing Title IX. ", "Pursuant to the Education Amendments of 1974, the Secretary of Education (ED) is specifically directed to promulgate regulations concerning the prohibition of sex discrimination at education programs that receive federal assistance. Because ED is, among other things, \"the primary administrator of federal financial assistance to education,\" the agency plays a lead role in enforcing Title IX against educational institutions. And according to an executive order, the Attorney General coordinates the implementation and enforcement of Title IX across the executive branch. Subject to the coordinating function of the Attorney General, the Department of Justice's Civil Rights Division and OCR collaborate in enforcing Title IX consistent with a memorandum of understanding reached between the agencies, which notes that OCR has primary responsibility for enforcing the statute directly against recipients of financial assistance from ED through complaint investigations and compliance reviews.", "Accordingly, ED has promulgated regulations implementing Title IX that apply to traditional educational institutions of all levels that receive federal assistance, including elementary and secondary schools, as well as institutions of higher education. Those regulations specifically bar educational institutions from excluding individuals or denying the benefits of any education program or activity on the basis of sex. ED regulations also require that recipients of federal financial assistance that operate education programs designate an employee (commonly referred to as the Title IX Coordinator) to coordinate efforts to comply with ED regulations regarding sex-based discrimination. Further, schools must establish grievance procedures that provide \"prompt and equitable resolution\" of complaints alleging prohibited actions. ", "Pursuant to its role in enforcing Title IX, OCR may conduct periodic reviews of institutions, or directed investigations, to ensure that recipients of federal funds are complying with applicable requirements. OCR also receives complaints from individuals alleging violations of Title IX by educational institutions and investigates allegations. When violations of the statute are found through these means, the office can seek informal resolution through a resolution agreement. According to OCR, if negotiations do not reach a resolution agreement, it may then take more formal enforcement measures, including seeking to suspend or terminate an institution's funding. ", "Notably, neither Title IX's text nor ED's current regulations directly address sexual harassment. In the administrative context, ED's OCR has issued a series of guidance documents that have interpreted Title IX to bar sexual harassment and define distinct responsibilities for educational institutions with regard to such allegations. ", "These documents\u2014while sometimes subject to change\u2014generally reflect a different analysis for assessing a school's Title IX liability for harassment than the Supreme Court case law addressing private rights of action for damages for sexual abuse or harassment. In particular, ED has applied a constructive notice requirement that prompts a school's Title IX responsibility to respond, rather than \"actual notice\" to \"an appropriate person\" as required in the context of suits for damages. In addition, while the Supreme Court has explained that a school's response will result in liability only where \"clearly unreasonable,\" ED has articulated baseline standards for how schools must respond to comply with Title IX. Finally, while the Supreme Court rejected holding schools responsible for sexual harassment under theories of vicarious liability, ED has held schools responsible for sexual harassment under Title IX where a teacher commits misconduct in the scope of their employment."], "subsections": [{"section_title": "1997 ED Guidance and Subsequent Supreme Court Decisions Regarding Sexual Harassment", "paragraphs": ["In 1997, OCR released a guidance document stating that sexual harassment of students by school employees, other students, or third parties is a form of sex discrimination prohibited by Title IX. The guidance explained that two general types of conduct constituted sexual harassment: ", "1. Quid pro quo harassment: wherein a school employee \"explicitly or implicitly conditions a student's participation in an education program or activity or bases an educational decision on the student's submission to unwelcome sexual advances, requests for sexual favors, or other verbal, nonverbal, or physical conduct of a sexual nature\"; or 2. Hostile environment harassment: wherein sexual harassing conduct by a school's employee, another student, or a third party \"is sufficiently severe, persistent, or pervasive to limit a student's ability to participate in or benefit from an education program or activity, or to create a hostile or abusive educational environment.\"", "In the former case, the 1997 Guidance explained that a school would be liable for quid pro quo harassment by an employee in a position of authority whether or not it knew or should have known of the harassment. In the latter case, the 1997 Guidance explained that, in instances of hostile environment harassment by employees , a school would be liable for harassment if the employee acted with apparent authority or was aided in carrying out the harassment due to his or her position. ", "With respect to sexual harassment by other students or third parties , a school would be liable for harassment if \"(i) a hostile environment exists in the school's programs or activities, (ii) the school knows or should have known of the harassment, and (iii) the school fails to take immediate and appropriate corrective action.\" The Guidance explained that while Title IX does not render a school responsible for the actions of its students, it does make schools responsible for their \"own discrimination in failing to remedy [harassment] once the school has notice.\" ", "Following the release of OCR's 1997 Guidance, the Supreme Court shortly thereafter recognized a substantively different standard for establishing liability in a private suit for damages directly against a school. As discussed above, in 1998, in Gebser , the Supreme Court ruled that in cases of harassment committed by a teacher , a school district is liable only when it has actual knowledge of allegations by an \"appropriate person,\" and so deficiently responds to those allegations that its response amounts to deliberate indifference to the discrimination. And the next year in Davis , the Court held that in addition to a showing of actual knowledge by an appropriate person, and deliberate indifference, a plaintiff suing for damages for sexual harassment committed by a student must show that the conduct was \"so severe, pervasive, and objectively offensive\" that it denied the victim equal access to educational opportunities or benefits.", "Crucially, the Court in Gebser distinguished between actions by a school that could result in Title IX liability for damages in a private right of action, and Title IX administrative requirements imposed by a federal agency in implementing and enforcing the statute. According to the Court, agencies possess authority to enforce requirements that effectuate Title IX's mandate, \"even if those requirements do not purport to represent a definition of discrimination under the statute.\" In other words, agencies enforcing Title IX may administratively require recipients to comply with certain procedures and rescind funding for violations, even though breaches of such requirements might not subject a school to liability under a private suit for damages."], "subsections": []}, {"section_title": "ED's Guidance Documents Regarding Sexual Harassment Subsequent to Gebser and Davis", "paragraphs": ["Following these Supreme Court decisions regarding the standard for liability in Title IX damages suits alleging sexual harassment, ED issued a number of guidance documents generally reaffirming its basic position outlined in its 1997 Guidance, including with respect to notice, a school's responsibilities under Title IX to comply with the statute, and the application of vicarious liability in certain situations. In these documents, ED has indicated that the liability standard imposed by the Supreme Court for Title IX sexual harassment violations is distinct from the standards appropriate in the administrative enforcement context. In other words, a school's responsibilities in responding to sexual harassment allegations under Title IX have been treated differently in the context of a suit for damages than in the administrative enforcement context. "], "subsections": [{"section_title": "2001 Sexual Harassment Guidance", "paragraphs": ["In 2001, OCR issued a Revised Sexual Harassment Guidance document that\u2014in light of the intervening Supreme Court decisions that set a more stringent standard for obtaining relief regarding private damages actions \u2014reaffirmed the standards of the agency's 1997 Guidance as grounded in Title IX regulations and distinct from private damages litigation. The guidance explicitly applies to all educational institutions that receive federal funds, including universities. It outlines the compliance standards OCR uses for enforcing and investigating violations of Title IX. "], "subsections": [{"section_title": "Required Response", "paragraphs": ["As a threshold matter, schools are responsible for adopting grievance procedures that provide prompt and equitable resolution of complaints of sexual harassment. Failure to do so will mean that a school is in violation of Title IX. Generally speaking, when sexual harassment has occurred, educational institutions must take \"prompt and effective action calculated to end the harassment, prevent its recurrence, and, as appropriate, remedy its effects.\" If the \"school, upon notice of the harassment, responds by taking prompt and effective action to end the harassment and prevent its recurrence, the school has carried out its responsibility under the Title IX regulations.\" Though framed as guidance, the 1997 and 2001 documents were promulgated by ED after an opportunity for the public to comment on them. (This does not mean, however, that the documents are legislative rules that carry the force of law; guidance documents generally serve to inform the public about the agency's approach to enforcement of the laws and regulations it administers. ) "], "subsections": []}, {"section_title": "Types of Harassment", "paragraphs": ["The 2001 Guidance stated that \"unwelcome conduct of a sexual nature\" constitutes sexual harassment. It indicated, however, that it aimed to \"move away from specific labels for types of sexual harassment.\" Instead, the 2001 Guidance explained that the crucial issue in each case \"is whether the harassment rises to a level that it denies or limits a student's ability to participate in or benefit from the school's program based on sex.\" In that situation, \"harassment has occurred that triggers a school's responsibilities under, or violates, Title IX or its regulations.\" That said, it went on to describe types of harassment that largely tracked the categories outlined in the 1997 Guidance: quid pro quo harassment and hostile environment harassment. In the former situation, wherein a teacher or employee conditions a benefit or educational decision on a student's submission to unwelcome sexual conduct, such harassment is automatically considered harassment that limits or denies a student's ability to participate in or benefit from the school's program and thus discriminates based on sex in violation of Title IX.", "Unlike so-called quid pro quo harassment, a case of hostile environment harassment requires a further investigation into whether the conduct is sufficiently serious to limit or deny a student's ability to benefit from or participate in a school's program because of sex. Because fellow students do not generally have positions of authority, student-on-student harassment generally is considered hostile environment harassment rather than quid pro quo harassment, although teachers and employees may also create a hostile environment. The 2001 Guidance explained that, in evaluating whether hostile environment harassment has occurred, OCR examines all circumstances relevant to the situation. This includes whether the conduct in question was welcome."], "subsections": []}, {"section_title": "Harassment by a Teacher or Employee", "paragraphs": ["The 2001 Guidance also explained that, in the context of harassment by a teacher or school employee, the extent of a school's responsibilities to address harassment depends on whether the harassment occurs within \"the context of the employee's provision of aid, benefits, or services to students\" (i.e., in the context of their job responsibilities). With respect to harassment by teachers or employees in the scope of their job responsibilities (or who reasonably appear to be acting in that capacity), assuming the harassment limits or denies a student's ability to benefit from or participate in a school program, a school is responsible for the discriminatory conduct and must stop the behavior, prevent its recurrence, and remedy the effects of harassment for the victim. In such situations, a school is responsible to do this \"whether or not\" it has notice of the behavior. ", "Whether sexual harassment occurs within the scope of an employee's job responsibilities can depend on a variety of factors. In cases of quid pro quo harassment, the behavior clearly occurs in the scope of an employee's job responsibilities. For hostile environment harassment, OCR will evaluate a number of factors to determine whether the harassment occurred in the context of an employee's job responsibilities. The 2001 Guidance also indicates that sometimes harassment that does not occur within an employee's job responsibilities will be sufficiently serious to create a hostile environment. In these cases, once a school has notice of the behavior, it has a duty to stop the harassment and prevent its recurrence."], "subsections": []}, {"section_title": "Harassment by Other Students or Third Parties", "paragraphs": ["Likewise, in the context of student-on-student harassment (or harassment by third parties) that creates a hostile environment, the school is responsible for eliminating the environment and preventing its recurrence. However, a school is in violation of Title IX if it has notice of the environment and fails to take \"prompt and effective action\" to correct the situation. In that case, the school is responsible for ending the harassment, preventing its recurrence, and remedying the effects of harassment for the student that \"could reasonably have been prevented\" if the school reacted appropriately."], "subsections": []}, {"section_title": "Notice of Sexual Harassment", "paragraphs": ["As noted above, in certain situations of harassment by a teacher or employee, schools are responsible for harassment even without notice. Otherwise, in cases of sexual harassment by employees, students, or third parties, the 2001 Guidance explains that recipients have notice of a sexually hostile environment if a responsible school employee \"knew, or in the exercise of reasonable care, should have known,\" of the harassment. A responsible employee is \"any employee who has the authority to take action to redress the harassment, who has the duty to report to appropriate school officials sexual harassment or any other misconduct by students or employees, or an individual who a student could reasonably believe has this authority or responsibility.\" Even if a student fails to inform the school or use the appropriate grievance procedures to complain of harassment, a school will be in violation of Title IX if it knows or reasonably should know of a hostile environment. A school is in violation of Title IX if it has notice of a hostile environment and fails to take immediate and effective corrective action."], "subsections": []}, {"section_title": "A School's Responsibilities", "paragraphs": ["Once a school has notice of potential sexual harassment of students, the 2001 Guidance explained that \"it should take immediate and appropriate steps to investigate or otherwise determine what occurred and take prompt and effective steps reasonably calculated to end any harassment, eliminate a hostile environment if one has been created, and prevent harassment from occurring again.\" In cases of reports of harassment by a student, parent of an elementary or secondary student, or harassment observed by a responsible employee, regardless of whether the harassed student, or student's parents, decide to file a formal complaint, \"the school must promptly investigate to determine what occurred and then take appropriate steps to resolve the situation.\"", "For situations where a school learns of harassment via other means, a variety of factors will determine whether there are reasonable grounds for the school to investigate. If the allegations are confirmed, then a school has a responsibility to respond as described above. ", "The 2001 Guidance also noted that informal mechanisms may sometimes be used to resolve complaints if the parties agree to do so. However, it made clear that certain informal procedures, such as mediation, are not appropriate in certain cases, such as alleged sexual assault. Finally, the Guidance noted that while \"the rights established under Title IX must be interpreted consistent with any federal guaranteed due process rights,\" schools should nevertheless \"ensure that steps to accord due process rights do not restrict or unnecessarily delay the protections provided by Title IX to the complainant.\""], "subsections": []}]}, {"section_title": "2011 Dear Colleague Letter Regarding Sexual Violence Between Peers", "paragraphs": ["In 2011, OCR issued a Dear Colleague Letter that supplemented its 2001 Guidance and focused on the obligations under Title IX for schools that focused exclusively on peer-to-peer harassment, rather than harassment by a teacher. The Letter explained that sexual harassment \"is unwelcome conduct of a sexual nature,\" and includes \"unwelcome sexual advances, requests for sexual favors, and other verbal, nonverbal, or physical conduct of a sexual nature.\" Sexual harassment also includes sexual violence, which refers to \"physical sexual acts perpetrated against a person's will or where a person is incapable of giving consent due to the victim's use of drugs or alcohol.\" ", "Sexual harassment creates a hostile environment \"if the conduct is sufficiently serious that it interferes with or limits a student's ability to participate in or benefit from the school's program.\" When a school \"knows or reasonably should know about student-on-student harassment that creates a hostile environment, Title IX requires the school to take immediate action to eliminate the harassment, prevent its recurrence, and address its effects.\"", "The Letter also noted that schools will sometimes have an obligation to respond to incidents of sexual harassment that occur \"off school grounds, outside a school's education program or activity.\" And whether or not the conduct occurred, if a student files a complaint, \"the school must process the complaint in accordance with its established procedures.\" Because students can experience the effects of off-campus sexual harassment at school, \"schools should consider the effects of the off-campus conduct when evaluating whether there is a hostile environment on campus.\" ", "With respect to investigations of sexual harassment allegations, the Letter stated that the standards for liability in the criminal context are distinct from Title IX, and therefore a criminal investigation into allegations of sexual violence does not relieve a school of its duty to conduct a Title IX investigation. It also instructed schools not to wait until the conclusion of a criminal investigation or proceeding to begin their own investigation under Title IX, and if appropriate, to take immediate steps to protect students while a criminal investigation occurs. Although a school may need to temporarily delay an investigation while a criminal fact-finding occurs by police, once the police have finished their fact-finding, the school must promptly resume and complete its fact-finding for Title IX purposes. ", "The 2011 Dear Colleague Letter also outlined various elements of a school's grievance procedures that are critical in order to provide \"prompt and equitable resolution of sexual harassment complaints,\" including sexual violence. The Letter noted \"in order for a school's grievance procedures to be consistent with Title IX standards, the school must use a preponderance of the evidence standard.\" This standard contrasted with the 2001 Guidance, which did not impose an evidentiary standard on school investigations, as well as the prior practice of some schools, which used a \"clear and convincing\" standard. A preponderance of the evidence standard, which requires a showing that a fact or event is more likely than not, is lower than a clear and convincing standard, which requires providing the \"ultimate factfinder [with] an abiding conviction\u00a0that the truth of . . . factual contentions are 'highly probable.'\"", "The Letter also strongly discouraged schools from allowing the parties in a hearing to personally cross-examine one another. It noted that if a school allows parties to appeal a finding or remedy, it must do so for both parties. "], "subsections": []}, {"section_title": "2014 Q&A Document: Investigating Allegations of Sexual Violence", "paragraphs": ["Following requests by schools on how to adequately comply with the 2011 Dear Colleague Letter, ED issued a forty-six-page supplemental Questions and Answers document in 2014 (2014 Q&A) that further explained the responsibilities of schools with regard to allegations of student-on-student sexual violence. It provided more specific instructions to educational institutions regarding their obligations under Title IX. Like the 2011 Dear Colleague Letter, the 2014 Q&A took the form of a guidance document, rather than a legally enforceable legislative rule.", "The Q&A made clear that when \"a school knows or reasonably should know of possible sexual violence, it must take immediate and appropriate steps to investigate or otherwise determine what occurred.\" It clarified that, in cases of student-on-student sexual violence, a school violates Title IX when (1) \"the alleged conduct is sufficiently serious to limit or deny a student's ability to participate in or benefit from the school's educational program\" (creating a hostile environment) and (2) \"the school, upon notice, fails to take prompt and effective steps reasonably calculated to end the sexual violence, eliminate the hostile environment, prevent its recurrence, and, as appropriate, remedy its effects.\"", "The 2014 Q&A also explained that Title IX requires schools, upon notice of an allegation, to protect complainants and ensure their safety through the use of interim steps before an investigation is complete. Among other things, it further specified in detail the requirements of Title IX with respect to the responsibilities of a school's Title IX Coordinator (the employee required by regulation to coordinate a school's compliance with Title IX), the elements expected in a school's written grievance procedures for responding to complaints of sexual violence, and which individuals qualify as responsible employees who are required to report allegations of sexual violence to a school's Title IX Coordinator. ", "The document also detailed the requirements for schools in conducting investigations into alleged sexual violence. It stressed that while a school is permitted to use its own \"student disciplinary procedures\" to process complaints of sexual violence, that if a school chooses to do so, the imposition of sanctions against a perpetrator, \"without additional remedies, likely will not be sufficient to eliminate the hostile environment and prevent recurrence.\"", "The 2014 Q&A noted that because Title IX investigations will not result in the incarceration of individuals, \"the same procedural protections and legal standards are not required\" in Title IX investigations as are compelled in criminal proceedings. Even if a criminal investigation of student-on-student sexual violence is ongoing, a school must conduct its own Title IX investigation. Indeed, the conclusion of a criminal investigation without charges \"does not affect a school's Title IX obligations.\"", "The document also explained that schools were not required to conduct hearings to assess allegations of sexual violence, but if they did, they could not require the complainant to attend. Further, in the 2014 Q&A, OCR \"strongly discourage[d]\" schools from allowing parties to personally cross-examine one another because such actions \"may be traumatic or intimidating, and may perpetuate a hostile environment.\" Instead, schools could allow parties to submit questions to a trained third party to ask on their behalf. The third party was advised to screen those questions \"and only ask those it deem[ed] appropriate and relevant to the case.\""], "subsections": []}]}]}, {"section_title": "Legal Challenges to University Title IX Procedures", "paragraphs": ["In response to the foregoing guidance from ED, as well as increased oversight from OCR between 2011 and 2016, schools developed a variety of procedures to ensure that their responses to allegations of sexual assault complied with Title IX. Generally speaking, the specific type of procedures for investigating allegations of sexual harassment vary considerably across educational institutions. While Title IX provides ED with some discretion in terms of administrative enforcement of the statute's bar on sex-based discrimination, including the ability to require public and private schools to develop certain procedures for handling complaints (as long as those schools receive federal funds), this discretion is constrained with respect to state actors (including public universities) by due process protections that set a baseline for the procedural protections afforded to the accused.", "In the public university context, a number of students subject to disciplinary sanctions for misconduct thus challenged the disciplinary procedures in state and federal courts as unconstitutional. In particular, a number of students faced with disciplinary action by public universities have raised constitutional challenges to the Title IX procedures used to find them responsible for sexual misconduct, arguing that universities violated the Due Process Clause in the handling of their case."], "subsections": [{"section_title": "Due Process Clause: Background Principles", "paragraphs": ["The Due Process Clause of the Fourteenth Amendment requires states to observe certain procedures when depriving individuals of life, liberty, or property. In addition to protecting against the deprivation of an individual's physical property, the Constitution guards against the deprivation of certain \"property interests\" without due process. The property interests protected by the Due Process Clause are not themselves created by the Constitution; instead, those interests arise from an independent source, such as state or federal law. To have a protected property interest in a government-created benefit, one must show a \"legitimate claim of entitlement\" that originates in \"existing rules or understandings that stem from an independent source such as state law.\" Likewise, when a state deprives an individual of liberty, states must afford due process to the individual. In fact, when a \"person's good name, reputation, honor, or integrity is at stake because of what the government is doing to him,\" due process may be implicated. In these circumstances, courts often require an accompanying state action that alters or removes a legal status to constitute a deprivation of liberty.", "Precisely what procedures are constitutionally required before depriving individuals of a protected interest can vary. When deciding what process is due, courts balance three factors enunciated by the Supreme Court in Ma thews v. Eldridge : (1) \"the private interest that will be affected by the official action\"; (2) the risk of an erroneous deprivation and the probable value of additional procedures; and (3) the interest of the government. In general, the Court has made clear that individuals with a protected interest are entitled to notice of the proposed action and a \"meaningful opportunity to be heard\" before the state may deprive them of that interest. The Supreme Court has explained, however, that due process is not a \"technical conception with a fixed content unrelated to time, place, and circumstances.\" Instead, the concept is \"flexible and calls for such procedural protections as the particular situation demands.\" In conducting the balancing of factors pursuant to\u00a0 M athews v. Eldridge , the severity of the deprivation is a key factor in determining what procedures are constitutionally required. In general, the stronger the private interest at risk of deprivation, the more formal and exacting procedures will be required by courts.", "The only Supreme Court case to focus on procedural due process in the (nonacademic) student discipline context is Goss v. Lopez . In that case, high school students challenged their suspension from school for up to 10 days without a hearing. The Court first ruled that the public school students had a \"legitimate entitlement to a public education,\" which was a property interest protected by due process; and that interest was deprived by the suspension. As to the process required, the Court ruled that, at a minimum, \"students facing suspension . . . must be given some kind of notice and some kind of hearing.\" The Court also clarified that cases of more stringent sanctions, such as suspensions beyond 10 days or expulsions, \"may require more formal procedures.\""], "subsections": []}, {"section_title": "Due Process Rights for Students at Public Universities", "paragraphs": ["Generally speaking, because public universities constitute state actors subject to the Due Process Clause, they must comply with constitutional standards when suspending or expelling students. Private universities, on the other hand, do not. The Supreme Court has assumed, without deciding on the merits, that students of public universities enjoy a \"constitutionally protectable property right\" in their continued enrollment in an educational institution. A number of federal courts of appeals have ruled that students enrolled in public universities have liberty and/or property interests in their education and that expulsion and certain suspensions can constitute a deprivation of that interest. ", "As discussed in further detail below, as a baseline matter, federal courts have held that due process requires public schools to provide students with notice of the charges against them, the evidence used to make a determination, and the ability to present their side of the story to an unbiased decisionmaker. Of course, whether a public university has afforded a student due process \"is a fact-intensive inquiry and the procedures required to satisfy due process will necessarily vary depending on the particular circumstances of each case.\" "], "subsections": []}, {"section_title": "Due Process Challenges to Procedures Used by Public Universities in Sexual Assault Investigations", "paragraphs": ["While colleges and universities have developed various procedures to comply with OCR's guidance regarding an institution's response to allegations of sexual harassment, a number of individuals subject to these disciplinary processes have challenged some of these procedures in federal court. Several courts have since issued decisions in cases brought by students asserting a due process violation in the context of a Title IX investigation or adjudicatory proceeding. ", "The following section discusses recent notable judicial rulings that address the constitutionality of disciplinary proceedings in the context of sexual misconduct. The discussion below is organized by the type of claim raised against the public university: ", "1. the university failed to provide adequate notice of the charges against the student; 2. the university did not permit the accused student to confront and challenge the credibility of witnesses who testified against him; 3. the university allowed biased decisionmakers to oversee the proceedings; and 4. the university employed unfair review processes when rehearing an allegation brought by a complainant.", "Importantly, some of the judicial rulings discussed below address whether a student's stated claim is sufficient to survive a motion to dismiss and do not reach conclusive determinations about the evidence sufficient to establish a due process violation."], "subsections": [{"section_title": "Claims Alleging Inadequate Notice of the Charges", "paragraphs": ["One type of legal challenge raised by students accused of sexual misconduct is that the public universities failed to adequately notify them of the charges. As an initial matter, reviewing courts have taken the view that there generally will be no due process violation on notice grounds when the school (1) provides a student with timely notice of the actual, full charges against him; and (2) provides the accused student with a meaningful opportunity to prepare for the disciplinary hearing against him.", "The absence of such protocols, however, can form the basis of a viable due process claim. For example, at one university, an accused student alleged that he was interviewed by a school staff member assigned to investigate charges of sexual misconduct against him without first being notified of the existence of the sexual misconduct allegation. The student was eventually suspended from the university. A federal district court ruled that, given the severity of the suspension (three years), the lack of notice could amount to a due process violation. The court thus held that the student had stated a claim sufficient to survive a motion to dismiss. ", "In another case, an accused student alleged that he was not given adequate notice of the scope of charges against him. Rather, the school only notified him that his conduct on a particular day was under review, but expelled him for sexual misconduct that occurred in relation to other incidents and dates. The federal district court ruled that \"[b]y conveying a limited scope of focus to plaintiff, defendants prejudiced plaintiff's ability to mount an effective defense, which increased the possibility of an erroneous outcome.\" Taken together with other procedural issues in the school's investigation and decision, the court concluded that the school had deprived the student of a liberty interest without due process of law. ", "Similarly, the Sixth Circuit ruled that a student suspended by a university because of suspected sexual assault had sufficiently pleaded a due process violation when the university allegedly did not make available the evidence used in its disciplinary decision against him. The university's Title IX investigator compiled an investigatory report, which was allegedly used by the school's disciplinary hearing panel to adjudicate the student's case. However, the investigator failed to provide the report to the defendant. The court reasoned that the Constitution requires that a school provide the evidence used against a student in the context of significant disciplinary decisions and that a failure to do so constitutes a due process violation."], "subsections": []}, {"section_title": "Claims Relating to Cross-Examination of Witnesses and Exculpatory Evidence", "paragraphs": ["A number of students have brought claims alleging a denial of due process because they were not afforded the opportunity to cross-examine witnesses in school disciplinary hearings. Courts have often rejected these arguments, however, in both sexual harassment proceedings and other disciplinary hearings, noting that the rights of students in disciplinary proceedings are not the same as those of criminal defendants. Case law reflects that courts have been more willing to entertain such claims when students have been denied an opportunity to challenge the credibility of witnesses where a witness's testimony concerns disputed and critical facts.", "As a general matter, cross-examination has not been regarded as a necessary feature of due process in the civil context. Even outside the context of sexual harassment allegations, courts have often denied due process challenges to university adjudicatory proceedings where students were not permitted to directly cross-examine witnesses, noting that the Due Process Clause does not guarantee the right to cross-examination in school disciplinary proceedings. This principle has been applied in recent cases alleging due process violations in the sexual harassment context. In one case, students challenged a university's adjudicatory proceedings regarding allegations of sexual assault, where accused students were permitted to submit written questions to a panel chair rather than directly to the complainant. The reviewing district court nonetheless rejected a due process challenge to the proceedings. ", "Similarly, the Sixth Circuit denied a due process challenge to a university's disciplinary hearing concerning sexual assault allegations where students were not permitted to directly cross-examine their accuser. The students were permitted to submit written questions to the hearing panel, but were not permitted to submit any follow-up questions, and the panel failed to ask all of the questions they submitted. The circuit court reasoned that the proceedings satisfied the \"limited\" requirement of cross-examination where credibility is at issue, as the \"marginal benefit that would accrue to the fact-finding process by allowing follow-up questions \u2026 is vastly outweighed by the burden\" on the school. ", "Likewise, the Fifth Circuit rejected a due process challenge to a university's disciplinary proceedings where the challengers argued they were denied the ability to effectively cross-examine witnesses and confront their accuser. In that case, the court noted that the school's decision did not rest on testimonial evidence, but on the videos and a photo taken and distributed by one of the challengers.", "Where a credibility determination was critical to the outcome of a proceeding, however, courts have often ruled in favor of due process challenges. For instance, the Sixth Circuit held that a university violated due process when it failed to provide any form of cross-examination in the hearing and the disciplinary decision necessarily rested on a credibility determination. In that case, the university based its decision to suspend a student entirely on the hearsay statement of the complainant, who did not appear at the disciplinary hearing. Importantly, the court noted that the suspended student only requested the additional procedure of posing questions to his accuser through the hearing panel, but he did not ask for the opportunity to directly cross-examine her. The court concluded that in such circumstances, some method must be made available to the adjudicative body to \"assess the demeanor of both the accused and his accuser.\" The court concluded this procedure was necessary to comport with due process when the university's decision rested on a credibility determination. ", "Likewise, the absence of a live hearing may sometimes form the basis of a viable due process claim. For instance, one federal district court ordered a university to provide an accused student facing the possibility of expulsion with a live hearing in order to comply with due process. In that case, the university's procedures for handling sexual misconduct allegations involved an investigator who would meet separately with the parties, conduct interviews with witnesses, and eventually reach a determination as to culpability without any opportunity for a hearing. The court reasoned that due to \"the University's method of private questioning through the investigator, Plaintiff has no way of knowing which questions are actually being asked of Claimant or her response to those questions.\" Accordingly, the court concluded that the university violated the accused student's right to due process.", "Similarly, the Sixth Circuit has ruled that where credibility is at issue, a university \"must give the accused student or his agent an opportunity to cross-examine the accuser and adverse witnesses in the presence of a neutral fact-finder.\" In that case, a university investigator concluded that the evidence supporting a finding of sexual misconduct was not sufficient, but the university's appeals board reversed after reviewing the report because it found the description of events given by the alleged victim and adverse witnesses more persuasive. At no time was the accused student given a live hearing or a chance to cross-examine his accuser or any adverse witnesses. The Sixth Circuit ruled that because the university ultimately had to \"choose between competing narratives\" in order to resolve the case, due process required a chance to cross-examine his accuser and adverse witnesses before a neutral fact-finder.", "Some students have also brought due process claims alleging that they were denied the ability to offer exculpatory evidence on their own behalf. Courts appear to examine such claims on a largely fact-specific basis. For instance, in one suit brought against a university, a student alleged he was denied the opportunity to present physical exculpatory evidence on his own behalf at a sexual assault disciplinary hearing. Specifically, the student claimed he was unable to present text messages at his hearing that he claimed would exonerate him. The district court ruled that this allegation raised concerns that he was denied due process. "], "subsections": []}, {"section_title": "Claims Alleging Biased Decisionmakers in Disciplinary Proceedings", "paragraphs": ["Students subject to disciplinary proceedings regarding sexual harassment or assault at institutions of higher education have also brought challenges alleging that a decisionmaker was biased against them. As a threshold matter, courts generally assume that school disciplinary panels are \"entitled to a presumption of impartiality, absent a showing of actual bias.\" A plaintiff must generally allege facts sufficient to overcome this baseline presumption, such as statements by decisionmakers or a pattern of decisionmaking evidencing bias. ", "For instance, a Fifth Circuit panel rejected a due process claim alleging bias in a university disciplinary hearing concerning sexual assault because the challengers failed to show how the integrity of the proceedings was undermined. In that case, the individual tasked as a victim advocate for the school investigated the charges against the accused and advised the panel members who made the disciplinary decision. The court reasoned that the investigator relied on photo and video evidence to render his findings to the panel and \"there is nothing in the record . . . to suggest that a different investigator would have uncovered information diminishing the significance of that graphic evidence to the initial findings.\" Further, a separate university attorney advised the panel that they were free to draw their own conclusions from the proffered evidence.", "Evidence of bias in the consequential behavior or statements of decisionmakers, however, may give rise to a viable due process challenge. For example, the Sixth Circuit recently held that a student sufficiently pleaded a due process claim where he alleged that a university disciplinary hearing for alleged sexual assault was biased against him. In that case, one of the hearing panel members acted as investigator, prosecutor, and judge. The court noted that that fact alone did not give rise to a due process violation. Rather, because that individual also allegedly dominated the panel with remarks intended to reduce the defendant's credibility, and reportedly said during the hearing, \"I'll bet you do this [commit sexual assault] all the time,\" the student had plausibly alleged that the hearing panel member was not impartial and had pre-judged his case.", "Courts have also addressed claims alleging a due process violation for bias based on institutional pressures, such as the sexual assault training received by university officials. For example, one district court rejected a due process claim which argued that university staff members were biased because they received sexual assault training that was not balanced with training for protecting the due process rights of accused students. The court reasoned that it was a \"laudable goal\" for the university to raise awareness of sexual assault and increase sensitivity to problems that victims of sexual violence experience. Plaintiffs' mere belief that the school \"ha[d] a practice of railroading students accused of\u00a0sexual\u00a0misconduct simply to appease the Department of Education and preserve its federal funding\" was unsupported by any evidence. ", "In contrast, another district court rejected a motion to dismiss a due process claim brought by an expelled student alleging that the investigation and training materials given to the panel who decided his case were biased. The court reasoned that while this was a \"he-said/she-said\" case, \"there seems to have been an assumption under [the] training materials that an assault occurred. As a result, there is a question whether the panel was trained to ignore some of the alleged deficiencies in the investigation and official report the panel considered.\" Accordingly, the court concluded that there may have been a due process violation because it was \"plausible that the scales were tipped\" against the accused student."], "subsections": []}, {"section_title": "Claims Alleging Unfair Rehearing or Appeal Processes", "paragraphs": ["Finally, a number of federal district court cases have addressed allegations that a university's disciplinary proceedings violated due process on the basis of unfair review processes for rehearing appeals. ", "In one district court case, a student was cleared by a hearing panel on a charge of sexual assault, but the university ordered a new hearing, apparently premised only on the school being unable to adequately prove its case in the first hearing. The district court found this to be fundamentally unfair to the student and ruled that the allegations survived the university's motion to dismiss. ", "Similarly, in another district court case, a suspended student challenged the validity of a school's procedures where he was initially found not responsible for sexual misconduct by a hearing board, but was later determined guilty after the complainant appealed that decision. At the administrative appeal stage, the school did not give the defendant sufficient notice of, or time to respond to, new evidence against him; did not provide him with details of the identity of a woman he was newly accused of assaulting; did not tell him the names of the members of the appeal board; did not give him notice of the appeal board's meeting; and did not permit him to attend that meeting. The appeals board reversed the initial hearing board's determination that the student was not responsible for sexual misconduct, without explanation, and without any oral presentations or live testimony. The reviewing federal district court ruled that the school failed to provide the student with a meaningful hearing. ", "Likewise, a student brought a claim in federal district court against a university after being expelled for sexual assault even though he had been found not responsible by an initial hearing panel. In that case the school permitted a rehearing after the complainant appealed the initial hearing panel's decision, and subsequently the individual presiding over the appeal expelled the student. The individual presiding over the appeal conducted off-the-record and ex parte meetings with the accuser and failed to deliver the accused student a record of those meetings. According to the reviewing court, by the time the student was permitted to present his defense, the individual overseeing his appeal had pre-judged the case, and expelled the accused student without providing a basis for the decision. The court ruled that these procedural inadequacies, combined with a failure to offer the student notice of the full scope of allegations against him, combined to constitute a due process violation."], "subsections": []}]}]}, {"section_title": "ED's Proposed Title IX Regulations Regarding Sexual Harassment", "paragraphs": ["With the foregoing considerations in the background, in September 2017 OCR withdrew the 2011 Dear Colleague Letter and 2014 Questions and Answers document. ED explained that it would begin the rulemaking process to codify a school's responsibilities under Title IX. In the interim, ED stated that it would continue to rely on the 2001 Guidance; it also issued a new Question and Answer document indicating how the department would address sexual misconduct during that time. The document notifies schools that they may, in certain circumstances, resolve complaints through mediation. It also notifies schools that they may choose to allow appeals either by both parties or solely by the party found to have committed sexual misconduct and not the alleged victim.", "On November 29, 2018, ED issued a notice of proposed rulemaking in the Federal Register . If adopted, the proposal would significantly alter the responsibilities of schools in responding to allegations of sexual harassment.", "Among other things, the proposed regulation would (1) define in narrower terms what conduct qualifies as sexual harassment under Title IX; (2) require \"actual notice\" of harassment, rather than constructive notice, to trigger a school's Title IX responsibilities; (3) provide that a school's response to allegations of sexual harassment will violate the statute only if amounting to deliberate indifference; and (4) impose new procedural requirements that reflect concern for due process when schools investigate allegations and make determinations of culpability. "], "subsections": [{"section_title": "Conduct That Constitutes Sexual Harassment Under Title IX", "paragraphs": ["The proposed regulation would first define sexual harassment in the following ways:", "an employee conditioning the provision of a benefit, service, or aid on the individual's participation in unwelcome sexual conduct (i.e., quid pro quo); \"unwelcome conduct on the basis of sex that is so severe, pervasive, and objectively offensive that it effectively denies a person equal access to the recipient's education program or activity\" (i.e., hostile environment); or sexual assault (as defined in regulations implementing the Clery Act).", "Notably, among the changes to past definitions of sexual harassment issued by ED, the proposal would establish a higher threshold to show a Title IX violation based on hostile environment harassment than that required by ED in the past. As explained in an earlier section of this report, ED's 2001 Guidance described hostile environment harassment as sexually harassing \"conduct [that] is sufficiently serious to deny or limit a student's ability to participate in or benefit from the school's program based on sex.\" The proposed regulations would instead generally adopt the standard for actionable harassment that the Supreme Court's 1999 Davis decision applied in the context of private suits for damages: \"unwelcome conduct on the basis of sex that is so severe, pervasive, and objectively offensive that it effectively denies a person equal access to the recipient's education program or activity.\" In other words, whereas ED previously defined a hostile environment harassment as harassment that is \"sufficiently serious to limit\" a student's ability to benefit from or participate in a school's program, the proposed regulations would define a hostile environment as one \"that is so severe, pervasive, and objectively offensive that it effectively denies a person equal access to the recipient's education program or activity.\" "], "subsections": []}, {"section_title": "Adopting \"Actual Notice\" Requirement", "paragraphs": ["Second, in a departure from past administrative practice, in which ED considered \"constructive notice\" (i.e., known or should have known) to trigger a school's responsibilities in cases of student-on-student harassment, and did not impose a notice requirement in certain cases of harassment by a teacher or employee, the proposal would establish that a school has a duty to respond to allegations of sexual harassment only when it has \"actual knowledge.\" ", "Actual knowledge is defined as notice of harassment (or allegation of harassment) to a school's Title IX Coordinator or official with authority to institute corrective measures; the regulations explicitly reject imputing knowledge to a school based on respondeat superior or constructive notice. ", "Notably, in contrast to past guidance from ED, the mere ability or obligation to report by a school employee does not qualify them as one who possesses authority to institute corrective measures. The proposal explains that this threshold for triggering a school's obligations is intended to align the administrative standard imposed by ED with that articulated by the Supreme Court in Gebser and Davis in the context of private litigation seeking money damages. ", "Further, the proposed regulations would compel schools to respond only to sexual harassment that occurs within a school's \"education program or activity.\" This contrasts with past ED guidance which provided that schools sometimes will be responsible to respond to harassment that occurs \"outside a school's education program or activity.\" For instance, past ED guidance (since rescinded) required schools to \"process all complaints of sexual violence, regardless of where the conduct occurred,\" in order to determine if the conduct has effects on campus."], "subsections": []}, {"section_title": "Adopting the \"Deliberate Indifference\" Standard to Evaluate a School's Response", "paragraphs": ["In another departure from prior administrative practice, in which ED judged a school's response under a \"reasonableness\" standard, the proposed regulations only require a school to respond in a manner that is not \"deliberately indifferent.\" Deliberate indifference is a \"response to sexual harassment [that] is clearly unreasonable in light of the known circumstances.\" Once again, this would tether a school's responsibility to that announced by the Court in Davis in the context of private suits for damages. The proposal explains that, for ED, this standard aptly holds schools accountable while allowing for flexibility in making disciplinary decisions. ", "The proposal outlines three situations in which a safe harbor is provided to a school from a finding of deliberate indifference. First, when a formal Title IX complaint is made (by a complainant or Title IX Coordinator), the proposed regulations outline a number of grievance procedures (outlined below) that schools must follow. When a school follows these procedures it would not be deliberately indifferent and has not discriminated under Title IX. Second, if a school has actual knowledge of harassment because of multiple complainants, the Title IX Coordinator must file a complaint. Again, compliance with the grievance procedures would negate any inference of deliberate indifference in this situation.", "Third, with respect to institutions of higher education, and in situations where there is not a formal complaint, a school would not be deliberately indifferent if it offers and implements supportive measures to the complainant that are aimed to restore or preserve the complainant's access to a school's education program or activity. The school must also at this time notify the complainant in writing of the right to file a formal complaint. As long as an institution of higher education follows these requirements, it would not be deliberately indifferent.", "Aside from these three situations, the proposed regulations provide that a school with actual knowledge of sexual harassment in an education program or activity must respond in a manner that is not deliberately indifferent.", "The proposal would also allow schools to remove an individual accused of sexual harassment from an educational program or activity on an emergency basis. However, a school must conduct an individualized risk and safety analysis, determine that the removal is justified because of an immediate threat to students or employees, and provide the accused with notice and an opportunity to challenge the decision. The regulations also allow schools to place a nonstudent employee on administrative leave during an investigation."], "subsections": []}, {"section_title": "Protocols for Fact-Finding and Determining Culpability", "paragraphs": ["A significant component of the proposal reflects concern that schools provide accused students with due process protections during the fact-finding process and ultimate determination of culpability. As a threshold matter, schools must investigate allegations received in a formal complaint, but if the alleged conduct would not (if proved) constitute sexual harassment under the regulations, or if it did not occur within a sch ool's program or activity, the complaint must be dismissed. Upon receipt of a formal Title IX complaint regarding sexual harassment, a school must provide written notice to the relevant parties of the allegations, including notice of the available grievance procedures, and notice of the allegations constituting a potential violation, \"including sufficient details known at the time and with sufficient time to prepare a response before any initial interview.\" "], "subsections": [{"section_title": "Procedures for Handling Formal Complaints", "paragraphs": ["A school's grievance procedures must treat complainants and respondents equitably, which means that a school must both provide remedies for complainants upon a finding of sexual harassment as well as due process protections for a respondent before any sanctions are imposed. The proposal would provide that a school's treatment of a complainant in response to a formal complaint of harassment can constitute discrimination in violation of Title IX; likewise, a school's treatment of a respondent can discriminate on the basis of sex in violation of Title IX. ", "The procedures must also require an objective evaluation of evidence (both inculpatory and exculpatory) and provide that credibility determinations not be made based on one's status; require that individuals involved in the investigation or decisionmaking process not be biased and receive training on ensuring student safety and providing due process for all parties; include a presumption that respondents are not guilty until proven otherwise; and describe the range of possible sanctions and remedies available, the standard of evidence used, the ability to appeal (if offered) and the range of available supportive measures.", "With respect to a school's actual investigation of alleged harassment, the proposed regulations require that a school must:", "place the burden of proof and of gathering evidence on the school (rather than either party); allow each party equal opportunity to present witnesses and evidence; not restrict parties from gathering and presenting relevant evidence or from discussing the allegations; permit both parties equally to have their choice of advisor or other person join them during proceedings, although the school may restrict an advisor's participation so long as restrictions apply equally to both parties; provide parties with written notice of the relevant details of hearings and interviews and allow sufficient time to prepare; for institutions of higher education, provide a live hearing where the decisionmaker must allow each party to ask the other party and witnesses all relevant questions (and follow-up questions) including those that challenge one's credibility; cross-examination must be done by the party's advisor; at the request of either party, schools must allow for cross-examination via technology with the parties in separated rooms; decisionmakers must not rely on any party or witness's statement if they do not submit to cross-examination; allow both parties an equal opportunity to review evidence from the investigation that is directly related to the allegations; and develop a report summarizing the relevant evidence and provide this to the parties at least 10 days prior to a hearing (or time where responsibility is determined).", "Notably, these requirements depart from past ED guidance by requiring, for institutions of higher education, a quasi-judicial proceeding in the form of a live hearing. Each party may question the other side, and cross-examination must be conducted by a party's advisor."], "subsections": []}, {"section_title": "Determinations of Responsibility", "paragraphs": ["The proposed regulations would also significantly alter the ultimate decisionmaking requirements for schools. For instance, the decisionmaker in a proceeding may not be the investigator or the school's Title IX Coordinator. This would bar the practice of some universities that have used a single investigator to both examine allegations and reach a decision regarding culpability. And in contrast to past guidance from ED, the new regulations permit schools to apply either a preponderance of the evidence standard or a clear and convincing standard. However, schools may apply the former only if they use that same standard for conduct violations other than sexual harassment that carry the same maximum disciplinary penalty. Further, schools must apply the same standard of evidence for complaints against students as it does for employees and faculty. ", "A schools may, but is not required to, allow appeals of decisions. If it does so, it must allow both parties to appeal. A school may also, at any point before reaching a final determination, facilitate an informal resolution process as long as it obtains the parties' written consent and notifies them of the requirements of the process."], "subsections": []}]}]}, {"section_title": "Considerations for Congress", "paragraphs": ["As discussed above, the antidiscrimination mandate of Title IX, enacted in 1972, prohibits discrimination \"on the basis of sex\" in educational programs in general terms. The statute does not expressly refer to or address sex discrimination in the form of sexual abuse, sexual harassment, or sexual assault. Nor does the statute address when, by whom, or under what circumstances such conduct will amount to a Title IX violation.", "Given the statute's silence on these issues, federal courts have largely determined when relief is available for individual victims of sexual abuse or harassment. Indeed, in creating the remedial scheme for a private right of action to address such claims, the Supreme Court sought to \"'infer how the [1972] Congress would have addressed the issue'\" if there had been an express provision in the statute, an approach that the Court observed \"inherently entails a degree of speculation, since it addresses an issue on which Congress has not specifically spoken.\" Likewise, given the sparse statutory language, federal agencies have issued shifting guidelines at to the responsibilities of educational institutions in complying with Title IX. ", "As a general matter, Congress enjoys substantial discretion to modify the terms of Title IX to clarify the appropriate standard in private suits for damages as well as in the administrative enforcement context. Congress could, for instance, amend Title IX to define the specific conduct that amounts to a violation of the statute regarding sexual abuse or harassment. In addition, an amendment could also clarify whether liability for harassment should be handled differently in elementary and secondary schools, as opposed to the university context. Likewise, legislation could distinguish between harassment by teachers from that between students.", "Further, because the private right of action under Title IX has been judicially implied, rather than expressly codified in statute, Congress could modify the legal standards that apply in a private suit for damages.", "Finally, aside from directly amending Title IX, Congress could also direct federal agencies to alter their administrative enforcement of the statute. For example, Congress could direct ED to promulgate regulations that distinguish between various types of sexual harassment or treat harassment differently depending on the context."], "subsections": []}]}}
{"id": "RL32109", "title": "Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress", "released_date": "2019-05-17T00:00:00", "summary": ["The Navy began procuring Arleigh Burke (DDG-51) class destroyers, also known as Aegis destroyers, in FY1985, and a total of 82 have been procured through FY2019. The Navy's proposed FY2020 budget requests funding for the procurement of three more DDG-51s, which would be the 83rd, 84th, and 85th ships in the class.", "DDG-51s planned for procurement in FY2018-FY2022 are being procured under a multiyear procurement (MYP) contract that Congress approved as part of its action on the Navy's FY2018 budget. DDG-51s procured in FY2017 and subsequent years are being built to a new design (the Flight III DDG-51 design), which incorporates a new and more capable radar called the Air and Missile Defense Radar (AMDR) or SPY-6 radar.", "The Navy procured DDG-51s from FY1985 through FY2005, and resumed procuring them in FY2010. In FY2007-FY2009, during the time when the Navy was not procuring DDG-51s, the Navy procured three Zumwalt (DDG-1000) class destroyers. The Navy plans no further procurement of DDG-1000s. The Navy's proposed FY2020 budget requests $155.9 million in procurement funding to help complete the total procurement cost of the three DDG-1000 class ships.", "The Navy estimates the combined procurement cost of the three DDG-51s requested for procurement in FY2020 at $5,463.0 million, or an average of $1,821.0 million each. The ships have received $363.7 million in prior-year Economic Order Quantity (EOQ) advance procurement (AP) funding (i.e., funding for up-front batch orders of components of DDG-51s to be procured under the FY2018-FY2022 MYP contract). The Navy's proposed FY2020 budget requests the remaining $5,099.3 million in procurement funding needed to complete the estimated procurement cost of the three DDG-51s, as well as $224.0 million in EOQ funding for DDG-51s to be procured in FY2021 and FY2022, bringing the total amount requested for the DDG-51 program for FY2020 to $5,323.3 million, excluding outfitting and post-delivery costs.", "The Navy wants to procure the first ship of a new class of large surface combatants in FY2025. Under the Navy's plan, FY2025 would be the final year of DDG-51 procurement.", "Issues for Congress for FY2019 for the DDG-51 and DDG-1000 destroyer programs include the following:", "whether to approve, reject, or modify the Navy's FY2020 funding requests for the DDG-51 and DDG-1000 programs; cost, schedule, and technical risk in the Flight III DDG-51 effort; the potential impact on the DDG-51 program of a possible change in the surface force architecture; and the Navy's plan to shift the mission orientation of the DDG-1000s from an emphasis on naval surface fire support (NSFS) to an emphasis on surface strike."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report presents background information and potential oversight issues for Congress on the Navy's Arleigh Burke (DDG-51) and Zumwalt (DDG-1000) class destroyer programs. The Navy's proposed FY2020 budget requests funding for the procurement of three DDG-51s. Decisions that Congress makes concerning destroyer procurement could substantially affect Navy capabilities and funding requirements, and the U.S. shipbuilding industrial base.", "For an overview of the strategic and budgetary context in which the DDG-51, DDG-1000, and other Navy shipbuilding programs may be considered, see CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress , by Ronald O'Rourke."], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "Navy's Force of Large Surface Combatants (LSCs)", "paragraphs": [], "subsections": [{"section_title": "LSC Definition", "paragraphs": ["Decades ago, the Navy's cruisers were considerably larger and more capable than its destroyers. In the years after World War II, however, the Navy's cruiser designs in general became smaller while its destroyer designs in general became larger. As a result, since the 1980s there has been substantial overlap in size and capability of Navy cruisers and destroyers. (The Navy's new Zumwalt [DDG-1000] class destroyers, in fact, are considerably larger than the Navy's cruisers.) ", "In part for this reason, the Navy now refers to its cruisers and destroyers collectively as large surface combatants (LSCs) , and distinguishes these ships from the Navy's small surface combatants (SSCs) , the term the Navy now uses to refer collectively to its frigates, Littoral Combat Ships (LCSs), mine warfare ships, and patrol craft. The Navy's annual 30-year shipbuilding plan, for example, groups the Navy's surface combatants into LSCs and SSCs."], "subsections": []}, {"section_title": "LSC Force Levels", "paragraphs": ["In December 2016, the Navy released a goal to achieve and maintain a Navy of 355 ships, including 104 LSCs. At the end of FY2018, the Navy's force of LSCs totaled 88 ships, including 22 Ticonderoga (CG-47) class cruisers and 66 Arleigh Burke (DDG-51) class destroyers. Under the Navy's FY2020 30-year (FY2020-FY2049) shipbuilding plan, the Navy is to achieve a force of 104 large surface combatants by FY2029."], "subsections": []}]}, {"section_title": "DDG-51 Program", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The DDG-51 program was initiated in the late 1970s. The DDG-51 ( Figure 1 ) is a multi-mission destroyer with an emphasis on air defense (which the Navy refers to as anti-air warfare, or AAW) and blue-water (mid-ocean) operations.", "DDG-51s, like the Navy's 22 Ticonderoga (CG-47) class cruisers, are equipped with the Aegis combat system, an integrated ship combat system named for the mythological shield that defended Zeus. CG-47s and DDG-51s consequently are often referred to as Aegis cruisers and Aegis destroyers, respectively, or collectively as Aegis ships. The Aegis system has been updated several times over the years. Existing DDG-51s (and also some CG-47s) are being modified to receive an additional capability for ballistic missile defense (BMD) operations.", "The first DDG-51 was procured in FY1985 and entered service in 1991. A total of 82 have been procured through FY2018, including 62 in FY1985-FY2005 and 20 in FY2010-FY2019. (In FY2007-FY2009, during the time when the Navy was not procuring DDG-51s, the Navy procured three Zumwalt (DDG-1000) class destroyers, which are discussed below.) With a total of 82 ships funded through FY2019, the DDG-51 program is, in terms of number of hulls, one of the largest Navy shipbuilding programs since World War II."], "subsections": []}, {"section_title": "Design Changes", "paragraphs": ["The DDG-51 design has been modified over time. The first 28 DDG-51s (i.e., DDGs 51 through 78) are called Flight I/II DDG-51s. In FY1994, the Navy shifted DDG-51 procurement to the Flight IIA DDG-51 design, which incorporated a significant design change that included, among other things, the addition of a helicopter hangar. A total of 47 Flight IIA DDG-51s (i.e., DDG-79 through DDG-124, plus DDG-127) were procured through FY2016.", "In FY2017, the Navy shifted DDG-51 procurement to the Flight III DDG-51 design, which incorporates a new and more capable radar called the Air and Missile Defense Radar (AMDR) or SPY-6 radar and associated changes to the ship's electrical power and cooling systems. DDG-51s procured in FY2017 and subsequent years (i.e., DDGs 125 and higher, except for DDG-127 noted above) are to be Flight III DDG-51s."], "subsections": []}, {"section_title": "Multiyear Procurement (MYP)", "paragraphs": ["As part of its action on the Navy's FY2018 budget, Congress granted the Navy authority to use a multiyear procurement (MYP) contract for DDG-51s planned for procurement in FY2018-FY2022. This is the fourth MYP contract for the DDG-51 program\u2014previous DDG-51 MYP contracts covered DDG-51s procured in FY2013-FY2017, FY2002-FY2005, and FY1998-FY2001."], "subsections": []}, {"section_title": "Shipbuilders, Combat System Lead, and Radar Makers", "paragraphs": ["DDG-51s are built by General Dynamics/Bath Iron Works (GD/BIW) of Bath, ME, and Huntington Ingalls Industries/Ingalls Shipbuilding (HII/Ingalls) of Pascagoula, MS. Lockheed is the lead contractor for the Aegis system installed on all DDG-51s. The SPY-1 radar\u2014the primary radar for the Aegis system on Flight I/II and Flight IIA DDG-51s\u2014is made by Lockheed. The AMDR\u2014the primary radar for the Aegis system on Flight III DDG-51s\u2014is made by Raytheon."], "subsections": []}, {"section_title": "Modernization and Service Life Extension", "paragraphs": ["The Navy is modernizing its existing DDG-51s (and its CG-47s) so as to maintain their mission and cost-effectiveness out to the end of their projected service lives. In April 2018, the Navy announced that it wants to extend the service lives of all DDG-51s to 45 years\u2014an increase of 5 or 10 years over previous plans to operate DDG-51s to age 35 or 40. Doing this, the Navy has said, will permit the Navy to achieve a total of 355 ships by 2034, or about 20 years earlier than under the FY2019 budget submission, although the 355-ship fleet of the 2030s would have more destroyers and fewer ships of other kinds (including attack submarines and aircraft carriers) than called for in the 355-ship force-level goal. ", "Older CRS reports provide additional historical and background information on the DDG-51 program."], "subsections": []}]}, {"section_title": "DDG-1000 Program", "paragraphs": ["In FY2007-FY2009, during the time when the Navy was not procuring DDG-51s, the Navy procured three Zumwalt (DDG-1000) class destroyers. The Navy plans no further procurement of DDG-1000s. The Navy's proposed FY2020 budget requests $155.9 million in procurement funding to help complete the total procurement cost of the three DDG-1000 class ships. ", "The DDG-1000 is a multi-mission destroyer with an originally intended emphasis on naval surface fire support (NSFS) and operations in littoral (i.e., near-shore) waters. Consistent with that mission orientation, the ship was designed with two new-design 155mm guns called Advanced Gun Systems (AGSs). The AGSs were to fire a new 155mm, gun-launched, rocket-assisted guided projectile called the Long-Range Land-Attack Projectile (LRLAP, pronounced LUR-lap). DDG-1000s are designed carry 600 LRLAP rounds (300 for each gun), and to have additional LRLAP rounds brought aboard the ship while the guns are firing, which would create what Navy officials called an \"infinite magazine.\" In November 2016, however, it was reported that the Navy had decided to stop procuring LRLAP projectiles because the projected unit cost of each projectile had risen to at least $800,000. The Navy began exploring options for procuring a less expensive (and less capable) replacement munition for the AGSs.", "The Navy to date has not announced a replacement munition for the AGSs. In the meantime, it was reported in December 2017 that, due to shifts in the international security environment and resulting shifts in Navy mission needs, the mission orientation of the DDG-1000s will be shifted from an emphasis on NSFS to an emphasis on surface strike, meaning the use of missiles to attack surface ships and perhaps also land targets.", "Under this new plan, the mix of missiles carried in the 80 vertical launch system (VLS) tubes of each DDG-1000 may now feature a stronger emphasis on anti-ship and land-attack cruise missiles missiles. The two AGSs on each DDG-1000 will, for the time being at least, remain for the most part dormant, pending a final decision on whether to procure a replacement munition for the AGSs (which would require modifying the AGSs and their below-deck munition-handling equipment, since both were designed specifically for LRLAP), or instead pursue another option, such as removing the AGSs and their below-deck equipment and replacing them with additional VLS tubes.", "For additional background information on the DDG-1000 program, see the Appendix ."], "subsections": []}, {"section_title": "Surface Combatant Construction Industrial Base", "paragraphs": ["All cruisers, destroyers, and frigates procured since FY1985 have been built at GD/BIW and HII/Ingalls. Both yards have long histories of building larger surface combatants. Construction of Navy surface combatants in recent years has accounted for virtually all of GD/BIW's ship-construction work and for a significant share of HII/Ingalls' ship-construction work. (HII/Ingalls also builds amphibious ships for the Navy and cutters for the Coast Guard.) Navy surface combatants are overhauled, repaired, and modernized at GD/BIW, HII/Ingalls, and other U.S. shipyards.", "Lockheed Martin and Raytheon are generally considered the two leading Navy surface combatant radar makers and combat system integrators. Lockheed is the lead contractor for the DDG-51 combat system (the Aegis system), while Raytheon is the lead contractor for the DDG-1000 combat system, the core of which is called the Total Ship Computing Environment Infrastructure (TSCE-I). Lockheed has a share of the DDG-1000 combat system, and Raytheon has a share of the DDG-51 combat system. Lockheed, Raytheon, and Northrop competed to be the maker of the AMDR to be carried by the Flight III DDG-51. On October 10, 2013, the Navy announced that it had selected Raytheon to be the maker of the AMDR.", "The surface combatant construction industrial base also includes hundreds of additional firms that supply materials and components. The financial health of Navy shipbuilding supplier firms has been a matter of concern in recent years, particularly since some of them are the sole sources for what they make for Navy surface combatants. Several Navy-operated laboratories and other facilities support the Aegis system and other aspects of the DDG-51 and DDG-1000 programs."], "subsections": []}, {"section_title": "FY2020 Funding Request", "paragraphs": ["The Navy estimates the combined procurement cost of the three DDG-51s requested for procurement in FY2020 at $5,463.0 million, or an average of $1,821.0 million each. The ships have received $363.7 million in prior-year Economic Order Quantity (EOQ) advance procurement (AP) funding (i.e., funding for up-front batch orders of components of DDG-51s to be procured under the FY2018-FY2022 MYP contract). The Navy's proposed FY2020 budget requests the remaining $5,099.3 million in procurement funding needed to complete the estimated procurement cost of the three DDG-51s, as well as $224.0 million in EOQ funding for DDG-51s to be procured in FY2021 and FY2022, bringing the total amount requested for the DDG-51 program for FY2020 to $5,323.3 million, excluding outfitting and post-delivery costs.", "The Navy's proposed FY2020 budget also requests $155.9 million in procurement funding to help complete the total procurement cost of the three DDG-1000 class ships."], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "FY2020 Funding Request", "paragraphs": ["One issue for Congress for FY2020 is whether to approve, reject, or modify the Navy's FY2020 funding requests for the DDG-51 and DDG-1000 programs. In considering this issue, Congress may consider, among other things, whether the Navy has accurately priced the work it is proposing to fund for FY2020."], "subsections": []}, {"section_title": "Cost, Technical, and Schedule Risk in Flight III DDG-51 Effort", "paragraphs": ["Another oversight issue for Congress concerns cost, technical, and schedule risk for the Flight III DDG-51."], "subsections": [{"section_title": "October 2018 CBO Report", "paragraphs": ["An October 2018 Congressional Budget Office (CBO) report on the cost of the Navy's shipbuilding programs stated the following about the Flight III DDG-51:", "To meet combatant commanders' goal of improving future ballistic missile defense capabilities beyond those provided by existing DDG-51s\u2014and to replace 15 Ticonderoga class cruisers when they are retired in the 2020s\u2014the Navy plans to substantially modify the design of the DDG-51 Flight IIA destroyer to create a Flight III configuration. That modification would incorporate the new Air and Missile Defense Radar (AMDR), now under development, which will be larger and more capable than the radar on current DDG-51s. For the AMDR to operate effectively in the new Flight III configuration, however, the ships must have a greater capacity to generate electrical power and cool major systems.", "With those improvements incorporated into the design of the Flight III and the associated increases in the ships' displacement, CBO expects that the average cost per ship over the entire production run would be $1.8 billion in 2018 dollars\u2014about 15 percent more than the Navy's estimate of $1.6 billion. Costs could be higher or lower than CBO's estimate, however, depending on the eventual cost and complexity of the AMDR and the associated changes to the ship's design to integrate the new radar."], "subsections": []}, {"section_title": "May 2019 GAO Report", "paragraphs": ["A May 2019 Government Accountability Office (GAO) report assessing selected DOD acquisition programs stated the following in its assessment of the Flight III DDG-51:", "Current Status", "The Navy and the shipbuilders completed Flight III detail design activities in December 2017. As compared to Flight IIA, the Flight III design included considerable changes to the ship's hull, mechanical, and electrical systems to incorporate the AMDR program's SPY-6 radar, and changes to restore ship weight and stability safety margins. To reduce technical risk, the Navy plans to field all but one\u2014the SPY-6 radar\u2014of the program's four mature critical technologies on other ship classes before integration with Flight III. In 2018, however, the Navy identified software-related deficiencies affecting SPY-6 that delayed delivery of a radar array for power and integration testing with the Aegis combat system by at least 1 year. Despite these delays, the Navy plans to complete testing, install the radar on the ship, and activate the combat system for shipboard testing by January 2022.", "The Navy expects to complete a draft test and evaluation master plan for Flight III by early 2022. The Navy and the Director, Operational Test and Evaluation continue to disagree on whether the use of a self-defense test ship equipped with Aegis and the SPY-6 radar is necessary to validate performance during operational test and evaluation\u2026.", "Program Office Comments", "We provided a draft of this assessment to the program office for review and comment. The program office provided technical comments, which we incorporated where appropriate. The program office said that it has delivered 67 DDG 51 class ships since its inception in 1985 and the class remains in serial production at both new construction shipyards.", "Regarding the AMDR specifically, the report stated the following:", "Technology Maturity and Design Stability", "The program office reported that AMDR's four critical technologies are mature\u2014although we disagree\u2014and that the system design is stable. Since our 2018 assessment, the program office has further demonstrated the radar system's performance and capabilities through live testing and simulation. However, based on industry best practices, the program cannot fully demonstrate all critical technologies until the Navy tests them in their realistic, at-sea environment with the Aegis combat system. According to the AMDR program schedule, such testing will occur in 2023 during operational testing with a DDG 51 Flight III ship. Until the Navy completes this testing, the program's design stability remains at risk for disruption. Specifically, any performance deficiencies the Navy discovers during at-sea testing could require it to revise existing design drawings to remedy issues.", "As part of developmental testing, the program office tested a full-scale, single-face radar array at the Navy's Pacific Missile Range Facility (PMRF) beginning in September 2016. The program office successfully completed several live ballistic missile defense, anti-air, and anti-surface warfare tests. However, in March 2018, the array failed a ballistic missile test because of a defective software update that caused the array to stop tracking a live target. Officials said a software update corrected the issue and they verified the array's performance through a successful retest in January 2019. Officials said the single-face array, originally scheduled to support Aegis combat system equipment testing, will undergo additional testing at PMRF through 2019. As a result, the Navy has revised the acquisition schedule and will instead divert the delivery of a new array to support land-based Aegis combat system equipment testing sometime in 2019.", "The program has completed software development to support core radar capabilities and will continue to develop radar updates to support system improvements, cybersecurity, and combat system integration through 2021. In parallel to the radar's software development, significant software development remains to integrate AMDR with the Aegis combat system. Program officials said this software development must complete before both systems can be fully integrated and tested. While the Navy plans to test the radar and initial Aegis combat system software at a land-based site, the Navy will not test the radar and final Aegis combat system until both are installed on the lead ship. Any issues identified after the systems are installed on the lead ship could require retrofits to the radar or ship.", "Production Readiness", "Nearly 18 months after entering production, the program has not demonstrated that all of its critical manufacturing processes are in statistical control. The program reported that it exercised a contract option for the fourth low-rate initial production unit in April 2018 and was authorized to procure five additional low-rate production units in February 2019. However, in August 2018, the contractor reported early cost growth and schedule variance for the first three low-rate production units because of increased material costs and other production delays. Officials said the delays are partly due to a problem with a digital receiver component, which the contractor is testing. As a result, contractor delivery of the first production radar is at risk of delay from December 2019 to April 2020.", "The AMDR program office plans to procure more than two-thirds of its 22 total radars prior to completing operational testing. The Navy deliberately planned for AMDR to begin production prior to the start of Aegis upgrade software development to allow time for key radar technologies to mature and for the design to stabilize. However, this concurrency means any deficiencies identified during combat system integration or operational testing may lead to retrofitting after production is underway or complete for many of the radars. Any required retrofitting is likely to increase program costs or delay radar deliveries.", "Other Program Issues", "DOD's Director, Operational Test and Evaluation (DOT&E) has yet to approve the AMDR Test and Evaluation Master Plan. DOT&E stated that the proposed test approach for the AMDR and DDG 51 Flight III programs does not provide realistic operational conditions without the use of an AMDR- and Aegis-equipped unmanned self-defense test ship. Because the Navy has elected not to request funds for a test ship, DOT&E and the Navy are revising the DDG 51 Flight III operational test strategy to include AMDR operational requirements and an updated simulation strategy. DOT&E cautioned, however, that DDG 51 Flight III's self-defense and survivability capabilities will not be fully known until the program completes operational testing.", "Program Office Comments and GAO Response", "We provided a draft of this assessment to the program office for review and comment. In its comments, the program office disagreed with our assessment of the program's technology maturity, stating that combat system testing is not required to demonstrate mature radar technologies since the technologies have been tested and proven at the land-based PMRF site. We disagree. The PMRF site does not provide a realistic, at-sea environment to test the fit and function of the radar and combat system on a ship."], "subsections": []}]}, {"section_title": "Potential Change in Surface Force Architecture", "paragraphs": ["Another issue for Congress concerns the potential impact on the DDG-51 program of a possible change in the surface force architecture. The Navy's current force-level goal of 355 ships, including 104 large surface combatants (i.e., cruisers and destroyers), is the result of a Force Structure Analysis (FSA) that the Navy conducted in 2016. The Navy conducts a new or updated FSA every few years, and it is currently conducting a new FSA that is scheduled to be completed by the end of 2019. Navy officials have suggested that the Navy in coming years may shift to a new surface force architecture that will include a smaller proportion of large surface combatants, a larger proportion of small surface combatants, and a third tier of numerous unmanned surface vehicles (USVs). Some observers believe the results of the new FSA may reflect this potential new surface force architecture.", " Figure 2 shows a Navy briefing slide depicting the potential new surface force architecture, with each sphere representing a manned ship or USV. Consistent with Figure 2 , the Navy's current 355-ship goal calls for a Navy with twice as many large surface combatants (104) as small surface combatants (52). Figure 2 suggests that the potential new surface force architecture could lead to the obverse\u2014a planned force mix that calls for twice as many small surface combatants than large surface combatants\u2014along with the new third tier of USVs.", "A January 15, 2019, press report states:", "The Navy plans to spend this year taking the first few steps into a markedly different future, which, if it comes to pass, will upend how the fleet has fought since the Cold War. And it all starts with something that might seem counterintuitive: It's looking to get smaller.", "\"Today, I have a requirement for 104 large surface combatants in the force structure assessment; [and] I have [a requirement for] 52 small surface combatants,\" said Surface Warfare Director Rear Adm. Ronald Boxall. \"That's a little upside down. Should I push out here and have more small platforms? I think the future fleet architecture study has intimated 'yes,' and our war gaming shows there is value in that.\"", "An April 8, 2019, press report states that Navy discussions about the future surface fleet include", "the upcoming construction and fielding of the [FFG(X)] frigate, which [Vice Admiral Bill Merz, the deputy chief of naval operations for warfare systems] said is surpassing expectations already in terms of the lethality that industry can put into a small combatant.", "\"The FSA may actually help us on, how many (destroyers) do we really need to modernize, because I think the FSA is going to give a lot of credit to the frigate\u2014if I had a crystal ball and had to predict what the FSA was going to do, it's going to probably recommend more small surface combatants, meaning the frigate \u2026 and then how much fewer large surface combatants can we mix?\" Merz said.", "An issue the Navy has to work through is balancing a need to have enough ships and be capable enough today, while also making decisions that will help the Navy get out of the top-heavy surface fleet and into a better balance as soon as is feasible.", "\"You may see the evolution over time where frigates start replacing destroyers, the Large Surface Combatant [a future cruiser/destroyer-type ship] starts replacing destroyers, and in the end, as the destroyers blend away you're going to get this healthier mix of small and large surface combatants,\" he said\u2014though the new FSA may shed more light on what that balance will look like and when it could be achieved."], "subsections": []}, {"section_title": "Change in DDG-1000 Mission Orientation", "paragraphs": ["Another potential oversight issue for Congress for FY2019 concerns the Navy's plan to shift the mission orientation of the DDG-1000s from an emphasis on NSFS to an emphasis on surface strike. Potential oversight questions for Congress include the following:", "What is the Navy's analytical basis for shifting the ships' mission orientation? What are the potential costs of implementing this shift? How much of these costs are in the Navy's FY2019 budget submission? How cost-effective will it be to operate and support DDG-1000s as ships with an emphasis on surface strike? When does the Navy plan to decide on whether to procure a replacement munition for the ships' AGSs, or instead pursue another option, such as removing the AGSs and their below-deck equipment and installing additional VLS tubes? What would be the cost of the latter option, and how many additional VLS tubes could be installed? If the ships will operate with their AGSs for the most part dormant, to what degree will that reduce the return on investment (ROI) involved in developing, procuring, operating, and sporting the DDG-1000s?"], "subsections": []}]}, {"section_title": "Legislative Activity for FY2020", "paragraphs": [], "subsections": [{"section_title": "Summary of Congressional Action on FY2020 Funding Request", "paragraphs": [" Table 1 summarizes congressional action on the Navy's FY2020 procurement funding requests for the DDG-51 and DDG-1000 programs."], "subsections": [{"section_title": "Appendix. Additional Background Information on DDG-1000 Program", "paragraphs": ["This appendix presents additional background information on the DDG-1000 program.", "Overview", "The DDG-1000 program was initiated in the early 1990s. The DDG-1000 ( Figure A-1 ) is a multi-mission destroyer with an originally intended emphasis on naval surface fire support (NSFS) and operations in littoral (i.e., near-shore) waters. (NSFS is the use of naval guns to provide fire support for friendly forces operating ashore.) ", "The DDG-1000 was originally intended to replace, in a technologically more modern form, the large-caliber naval gun fire capability that the Navy lost when it retired its Iowa-class battleships in the early 1990s, to improve the Navy's general capabilities for operating in defended littoral waters, and to introduce several new technologies that would be available for use on future Navy ships. The DDG-1000 was also intended to serve as the basis for a planned cruiser called CG(X) that was subsequently canceled.", "The DDG-1000 is to have a reduced-size crew of 175 sailors (147 to operate the ship, plus a 28-person aviation detachment), compared to roughly 300 on the Navy's Aegis destroyers and cruisers, so as to reduce its operating and support (O&S) costs. The ship incorporates a significant number of new technologies, including an integrated electric-drive propulsion system and automation technologies enabling its reduced-sized crew.", "With an estimated full load displacement of 15,612 tons, the DDG-1000 design is roughly 64% larger than the Navy's current 9,500-ton Aegis cruisers and destroyers, and larger than any Navy destroyer or cruiser since the nuclear-powered cruiser Long Beach (CGN-9), which was procured in FY1957.", "The first two DDG-1000s were procured in FY2007 and split-funded (i.e., funded with two-year incremental funding) in FY2007-FY2008; the Navy's FY2019 budget submission estimates their combined procurement cost at $9,242.3 million. The third DDG-1000 was procured in FY2009 and split-funded in FY2009-FY2010; the Navy's FY2019 budget submission estimates its procurement cost at $3,789.9 million.", "The first DDG-1000 was commissioned into service on October 15, 2016, although its delivery date was revised in the Navy's FY2018 budget submission to May 2018, and revised further in the Navy's FY2019 budget submission to December 2018, creating an unusual situation in which a ship was commissioned into service more than two years prior to its delivery date. The delivery dates for the second and third ships were revised in the Navy's FY2018 budget submission to May 2020 and December 2021, respectively, and were revised further in the Navy's FY2019 budget submission to September 2020 and September 2022, respectively.", "Program Origin", "The program known today as the DDG-1000 program was announced on November 1, 2001, when the Navy stated that it was replacing a destroyer-development effort called the DD-21 program, which the Navy had initiated in the mid-1990s, with a new Future Surface Combatant Program aimed at developing and acquiring a family of three new classes of surface combatants:", "a destroyer called DD(X) for the precision long-range strike and naval gunfire mission; a cruiser called CG(X) for the air defense and ballistic missile mission; and a smaller combatant called the Littoral Combat Ship (LCS) to counter submarines, small surface attack craft (also called \"swarm boats\"), and mines in heavily contested littoral (near-shore) areas.", "On April 7, 2006, the Navy announced that it had redesignated the DD(X) program as the DDG-1000 program. The Navy also confirmed in that announcement that the first ship in the class, DDG-1000, is to be named the Zumwalt , in honor of Admiral Elmo R. Zumwalt, the Chief of Naval operations from 1970 to 1974. The decision to name the first ship after Zumwalt was made by the Clinton Administration in July 2000, when the program was still called the DD-21 program.", "New Technologies", "The DDG-1000 incorporates a significant number of new technologies, including a wave-piercing, tumblehome hull design for reduced detectability, a superstructure made partly of large sections of composite (i.e., fiberglass-like) materials rather than steel or aluminum, an integrated electric-drive propulsion system, a total-ship computing system for moving information about the ship, automation technologies enabling its reduced-sized crew, a dual-band radar, a new kind of vertical launch system (VLS) for storing and firing missiles, and two copies of a new 155mm gun called the Advanced Gun System (AGS).", "Shipbuilders and Combat System Prime Contractor", "GD/BIW is the builder for all three DDG-1000s, with some portions of each ship being built by HII/Ingalls for delivery to GD/BIW. Raytheon is the prime contractor for the DDG-1000's combat system (its collection of sensors, computers, related software, displays, and weapon launchers).", "Under a DDG-1000 acquisition strategy approved by the Under Secretary of Defense for Acquisition, Technology, and Logistics (USD AT&L) on February 24, 2004, the first DDG-1000 was to have been built by HII/Ingalls, the second ship was to have been built by GD/BIW, and contracts for building the first six were to have been equally divided between HII/Ingalls and GD/BIW.", "In February 2005, Navy officials announced that they would seek approval from USD AT&L to instead hold a one-time, winner-take-all competition between HII/Ingalls and GD/BIW to build all DDG-1000s. On April 20, 2005, the USD AT&L issued a decision memorandum deferring this proposal, stating in part, \"at this time, I consider it premature to change the shipbuilder portion of the acquisition strategy which I approved on February 24, 2004.\"", "Several Members of Congress also expressed opposition to the Navy's proposal for a winner-take-all competition. Congress included a provision (\u00a71019) in the Emergency Supplemental Appropriations Act for 2005 ( H.R. 1268 / P.L. 109-13 of May 11, 2005) prohibiting a winner-take-all competition. The provision effectively required the participation of at least one additional shipyard in the program but did not specify the share of the program that is to go to the additional shipyard.", "On May 25, 2005, the Navy announced that, in light of Section 1019 of P.L. 109-13 , it wanted to shift to a \"dual-lead-ship\" acquisition strategy, under which two DDG-1000s would be procured in FY2007, with one to be designed and built by HII/Ingalls and the other by GD/BIW.", "Section 125 of the FY2006 defense authorization act ( H.R. 1815 / P.L. 109-163 ) again prohibited the Navy from using a winner-take-all acquisition strategy for procuring its next-generation destroyer. The provision again effectively requires the participation of at least one additional shipyard in the program but does not specify the share of the program that is to go to the additional shipyard.", "On November 23, 2005, the USD AT&L granted Milestone B approval for the DDG-1000, permitting the program to enter the System Development and Demonstration (SDD) phase. As part of this decision, the USD AT&L approved the Navy's proposed dual-lead-ship acquisition strategy and a low rate initial production quantity of eight ships (one more than the Navy subsequently planned to procure).", "On February 14, 2008, the Navy awarded contract modifications to GD/BIW and HII/Ingalls for the construction of the two lead ships. The awards were modifications to existing contracts that the Navy has with GD/BIW and HII/Ingalls for detailed design and construction of the two lead ships. Under the modified contracts, the line item for the construction of the dual lead ships is treated as a cost plus incentive fee (CPIF) item.", "Until July 2007, it was expected that HII/Ingalls would be the final-assembly yard for the first DDG-1000 and that GD/BIW would be the final-assembly yard for the second. On September 25, 2007, the Navy announced that it had decided to build the first DDG-1000 at GD/BIW, and the second at HII/Ingalls.", "On January 12, 2009, it was reported that the Navy, HII/Ingalls, and GD/BIW in the fall of 2008 began holding discussions on the idea of having GD/BIW build both the first and second DDG-1000s, in exchange for HII/Ingalls receiving a greater share of the new DDG-51s that would be procured under the Navy's July 2008 proposal to stop DDG-1000 procurement and restart DDG-51 procurement.", "On April 8, 2009, it was reported that the Navy had reached an agreement with HII/Ingalls and GD/BIW to shift the second DDG-1000 to GD/BIW, and to have GD/BIW build all three ships. HII/Iingalls will continue to make certain parts of the three ships, notably their composite deckhouses. The agreement to have all three DDG-1000s built at GD/BIW was a condition that Secretary of Defense Robert Gates set forth in an April 6, 2009, news conference on the FY2010 defense budget for his support for continuing with the construction of all three DDG-1000s (rather than proposing the cancellation of the second and third).", "Reduction in Procurement to Three Ships", "Navy plans for many years called for ending DDG-51 procurement in FY2005, to be followed by procurement of up to 32 DDG-1000s and some number of CG(X)s. In subsequent years, the planned total number of DDG-1000s was reduced to 16 to 24, then to 7, and finally to 3.", "At the end of July 2008, in a major reversal of its destroyer procurement plans, the Navy announced that it wanted to end procurement of DDG-1000s and resume procurement of DDG-51s. In explaining this reversal, which came after two DDG-1000s had been procured, the Navy stated that it had reevaluated the future operating environment and determined that its destroyer procurement now needed to emphasize three missions: open-ocean antisubmarine warfare (ASW), countering anti-ship cruise missiles (ASCMs), and countering ballistic missiles. Although the DDG-1000 could perform the first two of these missions and could be modified to perform the third, the Navy concluded that the DDG-51 design could perform these three missions adequately and would be less expensive to procure than the DDG-1000 design.", "The Navy's proposal to stop procuring DDG-1000s and resume procuring DDG-51s was presented in the Navy's proposed FY2010 budget, which was submitted to Congress in 2009. Congress, in acting on the Navy's FY2010 budget, approved the idea of ending DDG-1000 procurement and restarting DDG-51 procurement, and procured a third DDG-1000 as the final ship in the class.", "In retrospect, the Navy's 2008 reversal in its destroyer procurement plans can be viewed as an early indication of the ending of the post-Cold War era (during which the Navy focused its planning on operating in littoral waters against the land- and sea-based forces of countries such as Iran and North Korea) and the shift in the international security environment to a new situation featuring renewed great power competition (during which the Navy is now focusing its planning more on being able to operate in mid-ocean waters against capable naval forces from near-peer competitors such as China and Russia).", "Increase in Estimated Procurement Cost", "As shown in Table A-1 below, the estimated combined procurement cost for all three DDG-1000s, as reflected in the Navy's annual budget submission, has grown by $4,218.4 million, or 47.0%, since the FY2009 budget (i.e., the budget for the fiscal year in which the third DDG-1000 was procured).", "Some of the cost growth in the earlier years in the table was caused by the truncation of the DDG-1000 program from seven ships to three, which caused some class-wide procurement-rated costs that had been allocated to the fourth through seventh ships in the program to be reallocated to the three remaining ships.", "The Navy states that the cost growth shown through FY2015 in the table reflects, among other things, a series of incremental, year-by-year movements away from an earlier Navy cost estimate for the program, and toward a higher estimate developed by the Cost Assessment and Program Evaluation (CAPE) office within the Office of the Secretary of Defense (OSD). As one consequence of a Nunn-McCurdy cost breach experienced by the DDG-1000 program in 2010 (see discussion bvelow), the Navy was directed to fund the DDG-1000 program to CAPE's higher cost estimate for the period FY2011-FY2015, and to the Navy's cost estimate for FY2016 and beyond. The Navy states that it implemented this directive in a year-by-year fashion with each budget submission from FY2010 through FY2015, moving incrementally closer each year through FY2015 to CAPE's higher estimate. The Navy stated in 2014 that even with the cost growth shown in the table, the DDG-1000 program as of the FY2015 budget submission was still about 3% below the program's rebaselined starting point for calculating any new Nunn-McCurdy cost breach on the program.", "Procurement Cost Cap", "Section 123 of the FY2006 defense authorization act ( H.R. 1815 / P.L. 109-163 of January 6, 2006) limited the procurement cost of the fifth DDG-1000 to $2.3 billion, plus adjustments for inflation and other factors. Given the truncation of the DDG-1000 program to three ships, this unit procurement cost cap appears moot.", "2010 Nunn-McCurdy Breach, Program Restructuring, and Milestone Recertification", "On February 1, 2010, the Navy notified Congress that the DDG-1000 program had experienced a critical cost breach under the Nunn-McCurdy provision. The Nunn-McCurdy provision (10 U.S.C. 2433a) requires certain actions to be taken if a major defense acquisition program exceeds (i.e., breaches) certain cost-growth thresholds and is not terminated. Among other things, a program that experiences a cost breach large enough to qualify under the provision as a critical cost breach has its previous acquisition system milestone certification revoked. (In the case of the DDG-1000 program, this was Milestone B.) In addition, for the program to proceed rather than be terminated, DOD must certify certain things, including that the program is essential to national security and that there are no alternatives to the program that will provide acceptable capability to meet the joint military requirement at less cost.", "The Navy stated in its February 1, 2010, notification letter that the DDG-1000 program's critical cost breach was a mathematical consequence of the program's truncation to three ships. Since the DDG-1000 program has roughly $9.3 billion in research and development costs, truncating the program to three ships increased to roughly $3.1 billion the average amount of research and development costs that are included in the average acquisition cost (i.e., average research and development cost plus procurement cost) of each DDG-1000. The resulting increase in program acquisition unit cost (PAUC)\u2014one of two measures used under the Nunn-McCurdy provision for measuring cost growth \u2014was enough to cause a Nunn-McCurdy critical cost breach.", "In a June 1, 2010, letter (with attachment) to Congress, Ashton Carter, the DOD acquisition executive (i.e., the Under Secretary of Defense for Acquisition, Technology and Logistics), stated that he had restructured the DDG-1000 program and that he was issuing the certifications required under the Nunn-McCurdy provision for the restructured DDG-1000 program to proceed. The letter stated that the restructuring of the DDG-1000 program included the following:", "A change to the DDG-1000's design affecting its primary radar. A change in the program's Initial Operational Capability (IOC) from FY2015 to FY2016. A revision to the program's testing and evaluation requirements.", "Regarding the change to the ship's design affecting its primary radar, the DDG-1000 originally was to have been equipped with a dual-band radar (DBR) consisting of the Raytheon-built X-band SPY-3 multifunction radar (MFR) and the Lockheed-built S-band SPY-4 Volume Search Radar (VSR). (Raytheon is the prime contractor for the overall DBR.) Both parts of the DBR have been in development for the past several years. An attachment to the June 1, 2010, letter stated that, as a result of the program's restructuring, the ship is now to be equipped with \"an upgraded multifunction radar [MFR] and no volume search radar [VSR].\" The change eliminates the Lockheed-built S-band SPY-4 VSR from the ship's design. The ship might retain a space and weight reservation that would permit the VSR to be backfitted to the ship at a later point. The Navy states that", "As part of the Nunn-McCurdy certification process, the Volume Search Radar (VSR) hardware was identified as an acceptable opportunity to reduce cost in the program and thus was removed from the current baseline design....", "Modifications will be made to the SPY-3 Multi-Function Radar (MFR) with the focus of meeting ship Key Performance Parameters. The MFR modifications will involve software changes to perform a volume search functionality. Shipboard operators will be able to optimize the SPY-3 MFR for either horizon search or volume search. While optimized for volume search, the horizon search capability is limited. Without the VSR, DDG 1000 is still expected to perform local area air defense....", "The removal of the VSR will result in an estimated $300 million net total cost savings for the three-ship class. These savings will be used to offset the program cost increase as a result of the truncation of the program to three ships. The estimated cost of the MFR software modification to provide the volume search capability will be significantly less than the estimated procurement costs for the VSR.", "Regarding the figure of $300 million net total cost savings in the above passage, the Navy during 2011 determined that eliminating the SPY-4 VSR from the DDG-1000 increased by $54 million the cost to integrate the dual-band radar into the Navy's new Gerald R. Ford (CVN-78) class aircraft carriers. Subtracting this $54 million cost from the above $300 million savings figure would bring the net total cost savings to about $246 million on a Navy-wide basis.", "A July 26, 2010, press report quotes Captain James Syring, the DDG-1000 program manager, as stating the following: \"We don't need the S-band radar to meet our requirements [for the DDG-1000],\" and \"You can meet [the DDG-1000's operational] requirements with [the] X-band [radar] with software modifications.\"", "An attachment to the June 1, 2010, letter stated that the PAUC for the DDG-1000 program had increased 86%, triggering the Nunn-McCurdy critical cost breach, and that the truncation of the program to three ships was responsible for 79 of the 86 percentage points of increase. (The attachment stated that the other seven percentage points of increase are from increases in development costs that are primarily due to increased research and development work content for the program.)", "Carter also stated in his June 1, 2010, letter that he had directed that the DDG-1000 program be funded, for the period FY2011-FY2015, to the cost estimate for the program provided by the Cost Assessment and Program Evaluation (CAPE) office (which is a part of the Office of the Secretary of Defense [OSD]), and, for FY2016 and beyond, to the Navy's cost estimate for the program. The program was previously funded to the Navy's cost estimate for all years. Since CAPE's cost estimate for the program is higher than the Navy's cost estimate, funding the program to the CAPE estimate for the period FY2011-FY2015 will increase the cost of the program as it appears in the budget for those years. The letter states that DOD \"intends to address the [resulting] FY2011 [funding] shortfall [for the DDG-1000 program] through reprogramming actions.\"", "An attachment to the letter stated that the CAPE in May 2010 estimated the PAUC of the DDG-1000 program (i.e., the sum of the program's research and development costs and procurement costs, divided by the three ships in the program) as $7.4 billion per ship in then-year dollars ($22.1 billion in then-year dollars for all three ships), and the program's average procurement unit cost (APUC), which is the program's total procurement cost divided by the three ships in the program, as $4.3 billion per ship in then-year dollars ($12.8 billion in then-year dollars for all three ships). The attachment stated that these estimates are at a confidence level of about 50%, meaning that the CAPE believes there is a roughly 50% chance that the program can be completed at or under these cost estimates, and a roughly 50% chance that the program will exceed these cost estimates.", "An attachment to the letter directed the Navy to \"return for a Defense Acquisition Board (DAB) review in the fall 2010 timeframe when the program is ready to seek approval of the new Milestone B and authorization for production of the DDG-1002 [i.e., the third ship in the program].\"", "On October 8, 2010, DOD reinstated the DDG-1000 program's Milestone B certification and authorized the Navy to continue production of the first and second DDG-1000s and commence production of the third DDG-1000.", "Technical Risk and Test and Evaluation Issues", "May 2019 GAO Report", "A May 2019 GAO report assessing selected major DOD weapon acquisition programs stated the following of the DDG-1000 program:", "Technology Maturity and Design Stability", "The DDG 1000 program has fully matured most, but not all, of its nine current critical technologies and reports a stable design. According to the Navy, the fire suppression system, hull form, deckhouse, power system, and undersea warfare suite technologies are all mature. At the same time, the vertical launch system, infrared signature, multi-function radar, and total ship computing environment technologies each continue to approach maturity. The Navy expects to fully mature these systems as it completes ship construction, certification, and testing over the next 2 years.", "The program originally had 12 critical technologies, but in the last several years, the Navy removed three, including two technologies associated with the advanced gun system\u2014the projectile and the gun\u2014because of the projectile's high cost per round. The Navy planned to rely on these munitions for precision fires and offensive operations. Following an evaluation of five other munition options, the Navy determined that no viable replacement, guided or unguided, was feasible. As a result, the guns will remain inoperable on the ships for the foreseeable future. Lastly, the Navy will use a modified multi-function radar in place of a volume search radar, which the Navy removed from the class.", "As we have previously reported, the Navy and its shipbuilders had not stabilized DDG 1000's design by lead ship fabrication start in 2009\u2014an approach inconsistent with best practices. This approach contributed to numerous design changes after the fabrication start and significant cost increases and schedule delays. Nearly 10 years later, development and shipboard testing of technologies continues, each of which could lead to discovery that could disrupt the design stability the Navy currently claims.", "The Navy plans to complete software development for the class in September 2020\u2014a delay of 24 months since our 2018 assessment. As a result, the Navy has had to delay some testing. Also that month, the program plans to complete its cyber security vulnerability evaluation along with the remainder of a 2-year regimen of certifications and several different tests. The Navy expects this regimen to demonstrate the full functionality of the ship's systems.", "Production Readiness", "The DDG 1000 shipbuilder is approaching completion of the hull, mechanical, and electrical (HM&E) systems for all three ships of the class. Shipbuilder delivery of the lead ship's HM&E occurred 18 months behind schedule, in part because of problems completing electrical work associated with the ship's power system. The shipbuilder also experienced problems completing the power system for DDG 1001, the second ship in the class. Following sea trials, the Navy inspected one of the ship's main turbine generators and found that the generator was damaged by a woodscrew. The damage was extensive enough that the Navy chose to replace the engine and send it for repair. Officials report that the shipbuilder delivered the ship in April 2018 and the Navy replaced the engine in September 2018 at its expense.", "The Navy has scheduled DDG 1000's final delivery, including HM&E and combat systems, for May 2019. The Navy has scheduled DDG 1001's final delivery to follow in September 2020. However, the Navy is still working to correct serious deficiencies that its Board of Inspection and Survey has identified on both ships. Specifically, the board found over 320 serious deficiencies when the shipbuilder delivered DDG 1000's HM&E in May 2016, and 246 serious deficiences after the Navy conducted acceptance trials for DDG 1001 in January and February 2018. This increases the likelihood that the ship will not be fully capable and sustainable when provided to the fleet.", "To limit further delays to DDG 1000 and DDG 1001 construction, the Navy has authorized its shipbuilder to take parts from DDG 1002\u2014the third and final ship of the class, which is under construction. The Navy does not yet know the full extent to which these actions will delay DDG 1002's construction schedule, but stated that these parts typically can be borrowed and replaced without causing a delay. The Navy has scheduled the ship's HM&E delivery in March 2020 followed by final delivery in September 2022.", "Other Program Issues", "In a January 2018 decision memorandum, the Navy changed DDG 1000's primary mission from land attack to offensive surface strike. Navy officials are in the process of determining the operational concept for the ship within its new mission. The Navy has yet to establish testing plans to evaluate these future mission sets. According to Navy officials, the Navy's planned modifications to support the new mission will cost about $1 billion, from non-acquisition accounts.", "Program Office Comments", "We provided a draft of this assessment to the program office for review and comment. The program office provided technical comments, which we incorporated where appropriate. The program office also stated that it is making good progress delivering the Zumwalt class. The Navy said that, since our assessment, DDG 1000 completed combat systems availability, combat tests are underway, and final delivery is now planned for September 2019. The program office also said that DDG 1001 started combat systems availability in April 2019, and DDG 1002 is 84 percent constructed. The program office further noted that future addition of new systems onto Zumwalt-class ships will provide offensive fire capabilities."], "subsections": []}]}]}]}}
{"id": "R45237", "title": "Overview of FY2019 Appropriations for Commerce, Justice, Science, and Related Agencies (CJS)", "released_date": "2019-03-20T00:00:00", "summary": ["This report describes actions taken by the Trump Administration and Congress to provide FY2019 funding for Commerce, Justice, Science, and Related Agencies (CJS) accounts. It also provides an overview of enacted FY2018 funding for agencies and bureaus funded as part of annual CJS appropriations acts.", "The Administration requested $66.555 billion for CJS for FY2019. The request included $9.797 billion for the Department of Commerce, $28.835 billion for the Department of Justice (DOJ), $27.372 billion for the science agencies, and $551 million for the related agencies. The Administration's budget proposed eliminating funding for several CJS agencies and accounts. The Administration proposed moving funding for the High Intensity Drug Trafficking Areas program from the Office of National Drug Control Policy to the Drug Enforcement Administration, closing the Community Oriented Policing Services (COPS) Office and moving its responsibilities to the Office of Justice Programs (OJP), and a new account structure for the National Aeronautics and Space Administration (NASA).", "The bill reported by the House Committee on Appropriations (H.R. 5952) would have provided a total of $73.923 billion for CJS for FY2019. The bill would have provided $12.106 billion for the Department of Commerce, $31.113 billion for DOJ, $29.728 billion for the science agencies, and $976 million for the related agencies. The committee largely declined to adopt many of the Administration's proposals to eliminate funding for several CJS agencies and accounts, though the committee-reported bill would have moved funding for the COPS program to OJP and it included the Administration's proposed account structure for NASA.", "The bill reported by the Senate Committee on Appropriations (S. 3072) would have provided a total of $72.648 billion for CJS for FY2019. The bill would have provided $11.572 billion for the Department of Commerce, $30.699 billion for DOJ, $29.400 billion for the science agencies, and $977 million for the related agencies. The Senate Committee on Appropriations largely declined to adopt many of the proposals put forth by the Administration in its FY2019 budget. Unlike the Administration's request and the House committee-reported bill, S. 3072 would have funded the COPS program through its own account and the committee did not include the Administration's new account structure for NASA.", "FY2019 enacted funding for CJS is $72.908 billion. This amount includes $11.414 billion for the Department of Commerce, $30.934 billion for DOJ, $29.583 billion for the science agencies, and $977 million for the related agencies. In general, FY2019 funding for CJS is in-line with FY2018 enacted funding, with a few notable exceptions. These include increased funding for the Census Bureau to help ramp up operations for the 2020 decennial census, increased funding for DOJ's law enforcement agencies and the federal prisons system, and increased funding for several NASA accounts.", "For FY2018, Congress and the President provided a total of $72.119 billion in funding for CJS. This included $70.921 billion in regular funding provided in the Consolidated Appropriations Act, 2018 (P.L. 115-141) and $1.198 billion in emergency-designated funding provided in the Further Additional Supplemental Appropriations for Disaster Relief Requirements Act, 2018 (P.L. 115-123)."], "reports": {"section_title": "", "paragraphs": ["T his report describes actions taken by the Administration and Congress to provide FY2019 appropriations for Commerce, Justice, Science, and Related Agencies (CJS) accounts. It also provides an overview of enacted FY2018 appropriations for agencies and bureaus funded as part of annual CJS appropriations. The second part of this report provides an overview of historical funding trends for CJS.", "The dollar amounts in this report reflect only new funding made available at the start of the fiscal year. Therefore, the amounts do not include any rescissions of unobligated or deobligated balances that may be counted as offsets to newly enacted appropriations, nor do they include any scorekeeping adjustments (e.g., the budgetary effects of provisions limiting the availability of the balance in the Crime Victims Fund). In the text of the report, appropriations are rounded to the nearest million. However, percentage changes are calculated using whole, not rounded, numbers, meaning that in some instances there may be small differences between the actual percentage change and the percentage change that would be calculated by using the rounded amounts presented in the report."], "subsections": [{"section_title": "Overview of CJS", "paragraphs": ["The annual CJS appropriations act provides funding for the Departments of Commerce and Justice, select science agencies, and several related agencies. Appropriations for the Department of Commerce include funding for agencies such as the Census Bureau; the U.S. Patent and Trademark Office; the National Oceanic and Atmospheric Administration; and the National Institute of Standards and Technology. Appropriations for the Department of Justice (DOJ) provide funding for agencies such as the Federal Bureau of Investigation; the Bureau of Prisons; the U.S. Marshals Service; the Drug Enforcement Administration; and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, along with funding for a variety of grant programs for state, local, and tribal governments. The vast majority of funding for the science agencies goes to the National Aeronautics and Space Administration and the National Science Foundation. The annual appropriation for the related agencies includes funding for agencies such as the Legal Services Corporation and the Equal Employment Opportunity Commission."], "subsections": [{"section_title": "Department of Commerce", "paragraphs": ["The mission of the Department of Commerce is to \"create the conditions for economic growth and opportunity.\" The department promotes \"job creation and economic growth by ensuring fair and reciprocal trade, providing the data necessary to support commerce and constitutional democracy, and fostering innovation by setting standards and conducting foundational research and development.\" It has wide-ranging responsibilities including, among others, trade, economic development, technology, entrepreneurship and business development, monitoring the environment, forecasting weather, managing marine resources, and statistical research and analysis. The department pursues and implements policies that affect trade and economic development by working to open new markets for U.S. goods and services and promoting pro-growth business policies. It also invests in research and development to foster innovation.", "The agencies within the Department of Commerce, and their major responsibilities, include the following:", "International Trade Administration (ITA) seeks to strengthen the international competitiveness of U.S. industry, promote trade and investment, and ensure fair trade and compliance with trade laws and agreements; Bureau of Industry and Security (BIS) works to ensure an effective export control and treaty compliance system and promote continued U.S. leadership in strategic technologies by maintaining and strengthening adaptable, efficient, and effective export controls and treaty compliance systems, along with active leadership and involvement in international export control regimes; Economic Development Administration (EDA) promotes innovation and competitiveness, preparing American regions for growth and success in the worldwide economy; Minority Business Development Agency (MBDA) promotes the growth of minority owned businesses through the mobilization and advancement of public and private sector programs, policy, and research; Economics and Statistics Administration (ESA) is a federal statistical agency that promotes a better understanding of the U.S. economy by providing timely, relevant, and accurate economic accounts data in an objective and cost-effective manner; Census Bureau , a component of ESA, measures and disseminates information about the U.S. economy, society, and institutions, which fosters economic growth, advances scientific understanding, and facilitates informed decisions; National Telecommunications and Information Administration (NTIA) advises the President on communications and information policy; United States Patent and Trademark Office (USPTO) fosters innovation, competitiveness, and economic growth domestically and abroad by providing high-quality and timely examination of patent and trademark applications, guiding domestic and international intellectual property (IP) policy, and delivering IP information and education worldwide; National Institute of Standards and Technology (NIST) promotes U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology enhancing economic security; and National Oceanic and Atmospheric Administration (NOAA) provides weather forecasts and research, oceanic and atmospheric monitoring, fisheries management and research, ocean exploration, and support of marine commerce."], "subsections": []}, {"section_title": "Department of Justice", "paragraphs": ["DOJ's mission is to \"enforce the law and defend the interests of the United States according to the law; to ensure public safety against threats foreign and domestic; to provide federal leadership in preventing and controlling crime; to seek just punishment for those guilty of unlawful behavior; and to ensure fair and impartial administration of justice for all Americans.\" DOJ also provides legal advice and opinions, upon request, to the President and executive branch department heads. ", "The major functions of DOJ offices and agencies are described below:", "Office of the United States Attorneys prosecutes violations of federal criminal laws, represents the federal government in civil actions, and initiates proceedings for the collection of fines, penalties, and forfeitures owed to the United States; United States Marshals Service (USMS) provides security for the federal judiciary, protects witnesses, executes warrants and court orders, manages seized assets, detains and transports offenders who have not been sentenced, and apprehends fugitives; Federal Bureau of Investigation (FBI) investigates violations of federal criminal law; helps protect the United States against terrorism and hostile intelligence efforts; provides assistance to other federal, state, and local law enforcement agencies; and shares jurisdiction with the Drug Enforcement Administration for the investigation of federal drug violations; Drug Enforcement Administration (DEA) investigates federal drug law violations; develops and maintains drug intelligence systems; regulates the manufacture, distribution, and dispensing of legitimate controlled substances; and conducts joint intelligence-gathering activities with foreign governments; Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) enforces federal law related to the manufacture, importation, and distribution of alcohol, tobacco, firearms, and explosives; Federal Prison System ( Bureau of Prisons; BOP ) houses offenders sentenced to a term of incarceration for a federal crime and provides for the operation and maintenance of the federal prison system; Office on Violence Against Women (OVW) provides federal leadership in developing the nation's capacity to reduce violence against women and administer justice for and strengthen services to victims of domestic violence, dating violence, sexual assault, and stalking; Office of Justice Programs (OJP) manages and coordinates the activities of the Bureau of Justice Assistance; Bureau of Justice Statistics; National Institute of Justice; Office of Juvenile Justice and Delinquency Prevention; Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking; and Office of Victims of Crime; and Community Oriented Policing Services (COPS) advances the practice of community policing by the nation's state, local, territorial, and tribal law enforcement agencies through information and grant resources."], "subsections": []}, {"section_title": "Science Offices and Agencies5", "paragraphs": ["The science offices and agencies support research and development and related activities across a wide variety of federal missions, including national competitiveness, space exploration, and fundamental discovery."], "subsections": [{"section_title": "Office of Science and Technology Policy", "paragraphs": ["The primary function of the Office of Science and Technology Policy (OSTP) is to provide the President and others within the Executive Office of the President with advice on the scientific, engineering, and technological aspects of issues that require the attention of the federal government. The OSTP director also manages the National Science and Technology Council, which coordinates science and technology policy across the executive branch of the federal government, and cochairs the President's Council of Advisors on Science and Technology, a council of external advisors that provides advice to the President on matters related to science and technology policy."], "subsections": []}, {"section_title": "The National Space Council", "paragraphs": ["The National Space Council, in the Executive Office of the President, is a coordinating body for U.S. space policy. Chaired by the Vice President, it consists of the Secretaries of State, Defense, Commerce, Transportation, and Homeland Security; the Administrator of NASA; and other senior officials. The council previously existed from 1988 to 1993 and was reestablished by the Trump Administration in June 2017."], "subsections": []}, {"section_title": "National Aeronautics and Space Administration", "paragraphs": ["The National Aeronautics and Space Administration (NASA) was created to conduct civilian space and aeronautics activities. It has four mission directorates. The Human Exploration and Operations Mission Directorate is responsible for human spaceflight activities, including the International Space Station and development efforts for future crewed spacecraft. The Science Mission Directorate manages robotic science missions, such as the Hubble Space Telescope, the Mars rover Curiosity, and satellites for Earth science research. The Space Technology Mission Directorate develops new technologies for use in future space missions, such as advanced propulsion and laser communications. The Aeronautics Research Mission Directorate conducts research and development on aircraft and aviation systems. In addition, NASA's Office of STEM Engagement (formerly the Office of Education) manages education programs for schoolchildren, college and university students, and the general public."], "subsections": []}, {"section_title": "National Science Foundation", "paragraphs": ["The National Science Foundation (NSF) supports basic research and education in the nonmedical sciences and engineering. The foundation was established as an independent federal agency \"to promote the progress of science; to advance the national health, prosperity, and welfare; to secure the national defense; and for other purposes.\" The NSF is a primary source of federal support for U.S. university research. It is also responsible for significant shares of the federal science, technology, engineering, and mathematics (STEM) education program portfolio and federal STEM student aid and support."], "subsections": []}]}, {"section_title": "Related Agencies", "paragraphs": ["The annual CJS appropriations act includes funding for several related agencies: ", "U.S. Commission on Civil Rights informs the development of national civil rights policy and enhances enforcement of federal civil rights laws; Equal Employment Opportunity Commission is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person's race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability, or genetic information; International Trade Commission investigates the effects of dumped and subsidized imports on domestic industries and conducts global safeguard investigations, adjudicates cases involving imports that allegedly infringe intellectual property rights, and serves as a resource for trade data and other trade policy-related information; Legal Services Corporation is a federally funded nonprofit corporation that provides financial support for civil legal aid to low-income Americans; Marine Mammal Commission works for the conservation of marine mammals by providing science-based oversight of domestic and international policies and actions of federal agencies with a mandate to address human effects on marine mammals and their ecosystems; Office of the U.S. Trade Representative is responsible for developing and coordinating U.S. international trade, commodity, and direct investment policy, and overseeing negotiations with other countries; and State Justice Institute is a federally funded nonprofit corporation that awards grants to improve the quality of justice in state courts and foster innovative, efficient solutions to common issues faced by all courts."], "subsections": []}]}, {"section_title": "FY2018 Enacted Funding", "paragraphs": ["For FY2018, Congress and the President provided a total of $72.119 billion for CJS. This included $70.921 billion in regular funding provided pursuant to the Consolidated Appropriations Act, 2018 ( P.L. 115-141 , see Table 1 ) and $1.198 billion in emergency-designated funding provided pursuant to the Further Additional Supplemental Appropriations for Disaster Relief Requirements Act, 2018 ( P.L. 115-123 , see Table 2 ). For FY2018, the Department of Commerce received $12.137 billion ($11.137 billion in regular funding and $1.000 billion in supplemental funding), the Department of Justice received $30.384 billion ($30.299 billion in regular funding and $85 million in supplemental funding), the science agencies received $28.609 billion ($28.511 billion in regular funding and $98 million in supplemental funding), and the related agencies received $989 million ($974 million in regular funding and $15 million in supplemental funding).", "Comparisons in this report between FY2018 enacted funding and the Administration's FY2019 request, the House and Senate committee-reported FY2019 amounts, and FY2019 enacted funding are based on FY2018 regular funding (i.e., FY2018 enacted funding excluding supplemental appropriations). "], "subsections": []}, {"section_title": "The Administration's FY2019 Budget Request", "paragraphs": ["The Administration requested $66.555 billion for CJS for FY2019, which was 6.2% less than FY2018 regular funding. When comparing the Administration's FY2019 request to the FY2018 funding, it should be considered that the Administration formulated its FY2019 budget request before full-year appropriations for FY2018 were enacted. FY2018 funding levels, for the purposes of the Administration's request, were calculated based on FY2017 funding minus a reduction (0.6791%) as extended under a series of continuing resolutions.", "The Administration requested the following: ", "$9.797 billion for the Department of Commerce, which was 12.0% less than FY2018 regular funding; $28.835 billion for the Department of Justice, which was 4.8% less than FY2018 regular funding; $27.372 billion for the science agencies, which was 4.0% less than FY2018 regular funding; and $551 million for the related agencies, which was 43.4% less than FY2018 regular funding.", "The Administration's FY2019 budget for CJS proposed eliminating several agencies and programs:", "EDA, NIST's Manufacturing Extension Partnership, the Community Relations Service (its functions would have been moved to DOJ's Civil Rights Division), COPS Office (grants managed by the COPS Office would have been moved to OJP), NASA's Education program, and the Legal Services Corporation.", "The Administration requested some funding for the EDA and Legal Services Corporation for what would have been an orderly closeout of these agencies had Congress adopted the Administration's proposal. ", "The Administration's budget also proposed to move funding for the High Intensity Drug Trafficking Areas (HIDTA) program to the DEA. Currently, HIDTA funding is administered by the Office of National Drug Control Policy.", "The Administration's requested funding for many CJS accounts was below FY2018 levels; however, there were a handful of exceptions:", "the Census Bureau's Periodic Census and Programs account (+$1.007 billion, +39.6%), DOJ's Executive Office of Immigration Review (+$59 million, +11.8%), ATF (+$23 million, +1.8%), BIS (+$7 million, +6.3%), NSF's Agency Operations and Award Management account (+$5 million, +1.6%), ESA (+$2 million, +2.0%), and the State Justice Institute (+$2 million, +35.1%).", "The Administration also proposed a new account structure for NASA, with three new accounts: Exploration Research and Technology, Deep Space Exploration Systems, and low Earth orbit (LEO) and Spaceflight Operations. The proposed Exploration Research and Technology account would have combined the Space Technology account with some elements of the Exploration account and the proposed Deep Space Exploration Systems account would have been the Exploration account minus the elements moved to the Exploration Research and Technology account. LEO and Spaceflight Operations would essentially have been a renaming of the Space Operations account. "], "subsections": []}, {"section_title": "The House Committee-Reported Bill (H.R. 5952)", "paragraphs": ["The House committee-reported bill ( H.R. 5952 ) would have provided a total of $73.923 billion for CJS for FY2019, an amount that was 4.2% greater than regular FY2018 funding and 11.1% greater than the Administration's request. The House Committee on Appropriations recommended the following:", "$12.106 billion for the Department of Commerce, which was 8.7% greater than regular FY2018 funding and 23.6% greater than the Administration's request; $31.113 billion for the Department of Justice, which was 2.7% greater than regular FY2018 funding and 7.9% greater than the Administration's request; $29.728 billion for the science agencies, which was 4.3% greater than regular FY2018 funding and 8.6% greater than the Administration's request; and $976 million for the related agencies, which was 0.2% greater than regular FY2018 funding and 77.1% greater than the Administration's request.", "The committee-reported bill would have increased funding for most CJS accounts compared to regular FY2018 funding. Some of the exceptions included the following:", "ITA (-$2 million, -0.4%); NIST's Scientific and Technical Research and Services account (-$5\u00a0million, -0.6%); NIST's Industrial Technology Services account (-$10 million, -6.5%); NIST's Construction of Research Facilities account (-$199 million, -62.4%); NOAA's Operations, Research, and Facilities account (-$63 million, -1.8%); NOAA's Procurement, Acquisition, and Construction account (-$683\u00a0million, -29.8%); U.S. Marshals' Construction account (-$28 million, -53.2%); FBI's Construction account (-$305 million, -82.4%); BOP's Buildings and Facilities account (-$12 million, -7.2%); Juvenile Justice Programs (-$71 million, -25.0%); and NASA's Education account (-$10 million, -10.0%).", "In general, the committee-reported bill would have funded CJS accounts at or above the Administration's request, but there were a few exceptions:", "BIS (-$7 million, -5.9%); NOAA's Procurement, Acquisition, and Construction account (-$15\u00a0million, -0.9%); DOJ's General Administration Salaries and Expenses (-$12 million, -10.3%); Juvenile Justice Programs (-$18 million, -7.6%); NASA's Operations Research and Technology account (-$103 million, -10.2%); and the State Justice Institute (-$1 million, -15.9%).", "The House Committee on Appropriations did not adopt most of the Administration's proposals. The committee did not eliminate funding for EDA, NIST's Manufacturing Extension Partnership, the Community Relations Service, NASA's Education program, and the Legal Services Corporation. With the exception of NASA's Education program, the committee-reported bill would have funded these agencies and programs at a level equal to FY2018 regular funding. Additionally, the committee-reported bill did not provide funding for the HIDTA program under the DEA. However, the committee adopted two of the Administration's proposals. Funding for the COPS program would have been moved to OJP under H.R. 5952 . Also, the committee-reported bill included the Administration's proposed account structure for NASA."], "subsections": []}, {"section_title": "The Senate Committee-Reported Bill (S. 3072)", "paragraphs": ["The Senate committee-reported bill ( S. 3072 ) would have provided a total of $72.648 billion for CJS for FY2019, an amount that was 2.4% more than regular FY2018 funding and 9.2% more than the Administration's request. The Senate committee-reported bill would have provided the following:", "$11.572 billion for the Department of Commerce, which was 3.9% more than regular FY2018 funding and 18.1% more than the Administration's request; $30.699 billion for the Department of Justice, which was 1.3% more than regular FY2018 funding and 6.5% more than the Administration's request; $29.400 billion for the science agencies, which was 3.1% more than regular FY2018 funding and 7.4% more than the Administration's request; and $977 million for the related agencies, which was 0.4% more than regular FY2018 funding and 77.3% more than the Administration's request.", "In general, the Senate Committee on Appropriations recommended funding many CJS accounts at or above the regular FY2018 funding amount. A few notable exceptions included the following:", "NIST's Construction of Research Facilities account (-$161 million, -50.5%); NOAA's Procurement, Acquisition, and Construction account (-$484\u00a0million, -21.1%); U.S. Marshals' Construction account (-$18 million, -34.5%); DOJ's Interagency Law Enforcement account (-$21 million, -3.9%); NASA's Space Operations account (-$112 million, -2.4%); NASA's Safety, Security, and Mission Services account (-$77 million, -2.7%); and NASA's Construction and Environmental Compliance and Restoration account (-$174 million, -31.0%).", "The Senate committee-reported bill would have funded nearly every CJS account at or above the level requested by the Administration. The Senate Committee on Appropriations also declined to adopt many of the proposals the Administration put forth in its FY2019 budget. Unlike the House committee-reported bill, S. 3072 would have funded the COPS program through its own account and the committee did not include the Administration's new account structure for NASA. The committee did propose changing the name of NASA's Education account to \"Science, Technology, Engineering, and Mathematics Opportunities.\" The Senate bill would have also funded the Office on Violence Against Women via a transfer from the Crime Victims Fund."], "subsections": []}, {"section_title": "FY2019 Enacted Funding", "paragraphs": ["On February 15, 2019, President Trump signed into law the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), which includes $72.908 billion for CJS. The FY2019 enacted amount is 2.8% more than regular FY2018 funding and 9.5% more than the Administration's request. The act includes the following:", "$11.414 billion for the Department of Commerce, which is 2.5% more than regular FY2018 funding and 16.5% more than the Administration's request; $30.934 billion for the Department of Justice, which is 2.1% more than regular FY2018 funding and 7.3% more than the Administration's request; $29.583 billion for the science agencies, which is 3.8% more than regular FY2018 funding and 8.1% more than the Administration's request; and $977 million for the related agencies, which is 0.3% more than regular FY2018 funding and 77.3% more than the Administration's request.", "FY2019 enacted funding is generally in-line with regular FY2018 funding and higher than the Administration's request. Some notable increases in FY2019 enacted funding compared to regular FY2018 funding include the following:", "Census Bureau's Periodic Censuses and Programs account (+$1.007 billion, +39.6%), Executive Office of Immigration Review (+$59 million, +11.8%), U.S. Attorneys (+$75 million, +3.5%), U.S. Marshals' Salaries and Expenses account (+$47 million, +3.5%), FBI's Salaries and Expenses account (+$162 million, +1.8%), DEA's Salaries and Expenses account (+$77 million, +3.5%), BOP's Salaries and Expenses account (+$136 million, +1.9%), BOP's Buildings and Facilities account (+$102 million, 63.4%), NASA's Science account (+$684 million, +11.0%), NASA's Space Technology account (+$167 million, +22.0%), NASA's Exploration account (+$261 million, +5.4%), NSF's Research and Related Activities account (+$186 million, +2.9%), and NSF's Major Research Equipment and Facilities Construction account (+$113 million, +61.8%).", "There were also a few notable decreases in FY2019 enacted funding compared to regular FY2018 funding:", "NIST's Construction of Research Facilities account (-$213 million, -66.8%); NOAA's Procurement, Acquisition, and Construction account (-$535 million, -23.4%); U.S. Marshals' Construction account (-$38 million, -71.9%); NASA's Space Operations account (-$112 million, -2.4%); and NASA's Construction and Environmental Compliance and Restoration account (-$214 million, -38.1%).", "Congress largely declined to adopt the Administration's proposals for CJS. Congress did not adopt the Administration's proposed account structure for NASA (though Congress changed the name of NASA's Education account to the \"Science, Technology, Engineering, and Mathematics Engagement\" account), it did not move funding for the HIDTA program to the DEA, and it did not move COPS funding to OJP. Congress also provided funding for the EDA, NIST's Manufacturing Extension Partnership, DOJ's Community Relations Service, and the Legal Services Corporation, all of which the Administration proposed eliminating.", " Table 1 outlines the FY2018 funding, the Administration's FY2019 request, the House and the Senate committee-reported amounts, and FY2019 funding for the Department of Commerce, the Department of Justice, the science agencies, and the related agencies. Table 2 provides information on FY2018 supplemental funding for CJS."], "subsections": []}, {"section_title": "Historical Funding for CJS", "paragraphs": [" Figure 1 shows the total CJS funding for FY2009-FY2018, in both nominal and inflation-adjusted dollars (more-detailed historical appropriations data can be found in Table 3 ). The data show that nominal funding for CJS reached a new 10-year high in FY2018, if emergency supplemental funding from the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5 ) is not counted. Otherwise, peak funding for CJS over the past 10 fiscal years was in FY2009 when ARRA provided a substantial increase in funding. The $15.992 billion in funding for CJS under ARRA added approximately 25% to the amount Congress and the President provided for CJS through the regular appropriation process that year. While regular nominal funding over the past 10 fiscal years was at its highest in FY2018, in inflation-adjusted terms, funding for FY2018 was lower than it was in FY2010.", "Increased funding for CJS coincides with the increase to the discretionary budget caps under the Budget Control Act of 2011 (BCA, P.L. 112-25 ). The BCA put into effect statutory limits on discretionary spending for FY2012-FY2021. Under the act, discretionary spending limits were scheduled to be adjusted downward each fiscal year until FY2021. However, legislation was enacted that increased discretionary spending caps for FY2014 to FY2018. A sequestration of discretionary funding, ordered pursuant to the BCA, cut nearly $4 billion out of the total amount Congress and the President provided for CJS for FY2013. Since then, funding for CJS has increased as more discretionary funding has been allowed under the BCA. ", " Figure 2 shows total CJS funding for FY2009-FY2018 by major component (i.e., the Departments of Commerce and Justice, NASA, and the NSF). Increases in CJS funding in FY2009 (not including ARRA funding) and FY2010 largely resulted from more funding for the Department of Commerce in support of the 2010 decennial census, though there were small increases during that same time in funding for DOJ, NASA, and NSF. ", "Although decreased appropriations for the Department of Commerce mostly explain the overall decrease in CJS appropriations from FY2010 to FY2013 (a 47.4% reduction), cuts in funding for DOJ (-8.7%) and NASA (-9.8%) also contributed. Funding for NSF held relatively steady from FY2010 to FY2013.", "Overall CJS funding has increased since FY2014, and this is partially explained by more funding for the Department of Commerce to help the Census Bureau prepare for the 2020 decennial census. However, over this time period there have also been steady increases in funding for DOJ (+9.5%), NASA (+18.0%), and NSF (+8.5%), as higher discretionary spending caps have been used to provide additional funding to these agencies. Also, the increase in funding for the Department of Commerce is not solely due to more funding for the Census Bureau. Funding has increased for other agencies within the department, such as NOAA (+18.7%) and NIST (+$41.0%)."], "subsections": []}]}}
{"id": "R45706", "title": "Advanced Nuclear Reactors: Technology Overview and Current Issues", "released_date": "2019-04-18T00:00:00", "summary": ["All nuclear power in the United States is generated by light water reactors (LWRs), which were commercialized in the 1950s and early 1960s and are now used throughout most of the world. LWRs are cooled by ordinary (\"light\") water, which also slows (\"moderates\") the neutrons that maintain the nuclear fission chain reaction. High construction costs of large conventional LWRs, concerns about safety raised by the 2011 Fukushima nuclear disaster in Japan, and other issues have led to increased interest in unconventional, or \"advanced,\" nuclear technologies that could be less expensive and safer than existing LWRs.", "An \"advanced nuclear reactor\" is defined in legislation enacted in 2018 as \"a nuclear fission reactor with significant improvements over the most recent generation of nuclear fission reactors\" or a reactor using nuclear fusion (P.L. 115-248). Such reactors include LWR designs that are far smaller than existing reactors, as well as concepts that would use different moderators, coolants, and types of fuel. Many of these advanced designs are considered to be small modular reactors (SMRs), which the Department of Energy (DOE) defines as reactors with electric generating capacity of 300 megawatts and below, in contrast to an average of about 1,000 megawatts for existing commercial reactors.", "Advanced reactors are often referred to as \"Generation IV\" nuclear technologies, with existing commercial reactors constituting \"Generation III\" or, for the most recently constructed reactors, \"Generation III+.\" Major categories of advanced reactors include advanced water-cooled reactors, which would make safety, efficiency, and other improvements over existing commercial reactors; gas-cooled reactors, which could use graphite as a neutron moderator or have no moderator; liquid-metal-cooled reactors, which would be cooled by liquid sodium or other metals and have no moderator; molten salt reactors, which would use liquid fuel; and fusion reactors, which would release energy through the combination of light atomic nuclei rather than the splitting (fission) of heavy nuclei such as uranium. Most of these concepts have been studied since the dawn of the nuclear age, but relatively few, such as sodium-cooled reactors, have advanced to commercial scale demonstration, and such demonstrations in the United States took place decades ago.", "The 115th Congress enacted two bills to promote the development of advanced nuclear reactors. The first, the Nuclear Energy Innovation Capabilities Act of 2017 (NEICA), was signed into law in September 2018 (P.L. 115-248). It requires DOE to develop a versatile fast neutron test reactor that could help develop fuels and materials for advanced reactors and authorizes DOE national laboratories and other sites to host reactor testing and demonstration projects \"to be proposed and funded, in whole or in part, by the private sector.\" The second, the Nuclear Energy Innovation and Modernization Act (NEIMA, P.L. 115-439), signed in January 2019, would require the Nuclear Regulatory Commission to develop an optional regulatory framework suitable for advanced nuclear technologies. The 115th Congress also appropriated $65 million for R&D to support development of the versatile test reactor in the Energy and Water Development Appropriations Act, FY2019, along with funding for ongoing advanced nuclear research and development programs (Division A of P.L. 115-244).", "Continued debate over advanced reactor issues is anticipated in the 116th Congress. A fundamental question may be the role of the federal government in advanced nuclear power development. DOE's budget request for FY2020 focuses the federal role on \"early stage research\" rather than the more expensive stages of demonstration and commercialization. Controversy is also likely to continue over the need for advanced nuclear power. Supporters contend that such technology will be crucial in reducing emissions of greenhouse gases and bringing carbon-free power to the majority of the world that currently has little access to electricity. However, some observers and interest groups have cast doubt on the potential safety, affordability, and sustainability of advanced reactors. Because many of these technologies are in the conceptual or design phases, the potential advantages of these systems have not yet been established on a commercial scale. Concern has also been raised about the weapons-proliferation risks posed by the potential use of plutonium-based fuel by some advanced reactor technologies.", "Other current issues related to advanced reactors include criteria for hosting private-sector demonstration reactors at DOE sites, the licensing framework for non-LWR reactors, longer time periods for federal agreements to purchase power from advanced reactors, and the supply of the high-assay low enriched uranium fuel that would be needed for some advanced reactor designs. There also may be congressional interest about potential federal assistance for demonstration reactors, which are expected to cost billions of dollars apiece. Major options for such assistance include federal cost sharing, loan guarantees, power purchase agreements, purchase of reactor capacity for research uses, and tax credits."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The nuclear power industry is facing severe economic challenges in the United States. High capital costs, low electricity demand growth, and competition from cheaper sources of electricity such as natural gas and renewables have dampened the demand for new nuclear power plants and accelerated the retirement of existing reactors. As of April 2019, seven nuclear reactors had closed in the United States since 2012, and another 12 had announced that they would retire by 2025. There are currently 98 operating U.S. reactors. As aging reactors reach the end of their operating licenses in 2030 and beyond, the number of retirements is projected to increase. In addition, cost and schedule overruns have hindered recent efforts to build new nuclear units in the United States. The only power reactors currently under construction in the United States\u2014two new units at the Vogtle nuclear plant in Georgia\u2014are five years behind schedule and nearly double their original estimated cost.", "All nuclear power in the United States is generated by light water reactors (LWRs), which were commercialized in the 1950s and early 1960s and are now used throughout most of the world. LWRs are cooled by ordinary (\"light\") water, which also slows (\"moderates\") the neutrons that maintain the nuclear fission chain reaction. Conventional LWRs are large\u2014with 1,000 megawatts electric generating capacity (MWe) or more\u2014in order to spread their high construction costs among the maximum possible number of kilowatt-hours of electricity over their operating lifetime.", "At the same time conventional reactors are facing an uncertain future, some in Congress contend that more nuclear power plants, not fewer, are needed to help reduce U.S. greenhouse gas emissions and bring low-carbon power to the majority of the world that currently has little access to electricity. Proponents of this view argue that the key to increasing the number of nuclear power plants is investment in \"advanced\" nuclear technologies, which they say could overcome the economic problems, safety concerns, and other issues that have stalled the growth of conventional LWRs.", "Congress enacted legislation in September 2018 that defines \"advanced nuclear reactor\" as \"a nuclear fission reactor with significant improvements over the most recent generation of nuclear fission reactors\" or a reactor using nuclear fusion ( P.L. 115-248 ). Titled the Nuclear Energy Innovation Capabilities Act of 2017 (NEICA), the law requires the Department of Energy (DOE) to take several actions to support advanced reactor development, including studying the need for a versatile fast neutron test reactor that could help develop fuels and materials for advanced reactors. Congress included $65 million for R&D to support development of the versatile test reactor in the Energy and Water Development Appropriations Act for FY2019 (Division A of P.L. 115-244 ), and the Trump Administration has requested $100 million more for FY2020.", "A similar definition of \"advanced nuclear reactor\" is included in the Nuclear Energy Innovation and Modernization Act (NEIMA, P.L. 115-439 ), which was signed January 14, 2019. NEIMA would require the Nuclear Regulatory Commission (NRC) to develop a regulatory framework that could be used for advanced nuclear technologies.", "Advocates of nuclear power cite a variety of reasons in addition to greenhouse gas reduction for preserving and expanding the U.S. nuclear industry. They contend that a robust domestic nuclear energy industry would contribute to such goals as energy security and diversification, electricity grid resilience and reliability, promotion of a domestic nuclear component manufacturing base and associated exports, clean air, and preservation and enhancement of geopolitical influence. The U.S. Navy uses nuclear energy to power submarines and aircraft carriers. Some observers have suggested that the Navy and other national security organizations benefit from maintaining a strong domestic nuclear energy industry, which provides a post-military career path for many naval reactor personnel, as well as expanding the base of qualified engineers and technicians, and strengthening the infrastructure for training and knowledge transfer. ", "NEICA lists a number of potential advantages of advanced nuclear reactors over conventional LWRs, including \"inherent safety features, lower waste yields, greater fuel utilization, superior reliability, resistance to proliferation, increased thermal efficiency, and the ability to integrate into electric and non-electric applications.\" Advanced reactors encompass a wide range of technologies, including next-generation water-cooled reactors (e.g., small modular light water reactors, supercritical water-cooled reactors), non-water-cooled reactors (e.g., lead or sodium fast reactors, molten salt reactors, and high temperature gas reactors), and fusion reactors. Some advanced reactor concepts are relatively new, while others have been under consideration for decades.", "Not all observers are optimistic about the potential safety, affordability, proliferation resistance and sustainability of advanced reactors. Because many of these technologies are in the conceptual or design phases, the potential advantages of these systems have not yet been established on a commercial scale. Testing and demonstration would be required to determine the validity of advocates' claims. Many environmental advocates contend that nuclear power would not be necessary to decarbonize world energy supplies, and that public policy should instead focus on renewable energy and efficiency.", "The U.S. advanced nuclear industry has expanded in recent years to encompass an array of developers, suppliers, and supporting institutions. By one count, there were 35 U.S. companies developing advanced nuclear reactor technologies as of November 2018. Some have projected that the first U.S. advanced reactor could be providing electricity to the grid by the mid-2020s. For example, the advanced reactor company NuScale predicts that its first nuclear plant will \"achieve commercial operation in 2026.\"", "This report discusses the history of advanced reactor technologies, briefly describes major categories of advanced reactors, provides an overview of federal programs on advanced nuclear technology, and discusses current issues and legislation."], "subsections": []}, {"section_title": "Advanced Reactor Technologies", "paragraphs": ["Advanced or unconventional reactor designs seek to use combinations of new and existing technologies and materials to improve upon earlier generations of nuclear reactors in one or more of the following areas: cost, safety, security, waste management, and versatility. To achieve these improvements, advanced designs may incorporate one or more of the following characteristics: inherent or passive safety features, simplified or modular designs, enhanced load-following capabilities, high chemical and physical stability, fast neutron spectrums, and \"closed\" fuel cycles (see text box on Fast Reactors). Advanced reactor technologies are often referred to as \"Generation IV\" nuclear reactors, with existing commercial reactors constituting \"Generation III\" or, for the most recently constructed reactors, \"Generation III+.\"", "Advanced reactor designs may be grouped into three primary categories: ", "Advanced water-cooled reactors , which provide evolutionary improvements to proven water-based fission technologies through innovations such as simplified design, smaller size, or enhanced efficiency; Non-water-cooled reactors , which are fission reactors that use materials such as liquid metals (e.g., sodium and lead), gases (e.g., helium and carbon dioxide), or molten salts as coolants instead of water; and Fusion reactors , which seek to generate energy by joining small atomic nuclei, as opposed to fission reactors, which generate energy by splitting large atomic nuclei.", "A fourth, cross-cutting category of advanced reactors is the s mall m odular r eactor or SMR . DOE defines SMRs as reactors with electric generating capacities of no more than 300 MW, which \"employ modular construction techniques, ship major components from factory fabrication locations to the plant site by rail or truck, and include designs that simplify plant site activities required for plant assembly.\" Both advanced water-cooled reactors and non-water-cooled reactors may be configured as SMRs. Microreactors are relatively small-capacity SMRs, defined by DOE as producing 1-20 megawatts of thermal energy (MWt), which could be used directly as heat for industrial processes or to generate electricity. Microreactors could be transported by truck and installed at a remote location or military base within a week, according to DOE.", "Advanced reactor concepts may be characterized along a continuum of technological maturity. Light water-cooled SMRs, high-temperature gas-cooled reactors, and sodium-cooled fast reactors are considered to be among the most mature of the unconventional reactor technologies. Molten salt reactors, gas-cooled fast reactors, and fusion reactors are generally considered to be further from commercialization. ", "Expert estimates of timeframes for commercialization of these technologies range widely, from the mid-2020s for the first small modular LWRs to midcentury or later for some advanced reactor concepts, such as molten salt reactors and gas-cooled fast reactors. Companies developing similar reactor technologies may be at different stages of design and manufacturing readiness. While some experts predict that molten salt reactors will not be available before 2050, Chinese research institutions and a Canadian/U.S. company, Terrestrial Energy, have announced plans to bring a molten salt reactor online in the next decade."], "subsections": [{"section_title": "Advanced Water-Cooled Reactors", "paragraphs": [], "subsections": [{"section_title": "Small Modular Light Water Reactors", "paragraphs": ["Small modular reactors are defined by DOE as reactors with an electric generating capacity of up to 300 MW, as opposed to the average capacity of existing U.S. commercial reactors of about 1,000 MW. Light water reactor SMR designs are based on existing commercial LWR technology but are generally small enough to allow all major reactor components to be placed in a single pressure vessel. The reactor vessel and its components are designed to be assembled in a factory and transported to the plant site for installation, potentially reducing construction time and costs from those of large LWRs. If large numbers of identical SMRs were ordered, mass production could further reduce manufacturing costs and construction schedules, according to proponents of the technology.", "Shortening the timeframe before a new reactor begins producing revenue could reduce interest payments and shorten payback periods. In addition, each SMR would require a fraction of the capital investment of a large conventional nuclear unit, further reducing the financial risk to plant owners. Some observers have suggested that the smaller size of SMRs would reduce the economies of scale available to larger reactors, potentially negating any SMR cost advantages.", "A 60 MWe reactor module by U.S. company NuScale Power is currently considered the most mature light water SMR design under development. The design would allow between 6 and 12 SMR modules\u2014depending on the energy needs of the site\u2014to be co-located in a central pool of water, which serves as a heat sink and passive cooling system. NRC plans to complete its safety evaluation report on the design in September 2020 and subsequently issue a final design certification, although no date is currently scheduled. NuScale is planning to begin operating its first 12-module plant in the mid-2020s. It is to be built at Idaho National Laboratory (an 890-square-mile DOE site) with a combination of federal government and non-federal support. As with other SMR concepts, the major components of the NuScale plant are designed to be factory-fabricated and shipped to the plant site for installation.", "Companies in several countries are currently developing light water SMRs. In addition to NuScale, examples of U.S.-based companies developing this technology include Holtec, Westinghouse, and GE Hitachi."], "subsections": []}, {"section_title": "Supercritical Water-Cooled Reactor", "paragraphs": ["The supercritical water-cooled reactor (SCWR) is a high-temperature variant of existing LWR technologies. SCWRs would use supercritical water\u2014water which has been brought to a temperature and pressure at which the liquid and vapor states are indistinguishable\u2014to improve plant efficiency (which may approach 44% in SCWRs, compared with 34-36% for current reactors). As in a conventional boiling water reactor (BWR), liquid water would pass upward through the reactor core and turn directly to steam, which would drive a turbine-generator ( Figure 1 ). The superheated conditions would eliminate the need in current BWRs for reactor coolant pumps and steam separators and dryers. Supercritical water has already been used to boost plant efficiency in some advanced coal- and gas-fired power plants. SCWRs could be designed to operate in either the fast or thermal neutron spectrums, and to use either light or heavy water as the coolant and/or moderator. Organizations in Canada, China, the European Union, Japan, and Russia are developing SCWRs. "], "subsections": []}]}, {"section_title": "Non-Water-Cooled Reactors", "paragraphs": [], "subsections": [{"section_title": "High Temperature Gas Reactors", "paragraphs": ["High temperature gas reactors (HTGRs), including very high temperature gas reactors (VHTRs), are helium-cooled, graphite-moderated thermal reactors. As their names imply, they would operate at higher coolant outlet temperatures than most existing reactors\u2014700-1,000\u00b0C compared to 330\u00b0C for existing LWRs. This higher temperature threshold allows for the provision of heat for industrial processes, such as the cogeneration of electricity and hydrogen, and high-temperature processes in the iron, oil, and chemical industries. While previous R&D programs focused on achieving very high outlet temperatures, more recently the focus has shifted to reactor designs with more modest outlet temperatures (700-850\u00b0C), based on the assessment that lower temperature reactors may be more commercially viable in the short term.", "There are two primary design variants: In one, the core is composed of graphite blocks with removable sections that have been embedded with fuel particles; in the other, many billiard ball-sized graphite spheres, or \"pebbles,\" with embedded fuel particles are loaded into the core to form a \"pebble bed.\" The spheres are steadily removed from the bottom of the reactor, tested for their level of burnup, and returned to the top of the reactor if they are still viable as fuel and replaced if not. Many HTGRs have been designed as SMRs. ", "A unique feature of these reactors is their fuel, which is composed of poppy seed-sized fuel particles that have been encased in silicon carbide and other highly heat-resistant coatings ( Figure 2 ). Coupled with the high heat capacity of the graphite moderator, the reactor and its fuel are designed to withstand the maximum core heat attainable during an accident. Therefore, according to HTGR proponents, even the loss of active cooling systems would not result in a core meltdown and radioactive releases to the environment. ", "HTGRs are among the most technologically mature of the advanced reactor concepts. Since the 1960s a number of experimental and commercial HTGRs have been built in multiple countries, including the United States, United Kingdom, Japan, Germany, and China. A small, two-unit pebble bed HTGR plant is currently under construction in China.", "Development of HTGRs was promoted in the United States by the Next Generation Nuclear Plant (NGNP) program, established by the Energy Policy Act of 2005 ( P.L. 109-58 ). In 2016, DOE awarded X-energy $53 million over five years to develop a modular pebble bed HTGR design. X-energy received a second DOE contract for $10 million in 2018. X-energy is also working with DOE and others to develop the fuel technology that would be used in an HTGR pebble bed reactor. Other U.S. companies developing HTGRs include HolosGen and Hybrid Power Technologies."], "subsections": []}, {"section_title": "Gas-Cooled Fast Reactor", "paragraphs": ["Gas-cooled fast reactors (GFRs) would be high-temperature, closed fuel cycle fast reactors using helium as a primary coolant ( Figure 3 ). The primary difference between the HTGR (see above) and the GFR is the neutron spectrum: HTGRs operate in the thermal spectrum, while GFRs operate in the fast spectrum. Therefore, the GFRs would not require the massive graphite moderator of HTGRs to slow the neutrons. The GFR would use a closed U-Pu fuel cycle in which the plutonium and uranium would be recycled from the spent fuel to provide a greatly expanded fuel source if configured as a breeder. GFRs would have operating temperatures similar to those of HTGRs\u2014850\u00b0C compared to 330\u00b0C for existing LWRs\u2014making them suitable for providing process heat for industrial purposes, in addition to producing electric power. One disadvantage of this design is the lower heat removal capability of the helium gas coolant compared to liquid metal coolants such as sodium and lead in the event of an accident.", "In 2015, a consortium of European countries, including the Czech Republic, Hungary, Poland, and Slovakia, launched a project to jointly develop a demonstration GFR based on a French design. The group set a goal of completing the conceptual design for the ALLEGRO reactor by 2025, with construction to begin thereafter. If successful, ALLEGRO would be the first demonstration of a GFR to date. General Atomics is an example of a U.S. company developing a GFR design, the Energy Multiplier Module (EM 2 )."], "subsections": []}, {"section_title": "Sodium-Cooled Fast Reactor", "paragraphs": ["Along with HTGRs, sodium-cooled fast reactors (SFRs) are among the most technologically mature of the unconventional nuclear concepts. SFRs use fast reactor technology with liquid sodium as the primary coolant. The use of a liquid metal as the coolant allows the primary coolant circuit to operate under lower, near-atmospheric pressure conditions. In addition, even in an emergency without backup electricity, the high heat-transfer properties of liquid sodium (100 times greater than water) would allow for passive cooling through natural circulation. The SFR coolant outlet would reach a temperature of 500-550\u00b0C. This lower temperature (compared to 850\u00b0C for the GFR) would allow for the use of materials that have been developed and proven in prior fast reactors. SFRs come in two main design variants: loop-type and pool-type designs (see Figure 4 ). In the pool-type SFR, the reactor core and primary heat exchanger are immersed in a single pool of liquid metal, while the loop-type houses the primary heat exchanger in a separate vessel. SFR technologies are conducive to modularization. ", "A disadvantage that has been raised about using sodium as a coolant is that it reacts violently with both air and water. As a result, the primary sodium coolant system (which contains highly radioactive sodium) is often isolated from the steam generation system by an intermediary coolant to prevent a release of radioactivity in the case of an accident. This adds costs and complexity to the system, complicates maintenance and refueling, and introduces an additional safety concern. Fires resulting from sodium leaks have caused shutdowns in several SFRs that have been built to date. ", "Most SFR designs would use a closed fuel cycle in which plutonium and uranium would be re-used from the spent fuel to provide an indefinite fuel source when configured as a breeder; the process would be similar to that used for the GFR (above). Other designs would rely on future advances in fuel technology to extend the fuel cycle to the point where refueling would only need to occur once in a number of decades. SFRs can achieve high burnup of actinides in spent fuel, potentially reducing the long-term radioactivity of high-level nuclear waste. ", "The first SFR was built in the United States in 1951. Since then, approximately 20 SFRs have been built around the world, most of which have been experimental. The United States maintained SFRs as a high priority focus of its nuclear R&D program (primarily due to the technology's plutonium breeding capabilities) up until the cancellation of the Clinch River Breeder Reactor demonstration plant in 1983 amid public opposition, rising construction costs, and increased concern over weapons proliferation. There are five SFRs currently in operation worldwide: one in China, three in Russia, and one in India. Several others are expected to start up by 2020.", "Examples of U.S. companies developing SFRs include Advanced Reactor Concepts, Columbia Basin Consulting Group, General Electric-Hitachi, Oklo, and TerraPower. General Electric-Hitachi's PRISM design is the only SFR to have passed the NRC preapplication review process, and has been selected to support the Department of Energy's Versatile Test Reactor program."], "subsections": []}, {"section_title": "Lead-Cooled Fast Reactor", "paragraphs": ["Lead-cooled fast reactors (LFRs) are designed to use a closed fuel cycle with either molten lead or lead-bismuth eutectic (LBE) alloy as a primary reactor coolant (see Figure 5 ). The use of lead as a coolant is seen to confer several advantages. As with the SFR, the use of a liquid metal coolant allows for low-pressure operation and passive cooling in an accident. In contrast to liquid sodium, however, molten lead is relatively inert, adding additional safety and economic advantages. Lead also has a high rate of retention of radioactive fission products, which offers benefits in an accident that could release radioactive materials. In such an accident, the chemical properties of the lead could prevent many of the harmful radionuclides from escaping into the atmosphere. LFRs can also be designed for high burnup of waste actinides, allowing for reduced long-term radioactive wastes. ", "Lead does present some challenges that may require further research and innovation to overcome. At high temperatures, lead tends to corrode structural steel. Achieving commercialization for designs in the higher temperature ranges would thus need further technological advances in corrosion-resistance for structural steel components coming into contact with the liquid lead coolant. Lead is also highly opaque, presenting visibility and monitoring challenges within the core, and very heavy, due to its high density. The high melting point of lead also presents challenges in terms of keeping the lead in liquid form so that it can continue to circulate under lower-temperature scenarios.", "Russia is the world leader in LFR R&D, with experience building and operating seven LFRs for use in submarines. Russia has announced near-term development of two pure LFR facilities and a third facility that would be capable of using lead coolant for test purposes, in addition to other coolants. Members of the European Union have also announced a collaboration to develop an LFR through the Advanced Lead Fast Reactor European Demonstrator (Alfred). Other countries exploring LFR technologies include China, Japan, Korea, and Sweden. U.S. companies pursuing LFRs include Hydromine and Westinghouse."], "subsections": []}, {"section_title": "Molten Salt Reactors and Fluoride Salt-Cooled High Temperature Reactors", "paragraphs": ["Any reactor that uses molten salts as a coolant or fuel may be considered a molten salt reactor (MSR). Salt-cooled MSRs (also known as fluoride-cooled high temperature reactors or FHRs) employ molten salts to cool the core, which is composed of solid fuel blocks configured much like an HTGR. Salt-fueled MSRs, by contrast, are unique in that the fuel is not solid, but rather is dissolved in the molten salt coolant.", "MSRs vary in their design; there are fast and thermal variants, and different moderator materials have been proposed for the thermal variants. Molten salt fast reactors (MSFRs) exhibit high potential for waste actinide burnup and fuel resource conservation. Different molten salts may also be used, depending on the other design features. Outlet temperature specifications range from 700-1000\u00b0C, although there are challenges to operating at these temperatures that would need technological advances to resolve. ", "Unique to MSR salt-fueled designs is a safety feature called a \"freeze plug\" below the reactor core, consisting of a salt plug that is cooled to a solid state (see Figure 6 ). In the event of an incident that causes heat to rise in the core, the plug will melt, allowing the molten salt fuel to drain by gravity into a basin that is designed to prevent the fuel from undergoing further fission reactions and overheating. It is unknown whether spent MSR fuel could be safely stored in the long term without undergoing additional treatment after removal from the reactor. ", "MSR technology has been under development for decades. Two thermal-spectrum experimental reactors were built in the United States at Oak Ridge National Laboratory in the 1950s and 1960s. The first molten salt fuel irradiation tests since the completion of those early experiments were conducted in 2017 in the Netherlands, where research on waste treatment is also being pursued. China is currently developing two prototype MSR microreactors with expected start dates in the 2020s. Terrestrial Energy, a Canadian company with a U.S. subsidiary, is in the second stage of design review with the Canadian Nuclear Safety Commission for its integral molten salt reactor (IMSR). The IMSR is the first advanced reactor design to complete phase one of the Canadian pre-licensing process. Terrestrial Energy has announced a goal of commercialization by the late 2020s. Examples of other U.S. companies developing MSRs include Alpha Tech Research Corp., Elysium Industries, Flibe Energy, Kairos Power, TerraPower, Terrestrial Energy USA, ThorCon Power, Thoreact, and Yellowstone Energy."], "subsections": []}]}, {"section_title": "Fusion Reactors", "paragraphs": ["Fusion reactors would fuse light atomic nuclei\u2014as opposed to the fissioning of heavy nuclei\u2014to produce power. Fusion R&D has received significant R&D investment, including over $20 billion in international cooperative funding anticipated to build the International Thermonuclear Experimental Reactor (ITER), a fusion research and demonstration reactor under construction in France. The United States is a major participant in the project.", "Fusion power would require light atoms, generally isotopes of hydrogen, to be heated to 100 million degrees to form a plasma, a state of matter in which electrons are stripped away from the atomic nucleus. Holding the plasma together while it is heated sufficiently to create a fusion reaction is a major technical challenge. ITER would do this with a powerful magnetic field, while other approaches would compress a pellet of hydrogen with lasers or other intense energy sources. Fusion reactions are routinely produced at the laboratory scale, but none of these reactions have yet achieved \"burning plasma,\" in which energy produced by fusion at least equals the energy needed to heat the plasma. A fusion power reactor would need to achieve \"ignition,\" in which the fusion energy itself would keep the plasma heated. ITER is scheduled to produce its first plasma by the end of 2025, with full operations, including burning plasma experiments, scheduled to begin in 2035.", "Several U.S. companies are pursuing various approaches toward achieving burning plasma with the aim of commercializing fusion power. According to the Fusion Industry Association, \"fusion produces no harmful emissions or waste fuel. A fusion power plant is physically incapable of having a meltdown. There is no fissile radioactive waste left over.\" However, some reactor materials would be made radioactive by neutron exposure during a fusion reaction, and tritium, a primary anticipated fuel source, is radioactive, although far less so than fission products.", "Examples of U.S. companies developing fusion technologies include AGNI Energy, Brillouin Energy, Commonwealth Fusion Systems, General Atomics, Helion Energy, HyperV Technologies, Lawrenceville Plasma Physics, Lockheed Martin, Magneto-Inertial Fusion Technologies, NumerEx, and TAE Technologies."], "subsections": []}]}, {"section_title": "Major Criteria for Evaluating Unconventional Technologies", "paragraphs": [], "subsections": [{"section_title": "Cost", "paragraphs": ["Investment in electricity generating technologies is largely determined on the basis of cost. Nuclear energy has historically had high capital costs, but relatively low production costs. In recent years, however, conventional nuclear plants have struggled to compete with falling electricity prices driven largely by natural gas and renewables, particularly in parts of the country that are served by competitive electricity markets. The success of advanced reactors in entering these markets may depend on their ability to reduce capital costs relative to conventional reactors and to offer electricity prices that are competitive with non-nuclear sources of baseload power. "], "subsections": [{"section_title": "Capital Costs", "paragraphs": ["High capital costs present a significant barrier to deployment of new nuclear plants in the United States. Conventional nuclear reactors are more expensive to build than most other electric power plants. Nuclear plants must submit to much more rigorous safety regulation and quality standards than other producers of electricity because of the risk posed by a release of radioactive materials. As a result, they require highly specialized construction materials (e.g., nuclear-grade steel), engineering knowledge, and construction expertise, all of which add to a plant's costs. Large conventional reactors also require a great deal of on-site fabrication of structures and components that are too large to be built in a factory, further adding to costs. ", "Capital cost estimates for advanced reactors vary by technology and design. Some designs, such as SMRs, may allow for greater factory fabrication than conventional designs. Costs will remain highly uncertain until demonstration plants are constructed. According to an MIT study, conventional nuclear capital costs are dominated by labor and engineering costs (approximately 60%). By contrast, the actual reactor and associated turbine components comprise less than 20% of the capital cost of the median historical U.S. light water reactor. Accordingly, achieving cost reductions relative to these conventional plants would require that advanced reactor developers find ways to improve upon existing construction methods for nuclear reactors. ", "One advanced reactor design innovation that holds potential for reducing construction costs is modularization of structures and components. Modularity is intended to increase factory production of nuclear components. Manufactured components could then be delivered to the construction site for installation, cutting down on onsite labor, reducing the specialized knowledge needed to custom-build each component on-site, and potentially improving quality. Modularized construction has been shown to improve the pace of construction and reduce costs in other industries, as well as in some recent nuclear construction projects in Asia. NuScale, a U.S.-based SMR vendor, has estimated \"overnight\" cost savings of approximately 10% due to modular construction of structures in its proposed SMR plant. ", "Advanced reactor developers and advocates have also highlighted the cost reduction potential of such characteristics as simplified reactor designs, standardized reactor components, and smaller overall reactor sizes. Advanced reactors may also offer the potential to reduce financing costs as a result of shorter construction times and, in the case of SMRs, the ability to begin generating revenue after the installation of the first module, even as work continues on additional modules."], "subsections": []}, {"section_title": "Operational Costs", "paragraphs": ["Some advanced reactor concepts also show potential for reducing operational costs. Some designs would utilize simpler systems or increased automation to reduce human labor costs during operation. Many advanced reactor developers contend their designs would improve upon the thermal efficiencies of older generations of nuclear plants by operating at higher temperatures or through use of more efficient power conversion technologies. More-efficient plants may be able to reduce their payback periods relative to their less efficient peers. ", "Not all aspects of advanced reactor concepts would lead to cost reductions. Some reactor designs would have lower power ratings and/or lower power densities (less power for a given core volume) than conventional reactors, which could reduce the cost advantages that existing large reactors achieve through economies of scale. The majority of advanced designs would require fuels with a fissile isotope enrichment of between 5% and 20%, compared with 3-5% for most existing commercial reactors. Enriching fuel to these higher percentages would add costs. Some designs would use as-yet-unlicensed fuel forms, which may be associated with higher fuel fabrication costs. Some advanced reactors would also require spent fuel reprocessing and treatment on the back end before wastes could be safety stored, which may in turn require higher levels of security in order to limit risks of proliferation. These factors have the potential to add substantial costs to reactor operations compared with those of existing light water reactors. ", "Some research on SMRs has suggested that their small size will prevent them from achieving economies of scale. Modularization may allow this disadvantage to be balanced by so-called \"economies of multiples.\" One analysis found that, while SMRs may be cheaper than traditional reactors to construct, the cost per unit of power generated is likely to be higher."], "subsections": []}, {"section_title": "Cost Estimates for Advanced Reactors", "paragraphs": ["It is difficult to accurately estimate the costs of advanced reactors. Many advanced reactor concepts remain in the early stages of design and development, and vendor companies generally do not include detailed costs in their publicly available content. Academic analyses of the costs of non-traditional reactors have produced a range of results. ", "A common metric for measuring and comparing the cost of electricity production among sources is the levelized cost of electricity (LCOE). LCOE is a measure of the unit cost of producing electricity from a given generating source (e.g., coal, natural gas, solar, wind, etc.) and is calculated by dividing the total costs of constructing and operating a plant over its lifetime by its total electricity output over the same period. LCOE can be a useful tool for comparing production costs across sources; however, because there are additional factors that influence the economic competitiveness of a proposed plant, relying upon a single metric for comparison may be misleading. Other possible cost measures include the cost of construction per kilowatt or megawatt of electric generating capacity and the costs of air emissions.", "One standardized analysis of cost projections from eight advanced reactor vendors found the average projected LCOE for \"nth-of-a-kind\" (NOAK) reactors to be $60/MWh for the included reactor designs. A separate study projected LCOEs in the range of $110 to $120/MWh for included advanced reactor designs. By comparison, the LCOEs per MWh for competing electricity sources are estimated as follows: large LWRs, $112-$183; coal, $60-$143; natural gas combined cycle, $42-$78; wind, $30-$60; utility-scale solar, $43-$53. Such estimates typically exclude costs that are not currently the responsibility of plant owners, such as greenhouse gas emissions."], "subsections": []}]}, {"section_title": "Size", "paragraphs": ["Advanced reactor designs come in a wide range of sizes, from less than 15 MWe to 1,500 MWe or more. In some cases, the optimal reactor size may be influenced by the particular characteristics of a given design. In others, the size may be determined by the needs of the customer or site. ", "A commonality among many unconventional reactor concepts is an increased focus on small reactor designs. As noted earlier, advanced SMRs, 300 MWe and below, \"employ modular construction techniques, ship major components from factory fabrication locations to the plant site by rail or truck, and include designs that simplify plant site activities required for plant assembly,\" according to DOE. The smallest of these\u2014under 20 MW of thermal energy\u2014may also be referred to as microreactors. As noted above, most existing conventional reactors in the United States have an electrical generating capacity of 1,000 MWe or more.", "The small size and modular nature of SMRs gives them the potential to expand the types of sites and applications for which nuclear energy may be considered suitable (see section on Versatility). SMR designs with multiple reactor modules may allow for size customization based on the needs of the customer or characteristics of the host site."], "subsections": []}, {"section_title": "Safety", "paragraphs": ["Safety with respect to nuclear energy refers primarily to the minimization of the risk of release of radioactivity into the environment. Advanced reactor systems may have both safety advantages and disadvantages in comparison with existing reactors as a result of their size and design, and the chemical properties of their main components (e.g. the coolant, fuel, and moderator). Because many of these technologies are in the design phase, the operational safety of many of these systems has not yet been established in practice. Testing and demonstration would be needed to validate the safety claims of advanced reactor vendors. ", "Conventional nuclear plants use multiple independent and redundant safety systems to minimize risk. In the majority of cases, these systems are \"active,\" meaning that they rely on electricity or mechanical systems to operate. Advanced nuclear reactors tend to incorporate passive and inherent safety systems as opposed to active systems. Passive systems refer primarily to two types of safety features: (1) the ability of these reactors to self-regulate the rate at which fission occurs through negative feedback mechanisms that naturally reduce power output when certain system parameters (such as temperature) are exceeded, and (2) the ability to provide sufficient cooling of the core in the event of a loss of electricity or other active safety systems.", "The chemical properties of various advanced coolants, fuels, and moderators may also contribute inherent safety advantages. Examples include higher boiling points for coolants, higher heat capacities for fuels and moderators, and higher retention of radioactive fission products for some coolants. Some advanced reactor coolants (such as liquid metals) remain at atmospheric pressure under high reactor temperatures, putting less stress on primary reactor components than high-pressure coolants such as water. Advanced reactors that can operate at or near atmospheric pressure enable simplification of the coolant system design and safety systems, as well as the potential for improved economic performance. ", "Proponents of small reactors have suggested that SMRs, and microreactors in particular, may pose less of a safety risk due to the smaller total volume of radioactive material on site and lower risk of release to the environment. Consequently, some have argued that they should face streamlined approval processes in line with the NRC's approach of risk-informed regulation. The smaller size of SMRs and microreactors may also enable innovations in siting that could contribute to plant safety. Some have suggested that siting these reactors underground or on floating platforms at sea could reduce risks related accidental release of radioactive materials and seismic activity, respectively. ", "While some advanced reactor coolants and moderators may have the advantages described above, some also have chemical properties that pose safety concerns. Examples include reactivity, toxicity, or corrosiveness of the primary coolant in the case of sodium, lead, and molten salts, respectively. Molten salt-cooled reactors would incorporate the dissolved fuel into the coolant, posing a safety concern for plant workers who must be shielded from the higher levels of radioactivity flowing through the coolant system as a result. Opaque coolants present additional challenges to visual core monitoring and inspection compared to transparent coolants like water.", "Advanced reactors, and even some existing conventional reactors, may also make use of advances in fuel technologies and accident-tolerant fuels (ATFs). ATFs are designed to better withstand losses in cooling capacity during an accident, reducing the risk of fuel meltdown and allowing reactor operators more time to respond to accidents. Near-term ATF concepts (e.g. coated zirconium cladding, iron-chrome-aluminum-based cladding) may be commercially available as soon as the mid-2020s, while longer-term ATF concepts (e.g. metallic fuels, silicide fuel, and silicon carbide cladding) would need more testing before they could be licensed."], "subsections": []}, {"section_title": "Security and Weapons Proliferation Risk", "paragraphs": ["In addition to producing energy for peaceful purposes, nuclear fuels such as uranium and plutonium can be used by states to manufacture nuclear weapons material for military use or diverted by non-state actors to produce weapons of mass destruction. The risk of weapons proliferation from civilian nuclear materials presents a challenge for all nuclear energy reactors to varying degrees, and for international controls on nuclear materials. Advanced reactor designs may offer both advantages and disadvantages with respect to their potential effects on nuclear weapons proliferation.", "Advocates contend that many advanced reactor designs would be more resistant to weapons proliferation than existing LWRS because of factors such as \"sealed\" or difficult-to-access core designs, infrequent refueling, smaller inventories of fissile materials in the core, and remote monitoring capabilities, among others. Some designs may produce waste that is less attractive for weapons proliferation for a variety of reasons. ", "Advanced reactors may also present unique inspection and monitoring challenges. In a 2017 workshop report, the International Atomic Energy Agency (IAEA), which functions as an inspector of nuclear states to ensure compliance with international nonproliferation agreements, noted that some of the characteristics of advanced reactors may make them more difficult to monitor and safeguard. For instance, the opacity of certain advanced coolants, such as sodium, lead, and molten salts, may make it more difficult to monitor reactor cores to ensure nuclear materials are not being diverted. In contrast, inspectors can visually see through cooling water to determine whether fuel rods and assemblies are present or have been removed, possibly for plutonium separation.", "The IAEA report identified several advanced reactor technologies that pose unique and particularly difficult safeguarding challenges, including transportable reactors, pebble-bed design HTGRs, molten salt reactors, and certain waste reprocessing facilities. The report also noted that \"proliferation resistance and ease to verify (safeguardability) are not interchangeable; and most of the features lending proliferation resistance to Generation-IV reactors actually make safeguards nuclear material accountancy more difficult.\" ", "The utilization by some advanced reactors of more highly enriched fuels could create additional nonproliferation challenges. Many advanced designs would utilize fuel with a fissile isotope enrichment of between 5% and 20% or higher (compared to 5% or lower for most current reactors). At these higher enrichments, even very small reactors would likely contain more than enough fissile material to produce multiple nuclear weapons with further enrichment. The work required to enrich uranium to weapons-grade levels declines as the initial enrichment level rises. Some designs would also produce spent fuel with higher concentrations of isotopes that are desirable from the point of view of weapons production, making them a more attractive target of diversion than current LWR fuel. Additional security measures may be necessary to safeguard against such eventualities. ", "The need to safeguard nuclear materials is present not just at reactor sites, but through the entirety of the nuclear supply chain. This includes during the fuel fabrication process, in transit, and, if applicable, during fuel reprocessing. Many advanced reactors would require or would offer the option to reprocess the spent fuel to extract remaining fissile materials. Some advanced reactor technologies rely on reprocessing to make them cost-effective. Separating these materials from the radioactive wastes makes them more attractive both to thieves for making radiological dispersal devices and to countries that might use them to produce weapons. France, Japan, and the United Kingdom have been engaged in civilian nuclear fuel reprocessing for decades. In the process, they have accumulated more than 290 metric tons of separated plutonium across various civilian facilities as of January 2017. For reference, the minimum fissile inventory required to produce a nuclear weapon from plutonium is generally cited as 10 kg of Pu-239. This figure may vary considerably based on the percentage of other plutonium isotopes mixed with Pu-239 and the sophistication of weapons designs.", "For existing nuclear power plants in the United States, security and proliferation risks are generally considered to be low, given the current fuel cycle and safeguards regimes in place. In particular, the low-enriched uranium fuel (3%-5% U-235) in U.S. reactors cannot be used for a nuclear explosive device without separation and further enrichment, and the United States lacks commercial facilities for chemical separation of plutonium. Many observers view the lack of reprocessing in the United States as a policy signal to other countries that the country with the largest number of nuclear power plants in the world has been able to support this fleet without reprocessing. The variety of advanced nuclear power plant designs have the potential to further reduce this relatively low risk, or to increase the risks, depending on the technical and policy choices and how they are implemented."], "subsections": []}, {"section_title": "Versatility", "paragraphs": ["Many advanced reactor designs are smaller than the existing fleet of LWRs and are designed for modular installation. Because the number of modules may be altered to meet the power and heating needs of the site, SMRs are intended to accommodate a range of sizes and types of uses, including those that may have been considered too small in the past. SMRs and microreactors have potential applications in providing power to remote and isolated areas, on-site heating for industrial or municipal clients, and heat or power to mobile or temporary clients (e.g. remote construction sites and temporary military stations). The Department of Defense (DOD) has expressed interest in using SMRs to power remote bases, such as the Eielson Air Force Base in Alaska. The John S. McCain National Defense Authorization Act for Fiscal Year 2019 instructs DOE to produce a report on how a program could be undertaken to pilot at least one microreactor at a military or DOE site by the end of 2027. DOD issued a request for information about microreactor prototype designs on January 22, 2019, as a first step in its study.", "A recent MIT study cautioned that small size alone would not necessarily give advanced reactors a market edge: ", "The industry's problem is not that it has overlooked valuable market segments that need smaller reactors. The problem is that even its optimally scaled reactors are too expensive on a per-unit-power basis. A focus on serving the market segments that need smaller reactor sizes will be of no use unless the smaller design first accomplishes the task of radically reducing per-unit capital cost.", "Advanced reactors may also be designed for new applications or to capture new markets. Many advanced nuclear reactors would operate at higher temperatures (500-1,000\u00b0C) than existing commercial reactors (approximately 300-330\u00b0C). Higher operating temperatures would allow some advanced reactors to tap into the large market for heat for industrial processes. ", "Industrial users consume 25% of all primary energy produced in the United States, 80% of which is in the form of process heat. A report by MIT estimates that 17%-19% (or 134-151 GWt) of the U.S. market for industrial heat could be supplied by small (150-300 MWt) advanced reactors. Potential applications include providing process heat for district heating, desalination, petroleum refining and oil shale processing, steam reforming of natural gas, cogeneration, biomass or coal gasification, and hydrogen production, among others. Advanced reactors may nevertheless face steep barriers to entry into these markets in the form of competition from other sources, such as natural gas plants (with or without carbon capture and storage), that are perceived as being less risky, both physically and economically. "], "subsections": []}, {"section_title": "Waste Management", "paragraphs": ["The radioactivity of nuclear waste presents waste management and facility contamination challenges that are unique to nuclear energy. Radioactivity builds up in a nuclear reactor in three primary ways: 1) through the accumulation of radioactive \"fission products\" that result from the splitting of fissile nuclei, 2) through the accumulation of radioactive \"actinides\" that form when heavy atoms in the reactor core absorb a neutron but do not undergo fission, and 3) through the generation of \"activation products\" in the coolant, moderator, or reactor components that occurs when these materials are made radioactive by absorbing neutrons. The vast majority of the initial radioactivity in nuclear waste comes from the fission products. Due to the long half-lives of some of these radioactive materials (several hundred thousand years and longer), nuclear waste poses long-term health hazards. ", "In 2018, the U.S. inventory of spent nuclear fuel exceeded 80,000 metric tons of uranium (MTU). This is projected to rise at a rate of approximately 1,800 MTU per year, resulting in an estimated 138,000 MTU by 2050. Because no long-term repository or consolidated storage facility for high-level nuclear waste has been licensed by NRC, newly discharged spent nuclear waste is currently stored onsite at nuclear plant locations. ", "Unconventional reactors may offer some waste management advantages over existing commercial reactors. Fast reactors, and some other unconventional reactors, would be more effective at destroying actinides compared with commercial reactors. Actinides are responsible for the vast majority of the radioactive hazard that remains in nuclear waste after the first few centuries. Reducing the prevalence of these long-lived waste products by transmuting them to short-lived radionuclides may reduce the health risk associated with a release of spent fuel that occurs far in the future (when storage containers may be more likely to fail). ", "Actinides are not the only long-lived nuclear wastes, however; some fission products remain radioactive hazards for hundreds of thousands of years and longer. The presence of these fission products in nuclear wastes might not be appreciably reduced by unconventional reactors. As a result, some have argued that, even if advanced reactors are able to deliver the improvements in actinide management that some advocates have claimed are possible, adoption of these reactors at scale would not materially alter the need for a long-term waste repository. ", "Some advanced reactors would use new or non-conventional fuel forms, such as metallic fuels or dissolved molten fuels. Some of these fuels pose additional waste management challenges as a result of their tendency to corrode storage containers or otherwise react with the environment in ways that complicate their safe storage and disposal. Research on the safe management and disposal of advanced reactor waste will be a key element in commercializing these technologies."], "subsections": []}, {"section_title": "Environmental Effects", "paragraphs": ["Environmental impacts for any electric power source must be evaluated based on air emissions, water discharges, and waste management challenges, considering the full life cycle of the technology. The recent focus for nuclear power environmental impacts has been on air emissions, specifically the greenhouse gas footprint. Historically, however, much attention has been given to the waste management challenges associated with nuclear power. The environmental impacts of current LWR nuclear technologies are well studied. The stated goal of many advanced reactor technologies is to reduce environmental impacts. The impacts for newer advanced technologies would need to be evaluated on a case-by-case basis, and assessed empirically to determine whether the impacts are greater or less than current technologies, and whether advanced technologies eliminated any existing challenges in practice or raised new challenges requiring new technologies, regulatory systems, and support industries.", "Nuclear energy is a low-carbon source of electricity, with no direct emissions from the fission process. As such, it is one of a number of energy technologies available for reducing the carbon emissions associated with electricity production (and potentially other uses of energy, such as industrial heat). The nuclear energy industry is not zero-carbon, however. Historically, fossil fuel-powered plants and equipment have provided energy to support the nuclear supply chain. Uranium enrichment facilities, in particular, have high energy requirements, and U.S. enrichment plants in the past used electricity primarily from coal-fired power plants. Current uranium enrichment plants use only a fraction of the electricity of older enrichment technology and are generally less reliant on coal-fired generation. A study by the DOE National Renewable Energy Laboratory of the life-cycle greenhouse gas emissions of major electric generating technologies found that conventional nuclear reactor emissions were similar to those of renewable energy technologies and only a fraction of coal and natural gas plant emissions. Emissions of conventional air pollutants (e.g., sulfur oxides, nitrogen oxides, mercury, and particulates) from nuclear power operations and fuel cycle activities are similarly very low.", "Advanced reactors are expected to have similar life-cycle air emissions, as non-combustion energy sources. Supporters of advanced reactor technologies contend that they could reduce the obstacles to nuclear power expansion related to cost, safety, waste management, and fuel supply and therefore allow nuclear power to play a greatly expanded role in worldwide greenhouse gas reduction strategies.", "Some have argued that decarbonization goals could be achieved more effectively through improvements in existing light water reactor technologies. In particular, such a strategy could avoid additional waste management technical challenges and potential costs associated with the processing of radioactive waste from some classes of advanced reactors. On the other hand, as noted above, proponents of advanced reactor technologies contend that nuclear fuel recycling/reprocessing could reduce the long-term radioactivity of nuclear waste and produce waste forms more resistant to deterioration than LWR spent fuel.", "Plants with higher thermal efficiencies reject less heat into the environment per kilowatt-hour (KWh) of electricity generated. This can help reduce ecosystem impacts related to heat rejection. For example, increased efficiency may contribute to significant reductions in the amount of water used for waste heat rejection (up to 50% less) per unit of electricity generated, and reduce the amount of heat absorbed by adjacent water bodies. This could have particularly significant implications for the use of nuclear energy in arid environments. "], "subsections": []}]}, {"section_title": "DOE Nuclear Energy Programs", "paragraphs": ["The Department of Energy supports the development of advanced nuclear technologies through research and development (R&D) programs housed in two primary offices: the Office of Nuclear Energy and the Office of Science. Collectively, advanced nuclear R&D programs (advanced fission and fusion) within these two offices received 23% of funding for energy R&D in fiscal year (FY) 2019, more than existing nuclear, renewables, or fossil energy (see Figure 7 ). The Advanced Research Projects Agency\u2014Energy (ARPA-E) also provides funding for early stage R&D for advanced nuclear projects. "], "subsections": [{"section_title": "Office of Nuclear Energy", "paragraphs": ["The Office of Nuclear Energy (NE) \"focuses on three major mission areas: the nation's existing nuclear fleet, the development of advanced nuclear reactor concepts, and fuel cycle technologies,\" according to DOE's FY2020 budget justification. NE primarily supports nuclear fission technologies. NE has established a goal for advanced reactor development that \"by the early 2030s, at least two non-light water advanced reactor concepts will have reached technical maturity, demonstrated safety and economic benefits, and completed licensing reviews sufficient to allow construction to go forward.\" According to one analysis, NE reported spending approximately $2 billion on advanced reactor R&D between 1998 and 2015. Analysts have contended that much higher spending levels would be needed for DOE to support the latter stages of advanced reactor R&D, such as demonstrations and commercialization.", "In FY2019, Congress appropriated $753 million for NE's nuclear R&D programs. Of that, Congress directed $319.5 million (42%) to be used specifically for advanced nuclear technology R&D within the following programs and activities:", "S upercritical Transformational Electric Power R&D : $5 million appropriated to develop a supercritical carbon dioxide Brayton cycle for thermal-to-electric energy conversion in sodium-cooled fast reactors; Advanced Small Modular Reactor R&D : $100 million appropriated for this new, one-year subprogram that is to support \"cost-shared public-private R&D partnerships\" to address technical challenges and accelerate development of SMR reactor designs and supply chains; Advanced Reactor Technologies : $111.5 million appropriated to conduct early-stage R&D on advanced reactor technologies, including SMRs; Versatile Fast Test Reactor : $65 million appropriated for R&D to support development of a versatile fast test reactor, also called the versatile test reactor; Material Recovery and Waste Form Development : $38 million appropriated to activities related to \"the improvement of the current back end of the nuclear cycle [waste management and reprocessing],\" of which $27 million were specifically directed towards activities supporting advanced nuclear technologies. ", "In addition to the programs that focus exclusively on advanced reactor R&D, several cross-cutting NE programs directly or indirectly support advanced nuclear technologies. NE's Nuclear Energy Enabling Technologies (NEET) program includes several subprograms focused on cross-cutting research to support both existing and advanced nuclear technologies. Subprograms of NEET support DOE's Gateway for Accelerated Innovation in Nuclear (GAIN) initiative, which provides technical, financial, and regulatory support for existing and advanced nuclear technologies by providing enhanced access to DOE's network of national labs and unique nuclear R&D capabilities, as well as through competitive industry funding opportunities. GAIN industry funding opportunities include ", "U.S. Industry Opportunities for Advanced Nuclear Technology Development , a five-year funding opportunity announcement initiated in December of 2017 that offers cost-sharing opportunities for advanced reactor development, demonstration, and regulatory assistance, and for other nuclear R&D. Applications are reviewed and awards are announced on a quarterly basis. DOE expects to award a total of $400 million over the five-year program. Nuclear Energy Voucher Program , which provides industry awardees with access to DOE nuclear expertise and capabilities in the form of vouchers redeemable for research and technical support activities at one of DOE's national laboratories. Vouchers are not direct financial awards, but rather fund the work done by the national laboratory on behalf of the awardee. Recipients are required to provide a 20% minimum cost-share. As of October 16, 2018, GAIN had distributed vouchers worth approximately $10.7 million to 22 companies. ", "In the past, NE has also provided support for the review and licensing of advanced reactors by NRC. From FY2012 to FY2017, the NE SMR Licensing Technical Support program provided cost-sharing arrangements with industry to support first-of-a-kind costs associated with NRC design certification, design licensing, and site licensing. The program provided support for the NRC's review of NuScale's SMR design. DOE brought the program to a close at the end of FY2017. "], "subsections": []}, {"section_title": "Office of Science", "paragraphs": ["Support for nuclear fusion technologies comes from DOE's Office of Science. Congress appropriated $432 million for nuclear fusion R&D in FY2019, more than for all other advanced nuclear technologies combined. Congress provided a further $132 million for the U.S. contribution to the ITER fusion project, as discussed above. "], "subsections": []}, {"section_title": "ARPA-E", "paragraphs": ["DOE's ARPA-E invests in early-stage energy technologies with high potential for transformational impact. In 2017, ARPA-E announced a funding opportunity for \"technologies to enable lower cost, safer advanced nuclear plant designs\" as part of a new program entitled Modeling-Enhanced Innovations Trailblazing Nuclear Energy Reinvigoration program (MEITNER). In June of 2018, MEITNER awarded $24 million in funding for 10 industry and university projects focused on advanced nuclear technologies. ARPA-E announced grants for five nuclear-related projects totaling $12 million in December 2018."], "subsections": []}, {"section_title": "Offices of Environmental Management and Legacy Management", "paragraphs": ["The DOE's Office of Environmental Management (EM) and Office of Legacy Management (LM) provide a variety of functions supporting advanced reactor R&D. ", "First, EM provides waste management services for ongoing advanced reactor R&D activities. For example, EM manages the spent nuclear fuel from the Advanced Test Reactor at the Idaho National Laboratory. DOE describes the Advanced Test Reactor as \"the only U.S. research reactor capable of providing large-volume, high-flux neutron irradiation in a prototype environment \u2026 to study the results of years of intense neutron and gamma radiation on reactor materials and fuels for \u2026 research and power reactors.\"", "Second, EM funds and manages environmental remediation and decontamination and decommissioning for several advanced reactor facilities, including the Energy Technology Engineering Center at the Santa Susana Field Laboratory in California, various facilities at the Idaho National Laboratory, and the Hanford site in the state of Washington. At Hanford, EM has conducted decontamination and decommissioning activities at the Fast Flux Test Facility (FFTF) since 1992, which operated for 10 years (1982-1992) as a 400 MWt liquid-metal (sodium)-cooled nuclear research and test reactor to develop and test advanced fuels and materials for the Liquid Fast-Breeder Reactor Program. ", "Third, EM funds facility overhead operations for facilities where advanced reactor R&D is occurring or planned. \"Overhead\" (or \"Landlord\") costs can include infrastructure maintenance (e.g., power, water, roads, bridges), site safeguards and security, worker health and safety, and program direction and administration. For example, EM funds site overhead costs at the Hanford and Savannah River sites, home of the Pacific Northwest and Savannah River National Laboratories, where advanced reactor and fuels research has been conducted."], "subsections": []}]}, {"section_title": "Congressional Issues", "paragraphs": [], "subsections": [{"section_title": "Role of the Federal Government in Technology Development", "paragraphs": ["What is the appropriate level of federal support for each stage of technology development? That is a fundamental question in the longstanding national debate over R&D policy writ large. For nuclear energy technology development, major stages include research on fuels and materials, development of reactor concepts and designs, component testing and evaluation, licensing by NRC, demonstration, and commercialization. Typically, the earliest stages of development involve laboratory-scale work and computer modeling and simulation, some of which may be relatively inexpensive and applicable to a broad range of nuclear technology. The later stages focus on specific reactor designs and require construction of full- or nearly full-scale nuclear power plants potentially costing billions of dollars. Even early-stage nuclear research often requires the construction and operation of test reactors, shielded hot cells for remote handling of intensely radioactive materials, and other expensive facilities and infrastructure.", "The Trump Administration contends that federal support should focus on the early stages of research, where the private sector may have a tendency to underinvest. \"The Federal role in supporting advanced technologies is strongest in the early stages of research and development,\" according to DOE's FY2019 budget justification.\"", "Consistent with that policy, the Administration opposes funding for \"late stage or near commercial ready technology.\" Opponents of federal funding for energy demonstration and commercialization contend that such activities should be conducted by the private sector, where market forces would determine which technologies would succeed. As asserted by the Heritage Foundation, \"By attempting to force government-developed technologies into the market, the government diminishes the role of the entrepreneur and crowds out private-sector investment. This practice of picking winners and losers denies energy technologies the opportunity to compete in the marketplace, which is the only proven way to develop market-viable products.\"", "The conferees on FY2019 DOE appropriations did not adopt the Administration's proposed focus on early-stage research, saying, \"The Department is directed throughout all of its programs to maintain a diverse portfolio of early-, mid-, and late-stage research, development, and market transformation activities.\" Supporters of a broader federal role contend that mid- and late-stage federal support is necessary for new technologies to survive the \"valley of death,\" after federally funded early-stage research is completed but before a promising technology is able to attract private-sector funding for the more-expensive later development, demonstration, and commercialization phases. Obtaining funding for expensive and risky demonstration projects has been described as a particularly difficult obstacle. According to former DOE Under Secretary John Deutch, \"energy innovation is constrained not by an absence of new ideas, but by the absence of early examples of successful implementation.\""], "subsections": []}, {"section_title": "Perceived Need for Advanced Nuclear Power and Competing Alternatives", "paragraphs": ["World electricity generation is projected by the U.S. Energy Information Administration to grow by nearly 50% between 2015 and 2040. While renewable energy and nuclear power are projected to rise substantially during that period, fossil fuels would still constitute about 55% of total generation if current policies and trends continue. Proponents of unconventional nuclear power contend that advanced reactors could mitigate the concerns about safety, cost, radioactive waste, weapons proliferation, and fuel supply that are seen as inhibiting greater utilization of nuclear energy. Under that view, advanced nuclear technology would be indispensable for meeting the world's rapidly increasing demand for electricity without emitting greenhouse gases.", "\"In the 21 st century the world faces the new challenge of drastically reducing emissions of greenhouse gases while simultaneously expanding energy access and economic opportunity to billions of people,\" according to a recent study by the Massachusetts Institute of Technology. The study found that the cost of worldwide greenhouse gas reductions could be minimized by the deployment of lower-cost nuclear generation.", "That finding is disputed by various environmental and other groups that contend that a combination of renewable energy and efficiency is the lowest-cost option for eliminating greenhouse gas emissions and could be implemented more quickly. \"With technology already available, renewable energy sources like wind, solar, and geothermal can provide 96 percent of our electricity and 98 percent of heating demand\u2014the vast majority of U.S. energy use,\" according to the environmental advocacy group Greenpeace USA. Some environmental groups contend that the safety and other risks posed by nuclear make it unacceptable in any case, even with advanced technology. The Nuclear Information and Resource Service advocacy group says, \"There is nothing environmentally friendly about nuclear power. It only creates different environmental problems than fossil fuel energy sources. But neither fossil fuels nor nuclear power are safe, sustainable, or healthy for humans and the environment.\"", "Germany adopted a policy after the Fukushima disaster in 2011 to greatly reduce carbon emissions through renewable energy and efficiency while eliminating nuclear power. The policy, called \"Energiewende,\" or energy transition, calls for Germany's consumption of primary energy (the initial energy content of fuels and other energy sources) to be reduced by 50% in 2050 from its 2008 level, while greatly increasing the use of renewable energy throughout the economy. According to the German government, \"By 2050 renewable energies should make up 60 percent of the gross final consumption of energy, and 80 percent of the gross electricity consumption.\" A 2017 study by an academic team developed \"roadmaps\" for 139 countries to convert to 100% renewable energy by 2050. The study concluded that renewable energy production could be expanded with more certainty than nuclear and other non-emitting sources.", "The National Renewable Energy Laboratory issued a study in 2012 of the impact of increasing U.S. renewable electricity generation to up to 90% by 2050. The study found that renewables could \"adequately supply 80% of total U.S. electricity generation in 2050,\" with nuclear, coal, and gas supplying the remaining 20%. Nuclear power plants were projected to be located almost entirely east of the Mississippi River for economic and other reasons."], "subsections": []}, {"section_title": "Versatile Test Reactor", "paragraphs": ["Supporters of advanced reactor technologies are urging DOE to construct a fast spectrum Versatile Test Reactor (VTR), which they consider critical for the development of nuclear fuels, materials, instrumentation, and sensors for fast neutron and other advanced reactors. \"To support the innovative R&D required to revive a competitive U.S. nuclear industry, a new test reactor is required with capabilities that far exceed those of the few remaining test reactors,\" a senior executive from the nuclear firm General Atomics testified to Congress in 2015. According to DOE's Idaho National Laboratory (INL), \"Currently, only a few capabilities are available for testing fast neutron reactor technology in the world and none in the U.S.\"", "Requirements for DOE to plan and develop a \"versatile reactor-based fast neutron source\" by the end of 2025 are included in the Nuclear Energy Innovation Capabilities Act of 2017 (NEICA), signed into law September 28, 2018 ( P.L. 115-248 ). In the 116 th Congress, the Nuclear Energy Leadership Act (NELA, S. 903 ), introduced March 27, 2019, by Senator Murkowski, would authorize DOE to \"provide\" the facility. Funding of $65 million for R&D to support development of the VTR (referred to as a \"versatile fast test reactor\") is included in the Energy and Water Development and Related Agencies Appropriations Act, 2019 (Division A of P.L. 115-244 ). Citing the enactment of NEICA, Energy Secretary Rick Perry announced the official launch of the VTR project on February 28, 2019. The Trump Administration is requesting an additional $100 million for the VTR project in FY2020.", "DOE announced a contract award on November 13, 2018, to GE Hitachi Nuclear Energy to help develop a conceptual design and cost estimate for the VTR, which is to be adapted from the company's PRISM sodium-cooled fast reactor design. According to INL, which is managing the project, the conceptual design and cost and schedule estimates are to be completed in 2021, after which another contract would be awarded for final design and construction. The VTR is currently scheduled to be operational by October 2026. An INL official estimated in February 2019 that a sodium-cooled VTR would cost $3 billion to $3.5 billion in today's dollars. The Nuclear Energy Research Infrastructure Act of 2018 ( H.R. 4378 , 115 th Congress), which passed the House February 13, 2018, but was not enacted, would have authorized $1.99 billion through FY2025 for the project.", "Some who are skeptical of the VTR project have questioned whether there would be enough potential users\u2014primarily companies developing fast reactors\u2014to justify its construction and operating costs. Some advanced nuclear reactor developers have doubted that the VTR will begin operating before their designs are completed. Concerns have also been raised about whether new facilities would be required to fabricate fuel for the VTR, and how much those might cost, and the cost of handling and disposing of highly radioactive spent fuel from the reactor. The potential use of plutonium-based fuel in the VTR has drawn opposition because of the usability of such fuel in nuclear weapons."], "subsections": []}, {"section_title": "DOE Hosting of Private-Sector Experimental Reactors", "paragraphs": ["Proposals to authorize DOE to host privately funded experimental and demonstration reactors have been included in several bills in the 114 th and 115 th Congresses, including a provision enacted in NEICA. Supporters of the idea contend that reactor developers could benefit from the expertise and facilities at DOE national laboratories. Safety oversight of private-sector experimental reactors at national laboratories could possibly be conducted by DOE and not require NRC licensing. NEICA specifies that reactors intended to demonstrate commercial suitability would require NRC licenses, even at DOE sites.", "NEICA added section 958 to the Energy Policy Act of 2005 ( P.L. 109-58 ), which authorizes a DOE National Reactor Innovation Center (NRIC). This program would \"enable the testing and demonstration of reactor concepts to be proposed and funded, in whole or in part, by the private sector.\" Such testing and demonstration would take place at DOE national laboratories or other Department-owned sites. In implementing the NRIC program, DOE is to coordinate with NRC on sharing technical expertise on the advanced reactor technologies under development.", "DOE announced an agreement on February 18, 2016, with Utah Associated Municipal Power Systems (UAMPS) \"to support possible siting\" of a first-of-a-kind NuScale SMR plant at INL. Under the agreement, \"UAMPS is currently working to identify potential locations that may be suitable\" at the 890-square-mile INL site for construction of the plant, according to DOE. The NuScale SMR is currently undergoing NRC review for a design certification, which is to be issued sometime after 2020.", "In 2012, DOE announced three agreements \"to develop deployment plans\" for privately funded SMRs at the Department's Savannah River Site in South Carolina. The agreements with Hyperion Power Generation (now Gen4 Energy), Holtec International, and NuScale were intended to help the companies \"obtain information on potential SMR reactor siting at Savannah River and provide a framework for developing land use and site services agreements to further these efforts,\" according to DOE.", "Because NEICA says reactor testing and demonstration projects would be funded \"in whole or in part\" by the private sector, the potential federal share of such projects could be a future issue before Congress. NEICA requires DOE to submit a report to Congress on costs and other issues that could be raised by the hosting of reactor testing and demonstration projects, including", "DOE's capabilities for safety review and oversight of privately funded advanced reactor research; potential DOE sites that could host privately funded experimental advanced reactors; contractual mechanisms that could be used for such projects; and responsibility for management and disposal of waste."], "subsections": []}, {"section_title": "Funding of Demonstration Reactors", "paragraphs": ["A crucial stage in the commercialization of nuclear technology is the construction of demonstration reactors, which are expected to cost several billion dollars apiece, depending on their size and level of technical maturity. As noted above, the VTR, which would serve as a test reactor and as a demonstration of GE's PRISM reactor (although downsized from 840 MWt to 311 MWt), is estimated to cost up to $3.5 billion to construct. The first 12-module NuScale plant, at 684 MWe, is estimated to cost $3 billion. Including the demonstration stage, bringing a new reactor technology to the market could require up to 30 years and cost up to $15 billion, according to one recent estimate.", "The majority of U.S. advanced reactor companies surveyed in 2017 have raised only a small portion of the funding that would be necessary for commercial-scale demonstration of their designs. One analysis found that commercialization of advanced reactor concepts would require significantly higher levels of public funding. ", "DOE has a range of options for supporting the construction of demonstration reactors and helping bring them to the commercial market."], "subsections": [{"section_title": "Cost Sharing", "paragraphs": ["DOE can carry out technology demonstration projects on a cost-shared basis under Sec. 988 of the Energy Policy Act of 2005 ( P.L. 109-58 ). At least 50% of demonstration costs must come from non-federal sources, although the Secretary of Energy can reduce the non-federal share based on technological risk and other factors. Repayment of the federal contribution is not required. In addition to construction costs, federal cost sharing can apply to licensing, design work, and \"first of a kind\" engineering, such as the assistance provided to NuScale under the DOE small modular reactor licensing technical support program. "], "subsections": []}, {"section_title": "Full Funding", "paragraphs": ["Construction of research facilities such as the VTR may be completely funded through congressional appropriations, with users of the facility paying to conduct research (sometimes with DOE grants or vouchers). The VTR would also demonstrate the PRISM technology, as noted above, but it would be smaller than the planned commercial version and would not produce power."], "subsections": []}, {"section_title": "Federal Payments for Power and Research Use", "paragraphs": ["The federal government can purchase power generated by demonstration reactors and also pay for research use of the reactors. For the proposed NuScale demonstration, DOE announced a memorandum of understanding (MOU) in December 2018 with the Utah Associated Municipal Power Systems (UAMPS), which would own the plant. The MOU calls for DOE to purchase power from one of the 60 MWe modules in the plant. DOE would use another module for research under the Joint Use Modular Plant (JUMP) program. \"The research is expected to focus principally on integrated energy systems that support the production of both electricity and non-electric energy products,\" according to DOE's announcement."], "subsections": []}, {"section_title": "Loan Guarantees", "paragraphs": ["DOE can issue loan guarantees to build advanced nuclear reactors under Title XVII of the Energy Policy Act of 2005. DOE currently has $8.8 billion in loan guarantee authority for advanced nuclear energy projects. To receive a DOE loan guarantee, projects must be found financially viable and they must pay an up-front fee called a \"subsidy cost.\" The subsidy cost is the present value of the government's potential cost of the loan guarantee that could result from future loan defaults. A project considered to be relatively risky would be assessed a relatively high subsidy cost. Title XVII loan guarantees cannot be given to projects that would use federal funds other than the federally guaranteed funding ( P.L. 111-8 , Division C). DOE has awarded $12 billion in Title XVII loan guarantees for the construction of two new reactors at the Vogtle nuclear power plant in Georgia."], "subsections": []}, {"section_title": "Tax Credits", "paragraphs": ["Power plants using advanced nuclear technology are eligible for a federal tax credit of 1.8 cents per kilowatt-hour of electricity generated, as extended by P.L. 115-123 . The nuclear production tax credits do not have an expiration date, but total credits are limited to 6,000 MW of capacity, limited to $125 million per year per 1,000 MW of capacity for eight years of operation. The availability of the tax credits could help nuclear demonstration projects procure financing and reduce the subsidy cost of DOE loan guarantees."], "subsections": []}, {"section_title": "Choosing Projects for Federal Funding", "paragraphs": ["Because the federal government may have limited funding for multibillion-dollar nuclear demonstration projects, a methodology for selecting which projects and technologies to support would likely be necessary. While this would appear to put DOE in the position of \"picking winners,\" as discussed above, it is conceivable that some market-based selection criteria could be at least part of the selection process for demonstration reactor support. One such criterion could be evidence of a customer base, which could include letters of intent for future orders (perhaps conditioned on successful demonstration). Another market-based criterion could be the extent of private matching funds raised for the project, such as firm contracts for power sales from the demonstration plant, or other private funding. Many other criteria could also be considered, such as technology maturity level (the level of technical risk) and the financial and technical strength of the project sponsor. The potential goal of demonstrating the widest possible range of advanced technologies might also be a consideration."], "subsections": []}]}, {"section_title": "Licensing Framework for New Technologies", "paragraphs": ["The U.S. nuclear industry has argued that current NRC procedures for reviewing and licensing new nuclear reactors are overly burdensome and inflexible, contributing to high regulatory costs and long reviews. Existing licensing pathways and safety regulations, which tend to be based on conventional LWR designs, are not necessarily well-suited to accommodate newer, advanced reactors. Consequently, industry groups and some outside experts have argued for a transition to a technology-neutral regulatory framework, a process which these groups have estimated may take up to five years to complete. The industry has also called for greater flexibility in making changes during reactor construction without regulatory delays.", "In response to such concerns, NEIMA includes several provisions on advanced nuclear reactor licensing. In the near term, NRC is required to establish \"stages in the licensing process for commercial advanced nuclear reactors,\" which would allow license applicants to gain formal approval for completing each step in the licensing process, such as a conceptual design assessment. A 2016 industry report recommending staged licensing noted that such a process is currently used in Canada and the United Kingdom. \"The step-wise pre-licensing design review processes in Canada and the UK provide earlier opportunities for reactor vendors to demonstrate to their investors and potential investors that the reactor design technology will be licensable,\" according to the report.", "NEIMA also requires NRC to develop procedures for using \"licensing project plans,\" which are described by the committee report as \"agreements between the agency and applicants early in the application process that reflect mutual commitments on schedules and deliverables to support resource planning for both the agency and the applicant.\" NRC must also increase the use of risk-informed and performance-based licensing evaluation techniques \"within the existing regulatory framework.\" Using such techniques, the evaluation of specific safety and other issues would be informed by the calculated level of risk, and performance standards would be used to evaluate safety, \"when appropriate,\" rather than specific reactor design requirements.", "NEIMA requires NRC to issue a \"technology-inclusive\" regulatory framework for optional use by advanced reactor applicants. As noted above, NRC regulations currently focus on light water reactors, which are the only commercial reactors currently used in the United States. NRC also must issue a report that would include an evaluation of the need for additional legislation to implement such a regulatory framework. Prior to NEIMA's enactment, NRC had begun preparing for the potential licensing of advanced reactors, issuing implementation action plans for the near, mid-, and long terms.", "New nuclear fuels are also subject to NRC regulation. Depending on the design, it can take up to six years to develop, test, and license new fuels. Transporting these new fuel forms may require additional innovation and regulation.", "The nuclear industry has contended that fees charged by NRC for reviewing reactor designs, new fuels, and license applications constitute a significant obstacle to advanced reactor deployment, particularly by relatively small, independent companies. NEICA authorizes DOE to provide grants to advanced reactor license applicants to cover some of their NRC fees throughout the licensing process."], "subsections": []}, {"section_title": "Power Purchase Agreements", "paragraphs": ["Federal agency agreements to purchase power from advanced reactors could substantially improve the financial feasibility of such projects, both at the demonstration and commercialization stages. Such power purchase agreements (PPAs) would provide a projected revenue stream that could help advanced reactor projects obtain financing and potentially reduce their financing costs. Federal agencies could also offer above-market prices for the power to encourage commercialization of nuclear technologies, if authorized by Congress.", "Proposals to address this issue are included in NELA ( S. 903 ), noted above. Section 2 of NELA would authorize the General Services Administration (GSA) to enter into PPAs for up to 40 years, an increase from the current limit of 10 years. Under 40 U.S.C. \u00a7501, GSA can delegate all or part of this authority to other agencies. Under a PPA, the federal government signs a contract to purchase electricity from a public utility for a specific time period. ", "Electricity payments during a PPA contract period, along with any other customer revenues, are intended to be sufficient to allow the power plant developer to recover its construction and other costs, plus a profit, if applicable. The proposed lengthening of the 10-year limit on PPAs is intended to allow enough time for nuclear reactor construction costs to be recovered, according to NELA's sponsors.", "NELA Section 3 would require DOE to enter into at least one PPA to purchase power from a commercial nuclear reactor by the end of 2023. \"Special consideration\" would be given to \"first-of-a-kind or early deployment nuclear technologies\" that could provide reliable power to important national security facilities, especially facilities disconnected from the electricity grid. If a PPA met those criteria, then electricity rates under the agreement could be higher than the average market rate. PPAs with currently operating commercial nuclear plants would not qualify for above-market rates.", "Federal PPAs of any duration are subject to cancellation each year if sufficient funds are not appropriated by Congress, and to cancellation at any time for the convenience of the government. ", "DOE's Western Area Power Administration (WAPA), which markets electricity from federal dams and other projects in much of the Western United States, has the authority to sign power sale contracts for up to 40 years (43 U.S.C. 485h(c)). This authority could potentially facilitate PPAs for demonstration reactors at INL or elsewhere in the WAPA service area. According to a 2017 report produced for DOE, \"A federal agency located within WAPA's jurisdiction may leverage WAPA's long-term contract authority by entering into an Interagency Agreement with WAPA and allowing WAPA, in turn, to enter into a PPA with a power provider on such federal agency's behalf for a term of up to 40 years.\" Under that scenario, WAPA could reach an interagency agreement with a military base in California under which WAPA would award a 40-year PPA on behalf of the base to a demonstration reactor at INL and then deliver the power to the base. "], "subsections": []}, {"section_title": "Advanced Reactor Fuel Availability", "paragraphs": ["Many advanced reactors would use fuels that are not currently commercially available, either due to lack of demand or technological immaturity. These include higher-enriched versions of existing uranium fuel as well as new types of fuels that are currently under development. Without near-term investment in fuel processing and fabrication capabilities, there may be insufficient supply of next generation fuels to support the deployment of some advanced reactors.", "Particular concern has been raised about the availability of high-assay low enriched uranium (HALEU), which would be necessary to power many advanced nuclear reactors. Existing U.S. commercial nuclear reactors are fueled by uranium that has been enriched to between 3% and 5% of the fissile isotope U-235. HALEU is enriched to between 5% and 20%. (At 20% and above, uranium is considered highly enriched and potentially useable for weapons.) Because HALEU is not used in existing commercial reactors, it is not readily available for advanced reactor development, according to the nuclear industry. ", "Section 7 of NELA would require DOE to sell, transfer, or lease high-assay low enriched uranium (HALEU) for use in advanced nuclear reactors. HALEU containing at least 2 metric tons of U-235 is to be made available by the end of 2022 and a total of at least 10 metric tons by the end of 2025. The FY2019 Energy and Water Development Appropriations Act ( P.L. 115-244 , Division A) requires DOE to submit a plan to Congress for HALEU development and provides $20 million for preparation and testing. ", "DOE is currently pursuing two approaches for developing HALEU supplies. One approach is to use DOE-owned HALEU currently stored at INL to fabricate fuel for advanced reactors. DOE issued an environmental assessment on January 17, 2019, that found no significant environmental impact from fabricating the fuel at existing INL facilities. In the other approach, DOE announced January 7, 2019, that it intended to sign a sole-source contract with Centrus Energy to build 16 centrifuges at DOE's Portsmouth, OH, site to enrich \"a small quantity\" of uranium to 19.75% U-235 by October 2020.", "The Nuclear Energy Institute has estimated that it would take a minimum of seven years to establish the infrastructure to supply this fuel for commercial purposes. DOE has proposed to downblend a supply of high enriched uranium to bridge this gap. By some assessments, 32 GWe of deployed advanced reactor capacity would be required to ensure the economic viability of new fuel fabrication and other fuel cycle facilities."], "subsections": []}]}, {"section_title": "International Organizations", "paragraphs": [], "subsections": [{"section_title": "International Framework on Nuclear Energy Cooperation", "paragraphs": ["The International Framework on Nuclear Energy Cooperation (IFNEC) is an international body dedicated to ensuring that the \"use of nuclear energy for peaceful purposes proceeds in a manner that is efficient and meets the highest standards of safety, security and non-proliferation.\" IFNEC was formed in 2010 by the members of its precursor organization, the Global Nuclear Energy Partnership. Its membership includes 34 participant countries, 31 observer countries, and 4 international observer organizations. The United States is a participating country. IFNEC working groups focus on issues related to nuclear infrastructure development, reliable fuel services and spent fuel management, and nuclear supply chains and supplier-customer relationships. "], "subsections": []}, {"section_title": "Generation IV International Forum", "paragraphs": ["The Generation IV International Forum (GIF) is a collaborative international initiative to promote the development of the next generation of nuclear energy systems through shared R&D. GIF was created in 2000 with nine original members: Argentina, Brazil, Canada, France, Japan, South Korea, South Africa, the United Kingdom, and the United States. Switzerland, the European Union, China, Russia, and Australia joined subsequently. ", "In 2002, after reviewing 130 advanced reactor designs, the GIF identified 6 nuclear energy systems for further development. Collectively, these are known as Generation IV reactors. ", "The six Generation IV reactor technologies are: ", "Gas-Cooled Fast Reactor, Lead-Cooled Fast Reactor, Molten Salt Reactor, Sodium-Cooled Fast Reactor, Supercritical Water-Cooled Reactor, and Very High Temperature Reactor.", "Factors used in selecting the designs include safety, sustainability, economics, physical security, proliferation resistance, and waste minimization, and they represent a range of technologies. The GIF has suggested that commercialization of some of these technologies may occur as early as 2030, with demonstration of some technologies possibly occurring within the next decade. Each of these technologies is at a different level of technical maturity. Of these, sodium-cooled fast reactors are considered to be the most mature. Gas-cooled fast reactors, lead-cooled fast reactors, and molten salt reactors are not expected to reach commercialization until 2050 under current rates of development, although some vendors and academics have put forth more optimistic timelines."], "subsections": [{"section_title": "Appendix.", "paragraphs": [], "subsections": []}]}]}]}}
{"id": "R44572", "title": "U.S. Airborne Electronic Attack Programs: Background and Issues for Congress", "released_date": "2019-05-14T00:00:00", "summary": ["U.S. airborne electronic warfare (EW) programs involve developing and procuring EW aircraft and EW systems that are mounted on U.S. aircraft. The President's FY2020 budget request for the Department of Defense (DOD) proposes funding for a number of airborne EW programs.", "The Role of Airborne EW in Modern Warfare", "EW is a component of modern warfare, particularly in response to threats posed by potential adversaries such as Russia or China. EW refers to operations that use the electromagnetic spectrum (i.e., the \"airwaves\") to detect, listen to, jam, and deceive (or \"spoof\") enemy radars, radio communication systems, data links, and other electronic systems. EW also refers to operations that defend against enemy attempts to do the same.", "The shift in the international security environment from the post-Cold War era to an era of renewed great power competition has led to an increased focus on EW in U.S. defense planning and programming, particularly aspects of EW related to high-end warfare.", "U.S. Airborne Electronic Attack Capabilities", "Airborne EW capabilities are a component of U.S. military airpower. Although dedicated U.S. EW aircraft are relatively few in number compared with U.S. fighters, strike fighters, and attack aircraft, they play a role in helping to ensure the combat survivability and effectiveness of other aircraft and friendly forces on the ground.", "DOD's three primary manned EW electronic attack aircraft are the Navy EA-18G Growler, the Air Force EC-130H Compass Call, and the Air Force EC-37B Compass Call Re-Host. A fourth manned aircraft\u2014the F-35 Joint Strike Fighter\u2014has extensive, integrated EW capabilities. DOD's primary airborne electronic attack payloads include the AN/ALQ-99 electronic attack suite, the Next Generation Jammer, and the Miniature Air Launched Decoy-Jammer.", "EW Oversight Issues for Congress", "Congress has continually shown interest in EW, and the decisions it makes regarding EW could affect future U.S. military capabilities and funding requirements. In particular, EW programs pose several potential oversight issues for Congress", "Whether DOD is prioritizing appropriately airborne EW programs in its planning and budgeting relative to other U.S. military EW programs (such as those for U.S. ground forces or Navy surface ships) and to other DOD non-EW priorities. Whether DOD's proposed mix of airborne EW capabilities and investments is appropriate. The evolution of technology and how new technologies can be employed for EW operations. The Air Force's planned rate for procuring EC-37Bs and replacing EC-130Hs."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction1", "paragraphs": ["This report focuses on selected U.S. airborne electronic attack programs. Such programs involve developing and procuring both the aircraft whose primary mission is electronic warfare (EW) and the EW systems that are mounted on U.S. aircraft. The President's FY2020 budget request for the Department of Defense (DOD) seeks funding for a number of airborne EW programs.", "These programs pose a number of potential oversight issues for Congress, and its decisions on these issues could affect future U.S. military capabilities and funding requirements.", "Congress has continually shown interest in EW, and airborne electronic attack in particular. Some Members have formed the EW Working Group, and they routinely discuss improving EW capabilities. The National Defense Authorization Acts over the past several years have included provisions related to EW and electronic attack. Most recently the FY2019 John S. McCain National Defense Authorization Act, discussed the Air Force's acquisition strategy for a new EW attack aircraft as well as a study to catalogue all EW capabilities."], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "Electronic Warfare", "paragraphs": [], "subsections": [{"section_title": "Overview2", "paragraphs": ["Electronic warfare (EW)\u2014sometimes also called electromagnetic maneuver warfare (EMW) \u2014is a component of modern warfare, particularly in response to threats posed by technologically sophisticated potential adversaries such as Russia and China. EW generally refers to operations that use the electromagnetic spectrum (i.e., the \"airwaves\") to detect, listen to, jam, and deceive (or \"spoof\") enemy radars, radio communication systems and data links, and other electronic systems. It also refers to operations for defending against enemy attempts to do the same. More formally, DOD defines electronic warfare as \"military action involving the use of electromagnetic and directed energy to control the electromagnetic spectrum or to attack the enemy.\"", "As shown in Figure 1 , DOD divides EW into electronic warfare support, electronic protection, and electronic attack. Electronic warfare support , sometimes also referred to as electronic support measures (ESM), involves listening to an adversary's radar and radio transmissions in order to detect, locate, and understand how to avoid, jam, or deceive those systems. Electronic protection involves limiting the electromagnetic signatures of one's own military equipment and hardening one's own military equipment against the effects of enemy EW operations. Electronic attack (EA) involves jamming and deceiving enemy radars and radio communications and data links. ", "Developing ever-better EW systems is a component of the overall competition in military capabilities between major military powers. This issue is not frequently discussed publicly in much detail, because the specifics of EW programs tend to be classified and are closely related to intelligence systems and capabilities."], "subsections": []}, {"section_title": "EW in an Era of Renewed Great Power Competition", "paragraphs": ["During the Cold War, EW capabilities supported the overall competition in military capabilities between the U.S.-led NATO alliance and the Soviet-led Warsaw Pact alliance. The end of the Cold War and the shift in the early 1990s to the post-Cold War era\u2014a period that featured reduced tensions between major powers and a strong U.S. military emphasis on countering terrorist and insurgent organizations\u2014may have led to a reduced emphasis in U.S. defense plans and programs related to so-called high-end warfare, meaning high-intensity warfare against technologically sophisticated adversaries.", "In recent years, the shift in the international security environment from the post-Cold War era to an era of renewed great power competition has increased the focus on EW in U.S. defense planning and programming. In particular, attention has been given to aspects of EW related to high-end warfare and to concerns among some observers that the United States needs to strengthen its efforts in EW as part of its overall effort to preserve U.S. qualitative military superiority over potential adversaries such as Russia and China. ", "DOD notes Russia has placed an emphasis on EW in its military modernization effort. For example, Russia reportedly has employed EW as part of its military operations in Ukraine and Syria. DOD similarly states that China recognizes the importance of EW in modern military operations and is developing its EW capabilities as an integral part of its broad-based military modernization effort. As China encourages greater integration between its civil and military technological and industrial bases, its EW capabilities may benefit from the sophistication of its extensive civilian electronics industry."], "subsections": []}, {"section_title": "Relationship of EW to Cyberwarfare", "paragraphs": ["EW emerged in the early and middle decades of the 20 th century with the invention and spread of radio and radar and their use in military operations. It therefore predates cyberwarfare, which emerged decades later with the invention and spread of computers and the internet. Today, some overlap exists between EW and cyberwarfare, though there is a key difference between the two. EW focuses on military operations that use the electromagnetic spectrum against radars and radio communication and data links, while cyberwarfare activities\u2014which occur on a day-to-day basis, as well as during overt conflicts\u2014target computers and servers, and involve significant use of the wired connections between them. EW and cyberwar activities can support one another."], "subsections": []}, {"section_title": "EW as an Element of U.S. Airpower", "paragraphs": ["Although dedicated U.S. EW aircraft are relatively few in number compared with the number of U.S. fighters, strike fighters, and attack aircraft, they play a role in helping to ensure the combat survivability and effectiveness of other aircraft and friendly forces on the ground. EW aircraft detect and jam enemy radars and air defense command-and-control equipment, so that U.S. fighters, strike fighters, attack aircraft, and bombers can more safely penetrate enemy airspace. EA-18G Growlers (discussed below) accompany U.S. fighters, strike fighters, and attack aircraft on missions to penetrate enemy airspace. Other U.S. EW aircraft, such as the EC-130H Compass Call aircraft (discussed below), perform their EW missions from standoff locations in less contested airspace.", "Fifth-generation stealthy U.S. aircraft such as the F-22 Raptor and the F-35 Joint Strike Fighter are less dependent on EW support than are less stealthy, earlier-generation U.S. aircraft. Even F-22s and F-35s, however, still benefit from EW support under certain circumstances. EW aircraft support the Navy's Naval Integrated Fires Counter-Air (NIF-CA) concept and help ensure the combat survivability and effectiveness of less stealthy, earlier-generation U.S. aircraft and friendly forces on the ground."], "subsections": []}]}, {"section_title": "EW Aircraft", "paragraphs": ["Although various U.S. manned and unmanned aircraft perform EW operations, this report focuses on DOD's three primary manned EW electronic attack aircraft: the EA-18G Growler, the EC-130H Compass Call, and the EC-37B Compass Call Re-Host. It also focuses on a fourth manned aircraft, the F-35 Joint Strike Fighter, which has extensive built-in EW capabilities. Each of these four aircraft is discussed briefly below."], "subsections": [{"section_title": "Boeing EA-18G Growler", "paragraphs": ["The Boeing EA-18G Growler ( Figure 2 ) is a Navy carrier-capable EW aircraft. Its primary mission is to detect and jam enemy radars. Among the 60 or more aircraft in an aircraft carrier's embarked air wing, typically four or five are EA-18Gs. These aircraft are also operated by the Royal Australian Air Force (RAAF).", "The EA-18G is the successor to the carrier-capable EA-6B Prowler, which was operated by both the Navy and Marine Corps. The EA-18G achieved initial operational capability (IOC) in September 2009, and EA-18Gs have gradually replaced EA-6Bs. The final operational EA-6Bs, operated by the Marine Corps, were retired in March 2019.", "Unlike the EA-6B, which was a four-seat aircraft, the EA-18G has a crew of two. The EA-6B was an EW variant of the Navy and Marine Corps carrier-capable A-6 Intruder attack plane; similarly, the EA-18G is an EW variant of the Navy and Marine Corps carrier-capable F/A-18F Super Hornet strike fighter.", "The EA-18G is equipped with an airborne electronic attack (AEA) avionics suite that has evolved from the EA-6B's Improved Capability III (ICAP III) AEA system. As discussed below, the EA-18G carries AN/ALQ-99 jamming pods, which are to be replaced by Next Generation Jammer jamming pods. The Navy states that \"the EA-18G's electronic attack upgrades meet or exceed EA-6B Airborne\u2026 Electronic Attack capability to detect, identify, locate and suppress hostile [electromagnetic] emitters; provide enhanced connectivity to National, Theater and strike assets; and provide organic precision emitter targeting for employment of onboard suppression weapons to fulfill operational requirements.\" The Navy further states that", "[t]he EA-18G provides full-spectrum airborne electronic attack (AEA) capabilities to counter enemy air defenses and communication networks, most notably anti-radiation missiles. These capabilities continue to be in high demand in overseas contingency operations, where Growler operations protect coalition forces and disrupt critical command and control links.", "The Air Force does not operate an aircraft directly analogous to the EA-18G. The last such Air Force aircraft was the EF-111 Raven, an EW variant of the F-111 fighter. The Air Force retired the last of its EF-111s in 1998. ", "The Navy states that \"the [EA-18G] inventory objective of 160 aircraft will support ten carrier-based squadrons, five active expeditionary squadrons, and one reserve squadron.\" A total of 163 EA-18Gs were procured through FY2016, including a final procurement of 10 in FY2016. The Department of the Navy does not plan further procurement of EA-18Gs. EA-18Gs, like F/A-18E/Fs, currently are receiving funding for a service life extension; the Growler is expected to be replaced starting in the 2030s."], "subsections": []}, {"section_title": "Lockheed Martin EC-130H Compass Call20", "paragraphs": ["The EC-130H Compass Call ( Figure 3 ) is an EW aircraft based on a modified version of the C-130 Hercules cargo aircraft. The EW system on the aircraft is called the Compass Call system. The Air Force states that the EC-130H \"disrupts enemy command and control communications and limits adversary coordination essential for enemy force management.\" The Compass Call system employs offensive counter-information and electronic attack (or EA) capabilities in support of U.S. and Coalition tactical air, surface, and special operations forces. ", "The EC-130H is operated by a crew of 14, most of whom are assigned to operate the aircraft's EW systems. The EC-130H can be considered a so-called \"low-density, high-demand asset,\" meaning a specialized asset that exists in DOD in relatively low numbers but that DOD uses extensively. A February 2018 press report states that", "[t]he small, 14-aircraft EC-130H fleet has been flying since 1981\u2014and near-constantly in the Afghanistan, Iraq, and Syrian conflicts, because of the unique capability it offers in communications jamming and electronic attack. It has been a key element in the fight against ISIS, an adversary that has adapted high technology to its tactics and strategy\u2026.", "EC-130Hs there have been deployed nonstop since 2002, the longest continuously deployed Air Force unit in the Afghanistan war.", "The EC-130H achieved IOC in 1983. EC-130Hs are being replaced over time by new EC-37B Compass Call Re-Host aircraft (see next section). The Air Force projects in its FY2020 budget submission that it will have 13 EC-130Hs and no EC-37Bs in service at the end of FY2019, and 12 EC-130Hs and one EC-37B in service at the end of FY2020. While EC-130Hs remain in service, the Air Force plans to modernize them to improve their capabilities and reduce their maintenance costs, which have been rising as the aircraft have aged."], "subsections": []}, {"section_title": "EC-37B Compass Call Re-Host Aircraft", "paragraphs": ["Air Force plans call for replacing the service's EC-130Hs over time with a total of 10 new EC-37B Compass Call Re-Host aircraft ( Figure 4 ). ", "The first EC-37B was procured in FY2018, two more were procured in FY2019, and the Air Force's proposed FY2020 budget requests $114.1 million for the procurement of a fourth in FY2020. Air Force plans call for procuring additional EC-37Bs at a rate of one per year until the planned total of 10 is reached. ", "The Air Force's FY2020 budget submission projects that the first new EC-37B will enter the Air Force's inventory by the end of FY2020. The first two EC-37Bs are scheduled to achieve Initial Operational Capability (IOC) in 2023.", "L3 Technologies, a U.S. defense contractor involved in EW programs, is the prime contractor for the EC-37B. The EC-37B is based on the Gulfstream G550 commercial business jet, an aircraft that the Air Force also uses as the basis for its C-37B VIP transport aircraft. The Air Force states that EC-37Bs", "will receive Prime Mission Equipment (PME) from legacy donor EC-130H aircraft, as well as new, upgraded PME\u2026. The re-hosted COMPASS CALL platform will utilize 70% of the PME off of the current airframe without modification; the remaining 30% of PME will be new or modified (repackaged) for the re-host. [Compared to the EC-130H,] the re-hosted COMPASS CALL aircraft will provide increased range, speed, endurance and operating altitude for better stand-off range and survivability. This will enable the USAF to effectively conduct Electronic Attack (EA) in an Anti-Access/Area Denial (A2AD) environment.", "The Air Force's acquisition strategy of replacing the EC-130H fleet by re-hosting their EW systems on new Gulfstream G550 aircraft was a subject of debate in Congress and contract-award protests."], "subsections": []}, {"section_title": "F-35 Joint Strike Fighter", "paragraphs": ["The Lockheed Martin F-35 Joint Strike Fighter ( Figure 5 ) is being procured in three versions for the Air Force (F-35A), Marine Corps (F-35B), and Navy (F-35C). Another CRS report provides an overview of the F-35 program, which is DOD's largest single acquisition program.", "While the F-35's primary missions are air-to-ground combat (i.e., strike operations) and air-to-air combat (i.e., fighter operations), the F-35 has a built-in EW capability that is claimed by Lockheed Martin officials\u2014the prime contractor manufacturing the aircraft\u2014to be significantly greater than that of previous U.S. fighters and attack aircraft. Lockheed officials state that the F-35's EW system, designated AN/ASQ-239 serves as a signals collector system which provides: radar warning, identifies the geolocation of electronic emitters, tracks multiple aircraft simultaneously, provides high-gain (i.e., a highly focused radio antenna), high gain counter measures, and high gain electronic attack through the radar. According to Lockheed officials these EW capabilities are designed to provide: wide-frequency coverage, quick reaction time, high sensitivity and probability of intercept, accurate direction finding, track multiple aircraft, and provide self-protection countermeasures and jamming.", "Lockheed Martin claims that due to the inherent, built-in electronic warfare capabilities the F-35 does not require a dedicated electronic attack aircraft to support it; this would potentially free up other aircraft to perform electronic attack missions to protect less stealthy aircraft. To provide its organic jamming capability the F-35uses its active electronically scanned array (AESA) radar which teamed with advanced jamming algorithm packages, can potentially provide 10 times the jamming power of legacy aircraft. ", " Figure 6 shows the location of EW system-related equipment on the F-35. During a 2018 hearing on the Navy and Marine Corps aviation program review, Lieutenant General Steven Rudder stated that although the Marine Corps was retiring the EA-6B, the Marine Corps' new F-35Bs would have sufficient EW capability for most Marine Corps contingencies."], "subsections": []}]}, {"section_title": "Airborne EW Payloads", "paragraphs": ["DOD's primary airborne electronic attack payloads include the AN/ALQ-99 electronic attack suite, the Next Generation Jammer, and the Miniature Air Launched Decoy-Jammer. Each of these systems is discussed briefly below."], "subsections": [{"section_title": "AN/ALQ-99 Tactical Jamming System (TJS)", "paragraphs": ["The AN/ALQ-99 tactical jamming system ( Figure 7 and Figure 8 ; see also Figure 2 ) consists of a series of electronic jamming pods. The system was originally developed in the 1970s for the EA-6B, and it was also used by the EF-111A. The system has been updated over time and is currently carried by EA/18Gs. The current version of the system, called the ALQ-99F(V), achieved IOC in 1999. Navy plans call for replacing the ALQ-99 with the Next Generation Jammer (see next section). The Navy states that the ALQ-99 \"is the only airborne tactical jamming system in the Department of Defense inventory. [The] ALQ-99 [system] is facing material and technological obsolescence and cannot counter all current, much less future, threats.\""], "subsections": []}, {"section_title": "Next Generation Jammer (NGJ)", "paragraphs": ["As mentioned above, Navy plans call for replacing the ALQ-99 with a new EW system called the Next Generation Jammer (NGJ) ( Figure 9 , Figure 10 , and Figure 11 ). ", "The NGJ is being developed in three increments designed to jam across three radio frequency bands to prevent adversaries from using their communications and radar systems. The first increment, which is to provide EW capability in mid-band frequencies, was previously referred to as Increment 1, but is now called the AN/ALQ-249 system or the Next Generation Jammer\u2014Mid Band (NGJ-MB). The next increment, which is to provide EW capability in low-band frequencies, was previously referred to as Increment 2, is now called the Next Generation Jammer\u2014Low Band (NGJ-LB). The remaining increment, currently called Increment 3, is to provide EW capability in high-band frequencies. DOD states that \"the order of development [of the increments] was determined by the assessed capabilities of the developing threat and shortfalls of the legacy system to counter those capabilities, with Inc 1 [the Increment 1 system] covering the most critical threats.\"", "Raytheon was awarded the contract for developing NGJ-MB. L3 Systems, Northrop Grumman, and Harris were awarded the contract for developing NGJ-LB. The Navy's FY2020 budget submission states that NGJ-MB is scheduled to achieve IOC in the fourth quarter of FY2022.", "The NGJ program has been a subject of congressional oversight for several years. An August 2018 press report states the Navy stalled in its development of the NGJ, however with the renewed focus of \"great power competition,\" particularly with Russia and China, the NGJ has been given increased importance and priority. Frank Kendall, when he served as the Undersecretary of Acquisition, Technology and Logistics decided to accelerate the program.", "The Navy's FY2020 budget submission requests $524.3 million for PE 0604274N in FY2020. The budget submission projects annual funding to decline in subsequent years, to $178.4 million in FY2022 and zero funding thereafter as research and development work on NGJ-MB is completed and NGJ-MB transitions from research and development to procurement. The budget submission estimates the total research and development cost of NGJ-MB at $3,985.0 million (i.e., about $4.0 billion), of which $2,848.2 million (i.e., about $2.8 billion) has been received through FY2019.", "The Navy's FY2020 budget submission requests $6.2 million for PE0604274N\u2014the first procurement funding requested for NGJ-MB. The submission projects that in subsequent years, as procurement of NGJ-MB ramps up, annual funding for this line item would increase to $144.7 million in FY2021 and $534.1 million by FY2024. The submission estimates the total procurement cost of NGJ-MB at $4,830.9 million (i.e., about $4.8 billion).", "The Navy's FY2020 budget submission requests $111.1 million for this PE in FY2020 and projects annual funding to increase in subsequent years, to $241.5 million in FY2024. The submission estimates the total research and development cost of NGJ-LB at $3,499.1 (i.e., about $3.5 billion), of which $178.3 million has been received through FY2019."], "subsections": [{"section_title": "Impact of Next Generation Jammer on Range of EA-18G", "paragraphs": ["Because the NGJ reportedly produces more drag on the EA-18G according to the Navy the Next Generation Jammer has the potential of reducing the operational range of the EA-18G. A November 28, 2018, press report states that the NGJ Mid-band pod produces more drag than the current ALQ-99. Raytheon's proposal for the low-band pod was partially rejected as a result of increased drag over competing designs. These increases in drag have been reported to reduce the operational range of the EA-18G. The specific impact on range is classified."], "subsections": []}]}, {"section_title": "Miniature Air-Launched Decoy (MALD) and Jammer (MALD-J)", "paragraphs": ["DOD states that the Miniature Air Launched Decoy (MALD) and Jammer (MALD-J), also designated ADM-160 ( Figure 12 and Figure 13 ), is designed as a low-cost, expendable vehicle that can replicate the flight and radar signatures of manned aircraft. The MALD-J adds an electronic attack component. According to the DOD \"MALD-J is designed to support an airborne strike force to achieve mission success by jamming enemy radars and air\u2011defense systems by degrading/denying detection of friendly aircraft or munitions.\"", "MALD has a reported range of about 500 nautical miles. It was first developed in the mid-1990s, and more than 2,000 have been produced. A new version, designated MALD-X, is now being developed. An August 2018 press report states that", "MALD-X enhances the modular nature of the mini cruise missile with the ability to accommodate different electronic warfare payloads that are more advanced than those found on MALD-J. What is planned to come out of MALD-X is a networked decoy that can use its adaptive electronic warfare payload to deliver electronic attacks on air defense nodes autonomously or at the direction of operators from a afar in a semi-autonomous fashion.", "A derivative of MALD-J and MALD-X, designated MALD-N, is being developed for use on Navy F/A-18E/F strike fighters."], "subsections": []}]}]}, {"section_title": "Potential Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "Congressional EW Working Group (EWWG)", "paragraphs": ["Given their interest in, and concerns about, U.S. EW capabilities in the era of renewed great power competition, some Members of Congress have met in recent years through the Electronic Warfare Working Group (EWWG). In the 115 th Congress, Representative Bacon introduced the Joint Electromagnetic Spectrum Operations Readiness Act of 2018 ( H.R. 5522 ). This bill would have asked the DOD to", "develop a joint campaign modeling capability to model electromagnetic spectrum effect on operations, assess capabilities and capacities of EW platforms associated with operational plans, and develop an interim and annual report on programs and personnel assigned to EW missions.", "An identical bill in the Senate was referred to the Senate Armed Services Committee."], "subsections": []}, {"section_title": "Airborne EW as a DOD Priority", "paragraphs": ["One potential oversight issue for Congress is whether DOD is giving too little, too much, or the right amount of priority to airborne EW programs in its planning and budgeting relative to other U.S. military EW programs (such as those for U.S. ground forces or Navy surface ships) and to other DOD non-EW priorities, particularly in the context of renewed great power competition and improvements in air defense and EW capabilities by Russia, China, and other potential adversaries.", "Congress may consider developments such as Russia's deployment and sales to other countries of advanced air defense systems. Some observers have expressed concern about Russia's ability to use its advanced air defense systems, such as its S-400 surface-to-air (SAM) missile system, to establish hard-to-penetrate anti-access/area-denial (A2/AD) zones around defended areas in Europe and Middle East, and for countries that purchase Russian-made air defense systems, such as China, to do something similar in other regions. Other observers state that the capabilities of Russia's A2/AD air defense systems have been overrated. The Defense Intelligence Agency states that Russian air defense are among the best in the world, and they continue to develop highly-capable systems which they export to countries like China interested in acquiring long range defensive systems.", "DOD states that China's air force has one of the largest air defense forces, with a series of advanced long-range surface-to-air missiles. These consist of the Russian S-300PMU, the domestically produced CSA-9, and the recently fielded Russian S-400 system.", "An April 2018 press report stated (emphasis added):", "One of the \"wicked problems\" [U.S.] commandos are facing now is in Syria, which [U.S. Army General Tony] Thomas called the \"most aggressive electronic warfare environment on the planet from our adversaries. They are testing us every day, knocking our communications down, disabling our EC-130s , etc.\"", "Another factor Congress may consider is how, in a situation of finite DOD funding, devoting more funding to airborne EW programs would affect funding for other EW priorities, or DOD non-EW priorities, and what the resulting net change would be in overall U.S. military capabilities."], "subsections": []}, {"section_title": "Mix of Airborne EW Capabilities and Investments", "paragraphs": ["Another potential oversight issue for Congress is whether DOD's proposed mix of airborne EW capabilities and investments is appropriate given the current and projected capabilities of potential adversaries such as Russia and China. Specifically, what is DOD's vision by combining specialized tactical EW aircraft such as the EA-18G, standoff EW aircraft such as the EC-130H and EC-37B, strike fighters with embedded EW capabilities such as the F-35, and air-launched decoys and jammers with growing numbers of stealthy fifth-generation F-35s? What evolutions are occurring in U.S. military operational concepts? Is it appropriate, for example, that the Air Force and Marine Corps no longer operate their own specialized tactical EW aircraft, while the Navy continues to operate and invest in the EA-18G and its Next Generation Jammer EW pods? More generally, to what degree do the airborne EW capabilities of the Air Force, Navy, and Marine Corps overlap, and is that overlap appropriate?"], "subsections": []}, {"section_title": "Role of Emerging Technologies", "paragraphs": ["A third potential issue for Congress is how DOD uses advances in technology. Electronic attack platforms have evolved from the manned platforms with relatively large crew sizes, such as the EA-6B Prowler and the EC-130H Compass Call, to the EA-8G Growler with a crew of two and the MALD-J, which does not have crew and is a standoff weapon. Evolving A2/AD environments potentially make traditional stand-in jamming too dangerous for manned aircraft. Therefore, Congress may consider policy for DOD regarding developing platforms that are capable of operating in A2/AD environments. What unmanned EW programs does DOD currently fund? Does DOD plan to develop additional stand-in jamming systems?"], "subsections": []}, {"section_title": "EC-37B Compass Call Re-Host Aircraft Procurement", "paragraphs": ["Another oversight issue for Congress concerns the Air Force's planned quantity and rate for procuring EC-37Bs and replacing EC-130Hs. The Air Force plans to replace 14 EC-130H aircraft with 10 EC-37Bs. The Air Force currently maintains 10 EC-130H Compass Calls for operations, with one aircraft devoted to testing and three additional aircraft in back-up inventory. How does the Air Force plan to use a smaller fleet of aircraft? Would 10 EC-37B aircraft be able to meet operational demands?", "Some Members of Congress have expressed an interest in procuring EC-37Bs more quickly than the Air Force plans, so as to accelerate the replacement of EC-130Hs with EC-37Bs. The committee and conference report language bearing on this issue for the John S. McCain National Defense Authorization Act for Fiscal Year 2019 and the FY2019 DOD appropriations act appear below."], "subsections": [{"section_title": "Appendix. Recent Congressional Action", "paragraphs": ["John S. McCain National Defense Authorization Act for Fiscal Year 2019 ( H.R. 5515 / S. 2987 / P.L. 115-232 )", "The House Armed Services Committee, in its report ( H.Rept. 115-676 of May 15, 2018) on H.R. 5515 , the FY2019 National Defense Authorization Act, stated that ", "[t]he committee supports the Air Force's efforts to recapitalize the aging EC\u2013130H Compass Call fleet with the more capable EC\u201337 type aircraft. The committee notes that the Air Force must first comply with the National Defense Authorization Act for Fiscal Year 2017 (Public Law 114\u2013328) and the National Defense Authorization Act for Fiscal Year 2018 (Public Law 115\u201391) before it can carry on with the transition plan. The Air Force requested $108.1 million for fiscal year 2019 for one EC\u201337. The committee is concerned that the Air Force plan to procure one aircraft per year over 10 years in order to recapitalize this fleet is not the most efficient way to move the capability to the field quickly, and may put the Compass Call mission at unacceptable risk of mission failure. Therefore, the committee directs the Secretary of the Air Force to provide a briefing to the House Committee on Armed Services by February 1, 2019, on the Compass Call transition plan. This plan should include:", "(1) courses of action to accelerate the recapitalization of the EC\u2013130H fleet and Baseline 4 development and deployment for incoming EC\u201337 aircraft;", "(2) attendant timelines for each course of action;", "(3) cost estimates for each course of action;", "(4) recommended course of action and a plan to manage both fleets while supporting combatant commander requirements; and", "(5) an assessment of the potential for future cooperative development and procurement of EC\u201337B Compass Call aircraft by the Royal Air Force of the United Kingdom and the Royal Australian Air Force in a way the leverages the best practices of the RC\u2013135 cooperative program arrangement with the Royal Air Force of the United Kingdom. (Pages 23-24)", "The Senate Armed Services Committee, in its report ( S.Rept. 115-262 of June 5, 2018) on S. 2987 , the John S. McCain National Defense Authorization Act for Fiscal Year 2019, stated the following:", "The committee supports the Air Force's efforts to recapitalize the aging EC\u2013130H Compass Call fleet with the EC\u201337 type aircraft. The committee notes that before it can carry on with the transition plan, the Department of Defense must first comply with the related provisions in the National Defense Authorization Act for Fiscal Year 2017 (Public Law 114\u2013328) and the National Defense Authorization Act for Fiscal Year 2018 (Public Law 115\u201391). While the committee notes that Department has submitted the certification required by the National Defense Authorization Act for Fiscal Year 2018 (Public Law 115\u201391), delays in satisfying the requirement has led to a work stoppage on the program lasting at least six weeks. The committee is concerned about the potential for further work stoppages should the Secretary of the Air Force fail to make a timely determination that the EC\u201337B has a high likelihood of meeting combatant requirements, as required by the National Defense Authorization Act for Fiscal Year 2017 (Public Law 114\u2013328). The committee encourages the Secretary of the Air Force to make a timely determination for this requirement to avoid further program delays and cost overruns.", "Therefore, the committee directs the Secretary of the Air Force, not more than 60 days after the determination required by the National Defense Authorization Act for Fiscal Year 2017 (Public Law 114\u2013328) is made, to provide a briefing to the congressional defense committees on the Compass Call transition plan. This plan should include:", "(1) Courses of action to accelerate the recapitalization of the EC\u2013130H fleet and Baseline 4 development and deployment for incoming EC\u201337 aircraft;", "(a) attendant timelines for each course of action;", "(b) cost estimates for each course of action; and", "(2) Recommended course of action and a plan to manage both fleets while supporting combatant commander requirements. (Pages 40-41)", "FY2019 DOD Appropriations Act (Division A of H.R. 6157 / P.L. 115-245 )", "The House Appropriations Committee, in its report ( H.Rept. 115-769 of June 20, 2018) on the FY2019 DOD appropriations act ( H.R. 6157 ), stated the following:", "The [committee's] recommendation [of FY2019 procurement funding for the program] includes an increase of $194,000,000 above the budget request to procure and modify one additional EC\u201337B Compass Call aircraft, with the expectation that such funds will allow the Air Force to accelerate the fielding of the fourth such aircraft to meet combatant commander needs and mitigate performance concerns regarding the legacy EC\u2013130H fleet. The Committee recommends that the Secretary of the Air Force consider increasing the procurement of EC\u201337B aircraft to two per year if such a pace of recapitalization can be achieved without unduly disrupting the operational availability of Compass Call capability for the combatant commanders. (Page 188)", "In final action on the FY2019 DOD Appropriations Act (Division A of H.R. 6157 / P.L. 115-245 of September 28, 2018), Congress increased the requested amount for procurement of new EC-37Bs by $108 million for \"Program increase - accelerate fourth EC-37B aircraft.\""], "subsections": []}]}]}]}}
{"id": "R45521", "title": "Department of Defense Use of Other Transaction Authority: Background, Analysis, and Issues for Congress", "released_date": "2019-02-22T00:00:00", "summary": ["The Department of Defense (DOD) obligates more than $300 billion annually to buy goods and services, and to support research and development. Most of these acquisitions are governed by procurement statutes and regulations found in Title 10 (and parts of other select titles) of the United States Code, the Federal Acquisition Regulation (FAR), and the Defense Federal Acquisition Regulation Supplement.", "Under certain circumstances, DOD can enter into an other transaction (OT) agreement instead of a traditional contract. OT agreements are generally exempt from federal procurement laws and regulations. These exemptions grant government officials the flexibility to include, amend, or exclude contract clauses and requirements that are mandatory in traditional procurements (e.g., termination clauses, cost accounting standards, payments, audit requirements, intellectual property, and contract disputes). OT authorities also grant more flexibility to structure agreements in numerous ways, including joint ventures; partnerships; consortia; or multiple agencies joining together to fund an agreement encompassing multiple providers.", "Other transaction agreements are legally binding contracts; they are referred to as agreements to distinguish them from the traditional procurement contracts governed by the FAR and procurements laws. Other transaction authorities are set forth in two sections of law:", "10 U.S.C. 2371\u2014granting authority to use OTs for basic, applied, and advanced research projects. 10 U.S.C. 2371b\u2014granting authority to use OTs for prototype projects and follow-on production. Under this authority, a prototype project can only be conducted if at least one nontraditional defense contractor significantly participates in the project; all significant participants are small businesses or nontraditional defense contractors; at least one-third of the total cost of the prototype project is provided by nongovernment participants; or the senior procurement acquisition official provides a written justification for using an OT. Follow-on production can only be conducted when the underlying prototype OT was competitively awarded, and the prototype project was successfully completed.", "OTs have the potential to provide significant benefits to DOD, including", "attracting nontraditional contractors with promising technological capabilities to work with DOD, establishing a mechanism to pool resources with other entities to facilitate development of, and obtain, state-of-the-art dual-use technologies, and offering a unique mechanism for DOD to invest in, and influence the direction of, technology development.", "A number of analysts warn that along with the potential benefits come significant risks, including potentially diminished oversight and exemption from laws and regulations designed to protect government and taxpayer interests.", "In FY2017, DOD obligated $2.1 billion on prototype OT agreements, representing less than 1% of contract obligations for the year. However, the use of OTs is expected to grow at a rapid pace, due in part to recent statutory changes expanding other transaction authorities.", "A number of analysts and officials have raised concerns that if DOD uses OTs in ways not intended by Congress\u2014or is perceived to abuse the authority\u2014Congress could clamp down on the authority. Generally, DOD lacks authoritative data that can be used to measure and evaluate the use of other transaction authorities."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Department of Defense (DOD) obligates more than $300 billion annually to pay for goods and services (including research and development). Most of these acquisitions are governed by numerous statutes and regulations found in Title 10 of the United States Code, the Federal Acquisition Regulation (FAR), and the Defense Federal Acquisition Regulation Supplement (DFARS). DOD can also enter into certain transactions without triggering most of the standard acquisition statutes and regulations by using other transaction (OT) authorities. In recent years, Congress has expanded these authorities and DOD is increasingly using OTs for research, prototyping, and production. ", "This report examines (1) how OTs work, (2) why they were established, (3) potential benefits and risks of using OTs, and (4) whether there are data available against which to measure their effectiveness. Appendix A provides a legislative history of DOD's other transaction authorities."], "subsections": []}, {"section_title": "Background", "paragraphs": ["On October 4, 1957, the Soviet Union triggered a space race with the United States when it successfully launched Sputnik I into orbit, becoming the first nation to send a man-made satellite into space. Congress, concerned that the United States was falling behind in space, held a series of hearings on an \"emergency\" effort to respond to the Soviet launch of Sputnik. At the same time, a bill was introduced in the Senate to create an agency with the means to quickly and efficiently develop a national space program. These efforts led to passage of the National Aeronautics and Space Act of 1958 (Space Act, P.L. 85-568) in July 1958, which established the National\u00a0Aeronautics and Space\u00a0Administration (NASA).", "In an effort to give the new agency \"the necessary freedom to carry on research, development, and exploration ... to insure the full development of these peaceful and defense uses without unnecessary delay,\" the Space Act granted NASA broad authority to \"enter into and perform such contracts, leases, cooperative agreements, or other transactions as may be necessary\" to accomplish its mission of research and exploration (emphasis added).", "Congress extended different variations of OT authorities to other select agencies, granting the authority to DOD in the FY1990 & 1991 National Defense Authorization Act (NDAA, P.L. 101-189 ). For an analysis of which non-DOD agencies can use OTs and how the authorities differ by agency, see Appendix B . "], "subsections": [{"section_title": "What Are Other Transaction Authorities?", "paragraphs": ["Other transactions are legally binding contracts that are generally exempt from federal procurement laws and regulations such as the Competition in Contracting Act and the Federal Acquisition Regulation. In contrast, traditional procurement contracts must adhere to the procurement rules set forth in statute and regulation. ", "Generally, DOD can use other transaction authorities for three purposes:", "1. conduct research, 2. develop prototypes, or 3. contract for follow-on production of a successful prototype project.", "DOD's other transaction authorities are found in two sections of law:", "10 U . S . C . 2371 grants DOD the authority to use other transactions to carry out basic, applied, and advanced research projects. DOD regulations treat these projects as financial assistance instruments, not as contracts.", "10 U . S . C . 2371b permits the use of other transactions to conduct prototype projects and follow-on production. ", "OTs can only be used for prototypes if one of the following applies:", "at least one nontraditional defense contractor significantly participating in the project; all significant participants are small businesses or nontraditional defense contractors; at least one-third of the total cost of the prototype project is provided by nongovernment participants; or the senior procurement acquisition official provides in writing an explanation of the exceptional circumstances justifying an OT.", "Follow-on production can only be conducted when ", "the underlying prototype OT was competitively awarded, and the prototype project was successfully completed. ", "10 U . S . C . 2373 , while generally not considered an o ther t ransaction authority , allows DOD to buy certain items and designs for experimental or test purposes without having to adhere to the procurement laws set forth in Chapter 137 of Title 10. "], "subsections": [{"section_title": "How Do Other Transactions Work?", "paragraphs": ["OT authorities grant government officials the flexibility to include, amend, or exclude contract clauses and requirements that are mandatory in traditional procurements (e.g., termination clauses, payments, audit requirements, intellectual property, and contract disputes). ", "OTs can be structured in numerous ways, including a direct relationship between a single government agency and a single provider; joint ventures; partnerships; multiple agencies joining together to fund an agreement encompassing multiple providers; or through a consortium. "], "subsections": [{"section_title": "Consortia", "paragraphs": ["One common application of OTs is to forge an agreement with a consortium. A consortium is an organized group\u2014 it can consist of nonprofits, academic institutions, or contractors\u2014 focusing on a specific technology area. Generally, a lead entity coordinates and directs a consortium's activities. Consortia have consisted of a handful to as many as 1,000 members. ", "Consortia can act to facilitate multiparty agreements whereby each member is akin to its own co-prime contractor with the government. In such a case, the government articulates the need or problem it is trying to solve, and the various members of the consortium can submit white papers for consideration. In this scenario, OTs can serve as an efficient way for all members to send unsolicited technology suggestions and solutions to solve a defined challenge. ", "Consortia can also be used to develop an ecosystem of entities working together on a project, whereby members of a consortium pool resources and collaborate with DOD. A number of analysts argue that using consortia in this way gives the federal government a unique ability to leverage and pool the technological expertise and innovation of multiple entities in a particular sector, thereby strengthening and advancing a sector of the industrial base that may have defense applications. Seen like this, OTs can be considered a mechanism to promote defense technology and the defense industrial base, with the potential added benefit of advancing the domestic commercial technology base. Some analysts, however, have argued that many of today's consortia do not operate as collaborative organizations, but function more like managed multiple award task order contracts. These analysts argue that DOD should seek to foster more collaboration in consortia.", "Some analysts have argued that consortia reduce competition, since only members of the consortium under contract can participate in the project or submit white papers for consideration and funding. Others counter that even when an OT is signed with a single consortium, competition could be increased, since all members of the consortium are notified of the opportunity (expanding the pool of potential competitors aware of the opportunity), and the OT will foster internal competition among consortium members."], "subsections": []}, {"section_title": "What Laws and Regulations Apply to OT?", "paragraphs": ["OTs are not procurement contracts and thus are exempt from numerous procurement statutes and regulations, including the statutes in Chapter 137 of Title 10 ( Procurement Generally ). They are, however, bound by standard contract and other select laws and regulations. ", "Examples of laws that do not apply include the Truth in Negotiations Act, Competition in Contracting Act, Cost Accounting Standards, Contract Disputes Act, and select intellectual property statutes such as the Bayh-Dole Act. A number of these laws are aimed at oversight and protecting the interests of taxpayers.", "While the Competition in Contracting Act does not apply, 10 U.S.C. 2371b requires that research and prototype projects be competed \"to the maximum extent practicable.\" DOD policy mirrors the statutory language, stating \"[C]ompetition is a good thing. It helps keep prices low, quality high, and gives the government leverage in negotiations.\" To the extent that OTs induce nontraditional contractors to work with DOD, OTs can be viewed as promoting competition among (and within) entities that would not normally compete for DOD contracts. However, the lack of explicitly defined competition requirements could result in less competition for certain OTs.", "OTs are not free from all legislative and regulatory requirements. Generally, statutes and regulations that are not procurement-specific apply, including the Trade Secrets Act, (18 U.S.C. 1905); the Economic Espionage Act (18 U.S.C. 1831-39); elements of the Freedom of Information Act (5 U.S.C. 552); and fiscal and property laws, such as the Anti-deficiency Act (31 U.S.C. 1341); and the Tucker Act (28 U.S.C. 1491). As can be seen by these citations, many of these statutes are not located in the procurement titles of Title 10 or Title 41."], "subsections": []}, {"section_title": "Protests and GAO Audits", "paragraphs": ["The Government Accountability Office (GAO) has held that OTs are not procurement contracts, and therefore it will not review protests of such an award or solicitation. However, GAO will review \"a timely protest that an agency is improperly using its other transaction authority.\" OT contracts can be protested to the Court of Federal Claims, although there is debate as to the extent of the court's jurisdiction. ", "The limited protest jurisdiction of GAO is appealing to many government procurement officials. One senior Air Force official reportedly stated that OTs are \"just so much faster and so much more attuned to getting something that we want today and not have to spend a couple of years going through a protest, going through this huge process to get something we wanted two years ago.\" It generally does not take that long to go through a GAO protest. By statute, GAO must issue an opinion on a protest within 100 days of the protest being filed, and 70% of cases are resolved in less than 60 days. ", "While exempt from GAO bid protests, OTs are not exempt from GAO audits. Generally, OTs that include government payments exceeding $5 million are required to include a clause granting GAO the right to examine the records of any related party. However, this requirement has a number of limitations."], "subsections": []}]}, {"section_title": "Potential Benefits and Risks of Using OTs", "paragraphs": ["Used properly, OTs can provide significant benefits to DOD. Along with the potential benefits come certain risks."], "subsections": [{"section_title": "Potential Benefits", "paragraphs": ["Some of the potential benefits to OTs highlighted by analysts and officials include", "providing a mechanism to pool R&D resources with industry to facilitate development of, and obtain \"the latest state-of-the-art, dual use technologies\"; attracting nontraditional contractors with promising technological capabilities to work with DOD; lowering costs by eliminating requirements associated with the Federal Acquisition Regulations (i.e., costs associated with required reporting and administrative activities) or sharing costs with industry; and \"speeding up\" the acquisition process. ", "A number of experts argue that OTs provide a unique mechanism for DOD to invest in, and influence the direction of, technology development even when the end result is not directly tied to a military capability. As one observer noted, the real benefit to DOD may be that ", "[t]he R&D has been accomplished and is available to the technical and scientific communities. As a result, a subsequent phase of research can begin or a particular approach can be demonstrated to be of no value.", "Some argue that OTs have particular import today. Drawing parallels to the space race, these analysts argue that DOD is engaged in a defense technology race. According to the 809 Panel:", "DoD is now in a period during which the time a particular technology is a dominant force on the battlefield is getting increasingly shorter, disruptive technologies are emerging at a faster pace, and these technologies are more widely dispersed\u2026In a world with rapidly changing technology, time is a valuable resource that must not be taken for granted. It is difficult to predict what capabilities DoD will need 5 to 10 years from now\u2014biotechnology, nanotechnology, artificial intelligence, robotics, or a new technology area not even known today. It also is unclear on what plane the military will conduct warfare\u2014traditional battlefields, space, cyberspace, or some other domain. The current acquisition system lacks the agility needed to adapt to new paradigms.", "These analysts argue that OTs and similar rapid acquisition authorities are critical for DOD to compete in such a fast-paced global environment where technology and innovation are no longer driven by DOD, but by industry and foreign competitors. In 1960, the United States accounted for 69% of global R&D, with U.S. defense-related R&D alone accounting for more than one-third of global R&D. The federal government funded approximately twice as much R&D as U.S. business. However, from 1960 to 2016, the U.S. share of global R&D fell to 28%, and the federal government's share of total U.S. R&D fell from 65% to 24%, while business's share more than doubled from 33% to 67%. As a result of these global, national, and federal trends, federal defense R&D's share of total global R&D fell to 3.7% in 2016. ", "Given the shift in the global R&D landscape, and the diminishing influence of DOD as a market mover, analysts suggest that the current procurement system is overburdened by regulations and bureaucratic processes that slow the system, increase costs, and dissuade companies from doing business with DOD. In contrast, OTs are viewed as faster, attracting companies that would otherwise forgo working with DOD and promoting broader investment in critical defense capabilities. As one analyst wrote:", "OTAs are currently the only way to remove the barriers necessary to get these nontraditional sources of innovation to do business with the military. Properly constructed, OTAs help speed up the process, respect a company's IP through negotiation rather than regulatory fiat, and result in contracting under commercial terms and conditions.", "Congress also appears to have shifted its view on appropriate use of other transactions. In the FY1999 conference report, Congress stated that", "[OT] authority should only be used in the exceptional cases where it can be clearly demonstrated that a normal contract or grant will not allow sufficient access to affordable technologies.", "By comparison, in the FY2018 NDAA, Congress expanded OT authorities and stated the following: ", "In the execution of science and technology and prototyping programs, the Secretary of Defense shall establish a preference, to be applied in circumstances determined appropriate by the Secretary, for using transactions other than contracts, cooperative agreements, and grants."], "subsections": []}, {"section_title": "Potential Risks", "paragraphs": ["Along with the potential benefits come potential risks, including that of diminished oversight and exemption from laws and regulations designed to protect government and taxpayer interests. Some analysts, while acknowledging the important role of OTs, raise concerns over transparency and how these agreements are being employed. As one industry official stated, OTs are a contracting method, not a substitute for good acquisition practices. Discussing a particular OT for cloud services that was protested and ultimately cancelled by DOD, one observer argued", "The cloud contract provides a teachable moment for procurement reform-minded officials in the Pentagon and Capitol Hill. The problem was not with the OTA mechanism, which remains an essential element of reforming Pentagon procurement. Rather, the problem was with a lack of transparency with how the mechanism was employed. ", "Scott Amey, general counsel of the Project on Government Oversight, cautioned", "We have to seriously consider how we are using [OTs]; whether we are using them as intended, whether we are getting the goods and services that we really want and need, whether we are getting them at the best cost and process, and we are using this procurement vehicle as a way to just circumvent the rules and have contractors not have the administration and oversight they need to hold them accountable. I'm just afraid this is going to result in a lot of waste, fraud, and abuse in the future. ", "Congress has expressed repeated concerns that OTs could be used to circumvent congressional intent. In the FY1999 NDAA, the committees emphasized that the authority should only be used in a limited manner. The conference report stated the following:", "The conferees are especially concerned that such authority not be used to circumvent the appropriate management controls in the standard acquisition and budgeting process.", "Congress echoed a similar concern in the FY2019 NDAA. According to the House report:", "The committee also urges the Department to reiterate through established guidelines that OTA is not a means for circumventing appropriate use of the Federal Acquisition Regulations, and that full and open competition should be used to the maximum extent possible to maintain a sense of integrity, fairness, and credibility in the Federal Procurement process. ", "Other transactions are also exempt from many of the socioeconomic policies put in place by Congress to promote public policies, including some Buy America requirements. Some analysts have raised concerns that OTs are a way to circumvent many of the public policies enshrined in the acquisition process. ", "A number of analysts and officials have raised concerns that if DOD uses OTs in ways not intended by Congress\u2014or is perceived to abuse the authority\u2014Congress could clamp down on the authority. Under Secretary of the Army Ryan McCarthy reportedly stated that the military department is \"trying to be very judicious about this authority so we don't lose it.\" ", "Some analysts argue that Congress is already clamping down on the use of OTs. These analysts point to language in the FY2019 NDAA and FY2019 appropriations legislation ( P.L. 115-245 ) requiring additional reporting and notification (see Appendix A ). Such notification and reporting requirements, however, are not new; when Congress expanded OT authorities in the past, reporting and notification requirements were commonly included. The reporting requirements may also be a result of congressional frustration with a lack of transparency and data on how DOD uses OTs."], "subsections": []}]}]}, {"section_title": "DOD Currently Lacks Sufficient Data to Measure and Evaluate the Use of Other Transaction Authority", "paragraphs": ["DOD lacks authoritative data that can be used to assess OT effectiveness and better understand broader trends associated with these agreements. The most frequently cited source for such data is the Federal Procurement Data System-Next Generation (FPDS-NG), which is the primary source for tracking data on contract obligations, including other transactions for prototypes and follow-on production. FPDS-NG is configured to track data on cost-sharing, other transaction award type, and prevalence of nontraditional contractors. Obligations connected to OTs for research are tracked by the Defense Assistance Awards Data System, which is primarily used to track grants and cooperative agreements. This bifurcation of how OT data are tracked makes it more difficult to get a consolidated view of OT data. According to DOD, all OT data will be reported through FPDS-NG starting in late 2019. ", "The procurement data in FPDS-NG are not fully reliable. There are quality issues relating to accuracy, completeness, and timeliness of data. CRS reviewed FPDS-NG data for prototype OT agreements signed or modified between FY2015 and FY2017 and found similar data inconsistencies. DOD officials acknowledge that they do not have sufficiently reliable data upon which to conduct analysis on the use of OTs and are taking steps to try to improve the data. The analyses below reflect CRS's effort to analyze DOD's use of other transaction authority based on the best available data. "], "subsections": [{"section_title": "How Often Are OTs used?", "paragraphs": ["According to FPDS-NG, in FY2017, DOD obligated $2.1 billion\u2014and received $360 million in cost-share contributions\u2014on prototype other transaction agreements, representing less than 1% of DOD's total FY2017 contract obligations (approximately $320 billion).", "Despite the small percentage of obligations, OTs are growing quickly and are expected to continue to grow at a rapid pace. From FY2013 to FY2017, the number of new prototype agreements increased from 12 to 94, an increase of over 650% (see Table 1 ). DOD's Defense Innovation Unit (DIU, formerly known as the Defense Innovation Unit Experimental, or DIUx) was involved with approximately half of the prototype agreements executed in 2017. DOD officials have stated their intent to further increase the department's use of OTs. Officials say that this increase is due to Congress expanding the statutory authority. ", "The Army executed more than 66% of the prototype OT agreements between FY2013 and FY2017, often on behalf of other military departments and components (see Table 2 ). Army Contracting Command-New Jersey at Picatinny Arsenal executes many of these agreements. DIU currently uses Picatinny Arsenal to execute all of its other transaction agreements. "], "subsections": []}, {"section_title": "Are OTs Attracting Nontraditional Defense Contractors and Entities?", "paragraphs": ["A number of private sector companies do not pursue federal government contracts because they are unwilling to forfeit intellectual property rights or adhere to some of the procurement regulations. One of the goals of OTs is to expand the defense marketplace by creating a mechanism for access to technologies and services of companies that would not otherwise work with DOD, particularly startups and companies developing innovative technology. As one industry representative stated:", "Because they are \"outside\" the FAR, OT agreements do not require such cumbersome oversight and audit requirements such as those imposed by the Truth in Negotiations Act, cost and pricing data or an expensive Cost Accounting System (CAS) qualified financial system. CAS compliant financial systems can cost a company millions of dollars to implement and maintain\u00a0\u2014 and are therefore a significant, if not potentially fatal, barrier to government market entry for startups and small, innovative companies. These requirements tend to reinforce the \"legacy advantage\" of large traditional contractors, who can afford to hire and staff these requirements with large staffs of accountants and lawyers.", "A number of nontraditional companies told CRS that they are more likely to work with DOD because of the department's other transaction authorities.", "Despite these claims, some observers question whether OTs are effectively bringing nontraditional contractors into the defense marketplace. A DOD Inspector General report examining other transactions from FY1994 to FY2001 found that OTs did not attract significant numbers of nontraditional defense contractors to do business with DOD. The report found that of the 209 prototype agreements examined, traditional defense contractors received 95% of the $5.7 billion in funds awarded.", "A recent analysis of FPDS-NG data by Federal News Network had similar findings. According to the report, from FY2015 to FY2017, while nontraditional defense contractors were awarded most of the new OTs (66% vs. 33% for traditional defense contractors), the dollar value of the OTs favored traditional contractors ($20.8 billion vs. $7.4 billion for nontraditional contractors). ", "Some observers have questioned the accuracy of the data published by Federal News Network. According to Charlie McBride, president of Consortium Management Group (which manages two consortia working with DOD through OTs), 88% of the total dollar value of awards to CMG Group has gone to nontraditional prime contractors, and nontraditional entities have participated in the remaining 12%. ", "This debate highlights the lack of authoritative data on OTs. The currently available data may not accurately reflect the extent to which nontraditional contractors are engaged in OT agreements. FPDS-NG does not collect data regarding subcontractors or consortia composition, making it difficult to determine the nature and extent to which nontraditional defense contractors and entities may be working under OT agreements with DOD directly or as subcontractors."], "subsections": []}, {"section_title": "Are OTs Fostering Collaborative Research and Sharing of Resources Between DOD and the Private Sector?", "paragraphs": ["When Congress extended OT authority to DOD, it authorized inserting a clause requiring a person or entity to make payments to DOD as a condition of receiving support under the agreement. Such funds were to be merged into an account dedicated to support DARPA advanced research projects. The intent of this provision was to permit DARPA to \"recoup the fruits of such arrangements, when there is a 'dual use' potential for commercial application\" and reinvest the funds to develop other technologies. In addition to the recoupment authority, DOD can share costs with other parties under an OT. Using this approach, the amount of each party's share is negotiated and incorporated into the agreement. ", "Congress believed that OTs and cooperative agreements were ideal vehicles for promoting DOD-industry collaboration in developing dual-use technologies. For example, the FY1992 & 1993 NDAA ( P.L. 102-190 ) authorized DOD to enter into cooperative and other transaction agreements to develop critical dual-use technologies as set forth in the Defense Critical Technologies Plan. According to the Senate report:", "... the United States tends to underinvest in dual-use technologies. National security requirements alone often do not justify major DOD support, and market prospects alone often appear to be too long-term or high risk to justify US industry carrying the entire development burden.... The committee encourages use of cooperative agreements and other transactions in lieu of grants or contracts.... The provision would require that at least 50 percent of funding over the life of a partnership derive from non-federal sources but would allow for a smaller industry share at the start.", "In the 1990s, some DARPA OTs required participants to share costs because the types of work completed generally involved R&D that was mutually beneficial to government needs and industry commercial goals. In certain instances, present-day OTs have cost-sharing requirements that foster collaborative research. Some analysts believe that DOD is not always realizing all the benefits that OTs have to offer, such as sufficiently leveraging private capital or forming true consortia of multiple parties pooling resources. Some of these analysts believe that DOD does not sufficiently use consortia to leverage private investment through the pursuit of collaborative, mutually beneficial, dual-use technologies. ", "Some observers argue that as the legislation on OTs has evolved, the cost-sharing provision for prototype projects has come to create an unfair playing field biased against traditional defense contractors. For prototype projects, traditional contractors generally are required to assume one-third of costs whereas nontraditional defense contractors and small businesses generally do not have to cost share. From a fairness perspective, these observers argue that traditional contractors should not have a mandatory cost share. These observers also point out that some nontraditional defense contractors are companies with billions of dollars of revenue that should not be granted a competitive cost advantage. Putting traditional defense contractors at a competitive disadvantage could deny DOD access to those companies with the most experience working on defense products, potentially depriving the military of access to leading defense-related research and technology. ", "Other observers argue that the cost share as currently structured is appropriate: traditional defense contractors hold a significant competitive edge in their understanding of, and have the systems in place to manage, traditional contracts. In contrast, nontraditional and small businesses, which generally cannot compete with the traditional defense contractors, need the exemption from the cost-share requirement to be able to work with DOD. These observers also argue that traditional contractors are awarded the majority of dollars obligated to OTs, proving how difficult it is for nontraditional suppliers to break into the defense marketplace. Additionally, traditional contractors could avoid the cost-sharing requirement by teaming with a nontraditional contractor. ", "DOD has not effectively tracked data on cost sharing. A 2017 report to Congress indicated that in FY2016 DOD obligated $1 billion for prototype agreements and received $68 million in cost-share contributions. A CRS review found numerous concerns with the data underlying the report, and with DOD's analytical conclusions. See Appendix C for further discussion."], "subsections": []}, {"section_title": "Are OTs Being Competed?", "paragraphs": ["A number of analysts and industry officials have raised concerns that DOD could use OTs to avoid competitions, as OTs are exempt from the Competition in Contracting Act. According to statute, follow-on production using other transaction authority can only be awarded if the underlying R&D agreement was competed. In addition, 10 U.S.C. 2371b states that \"to the maximum extent practicable\" OTs must be competed.", "Determining whether OTs are being used to circumvent competition requires a two-step analysis: ", "1. Are OTs competed less often that traditional contracts? 2. Is there a benefit to these OTs being competed?", "Available FPDS-NG data suggest that DOD is broadly complying with 10 U.S.C. 2371b's competition mandate. Between FY2013 and FY2017, approximately 89% of all new OT prototype agreements were competed in some fashion."], "subsections": []}, {"section_title": "Are OTs Faster?", "paragraphs": ["Many observers and analysts believe that OT agreements can be executed substantially faster, sometimes in a matter of weeks, compared to the months or years it typically takes to execute traditional contracts. Based in part on this belief, some officials and analysts are touting OTs as a new model for conducting acquisitions and the answer to many of the problems in defense acquisition. These analysts argue that in a world of increasingly fast technology development, DOD acquisitions must go faster or risk being left behind. ", "Many acquisition professionals argue that OT contracts are not inherently faster than traditional contracting; instead, they are executed faster because they are not encumbered by the reviews, protests, and bureaucratic layers that have been overlaid on traditional contracting. According to these officials, OTs take just as long as traditional contracts if the same execution and oversight processes are applied. And because all terms are negotiable, complex negotiations could make OTs take longer to execute than traditional contracts that have required, nonnegotiable conditions. The Other Transactions Guide states", "The OT award process will not always be faster than the traditional procurement processes and sometimes can be as long or longer. The speed of award is tied to many factors, many of which are internal to the organization. ", "DOD has not tracked data on the relative time it takes to execute OTs vs. traditional contracts, making it impossible to objectively assess these claims. "], "subsections": []}, {"section_title": "What Is the Role of the Workforce in Executing OTs?", "paragraphs": ["Analysts and officials generally agree that the workforce plays a critical role in determining the success or failure of an acquisition. Because there are fewer predefined requirements, OTs can be more difficult to negotiate than traditional contracts, putting DOD at greater risk of not getting what it wants at a reasonable price. The complexity and difficulty of negotiations is particularly high when there are intellectual property/patent rights issues, as is the case with most OTs. Given these challenges, OTs often require more experienced and capable government representatives to ensure implementation of agreements that are in the government's best interest. ", "Some analysts question the extent to which the workforce is sufficiently trained and equipped to negotiate OTs. In response to this concern, in the FY2018 NDAA, Congress required workforce education and training for OTs, and required DOD to establish a cadre of intellectual property experts to advise, assist, and provide resources to program offices that are developing intellectual property strategies for contracts and agreements (see Appendix A ). DOD officials acknowledge that more training and education is required.", "Given the complexity of OTs and the limited extent to which they are used, some analysts and industry officials suggested that there may be a benefit to establishing a centralized office within DOD responsible for executing or overseeing all other transaction agreements. Such a structure could help ensure that those members of the acquisition workforce engaged in other transactions are sufficiently experienced, trained, and qualified. "], "subsections": []}]}, {"section_title": "DOD Efforts to Improve the Use of OTs", "paragraphs": ["A number of analysts have argued that DOD should take steps to improve its use of OTs. Many of these analysts have suggested that ", "data are not consistently and accurately tracked, regulations and guidance on when and how to use OTs are vague or insufficient, and the workforce is not sufficiently prepared to effectively use OTs.", "A number of officials have acknowledged these shortcomings and DOD is reportedly taking steps to address them. For example, in December 2018, DOD issued an updated Other Transactions Guide , a comprehensive guide containing best practices, case studies, and a clarification of myths related to other transaction authorities. In addition, Defense Acquisition University developed new course materials addressing OTs and is working to expand its offerings of relevant training and classes. However, numerous acquisition officials question whether it is possible, or even desirable, to try to quickly implement training aimed at preparing the thousands of DOD acquisition officials to execute OTs. Some of these officials have suggested it might be appropriate to only allow a limited and vetted number of acquisition professionals to be OT agreements officers. "], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "How Far Should OT Authority Extend?", "paragraphs": ["Some argue that OTs are just one \"tool in the tool box,\" appropriate for only specific types of contracts, and should not be used to avoid the statutory and regulatory framework or to try to accelerate the process just for the sake of speed. Others have suggested that OTs should be used to cut through bureaucracy, speed up the acquisition process, avoid regulations and bid protests, and perhaps eventually supplant the regular FAR-based contracting process. Given the benefits and risks associated with OTs, questions for Congress include the following:", "1. To what extent and in what circumstances do the potential benefits of OTs in terms of cost, schedule, and added capabilities outweigh concerns over potential fraud, waste, abuse, diminished oversight, and other public policy objectives? 2. Should OT authorities be extended further, curtailed, or maintained? "], "subsections": []}, {"section_title": "What Data May Be Beneficial to Congress in Evaluating OTs?", "paragraphs": ["The FY2019 NDAA required DOD to submit a report annually through 2021, summarizing DOD's use of OTs, including organizations involved; number of transactions; amounts of payments; and purpose, description, and status of projects. The NDAA also required the Defense Innovation Unit to submit a report to Congress, to include the number of traditional and nontraditional defense contractors with DOD contracts or other transactions resulting directly from the unit's initiatives. ", "The conference report for the FY2019 defense appropriations bill included language expressing the conferees' \"[concern] with the lack of transparency surrounding the employment of OTA, particularly for follow-on production.\" The conferees directed DOD to provide quarterly reports to the House and Senate appropriations committees listing each active OT, and to include additional information for each agreement. The conferees also directed GAO to review DOD's use of OTs to determine whether the \"employment of this authority conforms to applicable statutes and guidelines, to include the identification of any potential conflicts.\" GAO was also required to report on the extent to which OTs have been used since FY2016.", "The multitude of reporting requirements, and the questionable reliability of the available data, raise a number of questions that Congress may wish to explore, such as the following:", "1. To what extent, if any, should the current reporting requirements be consolidated to create a more streamlined and consistent flow of information to Congress? 2. What specific data does Congress need in these reports to effectively conduct oversight? For example, what percentage of research OTs result in prototype projects and follow-on production? 3. To what extent are the data sufficiently reliable, and will such data be easily retrievable in the future, to allow Congress to conduct effective, timely, and ongoing oversight? If the data are not sufficiently reliable or accessible in the future, what other data collection and tracking methods could Congress mandate to ensure ongoing access to reliable data? 4. How are OTs being used? Where and when in the acquisition lifecycle is the authority being used? To what extent is the requirements process being circumvented when DOD awards an OT follow-on production contract for a major system?"], "subsections": []}, {"section_title": "Should DOD Establish an Acquisition Innovation Lab or Center of Excellence to Manage and Execute OTs?", "paragraphs": ["One analyst suggested that \"no efficiency is lost if only the most able personnel are authorized to procure and administer\" OT agreements and further argued that expanding the use of OTs would increase the training costs by expanding the number of people who can \"weave complex agreements in a relatively unstructured environment.\" Congress may consider whether DOD should establish an acquisition innovation lab or center of excellence responsible for overseeing, executing, and approving all OTs across the department. Such a lab or center could be staffed and supported by a cadre of professionals with experience across the acquisition lifecycle who have a willingness and ability to embrace new ideas and rethink existing practices. Alternatively, such labs or centers could be established in the military departments. Having centers in each organization could allow for consideration of the different missions and business approaches of the departments and help educate the workforce on a more systematic basis.", "Proponents argue that such an office would help ensure that only experienced and capable officials, with the appropriate training, use OT authorities. Such an office could also help protect against layering internal DOD policies and bureaucracies onto OTs by placing OTs outside of the traditional bureaucratic acquisition process. Proponents could further argue that such an office could better propagate best practices and ensure that OTs are used appropriately and are consistent with guidance and legislation. Having a single office responsible for executing or approving all OTs could also help ensure more timely and accurate information, giving Congress more visibility into DOD's use of other transaction authorities.", "To the extent that a single, high-level official is responsible for managing and overseeing all OTs, Congress might wish to consider repealing or modifying existing statutory approval requirements. If such an office was able to provide timely and accurate information, Congress might also consider some of the current reporting requirements unnecessary, and may choose to repeal some of the reporting requirements.", "Opponents of such a proposal argue that centralizing OTs would have the opposite effect, increasing bureaucracy by adding yet another office within DOD. Opponents also argue that such an office could make it more time-consuming to get a project underway and may discourage program offices from attempting or suggesting OTs. Some also argue that a single office may not have the resources to execute and approve agreements in a timely manner, and would inhibit spreading expertise on how to execute OT agreements more broadly across the acquisition workforce. "], "subsections": [{"section_title": "Alternative Options for Establishing Such an Office", "paragraphs": ["Even proponents who might in theory support establishing such an office could raise significant concerns regarding how such an office would function in practice. A number of alternative options could be pursued to address concerns raised by opponents of establishing a centralized office. Some of these alternative options include the following: ", "Granting such an office primary, but not exclusive, authority to execute OTs. For example, agreement officers specifically authorized to do so could execute OTs, with the centralized office conducting a peer review. Under this construct, the office could also be charged with providing information and expertise/consulting services on the use of OTs to program offices contemplating using the authorities. Establishing centers within each military department, with a designated office in OSD serving a coordinating function (with nondelegable approval authority residing in the military department office designated for OTs). Creating the office as a pilot program for three years, to help DOD manage OTs until such time as the workforce becomes more experienced and proficient in using these agreements. ", "Appendix A. Legislative History", "Other transaction authority first appeared in the National Aeronautics and Space Act of 1958. Since then, Congress has extended OT authorities to 11 federal agencies and a number of other federal offices (see Appendix B for information on other federal entities with similar authorities). ", "This appendix traces the legislative history of OT authorities and select related statutes applicable to DOD. To read the full text of the three statutory provisions related to OTs (10 U.S.C. 2371, 2371b, and 2373), see Appendix D .", "National Aeronautics and Space Act of 1958 (P.L. 85-568)", "Creation of Other Transaction Authority ", "On July 29, 1958 President Dwight D. Eisenhower signed into law the National Aeronautics and Space Act (P.L. 85-568), which established the National Aeronautics and Space Administration (NASA). The purpose of the act included the", "expansion of human knowledge, preservation of the role of the United States as a leader in space science and technology, and pursuing the most effective utilization of the scientific and engineering resources of the United States. ", "Section 203(b)(5) of the Space Act provided NASA the authority (emphasis added) to", "enter into and perform such contracts, leases, cooperative agreements, or other transactions as may be necessary in the conduct of its work and on such terms as it may deem appropriate, with any instrumentality of the United States ... or with any person, firm, association, corporation, or educational institution. To the maximum extent practicable and consistent with the accomplishments of the purpose of this Act, such contracts, leases, agreements, and other transactions shall be allocated by the Administrator in a manner which will enable small-business concerns to participate equitably and proportionately in the conduct of the work of the Administration. ", "Intellectual Property Rights ", "The Space Act specifically addressed NASA's \"property rights in inventions.\" Section 305 stated that any invention made in the performance of any work under any contract is the exclusive property of the United States \"unless the Administrator waives all or any part of the rights.\" This was true even when the person who created the invention \"was not employed or assigned to perform research, development, or exploratory work, but the invention is nevertheless related to the contract\" and was made during working hours, or with a contribution of the government. ", "The act granted the Administrator wide latitude to \"waive all or any part of the rights of the United States under this section\" if doing so was deemed to be in the best interests of the United States. When such rights were waived, NASA retained an irrevocable, nonexclusive, nontransferable royalty-free license by or on behalf of the United States. ", "National Defense Authorization Act for FY1990 & FY1991 ( P.L. 101-189 )", "The FY1990 & FY1991 NDAA granted DARPA temporary authority to enter into \"cooperative agreements and other transactions\" for the purpose of conducting advanced research projects. The statute clarified that OTs should only be used when \"the use of standard contracts or grants is not feasible or appropriate.\" ", "Congress restricted funding for OTs and cooperative agreements to $25 million of appropriated funds for FY1990 and FY1991, and set the authority to expire on September 30, 1991.", "Cost Sharing", "The FY1990 & FY1991 NDAA permitted OTs (or cooperative agreements) to include a clause requiring a person or entity to make payments to DOD as a condition of receiving support under the agreement. Such funds were to be merged into an account dedicated to supporting DARPA advanced research projects using cooperative agreements and other transactions. The act required, to the extent practicable, that funds provided by the government not exceed the total amount provided by the other parties to the project.", "According to the Senate report, one of the intents of the cost-sharing provision was to permit DARPA to \"recoup the fruits of such arrangements, when there is a 'dual use' potential for commercial application\" and to reinvest the funds to develop other technologies. ", "Reporting Requirements", "The FY1990 & FY1991 NDAA required DOD to submit an annual report on the use of OTs and cooperative agreements, to include", "a description of each agreement and the technologies involved, the potential military and commercial utility of the technology, the reasons a contract or grant was not feasible to support the research, and the amount of payments, if any, received by the federal government under the agreement.", "National Defense Authorization Act for FY1991 ( P.L. 101-510 )", "Section 244 increased the funds authorized for cooperative agreements and OTs from $25 million to $50 million. However, no such funding was appropriated.", "Reporting and Notification Requirements", "The conference report required DOD to submit to Congress a report listing the cooperative agreements and consortia intended to be used in FY1991-1992. The conference report also required DOD to provide the armed services and appropriations committees 30 days' notice prior to DOD signing a cooperative agreement or agreement with a consortia under OT authority.", "The Senate report focused on consortia as a method to pool resources, share research among numerous participants, and promote critical dual-use technology. ", "Department of Defense Appropriations Act, 1992 ( P.L. 102-172 )", "Limitations on the Use of OTs ", "Section 8113A of P.L. 102-172 placed temporary limitations on the use of agreements undertaken pursuant to 10 U.S.C. 2371: Section 8113A limited the use of OTs and cooperative agreements exclusively to DARPA (to the exclusion of the rest of DOD) for FY1992. Section 8113A limited DARPA to obligating or expending no more than $37.5 million in FY1992 for cooperative agreements or OTs undertaken pursuant to 10 U.S.C. 2371.", "Section 8113A further established that no more than $75 million could be obligated or expended by DARPA in FY1992 for DOD dual-use critical technology partnerships. ", "National Defense Authorization Act for FY1992 & FY1993 ( P.L. 102-190 )", "Expanded Authority", "Section 826 extended other transaction authority to the military departments, and established separate fund accounts in each department for cost sharing. Section 826 also repealed the sunset for cooperative agreements and OTs, making the authorities permanent.", "Section 821 authorized DOD to enter into cooperative and other transaction agreements to develop critical dual-use technologies as set forth in the Defense Critical Technologies Plan. According to the Senate report", "... the United States tends to underinvest in dual-use technologies. National security requirements alone often do not justify major DOD support, and market prospects alone often appear to be too long-term or high risk to justify US industry carrying the entire development burden.... The committee encourages use of cooperative agreements and other transactions in lieu of grants or contracts.... The provision would require that at least 50 percent of funding over the life of a partnership derive from non-federal sources but would allow for a smaller industry share at the start.", "The conference report stated that the partnerships should focus on programs that fit into the security needs within DARPA. The conference report also stated that OTs are appropriate for those cases where the \"regulations applicable to the allocation of patent and data rights under the procurement statutes may not be appropriate to partnership arrangements in certain cases.\"", "National Defense Authorization Act for FY1993 ( P.L. 102-484 ) ", "Cost Sharing", "Section 4221 established 10 U.S.C. 2511, which required DOD to establish cooperative arrangements with industry, educational institutions, federal labs, and other entities, to pursue research, development, and application of dual-use technologies. The section authorized DOD to use grants, contracts, cooperative agreements, or OTs to create these partnerships, and that the Federal government should not contribute more than 50% of the costs related to projects under this authority. ", "National Defense Authorization Act for FY1994 ( P.L. 103-160 )", "Expanded Authority", "Section 827 established 10 U.S.C. 2358, which gave the Secretary of Defense and the Secretaries of the military departments the authority to conduct basic, advanced, and applied research through the use of contracts, cooperative agreements, grants, and OTs. Previously, OTs were only authorized for advanced research.", "Prototype Authorities", "Section 845 granted DARPA the authority to use OTs for prototype projects directly related to weapons or weapon systems proposed to be acquired by DOD. Section 845 required that \"to the maximum extent practicable,\" prototypes be competitively awarded. This authority was set to terminate after three years. ", "Section 845 remained as a note to 10 U.S.C. 2371 until separately codified as 10 U.S.C. 2371b in the FY2016 NDAA ( P.L. 114-92 ). ", "Federal Acquisition Streamlining Act of 1994 ( P.L. 103-355 )", "Section 1301 redesignated the language in 10 U.S.C. 2358 (granting the authority to use OTs) to 10 U.S.C. 2371. ", "Reporting Requirements", "Section 1301 also required DOD to submit an annual report to the armed services committees, to include", "a general description of the other transactions, including the technologies involved in the research, the potential military and, if any, commercial utility of such technologies, the reasons for not using a contract or grant to provide support for such research, and the amount of payments, if any, received during the fiscal year pursuant to a clause in the other transactions and to what accounts such payments were credited.", "National Defense Authorization Act for FY1997 ( P.L. 104-201 )", "Section 203 required that a senior DOD official be designated in OSD, and that the officials' sole responsibility be developing policy related to, and ensuring implementation of, DOD's dual-use technology program. This section authorized DOD to use OTs (as well as contracts, cooperative agreements, and grants) for dual-use projects only if the project \"is entered into through the use of competitive procedures.\"", "Section 743 granted DOD the authority to use OTs to conduct research on Gulf War Syndrome, to determine its relationship to possible exposures of members of the Armed Forces to chemical warfare agents and hazardous materials, and the use of inoculations and new drugs. ", "Expanded Prototype Authorities", "Section 804 amended Section 845 of the FY1994 NDAA by extending to the military departments and officials designated by the Secretary of Defense, the authority to use OTs for certain prototype projects. This authority, originally granted solely to DARPA and set to expire after three years, was given a new termination date of September 30, 1999. ", "Reporting Requirements", "Section 267 modified elements of the annual report to the armed services committees. ", "National Defense Authorization Act for FY1998 ( P.L. 105-85 )", "Section 832 amended 10 U.S.C. 2371 by clarifying that certain information submitted to DOD (i.e. a proposal, business plan, technical information) be protected from disclosure pursuant to 5 U.S.C. 552 for a period of five years. ", "Strom Thurmond National Defense Authorization Act for FY1999 ( P.L. 105-261 )", "Section 241 extended the sunset day for the authority to use OTs for prototypes from September 30, 1999, to September 30, 2001. ", "Section 817 amended Section 2371 of Title 10, United States Code, clarifying that information submitted by outside parties in cooperative agreements for basic, applied, and advanced research is protected from disclosure under Section 552 of Title 5, United States Code.", "Department of Defense Appropriations Act, 1999 ( P.L. 105-262 )", "While the enacted FY1999 defense appropriations bill ( P.L. 105-262 ) did not include legislative language addressing OTs, H.Rept. 105-591 , which accompanied the House-reported version of H.R. 4103 , included language expressing the House Appropriations Committee's \"serious reservations\" regarding the Air Force's then-proposed use of an OT agreement\u2014instead of a contract\u2014 to develop the Evolved Expendable Launch Vehicle (EELV) program. ", "The committee noted that \"under [OTs] traditional safeguards which protect the government's interest in large acquisition programs are largely absent,\" and required the Under Secretary of Defense for Acquisition, Technology, and Logistics (now the Under Secretary of Defense for Acquisition and Sustainment) and the DOD Inspector General to certify to the congressional defense committees that the use of an OT was appropriate for the EELV program, and that \"adequate safeguards exist[ed] to protect the government's interest and monitor program performance.\"", "National Defense Authorization Act for FY2000 ( P.L. 106-65 )", "Section 801 required that for prototypes using OT authorities, DOD ensure that GAO, under its audit authority, have access to records relating to other transaction prototype agreements exceeding $5 million. Section 801 allowed for a waiver to GAO access and exempted entities that over the last year have not entered into an agreement with DOD that provided for audit access by a government entity. According to the Senate report:", "Senior DOD officials have sought legislation to extend other transaction authority to production contracts. Under current authority, there is some debate about whether GAO has audit access to other transactions. As the size, costs, and complexity of programs being funded using other transactions increases, the committee wants to ensure that the GAO has audit access in relation to the higher levels of spending and added risks.", "Reporting Requirements", "The Senate report also addressed reporting requirements and congressional intent to review the use of OTs. The report stated the following:", "The committee is assessing the utility of other transaction prototype authority. The statement of managers accompanying the Strom Thurmond National Defense Authorization Act of 1999 directed the Secretary of Defense to report on the use of this authority to the congressional defense committees, no later than March 1, 1999. In addition, both the Department of Defense Inspector General and the General Accounting Office are reviewing the use of other transaction prototype authority and will report to Congress in the coming year. The committee is interested in the extent that new commercial firms are entering the DOD marketplace through the use of other transaction authority, as well as the degree of cost sharing between the government and non-federal government parties. The committee is also interested in any lessons learned from the broad exemptions to federal law provided by other transaction authority.", "For example, other transactions are exempt from the Competition in Contracting Act, Truth in Negotiations Act, Contract Disputes Act, Antikickback Act of 1986, Procurement Integrity Act, Service Contract Act, Buy American Act, and chapter 137 of title 10, United States Code. Questions have been raised about whether the government's interest is adequately protected in the absence of the applicability of these statutes. Conversely, advocates of the view that the government should take advantage of the flexibility of other transactions have championed proposals to extend other transaction authority to production.", "The committee directs the Secretary of Defense to provide a new report that updates information in the March 1999 report on the use of other transaction prototype authority to the congressional defense committees by February 1, 2000.", "National Defense Authorization Act for FY2001 ( P.L. 106-398 )", "Limitations on the Use of OTs", "Section 803 limited the use of OTs for prototype projects to only those circumstances when", "at least one nontraditional defense contractor significantly participates in the project, one-third of the total cost of the project is paid out of funds provided by parties to the transaction other than the federal government, or the senior procurement executive determines in writing that exceptional circumstances justify use of an OT.", "Nontraditional defense contractor was defined as an entity that for a period of one year has not entered into or performed", "\"any contract that is subject to full coverage under the cost accounting standards\" or \"any other contract in excess of $500,000 to carry out prototype projects or to perform basic, applied, or advanced research projects for a Federal agency, that is subject to the Federal Acquisition Regulation.''", "Section 803 also extended the authority to use OTs for prototypes from September 30, 2001, to September 30, 2004. ", "According to the Senate report, the intent of using OTs for prototypes is ", "to attract companies that typically do not do business with the Department of Defense and encourage cost sharing and experimentation in potentially more efficient ways of doing business with traditional defense contractors. Other transaction authority is an important acquisition tool that can facilitate the incorporation of commercial technology into military weapon systems. In an environment where, in many areas, commercial technology is now more advanced than defense technology, it is imperative that the Department continue to have the flexibility to use innovative contractual instruments that provide access to this technology. There are, however, improvements that can be made in managing and overseeing these contractual arrangements.", "Section 804 clarified the extent of GAO's access to records in instances where the party in question has only done business with the government in the preceding year through an OT or cooperative agreement. ", "National Defense Authorization Act for FY2002 ( P.L. 107-107 )", "Expanded Authority\u2014Follow-on Production", "Section 822 of the FY2002 NDAA granted DOD the authority to award a follow-on production contract for prototype projects when at least one-third of the total cost of the prototype project is to be paid out of funds provided by non-federal government sources. Under this authority, such a follow-on contract could be awarded without competition if ", "the prototype project was successfully completed, the number of units in the production contract does not exceed the number of units specified in the underlying prototype agreement, and the price for each unit does not exceed the price specified in the underlying transaction.", "Department of Defense and Emergency Supplemental Appropriations for Recovery from and Response to Terrorist Attacks on the United States Act, 2002 ( P.L. 107-117 )", "Establishment of Army Venture Capital Initiative (AVCI)", "Section 8150 designated $25 million of the FY2002 funds made available for Army Research, Development, Test, and Evaluation (RDT&E) to be made available to the Secretary of the Army for the purpose of funding a venture capital investment corporation established pursuant to 10 U.S.C. 2371.", "A 2014 RAND report stated that OT authorities were used only to form the AVCI, and were not used to acquire products or services: \"While OT authorities were used to form [AVCI] itself, any volume of the Army's purchase of products and services from [AVCI] companies is conducted under the FAR.\" ", "National Defense Authorization Act for FY2004 ( P.L. 108-136 )", "Expanded Authority", "Section 847 of the FY2004 NDAA extended the authority to use an OT for developing prototypes to improve weapons or weapon systems currently in use by the Armed Forces. Previously, such authority was restricted to prototypes \"directly relevant to weapons or weapon systems proposed to be acquired or developed\" by DOD. ", "Section 847 also established a pilot program for transitioning prototypes to follow-on contracts for production for nontraditional defense contractors. Under the pilot program, such a follow-on contract could be treated as a commercial item or an item developed with both federal and private sector funds (for purposes of negotiating intellectual property rights). The pilot program was restricted to contracts", "with nontraditional defense contractors, where the value of the contract does not exceed $50 million (approximately $70 million in FY2018 dollars), and that are firm-fixed price or fixed price with economic adjustment.", "The pilot program was set to sunset September 30, 2008. ", "Section 1441 authorized any agency that engages in basic, applied, or advanced research and development projects that facilitated defense against or recovery from terrorism or nuclear, biological, chemical, or radiological attack to exercise the same general authority given to DOD as found in 10 U.S.C. 2371 (including for prototype projects).", "Reporting Requirements", "Section 1031 sunset the annual reporting requirement for OT after the report covering FY2006 was submitted. ", "National Defense Authorization Act for FY2006 ( P.L. 109-163 )", "Restricted Authority and Notification Requirements", "Section 212 of the FY2006 NDAA directed the Army to procure the Future Combat System using contract procedures set forth in part 15 of the Federal Acquisition Regulation, in lieu of an OT. ", "Section 823 extended ethics requirements to OT prototype authority and required the congressional defense committees be notified in writing at least 30 days before such authority is exercised. ", "Certification Requirements", "Section 823 also amended Section 845 of the FY1994 NDAA, requiring a written determination by a senior procurement executive for other transaction prototype projects estimated between $20 million and $100 million, and for a written determination by the Under Secretary of Defense for Acquisition, Technology, and Logistics for prototype projects that exceed $100 million.", "According to the Senate report:", "Section 845 was intended to be used for limited prototype projects, particularly those in which the Department seeks to engage nontraditional defense contractors that may be averse to the requirements imposed by a standard Department procurement contract. For this reason, the statement of managers accompanying the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 (Public Law 105\u2013261) states: ", "The conferees continue to believe that the section 845 authority should only be used in the exceptional cases where it can be clearly demonstrated that a normal contract or grant will not allow sufficient access to affordable technologies. The conferees are especially concerned that such authority not be used to circumvent the appropriate management controls in the standard acquisition and budgeting process.", "\u2026. The committee does not believe that the $20.9 billion agreement entered between the Army and the Lead Systems Integrator for the FCS program is consistent with the language and intent of section 845 authority. Section 845 authority is intended to be used for limited prototype projects, particularly those in which the Department of Defense seeks to engage nontraditional defense contractors that may be averse to the requirements imposed by a standard Department contract.", "Department of Defense Appropriations Act, 2007 ( H.R. 5631 )", "Reporting Requirement", "The FY2007 defense appropriations bill ( P.L. 109-289 ) did not include language addressing OTs. The conference report ( H.Rept. 109-676 ) included language expressing the conferees' \"[concern] with the continued use of OTA contracts by the Missile Defense Agency,\" as such contracts \"lack the customary safeguards found under FAR-based contracts for organizational conflict of interest, truth in negotiations and submission of cost and pricing data.\" ", "The conferees \"strongly encourage[d]\" the Missile Defense Agency to convert \"large development and procurement contracts using OTA to FAR-based contracts,\" and directed the Missile Defense Agency to submit a report to the congressional defense committees on the use of OTs, to include the number, value, and justification for the use of such agreements.", "National Defense Authorization Act for FY2008 ( P.L. 110-181 )", "Section 823 extended the authority for prototype projects for five more years, from September 30, 2008, to September 30, 2013.", "National Defense Authorization Act for FY2009 ( P.L. 110-417 )", "Section 822 required DOD to issue guidance on rights in technical data under non-FAR agreements, including OTs. Section 822 also required that appropriate provisions relating to rights in technical data be included in non-FAR agreements, consistent with policy guidance. This requirements is in statute at 10 U.S.C. 2320 note.", "Section 824 expanded the scope of the pilot program for transition to follow-on contracts for certain prototype projects to include research projects carried out under 10 U.S.C. 2371. Authority to use the pilot program, set to expire September 30, 2008, was extended to September 30, 2010. ", "Section 874 required OT data be included in the Federal Procurement Data System. ", "National Defense Authorization Act for FY2011 ( P.L. 111-383 )", "Section 866 changed the definition of nontraditional defense contractor, conforming the definition to that found in 10 U.S.C. 2302(9).", "National Defense Authorization Act for FY2013 ( P.L. 112-239 )", "Section 863 extended the authority for using OTs for prototype projects from September 30, 2013, to September 30, 2018.", "Carl Levin and Howard P. \"Buck\" McKeon National Defense Authorization Act for FY2015 ( P.L. 113-291 )", "Expanded Authority", "Section 812 expanded the authority to use OT for prototypes, to include those \"directly related to enhancing the mission effectiveness of military personnel and the supporting platforms, systems, components, or materials proposed to be acquired or developed by the Department of Defense, or to improvement of platforms, systems, components, or materials in use by the Armed Forces.\" Prior to the FY2015 NDAA, OTs could only be used for prototypes relating to weapons or weapon systems proposed to be developed, or for the improvement of weapons or weapon systems currently in use. ", "Reporting Requirements", "Section 1071 repealed the reporting requirement language found in 10 U.S.C. 2371, relating to OTs for research projects. ", "National Defense Authorization Act for FY2016 ( P.L. 114-92 )", "Until the FY2016 NDAA, the prototyping and follow-on production authority established in Section 845 of the FY1994 NDAA (as amended) was found in 10 U.S.C. 2371 note. Section 815 of the FY2016 NDAA simultaneously repealed Section 845 of the FY1994 NDAA and put the repealed language into the newly created 10 U.S.C. 2371b. The FY2016 NDAA also modified 2371b by making the authority permanent. ", "Expanded Authority and Small Business", "The authorities in Section 2371b were expanded to allow their use when \"all significant participants in the transaction other than the Federal government are small businesses or nontraditional contractors\" and when the agency determines that using an OT would expand the defense supply base in a manner that could not be accomplished through a contract.", "Section 815 eased the restriction on follow-on production contracts or transactions.", "Section 815 amended the definition of a nontraditional defense contractor found in 10 U.S.C. 2302 to be an entity that is not currently performing, and for one year prior to an OT has not performed on any contract or subcontract that is subject to full coverage under the cost accounting standards pursuant to Section 1502 of Title 41, U.S.C. Section 815 also required DOD to update its guidance to reflect changes in the statute. ", "The conference report stated that Congress believed OTs are an attractive option for firms and organizations that do not usually participate in government contracting due to typical overhead burdens and the \"one size fits all\" rules governing defense acquisition. The report also stated that OTs could support DOD's effort to access new sources of technological innovation, specifically with Silicon Valley startup firms and small commercial firms.", "National Defense Authorization Act for FY2018 ( P.L. 115-91 )", "Expanded Authority", "Section 216 of the FY2018 NDAA authorized nonprofit research institutions to enter into OTs with DOD for prototype projects. ", "Section 862 amended 10 U.S.C. 2358, granting the Secretary of Defense and the military departments the authority to pursue basic research, applied research, advanced research, and development projects under the OT authorities granted in Sections 2371 and 2371b of Title 10.", "Workforce", "Section 802 required DOD to establish a cadre of intellectual property experts to advise, assist, and provide resources to program offices who are developing intellectual property strategies for contracts and agreements. Section 863 required training and education for personnel involved in OTs and other innovative contracting methods.", "Certification Requirements and Small Business", "Section 864 adjusted the language of the statute to state that the dollar threshold relates to the specific transaction for a prototype project and not for the value of the entire project. Section 864 defined a transaction for follow-on production to include \"all individual prototype sub-projects awarded under the transaction to a consortium of United States industry and academic institutions.\" ", "Section 864 also increased the dollar thresholds for required approvals and defined the term small business to include small businesses under Section 9 of the Small Business Act to ensure that companies participating in the Small Business Innovation Research and Small Business Technology Transfer programs were considered small businesses for the purposes of the cost-sharing requirements. ", "Miscellaneous", "Section 867 required the Secretary of Defense to establish a preference for OTs in the \"execution of science and technology and prototyping programs.\"", "Section 1711 required DOD to carry out a pilot program to \"assess the feasibility and advisability of increasing the manufacturing capability of the defense industrial base.\" Pursuant to the pilot, Section 1711 authorized DOD to use OTs to support production capabilities in small and medium-sized manufacturers.", "John S. McCain National Defense Authorization Act for FY2019 ( P.L. 115-232 )", "Section 211 of the FY2019 NDAA clarified that follow-on production of a prototype or subproject within a consortium may occur if the individual prototype or subproject is complete; all projects associated with the consortium do not need to be completed before follow-on production of a specific prototype. ", "Expanded Authority", "The FY2019 NDAA authorized the use of OTs to develop enhanced personal protective equipment (Section 226) and to carry out research under the Explosive Ordnance Disposal Defense Program (Section 311). ", "Reporting Requirements", "Section 244 required the Defense Innovation Unit to submit a report to Congress, to include the number of traditional and nontraditional defense contractors with DOD contracts or other transactions resulting directly from the unit's initiatives.", "Section 873 required DOD to submit an annual report through 2021, summarizing DOD's use of OTs, including organizations involved; number of transactions; amounts of payments; and purpose, description, and status of projects. ", "Department of Defense Appropriations Act, 2019 ( P.L. 115-245 )", "Reporting Requirements", "While the enacted FY2019 defense appropriations bill did not include legislative language addressing OTs, the conference report included language expressing the conferees' \"[concern] with the lack of transparency surrounding the employment of OTA, particularly for follow-on production.\" The conferees directed DOD to provide quarterly reports to the House and Senate appropriations committees listing each active OT, and to include the following information on each agreement:", "funding military service or DOD component; major command (if applicable); contracting activity; appropriation title; budget line item; minimum and maximum award value; vendor; obligations and expenditures to date; product service code; period of performance; and indication if the OT agreement included an option for follow-on production (with a description of the scope of anticipated follow-on production).", "The conferees also directed GAO to review DOD's use of OTs to determine whether the \"employment of this authority conforms to applicable statutes and guidelines, to include the identification of any potential conflicts.\" GAO was also required to report on the extent to which OTs have been used since FY2016.", "Notification Requirements", "The House report to accompany H.R. 6157 acknowledged OTs as an \"important tool to provide flexibility and agility for cutting-edge research and development projects and prototypes.\" However, the report stated its concern \"with the lack of transparency on the use of OTA authority for follow-on production procurements,\" and directed that no funds could be obligated or expended for a follow-on production contract or a transaction carried out under 10 U.S.C. 2371b, until 30 days after the Secretary of Defense provides the congressional defense committees with a notification of the proposed contract or transaction, to include a justification of why an OT is being used for production. ", "Appendix B. Non-DOD Federal Agencies with Agency-Wide OT or Related Authorities", "A number of agencies have varying other transaction or similar authorities, as reflected in Table B-1 . The table below is not a comprehensive or definitive listing of every federal government entity with OT or related authorities. ", "In some instances, offices, agencies, commissions, and other federal government entities have OT or related authorities that are only associated with certain programs or projects, such as the National Institutes of Health (which has OT authority for such specific activities such as the National Heart, Blood Vessel, Lung, and Blood Diseases and Blood Resources Program [42 U.S.C. \u00a7285b-3] and the Cures Acceleration Network [42 U.S.C. \u00a7287a]).", "Appendix C. Reliability of Data on Other Transactions", "All data have imperfections and limitations. FPDS-NG data can be used to identify broad trends and produce rough estimates, or to gather information about specific contracts. Some observers say that despite their shortcomings, FPDS-NG data are substantially more comprehensive than what is available in most other countries in the world. Understanding the limitations of government procurement data\u2014including knowing when, how, and to what extent to rely on data\u2014can help policymakers incorporate FPDS-NG data more effectively into their decisionmaking process.", "FPDS-NG OT Data Quality and Accuracy Issues", "Decisionmakers should be cautious when using data from FPDS-NG to develop policy or otherwise draw conclusions, especially with respect to OTs. In some cases, the data themselves may not be reliable. In other instances, a query for particular data may return differing results, depending on the parameters and timing of the analysis. In particular, all DOD data entered into FPDS-NG are subject to a 90-day delay, and updates to \"data, including new actions, modifications, and corrections are made on a regular basis,\" which could result in changes to \"data ... for current and/or prior fiscal years.\"", "Inconsistencies in FPDS-NG Data", "Within FPDS-NG, two primary collections of obligation data exist: one associated with standard government procurement contracts or modifications to such contracts, and the other associated with prototype OT agreements or modifications to such agreements. FPDS-NG's collection of prototype OT data allows for the input of additional data elements\u2014such as nongovernment dollars associated with cost-share prototype OT agreements\u2014not included in FPDS-NG's collection of standard government procurement contract data. ", "More consequentially, FPDS-NG's prototype OT data include two similar data elements that allow users to identify the fiscal year a prototype OT agreement was signed or modified. One, labeled in the database as \"Fiscal Year,\" appears to allow users entering data into the system to manually assign a fiscal year to a transaction. FPDS-NG users entering data into the system appear to have interpreted this data element in various, conflicting ways. For example, a Department of the Air Force OT agreement was signed in February 2016 for the development of rocket propulsion system prototypes under the Evolved Expendable Launch Vehicle (EELV) program. FPDS-NG records an obligation of $115 million in FY2020 for this agreement. Fiscal law bars DOD from obligating money now for future fiscal years that have not yet occurred. ", "The second, labeled \"Contract Fiscal Year,\" appears to be based on the date the prototype OT agreement was signed or modified. ", "See Table C-1 for a comparison of the \"Fiscal Year\" and \"Contract Fiscal Year\" elements for selected new prototype OT agreements signed between FY2013 and FY2017.", "If a user selects the Fiscal Year data element when attempting to review high-level data on recent trends in the use of prototype OT agreements within DOD\u2014such as the total amount obligated for prototype OT agreements on an annual basis\u2014that user will obtain a substantially different result than if he or she selects the Contract Fiscal Year data element for a similar analysis.", "See Table C-2 for a comparison of action obligations and nongovernment contributions using the Fiscal Year and Contract Fiscal Year data elements for new prototype OT agreements signed between FY2013 and FY2017.", "DOD OT Data Analysis Methodological Issues in Congressional Reports", "A March 2017 report to Congress entitled \"An Assessment of Cost-Sharing in Other Transaction Agreements for Prototype Projects,\" completed by the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics indicated that", "In FY2016, DOD obligated (Note: Two outliers in 2016 excluded) $1 billion in section 2371b awards and received $68 million in cost-share contributions after excluding two significant trend outliers. ", "DOD cited FPDS-NG as the source for its analysis, and defined the \"significant trend outliers\" excluded as \"two $40 million OTAs with total cost-share of $270 million,\" likely referring to two DARPA prototype OT agreements conducted on a cost-share basis initiated in FY2016. However, a CRS analysis of the same FPDS-NG data identified numerous inconsistencies in DOD's methodological approach. ", "Recreation of DOD Methodology", "Specifically, DOD appears to have conducted its analysis using the \"Fiscal Year\" data element referenced in this report's discussion of FPDS-NG OT data quality and accuracy issues, which would attribute some prototype OT activities to the wrong fiscal year for the purposes of comparative trend analysis. DOD also compared two disparate transaction types: the reported \"$1 billion in Section 2371b awards\" includes all action obligations associated with ongoing prototype OT activities in FY2016, including transactions associated with prototype OT indefinite delivery contracts, while the \"$68 million in cost-share contributions\" includes only cost-share contributions associated with new prototype OT agreements. ", "If DOD used the \"Contract Fiscal Year\" data element, excluded the identified \"trend outliers,\" and focused on all action obligations and cost-share contributions associated with ongoing prototype OT activities, it would have found instead that the department obligated $1.4 billion for prototype OT agreements in FY2016, with an additional $313.5 million in cost-share contributions from the private sector. On the other hand, if DOD used the \"Contract Fiscal Year\" data element, excluded the identified \"trend outliers,\" and focused on only action obligations and cost-share contributions associated with new prototype OT agreements, it would have found instead that the department obligated $400 million for prototype OT agreements in FY2016, with an additional $272.1 million in cost-share contributions from the private sector.", "Appendix D. Other Transaction Authority Statutes", "10 U.S.C. \u00a72371. Research projects: transactions other than contracts and grants", "(a)\u00a0ADDITIONAL FORMS OF TRANSACTIONS AUTHORIZED.\u2014", "The Secretary of Defense and the Secretary of each military department may enter into transactions (other than contracts, cooperative agreements, and grants) under the authority of this subsection in carrying out basic, applied, and advanced research projects. The authority under this subsection is in addition to the authority provided in\u00a0Section 2358 of this title\u00a0to use contracts, cooperative agreements, and grants in carrying out such projects.", "(b)\u00a0EXERCISE OF AUTHORITY BY SECRETARY OF DEFENSE.\u2014", "In any exercise of the authority in subsection (a), the Secretary of Defense shall act through the Defense Advanced Research Projects Agency or any other element of the Department of Defense that the Secretary may designate.", "(c)\u00a0ADVANCE PAYMENTS.\u2014", "The authority provided under subsection (a) may be exercised without regard to\u00a0Section 3324 of Title 31.", "(d)\u00a0RECOVERY OF FUNDS.\u2014", "(1) A cooperative agreement for performance of basic, applied, or advanced research authorized by\u00a0Section 2358 of this title\u00a0and a transaction authorized by subsection (a) may include a clause that requires a person or other entity to make payments to the Department of Defense or any other department or agency of the Federal Government as a condition for receiving support under the agreement or other transaction.", "(2) The amount of any payment received by the Federal Government pursuant to a requirement imposed under paragraph (1) may be credited, to the extent authorized by the Secretary of Defense, to the appropriate account established under subsection (f). Amounts so credited shall be merged with other funds in the account and shall be available for the same purposes and the same period for which other funds in such account are available.", "(e)\u00a0CONDITIONS.\u2014", "(1) The Secretary of Defense shall ensure that-", "(A) to the maximum extent practicable, no cooperative agreement containing a clause under subsection (d) and no transaction entered into under subsection (a) provides for research that duplicates research being conducted under existing programs carried out by the Department of Defense; and", "(B) to the extent that the Secretary determines practicable, the funds provided by the Government under a cooperative agreement containing a clause under subsection (d) or a transaction authorized by subsection (a) do not exceed the total amount provided by other parties to the cooperative agreement or other transaction.", "(2) A cooperative agreement containing a clause under subsection (d) or a transaction authorized by subsection (a) may be used for a research project when the use of a standard contract, grant, or cooperative agreement for such project is not feasible or appropriate.", "(f)\u00a0SUPPORT ACCOUNTS.\u2014", "There is hereby established on the books of the Treasury separate accounts for each of the military departments and the Defense Advanced Research Projects Agency for support of research projects and development projects provided for in cooperative agreements containing a clause under subsection (d) and research projects provided for in transactions entered into under subsection (a). Funds in those accounts shall be available for the payment of such support.", "(g)\u00a0EDUCATION AND TRAINING.\u2014The Secretary of Defense shall\u2014", "(1) ensure that management, technical, and contracting personnel of the Department of Defense involved in the award or administration of transactions under this section or other innovative forms of contracting are afforded opportunities for adequate education and training; and", "(2) establish minimum levels and requirements for continuous and experiential learning for such personnel, including levels and requirements for acquisition certification programs.", "(h)\u00a0REGULATIONS.\u2014", "The Secretary of Defense shall prescribe regulations to carry out this section.", "(i)\u00a0Protection of Certain Information From Disclosure.-(1) Disclosure of information described in paragraph (2) is not required, and may not be compelled, under\u00a0Section 552 of Title 5\u00a0for five years after the date on which the information is received by the Department of Defense.", "(2)(A) Paragraph (1) applies to information described in subparagraph (B) that is in the records of the Department of Defense if the information was submitted to the Department in a competitive or noncompetitive process having the potential for resulting in an award, to the party submitting the information, of a cooperative agreement for performance of basic, applied, or advanced research authorized by\u00a0Section 2358 of this title\u00a0or another transaction authorized by subsection (a).", "(B) The information referred to in subparagraph (A) is the following:", "(i) A proposal, proposal abstract, and supporting documents.", "(ii) A business plan submitted on a confidential basis.", "(iii) Technical information submitted on a confidential basis.", "10 U.S.C. \u00a72371b. Authority of the Department of Defense to carry out certain prototype projects", "(a)\u00a0AUTHORITY.\u2014", "(1) Subject to paragraph (2), the Director of the Defense Advanced Research Projects Agency, the Secretary of a military department, or any other official designated by the Secretary of Defense may, under the authority of\u00a0Section 2371 of this title, carry out prototype projects that are directly relevant to enhancing the mission effectiveness of military personnel and the supporting platforms, systems, components, or materials proposed to be acquired or developed by the Department of Defense, or to improvement of platforms, systems, components, or materials in use by the armed forces.", "(2) The authority of this section-", "(A) may be exercised for a transaction (for a prototype project) that is expected to cost the Department of Defense in excess of $100,000,000 but not in excess of $500,000,000 (including all options) only upon a written determination by the senior procurement executive for the agency as designated for the purpose of\u00a0Section 1702(c) of Title 41, or, for the Defense Advanced Research Projects Agency or the Missile Defense Agency, the director of the agency that-", "(i) the requirements of subsection (d) will be met; an d", "(ii) the use of the authority of this section is essential to promoting the success of the prototype project; and", "(B) may be exercised for a transaction (for a prototype project) that is expected to cost the Department of Defense in excess of $500,000,000 (including all options) only if-", "(i) the Under Secretary of Defense for Acquisition, Technology, and Logistics determines in writing that-", "(I) the requirements of subsection (d) will be met; an d", "(II) the use of the authority of this section is essential to meet critical national security objectives; and", "(ii) the congressional defense committees are notified in writing at least 30 days before such authority is exercised.", "(3) The authority of a senior procurement executive or director of the Defense Advanced Research Projects Agency or Missile Defense Agency under paragraph (2)(A), and the authority of the Under Secretary of Defense for Acquisition, Technology, and Logistics under paragraph (2)(B), may not be delegated.", "(b)\u00a0EXERCISE OF AUTHORITY.\u2014", "(1) Subsections (e)(1)(B) and (e)(2) of such Section 2371 shall not apply to projects carried out under subsection (a).", "(2) To the maximum extent practicable, competitive procedures shall be used when entering into agreements to carry out projects under subsection (a).", "(c)\u00a0COMPTROLLER GENERAL ACCESS TO INFORMATION.\u2014", "(1) Each agreement entered into by an official referred to in subsection (a) to carry out a project under that subsection that provides for payments in a total amount in excess of $5,000,000 shall include a clause that provides for the Comptroller General, in the discretion of the Comptroller General, to examine the records of any party to the agreement or any entity that participates in the performance of the agreement.", "(2) The requirement in paragraph (1) shall not apply with respect to a party or entity, or a subordinate element of a party or entity, that has not entered into any other agreement that provides for audit access by a Government entity in the year prior to the date of the agreement.", "(3)", "(A) The right provided to the Comptroller General in a clause of an agreement under paragraph (1) is limited as provided in subparagraph (B) in the case of a party to the agreement, an entity that participates in the performance of the agreement, or a subordinate element of that party or entity if the only agreements or other transactions that the party, entity, or subordinate element entered into with Government entities in the year prior to the date of that agreement are cooperative agreements or transactions that were entered into under this section or\u00a0Section 2371 of this title.", "(B) The only records of a party, other entity, or subordinate element referred to in subparagraph (A) that the Comptroller General may examine in the exercise of the right referred to in that subparagraph are records of the same type as the records that the Government has had the right to examine under the audit access clauses of the previous agreements or transactions referred to in such subparagraph that were entered into by that particular party, entity, or subordinate element.", "(4) The head of the contracting activity that is carrying out the agreement may waive the applicability of the requirement in paragraph (1) to the agreement if the head of the contracting activity determines that it would not be in the public interest to apply the requirement to the agreement. The waiver shall be effective with respect to the agreement only if the head of the contracting activity transmits a notification of the waiver to Congress and the Comptroller General before entering into the agreement. The notification shall include the rationale for the determination.", "(5) The Comptroller General may not examine records pursuant to a clause included in an agreement under paragraph (1) more than three years after the final payment is made by the United States under the agreement.", "(d)\u00a0APPROPRIATE USE OF AUTHORITY.\u2014", "(1) The Secretary of Defense shall ensure that no official of an agency enters into a transaction (other than a contract, grant, or cooperative agreement) for a prototype project under the authority of this section unless one of the following conditions is met:", "(A) There is at least one nontraditional defense contractor or nonprofit research institution participating to a significant extent in the prototype project.", "(B) All significant participants in the transaction other than the Federal Government are small businesses (including small businesses participating in a program described under Section 9 of the Small Business Act (15 U.S.C. 638)) or nontraditional defense contractors.", "(C) At least one third of the total cost of the prototype project is to be paid out of funds provided by sources other than other than\u00a0the Federal Government.", "(D) The senior procurement executive for the agency determines in writing that exceptional circumstances justify the use of a transaction that provides for innovative business arrangements or structures that would not be feasible or appropriate under a contract, or would provide an opportunity to expand the defense supply base in a manner that would not be practical or feasible under a contract.", "(2)", "(A) Except as provided in subparagraph (B), the amounts counted for the purposes of this subsection as being provided, or to be provided, by a party to a transaction with respect to a prototype project that is entered into under this section other than the Federal Government do not include costs that were incurred before the date on which the transaction becomes effective.", "(B) Costs that were incurred for a prototype project by a party after the beginning of negotiations resulting in a transaction (other than a contract, grant, or cooperative agreement) with respect to the project before the date on which the transaction becomes effective may be counted for purposes of this subsection as being provided, or to be provided, by the party to the transaction if and to the extent that the official responsible for entering into the transaction determines in writing that-", "(i) the party incurred the costs in anticipation of entering into the transaction; and", "(ii) it was appropriate for the party to incur the costs before the transaction became effective in order to ensure the successful implementation of the transaction.", "(e)\u00a0Definitions.\u2014In this section:", "(1) The term \"nontraditional defense contractor\" has the meaning given the term under\u00a0Section 2302(9) of this title.", "(2) The term \"small business\" means a small business concern as defined under Section 3 of the Small Business Act (15 U.S.C. 632).", "(f)\u00a0FOLLOW-ON PRODUCTION CONTRACTS OR TRANSACTIONS.\u2014", "(1) A transaction entered into under this section for a prototype project may provide for the award of a follow-on production contract or transaction to the participants in the transaction. A transaction includes all individual prototype subprojects awarded under the transaction to a consortium of United States industry and academic institutions.", "(2) A follow-on production contract or transaction provided for in a transaction under paragraph (1) may be awarded to the participants in the transaction without the use of competitive procedures, notwithstanding the requirements of\u00a0Section 2304 of this title, if -", "(A) competitive procedures were used for the selection of parties for participation in the transaction; and", "(B) the participants in the transaction successfully completed the prototype project provided for in the transaction.", "(3) Contracts and transactions entered into pursuant to this subsection may be awarded using the authority in subsection (a), under the authority of\u00a0Chapter 137\u00a0of this title, or under such procedures, terms, and conditions as the Secretary of Defense may establish by regulation.", "(g)\u00a0AUTHORITY TO PROVIDE PROTOTYPES AND FOLLOW-ON PRODUCTION ITEMS AS GOVERNMENT-FURNISHED EQUIPMENT.\u2014", "An agreement entered into pursuant to the authority of subsection (a) or a follow-on contract or transaction entered into pursuant to the authority of subsection (f) may provide for prototypes or follow-on production items to be provided to another contractor as Government-furnished equipment.", "(h)\u00a0APPLICABILITY OF PROCUREMENT ETHICS REQUIREMENTS.\u2014", "An agreement entered into under the authority of this section shall be treated as a Federal agency procurement for the purposes of\u00a0Chapter 21 of Title 41.", "10 U.S.C. \u00a72373. Procurement for experimental purposes", "(a)\u00a0AUTHORITY.\u2014", "The Secretary of Defense and the Secretaries of the military departments may each buy ordnance, signal, chemical activity, transportation, energy, medical, space-flight, and aeronautical supplies, including parts and accessories, and designs thereof, that the Secretary of Defense or the Secretary concerned considers necessary for experimental or test purposes in the development of the best supplies that are needed for the national defense.", "(b)\u00a0PROCEDURES.\u2014", "Purchases under this section may be made inside or outside the United States and by contract or otherwise.\u00a0Chapter 137\u00a0of this title applies only when such purchases are made in quantities greater than necessary for experimentation, technical evaluation, assessment of operational utility, or safety or to provide a residual operational capability."], "subsections": []}]}]}]}}
{"id": "R45120", "title": "Latin America and the Caribbean: Issues in the 115th Congress", "released_date": "2019-01-22T00:00:00", "summary": ["Geographic proximity has ensured strong linkages between the United States and Latin America and the Caribbean, based on diverse U.S. interests, including economic, political, and security concerns. The United States is a major trading partner and the largest source of foreign investment for many countries in the region, with free-trade agreements enhancing economic linkages with 11 countries. The region is a large source of U.S. immigration, both legal and illegal; proximity and economic and security conditions are major factors driving migration. Curbing the flow of illicit drugs has been a key component of U.S. relations with the region for more than three decades and currently involves close security cooperation with Mexico, Central America, and the Caribbean. U.S. support for democracy and human rights in the region has been long-standing, with particular current focus on Cuba, Nicaragua, and Venezuela.", "Under the Trump Administration, the outlook for U.S. relations with the region has changed. The Administration proposed deep cuts in FY2018 and FY2019 assistance to the region compared with FY2017. On trade, President Trump ordered U.S. withdrawal from the proposed Trans-Pacific Partnership trade agreement, which would have increased U.S. economic linkages with Mexico, Chile, and Peru. President Trump criticized the North American Free Trade Agreement (NAFTA) with Mexico and Canada as unfair, warned that the United States might withdraw, and initiated renegotiations; ultimately, the three countries agreed to a United States-Mexico-Canada Agreement in late September 2018. The proposed agreement, which requires congressional approval, largely leaves NAFTA intact but includes some updates and changes, especially to the dairy and auto industries. Administration actions on immigration have caused concern in the region, including efforts to end the deportation relief program known as Deferred Action for Childhood Arrivals (DACA) and Temporary Protected Status (TPS) designations for Nicaragua, Haiti, El Salvador, and Honduras. President Trump unveiled a new policy in 2017 toward Cuba partially rolling back U.S. efforts to normalize relations and imposing new sanctions.", "Congressional Action in the 115th Congress", "Congress traditionally has played an active role in policy toward Latin America and the Caribbean in terms of both legislation and oversight. Congress rejected the Trump Administration's proposed FY2018 cuts in foreign assistance to the region when it enacted the Consolidated Appropriations Act, 2018 (P.L. 115-141). Although the 115th Congress did not complete action on FY2019 appropriations funding foreign aid, both House and Senate Appropriations Committees' bills, H.R. 6385 and S. 3108, would have funded key countries and initiatives approaching FY2017 amounts.", "In other action, Congress enacted the Nicaragua Human Rights and Anticorruption Act of 2018 (P.L. 115-335, H.R. 1918) in December 2018. The measure requires the United States to vote against loans from the international financial institutions to Nicaragua, except to address basic human needs or promote democracy, and authorizes the President to impose sanctions on persons responsible for human rights violations or acts of corruption. In August 2018, Congress enacted the FY2019 defense authorization measure, P.L. 115-232 (H.R. 5515), with several Latin America provisions, including required reports on narcotics trafficking corruption and illicit campaign financing in El Salvador, Guatemala, and Honduras and on security cooperation between Russia and Cuba, Nicaragua, and Venezuela. The House also approved H.R. 2658 on Venezuela in December 2017, which, among its provisions, would have authorized humanitarian assistance for Venezuela; similar bills were introduced in the Senate but were not considered.", "Both houses approved several resolutions indicating policy preferences on a range of issues and countries: S.Res. 35 and H.Res. 259 on Venezuela, S.Res. 83 and H.Res. 336 on Mexico, H.Res. 54 on Argentina, H.Res. 145 on Central America, S.Res. 224 on Cuba, and H.Res. 981 on Nicaragua.", "Looking ahead to the 116th Congress, in addition to completing action on FY2019 foreign aid appropriations, many of the U.S. economic, political, and security concerns discussed in this report likely will sustain congressional interest in Latin America and the Caribbean (see \"Outlook for the 116th Congress,\" below.)", "This report, which will not be updated, tracks legislative action on Latin America and the Caribbean in the 115th Congress in 2017 and 2018."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Regional Political and Economic Environment", "paragraphs": ["With 33 countries\u2014ranging from the Caribbean nation of St. Kitts and Nevis, one of the world's smallest states, to the South American giant of Brazil, the world's fifth-largest country\u2014the Latin American and Caribbean region has made significant advances over the past three decades in terms of both political and economic development. (See Figure 1 for a map of the region and Table 1 for basic facts on the region's countries.) In the early 1980s, 16 Latin American and Caribbean countries were governed by authoritarian regimes, both on the left and the right. Today, most governments are elected democracies, at least formally. The threat to elected governments from their own militaries has dissipated in most countries. Free and fair elections have become the norm in most countries in the region, although elections in several countries have been controversial and contested. In 2017, the Bahamas, Ecuador, and Chile held successful elections for heads of government. Elections in Honduras in November 2017, however, were characterized by significant irregularities, with the Secretary General of the Organization of American States (OAS) calling for new elections to be held. Despite a series of mass civil protests, incumbent President Juan Orlando Hern\u00e1ndez was certified as the winner in December 2017.", "In 2018, nine countries in the region\u2014Antigua and Barbuda, Barbados, Brazil, Costa Rica, Colombia, Grenada, Mexico, Paraguay, and Venezuela\u2014held elections for head of government. With the exception of Venezuela, all of these elections were free and fair. The Venezuelan election, boycotted by most opposition parties, was significantly flawed. In addition, Cuba underwent a political transition in April, when Ra\u00fal Castro stepped down from power and Cuba's legislature selected a new president. (See Table 1 for a listing of leaders and elections.) "], "subsections": [{"section_title": "Challenges to Democracy", "paragraphs": ["Despite significant improvements in political rights and civil liberties, many countries in the region still face considerable challenges. In a number of countries, weaknesses remain in the state's ability to deliver public services, ensure accountability and transparency, advance the rule of law, and ensure citizen safety and security. There also are numerous examples of elected presidents over the past three decades who left office early amid severe social turmoil and economic crises, the presidents' own autocratic actions contributing to their ouster, or high-profile corruption. Corruption scandals led to the 2015 resignation of Guatemala's president and contributed to the impeachment and removal from office of Brazil's president in 2016. ", "In recent years, the quality of democracy has eroded in several countries in the region. One factor contributing to this democratic erosion is increased organized crime. Organized crime has particularly affected Mexico and several Central American countries because of the increased use of the region as a drug transit zone and the associated rise in corruption, crime, and violence. A second factor negatively affecting democracy in several countries has been the executive's abuse of power. Elected leaders have sought to consolidate power at the expense of minority rights, leading to a setback in liberal democratic practices. Venezuela stands out in this regard, with the government of President Nicol\u00e1s Maduro repressing the opposition with force and manipulating state institutions to retain power. Media freedom deteriorated in several countries in recent years, precipitated by the increase in organized crime-related violence and by politically driven attempts to curb critical or independent media. ", "In 2018, several countries experienced significant political challenges. Peru's president resigned in March just ahead of a vote on impeachment on corruption charges. In Nicaragua, widespread protests against the government of President Daniel Ortega were suppressed violently, with over 300 people killed. In Brazil, far-right populist Jair Bolsonaro won the presidential race in October; given Bolosonaro's coarse campaign rhetoric, which included a vow to purge Brazil of leftist political opponents, many observers have concerns that his election could pose a threat to democracy and human rights. In Guatemala, efforts by President Jimmy Morales to undermine and expel the U.N.-backed International Commission against Impunity in Guatemala (CICIG) prompted widespread protests and expressions of international concern.", "Since 1973, the human rights group Freedom House has compiled an annual evaluation of political rights and civil liberties in which it categorizes countries worldwide as free , partly free , and not free . In its 2018 report (covering 2017), the group ranked two countries in the Latin American and Caribbean region as not free: Cuba and Venezuela. It ranked 10 countries as partly free\u2014Bolivia, Colombia, the Dominican Republic, Ecuador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, and Paraguay\u2014and the remaining 21 countries of the region as free. The report pointed to positive developments in Ecuador and Colombia. Freedom House lauded Ecuador's President Len\u00edn Moreno for moving away from the \"often repressive rule\" of his predecessor, Rafael Correa; for easing pressure on the media; and for proposing the restoration of term limits. A referendum on term limits and other reform measures was approved by a substantial margin in early February 2018. The Freedom House report also praised reform measures in Colombia to limit pretrial detention and for the continued expansion of state control in areas formerly controlled by left-wing rebels pursuant to the government's 2016 peace accord with the Revolutionary Armed Forces of Colombia (FARC).", "On the negative side, Freedom House pointed to concerning developments in Venezuela, Bolivia, Honduras, Nicaragua, and Mexico in 2017. Freedom House described Venezuela as continuing its \"descent into dictatorship and humanitarian crisis.\" In Bolivia, it expressed concern about actions by the country's constitutional court, which overturned presidential term limits that were supported by a 2016 referendum; the term limits would have prevented current President Evo Morales from seeking a fourth term. Freedom House criticized Honduras for flawed November 2017 presidential elections in which belatedly updated vote totals reversed an early vote count and handed victory to the incumbent, and it criticized Nicaragua for holding flawed municipal elections in 2017 favoring the party of President Daniel Ortega. (As discussed below, the situation in Nicaragua has deteriorated in 2018. Since April, there has been growing opposition to Ortega's rule; the government and its supporters have violently repressed this opposition.) In Mexico, Freedom House cited revelations of extensive state surveillance against journalists and civil society activists threatening to expose public corruption.", "Since 2006, the Economist Intelligence Unit (EIU) has produced an annual democracy index examining the state of democracy worldwide. The index classifies countries as full democracies , flawed democracies , hybrid regimes , and authoritarian regimes based on ratings for 60 indicators covering electoral process and pluralism, civil liberties, the functioning of government, political participation, and political culture. In its democracy index, the EIU examines 24 countries in Latin America and the Caribbean, not including 9 small English-speaking Caribbean countries. In its 2017 index, the EIU classified both Cuba and Venezuela as authoritarian regimes. Venezuela was downgraded to authoritarian for the first time because of the \"continued slide toward dictatorship\" and because of the government's violent suppression of opposition protests, jailing and disenfranchisement of opposition leaders, and sidelining of the opposition-dominated legislature. In its 2018 democracy index, the EIU added Nicaragua to its list of authoritarian countries, noting the \"aggressive repression strategy\" adopted by progovernment forces that led to numerous human rights violations and the deaths of over 300 people. ", "The 2018 EIU index classified five countries in the region\u2014Bolivia, El Salvador, Guatemala, Haiti, and Honduras\u2014as hybrid regimes, or countries characterized by weak rule of law, weak civil society, and, often, widespread corruption. The 2018 index also classified two countries in the region, Costa Rica and Uruguay, as full democracies and 14 countries as flawed democracies, or countries that have free and fair elections and respect basic civil liberties but exhibit weaknesses in other aspects of democracy. The report noted that governments in the region remain beset by corruption and the effects of transnational organized crime and that \"persistent deficiencies in governance and the practice of democracy have given way to a declining confidence in government, in formal political institutions, and in democracy itself.\" It also noted the return of populism to both Mexico and Brazil as disillusioned voters in both countries turned to populist candidates to \"stop the rot.\""], "subsections": []}, {"section_title": "Economic Outlook", "paragraphs": ["Whereas the 1980s were commonly referred to as the lost decade of development because many countries were bogged down with unsustainable public debt, the 1990s brought about a shift from a strategy of import-substituting industrialization to one focused on export promotion, attraction of foreign capital, and privatization of state enterprises. Latin America experienced an economic downturn in 2002 (brought about in part because of an economic downturn in the United States), but it recovered with strong growth rates until 2009, when a global economic crisis again affected the region with an economic contraction of almost 2%, according to International Monetary Fund (IMF) statistics. Some countries in the region experienced deeper recessions than others in 2009. Those more closely integrated with the U.S. economy, such as Mexico, were hit hardest; other countries with more diversified trade and investment partners experienced lesser downturns. ", "The region rebounded in 2010 and 2011, with economic growth rates of 6.1% and 4.6%, respectively, but growth began to decline annually after that, registering 1.3% in 2014 and 0.3% in 2015. The global decline in commodity prices significantly affected the region, as did China's economic slowdown and reduced appetite for imports. The region experienced an economic contraction of 0.6% in 2016, dragged down by recessions in Argentina and Brazil and by Venezuela's severe economic deterioration, in which the economy contracted 16.5%. In 2017, however, economic growth returned to the region, with 1.3% growth.", "In January 2019, the IMF estimated that economic growth in Latin America and the Caribbean declined slightly to 1.1% in 2018 and was projected to increase to 2% in 2019 and 2.5% in 2020 (see Table 2 ). Early in 2018, the IMF had forecast 1.9% regional growth for the year. However, Venezuela's continued economic decline and persistent economic challenges in several countries lowered growth.", "Latin America made significant progress in combating poverty and inequality from 2002 through 2014. In 2002, almost 45% of the region's population lived in poverty, but by 2014 that figure had dropped to 27.8%, representing 164 million people. Extreme poverty (currently defined by the World Bank as living on less than $1.90 per day) also declined over this period, from 11.2% in 2002, representing 57 million people, to 7.8% in 2014, or 46 million people. Two key factors accounting for this decline were increasing per capita income levels and targeted public expenditures, known as conditional cash transfer programs, for vulnerable sectors. ", "Since 2015, the poverty rate for Latin America increased to 30.2% of the region's population in 2017 or 184 million people. Likewise, extreme poverty in Latin America increased to 10.2% in 2017, representing 62 million people. The reversal in poverty reduction largely can be attributed to economic setbacks in Brazil and Venezuela, both of which experienced significant declines in per capita income levels, according to the U.N. Economic Commission for Latin America and the Caribbean. In contrast, poverty reduction has continued since 2015 in a number of countries in the region, including five countries that saw a percentage-point drop in poverty between 2016 and 2017: Argentina, Colombia, Costa Rica, El Salvador, and Paraguay. "], "subsections": []}]}, {"section_title": "U.S. Policy Toward Latin America and the Caribbean", "paragraphs": ["U.S. interests in Latin America and the Caribbean are diverse and include economic, political, security, and humanitarian concerns. Geographic proximity has ensured strong economic linkages between the United States and the region, with the United States being the major trading partner and largest source of foreign investment for many Latin American and Caribbean countries. Free-trade agreements (FTAs) have augmented U.S. economic relations with 11 countries in the region. Latin American nations, led by Venezuela, Mexico, and Colombia, supplied the United States with almost 28% of its imported crude oil in 2016. The Western Hemisphere is a large source of U.S. immigration, both legal and illegal; geographic proximity and economic and security conditions are major factors driving migration trends. Curbing the flow of illicit drugs from Latin America and the Caribbean has been a key component of U.S. relations with the region and a major interest of Congress for more than three decades. Over the past decade, the United States has engaged in close security cooperation with Mexico, Central America, and the Caribbean to combat drug trafficking and related violence. As described above, although most countries in the region have made enormous strides in terms of democratic political development since the 1980s, communist Cuba has remained under authoritarian rule since the 1959 Cuban revolution and undemocratic practices have risen in several countries, particularly in Venezuela, which many observers characterize as a dictatorship, and Nicaragua, which has grown increasingly authoritarian."], "subsections": [{"section_title": "Obama Administration Policy", "paragraphs": ["In its policy toward the region, the Obama Administration set forth a broad framework centered on four priorities: promoting economic and social opportunity, ensuring citizen security, strengthening effective democratic governance, and securing a clean energy future. In many respects, there was significant continuity in U.S. policy toward the region under President Obama; his Administration had many of the same policy approaches as the George W. Bush Administration. In addition, the Obama Administration emphasized partnership and shared responsibility, with policy conducted on the basis of mutual respect through engagement and dialogue. ", "Under the Obama Administration, the United States provided significant support to the region to combat drug trafficking and organized crime and to advance citizen security. Efforts included a continuation of Plan Colombia and its successor programs as well as the creation of the M\u00e9rida Initiative, begun in 2007 to support Mexico; the Central America Regional Security Initiative (CARSI), begun in 2008; and the Caribbean Basin Security Initiative (CBSI), begun in 2009. In 2015, spurred by a surge of unaccompanied children and other migrants from Central America seeking to enter the United States, the Obama Administration developed a broader approach known as the U.S. Strategy for Engagement in Central America aimed at improving security, strengthening governance, and promoting prosperity.", "On trade matters, the Obama Administration resolved outstanding congressional concerns related to FTAs with Colombia and Panama that were negotiated under the Bush Administration; this resolution led to congressional enactment of implementing legislation for the two FTAs in 2011. The Administration also concluded negotiations in 2015 for the proposed Trans-Pacific Partnership (TPP) trade agreement, which included Mexico, Chile, and Peru, among other nations. ", "In the absence of congressional action on comprehensive immigration reform, President Obama turned to executive action in 2012 with a program known as Deferred Action for Childhood Arrivals (DACA), which provided relief from deportation for certain immigrants who arrived as children. The Obama Administration also granted Temporary Protected Status (TPS) to Haitians in the United States after the country's massive earthquake in 2010. ", "In other policy changes, the Obama Administration announced a major policy shift toward Cuba, moving away from the long-standing sanctions-based approach toward a policy of engagement. With regard to the deteriorating political and economic situation in Venezuela, the Obama Administration pressed for dialogue to resolve the conflict. Then, prompted by Congress through passage of the Venezuela Defense of Human Rights and Civil Society Act of 2014 ( P.L. 113-278 ), the Administration imposed targeted sanctions in 2015 on Venezuelan officials involved in human rights abuses. "], "subsections": []}, {"section_title": "Trump Administration Policy", "paragraphs": ["The Trump Administration has taken actions that have changed the dynamics and outlook for U.S. relations with Latin America and the Caribbean. As discussed below, the State Department set forth a framework for U.S. policy toward the region in February 2018 that reflects continuity with long-standing U.S. objectives in the region. The framework, however, appears to be at odds with some of the Administration's actions, sometimes accompanied by tough rhetoric, on immigration, trade, and foreign aid. Although President Trump's cancellation of his planned attendance at the April 2018 Summit of the Americas in Peru was a lost opportunity to engage with hemispheric leaders, Vice President Mike Pence represented the United States at the summit. ", "The Trump Administration proposed deep cuts in assistance to Latin America and the Caribbean, a significant departure from past Administrations. The approximately $1.1 billion requested for the region for each of FY2018 and FY2019 would have reflected a decrease of 36% and 35%, respectively, from the $1.7 billion in assistance provided to the region in FY2017. (As noted below, Congress rejected the Administration's FY2018 request and funded foreign aid to the region at levels approaching assistance in FY2017; for FY2019, the 115 th Congress did not complete action on foreign aid appropriations, but bills in both houses would have continued to fund key U.S. initiatives in Colombia, Mexico, and Central America at levels approaching FY2017 levels. See \" Congress and Policy Toward the Region \" and \" U.S. Foreign Aid ,\" below.)", "On trade issues, President Trump shifted the long-standing policy of past Administrations that focused on increasing economic linkages with Latin America through reciprocal free trade agreements. He described past free trade agreements as detrimental to U.S. workers and industries and vowed to renegotiate new \"fair and reciprocal\" agreements. President Trump ordered U.S. withdrawal from the proposed Trans-Pacific Partnership (TPP) trade agreement in January 2017; the accord would have increased U.S. economic linkages with Mexico, Chile, and Peru. Similarly, the President strongly criticized NAFTA and warned repeatedly that the United States might withdraw from the agreement with Mexico and Canada. By the end of September 2018, all three countries had reached agreement on a proposed new United States-Mexico-Canada Agreement (USMCA), which would leave NAFTA largely intact but includes some changes, such as provisions regarding the dairy and auto industries. The Administration's imposition of duties on steel and aluminum imports in 2018 added new challenges to U.S. trade relations with several countries in the region. (See \" Trade Policy ,\" below.)", "Beyond trade, bilateral relations with Mexico have been tested because of inflammatory anti-immigrant rhetoric, President Trump's repeated calls for Mexico to pay for a border wall, and the Administration's September 2017 decision to end DACA (potentially affecting several hundred thousand Mexicans and more than 100,000 migrants from elsewhere in the hemisphere). Despite tensions, overall U.S.-Mexican relations remain cooperative, including security cooperation related to drug interdiction and efforts to bolster economic ties, particularly energy cooperation. (See \" Mexico ,\" below.)", "Other Trump Administration actions on immigration have caused concerns in the region. The Administration announced the termination of TPS for up to 5,300 Nicaraguans in January 2019; up to 58,000 Haitians in July 2019; up to 263,000 Salvadorans in September 2019; and up to 86,000 Hondurans in January 2020. The countries expressed concerns about whether they have the capacity to receive so many people and about the effects of potential deportations on their economies. The Administration's actions prompted court challenges; in October 2018, a federal court issued a preliminary injunction preventing the termination of TPS designations for Nicaragua, Haiti, and El Salvador, pending the outcome of the litigation. ", "Other immigration actions, such as the implementation of a \"zero tolerance\" policy toward illegal border crossings and an Attorney General decision in June 2018 that migrants' claims pertaining to gang violence or domestic abuse generally will not qualify them for asylum, could restrict the ability of many Central American migrants to receive asylum. (See \" Migration Issues ,\" below.)", "With regard to Cuba, President Trump unveiled a new policy in June 2017 that partially rolled back some of the Obama Administration's efforts to normalize relations. The most significant changes included restrictions on financial transactions with companies controlled by the Cuban military and the elimination of individual people-to-people travel. In another action affecting bilateral relations, the State Department downsized the staff at embassies in both capitals in September 2017 in response to unexplained injuries of U.S. personnel at the U.S. Embassy in Havana. (See \" Cuba \" below.)", "With regard to the Caribbean region, the State Department issued a multiyear strategy on U.S. policy toward the region as required by the United States-Caribbean Strategic Engagement Act of 2016 ( P.L. 114-291 ). The strategy established a framework for enhanced relations in six priority areas\u2014security, diplomacy, prosperity, energy, education, and health. In the aftermath of Hurricanes Irma and Maria, the United States provided some $23 million in humanitarian relief assistance to several Caribbean countries and foreign territories. (See \" Caribbean Region \" below.) ", "As the political and economic situation in Venezuela has continued to deteriorate, the Trump Administration has spoken out against the actions of the Maduro government and supported regional efforts to help resolve the situation. It also has imposed a variety of economic sanctions (both targeted and broader economic sanctions) and provided humanitarian assistance for Venezuelans who have fled to other countries. The Administration reportedly has considered additional sanctions aimed at limiting or prohibiting trade with Venezuela, although there are concerns that such sanctions could exacerbate the humanitarian situation without necessarily influencing the behavior of the Maduro government. (See \" Venezuela ,\" below.)", "In Nicaragua, as political unrest against the increasingly authoritarian rule of President Daniel Ortega began to grow in 2018, the Trump Administration spoke out strongly about against the Ortega government's use of violence and supported an OAS resolution condemning the violence. The Administration also has employed targeted sanctions (visa restrictions and asset freezing) against several individuals responsible for human rights abuses or significant corruption. ", "In Guatemala, the Administration strongly supported the role of the U.N.'s International Commission against Impunity in Guatemala (CICIG) in 2017, when it was under siege by the government of President Jimmy Morales. In 2018, however, some observers contend that the Administration has not spoken out strongly enough as the Morales government continues efforts to weaken CICIG. Although a State Department official testified to Congress in July 2018 about CICIG's important role in strengthening the rule of law, fighting impunity, and combatting corruption in Guatemala, a State Department readout of Secretary of State Mike Pompeo's September 2018 telephone call with President Morales raised questions about U.S. support for CICIG. The statement said that Pompeo and Morales discussed the importance of the Guatemalan government working with CICIG but also that the Secretary expressed continued U.S. support for \"a reformed CICIG\" and committed to working with Guatemala on implementing such reforms in the coming year. After President Morales announced in early January 2019 that he was going to expel CICIG, the U.S. Embassy in Guatemala issued a statement expressing concern about the future of anticorruption efforts in the country but did not specifically mention the president's actions against CICIG.", "The Trump Administration also warned about the activities of China and Russia in the region. The Administration's 2017 National Security Strategy contends that China \"seeks to pull the region into its orbit through state-led investments and loans,\" and that Russia is continuing \"its failed politics of the Cold War by bolstering its radical Cuban allies as Cuba continues to repress its citizens.\" The strategy asserts that \"both China and Russia support the dictatorship in Venezuela\" and \"are seeking to expand military linkages and arms sales across the region.\" In February 2018, then-Secretary of State Rex Tillerson warned \"against potential actors that are now showing up in our hemisphere,\" specifically referring to China and Russia. Tillerson spoke out against China's \"foothold in Latin America\" and asserted, \"Russia's growing presence in the region is alarming,\" noting its sales of arms and military equipment \"to unfriendly regimes who do not share or respect democratic values.\" ", "Following El Salvador's decision to switch diplomatic relations from Taiwan to China in August 2018, the White House issued a statement that it would reevaluate U.S. relations with the Salvadoran government. In September 2018, the State Department recalled for consultations the U.S. chiefs of mission from the Dominican Republic, El Salvador, and Panama related to those countries' decisions to switch diplomatic recognition from Taiwan to China. The Trump Administration's policy approach toward China's activities in the region is a departure from that of previous Administrations, which, while raising concerns about China's influence, emphasized engagement and consultations with China on Latin America. U.S. warnings about China have been met with skepticism in the region, with some countries calling on the United States to respect their sovereign decisions. (For additional information, see CRS In Focus IF10982, China's Engagement with Latin America and the Caribbean , by Mark P. Sullivan and Thomas Lum.) ", "Trump Administration Policy Framework. Vice President Mike Pence spoke on the Administration's policy toward the region in several speeches during, and just after, an August 2017 trip visiting Argentina, Chile, Colombia, and Panama. Similar to other U.S. officials speaking about U.S. policy in other parts of the world, the Vice President maintained that \"America First\" does not mean America alone. He acknowledged that prosperity and security for Latin America and the United States are inextricably linked. He maintained that transnational crime sustained by drug trafficking is the most immediate threat to security in the region, and he pledged continued U.S. support to combat it. ", "In the Trump Administration's second year, officials fleshed out its framework for U.S. policy in Latin America and the Caribbean. In February 2018, then-Secretary of State Tillerson set forth a framework focused on three pillars for U.S. engagement in the region\u2014economic growth and prosperity, security, and democratic governance. These three pillars have been long-standing U.S. policy objectives in Latin America and the Caribbean, and they match up with three of the Obama Administration's four policy priorities for the region (with the exception of securing a clean energy future). At the April 2018 Summit of the Americas in Peru, Vice President Pence emphasized that the Western Hemisphere nations are bound together by geography, history, and \"an enduring aspiration for freedom.\" U.S. Agency for International Development (USAID) Director Mark Green also advanced this theme of a \"hemisphere of freedom\" in an August 2018 speech that discussed the work of his agency largely within the same policy framework set forth by the State Department. ", "In some respects, the objectives and activities advanced by the State Department's framework for U.S. policy toward the region appear to contradict some of the political rhetoric by President Trump and the Administration's efforts to reduce U.S. foreign assistance to the region significantly. Moreover, as noted above, positive views in the region of U.S. leadership dropped in 2017 and 2018, influenced by disparaging political rhetoric and certain actions on immigration and trade. Such views could affect the willingness of countries in the region to cooperate with the United States on regional and global challenges, making it more difficult for the United States to engender support from individual countries when needed. ", "On November 1, 2018, National Security Adviser John Bolton made a speech in Miami, FL, on the Administration's policies in Latin America that warned about \"the destructive forces of oppression, socialism, and totalitarianism\" in the region. Reminiscent of Cold War political rhetoric, Bolton referred to Cuba, Nicaragua, and Venezuela as the \"troika of tyranny\" in the hemisphere that has \"finally met its match.\" He referred to the three countries as \"the cause of immense human suffering, the impetus of enormous regional instability, and the genesis of a sordid cradle of communism in the Western Hemisphere.\" As previewed in the speech, the Administration subsequently increased economic sanctions on all three countries. "], "subsections": []}]}, {"section_title": "Congress and Policy Toward the Region", "paragraphs": ["Congress traditionally has played an active role in policy toward Latin America and the Caribbean in terms of both legislation and oversight. Given the region's geographic proximity to the United States, U.S. foreign policy toward the region and domestic policy often overlap, particularly in areas of immigration and trade.", "The 115 th Congress rejected many of the Trump Administration's proposed cuts in foreign assistance to Latin America and the Caribbean for FY2018 in the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), enacted in March 2018. Congress provided an estimated $1.7 billion in foreign aid to the region, about 55% more than the Administration had requested for FY2018. Likewise, for FY2019, both the House and Senate Appropriations Committees reported out bills ( H.R. 6385 and S. 3108 , respectively) that would have funded key countries and initiatives at levels approaching FY2017 levels. The 115 th Congress approved two short-term continuing resolutions, P.L. 115-245 and P.L. 115-298 , providing FY2019 foreign aid appropriations at FY2018 levels through December 21, 2018, but did not complete full-year FY2019 funding, leaving it for the 116 th Congress. Two additional FY2019 House Appropriations Committee bills, H.R. 5952 (Commerce) and H.R. 6258 / H.R. 6147 (Financial Services), had provisions that would have tightened economic sanctions on Cuba, but the Senate Appropriations Committee's versions did not did not have similar provisions and the 115 th Congress did not complete action on these appropriations measures. ", "The John S. McCain National Defense Authorization Act for FY2019, P.L. 115-232 ( H.R. 5515 ), signed into law in August 2018, has several Latin America provisions. Section 1032 extended a prohibition on the use of funds in FY2019 to close or relinquish control of the U.S. Naval Station at Guantanamo Bay, Cuba (similar provisions were included in P.L. 115-244 , FY2019 military construction appropriations, and P.L. 115-245 , FY2019 Department of Defense appropriations). Section 1287 required a report from the Secretary of State, in coordination with the Secretary of Defense and other appropriate agencies, regarding narcotics trafficking corruption and illicit campaign finance in Honduras, Guatemala, and El Salvador, including the naming of officials involved in such activities. The conference report to the bill, H.Rept. 115-874 , also directed the Defense Intelligence Agency to submit a report on security cooperation between Russia and Cuba, Nicaragua, and Venezuela. ", "In December 2018, the 115 th Congress enacted the Nicaragua Human Rights and Anticorruption Act of 2018 ( P.L. 115-335 , H.R. 1918 ). As approved, the measure requires the United States to vote against any loan from the international financial institutions to Nicaragua, except to address basic human needs or promote democracy. The law also authorizes the President to impose sanctions (visa restrictions and assets blocking) on persons responsible for human rights violations or acts of corruption.", "In other action, the House approved H.R. 2658 in December 2017. Among its provisions, the bill would have authorized humanitarian assistance for Venezuela. Similar bills were introduced in the Senate\u2014 S. 1018 in May 2017 and a newer version, S. 3486 , in September 2018, but action was not completed on these initiatives.", "Both houses approved several resolutions on U.S. policy toward the region over the course of the 115 th Congress. ", "On Venezuela, the Senate passed S.Res. 35 in February 2017, which called for the release of political prisoners and support for dialogue and efforts at the OAS; the House passed H.Res. 259 in December, which urged Venezuela to hold free, fair, and open elections, release all political prisoners, and open a channel for international humanitarian assistance. On September 27, the House Committee on Foreign Affairs approved H.Res. 1006 , amended, which condemns the deteriorating situation in Venezuela and the regional humanitarian crisis it has caused; the committee agreed to seek House consideration of the bill under suspension of the rules. On Mexico, the Senate passed S.Res. 83 in March 2017, which called for the United States to support efforts by Mexico and China to stop the production and trafficking of illicit fentanyl into the United States; the House approved H.Res. 336 in December 2017, reaffirming its strong commitment to a bilateral partnership based on mutual respect. On Argentina, the House passed H.Res. 54 in April 2017, which expressed commitment to the bilateral partnership and commended Argentina for making far-reaching economic reforms; the Senate Foreign Relations Committee reported a similar resolution, S.Res. 18 , in June 2017. On Central America, the House passed H.Res. 145 in May 2017, which reaffirmed that combating corruption in El Salvador, Guatemala, and Honduras is an important U.S. policy interest. On Cuba, the Senate passed S.Res. 224 in April 2018, commemorating the legacy of Cuban democracy activist Oswaldo Pay\u00e1. On Nicaragua, the House passed H.Res. 981 in July 2018, \"condemning the violence, persecution, intimidation, and murders committed by the Government of Nicaragua against its citizens.\"", "For a discussion of potential issues for consideration in the 116 th Congress, see \" Outlook for the 116th Congress ,\" below. "], "subsections": [{"section_title": "Regional Issues", "paragraphs": [], "subsections": [{"section_title": "U.S. Foreign Aid", "paragraphs": ["The United States provides foreign assistance to the nations of Latin America and the Caribbean to support development and other U.S. objectives. U.S. policymakers have emphasized different strategic interests in the region at different times, from combating Soviet influence during the Cold War to promoting democracy and open markets since the 1990s. Over the past two years, the Trump Administration has sought to refocus U.S. assistance efforts in the region to address U.S. domestic concerns, such as irregular migration and transnational crime.", "The Trump Administration also has proposed significant cuts to U.S. assistance to Latin America and the Caribbean (see Table 3 ). In each of its annual budget proposals, the Administration has requested approximately $1.1 billion to be provided to the region through foreign assistance accounts managed by the State Department and the U.S. Agency for International Development (USAID). The FY2019 request would cut funding for nearly every type of assistance and would reduce aid for every Latin American and Caribbean nation. If enacted, U.S. assistance to the region would decline by $590 million (35%) compared to the FY2018 estimate. The Administration's FY2019 budget proposal also would eliminate the Inter-American Foundation, a small, independent U.S. foreign assistance agency that promotes grassroots development in the region.", "Congressional Action: After a series of five short-term continuing resolutions that funded most foreign aid programs at slightly below the FY2017 level, Congress passed the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), in March 2018. The act provided an estimated $1.7 billion of foreign assistance for Latin America and the Caribbean. The enacted amount is $607 million (55%) more than the Administration had requested for FY2018 but slightly less than Congress appropriated for the region in FY2017.", "The 115 th Congress did not complete action on foreign aid appropriations for FY2019. The House and Senate Appropriations Committees approved their respective FY2019 Department of State, Foreign Operations, and Related Programs appropriations measures, H.R. 6385 and S. 3108 , in June 2018. Although the bills and their accompanying reports ( H.Rept. 115-829 and S.Rept. 115-282 ) did not specify appropriations levels for every Latin American and Caribbean nation, the amounts the measures would have designated for key U.S. initiatives in Colombia, Mexico, and Central America would have exceeded the Administration's request significantly. Both measures also would have continued funding the Inter-American Foundation. Neither bill received floor consideration, however, and two continuing resolutions ( P.L. 115-245 and P.L. 115-298 ), that had funded foreign aid programs in the region at the FY2018 level expired on December 21, 2018.", "For additional information, see CRS Report R45089, U.S. Foreign Assistance to Latin America and the Caribbean: FY2018 Appropriations , by Peter J. Meyer. "], "subsections": []}, {"section_title": "Drug Trafficking and Gangs", "paragraphs": ["Latin America and the Caribbean feature prominently in U.S. counternarcotics policy due to the region's role as a source and transit zone for several illicit drugs destined for U.S. markets\u2014cocaine, marijuana, methamphetamine, and plant-based and synthetic opiates. Heroin abuse and opioid-related deaths in the United States have reached epidemic levels, raising questions about how to address foreign sources of opioids\u2014particularly Mexico, which has experienced a sharp uptick in opium poppy cultivation and the production of heroin and fentanyl (a synthetic opioid). Policymakers also are concerned that cocaine overdoses in the United States are on an upward trajectory. Rising cocaine usage is occurring as coca cultivation and cocaine production in Colombia, which supplies roughly 90% of cocaine in the United States, reached record levels in 2017.", "Whereas Mexico, Colombia, Peru, and most other source and transit countries in the region work closely with the United States to combat drug production and interdict illicit flows, the Venezuelan government does not. Public corruption in Venezuela also has made it easier for drug trafficking organizations to smuggle illicit drugs.", "Contemporary drug trafficking and transnational crime syndicates have contributed to degradations in citizen security and economic development in some countries, often resulting in high levels of violence and homicides. Despite efforts to combat the drug trade, many governments in Latin America, particularly in the Central American transit zone through which 90% of U.S.-bound cocaine passes, continue to suffer from overstrained criminal justice systems and overwhelmed law enforcement and border control agencies. Moreover, government corruption, including high-level cooperation with criminal organizations, frustrates efforts to interdict drugs, investigate and prosecute traffickers, and recover illicit proceeds. There is a widespread perception, particularly among many Latin American observers, that the continuing U.S. demand for illicit drugs is largely to blame for the Western Hemisphere's ongoing crime and violence problems.", "Criminal gangs with origins in southern California, principally the Mara Salvatrucha (MS-13) and the \"18 th Street\" gang, continue to undermine citizen security and subvert government authority in Central America. Gang-related violence has been particularly acute in El Salvador, Honduras, and urban areas in Guatemala, contributing to some of the highest homicide rates in the world. Although some gangs engage in local drug distribution, gangs generally do not have a role in transnational drug trafficking. Gangs have been involved in a range of other criminal activities, including extortion, money laundering, and weapons smuggling. Gang-related violence has fueled unauthorized migration to the United States.", "U.S. Policy. U.S. support to counter drug trafficking and reduce production in Latin America and the Caribbean has been a key focus of U.S. policy toward the region for more than 40 years. The most significant U.S. support program was Plan Colombia, begun in FY2000, which provided more than $10 billion to help Colombia combat both drug trafficking and rebel groups financed by the drug trade. After Colombia signed a historic peace accord with the country's largest leftist guerrilla group, the United States provided assistance to help implement the agreement under a new strategy called Peace Colombia. Colombia's decisions to end aerial fumigation and minimize forced eradication caused some tensions with U.S. officials concerned about rising cocaine production. Colombian President Ivan Duque has vowed to resume aerial fumigation. (Also see \" Colombia \" section below.)", "U.S. support to combat drug trafficking and reduce crime also has included a series of partnerships with other countries in the region: the M\u00e9rida Initiative, which has led to improved bilateral security cooperation with Mexico; the Central America Regional Security Initiative (CARSI); and the Caribbean Basin Security Initiative (CBSI). Under the Obama Administration, those initiatives combined U.S. antidrug and rule-of-law assistance with economic development and violence prevention programs intended to improve citizen security in the region.", "The Trump Administration's approach to Latin America and the Caribbean has focused heavily on U.S. security objectives. All of the aforementioned assistance programs have continued, but they place greater emphasis on combating drug trafficking, gangs, and other criminal groups than did policies under President Obama. The Trump Administration has also sought to reduce funding for each of the U.S. security assistance programs.", "President Trump also has prioritized combating gangs, namely the MS-13, which the Department of Justice (DOJ) has named a top priority for U.S. law enforcement agencies. U.S. law enforcement agencies, in cooperation with vetted units in Central America funded through CARSI, have brought criminal charges against thousands of MS-13 members in the United States. ", "Congressional Action: The 115 th Congress held hearings on opioids, which included consideration of heroin and fentanyl production in Mexico, Colombia's peace process and how it relates to drug policy, criminal groups in the Western Hemisphere, and Mexican transnational criminal organizations and border security. In March 2017, the Senate passed S.Res. 83 , which called for increased U.S. support for Mexico's efforts to combat fentanyl. The Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), provided increased FY2018 resources for Colombia and Mexico, slightly less funding for CARSI, and a stable level of funding for CBSI compared to FY2017. The legislation required a plan on how the State Department is addressing illicit opioid flows. Both the House and the Senate Appropriations Committees' versions of the FY2019 foreign aid appropriations bills ( H.R. 6385 and S. 3108 , respectively) largely would have maintained funding for the aforementioned security partnerships and continued to address the underlying conditions that contribute to crime and violence in addition to antidrug efforts. Congress likely will continue to fund and oversee counternarcotics and antigang programs and to consider the proper distribution of domestic and international drug control funding and the relative balance of civilian, law enforcement, and military roles in regional antidrug and antigang efforts.", "For additional information, see CRS In Focus IF10578, Mexico: Evolution of the M\u00e9rida Initiative, 2007-2019 , by Clare Ribando Seelke; CRS Report R41349, U.S.-Mexican Security Cooperation: The M\u00e9rida Initiative and Beyond , by Clare Ribando Seelke and Kristin Finklea; CRS Report R41576, Mexico: Organized Crime and Drug Trafficking Organizations , by June S. Beittel; CRS In Focus IF10400, Transnational Crime Issues: Heroin Production, Fentanyl Trafficking, and U.S.-Mexico Security Cooperation , by Clare Ribando Seelke and Liana W. Rosen; CRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for Congress , by Peter J. Meyer; CRS Report R44779, Colombia's Changing Approach to Drug Policy , by June S. Beittel and Liana W. Rosen; CRS Report R43813, Colombia: Background and U.S. Relations , by June S. Beittel; and CRS In Focus IF10789, Caribbean Basin Security Initiative , by Mark P. Sullivan."], "subsections": []}, {"section_title": "Trade Policy", "paragraphs": ["The Latin American and Caribbean region is one of the fastest-growing regional trading partners for the United States. Economic relations between the United States and most of its trading partners in the region remain strong, despite challenges, such as the renegotiation of NAFTA and President Trump's repeated threats to withdraw from the agreement, and diplomatic tensions and high levels of violence in some countries in the region. The United States accounts for roughly 33% of the Latin American and Caribbean region's merchandise imports and 46% of its merchandise exports. Most of this trade is with Mexico, which accounted for 73% of U.S. imports from the region and 62% of U.S. exports to the region in 2017. In 2017, total U.S. merchandise exports to Latin America and the Caribbean were valued at $393.2 billion and U.S. merchandise imports were valued at $430.0 billion (see Table 4 ).", "The United States strengthened economic ties with Latin America and the Caribbean over the past 24 years through the negotiation and implementation of FTAs. Starting with NAFTA in 1994, the United States currently has six FTAs in force involving 11 Latin American countries: Mexico, Chile, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Panama, and Peru. NAFTA is significant because of the market-opening provisions but more importantly because it established new rules and disciplines that influenced future trade agreements on issues important to the United States, such as intellectual property rights protection, services trade, agriculture, dispute settlement, investment, labor, and the environment.", "In addition to FTAs, the United States has extended unilateral trade preferences to some countries in the region through trade preference programs such as the Caribbean Basin Trade Partnership Act and the Generalized System of Preferences (GSP), which expired on December 31, 2017. GSP was reauthorized in March 2018 until the end of 2020, under Division M, Title V of the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ). Most countries in the region also belong to the World Trade Organization (WTO) and are engaged in WTO multilateral trade negotiations.", "In the 15 to 20 years after NAFTA, some of the largest economies in South America, such as Argentina, Brazil, and Venezuela, resisted the idea of forming comprehensive FTAs with the United States. As a result, there are numerous other bilateral and plurilateral trade agreements throughout the Western Hemisphere that do not include the United States. For example, the Pacific Alliance, a trade arrangement comprised of Mexico, Peru, Colombia, and Chile, is reportedly moving forward on a possible trade arrangement with Mercosur, composed of Brazil, Argentina, Uruguay, and Paraguay. ", "In a shift in U.S. trade policy toward the region and other parts of the world, President Trump views FTAs as detrimental for U.S. workers and industries. He has made NAFTA renegotiation and modernization a priority of his Administration's trade policy, stating that the agreement is \"the worst trade deal\" and repeatedly warning that the United States may withdraw from the agreement. After a year of NAFTA renegotiation talks, the United States and Mexico reached a preliminary bilateral agreement in August 2018, and the three countries reached an agreement on September 30, 2018, leading to the announcement of the United States-Mexico-Canada Agreement (USMCA). On November 30, 2018, the leaders of all three countries signed the USMCA; the agreement must be approved by Congress and ratified by the governments of Canada and Mexico before it can enter into force. The new agreement leaves NAFTA largely intact but includes some changes, such as provisions regarding the dairy and auto industries. The agreement has updated and modernized provisions on intellectual property rights protection, enforceable labor and environmental provisions, and digital trade provisions, as well as new provisions on corruption and state-owned enterprises. ", "U.S. trade actions in 2018 under Section 232 of the Trade Expansion Action Act of 1962 on aluminum and steel imports added new challenges to U.S. trade relations with the region. In 2018, President Trump issued two proclamations imposing tariffs on U.S. imports of certain steel and aluminum products using presidential powers granted by Section 232. The proclamations outlined the President's decisions to impose tariffs of 25% on steel and 10% on aluminum imports, with some flexibility on the application of tariffs by country. Argentina is exempted permanently from both steel and aluminum tariffs, and Brazil is exempted permanently from steel tariffs. Products from all other countries in Latin America and the Caribbean are subject to the tariffs. In response to U.S. action, Mexico began to impose retaliatory tariffs on 71 U.S. products, covering an estimated $3.7 billion worth of trade. The conclusion of the proposed USMCA did not resolve or address the Section 232 tariffs. ", "President Trump's January 2017 withdrawal from the proposed TPP, an FTA that included Mexico, Peru, and Chile as signatories, signified another change to U.S. trade policy. In March 2018, the other TPP parties, including Mexico, Peru, and Chile, signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which essentially will bring a modified TPP into effect. On December 30, 2018, the CPTPP entered into force among the first six countries to ratify the agreement\u2014Canada, Australia, Japan, Mexico, New Zealand, and Singapore. Chile, Peru, and the remaining three countries are expected to ratify the agreement eventually. Colombia has expressed plans to request entry into the CPTPP after the agreement enters into force among all partners. Some observers contend that U.S. withdrawal from TPP could damage U.S. competitiveness and economic leadership in the region, whereas others see the withdrawal as a way to prevent lower-cost imports and potential job losses.", "Congressional Action: The 115 th Congress, in both its legislative and its oversight capacities, faced numerous trade policy issues related to the renegotiation and modernization of NAFTA. Now that renegotiation has concluded, the proposed USMCA will face congressional examination. Congress must approve the proposed USMCA before it can enter into force; the agreement likely will be considered by the 116 th Congress. Lawmakers may take an interest as to whether U.S. negotiating objectives were followed, as required by Trade Promotion Authority. They also may consider how the proposed USMCA may affect U.S. industries, especially the auto industry, the U.S. and Mexican economies, North American supply chains, and overall trade relations with the LAC region. The recent Section 232 investigations on aluminum and steel imports raise a number of issues for Congress, including the potential impact of tariffs and retaliatory tariffs from Mexico on U.S. producers, domestic U.S. industries, and consumers. Energy reform in Mexico and the implications for U.S. trade and investment in energy also may be of interest to Congress. Policymakers also may consider how U.S. trade policy is perceived by the region and whether it may affect multilateral trade issues and cooperation on matters regarding security and migration. Another issue relates to U.S. market share. If countries such as Mexico, Chile, Colombia, and Peru continue trade and investment liberalization efforts with other countries without the United States, it may open the door to more intra-trade and investment among Argentina, Brazil, or possibly China and other Asian countries, which may affect U.S. exports.", "For additional information, see CRS In Focus IF10997, Proposed U.S.-Mexico-Canada (USMCA) Trade Agreement , by Ian F. Fergusson and M. Angeles Villarreal; CRS In Focus IF10047, North American Free Trade Agreement (NAFTA) , by M. Angeles Villarreal; CRS Report R44981, NAFTA Renegotiation and Modernization , by M. Angeles Villarreal and Ian F. Fergusson; CRS In Focus IF10038, Trade Promotion Authority (TPA) , by Ian F. Fergusson; CRS Report RL32934, U.S.-Mexico Economic Relations: Trends, Issues, and Implications , by M. Angeles Villarreal; and CRS Report R45249, Section 232 Investigations: Overview and Issues for Congress , coordinated by Rachel F. Fefer and Vivian C. Jones."], "subsections": []}, {"section_title": "Migration Issues", "paragraphs": ["Latin America's status as a leading source of both legal and unauthorized migration to the United States means that U.S. immigration policies significantly affect countries in the region and U.S. relations with their governments. Latin Americans comprise the vast majority of unauthorized migrants who have received relief from removal (deportation) through the Temporary Protected Status (TPS) program or the Deferred Action for Childhood Arrivals (DACA) initiative. As a result, several Trump Administration U.S. immigration policy changes have concerned countries in the region. These include the Administration's actions to increase immigration enforcement; end TPS designations for Haiti, El Salvador, Nicaragua, and Honduras; rescind DACA; criminally prosecute migrants who unlawfully enter the United States; and alter U.S. asylum policy. ", "The factors that have driven legal and unauthorized U.S.-bound migration from Latin America are multifaceted and have changed over time. They include familial ties, poverty and unemployment, demography, political and economic instability, natural disasters, proximity, economic conditions in the United States, and crime and violence. As an example, Venezuela, a historically stable country with limited emigration to the United States, has recently become a top country of origin among U.S. asylum seekers due to the crisis it has been undergoing (see \" Venezuela \" section below). ", "Apprehensions of, and encounters with, unauthorized migrants at the southwestern U.S. border declined during President Trump's first year in office compared to the same period in 2016, but began to rise in August 2017 and to follow seasonal patterns similar to the last few years. Many analysts attributed that initial decline, in part, to President Trump's tough campaign positions against unauthorized migration, executive action on border security and immigration enforcement (E.O. 13767), and efforts to fund the construction of a border wall. The executive order broadened the focus of interior enforcement to include unauthorized individuals who lack a criminal record. ", "President Trump's assertions that Mexico will pay for a border wall have periodically strained bilateral relations. The Administration's policies have also tested U.S. relations with other countries in the region. Mexico and Central America's northern triangle countries, which received approximately 90% of the 226,119 individuals removed in FY2017, have expressed concerns that potential large-scale removals could overwhelm their capacity to receive and reintegrate migrants. Central American countries also are concerned about the potential for increased removals of gang suspects with criminal records exacerbating security problems in their countries that they have been trying to address with U.S. foreign assistance. Mexico and the northern triangle countries have stepped up services at their U.S. consulates to provide legal and other services to those affected by changes in U.S. immigration policies.", "Termination of TPS . Since September 2017, the Department of Homeland Security (DHS) has announced plans to terminate TPS designations for six countries, four of which are located in Latin America (El Salvador, Haiti, Nicaragua, and Honduras). The large number (between 250,000-350,000) of Central Americans with TPS relief, along with their length of U.S. residence and resulting economic and family ties, have led some to support extending TPS for Central Americans. Continued recovery difficulties from natural disasters have led others to support continuing TPS for Haitians (up to 59,000). The Trump Administration maintains that ending TPS is a move toward interpreting the original intent of the program\u2014to provide temporary safe haven. In October 2018, a federal court issued a preliminary injunction preventing DHS from terminating the TPS designations for Nicaragua, Haiti, and El Salvador pending the outcome of litigation challenging DHS's termination decisions.", "Critics of the Administration's decisions to terminate TPS designations for these four countries predict that it is likely to have negative effects on mixed-status families (where adults with TPS have U.S. citizen children), hurt foreign relations, and diminish the flow of remittances on which many families in the region depend. Affected governments have expressed hope that the U.S. Congress will enact legislation to protect their constituents whose TPS protections may be ending. They are nevertheless working with USAID, other donors, and the private sector to prepare reintegration assistance and job opportunities for former TPS beneficiaries who may return to their countries of origin. ", "Rescission of DACA. On September 5, 2017, DHS announced its decision to rescind the DACA initiative. The future of the DACA initiative remains uncertain, as dueling lawsuits are underway in several federal courts to preserve DACA and to force its termination.", "According to data from U.S. Citizenship and Immigration Services, more than 95% of active DACA recipients were born in Latin America (80% were born in Mexico). The Mexican government has expressed hope that the U.S. Congress will enact legislation to protect individuals who have benefited from the DACA initiative, but also has said that it would welcome and support any DACA enrollees who may be deported. If DACA ends and its beneficiaries must return to their countries of origin, they could have difficulty continuing their education or working in countries struggling with youth unemployment. ", "\"Zero Tolerance\" Immigration Enforcement and Restrictions on Access to Asylum. For the last several years, Central American migrant families have arrived at the U.S.-Mexico border in relatively large numbers, many seeking asylum. In May 2018, DOJ implemented a zero tolerance policy toward illegal border crossing. Under the policy, DOJ prosecuted all adults apprehended while crossing the border illegally, with no exception for asylum seekers or those with minor children. This policy resulted in up to 3,000 children being separated from their parents. After a federal judge mandated that all separated children be reunited with their families in late June 2018, DHS reverted to some prior immigration enforcement policies. Some families have yet to be reunited.", "On June 11, 2018, then-Attorney General Sessions issued a decision maintaining that victims of gang violence or domestic abuse perpetrated by nongovernmental actors generally do not meet the standards required for receiving asylum in the United States. This decision could restrict the ability of many Central American migrants to quality for asylum. Restricting the availability of asylum in the United States to Central Americans, who face high rates of femicide and gang-related violence, could cause more emigration to Mexico and other countries less equipped to assist them.", "As increasing numbers of Central American migrants have sought asylum in Mexico, the Mexican government has bolstered its weak humanitarian protection system even as it deported more than 520,000 Central American migrants from 2015-November 2018. Mexico has resisted signing a \"safe third country agreement\" with the Administration, which could require asylum seekers who transit through Mexico to seek asylum there rather than in the United States. It has provided humanitarian visas and work permits, as well as access to asylum in Mexico, to Central American migrants who have transited the country in \"caravans\" and to those affected by a new DHS policy announced on December 20, 2018\u2014according to a DHS press release, the agency plans to return some non-Mexican asylum seekers (excluding unaccompanied minors) to Mexico to await their immigration court decisions. ", "Congressional Action: The 115 th Congress provided foreign assistance to help address some of the factors fueling migration from Central America and to support Mexico's migration management efforts ( P.L. 115-141 ). The Senate Appropriations Committee's version of the FY2019 foreign aid appropriation measure, S. 3108 , would have required that $18 million of the Economic Support Funds provided to Mexico be \"transferred to, and merged with\" funds appropriated under the Migration and Refugee Assistance account to help process the asylum applications of Central Americans in Mexico. It is possible that the 116 th Congress could include a similar provision in legislation to fund foreign aid programs for the remainder of FY2019. The 115 th Congress also did not determine the amount and type of funding to provide for border infrastructure for FY2019. Members of Congress introduced a range of proposals related to TPS and DACA during the 115 th Congress, but none was enacted. ", "For more information, see CRS In Focus IF10215, Mexico's Immigration Control Efforts , by Clare Ribando Seelke; CRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for Congress , by Peter J. Meyer; CRS Report R45266, The Trump Administration's \"Zero Tolerance\" Immigration Enforcement Policy , by William A. Kandel; CRS Report R44764, Deferred Action for Childhood Arrivals (DACA): Frequently Asked Questions , by Andorra Bruno; CRS Report R45158, An Overview of Discretionary Reprieves from Removal: Deferred Action, DACA, TPS, and Others , by Ben Harrington; and CRS Report RS20844, Temporary Protected Status: Overview and Current Issues , by Jill H. Wilson."], "subsections": []}, {"section_title": "Corruption", "paragraphs": ["Corruption has become a serious political concern for many countries in the region. Transparency International's Corruption Perceptions Index (CPI) for 2016 and 2017 found that respondents in most Latin American nations believed corruption was increasing. This perception is fueling civil society efforts to combat corrupt behavior and demand government accountability. Corruption continued to be a central theme in elections across the region in 2018, including pivotal, large countries, such as Colombia, Mexico, and Brazil. ", "Perceptions of growing corruption may reflect a greater awareness of corrupt behavior rather than an increase in actual corruption. This heightened awareness may be due to the growing use of social media to report violations and inform the citizenry, as well as to greater scrutiny by domestic media and investigative reporters, international investors, and, in some cases, congressional bodies or justice sector officials. Moreover, the region's growing middle class, with its rising expectations, seeks more from its politicians. ", "The Transparency International surveys found that in the 20 Latin American nations polled, respondents viewed politicians, political parties, and police as among the most corrupt. Citizens reported being most concerned about the use of public office for private gain\u2014graft, influence peddling, extortion, bribe solicitation, money laundering, and political finance violations were the most frequently cited. ", "Corruption in the Region. Venezuela scored lowest (most corrupt by perceptions of its citizenry) among the 20 countries surveyed in the region in the 2016 and 2017 CPI assessments. Public corruption has been a major drain on the economy, particularly in the country's foreign exchange regime. ", "In Brazil, a sprawling corruption investigation under way since 2014 has implicated much of the political class. Brazilian construction firm Odebrecht, in a landmark plea deal, admitted to paying some $735 million in bribes to politicians and office holders throughout Latin America to secure public contracts, producing fallout in several countries, including Colombia, the Dominican Republic, Ecuador, Panama, and Peru. ", "In Mexico, the costs of corruption reportedly reach as much as 5% of gross domestic product each year. Mexico's long-dominant Institutional Revolutionary Party, dogged by the issue in the July 2018 national elections, performed poorly in the final congressional and presidential vote. ", "In Peru, President Pedro Pablo Kuczynski, accused of taking Odebrecht bribes, stepped down in March 2018 to avoid impeachment. His successor, Martin Vizcarra, hosted the Summit of the Americas in April 2018 with a theme of fighting corruption. In the wake of a judicial corruption scandal concerning bribery in Peru's high court, Vizcarra unveiled a series of political and judicial reforms, including anticorruption measures, in August 2018. He then successfully challenged Peru's congress in September 2018 to a vote of confidence in his government with the goal of getting congress to approve the reforms, which include a significant revision of campaign finance rules among other measures. Those reforms were put before voters in a public referendum held in December 2018; three of the four measures on the ballot passed with more than 85% of the vote, including reforms to the magistracy council, finance regulations for politicians and their parties, and a prohibition on the immediate reelection of lawmakers. The only measure that did not pass was a controversial proposal to create a bicameral congress.", "In Central America, international entities have worked with the governments of Guatemala and Honduras to combat corruption. The U.N.'s International Commission against Impunity in Guatemala, established in 2006, assisted in corruption cases against Guatemala's former President Otto Perez-Molina and his vice president, who were jailed in 2015 after being forced from office. In 2016, the OAS worked with the Honduran government to establish a similar organization, the Mission to Support the Fight against Corruption and Impunity in Honduras (MACCIH). In 2018, as CICIG investigations have focused more closely on relatives of Guatemala's President Jimmy Morales, the government became openly more hostile to extending CICIG's mandate when it expires in September 2019. In September 2018, Morales barred CICIG's commissioner, former Colombian judge Iv\u00e1n Vel\u00e1squez, from reentering the country, an action opposed by Guatemala's constitutional court. In early January 2019, President Morales appeared to foment a constitutional crisis by ending CICIG's mandate prematurely, not permitting the commissioners to remain in the country through September 2019 in direct disobedience of the nation's top court. The Honduran government also has sought to undermine MACCIH over the past year.", "U.S. Policy. The 2017 U.S. National Security Strategy states that U.S. strategic interests related to corruption derive from the concern that criminals and terrorists can thrive in governments where corruption is rampant. Many studies indicate that corruption affects productivity and mars competitiveness in developing economies; it can spur migration and reduce GDP measurably when it is systematic. ", "U.S. assistance has supported anticorruption efforts in Central America. Since FY2016, some U.S. aid to the region has been subject to several conditions, including anticorruption measures by recipient governments. U.S. assistance has also supported multilateral efforts to address corruption in Guatemala and Honduras. Both CICIG and MACCIH also receive U.S. support. CICIG received some $50.5 million between FY2008 and FY2017 in U.S. funding. ", "The United States has also imposed targeted economic sanctions on individuals involved in significant acts of corruption. This has included Venezuelan officials involved in corruption pursuant to Executive Order 13692 and individuals from other countries such as the Dominican Republic and Nicaragua targeted pursuant to Executive Order 13818. ", "Congressional Action : Some analysts maintain that U.S. funding for anticorruption programming has been limited, noting worldwide spending in recent years has not exceeded $115 million annually depending on how anticorruption is defined. Nevertheless, Congress has taken steps to condition U.S. assistance, support anticorruption efforts and training for police and justice personnel, and backed the Trump Administration's use of targeted sanctions. Congress could in coming months oversee changes to NAFTA related to corruption in the proposed USMCA, which includes a separate chapter with anticorruption provisions. ", "In May 2017, the House passed H.Res. 145 , reaffirming that combatting corruption is an important U.S. policy interest in the northern triangle countries of Central America, acknowledging the important work of CICIG and MACCIH, and encouraging anticorruption efforts in the northern triangle countries. In July 2017, the Senate Foreign Relations Committee reported S. 1631 , a foreign relations authorization bill with a title focused on combating public corruption worldwide. The FY2019 John S. McCain National Defense Authorization Act (NDAA), P.L. 115-232 , signed into law in August 2018, contains a provision in Section 1287 requiring a report on drug trafficking and corruption in Central America's northern triangle countries, including identifying government officials and other individuals involved in such activities. As noted in the section on \" Central America's Northern Triangle \" below, Congress has continued to support funding for CICIG and MACCIH in FY2018 and FY2019.", "For additional information, see CRS In Focus IF10802, Spotlight on Public Corruption in Latin America , by June S. Beittel."], "subsections": []}]}, {"section_title": "Selected Country and Subregional Issues", "paragraphs": [], "subsections": [{"section_title": "Argentina", "paragraphs": ["Current President Mauricio Macri\u2014leader of the center-right Republican Proposal and the Cambiemos (Let's Change) coalition representing center-right and center-left parties\u2014won the 2015 presidential election in a close race. Macri's election ended 12 years of rule by the Kirchners (N\u00e9stor Kirchner, 2003-2007, and Cristina Fern\u00e1ndez de Kirchner, 2007-2015) from the leftist faction of the Peronist party. The Kirchners' rule helped Argentina emerge from a severe economic crisis in 2001-2002 but was characterized by protectionist and unorthodox economic policies and increasing corruption\u2014former President Fern\u00e1ndez is now facing multiple investigations for corruption. ", "President Macri moved swiftly to usher in a series of market-oriented economic policy changes. His government also reached a deal with remaining private creditors in 2016 that ended the country's 15-year default, an action that allowed the government to repair its \"rogue\" debtor status and resume borrowing in international capital markets. Although adjustment measures contributed to a 1.8% economic contraction in 2016, the economy grew by 2.9% in 2017, according to the International Monetary Fund (IMF). ", "In early 2018, the IMF was forecasting almost 2% growth for the year, but Argentina's economic difficulties, including a severe drought affecting agricultural exports, thwarted those expectations; the IMF is now forecasting an economic contraction of 2.6%. Inflation, which was almost 25% at the end of 2017, is forecast to rise to 40% by the end of 2018. As pressure on the peso increased in April, the government turned to the IMF for support. The IMF approved a three-year, $50 billion program in June, with almost $15 billion made available immediately for budget support. As the economy continued to decline, the government reached a revised agreement with the IMF in September to increase its total support to about $57 billion through 2021. After an October 2018 IMF review, Argentina received an additional $5.7 billion, bringing total IMF disbursements to about $20.4 billon.", "Despite wide-scale protests over austerity measures, the Macri government secured legislative approval in November 2018 for spending cuts and tax increases required under the IMF program. Argentina's economic turbulence has taken a toll on President Macri's popularity, which could threaten his political coalition and make a reelection bid in October 2019 more difficult. Although the Peronist party remains divided, a candidate from its moderate faction could pose a strong bid for the presidency.", "In the foreign policy arena, the Macri government improved relations with neighboring Brazil and Uruguay and other promarket countries in the region. It has been deeply critical of the antidemocratic actions of the Maduro government in Venezuela. ", "U.S.-Argentine relations generally have been characterized by robust commercial relations and cooperation on such issues as nonproliferation, human rights, education, and science and technology. Under the Kirchner governments, there were periodic tensions in relations. The Obama Administration moved swiftly to engage the Macri government on a range of bilateral, regional, and global issues. Strong bilateral relations are continuing under the Trump Administration. President Macri visited the White House in April 2017, and the two leaders underscored their commitment to expand trade and investment and pledged strengthened partnership to combat narcotics trafficking, money laundering, terrorist financing, corruption, and other illicit finance activities. They also agreed to establish a working group for engagement on cyber issues. In September 2018, amid Argentina's economic difficulties, President Trump reaffirmed strong U.S. support for Argentina and Macri's engagement with the IMF. President Trump held a bilateral meeting with President Macri in Argentina on November 30, 2018, on the sidelines of the Group of 20 (G-20) summit hosted by Argentina. The two countries reached bilateral agreements on educational exchange programs, national park conservation efforts, health cooperation, aviation safety, and energy sector cooperation. ", "Congressional Action : Congress has expressed support for close relations with Argentina. In the 115 th Congress, the House passed H.Res. 54 in April 2017, which expressed commitment to the bilateral partnership and commended Argentina for its economic reforms. In June 2017, the Senate Committee on Foreign Relations reported a similar resolution, S.Res. 18 . Congress provided $2.5 million in FY2018 foreign assistance ( P.L. 115-141 ) to support Argentina's counterterrorism, counternarcotics, and law enforcement capabilities.", "Over the years, Congress has expressed concern about Argentina's progress in investigating two terrorist bombings in Buenos Aires\u2014the 1992 bombing of the Israeli embassy that killed 29 people and the 1994 bombing of the Argentine-Israeli Mutual Association (AMIA) that killed 85 people\u2014as well as the 2015 death of AMIA special prosecutor Alberto Nisman. H.Res. 201 , reported by the House Foreign Affairs Committee in May 2017, would have expressed support for Argentina's investigation of the bombings. Two other resolutions, S.Res. 354 and H.Res. 704 , would have commended Nisman's work and life and called for a swift, transparent investigation into his death.", "For additional information, see CRS In Focus IF10932, Argentina: An Overview , by Mark P. Sullivan; and CRS In Focus IF10991, Argentina's Economic Crisis , by Rebecca M. Nelson."], "subsections": []}, {"section_title": "Brazil", "paragraphs": ["Occupying almost half of South America, Brazil is the fifth-largest and the fifth-most populous country in the world. Given its size and tremendous natural resources, Brazil has long had the potential to become a world power. Its rise to prominence has been hindered by setbacks, however, including an extended period of military rule (1964-1985) and uneven economic performance. Brazil gradually consolidated liberal democracy following its political transition, and it implemented economic reforms in the 1990s that laid the foundation for stronger growth. A boom in international demand for Brazilian commodities\u2014such as oil, iron, and soybeans\u2014during the first decade of the 21 st century fueled a period of rapid economic expansion, which contributed to, and was reinforced by, the growth of Brazil's middle class. In addition to providing the Brazilian government with the resources necessary to address long-standing social disparities, this economic growth strengthened Brazil's international stature.", "Over the past several years, however, Brazil has struggled to emerge from a series of domestic crises. The economy contracted by nearly 7% from 2014 to 2016, according to the IMF, due to a decline in global commodity prices and the government's economic mismanagement. Although economic growth returned in 2017, the national unemployment rate remains above 11% and several million Brazilians who fell out of the middle class during the recession remain in poverty. At the same time, a sprawling corruption investigation under way since 2014 has implicated politicians from across the political spectrum and many of the country's most prominent business executives. The scandal contributed to the controversial impeachment of President Dilma Rousseff (2011-2016). It also fueled discontent with the country's political class, which was exacerbated by rising levels of violence and the enactment of unpopular economic reforms under President Michel Temer (2016-2018). Antiestablishment sentiment propelled right-wing populist Jair Bolsonaro to victory in the country's October 2018 presidential election; he began his four-year term on January 1, 2019.", "The United States traditionally has enjoyed robust political and economic relations with Brazil, though the countries' independent foreign policies and occasionally divergent national interests have led to some disagreements. U.S. trade policy has generated some friction over the past year as Brazilian officials have objected to the Trump Administration's decision to impose an import quota on Brazilian steel. Nevertheless, the countries have sought to increase cooperation in other areas, launching a new Permanent Forum on Security, collaborating on the provision of humanitarian assistance to Venezuelan migrants, and continuing negotiations over potential U.S. access to Brazil's Alc\u00e2ntara space launch center. President Bolsonaro has called for closer alignment with the United States, and U.S. and Brazilian officials have begun discussing ways to bolster commercial and defense ties and work together on global concerns.", "Congressional Action: During the 115 th Congress, several Members raised concerns about the state of democracy and human rights in Brazil. They condemned the March 2018 assassination of Rio de Janeiro City Councilor Marielle Franco, questioned the judicial process that led to the imprisonment of former president Luiz In\u00e1cio Lula da Silva (2003-2010), and called on the Trump Administration to engage with President Bolsonaro to ensure human rights protections for marginalized communities. ", "The 115 th Congress also continued long-standing U.S. support for conservation efforts in Brazil. The Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) provided $10.5 million for environmental programs in the Brazilian Amazon. The FY2019 foreign aid appropriations measures reported in the House and Senate both would have continued such assistance; the House Appropriations Committee's bill, H.R. 6385 , would have provided $10.5 million and the Senate Appropriations Committee's bill, S. 3108 , would have provided $11 million.", "For additional information, see CRS Insight IN10976, Brazil's Presidential Election , by Peter J. Meyer; and CRS In Focus IF10447, U.S.-Brazil Trade Relations , by M. Angeles Villarreal."], "subsections": []}, {"section_title": "Caribbean Region", "paragraphs": ["The Caribbean is a diverse region of 16 independent countries and 18 overseas territories that include some of the hemisphere's richest and poorest nations. Among the region's independent countries are 13 island nations stretching from the Bahamas in the north to Trinidad and Tobago in the south; Belize, which is geographically located in Central America; and Guyana and Suriname, located on the north-central coast of South America (see Figure 2 ). ", "In June 2017, the State Department submitted a multiyear strategy for the Caribbean (required by P.L. 114-291 , the United Sates-Caribbean Strategic Enhancement Act of 2016). The strategy established a framework to strengthen U.S.-Caribbean relations in six priority areas: (1) security, with the objectives of countering transnational crime and terrorist organizations and advancing citizen security; (2) diplomacy, with the goal of increasing institutionalized engagement to forge greater cooperation at the OAS and U.N.; (3) prosperity, including the promotion of sustainable economic growth and private sector-led investment and development; (4) energy, with the goals of increasing U.S. exports of natural gas and the use of U.S. renewable energy technologies; (5) education, focusing on increased exchanges for students, teachers, and other professionals; and (6) health, including a focus on long-standing efforts to fight infectious diseases such as HIV/AIDS and Zika.", "Because of their geographic location, many Caribbean nations are vulnerable to use as transit countries for illicit drugs from South America destined for the U.S. and European markets. Many Caribbean countries also have suffered high rates of violent crime, including murder, often associated with drug trafficking activities. In response, the United States launched the Caribbean Basin Security Initiative (CBSI) in 2009, a regional U.S. foreign assistance program seeking to reduce illicit trafficking in the region, advance public safety and security, and promote social development. Congress has supported funding for the CBSI. From FY2010 through FY2018, Congress appropriated almost $559 million for the CBSI, including $57.7 million in each of FY2017 and FY2018. These funds benefitted 13 Caribbean countries. The program has targeted assistance in five areas: maritime and aerial security cooperation, law enforcement capacity building, border/port security and firearms interdiction, justice sector reform, and crime prevention and at-risk youth. ", "Many Caribbean nations also depend on energy imports and, over the past decade, have participated in Venezuela's PetroCaribe program, which supplies Venezuelan oil under preferential financing terms. The United States launched the Caribbean Energy Security Initiative (CESI) in 2014, with the goal of promoting a cleaner and more sustainable energy future in the Caribbean. The initiative included a variety of U.S. activities to facilitate cleaner energy resources; develop collaborated networks on clean energy; finance clean energy projects; increase energy efficiency; and expand access to electricity, information, and technology. ", "In September 2017, Hurricanes Irma and Maria caused widespread damage in several Caribbean countries and foreign territories, especially in the Eastern Caribbean. Hurricane Irma struck during the first week of September, causing catastrophic damage to the island of Barbuda, with 95% of structures seriously damaged or destroyed. Hurricane Maria struck during the third week of September, killing 27 people in Dominica and causing significant structural damage to most buildings and severe damage to the agricultural sector. In the aftermath of the hurricanes, the United States provided almost $23 million in humanitarian funding to six Caribbean countries and foreign territories, including Antigua and Barbuda, Dominica, the Bahamas, St. Kitts and Nevis, and the foreign territories of St. Martin (French) and St. Maarten (Dutch).", "Congressional Action : For each of FY2018 and FY2019, the Trump Administration requested $36.2 million for the CBSI, about a 36% decrease from the $57.7 million provided in FY2017. For FY2018, Congress continued to fund the CBSI at the same level as in FY2017, $57.7 million, as set forth in the Consolidated Appropriations Act, 2018 ( P.L. 115-141 , Explanatory Statement, Division K). The law also provided $2 million for the CESI.", "For FY2019, both the House and Senate versions of the foreign aid appropriation bill would have rejected the Administration's proposed cuts for the CBSI. The House Appropriations Committee's bill, H.R. 6385 ( H.Rept. 115-829 ), would have provided $58 million for the CBSI, while the Senate Appropriations Committee's version, S. 3108 ( S.Rept. 115-282 ), would have provided $57.7 million. The report to the Senate bill also would have provided $2 million for the CESI to support enhanced efforts to help Latin American and Caribbean countries achieve greater energy independence from Venezuela. As noted above, the 115 th Congress did not complete action on FY2019 appropriations, but it did approve a series of continuing resolutions that continued FY2019 funding at the FY2018 level through December 21, 2018, leaving final action on FY2019 funding to the 116 th Congress.", "In July 2017, the House Western Hemisphere Subcommittee held an oversight hearing on the State Department's new multiyear strategy on the Caribbean (see Appendix ). ", "For additional information, see CRS In Focus IF10789, Caribbean Basin Security Initiative , by Mark P. Sullivan; CRS In Focus IF10666, The Bahamas , by Mark P. Sullivan; CRS In Focus IF10407, Dominican Republic , by Clare Ribando Seelke; CRS In Focus IF10912, Jamaica , by Mark P. Sullivan; CRS In Focus IF10914, Trinidad and Tobago , by Mark P. Sullivan; and CRS Report R45006, U.S. Liquefied Natural Gas (LNG) Exports: Prospects for the Caribbean , by Michael Ratner et al. Also see sections on \" Cuba \" and \" Haiti ,\" below. "], "subsections": []}, {"section_title": "Central America's Northern Triangle", "paragraphs": ["Central America has received renewed attention from U.S. policymakers in recent years, as the region has become a major transit corridor for illicit drugs and a significant source of irregular migration to the United States. These narcotics and migrant flows are the latest symptoms of deep-rooted challenges in the region, including widespread insecurity, fragile political and judicial systems, and high levels of poverty and unemployment. ", "The Obama Administration determined it was in the national security interests of the United States to work with Central American nations to improve security, strengthen governance, and promote prosperity in the region. Accordingly, the Obama Administration launched a new, whole-of-government U.S. Strategy for Engagement in Central America and requested a significant increase in foreign assistance for the region to support the strategy's implementation. Congress appropriated nearly $1.5 billion of aid for Central America in FY2016 and FY2017, allocating most of the funds to El Salvador, Guatemala, and Honduras\u2014the \"Northern Triangle\" countries of Central America (see Figure 3 ). Congress required a portion of the aid to be withheld, however, until the Northern Triangle governments took steps to improve border security, combat corruption, protect human rights, and address other congressional concerns.", "The Trump Administration has maintained the U.S. Strategy for Engagement in Central America while seeking to enact some significant changes in U.S. policy toward the region. Over the past two years, the Administration has sought to cut foreign aid to Central America by more than a third and has placed a greater emphasis on security concerns. As noted above (\" Migration Issues \"), the Administration also has implemented a series of immigration policy changes that affect Central Americans living in the United States without authorization, including the phaseout of the DACA program and the termination of TPS for Salvadorans and Hondurans; those decisions currently are being contested in court. The Northern Triangle governments have raised concerns that the Administration's efforts to reduce assistance while simultaneously increasing deportations could exacerbate poverty and instability in the region. ", "The Northern Triangle countries, with U.S. support, have made some tentative progress over the past three years. They have implemented some policy changes intended to stabilize their economies, but the improved macroeconomic situation has yet to translate into better living conditions for many residents since the governments have not invested in effective poverty-reduction programs. Security conditions also have improved in some respects, as homicide rates have declined for three consecutive years. At the same, the Northern Triangle countries continue to contend with some of the highest rates of violent crime in the world and impunity remains widespread. The countries' attorneys general\u2014with the support of the U.N.-backed International Commission against Impunity in Guatemala (CICIG) and the Organization of American States-backed Mission to Support the Fight against Corruption and Impunity in Honduras (MACCIH)\u2014have made significant progress in the investigation and prosecution of high-level corruption cases. Their efforts have generated fierce backlashes, however, and the Guatemalan and Honduran governments repeatedly have sought to undermine CICIG and MACCIH over the past year. (Also see section on \" Corruption ,\" above.)", "Congressional Action: The 115 th Congress continued to demonstrate support for the U.S. Strategy for Engagement in Central America, though it began to reduce annual funding for the initiative. The Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), provided an estimated $626.5 million for the Central America strategy, which is $166.5 million more than the Administration requested for FY2018 but $73.2 million less than Congress appropriated for the initiative in FY2017. The FY2019 foreign aid appropriations measures reported out of the House and Senate Appropriations Committees in June 2018, H.R. 6385 and S. 3108 , would have provided $595 and $515.5 million, respectively, to continue implementing the Central America strategy. The Trump Administration requested $435.5 million for Central America in FY2019. Other bills introduced during the 115 th Congress, such as S. 3540 and H.R. 4796 , included provisions intended to guide U.S. policy and improve the effectiveness of the Central America strategy.", "At the same time, Congress remained concerned about widespread corruption in the region. In May 2017, the House adopted a resolution, H.Res. 145 , that recognized the anticorruption efforts of CICIG, MACCIH, and the attorneys general of El Salvador, Guatemala, and Honduras and called on the Northern Triangle governments to provide the attorneys general with the support, resources, and independence they need to carry out their responsibilities. Congress also approved a provision included in the FY2019 National Defense Authorization Act ( P.L. 115-232 , \u00a71287) that will require the Secretary of State to report the names of Salvadoran, Guatemalan, and Honduran officials known to have engaged in, or facilitated, acts of grand corruption or narcotics trafficking. Moreover, some Members of Congress spoke out about efforts to hinder anticorruption efforts in the Northern Triangle, particularly the Guatemalan president's attempts to undermine and expel CICIG, and called for sanctions to be imposed on corrupt officials.", "Congress also appropriated funding to support anticorruption efforts. The Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), provided $6 million for CICIG and $31 million for MACCIH and the Northern Triangle's attorneys general. Some Members of Congress sought to suspend U.S. funding for CICIG after a Russian family convicted of participating in a passport forgery network in Guatemala alleged that the Russian government was using CICIG to persecute Russian dissidents. The U.S. State Department found no evidence supporting the allegations, however, and U.S. funding for the commission continued. The House and Senate Appropriations Committees both recommended continued funding for CICIG, MACCIH, and the attorneys general in their FY2019 foreign aid appropriations measures, H.R. 6385 and S. 3108 .", "For additional information, seeCRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for Congress , by Peter J. Meyer; CRS In Focus IF10371, U.S. Strategy for Engagement in Central America: An Overview , by Peter J. Meyer; CRS Report R43616, El Salvador: Background and U.S. Relations , by Clare Ribando Seelke; CRS Report R42580, Guatemala: Political and Socioeconomic Conditions and U.S. Relations , by Maureen Taft-Morales; CRS Report RL34027, Honduras: Background and U.S. Relations , by Peter J. Meyer."], "subsections": []}, {"section_title": "Colombia", "paragraphs": ["Colombia is a key U.S. ally in Latin America. Because of Colombia's prominence in the production of illegal drugs, the United States and Colombia forged a close relationship over the past two decades to respond to mutual challenges. Focused initially on counternarcotics, and later on counterterrorism, a program called Plan Colombia laid the foundation for a security partnership between the two countries. ", "Between FY2000 and FY2016, the U.S. Congress appropriated more than $10 billion of assistance from U.S. State Department and Department of Defense accounts to carry out Plan Colombia and its successor strategies. Plan Colombia and its successors were both broad frameworks for U.S. assistance and ways to synchronize the support provided by various U.S. government agencies. Originally designed as a 6-year strategy to end the country's decades-long conflict, eliminate drug trafficking, and promote development, Plan Colombia ultimately became a 17-year U.S.-Colombian bilateral effort. Several analysts consider Plan Colombia a U.S. foreign policy success, although critics point to enduring problems, including illegal drug exports; uneven development, especially in rural areas; and continued murders of human rights and social activists. Revenues from cocaine and heroin trafficking provided resources to the Revolutionary Armed Forces of Colombia (FARC), the largest leftist guerrilla group operating in the country; the National Liberation Army (ELN), the country's second-largest rebel group; and Colombia's rightwing paramilitaries, known as the Self Defense Forces of Colombia (AUC), although the group formally demobilized in 2006. These three groups engaged in a multisided, violent conflict for decades, and the U.S. government declared all three foreign terrorist organizations.", "In August 2018, Iv\u00e1n Duque, a former senator in the Colombian Congress and member of the right leaning Democratic Center (CD) party, was inaugurated as Colombia's new president, succeeding President Juan Manuel Santos, who served two terms. Duque is the first \"peacetime\" president after more than five decades of conflict, inheriting a controversial peace agreement, which was the central legacy of President Santos and which won him the Nobel peace prize. The Santos government engaged in more than 50 rounds of intense, formal peace talks with the FARC from 2012 to 2016, which produced a peace accord that was ratified by the Colombian Congress in November 2016. President Duque and the CD party were vocal critics of the peace accord and boycotted the final vote in Congress. In the March 2018 legislative elections, the CD party moved from being in opposition in the Senate to become the dominant party. ", "The national elections were notable for their relative lack of violence and higher voter turnout than in recent decades. Duque has set a course for economic renewal and lower taxes, fighting criminality, and rebuilding confidence in the country's institutions. In September 2018, President Duque outlined his broad policy goals in a speech before the U.N. General Assembly, where he denounced the authoritarian government of Venezuelan President Nicol\u00e1s Maduro and proposed that his government take a lead role in containing Maduro's damage. Maduro's government has spawned a humanitarian crisis that has led to an exodus of Venezuelans fleeing to nearby countries, especially neighboring Colombia. (See \" Venezuela \" section.)", "According to U.S. estimates, Colombia in 2017 cultivated an unprecedented 209,000 hectares of coca, from which cocaine is derived, capable of generating 921 metric tons of cocaine. The U.N. estimates for 2017, which typically differ in quantity but follow the same trends as U.S. estimates, stated that Colombia's potential production of cocaine reached nearly 1,370 metric tons, 31% above its 2016 estimate. Cocaine exports, primarily to the U.S. market, remain a concern for U.S. lawmakers, despite Colombia's economic stability and improving security, in part due to the demobilization of about 11,000 former FARC.", "Key issues in the U.S.-Colombian relationship are implementing the Colombian government's peace accord with the FARC; fighting organized crime, which has flared since the FARC demobilized; and reducing corruption. In August 2018, Colombia held a referendum on measures to reduce public corruption that barely missed its threshold and did not pass. The U.S and Colombian governments have joint efforts to address the spike in assassinations of social leaders and human rights defenders and to more effectively combat cocaine production. In meetings between President Duque and U.S. Secretary of State Mike Pompeo in early January 2019, the two partners discussed cooperation on counternarcotics, peace accord implementation, and trade, and Pompeo vowed U.S. assistance to Colombia aimed at decreasing coca production by 50% by 2023.\u00a0", "Congressional Action: In May 2017, Congress enacted a FY2017 omnibus appropriations measure ( P.L. 115-31 ) that funded programs in Colombia at $391.3 million. The FY2018 omnibus appropriations measure, approved by Congress in March 2018 ( P.L. 115-141 ), again provided $391.3 million to support Colombia's transition to peace and peace accord implementation, address inequalities in historically marginalized areas, reintegrate demobilized fighters, and continue counternarcotics efforts, such as building state presence in former FARC-held areas. The Trump Administration's FY2019 budget request for Colombia was $265 million, approximately a 32% below the funds appropriated by Congress in FY2018, whereas both the House and Senate appropriations bills, H.R. 6385 and S. 3108 , would again maintain the funding at $391.3 million. The Administration's request would reduce postconflict recovery programs and place greater emphasis on counternarcotics and security. ", "Colombia also has received additional U.S. humanitarian funding to help it cope with more than 1 million Venezuelan migrants. The U.S. government is providing humanitarian and emergency food assistance and helping to coordinate and support a regional response to the migration crisis. As of September 30, 2018, U.S. government humanitarian funding for the Venezuela response totaled approximately $96.5 million for both FY2017 and FY2018 combined, of which $54.8 million was for Colombia. ", "For additional information, see CRS Report R43813, Colombia: Background and U.S. Relations , by June S. Beittel; CRS Report R44779, Colombia's Changing Approach to Drug Policy , by June S. Beittel and Liana W. Rosen; CRS In Focus IF10817, Colombia's 2018 Elections , by June S. Beittel and Edward Y. Gracia."], "subsections": []}, {"section_title": "Cuba", "paragraphs": ["Cuba remains a one-party authoritarian state with a poor record on human rights. First Vice President Miguel D\u00edaz-Canel succeeded Ra\u00fal Castro as president in April 2018, but Castro continues to head the Cuban Communist Party until 2021. The selection of D\u00edaz-Canel, now 58 years of age, reflects the generational change in Cuban leadership that began several years ago and marks the first time since the 1959 Cuban revolution that a Castro is not in charge of the government. Over the past decade, Cuba has implemented gradual market-oriented economic policy changes, but critics maintain that it has not taken enough action to foster sustainable economic growth. Looking ahead, D\u00edaz-Canel continues to faces two significant challenges\u2014moving forward with economic reforms that produce results and responding to desires for greater freedom.", "Cuba is now in the midst of rewriting its 1976 constitution, with a planned national referendum on February 24, 2019. Among the changes are the addition of an appointed prime minister to oversee government operations, age and term limits on the president, and some market-oriented economic reforms, including the right to private property, but the new constitution would still ensure the state sector's dominance over the economy and the predominant role of the Communist Party in Cuba's political system.", "Congress has played an active role in shaping policy toward Cuba, including the enactment of legislation strengthening and at times easing U.S. economic sanctions. Since the early 1960s, the centerpiece of U.S. policy has consisted of economic sanctions aimed at isolating the Cuban government. In 2014, however, the Obama Administration initiated a major policy shift, moving away from sanctions toward a policy of engagement. The policy change included the restoration of diplomatic relations (July 2015); the rescission of Cuba's designation as a state sponsor of international terrorism (May 2015); and an increase in travel, commerce, and the flow of information to Cuba implemented through regulatory changes. ", "President Trump unveiled a new policy toward Cuba in June 2017 increasing sanctions and partially rolling back some of the Obama Administration's efforts to normalize relations. The most significant changes include restrictions on transactions with companies controlled by the Cuban military and the elimination of individual people-to-people travel. In response to unexplained injuries of members of the U.S. diplomatic community at the U.S. Embassy in Havana, the State Department reduced the staff of the U.S. Embassy by about two-thirds; the reduction has affected embassy operations, especially visa processing, and made bilateral engagement more difficult.", "Congressional Action : In the 115 th Congress, debate over Cuba policy continued, especially with regard to economic sanctions. The 2018 farm bill, P.L. 115-334 ( H.R. 2 ), enacted in December 2018, has a provision permitting funding for two U.S. agricultural export promotion programs in Cuba. Two FY2019 House appropriations bills, Commerce ( H.R. 5952 ) and Financial Services ( H.R. 6258 and H.R. 6147 ), had provisions that would have tightened economic sanctions, but final action was not completed by the end of the 115 th Congress. Other bills were introduced but not acted upon; these bills would have eased or lifted sanctions altogether: H.R. 351 and S. 1287 (travel); H.R. 442 / S. 472 and S. 1286 (some economic sanctions); H.R. 498 (telecommunications); H.R. 525 (agricultural exports and investment); H.R. 572 (agricultural and medical exports and travel); H.R. 574 , H.R. 2966 , and S. 1699 (overall embargo); and S. 275 (private financing for U.S. agricultural exports). ", "Congress continued to provide funding for democracy and human rights assistance in Cuba and for U.S.-government sponsored broadcasting. For FY2017, Congress provided $20 million in democracy assistance and $28.1 million for Cuba broadcasting ( P.L. 115-31 ). For FY2018, it provided $20 million for democracy assistance and $28.9 million for Cuba broadcasting ( P.L. 115-141 ; explanatory statement to H.R. 1625 ). For FY2019, the Trump Administration requested $10 million in democracy assistance and $13.7 million for Cuba broadcasting. The House Appropriations Committee's FY2019 State Department and Foreign Operations appropriations bill, H.R. 6385 , would have provided $30 million for democracy programs, whereas the Senate version, S. 3108 , would have provided $15 million; both bills would have provided $29 million for broadcasting. As noted above, the 115 th Congress approved a series of continuing resolutions that continued FY2019 funding at FY2018 levels through December 21, 2018, but did not complete action on FY2019 appropriations, leaving the task to the 116 th Congress. ", "In other action, several approved measures\u2014 P.L. 115-232 , P.L. 115-244 , and P.L. 115-245 \u2014have provisions extending a prohibition on FY2019 funding to close or relinquish control of the U.S. Naval Station at Guantanamo Bay, Cuba; the conference report to P.L. 115-232 also requires a report on security cooperation between Russia and Cuba. The FAA Reauthorization Act of 2018 ( P.L. 115-254 ) requires the Transportation Security Administration to brief Congress on certain aspects of Cuban airport security and efforts to better track public air charter flights between the United States and Cuba. In April 2018, the Senate approved S.Res. 224 , commemorating the legacy of Cuban democracy activist Oswaldo Pay\u00e1.", "For additional information, see CRS Report R44822, Cuba: U.S. Policy in the 115th Congress , by Mark P. Sullivan; CRS In Focus IF10045, Cuba: U.S. Policy Overview , by Mark P. Sullivan; CRS Report RL31139, Cuba: U.S. Restrictions on Travel and Remittances , by Mark P. Sullivan; and CRS Report R43888, Cuba Sanctions: Legislative Restrictions Limiting the Normalization of Relations , by Dianne E. Rennack and Mark P. Sullivan."], "subsections": []}, {"section_title": "Haiti", "paragraphs": ["President Jovenel Mo\u00efse is completing his second year in office. He assumed office in February 2017 after Haiti had been almost a year without an elected president because of political gridlock and delayed elections. He continues to face a divided congress. Mo\u00efse came to office amid ongoing investigations into his possible involvement in money laundering, which he denies.", "Widespread corruption has been an impediment to good governance throughout much of Haiti's history. In November 2017, the Haitian Senate's Special Commission of Investigation released a report alleging embezzlement and fraud by 15 current and former Haitian officials, including two former prime ministers and President Mo\u00efse's chief of staff, in managing $2 billion in loans from Venezuela's PetroCaribe oil program. In early 2018, after the chief of the U.N. mission in Haiti welcomed the justice ministry's appointment of an investigative judge to look into citizens' complaints demanding accountability for those funds, Mo\u00efse recalled Haiti's Ambassador to the U.N. in protest. Foreign donors and civic society continued to demand more action against corruption. In October 2018, after a new wave of public protests, Mo\u00efse fired two staff members implicated in the PetroCaribe corruption case, and the prime minister created a new commission to investigate its scope.", "The government began to implement reforms recommended by the International Monetary Fund, which included the gradual elimination of subsidies, especially for energy, and the shifting of public resources toward investments in health, education, and social services. When the reduction of subsidies led to increased fuel prices of up to 51% in July 2018, violent protests ensued, leading to the resignation of Mo\u00efse's prime minister and the restoration of the subsidies. Mo\u00efse named a new prime minister, Jean-Henry C\u00e9ant, of an opposition party, after consulting with the legislature to get a consensus candidate. Protests against proposed subsidy reductions and corruption have continued.", "Given Haiti's proximity to the United States, and the country's chronically unstable political environment and fragile economy, Haiti has been an ongoing concern for the United States. Many in the U.S. Congress view Haiti's stability with great concern, and have demonstrated a commitment to improve conditions there. Haiti is the poorest country in the Western Hemisphere, and chronic political instability and frequent natural disasters exacerbate its poverty. Almost 60% of the country's 10 million people live in poverty, and almost 25% of them live in extreme poverty. Haiti is still recovering from a devastating earthquake in 2010, as well as Hurricane Matthew, which hit the island in 2016. The latter worsened a process begun by a two-year drought, destroying Haiti's food supply and creating a humanitarian disaster. In addition, Haiti continues to struggle against a cholera epidemic inadvertently introduced by U.N. peacekeepers in 2010. ", "Nonetheless, according to the State Department, Haiti is transitioning from a postdisaster era to one of reconstruction and long-term development. The Trump Administration and some in Congress contend that conditions in Haiti no longer warrant a reprieve for Haitian migrants who have been allowed to live and work in the United States under the TPS program since the 2010 earthquake. In November 2017, the Department of Homeland Security announced that TPS for Haitians would be terminated in July 2019. In August 2018, a group of 110 Members called on the Trump Administration to reinstate TPS, saying State Department documents showed the Administration made the decision \"despite warnings of grave consequences for the U.S. national security.\" In October 2018, a U.S. district court in California issued a preliminary injunction against the TPS termination. As long as the injunction remains in effect, Haitians (and citizens from three other countries) will retain their TPS. Termination of this program could affect about 59,000 Haitians in the United States. On January 7, 2019, federal court proceedings began in New York for Saget et al v Trump , a case that challenges President Trump's motion to end TPS for Haitian nationals.", "In October 2017, the U.N. Stabilization Mission in Haiti (MINUSTAH, 2004-2017) was succeeded by a smaller mission, the U.N. Mission for Justice Support in Haiti (MINUJUSTH), which is focusing on rule of law, development of the Haitian National Police (HNP) force, and human rights. The HNP now have primary responsibility for domestic security. MINUSTAH helped facilitate elections, combat gangs and drug trafficking with the HNP, and respond to natural disasters. MINUSTAH was criticized, however, because of sexual abuse by some of its forces and for introducing cholera to the country. The U.N. maintains it has diplomatic immunity, but after years of international pressure said that it would support the epidemic's victims and a new $400 million plan to fight cholera in Haiti. Neither plan has been fully funded or implemented.", "Congressional Action: The Trump Administration's proposed FY2018 budget of $157 million for aid to Haiti would have reduced aid by about 15% from that provided in FY2017, but Congress rejected the request and provided about $184 million for Haiti, the same as in FY2017. The Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), has several Haiti provisions. It continued to condition some assistance until the Secretary of State certified that the Haitian government was taking certain steps to strengthen the rule of law, combat corruption, increase government revenues, and resolve commercial disputes between U.S. entities and the Haitian government. It also continued to permit the Haitian government to purchase U.S. defense articles and services for its Coast Guard. In addition, the measure provided $10 million for multilateral efforts to assist communities affected by cholera resulting from MINUSTAH. The explanatory statement to the measure also provided $8.5 million for Haiti reforestation and $1.5 million for prison assistance. ", "For FY2019, the Administration requested $170.5 million for Haiti, an 8% reduction from that provided in FY2017. Both the House and Senate Appropriations Committees' versions of the FY2019 foreign aid appropriations measure, H.R. 6385 and S. 3108 , would have continued to permit the Haitian government to purchase U.S. defense articles and services for its Coast Guard. The House version also would have continued a provision from FY2018 conditioning some assistance pending a certification from the Secretary of State that the Haitian government was taking certain steps to strengthen the rule of law, combat corruption, increase government revenues, and resolve commercial disputes between U.S. entities and the Haitian government. The Senate Appropriations Committee's report ( S.Rept. 115-282 ) to its version of the bill recommended $51 million in Development Assistance, $9 million in International Narcotics Control and Law Enforcement (INCLE) assistance (including $1.9 million for prison improvements), $255,000 in International Military Education and Training (IMET), $1.2 million in Foreign Military Financing (FMF), and $1.75 million to assist communities in Haiti affected by cholera resulting from the U.N. Stabilization Mission in Haiti. As noted above, Congress did not complete action on FY2019 foreign aid appropriations but approved a series of continuing resolutions that provided funding through December 21, 2018.", "As noted in the section on \" Migration Issues \" above, a range of proposals related to TPS were introduced in Congress, either to extend it, limit it, adjust some TPS holders to lawful permanent resident status, or make TPS holders subject to expedited removal, but no action was taken on these measures.", "For additional information, see CRS Report R45034, Haiti's Political and Economic Conditions: In Brief , by Maureen Taft-Morales."], "subsections": []}, {"section_title": "Mexico", "paragraphs": ["Congress has demonstrated renewed interest in Mexico, a top trade partner and energy supplier with which the United States shares a nearly 2,000-mile border and strong cultural, familial, and historical ties. Economically, the United States and Mexico are interdependent, and Congress closely followed efforts to renegotiate NAFTA, which began in August 2017, and ultimately resulted in a proposed United States-Mexico-Canada Agreement (USMCA) signed at the end of November 2018. Similarly, security conditions in Mexico affect U.S. national security, particularly along the U.S.-Mexican border. Observers are concerned about resurgent organized crime-related violence in Mexico.", "President Enrique Pe\u00f1a Nieto of the Institutional Revolutionary Party (PRI) completed his six-year term on December 1, 2018. Pe\u00f1a Nieto shepherded significant structural reforms through the Mexican congress in 2013-2014, including a reform that opened Mexico's energy market to foreign investment. From 2014 onward, however, he struggled to address human rights abuses, insecurity, and corruption. ", "On December 1, 2018, Andr\u00e9s Manuel L\u00f3pez Obrador, the populist leader of the National Regeneration Movement (MORENA) party, took office for a six-year term after winning 53% of the vote in July presidential elections and majorities in both chambers of congress. L\u00f3pez Obrador promised to govern differently than recent PRI and National Action Party (PAN) administrations that have presided over periods of moderate economic growth, rising insecurity, and ongoing corruption. Some observers are concerned that L\u00f3pez Obrador may alter Mexico's historically investor-friendly policies and cause friction with the United States, but others predict that he will seek to address poverty and corruption and pursue pragmatic foreign relations. ", "U.S.-Mexican relations remain relatively strong, but periodic tensions have emerged since January 2017. In recent years, both countries have prioritized bolstering economic ties, particularly energy cooperation; interdicting illegal migration from Central America; and combating drug trafficking, including heroin and fentanyl. Security cooperation has continued under the M\u00e9rida Initiative, a security partnership for which Congress has provided Mexico some $2.9 billion from FY2008 through FY2018.", "In January 2017, President Trump's assertion that Mexico should pay for a border wall, which Mexico has consistently opposed, led Pe\u00f1a Nieto to cancel a White House visit. Although the Mexican government continues to oppose paying for the border wall, has spoken out against the Administration's \"zero tolerance\" immigration policies, and is concerned about the future of the DACA initiative, bilateral security and migration efforts continue. Mexico also applied retaliatory tariffs in response to the Trump Administration's recent tariffs on U.S. imports of steel and aluminum.", "Congressional Action : The 115 th Congress closely followed the renegotiation of NAFTA and how the USMCA could affect the U.S. economy and U.S.-Mexican relations; consideration of the proposed USMCA will likely occur in the 116 th Congress (see \" Trade Policy ,\" below). ", "In March 2017, the Senate passed S.Res. 83 , a resolution calling for U.S. support for Mexico's efforts to combat fentanyl. In December 2017, the House approved H.Res. 336 , a resolution reiterating the importance of bilateral cooperation with Mexico. In November 2018, the House approved H.R. 1567 , which promotes economic partnership and cooperation between the United States and Mexico in the areas of academic exchange, entrepreneurship, and infrastructure integration.", "In March 2018, Congress provided $152.6 million in the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) for Mexico, with extra funds provided to combat the production and trafficking of opioids. The Trump Administration's FY2019 request for Mexico was for $78.9 million, some 43% lower than the FY2017 enacted amount ($138.5 million). The House Appropriations Committee's FY2019 version of the foreign aid appropriations bill, H.R. 6385 ( H.Rept. 115-829 ), recommended providing $125 million for Mexico. The Senate version of the bill, S. 3108 ( S.Rept. 115-282 ), recommended $169.5 million.", "For additional information, see CRS In Focus IF10867, Mexico's 2018 Elections: Results and Potential Implications , by Clare Ribando Seelke and Edward Y. Gracia; CRS Report R42917, Mexico: Background and U.S. Relations , by Clare Ribando Seelke; CRS Report RL32934, U.S.-Mexico Economic Relations: Trends, Issues, and Implications , by M. Angeles Villarreal; CRS In Focus IF10997, Proposed U.S.-Mexico-Canada (USMCA) Trade Agreement , by Ian F. Fergusson and M. Angeles Villarreal; CRS In Focus IF10578, Mexico: Evolution of the M\u00e9rida Initiative, 2007-2019 , by Clare Ribando Seelke; CRS Report R41576, Mexico: Organized Crime and Drug Trafficking Organizations , by June S. Beittel; CRS In Focus IF10215, Mexico's Immigration Control Efforts , by Clare Ribando Seelke and Carla Y. Davis-Castro; and CRS In Focus IF10400, Transnational Crime Issues: Heroin Production, Fentanyl Trafficking, and U.S.-Mexico Security Cooperation , by Clare Ribando Seelke and Liana W. Rosen."], "subsections": []}, {"section_title": "Nicaragua", "paragraphs": ["President Daniel Ortega, now aged 72, is currently suppressing popular unrest in a manner reminiscent of Anastasio Somoza, the dictator he helped overthrow in 1979 as a \"comandante\" of the leftist Sandinista National Liberation Front (FSLN). Ortega served on the Sandinista national reconstruction board, then as president from 1985 to 1990, during which time the United States backed right-wing \"contras\" in opposition to Sandinista governance. In the early 1990s, after decades of dictatorship and civil war, Nicaragua began to establish a democratic government. Democratic space has narrowed, however, as the FSLN and Ortega have consolidated control over the country's institutions. ", "After leaving the presidency in 1990, Ortega served as an opposition leader in the legislature and then was reelected in 2006, 2011, and 2016. Nonetheless, popular opposition to Ortega's rule began to take hold in parts of the country, as his government grew increasingly authoritarian. Ortega buoyed his popular support by implementing social welfare programs that benefited Nicaragua's poor and by accommodating the business community. Domestic and international critics consistently objected to Ortega's antidemocratic policies and self-enrichment, however, and popular domestic support began to wane. Ortega was able to resist most of this pressure because the political opposition was weak, divided, and handicapped by FSLN control of the legislature, electoral council, and other aspects of Nicaraguan political life. ", "Until 2018, for many Nicaraguans, Ortega's populist economic measures that improved their standard of living outweighed his authoritarian tendencies. Similarly, for many in the international community, the relative stability in Nicaragua outweighed Ortega's antidemocratic actions. ", "Both domestic and international attitudes toward the Ortega government began to change in April 2018. Ortega's long-term strategy to retain control of the government began to unravel when he proposed reducing benefits of the social security system to shore up its insolvency. The announcement set off weeks of unexpected protests led by university students, who argued that corruption and mismanagement of social security system resources were the main factors behind the system's problems.\u00a0Ortega repealed the proposed reforms, but protests continued and grew into mass antigovernment protests led by students, businesspeople, civil society groups, farmers, and the Catholic Church. The protests called for early elections and/or Ortega's resignation. The Ortega government and its parapolice supporters have violently repressed protests, leaving at least 320 people dead and thousands injured. The government has arrested over 400 people, with reports of torture and disappearances. Thousands of people have fled the country. ", "In July 2018, the Inter-American Commission on Human Rights (IACHR) sent a team of independent experts to Nicaragua to investigate potential human rights abuse. They concluded that the security forces' actions could be considered crimes against humanity and called for Ortega to be investigated. Government authorities expelled the team in December 2018, and since then they have destroyed independent news facilities and stripped civil society groups of their legal standing. The government has accused protesters and journalists of plotting coups and conspiring to commit terrorist acts, and it has accused the IACHR investigators of echoing U.S. policies against Nicaragua. The Trump Administration has imposed sanctions against five high-level officials, including Vice President Rosario Murillo.", "Nicaragua is the second poorest country in the Western Hemisphere after Haiti. Nicaragua maintained growth levels above the average for Latin America over the past decade, but the Economist Intelligence Unit estimates the current political crisis will affect the economy with a contraction of almost 3% in 2018, and a further 0.7% contraction in 2019.", "Congressional Action: The 115 th Congress enacted the Nicaragua Human Rights and Anticorruption Act of 2018 in December 2018 ( P.L. 115-335 , H.R. 1918 ). The law requires the United States to vote against loans from the international financial institutions to the government of Nicaragua, except to address basic human needs or promote democracy. Loans to the government of Nicaragua may be provided if the U.S. Department of State certifies that Nicaragua has taken effective steps to combat corruption, hold free elections, and implement other reforms. The law also authorizes the President to impose sanctions (visa restrictions and assets blocking) on persons responsible for human rights violations or acts of corruption.", "For FY2018, Congress appropriated an estimated $10 million in Development Assistance to Nicaragua under the U.S. Strategy for Engagement in Central America. Under the Consolidated Appropriations Act, 2018 ( P.L. 115-141 , S.Rept. 115-152 ), Congress also required the Secretary of State to submit a report to the appropriate congressional committees on the involvement of senior Nicaraguan government officials in corrupt practices or violations of human rights in Nicaragua. ", "For FY2019, the Senate Appropriations Committee's report to its version of the FY2019 foreign aid appropriations bill ( S.Rept. 115-282 to S. 3108 ) recommended $5 million in development assistance for Nicaragua. The House Appropriations Committee's report to its version of the FY2019 appropriations bill ( H.Rept. 115-829 to H.R. 6385 ) provided that the only funding made available in the act should be for programs to promote democracy and the rule of law. As noted above, the 115 th Congress did not complete action on FY2019 foreign aid appropriations, but it did approve continuing resolutions providing foreign assistance at FY2018 levels through December 21, 2018, leaving full-year funding to be decided by the 116 th Congress.", "In other action, on July 25, 2018, the House passed H.Res. 981 , \"condemning the violence, persecution, intimidation, and murders committed by the Government of Nicaragua against its citizens.\" ", "For additional information, see CRS Report R44560, Nicaragua: In Brief , by Maureen Taft-Morales."], "subsections": []}, {"section_title": "Peru", "paragraphs": ["Mart\u00edn Vizcarra was sworn in as Peru's president in March 2018. He had been first vice president to Pedro Pablo Kuczynski, who resigned as president amid bribery allegations related to the Brazilian construction firm Odebrecht. An orderly, constitutional transition took place, and Vizcarra is serving out the remainder of the former president's five-year term, until July 2021.", "Officials from the previous four Peruvian governments\u2014including their presidents\u2014and the opposition have been implicated in the Odebrecht international bribery scandal. Keiko Fujimori, leader of the Fuerza Popular party, was arrested in October 2018 and placed in pretrial detention for 36 months, pending investigation into her alleged involvement in money laundering. Vizcarra has made fighting corruption a top priority. (Also see \" Corruption \" section above.) He responded swiftly and strongly to a new scandal in which high-level judicial officials were taped allegedly negotiating bribes in exchange for favors. Despite an opposition-dominated legislature that was obstructive to the previous administration, Vizcarra secured legislative support for a series of judicial and political reforms that the public voted on in a December 2018 referendum. An overwhelming majority of voters approved constitutional changes, including reform of the board that makes judicial appointments, reform of campaign financing rules, and the prohibition of consecutive reelection of legislators. Voters rejected a return to a bicameral legislature.", "Peru's economy has been one of the strongest in Latin America since 2001, consistently growing over 5% per year because of the boom in international prices for commodities\u2014particularly petroleum and minerals. The Economist Intelligence Unit estimates that Peru's economic growth was 3.7% in 2018 and predicts an average of 3.9% annual growth in 2019-2023. In March 2018, Peru and the other 10 signatories of the Trans-Pacific Partnership (minus the United States, which withdrew in 2017) signed a new trade pact, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.", "President Vizcarra is continuing the same types of market-friendly economic policies as his recent predecessors. In July 2018, Peru's congress granted the executive branch certain legislative authority for 60 days, and Vizcarra began issuing a series of legislative decrees designed to improve infrastructure and stimulate economic growth.", "Social unrest and debate over exploitation of natural resources long have been and likely will remain major challenges for any Peruvian government. Many disputes have involved the mining industry and the rights of indigenous peoples in those areas where mining exists or where mining interests intend to operate. In December 2018, citizens in three mining regions elected critics of mining as their governors. A current dispute involves a highway project that is to run through protected areas and indigenous reserves in the Amazon rainforest. Successive Peruvian governments have found it politically difficult to balance a stated desire to help the poor and indigenous with efforts to encourage investment, especially in mining, by the business sector.", "Congressional Action: For FY2018, the Trump Administration requested $49.7 million for Peru, a 23% reduction from the amount provided in FY2017, but Congress ultimately appropriated almost $74 million for Peru in the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ).", "For FY2019, the Administration requested $47.4 million. The reports to the House and Senate Appropriations Committees' versions of FY2019 foreign aid appropriations, H.Rept. 115-829 to H.R. 6385 and S.Rept. 115-282 to S. 3108 , specified $32 million in INCLE assistance and $1.8 million in FMF. As noted above, the 115 th Congress did not complete action on FY2019 foreign aid appropriations, but it did approve measures funding foreign aid at FY2018 levels through December 21, 2018. "], "subsections": []}, {"section_title": "Venezuela", "paragraphs": ["Venezuela remains in the throes of a deep economic and humanitarian crisis under the authoritarian rule of President Nicol\u00e1s Maduro of the United Socialist Party of Venezuela (PSUV). Maduro, narrowly elected in 2013 for a six-year term after the death of President Hugo Ch\u00e1vez (in office 1999-2013), is unpopular. He has used the courts, security forces, and electoral council to stifle opposition, which is in disarray. On January 10, 2019, Maduro was inaugurated for a second term after winning reelection on May 20, 2018, in an unfair contest that did not meet international election standards. The United States, the European Union, Japan, and most Western Hemisphere countries deemed the election illegitimate. Some of those countries have downgraded their relations or enacted travel bans and sanctions on officials in Maduro's government; others may follow suit. They regard the opposition-controlled National Assembly as the only legitimate branch of government.", "Maduro's reelection capped off his efforts since 2017 to consolidate power. From March to July 2017, protesters called for President Maduro to release political prisoners and respect the National Assembly. Security forces quashed protests, with more than 130 killed and thousands injured. Maduro then orchestrated the controversial July 2017 election of a National Constituent Assembly to rewrite the constitution, which has usurped the National Assembly's powers. Since the May 2018 elections, Maduro's government has arrested and tortured dissidents, including military officers alleged to have been involved in an assassination attempt against him in August 2018. ", "Venezuela also is experiencing a serious economic crisis, marked by rapid contraction of the economy (14% in 2017 and 18% in 2018), hyperinflation (to almost 1,400,000% in 2018), and severe shortages of food and medicine that have prompted a humanitarian crisis in the country. This crisis has driven more than 3 million Venezuelans to flee since 2015, according to the U.N. High Commissioner for Refugees. President Maduro has blamed U.S. sanctions for the country's economic problems while conditioning receipt of food assistance on support for his government and increasing military control over the economy. He maintains that Venezuela will seek to restructure its debts, although that appears unlikely. The government and state oil company Petr\u00f3leos de Venezuela, S. A. (PdVSA) defaulted on bond payments in 2017. Lawsuits over nonpayment and seizures of PdVSA assets, including potentially its U.S. subsidiary (CITGO), are possible in 2019. ", "The United States traditionally has had close relations with Venezuela, a major U.S. oil supplier, but friction increased under the Ch\u00e1vez government and has intensified under the Maduro regime. U.S. policymakers have had concerns about the deterioration of human rights and democracy in Venezuela and the lack of bilateral cooperation on antidrug and counterterrorism efforts. U.S. officials have expressed increasing concerns regarding Colombian criminal and terrorist groups in Venezuela. In the wake of the May elections, the Trump Administration increased sanctions on the Maduro government and assistance for neighboring countries sheltering Venezuelan migrants.", "The Trump Administration deemed the May 2018 elections \"unfree and unfair\" and Maduro's January 10, 2019, inauguration as an \"illegitimate usurpation of power\"; it regards the National Assembly as the only legitimate branch of government. The Administration has employed targeted sanctions against Venezuelan officials responsible for human rights violations, undermining democracy, and corruption, as well as officials and entities engaged in drug trafficking. The most recent sanctions, announced just prior to Maduro's inauguration, targeted 7 individuals and 23 companies that allegedly stole $2.4 billion. Beginning in August 2017, President Trump has imposed broader economic sanctions that restrict the ability of the government and PdVSA to access U.S. financial markets and bar U.S. purchases of Venezuela's new digital currency and Venezuelan debt. The Administration has considered broader sanctions to limit or prohibit trade with Venezuela. Some predict such sanctions could hasten Maduro's demise, whereas others caution that they could worsen the humanitarian crisis.", "The Administration also is providing nearly $97 million in humanitarian assistance for Venezuelans who have fled to other countries, including Colombia. ", "Congressional Action: The 115 th Congress took several actions to respond to the deteriorating situation in Venezuela and the regional humanitarian and migration crisis it has wrought. In February 2017, the Senate approved S.Res. 35 , which, among its provisions, called for the release of political prisoners and expressed support for dialogue and OAS efforts. In December 2017, the House passed a bill and a resolution on Venezuela: H.R. 2658 , the Venezuela Humanitarian Assistance and Defense of Democratic Governance Act, which would have authorized humanitarian assistance for Venezuela, and H.Res. 259 , which urged the Venezuelan government to suspend the constituent assembly, hold elections, release political prisoners, and accept humanitarian aid. ", "In FY2018 appropriations legislation ( P.L. 115-141 ) enacted in March 2018, Congress provided $15 million to support democracy and human rights in Venezuela. For FY2019, the Trump Administration requested $9 million in democracy and human rights funding for Venezuela, $6 million less than what Congress appropriated in FY2018. The House Appropriation Committee's version of the FY2019 foreign aid appropriations bill, H.R. 6385 , would have provided $15 million; the Senate Appropriations Committee's version, S. 3108 , would have provided $20 million.", "For additional information, CRS In Focus IF10230, Venezuela: Political and Economic Crisis and U.S. Policy , by Clare Ribando Seelke; CRS In Focus IF10715, Venezuela: Overview of U.S. Sanctions , by Mark P. Sullivan; CRS In Focus IF11029, The Venezuela Regional Migration Crisis , by Rhoda Margesson and Clare Ribando Seelke; CRS Report R44841, Venezuela: Background and U.S. Relations , coordinated by Clare Ribando Seelke; CRS Report R45072, Venezuela's Economic Crisis: Issues for Congress , by Rebecca M. Nelson; and CRS In Focus IF10857, Venezuela's Petroleum Sector and U.S. Sanctions , by Phillip Brown."], "subsections": []}]}]}, {"section_title": "Outlook for the 116th Congress", "paragraphs": ["Many of the U.S. economic, political, and security concerns discussed in this report likely will sustain congressional interest in Latin America and the Caribbean in the 116 th Congress. Congress still faces completing action on FY2019 foreign aid appropriations that propose significant cuts in assistance to the region, and in early 2019 it will begin consideration of the Trump Administration's FY2020 foreign aid budget request. ", "The 116 th Congress likely will pay close attention to the crisis in Venezuela and consider steps to influence the Venezuelan government's behavior in returning to democratic rule and to relieve the humanitarian crisis. The proposed United States-Mexico-Canada Agreement (USMCA) will face congressional examination and likely consideration in the 116 th Congress; Congress must approve the agreement before it can enter into force. In Central America, a potential oversight issue is the effectiveness of U.S. assistance to the Northern Triangle countries related to efforts to combat insecurity, corruption, and human rights violations; of particular concern are efforts to undermine anticorruption efforts in Guatemala and Honduras, especially the Guatemalan president's action against the U.N.-backed CICIG. Congress also potentially could consider immigration legislation related to the termination of TPS for Nicaragua, Haiti, El Salvador, and Honduras and the rescission of DACA.", "Other potential oversight issues for the 116 th Congress include the surge in Colombian coca cultivation and cocaine production and the effectiveness of U.S. assistance focusing on counternarcotics and counterterrorism; the effectiveness of U.S. assistance to Mexico given the high level of drug trafficking-related violence in the country; how to respond to the increase in political repression and violence in Nicaragua; the extent and significance of Chinese and Russian engagement in the region and the appropriate U.S. policy response; and U.S. relations with Brazil under newly elected President Jair Bolsonaro, as well as concerns about the state of democracy and human rights in the country."], "subsections": [{"section_title": "Appendix. Hearings in the 115th Congress", "paragraphs": [], "subsections": []}]}]}}
{"id": "R45417", "title": "World Trade Organization: Overview and Future Direction", "released_date": "2019-02-15T00:00:00", "summary": ["Historically, the United States' leadership of the global trading system has ensured the United States a seat at the table to shape the international trade agenda in ways that both advance and defend U.S. interests. The evolution of U.S. leadership and the global trade agenda remain of interest to Congress, which holds constitutional authority over foreign commerce and establishes trade negotiating objectives and principles through legislation. Congress has recognized the World Trade Organization (WTO) as the \"foundation of the global trading system\" within trade promotion authority (TPA) and plays a direct legislative and oversight role over WTO agreements. The statutory basis for U.S. WTO membership is the Uruguay Round Agreements Act (P.L. 103-465), and U.S. priorities and objectives for the General Agreement on Tariffs and Trade (GATT)/WTO have been reflected in various TPA legislation since 1974. Congress also has oversight of the U.S. Trade Representative and other agencies that participate in WTO meetings and enforce WTO commitments.", "The WTO is a 164-member international organization that was created to oversee and administer multilateral trade rules, serve as a forum for trade liberalization negotiations, and resolve trade disputes. The United States was a major force behind the establishment of the WTO in 1995, and the rules and agreements resulting from multilateral trade negotiations. The WTO encompassed and succeeded the GATT, established in 1947 among the United States and 22 other countries. Through the GATT and WTO, the United States, with other countries, sought to establish a more open, rules-based trading system in the postwar era, with the goal of fostering international economic cooperation and raising economic prosperity worldwide. Today, 98% of global trade is among WTO members.", "The WTO is a consensus and member-driven organization. Its core principles include nondiscrimination (most favored nation treatment and national treatment), freer trade, fair competition, transparency, and encouraging development. These are enshrined in a series of WTO trade agreements covering goods, agriculture, services, intellectual property rights, and trade facilitation, among other issues. Some countries, including China, have been motivated to join the WTO not just to expand access to foreign markets but to spur domestic economic reforms, help transition to market economies, and promote the rule of law.", "The WTO Dispute Settlement Understanding (DSU) provides an enforceable means for members to resolve disputes over WTO commitments and obligations. The WTO has processed more than 500 disputes, and the United States has been an active user of the dispute settlement system. Supporters of the multilateral trading system consider the dispute settlement mechanism an important success of the system. At the same time, some members, including the United States, contend it has procedural shortcomings and has exceeded its mandate in deciding cases.", "Many observers are concerned that the effectiveness of the WTO has diminished since the collapse of the Doha Round of multilateral trade negotiations, which began in 2001, and believe the WTO needs to adopt reforms to continue its role as the foundation of the global trading system. To date, WTO members have been unable to reach consensus for a new comprehensive multilateral agreement on trade liberalization and rules. While global supply chains and technology have transformed international trade and investment, global trade rules have not kept up with the pace of change. Many countries have turned to negotiating free trade agreements (FTAs) outside the WTO as well as plurilateral agreements involving subsets of WTO members rather than all members.", "At the latest WTO Ministerial conference in December 2017, no major deliverables were announced. Several members committed to make progress on ongoing talks, such as fisheries subsidies and e-commerce, while other areas remain stalled. While many were disappointed by the limited progress, in the U.S. view, the outcome signaled that \"the impasse at the WTO was broken,\" paving the way for groups of like-minded countries to pursue new work in other key areas.", "Certain WTO members have begun to explore aspects of reform and future negotiations. Potential reforms concern the administration of the organization, its procedures and practices, and attempts to address the inability of WTO members to conclude new agreements. Proposed DS reforms also attempt to improve the working of the dispute settlement system, particularly the Appellate Body\u2014the seven-member body that reviews appeals by WTO members of a panel's findings in a dispute case.", "Some U.S. frustrations with the WTO are not new and many are shared by other trading partners, such as the European Union. At the same time, the Administration's overall approach has spurred new questions regarding the future of U.S. leadership and U.S. priorities for improving the multilateral trading system. Concerns have emphasized that the Administration's recent actions to unilaterally raise tariffs under U.S. trade laws and to possibly impede the functioning of the dispute settlement system might undermine the credibility of the WTO system. A growing question of some observers is whether the WTO would flounder for lack of U.S. leadership, or whether other WTO members like the EU and China taking on larger roles would continue to make it a meaningful actor in the global trade environment.", "The growing debate over the role and future direction of the WTO may be of interest to Congress. Important issues it may address include how current and future WTO agreements affect the U.S. economy, the value of U.S. membership and leadership in the WTO, whether new U.S. negotiating objectives or oversight hearings are needed to address prospects for new WTO reforms and rulemaking, and the relevant authorities and impact of potential U.S. withdrawal from the WTO on U.S. economic and foreign policy interests."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The World Trade Organization (WTO) is an international organization that administers the trade rules and agreements negotiated by its 164 members to eliminate trade barriers and create nondiscriminatory rules to govern trade. It also serves as an important forum for resolving trade disputes. The United States was a major force behind the establishment of the WTO in 1995 and the rules and agreements that resulted from the Uruguay Round of multilateral trade negotiations (1986-1994). The WTO encompassed and expanded on the commitments and institutional functions of the General Agreement on Tariffs and Trade (GATT), which was established in 1947 by the United States and 22 other nations. Through the GATT and WTO, the United States and other countries sought to establish a more open, rules-based trading system in the postwar era, with the goal of fostering international economic cooperation, stability, and prosperity worldwide. Today, the vast majority of world trade, approximately 98%, takes place among WTO members.", "The evolution of U.S. leadership in the WTO and the institution's future agenda have been of interest to Congress. The terms set by the WTO agreements govern the majority of U.S. trading relationships. Some 65% of U.S. global trade is with countries that do not have free trade agreements (FTAs) with the United States, including China, the European Union (EU), India, and Japan, and thus rely on the terms of WTO agreements. Congress has recognized\u00a0the WTO as the \"foundation of the global trading\u00a0system\" within U.S. trade legislation and plays a direct legislative and oversight role over WTO agreements. U.S. FTAs also build on core WTO agreements. While the U.S. Trade Representative (USTR) represents the United States at the WTO, Congress holds constitutional authority over foreign commerce and establishes U.S. trade negotiating objectives and principles and implements U.S. trade agreements through legislation. U.S. priorities and objectives for the GATT/WTO are reflected in trade promotion authority (TPA) legislation since 1974. Congress also has oversight of the USTR and other executive branch agencies that participate in WTO meetings and enforce WTO commitments.", "The WTO's effectiveness as a negotiating body for broad-based trade liberalization has come under intensified scrutiny, as has its role in resolving trade disputes. The WTO has often struggled to reach consensus over issues that can place developed against developing country members (such as agricultural subsidies, industrial goods tariffs, and intellectual property rights protection). It has also struggled to address newer trade barriers, such as digital trade restrictions and the role of state-owned enterprises (SOEs) in international commerce, which have become more prominent in the years since the WTO was established. Global supply chains and advances in technology have transformed global commerce, but trade rules have failed to keep up with the pace of change; since 1995 WTO members have been unable to reach consensus for a new comprehensive multilateral agreement. As a result, many countries have turned to negotiating FTAs with one another outside the WTO to build on core WTO agreements and advance trade liberalization and new rules. Plurilateral negotiations, involving subsets of WTO members rather than all members, are also becoming a more popular forum for tackling newer issues on the global trade agenda. ", "The most recent round of WTO negotiations, the Doha Round, began in November 2001, but concluded with no clear path forward, leaving multiple unresolved issues after the 10 th Ministerial conference in 2015. Efforts to build on current WTO agreements outside of the Doha agenda continue. While WTO members have made some progress toward determining future work plans, no major deliverables or negotiated outcomes were announced at the 11 th Ministerial conference in December 2017 and no consensus Ministerial Declaration was released. ", "Many have concerns that the growing use of protectionist trade policies by developed and developing countries, recent U.S. tariff actions and counterretaliation, and escalating trade disputes between major economies may further strain the multilateral trading system. The WTO is faced with resolving several significant pending disputes, which involve the United States, and resolving debates about the role and procedures of its Appellate Body, which reviews appeals of dispute cases. ", "In a break from past Administrations' approaches, U.S. officials have recently expressed doubt over the value of the WTO institution to the U.S. economy and questioned whether leadership in the organization is a benefit or cost to the United States. While USTR Robert Lighthizer acknowledged at the most recent Ministerial that the WTO is an \"important institution\" that does an \"enormous amount of good,\" the Trump Administration has expressed deep skepticism toward multilateral trade deals, including those negotiated within the WTO. In remarks to the Asia-Pacific Economic Cooperation (APEC) forum in November 2017, President Trump stated the following: \"Simply put, we have not been treated fairly by the World Trade Organization.... What we will no longer do is enter into large agreements that tie our hands, surrender our sovereignty, and make meaningful enforcement practically impossible.\" President Trump has also at times threatened to withdraw the United States from the WTO. In addition, amid concerns about \"judicial overreach\" in WTO dispute findings, the Administration is currently withholding approval for judge appointments to the WTO Appellate Body\u2014a practice that began under the Obama Administration. While many of the U.S. concerns are not new and are shared by other trading partners, questions remain about U.S. priorities for improving the system.", "With growing debate over the role and future direction of the WTO, a number of issues may be of interest to Congress, including the value of U.S. membership and leadership in the WTO, whether new U.S. negotiating objectives or oversight hearings are needed to address prospects for new WTO reforms and rulemaking, and the relevant authorities and the impact of potential WTO withdrawal on U.S. economic and foreign policy interests. ", "This report provides background history of the WTO, its organization, and current status of negotiations. The report also explores concerns some have regarding the WTO's future direction and key policy issues for Congress."], "subsections": []}, {"section_title": "Background", "paragraphs": ["Following World War II, nations throughout the world, led by the United States and several other developed countries, sought to establish a more open and nondiscriminatory trading system with the goal of raising the economic well-being of all countries. Aware of the role of tit-for-tat trade barriers resulting from the U.S. Smoot-Hawley tariffs in exacerbating the economic depression in the 1930s, including severe drops in world trade, global production, and employment, the countries that met to discuss the new trading system considered open trade as essential for peace and economic stability.", "The intent of these negotiators was to establish an International Trade Organization (ITO) to address not only trade barriers but other issues indirectly related to trade, including employment, investment, restrictive business practices, and commodity agreements. Unable to secure approval for such a comprehensive agreement, however, they reached a provisional agreement on tariffs and trade rules, known as the GATT, which went into effect in 1948. This provisional agreement became the principal set of rules governing international trade for the next 47 years, until the establishment of the WTO."], "subsections": [{"section_title": "General Agreement on Tariffs and Trade (GATT)", "paragraphs": ["The GATT was neither a formal treaty nor an international organization, but an agreement between governments, to which they were contracting parties. The GATT parties established a secretariat based in Geneva, but it remained relatively small, especially compared to the staffs of international economic institutions created by the postwar Bretton Woods conference\u2014the International Monetary Fund and World Bank. Based on a mission to promote trade liberalization, the GATT became the principal set of rules and disciplines governing international trade.", "The core principles and articles of the GATT (which were carried over to the WTO) committed the original 23 members, including the United States, to lower tariffs on a range of industrial goods and to apply tariffs in a nondiscriminatory manner\u2014the so-called most-favored nation or MFN principle (see text box ). By having to extend the same benefits and concessions to members, the economic gains from trade liberalization were magnified. Exceptions to the MFN principle are allowed, however, including for preferential trade agreements outside the GATT/WTO covering \"substantially\" all trade among members and for nonreciprocal preferences for developing countries. GATT members also agreed to provide \"national treatment\" for imports from other members. For example, countries could not establish one set of health and safety regulations on domestic products while imposing more stringent regulations on imports. ", "Although the GATT mechanism for the enforcement of these rules or principles was generally viewed as largely ineffective, the agreement nonetheless brought about a substantial reduction of tariffs and other trade barriers. The eight \"negotiating rounds\" of the GATT succeeded in reducing average tariffs on industrial products from between 20%-30% to just below 4%, facilitating a 14-fold increase in world trade over its 47-year history (see Table 1 ). When the first round concluded in 1947, 23 nations had participated, which accounted for a majority of global trade at the time. When the Uruguay Round establishing the WTO concluded in 1994, 123 countries had participated and the amount of trade affected was nearly $3.7 trillion. As of the end of 2018, there are 164 WTO members, and trade flows totaled $22.6 trillion in 2017.", "During the first trade round held in Geneva in 1947, members negotiated a 20% reciprocal tariff reduction on industrial products, and made further cuts in subsequent rounds. The Tokyo Round represented the first attempt to reform the trade rules that had existed unchanged since 1947 by including issues and policies that could distort international trade. As a result, Tokyo Round negotiators established several plurilateral codes dealing with nontariff issues such as antidumping, subsidies, technical barriers to trade, import licensing, customs valuation, and government procurement. Countries could choose which, if any, of these codes they wished to adopt. While the United States agreed to all of the codes, the majority of GATT signatories, including most developing countries, chose not to sign the codes.", "The Uruguay Round, which took eight years to negotiate (1986-1994), proved to be the most comprehensive GATT trade round. This round further lowered tariffs in industrial goods and liberalized trade in areas that had eluded previous negotiators, notably agriculture and textiles and apparel. It also extended rules to new areas such as services, trade-related investment measures, and intellectual property rights. It created a trade policy review mechanism, which periodically examines each member's trade policies and practices. Significantly, the Uruguay Round created the WTO as a legal international organization charged with administering a revised and stronger dispute settlement mechanism\u2014a principal U.S. negotiating objective (see text box )\u2014as well as many new trade agreements adopted during the long negotiation. For the most part, the Uruguay Round agreements were accepted as a single package or single undertaking , meaning that all participants and future WTO members were required to subscribe to all of the agreements. "], "subsections": []}, {"section_title": "World Trade Organization", "paragraphs": ["The WTO succeeded the GATT in 1995. In contrast to the GATT, the WTO was created as a permanent organization. But as with the GATT, the WTO secretariat and support staff is small by international standards and lacks independent power. The power to write rules and negotiate future trade liberalization resides specifically with the member countries, and not the WTO director-general (DG) or staff. Thus, the WTO is referred to as a member-driven organization. ", "Decisions within the WTO are made by consensus, although majority voting can be used in limited circumstances. The highest-level body in the WTO is the Ministerial Conference, which is the body of political representatives (trade ministers) from each member country ( Figure 1 ). The body that oversees the day-to-day operations of the WTO is the General Council, which consists of a representative from each member country. Many other councils and committees deal with particular issues, and members of these bodies are also national representatives.", "In general, the WTO has three broad functions: administering the rules of the trading system; establishing new rules through negotiations; and resolving disputes between member states. "], "subsections": [{"section_title": "Administering Trade Rules", "paragraphs": ["The WTO administers the global rules and principles negotiated and signed by its members. The main purpose of the rules is \"to ensure that trade flows as smoothly, predictably, and freely as possible.\" WTO rules and agreements are essentially contracts that bind governments to keep their trade policies within agreed limits. A number of fundamental principles guide WTO rules.", "In general, as with the GATT, these key principles are nondiscrimination and the notion that freer trade through the gradual reduction of trade barriers strengthens the world economy and increases prosperity. The WTO agreements apply the GATT principles of nondiscrimination as discussed above: MFN treatment and national treatment. The trade barriers concerned include tariffs, quotas, and a growing range of nontariff measures, such as product standards, food safety measures, subsidies, and discriminatory domestic regulations. The fundamental principle of reciprocity is also behind members' aim of \"entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international trade relations.\"", "Transparency is another key principle of the WTO, which aims to reduce information asymmetry in markets, ensure trust, and, therefore, foster greater stability in the global trading system. Transparency commitments are incorporated into individual WTO agreements. Active participation in various WTO committees also aims to ensure that agreements are monitored and that members are held accountable for their actions. For example, members are required to publish their trade practices and policies and notify new or amended regulations to WTO committees. Regular trade policy reviews of each member's trade policies and practices provide a deeper dive into an economy's implementation of its commitments\u2014see \" Trade Policy Review Mechanism (Annex 3) .\" In addition, the WTO's annual trade monitoring report takes stock of trade-restrictive and trade-facilitating measures of the collective body of WTO members. ", "While opening markets can encourage competition, innovation, and growth, it can also entail adjustments for workers and firms. Trade liberalization can also be more difficult for the least-developed countries (LDCs) and countries transitioning to market economies. WTO agreements thus allow countries to lower trade barriers gradually. Developing countries and sensitive sectors in particular are usually given longer transition periods to fulfill their obligations; developing countries make up about two-thirds of the WTO membership\u2014WTO members self-designate developing country status. The WTO also supplements this so-called \"special and differential\" treatment (SDT) for developing countries with trade capacity-building measures to provide technical assistance and help implement WTO obligations, and with permissions for countries to extend nonreciprocal, trade preference programs. ", "In WTO parlance, when countries agree to open their markets further to foreign goods and services, they \"bind\" their commitments or agree not to raise them. For goods, these bindings amount to ceilings on tariff rates. A country can change its bindings, but only after negotiating with its trading partners, which could entail compensating them for loss of trade. As shown in Figure 2 , one of the achievements of the Uruguay Round was to increase the amount of trade under binding commitments. Bound tariff rates are not necessarily the rates WTO members apply in practice to imports from trading partners; so-called applied MFN rates can be lower than bound rates, as reflected in tariff reductions under the GATT. Figure 3 shows average applied MFN tariffs worldwide. In 2017, the United States simple average MFN tariff was 3.4%.", "A key issue in the Doha Round for the United States was lowering major developing countries' relatively high bound tariffs to below their applied rates in practice to achieve commercially meaningful new market access.", "Promising not to raise a trade barrier can have a significant economic effect because the promise provides traders and investors certainty and predictability in the commercial environment. A growing body of economic literature suggests certainty in the stability of tariff rates may be just as important for increasing global trade as reduction in trade barriers. This proved particularly important during the 2009 global economic downturn. Unlike in the 1930s, when countries reacted to slumping world demand by raising tariffs and other trade barriers, the WTO reported that its 153 members (at the time), accounting for 90% of world trade, by and large did not resort to protectionist measures in response to the crisis.", "The promotion of fair and undistorted competition is another important principle of the WTO. While the WTO is often described as a \"free trade\" organization, numerous rules are concerned with ensuring transparent and nondistorted competition. In addition to nondiscrimination, MFN treatment and national treatment concepts aim to promote \"fair\" conditions of trade. WTO rules on subsidies and antidumping in particular aim to promote fair competition in trade through recourse to trade remedies, or temporary restriction of imports, in response to alleged unfair trade practices\u2014see \" Trade Remedies .\" For example, when a foreign company receives a prohibited subsidy for exporting as defined in WTO agreements, WTO rules allow governments to impose duties to offset any unfair advantage found to cause injury to their domestic industries. ", "The scope of the WTO is broader than the GATT because, in addition to goods, it administers multilateral agreements on agriculture, services, intellectual property, and certain trade-related investment measures. These newer rules in particular are forcing the WTO and its dispute settlement system to deal with complex issues that go beyond tariff border measures. "], "subsections": []}, {"section_title": "Establishing New Rules and Trade Liberalization through Negotiations", "paragraphs": ["As the GATT did for 47 years, the WTO provides a negotiating forum where members reduce barriers and try to sort out their trade problems. Negotiations can involve a few countries, many countries, or all members. As part of the post-Uruguay Round agenda, negotiations covering basic telecommunications and financial services were completed under the auspices of the WTO in 1997. Selected WTO members also negotiated deals to eliminate tariffs on certain information technology products and improve rules and procedures for government procurement. A recent significant accomplishment was the WTO Trade Facilitation Agreement in 2017, addressing customs and logistics barriers.", "The latest round of multilateral negotiations, the Doha Development Agenda (DDA), or Doha Round, launched in 2001, has achieved limited progress to date, as the agenda proved difficult and contentious. Despite a lack of consensus on its future, many view the round as effectively over. The negotiations stalled over issues such as reducing domestic subsidies and opening markets further in agriculture, industrial tariffs, nontariff barriers, services, intellectual property rights, and SDT for developing countries. The negotiations exposed fissures between developed countries, led by the United States and the EU, on the one hand, and developing countries, led by China, Brazil, and India, on the other hand, who have come to play a more prominent role in global trade.", "The inability of countries to achieve the objectives of the Doha Round prompted many to question the utility of the WTO as a negotiating forum, as well as the practicality of conducting a large-scale negotiation involving 164 participants with consensus and the single undertaking as guiding principles. At the same time, many proposals have been advanced for moving forward from Doha and making the WTO a stronger forum for negotiations in the future. (See \" Policy Issues and Future Direction .\") ", "The WTO arguably has been more successful in the negotiation of discrete items to which not all parties must agree or be bound (see \" Plurilateral Agreements (Annex 4) \"). Some view these plurilaterals as a more promising negotiating approach for the WTO moving forward given their flexibility, as they can involve subsets of more \"like-minded\" partners and advance parts of the global trade agenda. Some experts have raised concerns, however, that this approach could lead to \"free riders\"\u2014those who benefit from the agreement but do not make commitments\u2014for agreements on an MFN basis, or otherwise, could isolate some countries who do not participate and may face new trade restrictions or disadvantages as a result. Others argue that only though the single undertaking approach to negotiations can there be trade-offs that are sufficient to bring all members on board. "], "subsections": []}, {"section_title": "Resolving Disputes", "paragraphs": ["The third function of the WTO is to provide a mechanism to enforce its rules and settle trade disputes. A central goal of the United States during the Uruguay Round negotiations was to strengthen the dispute settlement mechanism that existed under the GATT. While the GATT's process for settling disputes between member countries was informal, ad hoc, and voluntary, the WTO dispute settlement process is more formalized and enforceable. Under the GATT, panel proceedings could take years to complete; any defending party could block an unfavorable ruling; failure to implement a ruling carried no consequence; and the process did not cover all the agreements. Under the WTO, there are strict timetables\u2014though not always followed\u2014for panel proceedings; the defending party cannot block rulings; there is one comprehensive dispute settlement process covering all the agreements; and the rulings are enforceable. WTO adjudicative bodies can authorize retaliation if a member fails to implement a ruling or provide compensation. Yet, under both systems, considerable emphasis is placed on having the member countries attempt to resolve disputes through consultations and negotiations, rather than relying on formal panel rulings. See \" Dispute Settlement Understanding (DSU) \" for more detail on WTO procedures and dispute trends. "], "subsections": []}]}, {"section_title": "The United States and the WTO", "paragraphs": ["The statutory basis for U.S. membership in the WTO is the Uruguay Round Agreements Act (URAA, P.L. 103-465 ), which approved the trade agreements resulting from the Uruguay Round. The legislation contained general provisions on ", "approval and entry into force of the Uruguay Round Agreements, and the relationship of the agreements to U.S. laws (Section 101 of the act); authorities to implement the results of current and future tariff negotiations (Section 111 of the act); oversight of activities of the WTO (Sections 121-130 of the act); procedures regarding implementation of dispute settlement proceedings affecting the United States (Section 123 of the act); objectives regarding extended Uruguay Round negotiations; statutory modifications to implement specific agreements, including the following: Antidumping Agreement; Agreement on Subsidies and Countervailing Measures (ASCM); Safeguards Agreement; Agreement on Government Procurement (GPA); Technical Barriers to Trade (TBT) (product standards); Agreement on Agriculture; and Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).", "U.S. priorities and objectives for the GATT/WTO have been reflected in various trade promotion authority (TPA) legislation since 1974. For example, the Omnibus Trade and Competitiveness Act of 1988 specifically contained provisions directing U.S. negotiators to negotiate disciplines on agriculture, dispute settlement, intellectual property, trade in services, and safeguards, among others, that resulted in WTO agreements in the Uruguay Round (see text box above). The Trade Act of 2002 provided U.S. objectives for the Doha Round, including seeking to expand commitments on e-commerce and clarifications to the WTO dispute settlement system. The 2015 TPA, perhaps reflecting the impasse of the Doha Round, was more muted, seeking full implementation of existing agreements, enhanced compliance by members with their WTO obligations, and new negotiations to extend commitments to new areas.", "Section 125(b) of the URAA sets procedures for congressional disapproval of WTO participation. It specifies that Congress's approval of the WTO agreement shall cease to be effective \"if and only if\" Congress enacts a joint resolution calling for withdrawal. Congress may vote every five years on withdrawal; resolutions were introduced in 2000 and 2005,\u00a0however neither passed."], "subsections": []}]}, {"section_title": "WTO Agreements", "paragraphs": ["The WTO member-led body negotiates, administers, and settles disputes for agreements that cover goods, agriculture, services, certain trade-related investment measures, and intellectual property rights, among other issues. The WTO core principles are enshrined in a series of trade agreements that include rules and commitments specific to each agreement, subject to various exceptions. The GATT/WTO system of agreements has expanded rulemaking to several areas of international trade, but does not extensively cover some key areas, including multilateral investment rules, trade-related labor or environment issues, and emerging issues like digital trade or the commercial role of state-owned enterprises. "], "subsections": [{"section_title": "Marrakesh Agreement Establishing the World Trade Organization", "paragraphs": ["The Marrakesh Agreement is the umbrella agreement under which the various agreements, annexes, commitment schedules, and understandings reside. The Marrakesh Agreement itself created the WTO as a legal international organization and sets forth its functions, structure, secretariat, budget procedures, decisionmaking, accession, entry-into-force, withdrawal, and other provisions. The Agreement contains four annexes. The three major substantive areas of commitments undertaken by the members are contained in Annex 1. "], "subsections": []}, {"section_title": "Multilateral Agreement on Trade in Goods (Annex 1A)", "paragraphs": ["The Multilateral Agreement on Trade in Goods establishes the rules for trade in goods through a series of sectoral or issue-specific agreements (see Table 2 ). Its core is the GATT 1994, which includes GATT 1947, the amendments, understanding, protocols, and decisions of the GATT from 1947 to 1994, cumulatively known as the GATT- acquis , as well as six Understandings on Articles of the GATT 1947 negotiated in the Uruguay Round. In addition to clarifying the core WTO principles, each agreement contains sector- or issue-specific rules and principles. The schedule of commitments identifies each member's specific binding commitments on tariffs for goods in general, and combinations of tariffs and quotas for some agricultural goods. Through a series of negotiating rounds, members agreed to the current level of trade liberalization (see Figure 2 above).", "In the last four rounds of negotiations, WTO members aimed to expand international trade rules beyond tariff reductions to tackle barriers in other areas. For example, agreements on technical barriers to trade (TBT) and sanitary and phytosanitary (SPS) measures aim to protect a country's rights to implement domestic regulations and standards, while ensuring they do not discriminate against trading partners or unnecessarily restrict trade. "], "subsections": [{"section_title": "Agreement on Agriculture (AoA)", "paragraphs": ["The Agreement on Agriculture (AoA) includes rules and commitments on market access and disciplines on certain domestic agricultural support programs and export subsidies. Its objective was to provide a framework for WTO members to reform certain aspects of agricultural trade and domestic farm policies to facilitate more market-oriented and open trade. Regarding market access, members agreed not to restrict agricultural imports by quotas or other nontariff measures, converting them to tariff-equivalent levels of protection, such as tariff-rate quotas\u2014a process called \"tariffication.\" Developed countries committed to cut tariffs (or out-of-quota tariffs, those tariffs applied to any imports above the agreed quota threshold) by an average of 36% in equal increments over six years; developed countries committed to 24% tariff cuts over 10 years. Special safeguards to temporarily restrict imports were permitted in certain events, such as falling prices or surges of imports. ", "The AoA also categorizes and restricts agricultural domestic support programs according to their potential to distort trade. Members agreed to limit and reduce the most distortive forms of domestic subsidies over 6 to 10 years, referred to as \"amber box\" subsidies and measured by the Aggregate Measure of Support (AMS) index. Subsidies considered to cause minimal distortion on production and trade were not subject to spending limits and exempted from obligations as \"green box\" and \"blue box\" subsidies or under de minimis (below a certain threshold) or SDT provisions. In addition, export subsidies were to be capped and subject to incremental reductions, both by value and quantity of exports covered. A so-called \"peace\" clause protected members using subsidies that comply with the agreement from being challenged under other WTO agreements, such as through use of countervailing duties; the clause expired after nine years in 2003. Members are required to regularly submit notifications on the implementation of AoA commitments\u2014though some countries, including the United States, have raised concerns that these requirements are not abided by in a consistent fashion. ", "Further agricultural trade reform was a major priority under the Doha Round, but negotiations have seen limited progress to date (see \" Ongoing WTO Negotiations \"). However, in 2015, members reached an agreement to fully eliminate export subsidies for agriculture."], "subsections": []}, {"section_title": "Trade-Related Investment Measures (TRIMS)", "paragraphs": ["The framework of the GATT did not address the growing linkages between trade and investment. During the Uruguay Round, the Agreement on Trade-Related Investment Measures (TRIMS) was drafted to address certain investment measures that may restrict and distort trade. The agreement did not address the regulation or protection of foreign investment, but focused on investment measures that may violate basic GATT disciplines on trade in goods, such as nondiscrimination. Specifically, members committed not to apply any TRIM that is inconsistent with provisions on national treatment or a prohibition of quantitative restrictions on imports or exports. TRIMS includes an annex with an illustrative list of prohibited measures, such as local content requirements\u2014requirements to purchase or use products of domestic origin. The agreement also includes a safeguard measure for balance of payment difficulties, which permits developing countries to temporarily suspend TRIMS obligations. ", "While TRIMS and other WTO agreements, such as the GATS (see below), include some provisions pertaining to investment, the lack of comprehensive multilateral rules on investment led to several efforts under the Doha Round to consider proposals, which to date have been unfruitful (see \" Future Negotiations \"). In December 2017, 70 WTO members announced plans to begin new discussions on developing a multilateral framework on investment facilitation, in part to complement the successful negotiation of rules on trade facilitation. "], "subsections": []}]}, {"section_title": "General Agreement on Trade in Services (GATS) (Annex 1B)", "paragraphs": ["The GATT agreements focused solely on trade in goods, excluding services. Services were eventually covered in the GATS as a result of the Uruguay Round agreements. The GATS provides the first and only multilateral framework of principles and rules for government policies and regulations affecting trade in services. It has served as the foundation on which rules in other trade agreements on services are based.", "The services trade agenda is complex due to the characteristics of the sector. \"Services\" refers to a growing range of economic activities, such as audiovisual, construction, computer and related services, express delivery, e-commerce, financial, professional (e.g., accounting and legal services), retail and wholesaling, transportation, tourism, and telecommunications. Advances in information technology and the growth of global supply chains have reduced barriers to trade in services, expanding the services tradable across national borders. But liberalizing trade in services can be more complex than for goods, since the impediments faced by service providers occur largely within the importing country, as so-called \"behind the border\" barriers, some in the form of government regulations. While the right of governments to regulate service industries is widely recognized as prudent and necessary to protect consumers from harmful or unqualified providers, a main focus of WTO members is whether these regulations are applied to foreign service providers in a discriminatory and unnecessarily trade restrictive manner that limits market access. ", "The GATS contains multiple parts, including definition of scope (excluding government-provided services); principles and obligations, including MFN treatment and transparency; market access and national treatment obligations; annexes listing exceptions that members take to MFN treatment; as well as various technical elements. Members negotiated GATS on a positive list basis, which means that the commitments only apply to those services and modes of delivery listed in each member's schedule of commitments. WTO members adopted a system of classifying four modes of delivery for services to measure trade in services and classify government measures that affect trade in services, including cross-border supply, consumption abroad, commercial presence, and temporary presence of natural persons ( Figure 4 ). Under GATS, unless a member country has specifically committed to open its market to suppliers in a particular service, the national treatment and market access obligations do not apply.", "In addition to the GATS, some members made specific sectoral commitments in financial services and telecommunications. Negotiations to expand these commitments were later folded into the broader services negotiations.", "WTO members aimed to update GATS provisions and market access commitments as part of the Doha Round. Several WTO members have since submitted revised offers of services liberalization, but in the view of the United States and others the talks have not yielded adequate offers of improved market access (see \" Future Negotiations \"). Given the lack of progress, in 2013, 23 WTO members, including the United States, representing approximately 70% of global services trade, launched negotiations of a services-specific plurilateral agreement. Although outside of the WTO structure, participants designed the Trade in Services Agreement (TiSA) negotiations in a way that would not preclude a concluded agreement from someday being brought into the WTO. TiSA talks were initially led by Australia and the United States, but have since stalled; the Trump Administration has not stated a formal position on TiSA."], "subsections": []}, {"section_title": "Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) (Annex 1C)", "paragraphs": ["The TRIPS Agreement marked the first time multilateral trade rules incorporated intellectual property rights (IPR)\u2014legal, private, enforceable rights that governments grant to inventors and artists to encourage innovation and creative output. Like the GATS, TRIPS was negotiated as part of the Uruguay Round and was a major U.S. objective for the round. ", "The TRIPS Agreement sets minimum standards of protection and enforcement for IPR. Much of the agreement sets out the extent of coverage of the various types of intellectual property, including patents, copyrights, trademarks, trade secrets, and geographical indications. TRIPS includes provisions on nondiscrimination and on enforcement measures, such as civil and administrative procedures and remedies. IPR disputes under the agreement are also subject to the WTO dispute settlement mechanism.", "The TRIPS Agreement's newly placed requirements on many developing countries elevated the debate over the relationship between IPR and development. At issue is the balance of rights and obligations between protecting private right holders and securing broader public benefits, such as access to medicines and the free flow of data, especially in developing countries. TRIPS includes flexibilities for developing countries allowing longer phase-in periods for implementing obligations and, separately, for pharmaceutical patent obligations\u2014these were subsequently extended for LDCs until January 2033 or until they no longer qualify as LDCs, whichever is earlier. The 2001 WTO \"Doha Declaration\" committed members to interpret and implement TRIPS obligations in a way that supports public health and access to medicines. In 2005, members agreed to amend TRIPS to allow developing and LDC members that lack production capacity to import generic medicines from third country producers under \"compulsory licensing\" arrangements. The amendment entered into force in January 2017."], "subsections": []}, {"section_title": "Trade Remedies", "paragraphs": ["While WTO agreements uphold MFN principles, they also allow exceptions to binding tariffs in certain circumstances. The WTO Agreement on Subsidies and Countervailing Measures (ASCM), Agreement on Safeguards, and articles in the GATT, commonly known as the Antidumping Agreement, allow for trade remedies in the form of temporary measures (e.g., primarily duties or quotas) to mitigate the adverse impact of various trade practices on domestic industries and workers. These include actions taken against dumping (selling at an unfairly low price) or to counter certain government subsidies, and emergency measures to limit \"fairly\"-traded imports temporarily, designed to \"safeguard\" domestic industries. ", "Supporters of trade remedies view them as necessary to shield domestic industries and workers from unfair competition and to level the playing field. Other domestic constituents, including some importers and downstream consuming industries, voice concern that antidumping (AD) and countervailing duty (CVD) actions can serve as disguised protectionism and create inefficiencies in the world trading system by raising prices on imported goods. How trade remedies are applied to imports has become a major source of disputes under the WTO (see below).", "The United States has enacted trade remedy laws that conform to the WTO rules:", "U.S. antidumping laws (19 U.S.C. \u00a71673 et seq.) provide relief to domestic industries that have been, or are threatened with, the adverse impact of imports sold in the U.S. market at prices that are shown to be less than fair market value. The relief provided is an additional import duty placed on the dumped imports. U.S. countervailing duty laws (19 U.S.C. \u00a71671 et seq.) give similar relief to domestic industries that have been, or are threatened with, the adverse impact of imported goods that have been subsidized by a foreign government or public entity, and can therefore be sold at lower prices than U.S.-produced goods. The relief provided is a duty placed on the subsidized imports. U.S. safeguard laws give domestic industries relief from import surges of goods; no allegation of \"unfair\" practices is needed to launch a safeguard investigation. Although used less frequently than AD/CVD laws, Section 201 of the Trade Act of 1974 (19 U.S.C. \u00a72251 et seq.), is designed to give domestic industry the opportunity to adjust to import competition and remain competitive. The relief provided is generally a temporary import duty and/or quota. Unlike AD/CVD, safeguard laws require presidential action for relief to be put into effect."], "subsections": []}, {"section_title": "Dispute Settlement Understanding (DSU) (Annex 2)", "paragraphs": ["The dispute settlement system, often called the \"crown jewel\" of the WTO, has been considered by some observers to be one of the most important successes of the multilateral trading system. WTO agreements contain provisions that are either binding or nonbinding. The WTO Understanding on Rules and Procedures Governing the Settlement of Disputes\u2014Dispute Settlement Understanding or DSU\u2014provides an enforceable means for WTO members to resolve disputes arising under the binding provisions. The DSU commits members not to determine violations of WTO obligations or impose penalties unilaterally, but to settle complaints about alleged violations under DSU rules and procedures. ", "The Dispute Settlement Body (DSB) is a plenary committee of the WTO, which oversees the panels and adopts the recommendation of a dispute settlement panel or Appellate Body (AB) panel. Panels are composed of three (or five in complex cases) panelists\u2014not citizens of the members involved\u2014chosen through a roster of \"well qualified governmental and/or non-governmental individuals\" maintained by the Secretariat. WTO members must first attempt to settle a dispute through consultations, but if these fail, a member seeking to initiate a dispute may request that a panel examine and report on its complaint. A respondent party is able to block the establishment of a panel at the DSB once, but if the complainant requests its establishment again at a subsequent meeting of the DSB, a panel is established. At its conclusion, the panel recommends a decision to the DSB that it will adopt unless all parties agree to block the recommendation. The DSU sets out a timeline of one year for the initial resolution of disputes (see Figure 5 ); however, cases are rarely resolved in this timeframe.", "The DSU also provides for AB review of panel reports in the event a panel decision is appealed. The AB is composed of seven rotating panelists serving four-year terms, with the possibility of a one-term reappointment. According to the DSU, appeals are to be limited to questions of law or legal interpretation developed by the panel in the case (Article 17.6). The AB is to make a recommendation and the DSB is to ratify that recommendation within 120 days of the ratification of the initial panel report, but again, such timely resolution rarely occurs. The United States has raised several issues regarding the practices of the AB and has blocked the appointments of several judges\u2014for more on the current debate, see \" Proposed Institutional Reforms .\"", "Following the adoption of a panel or appellate report, the DSB oversees the implementation of the findings. The losing party is then to propose how it is to bring itself into compliance \"within a reasonable period of time\" with the DSB-adopted findings. A reasonable period of time is determined by mutual agreement with the DSB, among the parties, or through arbitration. If a dispute arises over the manner of implementation, the DSB may form a panel to judge compliance. If a party declines to comply, the parties negotiate over compensation pending full implementation. If there is still no agreement, the DSB may authorize retaliation in the amount of the determined cost of the offending party's measure to the aggrieved party's economy. There have been some calls for reform of the dispute settlement system to deal with the procedural delays and new strains on the system, including the growing volume and complexity of cases.", "Filing a dispute settlement case provides a way for countries to resolve disputes through a legal process and to do so publicly, signaling to domestic and international constituents the need to address outstanding issues. Dispute settlement procedures can serve as a deterrent for countries considering not abiding by WTO agreements, and rulings can help build a body of case law to inform countries when they implement new regulatory regimes or interpret WTO agreements. ", "That said, WTO agreements and decisions of panels are not self-executing and cannot directly modify U.S. law. If a case is brought against the United States and the panel renders an adverse decision, the United States would be expected to remove the offending measure within a reasonable period of time or face the possibility of either paying compensation to the complaining member or becoming subject to sanctions, often in the form of higher tariffs on imports of certain U.S. products.", "As of the beginning of 2019, the WTO has initiated nearly 580 disputes on behalf of its members and issued more than 350 rulings, with 2018 marking its most active year to date. Nearly two-thirds of WTO members have participated in the dispute settlement system. Not all complaints result in formal panel proceedings; about half were resolved during consultations. The complainants usually win their cases, in large part because they initiate disputes that they have a high chance of winning. In the words of WTO Director-General (DG) Roberto Azev\u00eado, the widespread use of the DS system is evidence it \"enjoys tremendous confidence among the membership, who value it as a fair, effective, efficient mechanism to solve trade problems.\" ", "The United States is an active user of the DS system. Among WTO members, the United States has been a complainant in the most dispute cases since the system was established in 1995, initiating 123 disputes, followed by the EU with 100 disputes. The two largest targets of complaints initiated by the United States are China and the EU, which, combined, account for more than one-third ( Figure 6 ). The latest summary by USTR reports that among WTO disputes through 2015 the United States largely prevailed on \"core issues\" in 46 of its complaints and lost in 4. Since the report was released, additional cases have been ruled in favor of the United States, including disputes over India's solar energy policies and Indonesia's import licensing requirements. The majority of disputes initiated by the United States between 2016 and early 2019 remain in the consultation or panel stages and have not been decided. ", "As a respondent in 153 dispute cases since 1995, the United States has also had the most disputes filed against it by other WTO members, followed by the EU (85 disputes) and China (43 disputes). The EU is the largest source of disputes filed against the United States, followed by Canada, China, South Korea, Brazil, and India. A large number of complaints concern U.S. trade remedies, in particular the methodologies used for calculating and imposing antidumping duties on U.S. imports. The latest summary by USTR reports that as a respondent, the United States won on \"core issues\" in 17 cases and lost in 57 cases through 2015. Since then, the WTO has ruled against the United States on certain aspects of complaints related to U.S. trade remedies, including in cases initiated by South Korea, China, Canada, and Turkey. The United States has prevailed in other cases, for example in December 2017, a panel ruled in U.S. favor in a case brought by Indonesia over U.S. duties on coated paper imports. The DSB has authorized retaliation against the United States for maintaining a measure in violation of WTO rules in just a handful of cases. Most recently, in February 2019, a panel authorized South Korea to retaliate in a complaint over U.S. methodology for calculating antidumping duties on South Korean imports of large residential washers.", "Several pending WTO disputes are of significance to the United States. One involves China's complaints over U.S. and EU failure to grant China market economy status (see \" China's Accession and Membership \" ) . Other cases involve challenges to the tariff measures imposed by the Trump Administration under U.S. trade laws, including Section 201 (safeguards), Section 232 (national security), and Section 301 (\"unfair\" trading practices) ( Table 3 ). Nine WTO members, including China, the EU, Canada, and Mexico, initiated separate complaints at the WTO, based on allegations that U.S. Section 232 tariffs on steel and aluminum imports are inconsistent with WTO rules. Consultations were unsuccessful in resolving the disputes, and panels have been established in all nine cases. Most countries notified their consultation requests pursuant to the Agreement on Safeguards, though some countries also allege that U.S. tariff measures and related exemptions are contrary to U.S. obligations under several provisions of the GATT. Several other WTO members have requested to join the disputes as third parties. ", "On July 16, 2018, the United States filed its own WTO complaints over retaliatory tariffs imposed by five countries (Canada, China, EU, Mexico, and Turkey) in response to U.S. actions, and in late August, it filed a similar case against Russia. The United States has invoked the so-called national security exception (GATT Article XXI) in defense of the tariffs (see \" Key Exceptions under GATT/WTO \"), and states that the tariffs are not safeguards as claimed by other countries. By the end of January 2019, all of the disputes had entered the panel phase."], "subsections": []}, {"section_title": "Trade Policy Review Mechanism (Annex 3)", "paragraphs": ["Annex 3 sets out the procedures for the regular trade policy reviews that are conducted by the Secretariat to report on the trade policies of the membership. These reviews are carried out by the Trade Policy Review Body (TPRB) and are conducted periodically with the largest economies (United States, EU, Japan, and China) evaluated every three years, the next 16 largest economies every five years, and remaining economies every seven years. These reviews are meant to increase transparency of a country's trade policy and enable a multilateral assessment of the effect of policies on the trading system. These reviews also allow each member country to question specific practices of other members, and may serve as a forum to flag, and possibly avoid, future disputes. ", "The most recent trade policy review of China occurred in July 2018. During the review members noted and commended some recent initiatives of China to open market access and liberalize its foreign investment regime. Several concerns were also raised, including \"the preponderant role of the State in general, and of state-owned enterprises in particular,\" and \"China's support and subsidy policies and local content requirements, including those that may be part of the 2025 [Made in China] plan.\" "], "subsections": []}, {"section_title": "Plurilateral Agreements (Annex 4)", "paragraphs": ["Most WTO agreements in force have been negotiated on a multilateral basis, meaning the entire body of WTO members subscribes to them. By contrast, plurilateral agreements are negotiated by a subset of WTO members and often focus on a specific sector. A handful of such agreements supplement the main WTO agreements discussed previously.", "Within the WTO, members have two ways to negotiate on a plurilateral basis, also known as \"variable geometry.\" A group of countries can negotiate with one another provided that the group extends the benefits to all other WTO members on an MFN basis\u2014the foundational nondiscrimination principle of the GATT/WTO. Because the benefits of the agreement are to be shared among all WTO members and not just the participants, the negotiating group likely would include those members forming a critical mass of world trade in the product or sector covered by the negotiation in order to avoid the problem of free riders\u2014those countries that receive trade benefits without committing to liberalization. An example of this type of plurilateral agreement granting unconditional MFN is the Information Technology Agreement (ITA), in which tariffs on selected information technology goods were lowered to zero, as negotiated by WTO members comprising more than 90% of world trade in these goods (see below).", "A second type of WTO plurilateral is the non-MFN agreement, often referred to as \"conditional-MFN.\" In this type, participants undertake additional obligations among themselves, but do not extend the benefits to other WTO members, unless they directly participate in the agreement. Also known as the \"club\" approach, non-MFN plurilaterals allow for willing members to address policy issues not covered by WTO disciplines. However, these types of agreements require a waiver from the entire WTO membership to commence negotiations. Some countries are reluctant even to allow other countries to negotiate for fear of being left out, even while not being ready to commit themselves to new disciplines. Yet, according to one commentator, these members are \"simply outsmarting themselves\" by encouraging more ambitious members to take negotiations out of the WTO altogether, such as the proposed expansion of the GATS through the plurilateral (and outside the WTO) TiSA."], "subsections": [{"section_title": "Government Procurement Agreement", "paragraphs": ["The Government Procurement Agreement (GPA) is an early example of a plurilateral agreement with limited WTO membership\u2014first developed as a code in the 1979 Tokyo Round. As of the end of 2018, 47 WTO members (including the 28 EU member countries and United States) participate in the GPA; non-GPA signatories do not enjoy rights under the GPA. The GPA provides market access for various nondefense government projects to contractors of its signatories. Each member specifies government entities and goods and services (with thresholds and limitations) that are open to procurement bids by foreign firms of the other GPA members. For example, the U.S. GPA market access schedules of commitments cover 85 federal-level entities and voluntary commitments by 37 states.", "Negotiations to expand the GPA were concluded in March 2012, and a revised GPA entered into force on April 6, 2014. Several countries, including China\u2014which committed to pursuing GPA participation in its 2001 WTO accession process\u2014are in long-pending negotiations to accede to the GPA. South Korea, Moldova, and Ukraine were the latest WTO members to join the GPA in 2016. According to estimates by the U.S. Government Accountability Office (GAO), from 2008 to 2012, 8% of total global government expenditures, and approximately one-third of U.S. federal government procurement, was covered by the GPA or similar commitments in U.S. FTAs."], "subsections": []}, {"section_title": "Information Technology Agreement", "paragraphs": ["Unlike the GPA, the Information Technology Agreement (ITA) is a plurilateral agreement that is applied on an unconditional MFN basis. In other words, all WTO members benefit from the tariff reductions enacted by parties to the ITA regardless of their own participation. Originally concluded in 1996 by a subset of WTO members, the ITA provides tariff-free treatment for covered IT products; however, the agreement does not cover services or digital products like software. In December 2015, a group of 51 WTO members, including the United States, negotiated an expanded agreement to cover an additional 201 products and technologies, valued at over $1 trillion in annual global exports. Members committed to reduce the majority of tariffs by 2019. In June 2016, the United States initiated the ITA tariff cuts. China began its cuts in mid-September 2016 with plans to reduce tariffs over five to seven years. ITA members are expected to review the agreement's scope in 2018 to determine if additional product coverage is needed."], "subsections": []}]}, {"section_title": "Trade Facilitation Agreement (TFA)", "paragraphs": ["The Trade Facilitation Agreement (TFA) is the newest WTO multilateral trade agreement, entering into force on February 22, 2017, and perhaps the lasting legacy of the Doha Round, since it is the only major concluded component of the negotiations. The TFA aims to address multiple trade barriers confronted by exporters and importers and reduce trade costs by streamlining, modernizing, and speeding up the customs processes for cross-border trade, as well as making it more transparent. Some analysts view the TFA as evidence that achieving new multilateral agreements is possible and that the design, including special and differential treatment provisions, could serve as a template for future agreements.", "The TFA has three sections. The first is the heart of the agreement, containing the main provisions, of which many, but not all, are binding and enforceable. Mandatory articles include requiring members to publish information, including publishing certain items online; issue advance rulings in a reasonable amount of time; and provide for appeals or reviews, if requested. ", "The second section provides for SDT for developing country and LDC members, allowing them more time and assistance to implement the agreement. The TFA is the first WTO agreement in which members determine their own implementation schedules and in which progress in implementation is explicitly linked to technical and financial capacity. The TFA requires that \"donor members,\" including the United States, provide the needed capacity building and support. Finally, the third section sets institutional arrangements for administering the TFA."], "subsections": []}, {"section_title": "Key Exceptions under GATT/WTO", "paragraphs": ["Under WTO agreements, members generally cannot discriminate among trading partners, though specific market access commitments can vary significantly by agreement and by member. WTO rules permit some broad exceptions, which allow members to adopt trade policies and practices that may be inconsistent with WTO disciplines and principles such as MFN treatment, granting special preferences to certain countries, and restricting trade in certain sectors, provided certain conditions are met. Some of the key exceptions follow.", "General e xceptions . GATT Article XX grants WTO members the right to take certain measures necessary to protect human, animal, or plant life or health, or to conserve exhaustible natural resources, among other aims. The measures, however, must not entail \"arbitrary\" or \"unjustifiable\" discrimination between countries where the same conditions prevail, or serve as \"disguised restriction on international trade.\" GATS Article XIV provides for similar exceptions for trade in services.", "National security exception. GATT Article XXI protects the right of members to take any action they consider \"necessary for the protection of essential national security interests\" as related to (i) fissionable materials; (ii) traffic in arms, ammunition, and implements of war, and such traffic in other goods and materials carried out to supply a military establishment; and (iii) taken in time of war or other emergency in international relations. Similar exceptions relate to trade in services (GATS Article XIV bis) and intellectual property rights (TRIPS Article 73).", "More f avorable t reatment to d eveloping c ountries . The so-called \"enabling clause\" of the GATT\u2014called the \"Decision on Differential and More Favorable Treatment, Reciprocity and Fuller Participation of Developing Countries\" of 1979\u2014enables developed country members to grant differential and more favorable treatment to developing countries that is not extended to other members. For example, this permits granting unilateral and nonreciprocal trade preferences to developing countries under special programs, such as the U.S. Generalized System of Preferences (GSP), and also relates to regional trade agreements outside the WTO (see below). ", "Exceptions for r egi onal tr ade agreements (RTAs ) . WTO countries are permitted to depart from the MFN principle and grant each other more favorable treatment in trade agreements outside the WTO, provided certain conditions are met. Three sets of rules generally apply. GATT Article XXIV applies to goods trade, and allows the formation of free trade areas and customs unions (areas with common external tariffs). These provisions require that RTAs be notified to the other WTO members, cover \"substantially all trade,\" and do not effectively raise barriers on imports from third parties. GATS Article V allows for economic integration agreements related to services trade, provided they entail \"substantial sectoral coverage,\" eliminate \"substantially all discrimination,\" and do not \"raise the overall level of barriers to trade in services\" on members outside the agreement. Paragraph 2(c) of the \"enabling clause,\" which deals with special and differential treatment, allows for RTAs among developing countries in goods trade, based on the \"mutual reduction or elimination of tariffs.\" RTA provisions in the GATS also allow greater flexibility in sectoral coverage within services agreements that include developing countries."], "subsections": []}]}, {"section_title": "Joining the WTO: The Accession Process", "paragraphs": ["There are currently 164 members of the WTO. Another 22 countries are seeking to become members. Joining the WTO means taking on the commitments and obligations of all the multilateral agreements. Governments are motivated to join not just to expand access to foreign markets but also to spur domestic economic reforms, help transition to market economies, and promote the rule of law. While any state or customs territory fully in control of its trade policy may become a WTO member, a lengthy process of accession involves a series of documentation of a country's trade regime and market access negotiation requirements (see Figure 7 ).", "For example, Kazakhstan joined the WTO on November 30, 2015, after a 20-year process. Afghanistan became the 164th WTO member on July 29, 2016, after nearly 12 years of negotiating its accession terms. Other countries have initiated the process but face delays. Iran first applied for membership in 1996 and, while it submitted its Memorandum on the Foreign Trade Regime in 2009 (a prerequisite for negotiating an accession package), Iran has not begun the bilateral negotiation process, and the United States is unlikely to support its accession. ", "As the WTO generally operates by member consensus, any single member could block the accession of a prospective new member. As part of the process, a prospective member must satisfy specific market access conditions of other WTO members by negotiating on a bilateral basis. The United States has been a central arbiter of the accession process for countries like China (joined in 2001, see below), Vietnam (2007), and Russia (2012), with which permanent normal trade relations had to be established concurrently under U.S. law for the United States to receive the full benefits of their membership. "], "subsections": [{"section_title": "China's Accession and Membership", "paragraphs": ["China formally joined the WTO in December 2001. China has emerged as a major player in the global economy, as the fastest-growing economy, largest merchandise exporter, and second-largest merchandise importer worldwide. China's accession into the WTO on commercially meaningful terms was a major U.S. trade objective during the late 1990s. Entry into the WTO was viewed as an important catalyst for spurring additional economic and trade reforms and the opening of China's economy in a market, rules-based direction. These reforms have made China an increasingly significant market for U.S. exporters , a central factor in global supply chains, and a major source of low -cost goods for U.S. consumers. At the same time, China has yet to fully transit ion to a market economy and the government continue s to intervene in many parts of the econom y, which has created a growing debate over the role of the WTO in both respects .", "Negotiations for China's accession to the GATT and then the WTO began in 1986 and took more than 15 years to complete. During WTO negotiations, China sought to enter the WTO as a developing country, while U.S. trade officials insisted that China's entry into the WTO had to be based on \"commercially meaningful terms\" that would require China to significantly reduce trade and investment barriers within a relatively short time. In the end, a compromise was reached that required China to make immediate and extensive reductions in various trade and investment barriers, while allowing it to maintain some level of protection (or a transitional period of protection) for certain sensitive sectors (see text box ). ", "According to USTR, after joining the WTO, China began to implement economic reforms that facilitated its transition toward a market economy and increased its openness to trade and foreign direct investment (FDI). China also generally implemented its tariff cuts on schedule. However, by 2006, U.S. officials and companies noted evidence of some trends toward a more restrictive trade regime and more state intervention in the economy. In particular, observers voiced concern about various Chinese industrial policies, such as those that foster indigenous innovation based on forced technology transfer, domestic subsidies, and IP theft. Some stakeholders have expressed concerns over China's mixed record of implementing certain WTO obligations and asserted that, in some cases, China appeared to be abiding by the letter but not the \"spirit\" of the WTO. ", "The United States and other WTO members have used dispute settlement procedures on a number of occasions to address China's alleged noncompliance with certain WTO commitments. As a respondent, China accounts for about 12% of total WTO disputes since 2001. The United States has brought 23 dispute cases against China at the WTO on issues, including IPR protection, subsidies, and discriminatory industrial policies, and has largely prevailed in most cases. Though some issues remain contested, China has largely complied with most WTO rulings. China has also increasingly used dispute settlement to confront what it views as discriminatory measures; to date, it has brought 15 cases against the United States (as of February 2019).", "More broadly, the Trump Administration has questioned whether WTO rules are sufficient to address the challenges that China's economy presents. USTR Robert Lighthizer expressed this view in remarks in September 2017: \"The sheer scale of their coordinated efforts to develop their economy, to subsidize, to create national champions, to force technology transfer, and to distort markets in China and throughout the world is a threat to the world trading system that is unprecedented. Unfortunately, the World Trade Organization is not equipped to deal with this problem.\" USTR views efforts to resolve concerns over Chinese trade practices to date as limited in effectiveness, including through WTO dispute settlement, as well as recent proposals by WTO members to craft new rules and WTO reforms. In its latest report to Congress on China's WTO compliance, USTR stated the following:", "[The WTO dispute settlement] mechanism is not designed to address a trade regime that broadly conflicts with the fundamental underpinnings of the WTO system. No amount of WTO dispute settlement by other WTO members would be sufficient to remedy this systemic problem. Indeed, many of the most harmful policies and practices being pursued by China are not even directly disciplined by WTO rules. ", "Another related concern some have is whether China claims it is a \"developing country\" under the WTO. Through developing country status, which countries self-designate, countries are entitled to certain rights under special and differential treatment (SDT), among other provisions in WTO agreements (see \" Treatment of Developing Countries \" and text box ). USTR has claimed that \"China persists in claiming to be a 'developing Member'\" in future negotiations at the WTO. While it is unclear what SDT provisions China has sought in ongoing negotiations, China is a part of the coalition group of Asian developing members at the WTO and has claimed to be a developing country in various fora. Chinese officials have asserted that despite being the world's second-largest economy, China remains a developing country, due to its relatively low GDP per capita and other economic challenges.", "Concerns over China's trade actions have led the Trump Administration to increase the use of unilateral mechanisms outside the WTO that in its view more effectively address Chinese \"unfair trade practices;\" the recent Section 301 investigation of Chinese IPR and technology transfer practices and resulting imposition of tariffs is evidence of this strategy. Prior to the establishment of the WTO, the United States resorted to Section 301 relatively frequently, in particular due to concerns that the GATT lacked an effective dispute settlement system. When the United States joined the WTO in 1995, it agreed to use the dispute settlement mechanism rather than act unilaterally; many analysts contend that the United States has violated its WTO obligations by imposing tariffs against China under Section 301. The United States also initiated a WTO dispute settlement case against China's \"discriminatory technology licensing\" in March 2018. Subsequently, China filed its own complaints at the WTO over U.S. tariff actions. ", "The United States has pursued cooperation to some extent with other countries with similar concerns over certain Chinese trade practices and the need to clarify and improve WTO rules on industrial subsidies and SOEs in particular. At the WTO Ministerial meeting in December 2017, USTR Lighthizer, the European Commissioner for Trade Cecelia Malmstr\u00f6m, and Japan's Minister of the Economy, Trade and Industry Hiroshige Seko announced new trilateral efforts to cooperate on issues related to government-supported excess capacity, unfair competition caused by market-distorting subsidies and SOEs, forced technology transfer, and local content requirements. Observers believe that China, while not specifically named, is the intended target of the coordinated action. The three officials continued talks in 2018 and 2019, issuing a scoping paper on stronger rules on industrial subsidies, as well as joint statements on technology transfer and \"market-oriented conditions.\" They indicated plans to propose a draft text on subsidies rules by spring 2019. Some experts have questioned whether recent U.S. tariff actions might undermine efforts to coordinate further action to address these challenges (see \" Selected Challenges and Issues for Congress \").", "Another pending dispute involving China could have significant implications for the treatment of China's economy under WTO rules, in particular debate over the terms of China's \"nonmarket economy\" (NME) status under its WTO accession protocol. Under its accession, China agreed to allow other WTO members to continue to use alternative methodologies, such as surrogate countries, for assessing prices and costs on products subject to antidumping measures. This concession was a result of WTO members' concerns that distortions in the Chinese economy caused by government intervention result in Chinese prices that do not reflect market forces, making them poorly suited to determining dumping margins. China contends that language in its WTO accession protocol requires all WTO members to terminate their use of the alternative methodology by December 11, 2016, including the United States, which has classified China as a NME for trade remedy cases since 1981. The NME distinction is important to China because it has often resulted in higher antidumping margins on Chinese exports; moreover, a significant share of Chinese exports is subject to trade remedies, namely AD duties. The United States and the EU have argued that the WTO language is vague and did not automatically obligate them to extend market economy status (MES) to China because it is still not a market economy. ", "On December 12, 2016, China requested consultations under WTO dispute settlement with the United States and EU over the failure to grant China MES, and the cases are now pending. In April 2017, a panel was established in the EU case, and in November 2017, the United States formally submitted arguments as a third party in support of the EU. The panel said it expected to issue its final report during the second quarter of 2019."], "subsections": []}]}, {"section_title": "Current Status and Ongoing Negotiations", "paragraphs": [], "subsections": [{"section_title": "Buenos Aires Ministerial 2017", "paragraphs": ["The 11 th WTO Ministerial Conference took place December 10-13, 2017, in Buenos Aires, Argentina. The Ministerial generally convenes every two years to make decisions and announce progress on multilateral trade agreements. After countries were unable to complete the Doha Round (see text box ), many questioned what could effectively be achieved in 2017. Members have made some progress in recent years, reaching the Trade Facilitation Agreement in 2013, followed by a small package of deals in 2015 concerning agriculture and rules for LDCs. Still, they remain sharply divided over how to prioritize both unresolved and new issues on the agenda, and, more fundamentally, how to conduct negotiations to better facilitate successful outcomes. ", "WTO Director-General Azev\u00eado had tempered expectations for major negotiated outcomes or announcements at the 11 th Ministerial, acknowledging that \"members' positions continue to diverge significantly on the substantial issues.\" These differences were perhaps most apparent by the inability of WTO members to reach consensus over a draft Ministerial Declaration, largely due to staunch disagreements over including references to the mandate of the Doha Round (see text box ). Instead the Ministerial became primarily an opportunity for members to take stock of ongoing talks and further define priority work areas.", "WTO members had worked intensively to build consensus over proposals in several areas, including reducing fisheries subsidies, a permanent solution to public stockholding for food security, domestic services regulations, and e-commerce. Some members pushed for new initiatives in areas such as investment facilitation; others like India advocated for a greater focus on trade facilitation in services. The U.S. proposal to improve overall transparency at the WTO, with penalties for countries that fail to comply with notification requirements, did not garner enough support to be discussed extensively at the Ministerial.", "The 11 th Ministerial did not result in major breakthroughs. WTO members committed to intensify fisheries subsidies negotiations, \"with a view to adopting\" an agreement by the next Ministerial; the United States has supported these efforts. A joint statement was issued by 60 members in support of advancing multilateral negotiations on domestic regulations in services. Subsets of WTO members also issued statements committing to new work programs or open-ended talks for interested parties to potentially conclude plurilateral agreements in areas, including the following: ", "E-commerce : among 71 WTO members (covering 77% of global trade); Investment facilitation : among 70 WTO members (covering 73% of global trade and 66% of inward FDI); and Micro, small and medium-sized enterprises (MSMEs) : among 87 WTO members (covering 78% of global trade).", "Of these, the United States signed on to the declaration in support of e-commerce. ", "The lack of concrete multilateral outcomes at the 11 th Ministerial was a reminder of the continued resistance of some countries to a new agenda outside of the original 2001 Doha mandate. In the view of EU Trade Commissioner Malmstr\u00f6m, the Ministerial \"laid bare the deficiencies of the negotiating function at the WTO\" and that \"members are systematically being blocked from addressing the pressing realities of global trade.\" Malmstr\u00f6m blamed the lack of progress on \"procedural excuses and vetoes\" and \"cynical hostage taking.\" Some developing country members, including India, attempted to block progress in a range of areas\u2014including the renewal of the decades-old moratorium on e-commerce customs duties\u2014absent more progress on Doha issues such as agricultural stockholding for food security. Such \"hostage-taking\" tactics, widely acknowledged to have hindered progress in the Doha Round, further highlight the difficulty of achieving future consensus among all 164 members.", "While the United States provided input and signaled support for select proposals, the overall perception of many was a lack of U.S. leadership in the Ministerial discussions. Consistent with the Trump Administration's \"America First\" trade policy, the U.S. stated objective for the Ministerial was broadly to \"advocate for U.S. economic and trade interests, including WTO institutional reform and market-based, fair trade policies.\" Several observers were relieved when USTR Lighthizer acknowledged in Ministerial remarks that the WTO plays an important role, even as he outlined key criticisms. The United States viewed the Ministerial outcome positively\u2014that it signaled \"the impasse at the WTO was broken,\" paving the way for like-minded countries to pursue new work in other areas. USTR expressed U.S. support in particular for forthcoming work on e-commerce, scientific standards for agriculture, and disciplines on fisheries subsidies. "], "subsections": []}, {"section_title": "Ongoing WTO Negotiations", "paragraphs": ["While WTO members did not announce any negotiated outcomes at the 11 th Ministerial meeting, several countries committed to make progress on ongoing talks, including fisheries subsidies and e-commerce. In other areas, such as agriculture and environmental goods, talks remain stalled with no clear path forward. "], "subsections": [{"section_title": "Agriculture", "paragraphs": ["For some issues multilateral solutions arguably remain ideal, for example, disciplines on agricultural subsidies, which are widely used by developed and advanced developing countries alike. One concern is that such important, unresolved issues may founder for want of a negotiating venue. While the Doha Round largely did not achieve its comprehensive negotiating mandate to lower agricultural tariffs and subsidies, negotiations more limited in scope have continued. The 2015 Nairobi Ministerial agreed to eliminate export subsidies for agriculture, but the issue of public stockholding remains seemingly intractable. Public stockholding, also known as food security programs, is used by governments, especially in developing countries, to purchase and stockpile food to release to the public during periods of market volatility or shortage. These programs become problematic when governments purchase food at a price and quantity that effectively become trade-distorting domestic support. While no agreement was reached at Buenos Aires, some developing countries, such as India, have demanded that the issue be resolved before new issues are considered in the WTO work program.", "The United States has also flagged the broader issue of notification and transparency. Under WTO agreements, members are required to notify subsidies and trade-distorting support to ensure transparency and consistency with a member's obligation. Compliance with notifications has been notoriously lax, with some countries years behind on their reporting. According to U.S. Department of Agriculture trade counsel Jason Hafemeister, these practices have consequences:", "In the absence of transparency, how are we to determine whether Members are complying with existing obligations? Moreover, only with comprehensive and current information can negotiators understand, discuss, and address the problems that face farmers today: high tariffs, trade distorting support, and non-tariff barriers.", "The United States with other countries recently issued new proposals to address these concerns\u2014see \" Transparency/Notification .\""], "subsections": []}, {"section_title": "Fisheries Subsidies", "paragraphs": ["As noted above, WTO members committed to negotiate disciplines related to fisheries subsidies at the 11 th Ministerial with a view toward reaching an agreement by 2020. The proposals aim to meet the goals outlined in United Nations Sustainable Development Goal 14 targeting illegal, unregulated, and unreported (IUU) fishing. Though multiple areas of disagreement remain, members have been negotiating on the scope of exemptions, such as for fuel subsidies. The United States reportedly seeks to minimize the level and scope of such exclusions. Members are expected to move from discussions of proposals into negotiations on a consolidated draft text by early 2019. The Trump Administration has voiced support for the talks, stating that it continues \"to support stronger disciplines and greater transparency in the WTO with respect to fisheries subsidies.\""], "subsections": []}, {"section_title": "Electronic Commerce/Digital Trade", "paragraphs": ["Digital trade has emerged as a major force in world trade since the Uruguay Round, creating end products (e.g., email or social media), enabling trade in services (e.g., consulting), and facilitating goods trade through services, such as logistics and supply chain management that depend on digital data flows. While the GATS contains explicit commitments for telecommunications and financial services that underlie e-commerce, trade barriers related to digital trade, information flows, and other related issues are not specifically included. The WTO Work Program on Electronic Commerce was established in 1998 to examine trade-related issues for e-commerce under existing agreements. Under the work program, members agreed to continue a temporary moratorium on e-commerce customs duties, and have renewed the moratorium at each ministerial meeting. Some developing countries, however, have begun to question the moratorium, seeing it as blocking a potential government revenue stream. Progress under the work program has largely stalled as multiple members have put forward competing views on possible paths forward.", "In advance of the 2017 Ministerial, various members had submitted proposals for specific work agendas in e-commerce. The U.S. submission, dated July 4, 2016, reflected many of the ideas included in the proposed Trans-Pacific Partnership (TPP), an FTA with 11 other countries in the Asia-Pacific from which the United States withdrew in January 2017. The proposal may gain the support of other TPP members as several have already ratified a slightly modified agreement\u2014the Comprehensive and Progressive Agreement for TPP (CPTPP or TPP-11)\u2014which maintained the digital trade provisions as negotiated by the United States. The Chinese WTO submission, on the other hand, more narrowly focuses on facilitating e-commerce. India has said it would not agree to any new obligations in the WTO related to e-commerce or digital trade, preferring to focus on issues identified under the original Doha mandate, including agriculture. As a result, the 2017 Ministerial ended with an agreement to \"endeavor to reinvigorate our work.\"", "The plurilateral effort announced at the ministerial agreeing to \"initiate exploratory work on negotiations on electronic commerce issues in the WTO\" may provide the best avenue to pursue an agreement within the WTO framework. A U.S. discussion paper on the initiative outlined potential provisions, including protecting cross-border data flows, source code, and encryption technology; prohibiting discrimination, customs duties, technology transfer or localization requirements; and promoting cybersecurity and open government data. The United States also included the WTO Telecommunications Reference Paper, seeking all WTO members to adopt its principles on telecommunications competition. Notably, the U.S. submission did not list privacy or consumer protection among its provisions. ", "The group of 49 WTO members formally launched the e-commerce initiative in January 2019, on the sidelines of the World Economic Forum annual meetings. Their joint statement lists not only the United States and EU as participants, but also several developing countries, including China and Brazil. In the statement, the group agreed to seek a \"high standard outcome that builds on existing WTO agreements and frameworks with the participation of as many WTO Members as possible,\" but did not specify which trade barriers and issues are to be addressed. USTR's statement after the meeting emphasized the need for an enforceable agreement with the \"same obligations for all participants.\" ", "The negotiation process is expected to begin in March 2019. It is unclear how, or if, the plurilateral effort will overlap or be incorporated into the existing multilateral work program."], "subsections": []}, {"section_title": "Environmental Goods Agreement (EGA)", "paragraphs": ["Some countries viewed the 11 th Ministerial meeting as a missed opportunity to reinvigorate the stalled EGA plurilateral negotiations. The EGA negotiations, initiated in mid-2014 by 14 WTO members including the United States and China, seek to liberalize trade in environmental goods through tariff liberalization. Current EGA members represent 86% of global trade in covered environmental goods. Like the ITA, the EGA would be an open plurilateral agreement so that the benefits achieved through negotiations would be extended on an MFN basis to all WTO members. Despite 18 rounds of negotiations, members were unable to conclude the agreement at the December 2016 General Council \u00a0 meeting, and talks have since stalled. Most parties blamed China for the lack of progress, as it rejected the list of products to be included and requested several lengthy tariff phaseout periods which other countries refused to accept. The EGA's future now remains uncertain\u2014while several countries have expressed support for resuming the talks, the Trump Administration has not put forward a public position on the agreement. "], "subsections": []}]}]}, {"section_title": "Policy Issues and Future Direction", "paragraphs": ["The inability of WTO members to conclude a comprehensive agreement during the Doha Round raised new questions about the WTO's future direction. Many intractable issues from Doha remain unresolved, and members have yet to reach consensus on a way forward. Persistent differences about the extent and balance of trade liberalization continue to stymie progress, as evidenced by the outcomes of recent ministerial meetings. Further, members remain divided over adopting new issues on the agenda, amid concerns that the WTO could lose relevance if its rules are not updated to reflect the modern global economy. Some WTO members seek to incorporate new issues that pose challenges to the trading system, such as digital trade, competition with SOEs, global supply chains, and the relationship between trade and environment issues.", "These divisions have called into question the viability of the \"single undertaking,\" or one-package approach in future multilateral negotiations and suggest broader need for institutional reform if the WTO is to remain a relevant negotiating body. Moreover, the consistent practice of some countries like India to block discussion of new issues serves as a reminder of the power of a single member to halt progress in the WTO's consensus-based system.", "As a result of slow progress at the WTO, countries have increasingly turned to other venues to advance trade liberalization and rules, namely plurilateral agreements and preferential FTAs outside the WTO. Plurilaterals have been seen as having the potential to resurrect the WTO's relevance as a negotiating body, but have also been seen as possibly undermining multilateralism if the agreements are not extended to all WTO members on an MFN basis. Regional trade agreements have also been seen as potential laboratories for new rules. How these negotiations and agreements will ultimately affect the WTO's status as the preeminent global trade institution is widely debated. In addition, an open question is whether U.S. leadership within these initiatives will continue under the Trump Administration.", "More recently, concerns for some have been mounting about further strains on the multilateral system, due to the growing use of trade protectionist policies by both developed and developing countries, the recent U.S. tariff actions and counterretaliation by other countries, and the escalating trade disputes between major economies. Many countries are questioning whether the WTO is equipped to effectively handle the challenges of emerging markets, as well as the deepening trade tensions. Some experts view the system as facing a potential crisis, while o thers remain optimistic that the current state of affairs could spur renewed focus on reforms of the system. Certain WTO members, like the EU and Canada, have begun to explore some areas for reform (see below)."], "subsections": [{"section_title": "Negotiating Approaches", "paragraphs": [], "subsections": [{"section_title": "Plurilateral Agreements", "paragraphs": ["In contrast to the consensus-based agreements of the WTO, some members, including the United States, point to the progress made in sectoral or plurilateral settings as the way forward for the institution. By assembling coalitions of interested parties, negotiators may more easily and quickly achieve trade liberalizing objectives, as shown by the ITA. Sectoral agreements are viewed as one way to pursue new agreements and extend WTO disciplines and commitments in new areas, including, for example, U.S. trade priorities in digital trade and SOEs. The commitments by some WTO members to pursue talks in e-commerce, investment facilitation, and SMEs could plant the seeds for future plurilaterals.", "Plurilateral negotiations, however, still involve resolving divisions among developed and advanced developing countries. Members were able ultimately to overcome their differences in the ITA negotiation, but thus far have been unable to reach consensus in the EGA. At the same time, the participation of developing and emerging market economies, such as China and India, is critical to achieving agreements that cover a meaningful share of global trade. There is also a concern that plurilateral agreements not applied on an MFN basis could lead nonparticipating countries to become marginalized from the trading system and face new trade restrictions. To attract a critical mass of participants and lower barriers for developing countries and LDCs who may be hesitant to agree to ambitious commitments, agreements could allow flexibility in implementation timeframes and provide additional assistance, as in the TFA. ", "Some experts question whether potential waning U.S. leadership in plurilateral and multilateral trade negotiations might slow momentum toward concluding new agreements (see \" Value of the Multilateral System and U.S. Leadership and Membership \"). The Trump Administration has yet to clarify its position on plurilaterals pursued under the Obama Administration, such as EGA and TiSA, which have stalled, but is supporting new efforts on e-commerce/digital trade."], "subsections": []}, {"section_title": "Preferential Free Trade Agreements", "paragraphs": ["Given that the WTO allows its members to establish preferential FTAs outside the WTO that are consistent with WTO rules, many countries have formed bilateral or regional FTAs and customs areas; since 1990, the number of RTAs in force has increased seven-fold, with 290 trade agreements notified to the WTO and in force, as of the end of 2018. FTAs have often provided more negotiating flexibility for countries to advance new trade liberalization and rulemaking that builds on WTO agreements; however, the agreements vary widely in terms of scope and depth. Like plurilaterals, many view comprehensive FTAs as having potential for advancing the global trade agenda. Also like plurilaterals, however FTAs can also have downsides compared to multilateral deals.", "The United States currently has 14 FTAs in force with 20 countries. The Trump Administration has stated a preference for negotiating bilateral FTAs, rather than multiparty agreements. In September 2018, the United States, Mexico, and Canada completed negotiations of the proposed USMCA, which revamps the North American Free Trade Agreement (NAFTA). The United States and South Korea also agreed to some modifications of their bilateral FTA. In addition, USTR notified Congress of its intent to begin trade negotiations with the EU, Japan, and the UK. In general, U.S. FTAs are considered to be \"WTO-plus\" in that they reaffirm the WTO agreements, but also eliminate most tariff and nontariff barriers and contain rules and obligations in areas not covered by the WTO. For example, most U.S. FTAs include access to services markets beyond what is contained in the GATS or, more recently, digital trade obligations. ", "While U.S. FTAs cover some major trading partners, the majority of U.S. trade, including with significant trade partners such as China, the EU, and Japan, continues to rely solely on the terms of market access and rulemaking in WTO agreements. In 2017, the United States traded $3.4 trillion with non-FTA partners, compared to $1.8 trillion with its FTA partners ( Figure 8 ). ", "More recently, groups of countries have also been pursuing so-called \"mega-regional\" trade agreements that cover significant shares of global trade. These include the CPTPP signed in March 2018 between 11 countries in the Asia-Pacific to replace the TPP, ongoing negotiations over the Regional Comprehensive Economic Partnership (RCEP) between the Association of Southeast Asian Nations (ASEAN) and six of its FTA partners including China, and the Pacific Alliance signed in June 2012 among Chile, Colombia, Mexico, and Peru. Negotiations on the proposed Transatlantic Trade and Investment Partnership (T-TIP) between the United States and EU stalled, and though new U.S.-EU trade talks are to resume, their scope remains unclear. Such agreements could potentially consolidate trade rules across regions and to a varying extent address new issues not covered by the WTO. ", "There has been wide debate regarding the relationship of preferential FTAs to the WTO and multilateral trading system. Some argue that crafting new rules through mega-regionals could undermine the trading system, create competing regional trade blocs, lead to trade diversion, and marginalize countries not participating in the initiatives. On the other hand, some view such agreements as potentially spurring new momentum at the global level. WTO DG Azev\u00eado has supported the latter sentiment, expressing that \"RTAs [regional trade agreements] are blocks which can help build the edifice of global rules and liberalization.\" Many analysts have viewed the CPTPP specifically through this lens. Some experts view plurilateral agreements in particular as potential vehicles for bringing new rulemaking from RTAs into the multilateral trading system. While RTAs may propagate precisely what the multilateral system\u2014with MFN and national treatment at its underpinnings\u2014was designed to prevent, namely trade diversion and fragmented trading blocs, some observers believe it may be the only way trade may be liberalized in the future as additional interested parties could join the agreements over time."], "subsections": []}]}, {"section_title": "Future Negotiations on Selected Issues", "paragraphs": ["Since the founding of the WTO, the landscape of global trade has changed dramatically. The commercial internet, the growth of supply chains, and increasing trade in services have all contributed to the tremendous expansion of trade. However, WTO disciplines have not been modernized or expanded since 1995, aside from the TFA and the renegotiation of the ITA and the GPA. In addition to ongoing WTO efforts to negotiate new trade liberalization and rules in areas like e-commerce and digital trade, the following are selected areas of trade policy that could be subjects for future negotiations multilaterally within the WTO, or as plurilaterals. Meaningful progress in areas such as services, competition with SOEs, investment, and labor and environment issues could help increase the relevance of the WTO as a negotiating body."], "subsections": [{"section_title": "Services", "paragraphs": ["Since the GATS, the scope of global trade in services has increased tremendously, spurred by advances in IT and the growth of global supply chains. Yet, these advances are largely not reflected in the GATS. WTO members committed to further services negotiations (GATS Article XIX), which began in 2000 and were incorporated into the Doha Round. Further talks were spurred by the recognition among many observers that the GATS, while it extended the principles of nondiscrimination and transparency to services trade, was not thought to provide much actual liberalization, as many countries simply bound existing practices. However, services negotiations during Doha also succumbed to the resistance of developing countries to open their markets in response to developed country demands, as well as dissatisfaction with other aspects of the single undertaking. Whether the stalled plurilateral TiSA talks will ultimately lead to services reform in the WTO is an open question. ", "Aside from increased market access, several issues are ripe for future negotiations at the WTO, such as transition from the current positive list schedule of commitments to a negative list. Instead of a member declaring which services are open for competition, it would need to declare which sectors are exempted. This exercise in itself could force members to reexamine their approximately 25-year-old commitments and decide whether current market access barriers will be maintained. New services sectors, such as online education and telemedicine, that were not envisioned at the founding of GATS could also be the subject of future negotiations, at least on a plurilateral basis. The issue of \"servicification\" of traditional goods industries\u2014for example, services that are sold with a good, such as insurance or maintenance services, or enabling services, such as distribution, transportation, marketing, or retail\u2014has also attracted attention as the subject of possible WTO negotiations. Other issues of interest to members include services facilitation (transparency, streamlining administrative procedures, simplifying domestic regulations), and emergency safeguards, envisioned in the GATS (Article X) as an issue for future negotiation. "], "subsections": []}, {"section_title": "Competition with SOEs", "paragraphs": ["The United States and other members of the WTO see an increased need to discipline state-owned or state-dominated enterprises engaged in international commerce, and designated monopolies, whether through the WTO or through regional or bilateral FTAs. However, WTO rules on competition with state-owned or state-dominated enterprises are limited to state trading enterprises (STE)\u2014enterprises, such as agricultural marketing boards, that influence the import or export of a good. GATT Article XVII requires them to act consistently with GATT commitments on nondiscrimination, to operate in accordance with commercial considerations, and to abide by other GATT disciplines, such as disciplines on import and export restrictions. The transparency obligations consist of reporting requirements describing the reason and purpose of the STE, the products covered by STE, a description of its functions, and pertinent statistical information.", "Meanwhile, countries desiring disciplines on SOEs have turned to FTAs. The TPP and the proposed USMCA have dedicated chapters on SOEs. The USMCA includes commitments that SOEs of a party act in accordance with commercial considerations; requires parties to provide nondiscriminatory treatment to like goods or services to those provided by SOEs; and prohibits most noncommercial assistance to its SOE, among other issues. The SOE chapter in USMCA likely is aimed at countries other than the three USMCA parties, such as China, to signal their negotiating intentions going forward. While there could be a desire to multilateralize these disciplines, they likely would face objections from those members engaged in such practices.", "State support provided to SOEs, including subsidies, is a closely related issue, as it can play a major role in market-distorting behavior under current rules. The WTO ASCM covers the provision of specified subsidies granted to SOEs, including by the government or any \"public body.\" Some members, including the United States and EU, have contested past interpretations by the WTO Appellate Body of what qualifies as a public body as too narrow, and remain concerned that a large share of Chinese and other SOEs in effect have avoided being subject to disciplines. As discussed, the United States, EU, and Japan are engaged in ongoing discussions on strengthening rules on industrial subsidies and SOEs, including \"how to develop effective rules to address market-distorting behavior of state enterprises and confront particularly harmful subsidy practices.\" \u00a0They commit to both \"maintain effectiveness of existing WTO disciplines\" and also initiate negotiations on \"more effective subsidy rules\" in the near future. At the latest meetings in January 2019, the three partners indicated plans to finalize a proposed text on industrial subsidies by spring 2019."], "subsections": []}, {"section_title": "Investment", "paragraphs": ["With limited provisions under TRIMS and GATS, rules and disciplines covering international investment are not part of WTO. More extensive protection for investors was one of the \"Singapore issues\" proposed at the 1996 WTO Ministerial as a topic for future negotiations, but then dropped under opposition from developing countries at the 2003 Cancun Ministerial. The OECD also attempted to liberalize investment practices and provide investor protections through a Multilateral Agreement on Investment, however, that effort was abandoned in 1998 in the face of widespread campaigns by nongovernment organizations in developed countries.", "While multilateral attempts to negotiate investment disciplines have not borne fruit, countries have agreed to investment protections within bilateral investment treaties (BITs) and chapters in bilateral and regional FTAs. The U.S. \"model BIT\" serves as the basis for most recent U.S. FTAs. These provisions are often negotiated between developed countries and developing countries\u2014often viewed as having less robust legal systems\u2014that want to provide assurance that incoming FDI will be protected in the country. Developed countries themselves have begun to diverge on the use and inclusion of provisions on investor-state dispute settlement (ISDS). ", "Incorporating investment issues more fully in the WTO would recognize that trade and investment issues are increasingly interlinked. Moreover, bringing coherence to the nearly 3,000 BITs or trade agreements with investment provisions could be a role for the WTO. In addition, agreement on investment disciplines could help to resolve the thorny issue of investment adjudication between the competing models of ISDS and an investment court, as proposed by the EU in its recent FTAs, given that disputes likely would remit to WTO dispute settlement. While it remains unclear whether developing countries would be more amenable to negotiating investment disciplines multilaterally than they were in 2003, this area could be ripe for plurilateral activity. ", "In the meantime, since the Ministerial some WTO members are pursuing the development of a multilateral framework on investment facilitation. The group is comprised of a mix of developed and developing economies, including the EU, Canada, China, Japan, Mexico, Singapore, and Russia, but not the United States. "], "subsections": []}, {"section_title": "Labor and Environment", "paragraphs": ["Labor and environmental provisions were not included in the Uruguay Round agreements, largely at the insistence of developing countries. Some observers maintain that this has created major gaps in global trade rules and call for the WTO to address these issues. Related provisions have developed and evolved within U.S. FTAs outside the WTO. Recent U.S. FTAs require partner countries to adhere to internationally recognized labor principles of the International Labor Organization (ILO) and applicable multilateral environmental agreements, and to enforce their labor or environmental laws and not to derogate from these laws to attract trade and investment. The CPTPP and proposed USMCA also contain provisions, though not identical, prohibiting the most harmful fisheries subsidies, and relating to illegal trafficking, marine species, air quality, marine litter, and sustainable forestry. More broadly, while inclusion of labor and environmental provisions within FTAs has expanded in the past decade, in general the commitments can vary widely in their scope and depth, with only some subject to dispute settlement mechanisms.", "While general provisions on labor and environment may be a heavy lift at this time given these differences, the WTO has undertaken an effort to discipline fisheries subsidies, which could have a beneficial environmental effect (see above). However, fisheries subsidies may be a special case, as it directly pertains to an existing trade-related agreement, the ASCM."], "subsections": []}]}, {"section_title": "Proposed Institutional Reforms", "paragraphs": ["Many observers believe the WTO needs to adopt reforms to continue its role as the foundation of the world trading system. In particular, its negotiating function has atrophied following the collapse of the Doha Round. Its dispute settlement mechanism, while functioning, is viewed by some as cumbersome and time consuming. And some observers, including U.S. officials, contend it has exceeded its mandate when deciding cases.", "Potential changes described below address institutional and negotiation reform, as well as reforms to the dispute settlement system. Reforms concern the administration of the organization, including its procedures and practices, and attempts to address the inability of WTO members to conclude new agreements. Dispute settlement reforms attempt to improve the working of the dispute settlement system, particularly the Appellate Body (AB). Addressing concerns related to the dispute settlement system may take priority in the near term, as the WTO faces a pending crisis should the AB fall below its three-member quorum in late 2019.", "Certain WTO members have begun to explore some aspects of reform. In July 2018, the European Commission produced a discussion paper on WTO reform proposals, and in September published a revised paper on its comprehensive approach \"to modernise the WTO and to make international trade rules fit for the challenges of the global economy.\" As noted, the United States, EU, and Japan have issued scoping papers and joint statements on strengthening WTO disciplines on industrial subsidies and SOEs and cooperating on forced technology transfer. ", "In addition, Canada organized a ministerial among a small group of \"like-minded\" countries interested in WTO reform, including Australia, Brazil, Chile, the EU, Japan, Kenya, Mexico, New Zealand, Norway, Singapore, South Korea, and Switzerland, held in Ottawa on October 24-25, based on a discussion draft of its proposals. Canadian trade officials have said that \"starting small has allowed us to address problems head-on and quickly develop proposals,\" while acknowledging that a larger effort must include the United States and China. In a joint communiqu\u00e9, the group of 13 countries emphasized that \"the current situation at the WTO is no longer sustainable,\" and identified three areas requiring \"urgent consideration\": safeguarding and strengthening the dispute settlement system; reinvigorating the WTO's negotiating function; including how the development dimension can be best pursued in rulemaking; and strengthening the monitoring and transparency of WTO members' trade policies. The group met again in January 2019 on the sidelines of the annual World Economic Forum meetings, committing to make \"significant progress\" toward WTO reform before the G20 meetings convene in June 2019. Some Members of Congress have expressed support for these new efforts to address long-standing concerns of the United States."], "subsections": [{"section_title": "Institutional Issues", "paragraphs": [], "subsections": [{"section_title": "Consensus in Decisionmaking", "paragraphs": ["While consensus in decisionmaking is a long-standing core practice at the GATT/WTO, voting on a nonconsensus basis is authorized for certain activities on a one member-one vote basis. For example, interpretations of the WTO agreements and country waivers from certain provisions require a three-fourths affirmative vote for some matters, while a two-thirds affirmative vote is required for an amendment to an agreement. However, even when voting is possible, the practice of consensus decisionmaking remains the norm.", "As an organization of sovereign entities, some observers believe the practice of consensus decisionmaking gives legitimacy to WTO actions. Consensus assures that actions taken are in the self-interest of all its members. Consensus also reassures small countries that their concerns must be addressed. However, the practice of consensus has often led to deadlock, especially in the Doha Round negotiations. The ability to block consensus also has perpetuated so-called \"hostage taking,\" in which a country can block consensus over an unrelated matter.", "In order to attempt to expedite institutional decisionmaking, some expert observers have proposed alternatives to the current system, such as the following:", "Use the voting procedures currently prescribed in the WTO agreements. Adopt a weighted voting system based on a formula that includes criteria relating to a member's gross domestic product, trade flows, population, or a combination thereof. Establish an executive committee composed of a combination of permanent and rotating members, or composed based on a formula as above or representatives of differing groups of countries. Maintain current consensus voting but require a member stating an objection to explain why it is doing so, or why it is a matter of vital national interest."], "subsections": []}, {"section_title": "The Single Undertaking Approach", "paragraphs": ["The \"single undertaking\" method by which WTO members negotiate agreements means that during a negotiating round, all issues are up for negotiation until everything is agreed. On one hand, this method, in which nothing is agreed until everything is agreed, is suited for large, complex rounds in which rules and disciplines in many areas of trade (goods, services, agriculture, IPR, etc.) are discussed. It permits negotiation on a cross-sectoral basis, so countries can make a concession in one area of negotiation and receive a concession elsewhere. The method is intended to prevent smaller countries from being \"steamrolled\" by the demands of larger economies, and helps ensure that each country sees a net benefit in the resulting agreement.", "On the other hand, arguably, the single undertaking has contributed to the breakdown of the negotiating function under the WTO, exemplified by the never-completed Doha Round, as issues of importance to one country or another served to block consensus at numerous points during the round. Some members, including the EU, have called for \"flexible multilateralism,\" based on continued support for full multilateral negotiations where possible, but pursuit of plurilateral agreements on an MFN basis where multilateral consensus is not possible."], "subsections": []}, {"section_title": "Transparency/Notification", "paragraphs": ["An important task of the WTO is to monitor each member's compliance with various agreements. A WTO member is required to notify the Secretariat of certain relevant domestic laws or practices so that other members can assess the consistency of WTO members' domestic laws, regulations, and actions with WTO agreements. Required notifications include measures concerning subsidies, agricultural support, quantitative restrictions, technical barriers to trade, and sanitary and phytosanitary standards. ", "Compliance with the WTO agreement's notification requirements, especially regarding government subsidy programs, has become a serious concern among certain members, including the United States. Many WTO members are late in submitting their required notifications or do not submit them at all. This effectively prevents other members from fully examining the policies of their trading partners. ", "In response, some members\u2014notably the United States and the EU\u2014have proposed incentives for compliance or sanctions for noncompliance with notification reporting requirements. These include the following:", "A U.S. proposal to impose a series of sanctions including steps to \"name and shame\" an offending member, limiting the member from using certain WTO resources, and designating a member \"inactive.\" An EU proposal to create a rebuttable presumption that a non-notified subsidy measure is an actionable subsidy or a subsidy causing serious prejudice, thereby allowing a member to challenge the subsidy under WTO dispute settlement. An EU proposal to encourage counternotifications\u2014a challenge to the accuracy or existence of another member's notification\u2014against members that do not voluntarily notify on their own. In May and November 2018, for example, the United States launched counternotifications of India's farm subsidy notifications regarding wheat, rice, and cotton.", "In November 2018, the United States, EU, Japan, Argentina, and Costa Rica put forward a joint proposal that reflects several of these elements, including penalties for noncompliance. It also specifies exemptions for developing countries that lack capacity and have requested assistance to help fulfill notification obligations."], "subsections": []}, {"section_title": "Treatment of Developing Countries", "paragraphs": ["A country's development status can affect the pace at which a country undertakes its WTO obligations. Given that WTO members self-designate their status, some members hold on to developing-country status even after their economies begin more to resemble their developed-country peers. In addition, some of the world's largest economies, including China, India, and Brazil, may justify developing country status because their per capita incomes more closely resemble those of a developing country than those of developed countries. Developing country status enables a country to claim special and differential treatment (SDT) both in the context of existing obligations and in negotiations for new disciplines (see text box ). The WTO specifies, however, that while the designated status is on the basis of self-selection, it is \"not necessarily automatically accepted in all WTO bodies.\"", "Developed countries, including the EU and United States, have expressed frustration at this state of affairs. In January 2019, the United States circulated a paper warning that the WTO is at risk of becoming irrelevant due to the practice of allowing members to self-designate their development status to obtain special and differential treatment. The paper noted that some of the world's richest nations, including Singapore, South Korea, and the United Arab Emirates, as well as some of the world's major trading economies, such as China and India, consider themselves developing countries at the WTO. The paper maintained that self-designation has damaged the negotiating function of the WTO, and contributed to the failure of the Doha Round and possibly ongoing negotiations, if countries can avoid making meaningful offers by claiming exemptions from the rules.", "Several suggestions have been made to address the situation, including encouraging countries to graduate from developing country status; setting quantifiable criteria for development status; targeting SDT in future agreements on a needs-driven, differential basis; and requiring full eventual implementation of all new agreements. Some of these steps were implemented in the WTO Trade Facilitation Agreement. "], "subsections": []}]}, {"section_title": "Dispute Settlement", "paragraphs": ["Supporters of the multilateral trading system consider the dispute settlement mechanism (DSM) not only a success of the system, but essential to maintain the relevance of the institution, especially while the WTO has struggled as a negotiating body. However, the DSM is facing increased pressure for reform, in part due to long-standing U.S. objections over certain rules and procedures. USTR Lighthizer contends that the WTO has become a \"litigation-centered organization,\" which has lost its focus on negotiations. While WTO members have actively used the DSM since its creation, some have also voiced concerns about various aspects, including procedural delays and compliance, and believe the current system could be reformed to be fairer and more efficient. ", "The Doha Round included negotiations to reform the dispute settlement system through \"improvements and clarifications\" to DSU rules. A framework of 50 proposals was circulated in 2003 but countries were unable to reach consensus. Discussions have continued beyond Doha with a primary focus on 12 issues, including third-party rights, panel composition, and remand authority of the Appellate Body. Under prior Administrations, the United States proposed greater control for WTO members over the process, guidelines for the adjudicative bodies, and greater transparency, such as public access to proceedings. However, these negotiations have yet to achieve results. Some experts suggest that enhancing the capabilities and legitimacy of the dispute settlement system will likely require several changes, including improving mechanisms for oversight, narrowing the scope of and diverting sensitive issues from adjudication, improving institutional support, and providing WTO members more input over certain procedures."], "subsections": [{"section_title": "Appellate Body (AB) Vacancies", "paragraphs": ["The immediate flashpoint to the system is the refusal of the United States to consent to the appointment of new AB jurists. The United States has long-standing objections to decisions involving the AB's interpretation of certain U.S. trade remedy laws in particular\u2014the subject of the majority of complaints brought by other WTO members against the United States. The AB consists of seven jurists appointed to four-year terms on a rolling basis, with the possibility of a one-term reappointment. Each dispute case is heard by three jurists. Like the previous Administration, the Trump Administration blocked the process to appoint new jurists in 2017 and 2018, leaving only three AB jurists remaining to hear all cases. Concerns are rising that the AB, already facing a backlog of cases, could come to a halt in 2019 if additional appointments are not made. Deputy DG of the WTO Alan Wolff summarized the stakes in recent remarks, noting that if the Appellate Body were to cease to function, member countries would be unable to appeal an adverse panel decision against one of their policies, and without that option, \"there is a risk of every trade dispute devolving into small and not so small trade wars, consisting of retaliation and counter-retaliation.\""], "subsections": []}, {"section_title": "Proposed DS Reforms", "paragraphs": ["The United States expounded on some of the perceived shortcomings of the dispute settlement system in its most recent trade policy agenda. Arguably the main U.S. complaint is that the system, particularly the AB, is \"adding to or diminishing U.S. rights by not applying the WTO agreements as written\" in the areas of subsidies, antidumping and countervailing duties, standards, and safeguards. At its crux, the current controversy is over the autonomy of the AB, its deference to the DSB, and its obligations to implement the provisions of the DSU. The United States has been the most vocal in its criticisms, yet other WTO members have expressed similar concerns. While the United States has not tabled specific reforms for these complaints to the WTO membership, other members have. Two groups (G-12, G-3) submitted specific proposals for the December 2018 General Council meeting to attempt to break the impasse. The G-12 submission reflects proposals of all 12 members; the G-3 submission contains supplementary proposals put forward by a subset of the 12. ", "The United States criticized the proposals as seeking to change WTO DS rules to fit the practices objectionable to the United States, rather than adhering to the rules as originally negotiated. Instead of seeking to accommodate current practices, U.S. Ambassador to the WTO Dennis Shea proposed that WTO members \"engage in a deeper discussion of the concerns raised, to consider why the Appellate Body has felt free to depart from what WTO Members agreed to, and to discuss how best to ensure that the system adheres to WTO rules as written.\" Ambassador Shea also criticized the G-3 proposals as lessening the accountability of the Appellate Body, rather than increasing it.", "Under each of the following issues, these proposals are raised along with other reform proposals that members or observers have put forward to address current concerns.", "Disregard for the 90-day, DSU-mandated deadline for AB appeals. USTR claims that the AB does not have the authority to fail to meet the deadline without consulting the DSB, maintaining that the deadline \"helps ensure that the AB focuses its report on the issue on appeal.\" The G-12 submission proposes to amend the DSU to allow parties, based on a proposal by the AB, to extend the length of time to conclude an appeal. If the parties do not agree on an extension, the AB would propose work procedures or arrangements to allow it to conclude the appeal within 90 days. In addition, the G-3 submission proposes to amend the DSU to increase the number of AB jurists from seven to nine to allow for greater efficiency and geographical diversity. Extension of service by former AB jurists on cases continuing after their four-year terms have expired. The United States maintains that the AB does not have the authority unilaterally to extend the terms of jurists, rather that authority lies with the DSB and that it is a matter of adherence to the DSU. In actual practice, however, it may be the case that having former jurists stay on to finish an appeal may be more efficient than having a new jurist join the case. The G-12 submission proposes to amend the DSU to allow outgoing AB jurists to complete the disposition of a pending appeal, provided that the hearing stage has taken place. In addition, the G-3 submission proposes that outgoing AB members continue to serve until replaced, but not more than two years following expiration of their term. Alternatively, some trade experts have suggested that the AB could refrain from assigning cases to jurists less than 90 days before their exits.", "During the Obama Administration, the United States blocked the reappointment of a South Korean jurist to the AB in May 2016. The United States cited what it considered \"abstract discussions\" in prior decisions by the jurist that went beyond the legal scope of the WTO. This action has led to the concern that the prospect of non-reappointment could affect the independence of the AB system. However, one former AB jurist opines that, \"reappointment is an option, not a right,\" and calls for the WTO members to determine if a more formal process similar to initial appointment of AB jurists is needed for reappointment. The G-3 submission proposes to amend the DSU to permit AB members to serve one term of longer length (6-8 years) and not allow for reappointment.", "Other criticisms of the AB involve the extent to which it can interpret WTO agreements. The United States, in arguing for a more restrictive view of the power of the DSB, points to Article 3.2 that \"recommendations and rulings of the DSB cannot add to or diminish the rights and obligations provided in the covered agreements\" (see text box above). However, those supporting a more expansive view of the DSU's role can point to the same article, which highlights the role \"to clarify the existing provisions of those agreements in accordance with customary rules of interpretation of public international law.\" The scope and reach of the AB's activities is an enduring controversy for the organization, not limited to the Trump Administration. USTR has flagged several specific practices relating to these issues, such as the following: ", "Issuing advisory opinions on issues not relevant to the issue on appeal. This point is related to the U.S. concern that the AB is engaged in \"judicial overreach\" by going beyond deciding the case at hand. USTR contends that the ability to issue advisory opinions or interpretations of text rests with the Ministerial Conference or General Council. The G-12 proposes to amend the DSU to stipulate that the AB address each issue raised in a dispute \"to the extent necessary for the resolution of the dispute.\" Rather than issue advisory opinions, some observers have suggested that the AB also could \"remand\" issues of uncertainty to the standing committees of the WTO for further negotiation. In addition, members could also use a provision of the WTO Agreement (Article IX.2) to seek an \"authoritative interpretation\" of a WTO text at the General Council or Ministerial Conference, which could be adopted by a three-fourths vote. De novo review of facts or domestic law in cases on appeal. The United States alleges that the AB is not giving the initial panel due deference on matters of fact, including regarding the panel's interpretation of domestic law. This point derives from USTR's view that a country's domestic law should be considered as fact, and that the panel's interpretation of the domestic law is thus not reviewable by the AB. The G-12 submission proposes to amend the DSU to clarify that the meaning of a party's domestic laws is a matter of fact, and not reviewable by the AB. Treatment of AB decisions as precedent. Like the previous two concerns, this complaint speaks to the alleged overreach of the AB. USTR asserts that while AB reports can provide \"valuable clarification\" of covered agreements, they cannot be considered or substituted for the WTO agreements and obligations negotiated by members. However, according to a former DG of the WTO, \"the precedent concept used in the WTO jurisprudence is ... centrally important to the effectiveness of the WTO dispute settlement procedure goals of security and predictability.\" A related concern some WTO members have is \"gap-filling\" by the DS system, where the legal precedent is unclear or ambiguous or there are no or incomplete WTO rules regarding a contested issue. Here there are diametrically opposite beliefs: a U.S. trade practitioner asks, \"Is filling gaps and construing silences really not the creation of rights and obligations through disputes vs. leaving such function to negotiations by the members?\" The former DG, however, contends that \"every juridical institution has at least some measure of gap-filling responsibility as part of its efforts to resolve ambiguity.\" The issue of the legitimacy of precedence or gap-filling may be one of the thorniest issues of all with few solutions proposed that would potentially satisfy differences among members. The G-12 submission proposes to amend the DSU to establish a yearly meeting between the AB and the DSB. This session would allow for WTO members to comment on rulings made during the year. According to the submission, it could be a venue \"where concerns with regard to some Appellate Body approaches, systemic issues or trends in the jurisprudence could be voiced.\" ", "It is likely that many of the issues that could arise from proposed reforms to the WTO system would require clarification of or amendment to the language of the Marrakesh Agreement or the DSU. Clarification could take the form of interpretation of the agreements. As noted above, interpretation can be undertaken by the Ministerial Conference (held every two years), General Council, or Dispute Settlement Body, with a three-fourths vote of the WTO membership. Amending the decisionmaking provisions of the Marrakesh Agreement (Article IX) or the DSU would require consensus of the membership at the Ministerial Conference (Marrakesh Agreement, Article X.8). Amendments to the Marrakesh Agreement would require a two-thirds vote of the membership. As noted above, negotiations related to reforms of the DSM occurred during the Doha Round, and despite the criticism of the DSM by the United States and others, the General Council or the DSB has not undertaken serious consideration of these reforms."], "subsections": []}]}]}, {"section_title": "Selected Challenges and Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "Value of the Multilateral System and U.S. Leadership and Membership", "paragraphs": ["The United States has served as a leader in the WTO and the GATT since their creation. The United States played a major role in shaping GATT/WTO negotiations and rulemaking, many of which reflect U.S. laws and norms. It was a leading advocate in the Uruguay Round for expanding negotiations to include services and IPR, key sources of U.S. competitiveness, as well as binding dispute settlement to ensure new rules were enforceable. Today, many stakeholders across the United States rely on WTO rules to open markets for importing and exporting goods and services, and to defend and advance U.S. economic interests. ", "The Trump Administration has expressed doubt over the value of the\u00a0WTO and multilateral trade negotiations to the U.S. economy.\u00a0As a candidate, President Trump\u00a0asserted\u00a0that WTO trade deals are a \"disaster\" and that the United States should \"renegotiate\" or \"pull out.\" \u00a0In late June 2018,\u00a0media reports\u00a0suggested that President Trump was considering withdrawing the United States from the WTO. While U.S. officials have downplayed talks of withdrawal as \"premature\" and an \"exaggeration,\" the President has since reportedly repeated these threats in July and August 2018. The Administration has continued to\u00a0express skepticism\u00a0toward the value of multilateral agreements, preferring bilateral negotiations to address \"unfair trading practices.\" In addition, \"reform of the multilateral trading system\" is a stated\u00a0Administration trade policy objective. While some U.S. frustrations with the WTO are not new and are shared by other trading partners, the Administration's overall approach has spurred new questions regarding the future of U.S. leadership of and participation in the WTO.", "Most observers would maintain that the possibility of U.S. withdrawal from the WTO remains unlikely for procedural and substantive reasons. Procedurally, a withdrawal resolution would have to pass the House and Senate; it has also been debated what legal effect the resolution would have if adopted. Moreover, if the United States were to consider such a step, withdrawal would have a number of practical consequences. The United States could face economic costs, since absent WTO membership, remaining members would no longer be obligated to grant the United States MFN status under WTO agreements. WTO rules also restrict members' ability to use quotas, regulations, trade-related investment measures, or subsidies in ways that discriminate or disadvantage U.S. goods and services. They also require members to respect U.S. IPR. Consequently, U.S. businesses could face significant disadvantages in other markets, as members without FTAs with the United States could raise tariffs or other trade barriers at will. Nondiscrimination, a key bedrock principle of the multilateral trading system, could be eroded, particularly given the added impetus U.S. withdrawal could give to the proliferation of FTAs.", "Withdrawal could also lead to a U.S. loss of influence over how important international trade matters are decided and who writes global trade rules. In the process, economic inefficiencies and political tensions could increase. Exiting the WTO and the international trading relationships it creates and governs could have broader policy implications, including for cooperation between the United States and allies on foreign policy issues. ", "Another question is whether the WTO would flounder without U.S. leadership, or whether other WTO members like the\u00a0EU\u00a0and\u00a0China\u00a0would increase their roles. As some in the United States question the value of WTO participation and leadership, other countries have begun to assert themselves as leaders and advocates for the global trading system. As noted, cooperation on WTO reform has become elevated as a major topic of discussion at recent high-level meetings, including the latest EU-China Summit held in July 2018 and at the October summit held in Canada among trade ministers from 13 WTO members.", "Congressional oversight could examine the value, both economic and political, of U.S. membership and leadership in the WTO. As part of its oversight, Congress could consider, or could ask the U.S. International Trade Commission to investigate, the value of the WTO or potential impact of withdrawal from the WTO on U.S. businesses, consumers, federal agencies, laws and regulations, and foreign policy. Congress could vote on a resolution expressing support of the WTO, instructing USTR to prioritize WTO engagement, or, conversely, a resolution for disapproval of U.S. membership under the URAA in 2020."], "subsections": []}, {"section_title": "Respect for the Rule and Credibility of the WTO", "paragraphs": ["The founding of the GATT and creation of the WTO were premised on the notion that an open and rules-based multilateral trading system was necessary to avoid a return to the nationalistic interwar trade policies of the 1930s. There are real costs and benefits to the United States and other countries to uphold the rules and enforce their commitments and those of other WTO members. A liberalized, rules-based global trading system increases international competition for companies domestically, but also helps to ensure that companies and their workers have access and opportunity to compete in foreign markets with the certainty of a stable, rules-based system. A framework for resolving disputes that inevitably arise from repeated commercial interactions may also help ensure such trade frictions do not spill over into broader international relations.", "However, certain actions by the Trump Administration and other countries have raised questions about respect for the rules-based trading system, and could weaken the credibility of the WTO. In particular,\u00a0recent U.S. actions\u00a0to raise tariffs\u00a0against major trading partners\u00a0under Section 232 and Section 301, and to potentially\u00a0obstruct the functioning\u00a0of the dispute settlement system by withholding approval for appointments to the AB, have\u00a0prompted concerns\u00a0that the United States and other countries who have retaliated to the U.S. actions may undermine the effectiveness and credibility of the institution that it helped to create. Moreover, the outcomes of controversial ongoing dispute cases at the WTO, initiated by several countries over U.S. tariffs, could set precedents and have serious implications for the future credibility of the global trading system. In particular, several U.S. trading partners view U.S. action as blatant protection of domestic industry and not a legitimate use of the national security exception. Some are concerned that U.S. actions may embolden other countries to protect their own industries under claims of protecting their own national security interests. Furthermore, U.S. tariff actions outside of the multilateral system's dispute settlement process may open the United States to criticism and could impede U.S. efforts to use the WTO for its own enforcement purposes. ", "Respect for the rules is also weakened when any country imposes new trade restrictions and takes actions that are not in line with WTO agreements. In particular, China's industrial state policies, including IPR violations and forced technology transfer practices, arguably damage the credibility of the multilateral trading system that is based on respect for the consensus-based rules. In part, the WTO's perceived inability to address certain Chinese policies led to the United States resorting to Section 301 actions. Other countries' pursuit of industrial policy or imposition of discriminatory measures broadly in the name of national or economic security further call into question the viability of the WTO rules-based system. "], "subsections": []}, {"section_title": "U.S. Sovereignty and the WTO", "paragraphs": ["Under the Trump Administration, USTR has put new emphasis on \"preserving national sovereignty\" within the U.S. trade policy agenda, emphasizing that any multinational system to resolve trade disputes \"must not force Americans to live under new obligations to which the United States and its elected officials never agreed.\" ", "The question of sovereignty is not a new one. The withdrawal procedures in the URAA responded to concerns that the WTO would infringe on U.S. sovereignty. During the congressional debate over the Uruguay Round agreements, there were some proposals to create extra review mechanisms of WTO dispute settlement, and many Members stressed that only Congress can change U.S. laws as a result of dispute findings. ", "While U.S. concerns regarding alleged \"judicial overreach\" in WTO dispute findings are long-standing, the Trump Administration has also emphasized unilateral action outside the WTO as a means of defending U.S. interests, including national security. Some observers fear that disagreements at the WTO on issues related to national security (e.g., Section 232 tariffs) may be difficult to resolve through the existing dispute settlement procedures, given current disagreements related to the WTO AB and concerns over national sovereignty that would likely be raised if a dispute settlement panel issued a ruling relating to national security. As noted previously, Article XXI of the GATT allows WTO members to take measures to protect \"essential security interests.\" WTO members and parties to the GATT have invoked Article XXI in other trade disputes. These parties, including the United States, have often argued that each country is the sole judge of questions relating to its own security interests. However, neither the WTO members nor a WTO panel have formally interpreted the Article XXI exception to define its scope. Accordingly, there is little guidance as to (1) whether a WTO panel would decide, as a threshold matter, that it had the authority to evaluate whether U.S. invocation of the exception was proper; and (2) how a panel might apply the national security exception, if invoked, in any dispute before the WTO involving the steel and aluminum tariffs."], "subsections": []}, {"section_title": "Role of Emerging Markets", "paragraphs": ["The broadened membership of the WTO over the past two decades has promoted greater integration of emerging markets such as Brazil, Russia, India, and China in the global economy, and helped ensure that developing country interests are represented on the global trade agenda. At the same time, many observers have attributed the inability of WTO members to collectively reach compromise over new rules and trade liberalization to differing priorities for reforms and market opening among developed countries and emerging markets. ", "One question is to what extent emerging countries like China, with significant economic clout, will take on greater leadership; will such countries play a constructive role, advance the global trade agenda, and facilitate compromise among competing interests? China has voiced support for globalization and the multilateral trading system under which it has thrived. The Chinese government's recent white paper on the WTO stated the following: \"The multilateral trading system, with the WTO at its core, is the cornerstone of international trade and underpins the sound and orderly development of global trade. China firmly observes and upholds the WTO rules, and supports the multilateral trading system that is open, transparent, inclusive and nondiscriminatory.\" At the same time, China has blocked further progress in certain initiatives, including the WTO plurilateral Environmental Goods Agreement, and has not put forward a sufficiently robust offer on government procurement to join that WTO agreement, a long-standing promise. With its industrial policies that advantage domestic industries, some analysts contend that China often abides by the letter but not the \"spirit\" of WTO rules, raising questions about the country's willingness in practice to take on more leadership responsibility in the WTO context.", "Another related concern voiced by the United States and other WTO members is the role of large emerging markets and the use of developing country status by those and other countries to ensure flexibility in implementing future liberalization commitments. The United States could work with other WTO members to set specific criteria to clarify the \"developing\" country qualification, such as using a combination of metrics including GDP, per capita income, and trade volume. Members could be given incentives to graduate from developing status; different WTO agreements could offer different incentives."], "subsections": []}, {"section_title": "Priorities for WTO Reforms and Future Negotiations", "paragraphs": ["The Administration included \"reform of the multilateral trading system\" in its 2018 trade policy objectives. Congress may also hold oversight hearings to ask the USTR about specific plans or objectives regarding WTO reforms for the institution, dispute settlement, or in regards to updating or amending existing agreements to address trade barriers and market-distorting behaviors not sufficiently covered by current rules. Congress could also consider directing the executive branch to increase U.S. engagement in reform negotiations, by, for example, endorsing the current trilateral negotiations announced by USTR, the EU, and Japan to address nonmarket practices, mostly aimed at China. Congress may also want to review the recent report by economists from the WTO, the IMF, and the World Bank that identifies potential areas for greater trade integration, and determine which are in the U.S. national economic interest. Congress could further consider establishing specific or enhanced new negotiating objectives for multilateral trade agreement negotiations, possibly through amendment to TPA. Congress may request that USTR provide an update of ongoing plurilateral negotiations to address new issues, including digital trade\u2014specified by Congress as a principal trade negotiating objective of TPA.", "Some experts argue however, that recent U.S. unilateral tariff actions may limit other countries' interest in engaging in future WTO or other negotiations to reduce international trade barriers and craft new rules. Such concerns are amplified given the proliferation of preferential FTAs outside the context of the WTO, which have the potential for discriminatory effects on countries not participating, including the United States. Congress may consider the long-term implications of the U.S. actions on current and future trade negotiations."], "subsections": []}]}, {"section_title": "Outlook", "paragraphs": ["The future outlook of the multilateral trading system is the subject of growing debate, as it faces serious challenges, some long-standing and some emerging more recently. Some experts view the system as long stagnant and facing a potential crisis; others remain optimistic that the current state of affairs could spur new momentum toward reforms and alternative negotiating approaches moving forward. Despite differing views, there is a growing consensus that the status quo is no longer sustainable, and that there is urgent need to improve the system and find ground for new compromises if the WTO is to remain the cornerstone of the trading system. ", "Debate about the path forward continues. Recent proposals for WTO reforms and for new rules have provided the seeds for new ideas, though concrete solutions and next steps have yet to be agreed among countries involved in discussions. In the near term, several events on the horizon could provide added impetus for resolving differences and assessing progress. The dispute settlement system could cease to function by late 2019 if the terms of the three remaining AB members continue to expire without the approval of new appointments. WTO members will also face their biennial Ministerial Conference in June 2020, which could provide an opportunity for countries to announce completion of ongoing negotiations, such as on fisheries subsidies, and concrete progress in other areas of long-standing priority, including the plurilateral efforts launched during the 2017 Ministerial. Meanwhile, other ambitious trade initiatives outside the WTO are proceeding, including the CPTPP, which entered into force in December 2018 for several members and which many analysts view as providing a possible template for future trade liberalization and rulemaking in several areas. "], "subsections": []}]}]}}
{"id": "R44841", "title": "Venezuela: Background and U.S. Relations", "released_date": "2019-01-21T00:00:00", "summary": ["Venezuela remains in a deep political crisis under the authoritarian rule of President Nicol\u00e1s Maduro of the United Socialist Party of Venezuela (PSUV). Maduro, narrowly elected in 2013 after the death of Hugo Ch\u00e1vez (1999-2013), is unpopular. Nevertheless, he has used the courts, security forces, and electoral council to repress the opposition.", "On January 10, 2019, Maduro began a second term after winning reelection on May 20, 2018, in an unfair contest deemed illegitimate by the opposition-controlled National Assembly and most of the international community. The United States, the European Union, the Group of Seven, and most Western Hemisphere countries do not recognize the legitimacy of his mandate. They view the National Assembly as Venezuela's only democratic institution.", "Maduro's inauguration capped his efforts to consolidate power. In 2017, protesters called for Maduro to release political prisoners and respect the opposition-led National Assembly. Security forces quashed protests, with more than 130 killed and thousands injured. Maduro then orchestrated the controversial July 2017 election of a National Constituent Assembly; this assembly has usurped most legislative functions. During 2018, Maduro's government arrested dissident military officers and others suspected of plotting against him. Efforts to silence dissent may increase, as the National Assembly (under its new president, Juan Guaid\u00f3), the United States, and the international community push for a transition to a new government.", "Venezuela also is experiencing a serious economic crisis, and rapid contraction of the economy, hyperinflation, and severe shortages of food and medicine have created a humanitarian crisis. President Maduro has blamed U.S. sanctions for these problems, while conditioning receipt of food assistance on support for his government and increasing military control over the economy. He maintains that Venezuela will seek to restructure its debts, although that appears unlikely. The government and state oil company Petr\u00f3leos de Venezuela, S. A. (PdVSA) defaulted on bond payments in 2017. Lawsuits over nonpayment and seizures of PdVSA assets are likely.", "U.S. Policy", "The United States historically had close relations with Venezuela, a major U.S. oil supplier, but relations have deteriorated under the Ch\u00e1vez and Maduro governments. U.S. policymakers have expressed concerns about the deterioration of human rights and democracy in Venezuela and the country's lack of cooperation on counternarcotics and counterterrorism efforts. U.S. democracy and human rights funding, totaling $15 million in FY2018 (P.L. 115-141), has aimed to support civil society.", "The Trump Administration has employed targeted sanctions against Venezuelan officials responsible for human rights violations, undermining democracy, and corruption, as well as on individuals and entities engaged in drug trafficking. Since 2017, the Administration has imposed a series of broader sanctions restricting Venezuelan government access to U.S. financial markets and prohibiting transactions involving the Venezuelan government's issuance of digital currency and Venezuelan debt. The Administration provided almost $97 million in humanitarian assistance to neighboring countries sheltering more than 3 million Venezuelans.", "Congressional Action", "The 115th Congress took several actions in response to the situation in Venezuela. In February 2017, the Senate agreed to S.Res. 35 (Cardin), which supported targeted sanctions. In December 2017, the House passed H.R. 2658 (Engel), which would have authorized humanitarian assistance for Venezuela, and H.Res. 259 (DeSantis), which urged the Venezuelan government to accept humanitarian aid. For FY2019, the Administration requested $9 million in democracy and human rights funds for Venezuela. The 115th Congress did not complete action on the FY2019 foreign assistance appropriations measure. The House version of the FY2019 foreign aid appropriations bill, H.R. 6385, would have provided $15 million for programs in Venezuela; the Senate version, S. 3108, would have provided $20 million.", "The 116th Congress likely will fund foreign assistance to Venezuela and neighboring countries sheltering Venezuelans. Congress may consider additional steps to influence the Venezuelan government's behavior in promoting a return to democracy and to relieve the humanitarian crisis.", "Also see CRS In Focus IF10230, Venezuela: Political and Economic Crisis and U.S. Policy; CRS In Focus IF10715, Venezuela: Overview of U.S. Sanctions; and CRS In Focus IF11029, The Venezuela Regional Migration Crisis."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Recent Developments", "paragraphs": ["On January 21, 2019, Venezuela's government-aligned Supreme Court issued a ruling declaring the National Assembly illegitimate and its rulings unconstitutional. (See \" Lead-Up to Maduro's January 2019 Inauguration and Aftermath ,\" below.)", "On January 21, 2019, Venezuelan military authorities announced the arrest of 27 members of the National Guard who allegedly stole weapons (since recovered) as they tried to incite an uprising against the government. (See \" Lead-Up to Maduro's January 2019 Inauguration and Aftermath ,\" below.)", "On January 15, 2019, Venezuela's National Assembly declared that President Maduro had usurped the presidency. The legislature also established a framework for the formation of a transitional government led by Juan Guaid\u00f3 of the Popular Will (VP) party, the president of the National Assembly who was elected on January 5, 2019, to serve until presidential elections can be held (per Article 233 of the constitution). In addition, the legislature approved amnesty from prosecution for public officials who facilitate the transition. (See \" Lead-Up to Maduro's January 2019 Inauguration and Aftermath ,\" below.)", "On January 13, 2019, Venezuela's intelligence service detained, and then released, Juan Guaid\u00f3. Two days prior, Guaid\u00f3 had said he would be willing to assume the presidency on an interim basis until new elections could be held; he also called for national protests to occur on January 23, 2019. (See \" Lead-Up to Maduro's January 2019 Inauguration and Aftermath ,\" below.)", "On January 10, 2019, the U.S. Department of State issued a statement condemning Maduro's \"illegitimate usurpation of power\" and vowing to \"work with the National Assembly ... in accordance with your constitution on a peaceful return to democracy.\" (See \" U.S. Policy ,\" below.)", "On January 10, 2019, the Organization of American States (OAS) passed a resolution rejecting the legitimacy of Nicolas Maduro's new term. (See Appendix B , below.)", "On January 10, 2019, President Nicolas Maduro began a second term after a May 2018 election that has been deemed illegitimate by the democratically elected, opposition-controlled National Assembly and much of the international community. (See \" Foreign Relations ,\" below.)", "On January 8, 2019, the U.S. Department of the Treasury imposed sanctions on seven individuals and 23 companies involved in a scheme that stole $2.4 billion through manipulation of Venezuela's currency exchange system under authority provided in Executive Order (E.O.) 13850 . (See \" Targeted Sanctions Related to Antidemocratic Actions, Human Rights Violations, and Corruption ,\" below.)", "On December 17, 2018, a group of investors demanded the Venezuelan government pay off the interest and principal of a defaulted $1.5 billion bond, the first step in a potential legal process by creditors to recover their assets. (See \" Prospects for 2019 ,\" below.) ", "On December 14, 2018, El Nacional , Venezuela's last independent newspaper with national circulation, stopped publishing its print edition after 75 years. The move ame after numerous advertising restrictions, lawsuits, and threats from the Venezuelan government. (See \" Human Rights,\" below.)", "On December 14, 2018, the United Nations launched an appeal for $738 million to support refugees and migrants from Venezuela in 2019. (See \" Humanitarian Situation ,\" below.)"], "subsections": []}, {"section_title": "Introduction", "paragraphs": ["Venezuela, long one of the most prosperous countries in South America with the world's largest proven oil reserves, continues to be in the throes of a deep political, economic, and humanitarian crisis. Whereas populist President Hugo Ch\u00e1vez (1998-2013) governed during a period of generally high oil prices, his successor, Nicol\u00e1s Maduro of the United Socialist Party of Venezuela (PSUV), has exacerbated an economic downturn caused by low global oil prices through mismanagement and corruption. According to Freedom House, Venezuela has fallen from \"partly free\" under Ch\u00e1vez to \"not free\" under Maduro, an unpopular leader who has violently quashed dissent and illegally replaced the legislature with a National Constituent Assembly (ANC) elected under controversial circumstances in July 2017. President Maduro won reelection in early elections held in May 2018 that were dismissed as illegitimate by the United States, the European Union (EU), the G-7, and a majority of countries in the Western Hemisphere.", "U.S. relations with Venezuela, a major oil supplier, deteriorated during Ch\u00e1vez's rule, which undermined human rights, the separation of powers, and freedom of expression. U.S. and regional concerns have deepened as the Maduro government has manipulated democratic institutions; cracked down on the opposition, media, and civil society; engaged in drug trafficking and corruption; and refused most humanitarian aid. Efforts to hasten a return to democracy in Venezuela have failed thus far. President Maduro's convening of the ANC and early presidential elections have triggered international criticism and led to sanctions by Canada, the EU, Panama, Switzerland, the United States, and potentially others.", "This report provides an overview of the overlapping political, economic, and humanitarian crises in Venezuela, followed by an overview of U.S. policy toward Venezuela."], "subsections": []}, {"section_title": "Political Situation", "paragraphs": [], "subsections": [{"section_title": "Legacy of Hugo Ch\u00e1vez (1999-2013)2", "paragraphs": ["In December 1998, Hugo Ch\u00e1vez, a leftist populist representing a coalition of small parties, received 56% of the presidential vote (16% more than his closest rival). Ch\u00e1vez's commanding victory illustrated Venezuelans' rejection of the country's two traditional parties, Democratic Action (AD) and the Social Christian party (COPEI), which had dominated Venezuelan politics for the previous 40 years. Most observers attribute Ch\u00e1vez's rise to power to popular disillusionment with politicians whom they then judged to have squandered the country's oil wealth through poor management and corruption. Chavez's campaign promised constitutional reform; he asserted that the system in place allowed a small elite class to dominate Congress and waste revenues from the state oil company, Petr\u00f3leos de Venezuela , S. A. (PdVSA).", "Venezuela had one of the most stable political systems in Latin America from 1958 until 1989. After that period, however, numerous economic and political challenges plagued the country. In 1989, then-President Carlos Andres P\u00e9rez (AD) initiated an austerity program that fueled riots in which several hundred people were killed. In 1992, two attempted military coups threatened the P\u00e9rez presidency, one led by Ch\u00e1vez, who at the time was a lieutenant colonel railing against corruption and poverty. Ch\u00e1vez served two years in prison for that failed coup attempt. In May 1993, the legislature dismissed P\u00e9rez from office for misusing public funds. The election of former President Rafael Caldera (1969-1974) as president in December 1993 brought a measure of political stability, but the government faced a severe banking crisis. A rapid decline in the price of oil caused a recession beginning in 1998, which contributed to Ch\u00e1vez's landslide election. ", "Under Ch\u00e1vez, Venezuela adopted a new constitution (ratified by a plebiscite in 1999), a new unicameral legislature, and even a new name for the country\u2014the Bolivarian Republic of Venezuela, named after the 19 th century South American liberator Sim\u00f3n Bol\u00edvar. Buoyed by windfall profits from increases in the price of oil, the Ch\u00e1vez government expanded the state's role in the economy by asserting majority state control over foreign investments in the oil sector and nationalizing numerous private enterprises. Ch\u00e1vez's charisma, use of oil revenue to fund domestic social programs and provide subsidized oil to Cuba and other Central American and Caribbean countries, and willingness to oppose the United States captured global attention. ", "After Ch\u00e1vez's death, his legacy has been debated. President Ch\u00e1vez established an array of social programs and services known as missions that helped reduce poverty by some 20% and improve literacy and access to health care. Some maintain that Ch\u00e1vez also empowered the poor by involving them in community councils and workers' cooperatives. Nevertheless, his presidency was \"characterized by a dramatic concentration of power and open disregard for basic human rights guarantees,\" especially after his brief ouster from power in 2002. Declining oil production, combined with massive debt and high inflation, have shown the costs involved in Ch\u00e1vez's failure to save or invest past oil profits, tendency to take on debt and print money, and decision to fire thousands of PdVSA technocrats after an oil workers' strike in 2002-2003. ", "Venezuela's 1999 constitution, amended in 2009, centralized power in the presidency and established five branches of government rather than the traditional three branches. Those branches include the presidency, a unicameral National Assembly, a Supreme Court, a National Electoral Council (CNE), and a \"Citizen Power\" branch (three entities that ensure that government officials at all levels adhere to the rule of law and that can investigate administrative corruption). The president is elected for six-year terms and can be reelected indefinitely; however, he or she also may be made subject to a recall referendum (a process that Ch\u00e1vez submitted to in 2004 and survived but Maduro cancelled in 2016). Throughout his presidency, Ch\u00e1vez exerted influence over all the government branches, particularly after an outgoing legislature dominated by chavistas appointed pro-Ch\u00e1vez justices to dominate the Supreme Court in 2004 (a move that Maduro's allies would repeat in 2015). ", "In addition to voters having the power to remove a president through a recall referendum process, the National Assembly has the constitutional authority to act as a check on presidential power, even when the courts fail to do so. The National Assembly consists of a unicameral Chamber of Deputies with 167 seats whose members serve for five years and may be reelected once. With a simple majority, the legislature can approve or reject the budget and the issuing of debt, remove ministers and the vice president from office, overturn enabling laws that give the president decree powers, and appoint the 5 members of the CNE (for 7-year terms) and the 32 members of the Supreme Court (for one 12-year term). With a two-thirds majority, the assembly can remove judges, submit laws directly to a popular referendum, and convene a constitutional assembly to revise the constitution. "], "subsections": []}, {"section_title": "Maduro Government10", "paragraphs": ["After the death of President Hugo Ch\u00e1vez in March 2013, Venezuela held presidential elections the following month in which acting President Nicol\u00e1s Maduro defeated Henrique Capriles of the MUD by 1.5%. The opposition alleged significant irregularities and protested the outcome. ", "Given his razor-thin victory and the rise of the opposition, Maduro sought to consolidate his authority. Security forces and allied civilian groups violently suppressed protests and restricted freedom of speech and assembly. In 2014, 43 people died and 800 were injured in clashes between pro-government forces and student-led protesters concerned about rising crime and violence. President Maduro imprisoned opposition figures, including Leopoldo L\u00f3pez, head of the Popular Will (VP) party, who was sentenced to more than 13 years in prison for allegedly inciting violence. The Union of South American Nations (UNASUR) initiated a government-opposition dialogue in April 2014, but talks quickly broke down. In February 2015, the Maduro government again cracked down on the opposition.", "In the December 2015 legislative elections, the MUD captured a two-thirds majority in Venezuela's National Assembly\u2014a major setback for Maduro. The Maduro government took actions to thwart the legislature's power. The PSUV-aligned Supreme Court blocked three MUD deputies from taking office, which deprived the opposition of the two-thirds majority needed to submit bills directly to referendum and remove Supreme Court justices. From January 2016 through August 2017 (when the National Constituent Assembly voted to give itself legislative powers), the Supreme Court blocked numerous laws and assumed many of the legislature's functions. ", "In 2016, opposition efforts focused on attempts to recall President Maduro in a national referendum. The government used delaying tactics to slow the process considerably. On October 20, 2016, Venezuela's CNE suspended the recall effort after five state-level courts issued rulings alleging fraud in a signature collection drive that had amassed millions of signatures. ", "In October 2016, after an appeal by Pope Francis, most of the opposition (with the exception of the Popular Will party) and the Venezuelan government agreed to talks mediated by the Vatican, along with the former leaders of the Dominican Republic, Spain, and Panama and the head of UNASUR. By December 2016, the opposition had left the talks due to what it viewed as a lack of progress on the part of the government in meeting its commitments. "], "subsections": [{"section_title": "Repression of Dissent, Establishment of a Constituent Assembly in 2017", "paragraphs": ["Far from meeting the commitments it made during the Vatican-led talks, the Maduro government continued to harass and arbitrarily detain opponents (see \" Human Rights ,\" below). In addition, President Maduro appointed a hardline vice president, Tareck el Aissami, former governor of the state of Aragua and a sanctioned U.S. drug kingpin, in January 2017. Popular protests, which were frequent between 2014 and autumn 2016, had dissipated. In addition to restricting freedom of assembly, the government had cracked down on media outlets and journalists, including foreign media. ", "Despite these obstacles, the MUD became reenergized in response to the Supreme Court's March 2017 rulings to dissolve the legislature and assume all legislative functions. After domestic protests, a rebuke by then-Attorney General Luisa Ortega (a Ch\u00e1vez appointee), and an outcry from the international community, President Maduro urged the court to revise those rulings, and it complied. In April 2017, the government banned opposition leader and two-time presidential candidate Henrique Capriles from seeking office for 15 years, which fueled more protests.", "From March to July 2017, the opposition conducted large, sustained protests against the government, calling for President Maduro to release political prisoners, respect the separation of powers, and hold an early presidential election. Clashes between security forces (backed by armed civilian militias) and protesters left more than 130 dead and hundreds injured. ", "In May 2017, President Maduro announced that he would convene a constituent assembly to revise the constitution and scheduled July 30 elections to select delegates to that assembly. The Supreme Court ruled that Maduro could convoke the assembly without first holding a popular referendum (as the constitution required). The opposition boycotted, arguing that the elections were unconstitutional; a position shared by then-Attorney General Luisa Ortega and international observers (including the United States, Canada, the EU, and many Latin American countries). In an unofficial plebiscite convened on July 16 by the MUD, 98% of some 7.6\u00a0million Venezuelans cast votes rejecting the creation of a constituent assembly; the government ignored that vote.", "Despite an opposition boycott and protests, the government orchestrated the July 30, 2017, election of a 545-member National Constituent Assembly (ANC) to draft a new constitution. Venezuela's CNE reported that almost 8.1 million people voted, but a company involved in setting up the voting system alleged that the tally was inflated by at least 1 million votes. ", "Many observers viewed the establishment of the ANC as an attempt by the ruling PSUV to ensure its continued control of the government even though many countries have refused to recognize its legitimacy. The ANC dismissed Attorney General Ortega, who had been critical of the government, voted to approve its own mandate for two years, and declared itself superior to other branches of government. Ortega fled Venezuela in August 2017 and has spoken out against the abuses of the Maduro government. The ANC also approved a decree allowing it to pass legislation, unconstitutionally assuming the powers of the National Assembly. "], "subsections": []}, {"section_title": "Efforts to Consolidate Power Before the May 2018 Elections", "paragraphs": ["From mid-2017 to May 2018, President Maduro strengthened his control over the PSUV and gained the upper hand over the MUD despite international condemnation of his actions. In October 2017, the PSUV won 18 of 23 gubernatorial elections. Although fraud likely took place given the significant discrepancies between opinion polls and the election results, the opposition could not prove that fraud was widespread. There is evidence that the PSUV linked receipt of future government food assistance to votes for its candidates by placing food assistance card registration centers next to polling stations, a practice also used in subsequent elections. The MUD coalition initially rejected the election results, but four victorious MUD governors took their oaths of office in front of the ANC (rather than the National Assembly), a decision that fractured the coalition. ", "With the opposition in disarray, President Maduro and the ANC moved to consolidate power and blamed U.S. sanctions for the country's economic problems. Maduro fired and arrested the head of PdVSA and the oil minister for corruption. He appointed a general with no experience in the energy sector as oil minister and head of the company, further consolidating military control over the economy. The ANC approved a law to further restrict freedom of expression and assembly.", "Although most opposition parties did not participate in municipal elections held in December 2017, a few, including A New Time (UNT), led by Manuel Rosales, and Progressive Advance (AP), led by Henri Falc\u00f3n, fielded candidates. The PSUV won more than 300 of 335 mayoralties. The CNE required parties that did not participate in those elections to re-register in order to run in the 2018 presidential contest, a requirement that many of them subsequently rejected. "], "subsections": []}, {"section_title": "May 2018 Elections", "paragraphs": ["The Venezuelan constitution established that the country's presidential elections were to be held by December 2018. Although many prominent opposition politicians had been imprisoned (Leopoldo L\u00f3pez, under house arrest), barred from seeking office (Henrique Capriles), or in exile (Antonio Ledezma ) by late 2017, some MUD leaders sought to unseat Maduro through elections. Those leaders negotiated with the PSUV to try to obtain guarantees, such as a reconstituted CNE and international observers, to help ensure the elections would be as free and fair as possible. In January 2018, the ANC ignored those negotiations and called for elections to be moved up from December to May 2018, violating a constitutional requirement that elections be called with at least six months anticipation. The MUD declared an election boycott, but Henri Falc\u00f3n (AP) broke with the coalition to run. Falc\u00f3n, former governor of Lara, pledged to accept humanitarian assistance, dollarize the economy, and foster national reconciliation. ", "Venezuela's presidential election proved to be minimally competitive and took place within a climate of state repression. President Maduro and the PSUV's control over the CNE, courts, and constituent assembly weakened Falc\u00f3n's ability to campaign. State media promoted government propaganda. There were no internationally accredited election monitors. The government coerced its workers to vote and placed food assistance card distribution centers next to polling stations. ", "The CNE reported that Maduro received 67.7% of the votes, followed by Falc\u00f3n (21%) and Javier Bertucci, a little-known evangelical minister (10.8%). Voter turnout was much lower in 2018 (46%) than in 2013 (80%), perhaps due to the MUD's boycott. After independent monitors reported widespread fraud, Falc\u00f3n and Bertucci called for new elections to be held. "], "subsections": []}, {"section_title": "Lead-Up to Maduro's January 2019 Inauguration and Aftermath", "paragraphs": ["Since the May 2018 election, President Maduro has faced mounting economic problems (discussed below), coup attempts, and increasing international isolation (see \" Foreign Relations ,\" below). His government has released some political prisoners, including U.S. citizen Joshua Holt, former Mayor Daniel Ceballos, opposition legislators (Gilber Caro and Renzo Prieto), and, in October 2018, former student leader Lorent Saleh. He reshuffled his Cabinet to establish Delcy Rodriguez, former head of the ANC and former foreign minister, as executive vice president in June 2018 and made additional changes in October 2018 within the judiciary and the intelligence services to strengthen his control. On December 9, 2018, Maduro's PSUV-dominated municipal council elections that most opposition parties boycotted, some 27% of eligible voters participated. ", "During 2018, the opposition remained relatively weak and divided and Maduro focused on quashing coup plots and dissent within the military. His government arrested those perceived as threats, including military officers, an opposition legislator accused of involvement in an August 2018 alleged assassination attempt against Maduro, and a German journalist accused of being a spy. According to Foro Penal (a Venezuelan human rights group), the government held 278 political prisoners as of December 2018. Foro Penal and Human Rights Watch have documented several cases in which those accused of plotting coups were subjected to \"beatings, asphyxiation and electric shocks\" by the intelligence services The October 2018 death of Fernando Alb\u00e1n, an opposition politician who was also in custody for his reported involvement in the August 2018 alleged assassination attempt, has provoked domestic protests and international concern. ", "Given that 70% of the population favored Maduro's resignation instead of his inauguration to a second term, observers predict he will face mounting protests and internal dissent. Maduro's regime also could see more defections. In early January, Christian Zerpa, a former ally of Maduro on the Supreme Court, fled the country to seek asylum in the United States; he maintains that the May election \"was not free and competitive.\"", "Under the leadership of Juan Guaid\u00f3, a 35-year old industrial engineer from the VP party who was elected president of the National Assembly on January 5, 2019, the opposition has been reenergized. Guaid\u00f3, buoyed by widespread international condemnation of the May 2018 elections, has declared himself willing to serve as interim president of Venezuela until elections can be called as provided for in Article 233 of the 1999 constitution in the event that a president vacates power. Secret police detained and then subsequently released Guaid\u00f3 on January 13, 2019; it is unclear whether they were acting under Maduro's authority. A government spokesman maintained that the detention \"was an irregular and unilateral action\" by officials who would be punished. While the Brazilian government and the Secretary General of the OAS have openly welcomed Guaid\u00f3 as \"interim president,\" the United States and others have expressed solidarity and urged Venezuelans to rally behind him but stopped short of recognizing him as the country's interim leader.", "The National Assembly has enacted resolutions to declare that President Maduro is no longer the legitimate president, establish a framework for the formation of a transition government, ask 48 countries to freeze Maduro government assets, and provide for amnesty for any public officials (including military members) that support a transition. The Maduro-aligned Supreme Court has ruled that the new leadership of the National Assembly has been acting outside of the law and invalidated its declarations. It remains to be seen how the security forces will respond to these developments, as well as to protests that have been called for January 23, 2019, and beyond."], "subsections": []}]}]}, {"section_title": "Human Rights", "paragraphs": ["Human rights organizations and U.S. officials have expressed concerns for more than a decade about the deterioration of democratic institutions and threats to freedom of speech and press in Venezuela. Human rights conditions in Venezuela have deteriorated even more under President Maduro than under former President Ch\u00e1vez. Abuses have increased, as security forces and allied armed civilian militias ( collectivos ) have been deployed to violently quash protests. In August 2017, the United Nations Office of the High Commissioner for Human Rights (UNOCHR) issued a report on human rights violations perpetrated by the Venezuelan security forces against the protestors. According to the report, credible and consistent accounts indicated that \"security forces systematically used excessive force to deter demonstrations, crush dissent, and instill fear.\" The U.N. report maintained that many of those detained were subject to cruel, degrading treatment and that in several cases, the ill treatment amounted to torture. UNOCHR called for an international investigation of those abuses. ", "In June 2018, UNOCHR issued another report documenting abuses committed by units involved in crime fighting, the scale of the health and food crisis, and the continued impunity in cases involving security officers who allegedly killed people during the protests. ", "Other selected human rights reports from 2017-2018 include", "The Venezuelan human rights group Foro Penal and Human Rights Watch maintain that more than 5,300 Venezuelans were detained during the protests. Together, the organizations documented inhumane treatment of more than 300 detainees that occurred between April and September 2017. In February 2018, the Inter-American Commission on Human Rights (IACHR) released its third report on the situation of human rights in Venezuela. The report highlighted the violation of the separation of powers that occurred as President Maduro and the judiciary interfered in the work of the legislature and then replaced it with a constituent assembly. It then criticized state limits on social protests and freedom of expression and said that the government \"must curtail the use of force against demonstrators.\" In March 2018, the State Department's Country Report on Human Rights Practices for 2017 found that \"human rights deteriorated dramatically\" in 2017 as the government tried hundreds of civilians in military courts and arrested 12 opposition mayors for their \"alleged failure to control protests.\" In May 2018, an independent panel of human rights experts added a legal assessment to a report containing information and witness testimonies gathered by the OAS recommending that the International Criminal Court (ICC) should investigate credible reports that the Venezuelan government committed crimes against humanity. ", "These reports published by international human rights organizations, the U.S. government, U.N. entities, and the OAS/IACHR reiterate the findings of PROVEA, one of Venezuela's leading human rights organizations. In its report covering 2017 (published in June 2018), PROVEA asserts that 2017 was the worst year for human rights in Venezuela since the report was first published in 1989. In addition to violating political and civil rights, PROVEA denounces the Maduro government's failure to address the country's humanitarian crisis, citing its \"official indolence\" as causing increasing deaths and massive emigration. For other sources on human rights in Venezuela, see Appendix C .", "In September 2017, several countries urged the U.N. Human Rights Council to support the High Commissioner's call for an international investigation into the abuses described in the U.N.'s August 2017 report on Venezuela. In June 2018, the High Commissioner for Human Rights urged the U.N. Human Rights Council to launch a commission of inquiry to investigate the abuses it documented in that and a follow-up report. It referred the report to the prosecutor of the ICC. On September 26, 2018, the U.N. Human Rights Council adopted a resolution on Venezuela expressing \"its deepest concern\" about the serious human rights violations described in the June 2018 report, calling upon the Venezuelan government to accept humanitarian assistance and requiring a UNOCHR investigation on the situation in Venezuela to be presented in 2019. ", "In addition to the UNOCHR, former Venezuelan officials, the OAS, and neighboring countries have asked the ICC to investigate serious human rights violations committed by the Maduro government; the ICC prosecutor opened a preliminary investigation in February 2018. In November 2017, former Attorney General Luisa Ortega presented a dossier of evidence to the ICC that the police and military may have committed more than 1,800 extrajudicial killings as of June 2017. In the dossier, Ortega urged the ICC to charge Maduro and several officials in his Cabinet with serious human rights abuses. An exiled judge appointed by the National Assembly to serve on the \"parallel\" supreme court of justice also accused senior Maduro officials of systemic human rights abuses before the ICC. On September 26, 2018, the governments of Argentina, Canada, Chile, Colombia, Paraguay, and Peru requested an investigation of Venezuela's actions by the ICC\u2014the first time fellow states party to the Rome Statute asked for an investigation into the situation of another treaty member."], "subsections": []}, {"section_title": "Economic Crisis48", "paragraphs": ["For decades, Venezuela was one of South America's most prosperous countries. Venezuela has the world's largest proven reserves of oil, and its economy is built on oil. Oil traditionally has accounted for more than 90% of Venezuelan exports, and oil sales have funded the government budget. Venezuela benefited from the boom in oil prices during the 2000s. President Ch\u00e1vez used the oil windfall to spend heavily on social programs and expand subsidies for food and energy, and government debt more than doubled as a share of gross domestic product (GDP) between 2000 and 2012. Ch\u00e1vez also used oil to expand influence abroad through PetroC aribe , a program that allowed Caribbean Basin countries to purchase oil at below-market prices.", "Although substantial government outlays on social programs helped Ch\u00e1vez curry political favor and reduce poverty, economic mismanagement had long-term consequences. Ch\u00e1vez moved the economy in a less market-oriented direction, with widespread expropriations and nationalizations, as well as currency and price controls. These policies discouraged foreign investment and created market distortions. Government spending was not directed toward investment to increase economic productivity or diversify the economy from its reliance on oil. Corruption proliferated.", "When Nicol\u00e1s Maduro took office in 2013, he inherited economic policies reliant on proceeds from oil exports. When oil prices crashed by nearly 50% in 2014, the Maduro government was ill-equipped to soften the blow. The fall in oil prices strained public finances. Instead of adjusting fiscal policies through tax increases and spending cuts, the Maduro government tried to address its growing budget deficit by printing money, which led to inflation. The government also tried to curb inflation through price controls, although these controls were largely ineffective in restricting prices, as supplies dried up and transactions moved to the black market. ", "Meanwhile, the government continued to face a substantial debt burden, with debt owed to private bondholders, China, Russia, multilateral lenders, importers, and service companies in the oil industry. Initially, the government tried to service its debt, fearing legal challenges from bondholders. To service its debt, it cut imports, including of food and medicine, among other measures. In August 2018, the Trump Administration imposed sanctions restricting Venezuela's ability to access U.S. financial markets, which exacerbated the government's fiscal situation. By late 2017, the government had largely stopped paying its bondholders, and Maduro announced plans to restructure its debt with private creditors. It also restructured its debt with Russia. "], "subsections": [{"section_title": "Developments in 2018", "paragraphs": ["Economic output in Venezuela has collapsed. Venezuela's economy has contracted each year since 2014. As the economic crisis has continued and oil production has plummeted (see Figure 3 ), the pace of economic contraction has accelerated. In 2014, the economy contracted by 3.9%; in more recent years, the pace has increased to 16.5% in 2016, 14% in 2017, and 18% in 2018 (see Figure 2 ). In U.S. dollars, Venezuela's GDP has fallen from $331 billion in 2012 to $96 billion in 2018. Hyperinflation is rampant, creating shortages of critical supplies. The government has rapidly expanded the money supply to finance budget deficits, which has led to one of the worst cases of hyperinflation in history, comparable to Germany in 1923 or Zimbabwe in the late 2000s. In October 2018, the IMF forecast that inflation (as measured by average changes in consumer prices) increased from 254% in 2016 to 1,087% in 2017 to 1,370,000% in 2018 (see Figure 2 ). Hyperinflation, as well as low foreign exchange reserves, which make it difficult for Venezuela to import goods and services, has created shortages of critical supplies (including food and medicine), leading to a humanitarian disaster and fueling massive migration (see \" Humanitarian Situation ,\" below). The government remains in default and continues to run unsustainable fiscal policies. Despite pledges to restructure the country's debt, the government has made no discernable progress in negotiations with private creditors and the country remains in default. According to one estimate, the government and state-owned companies owe nearly $8 billion in unpaid interest and principal. Meanwhile, the government continues to run large budget deficits, forecast at 30% of GDP in 2018, amid high debt levels (estimated to be 160% of GDP). By one measure, debt relative to exports, Venezuela is the world's most heavily indebted country.", "In general, the government has been slow to address the economic crisis or acknowledge the government role in creating it. Instead, the government has largely blamed the country's struggles on a foreign \"economic war,\" a thinly veiled reference to U.S. sanctions. In February 2018, as a way to raise new funds, the cash-strapped government launched a new digital currency, the \"petro,\" backed by oil and other commodities, which runs on blockchain technology. The government claims the petro raised $3.3 billion, but the amount raised has never been confirmed by an independent audit. Additionally, there are questions about the petro's operational viability: there are few signs of the petro being circulated within Venezuela or sold on any major cryptocurrency exchange. ", "In August 2018, the government acknowledged, for the first time, its role in creating hyperinflation and announced a new set of policies for addressing the economic crisis. The new policies, reportedly developed in consultation with international advisers, included introducing a new \"sovereign bol\u00edvar,\" which removed five zeros from the previous currency (the bol\u00edvar); cutting the government budget deficit from 30% in 2018 to zero, in part by raising value-added tax and increasing the price of petrol; speeding up tax collection; and increasing the minimum salary by more than 3,000%. Since the plan's rollout in August, there is little evidence that the government's policies have restored confidence in Venezuela's economy. In December 2018, Maduro visited Moscow seeking financial assistance. Although he announced investment deals with Russian partners\u2014$5 billion for the oil industry and $1 billion for the gold industry\u2014Russian officials cast doubt on these commitments."], "subsections": []}, {"section_title": "Prospects for 2019", "paragraphs": ["The long-anticipated conflict between investors holding defaulted Venezuelan bonds and the government may be coming to a head. Venezuelan government and PdVSA dollar-denominated bonds were largely issued under New York law. It has been expected that bondholders would seek repayment through legal challenges against the Venezuelan government or PdVSA in the U.S. legal system. If successful in their legal challenges, creditors could receive compensation through seizure of Venezuela's assets in the United States, such as Citgo (whose parent company is PdVSA), oil exports, and cash payments for oil exports. Even though the government started missing payments in late 2017, creditors refrained from mounting legal challenges, presumably hoping for higher recovery rates during a more favorable economic environment and/or negotiations with new government. U.S. sanctions also complicate the restructuring process. However, in mid-December 2018, a group of creditors took an initial step toward launching the legal process, by demanding payment on a defaulted $1.5 billion bond. It is expected that other creditors will organize and follow suit.", "Venezuela's economic crisis has been ongoing for a number of years, and the outlook is bleak. There is neither a clear nor a quick resolution on the horizon, particularly given the concurrent political crisis. The government's policy responses to the economic crisis\u2014even with the new reforms in August\u2014have been widely criticized as inadequate. The government appears loathe to adopt policies widely viewed by economists as necessary to restoring the economy: removing price controls, creating an independent central bank, engaging with an IMF program, and restructuring its debt with private bondholders. ", "The role of the IMF in particular is problematic, with the government resisting outside support from \"imperialist\" powers. Venezuela has not allowed the IMF to conduct routine surveillance of its economy since 2004, and the IMF has found the government in violation of its commitments as an IMF member. However, in December 2018, the IMF acknowledged that the Venezuelan government provided it with some economic data as required by all IMF members. It remains to be seen whether this will be a turning point in the Maduro government's willingness to engage with the IMF. Some analysts believe a change in Venezuela's overall economic strategy will only come if and when there is a change in government."], "subsections": []}, {"section_title": "Energy Sector Challenges67", "paragraphs": ["Oil revenues are an important element of Venezuela's economy and account for approximately 98% of the country's export earnings. Venezuela holds the largest amount of oil reserves in the world with more than 300 billion barrels of proven reserves at the end of 2017. However, oil production and export volumes have been trending downward over the last four years. In 2015, oil production in Venezuela averaged 2.37 million barrels per day (b/d). Oil production declined to average 1.9 million b/d in 2017. In March 2018, the International Energy Agency projected that Venezuela's crude oil production would continue declining to just over 1 million b/d and remain at that level until 2023 (see Figure 3 ). Actual oil production in Venezuela has generally followed the projected trend with production in November 2018 averaging approximately 1.13 million b/d.", "PdVSA's performance has been affected by a number of factors. Since August 2017, the Maduro government has arrested many executives for alleged corruption, which dissidents within the company assert has been a false pretense for replacing technocrats with military officers. Workers at all levels reportedly are abandoning the company by the thousands. Production has been challenged by aging infrastructure, bottlenecks created by PdVSA's inability to pay service companies and producers, and shortages of inputs (such as light crudes for blending) used to process its heavy crude oil. Massive debt (estimated at some $25 billion), combined with U.S. sanctions limiting the willingness of banks to issue credit to PdVSA and the fact that much of its production does not generate revenue, have added to the company's woes. When Conoco sought to seize PdVSA facilities in the Caribbean over nonpayment of past debts in mid-2018, tankers with crude oil began backing up and the company could not satisfy all of its deliveries. ", "Corruption remains a major drain on the company's revenues and an impediment to performance. In 2016, a report by the National Assembly estimated that some $11 billion disappeared at PdVSA from 2004 to 2014. In February 2018, U.S. prosecutors unsealed an indictment accusing former executives in Venezuela's energy ministry and PdVSA of laundering more than $1 billion in oil income. Corruption, as well as looting and misuse of infrastructure, has continued since a military general with no experience in the sector took control of the company in late 2017 and replaced technocrats with military officers and other loyalists.", "Declining production by PdVSA-controlled assets, through 2015 contrasted with the performance of joint ventures that PdVSA has with Chevron, CNPC, Gazprom, Repsol, and others. From 2010 to 2015, production declined by 27.5% in fields solely operated by PdVSA, whereas production in fields operated by joint ventures increased by 42.3%. The future of these ventures is uncertain, however, as Maduro's government arrested executives from Chevron in April 2018 after they reportedly refused to sign an agreement under unfair terms. Although they were released in June, Chevron and other companies have scaled back their operations. Instead of relying on experienced partners, military officials with little expertise have signed contracts for basic functions, including drilling, with little-known companies that lack experience.", "PdVSA has also been under pressure to make payments to bondholders and to Canadian miner Crystallex in order to prevent the transfer of Citgo ownership control. Crystallex was awarded a $1.4 billion settlement in 2011 by the International Court for Settlement of Investment Disputes that was linked to Venezuela seizing the company's gold prospects in 2007. A Delaware court issued a decision that would have allowed Crystallex to seize PDV Holding, the PdVSA subsidiary that is Citgo's parent company. Venezuela reached an agreement with Crystallex to make a payment installment towards the $1.4 billion settlement in November 2018. In December 2018, it was reported that Venezuela had violated terms of the settlement agreement. This results in some uncertainty about the path forward for Crystallex to collect on its arbitration award and the potential future of Citgo ownership control. ", "The Administration has imposed sanctions on Venezuela that are designed to affect PdVSA business operations. Sanctions that specifically affect PdVSA include those that limit access to debt finance for business activities. Generally, limiting PdVSA's access to debt potentially results in difficulties for the company financing business activities and also results in PdVSA having to access non-U.S. sources of capital. To date, the Administration has not imposed sanctions that might target petroleum trade between the United States and Venezuela, which is bilateral but heavily weighted towards U.S. refinery purchases of Venezuelan crude oil (see \" Energy Sector Concerns and Potential U.S. Sanctions ,\" below)."], "subsections": []}]}, {"section_title": "Humanitarian Situation87", "paragraphs": ["Growing numbers of people continue to leave Venezuela for urgent reasons, including insecurity and violence; lack of food, medicine, or access to essential social services; and loss of income. As the pace of arrivals from Venezuela has quickened, neighboring countries, particularly Colombia, are straining to absorb a population that is often malnourished and in poor health. According to a 2017 national survey on living conditions, the percentage of Venezuelans living in poverty increased from 48.4% in 2014 to 87% in 2017. Poverty has been exacerbated by shortages in basic consumer goods, as well as by bottlenecks and corruption in the military-run food importation and distribution system. Basic food items that do exist are largely out of reach for the majority of the population due to rampant inflation. Between 2014 and 2016, Venezuela recorded the greatest increase in malnourishment in Latin America and the Caribbean, a region in which only eight countries recorded increases in hunger. According to Caritas Venezuela (an organization affiliated with the Catholic Church), 15% of children surveyed in August 2017 suffered from moderate to severe malnutrition and 30% showed stunted growth. ", "Venezuela's health system has been affected severely by budget cuts, with shortages of medicines and basic supplies, as well as doctors, nurses, and lab technicians. Some hospitals face critical shortages of antibiotics, intravenous solutions, and even food, and 50% of operating rooms in public hospitals are not in use. According to the Venezuelan Program of Education-Action in Human Rights (PROVEA), a 2018 national hospital survey, 88% of hospitals lack basic medicines and 79% lack basic surgical supplies. In addition, a June 2018 Pan-American Health Organization (PAHO) report estimated that some 22,000 doctors (33% of the total doctors that were present in 2014) and at least 3,000 nurses had emigrated.", "In February 2017, Venezuela captured international attention following the unexpected publication of data from the country's Ministry of Health (the country had not been releasing such data since 2015). The report revealed significant spikes in infant and maternal mortality rates. By 2017, the infant mortality rate in Venezuela was reportedly 79% higher than it had been in 2011, according to World Bank data.", "PAHO's June 2018 report also documented the spread of previously eradicated infectious diseases like diphtheria (detected in July 2016) and measles (detected in July 2017). Malaria, once under control, is also spreading rapidly, with more than 400,000 cases recorded in 2017 (a 198% increase over 2015). Increasing numbers of people have also reportedly died from HIV/AIDS in Venezuela due to the collapse of the country's once well-regarded HIV treatment program and the scarcity of drugs needed to treat the disease. Observers are concerned that the lack of access to reliable contraception may hasten the spread of sexually transmitted diseases, unwanted pregnancies, and dangerous clandestine abortions.", "The World Health Organization (WHO) is reportedly helping the government purchase and deliver millions of vaccines against measles, mumps, and rubella. Nevertheless, doctors and health associations have urged the U.N. entity to provide more assistance and exert more pressure on the government to address the health crisis. Moreover, while President Maduro has publicly rejected offers of international humanitarian assistance, in November 2018, the U.N. Central Emergency Response Fund (CERF) allocated $9.2 million for Venezuela to be provided through U.N. entities, such as the U.N. Children's Fund (UNICEF), WHO, and UNHCR. This emergency humanitarian funding is to support projects providing nutritional support to children under five years old, pregnant women and lactating mothers at risk, and emergency health care and other aid for the vulnerable, including the displaced and host communities in Venezuela. "], "subsections": [{"section_title": "Regional Migration Crisis", "paragraphs": ["Based on conservative figures from UNHCR and other experts, more than 3 million Venezuelan refugees and migrants had left the country by November 2018, with the vast majority remaining in the Latin America and Caribbean region. As of November 2018, the U.N. High Commissioner for Refugees (UNHCR) estimated that there were over 1 million Venezuelans living in Colombia, 500,000 in Peru, 220,000 in Ecuador 130,000 in Argentina, 100,000 in Chile, 94,000 in Panama, and 85,000 in Brazil. Taken as a percentage of their overall population, Venezuelan arrivals have also significantly impacted smaller countries and territories in the Caribbean. For example, Trinidad and Tobago, a twin-island country with 1.4 million people, estimated in late 2018 that it was hosting some 60,000 Venezuelans, which increased its overall population by more than 4%. By the end of 2019, UNHCR and the International Organization for Migration (IOM) estimate that the number of Venezuelan refugees and migrants could reach over 5.3 million. Although not all of the Venezuelans who have fled the country in recent years may be considered refugees, a significant number are in need of international protection. ", "Responses to the Venezuelan arrivals vary by country and continue to evolve with events on the ground. ( See Figure 4 .) Between September 2014 and 2018, roughly 400,000 Venezuelans in the region and beyond (in the United States, Canada, Spain, and elsewhere) applied for political asylum (specific legal protection for which most migrants do not qualify.) As of October 2018, a further 960,000 Venezuelan arrivals in Latin America had been granted alternative legal forms of stay (which typically enables access to social services and the right to work.) Humanitarian experts are most concerned about the roughly 60% of Venezuelans in neighboring countries who lack identification documents. The Venezuelan government has made it increasingly difficult for Venezuelans to obtain a valid passport and therefore legal status outside the country. Those who lack status are vulnerable to arrest and deportation by governments and to abuse by criminal groups, including human trafficking.", "This is a significant displacement crisis for the Western Hemisphere, which has in place some of the highest international and regional protection standards for displaced and vulnerable persons. Neighboring countries are under pressure to examine their respective migration and asylum policies and to address, as a region, the legal status of Venezuelans who have fled their country. ", "Humanitarian organizations and governments are responding to the needs of displaced Venezuelans in the region. Protection and assistance needs are significant for arrivals and host communities. Services provided vary by country but include support for reception centers and options for shelter; emergency relief items, such as emergency food assistance, safe drinking water, and hygiene supplies; legal assistance with asylum applications and other matters; protection from violence and exploitation; and the creation of temporary work programs and education opportunities. ", "International Humanitarian Assistance. U.N. agencies and other international organizations have launched appeals for additional international assistance, and the U.S. government is providing humanitarian assistance and helping to coordinate regional response efforts (see \" U.S. Humanitarian and Related Assistance ,\" below). The U.N. Secretary-General appointed UNHCR and IOM to coordinate the international response, which includes U.N. entities, nongovernmental organizations, the Red Cross Movement, faith-based organizations, and civil society. Former Guatemalan Vice President Eduardo Stein has been appointed the U.N. Joint Special Representative for Venezuelan Refugees and Migrants to promote dialogue and consensus in the region and beyond on the humanitarian response. ", "In mid-December 2018, UNHCR and IOM launched the regional Refugee and Migrant Response Plan (RMRP), which is the first of its kind in the Americas: an operational and coordination strategy \"responding to the needs of Venezuelans on the move and securing their social and economic inclusion in the communities receiving them.\" The RMRP was put together by 95 organizations covering 16 countries. The RMRP is also an appeal for $738 million in funding to support over 2 million Venezuelans and half a million people in host communities. It focuses on four key areas: direct emergency assistance, protection, socio-economic and cultural integration and strengthening capacities in the receiving countries."], "subsections": []}]}, {"section_title": "Foreign Relations", "paragraphs": ["The Maduro government has maintained Venezuela's foreign policy alliance with Cuba and a few other leftist governments in Latin America, but the country's ailing economy has diminished its formerly activist foreign policy, which depended on its ability to provide subsidized oil to 17 other Caribbean Basin countries. President Maduro has increasingly relied on financial backing from China and Russia. Unlike under Ch\u00e1vez, an increasing number of countries have criticized authoritarian actions taken by the Maduro government, brought concerns about Venezuela to regional and global organizations, and implemented targeted sanctions against its officials. ", "Since more than 50 countries did not recognize the results of the May 2018 presidential elections and do not consider his current presidency legitimate, Maduro is likely to face increasing international isolation. The OAS has voted not to recognize the legitimacy of Maduro's current term, mirroring the U.S. and EU positions. Paraguay has broken diplomatic ties with the Maduro government and Peru has recalled its last diplomat from Caracas and pledged not to permit Venezuelan officials to travel through its territory. Other countries may follow suit. ", "Venezuela's foreign relations have become more tenuous as additional countries have sanctioned its officials. In September 2017, Canada implemented targeted sanctions against 40 Venezuelan officials deemed to be corrupt; it added another 14 individuals, including President Maduro's wife, following the May elections. In November 2017, the EU established a legal framework for targeted sanctions and adopted an arms embargo against Venezuela to include related material that could be used for internal repression. These actions paved the way for targeted EU sanctions on seven Venezuelan officials in January 2018. On June 25, 2018, the Council of the EU sanctioned 11 additional individuals for human rights violations and undermining democracy and called for new presidential elections to be held. Those sanctions will remain in place through late 2019. In March 2018, Panama and Switzerland sanctioned Venezuelan officials. Additional sanctions by these countries are possible now that they consider Maduro's mandate illegitimate."], "subsections": [{"section_title": "Latin America and the Lima Group", "paragraphs": ["Ties between Venezuela and a majority of South American countries have frayed with the rise of conservative governments in Argentina, Brazil, Chile, Colombia, and Peru and with Maduro's increasingly authoritarian actions. In December 2016, the South American Common Market (Mercosur) trade bloc suspended Venezuela over concerns that its government had violated the requirement that Mercosur's members have \"fully functioning democratic institutions.\" Six UNASUR members\u2014Uruguay, Argentina, Brazil, Chile, Colombia, and Paraguay\u2014issued a joint statement opposing the Venezuelan Supreme Court's attempted power grab in March 2017. According to the Colombian government, it is working with other South American countries to create a new regional entity to replace UNASUR and isolate Venezuela.", "Concerned about potential spillover effects from turmoil in Venezuela, Colombia has supported OAS actions, provided humanitarian assistance to Venezuelan economic migrants and asylum seekers, and closely monitored the situation on the Venezuelan-Colombian border. Colombian President Ivan Duque and Brazilian President Jair Bolsonaro have pledged to support efforts to hasten Maduro's exit from power. Tensions remain high along the border with Guyana after the U.N. proved unable to resolve a long-standing border-territory dispute between the countries and referred the case to the International Court of Justice in January 2018. Venezuela's navy stopped ExxonMobile ships doing seismic surveys for the Guyanese government in December 2018.", "On August 8, 2017, 12 Western Hemisphere countries signed the Lima Accord, a document rejecting the rupture of democracy and systemic human rights violations in Venezuela, refusing to recognize the ANC, and criticizing the government's refusal to accept humanitarian aid. The signatory countries are Mexico; Canada; four Central American countries (Costa Rica, Guatemala, Honduras, and Panama); and six South American countries (Argentina, Brazil, Chile, Colombia, Paraguay, and Peru). Although the Lima Group countries support targeted U.S. economic sanctions, most reject any discussion of military intervention and most are not in favor of restrictions on U.S. petroleum trade with Venezuela.", "On February 13, 2018, Guyana and St. Lucia joined the Lima Group as it issued a statement calling for the Maduro government to negotiate a new electoral calendar that is agreed upon with the opposition and to accept humanitarian aid. These nations also backed Peru's decision to disinvite President Maduro to the Summit of the Americas meeting of Western Hemisphere heads of state in April 2018. The Lima Group did not recognize the results of the May 20, 2018, Venezuelan elections. Its members were among the 19 countries that voted in favor of an OAS resolution on Venezuela approved on June 5, 2018. The resolution said that the electoral process in Venezuela \"lacks legitimacy\" and authorized countries to take \"the measures deemed appropriate,\" including sanctions, to assist in hastening a return to democracy in Venezuela .", "On January 4, 2019, thirteen members of the Lima Group (excluding Mexico) signed a declaration that urged President Maduro not to assume power on January 10, 2019 and to cede control of the country to the National Assembly until elections can be held. The signatories resolved to reassess their level of diplomatic engagement with Venezuela, implement travel bans or sanctions (where possible) on high-level Maduro government officials, suspend military cooperation and arms transfers to Venezuela, and evaluate whether to give loans to the Maduro government at regional and international financial institutions, among other measures. While Mexico had previously been an active member of the Lima Group, the leftist government of Andr\u00e9s Manuel L\u00f3pez Obrador has adopted policy of nonintervention in foreign affairs and did not vote for the measure. While some have criticized this policy shift, others maintain that Mexico could perhaps arbitrate between the government and the opposition.", "Those same thirteen countries also joined with the United States and five others to support a January 10, 2019 OAS resolution on Venezuela not recognizing the legitimacy of Maduro's second term. (See Appendix B for OAS efforts on Venezuela.)", "The Maduro government has continued to count on political support from Cuba, Bolivia, and Nicaragua, which, together with Venezuela, were key members of the Bolivarian Alliance of the Americas (ALBA), a group launched by President Ch\u00e1vez in 2004. Caribbean members of ALBA\u2014Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, and St. Vincent and the Grenadines\u2014had, until recently, been reluctant to take action that could anger the Maduro government. Since Len\u00edn Moreno took office in May 2017, the Ecuadorian government (another ALBA member) has been critical of the Maduro government. Most of these governments abstained from the June 5, 2018, OAS vote on the legitimacy of the election in Venezuela, with only Bolivia, Dominica, and St. Vincent and the Grenadines voting with Venezuela and against the measure. In January 2019, Ecuador and Haiti voted in favor of the OAS measure that deemed Maduro's second term illegitimate, only Bolivia, Dominica, Nicaragua, St. Vincent and the Grenadines, and Suriname voted with Venezuela and against the measure. ", "Cuba's close relationship with Venezuela was solidified in 2000, when the countries signed an agreement for Venezuela to provide Cuba at least 90,000 barrels of oil per day (b/d) in exchange for technical assistance and other services. Estimates of the number of Cuban personnel in Venezuela vary, but a 2014 study estimated that there were 40,000, 75% of whom were health care workers. At that time, the report said that the number of Cuban military and intelligence advisors in Venezuela may have ranged from hundreds to thousands, coordinated by Cuba's military attach\u00e9 in Venezuela. It is unclear how many of those professionals have stayed in the country, but Cuban intelligence officers have reportedly helped the Maduro government identify and disrupt coup plots. Although Cuba has imported more oil from Russia and Algeria to make up for dwindling Venezuelan supplies since 2017, the Maduro government remains committed to providing what it can, even if it has to be purchased from other sources. "], "subsections": []}, {"section_title": "China and Russia", "paragraphs": ["As Venezuela's economic situation has deteriorated, maintaining close relations with China and Russia, the country's largest sources of financing and investment, has become a top priority. From 2007 through 2016, China provided some $62.2 billion in financing to Venezuela. The money typically has been for funding infrastructure and other economic development projects, but has also included some lending for military equipment. It is being repaid through oil deliveries. Although the Chinese government has been patient when Venezuela has fallen behind on its oil deliveries, it reportedly stopped providing new loans to Venezuela in fall 2016. ", "Some observers have criticized China for its continued support to the Venezuelan government and questioned whether a new Venezuelan government might refuse to honor the obligations incurred under Maduro. China refrained from negative commentary after the Constituent Assembly elections and accepted the May 2018 election results. It has responded to U.S. sanctions by stating that \"unilateral sanctions will make the situation even more complicated.\" ", "Russia has remained a strong ally of the Maduro government. It has called for the political crisis in Venezuela to be resolved peacefully, with dialogue, and without outside interference. Russia's trade relations with Venezuela currently are not significant, with $336 million in total trade in 2016, with $334 million, consisting of Russian exports to Venezuela. However, Venezuela had been a major market for Russian arms sales between 2001 and 2013, with over $11 billion in sales. Press reports in May 2017 asserted that Venezuela had more than 5,000 Russian-made surface-to-air missiles, raising concern by some about the potential for them being stolen or sold to criminal or terrorist groups. Russia's 2017 decision to allow Venezuela to restructure $3.15 billion in debt provided much-needed financial relief to the Maduro government. Russian state oil companies Rosneft and Gazprom have large investments in Venezuela. Both are seeking to expand investments in Venezuela's oil and gas markets (see \" Energy Sector Concerns ,\" below). ", "Russia congratulated President Maduro on his reelection and inauguration. Maduro visited Russia to seek investment in early December 2018 after which news reports suggested that Rosneft has lent PdVSA $6.5 billion, partly as a prepayment for crude oil. Russia then sent two nuclear-capable jets to Venezuela to conduct joint exercises (which also occurred in 2008 and 2013) in mid-December in a show of support for the government. "], "subsections": []}]}, {"section_title": "U.S. Policy", "paragraphs": ["The United States historically has had close relations with Venezuela, a major U.S. foreign oil supplier, but friction in relations increased under the Ch\u00e1vez government and has intensified under the Maduro regime. For more than a decade, U.S. policymakers have had concerns about the deterioration of human rights and democratic conditions in Venezuela and the lack of bilateral cooperation on counternarcotics and counterterrorism efforts. U.S. officials have expressed increasing concerns regarding Colombian criminal and terrorist groups in Venezuela. U.S. democracy and human rights funding, which totaled $15 million in FY2018, and political support have bolstered democratic civil society in Venezuela. U.S. humanitarian assistance is supporting Venezuelans who have fled to neighboring countries. ", "The United States has employed various sanctions in response to concerns about the activities of the Venezuelan government or Venezuela-linked individuals and entities. Targeted sanctions escalated after President Maduro usurped the power of the National Assembly by holding constituent assembly elections on July 30, 2017. In the wake of the May 2018 elections that the United States and much of the international community deemed illegitimate, the Trump Administration has sought to increase pressure on the Maduro government in order to hasten a return to democracy in Venezuela. The Administration has ratcheted up targeted sanctions on Venezuelan officials accused of corruption, antidemocratic actions, or human rights abuses under Executive Order (E.O.) 13692 (issued by President Obama in 2015) and on Venezuela-linked individuals and entities for drug trafficking. President Trump issued three executive orders restricting the government and PdVSA's ability to access the U.S. financial system (E.O. 13808), barring U.S. purchases of Venezuela's new digital currency (E.O. 13827), and prohibiting U.S. purchases of Venezuelan debt (E.O. 13835). E.O. 13850, issued in November 2018, created a framework to sanction those who operate in Venezuela's gold sector or those deemed complicit in corrupt transactions involving the government.", "Following President Maduro's second inauguration, Secretary of State Michael Pompeo pledged to \"use the full weight of U.S. economic and diplomatic power to press for the restoration of Venezuelan democracy.\" National Security Adviser John Bolton lent support to National Assembly leader Juan Guaid\u00f3's decision \"to invoke protections under Venezuela's constitution and declare that Maduro does not legitimately hold the country's presidency.\" Vice President Pence has also lent his support to Guaid\u00f3. According to U.S. officials, forthcoming U.S. actions could limit or prohibit petroleum trade with Venezuela. Some analysts maintain that oil sanctions could hasten the regime's demise, whereas others caution that such sanctions could inflict further suffering on the Venezuelan people."], "subsections": [{"section_title": "U.S. Democracy Assistance", "paragraphs": ["For more than a decade, the United States has provided democracy-related assistance to Venezuelan civil society through the U.S. Agency for International Development (USAID) and the National Endowment for Democracy (NED).", "From 2002 through 2010, USAID supported small-grant and technical assistance activities through its Office of Transition Initiatives (OTI) to provide assistance monitoring democratic stability and strengthening the county's democratic institutions. At the end of 2010, USAID's support for such activities in Venezuela was transferred from OTI to USAID's Latin America and Caribbean Bureau. U.S. democracy and human rights assistance to Venezuela amounted to $4.3 million in each of FY2014 and FY2015 and $6.5 million in FY2016, provided through the Economic Support Fund (ESF) funding account. U.S. assistance totaled $7 million in FY2017, provided through the Development Assistance Account. ", "The Trump Administration did not request any assistance for democracy and human rights programs in Venezuela for FY2018. Nevertheless, Congress provided $15 million in democracy and human rights assistance to civil society groups in Venezuela in P.L. 115-141 . ", "For FY2019, the Trump Administration requested $9 million to support democracy and human rights programs in Venezuela that strengthen civil society, democratic institutions and processes, and independent media. Congress has yet to enact a full-year FY2019 appropriations measure, although a series of continuing resolutions provided FY2019 funding through December 21, 2018. Legislation to fund foreign aid programs for the remainder of FY2019 could incorporate provisions from the State, Foreign Operations, and Related Programs appropriations measures that the House and Senate Appropriations Committees approved during the 115 th Congress. The House Committee bill ( H.R. 6385 ) recommended providing $15 million for programs in Venezuela, while the Senate Committee bill ( S. 3108 ) recommended $20 million.", "As noted above, NED has funded democracy projects in Venezuela since 1992. U.S. funding for NED is provided in the annual State Department and Foreign Operations appropriations measure, but country allocations for NED are not specified in the legislation. In FY2017, NED funded 43 projects in Venezuela totaling $2.6 million (up from $1.6 million in FY2016). "], "subsections": []}, {"section_title": "U.S. Humanitarian and Related Assistance150", "paragraphs": ["The U.S. government is providing humanitarian and emergency food assistance and helping to coordinate and support regional response efforts. As of September 30, 2018 (latest data available), U.S. government humanitarian funding for the Venezuela regional response totaled approximately $96.5 million for both FY2017 and FY2018 combined, of which $54.8 million was for Colombia. (Humanitarian funding is drawn primarily from the global humanitarian accounts in annual Department of State/Foreign Operations appropriations acts.) From October through the end of December, the U.S. Navy hospital ship USNS Comfort was on an 11-week medical support deployment to work with government partners in Ecuador, Peru, Colombia, and Honduras, in part to assist with arrivals from Venezuela.", "In Colombia, the U.S. response aims to help the Venezuelan arrivals as well as the local Colombian communities that are hosting them. In addition to humanitarian assistance, the United States is also providing $37 million in bilateral assistance to support medium and longer-term efforts by Colombia to respond to the Venezuelan arrivals. "], "subsections": []}, {"section_title": "Targeted Sanctions Related to Antidemocratic Actions, Human Rights Violations, and Corruption151", "paragraphs": ["In Venezuela, as in other countries, the U.S. government has used targeted sanctions to signal disapproval of officials who have violated U.S. laws or international human rights norms and to attempt to deter others from doing so. Targeted sanctions can punish officials or their associates who travel internationally and hold some of their assets in the United States without causing harm to the population as a whole. Some argue that sanctioning additional Venezuelan officials might help to increase pressure on the Maduro government to cede power or at least stop violating human rights, whereas others argue that increased sanctions would only encourage Maduro and his allies to harden their positions. ", "In December 2014, the 113 th Congress enacted the Venezuela Defense of Human Rights and Civil Society Act of 2014 ( P.L. 113-278 ). Among its provisions, the law required (until December 31, 2016) the President to impose sanctions (asset blocking and visa restrictions) against those whom the President determined were responsible for significant acts of violence or serious human rights abuses associated with the 2014 protests or, more broadly, against anyone who had directed or ordered the arrest or prosecution of a person primarily because of the person's legitimate exercise of freedom of expression or assembly. In July 2016, Congress enacted legislation ( P.L. 114-194 ) extending the termination date of the requirement to impose sanctions until December 31, 2019.", "In March 2015, President Obama issued Executive Order (E.O.) 13692 , which implemented P.L. 113-278 and went beyond the requirements of the law. The E.O. authorized targeted sanctions against (1) those involved in actions or policies that undermine democratic processes or institutions; (2) those involved in significant acts of violence or conduct constituting a serious abuse or violation of human rights; (3) those involved in actions that prohibit, limit, or penalize the exercise of freedom of expression or peaceful assembly; or (4) those senior Venezuelan officials involved in public corruption. ", "The Department of the Treasury has imposed sanctions on 65 Venezuelans pursuant to E.O. 13692. In March 2015, the Department of the Treasury froze the assets of six members of Venezuela's security forces and a prosecutor involved in repressing antigovernment protesters. Under the Trump Administration, the Department of the Treasury has imposed sanctions against an additional 65 Venezuelans pursuant to E.O. 13692, including members of the Supreme Court, CNE, Cabinet, Constituent Assembly, and security forces (army, national guard, and police). On July 31, 2017, the Administration imposed sanctions on President Maduro, one of four heads of state subject to U.S. sanctions. On May 18, 2018, the U.S. Department of the Treasury imposed sanctions on four current or former Venezuelan officials, including Diosdado Cabello. In September 2018, Treasury sanctioned four members of President Maduro's inner political circle, including his wife Celia Flores and executive vice president Delcy Rodriguez.", "Other Targeted Sanctions. On November 1, 2018, President Trump signed E.O. 13850, creating a framework to sanction those who operate in Venezuela's gold sector (where much of the gold is produced illegally) or those deemed complicit in corrupt transactions involving the government (see \" Illegal Mining ,\" below). In January 2019, sanctions were imposed under that Executive Order against seven individuals including a former Venezuelan treasurer and a television magnate, and 23 companies involved in a scheme to bribe the government and steal $2.4 billion in state funds.", "Trafficking in Persons Sanctions . Since 2014, Venezuela has received a Tier 3 ranking in the State Department's annual Trafficking in Persons (TIP) reports. U.S. assistance to Venezuela has not been subject to TIP-related sanctions, since the democracy and human rights aid provided goes to nongovernmental organizations and has been deemed to be in the U.S. national interest. According to the June 2018 TIP report, although the government arrested seven trafficking suspects, it did not provide any data on prosecutions or convictions, victims identified, or any other anti-trafficking efforts."], "subsections": []}, {"section_title": "Sanctions Restricting Venezuela's Access to U.S. Financial Markets", "paragraphs": ["President Trump signed E.O. 13808, effective August 25, 2017, imposing new sanctions that restrict the Venezuelan government's access to U.S. financial markets, which has been an important source of capital for the government and PdVSA. According to the White House, the measures \"are carefully calibrated to deny the Maduro dictatorship a critical source of financing to maintain its illegitimate rule, protect the U.S. financial system from complicity in Venezuela's corruption and in the impoverishment of the Venezuelan people, and allow for humanitarian assistance.\" Sanctions targeting sovereign debt are unusual, but not unprecedented. ", "The sanctions seek to cut off new funds flowing from U.S. investors or through the U.S. financial system to the Maduro government. To this end, sanctions restrict transactions by U.S. investors or within the United States related to new debt issued by the Venezuelan government and PdVSA. U.S. persons are also prohibited from purchasing securities from the Venezuelan government. Additionally, CITGO\u2014whose parent company is PdVSA\u2014is prohibited from distributing profits to the Venezuelan government, though it can continue its operations in the United States. Additionally, the sanctions target new short-term debt (less than 30 days for the Venezuelan government and less than 90 days for PdVSA). This ensures continued access to short-term financing that facilitates U.S. trade with Venezuela, including U.S. imports of oil from Venezuela. Concurrent with the release of the Executive Order in August, Treasury issued licenses to minimize the impact of sanctions on U.S. economic interests and on the Venezuelan people. ", "When the sanctions were announced in August 2017, there was debate about whether they would push Venezuela to default, or whether the government would find alternative sources of financing through new oil-for-loan deals with Russia and China or taking cash from PdVSA. Most economists agree that the sanctions made the fiscal position of the government more difficult, as many international banks ceased all financial transactions with Venezuela, and as sanctions accelerated the decline in Venezuelan oil exports to the United States. ", "In 2018, the Trump Administration issued two additional executive orders to further tighten Venezuela's access to U.S. financial markets. Executive Order 13827, issued in March 2018, prohibits U.S. investors from purchasing or transacting in Venezuela's new digital currency, the petro, designed to help the government raise funds and circumvent U.S. sanctions. Executive Order 13835, issued in May 2018, prohibits U.S. investors from buying debt or accounts receivable with the Venezuelan government, including PdVSA, measures devised to close off an \"avenue for corruption\" used by Venezuelan government officials to enrich themselves. "], "subsections": []}, {"section_title": "Organized Crime-Related Issues", "paragraphs": ["Venezuela has among the highest crime victimization and homicide rates in Latin America and the Caribbean, the region with the highest homicide rates in the world. According to the Venezuelan Violence Observatory (OVV), the homicide rate in Venezuela declined in 2018 (81.4 homicides per 100,000 people) as compared to a rate of 89.1 per 100,000 people in 2017, with part of that decline attributed to migration that has reduced the population. The impunity rate for homicide in Venezuela is roughly 92%. Although many homicides have been committed by criminal groups, extrajudicial killings by security forces and allied armed civilian militias ( collectivos ) also have been rising. In September 2018, Amnesty International published a report describing how security forces have adopted militarized approaches to public security that have resulted in numerous human rights abuses, including extrajudicial killings.", "A May 2018 report by Insight Crime identified more than 120 high-level Venezuelan officials who have engaged in criminal activity, which has blurred the lines between crime groups and the state. Many of those officials allegedly have engaged in drug trafficking (discussed below), but others reportedly have deputized illegal groups in the neighborhoods and prisons, run smuggling operations in border areas, and extracted revenue from state industries. In 2016, a National Assembly committee estimated that kleptocracy had cost the country some $70 billion."], "subsections": [{"section_title": "Counternarcotics", "paragraphs": ["Venezuela's pervasive corruption and extensive 1,370-mile border with Colombia have made the country a major transit route for cocaine destined for the United States and an attractive environment for drug traffickers and other criminals to engage in money laundering. In 2005, Venezuela suspended its cooperation with the U.S. Drug Enforcement Administration (DEA) after alleging that DEA agents were spying on the government, charges U.S. officials dismissed as baseless. Prior to that time, the governments had negotiated an antidrug cooperation agreement (an addendum to a 1978 Bilateral Counternarcotics agreement) that would have enhanced information-sharing and antidrug cooperation. Venezuela has yet to approve that agreement.", "Since 2005, Venezuela has been designated annually as a country that has failed to adhere to its international antidrug obligations, pursuant to international drug-control certification procedures in the Foreign Relations Authorization Act, FY2003 ( P.L. 107-228 ). In September 2018, President Trump designated Venezuela as one of two countries not adhering to its antidrug obligations. At the same time, President Trump waived economic sanctions that would have curtailed U.S. assistance for democracy programs.", "The State Department reported in its 2018 International Narcotics Control Strategy Report (INCSR) that Venezuela was one of the preferred trafficking routes for the transit of illicit drugs out of South America, especially cocaine, because of the country's porous border with Colombia, economic crisis, weak judicial system, sporadic international counternarcotics cooperation, and permissive and corrupt environment. The report notes the following:", "Cocaine is trafficked via aerial, terrestrial, and maritime routes, with most drug flights departing from Venezuelan states bordering Colombia and maritime trafficking that includes the use of large cargo containers, fishing vessels, and \"go-fast\" boats. Maritime trafficking may have increased in 2017. The vast majority of drugs transiting Venezuela in 2017 were destined for the Caribbean, Central America, the United States, West Africa, and Europe. Colombian drug-trafficking organizations\u2014including multiple criminal bands, the FARC, and the National Liberation Army (ELN)\u2014facilitate drug transshipment through Venezuela. Mexican drug-trafficking organizations also operate in the country. Despite a nearly 134% increase in coca cultivation from 2013 to 2016 and a more than 200% increase in potential cocaine production in Colombia, the report states that Venezuelan antidrug forces seized only 32 metric tons (MT) of drugs in the first six months of 2016 (the most recent data available), compared to 66 MT in the first eight months of 2015. They also reported seizing two cocaine labs in the state of Zulia in August 2017. \"Venezuelan authorities do not effectively prosecute drug traffickers, in part due to political corruption,\" but Venezuelan law enforcement officers also \"lack the equipment, training, and resources required to impede the operations of major drug trafficking organizations.\" Venezuela and the United States continue to use a 1991 bilateral maritime agreement to cooperate on interdiction. In 2016, Venezuela worked with the U.S. Coast Guard in six maritime drug interdiction cases (down from 10 in 2015).", "In addition to State Department reports, a report by Insight Crime entitled Drug Trafficking Within the Venezuelan Regime: the Cartel of the Suns describes in detail how the Venezuelan military, particularly the National Guard, has been involved in the drug trade since 2002. It names officials who have been sanctioned or accused of drug trafficking-related crimes, as well as others for whom there is significant evidence of their involvement in the drug trade. Insight Crime also has documented how the Cartel of the Suns has interacted with illegally armed groups and drug traffickers in Colombia, trafficked cocaine through the Dominican Republic and Honduras, and engaged in corruption with politicians and businesses in El Salvador.", "Recent cases in the United States also demonstrate the involvement of high-level Venezuelan officials or their relatives in international drug trafficking. President Maduro either has dismissed those cases or appointed the accused to Cabinet positions, where they presumably will be protected from extradition. Some observers have maintained that it may therefore be difficult to persuade officials to leave office through democratic means if, once out of power, they likely would face extradition and prosecution in the United States. ", "On August 1, 2016, the U.S. Federal Court for the Eastern District of New York unsealed an indictment from 2015 against two Venezuelans for cocaine trafficking to the United States. The indictment alleged that General N\u00e9stor Luis Reverol Torres, former general director of Venezuela's National Anti-Narcotics Office (ONA) and former commander of Venezuela's National Guard, and Edylberto Jos\u00e9 Molina, former subdirector of ONA, participated in drug-trafficking activities from 2008 through 2010. President Maduro responded by appointing General Reverol as Minister of Interior and Justice in charge of the country's police forces. ", "In December 2017, two nephews of First Lady Cilia Flores\u2014Franqui Francisco Flores de Freitas and Efra\u00edn Antonio Campo Flores\u2014were sentenced to 18 years in a U.S. federal prison for conspiring to transport cocaine into the United States. The two nephews had been arrested in Haiti in November 2015 and convicted in the United States in November 2016.", "The Department of the Treasury has imposed sanctions on at least 22 individuals and 27 companies with connections to Venezuela for narcotics trafficking by designating them as Specially Designated Narcotics Traffickers pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act, P.L. 106-120 , Title VIII; 21 U.S.C. 1901 et seq.). On February 13, 2017, the Department of the Treasury imposed drug-trafficking sanctions against then-Vice President Tareck el Aissami and an associate. "], "subsections": []}, {"section_title": "Money Laundering", "paragraphs": ["In addition to drug trafficking, the 2018 INCSR discusses Venezuela's high level of vulnerability to money laundering and other financial crimes. According to the report, money laundering is widespread in the country and is evident in industries ranging from government currency exchanges to banks to real estate to metal and oil. Venezuela's currency-control system requires individuals and firms to purchase hard currency from the government's currency commission at a fixed exchange rate, which has created incentives for trade-based money laundering. ", "Venezuela revised its laws against organized crime and terrorist financing in 2014 but excluded the government and state-owned industries from the scope of any investigations. The unit charged with investigating financial crimes has \"limited operational capabilities,\" and there is a lack of political will in the judicial system to combat money laundering and corruption. The 2018 INCSR concludes that Venezuela's \"status as a drug transit country, combined with weak AML supervision and enforcement, lack of political will, limited bilateral cooperation, an unstable economy, and endemic corruption\" make the country vulnerable to money laundering. As an example, in mid-June 2018, a U.S. district judge sentenced the Florida owners of a construction equipment export company who had been found guilty of laundering and transferring $100 million from Venezuela to bank accounts in the United States and other countries.", "On September 20, 2017, the Department of the Treasury's Financial Crimes Enforcement Network advised U.S. financial institutions to report any suspicious financial transactions that could have a nexus with Venezuela. The advisory urges U.S. institutions to exercise increased scrutiny over transactions that may involve lesser-known state-owned enterprises connected to the government. It also warns that recent sanctions against Venezuelan officials could \"increase the likelihood that other non-designated Venezuelan senior political figures may seek to protect their assets.\""], "subsections": []}, {"section_title": "Illegal Mining", "paragraphs": ["Although more than 95% of Venezuela's export revenue comes from oil and gas exports, gold mining, both licit and illicit, has accelerated as the country's economy has collapsed in the face of low global oil prices and an ongoing political crisis. According to the Global Initiative against Transnational Organized Crime, 91% of gold produced in Venezuela was mined illegally\u2014the highest rate in Latin America, even prior to the current crisis. Over the past three years, a boom in illegal mining in Venezuela reportedly has contributed to deforestation and environmental degradation in indigenous areas, clashes between rival criminal gangs and violence committed by those gangs against miners whom they extort, and an outbreak of malaria (a disease that had been eradicated). According to numerous reports, the illegal mining industry also commits various human rights violations, reportedly including the forcible recruitment of child labor from the indigenous Yanomami tribe. "], "subsections": []}, {"section_title": "Colombian Illegally Armed Groups Operating in Venezuela", "paragraphs": ["Illegally armed groups are active on both sides of the Colombia-Venezuelan border. Former Colombian paramilitaries (the Rastrojos), reportedly control important gasoline smuggling routes between Venezuela and Colombia. National Liberation Army (ELN) guerrillas from Colombia have sought to control illicit gold mining areas near the Colombia-Guyana border. Both the ELN, which is still engaged in armed conflict with the Colombian government, and its rival, the Popular Liberation Army (EPL) reportedly recruit Venezuelans to cultivate coca. Human trafficking and sexual exploitation of Venezuelan migrants is prevalent in Colombia and border regions straddling the countries. Finally, experts assert that dissident FARC guerrillas are using border areas to regroup; they may also be coordinating efforts with the ELN. ", "Violence among these groups and between the groups and the Venezuelan government has escalated, threatening security on both sides of the border. Conflict between the ELN and the EPL over control of the cocaine trade led to an August 2018 daytime shootout in a town on the Colombian side of the border in which eight people died. Since early 2018, Freddy Bernal, an official on the U.S. Kingpin List who allegedly supplied arms to the FARC, has served as head of security in T\u00e1chira state bordering Colombia. After Bernal ordered an elite police unit to arrest members of the Rastrojos, the group attacked a Venezuelan military base in October 2018, killing three soldiers. The ELN reportedly killed three Venezuelan national guardsmen in Amazonas state in November 2018. As this violence has occurred, Colombia has also protested periodic crossings into its territory by Venezuelan troops."], "subsections": []}]}, {"section_title": "Terrorism", "paragraphs": ["The Secretary of State has determined annually, since 2006, that Venezuela has not been \"cooperating fully with United States antiterrorism efforts\" pursuant to Section 40A of the Arms Export Control Act (AECA). Per the AECA, such a designation subjects Venezuela to a U.S. arms embargo, which prohibits all U.S. commercial arms sales and retransfers to Venezuela. The most recent determination was made in May 2018.", "In 2008, the Department of the Treasury imposed sanctions (asset freezing and prohibitions on transactions) on two individuals and two travel agencies in Venezuela for providing financial support to Hezbollah, which the Department of State has designated a Foreign Terrorist Organization. The action was taken pursuant to E.O. 13224, aimed at impeding terrorist funding.", "The State Department's most recent annual terrorism report, issued in September 2018, stated that \"country's porous borders offered a permissive environment to known terrorist groups.\" Unlike in years past, the report did not identify any specific terrorist groups or sympathizers present in the country. This designation would trigger an array of sanctions, including aid restrictions, requirement for validated export licenses for dual-use items, and other financial restrictions. Critics caution there is a lack of evidence to conclude that the Venezuelan government has \"repeatedly provided support for acts of international terrorism,\" as required by law."], "subsections": []}, {"section_title": "Energy Sector Concerns and Potential U.S. Sanctions194", "paragraphs": ["Petroleum trade between the United States and Venezuela is bilateral, although heavily weighted toward Venezuelan crude oil exports to U.S. refiners. Traditionally, Venezuela has been a major supplier of crude oil imports into the United States, but the amount, value, and relative share of U.S. oil imports from Venezuela declined in recent years. In 2017, Venezuela was the fourth-largest foreign supplier of crude oil to the United States (behind Canada, Saudi Arabia, and Mexico), providing an average of 618,000 b/d, down from 1.5 million b/d in 2015 (see Figure 5 ). U.S. oil imports from Venezuela have continued to decline in 2018 to a reported annual average of roughly 500,000 b/d, the lowest since 1989. ", "Oil is by far Venezuela's major export to the United States. According to U.S. trade statistics, Venezuela's oil exports to the United States were valued at $11.7 billion in 2017, accounting for 95% of Venezuela's exports to the United States. This figure is down from $29 billion in 2014, reflecting the steep decline in the price of oil. ", "In addition to importing crude oil from Venezuela, the United States also exports light crude oil and other product inputs to Venezuela needed to blend with and refine Venezuelan heavy crude oil. About half of U.S. exports to Venezuela consist of light crude oil and other oil product inputs.", "The decline in U.S. imports of oil from Venezuela is driven by a number of factors, including Venezuela's decreased production and increased U.S. oil imports from Canada. U.S. sanctions also are making oil imports from Venezuela more difficult. Under the sanctions, U.S. partners can extend new credit to PdVSA for up to 90 days only. PdVSA has dealt with its fiscal problems by delaying payments and paying service providers with promissory notes in lieu of payments. There are concerns that delayed payments and promissory notes would count as new credit and, if their maturity exceeds 90 days, would violate sanctions. These payment issues have contributed to the slowdown in oil production, although they have not halted it.", "Various sanction options on Venezuela's petroleum sector reportedly have been considered by the Trump Administration as a potential means of applying economic pressure on the Maduro government. Generally, the economic impact of sanctions will depend on the timing (e.g., immediate versus phased) of each option as well as whether or not such sanctions are unilateral (i.e., U.S. only) or multilateral (i.e., U.S. cooperation with other countries). The greatest impact could come from prohibiting Venezuelan petroleum exports to the United States, the largest element of petroleum trade between the countries. ", "From Venezuela's perspective, the country would lose access to a close-proximity market that provides much-needed cash flow to the government. Venezuela would need to find alternative markets for these crude volumes, with India and China being likely destinations. Initially, in order to sell crude to alternative markets, Venezuelan oil may need to be price discounted. The magnitude of this discount is uncertain, and the financial impact would depend on the prevailing market price of crude oil at the time such a prohibition might be introduced.", "U.S. oil refiners also would be affected by a prohibition on Venezuelan oil imports. Initially, prices for substitute crude oils likely would rise to attract alternative sources of supply (e.g., Canada and Iraq). Although a limited number of U.S. refiners acquire crude oil from Venezuela, any crude oil price increase likely would impact all refiners. U.S. oil producers, however, would benefit financially from an increase in oil prices."], "subsections": []}, {"section_title": "U.S. Support for Organization of American States Efforts on Venezuela", "paragraphs": ["Over the past three years, the U.S. government has supported the organization's efforts under Secretary General Luis Almagro to address the situation in Venezuela. Although the United States' ability to advance its policy initiatives within the OAS generally has declined as Latin American governments have adopted more independent foreign policy positions, OAS efforts on Venezuela have complemented U.S. objectives. (See Appendix B for details on OAS efforts.) ", "OAS Secretary General Almagro (who assumed his position in May 2015) has spoken out strongly about the situation in Venezuela. On May 31, 2016, the Secretary General invoked the Inter-American Democratic Charter, Article 20\u2014a collective commitment to promote and defend democracy\u2014when he called on the OAS Permanent Council to convene an urgent session on Venezuela to decide whether \"to undertake the necessary diplomatic efforts to promote the normalization of the situation and restore democratic institutions.\" He issued a report on the political and economic situation in Venezuela, concluding that there were \"serious disruptions of the democratic order\" in the country. The Permanent Council received the report, but struggled until mid-2018 to achieve consensus on how to respond to the evolving crises. ", "In March 2017, OAS Secretary General Almagro issued a new report to the Permanent Council, which called on the Venezuelan government to undertake a series of measures to resume the constitutional order, or face a suspension from the OAS. It called on OAS member states to apply Article 21 of the Inter-American Democratic Charter to suspend Venezuela from the organization if the Venezuelan government failed to address the report recommendations positively within 30 days. An affirmative vote of two-thirds of the member states (23) in a special session of the General Assembly would be necessary to suspend Venezuela from the organization. ", "Although a suspension would demonstrate Venezuela's diplomatic isolation, it is unclear whether it would affect the Maduro government's policies. In May 2017, President Maduro instructed his foreign minister to begin the process for Venezuela to withdraw from the OAS in protest of its recent actions, the first time in OAS history that a country has sought to quit. The withdrawal process, which takes two years, would require Venezuela to pay $8.8 million in back dues. ", "Despite the deteriorating situation in Venezuela, some countries were reluctant in 2017 to follow Almagro's lead in responding to the situation in Venezuela. During the OAS General Assembly meeting in June 2017, 20 countries voted in favor of adopting a resolution to press the Venezuelan government to take concrete actions, but it failed because it needed 23 votes.", "In the absence of consensus within the General Assembly, Secretary General Almagro continued to speak out against actions taken by the Maduro government. He issued a report in July 2017 describing abuses committed by the government against protesters and another in September 2017 denouncing the consolidation of Venezuela's \"dictatorial regime\" with the formation of the Constituent Assembly. The Secretary General initiated a process to analyze whether the Maduro government's abuses against its citizens constitute crimes against humanity meriting a referral to the ICC. The process culminated in the May 29, 2018 publication of a report with information gathered by the General Secretariat backed by a legal assessment by independent jurists that the Maduro government's actions merit a referral to the ICC. Although some observers have praised Secretary-General Almagro's outspoken activism on Venezuela, others have asserted that he and the OAS are unlikely to be trusted by anyone in the Maduro government as a mediator that could help resolve the current crisis. ", "Since the May 2018 election, a majority of countries within the OAS Permanent Secretariat have voted against the Maduro government. On June 5, 2018, it approved a resolution declaring that the May 20, 2018, electoral process in Venezuela \"lacks legitimacy\" and authorizing countries to take \"measures deemed appropriate,\" including financial sanctions, to assist in hastening a return to democracy in Venezuela. On January 10, 2019, the Permanent Council approved a resolution agreeing \"to not recognize the legitimacy of Nicolas Maduro's new term.\" Secretary-General Almagro has gone further, announcing over social media that he \"welcomes the assumption of Juan Guaid\u00f3 as interim President of Venezuela in accordance with Article 233 of the Venezuelan constitution\" on January 11, 2019. "], "subsections": []}]}, {"section_title": "Outlook", "paragraphs": ["For some time, analysts have debated how long President Maduro can retain his grip on power amid a deepening economic and humanitarian crisis and how best to help hasten a return to electoral democracy in Venezuela. Despite his reelection and inauguration to a second term, President Maduro faces increasing threats to his control over the country. Under the leadership of a little-known figure, Juan Guaid\u00f3 of the VP party, the National Assembly has issued a direct challenge to the legitimacy of Maduro's presidency. Maduro still controls the military, but recent arrests of high-level military officials have signaled dissent within the forces. It remains to be seen how they will respond to the National Assembly's approval of a framework for the formation of a transition government and an amnesty law for any military members who support that transition. It is yet unclear whether and under what circumstances Juan Guaid\u00f3 would accept calls for him to declare himself interim president and how Maduro and the international community would respond to such a development.", "The Trump Administration has worked bilaterally and multilaterally to increase pressure on the Maduro government while also providing assistance to neighboring countries hosting more than 3 million Venezuelans who have fled the country. In addition to ratcheting up targeted sanctions, the Administration has implemented broader sanctions limiting Venezuela and PdVSA's access to the U.S. financial market. Until now, the Administration had stopped short of implementing even stronger measures, such a ban on petroleum trade with Venezuela, partially out of concern that this could worsen the country's humanitarian crisis. Vice President Pence and Secretary of State Pompeo have condemned Maduro's term as illegitimate, recognized the National Assembly as the only legitimate institution in the country, and lent support to Juan Guaid\u00f3 and the National Assembly. While some have urged the Administration to take more aggressive measures even though they could contribute to unrest in the country, others have maintained that support for a negotiated solution is the best course of action.", "The 116 th Congress may consider a number of measures to address the deteriorating situation in Venezuela and its impact on the broader Latin American region. Congress is likely to continue to fund and oversee foreign assistance for democracy and human rights programs to bolster civil society in Venezuela as well as humanitarian assistance to Venezuelans in neighboring countries. Congress could consider a measure to authorize U.S. humanitarian assistance as well. Other measures may be introduced to adjust the immigration status of Venezuelans living in the United States or to provide certain Venezuelans temporary protected immigration status. Congress may consider taking additional steps to try to influence the Venezuelan government's behavior in promoting a return to democracy through additional sanctions or other policies. Oversight issues may examine the role of external actors operating in Venezuela (such as Russia and China) and the impact of the crisis in Venezuela on the broader region. Should a change in government occur, Congress may authorize additional support for reconstruction of the country.", "Appendix A. Legislative Initiatives in the 115 th Congress", "Enacted Legislation and Approved Resolutions", "P.L. 115-31 ( H.R. 244 ). Consolidated Appropriations Act, 2017. Introduced January 4, 2017, as the Honoring Investments in Recruiting and Employing American Military Veterans Act of 2017; subsequently, the bill became the vehicle for the FY2017 appropriations measure known as the Consolidated Appropriations Act, 2017. House agreed to Senate amendments (309-118) May 3, 2017; Senate agreed to House amendment to Senate amendments (79-18) May 4, 2017. President signed into law May 5, 2017. The explanatory statement accompanying the law recommends providing $7 million in democracy and human rights assistance to Venezuelan civil society. ", "P.L. 115-141 ( H.R. 1625 ). Consolidated Appropriations Act, 2018 . Originally introduced March 20, 2017, as the Targeted Rewards for the Global Eradication of Human Trafficking Act, in March 2018, the bill became the vehicle for the FY2018 omnibus appropriations measure known as the Consolidated Appropriations Act, 2018. House agreed (256-167) to an amendment to the Senate amendment March 22, 2018; Senate agreed (65-32) to the House amendment to the Senate amendment March 23, 2018. President signed into law March 23, 2018. The law requires not less than $15 million in democracy and rule of law assistance to Venezuelan civil society.", "P.L. 115-232 ( H.R. 5515 ). John S. McCain National Defense Authorization Act for Fiscal Year 2019 . Introduced April 13, 2018. House passed (351-66) May 24, 2018. Senate passed (85-10) June 18, 2018, substituting the language of S. 2987 , the John S. McCain National Defense Authorization Act for Fiscal Year 2019. Conference report ( H.Rept. 115-874 ) filed July 25, 2018; House agreed (359-54) to the conference July 26 and Senate agreed (86-10) August 1, 2018. Signed into law August 13, 2018. ", "In the conference report, the conferees directed the Director of the Defense Intelligence Agency to submit a report to several key committees on security cooperation between the Russian Federation and Cuba, Nicaragua, and Venezuela.", "H.Res. 259 (DeSantis) . Introduced April 6, 2017; reported out of the House Foreign Affairs Committee July 27, 2017, approved by the House December 5, 2017. The resolution expressed concern about the multiple crises that Venezuela is facing; urged the Venezuelan government to hold elections, release political prisoners, and accept humanitarian aid; supported OAS efforts, including a potential temporary suspension of Venezuela from the organization if the government does not convene elections and release political prisoners in a timely manner; and encouraged President Trump to prioritize resolving the crisis in Venezuela, including through the use of targeted sanctions. ", "S.Res. 35 (Cardin) . The resolution expresses support for a dialogue that leads to respect for Venezuela's constitutional mechanisms and a resolution to the multiple crises the country faces, as well as for OAS efforts to invoke the Inter-American Democratic Charter. The resolution urges full U.S. support for OAS efforts and calls for U.S. agencies to hold Venezuelan officials accountable for violations of U.S. law and international human rights standards. Introduced February 1, 2017. Agreed to in the Senate February 28, 2017. ", "Select Additional Legislative Initiatives", "H.R. 2658 (Engel) . Venezuela Humanitarian Assistance and Defense of Democratic Governance Act of 2017. Introduced May 25, 2017; amended and reported out of the House Foreign Affairs Committee September 28, 2017; approved by the House on December 5, 2017. The bill would have", "directed the State Department and USAID to deliver a strategy within 90 days of the enactment of the act on how they will work through NGOs in Venezuela or in neighboring countries to channel basic medical supplies and services, food and nutritional supplements, and related technical assistance needed to assist the Venezuelan people; supported OAS efforts to invoke the Inter-American Democratic Charter; secured a Presidential Statement from the United Nations urging the Government of Venezuela to allow the delivery of humanitarian relief; required a report by the Secretary of State, acting through the Bureau of Intelligence and Research, on Venezuelan officials involved in grand corruption, and encourage the imposition of sanctions on those individuals; amended P.L. 113-278 to broaden the activities for which Venezuelans can be sanctioned to include engaging in undemocratic practices or public corruption, extend the date for imposing sanctions through 2022, and urge the Administration to encourage other countries to sanction those individuals; expressed the sense of the House that the President should take all necessary steps to prevent Rosneft from gaining control of U.S. energy infrastructure. required a strategy within 90 days on how U.S. assistance would be coordinated with those of other donors; called on the United States to advocate and, if possible, support an OAS election observation mission to Venezuela when it is appropriate; and required a report on other countries' activities in Venezuela (Russia, China, Iran, and Cuba) within 180 days of enactment. ", "S. 1018 (Cardin) Venezuela Humanitarian Assistance and Defense of Democratic Governance Act of 2017. S. 1018 was introduced May 3, 2017; referred to the Committee on Foreign Relations. This bill would have included many of same provisions as H.R. 2658 . ", "In addition to requiring a strategy on how U.S. humanitarian assistance would be coordinated, S. 1018 would have", "authorized $10 million in humanitarian assistance for Venezuela and would require the Secretary of State to provide a strategy on how that assistance would be provided; authorized $9.5 million for coordinated democracy and human rights assistance after the Secretary of State submits a strategy on how the funds would be implemented and would make $500,000 available to support any future OAS electoral missions to the country; and prioritized continued U.S. support to Caribbean countries that have been dependent on Venezuela for energy.", "S. 3486 (Menendez) Venezuela Humanitarian Relief, Reconstruction, and Rule of Law Act of 2018. S. 3486 contains many of the same provisions of H.R. 2658 . Introduced December 12, 2018, referred to the Committee on Foreign Relations.", "In addition to requiring a strategy on how U.S. humanitarian assistance would be coordinated, the bill would have", "authorized $40 million in additional humanitarian assistance and required the State Department to convene a donor's conference on Venezuela; provided support for international efforts to hold Venezuelan officials accountable for crimes against humanity; authorized $15 million for democratic actors and civil society; required the Departments of State, Treasury, and Justice to lead international efforts to recover assets stolen by corrupt Venezuelan officials; advanced planning for the economic reconstruction of Venezuela, contingent upon a change in governance in the country; required more intelligence reporting on Venezuelan officials' roles in drug trafficking and corruption, as well as the role of foreign actors in Venezuela; expanded U.S. sanctions on government officials, drug trafficking, and money laundering; required the State Department to work with other Latin American governments to develop their own sanctions regimes; and, codified existing crypto currency sanctions.", "Appendix B. Organization of American States Action on Venezuela", "On May 31, 2016, Organization of American States (OAS) Secretary-General Luis Almagro invoked the Inter-American Democratic Charter\u2014a collective commitment to promote and defend democracy\u2014when he called (pursuant to Article 20) on the OAS Permanent Council to convene an urgent session on Venezuela to decide whether \"to undertake the necessary diplomatic efforts to promote the normalization of the situation and restore democratic institutions.\" Secretary-General Almagro issued a report concluding that there were \"serious disruptions of the democratic order\" in the country. The Permanent Council met on June 23, 2016, to receive the report, but did not take any further action.", "A group of 15 OAS member states issued two statements (in June and August 2016) supporting dialogue efforts but also urging the Venezuelan government to allow the recall referendum process to proceed. On November 16, 2016, the OAS Permanent Council adopted a declaration that encouraged the Maduro government and the MUD \"to achieve concrete results within a reasonable timeframe\" and to \"avoid any action of violence\" that could threaten the process. ", "As dialogue efforts failed to advance, many observers contended that the Maduro government had used such efforts as a delaying tactic. Secretary-General Almagro published a second report to the Permanent Council in March 2017 calling on the Venezuelan government to undertake measures to resume the constitutional order, including holding general elections without delay, or face a possible suspension from the OAS. It concluded by calling on OAS member states to apply Article 21 of the Inter-American Democratic Charter to suspend Venezuela from the organization if the Venezuelan government fails to address the report recommendations positively. An affirmative vote of two-thirds of the member states (23) in a special session of the General Assembly would be necessary to suspend Venezuela from the organization. ", "In the aftermath of the Supreme Court's March 2017 action, the Permanent Council met in a special meeting called by 20 OAS members on April 3, 2017, and approved a resolution by consensus expressing \"grave concern regarding the unconstitutional alteration of the democratic order\" in Venezuela. The body also resolved to undertake additional diplomatic initiatives as needed \"to foster the restoration of the democratic institutional system.\" ", "On April 26, 2017, the OAS Permanent Council voted to convene a meeting of the region's ministers of foreign affairs to discuss the situation in Venezuela. Nineteen countries voted in favor of convening the meeting. However, some countries objected to potential statements or actions (such as a temporary suspension from the OAS) opposed by the Venezuelan government based on the organization's principles of nonintervention and respect for national sovereignty. ", "On May 31, 2017, the OAS convened a meeting of consultation of ministers of foreign affairs to discuss the situation in Venezuela. After much debate, the foreign ministers failed to approve a resolution to address the crisis. Some countries supported a draft resolution put forth by Canada, Panama, Peru, Mexico, and the United States, which called upon the Venezuelan government and the opposition to take a series of steps but also offered humanitarian assistance and willingness to create a \"group or other mechanism of facilitation to support a new process of dialogue and negotiation.\" Other countries supported a resolution offered by the Caribbean Community (CARICOM) calling for dialogue and the creation of an external group to support dialogue between the government and the opposition without the specific preconditions on the government included in the other draft resolution. OAS member states were unable to reach consensus.", "Foreign ministers reconvened during the OAS General Assembly in Mexico in June 2017. At those meetings, 20 countries voted in favor of adopting the aforementioned resolution put forth by Peru (and backed by the United States) on Venezuela, six countries voted no, and eight abstained. The foreign ministers could reconvene to continue that meeting at any time. ", "In September and November 2017, the OAS General Secretariat facilitated public hearings chaired by an International Panel of Experts it invited to analyze whether the Maduro government had committed crimes against humanity. Victims, legislators, mayors, judges, members of the armed forces, civil servants, human rights defenders and others participated.", "On February 23, 2018, 19 of 34 member states voted in favor of a resolution by the Permanent Council calling on the Venezuelan government to reconsider convening early presidential elections and to accept humanitarian assistance. While the resolution received more than the simple majority of votes (18) needed to be approved, 15 countries voted against the resolution, abstained, or were not present.", "On May 29, 2018, the Panel of Experts convened by the OAS published its findings that \"reasonable grounds exist to believe that crimes committed against humanity have been committed in Venezuela\" in a report that has been submitted to the ICC.", "On June 5, 2018, 19 of 34 member states voted in favor of a resolution stating that the electoral process in Venezuela \"lacks legitimacy\" and authorizing countries to take \"the measures deemed appropriate,\" including sanctions, to assist in hastening a return to democracy in Venezuela.", "In September 2018, the OAS Secretary-General announced the creation of a new working group to analyze Venezuelan migration issues.", "From November 19-21, 2018 17 OAS member states sent representatives to examine humanitarian conditions along the Colombia-Venezuela border, including Ambassador Carlos Trujillo of the United States.", "On January 10, 2019, 19 of 34 member states voted \"to not recognize the legitimacy of Nicolas Maduro's new term as of the 10 th of January of 2019.\" The resolution also urged all Member States to adopt any measures they can to hasten a return to democracy in Venezuela, call for new presidential elections in Venezuela with international observers, respond to the humanitarian needs of Venezuelan migrants, and demand the release of political prisoners.", "Appendix C. Online Human Rights Reporting on Venezuela"], "subsections": []}, {"section_title": "", "paragraphs": [], "subsections": []}]}}
{"id": "R45261", "title": "The Black Lung Program, the Black Lung Disability Trust Fund, and the Excise Tax on Coal: Background and Policy Options", "released_date": "2019-01-18T00:00:00", "summary": ["The federal government pays benefits to coal miners affected by coal workers' pneumoconiosis (CWP, commonly referred to as black lung disease) and other lung diseases linked to coal mining in cases where responsible mine operators are not able to pay. In 2019, the monthly benefit for a miner with no dependents is $660.10. Benefits can be as much as $1,320.10 per month for miners with three or more dependents. Medical benefits are provided separately from disability benefits. Benefit payments and related administrative expenses in cases in which the responsible operators do not pay are paid out of the Black Lung Disability Trust Fund. The primary source of revenue for the trust fund is an excise tax on coal produced and sold domestically. If excise tax revenue is not sufficient to finance Black Lung Program benefits, the trust fund may borrow from the general fund of the Treasury.", "For 2018, the tax rates on coal were $1.10 per ton of underground-mined coal or $0.55 per ton of surface-mined coal, limited to 4.4% of the sales price. These rates were established in 1986. Starting in 2019, under current law, these tax rates are $0.50 per ton of underground-mined coal or $0.25 per ton of surface-mined coal, limited to 2% of the sales price. These are the rates that were set when the trust fund was established in 1977.", "The decline in the excise tax rates will likely put additional financial strain on a trust fund that already borrows from the general fund to meet obligations. The decline in domestic coal production, recent increases in the rate of CWP, and bankruptcies in the coal sector also contribute to the financial strain on the trust fund.", "The Black Lung Disability Trust Fund and associated excise tax on coal were established so that the coal industry, as opposed to taxpayers in general, would bear the burden associated with providing black lung benefits. Throughout its history, the Black Lung Disability Trust Fund has not raised revenues sufficient to meet obligations. As a result, at various points in time, Congress and the President have acted to increase the excise tax on coal, forgive or refinance trust fund debt, and modify black lung benefits eligibility. With the rate of the excise tax on coal reduced in 2019, the 116th Congress may again evaluate options for improving the fiscal condition of the Black Lung Disability Trust Fund, or other issues related to providing federal benefits to miners with black lung disease."], "reports": {"section_title": "", "paragraphs": ["T he federal government pays benefits to coal miners affected by coal workers' pneumoconiosis (CWP, commonly referred to as black lung disease) and other lung diseases linked to coal mining in cases where the responsible mine operators are not able to pay. Benefit payments and related administrative expenses are paid out of the Black Lung Disability Trust Fund. The primary source of revenue for the trust fund is an excise tax on coal produced and sold domestically. If excise tax revenue is not sufficient to finance Black Lung Program benefits, the trust fund may borrow from the general fund of the Treasury, which contains federal receipts not earmarked for a specific purpose.", "For 2018, the tax rates on coal were $1.10 per ton of underground-mined coal or $0.55 per ton of surface-mined coal, limited to 4.4% of the sales price. Starting in 2019, under current law, these tax rates are $0.50 per ton of underground-mined coal or $0.25 per ton of surface-mined coal, limited to 2% of the sales price. This decline in the excise tax rates will likely put additional financial strain on a trust fund that already borrows from the general fund to meet obligations. The decline in domestic coal production, recent increases in the rate of CWP, and bankruptcies in the coal sector also contribute to the financial strain on the trust fund.", "This report provides background information and policy options to help inform the debate surrounding the coal excise tax rate, and other considerations related to the Black Lung Disability Trust Fund. The report begins with an overview of the federal black lung program, providing information on black lung disease and benefits under the program. The report proceeds to examine Black Lung Disability Trust Fund revenues, focusing on the coal excise tax and its history. The report closes with a discussion of policy options, evaluating various revenue- and benefits-related policy options that could improve the fiscal outlook of the Black Lung Disability Trust Fund. "], "subsections": [{"section_title": "Federal Black Lung Program", "paragraphs": ["The Black Lung Disability Trust Fund is used to finance the payment of federal Black Lung Program benefits under Part C of the Black Lung Benefits Act (BLBA) when a responsible coal operator does not meet its obligations under the law to pay benefits. "], "subsections": [{"section_title": "Black Lung Disease", "paragraphs": ["Coal workers' pneumoconiosis (CWP, commonly referred to as black lung disease) is an interstitial lung disease caused by the inhalation of coal dust. Like in other types of pneumoconioses, the inhalation of coal dust results in the scarring of the lung tissue and affects the gas-exchanging ability of the lungs to remove carbon dioxide and take oxygen into the bloodstream. Exposure to coal dust over an extended period of time can lead to CWP and continued exposure can lead to the progression from the early stages of CWP referred to as \"simple CWP,\" to more advanced stages of scarring referred to as \"complicated CWP\" or progressive massive fibrosis (PMF). There is no cure for CWP and PMF. CWP can lead to loss of lung function, the need for lung transplantation, and premature death. CWP can be identified by observing light spots, or opacities, in x-ray images of the lungs and can be classified using guidelines established by the International Labour Organization (ILO). ", "Despite technological advances in mining dust control, mandatory chest x-rays for miners, free CWP surveillance offered to miners by the National Institute for Occupational Safety and Health (NIOSH), the enactment of numerous pieces of mine safety and health legislation, and the promulgation and enforcement of mine safety and health standards by the Mine Safety and Health Administration (MSHA), CWP persists in American coal miners, especially those in the Appalachian region. After reductions in rates of PMF in the 1990s, this advanced form of CWP has recently been found in Central Appalachia at rates not seen since the early 1970s. In 2017 researchers discovered, among coal miners mostly living in Kentucky and Virginia and served by three federally funded Black Lung Clinics in Virginia, what may be the largest cluster of PMF ever recorded. ", "This cluster of miners with PMF includes a relatively high number of miners with less than 20 years of mining experience as well as cases of PMF in current miners. The occurrence of this advanced stage of CWP in short-tenured and current miners is noteworthy since MSHA standards require that any miner with evidence of CWP be given the option, without loss of compensation or other penalty, to work in an area of the mining operation in which the average concentration of coal dust in the air is continuously maintained at or below an established level that is lower than the permissible exposure level for all miners with the goal of preventing the progression of CWP. "], "subsections": []}, {"section_title": "Federal Black Lung Program", "paragraphs": ["The federal Black Lung Program was created in 1969 with the enactment of Title IV of the Federal Coal Mine Health and Safety Act of 1969 (Coal Act, P.L. 91-173, later renamed the Federal Mine Safety and Health Act of 1977 by P.L. 95-164 ). Section 401 of the Coal Act provides the congressional justification for the federal Black Lung Program and cites the lack of benefits for disability and death caused by CWP provided by existing state workers' compensation systems as justification for the creation of a federal program. This section also states that the program is intended to be a cooperative effort between the federal government and the states. ", "The Coal Act also established mandatory safety and health standards for coal mines, including standards limiting exposure of miners to coal dust and giving miners with CWP the option of being moved, without loss of compensation or penalty, to an area of the mine with lower dust concentrations. The Coal Act was later amended by the Black Lung Benefits Act of 1972 (BLBA, P.L. 92-303)."], "subsections": []}, {"section_title": "Part B", "paragraphs": ["The Coal Act established Part B of the federal Black Lung Program to provide cash benefits to miners totally disabled due to CWP and to the survivors of miners who die from CWP. Part B only applies to cases filed on or before December 31, 1973. Part B benefits are paid out of general revenue and were initially administered by the Social Security Administration (SSA). Today, with the exception of a small number of pending appellate cases, Part B benefits are administered by the Department of Labor (DOL), Office of Workers' Compensation Programs (OWCP). "], "subsections": []}, {"section_title": "Part C", "paragraphs": ["The Coal Act established Part C of the Federal Black Lung Program for cases filed after December 31, 1973, and was later amended by the BLBA. Under Part C of the BLBA, all claims for benefits for disability or death due to CWP are to be filed with each state's workers' compensation system, but only if such systems have been determined by DOL as providing benefits that are equivalent to or greater than the cash benefits provided by the federal government under Part B of the BLBA and the medical benefits provided to disabled longshore and harbor workers under the federal Longshore and Harbor Workers' Compensation Act (LHWCA). If a state's workers' compensation system is not determined by DOL to meet these standards, then Part C benefits are to be paid by the each miner's coal employer, or, if no such employer is available to pay benefits, by the federal government. ", "In 1973, Maryland, Kentucky, Virginia, and West Virginia submitted their state workers' compensation laws to DOL for approval, but were denied. To date, no state workers' compensation system has been approved by DOL under Part C of the BLBA. "], "subsections": [{"section_title": "Operator Responsibility", "paragraphs": ["Because no state's workers' compensation system has been determined to be sufficient to pay benefits under Part C, each operator of an underground coal mine is responsible for the payment of benefits to that operator's miners. Operators are required to provide for these benefits either by purchasing insurance for benefits or through self-insurance approved by DOL.", "A self-insured operator is required to purchase an indemnity bond or provide another form of security (such as a deposit of negotiable securities in a Federal Reserve Bank or the establishment of a trust) in an amount specified by DOL. In order to be approved for self-insurance, federal regulations require that a mine operator have been in business for at least the three previous years and have average assets over the previous three years that exceed current liabilities by the sum of expected benefit payments and annual premiums on the indemnity bond.", "When a claim for benefits is approved, benefits are to be paid by the \"responsible\" operator, which is generally the last coal operator to employ the miner. If a company has acquired the assets of a mine operator, then that company is considered a \"successor operator\" and is responsible for the payment of claims related to the original operator."], "subsections": []}, {"section_title": "Federal Payment of Benefits and Expenses", "paragraphs": ["The federal government pays benefits in cases in which the responsible operator no longer exists and has no successor operator, or is unable to pay benefits. The federal government pays benefits when an operator has not made payment within 30 days of a determination of eligibility or when benefits are otherwise due to be paid. Initially, under Part C of the Coal Act, these federal benefits were paid out of general revenue. However, pursuant to the Black Lung Benefits Revenue Act of 1977 ( P.L. 95-227 ), these benefits are now paid from the Black Lung Disability Trust Fund established by this law and primarily financed by an excise tax on coal. If a responsible operator can later be identified, the trust fund is authorized by law to seek to recover from this operator the amount of benefits paid by the trust fund and any interest earned on these amounts. ", "The trust fund is also used for the following federal Black Lung Program-related expenses:", "the payment of benefits for miners whose last coal mine employment was before January 1, 1970; reimbursement to the Treasury for the costs of Part C benefits paid from general revenue before April 1, 1978, for periods of benefit eligibility after January 1, 1974; the repayment and payment of interest on advances made from the general fund to the trust fund; the payment of administrative expenses related to Part C of the BLBA and the coal excise tax incurred after March 1, 1978; and the reimbursement of coal operators who paid Part C benefits before April 1, 1978, for miners whose last coal mine employment ended before January 1, 1970."], "subsections": []}]}, {"section_title": "Eligibility for Black Lung Benefits", "paragraphs": ["A miner is eligible for benefits if that miner is totally disabled due to pneumoconiosis arising out of coal mine employment. The survivors of a miner are eligible for benefits if the miner's death was due to pneumoconiosis arising out of coal mine employment. ", "Benefits are only available to miners and their survivors. The BLBA defines a miner as", "any individual who works or has worked in or around a coal mine or coal preparation facility in the extraction or preparation of coal. Such term also includes an individual who works or has worked in coal mine construction or transportation in or around a coal mine, to the extent such individual was exposed to coal dust as a result of such employment.", "Thus, other workers who may be exposed to coal dust in their work, such as railroad workers or workers at coal-fired power plants are not eligible for benefits. Persons who live near coal mines or power plants are also not eligible for benefits even if they are exposed to coal dust. In addition, while a miner's family members may receive benefits as survivors and the number of family members can increase the amount of a miner's monthly benefits, family members may not claim benefits on their own due to exposure to coal dust in the home such as from cleaning the miner's soiled clothing. ", "The BLBA defines pneumoconiosis for the purposes of benefit eligibility as \"a chronic dust disease of the lung and its sequelae, including respiratory and pulmonary impairments, arising out of coal mine employment.\" The BLBA directs the Secretary of Labor to develop, through regulations, standards for determining if a miner is totally disabled due to pneumoconiosis or died due to pneumoconiosis. "], "subsections": [{"section_title": "Clinical and Legal Pneumoconiosis", "paragraphs": ["The federal Black Lung Program regulations provide that the definition of pneumoconiosis includes medical or \"clinical\" pneumoconiosis and statutory or \"legal\" pneumoconiosis. Clinical pneumoconiosis is defined as follows:", "\"Clinical pneumoconiosis\" consists of those diseases recognized by the medical community as pneumoconioses, i.e., the conditions characterized by permanent deposition of substantial amounts of particulate matter in the lungs and the fibrotic reaction of the lung tissue to that deposition caused by dust exposure in coal mine employment. This definition includes, but is not limited to, coal workers' pneumoconiosis, anthracosilicosis, anthracosis, anthrosilicosis, massive pulmonary fibrosis, silicosis or silicotuberculosis, arising out of coal mine employment.", "Legal pneumoconiosis is defined as ", "any chronic lung disease or impairment and its sequelae arising out of coal mine employment. This definition includes, but is not limited to, any chronic restrictive or obstructive pulmonary disease arising out of coal mine employment.", "Through these definitions, DOL has established that benefits are available not just to miners with CWP, but also to those miners with other respiratory diseases arising out of coal mine employment such as chronic obstructive pulmonary disease (COPD) even though these diseases are not pneumoconioses and may be linked to other factors unrelated to exposure to coal dust such as cigarette smoking."], "subsections": []}, {"section_title": "Eligibility Presumptions", "paragraphs": ["The BLBA contains five presumptions used to determine if a miner is eligible for black lung benefits. Three of these presumptions are \"rebuttable,\" meaning that, in the absence of any contrary evidence, eligibility is presumed. One presumption is \"irrebutable\" and eligibility for Black Lung program benefits is established if the statutory requirements of the presumption are met. Three of these presumptions apply to current Black Lung Program claims while two apply only to cases filed before the end of 1981. Table 1 provides a summary of the following five presumptions provided by the BLBA.", "1. A rebuttable presumption that the pneumoconiosis of a miner who was employed in mining for at least 10 years was caused by his or her employment. 2. A rebuttable presumption that the death of a miner who worked in mining for at least 10 years and who died of any respirable disease, was due to pneumoconiosis. This presumption does not apply to claims filed on or after January 1, 1982, the effective date of the Black Lung Benefits Amendments of 1981 ( P.L. 97-119 ). 3. An irrebuttable presumption that a miner with any chronic lung disease which meets certain statutory tests or diagnoses is totally disabled due to pneumoconiosis or died due to pneumoconiosis. 4. A rebuttable presumption that a miner employed in mining for at least 15 years, and who has a chest x-ray that is interpreted as negative with respect to certain statutory standards but who has other evidence of a totally disabling respiratory or pulmonary impairment, is totally disabled due to pneumoconiosis or died due to pneumoconiosis. This presumption may only be rebutted by the Secretary of Labor establishing that the miner does not or did not have pneumoconiosis or that the miner's respiratory or pulmonary impairment did not arise out of connection to mine employment. 5. A presumption that a miner who died on or before March 1, 1978, and who was employed in mining for at least 25 years before June 30, 1971, died due to pneumoconiosis, unless it is established that at the time of the miner's death, he or she was not at least partially disabled due to pneumoconiosis. This presumption does not apply to claims filed on or after June 29, 1982, which is 180 days after the effective date of the Black Lung Benefits Amendments of 1981. This presumption is not listed in the law as either rebuttable or irrebuttable."], "subsections": [{"section_title": "Affordable Care Act Amendments", "paragraphs": ["The Patient Protection and Affordable Care Act (commonly referred to as the Affordable Care Act (ACA), P.L. 111-148 ) included two provisions that amended the BLBA to reinstate one of the eligibility presumptions and a provision affecting survivors' benefits. The effect of these changes was to increase the opportunity to establish eligibility through the statutory presumptions and make it easier for certain survivors to receive benefits. ", "Pursuant to Section 202(a) of the Black Lung Benefits Amendments of 1981, the fourth presumption did not apply to cases filed on or after January 1, 1982. Section 1556(a) of the ACA removed the prohibition on applying the fourth presumption to cases filed on or after January 1, 1982. It is expected that this ACA provision will increase the number of miners eligible for benefits. ", "The BLBA provides that, for Part C claims, the survivors of a miner who was determined to be eligible to receive benefits at the time of his or her death are not required to file new claims for benefits or revalidate any claim for benefits, thus permitting the payment of survivors' benefits in these cases even if the miner's death was not caused by pneumoconiosis. Pursuant to Section 203(a)(6) of the Black Lung Benefits Amendments of 1981, this provision did not apply to claims filed on or after January 1, 1982. Section 1556(b) of the ACA removed from this provision the exception for claims filed on or after January 1, 1982. It is expected that this ACA provision will increase the number of survivors eligible for benefits. ", "The amendments to the BLBA provided in Section 1556 of the ACA apply to any claims filed under Part B or C of the act after January 1, 2005, that were pending on or after March 23, 2010, the date of enactment of the ACA."], "subsections": []}]}]}, {"section_title": "Black Lung Program Benefits", "paragraphs": [], "subsections": [{"section_title": "Medical Benefits", "paragraphs": ["Eligible miners receiving benefits under Parts B and C are entitled to medical coverage for their pneumoconiosis and related disability. This medical coverage is provided at no cost to the miner and can generally be obtained from the miner's choice of medical providers. "], "subsections": []}, {"section_title": "Disability Benefits", "paragraphs": ["Eligible miners are also entitled to cash disability benefits. The basic benefit rate is set at 37.5% of the basic pay rate at GS-2, Step 1, on the federal pay schedule without any locality adjustment. If the miner has one dependent (a spouse or minor child) the miner is eligible for a benefit of 150% of the basic benefit. A miner with two dependents is eligible for 175% of the basic benefit and a miner with three or more dependents is eligible for 200% of the basic benefit. Benefits may also be paid to the divorced spouse of a miner if the marriage lasted at least 10 years and the divorced spouse was dependent on the miner for at least half of the spouse's support at the time of the miner's disability. A child is considered a dependent until the child marries, or reaches age 18, unless the child is either disabled using the Social Security Disability Insurance (SSDI) definition of disability or is under the age of 23 and a full-time student. The benefit rates are adjusted whenever there are changes to the federal employee pay schedules, but are not separately adjusted to reflect changes in the cost of living. Table 2 provides the benefit rates for 2019. Benefits are offset by state workers' compensation or other benefits paid on account of the miner's disability or death due to pneumoconiosis. Part C benefits, but not Part B benefits, are considered workers' compensation for the purposes of reducing a miner's SSDI benefits.", "The total amount paid in cash disability benefits has fallen over time, as illustrated in Figure 1 . More is paid in cash disability benefits than is paid in medical benefits. "], "subsections": []}, {"section_title": "Survivors' Benefits", "paragraphs": ["Certain survivors of a miner whose death was due to pneumoconiosis are eligible for cash benefits. In the case of a surviving spouse or divorced spouse, the spouse's benefit is equal to what the miner would have received and is based on the number of dependents of the spouse as provided in Table 2 . If there is no surviving spouse, then benefits are awarded to the surviving minor children in equal shares. If there are no surviving minor children, then benefits can be paid to the miner's dependent parents or dependent siblings. If there are no eligible survivors, no benefits are paid upon the miner's death and benefits do not go to the miner's estate or to any other person, including a person named by the miner in a will. The number of miners and survivors receiving benefits has declined over time, as illustrated in Figure 2 ."], "subsections": []}]}]}, {"section_title": "Black Lung Disability Trust Fund Revenues", "paragraphs": ["The primary revenue source for the Black Lung Disability Trust Fund is a per-ton excise tax on coal. Historically, the coal excise tax has not generated enough revenue to meet the trust fund's obligations. Thus, additional funds have been provided from the general fund of the Treasury. The general fund includes governmental receipts not earmarked for a specific purpose, the proceeds of general borrowing, and is used for general governmental expenditures. "], "subsections": [{"section_title": "Excise Tax on Coal", "paragraphs": ["Internal Revenue Code (IRC) Section 4121 imposes the black lung excise tax (BLET) on sales or use of domestically mined coal. Generally, a producer that sells the coal is liable for the tax. Producers that use their own domestically mined coal, such as integrated utilities or steel companies, are also liable for the tax. ", "The tax rate depends on how coal is mined. Effective January 1, 2019, the tax on underground-mined coal is the lesser of (1) $0.50 per ton, or (2) 2% of the sale price. The tax on surface-mined coal is the lesser of (1) $0.25 per ton, or (2) 2% of the sales price. Before 2019, the tax rates were $1.10 per ton for coal from underground mines or $0.55 per ton for coal from surface mines, with the tax being no more than 4.4% of the sale price. In FY2017, $229 million was collected on coal mined underground (see Figure 3 ). Nearly all of this coal was taxed at the $1.10 per ton rate. In FY2017, $200 million was collected on surface-mined coal. Just over half of this coal was taxed at the $0.55 per ton rate, with the rest subject to the 4.4% of sales price maximum tax. ", "On January 1, 2019, the BLET rates declined to their current levels. The rates that took effect January 1, 2019, would also have taken effect if the Black Lung Disability Trust Fund had repaid, with interest, all amounts borrowed from the General Fund of the Treasury. ", "The tax is imposed on \"coal from mines located in the United States\" and does not apply to imported coal. The tax is designed to support the Black Lung Disability Trust Fund for domestic miners. Very little domestically consumed coal is imported.", "The BLET also does not apply to exported coal under the Export Clause of the United States Constitution. A credit or refund can be claimed if coal is taxed before it is exported. ", "Black lung excise tax collections have generally declined in recent years (see Figure 3 ). In FY2009, more than $650 million was collected from the BLET. In FY2017, collections were about $429 million. The decline in BLET collections follows the general decline in U.S. coal production. As the price of coal rose in the 2000s, coal mined underground tended to pay the tax at a fixed rate of $1.10 per ton, as opposed to paying 4.4% of the sales price. ", "In the years beyond 2018, coal excise tax receipts are expected to fall sharply, reflecting the decrease in the coal excise tax rate (see Figure 3 ). "], "subsections": [{"section_title": "Legislative History", "paragraphs": ["The excise tax on coal was established to help ensure the coal industry shared in the social costs imposed by black lung disease. Over time, the rate of the tax has been increased, in an effort to provide sufficient revenue to meet this objective. "], "subsections": [{"section_title": "Establishing an Excise Tax on Coal", "paragraphs": ["The Black Lung Benefits Revenue Act of 1977 ( P.L. 95-227 ) first imposed the Section 4121 excise tax on coal. When enacted, the tax was $0.50 per ton for coal from underground mines, and $0.25 per ton for coal from surface mines. The tax was limited to 2% of the sales price. The tax was effective for sales after March 31, 1978.", "Before P.L. 95-227 was enacted there was considerable debate surrounding how black lung benefits programs should be financed. Various mechanisms to shift the costs of the black lung benefits program to the coal industry and its customers were considered. These debates ultimately led to the establishment of the Black Lung Disability Trust Fund and the related excise tax on coal.", "There was also debate about how to structure the proposed tax. Some suggested a graduated tax, with higher rates imposed on coal with a higher British thermal unit (Btu) content, as such coal was believed to be more likely to cause black lung disease. There were concerns, however, that such a tax could be difficult to administer. Other proposals suggested that coal be subject to a uniform rate, with coal mined from underground deposits subject to a higher rate than other coal (including lignite). A concern with this approach was that coal prices vary substantially per ton for different types of coal (lignite is less expensive than anthracite), meaning that the tax as a percent of the sales price could differ substantially across different types of coal. One answer to this concern is to impose an ad valorem tax, or a tax based on the sales price. Another approach that was considered was to impose a \"premium rate\" at a level that would fully finance the Black Lung Disability Trust Fund, giving authority to the Department of Labor to adjust the fee as necessary. The tax as enacted was the lesser of the per-unit price or the ad valorem rate of 2%."], "subsections": []}, {"section_title": "Increasing the Rate of Tax", "paragraphs": ["In the early 1980s, it was observed that coal excise tax revenues were not sufficient to meet the trust fund's obligations. The Black Lung Benefits Revenue Act of 1981 ( P.L. 97-119 ) doubled the excise tax rates to $1.00 per ton for coal from underground mines, and $0.50 per ton for coal from surface mines, not to exceed 4% of the sales price. The higher rates were effective January 1, 1982. The doubled rates were temporary, and scheduled to revert to the previous rates on January 1, 1996. Further, the rates could be reduced earlier if the trust fund repaid all advances and interest from the general fund of the Treasury. A stated goal of this legislation was to eliminate the Black Lung Disability Trust Fund's debt.", "The Consolidated Omnibus Budget Reconciliation Act of 1985 ( P.L. 99-272 ) again increased the BLET rates to $1.10 for underground-mined coal, and $0.55 for surface-mined coal, not to exceed 4.4% of the sales price. The Omnibus Budget Reconciliation Act of 1987 ( P.L. 100-203 ) extended these rates through 2013. ", "Increased excise tax rates on coal were again extended in 2008. Current-law rates were extended through 2018 as part of the Emergency Economic Stabilization Act of 2008 (EESA; P.L. 110-343 ). When extending the increased rates, Congress reiterated the original intent of establishing trust fund financing for black lung benefits, observing that it is \"to reduce reliance on the Treasury and to recover costs from the mining industry.\" It was also observed that the program's expenses had continued to exceed revenues over time, and that the debt to the Treasury was not likely to be paid off by 2013. For these reasons, \"the Congress believe[d] that it [was] appropriate to continue the tax on coal at the increased rates beyond the expiration date.\""], "subsections": []}]}]}, {"section_title": "Borrowing and Debt", "paragraphs": ["When receipts of the trust fund are less than expenditures, advances are appropriated from the general fund of the Treasury to the trust fund. These advances are repayable, and interest charged on these advances is also payable to the general fund. The Consolidated Omnibus Budget Reconciliation Act of 1985 ( P.L. 99-272 ) provided a five-year forgiveness of interest on debt owed to the Treasury's general fund. As a result, the principal amount of trust fund debt outstanding was relatively unchanged throughout the late 1980s. The moratorium on interest payments ended September 30, 1990.", "Throughout the 1990s and into the 2000s, the cumulative end-of-year debt of the trust fund grew, and the trust fund continued to receive repayable advances from the general fund to cover expenses. The trust fund was subject to financial restructuring when the current excise tax rate was extended until January 1, 2019, in EESA. ", "The Black Lung Disability Trust Fund debt was restructured in FY2009. Essentially, the partial forgiveness and restructuring allowed the trust fund to refinance outstanding repayable advances and unpaid interest on those advances. As a result of the partial forgiveness and refinancing, the cumulative debt was reduced from $10.4 billion at the end of FY2008 to $6.2 billion by the end of FY2009. At the time of the restructuring it was expected that the trust fund's debt would be fully eliminated by FY2040. The trust fund's cumulative debt has trended downward since the restructuring (see Figure 4 ). However, coal excise tax revenue has been less than anticipated in recent years. As a result, current projections suggest that the trust fund debt will rise over time when considering annual borrowing as well as legacy debt. The trust fund's debt is therefore not on a path to be eliminated. By FY2050, the Government Accountability Office (GAO) projects the trust fund's debt will be $15.4 billion without any changes in current policy. "], "subsections": []}, {"section_title": "Other Revenue Sources", "paragraphs": ["In addition to revenue from the BLET and repayable general fund advances, the trust fund receives revenue from the collection of certain fines, penalties, and interest paid by coal operators and miners and reimbursements from responsible operators. "], "subsections": [{"section_title": "Fines, Penalties, and Interest", "paragraphs": ["Part C of the BLBA authorizes the following fines and penalties for violations of the act:", "a civil penalty of up to $1,000 per day for a mine operator's failure to secure benefits through insurance or approved self-insurance; a fine of up to $1,000 upon conviction of the misdemeanor offense of knowingly destroying or transferring property of a mine operator with the intent to avoid the payment of benefits for which the mine operator is responsible; a fine of up to $1,000 upon conviction of the misdemeanor offense of making a false or misleading statement or representation for the purposes of obtaining benefits; and a civil penalty of up to $500 for a mine operator's failure to file a report on miners who are or may be entitled to benefits as required by DOL.", "The amount of these penalties and fines, as well as interest assessed, is paid into the trust fund. In FY2017, trust fund receipts from fines, penalties, and interest totaled $1.2 million. This is a small source of trust fund revenue relative to the coal excise tax, which generated $428.7 million in trust fund revenues in FY2017. "], "subsections": []}, {"section_title": "Collection from Responsible Mine Operators", "paragraphs": ["The trust fund is authorized to begin paying benefits within 30 days if no responsible operator has begun payment. If, after paying benefits, DOL is able to identify a responsible operator, the trust fund may seek to collect from that operator the costs of benefits already paid by the trust fund and interest assessed on this amount. The amount of these collections is paid into the trust fund. In FY2017, $19.9 million was collected from responsible mine operators. The amount collected from responsible mine operators has fluctuated over time, but has averaged about 1% of total receipts since 1995. "], "subsections": []}]}]}, {"section_title": "Financial Condition and Outlook", "paragraphs": ["Various factors have contributed to the ongoing situation of trust fund expenditures exceeding trust fund revenues. Throughout the 1980s, black lung benefit payments and administrative expenditures exceeded trust fund revenue. As a result, the trust fund accumulated debt. As discussed above, over time, various efforts have been made to improve the fiscal condition of the trust fund. However, as of the end of FY2017, the trust fund remains in debt. The trust fund's cumulative debt at the end of FY2017 was $3.1 billion. The trust fund also borrowed $1.3 billion from the general fund that same year. ", "Projections suggest that borrowing from the general fund will increase over the next few years, even as cumulative (or legacy) debt is paid down. Under the current excise tax rates, benefit payments and administrative expenses will be approximately equal to trust fund revenues in FY2020 through FY2022 (see Figure 5 ). However, revenues are not projected to be sufficient to repay debt, and expenses are projected to rise over time when debt and interest expenses are included. Specifically, by FY2022, it is projected that the trust fund will borrow $2.6 billion in repayable advances from the general fund. "], "subsections": []}, {"section_title": "Policy Issues and Options", "paragraphs": ["There are various policy options that Congress might consider to improve the fiscal condition of the Black Lung Disability Trust Fund. Broadly, increasing taxes on the coal industry (or maintaining 2018 rates) would pass the costs associated with paying black lung benefits onto the coal industry. Alternatively, forgiving trust fund interest or debt or financing black lung benefits out of general fund revenues would pass the costs of federal black lung benefits onto taxpayers in general. Another option would be to reduce federal black lung benefits. "], "subsections": [{"section_title": "Revenue Options", "paragraphs": ["Additional revenue would likely need to be provided to the trust fund if the trust fund is to pay for past black lung benefits and maintain current benefit levels. Additional revenue may be needed even if past debt is forgiven (or assumed by the general fund), as anticipated trust fund revenues are not likely to be sufficient to cover anticipated trust fund expenditures. "], "subsections": [{"section_title": "Change the Coal Excise Tax", "paragraphs": ["As discussed above, in the past, Congress and the President have opted to increase the excise tax on coal to address shortfalls in the Black Lung Disability Trust Fund. These increased rates have been temporary, and scheduled to revert back to the reduced rate if the trust fund's debt is eliminated. Congress has chosen to extend the increased rates beyond their scheduled expiration when the trust fund is in debt. One option would be to extend 2018 rates.. The GAO projects that if 2018 coal excise tax rates are extended, the trust fund will have a debt of $4.5 billion in 2050 (see \"GAO Options for Improving Trust Fund Finances\" below). GAO projections suggest that increasing 2018 tax rates by 25% would eliminate the trust fund's debt, leaving the trust fund with a surplus of $0.6 billion in 2050. "], "subsections": []}, {"section_title": "Modify Coal Industry Tax Benefits", "paragraphs": ["An alternative way to raise revenue from the coal industry is to scale back or eliminate various tax expenditures, or tax preferences, from which the coal industry benefits. For example, coal producers benefit from being able to expense exploration and development costs and are able to recover costs using percentage depletion (depletion based on revenue from the sale of the mineral asset) instead of cost depletion (depletion based on the amount of the mineral asset exhausted and the amount invested in the asset). The Obama Administration regularly proposed repealing these tax incentives as part of the Administration's annual budget. ", "It could be difficult to assign the revenues raised via the repeal of tax benefits to the trust fund. With an excise tax, it is straightforward to identify the revenue generated by the tax and earmark the revenue for a trust fund. It is not as straightforward to determine the amount of revenue that is raised through the repeal of an income tax expenditure, or direct the additional revenue raised because a certain preference is no longer in the code to a trust fund. Repeal of coal-industry tax benefits could, however, be used to offset the cost of a one-time transfer from the general fund to the trust fund. "], "subsections": []}, {"section_title": "Provide Additional General Fund Revenue", "paragraphs": ["Revenue from various sources, including the general fund, could be used to supplement trust fund revenue generated from current sources. General fund revenues are not earmarked for a specific purpose, and there is generally no direct link between the source of general fund revenue and the government good or service provided. Black lung benefits were paid out of general revenue before the trust fund was established in 1977.", "Trust funds are generally established when there is a link between the government benefits or services being provided and the revenue source funding those benefits or services. The Black Lung Disability Trust Fund was established because Congress believed that the costs of the part C black lung program should be borne by the coal industry. Financing black lung benefits with general fund revenue would weaken the link between the industry and black lung benefits, while reducing the burden on the industry associated with paying for black lung benefits. "], "subsections": []}]}, {"section_title": "Forgive Trust Fund Interest or Debt", "paragraphs": ["In the past the Black Lung Disability Trust Fund's fiscal outlook has been improved through interest and debt forgiveness. As discussed above, in the late 1990s, there was a five-year forgiveness of interest on debt owed to the Treasury's general fund. More recently, debt was forgiven as part of the 2008 restructuring of the trust fund's debt. ", "The GAO projects that if all current debt were forgiven, the trust fund would accumulate $2.3 billion in new debt by 2050. If all interest were forgiven, the trust fund debt is projected to be $5.8 billion by 2050. Forgiving the trust fund's interest or debt obligations would shift the burden of paying for black lung disability benefits from the coal industry to general taxpayers. However, a one-time appropriation to forgive interest or debt is a transparent option for satisfying the trust fund's obligations to the general fund. "], "subsections": []}, {"section_title": "Expenditure Options", "paragraphs": ["The primary expenditures of the trust fund are for the payment of Part C benefits to miners in cases in which there is no responsible operator. In order to reduce expenditures and improve the long-term financial health of the trust fund, Congress could consider several options to reduce the generosity and scope of benefits or increase the ability of the federal government to ensure that coal operators, even those who are in the bankruptcy process, pay benefits for their miners. "], "subsections": [{"section_title": "Reduce Benefit Amounts", "paragraphs": ["A reduction in the amount of Part C benefits would result in lower Part C expenditures from both responsible coal operators and the trust fund. However, as compared to other workers' compensation benefits, Part C benefits are relatively low. The basic Part C benefit rate for a single miner is equal to 37.5% of the base rate of pay for federal employees at the GS-2, Step 1 level. For 2019 this benefit is just over $660 per month, or under $8,000 per year. In the majority of state workers' compensation programs, the basic benefit rate is set at two-thirds of the worker's pre-disability wage, subject to statutory minimums and maximums. The other workers' compensation programs administered by DOL, the LHWCA, and the Federal Employees' Compensation Act (FECA) use two-thirds of a worker's pre-disability wage as the basis for their benefits. A federal worker with a spouse or dependent in the FECA program is entitled to 75% of his or her pre-disability wage. The minimum benefit for total disability or death in the FECA program, 75% of GS-2, Step 1, is twice the amount of the Part C benefit rate. In addition, unlike the other federal workers' compensation programs and many state programs, there is no automatic adjustment to Part C benefits to reflect increases in the cost of living. Part C benefits instead increase only when federal pay rates are increased. "], "subsections": []}, {"section_title": "Restrict Benefit Eligibility", "paragraphs": ["The eligibility of miners and survivors to Part C benefits could be restricted to reduce expenditures from responsible operators and the trust fund. In 1981, Congress enacted several eligibility restrictions to miners and survivors as part of the Black Lung Benefits Revenue Act of 1981, to address concerns about the financial insolvency of the trust fund. Specifically, this law removed the following three eligibility presumptions for new claims going forward:", "A rebuttable presumption that the death of a miner who worked in mining for at least 10 years and who died of any respirable disease, was due to pneumoconiosis (listed as presumption 2 in Table 1 ). A rebuttable presumption that a miner employed in mining for at least 15 years, and who has a chest x-ray that is interpreted as negative with respect to certain statutory standards but who has other evidence of a totally disabling respiratory or pulmonary impairment, is totally disabled due to pneumoconiosis, or died due to pneumoconiosis. This presumption may only be rebutted by the Secretary of Labor establishing that the miner does not or did not have pneumoconiosis or that the miner's respiratory or pulmonary impairment did not arise out of connection to mine employment (presumption 4 in Table 1 ). A presumption that a miner who died on or before March 1, 1978, and who was employed in mining for at least 25 years before June 30, 1971, died due to pneumoconiosis, unless it is established that at the time of the miner's death, he or she was not at least partially disabled due to pneumoconiosis (presumption 5 in Table 1 ).", "In addition to removing three of the five existing eligibility presumptions, the 1981 law also removed the right of the survivors of a miner who is determined to be eligible for Part C benefits at the time of his or her death to receive survivors' benefits without filing a new claim, thus permitting the payment of survivors' benefits in the case of a current beneficiary, even if the beneficiary's death is not proven to be linked to pneumoconiosis. ", "Two of the restrictions put in place by the 1981 legislation were later removed by the ACA. The ACA reinstated the fourth eligibility presumption and expanded rights for survivors' benefits, thus expanding eligibility for both miners and certain survivors. "], "subsections": []}, {"section_title": "Increase the Ability of the Federal Government to Recover Benefit Costs from Responsible Operators", "paragraphs": ["Under Part C of the BLBA, the federal government may recover the costs of benefits, and interest accrued on those benefits, paid by the trust fund from identified responsible operators. In addition, Part C allows the federal government to place a lien on the property and rights to property of an operator that refuses to pay the benefits and interest it owes to the trust fund. In the case of a bankruptcy or insolvency proceeding, this lien is to be treated in the same manner as a lien for taxes owed to the federal government. ", "However, in a 2016 letter to the Comptroller General requesting a GAO review of the trust fund, Representatives Bobby Scott, Ranking Member of the House Committee on Education and the Workforce, and Sander Levin, Ranking Member of the House Committee on Ways and Means, claimed that the number of current and potential bankruptcies among coal operators is placing stress on the trust fund. Representatives Scott and Levin cited the example of Patriot Coal which, according to their letter, transferred $62 million in Part C liabilities to the trust fund when it became insolvent. In addition, this letter claims that insolvent coal operators may be able to avoid trust fund liens by continuing to make benefit payments until after the court in their bankruptcy cases has approved the sale of their assets to another company. Because the original company was never in default of its payments, no lien was filed, and these assets were able to be purchased by another company without any lien or future liability to the trust fund. ", "Congress may examine the issue of the impact of coal operator bankruptcies and the interaction of bankruptcy law and the BLBA's lien provisions, to strengthen both the federal government's ability to ensure that responsible operators are paying for benefits and reduce the benefit expenditures of the trust fund."], "subsections": []}]}]}]}}
{"id": "R44968", "title": "Infantry Brigade Combat Team (IBCT) Mobility, Reconnaissance, and Firepower Programs", "released_date": "2019-03-27T00:00:00", "summary": ["Infantry Brigade Combat Teams (IBCTs) constitute the Army's \"light\" ground forces and are an important part of the nation's ability to project forces overseas. The wars in Iraq and Afghanistan, as well as current thinking by Army leadership as to where and how future conflicts would be fought, suggest IBCTs are limited operationally by their lack of assigned transport and reconnaissance vehicles as well as firepower against hardened targets and armored vehicles.", "There are three types of IBCTs: Light, Airborne, and Air Assault. Light IBCTs are primarily foot-mobile forces. Light IBCTs can move by foot, by vehicle, or by air (either air landed or by helicopter). Airborne IBCTs are specially trained and equipped to conduct parachute assaults. Air Assault IBCTs are specially trained and equipped to conduct helicopter assaults.", "Currently, the Army contends IBCTs face a number of limitations", "The IBCT lacks the ability to decisively close with and destroy the enemy under restricted terrains such as mountains, littorals, jungles, subterranean areas, and urban areas to minimize excessive physical burdens imposed by organic material systems. The IBCT lacks the ability to maneuver and survive in close combat against hardened enemy fortifications, light armored vehicles, and dismounted personnel. IBCTs lack the support of a mobile protected firepower capability to apply immediate, lethal, long-range direct fires in the engagement of hardened enemy bunkers, light armored vehicles, and dismounted personnel in machine gun and sniper positions; with all-terrain mobility and scalable armor protection; capable of conducting operations in all environments.", "To address these limitations, the Army is undertaking three programs: the Ground Mobility Vehicle (GMV)/Infantry Squad Vehicle (ISV), formerly known as the Ultra-Light Combat Vehicle (ULCV); the Light Reconnaissance Vehicle (LRV); and the Mobile Protected Firepower (MPF) programs. These programs would be based on vehicles that are commercially available. This approach serves to reduce costs and the time it takes to field combat vehicles.", "The GMV/ISV is intended to provide mobility to the rifle squad and company. The LRV would provide protection to the moving force by means of scouts, sensors, and a variety of medium-caliber weapons, and the MPF would offer the IBCT the capability to engage and destroy fortifications, bunkers, buildings, and light-to-medium armored vehicles more effectively.", "The FY2020 Army GMV budget request for $37 million in procurement funding supports the procurement of 69 GMVs for the U.S. Army Special Operations Command and 15 ISVs for the Army. The FY2020 GMV Research, Development, Test & Evaluation (RDT&E) request is for $3 million to support operational testing. The Army did not submit a FY2020 budget request for the LRV program. The FY2020 Army MPF budget request for $310.152 million in RDT&E funding supports the continuation of rapid prototyping efforts and the completion of 24 prototypes.", "Potential issues for Congress include the future of the LRV effort; Security Force Assistance Brigades (SFABs) and GMV/ISV, LRV, and MPF requirements; and GMV/ISV, LRV, and MPF fielding plans."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Why Is This Issue Important to Congress?", "paragraphs": ["Infantry Brigade Combat Teams (IBCTs) constitute the Army's \"light\" ground forces and are an important part of the nation's ability to rapidly project forces overseas. The wars in Iraq and Afghanistan, as well as current thinking as to where and how future conflicts would be fought, suggest IBCTs are limited operationally by their lack of assigned transport and reconnaissance vehicles as well as firepower against hardened targets and armored vehicles.", "To address these limitations, the Army is undertaking three programs: the Ground Mobility Vehicle (GMV)/Infantry Squad Vehicle (ISV), formerly known as the Ultra-Light Combat Vehicle (ULCV); the Light Reconnaissance Vehicle (LRV); and the Mobile Protected Firepower (MPF) programs. These programs would be based on vehicles that are commercially available. This is in order to reduce costs and the time it takes to field combat vehicles associated with traditional developmental efforts.", "Congress may be concerned with the effectiveness of ground forces over the full spectrum of military operations. A number of past unsuccessful Army acquisition programs have served to heighten congressional oversight of Army programs, including nondevelopmental programs such as those currently being proposed for IBCTs. In addition to these primary concerns, how these new programs affect deployability and sustainability of IBCTs as well as affordability could be potential oversight issues for Congress. "], "subsections": []}, {"section_title": "Background", "paragraphs": ["Brigade Combat Teams (BCTs) are the basic combined-arms formations of the Army. They are permanent, stand-alone, self-sufficient, and standardized tactical forces consisting of between 3,900 to 4,100 soldiers. There are three types of BCTs: Armored Brigade Combat Teams (ABCTs); Stryker Brigade Combat Teams (SBCTs); and Infantry Brigade Combat Teams (IBCTs). BCTs are found both in the Active Component and the U.S. Army National Guard (USARNG). ", "In February 2017 the Army announced it would establish six Security Force Assistance Brigades (SFABs)\u2014five in the Active Component and one in the Army National Guard (ARNG). SFABs are to be capable of conducting security force assistance (SFA) operations at the tactical (brigade and below) level. While not combat brigades per se, the Army plans for SFABs to be expanded, if the need arises, into fully operational ABCTs or IBCTs capable of conducting major combat operations. "], "subsections": [{"section_title": "Types of IBCTs", "paragraphs": [], "subsections": [{"section_title": "Light IBCTs", "paragraphs": ["Light IBCTs are primarily foot-mobile forces. Light IBCTs can move by foot, vehicle, or air (either air landed or by helicopter). While IBCTs have light- and medium-wheeled vehicles for transport, there are not enough vehicles to transport all or even a significant portion of the IBCT's infantry assets in a single movement."], "subsections": []}, {"section_title": "Airborne IBCTs", "paragraphs": ["Airborne IBCTs are specially trained and equipped to conduct parachute assaults. They are equipped with limited vehicular assets, and once they have conducted a parachute assault, they move by foot, vehicle, or helicopter, just like Light IBCTs."], "subsections": []}, {"section_title": "Air Assault IBCTs", "paragraphs": ["Air Assault IBCTs are specially trained and equipped to conduct helicopter assaults. What sets them apart from Light and Airborne IBCTs (which can also conduct helicopter assaults) is that they receive additional specialized training; the division to which these BCTs are assigned\u2014the 101 st Airborne Division\u2014has the primary mission and organic helicopter assets to conduct large-scale helicopter assaults."], "subsections": []}]}, {"section_title": "How IBCTs Are Employed4", "paragraphs": ["The Army's Field Manual on Brigade Combat Teams describes how IBCTs are employed as follows:", "The role of the IBCT is to close with the enemy using fire and movement to destroy or capture enemy forces, or to repel enemy attacks by fire, close combat, and counterattack. Fire and movement is the concept of applying fires from all sources to suppress, neutralize, or destroy the enemy, and the tactical movement of combat forces in relation to the enemy (as components of maneuver applicable at all echelons). At the squad level, fire and movement entails a team placing suppressive fire on the enemy as another team moves against or around the enemy.", "The IBCT performs complementary missions to SBCTs and ABCTs. IBCT complementary missions include control of land areas, populations, and resources. The IBCT optimizes for the offense against conventional, hybrid, and irregular threats in severely restrictive terrain. The IBCT performs missions such as reducing fortified areas, infiltrating and seizing objectives in the enemy's rear, eliminating enemy force remnants in restricted terrain, securing key facilities and activities, and conducting stability in the wake of maneuvering forces. ", "IBCTs easily configure for area defense and as the fixing force component of a mobile defense. The IBCT's lack of heavy combat vehicles reduces its logistic requirements. Not having heavy combat vehicles gives higher commanders greater flexibility when adapting various transportation modes to move or maneuver the IBCT."], "subsections": []}, {"section_title": "Operational Environment", "paragraphs": ["Chief of Staff of the Army General Mark A. Milley characterizes the operational environment confronting the Army as follows: ", "I believe we are on the cusp of a fundamental change in the character of war. Technology, geopolitics and demographics are rapidly changing societies, economies, and the tools of warfare. They are also producing changes in why, how and where wars are fought\u2014and who will fight them. The significantly increased speed and global reach of information (and misinformation) likewise will have unprecedented effects on forces and how they fight.", "For example, the proliferation of effective long-range radars, air defense systems, long-range precision weapons, electronic warfare, and cyber capabilities enables adversary states to threaten our partners and allies. Even if we do not fight the producers of these sophisticated weapons, warfare will become more lethal as they export this advanced equipment to their surrogates or customers. Crises involving such adversaries will unfold rapidly, compressing decision cycles and heightening the risks of miscalculation or escalation.", "Conflict will place a premium on speed of recognition, decision, assembly and action. Ambiguous actors, intense information wars and cutting-edge technologies will further confuse situational understanding and blur the distinctions between war and peace, combatant and noncombatant, friend and foe\u2014perhaps even humans and machines.", "Warfare in the future will involve transporting, fighting and sustaining geographically dispersed Army, joint and multinational forces over long and contested distances, likely into an opposed environment and possibly against a technologically sophisticated and numerically superior enemy. All domains will be viciously contested, and both air and maritime superiority\u2014which have been unquestioned American advantages for at least 75 years\u2014will no longer be a given. Forces in theater should expect to operate under increased public scrutiny, persistent enemy surveillance, and massed precision long-range fires with area effects. Close combat on sensor-rich battlefields of the future will be faster, more violent and intensely lethal, unlike anything any of us have witnessed. And the majority of our operations will likely occur in complex, densely populated urban terrain.", "In relation to this operational environment, IBCTs are presented with the following challenges:", "In the past, light infantry of the 82 nd Airborne, 101 st or 10 th Mountain Division would either air drop by parachute, helicopter air assault, or air land at a friendly or secured airfield or land near one to seize it. However, Anti-Access Area Denial (A2AD) technology and weapons, like air defense systems and anti-armor, mines and improvised explosive devices (IEDs), have become both more effective and prevalent. These open the question of whether traditional insertion drop or landing zone is feasible any longer. It is increasingly likely that an \"off set insertion\" will be necessary with the ground force then moving by land to the objective or operating area.", "The concept itself is largely an upscaling of what U.S. and other nations' special operations, reconnaissance, and even some airborne units have been doing for some time: using light vehicles, including light armored vehicles that are inserted by airdrop, helicopter, or tactical transport air landing. Using the vehicles they are able to insert discretely where they are unlikely to be detected and then conduct their missions."], "subsections": []}]}, {"section_title": "IBCT Capability Gaps", "paragraphs": ["The Army describes IBCT critical capability gaps as", "The IBCT lacks the ability to decisively close with and destroy the enemy under restricted terrains such as mountains, littorals, jungles, subterranean areas, and urban areas to minimize excessive physical burdens imposed by organic material systems. The IBCT lacks the ability to maneuver and survive in close combat against hardened enemy fortifications, light armored vehicles, and dismounted personnel. IBCTs lack the support of a mobile protected firepower capability to apply immediate, lethal, long-range direct fires in the engagement of hardened enemy bunkers, light armored vehicles, and dismounted personnel in machine gun and sniper positions; with all-terrain mobility and scalable armor protection; capable of conducting operations in all environments."], "subsections": []}, {"section_title": "How Programs Address Capability Gaps", "paragraphs": ["In its current configuration, Army officials note that IBCTs \"can get there fast with low logistics demand, and they can work in severely restricted terrain, but they lack mobility and protected firepower\" to \"enter a foreign territory, immediately overcome armed opposition and hold an area that enables further troops to enter, like an airfield.\" ", "The Army's concept of operation for these vehicles is to", "increase ground tactical mobility in the IBCT; allow infantry squads and rifle companies to quickly move extended distances over difficult terrain to seize assault objectives; allow rapid deployment into contested areas while providing high mobility and flexibility upon arrival; and limit the impact on strategic mobility of the IBCT.", "In this regard, the GMV/ISV is intended to provide mobility to the rifle squad and company; the LRV to provide protection to the moving force by means of scouts, sensors, and a variety of medium-caliber weapons; and the MPF to provide the overall IBCT the capability to more effectively engage and destroy fortifications, bunkers, buildings, and light to medium armored vehicles."], "subsections": []}, {"section_title": "The Systems11", "paragraphs": ["The GMV/ISV, LRV, and MPF are briefly described in the following sections based on each individual vehicle's requirements."], "subsections": [{"section_title": "Ground Mobility Vehicle (GMV)/Infantry Squad Vehicle (ISV)", "paragraphs": ["Payload: Nine soldiers/3,200 pounds capacity. Transportability: UH-60 sling load/CH-47 internal load; Air drop from C-130. Mobility: Provide mobility 75% cross-country; 10% primary roads; 10% secondary roads; 5% urban rubble environment. Protection: Provided by high mobility avoiding enemy contact and soldier Personal Protection Equipment (PPE). Lethality: Provide capability to host crew-served weapons assigned to the infantry squad. Command, Control, Communications, Computers, Intelligence, Reconnaissance, and Surveillance (C4ISR): No requirement for added communication equipment or Size, Weight, Power, and Cooling (SWaP-C) organic equipment of the infantry squad."], "subsections": []}, {"section_title": "Light Reconnaissance Vehicle (LRV)", "paragraphs": ["Transportability: CH-47 internal load (in combat configuration). Air drop from C-130. Range: Greater than 300 miles on internal fuel. Mobility : Provide mobility 75% cross-country; 10% primary roads; 10% secondary roads; 5% urban rubble environment. Lethality: Medium-caliber weapon system to provide precision \"stand-off\" lethality against small arms and offense against light armored vehicles. Protection: Protection from small arms. Capacity: Six scouts with combat equipment. Command, Control, Communications, Computers, Intelligence, Reconnaissance, and Surveillance (C4ISR): Ensure sufficient Size, Weight, Power, and Cooling (SWaP-C) to facilitate the integration of current and future communications organic to an IBCT. Support scout sensor package."], "subsections": []}, {"section_title": "Mobile Protected Firepower (MPF)", "paragraphs": ["R ange: 300 kilometer range; 24-hour operations \"off the ramp\" or on \"arrival at drop zone (DZ).\" Mobility: Capable of traversing steep hills, valleys typical in cross-country and urban terrain, and ford depths equal to that of other organic IBCT vehicles. Lethality: Ability to defeat defensive fortifications (bunkers), urban targets (behind the wall), and armored combat vehicles. Protection: Scalable armor to include underbelly protection. Communications Network: SWaP-C sufficient to support current and future communications organic to an IBCT."], "subsections": []}]}, {"section_title": "Programmatic Overview", "paragraphs": ["The following sections provide brief programmatic overviews of the vehicles. Figure 4 depicts the Department of Defense (DOD) Systems Acquisition Framework, which illustrates the various phases of systems development and acquisitions and is applicable to the procurement of these three systems."], "subsections": [{"section_title": "The Army's Acquisition Strategy", "paragraphs": ["The Army plans to acquire the vehicles as modified Non-Developmental Item (NDI) platforms. Because the Army adopted the NDI acquisition approach for all three vehicles, the Army can enter the programs at Acquisition Milestone C: Production and Deployment, and forgo the Engineering and Manufacturing Development Phase associated with developmental items (systems developed \"from scratch\") if so desired. Variations of these vehicles already exist commercially, and in order to meet Army requirements, they would require minor modifications. The Army chose this acquisition strategy because a survey of potential candidates suggested a number of existing vehicles\u2014with minor modifications\u2014could meet the Army's requirements. In the case of the MPF, which was less well-developed than the GMV, the MPF underwent an Analysis of Alternatives (AoA) as part of the Material Solution Analysis phase, which was completed September 7, 2017. ", "Theoretically, adopting a NDI approach for all three vehicles could lead to a shorter acquisition time line and a less expensive overall acquisition. The NDI approach is not without risk, however, as the Technology Maturation and Risk Reduction Phase permits a more detailed examination of candidate systems, which can help identify and address requirement shortfalls earlier in the acquisition process (a less expensive solution as opposed to identifying and correcting problems later in a system's development). In all cases, a full and open competition is expected for all three vehicles."], "subsections": []}, {"section_title": "Mobile Protected Firepower (MPF) Becomes Part of the Next Generation Combat Vehicle (NGCV) Program", "paragraphs": ["In June 2018, the Army established the Next Generation Combat Vehicle (NGCV) program to replace the M-2 Bradley Infantry Fighting Vehicle (IFV), which has been in service since the early 1980s. In October 2018, Army leadership reportedly decided to add additional vehicle programs to what would be called the NGCV Program. Under the new NGCV Program, the following systems are planned for development:", "The Optionally Manned Fighting Vehicle (OMFV): the M-2 Bradley IFV replacement. The Armored Multi-Purpose Vehicle (AMPV): the M-113 vehicle replacement. Mobile Protected Firepower (MPF). Robotic Combat Vehicles (RCVs): three versions\u2014Light, Medium, and Heavy. The Decisive Lethality Platform (DLP): the M-1 Abrams tank replacement.", "Previously, the MPF program was overseen by the Program Executive Office (PEO) Ground Combat Systems, but the NGCV program is overseen by the recently established Army Futures Command (AFC) NGCV Cross Functional Team (CFT). MPF will continue to be overseen by PEO Ground Combat Systems, but the NGCV CFT will determine operational requirements and acquisition schedule. "], "subsections": []}, {"section_title": "GMV/ISV", "paragraphs": ["In March 2015, the Army changed the name of its Ultra-Light Combat Vehicle (ULCV) to the Ground Mobility Vehicle (GMV). The overall GMV Army Acquisition Objective (AAO) was 2,065 vehicles for the Army and 317 vehicles for U.S. Army Special Operations Command (USASOC). The specific near-term requirement is 295 vehicles for the five Airborne IBCTs and 317 vehicles for USASOC. The Army's FY2018 budget request modified the Army's original acquisition strategy for the GMV, essentially splitting it into two phases. In the first phase, the Army planned to procure GMVs for the five Airborne IBCTs through a U.S. Special Operations Command (USSOCOM) contract already in place for a similar vehicle (GMV 1.1) for USSOCOM forces. In this case, the Army planned to purchase the Flyer 72 vehicle from General Dynamics Ordnance and Tactical Systems. The Army contended that the limited buy of 295 GMV 1.1 vehicles for the five Airborne IBCTs was the quickest way to field this interim capability that has gone through USSOCOM-sponsored testing and shares the same repair parts, thereby reducing costs.", "The second phase of the GMV program would be to acquire 1,700 GMVs through a full and open competition once the Army has refined its requirements, which was intended to reduce the overall cost. Army officials noted the GMV 1.1 procurement cost will be higher, however, than the cost of the GMVs procured through full and open competition. The Army planned to spend $194.8 million for 718 vehicles from FY2018 to FY2022, with an expectation that a contract award would be made in FY2020. "], "subsections": [{"section_title": "Phase II of the GMV Program\u2014The Infantry Squad Vehicle (ISV)24", "paragraphs": ["To equip other types of IBCTs, the Army established the Infantry Squad Vehicle (ISV) program. The ISV is planned to be a larger competitive program than the GMV program and is to have similar operational requirements as the GMV. ISV is planned to be fielded to Active and Reserve Components. The estimated total requirement is for 2,065 vehicles, with projected target production quantities for the next five fiscal years as follows:", "FY2020: 17 vehicles. FY2021: 118 vehicles. FY2022: 177 vehicles. FY2023: 177 vehicles. FY2024: 162 vehicles.", "The targeted ISV program acquisition timeline is as follows:", "Draft Request for Proposal (RFP): March 29, 2019. Industry Day: April 11, 2019. Final RFP Release: April 18, 2019. Prototype Contract Awards (up to three vendors): August 20, 2019. Prototype Vehicle Delivery (two vehicles up to three vendors): November 1, 2019. Production Contract Award: March 31, 2020."], "subsections": []}]}, {"section_title": "LRV", "paragraphs": ["Army officials were planning to use the Joint Light Tactical Vehicle (JLTV) to serve as the LRV on an interim basis. From a programmatic perspective, the Army refered to its interim LRV solution as the Joint Light Tactical Vehicle-Reconnaissance Vehicle (JLTV-RV). The JLTV, which is currently in production, could be equipped with additional firepower and sensors to serve in this role while the Army continues to refine its requirements for the LRV. The standard JLTV\u2014at around 18,000 pounds and carrying only four soldiers\u2014does not meet the Army's weight and crew requirements for the LRV as currently envisioned. The Army planned for the LRV to be fielded in IBCT Cavalry Squadrons and Infantry Battalion Scout Platoons. The Army's decision to not request funds for JLTV - RV in its FY2020 budget request calls into question the future of this effort."], "subsections": []}, {"section_title": "MPF", "paragraphs": ["In October 2016 the Army began its Analysis of Alternatives for MPF candidates. MPF would also be a modified Non-Developmental Item (NDI) platform. The Engineering Manufacturing Development (EMD) phase is planned to begin in FY2019 and last through FY2022, with an anticipated Milestone C\u2014beginning of Production and Deployment\u2014by FY2022. Reports suggested the Army had a requirement for about 500 MPF vehicles with an average unit manufacturing cost of $6 million to $7 million per vehicle, which suggests a total program cost of approximately $3 billion to $3.5 billion. The Marine Corps is reportedly monitoring MPF development for possible use in its Marine tank battalions, which could raise the overall MPF procurement to around 600 vehicles. ", "On November 17, 2017, the Army released a request for proposal (RFP) for MPF. The RFP reportedly noted the Army wished to procure 504 MPF vehicles at a unit manufacturing cost target of $6.4 million per vehicle. "], "subsections": [{"section_title": "MPF Prototype Contracts Awarded34", "paragraphs": ["In December 2018, the Army reportedly awarded contracts to BAE Systems and General Dynamics Land Systems (GDLS) to build MPF prototypes. Both companies were reportedly awarded contracts not to exceed $376 million to build 12 prototypes for testing before one company is selected to deliver up to 28 low-rate initial production (LRIP) vehicles. BAE was said to have proposed a modified version of the Army's old M-8 Armored Gun System, and GDLS integrated an M-1 Abrams turret onto the British Ajax Scout Vehicle hull into what is called the Griffin III. "], "subsections": []}]}]}, {"section_title": "Budgetary Considerations", "paragraphs": [], "subsections": [{"section_title": "FY2020 Budget Request", "paragraphs": [], "subsections": [{"section_title": "GMV/ISV", "paragraphs": ["The FY2020 Army GMV budget request for $37 million in procurement funding supports the procurement of 69 GMVs for the U.S. Army Special Operations Command and 15 ISVs for the Army. The FY2020 GMV Research, Development, Test & Evaluation (RDT&E) request is for $3 million to support operational testing."], "subsections": []}, {"section_title": "LRV", "paragraphs": ["The Army did not submit a FY2020 budget request for the LRV program. From a programmatic perspective, the Army refers to its interim LRV solution as the Joint Light Tactical Vehicle-Reconnaissance Vehicle (JLTV-RV). "], "subsections": []}, {"section_title": "MPF", "paragraphs": ["The FY2020 Army MPF budget request for $310.152 million in RDT&E funding supports the continuation of rapid prototyping efforts and the completion of 24 prototypes."], "subsections": []}]}]}, {"section_title": "Potential Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "Future of the Light Reconnaissance Vehicle (LRV) Effort", "paragraphs": ["As previously noted, the Army did not submit a FY2020 budget request for LRV funding. Absent any formal announcement, it is unknown if the Army has decided to cancel this effort, initiate a new effort, or if it is putting this effort on hold to free up funding for other priorities. Another potential issue is if this effort has been cancelled, how the Army will address the operational need for reconnaissance in the IBCTs that the LRV was intended to satisfy."], "subsections": []}, {"section_title": "Security Force Assistance Brigades (SFABs) and ISV, LRV, and MPF Requirements", "paragraphs": ["As previously noted, in February 2017 the Army announced it would establish six Security Force Assistance Brigades (SFABs)\u2014five in the Active Component and one in the Army National Guard (ARNG). While not combat brigades per se, the Army plans for SFABs to be expanded, if the need arises, into fully operational ABCTs or IBCTs capable of conducting major combat operations. ", "If the Army plans to expand some of its SFABs into IBCTs it could have an impact on the number of ISVs, LRVs, and MPF systems needed to fully equip these units. While these numbers would likely be modest, it might be of interest to Congress to know how many additional vehicles would be required. Since they would not be part of the SFAB's organic equipment and only needed in the event of Army expansion, how and when will these vehicles be procured and how will they be maintained so that they would be available when needed?"], "subsections": []}, {"section_title": "GMV/ISV, LRV, and MPF Fielding Plans", "paragraphs": ["Apart from fielding GMVs to Airborne IBCTs, little is known about the Army's overall fielding plan for these vehicles. Would active IBCTs receive these vehicles first, followed by National Guard IBCTs, or would both components receive the vehicles concurrently? When would these vehicles begin arriving at units, and when is the overall fielding anticipated to conclude? Does the Army plan to field these vehicles to prepositioned stocks in addition to units? What are some of the challenges associated with fielding three different vehicles with different production and delivery dates? "], "subsections": []}]}]}}
{"id": "R45659", "title": "U.S. Farm Program Eligibility and Payment Limits Under the 2018 Farm Bill (P.L. 115-334)", "released_date": "2019-04-02T00:00:00", "summary": ["Under the Agricultural Improvement Act of 2018 (P.L. 115-334; 2018 farm bill), U.S. farm program participants\u2014whether individuals or multiperson legal entities\u2014must meet specific eligibility requirements to receive benefits under certain farm programs. Some requirements are common across most programs, while others are specific to individual programs. In addition, program participants are subject to annual payment limits that vary across different combinations of farm programs. Federal farm support programs and risk management programs, along with their current eligibility requirements and payment limits, are listed in Table 1. Terms for most of these programs are applicable for the 2019-2023 crop years.", "Since 1970, Congress has used various policies to address the issue of who should be eligible for farm payments and how much an individual recipient should be permitted to receive in a single year. In recent years, congressional policy has focused on tracking payments through multiperson entities to individual recipients (referred to as direct attribution), ensuring that payments go to persons or entities actively engaged in farming, capping the amount of payments that a qualifying recipient may receive in any one year, and excluding farmers or farming entities with large average incomes from payment eligibility.", "Current eligibility requirements that affect multiple programs include identification of every participating person or legal entity\u2014both U.S. and non-U.S. citizens\u2014the nature and extent of an individual's participation (i.e., actively engaged in farming criteria), including ownership interests in multiperson entities and personal time commitments (whether as labor or management) and means testing (persons with combined farm and nonfarm adjusted gross income in excess of $900,000 are ineligible for most program benefits); and conservation compliance requirements.", "In general, if foreign persons or legal entities meet a program's eligibility requirements, then they are eligible to participate. One exception is the four permanent disaster assistance programs created under the 2014 farm bill (P.L. 113-79) and the noninsured crop disaster assistance program (NAP) in which nonresident aliens are excluded.", "Current law requires direct attribution through four levels of ownership in multiperson legal entities. Current payment limits include a cumulative limit of $125,000 for all covered commodities under the Price Loss Coverage (PLC) and Agricultural Revenue Coverage (ARC) support programs, with the exception of peanuts, which has its own $125,000 limit. Only one permanent disaster assistance program\u2014the Livestock Forage Disaster Program (LFP)\u2014is subject to a payment limit ($125,000 per crop year). NAP is also subject to a $125,000 per crop year limit per person for catastrophic coverage.", "Supporters of payment limits contend that large payments facilitate consolidation of farms into larger units, raise the price of land, and put smaller family-sized farming operations and beginning farmers at a disadvantage. In addition, they argue that large payments undermine public support for farm subsidies and are costly. Critics of payment limits counter that all farms need support, especially when market prices decline, and that larger farms should not be penalized for the economies of size and efficiencies they have achieved. Further, critics argue that farm payments help U.S. agriculture compete in global markets and that income testing is at odds with federal farm policies directed toward improving U.S. agriculture and its competitiveness.", "Congress may continue to address these issues, as well as related questions, such as: How does the current policy design of payment limits relate to their distributional impact on crops, regions, and farm size? Is there an optimal aggregation of payment limits across commodities or programs? Do unlimited benefits under the marketing assistance loan program reduce the effectiveness of overall payment limits?"], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Program eligibility requirements and payment limits are central to how various U.S. farm programs operate. These requirements fundamentally address various equity concerns and reflect the goals of government intervention in agriculture. They determine who receives federal farm program payments and how much they receive. ", "Eligibility requirements and payment limits are controversial because they influence what size farms are supported. Policymakers have debated what limit is optimal for annual payments, whether payments should be proportional to production or limited per individual or per farm operation, and whether the limit should be specific to each program or cumulative across all programs. Furthermore, program eligibility requirements and payment limits generate considerable congressional interest because their effects differ across regions and by type of commodities produced and because a substantial amount of annual U.S. farm program payments are at stake: Direct federal outlays have averaged $13.7 billion per year from 1996 through 2017. When federal crop insurance premium subsidies are included, annual farm payments have averaged $18.5 billion over the same period. ", "This report discusses various eligibility factors and their interaction under the 2018 farm bill. It describes current restrictions that limit or preclude payments to farmers based on a number of factors as well as areas where few, if any, restrictions limit farmers' access to such benefits or to the amount of benefits. ", "This report begins by discussing farm program eligibility, including the primary types of legal entities participating in farm programs. Other limiting requirements are discussed, such as participant identification, citizenship, the current interpretation of what constitutes \"actively engaged in farming\" (AEF), adjusted gross income (AGI) limits, and conservation compliance. This is followed by a discussion of the direct attribution of payments to individual recipients for assessing whether a person's payment limit has been exceeded. Next, annual payment limits for the major categories of farm programs are examined. Much of this information is summarized in Table 1 . ", "This report also discusses several issues related to farm program payment limits, including policy design issues, that may be of interest to Congress. Finally, an Appendix contains a history of the evolution of annual payment limits for major commodity programs ( Table A-1 ). "], "subsections": [{"section_title": "Background", "paragraphs": ["Farm program payment limits and eligibility requirements may differ by both type of program and type of participating legal entity (e.g., an individual, a partnership, or a corporation). Eligibility and payment limit determinations for farm programs are under the jurisdiction of the U.S. Department of Agriculture's (USDA's) Farm Service Agency (FSA).", "Congress first added payment limits as part of farm commodity programs in the 1970 farm bill (P.L. 91-524). However, such limits have evolved over time in both scope and amount ( Table A-1 ) as the structure of U.S. agriculture, farm policies, and commodity support programs has changed. With each succeeding farm bill, Congress has addressed anew who is eligible for farm payments and how much an individual recipient should be permitted to receive in a single year. ", "In recent years, congressional debate has focused on", "attributing payments directly to individual recipients, ensuring that payments go to persons or entities currently engaged in farming, capping the amount of payments that a qualifying recipient may receive in any one year, and excluding farmers or farming entities with incomes above a certain level as measured by their AGI from payment eligibility.", "Each of these policy measures\u2014depending on how they are designed and implemented\u2014can have consequences, both intended and unintended, for U.S. agriculture. These consequences include, but are not limited to, farm management structure, crop choices, and farm size. Because U.S. farm program eligibility requirements and annual payment limit policy have such broad potential consequences for U.S. agriculture, a review of both current policies and related issues is of potential interest to Congress. "], "subsections": []}]}, {"section_title": "Program Eligibility", "paragraphs": ["Not all farm businesses are eligible to participate in federal farm programs. A number of statutory and regulatory requirements govern federal farm program eligibility for benefits under various programs. Some farm businesses, although eligible to participate, are restricted from receiving certain benefits or may be limited in the extent of program payments that they may receive.", "Over time, program eligibility rules have evolved, expanding to more programs and including more limitations. Cross-cutting methods of determining program eligibility\u2014such as AGI thresholds\u2014are relatively new. Discussed below are cross-cutting eligibility requirements that affect multiple programs, including participant identification, foreign ownership, nature and extent of participation (i.e., AEF criteria), means tests, and conservation requirements. "], "subsections": [{"section_title": "Participant Identification", "paragraphs": ["Generally, program eligibility begins with identification of participants. Identifying who or what entity is participating and therefore how payments may be attributed is the cornerstone to most farm program eligibility. To be eligible to receive any farm program payment, every person or legal entity\u2014including both U.S. citizens and noncitizens\u2014must provide a name and address and have either a social security number (SSN), in the case of a person, or a Taxpayer Identification Number (TIN) or Employee Identification Number (EIN) in the case of a legal entity with multiple persons having ownership interests. In this latter situation, each person with an interest must have a TIN or EIN and must declare interest share in the joint entity using the requisite USDA forms. ", "All participants in programs subject to payment eligibility and payment limitation requirements must submit to USDA two completed forms. The first, CCC-901 (Members' Information), identifies the participating persons and/or entities (through four levels of attribution if needed) and their interest share in the operation. The second form, CCC-902 (Farm Operating Plan), identifies the nature of each person's or entity's stake\u2014that is, capital, land, equipment, active personal labor, or active personal management\u2014in the operation. These forms need to be submitted only once (not annually) but must be kept current in regard to any change in the farming operation. Critical changes to a farming operation might include expanding the number of limitations for payment, such as by adding a new family member, changing the land rental status from cash to share basis, purchasing additional base acres equivalent to at least 20% of the previous base, or substantially altering the interest share of capital or equipment contributed to the farm operation. This information is critical in determining the extent to which each person is actively engaged in the farming operation, as described below."], "subsections": []}, {"section_title": "Three Principal Farm Business Categories", "paragraphs": ["Many types of farm business entities own operations engaged in agricultural production. For purposes of determining the extent to which the participants of a farm operation qualify as potential farm program participants, three major categories are considered ( Table 2 ).", "1. Sole proprietorship or family farm . The farm business is run by a single operator or multiple adult family members\u2014the linkage being common family lineage\u2014whereby each qualifying member is subject to an individual payment limit. Thus, a family farm potentially qualifies for an additional payment limit for each family member (18 years or older) associated with the principal operator. Family farms or sole proprietorships comprised nearly 87% of U.S. farm operations in 2012. 2. Joint operation . Each member of a joint operation\u2014where members need not have a common family relation or lineage\u2014is treated separately and individually for purposes of determining eligibility and payment limits. Thus, a partnership's potential payment limit is equal to the number of qualifying members (plus any special designees such as spouses) times the individual payment limit. 3. Corporation. A legally defined association of joint owners or shareholders that is treated as a single person for purposes of determining eligibility and payment limits. This includes corporations, limited liability companies, and similar entities. Most incorporated farm operations are family held.", "As of 2012, these three categories represented over 98% of U.S. farm operations ( Table 2 ). In addition, federal regulations exist for evaluating both the eligibility of and relevant payment limits for other exceptional types of potential recipients, including a spouse, minor children, and other family members as well as marketing cooperatives, trusts and estates, cash-rent tenants, sharecroppers, landowners, federal agencies, and state and local governments. These institutional arrangements represent a small share (less than 2%) of U.S. farm operations according to USDA's 2012 Census of Agriculture. Special rules also describe eligibility and payment limits in the event of the death of a previously eligible person. "], "subsections": []}, {"section_title": "AEF Requirement", "paragraphs": ["To be eligible for certain Title I commodity program benefits under the 2018 farm bill, participants\u2014individuals as well as other types of legal entities\u2014must meet AEF requirements. The AEF requirements apply equally to U.S. citizens, resident aliens, and foreign entities. This section briefly reviews the specific requirements for each type of legal entity\u2014person, partnership, or corporation\u2014to qualify as \"actively engaged in farming.\""], "subsections": [{"section_title": "Individual AEF Requirements", "paragraphs": ["An individual producer must meet three AEF criteria: ", "1. The person, independently and separately, makes a significant contribution to the farming operation of (a) capital, equipment, or land; and (b) active personal labor, active personal management, or a combination of active personal labor and management. 2. The person's share of profits or losses is commensurate with his/her contribution to the farming operation. 3. The person shares in the risk of loss from the farming operation. ", "In general, family farms receive special treatment whereby every adult member (i.e., 18 years or older) is deemed to meet the AEF requirements. Family membership is based on lineal ascendants or descendants but is also extended to siblings and spouses. Furthermore, under the 2018 farm bill (\u00a71703), for purposes of assessing the availability of individual payment limits, the definition of family member has been extended to include first cousins, nieces, and nephews.", "Current law also allows for special treatment of a spouse: If one spouse is determined to be actively engaged in farming, then the other spouse shall also be determined to have met the requirement. The spousal exception applies to both individual producers (as in a family farm) and producers operating within a partnership. ", "An additional exception is made for landowners who may be deemed in compliance with all AEF requirements if they receive income based on the farm's operating results without providing labor or management. "], "subsections": []}, {"section_title": "Partnership AEF Requirements", "paragraphs": ["In a general partnership, each member is treated separately for purposes of meeting the AEF criteria and determining eligibility. In particular, each partner with an ownership interest must contribute active personal labor and/or active personal management to the farming operation on a regular basis. The contribution must be identifiable, documentable, separate, and distinct from the contributions made by any other partner. Each partner who fails to meet the AEF criteria is ineligible to participate in the relevant farm program."], "subsections": []}, {"section_title": "Corporate AEF Requirements", "paragraphs": ["A corporation, as an association of joint owners, is treated as a single person for purposes of meeting the AEF criteria and determining eligibility. In addition to the AEF criteria cited for a person\u2014of sharing commensurate profits or losses and bearing commensurate risk\u2014each member with an ownership interest in the corporation must make a significant contribution of personal labor or active personal management\u2014whether compensated or not\u2014to the operation that is (a) performed on a regular basis, (b) identifiable and documentable, and (c) separate and distinct from such contributions of other stockholders or members. Furthermore, the collective contribution of corporate members must be significant and commensurate with contributions to the farming operation.", "If any member of the legal entity fails to meet the labor or management contribution requirements, then any program payment or benefit to the corporation will be reduced by an amount commensurate with the ownership share of that member. An exception applies if (a) at least 50% of the entity's stock is held by members that are \"actively engaged in providing labor or management\" and (b) the total annual farm program payments received collectively by the stockholders or members of the entity are less than one payment limitation. "], "subsections": []}, {"section_title": "Special Nonfamily AEF Requirements", "paragraphs": ["Prior to the 2014 farm bill ( P.L. 113-79 ), the definition of active personal labor or management was broad and could be satisfied by undertaking passive activities without visiting the operation, thus enabling individuals who lived significant distances from an operation to claim such labor or management contributions. This was often seen as problematic, as passive investors were receiving farm program payments without actively contributing to the farming operation. ", "Recent farm bills have amended the AEF criteria in an attempt to tighten the requirements. However, the issue remains controversial. In particular, the 2014 farm bill (\u00a71604) required USDA to add more specificity to the role that a nonfamily producer must play to qualify for farm program benefits. These AEF regulations continue under the 2018 farm bill. ", "As a result of the rule, a limit is placed on the number of nonfamily members of a farming operation who can qualify as a farm manager\u2014depending on the size and complexity of the farm operation. Also, additional recordkeeping requirements now apply for each nonfamily member of a farming operation claiming active personal management status. No such limit applies to the potential number of qualifying family members."], "subsections": []}]}, {"section_title": "Foreign Person or Legal Entity", "paragraphs": ["Generally, if foreign persons or legal entities meet a particular farm program's eligibility requirements, then they are eligible to participate. One exception is the four permanent disaster assistance programs\u2014Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish Program (ELAP), Livestock Forage Disaster Program (LFP), Livestock Indemnity Program (LIP), and Tree Assistance Program (TAP)\u2014and the Noninsured Crop Disaster Assistance Program (NAP), which explicitly prohibit payments to foreign entities other than resident aliens.", "As of December 31, 2016, foreign persons held an interest in 28.3 million acres of U.S. agricultural land (including forest land). This accounts for 2.2% of all privately held agricultural land in the United States and approximately 1% of total U.S. land.", "Foreign persons or entities can become eligible for most farm program benefits if they have the requisite U.S. taxpayer ID and meet the AEF criteria discussed earlier. In the case where a foreign corporation or similar entity fails to meet the AEF criteria but has shareholders or partners with U.S. residency status, then the foreign entity may\u2014upon written request to USDA\u2014receive payments representative of the percentage ownership interest by those U.S. citizens or U.S. resident aliens that do meet the AEF criteria.", "In addition, current law imposes no specific restrictions on foreign persons or entities with respect to eligibility for crop and livestock insurance premium subsidies. Also, the Dairy Margin Coverage (DMC) program makes no distinction about producer or owner citizenship. Instead, the law states that all dairy operations in the United States shall be eligible to participate in the DMC program to receive margin protection payments. Similarly, no citizenship requirement exists for a sugar processor, or a cane or beet producer, operating under the U.S. sugar program price guarantees. However, the sugarcane and sugar beets being processed must be of U.S. origin."], "subsections": []}, {"section_title": "AGI Limit", "paragraphs": ["Means testing prohibits persons or legal entities from being eligible to receive any benefit under certain commodity and conservation programs during a crop, fiscal, or program year, as appropriate, if their income is above an established level. The first means test for farm programs was established by the 2002 farm bill ( P.L. 107-171 ) ( Table 3 ). Income is measured by an individual's or entity's average AGI from the previous three-year period but excluding the most recent complete taxable year. ", "Recent farm bills, including the 2018 farm bill, have preserved the three-year average AGI as the relevant measure of income. Now that an AGI limit appears acceptable, the debate has shifted to which programs are covered by the means test and what income level is an appropriate threshold. "], "subsections": [{"section_title": "AGI Defined", "paragraphs": ["Since most U.S. farms are operated as sole proprietorships or partnerships ( Table 2 ), most farm households are taxed under the individual income tax rather than the corporate income tax. For an individual, AGI is the Internal Revenue Service (IRS) reported adjusted gross income. AGI measures net income\u2014that is, income after expenses. Farm income is reported on the IRS Schedule F where AGI is net of farm operating expenses. For an incorporated business, a comparable measure to AGI\u2014as determined by USDA\u2014is used to measure income. ", "Since the household is the typical unit of taxation, farm and nonfarm income are combined when computing federal income taxes for farm households. In fact, most federal income tax paid by farm households can be attributed to nonfarm income (80% in 2016). ", "Farm operations overwhelmingly report operating losses for tax purposes (because of cash accounting, capital expensing via depreciation, and other practices). For example, in 2015, two-thirds of farm sole proprietors reported a net farm loss for tax purposes. The substantial portion of capital investment that can be expensed in the first year is an important determinant of the large loss reporting.", "Program participants are required to annually give their consent to the IRS to verify to USDA that they are in compliance with their AGI limit provisions using a specific USDA form (CCC-941). Failure to provide the consent and subsequent certification of compliance results in ineligibility for program payments and a required refund of any payments already received for the relevant year."], "subsections": []}, {"section_title": "Historical Development of the AGI Limit", "paragraphs": ["The initial AGI eligibility threshold established by the 2002 farm bill was for a total AGI of $2.5 million and covered most farm programs (listed in Table 3 ). However, the 2002 farm bill included an exemption if at least 75% of AGI was from farming.", "The 2008 farm bill replaced the single AGI limit of the 2002 farm bill with three separate AGI limits that distinguished between farm and nonfarm AGI. First, a nonfarm AGI limit of $500,000 applied to eligibility for selected farm commodity program benefits including the Milk Income Loss Contract program, NAP, and the disaster assistance programs. A second farm-specific AGI limit of $750,000 applied to eligibility for direct payments. A third nonfarm AGI limit of $1 million\u2014but subject to an exclusion if 66.6% of total AGI was farm-related income\u2014applied to eligibility for benefits under conservation programs. The AGI limit could be waived in its entirety on a case-by-case basis if a conservation program would protect environmentally sensitive land of special significance.", "Also, the 2008 farm bill added a provision for married individuals filing a joint tax return whereby the joint AGI could be allocated as if a separate return had been filed by each spouse. This would potentially allow the farmer to exclude any earned income from a spouse as well as a share of any unearned income from jointly held assets for purposes of the eligibility cap. This provision had the potential to significantly reduce the share of farms affected by the AGI cap.", "The 2014 farm bill returned the eligibility threshold to a single total AGI limit but at a level of $900,000 for individuals and incorporated businesses. It also retained the provision for married individuals filing a joint tax return to allocate the AGI as if a separate return had been filed by each spouse. In the case of a payment to a general partnership or joint venture comprising multiple individuals, the payment would be reduced by an amount that is commensurate with the share of ownership interest of each person who has an average AGI in excess of $900,000. The 2018 farm bill retained the AGI provisions from the 2014 farm bill but added the 2008 farm bill's case-by-case waiver for conservation programs that would protect environmentally sensitive land of special significance."], "subsections": []}]}, {"section_title": "Conservation Compliance", "paragraphs": ["Two provisions\u2014highly erodible land conservation (Sodbuster) and wetland conservation (Swampbuster)\u2014are collectively referred to as conservation compliance. To be eligible for certain USDA program benefits, a producer agrees to conservation compliance\u2014that is, to maintain a minimum level of conservation on highly erodible land and not to convert or make production possible on wetlands.", "Conservation compliance has been in effect since the Food Security Act of 1985 (1985 farm bill, P.L. 99-198 ). The majority of farm program payments, loans, disaster assistance, and conservation programs are benefits that may be lost if a participant is out of compliance with the conservation requirements. The 2014 farm bill extended conservation compliance to federal crop insurance premium subsidies, and the 2018 farm bill retains this compliance requirement. Most recently, the 2018 farm bill made relatively minor amendments to the compliance provisions. Within U.S. farm policy, conservation compliance continues to be one of the only environmentally based requirements for program participation."], "subsections": []}]}, {"section_title": "Direct Attribution of Payments", "paragraphs": ["The process of tracking payments to an individual through various levels of ownership in single and multiperson legal entities is referred to as \"direct attribution.\" Several types of legal entities may qualify for farm program payments. However, ultimately every legal entity represents some combination of individuals. For example, a joint operation can be made up of a combination of individuals, partnerships, and/or corporate entities. A particular individual may be part of each of these three component entities, as well as additional subentities within each of these components. Farm payments flow down through these arrangements to individual recipients.", "Congress defines legal entity as an entity created under federal or state law that (1) owns land or an agricultural commodity or (2) produces an agricultural commodity. This broad definition encompasses the multiperson legal entities discussed earlier such as family farm operations, joint ventures, corporations, and institutional arrangements. Ownership shares in a multiperson legal entity are tracked via a person's social security number or EIN as reported in CCC-901 and CCC-902. Identification at the individual payment recipient level is critical for assessing the cumulative payments of each individual against the annual payment limit. ", "Direct attribution was originally authorized in the 2008 farm bill (\u00a71603(b)(3)). All farm program payments made directly or indirectly to an individual associated with a specific farming operation are combined with any other payments received by that same person from any other farming operation\u2014based on that person's pro rata interest in those other operations. It is this accumulation of an individual's payments\u2014tracked through four levels of ownership in multiperson legal entities\u2014that is subject to the annual payment limit (see text box below). ", "The first level of attribution is an individual's personal farming operation. Subsequent levels of attribution are related to those legal entities in which an individual has an ownership share. If a person meets his or her payment limit at the first level of attribution (i.e., on his or her own personal farming operation), then any payments to legal entities at lower levels of attribution are reduced by that person's pro rata share."], "subsections": []}, {"section_title": "Payment Limits", "paragraphs": ["When the eligibility criteria\u2014including AEF, AGI, conservation compliance, and others\u2014are met, the cumulative benefits across certain farm programs are subject to specific annual payment limits (detailed in Table 1 ) that can be received by an individual or legal entity in a year. ", "Explicit payment limits date back to the 1970s. Despite their longevity, payment limits are not universal among programs. Payment limits are also enforced differently for different types of legal entities (as mentioned earlier and summarized below). For example, certain program limits may be expanded depending on the number of participants, or they may be subject to exceptions, or they may not exist. The major categories of farm program support and the applicability of annual payment limits, if any, are briefly discussed below."], "subsections": [{"section_title": "Farm Support Programs Subject to Annual Payment Limits", "paragraphs": ["Traditionally, much attention focuses on the annual payment limits for the Title I commodity programs, largely because this has been the conduit for the majority of farm program expenditures. Title I commodity program payment limits were first included in a farm bill in 1970 but have evolved substantially since that initial effort ( Table A-1 ).", "Several major farm support programs\u2014as defined by specific titles of the 2018 farm bill\u2014are currently subject to annual payment limits. ", "Title I (Subtitle A) : ARC and PLC . Payments for the two revenue-support programs\u2014Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC)\u2014must be combined for all covered commodities (except peanuts) and reduced by any sequestration prior to assessing whether they are within the $125,000 annual payment limit for an individual. Peanuts are a notable exception to this rule in that ARC and PLC payments for peanuts (after sequestration) are subject to their own annual payment limit of $125,000 per individual. Title I (Subtitle E): Livestock Forage D isaster P rogram ( LFP ) . The LFP program is subject to an annual limit of $125,000 per person. Title I (Subtitle F ) : Noninsured Crop Disaster Assistance Program (NAP) . Available for crops not currently eligible for crop insurance. Payments for catastrophic coverage are limited to $125,000 per crop year per individual or entity. Payments for additional coverage (referred to as buy-up coverage) are limited to $300,000 per crop year per individual or entity.", "In addition to commodity programs authorized in periodic farm bills, the Secretary of Agriculture has broad authority under the CCC charter to make payments in support of U.S. agriculture. These payments may be purely ad hoc in nature, or they may be made according to a formula as part of a temporary program. Payments under this type of authority may or may not be subject to payment limits in accordance with the program's specification. Two such programs are currently active\u2014both are subject to annual payment limits. ", "1. Cotton Ginning Cost Share (CGCS) Program. The CGCS program has been available only in the 2016 and 2018 crop years. Payments under the CGCS program are subject to an annual payment limit of $40,000 per person. 2. Market Facilitation Program (MFP) . USDA established the MFP program in August 2018 as a one-time payment program to help offset the financial losses associated with lost agricultural trade to China as a result of a trade dispute with the United States. MFP payments are subject to a per-person payment limit of $125,000. However, the limit applies separately to three categories of commodities\u2014field crops (corn, sorghum, soybeans, upland cotton, and wheat); livestock (dairy and hogs); and specialty crops (shelled almonds and fresh, sweet cherries).", "When the farm program benefits for a qualifying recipient exceed the annual limits (as listed in Table 1 ) for a given year, then that individual is no longer eligible for further benefits under that particular program during that year and is required to refund any payments already received under that program that are in excess of the relevant payment limit for that year."], "subsections": [{"section_title": "Special Treatment of Family Farms", "paragraphs": ["As mentioned earlier, family farms receive special treatment whereby every adult member\u201418 years or older\u2014is deemed to meet the AEF requirements and is potentially eligible to receive farm program payments in an amount up to the individual payment limit. Furthermore, under the 2018 farm bill (\u00a71703(a)(1)), the definition of family member was extended to include first cousins, nieces, and nephews."], "subsections": []}, {"section_title": "Multiple Payment Limits for a Partnership", "paragraphs": ["A partnership's potential payment limit is equal to the limit for a single person times the number of persons or legal entities that comprise the ownership of the joint operation plus any additional exemptions or exceptions. Adding a new member can provide one or two (with qualifying spouse) additional payment limits.", "Each member of a partnership or joint venture must meet the AEF criteria and must be within the AGI limit. Furthermore, the partnership's total payment limit is reduced by the share of each single member who has already met his or her payment limit (or portion thereof) on another farm operation outside of the partnership. "], "subsections": []}, {"section_title": "Single Payment Limit for a Corporation", "paragraphs": ["A corporation is treated as a single person for purposes of determining eligibility and payment limits\u2014provided that the entity meets the AEF criteria. Adding a new member to the corporation generally does not affect the payment limit but only increases the number of members that can share a single payment limit."], "subsections": []}]}, {"section_title": "Conservation Programs Subject to Annual Payment Limits", "paragraphs": ["Limits on conservation programs have existed long before limits on farm support programs. Most current conservation programs include some limit on the amount of funding a participant may receive, but these limits vary by program. Some programs have multiple limits that vary based on activity or practice implemented. Several major conservation programs in Title II of the 2018 farm bill are currently subject to annual payment limits.", "Conservation Reserve Program (CRP) . Payments for CRP can vary based on the type of contract and type of payment. In general, annual rental payments for general enrollment contracts and continuous enrollment contracts are limited to 85% and 90% of the average county rental rate, respectively, and not more than $50,000 total per year. Cost-share payments and incentive payments are also limited and may be waived or applied at different levels under subprograms of CRP, such as land enrolled under the Conservation Reserve Enhancement Program or the Soil Health and Income Protection Pilot. Environmental Quality Incentives Program (EQIP). Total cost-share and incentive payments are limited to $450,000 for all EQIP contracts entered into by a person or legal entity between FY2019 and FY2023. This limit may be waived for new Conservation Incentive Contracts authorized under Section 2304(g) of the 2018 farm bill. Payments for EQIP conservation practices related to organic production are limited to a total of $140,000 between FY2019 and FY2023. Conservation Stewardship Program (CSP) . A person or legal entity may not receive more than a total of $200,000 for all CSP contracts between FY2019 and FY2023. This limit does not apply to the new CSP Grassland Conservation Initiative authorized under Section 2309 of the 2018 farm bill. However, annual payments under the initiative are limited to $18 per acre, not to exceed the number of base acres on a farm."], "subsections": []}, {"section_title": "Exceptions That Avoid Payment Limits", "paragraphs": ["Payments under certain Title I and Title II programs in the 2018 farm bill are excluded from annual payment limits. These exceptions are described below. Another exception to payment limits could result if the principal operator or a major partner of a farm operation dies during the course of a program year and any associated program benefits for the deceased are transferred to another farm operator or partner. "], "subsections": [{"section_title": "Selected Farm Programs Without Payment Limits", "paragraphs": ["Certain farm programs are not subject to annual payment limits. This includes any benefits obtainable under the marketing assistance loan (MAL) program, the sugar program, the dairy program, and three of the four disaster assistance programs (ELAP, LIP, and TAP). Also, benefits from crop insurance premium subsidies and indemnity payments on loss claims are not subject to any limits. Finally, any payments made under the Emergency Watershed Protection Program (EWP) are not subject to payment limits.", "Title I (Subtitle B) MAL program. Benefits under the MAL program include loan deficiency payments (LDP), marketing loan gains (MLG), and gains under forfeiture or commodity certificate exchanges. Traditionally, MAL benefits in the form of LDPs and MLGs have been subject to payment limits, whereas MAL benefits derived from forfeiting to the CCC the quantity of a commodity pledged as collateral for a marketing assistance loan or from use of commodity certificates to repay a marketing assistance loan have traditionally been excluded from payment limits. However, the 2018 farm bill (\u00a71703(a)(2)) excluded all MAL benefits from payment limits. Title I (Subtitle C) sugar program. The U.S. sugar program does not rely on direct payments from USDA, and generally operates with no federal budget outlays. Instead, the sugar program provides indirect price support to producers of sugar beets and sugarcane and direct price guarantees to the processors of both crops in the form of a marketing assistance loan at statutorily fixed prices. Congress has directed the USDA to administer the U.S. sugar program at no budgetary cost to the federal government by limiting the amount of sugar supplied for food use in the U.S. market, thus indirectly supporting market prices. This indirect subsidy is implicit and not subject to budgetary restrictions. Furthermore, there is no citizenship requirement for a sugar processor, but the sugarcane and sugar beets being processed under the U.S. sugar program price guarantees must be of U.S. origin. Title I (Subtitle D) dairy program . The margin-based dairy support program was first established under the 2014 farm bill (\u00a71401-\u00a71431) without payment limits as the dairy margin protection program (MPP). The MPP was revised and renamed as the Dairy Margin Coverage (DMC) program by the 2018 farm bill. Under the DMC, participants benefit from two potential types of support: an implicit premium subsidy and an indemnity-like payment made when program price triggers are met. The fees or premiums charged for participating in the DMC are set in statute rather than being set annually based on historical data and market conditions. Thus, the subsidy is implicit to the premium paid with no limit on the level of participation. Similarly, any payments made under the DMC are not subject to payment limits. Title I (Subtitle E ) disaster assistance program s: ELAP, LIP, and TAP . Payments under three of the disaster assistance programs in Title I of the 2018 farm bill are excluded from any payment limits. This includes ELAP, LIP, and TAP. Title II conservation program s . Total payments under certain conservation programs are limited to the value or cost of the specific conservation measure that the program is paying for rather than a fixed limit. Under the Agricultural Conservation Easement Program and the EWP program, payments are limited to a portion of the total cost of the easement or project rather than a total funding amount. In the case of the Regional Conservation Partnership Program (RCPP), the 2018 farm bill allows USDA to make payments to producers in an amount necessary to achieve the purposes of the program with no limit on the total amount. Title XI crop- and livestock-related insurance premium subsidies and indemnity payments . The principal support provided for farmers under the federal crop insurance program are federal premium subsidies for both catastrophic and buy-up insurance coverage. Premium subsidies are not subject to any limit on the level of participation or underlying value. Crop insurance indemnities are payments made to cover insurable losses and thus are not subject to any payment limit. To be eligible to purchase catastrophic risk protection coverage, the producer must be a \"person\" as defined by USDA, and to be eligible to purchase any other plan of insurance (such as buy-up coverage, among others), the producer must be at least 18 years of age and have a bona fide insurable interest in a crop as an owner-operator, landlord, tenant, or sharecropper. "], "subsections": []}, {"section_title": "Death of a Principal Operator", "paragraphs": ["Payments received directly or indirectly by a qualifying person (i.e., someone who meets AEF, AGI, and any other eligibility requirements) may exceed the applicable limitation if all of the following apply: ownership interest in farmland or agricultural commodities was transferred because of death, the new owner is the successor to the previous owner's contract, and the new owner meets all other eligibility requirements. This provision also applies to an ownership interest in a legal entity received by inheritance if the legal entity was the owner of the land enrolled in an annual or multiyear farm program contract or agreement at the time of the shareholder's death.", "The new owner cannot exceed the payment amount that the previous owner was entitled to receive under the applicable program contracts at the time of death. However, the new payment limit associated with this transfer would be in addition to the payment limit of the person's own farm operation. If the new owner meets all program and payment eligibility requirements, this provision applies for one program year for ARC and PLC. This reflects the idea that individual resources were committed by both farming operations (the deceased's and the inheritor's) during the growing season with no expectation of death and that individual payment limits should reflect that resource commitment and not impose an unnecessary and unexpected burden on the inheritor."], "subsections": []}]}]}, {"section_title": "Issues for Congress", "paragraphs": ["Limitations on farm program payments raise a number of issues that have led to debate among farm policymakers and agricultural stakeholders and may continue to be of interest to Congress as it considers issues of equity and efficiency in farm programs. "], "subsections": [{"section_title": "Payment Limits and Market Signals", "paragraphs": ["Theoretically, market prices\u2014based on relative supply and demand conditions under competitive market conditions \u2014provide the most useful signals for allocating scarce resources. In other words, in a situation where no policy support is available, most producers would make production decisions based primarily on market conditions. If these conditions hold, then tighter payment limits (i.e., a smaller role for government support policies and production incentives) would imply that more land would be farmed based on market conditions and less land would be farmed based on policy choices. ", "Supporters of payment limits use both economic and political arguments to justify tighter limits. Economically, they contend that large payments facilitate consolidation of farms into larger units, raise the price of land, and put smaller family-sized farming operations and beginning farmers at a disadvantage. Even though tighter limits would not redistribute benefits to smaller farms, they say that tighter limits could help indirectly by reducing incentives to expand, thus potentially reducing upward price pressure on land markets. This could help small and beginning farmers buy and rent land. Politically, they believe that large payments undermine public support for farm subsidies and are costly. In the past, newspapers have published stories critical of farm payments and how they are distributed to large farms, nonfarmers, or landowners. Limits increasingly appeal to urban lawmakers and have advocates among smaller farms and social interest groups.", "Critics of payment limits (and thus supporters of higher limits or no limits) counter that all farms are in need of support, especially when market prices decline, and that larger farms should not be penalized for the economies of size and efficiencies they have achieved. They say that farm payments help U.S. agriculture compete in global markets and that income testing is at odds with federal farm policies directed toward improving U.S. agriculture and its competitiveness.", "In addition to these concerns, this section briefly reviews other selected payment limit issues and eligibility requirements."], "subsections": []}, {"section_title": "Distributional Impacts on Farm Size", "paragraphs": ["The majority of farm payments go to a small share of large operators. According to USDA's 2012 Agricultural Census, farms with market revenue equal to or greater than $250,000 accounted for 12% of farm households but produced 89% of the value of total U.S. agricultural production and received 60% of federal farm program payments.", "Selecting a particular dollar value as a limit on annual government support payments involves a fundamental choice about who should benefit from farm program payments. This has important, but complex, policy implications. For example, numerous academic studies have shown that government payments are usually capitalized into cropland values, thus raising rental rates and land prices. Higher land values disfavor beginning and small farmers, who generally have limited access to capital. As a result, critics contend that there is a lack of equity and fairness under the current system of farm program payments that appears to favor large operations over small and that payment limits are really about farm size. ", "In contrast, supporters of the current system argue that larger farms tend to be more efficient operators and that altering the system in favor of smaller operators may create inefficiencies and reduce U.S. competitiveness in international markets. Furthermore, they contend that tightening payment limits will have different effects across crops, thus resulting in potentially harmful regional effects."], "subsections": []}, {"section_title": "Potential Crop and Regional Effects of Tighter Payment Limits", "paragraphs": ["Tighter payment limits do not affect all crops and regions equally. As limits are tightened, they will likely first impact those crops with higher per-unit and per-acre production value. Among the major U.S. program crops, higher valued crops include rice, peanuts, and cotton, all of which tend to be produced in the Southeast, the Mississippi Delta, and western states.", "Furthermore, payment limits may influence local economic activity. In particular, payment limits are likely to have a greater economic impact in regions where agricultural production accounts for a larger share of economic output\u2014that is in rural, agriculture-based counties\u2014and where there may be fewer opportunities for diversification to offset any payment-limit-induced reduction in agricultural incomes."], "subsections": []}, {"section_title": "Separate Payment Limit for Peanuts", "paragraphs": ["Under current law, peanuts have a separate program payment limit\u2014a consequence of the 2002 federal quota buyout ( P.L. 107-171 , \u00a71603). This separate payment limit affords peanut production an advantage over production of other program crops that are subject to combined payments for ARC and PLC under a single limit. As a result of this feature, a farmer who grows multiple program crops including peanuts has essentially two different program payment limits: ", "1. $125,000 per person for an aggregation of ARC and PLC program payments made to all program crops other than peanuts, and 2. $125,000 per person for ARC and PLC program payments made exclusively to peanuts. ", "Thus, under an extreme scenario involving large payments for both peanuts and other program crops, this could potentially double a peanut farmer's payment limits to as much as $250,000."], "subsections": []}, {"section_title": "No Payment Limit on MAL Benefits", "paragraphs": ["The 2018 farm bill (\u00a71703) excluded MAL benefits from any payment limit while also raising the MAL rates for several program crops (\u00a71202), including barley, corn, grain sorghum, oats, extra-long-staple cotton, rice, soybeans, dry peas, lentils, and small and large chickpeas. ", "Raising MAL rates has two potential program effects. First, since MAL rates function as floor prices for eligible loan commodities, higher rates increase the potential for greater USDA outlays under MAL. Second, MAL rates are used to establish the maximum payment under PLC. Thus, raising the loan rate for a program commodity lowers its potential PLC program payment rate.", "The absence of a limit on benefits received under the MAL program creates the potential for unlimited, fully coupled USDA farm support outlays. As a result, an apparent equity issue emerges when comparing program benefits of a producer facing a hard cap for ARC and PLC payments as compared to a producer with access to MAL benefits.", "Because MAL payments are fully coupled\u2014that is, tied to the production of a specific crop\u2014MAL program outlays count directly against U.S. amber box spending limits under World Trade Organization (WTO) commitments. To the extent that such program outlays might induce surplus production and depress market prices, they could result in potential challenges under the WTO's dispute settlement mechanism."], "subsections": []}, {"section_title": "Policy Design Considerations", "paragraphs": ["When eligibility requirements or payment limits are changed, economically rational producers are likely to alter their behavior to make adjustments to optimize net revenue under the new set of policy and market circumstances. For example, new eligibility requirements or tighter payment limits may result in", "a reorganization of the farm operation to increase the number of eligible persons or to lower the income that counts against a new AGI limit or the farm program payments that count against a smaller payment limit; a change in the crop and program choices or marketing practices, for example, to take advantage of the absence of a payment limit on MAL benefits; a change in crop choices, as agronomic and marketing opportunities allow, to favor a crop with an expanded limit (e.g., peanuts) over crops with more restricted program payment opportunities; or a change in land use, such as instead of farming the same acreage, renting out or selling some land to farmers who have not hit their payment limits.", "Payment limits applied per unit or per base acre represent an alternative to per-person payment limits that may mitigate some potential distortions to producer behavior. An example of such a per-unit payment limit is the 85% payment reduction factor applied to base acres receiving payments under either the PLC or ARC programs. The reduction factor is applied equally across all program payments irrespective of crop choice, farm size, AGI, or total value of payments. Some economists contend that such a payment reduction factor is generally applied for cost-saving reasons rather than for \"fairness\" or equity reasons that at least partially motivate per-person payment limits. "], "subsections": []}, {"section_title": "AGI Concerns: On- versus Off-farm Income", "paragraphs": ["The 2018 farm bill retained the $900,000 AGI limit established under the 2014 farm bill. This AGI limit applies to all farm income whether earned on the farm or off. Under the 2008 farm bill, the AGI limit was divided into two components: a $500,000 AGI limit for farm-earned income and a $750,000 AGI cap on nonfarm earned income. ", "Analysis by USDA (2016) found that fewer farms are affected by the single AGI cap ($900,000) compared with the multiple farm ($500,000) and nonfarm ($750,000) AGI caps of the 2008 farm bill. For example, while federal income tax data are not available for the $900,000 cap level, published data from 2013\u2014a year of record-high farm income\u2014found that only about 0.7% of all farm sole proprietors and share rent landlords reported total AGI in excess of $1 million. Thus, it is likely that consolidating the separate AGI farm and nonfarm limits into a single AGI limit with a higher bound has restored eligibility for farm program payments to some farm operations that had previously been disqualified. Other major exemptions from the AGI limit include state and local governments and agencies, federally recognized Indian tribes, and waivers under RCPP.", "The 2014 farm bill shifted the farm safety net focus away from traditional revenue support programs and toward crop insurance programs, which are not subject to the AGI cap. The 2018 farm bill maintains this emphasis on crop insurance as the foundational farm safety net program. During the eight-year period of 2011-2018, federal crop insurance premium subsidies averaged $6.4 billion annually. Extending the AGI cap to crop insurance subsidies was considered during both the 2014 and 2018 farm bill debates. However, concerns were raised that the elimination of subsidies for higher-income participants could affect overall participation in crop insurance and damage the soundness of the entire program. However, USDA has estimated that in most years, less than 0.5% of farms and less than 1% of premiums would be affected by the $900,000 income cap if it were extended to crop insurance subsidies as well as to farm program payments."], "subsections": [{"section_title": "Appendix. Supplementary Tables", "paragraphs": [], "subsections": []}]}]}]}}
{"id": "R44891", "title": "U.S. Role in the World: Background and Issues for Congress", "released_date": "2019-02-14T00:00:00", "summary": ["Some observers perceive that after remaining generally stable for a period of about 70 years, the U.S. role in the world\u2014meaning the overall character, purpose, or direction of U.S. participation in international affairs and the country's overall relationship to the rest of the world\u2014is undergoing a potentially historic change. A change in the U.S. role in the world could have significant and even profound effects on U.S. security, freedom, and prosperity. It could significantly affect U.S. policy in areas such as relations with allies and other countries, defense plans and programs, trade and international finance, foreign assistance, and human rights.", "The U.S. role in the world since the end of World War II in 1945 (i.e., over the past 70 years or so) is generally described as one of global leadership and significant engagement in international affairs. A key element of that role has been to defend and promote the liberal international order that the United States, with the support of its allies, created in the years after World War II. Other key elements have been to defend and promote freedom, democracy, and human rights as universal values, while criticizing and resisting authoritarian and illiberal forms of government where possible; and to oppose the emergence of regional hegemons in Eurasia or a spheres-of-influence world.", "The fact that the U.S. role in the world has been generally stable over the past 70 years does not necessarily mean that this role was the right one for the United States, or that it would be the right one in the future. Although the role the United States has played in the world since the end of World War II has many defenders, it also has critics, and the merits of that role have been a matter of long-standing debate among foreign policy specialists, strategists, policymakers, and the public, with critics offering potential alternative concepts for the U.S. role in the world. One major dimension of the debate is whether the United States should attempt to continue playing the active internationalist role that it has played for the past 70 years, or instead adopt a more-restrained role that reduces U.S. involvement in world affairs. A number of critics of the U.S. role in the world over the past 70 years have offered multiple variations on the idea of a more-restrained U.S. role.", "The overall issue for Congress is how to respond to recent developments regarding the U.S. role in the world. Potential key issues for Congress include but are not necessarily limited to the following:", "Is the U.S. role changing, and if so, in what ways? Should the U.S. role change? Is a change of some kind in the U.S. role unavoidable? How are other countries responding to a possibly changed U.S. role? Is a changed U.S. role affecting world order? What implications might a changed U.S. role in the world have for Congress's role relative to that of the executive branch in U.S. foreign policymaking? How might the operation of democracy in the United States affect the U.S. role in the world, particularly in terms of defending and promoting democracy and criticizing and resisting authoritarian and illiberal forms of government? Would a change in the U.S. role be reversible, and if so, to what degree?", "Congress's decisions on this issue could have significant implications for numerous policies, plans, programs, and budgets, and for the role of Congress relative to that of the executive branch in U.S. foreign policymaking."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides background information and issues for Congress regarding the U.S. role in the world, meaning the overall character, purpose, or direction of U.S. participation in international affairs and the country's overall relationship to the rest of the world. Some observers perceive that after remaining generally stable for a period of about 70 years, the U.S. role in the world is undergoing a potentially historic change. A change in the U.S. role in the world could have significant and even profound effects on U.S. security, freedom, and prosperity. It could significantly affect U.S. policy in areas such as relations with allies and other countries, defense plans and programs, trade and international finance, foreign assistance, and human rights. It could also have implications for future international order.", "The overall issue for Congress is how to respond to recent developments regarding the U.S. role in the world. Congress's decisions on this issue could have significant implications for numerous policies, plans, programs, and budgets, and for the role of Congress relative to that of the executive branch in U.S. foreign policymaking.", "A variety of other CRS reports address in greater depth specific policy areas mentioned in this report.", " Appendix A provides a glossary of some key terms used in this report, including role in the world , grand strategy , international order/world order , unipolar/bipolar/tripolar/multipolar , Eurasia , regional hegemon , spheres-of-influence world , geopolitics , hard power , and soft power . In this report, the term U.S. role in the world is often shortened for convenience to U.S. role .", "Footnotes in this report with citations taking up more than 10 lines of type have had their citations transferred to Appendix B ."], "subsections": []}, {"section_title": "Background on U.S. Role", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The U.S. role in the world since the end of World War II in 1945 (i.e., over the past 70 years or so) is generally described as one of global leadership and significant engagement in international affairs. Observers over the years have referred to the U.S. role in the world since World War II using various terms and phrases that sometimes reflect varying degrees of approval or disapproval of that role. It has been variously described as that of global leader, leader of the free world, superpower, hyperpower, indispensable power, system administrator, world policeman, or world hegemon. Similarly, the United States has also been described as pursuing an internationalist foreign policy, a foreign policy of global engagement or deep engagement, a foreign policy that provides global public goods, a foreign policy of liberal order building, liberal internationalism, or liberal hegemony, an interventionist foreign policy, or a foreign policy of seeking primacy or world hegemony."], "subsections": []}, {"section_title": "Key Elements", "paragraphs": [], "subsections": [{"section_title": "Creation and Defense of Liberal International Order", "paragraphs": ["A key element of the U.S. role in the world since World War II has been to defend and promote the liberal international order that the United States, with the support of its allies, created in the years after World War II. Although definitions of the liberal international order vary, key elements are generally said to include the following:", "respect for the territorial integrity of countries, and the unacceptability of changing international borders by force or coercion; a preference for resolving disputes between countries peacefully, without the use or threat of use of force or coercion, and in a manner consistent with international law; respect for international law, global rules and norms, and universal values, including human rights; strong international institutions for supporting and implementing international law, global rules and norms, and universal values; the use of liberal (i.e., rules-based) international trading and investment systems to advance open, rules-based economic engagement, development, growth, and prosperity; and the treatment of international waters, international air space, outer space, and (more recently) cyberspace as international commons.", "The liberal international order was created by the United States with the support of its allies in the years immediately after World War II. At that time, the United States was the only country with both the capacity and willingness to establish a new international order. U.S. willingness to establish and play a leading role in maintaining the liberal international order is generally viewed as reflecting a desire by U.S. policymakers to avoid repeating the major wars and widespread economic disruption and deprivation of the first half of the 20 th century\u2014a period that included World War I, the Great Depression, the rise of communism and fascism, the Ukrainian famine, the Holocaust, and World War II.", "U.S. willingness to establish and play a leading role in maintaining the liberal international order is also generally viewed as an act of national self-interest, reflecting a belief among U.S. policymakers that it would strongly serve U.S. security, political, and economic objectives. Supporters of the liberal international order generally argue that in return for bearing the costs of creating and sustaining the liberal international order, the United States receives significant security, political, and economic benefits, including the maintenance of a favorable balance of power on both a global and regional level, and a leading or dominant role in establishing and operating global institutions and rules for international finance and trade. Indeed, some critics of the liberal international order argue that it is primarily a construct for serving U.S. interests and promoting U.S. world primacy or hegemony. As discussed later in this report, however, the costs and benefits for the United States of the liberal international order are a matter of debate.", "Though often referred to as if it is a fully developed or universally established situation, the liberal international order, like other international orders that preceded it, is", "incomplete in geographic reach and in other ways; partly aspirational; not fixed in stone, but rather subject to evolution over time; sometimes violated by its supporters; resisted or rejected by certain states and nonstate actors; and subject to various stresses and challenges.", "Some observers, emphasizing points like those above, argue that the liberal international order is more of a myth than a reality. Other observers, particularly supporters of the order, while acknowledging the limitations of the order, reject characterizations of it as a myth and emphasize its differences from international orders that preceded it."], "subsections": []}, {"section_title": "Defense and Promotion of Freedom, Democracy, and Human Rights", "paragraphs": ["A second element of the U.S. role in the world since World War II has been to defend and promote freedom, democracy, and human rights as universal values, while criticizing and resisting authoritarian and illiberal forms of government where possible. This element of the U.S. role is viewed as consistent not only with core U.S. political values but also with a theory advanced by some observers (sometimes called the democratic peace theory) that democratic countries are more responsive to the desires of their populations and consequently are less likely to wage wars of aggression or go to war with one another."], "subsections": []}, {"section_title": "Prevention of Regional Hegemons in Eurasia", "paragraphs": ["A third element of the U.S. role in the world since World War II has been to oppose the emergence of regional hegemons in Eurasia or a spheres-of-influence world. This objective reflects a U.S. perspective on geopolitics and grand strategy developed during and in the years immediately after World War II, including in particular a judgment that\u2014given the amount of people, resources, and economic activity in Eurasia\u2014a regional hegemon in Eurasia would represent a concentration of power large enough to be able to threaten vital U.S. interests, and that Eurasia is not dependably self-regulating in terms of preventing the emergence of regional hegemons."], "subsections": []}]}, {"section_title": "Changes over Time", "paragraphs": ["Although the U.S. role in the world was generally stable over the past 70 years, the specifics of U.S. foreign policy for implementing that role have changed frequently for various reasons, including changes in administrations and changes in the international security environment. Definitions of the overall U.S. role have room within them to accommodate some flexibility in the specifics of U.S. foreign policy."], "subsections": []}, {"section_title": "Long-standing Debate over Its Merits", "paragraphs": ["The fact that the U.S. role in the world has been generally stable over the past 70 years does not necessarily mean that this role was the right one for the United States, or that it would be the right one in the future. Although the role the United States has played in the world since the end of World War II has many defenders, it also has critics, and the merits of that role have been a matter of long-standing debate among foreign policy specialists, strategists, policymakers, and the public, with critics offering potential alternative concepts for the U.S. role in the world.", "One major dimension of the debate is whether the United States should attempt to continue playing the active internationalist role that it has played for the past 70 years, or instead adopt a more-restrained role that reduces U.S. involvement in world affairs. A number of critics of the U.S. role in the world over the past 70 years have offered multiple variations on the idea of a more-restrained U.S. role.", "A second major dimension within the debate over the future U.S. role concerns how to balance or combine the pursuit of narrowly defined material U.S. interests with the goal of defending and promoting U.S. or universal values such as democracy, freedom, and human rights. A third major dimension concerns the balance in U.S. foreign policy between the use of hard power and soft power. Observers debating these two dimensions of the future U.S. role in the world stake out varying positions on these questions.", "The long-standing debate over the U.S. role in the world is discussed further below in the \" Issues for Congress \" section of this report, particularly the part entitled \" Should the U.S. Role Change? \""], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "Overview: Potential Key Questions", "paragraphs": ["The overall issue for Congress is how to respond to recent developments regarding the U.S. role in the world. Potential key issues for Congress include but are not necessarily limited to the following:", "Is the U.S. role changing, and if so, in what ways? Should the U.S. role change? Is a change of some kind in the U.S. role unavoidable? How are other countries responding to a possibly changed U.S. role? Is a changed U.S. role affecting world order? What implications might a changed U.S. role in the world have for Congress's role relative to that of the executive branch in U.S. foreign policymaking? How might the operation of democracy in the United States affect the U.S. role in the world? Would a change in the U.S. role be reversible, and if so, to what degree?", "Each of these issues is discussed briefly below."], "subsections": []}, {"section_title": "Is the U.S. Role Changing, and If So, in What Ways?", "paragraphs": [], "subsections": [{"section_title": "Some Observers See a Potentially Historic Change", "paragraphs": ["Some observers argue that under the Trump Administration, the U.S. role in the world is undergoing a potentially historic change. Although views among these observers vary in their specifics, a number of these observers argue that under the Trump Administration, the United States is voluntarily retreating from or abdicating the United States' post-World War II position of global leadership in favor of an approach to U.S. foreign policy that is more restrained, less engaged (or disengaged), more unilateralist, less willing to work through international or multilateral institutions and agreements, and/or less willing to promote and defend certain universal values. Within that general assessment, these observers argue that the United States more specifically is doing one or more of the following:", "becoming more skeptical of the value to the United States of certain allies, particularly those in Europe, and more transactional in managing U.S. alliance relationships; becoming less supportive of regional or multilateral trade agreements and the World Trade Organization (WTO) in favor of an approach to trade policy that relies more on protectionist measures and on negotiations aimed at reaching new or revised bilateral trade agreements, and which links trade actions more directly to other policy objectives; reducing, becoming more selective in, or becoming indifferent to efforts for defending and promoting freedom, democracy, and human rights as universal values, and for criticizing and resisting authoritarian and illiberal forms of government; and relying less on soft power, and more heavily on hard power, particularly military power.", "In support of this assessment, these observers tend to cite various actions by the Trump Administration, including the following:", "the Administration's emphasis on its \"America First\" theme and the concept of national sovereignty applied to both the United States and other countries as primary guideposts for U.S. foreign policy; actions (particularly in 2017) that these observers view as intended to weaken or \"hollow out\" the State Department\u2014including a relatively slow rate for forwarding nominations to fill senior positions in the department, and budget proposals to substantially reduce overall staffing and funding levels for the department\u2014as well as proposed reductions in funding for U.S. foreign assistance programs; U.S. withdrawal from the Trans-Pacific Partnership (TPP) regional trade agreement; the Paris climate agreement; the Iran nuclear agreement; and the Global Compact on Migration (GCM); a U.S. decision to not cooperate with the International Criminal Court (ICC); and a U.S. decision to limit U.S. exposure to decisions by the International Court of Justice (ICJ) by withdrawing from the Optional Protocol Concerning the Compulsory Settlement of Disputes to the Vienna Convention on Diplomatic Relations; mixed signals, including skeptical or critical comments by President Trump, regarding the value to the United States of allies, and particularly the NATO alliance, and a reported focus by President Trump, in assessing allies, on their defense spending levels and their trade imbalances with the United States; an apparent reluctance by President Trump to criticize Russia or to impose certain sanctions on Russia, and an apparent determination by President Trump to seek improved relations with Russia, despite various Russian actions judged by U.S. intelligence agencies and other observers to have been directed against the United States and U.S. overseas interests, particularly in Europe; a reduced U.S. level of involvement in, or U.S. disengagement from, the conflict in Syria, and U.S. acceptance of a reestablished Russian position as a major power broker in the Syrian situation and the Middle East in general; the nonattendance by then-Secretary of State Rex Tillerson at the rollout of the 2017 edition of the State Department's annual country reports on human rights practices around the world; infrequent or inconsistent statements by President Trump or other Administration officials in support of democracy and human rights, or criticizing human rights practices of authoritarian and illiberal governments; U.S. withdrawal from the United Nations Human Rights Council; U.S. actions to reduce the number of international refugees entering the United States; President Trump's reaction to the killing of journalist Jamal Khashoggi; and what these observers view as President Trump's apparent affinity for, or admiration of, the leaders of authoritarian and illiberal governments. ", "Some of the observers who argue that the U.S. role in the world is undergoing a potentially historic change under the Trump Administration oppose the change, while others support it, or at least certain aspects of it. Opponents tend to view the retreat from U.S. global leadership that they see as an unforced error of immense proportions\u2014as a needless and self-defeating squandering or throwing away of something of great value to the United States that the United States had worked to build and maintain for 70 years. Opponents argue that actions contributing to the U.S. retreat are weakening the United States and the U.S. position in the world by rupturing long-standing and valuable U.S. alliance relationships; isolating the United States on certain issues; devaluing or reducing U.S. soft power; making the United States appear less reliable as an ally or negotiating partner; creating vacuums in global leadership and regional power balances that other countries (including China, Russia, the European Union, individual European countries, Canada, Japan, Saudi Arabia, and Iran) are acting to fill, sometimes at the expense of U.S. interests; and weakening and causing doubts about the future of the U.S.-led international order.", "Supporters tend to view the change they see in the U.S. role, or at least certain aspects of it, as needed and appropriate, if not overdue, for responding to changed U.S. and global circumstances and for defending U.S. interests. Supporters argue that actions being implemented by the Trump Administration reflect a principled realism about what the United States can accomplish in the world; are reasserting the importance of U.S. sovereignty (and the concept of sovereignty in general as an organizing principle for international relations); are proving effective in standing up for U.S. interests in relations with China, as well as U.S. trade interests in general (including new trade agreements with South Korea, Mexico, and Canada); encouraging U.S. allies to make greater military and other contributions to their own security; enhancing deterrence of potential regional aggression by making potential U.S. actions less predictable to potential adversaries; avoiding potentially costly and unproductive commitments of U.S. lives and resources in places like Syria and Yemen; and are achieving progress or potential breakthroughs in terms of denuclearization negotiations with North Korea."], "subsections": []}, {"section_title": "Others See Less Change, and More Continuity", "paragraphs": ["Other observers see less change in the U.S. role in the world under the Trump Administration. They argue that although statements from President Trump sometimes suggest or imply a large-scale change in the U.S. role, actions taken by the Administration actually reflect a smaller amount of change, and more continuity with the U.S. role of the past 70 years. In support of this assessment, these supporters cite various actions by the Trump Administration, including the following:", "the Administration's December 2017 national security strategy (NSS) document, large portions of which reflect\u2014through multiple mentions of U.S. leadership, a general emphasis on great power competition with China and Russia, and strong support for U.S. alliances\u2014a perspective on the U.S. role in the world generally consistent with the U.S. role of the past 70 years, as well as actions the Trump Administration has taken in support of that perspective; the Administration's January 2018 unclassified summary of its supporting national defense strategy (NDS) document, which similarly reflects a perspective on the U.S. role in the world generally consistent with the U.S. role of the past 70 years; the Administration's October 2018 counterterrorism strategy document, which observers view as largely consistent with the counterterrorism strategies of previous administrations; the continuation (as opposed to winding down) of U.S. military operations in Afghanistan and the Middle East; Secretary of State Mike Pompeo's statement that he wants the State Department to \"get its swagger back\"; statements from senior U.S. officials reaffirming U.S. support for NATO; Administration actions to improve U.S. military capabilities in Europe for deterring potential Russian aggression in Europe; and U.S. actions to encourage NATO allies to spend more on defense and to take similar actions; the Administration's implementation of additional sanctions on Russia in response to Russian actions; the Administration's recent, more-confrontational policy toward China, and the Administration's plan to increase funding for U.S. foreign assistance programs to compete against China for influence in Africa, Asia, and the Americas; the Administration's articulation of the concept of a free and open Indo-Pacific (FOIP) region as a framework for U.S. foreign policy directed toward that part of the world; U.S. trade actions that, in the view of these observers, are intended to make free trade more sustainable over the long run by ensuring that it is fair to all parties, including the United States; and statements regarding human rights from then-U.S. Ambassador to the United Nations Nikki Haley and other Administration officials, as well as the U.S. withdrawal from the United Nations Human Rights Council, which in the view of these observers reflect U.S. support (rather than lack of support) for human rights. ", "Among those who see less change in the U.S. role in the world under the Trump Administration, arguments as to whether that is a good or bad thing are to some degree the obverse of those outlined earlier regarding the views of those who argue that the U.S. role in the world is undergoing a potentially historic change under the Trump Administration. In general, supporters of the U.S. role in the world of the past 70 years tend to support areas where they see less change under the Trump Administration, while those who advocate a more-restrained U.S. role have expressed disappointment at what they view as insufficient movement by the Trump Administration in that direction."], "subsections": []}, {"section_title": "Some Assess That Change Began Prior to Trump Administration", "paragraphs": ["Some observers argue that if the United States is shifting to a more-restrained role in the world, this change began not with the Trump Administration, but during the Obama Administration. In support of this view, these observers point to the Obama Administration's focus on reducing the U.S. military presence and ending U.S. combat operations in Iraq and Afghanistan in favor of focusing more on domestic U.S. rebuilding initiatives, the Obama Administration's restrained response to the conflict in Syria and to Russian actions in Crimea and eastern Ukraine, and the Obama Administration's policy toward Russia in general. Other observers argue that a shift to a more-restrained U.S. role in the world arguably began even sooner, under the George W. Bush Administration, when that Administration did not respond more strongly to Russia's 2008 invasion and occupation of part of Georgia, or under the Clinton Administration. For both groups of observers, a more-restrained U.S. role in the world under the Trump Administration may represent not so much a shift in the U.S. role as a continuation or deepening of a change that began in a prior U.S. administration."], "subsections": []}, {"section_title": "Others Say Degree of Change Is Currently Difficult to Assess", "paragraphs": ["Some observers argue that the question of whether the U.S. role is changing, and if so, in what ways, is difficult to assess, due to what these observers view as mixed, contradictory, or incoherent signals from the Trump Administration on issues such as policy toward Russia, the value of NATO, policy toward North Korea, and trade policy, among other matters. For some of these observers, these mixed signals appear to be rooted in what these observers see as basic differences between President Trump and certain senior Administration officials (or differences among those officials) on these matters, and in what these observers characterize as an unpredictable, impulsive, or volatile approach by President Trump to making and announcing foreign policy decisions.", "Regarding the final point above, supporters of the Trump Administration argue that U.S. foreign policy had become too predictable for its own good, and that adding an element of unpredictability to U.S. foreign policy is therefore advantageous. The Administration's January 2018 unclassified summary of its supporting national defense strategy document, for example, states that U.S. military operations in the future will be \"strategically predictable, but operationally unpredictable,\" meaning predictable in terms of overall goals, but unpredictable in terms of specific tactics for achieving those goals. Critics, while not necessarily objecting to the value of a certain degree of operational unpredictability, argue that the Trump Administration, through its recurring mixed signals and President Trump's approach to decisionmaking, has taken the idea of unpredictability too far, raising potential doubts in other countries about U.S. policy goals, consistency, resolve, or reliability as an ally or negotiating partner. Some observers see both potential advantages and potential disadvantages in an approach that features a substantial element of unpredictability.", "Some observers, viewing the difficulty of judging whether and how the U.S. role may have changed under the Trump Administration, have attempted to identify key or unifying characteristics of the Trump Administration's foreign policy or a so-called \"Trump Doctrine.\" These observers have reached varying conclusions as to what those key or unifying characteristics or a Trump Doctrine might be."], "subsections": []}, {"section_title": "Potential Assessments Combining These Perspectives", "paragraphs": ["The above four perspectives\u2014that there is a potentially historic change in the U.S. role; that there is less change, and more continuity; that if there is a change, it began prior to the Trump Administration; and that the degree of change is difficult to assess\u2014are not necessarily mutually exclusive. Assessments combining aspects of more than one of these four perspectives are possible."], "subsections": []}]}, {"section_title": "Should the U.S. Role Change?", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["In addition to the question of whether the U.S. role in the world is changing, another key issue for Congress is whether the U.S. role should change. As mentioned in the background section, the fact that the U.S. role in the world has been generally stable over the past 70 years does not necessarily mean that this role was the right one for the United States, or that it would be the right one in the future. Although the role the United States has played in the world since the end of World War II has many defenders, it also has critics, and the merits of that role have been a matter of long-standing debate among foreign policy specialists, strategists, policymakers, and the public, with critics offering potential alternative concepts for the U.S. role in the world.", "Debate over the merits of the U.S. role in the world since World War II has been fueled in recent years by factors such as changes in the international security environment, projections of U.S. federal budget deficits and the U.S. debt (which can lead to constraints on funding available for pursuing U.S. foreign policy, national security, and international economic policy goals), and U.S. public opinion on matters relating to U.S. foreign policy. Developments during the Trump Administration regarding possible changes in the U.S. role in the world have further contributed to the debate."], "subsections": []}, {"section_title": "Past Role vs. More-Restrained Role", "paragraphs": ["As mentioned earlier, a major dimension of the debate is whether the United States should attempt to continue playing the active internationalist role that it has played for the past 70 years, or instead adopt a more-restrained role that reduces U.S. involvement in world affairs. Among U.S. strategists and foreign policy specialists, advocates of a more-restrained U.S. role include (to cite a few examples) Andrew Bacevich, Doug Bandow, Ted Galen Carpenter, John Mearsheimer, Barry Posen, Christopher Preble, William Ruger, and Stephen Walt. These and other authors have offered multiple variations on the idea of a more-restrained U.S. role. Terms such as offshore balancing , offshore control , realism , strategy of restraint , or retrenchment have been used to describe some of these variations. These variations on the idea of a more-restrained U.S. role would not necessarily match in their details a changed U.S. role that might be pursued by the Trump Administration."], "subsections": [{"section_title": "Arguments in Favor of a More-Restrained U.S. Role", "paragraphs": ["Observers advocating a more-restrained U.S. role in the world make various arguments regarding the United States and other countries. Arguments that they make relating to the United States include the following:", "Costs and benefits. In terms of human casualties, financial and economic impacts, diplomatic impacts, and impacts on domestic U.S. values, politics, and society, the costs to the United States of defending and promoting the liberal international order have been underestimated and the benefits have been overestimated. U.S. interventions in the security affairs of Eurasia have frequently been more costly and/or less successful than anticipated, making a strategy of intervening less cost-effective in practice than in theory. U.S. interventions can also draw the United States into conflicts involving other countries over issues that are not vital or important U.S. interests. C apacity. Given projections regarding future U.S. budget deficits and debt, the United States in coming years will no longer be able to afford to play as expansive a role in the world as it has played for the past 70 years. Overextending U.S. participation in international affairs could lead to excessive amounts of federal debt and inadequately addressed domestic problems, leaving the United States poorly positioned for sustaining any future desired level of international engagement. P ast 70 years as a historical aberration. The U.S. role of the past 70 years is an aberration when viewed against the U.S. historical record dating back to 1776, which is a history characterized more by periods of restraint than by periods of high levels of international engagement. Returning to a more-restrained U.S. role would thus return U.S. policy to what is, historically, a more traditional policy for the United States. M oral standing. The United States has not always lived up to its own ideals, and consequently lacks sufficient moral standing to pursue a role that involves imposing its values and will on other countries. Attempting to do that through an interventionist policy can also lead to an erosion of those values at home. P ublic opinion. It is not clear that U.S. public opinion supports the idea of attempting to maintain a U.S. role in the world as expansive as that of the past 70 years, particularly if it means making trade-offs against devoting resources to domestic U.S. priorities. In public opinion polls, Americans often express support for a more-restrained U.S. role, particularly on issues such as whether the United States should act as the world's police force, funding levels for U.S. foreign assistance programs, U.S. participation in (and financial support for) international organizations, and U.S. defense expenditures for defending allies.", "Arguments that these observers make relating to other countries include the following:", "Growing wealth and power . Given the rapid growth in wealth and power in recent years of China and other countries, the United States is no longer as dominant globally as it once was, and is becoming less dominant over time, which will make it increasingly difficult or expensive and/or less appropriate for the United States to attempt to continue playing a role of global leadership. I deas about international order. Other world powers, such as China, have their own ideas about international order, and these ideas do not match all aspects of the current liberal international order. The United States should acknowledge the changing global distribution of power and work with China and other countries to define a new international order that incorporates ideas from these other countries. Eurasia as self-regulating. Given the growth in the economies of U.S. allies and partners in Europe and Asia since World War II, these allies and partners are now more capable of looking after their own security needs, and Eurasia can now be more self-regulating in terms of preventing the emergence of regional hegemons in Eurasia. Consequently, the level of U.S. intervention in the affairs of Eurasia can be reduced without incurring undue risk that regional hegemons will emerge there. The current substantial level of U.S. intervention in the affairs of Eurasia discourages countries in Eurasia from acting more fully on their own to prevent the emergence of regional hegemons. Hegemons and spheres of influence . Even if one or more regional hegemons were to emerge in Eurasia, this would not pose an unacceptable situation for the United States\u2014vital U.S. interests could still be defended. Similarly, the emergence of a spheres-of-influence world need not be unacceptable for the United States, because such a world would again not necessarily be incompatible with vital U.S. interests."], "subsections": []}, {"section_title": "Arguments in Favor of Continuing the U.S. Role of the Past 70 Years", "paragraphs": ["Observers who support a continuation of the U.S. role in the world of the past 70 years generally reject the above arguments and argue the opposite. Arguments that these observers make relating to the United States include the following:", "Costs and benefits. Although the costs to the United States of its role in the world over the past 70 years have been substantial, the benefits have been greater. The benefits are so long-standing that they can easily be taken for granted or underestimated. U.S. interventions in the security affairs of Eurasia, though not without significant costs and errors, have been successful in preventing wars between major powers and defending and promoting vital U.S. interests and values. A more-restrained U.S. role in the world might be less expensive for the United States in the short run, but would create a risk of damaging U.S. security, liberty, and prosperity over the longer run by risking the emergence of regional hegemons or a spheres-of-influence world. C apacity. Projections regarding future U.S. budget deficits and debt need to be taken into account, but even in a context of limits on U.S. resources, the United States is a wealthy country that can choose to play an expansive role in international affairs, and the costs to the United States of playing a more-restrained role in world affairs may in the long run be much greater than the costs of playing a more expansive role. Projections regarding future U.S. budget deficits and debt are driven primarily by decisions on revenues and domestic mandatory expenditures rather than by decisions on defense and foreign-policy-related expenditures. Consequently, these projections are an argument for getting the country's fiscal house in order primarily in terms of revenues and domestic mandatory expenditures, rather than an argument for a more-restrained U.S. role in the world. P ast 70 years as a historical aberration. Although a restrained U.S. foreign policy may have been appropriate for the United States in the 18 th and 19 th centuries, the world of the 18 th and 19 th centuries was quite different. For example, given changes in communication, transportation, and military technologies since the 18 th and 19 th centuries, the Atlantic and Pacific oceans are much less effective as geographic buffers between the United States and Eurasia today than they were in the 18 th and 19 th centuries. Experiences in more recent decades (including World Wars I and II and the Cold War) show that a more-restrained U.S. foreign policy would now be riskier or more costly over the long run than an engaged U.S. foreign policy. Moral standing. The United States, though not perfect, retains ample moral authority\u2014and responsibility\u2014to act as a world leader, particularly in comparison to authoritarian countries such as China or Russia. P ublic opinion. Other public opinion poll results show that Americans support a U.S. global leadership role.", "Arguments that these observers make relating to other countries include the following:", "Growing wealth and power . Although the wealth and power of countries such as China have grown considerably in recent years, future rates of growth for those countries are open to question. China faces the prospect of declining rates of economic growth and the aging and eventual shrinkage of its population, while Russia has a relatively small economy and is experiencing demographic decline. The United States has one of the most favorable demographic situations of any major power, and retains numerous advantages in terms of economic and financial strength, military power, technology, and capacity for innovation. Although the United States is no longer as dominant globally as it once was, it remains the world's most powerful country, particularly when all dimensions of power are taken into consideration. I deas about international order. The liberal international order reflects U.S. interests and values; a renegotiated international order incorporating ideas from authoritarian countries such as China would produce a world less conducive to defending and promoting U.S. interests and values. Americans have long lived in a world reflecting U.S. interests and values and would not welcome a world incorporating Chinese values on issues such as the rule of law; the scope of civil society; political and human rights; freedom of speech, the press, and information; and privacy and surveillance. Eurasia as self-regulating. Eurasia historically has not been self-regulating in terms of preventing the emergence of regional hegemons, and the idea that it will become self-regulating in the future is a risky and untested proposition. Hegemons and spheres of influence . A regional hegemon in Eurasia would have enough economic and other power to be able to threaten vital U.S. interests. In addition to threatening U.S. access to the economies of Eurasia, a spheres-of-influence world would be prone to war because regional hegemons historically are never satisfied with the extent of their hegemonic domains and eventually seek to expand them, coming into conflict with other hegemons. Leaders of regional hegemons are also prone to misjudgment and miscalculation regarding where their spheres collide."], "subsections": []}]}, {"section_title": "Narrowly Defined Material U.S. Interests and U.S. and Universal Values", "paragraphs": ["As also noted earlier, a second major dimension within the debate over the future U.S. role concerns how to balance or combine the pursuit of narrowly defined material U.S. interests with the goal of defending and promoting U.S. or universal values such as democracy, freedom, and human rights. Supporters of focusing primarily on narrowly defined material U.S. interests argue, among other things, that deterring potential regional aggressors and resisting the emergence of regional hegemons in Eurasia can require working with allies and partner states that have objectionable records in terms of democracy, freedom, and human rights. Supporters of maintaining a stronger focus on U.S. and universal values in the conduct of U.S. foreign policy argue, among other things, that these values help attract friends and allies in other countries, adding to U.S. leverage, and are a source of U.S. strength in ideological competitions with authoritarian competitor states."], "subsections": []}, {"section_title": "Balance of Hard and Soft Power", "paragraphs": ["As noted earlier, a third major dimension within the debate over the future U.S. role concerns the balance in U.S. foreign policy between the use of hard power and soft power. Some observers argue that a reduced reliance on soft power would undervalue soft power as a relatively low-cost tool for defending and promoting U.S. interests while making the United States more reliant on hard power, particularly military power, which might be a more expensive and/or less effective means for accomplishing certain goals. Other observers argue that the value of soft power is overrated, and that a greater reliance on hard power would be an appropriate response to an era of renewed great power competition."], "subsections": []}, {"section_title": "Costs and Benefits of Allies", "paragraphs": ["Within the overall debate over whether the U.S. role should change, one specific question relates to the costs and benefits of allies. As noted earlier, some observers believe that under the Trump Administration, the United States is becoming more skeptical of the value of allies, particularly those in Europe, and more transactional in managing U.S. alliance relationships.", "The U.S. approach to allies and alliances of the past 70 years reflected a belief that allies and alliances are of value to the United States for defending and promoting U.S. interests and for preventing the emergence of regional hegemons in Eurasia. This approach led to a global network of U.S. alliance relationships involving countries in Europe and North America (through NATO), East Asia (through a series of mostly bilateral treaties), and Latin America (through the multilateral Inter-American Treaty of Reciprocal Assistance, known commonly as the Rio Treaty or Rio Pact). ", "Skeptics of allies and alliances generally argue that their value to the United States is overrated; that allies are capable of defending themselves without U.S. help; that U.S. allies frequently act as free riders in their alliance relationships with the United States by shifting security costs to the United States; that in the absence of U.S. help, these allies would do more on their own to balance against potential regional hegemons; and that alliances create a risk of drawing the United States into conflicts involving allies over issues that are not vital to the United States.", "Supporters of the current U.S. approach to allies and alliances, while acknowledging the free-rider issue as something that needs to be managed, generally argue that alliances are needed and valuable for deterring potential regional aggressors and balancing against would-be potential hegemonic powers in Eurasia; that although allies might be capable of defending themselves without U.S. help, they might also choose, in the absence of U.S. help, to bandwagon with would-be regional hegemons (rather than contribute to efforts to balance against them); that alliances form a significant advantage for the United States in its dealings with other major powers, such as Russia and China (both of which largely lack similar alliance networks); that in addition to mutual defense benefits, alliances offer other benefits, particularly in peacetime, including sharing of intelligence, information, and technology and the cultivation of soft-power forms of cooperation; and that a transactional approach to alliances, which encourages the merits of each bilateral alliance relationship to be measured in isolation, overlooks the collective benefits of maintaining alliances with multiple countries in a region."], "subsections": []}, {"section_title": "U.S. Public Opinion", "paragraphs": ["U.S. public opinion can be an important factor in debates over the future U.S. role in the world. Among other things, public opinion can", "shape the political context (and provide the impulse) for negotiating the terms of, and for considering whether to become party to, international agreements; influence debates on whether and how to employ U.S. military force; and influence policymaker decisions on funding levels for defense, international affairs activities, and foreign assistance.", "Foreign policy specialists, strategists, and policymakers sometimes invoke U.S. public opinion poll results in debates on the U.S. role in the world. At least one has argued that the American people \"always have been the greatest constraint on America's role in the world.\" One issue relating to U.S. public opinion that observers are discussing is the extent to which the U.S. public may now believe that U.S. leaders have broken a tacit social contract under which the U.S. public has supported the costs of U.S. global leadership in return for the promise of receiving certain benefits, particularly steady increases in real incomes and the standard of living. Appendix F provides additional background information on U.S. public opinion regarding the U.S. role in the world."], "subsections": []}, {"section_title": "Additional Writings", "paragraphs": ["The foregoing covers only some of the more prominent arguments and counterarguments in the debate over the future U.S. role in the world. In addition to writings cited in footnotes to the above section, see Appendix C for additional examples of recent writings by observers involved in the debate."], "subsections": []}]}, {"section_title": "Is a Change of Some Kind in the U.S. Role Unavoidable?", "paragraphs": ["Another issue for Congress\u2014one that might be viewed as related to, or forming part of, the previous issue\u2014is whether a change of some kind in the U.S. role, whether desirable or not, is unavoidable due to factors such as", "the growth in recent decades in the wealth and power of China and other countries, and the effect this has on reducing the U.S. position of dominance in world affairs; constraints on U.S. resources, particularly given projected U.S. budget deficits and debt and competing domestic priorities; the gradual fading over time of collective memory of the major wars and widespread economic disruption and deprivation of the first half of the 20th century, and of how the U.S. role in the world of the last 70 years has been motivated at bottom by a desire to prevent a repetition of the events of that earlier era; and other factors, such as technological developments, that can change power dynamics among nations, influence international financial and economic flows and globalization in general, affect social cohesion and relationships between governments and the governed, affect the development and spread of political beliefs and ideologies, and empower nonstate organizations and individuals in ways not previously possible.", "Some observers\u2014particularly those who advocate a more-restrained U.S. role in the world\u2014might argue that factors such as those above make a change of some kind in the U.S. role unavoidable, regardless of whether such a change is deemed desirable. Others\u2014particularly those who advocate a continuation of the U.S. role in the world of the past 70 years\u2014might argue that factors such as those above might call for adjustments in the U.S. role, but not necessarily for a larger-scale change, and might even underscore the need for continuing the U.S. role in the world of the past 70 years.", "In assessing the question of whether a change of some kind in the U.S. role is unavoidable, key factors that Congress may consider include projected rates of economic growth and demographic change in both the United States and other countries, and the potential impacts of technological developments such as those relating to the internet; social media; cyber operations; digital manipulation of videos, photos, and other information (including so-called \"deep fake\" videos); additive manufacturing (aka 3D printing); cryptocurrencies; artificial intelligence; quantum computing; robotics; energy production and use; nanotechnology; and gene editing, to name just a few examples."], "subsections": []}, {"section_title": "How Are Other Countries Responding to a Possibly Changed U.S. Role?", "paragraphs": ["Another question for Congress concerns how other countries are responding to a possible change in the U.S. role in the world. The sections below provide some brief discussions on this question."], "subsections": [{"section_title": "Authoritarian and Illiberal Countries", "paragraphs": ["Particularly given the shift in the international security environment to an era of renewed great power competition, principally with China and Russia, as well as renewed ideological competition against 21 st -century forms of authoritarianism and illiberal democracy in Russia, China, and other countries, the ways that China, Russia, and other authoritarian or illiberal governments respond to a possible change in the U.S. role in the world could have major implications for U.S. national security."], "subsections": [{"section_title": "China", "paragraphs": ["The question of how China may be responding to a possibly changed U.S. role is of particular potential significance because while certain countries, such as Russia, are viewed by some observers as wanting to erode or tear down the liberal international order, China is the only country (other than the United States) that is generally viewed as being potentially capable of acting on its own to build a successor world order.", "Some observers believe that China has concluded, correctly or not, that the United States is retreating from or abandoning its role as global leader, and that China is responding to this assessment by expanding or accelerating its efforts to", "increase its economic and political role on the world stage, in part through its ambitious Belt and Road Initiative (BRI); separate the United States from its allies and raise doubts about the reliability of the United States as an ally or partner; work more closely with Russia with the aim of reducing U.S. influence in Eurasia; revise the liberal international order in ways that are conducive to Chinese values and interests; and perhaps eventually supplant the United States in the role of world leader.", "Other observers perceive that some in China, viewing certain actions by the Trump Administration\u2014including the Administration's \"trade war\" with China, the Administration's articulation of the concept of a free and open Indo-Pacific, and actions aimed at countering China's growing control over the South China Sea\u2014have concluded that the United States is seeking to contain China in a manner broadly consistent with how the United States pursued a policy of containment against the Soviet Union during the Cold War. Still others argue that the Administration's trade actions are leading to closer relations between China and other countries (including U.S. allies in Europe) that do not support certain U.S. trade-related actions."], "subsections": []}, {"section_title": "Russia", "paragraphs": ["Some observers believe that Russia, like China, has concluded, correctly or not, that the United States is retreating from or abandoning its role as global leader, and that Russia is responding to this assessment by continuing efforts aimed at", "establishing greater Russian influence over or control of countries on its periphery, and more generally, reestablishing Russia as a major world power; separating the United States from transatlantic allies and weakening the NATO alliance; working more closely with China with the aim of reducing U.S. influence in Eurasia; and raising doubts about the merits of liberal democracy while promoting illiberal and authoritarian approaches to government in Europe and elsewhere.", "Although Russia, in the eyes of some of these observers, was originally hopeful about establishing better relations with the United States under the Trump Administration, these observers now perceive that Russia has largely given up on this possibility, and now sees a prospect of long-term confrontation with the United States.", "Some observers have expressed concern that recent U.S. actions, including U.S. sanctions against Russia and the Trump Administration's recent, more-confrontational policy toward China, are helping to push Russia and China closer to one another politically, toward an entente or some other form of strategic cooperation, to the potential or actual detriment of U.S. interests in Eurasia and elsewhere. They argue that U.S. policymakers should pay attention to how U.S. actions could have the effect of encouraging or strengthening such Sino-Russian strategic cooperation, given the combined economic resources, military capabilities, and informational capabilities of China and Russia, and their common goals of separating the United States from its allies, reducing U.S. influence in Eurasia, and raising doubts about the merits of liberal democracy while promoting illiberal and authoritarian approaches to government.", "Other observers argue that while Russia is working more closely with China to reduce U.S. influence in Eurasia, Russia is at the same time wary of China's continued growth in wealth and power, and of how that might eventually lead to China becoming the dominant power in Eurasia, with Russia being relegated to a secondary or subordinate status. How that might affect Russia's response to a changed U.S. role in the world, particularly over the longer run, is not clear."], "subsections": []}, {"section_title": "Authoritarian and Illiberal Countries in General", "paragraphs": ["Some observers argue that what they view as the Trump Administration's reduced or more selective emphasis on, or indifference to, defending and promoting freedom, democracy, and human rights as universal values, and on criticizing and resisting authoritarian and illiberal forms of government, as well as President Trump's apparent affinity for, or admiration of, the leaders of authoritarian and illiberal governments, is emboldening the leaders of authoritarian and illiberal governments to take increased or accelerated actions\u2014including actions for suppressing political opposition and dissent, and for reducing freedom of the press\u2014that are aimed at consolidating or strengthening their authoritarian or illiberal forms of government and perhaps spreading them to other countries. Countries sometimes mentioned in connection with this point include China, Russia, Turkey, Hungary, Poland, the Philippines, Egypt, Syria, and Saudi Arabia, to list some examples.", "Actions by authoritarian and illiberal governments along these lines could contribute to a resurgent global challenge that some observers perceive to democracy as a form of government and to the idea that freedom, democracy, and human rights are universal values. The 2019 edition of Freedom House's annual report on freedom in the world, for example, states that", "In 2018, [the annual] Freedom in the World [report] recorded the 13th consecutive year of decline in global freedom. The reversal has spanned a variety of countries in every region, from long-standing democracies like the United States to consolidated authoritarian regimes like China and Russia. The overall losses are still shallow compared with the gains of the late 20th century, but the pattern is consistent and ominous. Democracy is in retreat\u2026.", "Victories for antiliberal movements in Europe and the United States in recent years have emboldened their counterparts around the world, as seen most recently in the election of Jair Bolsonaro as president of Brazil.", "These movements damage democracies internally through their dismissive attitude toward core civil and political rights, and they weaken the cause of democracy around the world with their unilateralist reflexes. For example, antiliberal leaders' attacks on the media have contributed to increasing polarization of the press, including political control over state broadcasters, and to growing physical threats against journalists in their countries. At the same time, such attacks have provided cover for authoritarian leaders abroad, who now commonly cry \"fake news\" when squelching critical coverage\u2026.", "Similarly, punitive approaches to immigration are resulting in human rights abuses by democracies\u2014such as Australia's indefinite confinement of seaborne migrants in squalid camps on the remote island of Nauru, the separation of migrant children from their detained parents by the United States, or the detention of migrants by Libyan militias at the behest of Italy\u2014that in turn offer excuses for more aggressive policies towards migrants and refugees elsewhere in the world. Populist politicians' appeals to \"unique\" or \"traditional\" national values in democracies threaten the protection of individual rights as a universal value, which allows authoritarian states to justify much more egregious human rights violations. And by unilaterally assailing international institutions like the United Nations or the International Criminal Court without putting forward serious alternatives, antiliberal governments weaken the capacity of the international system to constrain the behavior of China and other authoritarian powers.", "The gravity of the threat to global freedom requires the United States to shore up and expand its alliances with fellow democracies and deepen its own commitment to the values they share. Only a united front among the world's democratic nations\u2014and a defense of democracy as a universal right rather than the historical inheritance of a few Western societies\u2014can roll back the world's current authoritarian and antiliberal trends. By contrast, a withdrawal of the United States from global engagement on behalf of democracy, and a shift to transactional or mercenary relations with allies and rivals alike, will only accelerate the decline of democratic norms\u2026.", "The stakes in this struggle are high. For all the claims that the United States has lost global influence over the past decade, the reality is that other countries pay close attention to the conduct of the world's oldest functioning democracy. The continuing deterioration of US democracy will hasten the ongoing decline in global democracy. Indeed, it has already done so.", "Ronald Reagan declared in his first inaugural address, \"As we renew ourselves here in our own land, we will be seen as having greater strength throughout the world. We will again be the exemplar of freedom and a beacon of hope for those who do not now have freedom.\" Nearly four decades later, the idea that the United States is such an exemplar is being steadily discredited\u2026.", "Our poll found that a strong majority of Americans, 71 percent, believe the US government should actively support democracy and human rights in other countries. But America's commitment to the global progress of democracy has been seriously compromised by the president's rhetoric and actions. His attacks on the judiciary and the press, his resistance to anticorruption safeguards, and his unfounded claims of voting fraud by the opposition are all familiar tactics to foreign autocrats and populist demagogues who seek to subvert checks on their power.", "Such leaders can take heart from Trump's bitter feuding with America's traditional democratic allies and his reluctance to uphold the nation's collective defense treaties, which have helped guarantee international security for decades. As former US defense secretary James Mattis put it in his resignation letter, \"While the US remains the indispensable nation in the free world, we cannot protect our interests or serve that role effectively without maintaining strong alliances and showing respect to those allies.\"", "Trump has refused to advocate for America's democratic values, and he seems to encourage the forces that oppose them. His frequent, fulsome praise for some of the world's worst dictators reinforces this perception. Particularly striking was his apparent willingness, at a summit in Helsinki, to accept the word of Vladimir Putin over his own intelligence agencies in assessing Russia's actions in the 2016 elections.", "The president's rhetoric is echoed in countries with weaker defenses against attacks on their democratic institutions, where the violation of norms is often followed by systemic changes that intensify repression and entrench authoritarian governance\u2026.", "As the United States ceases its global advocacy of freedom and justice, and the president casts doubt on the importance of basic democratic values for our own society, more nations may turn to China, a rising alternative to US leadership. The Chinese Communist Party has welcomed this trend, offering its authoritarian system as a model for developing nations. The resulting damage to the liberal international order\u2014a system of alliances, norms, and institutions built up under Trump's predecessors to ensure peace and prosperity after World War II\u2014will not be easily repaired after he leaves office.", "Other observers argue that what they view as the Trump Administration's reduced or more selective emphasis on, or indifference to, defending and promoting human rights may be tacitly encouraging violations by other governments around the world of basic human rights\u2014including extrajudicial killings, mass atrocities, and forced relocations\u2014by sending a signal to those governments that they can commit such acts without having to fear repercussions from the United States. Still other observers, perhaps particularly supporters of the Trump Administration's foreign policy, might argue that violations of human rights predate the Trump Administration and are more of a consequence of changes in foreign governments and the international security environment."], "subsections": []}]}, {"section_title": "U.S. Allies and Current or Emerging Partner Countries", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["Given the significant role of alliances and partner relationships in U.S. foreign policy and defense strategy, reactions by U.S. allies and current or emerging partner countries to a possible change in the U.S. role in the world could have major implications for U.S. national security. Among other things, they could affect specific U.S. foreign policy and defense initiatives that could depend on or benefit from allied or partner support. More generally, they could have implications for what are sometimes referred to as the balance-vs.-bandwagon and free-rider issues.", "The balance-vs.-bandwagon issue refers to whether other countries choose to counter (i.e., balance against) potential regional hegemons, or instead become more accommodating or deferential toward (i.e., bandwagon with) those potential regional hegemons. For observers who assess that the United States has shifted to a more-restrained U.S. role in the world, the situation provides a test\u2014although not one with precisely the features they might have designed\u2014of a question long argued by strategists, political scientists, and others involved in the debate over the merits of the U.S. role in the world of the past 70 years: Would U.S. allies and partner countries respond to a more-restrained U.S. role by taking stronger actions on their own to balance against potential regional hegemons in Eurasia (i.e., China and Russia), or would they instead respond by bandwagoning with those potential regional hegemons?", "In discussions of the balance-vs.-bandwagon issue, supporters of continuing the U.S. role of the past 70 years tend to argue that a more-restrained U.S. role in the world could encourage enough of these countries to bandwagon rather than balance that it would shift the global balance of power and regional balances of power against the United States. Those making this argument tend to believe that strong actions by the United States to balance against potential regional hegemons give other countries more confidence to do the same, encouraging what is (for these observers) a virtuous cycle in the direction of balancing against potential regional hegemons.", "Supporters of a more-restrained U.S. role in the world tend to argue the obverse\u2014that a more-restrained U.S. role would encourage more of these countries, out of a sense of self-preservation, to balance against rather than bandwagon with potential regional hegemons, helping to preserve global and regional balances of power that are favorable to the United States at lower cost to the United States. Those making this argument tend to believe that strong actions by the United States to balance against potential regional hegemons provide room for other countries to act as free riders under the U.S. security umbrella by reducing their own efforts to balance those potential regional hegemons, and that a more-restrained U.S. role will help address a long-term challenge that some observers believe the United States has faced in reducing the free-rider effect among its allies."], "subsections": []}, {"section_title": "Europe (Other Than Russia) and Canada", "paragraphs": ["The transatlantic alliance\u2014the alliance of the United States and Canada with the United Kingdom and other European countries, particularly under the NATO treaty\u2014is generally viewed as a bedrock of post-World War II U.S. national security strategy and a key supporting element of the U.S. role in the world since World War II. Some observers are concerned that President Trump's skeptical or critical views about NATO and other actions by the Trump Administration are straining, weakening, or threatening to rupture the transatlantic alliance, perhaps permanently, with potentially significant or profound effects for U.S. security and diplomacy. Other observers argue that the transatlantic alliance has weathered strains in the past and is doing so again now.", "Within the general issue of the status of the transatlantic alliance, the free-rider issue and how to address it has been a recurring concern for the United States in its relationship with its NATO allies, where it forms part of a long-standing issue sometimes referred to as the burden-sharing issue. The Trump Administration and its supporters argue that President Trump's skeptical and critical views about NATO, combined with sustained pressure on NATO from the President Trump and senior Administration officials for those countries to spend more on their own defense capabilities, have had the effect of extracting stronger commitments from the NATO allies about increasing their defense spending levels\u2014something that previous U.S. administrations had repeatedly tried to obtain, but with little success. Critics of the Trump Administration agree with a goal of reducing free riding within the alliance where possible, but argue that the commitments on increased defense spending recently articulated by NATO allies do not go substantially beyond commitments those allies made prior to the start of the Trump Administration, and are not worth the damage to alliance relationships that was caused by the confrontational tactics employed by the Trump Administration to obtain them.", "A number of European countries appear to have responded to a possible change in the U.S. role in the world by announcing an intention to take actions to increase their ability to act autonomously and independently from the United States. Actions that European countries might take autonomously or independent of the United States might or might not be viewed by U.S. observers as being in the U.S. interest. The member states of the European Union (EU) have announced steps to increase the EU's ability to act on security issues, and the Baltic and Nordic states (i.e., countries in Europe that are among those relatively close to Russia) have announced actions to increase their defense capabilities and work more closely with one another on defense and other security issues. European countries have also announced or taken steps to defend existing international trade arrangements and the continued implementation of the Iran nuclear agreement. Some press reports suggest that the Trump Administration's policies toward U.S. allies in Europe may have raised doubts among those allies about the reliability of the United States as an ally, and may have encouraged Germany to work more closely with Russia, at least on trade issues."], "subsections": []}, {"section_title": "Asia and Indo-Pacific", "paragraphs": ["In Asia and the Indo-Pacific, supporters of a more-restrained U.S. role in the world might argue that Japan, Vietnam, Australia, New Zealand, and India are taking (or appear increasingly ready to take) greater actions to counter China in various parts of the Indo-Pacific region. Supporters of continuing the U.S. role in the world of the past 70 years, on the other hand, might argue that the Philippines under Philippine President Rodrigo Duterte has adopted a largely nonconfrontational policy toward China regarding China's actions in the South China Sea, that the ASEAN countries as a group are split on the question of how much to confront China regarding China's actions in the South China Sea, that the question of policy toward China has been a matter of debate in Australia, and that there may be limits to how far and how fast India is willing to go in terms of increasing its efforts to counter China and cooperate with the United States, Japan, and Australia in countering China.", "Japan responded to the U.S. withdrawal from the TPP negotiations by leading an effort to finalize the agreement among the 11 remaining partners in the pact\u2014an action that may help forestall the emergence of a more China-centric trading system in the Indo-Pacific region, but which also left the United States on the outside of a major regional trade pact. Japan also supports the concept of a free and open Indo-Pacific\u2014indeed, officials in Japan (and India) articulated the Indo-Pacific concept before it was adopted as a policy initiative by the Trump Administration\u2014and is taking a variety of actions to support the concept."], "subsections": []}, {"section_title": "Latin America and Africa", "paragraphs": ["Some observers argue that certain Latin American and African countries have concluded, correctly or not, that the United States has reduced its engagement with them, and as a consequence have become more open to Chinese overtures for expanded economic and other ties. More recently, senior Trump Administration officials have traveled to Latin America to underscore the U.S. commitment to the region and to caution countries there about the potential downsides for those countries of increasing their engagement and cooperation with China."], "subsections": []}]}, {"section_title": "Countries in General", "paragraphs": ["Observing the reactions of various countries around the world to the Trump Administration's foreign policy, two observers stated in March 2018 that President Trump \"is reshaping the way other states interact with America and with one another,\" and that \"as Trump shakes up American policy, he is also shaking up the policies of countries around the globe.\" They state that", "These global responses, however, are neither as uniform nor as straightforward as one might expect. Policy responses to Trump's America First agenda can be separated into two baskets: those by countries that mostly decry Trump's rhetoric and policies as a crisis of American global leadership, and those by countries that mostly welcome those rhetoric and policies as an opportunity. Within those baskets, there are a total of nine analytically distinct\u2014yet not mutually exclusive\u2014approaches.", "These approaches run the gamut from resistance to appeasement to exploitation, and have varying prospects for the states pursuing them and varying implications for U.S. global interests. Some of these behaviors are relatively new; others existed prior to Trump and have simply been accentuated by his agenda. Yet all of these behaviors are shifting the relationship between the United States and the world, and all of them will affect the contours of the international environment. Both the prevalence and the effectiveness of these behaviors, in turn, will be affected by how Trump and his ever-shifting cast of advisers chart America's course during the remainder of his presidency, and by how permanent the changes Trump has already made turn out to be.", "After surveying how various countries are responding, the authors conclude their discussion as follows:", "Over a year into Trump's presidency, the basic patterns of the world's response are coming into sharper focus. Some countries are seeking to minimize or compensate for the effects of an America First agenda; others are seeking to make the most of them. Yet governments around the world are adjusting in some way or another, which is itself a testament to just how disruptive Trump's presidency has already been.", "Some of the strategies that foreign actors are pursuing do have potential benefits for the United States, particularly insofar as they lead to greater and perhaps more equitable efforts to sustain the post-World War II international order. Yet there are inherent limits to allied efforts to pick up the geopolitical slack that the United States is creating, and America's own interests will not be as well served by those efforts as they would be by deeper U.S. engagement to shape key negotiations and outcomes. Other strategies, such as hijacking and exploiting the vacuum, are far more dangerous for the United States and the broader global order. Overall, it thus appears that the liabilities of these patterns of global adjustment significantly outweigh the benefits from a U.S. perspective. To put it more sharply, it is surely troubling that many democracies and longtime U.S. partners are scrambling to mitigate the effects of America First, while a number of revisionist or authoritarian powers look to take advantage.", "Global adjustment to America First is a process, however, and one that has not reached its conclusion. Rather, in a climate of great geopolitical uncertainty, most states appear to be feeling their way and hedging their bets across a range of responses because they are unsure of which is optimal. Germany, for example, has pursued all five of the responses undertaken by states that are mostly discomfited by Trump's approach. Many other states have pursued a similarly diverse range of options as they try to discern where, precisely, Trump's America is headed.", "This uncertainty leads to a further point, which is that the current instability in U.S. policy could easily shift the patterns of response we have described. Although the America First label and much of the president's rhetoric has remained relatively consistent, there have been significant debates within the administration on what it means in practice on any given policy dispute. The outcomes of those disputes, in turn, seem to be heavily dependent on the rising and declining influence of key personnel, which has itself been an especially fluid variable in this administration.\u2026 In short, if global reactions to Trump's presidency reflect global assessments of where that presidency is headed, then continued volatility in U.S. policy so far is likely to cause continued volatility in patterns of global response\u2026.", "\u2026 international responses to America First will depend heavily on how lasting other countries assume that shift to be. If international observers conclude that America First is here to stay, then some approaches\u2014hedging, exploiting the vacuum, America First as a model\u2014will become more appealing, while others\u2014riding out the storm, hugging and appeasing\u2014will seem less feasible. If, however, states conclude that America First is more the aberration than the norm, they will be cautious about pursuing strategies that carry great risk should U.S. policy \"snap back\" in the foreseeable future. In this, as in so many areas, the effects of the Trump era will be determined by how long that era ends up lasting.", "The discussion above is only one perspective on the issue of how other countries are responding to a possible change in the U.S. role in the world. Other observers may differ regarding how to characterize the ways that certain countries are responding, or the resulting costs and benefits to the United States of those responses."], "subsections": []}]}, {"section_title": "Is a Changed U.S. Role Affecting World Order?", "paragraphs": ["Another issue for Congress is whether a changed U.S. role in the world is affecting world order in some way. As mentioned earlier, certain countries, such as Russia, are viewed by some observers as wanting to erode or tear down the liberal international order, while China is generally viewed as being potentially capable not only of challenging key elements of the current world order, but of acting on its own to revise the current world order or build a new successor world order. Whether caused primarily by a change in the U.S. role in the world or by one or more other factors, a collapse of the liberal international order could lead to the emergence of a less ordered world or a new international order based on a different set of characteristics and values\u2014outcomes that could have significant and potentially profound implications for U.S. security, freedom, and prosperity.", "Some observers\u2014particularly those who believe that the U.S. role is undergoing a potentially historic change\u2014argue that the change in the U.S. role is contributing, perhaps substantially, to a weakening, erosion, or potential collapse of the liberal international order. Other observers argue that a weakening or erosion of the liberal international order is less a consequence of a changed U.S. role in the world, and more a reflection of the growth in wealth and power of China and other countries and the effect this is having on reducing U.S. dominance in world affairs.", "Still other observers argue that the weakening, erosion, or potential collapse of the liberal international order has been exaggerated. They might argue that the U.S. role in the world has not changed as much as others have argued, that the institutions undergirding the order are stronger or more resilient than others have argued, that China is more interested in revising than replacing the liberal international order, that China and Europe are taking steps to buttress the trade aspects of the order, or some combination of these points."], "subsections": []}, {"section_title": "What Implications Might a Changed U.S. Role Have for Congress?", "paragraphs": ["Another issue for Congress is what implications a changed U.S. role might have for Congress, particularly regarding the preservation and use of congressional powers and prerogatives relating to foreign policy, national security, and international economic policy, and more generally the role of Congress relative to that of the executive branch in U.S. foreign policymaking. ", "Article I, Section 8, of the Constitution vests Congress with several powers that can bear on the U.S. role in the world, while Article II, Section 2, states that the President shall have power to make treaties, by and with the advice and consent of the Senate, provided two-thirds of the Senators present concur. Congress can also influence the U.S. role in the world through, among other things, its \"power of the purse\" (including its control over appropriations for the Department of Defense, the Department of State, and foreign assistance programs); authorizations for the use of military force; approval of trade agreements and other agreements; the Senate's power to confirm the President's nominees for certain executive branch positions (including the Secretaries and other high-ranking officials in the Departments of State and Defense, as well as U.S. ambassadors); and general oversight of executive branch operations.", "While the Constitution enumerates certain specific powers for Congress and the executive branch that bear on U.S. foreign policy, various observers over the years have argued that the Constitution in effect sets the stage for a perpetual debate regarding the relative roles of Congress and the executive branch in U.S. foreign policymaking. From a congressional perspective, questions in this debate in recent years have included", "whether Congress over the years has ceded too much authority to the executive branch in the area of war powers\u2014and what the meaning of the war powers function might be in today's world, given ongoing counterterrorist operations, so-called hybrid warfare and gray-zone operations, and cyberwarfare; whether Congress should consider legislation that would limit the President's authority to withdraw the United States from NATO without two-thirds consent of the Senate; whether Congress over the years has ceded too much authority to the executive branch in the area of tariffs and trade negotiations; whether the executive branch is following congressional direction for spending funds and implementing programs bearing on U.S. foreign policy; and whether the executive branch is keeping Congress adequately informed regarding U.S. diplomacy with other countries and U.S. government operations in other countries bearing on the U.S. role in the world, including those carried out by U.S. intelligence agencies or U.S. special operations forces.", "In a context of a potentially historic change in the U.S. role in the world, a key issue for Congress is whether the general pattern of presidential and congressional activities in foreign policy-related areas that developed over the past 70 years would continue to be appropriate in a situation of a changed U.S. role. Regarding this issue, one observer stated in February 2017 that", "Like other wide congressional grants of authority to the executive branch\u2014the power to levy \"emergency\" tariffs comes to mind\u2014the vast discretion over immigration Trump has inherited was a product of a different time.", "Lawmakers during the post-World War\u2009II era assumed presidents of both parties agreed on certain broad lessons of prewar history, such as the need to remain widely engaged through trade and collective security, and the importance of humanitarian values\u2014\"soft power\"\u2014in U.S. foreign policy.", "They did not anticipate today's breakdown in national consensus, much less that heirs to the America Firsters who had failed to attain national power before World War II could ever attain it afterward.", "Congressional decisions on issues relating to the U.S. role in the world could include measures affecting areas such as war powers, tariffs and trade negotiations, use of appropriated funds for foreign policy-related programs, and executive branch actions to keep Congress informed of U.S. government operations in other countries.", "A related potential issue for Congress is whether a change in the U.S. role would have any implications for congressional organization, capacity, and operations relating to foreign policy, national security, and international economic policy. Congress's current organization, capacity, and pattern of operations for working on these issues evolved during a long period of general stability in the U.S. role, and may or may not be optimal for carrying out Congress's role in U.S. foreign policy given a changed U.S. role."], "subsections": []}, {"section_title": "How Might the Operation of Democracy in the United States Affect the U.S. Role?", "paragraphs": ["Another potential issue for Congress is how the operation of democracy in the United States might affect the U.S. role in the world, particularly in terms of defending and promoting democracy and criticizing and resisting authoritarian and illiberal forms of government. During the Cold War\u2014a period that featured an ongoing ideological competition between the United States and the Soviet Union regarding the relative merits of Western-style democracy and Soviet-style governance\u2014the effective operation of U.S. democracy at the federal level and lower levels was viewed as helpful for arguing on the world stage that Western-style democracy was superior, for encouraging other countries to adopt that model, and for inspiring people in the Soviet Union and other authoritarian countries to resist authoritarianism and seek change in the direction of more democratic forms of government. The ability of the United State to demonstrate the effectiveness of democracy as a form of government was something that in today's parlance would be termed an element of U.S. soft power.", "The end of the Cold War in 1989-1991 and the start of the post-Cold War era in the early 1990s led to a diminution in the ideological debate about the relative merits of democracy versus authoritarianism as forms of government. As a possible consequence, there may have been less of a perceived need during this period for focusing on the question of whether the operation of U.S. democracy was being viewed positively or otherwise by observers in other countries.", "As discussed in another CRS report, the shift in the international environment over the past few years from the post-Cold War era to a new situation featuring renewed great power competition has led to a renewed ideological debate about the relative merits of Western-style democracy versus 21 st -century forms of authoritarian and illiberal government. Articles in China's state-controlled media, for example, sometimes criticize the operation of U.S. democracy and argue that China's form of governance is more advantageous, and at least one Russian official has argued that Russia's authoritarian form of government, which he referred to as \"sovereign democracy,\" offers certain advantages over Western-style democracy. The potential issue for Congress is whether, in a period of renewed ideological competition, there is now once again a need for focusing more on the question of whether the operation of U.S. democracy is being viewed positively or otherwise by observers in other countries."], "subsections": []}, {"section_title": "Would a Change in the U.S. Role Be Reversible?", "paragraphs": ["Another potential issue for Congress is whether a change in the U.S. role in the world would at some point in the future be reversible, should U.S. policymakers in the future desire to return to a U.S. role in the world more like that of the past 70 years. Potential questions for Congress include the following:", "What elements of change in the U.S. role might be more reversible, less reversible, or irreversible? What elements might be less reversible due to technological developments, changes in international power dynamics, or changes in U.S. public opinion? How much time and effort would be required to implement a return to a U.S. role like that of the past 70 years? How might the issue of reversibility be affected by the amount of time that a change in the U.S. role remains in place before an attempt might be made to reverse it? How might decisions that Congress and the executive branch make in the near term affect the question of potential downstream reversibility? What actions, if any, should be taken now with an eye toward preserving an option for reversing nearer-term changes in the U.S. role? What are the views of other countries regarding the potential reversibility of a change in the U.S. role, and how might those views affect the foreign policies of those countries? ", "Appendix A. Glossary of Selected Terms", "Some key terms used in this report include the following:", "Role in the world", "The term role in the world generally refers in foreign policy discussions to the overall character, purpose, or direction of a country's participation in international affairs or the country's overall relationship to the rest of the world. A country's role in the world can be taken as a visible expression of its grand strategy (see next item). In this report, the term U.S. role in the world is often shortened for convenience to U.S. role .", "Grand strategy", "The term grand strategy generally refers in foreign policy discussions to a country's overall approach for securing its interests and making its way in the world, using all the national instruments at its disposal, including diplomatic, informational, military, and economic tools (sometimes abbreviated in U.S. government parlance as DIME). A country's leaders might deem elements of a country's grand strategy to be secret, so that assessments, assumptions, or risks included in the strategy are not revealed to potential adversaries. Consequently, a country's leaders might say relatively little in public about the country's grand strategy. As mentioned above, however, a country's role in the world can be taken as a visible expression of its grand strategy. For the United States, grand strategy can be viewed as strategy at a global or interregional level, as opposed to U.S. strategies for individual regions, countries, or issues.", "International order/world order", "The term international order or world order generally refers in foreign policy discussions to the collection of organizations, institutions, treaties, rules, norms, and practices that are intended to organize, structure, and regulate international relations during a given historical period. International orders tend to be established by major world powers, particularly in the years following wars between major powers, though they can also emerge at other times. Though often referred to as if they are fully developed or firmly established situations, international orders are usually incomplete, partly aspirational, sometimes violated by their supporters, rejected (or at least not supported) by certain states and nonstate actors, and subject to various stresses and challenges.", "Unipolar/bipolar/tripolar/multipolar", "In foreign policy discussions, terms like unipolar , bipolar , tripolar , and multipolar are sometimes used to refer to the number of top-tier world powers whose actions tend to characterize or give structure to a given historical period's international security situation. The Cold War that lasted from the late 1940s to the late 1980s or early 1990s is usually described as a bipolar situation featuring a competition between two superpowers (the United States and the Soviet Union) and their allies. The post-Cold War era, which followed the Cold War, is sometimes described as the unipolar moment, with the United States being the unipolar power, meaning the world's sole superpower.", "As discussed in another CRS report, observers have concluded that in recent years, there has been a shift from the post-Cold War era to a new international security situation characterized by renewed great power competition between the United States, China, and Russia, leading observers to refer to the new situation as a tripolar or multipolar world. Observers who might list additional countries (or groups of countries, such as the European Union) as additional top-tier world powers, along with the United States, China, and Russia, might also use the term multipolar.", "Eurasia", "The term Eurasia is used in this report to refer to the entire land mass that encompasses both Europe and Asia, including its fringing islands, extending from Portugal on its western end to Japan on its eastern end, and from Russia's Arctic coast on its northern edge to India on its southern edge, and encompassing all the lands and countries in between, including those of Central Asia, Southwest Asia, South Asia, and Southeast Asia. Eurasia's fringing islands include, among others, the United Kingdom and Ireland in Europe, Sri Lanka in the Indian Ocean, the archipelagic countries of Southeast Asia, and Japan. There are also other definitions of Eurasia, some of which are more specialized and refer to subsets of the broad area described above.", "Regional hegemon", "The term regional hegemon generally refers to a country so powerful relative to the other countries in its region that it can dominate the affairs of that region and compel other countries in that region to support (or at least not oppose) the hegemon's key policy goals. The United States is generally considered to have established itself in the 19 th century as the hegemon of the Western Hemisphere.", "Spheres-of-influence world", "The term spheres-of-influence world generally refers to a world that, in terms of its structure of international relations, is divided into multiple regions (i.e., spheres), each with its own hegemon. A spheres-of-influence world, like a multipolar world, is characterized by having multiple top-tier powers. In a spheres-of-influence world, however, at least some of those top-tier powers have achieved a status of regional hegemon, while in a multipolar world, few or none of those major world powers (other than the United States, the regional hegemon of the Western Hemisphere) have achieved a status of regional hegemon. As a result, in a spheres-of-influence world, international relations are more highly segmented on a regional basis than they are in a multipolar world.", "Geopolitics", "The term geopolitics is often used as a synonym for international politics or for strategy relating to international politics. More specifically, it refers to the influence of basic geographic features on international relations, and to the analysis of international relations from a perspective that places a strong emphasis on the influence of such geographic features. Basic geographic features involved in geopolitical analysis include things such as the relative sizes and locations of countries or land masses; the locations of key resources such as oil or water; geographic barriers such as oceans, deserts, and mountain ranges; and key transportation links such as roads, railways, and waterways.", "Hard power and soft power", "In foreign policy discussions, the term hard power generally refers to coercive power, particularly military and economic power, while the term soft power generally refers to the ability to persuade or attract support, particularly through diplomacy, development assistance, support for international organizations, education and cultural exchanges, and the international popularity of cultural elements such as music, movies, television shows, and literature.", "Appendix B. Citations for Certain Footnotes", "This appendix provides the citations to certain footnotes in the report. Citations for each footnote are generally listed with the most recent on top.", "Citations for Footnote 7", "See, for example:", "Stephen Grand, \"America's Foreign Policy Power Is Changing Under Trump; No Other Country Can Yet Match America in Terms of Power, But Washington No Longer Possesses the Ability to Shape World Events As It Did in the Cold War's Aftermath,\" National Interest , September 30, 2018.", "Anne Gearan and David Nakamura, \"Trump Delivers Defiant Defense of His Foreign Policy Approach to Skeptical U.N. Audience,\" Washington Post , September 25, 2018.", "Colum Lynch, \"Trump Takes Aim at Iran, China, and the Global System in Big U.N. Speech,\" Foreign Policy , September 25, 2018.", "Vivian Salama, \"At U.N., Trump Defends His Administration's Hard-Line Trade Policies; President Trump Criticized International Organizations and Alliances as Unaccountable, But Received Pushback from Other World Leaders,\" Wall Street Journal , September 25, 2018.", "David Nakamura, \"'I'm Not the President of the Globe': Trump Goes It Alone as He Faces World Leaders Amid Trade War Against China,\" Washington Post , September 23, 2018.", "Griff Witte and Michael Birnbaum, \"A Year of Trump's 'America First' Agenda Has Radically Changed the U.S. Role in the World,\" Washington Post , January 20, 2018.", "Rebecca Kheel, \"Trump Roils the Globe in First Year as Commander in Chief,\" The Hill , December 25, 2017.", "Reuben Fischer-Baum and Julie Vitkovskaya, \"How Trump is Changing America's Foreign Policy,\" Washington Post , updated August 10, 2017.", "Citations for Footnote 8", "See, for example:", "John Micklethwait, Margaret Talev, and Jennifer Jacobs, \"Trump Threatens to Pull U.S. Out of WTO If It Doesn't 'Shape Up,'\" Bloomberg , August 30 (updated August 31), 2018.", "Adam Taylor, \"No President Has Used Sanctions and Tariffs Quite Like Trump,\" Washington Post , August 29, 2018.", "Ana Swanson and Jack Ewiing, \"Trump's National Security Claim for Tariffs Sets Off Crisis at W.T.O.,\" New York Times , August 12, 2018.", "Ben White, Nancy Cook, Andrew Restuccia, and Doug Palmer, \"Trump's Trade War Was Decades in the Making,\" Politico , July 9, 2018.", "Greg Rushford, \"Trump's War on the WTO,\" Wall Street Journal , July 4, 2018.", "Zeeshan Aleem, \"Trump Is Single-Handedly Trying to Blow Up International Trade,\" Vox , July 2, 2018.", "Heather Long and Steven Mufson, \"Trump Thinks He's Saving Trade. The Rest of the World Thinks He's Blowing It Up.\" Washington Post , June 2, 2018.", "Peter Rough, \"Trump's Views on Trade Aren't a Passing Fad,\" Foreign Policy , April 3, 2018.", "\"Disaster Management; The WTO Is Flawed. But the Trump Administration's Undermining of It Is Bad for the World and for America.\" Economist , December 9, 2017: 18.", "Citations for Footnote 11", "See, for example:", "Uri Friedman, \"Donald Trump Issues a Scathing Rejection of 'Globalism,'\" Atlantic , September 25, 2018.", "Dalibor Rohac, \"What Donald Trump Got Right\u2014and Wrong\u2014About the United Nations,\" American Enterprise Institute, September 25, 2018.", "Nahal Toosi, \"Laughter, Frowns and Shrugs: Trump Speaks to the UN; President Tells World Leaders the US Would Always Put Its Interests Above Theirs, Rejecting the Rise of 'Globalism,'\" Politico , September 25, 2018.", "Katie Bo Williams, \"A Solitary and Defiant Message to the UN In Trump's Second Speech,\" Defense One , September 25, 2018.", "Farnaz Fassihi, \"Trump to Emphasize 'Sovereignty' in U.S. Visit, Haley Says,\" Wall Street Journal , September 20, 2018.", "Anna Simons, \"Yes, Mr. President\u2014Sovereignty!\" American Interest, October 10, 2017.", "Rich Lowry, \"Sovereignty Is Not a Dirty Word,\" National Review , September 22, 2017.", "Max de Haldevang, \"Trump Mentioned Sovereignty 21 Times in A Speech Heralding A New American Worldview,\" Quartz, September 19, 2017.", "Greg Jaffe and Karen DeYoung, \"In Trump's U.N. Speech, An Emphasis on Sovereignty Echoes His Domestic Agenda,\" Washington Post , September 19, 2017.", "For more on the concept of sovereignty as applied to both the United States and other countries, see, for example, National Security Strategy of the United States of America , December 2017, pp. I-II, 1, 4, 7, 9-10, 25, 39, 40, 41, 45, 46-52, 55.", "For an alternative view, see Bruce Jones, \"American Sovereignty Is Safe From the UN,\" Foreign Affairs, September 28, 2018.", "Citations for Footnote 12", "See, for example:", "Daniel R. DePetris, \"Has the State Department Been Stripped of Its Swagger? Washington's Diplomatic Missions Are Being Held Together with Duct Tape and Special Envoys,\" National Interest , January 27, 2019.", "Jackson Diehl, \"Mike Pompeo Swaggers His Way to Failure,\" Washington Post , December 9, 2018.", "Doyle McManus, \"Almost Half the Top Jobs in Trump's State Department Are Still Empty,\" Atlantic , November 4, 2018.", "Daniel R. DePetris, \"'Swagger' Doesn't Make up for Bad American Foreign Policy; An Evaluation of Mike Pompeo's Four Months on the Job,\" National Interest , October 2, 2018.", "Robbie Gramer, \"Washington Blame Game Ensues as Ambassador Posts Sit Empty; The Disappearance of the Saudi Journalist Jamal Khashoggi Spotlights a Staffing Problem,\" Foreign Policy , October 11, 2018.", "Robbie Gramer, \"Pompeo's Pledge to Lift Hiring Freeze at State Department Hits Big Snag,\" Foreign Policy , June 7, 2018.", "Carol Morello, \"More Than 200 Former Diplomats Are Alarmed at the State of American Diplomacy,\" Washington Post , March 28, 2018.", "Stephen M. Walt, \"The State Department Needs Rehab,\" Foreign Policy , March 5, 2018.", "Jack Corrigan, \"State Department Lost 12% of its Foreign Affairs Specialists in Trump's First 8 Months,\" Defense One , February 12, 2018.", "Dan De Luce and Robbie Gramer, \"State Department, USAID Face Drastic Budget Cut,\" Foreign Policy , February 12, 2018.", "Carol Morello, \"Foreign Aid Cuts Proposed, But 'Friends' Might Be Protected,\" Washington Post , February 12, 2018.", "Jack Corrigan and Government Executive, \"The Hollowing Out of the State Department Continues,\" Atlantic , February 11, 2018.", "Gordon Adams and Robert Goldberg, \"Rex Tillerson Is About to make a Terrible Mistake; The Knives Are Out for 'F' at the State Department. The Secretary Should Be Strengthening Rather Than Dismantling It.\" Foreign Policy , December 14, 2017 (the article identifies \"F\" a the State Department's foreign assistance planning and budgeting staff.).", "Dexter Filkins, \"How Rex Tillerson Wrecked the State Department,\" New Yorker , November 30, 2017.", "Madeleine K. Albright, \"The National Security Emergency We're Not Talking About,\" Washington Post , November 29, 2017.", "Felicia Schwartz, \"Tillerson Rebuts Criticism of State Department Staff Declines,\" Wall Street Journal , November 28, 2017.", "Nicholas Burns and Ryan C. Crocker, \"Dismantling the Foreign Service,\" New York Times , November 27, 2018.", "Gardiner Harris, \"Diplomats Sound the Alarm as They Are Pushed Out in Droves,\" New York Times , November 24, 2017.", "Editorial Board, \"The Trump Administration Is Making War on Diplomacy,\" New York Times , November 18, 2017.", "Carol Morello, \"State Department's Plan for Staff Cuts Causing New Worry in Congress,\" Washington Post , November 15, 2017.", "Abigail Tracy, \"'Total Bulls**t': Ex-Staffers Say Tillerson's 'Disdain' Is Killing the State Department,\" Vanity Fair , November 14, 2017. [The \"**\" was inserted by CRS. In the original article, the word is spelled out.]", "Jason Zengerle, \"Rex Tillerson and the Unraveling of the State Department,\" New York Times , October 17, 2017.", "Kevin Quealy, \"'The Lowest-Profile State Department in 45 Years,' in 2 Charts,\" New York Times , August 1, 2017.", "Robbie Gramer, Dan De Luce, and Colum Lynch, \"How the Trump Administration Broke the State Department,\" Foreign Policy , July 31, 2017.", "Roger Cohen, \"The Desperation of Our Diplomats,\" New York Times , July 28, 2017.", "Colum Lynch, \"Tillerson to Shutter State Department War Crimes Office,\" Foreign Policy , July 17, 2017.", "Steven Erlanger and Julie Hirschfeld Davis, \"Once Dominant, the United States Finds Itself Isolated at G-20,\" New York Times , July 7, 2017.", "Colum Lynch, \"Trump's Budget Blueprint: Pulling Up the Diplomatic Drawbridge,\" Foreign Policy, March 16, 2017.", "Nicholas Burns, \"Trump's Cuts Would Cripple the Country's Diplomats When We Need Them Most,\" Washington Post, March 3, 2017.", "For more on the State Department and U.S. foreign assistance programs, see, for example, CRS Report R45203, U.S. Department of State Personnel: Background and Selected Issues for Congress , by Cory R. Gill, and CRS Report R45168, Department of State, Foreign Operations and Related Programs: FY2019 Budget and Appropriations , by Susan B. Epstein, Marian L. Lawson, and Cory R. Gill.", "Citations for Footnote 18", "See, for example:", "Uri Friedman, \"The President of the United States Asks, 'What's an Ally?'\" Atlantic , October 15, 2018.", "Philip Gordon and Ivo Daalder, \"Trump's Biggest Gift to Putin; Qualifying and Conditioning the Notion of NATO's Defense Guarantee Is a Major Step on the Path to Abandoning It,\" Atlantic, July 19, 2018.", "Eileen Sullivan, \"Trump Questions the Core of NATO: Mutual Defense, Including Montenegro,\" New York Times, July 18, 2018.", "Ezra Klein, \"Why is Trump Undermining NATO and the EU? He Just Told Us.\" Vox, July 13, 2018.", "Uri Friedman, \"Trump vs. NATO: It's Not Just About the Money; The President's Emphasis on Spending Obscures a Much Deeper Skepticism of Alliances,\" Atlantic, July 12, 2018.", "Ivan Krastev, \"Sorry, NATO. Trump Doesn't Believe in Allies.\" New York Times, July 11, 2018.", "Alex Ward, \"Trump Blasted US Allies Within Minutes of Arriving at NATO Summit,\" Vox, July 11, 2018.", "Paul Waldman, \"Will Trump Destroy NATO and Every Other American Alliance?\" Washington Post, July 9, 2018.", "Krishnadev Calamur, \"Trump Keeps His Friends Distant and His Enemies Closer,\" Atlantic, July 4, 2018.", "John Hudson, Paul Sonne, Karen DeYoung, and Josh Dawsey, \"U.S. Assessing Cost of Keeping Troops in Germany as Trump Battles with Europe,\" Washington Post, June 29, 2018.", "Jay Nordlinger, \"Trump, and Us, in the World,\" National Review, June 29, 2018.", "Robbie Gramer, \"Ahead of NATO Summit, U.S. President Exhorts Allies to Pay Up,\" Foreign Policy, June 27, 2018.", "Ashley Parker, \"Going It Alone: Trump Increasingly Relies on Unilateral Action to Wield Power,\" Washington Post, June 11, 2018.", "Susan B. Glasser, \"Under Trump, 'America First' Really Is Turning Out To Be America Alone,\" New Yorker, June 8, 2018.", "Fred Kaplan, \"The Free World's Landlord; Trump's Persistent Attacks on NATO Can Only Undermine America's Economy and Security,\" Slate, December 12, 2017.", "Citations for Footnote 22", "See, for example:", "Ben Rhodes, \"A Fatal Abandonment of American Leadership; The Disappearance of Jamal Khashoggi Drives Home the Consequences of the Trump Administration's Refusal to Champion Democratic Values Around the Globe,\" Atlantic , October 12, 2018.", "David A. Graham, \"The End of American Lip Service to Human Rights; The Administration's Reticence About the Disappearance of a Saudi Journalist Is Offensive, But It's Also Clarifying,\" Atlantic , October 12, 2018.", "Krishnadev Calamur, \"Nikki Haley's Concern for Human Rights Only Went So Far; The Outgoing U.S. Ambassador to the UN Criticized U.S. Allies Like Saudi Arabia, But Also Pulled Out of the UN Human Rights Council,\" Atlantic , October 9, 2018.", "Thomas Carothers, \"Can U.S. Democracy Policy Survive Trump?\" Carnegie Endowment for International Peace, October 1, 2018.", "Abby Bard, \"Trump's UN Speech Hurts America and the International System; America Threatens to Let Everyone Fend for Themselves,\" National Interest , September 26, 2018.", "David A. Andelman, \"Trump Presides Over a Global Sunset to Democracy,\" CNN , June 18, 2018.", "Joshua Keating, \"Under Trump, the U.S. Is Becoming More of a Human Rights Outlaw,\" Slate , June 5, 2018; Robbie Gramer, \"Human Rights Groups Bristling at State Department Report; What's Not in the Report Is As Important As What's In It,\" Foreign Policy , April 21, 2018.", "Josh Rogin, \"The Trump Administration Wants to Dismantle Ronald Reagan's 'Infrastructure of Democracy,'\" Washington Post , March 4, 2018.", "Richard Fontaine and Daniel Twining, \"Defending America Means Defending Democracy,\" Foreign Policy , February 13, 2018.", "Adrian A. Basora and Kenneth Yalowitz, \"The Trump Team Is Underestimating the Power of Democracy,\" National Interest , January 28, 2018.", "Nahal Toosi, \"Leaked Memo Schooled Tillerson on Human Rights; A Tutorial from Policy Aide Brian Hook Followed the Secretary of State's Controversial Remarks About Balancing U.S. Values and Interests,\" Politico , December 19, 2017.", "Dominic Tierney, \"'Human Rights Are Largely Irrelevant to the Emerging Trump Doctrine,'\" Atlantic ,\" November 14, 2017.", "Editorial Board, \"Trump Loves Human Rights\u2014When Convenient,\" Washington Post , November 14, 2017.", "Stephen M. Walt, \"Trump Isn't Sure If Democracy Is Better Than Autocracy; America's President Is Voluntarily Abdicating One of the Country's Biggest Strategic Advantages,\" Foreign Policy , November 13, 2017.", "Sarah Wildman, \"'America First' Means Human Rights Last During Trump's Visit to Asia,\" Vox , November 8, 2017.", "Michael H. Fuchs, Shannon McKeown, and Brian Harding, \"If Trump Forgets About Human Rights in Asia, the World Will Suffer,\" Foreign Policy , November 2, 2017.", "Justin Worland, \"Trump Administration Says It doesn't Want to 'Yell About' Human Rights,\" Time , November 2, 2017.", "Joshua Keating, \"Wait, Does the Trump Administration Care About Human Rights Now?\" Slate , August 23, 2017.", "Rukmani Bhatia, \"Quietly Erasing Democracy Promotion at the U.S. State Department,\" Freedom House, August 8, 2017.", "Josh Rogin, \"State Department Considers Scrubbing Democracy Promotion from Its Mission,\" Washington Post , August 1, 2017.", "Karen DeYoung, \"Trump Takes a Selective Approach to the Promotion of Human Rights,\" Washington Post , April 25, 2017.", "Doyle McManus, \"Has the United States Abandoned Its Commitment to Human Rights?\" Los Angeles Times , April 5, 2017.", "Shannon N. Green, \"When the U.S. Gives Up on Human Rights, Everyone Suffers,\" Foreign Policy , April 4, 2017.", "Peter Baker, \"For Trump, a Focus on U.S. Interests and a Disdain for Moralizing,\" New York Times , April 4, 2017.", "See also:", "Paul R. Pillar, \"The U.S.-Canadian Relationship Must Remain Strong; The White House's Treatment of Canada Is Deeply Disturbing,\" National Interest , August 14, 2018.", "Ashifa Kassam, \"'We Don't Have a Single Friend': Canada's Saudi Spat Reveals Country is Alone; As Saudi Officials Lashed Out at Canada, the US Remained on the Sidelines, Signaling a Blatant Shift in the Relationship,\" Guardian , August 11, 2018.", "Joshua Keating, \"The Administration's Infuriating Both Sides-ing of the Canada-Saudi Arabia Dispute,\" Slate , August 8, 2018; Jonathan Lemire and Matthew Pennington, \"AP Analysis: Trump Retreats from US Moral Leadership Stance,\" Associated Press , June 12, 2018.", "Citations for Footnote 23", "See, for example:", "Colum Lynch, \"In Parting Shot, Nikki Haley Shuns Human Rights Groups at U.N.; She Fashioned Herself a Human Rights Champion but Routinely Clashed with Potential Allies over the Human Rights Council,\" Foreign Policy , October 11, 2018.", "Krishnadev Calamur, \"Nikki Haley's Concern for Human Rights Only Went So Far; The Outgoing U.S. Ambassador to the UN Criticized U.S. Allies Like Saudi Arabia, But Also Pulled Out of the UN Human Rights Council,\" Atlantic , October 9, 2018.", "For more on the United Nations Human Rights Council, including the U.S. withdrawal, see, for example:", "CRS In Focus IF10861, Global Human Rights: Multilateral Bodies & U.S. Participation , by Michael A. Weber.", "CRS Report RL33608, The United Nations Human Rights Council: Issues for Congress , by Luisa Blanchfield.", "Citations for Footnote 26", "See, for example:", "William Saletan, \"Trump Is More Loyal to Dictators Than to the U.S.; His Lies About Jamal Khashoggi's Murder Are a Threat to National Security.\" Slate , December 4, 2018.", "Emily Stewart, \"Trump Says He and Kim Jong Un 'Fell in Love' over Denuclearization Letters; The President's Public Admiration of Brutal Dictators and Strongmen Continued at a Rally in West Virginia,\" Vox , September 30, 2018.", "Marc Santora and Joanna Berendt, \"Poland's Leader Finds an Ally in Trump, Even as He Brings Courts to Heel,\" New York Times , September 17, 2018.", "Patrick Kingsley, \"Hungary's Leader Was Shunned by Obama, but Has a Friend in Trump,\" New York Times , August 15, 2018.", "Krishnadev Calamur, \"Trump Keeps His Friends Distant and His Enemies Closer,\" Atlantic , July 4, 2018.", "Edward-Isaac Dovere, \"Donald Dreams of Dictators,\" Politico , June 15, 2018.", "Philip Rucker, \"'Dictator Envy': Trump's Praise of Kim Jong Un Widens His Embrace of Totalitarian Leaders,\" Washington Post , June 15, 2018.", "Jack Crowe, \"Trump Downplays Kim's Brutality, Says 'A Lot of People' Are Guilty of Atrocities,\" National Review , June 13, 2018.", "Ishaan Tharoor, \"Trump's Affinity for Dictators over Democrats,\" Washington Post , June 12, 2018.", "William Saletan, \"Trump's Favorite Animals,\" Slate , May 23, 2018.", "Fred Hiatt, \"McMaster Warned Against Officials Who 'Glamorize and Apologize' for Dictators. Hmm.\" Washington Post , April 8, 2018.", "Krishnadev Calamur, \"Nine Notorious Dictators, Nine Shout-Outs From Donald Trump,\" Atlantic , March 4, 2018.", "Zack Beauchamp, \"Trump Is Embracing a New Generation of Strongmen,\" Vox , February 27, 2018.", "Zack Beauchamp, \"A Top Adviser Says the Leaders Trump 'Most Admires' Are All Authoritarians,\" Vox , December 14, 2017.", "Editorial Board, \"President Trump's Thing for Thugs,\" New York Times , November 13, 2017.", "Jay Nordlinger, \"The American President and American Values,\" National Review , November 13, 2017.", "Krishnadev Calamur, \"Trump's Gratitude for the 'Bad Guys,'\" The Atlantic , August 11, 2017.", "Michael Gerson, \"Trump's Embrace of Strongmen is a Very Bad Strategy,\" Washington Post , June 22, 2017.", "Anne Applebaum, \"How Trump Makes Dictators Stronger,\" Washington Post , May 4, 2017.", "Philip Rucker, \"Trump Keeps Praising International Strongmen, Alarming Human Rights Advocates,\" Washington Post , May 1, 2017.", "Citations for Footnote 27", "See, for example:", "Jeffrey, \"U.S. Foreign Policy in Free Fall; The Direct Damage to the Reputation of the United States Has Never Been More Substantial,\" National Interest , January 24, 2019.", "Jake Sullivan, \"What Donald Trump and Dick Cheney Got Wrong About America,\" Atlantic , January/February 2019.", "Dana Milbank, \"It's Official. We Lost the Cold War.\" Washington Post , December 21, 2018.", "Carolyn Kormann, \"How the U.S. Squandered Its Leadership at the U.N. Climate Conference,\" New Yorker , December 15, 2018.", "Joseph Curtin, \"Trump Has Officially Ruined Climate Change Diplomacy for Everyone; The Evidence Is In: the Paris Agreement Doesn't Work Without the United States.\" Foreign Policy , December 12, 2018.", "David Pring-Mill, \"Trump Is Failing on Human Rights; It Is Time to Restore Truth and Moral Clarity in the White House,\" National Interest , December 11, 2018.", "Jennifer Rubin, \"Trump's Not Winning Anything, Anywhere,\" Washington Post , December 3, 2018.", "Stephen M. Walt, \"Trump's Problem in Europe Isn't Optics; The President's Latest Trip Was a Disaster\u2014But Not Because He Acted Like a Boorish Bully.\" Foreign Policy , November 14, 2018.", "Robin Wright, \"Trump Completes a Shameful Trip to Paris, Just As He Needs the Global Stage,\" New Yorker , November 12, 2018.", "Abby Bard, \"Trump's UN Speech Hurts America and the International System; America Threatens to Let Everyone Fend for Themselves,\" National Interest , September 26, 2018.", "Michael Gerson, \"Trump Is Smashing the Hopes of Oppressed People Everywhere,\" Washington Post , July 19, 2018.", "Susan B. Glasser, \"'No Way to Run a Superpower': The Trump-Putin Summit and the Death of American Foreign Policy,\" New Yorker , July 19 2018.", "Will Inboden, \"How Much Damage Did Trump Cause in Helsinki?\" Foreign Policy , July 19, 2018.", "Ishaan Tharoor, \"Is Trump at War with the West?\" Washington Post , July 18, 2018.", "Rich Lowry, \"Trump's Helsinki Discord; His Dismaying Comments Undercut the Country He Leads.\" National Review , July 17, 2018.", "Zack Beauchamp, \"Donald Trump, Vladimir Putin, and America's 'Geopolitical Suicide'; the Trump-Putin Meeting Reveals How Trump Is Killing American Power,\" Vox , July 16, 2018.", "David Brooks, \"The Murder-Suicide of the West; Trump Forcefully Caps Off Years of Deterioriation in European-American Ties,\" New York Times , July 16, 2018.", "Abigail Tracy, \"'Appalling,' 'A Mess,' 'Nothing Short of Cowardly': Washington Insiders Reel As Trump Caves to Putin in Helsinki,\" Vanity Fair , July 16, 2018.", "Amy Zegart, \"The Self-Inflicted Demise of American Power; The Effect of Trump's Foreign-Policy Doctrine Can Be Summed Up as 'Make America Weak Again,'\" Atlantic , July 12, 2018.", "Anne Applebaum, \"Trump Hates the International Organizations That Are the Basis of U.S. Wealth, Prosperity and Military Power,\" Washington Post , July 2, 2018.", "Jonathan S. Tobin, \"Trump's G-7 Debacle: The Downside to 'America First'; Does Trump want an end to the Western alliance?\" National Review , June 11, 2018.", "Michael Mandelbaum, \"America's Global Role in Question,\" American Interest , March 26, 2018.", "Julie Smith, \"At the Munich Security Conference, the United States Lacked Bravery and Leadership,\" Foreign Policy , February 20, 2018.", "Fred Kaplan, \"Don't Know What You've Got Til It's Gone; America's Retreat from the World Under Trump Has Shown Why We're Still the Indispensable Nation,\" Slate , January 19, 2018.", "John R. Schindler, \"The Year American Hegemony Ended,\" Observer , December 31, 2017.", "Richard Haass, \"America and the Great Abdication; Don't Mistake Donald Trump's Withdrawal from the World for Isolationism,\" Atlantic , December 28, 2017.", "Laura Zhou and Viola Zhou, \"Donald Trump's Early East Asia Summit Exit Casts Doubt Over US Ties to Asia,\" South China Morning Post , November 14 (updated November 15), 2017.", "Adam Davidson, \"How Trump Is Quietly Dismantling the Architecture of Global Governance,\" New Yorker , November 10, 2017.", "Robert Delaney, \"Donald Trump Has Ceded Global Leadership to China, Says Nixon Trip Aide,\" South China Morning Post , November 9, 2017.", "\"America's Global Influence Has Dwindled Under Donald Trump,\" Economist , November 9, 2017.", "Fred Kaplan, \"Lost in Asia; Trump's Trip Shows What Happens When a World Leader Is Set Adrift in the World with No Strategy or Goals.\" Slate , November 8, 2017.", "Josef Joffe, \"Donald Trump and the Future of U.S. Power; The President Underestimates the Unique Genius of Postwar American Grand Strategy: That by Serving Others' Interests, the United States Has Also Served Its Own.\" American Interest , November 3, 2017.", "Eliot A. Cohen, \"How Trump Is Ending the American Era,\" The Atlantic , October 2017.", "Hal Brands, \"How to Diminish a Superpower: Trump's Foreign Policy After Six Months,\" War on the Rocks , August 1, 2017.", "Robert J. Samuelson, \"Trump's Extraordinary Surrender of Power,\" Washington Post , July 9, 2017.", "Tom Malinowski, \"What America Stood For,\" The Atlantic , March 25, 2017.", "Alissa J. Rubin, \"Allies Fear Trump Is Eroding America's Moral Authority,\" New York Times , March 10, 2017.", "Colin Kahl and Hal Brands, \"Trump's Grand Strategic Train Wreck,\" Foreign Policy , January 31, 2017.", "Richard Stengel, \"The End of the American Century,\" The Atlantic , January 26, 2017.", "Citations for Footnote 29", "See, for example:", "Nahal Toosi, \"Even Skeptics Winder: Does Trump Deserve Some Foreign Policy Credit?\" Politico , February 5, 2019.", "Richard Fontaine, \"U.S.-India Relations: The Trump Administration's Foreign Policy Bright Spot,\" War on the Rocks , January 24, 2019.", "Michael Auslin, \"Trump's Successful Pivot to Asia; America's Regional Allies Are Relieved to Learn That the U.S. Isn't Going Anywhere\u2014for Now.\" Wall Street Journal , January 15, 2019.", "Greg R. Lawson, \"America's Old School Foreign Policy Ways Must Change; Washington's Policy Elites Are Determined to Mire America Down in a Morass of Multiple Distractions in Peripheral Theaters. Donald Trump Wants to Change Their Boorish Ways.\" National Interest , January 9, 2019.", "Jon Finer and Robert Malley, \"Trump Is Right to Seek an End to America's Wars,\" New York Times , January 8, 2019.", "David J. Lynch, \"Trump a Global Loner, Finds His China Trade War Complaints Draw a Crowd,\" Washington Post , December 14, 2018.", "Greg Autry, \"Trump's China Policy Is a Triumph; The President's Trade War Is Bringing Beijing to Heel.\" Foreign Policy , November 28, 2018.", "Rebeccah L. Heinrichs, \"Decisive, Disruptive, and Overdue: The Trump Foreign Policy,\" Hudson Institute, November 1, 2018.", "Richard Javad Heydarian, \"Trump is Forcing China to Reassess its Strategy,\" National Interest , October 20, 2018.", "Steven W. Mosher, \"Trump Has China Quaking in its Boots,\" New York Post , October 6, 2018.", "Krishnadev Calamur, \"Trump Is Winning on Trade; The World Might Protest, But Ultimately Countries Have to Deal with the U.S.,\" Atlantic , October 1, 2018.", "Damian Paletta and Erica Werner, \"Trump Says USMCA Trade Deal with Mexico and Canada Proves Tough Talk and Tariffs Work,\" Washington Post , October 1, 2018.", "Salvatore Babones, \"Trump's Foreign Policy Successes Show Principled Realism in Action; Trump Has Overcome Internal Resistance and External Pressure to Deliver a Strong of Foreign Policy Successes,\" National Interest , September 26, 2018.", "Brett D. Schaefer, \"President Trump at the UN: An Unapologetic Defense of 'Principled Realism'; Donald Trump's United Nations Speech Took Stock of the Results of Eighteen Months of 'Principled Realism' in American Foreign Policy. The Record of Achievement Is Surprisingly Strong.\" National Interest , September 26, 2018.", "Marc A. Thiessen, \"Chaos or Not, Trump Is Racking Up a Record of Foreign Policy Success,\" Washington Post , September 18, 2018.", "Randall Schweller, \"Three Cheers for Trump's Foreign Policy,\" Foreign Affairs , September/ October 2018: 133-143.", "Daniel R. DePetris, \"Great Expectations: Trump in Helsinki; Is This the Start of a Russian Reconciliation?\" National Interest , July 16, 2018.", "Harry J. Kazianis, \"The Coming American-Russian Alliance Against China,\" American Conservative , July 16, 2018.", "Washington Examiner, \"Trump's Diplomatic Belligerence,\" Washington Examiner , July 12, 2018.", "Edwin Feulner, \"President Donald Trump and the New International Order,\" Heritage Foundation, June 15, 2018.", "Conrad Black, \"Trump's North Korean Policy Is Succeeding; He Has Secured Kim Jong-un's Acquiescence to the Agreed Objective.\" National Review , June 13, 2018.", "Scott Simon, \"A Perspective From A Pro-Trump Political Science Professor,\" NPR , June 9, 2018. (Interview with Randall Schweller.)", "Raymond Tanter and Ivan Sascha Sheehan, \"Trump's Foreign Policy Plans Put America First,\" National Interest , May 1, 2018.", "Jonathan S. Tobin, \"Trump Is Still the Leader of the Free World; Despite His Faults, His Realism on the Threat from Tehran Makes Him, and Not Macron or Merkel, the True Defender of the West.\" National Review , April 30, 2018.", "Stephen M. Walt, \"Has Trump Become a Realist? America Finally Has a President Who Grasps the Basic Logic of Offshore Balancing in the Middle East.\" Foreign Policy , April 17, 2018.", "Christian Whiton, \"China Gets Trumped,\" National Interest , April 5, 2018.", "Bruno Macaes, \"The Trump Doctrine,\" American Interest , March 29, 2018.", "Josh Rogin, \"The United States Is Finally Confronting China's Economic Aggression,\" Washington Post , March 25, 2018.", "Carol Morello, \"Head of USAID Defends Big Cuts in Foreign Aid Budget,\" Washington Post , March 21, 2018.", "James Jay Carafano, \"Inside Trump's National Security Team: Unmasking Captain Chaos,\" National Interest , March 7, 2018.", "Thitinan Pongsudhirak, \"Trump Puts America Back in Asia,\" Daily Star , February 21, 2018.", "Jeremy Hobson, \"President Trump's Policies Mark 'Return To Realist Principles,' Scholar Says,\" WBUR, January 29, 2018. (Interview with Randall Schweller.).", "Nile Gardiner, \"Far from Being the Disaster His Critics Predicted, President Trump's World Strategy Is to Lead from the Front,\" Telegraph (UK) , January 15, 2018.", "Zack Beauchamp, \"The Case for Trump's Foreign Policy, According to a Leading International Relations Scholar,\" Vox , January 11, 2018. (Reports on views of Randall Schweller.).", "Andrew Exum, \"What Trump Got Right in Foreign Policy in 2017,\" Atlantic , January 4, 2018.", "Walter Russell Mead, \"Trump Brings Foreign Policy Back to Earth,\" Wall Street Journal , November 29, 2017.", "Joseph Bosco, \"Trump's 'Principled Realism,'\" Real Clear Defense , September 21, 2017.", "See also Dmitri K. Simes, \"A Trump Foreign Policy; With the Right Mix of Hard and Soft Power Coupled with Skillful Diplomacy, Trump Can Still Achieve Major Successes.\" National Interest , June 17, 2018.", "James Jay Carafano, \"The Real Meaning Behind Trump's UN Speech,\" National Interest , September 20, 2017.", "Nile Gardiner, \"At the UN, Trump Ends the Era of Leading From Behind,\" Heritage Foundation , September 20, 2017.", "Jonathan S. Tobin, \"Trumpian Rhetoric and U.S. Imperatives,\" National Review , September 20, 2017.", "Eliott Abrams, \"Trump's Successful U.N. Speech,\" National Review , September 19, 2017.", "James Roberts and Brett Schaefer, \"An Overhaul of America's Foreign Assistance Programs Is Long Overdue,\" Heritage Foundation , September 19, 2017.", "Tom Rogan, \"Trump's UN Speech Was A Grand Slam,\" Washington Examiner , September 19, 2017.", "Stephen M. Walt, \"What Trump Got Right About Foreign Policy,\" Foreign Policy , August 28, 2017.", "James Jay Carafano, \"Trump and the Art of Rope-A-Dope Diplomacy,\" Heritage Foundation , August 14, 2017.", "Paul Kengor, \"Trump's Excellent Speech in Poland, on Poland, and About Poland,\" American Spectator , July 9, 2017.", "Michael Barone, \"Trump's 'Remarkable' Speech in Poland,\" Washington Examiner , July 6, 2017.", "Robert Charles, \"Trump Speech in Poland\u2014Reagan Is Nodding,\" Fox News , July 6, 2017.", "James P. Rubin, \"Trump Is Huge in Poland. So, There's That.\" Politico , July 6, 2017.", "Brett D. Schaefer, \"Trump's Budget Grasps What Congress Doesn't: America's Global Leadership Doesn't Come Free,\" Heritage Foundation, May 29, 2017.", "Theodore R. Bromund, \"Donald Trump is Right To Cut the State Department's Budget,\" Heritage Foundation, March 27, 2017.", "James M. Roberts, \"Why Trump's Budget Proposal for the State Department Makes Sense,\" Heritage Foundation, March 17, 2017.", "Al Mariam, \"Trump's Suspicion of Foreign Aid to Africa Is Right on The Money\" The Hill , March 9, 2017.", "James M. Roberts, \"The US Needs a New Foreign Aid Model,\" Heritage Foundation, March 7, 2017.", "Randall L. Schweller, \"A Third-Image Explanation for Why Trump Now: A Response to Robert Jervis' 'President Trump and IR [international relations] Theory,\" ISSF Policy Series , February 8, 2017.", "Brett D. Schaefer, \"Trump's Plan to Reduce UN Spending Is a Step in the Right Direction,\" Heritage Foundation, February 2, 2017.", "Citations for Footnote 30", "See, for example:", "Henry R. Nau, \"Return of the Balance of Power; But the Problem Is Neither Nationalism nor Globalism. In Today's World, the Two Are Complementary.\" National Interest , October 18, 2018.", "Ted Galen Carpenter, \"Where Is Trump's Alleged Isolationism? If You Look At His Actions and Not His Words, You Won't Find It.\" National Interest , October 9, 2018.", "Dalibor Rohae, \"The New NAFTA Shows Trump's Protectionism Can Be Curbed,\" American Enterprise Institute, October 2, 2018.", "Reid Standish, \"Europe Should Look to What the United States Does\u2014Not What Trump Says,\" Foreign Policy , August 3, 2018.", "James Kirchick, \"Trump Wants to Destroy the World Order. So What? Whatever the President's Intentions, His Efforts to Rock the Foundation of International Politics Are Hopeless,\" Foreign Policy , July 26, 2018.", "Noah Bierman, \"Trump Talks Tough, But After 15 Months, He's Actually Been Risk Averse When It Comes To Military Force,\" Task and Purpose , April 30, 2018.", "Stephen M. Walt, \"Trump's Sound and Fury Has Signified Nothing, The President's Style Has Been Unique, But the Substance of His Foreign Policy Is Surprisingly Familiar,\" Foreign Policy , January 30, 2018.", "Gerald F. Seib, \"Trump's 'America First' Message Is a Case of Rhetoric vs. Reality\u2014So Far,\" Wall Street Journal , January 22, 2018.", "Christopher A. Preble, \"The World Is Reacting to Trump's Words\u2014Not His Actions,\" National Interest , January 10, 2018.", "David Gordon and Michael O'Hanlon, \"President Trump's Twitter-Fueled Foreign Policy: Not As Bad As You Might Think,\" USA Today , January 5, 2018.", "Curt Mills, \"Can America's Foreign Policy Be Restrained?\" National Interest , December 12, 2017.", "Jacob Heilbrunn, \"Is Trump Really a Foreign-Policy Populist?; We Haven't Seen the Sharp Realignment You'd Have Expected from the Campaign.\" National Interest , November 30, 2017.", "Uri Friedman, \"What's Dangerous About Donald Trump's Foreign Policy? His Unorthodox Approach Has Frightened Some Observers. But It's His More Conventional Moves That Have Cost the Most Lives.\" Atlantic , November 26, 2017.", "Curt Mills, \"A Year on, Foreign Policy Restrainers Assess the Trump Administration,\" National Interest , November 7, 2017.", "Brett D. Schaefer, \"Trump's \"Rocketman\" Speech Marked a Welcome Return to Assertive U.S. Foreign Policy,\" Heritage Foundation, September 26, 2017.", "David French, \"A Donald Trump Speech, a Barack Obama Foreign Policy,\" National Review , September 19, 2017.", "Joshua Keating, \"The Blob Ate Donald Trump,\" Slate , August 22, 2017.", "Andrew J. Bacevich, \"The Beltway Foreign-Policy 'Blob' Strikes Back,\" American Conservative , May 26, 2017.", "Citations for Footnote 31", "See, for example:", "Alex Ward, \"Trump's China Strategy Is the Most Radical in Decades\u2014and It's Failing,\" Vox , September 18, 2018.", "Joel Gehrke, \"Pentagon Vows to 'Confront and Compete' with China,\" Washington Examiner , August 7, 2018.", "Walter Russell Mead, \"The Return of James Monroe,\" Wall Street Journal , August 6, 2018.", "Diego Leiva, \"The Monroe Doctrine Revival,\" Interpreter , February 14, 2018.", "Daniel P. Vajdich, \"Trump Should Abide by His Own National Security Strategy,\" Foreign Policy , January 24, 2018.", "Benjamin H. Firedman, \"Trump's Conventional National Security Strategy,\" National Interest , January 11, 2018.", "Philippe Le Corre and Erik Brattberg, \"Trump's New Strategy Is America's Old Strategy: Gathering Allies,\" National Interest , January 7, 2018.", "Don Tse and Larry Ong, \"Trump's National Security Strategy a Timely Counter to China's Expansionism,\" Real Clear Defense , January 4, 2018.", "James S. Robbins, \"The National Security Strategy Will Work; It Is the Difference Between 'Leading from Behind' and Actually Leading.\" National Interest , December 28, 2017.", "Zalmay Khalilzad, \"Trump Has Unveiled a Strong National Security Strategy,\" National Interest , December 26, 2017.", "Walter Russell Mead, \"Trump's 'Blue Water' Foreign Policy; The Administration's New Security Strategy Is Reminiscent of Pax Britannica,\" Wall Street Journal , December 25, 2017.", "Patrick Porter, \"Tradition's Quiet Victories: Trumps National Security Strategy,\" War on the Rocks , December 22, 2017.", "Niharika Tagotra, \"The US National Security Strategy and Great Power Relations; The NSS Institutionalizes Trends in U.S. Engagement with Both China and India.\" Diplomat , December 20, 2017.", "Dan Blumenthal, \"Trump Sets the Tone on China: America Will Not Be Challenged,\" The Hill , December 19, 2017.", "Andrew Browne, \"Trump's New National-Security Policy: Paper Tiger or Hidden Dragon? Some Experts Say the Writing Is Already on the Wall for the U.S. in the Struggle for Dominance in Asia,\" Wall Street Journal , December 19, 2017.", "Editorial Board, \"Trump's Security Strategy Is Sound, If He Believes It,\" Bloomberg , December 19, 2017.", "Thomas Wright, \"The National Security Strategy Papers Over a Crisis; The Document Itself Is Generally Coherent. But Can the Bureaucracy Contain the President?\" Atlantic , December 19, 2017.", "Dov Zakheim, \"Two Cheers for Trump's National Security Strategy; Its Survey of the World is Mostly Accurate, but the Discussion of Domestic Policy Falls Flat,\" Foreign Policy , December 19, 2017.", "Anne Gearan, \"National Security Strategy Plan Paints China, Russia as U.S. Competitors,\" Washington Post , December 18, 2017.", "Mike Green, \"The NSS and the China Challenge; The President and His Team Deserve Credit for Formulating a Coherent, Cohesive Approach to Battling Beijing.\" Foreign Policy , December 18, 2017.", "Jacob Heilbrunn, \"Decoding Trump's New National Security Strategy; What the Document Reveals Most Clearly is the Mental Scaffolding of the Trump Administration, Which Is to Seek American Dominance,\" National Interest , December 18, 2017.", "James Stavridis, \"Trump's National Security Strategy Is Shockingly Normal; The White House's 'Four Pillars' Could Have Emerged from a Hillary Clinton Administration,\" Bloomberg , December 18, 2017.", "Patrick Tucker, \"New National Security Strategy See s Rising Russia, Retreat on 'Democratic Peace,'\" Defense One , December 18, 2017.", "For alternative reactions to the NSS, see:", "James Stavridis, \"The Danger of Trump's National Security Plan Is In What It Doesn't Say,\" Time , January 11, 2018.", "Ian Ona Johnson and Ionut Popescu, \"The Missing Element in Trump's NSS: A Competitive National Strategy,\" National Interest , January 2, 2018.", "Jeremy Maxie, \"Trump's National Security Strategy: Long on Realism, Short on Geoeconomics,\" Diplomat , December 23, 2017.", "Salman Ahmed, \"Trump Has Set a Scary Strategic Precedent; There's a Reason Why Other Administrations Didn't Plan National Security This Way,\" Foreign Policy , December 21, 2017.", "Richard Fontaine, \"Trump Should Mind the Gaps in His National Security Strategy,\" War on the Rocks , December 21, 2017.", "Daniel Goure, \"The Trump National Security Strategy in One Word: Sovereignty,\" Real Clear Defense , December 21, 2017.", "Susan E. Rice, \"Susan Rice: When America No Longer Is a Global Force for Good,\" New York Times , December 20, 2017.", "Daniel W. Drezner, \"A Straussian National Security Strategy; There Is a Massive Disconnect Between Trump's Speech and His National Security Strategy. Why?\" Washington Post , December 19, 2017.", "Kori Schake, \"How to Grade Trump's National Security Strategy on a Curve; Strategizing for This President Isn't Easy. But That Excuse Only Gets You So Far.\" Foreign Policy , December 19, 2017.", "Eliot A. Cohen, \"Three Ways to Read Trump's National Security Strategy; Is It Better Approached as a Sacred Text, or Examined Like the Scat of a Shaggy, Woodland Beast?\" Atlantic , December 18, 2017.", "Joshua Keating, \"Trump National Security Strategy Isn't the Slightest Bit Worried About Threat of Climate Change,\" Slate , December 18, 2017.", "Fred Kaplan, \"Strategic Confusion; Donald Trump's New National Security Strategy Will Baffle Allies and Delight Foes,\" Slate , December 18, 2017.", "David Frum, \"A National-Security Strategy Devoid of Values,\" Atlantic , December 12, 2017.", "Citations for Footnote 38footnote 37", "For press accounts of this policy, see, for example:", "Demetri Savastopulo, \"Why Trump's America Is Rethinking Engagement with China; The More Aggressive US Approach Is Part of a Strategic Shift That Goes Well Beyond the Trade War,\" Financial Times , January 14, 2019.", "David S. Cloud, \"U.S. Policy Toward China Shifts from Engagement to Confrontation,\" Los Angeles Times, December 31, 2018.", "Jun Mai, \"Picking a Fight: Is Trump's Hawkish Behavior Towards China the Start of a New Cold War?; With Washington Taking a New, Profoundly Aggressive Tack in Its Dealings with Beijing, Analysts Speak of 'Active Competition with Occasional Confrontation' as the New Normal,\" South China Morning Post , October 17 (updated October 18), 2018.", "Michael C. Bender, Gordon Lubold, Kate O'Keeffe, and Jeremy Page, \"U.S. Edges Toward New Cold-War Era With China; A More Hard-Nosed Stance with Beijing Is Emerging from the Trump Administration as China's Help with North Korea wanes and Trade Talks Stall,\" Wall Street Journal , October 12, 2018.", "Walter Russel Mead, \"Mike Pence Announces Cold War II; The Administration Is Orchestrating a Far-Reaching Campaign Against China.\" Wall Street Journal , October 8, 2018.", "Keith Johnson, \"It's No Longer Just a Trade War Between the U.S. and China; Vice Persident Pence's Fierce Attack and Allegations of Tech Spying Escalate the Conflict.\" Foreign Policy , October 4, 2018.", "Josh Rogin, \"The Trump Administration Just 'Reset' the U.S.-China Relationship,\" Washington Post , October 4, 2018.", "Citations for Footnote 39", "See, for example:", "Department of State, Advancing a Free and Open Indo-Pacific Region , Fact Sheet, November 18, 2018.", "Dave Majumdar, \"Trump Has Big Plans for Asia. Well, More Like the 'Indo-Pacific' Region.\" National Interest , April 3, 2018.", "Jeff M. Smith, \"Unpacking the Free and Open Indo-Pacific,\" War on the Rocks , March 14, 2018.", "Peter Martin, Justin Sink, and Iain Marlow, \"Trump Discovers 'Indo-Pacific' on Asia Tour in Boost for India,\" Bloomberg , November 14, 2017.", "Rush Doshi, \"Trump's 'Indo-Pacific Dream' Stumbles\u2014But China Alone Won't Fill the Void,\" War on the Rocks , November 15, 2017.", "Nikhil Sonnad, \"'Indo-Pacific' Is the Trump Administration's New Name for Asia,\" Defense One , November 8, 2017.", "Nirmal Ghosh, \"Asia-Pacific? Think Indo-Pacific, Says the US, As It Pursues a Wider Asian Strategy,\" Straits Times , November 7, 2017.", "Louis Nelson, \"In Asia, Trump Keeps Talking About Indo-Pacific,\" Politico , November 7, 2017.", "For more on the FOIP, see, for example:", "White House, \"President Donald J. Trump's Administration is Advancing a Free and Open Indo-Pacific,\" July 20, 2018, accessed August 21, 2018, at: https://www.whitehouse.gov/briefings-statements/president-donald-j-trumps-administration-advancing-free-open-indo-pacific/ .", "Department of State, \"Advancing a Free and Open Indo-Pacific,\" July 30, 2018, accessed August 21, 2018, at: https://www.state.gov/r/pa/prs/ps/2018/07/284829.htm .", "Department of State, \"Briefing on The Indo-Pacific Strategy,\" April 2, 2018, accessed August 21, 2018, at: https://www.state.gov/r/pa/prs/ps/2018/04/280134.htm", "U.S. Department of State, \"Remarks on 'America's Indo-Pacific Economic Vision,'\" remarks by Secretary of State Michael R. Pompeo, Indo-Pacific Business Forum, U.S. Chamber of Commerce, Washington, DC, July 30, 2018. ", "Daniel Blumenthal, \"The Outlines of Trump's Asia Strategy,\" American Interest , November 17, 2017", "\"Donald Trump Still Has No Proper Asia Policy; But Asia Hands in Washington Are Not Working Against Him,\" Economist , September 13, 2018.", "Tom Switzer, \"Leadership in Asia: Don't Count the U.S. Out,\" Strategist (ASPI) , October 19, 2017.", "Citations for Footnote 41", "See, for example:", "Krishnadev Calamur, \"Nikki Haley's Concern for Human Rights Only Went So Far; The Outgoing U.S. Ambassador to the UN Criticized U.S. Allies Like Saudi Arabia, But Also Pulled Out of the UN Human Rights Council,\" Atlantic , October 9, 2018.", "Edwin J. Feulner, \"'Moral Clarity Becomes a Casualty of the Need to Placate Tyrants,'\" Heritage Foundation, July 25, 2018.", "Theodore R. Bromund, \"U.S. Right to Quit Human Rights Panel,\" Heritage Foundation, June 26, 2018.", "Brett D. Schaefer, \"America Is Right to Leave the UN Human Rights Council,\" Heritage Foundation, June 22, 2018.", "Jimmy Quinn, \"America's Withdrawal from the UNHRC Is a Win for Human-Rights Promotion; There's More to Be Gained at the U.N. by Sidelining Dictators Through Structural Reform Than by Abetting Their Treachery Through Acquiescence.\" National Review , June 21, 2018.", "Brett D. Schaefer, \"U.S. Withdrawal From the UN Human Rights Council Is the Right Decision,\" Heritage Foundation, June 21, 2018.", "Brett D. Schaefer, \"U.S. Makes the Right Call to Quit UN Human Rights Council,\" Heritage Foundation, June 19, 2018.", "\"Relative Moralism; Unnoticed by Donald Trump, the Government He Heads is Still Promoting Democracy and Human Rights in the World,\" Economist , December 9, 2017: 32, 34.", "Citations for Footnote 43", "See, for example:", "Joe Scarborough, \"Trump is Harming the Dream of America More Than Any Foreign Adversary Ever Could,\" Washington Post , September 10, 2018.", "Victor Davis Hanson, \"Peter Beinart's Amnesia; NATO's Problems, Putin's Aggression, and American Passivity Predate Trump, Who Had My Vote in 2016 \u2014 a Vote I Don't Regret.\" National Review , July 17, 2018.", "Robert Kagan, \"Things Will Not Be Okay,\" Washington Post , July 12, 2018.", "Paul Miller, \"Reassessing Obama's Legacy of Restraint,\" War on the Rocks , March 6, 2017.", "John Vinocur, \"Obama's European Legacy,\" Wall Street Journal , May 29, 2017.", "Thomas Donnelly, \"Retreat from Reliability,\" Weekly Standard , June 12, 2017.", "Eli Lake, \"Obama Choked on Russia Long Before the 2016 Election,\" Bloomberg , June 27, 2017.", "Lawrence J. Haas, \"Encouraging Putin's Recklessness, From Obama to Trump, Washington's Muddled Response to Russia's Behavior Has Left Putin Emboldened,\" U.S. News & World Report , June 27, 2017.", "James Kirchick, \"Why It's Hard to Take Democrats Seriously on Russia,\" Politico , July 24, 2017", "Paul Miller, \"Reassessing Obama's Legacy of Restraint,\" War on the Rocks , March 6, 2017.", "For articles predating the start of the Trump Administration that make similar arguments, see, for example:", "Kenneth R. Weinstein, \"Brexit Has Nothing on Obama's Global Amexit,\" Wall Street Journal , July 6, 2016.", "Fred Hyatt, \"The U.S. Steps Back from the World Stage, and the Consensus for Leadership Dissolves,\" Washington Post , July 31, 2016.", "Lee Smith, \"Who Lost NATO?\" Weekly Standard , August 1, 2016.", "Charles Krauthammer, \"The Price of Powerlessness,\" Washington Post , August 18, 2016.", "William A. Galston, \"Obama's Toothless Foreign Policy,\" Wall Street Journal , September 6, 2016.", "John Hannah, \"Russia's Middle East Offensive,\" Foreign Policy , September 13, 2016.", "Anders Fogh Rasmussen \"The United States Must Be the World's Policeman,\" Wall Street Journal , September 20, 2016.", "Daniel Henninger, \"Aleppo Is Obama's Sarajevo,\" Wall Street Journal , October 5, 2016.", "Charles Krauthammer, \"The Stillborn Legacy of Barack Obama,\" Washington Post , October 6, 2016.", "Benjamin Runkle, \"First as Tragedy, Then as Farce: The Echoes of Woodrow Wilson in Barack Obama's Foreign Policy,\" Foreign Policy , October 19, 2016.", "Frederic C. Hof, \"Russia and Risk: Who is Answerable?\" Atlantic Council, November 1, 2016.", "Leon Wieseltier, \"Aleppo's Fall Is Obama's Failure,\" Washington Post , December 15, 2016.", "Stephen F. Hayes, \"Obama's Syria Legacy Is a Betrayal of 'Who We Are,'\" Weekly Standard, December 21, 2016.", "Asle Toje, \"A Sad Metaphor,\" American Interest , December 21, 2016.", "Leonid Bershidsky, \"The U.S. Is Now a Country That Can Be Ignored,\" Bloomberg , December 21, 2016.", "Uri Friedman, \"Obama: Reaching Out to Adversaries, Alienating Allies,\" Atlantic , December 31, 2016.", "See also:", "Victor Davis Hanson, \"Was the Pre-Trump World Normal or Abnormal?\" National Review , August 21, 2018.", "J.J. McCullough, \"Does the World Actually Want American Leadership?; Only When It Follows European Priorities.\" National Review , June 11, 2018.", "Citations for Footnote 46", "See, for example:", "Jacob Heilbrunn, \"Donald Trump's Real Foreign Policy Has Arrived,\" National Interest , February 9, 2019.", "Eileen Sullivan, \"Trump Calls His Intelligence People 'Na\u00efve' After They Disagree With Him,\" New York Times , January 30, 2019.", "John Wagner and Shane Harris, \"Trump Blasts U.S. Intelligence Officials, Disputes Assessments on Iran and Other Global Threats,\" Washington Post , January 30, 2019.", "Katie Bo Williams, \"Trump Renews Attacks on US Intelligence Community for Contradicting Him,\" Defense One , January 30, 2019.", "Shane Harris, \"Testimony by Intelligence Chiefs on Global Threats Highlights Differences with President,\" Washington Post , January 29, 2019.", "Rebecca Morin and Nahal Toosi, \"U.S. Intelligence Chief Breaks with Trump on North Korea, Iran, ISIS,\" Politico , January 29, 2019.", "David E. Sanger and Julian E. Barnes, \"On North Korea and Iran, Intelligence Chiefs Contradict Trump,\" New York Times , January 29, 2019.", "Patrick Tucker, \"Intelligence Chiefs Diverge From Trump On Main Threats to US,\" Defense One , January 29, 2019.", "Peter Baker, \"U.S. Policy on Russia? Trump and His Team Might Give Different Answers,\" New York Times , January 20, 2019.", "Alex Ward and Jennifer Williams, \"Who Speaks for American Foreign Policy? No One Knows Who to Listen to When the Trump Administration Talks About US Aims Around the World.\" Vox , January 8, 2019.", "Kevin Baron, \"Trump Just Killed His Own Defense Strategy,\" Defense One , January 3, 2019.", "Ted Galen Carpenter, \"Why Trump's Advisors Keep Quashing His Realist Aims; Donald Trump Has Time and Again Allowed His Advisors to Talk Him Out of His Realist Foreign-Policy Positions,\" National Interest , January 2, 2019.", "Kori Schake, \"Trump Doesn't Need a Second 'Solarium,'\" Atlantic , October 30, 2018.", "Stephen Tankel, \"Has Trump Read His Own Counterterrorism Strategy? The President's Views Don't Seem to Line Up with Those of His Team.\" Foreign Policy , October 12, 2018.", "Aaron Blake, \"What Putin Whispers in Trump's Ear,\" Washington Post , September 19, 2018.", "Curt Mills, \"The Rise of John Bolton; John Bolton, National Security Advisor, Appears to Be Charting a Foreign Policy Course of His Own,\" National Interest , September 14, 2018.", "Mark Landler, \"Bolton Expands on His Boss's Views, Except on North Korea,\" New York Times , September 10, 2018.", "Zack Cooper, \"A Tale of Two Asia Policies,\" War on the Rocks , September 7, 2018.", "Helene Cooper and Julian E. Barnes, \"U.S. Officials Scrambled Behind the Scenes to Shield NATO Deal From Trump,\" New York Times , August 9, 2018.", "Amanda Macia, \"Trump and Defense Secretary Mattis Often Appear at Odds on Key Policies. Here's a Breakdown of Their Differences,\" CNBC , July 31, 2018.", "Fred Kaplan, \"The 'Reverse Kissinger' Theory of Trump and Putin Doesn't Hold Up,\" Slate , July 27, 2018.", "Uri Friedman, \"Secretary of a State of Confusion,\" Atlantic , July 26, 2018.", "Robin Wright, \"The Trump Administration Struggles to Defend Its Unruly Foreign Policy,\" New Yorker , July 26, 2018.", "Nahal Toosi and Stephanie Murray, \"Trump Team Tries to Show Spine on Russia,\" Politico , July 25, 2018.", "Bryan Bender, \"Pompeo, Mattis on Cleanup Duty After Trump Diplomatic Blowups,\" Politico , July 24, 2018.", "Abigail Tracy, \"'There Is a Reason We Tried to Kill This': After Helsinki, The Deep State Fears Trump Cannot Be Saved,\" Vanity Fair , July 19, 2018.", "Amy Cheng and Humza Jilani, \"Trump on Putin: The U.S. President's Views, In His Own Words; A History of Contradictory Statements from 2015 to the Present,\" Foreign Policy , July 18, 2018.", "David Nakamura and Carol Morello, \"'To What End?': Trump's Disruptive Diplomacy Inspires Fears Over U.S. Standing Abroad,\" Washington Post , July 17, 2018.", "Missy Ryan and Carol Morello, \"No One Can Explain What Trump's Russia Summit Means, Not Even the U.S. Government,\" Washington Post , July 17, 2018.", "Ashley Parker, \"'Very Much Counter to the Plan,' Trump Defies Advisers in Embrace of Putin,\" Washington Post , July 16, 2018.", "Mark Landler and Julie Hirschfield Davis, \"Trump Opens His Arms to Russia. His Administration Closes Its Fist,\" New York Times , July 14, 2018.", "Rebecca Ballhaus and Laurence Norman, \"Trump Reaffirms Commitment to NATO After Strained Emergency Meeting; President Says It Is 'Unnecessary' for the U.S. to Withdraw After Demanding That Allies Immediately Meet Military-Spending Goal,\" Wall Street Journal , July 12, 2018.", "David M. Herszenhorn and Lili Bayer, \"Trump's Whiplash NATO Summit; President Says US Can Go It Alone If Allies Don't Meet Spending Target,\" Politico , July 12, 2018.", "David M. Herszenhorn, \"Trump at NATO: From 'Sad' to 'Tremendous,'\" Politico , July 11, 2018.", "Philip Rucker and Ashley Parker, \"Confusion and Squabbling Undermine Trump's Steps Forward on the World Stage,\" Washington Post , May 20, 2018.", "Dion Nissenbaum, \"In His Foreign Policy, Trump Values Action Over D.C.'s Caution,\" Wall Street Journal , May 9, 2018.", "Jonah Goldberg, \"Trump's Message to Syria Is a Muddled One; The Strike on Syria Was the Right Call, But the Reason Why Is More Unclear.\" National Review , April 18, 2018.", "Greg Jaffe, John Hudson, and Philip Rucker, \"Trump, A Reluctant Hawk, Has Battled His Top Aides on Russia and Lost,\" Washington Post , April 15, 2018.", "Emily Tamkin and Robbie Gramer, \"Will the Real Trump Russia Policy Please Stand Up?\" Foreign Policy , April 2, 2018.", "Brian Bennett, \"McMaster Caught in the Middle as Mattis and Tillerson Maneuver to Constrain Trump on National Security Issues,\" Los Angeles Times , March 4, 2018.", "Dave Majumdar, \"Is McMaster Breaking with Trump's Foreign Policy Vision?\" National Interest , February 26, 2018.", "Andrew Exum, \"The Burden of Trump's National-Security Staff,\" Atlantic , February 19, 2018.", "Thomas Wright, \"Trump Wants Little to Do With His Own Foreign Policy; The Clash Between America First and the Global Shift to Great-Power Competition,\" Atlantic , January 31, 2018.", "Josh Lederman and Matthew Lee, \"For Trump's Security Advisers, Tempering an Impetuous Boss,\" Associated Press, January 18, 2018.", "Hal Brands, \"Trump Doesn't Believe in His Own Foreign Policy. Does That Matter?\" Foreign Policy, January 16, 2018.", "Peter Beinart, \"Trump Doesn't Seem to Buy His Own National Security Strategy; The Notion of 'Principled Realism' May Please Foreign-Policy Advisers, But It's Not Clear the President Knows What It Is.\" Atlantic , December 19, 2017.", "Roger Cohen, \"Trump's National Security Strategy Is a Farce,\" New York Times , December 19, 2017.", "Paul Pillar, \"America Alone,\" National Interest , December 19, 2017.", "Ishaan Tharoor, \"Trump's Tough Talk Can't Hide the Incoherence of His Foreign Policy,\" Washington Post , December 19, 2017.", "Eliana Johnson, \"Don't Call Trump Strategy a 'Return to Sanity,' Aide Says; Even As he Unveiled a Strategy Document Warning About Moscow's Intentions, the President Still Hailed Cooperation with Vladimir Putin,\" Politico , December 18, 2017.", "Mark Lander and David E. Sanger, \"Trump Delivers a Mixed Message on His National Security Approach,\" New York Times , December 18, 2017.", "Kate Brannen, \"Trump's National Security Strategy is Decidedly Non-Trumpian; An Exclusive Preview of the White House's Plan Highlights the Wide Gulf between What the President Says and What He Does.\" Atlantic , December 8, 2017.", "Ishaan Tharor, \"Trump's 'Principled Realism' Is an Incoherent Mess,\" Washington Pos t, September 20, 2017.", "Daniel L. Davis, \"Is H. R. McMaster's Worldview Compatible with the President's?\" National Interest , September 28, 2017.", "John Cassidy, \"There Is No Trump Doctrine, Only Contradictions and Bluster,\" New Yorker , September 21, 2017.", "Krishnadev Calamur, \"'The President Speaks for Himself,'\" The Atlantic , August 27, 2017.", "Daniel Politi, \"Did Secretary of State Rex Tillerson Just Turn on Trump?\" Slate , August 27, 2017.", "James Kitfield, \"Trump's Generals Are Trying to Save the World. Starting With the White House.\" Politico , August 4, 2017.", "Richard Haass, \"Donald Trump and the Danger of 'Adhocracy,'\" The Atlantic , July 18, 2017.", "Citations for Footnote 49", "See, for example:", "Damian Paletta and Philip Rucker, \"'Chaos Breeds Chaos': Trump's Erratic and False Claims Roil the Globe. Again.\" Washington Post , December 4, 2018.", "Stephen M. Walt, \"Does It Matter That Trump Is a Liar?\" Foreign Policy , September 17, 2018.", "Jackson Diehl, \"Trump's Foreign Policy Has Devolved into Chaos,\" Washington Post , September 16, 2018; Max Boot, \"Why Would Any Ally Trust the United States Ever Again?\" Washington Post , September 5, 2018.", "Andrew Restuccia, \"In Abrupt Shift, Trump Makes Nice with EU, Gets Tough on Russia,\" Politico , July 25, 2018.", "David M. Herszenhorn and Jacopo Barigazzi, \"'Very Stable' Trump? European Leaders Beg to Differ,\" Politico , July 12, 2018.", "David Frum, \"Trump's Reckoning Arrives; The President's Unpredictability Once Worked to His Advantage\u2014But Now, It Is Producing a Mounting List of Foreign Policy Failures,\" Atlantic , May 24, 2018.", "Brent D. Griffiths, \"Trump's Approach Is Hurting the U.S., Foreign Policy Experts Say,\" Politico , May 14, 2018.", "Stephen M. Walt, \"America Can't Be Trusted Anymore, It's Hard to Be Powerful When Nobody Believes a Word You Say,\" Foreign Policy , April 10, 2018.", "Steven Erlanger, \"Trump's Twitter Threats Put American Credibility on the Line,\" New York Times , January 7, 2018.", "Paul D. Miller, \"Trump's Nationalism Is Arbitrary, Dangerous, Incoherent, and Silly,\" Foreign Policy , January 3, 2018.", "Susan B. Glasser, \"Donald Trump's Year of Living Dangerously; It's Worse Than You Think,\" Politico , January/February 2018.", "Robert B. Zoellick, \"The Peril of Trump's Populist Foreign Policy; His Style of Deal-Making Prizes Uncertainty and Brinkmanship, Without a Plan for What Comes Next,\" Wall Street Journal , November 28, 2017.", "Kathy Gilsinan, \"What Happens When No One Believes American Threats?\" The Atlantic , August 14, 2017.", "Citations for Footnote 51", "See, for example:", "Micah Zenko, \"Trump Is America's First Contradiction-in-Chief,\" Foreign Policy , February 12, 2019.", "Jacob Heilbrunn, \"Donald Trump's Real Foreign Policy Has Arrived,\" National Interest , February 9, 2019.", "Loren Thompson, \"Trump's Strategic Vision Is More Coherent Than His critics Imagine,\" Forbes , January 22, 2019.", "Richard Fontaine, \"A Troubling Pattern of Personal Diplomacy; Trump Has a Tendency to Agree Spontaneously to Requests Pitched by Foreign Leaders,\" Atlantic , December 29, 2019.", "David E. Sanger, \"With the Generals Gone, Trump's 'America First' Could Fully Emerge,\" New York Times , December 21, 2018.", "Thomas Wright, \"Trump, Unchecked; With Mattis Gone, the President Is Now Free to Indulge His Most Visceral Instincts,\" Atlantic , December 21, 2018.", "Alex Ward, \"Trump's Saudi Arabia Decision Is the Perfect Distillation of His Worldview; Here's What Trump's Response to Jamal Khashoggi's Murder Really Tell[s] Us About America's Foreign Policy Today.\" Vox , November 21, 2018.", "William Saletan, \"Trump's Saudi Arabia Response Show His Foreign Policy Is Only About Money; To the President, Jamal Khashoggi's Death Isn't An Outrage. It's the Possible Loss of a Deal.\" Slate , October 26, 2018.", "Josh Rogin, \"Trump's Only Foreign Policy Doctrine Is Trumpism,\" Washington Post , October 25, 2018.", "Henry R. Nau, \"Return of the Balance of Power; But the Problem Is Neither Nationalism nor Globalism. In Today's World, the Two Are Complementary.\" National Interest , October 18, 2018.", "Nahal Toosi, \"Some See Christian First Bias in Trump Foreign Policy,\" Politico , October 4, 2018.", "Harry J. Kazianis, \"Trump Doctrine Just Declared at UN\u2014and It's Called 'Maximum Pressure,'\" The Hill , September 25, 2018.", "Danielle Allen, \"Trump's Foreign Policy Is Perfectly Coherent,\" Washington Post , July 23, 2018.", "Alex Ward, \"What We Learned from Trump's Worst Foreign Policy Week Ever,\" Vox , July 20, 2018.", "Jonah Goldberg, \"The Trump Doctrine Is Trumpism Writ Large; How 'Make America Great Again' Translates on the World Stage,\" National Review , July 11, 2018.", "Dov S. Zakheim, \"Trump's Perilous Path; To the Extent Donald Trump Has a Strategy, It Is One Grounded in Assumptions and Realities That Were Far More Relevant 150 Years Ago Than They Are Today,\" National Interest , June 18, 2018. (For a response, see Conrad Black, \"No, Donald Trump Is Not Millard Fillmore or James Buchanan,\" National Interest , August 22, 2018.)", "Jeffrey Goldberg, \"A Senior White House Official Defines the Trump Doctrine: 'We're America, Bitch,'\" Atlantic , June 11, 2018.", "Jeremi Suri, \"Trump's Kaiser Wilhelm Approach to Diplomacy; For the U.S. President, Like the Last German Monarch, Foreign Policy Is All About Personal Ego, Not National Interests,\" Foreign Policy , May 29, 2018.", "David A. Graham, \"Trump Almost Always Folds,\" Atlantic , May 23, 2018.", "Fred Hiatt, \"Trump Is Proving to Be the Most Predictable of Presidents,\" Washington Post , May 20, 2018.", "Daniel Levy, \"Trump Is Following, Not Leading,\" Foreign Policy , May 11, 2018.", "Uri Friedman, \"Trumpism: Speak Loudly and Carry a Big Stick,\" Atlantic , April 6, 2018.", "Mark Landler, \"On Foreign Policy, President Trump Reverts to Candidate Trump,\" New York Times , April 3, 2018.", "William Saletan, \"Trump's Perversion; He Rewards America's Enemies and Punishes Its Friends,\" Slate , March 11, 2018.", "Joshua Zeitz, \"How Trump Is Making Us Rethink American Exceptionalism,\" Politico , January 7, 2018.", "John Bew and David Martin Jones, \"Is There a Trump Doctrine?\" National Interest , December 22, 2017.", "Karen DeYoung, \"Trump's Foreign Policy Driven by Campaign Vows, Instinct and Unconventional Thinking,\" Washington Post , December 10, 2017.", "Peter Beinart, \"Trump Insults People From Afar, Then Praises Them in Person,\" Atlantic , November 9, 2017.", "Uri Friedman, \"Donald Trump, Dealbreaker,\" The Atlantic , October 12, 2017.", "Stephen M. Walt, \"The Donald Trump-Kaiser Wilhelm Parallels Are Getting Scary,\" Foreign Policy , October 12, 2017.", "Paul R. Pillar, \"The Operational Code of President Trump,\" National Interest , October 10, 2017.", "Citations for Footnote 53", "See, for example:", "John J. Mearsheimer, \"The Great Delusion: Liberal Dreams and International realities; An Excerpt from John Mearsheimer's Latest Book,\" National Interest , October 5, 2018.", "Daniel L. Davis, \"Reagan's Powerful Legacy Is Being Squandered,\" National Interest , September 15, 2018.", "Stephen M. Walt, \"America Needs the Muhammad Ali Doctrine,\" Foreign Policy , August 24, 2018.", "Jacob Heilbrunn, \"How America's Wars Have Created Piles of Debt (And Little Strategic Benefit),\" National Interest , August 21, 2018.", "Daniel L. Davis, \"America Cannot Keep Hoping the Military Will Solve Everything,\" National Interest , August 19, 2018.", "Christopher A. Preble, \"Is This the End of the Liberal World Order?\" National Interest , August 3, 2018.", "Stephen M. Walt, \"Why I Didn't Sign Up to Defend the International Order,\" Foreign Policy , August 1, 2018.", "William Ruger, Michael C. Desch, \"Conservatism, Realism and Foreign Policy: Kissing Cousins if Not Solutions,\" National Interest , July 30, 2018.", "Ted Galen Carpenter, \"Russia Is Not the Soviet Union,\" National Interest , July 28, 2018.", "Doug Bandow, \"The Case for Refashioning NATO,\" National Interest , July 10, 2018.", "Stephen M. Walt, \"The World Wants You to Think Like a Realist,\" Foreign Policy , May 30, 2018.", "William Ruger, \"To Defend America, Don't Overreach,\" New York Times , March 19, 2018.", "Ted Galen Carpenter, \"America Needs to Get Back to the Basics I Foreign Policy,\" National Interest , February 25, 2018.", "Doug Bandow, \"Europe Still Doesn't Take Its Own Defense Seriously,\" National Interest , February 24, 2018.", "William Ruger, \"Groupthink, Not the Deep State, Is the Real Culprit,\" National Interest , February 18, 2018.", "Christopher A. Preble, \"Americans Aren't Ready for Another Big War,\" National Interest , January 17, 2018.", "Monica Duffy Toft, \"Why is American Addicted to Foreign Interventions?\" National Interest , December 10, 2017.", "Stephen M. Walt, \"Who's Afraid of a Balance of Power? The United States Is Ignoring the Most Basic Principle of International Relations, to Its Own Detriment,\" Foreign Policy , December 8, 2017.", "Doug Bandow, \"Why Isn't Europe Preparing for a War with Russia?\" National Interest , December 4, 2017.", "Christopher A. Preble, \"Libertarianism and Restraint,\" National Interest , November 28, 2017.", "Doug Bandow, \"Endless War Is No Honor to America's Veterans,\" National Interest , November 19, 2017.", "Citations for Footnote 57", "See, for example:", "James Traub, \"American Can't Win Great-Power Hardball; As Other Countries Rise, Global Stability Depends on the United States Holding Onto Its Moralism.\" Foreign Policy , November 16, 2017.", "Stephen M. Walt, \"Trump Isn't Sure If Democracy Is Better Than Autocracy; America's President Is Voluntarily Abdicating One of the Country's Biggest Strategic Advantages,\" Foreign Policy , November 13, 2017.", "Joshua Muravchik, \"What Trump and Tillerson Don't Get About Democracy Promotion,\" Washington Post , August 4, 2017.", "Nicole Bibbins Sedaca, \"What Trump and Tillerson Get Wrong About Democracy Promotion,\" Foreign Policy , August 4, 2017.", "Kate Bateman, \"Wanted: A Trump Team Foreign-Policy Plan with Democratic Values,\" National Interest , June 5, 2017; Elliott Abrams, \"Does Trump Care About Human Rights?\" Politico , May 24, 2017.", "Joshua Keating, \"Trump and Tillerson's Shortsighted Contempt for Human Rights,\" Slate , May 4, 2017.", "\"What Rex Tillerson Gets Right About American Values\u2014and What He Gets Wrong,\" Washington Post , May 4, 2017.", "Heather Timmons, \"The Trump Presidency is Systematically Destroying Any Global Moral High Ground the US Had Left,\" Quartz , March 13, 2017.", "Citations for Footnote 60", "For additional discussion on the costs and benefits of allies, see, for example:", "Erin Dunne, \"With Threats from China, America's Allies Are More Important Than Ever,\" Washington Examiner , December 13, 2018.", "Benjamin H. Friedman, \"Bad Idea: Permanent Alliances,\" Defense 360 (Center for Strategic and International Studies, Bad Ideas in National Security Series) , December 13, 2018.", "Richard Fontaine, \"Trump Gets NATO Backwards; The U.S. Defends Europe Out of Self-Interest,\" Atlantic , November 15, 2018.", "Michael Miklaucic, \"America's Allies: The Fourth Strategic Offset,\" The Hill , October 24, 2018.", "Doug Bandow, \"The Dangers of Creating a New Arab Alliance; Donald Trump Doesn't Like the Original NATO, So Why Does He Want a Second One?\" National Interest , October 1, 2018.", "Kevin Baron, \"On the Campaign Trail for NATO, With Secretary General Stoltenberg,\" Defense One , September 14, 2018.", "Courtney McBride, \"NATO Chief Defends Value of Military Alliance,\" Wall Street Journal , September 14, 2018.", "Brian Blankenship, \"Control vs. Cost-Sharing: The Dilemma at the Heart of NATO,\" War on the Rocks , August 7, 2018.", "Melanie W. Sisson, \"NATO Isn't Cheap\u2014and It's Still Worth the Price,\" National Interest , July 28, 2018.", "Stephen M. Walt, \"NATO Isn't What You Think It Is,\" Foreign Policy , July 26, 2018.", "Matthew Continetti, \"Why NATO Matters; The Atlantic Alliance is Crucial to American Deterrence,\" National Review , July 21, 2018.", "Rich Lowry, \"Don't Dismiss NATO's Faraway Members; Any Chink in the Alliance Undermines the Strength of the Whole Organization.\" National Review , July 20, 2018.", "Jay Nordlinger, \"Tiny, Faraway Countries and Us,\" National Review , July 20, 2018.", "David French, \"Yes, We Should Fight for Montenegro; Allied Military Hegemony Keeps the Peace.\" National Review , July 18, 2018.", "Peter Beinart, \"What's the Point of NATO, Anyway? Trump Isn't the First Republican to Ask That Question,\" Atlantic , July 12, 2018.", "Daniel Fried, \"The Meaning of the Western Alliance; It Wasn't Just Military Strength That Won the Cold War,\" Atlantic , July 12, 2018.", "Ira Strauss, \"NATO: The Greatest Bargain America Ever Got,\" National Interest , July 12, 2018.", "Christian Whiton, \"NATO Is Obsolete,\" National Interest , July 6, 2018; Hugh White, \"Why Is America Still Defending Europe?; Washington Doesn't Have to Bear the Cost of Maintaining Forces in Europe,\" National Interest , July 3, 2018.", "Mark Hertling, \"NATO Matters, and Trump's Trashing of It Is Dangerous,\" CNN , July 2, 2018.", "Jordan Cohen, \"Alliances Are a Net Gain, Not a Loss, for America,\" National Interest , June 28, 2018.", "Bonnie S. Glaser, \"America, Hold On to Your Allies. You'll Need Them,\" New York Times , June 5, 2018.", "Doug Bandow, \"Time to Terminate Washington's Defense Welfare,\" National Interest , August 30, 2017.", "John Glaser, \"Withdrawing From Overseas Bases, Why a Forward-Deployed Military Posture Is Unnecessary, Outdated, and Dangerous,\" Cato Institute , July 18, 2017. (Policy Analysis 816).", "Doug Irving, \"Are America's Overseas Security Commitments Worth It?\" RAND , July 7, 2017. (This post summarizes a RAND report\u2014Daniel Egel, et al, Estimating the Value of Overseas Security Commitments, RAND Corporation, 2016, 81 pp. [Report RR-518]).", "Hal Brands and Peter D. Feaver, \"What Are America's Alliances Good For?\" Parameters , Summer 2017: 15-30.", "Hugh White, \"China v US: Who Needs Allies?\" Interpreter , May 29, 2017.", "Kori Schake, \"NATO Without America?\" American Interest , May 25, 2017.", "Christopher A. Preble, \"Should the United States Wage War for Friends?\" National Interest , December 15, 2016.", "Barry R. Posen, \"The High Costs and Limited Benefits of America's Alliances,\" National Interest , August 7, 2016.", "Charles Lane, \"The Logic Behind Our Alliances,\" Washington Post , July 28, 2016.", "Jim Talent, \"Why Alliances Matter,\" National Review, July 27, 2016.", "Jeremy Shapiro and Richard Sokolsky, \"How America Enables Its Allies' Bad Behavior,\" Order from Chaos (Brookings Institution) , May 4, 2016.", "Walter Russell Mead, \"The Global Vote of No Confidence in Pax Americana,\" American Interest , April 5, 2016.", "Frank Hoffman, \"Manning the Frontier: Allies and the Unraveling of the World Order,\" War on the Rocks , March 7, 2016.", "Citations for Footnote 63", "For additional discussion of the question of whether a change of some kind in the U.S. role in the world is unavoidable, see, for example:", "Doug Bandow, \"The One Reason America Can't Police the World Anymore: Washington Is Broke,\" National Interest , December 26, 2018.", "Noah Smith, \"Commentary: Get Used to It, America: We're No Longer No. 1,\" Chicago Tribune , December 18, 2018.", "Fareed Zakaria, \"Are We At 'Peak America'?\" Washington Post , November 29, 2018.", "Douglas Macgregor, \"Donald Trump Meets the End of the Empire; Trump Knows That the American Empire is Crumbling. What Is He Going to Do About It?\" National Interest , October 24, 2018.", "Steve LeVine, \"How AI Helps Tyrants,\" Axios , October 8, 2018.", "Stephen Grand, \"America's Foreign Policy Power Is Changing Under Trump; No Other Country Can Yet Match America in Terms of Power, But Washington No Longer Possesses the Ability to Shape World Events As It Did in the Cold War's Aftermath,\" National Interest , September 30, 2018.", "Weizhen Tan, \"China's Military and Economic Power 'Cannot Be Denied' and US 'Has to Make Room,\" CNBC , September 18, 2018 (reports remarks made by Robert Kaplan).", "Thomas Wright, \"The Return of Great-Power Rivalry Was Inevitable; With Neo-Authoritarianism on the Rise, the Old Assumptions Undergirding a Common Set of Western Values Just Won't Do,\" Atlantic , September 12, 2018.", "Yuval Noah Harari, \"Why Technology Favors Tyranny,\" Atlantic , October 2018; Stephen M. Walt, \"America's Anxiety of Influence, The Power of the United States Is Declining\u2014and That's Nothing to Worry About,\" Foreign Policy , August 17, 2018.", "Zeynep Tufekci, \"How Social Media Took Us from Tahrir Square to Donald Trump,\" MIT Technology Review , August 14, 2018.", "Bruno Macaes, \"What the West Is Becoming; Countries That Were Once under Western Influence Are Beginning to Assert Themselves, Heralding a New, Democratic\u2014or Chaotic\u2014World Order,\" National Review , August 8, 2018.", "Ivan Krastev, \"3 Versions of Europe Are Collapsing at the Same Time,\" Foreign Policy , July 10, 2018.", "Gordon Adams, \"A New World Is Dawning, and the US Will No Longer Lead It,\" The Conversation , June 26, 2018.", "Ali Wyne, \"Is America Choosing Decline?\" New Republic , June 21, 2018.", "David M. Smick, \"Who Unraveled the New World Order? It Wasn't Trump. The Global Economic Consensus Began Falling Apart Years Before He Entered Politics.\" Wall Street Journal , June 12, 2018.", "Victor Davis Hanson, \"The Post-War Order Is Over; And Not Because Trump Wrecked it.\" National Review , May 29, 2018.", "Rana Dasgupta, \"The Demise of the Nation State, After Decades of Globalisation, Our Political System Has Become Obsolete\u2014and Spasms of Resurgent Nationalism Are a Sign of Its Irreversible Decline,\" Guardian , April 5, 2018.", "Polina Sinovets, \"The Decline of Cold-War-Era Regimes Could Lead to an International Security Crisis; The Decline of International-Security Regimes Is Inveitable\u2014In Part Because the Majority of Them Were Created During the Cold War,\" National Interest , February 24, 2018.", "Martin Wolf, \"The Long and Painful Journey to World Disorder,\" Financial Times , January 5, 2017.", "Citations for Footnote 67", "See, for example:", "Jeanne Wilson, \"Russia and China Beyond Realpolitik: The Bond of Respect and Values,\" Russia Matters , February 4, 2019.", "Graham T. Allison and Dimitri Simes, \"A Sino-Russian Entente Again Threatens America; The U.S. Must Revise Its Policy Toward Moscow If It Is To Meet the Threat from a Rising China,\" Wall St reet Journal , January 29, 2019.", "John S. Van Oudenaren, \"America's Nightmare: The Sino-Russian Entente; The Most Dangerous Threat to America 'Would Be a Grand Coalition of China and Russie, United Not by Ideology, But by Complementary Grievance.'\" Natio nal Interest , January 12, 2019.", "Dimitri K. Simes, \"Dangerous Liaisons; Ignoring Possible Sino-Russian Cooperation Against the United States, and the Factors That Can Exacerbate It, Could Be Very costly,\" Nation al Interest , December 16, 2018.", "Graham T. Allison, \"China and Russia: A Strategic Alliance in the Making,\" National Interest , December 14, 2018 (a similar version was published on the same date by Russia Matters).", "David Lawler, \"China and Russia Inch Closer Together,\" Axios , December 14, 2018.", "Jonathan Hillman, \"China and Russia's Awkward Romance,\" Wash ington Post , November 15, 2018.", "Marc Champion, \"trump's trade War Is Making Russia and China Comrades Again; Facing U.S. Sanctions and Tariffs, Moscow and Beijing Are Finding Lots of Common Ground,\" Bloomberg , November 5, 2018.", "Robert Sutter, Confronting Growing China-Russia Cooperation; Options for Congress , National Bureau of Asian Research, November 2018, 4 pp.", "Citations for Footnote 72", "See, for example:", "Hans Binnendijk, \"Despite Infighting, Here's How NATO Can Persevere,\" Defense News , September 20, 2018.", "Ishaan Tharoor, \"Trump's NATO Trip Shows 'America First' Is 'America Alone,'\" Washington Post , July 11, 2018.", "John Vandiver, \"Ex-NATO Commander: Trump's Disdain for US-Led Alliance Leads to 'New and Dangerous' Situation,\" Stars and Stripes , July 3, 2018; \\\\.", "Stephen M. Walt, \"The EU and NATO and Trump\u2014Oh My!\" Foreign Policy , July 2, 2018.", "Josh Rogin, \"Trump Is Trying to Destabilize the European Union,\" Washington Post , June 28, 2018.", "Alex Ward, \"Trump Said 'NATO Is As Bad As NAFTA.' That's Scary,\" Vox , June 28, 2018.", "David Ignatius, \"Trump Hurls a Wrecking Ball at the Transatlantic Alliance,\" Washington Post , June 21, 2018.", "Jim Stavridis, \"Trump's Attack on Allies Are Widening the Atlantic,\" Bloomberg , June 14, 2018.", "Walter Russell Mead, \"Why Trump Clashes With Europe; Sharp Differences in Style and Substance Threaten the Trans-Atlantic Alliance.\" Wall Street Journal , June 11, 2018.", "Krishnadev Calamur, \"America Alone? A Bitter End to the G7 Summit Could Have Consequences for America's Alliances.\" Atlantic , June 10, 2018.", "David Frum, \"Trump Goes to War Against the Democracies,\" Atlantic , June 10, 2018.", "David Leonhardt, \"Trump Tries to Destroy the West,\" New York Times , June 10, 2018.", "John Harwood, \"Trump Is Helping Putin with a Key Goal When He spurns US Allies,\" CNBC , June 8, 2018.", "James Goldgeier, \"Less Whole, Less Free, Less at Peace: Whither America's Strategy for a Post-Cold War Europe?\" War on the Rocks , February 12, 2018.", "Citations for Footnote 80", "See, for example:", "Stephen M. Walt, \"A Playbook for Training Donald Trump; Four Strategies That Other Countries Can Use to Deal with a Suddenly Unpredictable Superpower,\" Foreign Policy , August 13, 2018, which identifies the four strategies as \"balancing,\" \"balking,\" \"bonding,\" and \"delegitimization.\" ", "See also Stewart Patrick, \"The World Order Is Starting to Crack; America's Allies and Adversaries Are Adapting to Donald Trump in Ways That Can't Easily Be Reversed,\" Foreign Policy , July 25, 2018, which identifies three approaches that other countries have taken, referred to as \"aligning with China to defend globalization,\" \"pursuing strategic autonomy,\" and \"filling the void.\" ", "See also:", "Andrew Restuccia and Hans Von Der Burchard, \"The World Makes Room for Trump; The G-20 Illustrates Global Philosophy in Trump era: Everybody Plus One.\" Politico , December 1, 2018.", "Edward Wong and Alan Rappeport, \"In Race for Global Power, U.S. and China Push Nations to Pick a Side,\" New York Times , November 21, 2018.", "David Ignatius, \"The World Is Moving On from Trump. And Others Are Stepping Forward.\" Washington Post , November 13, 2018.", "Uri Friedman, \"The World Adjusts to Donald J. Trump,\" Atlantic , September 29, 2018.", "Colum Lynch and Robbie Gramer, \"U.N. Brief: Trump Manages to Untie the U.N.\u2014Against His Isolationist Vision,\" Foreign Policy, September 26, 2018.", "Uri Friedman, \"UN Secretary-General: American Power Is in Decline, the World Is 'in Pieces,'\" Atlantic , September 13, 2018.", "Stewart Patrick, \"The World Order Is Starting to Crack; America's Allies and Adversaries Are Adapting to Donald Trump in Ways That Can't Easily Be Reversed,\" Foreign Policy , July 25, 2018.", "Yasmeen Serhan, \"U.S. Allies Are Helping Trump Undermine Global Trade,\" Atlantic , June 11, 2018.", "Peter Schechter, \"On Trade, No One Is Waiting for Washington; Trump's Protectionism Hasn't Stopped Increasing Cooperation in the Rest of the World.\" National Review , April 23, 2018.", "Bates Gill, \"US Allies Aren't Buying Its New Strategies to Confront China,\" Diplomat , February 5, 2018.", "Stewart Patrick, \"How U.S. Allies Are Adapting to 'America First,'\" Foreign Affairs , January 23, 2018.", "Isobel Thompson, \"'Catastrophic': World Leaders Fear the Worst As Trump Goes Rogue; Foreign-Policy Relationships Are Falling Apart as the White House Dismantles the Post-War Order,\" Vanity Fair , January 4, 2018.", "Charles Kupchan, \"Why Cozying Up to Trump Works; The Rest of the World May Not Like the U.S. President's Bluster, But Playing to His Ego Is a Pretty Good Strategy,\" Foreign Policy , November 16, 2017.", "Krishnadev Calamur, \"How the Rest of the World Heard Trump's UN Speech,\" The Atlantic , September 20, 2017.", "Colum Lynch, \"Before U.N. Summit, World Tells Trump His 'America-First Fun' Must End,\" Foreign Policy , September 16, 2017.", "Richard Wike, et al., \"U.S. Image Suffers as Publics Around World Question Trump's Leadership,\" Pew Research Center, June 26, 2017.", "Citations for Footnote 92", "See, for example:", "Suzanne Nossel, \"Trump and May Are Discrediting Democracy; Chaos and Dysfunction in Washington and London Make Liberal Democratic Government Look Bad\u2014and Embolden China and Russia to Market Authoritarianism As an Efficient Alternative,\" Foreign Policy , January 24, 2019.", "Curtis Stone, \"US Government Dysfunction Should Alarm More Than Just Panda Fans,\" People's Daily Online , January 8, 2019.", "Fred Hiatt, \"Trump Is Disarming America in the Face-Off Against China,\" Washington Post , December 2, 2018.", "Maria Repnikova, \"China's 'Responsive' Authoritarianism,\" Washington Post , November 27, 2018.", "Fred Hiatt, \"If the Chinese Look to the West for a Democratic Model, What Are We Showing Them?\" Washington Post, November 4, 2018.", "Nathan VanderKlippe, \"In 'Failure of U.S. Democracy,' China's Strongmen See a Chance to Get Stronger,\" Globe and Mail , November 12, 2017.", "Li Qingqing, \"US Divide May Deepen Further After Midterm Elections,\" Global Times , November 4, 2018.", "\"Pittsburgh Attack Exposes US Governance Woes,\" Global Times , October 28, 2018.", "\"Spotlight: The Three Dimensions of Chinese Governance,\" Xinhuanet , October 23, 2018.", "Martin Wolf, \"How the Beijing Elite Sees the World, The Charms of Democracy and Free Markets Have Withered for China's Leaders,\" Financial Times , May 1, 2018.", "David Runciman, \"China's Challenge to Democracy,\" Wall Street Journal , April 26, 2018.", "\"Western Political Elections Degraded to Taking Power Instead of Actions: Experts,\" People's Daily Online , April 3, 2018.", "Curtis Stone, \"Op-Ed: The Western Model of Democracy Is No Longer the Only Game in Town,\" People's Daily Online , March 20, 2018.", "Zhong Sheng, \"Op-ed: China's New Type of Party System Enlightens World,\" People's Daily Online , March 12, 2018.", "Zheping Huang, \"Xi Jinping Says China's Authoritarian System Can Be a Model for the World,\" Quartz , March 9, 2018.", "\"Constitutional Amendment Responds to New Era,\" Global Times , February 26, 2018.", "Brendon Hong, \"The Shutdown Drama in D.C. Was Beijing's Cup of Tea,\" Daily Beast , January 22, 2018.", "\"Government Shutdown Exposes System Flaws,\" China Daily , January 22, 2018; \"US Divisions Threaten Leadership Role,\" Global Times , January 13, 2018.", "Curtis Stone, \"Op-Ed: Trump's Fake News Mantra Speaks to a Larger Truth About Western Media,\" People's Daily Online , December 11, 2017.", "Thomas Barker, \"The Real Source of China's Soft Power; Chinese Soft Power Is Not Measured by Blockbuster Films, But By the Appeal of Its Development Model,\" Diplomat , November 18, 2017.", "Curtis Stone, \"Op-Ed: Yep, the World Has a New Role Model for Political and Economic Development,\" People's Daily Online , November 2, 2017.", "Li Laifang, \"Enlightened Chinese Democracy Puts the West in the Shade,\" China Daily , October 17, 2017.", "See also John Keane, \"Phantom Democracy: A Puzzle at the Heart of Chinese Politics,\" South China Morning Post , August 25, 2018.", "Citations for Footnote 95", "See, for example:", "James Traub, \"Trump's Foreign Policy Is Here to Stay; Democrats Have the Upper Hand to Take the White House\u2014But Whoever Wins May Have to Adopt the Current Occupant's Worldview,\" Foreign Policy , January 2, 2019.", "Kadira Pethiyagoda, \"A Restrained Foreign Policy is Becoming More Popular in Washington,\" National Interest , January 1, 2019.", "Stephen Grand, \"America's Foreign Policy Power Is Changing Under Trump; No Other Country Can Yet Match America in Terms of Power, But Washington No Longer Possesses the Ability to Shape World Events As It Did in the Cold War's Aftermath,\" National Interest , September 30, 2018.", "Robert Kagan, \"'America First' Has Won; The Three Pillars of the Ideology\u2014Isolationism, Protectionism and Restricting Immigration\u2014Were Gaining Popularity Before Donald Trump Became President and May Outlast His Tenure,\" New York Times , September 23, 2018.", "Ankit Panda, \"The Damage Is Done: Trump and the Asia-Pacific; The President's Successor Will Need to Offer a Path Forward That Addresses Our Current Self-Serving American Approach,\" Diplomat , September 14, 2018.", "Anne Gearan, \"The Next Administration Should Revive Support of Democratic Values Abroad, New Report Says,\" Washington Post , September 5, 2018.", "Stephen M. Walt, \"Planning for the Post-Trump Wreckage,\" Foreign Policy , August 30, 2018.", "Stewart Patrick, \"The World Order Is Starting to Crack; America's Allies and Adversaries Are Adapting to Donald Trump in Ways That Can't Easily Be Reversed,\" Foreign Policy , July 25, 2018.", "Ronald Brownstein, \"Has Trump Irreversibly Altered the GOP's Foreign Policy?\" Atlantic , June 14, 2018.", "Appendix C. Recent Writings on Whether U.S. Role Should Change", "This appendix lists recent examples of writings on the question of whether the U.S. role in the world should change, with the most recent in top. See also the citations for footnote 53 (regarding proposals for a more-restrained U.S. role in the world) in Appendix B .", "Nathan Gardels, \"The U.S.-China Trade War May Kill the WTO. And That Is a Good Thing.\" Washington Post , August 24, 2018.", "Hal Brands, \"America's Global Order Is Worth Fighting For; The Longest Period of Great-Power Peace in Modern History Is Not a 'Myth.'\" Bloomberg , August 14, 2018.", "Emile Simpson, \"There's Nothing Wrong With the Liberal Order That Can't Be Fixed by What's Right With It; Realists Need to Get a Lot More Realistic about the Global Legal System.\" Foreign Policy , August 7, 2018.", "Dani Rodrik, \"The WTO Has Become Dysfunctional,\" Financial Times , August 5, 2018.", "Hal Brands, \"Trump Can't Split Russia From China\u2014Yet,\" Bloomberg , July 31, 2018.", "Bruno Macaes, \"Why We Need a New Transatlantic Alliance; Trump's Crudity is Unnecessary, But He's Right That Some Rethinking Is Needed.\" National Review , July 13, 2018.", "Zalmay Khalilzad, \"A Strategic Reset for NATO,\" National Interest , July 10, 2018.", "Jay Cost, \"Where Should America Stand on the World Stage? Self-Determination and the Liberal Order of Free Trade Must Be Balanced.\" National Review , June 11, 2018.", "Dov S. Zakheim, \"Clash of the Strategists,\" National Interest , April 15, 2018. (Review of three books on U.S. grand strategy and foreign policy by Robert D. Kaplan, Elliott Abrams, and Harlan K. Ullman.)", "Hal Brands, \"The Chinese Century? Regardless of How America Responds to the Chinese Challenge, Its Policy Must Be Rooted in Reality,\" National Interest , February 19, 2018.", "David C. Hendrickson, \"Is America an Empire?\" National Interest , October 17, 2017.", "Thomas Donnelly and William Kristol, \"An Empire for Liberty,\" Weekly Standard , October 2, 2017.", "Christopher A. Preble, \"Why Isn't There a Debate About America's Grand Strategy?\" National Interest , September 16, 2017.", "James Jay Carafano, \"America Desperately Needs a New Grand Strategy for its Role in the World,\" Heritage Foundation, September 11, 2017.", "Andrew Beddow, \"America Cannot Become a Global Rome,\" National Interest , July 25, 2017.", "Enea Gjoza, \"America Historically Had a Restrained Foreign Policy: It's Time to Return to It,\" National Interest , July 25, 2017.", "Walter Russell Mead, \"A Debate on America's Role\u201425 Years Late,\" Wall Street Journal , May 22, 2017.", "Stephen Sestanovich, \"The President Is Preventing the Foreign-Policy Debate America Needs To Have,\" Defense One , April 13, 2017.", "Hal Brands, \"U.S. Grand Strategy in an Age of Nationalism: Fortress America and Its Alternatives,\" The Washington Quarterly , Spring 2017, 73-93.", "Stephen M. Walt, \"The Donald versus 'The Blob,'\" ISSF Policy Series , February 14, 2017.", "David H. Petraeus, \"America Must Stand Tall,\" Politico , February 7, 2016.", "Robert Kagan, \"Backing Into World War III,\" Foreign Policy , February 6, 2017.", "Eliot Cohen, \"5 Bad Reasons for Pulling Back From the World,\" Politico , January 24, 2017.", "Richard Fontaine and Mira Rapp-Hooper, \"If America Refuses to Lead,\" Wall Street Journal , January 23, 2017.", "Eliot Cohen, \"Should the U.S. Still Carry A 'Big Stick,'\" Los Angeles Times , January 18, 2017.", "Sydney J. Freedberg Jr., \"Fear China Most, 'Flip' Russia, Beware Iran: CSBA,\" Breaking Defense , January 18, 2017.", "Frank Hoffman, \"The Case for Strategic Discipline During the Next Presidency,\" War on the Rocks , January 10, 2017.", "Ali Wyne, \"Did the United States Really Win the Cold War?\" National Interest , January 8, 2017.", "Robert D. Kaplan, \"Why Trump Can't Disengage America From the World,\" New York Times , January 6, 2017.", "Mina Pollmann, \"Naval Strategy: Restraint Rather Than Hegemon,\" Maritime Executive , January 5, 2017. (Interview with Barry Posen)", "Hal Brands, et al., Critical Assumptions and American Grand Strategy , Center for Strategic and Budgetary Assessments, 2017, 57 pp.", "Appendix D. Recent Writings on How Other Countries Are Responding", "This appendix lists recent examples of writings on the question of how other countries are responding to a possible change in the U.S. role in the world, with the most recent on top.", "China, Russia, and Authoritarian and Illiberal Countries in General", "China", "Hal Brands, \"Don't Let China Take the World Hostage,\" Bloomberg , February 6, 2019.", "Patrick M. Cronin, \"What is Causing China's Recent War of Words on Washington?\" National Interest , February 3, 2019.", "David Wainer, \"China Is Eyeing a Widening Void at UN Thanks to Trump,\" Bloomberg , February 1, 2019.", "Gerald F. Seib, \"As U.S. Footprint Shrinks, Others Happily Fill the Void,\" Wall Street Journal , January 7, 2019.", "Jackson Diehl, \"While Trump Wallows in the White House, America's Allies Are Left on Their Own,\" Washington Post , January 6, 2019.", "Jim Hoagland, \"China Is Trying to Woo U.S. Allies. The White House's Response Contains Glaring Failures.\" Washington Post , January 6, 2019.", "Cao Desheng, \"China's Role in Shaping global Governance Hailed,\" China Daily , December 29, 2018.", "Bruno Macaes, \"A Preview of Your Chinese Future; China's Vision of World Order Is a More Radical Departure\u2014and More Realistic Alternative\u2014Than the West Understands,\" Foreign Policy , December 7, 2018.", "Liza Tobin, \"Xi's Vision for Transforming Global Governance: A Strategic Challenge for Washington and Its Allies,\" Texas National Security Review , December 2018.", "Elizabeth Rosenberg and Edoardo Saravalle, \"China and the EU Are Growing Sick of U.S. Financial Power; They Are Trying Their Best to Erode Washington's Rules.\" Foreign Policy , November 16, 2018.", "Christopher Bodeen and Emily Wang, \"China-Japan Drawing Closer Amid Trade Pressure from US,\" Associated Press, October 26, 2018.", "WSJ Staff, \"China, Japan Push for Free Trade as Both Grapple With Trump Demands,\" Wall Street Journal , October 26, 2018.", "Stephen Nagy, \"Is Trump Pushing China and Japan Together? Not Quite. Security Concerns Will Remain a Barrier to Beijing-Tokyo Rapprochement,\" National Interest , October 25, 2018.", "Jane Perlez, \"Japan and China, Asian Rivals, Are Trying to Get Along,\" New York Times , October 24, 2018.", "Anna Fifield and Simon Denyer, \"Japan's Prime Minister, a Trump Buddy, Now Tries to Cozy Up to China's President,\" Washington Post , October 22, 2018.", "Hu Weijia, \"Bilateral FTAs Can Be Beijing's Opportunity in New Era of Multipolar Trade World,\" Global Times , October 18, 2018.", "\"In a Divided U.N., China Blazes Quiet Path to Power,\" Japan Times , October 7, 2018.", "Erik Khzmalyan and Armen Sahakyan, \"Russia and China Aren't Full Allies\u2014Yet; And Here's What Washington Can Do to Keep It That Way,\" National Interest , October 4, 2018.", "John S. Van Oudenaren, \"America's Iran Policy is Helping China Advance Its Vision of a Multipolar World; Beijing Is Using Washington's Maximalist Approach to Tehran as a Transatlantic Wedge,\" National Interest , October 1, 2018.", "Yadong Liu, \"How Trump's Policies Are Helping China; Beijing Still Can't Believe Its Luck,\" Foreign Affairs , September 28, 2018.", "Josh Chin, \"Trump's 'Meddling' Claim Plays Into China's Trade Narrative; By Alleging Without Proof That Beijing Is Interfering in the U.S. Midterms, the President Helped Bolster the Argument That His Real Aim Is to Stop China's Ascent as a Global Power,\" Wall Street Journal , September 27, 2018.", "Anna Fifield, \"China Thinks the Trade War Isn't Really About Trade,\" Washington Post , September 24, 2018.", "Richard Gowan, \"China Fills a Trump-Sized Vacuum at the U.N.,\" Politico , September 24, 2018.", "Jane Perlez, \"China Is Confronting New U.S. Hostility. But Is It Ready for the Fight?\" New York Times , September 23, 2018.", "Abigail Grace, \"China and America May Be Forging a New Economic Order; It's Not a Cold War. But the Dispute Between the World's Largest Economies is Taking the World into Unknown Territory,\" Atlantic , September 20, 2018.", "Elena Holodny, \"Russia, China Embrace Uneasily, Aim for 'Desirable World Order,'\" NBC News , September 20, 2018.", "Gerry Shih, \"In Trump's Trade Wars, China's Unexpected Win: More Friends,\" Washington Post , September 14, 2018.", "Robert Sutter, \"When Will Closer China-Russia Cooperation Impact US Policy Debate? Washington is Debating Russia and China Policy Separately. It Needs to Consider the Emerging Russia-China Axis.\" Diplomat , September 14, 2018.", "Peter Landers, \"Japan and China Find Common Ground in Trump's Tariffs as Leaders Meet,\" Wall Street Journal , September 12, 2018.", "Anton Troianovski, Anna Fifield, and Paul Sonne, \"War Games and Business Deals: Russia, China Sends a Signal to Washington, Washington Post , September 11, 2018.", "John Van Oudenaren, \"Why China Is Wooing Eastern and Central Europe,\" National Interest , September 4, 2018.", "Peter Apps, \"Commentary: Why China and Russia Are Obsessed with Vast New War Games,\" Reuters , August 29, 2018.", "Owen Daniels, \"How China Is Trying to Dominate the Middle East,\" National Interest , August 28, 2018.", "Catherine Wong, \"China Aims for 'Sustainable' Debt with Africa as Belt and Road Initiative Comes Under Fire from West,\" South China Morning Post , August 28, 2018.", "Marc Champion, \"What Does a Chinese Superpower Look Like? Nothing Like the U.S.,\" Bloomberg , August 27, 2018.", "John Pomfret, \"China's Debt Traps Around the World Are a Trademark of Its Imperialist Ambitions,\" Washington Post, August 27, 2018.", "Mark Beeson, \"China Rises, America Falters, and Geoeconomics Rears Its Head,\" War on the Rocks , August 23, 2018.", "Wang Peng, \"Opinion: China's Countermeasures to US Indo-Pacific Strategy,\" China Military Online , August 23, 2018.", "Xie Tao, \"How China Is Polarized by America,\" Diplomat , August 22, 2018.", "Thorsten Benner, et al, \"How to Fight China's Sharp Power,\" ChinaFile , August 20, 2018.", "Eric X. Li, \"The Rise and Fall of Soft Power, Nye's Concept Lost Relevance, But China Could Bring It Back,\" Foreign Policy , August 20, 2018.", "Matthew Carney, \"China and Russia Strengthening Relationship in Bid to Thwart US Dominance,\" ABC (Australian Broadcasting Corporation) , August 19, 2018.", "Bloomberg News, \"China, Unsure of How to Handle Trump, Braces for 'New Cold War,'\" Bloomberg , August 17, 2018.", "Amanda Erickson, \"China Has a New Message for the U.S.: Don't Be Alarmed, We're Not That Great,\" Washington Post , August 16, 2018.", "Keith Bradsher and Steven Lee Myers, \"Trump's Trade War Is Rattling China's Leaders,\" New York Times , August 14, 2018.", "Jamil Anderlini, \"China-Russia: A Dangerous Liaison,\" Financial Times , August 10, 2018.", "Abigail Grace, \"China Doesn't Want to Play by the World's Rules,\" Foreign Policy , August 8, 2018.", "Joel Wuthnow, \"PacNet #55\u2014Why China Discounts the Indo-Pacific Quad,\" Center for Strategic and International Studies, August 7, 2018.", "Daniel Kliman and Abigail C. Grace, \"China Dreams of America Alone; Washington's Poor Treatment of Its Allies Isn't Helping Either,\" National Interest , August 6, 2018.", "Timothy R. Heath, \"China Prepares for an International Order After U.S. Leadership,\" Lawfare , August 1, 2018.", "Nathan Gardels, \"China Is Laying the Groundwork for a Post-American World Order,\" Washington Post , July 27, 2018.", "Mark Leonard, \"The Chinese Are Wary of Trump's Creative Destruction,\" Financial Times , July 25, 2018.", "Huong Le Thu, \"Has China Got Everyone Wrong? Beijing Is Wrong to Think Other Countries Will Roll Over When Confronted,\" National Interest , July 24, 2018.", "Editorial Board, ANU, \"China's Reform Momentum and Global Security,\" East Asia Forum , July 23, 2018.", "Jonathan Hillman, \"A Chinese World Order,\" Washington Post , July 23, 2018.", "Elizabeth Economy, \"Xi Jinping's Superpower Plans,\" Wall Street Journal , July 19, 2018.", "Steven Erlanger and Jane Perlez, \"Europe and Asia Move to Bolster Global Systems That Trump Has Attacked,\" New York Times , July 18, 2018.", "Kevin Rudd, \"Hi Jinping's Vision for Global Governance,\" Project Syndicate , July 11, 2018.", "Nicholas Grossman, \"As America Forfeits International Influence, China Takes Advantage; President Trump's Protectionist Foreign Policy Has Created Global Openings That Beijing Is Only Too Happy to Exploit.\" National Review , July 10, 2018.", "\"Xhi's World Order: July 2024; As America Defies and Dismantles the International Rules-Based Order, a Report from the Future Imagines What Might Replace It,\" Economist , July 7, 2018.", "Richard Javad Heydarian, \"China Is Making a Bid for Global Primacy,\" National Interest , July 1, 2018.", "Barbara Demick and Ttracy Wilkinson, \"Under Trump, America's Influence in the Western Pacific May Be on the Decline,\" Los Angeles Times , June 29, 2018.", "Reuters Staff, \"Xi Says China Must Lead Way in Reform of Global Governance,\" Reuters , June 23, 2018.", "Kerry Brown, \"China's Exceptionalism Rewrites the Western Political Playbook,\" Economist , June 13, 2018.", "Hal Brands, \"China's Master Plan: A Global Military Threat,\" Bloomberg , June 10, 2018.", "Stephen M. Walt, \"Bullies Don't Win at Diplomacy,\" Foreign Policy , June 7, 2018.", "Lucio Blanco Pitlo III, \"Is China Changing the Postwar Consensus or Enhancing It?\" National Interest , May 14, 2018.", "Andrew Polk, \"China Is Quietly Setting Global Standards,\" Bloomberg , May 6, 2018.", "Grant Newsham, \"China-US Trade: A Long-Term Battle of System Versus System,\" Asia Times , May 5, 2018.", "Chen Guangcheng, \"Chinese Dissident: Trump, Don't Trade Away Democratic Values,\" Washington Post , May 3, 2018.", "Martin Wolf, \"How the Beijing Elite Sees the World, The Charms of Democracy and Free Markets Have Withered for China's Leaders ,\" May 1, 2018.", "Evan A. Feigenbaum, \"Reluctant Stakeholder: Why China's Highly Strategic Brand of Revisionism is More Challenging than Washington Thinks,\" Macro Polo , April 27, 2018.", "Jamie Tarabay, \"China's Xi Has A Single-Mindedness Trump Can Only Dream Of,\" CNN , April 14, 2018.", "Marcel Plichta, \"China Is Filling the Africa-Sized Gap in US Strategy,\" Defense One , March 28, 2018.", "Hal Brands and Peter Feaver, \"Living in Trump's World: The Global Reaction to 'America First,'\" War on the Rocks , March 27, 2018.", "Colum Lynch, \"At the U.N., China and Russia Score Win in War on Human Rights,\" Foreign Policy , March 26, 2018.", "Helena Legarda, \"China Upgrades Diplomacy While the US Pulls Back,\" Diplomat , March 20, 2018.", "Robert E. McCoy, \"Beijing Testing the Fault Lines of US Support for Allies Across Asia,\" Asia Times , March 14, 2018.", "Motoko Rich, \"Trump's Unpredictability on Trade and North Korea Opens a Door for China,\" New York Times , March 10, 2018.", "Max Fisher and Audrey Carlsen, \"How China Is Challenging American Dominance in Asia,\" New York Times , March 9, 2018.", "Gerry Shih and Christopher Bodeen, \"China Eyes Greater Global Leadership Role, Downplays Fears,\" Associated Press , March 8, 2018.", "Benjamin Carolson, \"China Loves trump; The People Love a Winner. The Leadership Loves a Dupe.\" Atlantic , March 2018.", "Jane Perlez, \"Xi Jinping Extends Power, and China Braces for a New Cold War,\" New York Times , February 27, 2018.", "Nadege Rolland, \"Beijing's Vision for a Reshaped International Order,\" China Brief , February 26, 2018.", "Tom Phillips, \"While Trump Eyes Latin America with Malign Neglect, China Sees Opportunity,\" Guardia n, February 9, 2018.", "Bloomberg News, \"As U.S. Culls Diplomats, China Is Empowering Its Ambassadors,\" Bloomberg , February 7, 2018.", "Andreas Boje Forsby, \"Trump, Xi, and the Eclipse of the Liberal World Order; As the United States Abdicates, an Illiberal China Steps onto the World Stage,\" DIIS (Dansk Institut for Internationale Studier), February 6, 2018.", "David Pilling, \"US Abdication in Africa Hands Political Opportunities to China,\" Financial Times , February 7, 2018.", "Tobin Harshaw and Daniel Moss, \"What Happens When China Eclipses the U.S. in Asia; A Q&A with Hugh White, a Former Top Australian Official Who Feels Beijing Has Already Filled the U.S. Leadership Void,\" Bloomberg , February 3, 2018.", "Andrew Browne, \"China Builds Bridges and Highways While the U.S. Mouths Slogans; The Marshall Plan Birthed a U.S.-Led Global Order\u2014Now China is Building a New World,\" Wall Street Journal , January 30, 2018.", "Keith Bradsher, \"At Davos, the Real Star May Have Been China, Not Trump,\" New York Times , January 28, 2018.", "Peter Baker, \"Souring World Views of Trump Open Doors for China and Russia,\" New York Times , January 18, 2018.", "Ishaan Tharoor, \"China's Inexorable Rise Is Helped by Trump's Retreat,\" Washington Post , January 11, 2018.", "Evan Osnos, \"Making China Great Again; As Donald Trump Surrenders America's Global Commitments, Xi Jinping Is Learning to Pick Up the Pieces,\" New Yorker , January 8, 2018.", "Antonio C. Hsiang, \"As America Withdraws From Latin America, China Steps In,\" Diplomat , January 4, 2018.", "David Frum, \"Trump's Bellicosity Is Ceding America's Influence to China,\" Atlantic , January 3, 2018.", "Russia", "Gerald F. Seib, \"As U.S. Footprint Shrinks, Others Happily Fill the Void,\" Wall Street Journal , January 7, 2019.", "Jackson Diehl, \"While Trump Wallows in the White House, America's Allies Are Left on Their Own,\" Washington Post , January 6, 2019.", "Liz Sly, \"In the Middle East, Russia is Back,\" Washington Post , December 5, 2018.", "James J. Coyle, \"Russian Influence Growing at American Expense,\" The Hill , October 9, 2018.", "Erik Khzmalyan and Armen Sahakyan, \"Russia and China Aren't Full Allies\u2014Yet; And Here's What Washington Can Do to Keep It That Way,\" National Interest , October 4, 2018.", "Elena Holodny, \"Russia, China Embrace Uneasily, Aim for 'Desirable World Order,'\" NBC News , September 20, 2018.", "Zi Yang, \"Vostok 2018: Russia and China's Diverging Common Interests,\" Diplomat , September 17, 2018.", "Michael Hirsh, \"How Putin's Syrian War Is Humbling Trump,\" Foreign Policy , September 19, 2018.", "Robert Sutter, \"When Will Closer China-Russia Cooperation Impact US Policy Debate? Washington is Debating Russia and China Policy Separately. It Needs to Consider the Emerging Russia-China Axis.\" Diplomat , September 14, 2018.", "Anton Troianovski, Anna Fifield, and Paul Sonne, \"War Games and Business Deals: Russia, China Sends a Signal to Washington,\" Washington Post , September 11, 2018.", "Peter Apps, \"Commentary: Why China and Russia Are Obsessed with Vast New War Games,\" Reuters , August 29, 2018; Matthew Bodner, \"Russia, the Victim? Opposite NATO's Eastern Flank, It's an Expansionist West Causing Anxiety,\" Defense News , August 27, 2018.", "Matthew Carney, \"China and Russia Strengthening Relationship in Bid to Thwart US Dominance,\" ABC (Australian Broadcasting Corporation) , August 19, 2018.", "Kevin Ryan, \"Trump Is Your Yeltsin, This Brief Analogy Speaks Volumes About How Russian Security Elites View the Trump Presidency,\" National Interest , August 19, 2018.", "David Ignatius, \"The Unintended Consequences of U.S. Disengagement in the Middle East,\" Washington Post , August 14, 2018.", "Evelyn N. Farkas and James M. Ludes, \"We Regret to Inform You That Russia Is (Probably) At It Again,\" Atlantic , August 16, 2018; Chuck Freilich, \"In the Middle East the Russians Aren't Coming: They Are Back,\" National Interest , August 13, 2018.", "Jamil Anderlini, \"China-Russia: A Dangerous Liaison,\" Financial Times , August 10, 2018.", "Harry J. Kazianis, \"The Coming American-Russian Alliance Against Russia,\" American Conservative , July 16, 2018.", "Anton Troianovski, \"Putin's View Triumphs in Helsinki as Trump Questions U.S. Intelligence,\" Washington Post , July 16, 2018.", "Hal Brands and Peter Feaver, \"Living in Trump's World: The Global Reaction to 'America First,'\" War on the Rocks , March 27, 2018.", "Colum Lynch, \"At the U.N., China and Russia Score Win in War on Human Rights,\" Foreign Policy , March 26, 2018.", "Peter Baker, \"Souring World Views of Trump Open Doors for China and Russia,\" New York Times , January 18, 2018.", "Authoritarian and Illiberal Countries in General", "Griff Witte, Carol Morello, Shibani Mahtani, and Anthony Faiola, \"Around the Globe, Trump's Style Is Inspiring Imitators and Unleashing Dark Impulses,\" Washington Post , January 22, 2019.", "Alex Ward, \"North Korea, China, and Iran Are Not Happy With Trump's Foreign Policy; The Three Countries Heavily Criticized the US Over the Last 72 Hours for Its Tough Economic Policies Meant to Change Their Behaviors,\" Vox , November 5, 2018.", "Uri Friedman, \"Khashoggi's Murder Heralds a New era of Impunity; The Ugly Geopolitics in the Wake of the Saudi Journalist's Death Point to a World in Which Impunity Reigns,\" Atlantic , October 25, 2018.", "Jackson Diehl, \"Trump Understands Something That the World's Other Power-Hungry Leaders Don't,\" Washington Post , August 19, 2018.", "Jen Kirby, \"Top UN Human Rights Official Rebukes Trump's Press Attacks as 'Close to Incitement of Violence,'\" Vox , August 13, 2018.", "Rick Gladstone, \"China and Russia Move to Cut Human Rights Jobs in U.N. Peacekeeping,\" New York Times , June 27, 2018.", "Colum Lynch, \"Russia and China See in Trump Era a Chance to Roll Back Human Rights Promotion at U.N.,\" Foreign Policy , June 26, 2018.", "Ishaan Tharoor, \"Washington Wakes Up to 'Authoritarian' Populism in the U.S. and Europe,\" Washington Post , May 10, 2018. (The article discusses reports entitled \"Drivers of Authoritarian Populism in the United States: A Primer,\" and \"Europe's Populist Challenge: Origins, Supporters, and Responses,\" released jointly by the American Enterprise Institute and the Center for American Progress.)", "Hal Brands and Peter Feaver, \"Living in Trump's World: The Global Reaction to 'America First,'\" Wa r on the Rocks , March 27, 2018.", "Henri J. Barkey, \"Springtime for Autocrats,\" Ame rican Interest , March 19, 2018.", "Stein Ringen, \"Who in the World Will Defend Democracy?\" Los Angeles Times , March 13, 2018.", "Robin Wright, \"The Rise of the World's New Emperors\u2014With America's Help,\" New Yorker , February 27, 2018.", "Steven Lee Myers, \"With Xi's Power Grab, China Joins New Era of Strongmen,\" New York Times , February 26, 2018.", "Vikram J. Singh and Danielle Pletka, \"It's Time for the World's Democracies to Stand Up for What They Believe In,\" Wash ington Post , February 20, 2018.", "Alan Dupont, \"New World Order: Momentum Is Shifting in Favour of Dictators,\" Australian , February 10, 2018.", "Ishaan Tharoor, \"Trump Is Spreading the Global Erosion of Democracy, Watchdog Says,\" Was hington Post , January 18, 2018.", "Michael J. Abramowitz, Freedom in the World 2018, Democracy in Crisis, Freedom House, undated, released January 2018, 19 pp.", "Uri Friedman, \"The Real-World Consequences of 'Fake News,'\" Atlantic , December 23, 2017.", "Colum Lynch, \"U.N. Human Rights Chief To leave, Citing 'Appalling' Climate for Advocacy,\" For eign Policy , December 20, 2017.", "Krishnadev Calamur, \"\"From Ttrump's Twitter Feed to Dictators' Mouths; A Partial List of the World Leaders Taking Their Cues from the U.S. President's Fight with the Press,\" Atlantic , December 14, 2017.", "Steven Erlanger, \"'Fake News,' Trump's Obsession, Is Now a Cudgel for Strongmen,\" New York Times , December 12, 2017.", "Nikhil Sonnad, \"Trump's Ally in His War on 'Fake News': the Chinese Communist Party,\" Quartz , December 12, 2017.", "Anne Applebaum, \"Why Neo-Fascists Are Making a Shocking Surge in Poland,\" Washington Post , November 13, 2017.", "Erica Frantz and Andrea Kendall-Taylor, \"The Evolution of Autocracy: Why Authoritarianism Is Becoming More Formidable,\" IISS, September 18, 2017 (reprint of article published in Survival , October-November 2017: 57-68).", "Asia and the Indo-Pacific", "Japan", "Steven Erlanger and Jane Perlez, \"America's Allies Fear That Traditional Ties No Longer Matter Under Trump,\" New York Times , December 21, 2018.", "Christopher Bodeen and Emily Wang, \"China-Japan Drawing Closer Amid Trade Pressure from US,\" Associated Press, October 26, 2018.", "WSJ Staff, \"China, Japan Push for Free Trade as Both Grapple With Trump Demands,\" Wall Street Journal , October 26, 2018.", "Stephen Nagy, \"Is Trump Pushing China and Japan Together? Not Quite. Security Concerns Will Remain a Barrier to Beijing-Tokyo Rapprochement,\" National Interest , October 25, 2018.", "Catherine Wong, \"The Fine Line Japan Must Walk Between Frenemy China and Donald Trump'sw 'America First' Agenda,\" South China Morning Post , October 25, 2018.", "Jane Perlez, \"Japan and China, Asian Rivals, Are Trying to Get Along,\" New York Times , October 24, 2018.", "Anna Fifield and Simon Denyer, \"Japan's Prime Minister, a Trump Buddy, Now Tries to Cozy Up to China's President,\" Washington Post , October 22, 2018.", "Brad Glosserman, \"PacNet #70\u2014Japan's Search for Plan C,\" Center for Strategic and International Studies, October 22, 2018.", "Simon Denyer, \"Japan's Abe Stakes Out new Identity in Region: Stronger Leadership and Wider Military Reach,\" Washington Post , October 20, 2018.", "Shiro Armstrong, \"Japan's High Stakes Diplomacy with the US and China,\" East Asia Forum , October 14, 2018.", "Peter Landers, \"Japan and China Find Common Ground in Trump's Tariffs as Leaders Meet,\" Wall Street Journal , September 12, 2018.", "Rupakjyoti Borah, \"Japan's Indo-Pacific Defense Outreach Continues in Sri Lanka and India,\" Diplomat , August 27, 2018.", "Associated Press, \"Japan and EU Sign Trade Deal to Eliminate Nearly All Tariffs,\" Los Angeles Times , July 17, 2018.", "Robin Wright, \"Japan Stands to Gain as America Refuses Involvement in TPP-11 Trade Deal,\" National Interest , July 8, 2018.", "Australia", "James Curran, \"Ausralia's Diplomatic Course between China and the United States,\" East Asia Forum , December 16, 2018.", "Greg Raymond, \"With China-US Tension on the Rise, Does Australia Need a New Defence Strategy?\" The Conversation , November 21, 2018.", "Jason Scott and James Mayger, \"Australia Vows Pacific Pivot Amid China Concerns,\" Bloomberg , November 7, 2018.", "Peter Hartcher, \"Goodbye to Australia's Dangerous Delusion,\" Sydney Morning Herald , October 30, 2018.", "\"Australia Is 'Sleepwalking into an Era of Unprecedented Danger', Warns Former ADF Member Cate McGregor,\" News.com.au , October 5, 2018.", "Catherine McGregor, \"We Are Sleepwalking into an Era of Unprecedented Danger,\" Sydney Morning Herald, October 4, 2018.", "Greg Colton, \"US National Defense Strategy May Force Australia to Get Off the Fence,\" Interpreter , January 23, 2018.", "Hugh White, \"Australia in the New Asia: Without America,\" Australian Outlook (Australian Institute of International Affairs) , December 14, 2017. (Edited extract from speech by Hugh White on December 5, 2017, at launch of his essay \"Without America: Australia in the New Asia,\" Quarterly Essay , Issue 68, November 2017.)", "Jamie Tarabay, \"China or the US? Australia's Tricky Balancing Act,\" CNN , December 6, 2017.", "Jane Perlez and Damien Cave, \"As China Rises, Australia Asks Itself: Can It Rely on America?\" New York Times , December 3, 2017.", "Robert A. Manning, \"Australia Is Worried About America's Ability to Lead,\" Foreign Policy , November 30, 2017.", "India", "Tanvi Madan, \"Between a Cold War Ally and an Indo-Pacific Partner: India's U.S.-Russia Balancing Act,\" War on the Rocks , October 16, 2018.", "Editorial Board, ANU, \"India's Cautious Courtship with the US-Led Order in Asia,\" East Asia Forum , September 24, 2018.", "T.V. Paul, \"How India Will React to the Rise of China: The Soft-Balancing Strategy Reconsidered,\" War on the Rocks , September 17, 2018.", "Robert Farley, \"The Question of the Decade: How Closely Will the US and India Align?\" Diplomat , August 30, 2018.", "Atman Trivedi and Aparna Pande, \"India Is Getting Cold Feet About Trump's America,\" Foreign Policy , August 30, 2018.", "Hamza Shad, \"Can America and India Really Be Strategic Partners?\" National Interest , August 29, 2018.", "Oriana Skylar Mastro, \"Can India Help the United States Against China?\" Lawfare , August 26, 2018.", "Derek Grossman, \"India Is the Weakest Link in the Quad,\" Foreign Policy , July 23, 2018.", "Asia and the Indo-Pacific in General", "John S. Van Oudenaren, \"What Does Growing U.S.-China Rivalry Mean for America's Allies in Asia?\" National Interest , December 13, 2018.", "Richard Javad Heydarian, \"Trump is Forcing China to Reassess its Strategy,\" National Interest , October 20, 2018.", "Ankit Panda, \"The Damage Is Done: Trump and the Asia-Pacific; The President's Successor Will Need to Offer a Path Forward That Addresses Our Current Self-Serving American Approach,\" Diplomat , September 14, 2018.", "Shiro Armstrong, \"Building a Coalition for Openness in Asia,\" East Asia Forum , August 19, 2018.", "Scott D McDonald, \"Wanted: A Strategy for the Indo-Pacific Region; Indo-Pacific Leaders Fear That the United States Is Not Wholly Committed to a Role in the Region,\" National Interest , August 7, 2018.", "Steven Erlanger and Jane Perlez, \"Europe and Asia Move to Bolster Global Systems That Trump Has Attacked,\" New York Times , July 18, 2018.", "Donald Kirk, \"Trump Hands Xi Jinping A Win in Singapore\u2014and May Have Handed All of Asia to China,\" South China Morning Post , June 15, 2018.", "Motoko Rich, \"Trump-Kim Summit Creates New Anxieties for Asian Allies,\" New York Times , June 13, 2018.", "Simon Roughneen, \"Shifting US Policy Leaves Asian Allies at Sea,\" Nikkei Asian Review , June 13, 2018.", "Frederick Kempe, \"Fighting the Wrong War? Reaching the Right Peace? Trump's Foreign Policy Unleashed,\" Atlantic Council , June 4, 2018.", "Christopher Woody, \"Countries in Asia Are Looking for Ways to Counter China's Growing Power\u2014With and Without the US's Help,\" Business Insider , May 26, 2018.", "Hal Brands, \"Xi May Scare Asia Back Into Washington's Orbit,\" Bloomberg, March 4, 2018; Greg Sheridan, \"Donald Trump's Team Making Headway in Asia,\" Australian , February 3, 2018.", "Debra Killalea, \"Why Australia and Asian Allies Are Turning Away from US to China,\" news.com.au , January 29, 2018.", "Ben Westcott, \"Asia Under Trump: How the US Is Losing the Region to China,\" CNN , January 29, 2018.", "David Camroux, \"Is Trump's America the 'Dispensable' Power in Asia?\" East Asia Forum , December 31, 2017.", "TJ Pempei, \"Trump's Democratic Destruction and Asian Absenteeism,\" East Asia Forum , December 30, 2017.", "Andrew Phillips, \"Trump's Truancy in Asia Could Hasten a Hegemon's Demise,\" Interpreter , November 22, 2017.", "See Sang Tan, \"Can East Asian Regionalism Be a Bulwark Against a 'Post-Liberal' West?\" East Asia Forum , November 18, 2017.", "Mark Landler, \"Trump's Mixed Messages Fail to Reassure Asian Allies,\" New York Times , November 14, 2017.", "Foster Klug, \"Asia Braces for Trump and His Unpredictable Foreign Policy,\" Associated Press , November 2, 2017.", "Robert Dujarric, \"US Allies in the Age of Trump; As Trump Prepares to Visit Asia, U.S. Allies in the Region Are Wondering How to Best Respond to His Administration,\" Diplomat , October 31, 2017.", "Europe and Canada", "Leonid Bershidsky, \"Europeans Grow Tired of the U.S.-Led Alliance; Trump Is Downgrading America's Pre-eminent Role in Liberal World Order. Second-Tier Powers Are Trying to Figure Out What Comes Next.\" Bloomberg , February 14, 2019.", "David M. Herszenhorn, \"Europe's NATO Problem; EU Wants to Expand Military Capabilities, But Reliance on America Stands in the Way.\" Politico, February 14, 2019.", "Helene Fouquet, \"The Moment Macron Gave Up on Trump,\" Bloomberg , February 13, 2019.", "Bojan Pancevski, \"In Germany, a Cold War Deal to Hose U.S. Nuclear Weapons Is Now in Question,\" Wall Street Journal , February 12, 2019.", "Emily Tamkin, \"The Problem with Pompeo's Plan to Rival China and Russia in Central Europe,\" Washington Post , February 12, 2019.", "Christian Whiton, \"Dump NATO and Defense New Europe,\" National Interest , February 12, 2019.", "Robbie Gramer, \"When European Countries Retreat From Democracy, How Should the U.S. Respond?\" Foreign Policy , February 11, 2019.", "Sebastian Sprenger, \"Europe Risks Losing Its Footing amid Shifting World Order, Report Warns,\" Defense News , February 11, 2019.", "Ruth Bender, \"As U.S. and China Draw Up Trade Barriers, Germany Fights Back,\" Wall Street Journal , February 5, 2019.", "Dan Balz and Griff Witte, \"Europeans Fear Trump May Threaten Not Just the Transatlantic Bond, But the State of Their Union,\" Washington Post , February 4, 2019.", "Edward Alden, \"The United States Doesn't Have Your Back; The Trump Administration's Message to Canada and Other U.S. Allies Is Clear: If You Take Heat for Helping Washington, You're On Your Own,\" Foreign Policy , January 29, 2019.", "Ted Galen Carpenter, \"What the Evolution of NATO's Missions Means for the Future; Washington Is Pushing the Alliance to Adopt an Increasingly Offensive Focus, and the Allies Could Ber Making a Major, Self-Destructive Blunder to Follow Its Lead.\" National Interest , January 27, 2019.", "Colin Robertson, \"Donald Trump Has Ushered in a New Global Order. Here's How Canada Can Protect Itself,\" Global and Mail , January 22, 2019.", "Dave Lawler, \"Canada Faces Saudi Arabia and China On Its Own,\" Axios , January 14, 2019.", "Yaroslav Trofimov, \"Is Europe Ready to Defend Itself? As Donald Trump's America Pulls back and Vladimir Putin's Russia Looms, France and Germany Are Leading a Renewed Drive for a Common European Union Military,\" Wall Street Journal , January 4, 2019.", "Susan B. Glasser, \"How Trump Made War on Angela Merkel and Europe; The German Chancellor and Other European Leaders Have Run Out of Patience with the President.\" New Yorker , December 24, 2018.", "Hal Brands, \"Allied Relied on Mattis. Now They're Worried.\" Bloomberg , December 21, 2018.", "Steven Erlanger and Jane Perlez, \"America's Allies Fear That Traditional Ties No Longer Matter Under Trump,\" New York Times , December 21, 2018.", "Elizabeth Rosenberg and Edoardo Saravalle, \"China and the EU Are Growing Sick of U.S. Financial Power; They Are Trying Their Best to Erode Washington's Rules.\" Foreign Policy , November 16, 2018.", "Benjamin Haddad, \"Trump Is Getting the European Army He Wanted; US President Pushed NATO Allies to Get Serious on Defense. Now They're Listening.\" Politico , November 14, 2018.", "Katrin Bennhold and Steven Erlanger, \"Merkel Joins Macron in Calling for a European Army 'One Day,'\" New York Times , November 13, 2018.", "Rachel Donadio, \"Trump's Bromance With Macron Fizzles Spectacularly; A Weekend of Presidential Drama in Paris Culminated in the French President's Warning Against an Emerging Global Disorder.\" Atlantic , November 11, 2018.", "David Nakamura, Seung Min Kim, and James McAuley, \"Macron Denounces Nationalism As a 'Betrayal of Patriotism' in Rebuke to Trump at WWI Remembrance,\" Washington Post , November 11, 2018.", "Stacy Meichtry and Laurence Norman, \"France's Macron Calls for Creating a 'European Army'; French President Sharply Criticizes Europe's Military Reliance on the U.S., Days Before President Trump Is to Visit,\" Wall Street Journal , November 6, 2018.", "\"France's Macron Pushes for 'True European Army,'\" BBC , November 6, 2018.", "Jacob M. Schlesinger, Paul Vieira, and Emre Peker, \"WTO Members Work to Overhaul Trade Watchdog Amid Trump's Criticism; Failure to Meet U.S. Demands Could Leave Global Commercial Court in Limbo; 'Every Case Potentially Becomes a Trade War,' One WTO Official Says,\" Wall Street Journal , October 23, 2018.", "\"EU Builds Ties with Asia in Face of US Protectionism,\" Agence France-Presse, October 18, 2018.", "Rick Noack, \"Yes, World Leaders Laughed at Trump. But There Was Another, Less Obvious Sign of Diminishing U.S. Influence,\" Washington Post , September 26, 2018.", "Agence France-Presse, \"Macron at UN Rebukes Trump's 'Law of the Strongest,'\" Daily Mail (UK) , September 25, 2018.", "Angela Charlton, \"Trump and Macron: Realism Replaces Unlikely Bromance,\" Associated Press , September 25, 2018.", "Frank Jordans and Angela Charlton, \"AP Interview: NATO Chief Plays Balancing Act with Russia,\" Associated Press , September 25, 2018.", "Amy J. Nelson and Emily Byrne, \"To Improve Transatlantic Relations Look to History and Identity; Without Leadership by Example from Europe or America, the World Order Will Shift in China's Favor,\" National Interest , September 25, 2018.", "Sten Running, \"A Europeanized NATO? The Alliance Contemplates the Trump Era and Beyond,\" War on the Rocks , September 25, 2018.", "Tim Ruhlig, \"The EU's New China Resolution: Principled But Not Strategic,\" Diplomat , September 13, 2018.", "Hans Binnendijk, \"Despite Infighting, Here's How NATO Can Persevere,\" Defense News , September 20, 2018.", "Kristin Huang, \"Russia-China Military Cooperation 'Could Worry Europe,'\" South China Morning Post , September 14, 2018.", "Pierre Tran, \"France Wonders: Can We Always Count on American Support?\" Defense News , September 14, 2018.", "Catherine Wong, \"EU and China Need Closer Ties Urgently to Offset Trade Disruption, Says Bloc's New Ambassador in Beijing,\" South China Morning Post , September 14, 2018.", "Ben Sills and Esteban Duarte, \"Europe Pushing for Euro Dominance to Fend Off Trump, Spain Says,\" Bloomberg , September 13, 2018.", "Pierre Tran, \"French Joint Chiefs Call for Coordinated European Force,\" Defense News , September 11, 2018.", "Keith Johnson, \"The Buck Stops Here: Europe Seeks Alternative to U.S.-Dominated Financial System; German and France Complain That the U.S. Is Abusing Sanctions Power to Bully Even Its Allies,\" Foreign Policy , September 5, 2018.", "John Van Oudenaren, \"Why China Is Wooing Eastern and Central Europe,\" National Interest , September 4, 2018.", "John Detrixhe, \"The Divide Between the US and Europe Is Growing, Just as Putin Hoped,\" Quartz, September 1, 2018.", "Anne Kauranen, \"It's Time for Realism in EU-Russia Ties: France's Macron,\" Reuters , August 30, 2018.", "Agence France-Presse, \"German Foreign Minister Brands Trump's EU Policy 'Irritating,'\" Agence-France-Presse , August 28, 2018.", "Agence France-Presse, \"French President Emmanuel Macron Insists EU Can No Longer Rely on US to Guarantee Its Security,\" South China Morning Post , August 27, 2018.", "Angelique Chrisafis, \"Europe Can No Longer Rely on US for Security, Says Emmanuel Macron, Guardian , August 27, 2018.", "Remi Adekoya, \"Europe's Donald Can Fight Dirty, Too,\" Foreign Policy , August 20, 2018.", "Ilya Arkhipov and Arne Delfs, \"Putin and Merkel, Pushed Together by Trump, Talk Syria, Pipeline,\" Bloomberg , August 18, 2018.", "Melissa Eddy, \"Another Surprise Meeting With Putin. This Time, It's Merkel,\" New York Times , August 13, 2018.", "Ott Ummelas, \"NATO's East Is Rearming, But It's Because of Putin, Not Trump,\" Bloomberg , August 13, 2018.", "David M. Herszenhorn, \"EU Vows to Thwart Trump's Sanctions on Iran,\" Politico , August 6, 2018.", "Chrystia Freeland, \"In Defence of the Rules-Based International Order: How Canada and Its Partners Must Fight Back, 32 nd IISS Fullerton Lecture, August 2, 2018.", "Derek, \"Trump's Performance in Helsinki Shouldn't Have Come as a Surprise; U.S. Allies in Europe Are Resigned to a Trans-Atlantic Relationship That Keeps Getting Worse,\" Foreign Policy , July 19, 2018.", "Steven Erlanger and Jane Perlez, \"Europe and Asia Move to Bolster Global Systems That Trump Has Attacked,\" New York Times , July 18, 2018.", "Associated Press, \"Japan and EU Sign Trade Deal to Eliminate Nearly All Tariffs,\" Los Angeles Times , July 17, 2018.", "Raf Casert, \"EU, US Relations Sinking Further After Divisive Trump Tour,\" Associated Press , July 17, 2018.", "Jack Ewing, \"E.U. Courts New Partners With Japan Trade Deal,\" New York Times , July 17, 2018.", "Michael Birnbaum, \"Europe Fears Trump-Putin Summit Will Embolden Kremlin, Weaken Transatlantic Unity,\" Washington Post , July 16, 2018.", "Michelle Goldberg, \"'Evil Has Won'; Pro-American Germans Feel Betrayed,\" New York Times , July 13, 2018.", "Abigail Tracy, \"'He Chooses the Hammer Every Time': NATO Left Fuming As Trump Turns Toward Putin,\" Vanity Fair , July 13, 2018.", "Zachary Cohen, Michelle Kosinski, and Barbara Starr, \"Trump's Barrage of Attacks 'Beyond Belief,' Reeling NATO Diplomats Say,\" CNN , July 12, 2018.", "Steven Erlanger, Julie Hirschfeld Davis, and Katie Rogers, \"NATO Survives Trump, but the Turmoil Is Leaving Scars,\" New York Times , July 12, 2018.", "Vanessa Gera, \"Trump's Tough NATO Talk Plays Well on Eastern Flank,\" Associated Press , July 12, 2018.", "Valentina Pop, Laurence Norman, and Robert Wall, \"Trump Unsettles NATO Allies With Demands as He Backs Alliance,\" Wall Street Journal , July 12, 2018.", "Reihan Salam, \"The Coming Split in NATO; Trump Wants Our European Allies to Build Their Military Strength. What Will It Look Like If they Do?\" Atlantic , July 12, 2018.", "Richard Fontaine and Vance Serchuk, \"The West Will Survive Trump,\" Atlantic , July 12, 2018.", "Robert Burns, \"Trump's Attacks on NATO Raise Questions About Its Future,\" Associated Press , July 10, 2018.", "Ulrike Franke, \"Watching for Signs of NATO's End of Times,\" War on the Rocks , July 10, 2018.", "David M. Herszenhorn, \"Trump's Neglect of Europe Goes Beyond Angry Tweets; Unfilled Positions, Truncated Communications, Lack of Policy Clarity Combine to Provoke Anger Across the Continent,\" Politico , July 10, 2018.", "Phil Stewart, \"As Trump Confounds, Mattis Seen as Quiet Champion Among NATO Allies,\" Reuters , July 9, 2018.", "Michael Birnbaum, \"Ahead of NATO Summit, Allies Wonder: Will NATO Survive Trump?\" Washington Post , July 8, 2018.", "Greg Jaffe, Josh Dawsey, and Carol D. Leonnig, \"Ahead of NATO and Putin Summits, Trump's Unorthodox Diplomacy Rattles Allies,\" Washington Post , July 6, 2018.", "Jimmy Quinn, \"'America First' Is the EU's Greatest Opportunity,\" National Review , June 28, 2018.", "Reuters Staff, \"EU Leaders to Strengthen Defenses, Seek 'Strategic Autonomy' At Summit: Draft,\" Reuters , June 27, 2018.", "Josh Rogin, \"Biden: European Leaders Reeling from Trump's Hostile Behavior,\" Washington Post , June 26, 2018.", "Daniel Boffey, \"Nato Chief Warms Over Future of Transatlantic Relationship,\" Guardian , June 19, 2018.", "Simon Nixon, \"Europe Ponders New World Order as Trans-Atlantic Ties Fray,\" Wall Street Journal, June 12, 2018.", "Stephen Collinson, \"The West Is in Crisis, Despite Trump's Glowing Assessment,\" CNN , June 9, 2018.", "Frederick Kempe, \"Fighting the Wrong War? Reaching the Right Peace? Trump's Foreign Policy Unleashed,\" Atlantic Council , June 4, 2018.", "Erik Brattberg, \"Why Trump's Tariffs May Push Europe Toward China and Russia,\" National Interest , June 3, 2018.", "Joergen Oerstroem Moeller, \"The End of the Atlantic Alliance,\" National Interest , May 28, 2018.", "Yasmeen Serhan, \"Is the U.S. Bringing Europe and Russia Closer Together?\" Atlantic , May 25, 2018.", "Robbie Gramer, \"NATO Chief Worried About Fissures Between United States and Europe,\" Foreign Policy , May 18, 2018.", "Keith Johnson, Dan De Luce, Emily Tamkin, \"Can the U.S.-Europe Alliance Survive Trump?\" Foreign Policy , May 18, 2018.", "James Traub, \"RIP the Trans-Atlantic Alliance, 1945-2018; The Partnership with America Had a Long Life\u2014But Europe Is Ready to Start Over.\" Foreign Policy , May 11, 2018.", "Stephen M. Walt, \"Europe Has No Clue How to Handle an American Bully,\" Foreign Policy , May 2, 2018.", "Kevin Baron, \"Macron Mic-Drops on Trump, Offers a New Call to Western Leadership,\" Defense One , April 25, 2018.", "Steven Erlanger, \"Europe Once Saw Xi Jinping as a Hedge Against Trump. Not Anymore.\" New York Times , March 4, 2018.", "Doug Bandow, \"Europe Still Doesn't Take Its Own Defense Seriously,\" National Interest , February 24, 2018.", "Michael Birnbaum and Griff Witte, \"German Defense Minister Slams Trump's Military-Heavy Approach to Security,\" Washington Post , February 16, 2018.", "Teri Schultz, \"Is Europe Bold Enough to Counter US Ambivalence?\" Deutsche Welle , February 15, 2018.", "Mercy A. Kuo, \"What the EU Thinks of the US 'Indo-Pacific' Strategy, Insights from Bernt Berger,\" Diplomat , January 31, 2018.", "Matt Peterson, \"A Glimpse of a Canadian-Led International Order; The U.S. Ditched a Massive Trade Agreement\u2014Which Turned Out Slightly Better Without It,\" Atlantic , January 24, 2018.", "Freddy Gray, \"The 'Special Relationship' Is in Trouble, And That's Bad News for London,\" National Interest , January 16, 2018.", "Christiane Hoffmann and Claus Brinkbaumer, \"'We Are Seeing What Happens When the U.S. Pulls Back,'\" Spiegel , January 8, 2018. (Interview with German Foreign Minister Sigmar Gabriel.)", "Anna Sauerbrey, \"Is the Trans-Atlantic Relationship Dead?\" New York Times , January 3, 2018.", "Appendix E. Recent Writings on U.S. Role and World Order", "This appendix lists recent examples of writings on the question whether a changed U.S. role in the world is affecting world order in some way, with the most recent on top.", "Andreas Illmer, \"China Disappearances Show Beijing Sets Its Own Rules,\" BBC , October 17, 2018.", "Bethany Allen-Ebrahimian, \"Can the Chinese Be Trusted to Lead International Institutions?\" Defense One , October 14, 2018.", "Bethany Allen-Ebrahimian, \"Can the Chinese Be Trusted to Lead Global Institutions? The Abduction of Interpol's President Shows That Beijing's Officials Will Be Subordinate to the Orders of the Communist Party,\" Atlantic , October 11, 2018.", "Matt Stoller, \"If the U.S. Doesn't Control Corporate Power, China Will; Laissez-Faire Economics Has left Firms Bending the Knee to Beijing,\" Foreign Policy , October 11, 2018.", "Charlotte Gao, \"Abrupt Detention of Meng Hongwei Further Damages China's International Reputation; Meng, Like All Other Chinese Citizens, Deserves Procedural Justice, One Core Value of the Rule of Law Which China Often Ignores,\" Diplomat , October 9, 2018.", "Julian Ku, \"Why China's Disappearance of Interpol's Chief Matters,\" Lawfare , October 9, 2018.", "Sophie Richardson, \"China Disappeared Interpol's Chief. The World Can't Pretend It's Business as Usual.\" Washington Post , October 9, 2018.", "Timothy R. Heath, \"PacNet #68\u2014What Does China's Pursuit of a Global Coalition Mean for World Politics?\" Center for Strategic and International Studies, October 3, 2018.", "Bradley A. Thayer and John M. Friend,\" The World According to China; Understanding the World China Seeks to Create by 2049, When the PRC Turns 100,\" Diplomat , October 3, 2018.", "William Dobson, \"China Unbound: What An Emboldened China means For The World,\" NPR , October 2, 2018.", "Andrea Kendall-Taylor and David Shullman, \"How Russia and China Undermine Democracy; Can the West Counter the Threat?\" Foreign Affairs , October 2, 2018.", "Amy J. Nelson and Emily Byrne, \"To Improve Transatlantic Relations Look to History and Identity; Without Leadership by Example from Europe or America, the World Order Will Shift in China's Favor,\" National Interest , September 25, 2018.", "Michelle Nichols, \"U.N. Chief Warms Leaders of 'Increasingly Chaotic' World Order,\" Reuters , September 25, 2018.", "Steven Erlanger, \"Is the World Becoming a Jungle Again? Should Americans Care?\" New York Times , September 22, 2018.", "Abigail Grace, \"China and America May Be Forging a New Economic Order; It's Not a Cold War. But the Dispute Between the World's Largest Economies is Taking the World into Unknown Territory,\" Atlantic , September 20, 2018.", "Elena Holodny, \"Russia, China Embrace Uneasily, Aim for 'Desirable World Order,'\" NBC News , September 20, 2018.", "Graham Allison, \"The Truth About the Liberal Order,\" Foreign Affairs , August 28, 2018.", "Jackson Janes and Peter S. Rashish, \"The West's Greatest Challenge Lies in Washington, Not Moscow,\" National Interest , August 17, 2018.", "Christopher A. Preble, \"Is This the End of the Liberal World Order?\" National Interest , August 3, 2018.", "James Kirchick, \"Trump Wants to Destroy the World Order. So What? Whatever the President's Intentions, His Efforts to Rock the Foundation of International Politics Are Hopeless,\" Foreign Policy , July 26, 2018.", "Stewart Patrick, \"The World Order Is Starting to Crack; America's Allies and Adversaries Are Adapting to Donald Trump in Ways That Can't Easily Be Reversed,\" Foreign Policy , July 25, 2018.", "Uri Friedman, \"The Rise of 'Revisionist America,'\" Atlantic , July 19, 2018.", "Christopher Cadelago, \"Trump's Step Toward Putin Seals a New World Order; The President Has Upended the Global Definitions of Friends and Foes,\" Politico , July 16, 2018.", "Max Fisher, \"Trump Shakes the International Order. Could It Break?\" New York Times , July 15, 2018.", "Robert Kagan, \"Things Will Not Be Okay,\" Washington Post , July 12, 2018.", "Amitav Acharya, \"Asia After the Liberal International Order,\" East Asia Forum , July 10, 2018.", "David A. Graham, \"Can Anyone Fill the U.S. Leadership Vacuum on Climate Change? American Withdrawal from the Paris Agreement Is a Test for the Future of the Globe, But Also for the International Order.\" Atlantic , June 25, 2018.", "George Packer, \"Donald Trump Goes Rogue; In Half a Week, Between Quebec and Singapore, Trump Showed That the Liberal Order Is Hateful to Him, and That He Wants Out,\" New Yorker , June 25, 2018.", "Kori Schake, \"The Trump Doctrine Is Winning and the World Is Losing,\" New York Times , June 15, 2018.", "Graham Allison, \"The Myth of the Liberal Order,\" Foreign Affairs , June 14, 2018.", "Michael Hirsh, \"The International System He Disdains Was Created by Americans\u2014to Advance American Interests.\" Washington Post , June 14, 2018.", "Robert Kagan, \"Trump's America Does Not Care,\" Washington Post , June 14, 2018.", "Fred Kaplan, \"Demolition Donald, It's Undeniable That the President Is Wrecking the U.S.-Led International Oder. The Only Question Left Is Whether He's Doing It on Purpose.\" Slate , June 14, 2018.", "Jeremy Diamond, \"Trump Resets the World Stage,\" CNN , June 13, 2018.", "Ben Steil, \"The West Will Die So That Trump Can Win,\" Foreign Policy , June 12, 2018.", "Zachary Karabell, \"Trump's Creative Destruction of the International Order,\" Foreign Policy , June 11, 2018.", "\"Present at the Destruction; America's President Is Undermining the Rules-Based International Order. Can Any Good Come of It?\" Economist , June 9, 2018: 18-20, 22.", "Frederick Kempe, \"Present at the Destruction?\" Atlantic Council , June 9, 2018.", "Aris Folley, \"Top EU Figure: Trump Is 'Undermining' World Order US Created,\" The Hill , June 8, 2018.", "Karebn DeYoung, \"In Trump, Some Fear the End of the World Order,\" Washington Post , June 8, 2018.", "Ana Campoy, \"Trump Is a Globalist. Just a Chaotic One.\" Quartz , April 7, 2018.", "Frerd Bauer, \"To Preserve the 'Liberal World Order,' Reform It; The Political Establishment's Decisions Have Contributed Mightily to the Problems We Face.\" National Review , April 2, 2018.", "Michael Brendan Dougherty, \"The Endless Hysteria about the Liberal World Order,\" National Review , March 27, 2018.", "Stewart M. Patrick, \"China and Trump May Bury the Liberal International Order,\" Defense One , March 25, 2018.", "Joseph S. Nye, \"Human Rights and the Fate of the Liberal Order,\" Project Syndicate , May 9, 2018.", "Richard N. Haass, \"Liberal World Order, RIP,\" Strategist (ASPI) , March 24, 2018.", "Hal Brands, \"The 'American Century' Is Over, and It Died in Syria,\" Bloomberg , March 8, 2018; Robert Farley, \"How Can the US Manage a Rising China? The United States Needs to Rethink How It Approaches International Oder,\" Diplomat , February 27, 2018.", "Eliot A. Cohen, \"Witnessing the Collapse of the Global Elite,\" Atlantic , February 19, 2018.", "Ash Jain, \"Is the Democratic Order Doomed?\" Atlantic Council , February 15, 2018.", "Tunku Varadarajan, \"Will China Impost a New World Order? When Pax Britannica Gave Way to Pax Americana, the Transition Was Peaceful. A Repeat Is unlikely, Says the Author of 'Safe Passage.'\" Wall Street Journal , February 9, 2018.", "Andreas Boje Forsby, \"Trump, Xi, and the Eclipse of the Liberal World Order; As the United States Abdicates, an Illiberal China Steps onto the World Stage,\" DIIS (Dansk Institut for Internationale Studier) , February 6, 2018.", "Salvatore Babones, \"America Has Little to Fear from a China-Centered World,\" Washington Post , January 25, 2018.", "Aaron Friedberg, \"China's Understanding of Global Order Shouldn't Be Ours,\" Foreign Policy , January 24, 2018; Matt Peterson, \"A Glimpse of a Canadian-Led International Order; The U.S. Ditched a Massive Trade Agreement\u2014Which Turned Out Slightly Better Without It,\" Atlantic , January 24, 2018.", "Chengxin Pan, \"Time to Worry About a Chinese-Led Global Order,\" Interpreter , January 10, 2018.", "Isobel Thompson, \" 'Catastrophic': World Leaders Fear the Worst As Trump Goes Rogue; Foreign-Policy Relationships Are Falling Apart as the White House Dismantles the Post-War Order,\" Vanity Fair , January 4, 2018.", "Charlotte Gao, \"2018: China Vows to Be the Keeper of International Order,\" Diplomat , January 2, 2018; Jennifer Lind, \"Will the Liberal Order Destroy Itself? While cosmopolitan Americans Grieved on November 9, 2016, That Trump Would Ruin the Liberal International Order, the Order Was Already Straining Under Its Own Ambitions,\" National Interest , December 18, 2017.", "H. Brands and C. Edel [Hal Brands and Charles Edel], \"The Disharmony of the Spheres; The U.S. Will Endanger Itself If It Accedes to Russian and Chinese Efforts to Change the International System to Their Liking,\" Commentary , December 14, 2017.", "Korber-Stiftung, \"Yan Xuetong on How Germany and China Should Rethink the Global Order; 'The Current Norms Are No Longer Suitable,'\" Diplomat , December 6, 2017.", "Oliver Stuenkel, \"No Need to Fear a Post-Western World,\" Global Times , November 28, 2017.", "Richard Heydarian, \"Trump Humbled in China as Beijing Visit Underlines the New World Order in Asia,\" South China Morning Post , November 13, 2017.", "David Usborne, \"Donald Trump's America First Doctrine Will Destroy the United Nations,\" Independent (UK) , September 19, 2017.", "Philip Zelikow, \"Is the World Slouching Toward a Grave Systemic Crisis?\" The Atlantic , August 11, 2017.", "Fareed Zakaria, \"Say Hello to a Post-America World,\" Washington Post , July 27, 2017.", "Hal Brands and Eric Edelman, \"America and the Geopolitics of Upheaval,\" National Interest , June 21, 2017.", "George Fujii, \"The End of American Liberal Internationalism?\" ISSF Policy Series , March 30, 2017.", "Uri Friedman, \"What a World Led by China Might Look Like,\" The Atlantic , March 29, 2017.", "Bjorn Jerden, et al., \"Don't Call it the New Chinese Global Order (Yet),\" Foreign Policy , March 7, 2017.", "Kori Schake, \"Will Washington Abandon the Order?\" Foreign Affairs , January/February 2017.", "See also the following RAND reports, written under RAND's \"Building a Sustainable International Order\" project:", "Michael J. Mazarr, Summary of the Building a Sustainable International Order Project , RAND, 2018, 32 pp.", "Michael J. Mazarr, Astrid Stuth Cevallos, Andrew Radin, and Miranda Priebe, Building a Sustainable International Order, Summary of the First Workshop in the International Order Project Series , RAND, 2016, 8 pp.", "Michael J. Mazarr, Miranda Priebe, Andrew Radin, and Astrid Stuth Cevallos, Understanding the Current International Order , RAND, 2016, 80 pp.", "Michael J. Mazarr and Ashley L. Rhoades, Testing the Value of the Postwar International Order , RAND, 2018, 124 pp.", "Michael J. Mazarr, et al, Measuring the Health of the Liberal International Order , RAND, 2017, 228 pp.", "Kyle Lascurettes, The Concert of Europe and Great-Power Governance Today: What Can the Order of 19th-Century Europe Teach Policymakers About International Order in the 21st Century? RAND, 2017, 36 pp.", "Michael J. Mazarr, Miranda Priebe, Andrew Radin, and Astrid Stuth Cevallos, Alternative Options for U.S. Policy Toward the International Order , RAND, 2017, 130 pp.", "Hal Brands, American Grand Strategy and the Liberal Order: Continuity, Change, and Options for the Future , RAND, 2016, 40 pp.", "Michael J. Mazarr, Timothy R. Heath, and Astrid Stuth Cevallos, China and the International Order , RAND, 2018, 172 pp.", "Andrew Radin and Clinton Bruce Reach, Russian Views of the International Order, RAND, 2017, 124 pp.", "Appendix F. Background Information on U.S. Public Opinion About U.S. Role", "This appendix presents background information on U.S. public opinion relating to the U.S. role in the world.", "November 2018 Pew Research Center Survey", "A November 2018 article by the Pew Research Center regarding a survey of U.S. foreign policy attitudes conducted in November 2018 states", "The public's leading long-range foreign policy goals for the United States are focused on security, including economic security. About seven-in-ten (72%) say that taking measures to protect the U.S. from terrorist attacks should be a top priority for the country, while about as many (71%) say the same about protecting the jobs of American workers.", "Two-thirds (66%) say preventing the spread of weapons of mass destruction (WMD) should be a top long-range priority for the United States.", "With only a handful of exceptions, including stopping the spread of WMD, there are sizable differences between Republicans and Democrats on the 26 foreign policy goals in the survey by Pew Research Center, which was conducted Nov. 7-16 among 10,640 adults. And on several foreign policy goals, particularly the importance of maintaining U.S. military superiority, there also are notable gaps between older and younger adults.", "U.S. allies. Improving relationships with U.S. allies ranks at the top of Democrats' foreign policy goals (70% top priority) but is a middle-tier objective for Republicans (44%). In addition, Republicans are 30 percentage points more likely to say that getting other countries to assume more of the costs of maintaining world order should be a top priority for U.S. foreign policy (56% vs. 26%).", "U.S. military superiority. A large majority of Republicans and Republican-leaning independents (70%) say that maintaining the U.S. military advantage over all other countries should be a top priority for the U.S.; just 34% of Democrats and Democratic leaners rate this as a top priority. Notably, maintaining U.S. military superiority is a top priority for a majority of adults ages 50 and older (62%). But just 30% of those younger than 30 say this should be a top foreign policy priority.", "Refugees and immigration. While only about four-in-ten Democrats (39%) say that aiding refugees fleeing violence should be a top foreign policy priority, far fewer Republicans (11%) say the same. Republicans are far more likely than Democrats to rate reducing both illegal immigration and legal immigration into the U.S. as major priorities. The partisan divide on the importance of reducing illegal immigration, 48 percentage points, is wider than at any point in the past two decades (68% of Republicans vs. 20% of Democrats).", "Climate change. Partisans have long differed over the importance of dealing with climate change. But the gap is especially wide today, with 64% of Democrats and just 22% of Republicans saying that dealing with climate change should be a top foreign policy priority for the U.S. (The survey was conducted before the Nov. 23 release of the National Climate Assessment.)", "Russia, Iran, China and North Korea. Partisan opinions about limiting the power and influence of Iran and Russia are nearly mirror images: 52% of Democrats say reducing Russia's power and influence should be a top priority, compared with 32% of Republicans. By contrast, 52% of Republicans rate limiting Iran's power as a top goal, compared with 29% of Democrats. Reducing China's power and influence is not a leading goal for either party, but more Republicans (39%) than Democrats (26%) rate this as a top priority. There is greater partisan agreement on North Korea: 43% of Republicans and 35% of Democrats say limiting North Korea's power and influence is a top priority.", "Trade and economic relations. Reducing the U.S. trade deficit with other countries is viewed as a top foreign policy priority by 54% of Republicans, compared with 33% of Democrats. And more Republicans (51%) than Democrats (40%) say promoting U.S. economic interests abroad should be a top foreign policy priority.", "Among the public overall, attracting skilled workers from other countries (16% top priority), promoting democracy in other countries (17%) and finding a solution to the conflict between Israel and the Palestinians (18%) rank near the bottom of the long-range foreign policy goals. However, for each of these items \u2013 indeed, for all 26 priorities in the survey \u2013 majorities say they should be given top priority or some priority.", "Young and old differ over importance of foreign policy goals", "Younger Americans (those under 30) are generally less likely to say that the issues presented in the survey should be a \"top priority.\" Across the 26 items included in the survey, those under 30 are an average of 10 points less likely than those 65 or older to say each should be a \"top priority.\" In some cases the gaps between older and younger Americans are much larger.", "Younger Americans are much less likely than their older counterparts to prioritize limiting the power and influence of several prominent foreign powers. Only about three-in-ten young people feel that the U.S. should place top priority on limiting the power and influence of Russia (29%), Iran (29%) and North Korea (26%). Even fewer say the same about China (21%). By contrast, Americans 65 or older are much more likely to say that limiting the influence of these countries should be a top priority. For instance, 54% say limiting the power and influence of Russia should be a top priority for the U.S.", "There are a few issues that younger people place greater importance on than older adults. About half (49%) of those ages 18 to 29 say the U.S. should make protecting groups or nations threatened with genocide a top priority; fewer of those 65 or older (36%) say the same. Younger people are 18 percentage points more likely than the oldest adults to say that promoting and defending human rights in other countries should be a top priority (41% vs. 23%). When it comes to aiding refugees fleeing violence around the world, those younger than 65 are more likely than those ages 65 and older to say this should be a top foreign policy priority for the U.S.", "There's also a substantial age divide in the priority given to goals involving the U.S. military. Americans 65 and older are more than twice as likely as those under 30 to say that the U.S. maintaining its military advantage over all other countries is a top priority (64% vs. 30%).", "Younger people are more likely than older people to say that reducing U.S. military commitments overseas should be a top priority (34% vs. 20%).", "Age gaps also are seen in dealing with terrorism. About eight-in-ten of those 50 and older (81%) say that taking measures to protect the U.S. from terrorist attacks should be a top priority, this figure drops nearly 20 points among those under 50 (63%). When asked about whether the U.S. should prioritize taking measures to seek out and destroy terrorist groups in other countries, about a quarter of Americans under 50 (27%) say it should be a top priority compared with 44% of those 50 or older.", "Shifting views of U.S. foreign policy goals", "The public's views of long-term goals for U.S. foreign policy have shifted over the past two decades. In many cases, partisan divides have emerged \u2013 or widened \u2013 when it comes to how much priority should be placed on key international goals.", "In the current survey, a sizable majority of Democrats and Democratic leaners (70%) say improving relationships with our allies should be a top priority, while significantly fewer Republicans and Republican leaners say this should be a top priority (44%). This is one of the largest gaps observed on this issue since the question was first asked in 2004. The share of Democrats who view improved relationships with allies as a top priority is much higher than it was in 2011, during Barack Obama's first term, when 48% said this.", "There is a wide partisan gap over the importance of getting other countries to assume more of the costs of maintaining world order: 56% of Republicans say this is a top priority, compared with just 26% of Democrats. When the question was last asked in 2004, comparable shares of Republicans (59%) and Democrats (58%) said this issue should be a top priority.", "Democrats are far more likely than Republicans to prioritize promoting democracy in other nations, promoting and defending human rights abroad, and helping improve living standards in developing nations.", "Though neither party rates the promotion of democracy in other nations as a particularly high priority, Democrats are twice as likely as Republicans to say this should be a top foreign policy goal (22% vs. 11%). Views are about the same as they were in a telephone survey conducted in 2013.", "A similar pattern emerges on promoting and defending human rights in other countries. About four-in-ten Democrats (39%) say promoting human rights abroad should be a top priority. Fewer Republicans (20%) prioritize this goal. This partisan gap is little different from 2013, but wider than at most other points measured over the past 25 years.", "Today, just 12% of Republicans say improving living standards in developing nations should be a top priority. More than twice as many Democrats (32%) say this should be a top priority.", "Republicans are more likely than Democrats to view the promotion of U.S. business and economic interests a top foreign policy priority. This also is the case in views of protecting U.S. jobs and reducing the trade deficit with other countries.", "Today, roughly half of Republicans (51%) say promoting U.S. business and economic interests abroad should be a top priority in foreign policy. Fewer Democrats (40%) say this should be prioritized. In 2004, 40% of Republicans and 32% of Democrats said promoting U.S. business interests should be a top priority.", "Among the public overall, protecting the jobs of American workers continues to rank among the top priorities for U.S. foreign policy, though the share who calls this a top priority is somewhat lower today (71%) than in 2013 (81%). More Republicans (81%) than Democrats (65%) say protecting American jobs should be a top U.S. foreign policy priority; this issue is among the top three priorities for members of both parties.", "When it comes to reducing the U.S. trade deficit with other countries, a double-digit gap currently divides Republicans and Democrats. Over half of Republicans (54%) say \"reducing our trade deficit with other countries\" should be a top priority, while just a third of Democrats (33%) say the same. When the question was last asked in 1997, about equal shares of partisans called this issue a top priority.", "Some of the largest differences between Republicans and Democrats are seen in views of how much priority should be given to reducing illegal immigration and dealing with global climate change.", "Nearly seven-in-ten Republicans (68%) say that reducing illegal immigration into the U.S. should be a top U.S. foreign policy goal; just 20% of Democrats say the same. A partisan gap on prioritizing reducing illegal immigration has existed since 2005, but the current gap is especially wide.", "Since 2013, the share of Democrats who say reducing illegal immigration should be a top priority has declined significantly, from 38% then to 20% today.", "Democrats continue to be more likely than Republicans to say dealing with global climate change should be a top priority. About two-thirds of Democrats (64%) say this, compared with just 22% of Republicans. A partisan gap has existed since this question was first asked in 2001, but it is as wide as it has ever been during this period.", "October 2018 Chicago Council on Global Affairs Report", "A 2018 Chicago Council on Global Affairs report on U.S. public opinion data regarding U.S. foreign policy that was released in October 2018 stated the following:", "In the wake of the 2016 US presidential election, political analysts warned of a dark era ahead. Newly elected President Donald Trump had long expressed opposition to US security alliances, skepticism of free trade, and support for authoritarian leaders such as Vladimir Putin. Since the American public generally relies on their political leaders for foreign policy decisions, many policy watchers cautioned that the country was headed for a populist, unilateralist, and protectionist retreat from global leadership.", "While the Trump administration has taken action along this path\u2014unilaterally withdrawing from the Paris and Iran agreements, pulling the United States out from the Trans-Pacific Partnership (TPP) trade agreement, and questioning the value of long-time alliances like NATO\u2014the majority of the American public has not followed this lead.", "To the contrary, most Americans have moved in the opposite direction. The largest majority since 1974\u2014except for just after the September 11 attacks\u2014now support active US engagement in world affairs. A solid majority supports multilateral diplomacy, underscored by public willingness to accept international decisions that are not the first choice for the United States. A record number of Americans now acknowledge the benefits of international trade. Even though the United States withdrew from both the Paris Agreement and the Iran nuclear deal, public support for these agreements has actually increased. And as the ultimate indicator of commitment to allies, increased majorities express support for sending US troops to defend both NATO and Asian allies if they are attacked.", "Americans Want the United States to Remain Engaged", "Despite attempts by the White House to pull the United States back from global engagement, seven in 10 Americans\u2026 favor the United States taking an active part in world affairs (70%). This reading is a 7 percentage point increase from the 2017 Chicago Council Survey and is the highest recorded level of support since 1974 except for 2002, the first Chicago Council Survey conducted after the September 11 attacks\u2026.", "A Majority Wants Shared Action on Global Issues", "The American public does not envision the United States working alone when playing an active role on the world stage. Rather, a striking majority (91%) say that it is more effective for the United States to work with allies and other countries to achieve its foreign policy goals. Just 8 percent say that it is more effective for the United States to tackle world problems on its own.", "Sharing leadership on global issues may mean that the United States does not always achieve its preferred policy outcomes. Yet a majority support the United States making decisions with its allies even if it means the United States will sometimes have to go along with a policy that is not its first choice (66% agree, 32% disagree). Similarly, two-thirds of Americans believe that the United States should be more willing to make decisions within the United Nations even if it means that the United States will sometimes have to go along with a policy that is not its first choice (64% agree, 34% disagree)\u2014the highest level of support on this question since it was first asked in 2004, when 66 percent agreed.", "Support Is Up for the Iran Deal and the Paris Agreement", "President Trump has broken away from several international agreements since taking office, including the Paris Agreement on climate change and the Iran nuclear deal. But the American public has not followed the president's cues. Majorities of the public say that the United States should participate in the Iran deal (66%) and the Paris Agreement (68%). In fact, support for US participation in both of these high-profile international agreements has risen 6 percentage points over the past year\u2026.", "It's More Important to be Admired than Feared", "The administration has attempted to change the nature of US influence around the world by using coercive rhetoric toward both allies and hostile actors. Perhaps reflective of this approach, more Americans think that the United States is now more feared (39%) than admired (20%) around the world today, though many volunteer an alternative response, ranging from \"a joke\" to \"weak\" to \"falling apart.\" But almost three times as many Americans think admiration (73%) of the United States is more important than fear (26%) of the United States to achieve US foreign policy goals.", "As interactions with US allies have strained over the course of the past year, majorities of Americans say that relations with other countries are worsening (56%) and that the United States is losing allies (57%). Just 12 percent of the public says that the United States is gaining allies and 31 percent state there has been no change.", "US Public Wants to Maintain or Increase Commitment to NATO", "While some administration officials have praised NATO, the president has repeatedly criticized European allies for not spending enough on defense. Yet his attacks do not seem to have dented public support for the transatlantic alliance. A majority of Americans continue to favor maintaining (57%) or increasing (18%) US commitment to NATO; in fact, a higher percentage of Americans now favor increasing the US commitment to NATO than ever before\u2026.", "Support for Using US Troops to Defend Key Allies Has Grown", "Americans continue to favor contributing to allies' security through bases and security commitments, and their willingness to do so has increased since last year. Majorities of Americans support maintaining long-term military bases in South Korea (74%) and Japan (65%); both responses are at record levels since the question was first asked in the 2002 Chicago Council Survey. As in past surveys, a majority continue to support maintaining US bases in Germany (60%). Further, two-thirds of Americans support sending US troops to defend South Korea (64%) and Japan (64%) if attacked by North Korea, and 54 percent support defending Baltic NATO allies with US troops if Russia invades. Each of these measures is at a peak since the Council began asking these questions.", "Americans Are High on Trade", "The White House is waging trade battles on multiple fronts, but the American public is more positive about the benefits of trade than ever before, surpassing even the previous record ratings of 2017\u2026. Large majorities of Americans now say that trade is good for consumers like you (85%), the US economy (82%), and creating jobs in the United States (67%)\u2026.", "While the president has criticized the North American Free Trade Agreement (NAFTA) and withdrawn from the TPP trade agreement, 63 percent of Americans now say NAFTA is good for the US economy, up from 53 percent in 2017, and another record level in Chicago Council surveys. A majority of Americans (61%) also believe the United States should participate in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or the CPTPP, a trade agreement formed by the 11 signatories to the original TPP after US withdrawal.", "Americans face the possibility of serious trade disruptions, as the United States and China are currently exchanging several rounds of tariffs. While only four in 10 Americans consider a possible trade war with China a critical threat (42%), a combined seven in 10 Americans are very (31%) or somewhat (41%) concerned that a trade war with China will hurt their local economy.5 Trade disputes with Mexico, America's third-largest trading partner, are somewhat less concerning to the US public: just over half of the public are very (19%) or somewhat (33%) concerned about the impact of a trade war with Mexico on their local economy.", "Conclusion", "The Trump administration's bold attempts to reshape US foreign policy have not convinced many Americans to join the bandwagon. The past two years have given the American public a glimpse of President Trump's alternative vision for the role of the United States in the world. And while Trump's base continues to share his vision, the majority of Americans do not.", "Instead, most Americans are more convinced about the benefits of active US engagement and the need to work with allies. They see US soft power as more effective than muscular intimidation in accomplishing US foreign policy goals and believe the United States is losing allies and world respect. On those specific issues where the White House has taken action\u2014withdrawing from the Iran nuclear deal, the Paris Agreement, and the TPP agreement\u2014Americans are less likely to see them as \"wins\" and more likely to endorse participating in these agreements. On traditional approaches to US foreign policy, including maintaining military bases abroad, defending key allies if attacked, and supporting trade, Americans have doubled down. The bottom line is that two years into the Trump administration, solid majorities of the American public have rejected the \"America First\" platform.", "June 2018 Chicago Council on Global Affairs Report", "A 2018 Chicago Council on Global Affairs report on U.S. public opinion data regarding generational differences in U.S. public opinion regarding U.S. foreign policy stated that was released in June 2018 stated the following:", "Since World War II the United States has maintained an active foreign policy agenda, deeply engaged in both the economic and military domains. Many observers over the past few years, however, have begun to voice doubts about public support for the critical pillars of American internationalism. Some have argued that the American public has lost its appetite for military intervention after more than 15 years at war in the greater Middle East. Others have suggested that Donald Trump's election revealed weakening support for free trade and for the global alliance system the United States built after World War II.", "Many observers have worried, in particular, about whether younger Americans will be willing to take up the mantle of global leadership. This question matters a good deal in light of the fact that the Millennial Generation, those born between 1981 and 1996, is now the largest generation of Americans. Like the Baby Boomers before them, Millennials have already had an outsized impact on American culture. As they age and begin to take leadership positions in business, government, and across society, their views \u2013 not those of their parents and grandparents \u2013 will be decisive.", "Those worried about Millennials' willingness to embrace the traditional liberal internationalism of the post-World War II era may find some evidence for their concerns in survey data. As the 2012 Chicago Council Survey report noted, \"Millennials\u2026are much less alarmed about major threats facing the country, particularly international terrorism, Islamic fundamentalism, and the development of China as a world power, and are less supportive of an activist approach to foreign affairs than older Americans.\"", "In order to understand where foreign policy attitudes are headed, we employ a generational perspective to analyze a wide range of survey data collected by the Chicago Council on Global Affairs since 1974. The findings reveal that generations share many opinions about international threats, foreign policy goals, and the best approaches to engaging the world. Yet, each generation from the Silent Generation onward entered adulthood somewhat less supportive of expansive American internationalism, with more recent generations expressing lower support for militarized approaches to achieve foreign policy goals.", "Today, each successor generation is less likely than the previous to prioritize maintaining superior military power worldwide as a goal of US foreign policy, to see US military superiority as a very effective way of achieving US foreign policy goals, and to support expanding defense spending. At the same time, support for international cooperation and free trade remains high across the generations. In fact, younger Americans are more inclined to support cooperative approaches to US foreign policy and more likely to feel favorably towards trade and globalization.", "Key Findings", "Each generation since the Silent Generation reports less support than its predecessors for taking an active part in world affairs, as measured by responses to the standard Chicago Council Survey question: \"Do you think it will be best for the future of the country if we take an active part in world affairs or if we stay out of world affairs?\"", "Sometimes, this difference split Millennials from older Americans; at other times, Millennials and Gen Xers both differ from prior generations.", "Long-term shifts in ideology and party identification mean that younger Americans today are more liberal than their elders, less likely to identify as Republican, but also more likely not to identify with either party.", "Because ideology and partisanship exert such powerful influences on public opinion, these trends play a significant role in explaining the size and direction of generation gaps on foreign policy issues.", "Yet even when the pull of partisanship and party loyalty is greatest, the differences across generations remain visible and large enough to be politically significant.", "It is difficult to predict how much these generation gaps will influence the direction of US foreign policy. As younger Americans continue to replace older Americans, especially at the voting booth, shifting demographics and attitudes are likely to influence debates about how the United States should engage the world. As younger Americans move through the stages of life it will be interesting to see if these generational differences result in a permanent break from previous patterns of foreign policy attitudes.", "2017 Chicago Council on Global Affairs Report", "A 2017 Chicago Council on Global Affairs report on U.S. public opinion data regarding the Trump Administration's theme of America First stated", "President Trump's inaugural address, like his campaign, signaled a major departure from the past seven decades of American foreign policy and engagement with the rest of the world. While never fully parsed, the slogans \"Make America Great Again,\" \"America First,\" and \"Americanism, not Globalism,\" along with the president's speeches and tweets, prescribed greater protectionism in trade, a new financial reckoning with our security allies, and a withdrawal from major international agreements.", "The 2017 Chicago Council Survey, conducted roughly six months into the Trump administration, tested the appeal of these ideas among the American public. The results suggest their attraction remains limited. For now, public criticism of trade deals, support for withholding US security guarantees from allies, and calls for restricting immigration mainly appeal to a core group of Trump supporters (defined in this report as those Americans with a very favorable view of President Trump). Yet, aside from the president's core supporters, most Americans prefer the type of foreign policy that has been typical of US administrations, be they Republican or Democrat, since World War II.", "Majorities continue to endorse sustaining American engagement abroad... as well as maintaining alliances, supporting trade, and participating in international agreements. Indeed, in key instances, Americans have doubled down on these beliefs. Public support has risen to new highs when it comes to willingness to defend allies, the perceived benefits of trade, and a desire to grant undocumented workers a path to citizenship.", "Americans Value Allies and Are More Willing Than Ever to Defend Them", "During the 2016 campaign and into his presidency, Donald Trump has repeatedly criticized allies of freeriding on America's security guarantee and argued that US alliances were not serving American interests. But the US public disagrees. Americans have repeatedly rated alliances as one of the most effective ways for the United States to achieve its foreign policy goals since the question was first asked in 2014. Today, the US public is more convinced than ever of their importance. Americans rate maintaining existing alliances as the most effective foreign policy tool, with 49 percent responding \"very effective\".... followed by maintaining US military superiority (47%) and building new alliances with other countries (36%)....", "Americans also express confidence in Asian and European allies to deal responsibly with world problems, and solid majorities favor maintaining or increasing the US military presence in the Asia-Pacific (78%), Europe (73%), and the Middle East (70%). A slightly larger majority now (69%) compared with a year ago (65%) say NATO is essential to US security. And for the first time, majorities of Americans are willing to use US troops to defend South Korea if it is invaded by North Korea (62%) or if NATO allies like Latvia, Lithuania, or Estonia are invaded by Russia (52%).", "The most specific wish that President Trump has for NATO is for allied countries to contribute more to collective defense; he and other administration officials have advocated for withholding US commitment to defend allies until they have paid more. But a majority of Americans think that NATO allies should be convinced to do their part through persuasion and diplomatic channels (59%) rather than threatening to withhold the US security guarantee to NATO allies to get them to pay more for defense (38%).", "Given these views, it is clear that Americans appreciate the advantages that alliances bring. Majorities say that alliances with Europe and East Asia (60% each) are either mutually beneficial or mostly benefit the United States, and 48 percent say the same about alliances in the Middle East.", "Core Trump supporters are the most skeptical of the benefits regarding alliances for the United States. Perhaps taking their lead from the president, a majority favor withholding US security guarantee from NATO allies until they pay more (60%); 51 percent of overall Republicans agree. But even core Trump supporters do not seem to believe the alliance is \"obsolete,\" given that a majority (54%) think NATO is still essential to US security.", "A Record Percentage of Americans Recognize Benefits of Trade", "Americans are feeling more optimistic about the positive impact of trade. Compared with a year ago, record numbers of Americans now say that international trade is good for US consumers (78%), for the US economy (72%), and for job creation (57%)..... Additionally, the perceived benefits of trade are up across all party affiliations....", "A majority of Americans believe that trade deals between the United States and other countries benefit both countries (50%) or mostly benefit the United States (7%). But a substantial percentage of Americans\u2014including a majority of core Trump supporters and a plurality of Republicans overall\u2014think other countries mostly benefit (34%) or neither country benefits (6%).", "President Trump has blamed poor trade deals for the loss of American jobs, and on this point, Americans agree. A majority say that manufacturing job losses are due to outsourcing (56%) rather than increased automation (42%). Yet, more Americans say that the current administration's policies will harm (41%) rather than help (32%) US workers, and 24 percent say they will make no difference.", "There are clear partisan divides on expectations for the new administration. Solid majorities of core Trump supporters (82%) and Republicans (64%) expect this administration's policies will do more to protect US workers, which may help explain why they are more optimistic about the overall benefits of international trade to the US economy, consumers, and job creation. For their part, Democrats may feel the need to underscore their support for international trade as a reaction against the trade-bashing rhetoric from both Republican and Democratic candidates in 2016.", "Concern over Immigration at Lowest Point Yet", "Immigration was a central issue during the 2016 presidential campaign, and it remains a key pillar in Donald Trump's America First platform. But the American public is less alarmed than last year by the potential threat of large numbers of immigrants and refugees entering the United States. Just 37 percent of Americans characterize immigration as a critical threat, down from 43 percent in 2016, marking a new low in concern for this issue.... There are, however, still large differences between Democrats (20%) and Republicans (61%), with core Trump supporters the most likely of all to consider immigration a critical threat (80%)....", "As the overall perceived threat from immigration has gone down, support for providing an opportunity for illegal workers in the United States to become citizens has gone up. Among all Americans, two-thirds (65%) support providing illegal immigrants a path to citizenship either immediately or with a waiting period and a financial penalty\u2014an increase of 7 percentage points since last year. Conversely, fewer Americans now say that illegal immigrants should be required to leave their jobs and the United States (22%, down from 28% in 2016).", "A clear majority of Democrats (77%, up from 71% in 2016) favor a pathway to citizenship either immediately or with conditions. A smaller majority of Republicans now also favor the same solution as Democrats (52%, up from 44%), although 36 percent of Republicans favor deportation (down from 42% in 2016). Even core Trump supporters are divided in their views, with equal numbers supporting deportation (45%) and a path to citizenship (45%) for illegal immigrants.", "Majority Continue to Support Paris Agreement", "Conducted just weeks after President Trump kept his campaign promise to withdraw from the Paris Agreement on climate change, the 2017 Chicago Council Survey reveals that 6 in 10 Americans (62%) continue to favor US participation in the agreement. However, overall public support of the Paris Agreement has declined since 2016 (when 71% favored participation) largely because of a 20-point drop in Republican support (37%, down from 57% in 2016), perhaps following the president's lead on this issue. Just 24 percent of core Trump supporters want the United States to participate in the agreement. In contrast, majorities of Democrats (83%) and Independents (60%) continue to support the Paris Accord, though also at slightly lower levels than in 2016 (when it was backed by 87% of Democrats and 68% of Independents).", "Overall, 46 percent of Americans say that climate change is now a critical threat facing the United States; while still not a majority, this view reflects the highest point of concern recorded by the Chicago Council Survey. Yet, Republicans and Democrats markedly disagree on the gravity of this issue. Seven in 10 Democrats think that climate change is a critical threat, compared with just 16 percent of Republicans and 12 percent of core Trump supporters....", "Fractures within the Republican Party Base", "Headlines over the past year have proclaimed an internal battle within the Republican Party between President Trump's supporters and those who oppose his policies. The 2017 Chicago Council Survey data illustrate these fissures between self-described Republicans who have a very favorable view of President Trump (\"Trump Republicans\") and those who do not (\"non-Trump Republicans\").", "Non-Trump Republicans align more with average US public opinion than they do with Trump Republicans. Non-Trump Republicans are closer to the overall public than to Trump Republicans in their views on NAFTA (53% overall public, 49% non-Trump Republicans, 20% Trump Republicans believe the agreement is good for the US economy). Non-Trump Republicans are also closer to the overall public when asked the best way to get US allies to pay more for their defense (61% Trump Republicans, 40% non-Trump Republicans, and 38% overall favor withholding the US security guarantee). And on immigration, the overall public (65%) and non-Trump Republicans (62%) are more aligned in supporting a path to citizenship for illegal immigrants than Trump Republicans (43%). Specific examples of other differences among Republicans are included in each chapter of this report....", "Conclusion", "Despite the politically charged environment over the past year, Americans express remarkably enduring support for an active US role in world affairs, for security alliances, and for trade relationships. They also favor offering illegal immigrants an opportunity to earn citizenship, either immediately or with conditions\u2014a fact often overlooked by political leaders. Even though a portion of Americans have some questions about how much the United States gets out of security alliances and trade agreements, the American public as a whole seems to recognize clear value in maintaining them.", "President Trump appears to have noticed, and he has begun to adjust some of his campaign positions since moving into the Oval Office. He has declared that NATO is no longer obsolete and has taken some steps to reassure allies that the United States will honor its defense commitments. Officials in Trump's administration, including the vice president and the secretaries of state and defense, hold more mainstream views on defense issues, and they have repeatedly traveled to allied nations to smooth ruffled feathers. President Trump has also moderated some of his anti-trade rhetoric, backing away from accusations of Chinese currency manipulation and seeking to renegotiate rather than abandon NAFTA. These moderated positions are closer to mainstream American views; they are also closer to the views of those Republicans who are not core supporters of Donald Trump.", "2016 Pew Research Center Survey", "A May 2016 article by the Pew Research Center regarding a survey of U.S. foreign policy attitudes conducted in April 2016 states", "The public views America's role in the world with considerable apprehension and concern. In fact, most Americans say it would be better if the U.S. just dealt with its own problems and let other countries deal with their own problems as best they can.", "With the United States facing an array of global threats, public support for increased defense spending has climbed to its highest level since a month after the 9/11 terrorist attacks, when 50% favored more defense spending.", "Currently, 35% say the U.S. should increase spending on national defense, 24% say it should be cut back and 40% say it should be kept about the same as today. The share favoring more defense spending has increased 12 percentage points (from 23%) since 2013....", "The new survey, conducted April 12 to 19 among 2,008 U.S. adults, finds the public remains wary of global involvement, although on some measures, support for U.S. internationalism has increased modestly from the historically low levels found in the 2013 study.", "Still, 57% of Americans want the U.S. to deal with its own problems, while letting other countries get along as best they can. Just 37% say the U.S. should help other countries deal with their problems. And more Americans say the U.S. does too much (41%), rather than too little (27%), to solve world problems, with 28% saying it is doing about the right amount.", "The public's wariness toward global engagement extends to U.S. participation in the global economy. Nearly half of Americans (49%) say U.S. involvement in the global economy is a bad thing because it lowers wages and costs jobs; fewer (44%) see this as a good thing because it provides the U.S. with new markets and opportunities for growth....", "While Americans remain skeptical of U.S. international involvement, many also view the United States as a less powerful and important world leader than it was a decade ago. Nearly half (46%) say the United States is a less powerful and important world leader than it was 10 years ago, while 21% say it is more powerful, and 31% say it is about as powerful as it was then.", "U.S. seen as leading economic, military power. The share saying the U.S. has become less powerful has declined since 2013, from 53% to 46%, but is among the highest numbers expressing this view in the past four decades. These attitudes also are divided along partisan lines: Republicans (67%) remain more likely than independents (48%) or Democrats (26%) to say that the U.S. has become less powerful and important.", "However, although many Americans believe the U.S. has become less powerful than it was in the past, the predominant view among the public is that the United States is the world's leading economic and military power.", "In a separate Pew Research Center survey conducted April 4 to 24 among 1,003 U.S. adults, a majority of Americans (54%) say the United States is the world's leading economic power, with China a distant second at 34%. This is the first time, in surveys dating back to 2008, that more than half of the public has named the United States as the leading economic power.", "2016 Chicago Council on Global Affairs Report", "A 2016 Chicago Council on Global Affairs report on U.S. public opinion data regarding U.S. foreign policy stated ", "Over the past year, Donald Trump has been able to channel the anxieties of a significant segment of the American public into a powerful political force, taking him to the doorstep of the White House. These public anxieties stem from growing concerns about the effects of globalization on the American economy and about the changing demographics of the United States.", "Although Trump has been able to mobilize many of those who are most concerned about these developments, their motivating concerns are not new. They existed before Donald Trump entered the race, and they are likely to persist even if he loses the election in November 2016. Yet, uniquely among the candidates running for president this cycle, Trump has given voice to this group of Americans, notably through his tough stances on immigration and trade.", "At the same time, while this segment of the American public has given Donald Trump traction in the presidential race, his views on important issues garner only minority support from the overall American public. While they are divided on expanding a wall on the US border with Mexico, Americans overall support continued immigration into the United States and favor reform to address the large population of unauthorized immigrants already in the country. Americans overall think globalization is mostly good for the United States, and they see many benefits to free trade. And the American public as a whole\u2014including the core supporters of Donald Trump\u2014still favors the country's traditional alliances, a shared leadership role for the United States abroad, and the preservation of US military superiority....", "While Trump's views on immigration and trade clearly resonate with his core supporters, some of his other criticisms of US foreign policy are less popular among his base. For example, core Trump supporters are somewhat more cautious than other Americans of alliances and an active US role in world affairs, but in most cases they continue to favor international engagement. This serves as a reminder that despite divides on issues such as immigration and trade, the American public finds a great deal of common ground on American leadership in the world and how to achieve American goals....", "2016 Charles Koch Institute and Center for the National Interest\u00a0Survey", "The Charles Koch Institute and the Center for the National Interest stated the following regarding the results of a December 2016 survey of U.S. public opinion regarding U.S. foreign policy:", "The Charles Koch Institute and the Center for the National Interest today released a poll of 1,000 Americans that shows voters believe focusing on diplomacy and trade are better methods of improving U.S. security than military intervention. ", "\"More than half of Americans think that U.S. foreign policy over the last 15 years has made us less safe,\" said William Ruger, vice president for research and policy at the Charles Koch Institute. \"Americans want the next administration to take a different approach, with many favoring more caution about committing military forces abroad while preferring greater burden sharing by our wealthy allies and diplomacy over regime change. This poll is the second since October where the Charles Koch Institute and the Center for the National Interest have identified Americans' disenchantment with the status quo. The public's call for peace and change reflect the same views they held before the election. It's time that Washington listens to a public expressing greater prudence.\"", "\"Americans see trade and diplomacy as contributing more to U.S. national security than regime change in foreign lands,\" said Paul J. Saunders, executive director of the Center for the National Interest. \"Voters also support a strong military and more balanced alliances\u2014though many have reservations about unconditional commitments, particularly to some new U.S. allies. The incoming administration and Congress have an important opportunity to define a new model of American leadership that moves beyond the mistakes of the last two decades.\" ", "Poll results show:", "Americans Still Believe Recent U.S. Foreign Policy Has Made Them Less Safe:", "\u2022 When asked if U.S. foreign policy over the last 15 years had made Americans more or less safe, a majority (52%) said less safe. Just 12% said more, while one quarter said U.S. foreign policy had no impact on their level of safety. ", "\u2022 When asked if U.S. foreign policy over the last 15 years had made the world more or less safe, 51% said less safe, 11% said more, and 24% said safety levels had stayed the same.", "\u2022 These findings are largely the same as results from a joint CKI-CFTNI October [2016] poll.", "Americans Favor Peaceful Engagement Over Military Intervention:", "\u2022 More than two-thirds of respondents (70%) agreed with the statement, \"The U.S. should work with existing governments and heads of state to try to promote peace\" rather than seeking to oust government by force.", "\u2022 When asked which of two options would make the United States safer, 49% said prioritizing diplomacy over military intervention while just 26% said prioritizing military power over diplomacy. Another 25% were not sure. ", "\u2022 When asked whether the U.S. government should increase U.S. military spending, decrease it, or keep spending the same, a plurality (40%) wanted to increase spending, while nearly half either wanted to keep it the same (32%) or cut it (17%). Another 12% were not sure.", "\u2022 When asked which of two options would make the United States safer, only 20% said making more attempts at regime change would improve safety, while 45% said cutting the number of U.S. attempts at regime change would improve safety. 35% were not sure. ", "\u2022 More than half (54%) said working more through the United Nations would improve U.S. safety, while only 26% thought working less through the United Nations would be better. 24% were not sure. ", "\u2022 When asked broadly about what would make the United States safer, respondents preferred expanding U.S. alliance commitments (50%) to reducing U.S. alliance commitments (27%). However, Americans did not see U.S. commitments as necessarily unconditional. Only 26% of the respondents either somewhat or strongly agreed with the statement, \"In a military conflict between Russia and Latvia, Lithuania, or Estonia, the United States should automatically defend that country with American military forces.\" Thirty-two percent either somewhat or strongly disagreed.", "\u2022 Increased trade should be part of the United States' diplomatic efforts. More than half of respondents (55%) said increasing trade would improve U.S. safety. Only 22% said decreasing trade would make the country safer. Another 23% were not sure. ", "\u2022 Notwithstanding significant reservations about Russia, over half of voters see that country as a potential partner. When asked whether the United States should view Russia an adversary or as a potential partner, more than half either said Russia should be viewed as both (38%) or should be viewed as a potential partner (17%). Only 33% said Russia definitely should be viewed solely as an adversary. Another 12% said they were unsure. ", "\u2022 American voters are unsure about the U.S. relationship with China. When asked whether they viewed China as an ally, 93% of respondents said no. However, 89% also indicated they would not characterize China as an enemy. The most accepted term for China was \"competitor\"\u201442% of respondents said they agreed with that characterization. ", "Americans Want Washington to Exercise Restraint Abroad:", "\u2022 When asked whether Congress should impeach a president who does not get congressional approval before committing the United States to military action abroad, a plurality (39%) said yes, while just 27% said no. Another 34% were not sure.", "\u2022 When asked which of two options would make the United States safer, 45% of respondents said reducing U.S. military presence abroad, 31% said increasing it, and 24% said they did not know.", "\u2022 When asked which of two options would make the United States safer, 40% of respondents said decreasing the use of U.S. military force for democracy promotion internationally, 31% said increasing it, and 29% were not sure.", "\u2022 When asked about troop levels in Europe, three quarters said the United States should either keep levels the same as they are today (46%) or bring home at least some of the troops (28%). Only 12% said troop levels in Europe should be expanded. A plurality (44%) said the media had not provided enough information about recent U.S. troop deployments in Europe. ", "\u2022 When a sked whether the United States should deploy ground troops to Syria, 55% of Americans said no, 23% said yes, and 23% were not sure. Those opposing ground troops in Syria increased by 4 percentage points since the October survey. ", "\u2022 When asked whether the United States should increase its military presence in the Middle East, only 22% of respondents said yes, while 35% said they would reduce U.S. presence in the Middle East. Another 29% said they wouldn't change troop levels. ", "Voters Want President-Elect Donald Trump to Exercise Restraint and Audit the Military:", "\u2022 When asked whether President-elect Trump should audit the Pentagon, 57% said yes, 28% weren't sure, and 15% said no. ", "\u2022 Americans think our allies should shoulder more of the burden. When asked whether President-elect Trump should encourage NATO countries to increase or decrease their defense spending, only 8% said decrease while 41% said increase, and another 33% said President-elect Trump should encourage NATO countries to keep spending levels stable. ", "\u2022 When asked whether the Trump administration should strengthen the U.S. military's relationship with Saudi Arabia, only 20% said it should while 23% suggested the United States should loosen its ties with Saudi Arabia. One third (33%) said the relationship should be kept as is, while another 24% were not sure. ", "\u2022 When asked whether President-elect Trump should respect, renegotiate, or walk away from the Iran deal that lifted international sanctions on Iran in exchange for more scrutiny of their nuclear facilities, 32% said renegotiate, 28% said respect, 17% said walk away, and 23% were not sure.", "Comments from Observers", "In September 2018, one observer stated the following:", "President Trump may not enjoy majority support these days, but there's good reason to believe that his \"America First\" approach to the world does. There has been no popular outcry against Mr. Trump's trade battles with Canada, Mexico and the European allies. Experts suggest we are in for a long international trade war, no matter who the next president may be. After all, even Hillary Clinton had to disown her support for the Trans-Pacific Partnership in the last election. The old free-trade consensus is gone.", "Mr. Trump's immigration policies may be more popular with Republicans than with Democrats, but few Democratic politicians are running on a promise to bring more immigrants into the country. And just as in the 1920s, isolationism joins anti-immigration sentiment and protectionism as a pillar of America Firstism. ", "The old consensus about America's role as upholder of global security has collapsed in both parties. Russia may have committed territorial aggression against Ukraine. But Republican voters follow Mr. Trump in seeking better ties, accepting Moscow's forcible annexation of Crimea and expanding influence in the Middle East (even if some of the president's subordinates do not). They applaud Mr. Trump for seeking a dubious deal with North Korea just as they once condemned Democratic presidents for doing the same thing. They favor a trade war with China but have not consistently favored military spending increases to deter a real war.", "Democrats might seem to be rallying behind the liberal order, but much of this is just opposition to Mr. Trump's denigration of it. Are today's rank-and-file Democrats really more committed to defending allies and deterring challengers to the liberal world order? Most Democratic politicians railing against Mr. Trump's \"appeasement\" of Moscow hailed Obama's \"reset\" a few years ago and chastised Republicans for seeking a new Cold War. Most Democratic voters want lower military spending and a much smaller United States military presence overseas, which hardly comports with getting tougher on Russia, Korea or China \u2014 except on trade.", "Most Americans in both parties also agree with Mr. Trump that America's old allies need to look out for themselves and stop relying on the United States to protect them. Few really disagreed with the president's stated reluctance to commit American lives to the defense of Montenegro. Britons in the 1930s did not want to \"die for Danzig,\" and Americans today don't want to die for Taipei or Riga, never mind Kiev or Tbilisi. President Obama was less hostile to the allies than Mr. Trump, but even he complained about \"free riders.\"", "In retrospect it's pretty clear that Mr. Obama was too internationalist for his party base. He expanded NATO, intervened in Libya, imposed sanctions on Russia and presided over the negotiation of the Trans-Pacific Partnership. Democrats may miss Mr. Obama for many reasons, but there's little evidence that the rank-and-file miss those policies. Mr. Trump's narrower, more unilateralist and nationalist approach to the world is probably closer to where the general public is than Mr. Obama's more cosmopolitan sensibility.", "It would be comforting to blame America's current posture on Mr. Trump. But while he may be a special kind of president, even he can't create a public mood out of nothing. Now as always, presidents reflect public opinion at least as much as they shape it. Between the two world wars, and especially from 1921 through 1936, an American public disillusioned by World War I was averse to further overseas involvement, and it didn't matter whether the presidents were supposed \"isolationists\" like Warren Harding and Calvin Coolidge or supposed \"internationalists\" like Herbert Hoover and Franklin Roosevelt. It took a lot more than fireside chats to turn public opinion around. It took Hitler's conquest of Europe, near-conquest of Britain and, finally, Pearl Harbor to onvince a majority of Americans that America First was a mistake.", "In our own time, the trend toward an America First approach has been growing since the end of the Cold War. George H.W. Bush, the hero of the Gulf War, had to play down foreign policy in 1992 and lost to a candidate promising to focus on domestic issues. George W. Bush won in 2000 promising to reduce United States global involvement, defeating an opponent, Al Gore, who was still talking about America's indispensability. In 2008, Mr. Obama won while promising to get out of foreign conflicts for good. In 2016, Republican internationalists like Jeb Bush and Marco Rubio were trounced in the primaries. Hillary Clinton struggled to hold off Bernie Sanders, a progressive isolationist, and it was certainly not because of her foreign policy views.", "Now we have Mr. Trump. Is he an aberration or a culmination? Many foreign policy experts, and most of the foreign leaders pouring into New York this week for the United Nation's General Assembly, have been counting on the former. They place their hopes on the 2020 elections to get America back on its old path. But they may have to start facing the fact that what we're seeing today is not a spasm but a new direction in American foreign policy, or rather a return to older traditions \u2014 the kind that kept us on the sidelines while fascism and militarism almost conquered the world.", "In a May 2017 blog post, one foreign policy specialist stated the following:", "Over a period of decades, the American people and their elected representatives funded defense expenditures far greater than what would have been necessary simply to protect the continental United States. They faced up to the idea that American troops might fight and die to defend faraway frontiers. And they accepted\u2014often reluctantly\u2014the notion that Washington should take primary responsibility for leading the global economy, U.S. alliances, and international institutions, despite the myriad costs and frustrations involved.", "Americans accepted these costs not out of any special altruism, of course, but because they believed the benefits of living in\u2014and leading\u2014a stable, prosperous, and liberal world order were ultimately greater. But if the postwar era was thus characterized, as G. John Ikenberry and Daniel Deudney write, by a \"bipartisan consensus\u2026on the paramount importance of American leadership,\" then the 2016 presidential election and its results surely called into question whether that consensus still exists....", "So, was the 2016 election merely an aberration within the long history of American internationalism? Or does Trump's victory indicate deeper and perhaps more irrevocable changes in American attitudes on foreign affairs? As it turns out, there are two plausible interpretations of this issue, and they point in very different directions....", "If political support for American internationalism was plummeting, one would expect to see unambiguous downturns in public opinion toward U.S. alliances, international trade, and other key initiatives. Yet while there certainly are signs of public alienation from American internationalism \u2013 as discussed subsequently \u2013 most recent polling data tells a different story.", "According to public opinion surveys taken in the heat of the 2016 campaign, for instance, 65 percent of Americans saw globalization as \"mostly good\" for the United States, and 64 percent saw international trade as \"good for their own standard of living.\" Even the Trans-Pacific Partnership \u2013 which Clinton disowned under pressure from Sanders, and which Trump used as a political punching bag \u2013 enjoyed 60 percent support. Reaching back slightly further to 2013, an overwhelming majority \u2013 77 percent \u2013 of Americans believed that trade and business ties to other countries were either \"somewhat good\" or \"very good\" for the United States. In other words, if Americans are in wholesale revolt against globalization, most public opinion polls are not capturing that discontent.", "Nor are they registering a broad popular backlash against other aspects of American internationalism. Although Trump delighted in disparaging U.S. alliances during the campaign, some 77 percent of Americans still saw being a member of NATO as a good thing. A remarkable 89 percent believed that maintaining U.S. alliances was \"very or somewhat effective at achieving U.S. foreign policy goals.\"", "Similarly, recent opinion polls have revealed little evidence that the American public is demanding significant military retrenchment. In 2016, three-quarters of respondents believed that defense spending should rise or stay the same. The proposition favoring more defense spending had actually increased significantly (from 23 percent to 35 percent) since 2013. Support for maintaining overseas bases and forward deployments of U.S. troops was also strong. And regarding military intervention, recent polls have indeed shown a widespread belief that the U.S. wars in Iraq and Afghanistan were not worth the cost, but these sentiments do not seem to have translated into a broader skepticism regarding the utility of military force. In 2016, for instance, 62 percent of Americans approved of the military campaign against the Islamic State, demonstrating broad agreement that the United States should be willing to use the sword \u2013 even in faraway places \u2013 when threats emerge.", "Polling on other issues reveals still more of the same. For all of Trump's critiques of international institutions, international law, and multilateralism, nearly two-third of Americans (64 percent) viewed the United Nations favorably in 2016 and 71 percent supported U.S. participation in the Paris Agreement on combating climate change. And, although polls indicating that over 50 percent of Americans now prefer to let other countries \"get along as best they can\" on their own are far more troubling, here too the overall picture painted by recent survey data is somewhat brighter. As of 2016, more than half \u2013 55 percent \u2013 of Americans believed that the United States either did too little or the right amount in confronting global problems. When asked if the United States should continue playing an active role in world affairs, nearly two-thirds answered affirmatively.", "As one comprehensive analysis of the survey data thus concluded, at present there is just not overwhelming evidence\u2014in the polls, at least\u2014to suggest a broad-gauged public rejection of internationalism: \"The American public as a whole still thinks that the United States is the greatest and most influential country in the world, and bipartisan support remains strong for the country to take an active part in world affairs.\"...", "... there is also a far more pessimistic \u2013 and equally plausible \u2013 way of reading the national mood. From this perspective, Trump's rise is not an aberration or a glitch. It is, rather, the culmination of a quiet crisis that has gradually but unmistakably been weakening the political foundations of American internationalism. That crisis may not yet be manifesting in dramatic, across-the-board changes in how Americans view particular foreign policy issues. But as Trump's election indicates, its political effects are nonetheless becoming profound....", "After all, it was not Trump but Obama who first called for the country to shift from nation-building abroad to nation-building at home. Whatever their views on other parts of American internationalism, many Americans apparently agreed. Whereas 29 percent of Americans believed that promoting democracy abroad should be a key diplomatic priority in 2001, by 2013 the number was only 18 percent. When Trump slammed these aspects of American internationalism, he was pushing on an open door....", "What Trump intuitively understood, however, was that the credibility of the experts had been badly tarnished in recent years.", "As Tom Nichols has observed, the deference that experts command from the U.S. public has been declining for some time, and this is certainly the case in foreign policy....", "These issues related to another, more fundamental contributor to the crisis of American internationalism: the rupturing of the basic political-economic bargain that had long undergirded that tradition. From its inception, internationalism entailed significant and tangible costs, both financial and otherwise, and the pursuit of free trade in particular inevitably disadvantaged workers and industries that suffered from greater global competition. As a result, the rise of American internationalism during and after World War II went hand-in-hand with measures designed to offset these costs by ensuring upward social mobility and rising economic fortunes for the voters\u2014particularly working- and middle-class voters\u2014being asked to bear them.... This bargain has gradually been fraying since as far back as the late 1970s, however, and in recent years it increasingly seems to have broken.", "For the fact is that many Americans\u2014particularly less-educated Americans\u2014are not seeing their economic fortunes and mobility improve over time. Rather, their prospects have worsened significantly in recent decades....", "Indeed, although there is plenty of public opinion polling that paints a reassuring picture of American views on trade and globalization, there are also clear indications that such a backlash is occurring. In 2016, a plurality of Americans (49 percent) argued that \"U.S. involvement in the global economy is a bad thing because it lowers wages and costs jobs,\" a sentiment perfectly tailored to Trump's protectionist message....", "More broadly, it is hard not to see concerns about economic insecurity looming large in the growing proportion of Americans who believe that the United States is overinvested internationally\u2014and who therefore prefer for the \"U.S. to deal with its own problems, while letting other countries get along as best they can.\" In 2013, 52 percent of Americans\u2014the highest number in decades\u2014agreed with a version of this statement. In 2016, the number was even higher at 57 percent.", "In sum, American voters may still express fairly strong support for free trade and other longstanding policies in public opinion surveys. But it is simply impossible to ignore the fact that, among significant swaths of the population, there is nonetheless an unmistakable and politically potent sense that American foreign policy has become decoupled from the interests of those it is meant to serve.", "And this point, in turn, illuminates a final strain that Trump's rise so clearly highlighted: the growing sense that American internationalism has become unmoored from American nationalism. American internationalism was always conceived as an enlightened expression of American nationalism, an approach premised on the idea that the wellbeing of the United States was inextricably interwoven with that of the outside world. But the inequities of globalization have promoted a tangible feeling among many voters that American elites are now privileging an internationalist agenda (one that may suit cosmopolitan elites just fine) at the expense of the wellbeing of \"ordinary Americans.\" Likewise, insofar as immigration from Mexico and Central America has depressed wages for low-skilled workers and fueled concerns that the white working class is being displaced by other demographic groups, it has fostered beliefs that the openness at the heart of the internationalist project is benefitting the wrong people. \"Many Jacksonians,\" writes Walter Russell Mead of the coalition that brought Trump to power, \"came to believe that the American establishment was no longer reliably patriotic.\"", "What does all this tell us about the future of American internationalism? The answer involves elements of both interpretations offered here. It is premature to say that a \"new isolationism\" is taking hold, or that Americans are systematically turning away from internationalism, in light of the idiosyncrasies of Trump's victory and the fact that so many key aspects of internationalism still poll fairly well. Yet no serious observer can contend that American internationalism is truly healthy given Trump's triumph, and the 2016 election clearly revealed the assorted maladies that had been quietly eroding its political vitality. American internationalism may not be slipping into history just yet, but its long-term trajectory seems problematic indeed.", "Later in May 2017, this same foreign policy specialist stated in a different blog post that", "On the one hand, it is easy to make the case that Trump's election was more of a black-swan, anomalous event than something that tells us much about the state of public opinion on foreign policy. The election campaign was dominated not by deeply substantive foreign policy debates, in this interpretation, but by the historic unpopularity of both candidates. And of course, Trump was decisively defeated in the popular vote by a card-carrying member of the U.S. foreign policy establishment\u2014and he might well have lost decisively in the electoral college, too, if not for then-FBI Director James Comey's intervention and a series of other lucky breaks late in the campaign.", "There is, moreover, substantial polling data to suggest that American internationalism is doing just fine. According to surveys taken during the 2016 campaign, 65 percent of Americans believed that globalization was \"mostly good\" for the United States, and 89 percent believed that maintaining U.S. alliances was \"very or somewhat effective at achieving U.S. foreign policy goals.\" Support for U.S. military primacy and intervention against threats such as the Islamic State also remained strong, as did domestic backing for the United Nations and the Paris climate change accords.", "As an extensive analysis of this polling data by the Chicago Council concluded, there does not seem to be any wholesale public rejection of American internationalism underway: \"The American public as a whole still thinks that the United States is the greatest and most influential country in the world, and bipartisan support remains strong for the country to take an active part in world affairs.\" And indeed, insofar as Trump has had to roll back some of the more radical aspects of his \"America first\" agenda since becoming president\u2014tearing up the North American Free Trade Agreement, declaring NATO obsolete, launching a trade war with China\u2014he seems to be adjusting to this reality.", "That's the good news. But on the other hand, American internationalism simply cannot be all that healthy, because Trump did win the presidency by running on the most anti-internationalist platform seen in decades. American voters may not have been voting for that platform itself, but at the very least they did not see Trump's radical views on foreign policy as disqualifying. And as one digs deeper into the state of American internationalism today, it becomes clear that there are indeed real problems with that tradition\u2014problems that Trump exploited on his road to the White House, and that are likely to confront his successors as well.", "Trump's rise has highlighted five key strains that have been weakening the political foundations of American internationalism for years now.", "First, since the end of the Cold War, it has become harder for Americans to identify precisely why the United States must undertake such extraordinary exertions to shape the global order. Without a pressing, easily identifiable global threat, in other words, it is harder to intuitively understand what American alliances, forward force deployments, and other internationalist initiatives are for.", "Second, although U.S. internationalism has proven very valuable in shaping a congenial international system, it is undeniable that aspects of that tradition\u2014such as nation building missions in Afghanistan and Iraq\u2014have proven costly and unrewarding in recent years. Not surprisingly, many Americans are thus questioning if the resources that the country devotes to foreign policy are being used effectively. This disillusion has shown up in public opinion polling: Whereas 29 percent of Americans believed that promoting democracy should be a key foreign policy objective in 2001, only 18 percent thought so in 2013.", "Third, the credibility of the U.S. foreign policy establishment has also been weakened over the past 15 years. This is because policy elites in both parties pursued policies\u2014the Iraq War under President George W. Bush, the subsequent withdrawal from Iraq and creation of a security vacuum in that country under President Barack Obama\u2014that led to high-profile disasters. As a result, when Trump\u2014who actually supported the invasion of Iraq before later opposing it\u2014answered establishment criticism by pointing out that the establishment had brought the United States the Iraq War and the Islamic State, his rejoinder probably made a good deal of sense to many voters.", "Fourth, U.S. internationalism has been weakened by the declining economic fortunes of the working and middle classes\u2014a phenomenon that has made those groups less enthusiastic about bearing the costs and burdens associated with U.S. foreign policy. The pursuit of globalization and free trade has not been the primary culprit here\u2014issues like automation and the transition to a postindustrial economy have been more important. But it is undeniable that globalization has exacerbated economic insecurity for the working class in particular, and China's integration into the global economy has taken a significant toll on manufacturing and related employment in the United States. During the Republican primaries, in fact, 65 percent of Trump voters believed that U.S. involvement in the international economy was a bad thing. During the general election, Trump overperformed in areas hardest hit by competition from international trade.", "Fifth, and finally, one can discern among many voters an amorphous but powerful sense that U.S. internationalism has become unmoored from U.S. nationalism\u2014that America's governing classes have pursued an agenda that has worked nicely for the well-to-do, but brought fewer benefits to the ordinary Americans whom U.S. foreign policy is meant to serve. This dynamic is evident in the 57 percent of the population who believed in 2016 that the United States was focusing too much on other countries' problems and not enough on its own. Cracks are growing in the political consensus that has traditionally undergirded American internationalism\u2014cracks through which Trump was able emerge in 2016.", "The bottom line is that American internationalism is not dead yet, but that it faces serious longterm maladies that could, perhaps, ultimately prove fatal.", "Also in May 2017, a different foreign policy specialist stated the following:", "When the Soviet Union collapsed in 1991, the bipartisan foreign-policy establishment was united in seeing a historic opportunity to deepen the liberal order and extend it into the rest of the world. Yet the public had always been skeptical about this project. Jacksonians in particular believed that American global policy was a response to the Soviet threat, and that once the threat had disappeared, the U.S. should retrench.", "After World War I, and again at the start of the Cold War, Americans had held great debates over whether and how to engage with the world. But that debate didn't happen after the Soviet collapse. Elites felt confident that the end of history had arrived, that expanding the world order would be so easy and cheap it could be done without much public support. Washington thus embarked on a series of consequential foreign-policy endeavors: enlarging the North Atlantic Treaty Organization to include much of Central and Eastern Europe, establishing the World Trade Organization in the mid-'90s, promoting a global democracy agenda whenever possible.", "American voters have never shared the establishment's enthusiasm for a foreign policy aimed at transforming the post-Cold War world. When given the choice at the ballot box, they consistently dismiss experienced foreign-policy hands who call for deep global engagement. Instead they install untried outsiders who want increased focus on issues at home. Thus Clinton over Bush in 1992, Bush over Gore in 2000, Obama over McCain in 2008, and Trump over Clinton in 2016.", "Today the core problem in American foreign policy remains the disconnect between the establishment's ambitious global agenda and the limited engagement that voters appear to support. As Washington's challenges abroad become more urgent and more dangerous, the divide between elite and public opinion grows more serious by the day.", "The establishment is now beginning to discover what many voters intuitively believed back in the 1990s. Building a liberal world order is much more expensive and difficult than it appeared in a quarter-century ago, when America was king. Further, Washington's foreign-policy establishment is neither as wise nor as competent as it believes itself to be.", "Meantime, the world is only becoming more dangerous.... And the U.S. still lacks a strong consensus on what its foreign policy should be.", "Washington's foreign policy needs more than grudging acquiescence from the American people if it is to succeed. How to build broad support? First, the Trump administration should embrace a new national strategy that is more realistic than the end-of-history fantasies that came at the Cold War's conclusion. The case for international engagement should be grounded in the actual priorities of American citizens. Second, Mr. Trump and other political leaders must make the case for strategic global engagement to a rightfully skeptical public.", "For much of the establishment, focusing on the Trump administration's shortcomings is a way to avoid a painful inquest into the failures and follies of 25 years of post-Cold War foreign policy. But Mr. Trump's presidency is the result of establishment failure rather than the cause of it. Until the national leadership absorbs this lesson, the internal American crisis will deepen as the world crisis grows more acute.", "In an April 2017 blog post, one foreign policy specialist stated the following:", "Every 20 years or so\u2014the regularity is a little astonishing\u2014Americans hold a serious debate about their place in the world. What, they ask, is going wrong? And how can it be fixed? The discussion, moreover, almost always starts the same way. Having extricated itself with some success from a costly war, the United States then embraces a scaled-down foreign policy, the better to avoid overcommitment. But when unexpected challenges arise, people start asking whether the new, more limited strategy is robust enough. Politicians and policy makers, scholars and experts, journalists and pundits, the public at large, even representatives of other governments (both friendly and less friendly) all take part in the back-and-forth. They want to know whether America, despite its decision to do less, should go back to doing more\u2014and whether it can.", "The reasons for doubt are remarkably similar from one period of discussion to the next. Some argue that the U.S. economy is no longer big enough to sustain a global role of the old kind, or that domestic problems should take priority. Others ask whether the public is ready for new exertions. The foreign-policy establishment may seem too divided, and a viable consensus too hard to reestablish. Many insist that big international problems no longer lend themselves to Washington's solutions, least of all to military ones. American \"leadership,\" it is said, won't work so well in our brave new world....", "Polls suggested [in 2016] that [the public], too, was open to new approaches\u2014but unsure how to choose among them. In May 2016, the Pew Research Center reported that 70 percent of voters wanted the next president to focus on domestic affairs rather than foreign policy. In the same poll, Pew found that majorities of Democrats, Republicans, and independents favored policies that would keep the United States \"the only military superpower.\" Not for the first time, it seemed that Americans wanted to have it all....", "... the two halves of Trump's formula worked together better than critics appreciated. He sensed that the public wanted relief from the burdens of global leadership without losing the thrill of nationalist self-assertion. America could cut back its investment in world order with no whiff of retreat. It would still boss others around, even bend them to its will. Trump embraced Bernie Sanders's economics without George McGovern's geopolitics. Of self-identified conservative Republicans, 70 percent told Pew last year that they wanted the U.S. to retain its global military dominance. \"Make America Great Again\" was a slogan aimed right at them.", "Trump's more-and-less strategy also helped him with those who wanted a bristly, muscular America but did not want endless military involvements. Rejecting \"nation building\" abroad so as to focus on the home front was Trump's way of assuring voters that he knew how to avoid imperial overstretch. He offered supporters the glow of a Ronald Reagan experience\u2014without the George W. Bush tab.", "Commenting on the 2016 Charles Koch Institute-Center for the National Interest poll discussed earlier, a December 2016 blog post from staff of The National Interest stated", "With the election of Donald Trump to the presidency, the American public opted for change. A new poll from the Charles Koch Institute and Center for the National Interest on America and foreign affairs indicates that the desire for a fresh start may be particularly pronounced in the foreign policy sphere. In many areas the responses align with what Donald Trump was saying during the presidential campaign\u2014and in other areas, there are a number of Americans who don't have strong views. There may be a real opportunity for Trump to redefine the foreign policy debate. He may have a ready-made base of support and find that other Americans are persuadable.", "Two key questions centering on whether U.S. foreign policy has made Americans more or less safe and whether U.S. foreign policy has made the rest of the world more or less safe show that a majority of the public is convinced that\u2014in both cases\u2014the answer is that it has not. 51.9 percent say that American foreign policy has not enhanced our security; 51.1 percent say that it has also had a deleterious effect abroad. The responses indicate that the successive wars in the Middle East, ranging from Afghanistan to Iraq to Libya, have not promoted but, rather, undermined a sense of security among Americans.", "The poll results indicate that this sentiment has translated into nearly 35 percent of respondents wanted a decreased military footprint in the Middle East, with about 30 percent simply wanting to keep things where they stand. When it comes to America's key relationship with Saudi Arabia, 23.2 percent indicate that they would favor weaker military ties, while 24 percent say they are simply unsure. Over half of Americans do not want to deploy ground troops to Syria. Overall, 45.4 percent say that they believe that it would enhance American security to reduce our military presence abroad, while 30.9 percent say that it should be increased.", "That Americans are adopting a more equivocal approach overall towards other countries seems clear. When provided with a list of adjectives to describe relationship, very few Americans were prepared to choose the extremes of friend or foe. The most popular term was the fairly neutral term \"competitor.\" The mood appears to be similarly ambivalent about NATO. When asked whether the U.S. should automatically defend Latvia, Lithuania, or Estonia in a military conflict with Russia, 26.1 percent say that they neither agree nor disagree. 22 percent say that they disagree and a mere 16.8 percent say that they agree. Similarly, when queried about whether the inclusion of Montenegro makes America safer, no less than 63.6 percent say that they don't know or are not sure. About Russia itself, 37.8 percent indicate they see it as both an adversary and a potential partner. That they still see it as a potential partner is remarkable given the tenor of the current media climate.", "The poll results underscore that Americans are uneasy with the status quo. U.S. foreign policy in particular is perceived as a failure and Americans want to see a change, endorsing views and stands that might previously have been seen as existing on the fringe of debate about America's proper role abroad. Instead of militarism and adventurism, Americans are more keen on a cooperative world, in which trade and diplomacy are the principal means of engaging other nations. 49 percent of the respondents indicate that they would prioritize diplomacy over military power, while 26.3 percent argue for the reverse. 54 percent argue that the U.S. should work more through the United Nations to improve its security. Moreover, a clear majority of those polled stated that they believed that increasing trade would help to make the United States safer. In a year that has been anything but normal, perhaps Trump is onto something with his talk of burden sharing and a more critical look at the regnant establishment foreign policy that has prevailed until now.", "In December 2016, two Australian foreign policy analysts stated the following:", "The 2016 presidential election demonstrated the rise of a \"restraint constituency\" in American politics that openly questions Washington's bipartisan post-Cold War pursuit of a grand strategy of primacy or liberal hegemony. This constituency has been animated by the return of the Jacksonian tradition of American foreign policy, most notably in the candidacy of Donald Trump, which directly questions the benefits of alliance relationships as well as U.S. underwriting of an open global economic system. It also stresses the need for the United States to act unilaterally in defense of its core foreign policy interests. The resurgence of the Jacksonian tradition will make it difficult for the next President to reestablish a foreign policy consensus and combat perceptions of American decline.\"", "In a June 2016 blog post, one foreign policy specialist (the same one quoted above for the April 2017 blog post) stated the following:", "Few things make professors happier than thinking that the public has finally begun to agree with them. No surprise, then, that John Mearsheimer of the University of Chicago and Stephen Walt of Harvard open their article in Foreign Affairs \u2014in which they propose a new \"grand strategy\" for the United States\u2014by observing that \"[f]or the first time in recent memory, a large number of Americans\" are saying they want the same thing. The ideas Mr. Mearsheimer and Mr. Walt propose\u2014big cuts in defense spending, withdrawals from Europe and the Middle East, a focus on China as our only real rival\u2014deserve the discussion they will surely get. But let's put the policy merits to one side. Are the professors right to say they've now got the people behind them?", "The data say no. Mr. Mearsheimer and Mr. Walt rely on an April Pew poll that found that 57% of Americans want the U.S. \"to deal with its own problems.\" But this is what most Americans always say, no matter what \"grand strategy\" their leaders follow. In 2013, 80% of Pew respondents wanted to \"concentrate more on our own national problems.\" Twenty years earlier, 78% said the same thing. And 20 years before that, 73%. On this particular question, the number today (it's dropped to 69% since 2013) is lower than it has been \"in recent memory,\" but it's always high....", "Pew's pollsters, of course, ask many different questions, and the results don't always seem entirely consistent. Still, one trend is very clear: Fewer Americans are saying they want a less activist foreign policy. Three years ago, 51% said the U.S. did \"too much in helping solve world problems.\" This year, 41% did. This pattern\u2014a 10-point drop in three years\u2014holds among Democrats, Republicans, and independents.", "Ask questions with a sharper policy focus, and the result is steady\u2014sometimes growing\u2014support for a strong U.S. global role. Majorities of Democrats, Republicans, and independents favor policies that would keep the U.S. \"the only military superpower.\" Mr. Mearsheimer and Mr. Walt, by contrast, want to cut defense spending. Only 24% of Americans agree. (That share, also, is down from five years ago, and support for an increase has almost tripled, from 13% to 35%.) The professors want to pull all U.S. forces out of Europe and let our allies handle Russia on their own. Fine, but 77% of the American public thinks that NATO is good for the United States, and almost as many Americans (42%) view Russia as a \"major threat\" as see China that way (50%)."], "subsections": []}]}]}}
{"id": "R45650", "title": "Free Speech and the Regulation of Social Media Content", "released_date": "2019-03-27T00:00:00", "summary": ["As the Supreme Court has recognized, social media sites like Facebook and Twitter have become important venues for users to exercise free speech rights protected under the First Amendment. Commentators and legislators, however, have questioned whether these social media platforms are living up to their reputation as digital public forums. Some have expressed concern that these sites are not doing enough to counter violent or false speech. At the same time, many argue that the platforms are unfairly banning and restricting access to potentially valuable speech.", "Currently, federal law does not offer much recourse for social media users who seek to challenge a social media provider's decision about whether and how to present a user's content. Lawsuits predicated on these sites' decisions to host or remove content have been largely unsuccessful, facing at least two significant barriers under existing federal law. First, while individuals have sometimes alleged that these companies violated their free speech rights by discriminating against users' content, courts have held that the First Amendment, which provides protection against state action, is not implicated by the actions of these private companies. Second, courts have concluded that many non-constitutional claims are barred by Section 230 of the Communications Decency Act, 47 U.S.C. \u00a7 230, which provides immunity to providers of interactive computer services, including social media providers, both for certain decisions to host content created by others and for actions taken \"voluntarily\" and \"in good faith\" to restrict access to \"objectionable\" material.", "Some have argued that Congress should step in to regulate social media sites. Government action regulating internet content would constitute state action that may implicate the First Amendment. In particular, social media providers may argue that government regulations impermissibly infringe on the providers' own constitutional free speech rights. Legal commentators have argued that when social media platforms decide whether and how to post users' content, these publication decisions are themselves protected under the First Amendment. There are few court decisions evaluating whether a social media site, by virtue of publishing, organizing, or even editing protected speech, is itself exercising free speech rights. Consequently, commentators have largely analyzed the question of whether the First Amendment protects a social media site's publication decisions by analogy to other types of First Amendment cases. There are at least three possible frameworks for analyzing governmental restrictions on social media sites' ability to moderate user content.", "First, using the analogue of the company town, social media sites could be treated as state actors who are themselves bound to follow the First Amendment when they regulate protected speech. If social media sites were treated as state actors under the First Amendment, then the Constitution itself would constrain their conduct, even absent legislative regulation. The second possible framework would view social media sites as analogous to special industries like common carriers or broadcast media. The Court has historically allowed greater regulation of these industries' speech, given the need to protect public access for users of their services. Under the second framework, if special aspects of social media sites threaten the use of the medium for communicative or expressive purposes, courts might approve of content-neutral regulations intended to solve those problems. The third analogy would treat social media sites like news editors, who generally receive the full protections of the First Amendment when making editorial decisions. If social media sites were considered to be equivalent to newspaper editors when they make decisions about whether and how to present users' content, then those editorial decisions would receive the broadest protections under the First Amendment. Any government regulations that alter the editorial choices of social media sites by forcing them to host content that they would not otherwise transmit, or requiring them to take down content they would like to host, could be subject to strict scrutiny. A number of federal trial courts have held that search engines exercise editorial judgment protected by the First Amendment when they make decisions about whether and how to present specific websites or advertisements in search results, seemingly adopting this last framework.", "Which of these three frameworks applies will depend largely on the particular action being regulated. Under existing law, social media platforms may be more likely to receive First Amendment protection when they exercise more editorial discretion in presenting user-generated content, rather than if they neutrally transmit all such content. In addition, certain types of speech receive less protection under the First Amendment. Courts may be more likely to uphold regulations targeting certain disfavored categories of speech such as obscenity or speech inciting violence. Finally, if a law targets a social media site's conduct rather than speech, it may not trigger the protections of the First Amendment at all."], "reports": {"section_title": "", "paragraphs": ["O ne of the core purposes of the First Amendment's Free Speech Clause is to foster \"an uninhibited marketplace of ideas,\" testing the \"truth\" of various ideas \"in the competition of the market.\" Social media sites provide one avenue for the transmission of those ideas. The Supreme Court has recognized that the internet in general, and social media sites in particular, are \"important places\" for people to \"speak and listen,\" observing that \"social media users employ these websites to engage in a wide array of protected First Amendment activity.\" Users of social media sites such as Facebook, Twitter, YouTube, or Instagram can use these platforms to post art or news, debate political issues, and document their lives. In a study conducted in early 2018, the Pew Research Center found that 68% of U.S. adults use Facebook, 35% use Instagram, and 24% report using Twitter. These sites not only allow users to post content, they also connect users with each other, allowing users to seek out friends and content and often recommending new connections to the user. On most social media platforms, users can then send content to specific people, or set permissions allowing only certain people to view that content. Through human curation and the use of algorithms, these platforms decide how content is displayed to other users. In curating this content, social media sites may also edit user content, combine it, or draft their own additions to that content. These platforms are generally free to users, and make revenue by selling targeted advertising space, among other things. Thus, social media sites engage in a wide variety of activities, at least some of which entail hosting\u2014and creating\u2014constitutionally protected speech.", "Social media companies have recognized their role in providing platforms for speech. To take one example, in a September 2018 hearing before the Senate Select Committee on Intelligence, the founder and Chief Executive Officer of Twitter, Jack Dorsey, repeatedly referred to Twitter as a \"digital public square,\" emphasizing the importance of \"free and open exchange\" on the platform. Critically, however, social media sites also have content-moderation policies under which they may remove certain content. Further, these sites determine how content is presented: who sees it, when, and where. As one scholar has said, social media sites \"create rules and systems to curate speech out of a sense of corporate social responsibility, but also . . . because their economic viability depends on meeting users' speech and community norms.\" Speech posted on the internet \"exists in an architecture of privately owned websites, servers, routers, and backbones,\" and its existence online is subject to the rules of those private companies. Consequently, one First Amendment scholar predicted ten years ago that \"the most important decisions affecting the future of freedom of speech will not occur in constitutional law; they will be decisions about technological design, legislative and administrative regulations, the formation of new business models, and the collective activities of end-users.\"", "Social media companies have come under increased scrutiny regarding the type of user content that they allow to be posted on their sites, and the ways in which they may promote\u2014or deemphasize\u2014certain content. A wide variety of people have expressed concern that these sites do not do enough to counter harmful, offensive, or false content . At the same time, others have argued that the platforms take down or deemphasize too much legitimate content. In the September 2018 hearing referenced above, Sheryl Sandberg, the Chief Operating Officer of Facebook, expressed the difficulty of determining what types of speech would violate company standards barring hate speech. Both Dorsey and Facebook founder and Chief Executive Officer Mark Zuckerberg have been asked to respond to allegations of political bias in their platforms' content moderation decisions at hearings before House and Senate committees. Commentators and legislators alike have questioned whether social media sites' content policies are living up to the free speech ideals they have espoused. As a result, some, including Members of Congress, have called for regulation of social media platforms, focused on the way those companies police content.", "In light of this public policy debate, this report begins by outlining the current legal framework governing social media sites' treatment of users' content, focusing on the First Amendment and Section 230 of the Communications Decency Act of 1996 (CDA). As explained below, under existing law, lawsuits predicated on these sites' decisions to remove or to host content have been largely unsuccessful because of (1) doctrines that prevent the First Amendment from being applied to private social media companies, and (2) Section 230 of the CDA, which often protects social media companies from being held liable under federal or state laws for these decisions. The debate over whether the federal government should fill this legal vacuum has raised the question as to whether and to what extent the federal government can regulate the way social media sites present users' content, either to require these sites to take down, restrict access to, or qualify certain types of content, or, on the other hand, protect users' rights to post content on those sites. Such government regulation would constitute state action that implicates the First Amendment. While the issue largely remains an open question in the courts, the First Amendment may provide some protection for social media companies when they make content presentation decisions, limiting the federal government's ability to regulate those decisions. The extent of any free speech protections will depend on how courts view social media companies and the specific action being regulated. ", "Accordingly, the bulk of this report explores how the First Amendment applies to social media providers' content presentation decisions. Looking to three possible analogues drawn from existing First Amendment law, the report explores whether social media companies could be viewed in the same way as company towns, broadcasters, or newspaper editors. The report also explains the possible regulatory implications of each First Amendment framework as Congress considers the novel legal issues raised by the regulation of social media."], "subsections": [{"section_title": "Existing Legal Barriers to Private Lawsuits Against Social Media Providers", "paragraphs": ["Under current federal law, social media users may face at least two significant barriers if they attempt to sue a social media provider for its decisions about hosting or limiting access to users' content. The first, which likely applies only to lawsuits predicated on a platform's decision to remove rather than allow content, is the state action requirement of the First Amendment. The state action doctrine provides that constitutional free speech protections generally apply only when a person is harmed by an action of the government, rather than a private party. The second legal barrier is the CDA's Section 230, which offers broad immunity to \"interactive computer service\" providers. Section 230(c)(1) provides immunity from any lawsuit that seeks to hold a service provider liable for publishing information that was created by an \"information content provider,\" effectively protecting social media sites from liability for hosting content. By contrast, Section 230(c)(2) provides immunity for sites that take good faith action to restrict access to content that the provider or users deem \"obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable.\" Thus, federal law does not currently provide a recourse for many users who would like to challenge a social media site's decision to ban or restrict content, or to host content\u2014and may affirmatively bar liability in certain circumstances."], "subsections": [{"section_title": "First Amendment: State Action Requirement", "paragraphs": ["The Free Speech Clause of the First Amendment provides that \" Congress shall make no law . . . abridging the freedom of speech\" and applies to the \" State[s] \" through the Fourteenth Amendment. Thus, the First Amendment, like other constitutional guarantees, generally applies only against government action. As the Supreme Court has said, \"while statutory or common law may in some situations extend protection or provide redress against a private corporation or person who seeks to abridge the free expression of others, no such protection or redress is provided by the Constitution itself.\" However, the Supreme Court has, in limited circumstances, allowed First Amendment claims to proceed against seemingly private parties that abridge protected speech.", "The clearest example of the Court extending the First Amendment to apply to the actions of a private party comes from Marsh v. Alabama , where the Court held that the First Amendment prohibited the punishment of a resident of a company-owned town for distributing religious literature. While the town in question was owned by a private corporation, \"it ha[d] all the characteristics of any other American town,\" including residences, businesses, streets, utilities, public safety officers, and a post office. Under these circumstances, the Court held that \"the corporation's property interests\" did not \"settle the question\" : \"[w]hether a corporation or a municipality owns or possesses the town[,] the public in either case has an identical interest in the functioning of the community in such manner that the channels of communication remain free.\" Consequently, the corporation could not be permitted \"to govern a community of citizens\" in a way that \"restrict[ed] their fundamental liberties.\" The Supreme Court has described Marsh as embodying a \"public function\" test, under which the First Amendment will apply if a private entity exercises \"powers traditionally exclusively reserved to the State.\"", "Since Marsh was issued in 1946, however, it has largely been limited to the facts presented in that case. The Supreme Court extended the Marsh decision in 1968: in Amalgamated Food Employees Union v. Logan Valley Plaza , the Court held that a private shopping mall could not prevent individuals from peacefully picketing on the premises, noting similarities between \"the business block in Marsh and the shopping center\" at issue in that case. However, the Court subsequently disclaimed Logan Valley in Hudgens v. NLRB , rejecting the idea that \"large self-contained shopping center[s]\" are \"the functional equivalent of a municipality.\" Instead, the Court held that in Hudgens , where a shopping center manager had threatened to arrest picketers for trespassing, \"the constitutional guarantee of free expression ha[d] no part to play.\" As a result, the picketers \"did not have a First Amendment right to enter this shopping center for the purpose of advertising their strike.\" In another decision in which the Supreme Court held that the First Amendment did not prevent a shopping center from banning the distribution of handbills, the Court distinguished Marsh by noting that \"the owner of the company town was performing the full spectrum of municipal powers and stood in the shoes of the State.\" By contrast, the disputed shopping center had not assumed \"municipal functions or power.\" The fact that the shopping center was generally open to the public did not qualify as a \"dedication of [the] privately owned and operated shopping center to public use\" sufficient \"to entitle respondents to exercise therein the asserted First Amendment rights.\" ", "Apart from the factual circumstances presented by the company town that exercises powers \"traditionally\" and \"exclusively\" held by the government, the Court has sometimes applied the First Amendment against private parties if they have a \"sufficiently close relationship\" to the government. Such circumstances may exist where a private company \"is subject to extensive state regulation\"\u2014although government regulation alone is not sufficient to establish the state action requirement. Instead, the inquiry in such a case is \"whether there is a sufficiently close nexus between the State and the challenged action of the regulated entity so that the action of the latter may be fairly treated as that of the State itself.\" In a 2001 case, the Supreme Court held that a state athletic association, while \"nominally private,\" should be subject to First Amendment standards because of \"the pervasive entwinement of public institutions and public officials in its composition and workings.\"", "Some plaintiffs have argued that various internet companies, including some social media sites, should be treated as state actors subject to the First Amendment when those companies take down or restrict access to their speech. Courts have rejected these claims. Many of these decisions have involved relatively terse applications of existing Supreme Court precedent. In a few cases, however, federal district courts have explored the application of these state action cases in more detail. ", "First, lower courts have repeatedly held that social media sites do not meet the \"exclusive public function test\" and are not akin to a company town. In so holding, courts have recognized that, under prevailing Supreme Court case law, private actors are not \"state actors subject to First Amendment scrutiny merely because they hold out and operate their private property as a forum for expression of diverse points of view.\" Accordingly, they have held that the mere fact that social media providers hold their networks open for use by the public is insufficient to make them subject to the First Amendment. Courts have rejected plaintiffs' efforts to characterize the provision of a public forum or \"the dissemination of news and fostering of debate\" as public functions that were traditionally and exclusively performed by the government.", "For example, in Cyber Promotions v. American Online (AOL) , a district court rejected the argument that \"by providing Internet e-mail and acting as the sole conduit to its members' Internet e-mail boxes, AOL has opened up that part of its network [to the public] and as such, has sufficiently devoted this domain for public use.\" The court said that \"[a]lthough AOL has technically opened its e-mail system to the public by connecting with the Internet, AOL has not opened its property to the public by performing any municipal power or essential public service and, therefore, does not stand in the shoes of the State.\" The challengers in that case, a company that had been blocked from sending unsolicited advertisements via email, also argued that AOL performed an exclusive public function because the company had \"no alternative avenues of communication . . . to send its e-mail to AOL members.\" The judge rejected this claim as well, concluding that the company did have alternative avenues to send its advertising to AOL members, including other places on the internet as well as \"non-Internet avenues.\" Similarly, in Prager University v. Google LLC , a district court held that by operating YouTube, \"a 'video-sharing website,'\" and then restricting access to some videos, Google had not \"somehow engaged in one of the 'very few' functions that were traditionally 'exclusively reserved to the State.'\"", "Trial courts have also held that social networks have failed to meet the joint participation, nexus, and entwinement tests for state action. In Cyber Promotions , the court held that there was no joint participation because the government was not involved in AOL's challenged decision. Another trial court, in Quigley v. Yelp, Inc. , similarly concluded joint participation did not exist between various social media sites and the government where the plaintiff failed to show that the state participated in the specific actions challenged in the lawsuit. That court also rejected an argument that there was \"a pervasive entwinement between defendants and the government because the government maintains accounts on the defendants' websites, and uses their websites to communicate with citizens.\" Even assuming that this allegation was true, the court held that this was not \"the sort of entwinement that . . . converts a private party's actions to state action,\" observing that the government did not participate \"in the operation or management of defendants' websites,\" but only used these sites \"in the same manner as other users.\" ", "Accordingly, lower courts have uniformly concluded that the First Amendment does not prevent social media providers from restricting users' ability to post content on their networks. However, the Supreme Court has not yet weighed in on this subject, and as will be discussed in more detail below, a number of legal commentators have argued that, notwithstanding these trial court decisions, courts should view social media platforms as equivalent to state actors, at least when they perform certain functions. "], "subsections": []}, {"section_title": "Section 230 of the CDA", "paragraphs": ["A constitutional injury is not the only type of harm that a social media user might suffer as a result of a social network's decisions about user content, and litigants have brought a wide variety of claims challenging these sorts of decisions. For example, plaintiffs have argued that sites' decisions to remove or restrict access to their content constituted unfair competition under the Lanham Act, discrimination under the Civil Rights Act of 1964, tortious interference with contractual relationships, fraud, and breach of contract. Other plaintiffs have attempted to hold online platforms liable for harm stemming from the sites' decisions not to remove content, claiming, for example, that by publishing certain content, the sites committed defamation or negligence, or violated state securities law. However, many of these suits are barred by the broad grant of immunity created by the CDA's Section 230. ", "Section 230, as seen in the text box above, distinguishes between \"interactive computer services\" and \"information content providers.\" An interactive computer service is \"any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server.\" Courts have considered online platforms such as Facebook, Twitter, and Craigslist to be \"interactive computer service\" providers. An information content provider is \"any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service.\"", "Section 230 contains two primary provisions creating immunity from liability. First, Section 230(c)(1) specifies that interactive service providers and users may not \"be treated as the publisher or speaker of any information provided by another information content provider.\" Second, Section 230(c)(2) states that interactive service providers and users may not be held liable for voluntarily acting in good faith to restrict access to objectionable material. Section 230 preempts state civil lawsuits and state criminal prosecutions to the extent that they are \"inconsistent\" with Section 230. It also bars certain federal civil lawsuits, but, significantly, not federal criminal prosecutions. Section 230(e) outlines a few exemptions: for example, Section 230 immunity will not apply in a suit \"pertaining to intellectual property\" or in claims alleging violations of certain sex trafficking laws."], "subsections": [{"section_title": "Section 230(c)(1)", "paragraphs": ["Section 230, and particularly Section 230(c)(1), distinguishes those who create content from those who provide access to that content, providing immunity to the latter group. An entity may be both an \"interactive computer service\" provider and an \"information content provider,\" but the critical inquiry for applying Section 230(c)(1) is whether, with respect to the particular actions alleged to create liability, the service provider developed the underlying content. ", "Courts have held that an interactive computer service provider may be subject to suit if it is also acting as a content provider. Frequently, the application of Section 230(c)(1) immunity turns not on the type of suit that is being brought\u2014that is, for example, whether it is a suit for libel or for breach of contract \u2014but on whether the facts establish that the interactive computer service provider was merely a publisher of another's content, or whether the service provider itself created or developed content. Courts have generally held that a site's ability to control the content posted on its website does not, in and of itself, transform an interactive computer service into an internet content provider. As one court said, \"a website does not create or develop content when it merely provides a neutral means by which third parties can post information of their own independent choosing online.\" A service provider may still be immune from suit under Section 230(c)(1) even if it makes small editorial changes to that content.", "Conversely, a \"website operator\" can be liable for \"content that it creates itself, or is 'responsible, in whole or in part' for creating or developing.\" Even if the service provider does not itself solely create the content, Section 230 immunity might be unavailable if the service provider \"augment[s] the content.\" For example, one state court held that, even assuming that Snapchat was a provider of interactive computer services, a plaintiff's claim against the company could proceed where the alleged harm was caused by a \"filter,\" or a graphic overlay on a user's photo, that was created by Snapchat itself. Because the plaintiff sought \"to hold Snapchat liable for its own conduct,\" the court held that \"CDA immunity does not apply.\" ", "Some courts have applied a \"material contribution test,\" asking whether a service provider \"materially contribute[d] to the illegality\" of the disputed content, or \"in some way specifically encourage[d] development of what is offensive about the content.\" Thus, for example, a federal appellate court concluded that Roommates.com, a site that \"match[ed] people renting out spare rooms with people looking for a place to live,\" was not wholly immune from claims that it had violated laws prohibiting housing discrimination. The court concluded that Roommates.com could be subject to suit for discrimination because the site required all users to respond to questions about their sex, family status, and sexual orientation by selecting among preset answers to those questions, and to state their \"preferences in roommates with respect to the same three criteria.\" Accordingly, in the court's view, as to these questions and answers, Roommates.com was \"more than a passive transmitter of information provided by others; it becomes the developer, at least in part, of that information.\" Each user's personal page was \"a collaborative effort between [Roommates.com] and the subscriber.\" This rendered it the \"'information content provider' as to the questions\" and the answers."], "subsections": []}, {"section_title": "Section 230(c)(2)", "paragraphs": ["Although courts frequently consider the immunity in Section 230(c)(1) and Section 230(c)(2) together, as one \"Section 230\" shield, the text of these provisions suggests they cover distinct circumstances. Section 230(c)(1) applies more broadly, to any suit in which the plaintiff seeks to hold the provider liable as the publisher of another's information. By contrast, Section 230(c)(2) applies only to good-faith, voluntary actions by a provider\u2014or a third party assisting providers\u2014to restrict access to \"obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable\" content. ", "There is an important difference in the language of the two provisions: as noted, Section 230(c)(2) requires a service provider to act in good faith for immunity to apply; Section 230(c)(1) does not contain a similar requirement. While courts frequently apply Section 230 to dismiss lawsuits premised on a service provider's decision to remove or restrict access to another's content, they are somewhat less likely to dismiss lawsuits where the good-faith requirement is involved, because a plaintiff who properly pleads and presents evidence regarding a lack of good faith creates a question of fact that may prevent the court from summarily dismissing the case. One trial court concluded that there was a question as to Google's good faith where the plaintiff alleged that Google was \"selectively enforcing\" a stated policy, and that the policy itself was \"entirely pretextual.\" Another trial court concluded that a company had sufficiently alleged bad faith where it argued that Google had \"falsely accused\" it of violating Google's stated policy, and that Google \"sought to punish [the company] because it\" refused to allow Google to embed advertising in the company's video.", "One view is that Section 230(c)(2) applies when a provider \" does filter out offensive material,\" while Section 230(c)(1) applies when providers \" refrain from filtering or censoring the information on their sites.\" At least one federal trial judge has noted that interpreting Section 230(c)(1) to bar suits in which a plaintiff seeks to hold a service provider liable for removing the plaintiff's own content would \"swallow[] the more specific immunity in (c)(2).\" The court explained that: ", "Subsection (c)(2) immunizes only an interactive computer service's \"actions taken in good faith.\" If the publisher's motives are irrelevant and always immunized by (c)(1), then (c)(2) is unnecessary. The Court is unwilling to read the statute in a way that renders the good-faith requirement superfluous.", "Lawsuits directly challenging a website's decision to restrict or remove content, rather than to publish it, often do invoke Section 230(c)(2). Thus, courts have considered the application of Section 230(c)(2), rather than Section 230(c)(1), in lawsuits involving the removal of an app from the Google Play Store, the removal of websites from Google's search results, the removal of videos from YouTube, and decisions to filter certain IP addresses or email addresses. However, this distinction between filtering content and publishing content does not always play out so neatly in the courts, and other decisions have applied Section 230(c)(1) immunity to bar suits that are grounded in an interactive service provider's decision to restrict content. ", "There is one additional circumstance under which Section 230(c)(2) immunity, as opposed to Section 230(c)(1) immunity, may apply. Section 230(c)(2)(B) protects those providers or users of computer services who \"enable or make available to information content providers or others technical means to restrict access to\" objectionable material. This provision may protect, for example, \"providers of programs that filter adware and malware.\" This immunity may apply even where an interactive computer service is not a publisher entitled to immunity under Section 230(c)(1).", "Thus, as a whole, Section 230 offers broad immunity to \"interactive computer service\" providers when a litigant seeks to hold them liable for publishing, or not publishing, a user's content. Section 230(c)(1) provides immunity from any lawsuit that seeks to hold a service provider liable for publishing information that was created by an \"information content provider,\" effectively protecting social media sites from liability for hosting content. And Section 230(c)(2) provides immunity for sites that take good faith action to restrict access to content that the provider or users deem \"objectionable.\" Consequently, to the extent that private litigants or state governments would have been able to hold social media companies liable under existing law for their decisions regarding presenting or restricting access to user content, those suits have largely been barred under Section 230."], "subsections": []}]}]}, {"section_title": "First Amendment Limits on Government Regulation of Social Media Content", "paragraphs": ["As discussed above, courts have often dismissed lawsuits attempting to hold social media providers liable for regulating users' content, whether because the court concludes that the First Amendment does not apply to the actions of these private actors or because the court holds that Section 230(c)(2) of the CDA bars the lawsuit. Additionally, Section 230(c)(1) may bar lawsuits that seek to hold these platforms liable because of their decisions to publish certain content. Particularly because of Section 230, there are few, if any, federal or state laws that expressly govern social media sites' decisions about whether and how to present users' content. Consequently, users' ability to post speech on social media platforms is governed primarily by the private moderation policies created by these companies.", "In response to broader public policy concerns about how social media entities are policing user content, some commentators and legislators have proposed federal regulation both to protect users' ability to speak freely on those platforms and to require these platforms to take down, deemphasize, or clarify certain content. While the First Amendment, as discussed above, may not apply in disputes between private parties, a federal law regulating internet content decisions would likely qualify as state action sufficient to implicate the First Amendment. After all, the First Amendment provides that \" Congress shall make no law . . . abridging the freedom of speech.\" ", "Once state action is established, the next consideration is to what extent the First Amendment protects social media platforms' content moderation decisions. Stated another way, the relevant question is when social media providers can assert that government regulation infringes on their own speech. Perhaps most obviously, if a social media site posts content that it has created itself, the site may raise First Amendment objections to a law expressly regulating that speech. Social media providers may also argue that they are exercising protected speech rights when they are choosing whether to publish content that was originally created by users and when they make decisions about how to present that content. However, the fact that a law affects speech protected by the First Amendment does not necessarily mean that it is unconstitutional. As explained below, the First Amendment allows some regulation of speech and does not prohibit regulation of conduct."], "subsections": [{"section_title": "Background Principles: First Amendment Protections Online", "paragraphs": ["While the First Amendment generally protects the \"freedom of speech,\" its protections do not apply in the same way in all cases. Not every government regulation affecting content posted on social media sites would be analyzed in the same way. A court's analysis would depend on a number of factors.", "First, a court would inquire into the nature of the precise action being regulated, including whether it is properly characterized as speech or conduct. Laws that target conduct and only incidentally burden speech may be permissible. But \"speech\" is not always easy to identify. Lower courts have held that computer code and programs may be entitled to First Amendment protection, so long as they communicate \"information comprehensible to human beings.\" Courts have also concluded that in some circumstances, domain names might constitute protected speech. And more generally, the Supreme Court has said that \"inherently expressive\" conduct can receive First Amendment protections.", "If a law does regulate speech, a court would consider the type of speech being regulated to determine how closely to scrutinize the regulation. For example, a court may ask whether that speech is commercial and, as such, deserving of less protection under the First Amendment. Advertisements posted on social media sites would likely qualify as commercial speech. If speech is not purely commercial and is instead, for example, political advocacy, that speech may receive greater protection. Certain categories of speech receive even less protection than commercial speech. For example, the Supreme Court has said that states may prohibit speech advocating violence if that \"advocacy is directed to inciting or producing imminent lawless action and is likely to incite or produce such action.\" Thus, certain types of threatening or violent speech posted on social media may not be entitled to First Amendment protection. However, perhaps in light of the fact that it can be difficult to determine whether speech is protected, the Court has sometimes held that criminal statutes targeting disfavored speech must include a mental state requirement. For example, in United States v. X-Citement Video , the Court noted that, with respect to a federal law prohibiting the distribution of child pornography, criminal liability turned on \"the age of the performers\"\u2014as did First Amendment protection for the materials, given that \"nonobscene, sexually explicit materials involving persons over the age of 17 are protected by the First Amendment.\" Accordingly, although the statute was unclear on this point, the Court held that the law applied only if a person distributing such materials knew that the performers were underage. ", "Even if a statute does target a category of speech that is traditionally proscribable, it may still be invalid if it is overbroad, in the sense that it prohibits a substantial amount of protected speech, as well. Thus, for example, in Ashcroft v. Free Speech Coalition , the Supreme Court held that a federal statute prohibiting \"sexually explicit images that appear to depict minors\" was unconstitutionally overbroad. The statute encompassed pornography that did \"not depict an actual child,\" prohibiting images that were \"created by using adults who look like minors or by using computer imaging.\" Thus, the Court held that the statute violated the First Amendment because it \"proscribe[d] a significant universe of speech that is neither obscene . . . nor child pornography,\" as those two categories had been defined in prior Supreme Court cases. ", "A court would also look to the nature of the regulation itself, and primarily whether it is content-neutral, or whether it instead discriminates on the basis of content or viewpoint, subjecting that law to strict scrutiny. The Court has said that \"a speech regulation is content based if the law applies to particular speech because of the topic discussed or the idea or message expressed.\" In a strict scrutiny analysis, the government must prove that the \"restriction 'furthers a compelling interest and is narrowly tailored to achieve that interest.'\" If a regulation is content-neutral, which is to say, \"justified without reference to the content of the regulated speech,\" a court employs an intermediate scrutiny analysis, asking whether the restriction is \"narrowly tailored to serve a significant governmental interest\" and \"leave[s] open ample alternative channels for communication of the information.\" Accordingly, for example, a federal court of appeals held in Universal City Studios, Inc. v. Corley that government restrictions on posting or linking to decryption computer programs did regulate speech protected by the First Amendment, but ultimately upheld those restrictions as permissible content-neutral regulations.", "These first two inquiries are distinct, although they do overlap. If a statute targets speech rather than conduct, it is likely that it will target that speech based on its content, and therefore will not be content-neutral. And by contrast, a statute that targets conduct will likely be content-neutral on its face. In Universal City Studios, Inc. , the court held that the challenged government regulations were content-neutral because they \"target[ed] only the nonspeech component\" of the prohibited actions by focusing on the \"functional\" aspects of computer code that operate without any human involvement. It is possible, though, that a law targeting speech would nonetheless be content-neutral. For example, the Court has said that \"a prohibition against the use of sound trucks emitting 'loud and raucous' noise in residential neighborhoods is permissible if it applies equally to music, political speech, and advertising.\" ", "A court might also look to the particular nature of the medium being regulated, asking whether there are special characteristics that might justify greater regulation. The Supreme Court has said that \"[e]ach medium of expression . . . must be assessed for First Amendment purposes by standards suited to it, for each may present its own problems.\" The Court has been willing to extend First Amendment protections that historically applied to speech communicated in traditional public forums such as streets and sidewalks to new mediums for communication, including video games and the internet. But the Court has also recognized that the principles developed \"in the context of streets and parks . . . should not be extended in a mechanical way to the very different context of\" newer media. While the Court has characterized social media as \"the modern public square,\" it has not fully clarified what standards should apply to government regulation of that medium\u2014particularly with respect to social media platforms' roles as hosts for others' speech. ", "The Supreme Court said in Reno v. ACLU that when considering government regulation of \"the Internet\" in general, factors that had previously justified greater regulation of other media did not apply. In that case, the Court held unconstitutional two provisions of the CDA that criminalized the transmission of certain \"indecent\" or \"patently offensive\" material to minors over the internet. The Court rejected the government's argument that the regulation was permissible because the internet is analogous to broadcast media, where the Court has permitted greater regulation of speech. The Court noted that unlike the broadcast industry, \"the vast democratic fora of the Internet\" had not traditionally \"been subject to the type of government supervision and regulation that has attended the broadcast industry,\" and said that \"the Internet is not as 'invasive' as radio or television.\" Accordingly, the Court stated that there was \"no basis for qualifying the level of First Amendment scrutiny that should be applied to this medium.\" However, as will be discussed in more detail below, some scholars have argued that Reno , decided in 1997, does not specifically address government regulation of modern social media sites, which may present unique concerns from those discussed in Reno ."], "subsections": []}, {"section_title": "Social Media Sites: Providing a Digital Public Square", "paragraphs": ["Social media sites provide platforms for content originally generated by users. In that capacity, social media sites decide whether to host users' content and how that content is presented, and may alter that content in the process. Whether these editorial functions are \"speech\" protected by the First Amendment presents an especially difficult question. As one federal appellate court noted, \"entities that serve as conduits for speech produced by others\" may \"receive First Amendment protection\" if they \"engage in editorial discretion\" when \"selecting which speech to transmit.\" On the other hand, the court said, such an entity might not be \"a First Amendment speaker\" if it indiscriminately and neutrally transmits \"any and all users' speech.\"", "Some have argued that social media sites' publication decisions are protected under the First Amendment. Until recently, academic debate focused largely on whether the algorithms employed by search engines to retrieve and present results are properly characterized as the speech of those search engines. One scholar argued that search engines' publication activities meet at least one of the criteria necessary to qualify for First Amendment protection: these sites are publishing \"sendable and receivable substantive message[s]\"\u2014or, in other words, they are communicating content. Another scholar countered this argument by saying that indexing search results is not equivalent to communicating protected ideas, arguing that to be entitled to First Amendment protections, content must be \"adopted or selected by the speaker as its own.\"", "There are not many court decisions evaluating whether a social media site, by virtue of reprinting, organizing, or even editing protected speech, is itself exercising free speech rights. While a few federal courts have held that search engine results and decisions about whether to run advertisements are speech protected by the First Amendment, these decisions are, so far, limited to trial courts and therefore not precedential beyond the facts of those cases. This relative dearth of cases is likely due in large part to the fact that, as discussed above, Section 230 of the CDA bars a significant number of lawsuits that seek to hold social media providers liable for publishing others' content, often making it unnecessary to consider whether the First Amendment protects these publication decisions. Section 230 has sometimes been described as an attempt to protect the freedom of speech on the internet, suggesting that its displacement of the First Amendment is an implicit consequence of Section 230's speech-protective nature. In other words, Section 230 creates immunity even where the First Amendment might not.", "Due to the lack of case law examining the issue, commentators have largely analyzed the question of whether a social media site's publication decisions are protected by the First Amendment by analogy to other types of First Amendment cases. At least one scholar has argued that there are three possible frameworks a court could apply to analyze governmental restrictions on social media sites' ability to moderate user content. The first analogy would treat social media sites as equivalent to company towns. Under this scenario, social media sites would be treated as state actors who are themselves bound to follow the First Amendment when they regulate protected speech. The second possible framework would view social media sites as analogous to special industries like common carriers or broadcast media, in which the Court has historically allowed greater regulation of the industries' speech in light of the need to protect public access for users of their services. The third analogy would treat social media sites like news editors, who generally receive the full protections of the First Amendment when making editorial decisions.", "It is likely that no one analogy can account for all social media platforms, or all activities performed by those platforms. Some social media platforms may exercise more editorial control over user-generated content than others, and any given social media company performs a wide variety of different functions. Consequently, determining which line of case law is most analogous will likely depend on the particular activity being regulated."], "subsections": [{"section_title": "Social Media Sites as Company Towns", "paragraphs": ["As discussed in more detail above, although the First Amendment generally applies only to government action, the Supreme Court has held that in limited, special circumstances, private actors should be treated as the government and must comply with constitutional standards when interacting with others. The archetypal case is that of the company town: in Marsh v. Alabama , the Supreme Court held that the residents of a company-owned town\u2014a town that was functionally identical to any ordinary town, but for the fact of its ownership\u2014were entitled to the protections of the First Amendment when distributing religious literature on the streets and sidewalks in that town. Courts have largely held that, under existing Supreme Court precedent, social media providers do not meet the First Amendment's state action requirement.", "Commentators have argued, however, that dicta in Supreme Court cases may suggest that social media sites should be treated differently. As an initial matter, there is language in Marsh suggesting that privately owned property may be subject to the First Amendment if it is opened for public use: ", "Ownership does not always mean absolute dominion. The more an owner, for his advantage, opens up his property for use by the public in general, the more do his rights become circumscribed by the statutory and constitutional rights of those who use it. Thus, the owners of privately held bridges, ferries, turnpikes and railroads may not operate them as freely as a farmer does his farm. Since these facilities are built and operated primarily to benefit the public and since their operation is essentially a public function, it is subject to state regulation.", "At least one scholar has argued that, with respect to online forums, \" Marsh should be expanded and read functionally.\" He suggests that courts should ask whether a given online space is the \"functional equivalent\" of a traditional public forum and should engage in a First Amendment analysis that treats private ownership as \"one factor\" when balancing \"the autonomy rights of property owners against the expressive rights of property users.\" But courts, by and large, have rejected the broader implications of this language in Marsh , and the Supreme Court has held that the mere fact that a private space is open to the public is not sufficient to \"entitle\" the public to the protections of the First Amendment in that space.", "Another scholar, however, has argued that notwithstanding \"this more narrow conception of the public function exception,\" social media sites should still be treated as equivalent to the state under Marsh . He claims that social media sites perform a \"public function\" under Marsh by \"providing a space that has the primary purpose of serving as a forum for public communication and expression, that is designated for that purpose, and that is completely open to the public at large.\" In his view, \"[s]ince managing public squares and meeting places is something that has traditionally been done by the government, social network websites therefore serve a public function that has traditionally been the province of the state.\" As mentioned above, however, trial courts have declined to extend Marsh to social media sites, disagreeing that the provision of a public forum or \"the dissemination of news and fostering of debate\" are public functions that were traditionally and exclusively performed by the government.", "Others have argued that a more recent Supreme Court decision, Packingham v. North Carolina , might \"signal a shift\" in the state action analysis. In Packingham , the Court struck down a North Carolina law that prohibited a registered sex offender from accessing any \"commercial social networking Web site where the sex offender knows that the site permits minor children to become members or to create or maintain personal Web pages.\" Critically, the Court stated that \"cyberspace\" is today \"the most important place[] . . . for the exchange of views\" protected by the First Amendment, analogizing Facebook, LinkedIn, and Twitter to traditional public forums and characterizing social media sites as \"the modern public square.\" In light of the importance of these forums, the Court concluded that the statute was too broad and not sufficiently tailored to serve the government's asserted interest. ", "Some have suggested that, if the Court views social media as \"the modern public square,\" it may be more willing to say that social media companies \"count as state actors for First Amendment purposes.\" Indeed, Justice Alito declined to join the majority opinion in Packingham because he was concerned about the scope of the Court's \"musings that seem to equate the entirety of the internet with public streets and parks.\" He argued that this broader language was \"bound to be interpreted by some\"\u2014erroneously, in his view\u2014as limiting the government's ability to \"restrict . . . dangerous sexual predators\" from some activities online. At least one court, however, has rejected some of the broader implications of this case, noting that \" Packingham did not, and had no occasion to, address whether private social media corporations like YouTube are state actors that must regulate the content of their websites according to the strictures of the First Amendment. Instead, .\u00a0. . Packingham concerned whether North Carolina ran afoul of the First Amendment . . . .\"", "If social media sites were treated as state actors under the First Amendment, then the Constitution itself would constrain their conduct when they act to restrict users' protected speech. Under this framework, Congress could enact legislation to remedy violations of free speech rights by social media entities. For instance, Title III of the Civil Rights Act of 1964 authorizes the Attorney General to bring a civil action against governmental facilities that deny a person equal access \"on account of his race, color, religion, or national origin,\" essentially granting the Attorney General the power to sue to enjoin certain acts that would violate the Fourteenth Amendment's Equal Protection Clause. To take another example, 42 U.S.C. \u00a7 1983 allows any person who has been deprived by a state actor \"of any rights, privileges, or immunities secured by the Constitution\" to bring certain civil actions to vindicate those rights in court.", "By contrast, commentators have argued that under this framework, the problems associated with social media sites hosting too much speech\u2014that is, problems caused by the dissemination of things like misinformation and hate speech\u2014would be exacerbated. If these companies were considered equivalent to state actors and their sites were seen as equivalent to traditional public forums, their ability to regulate speech would be relatively circumscribed. And in turn, so would the government be limited in its ability to require these platforms to take down certain types of content, if that content qualified as protected speech. Thus, one scholar predicted that under this framework, \"[a]ll but the very basest speech would be explicitly allowed and protected\u2014making current problems of online hate speech, bullying, and terrorism, with which many activists and scholars are concerned, unimaginably worse.\"", "However, to the extent that a federal regulation infringed on speech properly attributed to the social media sites, rather than their users\u2014and this speech could include not only content originally generated by the social media companies, but also their editorial decisions about user-generated content\u2014it could implicate an open First Amendment question. State and local governments are constrained by the First Amendment when they interact with individuals, but the Supreme Court has never squarely resolved whether states and municipalities could themselves assert First Amendment rights against the federal government. At least one scholar has argued that the First Amendment should protect government speech in certain circumstances. And in a 2015 case, the Supreme Court said that a private party could not force a state to include certain messages in its own speech, suggesting that governments do have some right to speak for themselves. On the other hand, Justice Stewart argued in a 1973 concurring opinion that the government has no First Amendment rights, significantly, maintaining that the Court should not treat broadcasters as state actors because it would \"simply strip\" them of their First Amendment rights. Lower courts have largely followed Justice Stewart's view and assumed that state actors may not claim the protection of the First Amendment. Accordingly, it is possible that treating social media sites like state actors would \"strip [them] of their own First Amendment rights.\" "], "subsections": []}, {"section_title": "Social Media Sites as Broadcasters or Cable Providers", "paragraphs": ["Alternatively, courts could analogize social media sites to certain industries, like broadcast media, where the Supreme Court has traditionally allowed greater regulation of protected speech. These cases have their roots in the common law doctrines related to common carriers. Historically, a common carrier is an entity that \"holds itself out to the public as offering to transport freight or passengers for a fee.\" Often, these companies received government licenses authorizing their operations. Common carriers have traditionally been subject to heightened legal duties and generally could not refuse paying customers. Some of these common law doctrines have been incorporated into modern regulation of communications industries: federal statutes treat providers of telecommunications services as common carriers that are subject to certain requirements, and authorize the regulation of radio and television broadcasters. While acknowledging that these companies are private entities who do retain First Amendment rights, the Supreme Court has nonetheless allowed some regulation of these rights, in light of the heightened government interests in regulating such entities. As one federal appellate court has put it, the general \"absence of any First Amendment concern\" with \"equal access obligations\" in this area \"rests on the understanding that such entities, insofar as they are subject to equal access mandates, merely facilitate the transmission of the speech of others rather than engage in speech in their own right.\" However, courts have not treated all entities equated to common carriers identically."], "subsections": [{"section_title": "Broadcasters", "paragraphs": ["In Red Lion Broadcasting Co. v. FCC , the Supreme Court approved of a specific application of the Federal Communication Commission's (FCC's) \"fairness doctrine.\" The FCC rule challenged in Red Lion required broadcasters to give political candidates a reasonable opportunity to respond to any personal attacks published by the broadcaster or to any editorials in which a broadcaster endorsed or opposed particular candidates. The broadcasters argued that these regulations violated the First Amendment, abridging \"their freedom of speech and press\" by preventing them from \"exclud[ing] whomever they choose\" from their allotted frequencies. ", "The Supreme Court noted the unique nature of the broadcast industry, stating that due to \"the scarcity of radio frequencies,\" \"it is idle to posit an unabridgeable First Amendment right to broadcast comparable to the right of every individual to speak, write, or publish.\" This is why, the Court said, it had previously allowed regulations of broadcast media\u2014namely, a licensing system\u2014that might otherwise violate the First Amendment. The Court emphasized that \"[i]t is the right of the viewers and listeners, not the right of the broadcasters, which is paramount,\" highlighting \"the right of the public to receive suitable access to social, political, esthetic, moral, and other ideas and experiences.\" Ultimately, the Court held that \"[i]n view of the scarcity of broadcast frequencies, the Government's role in allocating those frequencies, and the legitimate claims of those unable without governmental assistance to gain access to those frequencies for expression of their views,\" the challenged regulations were constitutional.", "In subsequent cases, the Supreme Court has reaffirmed that \"of all forms of communication, it is broadcasting that has received the most limited First Amendment protection.\" The Court has recognized that broadcasters do engage in speech activity protected by the First Amendment, most notably when a broadcaster \"exercises editorial discretion in the selection and presentation of its programming.\" The Court has said that \"[a]lthough programming decisions often involve the compilation of the speech of third parties, the decisions nonetheless constitute communicative acts.\" Notwithstanding this conclusion, however, the Court has said that in this area, when evaluating broadcasters' First Amendment claims, it will \"afford great weight to the decisions of Congress and the experience of the [FCC].\""], "subsections": []}, {"section_title": "Cable Television", "paragraphs": ["Significantly, the Supreme Court has declined to extend this special deference to government regulation of broadcasters to other forms of media. For example, in Turner Broadcasting Systems v. FCC , the Court concluded that the \"less rigorous\" First Amendment scrutiny that applies to broadcast regulation should not be extended to the \"regulation of cable television.\" The Court was considering the FCC's \"must-carry\" regulations, which required cable television broadcasters to set aside a portion of their channels for the transmission of local broadcast television stations. The Court said that cable television \"does not suffer from the inherent limitations,\" in terms of the scarcity of frequencies, \"that characterize the broadcast medium,\" consequently concluding that the \"unique physical characteristics of cable transmission . . . . do not require the alteration of settled principles of our First Amendment jurisprudence.\" Accordingly, the Court has subjected laws that restrict cable providers' protected speech to greater scrutiny than restrictions on broadcast media .", "But the Court noted in a subsequent decision that \"[c]able television, like broadcast media, presents unique problems . . . which may justify restrictions that would be unacceptable in other contexts.\" And in Turner Broadcasting itself, the Court did cite \"special characteristics of the cable medium\" to justify applying a lower level of scrutiny. The Court recognized that \"[r]egulations that discriminate among media, or among different speakers within a single medium, often present serious First Amendment concerns\" that trigger strict scrutiny. But notwithstanding this general rule, the Court explained that \"heightened scrutiny is unwarranted where,\" as with the must-carry provisions, the \"differential treatment is 'justified by some special characteristic of' the particular medium being regulated.\" Courts have sometimes interpreted Turner Broadcasting to mean that at least certain types of regulations on cable television will receive less scrutiny than, for example, a regulation affecting speech in a traditional public forum. ", "Ultimately, however, the Turner Broadcasting Court cited two justifications for applying intermediate scrutiny, rather than strict scrutiny, to the FCC's must-carry provisions, making it unclear which rationale the Court relied on to uphold the regulations. Prior to its discussion of cable's special characteristics, the Court concluded that intermediate scrutiny was appropriate because the must-carry provisions were \"content-neutral restrictions that impose[d] an incidental burden on speech.\" The Court noted that while the rules did \"interfere with cable operators' discretion . . . , the extent of the interference [did] not depend upon the content of the cable operators' programming.\" Although the must-carry provisions did \"distinguish between speakers,\" that discrimination was \"based only upon the manner in which speakers transmit their messages to viewers, and not upon the messages they carry,\" and, therefore, the rules were content-neutral on their face. Thus, it is somewhat unclear to what extent the Court's decision to apply intermediate scrutiny in Turner Broadcasting rested on \"special characteristics of the cable medium\" and to what extent it depended on a more overarching First Amendment principle regarding content neutrality."], "subsections": []}, {"section_title": "Treating Social Media Like Broadcast or Cable", "paragraphs": ["While the Supreme Court has identified \"unique problems\" that may justify greater regulation of broadcast and cable, it has expressly held that the factors that justify more extensive regulation of the broadcast media \"are not present in cyberspace.\" In Reno v. ACLU , decided in 1997, the Court said that the internet had not historically \"been subject to the type of government supervision and regulation that has attended the broadcast industry,\" that the internet was not \"as 'invasive' as radio or television\" because a person had to take affirmative action to receive a particular communication on the internet, and that the internet could \"hardly be considered a 'scarce' expressive commodity.\" Consequently, in the Court's view, the factors that justified \"qualifying the level of First Amendment scrutiny that should be applied to\" broadcast media did not apply to the internet. In Reno , the Court ultimately held that two provisions of the CDA that criminalized speech based on its content were unconstitutionally vague and overbroad. ", "Several legal scholars have argued that, contrary to the Court's conclusion in Reno , the internet is analogous to traditional broadcast media and therefore should be subject to greater regulation. Scholars have argued that as the internet has developed, it has \"reproduce[d] the traditional speech-hierarchy of broadcasting\": \"small, independent speakers [are] relegated to an increasingly marginal position while a handful of commercial giants capture the overwhelming majority of users' attention and reemerge as the essential gateways for effective speech.\" Thus, as one scholar argued, \"the hold of certain platforms\" over \"certain mediums of speech\" has \"created scarcity.\" Further, especially as compared to the internet in the late 1990s, when Reno was decided, the internet is \"now more invasive in everyday life\"\u2014arguably more invasive even than television and radio. Another commentator has claimed that rather than traditional broadcast media, search engines might be more analogous to cable providers. In her view, search engines, \"like cable companies,\" \"provide access to the speech of others\" but also \"exercise some degree of editorial discretion over whom they provide access to.\" The analogy may be extended to social media sites, as well, because, like search engines, they also exercise editorial discretion regarding who can post and view content on their sites, and regarding how user-generated content is presented. ", "One lower court rejected these arguments, with respect to search engines, in Zhang v. Baidu .com, Inc . In that case, the plaintiffs argued that Baidu, a Chinese search engine, had violated federal and state civil rights laws by blocking \"from its search results . . . information concerning 'the Democracy movement in China' and related topics.\" Baidu argued that its decisions to block these search results were protected by the First Amendment. The judge noted that \"some scholars\" had argued that under Turner Broadcasting , search-engine results should receive a \"lower level of protection.\" However, in the court's view, the First Amendment \"plainly shield[ed]\" the search engine from this particular lawsuit because the plaintiff's own suit sought \"to hold Baidu liable for, and thus punish Baidu for, a conscious decision to design its search-engine algorithms to favor certain expression on core political subjects over other expression on those same political subjects.\" Accordingly, the court said that \" Turner 's three principal rationales for applying a lower level of scrutiny to the must-carry cable regulations\u2014namely, that cable companies were mere conduits for the speech of others, that they had the physical ability to silence other speakers, and that the regulations at issue were content-neutral\u2014[we]re inapplicable\" to the case before it. The court concluded that Baidu was acting as more than a conduit for others' speech, at least according to the plaintiffs' allegations, that Baidu lacked \"the physical power to silence anyone's voices,\" and that a judicial decision penalizing \"Baidu precisely because of what it does and does not choose to say\" would not be content-neutral. ", "If courts treated social media sites like broadcast media or like cable providers, they would be more likely to uphold government regulation of social media providers. As a preliminary inquiry, a court would likely ask what regulations could be justified by specific characteristics of the regulated medium. If a court believed that the internet in general, or social media in particular, shared relevant characteristics with either traditional broadcast media or with cable providers, then it would be more likely to allow the types of regulations that have traditionally been permitted in those contexts. Thus, a court might ask whether social media sites, like cable companies, exercise a \"bottleneck monopoly power\" or whether, like broadcast television or radio, social media platforms suffer from a \"scarcity\" problem in terms of the number of platforms for speech or are so \"invasive\" as to justify regulation to address these problems. Related, courts might also ask whether the regulations are intended to increase the amount of information or expression available to the public. Thus, if social media sites present distinct problems that threaten the use of the medium for communicative or expressive purposes, courts might approve of regulations intended to solve those problems\u2014particularly if those regulations are content-neutral. These same types of considerations would likely apply both to regulations requiring these platforms to carry certain content and to those requiring the platforms not to carry certain content. But, at least for the time being, without an intervening change in the law, lower courts seem likely to follow Reno and conclude that there is \"no basis for qualifying the level of First Amendment scrutiny that should be applied to\" the internet."], "subsections": []}]}, {"section_title": "Social Media Sites as Editors", "paragraphs": ["The third analogy courts might use to analyze whether social media sites moderating user content are exercising protected speech rights is that of the newspaper editor. In Miami Herald Publishing Co. v. Tornillo , the Supreme Court held that when newspapers \"exercise . . . editorial control and judgment,\" such as choosing what \"material [will] go into a newspaper,\" and making \"decisions . . . as to limitations on the size and content of the paper, and treatment of public issues and public officials,\" they are exercising free speech rights protected by the First Amendment. The Court in that case was considering the constitutionality of a state law that gave political candidates the \"right to reply to press criticism\" of the candidate. A newspaper challenged this statute, arguing that forcing it to print content that it would not otherwise publish violated the First Amendment. The government argued that its law was necessary due to the fact that relatively few news outlets exercised essentially a \"monopoly\" on \"the 'marketplace of ideas.'\" The regulation, in the state's view, \"[e]nsure[d] fairness and accuracy\" and \"provide[d] for some accountability.\" ", "The Supreme Court unanimously rejected this argument, noting that while \"press responsibility\" may be a \"desirable goal,\" it was \"not mandated by the Constitution\" and could not \"be legislated.\" The state law impermissibly \"exact[ed] a penalty on the basis of the content of the newspaper\" by forcing newspapers to spend money to print the replies and by \"taking up space that could be devoted to other material.\" Further, the Court held, \"[e]ven if a newspaper would face no additional costs to comply with a compulsory access law and would not be forced to forgo publication of news or opinion by the inclusion of a reply,\" the law violated the First Amendment \"because of its intrusion into the function of editors.\" Because newspapers exercise \"editorial control and judgment,\" the Court said, they are \"more than a passive receptacle or conduit for news, comment, and advertising,\" and instead engage in protected speech.", "The Court has recognized this First Amendment protection for editorial judgments outside the context of newspapers, stating more generally that \"compelling a private corporation to provide a forum for views other than its own may infringe the corporation's freedom of speech.\" For example, the Supreme Court said in Arkansas Educational Television Commission v. Forbes that \"[w]hen a public broadcaster exercises editorial discretion in the selection and presentation of its programming, it engages in speech activity.\" And in Pacific Gas & Electric Co . v. Public Utilities Commission , the Court recognized that a utility company had a First Amendment interest in selecting the content contained in its monthly newsletter. The Court said in Pacific Gas & Electric Co. that a state regulatory commission could not require the utility to grant access to entities who disagreed with the utility's views. This regulation infringed on the utility company's First Amendment rights by compelling it \"to assist in disseminating the speaker's message\" and by requiring it \"to associate with speech with which [the company] may disagree,\" forcing the company to respond to those arguments. ", "To take another example, in Hurley v. Irish-American Gay, Lesbian and Bisexual Group of Boston , the Court held that the private organizers of a parade had a First Amendment right to exclude the Irish-American Gay, Lesbian and Bisexual Group of Boston (GLIB) from the parade. GLIB had sued the parade organizers, arguing that their exclusion violated Massachusetts's antidiscrimination laws by barring them from a public accommodation on the basis of sexual orientation, and state courts had agreed that GLIB's exclusion violated state law. The parade organizers, however, claimed that the parade was an expressive activity and that forcing them to include GLIB's speech in the parade violated their First Amendment rights. The Supreme Court held first that a parade did qualify as \"protected expression,\" even though most of the speech in the parade was not that of the organizers themselves. The Court said that \"a private speaker does not forfeit constitutional protection simply by combining multifarious voices, or by failing to edit their themes to isolate an exact message as the exclusive subject matter of the speech.\" As an example, the Court noted that \"[c]able operators . . . are engaged in protected speech activities even when they only select programming originally produced by others.\" Accordingly, the Court concluded that the selection of parade participants was protected activity under the First Amendment.", "Consequently, in the Hurley Court's view, characterizing the parade as a public accommodation under the state's antidiscrimination law \"had the effect of declaring the sponsors' speech itself to be the public accommodation,\" and this exercise of state power \"violate[d] the fundamental rule of protection under the First Amendment, that a speaker has the autonomy to choose the content of his own message.\" GLIB argued that this application of the state's public accommodation law should be upheld under Turner Broadcasting , claiming that the parade organizers, \"like a cable operator,\" were \"merely a conduit for the speech of participants in the parade rather than itself a speaker.\" The Court disagreed, saying that unlike the cable operators, \"GLIB's participation would likely be perceived as\" a decision of the parade organizers that GLIB's \"message was worthy of presentation and quite possibly of support as well.\" The better analogy, in the Court's view, was to a newspaper. The Court said that viewers understand that cable programming consists of \"individual, unrelated segments that happen to be transmitted together,\" but in contrast, \"the parade's overall message is distilled from the individual presentations along the way, and each unit's expression is perceived by spectators as part of the whole.\"", "By contrast, the Supreme Court has rejected the application of Tornillo in cases where compelling a private entity to grant access to third parties would not affect the entity's own speech. First, in PruneY ard Shopping Center v. Robins , a private shopping center, PruneYard, had \"a policy not to permit any visitor or tenant to engage in any publicly expressive activity,\" and pursuant to that policy, asked a number of students distributing pamphlets and seeking signatures on petitions to leave. In a suit brought by the students, the California Supreme Court held that PruneYard's action violated state law, holding that the students \"were entitled to conduct their activity on PruneYard property.\" PruneYard argued that this decision violated their own free speech rights, claiming that \"a private property owner has a First Amendment right not to be forced by the State to use his property as a forum for the speech of others.\" The Court rejected this argument, noting that the government was not forcing PruneYard itself to espouse any specific views, and that PruneYard could \"expressly disavow any connection with\" any particular message. The Court said that under the circumstances, \"[t]he views expressed by members of the public\" would \"not likely be identified with those of the owner.\"", "The Court distinguished Tornillo on similar grounds in Rumsfeld v. Forum for Academic and Institutional Rights, Inc. (FAIR) . In that case, a group of law schools represented by FAIR protested the Solomon Amendment, which specified \"that if any part of an institution of higher education denies military recruiters access equal to that provided other recruiters, the entire institution would lose certain federal funds.\" Prior to the passage of the Solomon Amendment, some law schools had restricted military recruiting on campus on the basis that the military, through its \"policy on homosexuals in the military,\" violated the schools' nondiscrimination policies. FAIR argued that forcing the schools to \"disseminate or accommodate a military recruiter's message\" violated their First Amendment rights. The Court first noted that the Solomon Amendment primarily regulated conduct and only incidentally compelled speech, in the form of recruiting assistance such as sending emails or posting notices. ", "Further, the Court held that \"accommodating the military's message does not affect the law schools' speech, because the schools are not speaking when they host interviews and recruiting receptions.\" Distinguishing Hurley , the Court said that \"[u]nlike a parade organizer's choice of parade contingents, a law school's decision to allow recruiters on campus is not inherently expressive.\" The Court said that \"the expressive component\" of the schools' decisions to bar military recruiters was \"not created by the conduct itself but by the speech that accompanies it.\" Instead, as in PruneYard , the Court said that \"[n]othing about recruiting suggests that law schools agree with any speech by recruiters,\" noting that the schools remained free to state that they disagreed with the military's policies.", "A number of federal trial courts have applied Tornillo to hold that search engines exercise editorial judgment protected by the First Amendment when they make decisions about whether and how to present specific websites or advertisements in search results. For example, in Zhang v. Baidu.com, Inc. , the trial court noted that when search engines \"retrieve relevant information from the vast universe of data on the Internet and . . . organize it in a way that would be most helpful to the searcher,\" they \"inevitably make editorial judgments about what information (or kinds of information) to include in the results and how and where to display that information.\" Ultimately, the court held that the plaintiff's \"efforts to hold Baidu accountable in a court of law for its editorial judgments about what political ideas to promote cannot be squared with the First Amendment.\" ", "In line with this view, some scholars have maintained that search engine results represent protected speech because search engines make editorial judgments, \"reporting about others' speech\" in a way that \"is itself constitutionally protected speech. Others have pointed out, however, that such actions would likely be protected only insofar as they do communicate something to listeners. Thus, some scholars have argued that search results\u2014at least if those results are automated \"and experienced as 'objective'\"\u2014would not be protected under the First Amendment because the \"dominant function\" of these results \"is not to express meaning but rather to 'do things in the world'; namely, channel users to websites.\" On this issue, the court in Zhang , said that, given governing Supreme Court precedent, \"the fact that search engines often collect and communicate facts, as opposed to opinions, does not alter the analysis\": \"As the Supreme Court has held, 'the creation and dissemination of information are speech within the meaning of the First Amendment. Facts, after all, are the beginning point for much of the speech that is most essential to advance human knowledge and to conduct human affairs.'\" Reaching the same result through different reasoning, a different district court held that Google's \"PageRanks,\" which rank \"the relative significance of a particular web site as it corresponds to a search query,\" were protected under the First Amendment as subjective opinions.", "Commentators have argued that Tornillo should apply when, for example, Facebook promotes certain viewpoints over others, as Facebook is exercising editorial judgment about how to present constitutionally protected speech. The trial court's opinion in Zhang suggests that social media sites would be engaging in protected speech insofar as they, like search engines, \"make editorial judgments about what information (or kinds of information)\" to display \"and how and where to display that information.\" On the other hand, the Supreme Court's decision in FAIR suggests that under some circumstances, an entity's decision \"to allow\" third parties to use their platforms might not be expressing a particular view. As with search results, one critical question may be whether the content presentation decisions themselves are communicative or expressive, or whether instead they only take on an expressive meaning when combined with other speech. ", "Related to the question of whether content presentation decisions themselves are expressive, one possible argument against extending the editorial analogy to social media sites is that users would be unlikely to attribute users' speech to the social media sites. In Tornillo itself, the Court held that the newspapers' editorial judgments were protected under the First Amendment without expressly analyzing whether readers would attribute the published content to the newspaper. One significant factor in the Supreme Court's various decisions about whether to extend First Amendment protection to the groups hosting others' speech was whether listeners would be likely to attribute that speech to the host, such as the parade organizer, in Hurley , the shopping center, in PruneY ard , or the law schools, in FAIR . ", "Accordingly, courts may be less likely to conclude that social media sites' decisions regarding users' content are protected by the First Amendment if third parties would be unlikely to attribute users' speech to the social media sites themselves. Whether third parties would attribute user-generated content to social media platforms will likely depend on the particular site or activity being regulated. In particular, where platforms aggregate or alter user-generated content, users may be more likely to see that as the platforms' speech. If the sites aggregate user-generated content, courts may ask, as in Hurley , whether viewers would understand that content to \"consist of individual, unrelated segments\" that are \"neutrally presented,\" or whether instead viewers would understand that each segment \"is understood to contribute something to a common theme,\" and that the aggregate communicates an \"overall message.\" Accordingly, if a site aggregates content into a single story, courts might hold that the sites are acting as more than a mere \"conduit for speech produced by others.\" By contrast, if a site published all user content without restrictions, users' communications, like \"the views expressed by members of the public\" in PruneY ard , might not reasonably be \"identified\" as the views \"of the owner.\" So far, the trial court decisions extending the editorial analogy to search engines have not analyzed this issue in significant detail.", "If social media sites were considered to be equivalent to newspaper editors when they make decisions about whether and how to present users' content, then those editorial decisions would protected by the First Amendment. Any government regulation of those protected editorial functions that forced social media sites to host content that they would not otherwise transmit, or otherwise restricting those sites' \"autonomy to choose the content\" of their \"own message,\" would likely be subject to strict scrutiny. Similarly, regulations requiring social media providers not to publish protected speech on the basis of the speech's content, or punishing them for publishing that speech, might also be subject to strict scrutiny. To satisfy strict scrutiny, the government must show that the speech restriction \"furthers a compelling interest and is narrowly tailored to achieve that interest.\" Government actions are unlikely to be upheld if a court applies strict scrutiny. Nevertheless, the Supreme Court has, in rare instances, said that the government may \"directly regulate speech to address extraordinary problems, where its regulations are appropriately tailored to resolve those problems without imposing an unnecessarily great restriction on speech.\"", "Additionally, even if a court held that social media sites' editorial decisions are protected under the First Amendment, it might review a government regulation affecting those decisions under a lower level of scrutiny if the regulation is content-neutral. Even in a traditional public forum, the government may impose \"reasonable time, place and manner restrictions\" on speech. Thus, for example, the Supreme Court has said that while the government may regulate noise by \"regulating decibels\" or \"the hours and place of public discussion,\" it may not bar speech solely \"because some persons were said to have found the sound annoying.\" Accordingly, courts may uphold government regulations if they have only an incidental effect on speech, \"serve a substantial governmental interest,\" and do not \"burden substantially more speech than is necessary to further that interest.\" "], "subsections": []}]}]}, {"section_title": "Considerations for Congress", "paragraphs": ["The permissibility of federal regulation of social media sites will turn in large part on what activity is being regulated. To the extent that federal regulation specifically targets communicative content\u2014that is, speech\u2014or social media platforms' decisions about whether and how to present that content, that regulation may raise constitutional questions. While the Supreme Court has not yet weighed in on the question, lower courts have held that when search engines make decisions regarding the presentation of search results, they are exercising editorial functions protected as speech under the First Amendment. If this reasoning were to be extended to social media sites' decisions regarding the presentation of users' content, Congress's ability to regulate those decisions would be relatively limited. ", "However, even assuming that Congress were to regulate the protected speech of social media companies, this would not necessarily doom a regulation. If, for example, the particular speech being regulated is commercial speech, such as advertisements, the regulation would likely be evaluated under a lower level of scrutiny. In addition, the Court has recognized certain, relatively limited categories of speech that can be more readily regulated: \"For example, speech that is obscene or defamatory can be constitutionally proscribed because the social interest in order and morality outweighs the negligible contribution of those categories of speech to the marketplace of ideas.\" But even with respect to these categories of speech, the government may violate the First Amendment if it engages in further content or viewpoint discrimination within that category. Thus, the Supreme Court has said as an example that while \"the government may proscribe libel,\" \"it may not make the further content discrimination of proscribing only libel critical of the government.\" In addition, if the law imposes criminal liability, the Court may require a mental state requirement, so that, for example, the government has to prove that the defendant knew the speech was obscene.", "Courts will also apply a lower level of scrutiny to content-neutral regulations. A content-neutral law that regulates only \"the time, place, or manner of protected speech\" may be constitutional if it is \"narrowly tailored to serve a significant governmental interest.\" If a law is not only content-neutral but also focused primarily on regulating conduct, imposing only an incidental burden on speech, a court will uphold the regulation if \"it furthers an important or substantial governmental interest; if the governmental interest is unrelated to the suppression of free expression; and if the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest.\" Thus, for example, in Turner Broadcasting , the Supreme Court held that the FCC's must-carry provisions should be reviewed under an intermediate standard, rather than under strict scrutiny, because the rules were content-neutral: their application did not depend on \"the content of the cable operators' programming\" or the messages of the speakers carried. And in FAIR , the Court upheld the Solomon Amendment under intermediate scrutiny after concluding that the law regulated conduct that was not \"inherently expressive\" and only incidentally burdened speech. The Court said that the law did \"not focus on the content of a school's recruiting policy,\" but on \"the result achieved by the policy.\" ", "Additionally, if Congress highlights \"special characteristics\" of social media to justify heightened regulation, courts may be more willing to uphold those regulations. Although the Supreme Court in Reno rejected certain \"special justifications\" that the government argued should allow greater regulation of the internet at large, some have argued that special characteristics of social media might justify limited regulation to address those issues, particularly if those justifications are distinct from the ones rejected in Reno , or if there is evidence that conditions have changed since that decision was issued. To date, however, no courts have found that such special justifications exist, let alone approved of regulations addressing those issues.", "Finally, Congress may consider how any new regulation would fit into the existing legal framework of the CDA's Section 230. Section 230 creates immunity from most civil lawsuits that seek to treat service providers as the \"publisher or speaker\" of content created by another, and also provides that interactive service providers may not be held liable for taking good faith action to restrict access to content that the provider or users deem \"obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable.\" Insofar as any new federal regulations would subject social media providers to liability for publishing content created by users, or for restricting access to that content, those regulations might conflict with Section 230, and Congress may consider expressly setting out the relationship between those new regulations and Section 230. As a general principle of law, courts are reluctant to imply that new statutes repeal prior laws unless the \"two statutes are in 'irreconcilable conflict,' or . . . the latter act covers the whole subject of the earlier one and 'is clearly intended as a substitute.'\" Accordingly, if a new law does not explain how it relates to Section 230, courts will attempt to read the statutes harmoniously, giving effect to both.", "If Congress were to create an express exception from Section 230, one issue would be determining the proper scope of that exception, so that Congress is allowing liability only for certain specific activity that it is seeking to discourage. Section 230 was enacted, in part, in response to a trial court decision ruling that an internet service provider should be considered a \"publisher\" of defamatory statements that a third party had posted on a bulletin board that it hosted, and could therefore be subject to suit for libel. Critical to the court's decision was the fact that the service provider had moderated its message boards, qualifying the site as a publisher for purposes of the libel claim in the view of the court. By specifying that no provider of an interactive computer service \"shall be treated as the publisher or speaker\" of another's content, Congress sought, among other things, to overturn this decision. A number of Representatives, including one of the bill's sponsors, said at the time that they wanted to ensure that \"computer Good Samaritans\" would not \"tak[e] on liability\" by regulating offensive content. As discussed, courts subsequently interpreted this provision to bar liability for a wide variety of legal claims, not solely suits for defamation. Section 230, enacted in 1996, has often been described as central to the development of the modern internet. One scholar asserted that \"no other sentence in the U.S. Code . . . has been responsible for the creation of more value than that one.\" Therefore, while Congress may want to modify this broad immunity, it is important to first understand how that immunity currently operates, and why it was created in the first place."], "subsections": []}]}}
{"id": "R40589", "title": "Concurrent Receipt: Background and Issues for Congress", "released_date": "2019-01-17T00:00:00", "summary": ["Concurrent receipt refers to the simultaneous receipt of two types of federal monetary benefits: military retired pay and Department of Veterans Affairs (VA) disability compensation. Prior to 2004, existing laws and regulations dictated that a military retiree could not receive two payments from federal agencies for the same purpose. As a result, military retirees with physical disabilities recognized by the VA would have their military retired pay offset or reduced dollar-for-dollar by the amount of their nontaxable VA compensation. Legislative activity on the issue of concurrent receipt began in the late 1980s and culminated in the provision for Combat-Related Special Compensation (CRSC) in the Bob Stump National Defense Authorization Act for Fiscal Year 2003 (P.L. 107-314). Since then, Congress has added Concurrent Retirement and Disability Payments (CRDP) for those retirees with a disability rated at 50% or greater, extended concurrent receipt to additional eligible populations, and further refined and clarified the program.", "There are two common criteria that define eligibility for concurrent receipt: (1) all recipients must be military retirees and (2) they must also be eligible for VA disability compensation. An eligible retiree cannot receive both CRDP and CRSC. The retiree must choose whichever is most financially advantageous to him or her and may change the type of benefit to be received during an annual open season.", "In FY2017, approximately one-third of the retired military population was receiving either CRSC or CRDP at a cost of $12.4 billion. Nevertheless, there are also military retirees who receive VA disability compensation but are not eligible for concurrent receipt. Determining whether to make some or all of this population eligible for concurrent receipt remains a point of contention in Congress. The Congressional Budget Office (CBO) has estimated that to extend benefits to all veterans who would be eligible for both disability benefits and military retired pay would cost $30 billion from 2015 to 2024. In 2016, CBO estimated that eliminating concurrent receipt would save the government $139 billion between 2018 and 2026."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Concurrent receipt refers to the simultaneous receipt of two types of monetary benefits: military retired pay and Department of Veterans Affairs (VA) disability compensation. With several separate programs, varying eligibility criteria, and several eligibility dates, some observers find the subject complex and somewhat confusing. There are, however, two common criteria: first, all recipients are military retirees; second, they are also eligible for VA disability compensation. This report addresses the two primary components of the concurrent receipt program: Combat-Related Special Compensation (CRSC) and Concurrent Retirement and Disability Payments (CRDP). It reviews the possible legislative expansion of the program to additional populations and provides several potential options for Congress to consider."], "subsections": [{"section_title": "Background", "paragraphs": ["In 1891, Congress first prohibited payment of both military retired pay and a disability pension under the premise that it represented dual or overlapping compensation for the same purpose. The original law was modified in 1941, and the present system of VA disability compensation offsetting military retired pay was adopted in 1944. Under this system, retired military personnel were required to waive a portion of their retired pay equal to the amount of VA disability compensation, a dollar-for-dollar offset. If, for example, a military retiree received $1,500 a month in retired pay and was rated by the VA as 70% disabled (and therefore entitled to approximately $1,000 per month in disability compensation), the offset would operate to pay $500 monthly in retired pay and the $1,000 in disability compensation. The advantage for the retiree was that VA disability compensation was not taxable. For many years some military retirees and advocacy groups sought a change in law to permit receipt of all, or some, of both payments. Opponents of concurrent receipt frequently referred to it as double dipping , maintaining that it represented two payments for the same condition.", "In the FY2003 NDAA ( P.L. 107-314 ), Congress created a benefit known as Combat Related Special Compensation (CRSC). CRSC provided, for certain disabled retirees whose disability is combat-related, a cash benefit financially identical to what concurrent receipt would provide them. The FY2004 NDAA ( P.L. 108-136 ) authorized, for the first time, the phase-in of actual concurrent receipt (now referred to as Concurrent Retirement and Disability Payments or CRDP), and a greatly expanded CRSC program. The FY2005 NDAA ( P.L. 108-375 ) further liberalized the concurrent receipt rules contained in the FY2004 NDAA and authorized immediate concurrent receipt for those rated by the VA totaling 100%. The FY2008 NDAA ( P.L. 110-181 ) expanded concurrent receipt eligibility to include those who are 100% disabled due to unemployability and provided CRSC to those who were medically retired or retired prematurely due to force reduction programs prior to completing 20 years of service. CRDP phase-in was fully implemented by 2014, allowing retirees with a disability rated at 50% or greater to receive full retired pay and full VA disability compensation without an offset."], "subsections": []}]}, {"section_title": "Military Retirement and VA Disability Compensation", "paragraphs": ["An understanding of military retirement, VA disability compensation, and the interaction of these two elements is helpful in discussing concurrent receipt. "], "subsections": [{"section_title": "Military Retirement", "paragraphs": ["An active duty servicemember becomes entitled to retired pay, frequently referred to as vesting , upon completion of 20 years of service, regardless of age. A member who retires is immediately paid a monthly annuity based on a percentage of their final base pay or the average of their high three years of base pay, depending on when they entered active duty. Retired pay accrues at the rate of 2.5% per year of service for those who have entered the service prior to January 1, 2018, and 2.0% for those entering service on or after January 1, 2018. An alternative retirement option, known as \"Redux,\" was also available for certain active duty servicemembers, depending on their date of entry. "], "subsections": [{"section_title": "Reserve Retirement", "paragraphs": ["Reserve component servicemembers also become eligible for retirement upon completion of 20 years of qualifying service, regardless of age. However, their retired pay calculation is based on a point system that results in a number of \"equivalent years\" of service. In addition, a reserve component retiree does not usually begin receiving retired pay until reaching age 60."], "subsections": []}, {"section_title": "Disability Retirement", "paragraphs": ["While retirement eligibility at 20 years of service is the norm for active component members and age 60 for reserve component members, there are some circumstances that result in earlier retirement. Servicemembers found to be unfit for continued service due to physical disability may be retired if the condition is permanent and stable and the disability is rated by DOD as 30% or greater. These retirees are generally referred to as Chapter 61 retirees , a reference to Chapter 61 of Title 10, which covers disability retirement. As a result, some disability retirees are retired before becoming eligible for longevity retirement while others have completed 20 or more years of service.", "A servicemember retired for disability may select one of two available options for calculating their monthly retired pay:", "1. Longevity Formula. Retired pay is computed by multiplying the years of service times 2.5% or 2.0% (respectively based on a date of entry into service before or after Jan 1, 2018) and then times the pay base. Monthly Retired Pay= (years of service x 2.5% or 2.0%) x (pay base) 2. Disability Formula. Retired pay is computed by multiplying the DOD disability percentage by the pay base. Monthly Retired Pay= disability % x (pay base)", "The maximum retired pay calculation under either formula cannot exceed 75% of base pay. The retired pay computed under the disability formula is fully taxed unless the disability is the result of a combat-related injury. Since the disability percentage method usually results in higher retired pay, it is most commonly selected. Generally, military retired pay based on longevity is taxable. In certain instances, a portion of disability retired pay may be tax-free."], "subsections": []}, {"section_title": "Temporary Early Retirement Authority (TERA)", "paragraphs": ["Personnel retired due to force management requirements and before completing 20 years of service are generally referred to as \"TERA retirees\" because the National Defense Authorization Act for Fiscal Year 1993 granted Temporary Early Retirement Authority (TERA) as a manpower tool to entice voluntary retirements during the drawdown of the early 1990s. This authority was in effect from 1992 to 2001. TERA retired pay is calculated in the same way as longevity retirement, but there is a retired pay reduction of 1% for every year of service below 20."], "subsections": []}]}, {"section_title": "VA Disability Compensation", "paragraphs": ["To qualify for VA disability compensation, the VA must make a determination that the veteran sustained a particular injury or disease, or had a preexisting condition aggravated, while serving in the Armed Forces. Some exceptions exist for certain conditions that may not have been apparent during military service but which are presumed to have been service-connected. The VA has a scale of 10 ratings, from 10% to 100%, although there is no direct arithmetic relationship between the amounts of money paid for each step. Each percentage rating entitles the veteran to a specific level of disability compensation. In a major difference from the DOD disability retirement system, a veteran receiving VA disability compensation can ask for a medical reexamination at any time (or a veteran who does not receive disability compensation upon separation or retirement from service can be examined or reexamined later).", "All VA disability compensation is tax-free, which makes receipt of VA compensation desirable, even with the operation of the offset. As a general rule of thumb, DOD pays for longevity while the VA pays for disability."], "subsections": []}, {"section_title": "Interaction of DOD and VA Disability Benefits12", "paragraphs": ["As veterans, military retirees can apply to the VA for disability compensation. A retiree may (1) apply for VA compensation any time after leaving the service and (2) have his or her degree of disability changed by the VA as the result of a later medical reevaluation, as noted above. Many retirees seek benefits from the VA years after retirement for a condition that may have been incurred during military service but that does not manifest itself until many years later. Typical examples include hearing loss, some cardiovascular problems, and conditions related to exposure to Agent Orange.", "The DOD and VA disability rating systems have much in common, but there are also significant differences. DOD makes a determination of eligibility for disability retirement only once, at the time the individual is separating from the service. Although DOD uses the VA rating schedule to determine the percentage of disability, DOD measures disability, or lack thereof, against the extent to which the individual can or cannot perform military duties. Military disability retired pay, but not VA disability compensation, is usually taxable, unless related to a combat disability.", "As a result of the current disability process, a retiree can have both a DOD and a VA disability rating and these ratings will not necessarily be the same percentage. The percentage determined by DOD is used to determine fitness for duty and may result in the medical separation or disability retirement of the servicemember. The VA rating, on the other hand, was designed to reflect the average loss of earning power. Studies over the past several years have consistently recommended a single, comprehensive medical examination that would establish a disability rating that could be used by both DOD and the VA. ", "The National Defense Authorization Act for Fiscal Year 2008 required a joint DOD and VA report on the feasibility of consolidating disability evaluation systems to eliminate duplication by having one medical examination and a single-source disability rating. As a result, DOD and the VA initiated a one-year pilot program, now called the Integrated Disability Evaluation System (IDES), at the Walter Reed Army Medical Center, the National Naval Medical Center at Bethesda, and the Malcolm Grove Medical Center at Andrews Air Force Base. The program was expanded to other sites in 2009 and 2010, and since September 2011 all new disability retirement cases at facilities worldwide have been processed through IDES.", "As IDES streamlined the disability evaluation process, DOD and VA now focus on improving health care data and records sharing, a process deemed \"vital to Service members who are leaving the DOD system with complex medical issues and ongoing health care needs.\" In September 2018, DOD and VA issued a joint statement indicating their commitment to implement an integrated electronic health system that will allow for seamless sharing of health care data between both departments and aid the disability rating process. "], "subsections": []}]}, {"section_title": "Combat-Related Special Compensation (CRSC)", "paragraphs": ["The FY2003 NDAA, as amended by the FY2004 NDAA, authorized Combat-Related Special Compensation (CRSC). Military retirees with at least 20 years of service and who meet either of the following two criteria are eligible for CRSC:", "A disability that is \"attributable to an injury for which the member was awarded the Purple Heart,\" and is not rated as less than a 10% disability by the VA; or A disability rating resulting from involvement in \"armed conflict,\" \"hazardous service,\" \"duty simulating war,\" or \"through an instrumentality of war.\" ", "This liberal definition of combat-related encompasses disabilities associated with any kind of hostile force; hazardous duty such as diving, parachuting, or using dangerous materials such as explosives; individual training and unit training and exercises and maneuvers in the field; and \"instrumentalities of war.\" ", "Retirees must apply for CRSC to their parent service, and the parent service is responsible for verifying that the disability is combat-related. This process is not automatic; it is application-driven. CRSC payments will generally be equal to the amount of VA disability compensation that has been determined to be combat-related. The legislation does not end the requirement that the retiree's military retired pay be reduced by the amount of the total VA disability compensation the retiree receives. Instead, CRSC beneficiaries are to receive the financial equivalent of concurrent receipt as \"special compensation,\" but the statute states explicitly that it is not retired pay per se. CRSC payments are paid from the Department of Defense Military Retirement Fund. As of September 2017, a total of 90,740 retirees were receiving CRSC (see Figure 1 )."], "subsections": [{"section_title": "CRSC for Military Disability (Chapter 61) and TERA Retirees", "paragraphs": ["Servicemembers with a permanent DOD disability rating of 30% or greater may be retired and receive retired pay prior to completing 20 years of service. These retirees are generally referred to as \"Chapter 61\" retirees, a reference to Chapter 61, Title 10, which governs disability retirement. In addition to the Chapter 61 retirees with less than 20 years of service, those who voluntarily retired under the Temporary Early Retirement Authority (TERA) during the military drawdown of the early to mid-1990s also have less than 20 years of service. The original CRSC legislation excluded those active duty members who retired with less than 20 years of service.", "However, the FY2008 NDAA expanded CRSC to include Chapter 61 and active duty TERA retirees effective January 1, 2008. Eligibility no longer requires a minimum number of years of service or a minimum disability rating (other than the 30% noted above for disability retirement); a 10% VA rating may qualify if it is combat-related. Eligible retirees must still apply to their parent service to validate that the disability is combat-related. ", "The FY2008 NDAA included almost all reserve disability retirees in the eligible CRSC population except those retired under 10 U.S.C. 12731b, a special provision which allows reservists with a physical disability not incurred in the line of duty to retire with between 15 and 19 creditable years of service."], "subsections": [{"section_title": "The \"Special Rule\" for Disability Retirees", "paragraphs": ["As noted earlier, an individual generally cannot receive two separate lifelong government annuities from federal agencies for the same purpose or qualifying event, for example, disability retired pay and VA disability compensation. To preclude this, there is a \"special rule\" for Chapter 61 disability retirees. Application of the special rule caps the CRSC at the level to which the retiree could have qualified based solely on years of service or longevity. In some instances, the special rule could limit or completely eliminate the concurrent receipt payment. In other instances, application of the rule may not result in any changes. Each situation is unique (rank, years of service, DOD and VA disability ratings, and the disability percentage attributable to combat) and requires independent calculations.", "It appears that those most vulnerable to the reduction of CRSC due to the special rule would be active duty servicemembers with a disability retirement, significantly less than 20 years of service, and a high VA disability rating. Others potentially impacted would be reserve members with little active duty."], "subsections": []}]}, {"section_title": "CRSC for Reserve Retirees", "paragraphs": ["When CRSC was originally enacted in 2002, it required all applicants to have at least 20 years of service creditable for computation of retired pay. As a result, reserve retirees had to have at least 7,200 reserve retirement points to be eligible for CRSC. As noted earlier, a reservist receives a certain number of retirement points for varying levels of participation in the reserves, or active duty military service. The 7,200-point figure was extraordinarily high; it could only have been attained by a reservist who had many years of active duty military service in addition to a long reserve career. Initially this law, as enacted, effectively denied CRSC to almost all reservists.", "However, a provision in the FY2004 NDAA clarified the service requirement for reserve component personnel. It specified that personnel who qualify for reserve retirement by having at least 20 years of duty creditable for reserve retirement are eligible for CRSC. While eligible for CRSC, reserve retirees must be drawing retired pay (generally at age 60) to actually receive the CRSC payment."], "subsections": []}, {"section_title": "CRSC Eligibility Summary", "paragraphs": ["Essentially, with the exception of reserve component members injured while not in a duty status, all military retirees who have been awarded a Purple Heart or have combat-related disabilities compensable by the VA are eligible for CRSC (see Figure 2 ). Military retirees with service-connected disabilities which are not combat-related as defined by the statute are not eligible for CRSC, but may be eligible for CRDP as discussed below."], "subsections": []}]}, {"section_title": "Concurrent Retirement and Disability Payments (CRDP)", "paragraphs": ["The FY2004 NDAA authorized, for the first time, actual concurrent receipt for retirees with at least a 50% disability, regardless of the cause of disability. However, the amount of concurrent receipt was to be phased in over a 10-year period, from 2004 to 2013, except for 100% disabled retirees, who became entitled to immediate concurrent receipt effective January 1, 2005. Depending on the degree of disability, the initial amount of retired pay that the retiree could have restored would vary from $100 to $750 per month, or the actual amount of the offset, whichever was less. In 2014, all offsets ended and military retirees with at least a 50% disability became eligible to receive their entire military retired pay and VA disability compensation. In FY2017 there were 577,399 retirees receiving CRDP.", "A retiree cannot receive both CRSC and CRDP benefits. The retiree may choose whichever is more financially advantageous to him or her and may change the type of benefit to be received during an annual o pen s eason to maximize the payments received. There are currently two groups of retirees who are not eligible for CRDP benefits (see Figure 4 ). The first group is nondisability military retirees with service-connected disabilities that have been rated by the VA at 40% or less. The second group includes Chapter 61 disability retirees with service-connected disabilities of 100% or less and with less than 20 years of service."], "subsections": [{"section_title": "CRDP for Temporary Early Retirement Authority (TERA) Retirees", "paragraphs": ["The National Defense Authorization Act for Fiscal Year 1993 granted temporary authority (which expired on September 30, 2001) for the services to offer early retirements to personnel with more than 15 but less than 20 years of service. TERA was used as a manpower tool to entice voluntary retirements during the post-Cold War drawdown. TERA retired pay was calculated in the usual way except that there is an additional reduction of 1% for every year of service below 20. Part or all of this latter reduction could be restored if the retiree worked in specified public service jobs (such as law enforcement, firefighting, and education) during the period immediately following retirement, until the point at which the retiree would have reached the 20-year mark if he or she had remained in the service.", "TERA retirees are eligible for CRSC and CRDP even though they have less than 20 years of service. The \"special rule\" for disability retirees (discussed below) does not apply to TERA retirees since TERA was not a disability retirement, but rather a regular retirement but for those with less than 20 years of service."], "subsections": []}]}, {"section_title": "Concurrent Receipt and Blended Retirement System Lump Sum Payments", "paragraphs": ["The Blended Retirement System (BRS), effective for all servicemembers joining on or after January 1, 2018, offers servicemembers the option to select a lump sum payment of a portion of their military retired pay in lieu of a monthly annuity. If a member retiring under the BRS is eligible for CRDP and elects the lump sum payment of retired pay, the individual will continue to receive a monthly VA disability payment. If the member electing the lump sum payment is not eligible for CRDP (i.e., the retired pay offset applies), the VA will withhold disability payments until the sum of the amount withheld over time equals the gross amount of the lump sum payment. If the member is eligible for CRSC, the procedures for withholding VA disability payments relate to the combat-related portion of the total VA entitlement."], "subsections": []}, {"section_title": "CRSC and CRDP Comparisons and Costs", "paragraphs": ["CRSC and CRDP share some common elements, but are unique benefits. Table 1 summarizes some of the similarities and differences between CRSC and CRDP.", "CRDP and CRSC are paid from the DOD Military Retirement Fund. Costs have been rising every year as a consequence of the phased implementation and a rise in the number of eligible recipients. As of September 2017, one-third of all military retirees collecting retired pay were receiving either CRDP or CRSC. "], "subsections": []}, {"section_title": "Issues and Options for Congress", "paragraphs": ["Veteran advocacy groups continue to lobby for changes to the concurrent receipt programs that would expand benefits to a larger population of retirees. Other groups have pressed Congress to offset or streamline duplicative benefits, contending that the dual receipt of VA and DOD payments amounts to double-dipping , or in some cases triple-dipping for those veterans also eligible for Social Security Disability Insurance (SSDI) from the Social Security Administration. ", "Some of the factors that Congress might consider regarding potential changes include program costs, program efficiencies, individual eligibility requirements, and interaction with other servicemembers' and veterans' benefits and programs. Below are some options to change concurrent receipt programs that have been proposed or considered."], "subsections": [{"section_title": "Eliminate or Sunset Concurrent Receipt Programs", "paragraphs": ["The Congressional Budget Office has estimated that eliminating the CRDP program would save the government $139 billion between 2018 and 2026. While achieving significant cost savings, eliminating or sunsetting concurrent receipt programs could be unpopular among servicemembers, veterans, and their families. Previous efforts to reduce benefits to servicemembers have typically included a grandfather clause that would allow all current servicemembers and retirees to maintain existing benefits while the law would only apply to those who joined the service after a specific date."], "subsections": []}, {"section_title": "Extend CRDP to Chapter 61 Disability Retirees with Less Than 20 Years of Service", "paragraphs": ["As previously discussed, the FY2008 NDAA extended CRSC eligibility to Chapter 61 retirees who retired due to combat-related physical disability prior to completing 20 years of service. However, Chapter 61 retirees with service-connected disabilities rated less than 50% or with less than 20 years of service are not eligible for CRDP. Congress could expand the CRDP provision to include this cohort. This option would extend CRDP eligibility to approximately 100,000 additional disability retirees at an estimated 10-year cost of $5.8 billion."], "subsections": []}, {"section_title": "Extend CRDP to Those with a 40% or Less VA Disability Rating", "paragraphs": ["At present, those military retirees with service-connected disabilities rated at 50% or greater are eligible for CRDP. Congress could revise the concurrent receipt legislation to include the entire population of military retirees with service-connected disabilities. In 2014, CBO estimated that to extend benefits to all veterans who would be eligible for both disability benefits and military retired pay would cost $30 billion from 2015 to 2024."], "subsections": []}, {"section_title": "Modify or Eliminate the Special Rule", "paragraphs": ["With the extension of CRSC to Chapter 61 disability retirees, the special rule factors significantly into the concurrent receipt calculations. For those whose CRSC payment is limited or eliminated by the special rule , there may be a perceived inequity between CRSC recipients with 20 or more years of service (longevity retirees) and Chapter 61 (disability retirees who generally have less than 20 years of service) retirees.", "To resolve this potential issue, Congress could modify or eliminate the special rule or limit its application to specific military operations. However, some observers may note that eliminating or modifying the special rule would result in paying for the same disability twice, by DOD and by VA. It might also complicate future initiatives to simplify and streamline postservice compensation whereby DOD would only compensate for years of service and the VA would only compensate for disability, as recommended by the Dole/Shalala commission. "], "subsections": []}]}]}}
{"id": "R45615", "title": "International Trophy Hunting", "released_date": "2019-03-20T00:00:00", "summary": ["International trophy hunting is a multinational, multimillion-dollar industry practiced throughout the world. Trophy hunting is broadly defined as the killing of animals for recreation with the purpose of collecting trophies such as horns, antlers, skulls, skins, tusks, or teeth for display. The United States imports the most trophies of any country in the world. Congressional interest in trophy hunting is related to the recreational and ethical considerations of hunting and the potential consequences of hunting for conservation. For some, interest in trophy hunting centers on particular charismatic species, such as African lions, elephants, and rhinoceroses. Congress's role in addressing international trophy hunting is limited, because hunting is regulated by laws of the range country (i.e., the country where the hunted species resides). However, Congress could address trophy hunting through actions such as regulating trophy imports into the United States or providing funding and technical expertise to conserve hunted species in range countries.", "International trophy hunting generates controversy because of its potential costs and benefits to conservation, ethical considerations, and its contribution to local economies in range states. Proponents of trophy hunting contend that the practice provides an estimated millions of dollars for the conservation of species in exchange for the hunting of a proportionally small number of individuals. Further, they argue that trophy hunting can create incentives for conserving habitat and ecosystems where hunted animals roam and, in some impoverished areas in range countries, can provide a means of income, employment, and community development. Critics of trophy hunting contend that the practice can lead to the decline of rare and endangered species and that the pathway of moving funds from hunting to conservation can be fraught with corruption and mismanagement. Further, some contend it is unethical to kill animals for sport, or at all, and that animals should not be valued according to how much a hunter would pay to hunt them.", "The international community, including the United States, has laws and regulations related to international trophy hunting. The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) is an international agreement that creates a series of incrementally more stringent restrictions on imports and exports of wildlife, depending on the sustainability of such trade. The European Union (EU) also addresses trophy hunting through regulating trade of trophies, issuing permits for trade of trophies, and suspending certain species from trade with the EU if the species is in peril. In the United States, international trophy hunting is addressed by several laws, including the Endangered Species Act (ESA; 16 U.S.C. \u00a7\u00a71531-1543), which implements CITES. ESA does not regulate trophy-hunting activities within range countries directly; rather, the law governs what can be imported into the United States. The U.S. Fish and Wildlife Service (FWS) regulates trophy hunting, in part, by issuing permits to import trophies of species that are listed as threatened or endangered under ESA.", "Congress could address international sport hunting by regulating trophy imports and funding conservation and research activities overseas, among other options. Some activities that Congress could consider, according to observers, include", "directing the U.S. government to work with foreign governments and partners to monitor hunting practices and game species to help ensure a positive impact from trophy hunting in range states; creating uniform standards for evaluating trophy import permits, specifically whether trophy hunting could enhance the survival of a population as addressed under ESA or be nondetrimental to a population as defined by CITES; mandating that permit applications and decisions be made publicly available; and creating an independent third-party certification system to evaluate trophy hunting operations.", "Congress also might evaluate alternatives to trophy hunting in the wild. In Africa, for example, some countries have banned trophy hunting altogether and support wildlife viewing and tourism in its place. Some countries, such as South Africa, have large, fenced game ranches where animals can be hunted in a practice called captive hunting. Some contend these operations do not allow for fair chase hunting (i.e., hunting wild animals without boundaries) or contribute to conservation, whereas others argue that they facilitate wildlife management and reduce poaching."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["International trophy hunting is a multinational, multimillion-dollar industry practiced in countries on almost every continent. Trophy hunting is broadly defined as the killing of animals for recreation with the purpose of collecting trophies such as horns, antlers, skulls, skins, tusks, or teeth for display. International and domestic trophy hunting has a long history in the United States, and U.S. citizens import more wildlife trophies than citizens of any other country\u2014over 650,000 trophies in 2017 alone. Many of these trophies are deer, geese, and other common species that were hunted in neighboring countries, such as Canada. However, some of these trophies are rare and threatened animals hunted in countries throughout Africa and parts of Asia and South America. ", "The practice of international trophy hunting, especially of rare and endangered species, has generated controversy for a number of reasons, including its relation to conservation (including of wildlife populations), ethical considerations, and its effect on local economies where the animals are hunted. Proponents of trophy hunting contend that the practice is a potential source of funding for the conservation of species in exchange for the hunting of a proportionally small number of individuals. Further, they argue that trophy hunting can create incentives for conserving habitat and ecosystems where hunted animals roam and, in some impoverished areas in range countries, can provide a means of income, employment, and community development. Critics of trophy hunting contend that the practice can lead to the decline of rare and endangered species and that the pathway of moving funds from hunting to conservation can be fraught with corruption and mismanagement. Further, some argue that it is unethical to kill animals for sport and that the life of an animal should not be valued according to how much a hunter would pay to kill it.", "Determining the effects of international trophy hunting on species\u2014with regard to either killing animals or conserving them through hunting revenue\u2014can be challenging for several reasons, namely due to lack of data, according to scientists. Difficulty gathering data from range countries can hinder attempts to develop an accurate sense of how hunting affects animals. For example, limited data may misrepresent the number of trophies harvested or animals killed, corruption can blur the route of money from hunters to conservation efforts, and a lack of information on conservation plans and practices associated with domestic laws and regulations can lead to questions about the effectiveness of these conservation efforts. ", "From a scientific perspective, teasing out the effects of trophy hunting from those of other factors that affect a species also can be challenging. Several factors affect the viability of animal populations in the wild, including habitat alteration or destruction, prey or resource availability, genetic makeup of the population, changes in climate, presence of non-native species, poaching, subsistence or market hunting, and trophy hunting, among others. Measuring the condition of a population usually involves taking into consideration several of these factors, and more than one factor typically affects the population's condition. Many scientific studies on trophy hunting's effects on wildlife populations contain disclaimers of insufficient data to measure the effect of hunting on a species. ", "Some studies have reported that unregulated hunting has contributed to the decline of several species. For example, in the 1980s, hunting reportedly played a part in the decline of both the dorcas gazelle ( Gazella dorcus ) and the Nubian bustard ( Neotis nuba ) from Sahelian Africa. Some scientists contend that there are no documented extinctions solely resulting from trophy hunting. ", "Congressional interest in trophy hunting hinges on several aspects of the practice and its potential consequences. There is interest among some Members of Congress and constituents in international trophy hunting of rare and threatened species, such as African lions, elephants, and rhinoceroses. As the largest importer of sport-hunted trophies in the world, the United States can play a role in shaping policy, which likely bolsters this interest. The killing of Cecil the lion in Africa in 2015 drew particular public interest and attention in Congress. The incident stimulated debate on trophy hunting and raised questions about the relative importance of trophy hunting versus other threats to a species.", "Congress's role in addressing international trophy hunting is limited in some aspects, because the range country oversees most controversial aspects of the activity. However, Congress can address the import of wildlife trophies into the United States and can use laws and regulations to indirectly influence trophy-hunting practices in range countries. Congress has addressed international trophy hunting through several bills and through oversight of the implementation of the Endangered Species Act (ESA; 16 U.S.C. \u00a7\u00a71531-1543) and the Convention on the International Trade in Endangered Species of Wild Fauna and Flora (CITES). In addition, some Trump Administration policies have stimulated congressional interest in trophy hunting, such as one to evaluate permits issued for importing sport-hunted trophies of listed animals into the United States on a case-by-case basis, a change from the previous practice of evaluating the range country before issuing permits for hunting these animals. Further, the Trump Administration established an International Wildlife Conservation Council, which is charged with providing advice to the Secretary of the Interior on the benefits of U.S. citizens hunting overseas. ", "This report discusses the history and scope of international trophy hunting in the United States, selected U.S. laws and international agreements that address trophy hunting, and potential issues for Congress to consider regarding international trophy hunting. It does not cover domestic trophy hunting. "], "subsections": [{"section_title": "Historical Perspective on Trophy Hunting", "paragraphs": ["Sport hunting is one of the oldest known recreational activities, according to some historians. Although the origin of sport hunting remains unclear, some historians trace the practice to instances in Ancient Egypt and more prominently in the Middle Ages. Some authors note that game parks for controlled hunting were prevalent in the Persian Empire (534 BCE-330 BCE). Early reports of sport hunting indicate that it was unregulated and generally occurred in a commons area. Restrictions on sport hunting, according to some historians, first began in the Middle Ages, when it was forbidden to hunt in certain forests owned by a king or other royalty. In the 18 th and 19 th centuries, concerns about overhunting and its consequences for species led to the creation of parks and game lands with hunting regulations. For example, game reserves were created in England and its colonies to monitor and control the effects of sport hunting on animals in the 19 th century. ", "Sport hunting was also practiced in the name of conservation and science, in addition to recreation. Former President Teddy Roosevelt went on hunting expeditions throughout the world; in 1909, he went on an 11-month expedition through British-controlled East Africa and Sudan and reportedly shot or trapped nearly 11,000 animals, including hippopotamuses, elephants, and white rhinoceroses. The Smithsonian Institution financed the expedition, and many of the specimens were deposited into the Smithsonian Natural History Museum. In the 20 th century, sport hunting became a resource, in part, for conservation. For example, sport hunting in the United States contributes to conservation through the Federal Aid in Wildlife Restoration Act of 1937 ( 16 U.S.C. 669-669i) , also known as the Pittman-Robertson Act. Under this act, the purchase of guns, hunting licenses, and ammunition generates revenue for conservation. Further, fees from federal and state duck stamps (stamps are required for waterfowl hunting) and hunting permits have generated funds for conservation in the United States.", "Trophy hunting originated, in part, during the colonial settlement in Africa. Some note that the establishment of the Dutch East India Company in 1652 led foreign hunters to Africa. Explorers and hunters killed animals for ivory and hides; the emphasis on hunting was for subsistence and trade. Hunters later took advantage of an expanding railway system to access areas infrequently occupied by settlements. Hunters combined sport hunting with the international wildlife trade to generate money, as exemplified by killing elephants and harvesting their ivory and hides for trade. Trophy hunting in Africa increased in the 19 th century and was encouraged by the British authorities, who promoted sport hunting as a way to increase agricultural expansions into historic rangelands. Tourist trophy hunting started in Kenya in the 20 th century and later spread throughout Africa. According to some scientists, trophy hunting aligned with and aided in conservation and development in the 20 th century; funding from trophy hunts, according to some, led to the establishment of protected areas in Africa. Trophy hunting was seen as a mechanism to support development in local communities (see \" Trophy Hunting and Local Communities \"). "], "subsections": []}, {"section_title": "Scope of International Trophy Hunting", "paragraphs": ["Trophy hunting occurs throughout the world in areas where wild and managed populations of hunted animals exist. Trophy hunting can target large, charismatic mammals, such as white rhinoceroses ( Ceratotherium simum ) and elephants ( Loxodonta africana ), as well as smaller, lesser-known species, such as markhor ( Capra falconeri ) and argali ( Ovis ammon ). Trophy hunting generates millions of dollars each year through trophy fees and other revenue connected with associated tourism. ", "The largest community of international trophy hunters is from the United States. The United States is also the largest importer of animal trophies; it imports over 10 times more trophies than China, the world's second-largest trophy importer. Several species listed under CITES are hunted for trophies, and their export and import data can provide insight into the practice of international trophy hunting. CITES lists animals that are considered threatened or endangered due to trade and therefore require greater monitoring or conservation. From 2011 to 2015, trophy imports of CITES-listed species into the United States exceeded the sum of CITES-listed species imported into the other top nine trophy-importing countries in the world. (See Figure 1 .) ", "Africa is the most popular place for the international hunting of rare and threatened species for trophies (see Figure 2 ), and several African countries are popular areas for sport hunting. South Africa and Namibia export the most mammalian trophies listed under CITES; in these countries, most trophies exported from CITES-listed species are from lions, lechwe (antelope), certain species of zebra, and leopards. (Data for non-CITES listed species were not readily available.) ", "Some of the most prized species for trophy hunting come from Africa, and their notoriety is reflected in the hunting fees the species command. Fees for hunting animals for trophies vary considerably and are based on the rarity of the animal, the effort needed to hunt the animal, and the animal's popularity for hunting. (See Table 1 .) In Africa, the so-called big five animals of trophy hunting are lions, white rhinoceroses, elephants, leopards, and buffalo. All five species are coveted trophies for hunters, although most international hunters in Africa seek more plentiful, less costly plains game. The big five are notable for the difficulty in hunting them and the high trophy fees that hunters pay, which can range from $9,000 to upward of $350,000. (See Table 1 .) Some studies indicate that many African countries earn most of their trophy-hunting revenue from the big five animals. Four of the big five species are protected under CITES, ESA, or both. "], "subsections": []}, {"section_title": "Role of the United States in International Sport Hunting", "paragraphs": ["As discussed, the United States is the largest importer of sport-hunted trophies in the world for all species and for CITES-listed species. This distinction gives the United States, according to some, an opportunity to influence international sport hunting through its policies for importing trophies and actions by its hunters. U.S. hunters primarily import sport trophies from Canada and South Africa, according to Fish and Wildlife Service (FWS) records; this also holds true for CITES-listed species. (See Figure 3 .) ", "Of the species imported into the United States, the snow goose, mallard, and black bear are the most common (see Figure 4 ). Most of these trophies are imported from Canada, and most imported species into the United States are not considered to be threatened or endangered.", "Of the CITES-listed species, the black bear and the Sandhill crane are the most imported trophies into the United States with a permit. (See Figure 5 .) The black bear and the sandhill crane are imported largely from Canada; most of the other species are imported from Africa."], "subsections": []}]}, {"section_title": "International Sport Hunting: Regulatory Framework", "paragraphs": ["International sport hunting is largely regulated through laws of the range country, the country importing trophies, and international agreements. Hunters generally must consider regulations of all three entities and apply for applicable permits to hunt and transport trophies. This section will discuss the regulations associated with each category."], "subsections": [{"section_title": "Multilateral and Foreign Country Regulations for Sport Hunting", "paragraphs": ["International trophy hunting can be regulated through some international agreements, depending on the species being hunted. If the hunted species is considered rare or endangered due to trade, CITES might apply. "], "subsections": [{"section_title": "CITES", "paragraphs": ["CITES is an international agreement signed by 183 governments, including the United States, which voluntarily agreed to adhere to a series of incrementally more stringent restrictions on imports and exports of wildlife, depending on the sustainability of such trade for the species. CITES lists and categorizes wildlife and plant species based on the extent that these species might be threatened by trade. Protected species are organized under CITES into three appendixes. Species in Appendix I are threatened with extinction due primarily to trade, and trade in Appendix I species for commercial purposes is prohibited. Appendix II contains species that are not necessarily threatened with extinction but require controlled trade to prevent population declines. Species in Appendix III are listed because at least one country has requested other countries to assist in regulating trade of that species.", "Countries regulate trade through a permit system for importing and exporting species and a quota system for regulating species' take (the act of killing or harvesting a species). Many CITES signatories have implemented permit regulations in their national laws. For the United States, CITES is implemented under ESA. CITES regulates the import and export of trophies from threatened wildlife through permits. For example, a hunter attempting to import a trophy of an animal listed under CITES Appendix I (the most protective category) into the United States would be required to obtain an import and export permit (from the importing country and range country, respectively) for the wildlife or wildlife parts. ", "Trophy imports of CITES-listed species under Appendixes I and II generally are administered through a quota system established by the range country (or in some cases the CITES Secretariat), and they require a determination that the killing of the animal causes no detriment to the population, referred to as a n on- d etriment f inding (NDF). NDFs are required for Appendix I and II species only but can be used to guide the trade of Appendix III species. An NDF for an import permit is made by the designated CITES Scientific Authority of the country of import through the analysis of information (e.g., population status and trade information) from the range country and the permit. FWS is the United States' Scientific Authority for CITES-listed species. The establishment of a quota for exporting individuals of a species can meet the requirements of an NDF. The CITES Secretariat does not necessarily have complete information regarding how range countries set their quotas, but it receives reports from participating countries. For example, range countries regulate African elephant, cheetah, black rhinoceros, and lion trophies by voluntary quotas.", "Trade of a particular species or exports of a species from a range country can be temporarily suspended under CITES. Such a suspension may occur if there are not sufficient guarantees that trade is not detrimental to the survival of the listed species or if adequate legislation to implement CITES is absent, illegal trade is prevalent, or required scientific reports are missing. Some suspensions of trade are specific to the species, whereas other suspensions can be for all trade for a country. Currently, 29 countries are affected by species-specific trade suspension resolutions, including Equatorial Guinea, South Sudan, Sudan, Tanzania, Ghana, Niger, Liberia, Vietnam, Benin, and Togo, among others. Of those 29 countries, Afghanistan, Djibouti, Grenada, Liberia, Mauritania, and Somalia are subject to a complete suspension of trade on all species."], "subsections": []}, {"section_title": "European Union", "paragraphs": ["Another multilateral framework for addressing trophy hunting is the European Union (EU). The EU governs international trophy hunting under the EU Wildlife Trade Regulations (WTR). The WTR implements CITES for the EU and aims to protect species by regulating trade, authorizing permits for trade, and allowing for the suspension of certain species from trade with the EU. Regulations promulgated by the EU are in place for all national governments within the EU; however, individual countries enact enforcement regulations. ", "The EU regulates the trade of species through a permit system that is based on the classification of a species within four annexes. The annexes list species according to how trade affects the species. The classification of species within the annexes largely follows CITES classifications, but the annexes contain species not listed by CITES. The permit system addresses sport-hunted trophies directly and recently has listed regulations for the import of polar bear, African elephant, and African lion trophies, among others. Member states under the EU can implement more stringent policies than the EU to address the trade of species. For example, under German regulations, import applications of CITES Appendix I species that do not have an established quota go through heavier review than applications with export quotas. EU regulations also contain a suspension rule, which allows the European Commission (the EU executive arm) to restrict the entry of a species into any country in the EU. A handful of species are prohibited from entry into the EU, including the West African seahorse ( Hippocampus algiricus ) from Guinea and Senegal and the crab-eating macaque ( Macaca fascicularis ) from Laos.", "EU regulations differ from CITES regulations in a few ways. The EU regulations, according to some observers, are stricter than CITES regulations. For example, some CITES Appendix II species are in Annex A under the EU, and Annex A contains stricter regulations for trade than CITES, according to some. Annex B species under the EU require both import and export permits, whereas similar CITES Appendix II species require only an export permit. The EU wildlife trade system also regulates trade within the EU. Despite its potentially stricter regulations, the EU system is in compliance with CITES, because CITES stipulates that parties can have laws and regulations that are stricter than CITES. "], "subsections": []}, {"section_title": "Range Country", "paragraphs": ["The hunting and killing of animals generally are regulated by laws of the range country, which vary by country. Some range countries address trophy hunting with a combination of policies that involve annual quotas for hunting particular species, designated hunting ranges, and permit systems for allowing hunts (e.g., Zimbabwe and South Africa). Other range countries ban trophy hunting outright. Trophy hunting is currently banned in 13 range countries: Angola, Botswana, Congo, Gabon, Ghana, India, Kenya, Malawi, Mauritania, Niger, Nigeria, Rwanda, and South Sudan. Countries such as Romania and Holland ban imports of sport-hunted trophies. Analyzing trophy-hunting laws in range countries is beyond the scope of this report."], "subsections": []}]}, {"section_title": "U.S. Regulations on International Trophy Hunting", "paragraphs": ["In the United States, laws related to international trophy hunting are governed by ESA, which implements CITES and is administered by FWS. ESA does not regulate trophy-hunting activities within range countries directly; rather, the law governs what can be imported into the United States. The actual killing of a listed species in a foreign country is governed by the range country. ", "Trophy hunting is regulated by FWS based on the status of the species. Most trophies that are imported into the United States come through a designated port of entry and must have a declaration filled out. FWS may inspect the declaration and the trophy before allowing it into the country. If the species is listed under CITES or ESA, a permit from FWS might be necessary to import the trophy into the United States. For species listed under ESA or CITES, an import and potentially export permit from the range country might be needed. ", "An enhancement-of-survival permit is needed to import trophies of species listed under ESA. Enhancement of survival implies that the import of endangered animals or their parts or products will provide incentives to increase the survival of the species in its native habitat. If a species is listed as threatened, the same concepts apply, unless there is a special rule under Section 4(d) of ESA, which may allow for a limited number of trophies to be imported under different circumstances. In the past, when making an enhancement finding for issuing permits to import trophies, FWS reviewed information in the application and the status of species and conservation programs in the range country. The evaluation was a three-part process to ensure the survival of the species, according to FWS. First, FWS assessed the hunted animal's range country, looking at whether the management of the species is sustainable, if there are resources that support the enforcement of laws and illegal poaching, and whether the country will hold hunters accountable if violations arise. FWS also considered a hunter's actions; for example, a permit application for species in Mozambique asked the hunter to provide a written statement detailing antipoaching activities, clarifying whether the meat from the hunt goes to local communities, and affirming the status of the hunting organization. Reviewing the country's data and conservation program was, in part, an effort to streamline the issuance of individual permits for importing trophies. ", "FWS also used to make non-detriment findings (NDFs) under CITES to facilitate the issuance of CITES permits for importing trophies of CITES-listed species. Species listed under Appendix I need an import permit from FWS; this permit is issued if the imported trophy will not be detrimental to the species' survival and is not primarily intended for commercial purposes. ", "A recent policy change by FWS has altered the process for evaluating the enhancement-of-survival criteria and issuing NDFs for permits related to sport-hunted trophies. FWS issued a memorandum stating that the agency would withdraw ESA enhancement-of-survival findings and CITES NDFs for several species in various countries around the world and evaluate applications for ESA and CITES permits on a case-by-case basis pursuant to the authorities under ESA, which includes CITES. The memorandum further stated that FWS would use status and monitoring information from range countries and evaluate information in each application to ensure that management programs are promoting the conservation of the hunted species. It is unclear whether permit applications or their status will be made public or if there are specific criteria being evaluated in each application to make determinations in lieu of countrywide evaluations. According to the memorandum, the changes were derived from a District of Columbia Court of Appeals opinion on issuing enhancement-of-survival permits under ESA. The appeals court decided that FWS did not adhere to notice and comment rulemaking requirements under the Administrative Procedure Act when making a negative enhancement finding for the import of sport-hunted trophies from Zimbabwe. "], "subsections": []}]}, {"section_title": "Ecological, Ethical, and Economic Considerations of Trophy Hunting", "paragraphs": ["The controversies surrounding international trophy hunting are rooted in the ecological, ethical, and economic considerations of the practice. Numerous factors affect a species, and teasing out the effects of trophy hunting is challenging due to a lack of long-term monitoring of hunted populations. Most studies also report that with appropriate and consistent management, trophy hunting can be potentially beneficial for species; however, with poor management, trophy hunting can be detrimental for species. This section will analyze several identified ecological and economic factors that are affected by international trophy hunting. "], "subsections": [{"section_title": "Ecological Factors Affected by Trophy Hunting", "paragraphs": ["Scientists report that trophy hunting can affect a species population with respect to how many individuals are hunted annually ( rate of offtake ), the genetic consequences of hunting, the traits of the individuals selected for hunting (including the social status of the hunted individuals), and the consequences of hunting for the ecosystem where the species resides."], "subsections": [{"section_title": "Hunting Rates", "paragraphs": ["Hunting could significantly affect a population, if the number of animals killed is greater than the reproductive rate of the individuals in the population. According to scientists, high rates of trophy hunting have caused population declines in African lions ( Panthera leo ), American cougars ( Felis concolor ), and possibly African leopards ( Panthera pardus ). High rates of trophy hunting also could combine with other factors to cause population declines in animals. For example, poaching and, to a lesser extent, hunting of wild elephants in Africa currently are outpacing the species' reproductive rate, causing an unsustainable loss of elephants annually. ", "To combat this problem, some range countries have adopted regulations that limit hunting certain animals from a given species based on their age. Studies have shown that using an age-restricted quota system that allows the hunting of older animals could lead to sustainable growth of the species population. For example, these types of restrictions could be applied to long-lived species such as African elephants, according to some scientists. In some African countries, such as Mozambique, Tanzania, and Zimbabwe, regulations regarding age-restricted hunting incentivize hunters to respect this system by increasing quotas for hunters who adhere to age restrictions.", "Hunting rates also are correlated to the rarity of the species, according to some scientists. Some have introduced the concept of the Anthropogenic Allee (AA) Effect (see box for description) to explain why the interest in trophy hunting increases as the species becomes rare. This hypothesis, under certain scenarios, could explain how trophy hunting could severely diminish a species. In contrast to this perspective, some observers contend that managed trophy hunting, which includes scientifically determined quotas, monitoring, and enforcement, can have few negative effects on a wildlife population and can be beneficial for a population in some cases. "], "subsections": []}, {"section_title": "Genetic Effects of Trophy Hunting", "paragraphs": ["Trophy hunting might have a significant effect on the genetic makeup of a population if the population is small or if hunting is prolific and focused on individuals with specific traits (e.g., large horns or antlers). Trophy hunting of individuals in small populations could reduce the population's gene pool and increase the chance of inbreeding and breeding by less vigorous males; if too many males are removed from the population by hunting, there is less fighting to establish dominance and breeding rights among males, which can allow less vigorous males to breed. Inbreeding and a reduced gene pool can affect the population's viability and can cause extinction. Managing trophy hunting in small populations of animals through accurate quotas and population monitoring could avoid this problem, according to some scientists. ", "Selectively hunting animals based on gender or body traits could have genetic and evolutionary consequences for the population and species. Targeting only males or females in a population could affect the animals' ability to disperse their traits to future generations. If trophy hunting, for example, focuses on larger, breeding males, there would be fewer males to mate and the population could suffer from low reproductive rates. African lions are vulnerable to excessive losses of males in their population. In addition to the probability of inbreeding, scientists report that removing too many males from a pride could lead to females being unable to mate. ", "These genetic effects of trophy hunting can be mitigated with accurate quotas and managed hunting that targets specific animals in a population, according to some scientists. In one case, scientists recommended that one lion be taken per 2,000 square kilometers in Africa, where population densities are low. Others note that restricting trophy hunting to male lions that are older than six years of age would allow younger males to reproduce and allow for higher-quality trophies from the population."], "subsections": []}, {"section_title": "Effect of Trophy Hunting on the Social Organization of Animals", "paragraphs": ["Trophy hunting can disrupt the social makeup of a population or pride if the species is social, such as brown bears ( Ursus arctos ) and African lions ( Panthera leo ). If a dominant male is killed, the male taking over the pride or social group might improve its reproductive success by killing the offspring of the former rival male. If this practice occurs frequently, the population's viability could suffer from lower growth rates and diminished reproduction. For example, in populations of brown bears in Alberta, Canada, scientists reported that cub survival lowered when mature males were killed, causing population declines. Further, male takeovers of lion prides due to trophy hunting can cause the dispersal of subadults away from the population or injury and death to remaining males. Management techniques to avoid these problems have been suggested and include specifying which individual in a social group to hunt and monitoring populations to see if target individuals change. "], "subsections": []}, {"section_title": "Trophy Hunting and Habitat Conservation", "paragraphs": ["Trophy hunting could be a driver for increasing biodiversity and habitat conservation within range countries. Hunting lands often are cited as conservation areas because of the efforts made to maintain a pristine environment for game animals. In the United States, for example, Ducks Unlimited is involved in conserving nearly 10 million acres of waterfowl habitat used for hunting. In Africa, the area of hunting grounds is significant and exceeds the area of national parks in a few range countries. (See Table 2 .) Observers report that protected and managed hunting lands increase the biodiversity of a range country and could be considered a conservation tool. Some contend that without hunting, these lands would be converted to rangelands for livestock production, which have lower biodiversity than native habitat. Proponents of hunting also suggest that managed hunting grounds protect animals from poaching.", "Some critics of trophy hunting suggest that hunting grounds do not ensure that threatened or endangered animal populations will rebound from low levels. They contend that some rangeland managers artificially alter the ecosystem by introducing exotic species or manually reducing predators of trophy animals. Further, some note that rangelands for hunting generally are fenced, thus fragmenting the habitat into small blocks. Fenced ranges also could alter the migration and range of several non-hunted species, especially in Africa. In contrast, fences could protect animals from poachers. "], "subsections": []}]}, {"section_title": "Selected Ethical Considerations of International Trophy Hunting", "paragraphs": ["Several ethical concerns are associated with trophy hunting, and these issues add to the debate on whether the practice is beneficial to conservation. Some critics of the practice contend that paying a fee to kill an animal and collect a trophy as a sign of conquest is unethical and represents objectification of the hunted animal. They further question the role of trophy hunting in aiding conservation, citing lack of data and other forms of generating value from wildlife, such as wildlife viewing. Some supporters of the practice contend that trophy hunting is a recreational pursuit that could increase the value of certain animals and aid in the overall conservation of a population. ", "Some ethical arguments can be relevant in discussing the practice of trophy hunting and its alternative forms. For example, the practice of captive hunting (i.e., hunting animals within an enclosure) causes some hunters to question whether the hunting in this environment represents fair chase . Fair chase has been defined by one organization as \"the ethical, sportsmanlike, and lawful pursuit of free-ranging wild game animals in a manner which does not give the hunter an improper or unfair advantage over the animal.\" Some other hunters claim that fair chase is achieved if the enclosure is large enough for animals to roam a certain distance. Critics of trophy hunting also cite ethical considerations associated with other hunting practices, including shooting animals from vehicles and luring animals with baits."], "subsections": []}, {"section_title": "Economic Considerations of International Trophy Hunting", "paragraphs": ["Overall, research on trophy-hunting operations and their economic effect is limited and varies according to the areas studied. Researchers describe both economic benefits and limitations of trophy hunting. ", "Trophy hunting can be a lucrative enterprise for certain parties throughout the world, according to some scientists. In the United States and Europe, trophy hunting can generate billions of dollars. Revenues from trophy hunting in Africa, in comparison, are estimated to generate more than $200 million annually. This estimate varies among sources, causing some to question the accuracy of reported revenue data and the methodology used to aggregate reported revenue data over time and across countries. ", "These data do not illustrate how economically important or insignificant trophy hunting might be in different range countries in Africa. For example, FWS reports that 7 of the 10 countries where lions are allowed to be hunted for trophies are considered developing nations in which 27%-64% of the population is living in poverty. Trophy hunting in these areas could have a proportionally larger effect than in wealthier countries because of the low base income. ", "Proponents of trophy hunting also argue that trophy hunting is economically viable in areas that are unsuitable for photographic ecotourism\u2014areas that are remote, lack infrastructure, contain little attractive scenery, have experienced ongoing or recent struggles with political instability, and contain low densities of viewable wildlife. Countries such as Mozambique, which are less attractive ecotourism destinations, are nevertheless able to generate revenue from sport hunting. Researchers have used survey techniques to evaluate such assertions and found willingness among respondents to finance hunting trips to sites typically less suitable for ecotourism. ", "Critics contend that trophy hunting does not have the significant effect on gross domestic product (GDP) that supporters claim. They argue that trophy-hunting revenue remains a small percentage\u20141.8%, according to one study\u2014of overall tourism revenues and just a fraction of overall GDP for some of the core wildlife source countries in Africa. A 2009 study by the International Union for the Conservation of Nature (IUCN) further criticized big-game hunting, particularly in West Africa, as a financially suboptimal use of land, because land used for big-game hunting generates smaller economic returns than land used for agriculture or livestock breeding. Additionally, studies have shown that in some instances, revenues associated with trophy hunting provide insufficient economic benefits to motivate local communities to promote the conservation of certain species\u2014particularly carnivores that prey on livestock, such as leopards. This was found to be the case in Niassa National Reserve, Mozambique. Another study found that local benefits derived from wildlife-related activities, including hunting revenue, were insufficient to change incentives for conservation in two observed sites in Mozambique and Namibia."], "subsections": [{"section_title": "Trophy Hunting and Local Communities", "paragraphs": ["Some proponents of trophy hunting contend that the money generated by trophy hunts helps the communities in and around the range areas by providing jobs and money for community services. For example, some found that trophy hunters were willing to pay substantial premiums for hunting trips that were advertised as offering benefit-sharing arrangements with local communities. ", "The literature often cites community-based natural resource management (CBNRM) as a mechanism to encourage local community involvement in wildlife management decisionmaking and to increase the amount of financial benefits associated with wildlife-related revenue that accrue to local communities. In practice, the results have been mixed. For example, the Communal Areas Management Plan for Indigenous Resources (CAMPFIRE) program in Zimbabwe attempted to create economic incentives for communities and landowners to conduct habitat and ecosystem restoration. At one point, CAMPFIRE generated more than $20 million, of which almost 90% came from trophy hunting, allowing communities to establish management over the habitat and resources within the range area. Of the income generated from tourist activities, such as trophy hunts, 49% went to the communities and 20% went to wildlife management; the remaining 31% went to other administrative projects. Trophy hunting, however, is one of several conservation-oriented wildlife management tools. ", "However, some scientists emphasize that the amount of trophy-hunting revenue that accrues to local communities is disproportionately small. These researchers note that in Cameroon, less than 3% of trophy-hunting revenues accrued to local communities; in Zambia, local communities received some 12% of hunting revenues; and in Tanzania, though law requires a percentage of hunting revenues to accrue to communities living in or adjacent to hunting areas, the funding rarely has reached past the local council level. Others reported that approximately 3% of trophy hunting revenue in Tanzania was allocated to \"area and community development,\" which is vague and creates uncertainty about whether the funds went to species conservation. ", "In some areas, however, a higher percentage of revenues from trophy hunting flows to local communities. Some, for example, cite Zambia's ADMADE (Administrative Design for Game Management Areas) program as a model for locally accruing trophy-hunting revenue, noting that ADMADE receives 67% of all trophy-hunting revenue in game management areas and that 53% of ADMADE revenue is directed toward local wildlife management; the remainder goes to community development. They also cite Botswana and Namibia as examples where trophy-hunting revenue accrues locally. ", "Some scientists conducted an evaluation of the economic contributions of safari hunting to the rural livelihoods of a CBNRM-participating village in Botswana. In addition to documenting multiple economic benefits, including cash dividends, employment income, and community facilities infrastructure development, the scientists found that the distribution of safari hunting benefits was \"fairly equitable\" among village households. "], "subsections": []}]}]}, {"section_title": "Trophy Hunting and Conservation", "paragraphs": ["Congress might consider whether international trophy hunting is a benefit or detriment to wildlife conservation. There does not appear to be consensus among stakeholders as to whether international trophy hunting is being applied and used as an effective conservation tool throughout range countries where it is practiced. Several observers note that more data need to be collected on how species respond to trophy hunting in the short and long terms and how revenue from trophy hunting is managed in range countries. ", "Proponents of trophy hunting contend that it can be used as a conservation tool if managed in a sustainable and scientifically based manner. They argue that revenue from hunting operations can be channeled into conservation programs and activities that aim to support hunted species and their habitat. Some contend that governance (e.g., having laws in place that require hunting fees to be made available for conservation) is critical for trophy hunting to contribute to conservation. ", "Conservation benefits associated with trophy hunting are seen as wide and varied. Some contend that trophy hunting incentivizes land managers to conserve populations of hunted species, which include threatened and endangered species. In some instances, it may protect species from poaching and use hunting quotas to manage species in a sustainable manner. Additionally, efforts to support trophy hunting can lead to the protection and management of rangelands, which support hunted species and other wildlife in the ecosystem. Local communities can benefit from trophy hunting as part of a tourism framework that could bolster economies through the development of hotels, restaurants, and other tourism-related activities. In certain areas where tourism is sparse, some have noted that trophy hunting can provide income to sustain communities. South Africa provides economic incentives to maintain white and black rhinoceros populations through limited trophy hunting, along with other forms of tourism.", "Some economists note that countries sometimes use revenue to fund the operational costs of government wildlife management authorities, counterpoaching enforcement activities, and development assistance to local communities. In Zambia, for example, hunting revenues have been used to train and hire village scouts for antipoaching activities in game management areas and to support community development projects for clinics, shelters, and schools. ", "Critics of trophy hunting as a conservation tool question the effectiveness of trophy-hunting management. They note several aspects of trophy-hunting management that could be weak and negatively affect conservation of species and the ecosystem. Critics also question the premise that significant funds from trophy hunting are used to conserve hunted species and the ecosystems they use; these critics cite issues such as corruption as a barrier to ensuring revenues are used for conservation. For example, corruption may result in local people allowing and sometimes assisting poachers. Corruption can take the form of exceeding quotas, allowing hunting outside of rangelands, accepting bribes to overlook illegal activities, and using funds for nonconservation activities. For example, some contend that corruption detrimentally affects conservation effectiveness of trophy hunting in Ethiopia; funds reportedly are funneled to uses other than for conservation.", "Tanzania also suffers from mismanagement of both resources and funds, according to some studies. From failing to implement new policies designed to include communities in the trophy-hunting revenue cycle to operating a public auction system that allows discretionary spending by officials, leading to corruption and patronage, Tanzania is alleged to have misgoverned trophy hunting. This mismanagement led, in part, to a decreasing lion population, according to some. Scientists also noted that a lack of community involvement in the practice of trophy hunting led communities to defend themselves from lion encroachment, thus adding to the population's decline. ", "Critics contend that offtake rates for some trophy hunted species are unsustainable and could affect populations. Some quotas for hunting animals do not use the best scientific information or are fixed and do not reflect changes in the population. In addition, some quotas do not accurately specify which individual animals may be hunted and their ages, which may have long-term negative genetic consequences on the population. Hunting the wrong individual animals also could have social consequences (e.g., infanticide) in some instances and could affect the viability of a population. Moreover, by not having a defined area or population to manage, hunting could result in several groups hunting the same population of animals without coordination, leading to overhunting quotas or other negative effects on the population. Fenced areas for hunting also could have negative effects on the ecosystem by preventing the migration of nonhunted species and allowing for the introduction of exotic species. ", "In addition, critics argue that if local communities do not receive revenues from trophy hunting, they might be alienated, which could have consequences for maintaining and monitoring the hunted species. Many communities report hunting revenue failing to reach them due to potential corruption and other factors. For example, some communities in Tanzania claim that hunting organizations fail to pay local communities the 5% of revenue upon which the parties agreed. ", "Some stakeholders contend that trophy hunting in any form is unethical. They argue in favor of using other alternatives for generating income from natural resources in its stead (e.g., birdwatching and safari). "], "subsections": []}, {"section_title": "Potential Issues for Congress", "paragraphs": ["International trophy hunting is an issue for Congress for several reasons, including the practice's recreational qualities; its effect on wildlife, especially charismatic species; constituent interest in the practice; its relevance to laws that regulate the trade of threatened and endangered animals; and its ethical considerations, among other things. For example, some argue that the killing of Cecil the Lion in 2015 heightened congressional interest because lions are charismatic species and some are against killing threatened species due to ethical concerns. Congress and the Trump Administration have addressed international trophy hunting through the implementation of laws and the dissemination of regulations that address the import of sport-hunted trophies into the United States. Further, the Trump Administration has established the International Wildlife Conservation Council to provide recommendations to the Secretary of the Interior on various aspects of U.S. international trophy hunting. ", "The role of Congress in this issue is limited by the jurisdiction of the United States overseas; hunting quotas, conservation activities, and the flow of revenue from international trophy-hunting activities are largely dictated by the range country. However, the congressional role is potentially meaningful in several areas discussed below. "], "subsections": [{"section_title": "Monitoring and Data Gaps", "paragraphs": ["Some scientists and policymakers contend that fully evaluating the effects of trophy hunting on species conservation depends on monitoring and collecting more data on hunting operations and hunted species in range countries. Data from most hunting operations are largely self-reported. In some cases, they are gathered by the range country and international NGOs. Some policy experts contend that the United States could incentivize range countries and hunters to collect and report more data. For example, some argue that Congress could provide overseas development assistance for international programs and grants for NGOs to conduct studies on the effects of trophy hunting on wildlife populations and the distribution of revenue generated by trophy-hunting operations. Some contend that Congress or FWS could require permit applicants to solicit certain data from hunting operations that would verify the operations' conservation activities and the distribution of hunting revenue. Some might propose that international multilateral organizations, such as CITES, could encourage or require range countries to conduct oversight and report data on hunting operations and wildlife operations. This might take the form of long-term monitoring of hunted wildlife populations and systematic surveying of how trophy hunting affects local communities. For example, CITES collects data on specific species, such as African elephants. The Monitoring the Illegal Killing of Elephants Program aims to help range states improve their ability to monitor elephant populations, identify changes in the illegal and natural deaths of elephants, and apply these data to improve law enforcement and strengthen regulatory measures to conserve and manage elephants. This program is supported by parties to CITES and works with range countries and third parties to collect data. Some might contend that a similar program could be used to monitor and collect data on trophy hunting of selected iconic species, such as African lions, pangolins, and leopards. ", "Critics of these approaches could argue that there are limited resources and incentives available for range countries to collect data on trophy hunting and monitoring. In addition, they might contend that data provided by hunting operations could be falsified or could fail to account for corruption and other illegal activities associated with the distribution of hunting revenue. They might question self-reporting by range countries, specifically, whether the data are accurate and affected by corruption. Some contend that to alleviate this issue, data should be transparent and fully identified when planning regulatory actions either through CITES or individual countries."], "subsections": []}, {"section_title": "Permits for Importing Sport-Hunted Trophies", "paragraphs": ["Congress can address international trophy hunting by U.S. hunters through the process of issuing permits to import trophies. In most cases, hunters need a permit to import a trophy from a listed species into the United States. The type of permit varies according to the status of the species under U.S. law or CITES. Currently, FWS is evaluating permit applications on a case-by-case basis, which involves reviewing individual hunting operations and potentially conservation programs in the range country. It is unclear what standards or methodology FWS uses to evaluate each permit on a case-by-case basis. ", "Some might advocate for Congress to enact legislation that would direct the Secretary of the Interior to create and disseminate specific standards for evaluating trophy-import permits, including increasing the amount of information on the condition of the hunted species. Some might argue that equivalent standards across species for measuring whether hunting could enhance the survival of a population (e.g., criteria used by ESA) or be nondetrimental to a population (e.g., criteria used by CITES) could create consistency in evaluating trophy-import permits and lower the time needed to issue them. In addition, some Members argued that making permit applications and decisions publicly available could increase oversight over the process. H.R. 6885 in the 115 th Congress would have authorized this approach. ", "However, other stakeholders could contend that a consistent approach for evaluating permits might not be applicable to all species being hunted or to all hunting operations being considered. For example, evaluating the conservation and hunting of listed species at the country level could mask individual hunting operations that might have different standards and conservation priorities than the range country as a whole. ", "Some stakeholders might petition Congress to establish a third-party certification system to evaluate hunting operations that frequently appear on permit applications for importing trophies. The certification system could employ standards that reflect best practices for trophy hunting; some of these practices could include transparency in funding flows, support for local communities in proximity to hunts, equitable allocations of hunting concessions, and a quota system for hunted animals. A certification system might also alleviate concerns of questionable data sources for certain countries by having a standardized system for evaluating hunting operations. Under certain situations, a certification system could have a provision that allows for a moratorium on hunting a species to allow it to be replenished in the wild. The International Union for the Conservation of Nature has created a set of guiding principles and recommendations for sustainable trophy hunting that could be converted into standards. The principles include biological sustainability; net conservation benefit; socioeconomic benefit; adaptive management in planning, reporting, and monitoring hunting; and accountable and effective governance. ", "Certification systems are used with other natural resources. For example, two primary wood certification programs affect wood consumed in the United States. The Forest Stewardship Council is an independent, international NGO that certifies that wood comes from well-managed forests that meet an established set of criteria. One key criterion is that the \"chain of custody\" information is provided; ideally, this information includes the names and locations of each handler of the wood from the forest where it originated to the shop where the product is being sold. A second certification program is offered by the Sustainable Forest Initiative (SFI). SFI also contains a set of guidelines and principles that must be followed to earn SFI certification, which is done for North American forests and does not have a chain-of-custody requirement. Approximately 120 million hectares are certified under this program in North America."], "subsections": []}, {"section_title": "Alternative Forms of Trophy Hunting or Bans", "paragraphs": ["As Congress debates whether international trophy hunting is a benefit or a detriment to wildlife conservation, it might consider promoting alternative forms of trophy hunting in the wild. Some contend that trophy hunting in enclosed ranges could give hunting operations greater control over wildlife populations. The practice of hunting animals that are enclosed within a private game ranch is referred to as captive hunting or, in some cases, canned hunting . The species in captive hunts usually are larger megafauna, such as lions, and typically are bred in captivity for game ranches. Proponents of captive hunting contend that it guarantees hunting success for the hunter, allows hunts to be shorter and less expensive, produces better trophies, drives conservation through economic incentives, and allows for easier management of populations, because they are in a contained environment where hunting can be limited. ", "Critics of captive hunting have a different perspective that drives the controversy behind the practice; they contend that killing animals in a contained environment with no chance of escape is unethical and detracts from the sport of hunting. This concept is termed fair chase and is considered the \"ethical, sportsmanlike, and lawful pursuit and taking of any free-ranging wild, big game animal in a manner that does not give the hunter an improper or unfair advantage over the game animals.\" They argue that animals bred in captivity are not equivalent to wild animals and therefore do not have conservation value or enhance the long-term survival of the wild population. In addition, animals bred in captivity can suffer from limited genetic diversity, and fenced game ranches fragment habitat and limit the free range of wild animals. ", "Central to the controversy behind captive hunting are lion populations in South Africa. Captive hunting is prevalent in South Africa, where over 80%-90% of the lions hunted are believed to be captive. Consumers of these hunts are largely from the United States (approximately 60% of captive lion trophies are exported to the United States) and the EU (approximately 40% of captive lion trophies are exported to the EU). Some in South Africa want to ban the hunting of lions bred in captivity; others note that it is a multi-million dollar industry that generates jobs and argue that the practice should stay. ", "Captive breeding of species listed under ESA with trophy hunting also occurs in the United States. Several species listed under ESA are bred in captivity on ranches in the United States for reintroduction to the wild and, in some cases, for trophy hunting. Ranchers can obtain an enhancement-of-survival permit to allow for the limited killing of some animals in a population. The aim is that the revenue generated from hunting surplus captive-bred animals will aid in the captive breeding and reintroduction of the species into the wild. Some also contend that limited trophy hunting of captive-bred populations could reduce hunting pressure in the wild. There are several examples of how certain species have thrived on ranches and bolstered their international populations; the scimitar-horned oryx ( Oryx dammah ), addax ( Addax nasomaculatus ), and dama gazelle ( Gazella dama ) are captive-bred in the United States and have an exemption under ESA that allows for sport hunting and trophies. The objective is to generate funds from hunting to bolster captive breeding that aims to enhance the propagation and survival of the species in the wild. Congress could address captive hunting through permit regulations, either supporting permits that request trophies imported from captive hunting operations or denying permits from these areas. ", "Another alternative to trophy hunting in wild areas is to ban trophy hunting outright. The range country would make this decision, with little to no participation from the United States. Several countries have banned trophy hunting, as discussed in the section on \" Range Country ,\" above. Some contend that banning hunting could benefit wildlife populations even with the loss of revenue from hunting fees. They argue that other forms of tourism (e.g., wildlife viewing) could sustain financial flows and incentivize conservation. ", "Opponents of a ban on trophy hunting contend that trophy hunting has a positive impact in supporting biodiversity through increased revenue flows and rangeland conservation. They note that hunting bans result in lower revenues for wildlife conservation and communities and could be detrimental to certain communities that depend on hunting revenues. Furthermore, they contend that banning trophy hunting could affect habitat conservation; such a ban could allow for increased habitat conversion to agriculture or livestock rangelands, which has caused species declines due to poaching and human-wildlife conflicts. Banning trophy hunting in fringe regions within a country, where the only form of tourism that can be sustained is trophy hunting, can have negative economic effects, according to some. ", "A ban on trophy hunting in Northern Botswana revealed negative consequences on the communal economy in areas that were previously hunting grounds. According to one study, the revenue generated by hunting expeditions represented around two-thirds of total tourism income. The ban on trophy hunting also led to halting certain CBNRM programs due to loss of funding for these opportunities. The ban on lion hunting particularly affected Botswana's economy, causing it to fall by almost 10% of GDP, according to some sources.", "In some cases, the banning of hunting correlates with animal population declines. For example, in Kenya, which instituted a hunting ban in 1977, almost all the common wildlife species have declined from their previous levels since the ban to 2016. Concurrently, livestock numbers, notably sheep and goats, increased by 76.3% during the same period. Kenya's population increased from 14.5 million in 1977 to 48.5 million in 2016. Based, in part, on these data, scientists note that demographic pressure and livestock encroachment on wildlife rangelands appear to be the decisive factors leading to wildlife declines in Kenya."], "subsections": []}]}]}}
{"id": "R45533", "title": "U.S. Constitutional Limits on State Money-Bail Practices for Criminal Defendants", "released_date": "2019-02-26T00:00:00", "summary": ["Money-bail systems allow criminal defendants to avoid prison while awaiting trial by posting a bond set by a fee schedule. The impact of money-bail systems on indigent criminal defendants, however, has prompted legislative interest in and legal challenges to such systems, particularly when the bail does not reflect an individual's specific circumstances, such as potential flight risk or public safety. Critics of money-bail systems assert that fee schedules unduly burden indigent defendants, while supporters argue that fee schedules provide uniformity and ensure that defendants appear at trial.", "Several states and municipalities have reformed their bail systems. Voters in New Mexico approved a constitutional amendment that allows judges to deny bail to defendants considered exceptionally dangerous, but otherwise permits pretrial release of nondangerous indigent offenders who cannot make bail. Other jurisdictions have altered or eliminated their money-bail systems in recent years, including cities in Alabama, Georgia, and Maryland.", "Courts have heard legal challenges regarding whether state or local money-bail systems comport with the Constitution's Due Process and Equal Protection Clauses. The Supreme Court has established that the Constitution provides certain protections to indigents during sentencing and postconviction, including ensuring that an indigent's failure to pay a fine cannot result in an automatic revocation of probation or imprisonment beyond the statutory maximum term. The Court, however, has not addressed these rights in the bail context. Applying the rational basis standard, some courts have found money-bail systems that reasonably ensure a defendant's subsequent court appearance to be constitutional. Other courts have indicated that bail systems that detain indigent criminal defendants pretrial, without considering their ability to pay, may be unconstitutional."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Money-Bail Systems", "paragraphs": ["The right to bail in noncapital cases has firm roots in the United States, dating back to colonial times and originating in English law. As the Supreme Court recognized, the \"traditional right to freedom before conviction permits the unhampered preparation of a defense and prevents inflicting punishment prior to conviction.\" But the Supreme Court has never recognized a right to bail as absolute, and has held that the government may have legitimate interests in limiting the availability of bail, even for noncapital crimes, based not only on possible flight risk but also on other considerations, including the danger an arrestee poses to public safety or specific members of the community. Nonetheless, the Court has also observed that pretrial detention may have negative consequences for criminal defendants, such as by impairing their ability to maintain employment and to support dependents financially.", "The impact of state and municipal money-bail systems on indigent criminal defendants has prompted legislative interest in, and judicial challenges to, such systems. Money-bail systems allow defendants to avoid jail while awaiting trial by posting a bond according to a fee schedule. Typically, judges do not assess a detainee's individual characteristics beyond the offense charged; instead, judges set a defendant's bail based on the criminal offense with which he is charged. Defendants who cannot pay bail may remain detained pending trial. Money-bail systems differ from the federal bail system, which gives judicial officers greater discretion over the conditions of a defendant's pretrial release. Federal law also expressly provides that a \"judicial officer may not impose a financial condition that results in the pretrial detention of the person.\"", "Critics of state and local money-bail systems assert, among other things, that fee schedules unduly burden indigent defendants, who face more difficulty paying bail\u2014including relatively low bail fees associated with misdemeanor offenses\u2014than nonindigent defendants accused of similar offenses. Supporters, on the other hand, contend that fee schedules help guarantee a defendant's appearance in subsequent proceedings and treat defendants uniformly. ", "In recent years, a few jurisdictions, including New Mexico, Kentucky, New Jersey, Colorado, and Maryland, have considered legislative proposals or ballot initiatives to eliminate or alter their money-bail systems. Some states, including California, Colorado, and New Jersey, altered their money-bail systems to employ more individualized risk assessment tools rather than using the nature of the offense charged.", "Recently, defendants have challenged various state or municipal bail systems as inconsistent with the Constitution's Due Process and Equal Protection Clauses. For example, in Jones v. City of Clanton (formerly Varden v. City of Clanton ), the parties settled the case by making release on an unsecured bond the norm rather than the exception. Lawsuits in a few other local jurisdictions have similarly been settled. In Pierce v. City of Velda City , the U.S. District Court for the Eastern District of Missouri issued a declaratory judgment stating that \"no person may, consistent with the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution, be held in custody after an arrest because the person is too poor to post a monetary bond.\" Subsequently, the parties entered a settlement agreement on a new bail policy. ", "During the latter years of the Obama Administration, the Department of Justice (DOJ) submitted a statement of interest in litigation challenging the constitutionality of local bail systems. The DOJ filed an amicus brief in a civil rights lawsuit challenging bail amounts based solely on the offense, calling such systems unconstitutional because of their impact upon indigent defendants. As of the date of this report, it is unclear whether the DOJ and the Trump Administration will continue to take an active role in this case."], "subsections": []}, {"section_title": "Pretrial Release and Pretrial Detention", "paragraphs": ["Money-bail is only one way states and municipalities provide for pretrial release. Absent clear statutory guidance, judges enjoy broad discretion to determine appropriate conditions for releasing a criminal defendant pending trial. When considering pretrial release, judges weigh several factors such as due process, securing a defendant's subsequent court appearance, and protecting society from the defendant. Judges may use various forms of pretrial release such as personal recognizance, secured or unsecured bonds, or conditional release.", "Historically, judges have denied defendants bail if they pose a flight risk upon release. For example, judges generally presume defendants charged with capital crimes pose a flight risk. The Supreme Court has recognized that the government may have other, constitutionally legitimate grounds for limiting pretrial release of defendants, including danger to public safety.", "Several state statutory and constitutional provisions deny bail to defendants arrested for capital crimes \"where the proof is evident or the presumption is great,\" and a few also limit bail for noncapital offenses with certain characteristics. Some of these latter restrictions have been challenged legally. In contrast, federal law creates a rebuttable presumption that favors (but does not compel) detention of persons charged with certain offenses when a judge or magistrate determines, on the basis of clear and convincing evidence, that the defendant has a prior conviction for an offense included in one of nine categories of detention-qualifying offenses (crimes of violence, etc.), committed while the accused was free on pretrial release and for which the accused was convicted or released from prison within the last five years. Federal law also establishes a second rebuttable presumption of detention in favor of pretrial detention when the judge or magistrate finds probable cause to believe that the accused has committed a 10-year controlled substance offense, federal crime of terrorism offense, or various kidnapping or sexual offenses committed against a child."], "subsections": []}, {"section_title": "Constitutional Considerations Related to Bail and Indigence", "paragraphs": ["The Constitution governs pretrial detention and bail. For money-bail systems, particularly as they apply to indigent defendants, the key provisions are the Eighth Amendment's Excessive Bail Clause and the Fifth and Fourteenth Amendments' Due Process and Equal Protection Clauses."], "subsections": [{"section_title": "Eighth Amendment", "paragraphs": ["The Eighth Amendment of the U.S. Constitution states that \"[e]xcessive bail shall not be required.\" Bail is excessive when \"set higher than an amount that is reasonably likely to ensure the defendant's presence at the trial.\" While the Eighth Amendment expressly prohibits excessive bail, it does not establish an absolute right to bail. Whether an accused has a right to bail depends on how expansively a court interprets the provision. For example, in Stack v. Boyle , the Court declared that \"this traditional right to freedom before conviction permits the unhampered preparation of a defense, and serves to prevent the infliction of punishment prior to conviction.... Unless this right to bail before trial is preserved, the presumption of innocence, secured only after centuries of struggle, would lose its meaning.\" However, in Carlson v. Landon , decided in the same term as Stack , the Court stated the following:", "The bail clause was lifted, with slight changes, from the English Bill of Rights Act. In England, that clause has never been thought to accord a right to bail in all cases, but merely to provide that bail shall not be excessive in those cases where it is proper to grant bail. When this clause was carried over into our Bill of Rights, nothing was said that indicated any different concept. The Eighth Amendment has not prevented Congress from defining the classes of cases in which bail shall be allowed in this country. Thus, in criminal cases, bail is not compulsory where the punishment may be death. Indeed, the very language of the Amendment fails to say all arrests must be bailable.", "Similarly, in United States v. Salerno (Salerno ), the Court found the federal Bail Reform Act to be constitutionally valid under the Eighth Amendment's Excessive Bail Clause. The Bail Reform Act allowed judges to detain individuals in certain limited circumstances when the accused poses a danger to the public at large or to particular members of the public. In upholding the act, the Court noted that the Excessive Bail Clause does not limit congressional considerations to question of flight. In other words, the clause permits the government pursuing compelling interests such as public safety \"though regulation of pre-trial release.\""], "subsections": []}, {"section_title": "Due Process Requirements", "paragraphs": ["In addition to Eighth Amendment considerations, pretrial detention and bail must comport with due process principles. Due process requires that statutes imposing pretrial detention serve a compelling governmental interest and do not impose punishment before adjudication of guilt. Moreover, governmental action that deprives an individual of life, liberty, or property must be implemented in a fair, nonarbitrary manner. The U.S. Constitution's due process guarantees are contained in the Fifth Amendment and the Fourteenth Amendment. The Fifth Amendment applies to actions taken by the federal government, whereas the Fourteenth Amendment applies to actions taken by state governments. Each clause provides that the government shall not deprive a person of \"life, liberty, or property, without due process of law.\" ", "Due process may be procedural or substantive. Based on the principle of \"fundamental fairness,\" procedural due process requires notice and an opportunity to be heard before a neutral party. Substantive due process \"forbids the government to infringe certain 'fundamental' liberty interests at all, no matter what process is provided, unless the infringement is narrowly tailored to serve a compelling state interest.\"", "In Salerno , the Court found that the Bail Reform Act's regulatory character met substantive and procedural due process requirements. Discussing substantive due process, the Court stated the following:", "Unless Congress expressly intended to impose punitive restrictions, the punitive/regulatory distinction turns on whether an alternative purpose to which the restriction may rationally be connected is assignable for it and whether it appears excessive in relation to the alternative purpose assigned to it. We conclude that the detention imposed by the Act falls on the regulatory side of the dichotomy. The legislative history ... indicates that Congress did not formulate the pretrial detention provisions as a punishment for dangerous individuals. Congress instead perceived pretrial detention as a potential solution to a pressing societal problem. There is no doubt that preventing danger to the community is a legitimate regulatory goal, nor are the incidents of pretrial detention excessive in relation to the regulatory goal Congress sought to achieve.", "As for procedural due process, the Court found that the act's tailored procedural safeguards satisfied the Constitution. "], "subsections": []}, {"section_title": "Equal Protection Considerations", "paragraphs": ["Under the Constitution's equal protection provisions, courts reviewing government action that distinguishes between classes of people apply different levels of scrutiny depending on the classification used. For example, the Supreme Court has held that governmental action that categorizes people based on certain \"suspect\" classifications, such as race, is subject to strict scrutiny, which is the most searching form of judicial review; other classifications, such as those based on age, are permissible if the statute's use of such classification is rationally related to a legitimate state interest. The Supreme Court has invalidated statutes that impose jail or other adverse consequences based on a defendant's indigence, but it has never held that money-bail systems are constitutionally invalid because indigent defendants have greater difficulty paying bail than other criminal defendants. The Supreme Court, however, has considered the constitutional implications of indigence for criminal defendants in other contexts. "], "subsections": []}]}, {"section_title": "Supreme Court Jurisprudence Regarding Indigents", "paragraphs": ["In a series of cases, the Court held that imprisonment solely because of indigence constitutes invidious discrimination and is constitutionally impermissible. For example, in Bearden v. United States , the Court held that a court could not automatically revoke a defendant's probation for failing to pay a fine and make restitution unless such nonpayment was willful. After the defendant pleaded guilty to burglary and theft by receiving stolen property, the court sentenced him to three years' probation, a $500 fine, and restitution of $250 to be repaid according to a four-month schedule. After the defendant lost his job and could not make the payments, the court revoked his probation, sentencing him to serve the rest of his sentence. ", "In determining the revocation's constitutionality, the Court analogized the equal protection concerns to the fundamental fairness issues of due process analysis and weighed factors including the \"nature of the individual interest affected, the extent to which it is affected, the rationality of the connection between legislative means and purpose, [and] the existence of alternative means for effectuating the purpose ....\" Acknowledging the state's interest in punishment and deterrence, the Court opined that this could be achieved by extending the repayment period or by the defendant performing public service. The Court held that a court must determine whether nonpayment was willful before revoking a defendant's probation. As the lower court had not made such a finding, the Supreme Court held that \"fundamental fairness requires that the petitioner remain on probation\" and remanded the case.", "In other cases, the Supreme Court has not recognized indigence as a suspect class warranting strict scrutiny analysis. For example, in Ma h er v. Roe , the Court held the following:", "An indigent woman desiring an abortion does not come within the limited category of disadvantaged classes so recognized by our cases. Nor does the fact that the impact of the regulation falls upon those who cannot pay lead to a different conclusion. In a sense, every denial of welfare to an indigent creates a wealth classification as compared to nonindigents who are able to pay for the desired goods or services.", "Accordingly, when weighing the constitutionality of bail statutes, some lower courts have used the rational basis standard to examine whether a bond requirement would rationally and reasonably ensure the defendant's appearance at trial or serve another legitimate government interest."], "subsections": []}, {"section_title": "Recent Lower Court Cases Concerning Bail and Indigents", "paragraphs": ["While the Supreme Court has recognized rights for indigents in the sentencing and postconviction contexts, it has not addressed such rights in the bail context. Some courts have viewed claims of excessive bail premised solely on indigence to be uncompelling. For example, in Katona v. City of Cheyenne , a Wyoming federal district court rejected an arrestee's assertion that $35 was excessive bail due to his indigence. Noting that excessive or denial of bail may trigger equal protection concerns, the court applied a rational basis standard of review, examining whether the bond requirement was \"rationally and reasonably\" related to nonresidents appearing at trial. ", "Similarly, in Walker v. City of Calhoun , the U.S. Court of Appeals for the Eleventh Circuit vacated a preliminary injunction against the City of Calhoun's money-bail system for misdemeanor offenders. Arrested and charged with \"being a pedestrian under the influence of alcohol,\" Mr. Walker spent six nights in jail because he could not afford the $160 cash bond set by the money-bail schedule. He filed a class action lawsuit alleging that the City of Calhoun violated his Fourteenth Amendment rights by jailing him and other class members \"because of their inability to pay a generically set amount of money to secure release after an arrest.\" The district court found that the bail schedule \"violate[d] the Constitution insofar as it permits individuals who have sufficient resources to post a bond (or to have one posted for them) to be released immediately, while individuals who do not have those resources must wait forty-eight hours for a hearing.\"", "Appealing to the Eleventh Circuit, the city defended its bail system as constitutional because it discriminated on the seriousness of the offense rather than on wealth. The city argued that the Fourteenth Amendment does not provide \"an absolute entitlement to pretrial release\" and that wealth-based distinctions are subject to rational basis review because wealth is not a suspect class. The city asserted that its bail system met the rational basis standard because it serves the \"legitimate goal of assuring the presence of a defendant at trial.\" ", "The Eleventh Circuit found that the district court erred in applying heightened scrutiny to wealth-based classifications. Citing the Supreme Court's San Antonio Independent School District v. Rodriguez decision, the Eleventh Circuit noted that whether the plaintiff suffered \"an absolute deprivation\" or a \"mere diminishment\" was key because \"differential treatment by wealth is impermissible only where it results in a total deprivation of a benefit because of poverty.\" Because Mr. Walker was not totally deprived of pretrial release but had to wait 48 hours at most to \"receive the same benefit as the more affluent,\" the Eleventh Circuit held that the \"district court was wrong to apply heightened scrutiny under the Equal Protection Clause.\"", "Other courts have held that bail systems that incarcerate indigent individuals without considering their ability to pay are unconstitutional. In Pierce v. City of Velda City , the district court issued a declaratory judgment, stating that \"no person may, consistent with the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution, be held in custody after an arrest because the person is too poor to post a monetary bond.\" Ultimately, the parties resolved the case through a settlement agreement that changed the jurisdiction's bail system."], "subsections": []}, {"section_title": "Conclusion", "paragraphs": ["Recognizing that \"[t]here can be no equal justice where the trial a man gets depends on the amount of money he has,\" the Supreme Court has invalidated statutes or actions that arguably punished individuals for indigence. But the Supreme Court has generally viewed pretrial release of criminal defendants to be a regulatory, rather than a penal, matter, noting that the government may have legitimate and, in some cases, compelling interests in limiting pretrial release for certain types of defendants. The Supreme Court has never squarely assessed whether applying money-bail systems to indigent criminal defendants as a class is permissible. Lower courts are split on whether money-bail systems impermissibly discriminate against indigents. Some courts have found money-bail systems to be constitutionally suspect, while others have upheld money-bail systems as rationally related to legitimate or compelling governmental interests, including providing for a defendant's subsequent court appearance."], "subsections": []}]}}
{"id": "RL33487", "title": "Armed Conflict in Syria: Overview and U.S. Response ", "released_date": "2019-03-25T00:00:00", "summary": ["Since 2011, the Syria conflict has presented significant policy challenges for the United States. (For a brief conflict summary, see Figure 2). U.S. policy toward Syria since 2014 has prioritized counterterrorism operations against the Islamic State (IS, also known as ISIL/ISIS), but also has included nonlethal assistance to Syrian opposition groups, diplomatic efforts to reach a political settlement to the civil war, and humanitarian aid to Syria and regional countries affected by refugee outflows. U.S. forces deployed to Syria have trained, equipped, and advised local partners under special authorization from Congress and have worked primarily \"by, with, and through\" those local partners to retake nearly all areas formerly held by the Islamic State.", "Following an internal policy review, Administration officials in late 2018 had described U.S. policy toward Syria as seeking (1) the enduring defeat of the Islamic State; (2) a political settlement to the Syrian civil war; and (3) the withdrawal of Iranian-commanded forces. President Trump's December 2018 announcement that U.S. forces had defeated the Islamic State and would leave Syria appeared to signal the start of a new U.S. approach. However, in February 2019, the White House stated that several hundred U.S. troops would remain in Syria, and the President is requesting $300 million in FY2020 defense funding to continue to equip and sustain Syrian partner forces. The FY2019 National Defense Authorization Act (P.L. 115-232) required the Administration to clarify its Syria strategy and report on current programs in order to obligate FY2019 defense funds for train and equip purposes in Syria.", "The United States continues to advocate for a negotiated settlement between the government of Syrian President Bashar al Asad and Syrian opposition forces in accordance with U.N. Security Council Resolution 2254 (which calls for the drafting of a new constitution and U.N.-supervised elections). However, the Asad government's use of force to retake most opposition-held areas of Syria has reduced pressure on Damascus to negotiate, and U.S. intelligence officials in 2019 assessed that Asad has little incentive to make significant concessions to the opposition. U.S. officials have stated that the United States will not contribute aid to reconstruction in Asad-held areas unless a political solution is reached.", "The United States has directed more than $9.1 billion toward Syria-related humanitarian assistance, and Congress has appropriated billions more for security and stabilization initiatives in Syria and neighboring countries. The Defense Department has not disaggregated the costs of military operations in Syria from the overall cost of the counter-IS campaign in Syria and Iraq (known as Operation Inherent Resolve, OIR), which had reached $28.5 billion by September 2018.", "The 115th Congress considered proposals to authorize or restrict the use of force against the Islamic State and in response to Syrian government chemical weapons attacks, but did not enact any Syria-specific use of force authorizations. The 116th Congress may seek clarification from the Administration concerning its overall Syria policy, plans for the withdrawal of U.S. military forces, the U.S role in ensuring a lasting defeat for the Islamic State, U.S. investments and approaches to postconflict stabilization, the future of Syrian refugees and U.S. partners inside Syria, and the challenges of dealing with the Iran- and Russia-aligned Asad government."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["In March 2011, antigovernment protests broke out in Syria, which has been ruled by the Asad family for more than four decades. The protests spread, violence escalated (primarily but not exclusively by Syrian government forces), and numerous political and armed opposition groups emerged. In August 2011, President Barack Obama called on Syrian President Bashar al Asad to step down. Over time, the rising death toll from the conflict, and the use of chemical weapons by the Asad government, intensified pressure for the United States and others to assist the opposition. In 2013, Congress debated lethal and nonlethal assistance to vetted Syrian opposition groups, and authorized the latter. Congress also debated, but did not authorize, the use of force in response to an August 2013 chemical weapons attack. ", "In 2014, the Obama Administration requested authority and funding from Congress to provide lethal support to vetted Syrians for select purposes. The original request sought authority to support vetted Syrians in \"defending the Syrian people from attacks by the Syrian regime,\" but the subsequent advance of the Islamic State organization from Syria across Iraq refocused executive and legislative deliberations onto counterterrorism. Congress authorized a Department of Defense-led train and equip program to combat terrorist groups active in Syria, defend the United States and its partners from Syria-based terrorist threats, and \"promote the conditions for a negotiated settlement to end the conflict in Syria.\" ", "In September 2014, the United States began air strikes in Syria, with the stated goal of preventing the Islamic State from using Syria as a base for its operations in neighboring Iraq. In October 2014, the Defense Department established Combined Joint Task Force-Operation Inherent Resolve (CJTF-OIR) to \"formalize ongoing military actions against the rising threat posed by ISIS in Iraq and Syria.\" CJTF-OIR came to encompass more than 70 countries, and has bolstered the efforts of local Syrian partner forces against the Islamic State. The United States also gradually increased the number of U.S. personnel in Syria from 50 in late 2015 to roughly 2,000 by late 2017. President Trump in early 2018 called for an expedited withdrawal of U.S. forces from Syria, but senior Administration officials later stated that U.S. personnel would remain in Syria to ensure the enduring defeat of the Islamic State. National Security Advisor John Bolton also stated that U.S. forces would remain in Syria until the withdrawal of Iranian-led forces. In December 2018, President Trump ordered the withdrawal of all U.S. forces from Syria, contributing to the subsequent decision by Defense Secretary James Mattis to resign, and drawing criticism from several Members of Congress. In early 2019, the White House announced that several hundred U.S. troops would remain in Syria. ", "The collapse of IS and opposition territorial control in most of Syria since 2015 has been matched by significant military and territorial gains by the Syrian government. The U.S. intelligence community's 2018 Worldwide Threat Assessment stated in February 2018 that, \"The conflict has decisively shifted in the Syrian regime's favor, enabling Russia and Iran to further entrench themselves inside the country.\" At the same time, ongoing conflict between the coalition's Syrian Kurdish partners and Turkey has continued to challenge U.S. policymakers, as has the entrenchment of Al Qaeda-affiliated groups among the opposition and the ongoing humanitarian crisis. As of 2019, 5.7 million Syrians are registered as refugees in nearby countries, with 6.2 million more internally displaced. ", "The U.N. has sponsored peace talks in Geneva since 2012, but it is unclear when (or whether) the parties might reach a political settlement that could result in a transition away from Asad. With many armed opposition groups weakened, defeated, or geographically isolated, military pressure on the Syrian government to make concessions to the opposition has been reduced. U.S. officials have stated that the United States will not fund reconstruction in Asad-held areas unless a political solution is reached in accordance with U.N. Security Council Resolution 2254. "], "subsections": []}, {"section_title": "Issues for Congress", "paragraphs": ["Congress has considered the following key issues since the outbreak of the Syria conflict in 2011: ", "What are the core U.S. national interests in Syria? What objectives derive from those interests? How should U.S. goals in Syria be prioritized? What financial, military, and personnel resources are required to implement U.S. objectives in Syria? What measures or metrics can be used to gauge progress? Should the U.S. military continue to operate in Syria? For what purposes and on what authority? For how long? How are developments in Syria affecting other countries in the region, including U.S. partners? What potential consequences of U.S. action or inaction should be considered? How might other outside actors respond to U.S. choices?", "Amid significant territorial losses by the Islamic State and Syrian opposition groups since 2015 and parallel military gains by the Syrian government and coalition partner forces, U.S. policymakers face a number of questions and potential decision points related to the following factors:"], "subsections": [{"section_title": "Counter-IS operations and the presence of U.S. military personnel in Syria", "paragraphs": ["The announcement by President Trump in December 2018 that U.S. forces would withdraw from Syria was welcomed by the Syrian government and its Russian and Iranian partners, along with observers who questioned the necessity, utility, and legality of continued U.S. operations. The decision also drew domestic and international criticism from those who argued it could enable the reemergence of the Islamic State and embolden Russia and Iran in Syria (see \" 2018: President Trump Announces Withdrawal \"). Some Members of Congress called upon President Trump to reconsider his decision to withdraw U.S. forces, stating that the move was premature and \"threatens the safety and security of the United States.\" Others embraced the decision, citing concerns about the lack of specific authorization for the U.S. campaign and the effectiveness of U.S. efforts. In February 2019, the White House reversed its December announcement, stating that roughly 400 U.S. troops would remain in Syria. ", "Members of the 116 th Congress may seek clarification on the Administration's strategy to ensure the enduring defeat of the Islamic State. A Lead Inspector General report on Operation Inherent Resolve (OIR) released in February 2019 states that, \"absent sustained [counterterrorism] pressure, ISIS could likely resurge in Syria within six to twelve months and regain limited territory in the [Middle Euphrates River Valley (MERV)].\" "], "subsections": []}, {"section_title": "The future of the Syria Train and Equip program", "paragraphs": ["The Islamic State has lost the territory it once held in Syria, and much of that territory is now controlled by local forces that have received U.S. training and assistance since 2014. (See Figure 3 and Figure 4 .) In 2017 and 2018, significant reductions in IS territorial control prompted some reevaluation of the Syria Train and Equip (T&E) program, whose primary purpose had been to support offensive campaigns against Islamic State forces. The Trump Administration requested $300 million in FY2019 Counter-ISIS Train and Equip Fund (CTEF) monies for Syria programs, largely intended to shift toward training local partners as a hold force. The Department of Defense Appropriations Act, 2019 ( P.L. 115-245 ) provided $1.35 billion for the CTEF account, slightly less than the Administration's requested amount for the overall account ($1.4 billion) based on congressional concerns about some Syria-related funds.", "The FY2017 National Defense Authorization Act (NDAA) extended the Syria T&E program's authority through the end of 2018, but the FY2018 NDAA did not extend it further, asking instead for the Trump Administration to submit a report on its proposed strategy for Syria by February 2018. The FY2019 NDAA ( P.L. 115-232 ) prohibited the obligation of FY2019 defense funds for the program until the strategy required by the FY2018 NDAA and an additional update report on train and equip efforts was submitted to Congress. The FY2019 act extended the Syria T&E authority through December 2019 but did not adjust the program's authorized scope or purposes. ", "The Administration's FY2020 defense funding request seeks an additional $300 million to equip and sustain vetted Syrian opposition (VSO) forces."], "subsections": []}, {"section_title": "The future of U.S. relations with the Asad government", "paragraphs": ["Strained U.S.-Syria ties prior to the start of the conflict, including Syria's designation as a State Sponsor of Terrorism, are reflected in a series of U.S. sanctions and legal restrictions that remain in place today. U.S. policy toward Syria since August 2011 has been predicated on a stated desire to see Bashar al Asad leave office, preferably through a negotiated political settlement. However, the Asad government\u2014backed by Russia and Iran\u2014has reasserted control over much of western Syria since 2015, and appears poised to claim victory in the conflict. In an acknowledgement of the conflict's trajectory, U.S. calls for Asad's departure have largely faded. In late 2018, senior Administration officials stated that while \"America will never have good relations with Bashar al Asad,\" the Syrian people ultimately \"get to decide who will lead them and what kind of a government they will have. We are not committed to any kind of regime change.\" Nevertheless, the Trump Administration has stated its intent to refrain from supporting reconstruction efforts in Syria until a political solution is reached in accordance with UNSCR 2254, which calls for constitutional reform and U.N.-supervised elections. "], "subsections": []}, {"section_title": "The future of U.S. assistance and stabilization programs in Asad-led Syria", "paragraphs": ["In the short term, policy discussions may focus on whether or how the Syrian government's reassertion of de facto control should affect U.S. military and assistance policy. The Trump Administration has directed a reorientation in U.S. assistance programs in Syria and has sought and arranged for new foreign contributions to support the stabilization of areas liberated from Islamic State control. The practical effect of this approach to date has been the drawdown of some assistance programs in opposition-held areas of northwestern Syria and the reprogramming of some U.S. funds appropriated by Congress for stabilization programs in Syria to other priorities. The future of U.S.-administered stabilization and other assistance programs in formerly opposition-held areas of Syria and areas currently held by U.S. partner forces is in question, in light of both the Asad government's reassertion of control in many areas, the planned reduction of U.S. military forces, and the December 2018 withdrawal of State Department and USAID personnel from northern Syria. ", "As noted above, the Administration has stated its intention to end U.S. nonhumanitarian assistance to Asad-controlled areas of the country until the Syrian government fulfills the terms of UNSCR 2254. The Administration also has stated its intent to use U.S. diplomatic influence to discourage other international assistance to government-controlled Syria in the absence of a credible political process.", "Then-U.N. Special Envoy for Syria Staffan de Mistura said in 2017 that Syria reconstruction will cost at least $250 billion, and a group of U.N.-convened experts estimated in August 2018 that the cost of conflict damage could exceed $388 billion. Congress may debate how the United States might best assist Syrian civilians in need, most of whom live in areas under Syrian government control, without inadvertently strengthening the Asad government or its Russian and Iranian patrons. "], "subsections": []}, {"section_title": "Syria-Related Legislation in the 116th Congress", "paragraphs": [], "subsections": [{"section_title": "Strengthening America's Security in the Middle East Act of 2019 (S. 1)", "paragraphs": ["Introduced on January 3 by Senator Rubio and three cosponsors, the bill incorporates the Senate version of the Caesar Syria Civilian Protection Act of 2018 considered during the 115 th Congress and passed by the House in a different version. Title III would require the Secretary of the Treasury to make a determination within 180 days of enactment on whether the Central Bank of Syria is a financial institution of primary money laundering concern. If so, the bill would require the Secretary to impose one or more of the special measures described in Section 5318A(b) of Title 31, United States Code. The bill also would expand the scope of secondary sanctions on Syria to include foreign persons who knowingly provide support to Russian or Iranian entities operating on behalf of the Syrian government. It would also make eligible for sanctions foreign persons who knowingly sell or provide military aircraft and energy sector goods or services, or who knowingly provide significant construction or engineering services to the government of Syria. The bill does include several suspension and waiver authorities for the President. Its provisions would expire five years after the date of enactment. "], "subsections": []}, {"section_title": "Caesar Syria Civilian Protection Act of 2019 (H.R. 31, S. 52)", "paragraphs": ["In January, the House passed the Caesar Syria Civilian Protection Act of 2019, introduced by Representative Engel ( H.R. 31 ). A version of the bill was also introduced in the Senate by Senators Risch, Menendez, and Rubio ( S. 52 ). An earlier version of the bill was considered during the 115 th Congress. H.R. 31 would eliminate Sections 103 to 303 of S. 52 (primarily amendments to the Syria Human Rights Accountability Act of 2012). The House bill retains all of the provisions found in Title III of S. 1 (see above). "], "subsections": []}, {"section_title": "No Assistance for Assad Act (H.R. 1706)", "paragraphs": ["Introduced in March by Representative Engel, the bill would state that it is the policy of the United States that U.S. foreign assistance made available for reconstruction or stabilization in Syria should only be used in a democratic Syria or in areas of Syria not controlled by the Asad government or aligned forces. Reconstruction and stabilization aid appropriated or otherwise available from FY2020 through FY2024 could not be provided \"directly or indirectly\" to areas under Syrian government control\u2014as determined by the Secretary of State\u2014unless the President certifies to Congress that the government of Syria has met a number of conditions. These include ceasing air strikes against civilians, releasing all political prisoners, allowing regular access to humanitarian assistance, fulfilling obligations under the Chemical Weapons Convention, permitting the safe and voluntary return of displaced persons, taking steps to establishing meaningful accountability for perpetrators of war crimes, and halting the development and deployment of ballistic and cruise missiles. The House passed an earlier version of the bill during the 115 th Congress.", "By noting restrictions on U.S. aid provided \"directly or indirectly,\" the bill also would limit U.S. funds that could flow into Syria via multilateral institutions and international organizations, including the United Nations, the International Monetary Fund, and the World Bank. The bill would permit exceptions to the above restrictions on aid to government-held areas for humanitarian projects, \"projects to be administered by local organizations that reflect the aims, needs, and priorities of local communities,\" and projects that meet basic human needs including drought relief; assistance to refugees, IDPs, and conflict victims; the distribution of food and medicine; and the provision of health services.", "The bill would also state that it is the sense of Congress that the United States should not fund projects in which any Syrian government official or immediate family member has a financial or material interest, or is affiliated with the implementing partner. "], "subsections": []}]}]}, {"section_title": "Recent Developments", "paragraphs": [], "subsections": [{"section_title": "Military", "paragraphs": [], "subsections": [{"section_title": "Islamic State Loses Last Territorial Stronghold", "paragraphs": ["On March 23, the Syrian Democratic Forces (SDF) announced that the Islamic State had lost its final stronghold in the eastern Syrian town of Baghouz. President Trump initially announced the group's defeat in December 2018, although Coalition and SDF operations against the group continued in 2019. In early March CENTCOM Commander General Joseph Votel stated that the territory held by the Islamic State had been reduced down to a single square mile near Baghouz, along the Euphrates River ( Figure 3 ). However, Votel also noted,", "we should be clear that what we are seeing now is not the surrender of ISIS as an organization, but a calculated decision to preserve the safety of their families and preservation of their capabilities by taking their chances in camps for internally displaced persons and going to ground and remote areas and waiting for the right time to resurge.", "Votel also noted that, \"ISIS population being evacuated from the remaining vestiges of caliphate largely remain unrepentant, unbroken, and radicalized. We will need to maintain a vigilant offensive against this now widely dispersed and disaggregated organization.\" Coalition officials previously have stated that they do not intend to operate in Syrian-government controlled territory, despite reports that IS militants remain present in those areas. ", "Continued attacks by the Islamic State in 2019 have raised concerns about the group's resiliency and potential to regenerate, particularly given plans to withdraw most U.S. military forces from Syria. On January 16, a suicide bombing claimed by the Islamic State killed 4 Americans and 15 others in the northern city of Manbij, in Aleppo province. One week later, a vehicle-borne improvised explosive device targeted a joint American-SDF patrol in the town of Ash Shaddadi in Hasakah province. Both cities were liberated from the Islamic State in 2016. The most recent Lead Inspector General report on Operation Inherent Resolve (OIR) states that, \"absent sustained [counterterrorism] pressure, ISIS could likely resurge in Syria within six to twelve months and regain limited territory in the [Middle Euphrates River Valley (MERV)].\"", "Prior to the Administration's withdrawal announcement in December 2018, U.S. officials had stated that once the conventional fight against the Islamic State was completed, the coalition would shift to a \"new phase\" focused on stabilization, including the training of local forces to hold liberated areas. These plans were reflected in the Defense Department and State Department requests for appropriations for FY2019. Following the Administration's February announcement that several hundred U.S. troops would remain in Syria, Chairman of the Joint Chiefs of Staff General Joseph Dunford stated, ", "[...] this is about campaign continuity. So we had a campaign that was designed to clear ISIS from the ground that they had held, and we always had planned to transition into a stabilization phase where we train local forces to provide security and prevent the regeneration of ISIS. So there is -- there is no change in the basic campaign, the resourcing is being adjusted because the threat has been changed.", "While military officials have emphasized the continuity of the U.S. military campaign, it is not clear whether the threat posed by the Islamic State is similarly unchanged, particularly as the group shifts from controlling territory to operating as what General Votel has described as a \"clandestine insurgency.\" U.S. officials in 2018 stated that the Islamic State had \"atomized,\" becoming more dispersed in its command and control, and posing a more decentralized threat. Former U.S. Special Envoy Brett McGurk, who resigned in December 2018, had stated that the \"defeat of the physical space is not the defeat of ISIS,\" noting that the group is less vulnerable to conventional military operations once it no longer holds large areas of territory. "], "subsections": []}, {"section_title": "Idlib: The Final Opposition Stronghold", "paragraphs": ["Idlib province has been under rebel control since 2015, hindering the Asad government's ability to transit directly from government-held areas in the south to Syria's largest city of Aleppo, in the north. While a range of opposition groups operate in Idlib, U.S. officials have described the province as a safe haven for Al Qaeda, while also highlighting the significant civilian presence. U.S. initiatives in Idlib aimed at countering violent extremism (CVE) were halted in May 2018 as part of a broader withdrawal of U.S. assistance to northwest Syria.", "De-escalation A rea & D emilitarized Z one . In May 2017, an agreement between Russia, Iran, and Turkey established the Idlib de-escalation area (encompassing all of Idlib province as well as portions of neighboring Lattakia, Aleppo, and Hama provinces). The agreement was designed to reduce violence between regime and opposition forces. However, regime forces continued to pursue military operations in the area, recapturing about half of the de-escalation area by mid-2018. Both regime and armed opposition forces expressed determination to control the remaining portions of Idlib, raising fears that a large-scale offensive pitting Syrian government forces against a mix of armed opposition and jihadist forces could trigger a humanitarian crisis for civilians in the area. In October 2018, Russia and Turkey created a demilitarized zone in parts of Idlib province to separate the two sides.", "2019 Jihadist Advance . In January 2019, the Al Qaeda-linked group Haya't Tahrir al Sham (HTS) seized large areas of Idlib province from rival armed groups, forcing them to accept an HTS-run civil administration. HTS was established in 2017 as a successor to the Nusra Front (Al Qaeda's formal affiliate in Syria). U.S. officials have stated that \"The core of HTS is Nusra,\" and amended the FTO designation of the Nusra Front in May 2018 to include HTS as an alias."], "subsections": [{"section_title": "Al Qaeda in Idlib", "paragraphs": ["U.S. officials in mid-2017 described Idlib province as \"the largest Al Qaeda safe haven since 9/11.\" Beginning in 2014, the United States conducted a series of air strikes, largely in Idlib province, against Al Qaeda targets. These strikes fell outside the framework of Operation Inherent Resolve (which focuses on the Islamic State), and U.S. officials stated that they were conducted on the basis of the 2001 AUMF. At least a dozen foreign Al Qaeda leaders have been killed in Syria since 2014, mostly in Idlib. A February 2017 U.S. drone strike in Idlib killed the deputy leader of Al Qaeda, and a U.S. strike on an Al Qaeda training camp in Idlib the previous month killed more than 100 Al Qaeda fighters. ", "In addition to HTS, the intelligence community's 2019 worldwide threat assessment also referenced another Al Qaeda-linked group in Syria known as Hurras al Din (\"Guardians of Religion\"). While HTS and Hurras al Din have occasionally clashed in Idlib, some analysts have assessed that the two groups \"serve different functions that equally serve al-Qa`ida's established objectives: one appeals to hardened jihadis with an uncompromising doctrine focused on jihad beyond Syria and one appeals to those focused on the Syrian war.\" In February 2019, the two groups signed an accord pledging broader cooperation. "], "subsections": []}, {"section_title": "Risk of Escalation", "paragraphs": ["The 2019 expansion of jihadist groups in Idlib has raised concern about the potential for renewed Syrian and/or Russian operations in the area. In March 2019, Syrian and Russian strikes in Idlib reportedly intensified to their highest level in months. U.N. officials have described Idlib as a \"dumping ground\" for fighters and civilians\u2014including an estimated 1 million children\u2014evacuated or displaced from formerly opposition-held areas in other parts of the country. U.N. officials have warned that a mass assault on Idlib could result in \"the biggest humanitarian catastrophe we've seen for decades.\" "], "subsections": []}]}, {"section_title": "Turkish Operations in Northern Syria35", "paragraphs": ["Turkey has maintained a military presence in northern Syria since 2016, and currently has forces deployed in Aleppo and Idlib provinces. Turkish forces partner with local Arab militias and have conducted border operations against the Islamic State and other jihadist fighters, while also targeting Syrian Kurdish forces. ", "President Trump has stated that Turkey could play a larger role in countering the Islamic State in Syria, although it is unclear to what extent U.S. and Turkish objectives overlap. Turkish officials have openly stated that their objectives are not limited to IS militants, and that they also intend to expand military operations against Kurdish forces\u2014including those that have been allied with the United States as part of the counter-IS campaign. It is unclear to what extent Ankara is prepared to launch counter-IS operations in parts of Syria not adjacent to Turkey's border. U.S. military officials have noted that Turkey has not participated in ground operations against the Islamic State in Syria since 2017, and that Turkish forces have not participated in the fight against the Islamic State in the Middle Euphrates River Valley (MERV), which is roughly 230 miles away from the Turkish border. Turkish officials have requested U.S. air and logistical support for their potential operations, despite the two countries' different stances on the YPG.", "In January 2019, President Trump proposed the creation of a 20-mile deep \"safe zone\" on the Syria side of the border. Secretary of State Mike Pompeo later said that the U.S. \"twin aims\" are to make sure that those who helped take down the IS caliphate have security, and to prevent terrorists from attacking Turkey out of Syria. It is unclear who would enforce such a zone. Some sources suggest that U.S. officials favor having a Western coalition patrol any kind of buffer zone inside the Syrian border, with some U.S. support, while Turkey wants its forces together with allied Syrian opposition partners to take that role. Kurdish representatives have said that a safe zone must be guaranteed by international forces."], "subsections": []}, {"section_title": "Israeli Strikes in Syria", "paragraphs": ["In September 2018, Israeli Intelligence Minister Israel Katz said, \"in the last two years Israel has taken military action more than 200 times within Syria itself.\" Israeli strikes in Syria have mostly targeted locations and convoys near the Lebanese border associated with weapons shipments to Lebanese Hezbollah. However, in 2018, strikes widely attributed to Israel for the first time directly targeted Iranian facilities and personnel in Syria. ", "In September 2018, Israel struck military targets in Syria's coastal province of Lattakia. A Syrian antiaircraft battery responding to the Israeli strikes downed a Russian military plane, killing 15 Russian personnel. An IDF spokesperson stated that Israeli jets were targeting \"a facility of the Syrian Armed Forces from which systems to manufacture accurate and lethal weapons were about to be transferred on behalf of Iran to Hezbollah in Lebanon.\" The spokesperson added that the IDF and the Russian military maintain a deconfliction system in Syria, stating that the Russian plane was not in the area of operation during the Lattakia strike and blaming \"extensive and inaccurate\" Syrian antiaircraft fire for the incident. In response to the downing of their plane, Russian defense officials announced plans to provide an S-300 air defense system to Syria. ", "The expanding presence of Iranian and Iranian-backed personnel in Syria remains a consistent point of tension between Israel and Iran. In a rare acknowledgement, Israeli military officials in January 2019 confirmed strikes on Iranian military targets in Syria. Israel has accused Hezbollah of establishing a cell in Syrian-held areas of the Golan Heights, with the eventual goal of launching attacks into Israel. ", "For additional information, see CRS In Focus IF10858, Iran and Israel: Tension Over Syria , by Carla E. Humud, Kenneth Katzman, and Jim Zanotti."], "subsections": []}]}, {"section_title": "Political Negotiations", "paragraphs": [], "subsections": [{"section_title": "The Geneva Process", "paragraphs": ["Since 2012, the Syrian government and opposition have participated in U.N.-brokered negotiations under the framework of the Geneva Communiqu\u00e9. Endorsed by both the United States and Russia, the Geneva Communiqu\u00e9 calls for the establishment of a transitional governing body with full executive powers. According to the document, such a government \"could include members of the present government and the opposition and other groups and shall be formed on the basis of mutual consent.\" The document does not discuss the future of Asad. ", "Subsequent negotiations have made little progress, as both sides have adopted differing interpretations of the agreement. The opposition has said that any transitional government must exclude Asad. The Syrian government maintains that Asad was reelected (by referendum) in 2014, and notes that the Geneva Communiqu\u00e9 does not explicitly require him to step down. In the Syrian government's view, a transitional government can be achieved by simply expanding the existing government to include members of the opposition. Asad has also stated that a political transition cannot occur until \"terrorism\" has been defeated, which his government defines broadly to include all armed opposition groups.", "As part of the Geneva Process, U.N. Security Council Resolution (UNSCR) 2254, adopted in 2015, endorsed a \"road map\" for a political settlement in Syria, including the drafting of a new constitution and the administration of U.N.-supervised elections. U.S. officials continue to stress that a political solution to the conflict must be based on the principles of UNSCR 2254.", "The last formal round of Geneva talks, facilitated by then-U.N. Special Envoy for Syria Staffan de Mistura, closed in late January 2018. While the United States continues to call for a political settlement to the conflict, the U.S. intelligence community has assessed that Asad is \"unlikely to negotiate himself from power\" or make meaningful concession to the opposition:", "The regime's momentum, combined with continued support from Russia and Iran, almost certainly has given Syrian President Bashar al-Asad little incentive to make anything more than token concessions to the opposition or to adhere to UN resolutions on constitutional changes that Asad perceives would hurt his regime. ", "The United States has repeatedly expressed its view that Geneva should be the sole forum for a political settlement to the Syria conflict, possibly reflecting concern regarding the Russia-led Astana Process. However, the United States supported de Mistura's efforts throughout 2018 to stand up a Syrian Constitutional Committee, an initiative originally stemming from the Russian-led Sochi conference in January 2018 (see below). De Mistura resigned in December 2018, and was succeeded by veteran Norwegian diplomat Geir Pederson. As of early 2019, Pederson has continued De Mistura's efforts to convene a constitutional committee. "], "subsections": []}, {"section_title": "The Astana Process", "paragraphs": ["Since January 2017, peace talks hosted by Russia, Iran, and Turkey have convened in the Kazakh capital of Astana. These talks were the forum through which three \"de-escalation areas\" were established\u2014two of which have since been retaken by Syrian military forces. The United States is not a party to the Astana talks but has attended as an observer delegation. ", "Russia has played a leading role in the Astana process, which some have described as an alternate track to the Geneva process. The United States has strongly opposed the prospect of Astana superseding Geneva. Following the release of the Joint Statement by President Trump and Russian President Putin on November 11, 2017 (in which the two presidents confirmed that a political solution to the conflict must be forged through the Geneva process pursuant to UNSCR 2254), U.S. officials stated that ", "We have started to see signs that the Russians and the regime wanted to draw the political process away from Geneva to a format that might be easier for the regime to manipulate. Today makes clear and the [Joint Statement] makes clear that 2254 and Geneva remains the exclusive platform for the political process.", "The 11 th round of Astana talks was held in November 2018. In February 2019, the presidents of Russia, Iran, and Turkey held a trilateral summit at the Russian Black Sea resort of Sochi to discuss the future of Idlib, anticipated changes to the U.S. military presence in Syria, and how to move forward on the formation of a constitutional committee.", "Constitutional Committee . Despite the November 2017 agreement, Russia persisted in its attempts to host, alongside Iran and Turkey, a \"Syrian People's Congress\" in Sochi, intended to bring together Syrian government and various opposition forces to negotiate a postwar settlement. The conference, held in January 2018, was boycotted by most Syrian opposition groups and included mainly delegates friendly to the Asad government. Participants agreed to form a constitutional committee comprising delegates from the Syrian government and the opposition \"for drafting of a constitutional reform,\" in accordance with UNSCR 2254. The statement noted that final agreement regarding the mandate, rules of procedure, and selection criteria for delegates would be reached under the framework of the Geneva process. The United States supports the formation of the committee under U.N. auspices, but has emphasized that \"the United Nations must be given a free hand to determine the composition of the committee, its scope of work, and schedule.\" ", "Following the 2018 Sochi Conference, de Mistura sought to reach consensus among the parties regarding delegates for the constitutional committee. The committee's membership is to be divided in equal thirds between delegates from the Syrian government, Syrian opposition, and delegates selected by the U.N. comprising Syrian experts, civil society, independents, tribal leaders, and women. The sticking point remains this latter, U.N.-selected group, known as the \"middle third list.\" The Syrian government has objected to the U.N.'s role in naming delegates to the list, describing the constitution as \"a highly sensitive matter of national sovereignty.\" "], "subsections": []}, {"section_title": "Kurdish Outreach to Asad Government", "paragraphs": ["In July 2018, the Syrian Democratic Council (SDC), the political wing of the U.S.-backed Syrian Democratic Forces (SDF), opened formal discussions with the Syrian government. The Kurdish-held areas in northern Syria, comprising about a quarter of the country, are the largest remaining areas outside of Syrian government control. Asad has stated that his government intends to recover these areas, whether by negotiations or military force. In early 2019, the U.S. intelligence community also assessed that the Asad government was \"likely to focus on reasserting control over Kurdish-held areas.\"", "Following President Trump's announcement in December 2018 that the United States shortly would withdraw forces from Syria, Kurdish leaders sought Asad government protection from a possible Turkish attack. Turkey, which captured the Kurdish enclave of Afrin in northern Syria in 2018, has stated its intent to expand its military operations against PYD and YPG elements in Syria, and Kurdish concerns about such an operation appear to have accelerated talks between Kurdish representatives and the Asad government. The PYD is not a party to the ongoing talks in Geneva between Syrian government and opposition forces, despite the fact that its YPG militia controls the vast majority of territory that remains outside of Syrian government control. "], "subsections": []}]}, {"section_title": "Humanitarian Situation", "paragraphs": ["As of 2019, nearly 12 million people in Syria are in need of humanitarian assistance, 6.2 million Syrians are internally displaced, and an additional 5.6 million Syrians are registered with the U.N. High Commissioner for Refugees (UNHCR) as refugees in nearby countries. ", "The Syrian government has long opposed the provision of humanitarian assistance across Syria's border and across internal lines of conflict outside of channels under Syrian government control. Successive U.N. Security Council resolutions have nevertheless authorized the provision of such assistance. The Syrian government further seeks the prompt return of Syrian refugees from neighboring countries, while humanitarian advocates and practitioners raise concern about forced returns and the protection of returnees from political persecution and the difficult conditions prevailing in Syria. ", "The U.N. Secretary-General regularly reports to the Security Council on humanitarian issues and challenges in and related to Syria pursuant to Resolutions 2139 (2014), 2165 (2014), 2191 (2014), 2258 (2015), 2332 (2016), 2393 (2017), 2401 (2018), and 2449 (2018)."], "subsections": [{"section_title": "U.S. Humanitarian Funding", "paragraphs": ["The United States is the largest donor of humanitarian assistance to the Syria crisis, drawing from existing funding from global humanitarian accounts and some reprogrammed funding. As of March 2019, total U.S. humanitarian assistance for the Syria crisis since 2011 had reached more than $9.5 billion. Of this total, roughly $4.7 billion has gone toward meeting humanitarian needs inside Syria, while the remainder has supported host communities in Lebanon, Jordan, Turkey, Iraq, and Egypt that host Syrian refugees. ", "The Trump Administration's FY2020 request would eliminate funding for the International Disaster Assistance (IDA) account as well as funding for overseas humanitarian assistance programs previously funded through the Migration and Refugee Assistance (MRA) account. Instead, it requests $5.9 billion in funding for a new International Humanitarian Assistance (IHA) account, intended to consolidate all U.S. overseas humanitarian programming into a single account. Funds requested for the IHA account would fund the U.S. humanitarian response in Syria and other crisis areas."], "subsections": []}, {"section_title": "International Humanitarian Funding", "paragraphs": ["Multilateral humanitarian assistance in response to the Syria crisis includes both the Regional Refugee and Resilience Plan (3RP) and the Humanitarian Response Plan (HRP). The 3RP is designed to address the impact of the conflict on Syria's neighbors, and encompasses the Lebanon Crisis Response Plan, the Jordan Response Plan, and country chapters in Turkey, Iraq, and Egypt. It includes a refugee/humanitarian response coordinated by UNHCR and a \"resilience\" response (stabilization-based development assistance) led by the U.N. Development Program (UNDP). ", "In parallel to the 3RP, the HRP for Syria is designed to address the crisis inside the country through a focus on humanitarian assistance, civilian protection, and increasing resilience and livelihood opportunities, in part by improving access to basic services. This includes the reconstruction of damaged infrastructure (water, sewage, electricity) as well as the restoration of medical and education facilities and infrastructure for the production of inputs for sectors such as agriculture. ", "In 2019, U.N. officials warned that the Syria conflict was not over, and that significant humanitarian needs remain. The 2019 3RP appeal seeks $5.5 billion and the HRP for Syria seeks $3.3 billion, on par with previous years. U.N. officials have noted that the 2018 3RP appeal was funded at 62%, while the Syria HRP was funded at 65%. "], "subsections": []}]}]}, {"section_title": "U.S. Policy", "paragraphs": ["Since 2011, U.S. policy toward the unrest and conflict in Syria has attempted to pursue parallel interests and manage interconnected challenges, with varying degrees of success. Among the objectives identified by successive Administrations and by many Members in successive sessions of Congress have been", "supporting Syrian-led efforts to demand more representative, accountable, and effective governance; seeking a negotiated settlement that includes a transition in Syria away from the leadership of Bashar al Asad and his supporters; limiting or preventing the use of military force by state and nonstate actors against civilian populations; mitigating transnational threats posed by Syria-based Islamist extremist groups; meeting the humanitarian needs of internally and externally displaced Syrians; preventing the presence and needs of Syrian refugees from destabilizing neighboring countries; limiting the negative effects of other third party interventions on regional and international balances of power; and responding to and preventing the use of chemical weapons. ", "As Syria's conflict has changed over time from civil unrest to nationwide military conflict involving multiple internal and external actors to the apparent resurgence of the Asad government, the policies, approaches, and priorities of the United States and others also have changed. As of late 2018, the United States and its Syrian and regional partners have not succeeded in inducing or compelling Syrian President Bashar al Asad to leave office or secured a fundamental reorientation of Syria's political system as part of a negotiated settlement process. The United States continues to advocate for an inclusive negotiated solution, but has largely acquiesced to Asad's resumption of political and security control. Forceful interventions in Syria by Russia, Iran, Turkey, the United States, and Israel have created a fundamentally different set of calculations for policymakers to consider relative to those that prevailed prior to the conflict. "], "subsections": [{"section_title": "Trump Administration Syria Policy Evolves in 2018", "paragraphs": ["In 2018, the Administration's Syria policy underwent significant changes, reflecting an internal policy review as well as apparent differences of opinion between President Trump and senior military and diplomatic officials. In January 2018, then-Secretary of State Rex Tillerson stated that \"the United States will maintain a military presence in Syria focused on ensuring that ISIS cannot re-emerge.\" Tillerson stated that the United States intended to carry out stabilization initiatives in areas liberated from IS control, pursue measures to de-escalate the conflict, partner with allies to address counterterrorism goals, encourage U.N.-mediated peace efforts, and provide targeted reconstruction in areas liberated from the Islamic State. This approach was echoed by CENTCOM Commander General Votel, who said in testimony that, \"after we have removed [ISIS] from their control of the terrain, we have to consolidate our gains and we have to ensure that the right security and stability is in place so that they cannot resurge.\"", "In March 2018, President Trump fired Secretary Tillerson. The President later stated that U.S. troops in Syria would be \"coming out of Syria, like, very soon.\" Speaking about Syria on April 3, Trump reiterated, \"I want to get out. I want to bring our troops back home.\" Military officials sought to downplay any divisions within the Administration, stating, \"... as we reach finality against ISIS in Syria, we're going to adjust the level of our presence there. So in that sense, nothing actually has changed.\" An April 7 chemical weapons attack by the Syrian government and subsequent U.S., British, and French air strikes on Syrian CW facilities also appeared to temper the President's calls for a quick U.S. military withdrawal from the country.", "However, by May 2018, the Administration had begun to shift away from direct U.S. funding of stabilization programs in areas of Syria recently liberated from IS control. The Administration moved to end a range of U.S. nonlethal, nonhumanitarian assistance programs for opposition-held communities in southern and northwestern Syria, including in Idlib province. At the same time, officials continued to stress the importance of a sustained U.S. presence in the country. In July, then-Defense Secretary Mattis stated that U.S. military forces were focused on the \"last bastions\" of the Islamic State in Syria, adding, \"As that falls, then we'll sort out a new situation. But what you don't do is simply walk away and\u2014and leave the place as devastated as it is, based on this war. You don't just leave it, and then ISIS comes back.\" ", "In August, Administration officials announced that the State Department would \"redirect approximately $230 million in stabilization funds for Syria.\" In August and September, the Administration notified Congress that these funds, originally appropriated as FY2017 ESF-OCO, would be reprogrammed to meet other priorities. Administration officials also stated that the United States intended to rely on contributions from foreign partners, including a $100 million contribution from Saudi Arabia and contributions from the United Arab Emirates and Germany, to continue stabilization efforts in northeastern Syria.", "In the fall of 2018, Administration officials began to articulate a three-track Syria strategy which included seeking the enduring defeat of the Islamic State, achieving a political settlement to the Syrian civil war based on the terms of UNSCR 2254, and inducing the departure of all Iranian-commanded forces from Syria. In September 2018, U.S. National Security Advisor John Bolton stated, \"We're not going to leave [Syria] as long as Iranian troops are outside Iranian borders and that includes Iranian proxies and militias.\" ", "In November 2018, Ambassador James F. Jeffrey\u2014appointed in August as the Secretary of State's Special Representative for Syria Engagement\u2014stated that, \"U.S. troops will stay on in Syria we say until the enduring defeat of ISIS which means to establish the conditions so that local forces, local populations, local governments, can deal with ISIS as a terrorist or as an insurgent movement.\" In December, then-Special Presidential Envoy for the Global Coalition to Defeat ISIS Brett McGurk stated that, \"Even as the end of the physical caliphate is clearly now coming into sight, the end of ISIS will be a much more long-term initiative,\" adding, \"Nobody is declaring a mission accomplished.\" McGurk also stated that ", "if we've learned one thing over the years, enduring defeat of a group like this means you can't just defeat their physical space and then leave; you have to make sure the internal security forces are in place to ensure that those gains, security gains, are enduring. "], "subsections": []}, {"section_title": "2018: President Trump Announces Withdrawal of U.S. Forces", "paragraphs": ["President Trump announced on December 19 that U.S. forces would be returning from Syria \"now.\" He stated, \"We have defeated ISIS in Syria, my only reason for being there during the Trump Presidency.\" Pentagon Spokesperson Dana White later stated that while the U.S.-led coalition had liberated IS-held territory, the campaign against the group was not over. Nevertheless, a Pentagon spokesperson confirmed that the Defense Department had \"started the process of returning U.S. troops home\" from Syria, and State Department personnel reportedly were evacuated from Syria within 24 hours of the announcement.", "The announced troop withdrawal came as a surprise to senior military and diplomatic officials, who publicly had stated that the United States intended to remain inside Syria to carry out stabilization operations. The week prior to the announcement, Brett McGurk had emphasized that the Islamic State is likely to be a resilient force, stating, ", "There's clandestine cells. Nobody is saying that they are going to disappear. Nobody is that naive. So we want to stay on the ground and make sure that stability can be maintained in these areas [...] obviously, it would be reckless if we were just to say, well, the physical caliphate is defeated, so we can just leave now. ", "Following the announcement, some Defense and State Department officials reportedly sought to persuade the White House to reconsider the withdrawal. On December 20, Defense Secretary Mattis submitted his resignation. On December 22, Brett McGurk announced that he would accelerate his resignation as Special Presidential Envoy for the Global Coalition to Defeat ISIS, stating that, \"The recent decision by the president came as a shock and was a complete reversal of policy that was articulated to us [\u2026] I ultimately concluded that I could not carry out these new instructions and maintain my integrity.\" ", "The Syria withdrawal announcement was criticized by many Members of Congress, but some Members embraced the decision as overdue. Senators Graham, Shaheen, Ernst, King, Cotton, and Rubio drafted an open letter to President Trump, stating, \"We believe that such action at this time is a premature and costly mistake that not only threatens the safety and security of the United States, but also emboldens ISIS, Bashar al Assad, Iran, and Russia.\" Senator Graham also drafted a nonbinding resolution ( S.Res. 738 ) calling on the President to reconsider his decision. In contrast, Senator Rand Paul and Representatives Ted Lieu and Ro Khanna praised the President's decision, citing concerns about the wisdom, effectiveness, and authorization for U.S. operations. ", "Some U.S. allies also criticized the decision, including coalition partners in the counter-IS campaign such as France and the United Kingdom. A spokesperson for the French Defense Ministry stated that French air strikes against the Islamic State in Syria would continue. Britain's defense minister disputed the claim that the Islamic State had been defeated, saying that the group had morphed into another form and was \"very much alive.\" In contrast, Russian President Putin praised the U.S. move toward withdrawal, calling it \"correct.\" Turkish leaders also welcomed the U.S. decision, which some reports described as having been influenced by a call between President Trump and Turkish President Erdogan. "], "subsections": [{"section_title": "2019: Some U.S. Troops to Remain in Syria", "paragraphs": ["In early January, U.S. forces began withdrawing equipment\u2014but not personnel\u2014from Syria. In late February, the White House announced that the United States would leave approximately 400 troops in Syria, reversing President Trump's December withdrawal announcement. These troops reportedly are intended to form part of a multinational force of roughly 800-1,500 military personnel, which the Administration intends to solicit mostly from NATO member states. ", "When asked about the mission of the remaining U.S. contingent in Syria, Chairman of the Joint Chiefs of Staff General Joseph Dunford stated, ", "It's the same -- we're -- this is about campaign continuity. So we had a campaign that was designed to clear ISIS from the ground that they had held, and we always had planned to transition into a stabilization phase where we train local forces to provide security and prevent the regeneration of ISIS. So there is -- there is no change in the basic campaign, the resourcing is being adjusted because the threat has been changed.", "In March 2019, the Wall Street Journal , citing unnamed U.S. officials, reported that the U.S. military was preparing to leave as many as 1,000 troops in Syria. In a statement, General Dunford described this claim as \"factually incorrect.\" Other reports citing U.S. officials have stated that the number of U.S. forces to remain in Syria ultimately will depend on the number of forces pledged by allied states. The Administration's FY2020 defense funding request assumes for budgeting purposes that more than 7,000 U.S. military personnel will be deployed to Iraq and Syria in FY2020. ", "It is unclear whether USAID and State Department personnel will redeploy to Syria to spearhead stabilization projects. Administration officials have stated that they are seeking increased coalition financial contributions to continue Syria stabilization efforts. The Administration's FY2020 foreign assistance request states that the United States will seek to \"leverage\" additional partner contributions. The request does not include funding for specific assistance programs in Syria but states that funds designated for Relief and Recovery Fund purposes could be used in Syria. "], "subsections": []}]}, {"section_title": "President Trump Recognizes Israeli Claim to Golan Heights", "paragraphs": ["On March 25, President Trump issued a proclamation recognizing the Golan Heights as part of the state of Israel. The Golan Heights, a roughly 450-square-mile plateau situated between Israel and Syria, has been disputed since 1967, when Israel captured most of the area from Syria. U.N. Security Council resolutions have called for the final status of the area to be determined via negotiations between the two sides. In 1974, U.N. Security Council Resolution 350 established the United Nations Disengagement Observer Force (UNDOF) to monitor a separation zone between Israel and Syria on the Golan Heights. In 1981, Israel effectively annexed the Golan Heights unilaterally by applying Israeli law to the area. In December 1981, the Security Council voted unanimously to adopt Resolution 497, stating that the annexation was \"null and void and without international legal effect.\" Syria condemned the Trump Administration's March 2019 recognition of Israeli sovereignty, describing it as a \"flagrant violation\" of U.N. resolutions regarding the status of the Golan. For additional information, see CRS Insight IN11081, Israel and Syria in the Golan Heights: President Trump Voices Support for Israeli Sovereignty Claim , by Jim Zanotti and Carla E. Humud."], "subsections": []}, {"section_title": "Presidential Authority to Strike Syria under U.S. Law107", "paragraphs": ["Since 2011, Members of Congress and successive Administrations have debated presidential authority to conduct military operations in Syria absent a declaration of war. This has, over time, included debates regarding the potential imposition of no-fly zones over areas of the country to protect civilians, operations against various extremist groups, force protection for U.S. military personnel and partner forces inside Syria, and strikes against Syrian chemical weapons facilities and related forces. In April 2018, U.S. missile strikes targeted chemical weapons-related facilities in Syria, in response to a chemical weapons attack in the city of Douma. The strikes occurred just over a year after the U.S. strike on Al Shayrat airbase in Homs province, following the sarin gas attack in Khan Sheikhoun. Describing the Administration's view of the authorities underlying the 2018 operation, Defense Secretary Mattis stated ", "As our commander in chief, the president has the authority under Article II of the Constitution to use military force overseas to defend important U.S. national interests. The United States has an important national interest in averting a worsening catastrophe in Syria, and specifically deterring the use and proliferation of chemical weapons.", "Similarly, in an April 8, 2017, letter to Congress, President Trump had stated that he had acted \"pursuant to my constitutional authority to conduct foreign relations and as Commander in Chief and Chief Executive\" in ordering the April 6, 2017, U.S. missile strikes on Al Shayrat airbase. In the letter, President Trump says that he \"acted in the vital national security and foreign policy interests of the United States,\" and that, \"the United States will take additional action, as necessary and appropriate, to further its important national interests.\" ", "In the past, Presidents have justified the use of military force by relying on presidential powers they assert are inherent under Article II Commander in Chief and Chief Executive authority. The executive branch has claimed that a President may use military force to defend U.S. national security interests (even when an immediate threat to the United States and its Armed Forces is not necessarily apparent) and to promote U.S. foreign policy.", "In 2017 and 2018, the U.S. military used force against the Syrian government and its allies on limited occasions for force-protection purposes, including for the protection of U.S. partner forces. In an August 2017 letter to Senate Foreign Relations Committee Chairman Senator Bob Corker, the State Department asserted that \"the 2001 AUMF also provides authority to use force to defend U.S., Coalition and partner forces engaged in the campaign to defeat ISIS to the extent such use of force is a necessary and appropriate measure in support of counter-ISIS operations.\" The letter states the Administration's view that", "The strikes taken by the United States in May and June 2017 against the Syrian Government and pro-Syrian-Government forces were limited and lawful measures to counter immediate threats to U.S. or partner forces engaged in that campaign. The United States does not seek to fight the Syrian Government or pro-Syrian-Government forces. However, the United States will not hesitate to use necessary and proportionate force to defend U.S., Coalition, or partner forces engaged in the campaign against ISIS.", "Congress has debated Syria-specific and Islamic State-focused authorization for military force proposals intermittently in recent years. In 2013, the Senate Foreign Relations Committee considered and reported a proposed authorization for the use of military force following a chemical weapons attack in the suburbs of Damascus, Syria ( S.J.Res. 21 , 113 th Congress). The Senate did not consider the measure further. ", "Since U.S. military action against the Islamic State began in June 2014, starting in Iraq and then spreading to Syria, Congress also has debated the need for enactment of a new IS-specific authorization for use of military force. President Obama asserted that the campaign against the Islamic State in Iraq and Syria was authorized by both the Authorization for Use of Military Force (2001 AUMF; P.L. 107-40 ; claiming that the Islamic State was a successor organization of Al Qaeda and that elements of Al Qaeda were present in Syria) and Authorization for Use of Military Force Against Iraq Resolution of 2002 (2002 AUMF; P.L. 107-243 ; claiming authority to defend Iraq from the Islamic State threat). As noted above, Senate committees held hearings on a proposed new AUMF ( S.J.Res. 59 ) in 2018."], "subsections": []}]}, {"section_title": "U.S. Assistance", "paragraphs": [], "subsections": [{"section_title": "U.S. Military Operations in Syria and U.S. Train, Advise, Assist, and Equip Efforts", "paragraphs": [], "subsections": [{"section_title": "U.S. Military Presence in Syria", "paragraphs": ["Since 2015, U.S. forces have operated in Syria in support of the counter-IS campaign. Roughly 2,000 U.S. military personnel conduct train and equip program-related activities as well as \"advise and assist\" operations in support of U.S. partner forces. The Special Operations Joint Task Force, Operation Inherent Resolve (SOJTF-OIR) led by Brigadier General Patrick B. Roberson has been \"the primary advise, assist and accompany force in Syria, working closely with the SDF.\" SOJTF-OIR has reported to the Combined Joint Task Force-Operation Inherent Resolve (CJTF-OIR), which leads the international coalition to defeat the Islamic State in Iraq and Syria. In September 2018, Lieutenant General Paul LaCamera assumed command of CJTF-OIR. U.S. forces have operated in northern and eastern Syria in partnership with the SDF and in southwest Syria in partnership with the Maghawir al Thawra militia near the At Tanf garrison adjacent to the tri-border area shared by Syria, Jordan, and Iraq. "], "subsections": [{"section_title": "Military Authorities", "paragraphs": ["As discussed above (\" Presidential Authority to Strike Syria under U.S. Law \"), U.S. strike operations against the Islamic State and Al Qaeda-affiliated targets in Syria are conducted pursuant to the 2001 Authorization for Use of Military Force. U.S. forces have operated in Syria for train and equip program purposes as well as to advise and assist U.S. partner forces, whether or not those specific partner forces were trained and/or armed under the train and equip program. Such \"advise and assist\" activities may have been conducted pursuant to the authorities outlined by train and equip program provisions or pursuant to other defense authorities defined in law or asserted by the executive branch. This includes military operations against IS targets conducted pursuant to the 2001 Authorization for Use of Military Force. U.S. operations in Syria also are supported in part by the 2014 request of the Iraqi government to the U.N. Security Council for military support to address the threat of terrorism emanating from Syria."], "subsections": []}]}, {"section_title": "Syria Train and Equip Program", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["In 2014, Congress created a new authority for the Department of Defense (DOD) to train and equip select Syrians in the FY2015 National Defense Authorization Act (NDAA, Section 1209 of P.L. 113-291 , as amended). This authority, as amended by subsequent legislation, enables DOD \"to provide assistance, including training, equipment, supplies, stipends, construction of training and associated facilities, and sustainment, to appropriately vetted elements of the Syrian opposition and other appropriately vetted Syrian groups and individuals.\" Such assistance activities are authorized for select purposes, including supporting U.S. efforts to combat the Islamic State and other terrorist organizations in Syria and promoting the conditions for a negotiated settlement to Syria's civil war. ", "Congress has not appropriated funds specifically for the Syria train and equip program since the program's inception. Rather, Congress has authorized the Department of Defense to reprogram funds from global counterterrorism assistance accounts to operations and maintenance accounts to support program activities, with each reprogramming subject to the prior approval of the four congressional defense committees. As of March 2019, more than $2.5 billion has been reprogrammed or requested for the program. ( Table 1 provides information about program funding and related requests.) "], "subsections": []}]}, {"section_title": "FY2019 Legislation", "paragraphs": ["The FY2019 NDAA ( P.L. 115-232 ) extends the program's authorization through the end of 2019, but also places limitations on the use of FY2019 funds for the program until certain requirements have been met. The act prohibits the obligation or expenditure of funds authorized to be appropriated for FY2019 until both (1) the President submits the report on U.S. strategy in Syria required by Section 1221 of the FY2018 NDAA ( P.L. 115-91 ), and (2) the Secretary of Defense submits a separate report to the congressional defense committees regarding the program. The act also requires the Secretary of Defense to submit a written certification quarterly on matters including progress on stabilization as well as any human rights violations committed by U.S.-supported groups. The act continues to apply the prior approval reprogramming requirements applied to date for the use of appropriated funds. The Department of Defense Appropriations Act, 2019 ( P.L. 115-245 ) provides $1.35 billion for the CTEF account, slightly less than the Administration's requested amount for the overall account ($1.4 billion). As in previous years, the text of the act does not specify the amount for Syria-specific programs."], "subsections": []}, {"section_title": "FY2020 Defense Funding Request", "paragraphs": ["The Administration's FY2020 request seeks $300 million in CTEF funds to equip and sustain \"vetted Syrian opposition (VSO) forces,\" including Internal Security Forces. The department describes U.S. SDF and other partners as VSO in planning and reporting documents. The request states that the \"primary focus\" will be on the continued equipping of Internal Security Forces, and that these forces \"together with wide-area security and other VSO elements, will focus on back-clearing and holding areas that were liberated from ISIS.\"", "The Administration's FY2019 request had envisioned the creation of a 35,000-person Internal Security Force and a 30,000-person combat force. The FY2020 request references a 61,000 VSO force without specifying what percentage of these are to be focused on internal security versus other tasks. Other differences with the FY2019 request include a reduced emphasis on direct U.S. training of VSO forces. Instead, the FY2020 request states that DOD will \"support the VSO's ongoing efforts to recruit, vet, train, and equip additional Syrians representative of the population and enable them to engage ISIS throughout the battlespace.\" ", "The request states that $252 million was enacted for the Syria Train and Equip program in FY2019 (about $50 million less that the Administration's FY2019 request). It also notes that the FY2020 budget realigns $250 million in FY2019 funds for IS-related border security support to partner nations from the CTEF fund to Operation and Maintenance, Defense-wide. "], "subsections": []}]}, {"section_title": "U.S. Nonlethal and Stabilization Assistance", "paragraphs": ["The Administration's FY2020 foreign assistance budget request reflects a move by the Trump Administration to end nonlethal assistance for the Syrian opposition, and to shift funding responsibility for stabilization projects to coalition partners. Since 2012, the United States has provided nonlethal assistance to Syrian opposition groups. The United States also has funded stabilization efforts in areas of northeastern Syria liberated from Islamic State control. Possibly reflecting a recognition that the Syria conflict has \"decisively shifted in the Syrian regime's favor,\" the FY2020 request includes no Syria-specific funding. "], "subsections": [{"section_title": "Background", "paragraphs": ["Since 2012, the United States has provided a range of nonlethal assistance to Syrian opposition and civil society groups. At the start of the Syria conflict, U.S. ability to provide aid to the Syrian opposition was limited by restrictions stemming from an existing body of U.S. bilateral sanctions against Syria, as well as Syria's status as a state sponsor of terrorism. President Obama invoked emergency and contingency authorities under the Foreign Assistance Act to enable initial deliveries. To enable the expanded delivery of aid to Syrian opposition groups, the executive branch requested and Congress granted specific authorities to provide nonlethal foreign assistance in Syria for certain purposes notwithstanding other provisions of law. Over time, Congress expanded and amended these authorities to focus on areas of congressional priority and to put into place oversight and reporting requirements."], "subsections": []}, {"section_title": "Nonlethal and Stabilization Aid to Syria: 2017-2019", "paragraphs": ["Since FY2012, successive Administrations and Congresses have taken evolving approaches to requests and appropriations of funds for assistance and stabilization programs in Syria. Funding for both types of projects has been drawn from a mix of regular and OCO funds from multiple accounts\u2014largely ESF\u2014with the Administration required to notify Congress of its intent to use these funds for assistance and stabilization efforts in Syria. ", "FY2017 Funds . In January 2017, the Obama Administration notified Congress that it intended to spend $230 million in FY2017 ESF-OCO funds (originally appropriated under the Further Continuing and Security Assistance Appropriations Act, 2017, P.L. 114-254 ) to support stabilization in areas liberated from the Islamic State in Syria. In August and September 2018, the Trump Administration notified Congress of plans to reprogram those funds and instead rely on contributions from foreign partners\u2014reflecting a broader assessment by the Administration that the United States was bearing more than its share of costs in regards to Syria stabilization. The Administration's FY2020 budget request states that $422 million in OCO funds were obligated for Syria in FY2017. ", "FY2018 Funds. The Administration has not acted to obligate or expend funds appropriated by Congress in FY2018 foreign operations appropriations legislation for nonlethal assistance and stabilization in Syria. The FY2018 appropriations act ( P.L. 115-141 ) authorized the use of $500 million in FY2018 funds from various foreign assistance accounts for a \"Relief and Recovery Fund\" (RRF) for areas liberated from the Islamic State, while not specifying a specific amount for Syria. RRF funds could be used for Syria stabilization, but as of March 2019 no FY2018 monies have been notified for programs in Syria.", "FY2019 . The Administration's FY2019 budget request sought $130 million in Economic Support and Development Fund (ESDF) monies and $44.5 million in Nonproliferation, Anti-Terrorism, Demining and Related Programs (NADR) for stabilization efforts in nongovernment-controlled areas of Syria. "], "subsections": []}, {"section_title": "FY2019 Legislation and the FY2020 Request", "paragraphs": ["The FY2019 Consolidated Appropriations Act ( P.L. 116-6 ) states that, of the funds appropriated under the ESF, INCLE, and PKO accounts, no less than $40 million should be made available for nonlethal stabilization assistance for Syria, of which not less than $7 million should be made available for emergency medical and rescue response, and chemical weapons use investigations. Notably, the act states only that nonlethal assistance is to be provided for stabilization purposes. This is a significant departure from the FY2018 Consolidated Appropriations Act ( P.L. 115-141 ), which made funds available for 14 listed purposes including establishing inclusive local governance, bolstering the viability of the Syrian opposition, developing civil society and independent media, and countering extremism.", "The Administration's FY2020 State and Foreign Operations request for Syria seeks no ESDF or NADR funding for Syria-specific programs, in contrast to the FY2019 request which sought $130 million and $44.5 million for Syria programs in the two accounts, respectively. The request includes $145 million from various accounts for the Relief and Recovery Fund, some of which could be used in Syria."], "subsections": [{"section_title": "Uncertain Future for Syria START Programs and Cross Border Aid", "paragraphs": ["To monitor and implement U.S. assistance programs, several regionally based teams were established. A Syria Transition Assistance and Response Team (START) operated from Turkey and coordinated U.S. humanitarian and foreign assistance to northern Syria, including assistance to opposition-held areas. In Jordan, the Southern Syria Assistance Platform (SSAP) monitored and coordinated comparable U.S. humanitarian and foreign assistance to southern and eastern Syria, including assistance to opposition-held areas. The Trump Administration also deployed a small team of U.S. civilian assistance officials (known as START Forward) inside areas of northern Syria where DOD-trained and/or equipped local forces are in control. ", "In 2018, these programs underwent significant changes. Some START programs were amended and/or ended in 2018 in line with the Administration's plans to focus on stabilizing former IS-held areas to the east. Cross-border SSAP programs reportedly were halted in mid-2018, after Syrian military forces regained control of southwestern Syria. In late 2018, the announced withdrawal of U.S. forces was preceded by the withdrawal of U.S. civilian personnel from northern Syria. With the Administration's 2019 announcement that some U.S. forces would remain in Syria, it is unclear whether or under what circumstances START Forward personnel might redeploy to the country to assist in stabilization efforts. ", "Increasingly vocal demands by the Syrian government and its international supporters for an end to cross-border assistance operations may significantly complicate U.S. assistance operations. This dynamic has been evident in Russian objections to the renewal of the U.N. Security Council mandate for cross-border and cross-line humanitarian operations (Resolutions 2393 and 2449), but it similarly applies to ongoing Syrian government rejections of non-humanitarian assistance operations in opposition-held areas. UNSCR 2449 currently authorizes cross-border and cross-line humanitarian assistance until January 10, 2020\u2014at which point the resolution will be subject to renewal at the Security Council. Russia and China abstained from the December 2018 renewal, and the Russian representative objections argued that \"new realities ... demand that [the mandate] be rejigged with the ultimate goal of being gradually but inevitably removed.\""], "subsections": []}]}]}]}, {"section_title": "Overview: Syria Chemical Weapons and Disarmament120", "paragraphs": ["The United States, the United Nations, and others have assessed that the Syrian government has used chemical weapons repeatedly against opposition forces and civilians in the country. Expert teams affiliated with the U.N.-OPCW Joint Mission to Investigate Allegations of the Use of Chemical Weapons in the Syrian Arab Republic (JIM) and the OPCW Fact-Finding Mission (FFM) in Syria have investigated some of these allegations and have found evidence that in some cases confirms and in others suggests that chemical weapons and/or toxic chemicals have been used in attacks by the Syrian regime and by the Islamic State. Any use of chemical weapons is prohibited by the Chemical Weapons Convention, which Syria joined in September 2013. "], "subsections": [{"section_title": "Chemical Weapons Use", "paragraphs": ["The majority of reports of chemical weapons use in Syria have consisted of chlorine use in barrel bombs in addition to the use of sarin in August 2013, April 2017, and possibly April 2018. The use of sarin by the Syrian military in the April 2017 and April 2013 attacks was confirmed by the United Nations. Reports of the use of chlorine gas as a chemical weapon in barrel bombs used by the Syrian military began to surface in April 2014 and continue. Most recently, the FFM has been investigating an alleged CW incident in Aleppo on November 24, 2018. U.N. investigators have confirmed several cases of the use of mustard gas by the Islamic State. The OPCW established a fact-finding mission to investigate these allegations. ", "The Syrian government continues to deny categorically that it has used chemical weapons or toxic chemicals, while accusing opposition forces of doing so and calling into question the methods and results of some investigations into alleged chemical attacks. The Russian Federation supports the Syrian position. "], "subsections": [{"section_title": "2018 Chemical Attack (Douma) and U.S. Response", "paragraphs": ["On April 7, Syrian government forces launched a chemical attack on Douma, killing at least 40 people and injuring hundreds more. U.S. officials described the symptoms displayed by victims as consistent with an asphyxiation agent and \"a nerve agent of some type.\" Then-Defense Secretary Mattis stated, \"We're very confident that chlorine was used. We are not ruling out sarin right now.\" An OPCW/FFM investigation concluded in March 2019 that it is likely that toxic chlorine was used as a weapon in the attack, which came within the context of broader Syrian government operations to retake the rebel enclave of eastern Ghouta, on the outskirts of Damascus.", "On April 13 (April 14 local time), more than 100 missiles were launched into Syria from British, French, and U.S. air and naval platforms in the Red Sea, the Northern Arabian Gulf, and the Eastern Mediterranean. The strikes targeted three chemical weapons storage and research sites in Syria: the Barzeh Research and Development Center on the outskirts of Damascus and the Him Shinshar chemical weapons storage and bunker facilities in Homs province. Contrasting the operation with the April 2017 U.S. strikes on Al Shayrat airbase, military officials stated, \"Last year the focus was on the delivery [of chemical weapons]. This time, we went\u2014the strikes went to the very heart of the enterprise, to the research, to development, to storage.\" U.S. military officials also stated that \"obviously the Syrian chemical weapons system is larger than the three targets that we addressed tonight. However, these are the targets that presented the best opportunity to minimize collateral damage, to avoid killing innocent civilians, and yet to send a very strong message.\""], "subsections": []}, {"section_title": "2017 Chemical Attack (Khan Sheikhoun) and U.S. Response", "paragraphs": ["On April 4, 2017, Syrian aircraft operating in rebel-held Idlib province conducted several air strikes using what U.S. officials assessed to be a chemical nerve agent. The strikes, which occurred in the town of Khan Sheikhoun, killed an estimated 80 to 100 people. The Director General of the OPCW, which conducted a fact-finding mission following the attack, stated on April 19 that four of its laboratories had \"incontrovertible\" evidence that victims \"were exposed to Sarin or a Sarin-like substance.\" In addition, then-Secretary of State Tillerson said that the U.S. government had a \"very high level of confidence\" that the Syrian air force had used the nerve agent sarin in two earlier 2017 attacks\u2014on March 25 and March 30 in neighboring Hamah province. ", "On April 6, 2017, the United States fired 59 Tomahawk missiles at Al Shayrat airfield in Homs province, from which U.S. intelligence sources had concluded the Khan Sheikhoun attack was launched. A Defense Department statement said the U.S. strike \"targeted aircraft, hardened aircraft shelters, petroleum and logistical storage, ammunition supply bunkers, air defense systems, and radars\" and that \"the strike was intended to deter the regime from using chemical weapons again.\" Secretary Mattis later stated that \"around 20 aircraft were taken out\" by the strike. The United States also imposed sanctions on 271 Syrian employees of the Scientific Studies and Research Center (SSRC), the entity responsible for managing Syria's chemical weapons program."], "subsections": []}, {"section_title": "2013 Chemical Weapons Attack (Ghouta)", "paragraphs": ["The largest-scale use of chemical weapons in Syria to date was an August 21, 2013, nerve gas attack, which the U.S. government estimated killed more than 1,400 people. A U.N. investigation subsequently identified the nerve agent as sarin. The U.S. intelligence community assessed that the Syrian government had \"used chemical weapons on a small scale against the opposition multiple times in the last year.\" President Obama requested congressional approval of a limited authorization for the use of military force to respond. As part of a diplomatic solution to the crisis based on a U.S.-Russian joint proposal, the Obama Administration withdrew the threat of military force and Syria agreed to give up its chemical weapons and join the Chemical Weapons Convention (CWC). U.N. Security Council Resolution 2118 (2013) further mandated that Syria give up all its chemical weapons under Chapter VII provisions of the U.N. Charter."], "subsections": []}, {"section_title": "Syria and the CWC: Disarmament Verification", "paragraphs": ["After joining the CWC in September 2013, Syria declared that it possessed 1,308 metric tons of chemical warfare agents and precursor chemicals, including several hundred metric tons of the nerve agents sarin and VX, as well as mustard agent in ready-to-use form. The nerve agents were stored as two separate components that are combined before use, called precursor chemicals, a form that facilitated removal and destruction efforts. In an unprecedented effort, the international community oversaw the removal in late 2013 and 2014 of chemical weapons agents to locations outside of Syria for destruction. As of January 4, 2016, all of Syria's declared Category 1 and 2 chemicals had been neutralized. As of June 2018, the OPCW had verified that all 27 of Syria's declared chemical weapons production facilities (CWPFs) had been destroyed.", "The continued use of chemical weapons in Syria has raised questions about Syrian compliance. In addition, the OPCW has not been able to verify the completeness of the Syrian initial declaration, part of Syria's obligations after having joined the CWC. For years, the United States, the OPCW Director General, and other governments have asserted that Syria had not declared all of its chemical weapons stocks and facilities. The OPCW's Declaration Assessment Team (DAT) continues to investigate \"gaps, inconsistencies and discrepancies\" through interviews and lab analysis of samples from site visits according to OPCW Executive Council reports. The latest report said that since the government of Syria has not answered the DAT's inquiries, the OPCW \"cannot fully verify that the Syrian Arab Republic has submitted a declaration that can be considered accurate and complete in accordance with the Chemical Weapons Convention.\" A technical meeting to resolve these differences was held in mid-March."], "subsections": []}, {"section_title": "International Investigations of CW Use", "paragraphs": ["Since the first reports of alleged chemical weapons use during the conflict in Syria, the U.N. Secretary-General, the U.N. Security Council, and the CWC Executive Council have formed several different bodies to investigate chemical weapons use in Syria, outlined below. Of these, OPCW inspections to verify CWC compliance as well as the OPCW Fact Finding Mission are the only two currently functioning: ", "In response to the Syrian government and other governments' request, in March 2013, the U.N. Secretary-General established the United Nations Mission to Investigate Allegations of the Use of Chemical Weapons in the Syrian Arab Republic . The Syrian government alleged that opposition forces had used chemical weapons at Khan al-Asal on March 19, 2013, while opposition forces had accused the Asad government of CW use there. Following a U.S.- and Russian-brokered deal with Syria to join the CWC, the Security Council established the U . N . -OPCW Joint Mission to oversee the removal of chemical weapons in Syria between October 2013 and June 2014. After Syria joined the CWC in September 2013, the OPCW was responsible for overseeing the verification of its initial declaration and continues to monitor destruction of chemical weapons facilities in the country. The OPCW Director-General declared the creation of a Fact Finding Mission (FFM) in Syria on April 29, 2014, in response to new allegations of the use of chlorine as a weapon from December 2013 to April 2014. The CWC allows for the OPCW Director General to start an investigation into chemical weapons use in a member state with its permission. The Syrian government agreed to accept the FFM and provide security. The FFM did not have authority to attribute attacks until a decision was taken by a special session of the CWC member states in June 2018. That decision gave the FFM authority to attribute as part of its investigations. On August 7, 2015, the U.N. Security Council unanimously adopted Resolution 2235, which established a new OPCW-U.N. Joint Investigative Mechanism (JIM) tasked with identifying \"to the greatest extent feasible\" those responsible for or involved in chemical attacks identified by the OPCW fact finding mission. The JIM's mandate expired in November 2017.", "Earlier U.N. and OPCW investigations starting in 2013 had not been tasked with assigning responsibility for alleged attacks but were to identify whether and which type of chemical weapons were used. This changed with the JIM, which was mandated to attribute attacks. The JIM was to have access anywhere in Syria; however, the JIM's mission was complicated by the security situation on the ground. ", "The OPCW FFM and JIM have concluded with a high degree of confidence that chemical weapons were used in Syria in 48 incidents from April 2014 to November 24, 2017. All incidents occurred in governorates considered by the Syrian government as outside its effective control from 2014 to present. The JIM was able to attribute the use of chemical weapons in 7 of these 48 incidents. The JIM concluded that the Syrian Armed Forces dropped barrel-bombs containing chlorine or a chlorine-like substance from helicopters on towns in the Idlib Governorate in three attacks: Talmenes on April 21, 2014, Qmenas on March 16, 2015, and Sarmin on March 16, 2015. The FFM concluded in its June 2017 report that sarin had been used as a weapon in Khan Sheikhoun, Idlib Governorate, on April 4, 2017. The JIM concluded on October 26, 2017, a few weeks before the expiration of its mandate, that the Syrian Armed Forces used sarin-filled aerial bombs in the Khan Sheikhoun attack, and that ISIL used sulfur mustard-filled mortars in attacks in Um Housh, Aleppo Governorate, on September 15 and 16, 2016. ", "The Security Council extended the mandate of the JIM through November 2017 but further attempts to renew the mandate were blocked by Russia, which argues for a wider regional coverage. In January 2018, the French government gathered 30 countries in Paris to announce a new effort, the \"International Partnership against Impunity for the Use of Chemical Weapons,\" to raise awareness of the issue, strengthen international action against CW use, and bolster international pressure on Syria. Then-U.S. Secretary of State Rex Tillerson attended.", "Repeated efforts by these states to pass U.N. Security Council resolutions condemning attacks have been blocked by a Russian veto on multiple occasions. The latest incidence of chemical weapons use on April 7, 2018, elevated these issues again to the U.N. Security Council, where Russia defends the Syrian stance. The United States, United Kingdom, and France proposed a U.N. Security Council Resolution in support of a U.N. investigation into who was responsible for the April 7 attack, but the resolution was vetoed by Russia. Nevertheless, under the U.N. and OPCW mechanisms already in place from past Security Council resolutions, the OPCW's Fact-Finding Mission (FFM) continued to investigate instances of use, including the April 2018 attack in Douma. ", "In August 2011, the U.N. Human Rights Council established an Independent International Commission of Inquiry into human rights abuses and violations of international law in the Syrian conflict. The Commission has documented the use of prohibited chemical weapons in Syria and is specifically mandated to identify perpetrators. It is instructed \"where possible, to identify those responsible with a view to ensuring that perpetrators of violations, including those that may constitute crimes against humanity, are held accountable.\" The Commission of Inquiry's 2017 report says that between March 2013 and March 2017, it documented 25 incidents of CW use in Syria, \"of which 20 were perpetrated by government forces and used primarily against civilians.\" "], "subsections": []}]}]}, {"section_title": "Outlook", "paragraphs": ["The victory of pro-Asad forces in the broader conflict appears likely, and, from a U.S. perspective, that may further complicate several unresolved issues, including ", "the stabilization and governance of areas recaptured from the Islamic State; the resolution of security threats posed by extremist groups in northwest Syria; the return and reintegration of internally and externally displaced Syrians; the reconstruction of conflict-damaged areas; the management of Syria-based threats to Syria's neighbors; and, the terms of a postconflict political order in Syria. ", "In light of current trends and conditions related to these issues, Administration officials and Members of Congress may reexamine appropriate terms and conditions for U.S. investment, force deployment, and the nature of relationships with U.S. partners in and around Syria."], "subsections": [{"section_title": "Consolidating Gains Against the Islamic State", "paragraphs": ["Combatting the Islamic State in Syria has been the top priority for U.S. policymakers since 2014. Prior to President Trump's announcement in December 2018 that U.S. military forces would withdraw from Syria, U.S. policymakers had stated their intention to train and equip local forces to hold and secure areas recaptured from the Islamic State. They also had signaled that U.S. funds would no longer be invested at previously prevailing levels to stabilize conflict-damaged areas under U.S. partner control in Syria's northeast. Instead, the Trump Administration seeks to encourage coalition members and U.S. partners to contribute to stabilization efforts as a means of lowering the direct costs to the United States. Questions about program management, coordination, and evaluation may have accompanied what was expected to have been a planned shift toward joint stabilization. More fundamental questions now exist about the future of security and stabilization efforts amid U.S. plans for military withdrawal.", "The Administration's FY2020 defense funding requests suggest it plans to continue to support U.S. partner forces, but the potential reintegration of areas of Syria's east and northeast by the Asad government\u2014whether by force or negotiation\u2014raises other challenging policy questions. If the resurgent Asad government adopts a confrontational posture toward withdrawing U.S. forces and their local partners, renewed conflict could result and create new threats to U.S. personnel, demands on U.S. resources, and dilemmas for U.S. decisionmakers. If the Asad government adopts a relatively conciliatory approach toward U.S. partners and moves to reintegrate the northeast under its control through negotiation, it may seek to absorb U.S.-trained and -equipped forces into its own ranks. In light of standing and proposed restrictions on the use of U.S. nonhumanitarian funding in Asad-controlled areas, the expansion of Syrian government control to the areas of northeastern Syria recaptured from the Islamic State could impose limits on U.S. involvement in stabilization and/or counterterrorism activities. "], "subsections": []}, {"section_title": "Conflict in Northwestern Syria", "paragraphs": ["Areas of Idlib province are the most significant zone remaining outside of government control in western Syria, and pro-Asad forces may launch military operations to reclaim areas of the province in the coming months. Although infighting among anti-Asad groups in the province escalated in 2018 and mutual suspicions remain between Syrian and non-Syrian fighters, extremist groups and some opposition fighters relocated to the province are expected to forcefully resist any Syrian government military campaign. Turkish forces present in some areas also may oppose or actively resist pro-Syrian government forces if hostilities erupt. The wide-scale use of military force by the Syrian government and its supporters against opposition-held areas of Idlib would likely result in significant civilian casualties and displacement and could generate renewed calls for U.S. or coalition military intervention to protect and aid civilians. ", "The presence in Idlib of Al Qaeda-aligned individuals remains a security concern of the United States and its allies, but the ability of U.S. and coalition forces to operate in or over Idlib may continue to be complicated by Syrian government disapproval and Russian military capabilities. If the Syrian government delays or defers action against opposition-held areas of Idlib, extremist groups hostile to the United States could enjoy some degree of continued safe haven. The Asad government also might seek to leverage the persistence of an extremist threat in Idlib to aid in its consolidation of domestic political and international diplomatic support for Asad's continued rule."], "subsections": []}, {"section_title": "The Future of Displaced Syrians", "paragraphs": ["Conflict in Syria has taken the lives of hundreds of thousands of people and has displaced millions within the country and beyond its borders. As the intensity of conflict has declined in some areas of the country, displaced Syrians have faced difficult choices about whether or how to return to their home areas amid uncertainty about security, potential political persecution, crime, economic conditions, lost or missing documentation, and prospects for recovery. The Asad government is actively encouraging internally displaced Syrians to return home and is seeking the return of Syrian refugees from neighboring countries under a Russian-designed plan. Humanitarian advocates and practitioners continue to raise concerns about the security and protection of returnees and displaced individuals in light of conditions in many areas of the country and questions about the Syrian government's approach to political reconciliation.", "In addition, mechanisms and mandates that have provided for the delivery of humanitarian assistance across the Syrian border without the consent of the Syrian government could face renewed scrutiny in coming months, and the Asad government and its backers may pressure neighboring countries to forcefully return Syrian refugees that are within their jurisdictions. The United States remains the leading donor for international humanitarian efforts related to Syria, and U.S. policymakers may face a series of decisions about whether or how to continue or adapt U.S. support in light of changing conditions."], "subsections": []}, {"section_title": "Reconstruction", "paragraphs": ["In 2017, U.N. Special Envoy for Syria Staffan de Mistura estimated that Syria's reconstruction will cost at least $250 billion, and a group of U.N.-convened experts estimated in August 2018 that the cost of conflict damage could exceed $388 billion. The Trump Administration has stated its intent not to contribute to the reconstruction of Asad-controlled Syria absent fundamental political change and to use U.S. diplomatic influence to discourage other international assistance to Asad-controlled Syria. Congress also has acted to restrict the availability of U.S. funds for assistance projects in Asad-controlled areas and is considering legislation that would further restrict such assistance through FY2024 ( H.R. 1706 ). ", "In the absence of U.S. engagement, other actors such as Russia or China could conceivably provide additional assistance for reconstruction purposes, but may be unlikely to mobilize sufficient resources or adequately coordinate investments with other members of the international community to meet Syria's considerable needs. Predatory conditional assistance could also further indebt the Syrian government to these or other international actors and might strengthen strategic ties between Syria and third parties in ways inimical to U.S. interests. A lack of reconstruction, particularly of critical infrastructure, could delay the country's recovery and exacerbate the legacy effects of the conflict on the Syrian population, with negative implications for the country's security and stability."], "subsections": []}, {"section_title": "Addressing Syria-based Threats to Neighboring Countries", "paragraphs": ["Aside from terrorism threats posed by Syria-based Sunni Islamist extremists, U.S. partners and allies among Syria's neighbors perceive threats from Syria-based Iranian forces and associated militia, the reconstituted Syrian military and security services, Russia's presence, and the activities of Syria-based Kurdish armed groups. Asad's post-2015 fortunes in the conflict are largely attributable to the support of Russia and Iran. While there are some tensions reported between Syrian leaders and their foreign partners, it is difficult to foresee a scenario in the short term in which the current Syrian government would seek or be in a position to compel a fundamental change in the posture or presence of Russian or Iranian forces inside Syria. The Syrian security services, once severely degraded, have reconstituted some of their lost capabilities and may continue to grow in strength and coherence. For U.S. partners like Israel and Jordan, these conditions pose long-term strategic challenges, and any independent military or diplomatic actions on their part to address them in turn may create challenges in their relationship with the United States.", "Similarly, the Turkish government expresses continuing concern about the presence and power in Syria of armed Kurdish groups, including groups partnered with the United States. Turkish military deployments inside Syria are ongoing and the prospect of confrontation between Turkish forces, U.S. forces, and their respective partners remains a real one. U.S. plans for any enduring partnership with Kurdish-led or -constituted armed groups in Syria or for an enduring U.S. presence in areas under their control would likely have caused related tensions in U.S. relations with Turkey, Syria, Russia, and Iran to persist. If Kurdish armed groups reconcile and align with the Asad-led government in the wake of U.S. drawdown or withdrawal, it could increase the likelihood of more pronounced confrontation between Turkey, the Syrian government, and its allies. An abrupt severance of all U.S. support for Kurdish groups also could sour U.S. relations not just with Syrian Kurds, but with Kurdish populations and leaders in other regional countries."], "subsections": []}, {"section_title": "Syria's Political Future", "paragraphs": ["Since 2011, the United States has pursued a policy of seeking fundamental political change in Syria, initially reflected in U.S. calls for President Asad to step aside. The Trump Administration in 2018 stated that it seeks behavior change rather than regime change in Syria. However, the Administration still calls for a political settlement to the Syria conflict based on UNSCR 2254\u2014which requires the drafting of a new constitution and the holding of U.N.-supervised elections. ", "Asad's reelection in self-administered 2014 elections and his subsequent reconsolidation of security control in much of western Syria may limit the likelihood of substantive political change in line with U.S. preferences. U.N.-led negotiations over a settlement of the conflict remain open-ended, but appear unlikely to result in the meaningful incorporation of opposition figures or priorities into new governing arrangements in the short term. Alternative negotiations backed by Asad's Russian and Iranian supporters have their own logic and momentum, and place Syria's opposition groups in a political predicament. Congress and the Administration may reexamine what remaining points of leverage the United States can exercise or whether new points of leverage could be developed that might better ensure a minimally acceptable political outcome. Members of Congress and Administration officials may differ among themselves over what such an outcome might entail. Perceptions among Syrian opposition supporters of U.S. abandonment or acquiescence to an Asad victory may also have long-term diplomatic and security consequences for the United States and its partners."], "subsections": []}, {"section_title": "Implications for Congress", "paragraphs": ["The 115 th Congress appropriated defense funds for FY2019 and the 116 th Congress has appropriated foreign assistance funds for FY2019. As discussed above, Congress conditioned the availability for obligation of some of the defense funds on the Administration's provision of a new strategic plan for Syria and the delivery of oversight reporting on current Syria programs to Congress. As of March 2019, Congress was reviewing the Administration's responses and its FY2020 requests for additional funding. Questions remain about the specifics of the Administration's planned military withdrawal as well as the decision's effect on other U.S. priorities.", "The 116 th Congress may attempt to reach consensus on a formal congressional counterproposal to the Administration's priorities and initiatives, and such a task is likely to be challenging if past trends in congressional debate prevail. ", "As with Administration policy decisions, Asad's likely eventual victory in the conflict runs counter to long-stated congressional preferences and thus complicates appropriation, authorization, and sanctions decisions. Principal questions for Congress for the future may concern the extent and nature of conditions Congress places on U.S. engagement with the Asad-led government and on the expenditure of U.S. funds for any remaining U.S. programs in Asad-controlled areas. ", "For the foreseeable future, the essential dilemma for Members of Congress and the Administration may remain how to pursue U.S. counterterrorism and stabilization goals in Syria while maintaining a minimal U.S. military footprint in the country and avoiding actions that further empower the Asad government. While this may be accomplished in part by working through local partners and regional allies, these may also have interests and goals in Syria that do not align with U.S. preferences. New efforts by the Asad government and its external backers to assert the Syrian government's sovereignty could prompt additional scrutiny of residual U.S. and coalition military operations inside the country, to include partnership with local forces.", "Observers, U.S. officials, and many Members of Congress continue to differ over which incentives and disincentives may prove most effective in influencing various combatants in Syria and their supporters. Still less defined are the long-term commitments that the United States and others may be willing to make to achieve an inclusive political transition; protect civilians; defend U.S. partners; promote accountability and reconciliation; or contribute to the rebuilding of a country significantly destroyed by years of brutal war."], "subsections": []}]}, {"section_title": "Author Contact Information", "paragraphs": ["Carla E. Humud, Coordinator, Analyst in Middle Eastern Affairs ( [email address scrubbed] , [phone number scrubbed]) Christopher M. Blanchard, Specialist in Middle Eastern Affairs ( [email address scrubbed] , [phone number scrubbed]) Mary Beth D. Nikitin, Specialist in Nonproliferation ( [email address scrubbed] , [phone number scrubbed]) "], "subsections": []}]}}
{"id": "RL33745", "title": "Navy Aegis Ballistic Missile Defense (BMD) Program: Background and Issues for Congress", "released_date": "2019-04-25T00:00:00", "summary": ["The Aegis ballistic missile defense (BMD) program, which is carried out by the Missile Defense Agency (MDA) and the Navy, gives Navy Aegis cruisers and destroyers a capability for conducting BMD operations. Under the FY2020 budget submission, the number of BMD-capable Navy Aegis ships is projected to increase from 38 at the end of FY2018 to 59 at the end of FY2024. BMD-capable Aegis ships operate in European waters to defend Europe from potential ballistic missile attacks from countries such as Iran, and in in the Western Pacific and the Persian Gulf to provide regional defense against potential ballistic missile attacks from countries such as North Korea and Iran.", "The Aegis BMD program is funded mostly through MDA's budget. The Navy's budget provides additional funding for BMD-related efforts. MDA's proposed FY2020 budget requests a total of $1,784.2 million (i.e., about $1.8 billion) in procurement and research and development funding for Aegis BMD efforts, including funding for two Aegis Ashore sites in Poland and Romania. MDA's budget also includes operations and maintenance (O&M) and military construction (MilCon) funding for the Aegis BMD program.", "Issues for Congress regarding the Aegis BMD program include the following:", "whether to approve, reject, or modify MDA's FY2020 funding procurement and research and development funding requests for the program; required numbers of BMD-capable Aegis ships versus available numbers of BMD-capable Aegis ships; the burden that BMD operations may be placing on the Navy's fleet of Aegis ships, and whether there are alternative ways to perform BMD missions now performed by U.S. Navy Aegis ships, such as establishing more Aegis Ashore sites; burden sharing\u2014how allied contributions to regional BMD capabilities and operations compare to U.S. naval contributions to overseas regional BMD capabilities and operations; whether to convert the Aegis test facility in Hawaii into an operational land-based Aegis BMD site; the potential for ship-based lasers, electromagnetic railguns (EMRGs), and hypervelocity projectiles (HVPs) to contribute in coming years to Navy terminal-phase BMD operations and the impact this might eventually have on required numbers of ship-based BMD interceptor missiles; and technical risk and test and evaluation issues in the Aegis BMD program."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides background information and issues for Congress on the Aegis ballistic missile defense (BMD) program, which is carried out by the Missile Defense Agency (MDA) and the Navy, and gives Navy Aegis cruisers and destroyers a capability for conducting BMD operations. The issue for Congress is whether to approve, reject, or modify Department of Defense (DOD) acquisition strategies and proposed funding levels for the Aegis BMD program. Congress's decisions on the Aegis BMD program could significantly affect U.S. BMD capabilities and funding requirements, and the BMD-related industrial base.", "For an overview of the strategic and budgetary context in which the Aegis BMD program may be considered, see CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress , by Ronald O'Rourke."], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "Aegis Ships", "paragraphs": ["Most of the Navy's cruisers and destroyers are called Aegis ships because they are equipped with the Aegis ship combat system\u2014an integrated collection of sensors, computers, software, displays, weapon launchers, and weapons named for the mythological shield that defended Zeus. The Aegis system was originally developed in the 1970s for defending ships against aircraft, anti-ship cruise missiles (ASCMs), surface threats, and subsurface threats. The system was first deployed by the Navy in 1983, and it has been updated many times since. The Navy's Aegis ships include Ticonderoga (CG-47) class cruisers and Arleigh Burke (DDG-51) class destroyers."], "subsections": [{"section_title": "Ticonderoga (CG-47) Class Aegis Cruisers", "paragraphs": ["A total of 27 CG-47s (CGs 47 through 73) were procured for the Navy between FY1978 and FY1988; the ships entered service between 1983 and 1994. The first five ships in the class (CGs 47 through 51), which were built to an earlier technical standard in certain respects, were judged by the Navy to be too expensive to modernize and were removed from service in 2004-2005, leaving 22 ships in operation (CGs 52 through 73)."], "subsections": []}, {"section_title": "Arleigh Burke (DDG-51) Class Aegis Destroyers1", "paragraphs": ["A total of 62 DDG-51s were procured for the Navy between FY1985 and FY2005; the first entered service in 1991 and the 62 nd entered service in FY2012. The first 28 ships are known as Flight I/II DDG-51s. The next 34 ships, known as Flight IIA DDG-51s, incorporate some design changes, including the addition of a helicopter hangar.", "No DDG-51s were procured in FY2006-FY2009. The Navy during this period instead procured three Zumwalt (DDG-1000) class destroyers. The DDG-1000 design does not use the Aegis system and does not include a capability for conducting BMD operations. Navy plans do not call for modifying the three DDG-1000s to make them BMD-capable.", "Procurement of DDG-51s resumed in FY2010, following procurement of the three DDG-1000s. A total of 20 DDG-51s were procured in FY2010-FY2019. DDG-51s procured in FY2017 and subsequent years are being built to a new version of the DDG-51 design called the Flight III version. The Flight III version is to be equipped with a new radar, called the Air and Missile Defense Radar (AMDR) or the SPY-6 radar, that is more capable than the SPY-1 radar installed on all previous Aegis cruisers and destroyers."], "subsections": []}, {"section_title": "Aegis Ships in Allied Navies", "paragraphs": ["Sales of the Aegis system to allied countries began in the late 1980s. Allied countries that now operate, are building, or are planning to build Aegis-equipped ships include Japan, South Korea, Australia, Spain, and Norway. Most of Japan's Aegis-equipped ships are currently BMD-capable, and Japan plans to make all of them BMD-capable in coming years. The Aegis-equipped ships operated by South Korea, Australia, Spain, and Norway are not BMD-capable."], "subsections": []}]}, {"section_title": "Aegis BMD System5", "paragraphs": ["Aegis ships are given a capability for conducting BMD operations by incorporating changes to the Aegis system's computers and software, and by arming the ships with BMD interceptor missiles. In-service Aegis ships can be modified to become BMD-capable ships, and DDG-51s procured in FY2010 and subsequent years are being built from the start with a BMD capability."], "subsections": [{"section_title": "Versions and Capabilities of Aegis BMD System", "paragraphs": ["The Aegis BMD system exists in several variants. Listed in order of increasing capability, these include (but are not necessarily limited to) 3.6.X variant, the 4.0.3 variant, the 4.1 variant (also known as the Aegis Baseline [BL] 5.4 variant), the 5.0 CU (Capability Upgrade) variant (also known as the BL 9.1 variant), the 5.1 variant (also known as the BL 9.2 variant), and the 6.X variant (also known as the BL 10 variant). Figure 1 summarizes the capabilities of some of these variants (using their designations as of 2016) and correlates them with the phases of the European Phased Adaptive Approach (or EPAA; see discussion below) for European BMD operations.", "As shown in Figure 1 , the Aegis BMD system was originally designed primarily to intercept theater-range ballistic missiles, meaning short-, medium-, and intermediate-range ballistic missiles (SRBMs, MRBMs, and IRBMs, respectively). In addition to its capability for intercepting theater-range ballistic missiles, detection and tracking data collected by the Aegis BMD system's radar might be passed to other U.S. BMD systems that are designed to intercept intercontinental ballistic missiles (ICBMs), which might support intercepts of ICBMs that are conducted by those other U.S. BMD systems.", "With the advent of the Aegis BMD system's new SM-3 Block IIA interceptor (which is discussed further in the next section), DOD is now evaluating the potential for the Aegis BMD system to intercept certain ICBMs. Section 1680 of the FY2018 National Defense Authorization Act ( H.R. 2810 / P.L. 115-91 of December 12, 2017) directed DOD to \"conduct a test to evaluate and demonstrate, if technologically feasible, the capability to defeat a simple intercontinental ballistic missile threat using the standard missile 3 block IIA missile interceptor.\" ", "DOD's January 2019 missile defense review report states the following:", "The SM-3 Blk IIA interceptor is intended as part of the regional missile defense architecture, but also has the potential to provide an important \"underlay\" to existing GBIs [ground-based interceptors] for added protection against ICBM threats to the homeland. This interceptor has the potential to offer an additional defensive capability to ease the burden on the GBI system and provide continuing protection for the U.S. homeland against evolving rogue states' long-range missile capabilities.", "Congress has directed DoD to examine the feasibility of the SM-3 Blk IIA against an ICBM-class target. MDA will test this SM-3 Blk IIA capability in 2020. Due to the mobility of sea-based assets, this new underlay capability will be surged in a crisis or conflict to further thicken defensive capabilities for the U.S. homeland. Land-based sites in the United States with this SM-3 Blk IIA missile could also be pursued.", "A March 18, 2019, press report states:", "The Pentagon plans a \"first-of-its-kind\" test of an unprecedented weapons capability to intercept and destroy an enemy Intercontinental Ballistic Missile \"ICBM\" -- from a Navy ship at sea using a Standard Missile-3 Block IIA.", "The concept, as articulated by Pentagon officials and cited briefly in this years' DoD \"Missile Defense Review,\" would be to use an advanced SM-3 IIA to \"underlay\" and assist existing Ground-Based Interceptors (GBI), adding new dimensions to the current US missile defense posture.\u2026", "The testing, Pentagon officials tell Warrior, is slated for as soon as next year. The effectiveness and promise of the Raytheon-built SM-3 IIA shown in recent testing have inspired Pentagon weapons developers to envision an even broader role for the weapon. The missile is now \"proven out,\" US weapons developers say\u2026.", "\"The SM-3 IIA was not designed to take out ICBMs, but is showing great promise. This would be in the upper range of its capability -- so we are going to try,\" the Pentagon official told Warrior\u2026.", "The SM-3 IIA's size, range, speed and sensor technology, the thinking suggests, will enable it to collide with and destroy enemy ICBMs toward the beginning or end of their flight through space, where they are closer to the boundary of the earth's atmosphere.", "\"The SM-3 IIA would not be able to hit an ICBM at a high altitude, but it can go outside the earth's atmosphere,\" the Pentagon official said. \"You want to hit it as far away as possible because a nuke could go off.\"", "A March 26, 2018, press report states the following:", "[MDA] Director Lt. Gen. Sam Greaves said MDA \"is evaluating the technical feasibility of the capability of the SM-3 Block IIA missile, currently under development, against an ICBM-class target.\"", "\"If proven to be effective against an ICBM, this missile could add a layer of protection, augmenting the currently deployed GMD [ground-based missile defense] system,\" Greaves said in written testimony submitted March 22 to the Senate Armed Services strategic forces subcommittee. [Greaves] said MDA will conduct a demonstration of the SM-3 Block IIA against an ICBM-like target by the end of 2020.\""], "subsections": []}, {"section_title": "Aegis BMD Interceptor Missiles", "paragraphs": ["The BMD interceptor missiles used by Aegis ships are the Standard Missile-3 (SM-3), the SM-2 Block IV, and the SM-6."], "subsections": [{"section_title": "SM-3 Midcourse Interceptor", "paragraphs": ["The SM-3 is designed to intercept ballistic missiles above the atmosphere (i.e., exo-atmospheric intercept), in the midcourse phase of an enemy ballistic missile's flight. It is equipped with a \"hit-to-kill\" warhead, called a kinetic vehicle, that is designed to destroy a ballistic missile's warhead by colliding with it. MDA and Navy plans call for fielding increasingly capable versions of the SM-3 in coming years. The current versions, called the SM-3 Block IA and SM-3 Block IB, are to be supplemented in coming years by SM-3 Block IIA.", "Compared to the Block IA version, the Block IB version has an improved (two-color) target seeker, an advanced signal processor, and an improved divert/attitude control system for adjusting its course. Compared to the Block IA and 1B versions, which have a 21-inch-diameter booster stage at the bottom but are 13.5 inches in diameter along the remainder of their lengths, the Block IIA version has a 21-inch diameter along its entire length. The increase in diameter to a uniform 21 inches provides more room for rocket fuel, permitting the Block IIA version to have a burnout velocity (a maximum velocity, reached at the time the propulsion stack burns out) that is greater than that of the Block IA and IB versions, as well as a larger-diameter kinetic warhead. The United States and Japan have cooperated in developing certain technologies for the Block IIA version, with Japan funding a significant share of the effort."], "subsections": []}, {"section_title": "SM-2 and SM-6 Terminal Interceptors", "paragraphs": ["The SM-2 Block IV is designed to intercept ballistic missiles inside the atmosphere (i.e., endo-atmospheric intercept), during the terminal phase of an enemy ballistic missile's flight. It is equipped with a blast fragmentation warhead. The existing inventory of SM-2 Block IVs\u201472 as of February 2012\u2014was created by modifying SM-2s that were originally built to intercept aircraft and ASCMs. A total of 75 SM-2 Block IVs were modified, and at least 3 were used in BMD flight tests.", "MDA and the Navy are now procuring a more capable terminal-phase (endo-atmospheric intercept) BMD interceptor based on the SM-6 air defense missile (the successor to the SM-2 air defense missile). The SM-6 is a dual-capability missile that can be used for either air defense (i.e., countering aircraft and anti-ship cruise missiles) or ballistic missile defense. A July 23, 2018, press report states the following:", "The Defense Department has launched a prototype project that aims to dramatically increase the speed and range of the Navy's Standard Missile-6 by adding a larger rocket motor to the ship-launched weapon, a move that aims to improve both the offensive and defensive reach of the Raytheon-built system.", "On Jan. 17, the Navy approved plans to develop a Dual Thrust Rocket Motor with a 21-inch diameter for the SM-6, which is currently fielded with a 13.5-inch propulsion package. The new rocket motor would sit atop the current 21-inch booster, producing a new variant of the missile: the SM-6 Block IB."], "subsections": []}]}]}, {"section_title": "European Phased Adaptive Approach (EPAA) for European BMD", "paragraphs": ["On September 17, 2009, the Obama Administration announced a new approach for regional BMD operations called the Phased Adaptive Approach (PAA). The first application of the approach is in Europe, and is called the European Phased Adaptive Approach (EPAA). EPAA calls for using BMD-capable Aegis ships, a land-based radar in Europe, and two Aegis Ashore sites in Romania and Poland to defend Europe against ballistic missile threats from countries such as Iran.", "Phase I of EPAA involved deploying Aegis BMD ships and a land-based radar in Europe by the end of 2011. Phase II involved establishing the Aegis Ashore site in Romania with SM-3 IB interceptors in 2016. Phase 3 involves establishing the Aegis Ashore site in Poland with SM-3 IIA interceptors by perhaps FY2020. The completion of construction of the Poland site has been delayed by at least a year, MDA says, due to contractor performance issues. Each Aegis Ashore site in the EPAA is to include a structure housing an Aegis system similar to the deckhouse on an Aegis ship and 24 SM-3 missiles launched from a relocatable Vertical Launch System (VLS) based on the VLS that is installed in Navy Aegis ships. ", "Although BMD-capable Aegis ships were deployed to European waters before 2011, the first BMD-capable Aegis ship officially deployed to European waters as part of the EPAA departed its home port of Norfolk, VA, on March 7, 2011, for a deployment to the Mediterranean that lasted several months."], "subsections": []}, {"section_title": "Numbers of BMD-Capable Aegis Ships", "paragraphs": ["Under the FY2020 budget submission, the number of BMD-capable Navy Aegis ships is projected to increase from 38 at the end of FY2018 to 59 at the end of FY2024. During the period FY2018-FY2024, the portion of the force equipped with earlier Aegis variants is to decrease, and the number equipped with later variants is to increase."], "subsections": []}, {"section_title": "Forward Homeporting of BMD-Capable DDG-51s in Spain", "paragraphs": ["On October 5, 2011, the United States, Spain, and NATO jointly announced that, as part of the EPAA, four BMD-capable Aegis ships were to be forward-homeported (i.e., based) at the naval base at Rota, Spain. The four ships were transferred to Rota in FY2014 and FY2015. Navy officials have said that the four Rota-based ships can provide a level of level of presence in the Mediterranean for performing BMD patrols and other missions equivalent to what could be provided by about 10 BMD-capable Aegis ships that are homeported on the U.S. east coast. The Rota homeporting arrangement thus effectively releases about six U.S. Navy BMD-capable Aegis ships for performing BMD patrols or other missions elsewhere."], "subsections": []}, {"section_title": "Aegis BMD Flight Tests", "paragraphs": ["The Aegis BMD development effort, including Aegis BMD flight tests, has been described as following a development philosophy long held within the Aegis program office of \"build a little, test a little, learn a lot,\" meaning that development is done in manageable steps, then tested and validated before moving on to the next step. For a summary of Aegis BMD flight tests since 2002, see Appendix A ."], "subsections": []}, {"section_title": "Allied Participation and Interest in Aegis BMD Program", "paragraphs": [], "subsections": [{"section_title": "Japan19", "paragraphs": ["Japan is modifying all six of its Aegis destroyers to include the Aegis BMD capability. As of August 2017, four of the six ships reportedly had been modified, and Japan planned to modify a fifth by March 2018, or perhaps sooner than that. In November 2013, Japan announced plans to procure two additional Aegis destroyers and equip them as well with the Aegis BMD capability, which will produce an eventual Japanese force of eight BMD-capable Aegis destroyers. The two additional ships are expected to enter service in 2020 and 2021. Japanese BMD-capable Aegis ships have participated in some of the flight tests of the Aegis BMD system using the SM-3 interceptor (see Table A-1 in Appendix A ).", "Japan cooperated with the United States on development the SM-3 Block IIA missile. Japan developed certain technologies for the missile, and paid for the development of those technologies, reducing the missile's development costs for the United States.", "Japan plans to procure and operate two Aegis Ashore systems that reportedly are to be located at Ground Self-Defense Force (GSDF) facilities in Akita Prefecture in eastern Japan and Yamaguchi Prefecture in western Japan, and would be operated mainly by the GSDF (i.e., Japan's army). The two systems reportedly will be equipped with a new Lockheed-made radar called the Long Range Discrimination Radar (LRDR) rather than the Raytheon-made SPY-6 AMDR that is being installed on U.S. Navy Flight III DDG-51s, and reportedly will go into operation by 2023.", "A July 6, 2018, press report states that \"The U.S. and Japan are looking to jointly develop next-generation radar technology that would use Japanese semiconductors to more than double the detection range of the Aegis missile defense system.\""], "subsections": []}, {"section_title": "South Korea", "paragraphs": ["An October 12, 2018, press report states that \"the South Korean military has decided to buy ship-based SM-3 interceptors to thwart potential ballistic missile attacks from North Korea, a top commander of the Joint Chiefs of Staff revealed Oct. 12."], "subsections": []}, {"section_title": "Other Countries", "paragraphs": ["Other countries that MDA views as potential naval BMD operators (using either the Aegis BMD system or some other system of their own design) include the United Kingdom, the Netherlands, Spain, Germany, Denmark, and Australia. Spain, South Korea, and Australia either operate, are building, or are planning to build Aegis ships. The other countries operate destroyers and frigates with different combat systems that may have potential for contributing to BMD operations."], "subsections": []}]}, {"section_title": "FY2020 MDA Funding Request", "paragraphs": ["The Aegis BMD program is funded mostly through MDA's budget. The Navy's budget provides additional funding for BMD-related efforts. Table 1 shows MDA procurement and research and development funding for the Aegis BMD program. Research and development funding for the land-based SM-3 is funding for Aegis Ashore sites. MDA's budget also includes additional funding not shown in the table for operations and maintenance (O&M) and military construction (MilCon) for the Aegis BMD program."], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "FY2020 Funding Request", "paragraphs": ["One issue for Congress is whether to approve, reject, or modify MDA's FY2019 procurement and research and development funding requests for the program. In considering this issue, Congress may consider various factors, including whether the work that MDA is proposing to fund for FY2019 is properly scheduled for FY2019, and whether this work is accurately priced."], "subsections": []}, {"section_title": "Required vs. Available Numbers of BMD-Capable Aegis Ships", "paragraphs": ["Another potential issue for Congress concerns required numbers of BMD-capable Aegis ships versus available numbers of BMD-capable Aegis ships. Some observers are concerned about the potential operational implications of a shortfall in the available number of BMD-capable relative to the required number. Regarding the required number of BMD-capable Aegis ships, an August 15, 2018, Navy information paper states the following:", "The [Navy's] 2016 Force Structure Assessment [FSA] sets the requirement [for BMD-capable ships] at 54 BMD-capable ships, as part of the 104 large surface combatant requirement, to meet Navy unique requirements to support defense of the sea base and limited expeditionary land base sites\u2026.", "The minimum requirement for 54 BMD ships is based on the Navy unique requirement as follows. It accepts risk in the sourcing of combatant commander (CCDR) requests for defense of land.", "- 30 to meet CVN escort demand for rotational deployment of the carrier strike groups", "- 11 INCONUS for independent BMD deployment demand", "- 9 in forward deployed naval forces (FDNF) Japan to meet operational timelines in USINDOPACOM", "- 4 in FDNF Europe for rotational deployment in EUCOM."], "subsections": []}, {"section_title": "Burden of BMD Mission on U.S. Navy Aegis Ships", "paragraphs": ["A related potential issue for Congress is the burden that BMD operations may be placing on the Navy's fleet of Aegis ships, particularly since performing BMD patrols requires those ships to operate in geographic locations that may be unsuitable for performing other U.S. Navy missions, and whether there are alternative ways to perform BMD missions now performed by U.S. Navy Aegis ships, such as establishing more Aegis Ashore sites. A June 16, 2018, press report states the following:", "The U.S. Navy's top officer wants to end standing ballistic missile defense patrols and transfer the mission to shore-based assets.", "Chief of Naval Operations Adm. John Richardson said in no uncertain terms on June 12 that he wants the Navy off the tether of ballistic missile defense patrols, a mission that has put a growing strain on the Navy's hard-worn surface combatants, and the duty shifted towards more shore-based infrastructure.", "\"Right now, as we speak, I have six multi-mission, very sophisticated, dynamic cruisers and destroyers\u2015six of them are on ballistic missile defense duty at sea,\" Richardson said during his address at the U.S. Naval War College's Current Strategy Forum. \"And if you know a little bit about this business you know that geometry is a tyrant. ", "\"You have to be in a tiny little box to have a chance at intercepting that incoming missile. So, we have six ships that could go anywhere in the world, at flank speed, in a tiny little box, defending land.\"", "Richardson continued, saying the Navy could be used in emergencies but that in the long term the problem demands a different solution.", "\"It's a pretty good capability and if there is an emergent need to provide ballistic missile defense, we're there,\" he said. \"But 10 years down the road, it's time to build something on land to defend the land. Whether that's AEGIS ashore or whatever, I want to get out of the long-term missile defense business and move to dynamic missile defense.\"", "The unusually direct comments from the CNO come amid growing frustration among the surface warfare community that the mission, which requires ships to stay in a steaming box doing figure-eights for weeks on end, is eating up assets and operational availability that could be better used confronting growing high-end threats from China and Russia.", "The BMD mission was also a factor in degraded readiness in the surface fleet. Amid the nuclear threat from North Korea, the BMD mission began eating more and more of the readiness generated in the Japan-based U.S. 7th Fleet, which created a pressurized situation that caused leaders in the Pacific to cut corners and sacrifice training time for their crews, an environment described in the Navy's comprehensive review into the two collisions that claimed the lives of 17 sailors in the disastrous summer of 2017.", "Richardson said that as potential enemies double down on anti-access technologies designed to keep the U.S. Navy at bay, the Navy needed to focus on missile defense for its own assets.", "\"We're going to need missile defense at sea as we kind of fight our way now into the battle spaces we need to get into,\" he said. \"And so restoring dynamic maneuver has something to do with missile defense.", "A June 23, 2018, press report states the following:", "The threats from a resurgent Russia and rising China\u2015which is cranking out ships like it's preparing for war\u2015have put enormous pressure on the now-aging [U.S. Navy Aegis destroyer] fleet. Standing requirements for BMD patrols have put increasing strain on the U.S. Navy's surface ships. ", "The Navy now stands at a crossroads. BMD, while a burden, has also been a cash cow that has pushed the capabilities of the fleet exponentially forward over the past decade. The game-changing SPY-6 air and missile defense radar destined for DDG Flight III, for example, is a direct response to the need for more advanced BMD shooters. But a smaller fleet, needed for everything from anti-submarine patrols to freedom-of-navigation missions in the South China Sea, routinely has a large chunk tethered to BMD missions.", "\"Right now, as we speak, I have six multimission, very sophisticated, dynamic cruisers and destroyers\u2015six of them are on ballistic missile defense duty at sea,\" Chief of Naval Operations Adm. John Richardson said during an address at the recent U.S. Naval War College's Current Strategy Forum. \"You have to be in a tiny little box to have a chance at intercepting that incoming missile. So we have six ships that could go anywhere in the world, at flank speed, in a tiny little box, defending land.\"", "And for every six ships the Navy has deployed in a standing mission, it means 18 ships are in various stages of the deployment cycle preparing to relieve them.", "The Pentagon, led by Defense Secretary Jim Mattis, wants the Navy to be more flexible and less predictable\u2015\"dynamic\" is the buzzword of moment in Navy circles. What Richardson is proposing is moving standing requirements for BMD patrols away from ships underway and all the associated costs that incurs, and toward fixed, shore-based sites, and also surging the Navy's at-sea BMD capabilities when there is an active threat....", "In a follow-up response to questions posed on the CNO's comments, Navy spokesman Cmdr. William Speaks said the Navy's position is that BMD is an integral part of the service's mission, but where long-term threats exist, the Navy should \"consider a more persistent, land-based solution as an option.\"", "\"This idea is not about the nation's or the Navy's commitment to BMD for the U.S. and our allies and partners\u2015the Navy's commitment to ballistic missile defense is rock-solid,\" Speaks said. \"In fact, the Navy will grow the number of BMD-capable ships from 38 to 60 by 2023, in response to the growing demand for this capability.", "\"The idea is about how to best meet that commitment. In alignment with our national strategic documents, we have shifted our focus in an era of great power competition\u2015this calls us to think innovatively about how best to meet the demands of this mission and optimize the power of the joint force.\"...", "While the idea of saving money by having fixed BMD sites and freeing up multimission ships is sensible, it may have unintended consequences, said Bryan McGrath, a retired destroyer skipper and owner of the defense consultancy The FerryBridge Group.", "\"The BMD mission is part of what creates the force structure requirement for large surface combatants,\" McGrath said on Twitter after Defense News reported the CNO's comments. \"Absent it, the number of CG's and DDG's would necessarily decline. This may in fact be desirable, depending on the emerging fleet architecture and the roles and missions debate underway. Perhaps we need more smaller, multi-mission ships than larger, more expensive ones. ", "\"But it cannot be forgotten that while the mission is somewhat wasteful of a capable, multi-mission ship, the fact that we have built the ships that (among other things) do this mission is an incredibly good thing. If there is a penalty to be paid in peacetime sub-optimization in order to have wartime capacity--should this not be considered a positive thing?\"", "McGrath went on to say that the suite of combat systems that have been built into Aegis have been in response to the BMD threat. And indeed, the crown jewels of the surface fleet\u2015Aegis Baseline 9 software, which allows a ship to do both air defense and BMD simultaneously; the Aegis common-source library; the forthcoming SPY-6; cooperative engagement\u2015have come about either in part or entirely driven by the BMD mission....", "A Navy official who spoke on condition of anonymity, to discuss the Navy's shifting language on BMD, acknowledged the tone had shifted since the 2000s when the Navy latched onto the mission. But the official added that the situation more than a decade later has dramatically shifted.", "\"The strategic environment has changed significantly since the early 2000s\u2015particularly in the western Pacific. We have never before faced multiple peer rivals in a world as interconnected and interdependent as we do today,\" the official said. \"Nor have we ever seen technologies that could alter the character of war as dramatically as those we see emerging around us. China and Russia have observed our way of war and are on the move to reshape the environment to their favor.\"", "In response to the threat and Defense Secretary Jim Mattis' desire to use the force more dynamically, the Navy is looking at its options, the official said. \"This includes taking a look at how we employ BMD ships through the lens of great power competition to compete, deter and win against those who threaten us.\"", "A January 29, 2019, press report states the following:", "The Navy is looking to get out of the missile defense business, the service's top admiral said today, and the Pentagon's new missile defense review might give the service the off-ramp it has been looking for to stop sailing in circles waiting for ground-based missile launches.", "This wasn't the first time Adm. John Richardson bristled in public over his ships sailing in \"small boxes\" at sea tasked with protecting land, when they could be out performing other missions challenging Chinese and Russian adventurism in the South China Sea and the North Atlantic\u2026.", "\"We've got exquisite capability, but we've had ships protecting some pretty static assets on land for a decade,\" Richardson said at the Brookings Institute. \"If that [stationary] asset is going to be a long-term protected asset, then let's build something on land and protect that and liberate these ships from this mission.\"", "Japan is already moving down the path of building up a more robust ground-based sensor and shooter layer, while also getting its own ships out to sea armed with the Aegis radar and missile defense system, both of which would free up American hulls from what Richardson on Monday called \"the small [geographic] boxes where they have to stay for ballistic missile defense.\""], "subsections": []}, {"section_title": "Burden Sharing: U.S. vs. Allied Contributions to Regional BMD Capabilities", "paragraphs": ["Another related potential issue for Congress concerns burden sharing\u2014how allied contributions to regional BMD capabilities and operations compare to U.S. naval contributions to overseas regional BMD capabilities and operations, particularly in light of constraints on U.S. defense spending, worldwide operational demands for U.S. Navy Aegis ships, and calls by some U.S. observers for increased allied defense efforts. The issue can arise in connection with both U.S. allies in Europe and U.S. allies in Asia. Regarding U.S. allies in Asia, a December 12, 2018, press report states the following:", "In June, US Navy Chief of Naval Operations (CNO) Admiral John Richardson said during a speech at the US Naval War College that the US Navy should terminate its current practice of dedicating several US Navy warships solely for Ballistic Missile Defense (BMD).", "Richardson wanted US warships to halt BMD patrols off Japan and Europe as they are limiting, restrictive missions that could be better accomplished by existing land-based BMD systems such as Patriot anti-missile batteries, the US Terminal High Altitude Area Defense (THAAD) anti-missile system and the Aegis Ashore anti-missile system.", "In the months since dropping his bombshell, Richardson\u2014and much of the debate\u2014has gone quiet.", "\"My guess is the CNO got snapped back by the Pentagon for exceeding where the debate actually stood,\" one expert on US naval affairs told Asia Times.", "But others agree with him. Air Force Lt Gen Samuel A Greaves, the director of the US Missile Defense Agency (MDA), acknowledges Richardson's attempts to highlight how these BMD patrols were placing unwelcome \"strain on the (US Navy's) crews and equipment.\"", "But there are complications. While it may free US Navy warships for sea-control, rather than land defense, there is a concern that next- generation hypersonic cruise missiles could defeat land-based BMD systems, such as Aegis Ashore, while the US Navy's Aegis-equipped warships offer the advantages of high-speed mobility and stealth, resulting in greater survivability overall.", "As Japan prepares to acquire its first Aegis Ashore BMD system \u2013 and perhaps other systems such as the THAAD system which has been deployed previously in Romania and South Korea \u2013 the possibility that the US Navy will end its important BMD role represents abrupt change\u2026.", "Japan's decision to deploy Aegis Ashore can fill in any gap created by a possible US Navy cessation of BMD patrols. \"The land-based option is more reliable, less logistically draining, and despite being horrendously expensive, could be effective in the sense that it provides a degree of reassurance to the Japanese people and US government, and introduces an element of doubt of missile efficacy into [North Korean] calculations,\" said [Garren Mulloy, Associate Professor of International Relations at Daito Bunka University in Saitama, Japan], adding, however, that these systems could not cover Okinawa.", "\"Fixed sites in Japan could be vulnerable, and the Aegis vessels provide a flexible forward-defense, before anything enters Japanese airspace, but with obviously limited reactions times,\" Mulloy said. \"Aegis Ashore gives more reaction time \u2013 but over Japanese airspace.\"\u2026", "The silence about this sudden possible shift in the US defense posture in the western Pacific is understandable: it is a sensitive topic in Washington and Tokyo. However, the Trump administration has urged its allies to pay more for their own defense needs and to support US troops deployed overseas.", "Meanwhile, Tokyo needs to proceed cautiously given the likelihood that neighbors might view a move on BMD as evidence that Tokyo is adopting an increasingly aggressive defense posture in the region.", "But for them, it is a no-win situation. If the US does ditch the BMD patrol mission, China and North Korea might view the shift as equally menacing given that it greatly enhances the US Navy's maritime warfare capabilities."], "subsections": []}, {"section_title": "Conversion of Hawaii Aegis Test Site", "paragraphs": ["Another potential issue for Congress is whether to convert the Aegis test facility in Hawaii into an operational land-based Aegis BMD site. DOD's January 2019 missile defense review report states, in a section on improving or adapting existing BMD systems, that ", "Another repurposing option is to operationalize, either temporarily or permanently, the Aegis Ashore Missile Defense Test Center in Kauai, Hawaii, to strengthen the defense of Hawaii against North Korean missile capabilities. DoD will study this possibility to further evaluate it as a viable near-term option to enhance the defense of Hawaii. The United States will augment the defense of Hawaii in order to stay ahead of any possible North Korean missile threat. MDA and the Navy will evaluate the viability of this option and develop an Emergency Activation Plan that would enable the Secretary of Defense to operationalize the Aegis Ashore test site in Kauai within 30 days of the Secretary's decision to do so, the steps that would need to be taken, associated costs, and personnel requirements. This plan will be delivered to USDA&S, USDR&E, and USDP within six months of the release of the MDR.", "A January 25, 2019, press report states the following:", "The Defense Department will examine the funding breakdown between the Navy and the Missile Defense Agency should the government make Hawaii's Aegis Ashore Missile Defense Test Center into an operational resource, according to the agency's director.", "\"Today, it involves both Navy resources for the operational crews -- that man that site -- as well as funds that come to MDA for research, development and test production and sustainment,\" Lt. Gen. Sam Greaves said of the test center when asked how the funding would shake out between the Navy and MDA should the Pentagon move forward with the recommendation."], "subsections": []}, {"section_title": "Potential Contribution from Lasers, Railguns, and Guided Projectiles", "paragraphs": ["Another potential issue for Congress concerns the potential for ship-based lasers, electromagnetic railguns (EMRGs), and gun-launched guided projectiles (GLGPs, previously known as hypervelocity projectiles [HVPs]) to contribute in coming years to Navy terminal-phase BMD operations and the impact this might eventually have on required numbers of ship-based BMD interceptor missiles. Another CRS report discusses the potential value of ship-based lasers, EMRGs, and GLGPs for performing various missions, including, potentially, terminal-phase BMD operations."], "subsections": []}, {"section_title": "Technical Risk and Test and Evaluation Issues", "paragraphs": ["Another potential oversight issue for Congress is technical risk and test and evaluation issues in the Aegis BMD program. Regarding this issue, a December 2018 report from DOD's Director, Operational Test and Evaluation (DOT&E)\u2014DOT&E's annual report for FY2018\u2014stated the following in its section on the Aegis BMD program:", "Assessment", "\u2022 Results from flight testing, high-fidelity M&S, HWIL, and distributed ground testing demonstrate that Aegis BMD can intercept non-separating, simple-separating, and complex-separating ballistic missiles in the midcourse phase. However, flight testing and M&S did not address all expected threat types, ground ranges, and raid sizes.", "\u2022 FTM-45 successfully and fully demonstrated the Aegis BL 9.2 organic engagement capability and corrective action for the previous FTM-29 missile failure. FTM-29 was only partially able to demonstrate EOR capability given the in-flight missile failure. In FTM-29, the Aegis Weapon System supported the SM-3 Block IIA missile and demonstrated bi-directional communication between the SM-3 Block IIA guidance section and the KW until loss of signal at horizon. However, the weapon system did not exercise all aspects of communication after KW eject. DOT&E considers the FTM-29 failure to be an example of a shortfall in conducting ground testing in an operationally representative way, and an example of a deficiency found in OT that DT should have discovered.", "\u2022 The MDA implemented process improvements to better identify, report, and fi x common failures and anomalies identified during SM-3 ground testing prior to flight testing. ", "\u2022 SM CTV-03 demonstrated the capability of the Aegis BMD 4.1 upgrade to fi re an SM-6 Dual I missile. The BMD 4.1 build incorporates BL 9.C1 capabilities into the BMD 4.0 baseline.", "\u2022 FS-17 demonstrated the Aegis BMD 4.0.3 capability to interoperate with NATO partners over operational communication architectures during cruise missile and ballistic missile engagements, and to use remote data provided by NATO partners to prosecute remote engagements. JFTM-05 Event 2 demonstrated inter-ship communication between U.S. and Japanese destroyers using a realistic communications architecture while prosecuting ballistic missile engagements. Pacific Dragon demonstrated interoperability between U.S. Aegis BMD assets, Japanese destroyers, and Republic of Korea naval assets.", "\u2022 Aegis BMD has exercised rudimentary engagement coordination with Terminal High-Altitude Area Defense firing units, but not with Patriot. The MDA plans to include Patriot in FTO-03. MDA ground tests have routinely demonstrated that inter-element coordination and interoperability need improvement to increase situational awareness and improve engagement efficiency.", "\u2022 The MDA has been collaborating with DOT&E and the Under Secretary of Defense (Research and Engineering) to establish an affordable ground testing approach to support assessments of reliability. DOT&E cannot assess SM-3 missile reliability with confidence until the MDA is able to provide additional ground test data that simulates the in-flight environment. DOT&E is working with the MDA to determine if existing ground test venues are able to provide the needed missile reliability data.", "Recommendations", "The MDA should:", "1. Ensure that ground tests of all SM-3 missile components, sections, and all-up rounds use the same configuration as will be flown in flight tests (i.e., \"test as you fly\"). ", "2. Determine how to properly score acceptance ground test data for production missiles to enable their use in estimating SM-3 reliability.", "3. Fund and execute high-fidelity M&S RFRs for Aegis BL 9.2 SM-3 Block IIA and SM-6 Dual II scenarios that span the engagement battlespace.", "Regarding the SM-6 missile, the January 2018 DOT&E report also stated the following:", "Assessment", "\u2022 As reported in the DOT&E FY18 SM-6 BLK I FOT&E Report, the SM-6 remains effective and suitable with the exception of the classified deficiency identified in the FY13 IOT&E Report. The SM-6 Block 1 satisfactorily demonstrated compatibility with Aegis Weapon System Baseline 9 Integrated Fire Control capability.", "\u2022 In FY17-18, the Navy developed and tested specific software improvements to SM-6 BLK I to mitigate the classified performance problems discovered during IOT&E. As previously reported, testing conducted by the Navy demonstrated the software improvements perform as intended, but did not eliminate them.", "Recommendation", "1. The Navy should continue to improve software based on IOT&E results and verify corrective actions with flight tests."], "subsections": []}]}, {"section_title": "Legislative Activity for FY2020", "paragraphs": [], "subsections": [{"section_title": "Summary of Action on FY2020 MDA Funding Request", "paragraphs": [" Table 2 summarizes congressional action on the FY2020 request for MDA procurement and research and development funding for the Aegis BMD program.", "Appendix A. Aegis BMD Flight Tests", " Table A-1 presents a summary of Aegis BMD flight tests since January 2002. As shown in the table, since January 2002, the Aegis BMD system has achieved 33 successful exo-atmospheric intercepts in 42 attempts using the SM-3 missile (including 4 successful intercepts in 5 attempts by Japanese Aegis ships, and 2 successful intercepts in 3 attempts attempt using the Aegis Ashore system), and 7 successful endo-atmospheric intercepts in 7 attempts using the SM-2 Block IV and SM-6 missiles, making for a combined total of 40 successful intercepts in 49 attempts.", "In addition, on February 20, 2008, a BMD-capable Aegis cruiser operating northwest of Hawaii used a modified version of the Aegis BMD system with the SM-3 missile to shoot down an inoperable U.S. surveillance satellite that was in a deteriorating orbit. Including this intercept in the count increases the totals to 34 successful exo-atmospheric intercepts in 43 attempts using the SM-3 missile, and 41 successful exo- and endo-atmospheric intercepts in 50 attempts using SM-3, SM-2 Block IV, and SM-6 missiles."], "subsections": []}]}]}}
{"id": "RL33816", "title": "Broadband Loan and Grant Programs in the USDA\u2019s Rural Utilities Service", "released_date": "2019-03-22T00:00:00", "summary": ["Given the large potential impact broadband access may have on the economic development of rural America, concern has been raised over a \"digital divide\" between rural and urban or suburban areas with respect to broadband deployment. While there are many examples of rural communities with state-of-the-art telecommunications facilities, recent surveys and studies have indicated that, in general, rural areas tend to lag behind urban and suburban areas in broadband deployment.", "According to the Federal Communications Commission's Communications Marketplace Report, as of 2017, 24% of Americans in rural areas lacked coverage from fixed terrestrial 25 Mbps/3 Mbps broadband, as compared to only 1.5% of Americans in urban areas. The comparatively lower population density of rural areas is likely a major reason why broadband is less deployed than in more highly populated suburban and urban areas. Particularly for wireline broadband technologies\u2014such as cable modem and fiber\u2014the greater the geographical distances among customers, the larger the cost to serve those customers.", "The Rural Utilities Service (RUS) at the U.S. Department of Agriculture (USDA) houses three ongoing assistance programs exclusively created and dedicated to financing broadband deployment: the Rural Broadband Access Loan and Loan Guarantee Program, the Community Connect Grant Program, and the ReConnect Program. Additionally, the Telecommunications Infrastructure Loan and Loan Guarantee Program (previously the Telephone Loan Program) funds broadband deployment in rural areas. Distance Learning and Telemedicine (DLT) grants\u2014while not principally supporting connectivity\u2014fund equipment and software that operate via telecommunications to rural end-users of telemedicine and distance learning applications.", "The Consolidated Appropriations Act, 2019 (P.L. 116-6) provided $5.83 million to subsidize a rural broadband loan level of $29.851 million, $30 million to Community Connect broadband grants, $47 million for DLT grants, and $1.725 million in loan subsidies for a total loan level of $690 million for the Telecommunications Infrastructure Loan and Loan Guarantee Program. P.L. 116-6 also provided $550 million for the ReConnect Program, which is in addition to the $600 million provided in the 2018 Consolidated Appropriations Act.", "The Administration's FY2020 budget proposal requested zero funding for Rural Broadband Access Loans, $200 million for the ReConnect Program, $1.933 million in budget authority to subsidize a loan level of $690 million for Telecommunications Infrastructure Loans and Loan Guarantees, $30 million for Community Connect Grants, and $43.6 million for Distance Learning and Telemedicine Grants.", "On December 20, 2018, the President signed the 2018 farm bill (P.L. 115-334, Agriculture Improvement Act of 2018). Regarding the RUS broadband programs, the act includes provisions authorizing a grant component in combination with the broadband loan program; increasing the annual authorization level from $25 million to $350 million; raising the proposed service area eligibility threshold of unserved households from 15% to 50% for broadband loans; authorizing grants, loans, and loan guarantees for middle mile infrastructure; directing improved federal agency broadband program coordination; and providing eligible applicants with technical assistance and training to prepare applications. In the 116th Congress, appropriations will determine the extent to which these programs will be funded."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background: Broadband and Rural America", "paragraphs": ["The broadband loan and grant programs at RUS are intended to accelerate the deployment of broadband services in rural America. \"Broadband\" refers to high-speed internet access and advanced telecommunications services for private homes, commercial establishments, schools, and public institutions. Currently in the United States, residential broadband is primarily provided via cable modem (from the local provider of cable television service), fiber-optic cable, mobile wireless (e.g., smartphones), or over the copper telephone line (digital subscriber line or \"DSL\"). Other broadband technologies include fixed wireless and satellite.", "Broadband access enables a number of beneficial applications to individual users and to communities. These include ecommerce, telecommuting, voice service (voice over the internet protocol or \"VOIP\"), distance learning, telemedicine, public safety, and others. It is becoming generally accepted that broadband access in a community can play an important role in economic development. ", "Access to affordable broadband is viewed as particularly important for the economic development of rural areas because it enables individuals and businesses to participate fully in the online economy regardless of geographical location. For example, aside from enabling existing businesses to remain in their rural locations, broadband access could attract new business enterprises drawn by lower costs and a more desirable lifestyle. Essentially, broadband potentially allows businesses and individuals in rural America to live locally while competing globally in an online environment. A 2016 study from the Hudson Institute found that rural broadband providers directly and indirectly added $24.1 billion to the U.S. economy in 2015. The rural broadband industry supported 69,595 jobs in 2015, both through its own employment and the employment that its purchases of goods and services generated.", "Given the large potential impact broadband may have on the economic development of rural America, concern has been raised over a \"digital divide\" between rural and urban or suburban areas with respect to broadband deployment. While there are many examples of rural communities with state-of-the-art telecommunications facilities, recent surveys and studies have indicated that, in general, rural areas tend to lag behind urban and suburban areas in broadband deployment. For example", "According to the Federal Communications Commission's (FCC's) Communications Marketplace Report , \"As of year-end 2017, 94% of the overall population had coverage [of fixed terrestrial broadband at speeds of 25 Mbps/3 Mbps], up from 91.9% in 2016. Nonetheless, the gap in rural and Tribal America remains notable: 24% of Americans in rural areas and 32% of Americans in Tribal lands lack coverage from fixed terrestrial 25 Mbps/3 Mbps broadband, as compared to only 1.5% of Americans in urban areas. The data demonstrate, however, that the gap between urban and rural or Tribal areas has narrowed each year over the last five years.\" Also according to the FCC's Communications Market Report , rural areas continue to lag behind urban areas in mobile broadband deployment. Although evaluated urban areas saw an increase of 10 Mbps/3 Mbps mobile LTE from 81.9% in 2014 to 92.6% in 2017, such deployment in evaluated rural areas remained relatively flat at about 70%. According to January 2018 survey data from the Pew Research Center, 58% of adults in rural areas said they have a high-speed broadband connection at home, as opposed to 67% of adults in urban areas and 70% of adults in suburban areas. A November 2017 Census Bureau survey reported by the National Telecommunications and Information Administration (NTIA) Digital Nation Data Explorer showed 72.9% of rural residents reporting using the internet, versus 78.5% of urban residents. According to NTIA, the data \"indicates a fairly constant 6-9 percentage point gap between rural and urban communities' internet use over time.\" ", "The comparatively lower population density of rural areas is likely the major reason why broadband is less deployed than in more highly populated suburban and urban areas. Particularly for wireline broadband technologies\u2014such as cable modem, fiber, and DSL\u2014the greater the geographical distances among customers, the larger the cost to serve those customers. Thus, there is often less incentive for companies to invest in broadband in rural areas than, for example, in an urban area where there is more demand (more customers with perhaps higher incomes) and less cost to wire the market area.", "The terrain of rural areas can also be a hindrance, in that it is more expensive to deploy broadband technologies in a mountainous or heavily forested area. An additional added cost factor for remote areas can be the expense of \"backhaul\" (e.g., the \"middle mile\"), which refers to the installation of a dedicated line that transmits a signal to and from an internet backbone, which is typically located in or near an urban area.", "Another important broadband availability issue is the extent to which there are multiple broadband providers offering competition and consumer choice. Typically, multiple providers are more prevalent in urban than in rural areas."], "subsections": []}, {"section_title": "Rural Broadband Programs at the Rural Utilities Service", "paragraphs": ["Because private providers are unlikely to earn enough revenue to cover the costs of deploying and operating broadband networks in many unserved rural areas, it is unlikely that private investment alone will bring service to these areas. In 2000, given the lagging deployment of broadband in rural areas, Congress and the Administration acted to initiate pilot broadband loan and grant programs within the Rural Utilities Service of the U.S. Department of Agriculture. While RUS had long maintained telecommunications loan and grant programs (Rural Telephone Loans and Loan Guarantees, Rural Telephone Bank, and more recently, the Distance Learning and Telemedicine Loans and Grants), none were exclusively dedicated to financing rural broadband deployment. Title III of the FY2001 agriculture appropriations bill ( P.L. 106-387 ) directed USDA/RUS to conduct a \"pilot program to finance broadband transmission and local dial-up Internet service in areas that meet the definition of 'rural area' used for the Distance Learning and Telemedicine Program.\"", "Subsequently, on December 5, 2000, RUS announced the availability of $100 million in loan funding through a one-year pilot program \"to finance the construction and installation of broadband telecommunications services in rural America.\" The broadband pilot loan program was authorized under the authority of the Distance Learning and Telemedicine Program (7 U.S.C. 950aaa), and was available to \"legally organized entities\" not located within the boundaries of a city or town having a population in excess of 20,000.", "The FY2002 agriculture appropriations bill ( P.L. 107-76 ) designated a loan level of $80 million for broadband loans, and on January 23, 2002, RUS announced that the pilot program would be extended into FY2002, with $80 million in loans made available to fund many of the applications that did not receive funding during the previous year.", "Meanwhile, the FY2002 agriculture appropriations bill ( P.L. 107-76 ) allocated $20 million for a pilot broadband grant program, also authorized under the Distance Learning and Telemedicine Program. On July 8, 2002, RUS announced the availability of $20 million for a pilot grant program for the provision of broadband service in rural America. The program was specifically targeted to economically challenged rural communities with no existing broadband service. Grants were made available to entities providing \"community-oriented connectivity,\" which the RUS defined as those entities \"who will connect the critical community facilities including the local schools, libraries, hospitals, police, fire and rescue services and who will operate a community center that provides free and open access to residents.\"", "The pilot program was extended into FY2003, as the Consolidated Appropriations Resolution of 2003 ( P.L. 108-7 ) allocated $10 million for broadband grants.", "Currently, RUS has four ongoing programs that have been established to incentivize and subsidize broadband infrastructure investment in unserved and underserved rural areas. These include the following:", "Rural Broadband Access Loan s \u2014funds the costs of construction, improvement, or acquisition of facilities and equipment needed to provide service in eligible rural areas. Community Connect Grants \u2014funds broadband deployment into rural communities where it is not yet economically viable for private sector providers to deliver service. Telecommunications Infrastructure Loans and Loan Guarantees \u2014funds the construction, maintenance, improvement, and expansion of telephone service and broadband in extremely rural areas with a population of 5,000 or less. Distance Learning and Telemedicine Grants \u2014principally funds end-user equipment to help rural communities use telecommunications to link teachers and medical service providers in one area to students and patients in another.", "In addition, a new broadband loan and grant pilot program\u2014the ReConnect Program\u2014has been established and funded at $600 million by the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ).", " Table A-1 in the Appendix shows the total amount and number of awards provided by the RUS broadband programs for each state between FY2009 and FY2016.", "In its April 2017 report, Rural Broadband Deployment: Improved Consistency with Leading Practices Could Enhance Management of Loan and Grant Programs , GAO reported that (according to RUS data) since FY2004, RUS has approved 704 broadband projects totaling almost $8.6 billion in loans and $144.8 million in grants to deploy telecommunications or broadband infrastructure networks in rural areas."], "subsections": [{"section_title": "Rural Broadband Access Loan and Loan Guarantee Program", "paragraphs": ["Building on the pilot broadband loan program at RUS, Section 6103 of the Farm Security and Rural Investment Act of 2002 ( P.L. 107-171 ) amended the Rural Electrification Act of 1936 to authorize a loan and loan guarantee program to provide funds for the costs of the construction, improvement, and acquisition of facilities and equipment for broadband service in eligible rural communities. Section 6103 made available, from the funds of the Commodity Credit Corporation (CCC), a total of $100 million through FY2007. P.L. 107-171 also authorized any other funds appropriated for the broadband loan program. The program was subsequently reauthorized by Section 6110 of the Food, Conservation, and Energy Act of 2008 ( P.L. 110-246 ), and by Section 6104 of the Agricultural Act of 2014 ( P.L. 113-79 ). ", "Beginning in FY2004, Congress annually blocked mandatory funding from the CCC. Thus\u2014starting in FY2004\u2014the program was funded as part of annual appropriations in the Distance Learning and Telemedicine account within the Department of Agriculture appropriations bill. Every fiscal year, Congress approves an appropriation (loan subsidy) and a specific loan level (lending authority) for the Rural Broadband Access Loan and Loan Guarantee Program. Table 1 shows\u2014for the life of the program to date\u2014loan subsidies and loan levels (lending authority) set by Congress in annual appropriations bills. ", "The Rural Broadband Access Loan and Loan Guarantee Program is codified as 7 U.S.C. 950bb. On July 30, 2015, the RUS published in the Federal Register the interim rule (7 C.F.R. part 1738) implementing the Rural Broadband Access Loan and Loan Guarantee Program as reauthorized by the enactment of the Agricultural Act of 2014 ( P.L. 113-79 ), and the interim rule was made final on June 9, 2016. Entities eligible to receive loans include corporations, limited liability companies, cooperative or mutual organizations, Indian tribes or tribal organizations, and state or local governments. Eligible areas for funding must be completely contained within a rural area (or composed of multiple rural areas). Additionally, at least 15% of the households in the proposed funded service areas must be unserved, no part of the proposed service area can have three or more incumbent service providers, and no part of the proposed service area can overlap with the service area of current RUS borrowers or of grantees that were funded by RUS. ", "The latest Notice of Solicitation of Applications (NOSA) announced that RUS is now accepting applications on a rolling basis through September 30, 2019, which will give RUS the ability to request additional information and modifications to submitted applications if necessary. RUS will evaluate the submitted applications every 90 days, and anticipates at least two evaluation periods for FY2019. The minimum loan amount is $100,000, while the maximum loan amount is $25 million. The NOSA has maintained its definition of broadband service and broadband lending speed at no less than 25 Mbps download and 3 Mbps upload for both mobile and fixed services. ", "The 2018 farm bill, which was signed by the President on December 20, 2018 ( P.L. 115-334 , Agriculture Improvement Act of 2018), adds a grant component to the broadband loan program, increases the annual authorization level from $25 million to $350 million, and changes the proposed service area threshold from 15% to 50%. RUS will issue a revised regulation that implements the changes made by the 2018 farm bill. For up to one year after enactment, the Secretary shall use the previously existing rules and regulations for the broadband loan program until a final rule is issued.", "For the latest application information, see http://www.rd.usda.gov/programs-services/farm-bill-broadband-loans-loan-guarantees ."], "subsections": []}, {"section_title": "Community Connect Broadband Grants", "paragraphs": ["The Consolidated Appropriations Act of 2004 ( P.L. 108-199 ) appropriated $9 million \"for a grant program to finance broadband transmission in rural areas eligible for Distance Learning and Telemedicine Program benefits authorized by 7 U.S.C. 950aaa.\" Essentially operating the same as the pilot broadband grants, the program provides grant money to applicants proposing to provide broadband on a \"community-oriented connectivity\" basis to currently unserved rural areas for the purpose of fostering economic growth and delivering enhanced health care, education, and public safety services. Funding for the broadband grant program is provided through annual appropriations in the Distance Learning and Telemedicine account within the Department of Agriculture appropriations bill. Table 2 shows a history of appropriations for the Community Connect Broadband Grants.", "Eligible applicants for broadband grants include most state and local governments, federally recognized tribes, nonprofits, and for-profit corporations. ", "Funded projects must serve a rural area where broadband service above a specified minimum speed does not exist, deploy free broadband service for at least two years to all community facilities, and offer broadband to residential and business customers. Up to 10% of the grant may be used for the improvement, expansion, construction, or acquisition of a community center that provides online access to the public. ", "On May 3, 2013, RUS issued a new final rule for Community Connect grants in the Federal Register . The final rule changes previous requirements related to matching funds, eligible communities, and application scoring criteria. The final rule also removes the previous definition of broadband service speed (200 kbps). A new threshold for broadband service speed and broadband grant speed (the speed the grantee must deliver) will be provided in an annual Notice of Funding Availability (NOFA) in the Federal Register . The NOFA will also specify the deadline for applications, the total amount of funding available, and the maximum and minimum amount of funding available for each grant. ", "In February 2019, RUS issued a Funding Opportunity Announcement (FOA) establishing an application window for FY2019 Community Connect grants through April 15, 2019. The FOA set a minimum threshold for speeds constituting broadband service at 10 Mbps download and 1 Mbps upload for both fixed and mobile broadband. The minimum broadband speed that an applicant must propose to deliver is 25 Mbps download, 3 Mbps upload for both fixed and mobile service to the customer. The minimum grant is $100,000 and the maximum is $3 million. Further information, including application materials and guidelines, is available at http://www.rd.usda.gov/programs-services/community-connect-grants . ", "The 2018 farm bill ( P.L. 115-334 ) codifies the Community Connect Grant Program and authorizes the program at $50 million for each of fiscal years 2018 through 2023. "], "subsections": []}, {"section_title": "Telecommunications Infrastructure Loans and Loan Guarantees", "paragraphs": ["The Telecommunications Infrastructure Loan and Loan Guarantee Program provides loans and loan guarantees for the construction, maintenance, improvement, and expansion of telephone service and broadband in rural areas. The program was first authorized in 1949 to finance rural telephone service. Since 1995, RUS has required that networks funded by this program offer broadband service as well.", "Loans and loan guarantees are available only to rural areas and towns with a population of 5,000 or less. Eligible areas are those without telecommunications facilities or areas where the applicant is the recognized telecommunications provider. Funded projects cannot duplicate existing services.", "The program is authorized to provide several different types of financing, including", "direct Treasury rate loans, which bear interest at the government's cost of money (or the current Treasury rate). Thus, the interest charged varies with the Treasury rate. As Treasury rates increase, so does the cost to the borrower for these loans. guaranteed loans, which are provided to borrowers of a nongovernment lender or from the Federal Financing Bank (FFB). The interest rate charged on FFB loans is the Treasury rate plus an administrative fee of one-eighth of 1%. The terms of these loans may vary significantly and allow borrowers more flexibility in meeting their financing needs. hardship direct loans, which bear interest at a fixed rate of 5% per year. These loans are intended only for borrowers with extremely high investment costs in terms of per subscriber service. These borrowers also have a very low number of subscribers for each mile of telecommunications line constructed. This low subscriber density inherently increases the cost to serve the most sparsely populated rural areas. Because of the high cost of the investment needed, these borrowers cannot typically afford higher interest rate loans. ", "The annual loan level for the Telecommunications Infrastructure Loan and Loan Guarantee Program is $690 million. Currently, the 5% hardship loans are not offered\u2014because of low interest rates, the Treasury and FFB loans can currently offer lower interest rates than the 5% offered by hardship loans."], "subsections": []}, {"section_title": "Distance Learning and Telemedicine Program", "paragraphs": ["The Distance Learning and Telemedicine (DLT) Program was established by the 1996 farm bill\u2014the Federal Agriculture Improvement and Reform Act of 1996 ( P.L. 104-127 ). Though initially providing both grants and loans, since FY2009 only DLT grants have been awarded by RUS. ", "DLT grants serve as initial capital assets for equipment and software that operate via telecommunications to rural end-users of telemedicine and distance learning. DLT grants do not support connectivity. Grant funds may be used for audio, video, and interactive video equipment; terminal and data terminal equipment; computer hardware, network components, and software; inside wiring and similar infrastructure; acquisition of instructional programming; broadband facilities; and technical assistance. Eligible applicants include most entities in rural areas that provide education or health care through telecommunications, including most state and local governmental entities, federally recognized tribes, nonprofits, for-profit businesses, and consortia of eligible entities.", "The 2018 farm bill ( P.L. 115-334 ) reauthorizes the DLT program through FY2023 at $82 million per year and sets aside 20% of DLT grant funding for applications related to substance use disorder treatment services."], "subsections": []}, {"section_title": "ReConnect Program", "paragraphs": ["An Interagency Task Force on Agriculture and Rural Prosperity was created on April 25, 2017, by Executive Order 13790 and was charged with identifying legislative, regulatory, and policy changes to promote agriculture, economic development, job growth, infrastructure improvements, technological innovation, energy security, and quality of life in rural America. The first recommendation of the Task Force's report to the President was to expand e-connectivity in rural and tribal areas. ", "To help implement this recommendation, the Administration requested $500 million in a discretionary add-on to the FY2018 appropriation which would fund a combination grant/loan program at USDA/RUS to deploy broadband in rural and tribal areas. ", "Section 779 of the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) appropriated $600 million to RUS to \"conduct a new broadband loan and grant pilot program.\" The law states that the funding is to \"remain available until expended,\" and that", "at least 90% of the households to be served by a project receiving a loan or grant under the pilot program shall be in a rural area without sufficient access to broadband, defined for this pilot program as 10 Mbps downstream, and 1 Mbps upstream, which shall be reevaluated and redetermined, as necessary, on an annual basis by the Secretary of Agriculture; an entity to which a loan or grant is made under the pilot program shall not use the loan or grant to overbuild or duplicate broadband expansion efforts made by any entity that has received a broadband loan from RUS; in addition to other available funds, not more than 4% of the funds can be used for administrative costs to carry out the pilot program and up to 3% may be utilized for technical assistance and predevelopment planning activities to support the most rural communities; and RUS shall adhere to the notice, reporting, and service area assessment requirements previously established in the 2014 farm bill.", "The Explanatory Statement that accompanied the FY2018 Consolidated Appropriations Act states", "The agreement reiterates that funding should be prioritized to areas currently lacking access to broadband service, and investments in broadband shall consider any technology that best serves the goals of broadband expansion. Lastly, the agreement restates the importance of coordination among federal agencies in expanding broadband deployment and adoption and expects the Department to take caution to maximize these limited resources and not overbuild or duplicate existing broadband capable infrastructure.", "The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provides $550 million in FY2019 for the pilot broadband loan and grant program, now called the Ru ral eConnectivity Pilot Program, or ReConnect Rural Broadband Program. The $550 million includes $125 million in direct appropriation, plus $425 million to be reprogrammed from the cushion of credit subaccount (7 U.S.C. 940c). Division B, Section 779 direct s the Secretary of Agriculture to ensure that applicants determined to be ineligible for the ReConnect Program have a means of appealing or otherwise challenging that determination in a timely fashion. The law also directs the Secretary, in determining whether an entity may overbuild or duplicate broadband expansion efforts made by an entity that has received an RUS broadband loan, to not consider loans that were rescinded or defaulted on, or loans the terms and conditions of which were not met, if the entity under consideration has not previously defaulted on, or failed to meet the terms and conditions of, a Rural Utilities Service loan or had a Rural Utilities Service loan rescinded.", "On December 14, 2018, RUS released the Funding Opportunity Announcement ( FOA ) and solicitation of applications for the ReConnect Program. As set forth in the statute, at least 90% of the households to be served by a project receiving a loan or grant under the pilot program shall be in a rural area without sufficient access to broadband at a minimum speed of 10 Mbps/1 Mbps. RUS defines \"sufficient access to broadband\" as any rural area that has fixed, terrestrial broadband service delivering at least 10 Mbps downstream and 1 Mbps upstream. Mobile and satellite service will not be considered in making the determination that households in the proposed funded service area do not have sufficient access to broadband. ", "With the government shutdown delaying the rollout of the ReConnect Program, on February 25, 2019, RUS released an amendment and clarification to the December FOA , with revised application deadlines. ", "Approximately $600 million has been set aside for funding opportunities under the FOA, with additional budget authority available for a reserve which may be used for additional loans or grants. Award recipients must complete projects within five years. Entities eligible for awards are states or local governments, U.S. territories, an Indian tribe, nonprofit entities, for-profit corporations, limited liability companies, and cooperative or mutual organizations. This includes telecommunications companies, rural electric cooperatives and utilities, internet service providers, and municipalities.", "Funds will be awarded for projects that have financially sustainable business models that will bring broadband to rural homes, businesses, farms, ranches, and community facilities such as first responders, health care facilities, and schools. The ReConnect Program consists of three funding categories."], "subsections": [{"section_title": "100% loan", "paragraphs": ["Up to $200 million is available. The maximum amount that can be requested is $50 million. Interest rate is set at a fixed 2%. Eligible areas are where 90% of households do not have sufficient access to broadband at 10 Mbps/1 Mbps. Applicants must propose to build a network capable of providing service to every premise in the proposed funded service area at a minimum speed of 25 Mbps/3 Mbps. Applications accepted on a rolling basis through July 12, 2019."], "subsections": []}, {"section_title": "50% loan/50% grant combination", "paragraphs": ["Up to $200 million is available. The maximum amount that can be requested is $25 million for the loan and $25 million for the grant. Loan and grant amounts will always be equal. Interest rate for the loan will be set at the Treasury rate. Eligible areas are where 90% of households do not have sufficient access to broadband at 10 Mbps/1 Mbps. Applicants must propose to build a network capable of providing service to every premise in the proposed funded service area at a minimum speed of 25 Mbps/3 Mbps Applications accepted on a rolling basis through June 21, 2019."], "subsections": []}, {"section_title": "100% grant", "paragraphs": ["Up to $200 million is available. The maximum amount that can be requested is $25 million. Applicants must provide a matching contribution equal to 25% of the cost of the overall project. Eligible areas are where 100% of households do not have sufficient access to broadband at 10 Mbps/1 Mbps. Applicants must propose to build a network capable of providing service to every premise in the proposed funded service area at a minimum speed of 25 Mbps/3 Mbps. Applications accepted on a rolling basis through May 31, 2019.", "More information on the ReConnect Program is available at https://reconnect.usda.gov ."], "subsections": []}]}]}, {"section_title": "Impact of Universal Service Reform on RUS Broadband Loan Programs", "paragraphs": ["RUS has three programs that provide or have provided loans for broadband infrastructure projects: the Rural Broadband Access Loan and Loan Guarantee program (also known as the Farm Bill broadband loan program), the Broadband Initiatives Program (BIP under the ARRA), and the Telecommunications Infrastructure Loan Program (established in 1949 as the Rural Telephone Loan and Loan Guarantee program).", "Whereas RUS broadband loans are used as up-front capital to invest in broadband infrastructure, the Federal Communications Commission's (FCC's) Universal Service Fund (USF)\u2014specifically, the high cost fund\u2014has functioned as an ongoing subsidy to keep the operation of telecommunications networks in high cost areas profitable for providers. Many RUS telecommunications and broadband borrowers (loan recipients) receive high cost USF subsidies. In many cases, the subsidy received from USF helps provide the revenue necessary to keep the loan viable. The Telecommunications Infrastructure Loan Program is highly dependent on high cost USF revenues, with 99% (476 out of 480 borrowers) receiving interstate high cost USF support. This is not surprising, given that the RUS Telecommunications Infrastructure Loans are available only to the most rural and high cost areas (towns with populations less than 5,000). Regarding broadband loans, 60% of BIP (stimulus) borrowers draw from state or interstate USF support mechanisms, while 10% of Farm Bill (Rural Broadband Access Loan and Loan Guarantee Program) broadband borrowers receive interstate high cost USF support.", "The FCC, in an October 2011 decision, adopted an order that calls for the USF to be transformed, in stages, over a multiyear period\u2014from a mechanism to support voice telephone service to one that supports the deployment, adoption, and use of both fixed and mobile broadband. More specifically, the high cost program is being phased out and a new fund, the Connect America Fund (CAF), which includes the targeted Mobility Fund and new Remote Areas Fund, is replacing it. ", "During this transition, the uncertainty surrounding the FCC's proposed methodology for distributing Connect America Fund monies has led many small rural providers to postpone or cancel investment in broadband network upgrades. According to RUS, \"demand for RUS loans dropped to roughly 37% of the total amount of loan funds appropriated by Congress in FY2012,\" and \"[c]urrent and prospective RUS borrowers have communicated their hesitation to increase their outstanding debt and move forward with planned construction due to the recently implemented reductions in USF support and Inter-Carrier Compensation (ICC) payments.\""], "subsections": []}, {"section_title": "Appropriations", "paragraphs": ["The Rural Broadband Access Loan and Loan Guarantee Program, the Community Connect Grant Program, the Telecommunications Infrastructure Loan and Loan Guarantee program, the Rural Broadband ReConnect Program, and the Distance Learning and Telemedicine grant program are funded through the annual Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act. The appropriations provided to the broadband loan programs are loan subsidies which support a significantly higher loan level. Table 3 shows recent and proposed appropriations for the rural broadband programs in the Rural Utilities Service."], "subsections": [{"section_title": "FY2018", "paragraphs": ["The Administration's FY2018 budget proposal requested the following for RUS broadband programs:", "Rural Broadband Access Loans\u2014$4.5 million in budget authority to subsidize a broadband loan level of $27 million. According to the budget proposal, this funding level will provide for approximately 3 loans in FY2018. Telecommunications Infrastructure Loans\u2014$0.863 million in budget authority to subsidize a loan level of $690 million ($345 million for Treasury loans and $345 million for FFB loans). The subsidy is for Treasury loans. According to the budget proposal, this funding level will provide for approximately 40 loans in FY2018. Community Connect and DLT grants\u2014for FY2018, the Administration is proposing transferring Community Connect and DLT grants into a new $162 million \"Rural Economic Infrastructure Program,\" which will also include Rural Development Community Facilities grants and Home Repair grants. Up to $80 million will be directed toward the Appalachian region. According to the Administration, the new account \"combines the Rural Development grant programs into one account to provide the Administration with the flexibility to place resources where significant impact can be made for economic infrastructure development.\"", "On July 12, 2017, the House Appropriations Committee approved the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2018 ( H.R. 3268 ; H.Rept. 115-232 ). The bill provided $4.521 million to subsidize a loan level of $26.991 million for the broadband loan program. Funding provided for the broadband loan program was intended to promote availability in those areas where there is not otherwise a business case for private investment in a broadband network. The committee directed RUS to focus expenditures on projects that bring broadband service to underserved households and areas.", "The House bill provided $122.692 million for the new Rural Economic Infrastructure Account (24% below the Administration request), which would include both Community Connect and DLT grants, along with Community Facilities grants and Home Repair grants. The bill included language requiring at least 15% of the account resources ($18.4 million) be allocated to each program area. The committee noted that tribal communities continue to struggle with gaining access to broadband service, and encouraged the Secretary to provide a report that identifies the specific challenges Indian Tribal Organizations (ITOs) have in gaining access to broadband service and provide a plan for addressing these challenges, including how the Community Connect program can assist ITOs.", "Regarding telecommunications loans, the House matched the Administration proposal, providing a loan level of $690 million ($345 million in direct Treasury loans and $345 million in FFB loans) with an appropriation of $0.863 million to subsidize direct Treasury loans.", "Additionally, the House Appropriations Committee report directed USDA to continue coordinating with the FCC, NTIA, and other related federal agencies to ensure that policies tied to one federal program do not undermine the objectives and functionality of another. The committee directed the department to prepare a report, in collaboration with the FCC and DOC, detailing areas of responsibility toward addressing rural broadband issues. The report shall include, but not be limited to, how the programs work complimentarily to one another; how they address broadband issues in unserved and underserved areas, including tribal lands; identify barriers to infrastructure investment in rural areas and tribal lands; data speeds which fixed, wireless, and mobile broadband users in rural areas and tribal lands experience; and cost estimates to increase speeds to 25 Mbps in unserved communities and communities currently being served by speeds less than 25 Mbps. ", "On July 20, 2017, the Senate Appropriations Committee approved its version of the FY2018 agriculture appropriations bill ( S. 1603 ; S.Rept. 115-131 ). The bill provided $4.53 million to subsidize a loan level of $27.043 million for the broadband loan program, $30 million for the Community Connect grant program, and $26.6 million for DLT grants. Unlike the House and the Administration request, the committee did not include funding for Rural Economic Infrastructure grants. For telecommunications loans, the Senate matched the House bill and the Administration proposal, providing a loan level of $690 million ($345 million in direct Treasury loans and $345 million in FFB loans) with an appropriation of $0.863 million to subsidize direct Treasury loans.", "Regarding the broadband loan program, the committee encouraged RUS to focus expenditures on projects that bring broadband service to currently unserved households, and directed RUS to report back to the committee on administrative efforts to eliminate duplicative or overbuilding of broadband technology. The committee also recommended that USDA explore a pilot grant program to demonstrate the use of multistrand fiber-optic cable that exists as part of electrical transmission infrastructure to provide state-of-the-art broadband services to currently underserved rural schools and medical centers within a mile of the existing cable.", "The Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) provided $5 million to subsidize a broadband loan level of $29.851 million, $30 million to Community Connect broadband grants, and $49 million for DLT grants, which included an additional $20 million to address the opioid epidemic in rural America. P.L. 115-141 also appropriated $600 million to RUS to \"conduct a new broadband loan and grant pilot program.\" "], "subsections": []}, {"section_title": "FY2019", "paragraphs": ["The Administration's FY2019 budget proposal requested the following for RUS broadband programs:", "Rural Broadband Access Loans\u2014$4.5 million in budget authority to subsidize a broadband loan level of $23.149 million. According to the budget proposal, this funding level will provide for approximately three loans in FY2019. Telecommunications Infrastructure Loans and Loan Guarantees\u2014$0.863 million in budget authority to subsidize a loan level of $690 million ($172.6 million for Treasury loans and $517.4 million for FFB loans). The subsidy is for Treasury loans. According to the budget proposal, this funding level will provide for approximately 30 loans in FY2019. Community Connect Grants\u2014$30 million, which will support approximately 13 broadband grants in FY2019. Distance Learning and Telemedicine Grants\u2014$23.6 million, which will support approximately 72 projects in FY2019.", "On May 16, 2018, the House Appropriations Committee approved the FY2019 Agriculture Appropriations bill ( H.R. 5961 ; H.Rept. 115-706 ). The bill would provide the following:", "Rural Broadband Access Loans\u2014$5.83 million in budget authority to subsidize a broadband loan level of $29.851 million. Telecommunications Infrastructure Loans and Loan Guarantees\u2014$1.125 million in budget authority to subsidize direct Treasury loans set at a level of $465 million. Along with a loan level $225 million for FFB guaranteed loans, the total loan level is $690 million. Community Connect Grants\u2014$30 million. Distance Learning and Telemedicine Grants\u2014$32 million. ReConnect Program\u2014$550 million. This appropriation would continue the pilot broadband loan and grant program that was funded (at $600 million) in the FY2018 Consolidated Appropriations Act, 2018 ( P.L. 115-141 ).", "In the committee report, the committee expressed its view that \"it is important for Departments to avoid efforts that could duplicate existing networks built by private investment or those built leveraging and utilizing other federal programs.\" As such, the committee \"directs the Secretary of Agriculture to coordinate with the Federal Communications Commission (FCC) and the National Telecommunications Information Administration (NTIA) to ensure wherever possible that broadband loans and grants issued under the pilot program are being targeted to areas that are currently unserved.\" The committee directed USDA to use the NTIA's assessment of the current state of broadband access nationwide, and to explore using all broadband technologies, including, but not limited to, fiber, cable modem, fixed wireless, and television white space.", "The committee also noted that tribal communities continue to struggle with gaining access to broadband service, and encouraged the Secretary to provide a report that identifies the specific challenges Indian Tribal Organizations (ITOs) have in gaining access to broadband service and provide a plan for addressing these challenges, including how the Community Connect program can assist ITOs.", "On May 24, 2018, the Senate Appropriations Committee approved its FY2019 Agriculture Appropriations bill ( S. 2976 ; S.Rept. 115-259 ). The bill would provide the following:", "Rural Broadband Access Loans\u2014$5.83 million in budget authority to subsidize a broadband loan level of $29.851 million. Telecommunications Infrastructure Loans and Loan Guarantees\u2014$1.725 million in budget authority to subsidize direct Treasury loans set at a level of $345 million. Along with a loan level of $345 million for FFB guaranteed loans, the total loan level is $690 million. Community Connect Grants\u2014$30 million. Distance Learning and Telemedicine Grants\u2014$50 million (including $20 million to help address the opioid epidemic in rural America). ReConnect Program\u2014$425 million.", "The committee encouraged RUS to focus expenditures on projects that bring broadband service to currently unserved households, and directed RUS to report back to the committee on administrative efforts to eliminate duplicative or overbuilding of broadband technology. The committee also recommended that USDA explore a pilot grant program to demonstrate the use of multistrand fiber-optic cable that exists as part of electrical transmission infrastructure to provide state-of-the-art broadband services to currently underserved rural schools and medical centers within a mile of the existing cable; encouraged RUS to coordinate with the FCC and other relevant federal entities when making determinations of sufficient broadband access, to ensure the most accurate and up-to-date broadband coverage data are used, while being cognizant of potential problems of overbuilding; encouraged the Secretary to utilize appropriate grant program funds to locate buried, antiquated infrastructure facilities prior to construction of new utilities infrastructure financed by RUS; and urged RUS to ensure the agency's criteria and application processes provide for fair consideration of open access projects by accounting for the unique structures and opportunities such projects present in advancing broadband deployment in unserved and underserved communities.", "On February 15, 2019, the Consolidated Appropriations Act, 2019 was signed into law ( P.L. 116-6 ). The FY2019 appropriations and levels are as follows:", "Rural Broadband Access Loans\u2014$5.83 million in budget authority to subsidize a broadband loan level of $29.851 million. Telecommunications Infrastructure Loans and Loan Guarantees\u2014$1.725 million in budget authority to subsidize direct Treasury loans set at a level of $345 million. Along with a loan level of $345 million for FFB guaranteed loans, the total loan level is $690 million. Community Connect Grants\u2014$30 million. Distance Learning and Telemedicine Grants\u2014$47 million (including $16 million to address the opioid epidemic in rural America). ReConnect Program\u2014$550 million ($125 million direct appropriation plus $425 million to be reprogrammed from the cushion of credit account).", "P.L. 116-6 also directs USDA rural development programs, including the broadband programs, to allocate (to the maximum extent feasible) at least 10% of funds to projects in persistent poverty counties. ", "The conference report ( H.Rept. 116-9 ) contains language directing USDA to avoid efforts that could duplicate existing networks built by private investment or those built leveraging and utilizing other federal programs, and directs the Secretary to coordinate with the FCC and NTIA to ensure wherever possible that broadband loans and grants are targeted to areas that are currently unserved. In particular, the conference agreement directs USDA to use the NTIA's assessment of the current state of broadband access nationwide. USDA is also directed, in implementing a strategy for broadband deployment to unserved communities, to explore using all technologies, including but not limited to, fiber, cable modem, fixed wireless, and television white space. "], "subsections": []}, {"section_title": "FY2020", "paragraphs": ["The Administration's FY2020 budget proposal requested the following for RUS broadband programs:", "Rural Broadband Access Loans\u2014Zero funding. According to the budget proposal, the elimination of funding will be offset by continued access by most eligible borrowers to the ReConnect Program (broadband pilot loan and grants). ReConnect Program\u2014$200 million, which, according to the budget proposal, will support approximately eight loans, grants, or loan/grant combinations in FY2020. Telecommunications Infrastructure Loans and Loan Guarantees\u2014$1.933 million in budget authority to subsidize a loan level of $690 million ($175.7 million for Treasury loans and $514.3 million for FFB loans). The subsidy is for the Treasury loans. According to the budget proposal, this funding level will provide for approximately 20 loans in FY2020. Community Connect Grants\u2014$30 million, which will support approximately 13 broadband grants in FY2020. Distance Learning and Telemedicine Grants\u2014$43.6 million, which will support approximately 90 projects in FY2020."], "subsections": []}]}, {"section_title": "Past Criticisms of RUS Broadband Programs", "paragraphs": ["RUS broadband programs have been awarding funds to entities serving rural communities since FY2001. Since their inception, a number of criticisms have emerged."], "subsections": [{"section_title": "Loan Approval and Application Process", "paragraphs": ["Perhaps the major criticism of the broadband loan program was that not enough loans are approved, thereby making it difficult for rural communities to take full advantage of the program. The loan application process has been criticized as being overly complex and burdensome, requiring applicants to spend months preparing costly market research and engineering assessments. Many applications are rejected because the applicant's business plan is deemed insufficient to support a commercially viable business. The biggest reason for applications being returned has been insufficient credit support, whereby applicants do not have sufficient cash-on-hand (one year's worth is required in most cases). The requirement for cash-on-hand is viewed as particularly onerous for small start-up companies, many of whom lack sufficient capital to qualify for the loan. Such companies, critics assert, may be those entities most in need of financial assistance.", "In report language to the FY2006 Department of Agriculture Appropriations Act ( P.L. 109-97 ), the Senate Appropriations Committee ( S.Rept. 109-92 ) directed the RUS \"to reduce the burdensome application process and make the program requirements more reasonable, particularly in regard to cash-on-hand requirements.\" The committee also directed USDA to hire more full-time employees to remedy delays in application processing times.", "At a May 17, 2006, hearing held by the Senate Committee on Agriculture, Nutrition, and Forestry, the Administrator of the RUS stated that RUS is working to make the program more user friendly, while at the same time protecting taxpayer investment:", "As good stewards of the taxpayers' money, we must make loans that are likely to be repaid. One of the challenges in determining whether a proposed project has a reasonable chance of success is validating the market analysis of the proposed service territory and ensuring that sufficient resources are available to cover operating expenses throughout the construction period until such a time that cash flow from operations become sufficient. The loan application process that we have developed ensures that the applicant addresses these areas and that appropriate resources are available for maintaining a viable operation.", "According to RUS, the loan program was initially overwhelmed by applications (particularly during a two-week period in August 2003), and as the program matured, application review times have dropped. On May 11, 2007, RUS released a Proposed Rule which sought to revise regulations for the broadband loan program. In the background material accompanying the Proposed Rule, RUS stated that the average application processing time in 2006 was almost half of what it was in 2003."], "subsections": []}, {"section_title": "Eligibility Criteria", "paragraphs": ["Since the inception of the broadband grant and loan programs, the criteria for applicant eligibility have been criticized both for being too broad and for being too narrow. An audit report released by USDA's Office of Inspector General (IG) found that the \"programs' focus has shifted away from those rural communities that would not, without Government assistance, have access to broadband technologies.\" Specifically the IG report found that the RUS definition of rural area has been \"too broad to distinguish usefully between suburban and rural communities,\" with the result that, as of March 10, 2005, $103.4 million in loans and grants (nearly 12% of total funding awarded) had been awarded to 64 communities located near large cities. The report cited examples of affluent suburban subdivisions qualifying as rural areas under the program guidelines and receiving broadband loans.", "On the other hand, eligibility requirements have also been criticized as too narrow. For example, the limitation of assistance only to communities of 20,000 or less in population excludes small rural towns that may exceed this limit, and also excludes many municipalities seeking to deploy their own networks. Similarly, per capita income requirements can preclude higher income communities with higher costs of living (e.g., rural Alaska), and the limitation of grant programs only to underserved areas excludes rural communities with existing but very limited broadband access."], "subsections": []}, {"section_title": "Loans to Communities With Existing Providers", "paragraphs": ["The IG report found that RUS too often has given loans to communities with existing broadband service. The IG report found that \"RUS has not ensured that communities without broadband service receive first priority for loans,\" and that although RUS has a system in place to prioritize loans to unserved communities, the system \"lacks a cutoff date and functions as a rolling selection process\u2014priorities are decided based on the applicants who happen to be in the pool at any given moment.\" The result is that a significant number of communities with some level of preexisting broadband service have received loans. According to the IG report, of 11 loans awarded in 2004, 66% of the associated communities served by those loans had existing service. According to RUS, 31% of communities served by all loans (during the period 2003 through early 2005) had preexisting competitive service (not including loans used to upgrade or expand existing service). In some cases, according to the IG report, \"loans were issued to companies in highly competitive business environments where multiple providers competed for relatively few customers.\" At the May 1, 2007, hearing before the House Subcommittee on Specialty Crops, Rural Development, and Foreign Agriculture, then-RUS Administrator James Andrews testified that of the 69 broadband loans awarded since the program's inception, 40% of the communities approved for funding were unserved at the time of loan approval, and an additional 15% had only one broadband provider.", "Awarding loans to entities in communities with preexisting competitive service raised criticism from competitors who already offer broadband to those communities. According to the National Cable and Telecommunications Association (NCTA), \"RUS loans are being used to unfairly subsidize second and third broadband providers in communities where private risk capital already has been invested to provide broadband service.\" Critics argued that providing loans in areas with preexisting competitive broadband service creates an uneven playing field and discourages further private investment in rural broadband. In response, RUS stated in the IG report that its policies are in accordance with the statute, and that they address \"the need for competition to increase the quality of services and reduce the cost of those services to the consumer.\" RUS argued that the presence of a competitor does not necessarily mean that an area is adequately served, and additionally, that in order for some borrowers to maintain a viable business in an unserved area, it may be necessary for that company to also be serving more densely populated rural areas where some level of competition already exists."], "subsections": []}, {"section_title": "Follow-Up Audit by USDA Office of Inspector General", "paragraphs": ["In 2008, as directed by the House Appropriations Committee ( H.Rept. 110-258 , FY2008 Agriculture appropriations bill), the IG reexamined the RUS broadband loan and loan guarantee program to determine whether RUS had taken sufficient corrective actions in response to the issues raised in the 2005 IG report. The IG concluded \"the key problems identified in our 2005 report\u2014loans being issued to suburban and exurban communities and loans being issued where other providers already provide access\u2014have not been resolved.\" ", "Specifically, the follow-up IG report found that between 2005 and 2008, RUS broadband borrowers providing services in 148 communities were within 30 miles of cities with 200,000 inhabitants, including communities near very large urban areas such as Chicago and Las Vegas.", "The IG report also found that since 2005 \"RUS has continued providing loans to providers in markets where there is already competing service.\" Of the 37 applications approved since September 2005, 34 loans were granted to applicants in areas where one or more private broadband providers already offered service. These 34 borrowers received $873 million to service 1,448 communities. The IG report found that since 2005, 77% of communities which were expected to receive service from a project financed by an approved RUS broadband loan had at least one existing broadband provider present, 59% had two or more existing providers, and 27% had three or more existing providers.", "In an official response to the follow-up IG report, RUS fundamentally disagreed with the IG criticisms, stating that the loans awarded between 2005 and 2008 were provided \"in a way entirely consistent with the statutory requirements of the underlying legislation governing administration of the program, the regulations and guidance issued by the Department to implement the statute, and the intent of Congress.\" Specifically, RUS argued that its May 11, 2007, Proposed Rule, and the subsequent changes to the broadband loan and loan guarantee statute made by the 2008 farm bill, both addressed concerns over loans to nonrural areas and to communities with preexisting broadband providers. However, the Final Rule based on the Proposed Rule and the 2008 farm bill had not yet been released and implemented during the 2005-2008 period examined by the IG, and RUS was compelled by law to continue awarding broadband loans under the existing law and rules. ", "During 2009 and 2010, the Rural Broadband Access Loan and Loan Guarantee program was in hiatus while RUS implemented the Broadband Initiatives Program (Recovery Act grants and loans) and developed new regulations implementing the 2008 farm bill. On March 14, 2011, the new rules were released. According to then-RUS Administrator Jonathan Adelstein, \"this regulation and other measures taken by the agency have addressed all the concerns raised by the OIG,\" and on March 24, 2011, \"the OIG notified RUS that it has closed its audits of the RUS broadband loan program.\""], "subsections": []}, {"section_title": "2014 GAO Report", "paragraphs": ["In May 2014, GAO released its report, USDA Should Evaluate the Performance of the Rural Broadband Loan Program . In the report, GAO analyzed rural broadband loans awarded between the years 2003 and 2013. GAO found that of the 100 loans awarded (worth $2 billion), 43% were no longer active due to 25 loans rescinded and 18 defaulted (RUS rejected 149 of the 249 applications received); that RUS loans can help promote limited broadband deployment and economic development, but performance goals do not fully align with the program's purpose; and that FCC reforms of the Universal Service Fund and intercarrier compensation have created temporary uncertainty that may be hindering investment in broadband.", "To address its findings, GAO made two recommendations to the Secretary of Agriculture: evaluate loans made by RUS through the broadband loan program to identify characteristics of loans that may be at risk of rescission or default; and align performance goals under the \"enhance rural prosperity\" strategic objective in the Annual Performance Report to the broadband loan program's purpose, to the extent feasible."], "subsections": []}]}, {"section_title": "Broadband Loan Reauthorization in the Farm Bill", "paragraphs": ["The Rural Broadband Access Loan and Loan Guarantee program is authorized by Section 601 of the Rural Electrification Act of 1936. Since the program was established in the 2002 farm bill, it has been subsequently reauthorized and modified by the 2008 and 2014 farm bills. The 2018 farm bill seeks to again reauthorize and modify the program, as well as addressing other RUS broadband programs and issues."], "subsections": [{"section_title": "2008 Farm Bill", "paragraphs": ["The 110 th Congress considered reauthorization of the Rural Broadband Access Loan and Loan Guarantee program as part of the 2008 farm bill. The following are some key issues which were considered during the debate over reauthorization of the RUS broadband loan and loan guarantee program."], "subsections": [{"section_title": "Restricting Applicant Eligibility", "paragraphs": ["The RUS broadband program was criticized for excluding too many applicants due to stringent financial requirements (e.g., the requirement that an applicant have a year's worth of cash-on-hand) and an application process\u2014requiring detailed business plans and market surveys\u2014that some viewed as overly expensive and burdensome to complete. During the reauthorization process, Congress considered whether the criteria for loan eligibility should be modified, and whether a more appropriate balance could be found between the need to make the program more accessible to unserved and often lower-income rural areas, and the need to protect taxpayers against bad loans."], "subsections": []}, {"section_title": "Definition of \"Rural Community\"", "paragraphs": ["The definition of which communities qualify as \"rural\" had been changed twice by statute since the broadband loan program was initiated. Under the pilot program, funds were authorized under the Distance Learning and Telemedicine Program, which defines \"exceptionally rural areas\" (under 5,000 inhabitants), \"rural areas\" (between 5,000 and 10,000), and \"mid-rural areas\" (between 10,000 and 20,000). RUS determined that communities of 20,000 or less would be eligible for broadband loans in cases where broadband services did not already exist.", "In 2002, this definition was made narrower by the Farm Security and Rural Investment Act ( P.L. 107-171 ), which designated eligible communities as any incorporated or unincorporated place with fewer than 20,000 inhabitants, and which was outside any standard metropolitan statistical area (MSA). The requirement that communities not be located within MSA's effectively prohibited suburban communities from receiving broadband loans. However, in 2004, the definition was again changed by the FY2004 Consolidated Appropriations Act ( P.L. 108-199 ). The act broadened the definition, keeping the population limit at 20,000, but eliminating the MSA prohibition, thereby permitting rural communities near large cities to receive loans. Thus the current definition used for rural communities is the same as what was used for the broadband pilot program, except that loans can now be issued to communities with preexisting service.", "The definition of what constitutes a \"rural\" community is always a difficult issue for congressional policymakers in determining how to target rural communities for broadband assistance. On the one hand, the narrower the definition the greater the possibility that deserving communities may be excluded. On the other hand, the broader the definition used, the greater the possibility that communities not traditionally considered \"rural\" or \"underserved\" may be eligible for financial assistance.", "A related issue is the scope of coverage proposed by individual applications. While many of the loan applications propose broadband projects offering service to multiple rural communities, RUS identified a trend toward larger regional and national proposals, covering hundreds or even more than 1,000 communities. The larger the scope of coverage, the greater the complexity of the loan application and the larger the possible benefits and risks to taxpayers."], "subsections": []}, {"section_title": "Preexisting Broadband Service", "paragraphs": ["Loans to areas with competitive preexisting service\u2014that is, areas where existing companies already provide some level of broadband\u2014sparked controversy because loan recipients are likely to compete with other companies already providing broadband service.", "During reauthorization, Congress was asked to more sharply define whether and/or how loans should be given to companies serving rural areas with preexisting competitive service. On the one hand, some argued that the federal government should not be subsidizing competitors for broadband service, particularly in sparsely populated rural markets which may be able only to support one provider. Furthermore, keeping communities with preexisting broadband service eligible may divert assistance from unserved areas that are most in need. On the other hand, many suburban and urban areas currently receive the benefits of competition between broadband providers\u2014competition which can potentially drive down prices while improving service and performance. It is therefore appropriate, others argued, that rural areas also receive the benefits of competition, which in some areas may not be possible without federal financial assistance. It was also argued that it may not be economically feasible for borrowers to serve sparsely populated unserved communities unless they are permitted to also serve more lucrative areas which may already have existing providers."], "subsections": []}, {"section_title": "Technological Neutrality", "paragraphs": ["The 2002 farm bill ( P.L. 107-171 ) directed RUS to use criteria that are \"technologically neutral\" in determining which projects to approve for loans. In other words, RUS is prohibited from typically valuing one broadband technology over another when assessing loan applications. As of November 10, 2008, 37% of approved and funded projects employed fiber-to-the-home technology, 17% employed DSL, 25% fixed wireless, 19% hybrid fiber-coaxial (cable), and 2% broadband over powerlines (BPL). No funding has been provided for projects utilizing satellite broadband.", "While decisions on funded projects were required to be technologically neutral, RUS (through the Secretary of Agriculture) had the latitude to determine minimum required data transmission rates for broadband projects eligible for funding. According to the statute, \"the Secretary shall, from time to time as advances in technology warrant, review and recommend modifications of rate-of-data transmission criteria for purposes of the identification of broadband service technologies.\" ", "Some argued that the minimum speed thresholds should be raised to ensure that rural areas receive \"next-generation\" broadband technologies with faster data rates capable of more varied and sophisticated applications. On the other hand, significantly raising minimum data rates could exclude certain technologies\u2014for example, typical data transmission rates for fiber and some wireless technologies exceed what is offered by \"current generation\" technologies such as DSL and cable. Proponents of keeping the minimum threshold at a low level argued that underserved rural areas are best served by any broadband technology that is economically feasible to deploy, regardless of whether it is \"next\" or \"current\" generation."], "subsections": []}, {"section_title": "P.L. 110-246", "paragraphs": ["The Food, Conservation, and Energy Act of 2008 became law on June 18, 2008 ( P.L. 110-246 ). Section 6110, \"Access to Broadband Telecommunications Services in Rural Areas,\" reauthorized the RUS broadband loan and loan guarantee program and addressed many of the criticisms and issues raised during the reauthorization process. The following summarizes broadband-related provisions that changed previous law."], "subsections": [{"section_title": "Eligibility and Selection Criteria", "paragraphs": ["Defines rural area as any area other than (1) a city or town that has a population of greater than 20,000 and (2) an urbanized area contiguous and adjacent to a city or town with a population greater than 50,000. The Secretary may, by regulation only, consider not to be rural an area that consists of any collection of census blocks contiguous to each other with a housing density of more than 200 housing units per square mile and that is contiguous with or adjacent to an existing boundary of a rural area. Provides that the highest priority is to be given to applicants that offer to provide broadband service to the greatest proportion of households currently without broadband service. Eligible entities are required to submit a proposal to the Secretary that meets the requirements for a project to offer to provide service to a rural area and agree to complete build out of the broadband service within three years. Prohibits any eligible entity that provides telecommunications or broadband service to at least 20% of the households in the United States from receiving an amount of funds under this section for a fiscal year in excess of 15% of the funds authorized and appropriated for the broadband loan program. Directs the Secretary of Agriculture \"from time to time as advances in technology warrant,\" to review and recommend modifications in rate-of-data-transmission criteria for the purpose of identifying eligible broadband service technologies. At the same time, the Secretary is prohibited from establishing requirements for bandwidth or speed that have the effect of precluding the use of evolving technologies appropriate for use in rural areas."], "subsections": []}, {"section_title": "Loans to Communities With Existing Providers", "paragraphs": ["Prohibits the Secretary from making a loan in any area where there are three or more incumbent service providers unless the loan meets all of the following requirements: (1) the loan is to an incumbent service provider that is upgrading service in that provider's existing territory; (2) the loan proposes to serve an area where not less than 25% of the households are offered service by not more than 1 provider; and (3) the applicant is not eligible for funding under another provision of the Rural Electrification Act. Incumbent service provider is defined as an entity providing broadband service to not less than 5% of the households in the service territory proposed in the application. Also prohibits the Secretary from making a loan in any area where not less than 25% of the households are offered broadband service by not more than one provider unless a prior loan has been made in the same area."], "subsections": []}, {"section_title": "Financial Requirements", "paragraphs": ["Directs the Secretary to consider existing recurring revenues at the time of application in determining an adequate level of credit support. Requires the Secretary to ensure that the type, amount, and method of security used to secure a loan or loan guarantee is commensurate to the risk involved with the loan or loan guarantee, particularly when the loan or loan guarantee is issued to a financially healthy, strong, and stable entity. The Secretary is also required, in determining the amount and method of security, to consider reducing the security in areas that do not have broadband service. Allows the Secretary to require an entity to provide a cost-share in an amount not to exceed 10% of the amount of the loan or loan guarantee. Retains the current law rate of interest for direct loans\u2014which is the rate equivalent to the cost of borrowing to the Department of the Treasury for obligations of comparable maturity or 4%. Directs that loan or loan guarantee may have a term not to exceed 35 years if the Secretary determines that the loan security is sufficient. In case of substantially underserved trust areas (for example, Indian lands), where the Secretary determines a high need exists for the benefits of the program, the Secretary has the authority to provide loans with interest rates as low as 2% and may waive nonduplication restrictions, matching fund requirements, credit support requirements, or other regulations."], "subsections": []}, {"section_title": "Loan Application Requirements", "paragraphs": ["Allows the Secretary to require an entity that proposes to have a subscriber projection of more than 20% of the broadband service market in a rural area to submit a market survey. However, the Secretary is prohibited from requiring a market survey from an entity that projects to have less than 20% of the broadband market. Requires public notice of each application submitted, including the identity of the applicant, the proposed area to be served, and the estimated number of households in the application without terrestrial-based broadband. Authorizes the Secretary to take steps to reduce the costs and paperwork associated with applying for a loan or loan guarantee under this section by first-time applicants, particularly those who are smaller and start-up internet providers. Allows the Secretary to establish a preapplication process under which a prospective applicant may seek a determination of area eligibility. Provides that an application, or a petition for reconsideration of a decision on such an application, that was pending on the date 45 days before enactment of this act and that remains pending on the date of enactment of this act is to be considered under eligibility and feasibility criteria in effect on the original date of submission of the application."], "subsections": []}, {"section_title": "Other Provisions", "paragraphs": ["Authorizes the Rural Broadband Access Loan and Loan Guarantee program at $25 million to be appropriated for each of fiscal years 2008 through 2012. Requires that the Secretary annually report to Congress on the rural broadband loan and loan guarantee program. The annual report is to include information pertaining to the loans made, communities served and proposed to be served, speed of broadband service offered, types of services offered by the applicants and recipients, length of time to approve applications submitted, and outreach efforts undertaken by USDA. Section 6111 provides for a National Center for Rural Telecommunications Assessment. The center is to assess the effectiveness of broadband loan programs, work with existing rural development centers to identify appropriate policy initiatives, and provide an annual report that describes the activities of the center, the results of research carried out by the center, and any additional information that the Secretary may request. An appropriation of $1 million is authorized for each of the fiscal years 2008 through 2012. Section 6112 directs the Chairman of the Federal Communications Commission (FCC), in coordination with the Secretary, to submit to Congress a report describing a comprehensive rural broadband strategy. Requires the report to be updated during the third year after enactment."], "subsections": []}]}, {"section_title": "Implementation of P.L. 110-246", "paragraphs": ["During 2009 and 2010, the Farm Bill Broadband Loan Program was on hiatus as RUS implemented the Broadband Initiatives Program (BIP) established under the American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ). At the same time, final regulations implementing the broadband loan program as reauthorized by the 2008 farm bill were on hold and were being refined to reflect, in part, RUS experience in implementing BIP. Subsequently, on March 14, 2011, an Interim Rule and Notice was published in the Federal Register setting forth the rules and regulations for the broadband loan program as reauthorized by P.L. 110-246 . While the rule was immediately effective, RUS accepted public comment before ultimately releasing a final rule. ", "Meanwhile, pursuant to Section 6112 of P.L. 110-246 , the FCC released on May 22, 2009, its report on rural broadband strategy, entitled Bringing Broadband to Rural America . The report made a series of recommendations including improved coordination of rural broadband efforts among federal agencies, states, and communities; better assessment of broadband needs, including technological considerations and broadband mapping and data; and overcoming challenges to rural broadband deployment."], "subsections": []}]}, {"section_title": "2014 Farm Bill", "paragraphs": ["On January 27, 2014, the conference report for the Agricultural Act of 2014 was filed ( H.Rept. 113-333 ). The conference agreement was approved by the House on January 29, approved by the Senate on February 4, and signed into law ( P.L. 113-79 ) by the President on February 7, 2014.", "P.L. 113-79 amended Section 601 of the Rural Electrification Act of 1936 (7 U.S.C. 950bb) to reauthorize the Rural Broadband Access Loan and Loan Guarantee Program through FY2018. P.L. 113-79 also included provisions to redefine project area eligibility with respect to existing broadband service, increase the program's transparency and reporting requirements, define a minimum level of broadband service, require a study on the gathering and use of address-level data, and establish a new Rural Gigabit Network Pilot Program. The conference agreement did not include a Senate bill proposal ( S. 954 ) to create a new grant component to the existing broadband loan and loan guarantee program, nor did the conference agreement adopt the Senate bill's broadening of the definition for eligible rural areas.", "Specifically, Section 6104 of P.L. 113-79 made the following changes to the Rural Broadband Access Loan and Loan Guarantee program: ", "Project area eligibility\u2014provides that an eligible area is one where not less than 15% of the households in the proposed service territory are unserved or have service levels below the minimum acceptable level of broadband service (which is set at 4 Mbps/1 Mbps). Priority\u2014directs RUS to give the highest priority to applicants that offer to provide broadband service to the greatest proportion of unserved households or households that do not have residential broadband service that meets the minimum acceptable level of broadband service, as certified by the affected community, city, county, or designee; or demonstrated on the broadband map of the affected state if the map contains address-level data, or the National Broadband Map if address-level data are unavailable. RUS shall provide equal consideration to all qualified applicants, including those that have not previously received grants, loans, or loan guarantees. Also gives priority to applicants that offer to provide broadband service not predominantly for business service, but if at least 25% of customers in the proposed service territory are commercial interests. Evaluation period\u2014directs RUS to establish not less than two evaluation periods for each fiscal year to compare loan and loan guarantee applications and to prioritize loans and loan guarantees to all or part of rural communities that do not have residential broadband service that meets the minimum acceptable level of broadband service. Market survey requirement\u2014provides that survey information must be certified by the affected community, city, county, or designee; and demonstrated on the broadband map of the affected state if the map contains address-level data, or the National Broadband Map if address-level data are unavailable. Notice requirement\u2014directs RUS to maintain a fully searchable database on the internet that contains a list of each entity that has applied for assistance, the status of each application, and a detailed description of each application. For each entity receiving assistance, the database shall provide the name of the entity, the type of assistance being received, the purpose for which the entity is receiving the assistance, and each semiannual report submitted. Reporting\u2014requires semiannual reports from loan recipients for three years after completion of the project describing in detail the use of the assistance, and the progress toward fulfilling project objectives. Default and deobligation\u2014directs RUS to establish written procedures for recovering funds from loan defaults, deobligating awards that demonstrate an insufficient level of performance or fraudulent spending, awarding those funds to new or existing applicants, and minimizing overlap among programs. Service area assessment\u2014directs RUS to promptly post on its website a list of the census block groups that an applicant proposes to service. RUS will provide not less than 15 days for broadband service providers to voluntarily submit information about the broadband services that the providers offer in the groups or tracts listed so that RUS may assess whether the applications submitted meet the eligibility requirements. If no broadband service provider submits this information, RUS will consider the number of providers in the group or tract to be established by reference to the most current National Broadband Map or any other data RUS may collect or obtain through reasonable efforts. Definition of broadband service\u2014establishes \"the minimum acceptable level of broadband service\" as at least 4 Mbps downstream and 1 Mbps upstream. At least once every two years, the Secretary shall review and may adjust this speed definition and may consider establishing different minimum speeds for fixed and mobile (wireless) broadband. Terms and conditions\u2014in determining the terms and conditions of assistance, the Secretary may consider whether the recipient would be serving an area that is unserved (or has service levels below the minimum acceptable level of broadband service), and if so, can establish a limited initial deferral period or comparable terms necessary to achieve the financial feasibility and long-term sustainability of the project. Report to Congress\u2014adds requirements to the content of the annual report to Congress, including the number of residences and businesses receiving new broadband services; network improvements, including facility upgrades and equipment purchases; average broadband speeds and prices on a local and statewide basis; any changes in broadband adoption rates; and any specific activities that increase high-speed broadband access for educational institutions, health care providers, and public safety service providers. Reauthorization\u2014reauthorizes the broadband loan and loan guarantee program through FY2018 at the current level of $25 million per year. Study on providing effective data for the National Broadband Map\u2014directs USDA, in consultation with DOC and the FCC, to conduct a study of the ways data collected by RUS could most effectively be shared with the FCC to support the development and maintenance of the National Broadband Map. The study shall include a consideration of the circumstances under which address-level data could be collected by RUS and appropriately shared with the FCC. ", "In addition, Section 6105 authorized a new Rural Gigabit Network Pilot Program. Specifically, USDA was authorized to provide grants, loans, or loan guarantees for projects that would extend ultra-high-speed broadband service (defined as 1 gigabit per second downstream capacity) to rural areas where ultra-high-speed service is not provided in any part of the proposed service territory. The pilot program was authorized at $10 million per year for the years FY2014 through FY2018. However, no funding was appropriated for this pilot program over that period, and the Rural Gigabit Network Pilot Program was not implemented."], "subsections": [{"section_title": "Implementation of P.L. 113-79", "paragraphs": ["On July 30, 2015, the RUS published in the Federal Register the interim rule (7 C.F.R. part 1738) implementing the Rural Broadband Access Loan and Loan Guarantee Program as reauthorized by the February 7, 2014, enactment of the Agricultural Act of 2014 ( P.L. 113-79 ). Publication of the interim rule allowed the program to go forward, initially with two application periods per year. The interim rule was made final on June 9, 2016."], "subsections": []}]}, {"section_title": "2018 Farm Bill", "paragraphs": ["With the 2014 farm bill expiring on September 30, 2018, the 115 th Congress considered reauthorization of the RUS broadband loan and loan guarantee program and other broadband-related provisions in the 2018 farm bill."], "subsections": [{"section_title": "House", "paragraphs": ["On April 12, 2018, H.R. 2 , the Agriculture and Nutrition Act of 2018, was introduced by Representative Conaway. Subtitle B of Title VI (\"Connecting Rural Americans to High Speed Broadband\") would reauthorize the Rural Broadband Access Loan and Loan Guarantee Program and make a number of changes to the RUS rural broadband programs. On April 18, 2018, the House Agriculture Committee approved H.R. 2 ( H.Rept. 115-661 ) with amendments. On June 21, 2018, the House passed H.R. 2 . "], "subsections": []}, {"section_title": "Senate", "paragraphs": ["On June 11, 2018, the 2018 Senate farm bill, S. 3042 , was introduced by Senator Roberts. The Agriculture Improvement Act of 2018 was approved on June 13, 2018, by the Committee on Agriculture, Nutrition, and Forestry and ordered to be reported with an amendment in the nature of a substitute favorably. On June 28, 2018, the Senate passed its version of H.R. 2 . "], "subsections": []}, {"section_title": "Key Differences Between House and Senate Bills", "paragraphs": ["The following are some key differences between the House and Senate bills with respect to the rural broadband loan and loan guarantee program."], "subsections": [{"section_title": "Eligible Projects", "paragraphs": ["Under current law, projects eligible for rural broadband loans and loan guarantees can only (with some exceptions) serve areas in which 15% or more of households are unserved or have service levels below the minimum acceptable level of broadband service. Additionally, under current law, an eligible service area can have no more than two incumbent broadband service providers. The House bill does not change the current service area eligibility threshold for rural broadband loans and loan guarantees. ", "On the other hand, the Senate bill would require that rural broadband loans, loan guarantees, and grants can only serve areas in which 90% or more of households are unserved or have service levels below the minimum acceptable level of broadband service. The Senate bill also provides that an eligible service area can have no more than one incumbent broadband service provider. "], "subsections": []}, {"section_title": "Grant Authority", "paragraphs": ["Both the House and Senate bills add a grant component to the current farm bill broadband loan and loan guarantee program. In the House bill, grants are only available in combination with associated loans under the rural broadband, electric infrastructure, and telecommunications infrastructure loan and loan guarantee programs. Additionally, project areas must serve hard-to-reach communities\u2014specifically areas with a density of less than 12 service points per road mile and where no incumbent provider delivers fixed terrestrial broadband service at or above the minimum broadband speed. The maximum federal share of a total project cost varies by the density of the project service area, ranging from a 25% to 75% federal share.", "In the Senate bill, grants are subject to the same service area eligibility criteria as broadband loans and loan guarantees (no less than 90% unserved, no more than one incumbent). The maximum federal share for a grant is 50%, although USDA can adjust the federal share up to 75% if the Secretary determines that the project would serve particularly remote, unserved, and low-income areas. "], "subsections": []}, {"section_title": "Definition of Minimum Broadband Service", "paragraphs": ["Both the House and Senate bills set the minimum broadband service speed at 25 Mbps (download)/3 Mbps (upload), to be reviewed by the Secretary at least once every two years. Additionally, the House bill requires USDA to establish projections of minimum acceptable standards of broadband service for 5, 10, 15, 20, and 30 years into the future. Unless cost prohibitive, projects eligible for a rural broadband loan or loan guarantee must provide broadband service at the minimum level, and must be determined capable of meeting future minimum speed standards over the life of the loan or loan guarantee. "], "subsections": []}, {"section_title": "Middle Mile Projects", "paragraphs": ["The House bill authorizes RUS to make rural broadband loans or loan guarantees to middle mile infrastructure projects, which are defined as any broadband infrastructure that does not connect directly to end user locations (including anchor institutions) and may include interoffice transport, backhaul, internet connectivity, data centers, or special access transport to rural areas. The Senate bill does not contain a middle mile infrastructure provision."], "subsections": []}, {"section_title": "Reauthorization Levels", "paragraphs": ["For rural broadband loans and loan guarantees, the House bill sets an authorization level of $150 million for each of fiscal years 2019 through 2023. Additionally, the House bill provides $350 million for each of fiscal years 2019 to 2023 for grants to be available in combination with associated loans and loan guarantees. ", "The Senate bill sets an authorization level for broadband loans, loan guarantees, and grants of $150 million for each of fiscal years 2019 through 2023."], "subsections": []}]}, {"section_title": "P.L. 115-334", "paragraphs": ["On December 10, 2018, the conference report ( H.Rept. 115-1072 ) accompanying H.R. 2 , the Agriculture Improvement Act of 2018, was filed. The conference report was agreed to in the House and Senate on December 11 and December 12 respectively. On December 20, 2018, the President signed the bill ( P.L. 115-334 ).", "The following summarizes the major provisions relevant to RUS broadband programs."], "subsections": [{"section_title": "Section 6201. Rural Broadband Access Grant, Loan, and Loan Guarantee Program", "paragraphs": ["Adds a grant component to the existing program, which is now authorized to provide grants, loans, loan guarantees, and loan/grant combinations.", "Priority \u2014directs the Secretary to give the highest priority to applications proposing to serve rural communities that do not have any residential broadband service of at least 10 Mbps/1 Mbps. Also receiving high priority are projects that provide the maximum level of broadband service to the greatest proportion of rural households in the proposed service area. Additional priority factors include rural communities with a high percentage of low-income residents, with populations under 10,000, that are experiencing outmigration, that are isolated from other population centers, or that propose to provide broadband for use in various applications of precision agriculture. Projects will also receive priority if they are developed or funded by two or more stakeholders (for example, public-private partnerships). Grant Eligibility and Cost-Sharing \u2014projects eligible for grants (including grant/loan combinations) must be carried out in a proposed service territory in which not less than 90% of the households are unserved. Grants shall not exceed 75% of the total project cost to an area with a density fewer than 7 people per square mile, 50% to an area with a density of 7 to 12 people per square mile, and 25% to an area with a density of 12 to 20 people per square mile. However, the Secretary has the authority to adjust the federal share of a grant up to 75% for an area of rural households without any 10 Mbps/1 Mbps broadband service, or rural communities that are under 10,000 in population, with a high percentage of low-income residents, experiencing outmigration, that are isolated from other population centers, or that are proposing broadband deployment for precision agriculture applications. Additionally, the Secretary may make modifications of the density thresholds to ensure that funds are best utilized to provide broadband service in communities that are the most rural in character. Loan Eligibility \u2014for broadband loans or loan guarantees, eligible proposed service areas must have not less than 50% of households unserved or below the minimum acceptable level (set at 25 Mbps/3 Mbps) of fixed broadband service, whether terrestrial or wireless. P.L. 115-334 raises the previous eligibility threshold from 15% to 50%. Left unchanged is the eligibility requirement that broadband service cannot be provided in any part of the proposed service territory by three or more incumbent service providers. Broadband Buildout Requirements \u2014allows five years for applicants to complete the buildout of a project (up from three years). Requires the Secretary to set a current minimum acceptable standard of broadband service of 25 Mbps/3 Mbps, and to establish projections of minimum acceptable standards of broadband service of a project for 5 to 10 years, 11 to 15 years, 16 to 20 years, and more than 20 years into the future. The Secretary shall review and may adjust those minimum levels at least once every two years. Projects eligible for a rural broadband loan or loan guarantee must provide broadband service at the minimum level, and must be determined capable of meeting future minimum speed standards over the life of the loan or loan guarantee. However, if an applicant shows that it would be cost prohibitive to meet the minimum acceptable level of broadband service for the entirety of a proposed service territory due to its unique characteristics, the Secretary and the applicant may agree to utilize substitute standards for any unserved portion of the project. Technical Assistance and Training \u2014the Secretary may provide to eligible applicants technical assistance and training to prepare applications, including required reports and surveys, and to improve financial management relating to the proposed project. Only applicants proposing to serve communities without residential broadband service of at least 10 Mbps/1 Mbps are eligible for technical assistance and training. Not less than 3% and not more than 5% of the annual appropriation for the broadband grant, loan, and loan guarantee program shall be used for technical assistance and training. Guaranteed Loan Fees \u2014requires the Secretary to charge lenders of guaranteed loans a fee to offset subsidy costs. Fees shall be in such amounts as to bring down the cost of subsidies for guaranteed loans, but that do not act as a bar to participation in the program. Payment Assistance for Certain Loan and Grant Recipients \u2014allows the Secretary to award grant funding\u2014subject to agreed project milestones, objectives, and other considerations\u2014that would allow a loan recipient to receive the benefit of a subsidized loan (with reduced interest rates) or a payment assistance loan. Authorization \u2014sets an authorization level of $350 million for each of fiscal years 2019 through 2023 (up from $25 million per year), and delays the termination of authority to make loans and loan guarantees until September 30, 2023. "], "subsections": []}, {"section_title": "Section 6202. Expansion of Middle Mile Infrastructure into Rural Areas", "paragraphs": ["Authorizes $10 million for each of fiscal years 2018 through 2023 for grants, loans, and loan guarantees toward middle mile infrastructure projects. Middle mile infrastructure connects underserved rural areas to the internet backbone; it does not connect directly to end-user locations. A project is eligible if at least 75% of the interconnection points serve eligible rural areas. A grant cannot exceed 20% of the total project cost. "], "subsections": []}, {"section_title": "Section 6203. Modifications to the Rural Gigabit Program", "paragraphs": ["Renames the Rural Gigabit Network Pilot Program (which was authorized in the 2014 farm bill but never funded through appropriations) as the Innovative Broadband Advancement Program, which is authorized to provide a grant, a loan, or both to an eligible entity to demonstrate innovative broadband technologies or methods of broadband deployment that significantly decrease the cost of deployment and provide substantially faster broadband speeds than are available in a rural area. The program is authorized at $10 million for each of fiscal years 2018 through 2023. "], "subsections": []}, {"section_title": "Section 6204. Community Connect Grant Program", "paragraphs": ["Codifies the existing Community Connect Grant Program and authorizes the program at $50 million for each of fiscal years 2018 through 2023. Defines an eligible service area as having broadband service capacity less than speeds of 10 Mbps download and 1 Mbps upload."], "subsections": []}, {"section_title": "Section 6205. Outdated Broadband Systems", "paragraphs": ["Requires the Secretary, beginning on October 1, 2020, to consider any portion of a service territory subject to an outstanding grant agreement as unserved for the purposes of broadband loan programs if broadband service is not provided at a minimum of 10 Mbps/1 Mbps, unless the broadband provider has begun or already constructed broadband facilities in that area which would meet the minimum acceptable broadband service standard."], "subsections": []}, {"section_title": "Section 6206. Default and Deobligation; Deferral", "paragraphs": ["Requires the Secretary to establish written procedures for all broadband programs to recover funds from loan and grant defaults, deobligate awards that demonstrate an insufficient level of performance or fraudulent spending, award those funds on a competitive basis to new or existing applicants, and minimize overlap among programs. The Secretary may establish a deferral period of not shorter than the buildout period established for the project in order to support the financial feasibility and long-term sustainability of the project."], "subsections": []}, {"section_title": "Section 6207. Public Notice, Assessments, and Reporting Requirements", "paragraphs": ["Public Notice \u2014requires the Secretary to make available to the public a fully searchable database on the RUS website that contains information on all broadband projects provided assistance or for which assistance is sought. Service Area Assessment \u2014after giving public notice for a particular project seeking assistance, the Secretary shall provide 45 days for providers to voluntarily submit information indicating their presence in a proposed service area. If no existing provider submits such information, the Secretary may collect or obtain through reasonable efforts any other data on existing providers. In the case of applications requesting funding for unserved rural areas, the Secretary shall confirm unserved rural areas by conferring with the FCC and NTIA, reviewing any other source relevant to service data validation, and performing site-specific testing to verify the unavailability of any retail broadband service. Reporting \u2014the Secretary shall require entities receiving assistance to provide an annual report for three years after completion of the project that describes the use by the entity of the assistance and the progress toward fulfilling the objectives of the project. Middle mile project recipients are required to submit a semiannual report for five years after project completion. The recipient of assistance shall also provide complete, reliable, and precise geolocation information that indicates the location of new broadband service that is being provided. The Secretary is also required to submit an annual report to Congress that describes the extent of participation in the RUS broadband assistance programs for the preceding fiscal year."], "subsections": []}, {"section_title": "Section 6208. Environmental Reviews", "paragraphs": ["The Secretary may obligate, but not disperse, funds before the completion of otherwise required environmental, historical, or other types of reviews if the Secretary determines that a subsequent site-specific review shall be adequate and easily accomplished for the location of towers, poles, or other broadband facilities in the service area of the borrower without compromising the project or the required reviews."], "subsections": []}, {"section_title": "Section 6209. Use of Loan Proceeds to Refinance Loans for Deployment of Broadband Service", "paragraphs": ["The proceeds of any loan or loan guarantee may be used by the recipient for the purpose of refinancing an outstanding obligation on another telecommunications loan."], "subsections": []}, {"section_title": "Section 6210. Smart Utility Authority for Broadband", "paragraphs": ["Allows a recipient of grants, loans, or loan guarantees provided by the Office of Rural Development to use not more than 10% of the amount for rural broadband infrastructure projects, including both retail and nonretail activities, except for a recipient who is seeking to provide retail broadband service in any area where such service is available at the minimum broadband speeds. Additionally allows a recipient of electric grants, loans, or loan guarantees to set aside not more than 10% of the amount for retail broadband service, for use only in an area that is not being provided with the minimum acceptable level of broadband service. The funding cannot result in competitive harm to any existing grant, loan, or loan guarantee under the Rural Electrification Act of 1936."], "subsections": []}, {"section_title": "Section 6211. Refinancing of Telephone Loans", "paragraphs": ["Clarifies that the Secretary, through the RUS telephone loan program, may refinance loans of persons furnishing telephone service in rural areas, including indebtedness of recipients on another telecommunications loan made under the Rural Electrification Act. Also strikes the current law limitation that the refinancing may not constitute more than 40% of the loan."], "subsections": []}, {"section_title": "Section 6212. Federal Broadband Coordination", "paragraphs": ["Consultation between USDA and NTIA \u2014USDA shall consult with NTIA to assist in the verification of eligibility for USDA broadband programs. To this end, NTIA shall make available its broadband assessment and mapping capabilities. Consultation between USDA and FCC \u2014USDA shall consult with the FCC before providing broadband assistance for a project to serve an area with respect to which another entity is receiving Connect America Fund or Mobility Fund support. The FCC shall consult with USDA before offering Connect America Fund or Mobility Fund support to serve an area with respect to which another entity has received RUS broadband assistance. Report to Congress \u2014USDA, the FCC, and NTIA shall submit to Congress a report on how best to coordinate federally supported broadband programs and activities in order to achieve various objectives regarding long-term broadband service needs of rural residents."], "subsections": []}, {"section_title": "Section 6213. Transition Rule", "paragraphs": ["Provides that for one year after enactment, the Secretary shall use the previously existing rules and regulations for the broadband loan and Community Connect grant program until a final rule is issued."], "subsections": []}, {"section_title": "Section 6214. Rural Broadband Integration Working Group", "paragraphs": ["Establishes an interagency Rural Broadband Integration Working Group that shall consult with a wide spectrum of stakeholders to identify, assess, and determine possible actions relating to barriers and opportunities for broadband deployment in rural areas. Not later than 60 days after enactment, the Working Group shall publish a comprehensive survey of federal programs that currently support or could reasonably be modified to support broadband deployment and adoption; and all federal agency policies and rules with the direct or indirect effect of facilitating or regulating investment in, or deployment of, wired and wireless broadband networks. The Working Group will submit to the President a list of actions that federal agencies can take to support broadband deployment and adoption, including timelines to complete a list of priority actions and rulemakings."], "subsections": []}, {"section_title": "Other Broadband-Related Provisions", "paragraphs": ["Section 6101 sets aside 20% of DLT grant funding for applications related to substance use disorder treatment services; Section 6102 reauthorizes the DLT program through FY2023 at $82 million per year; Section 6418 requires the Secretary to collect fees on loan guarantees in amounts that when combined with any appropriated funds equal the subsidy on such guarantees. The Secretary shall charge and collect from the lender fees in such amounts as to bring down the costs of subsidies for the guaranteed loan, except that the fees shall not act as a bar to participation in the program nor be inconsistent with current practices in the marketplace; and Section 12511 establishes the Task Force for Reviewing the Connectivity and Technology Needs of Precision Agriculture in the United States. The Task Force will develop policy recommendations to promote deployment of broadband on unserved agricultural land, with a goal of achieving reliable capabilities on 95% of agricultural land in the United States by 2025."], "subsections": []}]}]}]}, {"section_title": "Other Legislation in the 115th Congress", "paragraphs": ["Aside from the 2018 farm bills and annual appropriations legislation, the following bills were introduced into the 115 th Congress seeking to impact the RUS broadband programs:", "H.R. 800 (Huffman), introduced on February 1, 2017, as the New Deal Rural Broadband Act of 2017, would establish an Office of Rural Broadband within USDA; authorize a \"Breaking Ground on Rural Broadband Program\" to make grants, loans, or loan guarantees to eligible entities for serving rural and underserved areas ($20 billion to remain available until September 30, 2022); establish a Tribal Broadband Assistance Program ($25 million for each of fiscal years 2017 through 2022); establish a broadband grant program to accompany the Rural Broadband Loan program; modify the Telecommunications Infrastructure Loan program by raising the threshold for an eligible rural area from 5,000 to 20,000 population and by permitting RUS to give preference to loan applications that support regional telecommunications development; and direct USDA to establish and maintain an inventory of any real property that is owned, leased, or otherwise managed by the federal government on which a broadband facility could be constructed, as determined by the Under Secretary for Rural Broadband Initiatives. Referred to the Committee on Agriculture, and in addition to the Committees on Natural Resources and Energy and Commerce. H.R. 1084 (Kelly of Illinois), introduced on February 15, 2017, as the Today's American Dream Act, would direct GAO to submit to Congress a report on the efficiency and effectiveness of efforts by federal agencies to expand access to broadband service, including the RUS telecommunications and broadband programs. Referred to the Committee on Ways and Means, and in addition to the Committees on Education and the Workforce, Agriculture, Financial Services, Small Business, Energy and Commerce, the Judiciary, and Oversight and Government Reform. H.R. 4232 (Pocan), introduced on November 2, 2017, as the Broadband Connections for Rural Opportunities Program (BCROP) Act, would amend Section 601 of the Rural Electrification Act of 1936 (7 U.S.C. 950bb) to establish a broadband grant program to accompany the Rural Broadband Loan program. Also would raise the broadband loan program authorization from $25 million to $50 million. Referred to the Committees on Energy and Commerce and on Agriculture. H.R. 4291 (Stefanik), introduced on November 7, 2017, as the Precision Farming Act, would utilize Rural Utilities Service loans and loan guarantees under the rural broadband access program to provide broadband service for agricultural producers, and would provide universal service support for installation charges for broadband service for agricultural producers in order to improve precision farming and ranching. Referred to the Committees on Energy and Commerce and on Agriculture. H.R. 4308 (Lujan Grisham), introduced on November 8, 2017, as the Rural Broadband Expansion Act, would authorize the Rural Utility Service's Community Connect broadband grant program at $100 million for each of fiscal years 2019 through 2023. Referred to the Committees on Agriculture and on Energy and Commerce. H.R. 5172 (O'Halleran), introduced on March 6, 2018, would assist Indian tribes in maintaining, expanding, and deploying broadband systems. Referred to the Committee on Agriculture, and in addition to the Committee on Energy and Commerce. H.R. 5213 (Hartzler), introduced on March 8, 2018, would prohibit the Rural Utilities Service from providing assistance for the provision of broadband service with a download speed of less than 25 megabits per second or an upload speed of less than 3 megabits per second, and clarify the broadband loan and loan guarantee authority provided in Section 601 of the Rural Electrification Act of 1936. Referred to the Committee on Agriculture, and in addition to the Committee on Energy and Commerce. H.R. 6073 (Cramer), introduced on June 12, 2018, as the RURAL Broadband Act of 2018, would prohibit USDA from providing broadband loans or grants for projects that overbuild or otherwise duplicate broadband networks operated by another provider that have received universal service support from the FCC or previous broadband assistance from RUS. Referred to the Committee on Agriculture, and in addition to the Committee on Energy and Commerce. S. 1676 (Gillibrand), introduced on July 31, 2017, as the Broadband Connections for Rural Opportunities Program (BCROP) Act, would amend Section 601 of the Rural Electrification Act of 1936 (7 U.S.C. 950bb) to establish a broadband grant program to accompany the Rural Broadband Loan program. Also would raise the broadband loan program authorization from $25 million to $50 million. Referred to the Committee on Agriculture, Nutrition, and Forestry. S. 2654 (Smith), introduced on April 12, 2018, as the Community Connect Grant Program Act of 2018, would amend the Rural Electrification Act of 1936 to authorize the Community Connect Grant Program at an annual level of $50 million per year. Defines \"eligible broadband service\" as operating at or above the applicable minimum download and upload speeds established by the FCC in defining the term \"advanced telecommunications capability.\" Referred to Committee on Agriculture, Nutrition, and Forestry. S. 2970 (Daines), introduced on May 24, 2018, as the RURAL Broadband Act of 2018, would prohibit USDA from providing broadband loans or grants for projects that overbuild or otherwise duplicate broadband networks operated by another provider that have received universal service support from the FCC or previous broadband assistance from RUS. Referred to the Committee on Agriculture, Nutrition, and Forestry. S. 3080 (Murkowski), introduced on June 18, 2018, as the Food Security, Housing, and Sanitation Improvements in Rural, Remote, and Frontier Areas Act of 2018, would amend the Rural Electrification Act of 1936 to include a satellite project or technology within the definition of broadband service. Referred to the Committee on Agriculture, Nutrition, and Forestry. S. 3360 (Wyden), introduced August 21, 2018, as the Broadband Internet for Small Ports Act, would establish priority for small harbors to receive RUS broadband funding. Referred to the Committee on Agriculture, Nutrition, and Forestry."], "subsections": [{"section_title": "Appendix. Rural Development Telecom Awards", "paragraphs": [], "subsections": []}]}]}}
{"id": "R45461", "title": "BUILD Act: Frequently Asked Questions About the New U.S. International Development Finance Corporation", "released_date": "2019-01-15T00:00:00", "summary": ["Members of Congress and Administrations have periodically considered reorganizing the federal government's trade and development functions to advance various U.S. policy objectives. The Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act), which was signed into law on October 5, 2018 (P.L. 115-254), represents a potentially major overhaul of U.S. development finance efforts. It establishes a new agency\u2014the U.S. International Development Finance Corporation (IDFC)\u2014by consolidating and expanding existing U.S. government development finance functions, which are conducted primarily by the Overseas Private Investment Corporation (OPIC) and some components of the U.S. Agency for International Development (USAID).", "While the IDFC is expected to carry over OPIC's authorities and many of its policies, there are some key distinctions. For example, in comparison to OPIC, the new IDFC, by statute, is to have the following:", "More \"tools\" to provide investment support (e.g., authority to make limited equity investments and provide technical assistance). More capacity (a $60 billion exposure cap compared to OPIC's $29 billion exposure cap). A longer authorization period (seven years compared to OPIC's year-to-year authorization through appropriations legislation in recent years). More specific oversight and risk management (including its own Inspector General [IG], compared to OPIC, which is under the USAID IG's jurisdiction).", "A key policy rationale for the BUILD Act was to respond to China's Belt and Road Initiative (BRI) and China's growing economic influence in developing countries. In this regard, the IDFC aims to advance U.S. influence in developing countries by incentivizing private investment as an alternative to a state-directed investment model. The BUILD Act also aims to increase the effectiveness and efficiency of U.S. government development finance functions, as well as to achieve greater cost savings through consolidation.", "The BUILD Act requires the Administration to submit to Congress a reorganization plan within 120 days of enactment of the act, and the IDFC is not permitted to become operational any sooner than 90 days after the President has transmitted the reorganization plan.", "The 116th Congress will have responsibility for overseeing the Administration's implementation of the BUILD Act. As the IDFC is operationalized, Members of Congress may examine whether the current statutory framework allows the IDFC to balance both its mandates to support U.S. businesses in competing for overseas investment opportunities and to support development, as well as whether it enables the IDFC to respond effectively to strategic concerns especially vis-\u00e0-vis China. Congress also may consider whether to press the Administration to pursue international rules on development finance comparable to those that govern export credit financing. More broadly, the IDFC's establishment could renew legislative debate over the economic and policy benefits and costs of U.S. government activity to support private investment, and whether such activity is an effective way to promote broad U.S. foreign policy objectives."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "What is the U.S. International Development Finance Corporation (IDFC)?", "paragraphs": ["The IDFC is authorized by statute to be a \"wholly owned Government corporation ... under the foreign policy guidance of the Secretary of State\" in the executive branch. Its purpose is to \"mobilize and facilitate the participation of private sector capital and skills in the economic development\" of developing and transition countries, in order to complement U.S. development assistance objectives and foreign policy interests (\u00a71412). In other words, the IDFC's mission is to promote private investment in support of both U.S. global development goals and U.S. economic interests. Not yet operational, the IDFC represents a potentially major overhaul of U.S. development finance efforts. ", "The IDFC's enabling legislation is the Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act), which was enacted on October 5, 2018, as Division F of a law to reauthorize the (unrelated) Federal Aviation Administration (FAA) ( H.R. 302 / P.L. 115-254 ). Under the BUILD Act, the IDFC is to consolidate and expand the U.S. government's existing development finance functions\u2014currently conducted primarily by the Overseas Private Investment Corporation (OPIC) and the U.S. Agency for International Development (USAID). By statute, the IDFC is a successor agency to OPIC, which is to terminate when the IDFC is operational. "], "subsections": []}, {"section_title": "What existing agency functions are consolidated?", "paragraphs": ["The BUILD Act consolidates functions currently carried out primarily by OPIC and certain elements of USAID (see Appendix ). ", "The act established the new IDFC to be a successor entity to OPIC, taking over all of its functions and authorities and adding new ones. The IDFC's authorities would expand beyond OPIC's existing authorities to make loans and guarantees and issue insurance or reinsurance. They would also include the authority to take minority equity positions in investments, subject to limitations. In addition, unlike OPIC, the IDFC would be able to issue loans in local currency.", "The extent to which USAID functions will be transferred to the new IDFC is less clear. The act specifies that the Development Credit Authority (DCA), the existing legacy credit portfolio under the Urban and Environment Credit Program, and any other direct loan programs and non-DCA guarantee programs shall be transferred to the IDFC. It also provides the authority for, but does not require, the transfer of USAID's Office of Private Capital and Microenterprise, the existing USAID-managed enterprise funds (it gives the IDFC authority to establish new funds), and the sovereign loan guarantee portfolio. The disposition of these functions is to be detailed in the reorganization plan that the Administration must submit to Congress within 120 days of enactment. The reorganization plan is expected to be submitted by early February 2019.", "In addition, the IDFC would have the authority to conduct feasibility studies on proposed investment projects (with cost sharing) and provide technical assistance."], "subsections": []}, {"section_title": "What is development finance?", "paragraphs": ["\"Development finance\" is a term commonly used to describe government-backed financing to support private sector capital investments in developing and emerging economies. It can be viewed on a continuum of public and private support, situated between pure government support through grants and concessional loans and pure commercial financing at market-rate terms.", "Development finance generally is targeted toward promoting economic development by supporting foreign direct investment (FDI) in underserved types of projects, regions, and countries; undercapitalized sectors; and countries with viable project environments but low credit ratings. Such support is aimed to increase private sector activity and public-private partnerships that would not happen otherwise in the absence of development finance support because of the actual or perceived risk associated with the activity. Tools of development finance may include equity (raising capital through the sale of ownership shares), direct loans, loan guarantees, political risk insurance, and technical assistance.", "Development financing is particularly important for infrastructure funding, where annual global investment in transportation, power, water, and telecommunications systems falls, by one account, almost $800 million short of the estimated $3.3 trillion required to keep pace with projected economic growth. The largest infrastructure investment gaps are in the road and electricity sectors in developing and emerging economies. "], "subsections": []}, {"section_title": "What are development finance institutions (DFIs)?", "paragraphs": ["DFIs are specialized entities that supply development finance, generally aiming to be catalytic agents in promoting private sector investment in developing countries. In the United States, OPIC has been the primary DFI since the 1970s. In FY2017, OPIC reported authorizing $3.8 billion in new commitments for 112 projects, and its exposure reached a record high of $23.2 billion (see Figure 1 ). OPIC estimated that it helped mobilize $6.8 billion in capital and supported 13,000 new jobs in host countries that year. Sub-Saharan Africa represents the largest share of OPIC's portfolio by region. OPIC has committed $2.4 billion in financing and political risk insurance for Power Africa\u2212a major public-private partnership coordinated by USAID\u2212to date, including committing $12.4 million for a loan to support construction of a hydropower plant in Uganda in FY2017. Among other focus areas, OPIC currently has $5 billion invested in the Indo-Pacific in projects to expand access to energy, education, and financial services, as well as to support local farmers. On July 30, 2018, OPIC, the Japanese Bank for International Cooperation (JBIC, Japan's counterpart to OPIC), and the Australian government announced a trilateral partnership to mobilize investments in infrastructure projects in the Indo-Pacific region to support development, connectivity, and economic growth in the region.", "Other agencies, such as the U.S. Agency for International Development (USAID), also provide development finance. The IDFC is to take on the DFI mantle for the United States under the BUILD Act. ", "At the bilateral level, national governments can operate DFIs. The United Kingdom was the first country to establish a DFI in 1948. Many countries have followed suit. In the United States, OPIC began operations in 1971, but the U.S. government's role in overseas investment financing predates OPIC's formal establishment. ", "Bilateral DFIs are typically wholly or majority government-owned. They operate either as independent institutions or as a part of larger development banks or institutions. Their organizational structures have evolved, in some cases, due to changing perceptions of how to address identified development needs in the most effective way possible. Unlike OPIC, other bilateral DFIs tend to be permanent and not subject to renewals by their countries' legislatures.", "DFIs also can operate multilaterally, as parts of international financial institutions (IFIs), such as the International Finance Corporation (IFC), the private-sector arm of the World Bank. They can operate regionally through regional development banks as well. Examples of these banks include the African Development Bank (AfDB), the Asian Development Bank (AsDB), the European Bank for Reconstruction & Development (EBRD), and the Inter-American Development Bank (IDB).", "DFIs vary in their specific objectives, management structures, authorities, and activities. "], "subsections": []}, {"section_title": "How does development finance relate to foreign assistance?", "paragraphs": ["Historically, official development assistance (ODA) has been a primary way that the United States and other developed countries have provided support for infrastructure projects in developing countries. However, foreign aid for infrastructure has declined over decades while the growth of direct private investment flows has outpaced ODA, making development finance an increasingly prominent way to encourage private investment in undercapitalized areas. Private investors face challenges investing in developing countries due to political risk, exchange rate risk, and weaknesses in legal, regulatory, and institutional environments, among other things. In such cases, government support, whether through equity, financing, or political risk insurance, may provide needed liquidity or assurances to catalyze private investment. "], "subsections": []}, {"section_title": "How does the IDFC aim to respond to China's growing economic influence in developing countries?", "paragraphs": ["While it does not mention China by name, the BUILD Act alludes to concerns with state-directed investments, such as China's Belt and Road Initiative (BRI), which launched in 2013. The act states that it is U.S. policy to \"facilitate market-based private sector development and inclusive economic growth in less developed countries\" through financing, including", "to provide countries a robust alternative to state-directed investments by authoritarian governments and [U.S.] strategic competitors using best practices with respect to transparency and environmental and social safeguards, and which take into account the debt sustainability of partner countries (\u00a71411).", "Supporters view the IDFC as a central part of the U.S. response to China's growing economic influence in developing countries, exemplified by the BRI\u2014which could provide, by some estimates, anywhere from $1 trillion to $8 trillion in Chinese investments and development financing for infrastructure projects in developing countries (see text box ). The Administration and many Members of Congress have been critical of China's financing model, which they find to lack transparency, operate under inadequate environmental and social safeguards for projects, and employ questionable lending practices that may lead to unsustainable debt burdens in some poorer countries (so-called \"debt diplomacy\"). Under this view, the IDFC (when operational) may help the United States compete more effectively or strategically with China. While even a strengthened OPIC may not be able to compete \"dollar-for-dollar\" with China's DFI activity, supporters argue that the United States \"can and should do more to support international economic development with partners who have embraced the private sector-driven development model.\" Others, however, argued that the act could have tightened the IDFC's focus with respect to China, for instance, by requiring the IDFC to have a specific focus on countering China's investment and economic influence; from this perspective, the failure to narrow the IDFC's scope makes it likely that the new entity may support projects of limited U.S. foreign policy and strategic interest\u2014a concern that some critics have levied against OPIC. "], "subsections": []}]}, {"section_title": "BUILD Act Formulation and Debate", "paragraphs": [], "subsections": [{"section_title": "What is the BUILD Act's legislative history?15", "paragraphs": ["In February 2018, two proposed versions of the BUILD Act, H.R. 5105 in the House and S. 2463 in the Senate, were introduced to create a new U.S. International Development Finance Corporation (IDFC). Both bills proposed consolidating all of OPIC's functions and certain elements of USAID\u2014including the Development Credit Authority (DCA), Office of Private Capital and Microenterprise, and enterprise funds. A major difference between the two bills, as introduced, was that H.R. 5105 would have authorized the IDFC for seven years, while S. 2463 would have authorized it for two decades, until September 30, 2038. The House-passed version (July 17, 2018; H.Rept. 115-814 ) and Senate committee-reported version (June 27, 2018) bridged some differences, including both providing a seven-year authorization. ", "On September 26, 2018, the House adopted a resolution ( H.Res. 1082 ) to pass the BUILD Act as part of the Federal Aviation Administration Reauthorization Act of 2018 (FAA Reauthorization Act; H.R. 302 ). The Senate followed with its passage of the BUILD Act as part of the FAA Reauthorization Act on October 3, 2018. On October 5, 2018, the President signed into law the FAA Reauthorization Act, with the BUILD Act in Division F. "], "subsections": []}, {"section_title": "What is the Trump Administration's development finance policy approach?", "paragraphs": ["Although the President's FY2018 budget request called for eliminating OPIC's funding as part of its critical view of U.S. government agencies with international development orientations, the Administration ultimately pursued development finance reform through OPIC as an opportunity to respond to China's growing economic influence in developing countries. The Trump Administration included development finance consolidation in its FY2019 budget request and subsequent set of government-wide reorganization proposals. The Administration supported the BUILD Act bills introduced in Congress ( H.R. 5105 , S. 2320 ), viewing them as broadly consistent with its goals, while calling for some modifications. It later said that amendments to the BUILD Act fulfilled the Administration's goals, including to \"align U.S. government development finance with broader foreign policy and development goals, enhancing the competitiveness and compatibility of the U.S. development finance toolkit.\""], "subsections": []}, {"section_title": "What was the policy debate over the BUILD Act?", "paragraphs": ["The BUILD Act follows long-standing debate among policymakers over whether or not government financing of private-sector activity is appropriate. Supporters argued that OPIC helps fill in gaps in private-sector support that arise from market failures and helps U.S. firms compete against foreign firms backed by foreign DFIs for investment opportunities\u2014thereby advancing U.S. foreign policy, national security, and economic interests. Various civil society stakeholders have proposed consolidating the development finance functions of OPIC and other agencies into a new DFI in order to boost OPIC and make U.S. development finance efforts more competitive with those of foreign countries. Opponents held that OPIC diverts capital away from efficient uses and crowds out private alternatives, criticized OPIC for assuming risks unwanted by the private sector, and questioned the development benefits of its programs. They have called for terminating OPIC's functions or privatizing them.", "While the BUILD Act garnered overall support, specific aspects of it were subject to debate. Some development advocates expressed concern that the BUILD Act's transfer of DCA and other credit program authority from USAID to the IDFC may sever the close link between these funding mechanisms and the USAID development programs into which they have been embedded, potentially making the tools less effective and less development-oriented. Others saw potential for the DCA to become a more robust financing option for USAID programs under the new IDFC, with its expanded authorities. In response to these concerns, the BUILD Act includes many provisions, discussed later in this report, to promote coordination and linkages between USAID and the IDFC, and to emphasize the development mission of the IDFC. Some in the development community also questioned whether the new DFI would have a sufficiently strong development mandate, as well as raised concerns about the transparency, environmental, and social standards of the new DFI relative to OPIC. Some critics of OPIC supported strengthening statutorily the aim of the IDFC in specifically countering China's influence in the developing countries. Other possible policy alternatives include focusing on enhancing coordination of development finance functions among agencies or supporting development goals through multilateral and regional DFIs in which the United States plays a major leadership role."], "subsections": []}]}, {"section_title": "IDFC Organizational Structure and Management", "paragraphs": ["While the IDFC authorized by the BUILD Act has yet to be established, and some implementation questions remain, the act detailed many aspects of how the new entity should be structured, managed, and overseen by Congress. This section discusses the BUILD Act provisions that describe how the new IDFC is expected to function once established. "], "subsections": [{"section_title": "What are the congressional committees of jurisdiction?", "paragraphs": ["The BUILD Act defines \"appropriate congressional committees\" as the Senate Foreign Relations and Appropriations committees and the House Foreign Affairs and Appropriations committees (\u00a71402(1)). It imposes a number of reporting and notification requirements on the IDFC with respect to these congressional committees. These committees have typically been the same ones in which legislation related to OPIC and USAID is introduced. "], "subsections": []}, {"section_title": "What is the IDFC's mission?", "paragraphs": ["The BUILD Act establishes the IDFC for the stated purpose of mobilizing private-sector capital and skills for the economic benefit of less-developed countries, as well as countries in transition from nonmarket to market economies, in support of U.S. development assistance and other foreign policy objectives (\u00a71412(b)). This is very similar to the mission of OPIC, as described in the Foreign Assistance Act of 1961, as amended. ", "The legislation includes several provisions intended to ensure that the corporation remains focused on this development mission. The act directs the IDFC to prioritize support to countries with low-income or lower-middle-income economies, establishes a position of Chief Development Officer on the board, and requires that a performance measurement system be developed that includes, among other things, standards and methods for ensuring the development performance of the corporation's portfolio. The annual report required by the BUILD Act also must include an analysis of the desired development outcomes for IDFC-supported projects and the extent to which the corporation is meeting associated development metrics, goals, and objectives."], "subsections": []}, {"section_title": "How will the IDFC be managed?", "paragraphs": ["The BUILD Act establishes a Board of Directors (\"Board\"), a Chief Executive Officer (CEO), a Deputy Chief Executive Officer (Deputy CEO), a Chief Risk Officer, a Chief Development Officer, and any other officers as the Board may determine, to manage the IDFC (\u00a71413(a)). ", "The BUILD Act vests all powers of the IDFC in the nine-member Board of Directors (\u00a71413(b)). By statute, the Board is composed of", "a C hief Executive Officer ; four U.S. government officials \u2014the Secretary of State, USAID Administrator, Secretary of the Treasury, and Secretary of Commerce (or their designees); and four non government members appointed by the President of the United States by and with the advice and consent of the Senate, with \"relevant experience\" to carry out the IDFC's purpose, which \"may include experience relating to the private sector, the environment, labor organizations, or international development.\" These members have three-year terms, can be reappointed for one additional term, and serve until their successors are appointed and confirmed. ", "The Board's Chairperson is the Secretary of State and the Vice Chairperson is the USAID Administrator (or their designees). ", "The Board differs in size and potentially composition from that of OPIC's Board. By statute, OPIC's 15-member Board of Directors is composed of eight \"private sector\" Directors, with specific requirements for representation of small business, labor, and cooperatives interests, and seven \"federal government\" Directors (including the OPIC President, USAID Administrator, U.S. Trade Representative, and a Labor Department officer). The President of the United States appoints the Board Chairman and Vice Chairman from among the members of the Board.", "Five members of the Board constitutes a quorum for the transaction of business. The Board is required to hold at least two public hearings each year to allow for stakeholder input. "], "subsections": []}, {"section_title": "What will be the responsibilities of the officers?", "paragraphs": ["The BUILD Act establishes four officers for IDFC management. A Chief Executive Officer, who is under the Board's direct authority, is responsible for the IDFC's management and exercising powers and duties as the Board directs (\u00a71413(d)). The BUILD Act also establishes a Deputy Chief Executive Officer (\u00a71413(e)). The Chief Executive Officer and Deputy Chief Executive Officer are appointed by the President of the United States, by and with the advice and consent of the Senate, and serve at the pleasure of the President.", "The act outlines the positions of the Chief Risk Officer and Chief Development Officer in more detail. Both officers are to be appointed by the CEO, subject to Board approval, from among individuals with senior-level experience in financial risk management and development, respectively. They each are to report directly to the Board and are removable only by a majority Board vote. The Chief Risk Officer, in coordination with the Audit Committee established by the act, is responsible for developing, implementing, and managing a comprehensive process for identifying, assessing, monitoring, and limiting risks to the IDFC (\u00a71413(f)). The Chief Development Officer's responsibilities include coordinating the IDFC's development policies and implementation efforts with USAID, the Millennium Challenge Corporation (MCC), and other relevant U.S. government departments and agencies; managing IDFC employees dedicated to working on transactions and projects codesigned with USAID and other relevant U.S. government entities; and authorizing and coordinating interagency transfers of funds and resources to support the IDFC (\u00a71413(g)). OPIC's enabling legislation does not include either a specific Chief Risk Officer or Chief Development Officer. "], "subsections": []}, {"section_title": "Will the IDFC have any advisory support?", "paragraphs": ["The BUILD Act establishes a Development Advisory Council to advise the Board on the IDFC's development objectives (\u00a71413(i)). By statute, its members are Board-appointed on the recommendation of the CEO and Chief Development Officer, and composed of no more than nine members \"broadly representative\" of NGOs and other international development-related institutions. Its functions are to advise the Board on the extent to which the IDFC is meeting its development mandate and any suggestions for improvements."], "subsections": []}, {"section_title": "What oversight structures will the IDFC have?", "paragraphs": ["The BUILD Act establishes several oversight structures to govern the agency overall and particular aspects.", "Unlike OPIC, which is overseen by the USAID Inspector General, the IDFC is to have its own Inspector General (IG) (\u00a71414) to conduct reviews, investigations, and inspections of its operations and activities. In addition, the act requires the Board to establish a \"transparent and independent accountability mechanism\" to annually evaluate and report to the Board and Congress regarding statutory compliance with environmental, social, labor, human rights, and transparency standards; provide a forum for resolving concerns regarding the impacts of specific IDFC-supported projects with respect to such standards; and provide advice regarding IDFC projects, policies, and practices (\u00a71415). ", "The BUILD Act also requires the IDFC to establish a Risk Committee and Audit Committee to ensure monitoring and oversight of the IDFC's investment strategies and finances (\u00a71441). Both committees are under the direction of the Board. The Risk Committee is responsible for overseeing the formulation of the IDFC's risk governance structure and risk profile (e.g., strategic, reputational, regulatory, operational, developmental, environmental, social, and financial risks) (\u00a71441(b)), while the Audit Committee is responsible for overseeing the IDFC's financial performance management structure, including the integrity of its internal controls and financial statements, the performance of internal audits, and compliance with legal and regulatory finance-related requirements (\u00a71444(c))."], "subsections": []}]}, {"section_title": "IDFC Operations", "paragraphs": [], "subsections": [{"section_title": "For what purposes can the IDFC use its authorities?", "paragraphs": ["In general, the IDFC's authorities are limited to (\u00a71421(a)) ", "carrying out U.S. policy and the IDFC's purpose, as outlined in the statute; mitigating risks to U.S. taxpayers by sharing risks with the private sector and qualifying sovereign entities through cofinancing and structuring of tools; and ensuring that support provided is \"additional\" to private-sector resources by mobilizing private capital that would otherwise not be deployed without such support. ", "The emphasis on additionality reflects OPIC's current policy, but is not explicitly in OPIC's enabling legislation. Policymakers have debated whether OPIC supports or crowds out private-sector activity."], "subsections": []}, {"section_title": "What financial authorities and tools will the IDFC have?", "paragraphs": ["Under the BUILD Act, the IDFC's authorities would expand beyond OPIC's existing authorities to make loans and guarantees and issue insurance or reinsurance (see Table 1 ). They would also include the authority to take minority equity positions in investments. USAID-drawn authorities include technical assistance and the establishment of enterprise funds. In addition, the IDFC would have the authority to conduct feasibility studies on proposed investment projects (with cost-sharing) and provide technical assistance. A chart depicting the current development finance functions of relevant U.S. agencies, as well as how those functions may be shifted by the BUILD Act, is in the Appendix .", "The IDFC's functions are discussed below.", "Loan and Guarantees. The IDFC is authorized to make loans or guarantees upon the terms and conditions that it determines (\u00a71421(b)). Loans and guarantees are subject to the Federal Credit Reform Act of 1990 (FCRA). ", "IDFC financing may be denominated and repayable in either U.S. dollars or foreign currencies, the latter only in cases where the Board determines there is a \"substantive policy rationale.\" This is distinct from OPIC, which is limited to making loans in U.S. currency.", "Equity Investments. The BUILD Act authorizes the IDFC to take equity stakes in private investments (\u00a71421(c)). The IDFC can support projects as a minority investor acquiring equity or quasiequity stake of any entity, including as a limited partner or other investor in investment funds, upon such terms and conditions as the IDFC may determine. Loans and guarantees may be denominated and repayable in either U.S. dollars or foreign currencies, the latter only in cases where the Board determines there is a \"substantive policy rationale.\" The IDFC is required to develop guidelines and criteria to require that the use of equity authority has a clearly defined development and foreign policy purpose, taking into account certain factors. ", "The BUILD Act places limitations on equity investment, both in terms of the specific project and the overall support. The total amount of support with respect to any project cannot exceed 30% of the total amount of all equity investment made to that project at the time the IDFC approves support. Furthermore, equity support is limited to no more than 35% of the IDFC's total exposure. The BUILD Act directs the IDFC to sell and liquidate its equity investment support as soon as commercially feasible commensurate with other similar investors in the project, taking into account national security interests of the United States.", "The addition of equity authority is potentially significant. OPIC does not have the capacity to make equity investments; it can only provide debt financing as a senior lender, meaning it is repaid first in the event of a loss. Foreign DFIs often have been reluctant to partner with OPIC because they would prefer to be on an equal footing. Potential expansion of OPIC's equity authority capability has met resistance from some Members of Congress in the past, based on discomfort with the notion of the U.S. government acquiring ownership stakes in private investments, among other concerns. ", "Insurance and r einsurance . The IDFC may issue insurance or reinsurance to private-sector entities and qualifying sovereign entities assuring protection of their investments in whole or in part against political risks (\u00a71421(d)). Examples include currency inconvertibility and transfer restrictions, expropriation, war, terrorism, civil disturbance, breach of contract, or non-honoring of financial obligations.", "Investment promotion . The IDFC is authorized to initiate and support feasibility studies for planning, developing, and managing of and procurement for potential bilateral and multilateral development projects eligible for support (\u00a71421(e)). This includes training on how to identify, assess, survey, and promote private investment opportunities. The BUILD Act directs the IDFC, to the maximum extent practicable, to require cost-sharing by those receiving funds for investment promotion.", "Special projects and programs. The IDFC is authorized to administer and manage special projects and programs to support specific transactions, including financial and advisory support programs that provide private technical, professional, or managerial assistance in the development of human resources, skills, technology, capital savings, or intermediate financial and investment institutions or cooperatives (\u00a71421(f)). This includes the initiation of incentives, grants, or studies for the energy sector, women's economic empowerment, microenterprise households, or other small business activities.", "Enterprise funds. The BUILD Act authorizes but does not require the transfer of existing USAID enterprise funds to the IDFC (\u00a71421(g)). Existing Europe/Eurasia enterprise funds are winding down. The two newer funds, in Tunisia and Egypt, remain primarily funded by U.S. government grant funds and are private sector-managed, arguably requiring close USAID oversight and an in-country presence to ensure the funds fulfill a development, rather than a purely for-profit, mission. As such, their removal to an agency without either feature may make this model less effective as a development instrument. The BUILD Act also gives the IDFC authority to establish new enterprise funds. It has been argued, however, that the IDFC's authority to conduct equity investment would make enterprise funds unnecessary."], "subsections": []}, {"section_title": "Will the IDFC's activities have U.S. government backing?", "paragraphs": ["All of the IDFC's authorities, like prior support by OPIC and USAID components, are backed by the full faith and credit of the U.S. government. In other words, the full faith and credit of the U.S. government is pledged for full payment and performance of obligations under these authorities (\u00a71434(e)). "], "subsections": []}, {"section_title": "Will the IDFC have an exposure limit?", "paragraphs": ["The maximum contingent liability (overall portfolio) that the IDFC can have outstanding at any one time cannot exceed $60 billion (\u00a71433). This is more than double OPIC's current exposure limit\u2014$29 billion. In recent years, OPIC support has reached record highs\u2014totaling $23.2 billion in FY2017. While the IDFC's exposure cap is small compared to the potentially trillions of dollars that China is pouring into development efforts like the BRI, supporters argue that the IDFC could catalyze other private investment to developing countries through the U.S. development finance model. "], "subsections": []}, {"section_title": "How will the IDFC be funded?", "paragraphs": ["According to the BUILD Act, the IDFC will be funded through a Corporate Capital Account comprised of fees for services, interest earnings, returns on investments, and transfers of unexpended balances from predecessor agencies (\u00a71434). Annual appropriations legislation will designate a portion of these funds that may be retained for operating and program expenses, while the rest will revert to the Treasury, much like the current OPIC funding process. Like OPIC, the new IDFC is expected to be self-sustaining, meaning that anticipated collections are expected to exceed expenses, resulting in a net gain to the Treasury. The act also authorizes transfers of funds appropriated to USAID and the State Department to the IDFC. This authority will allow USAID missions and bureaus to continue to fund DCA activities related to their projects through transfers, as they now do through transfers to the DCA office within USAID. ", "The BUILD Act does not authorize annual appropriations levels for administrative and program expenses for the new IDFC, and it is unclear how future appropriations provisions for the IDFC will compare to current OPIC and DCA provisions. In FY2018, appropriators made $79.2 million of OPIC revenue available for OPIC's administrative expenses and $20 million available for loans and loan guarantees. DCA was appropriated $10 million for administrative expenses and authorized to use up to $55 million transferred from foreign assistance accounts managed by USAID to support loan guarantees. "], "subsections": []}, {"section_title": "How are losses to be repaid?", "paragraphs": ["In general, if the IDFC determines that the holder of a loan guaranteed by the IDFC suffers a loss as a result of default by the loan borrower, the IDFC shall pay to the holder the percentage of loss per contract after the holder of the loan has made further collection efforts and instituted any required enforcement proceedings (\u00a71423). The IDFC also must institute recovery efforts on the borrower. The BUILD Act puts limitations on the payment of losses, such as generally limiting it to the dollar value of tangible or intangible contributions or commitments made in the project plus interest, earnings, or profits actually accrued on such contributions or commitments to the extent provided by such insurance, reinsurance, or guarantee. The Attorney General must take action as may be appropriate to enforce any right accruing to the United States as a result of the issuance of any loan or guarantee under this title. The BUILD Act also imposes certain limitations on payments of losses."], "subsections": []}, {"section_title": "For how long is the IDFC authorized?", "paragraphs": ["The BUILD Act provides that the IDFC's authorities terminate seven years after the date of the enactment of the act (\u00a71424). It also provides that the IDFC terminates on the date on which its portfolio is liquidated. This is markedly different from the annual extensions of authority required for OPIC in recent years. A longer-term authorization as given to the IDFC could be beneficial for supporting investments in infrastructure projects, which often are multiyear endeavors, as well as underscore a sustained U.S. commitment to respond to China's BRI."], "subsections": []}]}, {"section_title": "Statutory Parameters for IDFC Project Support", "paragraphs": [], "subsections": [{"section_title": "Will there be terms and conditions of IDFC support?", "paragraphs": ["The BUILD Act authorizes the IDFC to set terms and conditions for its support, subject to certain parameters.", "Reason for support. The IDFC is only permitted to provide its support if it is necessary either to alleviate a credit market imperfection or to achieve a specified goal of U.S. development or foreign policy by providing support in the most efficient way to meet those objectives on a case-by-case basis (\u00a71422(b)(1)).", "Length of support. The final maturity of a loan or guarantee cannot exceed 25 years or the debt servicing capabilities of the project to be financed by the loan, whichever is lesser (\u00a71422(b)(2)). ", "Risk-sharing. With respect to any loan guarantee to a project, the IDFC must require parties to bear the risk of loss in an amount equal to at least 20% of the guaranteed support by the IDFC to the project (\u00a71422(b)(3))\u2014compared to 50% risk-sharing in most cases for OPIC. ", "U.S. financial interest. The IDFC may not make a guarantee or loan unless it determines that the borrower or lender is responsible and that adequate provision is made for servicing the loan on reasonable terms and protecting the U.S. financial interest (\u00a71422(b)(4)).", "Interest rate. The interest rate for direct loans and interest supplements on guaranteed loans shall be set by reference to a benchmark interest rate (yield) on marketable Treasury securities or other widely recognized or appropriate comparable benchmarks, as determined in consultation with the Director of the Office of Management and Budget and the Secretary of the Treasury. The IDFC must establish appropriate minimum interest rates for loan guarantees, and other instruments as necessary. The minimum interest rate for new loans must be adjusted periodically to account for changes in the interest rate of the benchmark financial interest (\u00a71422(b)(5) and (6)).", "Fees and premiums. The IDFC must set fees or premiums for support at levels that minimize U.S. government cost while supporting the achievement of objectives for that support. The IDFC must review fees for loan guarantees periodically to ensure that fees on new loan guarantees are at a level sufficient to cover the IDFC's most recent estimates of its cost (\u00a71422(b)(7)).", "Budget authority. The IDFC may not make loans or loan guarantees except to the extent that budget authority to cover their costs is provided in advance in an appropriations act (\u00a71422(b)(10)).", "Standards. The IDFC must prescribe explicit standards for use in periodically assessing the credit risk of new and existing direct loans or guaranteed loans. It also must rely upon specific standards to assess the developmental and strategic value of projects for which it provides support and should only provide the minimum level of support needed to support such projects (\u00a71422(b)(9) and (11)).", "Seniority. Any loan or guarantee by the IDFC is to be on a senior basis or pari passu with other senior debt unless there is a substantive policy rationale for otherwise (\u00a71422(b)(12)). "], "subsections": []}, {"section_title": "In which countries can the IDFC operate?", "paragraphs": ["In general, the IDFC is to prioritize support for less-developed countries (i.e., with a \"low-income economy or a lower-middle-income economy\"), as defined by the World Bank (\u00a71402 and \u00a71411). It must restrict support in less-developed countries with \"upper-middle-income economies\" unless (1) the President certifies to Congress that such support furthers U.S. national economic or foreign policy interests; and (2) such support is designed to have \"significant development outcomes or provide developmental benefits to the poorest population\" of that country (\u00a71412). This arguably narrows the IDFC's focus to low-income and lower-middle-income countries, compared to OPIC's statutory requirements and practice.", "The IDFC may provide support in any country the government of which has entered into an agreement with the United States authorizing the IDFC to provide support (\u00a71431)."], "subsections": []}, {"section_title": "What considerations will factor into the IDFC's decision to support projects?", "paragraphs": ["Preference for U.S. sponsors. The IDFC must give preferential consideration to projects sponsored by or involving private-sector entities that are \"U.S. persons\"\u2014defined as either U.S. citizens or entities owned or controlled by U.S. citizens (\u00a71451(b)). This presumably eases OPIC's requirement for projects to have a \"U.S. connection\" based on U.S. citizenship or U.S. ownership shares; the particular requirements vary by program. This change arguably opens up the possibility that the IDFC could support investments by foreign project sponsors, assuming they meet other statutory requirements.", "Preference for countries in compliance with i nternational trade obligations . The IDFC must consult at least annually with the U.S. Trade Representative (USTR) regarding countries' eligibility for IDFC support and compliance with international trade obligations (\u00a71451(c)). The IDFC must give preferential consideration to countries in compliance with (or making substantial progress in coming into compliance with) their international trade obligations. While OPIC does not have a comparable obligation, the USTR (or a designated Deputy USTR) is a member of OPIC's Board of Directors. ", "Worker rights. The IDFC can only support projects in countries taking steps to adopt and implement laws that extend internationally recognized worker rights (as defined in \u00a7507 of the Trade Act of 1974, 19 U.S.C. 2467) to workers in that country. It must include specified language in all contracts for support regarding worker rights and child labor (\u00a71451(d)). These provisions appear to be similar to OPIC's requirements in terms of worker rights.", "Environmental and social impact. The Board is prohibited from voting in favor of any project that is likely to have \"significant adverse environmental or social impact impacts that are sensitive, diverse, or unprecedented\" unless it provides an impact notification (\u00a71451(e)). The act requires that (1) the notification be at least 60 days before the date of the Board vote and take the form of an environmental and social impact assessment or initial audit; (2) the notification be made available to the U.S. public and locally affected groups and nongovernmental organizations (NGOs) in the host country; and (3) the IDFC include provisions in any contract relating to the project to ensure mitigation of any such adverse environmental or social impacts. OPIC's enabling legislation has substantially similar requirements as the IDFC's first two requirements with respect to environmental and social impacts.", "Women's economic empowerment consideration. The IDFC must consider the impact of its support on women's economic opportunities and outcomes and take steps to reduce gender gaps and maximize development impact by working to improve women's economic opportunities (\u00a71451(f)). This is distinct from OPIC's statutory requirements.", "C ountries embracing private enterprise. The IDFC is directed to give preferential consideration to projects for which support may be provided in countries whose governments have demonstrated \"consistent support for economic policies that promote the development of private enterprise, both domestic and foreign, and maintain the conditions that enable private enterprise to make full contribution to the development of such countries\" (\u00a71451(g)). The BUILD Act gives examples of market-based economic policies, protection of private property rights, respect for rule of law, and systems to combat corruption and bribery. OPIC's private enterprise-related requirement appears to be more limited. ", "Small business support. The IDFC must, using broad criteria, to the maximum extent possible, give preferential consideration to supporting projects sponsored by or involving small business, and ensure that small business-related projects are not less than 50% of all projects for which the IDFC provides support and that involve U.S. persons (\u00a71451(i)). OPIC's small business support requirement has a 30% target. "], "subsections": []}, {"section_title": "What limitations will there be on the IDFC's support?", "paragraphs": ["Limitation on support for a single entity. No entity receiving IDFC support may receive more than an amount equal to 5% of the IDFC's maximum contingent liability (\u00a71451(a)). In comparison, OPIC has specific limitations by program; for example, no more than 10% of maximum contingent liability of investment insurance can be issued to a single investor, and no more than 15% of maximum contingent liability of investment guarantees can be issued to a single investor.", "Boycott restriction. When considering whether to approve a project, the IDFC must take into account whether the project is sponsored by or substantially affiliated with any individual involved in boycotting a country that is \"friendly\" with the United States and is not subject to a boycott under U.S. law or regulation (\u00a71451(h)). The measure is aimed at ensuring that beneficiaries of the new DFI's support are \"not undermining [U.S.] foreign policy goals.\" Concerns about boycotts against Israel appear to figure prominently. ", "International terrorism/human rights violations restriction . The IDFC is prohibited from providing support for a government or entity owned or controlled by a government if the Secretary of State has determined that the government has repeatedly provided support for acts of international terrorism or has engaged in a consistent pattern of gross violations of internationally recognized human rights (\u00a71453(a)). In comparison, OPIC must take into account human rights considerations in conducting its programs.", "Sanctions restriction. The IDFC is also prohibited from all dealings related to any project prohibited under U.S. sanctions laws or regulations, including dealings with persons on the list of specially designated persons and blocked persons maintained by the Office of Foreign Assets Control (OFAC) of the Department of the Treasury, except to the extent otherwise authorized by the Secretaries of the Treasury or State (\u00a71453(b) and (c)). OPIC is subject to sanctions restrictions as well."], "subsections": []}, {"section_title": "What requirements will the IDFC have to avoid market distortion?", "paragraphs": ["Commercial banks can provide financing for foreign investment, such as through project finance, and political risk insurance. The BUILD Act requires that before the IDFC provides support, it must ensure that private-sector entities are afforded an opportunity to support the project. The IDFC must develop safeguards, policies, and guidelines to ensure that its support supplements and encourages, but does not compete with, private-sector support; operates according to internationally recognized best practices and standards to avoid market-distorting government subsidies and crowding out of private-sector lending; and does not have significant adverse impact on U.S. employment (\u00a71452)."], "subsections": []}]}, {"section_title": "Monitoring and Transparency", "paragraphs": [], "subsections": [{"section_title": "What performance measures and evaluation will the IDFC have?", "paragraphs": ["The BUILD Act requires the IDFC to develop a performance measurement system to evaluate and monitor its projects and to guide future project support, using OPIC's current development impact measurement system as a starting point (\u00a71442). The IDFC must develop standards for measuring the projected and ex post development impact of a project. It also must regularly make information about its performance available to the public on a country-by-country basis. ", "Measuring development impact can be complicated for a number of reasons, including definitional issues, difficulties isolating the impact of development finance from other variables that affect development outcome, challenges in monitoring projects for development impact after DFI support for a project ends, and resource constraints. Comparing development impacts across DFIs is also difficult as development indicators may not be harmonized. To the extent that the proposed DFI raises questions within the development community about whether it would be truly \"developmental\" at its core, rigorous adherence to development objectives through a measurement system will likely be critical to gauging its effectiveness. Moreover, Congress may choose to take a broader view of U.S. development impact, given the active U.S. contributions to regional and multilateral DFIs. "], "subsections": []}, {"section_title": "What are the IDFC's reporting and notification requirements?", "paragraphs": ["At the end of each fiscal year, the IDFC must submit to Congress a report including an assessment of its economic and social development impact, the extent to which its operations complement or are compatible with U.S. development assistance programs and those of qualifying sovereign entities, and the compliance of projects with statutory requirements (\u00a71443). In addition, no later than 15 days before the IDFC makes a financial commitment over $10 million, the Chief Executive Officer must submit to the appropriate congressional committees a report with information on the financial commitment (\u00a71446(a) and (b)). The CEO also must notify the committees no later than 30 days after entering into a new bilateral agreement (\u00a71446(c)). "], "subsections": []}, {"section_title": "What information must it make available to the public?", "paragraphs": ["The IDFC must \"maintain a user-friendly, publicly available, machine-readable database with detailed project-level information,\" including description of support provided, annual report information provided to Congress, and project-level performance metrics, along with a \"clear link to information on each project\" online (\u00a71444).", "The new agency also must cooperate with USAID to engage with investors to develop a strategic relationship \"focused at the nexus of business opportunities and development priorities\" (\u00a71445). This includes IDFC actions to develop risk mitigation tools and provide transaction-structuring support for blending finance models (generally referring to the strategic use of public or philanthropic capital to catalyze private-sector investment for development purposes). "], "subsections": []}]}, {"section_title": "Implementation", "paragraphs": [], "subsections": [{"section_title": "How and when is the IDFC expected to become operational?", "paragraphs": ["The BUILD Act requires the President to submit to Congress within 120 days of enactment a reorganization plan that details the transfer of agencies, personnel, assets, and obligations to the IDFC. The reorganization plan is expected to be submitted by early February 2019.", "The President must consult with Congress on the plan not less than 15 days before the date on which the plan is transmitted, and before making any material modification or revision to the plan before it becomes operational.", "The reorganization plan becomes effective for the IDFC on the date specified in the plan, which may not be earlier than 90 days after the President has transmitted the reorganization plan to Congress (\u00a71462(e)). The actual transfer of functions may occur only after the OPIC President and CEO and the USAID Administrator jointly submit to the foreign affairs committees a report on coordination, including a detailed description of the procedures to be followed after the transfer of functions to coordinate between the IDFC and USAID (\u00a71462(c)). During the transition period, OPIC and USAID are to continue to perform their existing functions. ", "Thus, the IDFC could become operational as early as summer 2019 based on this timeline ( Figure 2 ). OPIC anticipates that the IDFC could become operational as of October 1, 2019. At that time, OPIC is to be terminated and its enabling legislation is to be repealed (\u00a71464). "], "subsections": []}, {"section_title": "How will the IDFC relate to other U.S. trade and investment promotion efforts?", "paragraphs": ["The IDFC is to replace OPIC, and, as such, would be among other federal entities that play a role in promoting U.S. trade and investment efforts. The Export-Import Bank (Ex-Im Bank) provides direct loans, loan guarantees, and export credit insurance to support U.S. exports, in order to support U.S. jobs. The Trade and Development Agency (TDA) aims to link U.S. businesses to export opportunities in overseas infrastructure and other development projects, in order to support economic growth in these overseas markets. TDA provides funding for project preparation activities, such as feasibility studies, and partnership building, such as reverse trade missions bringing foreign decisionmakers to the United States. The IDFC's authority to conduct feasibility studies and provide other forms of technical assistance has raised questions about overlap with the functions of TDA, but BUILD Act supporters note that while functions may overlap, they will be for different purposes\u2014supporting U.S. investment abroad in the case of the IDFC and supporting U.S. exports in the case of TDA. ", "There may also be some overlap of function between the IDFC and USAID if the reorganization plan calls for the transfer of the Office of Private Capital and Microenterprise from USAID to the IDFC and the IDFC starts its own microfinance programs, as microfinance activities are integrated throughout USAID and would not cease with the transfer of the office. Similarly, if the IDFC uses its authority to create new enterprise funds while declining to transfer existing funds under USAID authority, there may be some overlap in that authority as well."], "subsections": []}]}, {"section_title": "Issues for the 116th Congress", "paragraphs": ["The 116 th Congress will have responsibility for overseeing the implementation of the BUILD Act, including review of the reorganization plan, the transition it prescribes, and impact on U.S. foreign policy objectives. As part of this process, Congress may consider a number of policy issues, including the following: ", "Is the Administration meeting the implementation requirements of the BUILD Act? Does the reorganization plan reflect congressional intent, and are the choices made within the discretion allowed by the BUILD Act justified? How can the IDFC best balance its mission to support U.S. businesses in competing for overseas investment opportunities with its development mandate? What are the policy trade-offs associated with the capacity limits, authorities, policy parameters, and other features formulated by Congress in the BUILD Act? Does the legislation find the right balance, or does the implementation process identify areas where legislative changes might be beneficial? In creating the BUILD Act, Congress gave great consideration to strategic foreign policy concerns. In addition to providing commercial opportunities for U.S. firms, development finance may shape how countries connect to the rest of the world through ports, roads, and other transportation and technological links, providing footholds for the United States to advance its approaches to regulations and standards. Another potential role for development finance is to provide a means to spread U.S. values on governance, transparency, and environmental and social safeguards. Does the current statutory framework enable the IDFC to respond effectively to U.S. strategic concerns, particularly with regard to China's BRI? More fundamentally, is the IDFC's aim to compete with, contain, or counter the BRI and Chinese world vision it represents? Beyond establishing the IDFC, Congress may consider whether to advocate for creating international \"rules for the road\" for development finance. Such rules could help ensure that the IDFC operates on a \"level playing field\" relative to its counterparts, given the variation in terms, conditions, and practices of DFIs internationally. U.S. involvement in developing such rules could help advance U.S. strategic interests. However, such rules would only be effective to the extent that major suppliers of development finance are willing to abide by them. For example, China is not a party to international rules on export credit financing, though it has been involved in recent negotiations to develop new rules on such financing. Should Congress press the Administration to pursue international rules on development finance? Is it feasible to engage China in this regard? "], "subsections": [{"section_title": "Appendix. Reorganization of U.S. Government Development and/or Finance Functions", "paragraphs": [], "subsections": []}]}]}}
{"id": "RL31693", "title": "U.S. Armed Forces Abroad: Selected Congressional Votes Since 1982", "released_date": "2019-01-23T00:00:00", "summary": ["This report summarizes selected congressional roll call votes related to instances in which U.S. Armed Forces have been sent abroad in potentially hostile situations. These votes reflect the type of congressional actions that observers maintain bear directly on issues affecting policy and the funding of troops abroad, often in the context of the War Powers Resolution, continued presence or withdrawal of troops, and the \"use of force.\" The cases of Lebanon (1982-1983), Grenada (1983), Panama (1989), the Persian Gulf War (1990-1991), Somalia (1992-1995), Haiti (1993-1996), Bosnia (1992-1998), Kosovo (1999), the terrorist attack against the United States (2001) (including the use of U.S. Armed Forces in Afghanistan), and the use of U.S. Armed Forces against Iraq (2002-2003) and Iraq and Afghanistan (2001-Present) are examined, as are the revolution in Libya and its aftermath, the uprising and war in Syria, and military action against the self-proclaimed Islamic State (IS a.k.a, ISIS/ISIL). The roll call votes that are available online (since 1990 in the House and 1989 in the Senate) are hyperlinked in the text."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The President and Congress have historically played different roles when sending U.S. troops into hostile situations. The President has the power under Article II, Section 2, of the Constitution to use the Armed Forces to repel attacks. Congress under Article I, Section 8, has the power to declare war and raise and support the Armed Forces. The War Powers Resolution was enacted to ensure that the President and Congress share decisions where U.S. troops may become involved in hostilities.", "This sharing of power has often resulted in controversy, particularly when troops are sent into situations where there has not been a formal declaration of war. In most instances, Congress has used its legislative prerogatives through funding mechanisms or declarations of policy either to affirm or to place limits on presidential action. In three instances, Congress has authorized the use of military force in advance of hostilities: the Persian Gulf War (1991), military operations in Afghanistan (2001), and the \"use of force against Iraq\" resolution (2002). In each case, however, the President has maintained that while he may have sought congressional consultation and support, the President has the constitutional authority as Commander in Chief to use force, including the Armed Forces of the United States, to protect U.S. national security interests. Additionally, the executive branch has long viewed congressional enactment of defense appropriations bills as de facto authorization for operations funded under those measures, although Congress has often included provisions stating that no separate authorization for the use of force is implied by the appropriation of funds.", "Related CRS products", "CRS Report RL31133, Declarations of War and Authorizations for the Use of Military Force: Historical Background and Legal Implications , by Jennifer K. Elsea and Matthew C. Weed.", "CRS Report R42699, The War Powers Resolution: Concepts and Practice , by Matthew C. Weed.", "CRS Report R42738, Instances of Use of United States Armed Forces Abroad, 1798-2018 , by Barbara Salazar Torreon and Sofia Plagakis."], "subsections": []}, {"section_title": "Report Content", "paragraphs": ["This report describes the congressional debate that often surrounds the issue of employing the U.S. military abroad. Initially written in response to a congressional request for a list of votes on this topic from 1982-1992, this report has been updated as needed since that time. The floor votes included are those directly related to the use and funding of U.S. troops abroad, often in the context of the War Powers Resolution, or to their continued presence or withdrawal.", "The laws, bills, and resolutions below are listed in the chronological order of the votes that were held. Links to the actual roll call votes are provided, when available (since 1990 in the House and 1989 in the Senate). These links include each Member's yea or nay vote.", "In some cases, House or Senate votes are voice votes, and, thus, no roll call vote exists. Moreover, the ultimate disposition of amendments listed in the report (i.e., whether such amendments were incorporated into any final law) may not be self-evident. Some amendments may appear as considered; some may have been further amended during subsequent proceedings or in conference; some may have been deleted in conference when one chamber receded from that amendment. In other instances, only one chamber of Congress may have voted on a particular measure; for example, a House or Senate simple resolution is a measure that expresses nonbinding opinions on policies or issues and is effective only in the chamber in which it is proposed. It does not require concurrence by the other chamber or approval by the President."], "subsections": []}, {"section_title": "Lebanon (1982-1983)", "paragraphs": ["On September 29, 1982, President Reagan deployed 1,200 marines to serve as part of a multinational observer force to restore the sovereignty of the Lebanese government. By March 30, 1984, the mission had ended.", "Related CRS products", "CRS Report R44759, Lebanon , by Carla E. Humud. "], "subsections": []}, {"section_title": "Grenada (1983)", "paragraphs": ["On October 25, 1983, President Reagan sent U.S. Marines and Army troops to Grenada in order to protect American lives and restore law and order at the request of the Organization of Eastern Caribbean States. All U.S. troops were removed from Grenada by December 15, 1983."], "subsections": []}, {"section_title": "Panama (1989)", "paragraphs": ["On December 20, 1989, President George H.W. Bush deployed 14,000 U.S. military forces to Panama in order to protect American lives, restore Panamanian democracy, and apprehend General Manuel Noriega. Congress did not immediately react to the situation, as the 101 st Congress, first session had ended on November 22, 1989; the second session of the 101 st Congress did not begin until January 23, 1990. The 14,000 U.S. troops were removed from Panama by February 13, 1990.", "Related CRS products", "CRS In Focus IF10430, Panama , by Mark P. Sullivan.", "CRS Report RL30981, Panama: Political and Economic Conditions and U.S. Relations Through 2012 , by Mark P. Sullivan."], "subsections": []}, {"section_title": "Persian Gulf War (1990-1991)", "paragraphs": ["On August 2, 1990, Iraqi troops invaded Kuwait, seized its oil fields, ousted the Kuwaiti leadership, installed a new government in Kuwait City, and massed troops on the Saudi Arabian border. On August 9, President Bush reported that he had deployed U.S. troops to the region. Legislation in late 1990 (101 st Congress, second session) focused on imposing sanctions against Iraq, in seeking the withdrawal of Iraqi forces from the area, and in supporting the President in carrying out the provisions of the relevant United Nations Security Council resolutions. On January 12, 1991 (102 nd Congress, first session), the Congress authorized the \"use of force\" against Iraq in advance of the outbreak of hostilities with Iraq on January 16.", "Related CRS products", "CRS Report RS21513, Kuwait: Governance, Security, and U.S. Policy , by Kenneth Katzman. "], "subsections": []}, {"section_title": "Somalia (1992-1995)", "paragraphs": ["On December 10, 1992, President George H.W. Bush reported that he had deployed U.S. troops into Somalia on December 8, in response to United Nations Security Council Resolution 794, which authorized the Secretary General to \"use all necessary means to establish as soon as possible a secure environment for humanitarian relief operations in Somalia\" and to provide military forces for accomplishing this mission. U.S. troops were deployed to assist United Nations Forces in Somalia (UNOSOM) throughout 1993 and 1994, ending on March 3, 1995.", "Related CRS products", "CRS In Focus IF10155, Somalia , by Lauren Ploch Blanchard and Katherine Z. Terrell.", "CRS Report R45428, Sub-Saharan Africa: Key Issues and U.S. Engagement , coordinated by Tomas F. Husted."], "subsections": []}, {"section_title": "Haiti (1993-1996)", "paragraphs": ["On October 20, 1993, President Bill Clinton reported that U.S. ships had begun enforcing a United Nations embargo against Haiti. On September 19, 1994, President Clinton had deployed 1,500 troops to Haiti to restore democracy; that level was ultimately increased to over 20,000. By March 21, 1995, U.S. troops were reduced to under 5,300 and incorporated into the United Nations Multinational Force in Haiti. By September 21, 1995, they were reduced to under 2,500 personnel. U.S. troops ended their deployment to Haiti by April 17, 1996.", "Related CRS products", "CRS Report R45034, Haiti's Political and Economic Conditions: In Brief , by Maureen Taft-Morales.", "Archived CRS Report RL32294, Haiti: Developments and U.S. Policy Since 1991 and Current Congressional Concerns , by Maureen Taft-Morales and Clare Ribando Seelke."], "subsections": []}, {"section_title": "Bosnia (1992-1998)", "paragraphs": ["The civil war in the former Yugoslav Republic of Bosnia-Herzegovina resulted in U.S. military participation in various efforts over several years to halt the fighting. The United States participated in both United Nations and NATO actions without explicit congressional authorization. Beginning in 1992, the United Nations Security Council adopted Resolution 770, which called on all nations to take \"all measures necessary\" to facilitate the delivery of humanitarian assistance to Sarajevo. On August 11, 1992, the Senate passed S.Res. 330 , which urged the President to work for such a resolution and pledged funds for participation, but also said that no U.S. military personnel should be introduced into hostilities without clearly defined objectives.", "On the same day, the House passed H.Res. 554 , which urged the Security Council to authorize measures, including the use of force, to ensure humanitarian relief. As the conflict in Bosnia continued and escalated over the next several years, U.S. troops were sent to participate in NATO and United Nations peacekeeping missions. Consequently, leaders in Congress began calling for greater congressional involvement in decisions.", "In 1994, for example, the Senate passed S. 2042 , which called for the United States to end unilaterally its arms embargo with Bosnia; the Senate also passed an amendment to S. 2042 which stated that no ground combat troops should be deployed to Bosnia unless previously authorized by Congress. The House did not act on the measure. With the signing of the Dayton Peace Agreement for Bosnia on December 14, 1995, NATO took over the ground operation from UNPROFOR (United Nations Protection Force). Consequently, in late 1995, over 20,000 U.S. combat troops were sent to Bosnia as part of the NATO-led peacekeeping force. In December 1995, Congress considered and voted on a number of bills and resolutions, but the House and Senate could not come to consensus on any single measure. In 1996, President Clinton agreed to provide up to 8,500 ground troops to participate in the NATO-led follow-on force in Bosnia termed the Stabilization Force (SFOR).", "Subsequent efforts by both the House and Senate to require the President to either limit funding for the Bosnia operations or to bring the troops home did not succeed. On March 18, 1998, for example, the House defeated by a vote of 193-225 H.Con.Res. 227 , which would have directed the President to remove U.S. Armed Forces from the Republic of Bosnia-Herzegovina, pursuant to Section 5(c) of the War Powers Resolution.", "On July 22, 2002, President Bush reported to Congress that U.S. Armed Forces contributions to SFOR in Bosnia-Herzegovina were approximately 2,400 personnel. U.S. troops ended their mission in Bosnia-Herzegovina when SFOR was replaced by the European Union Force (EUFOR Althea) in 2004. The following table includes legislation of what was introduced and voted on during the 102nd Congress-105th Congresses (1992-1998).", "Related CRS products", "CRS Insight IN10980, Postelection Issues in Bosnia and Herzegovina , by Sarah E. Garding. ", "CRS Report RS21774, Bosnia and the European Union Military Force (EUFOR): Post-NATO Peacekeeping , by Julie Kim.", "CRS Report 96-723, Bosnia Implementation Force (IFOR) and Stabilization Force (SFOR): Activities of the 104th Congress , by Julie Kim. "], "subsections": []}, {"section_title": "Kosovo (1999)", "paragraphs": ["On March 24, 1999, President Clinton ordered U.S. military forces to begin air strikes against the Federal Republic of Yugoslavia (Serbia and Montenegro) in cooperation with the NATO-led operation. The strike was ordered in response to Yugoslavia's campaign of violence against ethnic Albanians in the province of Kosovo. On June 3, 1999, Yugoslavia agreed to a peace plan calling for withdrawal of Yugoslav forces from Kosovo to include an international peacekeeping force. On June 10, 1999, NATO air strikes were halted, and Yugoslav forces withdrew their military forces from Kosovo by June 20, 1999.", "Congress, while not authorizing directly, and in advance, this military action, introduced and voted on several legislative measures related to deployment of U.S. military forces for combat or peacekeeping in the Balkan region. The House adopted H.Con.Res. 42 on March 11, 1999, which authorized the President to send troops as peacekeepers; the Senate passed a non-binding resolution ( S.Con.Res. 21 ) on March 23, 1999, that expressed the sense of Congress that the President was authorized to conduct military air operations in cooperation with NATO allies against Yugoslavia. However, the House later defeated the Senate resolution, on April 28, 1999. Other House or Senate votes sent conflicting signals in addressing funding related to troop deployments in the region, declaration of war issues, and executive and congressional roles in sending U.S. military forces abroad. The following legislation is representative of what was introduced and voted on in the 106 th Congress.", "Related CRS products", "CRS Report R44979, Kosovo: Background and U.S. Relations , by Vincent L. Morelli.", "CRS Report R44955, Serbia: Background and U.S. Relations , by Vincent L. Morelli and Sarah E. Garding.", "CRS Report RL31053, Kosovo and U.S. Policy: Background\u00a0to\u00a0Independence , by Julie Kim and Steven Woehrel. ", "CRS Report RL30127, Kosovo Conflict Chronology: September 1998 - March 1999 , by Julie Kim. "], "subsections": []}, {"section_title": "Terrorist Attack against the United States Legislation (2001-Present)", "paragraphs": ["On September 11, 2001, terrorists attacked the United States with a coordinated series of aircraft hijackings and suicide crashes into populated buildings. Two airplanes crashed into the twin towers of the World Trade Center in New York City, causing their complete destruction. Another airplane crashed into the Pentagon near Washington, DC, and a fourth airplane crashed in southwestern Pennsylvania (near Shanksville) after passengers attempted to take control of the aircraft in order to prevent it from crashing into an important symbol of democracy and freedom, perhaps in the Washington, DC, area. Over 3,000 people lost their lives in these terrorist attacks.", "Consequently, on September 14, 2001, Congress passed a joint resolution, which \"authorizes the President to use all necessary and appropriate force against those nations, organizations, or persons he determines planned, authorized, committed, or aided the terrorist attacks that occurred on September 11, 2001, or harbored such organizations or persons, in order to prevent any future acts of international terrorism against the United States by such nations, organizations, or persons.\" It further states that the act is intended to constitute specific statutory authorization within the meaning of the War Powers Resolution. President George W. Bush signed the joint resolution into law on September 18, 2001. On October 9, 2001, President Bush reported in a letter to Congress that U.S. Armed Forces had begun combat action in Afghanistan against the Al Qaeda terrorists and their Taliban supporters starting at 12:30 p.m. (EDT) on October 7, 2001.", "Related CRS products", "CRS Report R43983, 2001 Authorization for Use of Military Force: Issues Concerning Its Continued Application , by Matthew C. Weed."], "subsections": []}, {"section_title": "Use of Force against Iraq (2002-2003)", "paragraphs": ["On October 10, 2002, after several days of debate, the House passed H.J.Res. 114 , which authorized the use of military force against Iraq. The Senate had considered its own measure, S.J.Res. 45 , beginning on October 3, but indefinitely postponed it, and instead passed H.J.Res. 114 on October 11, 2002. As enacted into law, the joint resolution provides authorization for the use of military force against Iraq and expresses support for the President's efforts to", "(1) strictly enforce through the United Nations Security Council all relevant Security Council resolutions regarding Iraq; and", "(2) obtain prompt and decisive action by the Security Council to ensure that Iraq abandons its strategy of delay, evasion, and noncompliance and promptly and strictly complies with all relevant Security Council resolutions.", "In addition, it authorizes the President to use the U.S. Armed Forces to (1) defend U.S. national security against the continuing threat posed by Iraq; and (2) enforce all relevant Security Council resolutions regarding Iraq. It directs the President, prior to or as soon as possible (but no later than 48 hours) after exercising such authority, to make available to the Speaker of the House of Representatives and the President pro tempore of the Senate his determination that", "(1) reliance on further diplomatic or peaceful means alone will not achieve the above purposes; and", "(2) acting pursuant to this joint resolution is consistent with the United States and other countries continuing to take necessary actions against international terrorists and terrorist organizations, including those who planned, authorized, committed, or aided the terrorist attacks of September 11, 2001.", "It declares that this section is intended to constitute specific statutory authorization for use of the Armed Forces, consistent with the requirements of the War Powers Resolution. Finally, it requires the President to report to Congress at least every 60 days on matters relevant to this resolution.", "The war with Iraq (Operation Iraqi Freedom) began on March 19, 2003, with an aerial attack against a location where Iraqi President Saddam Hussein was suspected to be meeting with top Iraqi officials. U.S. and British troops entered Iraq on March 20, 2003, and while the invasion encountered resistance, particularly in its early stages, U.S. forces had largely gained control of Baghdad by April 9, 2003. The northern cities of Kirkuk and Mosul fell shortly afterward, and on April 14, 2003, U.S. troops entered Tikrit, Saddam's birthplace and the last major population center outside coalition control. On April 15, 2003, President George W. Bush declared that \"the regime of Saddam Hussein is no more.\""], "subsections": []}, {"section_title": "War in Iraq and Afghanistan (2001-present)", "paragraphs": ["U.S. military operations against Al Qaeda and Taliban forces in Afghanistan proceeded pursuant to the 2001 Authorization for Use of Military Force from October 2001 onward. U.S. military operations in Iraq proceeded pursuant to the 2002 Authorization for Use of Military Force in Iraq from March 2003 onward. On March 25, 2003, President George W. Bush requested $74.8 billion in the FY2003 Emergency Supplemental for the ongoing military operations in Iraq, postwar occupation, reconstruction and relief in Iraq, and international assistance to countries contributing to the war in Iraq or the global war on terrorism. The cost of the continued U.S. presence in Afghanistan and additional funds for homeland security were also included. H.R. 1559 , enacted into law as P.L. 108-11 on April 16, 2003, provided $78.49 billion in funding for these purposes. The Senate passed H.R. 1559 in lieu of its version, S. 762 , by unanimous consent.", "On September 17, 2003, President Bush formally requested an additional $87 billion for the ongoing military operations and for reconstruction assistance in Iraq, Afghanistan, and elsewhere. H.R. 3289 (FY2004 supplemental appropriations for Iraq, Afghanistan, and the global war on terrorism) was enacted into law as P.L. 108-106 on November 6, 2003, providing $87.5 billion in funding. The House approved the conference agreement by a roll call vote on October 31, 2003, and the Senate approved the conference agreement by voice vote on November 3, 2003. Earlier, on October 17, 2003, the Senate had approved its own version of the measure, S. 1689 , but vitiated its passage and returned the bill to the Senate Calendar.", "Related CRS products", "CRS Report R45025, Iraq: Background and U.S. Policy , by Christopher M. Blanchard.", "CRS Report RL30588, Afghanistan: Post-Taliban Governance, Security, and U.S. Policy , by Kenneth Katzman and Clayton Thomas.", "CRS Report R41070, Al Qaeda and Affiliates: Historical Perspective, Global Presence, and Implications for U.S. Policy , coordinated by John W. Rollins."], "subsections": []}, {"section_title": "Revolution and Aftermath in Libya", "paragraphs": ["The 2011 uprising against Libyan dictator Muammar Qadhafi prompted calls for Western military assistance to the rebels, initially in the form of a no-fly zone to prevent regime aircraft from attacking rebel forces and civilians. As the revolt progressed, air strikes were conducted by U.S. and NATO forces against regime targets under Operation Odyssey Dawn and Operation Unified Protector. The Qadhafi government was overthrown and Qadhafi himself was killed, leading to the lifting of strict regime political control in Libya but also to an uncertain security environment in which rival militias competed in the absence of any strong central authority. U.S. military operations began in March 2011 and ended in October 2011. A September 11, 2012, armed attack on a U.S. diplomatic compound in Benghazi, Libya resulted in the deaths of four Americans, including the U.S. ambassador. ", "Related CRS products", "CRS Report RL33142, Libya: Transition and U.S. Policy , by Christopher M. Blanchard . "], "subsections": []}, {"section_title": "Uprising and Armed Conflict In Syria", "paragraphs": ["What began as protests, then an internal armed uprising in Syria in 2011 became a broader conflict, with various factions of Syrian rebels and foreign fighters joined in combat with each other as well as with the forces of the Asad regime, itself aided by fighters from outside Syria. In summer 2013 the Obama Administration announced that the U.S. intelligence community had determined \"with high confidence\" that the Asad regime had used chemical weapons attacks against its own people, resulting in mass casualties. The United States has been providing nonlethal materiel support to selected opposition groups, and a congressionally authorized U.S. train-and-equip program continues. See section below, \" Military Action against the Islamic State (IS, ISIS, ISIL) .\"", "Related CRS products", "CRS Report RL33487, Armed Conflict in Syria: Overview and U.S. Response , coordinated by Carla E. Humud."], "subsections": []}, {"section_title": "Military Action against the Islamic State (IS, ISIS, ISIL)", "paragraphs": ["One group rose to prominence in the fighting against the Assad regime: the self-proclaimed \"Islamic State\" (IS), also known as ISIS (Islamic State in Iraq and Syria) and ISIL (Islamic State in Iraq and the Levant). A lineal descendant or continuation of the insurgent group al-Qaeda in Iraq, some of its senior operatives gained experience fighting American forces in Iraq. Particularly noted for sophisticated online media releases and extremely brutal tactics, IS in its self-released videos showed numerous massacres and beheadings, including those of a number of captured Westerners. It made significant territorial gains in Syria and also in Iraq, where its forces captured refineries and banks, thereby acquiring a self-financing capacity. The Iraqi military suffered high personnel losses through casualties and desertions, as well as enormous losses of materiel.", "After a series of online releases depicting the beheadings of American captives of IS, and in the wake of the success of the IS campaign in Iraq and Syria, President Obama authorized a program of aid to anti-IS forces, particularly the Iraqi military and the Kurds. In cooperation with a coalition of allies, he ordered air strikes designed to assist Iraqi and Kurdish forces battling IS and degrade IS military capabilities.", "IS has suffered extensive territorial losses in the combined campaign and today controls far less territory in Syria and Iraq than at the height of its power, but the potential for terrorist acts committed by IS foreign fighters returning to their countries of origin is a matter of concern for antiterrorism and police authorities.", "Related CRS products", "CRS Report R43612, The Islamic State and U.S. Policy , by Christopher M. Blanchard and Carla E. Humud.", "CRS Report R43760, A New Authorization for Use of Military Force Against the Islamic State: Issues and Current Proposals , by Matthew C. Weed.", "CRS Report R44135, Coalition Contributions to Countering the Islamic State , by Kathleen J. McInnis.", "CRS In Focus IF10604, Al Qaeda and Islamic State Affiliates in Afghanistan , by Clayton Thomas."], "subsections": []}, {"section_title": "Hostilities in Yemen", "paragraphs": ["Beginning in March 2015, Saudi Arabia and a coalition of partner countries (including the United Arab Emirates, Bahrain, Kuwait, Egypt, Jordan, Morocco, Senegal, and Sudan) engaged in conflict in Yemen against the Ansar Allah/Houthi movement and followers of the late president of Yemen, Ali Abdullah Saleh. The United States has been providing logistical and intelligence support, for a time including air-to-air refueling. Refueling operations ended in early November 2018. Civilian casualties in the conflict have been a matter of concern and congressional debate, along with humanitarian conditions in general in Yemen.", "Related CRS Products", "CRS Report R43960, Yemen: Civil War and Regional Intervention , by Jeremy M. Sharp. ", "CRS Report R45046, The War in Yemen: A Compilation of Legislation in the 115th Congress , by Jeremy M. Sharp and Christopher M. Blanchard."], "subsections": []}, {"section_title": "Sources Consulted", "paragraphs": ["CRS Report R42738, Instances of Use of United States Armed Forces Abroad, 1798-2018 , by Barbara Salazar Torreon and Sofia Plagakis.", "CRS Report RL32492, American War and Military Operations Casualties: Lists and Statistics , by Nese F. DeBruyne.", "CRS Report RL31133, Declarations of War and Authorizations for the Use of Military Force: Historical Background and Legal Implications , by Jennifer K. Elsea and Matthew C. Weed.", "CRS Report R42699, The War Powers Resolution: Concepts and Practice , by Matthew C. Weed.", "Legislative Information System (LIS) of the U.S. Congress at http://www.congress.gov/ .", "Congressional Quarterly searchable online floor vote database at http://www.cq.com .", "Congressional Quarterly Almanac . Washington, CQ Press. Annual.", "CQ Weekly . Washington, CQ Press. Various issues. "], "subsections": []}]}}
{"id": "R45230", "title": "Agriculture and Related Agencies: FY2019 Appropriations", "released_date": "2019-05-08T00:00:00", "summary": ["The Agriculture appropriations bill funds the U.S. Department of Agriculture (USDA) except for the Forest Service. It also funds the Food and Drug Administration (FDA) and\u2014in even-numbered fiscal years\u2014the Commodity Futures Trading Commission (CFTC).", "Agriculture appropriations include both mandatory and discretionary spending. Discretionary amounts, though, are the primary focus during the bill's development. The largest discretionary spending items are the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); agricultural research; rural development; FDA; foreign food aid and trade; farm assistance program salaries and loans; food safety inspection; animal and plant health programs; and salaries and expenses for administering conservation programs.", "On February 15, 2019, Congress passed and the President signed the FY2019 Consolidated Appropriations Act (P.L. 116-6, H.Rept. 116-9). This action, more than four months into the fiscal year, followed three continuing resolutions and a 34-day partial government shutdown.", "The official discretionary total of the enacted FY2019 Agriculture appropriation is $23.03 billion, which is $35 million more than enacted in FY2018 (+0.2%) on a comparable basis that excludes the CFTC. The enacted total is $6.3 billion more than the Administration requested (+38%), $55 million more than was proposed in the House-reported bill (+0.2%), but $194 million less than in the Senate-passed bill (-0.8%).", "Among the primary differences that account for the overall $35 million discretionary increase for FY2019 over FY2018 are an increase in agricultural research (mostly for construction) by $387 million (+13%) to $3.4 billion, an increase in FDA appropriations by $269 million (+10%) to $3.1 billion, an increase in WIC funding by a net $200 million (accounting for changes in the amount of carryover balances rescinded and in the base appropriation), an increase in five other program areas by a combined $78 million, and a decrease in rural development by reducing extra appropriations that were made in FY2018 for water and wastewater programs (-$425 million) and rural broadband (-$475 million).", "The appropriation also carries $129 billion of mandatory spending that is largely determined in separate authorizing laws. The mandatory spending increased by $6 billion not because of congressional action this year but because of changing economic and program conditions. The annual change was mostly due to higher costs for crop insurance (+$6.5 billion), greater reimbursement for the Commodity Credit Corporation (+1.1 billion), and lower outlays for child nutrition (-$1.1 billion) and SNAP (-$0.5 billion). With mandatory and discretionary spending appropriations combined, the FY2019 agriculture total is nearly $152 billion.", "The Consolidated Appropriations Act and its underlying bills also contain policy provisions that affect how the appropriation is delivered. These provisions affect disaster programs, rural definitions, industrial hemp, animal regulations, nutrition programs, dietary guidelines, CFTC, and tobacco products.", "Sequestration on mandatory accounts\u2014a process that reduces federal spending through automatic across-the-board reductions\u2014also continues to affect agriculture spending."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Status of FY2019 Agriculture Appropriations", "paragraphs": ["Congress passed and the President signed the FY2019 Consolidated Appropriations Act on February 15, 2019 ( P.L. 116-6 , H.Rept. 116-9 ). This action, more than four months into the fiscal year, followed three continuing resolutions (CRs) and a 34-day partial government shutdown ( Table 1 ).", "In 2018, both the House and Senate Appropriations Committees reported FY2019 Agriculture appropriations bills ( H.R. 5961 on May 16, 2018, and S. 2976 on May 24, 2018). The Senate amended and passed its version as Division C of a four-bill minibus ( H.R. 6147 on August 1, 2018). In January 2019, during the partial government shutdown, the House passed various combinations of agriculture appropriations bills in an attempt to reopen the government ( H.R. 21 , H.R. 265 , H.R. 648 ). The Senate did not consider the measures until the Consolidated Appropriations Act moved in February 2019. See Figure 1 and Appendix B for more timeline context.", "The higher discretionary budget caps in the Bipartisan Budget Act of 2018 ( P.L. 115-123 ) facilitated development of the appropriation amounts. The official discretionary total of the enacted FY2019 Agriculture appropriation is $23.03 billion, $35 million more than was enacted in FY2018 (+0.2%; Table 2 ) on a comparable basis that excludes the Commodity Futures Trading Commission (CFTC). The enacted total is more than was proposed in the House-reported bill but less than in the Senate-passed bill.", "The appropriation also carries mandatory spending\u2014though that is largely determined in separate authorizing laws\u2014that totals nearly $129 billion. Thus, the overall total of the FY2019 Agriculture appropriation is about $152 billion."], "subsections": []}, {"section_title": "Scope of Agriculture Appropriations", "paragraphs": ["The Agriculture appropriations bill\u2014formally known as the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act\u2014funds all of USDA, excluding the U.S. Forest Service. It also funds the Food and Drug Administration (FDA) in the Department of Health and Human Services (HHS) and, in even-numbered fiscal years, CFTC.", "Jurisdiction is with the House and Senate Committees on Appropriations and their respective Subcommittees on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies. The bill includes mandatory and discretionary spending, but the discretionary amounts are the primary focus during the bill's development. The scope of the bill is shown in Figure 2 . ", "The federal budget process treats discretionary and mandatory spending differently: ", "Discretionary spending is controlled by annual appropriations acts and receives most of the attention during the appropriations process. The annual budget resolution process sets spending limits for discretionary appropriations. Agency operations (salaries and expenses) and many grant programs are discretionary. Mandatory spending \u2014though carried in the appropriation and usually advanced unchanged\u2014is controlled by budget rules during the authorization process. Spending for so-called entitlement programs is set in laws such as the 2018 farm bill and 2010 child nutrition reauthorizations.", "In the FY2019 Agriculture appropriations act, discretionary appropriations are 15% ($23 billion) of the $152 billion total. Mandatory spending carried in the act comprised $129 billion, about 85% of the total. About $106 billion of the $129 billion mandatory amount is attributable to programs in the 2018 farm bill. Some programs are not in the authorizing jurisdiction of the House or Senate Agriculture Committees, such as FDA, WIC, or child nutrition ( Figure 2 ).", "Within the discretionary total, the largest discretionary spending items are the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); agricultural research; rural development; FDA; foreign food aid and trade; farm assistance program salaries and loans; food safety inspection; animal and plant health programs; and salaries and expenses for the conservation programs ( Figure 2 ). ", "The main mandatory spending items are the Supplemental Nutrition Assistance Program (SNAP, and other food and nutrition act programs), child nutrition (school lunch and related programs), crop insurance, and farm commodity and conservation programs that are funded through USDA's Commodity Credit Corporation (CCC). SNAP is referred to as an \"appropriated entitlement\" and requires an annual appropriation. Amounts for the nutrition program are based on projected spending needs. In contrast, the CCC operates on a line of credit. The annual appropriation provides funding to reimburse the Treasury for the use of this line of credit."], "subsections": []}, {"section_title": "Recent Trends in Agriculture Appropriations", "paragraphs": ["Over time, changes by title of the Agriculture appropriations bill have generally been proportionate to changes in the bill's total discretionary limit, though some activities have sustained relative increases and decreases. Agriculture appropriations peaked in FY2010, declined through FY2013, and have been higher since then ( Figure 3 ). Comparisons to historical benchmarks, though, may be tempered by inflation adjustments ( Figure 4 ). In FY2018, USDA reorganization affected the placement of some programs between Titles I and II of the bill.", "The stacked bars in Figure 3 represent the discretionary authorization for each appropriations title. The total of the positive stacked bars is the budget authority in Titles I-VI. Prior to FY2018, it was higher than the official discretionary spending allocation (the blue line) because of the budgetary offset from negative amounts in Title VII (general provisions) and other scorekeeping adjustments that were negative, mostly due to limits on mandatory programs and rescissions."], "subsections": []}, {"section_title": "Action on FY2019 Appropriations", "paragraphs": [], "subsections": [{"section_title": "Administration's Budget Request", "paragraphs": ["The Trump Administration released its FY2019 budget request on February 12, 2018. USDA concurrently released its more detailed budget summary and justification, as did the FDA, and the independent agencies of the CFTC and the Farm Credit Administration (FCA). The Administration also highlighted some of the proposed reductions and eliminations separately. ", "From these documents, the congressional appropriations committees evaluated the request and began to consider their own bills in the spring of 2018. For accounts in the jurisdiction of the Agriculture appropriations bill, the Administration's budget proposed $17 billion, a 25% reduction from FY2018 ( Table 2 , Figure 3 ).", "The timing of the Administration's budget request for FY2019 preceded Congress enacting the final, omnibus FY2018 appropriation in March 2018. Therefore, amounts in the FY2018 column of the Administration's budget documents are based on FY2017 and the CR and are different from the enacted FY2018 levels that came later and as shown in this report."], "subsections": []}, {"section_title": "Discretionary Budget Caps and Subcommittee Allocations", "paragraphs": ["Budget enforcement for appropriations has both procedural and statutory elements. ", "The procedural elements are associated with the budget resolution and are enforced through points of order. Typically, each chamber's full Appropriations Committee receives a top-line procedural limit on discretionary budget authority, referred to as a \"302(a)\" allocation, from the Budget Committee via an annual budget resolution. The Appropriations Committees then in turn subdivide the allocation among their subcommittees, referred to as the \"302(b)\" allocations. ", "The statutory elements impose limits on discretionary spending in FY2012-FY2021 and are enforced through discretionary budget caps and sequestration (2 U.S.C. 901(c)). The Budget Control Act of 2011 (BCA, P.L. 112-25 ) set discretionary budget caps through FY2021 as a way of reducing federal spending. Bipartisan Budget Acts (BBAs) in 2013, 2015, and 2018 ( P.L. 113-67 , P.L. 114-74 , and P.L. 115-123 , respectively) have avoided sequestration on discretionary spending\u2014with the exception of FY2013\u2014by raising those caps. ", "In February 2018, the BBA raised the FY2019 cap on nondefense discretionary spending by $68 billion and the cap on defense spending by $85 billion. It also provided language to execute (or \"deem\") those higher caps for the appropriations process without following the usual procedures for an FY2019 budget resolution. ", "Under these higher caps and authorities, the House and Senate Appropriations Committees proceeded to mark up the FY2019 appropriations bills. The Agriculture appropriations bills are receiving roughly the same subcommittee allocation (\"302(b)\" allocation) in each chamber that was used to complete the FY2018 appropriation under the BBA. For FY2019, the subcommittee allocations for agriculture appropriations are", "House: $23.273 billion ( H.Rept. 115-710 , May 23, 2018), including the CFTC. Senate: $23.235 billion ( S.Rept. 115-260 , May 24, 2018), excluding the CFTC.", " Appendix A discusses budget sequestration and its effects on agriculture accounts. Sequestration of discretionary accounts occurred in FY2013. Sequestration on mandatory accounts began in FY2013, continues to the present, and has been extended by the Bipartisan Budget Acts."], "subsections": []}, {"section_title": "House Action", "paragraphs": ["The House Agriculture Appropriations Subcommittee marked up its FY2019 bill on May 9, 2018, by voice vote. On May 16, 2018, the full Appropriations Committee passed and reported an amended bill ( H.R. 5961 , H.Rept. 115-706 ) by a vote of 31-20 ( Table 1 , Figure 1 ).", "The $23.23 billion discretionary total in the House-reported FY2019 Agriculture appropriation would have been $14 million less than enacted in FY2018 (-0.1%; Table 2 , Figure 3 ). Generally speaking, the House-reported bill did not include most of the reductions proposed by the Administration and continued the trend of appropriations from prior years.", " Table 3 provides details at the agency level. The primary changes from FY2018 that comprised the relatively flat $14 million overall decrease in the House-reported bill\u2014recognizing that some amounts for certain program areas were in the General Provisions\u2014would have done the following:", "Increased base FDA appropriations by $308 million (+11%). However, it did not continue to separate FDA funding for the opioid crisis that was in the General Provisions title of the FY2018 appropriation (-$94 million). Increased agricultural research (+$79 million, +2.6%) by raising appropriations for the Agricultural Research Service (ARS) and National Institute of Agriculture (NIFA). Increased the Animal and Plant Health Inspection Service (APHIS) by $16 million (+1.7%). Increased the Rural Utility Service by $82 million (+13%), mostly due to higher base funding for rural water and waste disposal programs. However, the bill did not continue separate funding for rural water that was in the General Provisions title last year (-$500 million) or for telemedicine for the opioid crisis (-$20 million). It would have reduced separate funding for a broadband pilot program while continuing to fund some of it through the General Provisions title (-$50 million). Decreased discretionary appropriations for domestic nutrition assistance programs by reducing WIC by $175 million (-2.8%) and the commodity assistance programs by $15 million (-4.7%). However, the reduction scored in the General Provisions title by rescinding WIC carryover balances was smaller in FY2019, retaining more budget authority (+$500 million). Decreased the base funding in international food assistance Food for Peace grants by $100 million (-6.2%) and would not have continued the extra funding that was in the General Provisions title of the FY2018 appropriations (-$116 million).", "In addition to discretionary spending, the House-reported bill also carried funding for mandatory spending\u2014largely determined in separate authorizing laws\u2014that would have totaled $121.82 billion, about $936 million less than in FY2018 because of automatic changes in economic conditions and entitlement enrollment rather than any change from congressional action. Thus, the overall total of the House-reported bill was about $145 billion.", "As the 116 th Congress began in 2019 under a funding gap (see the heading \" Government Shutdown \"), the House passed various combinations of appropriations bills in an attempt to reopen the government. The Senate did not consider the measures and waited until a compromise for the Consolidated Appropriation Act moved in February 2019.", "On January 3, 2019, the House passed a six-bill full-year omnibus appropriation ( H.R. 21 ), with agriculture appropriations in Division C. With few exceptions, the bill for agriculture was essentially identical to the Senate-passed Agriculture appropriations bill from the 115 th Congress (Division C of H.R. 6147 ; see under the heading \" Senate Action \"). On January 10, 2019, the House passed H.R. 265 , a stand-alone Agriculture appropriations bill. On January 23\u2014two days before agreement for a third CR reopened the government\u2014the House passed H.R. 648 , another six-bill omnibus appropriation with Agriculture appropriations in Division A."], "subsections": []}, {"section_title": "Senate Action", "paragraphs": ["The Senate Agriculture Appropriations Subcommittee initially marked up a FY2019 bill on May 22, 2018, by voice vote. On May 24, the full committee passed and reported an amended bill ( S. 2976 , S.Rept. 115-259 ) by a vote of 31-0. On August 1, 2018, the Senate passed a four-bill minibus ( H.R. 6147 ) by a vote of 92-6, with agriculture as Division C ( Table 1 , Figure 1 ).", "The discretionary total of the Senate-passed bill was also $23.23 billion. However, the Senate bill's total would have been $229 million more than enacted in FY2018 (+1%) on a comparable basis that excludes the CFTC, since the latter was part of the enacted FY2018 appropriation. The Senate-passed bill would have provided about $250 million more than the House-reported bill on a comparable basis that subtracted CFTC from the House bill.", " Table 3 provides details at the agency level. The primary changes from FY2018 at the agency level that comprised the Senate-passed bill's overall $228 million increase were the following: ", "Increased base FDA appropriations by $159 million (+6%). Like the House bill, it would not have continued separate FDA funding for the opioid crisis that was in the General Provisions title of the FY2018 appropriation (-$94 million). Increased APHIS by $19 million (+1.9%), slightly more than the House bill. Decreased discretionary appropriations for domestic nutrition assistance programs by reducing WIC by $25 million (-0.4%). This was a smaller reduction than in the House bill. In the rescissions in the General Provisions title, the reduction was smaller than was rescinded in FY2018 (+$400 million). Nonetheless, the Senate bill's rescission was greater than in the House bill. Increased international nutrition assistance by raising the base funding for Food for Peace grants by $116 million (+7.2%). The extra funding that was in the General Provisions title of the FY2018 appropriations was not continued (-$116 million). Decreased funding for the four agricultural research agencies by $44 million (-1.4%), mostly by providing no funding for ARS building and facilities (-$141 million), while increasing ARS salaries and expenses (+$98 million). Decreased the extra funding for rural development compared to the amount provided in the FY2018 General Provisions (-$100 million for rural water, -$175 million for broadband). Base funding for rural development was unchanged overall.", "The Senate-passed bill's mandatory spending was virtually identical to that of the House-reported bill ($121.82 billion). Its overall total of discretionary and mandatory appropriations was $145 billion."], "subsections": []}, {"section_title": "Continuing Resolutions", "paragraphs": ["In the absence of a final FY2019 agriculture appropriation at the end of FY2018, Congress enacted three CRs to continue government operations. ", "The first CR was from October 1, 2018, through December 7, 2018 ( P.L. 115-245 , Division C). The second CR continued temporary funding through December 21, 2018 ( P.L. 115-298 ). A 34-day funding gap (partial government shutdown) occurred between the second and third CRs (see the heading \" Government Shutdown \" for more discussion of the funding lapse). To end the government shutdown, Congress passed and the President signed a third CR ( P.L. 116-5 ) that covered the period from January 26, 2019, through February 15, 2019. At the end of the third CR, an omnibus appropriation was enacted to cover the rest of the fiscal year (see the heading \" FY2019 Consolidated Appropriations Act \").", "In general, a CR continues the funding rates and conditions that were in the previous year's appropriation. The Office of Management and Budget (OMB) may prorate funding to the agencies on an annualized basis for the duration of the CR through a process known as apportionment. For the 81 days (22%) of FY2019 through December 21, 2018, and the 21 days of the third CR that preceded February 15, 2019, the CRs", "continued the terms of the FY2018 Agriculture appropriations act (Section 101 of P.L. 115-245 ) and excluded the FY2018 change in mandatory program spending (CHIMP) on the Biomass Crop Assistance Program, which was not authorized for FY2019; and provided sufficient funding to maintain mandatory program levels, including for nutrition programs (Section 110)\u2014this is the standard approach taken in recent years' CRs, but it was additionally important for SNAP, because some authorizations in the 2014 farm bill began expiring after FY2018.", "CRs may adjust prior-year amounts through anomalies or make specific administrative changes. Five anomalies specifically applied to the agriculture appropriation during the CRs:", "Child Nutrition Pro grams: apportionment for a summer foods program that allowed it to be operational by May 2019 (Section 114 of P.L. 115-245 ). R ural Utilities Service: allowed a loan authorization level for the Rural Water and Waste Disposal program of $4.141 billion (Section 115). Commodity Credit Corporation ( CCC ): allowed CCC to receive its appropriation to reimburse the Treasury for a line of credit about a month earlier than usual, prior to a customary final report and audit. Many farm bill payments to farmers were due in October 2018 in addition to USDA's plan to make supplemental payments under a trade assistance program. Without the anomaly, CCC might have exhausted its $30 billion line of credit (Section 116). Agricultural Research Service : provided an additional $42 million for operations and maintenance at the National Bio and Agro-Defense Facility (NBAF) being built in Manhattan, Kansas, and its transfer to USDA from the Department of Homeland Security (Section 117). Department of Homeland Security (DHS) : allowed DHS to transfer up to $15 million to USDA to support NBAF operations (Section 125)."], "subsections": []}, {"section_title": "Government Shutdown", "paragraphs": ["When an appropriation (or CR) expires and no further budget authority has been provided, a funding gap exists, which may cause operations to cease at affected agencies. In general, the Antideficiency Act (31 U.S.C. 1341 et seq. ) prohibits federal agencies from obligating funds before an appropriations measure has been enacted. Exceptions may allow certain activities to continue, such as for law enforcement, protection of human life or property, and activities funded by other means such as carryover funds or user fees. Programs that are funded by other authorities\u2014such as entitlements or the mandatory programs in the farm bill\u2014may also be affected if the program is executed using personnel whose salaries are funded by discretionary appropriations that are affected by the funding gap.", "For FY2019, a 34-day funding gap lasted from December 22, 2018, through January 25, 2019. It affected agencies within the jurisdiction of seven of the 12 appropriations bills, including Agriculture appropriations. On December 19, 2018, the Senate had passed H.R. 695 , a CR that would have continued temporary funding through February 8, 2019, but the House-passed amendment to that bill on December 20 added homeland security funding for construction of physical barriers at borders and supplemental appropriations for natural disasters that the Senate did not accept. ", "Prior to FY2019, the previous shutdown was a two-day, weekend shutdown in January 2018, and before that a 16-day shutdown in October 2013. Before that, the next previous multiday shutdown occurred in FY1996, though agriculture appropriations were not affected that year because a stand-alone full-year Agriculture appropriation had been enacted.", "In general, a shutdown results in the furlough of many personnel and curtailment of affected agency activities and services. Agencies make their own determinations about activities and personnel that are \"excepted\" from furlough and publish their intentions in \"contingency plans\" that are supervised by OMB. For agencies in the Agriculture appropriations jurisdiction, shutdown or contingency plans were published for USDA, FDA, and the CFTC. ", "Generally, government employees of affected agencies do not receive pay during a shutdown. Excepted employees may be required to report to work but do not receive their current pay. Exempt employees may receive paychecks during the shutdown from a separately authorized funding source that remains available. On January 16, 2019, the President signed P.L. 116-1 to guarantee back pay to furloughed and excepted employees after the government shutdown ended."], "subsections": [{"section_title": "Agency Exceptions to Maintain Operations", "paragraphs": ["USDA initially estimated on December 23, 2018, that 61% of its employees were excepted from furlough in the agencies that are funded by Agriculture appropriations (all of USDA except the Forest Service), which numbered 37,860 staff being excepted out of 62,288. In general, the number of excepted and furloughed personnel varies by agency and may change as a shutdown continues as funding availability changes and as new circumstances arise. A summary of how the shutdown affected the operation of different agencies between December 22, 2018, and January 25, 2019, follows: ", "Nearly 90% of staff in the Food Safety and Inspection Service and Agricultural Marketing Service were initially retained to continue food safety inspections of meat and poultry at processing plants and to continue commodity grading and inspection services (8,434 and 3,944 staff, respectively). About 69% of the Animal and Plant Health Inspection Service was excepted (5,456 staff) to continue preclearance inspection for transportation between Hawaii and Puerto Rico and the mainland and to carry out quarantine and certification for imports and exports. Resources in research laboratories and facilities that could be damaged by inattention were protected by excepting 18% (1,116 staff) of the Agricultural Research Service. The Farm Service Agency (FSA) initially excepted 7,589 staff (72% out of 10,479) through December 28 but then closed county offices, thereby lowering the number of excepted employees to 27 (0.3%). As the shutdown continued, FSA announced on January 16, 2019, that it would recall about 2,500 employees to reopen FSA county offices for three days (January 17-18 and January 22). On these days, FSA provided administrative services to farmers mostly related to past activities that were obligated, including issuing tax documents, but was not to process new program applications. On January 22, USDA further announced that as the shutdown continued, FSA offices would remain open on a full-time basis (with excepted staff) from January 24 to February 8 and three days per week thereafter. This latter plan was not implemented because the shutdown ended on January 25. All 9,342 staff of the Natural Resources Conservation Service (NRCS) was exempted by using carryover funding and mandatory funding authorized in the 2014 farm bill. Near the end of the shutdown, NRCS had begun preparations to furlough much of its agency beginning on February 3, 2019, after having retained 100% of the agency since the beginning of the shutdown. By beginning to furlough some employees, NRCS intended to conserve carryover balances and focus exempted staff on carrying out certain mandatory farm bill programs. This plan was not implemented because the shutdown ended on January 25. Most of USDA's Food and Nutrition Service (FNS) programs, whether mandatory or discretionary, rely on funding provided in appropriations acts. FNS program operations during a government shutdown vary based on the different programs' available resources, determined by factors such as contingency or carryover funds and terms of the expired appropriations acts, as well as USDA's decisionmaking. Beginning in late December 2018, FNS released program-specific memoranda to states and program operators describing the status of different nutrition assistance programs during the current funding lapse. SNAP benefits for January were issued as scheduled, and on January 8 USDA announced that the expired CR allowed for an early distribution of February benefits so long as benefits were issued on or before January 20.", "Among the related agencies that are funded in Agriculture appropriations:", "FDA initially retained 59% of its employees in excepted status (10,344 staff out of 17,397) based on a combination of factors including carryover funding, the need to safeguard human life, and the protection of property. For food safety inspection specifically, FDA excepted 135 employees for inspection of food facilities deemed to have the highest risk to public health. Inspections of other facilities were postponed. CFTC excepted 9% of its employees (61 staff out of 673) to address risks that could pose a threat to the functioning of the stock market and commodity markets and that could affect the safety of human life or the protection of property."], "subsections": []}, {"section_title": "Suspended Activities", "paragraphs": ["While a number of selected USDA functions may have continued during the shutdown, many others ceased operations. Examples of USDA functions that were not performed by furloughed employees included data collection and analysis that informs the commodity markets; development of regulations to implement the new farm bill that was enacted in December 2018; completing the Administration's \"trade aid\" payments; approving loan guarantees for commercial banks; processing and funding direct farm loans, rural development loans, and grant programs (rural housing, community facilities, rural water, rural business, and broadband); agricultural research programs and grants; and many international assistance programs."], "subsections": []}]}, {"section_title": "FY2019 Consolidated Appropriations Act", "paragraphs": ["On February 15, 2019, Congress passed and the President signed the FY2019 Consolidated Appropriations Act ( P.L. 116-6 , H.Rept. 116-9 ). The agriculture portion is Division B of the act.", "The official discretionary total of the Agriculture appropriation is $23.03 billion, which is $35 million more (+0.2%) than was enacted for FY2018 on a comparable basis that excludes the CFTC from the FY2018 total ( Table 2 ). On that same comparable basis, the enacted total is $6.3 billion more than the Administration requested (+38%), $55 million more than was proposed in the House-reported bill (+0.2%) but $194 million less than in the Senate-passed bill (-0.8%). ", "The appropriation also carries mandatory spending that totals nearly $129 billion, which is determined in other authorizing laws. Thus, the overall total of the FY2019 Agriculture appropriation is about $152 billion ( Figure 2 ).", " Table 3 summarizes appropriations amounts at the agency level. The primary changes that account for the overall $35 million discretionary increase in the FY2019 Consolidated Appropriations Act are the following: ", "Increase in the four agricultural research agencies in Title I by $387 million (+13%) to $3.4 billion, mostly by increasing ARS building and facilities by $241 million, ARS salaries and expenses by $100 million, and NIFA by $64 million. Increase in base FDA appropriations in Title VI by $269 million (+10%) to $3.1 billion (excluding user fees) while not renewing extra funding in general provisions (Title VII) that was in the FY2018 appropriation for opioid enforcement and surveillance (-$94 million reduction to the budget score). Increase in WIC funding by a net $200 million, accounting for changes in rescissions of carryover balances and in the base appropriation. In FY2019 $500 million is rescinded from carryover balances, smaller than the rescission of $800 million in FY2018, for a comparative $300 million increase. The base WIC appropriation in Title IV is reduced by $100 million to $6.075 billion. Also, appropriations for nutrition program administration is increased by $11 million. Increase in APHIS by $29 million (+3%) to $1.014 billion. Maintain Food for Peace appropriations effectively at $1.716 billion by decreasing the base appropriation in Title V by $100 million and increasing extra funding in Title VII by $100 million. Also, salaries and expenses for the Foreign Agricultural Service are increased (+14 million). Maintain overall discretionary farm production and conservation funding in Title II (+0.5%, +$13 million) while shifting some administrative funding from program agencies into a new administrative business center. Decrease in the effective amount for rural development by essentially maintaining its base appropriation in Title III (+0.4%, +$11 million) and reducing extra appropriations that were made in the FY2018 general provisions (Title VII) for water and wastewater programs (-$425 million) and rural broadband (-$475 million). Decrease in the budgetary offset provided by other scorekeeping adjustments, mostly from smaller negative subsidies that are provided by farm and rural development loan programs. In FY2018, $481 million was offset. In FY2019, $404 million is offset (+$77 million increase in the budget score). Also, mandatory spending (+$16 million) is increased by further reducing the effect of appropriations act CHIMPS.", "Mandatory spending carried in the Consolidated Appropriations Act increased by $6 billion over FY2018 to $129 billion and was higher than estimated for the House and Senate bills. The annual change was mostly due to higher costs for crop insurance (+$6.5 billion), greater reimbursement for the CCC (+1.1 billion), and lower outlays for child nutrition (-$1.1 billion) and SNAP (-$0.5 billion)."], "subsections": []}, {"section_title": "Policy-Related Provisions", "paragraphs": ["In addition to setting budgetary amounts, the Agriculture appropriations bill has also been a vehicle for policy-related provisions that direct how the executive branch should carry out the appropriation. These provisions may have the force of law if they are included in the text of the appropriation, usually in the General Provisions, but their effect is generally limited to the current fiscal year. In some instances, the provisions may amend the U.S. Code and have long-standing effects.", "The explanatory statement in the conference report that accompanies the final appropriation ( H.Rept. 116-9 ), and the House and Senate report language that accompanies the committee-reported bills ( H.Rept. 115-706 , S.Rept. 115-259 ), may also provide additional policy instructions. These documents do not have the force of law but often explain congressional intent, which the agencies are expected to follow. Indeed, the committee and conference reports may need to be read together to capture all of the congressional intent for the fiscal year:", "Congressional Directives. The explanatory statement is silent on provisions that were in both the House Report ( H.Rept. 115-706 ) and Senate Report ( S.Rept. 115-259 ) that remain unchanged by this conference agreement, except as noted in this explanatory statement. The conference agreement restates that executive branch wishes cannot substitute for Congress's own statements as to the best evidence of congressional intentions, which are the official reports of the Congress.... The House and Senate report language that is not changed by the explanatory statement is approved and indicates congressional intentions. The explanatory statement, while repeating some report language for emphasis, does not intend to negate the language referred to above unless expressly provided herein.", " Table 4 compares some of the major policy provisions that have been identified in the General Provisions (Title VII) of the FY2019 Agriculture appropriations bills and act. It excludes policies that may have been addressed in the report language or explanatory statement. Many of these provisions have been included in past years' appropriations laws.", "Appendix A. Budget Sequestration", "Sequestration is a process to reduce federal spending through automatic, largely across-the-board reductions that permanently cancel mandatory and/or discretionary budget authority. Sequestration is triggered as a budget enforcement mechanism when federal spending would exceed statutory budget goals. Sequestration is currently authorized by the Budget Control Act of 2011 (BCA; P.L. 112-25 ).", " Table A-1 shows the rates of sequestration that have been announced and the total amounts of budget authority that have been cancelled from accounts in Agriculture appropriations. Table A-2 provides additional detail at the account level for mandatory accounts.", "Discretionary Spending", "For discretionary spending, sequestration is authorized through FY2021 if discretionary defense and nondefense spending exceed caps that are specified in statute (2 U.S.C. 901(c)).", "In FY2013, the timing of the appropriations acts and the first year of sequestration resulted in triggering sequestration on discretionary spending. ", "In FY2014-FY2018, Bipartisan Budget Acts in 2013, 2015, and 2018 (BBAs; P.L. 113-67 , P.L. 114-74 , and P.L. 115-123 , respectively) have avoided sequestration on discretionary spending. These BBAs raised the discretionary budget caps that were placed in statute by the BCA and allowed Congress to enact larger appropriations than would have been allowed. ", "For FY2019, the BBA in 2018 similarly provides a higher discretionary cap that may avoid sequestration (see \" Discretionary Budget Caps and Subcommittee Allocations \").", "Mandatory Spending", "Authorization of Sequestration", "For mandatory spending, sequestration is presently authorized through FY2027, having been amended and extended by acts that were subsequent to the BCA (2 U.S.C. 901a(6)). That is, sequestration continues to apply annually to certain accounts of mandatory spending and is not avoided by the BBAs ( Table A-1 ).", "The original FY2021 sunset on the sequestration of mandatory accounts has been extended four times as an offset to pay for avoiding sequestration on discretionary spending in the near term or as a general budgetary offset for other authorization acts:", "1. Congress extended the duration of mandatory sequestration by two years (until FY2023) as an offset in BBA 2013. 2. Congress extended it by another year (until FY2024) to maintain retirement benefits for certain military personnel ( P.L. 113-82 ). 3. Congress extended sequestration on nonexempt mandatory accounts another year (until FY2025) as an offset in BBA 2015. 4. Congress extended sequestration on nonexempt mandatory accounts by another two years (until FY2027) as an offset in BBA 2018 ( P.L. 115-123 Division C, \u00a730101(c)). ", "Exemptions from Sequestration", "Some farm bill mandatory programs are exempt from sequestration. Those expressly exempt by statute are the nutrition programs (SNAP, the child nutrition programs, and the Commodity Supplemental Food Program) and the Conservation Reserve Program. Some prior legal obligations in the Federal Crop Insurance Corporation and the farm commodity programs may be exempt as determined by OMB. ", "Generally speaking, the experience since FY2013 is that OMB has ruled that most of crop insurance is exempt from sequestration, while the farm commodity programs, disaster assistance, and most conservation programs have been subject to it.", "Implementation of Sequestration", "Sequestration on nonexempt mandatory accounts continues in FY2019. Nonexempt mandatory spending is to be reduced by a 6.2% sequestration rate and thus paid at 93.8% of what would otherwise have been provided. This results in a reduction of about $1.5 billion from mandatory agriculture accounts in FY2019. ", "Appendix B. Action on Agriculture Appropriations, FY1996-FY2019"], "subsections": []}]}]}}
{"id": "RL30650", "title": "Senate Select Committee on Ethics: A Brief History of Its Evolution and Jurisdiction", "released_date": "2019-02-12T00:00:00", "summary": ["The U.S. Constitution provides each House of Congress with the sole authority to establish rules and punish and expel Members. From 1789 to 1964, the Senate dealt individually with cases of disciplinary action against Members, often forming ad hoc committees to investigate and make recommendations when acts of wrongdoing were brought to the chamber's attention. Events of the 1960s, including the investigation of Secretary to the Majority Robert G. \"Bobby\" Baker, for alleged corruption and influence peddling, prompted the creation of a permanent ethics committee and the writing of a Code of Conduct for Members, officers, and staff of the Senate.", "The Senate Select Committee on Ethics was first established in 1964. This bipartisan, six-member committee investigates alleged violations of the rules of the Senate and recommends disciplinary actions. In the 95th Congress (1977-1978), the Senate expanded the committee's jurisdiction and altered its procedures to implement revisions to the Senate Code of Official Conduct. Also, to reflect these changes the committee was renamed the Select Committee on Ethics.", "This report briefly outlines the background of ethics enforcement in the Senate, including the creation of the Select Committee on Standards and Conduct and the subsequent renaming of the committee as the Select Committee on Ethics. The report also provides a brief overview of the Senate Code of Conduct and on the Select Committee's current jurisdiction and procedures.", "For additional information on ethics in the Senate, please see CRS Report RL30764, Enforcement of Congressional Rules of Conduct: A Historical Overview, by Jacob R. Straus."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["To ensure that Members of Congress uphold high standards, the U.S. Constitution provides sole authority to establish rules and punish and expel Members to the House of Representatives and the Senate, respectively. Article I, Section 5, clause 2 provides that \"Each House may determine the Rules of its Proceedings, punish its Members for disorderly Behaviour, and, with the Concurrence of two thirds, expel a Member. \" ", "In the 18 th and 19 th centuries, the Senate used its authority to establish ethics rules and to punish individual Members sparingly. Former Senate historian Richard Baker observed that \"[f]or nearly two centuries, a simple and informal code of behavior existed. Prevailing norms of general decency served as the chief determinants of proper legislative conduct. \" During that time, Congress often dealt with ethics issues \"on a case-by-case basis, [and then] only with the most obvious acts of wrongdoing, those clearly 'inconsistent with the trust and duty of a member. '\" ", "Events in the early 1960s, including charges of corruption and influence peddling against Secretary to the Majority Robert G. \"Bobby\" Baker, prompted the Senate Committee on Rules and Administration, which had jurisdiction over \"[m]atters relating to the payment of money out of the contingent fund of the Senate or creating a charge upon the same,\" to hold hearings on financial and business activities of current and former Members, officers, and employees of the Senate.", "This report examines the history and evolution of the Senate Select Committee on Ethics, including the committee's jurisdiction and investigative procedure. It does not deal with changes to criminal law (as defined in Title 18, U .S. Code ), with criminal prosecutions of Members of Congress, or with the specifics of disciplinary cases in the Senate."], "subsections": []}, {"section_title": "Creating a Permanent Ethics Committee", "paragraphs": ["Prior to the 88 th Congress (1963-1964), no standard mechanism existed for discipline of Senators. During the 88 th Congress, the Senate created the first ethics committee, the Select Committee on Standards and Conduct. In the 95 th Congress (1977-1978), the Senate changed the committee's name to the Committee on Ethics."], "subsections": [{"section_title": "Select Committee on Standards and Conduct", "paragraphs": ["Ethics reform became more salient in the Senate after Secretary to the Majority Robert G. \"Bobby\" Baker resigned on October 8, 1963, following allegations that he had misused his official position for personal financial gain. Following Mr. Baker's resignation, the Senate agreed to a resolution (S.Res. 212) to \"inquire into the financial and business interests of any officer, employee, or former employee of the Senate.\" The resolution directed the Committee on Rules and Administration to conduct an investigation into current and former officers' and employees' financial and business interests. The resolution stated,", "Resolved , That the Committee on Rules and Administration or any duly authorized subcommittee thereof is authorized and directed to make a study and investigation with respect to any financial or business interests or activities of any officer or employee or former officer or employee of the Senate, for the purpose of ascertaining (1) whether any such interests or activities have involved conflicts of interest or other impropriety, and (2) whether additional laws, rules, or regulations are necessary or desirable for the purpose of prohibiting or restricting any such interests or activities. The Committee shall report to the Senate at the earliest practicable date the results of its study and investigation, together with such recommendation as it may deem desirable.", "Pursuant to the S.Res. 212, the Committee on Rules and Administration held a series of hearings to investigate the general business interests and activities of Senate officials and employees. In the report issued following the hearings, the committee recognized that serious allegations had been made against a former employee, and that no specific rules or regulations governed the duties and activities of Members, officers, or employees of the Senate. The committee also concluded that many of Baker's outside activities were in conflict with his official duties and made several recommendations, including adoption of public financial disclosure rules and other guidelines for Senate employees.", "Following the investigation into Mr. Baker, additions to the Senate rules\u2014calling for public financial disclosure reports and more controls on staff involvement with Senate campaign funds\u2014were introduced to implement the committee's recommendations.", "Additionally, the Committee on Rules and Administration considered the creation of a separate ethics committee. In a committee report on proposed amendments to Senate rules, Senator John Sherman Cooper discussed an amendment he proposed, but which did not pass the committee, to create a select committee on standards and conduct.", "I regret that a resolution which I offered was rejected by the majority party representation on the committee. The resolution which I offered would have established a select committee on standards and conduct, composed of six members, three from each of the parties, to be appointed by the President of the Senate. This committee would be authorized to receive complaints of unethical, improper, illegal conduct of members, officers, or employees of the Senate, to make investigation of allegations of such conduct, to propose rules and regulations, to give advisory opinions, and to make recommendations to the Senate regarding disciplinary action if required.", "I believe the establishment of such a committee made up of distinguished Members of the Senate would act as a deterrent upon possible violations, and in the exercise of jurisdiction, would have the confidence of the Senate and the public. I do not consider that such a special select committee should be considered as a policing committee, but one which, as I have said, would deter possible violations and deal with them with utmost dispatch and fairness.", "On July 1, 1964, Senator B. Everett Jordan filed a resolution (S.Res. 338) to amend the jurisdiction of the Committee on Rules and Administration and allow the committee", "to investigate every alleged violation of the rules of the Senate, and to make appropriate findings of fact and conclusions with respect thereto after according to any individual concerned due notice and opportunity for hearing. In any case in which the committee determines that any such violation has occurred, it shall be the duty of the committee to recommend to the Senate appropriate disciplinary action, including reprimand, censure, suspension from office or employment, or expulsion from office or employment.", "Consideration of S.Res. 338 began on July 24, 1964. During debate, Senator Cooper proposed an amendment similar to his proposed amendment in the Committee on Rules and Administration. The amendment proposed to remove jurisdiction over ethical issues from the Committee on Rules and Administration and create a permanent, bipartisan Select Committee on Standards and Conduct. In proposing his amendment, Senator Cooper summarized why he thought the Senate should create a select committee instead of granting disciplinary authority to the Committee on Rules and Administration.", "First, in the event that an investigation into the affairs of a Member of the Senate or an employee becomes necessary, it is to give assurance that the investigation would be complete and, so far as possible, would be accepted by the Senate and by the public as being complete.", "Second\u2014and this is important to all Members and to all employees of the Senate\u2014it is to provide that an investigation, which could touch their rights and their offices as well as their honor, would be conducted by a select committee which by reason of its experience and its judgment, would give assurance that their right and honor would be justly considered.", "Senator Cooper's amendment was adopted by a vote of 50 to 33. Subsequently, the Senate agreed to S.Res. 338, as amended, to create a Select Committee on Standards and Conduct and for the first time created a continuing internal disciplinary body. ", "Members of the Select Committee on Standards and Conduct were first appointed in July 1965, allowing the Committee on Rules and Administration to complete the Baker investigation. In October 1965, the committee elected a chair and vice chair, appointed its first staff, and began developing standards of conduct for the Senate."], "subsections": []}, {"section_title": "Select Committee on Ethics", "paragraphs": ["On March 11, 1975, Senator Adlai Stevenson introduced S.Res. 109 to \"establish a temporary select committee to study the Senate committee system.\" Agreed to in March 1976, the temporary select committee held hearings in July and September. Among items considered was the combination of the Select Committee on Standards and Conduct and the Committee on Rules and Administration. In a letter from Senator Howard Cannon, chair of the Select Committee on Standards, the ethics committee expressed opposition to this idea. In part, the letter read,", "The Select Committee on Standards and Conduct took note of the tentative decision of your Committee to recommend the consolidation of this Committee with the Committee on Rules and Administration. While we are mindful of the promised benefit of reducing the number of Committees which Senators must attend, we strongly believe that your decision would fatally damage any usefulness our Committee might have as well as to impugn any system of ethics in the Senate.", "By its very nature it is indispensable to an ethics committee of the Congress to be bipartisan in membership, to conduct any worthy investigation without control of its budget by any other committee, to be served by a nonpartisan staff, to advice and counsel with Senators, and to exercise prudent judgment in the conduct of its business. Consolidation of any ethics committee with a more-normal type of committee is likely to destroy all of these characteristics and to overwhelm any ethics identity. Unlike other committees, moreover, the Senate Committee on Standards and Conduct is mandated to directly assist the Senate in the discharge of a Constitutional responsibility.", "Subsequently, the temporary select committee recommended that the functions of the Select Committee on Standards and Conduct should be combined with the Committee on Rules and Administration.", "While no further action was taken by the 94 th Congress (1975-1976), the issue was readdressed during the 95 th Congress (1977-1978). In a report on S.Res. 4 , a resolution to amend the Senate committee system, the Committee on Rules and Administration rejected the idea of combining the Committee on Standards with the Committee on Rules and Administration and instead recommended establishment of a newly constituted bipartisan ethics committee to demonstrate to the public the \"seriousness with which the Senate views congressional conduct.\" ", "In February 1977, the Senate agreed to S.Res. 4 and created the permanent Select Committee on Ethics to replace the Select Committee on Standards and Conduct. Initially, membership on the new select committee was limited to six years. In the 96 th Congress (1979-1980), the Senate adopted S.Res. 271 , and removed the six-year service limitation."], "subsections": []}]}, {"section_title": "Senate Code of Conduct", "paragraphs": ["In the 1940s, public criticism regarding potential conflicts of interest by Members of Congress supplementing their income from speeches and outside activities led to concern over the lack of disclosure of Members' finances. In 1946, Senator Wayne Morse introduced the first public financial disclosure legislation to require annual, public financial disclosure reports by Senators (S.Res. 306). In remarks on the introduction of the resolution, Senator Morse defended Members' right to earn outside income, but believed that the American people were entitled to know about alternate income sources. Commenting on the resolution's purpose, Senator Morse stated,", "I may say that my resolution is bottomed upon the very sound philosophical principle enunciated by Plutarch that Caesar's wife must be above suspicion. Likewise, I feel that, so far as the public's evaluation of Members of the Senate is concerned, they must be above suspicion. Hence, I think my resolution which calls for the filing with the Secretary of the Senate of all sources and amounts of senatorial income is in keeping with the public's right to know what influences may possibly be brought to bear upon Members of the Senate in the performance of their legislative duties.", "No action was taken on Senator Morse's proposal.", "In 1958, Congress established the first Code of Ethics for Government Service (Code of Ethics). Initially proposed in 1951 by Representative Charles Bennett, the Code of Ethics was adopted following a House investigation of presidential chief of staff Sherman Adams, who was alleged to have received gifts from an industrialist being investigated by the Federal Trade Commission. The Code of Ethics for Government Service standards continue to be recognized as ethical guidance in the House and Senate. The Code of Ethics is not legally binding, however, because it was adopted by congressional resolution, not by law.", "In October 1965, as one of its first actions, the Select Committee on Standards and Conduct recommended rules of conduct for Members, officers, and employees of the Senate. In March 1968, the Select Committee on Standards and Conduct reported a resolution (S.Res. 266) making four additions to the Standing Rules of the Senate. After several days of debate, the Senate adopted a new code of conduct. The four areas covered by the new code of conduct were (1) outside employment of officers and employees, (2) raising and permissible uses of campaign funds, (3) political fund-raising activities of Senate staff, and (4) annual financial disclosures by senatorial candidates as well as Members, officers, and designated employees of the Senate."], "subsections": [{"section_title": "Formal Code of Conduct", "paragraphs": ["Following the Watergate scandal in the Nixon Administration, reforms \"such as electoral changes, designed to prevent the recurrence of the Watergate type of offense\" were initiated in the executive branch. Subsequently, the Senate began to examine their own activities and behavior. On January 18, 1977, Senate Majority Leader Robert Byrd and Minority Leader Howard Baker jointly introduced S.Res. 36 , to establish a temporary Select Committee on Official Conduct. As part of a larger discussion on raising salaries for all federal employees, Senator Baker expressed his belief that establishing a formal code of conduct was an essential piece of raising government salaries.", "The increase in compensation for Members of Congress will, no doubt, be considered and voted upon in the very near future. It is imperative, therefore, that prompt attention be given to questions relating to ethical conduct and financial disclosure.", "For this reason, the distinguished majority leader and I have agreed to propose the establishment of an ad hoc committee to study all questions relating to a Senate code of conduct. The committee will have 15 members, including a chairman and vice chairman, of which eight will be of the majority party and seven of the minority party. It will be instructed to study all matters relating to the standards and conduct of Members of the Senate and to make its report and recommendations no later than March 1.", "In this manner, Mr. President, I believe that the Senate can proceed to adoption of an equitable code of conduct as quickly as possible and with the benefit of the ad hoc committee's report.", "S.Res. 36 was adopted by unanimous consent.", "The Select Committee on Official Conduct held hearings in February 1977 and issued a final report on March 10. The Select Committee reported a resolution ( S.Res. 110 ) to amend the Code of Conduct and propose additions to the Standing Rules of the Senate (then numbered XLII to L), which would become the Code of Official Conduct. The proposed rules changes included the first public financial disclosure requirements for Senators and officers and employees of the Senate; limits on gifts, outside earnings, and the use of the frank; and prohibited unofficial office accounts and lame-duck foreign travel. There was also a provision prohibiting discrimination in staff employment.", "On April 1, 1977, S.Res. 110 was agreed to and the Select Committee recommendations were adopted.", "In 2007, pursuant to the Honest Leadership and Open Government Act, several sections of the Senate Code of Official Conduct were amended. These included placing restrictions on former Senators and senior staff who become federally registered lobbyists; requiring disclosure by Senators and staff of post-employment job negotiations; implementing protections against Senators from influencing hiring decisions based on political affiliation; and amending the Senate gift rules."], "subsections": []}, {"section_title": "Current Code of Official Conduct", "paragraphs": ["The current Senate Code of Official Conduct can be found in Rules 34 through 43 of the Standing Rules of the Senate. Additionally, federal statutes contain numerous provisions which prohibit or restrict certain activities by Members and employees. Discussion of the prohibitions and restrictions pursuant to federal law are included in the Senate Ethics Manual . Table 1 provides a list of Standing Rules of the Senate that are included in the Code of Official Conduct."], "subsections": []}]}, {"section_title": "Jurisdiction", "paragraphs": ["Pursuant to S.Res. 338 (88 th Congress), the Select Committee on Standards and Conduct was given the authority to (1) investigate allegations of improper conduct which may reflect upon the Senate; (2) investigate violations of laws, rules, and regulations of the Senate relating to the conduct of Members, officers, and employees in their official duties; (3) recommend disciplinary action, when appropriate; and (4) recommend additional Senate rules to insure proper conduct. Following the creation of the Select Committee on Ethics, the Senate adopted S.Res. 110 (95 th Congress) and transferred the jurisdiction of the former Select Committee on Standards and Conduct and made the new committee responsible for enforcing and interpreting the Senate Code of Official Conduct."], "subsections": [{"section_title": "Additions to Jurisdiction", "paragraphs": ["Since 1973, several additions have been made to the Select Committee on Ethics' jurisdiction. The additions have included use of the frank, disclosure of intelligence material, acceptance of foreign gifts, administration of public financial disclosure forms, and enforcement of fair employment practices."], "subsections": [{"section_title": "Franking Privilege", "paragraphs": ["In 1973, Congress passed legislation ( P.L. 93-191 ) clarifying the proper use of the franking privilege by Members of Congress and authorizing the Select Committee on Standards and Conduct to provide assistance and counsel to Senators and staff on the use of the frank."], "subsections": []}, {"section_title": "Intelligence Information Disclosure", "paragraphs": ["When the Senate Select Committee on Intelligence was created in 1976, the Ethics Committee was given specific jurisdiction to investigate any unauthorized disclosure of intelligence information by a Senator, officer, or employee of the Senate and to report to the Senate on any substantiated allegation."], "subsections": []}, {"section_title": "Acceptance of Foreign Gifts", "paragraphs": ["In August 1977, following the enactment of P.L. 95-105 (FY1978 Foreign Relations Authorization Act), which amended the Foreign Gifts and Decorations Act of 1966, the Select Committee on Ethics was designated the \"employing agency\" for the Senate and was authorized to issue regulations governing the acceptance by Senators and staff of gifts, trips, and decorations from foreign governments."], "subsections": []}, {"section_title": "Public Financial Disclosure Forms", "paragraphs": ["In August 1979, the Select Committee on Ethics was given responsibility for administering the Senate public financial disclosure requirements contained in the Ethics in Government Act of 1978. Pursuant to amendments in the Ethics Reform Act of 1989, the Ethics Committee was named as the \"supervising ethics office\" for laws governing gifts to federal employees and gifts by employees to their supervisors."], "subsections": []}, {"section_title": "Fair Employment Practices", "paragraphs": ["In 1991, Title III (Government Employee Rights Act of 1991) of the Civil Rights Act of 1991 established the Senate Office of Fair Employment Practices. The Office of Fair Employment Practices was designed to adjudicate discrimination complaints and gave the Select Committee on Ethics jurisdiction to review, upon request, decisions of the office. In 1995, authority to review discrimination cases was transferred to the Office of Compliance with the passage of the Congressional Accountability Act (CAA). The Ethics Committee continues to have jurisdiction over disciplinary cases that could result from an Office of Compliance investigation under Senate Rule 42."], "subsections": []}, {"section_title": "Insider Trading and Financial Disclosure", "paragraphs": ["On April 4, 2012, the STOCK Act (Stop Trading on Congressional Knowledge Act) was passed to affirm that no exemption exists from \"insider trading\" laws and regulations for Members of Congress and congressional employees. Pursuant to the act, the Senate Select Committee on Ethics is required to ", "issue interpretive guidance of the relevant rules of each chamber, including rules on conflicts of interest and gifts, clarifying that a Member of Congress and an employee of Congress may not use nonpublic information derived from such person's position as a Member of Congress or employee of Congress or gained from the performance of such person's official responsibilities as a means for making a private profit.", "Pursuant to the STOCK Act, the Select Committee on Ethics has issued two sets of guidance on the implementation of the law. The first, issued on June 15, 2012, provided a summary of STOCK Act requirements for Senate Staff, reminders of periodic transaction and financial disclosure requirements, and disclosure forms. The second, issued on December 4, 2012, provided specific guidance on insider trading restrictions under securities laws and Senate ethics rules."], "subsections": []}]}, {"section_title": "Current Jurisdiction", "paragraphs": ["Pursuant to changes made since 1977, the Select Committee on Ethics currently has jurisdiction over the following areas:", "1. receive complaints and investigate allegations of improper conduct which may reflect upon the Senate, violations of law, violations of the Senate Code of Official Conduct, and violations of rules and regulations of the Senate, relating to the conduct of individuals in the performance of their duties as Members of the Senate, or as officers or employees of the Senate, and to make appropriate findings of fact and conclusions with respect thereto; 2. recommend, when appropriate, disciplinary action against Members and staff; 3. recommend rules or regulations necessary to insure appropriate Senate standards of conduct; 4. report violations of any law to the proper Federal and State authorities; 5. regulate the use of the franking privilege in the Senate; 6. investigate unauthorized disclosures of intelligence information; 7. implement the Senate public financial disclosure requirements of the Ethics in Government Act; 8. regulate the receipt and disposition of gifts from foreign governments received by Members, officers, and employees of the Senate; 9. render advisory opinions on the application of Senate rules and laws to Members, officers, and employees; 10. for complaints filed under the Government Employee Rights Act of 1991 respecting conduct occurring prior to January 23, 1996, review, upon request, any decision of the Senate Office of Fair Employment Practices; 11. develop and implement programs for Members, officers, and employees to educate them about standards of conduct applicable in the performance of their official duties; 12. \"conduct ongoing ethics training and awareness programs for Members of the Senate and Senate staff\"; and 13. issue an annual report on the number of alleged violations of Senate rules received from any source, including the number raised by a Senator or staff of the committee, and including the number of allegations dismissed or on which the committee took the specific actions."], "subsections": []}]}, {"section_title": "Procedure", "paragraphs": ["Procedures for the Select Committee on Ethics are established pursuant to S.Res. 338 (88 th Congress), as amended; P.L. 93-191 ; S.Res. 400 (94 th Congress); and 5 U.S.C. Section 7342. The Ethics Committee may initiate an inquiry or investigate allegations brought by Senators, Senate officers, Senate staff, or outside individuals and groups. While the committee does not have formal procedural requirements for filing a complaint, the committee can issue public statements regarding a specific inquiry. If the committee chooses not to issue a public statement, all allegations are treated confidentially and the committee has a practice of neither confirming nor denying that a matter is before the committee. \"Upon completion of its investigative process, the Committee may recommend to the Senate or party conference an appropriate sanction for a violation or improper conduct, including, for Senators, censure, expulsion, or party discipline and, for staff members, termination of employment.\"", "In 1977, the Senate agreed to S.Res. 110 , which created the Code of Official Conduct. Title II of S.Res. 110 amended S.Res. 338, the 1964 resolution that created the procedures of the Select Committee on Standards and Conduct, which became the Select Committee on Ethics. The amendments required the Select Committee to receive complaints and investigate alleged violations of the Senate Code of Official Conduct and to publish necessary regulations to implement the code. Title II also required the publishing of advisory opinions in the Congressional Record, if requested by specified individuals.", "Appendix A. Membership on the Senate Select Committee on Standards and Conduct, 1965-1976", "Created in the 89 th Congress (1965-1966), a total of 14 Senators served on the Senate Select Committee on Standards and Conduct prior to its being disbanded with the creation of the Senate Select Committee on Ethics in the 95 th Congress (1977-1978). Table A-1 provides a list of all Members who served on the Senate Select Committee on Standards and Conduct, their party affiliation, and their state. Majority party Members are listed first.", "Appendix B. Membership on the Senate Select Committee on Ethics, 1977-2019", "Created in the 95 th Congress (1977-1978), the Senate Select Committee on Ethics has had a total of 57 different members. Table B-1 provides a list of all Members who have served on the Senate Select Committee on Ethics, their party affiliation, and their state. Majority party Members are listed first."], "subsections": []}]}}
{"id": "R44668", "title": "The Temporary Assistance for Needy Families (TANF) Block Grant: A Legislative History", "released_date": "2019-04-02T00:00:00", "summary": ["The Temporary Assistance for Needy Families (TANF) block grant was created in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193). It was born out of the welfare reform debates that spanned four decades, from the 1960s through the 1990s. These debates focused on the Aid to Families with Dependent Children (AFDC) program, which provided federal funding for state-run programs delivering assistance to needy families with children, with most families receiving assistance historically being headed by single mothers who were not working. The welfare reform debates focused on whether and how much single mothers should be expected to work, and whether the program itself contributed to dependency by providing disincentives to work and raise children in two-parent families.", "In 1992, then-candidate Bill Clinton promised to \"end welfare as we know it.\" President Clinton submitted his welfare reform proposal to Congress in June 1994, but Congress did not take any action on it. A welfare reform proposal was included in the House Republican \"Contract with America\" document during the 1994 congressional campaign. This proposal would have altered, but not replaced, AFDC. Immediately after the 1994 congressional campaign, with Republicans taking control of both the House and the Senate, the new House leadership and Republican governors crafted a proposal to end AFDC and replace it with the TANF block grant. This proposal passed Congress as part of two separate pieces of legislation in 1995, but President Clinton vetoed both.", "In 1996, a revised proposal was offered and passed Congress. On August 22, 1996, President Clinton signed the 1996 welfare reform bill that ended AFDC and replaced it with TANF, a broad-purpose block grant to the states that helps fund a wide range of benefits, services, and activities to address the effects of, and root causes of, child poverty and economic disadvantage. Reflecting its origins in the welfare reform debates, most TANF policy revolves around the state programs of cash assistance and work programs that the block grant helps fund.", "Most TANF policies in effect in 2019 date back to the 1996 welfare reform law. The original funding provided in that law for TANF expired at the end of FY2002 (September 30, 2002), and most of the legislative activity since then has been to continue funding on a short-term basis. From FY2002 to FY2006, TANF was funded by a series of short-term extensions. There was one long-term extension of TANF funding\u2014The Deficit Reduction Act of 2005 (DRA, P.L. 109-171)\u2014which extended it from FY2006 through the end of FY2010. The DRA also made some changes to TANF work rules and established a program of competitive grants mostly to community-based organizations for healthy marriage and responsible fatherhood initiatives. Since the end of FY2010, TANF has again been funded by a series of short-term extensions. Most recently, it was extended through June 30, 2019, by the TANF Extension Act of 2019 (P.L. 116-4)."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Temporary Assistance for Needy Families (TANF) block grant was created by the 1996 welfare reform law, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 ( P.L. 104-193 ). It replaced the program of cash assistance for needy families that dated back to the New Deal, Aid to Families with Dependent Children (AFDC), and some of its related programs. The enactment of the 1996 welfare reform law was the culmination of a debate about how to overhaul programs providing cash assistance to needy families with children\u2014specifically, those headed by single mothers\u2014that spanned four decades: from the 1960s to the 1990s.", "The 1996 welfare law provided both program authority and funding (appropriations) for TANF through the end of FY2002. Most of the legislative activity on TANF since 2002 has been to extend the program funding and financing authority for TANF. Most of these extensions did not change TANF policy, though policy changes were included in extensions enacted in 2006, 2010, and 2012. The TANF Extension Act of 2019 ( P.L. 116-4 ) extended TANF funding through June 30, 2019.", "This report will begin with a brief overview of the history of the AFDC program and the welfare reform debates of the 1960s to the 1990s. That overview will be followed by a summary of the 1996 welfare reform law and the changes made since 1996. The report concludes with a detailed chronology of TANF legislation."], "subsections": []}, {"section_title": "Brief History of AFDC and the Welfare Reform Debates", "paragraphs": ["The modern form of cash assistance for needy families with children dates back to the Progressive Era of the early 1900s, and state- or locally funded mothers' pensions for \"fatherless\" families. The purpose of these programs was to permit these mothers to stay at home and care for their children. ", "Federal funding for these programs was first provided in the Social Security Act of 1935 (P.L. 74-271) through the Aid to Dependent Children (ADC) program, later renamed the Aid to Families with Dependent Children program (AFDC). Many of the later changes, and the welfare reform debates of the 1960s to the 1990s, focused on issues of work and whether providing cash to nonworking single mothers served as disincentives for both work and marriage. ", "However, the history of the ADC/AFDC program touched many other facets of the well-being of children and their families. ADC/AFDC provided federal funding for social services, medical assistance, child care, and foster care. These were later spun off into separate programs, with dedicated federal funding. While much of the focus of the welfare reform debates was on the single mother (custodial parent), ADC/AFDC policy also touched on noncustodial parents. The Child Support Enforcement (CSE) program was created, in great part, to reimburse states and the federal government for the costs of providing assistance to single mothers, and making noncustodial fathers responsible for these costs. CSE has evolved into a program that distributes child support payments collected from noncustodial parents to custodial parents, mostly to families that have never received or are no longer receiving cash assistance."], "subsections": [{"section_title": "The Early Years: 1930s to mid-1950s", "paragraphs": ["The Social Security Act of 1935 (P.L. 74-271) created the social insurance programs of Old Age Benefits and unemployment compensation, where workers earned protection against lost wages because of old age and involuntary unemployment. It also created federal funding for state programs providing assistance for low-income aged persons, blind persons, and programs for needy families with children where one parent (usually the father) was unable to support the family. ", "The ADC program provided grants to the states to help finance programs to assist children who were \"deprived of parental support or care by reason of the death, continued absence from the home, or physical or mental incapacity of a parent\" and who lived with the other parent or a relative. States ran the program and determined eligibility for its benefits. The federal government provided funding for a portion of the expenditures made in state ADC programs. ", "The legislative history of the 1935 act explicitly stated that the purpose of ADC payments was to permit mothers to stay at home rather than work:", "The very phrases \"mothers' aid\" and \"mothers' pensions\" place an emphasis equivalent to misconstruction of the intention of these laws. These are not primarily aids to mothers but defense measures for children. They are designed to release from the wage-earning role the person whose natural function is to give her children the physical and affectionate guardianship necessary not alone to keep them from falling into social misfortune, but more affirmatively to rear them into citizens capable of contributing to society. ", "The 1935 Social Security Act left administration and many decisions about eligibility to the states. States also determined ADC benefit amounts.", "In the early years, families receiving ADC benefits were often headed by a widow or had a disabled father. However, over time the natures of both the program and the families it aided changed. The Social Security Amendments of 1939 (P.L. 76-379) added \"survivor\" benefits to the program of old age benefits, renaming it Old Age and Survivors Insurance. Survivor benefits, like old age benefits, were social insurance benefits earned through work in a covered job and paid to spouses and children upon the death of a worker or retiree. This provided an alternative, and more universal, means of aiding widows and their children. The Social Security Amendments of 1956 (P.L. 84-881) added Disability Insurance to Old Age and Survivor Insurance, with the combined program now commonly referred to as Social Security. The 1956 amendments also expanded the types of jobs covered by Social Security. These changes, too, provided more universal means of aiding the types of families that were originally assisted by ADC.", "The families receiving ADC increasingly were families where the father was alive but absent. The caseload also became increasingly nonwhite."], "subsections": []}, {"section_title": "The mid-1950s to the 1960s: Self-Sufficiency and Work", "paragraphs": ["The issue of whether single mothers should work was also much debated. The intent of ADC to allow single mothers to stay home and raise their children was often met with resistance at the state and local levels. It was also contrary to the reality that low-income women, particularly women of color, were sometimes expected to, and often did, work. Further, the increase in women's labor force participation in the second half of the 20 th century\u2014particularly among married white women\u2014eroded support for payments that permitted single mothers to remain at home and out of the workforce.", "The Social Security Amendments of 1956 (P.L. 84-881) added the goals of creating \"self-sufficiency\" and strengthening family life to ADC, along with funding for services that would seek to achieve these goals. ", "P.L. 87-31, enacted in 1961, first made cash assistance benefits available to families headed by two able-bodied parents at state option. This authority was temporary at first (in response to an economic downturn), but was later made permanent. In 1962, the program was renamed Aid to Families with Dependent Children. The 1962 amendments, the Public Welfare Amendments of 1962 (P.L. 87-543), also established a community work and training program for adult AFDC recipients, largely intended for men in two-parent families.", "The Social Security Amendments of 1967 (P.L. 90-248) enacted both financial incentives for adult recipients to work and, for the first time, requirements for AFDC mothers to work. These amendments required states to disregard from a family's countable income some earnings when determining its \"need\" and benefits. The amendments also created a new work program under AFDC\u2014the Work Incentive Program (WIN)\u2014that expanded the population served by an AFDC-related work program to women."], "subsections": []}, {"section_title": "The Late 1960s and 1970s: Negative Income Tax and Guaranteed Incomes", "paragraphs": ["The late 1960s marked the beginning of the welfare reform debates, with proposals put to Congress to completely replace AFDC with a different type of program. This occurred as AFDC's costs and the number of families receiving its benefits increased. In 1964, fewer than 1 million families received AFDC. By 1973, the AFDC rolls had increased to 3.1 million families.", "For the decade beginning in 1969, these proposals were based on the \"negative income tax\" (NIT) concept. The NIT proposals would have provided a guaranteed income to families who had no earnings (the \"income guarantee\" that was part of these proposals). For families with earnings, the NIT would have provided for a gradual reduction in the benefit as earnings increased. ", "President Nixon proposed to replace AFDC with an NIT-type program in 1969, the Family Assistance Plan (FAP). This proposal also would have nationalized the program, with the federal government paying the income guarantee and states able to supplement the federal guarantee with their own funds. This legislation was not enacted; it passed the House twice but never passed the Senate. In 1972, the Senate Finance Committee proposed to guarantee jobs\u2014rather than income\u2014for parents of school-age children. That proposal, too, did not ultimately pass. ", "President Carter also proposed an NIT-based cash assistance program coupled with a public service job program in 1977. President Carter's proposals died in committee (they were never reported to either the full House or Senate). A less ambitious proposal from President Carter in 1979 passed the House but did not pass the Senate."], "subsections": []}, {"section_title": "The 1980s: Devolution and Early Experiments", "paragraphs": ["The proposals to change AFDC made by President Reagan at the beginning of his Administration differed sharply from the earlier welfare reform proposals. They emphasized devolution to the states in decisionmaking, rather than nationalization. They also emphasized requirement to work, rather than work incentives. The Omnibus Budget Reconciliation Act of 1981 ( P.L. 97-35 ) limited the earnings disregard that was enacted in 1967, ending benefits for many who were on the rolls and working. It also gave states expanded authority to require recipients to engage in community service or work experience programs (unpaid work) in exchange for their AFDC benefit. In 1982, President Reagan proposed to completely devolve cash assistance for families with children. That proposal did not pass.", "In the 1980s, there was increasing attention to \"welfare dependency.\" Research at that time showed that while many mothers were on cash assistance for a short period of time, a substantial minority of mothers remained on the rolls for long periods. Additionally, policymakers began to focus on the possibility that a single mother who left welfare for work might be financially worse off than if she did not work and continued to collect benefits. Such a single mother, who might command relatively low wages in the labor force, risked losing medical assistance from Medicaid for herself and her children and faced work-related costs such as child care. ", "The Family Support Act of 1988 ( P.L. 100-485 ) established in AFDC the notion of mutual responsibility between the cash assistance recipient and the state. It created the Job Opportunities and Basic Skills (JOBS) Training program, which provided employment services, education, and training for cash assistance recipients. The Family Support Act also mandated that states provide benefits for two-parent families, though it was on more restrictive terms than those for single-parent families. ", "The Family Support Act also established the Transitional Medical Assistance (TMA) program that continued Medicaid coverage for a period of time for those who otherwise would have lost eligibility for Medicaid when moving from welfare to work. Further, it guaranteed child care for AFDC recipients engaged in work activities and provided time-limited (transitional) child care for those who left AFDC for work. Subsequent legislation, enacted in 1990, further expanded child care by creating a new block grant for those without a connection to AFDC, new matching funds to subsidize child care for those \"at risk\" of receiving AFDC, and a major expansion of the Earned Income Tax Credit (EITC).", "Additionally, an era of experimentation on \"welfare-to-work\" initiatives began in the 1980s. President Reagan proposed legislation in 1987 that would have authorized states to conduct demonstration projects that could have included AFDC and any other low-income assistance programs. These demonstrations would have been overseen at the federal level by an Interagency Low-Income Opportunity Board. Though the proposed legislation was not enacted, the Reagan Administration, and subsequently the Administrations of George H. W. Bush and Bill Clinton, issued waivers of AFDC requirements under another provision of law. The experimentation on \"welfare-to-work\" initiatives found that requiring participation in work or job preparation activities could effectively move single mothers off the benefit rolls and into jobs."], "subsections": []}, {"section_title": "1992 to 1996: \"Ending Welfare As We Know It\"", "paragraphs": ["The number of families receiving cash assistance had been fairly stable during the period from 1982 to 1988. However, beginning in the summer of 1989 the number of families receiving cash assistance began to increase once again."], "subsections": [{"section_title": "President Clinton's Proposal", "paragraphs": ["During the 1992 presidential campaign, then-candidate Bill Clinton promised to \"end welfare as we know it.\" He stressed time-limited aid and expanded financial supports for those who did go to work. The 1993 tax bill further expanded the EITC. ", "President Clinton made his welfare reform proposal in June 1994. It would have phased in a two-year limit on AFDC receipt without work, followed by required participation in a wage-paying work program after two years. It would also have expanded funding for training within the first two years. It was estimated to increase child care costs for participants in the JOBS program or the wage-paying work program. The proposal would have barred AFDC to unwed minor mothers.", "President Clinton's proposal was never considered by either the House or the Senate. However, during the period before the enactment of the 1996 welfare reform law, the Administration granted waivers of AFDC law to 43 states allowing them to engage in \"welfare reform\" demonstration projects. Some of these waivers were for small-scale demonstrations, but some were for statewide demonstrations of state-designed cash assistance and work programs. "], "subsections": []}, {"section_title": "The Contract with America", "paragraphs": ["Welfare reform was one of 10 legislative initiatives that was included in the \"Contract with America,\" developed by Republicans for the 1994 congressional campaign. The welfare proposal in the Contract with America would have required recipients to work after two years of AFDC (like the Clinton Administration proposal), but it also would have imposed a lifetime five-year limit on benefits. It would have barred AFDC to unwed minor mothers and would have imposed a \"family cap,\" not increasing benefits for new babies born into AFDC families. Funding for AFDC and child care would have been capped, with states given the option to receive AFDC as a block grant. "], "subsections": []}, {"section_title": "A Block Grant for Temporary Assistance to Needy Families", "paragraphs": ["H.R. 4 , as introduced at the start of the 104 th Congress, was the Contract with America proposal. However, immediately following the 1994 congressional election, House Republicans worked with several Republican governors to craft an alternative proposal that would block grant funding for AFDC and other social programs. The welfare reform legislation considered by House committees reflected the block grant proposals rather than the original H.R. 4 legislation. Legislation reported from the House committees was bundled into an omnibus welfare reform bill that included the end of AFDC and its replacement with TANF. That bill, the Personal Responsibility Act, substituting for the original text of H.R. 4 , passed the House on March 24, 1995. ", "H.R. 4 , as passed by the House, formed the basis for all later welfare reform bills considered and passed by the 104 th Congress. It would have", "replaced AFDC and related programs of Emergency Assistance, and the work and training program for AFDC recipients, with a block grant to the states for Temporary Assistance for Needy Families; allotted TANF basic block grant funds to states based on recent expenditures in AFDC and related programs; allowed states to spend their TANF grants on a broad range of benefits and services; gradually phased in a requirement that 50% of the caseload be either working or engaged in activities, but limited the ability of states to count education and training toward that target; the requirement could also be met, fully or partially, through caseload reduction (i.e., the caseload reduction credit); established a five-year lifetime limit on cash assistance; prohibited unwed minor parents from receiving cash assistance; prohibited states from increasing cash benefits when a new baby was born to a family already on the rolls (the family cap); and limited need-tested benefits for noncitizens in need-tested programs, including requiring that noncitizens be in the United States for five years before being eligible for TANF. ", "The House-passed bill also consolidated AFDC-related child care funding with the block grant created in 1990, and it increased funding for child care. However, it ended the guarantee that those transitioning from welfare-to-work be provided child care.", "The Senate Finance Committee ordered H.R. 4 reported in May 1995. The Finance Committee bill adopted a similar structure to the House bill. Different from the House bill, however, the Senate Finance Committee bill ", "would have continued a separate employment and training program; did not include a family cap; and did not include the prohibition on benefits to unwed minor parents. ", "Disputes about the committee-reported measure over items such as the distribution of funds held up consideration of the bill until August and September of 1995. Negotiations between party leaders in the Senate, Senator Robert Dole for the Republicans and Senator Thomas Daschle for the Democrats, produced an accord that also adopted the basic structure of the House bill but made some substantial modifications. The compromise bill included", "a requirement that states continue to spend some of their own funds (a \"maintenance of effort,\" or MOE requirement) in order to receive their full block grant funds; supplemental grants to states with high rates of population growth and/or low historical welfare spending per poor child; a contingency fund for states experiencing economic need; a provision to allow aid to unwed minor parents who were living in an adult supervised setting; and \"charitable choice\" provisions to permit increased participation of faith-based organizations in the delivery of welfare services.", "The Senate passed its version of H.R. 4 on September 19, 1995."], "subsections": []}, {"section_title": "Welfare Reform Added to the 1995 Budget Bill\u2014First Veto of Welfare Reform", "paragraphs": ["Following passage of welfare reform legislation in the Senate, both the House and Senate began the process of crafting legislation to implement the budget adopted for FY1996. On October 17, 1995, the House Budget Committee reported its budget reconciliation bill ( H.R. 2491 ), which included the end of AFDC and its replacement with TANF. It passed the House on October 26, 1995. The Senate version of the budget reconciliation bill also generally included the Senate-passed version of the TANF proposal, and it passed on October 28, 1995. Conferees came to an agreement on the budget reconciliation bill\u2014including the welfare reform provisions\u2014on November 17, 1995. The House- and Senate-approved conference agreement was vetoed by President Clinton on December 6, 1995. President Clinton's veto message highlighted his opposition to cuts to Medicare, Medicaid, the EITC, and child nutrition programs. The President said:", "On welfare reform, I strongly support real welfare reform that strengthens families and encourages work and responsibility. But the provisions in this bill, when added to the EITC cuts, would cut low-income programs too deeply."], "subsections": []}, {"section_title": "Final Agreement on H.R. 4 and Second Veto of Welfare Reform", "paragraphs": ["With the veto of the budget reconciliation bill, attention turned toward finalizing House-Senate agreements on the stand-alone welfare reform bill ( H.R. 4 ). A final conference report on H.R. 4 was filed on December 20, 1995. The final agreement included many of the modifications to TANF that were adopted in the Senate, including", "a compromise maintenance of effort requirement; supplemental grants to states with high population growth and/or low historical spending per poor child, but with limited funding; and a state option to impose a family cap.", "President Clinton vetoed H.R. 4 on January 9, 1996. In vetoing the bill, the President remarked:", "The final welfare reform legislation should provide sufficient child care to enable recipients to leave welfare to work; reward States for placing people in jobs; restore the guarantee of health coverage for poor families; require States to maintain their stake in moving people from welfare to work; and protect States and families in the event of economic downturn and population growth.", "The President also objected to budget cuts not related to the TANF proposal, such as provisions that would have cut spending in food stamps (now the Supplemental Nutrition Assistance Program), benefits for disabled children, benefits for noncitizens, school lunches, and foster care and adoption assistance."], "subsections": []}]}, {"section_title": "Legislation Action in 1996", "paragraphs": ["With welfare reform twice vetoed, the National Governor's Association (NGA) in February 1996 adopted a policy position asking for additional child care funds, additional contingency funds for recessionary periods, and bonus payments for states that meet certain employment outcomes. In May 1996, House and Senate Republicans introduced bills that reflected the policies of the vetoed H.R. 4 and provided additional funding for child care, the TANF contingency fund, and performance bonuses.", "H.R. 3734 , the budget reconciliation bill for that year, included these welfare reform provisions together with a proposal to revise Medicaid. H.R. 3734 passed the House on July 18, 1996. The Senate made a key modification to the bill by dropping its Medicaid provisions. The welfare reform provisions remained in H.R. 3734 , and it passed the Senate on July 23, 1996. A conference agreement on the bill was filed July 30, 1996; it passed the House on July 31, 1996, and the Senate on August 1, 1996. ", "President Clinton signed the legislation, known as the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA; P.L. 104-193 ), into law on August 22, 1996."], "subsections": []}]}, {"section_title": "Major Differences Between AFDC and TANF", "paragraphs": ["The 1996 welfare reform law repealed AFDC and some of its related programs and replaced it with the TANF block grant. Funding for the AFDC-related child care programs was consolidated into a separate funding stream dedicated to child care. Some things did not change with the 1996 law. As was the case with AFDC, TANF programs are run by states (and sometimes localities), and they determine the maximum benefits under the programs and set the income eligibility thresholds. ", " Table 1 summarizes some of the major differences between AFDC and TANF. It should be noted that at the time of enactment of the 1996 law many states were operating under waivers of the AFDC rules that related to cash assistance. These waivers imposed time limits, set different rules for counting earnings than did the AFDC federal rules, and set different rules for work or participation in job activities. TANF permitted states to continue programs operated under waivers, even if the provisions of the waiver were inconsistent with TANF rules. The last of these waivers expired in 2007."], "subsections": []}, {"section_title": "Overview of Post-1996 TANF Legislation", "paragraphs": [], "subsections": [{"section_title": "Balanced Budget Act of 1997", "paragraphs": ["The Balanced Budget Act of 1997 (BBA97, P.L. 105-33 ), enacted one year after the 1996 welfare reform law, made a number of changes to TANF. It created a program providing additional funding dedicated to financing work activities. The Welfare-to-Work Grant program (WTW) provided $3 billion for two years, FY1998 and FY1999. Under the program, funding was divided, with 75% provided to states and local workforce areas through a formula and 25% dedicated to competitive grants. The program was originally targeted at the hardest to serve population on TANF and similarly disadvantaged noncustodial parents. The WTW grant program was administered by the Department of Labor (DOL), not the Department of Health and Human Services (HHS), which administers TANF. Subsequent legislation relaxed requirements for targeting services to the hardest to serve, and as funds were spent more slowly than anticipated, the deadline for expenditures was extended.", "The BBA97 made several other permanent changes to TANF, including", "permitting a greater percentage of recipients to be counted as engaged in work through education and training, but retaining a limit on counting such participation; setting a statutory limit on transfers from TANF to the Social Services Block Grant at 10%; and making technical corrections to the 1996 welfare reform bill, including technical corrections to TANF."], "subsections": []}, {"section_title": "Attempts at Reauthorization: 2002-2005", "paragraphs": ["In February 2002, President George W. Bush made proposals for the reauthorization of the TANF block grant and related welfare reform proposals. The document, Working for Independence, outlined a five-year reauthorization that would have ", "funded the basic TANF block grant at the same level provided from FY1997 through FY2002 for an additional five years; provided mandatory child care funding through FY2007 at its FY2002 level (with no inflation or other adjustment over the period FY2003-FY2007); provided dedicated funding for grants to promote healthy marriage; raised the work participation standard to a minimum of 70% of families with a \"work-eligible individual\" that must be working or engaged in activities; required 40 hours per week of work or engagement in activities for full credit toward meeting the standard, but allowed for partial credit for hours less than 40 hours per week; allowed states to count rehabilitative activities for three months on the rolls, but narrowed the activities that counted after three months to work or community service or work experience; and ended the caseload reduction credit against the work standards, replacing it with a credit for recipients who left the rolls for work.", "The Bush Administration proposals were incorporated (with some modifications) into bills that passed the House in 2002 and 2003: H.R. 4737 (107 th Congress) and H.R. 4 (108 th Congress). A major difference between the Bush Administration proposal and the House proposals of 2002 and 2003 was that the House proposals retained the caseload reduction credit and provided extra credit to states that had large historical caseload reductions. Following House action, the Senate Finance Committee reported substantially differing versions of each bill. The Senate Finance Committee bills did not narrow the activities that could be counted toward the work participation standard after three months, and they expanded the ability of states to count participation in rehabilitative activities toward the TANF work participation standard. The Senate Finance Committee bills would have replaced the caseload reduction credit with a credit based on employed leavers, families diverted from the rolls, and families receiving work supports. The full Senate never acted on either of the Senate Finance Committee-reported bills.", "In the absence of reauthorization legislation, TANF program and funding authority was extended on a temporary basis 13 times from 2002 to 2006."], "subsections": []}, {"section_title": "The Deficit Reduction Act of 2005", "paragraphs": ["The early part of 2005 again saw committee action on legislation to reauthorize TANF. On March 9, 2005, the Senate Finance Committee ordered reported legislation that became S. 667 (109 th Congress). The following week, the House Ways and Means Committee's Subcommittee on Human Resources considered H.R. 240 and sent it to the full committee. However, further action on TANF reauthorization did not occur until the fall of 2005, when the House and Senate began considering legislation under the budget reconciliation process.", "The House passed as part of their reconciliation bill (the House amendment to S. 1932 ) the TANF reauthorization bills that essentially incorporated the proposals passed by the House in 2002 and 2003 and were contained in H.R. 240 . The Senate version of the reconciliation bill contained no TANF provisions.", "The conference report on the budget reconciliation bill included TANF provisions different from those that passed the House. The Deficit Reduction Act of 2005 (DRA, P.L. 109-171 ) included (1) a long-term extension of TANF funding, through the end of FY2010; (2) the elimination of performance bonuses to states; (3) the establishment of a $150 million fund for research and competitive grants on healthy marriage and responsible fatherhood, with $100 million per year for healthy marriage initiatives and $50 million per year for responsible fatherhood initiatives; and (4) changes to TANF work rules, such as counting caseload reduction only from 2005 (rather than 1995) toward the work participation standards, requiring HHS to define specific work activities that may count for each listed statutory work activity, and requiring that states verify work activities of recipients. The DRA also included an increase in mandatory child care funding from $2.717 billion per year to $2.917 billion per year.", "The conference report on the DRA passed the House on December 19, 2005. Congress finished reconciling differences between the two chambers in February 2006. President Bush signed the DRA into law as P.L. 109-171 on February 8, 2006."], "subsections": []}, {"section_title": "American Recovery and Reinvestment Act of 2009", "paragraphs": ["The economy entered into a recession after December 2007, with a major financial crisis and accelerating job loss occurring in late 2008. In response, the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5 ) passed Congress and was signed by President Obama. ARRA included tax cuts; unemployment insurance provisions; and extra funding for programs, including provisions to provide fiscal relief to states. ", "ARRA also included $5 billion for a new TANF Emergency Contingency Fund (ECF) available to be spent in FY2009 and FY2010. The ECF supplemented funding for the regular TANF contingency fund, which itself was depleted in early FY2010. The ECF reimbursed states for 80% of the cost of increased expenditures for basic assistance, short-term emergency aid, and subsidized employment. ARRA also temporarily froze the TANF caseload reduction credit at prerecession levels, through its application to the FY2011 work participation standards."], "subsections": []}, {"section_title": "TANF Legislation from 2010 to 2019", "paragraphs": ["The long-term extension of TANF enacted in the DRA expired at the end of FY2010 (September 30, 2010). Since then, Congress continued TANF program authority and funding through a series of short-term extensions. TANF extensions have been incorporated into stop-gap continuing resolutions or omnibus appropriations bills to fund all or most of the government, added to tax bills, added to unrelated legislation, or passed as stand-alone legislation. (As used in this report, stand-alone legislation represents laws enacted that addressed only TANF and related programs.) There were two gaps in funding for TANF during this period. Funding lapsed during broader \"government shutdowns\" in October 2013 and beginning in December 2018. States were permitted to draw on unspent, previously appropriated TANF funds to finance their TANF activities during the shutdown. ", "While many of the short-term extensions of TANF funding did not make changes to TANF policy, three extension laws did", "The Claims Resolution Act of 2010 (CRA, P.L. 111-291 ), a bill to settle claims against the federal government for certain Indian tribes, included a TANF extension through the end of FY2011. It also altered funding for the healthy marriage and responsible fatherhood programs, splitting the combined $150 million appropriation for them at $75 million for healthy marriage and $75 million for responsible fatherhood (it had previously been $100 million for healthy marriage and $50 million for responsible fatherhood). Additionally, the CRA required special one-time reports from the states on how they spend funds and on individuals with no reported hours of work participation. The CRA also provided funding for TANF supplemental grants only through June 30, 2011 (rather than September 30, 2011, the end of the fiscal year). Supplemental grants were not funded for the last quarter of FY2011, nor any fiscal year thereafter. The Middle Class Tax Relief and Job Creation Act of 2012 ( P.L. 112-96 ) extended TANF through the end of FY2012, and also permanently amended TANF law to require states to act to prevent cash assistance recipients from withdrawing their benefits at Automated Teller Machines (ATMs) at strip clubs, casinos, and liquor stores. The FY2017 Consolidated Appropriations Act ( P.L. 115-31 ) extended funding for the TANF block grant for the remainder of FY2017 and for FY2018. It also financed TANF-related research through a set-aside of 0.33% of the TANF basic block grant appropriation. This reduced the TANF basic block grant to each state by 0.33%. ", "In 2018, the House Ways and Means Committee reported legislation ( H.R. 5861 , 115 th Congress) that would have reauthorized and funded TANF for five years; revised TANF's work rules to measure employment outcomes rather than participation; required all assistance recipients to have an individualized plan; required that all TANF funds be spent on families with incomes at or below 200% of poverty; and required a minimum percentage of TANF funds to be spent on assistance, work activities, or short-term economic aid. The bill was not considered by the full House."], "subsections": []}]}, {"section_title": "Detailed Legislative Chronology", "paragraphs": [], "subsections": [{"section_title": "1996", "paragraphs": ["P.L. 104-193 , enacted August 22, 1996, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, established the block grant of Temporary Assistance for Needy Families. Funds for most TANF grants were appropriated through FY2002; supplemental grants and the TANF contingency fund were appropriated through FY2001. States were required to implement TANF, and accept their block grant funding, by July 1, 1997, though they could opt to implement earlier. ", "P.L. 104-327 , enacted October 19, 1996, amended the transition rule from the pre-TANF programs to TANF that limited total FY1997 federal funding for TANF and pre-TANF programs. It changed the limit on funding to the states for FY1997 from an amount equal to their basic block grant to an amount equal to their basic block grant plus, if they qualified, what they would have received from the TANF contingency fund. "], "subsections": []}, {"section_title": "1997", "paragraphs": ["P.L. 105-33 , enacted August 5, 1997, the Balanced Budget Act of 1997, raised the cap limiting the counting of education as work from 20% to 30% of those considered engaged in work, and temporarily removed from that cap teen parents engaged in education through FY1999; set the maximum allowable TANF transfer to Title XX social services at 10% of the block grant (rather than one-third of total transfers); and made technical corrections to P.L. 104-193 . P.L. 105-33 also established the Welfare-to-Work (WTW) grant program within TANF (funded at $3 billion over two years, FY1998 and FY1999), but administered by the Department of Labor at the federal level, with local administration by state workforce investment boards and competitive grantees. ", "P.L. 105-89 , enacted November 19, 1997, the Adoption and Safe Families Act, reduced the contingency fund appropriation by $40 million. "], "subsections": []}, {"section_title": "1998", "paragraphs": ["P.L. 105-178 , enacted June 9, 1998, the Transportation Act for the 21 st Century, permitted the use of federal TANF funds as matching funds for reverse commuter grants. It also set the statutory limit on TANF transfers to Title XX social services at 4.25% of the block grant. (Note that subsequent annual appropriation bills restored the 10% limit on TANF transfers to SSBG.) "], "subsections": []}, {"section_title": "1999", "paragraphs": ["P.L. 106-113 , enacted November 29, 1999, an omnibus appropriations act, broadened eligibility for recipients to be served by the WTW grant program and added limited authority for vocational education or job training to be WTW activities. "], "subsections": []}, {"section_title": "2000", "paragraphs": ["P.L. 106-554 , enacted December 21, 2000, an omnibus appropriation act, gave grantees two more years to spend WTW grant funds (for a total of five years from the date of the grant award). "], "subsections": []}, {"section_title": "2002", "paragraphs": ["P.L. 107-147 , enacted March 9, 2002, the Job Creation and Worker Assistance Act, extended the TANF supplemental grants and contingency funds, both of which had expired on September 30, 2001, through FY2002. Supplemental grants were extended at FY2001 levels. ", "P.L. 107-229 , enacted September 30, 2002, a short-term continuing resolution, extended TANF basic grants, supplemental grants, bonus funds, and contingency funds (and other related programs) through December 20, 2002.", "P.L. 107-294 , enacted November 22, 2002, a short-term continuing resolution, extended TANF and related funding through March 30, 2003."], "subsections": []}, {"section_title": "2003", "paragraphs": ["P.L. 108-7 , enacted February 20, 2003, an omnibus appropriations act, extended TANF and related funding through June 30, 2003.", "P.L. 108-40 , enacted June 30, 2003, a stand-alone bill, extended TANF and related funding through September 30, 2003. ", "P.L. 108-89 , enacted October 1, 2003, a multipurpose bill, included an extension of TANF and related funding through March 31, 2004. "], "subsections": []}, {"section_title": "2004", "paragraphs": ["P.L. 108-199 , enacted January 23, 2004, a consolidated appropriations bill, rescinded all remaining unspent WTW formula grant funds, effectively ending the WTW grant program.", "P.L. 108-210 , enacted March 31, 2004, a stand-alone bill, extended TANF and related funding through June 30, 2004.", "P.L. 108-262 , enacted June 30, 2004, a stand-alone bill, extended TANF and related funding through September 30, 2004.", "P.L. 108-308 , enacted September 30, 2004, a stand-alone bill, extended TANF and related funding through March 31, 2005."], "subsections": []}, {"section_title": "2005", "paragraphs": ["P.L. 109-4 , enacted March 25, 2005, a stand-alone bill, extended TANF and related funding through June 30, 2005.", "P.L. 109-19 , enacted July 1, 2005, a stand-alone bill, extended TANF and related funding through September 30, 2005.", "P.L. 109-68 , enacted September 21, 2005, allowed states to draw upon contingency funds to assist those displaced by Hurricane Katrina, allowing directly affected states to receive funds from the loan fund, with repayment of the loan forgiven, and suspending penalties for failure to meet certain requirements for states directly affected by the hurricane. It also temporarily extended TANF grants through December 30, 2005.", "P.L. 109-161 , enacted December 30, 2005, a stand-alone bill, extended TANF grants through March 30, 2006."], "subsections": []}, {"section_title": "2006", "paragraphs": ["P.L. 109-171 , enacted February 8, 2006, the Deficit Reduction Act of 2005, extended most TANF grants through FY2010 (supplemental grants were extended through the end of FY2008), eliminated TANF bonus funds, established competitive grants within TANF for healthy marriage and responsible fatherhood initiatives, revised the caseload reduction credit, and required HHS to issue regulations to define specific activities that count toward the TANF work participation standards as well as verify work and participation in activities."], "subsections": []}, {"section_title": "2008", "paragraphs": ["P.L. 110-275 , enacted July 15, 2008, the Medicare Improvements and Patients and Providers Act of 2008, included an extension of TANF supplemental grants through the end of FY2009."], "subsections": []}, {"section_title": "2009", "paragraphs": ["P.L. 111-5 , enacted February 17, 2009, the American Recovery and Reinvestment Act, established a $5 billion Emergency Contingency Fund (ECF) to reimburse states for increased costs associated with the Great Recession for FY2009 and FY2010. The fund reimbursed states, territories, and tribes for 80% of the increased costs of basic assistance, nonrecurrent short-term benefits, and subsidized employment. The law also permitted states to freeze caseload reduction credits at prerecession levels, allowed states to use TANF reserve funds for any benefit or service (it was previously restricted to assistance), and extended supplemental grants through the end of FY2010."], "subsections": []}, {"section_title": "2010", "paragraphs": ["P.L. 111-242 , enacted September 30, 2010, a short-term continuing resolution, extended TANF funding through December 3, 2010.", "P.L. 111-290 , enacted December 4, 2010, a short-term continuing resolution, extended TANF funding authority through December 18, 2010.", "P.L. 111-291 , enacted December 8, 2010, the Claims Resolution Act of 2010, extended basic TANF funding through the end of FY2011 (September 30, 2011) but provided supplemental grants only through June 30, 2011. It also altered funding for the healthy marriage and responsible fatherhood programs, splitting the combined $150 million appropriation for them at $75 million for healthy marriage and $75 million for responsible fatherhood. The act required some additional reporting on work activities and TANF expenditures."], "subsections": []}, {"section_title": "2011", "paragraphs": ["P.L. 112-35 , enacted September 30, 2011, the Short-Term TANF Extension Act, extended basic TANF funding for three months, through December 31, 2011. No funding was provided for TANF supplemental grants.", "P.L. 112-78 , enacted December 23, 2011, the Temporary Payroll Tax Cut Continuation Act of 2011, extended basic TANF funding for two months, through February 29, 2012."], "subsections": []}, {"section_title": "2012", "paragraphs": ["P.L. 112-96 , enacted February 22, 2012, the Middle Class Tax Relief and Job Creation Act of 2012, extended basic TANF funding for the remainder of FY2012 (to September 30, 2012). It also prevented electronic benefit transaction access to TANF cash at liquor stores, casinos, and strip clubs; states would be required to prohibit access to TANF cash at ATMs at such establishments. It also required states to report TANF data in a manner that facilitates the exchange of that data with other programs' data systems.", "P.L. 112-175 , enacted September 28, 2012, a continuing resolution providing funding for the first six months of FY2013, extended TANF funding through March, 2013."], "subsections": []}, {"section_title": "2013", "paragraphs": ["P.L. 112-275 , enacted January 14, 2013, the Protect Our Kids Act of 2012, appropriated $612 million to the TANF contingency fund for FY2013 and FY2014, and reserved $2 million from each of the two years' appropriations for the activities of a commission to examine child welfare fatalities.", "P.L. 113-6 , enacted March 26, 2013, an omnibus appropriations bill, extended TANF funding through the remainder of FY2013.", "P.L. 113-46 , enacted October 17, 2013, a short-term continuing resolution , extended TANF funding through January 15, 2014. (T h is resolution ended the government shutdown and a TANF funding gap from October 1, 2013, through October 16, 2013.)"], "subsections": []}, {"section_title": "2014", "paragraphs": ["P.L. 113-73 , enacted January 15, 2014, a short-term continuing resolution, extended TANF funding through January 18, 2014. ", "P.L. 113-76 , enacted January 17, 2014, a consolidated appropriations act, extended TANF funding for the remainder of FY2014 (through September 30, 2014).", "P.L. 113-164 , enacted September 19, 2014, a short-term continuing resolution, extended TANF funding through December 11, 2014. ", "P.L. 113-202 , enacted December 12, 2014, a short-term continuing resolution, extended TANF funding through December 13, 2014. ", "P.L. 113-203 , enacted December 13, 2014, a short-term continuing resolution, extended TANF funding through December 17, 2014. ", "P.L. 113-235 , enacted December 16, 2014, an omnibus appropriations act, extended TANF funding through September 30, 2015."], "subsections": []}, {"section_title": "2015", "paragraphs": ["P.L. 114-53 , enacted September 30, 2015, a short-term continuing resolution, extended TANF funding through December 11, 2015. ", "P.L. 114-96 , enacted December 11, 2015, a short-term continuing resolution, extended TANF funding through December 16, 2015.", "P.L. 114-100 , enacted December 16, 2015, a short-term continuing resolution, extended TANF funding through December 22, 2015.", "P.L. 114-113 , enacted December 18, 2015, a consolidated appropriations act, extended TANF funding for the remainder of FY2016 as part of an omnibus appropriations act."], "subsections": []}, {"section_title": "2016", "paragraphs": ["P.L. 114-223 , enacted September 29, 2016, a short-term continuing resolution, extended TANF funding through December 9, 2016. ", "P.L. 114-254 , enacted December 10, 2016, extended TANF funding through April 28, 2017."], "subsections": []}, {"section_title": "2017", "paragraphs": ["P.L. 115-30 , enacted April 28, 2017, extended TANF funding through May 5, 2017.", "P.L. 115-31 , the Consolidated Appropriation Act, 2017, enacted May 5, 2017, extended TANF funding for the remainder of FY2017 and through the end of FY2018. It provided that 0.33% of the funding in the TANF basic block grant pay for TANF-related research activities. This reduced the basic TANF block grant for each state by that percentage (0.33%). The act also required the Department of Health and Human Services, in consultation with the Department of Labor, to develop a database named \"What Works Clearinghouse of Proven and Promising Projects to Move Welfare Recipients into Work,\" to consist of research projects that deliver services to move TANF recipients into work."], "subsections": []}, {"section_title": "2018", "paragraphs": ["P.L. 115-245 , enacted September 28, 2018, a short-term continuing resolution, extended TANF funding through December 7, 2018.", "P.L. 115-298 , enacted December 7, 2018, a short-term continuing resolution, extended TANF funding through December 21, 2018."], "subsections": []}, {"section_title": "2019", "paragraphs": ["P.L. 116-4 , the TANF Extension Act of 2019, enacted January 24, 2019, a stand-alone TANF bill, extended TANF funding through June 30, 2019. (This legislation ended a TANF funding gap that occurred after the expiration of P.L. 115-298 on December 21, 2018.)"], "subsections": []}]}]}}
{"id": "R44148", "title": "Indian Water Rights Settlements", "released_date": "2019-04-16T00:00:00", "summary": ["In the second half of the 19th century, the federal government pursued a policy of confining Indian tribes to reservations. These reservations were either a portion of a tribe's aboriginal land or an area of land taken out of the public domain and set aside for a tribe. The federal statutes and treaties reserving such land for Indian reservations typically did not address the water needs of these reservations, a fact that has given rise to questions and disputes regarding Indian reserved water rights. Dating to a 1908 Supreme Court ruling, courts generally have held that many tribes have a reserved right to water sufficient to fulfill the purpose of their reservations and that this right took effect on the date the reservations were established. This means that, in the context of a state water law system of prior appropriations, which is common in many U.S. western states, many tribes have water rights senior to those of non-Indian users with water rights and access established subsequent to the Indian reservations' creation. Although many Indian tribes hold senior water rights through their reservations, the quantification of these rights is undetermined in many cases.", "Tribes have pursued quantification of their water rights through both litigation and negotiated settlements. The settlements involve negotiation between tribes, the federal government, states, water districts, and private water users, among others. They aim to resolve conflict between rights holders and allow the parties to determine specific terms of water allocation and use with certainty. Over the last 50 years, negotiated settlements have been the preferred course for most tribes because they are often less lengthy and costly than litigation. Additionally, many stakeholders have noted that these negotiated agreements are more likely to allow tribes not only to quantify their water rights on paper but also to procure access to these resources in the form of infrastructure and other related expenses, at least in some cases.", "After being negotiated, approval and implementation of Indian water rights settlements require federal action. As of 2019, 36 Indian water rights settlements had been federally approved, with total costs in excess of $5.8 billion. Of these, 32 settlements were approved and enacted by Congress and 4 were administratively approved by the U.S. Departments of Justice and the Interior. After being congressionally authorized, federal projects associated with approved Indian water rights settlements generally have been implemented by the Bureau of Reclamation or the Bureau of Indian Affairs (both within the Department of the Interior), pursuant to congressional directions. Congress has appropriated discretionary and mandatory funding (and, in some cases, both) for these activities, including in recent appropriations bills. In the 116th Congress, H.R. 1904 proposes to extend certain mandatory funds for these settlements in perpetuity (the funding currently expires in FY2029).", "Several individual Indian water rights settlements recently have been considered and enacted, including three that were enacted during the 114th Congress. A primary challenge facing new settlements is the availability of federal funds to implement ongoing and future agreements. Indian water rights settlements often involve the construction of major new water infrastructure to allow tribal communities to access water they hold rights to, and obtaining federal funding for these projects can be difficult. As a result, some settlements have been renegotiated to reduce their federal costs.", "At issue is under what circumstances (if any) Congress should approve new Indian water rights settlements and whether Congress should fund (and in some cases amend) existing settlements. Some argue that resolution of Indian water rights settlements is a mutually beneficial means to resolve long-standing legal issues, provide certainty of water deliveries, and reduce the federal government's liability. Others argue against authorization and funding of new settlements, either on general principle or with regard to specific individual settlements and activities."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Since 1978, the federal government has entered into 36 water rights settlements with 40 individual Indian tribes. These Indian water rights settlements are a means of resolving ongoing disputes related to Indian water rights between tribes, federal and state governments, and other parties (e.g., water rights holders). The federal government is involved in these settlements pursuant to its tribal trust responsibilities. Many of these settlements have been authorized by Congress to provide funding for projects that allow tribes to access and develop their water resources. At issue for Congress is not only the new settlements completing negotiations but also how well the current process for negotiating and recommending settlements for authorization is working. Some of the challenges raised by these settlements pertain to satisfying the federal trust responsibility related to tribal water rights, the provision of federal funding associated with the universe of these settlements, and the principles and expectations guiding ongoing and future negotiation of new settlements and renegotiation of past settlements.", "This report provides background on Indian water rights settlements and an overview of the settlement process. It provides background on Indian water rights, describes the settlement process, and summarizes enacted and potential settlements to date. It also analyzes issues related to Indian water rights, with a focus on the role of the federal government and challenges faced in negotiating and implementing Indian water rights settlements. Finally, it focuses on settlements in a legislative context, including enacted and proposed legislation."], "subsections": []}, {"section_title": "Background", "paragraphs": ["Indian water rights are vested property rights and resources for which the United States has a trust responsibility. The federal trust responsibility is a legal obligation of the United States dictating that the federal government must protect Indian resources and assets and manage them in the Indians' best interest. Historically, the United States has addressed its trust responsibility by acting as trustee in managing reserved lands, waters, resources, and assets for Indian tribes and by providing legal counsel and representation to Indians in the courts to protect such rights, resources, and assets. Specifically in regard to Indian water rights settlements, the United States has fulfilled its trust responsibility to Indian tribes by assisting tribes with their claims to reserved water rights through litigation, negotiations, and/or implementation of settlements.", "The specifics of Indian water rights claims vary, but typically these claims arise out of the right of many tribes to water resources dating to the establishment of their reservations. Indian reserved water rights were first recognized by the Supreme Court in Winters v. United States in 1908. Under the Winters doctrine, when Congress reserves land (i.e., for an Indian reservation), Congress implicitly reserves water sufficient to fulfill the purpose of the reservation. ", "In the years since the Winters decision, disputes have arisen between Indians asserting their water rights and non-Indian water users, particularly in the western United States. In that region, the establishment of Indian reservations (and, therefore, of Indian water rights) generally predated settlement by non-Indians and the related large-scale development by the federal government of water resources for non-Indian users. In most western states, water allocation takes place under a system of prior appropriation in which water is allocated to users based on the order in which water rights were acquired. Under the Winters doctrine and the western system of prior appropriation, the water rights of tribes often are senior to those of non-Indian water rights holders because Indian water rights generally date to the creation of the reservation. However, despite the priority of Indian reserved water rights, non-Indian populations frequently have greater access to and allocations of water through infrastructure. This discrepancy leads to disputes that typically have been litigated or, more recently, resolved by negotiated settlements.", "Litigation of Indian water rights is a costly process that may take several decades to complete. Even then, Indian water rights holders may not see tangible water resources and may be awarded only paper water \u2014that is, they may be awarded a legal claim to water but lack the financial capital to develop those water resources. This situation occurs because, unlike Congress, the courts cannot provide tangible wet water by authorizing new water projects and/or water-transfer infrastructure (including funding for project development) that would allow the tribes to exploit their rights. ", "As a result, negotiated settlements recently have been the preferred means of resolving many Indian water rights disputes. Negotiated settlements afford tribes and other interested stakeholders an opportunity to discuss and come to terms on quantification of and access to tribal water allocations, among other things. These settlements often are attractive because they include terms and conditions that resolve long-standing uncertainty and put an end to conflict by avoiding litigation. However, there remains disagreement among some as to whether litigation or settlements are most appropriate for resolving Indian water rights disputes."], "subsections": []}, {"section_title": "Settlement Structure and Process", "paragraphs": ["The primary issue regarding settlement for Indian reserved water rights is quantification \u2014identifying the amount of water to which users hold rights within the existing systems of water allocation in various areas in the West. However, quantification alone often is not sufficient to secure resources for tribes. Thus, the negotiation process frequently also involves provisions to construct water infrastructure that increases access to newly quantified resources. In addition to providing access to wet water, some negotiated settlements have provided other benefits and legal rights aligned with tribal values. For instance, some tribal settlements have included provisions for environmental protection and restoration.", "The federal government's involvement in the Indian water rights settlement process is guided by a 1990 policy statement established during the George H. W. Bush Administration, \"Criteria and Procedures for the Participation of the Federal Government in Negotiations for the Settlement of Indian Water Rights Claims\" by the Working Group on Indian Water Settlements (Working Group) from the Department of the Interior (DOI). DOI adopted the criteria and procedures in 1990 to establish a framework to inform the Indian water rights settlement process and expressed the position that negotiated settlements, rather than litigation, are the preferred method of addressing Indian water rights. As discussed in the below section \" Steps in Settlement Process ,\" the primary federal entities tasked with prenegotiation, negotiation, and implementation duties for Indian water rights settlements are DOI, the Department of Justice (DOJ), and the Office of Management and Budget (OMB). ", "DOI has the majority of responsibilities related to participating in and approving Indian water rights settlements. Within DOI, two entities coordinate Indian water settlement policy. First, the Working Group on Indian Water Settlements, established administratively in 1989 and comprised of all Assistant Secretaries and the Solicitor (and typically chaired by a counselor to the Secretary or Deputy Secretary), is responsible for making recommendations to the Secretary of the Interior regarding water rights settlements, including overarching policy guidance for settlements. Second, the Secretary of the Interior's Indian Water Rights Office (SIWRO) is responsible for oversight and coordination of Indian water rights settlements, including interfacing with negotiation and implementation teams for individual settlements, as well as tribes and other stakeholders. The SIWRO is led by a director who reports to the chair of the Working Group.", "DOI also appoints teams to work on individual Indian water rights settlements during the various stages of the settlement process (see below section, \" Steps in Settlement Process \"). Each team includes a chairman who is designated by the chair of the Working Group (i.e., the counselor to the Secretary) and who represents the Secretary in all settlement activities. Federal teams typically are composed of representatives from the Bureau of Indian Affairs (BIA), Bureau of Reclamation (Reclamation), U.S. Fish and Wildlife Service, Office of the Solicitor, and DOJ. The teams explain general federal policies on settlement and, when possible, help to develop the parameters of a particular settlement."], "subsections": []}, {"section_title": "Steps in Settlement Process", "paragraphs": ["Broadly speaking, there are four steps associated with Indian water rights settlements: prenegotiation, negotiation, settlement, and implementation. The time between negotiation, settlement, and implementation can take several years. Each step, including relevant federal involvement, is discussed below."], "subsections": [{"section_title": "Prenegotiation", "paragraphs": ["Prenegotiation includes any of the steps before formal settlement negotiations begin. This stage includes, in some cases, litigation and water rights adjudications that tribes have taken part in before deciding to pursue negotiated settlements. For instance, one of the longest-running cases in Indian water rights history, New Mexico v. Aamodt , was first filed in 1966; multiparty negotiations began in 2000 and took more than a decade to complete. ", "The federal government also has its own prenegotiation framework that may involve a number of phases, such as fact-finding, assessment, and briefings. More information on these roles (based on DOI's \"Criteria and Procedures\" statement) is provided below."], "subsections": []}, {"section_title": "Federal Process for Prenegotiation", "paragraphs": ["The fact-finding phase of the federal prenegotiation process is prompted by a formal request for negotiations with the Secretary of the Interior by Indian tribes and nonfederal parties. During this time, consultations take place between DOI and DOJ, which examine the legal considerations of forming a negotiation team. If the Secretary decides to establish a team, OMB is notified with a rationale for potential negotiations (based on potential litigation and background information of the claim). No later than nine months after notification, the team submits a fact-finding report containing background information, a summary and evaluation of the claims, and an analysis of the issues of the potential settlement to the relevant federal entities (DOI, DOJ, and OMB). ", "During the second phase, the negotiating team works with DOJ to assess the positions of all parties and develops a recommended federal negotiating position. The assessment should quantify all costs for each potential outcome, including settlement and no settlement. These costs can range from the costs for litigation to the value of the water claim itself.", "During the third phase, the Working Group on Indian Water Settlements presents a recommended negotiating position to the Secretary. In addition to submitting a position, the working group recommends the funding contribution of the federal government, puts forth a strategy for funding the contribution, presents any views of DOJ and OMB, and outlines positions on major issues expected during the settlement process.", "The actual negotiations process (see \" Negotiation ,\" below) is the next phase for the Working Group on Indian Settlements, in which OMB and DOJ are updated periodically. If there are proposed changes to the settlement, such as in cost or conditions, the negotiating position is revised following the procedures of the previous phases."], "subsections": []}, {"section_title": "Negotiation", "paragraphs": ["The negotiation phase can be prolonged and may take years to resolve. During this process, the federal negotiation team works with the parties to reach a settlement. The process generally is overseen by the aforementioned DOI offices, as well as by the BIA's Branch of Water Resources and Water Rights Negotiation/Litigation Program, which provide technical and factual work in support of Indian water rights claims and financial support for the federal government to defend and assert Indian water rights. Reclamation's Native American Affairs Program also facilitates the negotiation of water rights settlements by providing technical support and other assistance. In 2016, OMB issued guidance that it be more involved in the negotiation process, and it has laid out a set of requirements for DOI and DOJ to provide regular written updates on individual settlements. "], "subsections": []}, {"section_title": "Settlement", "paragraphs": ["Once the negotiation phase has been completed and parties have agreed to specific terms, the settlement is typically presented for congressional authorization (as applicable). In these cases, Congress typically must enact the settlement for it to become law and for projects outlined under the settlement to be eligible for federal funding. If Congress is not required to approve the settlement, the settlements generally may be approved administratively by the Secretary of the Interior or the U.S. Attorney General or judicially by judicial decree."], "subsections": []}, {"section_title": "Implementation", "paragraphs": ["Once a settlement is approved (either administratively or by Congress), the SIWRO oversees its implementation through federal implementation teams. Federal implementation teams function much like federal negotiation teams, only with a focus on helping the Indian tribe(s) and other parties implement the settlement. ", "For settlements that began through litigation or adjudication, the settlement parties must reconvene to reconcile the original agreement with the settlement, along with any additional changes. After the Secretary of the Interior signs the revised agreement, the adjudication court conducts an inter se process in which it hears objections from any party. Once the court approves the settlement, it enters a final decree and judgment. The actual implementation usually is carried out by one or more federal agencies (typically Reclamation or BIA, based on terms of the agreement) that act as project manager. ", "Altogether, the \"Criteria and Procedures\" statement stresses that the cost of settlement should not exceed the sum of calculable legal exposure and any additional costs related to federal trust responsibility and should promote comity, economic efficiency, and tribal self-sufficiency. Funding for the settlement itself typically is provided through Reclamation and/or BIA. However, in some cases other agencies contribute based on the particular terms of a settlement."], "subsections": []}]}, {"section_title": "Status of Individual Indian Water Rights Settlements", "paragraphs": ["The federal government has been involved with Indian water rights settlements through assessment, negotiation, and implementations teams (for enacted settlements) since 1990. As of 2018, there were 21 ongoing negotiation teams working on settlements projected to cost more than $2 billion. Additionally, there are 23 implementation teams active for carrying out approved settlements. Overall, the federal government has entered into 36 settlements since 1978, with Congress enacting 32 of these settlements. The remaining settlements were approved administratively by the Secretary of the Interior or the U.S. Attorney General or by judicial decree.", " Table 1 below lists enacted settlements as of the date of this report, while Table 2 lists negotiation teams as of 2017 (the last time this information was made available). "], "subsections": []}, {"section_title": "Issues in the Consideration of Indian Water Rights Settlements", "paragraphs": ["Once the stakeholders have agreed to initiate negotiation of a settlement, a number of issues may pose challenges to a successful negotiation and implementation of a settlement. Such challenges may include defining and finding a source of adequate funding for a settlement and contending with other issues within settlements, such as compliance with environmental regulations and identification of sources and conditions for water delivery. Congress may be asked to weigh in on one or more of these issues as they are considered."], "subsections": [{"section_title": "Funding", "paragraphs": [], "subsections": [{"section_title": "Considerations in Funding Indian Water Rights Settlements", "paragraphs": ["The delivery of wet water (as opposed to paper water) to tribes that have enacted settlement agreements frequently requires significant financial resources and long-term investments by the federal government, often in the form of new projects and infrastructure. For federal policymakers, a widely recognized challenge is identifying and enacting federal funding to implement settlements while also resulting in cost-savings relative to litigation. In response to concerns related to implementation costs, some settlements have been renegotiated over time to decrease their estimated federal costs. For instance, legislation to authorize the Blackfeet Compact was first introduced in 2010 and was subsequently renegotiated and revised, resulting in a reduction to estimated federal costs by approximately $230 million (nominal dollars) compared to the version of this legislation that was introduced in 2016. Partially in response to concerns related to justifying the costs of proposed settlements, OMB issued a memo to DOI and DOJ on June 23, 2016, outlining new steps that would provide for greater involvement by OMB earlier in the settlement negotiation process. OMB also stated that it would require, among other things, a description and quantification of the costs and benefits of proposed settlements by DOI and DOJ prior to a formal letter of Administration position.", "After a preferred federal contribution is identified and agreed upon, other challenges include identifying the source and structure of federal funding proposed for authorization. Recent congressionally authorized Indian water rights settlements have been funded in various ways, including through discretionary funding authorizations (i.e., authorizations that require annual appropriations by Congress); direct or mandatory funding (i.e., spending authorizations that do not require further appropriations); and combinations of both. In regard to mandatory funding, some settlements have been funded individually and several others have been funded with mandatory spending from a single account, the Reclamation Water Settlements Fund (see \" Combined Mandatory/Discretionary Funding ,\" below). Additionally, some have tapped preexisting or related federal receipt accounts as the source for mandatory funding. The timing of the release of funds also has varied widely among settlements and may in some cases depend on expected future actions (e.g., contingent on completion of plans and/or certain nonfederal activities).", "Selected examples of how recent Indian water rights settlements have been funded are discussed below. These sections describe different structural approaches to funding Indian water rights settlements that have been approved by Congress in the past, including when and how the funding is expected to be released (if applicable). They also discuss another source that is sometimes mentioned in this context, the DOJ Judgment Fund in the Department of the Treasury."], "subsections": []}]}, {"section_title": "Examples of Funding Sources", "paragraphs": [], "subsections": [{"section_title": "Discretionary Funding", "paragraphs": ["Discretionary spending, or spending that is subject to appropriations, historically has been the most common source of funding for congressionally approved Indian water rights settlements. In many cases, Congress has authorized the appropriations of specific sums for individual settlements, including individual funds within the settlement. For example, the Pechanga Band of Luise\u00f1o Mission Indians Water Rights Settlement Act ( P.L. 114-322 , Title III, Subtitle D) approved the Pechanga Water Rights Settlement. This legislation established the Pechanga Settlement Fund and four accounts within it: (1) Pechanga Recycled Water Infrastructure account; (2) Pechanga ESAA Delivery Capacity account; (3) Pechanga Water Fund account; and (4) Pechanga Water Quality account. These accounts are authorized to receive future discretionary appropriations from Congress totaling to $28.5 million, and the funds must be spent by April 30, 2030.", "Congress also has chosen to authorize discretionary appropriations of \"such sums as may be necessary\" at times. For instance, the Colorado Ute Settlement Act Amendments of 2000 (Title III, P.L. 106-554 ) authorized the implementation and the operations and maintenance of the Animas-La Plata project and authorized Reclamation to construct these facilities using such sums as may be necessary. "], "subsections": []}, {"section_title": "Combined Mandatory/Discretionary Funding", "paragraphs": ["Two major pieces of settlement legislation in the 111 th Congress authorized a combination of mandatory and discretionary spending for Indian water rights settlement and are discussed below. "], "subsections": [{"section_title": "Omnibus Public Land Management Act of 2009 (P.L. 111-11)", "paragraphs": ["Title X of the Omnibus Public Land Management Act of 2009 ( P.L. 111-11 ) authorized mandatory spending for accounts with broadly designated purposes aligning with Indian water rights settlements. It also included discretionary funding for a number of settlements. This legislation created a new Treasury Fund, the Reclamation Water Settlements Fund, and scheduled funds to be deposited and available in this account beginning in 2020. The act directed the Secretary of the Treasury to deposit $120 million into the fund for each of the fiscal years 2020 through 2029 (for a total of $1.2 billion). The fund may be used to implement a water rights settlement agreement approved by Congress that resolves, in whole or in part, litigation involving the United States, and it may be used if the settlement agreement or implementing legislation requires Reclamation to provide financial assistance for or to plan, design, or construct a water project. The act also assigned tiers of priority to access these funds in the following order: ", "First-tier priority is assigned to the Navajo-Gallup Water Supply Project (a key element of the Navajo Nation Water Rights Settlement), the Aamodt Settlement, and the Abeyta Settlement; and Second-tier priority is assigned to the settlements for the Crow Tribe, the Blackfeet Tribe, and the Tribes of the Fort Belknap reservation, as well as the Navajo Nation in its water rights settlement over claims in the Lower Colorado River basin. ", "If Congress does not approve and authorize projects that are given priority under the legislation by December 31, 2019, the amounts reserved for the priorities are to revert to the Reclamation Water Settlement Fund for any other authorized use of the fund under the act. Thus, if there were any \"leftover\" funding, these funds could be available for other authorized Indian water rights settlements. The fund itself is scheduled to terminate on September 30, 2034, and the unexpended and unobligated balance of the fund will be transferred to the Treasury at that time. ", "In addition to the mandatory funds noted above, P.L. 111-11 also authorized $870 million in discretionary appropriations for the Navajo-Gallup project. "], "subsections": []}, {"section_title": "Claims Resolution Act of 2010 (P.L. 111-291)", "paragraphs": ["Although P.L. 111-11 provided an appropriation of mandatory funding to be used by several settlements at a future date, provisions in the Claims Resolution Act of 2010 ( P.L. 111-291 ) authorized and provided direct or mandatory spending for four individual water rights settlements. P.L. 111-291 also included discretionary funding for some of these settlements and additional mandatory funding for the Navajo-Gallup project (authorized in P.L. 111-11 ). Among other things, P.L. 111-291", "authorized and appropriated approximately $82 million in mandatory funding for the Aamodt Settlement in a newly created Aamodt Settlement Pueblos' Fund and authorized an additional $93 million in discretionary funding subject to appropriations; authorized the Abeyta Settlement, appropriated $66 million in mandatory funds for implementation of that agreement in a newly created Taos Pueblos' Water Development Fund, and authorized an additional $58 million in discretionary funding subject to appropriations; authorized the Crow Tribe Water Rights Settlement, appropriated $302 million in mandatory funding for that agreement, and authorized an additional $158 million in discretionary funding subject to appropriations; authorized the White Mountain Apache Tribe water rights quantification, appropriated mandatory funding of approximately $203 million to multiple sources to carry out that settlement, and authorized an additional $90 million in discretionary appropriations; and authorized and appropriated a total of $180 million from FY2012 to FY2014 in mandatory funding to the Reclamation Water Settlements Fund established under P.L. 111-11 to carry out the Navajo-Gallup Water Supply Project authorized in that same legislation. "], "subsections": []}]}, {"section_title": "Other Funding Sources", "paragraphs": [], "subsections": [{"section_title": "Redirection of Existing Receipt Accounts", "paragraphs": ["Other water rights settlements have been funded through additional mechanisms, including redirection of funds accruing to existing federal receipt accounts. These funds may differ from traditional mandatory funds in that they make available funding without further appropriations but they also depend on the amount of funding accruing to such an account. For example, the Arizona Water Settlements Act ( P.L. 108-451 ) authorized water rights settlements for the Gila River Indian Community (GRIC) and the Tohono O'odham Nation, respectively. Both water rights settlements required funding for delivery infrastructure associated with water deliveries from the Central Arizona Project (CAP). To fund these costs, P.L. 108-451 required that certain CAP repayments and other receipts that accrue to the previously existing Lower Colorado River Basin Development Fund (LCRBDF, which averages receipts of approximately $55 million per year) be made available annually, without further appropriation (i.e., mandatory funding) for multiple purposes related to the GRIC and Tohono O'odham settlements. For instance, the bill required that after FY2010, deposits totaling $53 million be made into a newly established Gila River Indian Community Operations Maintenance and Rehabilitation Trust Fund, to assist in paying for costs associated with the delivery of CAP water. In addition to a number of other settlement-related spending provisions, the bill stipulated that up to $250 million in LCRBDF receipts be made available for future Indian water rights settlements in Arizona. However, if sufficient LCRBDF balances are not available for any of the bill's priorities, then funding is to be awarded according to the order in which these priorities appear in the bill."], "subsections": []}, {"section_title": "Judgment Fund", "paragraphs": ["Another potential source of payment for Indian water rights settlements could be the Judgment Fund, which is a permanent indefinite appropriation available to pay all judgments against the United States that are \"not otherwise provided for\" by another funding source. Certain criteria must be met for a payment to come out of the Judgment Fund. First, the judgment must be monetary and final, so that payments are not made from the Judgment Fund when there is a chance the award could be changed or overturned. Second, the payment must be certified by the Secretary of the Treasury, who has delegated administration of the Judgment Fund to the Bureau of the Fiscal Service. Finally, payment of the judgment, award, or settlement either must be authorized by certain statutes or must be a final judgment rendered by a district court, the Court of International Trade, or the U.S. Court of Federal Claims. Alternatively, payment can stem from a compromise settlement negotiated by the Attorney General (or any authorized person) if such settlement arises under actual litigation or is in \"defense of imminent litigation or suits against the United States.\" ", "Many judgments are paid from the Judgment Fund because the operating appropriations of federal agencies are \"generally not available to pay judgments.\"", "The government historically has entered into compromise settlements with Indians and Indian tribes on a variety of legal issues, and both the federal district courts and the U.S. Court of Federal Claims generally can hear suits brought by Indian tribes. The Judgment Fund has been used to pay for some of these settlements. For example, Title I of the Claims Resolution Act of 2010 (CRA; P.L. 111-291 ) authorizes and implements the settlement reached in the Cobell v. Salazar litigation. Under the act, Congress directed the Secretary of the Treasury to establish a Trust Land Consolidation Fund and deposit into it $1.9 billion \"out of the amounts appropriated to pay final judgments, awards, and compromise settlements\" under the Judgment Fund. For purposes of this transfer, the act also states that the statutory conditions of the Judgment Fund have been met. Notably, although the CRA included a number of separate water rights settlements with specific Indian tribes, it appears to have set up other funding mechanisms for the Indian tribes' water rights settlements, as it did not specifically direct payment from the Judgment Fund. ", "For example, although Title III of the CRA authorized mandatory funding of approximately $203 million to multiple sources to carry out the White Mountain Apache Tribe (WMAT) Water Rights Quantification Agreement and authorized an additional $90 million in discretionary appropriations (see reference to this legislation in the previous section, \" Combined Mandatory/Discretionary Funding \"), it established various funds from which these moneys could be used. One such fund is the WMAT Settlement Fund, for which Congress authorized $78.5 million to be appropriated to the Secretary of the Treasury. This language indicates that Congress must act separately to appropriate funds so that the Secretary may then transfer $78.5 million into the WMAT Settlement Fund. The CRA established a second fund, the WMAT Maintenance Fund, for which Congress mandated appropriations by directing the Secretary to transfer $50 million \"out of any funds in the Treasury not otherwise appropriated.\" This language indicates that the funds will be transferred, without a separate appropriation, from the U.S. Treasury General Fund, which is \"the largest fund in the Government ... [and] is used for all programs that are not supported by trust, special, or revolving funds.\" ", "As mentioned above, if there is another source of funding provided for by appropriation or statute, regardless of the actual funding level, then payment from the Judgment Fund is precluded. Courts look for an appropriation that has programmatic specificity, regardless of the agency's use of the funds. For example, if an agency already had spent an appropriated sum on other litigation or expended the money elsewhere (as in many of the above examples of Indian water rights settlements), then payment from the Judgment Fund for all or part of the award may be precluded. Under these circumstances, the agency would have to seek an additional appropriation from Congress . In the future, whether the Judgment Fund may be used for payments related to Indian water settlement agreements seems to depend on the nature of the claim, the substantive law at issue, existing sources of funding, and the forum in which the award is made."], "subsections": []}]}]}, {"section_title": "Compliance with Environmental Laws", "paragraphs": ["The environmental impact of settlements has been an issue for federal agencies, environmental groups, and tribes, among others. In some cases, construction of settlement projects has been challenged under federal environmental laws, such as the National Environmental Policy Act of 1969 (NEPA; P.L. 91-190), the Clean Water Act (CWA; P.L. 92-500), the Endangered Species Act of 1973 (ESA; P.L. 93-205 ), and the Safe Drinking Water Act ( P.L. 93-523 ). Because some settlements involve construction of new water projects (such as reservoirs, dams, pipelines, and related facilities), some have argued that settlements pose negative consequences for water quality, endangered species, and sensitive habitats. ", "For example, the Animas-La Plata project, originally authorized in the Colorado River Basin Project Act of 1968 (P.L. 84-485) and later incorporated into the Colorado Ute Water Rights Settlement Act of 1988 ( P.L. 100-585 ), faced opposition from several groups over the alleged violation of various environmental laws. Additionally, the U.S. Environmental Protection Agency raised concerns that the project would negatively affect water quality and wetlands in New Mexico. These and other concerns stalled construction of the project for a decade. The Colorado Ute Settlement Act Amendments of 2000 ( P.L. 106-554 ) amended the original settlement to address these concerns by significantly reducing the size and purposes of the project and codifying compliance to NEPA, CWA, and ESA. Other enacted settlements that initially encountered opposition stemming from environmental concerns include the Jicarilla Apache Tribe Water Settlement Act of 1992 ( P.L. 102-441 ) and the Yavapai-Prescott Indian Tribe Water Rights Settlement Act of 1994 ( P.L. 103-434 )."], "subsections": []}, {"section_title": "Water Supply Issues", "paragraphs": ["In addition to the need to quantify reserved water rights, a key difficulty during the negotiation process is identifying a water source to fulfill reserved water rights. Generally, this is done through reallocating water to tribes from existing sources, as was done for selected tribes in Arizona and the Central Arizona Project under the Arizona Water Settlements Act of 2004 ( P.L. 108-451 ). In some cases, settlements have provided funds for tribes to acquire water from willing sellers. In addition to identifying and quantifying a water source, settlements can address the type of water (i.e., groundwater, surface water, effluent water, stored water) and the types of uses that are held under reserved water rights (e.g., domestic, municipal, irrigation, instream flows, hunting and fish, etc.) as well as water quality issues. ", "Another common issue addressed within settlements is the question of whether to allow for the marketing, leasing, or transfer of tribal water. Twenty-one of the 32 congressionally enacted settlements permitted some form of marketing, leasing, or transferring, ranging from limited off-reservation leasing to less restrictive forms of marketing. This exchange of water can provide dual benefits of better water reliability in areas of scarce supplies and economic incentives to tribes. At the same time, some tribes and state users oppose any allowance for water marketing in settlements. Some members within tribes object to the exchange of water on religious and cultural grounds, due to the belief that water is fundamentally attached to tribal life and identity. Some non-Indians oppose allowances for water marketing in these agreements when marketing has the potential to increase the price of water that otherwise might be available for free to downstream water users and thus potentially could harm regional economies. As such, negotiating the right to market, lease, or transfer water can be a contentious issue that results in several restrictions to mitigate potential negative impacts. "], "subsections": []}, {"section_title": "Debating the \"Certainty\" of Settlements", "paragraphs": ["The certainty of Indian water rights settlements is commonly cited as a multilateral benefit for the stakeholders involved. Supporters regularly argue that mutual benefits accrue as a result of these agreements: tribes secure certainty in the form of water resources and legal protection, local users and water districts receive greater certainty and stability regarding their water supplies, and the federal and state governments are cleared from the burden of potential liability. ", "Some tribal communities have objected to settlements based on these principles. They have argued that the specific, permanent quantification of their water rights through settlements may serve to limit the abilities of tribes to develop in the future. Similarly, some have argued against settlements as they may limit tribes to a particular set of uses (e.g., agriculture) and prevent potential opportunities for greater economic yields in the future. Some contend that to avoid use-based limitations, water rights settlements should focus on allowing water leasing and marketing (see discussion in \" Water Supply Issues ,\" above) so tribes can control and use their water resources with greater flexibility. Still others have spoken out against the idea of negotiated settlements entirely, as they oppose negotiating their claims in exchange for lesser water rights and money. They view the process as akin to the \"first treaty era,\" when Indian tribes forfeited their lands. They note that in the future, the courts may be more favorable and allow for greater gains through litigation.", "Nontribal users also may raise their own concerns with the certainty of water rights settlements. Some water users have complained that provisions in certain settlements have the potential to maintain or even increase uncertainty associated with their water rights. For example, some water users in western Montana have raised concerns that the Confederated Salish and Kootenai Tribes (CSKT) Water Compact recognizes off-reservation water rights with the potential to significantly curtail nontribal water rights beyond those quantified in the CSKT Compact."], "subsections": []}]}, {"section_title": "Legislative Questions", "paragraphs": ["Several common questions that are raised often in regard to Indian water rights settlements are discussed below."], "subsections": [{"section_title": "Why Is the Federal Government Involved in Indian Water Rights Settlements?", "paragraphs": ["Although settlements essentially act as a quid pro quo relationship among the many stakeholders involved, the federal government's role in all stages of the settlement process serves as a way to fulfill its trust responsibility to the tribes to secure, protect, and manage the tribes' water rights. Furthermore, many tribes have breach-of-trust claims against the federal government. Settlements (including those that provide for federal resources and funding for new water infrastructure) provide an opportunity for tribes to formally waive these claims and potentially resolve these disputes."], "subsections": []}, {"section_title": "Has Negotiating Settlements Been Successful?", "paragraphs": ["It is difficult to make broad characterizations of the impact of Indian water rights settlements. As of 2019, the federal government has been involved in the negotiation of more than 50 Indian water rights settlements. As previously noted, 36 of these negotiations have resulted in federal settlements with tribes and others. Whether these settlements have been successful depends in part on the metric used to define success. In most cases, the settlements have secured rights and access (or potential access) to tribal water resources. However, many of the projects to provide this access are ongoing, so it is not possible to characterize their end result for tribes and the federal government. Further, the extent to which settlements eventually achieve their anticipated benefits likely will vary among individual settlements. Some (including both Indian and non-Indian users) who support negotiating settlements in general may disagree with the contents or outcomes of specific settlements. Others may contend that other means (i.e., litigation) are more appropriate for solving these issues."], "subsections": []}, {"section_title": "What Is the Funding Status of Current Enacted Settlements?", "paragraphs": ["Due to the mix of discretionary and mandatory funds involved, it can be difficult to track the funding status of Indian water rights settlements. CRS estimates that as of FY2019, the federal government had appropriated more than $2.9 billion in nominal discretionary funding to implement Indian water rights settlements, plus an additional $4.3 billion in mandatory funds that have been made available or are expected to be made available in future years pursuant to authorizing legislation. These appropriations have been provided to multiple agencies, including Reclamation, BIA, the Bureau of Land Management, and the U.S. Fish and Wildlife Service. The total amount of authorized Indian water rights settlements is not formally tracked by the Administration. In early 2019, DOI estimated that Reclamation had a backlog of $1.3 billion in \"authorized but unfunded\" Indian water rights settlements. Presumably, any future authorized settlements without associated mandatory funding commitments would add to this total."], "subsections": []}, {"section_title": "What Types of Activities Typically Are Authorized in Indian Water Rights Settlements?", "paragraphs": ["Settlements are negotiated on a case-by-case basis, so the details of each settlement vary and are related to specific issues between tribes and water users in a given area. Generally, most settlements ratify agreements and compacts that have been reached by stakeholders; authorize reallocation and delivery of water from existing sources; and authorize construction and funding for new water projects that are built by Reclamation (and in many cases, transferred to the tribes). In addition to providing access to water, most settlements have resulted in tribal development funds into which the Secretary of the Interior makes scheduled payments for the purpose of economic development and to cover various costs of managing water projects. ", "As previously stated, quantification and types of use are general issues within settlements, although additional benefits can be prominent factors as well. For example, numerous settlements have been negotiated to include provisions that would establish programs for fish and wildlife protection as well as ecosystem restoration. In other cases, tribes and settlements have focused less on specific quantification and more on securing greater control of their rights or pursuing alternative forms of gaining water rights\u2014for example, P.L. 100-228 approved an agreement that would allow the Seminole Tribe of Florida to administer its water rights and possess jurisdiction to manage its water resources with a water district at no cost to the federal government. In another case, the Zuni Indian Tribe waived certain claims to water to gain federal funds to purchase water rights from willing sellers. And, in many cases, settlements have authorized conditions for water marketing and leasing for tribes, although the degree to which this is allowed varies by settlement. "], "subsections": []}]}, {"section_title": "Recent Indian Water Rights Settlement Legislation", "paragraphs": ["Since 2009, Congress has enacted nine Indian water rights settlements involving 13 tribes, at an authorized federal cost of more than $2 billion. These settlements were enacted in four bills: P.L. 111-291 (The Claims Resolution Act of 2010); P.L. 113-169 (the Pyramid Lake Paiute-Fish Springs Ranch Settlement Act); P.L. 113-223 (the Bill Williams River Water Rights Settlement Act of 2014); and P.L. 114-322 (the Water Infrastructure Improvements for the Nation Act, or WIIN). Several of these settlements, including those enacted by the 113 th Congress and the Choctaw Nation and Chickasaw Nation Water Settlement Act included in WIIN, were not associated with any new federal funding authorizations or appropriations.", "An issue related to Indian water rights settlements in recent Congresses has been the circumstances under which this type of legislation is to be transmitted and considered. During the 115th Congress, the chairman of the House Natural Resources Committee sent a letter to the Attorney General and the Secretary of the Interior outlining the committee's process and expectations for considering Indian water rights settlement legislation (this process was similar to that used by the committee dating in the 114 th Congress). These requirements included the following:", "A statement by the relevant departments (i.e., DOI and DOJ) affirming that each proposed settlement adheres to current executive branch criteria and procedures. Specific affirmation by the departments that the cost of a settlement to all parties does not exceed the value of the existing claims as calculated by the federal government and that federal contributions do not exceed the sum of calculable legal exposure and federal trust or programmatic responsibilities. Conveyance to a court by DOJ and agreement in writing by all settling parties to the settlement, pending a legislative resolution. Approval in writing by the departments of the legislative text needed to codify the settlement. Consent to being available to testify by DOJ. Listing of the legal claims being settled by both departments.", "It is unclear to what extent any of these requirements will continue to apply in the 116 th Congress."], "subsections": [{"section_title": "Navajo Utah Settlement", "paragraphs": ["In the 116 th Congress, H.R. 644 and S. 1207 would both approve a settlement resolving water rights claims of the Navajo Nation on the San Juan River in the Upper Colorado River Basin in Utah. It would authorize the Secretary of the Interior to establish a Navajo Water Development Trust Fund and would authorize appropriations (plus any interest on these deposits) for two accounts to be established within the fund: ", "1. The Navajo Water Development Projects Account, which would be authorized to receive appropriations of $198.3 million, adjusted for inflation, for municipal water supply projects. 2. The Navajo OM&R Account, which would be authorized to receive appropriations of $11.1 million for water supply facility operations and maintenance activities. ", "In addition, $1 million in nontrust fund appropriations would be authorized for the Department of the Interior to implement the settlements. The bill would reserve tribal access (through the project) to as much as 81,500 acre-feet per year from water sources adjacent to or within the Navajo Nation's reservation in Utah. This depletion would be subtracted from the State of Utah's Colorado River allocation. In return, parties (including the Navajo Nation, the United States, and the State of Utah) would waive and release most claims associated with this settlement. Additionally, the Navajo Nation has agreed to subordinate its water rights under the settlement to existing, non-Indian uses. According to the Navajo Nation, this could result in water shortages for the tribe 11% to 46% of the time when its full 81,500 acre-feet water right is put to use. ", "Earlier versions of the Navajo Utah Settlement legislation (e.g., introduced versions in the 115 th Congress) adhered to the historically common practice of authorizing funds for Reclamation to construct new water resource facilities for the tribe. However, the fund-based approach evidenced in the current version of the legislation, in which the department would release funds from the Trust Fund to the Navajo Nation for expenditures as needed, represents a notable departure from this model. Advocates of the approach believe it may help to avoid cost overruns and would have the added benefit of supplementing available funds by accumulating interest. While the Navajo Nation supports this approach for this proposed settlement, it is unclear if other tribes with pending water-rights claims would support such a fund-based template for future settlements. "], "subsections": []}, {"section_title": "Reclamation Water Settlements Fund Extension", "paragraphs": ["Congress is also considering the extension of mandatory funding for the Reclamation Water Settlement Fund, which was originally enacted in 2009. In the 116 th Congress, H.R. 1904 and S. 886 would both extend the aforementioned $120 million per year in mandatory funds for the Reclamation Water Rights Settlement Fund to make these amounts available in perpetuity. The annual transfer to this fund is currently set to begin in FY2020 and occur annual through FY2029. The bill would allow these transfers to continue, and would not alter the priority tiers laid out currently laid out for the fund. In absence of specific prioritized settlements, funding would be available for other settlement agreements that require the planning, design and construction of water supply infrastructure, project.to rehabilitate existing water delivery systems, or projects restore fish and wildlife habitat affected by Reclamation projects."], "subsections": []}]}, {"section_title": "Conclusion", "paragraphs": ["Long-standing disputes over water rights and use involving Indian tribes continue to be negotiated and settled by the executive branch and are thus likely to be an ongoing issue for Congress. This matter includes implementation of ongoing Indian water rights settlements, negotiation of new settlements, and consideration of these settlements for potential enactment and subsequent funding. As of the end of the 115 th Congress, 32 settlements had been enacted since 1978, and 4 settlements had been approved administratively. Additional funding for ongoing settlements and authorization of and appropriations for new settlements are likely to be requested in the future. In considering Indian water rights settlements, primary issues for Congress may include the cost, contents, and sufficiency of federally authorized efforts to settle tribal water rights claims, as well as the circumstances under which these settlements are considered and approved by authorizing committees and others (i.e., whether the settlements are accompanied by formal statements of Administration support, cost estimates, etc.). In addition, the preferred extent of federal involvement in implementing settlements, including the question of whether the federal government or tribes should take the lead in developing and constructing projects, may be of interest to Congress."], "subsections": []}]}}
{"id": "RS22942", "title": "Joint Light Tactical Vehicle (JLTV): Background and Issues for Congress", "released_date": "2019-03-19T00:00:00", "summary": ["The Joint Light Tactical Vehicle (JLTV) is being developed by the Army and the Marine Corps as a successor to the High Mobility, Multi-Wheeled Vehicle (HMMWV), which has been in service since 1985. On October 28, 2008, awards were made for the JLTV Technology Development (TD) Phase to three industry teams: (1) BAE Systems, (2) the team of Lockheed Martin and General Tactical Vehicle, and (3) AM General and General Dynamics Land Systems.", "On January 26, 2012, the Army issued the Request for Proposal (RFP) for the JLTV's Engineering Manufacturing Development (EMD) phase. Up to three EMD contracts scheduled for June could have been awarded. The period of performance for EMD contracts was 27 months, and the overall EMD phase was scheduled to last 33 months. Vendors were required to provide 22 JLTV prototypes for testing 12 months after contract award. The target cost for the base vehicle was $250,000, excluding add-on armor and other kits.", "On August 22, 2012, the Army announced the award of three firm-fixed price JLTV EMD contracts totaling approximately $185 million. The three companies awarded the EMD contracts were AM General, LLC (South Bend, IN); Lockheed Martin Corporation (Grand Prairie, TX); and Oshkosh Corporation (Oshkosh, WI).", "On September 3, 2013, the Army began JLTV testing at Aberdeen Proving Ground, MD; Yuma, AZ; and Redstone Arsenal, AL. The Army planned to select a single vendor by 2015, with the first Army brigade being equipped with JLTVs by 2018. FY2015 program plans anticipated a Milestone C (Production and Deployment Phase Approval) decision in the fourth quarter of FY2015, followed by Low Rate Initial Production (LRIP).", "On August 25, 2015, it was announced the Army had awarded Oshkosh a $6.7 billion low rate initial production (LRIP) contract with eight options to procure the initial 16,901 vehicles for the Army and Marines. The JLTV is being produced in Oshkosh, WI.", "It is also reported the Army plans to use the JLTV as the interim platform for its upcoming Light Reconnaissance Vehicle (LRV) program instead of procuring a new system. The British Army is reportedly trying to acquire 2,747 JLTVs through Foreign Military Sales (FMS). The Marines have also reportedly increased their JLTV requirement for a total of 9,091 JLTVs. The Air Force and Navy are also procuring a limited number of JLTVs for use.", "A redacted May 2, 2018, DOD Inspector General (IG) report noted the services have not demonstrated effective test results to prepare the JLTV program for full rate production, but the JLTV Program Office has plans to address this concern. The Director, Operational Test and Evaluation (DOT&E) FY2018 Annual Report notes among other findings that JLTVs are not operationally suitable because of deficiencies in reliability, maintainability, training, manuals, crew situational awareness, and safety. Reportedly, the Army has decided to delay JLTV full-rate production, previously scheduled for December 2018, until the early summer of 2019 in order to assess options for vehicle design changes. On March 14, 2019, Army leadership reportedly announced the Army was lowering its overall requirement for JLTVs by 1,900 vehicles in order to free up funding for modernization.", "The FY2020 Research, Development, Test and Evaluation (RDT&E) and Procurement JLTV budget request for all four services is $1.641 billion for 4,090 vehicles. Potential issues for Congress include (1) the possible examination of the DOD Inspector General's Report and DOT&E's FY2018 Annual Report findings and full-rate JLTV production, (2) the potential consequences of a delayed full-rate JLTV production decision, and (3) implications of the Army's new top-line JLTV requirement."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background1", "paragraphs": ["The JLTV is an Army-led, multiservice initiative to develop a family of future light tactical vehicles to replace many of the High Mobility, Multi-Wheeled Vehicles (HMMWVs) used by the armed services today. HMMWVs, which first entered service in 1985, were developed during the Cold War when improvised explosive devices (IEDs) and other antivehicle explosive devices were not a major factor in military planning. The HMMWVs' demonstrated vulnerability to IEDs and the difficulties and costs experienced in \"up-armoring\" HMMWVs already in the inventory have led to renewed emphasis on vehicle survivability. DOD officials have emphasized that JLTVs are not intended to replace HMMWVs \"one for one.\""], "subsections": []}, {"section_title": "The JLTV Program", "paragraphs": [], "subsections": [{"section_title": "What Is the JLTV?3", "paragraphs": ["The JLTV program is a joint Army/Marine Corps effort to develop and produce both vehicles and associated trailers. The JLTV family of vehicles consists of two mission categories: the JLTV Combat Tactical Vehicle (CTV), which seats four passengers, and the JLTV Combat Support Vehicle (CSV), which seats two passengers. The JLTV Combat Tactical Vehicle has a 3,500 lb. payload capacity and comes in three variants:", "the General Purpose (GP) variant; the Heavy Guns Carrier (HGC) variant; and the Close Combat Weapon carrier (CCWC) variant.", "The JLTV Combat Support Vehicle has a 5,100 lb. payload capacity and comes in one variant: the Utility (UTL) Prime Mover variant, which can accommodate a shelter. ", "As planned, JLTVs would be mechanically reliable, maintainable (with on-board diagnostics), all-terrain mobile, and equipped to link into current and future tactical data nets. Survivability and strategic and operational transportability by ship and aircraft are also key JLTV design requirements."], "subsections": []}, {"section_title": "Program Structure7", "paragraphs": ["The JLTV is an Acquisition Category (ACAT) 1D program. The Army bears the overall responsibility for developing the JLTV through its Joint Program Office, which reports to the Program Executive Office (PEO) for Combat Support & Combat Service Support (PEO CS&CSS) in Warren, MI, which reports to the Assistant Secretary of the Army for Acquisition, Logistics, and Technology (ASA [AL&T]). Marine participation is centered on a program office under the supervision of the Program Executive Officer Land Systems (PEO LS) Marine Corps at Quantico, VA."], "subsections": []}]}, {"section_title": "Past Program History", "paragraphs": ["In November 2006, the Joint Chiefs of Staff's Joint Requirement Oversight Council (JROC) approved the JLTV program. On December 22, 2007, the Under Secretary of Defense for Acquisition, Technology, and Logistics USD (AT&L) signed an Acquisition Decision Memorandum (ADM) directing the JLTV Program to move from the Concept Refinement Phase into the Technology Development (TD) Phase of the DOD System Acquisition Process. The Army and Marines had intended to issue a Request for Proposal (RFP) for Technology Development Phase as early as October 2007. Concerned with funding adequacy, technical maturity, and shifting requirements, the Pentagon's acquisition executive disapproved the issuance of the RFP and directed the Army and Marines to \"go back to the drawing board and develop a robust technology development phase.\" On February 5, 2008, an RFP for Technology Development Phase was issued to industry. The RFP stated the government desired to award three contracts for the JLTV Technology Development Phase. The RFP stipulated that proposals would be due April 7, 2008, and the TD Phase would last 27 months. Contractors would build four test subconfigurations during the first 15 months, followed by 12 months of testing. "], "subsections": [{"section_title": "Technology Development Contracts Awarded11", "paragraphs": ["On October 28, 2008, three awards were made for the JLTV TD Phase for a total of $166 million. The three industry teams were (1) BAE Systems Land and Armaments, Ground Systems Division, Santa Clara, CA, and NAVISTAR Defense, Warrenville, IL; (2) General Tactical Vehicles, Sterling Heights, MI\u2014a joint venture between General Dynamics Land Systems and AM General; and (3) Lockheed Martin Systems Integration, Oswego, NY, BAE Systems, Alcoa Defense, Pittsburgh, PA, and JWF Defense Systems, Johnstown, PA."], "subsections": []}, {"section_title": "JLTV Contracts Protested", "paragraphs": ["On November 7 and November 12, 2008, protests were filed with the Government Accountability Office (GAO) against the TD contract awards by the Northrop Grumman-Oshkosh team and the Textron-Boeing-SAIC team alleging there were \"unintended discrepancies\" in how the government rated bids in terms of the criteria of systems maturity, logistics, and costs. As a result of that protest, work on the JLTV program by the three winning teams was suspended. On February 17, 2009, GAO rejected the JLTV protests and the stop-work orders were lifted."], "subsections": []}, {"section_title": "Change in Requirements, Program Schedule, and Variants13", "paragraphs": ["In February 2011, the JLTV Program Office announced the award of the EMD contract would be delayed until January or February 2012 because the Army changed requirements for the JLTV to have the same level of under-body protection as the Mine-Resistant, Ambush-Protected All-Terrain Vehicle (M-ATV). DOD had planned to award two contracts for the EMD phase, which was scheduled to last 24 months, but instead opted for a 48-month-long EMD phase before awarding Production and Deployment contracts in the second quarter of FY2016. It was decided that there would be two variants\u2014a Combat Tactical Vehicle (CTV), which can transport four passengers and carry 3,500 pounds, and a Combat Support Vehicle (CSV), which can transport two passengers and carry 5,100 pounds."], "subsections": []}, {"section_title": "Army Issues RFP for EMD Phase15", "paragraphs": ["On January 26, 2012, the Army issued the RFP for the JLTV's EMD Phase. Industry proposals for the EMD contract were to have been filed with the Army by March 13, 2012. The RFP stipulated that up to three EMD contracts could be awarded, and contract award occurred in June 2012. These contracts would be capped at $65 million per contract. The duration of the EMD performance period would be 27 months starting with contract award. Vendors would be required to provide 22 prototypes for testing 12 months after contract award, and the target cost for the base vehicle configuration was $250,000 (FY2011 constant dollars), excluding add-on armor kits and other kits identified in the RFP. "], "subsections": []}, {"section_title": "JLTV EMD Contracts Awarded", "paragraphs": ["On August 22, 2012, the Army announced the award of three firm-fixed price JLTV EMD contracts totaling approximately $185 million. The three companies awarded the EMD contracts were AM General, LLC (South Bend, IN); Lockheed Martin Corporation (Grand Prairie, TX); and Oshkosh Corporation (Oshkosh, WI). The period of performance was for 27 months, with each contractor receiving initial funding between $28 million and $36 million per contractor, with the balance of funding up to the full contract amount being provided in FY2013 and FY2014. In 12 months, each team was required to deliver 22 prototypes and contractor support for a 14-month comprehensive government testing program, which included blast, automotive, and user evaluation testing. The overall EMD Phase was scheduled to last 33 months. According to the Army, \"the EMD Phase is designed to test and prepare the next-generation vehicles for a Limited User Test, Capabilities Production Document and Milestone C procurement decision in FY 2015.\" ", "Unsuccessful bidders Navistar Defense, BAE Systems, and General Tactical Vehicles (a team of General Dynamics and AM General) were permitted to continue developing JLTV candidate vehicles at their own risk and expense, if they notified the government within 30 days of the EMD contract award. Reports suggested some bidders considered continuing development of JLTV candidates for submission for production source selection."], "subsections": []}, {"section_title": "Army Releases Final RFP for JLTV Full-Rate Production20", "paragraphs": ["On December 12, 2014, the Army reportedly released the final RFP for JLTV low-rate initial production and full-rate production and gave competitors until February 10, 2016, to refine and submit their bids. The Army\u2014on behalf of itself and the Marines\u2014planned to select a winner and issue a single contract award in late summer 2016.", "The winning contractor would build approximately 17,000 JLTVs for the Army and Marines during three years of low-rate initial production, followed by five years of full-rate production. The first Army unit would be equipped with JLTVs in FY2018, and the Army's complete acquisition of JLTVs would be completed in 2040. The Marines would begin acquiring their 5,500 JLTVs at the beginning of production and would be completed by FY2022."], "subsections": []}, {"section_title": "Bids Submitted for JLTV Low-Rate Initial Production (LRIP)21", "paragraphs": ["It was reported that the three companies who were picked in 2012 to build prototypes\u2014Oshkosh, Lockheed Martin, and AM General\u2014submitted their bids for the LRIP contract by the February 10, 2015, deadline. It was also reported that none of the three competitors had said publicly if they included in their proposals an option for the Army to purchase a technical data package for their vehicles. If the Army acquired the technical data package, theoretically the Army could use that data for future production runs, which could enhance competition and possibly result in better prices for the government."], "subsections": []}, {"section_title": "Army Awards JLTV Contract22", "paragraphs": ["On August 25, 2015, the Army awarded Oshkosh a $6.7 billion low rate initial production (LRIP) contract with eight options to procure the initial 16,901 vehicles for the Army and Marines. The JLTV is to be produced in Oshkosh, WI. A full rate production decision was planned for FY2018, and called for the production of 49,100 JLTVs for the Army and 5,500 for the Marine Corps."], "subsections": []}, {"section_title": "Lockheed Martin's JLTV Protest", "paragraphs": [], "subsections": [{"section_title": "Lockheed Martin Files Protest with the Government Accountability Office (GAO)24", "paragraphs": ["On September 8, 2015, Lockheed Martin reportedly planned a protest with GAO, with a program spokesman stating the following:", "After evaluating the data provided at our debrief, Lockheed Martin has filed a protest of the award decision on the JLTV program. We firmly believe we offered the most capable and affordable solution for the program. Lockheed Martin does not take protests lightly, but we are protesting to address our concerns regarding the evaluation of Lockheed Martin's offer."], "subsections": []}, {"section_title": "Army Stops Work on the JLTV Contract26", "paragraphs": ["On September 10, 2015, the Army reportedly issued a stop-work order to Oshkosh, with a GAO spokesman noting, \"The Federal Acquisition Regulation requires contracting officers to automatically suspend performance on an awarded contract, following appropriate notification of a protest from GAO.\" On December 11, 2015, Lockheed Martin informed GAO that it would file its JLTV protest instead with the U.S. Court of Federal Claims. On December 15, 2015, GAO closed Lockheed Martin's protest \"without further action.\" With the GAO protest dismissed, the Army lifted its stop-work order to Oshkosh on December 15, 2015. The U.S. Court of Federal Claims denied Lockheed Martin's stop-work request on February 11, 2016, meaning Oshkosh could continue work associated with the JLTV contract until the court resolved the contract award dispute."], "subsections": []}, {"section_title": "Lockheed Martin Withdraws JLTV Protest from United States Court of Federal Claims30", "paragraphs": ["On February 17, 2016, Lockheed Martin reportedly withdrew its JLTV protest in the U.S. Court of Federal Claims. "], "subsections": []}]}, {"section_title": "JLTV LRIP Production Begins31", "paragraphs": ["On March 22, 2016, the Army reportedly placed a $243 million order with Oshkosh Defense to build 657 JLTVs, as well as 2,977 installation kits and related vehicle support LRIP items. The first JLTVs were delivered in September 2016."], "subsections": []}, {"section_title": "Delay in JLTV Initial Operating Capability (IOC)33", "paragraphs": ["Primarily due to program disruption resulting from the Lockheed Martin protest, the JLTV will not reach IOC in mid-2019 as originally planned. Instead, the Army anticipates a six-month delay in IOC until the end of 2019, and the Marine Corps IOC, originally expected for the fourth quarter of FY2018, will now be a year later in the first quarter of FY2020. Although these delays are significantly longer than the protest period, officials from both services noted their respective IOCs were adjusted to reflect delays in scheduled testing. "], "subsections": []}, {"section_title": "Army Places $100 Million Order for JLTVs34", "paragraphs": ["The Army reportedly ordered 258 JLTVs and 1,727 associated components in December 2017 for a total of $100.1 million, with the estimated contract completion date May 31, 2019. According to Oshkosh Defense, it had delivered more than 1,000 vehicles since October 2016, and soldiers and Marines were expected to start receiving JLTVs for operational use in FY2019. Also in FY2019, a full-rate production decision is expected, with an Army and Marine Initial Operating Capability (IOC) expected in early FY2020. "], "subsections": []}]}, {"section_title": "Recent JLTV Program-Related Developments", "paragraphs": [], "subsections": [{"section_title": "Army Selects JLTV to Serve as Its Interim Light Reconnaissance Vehicle (LRV)35", "paragraphs": ["The Army reportedly decided to use the JLTV as the platform for its upcoming Light Reconnaissance Vehicle (LRV) program, instead of procuring a new system. Army officials note the JLTV is an interim solution, largely based on costs associated with developing a new system, and, in the future, the Army could opt to pursue an original design for its LRV. It is not known whether additional JLTVs will need to be acquired under the Army's JLTV contract to meet LRV requirements. Reportedly, some Army officials want JLTVs that will serve as an LRV to have two more seats to accommodate scouts as well as a weapon larger than a .50 caliber machine gun, such as a 30 mm cannon. These modifications are viewed as necessary to increase the effectiveness of scout platoons as well as provide sufficient firepower to destroy enemy reconnaissance formations."], "subsections": []}, {"section_title": "Air Force JLTV Acquisition37", "paragraphs": ["In the near term, the Air Force plans to replace HMMWVs with JLTVs in its security forces, explosive ordnance disposal, pararescue, tactical air control, and special tactics units. Reportedly, the Air Force eventually would like to replace its entire 3,270 HMMWV fleet with JLTVs, but Air Force budget documents detail JLTV procurement only from FY2019 through FY2022. "], "subsections": []}, {"section_title": "Marines Increase JLTV Requirement to 9,091 Vehicles38", "paragraphs": ["The Marines reportedly plan to increase their JLTV requirement from 5,500 vehicles to 9,091 vehicles\u2014about a 65% increase over the Marines' original approved acquisition objective. Marine leadership reportedly wanted to acquire these additional vehicles as quickly as possible, budget permitting. In June 2017, Marine Corps officials reportedly noted it would take \"a couple of years\" to formally adjust their approved acquisition objective (AAO), meaning that eventually, JLTVs would account for approximately half of the Marines' light tactical vehicle fleet. "], "subsections": []}, {"section_title": "British Foreign Military Sales (FMS) Purchase of JLTV39", "paragraphs": ["The British Army will reportedly acquire 2,747 JLTVs, valued at more than $1 billion, through the Foreign Military Sales (FMS) process. The sale also includes an armor kit, spare tires, and fording gear, as well as training for vehicle operators and maintainers. "], "subsections": []}, {"section_title": "JLTV Procurement Extended One Year and Increased Total Program Cost41", "paragraphs": ["DOD reports both the Army and Marines have extended their procurement profiles due to program strategy changes, primarily due to updating the mix of vehicle variants and kits. The Army now plans to conclude its procurement in FY2036 and the Marines in FY2023. Total program costs have also increased to $28.03 billion (a 10.9% increase), primarily due to the increase in procurement profiles, increase in Marine Corps quantities to 9,091 vehicles, updates in vehicle configuration and kit mix for the Army, updates in vehicles and kits based on the vehicle configuration mix for the Marines, and an increase in other support and initial spares for the Army and Marines."], "subsections": []}, {"section_title": "DOD Inspector General (IG) Report and JLTV Production42", "paragraphs": ["A redacted May 2, 2018, DOD IG report notes that, while the Army and Marine Corps developed adequate test plans, the services have not demonstrated effective test results to prepare the JLTV program for full rate production. The IG's review of test results in August and September of 2017 determined the JLTV failed to meet all maintenance-related performance requirements. The IG suggested certain capabilities be developed to address the shortfall, but specifics were redacted in the public version of the report. The JLTV Program Executive Office (PEO) noted in response that the program would equip all JLTVs with the unspecified capability cited in the IG's report. "], "subsections": []}, {"section_title": "First Units Receive JLTV43", "paragraphs": ["On January 28, 2019, the first JLTVs were delivered to the 1 st Armored Brigade Combat Team (ABCT), 3 rd Infantry Division at Ft. Stewart, GA. Plans call for the 1 st ABCT to be equipped with about 500 JLTVs by the end of March 2019. It is not known if the 500 JLTVs have been fielded as of the date of this report. The Marines started fielding JLTVs at Camp Pendleton, CA, in February 2019, with initial operational capability planned for late summer 2019."], "subsections": []}, {"section_title": "Director, Operational Test and Evaluation (DOT&E)44 FY2018 Annual Report", "paragraphs": ["Among other things, DOT&E's FY2018 Annual Report contends the following:", "The JLTV General Purpose (GP), Heavy Guns Carrier (HGC), and Utility (UTL) variants are operationally effective for employment in combat and tactical missions. The JLTV Close Combat Weapons Carrier (CCWC) is not operationally effective for use in combat and tactical missions. The CCWC provides less capability to engage threats with the Tube-launched, Optically tracked, Wire-guided (TOW) missiles over the fielded High Mobility Multipurpose Wheeled Vehicle (HMMWV). The missile reload process is slow and difficult for crews. All JLTVs are not operationally suitable because of deficiencies in reliability, maintainability, training, manuals, crew situational awareness, and safety."], "subsections": []}, {"section_title": "JLTV Full-Rate Decision Delayed46", "paragraphs": ["Reportedly, the Army has decided to delay JLTV full-rate production, previously scheduled for December 2018, until the early summer of 2019, in order to assess options for vehicle design changes suggested by soldiers and marines during testing, potentially resulting in a program schedule breach. Reportedly, the full-rate production decision can be delayed until June 2019, but beyond that, it could trigger a Nunn-McCurdy breach, requiring, among other things, a report to Congress and a new program schedule."], "subsections": []}, {"section_title": "Marine Corps Addresses DOT&E Concerns and JLTV Fielding Plans48", "paragraphs": ["Marine Corps program officials reportedly have worked through a number of the problems addressed in DOT&E's FY2018 Annual Report. They suggest that many of the problems identified in the report can be addressed through improved tactics, techniques, and procedures and that some of the issues identified, such as insufficient training manuals, were a result of program decisions resulting from budget restrictions placed on the service. Marine officials also noted that legacy HMMWVs had similar challenges identified during testing in 1986, but these issues were resolved after fielding. In terms of reliability and maintainability, Marine officials noted HMMWVs go between 500 to 600 miles between operational mission failures, compared to the JLTV's requirement of 2,400 miles before operational mission failure, which the JLTV has surpassed during its developmental testing. Compared to HMMWVs, the JLTV is said to be less burdensome in terms of maintenance, although JLTV maintenance may take a little longer due to a need to remove armored panels and a more complex engine.", "The Marines reportedly plan to field its first 55 JLTVs to support units at training locations, including the School of Infantry West, School of Infantry East, and the Motor Transport Maintenance Instructional Company, by the end of May 2019. Beginning in July 2019, operational units are planned to receive their first vehicles (3 rd Battalion, 8 th Marines at Camp Lejeune, NC), which will also signify the Marines Initial Operational capability (IOC). By the end of FY2019, all three Marine Expeditionary Forces (MEFs)\u20141 st MEF in Camp Pendleton, CA; 2 nd MEF in Camp Lejeune, NC; and 3 rd MEF in Okinawa, Japan\u2014will have received some combination of all variants. "], "subsections": []}, {"section_title": "Army Reduces Overall JLTV Acquisition49", "paragraphs": ["On March 13, 2019, Army leadership reportedly announced the Army was considering lowering its overall requirement for JLTVs. In order to free up funding for modernization, the Army decided to cut funding over the next five years for 93 programs\u2014including the JLTV. Army officials noted the service already has 55,000 HMMWVs and 800 Infantry Squad Vehicles (ISVs), contending the Army \"has more capability than we need.\" Army officials reportedly were looking to lower the overall requirement for JLTVs and would determine \"a new top line requirement soon.\" On March 14, 2019, it was reported the Army planned to buy 1,900 fewer JLTVs than originally planned, reducing program funding by nearly $800 million over the Future Years Defense Plan (FYDP)."], "subsections": []}]}, {"section_title": "Department of Defense (DOD) FY2020 Budget Request53", "paragraphs": ["The FY2020 presidential budget request includes RDT&E and procurement funding requests, as well as FY2020-requested quantities in the base budget and Overseas Contingency Operations (OCO) budget request."], "subsections": []}, {"section_title": "Potential Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "DOD Inspector General's Report and DOT&E's FY2018 Annual Report Findings and Full-Rate JLTV Production", "paragraphs": ["A redacted May 2, 2018, DOD Inspector General's (IG's) report notes the Army and Marine Corps had not demonstrated effective test results to prepare the JLTV program for full-rate production. The IG's review of test results in August and September of 2017 determined the JLTV failed to meet all maintenance-related performance requirements. The IG suggested certain capabilities be developed to address the shortfall, but specifics were redacted in the public version of the report. DOT&E's FY2018 Annual Report noted the following:", "All JLTVs are not operationally suitable because of deficiencies in reliability, maintainability, training, manuals, crew situational awareness, and safety. The JLTV Close Combat Weapons Carrier (CCWC) is not operationally effective for use in combat and tactical missions. The CCWC provides less capability to engage threats with the Tube-launched, Optically tracked, Wire-guided (TOW) missiles over the fielded High Mobility Multipurpose Wheeled Vehicle (HMMWV). The missile reload process is slow and difficult for crews.", "Military officials involved with the JLTV program appear to be minimizing these findings, reportedly suggesting some of these unspecified problems are \"minor improvements identified by soldiers and Marines during testing.\" Another report alleges the Army \"did not respond to questions about the production decision nor the recent DOT&E report, which detailed several JLTV problems.\" The Army's decision to delay full-rate JLTV production affects not just the Army, but the other services as well, and can be considered a significant programmatic decision. To reconcile possible concerns, a detailed look at the DOD IG's and DOT&E's findings and the actions that will be required to rectify identified deficiencies could be in order. Such an examination could help policymakers determine if these deficiencies are minor in nature, or if more extensive and potentially time-consuming and expensive corrective actions will be required."], "subsections": []}, {"section_title": "What Are Potential Consequences of a Delayed Full-Rate JLTV Production Decision?", "paragraphs": ["While it is not yet known how any delay in full-rate JLTV production will affect the program, it might be considered prudent for policymakers to examine the potential consequences of a delayed full-rate production decision. While a minor delay not invoking a Nunn-McCurdy breach may be inconsequential or have a minimal impact, a longer delay, potentially triggering a Nun-McCurdy breach, could have significant consequences in terms of", "program schedule; program cost; service allocation of JLTVs; overall fielding plan; training and readiness of units receiving JLTVs; and potential Foreign Military Sales (FMS).", "Such an examination could prove useful to policymakers in the event that a full-rate production decision is significantly delayed, particularly in terms of both program oversight and FY2020 defense authorizations and appropriations discussions. "], "subsections": []}, {"section_title": "Implications of the New Top-Line JLTV Requirement", "paragraphs": ["The Army's March 14, 2019, announcement that it was planning to reduce its overall requirement for JLTVs by 1,900 vehicles to help free up funding for modernization raises potential issues for Congress. With the Army reportedly suggesting it has more light tactical vehicle capability than it needs with existing HMMWVs and ISVs, questions could arise as to the accuracy of the Army's original JLTV requirements process. Other questions could arise as well: With a revised overall JLTV requirement, what is the Army's new fielding plan to units? With fewer JLTVs to be fielded, what is the overall operational impact to the force? With an overall JLTV reduction, will the Army's Reserve Components receive fewer JLTVs than originally planned? Finally, will this new revised JLTV requirement be final, or is it possible the Army might again reduce overall JLTV requirements to free up funding for other higher-priority programs, or if future budget reductions are imposed on the Army?"], "subsections": []}]}]}}
{"id": "R45713", "title": "Terrorism, Violent Extremism, and the Internet: Free Speech Considerations", "released_date": "2019-05-06T00:00:00", "summary": ["Recent acts of terrorism and hate crimes have prompted a renewed focus on the possible links between internet content and offline violence. While some have focused on the role that social media companies play in moderating user-generated content, others have called for Congress to pass laws regulating online content promoting terrorism or violence. Proposals related to government action of this nature raise significant free speech questions, including (1) the reach of the First Amendment's protections when it comes to foreign nationals posting online content from abroad; (2) the scope of so-called \"unprotected\" categories of speech developed long before the advent of the internet; and (3) the judicial standards that limit how the government can craft or enforce laws to preserve national security and prevent violence.", "At the outset, it is not clear that a foreign national (i.e., a non-U.S. citizen or resident) could invoke the protections of the First Amendment in a specific U.S. prosecution or litigation involving online speech that the foreign national posted from abroad. The Supreme Court has never directly opined on this question. However, its decisions regarding the extraterritorial application of other constitutional protections to foreign nationals and lower court decisions involving speech made by foreign nationals while outside of the United States suggest that the First Amendment may not apply in that scenario. In contrast, free speech considerations are likely to be highly relevant in evaluating the legality of (1) proposals for the U.S. government to regulate what internet users in the United States can post, or (2) the enforcement of existing U.S. laws where the government seeks to hold U.S. persons liable for their online speech.", "Although the government typically can regulate conduct without running afoul of the First Amendment, regulations that restrict or burden expression often do implicate free speech protections. In such circumstances, courts generally distinguish between laws that regulate speech on the basis of its content (i.e., the topic discussed or the message expressed) and those that do not, subjecting the former to more stringent review. A law that expressly restricts online communications or media promoting violence or terrorism is likely to be deemed a content-based restriction on speech; whereas a law that primarily regulates conduct could be subject to a less stringent standard of review, unless its application to speech turns on the message expressed. Whether such laws would survive First Amendment scrutiny depends on a number of factors.", "Over the past 50 years, the Supreme Court has generally extended the First Amendment's free speech protections to speech that advocates violence in the abstract while allowing the government to restrict or punish speech that threatens or facilitates violence in a more specific or immediate way. The subtle distinctions that have developed over time are reflected in the categories of speech that the court has deemed unprotected, meaning that the government generally can prohibit speech in these areas because of its content. These include incitement to imminent lawless action, true threats, and speech integral to criminal conduct. Although judicial decisions have helped to define the scope of some of these categories, open questions remain as to how they apply in the context of online speech. For instance, legal scholars have questioned what it means for speech to incite \"imminent\" violence when posted to social media. They have also asked how threats should be perceived when made in the context of online forums where hyperbolic speech about violence is common.", "The extent to which the government can regulate speech promoting violence or terrorism also depends on whether its law or action satisfies the applicable level of scrutiny that the Court has developed to evaluate measures that restrict or burden speech. In general, laws that regulate protected speech on political or ideological matters are subject to strict scrutiny, a test that requires the government to demonstrate that its law is narrowly tailored to achieve a compelling governmental interest. Nevertheless, in some cases, courts have concluded that the government's national security interests justify restrictions on protected speech, such as in 2010 when the Supreme Court upheld certain applications of a federal statute prohibiting providing material support to U.S.-designated foreign terrorist organizations."], "reports": {"section_title": "", "paragraphs": ["A s the Supreme Court has observed, while the First Amendment protects the \"freedom of speech,\" it \"does not protect violence.\" But when speech promotes violence, a tension can form between the values of liberty and security. In an oft-quoted passage from a dissenting opinion, Justice Robert Jackson argued that the problems this tension creates are not insurmountable but must be confronted with a dose of pragmatism: a government can temper \"liberty with order,\" but to treat free speech as absolute threatens to \"convert the constitutional Bill of Rights into a suicide pact.\" While Justices of the Court have often disagreed over when free speech rights must yield to the government's interests, when it comes to speech promoting violence, the Court has rejected an all-or-nothing approach. Over the past 50 years, the Court has drawn a line between speech that advocates violence in the abstract and speech that facilitates it in a specific way, with the former receiving more robust constitutional protections. It has done so because, in the Court's view, upholding the First Amendment requires preserving \"uninhibited, robust, and wide-open\" debate on public issues, even if that means allowing individuals to express ideas that are \"deeply offensive to many.\" ", "In more recent years, some have begun to question whether and how the Court's decisions in this area should apply to speech online. The \"vast democratic fora of the Internet\" have provided ample platforms not only for those seeking to debate issues or express controversial views, but also for individuals and entities planning violent attacks or threatening violence online. Many policymakers and commentators, including some Members of Congress, have expressed concerns about the proliferation of social media content promoting terrorism and violence and the influence such speech can have on other internet users. Some have called on Congress to restrict or even prohibit such content, which raises the question of whether the First Amendment would allow such regulation. A number of legal scholars have explored these issues, and some have proposed recommendations to Congress about how best to address these concerns in accordance with the First Amendment. ", "Although governmental efforts to combat online content promoting terrorism or violence could take a number of forms, this report focuses on the First Amendment implications of imposing civil or criminal liability on individual internet users (i.e., the originators of the content) rather than the social media companies or internet service providers themselves. As such, it focuses on the underlying First Amendment issues that are likely to be common to both forms of government action, but does not discuss the additional considerations attendant to regulating a social media platform, which are the subject of another CRS report. The report begins with some background on the use of the internet by terrorist groups and the reported influence of online content on certain individuals accused of committing violent attacks. It then considers the question of who can invoke the First Amendment by analyzing whether its free speech protections apply to foreign nationals when they post online content from abroad, for example, in circumstances such as U.S. prosecutions where online content is introduced as evidence of a crime. The report then discusses the overarching First Amendment principles that bear on what the government may regulate under the First Amendment, including (1)\u00a0the distinction between regulating conduct and speech; (2)\u00a0the presumed invalidity of content-based laws; and (3)\u00a0relevant \"unprotected\" categories of speech that generally can be restricted because of their content. The report next discusses the strict scrutiny standard and the overbreadth doctrine, which impose limitations on how the government can regulate by requiring that laws restricting speech be sufficiently tailored and not so broad as to chill protected speech. Finally, the report concludes with some considerations for Congress in evaluating the constitutionality of regulating online content promoting terrorism or violence."], "subsections": [{"section_title": "Background", "paragraphs": ["According to the Federal Bureau of Investigation (FBI), the internet and, in particular, the use of social media are among the key \"factors [that] have contributed to the evolution of the terrorism threat landscape\" since the September 11, 2001, terrorist attacks. Certain organizations that track or study hate crimes also cite the internet as a tool used to intimidate and harass people because of their race, ethnicity, religion, sexual orientation, or other attributes. At the same time, some commentators have questioned the purported link between what some refer to as \"hate speech\" and bias-motivated crimes or have expressed concern that focusing on the ideological motivations of speakers has led to calls to criminalize protected speech divorced from any criminal intent or action. ", "While the nature or extent of the relationship between online speech and criminal conduct may be disputed, the use of the internet by terrorist groups is well documented. U.S.-designated terrorist groups such as the Islamic State (also known as ISIS or ISIL), Al Qaeda, Hamas, and Al Shabaab, have long used social media to disseminate their ideologies and recruit new members to their causes. The Islamic State group has used Twitter and YouTube to disseminate videos of its fighters executing prisoners and to claim credit for attacks around the world. Al Shabaab used Twitter to claim credit for the 2013 attack on the Westgate Shopping Mall in Nairobi, Kenya, and to distribute information about the attack while it unfolded. News outlets are also beginning to examine how the alleged perpetrator of the March 2019 terrorist attacks on two mosques in New Zealand may have used social media to announce and promote his actions.", "In addition, the internet reportedly has played a key role in certain individuals' personal \"journey[s] to terrorism\" or violent extremism \u2014a process often referred to as \"radicalization.\" For example, the person convicted of killing nine black parishioners in a South Carolina church in 2015 was said to have \"self-radicalized\" online, adopting a \"white supremacy extremist ideology, including a belief in the need to use violence to achieve white supremacy.\" In 2015, it was reported that \"the digital legacy\" of Anwar al Awlaki\u2014a U.S. citizen who became closely involved with Al Qaeda's affiliate in Yemen and was targeted and killed by a U.S. drone strike there\u2014influenced the ideologies of certain individuals accused or convicted of terrorist activities, including the Boston Marathon bombers. ", "Speech advocating violence and terrorism is prohibited by the terms of service of Facebook, Twitter, and certain other social media outlets. Such prohibitions are permissible under current judicial interpretations of First Amendment law because these platforms are operated by private actors, and the First Amendment constrains only state (i.e., government) action. Although the more established sites reportedly have increased their efforts to disable accounts that are associated with terrorist groups or remove content promoting terrorism or violence, it is not clear how comprehensive or successful these efforts have been. Moreover, users banned from one platform may move to another online forum that does not have the same restrictions, sometimes finding a community of like-minded individuals who reinforce or escalate their violent rhetoric (sometimes referred to as \"echo chambers\").", "As previously noted, this report focuses on the First Amendment considerations relevant to government regulation of online content promoting terrorism or violence. Because of the global reach of many online platforms, this report begins with the threshold question of the First Amendment's reach, and in particular, whether it applies to foreign nationals posting online content from outside of the United States. "], "subsections": []}, {"section_title": "The First Amendment and Foreign Speakers", "paragraphs": ["While the First Amendment may extend to U.S. citizens speaking abroad or foreign nationals speaking within the United States under some circumstances, the Supreme Court has not directly opined on whether the First Amendment applies to online content that a foreign national posts while located outside of the United States. Nevertheless, the Court's decisions involving the extraterritorial reach of other constitutional protections, as well as lower court decisions involving the First Amendment rights of foreign nationals, suggest that foreign nationals may face barriers in claiming First Amendment protections for such speech. ", "The Supreme Court's decision in United States v. Verdugo-Urquidez \u2014though it involves the Fourth Amendment\u2014is instructive. In that case, the Court held that the Fourth Amendment, which \"prohibits 'unreasonable searches and seizures,'\" did not extend to the search of a Mexican citizen's home in Mexico by U.S. authorities. The Court reasoned that in contrast to the Fifth and Sixth Amendments, which concern trial rights and procedures, the Fourth Amendment applies regardless of the prospect of trial, and \"a violation of the Amendment is 'fully accomplished' at the time of an unreasonable governmental intrusion.\" As such, any violation would have \"occurred solely in Mexico.\" Four of the five Justices who joined the majority opinion reasoned that the Fourth Amendment reserves its protections to \"the people,\" which they interpreted as a \"term of art employed in select parts of the Constitution.\" In the view of those Justices, a textual analysis of the Constitution suggested that \"'the people' protected by the Fourth Amendment, and by the First and Second Amendments,\" meant \"a class of persons who are part of a national community or who have otherwise developed sufficient connection with this country to be considered part of that community.\" Because the defendant had \"no voluntary attachment to the United States\" at the time of the search, he could not claim the protections of the Fourth Amendment. ", "At least two sitting Supreme Court justices\u2014Justices Clarence Thomas and Brett Kavanaugh\u2014have suggested that the First Amendment does not apply to foreign nationals abroad, citing to Verdugo-Urquidez . The discussion that more directly addressed the applicability of free speech protections to foreign nationals came from then-Judge Brett Kavanaugh in a 2014 case involving the United States' prosecution of an Al Qaeda associate. In that case, a U.S. military commission convicted a personal assistant to Osama bin Laden for, among other things, conspiracy to commit war crimes. The defendant \"claim[ed] that he was unconstitutionally prosecuted for his political speech, including his production of [an] al Qaeda recruitment video celebrating the terrorist attack on the U.S.S. Cole .\" When the case, Al Bahlul v. United States , first reached the full U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit), the court ruled on a different legal question and remanded the case for consideration of the First Amendment challenge. However, Judge Kavanaugh authored a separate opinion, in part to address the First Amendment's applicability. He stated that \"although non-U.S. citizens arguably may have some First Amendment rights at [a U.S. military base in] Guantanamo or in other U.S. territories for any speech they engage in there , non-U.S. citizens have no First Amendment rights abroad in foreign countries.\" ", "The Supreme Court has applied the Constitution to aliens in the United States and in U.S. territories, but has not extended constitutional rights to aliens in foreign countries. See Boumediene v. Bush , 553 U.S. 723, 768-71 (2008) (applying Article I, Section 9 to U.S. Naval base at Guantanamo, which was \"[i]n every practical sense . . . not abroad\"); United States v. Verdugo-Urquidez , 494 U.S. 259 (1990) (declining to apply Fourth Amendment to search and seizure of alien's property in Mexico); Johnson v. Eisentrager , 339 U.S. 763 (1950) (declining to apply habeas corpus right to U.S.-controlled military prison in Germany); see also Al Maqaleh v. Hagel , 738 F.3d 312 (D.C. Cir. 2013) (declining to apply habeas corpus right to U.S. military base in Afghanistan); Al Maqaleh v. Gates , 605 F.3d 84 (D.C. Cir. 2010) (same). Therefore, [the defendant] had no First Amendment rights as a non-U.S. citizen in Afghanistan when he led bin Laden's media operation.", "Two years later, the full D.C. Circuit took up the Al Bahlul case again following remand. This time, the court squarely rejected the defendant's First Amendment challenge, citing the concurring opinions of Judge Kavanaugh, Judge Patricia Millett, and Judge Robert Wilkins, who all concluded that the defendant could not avail himself of the First Amendment's protections. Thus, as the D.C. Circuit phrased it in a prior decision, \"aliens beyond the territorial jurisdiction of the United States are generally unable to claim the protections of the First Amendment.\"", "Nevertheless, \"[i]n a variety of contexts th[e] Court has referred to a First Amendment right to 'receive information and ideas.'\" In order to preserve this right, the Court has largely rejected governmental attempts to control information because of how the government views that information. For example, in Lamont v. Postmaster Gen eral , the Court held that a federal statute requiring the Postal Service to withhold foreign mailings classified as \"communist political propaganda\" from addressees unless they requested delivery of the mailings in writing amounted \"to an unconstitutional abridgment of the addressee's First Amendment rights.\" The Court concluded that the \"regime of this Act is at war with the 'uninhibited, robust, and wide-open' debate and discussion that are contemplated by the First Amendment.\" ", "Whether or when the government must observe the First Amendment in its interactions with foreign nationals in order to preserve the rights of U.S. citizens is uncertain. As then\u2013D.C. Circuit Judge Ruth Bader Ginsburg noted in a dissenting opinion, \"[t]he [F]irst [A]mendment secures to persons in the United States the respect of our government for their right to communicate and associate with foreign individuals and organizations.\" Referring to Lamont , she observed that \"the first federal law the Supreme Court ever held violative of the [F]irst [A]mendment involved a condition on international correspondence\u2014a restraint on delivery of mail from abroad.\" While finding it unnecessary to decide in that case \"whether the [F]irst [A]mendment limits the actions of U.S. officials in their dealings with foreign parties,\" Judge Ginsburg noted the following principle from the Restatement (Third) of Foreign Relations : ", "The provisions of the United States Constitution safeguarding individual rights generally control the United States government in the conduct of its foreign relations as well as in domestic matters, and generally limit governmental authority whether it is exercised in the United States or abroad, and whether such authority is exercised unilaterally or by international agreement.", "Judge Ginsburg concluded by stating that she \"would hesitate long before holding that in a United States-foreign citizen encounter, the amendment we prize as 'first' has no force in court.\"", "Based on these principles and decisions, there may be some cases involving social media content posted by foreign nationals that implicate the free speech rights of U.S. citizens, who may be members of the particular online forum or otherwise have access to it. However, there could be prudential limitations on a foreign national's ability to assert those rights. And, even if a court concludes that a particular foreign national has standing in a given case, it is not clear that the First Amendment would protect his or her online activities based solely on the purported interests of other Internet users. ", "In contrast, the Supreme Court has recognized that U.S. citizens regularly exercise First Amendment rights when communicating online, so free speech protections are more directly in play when considering the United States' regulation of its own citizens' online speech. Accordingly, the remainder of this report discusses the principles that bear on the government's ability to regulate online content promoting terrorism or violence when there is no dispute about the First Amendment's applicability. "], "subsections": []}, {"section_title": "The Conduct Versus Speech Distinction", "paragraphs": ["A key initial consideration in evaluating whether a law or a particular application of that law comports with the First Amendment is whether the law at issue regulates conduct or speech . The distinction is sometimes elusive because speech may occur during a course of conduct, and actions themselves can sometimes be inherently expressive or \"symbolic\" speech protected by the First Amendment. As a potential starting point, a law typically regulates conduct if it dictates what the regulated persons or entities \"must [or must not] do . . . not what they may or may not say .\" But the touchstone for deciding whether such a law implicates the First Amendment appears to be whether the law targets expression. To determine whether a law targets expression and depending on the facts of the case, a court might consider (1)\u00a0the express terms (i.e., \"the face\") of the law, (2)\u00a0the purpose of the law, or (3)\u00a0its practical application to see whether the law is directed at certain content or speakers or applies to the challenger's activities solely as a result of what that party seeks to communicate.", "If a law does not target expression, the First Amendment extends the government more leeway to regulate that activity even if the regulation incidentally burdens speech. As the Supreme Court has explained, ", "[R]estrictions on protected expression are distinct from restrictions on economic activity or, more generally, on nonexpressive conduct. . . . [T]he First Amendment does not prevent restrictions directed at commerce or conduct from imposing incidental burdens on speech. That is why . . . \"an ordinance against outdoor fires\" might forbid \"burning a flag\" . . . . ", "However, the conduct-focused nature of a law does not necessarily preclude First Amendment review where the government seeks to penalize a person under that law because of ideas or messages that person communicated.", "The Supreme Court applied these principles in its 2010 decision in Holder v. Humanitarian Law Project , which involved the constitutionality of a federal statute concerning the provision of material support to U.S.-designated foreign terrorist organizations (FTOs). The statute imposes criminal penalties on anyone who \"knowingly provides material support or resources to [an FTO], or attempts or conspires to do so.\" It defines \"material support or resources\" in relevant part as \"any property, tangible or intangible, or service, including . . . training, expert advice or assistance, . . . false documentation or identification, communications equipment, . . . personnel (1 or more individuals who may be or include oneself) . . . , except medicine or religious materials.\" In Humanitarian Law Project , a group of U.S. citizens and domestic organizations brought a preenforcement challenge to the law, arguing that it would be unconstitutional to punish them for the types of support that they wished to provide to two FTOs. Specifically, the plaintiffs sought to (1)\u00a0train members of one FTO on how to use humanitarian and international law in peaceful dispute resolution; (2) teach that FTO's members how to petition international organizations for relief; and (3)\u00a0engage in political advocacy for the rights of certain groups, including by supporting one of the FTOs \"as a political organization\" for this purpose. After concluding that most of these activities clearly constituted \"training\" or \"expert advice or assistance\" under the law, the Court proceeded to address the First Amendment implications of applying the statute to the plaintiffs' activities. ", "The Humanitarian Law Project Court rejected the \"extreme positions\" advanced by both sides. On the one hand, it rejected the plaintiffs' contention that the statute banned their \"pure political speech,\" noting that the law did not prevent the plaintiffs from becoming members of the FTOs, speaking and writing freely about these organizations, or engaging in independent advocacy. The Court reasoned that \"Congress has prohibited 'material support,' which most often does not take the form of speech at all. And when it does, the statute is carefully drawn to cover only a narrow category of speech to, under the direction of, or in coordination with foreign groups that the speaker knows to be terrorist organizations.\" On the other hand, the Court rejected the government's position that applying the law to the plaintiffs' activities implicated only conduct, not speech. It reasoned that the law itself \"regulates speech on the basis of its content\" because whether plaintiffs are subject to prosecution \"depends on what they say.\" Referring to the statutory definitions of \"training\" and \"expert advice or assistance,\" the Court noted that if the plaintiffs' speech to the organizations \"imparts a 'specific skill' or communicates advice derived from 'specialized knowledge'\u2014for example, training on the use of international law or advice on petitioning the United Nations\u2014then it is barred.\" Even if the law \" generally functions as a regulation of conduct,\" the Court reasoned, in these circumstances, \"as applied to plaintiffs the conduct triggering coverage under the statute consists of communicating a message.\" As discussed in more detail infra , the Court ultimately held that the material support statute did not violate the First Amendment as applied to the plaintiffs' proposed activities because the challenged statutory prohibitions were necessary to further the government's asserted interests in combating terrorism. ", "Unlike a law involving \"material support,\" which, in the Court's view, \"most often\" takes the form of conduct rather than speech, a law that expressly prohibits or restricts, for example, social media posts promoting terrorism or violence would more clearly involve speech because of its central focus on communications. Although the Supreme Court has not had many occasions to consider laws that expressly restrict online content, in a First Amendment challenge to a federal law that restricted the online transmission of certain \"indecent\" and \"patently offensive\" content, both the parties and the Court evaluated the law as regulating speech, not conduct. "], "subsections": []}, {"section_title": "Content-Based Laws", "paragraphs": ["Once it is established that a law regulates speech, the next consideration is whether it does so on the basis of content. First Amendment law historically has distinguished between laws that restrict speech because of its content or viewpoint and those that do not draw content-based distinctions or that have a content-neutral justification. Although the Justices of the Court have sometimes disagreed over whether a particular law is content-based for First Amendment purposes, the Court has largely settled on the following definition: ", "Government regulation of speech is content based if a law applies to particular speech because of the topic discussed or the idea or message expressed. This commonsense meaning of the phrase \"content based\" requires a court to consider whether a regulation of speech \"on its face\" draws distinctions based on the message a speaker conveys. Some facial distinctions based on a message are obvious, defining regulated speech by particular subject matter, and others are more subtle, defining regulated speech by its function or purpose.", "Courts scrutinize content-based distinctions because of the potential for the government to silence speech with which it disagrees by prohibiting or imposing special burdens on an entire category of speech: \"content discrimination 'raises the specter that the Government may effectively drive certain ideas or viewpoints from the marketplace.'\" Justice Anthony Kennedy wrote in a case involving federal restrictions on the transmission of sexually explicit cable programming: \"The history of the law of free expression is one of vindication in cases involving speech that many citizens may find shabby, offensive, or even ugly. It follows that all content-based restrictions on speech must give us more than a moment's pause.\" The Supreme Court has repeatedly stated that content-based laws are \"presumptively unconstitutional\" and subject to the Court's most stringent review, at least insofar as they involve fully protected speech. In current First Amendment parlance, such laws must survive \"strict scrutiny,\" meaning that the government must demonstrate that they are narrowly tailored to serve compelling governmental interests. ", "Under the Court's current formulation, a law that expressly regulates what topics can be discussed in a social media post would likely be considered a \"content-based\" restriction on speech, as the regulation \"applies to particular speech because of the topic discussed or the idea or message expressed.\" As such, as a general matter, such a law would likely be subject to strict scrutiny and presumptively invalid. However, this level of scrutiny may not apply if the regulated content falls within a category of speech that the Court has said is not fully protected, as discussed in the next section."], "subsections": []}, {"section_title": "Protected and Unprotected Speech", "paragraphs": ["If a law regulates speech, the next consideration in the First Amendment analysis is whether that speech is considered protected (sometimes referred to as \"fully protected\" ) or instead falls within one of the narrow categories of so-called \"unprotected\" speech (sometimes referred to as the First Amendment's \"exceptions\" ) recognized by the Supreme Court. Such categories are not determinative of whether a law is constitutional, but the government generally has greater leeway to regulate unprotected speech based on its content. ", "The Supreme Court has long considered political and ideological speech to be at the \"core\" of the First Amendment and the ability to exchange ideas to be integral to a functioning democracy. ", "Our cases have often noted the close connection between our Nation's commitment to self-government and the rights protected by the First Amendment. . . .", "The First Amendment creates \"an open marketplace\" in which differing ideas about political, economic, and social issues can compete freely for public acceptance without improper government interference. The government may not prohibit the dissemination of ideas that it disfavors, nor compel the endorsement of ideas that it approves.", "These principles extend even to speech that many would consider to be deeply offensive or hateful. Accordingly, a law that restricts speech concerning \"politics, nationalism, religion, or other matters of opinion\" generally receives strict scrutiny. ", "But the First Amendment does not just protect core political and ideological speech. Even in cases involving speech historically considered to have lower \"social value,\" the government generally \"has no power to restrict expression because of its message, its ideas, its subject matter, or its content.\" The same is generally true for speech that the legislature considers \"too harmful to be tolerated,\" as the government generally may not proscribe speech based on its content unless that speech falls within one of the narrow categories of unprotected speech recognized by the Supreme Court. Three of those categories are of particular relevance in the context of online speech that promotes terrorism or violence. "], "subsections": [{"section_title": "(1) Brandenburg's Incitement Standard", "paragraphs": ["In 1969, in Brandenburg v. Ohio , the Supreme Court considered a state law that prohibited \"advocat[ing]\u00a0.\u00a0.\u00a0.\u00a0the duty, necessity, or propriety of crime, sabotage, violence, or unlawful methods of terrorism as a means of accomplishing industrial or political reform.\" The state convicted a Ku Klux Klan leader of violating the statute based on films of a Klan rally that showed, among other things, hooded figures carrying firearms burning a cross and included, in the Court's words, \"scattered phrases\u00a0.\u00a0.\u00a0.\u00a0that were derogatory of Negroes and, in one instance, of Jews.\" During a speech, the defendant stated, \"We're not a revengent organization, but if our President, our Congress, our Supreme Court, continues to suppress the white, Caucasian race, it's possible that there might have to be some revengeance taken.\" The Supreme Court reversed the defendant's conviction, concluding that the statute, by punishing \"mere advocacy and [forbidding], on pain of criminal punishment, assembly with others merely to advocate the described type of action\" violated the First Amendment. Effectively establishing a three-part test, the Court held that \"the constitutional guarantees of free speech and free press do not permit a State to forbid or proscribe advocacy of the use of force or of law violation except where such advocacy is [1] directed to inciting or producing [2] imminent lawless action and [3] is likely to incite or produce such action.\" The Court reiterated that \"the mere abstract teaching . . . of the moral propriety or even moral necessity for a resort to force and violence, is not the same as preparing a group for violent action and steeling it to such action.\"", "Supreme Court cases since Brandenburg have helped to elucidate its \"directed to,\" \"imminence,\" and \"likelihood\" requirements to some degree\u2014though not in the specific context of internet speech. Hess v. Indiana involved a conviction for disorderly conduct stemming from an anti-war rally at which the defendant shouted, \"We'll take the [expletive] street later.\" The Court overturned the defendant's conviction because his statement, though made to a crowd of people, \"was not directed to any person or group of persons\" and \"amounted to nothing more than advocacy of illegal action at some indefinite future time.\" In the Court's words, \"there was no evidence, or rational inference from the import of the language, that his words were intended to produce, and likely to produce, imminent disorder.\" ", "Some argue that the Hess decision suggests that the Court views the \"imminence\" requirement to mean that violence must be likely to occur immediately as a result of the speech at issue. State and federal courts have not always applied Hess or the imminence requirement of Brandenburg so strictly. For example, in People v. Rubin , a California state court ruling, the defendant was charged with solicitation of murder. During a press conference to protest an upcoming march by the American Nazi Party through Skokie, IL, the defendant offered money to anyone who \"kills, maims, or seriously injures a member of the American Nazi Party.\" He added, \"This is not said in jest, we are deadly serious.\" The trial court concluded that his speech was protected by the First Amendment, but the state appeals court reversed in a split decision with one judge dissenting. Analogizing criminal solicitation to incitement, the appeals court applied Brandenburg 's imminence and likelihood requirements and concluded that both were satisfied even though the march in Skokie was not scheduled to take place until five weeks after the defendant had spoken. The court wrote that \"time is a relative dimension and imminence a relative term, and the imminence of an event is related to its nature.\u00a0.\u00a0. . We think solicitation of murder in connection with a public event of this notoriety, even though five weeks away, can qualify as incitement to imminent lawless action.\" ", "Supreme Court decisions after Hess suggest that whether strong rhetoric is directed to inciting or producing imminent lawless action depends on the context in which the statements at issue were made\u2014and to some degree, whether violence actually resulted. In NAACP v. Claiborne Hardware Co. , \"17 white merchants\" filed suit against the NAACP, its Field Secretary in Mississippi, and over a hundred other individuals involved in a \"boycott of white merchants in Claiborne County, [Mississippi],\" that was organized to protest racial discrimination, alleging tortious interference with trade. In relevant part, at issue were claims arising from certain speeches that the Field Secretary, Charles Evers, made during the middle of the boycott. In the wake of the shooting and killing of \"a young black man . . . during an encounter with two Port Gibson police officers,\" which led to mounting \"[t]ension in the community\" and \"sporadic acts of violence,\" Evers allegedly stated that \"boycott violators would be 'disciplined'\" and that if anyone was caught entering the boycotted stores, \"we're gonna break your damn neck.\" ", "The Claiborne Hardware Court held that Evers was not liable to the boycotted store owners for their economic losses because his speech was protected under the First Amendment. The Court acknowledged that \"[i]n the passionate atmosphere in which the speeches were delivered, they might have been understood as inviting an unlawful form of discipline or, at least, as intending to create a fear of violence whether or not improper discipline was specifically intended.\" Still, the Court held, \"[t]he emotionally charged rhetoric . . . did not transcend the bounds of protected speech set forth in Brandenburg \" because the \"strong language\" used was part of \"lengthy addresses\" that \"generally contained an impassioned plea for black citizens to unify, to support and respect each other, and to realize the political and economic power available to them .\" Of potential significance, the Court noted that \"a substantial question [as to the defendant's liability] would be presented\" if that language \"had been followed by acts of violence,\" but there was no evidence of violence occurring after the challenged statements. ", "In a later case, Texas v. Johnson , involving a criminal defendant's First Amendment challenge to his prosecution for burning a flag during a political protest, the Supreme Court ruled for the defendant, finding it notable that despite the allegedly \"disruptive behavior of the protestors during their march . . . no actual breach of the peace occurred at the time of the flagburning or in response to the flagburning.\" The Court added that in such circumstances, the \"likel[ihood]\" of imminent lawless action under Brandenburg cannot be inferred merely because an audience may take \"serious offense\" to particular expression. The Court explained,", "[A] principal \"function of free speech under our system of government is to invite dispute. It may indeed best serve its high purpose when it induces a condition of unrest, creates dissatisfaction with conditions as they are, or even stirs people to anger.\" Terminiello v. Chicago , 337 U.S. 1, 4 (1949). It would be odd indeed to conclude both that \"if it is the speaker's opinion that gives offense, that consequence is a reason for according it constitutional protection,\" FCC v. Pacifica Foundation , 438 U.S. 726, 745 (1978) (opinion of Stevens, J.), and that the government may ban the expression of certain disagreeable ideas on the unsupported presumption that their very disagreeableness will provoke violence.", "Thus, the Court reasoned, to equate the potential for violence with speech \"directed to\" and \"likely to\" incite or produce such action would be to \"eviscerate [the Court's] holding in Brandenburg .\"", "Scholars and commentators have noted the limits of the Brandenburg incitement doctrine when it comes to regulating content on social media. In particular, many have questioned what constitutes \"imminence\" when speech is made in an online forum rather than in connection with a specific event where violence or unrest might be anticipated. Others have questioned how the \"directed to\" or \"likelihood\" prongs of the test operate when speech is made to an unknown audience of internet users rather than an assembled group in person. ", "In applying Brandenburg to internet speech, a few lower courts have identified certain types of content that may not constitute incitement but might constitute a true threat, another category of unprotected speech discussed below. For example, the Third Circuit has stated that \"merely posting information on unlawful acts that have already occurred, in the past, does not incite future, imminent unlawful conduct,\" but held that under the circumstances of that case, the defendants' use of \"past incidents to instill fear in future targets\" amounted to unprotected speech. That circuit also observed in dicta in another case that Brandenburg might allow the government to obtain an injunction to \"restrain a website published by a hate group naming specific groups or individuals as targets, or specifying instructions for committing a crime.\""], "subsections": []}, {"section_title": "(2) \"True Threats\"", "paragraphs": ["As with incitement of the Brandenburg variety, the government may prohibit some forms of intimidation such as \"true\" threats. True threats occur when the speaker \"means to communicate a serious expression of an intent to commit an act of unlawful violence to a particular individual or group of individuals,\" even if the speaker does not \"actually intend to carry out the threat.\" In this way, the doctrine focuses on the harms related to the message the speaker communicates rather than the possibility that it will stir others to commit violent acts. Like the line between incitement and \"mere advocacy\" that the Court drew in Brandenburg , the Supreme Court has distinguished true threats from \"political hyperbole.\" ", "In Watts v. United States \u2014the 1969 decision coining the phrase \"true threat\"\u2014the Court held that a statute that prohibited any person from \"knowingly and willfully .\u00a0. . [making] any threat to take the life of or to inflict bodily harm upon the President of the United States\" was \"constitutional on its face.\" But the Court ruled that it was improperly applied to an individual who, in the course of expressing opposition to the draft during a public rally, stated, \"If they ever make me carry a rifle the first man I want to get in my sights is L.B.J. .\u00a0. . They are not going to make me kill my black brothers.\" The Court reasoned that this \"kind of political hyperbole\" was not a \"true 'threat'\" within the meaning of the statute because \"[the Court] must interpret the language Congress chose 'against the background of a profound national commitment to the principle that debate on public issues should be uninhibited, robust, and wide-open, and that it may well include vehement, caustic, and sometimes unpleasantly sharp attacks on government and public officials.'\" ", "Nearly 35 years later, in Virginia v. Black , the Supreme Court applied the true threats doctrine in a case involving a state law prohibiting cross burning with the intent to intimidate. The Court explained that \"[i]ntimidation in the constitutionally proscribable sense of the word is a type of true threat, where a speaker directs a threat to a person or group of persons with the intent of placing the victim in fear of bodily harm or death.\" The Court held that \"[t]he First Amendment permits [a state] to outlaw cross burnings done with the intent to intimidate because burning a cross is a particularly virulent form of intimidation.\" A plurality of the Court went on to conclude that the particular statute before it was unconstitutional insofar as it included a presumption making cross burning \"prima facie evidence of an intent to intimidate a person or group of persons.\" They reasoned that such a presumption would likely result in convictions in any cross-burning case regardless of the purpose of the cross burning and therefore chill protected speech.", "While some scholars have cited the true threats doctrine as one avenue for the government to regulate social media content promoting terrorism or violence, others have argued that the Supreme Court's decisions in this area may provide inadequate guidance for distinguishing between real threats online and protected expression, particularly in cases where judges do not share the same linguistic frame of reference as members of a particular online community. ", "This year, the Supreme Court declined to review the Pennsylvania Supreme Court's interpretation of the true threats doctrine in a case involving alleged \"terroristic threats\" posted to social media. In Commonwealth v. Knox , the state court considered whether the defendant had a First Amendment right to publish \"a rap-music video containing threatening lyrics directed to named law enforcement officers,\" including two officers who were scheduled to testify against him in a pending criminal case. The defendant argued that he never intended for the video to be uploaded to social media (in that case, YouTube and Facebook) and that the song was a way to express himself and was not meant to be taken literally. Several organizations filed briefs in support of the defendant, noting, among other things, the defendant's status as a semiprofessional rap artist and the First Amendment protections accorded to speech about violence in other forms of media. ", "The Pennsylvania Supreme Court held that the song constituted a true threat. It began by observing that although \"First Amendment freedoms apply broadly to different types of expression,\" and while the government \"generally lacks the authority to restrict expression based on its message, topic, ideas, or content,\" speech that \"threatens unlawful violence can subject the speaker to criminal sanction\" under the true threats doctrine. The court explained that while the Watts decision suggested that courts should use a \"contextual,\" \"objective\" standard in determining whether speech constituted a \"true threat,\" courts since Virginia v. Black \"have disagreed over whether the speaker's subjective intent to intimidate is relevant in a true-threat analysis.\" For its part, the Pennsylvania Supreme Court read the opinions in the Black case to mean that the \"First Amendment necessitates an inquiry into the speaker's mental state,\" which can be discerned from context. After reviewing the lyrics in the defendant's song, the court concluded that certain \"aspects of the song tend to detract from any claim that [the defendant's] words were only meant to be understood as an artistic expression of frustration\"; namely, that the song \"mentions [two police officers] by name, stating that the lyrics are 'for' them,\" and \"proceeds to describe in graphic terms how [the defendant] intends to kill those officers.\" The court also noted that the lyrics were \"tied to interactions which had recently taken place between [the defendant and the named officers],\" and that the named officers responded to hearing them by taking measures to enhance their safety. With respect to the song's publication online, the court stated that \"although the song was not communicated directly to the police and a third party uploaded it to YouTube, this factor does not negate an intent on [the defendant's] part that the song be heard by the officers.\" The court accepted the lower courts' findings that the defendant \"either intended for the song to be published or knew publication was inevitable,\" particularly where a link to the YouTube video was later posted on a Facebook page thought to belong to a codefendant who helped to write and record the song.", "The case law to date on online communications demonstrates that not all forms of alleged intimidation are analyzed under the true threats doctrine. In a lower court case involving state tort claims for invasion of privacy and intentional infliction of emotional distress, a federal district court in Montana rejected the First Amendment arguments of the defendant, an \"alt-right website\" publisher accused of launching an anti-Semitic \"troll storm\" against the plaintiff after publishing several articles accusing her of \"extortion\" in business discussions with the \"mother of [a] prominent neo-Nazi.\" The defendant allegedly published the plaintiff's \"phone numbers, email addresses, and social media profiles, as well as those of her husband, twelve-year-old son, friends, and colleagues\" after which she and her family \"received more than 700 disparaging and/or threatening messages over phone calls, voicemails, text messages, emails, letters, social media comments, and Christmas cards.\" According to the court, the defendant had \"called for 'confrontation' and 'action,' but he also told readers to avoid illegal activity.\" In denying the defendant's motion to dismiss, the court did not analyze the defendant's speech as a true threat or any other category of unprotected speech, reasoning that \"there is no categorical exception to the First Amendment for harassing or offensive speech.\" Instead, it considered whether it was clear from the pleadings that the defendant was speaking on a matter of public concern, which might give rise to a First Amendment defense under Supreme Court precedent. The court concluded that the plaintiff had \"made a plausible claim that [the defendant's] speech involved a matter of strictly private concern.\" The court reasoned that although the defendant \"drew heavily on his readers' hatred and fear of ethnic Jews, rousing their political sympathies, there is more than a colorable claim that he did so strictly to further his campaign to harass [the plaintiff]\" because of \"a perceived conflict\" between the plaintiff and his friend's mother."], "subsections": []}, {"section_title": "(3) Speech Integral to Criminal Conduct", "paragraphs": ["Like incitement and true threats, speech that is integral to criminal conduct is considered unprotected under the Court's First Amendment jurisprudence. This exception has sometimes been used to explain why the government may proscribe so-called \"inchoate crimes\u2014acts looking toward the commission of another crime\" such as conspiracy, solicitation, and attempt. Although these acts typically involve speech, the speech is \"intended to induce or commence illegal activities\" and thus is \"undeserving of First Amendment protection.\" Once again, the Supreme Court has distinguished in this context between \"proposal[s] to engage in illegal activity\" and \"the abstract advocacy of illegality,\" extending the First Amendment's protections to the latter type of speech. However, as one district court has observed, the \"line between advocacy and action\" can be \"a hazy one,\" particularly in the case of inchoate offenses where the \"action\" that the law criminalizes \"may be minor or look benign.\"", "Some courts have cited the speech integral to criminal conduct doctrine in rejecting First Amendment challenges to criminal convictions based on online communications. However, the scope of the doctrine, particularly as it applies in the internet context, is not clear. One scholar has suggested that \"[h]aving to show that something on social media is 'integral' to criminal activity seems like a tall order\" except perhaps in \"the case of a Tweet or Facebook posting along the lines of 'the bomb is in location x. Here is what you need to do to detonate it in location y at time z.'\" In contrast, another scholar has suggested that it is too easy, particularly in the context of federal terrorism statutes, to prosecute someone for conspiracy based on online speech and thereby avoid Brandenburg 's requirements. More broadly, others have proposed ways to cabin the doctrine's reach so that it is not used in a circular fashion to criminalize speech because of its content without \"serious First Amendment analysis.\" In view of these considerations, this category of unprotected speech appears to be less well-defined (and thus susceptible to broader application) than the standards for incitement and true threats. "], "subsections": []}]}, {"section_title": "Strict Scrutiny and Overbreadth", "paragraphs": ["Whether the government seeks to regulate protected speech, unprotected speech, or both, the First Amendment imposes some limitations on the means the government may use to achieve its regulatory objectives. When a law regulates protected speech, courts generally apply strict scrutiny and require the government to show that the law is narrowly tailored to achieve a compelling governmental interest. In contrast, laws that primarily regulate nonexpressive conduct or unprotected speech normally are not subjected to strict scrutiny. However, such laws can sometimes be challenged as unduly overbroad on the grounds that a \"substantial number of [their] applications are unconstitutional, judged in relation to the statute's plainly legitimate sweep.\" This section examines the strict scrutiny test and the overbreadth doctrine, as well as applications of those doctrines in the context of terrorism-related offenses and criminal prosecutions involving online speech, as those standards and precedents are likely to affect how the government may regulate online speech promoting terrorism or violence. "], "subsections": [{"section_title": "Strict Scrutiny", "paragraphs": ["As previously noted, when a law regulates protected speech\u2014especially on the basis of its content\u2014courts generally require the government to prove: (1)\u00a0a compelling governmental interest, and (2) that the law is narrowly tailored to achieve that interest. As discussed below, not all of the government's interests in regulating speech promoting violence may rise to the level of compelling. In addition, even if the government can demonstrate a compelling interest, it would still have to show that the law is sufficiently tailored to that interest. "], "subsections": [{"section_title": "Governmental Interests", "paragraphs": ["The Supreme Court has held that the government does not have a compelling interest\u2014or even a substantial one \u2014in shielding listeners from messages that they might find offensive. In addition, where the government has deemed certain speech harmful, the Court has in some cases required the government to demonstrate actual harms that the regulation can redress. In contrast, the Court has repeatedly recognized the government's compelling interests in maintaining national security and combating terrorism. It has also acknowledged that Congress and the executive branch are uniquely positioned\u2014both as a constitutional matter and in terms of their expertise\u2014to safeguard the nation's security and regulate foreign affairs. Accordingly, it has recognized some situations in which the First Amendment must yield to the \"exclusive[]\" authority of the political branches to \"maintain[] normal international relations and defend[] the country against foreign encroachments and dangers.\""], "subsections": []}, {"section_title": "Narrow Tailoring", "paragraphs": ["Once the government has established a compelling interest, the focus of the First Amendment inquiry is on whether the law is sufficiently tailored to achieve that interest. Under a strict scrutiny standard, narrow tailoring typically means that the law has to be the least speech-restrictive means of advancing the government's interest. For example, in Reno v. ACLU , the Supreme Court struck down two provisions of the Communications Decency Act of 1996 (CDA) that banned the knowing transmission of \"indecent\" messages, and the knowing sending or display of \"patently offensive\" messages, to minors over the internet. The CDA contained affirmative defenses for persons who took \"good faith, reasonable, effective, and appropriate actions\" to restrict minors' access to the prohibited communications or who restricted access through certain age-verification measures such as requesting a verified credit card. The Court first concluded that the terms \"indecent\" and \"patently offensive\" were vague and thus threatened to \"silence[] some speakers whose messages would be entitled to constitutional protection.\" Moving to the narrow tailoring analysis, the Court then explained that the CDA's \"burden on protected speech cannot be justified if it could be avoided by a more carefully drafted statute.\" The Court recounted the district court's findings regarding the technological limitations of restricting minors' access to such content and the cost-prohibitive nature of age-verification solutions. In contrast, the district court had found that available software for parental controls could curtail minors' access in a reasonably effective way. The Court concluded that the government failed to \"explain why a less restrictive provision would not be as effective as the CDA,\" and thus the challenged provisions were not narrowly tailored."], "subsections": []}, {"section_title": "Deference to Political Branches", "paragraphs": ["While a court may examine the availability and effectiveness of less speech-restrictive alternatives under some circumstances, it may exercise some deference in evaluating the policy judgments of Congress and the Executive in certain areas such as national security and foreign affairs. The Humanitarian Law Project decision discussed above is one case in which the Court applied stringent scrutiny but deferred in some measure to the means that Congress chose to combat terrorism. In that case, the Supreme Court construed the federal material support statute to ban \"only material support coordinated with or under the direction of\" an FTO, not \"[i]ndependent advocacy that might be viewed as promoting the group's legitimacy.\" It concluded that the statute was \"carefully drawn\" insofar as it reached speech rather than conduct. The Court then considered whether the law, as applied to the plaintiffs' proposed activities, was \"necessary to further\" the government's compelling interest in combating terrorism. In this regard, the Court examined the plaintiffs' contention that they sought to advance only the \"legitimate activities of the [FTOs], not their terrorism.\" Reasoning that whether FTOs \"meaningfully segregate support of their legitimate activities from support of terrorism is an empirical question,\" the Court gave \"significant weight\" to \"the considered judgment of Congress and the Executive that providing material support to [an FTO]\u2014even seemingly benign support\u2014bolsters the terrorist activities of that organization.\" The Court then provided examples of how the plaintiffs' support could potentially further the terrorist objectives of the organizations. ", "In upholding the statute as applied to the plaintiffs' activities, the Court cabined its decision in three respects. First, it held that it was not opining on the constitutionality of \"any future applications of the material-support statute to speech or advocacy\" or \"any other statute relating to speech and terrorism.\" Second, it suggested that \"a regulation of independent speech\" may not \"pass constitutional muster, even if the Government were to show that such speech benefits [FTOs].\" And third, it expressly disclaimed any suggestion \"that Congress could extend the same prohibition on material support at issue here to domestic organizations.\"", "The Humanitarian Law Project decision was criticized by several dissenting Justices and some outside commentators for a perceived departure from settled First Amendment standards. The three dissenting Justices agreed that the government has a \"compelling\" interest \"in protecting the security of the United States\" by \"denying [FTOs] financial and other fungible resources.\" However, they argued that the government failed to show how applying the statute to the plaintiffs' activities would \" help achieve that important security-related end,\" which is typically required under any level of heightened scrutiny. Legal scholars have disagreed as to whether the decision is consistent with the protections accorded to political advocacy in other contexts such as campaign finance. Others have argued that the Court erred in prohibiting \"mere advocacy\" without asking whether the plaintiffs' activities amounted to proscribable incitement under Brandenburg. At least one commentator has emphasized the context of the decision, suggesting that the serious national security concerns presented by terrorism may have weighed on the Justices in the majority.", "Lower courts have applied the Court's reasoning in Humanitarian Law Project in cases involving material support prosecutions where key evidence included the defendant's online activities. ", "In United States v. Mehanna , the First Circuit considered the defendant's appeal from his convictions for conspiring to provide material support to Al Qaeda and providing material support for terrorism. As the court described it, his indictment on the terrorism-related charges was \"based on two separate clusters of activities\": (1) the defendant's travel to Yemen in search of a terrorist training camp; and (2) the year after his return to the United States, the defendant's translations of \"Arab-language materials into English,\" which he posted \"on a website . . . that comprised an online community for those sympathetic to al-Qa'ida and Salafi-Jihadi perspectives,\" and at least some of which \"constituted al-Qa'ida-generated media and materials supportive of al-Qa'ida and/or [violent] jihad.\" On appeal, the defendant argued that the government's theory of guilt centered on the translations and that the jury's guilty verdict was improperly based on protected First Amendment speech. The trial court had instructed the jury that\u00a0it need not consider \"the scope or effect of the guarantee of free speech contained in the First Amendment\" because \"activity that is proven to be the furnishing of material support\" because it was undertaken at the direction of or in coordination with an FTO rather than independent advocacy \"is not activity that is protected by the First Amendment.\" The First Circuit held that the trial court's instructions were proper because they \"captured the essence of the controlling decision\" in Humanitarian Law Project and \"already accounted for [free speech] protections.\" The court further held that \"[i]t makes no difference that the absence of facts showing coordination with al-Qa'ida [in the defendant's translation activities] might have resulted in constitutionally protected conduct,\" because the jury had ample evidence to convict him on the basis of his travel to Yemen and associated activities. In United States v. Elshinawy , the defendant, a U.S. citizen, was indicted for providing and conspiring to provide material support to ISIL in the form of personnel (i.e., himself), services, and financial services. Many of the allegations were based on social media communications between the defendant and a childhood friend who was a member of ISIL and resided outside of the United States. These conversations allegedly included the defendant's \"pledge[ of] his allegiance to ISIL\" and \"plans to obtain or make some sort of explosive device.\" In addition, the defendant received funds transfers from overseas allegedly for the purpose of conducting a terrorist attack on ISIL's behalf. The defendant challenged the indictment on First Amendment grounds, arguing that the government sought to criminalize protected speech and association; namely, his independent interest in ISIL's cause. The district court, while suggesting that the defendant's characterizations of his communications could be raised in his defense at trial, largely rejected his First Amendment argument, stating that it \"distort[ed] the allegations and misapprehend[ed] the [material support] statute.\" The court noted that in interpreting the same statute in Humanitarian Law Project , the Supreme Court drew a line between independent advocacy and operating under an FTO's \"direction and control.\" The court reasoned that the indictment's allegations included \"more than just an expression of support during a conversation over social media\" because the defendant pledged his allegiance to ISIL. Moreover, the court held, to the extent that any statements were mere expressions of support, those statements could not be considered \"in isolation\" and must be viewed \"along with defendant's conduct.\" In United States v. Nagi , a U.S. citizen charged with attempting to provide material support to ISIL in the form of personnel (i.e., himself) moved to dismiss the indictment on First Amendment grounds. The defendant argued that the government could not prosecute him merely because he allegedly traveled to Turkey with the intent of entering Syria and joining ISIL because such a prosecution would violate his First Amendment right of association. The district court disagreed, based on the Supreme Court's reasoning in Humanitarian Law Project . In particular, the court rejected the defendant's argument that his charges were based on \"something that \u00a7\u00a02339B does not prohibit: simple membership in a terrorist organization.\" In the court's view, \"the anticipated trial evidence show[ed] that the Defendant attempted to work 'under the direction of, or in coordination with' ISIL,\" not merely to associate with the group. Among other things, the government planned to introduce the defendant's Twitter pledge to support ISIL's leader and his purchase of combat gear. The court explained that although the Twitter pledge itself was protected under the First Amendment, the government could use it to show the defendant's intent.", "As the examples above illustrate, the First Amendment has not greatly restricted material support prosecutions concerning online speech, particularly when courts have contextualized the speech within a course of conduct. However, these cases may be of limited utility in evaluating the government's authority to regulate speech promoting terrorism in a prophylactic way, because they did not present scenarios involving online speech exclusively; in other words, the government proffered or introduced evidence that the defendant took some other step in coordination with an FTO."], "subsections": []}]}, {"section_title": "The Overbreadth Doctrine", "paragraphs": ["Although a law directed at unprotected speech is unlikely to trigger strict scrutiny, the overbreadth doctrine may nonetheless limit Congress's ability to regulate online speech. The Supreme Court has said that \"a law may be invalidated as overbroad if 'a substantial number of its applications are unconstitutional, judged in relation to the statute's plainly legitimate sweep.'\" This rule, called the overbreadth doctrine, \"prohibits the Government from banning unprotected speech if a substantial amount of protected speech is prohibited or chilled in the process.\" Because the doctrine can result in a court declaring a law invalid on its face rather than in the specific context before it, the Court has called the overbreadth doctrine \"strong medicine\" to be used \"sparingly and only as a last resort\" when the statute cannot be construed in a more limited manner. According to the Court, \"[r]arely, if ever, will an overbreadth challenge succeed against a law or regulation that is not specifically addressed to speech or to conduct necessarily associated with speech (such as picketing or demonstrating).\"", "At least one circuit court has upheld the material support statute against an overbreadth challenge\u2014albeit in circumstances in which the defendant failed to allege any circumstances in which the statute might be applied to protected speech. Overbreadth challenges have also arisen more generally in the context of other statutes that implicate online communications. In United States v. Ackell , a defendant convicted under a federal law prohibiting stalking challenged the statute as facially overbroad on appeal. In relevant part, the law makes it a crime to (1) use \"any interactive computer service or electronic communication service\" or other facility of interstate commerce; (2)\u00a0\"to engage in a course of conduct\" that \"causes, attempts to cause, or would be reasonably expected to cause substantial emotional distress\" to that person or certain other individuals; (3) with the \"intent to kill, injure, harass, [or] intimidate . . . [that] person.\" ", "Construing the statute, the First Circuit reasoned that the law \"targets conduct rather than speech\" because, \"[b]y its own terms,\" it regulates a \"course of conduct.\" Although the court acknowledged that the statute refers to interactive computer services and other facilities of interstate commerce that \"are commonly employed to facilitate communication,\" it concluded that the statute \"covers countless amounts\" of nonexpressive conduct such as mailing unknown substances to another person or repeatedly infecting a person's computer with viruses. Turning to whether the statute in practice might nonetheless apply to a substantial amount of protected speech in relation to its plainly legitimate sweep, the court construed the law to primarily implicate two categories of unprotected speech: true threats and speech integral to criminal conduct. Beyond those categories, the court identified only one case in which the government had prosecuted a defendant under the statute for protected speech and rejected the defendant's proffered hypothetical applications as either too speculative or falling outside the statutory proscription. The court acknowledged that the statute \" could have an unconstitutional application,\" but declined to \"administer the 'strong medicine' of holding the statute facially overbroad.\""], "subsections": []}]}, {"section_title": "Conclusion", "paragraphs": ["As the discussion above illustrates, regulating online content in accordance with the First Amendment\u2014even online content promoting terrorism or violence\u2014presents challenges. These challenges are due in large part to the complexities of free speech jurisprudence and the lack of controlling authority about how doctrines developed nearly 50 years ago\u2014many in the context of statements made by identifiable speakers at political or ideological rallies\u2014apply to speech on the internet where the lines between advocacy, incitement, threats, and conduct can be even more blurred. Nevertheless, the cases and scholarship to date suggest some general guideposts for evaluating the free speech implications of scholarly or legislative proposals to restrict online content promoting terrorism or violence. ", "First, a law that primarily regulates conduct online as opposed to speech may not trigger heightened First Amendment scrutiny. Likewise, a general regulatory scheme that incidentally regulates online content is unlikely to trigger heightened scrutiny. However, if a law expressly regulates certain types of online communications based on the words used or their effect on other internet users, it may be assumed to regulate speech rather than conduct. Second, a law that is narrowly drafted to prohibit online speech that falls within one of the so-called unprotected categories of speech may not trigger heightened First Amendment scrutiny. In this regard, speech on the internet advocating violence as an abstract proposition would likely be considered protected, while speech that incites imminent violence, constitutes a true threat, or is integral to criminal conduct may be deemed unprotected. Third, even if alaw is directed at nonexpressive conduct or unprotected speech on the internet, it may still be subject to an overbreadth challenge if, in practice, it prohibits a substantial amount of protected speech in relation to its plainly legitimate sweep. Fourth, except under some circumstances involving unprotected speech, a law that regulates online speech on the basis of its content would likely be subject to strict scr utiny. A law that regulates online content on the basis of the viewpoints expressed would likely present a clearer case of content discrimination and would be presumptively invalid regardless of whether the underlying speech is protected. Finally, the government may have more leeway to regulate online content when asserting its interests in national security and foreign affairs; however, such laws, to the extent they restrict or burden protected speech, would likely have to withstand heightened (if not strict) First Amendment scrutiny. ", "In addition to the considerations listed above, close attention to legal challenges regarding the enforcement of existing laws as applied to online activities may provide guidance to lawmakers seeking to balance the First Amendment interests of internet users with the safety and security of U.S. citizens on and offline."], "subsections": []}]}}
{"id": "R44589", "title": "SBA\u2019s Office of Inspector General: Overview, Impact, and Relationship with Congress", "released_date": "2019-02-22T00:00:00", "summary": ["Congress created offices of inspector general (OIGs) to assist in its oversight of the executive branch. OIGs provide independent, nonpartisan analysis, conducted in accordance with generally accepted government auditing standards, to identify and recommend ways to limit waste, fraud, and abuse in federal programs and enhance program and operational efficiency and effectiveness. OIGs' activities supplement and complement those of the Government Accountability Office (GAO), which serves a similar, though not identical, role in assisting congressional oversight of the executive branch. Together, OIGs and GAO provide Congress with information and analysis needed to conduct effective oversight and, in the process, help Congress maintain its balance of power with the presidency.", "OIGs exist in more than 70 federal agencies, including all departments and larger agencies, numerous boards and commissions, and other entities. The U.S. Small Business Administration's Office of Inspector General (SBA OIG) was created under authority of the Inspector General Act of 1978 (P.L. 95-452, as amended). Its three primary statutory purposes are to", "1. conduct and supervise audits and investigations of the SBA's programs and operations; 2. recommend policies designed to promote the economy, efficiency, and effectiveness of the SBA's programs and operations and to prevent and detect fraud and abuse; and 3. keep both the SBA Administrator and Congress \"fully and currently informed about problems and deficiencies relating to the administration of such programs and operations and the necessity for and progress of corrective action.\"", "During FY2018, the SBA OIG issued 26 audit reports containing 111 recommendations for improving the SBA's programs and operations, and its investigations resulted in 62 indictments or informations and 43 convictions. The SBA OIG claimed that its recommendations resulted in monetary savings and recoveries of nearly $224.5 million in FY2018. In addition, the SBA OIG's annual Report on the Most Serious Management and Performance Challenges Facing the SBA focuses attention \"on areas that are particularly vulnerable to fraud, waste, error, and mismanagement, or otherwise pose a significant risk and generally have been subject to one or more OIG or GAO reports.\"", "This report examines the SBA OIG's statutory authorities; reporting requirements; funding ($22.9 million in FY2018); staffing and organizational structure; and recent activities (audits, investigations, etc.). It also examines the SBA OIG's impact on monetary savings, SBA programs and operations, and legislation affecting the agency. The report concludes with observations concerning the SBA OIG's relationship with Congress.", "Some areas of possible congressional interest, other than SBA OIG funding and staffing issues, include exploring ways to more accurately quantify the SBA OIG's claims of monetary savings and to determine if the SBA OIG should undertake additional tracking and monitoring activities to more accurately quantify the office's impact on SBA programs, operations, and legislation."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Congress created offices of inspector general (OIGs) in 1978 (via P.L. 95-452 , the Inspector General Act of 1978, or the IG Act) to assist in its oversight of the executive branch. At that time, Congress determined that there were serious deficiencies in the executive branch's auditing and investigative activities designed to curb waste, fraud, and abuse and promote agency operational and program efficiency. For example, the House and Senate reports accompanying the bill that became the IG Act argued that ", "auditing and investigative activities were scattered throughout the various federal departments and were often conducted in response to a complaint as opposed to having in place \"affirmative programs to look for possible fraud or abuse\"; investigators in some agencies (including the Small Business Administration, SBA) were not allowed to initiate investigations without clearance from officials responsible for the programs involved; many agency representatives engaged in auditing and investigative activities (including those within the SBA) reported that their office lacked sufficient budgets to do its job, many of the auditing and investigative offices (including those at the SBA) often reported to those who were responsible for the program being audited or investigated; and some auditors and investigators were unable to devote full time to their audit or investigative responsibilities. ", "The House report concluded that independent OIGs \"are urgently needed.\" The Senate report concluded that \"with rare exceptions, the agencies have not adequately policed their own operations and programs.\"", "OIGs were designed to provide Congress and federal agency heads independent, nonpartisan analysis, conducted in accordance with generally accepted government auditing standards, to identify and recommend ways to limit waste, fraud, and abuse in federal programs and enhance operational and program efficiency and effectiveness. ", "OIGs' activities were to supplement and complement those of the Government Accountability Office (GAO), which serves a similar, though not identical, role in assisting Congress fulfill its oversight function. Together, OIGs and GAO (along with the Congressional Research Service [CRS] and the Congressional Budget Office [CBO]) provide Congress with information and analysis needed to conduct effective oversight and, in the process, help Congress maintain its balance of power with the presidency.", "OIGs currently exist in more than 70 federal agencies, including all departments and larger agencies, numerous boards and commissions, and other entities. They are predominantly located in executive branch agencies, but several legislative branch entities\u2014for example, the Library of Congress (LOC), GAO, and the Government Publishing Office (GPO)\u2014also have OIGs.", "The overwhelming majority of OIGs, including the U.S. Small Business Administration OIG (SBA OIG), are governed by the IG Act. It structures inspector general (IG) appointments and removals, powers and authorities, and duties and responsibilities. Other laws have established or amended IG powers and authorities in specified agencies or programs. As a result, IG statutory powers and authorities are not identical across the federal government and, in certain cases, these differences are significant. Nonetheless, in general, statutory OIGs follow the IG Act's standards, guidelines, and directives. ", "For example, the IG Act provides IGs five statutory duties and responsibilities as follows:", "1. Conduct, supervise, and coordinate audits and investigations of their agency's programs and operations. 2. Review existing and proposed legislation and regulations relating to their agency and make recommendations in mandated semiannual reports concerning the impact of such legislation or regulations on their agency's programs and operations or on the prevention and detection of fraud and abuse in those programs and operations. 3. Recommend policies to improve their agency's administration of its programs and operations and prevent and detect fraud and abuse in those programs and operations. 4. Recommend policies to facilitate relationships between their agency and other federal, state, and local government agencies and nongovernmental entities to promote the economy and efficiency of their agency's administration of its programs and operations and prevent and detect fraud and abuse in those programs and operations. 5. Keep both their agency head and Congress fully and currently informed concerning fraud and other serious problems, abuses, and deficiencies relating to their agency's administration of its programs and operations and to report on the progress made in implementing recommended corrective action.", "This report examines the SBA OIG's statutory authorities; reporting requirements; funding; staffing and organizational structure; and recent activities (audits, investigations, etc.). The SBA OIG's impact on monetary savings, SBA programs and operations, and legislation affecting the agency is also examined. The report concludes with some observations concerning the SBA OIG's relationship with Congress. ", "Some areas of possible congressional interest, other than SBA OIG funding and staffing issues, include exploring ways to more accurately quantify the SBA OIG's claims of monetary savings and to determine if the SBA OIG should undertake additional tracking and monitoring activities to more accurately quantify the office's impact on SBA programs, operations, and legislation."], "subsections": []}, {"section_title": "SBA's OIG", "paragraphs": ["The SBA OIG is a separate, independent office that provides \"independent, objective oversight to improve the integrity, accountability, and performance of the SBA and its programs for the benefit of the American people.\" The SBA IG (Hannibal \"Mike\" Ware) directs the office and is \"appointed by the President, by and with the advice and consent of the Senate, without regard to political affiliation and solely on the basis of integrity and demonstrated ability in accounting, auditing, financial analysis, law, management analysis, public administration, or investigations.\"", "The SBA is a Cabinet-level agency. Although the SBA is one of the smaller Cabinet-level agencies (with an annual budget of $715.4 billion in FY2019), it administers a relatively wide range of programs to support small businesses, including loan guaranty and venture capital programs to enhance small business access to capital; contracting programs to increase small business opportunities in federal contracting; direct loan programs for businesses, homeowners, and renters to assist their recovery from natural disasters; and small business management and technical assistance training programs to assist business formation and expansion. The SBA OIG is responsible for examining these programs and the various SBA offices that administer them.", "IGs report to the head of their agency or establishment, but are provided various powers and protections that support their independence. For example, the SBA IG reports to the SBA Administrator, but", "may be removed from office only by the President, or through the impeachment process in Congress. has the authority to hire staff. determines priorities and projects (e.g., audits, reviews and investigations) without outside direction. cannot be prevented or prohibited \"from initiating, carrying out, or completing any audit or investigation, or from issuing any subpoena during the course of any audit or investigation.\" must be provided \"access to all records, reports, audits, reviews, documents, papers, recommendations, or other material available ... which relate to programs and operations with respect to which [the SBA] Inspector General has responsibilities under this Act.\" must be provided \"appropriate and adequate office space\" and \"such equipment, office supplies, and communications facilities and services as may be necessary for the operation of\" the SBA OIG, including any \"necessary maintenance services for such offices and the equipment and facilities located therein.\""], "subsections": []}, {"section_title": "Statutory Authorities", "paragraphs": ["The IG Act provides all IGs nine statutory authorities:", "1. Access to all records, reports, audits, reviews, documents, papers, recommendations, or other material available relating to the IG's responsibilities under the IG Act. 2. Make such investigations and reports relating to their agency's administration of its programs and operations as are, in the judgment of the IG, necessary or desirable. 3. Request such information or assistance as may be necessary for carrying out the duties and responsibilities provided by the IG Act from any federal, state, or local governmental agency or unit thereof. 4. Require by subpoena the production of all information, documents, reports, answers, records, accounts, papers, and other data in any medium necessary in the performance of the functions assigned by the IG Act; provided that procedures other than subpoenas shall be used by the IG to obtain documents and information from federal agencies. 5. Administer to or take from any person an oath, affirmation, or affidavit, whenever necessary in the performance of the functions assigned by the IG Act. 6. Have direct and prompt access to their agency head when necessary for any purpose pertaining to the performance of functions and responsibilities under the IG Act. 7. Select, appoint, and employ such officers and employees as may be necessary for carrying out the functions, powers, and duties of the Office subject to the provisions of title 5, United States Code , governing appointments in the competitive service, and the provisions of chapter 51 and subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates. 8. Obtain services as authorized by Section 3109 of title 5, United States Code , at daily rates not to exceed the equivalent rate prescribed for grade GS-18 of the General Schedule by Section 5332 of title 5, United States Code . 9. To the extent and in such amounts as may be provided in advance by appropriations acts, to enter into contracts and other arrangements for audits, studies, analyses, and other services with public agencies and with private persons, and to make such payments as may be necessary to carry out the provisions of the IG Act.", "In addition, the IG Act provides 25 OIGs, including the SBA OIG, direct law enforcement authority. It also authorizes the U.S. Attorney General to delegate law enforcement authority to other OIGs under specified circumstances. "], "subsections": []}, {"section_title": "Reporting Requirements", "paragraphs": ["The IG Act requires IGs to prepare and transmit semiannual reports (two per year) to their agency's head, not later than April 30 and October 31 of each year, summarizing the OIG's activities during the immediately preceding six-month periods ending on March 31 and September 30. Agency heads are to transmit these reports to the appropriate committees or subcommittees of Congress in unaltered form within 30 days after receipt. Agency heads may provide any additional comments deemed appropriate. Agency heads must also provide specified information, such as statistical tables showing the total number of audit reports, inspection reports, and evaluation reports for which final action had not been taken by the commencement of the reporting period; on which management decisions were made during the reporting period; and for which no final action had been taken by the end of the reporting period. Copies of the semiannual reports must be made available to the public upon request and at a reasonable cost within 60 days of their transmission to Congress.", "The OIG's semiannual reports are required to include, but not limited to, 16 informational items. For example, the SBA OIG's report must include, among other items, the following:", "A description of significant problems, abuses, and deficiencies relating to the SBA's administration of programs and operations identified during the reporting period. A description of the SBA OIG's recommendations for corrective action. An identification of each significant recommendation described in previous semiannual reports on which corrective action has not been completed. A summary of matters referred to prosecutive authorities and the prosecutions and convictions that have resulted. A summary of each report made to the SBA Administrator relating to instances when information or assistance requested has, in the IG's judgment, been unreasonably refused or not provided during the reporting period. A listing of each audit report, inspection report, and evaluation report issued during the reporting period and for each report, where applicable, the total dollar value of questioned costs (including a separate category for the dollar value of unsupported costs) and the dollar value of recommendations that funds be put to better use. A summary of each audit report, inspection report, and evaluation report issued before the commencement of the reporting period for which no management decision has been made by the end of the reporting period (including the date and title of each such report), an explanation of the reasons such management decision has not been made, and a statement concerning the desired timetable for achieving a management decision on each such report. Information concerning any significant management decision with which the SBA IG is in disagreement.", "IGs are also required to report suspected violations of federal criminal law directly and expeditiously to the U.S. Attorney General, and any \"particularly serious or flagrant problems, abuses, or deficiencies\" relating to their agency's operations and administration of programs immediately to the agency's head.", "In addition, pursuant to P.L. 106-531 , the Records Consolidation Act of 2000, and the Office of Management and Budget (OMB) Circular A-136, the SBA OIG issues an annual Report on the Most Serious Management and Performance Challenges Facing the SBA . This report is, arguably, the SBA OIG's signature oversight document, focusing attention \"on areas that are particularly vulnerable to fraud, waste, error, and mismanagement, or otherwise pose a significant risk and generally have been subject to one or more OIG or GAO reports.\" "], "subsections": []}, {"section_title": "Funding", "paragraphs": ["The IG Act provides presidentially appointed IGs a separate appropriations account, known colloquially as a \"line item,\" for their offices. This provision prevents federal administrators from limiting, transferring, or otherwise reducing OIG funding once it has been specified in law. ", "IGs are authorized to transmit a budget estimate and request to their respective agency head each fiscal year. Each IG's request must include amounts for operations, training, and for the support of the Council of the Inspectors General on Integrity and Efficiency (CIGIE). ", "The agency's budget request to the President must include the OIG's original budget request and any comments the affected IG has regarding the proposal. The President must include in the Administration's budget submission to Congress the IG's original request; the amount requested by the President for the OIG's operations, training, and support for CIGIE; and any comments the affected IG has regarding the proposal if the IG concludes that the President's budget would substantially inhibit the IG from performing the duties of the office.", "Each year, the SBA OIG transmits a budget justification document to the SBA Administrator, which is available online. That document includes the SBA OIG's budget request, an overview of the SBA OIG's mission and authorities, a list of critical risks facing the SBA, an accounting of the office's oversight activities during the previous fiscal year, areas of emphasis for the coming fiscal year, and a table of statistical highlights and accomplishments for the previous fiscal year (such as the number of reports and recommendations issued, estimated amounts saved or recouped, number of indictments and convictions).", " Table 1 shows the SBA OIG's appropriations over the FY2010-FY2019 period. The SBA OIG received an appropriation of $22.9 million for FY2019."], "subsections": []}, {"section_title": "Staffing and Organizational Structure", "paragraphs": ["As shown in Table 2 , the SBA OIG's FTEs have remained relatively stable since FY2000, ranging from a low of 93 FTEs in FY2014 to a high of 113 FTEs in FY2019. Approximately 85% of the SBA OIG's expenditures are attributed to payroll expenses. ", "In 2013, then-SBA IG Peggy Gustafson testified that \"resource constraints do sometime preclude us from initiating or continuing a number of investigations\" and if she were provided additional resources, she would \"target early defaulted loans, fraud, and lender negligence, and ... increase the capacity of our existing investigative personnel.\"", "The SBA OIG's staff is organized into three divisions and several support offices", "The Auditing Division performs and oversees audits and reviews of SBA programs and operations, focusing on SBA business and disaster loans, business development and government contracting programs, as well as mandatory and other statutory audit requirements involving computer security, financial reporting, and other work. The Investigations Division manages a program to detect and deter illegal and improper activities involving SBA's programs, operations, and personnel. The division has c riminal investigations staff who carry out a full range of traditional law enforcement functions and security operations staff who conduct name checks and, where appropriate, fingerprint checks on program applicants to prevent known criminals and wrongdoers from participating in SBA programs. Security operations staff also conduct required employee background investigations. The Management and Administration Division provides business support (e.g., budget and financial management, human resources, IT, and procurement) for the various OIG functions and activities. The Office of Counsel provides legal and ethics advice to all OIG components; represents the OIG in litigation arising out of or affecting OIG operations; assists with the prosecution of criminal, civil, and administrative enforcement matters; processes subpoenas; responds to Freedom of Information and Privacy Act requests; and reviews and comments on proposed policies, regulations, legislation, and procedures. The OIG Hotline, under the purview of the Chief of Staff , reviews allegations of waste, fraud, abuse, or serious mismanagement within the SBA or its programs from employees, contractors, and the public.", "The SBA OIG's headquarters is located in Washington, DC. The SBA OIG's Investigations Division has 12 field offices located across the United States. ", "The SBA OIG's structure is shown in its organizational chart (see Figure 1 )."], "subsections": []}, {"section_title": "Recent Activities", "paragraphs": ["As mentioned previously, the SBA OIG conducts and supervises audits and investigations of the SBA's programs and operations. As a complement to its criminal and civil fraud investigations, the SBA OIG also recommends to the SBA suspensions, debarment, and other administrative enforcement actions against SBA lenders, borrowers, contractors, and others who have engaged in fraud or have otherwise exhibited a lack of business integrity. The SBA OIG also conducts, supervises, and participates in various training activities to counter fraud in SBA programs. "], "subsections": [{"section_title": "Audit Reports", "paragraphs": ["During FY2018, the SBA OIG issued 26 audit reports containing 111 recommendations for improving the SBA's operations. The SBA's OIG provided several examples in its FY2018 semi-annual reports to Congress of what it considered to be among its more noteworthy audits, including the following:"], "subsections": [{"section_title": "The State Trade Expansion Program", "paragraphs": ["An audit of the SBA's State Trade Expansion Program (STEP) determined that \"while SBA has made significant progress in improving the overall management and effectiveness of STEP since the audit of the pilot program in 2012, SBA needs to improve its performance measures and its program oversight\" or be \"at risk of not fully realizing the impact of the program in increasing the number of small businesses exploring significant new trade opportunities.\" The OIG made six recommendations to improve the program. The SBA planned actions to resolve five of the six recommendations and had already implemented actions to resolve one of the recommendations by the audit's completion."], "subsections": []}, {"section_title": "7(a) Loans to Poultry Farmers", "paragraphs": ["The OIG examined a sample of 11 7(a) loans (out of about 1,500 7(a) loans) made to poultry farmers from FY2012 to FY2016 and determined that these loans did not meet regulatory and SBA requirements for eligibility because the large chicken companies (integrators) in their sample \"exercised such comprehensive control over the growers [through a series of contractual restrictions, management agreements, oversight inspections, and market controls] that SBA OIG believes the concerns appear affiliative under SBA regulations.\" The OIG concluded that \"therefore, SBA and lenders approved 7(a) loans that were apparently ineligible under SBA size standard regulations and requirements.\" ", "The OIG found that integrator controls overcame practically all of a grower's ability to operate their business independent of integrator mandates and concluded that, as a result, \"from FY2012 to FY2016, SBA guaranteed approximately $1.8 billion in loans that may be ineligible.\" The OIG recommended that (1) the SBA review the loans cited in the evaluation sample to determine their eligibility and take appropriate corrective action and (2) review the arrangements between integrators and growers and \"establish and implement controls, such as supplemental guidance, to ensure SBA loan specialists and lenders make appropriate affiliation determinations.\" The SBA agreed with both recommendations. ", "Soon after the OIG's report was released, the SBA issued a statement indicating that it had reviewed the 11 loans cited in the report and confirmed that the loans \"were correctly made in accordance with agency policy at the time.\" The SBA also assured borrowers and lenders that existing 7(a) loan guarantees to poultry famers would continue to be honored and that the SBA is \"examining the policies and procedures around poultry loans to ensure SBA loans continue to be directed towards those small businesses most in need of assistance.\" The SBA subsequently held several public forums \"to better understand the use of SBA guaranteed loans by small farmers in the poultry industry.\""], "subsections": []}, {"section_title": "Oversight of 8(a) Program Continuing Eligibility Processes", "paragraphs": ["The OIG audited the SBA's oversight of the Minority Small Business and Capital Ownership Development Program (commonly known as the \"8(a) program\") continuing eligibility processes \"to determine whether SBA's oversight ensured 8(a) program participants met continuing eligibility requirements.\" The 8(a) program is designed to assist small businesses unconditionally owned and controlled by one or more socially and economically disadvantaged individuals with training, technical assistance, and contracting opportunities. ", "The OIG found that 20 of the 25 firms it reviewed should have been removed from the 8(a) program and that these firms received $126.8 million in new 8(a) set-aside contract obligations in FY2017 \"at the expense of eligible disadvantaged firms.\" The OIG concluded that the SBA \"did not consistently identify ineligible firms in the 8(a) program,\" \"did not always act to remove firms it determined were no longer eligible for the program,\" \"did not perform required continuing eligibility reviews when it received specific and credible complaints regarding firms' eligibility,\" and \"did not log all complaints.\" ", "The OIG made 11 recommendations to improve the overall management of the 8(a) program continuing eligibility processes. The SBA agreed with 7 of the recommendations, partially agreed with the other 4 recommendations, and reported that it planned to conduct continuing eligibility reviews for the firms that the OIG identified as ineligible and take appropriate action."], "subsections": []}]}, {"section_title": "Investigations, Debarment Referrals, and Training Activities", "paragraphs": ["In FY2018, the SBA OIG's investigations resulted in 62 indictments or informations and 43 convictions. For example, ", "A Missouri man was sentenced in federal court to 30 months in prison and five years of supervised release and ordered to pay $1,675,495 in restitution following an OIG investigation that revealed that the man committed bank fraud and made false statements to a financial institution in connection with his role in defrauding the SBA and a bank. The man was involved in a scheme to obtain a $2.9 million SBA loan through the use of straw companies and false business records. A co-conspirator had previously entered into a settlement agreement with the bank wherein he agreed to pay back $1.8 million of misappropriated SBA loan proceeds. An employee of a large defense contractor was sentenced in federal court to five years of imprisonment and three years of supervised release, was fined $50,000, and ordered to forfeit $1,273,440 after an OIG investigation revealed that he \"had utilized a retired U.S. Army colonel's Section 8(a) communications and engineering firm as a front company to obtain government contracts.\" The retired colonel (and owner) was sentenced in federal court to five years of imprisonment and three years of supervised release, was fined $100,000, and forfeited $3 million in proceeds earned by his now defunct 8(a) firm. A Missouri veteran pled guilty to wire fraud and major program fraud following an OIG investigation that revealed that he was involved in a scheme to fraudulently claim service-disabled veteran-owned small business status for a firm to enable that firm to obtain a $40 million DOD contract. The veteran posed as a figurehead for the firm in exchange for monetary compensation for his participation in the scheme.", "The SBA OIG also sent 84 present responsibility actions (suspension and debarment referrals) to the SBA that resulted in 25 proposed debarments and 17 final debarments. As will be discussed later, the SBA OIG also annually provides training and outreach sessions, attended by more than 1,000 government employees, lending officials, and law enforcement representatives, on topics related to fraud in government lending and contracting programs."], "subsections": []}]}, {"section_title": "Monetary Savings and Recoveries", "paragraphs": ["The SBA OIG reports that its audits and investigations resulted in monetary savings and recoveries of nearly $224.5 million in FY2018 ($55.4 million from potential investigative recoveries and fines, $22.9 million from asset forfeitures, $0.73 million for loans or contracts not approved or canceled, and $145.4 million in disallowed costs agreed to by management).", "Most OIGs, including the SBA OIG, quantify their monetary savings by identifying and reporting amounts affected by their activities. This methodological approach, arguably, provides a fairly good overview of the OIG's activities' scope, nature, and impact. However, this approach has limitations. For example, precise data concerning monetary savings are not always readily available. Also, from a budgetary perspective, the monetary savings identified is sometimes less than the actual monetary savings realized. For example, ", "Savings from potential recoveries and fines ($55.4 million in FY2018) is derived from the actual amount imposed by courts in criminal sentencings (including fines and restitution), criminal settlements, and civil settlements. These recoveries are deemed \"potential\" because the court ordered them in FY2018, but they may not have been collected yet. The SBA OIG does not track collections resulting from these orders. As a result, the SBA OIG is not able to report the final amount of money actually recovered. Savings from loans or contracts not approved or cancelled ($0.73 million in FY2018) is \"comprised of the sum of the amounts that would have been borrowed as loans or awarded via contracts had there been no involvement by the OIG Investigations Division.\" From a budgetary perspective, the actual monetary savings generated by these actions is less than the amount cited. When a SBA loan is not approved, no funds are returned to the SBA because the loan amount has not been issued yet. When a SBA business loan is cancelled, the loan amount is ultimately returned to the lender, not to the SBA, because the SBA did not make the loan, it guaranteed a portion of it. When a small business contract is not approved, no funds are returned to the agency sponsoring the contract because the contracted amount has not been awarded yet. When a small business contract is cancelled, the contracted amount is typically made available to other contractors. Savings from disallowed costs agreed to by management ($145.4 million in FY2018) could result in actual budgetary savings, but the recovery process typically takes time. As a result, the final savings for disallowed costs is often not known during the fiscal year in which it is reported.", "Finally, estimating the monetary savings from the SBA OIG's activities is challenging because it is difficult, if not impossible, to determine what changes the SBA might have made to its programs and operations if the SBA OIG did not exist. ", "Perhaps indicative of these methodological challenges, the SBA OIG's semiannual reports and annual congressional budget justification document's statistical highlights sections refer to these figures as \"office-wide dollar accomplishments\" as opposed to monetary savings."], "subsections": []}, {"section_title": "Most Serious Management and Performance Challenges Facing the SBA", "paragraphs": ["Pursuant to P.L. 106-531 , the Records Consolidation Act of 2000, and OMB Circular A-136, the SBA OIG issues an annual Report on the Most Serious Management and Performance Challenges Facing the SBA . This report is, arguably, the SBA OIG's signature oversight document, focusing attention \"on areas that are particularly vulnerable to fraud, waste, error, and mismanagement, or otherwise pose a significant risk and generally have been subject to one or more OIG or GAO reports.\"", "The FY2019 Report on the Most Serious Management and Performance Challenges Facing the SBA lists the following eight challenges:", "1. Weaknesses in small business contracting programs and inaccurate procurement data undermine the reliability of contracting goals achievements. 2. SBA needs to continue to improve information technology controls to address operational risks. 3. SBA needs effective human capital strategies to carry out its mission successfully and become a high-performing organization. 4. SBA needs to improve its risk management and oversight practices to ensure its loan programs operate effectively and will continue to benefit small businesses. 5. SBA needs to ensure that the Section 8(a) business development program identifies and addresses the needs of program participants, only eligible firms are admitted into the program, and standards for determining economic disadvantage are justifiable. 6. SBA can improve its loan programs by ensuring quality deliverables and reducing improper payments at SBA loan operation centers. 7. SBA's disaster assistance programs must balance competing priorities to deliver timely assistance and reduce improper payments. 8. SBA needs robust oversight of its grant management.", "The SBA OIG provides a series of recommended actions within each of the reported challenges to enhance the effectiveness of the SBA's programs and operations. The management challenges are \"driven by SBA's current needs\" and based on the SBA OIG's understanding of the SBA's programs and operations, as well as challenges presented in other agency reports, principally GAO reports. Accordingly, the challenges presented each year may change based on the SBA's actions or inactions \"to remedy past weaknesses.\"", "For example, in its FY2019 report, the SBA OIG reported that the SBA had \"increased its oversight of the acquisition program, updated its policies and procedures, and implemented a requirement for management to conduct annual reviews of the acquisition process controls.\" As a result, the SBA OIG removed SBA's acquisition process from the list of the SBA's most serious challenges and added a new challenge regarding SBA's grant management oversight."], "subsections": []}, {"section_title": "Impact on Program Efficiency and Effectiveness", "paragraphs": ["OIGs are, arguably, best known for investigations addressing waste, fraud, and abuse and audits containing recommendations to enhance programmatic and operational efficiencies. However, a full and complete assessment of an OIG's impact should address all of the office's statutory responsibilities, including its efforts to ", "enhance programmatic and operational efficiencies and the OIG's agency's effectiveness in achieving program goals through audits; reduce waste, fraud, and abuse through investigations; assist Congress and the OIG's agency by making recommendations concerning the impact of legislation and regulations on programmatic and operational efficiencies and waste, fraud, and abuse; assist the OIG's agency by making recommendations to facilitate the agency's relationships with other governmental and nongovernmental entities; and keep the OIG's agency head and Congress fully and currently informed of its findings and the agency's progress in implementing recommended corrective actions."], "subsections": [{"section_title": "Enhancing Programmatic and Operational Efficiency and the Achievement of Program Goals Through Audits", "paragraphs": ["As shown in Table 3 , over the past nine fiscal years, the SBA OIG ", "issued 204 audit reports (an average of 22.66 audit reports per fiscal year); provided 1,011 recommendations for improving SBA operations, identifying improper payments, and strengthening controls to reduce fraud and unnecessary losses in SBA programs (an average of 112.3 recommendations per fiscal year), with the SBA taking action on 992 recommendations (an average of 110.2 recommendations addressed per fiscal year); generated $372.3 million in savings and efficiencies (an average of $41.4 million per fiscal year) in disallowed costs agreed to by SBA management and recommendations that funds be put to better use agreed to by SBA management; questioned $571.3 million in costs (an average of $63.5 million per fiscal year); and recommended that $141.1 million be put to better use (an average of $15.7 million per fiscal year). ", "In terms of impact, the data presented in Table 3 suggest that the SBA has made hundreds of changes to its internal operating procedures and programs as a direct result of the SBA OIG's audits. In addition, comments by members of the House Committee on Small Business and Senate Committee on Small Business and Entrepreneurship during congressional oversight hearings suggest that they view the SBA OIG's audits as helpful in their oversight of the SBA, especially in terms of identifying management weaknesses and recommending solutions to remedy those weaknesses. For example, in his opening remarks at a March 2016 congressional oversight hearing concerning the SBA's management and performance challenges, Representative Steve Chabot, then-chair of the House Committee on Small Business, stated", "It is clear that the Inspector General plays a critical role in ensuring effective management of the SBA. By conducting audits to identify program mismanagement, by investigating fraud or other wrongdoing, or by recommending changes to increase the efficiency of SBA operations, she has provided independent and objective reviews of agency actions.", "However, some Members have also noted that the SBA OIG's impact is limited because the SBA OIG has no enforcement authority and the SBA has chosen to ignore many of its recommendations. As Representative Nydia Velazquez noted during that March 2016 congressional oversight hearing, some of the management challenges reported in the SBA OIG's annual Report on the Most Serious Management and Performance Challenges Facing the SBA \"were first highlighted over a decade ago.\" In addition, Peggy Gustafson (SBA IG from October 2, 2009 to January 9, 2017) testified at that hearing that the SBA currently \"has 144 open OIG recommendations pertaining to reviews conducted in recent years and not so recent years across SBA programs.\" She also testified that the SBA", "did demonstrate positive progress in resolving recommendations associated with five of the identified challenges [in the annual report on the most serious challenges facing the SBA]. However, they remained at status quo on four of the challenges and demonstrated no progress on one recommendation in an area related to information technology. Now, clearly these results I would say paint a mixed picture relative to SBA's commitment to addressing these challenges in earnest and their ability to overcome these challenges.", "Having said that, I think it also has to be acknowledged that SBA has shown that with a sustained, committed effort over time, they can achieve successful results in these challenges. For example, they moved to green [implemented the SBA OIG's recommendations concerning] \u2026 the very large challenge related to their LMAS [Loan Management and Accounting System Modernization] IT system. So I think that really shows that these are challenges that with the right effort can really be conquered and met.", "Others have suggested that OIGs in general, including the SBA OIG, focus their auditing efforts on identifying and addressing programmatic and operational inefficiencies and spend less time addressing \"whether the agency program operations were providing the outputs intended by Congress.\" In their view, Congress passed P.L. 103-62 , the Government Performance and Results Act of 1993, and P.L. 111-352 , the Government Performance and Results Act Modernization Act of 2010, to provide mechanisms to assess the effectiveness of federal programs in a way that supplements the efforts of OIGs (e.g., by establishing statutory requirements for most agencies to set goals, measure performance, and submit related plans and reports to Congress for its potential use). ", "In sum, the evidence suggests that the SBA OIG's audits have helped to increase the efficiency of the SBA's programs and operations. However, it could also be argued that the SBA OIG's impact is muted because OIGs lack enforcement authority, meaning that the SBA may proceed with, or without, taking into account the recommendations presented in the SBA OIG's audits."], "subsections": []}, {"section_title": "Reducing Waste, Fraud, and Abuse Through Investigations", "paragraphs": ["As shown in Table 4 , over the past nine fiscal years, the SBA OIG ", "opened 672 cases (an average of 74.7 cases opened per fiscal year); issued 570 indictments or informations (an average of 63.3 indictments or informations per fiscal year), with 431 convictions (an average of 47.8 convictions per fiscal year); generated $1,057.4 million in investigative recoveries and fines, asset forfeitures attributed to OIG investigations, and loans or contracts not approved or cancelled as a result of investigations (an average of $117.5 million per fiscal year); and recommended 571 suspensions or disbarments (an average of 63.4 per fiscal year), with the SBA suspending or disbarring 273 of these firms or owners (an average of 30.3 firms/owners per fiscal year). ", "The SBA OIG also reported that it has an active, annual caseload of about 255 criminal and civil fraud investigations of potential loan and contracting fraud and other wrongdoing and that \"many of these investigations involve complex, multi-million-dollar fraudulent financial schemes perpetrated by multiple suspects.\" ", "The data presented in Table 4 suggest that the SBA OIG's investigations have resulted in hundreds of criminal convictions and millions of dollars in recovered funds. In addition, comments by members of the House Committee on Small Business and Senate Committee on Small Business and Entrepreneurship suggest that, generally speaking, they acknowledge and value the SBA OIG's investigations as a means to identify and reduce waste, fraud, and abuse. However, the SBA's former IG, Peggy Gustafson, has testified that the SBA OIG's investigative efforts, in initiating and continuing investigations, are constrained by resource limitations. "], "subsections": []}, {"section_title": "Recommendations Concerning the Impact of Legislation and Regulations", "paragraphs": ["The SBA OIG reports that it routinely reviews and comments on proposed changes to the SBA's program directives. These changes \"include regulations, internal operating procedures, agency policy notices, and SBA forms completed by the public.\" ", "The SBA OIG also tracks, reviews, and comments on legislation affecting the SBA and participates in OMB's Legislative Referral Memoranda (LRM) process for reviewing and coordinating agency recommendations on proposed, pending, and enrolled legislation. The SBA OIG also \"receives, through the SBA Office of Congressional and Legislative Affairs, congress-related documents being circulated by OMB, including pending legislation for consideration of Administration views and perspectives.\" ", "When the SBA OIG identifies \"material weaknesses\" in changes proposed by the SBA, it \"works with the Agency to implement recommended revisions to promote controls that are more effective and deter waste, fraud, or abuse.\" The SBA OIG provides the SBA with both formal and informal comments. Formal comments are provided \"through the Agency's internal document control process, the Correspondence Management System (CMS), and as a reviewing party in the Agency's Paperwork Reduction Act (PRA) process.\" Informal comments \"occur in the context of program officials seeking SBA OIG guidance when preparing new guidance.\" ", "In terms of legislation, the SBA OIG provides comments and suggestions \"directly with congressional stakeholders\" and shares its views with SBA officials and OMB if the legislation is being \"circulated for solicited views by OMB through its LRM process, or if determined by the OIG to be a necessary course of action.\"", "As shown in Table 5 , over the past nine fiscal years, the SBA OIG ", "conducted 1,035 reviews of legislation, regulations, standard operating procedures, and other issuances (an average of 115.0 reviews per fiscal year); and submitted comments on 515 of these initiatives (an average of 57.2 initiatives commented on per fiscal year).", "The data in Table 5 suggest that the SBA OIG actively reviews and comments on legislation and SBA program directives. However, it is difficult to determine the impact of these reviews and comments because the SBA OIG does not track or report data concerning the SBA's response to these comments. The SBA OIG indicated that ", "neither the dynamic nature of the informal comment process nor the collaborative follow-up procedures from formal comments are conducive to quantification.... Our sense of these comments is that the Agency will generally act upon SBA OIG comments. Typically, the Agency modifies clearances and PRA packages in response to material SBA OIG concerns. An accurate tracking and quantification of these clearances, however, is unlikely to yield particularly useful data relative to the resource expenditure necessary for that collection. "], "subsections": []}, {"section_title": "Facilitating the SBA's Relationships with Other Governmental and Nongovernmental Entities", "paragraphs": ["The SBA OIG provides training and outreach sessions on topics related to fraud in government lending and contracting programs. These training and outreach sessions are designed to facilitate the SBA's relationships with other governmental and nongovernmental entities in identifying and ameliorating fraud.", "The SBA OIG's outreach and training sessions are attended by SBA and other government employees, lending officials, and law enforcement representatives. Topics include \"types of fraud, fraud indicators and trends; how to report suspicious activity that may be fraudulent; suspension and debarment, the Program Fraud Civil Remedies Act, and other topics related to deterring and detecting fraud in government lending and contracting programs.\" ", "As shown in Table 6 , the SBA OIG provided 609 outreach and training sessions from FY2010 to FY2018 (an average of 67.7 sessions per fiscal year) to 13,278 attendees (an average of 1,475 attendees per fiscal year). ", "The data presented in Table 6 suggest that the SBA OIG actively provides training and outreach sessions related to identifying and addressing fraud. The office also participates in a number of activities involving federal agencies and others with an interest in fraud prevention activities. It is difficult to measure the impact of these training and outreach activities on the SBA's interaction with other federal agencies. The SBA OIG reports that these sessions are well-attended, and receive high ratings from attendees."], "subsections": []}, {"section_title": "Keeping the SBA Administrator and Congress Fully and Currently Informed", "paragraphs": ["As mentioned previously, the IG Act requires IGs to keep their agency's administrator and Congress fully and currently informed concerning fraud and other serious problems, abuses, and deficiencies relating to the agency's administration of its programs and operations and to report on the progress made in implementing recommended corrective action. The SBA OIG's informational role is conducted through both formal and informal communication. ", "Formal communication occurs through (1) the publication of audits, investigations, semiannual reports, and the annual Report on the Most Serious Management and Performance Challenges Facing the SBA ; (2) correspondence with SBA officials, congressional staff, and Members of Congress; (3) briefings with SBA officials, congressional staff, and Members of Congress (as needed or as requested); (4) press releases; and occasionally (5) congressional testimony. Informal communication occurs primarily through telephone consultation or by email with SBA officials, congressional staff, and Members of Congress (often facilitated by the SBA OIG's chief of staff).", "In terms of communication with Congress, the SBA OIG reports that it \"has regular communications and meetings (as needed or requested) to keep the Congress apprised of significant findings or issues identified during our oversight of SBA \" and that the \"OIG has a staff member that is responsible for congressional relations.\" In addition, because its semiannual reports to Congress are published every six months, the SBA OIG finds that those reports' \"utility as a viable means to make a recommendation for legislation advancing through the legislative process is limited in the context of current legislative affairs.\" As a result, because \"the legislative process is very dynamic,\" the SBA OIG often relies on \"frequent and informal\" communication with congressional staff and Members of Congress to provide its input on legislation and other matters affecting the SBA, often by telephone and email. ", "The SBA OIG reports frequent and, in its view, meaningful consultation with both the SBA and Congress in an attempt to keep them fully informed of its activities and recommendations. It is difficult to determine the impact and/or extent of the SBA OIG's communication with SBA officials, congressional staff, and Members of Congress because much of that communication occurs through informal means, is not tracked, and data concerning the SBA's or congressional response to the provided comments and recommendations are not compiled or reported. However, at the aforementioned March 2016 congressional hearing on the SBA's management and performance challenges, Representative Steve Chabot stated that, ", "By clarifying the specific areas in which improvement is needed and highlighting possible paths forward for the agency, the insights offered by the Inspector General are invaluable as the Committee continues to work with the SBA to develop meaningful solutions to its management and performance challenges."], "subsections": []}]}, {"section_title": "Relationship with Congress", "paragraphs": ["Generally speaking, OIGs' relationships with Congress tend to ebb and flow over time, varying with the personalities, interests, needs, and actions of the principals involved. One constant has been a genuine interest from Members of Congress of both political parties in OIGs' efforts to identify and reduce waste, fraud, and abuse and enhance program efficiency and effectiveness. The congressional interest in these issues can take on a partisan, contentious tone, especially during periods of divided government. The House and Senate Committees on Small Business, however, have traditionally tried to avoid partisanship. For example, at a potentially contentious Senate Committee on Small Business and Entrepreneurship hearing in 2007, then-Senate Committee Chair John Kerry stated, \"Senator Snowe [then-ranking Member] and I and all Members of this Committee manage a Committee that works in a very bipartisan way and try very hard to keep the politics off the table.\" More recently, Representative Steve Chabot stated the following during House floor consideration of H.R. 208 , the Recovery Improvements for Small Entities After Disaster Act of 2015:", "I want to offer a special thanks to our committee's ranking member, Ms. Velazquez, for her insight and leadership on this issue and for working in a bipartisan, bicameral manner, as she does. I have seen that as chair of the Small Business Committee that I chair now, but I have also been the ranking member under her when she was chair, and it was always bipartisan. We have worked together in a very collegial manner, and I thank her for that.", "The extent to which the small business committees have been able to avoid partisan conflict has varied somewhat over time, reflecting the personalities of committee leaders and the nature of the issues that have presented themselves at any given time. Nonetheless, the small business committees' tradition of valuing bipartisanship has served to reduce the potential for conflict with the SBA OIG, primarily because committee members generally do not feel a need to question the SBA OIG's motives when its investigations and audits find perceived weaknesses in the Administration's implementation of the SBA's programs or in the Administration's efforts to identify and address waste, fraud, and abuse. The expectation that both committee members and the SBA IG do not, and should not, pursue a political agenda may help to explain why small business committee members rarely ask the SBA OIG to undertake specific studies. In their view, the SBA IG is expected to aggressively pursue perceived weaknesses in the SBA's programs and operations regardless of potential political consequences. Requesting specific studies could be seen as suggesting that the SBA OIG is not doing its job well, or as a partisan effort to embarrass the Administration. ", "The SBA OIG's relationship with Congress has not always been without controversy. For example, in October 2008, then-Senator John Kerry, chair of the Senate Committee on Small Business and Entrepreneurship, criticized the SBA OIG on the Senate floor for issuing what he described as \"a heavily redacted report\" concerning the SBA's oversight of one of the agency's largest 7(a) lenders. Speaking on behalf of himself and then-Ranking Member Senator Olympia Snowe, he accused the SBA OIG of not exercising \"independent authority on what was redacted and instead let the agency it was investigating dictate that large sections of the report be redacted ... contrary to the usual process that occurs with SBA OIG reports.\" He argued that the SBA OIG's action had \"the potential to render the OIG useless,\" and \"prevented accountability in Government by keeping from the public information about the oversight capabilities of an agency that, though comparatively small, can have a huge impact on our economy.\"", "Senator Kerry's comments illustrate how quickly an OIG's relationship with Congress can change. Prior to the publication of that redacted report, the SBA OIG was generally praised by Members of both political parties for its efforts concerning the oversight of the SBA's response to the 2005 Gulf Coast hurricanes, audits of the SBA's oversight of lenders, and investigations leading to numerous indictments and convictions of fraudulent SBA lenders and borrowers. ", "In sum, comments by House and Senate small business committee leaders seem to suggest that they view the SBA OIG and GAO as two valuable assets that can assist and enhance the committees' oversight role. However, history has shown that an apparent harmonious relationship between an OIG and congressional committees can change quickly as circumstances change.", "Some areas of possible congressional interest concerning the SBA OIG, other than funding and staffing issues, include exploring ways to more accurately quantify the SBA OIG's claims of monetary savings and determining if the SBA OIG should undertake additional tracking and monitoring activities to more accurately quantify the office's impact on SBA programs and operations and legislation. "], "subsections": []}]}}
{"id": "R45557", "title": "The President\u2019s Authority to Withdraw the United States from the North American Free Trade Agreement (NAFTA) Without Further Congressional Action", "released_date": "2019-03-05T00:00:00", "summary": ["NAFTA is an international trade agreement among the United States, Canada, and Mexico that became effective on January 1, 1994. The agreement includes market-opening provisions that remove tariff and nontariff barriers to trade, as well as other rules affecting trade in areas such as agriculture, customs procedures, foreign investment, government procurement, intellectual property protection, and trade in services. Congress approved and implemented NAFTA in domestic law in the NAFTA Implementation Act (P.L. 103-182, 107 Stat. 2057). On May 18, 2017, U.S. Trade Representative Ambassador Robert Lighthizer notified Congress that the Administration intended to renegotiate NAFTA. More than a year later, following the conclusion of the negotiations, President Trump signed a proposed replacement for NAFTA, the United States-Mexico-Canada Free Trade Agreement (USMCA), along with his counterparts from Canada and Mexico. President Trump has at times suggested that he will withdraw the United States from NAFTA unilaterally if Congress does not approve the USMCA.", "This report examines the President's authority to terminate the United States' international obligations under NAFTA without further action from Congress. It also examines whether the NAFTA Implementation Act, the primary federal statute that implements the agreement in domestic law, would remain in effect if the President successfully terminated U.S. obligations under the agreement. In analyzing these issues, the report focuses on three related questions: (1) whether, under international law, the President may terminate U.S. international obligations under NAFTA without congressional approval; (2) whether, under domestic law, the President, relying on constitutional or statutory authority, may terminate U.S. international obligations under NAFTA unilaterally; and (3) whether the NAFTA Implementation Act would remain in effect if the President successfully terminated U.S. international obligations under the agreement.", "With regard to the first question, under international law, the President appears to be able to terminate the United States' international obligations under NAFTA without congressional approval by delivering six months' notice of withdrawal to Canada and Mexico, provided such notice later becomes effective (e.g., assuming that a court does not enjoin the Executive from issuing the notice or declare such issuance unlawful).", "The answer to the second question is less clear, however, and would require a reviewing court to confront several complicated issues of first impression, including the scope of the President's constitutional authority and statutory authority to terminate an international agreement. Justiciability questions may prevent a court from definitively answering the constitutional questions, leaving the resolution of the President's constitutional authority to the political process. With regard to the statutory question, while legal commentators have raised various arguments with respect to the President's domestic legal authority to terminate U.S. NAFTA international obligations unilaterally, it does not appear that any statute expressly affords the President with the authority to terminate NAFTA on his own. It is unclear whether Congress's enactment of an extensive legal framework providing for legislative consideration, approval, and implementation of trade agreements indicates that Congress did not intend to authorize the President implicitly to withdraw from NAFTA without further congressional action. Nonetheless, as explained below, provisions of federal law such as Sections 125 and 301 of the Trade Act of 1974 may provide the Executive with broad authority to suspend individual trade concessions granted to NAFTA countries and thereby establish barriers to trade with Canada and Mexico. At the same time, the Executive's use of such authority would, however, likely be subject to review on various grounds by domestic or international tribunals.", "Finally, whether the NAFTA Implementation Act would remain in effect after termination of U.S. obligations under NAFTA would be informed by Supreme Court precedent generally requiring the repeal of statutes to conform to the same bicameral process set forth in Article I of the Constitution that is used to enact new legislation. Accordingly, as an initial matter, it would appear that the President lacks authority to terminate the domestic effect of the NAFTA Implementation Act without going through the full legislative process for repeal. Thus, the Act appears to remain in effect unless Congress has, consistent with the Constitution, delegated to the President authority to terminate its provisions or made such provisions \"self-terminating.\""], "reports": {"section_title": "", "paragraphs": ["T his report examines the President's authority to terminate the United States' international obligations under the North American Free Trade Agreement (NAFTA) without further action from Congress. It also examines whether the NAFTA Implementation Act, the primary federal statute that implements the agreement in domestic law, would remain in effect if the President successfully terminated U.S. obligations under the agreement. In analyzing these issues, the report focuses on three related questions: (1) whether, under international law, the President may terminate U.S. international obligations under NAFTA without congressional approval; (2)\u00a0whether, under domestic law, the President, relying on constitutional or statutory authority, may terminate U.S. international obligations under NAFTA unilaterally; and (3) whether the NAFTA Implementation Act would remain in effect if the President successfully terminated U.S. international obligations under the agreement."], "subsections": [{"section_title": "Brief Background on NAFTA", "paragraphs": ["NAFTA is an international trade agreement among the United States, Canada, and Mexico that became effective on January 1, 1994. The agreement includes market-opening provisions that remove tariff and nontariff barriers to trade, as well as other rules affecting trade in areas such as agriculture, customs procedures, foreign investment, government procurement, intellectual property protection, and trade in services. The United States approved NAFTA as a congressional-executive agreement by a majority vote of each house of Congress, rather than as a treaty ratified by the President after Senate approval by a two-thirds majority vote. It was not a self-executing agreement; rather, implementing legislation was required to provide domestic legal authorities with the power to enforce and comply with the agreement's provisions. Congress approved and implemented NAFTA in domestic law in the NAFTA Implementation Act.", "Although many U.S. obligations under NAFTA were already implemented in domestic law prior to Congress's enactment of the NAFTA Implementation Act, Congress delegated rulemaking authority to the President and various federal agencies in the Act so that they could further implement NAFTA in domestic law by promulgating executive orders, proclamations, or regulations. The NAFTA implementing legislation contemplates certain limited changes to certain provisions of NAFTA (e.g., certain rules of origin) in accordance with NAFTA's rules for minor amendments to the text of the agreement and limited congressional delegations of authority to the President to implement such changes in U.S. law.", "On May 18, 2017, U.S. Trade Representative (USTR) Ambassador Robert Lighthizer notified Congress that the Administration intended to renegotiate NAFTA. More than a year later, following the conclusion of the negotiations, President Trump signed a proposed replacement for NAFTA, the United States-Mexico-Canada Free Trade Agreement (USMCA), along with his counterparts from Canada and Mexico. The new agreement addressed a variety of issues, including changes to rules of origin for automotive trade; intellectual property rights protections; digital trade; limitations on the scope of investor-state dispute settlement (ISDS) provisions; and certain provisions on agricultural trade. President Trump has at times suggested that he will withdraw the United States from NAFTA unilaterally if Congress does not approve the USMCA."], "subsections": []}, {"section_title": "The President's Unilateral Termination of U.S. NAFTA Obligations Analyzed Under International Law", "paragraphs": ["International law does not itself prohibit the President from unilaterally terminating the United States' obligations under NAFTA. NAFTA is a legally binding agreement under international law. In other words, NAFTA is a \"treaty\" under international law, a term that has a more expansive meaning than the same term when used in U.S. domestic practice. In this regard, it is important to distinguish \"treaty\" in the context of international law, in which \"treaty\" and \"international agreement\" are synonymous terms for all binding agreements, and \"treaty\" in the context of domestic American law, in which \"treaty\" may more narrowly refer to a particular subcategory of binding international agreements that receive the Senate's advice and consent.", "Part V of the Vienna Convention on the Law of Treaties (Vienna Convention), which the United States has not ratified but considers to reflect, in many aspects, customary international law, provides rules for withdrawal of a party from a binding international agreement. Article 54 of the Vienna Convention provides that \"termination of a treaty or the withdrawal of a party may take place . . . in conformity with the provisions of the treaty . . . .\" Article 2205 of NAFTA, which Congress approved in the NAFTA Implementation Act, provides that a \"Party may withdraw from this Agreement six months after it provides written notice of withdrawal to the other Parties. If a Party withdraws, the Agreement shall remain in force for the remaining Parties.\" NAFTA does not address whether, in the context of the United States' withdrawal from the agreement, the term \"Party\" includes both the President and Congress acting together to accomplish withdrawal. In addition, neither the other provisions of the agreement, the context in which they appear, nor the subsequent practice of the NAFTA parties sheds light on the issue.", "In the absence of language to the contrary in NAFTA Article 2205, the Vienna Convention applies. Article 67 of the Vienna Convention provides that:", "Any act of declaring invalid, terminating, withdrawing from or suspending the operation of a treaty pursuant to the provisions of the treaty . . . shall be carried out through an instrument communicated to the other parties. If the instrument is not signed by the Head of State, Head of Government or Minister for Foreign Affairs, the representative of the State communicating it may be called upon to produce full powers [i.e., a document showing that the representative has authority to terminate the agreement on behalf of the state].", "It thus appears that if the President (i.e., the \"head of state\" for the United States) communicated a notice of withdrawal from NAFTA to Canada and Mexico, and such notice became effective at least six months later, it would terminate the United States' obligations under the agreement as a matter of international law. The withdrawal process under international law, however, may not account for the unique statutory, constitutional, and separation-of-powers principles related to withdrawal under U.S. domestic law, as discussed below."], "subsections": []}, {"section_title": "The President's Unilateral Termination of U.S. NAFTA Obligations Analyzed Under Domestic Law", "paragraphs": ["If the President sought to terminate U.S. international obligations under NAFTA, an injured business or other party with standing to bring a lawsuit might seek an injunction from a U.S. federal court directing the executive branch to refrain from issuing a notice terminating U.S. obligations under NAFTA or a declaration from the court that such issuance is unlawful. It is difficult to predict how a court might resolve such a challenge, as U.S. courts have uniformly avoided answering whether the U.S. Constitution authorizes the President to terminate an international pact without express congressional approval. Instead, courts have left the executive and legislative branches to resolve disagreements over the termination power through the political process. While no court has considered a case involving a trade agreement approved as a congressional-executive agreement under Trade Promotion Authority (TPA) procedures, there is a significant possibility that a court would dismiss such a case for lack of jurisdiction.", "Congress could signal that it disputes the Executive's termination of U.S. NAFTA obligations to a court by enacting a law or resolution with a veto-proof majority opposing or purporting to block such action. If Congress passed such an act or resolution and the Executive still terminated NAFTA in direct derogation of that act or resolution, the legal paradigm governing the separation-of-powers analysis might shift. To resolve certain separation-of-powers conflicts, the Supreme Court typically applies the approach set forth in Justice Jackson's concurring opinion in Youngstown Sheet & Tube Co. v. Sawyer , which states that the President's constitutional powers often \"are not fixed but fluctuate, depending on their disjunction or conjunction with those of Congress.\" Justice Jackson's opinion sets forth a tripartite framework for evaluating the constitutional powers of the President. The President's authority is (1) at a maximum when acting pursuant to authorization by Congress; (2) in a \"zone of twilight\" when Congress and the President \"may have concurrent authority, or in which its distribution is uncertain,\" and Congress has not spoken on an issue; and (3) at its \"lowest ebb\" when taking measures incompatible with the will of Congress.", "Although Congress has not enacted a law or resolution prohibiting the President from terminating NAFTA unilaterally, such action could place the President's authority at the \"lowest ebb.\" In that scenario, the President may act in contravention of the will of Congress only in matters involving exclusive presidential prerogatives that are \"at once so conclusive and preclusive\" that they \"disabl[e] the Congress from acting upon the subject.\" Members of the executive branch have suggested that treaty termination is part of the President's plenary powers, but one could plausibly advance the counterargument that the legislative branch plays a shared role in the termination process, especially in matters that implicate Congress's enumerated powers, such as international trade.", "Assuming that a federal court found a case challenging the President's termination of NAFTA to be justiciable, it would likely evaluate the President's authority to take such action. Because Congress has not enacted a resolution or legislation disapproving of unilateral NAFTA termination, in order to terminate NAFTA without further congressional action, either (1) the President must possess plenary constitutional authority to terminate U.S. international obligations under NAFTA, or (2) Congress must have authorized the President to take such action through legislation."], "subsections": [{"section_title": "Does the President Have Plenary Constitutional Authority to Terminate U.S. International Obligations Under NAFTA?", "paragraphs": ["Although the Constitution establishes a procedure whereby the Executive has the power to make treaties with the advice and consent of the Senate, it is silent as to how the United States may withdraw from treaties or congressional-executive agreements. Scholars have also noted that the framers of the Constitution never directly addressed the power to terminate treaties (or congressional-executive agreements) in the Federalist Papers , the Constitutional Convention debates, or the debates of the state ratifying conventions. In the absence of guidance from the text or original meaning of the Constitution, a court considering whether the President has the constitutional authority to terminate U.S. international obligations under NAFTA without congressional approval would likely turn to other methods of constitutional interpretation. As discussed below, applying relevant methods of interpretation does not provide a clear answer as to whether the President possesses plenary constitutional authority to terminate U.S. obligations under NAFTA."], "subsections": [{"section_title": "Structuralism", "paragraphs": ["One method of constitutional interpretation, known as structuralism, draws inferences from the design of the Constitution, including the relationships among the three branches of the federal government (commonly called separation of powers). In this vein, Article I, Section 8 of the Constitution specifically gives Congress the authority to impose duties on imports of products from other countries and to \"regulate Commerce with foreign Nations.\" By contrast, although the President may possess constitutional authority to negotiate trade agreements and communicate a notice of withdrawal from an agreement to trading partners, Article II gives the President no specific power over international commerce or trade. The manner in which the Constitution apportions power over international commerce, granting such power specifically to Congress, suggests that the President may simply lack authority to terminate U.S. international obligations under NAFTA, which addresses commercial matters, without further congressional action.", "The Supreme Court, however, has interpreted Article II of the Constitution as granting the President the \"vast share of responsibility\" for conducting foreign relations. This authority includes, but also extends beyond, specific Article II powers to appoint ambassadors with advice and consent of the Senate; submit treaties to the Senate; ratify treaties; and act as the Commander in Chief of the Armed Forces. Courts and scholars generally accept that such authority includes the exclusive authority to negotiate treaties and international agreements and make official communications with foreign states. Because terminating the United States' NAFTA obligations implicates foreign relations and, more specifically, communication of a notice of withdrawal to foreign sovereigns (i.e., Canada and Mexico), one could argue that the design of the Constitution provides the President with independent power to terminate NAFTA unilaterally. Nonetheless, the President's preeminent role in communicating with foreign powers does not necessarily imply that he has authority to terminate a trade agreement without congressional consent."], "subsections": []}, {"section_title": "Historical Practice", "paragraphs": ["Long-established historical practices of the political branches may also be relevant to whether the President can terminate NAFTA unilaterally. In some cases, the United States has withdrawn from international legal agreements pursuant to the joint action of the political branches. However, beginning at the turn of the 20th century, the President has sometimes withdrawn unilaterally from an international agreement without the consent of Congress. Thus, general historical practice involving the termination of international agreements has been inconsistent, and therefore it may not be particularly helpful in resolving questions about the President's power to terminate trade agreements unilaterally.", "Defining the relevant historical practice more narrowly provides little guidance, as well. Historical experience with the suspension of modern free trade agreements (FTAs)\u2014those subsequently approved and implemented in domestic law as congressional-executive agreements by a majority vote in both houses of Congress under Trade Promotion Authority (TPA) procedures\u2014is limited. In fact, no U.S. FTA approved as a congressional-executive agreement under these procedures has been terminated. In the single instance involving suspension rather than termination of an FTA, Congress amended the act implementing the U.S.-Canada Free Trade Agreement preceding NAFTA to suspend certain provisions in the act while allowing others to continue to operate. Although this historical practice concerns suspension of an FTA rather than termination, a court could interpret it to suggest that Congress may have a role in terminating U.S. international obligations under NAFTA. However, because it is a single instance and involves suspension rather than termination of an agreement, a court could also find it to provide little guidance on the President's authority in this context."], "subsections": []}, {"section_title": "Pragmatism", "paragraphs": ["The practical consequences of a court concluding that the President possesses the power to terminate a trade agreement unilaterally may also be relevant. Generally, a pragmatic approach to constitutional interpretation weighs the future costs and benefits of an interpretation to society or the political branches, selecting the interpretation that may lead to the perceived best outcome. However, it is difficult to predict which set of pragmatic arguments a court would find most persuasive. On the one hand, one could argue that the President should possess an exclusive power of unilateral termination because (1)\u00a0the nation must have a \"single policy\" regarding which international trade agreements remain in effect, and (2) additional pronouncements from Congress on the issue could result in confusion for the United States and its trading partners. One might also arguably justify a unilateral termination power on the grounds that the United States needs a means to make decisive, quick, and clear decisions on withdrawal from NAFTA or other FTAs, particularly when another party has breached the agreement, and that it would make it easier for the President to threaten NAFTA partners with U.S. withdrawal from the agreement as a means of leverage to obtain concessions from them during renegotiation of the agreement. On the other hand, one could instead argue that a unilateral termination power would improperly allow a single actor (i.e., the President) to eliminate an international commercial agreement. In addition, the President's use of such a power could be viewed to undermine the United States' ability to make convincing international commitments in the realm of trade as well as other areas."], "subsections": []}]}, {"section_title": "Has Congress Granted the President Authority to Terminate U.S. NAFTA Obligations?", "paragraphs": ["Notwithstanding whether the President has plenary constitutional authority to terminate NAFTA, the President could terminate NAFTA without first seeking congressional approval if Congress has already given the Executive such authorization either expressly or by implication.", "It is unclear whether a court would find that Congress has implicitly approved of unilateral presidential termination of NAFTA obligations. Congress has enacted a detailed statutory framework for the negotiation, legislative consideration, and implementation of free trade agreements under Trade Promotion Authority (TPA) procedures. During the past few decades, Congress and the President have used this legal framework to conclude and implement 14 free trade agreements with 20 countries, including NAFTA. Given this extensive framework for legislative approval and implementation of trade agreements, a court might find it unlikely that Congress implicitly authorized the President to withdraw from NAFTA without further congressional action. On the other hand, the fact that Congress enacted a comprehensive statutory framework for entering into trade agreements, but not withdrawing from them, may indicate that Congress was not as concerned with the President's termination of U.S. obligations under the agreements.", "Nonetheless, some commentators have argued that Congress has specifically authorized the President to terminate U.S. international obligations under NAFTA. In particular, these commentators have pointed to Sections 125 and 301 of the Trade Act of 1974, an act that, among other things, sets up the procedure for Congress's consideration of trade agreement implementing legislation, as potentially providing such authority. The following subsections of this report therefore analyze whether Sections 125 and 301 grant the President this termination authority."], "subsections": [{"section_title": "Section 125 of the Trade Act of 1974", "paragraphs": ["Some commentators have argued that Section 125(a) of the Trade Act of 1974 authorizes the President to terminate U.S. NAFTA commitments. Congress specifically made this subsection applicable to NAFTA in the Omnibus Trade and Competitiveness Act of 1988, the Trade Promotion Authority (TPA) legislation for NAFTA. Section 125(a), titled \"Termination and Withdrawal Authority,\" which specifically addresses withdrawal from FTAs, provides the following:", "(a) Grant of authority for termination or withdrawal at end of period specified in agreement", "Every trade agreement entered into under [the Trade Act of 1974] shall be subject to termination, in whole or in part, or withdrawal, upon due notice, at the end of a period specified in the agreement. Such period shall be not more than 3 years from the date on which the agreement becomes effective. If the agreement is not terminated or withdrawn from at the end of the period so specified, it shall be subject to termination or withdrawal thereafter upon not more than 6 months' notice.", "If the President were to invoke Section 125(a) as authority for terminating U.S. international obligations under NAFTA, his actions might be challenged in federal court as exceeding the statutory authority delegated to him. Because no court has yet interpreted Section 125(a), the scope of the President's power under this provision would be an issue of first impression. In deciding whether Section 125(a) authorizes the President to terminate U.S. obligations under NAFTA, the court might consider several principles of statutory interpretation.", "First, a court would likely consider the ordinary meaning of the text. In this vein, the title of subsection (a)\u00a0may provide some guidance. The title \"Grant of authority for termination or withdrawal at end of period specified in agreement\" may suggest that Congress's purpose in enacting Section 125(a) was to \"grant\" the President the authority to terminate the agreement in accordance with the withdrawal provision in NAFTA Article 2205 without the need for further legislation. However, the Supreme Court has stated that statutory headings and titles \"are not meant to take the place of the detailed provisions of the text\" and that the title of an act \"cannot enlarge or confer powers.\" Although the title of subsection (a) may provide limited interpretive aid, it does not specify which political actor has withdrawal authority. Thus, it is unlikely that a court would view it as conferring authority on the President to terminate U.S. obligations under NAFTA.", "Turning to the text of Section 125(a), the provision states that agreements like NAFTA \"shall be subject to termination.\" The relevant dictionary definition of \"subject\" is \"contingent on or under the influence of some later action.\" To say that NAFTA is \"subject to\" termination means that it is capable of later being terminated but says nothing about which political actor(s) must terminate the agreement. This reading is supported by the canon of statutory construction that \"Congress . . . does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions\u2014it does not . . . hide elephants in mouseholes.\" It seems unlikely that Congress would have \"hidden\" a delegation of authority to the President to terminate NAFTA in a vaguely worded provision. Rather, the ordinary meaning of Section 125(a) appears to require only that the text of the NAFTA agreement contain a provision allowing for its termination.", "Legislative history materials appear to confirm this reading of Section 125(a). These materials suggest that Section 125(a)'s purpose was to ensure that trade agreements entered into by the President contained language providing for termination or withdrawal at the end of a certain time period. This reading is suggested by the House Committee on Ways and Means report on a predecessor to Section 125, Section 2(b) of the 1934 Reciprocal Trade Agreements Act. Congress enacted that law to authorize the President to negotiate reciprocal agreements reducing barriers to international trade during the Great Depression in order to stimulate the domestic economy. The House committee report stated the following:", "The final provision of the bill under consideration deals with the amount of time during which a foreign trade agreement with another country may run. The provision is that such agreement must be terminable at the end of not more than 3 years. If it is not terminated at that time it must thereafter be terminable at any time upon not more than 6 month[s'] notice.", "The committee reports thus suggest that Section 125(a)'s purpose was to ensure that the trade agreements that the President entered into would be subject to termination or terminable . Under this reading, Section 125(a) does not appear to delegate authority to the President to terminate those agreements unilaterally by delivering notice of withdrawal to trading partners."], "subsections": []}, {"section_title": "Section 301 of the Trade Act of 1974", "paragraphs": ["One scholar has argued that Section 301 of the Trade Act of 1974 authorizes the President to terminate U.S. obligations under NAFTA. Section 301 provides that the Office of the United States Trade Representative (USTR), a federal agency within the Executive Office of the President, must take certain specified trade actions \"subject to the specific direction, if any, of the President regarding any such action\" when it finds, after conducting an investigation and following other procedures, that:", "(A) the rights of the United States under any trade agreement are being denied; or (B) an act, policy, or practice of a foreign country\u2014(i) violates, or is inconsistent with, the provisions of, or otherwise denies benefits to the United States under, any trade agreement, or (ii) is unjustifiable and burdens or restricts United States commerce.", "Section 301 also provides the USTR with discretion to take \"all appropriate and feasible\" trade actions specifically authorized under subsection (c) when it finds that \"an act, policy, or practice of a foreign country is unreasonable or discriminatory and burdens or restricts United States commerce, and . . . action by the United States is appropriate.\"", "Section 301(c) provides a list of actions that the USTR may or must take in response to the unfair foreign trade practices. As relevant here, that list authorizes USTR to:", "(A) suspend, withdraw, or prevent the application of, benefits of trade agreement concessions to carry out a trade agreement with the foreign country [that is the subject of the Section 301 investigation];", "(B) impose duties or other import restrictions on the goods of, and, notwithstanding any other provision of law, fees or restrictions on the services of, such foreign country for such time as the Trade Representative determines appropriate . . .", "Notably, the list of actions in Section 301(c) does not explicitly include authorization for the Executive to deliver a notice of withdrawal from a trade agreement to U.S. trading partners and thereby terminate U.S. obligations under the agreement. Rather, as discussed further below, the legislative history of this provision, as recounted in committee reports, indicates that Congress merely intended the provision to provide the President broad authority to take action against unfair foreign trade practices by imposing various barriers to trade under domestic law, including by suspending or terminating individual trade concessions. The text and legislative history do not appear to suggest that Section 301(c) more broadly authorizes the USTR to terminate a trade agreement. However, as discussed below, the Executive might exercise the authority in Section 301 to establish significant barriers to trade with Canada and Mexico. Accordingly, if the USTR were to interpret Section 301(c) as authorizing it to terminate a trade agreement, it would appear that its actions would fall outside of the statutory authority delegated to the agency.", "It should be noted that courts reviewing specific USTR actions under Section 301 have in the past accorded \"substantial deference to decisions of the Trade Representative implicating the discretionary authority of the President in matters of foreign relations,\" including the USTR's selection of a remedy following a Section 301 investigation. But the U.S. Court of Appeals for the Federal Circuit, which reviews the USTR's actions under Section 301, has held that, under the Administrative Procedure Act, \"[t]he judiciary is the final authority on issues of statutory construction and must reject administrative constructions which are contrary to clear congressional intent.\" Furthermore, a court may hold agency action unlawful when there has been \"a clear misconstruction of the governing statute\" or \"action outside delegated authority.\" Because the text and legislative history of Section 301 indicate that Congress merely intended the provision to furnish the Executive with broad authority to take action against unfair foreign trade practices by imposing various barriers to trade under domestic law, it seems unlikely that a court would accord deference to a USTR interpretation that Section 301 authorizes the President to deliver notice of termination to Canada or Mexico."], "subsections": []}, {"section_title": "Presidential Authority to Impose Barriers to Trade with NAFTA Parties Under Sections 125 and 301", "paragraphs": ["Although neither Section 125 nor Section 301 of the Trade Act of 1974 appears to authorize the Executive to terminate U.S. international obligations under NAFTA, these statutory provisions appear to grant broad authority to the executive branch to impose barriers to trade on goods and services from Canada and Mexico under domestic law. For example, the text and legislative history of Section 125(b)-(f) suggest that Congress intended to provide the President with broad authority to terminate various presidential proclamations implementing a trade agreement in domestic law (e.g., proclamations implementing tariff reductions) and to impose trade barriers in order to, for example, respond to a breach of the agreement by another party. And the text and legislative history of Section 301, as recounted in committee reports, indicate that the provision was intended to provide the Executive with broad authority to effect the temporary suspension or withdrawal of individual trade concessions accorded by the United States to the goods and services of trading partners while a trade agreement remained in effect.", "Although such provisions appear to furnish the executive branch with broad authority to suspend or terminate individual trade concessions, the Executive's actions under these provisions could be subject to challenge before international and domestic tribunals. For example, the Executive's imposition of trade barriers pursuant to such authorities may place the United States in breach of its obligations under other international agreements, such as the World Trade Organization (WTO) agreements. If a dispute proceeded to a WTO panel, and the panel rendered an adverse decision against the United States, the United States would be expected to remove the offending measure, generally within a reasonable period of time, or face the possibility of paying compensation to the complaining member or being subject to sanctions. Such sanctions might include the complaining member imposing higher duties on imports of selected products from the United States. However, a WTO Member could begin to impose its own duties on selected U.S. exports without awaiting the outcome of a dispute settlement proceeding.", "In addition, a domestic court might consider whether, in exercising authority under Section 125, the President acted within the scope of his delegated powers as defined by the terms of the statute, or whether the President's actions were proportional to the circumstances cited to justify them. As a further example, a federal court could review USTR's Section 301 actions under the Administrative Procedure Act to determine whether they are \"arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.\" A reviewing court might consider, for example, whether the USTR's Section 301 actions involved \"a clear misconstruction of the governing statute,\" \"a significant procedural violation,\" or \"action outside delegated authority.\""], "subsections": []}]}]}, {"section_title": "Whether the NAFTA Implementation Act Would Remain in Effect After Termination of U.S. NAFTA Obligations", "paragraphs": ["The NAFTA Implementation Act, the primary federal statute that implements NAFTA in domestic law, would likely remain in effect if the President successfully terminated the United States' international obligations under NAFTA unilaterally. Under Supreme Court precedent, the repealing of statutes generally must conform to the same bicameral and presentment process set forth in Article I that is used to enact new legislation. For example, in Clinton v. City of New York , the Supreme Court struck down the Line Item Veto Act (LIVA), a law that authorized the President, within five days of signing a bill into law, to make partial cancellation of certain tax and spending provisions in the law if the President determined certain criteria were met. The Court held that the LIVA violated the bicameralism and presentment requirements of the Constitution because the President could effectively repeal acts of Congress without going through the regular legislative process involving House and Senate passage of legislation and presentment of it to the President for his signature or veto. Nonetheless, the Court has recognized Congress's authority to enact contingent legislation that provides for the alteration of a law's effect based on a condition that arises after the law is enacted.", "It should be noted that Sections 109(b) and 415 of the NAFTA Implementation Act contain language that could be read to effect the repeal of certain provisions of the NAFTA Implementation Act under specific circumstances.", "Specifically, section 109(b) states the following:", "(b) TERMINATION OF NAFTA STATUS\u2014During any period in which a country ceases to be a NAFTA country, sections 101 through 106 shall cease to have effect with respect to such country.", "Section 415(a) provides similar language with respect to certain provisions addressing dispute settlement in antidumping and countervailing duty cases in Title IV of the NAFTA Implementation Act:", "IN GENERAL\u2014Except as provided in subsection (b)[, which contains transitional provisions], on the date on which a country ceases to be a NAFTA country, the provisions of this title (other than this section) and the amendments made by this title shall cease to have effect with respect to that country.", "The NAFTA Implementation Act defines \"NAFTA country\" as those countries (i.e., Canada and Mexico) (1) to which the agreement is in force and (2) to which the United States \"applies the Agreement.\"", "The text and legislative history of Sections 109(b) and 415 of the NAFTA Implementation Act indicate that Congress intended these sections to trigger automatic termination of certain provisions of the Act with respect to Canada or Mexico when either country withdrew from NAFTA but the United States remained a party. However, it is unclear what language in either of these provisions would afford the President the authority to terminate the agreement without such conduct by Canada or Mexico. Moreover, interpreting Sections 109(b) and 415 to provide for the automatic termination of certain provisions in the NAFTA Implementation Act when the President unilaterally terminates U.S. NAFTA obligations under international law would appear to violate a key canon of statutory construction that holds that if one plausible reading of a statute would raise questions about the statute's constitutionality, a court should look for another, \"fairly possible\" reading that would avoid the constitutional issue. Interpreting Sections 109(b) and 415 to authorize the President to terminate portions of the NAFTA Implementation Act by withdrawing the United States from NAFTA would raise the question of whether Congress's delegation of such authority to the President violates separation-of-powers principles by contravening the Presentment Clause of the Constitution, which, as noted above, requires that legislation be passed by Congress and presented to the President for his signature or veto in order to become law. Accordingly, a more likely reading of Sections 109(b) and 415 would likely be that certain provisions of the NAFTA Implementation Act cease to have effect with respect to Canada or Mexico if either country withdraws from NAFTA but the United States remains a party. Therefore, absent further congressional action, the United States' withdrawal from NAFTA alone appears unlikely to trigger Sections 109(b) and 415 or render the NAFTA Implementation Act ineffective. ", "Notably, even if the NAFTA Implementation Act remains in effect, other provisions of federal law (e.g., Section 301 of the Trade Act of 1974) may grant the President or a federal agency authority to restrict trade with Canada or Mexico. As noted, such actions would likely be subject to judicial review on various grounds."], "subsections": []}]}}
{"id": "R44737", "title": "The Closure of Institutions of Higher Education: Student Options, Borrower Relief, and Other Implications ", "released_date": "2019-02-05T00:00:00", "summary": ["When an institution of higher education (IHE) closes, a student's postsecondary education may be disrupted. Students enrolled at closing IHEs may face numerous issues and may be required to make difficult decisions in the wake of a closure. Two key issues students may face when their IHEs close relate to their academic plans and their personal finances.", "The academic issues faced by students when their schools close include whether they will continue to pursue their postsecondary education, and if so, where and how they might do so. Students deciding to continue their postsecondary education have several options. They may participate in a teach-out offered by the closing institution or by another institution. A teach-out is a plan that provides students with the opportunity to complete their program of study after a school's closure. Students may also be able to transfer the credits they previously earned at the closed IHE to another IHE. If a student is able to transfer some or all of the previously earned credits, he or she would not be required to repeat the classes those credits represent at the new institution; if a student is unable to transfer previously earned credits, the student may be required to repeat the classes those credits represent at the new IHE. Decisions regarding the acceptance of credit transfers are within the discretion of the accepting IHE.", "The financial issues faced by students when their schools close include whether they are responsible for repaying any loans borrowed to attend a closed school and how they might finance any additional postsecondary education they pursue. In general, a closed school loan discharge is available to a borrower of federal student loans made under Title IV of the Higher Education Act (P.L. 89-329, as amended), if the student was enrolled at the IHE when it closed or if the student withdrew from the IHE within 120 days prior to its closure. Additionally, the student must have been unable to complete his or her program of study at the closed school or a comparable program at another IHE, either through a teach-out agreement or by transferring any credits to another IHE. Borrowers ineligible for a closed school discharge may be able to have eligible Title IV federal student loans discharged by successfully asserting as a borrower defense to repayment (BDR) certain acts or omissions of an IHE, if the cause of action directly relates to the loan or educational services for which the loan was provided. Whether a borrower may have discharged all or part of any private education loans borrowed to attend the closed IHE may depend on the loan's terms and conditions.", "Some students may also face issues regarding how they might finance future postsecondary educational pursuits. If a borrower receives a closed school discharge or has a successful BDR claim, the discharged loan will not count against the borrower's Subsidized Loan usage period, which typically limits certain borrowers' receipt of Direct Subsidized Loans for a period equal to 150% of the published length of his or her academic program, and a borrower's statutory annual and aggregate borrowing limits on Direct Subsidized and Direct Unsubsidized Loans are unlikely to be affected. Students who receive a Pell Grant for enrollment at a school that closed may have an equivalent amount of Pell eligibility restored. Likewise, if the student used GI Bill educational benefits from the Department of Veterans Affairs for attendance at a closed school, those benefits can be restored.", "Students may be reimbursed for payments on charges levied by closed IHEs that are not covered by other sources from a State Tuition Recovery Fund (STRF). The availability of and student eligibility for such funds vary by state, and not all states operate STRFs. Finally, the receipt of any of the above-mentioned benefits may have federal and state income tax implications, including the potential creation of a federal income tax liability for borrowers who have certain loans discharged."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["In academic year (AY) 2017-2018, 6,700 institutions of higher education (IHEs), enrolling over 27 million postsecondary education students in AY2016-2017, participated in the federal student aid programs authorized under Title IV of the Higher Education Act of 1965 (HEA; P.L. 89-329, as amended). These IHEs ranged in sector, size, and educational programs offered. They comprised all sectors (i.e., public, private nonprofit, and proprietary), with some IHEs enrolling as few as three students and others enrolling over 190,000 in a single year. Offered educational programs varied from certificate programs in career and technical fields to doctoral and professional degree programs. ", "Most of these IHEs operate from year to year with few severe financial or operational concerns; however, each year, a few do face such concerns, which may cause them to cease or significantly curtail operations. The recent closure of multiple large, proprietary (or private, for-profit) IHEs has brought into focus the extent to which a postsecondary student's education may be disrupted by a school closure. However, even in instances of a small IHE's closure, student concerns remain the same. Concerns include the following, among others: Can they continue their postsecondary education at another school? How will they finance future postsecondary educational pursuits? Are they liable for repaying loans they may have borrowed to pursue a postsecondary credential that they were unable to obtain because of an IHE's closure?", "This report provides an explanation of the options a postsecondary student may pursue in the event the IHE he or she attends closes, any financial relief that may be available to such students, and other practical implications for students following a school's closure. First, this report describes the academic options available to such students, such as participating in a teach-out or transferring to a new IHE. Next, it discusses issues related to financing a postsecondary education, including the extent to which borrowers may have any loans borrowed to finance educational expenses discharged due to a school closure and whether future financial assistance, including federal student loans, Pell Grants, and GI educational benefits, may be available to students should they decide to continue their postsecondary education at another IHE. This report then describes additional relief that may be available to students who attended IHEs that closed, such as the potential to have tuition paid reimbursed through a state tuition recovery fund. Finally, this report describes some potential income tax implications for students when their IHE has closed, including the extent to which they may incur a federal income tax liability for loans discharged and whether higher education tax credits remain available to them in future years.", "The Appendix provides a list of abbreviations used in this report."], "subsections": []}, {"section_title": "Academic Options and Consequences", "paragraphs": ["In the event of a school closure, currently enrolled students must consider their academic options, including whether they will continue pursuing their postsecondary education, and if so, where. Two options that may be available to students include teach-outs and credit transfer."], "subsections": [{"section_title": "Teach-Out Plans and Agreements", "paragraphs": ["To participate in the Title IV federal student aid programs, an IHE must, among other requirements, agree to submit a teach-out plan to its accrediting agency if it intends to close a location that provides 100% of at least one educational program offered by the IHE or if it intends to otherwise cease operations. As part of a teach-out plan, an IHE may enter into a teach-out agreement with another IHE to provide the closing IHE's students with an educational program of similar content."], "subsections": [{"section_title": "Teach-Out Plans", "paragraphs": ["A teach-out plan is an institution's \"written plan that provides for the equitable treatment of students if [the IHE] ceases to operate before all students have completed their program of study.\" Accrediting agencies establish the criteria IHEs must meet when submitting a teach-out plan; thus, there are no standard components of a teach-out plan. Typically, however, in a teach-out plan, an IHE may be required to include provisions for students to complete their programs of study within a reasonable amount of time, a communication plan to affected parties (e.g., faculty and students) informing them of the impending closure, and information on how students may access their institutional records. "], "subsections": []}, {"section_title": "Teach-Out Agreements", "paragraphs": ["As part of a teach-out plan, an IHE may enter into a teach-out agreement with another IHE. A teach-out agreement is an agreement between the closing IHE and another IHE that provides the closing IHE's students with a reasonable opportunity to complete their programs of study at the new IHE. Teach-out agreements are used when an IHE ceases operations before all of its enrolled students are able to complete their programs of study. Under a teach-out agreement, the new IHE must", "provide students with an educational program that is of an acceptable quality and reasonably similar in content, structure, and scheduling to that provided by the closing IHE; be accredited or preaccredited by a Department of Education (ED) recognized accrediting agency, remain stable, carry out its mission, and meet all obligations to its current students; and demonstrate that it can provide students with access to its services without requiring students to move or travel a substantial distance.", "In addition, teach-out agreements may establish the cost of attendance for students being taught out.", "When implemented, teach-out agreements may take a variety of forms. For instance, a teach-out agreement may provide that the teach-out institution will provide the faculty and student supports necessary to deliver the closing IHE's educational programs at the closing IHE's facilities for the remainder of the academic year in which the closing IHE ceases operations. In other instances, a teach-out agreement may provide educational programs to the closing IHE's students at the teach-out IHE's facilities. ", "In the event an IHE closes without a teach-out plan or agreement in place, the IHE's accrediting agency must work with ED and appropriate state agencies to assist students in finding opportunities to complete their postsecondary education."], "subsections": []}]}, {"section_title": "Credit Transfer", "paragraphs": ["In lieu of a teach-out, students of closed IHEs may be able to continue their postsecondary education by transferring some or all of the credits earned at the closed IHE to another IHE. In general, credit transfer is the process of one institution (the accepting institution) measuring a student's prior learning (typically via coursework) at another institution (the sending institution) and comparing that prior learning against educational offerings at the accepting institution. The accepting institution determines whether a student's prior learning meets its standards and whether the prior learning is applicable to its educational programs. If it determines the prior learning meets its standards, the accepting institutions gives credit toward its educational programs for the prior learning, such that a student transferring credits need not repeat all or part of a program's curriculum. Transfer-of-credit policies are determined by individual IHEs.", "To smooth the credit transfer process, some IHEs have entered into articulation agreements. Articulation agreements are agreements between two or more IHEs demonstrating that a student's prior learning from a sending IHE meets the accepting IHE's standards. Typically, they guarantee acceptance of at least some credits earned at the sending institution by the accepting institution.", "The HEA does not require Title IV participating IHEs to maintain transfer-of-credit policies nor does it specify requirements for transfer-of-credit policies for IHEs that do have them. The HEA does, however, require that Title IV participating IHEs make publicly available any transfer-of-credit policies they may have in place. In disclosing transfer-of-credit policies, accepting IHEs must include information on the criteria the institution uses in evaluating credit transfers, and all institutions that are parties to articulation agreements must disclose a list of IHEs with which it has articulation agreements. ", "Students who attended a closed IHE may decide to continue their postsecondary education at another IHE and may wish to transfer credits earned at the closed IHE to the new IHE. Typically, students must initiate the credit-transfer process by expressing interest in transferring credit to another IHE. The IHE would then inform the student of next steps the student must take to enroll. Because IHEs set their own credit transfer criteria, credit transfer may not be guaranteed. Thus, some students may have all or a large proportion of their previously earned credits transferred to an accepting IHE and may experience little to no disruption or delay in their postsecondary educational pursuits, while others may have few or no credits transferred to an accepting IHE and may experience significant disruptions and delays in their postsecondary education. In addition, a student may incur greater financial obligations (e.g., student loans) if he or she must repeat coursework because credit from the closed school did not transfer. ", "Finally, students who successfully transfer some or all of their previously earned credits would be required to meet the accepting IHE's satisfactory academic progress (SAP) policies to maintain eligibility to receive Title IV funds at the accepting IHE. IHEs may establish their own SAP policies, but these policies must meet minimum federal standards, which must establish a minimum grade point average (or equivalent) and a maximum time frame in which students must complete their education program (pace of completion). Only transfer credits that count toward a student's educational program at the accepting IHE are included in the accepting IHE's calculation of SAP. Thus, if a student is unable to transfer any credits from a closed IHE to another IHE, the student's previously earned credits will not count toward the accepting IHE's SAP calculation and would not have the potential to affect the student's aid eligibility with respect to SAP at the new IHE. However, should some or all of a student's previously earned credits from a closed IHE transfer to another IHE, depending on the accepting IHE's specific SAP policy, a student's Title IV eligibility may be affected such that he or she may not be meeting the IHE's SAP policies and thus may be ineligible for Title IV aid at the accepting IHE."], "subsections": []}]}, {"section_title": "Financial Options and Consequences", "paragraphs": ["Along with considering academic options in the event of a school closure, students may also need to consider the financial options available to them, as they may have received financial assistance to help finance their education at the closed school and may need to seek financial assistance should they decide to continue pursuing a postsecondary education. Considerations for students who borrowed funds (or parents who borrowed funds on behalf of a student) to finance their education at a closed school include whether they are responsible for repaying any loans borrowed to attend the school. Considerations for students who wish to continue their education at another IHE include the extent to which their eligibility for various forms of financial aid (e.g., Direct Loans, Pell Grants, GI Bill Educational Benefits) may be affected by their previous use of those benefits at the closed school."], "subsections": [{"section_title": "Loan Discharge", "paragraphs": ["In some instances, individuals who borrowed funds to finance postsecondary education expenses may be provided some relief from being required to repay their loans, depending on the type of loan they seek to have discharged and specific borrower circumstances."], "subsections": [{"section_title": "Federal Student Loans", "paragraphs": ["Students who attended a school that closed (or the parents of students who attend a school that closed) may have borrowed federal student loans to help finance their postsecondary education at the closed school. For HEA Title IV federal student loans (i.e., loans made under the Direct Loan [DL], Federal Family Education Loan [FFEL], and Perkins Loan programs), borrowers may be provided some relief from being required to repay their federal student loans through a closed school loan discharge. In addition, borrowers who are ineligible for a closed school loan discharge may, in certain circumstances, seek debt relief on their Title IV student loans by asserting a borrower defense to repayment (BDR) for certain acts or omissions of an IHE, if the cause of action directly relates to the loan or educational services for which the loan was provided. The availability of a BDR claim may be closely related to a school's closure, as oftentimes, a BDR claim is predicated on misleading representations of an IHE relating to the educational services provided, and in recent years allegations of misrepresentation have played a part in the ultimate closure of some IHEs. ", "Previously, regulatory provisions addressed closed school discharge standards and procedures. They also addressed BDR standards and procedures, but in a somewhat limited manner. On November 1, 2016, ED promulgated new regulations (hereinafter, \"the 2016 regulations\") intended to create a more robust set of standards and streamlined procedures for assessing BDR claims and to make some changes to the closed school discharge procedures. These regulations were scheduled to take effect on July 1, 2017, but prior to the effective date, ED issued a Final Rule establishing July 1, 2019, as the new effective date for the regulations. Following a series of lawsuits, however, a court vacated the delay of the 2016 regulations. The 2016 regulations went into effect October 16, 2018, and ED is currently working to fully implement the 2016 regulations. On July 31, 2018, ED issued a new Notice of Proposed Rulemaking to revise the BDR standards. A Final Rule has not yet been issued, and it appears that the potential new BDR regulations would not go into effect until at least July 2020.", "The following section of the report describes the closed school discharge and BDR regulations, as in effect on October 16, 2018."], "subsections": [{"section_title": "Closed School Loan Discharge", "paragraphs": ["Students who attended a school that closed (or their parents) may be eligible to have the full balance of the outstanding HEA Title IV loans they borrowed to attend the IHE discharged. In general, borrowers of Title IV loans may be eligible to have the full balance of their outstanding HEA Title IV loans discharged (including any accrued interest and collection costs) if they, or the student on whose behalf a parent borrowed in the case of Parent PLUS Loans, are unable to complete the program in which they enrolled due to the closure of the school. Borrowers who have their loans discharged due to a school closure are also eligible to be reimbursed for any amounts previously paid or collected on those loans, and if any adverse credit history was associated with the loan (e.g., default), the loan discharge will be reported to credit bureaus so that they may delete the adverse credit history associated with the loan. ", "Closed School Loan Discharge Eligibility", "Typically, to be eligible for loan discharge due to school closure, a student must have been enrolled in an IHE when it closed or must have withdrawn from the IHE within 120 days prior to its closure. In addition, the student must have been unable to complete his or her program of study at the closed school or in a comparable program at another IHE, either through a teach-out agreement or by transferring any credits to another IHE. ", "If the closing school offers the option for students to complete their education through a teach-out agreement with another IHE, a student may refuse the option, and the borrower may still qualify for loan discharge. However, in general, a borrower may not qualify for a closed school discharge in the following scenario: a student refuses the teach-out, later enrolls at another IHE in a program comparable to the one in which he or she had been enrolled, receives t ransfer credit for work completed at the closed school, and completes the program at the new IHE.", "Alternatively, if a student transfers credits to a new school but completes an entirely different program of study at the new school, then the borrower is eligible for loan discharge, regardless of the fact that some credits from the closed IHE may have transferred to the new IHE. This is because the program at the new school is entirely different than the one for which the loans were intended at the previous school. ", "Finally, to obtain discharge a borrower must cooperate with ED in any judicial or administrative proceeding brought by ED to recover amounts discharged from the school. If a borrower fails to cooperate with ED, the loan discharge may be revoked. ", "Closed School Loan Discharge Procedures", "Borrowers may have their loans discharged in one of two ways: (1) by applying for a closed school loan discharge or (2) by having their loans automatically discharged by the Secretary of Education (the Secretary). ", "Borrowers applying for a closed school discharge must fill out the closed school loan discharge application and return it to their loan servicer. Generally, while a borrower's loan discharge application is being considered, the borrower's loan is placed in forbearance until a discharge decision is made. Under forbearance, a borrower is able to temporarily stop making payments or reduce the monthly payments on his or her federal student loans. During this time, interest continues to accrue on both subsidized and unsubsidized loans. In addition, collections on an eligible defaulted loan cease, although a borrower may continue to make payments on the loan.", "Borrowers may initiate the closed school loan discharge process on their own; however, the Secretary is required to identify all borrowers who may be eligible for a closed school discharge upon a school's closure and mail to each borrower a discharge application and an explanation of qualifications and procedures for obtaining a discharge, if the borrower's address is known. After the Secretary sends notice to a borrower, the Secretary suspends any effort to collect a borrower's defaulted loans. The borrower then has 60 days in which to submit a closed school discharge application. If the borrower fails to submit such an application within the 60-day time frame, the Secretary resumes collections and again provides the borrower with another discharge application and an explanation of qualifications and procedures for obtaining a discharge. Should a borrower not submit a closed school discharge application within the 60-day time frame, he or she may still submit a closed school discharge application at any time for consideration.", "Alternatively, a borrower's loans will be automatically discharged by the Secretary, if with respect to schools that closed on or after November 1, 2013, the Secretary determines that the borrower did not subsequently reenroll in any Title IV eligible institution within three years after the school closed. A borrower's loans also may be automatically discharged if the Secretary determines the borrower qualifies for the discharge based on information within ED's possession.", "Relief Provided", "If a borrower receives a closed school discharge, the full balance of the outstanding Title IV loan borrowed to attend the IHE is discharged and the borrower is qualified to be reimbursed for any amounts previously paid or collected on those loans. In addition, for loans that were considered in default, ED is to consider such loans not in default following discharge, and the borrower is to regain eligibility to receive additional Title IV assistance. Finally, ED is to update reports to consumer reporting agencies so that they may delete any adverse credit history associated with the loan."], "subsections": []}, {"section_title": "Borrower Defense to Repayment", "paragraphs": ["Even if borrowers who attended a closed school are ineligible for a closed school loan discharge, they may, in certain circumstances, seek debt relief on their Title IV student loans by asserting a borrower defense to repayment (BDR) certain acts or omissions of an IHE, if the cause of action directly relates to the loan or educational services for which the loan was provided. The availability of a BDR claim may be closely related to a school's closure, as oftentimes, a BDR claim is predicated on misleading representations of an IHE relating to the educational services provided, and in recent years, allegations of misrepresentation have played a part in the ultimate closure of some IHEs. Whether a borrower may seek this type of relief depends on the type of Title IV loan borrowed. The standard under which a BDR may be reviewed also depends on the type of Title IV loan borrowed and when the loan was disbursed. Newly promulgated BDR procedures apply to many, but not all, BDR claims and vary depending on the type of Title IV loan.", "If a borrower's BDR is successful, ED is to determine the amount of debt relief to which the borrower is entitled, which can include relief from repaying all or part of the outstanding loan balance and reimbursement for previous amounts paid toward or collected on the loan. Additionally, if an adverse credit history was associated with the loan (e.g., default), the loan discharge is to be reported to credit bureaus so that they may delete the adverse credit history associated with the loan.", "Applicable Borrower Defense to Repayment Standards", "The HEA specifies that Direct Loan borrowers may assert as a defense to repayment certain \"acts or omissions of an institution of higher education.\" Although this statutory language is specific to Direct Loans, implementing regulations have expanded the instances in which a borrower of a non-Direct Loan may assert a BDR claim. Thus, loans that are potentially eligible for discharge under a BDR claim include Direct Loan program loans and Federal Family Education Loan program loans and Perkins Loans program loans, if they are first consolidated into a Direct Consolidation Loan. ", "In addition, even if a FFEL program loan is not consolidated into a Direct Consolidation Loan, FFEL program regulations specify instances in which a FFEL program loan may not be legally enforceable, such that a borrower need not repay it. ED has stated that the claims a borrower could bring as a defense against repayment under the FFEL program are the same as the pre-July 1, 2017, standards (discussed later in this report) that could be brought under the DL program. Perkins Loan program loans that are not consolidated into Direct Consolidation Loans may not assert a BDR claim.", "In general, two separate BDR standards may be applied to eligible student loans under the Direct Loan program regulations. For eligible loans made prior to July 1, 2017, a borrower may assert as a defense to repayment an IHE's acts or omissions that \"would give rise to a cause of action against the school under applicable State law,\" and the IHE's acts or omissions must relate to the making of the loan for enrollment at the IHE or the provision of educational services for which the loan was provided (hereinafter, \"pre-July 1, 2017, standard\"). For eligible loans made on or after July 1, 2017, a borrower may assert as a defense to repayment one of the following, as it relates to the making of a borrower's loan for enrollment at the IHE or the provision of the educational services for which the loan was made (hereinafter, \"post-July 1, 2017, standard\"):", "A substantial misrepresentation by an IHE that the borrower \"reasonably relied on to the borrower's detriment when the borrower decided to attend, or to continue attending, the school\" or decided to take out certain loans; A nondefault, contested state or federal court judgment against an IHE; or A breach of contract by an IHE, where an IHE failed to perform obligations under the terms of a contract with a student, such as the provision of specific programs or services.", "As indicated above, the BDR standard applied in a borrower's case may depend to a large extent on the date on which a borrower's loans were disbursed. However, other considerations that relate to the type of federal student loan made also play a role in determining which BDR standard may apply in a borrower's case. In general, for DL program loans not paid off through a Direct Consolidation Loan, the BDR standard used would depend on the date on which a borrower's loans were disbursed. For FFEL program loans not paid off through a Direct Consolidation Loan, the pre-July 1, 2017, standard would apply. For DL program loans paid off through a Direct Consolidation Loan, the BDR standard used would depend on the date on which the underlying Direct Loan was disbursed. For eligible non-DL program loans paid off through a Direct Consolidation Loan, the BDR standard used would depend on the date on which the Direct Consolidation Loan was made. Direct Consolidation Loans comprising underlying loans disbursed both before and after July 1, 2017, would necessarily have been disbursed after July 1, 2017. Thus, in this scenario, the post-July 1, 2017, standard would apply to any eligible non-DL program loans paid off through the Direct Consolidation Loan and either the pre- or post-July 1, 2017, standard would apply to any Direct Loans paid off through the Direct Consolidation Loan, depending on the date the underlying Direct Loan was disbursed. Table 1 depicts the BDR standard that would be applied in a BDR proceeding based on type of federal student loan at issue and the date on which the loan was disbursed.", "BDR Procedures", "Regulations establish two separate processes through which a BDR claim may be asserted on a borrower's DL program loans: an individual claim process and a group claim process. This section of the report describes the 2016 regulations' BDR procedures for DL program loans (including Direct Consolidation Loans that repaid eligible non-DL program loans for which a borrower asserts a BDR claim) under which BDR claims may be more likely to be asserted, as DL program borrowers account for approximately 80% of all borrowers with outstanding Title IV loans. The procedures described herein would not apply to ED-owned FFEL program loans or to FFEL programs loans held by private and state-based entities that are not consolidated into Direct Consolidation Loans. For such ED-owned FFEL program loans, ED would review and adjudicate any BDR claims. For such FFEL program loans not owned by ED, BDR claims procedures may vary by loan holder. ", "To assert a BDR claim as an individual, a borrower must submit a BDR application, which among other items requires the borrower to provide evidence that supports his or her BDR claim. Upon receipt of the application and while the BDR claim is evaluated, ED places any nondefaulted Direct Loans into forbearance and ceases collections on defaulted loans. If a borrower with a FFEL program loan files a BDR claim with ED, ED notifies the lender or loan holder, as appropriate. The lender places the loan in forbearance in yearly increments, and the loan holder ceases collection on any defaulted loans while a borrower's BDR claim is being evaluated. If ED determines that the borrower would be eligible for relief if he or she consolidated the FFEL program loan into a Direct Consolidation Loan, the borrower would then be able to consolidate the loan into a Direct Consolidation Loan and receive BDR relief. If ED determines that the borrower would not qualify for BDR, then the loan is removed from forbearance or collections resume, as appropriate. ", "To determine whether an individual qualifies for BDR relief, the Secretary designates an ED official to review the borrower's application and resolves the claim through a fact-finding process. As part of that process, ED notifies the IHE against which the BDR claim is asserted and reviews any evidence submitted by the borrower and other relevant information, such as ED records and any submissions from the IHE. After the fact-finding process, the ED official issues a written decision on the claim. If the claim is approved in full or in part, ED notifies the borrower of the relief provided. If the claim is denied in full or in part, ED notifies the borrower of the reason for the denial, along with other relevant information. The decision made by the ED official is \"final as to the merits of the claim and any relief that may be granted on the claim.\" However, if the borrower's claim is denied in full or in part, the borrower may request that ED reconsider his or her claim upon the identification of new evidence. In addition, ED may reopen a BDR application at any time to consider evidence that was not considered in the previous decision.", "Regulations also establish a group process for BDR claims. Under these procedures, upon consideration of factors such as a common set of facts and claims or fiscal impact, the Secretary may initiate a process to determine whether a group of borrowers has a BDR claim. ED may identify members for a group BDR claim by either consolidating applications filed by individuals in the above-described process that have common facts and claims or by determining that there are common facts and claims that apply to borrowers who have not filed individual applications. Loans of borrowers who have filed individual claims that are consolidated into a group BDR claim remain in forbearance or suspended collections as described above, and loans of identified group members who have not filed individual claims are placed in forbearance or suspended collections as described above. ED notifies identified group members of the group proceeding and informs them that they may opt out of the group proceeding. ED also notifies the school against which the group BDR claim is asserted.", "For the fact-finding portion of a group BDR claim, one set of procedures applies to a BDR claim relating to loans made to attend a school that has closed and from which there is no financial protection or other entity that ED may recover losses from associated with the BDR claims. Another set of fact-finding procedures applies to BDR claims relating to loans made to attend a school that has closed and for which there are financial protections or other entities from which ED may recover losses associated with BDR claims, or that is open. If the claim relates to loans made to attend a school that has closed and for which there is no financial protections or entities against ED may recover, a hearing official considers any evidence and arguments presented by ED on behalf of the group, along with any additional information such as ED records or responses from the school that the ED official considers necessary. After the fact-finding process, the ED official issues a written decision on the claim. As with the individual claims process, if the group claim is approved in full or in part, ED notifies the borrowers of the relief provided. If the claim is denied in full or in part, ED notifies the borrowers of the reason for the denial, along with other relevant information. The decision made by the ED official is \"final as to the merits of the group borrower defense and any relief that may be granted on the group claim.\" However, if relief for the group has been denied in full or in part, an individual borrower may file a claim for individual relief as previously described. In addition, ED may reopen a BDR application at any time to consider evidence that was not considered in the previous decision.", "Group BDR procedures for a claim that relates to loans made to attend a closed school for which there are financial protections or entities from which ED may recover losses or to loans made to attend an open school are substantially similar to those procedures for group BDR claims for closed schools without financial protections described above. However, in addition to the above-described procedures, the IHE against which the claim is brought is given the opportunity to present evidence and arguments during the fact-finding process. In addition, the school or the ED official who presented the group's BDR claims may appeal the decision of the hearing official within 30 days after the decision is issued and received by the school and the ED official. Should an appeal be made, the hearing official's decision does not take effect pending the appeal. The Secretary issues a final decision on the appealed claim. If relief for the group has been denied in full or in part, and after a final decision has been made (either following an appeal by the school or the ED official or after 30 days from the hearing official's decision have passed), an individual borrower may file a claim for individual relief as previously described. Additionally, ED may reopen a BDR application at any time to consider evidence that was not considered in the previous decision.", "Finally, to obtain relief a borrower must cooperate with ED in the relevant individual or group BDR proceeding. If a borrower fails to cooperate with ED, the relief may be revoked. ", "Relief Provided", "Regulations specify the relief that may be afforded to a borrower who, as an individual or as part of a group, successfully asserts a BDR. This section of the report focuses on BDR relief available to borrowers with DL program loans, including Direct Consolidation Loans that repaid eligible non-DL program loans. However, it should be noted that borrowers of FFEL program loans that have not been consolidated into Direct Consolidation Loans are eligible to have all or part of their loan discharged, and may be eligible to be reimbursed for payments previously paid toward or collected on the loans if certain conditions are met. Borrowers of Perkins Loans are ineligible for BDR relief unless they first consolidate their loans into a Direct Consolidation Loan.", "For Direct Loans, if a borrower defense is approved, ED (either the ED official in an individual BDR claim or the hearing official in the group BDR claim) determines the appropriate amount of relief to award the borrower. Relief provided can include a discharge of all or part of the loan amounts owed to ED on the loan at issue. A borrower may also be eligible to have all or part of amounts previously paid toward or collected on his or her loan reimbursed by ED. Payments made or collections on Direct Loans, including Direct Consolidation Loans that repaid eligible non-DL program loans, are reimbursable by ED if the borrower asserted the BDR claim within the applicable statute of limitations and the payments were made directly to ED. Reimbursements are to equal the amount by which the payments or collections on the loans (or portion of the loan in the case of Direct Consolidation Loans to which a BDR claim applied to some, but not all, of the underlying loans) exceed the amount of the loan that was not discharged.", "To calculate the amount of relief to be provided, ED takes into account a variety of factors, depending on the basis on which the BDR claim was brought.", "Substantial m isrepresentation : ED is to factor the borrower's cost of attendance to attend the IHE, the value of the education the borrower received, the value of the education that a reasonable borrower in the borrower's circumstances would have received, the value of the education the borrower should have expected given the information provided to the borrower by the school, and/or any other relevant factors. Court judgment against the IHE : If the judgment provides specific financial relief, ED will provide the unsatisfied amount of relief. If the judgment does not provide specific financial relief, ED \"will rely on the holding of the case and applicable law to monetize the judgment.\" Breach of contract by the IHE : ED is to determine relief \"based on the common law of contracts\" and other reasonable considerations.", "In addition to monetary relief, other relief, as appropriate, may be provided to a borrower. Such relief may include, but is not limited to, determining that the borrower is not in default on his or her loan and is eligible to receive additional Title IV assistance and updating reports to consumer reporting agencies so that they may delete any adverse credit history associated with the loan."], "subsections": []}, {"section_title": "Teacher Education Assistance for College and Higher Education Grants (TEACH Grants)", "paragraphs": ["TEACH Grant recipients whose TEACH Grants have converted into a Direct Loan for failure to complete TEACH Grant service requirements may seek relief under either a closed school discharge or a successful BDR. Program regulations specify that for individuals who do not complete the program's teaching service requirements, the TEACH Grant converts into a DL and the individual \"is eligible for all of the benefits of the Direct Loan Program.\" Thus, so long as an individual meets all applicable closed school discharge or BDR criteria, they may be provided relief from repaying a TEACH Grant that has converted into a DL. "], "subsections": []}]}, {"section_title": "Private Education Loans", "paragraphs": ["In some instances, students who attended a closed school may have borrowed private education loans to help finance their postsecondary education at the closed school. Private education loans are nonfederal loans made to a student to help finance the cost of their postsecondary education. Unlike federal student loans, which have statutorily prescribed terms and conditions that are typically uniform in nature, private education loan terms and conditions are primarily governed by market conditions that may vary greatly, depending on a variety of factors such as the lender, the borrower's creditworthiness, and the market. Thus, the extent to which a private education loan borrower may be provided relief from the requirement to repay their loans may largely depend on the individual private education loan's terms and conditions."], "subsections": []}]}, {"section_title": "Relief for Pell Grant Recipients96", "paragraphs": ["Pell Grant recipients who attended an IHE that closed may have some portion of their Pell eligibility restored. All Pell Grant recipients are subject to a cumulative lifetime eligibility cap on Pell Grant aid equal to 12 full-time semesters (or the equivalent). The HEA exempts from a student's lifetime eligibility cap the period of attendance at an IHE at which a student was unable to complete a course of study because the IHE closed. ED uses its information technology systems to adjust Pell eligibility for those students who attended a closed school and were not reported as having \"graduated\" from that school. Following an adjustment, ED notifies students of the adjustment. "], "subsections": []}, {"section_title": "GI Bill Educational Assistance Benefits99", "paragraphs": ["GI Bill entitlement may be restored following a school closure. However, a school closure may result in some GI Bill participants receiving an overpayment of benefits that they would become responsible for repaying."], "subsections": [{"section_title": "Restoration of Entitlements", "paragraphs": ["Prior to 2015, GI Bill entitlement was not restored for benefits received at an educational institution that later closed.", "The Harry W. Colmery Veterans Educational Assistance Act of 2017 ( P.L. 115-48 ) authorizes the restoration of GI Bill entitlement for individuals affected by school closures. Generally, GI Bill recipients are entitled to benefits equal to 36 months of full-time enrollment (or the equivalent for part-time educational assistance) under one GI Bill. In the case of the Survivors' and Dependents' Educational Assistance Program (DEA; 38 U.S.C., Chapter 35), recipients who first enrolled in a program of education before August 1, 2018, have 45 months (or the equivalent for part-time educational assistance) of entitlement. Entitlement is restored for an incomplete course or program for which the individual is unable to receive credit or lost training time as a result of an educational institution closing. P.L. 115-48 applies to school closures occurring after January 1, 2015. ", "In addition to restoring such entitlement, P.L. 115-48 permits the VA to continue paying a Post-9/11 GI Bill housing allowance through the end of the academic term following such closure but no longer than 120 days. Entitlement is not charged for the interim housing allowance. The extension of benefits following such closure is only applicable to the Post-9/11 GI Bill.", "Finally, P.L. 115-48 requires that the Department of Veterans Affairs (VA) notify affected individuals of imminent and actual school closures and notify them how such closure will affect their GI Bill entitlement. GI Bill participants must apply for benefit restoration and the housing allowance extension."], "subsections": []}, {"section_title": "Overpayment of Benefits", "paragraphs": ["Under general GI Bill regulations, if there are mitigating circumstances, a GI Bill participant who withdraws from all courses may remain eligible for benefits for the portion of the course completed. However, if there are no mitigating circumstances, the individual may be required to repay all benefits received for pursuit of the course. Mitigating circumstances are circumstances beyond the individual's control that prevent the individual from continuously pursuing a program of education. A school closing is considered to be a mitigating circumstance.", "Some GI Bill benefits, such as advance payments and the Post-9/11 GI Bill tuition and fees payment, Yellow Ribbon payment, and books and supplies stipend, may be paid as a lump sum before or at the beginning of an academic term. An overpayment may occur for a prorated portion of those upfront payments if an individual is unable to complete the academic term without mitigating circumstances.", "Under Post-9/11 GI Bill regulations, the VA may determine the ending date of educational assistance based on the facts found if an eligible individual's educational assistance must be discontinued for any reason not described in regulations. A school that permanently closes may qualify as a reason not described in regulations."], "subsections": []}]}, {"section_title": "Additional Student Aid Eligibility", "paragraphs": ["For students who wish to continue their education at another IHE, another financial consideration related to an IHE's closure is the extent to which the students' eligibility for various financial aid sources may be affected by their previous use of those benefits at the closed institution. In addition to the duration of eligibility limits generally placed on Pell Grants and GI educational benefits discussed in the previous section, other federal student aid eligibility criteria that could affect future receipt of additional Title IV student loans include borrowing limits and eligibility limitations for receipt of Direct Subsidized Loans."], "subsections": [{"section_title": "Loan Limits", "paragraphs": ["Generally, annual and aggregate borrowing limits apply to Title IV student loans. Annual loan limits prescribe the maximum principal amount that may be borrowed in an academic year, and aggregate limits apply to the total amount of outstanding Title IV loans that borrowers may accrue. Borrowing limits for DL program loans vary by borrower academic standing (e.g., grade or credential level), loan type (e.g., Subsidized or Unsubsidized Direct Loan), and dependency status. For borrowers who receive a closed school discharge or whose loans have been discharged under a successful BDR claim, any discharged loans do not count against their annual and aggregate loan limits. \u00a0"], "subsections": []}, {"section_title": "Eligibility for Direct Subsidized Loans", "paragraphs": ["In general, for borrowers of Direct Subsidized Loans, the federal government pays the interest that accrues on the loan while the borrower is enrolled in school on at least a half-time basis, during a six-month grace period thereafter, and during periods of authorized deferment. Individuals who are new borrowers on or after July 1, 2013, may only receive Direct Subsidized Loans for a period of time equal to 150% of the published length of the borrower's academic program (e.g., a borrower enrolled in a four-year degree program may receive six years' worth of Direct Subsidized Loans). However, for borrowers who receive a closed school loan discharge or who successfully assert a BDR claim, the discharged loan will not count against the borrower's Subsidized Loan usage period."], "subsections": []}]}, {"section_title": "State Tuition Recovery Funds (STRF)", "paragraphs": ["In addition to available debt relief, some states operate state tuition recovery funds (STRFs), which may reimburse students for charges paid to closed IHEs that are not covered by other sources. For example, a student may have his or her Direct Loan discharged due to school closure, and an STRF may provide relief to cover expenses such as cash payments made directly to a closed IHE for tuition payments or to provide relief on private student loans borrowed to attend an IHE. The availability of and eligibility for such funds vary by state; not all states operate STRFs."], "subsections": []}, {"section_title": "Income Tax Consequences113", "paragraphs": ["Borrowers whose student loans are discharged due to school closure will be subject to federal and state income taxes on the discharged loans unless they qualify for an exception. Students who received funds from an STRF might similarly be subject to tax on any funds received, although the tax treatment of such funds is unclear. Additionally, there could be tax consequences for individuals who had previously claimed certain federal education tax benefits. This section examines the potential federal and state tax consequences that may arise for these borrowers and students."], "subsections": [{"section_title": "Federal Tax Treatment of Cancelled Debt", "paragraphs": ["Under the Internal Revenue Code (IRC), borrowers whose debt is forgiven must generally include the amount of the canceled debt in income when determining their federal income tax liability. In other words, they are subject to tax on the amount of the discharged loan. There are, however, various exceptions to this rule under which a borrower may exclude from income all or part of the forgiven debt.", "The HEA contains several exceptions providing for certain student loan discharges. These exceptions apply to borrowers of FFELs, Direct Loans, and Perkins Loans who borrowed such loans to attend any IHE and whose loans are discharged due to school closure. Under the HEA exceptions, these borrowers will not be subject to federal income taxes on the discharged amounts so long as the student borrowers (or students on whose behalf a parent borrowed) meet the general criteria regarding the discharge of debt tied to closed schools described earlier in this report.", "The HEA does not address the tax treatment of (1) federal student loans discharged due to a successful borrower defense to repayment or (2) private education loans that are discharged under most circumstances. As such, in these cases, the borrowers will be taxed on the amount of the discharged loan unless they qualify for an exception found outside of the HEA. Federal tax law provides several exceptions that may be relevant to borrowers whose loans are discharged. For example, IRC Section 108 excludes forgiven debt if the taxpayer is insolvent. Thus, borrowers whose liabilities exceed the fair market value of their assets immediately prior to discharge will not be taxed on the discharged student loan. Another example of an exception that might be relevant is the disputed debt doctrine. Under this doctrine, a discharged loan is not considered income for federal tax purposes if the loan was based on fraud or misrepresentation by the lender. Guidance issued by the Internal Revenue Service (IRS) in 2015 and 2017 illustrates how the doctrine might be applied in the student loan context. The 2015 guidance provides that former students of Corinthian Colleges, Inc. (CCI) whose federal student loans are discharged under a defense against repayment claim will not be taxed on the discharged amounts because many would likely qualify under the disputed debt doctrine due to the school's fraudulent behavior. In 2017, the IRS extended this same relief to former students of schools owned by American Career Institutes, Inc. (ACI). In addition, in 2018 the IRS issued guidance explaining that it would provide similar tax treatment regarding the discharge of private student loans taken out by borrowers who attended schools owned by CCI or ACI, where the loans are discharged due to legal settlements of cases brought by federal and state governmental agencies alleging that CCI, ACI, and certain private lenders engaged in unlawful business practices.", "In order to exclude a discharged loan from income, borrowers must determine that they qualify for an exception based on their individual circumstances and be able to show that the determination is correct if the IRS contests it. If the IRS disagrees and assesses tax based on the amount of the discharged loan, the taxpayer may challenge the assessment in federal court."], "subsections": []}, {"section_title": "Federal Tax Treatment of State Tuition Recovery Funds", "paragraphs": ["Students who receive funds from STRFs might also face federal tax consequences, although the tax treatment is less clear. As a general rule, any amount received by a taxpayer is includible in gross income, and potentially subject to taxation, unless specifically excluded by law. It is not clear how this principle applies in the context of STRF payments, as there do not appear to be court decisions or IRS guidance addressing the issue. There are several theories under which students could arguably exclude the payments from income, depending on their circumstances and the specifics of the state's plan. For example, the payment might be treated as a nontaxable reimbursement of tuition, scholarship, or state benefit. If the payment is excluded from the student's income, the student may be required to account for previously claimed federal education tax benefits, as discussed below."], "subsections": []}, {"section_title": "Federal Higher Education Tax Benefits", "paragraphs": ["Along with the potential taxation of discharged student loans and amounts received from STRFs, a school's closure or the discharge of a borrower's student loan may have consequences related to higher education tax benefits. While there are a variety of federal tax benefits that help offset some of the costs of a higher education, four are relevant for purposes of this report for reasons discussed below. These four benefits include the following:", "The student loan interest deduction , under which qualifying taxpayers may annually deduct up to $2,500 of student loan interest for the entire duration of repayment. The tuition and fees deduction , which allows taxpayers to reduce their income subject to tax for tuition and fees paid annually, up to $4,000, depending on their income level. As of the date of this report, the tuition and fees deduction cannot be claimed on 2018 or subsequent tax returns. The Lifetime Learning Credit (LLC) , under which qualifying taxpayers may annually reduce their tax liability for tuition and fees paid, up to $2,000. The LLC is a nonrefundable credit, meaning any amount of the credit in excess of income tax liability is effectively forfeited by the taxpayer. The American Opportunity Tax Credit (AOTC) , under which qualifying taxpayers can reduce tax liability by $2,500 per student annually (depending on eligible expenses and the taxpayer income level). The AOTC can be claimed for tuition and fees and books, supplies, and equipment, but not room and board. Additionally, the AOTC is a refundable credit, which means taxpayers with little to no tax liability can receive up to $1,000 of the AOTC as a refund check.", "Tuition and fees paid with the proceeds of a loan can count toward claiming these tax benefits, but any aid that is tax-free, such as a Pell Grant, must generally reduce the amount of expenses against which the benefits may be claimed. As a general rule, either the parent or the student who pays the qualifying education expenses will claim the tax benefit, depending on whether the student is the parent's dependent for tax purposes. Taxpayers can generally only claim one tax benefit per student annually. "], "subsections": [{"section_title": "Availability of Benefits for Students Whose School Has Closed", "paragraphs": ["Students who continue to pursue higher education after a school closure are eligible for these education tax benefits, pursuant to the requirements applicable to all taxpayers. However, in some instances, a taxpayer who claims the AOTC may be ineligible for the credit in future years due to statutory restrictions on the period of education for which students may claim the credit. Specifically, the AOTC can only be claimed for expenses incurred during the first four years of a postsecondary education, irrespective of whether those first four years lead to a postsecondary credential. Therefore, for example, it appears that if a student attended a school for three years and that school closed, the maximum remaining time the student could claim the AOTC is one additional year. There is seemingly no IRS guidance or case law addressing how this requirement is applied in the context of students whose schools have closed, including students who may have to pay back previously claimed credits (discussed below).", "The other three benefits contain no limits on the period of education in which students may claim them."], "subsections": []}, {"section_title": "Federal Tax Treatment of Previously Claimed Education Tax Benefits", "paragraphs": ["Taxpayers may be required to account for previously claimed education tax benefits if they subsequently qualify to exclude discharged student loans or STRF payments. The borrowers who might be affected are those who", "claimed the LLC or AOTC for expenses that were paid with the proceeds from a student loan that was subsequently discharged, deducted expenses for tuition and fees that were paid with the proceeds from a student loan that was subsequently discharged, deducted interest on a student loan that was subsequently discharged, or claimed a tax credit (i.e., the LLC or AOTC) or a deduction (for tuition and fees or student loan interest) for expenses that were reimbursed by an STRF payment. ", "In order to prevent these borrowers from getting the double benefit of both (1) a credit or deduction and (2) the exclusion of the discharged loan or STRF payment, such borrowers may be required to pay back the value of the credit or deduction. However, there may be circumstances in which the IRS will not require a taxpayer to account for previously claimed tax benefits. For example, in its 2015, 2017, and 2018 guidance addressing former students of CCI and ACI, the IRS announced that it would not require these borrowers to account for previously claimed education tax benefits. The IRS did not explain its reasoning in reaching this determination, and it is not clear the extent to which the agency may provide similar benefits to other borrowers. "], "subsections": []}]}, {"section_title": "State Income Tax Consequences", "paragraphs": ["A school closure or the discharge of a student loan may also result in state income tax consequences. Most states use the IRC's definition of income as the starting point for computing state income tax liability. As such, to the extent that the borrower must pay federal income tax on the discharged debt or account for previously claimed federal education tax benefits, he or she may be taxed at the state level as well. Similarly, to the extent that the borrower qualifies to exclude the amounts from federal income taxation, such treatment may also apply at the state level. However, while most state tax codes follow the IRC, states are not required to adopt the federal definition of income and, thus, some states may provide for different tax treatment. Furthermore, states with their own education tax benefits or tuition recovery funds may have laws or policies specifically addressing the state tax treatment of the benefits and funds."], "subsections": [{"section_title": "Appendix. List of Abbreviations", "paragraphs": ["The following are abbreviations used throughout this report."], "subsections": []}]}]}]}]}}
{"id": "R41326", "title": "Federal Mandatory Minimum Sentences: The Safety Valve and Substantial Assistance Exceptions", "released_date": "2019-02-22T00:00:00", "summary": ["Federal law requires a sentencing judge to impose a minimum sentence of imprisonment following conviction for any of a number of federal offenses. Congress has created three exceptions. Two are available in any case where the prosecutor asserts that the defendant has provided substantial assistance in the criminal investigation or prosecution of another. The other, commonly referred to as the safety valve, is available, without the government's approval, for a handful of the more commonly prosecuted drug trafficking and unlawful possession offenses that carry minimum sentences.", "Qualification for the substantial assistance exceptions is ordinarily only possible upon the motion of the government. In rare cases, the court may compel the government to file such a motion when the defendant can establish that the refusal to do so was based on constitutionally invalid considerations, or was in derogation of a plea bargain obligation or was the product of bad faith.", "Qualification for the safety valve exception requires a defendant to satisfy five criteria. His past criminal record must be minimal; he must not have been a leader, organizer, or supervisor in the commission of the offense; he must not have used violence in the commission of the offense, and the offense must not have resulted in serious injury; and prior to sentencing, he must tell the government all that he knows of the offense and any related misconduct.", "In response to a congressional request, the U.S. Sentencing Commission recommended expansion of the safety valve. The First Step Act, P.L. 115-391, broadened the safety valve for the benefit of (1) defendants with slightly more serious criminal records and (2) defendants convicted under the Maritime Drug Enforcement Act."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Federal law houses hundreds of offenses punishable by a mandatory minimum term of imprisonment. Although only a handful of these mandatory minimum offenses are prosecuted with any regularity, drug trafficking offenses accounted for over two-thirds of the total. Congress has created three procedures that make punishment for these offenses a little less mandatory. One, the so-called safety valve (18 U.S.C. \u00a7 3553(f)), permits a sentencing court to disregard a statutory minimum sentence for the benefit of a low-level, nonviolent, cooperative defendant with a minimal prior criminal record, convicted under several mandatory minimum controlled substance offenses. The other two, 18 U.S.C. \u00a7 3553(e) and Rule 35(b) of the Federal Rules of Criminal Procedure, afford a sentencing court comparable latitude but only on the motion of the prosecutor, based on the defendant's substantial assistance to the government, and without regard to the offense charged.", "In October 2009, Congress instructed the U.S. Sentencing Commission to prepare a report on the mandatory minimum sentencing provisions under federal law. In early 2010, the commission conducted a survey of federal district court judges regarding their views on mandatory minimum sentencing. A majority of those responding endorsed amendments to the safety valve and substantial assistance exceptions. The commission also held a public hearing at which several witnesses urged adjustments in the safety valve and substantial assistance provisions. The commission subsequently recommended that Congress consider expanding the safety valve to cover other offenses and to reach offenders with a slightly more extensive prior criminal record.", "The First Step Act authorized safety-valve relief for convictions under the Maritime Drug Enforcement Act and for defendants with slightly more extensive prior criminal records. "], "subsections": []}, {"section_title": "Safety Valve", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["Low-level drug offenders can escape some of the otherwise applicable mandatory minimum sentences if they qualify for the safety valve. Congress created the safety valve after it became concerned that the mandatory minimum sentencing provisions could have resulted in equally severe penalties for both the more and the less culpable offenders. It is available to qualified offenders convicted of violations of the drug trafficking, simple possession, attempt, or conspiracy provisions of the Controlled Substances or Controlled Substances Import and Export acts. ", "It is not available to avoid the mandatory minimum sentences that attend some of the other controlled substance offenses, even those closely related to the covered offenses. For instance, not covered are convictions under the statute that proscribes drug trafficking near schools, playgrounds, or public housing facilities and that sets the penalties for violation at twice those set for simple drug trafficking. In addition, until the First Step Act, safety valve relief was not available to those convicted under the Maritime Drug Law Enforcement Act (MDLEA), even though the MDLEA proscribes conduct closely related to the smuggling and trafficking activities outlawed in the Controlled Substances Import and Export Act. ", "The prosecution need not prove that a defendant is ineligible for safety valve relief. The Supreme Court did hold in Alleyne v. United States \"that any fact that increases the mandatory minimum is an 'element' [of the offense] that must be submitted to the jury\" and proved beyond a reasonable doubt. Subsequent lower appellate courts, however, have held that Alleyne does not require a jury verdict or application of the reasonable doubt standard. Thus, for the convictions to which the safety valve applies, the defendant must convince the sentencing court by a preponderance of the evidence that he satisfies each of the safety valve's five requirements. He may not have a disqualifying criminal history point total. He may not have used violence or a dangerous weapon in connection with the offense. He may not have been an organizer or leader of the drug enterprise. He must have provided the government with all the information and evidence at his disposal. Finally, the offense may not have resulted in serious injury or death. "], "subsections": [{"section_title": "Disqualifying Criminal History Point Total", "paragraphs": ["[T]he defendant does not have \u2013", "(A) more than 4 criminal history points, excluding any criminal history points resulting from a 1-point offense, as determined under the sentencing guidelines;", "(B) a prior 3-point offense, as determined under the sentencing guidelines; and", "(C) a prior 2-point violent offense, as determined under the sentencing guidelines. 18 U.S.C. \u00a7 3553(f)(1).", "The criminal history point disqualification refers to the defendant's prior criminal record. The Sentencing Guidelines assign criminal history points based on a defendant's past criminal record. Prior sentences of imprisonment or juvenile detention of less than 60 days are assigned a single criminal history point . ", "Prior sentences of imprisonment or juvenile detention of from 60 days up to a year and a month are assigned two criminal history points ; as are sentences imposed for offenses committed while the defendant was in prison, was an escaped prisoner, or was on probation, parole, or supervised release.", "Prior sentences of imprisonment for a year and a month or more are assigned three criminal history points . ", "A number of convictions do not count, including the following:", "Stale convictions 15-year-old, three-point convictions, 10-year-old, one- or two-point convictions, or 5-year-old, one- or two-point juvenile adjudications; Summary court-martial convictions; Foreign convictions; Tribal convictions; Expunged, reversed, vacated, or invalidated convictions; and Certain petty offenses or minor misdemeanors: Hunting and fishing violations, juvenile truancy, and the like, regardless of the sentence imposed. Gambling, prostitution, and the like if the offender was sentenced no more severely than to imprisonment for 30 days or less or to probation for less than a year. Similar offenses to those listed \"by whatever name they are known.\""], "subsections": []}, {"section_title": "Only the Nonviolent", "paragraphs": ["[T]he defendant did not use violence or credible threats of violence or possess a firearm or other dangerous weapon (or induce another participant to do so) in connection with the offense, 18 U.SC. 3553(f)(2).", "[T]he offense did not result in death or serious bodily injury to any person, 18 U.S.C. \u00a7 3553(f)(3).", "The safety valve has two disqualifications designed to reserve its benefits to the nonviolent. The weapon or threat-of-violence disqualification turns upon the defendant's conduct or the conduct of those he \"aided or abetted, counseled, commanded, induced, procured, or willfully caused.\" It is not triggered by the conduct of a co-conspirator, unless the defendant aided, abetted, or counselled the co-conspirator's violence or possession. Disqualifying firearm possession may be either actual or constructive. Constructive possession is the dominion or control over a firearm or the place where one is located. Disqualification requires the threat of violence or possession of a firearm \"in connection with the offense,\" sometimes characterized as \"active possession.\" In many instances, possession of a firearm in a location where drugs are stored or transported, or where transactions occur, will be enough to support an inference of possession in connection with the drug offense of conviction. \"[E]ven a single intimidating confrontation [is] enough to constitute a credible threat\" and is consequently safety valve disqualifying. Conversely, a sentencing enhancement for a co-conspirator's possession does not automatically preclude qualification. ", "The Sentencing Guidelines define \"serious bodily injury\" for purposes of Section 3553(f)(3) as an \"injury involving extreme physical pain or the protracted impairment of a function of a bodily member, organ, or mental faculty; or requiring medical intervention such as surgery, hospitalization, or physical rehabilitation.\" On its face, the definition would include serious bodily injuries, such as hospitalization, suffered by the defendant as a result of the offense. ", "Moreover, a defendant is more likely to be disqualified under Section 3553(f)(3) if a fellow conspirator seriously injures a victim than would be the case under Section 3553(f)(2) if the conspirator merely carries a firearm."], "subsections": []}, {"section_title": "Only Single or Low-Level Offenders", "paragraphs": ["[T]he defendant was not an organizer, leader, manager, or supervisor of others in the offense, as determined under the sentencing guidelines and was not engaged in a continuing criminal enterprise, as defined in Section 408 of the Controlled Substances Act, 18 U.S.C. \u00a7 3553(f)(4)(emphasis added). ", "The defendant must also establish that he or she was not \"an organizer, leader, manager, or supervisor of others in the offense.\" The term supervisor is construed broadly and encompasses anyone who exercises control or authority of another during the commission of the offense. The Sentencing Guidelines disqualify anyone who receives a guideline level increase for their aggravated role in the offense. Thus, by implication, it does not require a defendant to have received a guideline increase based on his minimal or minor participation in a group offense, nor does it disqualify a defendant who acted alone."], "subsections": []}, {"section_title": "Tell All", "paragraphs": ["[N]ot later than the time of the sentencing hearing, the defendant has truthfully provided to the Government all information and evidence the defendant has concerning the offense or offenses that were part of the same course of conduct or of a common scheme or plan, but the fact that the defendant has no relevant or useful other information to provide or that the Government is already aware of the information shall not preclude a determination by the court that the defendant has complied with this requirement, 18 U.S.C. \u00a7 3553(f)(5).", "At one time the most heavily contested safety valve prerequisite, Section 3553(f)(5) requires full disclosure on the part of the defendant. As in the case of the other prerequisites, the defendant here bears the burden of establishing his qualification for safety valve relief. The requirement extends not only to information concerning the crime of conviction, but also to information concerning other crimes that \"were part of the same course of conduct or of a common scheme or plan,\" including uncharged related conduct. ", "Neither Section 3553(f) nor the Sentencing Guidelines explain what form the defendants' full disclosure must take. At least one court has held that under rare circumstances disclosure through the defendant's testimony at trial may suffice. Most often the defendant provides the information during an interview with prosecutors or by a proffer. The defendant must disclose the information to the prosecutor, however. Disclosure to the probation officer during preparation of the presentence report is not sufficient. Moreover, a defendant does not necessarily qualify for relief merely because he has proffered a statement and invited the prosecution to identify any additional information it seeks; for \"the government is under no obligation to solicit information from a defendant.\" The defendant must provide the government with all the relevant information in his possession. And, he must do so \"no later than the time of the sentencing hearing.\" Information offered after the sentencing hearing does not qualify, although information offered following appellate remand for resentencing and prior to the resentencing hearing may qualify. On the other hand, past lies do not render a defendant ineligible for relief under the truthful disclosure criterion of the safety valve, although they may undermine his credibility. "], "subsections": []}]}]}, {"section_title": "Substantial Assistance", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["Three provisions authorize federal courts to reduce a defendant's sentence on the motion of the government for substantial assistance: Rule 35(b) of the Federal Rules of Criminal Procedure, 18 U.S.C. \u00a7 3553(e), and Section 5K1.1 of the U.S. Sentencing Guidelines. Only Section 3553(e) and Rule 35(b) authorize sentences below otherwise applicable mandatory minimums. Unlike the safety valve, neither Section 3553(e) nor Rule 35(b) is limited to mandatory minimums established for controlled substance offenses."], "subsections": [{"section_title": "18 U.S.C. \u00a7 3553(e)", "paragraphs": ["The substantial assistance provision, 18 U.S.C. \u00a7 3553(e), passed with little fanfare in the twilight of the 99 th Congress as part of the massive Anti-Drug Abuse Act of 1986, legislation that established or increased a number of mandatory minimum sentencing provisions. The section continues in its original form virtually unchanged:", "(e) Limited Authority To Impose a Sentence Below a Statutory Minimum. - Upon motion of the Government, the court shall have the authority to impose a sentence below a level established by statute as a minimum sentence so as to reflect a defendant's substantial assistance in the investigation or prosecution of another person who has committed an offense. Such sentence shall be imposed in accordance with the guidelines and policy statements issued by the Sentencing Commission pursuant to section 994 of title 28, United States Code.", "The section passed between the date authorizing creation of the Sentencing Guidelines and the date they became effective. Rather than replicate the language of Section 3553(e), the guidelines contain an overlapping section that authorizes a sentencing court to depart from the minimum sentence called for by the guidelines."], "subsections": [{"section_title": "\"Upon the Motion of the Government\"", "paragraphs": ["As a general rule, a defendant is entitled to a sentence below an otherwise applicable statutory minimum under the provisions of Section 3553(e) only if the government and the court agree. The courts have acknowledged that due process or equal protection or other constitutional guarantees may provide a narrow exception. \"Thus, a defendant would be entitled to relief if a prosecutor refused to file a substantial-assistance motion, say, because of the defendant's race or religion.\" A defendant is entitled to relief if the government's refusal constitutes a breach of its plea agreement. A defendant is also \"entitled to relief if the prosecutor's refusal to move was not rationally related to any legitimate Government end.\" Some courts have suggested that a defendant is entitled to relief if the prosecution refuses to move under circumstances that \"shock the conscience of the court,\" or that demonstrate bad faith, or for reasons unrelated to substantial assistance. A majority of the judges who answered the Sentencing Commission's survey agreed that relief under Section 3553(e) should be available even in the absence of motion from the prosecutor. ", "Despite their similarities, Section 3553(e) and U.S.S.G. Section 5K1.1 are not the same. A motion under Section 3553(e) authorizes a sentence beneath the mandatory minimum, and a motion under U.S.S.G. Section 5K1.1 authorizes a sentence beneath the applicable Sentencing Guideline range. Thus, a motion under Section 5K1.1 will ordinarily not be construed as a motion under Section 3553(e), in order to permit a court sentence below an otherwise applicable mandatory minimum sentencing requirement."], "subsections": []}, {"section_title": "\"To Reflect a Defendant's Substantial Assistance\"", "paragraphs": ["Any sentence imposed below the statutory minimum by virtue of Section 3553(e) must be based on the extent of the defendant's assistance; it may not reflect considerations unrelated to such assistance. It has been suggested, however, that a court may use the Section 5K1.1 factors for that determination, that is, \"(1) the court's evaluation of the significance and usefulness of the defendant's assistance, taking into consideration the government's evaluation of the assistance rendered; (2) the truthfulness, completeness, and reliability of any information or testimony provided by the defendant; (3) the nature and extent of the defendant's assistance; (4) any injury suffered, or any danger or risk of injury to the defendant or his family resulting from his assistance; [and] (5) the timeliness of the defendant's assistance.\" ", "The substantial assistance exception makes possible convictions that might otherwise be unattainable. Yet, it may also lead to \"inverted sentencing,\" that is, a situation in which \"the more serious the defendant's crimes, the lower the sentence\u2014because the greater his wrongs, the more information and assistance he had to offer to a prosecutor\"; while in contrast the exception is of no avail to the peripheral offender who can provide no substantial assistance. Perhaps for this reason, most of the judges who responded to the Sentencing Commission survey agreed that a sentencing court should not be limited to assistance-related factors and should be allowed to use the generally permissible sentencing factors when calculating a sentence under Section 3553(e)."], "subsections": []}]}, {"section_title": "Rule 35(b)", "paragraphs": ["In the before-and-after sentencing tale of avoiding a statutory mandatory minimum for substantial assistance, Rule 35(b) is the after. It is available only after sentencing. If the defendant's sentence is vacated on appeal, a Section 3553(e) motion rather than a Rule 35(b) motion is the appropriate vehicle for relief during resentencing. The rule features a two-pronged postsentence authorization for sentence reduction at the behest of the government. First, the government may always file a motion for sentence reduction including reduction below an otherwise applicable mandatory minimum if it does so within a year of sentencing. Second, the government may file a comparable motion a year after sentencing, but only under narrow circumstances that excuse the failure to make a more timely motion. Here, too, a motion by the government is a prerequisite to relief, and the government's decision to refuse to move can be overcome only where the government's silence is unconstitutionally grounded or based on some rationale not reasonably related to a legitimate government end. ", "A district court, faced with a Rule 35(b) motion, must determine whether the defendant in fact rendered substantial assistance and if so what level of reduction, if any, is warranted. As part of its assessment, the court may, but is not required to, consider the general sentencing factors found in 18 U.S.C. \u00a7 3553(a). There is some authority for the proposition that the defendant has no right to notice and hearing following the submission of a Rule 35(b) motion.", "Moreover, Rule 35(b) does not authorize a court to reduce the amount of restitution previously ordered."], "subsections": []}]}]}]}}
{"id": "R45581", "title": "District of Columbia Opportunity Scholarship Program (DC OSP): Overview, Implementation, and Issues", "released_date": "2019-03-07T00:00:00", "summary": ["The District of Columbia Opportunity Scholarship Program (DC OSP) is the only federally funded voucher program for elementary and secondary education. It operates exclusively in the District of Columbia. The Consolidated Appropriations Act, 2004 (P.L. 108-199), which included the FY2004 District of Columbia Appropriations Act, also included the now-repealed DC School Choice Incentive Act of 2003. The DC School Choice Incentive Act initially authorized the DC OSP. Appropriations were authorized for FY2004 through FY2008. The DC OSP provides scholarships to eligible students to attend participating private elementary or secondary schools, and is administered by the U.S. Department of Education (ED).", "The FY2004 appropriations act provided funding for the DC OSP for the first time and also, for the first time, provided funding for District of Columbia Public Schools (DCPS) for the improvement of public education, and funding for the District of Columbia State Education Office for public charter schools. Funding for DCPS and public charter schools was not addressed in the DC School Choice Incentive Act of 2003. However, for every year that Congress has provided funding for the DC OSP, it has also provided funding for the DC public schools and DC public charter schools. The provision of federal funds for the DC OSP, DC public schools, and public charter schools is commonly referred to as the \"three-pronged approach\" to supporting elementary and secondary education in the District of Columbia.", "Reauthorization", "The DC OSP has been reauthorized twice. It was reauthorized by the Scholarships for Opportunity and Results (SOAR) Act (P.L. 112-10) in 2011, which also repealed the DC School Choice Incentive Act of 2003. The SOAR Act authorized appropriations from FY2012 through FY2016 for the DC OSP, DC public schools, and DC public charter schools. The DC OSP was subsequently reauthorized by the SOAR Reauthorization Act (P.L. 115-31), which amended the SOAR Act and extended the authorization of appropriations for the DC OSP, DC public schools, and DC public charter schools through FY2019. Changes to the DC OSP have also been made primarily through appropriations acts in the intervening fiscal years. For FY2019, $52.5 million was appropriated for the SOAR Act, with $17.5 million each provided to the DC OSP, DCPS, and the DC State Education Office.", "Participation", "Based on data available from Serving Our Children, the current local DC OSP administrator, since the program's inception in the 2004-2005 school year, over 21,057 applications have been submitted, and over 8,400 scholarships have been awarded. For the 2017-2018 school year, over 3,900 applications for scholarships were received from new applicants and returning students. Over 1,650 students received and used a scholarship at 44 of 48 participating private schools that school year. While the value of the scholarship has changed over time, for the 2018-2019 school year students may receive up to $8,857 to attend a participating private elementary or middle school and up to $13,287 to attend a participating private high school.", "Evaluation", "The DC OSP has been evaluated by two federal agencies: the Department of Education (ED) and the Government Accountability Office (GAO). The evaluations conducted by these two agencies differed considerably in terms of purpose and scope. ED evaluated the participation of schools, parents, and students in the DC OSP, as well as the effectiveness of the program on student achievement and other outcome measures. GAO evaluated certain accountability mechanisms and whether they were operating as intended, such as the program's use of funds and general adherence to statutory requirements. GAO also evaluated how ED and the District of Columbia fulfilled their roles and responsibilities for the DC OSP. The impact evaluations conducted by ED found mixed results. These evaluations focused on four outcome measures: (1) reading and mathematics achievement, (2) parent and student satisfaction, (3) parent and student perceptions of school safety, and (4) parental involvement. The GAO evaluations revealed issues with the way the DC OSP was being administered by the first two local program administrators, as well as concerns about ED's oversight of the program."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Many of the disputes involving public education and school choice stem from a fundamental question of whether education is a public or private good. While education has historically been considered a public good, it has characteristics of both a public and a private good. That is, the benefits of education are both private, in that they accrue to individuals, and public, in that they promote a stable and democratic society and a prepared workforce. However, the distinction between education as a private good and a public good may be blurred, as others benefit from the work produced by an individual and an individual benefits from living in a stable and democratic society. As some researchers have argued, \"schooling takes place at the intersection of two sets of rights, those of the family and those of the society.\" Parents have the right to raise their children in the manner they deem most suitable, including making decisions about their education, while a democratic society uses education \"as a means to reproduce its most essential political, economic, and social institutions through a common schooling experience.\" ", "There are many forms of school choice and mechanisms used to facilitate choice, including intradistrict and interdistrict public school choice, public charter schools, magnet schools, vouchers, tax credits/deductions, education savings accounts (ESAs), and homeschooling. School choice efforts in some of these areas are supported by federal programs, such as the programs to support public charter schools and magnet schools that are authorized under the Elementary and Secondary Education Act (ESEA). The most controversial issues regarding publicly funded school choice have involved the provision of direct or indirect support to enable students to attend private schools, especially religiously affiliated private schools. Numerous bills related to the public funding of private school choice have been introduced over the past several Congresses, but most proposals have failed to be enacted. An exception to this has been the District of Columbia Opportunity Scholarship Program (DC OSP). The DC OSP provides scholarships (also known as vouchers) to students in the District of Columbia to attend participating private elementary and secondary schools, including religiously affiliated private schools. It is the only federally funded voucher program in the United States. ", "The Consolidated Appropriations Act, 2004 ( P.L. 108-199 ), which combined six appropriations bills\u2014including the FY2004 District of Columbia Appropriations Act\u2014authorized and appropriated funding for the DC OSP. The DC OSP was established under the DC School Choice Incentive Act of 2003, which was included in P.L. 108-199 . Appropriations were initially authorized for FY2004 through FY2008. The program is administered by the U.S. Department of Education (ED).", "The FY2004 appropriations act provided funding for the DC OSP for the first time and also, for the first time, provided funding for District of Columbia Public Schools (DCPS) for the improvement of public education, and funding for the District of Columbia State Education Office (SEO) for public charter schools. This approach, commonly known as the \"three-pronged approach\" to funding elementary and secondary education in the District of Columbia, was initially suggested by Mayor Anthony Williams when he asked for federal assistance for public education in the District of Columbia. The proposal was supported by the George W. Bush Administration and many Members of Congress. While concerns were raised during consideration of the DC School Choice Incentive Act of 2003 that only the DC OSP\u2014not school improvement funding for DCPS or public charter schools\u2014was authorized for five years, the federal government has also provided funds to support school improvement in DC public schools and DC public charter schools for each year that the DC OSP has been funded.", "The DC OSP has been reauthorized twice. It was first reauthorized by the SOAR Act as authorized under Division C of the Department of Defense and Full-Year Continuing Appropriations Act, 2011 ( P.L. 112-10 ). The SOAR Act replaced the DC School Choice Incentive Act of 2003, reauthorized the DC OSP, and authorized appropriations for DC public schools and DC public charter schools for FY2012 through FY2016. The program was subsequently reauthorized by the SOAR Reauthorization Act ( P.L. 115-31 ), which amended the SOAR Act and extended the authorization of appropriations for the DC OSP, DC public schools, and DC public charter schools through FY2019. Many of the provisions included in the SOAR Act continue to be reflected in current law. Changes to the DC OSP have also been made primarily through appropriations acts in the intervening fiscal years. For FY2019, $52.5 million was appropriated for the SOAR Act, with $17.5 million each provided to the DC OSP, DCPS, and the DC State Education Office.", "This report begins with a detailed discussion of the provisions of the SOAR Act, as amended. Subsequent sections of the report discuss appropriations for the DC OSP, DC public schools, and DC public charter schools. This is followed by an examination of student and private school participation in the DC OSP. The next two sections discuss the local program management of the DC OSP and related evaluations conducted by the Government Accountability Office (GAO), as well as the DC OSP impact evaluations that have been conducted by ED. The last section of the report examines the potential costs associated with discontinuing the DC OSP. Several appendices are also included. The first appendix provides information on scholarship use ( Appendix A ). This is followed by appendices that provide information on private school participation in the DC OSP ( Appendix B ) and the impact evaluation reports ( Appendix C ), and a summary of the impact evaluation findings ( Appendix D ). This is followed by a glossary of the acronyms used in this report ( Appendix E ). The final appendix provides the legislative history of the program, beginning with initial enactment through FY2018 appropriations ( Appendix F ).", "While the SOAR Act provides funding for scholarships for students to attend participating private elementary and secondary schools as well as funding for DC public schools and DC public charter schools, the focus of this report is on the DC OSP. Some attention will be given to the current requirements related to the funds provided to DC public schools and DC public charter schools and how much funding has been provided each fiscal year, but no attempt will be made to provide comprehensive information about the use of or requirements related to these funds."], "subsections": []}, {"section_title": "Current Legislative Provisions", "paragraphs": ["This section of the report provides an overview of the SOAR Act, which was most recently comprehensively reauthorized by the SOAR Reauthorization Act. It includes a discussion of the legislative provisions related to the DC OSP as well as requirements related to funding provided for DC public schools and DC public charter schools. An overview of the legislative history of the DC OSP is included in Appendix F ."], "subsections": [{"section_title": "Findings and Purpose of the Program", "paragraphs": ["Section 3002 includes congressional findings related to the SOAR Act that discuss parental school choice, the inadequacy of public school choice in the District of Columbia, student performance on the National Assessment of Educational Progress (NAEP) and per-pupil expenditures in the District of Columbia, the DC School Choice Incentive Act, interest in the DC OSP and evaluation findings, and congressional commitment to continuing the DC OSP as part of a three-pronged funding strategy that also includes DC public schools and DC public charter schools.", "Section 3003 includes the stated purpose of the SOAR Act. The purpose of the program is to provide low-income parents residing in DC, particularly those with a child attending an elementary or secondary school that has been identified as one of the lowest-performing schools under DC's accountability system, with \"expanded options\" for enrolling their child in other DC schools. The program is intended to continue to operate until public schools in DC \"have adequately addressed shortfalls in health, safety, and security,\" and DC students are testing at or above the national average in reading and mathematics.", "For the purposes of the DC OSP, an \"eligible student\" is a student who is a DC resident and comes from a household that is receiving assistance under the Supplemental Nutrition Assistance Program (SNAP) or whose income does not exceed either (1) 185% of the poverty line, or (2) for a household with a child participating in the DC OSP in the preceding year or under the DC School Choice Incentive Act while it was still in effect, 300% of the poverty line. The DC OSP also uses the term \"participating eligible student.\" This refers to an eligible student who was awarded a scholarship regardless of whether the student uses the scholarship to attend a participating private school. "], "subsections": []}, {"section_title": "Entities Eligible to Administer DC OSP at the Local Level", "paragraphs": ["The Secretary of Education (hereinafter referred to as the Secretary) is required to award a competitive grant to one or more eligible entities with approved applications to implement a program to provide eligible students with expanded school choice options. For the purposes of the DC OSP, an \"eligible entity\" is defined as a nonprofit organization or consortium of nonprofit organizations. The Secretary may award one grant or multiple grants based on the quality of the applications submitted and the DC OSP's priorities. Grants may be awarded for no more than five years. Since the inception of the DC OSP, the Secretary has only awarded a grant to one eligible entity at a time. For the purposes of this report, the eligible entity is also referred to as the local program administrator.", "In implementing the DC OSP, the Secretary is prohibited from limiting the number of eligible students receiving scholarships and may not prevent an otherwise eligible student from participating in the program based on any of the following three criteria:", "1. The type of school the student previously attended (e.g., a student already enrolled in a private school is eligible to apply for a scholarship). 2. Whether or not a student has previously received a scholarship or participated in the DC OSP, regardless of the number of years since the student was awarded a scholarship or participated in the DC OSP. 3. Whether or not the student was a member of the control group used by the Institute of Education Sciences (IES) to carry out previous DC OSP evaluations.", "To receive a grant, an eligible entity is required to submit an application that includes a detailed description of how the entity will do the following:", "address the program priorities (see subsequent discussion); ensure that a random selection process, which gives weight to the priorities discussed below, will be used if more eligible students apply for a scholarship than can be accommodated in the DC OSP; ensure that if more participating eligible students seek enrollment at a participating private school than the school can accommodate, the school will use a random selection process to select participating eligible students; notify parents of eligible students about the availability of expanded choice opportunities to enable parents to make informed decisions; carry out activities to provide parents of eligible students with expanded choice options by awarding scholarships; determine the amount that will be provided to parents for the payment of tuition, fees, and transportation expenses, if applicable; seek out private elementary and secondary schools in DC to participate in the program; ensure that each participating private school will meet the reporting and other program requirements; ensure that each participating private school will submit to site visits by the eligible entities as determined necessary by the eligible entity; ensure that participating schools are financially responsible and will use the funds received effectively; ensure the financial viability of participating private schools in which 85% or more of all students enrolled in the school are participating eligible students that use a scholarship; address the renewal of scholarships for participating eligible students, including continued eligibility; ensure that a majority of its voting board members or governing organization are DC residents; and ensure that it utilizes internal fiscal and quality controls and complies with applicable financial reporting requirements and DC OSP requirements.", "In its application, the eligible entity must also provide an assurance that it will comply with all requests related to any evaluation carried out in compliance with the DC OSP evaluation requirements.", "In determining grant awards to eligible entities, the Secretary must give priority to applications that will most effectively do three things. First, in awarding scholarships, the eligible entity must give priority to two types of students\u2014(1) an eligible student who, in the school year preceding the school year for which the eligible student is applying for a scholarship, attended an elementary or secondary school identified as one of the lowest-performing schools under DC's accountability system; and (2) students whose household includes a sibling or other child who is already participating in the program of the eligible entity, regardless of whether such students have previously been assigned to a DC OSP evaluation control group or have previously attended a private school. Second, the eligible entity must effectively target resources to students and families that lack the financial resources to take advantage of educational options. Third, the eligible entity must provide students and families with the widest range of educational options."], "subsections": []}, {"section_title": "Use of Funds", "paragraphs": ["Section 3007 includes requirements for the use of funds. An eligible entity is required to use the grant funds to provide eligible students with scholarships to pay tuition, fees, and transportation expenses (if applicable) to enable the eligible student to attend the participating private school of his/her choice. The eligible entity is required to ensure that the amount of tuition and fees charged by a participating school for an eligible student participating in the DC OSP does not exceed the amount of tuition and fees charged by such school to students who do not participate in the DC OSP. In using the grant funds to provide scholarships, the eligible entity is required to make scholarship payments to the parent of an eligible student participating in the program in a manner which ensures that the funds will be used to pay tuition, fees, and applicable transportation expenses.", "With respect to the scholarship amount, in addition to the other DC OSP requirements, the eligible entity is permitted to provide larger scholarships to eligible students with the greatest need. For the 2011-2012 school year, scholarship amounts were capped at $8,000 for kindergarten through 8 th grade and at $12,000 for grades 9-12. The Secretary is required to adjust these amounts annually for inflation. For the 2018-2019 school year, scholarship amounts are up to $8,857 for elementary and middle school and up to $13,287 for high school.", "The Secretary is required to make $2 million of the amount appropriated for the DC OSP each fiscal year available for the eligible entity to use to cover specific expenses. Funds can be used to cover administrative expenses including, for example, determining student eligibility to participate, selecting eligible students to receive scholarships, determining the scholarship amounts, maintaining records, and conducting site visits. They also include the cost of conducting a study, including a survey of participating parents, on any barriers participating eligible students experienced in gaining admission to or attending their first choice participating private school. The results of this study were required to be submitted to Congress no later than the end of the first full fiscal year after the date of enactment of the SOAR Reauthorization Act. The eligible entity can also use the funds for educating parents about the program and assisting them with the application process, including providing information about the program and participating schools, providing funds to assist parents in meeting expenses that might otherwise preclude the participation of eligible students in the DC OSP, and for streamlining the application process. ", "The eligible entity is also permitted to use up to 1% of the funds appropriated each year for the DC OSP to provide tutoring services to participating eligible students who need additional academic assistance. If funds are insufficient to provide tutoring services to all such students, priority must be given to students who previously attended an elementary or secondary school identified as one of the lowest-performing schools under the DC accountability system. ", "If funds appropriated for the DC OSP for any fiscal year remain available for subsequent fiscal years, the Secretary must make them available to the eligible entity. If the remaining funds were appropriated prior to the enactment of the SOAR Funding Availability Act, the funds must be provided to the eligible entity beginning on the date of enactment of such act. If the remaining funds were appropriated on or after the date of enactment of such act, the Secretary must make the funds available by the first day of the first subsequent fiscal year. If the eligible entity decides to use these additional funds during a fiscal year, the eligible entity must use not less than 95% of the funds to provide scholarships for eligible students or to increase the amount of the scholarships during such year and not more than 5% of such additional funds for administrative expenses, parental assistance, or tutoring. Funds used for administrative expenses, parental assistance, or tutoring must be in addition to the funds made available for these purposes each fiscal year. "], "subsections": []}, {"section_title": "Requirements for Private Schools Participating in the Program", "paragraphs": ["Section 3007 also includes requirements for participating private schools. All participating private schools must meet the following requirements:", "The school has and maintains a valid certificate of occupancy issued by DC. For all prospective students, the school makes \"readily available\" information on its accreditation. If the school has been operating for five years or less, the school submits to the eligible agency proof of adequate financial resources. This must reflect the school's ability to maintain operations throughout the school year. The school agrees to submit to site visits as determined to be necessary by the eligible entity. The school has financial systems, controls, policies, and procedures to ensure that funds are used in accordance with the requirements of the DC OSP. The school ensures that participating students are taught core subject matter by a teacher who has a baccalaureate degree or its equivalent. The school conducts criminal background checks on school employees who have direct and unsupervised interaction with students. The school complies with all requests for data and information related to the DC OSP reporting requirements.", "In addition, Section 3007 requires participating schools to meet accreditation requirements. The specific requirements differ depending on whether a private school was participating in the DC OSP as of the date of enactment of the SOAR Reauthorization Act or not. For private schools that were participating in the DC OSP as of the date of enactment of the SOAR Reauthorization Act, the school must be fully accredited by an accrediting body described in certain parts of the District of Columbia School Reform Act of 1995. If a participating private school does not meet this requirement then not later than one year after the date of enactment of the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ), the school must be pursuing full accreditation by one of the aforementioned accrediting bodies and be fully accredited by such accrediting body not later than five years after the date on which the school began the process of pursuing full accreditation. If a private school was not participating in the DC OSP as of the date of enactment of the SOAR Reauthorization Act, it must submit documentation that the school has been fully accredited by one of the aforementioned accrediting bodies prior to participating in the DC OSP. All participating private schools are required to submit a certification to the eligible entity that the school has been fully accredited by one of the aforementioned accrediting bodies within five years of the enactment of the SOAR Reauthorization Act. If a participating private school fails to meet the relevant accreditation requirements, the eligible entity is required to assist the participating eligible students in that school to identify, apply to, and enroll in another participating private school.", "Section 3008 includes additional requirements that participating private schools must meet. In general, participating private schools are prohibited from discriminating against program participants or applicants on the basis of race, color, national origin, religion, or gender. The last prohibition does not apply, however, to single sex schools that are operated by, supervised by, controlled by, or connected to a religious organization to the extent that nondiscrimination based on gender would be inconsistent with the religious tenets or beliefs of the school. In addition, a parent may choose and a participating private school may offer a single sex school, class, or activity. The SOAR Act specifically says that nothing in the act should be construed as altering or amending the Individuals with Disabilities Education Act (IDEA). With respect to sectarian participating private schools, nothing in the SOAR Act prohibits the school from hiring in a manner consistent with the school's religious beliefs, requires the school to alter its mission or remove religious symbols from its building, or prevents the school from retaining religious terms in its name, selecting its board members on a religious basis, or including religious references in its mission statements or other chartering or governing documents. Each participating private school may require eligible students to follow any rules of conduct or other requirements that apply to all other students at the school. ", "All participating private schools are required to comply with requests for data and information with respect to program evaluations required by the SOAR Act. Each participating private school is also required to comply with any testing requirements associated with the aforementioned program evaluations and discussed in detail below. IES will administer relevant assessments to students participating in the evaluation, unless the student is attending a participating private school that is administering the same assessment. If the participating private school is administering the assessment to an eligible student, it must make the assessment results available to the Secretary as necessary for the evaluation of the DC OSP.", "Any assistance provided to the parents of an eligible student through the DC OSP shall be considered assistance to the student and shall not be considered assistance to the participating private school that enrolls the student. In addition, any assistance provided to the parents of an eligible child under the DC OSP shall not be treated as income of the child or his/her parents for purposes of federal tax laws or for determining eligibility for other federal programs.", "Data on participating private schools are provided in a subsequent section of this report. In addition, Appendix B provides a list of schools participating in the DC OSP for school year 2018-2019."], "subsections": []}, {"section_title": "Evaluation", "paragraphs": ["Section 3009 includes the evaluation requirements associated with the SOAR Act. These include requirements related to the DC OSP as well as requirements related to the use of funds by DC public schools and DC public charter schools.", "As part of the evaluation and monitoring requirements, the Secretary and the Mayor of the District of Columbia (hereinafter referred to as the Mayor) are required to enter into two joint agreements. First, they must jointly enter into an agreement with IES to annually evaluate the DC OSP. Second, they must jointly enter into an agreement to monitor and evaluate the funds authorized and appropriated for DC public schools and DC public charter schools.", "The Secretary, through a grant, contract, or cooperative agreement, must ensure that the aforementioned annual evaluation of the DC OSP is conducted using \"an acceptable quasi-experimental research design\" to determine the effectiveness of the DC OSP. The research design is prohibited from using a control study group that includes students who applied for but did not receive a scholarship. The study must evaluate the following issues:", "A comparison of the academic achievement of participating eligible students in grades 3-8 and at one grade at the high school level with the academic achievement of students with similar backgrounds who are attending DC public schools and DC public charter schools (hereinafter referred to as the comparison group). Participating eligible students must be assessed using the same reading and mathematics assessments used by the DC public schools to comply with the requirements of Section 1111(b) of the ESEA. The success of the program in expanding choice options for parents of participating eligible students and increasing the satisfaction of such parents and students with their choice. The reasons parents of participating eligible students choose to have their child participate in the DC OSP, including important characteristics for selecting private schools. A comparison of the retention rates, high school graduation rates, college enrollment rates, college persistence rates, and college graduation rates of participating eligible students with the rates of students in the comparison group. A comparison of the college enrollment rates, college persistence rates, and college graduation rates of students who participated in the DC OSP in 2004, 2005, 2011, 2012, 2013, 2014, and 2015 after winning the lottery to participate with the rates for students who entered but did not win the lottery in those years and who, as a result, served as the control group for previous DC OSP evaluations. In making such comparisons, nothing prohibits students who entered but did not win the lottery from reapplying for a scholarship. A comparison of the safety of the schools attended by participating eligible students and schools in DC attended by students in the comparison group, based on the perceptions of students and parents. An assessment of student academic achievement at participating private schools in which 85% of the total number of students enrolled in the school are opportunity scholarship recipients. Any other issue applicable to participating eligible students the Secretary considers appropriate such as the impact of the program on DC public elementary and secondary schools.", "Data collected on the impact of the program on academic achievement and the educational attainment of participating eligible students and on students and schools in DC must be disseminated by the Secretary.", "IES also has responsibilities with respect to evaluations. IES is required to assess participating eligible students in grades 3-8 and at one grade at the high school level, by supervising the administration of the same reading and mathematics assessments used by the DC public schools to comply with the requirements of Section 1111(b) of the ESEA. In addition, IES is required to measure the academic achievement of all participating eligible students in grades 3-8 and at one grade at the high school level. Finally, IES is also required to work with the eligible entity that receives a grant under the DC OSP to ensure that the parents of each participating eligible student agree to allow their child to participate in the aforementioned evaluations and assessments carried out by IES.", "In meeting the evaluation requirements included in Section 3009, no personally identifiable information may be discussed in compliance with Section 444 of the General Education Provisions Act (GEPA). With respect to any student who is not attending a public elementary or secondary school, personally identifiable data shall only be disclosed to individuals carrying out the evaluation of the DC OSP, the group of individuals providing information for carrying out the evaluation of such student, and the parents of such student.", "The Secretary is required to submit to various congressional committees annual interim reports (not later than April 1 of the year after the date of enactment of the act) and each subsequent year through the year in which a final report is submitted, on the progress and preliminary results of the DC OSP evaluation. The Secretary must also submit a final report on the results of the DC OSP evaluation to the same congressional committees no later than one year after the final year for which a grant is made to the eligible entity.", "All reports and underlying data gathered in compliance with Section 3009 shall be made available to the public upon request, in a \"timely manner,\" following the Secretary's submission of a report to Congress. In making this information public, no personally identifiable information shall be disclosed or made available to the public.", "The Secretary may not use more than 5% of the funds appropriated for the DC OSP for a given fiscal year for evaluation purposes."], "subsections": []}, {"section_title": "Reporting Requirements", "paragraphs": ["The reporting requirements associated with the DC OSP are included in Section 3010. The eligible entity that receives funds during a year must submit a report to the Secretary not later than July 30 of the following year that provides information on the activities that were carried out using the funds received during the prior year. Additionally, the eligible entity must submit a report to the Secretary by September 1 of the year during which the second school year of the eligible entity's program is completed and for each of the next two years that includes data on the academic growth and achievement of scholarship participants, the high school graduate rate and college admission rate of scholarship participants, where appropriate, and parental satisfaction with the program. All of these reports are prohibited from including personally identifiable information.", "The eligible entity is also required to ensure that each participating private school during a given school year reports to the parents of each scholarship participant on the student's academic achievement; the safety of the school, including data on the incidence of school violence, student suspensions, and student expulsions; and the school's accreditation status. With respect to a scholarship participant's academic performance, the school must compare the student's performance with the (1) aggregate academic achievement of other scholarship recipients at the school who are in the same grade or level, and (2) aggregate academic achievement of the student's peers at the school who are in the same grade or level. Except for providing information about a student who is the subject of a report to the student's parent, these reports are prohibited from including personally identifiable information.", "Finally, the Secretary is required to report to various congressional committees not later than six months after the first appropriation of funds and annually thereafter on the findings from the reports submitted by the eligible entity."], "subsections": []}, {"section_title": "DC Public Schools and DC Public Charter Schools", "paragraphs": ["As previously discussed, the DC OSP is funded as part of a three-pronged funding arrangement. The other two parts of this three-pronged approach include DC public schools and DC public charter schools. Section 3004(b) requires the Secretary to provide funds to the Mayor if the Mayor agrees to the requirements included in Section 3011 for the DC public schools to improve public education in DC and for the DC public charter schools to improve and expand quality public charter schools in DC. Section 3011 of the SOAR Act specifies the requirements that must be met with respect to the funding provided under the act for public education in the District of Columbia.", "As a condition of receiving funds for DC public schools and DC public charter schools, the Mayor is required to do three things:", "1. ensure that all DC public schools and DC public charter schools provide IES with all of the information that IES requires to carry out the aforementioned assessments and evaluations; 2. enter into an agreement with the Secretary to monitor and evaluate the use of funds provided to DC public schools and DC public charter schools under the SOAR Act; and 3. not later than six months after the first appropriation of funds and annually thereafter, submit to various congressional committees a report on how the funds provided under the SOAR Act for public education were used in the preceding school year and how such funds are contributing to student achievement.", "If after reasonable notice and an opportunity for a hearing, the Secretary determines that the Mayor has failed to comply with these requirements, the Secretary is authorized to withhold funds appropriated to DC public schools, DC public charter schools, or both, depending on whether the failure relates to DC public schools, DC public charter schools, or both.", "In addition to specifying requirements that the Mayor must meet, Section 3011 also includes specific requirements pertaining to the provision of funds to DC public charter schools. The Secretary is permitted to direct the funds provided for any fiscal year (or a portion of such funds) to the Office of the State Superintendent of Education (OSSE) in DC. However, by doing so, the Secretary may not affect funding available for the DC OSP. The OSSE is permitted to transfer the funds received to subgrantees that are specific DC public charter schools or networks of such schools or to DC-based nonprofit organizations with experience in successfully providing support or assistance to DC public charter schools or networks of such schools. In addition, the funds provided for DC public charter schools shall be available to any DC public charter school that is in good standing with the DC Public Charter School Board (DCPCSB). Further, OSSE and the DCPCSB are prohibited from restricting the availability of funds to certain types of schools based on the school's location, governing body, or school facilities. "], "subsections": []}, {"section_title": "Program Appropriations", "paragraphs": ["Section 3014 authorizes $60 million to be appropriated for each fiscal year from FY2012 through FY2019. Of the funds appropriated in each of these fiscal years, one-third of the funds must be used for the DC OSP, one-third of the funds must be used for DC public schools, and one-third of the funds must be used for DC public charter schools. If appropriations for these fiscal years do not equal $60 million, the amount that is appropriated must be divided in thirds among the DC OSP, DC public schools, and DC public charter schools. Funds appropriated for FY2012 through FY2019, as well as those previously appropriated and available, are to remain available until expended. "], "subsections": []}, {"section_title": "Transition Provisions", "paragraphs": ["Section 3012 of the SOAR Act includes multiple transition provisions, including the repeal of the DC School Choice Incentive Act of 2003, special rules regarding funding, provisions related to multiyear awards, requirements for a MOU, and orderly transition provisions. With respect to the special rules regarding funding, the SOAR Act makes changes to prior appropriations bills that provided funding for the DC OSP. First, the SOAR Act allows funds provided for the DC OSP for FY2009, FY2010, or any other act to be used to provide opportunity scholarships for the 2011-2012 school year to students who have not previously received such scholarships. Second, the SOAR Act stated that provisions of the FY2010 appropriations act related to a report on the academic rigor and quality of each participating school and a requirement that the Secretary ensure that site inspections are conducted at each participating private school at least twice a year no longer applied. Third, any unobligated amounts that had been reserved to carry out these aforementioned provisos were to be made available to the eligible entity for administrative expenses or to provide scholarships, including providing scholarships for the 2011-2012 school year to students who had previously not received such scholarships. ", "The transition provisions also include a requirement that a recipient of a grant or contract under the DC School Choice Incentive Act of 2003, as such act was in effect on the day prior to the enactment of the SOAR Act, shall continue to receive funds in accordance with the terms and conditions of such grant or contract with certain exceptions. For example, the aforementioned provisos related to the DC OSP that were addressed by the first special rule related to funding shall not apply. In addition, any changes made by the MOU, discussed below, shall apply.", "The transition provisions require the Secretary and the Mayor to revise the MOU that was entered into under the DC School Choice Incentive Act of 2003, as such act was in effect on the day prior to the enactment of the SOAR Act, to address the implementation of the DC OSP under the SOAR Act. The revised MOU must also address how the Mayor will ensure that DC public schools and DC public charter schools comply with all the \"reasonable requests\" for information needed to fulfill the evaluation requirements of the DC OSP.", "Finally, the Secretary is permitted to take such steps as the Secretary determines to be necessary to provide for an orderly transition from the authority of the DC School Choice Incentive Act of 2003 to the authority of the SOAR Act."], "subsections": []}]}, {"section_title": "DC OSP, DCPS, and Charter School Appropriations", "paragraphs": ["Funding for the DC OSP has been included with more general funding provided by the federal government to the District of Columbia for school improvement since the program's inception. The FY2004 Consolidated Appropriations Act, which authorized the School Choice Incentive Act, provided funding specifically for school improvement in the District of Columbia that is allocated among three entities: (1) the District of Columbia public schools for the improvement of public education, (2) the State Education Office for the expansion of public charter schools, and (3) ED for the DC OSP. Since FY2004, Congress has continued to provide funding for each of these three entities. From FY2004 though FY2019, over $800 million has been appropriated for these entities. Table 1 details funding allocations for the program's three funding recipients. "], "subsections": []}, {"section_title": "Student and Private School Participation in the DC OSP", "paragraphs": ["This section of the report provides data on student and private school participation in the DC OSP. The data discussed in this section have been taken from publicly available reports or have been provided by the DC OSP local program administrator. Depending on when in each school year the data were collected, there may be some inconsistencies in the data, particularly with respect to student participation. "], "subsections": [{"section_title": "Student Participation", "paragraphs": ["Since the program's inception in the 2004-2005 school year through the 2018-209 school year, 24,351 applications have been submitted, and 10,701 scholarships have been awarded. The number of students participating from year to year has ranged from just over 1,000 students to over 1,900 students for a total of 22,493 nonunique students through the 2018-2019 school year ( Table 2 ). From the 2009-2010 school year through the 2017-2018 school year, most student participants used a scholarship to enroll in grades prekindergarten through 8 th grade, but the number of enrollees in these grade levels has fluctuated by year ( Figure 1 ). While a smaller number of students have used a scholarship to attend a high school, the number of students using a scholarship at that level has fluctuated less over this time period, particularly in recent school years. Appendix A includes detailed data on scholarship use by grade level. ", "Data on applications to the program are available for school years 2011-2012 through 2018-2019 but only sporadically in prior years ( Table 3 ). For the first year of the program (2004-2005 school year), almost 2,700 students applied for a scholarship. Four years later (2008-2009 school year), the number of scholarship applications was 726 with the majority of the applications coming from returning students. During the 2012-2013 school year, the number of applications exceeded 1,550 with over 1,000 applications coming from new students. Since that school year, the program has received over 3,000 applications each year. ", "For the 2018-2019 school year, a total of 3,294 applications were received with 1,961 applications submitted by returning students and 1,333 applications submitted by new students. Of these students, 1,645 students\u20141,329 returning students and 316 new students\u2014used a scholarship in 44 of the 46 participating private schools. Among the students using a scholarship during the 2018-2019 school year, the average annual family income was $23,285. In addition, 43% of the participating students were eligible for SNAP or Temporary Aid for Needy Families (TANF) benefits. The majority of the participating students were African-American/Black (73.7%), followed by Hispanic and/or Latino (17.3%)."], "subsections": []}, {"section_title": "Private School Participation", "paragraphs": ["Since the inception of the DC OSP program, the number of participating schools has ranged from 46 schools to 68 schools ( Table 4 ). With the exception of the first two years of the program, there has been a generally downward trend in the number of participating private schools. As students choose which participating private school they would like to attend and have to meet any relevant admission criteria at such school, not every participating school may enroll a participating eligible student. As shown in Table 4 , there has never been a school year in which all of the participating private schools also enrolled a scholarship recipient. The percentage of participating schools enrolling scholarship recipients has ranged from 78.8% to 98.0%.", " Appendix B provides more detailed information about participating private schools for the 2018-2019 school year. For the 2018-2019 school year, 46 private schools are participating in the DC OSP. Of these schools, 39 serve students in elementary or middle schools and 20 serve students in high school. For participating private schools that reported data on tuition, the scholarship could fully cover tuition at 11 schools for all or some of the grades served by the school. Of the 46 participating private schools, 33 schools indicated they were accredited, 1 school indicated that it was a candidate for accreditation, and 8 schools did not provide any information on their accreditation status."], "subsections": []}]}, {"section_title": "Program Management and Evaluation", "paragraphs": ["Since the enactment of the DC OSP and through each subsequent reauthorization of the DC OSP, statutory language has required ED to award one or more grants to an eligible entity to administer the program. Since the inception of the program, ED has only awarded a grant to one eligible entity through each grant competition. To date, three different organizations have served as the local program administrator for the DC OSP."], "subsections": [{"section_title": "Washington Scholarship Fund", "paragraphs": ["The Washington Scholarship Fund (WSF) was the first organization to serve as the local program administrator for the DC OSP. At the time it was selected, the WSF was the largest and oldest granter of privately financed scholarships in the District of Columbia. WSF's contract to administer the program was for the five-year period that corresponded with the original program authorization of the DC OSP (FY2004 though FY2008). In its first evaluation of the program, the Government Accountability Office found that WSF expanded its operations from \"$150,000 in federal and foundation grants in fiscal year 2004 to $12.9 million in 2006 without sufficient accountability mechanisms to govern the use of the OSP funds.\" GAO also determined that WSF \"did not have the capacity to oversee participating private schools and administer a growing scholarship program funded with federal dollars.\" GAO made several recommendations to ED about directing the grantee to improve internal controls, continue to integrate its financial systems, improve monitoring, and \"provide accurate and complete information to parents.\" The findings from the GAO evaluation are discussed in greater detail below. ", "When the Omnibus Appropriations Act, 2009 ( P.L. 111-8 ) extended the DC OSP beyond its original authorization period, ED held a competition in FY2009 to select a local program administrator for a one-year period. WSF was once again selected as the local program administrator. However, WSF was unable to continue administering the program beyond the 2009-2010 school year \"because it was unable to obtain the additional funding commitments necessary to serve the participating families and fulfill school oversight responsibilities.\" The WSF transferred administration of the DC OSP to the DC Children and Youth Investment Trust Cooperation (hereinafter referred to as the Trust) in 2010. "], "subsections": []}, {"section_title": "DC Children and Youth Investment Trust Cooperation", "paragraphs": ["To receive the grant following the transfer of local program administration from WSF to the Trust, the Trust was required to submit a grant transfer agreement to ED that had to address the absolute priority that FY2009 appropriations only be used to provide scholarships to currently enrolled students and that FY2010 and prior-year appropriations only be used to provide scholarships during the 2010-2011 school year to students who received scholarships during the 2009-2010 school year.", "ED subsequently granted a waiver and extension of the one-year project period to the Trust. ED did not think it would be in the public interest to run another grant competition for FY2010 and FY2011, if funds were appropriated, especially since it was anticipated that the project would only operate for a short period of time and serve a limited population of students. ED did not run another grant competition to select a local program administrator until FY2015. ", "GAO conducted a second evaluation of the DC OSP while the Trust was serving as the local program administrator. It found that the Trust was unable to provide accurate and timely information to parents about participating schools. GAO also found that the Trust lacked the internal controls necessary for effective implementation and oversight of the DC OSP. In addition, GAO found that ED had provided limited assistance to the Trust with respect to several areas outlined in a MOU and made 10 recommendations for how ED could improve the program. A more detailed discussion of the findings from the GAO evaluation is included below. Ultimately, the Trust decided to no longer serve as the program administrator."], "subsections": []}, {"section_title": "Serving Our Children", "paragraphs": ["On August 19, 2015, ED awarded a grant to Serving Our Children to be the program administrator for the DC OSP. The grant was for a three-year period from October 1, 2015, to September 20, 2018. In January 2018, ED proposed granting a waiver to extend the period of performance for the current grantee for up to two years to allow Serving Our Children to receive additional funds in FY2018 and FY2019 to continue serving DC students. ED proposed the waiver be based on four factors:", "1. Extending Serving Our Children's project period would \"create stability and continuity\" as the DC OSP enters its last two years of its program authorization. 2. Based on the number of eligible applications to serve as the program administrator that were submitted during past DC OSP competitions, ED indicated that \"few organizations are eligible for and have the capacity to administer\" the DC OSP. 3. Extending Serving Our Children's grant period would allow the organization to \"fully implement the new recruitment and marketing strategies designed to significantly increase scholarship usage rates.\" 4. Extending Serving Our Children's project period would align the next DC OSP competition with the \"next anticipated reauthorization of the SOAR Act.\"", "ED subsequently issued a final waiver and extension of the project period in April 2018. GAO has not conducted an evaluation of DC OSP program management since Serving Our Children was granted the contract to administer the program."], "subsections": []}, {"section_title": "Evaluations Conducted by GAO", "paragraphs": ["GAO examines how federal funds are spent. It provides Congress and federal agencies with information on how to save money and work more efficiently. With respect to the DC OSP, GAO has evaluated certain accountability mechanisms and whether they are operating as intended, such as the program's use of funds and general adherence to statutory requirements. GAO also has evaluated how ED and the District of Columbia fulfilled their roles and responsibilities for the DC OSP. ", "As mentioned above, GAO has conducted two evaluations of the DC OSP. The first evaluation was published in 2007 when the DC OSP was administered by the WSF. This evaluation primarily used data collected and reported during the 2005-2006 school year. The second evaluation was published in 2013 when the program was administered by the Trust. This evaluation primarily used data from a performance audit from May 2012 to September 2013, as well as program documentation from 2010 to 2013."], "subsections": [{"section_title": "Evaluation of the DC OSP under the Washington Scholarship Fund", "paragraphs": ["GAO's first evaluation of the DC OSP included an assessment of three program goals: (1) accountability mechanisms governing the use of funds, (2) results of WSF's efforts to meet the program's recruiting priorities and eligibility requirements and inform parents of their choices, and (3) the extent that the evaluation of the DC OSP reflects statutory requirements and the implementation of the program supports the detection of useful and generalizable findings. ", "For the first goal, GAO found that WSF's accountability mechanisms regarding the use of funds were not strong, and WSF did not adhere to its own procedures. For example, WSF used OSP funds to pay tuition for students that attended schools that typically did not charge students tuition, which was not in accordance with statutory requirements. In addition, the WSF used funds to pay before- and after-care fees, and GAO was unable to determine whether this use of funds was in accordance with statutory requirements. WSF's accountability mechanisms were weakened by rapid expansion and limited time to design and implement the internal controls necessary to manage the major increase in operations. WSF also experienced a high rate of staff turnover during the first several years of administering the DC OSP.", "With regard to WSF's efforts to meet the recruiting priorities, GAO found that WSF was not able to recruit an appropriate number of students from schools in need of improvement. Specifically, the proportion of students from schools in need of improvement that received a scholarship was lower than the proportion of such students attending DC public schools. WSF also had difficulty finding placements for students at the secondary level because there were fewer openings available at participating private schools. WSF also faced challenges in providing parents with accurate information regarding private schools. For example, in some cases, WSF provided inaccurate information on teacher qualifications and tuition for some schools. ", "In terms of meeting statutory evaluation requirements, GAO found that the research design was strong and that the use of random assignment facilitated appropriate comparisons between students who received a scholarship and similar students who attended DC public schools. Over the course of the program evaluation, however, the DC public schools changed the assessment measure used to measure student achievement. The original assessment used to evaluate the DC OSP was chosen in accordance with statutory requirements. However, it became mismatched with the assessment used by DC public schools. The lack of consistency in the assessment measure between the DC OSP students and the DC public school students limited the ability to make comparisons and generalize findings."], "subsections": []}, {"section_title": "Evaluation of the DC OSP under the DC Children and Youth Investment Trust Corporation", "paragraphs": ["GAO's second evaluation of the DC OSP included an assessment of three program goals: (1) the extent to which the Trust provides information that enables families to make informed school choices, (2) whether the Trust's internal controls ensure accountability for the DC OSP, and (3) how ED and the District of Columbia agencies have performed their stated roles and responsibilities.", "The Trust made efforts to inform families of their school choices through various outreach activities, including advertising through print, radio, bus ads, newspapers, and flyers posted in public areas. GAO, however, found that the Trust was not able to provide accurate and timely information to parents about participating schools. For example, the participating school directory was published nine months after the start of the school year and lacked key information about tuition, fees, and accreditation. ", "GAO found that the Trust lacked the internal controls necessary for effective implementation and oversight of the DC OSP. For example, the Trust did not have a process for verifying self-reported information from private schools, including eligibility information. Additionally, while there were adequate procedures in place for financial reporting, the Trust did not submit mandatory financial reports on time and in accordance with statutory requirements. In some cases, reports were one or two years late.", "ED and the District of Columbia have a MOU to clarify roles and responsibilities in the implementation of certain aspects of the DC OSP. These agencies worked in a cooperative agreement with the Trust to meet program goals. GAO found that ED provided limited assistance to the Trust with regard to several areas outlined in the MOU. For example, ED was responsible for helping the Trust make improvements to financial reporting procedures and site visit policies, as well as improving the accuracy of information provided to parents. ED provided general assistance with administrative and operational functions; however, GAO found that ED did not provide assistance in these specific areas of the MOU. In addition, there was a lack of clarity regarding the responsibility of the Trust to conduct building, zoning, health, and safety inspections in participating schools. As a result, inspections were not conducted as described in the MOU."], "subsections": []}]}]}, {"section_title": "Impact Evaluations", "paragraphs": ["In addition to the previously discussed DC OSP evaluations conducted by GAO, which focused largely on program implementation issues, ED has conducted impact evaluations of the participation of schools, parents, and students in the DC OSP, as well as the effectiveness of the program on student achievement and other outcome measures. These evaluations focused on determining the effectiveness of the DC OSP in increasing student achievement, parent and student satisfaction, school safety, and parental involvement. The impact evaluations were designed to provide evidence for whether the DC OSP works to improve academic achievement for students and expand school choice options for parents. Appendix C provides a link to each of these evaluation studies. A summary of the results of each of the impact evaluations is discussed below and more detailed results are presented in Appendix D . "], "subsections": [{"section_title": "Evaluations Conducted by ED", "paragraphs": ["IES has conducted six evaluations of the DC OSP . The first two evaluations gathered data on schools, students, and parents that chose to participate in the program. These participation evaluations, however, did not gather achievement data or other outcomes that would allow for the evaluation of the effectiveness of the program. The next four evaluations were impact evaluations that measured the effectiveness of the DC OSP with student achievement data and other outcomes of interest. These six evaluations took place under different legislative requirements over a period of 12 years. A seventh evaluation is beginning with data collected during school year 2018-2019. Table 5 provides a list and descriptive characteristics of evaluations of the DC OSP conducted by ED. It depicts how DC OSP evaluations correspond to the school years in which data were collected. Appendix C provides links to the ED reports corresponding to each evaluation.", "The four impact evaluations published to date are similar in their design and presentation of results. The first two were conducted under the legislative requirements of P.L. 108-199 and the second two were conducted under the legislative requirements of P.L. 112-10 . While there are some differences between the requirements, both evaluations were required to use the strongest possible research design to determine the effectiveness of the DC OSP and both evaluations used similar outcome measures (e.g., student achievement in reading and mathematics, parent and student satisfaction, perceptions of school safety, and parental involvement). Due to these similarities, results are reported by outcome measure. For each outcome measure, the results of evaluations required by P.L. 108-199 are discussed first and the results of evaluations required by P.L. 112-10 are discussed second.", "As previously discussed, the evaluations were required to use the strongest possible research design for determining the effects of the DC OSP. The use of lotteries in the DC OSP allowed the evaluation to use the \"gold standard\" of evaluation, which is randomization. The lottery created two randomly selected groups: students who were selected to receive a scholarship (treatment group) and students who applied for but were not selected to receive a scholarship (control group). For those students who received a scholarship, some students chose to use the scholarship (scholarship use group) and some students chose not to use the scholarship (scholarship offer group).", "The evaluations use three groups to determine the effectiveness of the program (two treatment groups and one control group): (1) students who were offered a scholarship (scholarship offer group), (2) students who used a scholarship (scholarship use group), and (3) students who were not offered a scholarship (control group). For the purposes of the evaluation, the scholarship offer group and the scholarship use group are considered treatment groups. ", "Treatment groups and the control group were compared on the following outcome measures: (1) reading and mathematics achievement on a grade-appropriate, nationally norm-referenced standardized test; (2) parent and student satisfaction (surveys); (3) parent and student perceptions of school safety (surveys); and (4) parental involvement (surveys). The effects of each outcome measure were disaggregated by several subgroups. Across the four evaluation studies, subgroups included the following: (1) students who previously attended a school in need of improvement (SINI), (2) students who did not attend a SINI (non-SINI), (3) students in elementary school, (4) students in secondary school, (5) students who had lower levels of achievement (below the median) when entering the scholarship program, (6) students who had higher levels of achievement (above the median) when entering the scholarship program, (7) male students, (8) female students, (9) students in cohort 1 (students who applied in 2004), and (10) students in cohort 2 (students who applied in 2005). All subgroups were not examined in all evaluations. ", "The following section discusses the results of the four impact evaluations, comparing the treatment groups (scholarship offer and scholarship use groups) to the control group (scholarship not offered) on the four outcome measures."], "subsections": [{"section_title": "Results of Impact Evaluations for Scholarship Offer and Use", "paragraphs": [" Appendix D provides summary tables describing the results of the four impact evaluations conducted by ED. There is one table for each outcome measure: (1) reading and mathematics achievement ( Table D-1 ), (2) parent and student satisfaction ( Table D-2 ), (3) parent and student perceptions of school safety ( Table D-3 ), and (4) parental involvement ( Table D-4 ). The tables report each outcome measure disaggregated by subgroups (e.g., SINI, non-SINI, elementary, secondary, etc.)."], "subsections": [{"section_title": "Reading and Mathematics Achievement", "paragraphs": [" Table D-1 presents the results for reading and mathematics achievement.", "Evaluations conducted under the requirements of P.L. 108-199 report the following:", "For reading achievement , students who were offered or used a scholarship scored significantly higher overall than students in the control group in the first impact evaluation; however, the effect was not observed in the second impact evaluation. In the second impact evaluation, the overall effect on reading achievement was not significant, but there were some statistically significant positive effects for subgroups (e.g., students in elementary school, students who had higher levels of achievement entering the year, and female students). For mathematics achievement, students who were offered or used a scholarship did not score significantly differently than students in the control group.", "Evaluations conducted under the requirements of P.L. 112-10 report the following:", "For reading achievement , students who were offered or used a scholarship did not score significantly differently overall than students in the control group in both impact evaluations. In some subgroups, there were statistically significant negative effects of scholarship offer and scholarship use. For example, students in secondary schools showed statistically significant negative effects on reading achievement across both impact evaluations. For mathematics achievement , across both impact evaluations, students who were offered or used a scholarship scored statistically significantly lower overall than the control group in both impact evaluations."], "subsections": []}, {"section_title": "Parent and Student Satisfaction", "paragraphs": [" Table D-2 presents the results for parent and student satisfaction.", "Evaluations conducted under the requirements of P.L. 108-199 report the following:", "Parent satisfaction for parents of students who were offered or used a scholarship was significantly higher than parents of students in the control group for both impact evaluations. At the subgroup level, this trend was seen consistently across the evaluations for the subgroups of students from non-SINI schools and students who entered the scholarship program with higher levels of achievement. Student satisfaction for students who were offered or used a scholarship was not significantly different than students in the control group for both impact evaluations.", "Evaluations conducted under the requirements of P.L. 112-10 report the following:", "Parent satisfaction for parents of students who were offered or used a scholarship was not significantly different than parents of students in the control group for both impact evaluations. In the second impact evaluation, there were some positive subgroup effects for parents of higher-achieving students, but the effect was not observed in the overall group. Student satisfaction for students who were offered or used a scholarship was not significantly different than students in the control group for both impact evaluations."], "subsections": []}, {"section_title": "Parent and Student Perceptions of School Safety", "paragraphs": [" Table D-3 presents the results for parent and student perceptions of school safety.", "Evaluations conducted under the requirements of P.L. 108-199 report the following:", "Parent perceptions of school safety for parents of students who were offered or used a scholarship were significantly higher compared to parents of students in the control group. In the first impact evaluation, all subgroups of parents reported higher perceptions of safety. In the second impact evaluation, only one subgroup of parents reported higher perceptions of school safety (i.e., parents of students who previously attended non-SINI schools). Student perceptions of school safety for students who were offered or used a scholarship were not significantly different than students in the control group for both impact evaluations.", "Evaluations conducted under the requirements of P.L. 112-10 report the following:", "Parent perceptions of school safety for parents of students who were offered or used a scholarship were significantly higher compared to parents of students in the control group. The positive effect was observed across most subgroups in both impact evaluations. Student perceptions of school safety for students who were offered or used a scholarship were not significantly different compared to students in the control group in the first impact evaluation. However, in the second impact evaluation, students reported significantly higher perceptions of school safety if they were offered or used a scholarship. The positive effect was observed for several subgroups of students, including students from SINI schools, students in secondary schools, and students who entered the program with lower levels of mathematics achievement."], "subsections": []}, {"section_title": "Parental Involvement", "paragraphs": [" Table D-4 presents the results for parental involvement.", "Evaluations conducted under the requirements of P.L. 108-199 report the following:", "Parental involvement of parents of students who were offered or used a scholarship was not significantly different from the control group. In some subgroups, the first impact evaluation showed that parental involvement of parents in the treatment group was lower than the control group (i.e., parents of students who previously attended non-SINI schools, parents of secondary students, parents of students who entered the program with higher levels of achievement, and parents of females).", "Evaluations conducted under the requirements of P.L. 112-10 report the following:", "Parental involvement of parents of students who were offered or used a scholarship was not significantly different from the control group. In the first impact evaluation, there was one positive effect of parental involvement for one subgroup (i.e., parents of students in secondary school), but the effect was not observed in the overall group."], "subsections": []}]}]}, {"section_title": "Evaluation-Related Issues", "paragraphs": ["The federal government has provided over $245 million since FY2004 to support the DC OSP. These grants have been accompanied by program evaluation results to examine the return on the federal government's investment. The findings from these evaluations over the course of the existence of the program have been mixed (see Appendix D ). This leads to questions about whether the program is successful and how success should be measured. Another question that arises is whether the results of these evaluations can be used to replicate the DC OSP in other locations. Each of these issues is discussed briefly below. "], "subsections": [{"section_title": "Managing Expectations of Impact Evaluation Results", "paragraphs": ["When evaluating a new program, some expect immediate positive results. In the evaluation studies of the DC OSP, students who were offered or used a scholarship made some significant gains in reading compared to the control group and had similar or sometimes lower mathematics achievement compared to the control group. While these results may not be overwhelmingly positive, it is difficult to gauge how much achievement gain to expect.", "To create a context for interpreting the results of the DC OSP evaluation, it may be helpful to consider the results of other impact evaluations of similar scholarship programs. Several states have similar scholarship programs and have conducted impact evaluations. The Louisiana Scholarship Program (LSP), for example, offers publicly funded vouchers for low-performing students to attend private schools if their family income does not exceed 250% of the poverty line. In the first two years, there were significant negative effects for students who participated in the LSP program. The evaluation of the LSP after three years, however, found no statistically significant differences in reading or mathematics. A retrospective analysis of records for the Indiana Choice Scholarship Program found that scholarship recipients scored similarly in reading but significantly lower in math after four years. Based on the results of these evaluations, results from the DC OSP seem to be in line with what is typical for students after several years of participation in this type of scholarship program.", "Another issue related to evaluating the program is whether the evaluations are focused on the appropriate outcome measures and how much weight should be afforded to a given outcome measure. There is a substantial focus on student academic performance, which is a common focus of the evaluation of education programs, including those offered in public schools. The DC OSP evaluations have also looked at other factors such as perceptions of school safety, parent involvement, and high school graduation rates. As with other academic programs, if academic performance is comparable to or lagging behind that of a comparison group but some gains are seen on other outcome measures, the question becomes one of whether those other gains are sufficient to merit program continuation or possible program expansion. This question is difficult to grapple with, as school voucher advocates may point to any successes as a reason for program continuation, while opponents of school vouchers may point to any shortcomings as a reason for the program to be eliminated."], "subsections": []}, {"section_title": "Lack of Direct Comparison for Scholarship Use", "paragraphs": ["The \"gold standard\" in any experimental evaluation is the use of random assignment into treatment and control groups. The evaluations described above required IES to use the strongest possible research design for determining the effectiveness of the opportunity scholarship program. The DC OSP evaluation used random assignment to choose students who would be offered a scholarship and students who would not be offered a scholarship. It was not practical or feasible, however, to randomly assign students to use the scholarship and other students not to use the scholarship. By the nature of the program, parents and students were provided with a choice. As such, the random assignment allows for a direct comparison between students who were offered a scholarship and those who were not offered a scholarship. It did not, however, allow for a direct comparison between students who used the scholarship and those who were not offered a scholarship. To determine the effect on students who used the scholarship, researchers used a mathematical adjustment. The effect of using a scholarship was estimated by dividing the impact of being offered a scholarship by the fraction of the treatment group that used the scholarship.", "Because researchers are not able to use random assignment of students to require the use of a scholarship in a school choice program, it may be more practical to use quasi-experimental research designs. P.L. 115-31 allows IES to use an acceptable quasi-experimental research design for determining the effectiveness of the DC OSP. This approach does not use a control group of students who applied for but did not receive a scholarship. A well-designed, quasi-experimental approach, however, would allow IES to make reasonable comparisons between students who use a scholarship to students of similar backgrounds in DC public schools and DC public charter schools."], "subsections": []}, {"section_title": "Response Rate and Attrition", "paragraphs": ["During the impact evaluations, IES was required to work with eligible entities to ensure that parents of each student who applies for a scholarship agree to allow their child to participate in the assessment for the evaluation. Evaluations need a certain level of participation, or \"response rate\" to have results be considered reliable and valid. Response rates are not typically 100%. For example, the final evaluation report under P.L. 108-199 finds that the effective response rate for reading and mathematics assessments was 69.4% for the control group and 69.5% for the treatment group. That is, approximately 69.5% of students who were offered a scholarship participated in reading and mathematics assessments. The What Works Clearinghouse considers response rates below 70%, or a difference in response rates between treatment and control groups of over 5%, to be a possible attrition problem. ", "Another potential source of attrition is natural attrition as students either graduate or leave secondary education. The DC OSP impact evaluations are part of a longitudinal study that tracks students over time. Some students in the first cohort were in secondary school. Over four years of evaluation under P.L. 108-199 , there was a natural attrition of students who could no longer be part of the study because they \"graded-out\" or left the K-12 education system. By the final year of the evaluation, 13% of the treatment group could no longer be tracked because they \"graded-out\" or left. When the sample size of an evaluation is reduced due to attrition, it becomes harder to find an effect of the treatment. That is, an effect of a certain size may be significant in one year, but as the sample size is reduced, that same size of effect may become insignificant in the next year because of a lack of power in the study."], "subsections": []}, {"section_title": "Sensitivity of Outcome Measures", "paragraphs": ["The likelihood of finding an effect in an impact evaluation is dependent on the sensitivity of outcome measures. To evaluate reading and mathematics achievement in the DC OSP evaluation, IES used both the Stanford Achievement Test, version 9 (evaluations conducted under the requirements of P.L. 108-199 ) and the TerraNova, Third Edition (evaluations conducted under the requirements of P.L. 112-10 ). These assessments were selected because they were considered a grade-appropriate, nationally norm-referenced standardized test for students in grades K-12 with a relatively short administration (90 minutes for the reading and mathematics subtests). These assessments, however, are not aligned with standards and curricula in place at DC private schools, public schools, or public charter schools. It is possible, therefore, that the assessments used in the evaluations were not sensitive to the potential academic gains made by students participating in the evaluation. ", "P.L. 115-31 has changed the assessment requirements such that future evaluations must use the same reading and mathematics assessments used by the DC public schools to comply with the ESEA. DC public schools currently administer assessments developed by the Partnership for Assessment of Readiness for College and Careers (PARCC). PARCC assessments are aligned with academic standards used by the DC public schools. These assessments, however, may not be aligned with the standards in place in DC private schools. The PARCC assessments, therefore, may be more sensitive to changes in achievement for students who attend DC public schools than students who attend DC private schools. It is possible that future evaluations will have a positive bias toward DC public school students since the assessment theoretically measures what they are learning in the classroom. The extent to which the assessments measure what DC private school students are learning in the classroom is unknown.", "In evaluation terms, therefore, there may be a positive bias toward the control group. If there is a positive bias toward the control group, it would be more difficult to detect a significant effect of the treatment (i.e., the offer or use of a DC opportunity scholarship)."], "subsections": []}, {"section_title": "Limited Generalizability to Other Voucher Programs", "paragraphs": ["Positive results of impact evaluations are often used as evidence to \"scale-up\" a specific education policy or practice. In some cases, an education policy or practice that works in one setting may also work in another setting. If providing another school choice option to parents and students in the District of Columbia produces positive results, is this evidence that these results would likely be replicated in another state or city? It is difficult to interpret the results of the DC OSP impact evaluations within the context of other school choice programs. DC has a unique structure of governance and a relatively large number of charter schools. If the program has evidence of increasing achievement and expanding choice options for students and their parents, the likelihood that these effects would generalize to other cities remains unknown.", "Appendix A. DC OSP Scholarship Use by Grade Level, 2009-2010 School Year Through 2017-2018 School Year", "Appendix B. Private Schools Participating in the DC OSP, 2018-2019 School Year", "Appendix C. Impact Evaluation Reports", "Appendix D. Summary of Impact Evaluation Results", "Appendix E. Glossary of Acronyms", "Appendix F. Legislative History of the DC Opportunity Scholarship Program ", "This appendix traces the DC OSP from the efforts associated with its initial enactment through its current authorization. With the exception of the SOAR Technical Corrections Act ( P.L. 112-92 ), the enacting legislation and all subsequent amendments related to the DC OSP have been included in appropriations bills. Funding for the DC OSP is provided under the Federal Payment for School Improvement account under the District of Columbia title, which is included in the Financial Services appropriations act. This account was established with the enactment of the DC OSP in FY2004. Other changes to the DC OSP, such as program reauthorizations, have also been included in annual appropriations bills but have been detailed elsewhere in the appropriations bills. This discussion includes each relevant bill that has been enacted since the DC School Choice Incentive Act of 2003. While the discussion includes some information about provisions specifically affecting DC public schools and DC public charter schools, the focus of the discussion is on the DC OSP. ", "Enactment of the Opportunity Scholarship Program", "In the Bush Administration's FY2004 budget submission, the Administration requested $75 million for a Choice Incentive Fund that would have provided competitive grants to states, local educational agencies (LEAs), and community-based organizations that expanded opportunities for parents of children who attend low-performing schools to attend higher-performing schools, including charter schools and private schools. Under the Administration's proposal, a portion of the funds would have been reserved for school choice programs in the District of Columbia. Both the Mayor of the District of Columbia (hereinafter referred to as the Mayor), Anthony Williams, and the President of the District of Columbia Board of Education, Peggy Cooper Cafritz, endorsed the concept of private school vouchers as a means of improving education options for DC public school students and as a means for transforming the city's faltering public school system. Local supporters of a voucher program insisted that the program had to be federally funded and could not result in a reduction of funds to the city's traditional public schools and public charter schools. Eleanor Holmes Norton, the District of Columbia's Delegate to Congress, subsequently criticized the Mayor's support for a federally funded voucher program, noting that the proposal was an affront to home rule. Other opponents of the voucher program argued that the program would reduce needed funding for public education and be of minimal benefit to most of the city's students.", "The establishment of a federally supported voucher program met with both support and resistance in Congress. In July 2003, the House Committee on Government Reform passed H.R. 2556 , the DC Parental Choice Incentive Act of 2003, by a vote of 22 to 21. The act would have created a federally funded scholarship program to serve low-income students in the District of Columbia. The program would have established a competitive grant program under which the Secretary of Education would award grants to eligible entities for the operation of one or more scholarship programs. Grantees would have awarded scholarships of up to $7,500 per academic year to students who are residents of the District of Columbia and whose family income did not exceed 185% of the poverty level to enable them to attend private elementary and secondary schools located in the District of Columbia. The program would have been authorized at $15 million for FY2004 and at such sums as may be necessary through FY2008.", "Later that month, the House Committee on Appropriations reported H.R. 2765 , which would have provided $10 million for a school choice program in the District of Columbia in the FY2004 appropriations bill for the District of Columbia. The program was substantively similar to the program proposed under H.R. 2556 . During floor debate on H.R. 2765 two voucher-related amendments were offered. The first, offered by Delegate Norton, would have eliminated the proposed voucher program. The amendment failed to pass by a vote of 203 to 203. A second amendment was offered by Representative Tom Davis that would have established eligibility criteria for students to receive a voucher and cap the maximum amount of funding a voucher could provide for any given school year. The amendment passed by a vote of 209 to 206. ", "The Senate's version of the FY2004 District of Columbia appropriations bill ( S. 1583 ) included the DC Student Opportunity Scholarship Act of 2003. This bill was substantively similar to H.R. 2556 , and contained the framework on which the final provisions for the DC School Choice Incentive Act were based. It was placed on the Senate calendar but was never considered on the Senate floor. The Senate-passed version of H.R. 2765 , however, did not include funding to establish a scholarship program for low-income students. It did include funding for school improvement for public schools and public charter schools in the District of Columbia. The House-passed version of H.R. 2765 did not include funding for these specific purposes.", "The DC School Choice Incentive Act, which created the DC Opportunity Scholarship Program, was authorized and funded by the Consolidated Appropriations Act, 2004 ( H.R. 2673 ; P.L. 108-199 ), which included the FY2004 District of Columbia appropriations bill. Specific funding for the DC OSP was provided under the header \"Federal Payment for School Improvement,\" which also included funding for DCPS for the improvement of public education and the SEO for the expansion of public charter schools. This approach, commonly known as the three-pronged approach to funding elementary and secondary education in the District of Columbia, was initially suggested by Mayor Williams when he asked for federal assistance for public education in the District of Columbia. The proposal was supported by the Administration and many Members of Congress. While concerns were raised during consideration of the bill that only the DC OSP\u2014not school improvement funding for DCPS or public charter schools\u2014was authorized for five years, each year the DC OSP has been funded, the federal government has also provided funds to support school improvement in DC public schools and DC public charter schools.", "DC School Choice Incentive Act (FY2004 Appropriations)", "The DC School Choice Incentive Act of 2003 ( P.L. 108-199 , Title III) authorized the DC OSP to provide the families of low-income students, particularly students attending elementary or secondary schools identified for improvement, corrective action, or restructuring under the ESEA, as amended by the No Child Left Behind Act (NCLB; P.L. 107-110 ), with expanded opportunities to enroll their children in schools of choice located in the District of Columbia. The program was authorized for FY2004 through FY2008 as a five-year demonstration program. An appropriation of $14 million was specified for FY2004; appropriations for the subsequent fiscal years were for \"such sums as may be necessary.\"", "Under the DC OSP, the Secretary was permitted to award grants to eligible entities for a period of not more than five years to make scholarships to eligible students. Thus, the eligible entity functions as the local program administrator in practice. An eligible entity was defined as an educational entity of the DC government, a nonprofit organization, or a consortium of nonprofit organizations. In selecting one or more eligible entities to operate the program, the Department of Education (ED) was required to give priority to eligible entities who would most effectively give priority to eligible students who, in the school year preceding the school year for which the student is seeking a scholarship, were attending a school that was identified for improvement, corrective action, or restructuring under the ESEA. In addition, ED was required to give priority to eligible applicants that would target available resources to students and families who lacked the financial resources to take advantage of school choice options and that would provide students and families with the widest range of school options. The eligible entity was permitted to use up to 3% of the funds it receives for administrative expenses.", "Student eligibility for the program was open to children from families with incomes not exceeding 185% of the poverty line who were entering kindergarten through 12 th grade or who turned five years old by September 30 of the school year for which scholarships are awarded. Eligible students could apply to receive a scholarship valued at up to $7,500 to cover the costs of tuition, fees, and transportation expenses associated with attending participating private elementary and secondary schools located in the District of Columbia. Scholarships provided to students were considered assistance to the student (as opposed to the school) but were not treated as income of the parents for federal tax purposes or for determining eligibility for other federal programs. Students were required to reapply each year to participate in the program. Scholarship recipients remained eligible to continue to participate in the scholarship program, as long as their family income did not exceed 200% of the poverty level. Students enrolled in public schools identified for school improvement, corrective action, or restructuring under Title I-A of the ESEA were given priority in receiving scholarships; however, all students meeting program eligibility criteria were eligible for scholarships regardless of whether they were previously enrolled in a public or private school.", "In general, private schools participating in the DC OSP were prohibited from discriminating against program participants or applicants on the basis of race, color, national origin, religion, or gender. The latter prohibition did not apply, however, to single sex schools that were operated by, supervised by, controlled by, or connected to a religious organization to the extent that nondiscrimination based on gender would be inconsistent with the religious tenets or beliefs of the school. In addition, nothing in the DC School Choice Incentive Act allowed participating schools to alter or modify the provisions of the Individuals with Disabilities Education Act. With respect to sectarian private schools that accepted scholarship students, nothing in the School Choice Incentive Act prohibited the school from hiring in a manner consistent with the school's religious beliefs or required the school to alter its mission or remove religious symbols from its building. All participating private schools were required to comply with requests for data and information with respect to program evaluations required by the DC School Choice Incentive Act.", "The DC School Choice Incentive Act required the DC OSP to be evaluated annually. The Secretary and Mayor were required to jointly select an independent entity to conduct these evaluations. The independent entity evaluating the program was required to measure the academic achievement of participating students, use the same measurement to assess participating students as is used to assess students in DC public schools, and work with the eligible entity to ensure that the parents of all students who apply for a scholarship, regardless of whether a scholarship is received, agree that the student will participate in measurements conducted by the independent evaluator for the period for which the student applied for or received a scholarship. The evaluation was required to compare the academic achievement of scholarship recipients with students in the same grades attending DC public schools and the eligible students who applied for but did not receive a scholarship. The evaluation also had to examine the extent to which the program expanded choice options for parents; the reasons parents chose to participate in the program; retention rates, dropout rates, graduation rates, and college admissions rates for participating students with students of similar backgrounds who did not participate in the scholarship program; the impact of the program on students and public elementary and secondary schools in DC; the safety of the participating private schools attended by scholarship recipients compared with schools attended by students who were not participating in the DC OSP; and other issues as designated by the Secretary.", "FY2004 Appropriations", "The Consolidated Appropriations Act, 2004 ( P.L. 108-199 ), which authorized the DC School Choice Incentive Act, also appropriated funds for the DC OSP as well as funds for DCPS and the SEO for DC public charter schools. P.L. 108-199 specified that up to $1 million of the funds appropriated for the DC OSP could be used to administer and fund assessments. There were also requirements that applied specifically to DCPS.", "FY2005 Appropriations", "The District of Columbia Appropriations Act, 2005 ( P.L. 108-335 ) provided appropriations for the DC OSP, DCPS, and the SEO for DC public charter schools. While several statutory requirements were attached to the funding provided to charter schools and DCPS, with respect to the funds appropriated for the DC OSP, the law required that up to $1 million could be used to administer and fund required assessments.", "FY2006 Appropriations", "The Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies Appropriations Act, 2006 ( P.L. 109-115 ) provided funding for the DC OSP, DCPS, and the SEO for DC public charter schools for FY2006. With respect to the DC OSP, it included a provision that permitted up to $1 million provided for scholarships to be used to administer and fund assessments.", "FY2007 Appropriations", "The Revised Continuing Appropriations Resolution, 2007 ( P.L. 110-5 ) authorized a long-term continuing resolution for FY2007 appropriations. This provided funding for the DC OSP, DCPS, and the SEO for DC public charter schools for FY2007. In addition, under the long-term continuing resolution, the provisions included in the FY2006 appropriations act relevant to the DC School Choice Incentive Act remained in effect with the addition of a new requirement related to charter schools.", "FY2008 Appropriations", "The Consolidated Appropriations Act, 2008 ( P.L. 110-161 ) provided funding for the DC OSP, DCPS, and the SEO for DC public charter schools for FY2009. With respect to the DC OSP, it permitted up to $1.8 million of the funds provided for the scholarship program to be used to administer and fund assessments.", "FY2009 Appropriations", "The Omnibus Appropriations Act, 2009 ( P.L. 111-8 ) provided funding for the DC OSP, DCPS, and the SEO for DC public charter schools. With respect to the DC OSP, it added additional requirements for schools to be eligible to participate in the program and included language limiting the appropriation of funds for the program beyond FY2010. P.L. 111-8 added two requirements for participating private schools. First, participating private schools were required to have and maintain a valid certificate of occupancy issued by the District of Columbia. Second, a core subject matter teacher of scholarship recipients was required to hold a four-year bachelor's degree. Statutory language did not require that the bachelor's degree be held in the subject area of instruction. That is, it was not required, for example, that only a teacher with a four-year bachelor's degree in English can teach English classes for scholarship recipients. ", "P.L. 111-8 further specified that the use of any funds in any act for scholarships after the 2009-2010 school year shall be available only upon reauthorization of the program and the adoption of legislation by the District of Columbia approving such reauthorization. Senator Ensign (NV) offered an amendment ( S.Amdt. 615 ) to strike the requirement that additional funding could only be provided to the program if the program was reauthorized by Congress and subsequently approved by the District of Columbia. He noted that other federal education programs, including the Higher Education Act, continued to receive federal funding despite having expired authorizations. Further, he argued that the final program evaluation had not been completed and ending the program after the 2009-2010 school year would force students, including those who had been scholarship recipients for several years, to find new schools. The amendment failed to pass by a vote of 39-58. ", "The explanatory statement accompanying P.L. 111-8 specified that appropriations provided for opportunity scholarships in the FY2009 Omnibus Appropriations Act could only be used to provide scholarships for students currently participating in the program . That is, the funds could not be used to expand program participation. The explanatory statement also directed the Chancellor of DCPS to take steps to minimize the potential disruption and ensure the smooth transition for any scholarship recipients seeking to enroll in the public school system as a result of changes made to the DC OSP after the 2009-2010 school year.", "FY2010 Appropriations", "The Omnibus Appropriations Act, 2010 ( P.L. 111-117 ) provided funding for the DC OSP, DCPS, and the SEO for DC public charter schools. With respect to the DC OSP, it did not apply the provision in P.L. 111-8 that required that DC OSP funds be available only upon reauthorization of the program and the adoption of legislation by the District of Columbia to the FY2010 appropriations. Of the funds available for the DC OSP, the law specified that up to $1 million could be used to administer and fund assessments and up to $1 million could be used to administer student testing to allow for comparisons of the academic performance of participating private schools enrolling scholarship participants. Consistent with the previous year's appropriations language, P.L. 111-117 maintained that the DC OSP funds could only be used to provide opportunities to students who received scholarships in the 2009-2010 school year. ", "P.L. 111-117 also added additional requirements for participating private schools. Participating private schools were required to be in compliance with accreditation and other standards under the District of Columbia compulsory school attendance laws that applied to educational institutions that are not affiliated with DCPS. In addition, the Secretary was required to submit a report to Congress by June 15, 2010, that provided information on the academic rigor and quality of each participating school. To obtain comparable data for the report, the Secretary was required to ensure that all eligible scholarship recipients participated in the same academic performance assessments as students enrolled in DCPS during the 2009-2010 school year. The Secretary was also required to ensure that at least two site inspections are conducted at each participating school on an annual basis.", "Scholarships for Opportunity and Results (SOAR) Act", "The SOAR Act was authorized under Division C of the Department of Defense and Full-Year Continuing Appropriations Act, 2011 ( P.L. 112-10 ). The SOAR Act replaced the DC School Choice Incentive Act, reauthorized the DC OSP, and authorized appropriations for DC public schools and DC public charter schools for FY2012 through FY2016. Many of the provisions included in the SOAR Act continue to be reflected in current law (see previous discussion of current law provisions), so they are not discussed in detail in this section. Subsequent acts that amended the SOAR Act are discussed below, including information on the changes they made to the SOAR Act. ", "FY2011 Appropriations ", "The Department of Defense and Full-Year Continuing Appropriations Act, 2011 ( P.L. 112-10 ) provided FY2011 appropriations for the DC OSP, DC public schools, and DC public charter schools. It specified that up to $1 million could be used to administer and fund assessments and also specified that no funds could be used to administer student testing to allow for comparisons of the academic performance of participating private schools enrolling scholarship participants. In addition, the act removed the requirement that DC OSP funds be used to provide scholarships only to students who had received scholarships during the 2009-2010 school year. It further specified that scholarships could be provided to eligible students regardless of whether they had received a scholarship in any prior school year. The act did continue to require the Secretary to submit a report, detailing the academic rigor and quality of each participating private school and the associated assessments that were included in the FY2010 appropriations. Finally, the act changed the requirement that the Secretary ensure that site visits were conducted at least twice annually at participating private schools to requiring that the Secretary ensure that site visits are conducted annually. ", "FY2012 Appropriations", "The Consolidated Appropriations Act, 2012 ( P.L. 112-74 ) provided FY2012 appropriations for the three parts of the SOAR Act. The act did not include any DC OSP specific provisions beyond appropriating funds for the program. ", "SOAR Technical Corrections Act", "The SOAR Technical Corrections Act (SOAR TCA; P.L. 112-92 ) made changes to three sections of the SOAR Act. First, with respect to the Section 3007 requirement that teachers of core academic subjects who are teaching participating students must hold a baccalaureate degree or its equivalent, the SOAR TCA specified that the term \"core academic subjects\" was to be defined as it was in the ESEA Section 9101(11). Second, the SOAR TCA added requirements to Section 3008 regarding the administration of nationally norm-referenced standardized tests. The act required IES to administer the relevant assessment to students participating in the evaluation, unless the student is attending a participating private school that is administering the same assessment. If the participating private school is administering the assessment to an eligible student, it must make the assessment results available to the Secretary as necessary for the evaluation of the DC OSP. Finally, the SOAR TCA amended the DC OSP evaluation requirements included in Section 3009. With respect to the responsibilities of the Institute of Education Sciences, requirements were added to align the use of a grade appropriate, nationally norm-referenced standardized test with the new provisions added to Section 3008 of the SOAR Act by the SOAR TCA. The SOAR TCA also added language to the provision that IES was required to work with the eligible entity to ensure that each student who applied for a scholarship, regardless of whether a scholarship was received, and the parents of such student agree to participate in the measurements given by the IES to specify that the provision applied only to students asked to participate in the measurements by IES.", "FY2013 Appropriations", "The Consolidated and Further Continuing Appropriations Act, 2013 ( P.L. 113-6 ) provided FY2013 appropriations for the three parts of the SOAR Act. The act did not include any DC OSP specific provisions beyond appropriating funds for the program.", "FY2014 Appropriations", "The Consolidated Appropriations Act, 2014 ( P.L. 113-76 ) provided FY2014 appropriations for the three parts of the SOAR Act. The act did not include any DC OSP specific provisions beyond appropriating funds for the program.", "FY2015 Appropriations", "The Consolidated and Further Continuing Appropriations Act, 2015 ( P.L. 113-235 ) provided funding for the three parts of the SOAR Act for FY2015. It also specified that of the funds provided for the DC OSP, $3 million had to be used for administrative expenses, student academic assistance, and evaluation.", "DC OSP School Certification Requirements Act", "Section 917 of the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ), amended the SOAR Act to include new requirements that private schools have to meet to participate in the DC OSP, including accreditation requirements for the first time. A participating private school was required to be provisionally or fully accredited by a national or regional accrediting agency that is recognized in the DC School Reform Act of 1995 or any other body deemed appropriate by the Office of the State Superintendent of Education for the purpose of accrediting an elementary or secondary school. However, if the private school was participating in the DC OSP as of the day prior to the enactment of the DC OSP School Certification Requirements Act and did not meet the aforementioned accreditation requirement, the school could remain eligible to participate in the DC OSP if not later than one year after such date of enactment, the school had to pursue accreditation from one of the aforementioned accrediting agencies and not later than five years after such date of enactment be provisionally or fully accredited by such accrediting agency. The eligible entity was permitted to grant a one-time, one-year extension of this requirement to a participating private school that could demonstrate that it would be awarded accreditation prior to the end of the one-year extension period. A private school that was not participating in the DC OSP prior to the enactment of such act was not permitted to participate in the program unless it was actively pursuing provisional or full accreditation from one of the aforementioned accrediting agencies and met all of the other requirements for participating private schools. The eligible entity was directed to assist the parents of a participating eligible student in identifying, applying to, and enrolling in another participating private school if the student was enrolled in a participating private school that could not meet the requirements of the act or was enrolled in a participating private school that ceases to participate in the DC OSP.", "The eligible entity was also required to ensure that each participating private school submits within five years after the date of enactment of the DC OSP School Certification Requirements Act, a certification that the school has been awarded provisional or full accreditation or has received a one-year accreditation extension from the eligible entity.", "In addition to the accreditation requirements, all participating public schools were required to conduct criminal background checks on school employees who have direct and unsupervised interaction with students. The participating private schools were also required to comply with all data and information requests regarding the DC OSP reporting requirements.", "FY2016 Appropriations", "The Consolidated Appropriations Act, 2016 ( P.L. 114-113 ) provided funding for all three parts of the SOAR Act for FY2016. With respect to the DC OSP, the statutory language also required that the Secretary follow the priorities for awarding scholarships and make them available to eligible students, including those who were not offered a scholarship during any previous school year. Further, the law required that $3.2 million be used for administrative expenses, student academic assistance, and evaluation.", "SOAR Funding Availability Act", "The SOAR Funding Availability Act, Section 162 of the Further Continuing and Security Assistance Appropriations Act, 2017 ( P.L. 114-254 ), amended the SOAR Act in multiple ways. First, it amended Section 3007 of the SOAR Act to require that any funds appropriated for the DC OSP that remained available on the date of enactment of the SOAR Availability Act and any remaining funds appropriated on or after the date of enactment by the first day of the subsequent fiscal year had to be used by the eligible entity administering the program in at least one of two ways. First, the eligible entity was required to use at least 95% of these funds to provide additional scholarships or to increase the amount of the scholarships during such year. Second, the eligible entity was permitted to use not more than 5% of such funds for administrative expenses, parental assistance, or tutoring. If funds were used for the latter purposes, the funds had to be in addition to any funds that the eligible entity was already required to use for those purposes during that year. Further, the law specified that all funds appropriated for scholarships at any time would remain available until expended.", "FY2017 Appropriations and SOAR Reauthorization Act", "The Consolidated Appropriations Act, 2017 ( P.L. 115-31 ) provided FY2017 appropriations for the DC OSP, DC public schools, and DC public charter schools. It also reauthorized the SOAR Act. The law continued the same requirements regarding the following of priorities and awarding scholarships to eligible children as well as using $3.2 million for administrative expenses, parental assistance, student academic assistance, and evaluation.", "The law made numerous changes with respect to reauthorizing the SOAR Act. As these changes are included in the previous discussion of current law provisions, this discussion provides only an overview of the changes made to the SOAR Act by the SOAR Reauthorization Act.", "The law repealed the DC Opportunity Scholarship Program School Certification Requirements Act included in P.L. 114-113 . The SOAR Reauthorization Act included requirements related to provisions that participating private schools must meet to participate in the DC OSP, including provisions related to accreditation, background checks, and complying with data and information requests.", "The law added prohibitions on the imposition of limits on eligible students participating in the DC OSP. For example, the Secretary was prohibited from preventing an otherwise eligible student from participating in the DC OSP based on the type of school the student previously attended; whether a student previously received a scholarship or participated in the program, regardless of how many years a student received but did not use a scholarship; and whether a student previously participated in a DC OSP evaluation control group. The law limited the number of site visits at each participating school to one visit. The law required the eligible entity to ensure the financial viability of participating public schools in which 85% or more of the enrolled students were using a scholarship to attend. The law added new requirements related to internal fiscal and quality controls and financial reporting for the eligible entity serving as the local program administrator. The law updated references to the District of Columbia's accountability system used to comply with the requirements of Title I-A of the ESEA and clarified that eligible students who had previously attended a private school could still receive a scholarship. The law also added a definition of \"core subject matter\" and dropped the reference to \"core academic subjects,\" as the definition was no longer included in the ESEA. The law included accreditation requirements for participating private schools. The law specified that the eligible entity must treat a participating eligible student who received, but did not use, a scholarship in a previous year as a renewal student and not as a new applicant. The law made some changes to administrative expenses and uses of funds. For example, the law changed the requirement that not more than 3% of the funds available for the DC OSP could be reserved for administrative expenses to requiring $2 million to be made available each fiscal year for administrative expenses and parental assistance. The law made numerous changes to the DC OSP program evaluation requirements, including with respect to the duties of the Secretary and Mayor, the duties of IES, and the issues to be evaluated. For example, the law amended the requirement that the Secretary ensure that the DC OSP evaluation was conducted \"using the strongest possible research design\" to require that an \"acceptable quasi-experimental research design\" be used. The law included provisions prohibiting the disclosure of personal information. It also included transition provisions requiring the termination of previous evaluations and provisions regarding new evaluations. A provision was also added requiring the Mayor to ensure IES has all the information needed to carry out the evaluation. The law gave the Secretary the authority to withhold funds from DC public schools or DC public charter schools under certain circumstances and included new requirements regarding the distribution of funds to public charter schools. The law required the Secretary and the Mayor to review their MOU in specific ways.", "FY2018 Appropriations", "The Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) provided FY2018 appropriations for the DC OSP, DC public schools, and DC public charter schools. It included the same requirements as the FY2017 act regarding priorities and the awarding of scholarships to eligible children and using $3.2 million for administrative expenses, parental assistance, student academic assistance, and evaluation.", "FY2019 Appropriations", "The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provided FY2019 appropriations for the DC OSP, DC public schools, and DC public charter schools. It included the same requirements as the FY2017 act regarding priorities and the awarding of scholarships to eligible children. It allowed up to $1.2 million of the funds provided for the DC OSP to be used for administrative expenses, parental assistance, and student academic assistance, and up to $500,000 of the funds provided for the DC OSP to be used for evaluations. "], "subsections": []}]}]}]}}
{"id": "R43823", "title": "The National Popular Vote (NPV) Initiative: Direct Election of the President by Interstate Compact", "released_date": "2019-05-09T00:00:00", "summary": ["The National Popular Vote (NPV) initiative proposes an agreement among the states, an interstate compact that would effectively achieve direct popular election of the President and Vice President without a constitutional amendment. It relies on the Constitution's grant of authority to the states in Article II, Section 1 to appoint presidential electors \"in such Manner as the Legislature thereof may direct.... \" Any state that joins the NPV compact pledges that if the compact comes into effect, its legislature will award all the state's electoral votes to the presidential ticket that wins the most popular votes nationwide, regardless of who wins in that particular state. The compact would, however, come into effect only if its success has been assured; that is, only if states controlling a majority of electoral votes (270 or more) join the compact.", "By early May 2019, 14 states and the District of Columbia had joined the compact. After early momentum\u2014eight states and the District of Columbia joined the NPV Compact between 2007 and 2011\u2014the pace of state accessions slowed through 2018. Since then, four additional states joined, bringing the total number of electoral votes controlled by NPV member states to 189. During the same period, legislation to join the compact had been introduced during the current session in at least one chamber of the legislature in 14 additional states that control an additional 150 electors.", "The NPV initiative emerged following the presidential election of 2000, in which one ticket gained an electoral vote majority, winning the presidency, but received fewer popular votes than its opponents. NPV grew out of subsequent discussions among scholars and activists about how to avoid similar outcomes in the future and to achieve direct popular election.", "Proponents of NPV assert that it would guarantee the presidential candidates who win the most popular votes nationwide will always win the presidency; that it would end the inequities of the general ticket/winner-take-all system of awarding electoral votes; and that candidates would extend their focus beyond winning the \"battleground states,\" campaigning more widely and devoting greater attention to issues of concern to other parts of the country. They further assert that NPV would accomplish this while avoiding the exacting standards set for the proposal and ratification of constitutional amendments. Opponents argue that NPV would undermine the authority of states under the Constitution and the Founders' intention that presidential elections should be both national and federal contests; that it is an admitted \"end run\" around the Constitution that would circumvent the amendment process; and that it might actually lead to more disputed presidential elections characterized by politically contentious state recounts.", "The NPV has also been debated on legal grounds. Some observers maintain that it must be approved by Congress, because it is an interstate compact that would affect key provisions of constitutional presidential election procedures. NPV Inc., the organization managing the initiative's advocacy campaign, responds that congressional approval is not necessary because NPV concerns the appointment of electors, a subject that falls within state constitutional authority, and that the Supreme Court has previously rejected arguments that similar compacts would impair the rights of nonmember states. Other critics claim that NPV might violate the Voting Rights Act by diluting minority voter influence and avoiding the recently invalidated preclearance requirement for election procedure changes in covered jurisdictions. In response, NPV Inc. has asserted that the compact is \"entirely consistent with the goal of the Voting Rights Act.\"", "This report monitors the NPV's progress in the states and will identify and analyze further developments as warranted."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction1", "paragraphs": ["Since its founding in 2006, the National Popular Vote (NPV) initiative has promoted an agreement among the states, an interstate compact that would effectively establish direct popular election of the President and Vice President without a constitutional amendment, while retaining the structure of the electoral college system.", "The United States is unique among \"presidential\" republics by providing an indirect election to choose its chief executive. The President and Vice President of the United States are selected not by registered voters, but by the electoral college, electors appointed in the states \"in such Manner as the Legislature thereof may direct.... \" Alexander Hamilton, who was \"present at the creation\" of the Constitution in 1787, commented favorably on the electoral college system in The Federalist :", "The mode of appointment of the Chief Magistrate of the United States is almost the only part of the system, of any consequence, which has escaped without severe censure, or which has received the slightest mark of approbation from its opponents.... I venture somewhat further, and hesitate not to affirm that if the manner of it be not perfect, it is at least excellent. It unites in an eminent degree all the advantages the union of which was to be wished for.", "Notwithstanding Hamilton's endorsement, the first proposal to change the electoral college system by constitutional amendment was introduced as early as 1800, and since that time more than 700 proposals to reform or eliminate the college have been introduced in Congress. Reform advocates have long focused on the fact that it does not provide for direct democratic election, that less-populous states are afforded an arithmetical advantage due to the assignment of two electors to each state, regardless of population, and that the winner-take-all system makes it possible for candidates to win an electoral college majority and the presidency, while gaining fewer votes than their principal opponents in the popular election.", "Between 1949 and 1979, Congress considered amendments to reform the electoral college, or replace it with direct popular election, in committee and on the floor of both chambers. Proposed amendments must, however, meet the requirements of the Constitution's Article V, which calls for two-thirds approval by both houses of Congress, and ratification by three-fourths of the states; to date, no electoral college reform proposal has met these requirements.", "Proponents of the National Popular Vote initiative contend that their plan will achieve direct popular election while circumventing the requirements of Article V, and will guarantee that the popular vote winners will always be elected President and Vice President. "], "subsections": []}, {"section_title": "The Electoral College in Brief6", "paragraphs": ["The fundamentals of the electoral college system were established by Article II, Section 1 of the U.S. Constitution, and subsequently revised by the Twelfth Amendment. The Constitution's minimal provisions have been complemented over the past two centuries by a range of federal and state laws, political party procedures, and enduring political traditions, leading to the system as it exists today. The salient features of the contemporary system are detailed below.", "The electors are collectively known as the electoral college; although this phrase does not appear in the Constitution, it gained currency in the early days of the republic, and was recognized in federal law in 1845. The electoral college has no continuing existence; its sole purpose is to elect the President and Vice President. Each state is allocated a number of electors equal to the combined total of its U.S. Senate and House of Representatives delegations. The District of Columbia is also allocated three electors. At present, the total is 538, reflecting the combined size of the Senate (100 Members), the House (435 Members), and the District of Columbia electors. Any person may serve as an elector, except Senators and Representatives, or any other person holding an office of \"trust or profit\" under the United States.", "Article II, Section 1 of the Constitution empowers the states to \"appoint [electors], in such Manner as the Legislature thereof may direct.... \" This grant of authority provides the constitutional basis claimed for the NPV initiative. In practice, all states currently provide for popular election of their electoral college delegations. Candidates for the office of elector are nominated by political parties and other groups on the presidential ballot in each state. In most cases, the candidates for the office of elector are nominated by the state party committee or the party's statewide convention. The winning presidential nominees must gain a national majority of 270 or more electoral votes, out of the 538 total, in order to be elected. If no ticket of candidates attains a majority, then the House of Representatives elects the President, and the Senate the Vice President, in a procedure known as contingent election.", "Candidates for the office of elector are selected by their respective political parties. They are expected to vote for the presidential and vice presidential candidates to whom they are pledged. Some states seek to require them to so vote by law or other means, but most constitutional scholars hold that the electors remain free agents under the Constitution, and that they may vote for any person they choose. On rare occasions, an elector will vote for a different candidate, or abstain from casting a vote for any candidate; he or she is known as a \"faithless elector.\"", "The goal of presidential campaigns under the existing system is to win by carrying states that collectively cast a majority of electoral votes. Political parties and presidential campaigns tend to focus on states that are closely contested (widely referred to as \"battleground\" states), or that have large delegations of electoral votes, or both. Winning a majority of the more populous and/or battleground states is considered crucial to obtaining the necessary electoral vote majority.", "In 48 states and the District of Columbia, the presidential/vice presidential ticket winning the most popular votes (a plurality or more) in that state is awarded all its electoral votes. That is to say, the winning party's entire ticket of electors is elected. This is referred to as the \"winner-take-all\" or \"general ticket\" system.", "Presidential Election Day is set by law for Tuesday after the first Monday in November every fourth year succeeding the election of President and Vice President. On Presidential Election Day, voters cast one vote for the candidates they support. They are, however, actually voting for the state political party \"ticket\" of electors supporting those presidential and vice presidential candidates.", "Presidential electors assemble on the first Monday after the second Wednesday in December following the general election. They meet in their respective states, not collectively, and cast separate votes by ballot for the President and Vice President. After the electors vote, the results are sent by the states to Congress and various other federal authorities. On January 6 of the year following a presidential election, Congress meets in a joint session to count the electoral votes and make a formal declaration of which candidates have been elected President and Vice President."], "subsections": []}, {"section_title": "The National Popular Vote Initiative: Background22", "paragraphs": ["A range of factors contributed to the emergence of the National Popular Vote initiative in the first decade of the 21 st century. A major source was frustration by reform advocates after three decades of failed attempts to secure congressional approval for a direct popular election amendment. A more immediate spur was the contentious and disputed presidential election of 2000, which is regarded as having been a major factor contributing to the development of the NPV proposal. "], "subsections": [{"section_title": "Electoral College Reform, 1948-1979: Three Decades of Unsuccessful Efforts to Propose a Constitutional Amendment", "paragraphs": ["One of the factors cited for the emergence of the NPV initiative has been the exacting requirements set by the Constitution for amendments, in this case, a direct popular election constitutional amendment. As noted previously, approval by two-thirds of Members present and voting is required in both houses when Congress proposes an amendment, followed by ratification by three-fourths of the states, 38 at present, usually within a seven-year period specified by Congress. Between 1948 and 1979, Congress debated electoral college reform at length; throughout this time, hundreds of reform proposals were introduced in both chambers. They generally centered on one of two courses: \"end it\" by eliminating the entire electoral college system and establishing direct popular election, or \"mend it\" by reforming its more controversial provisions. Between 1948 and 1979, proposed amendments were the subject of hearings in the Senate and House Judiciary Committees on 17 different occasions, while electoral college reform was debated in the Senate on five occasions and twice in the House during this period. Proposals were approved by the necessary two-thirds majority twice in the Senate and once in the House, but never in the same Congress.", "Following the 1979 defeat of a direct popular election amendment on the Senate floor, and the retirement or defeat of prominent congressional advocates, the question of electoral college reform largely disappeared from public attention and Congress's legislative agenda. Although Senators and Representatives continued to introduce reform proposals, few received action beyond routine committee referral, and in time, the number of measures introduced dropped to zero. Even after the presidential elections of 2000 and 2016, in which the winner of the electoral vote won fewer popular votes than his opponent (a so-called \"misfire\") , there was little evidence that Congress was prepared to consider an electoral college reform amendment. ", "Proposals to replace the electoral college system with direct popular election continued to be introduced, but in dwindling numbers as the years passed. No proposal for direct popular election was introduced in the 113 th Congress. By comparison, 41 direct popular election or electoral college reform amendments were proposed in the 95 th Congress (1977-1978). Following the 2016 election, however, four constitutional amendments introduced late in the 114 th Congress proposed eliminating the electoral college and replacing it with direct election. To date in the 116 th Congress, three amendments to establish direct popular election by constitutional amendment have been introduced, but no action beyond committee referral has been taken on them."], "subsections": []}, {"section_title": "Survey Research: Trends in Public Support for Direct Popular Election", "paragraphs": ["Until recently, survey research findings showed public support for presidential election reform through direct popular election by sizable margins. As early as 1967, the Gallup Poll reported that 58% of respondents supported direct election, compared with 22% who favored retaining the electoral college. More recently, Gallup's 2013 survey recorded that 63% of respondents favored an amendment providing for direct election, while 29% favored retention of the electoral college. Following the 2016 election, however, overall support for direct election was measured at 49% in favor to 47% opposed. It is arguable that the change in public attitudes was influenced by the 2016 election results, in which the Republican nominees won the election with a majority of electoral votes, but fewer popular votes than their Democratic opponents. For instance, Gallup reported a shift to greater support for the electoral college system by respondents who identified themselves as \"Republican\" or \"Lean Republican.\" Conversely, already high levels of support for direct popular election among respondents who identified themselves as \"Democratic\" or \"Lean Democratic\" rose still further in the post-2016 election Gallup Poll.", "To date, CRS has identified one survey that was specifically designed to measure public commitment to the NPV initiative. A March 27, 2019, Politico/Morning Consult poll posed relevant questions on the presidential election process and the NPV compact. The first question, which presented a general outline of the existing electoral college system and the generic alternative of direct popular election, reported that respondents preferred direct election by 50% to 34% for retaining the electoral college, and 16% reporting \"Don't know/No opinion.\" The next question explained the proposed NPV compact and asked respondents' preference for NPV or the electoral college method. Although the level of support for NPV was lower than that measured for generic direct popular election, a plurality of respondents to this question favored the \"National Popular Vote Interstate Compact\" by a plurality of 43% in favor, to 33% opposed and 23% who reported \"Don't know/No opinion.\""], "subsections": []}, {"section_title": "The Elections of 2000 and 2016 and Electoral College Reform", "paragraphs": ["The disputed presidential election of 2000 was arguably a catalyst for new thinking on electoral college reform . Following a closely contested campaign, Republican candidates George W. Bush and Richard Cheney were elected over Democratic nominees Al Gore Jr. and Joseph Lieberman following a bitter dispute over election results in Florida tha t was ultimately decided by the Supreme Court . The high court's decision left Bush and Cheney with a narrow plurality in Florida of 537 popular votes and a similarly narrow electoral college majority of 30 states with 271 electoral votes, while their Democratic opponents took 20 states and the District of Columbia with 266 electoral votes (one District of Columbia elector cast a blank ballot in protest against the outcome) . It was the first election since 1888 in which the candidates elected uncontestably won fewer popular votes than their principal opponents : the Gore / Lieberman Democratic ticket gained 50,992,335 popular votes to 50,455,156 for Bush / Cheney.", "The se election results generated considerable discontent with the system. Some critics argued for a constitutional amendment, but the 107 th Congress faced a heavy legislative workload throughout this period, which initially included enactment of President George W. Bush's legislative program and was later expanded to urgent responses to the terrorist attacks of September 1 1, 2001 . Rather than focus on the lengthy process associated with consideration of a constitutional amendment, Congress focused on legislati ve remedies. The Help America Vote Act of 2002, passed in response to the numerous irregularities in voting systems and procedures revealed by the 2000 election, mandated election administration reforms and v oting system technology enhancements (funded in part by federal grants to the states) intended to ensure accurate and timely voting and vote tabulation in future elections.", "In 2016, the presidential election was again won by nominees who gained a majority of electoral votes but fewer popular votes than their major party opponents. Although proposals to amend the Constitution to provide direct popular election were introduced in response to this occurrence late in the 114 th Congress , and again in the 115 th Congress, the 2016 results did not result in the degree of c ontroversy a nd activism that followed the electoral college \"misfire \" of 2000. T he following factor may have contributed to this situation : i n 2000, a shift in Florida's electoral votes from Bush/Cheney to Gore/Lieberman would have changed the election result; by comparison, in 2016, a shift in the state with the closest vote margin, Michigan , would not have altered the election. "], "subsections": []}, {"section_title": "Bypassing Constitutional Amendment Procedures to Attain Direct Popular Election: Emergence of the National Popular Vote Concept", "paragraphs": ["While the 2000 election's \"misfire\" did not result in consideration of a constitutional amendment, it did prompt considerable study and investigation into new approaches to electoral reform among scholars of the presidential election process and political activists. Law professors Robert W. Bennett of Northwestern University, Vikram Amar of the University of California-Davis, and Akhil Amar of Yale University School of Law are generally credited as the intellectual godparents of the concept that ultimately evolved into the National Popular Vote Interstate Compact, which relies on the Constitution's broad grant of power to each state to \"appoint, in such Manner as the Legislature thereof may direct [emphasis added], a Number of Electors, equal to the whole Number of Senators and Representatives to which the State may be entitled in the Congress.\"", "Project FairVote, an issue advocacy group self-described as a nonprofit, nonpartisan \"501(c)(4)\" organization, appears to have been an incubator of the NPV concept. FairVote has supported NPV for \"over a decade,\" and was an early supporter of National Popular Vote Inc., the plan's official advocacy group; moreover, longtime FairVote board members Robert Richie and the late Representative John B. Anderson were early supporters of the National Popular Vote initiative and contributors to its manifesto, Every Vote Equal . "], "subsections": []}]}, {"section_title": "The National Popular Vote (NPV) Initiative49", "paragraphs": ["As noted previously, the NPV initiative was the ultimate result of the various studies and proposals offered following the presidential election of 2000. "], "subsections": [{"section_title": "How the NPV Would Work", "paragraphs": ["The NPV initiative seeks to establish direct popular election of the President and Vice President through an interstate compact, rather than by constitutional amendment. Ideally, under the compact's provisions, legislatures of the 50 states and the District of Columbia would pass legislation binding the signatories to appoint presidential electors committed to the presidential/vice presidential ticket that gained the most votes nationwide . If all 50 states and the District of Columbia were compact members, this would deliver a unanimous electoral college decision for the candidates winning a plurality of the popular vote.", "Specifically, the plan calls for an agreement among the states, an interstate compact effected through state legislation, in which the legislature in each of the participating states agrees to appoint electors pledged to the candidates who won the nationwide popular vote . State election authorities would count and certify the popular vote in each state, which would be aggregated and certified as the \"nationwide popular vote.\" The participating state legislatures would then choose the slate of electors pledged to the \"nationwide popular vote winner,\" notwithstanding the results within their particular state s . To ensure success, the initiative would come into effect only if states whose total electoral votes equal or exceed the constitutional majority of 270 were to approve the plan.", "If the nationwide popular vote were effectively tied, the states would be released from their commitment under the compact, and could choose electors who represented the presidential ticket that gained the most votes in each particular state.", "One novel NPV provision would enable the presidential candidate who won the national popular vote to fill any vacancies in the electoral college with electors of his or her own choice.", "States would retain the right to withdraw from the compact, but if a state chose to withdraw within six months of the end of a presidential term, the withdrawal would not be effective until after the succeeding President and Vice President had been elected."], "subsections": []}, {"section_title": "Managing the NPV Campaign: National Popular Vote Inc.", "paragraphs": ["The NPV advocacy effort is managed by National Popular Vote Inc., a \"501(c)(4)\" nonprofit corporation established in California in 2006 by Barry Fadem, an attorney specializing in initiative and referendum law, and John R. Koza, Ph.D., an automated systems scientist and entrepreneur. As a 501(c)(4) entity, it is permitted to engage in political activity in furtherance of its goal, without forfeiting its tax-exempt status, so long as this is not its primary activity. NPV states on its website that its \"specific purpose is to study, analyze and educate the public regarding its proposal to implement a nationwide popular election of the President of the United States.\" Dr. Koza serves as chairman of NPV Inc., and Mr. Fadem serves as president. NPV's advisory board includes former Senators and Representatives of both major political parties.", "In 2006, National Popular Vote Inc. published a detailed handbook, Every Vote Equal: A State-Based Plan for Electing the President by National Popular Vote . This publication, in its fourth edition at the time of this writing, provides a detailed account of various issues related to the NPV initiative, including the electoral college, earlier reform efforts, interstate compacts, the text of the proposed compact, a strategy for advancing the initiative, and a 340-page section addressing \"myths about the National Popular Vote Compact.\"", "National Popular Vote Inc. maintains an office in Mountain View, CA.", "Supporters in various state legislatures began to introduce measures to adopt the interstate compact shortly after NPV's inaugural press conference on February 23, 2006. The NPV Compact has been introduced at various sessions in the legislatures of all 50 states and the Council of the District of Columbia, which performs the functions of a state legislature in the nation's capital, and has received some form of active consideration in 38 states and the D.C. Council.", "Among other activities, NPV maintains a regular communications program of email newsletters announcing activities and soliciting readers to petition governors and state legislators to support the compact. At the time of this writing, NPV claims that 3,112 state legislators have either sponsored or cast a recorded vote in their respective legislatures for the compact. NPV also claims endorsements from legislators and endorsements by the New York Times , Los Angeles Times , Chicago Sun-Times , Minneapolis Star Tribune , Boston Globe , Miami Herald , and other newspapers.", "NPV also advocates use of the citizen initiative process where available to enact state adherence to the compact; it asserts that when Article II, Section 1, clause 2 grants authority to the states to appoint \"in such Manner as the Legislature thereof may direct,\" the authority extends to the states' entire lawmaking process, which in some states includes the proposal and passage of legislation and constitutional amendments through citizen initiative. The citizen initiative approach to the interstate compact, however, has yet to be used at the time of this writing."], "subsections": []}, {"section_title": "Status of the National Popular Vote Interstate Compact in 2019: How Many States Have Ratified the NPV Initiative?", "paragraphs": ["At the time of this writing, in May 2019, the following 14 states and the District of Columbia have adopted the National Popular Vote Compact. Collectively, they are assigned a total of 189 electoral votes. The National Popular Vote Interstate Compact has been introduced since its inception in all 50 states and the District of Columbia. States that have adopted NPV at the time of this writing are listed in chronological order, by year of adoption, as follows:", "Hawaii (4 electoral votes), 2008; Illinois (20 electoral votes), 2008; Maryland (10 electoral votes), 2008; New Jersey (14 electoral votes), 2008; Washington (12 electoral votes), 2009; Massachusetts (11 electoral votes), 2010; District of Columbia (3 electoral votes), 2010; Vermont (3 electoral votes), 2011; California (55 electoral votes), 2011; Rhode Island (4 electoral votes), 2013; New York (29 electoral votes), 2014; Connecticut (7 electoral votes), 2018; Colorado (9 electoral votes), 2019; Delaware (3 electoral votes), 2019; and New Mexico (5 electoral votes), 2019.", "After initial momentum in 2008, when four states joined the compact in one year, NPV made slower progress toward its goal of approval by states accounting for 270 electoral votes. Highlights were California's approval in 2011, which added 55 electoral votes to the tally, and New York's accession to the compact in 2014. Beginning with Connecticut's approval in 2018, followed in 2019 by Colorado, Delaware, and New Mexico, 24 additional electoral votes were added to the NVP count, bringing the total to 189, 70% of the 270 votes needed for NPV to go into effect.", "By early May 2019, legislation to join the NPV had been introduced in the current session of at least one chamber of the legislature in 14 states that controlled a combined total of 150 electoral votes. As of April 17, the compact had been approved in Nevada by the Assembly (lower chamber of the legislature) and in Oregon by the Senate. Accession by these two states would raise the NPV member total to 202 electoral votes. ", "Conversely, proposals to rescind approval of the NPV Interstate Compact have been introduced in the legislatures of Connecticut, Hawaii, Maryland, Massachusetts, New Jersey, and Washington, to date; none has been approved.", "Some observers note that, despite NPV's assertion of bipartisan support, all the jurisdictions that have joined the compact to date could be identified as \"leaning\" Democratic or \"solid\" Democratic in their support of the Democratic Party, as classified by a recent Gallup survey. For instance, 11 of the 14, including California, Delaware, the District of Columbia, Hawaii, Illinois, Maryland, Massachusetts, New Jersey, New Mexico, Rhode Island, and Vermont, were found by Gallup to be among the \"most solidly Democratic states in 2017.\" Alluding to this fact, one commentator observed that", "[a]ll the states to have joined so far are very blue. Until some purple states and red states sign on, the compact has little in the way of territory to conquer.... The seven states where President Obama won [in 2012] by the widest margins, along with D.C., have joined. So have three others\u2014New Jersey, Illinois and Washington\u2014where Obama won by at least 15 percentage points. But none below that threshold have done so.", "The 2016 presidential election results in Colorado, Connecticut, Delaware, and New Mexico, the most recent adherents to the NPV compact, arguably confirm this observation\u2014the Democratic candidates won the popular vote in all four states, by margins of between 4.9% in Colorado to 13.7% in Connecticut. On the other hand, several states where the NPV remained under active consideration in 2019\u2014Arizona, Florida, Georgia, Idaho, Indiana, Kansas, North Carolina, Ohio, and South Carolina\u2014were carried by the Republican presidential ticket in 2016.", "As the NPV campaign developed momentum in the states, particularly between 2008 and 2011, defenders of the existing arrangements and the electoral college announced measures to promote retention of the electoral college system. In October 2011, the Heritage Foundation, a conservative public policy institute, released a report opposing the NPV compact. That same month, Roll Call reported that the State Government Leadership Foundation, a project of the Republican State Leadership Committee, would begin a campaign to defend the electoral college and counter recent NPV gains. Further activity, however, does not appear to have been undertaken by these groups by the time of this writing."], "subsections": []}]}, {"section_title": "The National Popular Vote Initiative: Pro and Con73", "paragraphs": ["Arguments in support of and opposed to the National Popular Vote proposal resemble those advanced in favor of and against direct popular election of the President. The central issue turns on the question of the asserted simplicity and democratic attractiveness of the direct election idea as compared to a more complex array of factors cited by supporters of the electoral college system."], "subsections": [{"section_title": "Arguments Favoring the NPV Compact", "paragraphs": ["Proponents of the NPV initiative arguably share the philosophical criticism voiced by proponents of direct popular election, who maintain that the electoral college system is intrinsically undemocratic\u2014it provides for \"indirect\" election of the President and Vice President. This, they assert, is an 18 th century anachronism, dating from a time when communications were poor, the literacy rate was much lower, and the nation had yet to develop the durable, sophisticated, and inclusive democratic political system it now enjoys. They maintain that only direct popular election of the President and Vice President is consistent with modern democratic values and practice.", "Beyond this fundamental challenge, critics cite what they identify as a wide range of technical failings of the electoral college arrangement. Perhaps the most prominent of these is that the electoral college system can result in the election of a President and Vice President who have won the electoral vote, but gained fewer popular votes than their major opponent. This condition results at least in part from the nearly universal reliance on the \"winner-take-all\" or general ticket system of awarding electoral votes in the states, which is also criticized by NPV advocates. Under the general ticket system, the candidates winning the most popular votes in a state (a plurality is sufficient) are awarded all that state's electors and electoral votes; under these circumstances, a presidential ticket can gain all of a state's electoral votes on even a slim margin of popular votes. Presidents were elected in 1876, 1888, 2000, and 2016 who received fewer popular votes than their major party opponents, while the runner-up in both popular and electoral votes was elected by the House of Representatives when four candidates split the vote in the presidential election of 1824.", "NPV supporters advocate the compact on the grounds of fairness and respect for the voters' choice. At the core of their arguments, they assert that the process would be simple, national, and democratic; the NPV interstate compact would provide de facto for a single, democratic choice, allowing all the nation's voters to choose the President and Vice President directly, with no intermediaries. The \"people's choice,\" they assert, would win in every election, and every vote would carry the same weight in the election, no matter where in the nation it was cast. No state would be advantaged, nor would any be disadvantaged. According to NPV, the central argument in favor is that the compact \"would guarantee the Presidency to the candidate who receives the most popular votes [or at least a plurality] in all 50 states (and the District of Columbia).\" According to NPV, there would never again be a presidential election \"misfire\" or another \"wrong winner.\"", "Other elements of the electoral college system criticized by NPV advocates (and other electoral college reformers) would arguably disappear or be rendered irrelevant. These include the faithless elector phenomenon, the general ticket system's asserted \"disfranchisement\" of voters who backed the losing candidates, and various asserted \"voting power\" advantages attributed to large (populous) states, small states, states with large populations of noncitizens, states with low rates of voter participation, and populous states with concentrations of minority-group voters. In addition, the NPV compact would almost certainly eliminate the need for contingent election of the President and Vice President under the Twelfth Amendment.", "NPV advocates also assert the compact would provide a practical benefit to states that tend to be noncompetitive in presidential elections and which therefore receive fewer campaign visits by major party candidates. With \"every vote equal,\" NPV maintains that presidential and vice presidential nominees and their organizations would need to spread their presence and resources more evenly as they campaigned for every vote nationwide, rather than concentrate on winning key \"battleground\" states. They assert that, under the present system ", "candidates have no reason to poll, visit, organize, campaign, or worry about the concerns of voters of states that they cannot possibly win or lose. This means that voters in two thirds of the states are effectively disenfranchised in presidential elections because candidates concentrate their attention on a small handful of \"battleground\" states. In 2004, candidates concentrated over two-thirds of their money and campaign visits in just five states; over 80% in nine states, and over 99% of their money in just 16 states. ", "For instance, NPV notes that California voters seldom see the presidential or vice presidential nominees or benefit from campaign spending because the Golden State, having voted Democratic since 1988, is considered to be reliably \"blue,\" and Democratic Party candidates are said to take its 55 electoral votes for granted. They also note that Republican candidates make few California appearances, but, NPV asserts, for the opposite reason: why spend time and resources in support of an apparently hopeless cause? Similar arguments made by NPV on the Republican side apply to Texas, a state that has voted for Republican presidential nominees since 1980. In 2016 for instance, NPV claims that no Democratic nominee participated in a general election campaign event in California or Texas, while a Republican nominee appeared in only one campaign event in each of those states. By comparison, according to their calculations, the hotly contested battleground states of Florida, North Carolina, and Pennsylvania received, respectively, 71, 55, and 54 candidate appearances. According to NPV's analysis of campaign appearances, the 2016 major party candidates for President and Vice President appeared at a total of 375 campaign events during the general election campaign, but they visited only 12 states; by NPV's calculation, 38 states and the District of Columbia were bypassed during the campaign.", "NPV advocates also maintain that the concentration of campaign resources, advertising, and candidate appearances in battleground states depresses turnout in \"flyover\" states, where candidates make few campaign appearances. The U.S. Elections Project report, America Goes to the Polls, 2016 , appears to offer statistics consistent with this assertion, finding that the participation rate of the population eligible to vote in 14 battleground states was 65% in the 2016 presidential election, as opposed to comparable nationwide turnout of 60%. It also reports findings similar to those advanced by NPV: 95% of campaign visits during the 2016 campaign were made in battleground states, as was 99% of \"ad spending.\" The NPV manifesto also cites a Brookings Institution study of the 2004 presidential election in support of its argument, stating, \"Because the electoral college has effectively narrowed elections like the last one to a quadrennial contest for the votes of a relatively small number of states, people elsewhere are likely to feel that their votes don't matter.\" It should be noted, however, that a range of other political, social, cultural, and economic factors may also contribute to the disparity in turnout between battleground and non-battleground states. ", "NPV further suggests that the disparity in participation may ultimately damage the ability to govern on the state and local levels and could have a negative impact on the legitimacy of public institutions:", "Diminished voter turnout in presidential races in non-battleground states weakens down-ballot candidates, thereby making the state even less competitive in the future. Governance\u2014not just electioneering\u2014is affected by the winner-take-all rule."], "subsections": []}, {"section_title": "Arguments Opposing the NPV Compact", "paragraphs": ["National Popular Vote opponents oppose the compact on various grounds. Some argue that it is unconstitutional or \"anticonstitutional,\" that is, contrary to the Founders' intentions and the spirit of the nation's fundamental charter. It is also asserted that NPV would solve few of the electoral college system's alleged problem issues and would create some of its own. Finally, some observers note that the NPV compact is an interstate compact as defined in Article I, Section 10, clause 3 of the Constitution, and as such would be subject to congressional approval. This issue is examined in greater detail in a separate section of this report.", "On the most fundamental philosophical basis, opponents might argue that the NPV compact violates one of the basic principles of majoritarian democracy: it does not require that candidates win a majority of the popular vote in order to gain the presidency. Rather, it would anoint as winner the ticket that gains more popular votes than any other. A majoritarian democracy, it may be argued, should require a majority in order to elect; it may be further noted that the existing system, by comparison, requires a majority in the electoral college. As one commentary noted ", "only the strictest of majoritarians desire a purely majoritarian presidential election system, and those individuals should be deeply troubled by the prospect of plurality presidencies, which the NPVC [sic] expressly countenances. Indeed, the NPVC promises to create more difficulties and \"misfires\" in its own way than the Electoral College system its proponents so earnestly seek to replace.", "Further, opponents might ask how the NPV compact would function in the event of a multicandidate election, a phenomenon that recurs from time to time in U.S. presidential elections. One commentator posited the following problematic scenario under such circumstances:", "Under the compact, one can easily imagine a multi-candidate race in which a candidate would win, say, a thirty-four percent plurality of the popular vote nationwide while losing in every state and D.C. If all of the states and D.C. were signatories to the compact, all the electoral votes in such a hypothetical race would be awarded contrary to the will of voters choosing electors (still not voting directly for President under this plan). Would the United States accept a President who wasn't the choice of sixty-six percent of those voting, nor even the choice of a single state?", "The existing electoral college system, NPV skeptics might also assert, is a fundamental element in the federal constitutional arrangements established by the Constitution. Fearing \"the tyranny of the majority,\" the Founders established a system of government that provides checks and balances designed to restrain the majority and secure minority rights. These principles are also embedded in the structure of federal elections: the Senate, the House of Representatives, and the presidency were deliberately provided with different terms of office and different electorates, and the states were given an important role in the federal election process. In particular, through the electoral college the United States elects its national Presidents and Vice Presidents in a state-based federal election. Successful nominees are compelled under this system to present a broad political vision that commands nation-spanning \"concurrent majorities\" and appeals to the great variety of Americans. As in the case of the Senate, less populous states are accorded a small numerical advantage by assignment of two at-large electors reflecting the Constitution's equal apportionment of Senators to each state regardless of its population. The NPV initiative, they could claim, would discard the Founders' intentions in favor of what they consider to be a flawed \"majoritarian\" presidency that would ill-serve a continent-spanning and profoundly diverse republic.", "Another criticism centers on the use of the NPV compact to effect a fundamental change in the presidential election process and a de facto amendment to the Constitution, but without following the procedures set out in Article V. Critics may note that NPV's founders admit their plan is an \"end run\" around the Constitution. Proponents might counter with the argument that Article V presents too high a hurdle for what they consider a necessary reform of the system. Opponents, however, could respond that the Founders intended the various supermajority requirements in Congress and the states to ensure that successful constitutional amendments enjoy broad national support. The bare majority of electoral votes required to implement NPV, they might note, meets none of these supermajority requirements. As one study critical of the NPV initiative concluded, because the use of an interstate compact \"does not conform to the constitutional means of changing the original decisions of the Framers, NPV could not [therefore] be a legitimate innovation.\" A final argument on this line might be that one \"end run\" around the amendment process might lead to others, setting a dangerous precedent for similar efforts in the future.", "Opponents might note that the NPV would eliminate the electoral college system's multiplier effect generated by the winner-take-all or general ticket system used in 48 states and the District of Columbia, which tends to magnify the winning ticket's margin of victory, and is said to confer greater legitimacy to the victors. For instance, in 2016, Republican nominee Donald Trump's clear electoral vote majority of 304 votes (56.5% of the total), compared with Democratic nominee Hillary Clinton's 227 (42.2% of the total) could be said to reinforce and confirm his victory, notwithstanding Clinton's plurality of the popular vote (48.2%), compared with Trump's 46.1%.", "From a practical standpoint, NPV opponents might argue that the NPV would actually lead to an increase in contested election results and legal challenges in the states, as the political parties maneuver to claim every possible vote. They assert that the existing tabulation of popular votes within each state reduces contested results and recounts. Under NPV, the incentive to gain every vote would arguably lead to far broader disputes and widespread recounts at every level of election administration. As a Heritage Foundation study concluded", "Under the NPV \u2026 any suspicions necessitating a recount in even a single district would be an incentive for a national recount.... The prospect of a candidate challenging \"every precinct, in every county, in every state of the Union\" should be abhorrent to anyone who witnessed the drama, cost, delay, and undue litigation sparked by the Florida recount of 2000. ", "Opponents might also assert that the increased incidence of recounts would be further complicated by wide-ranging disparities in state procedures, potentially leading to prolonged periods of uncertainty following close presidential elections.", "Critics may also note that the NPV plan contains no \"statute of limitations,\" unlike proposed constitutional amendments, for which Congress typically sets a seven-year ratification period. Where, critics may ask, is a similar time limit that would \"sunset\" the NPV compact, after which it would expire or return to \"square one\"? According to its website, NPV was launched on February 23, 2006; if it were a constitutional amendment proposed by Congress, it would have expired on February 23, 2013, since by the end of the customary seven-year deadline it was \"ratified\" by only eight states and the District of Columbia. By what reasoning, they might ask, should the NPV be exempt from the standards of timeliness and contemporaneity Congress customarily sets for constitutional amendments?", "Opponents might reject claims that, under NPV, campaign spending and candidate appearances would be spread and scheduled more widely, beyond the current concentration of time and resources in battleground states. They might argue that spreading campaign resources and candidate events in non-battleground states is a questionable argument to justify a fundamental change in the presidential election process. Campaign appearances and spending, they could assert, should not be considered to be a local economic stimulus package, nor are the amounts in question sufficient to make much of a difference in the economic condition of most states. As one critical analysis notes, \"... the nation does not hold presidential elections to foster local economic development.\" Moreover, they might continue, it is equally dubious to assert that nominees will slight the concerns of citizens of the non-battleground states from which they draw their greatest support, or that concentrated campaigning in the battleground states somehow \"disenfranchises\" voters in others. In the modern era, a small percentage of voters actually attends an in-person presidential or vice presidential candidate appearance. Television (especially broadcast and cable TV news networks), social media, the internet, and newspapers\u2014not the traditional rallies, torchlight parades, and handbills\u2014dominate presidential election campaigns in the 21 st century."], "subsections": []}]}, {"section_title": "National Popular Vote: Legal Issues102", "paragraphs": ["In addition to policy issues discussed previously, some observers have also raised questions related to the NPV initiative based on the fact that it is an interstate compact as defined in the Constitution. Others have questioned whether NPV might conflict with some provisions of the Voting Rights Act."], "subsections": [{"section_title": "The NPV Initiative As an Interstate Compact", "paragraphs": ["The NPV initiative has been described by its supporters variously as a bill, a state-level statute, and an interstate compact. The latter reference necessitates an analysis of whether the initiative complies with the Compact Clause of the Constitution. ", "An interstate compact\u2014under the broadest understanding\u2014is a contract between two or more consenting states. The Supreme Court has further suggested that an interstate compact often requires reciprocal commitments between the governments of two or more states, such that one state's commitment is conditioned on the action of another state and no state can unilaterally repeal its commitment. The use of interstate compacts predates the Constitution, as the Articles of Confederation contained a similar Compact Clause that provided a qualified prohibition on states entering into any agreements between them without the consent of Congress. The chaos resulting from the disunity created by the Articles of Confederation prompted the Framers of the Constitution generally to \"impose more uniformity\" among the states, resulting in a Constitution that wholly prohibits states from entering into any treaties, alliances, and federations. Nonetheless, the Constitution maintained the Articles of Confederation's qualified prohibition on interstate compacts and agreements, allowing states to enter into an interstate compact so long as the participating states seek the consent of Congress. Specifically, the Compact Clause provides that \"No State shall, without the Consent of Congress ... enter into any Agreement or Compact with another State.... \" While the historical rationale for Article I's qualified prohibition on interstate compacts is unclear, the Compact Clause generally reflects the view of the Framers that states should be able to work cooperatively together, as well as the concern that unchecked interstate alliances might threaten the harmony of the Union or the authority vested by the Constitution in the federal government. As the Supreme Court noted in Cuyler v. Adams , \"By vesting in Congress the power to grant or withhold consent, or to condition consent on the states' compliance with specified conditions, the Framers sought to ensure that Congress would maintain ultimate supervisory power over cooperative state action that might otherwise interfere with the full and free exercise of federal authority.\"", "The Compact Clause places no limits on what might be done through an interstate compact other than the requirement of congressional consent. In the early years of government under the Constitution, compacts were used almost exclusively to settle boundary disputes. Beginning with the establishment of the Port of New York Authority in 1921, however, compacts began to be used to address more complex, regional issues requiring intergovernmental cooperation. Some compacts are merely advisory in form, but others may be regulatory, with significant powers granted to multistate commissions. More recently, compacts have addressed such wide-ranging concerns as mental health treatment, law enforcement and crime control, education, driver licensing and enforcement, environmental conservation, energy, nuclear waste control, facilities operations, transportation, economic development, insurance regulation, placement of children and juveniles, disaster assistance, and pollution control. Approximately 200 interstate compacts are in effect today.", "Accordingly, the central legal issue with respect to the Compact Clause is whether a given interstate compact requires the consent of Congress. While a \"literal\" reading of the Compact Clause \"would require the States to obtain congressional approval before entering into any agreement among themselves, irrespective of form, subject, duration, or interest to the United States [emphasis added],\" the Supreme Court has repeatedly rejected such a reading. In 1893, in Virginia v. Tenness e e , Justice Stephen Field, writing for the Court, contended that a broad reading of the Compact Clause would \"embrace all forms of stipulation, written or verbal, and relating to all kinds of subjects[,]\" requiring congressional consent to agreements \"which the United States can have no possible objection or have any interest in interfering with,\" as well as those that \"may tend to increase ... the political influence of the contracting states, so as to encroach upon or impair the supremacy of the United States.... \" Surmising that the Compact Clause could not have been intended to have such a broad reach, Justice Field concluded that the Clause prohibits states from entering into compacts without congressional consent only when the underlying compact is \"directed to the formation of any combination tending to the increase of political power in the States, which may encroach upon or interfere with the just supremacy of the United States.\" The Supreme Court has subsequently reaffirmed Justice Field's \"functional view of the Compact Clause,\" and, accordingly, generally where an agreement does not fall within the scope of the Compact Clause as envisioned by the Court in Virginia v. Tennessee , the agreement \"will not be invalidated for lack of congressional consent.\" ", "Whether the NPV initiative requires congressional consent under the Compact Clause first requires a determination as to whether NPV even constitutes an interstate compact. At times, its supporters have resisted framing the initiative as an interstate compact, arguably out of concern for running afoul of the Compact Clause's provisions. For example, Professor Akhil Amar has argued that because the initiative does not create a \"new interstate governmental apparatus,\" the NPV should not be considered an interstate compact, as NPV compact signatory states are merely exercising power collectively that each state could exercise on its own. It is unclear, however, whether the creation of a new interstate governmental entity formed out of an agreement between two or more states is necessary, as opposed to sufficient, in order to deem an agreement as being an interstate compact subject to the Compact Clause. While the Supreme Court, in Northeast Bancorp , suggested that a \"joint organization or body\" formed out of an interstate agreement is a \"classic indic[ium] of a compact,\" the Court has never adopted a definition of an interstate compact that solely rests on the existence of an interstate governmental body. Instead, the Court appears to have adopted a broader definition of what an interstate compact can entail. For example, in Virginia v. Tennessee , the Court noted that the words \"compacts\" and \"agreements\" are synonymous and \"cover all stipulations affecting the conduct or claims of the parties.\" In other words, when two or more states enter into a stipulated agreement whereby one state agrees to perform an act in consideration for a reciprocal act by the other state(s), that agreement can be considered an interstate compact. This broad definition of a compact appears to encompass the NPV compact, as the initiative requires signatory states to agree mutually to appoint their electors to the winner of the national popular vote. Moreover, NPV binds each assenting state, as no member state can withdraw from it within six months or less of the end of a President's term. Because NPV prohibits states from freely \"modify[ing] or repeal[ing] [the agreement] unilaterally\" and requires \"reciprocation\" of mutual obligations, it appears that the initiative can be described as an interstate compact.", "Assuming the NPV initiative is an interstate compact, the question remains whether it is one that implicates the Compact Clause. The answer to that question primarily depends on whether NPV is \"directed to the formation of any combination tending to the increase of political power in the States, which may encroach upon or interfere with the just supremacy of the United States .\" In other words, the \"test\" for whether a particular interstate compact requires congressional consent is centrally concerned with vertical balances of power between the federal government and the states; namely, \"whether the Compact enhances state power quoad the National Government.\" While the NPV arguably increases the political power of the states that have consented to it by ensuring that those states' desired outcome for the presidential election\u2014the awarding of the majority of electoral votes to the presidential candidate supported by the majority of the voting populace\u2014it is unclear how that increase in political power would be at the expense of the power of the federal government. After all, the Constitution provides the federal government with no role in determining the members of the electoral college. One scholar has suggested that the NPV initiative would lead to a vertical alteration of power by eliminating the possibility that the House of Representatives would resolve a presidential election in the absence of an electoral majority for a single candidate because it is premised on a majority of electoral votes going to a single candidate. The House of Representatives, however, has decided only two presidential elections in American history, and whether such an arguably hypothetical and de minimis diminishment of federal power through the NPV would be sufficient to require congressional consent under the Compact Clause is simply unresolved by the relevant case law.", "While the Supreme Court's case law interpreting the Compact Clause is centrally concerned with vertical federalism concerns (i.e., the balance of power between the state and federal governments), the Court has recognized a potential secondary rationale suggested for the Compact Clause: to preserve the horizontal balance of powers among the various states. And horizontal federalism concerns could very well be implicated by the Compact Clause, as the provision appears to have been included in the Constitution out of concern both for the supremacy of the federal government and unity among the various states. Whether the NPV compact threatens the powers of nonconsenting states has been the subject of much debate among academics. Those in support of the initiative have contended that the nonconsenting states do not lose any power as a result of the NPV. According to this line of argumentation, even under the NPV, all states would retain their right to select the electors of their choosing, as nonmember state electors would still be counted in the electoral vote. Others, however, have pointed to the underlying premise of the NPV\u2014to enhance the political power of more populous states in presidential elections\u2014as evidence that the initiative diminishes the power of nonconsenting states. In other words, while non-compacting states would still retain the power to appoint electors, the influence that comes with that power would arguably be diminished because a state's role in the national election would be defined by its percentage of the popular vote and not by its percentage of electors, warranting congressional interest in approving a compact that effectuated such a change in national elections. Ultimately, however, whether the NPV actually threatens the power of nonconsenting states is a debate that remains active within academia but would likely be the source of considerable litigation if the initiative ever became effective. ", "If congressional consent is needed for the NPV, that consent can take various forms. Usually congressional consent to an interstate compact takes the form of a joint resolution or act of Congress specifying its approval of the text of the compact and adding any conditions or provisions it deems necessary, often embodying the compact document. As with most congressional actions, consent to an interstate compact must occur with the approval of both houses and must be signed by the President before it becomes law. Rarely has the President vetoed or threatened to veto consent legislation by Congress. While congressional consent to an interstate compact is most often explicit, consent by Congress may also be implied by subsequent acts of Congress as \"[a]n inference clear and satisfactory that Congress ... intended to consent\" to a compact may be sufficient. Congress may also delegate its power to approve a compact to a federal official so long as an \"intelligible principle\" against which approval can be measured is apparent. Ultimately, if congressional consent is truly needed for NPV to be effective, the initiative might have difficulty ever being enacted because the approval of both houses of Congress and the President would likely necessitate additional hurdles beyond the already challenging task of amassing support at the state level for the NPV."], "subsections": []}, {"section_title": "The NPV Initiative and Article II of the Constitution", "paragraphs": ["Beyond the legal issues raised with respect to the Compact Clause, the NPV initiative also potentially raises other broader constitutional concerns, including whether the states can functionally obviate the role of the electoral college through the NPV. Article II of the Constitution establishes that the election of the President should occur indirectly through the election by the electoral college. The choice of an indirect election for the President was a deliberate one by the Framers of the Constitution, because, while noting the importance that the \"sense of the people\" should influence the choice for President, they found it \"equally desirable\" for the \"immediate election\" of the President to be made by a body representative of distinct state interests and removed from the threat of unchecked majoritarianism. The result was that the Constitution established a presidential election process that was \"manifestly nonmajoritarian,\" with the electoral college, a body established to represent the distinct views of each state, as the centerpiece of the election process. The central constitutional issue presented by the NPV, therefore, is whether the states, through an interstate compact, can functionally transform the presidential election system enshrined in the Constitution into a more majoritarian process.", "Supporters of the NPV argue that the Constitution provides the legal means for states to transform the presidential election system into one where the President is elected based solely on the result of the national popular vote. Specifically, clause 2 of Article II, Section 1 of the Constitution provides the states with the power to \"appoint, in such Manner as the Legislature thereof may direct,\" the electors who represent the state in the electoral college. Facially, the Constitution's primary limitation on the power of a state to select its electors is the final number of electors awarded to each state. While perhaps an argument can be made that the structure, logic, and history of the Constitution place limits on the manner or method in which a state chooses its electors, the text of the Constitution simply does not impose any such limits. ", "Supreme Court case law also supports reading Article II of the Constitution to broadly provide states with wide discretion as to the manner in which its electors are selected. Specifically, in 1892 in McPherson v. Blacker, a unanimous Supreme Court upheld a Michigan law providing for the election by individual congressional district of presidential electors against a challenge that the law violated Article II of the Constitution. In so holding, the Court placed great emphasis on a number of state laws that existed shortly after the ratification that provided a variety of \"modes of choosing the electors,\" including selection by the legislature itself, by a \"vote of the people for a general ticket,\" \"by vote of the people in districts,\" or by some permutation of those methods. Viewing this evidence together with the text of Article II and the historical evidence from the Constitutional Convention led the Court to broadly conclude state legislatures have \"conceded plenary power ... in the matter of the appointment of electors,\" allowing the Michigan law to stand. Applying McPherson to the case of the NPV, the argument can and has been made that if the states have plenary power with respect to the manner of how electors are appointed, the power necessarily allows states to select electors in line with the results of the national popular vote. More recently, supporters of the NPV have relied on the Supreme Court's 2015 ruling in Arizona Legislature v. Arizona Independent Redistricting Commission (AIRC) \u2014which held that the State of Arizona had wide discretion under the Elections Clause of the Constitution to select the method by which the state provided for redistricting \u2014to argue that the states retain broad discretion in selecting electors under Article II, which uses similar language to the provision interpreted in AIRC.", "Others have argued that the structure of the Constitution and historical evidence suggest that the states do not have such vast discretion in appointing electors as to functionally transform the election for President into a national popular referendum. As noted elsewhere in this report, the electoral college was created by the Framers to ensure that states with the least population retained power in the selection of the President, providing a check against domination by the most populous states. The electoral college, being a product of the choices of individual state legislatures, was envisioned by the Framers as a body that would represent the specific interests of a given state, as opposed to the undifferentiated nation at large. Accordingly, it may be argued that allowing the most populous states to collude to ensure that the national popular vote, as opposed to the wishes of an individual state, dictates the results of a state's slate of electors, could arguably be irreconcilable with the Framers' intentions with respect to the electoral college.", "As such, for those who find the NPV compact constitutionally suspect under Article II, McPherson 's broad pronouncements about the nature of a state's power to appoint electors should be viewed in the context of that particular case, where the state of Michigan was attempting to appoint its electors based on the votes of an individual district in the state, as opposed to the state as a whole. In contrast to the law at issue in McPherson , with NPV, there appears to be no evidence contemporaneous with the ratification of the Constitution of a state selecting its electors in accordance with the results of the national popular vote. Unlike the State of Michigan in McPherson , an NPV state's electors might not be a product of the views of the state at the time of the election, but instead would reflect national popular sentiment about who should be the President. Moreover, the Supreme Court, in interpreting arguably analogous language from Article I of the Constitution allowing states to regulate the manner of the selection of the Members of the House of Representatives and Senate, concluded that the states cannot exercise their delegated authority in a way that would \"effect a fundamental change in the constitutional structure.\" The question that remains is whether the Court in a future case challenging the NPV compact would interpret the states' authority under Article II to appoint electors to be broad enough to allow the President to be selected as a result of the national popular vote, a question that, given the lack of any precise precedent respecting the constitutionality of the NPV compact under Article II, will likely remain unresolved until such time. "], "subsections": []}, {"section_title": "The NPV Compact and the Voting Rights Act175", "paragraphs": ["Other critics claim the NPV compact might violate Sections 2 and 5 of the Voting Rights Act (VRA). Writing in Columbia Law Review , David Gringer invokes the voting power theory. He argues that the plan conflicts with Section 2 of the VRA because moving from \"a state-based [vote] to a national popular vote dilutes the voting strength of a given state's minority population by reducing its ability [voting power] to influence the outcome of presidential elections.\"", "Gringer also asserts that the NPV compact may violate Section 5 of the act. In 2013, however, the U.S. Supreme Court invalidated Section 4(b) of the VRA, which contained a formula prescribing which states and jurisdictions with a history of discrimination were required to obtain prior approval or \"preclearance\" under Section 5 before changing any voting standard, practice, or procedure. Although the Court invalidated only the coverage formula in Section 4, by extension, Section 5 has been rendered currently inoperable. Prior to the Supreme Court ruling, Gringer argued that the NPV compact would qualify as a covered practice under Section 5, and that the legislatures of all the \"covered\" states would have been required to obtain preclearance before implementing the compact.", "Responding to this point, National Popular Vote Inc. noted the following:", "The National Popular Vote bill manifestly would make every person's vote for President equal throughout the United States in an election to fill a single office (the Presidency). It is entirely consistent with the goal of the Voting Rights Act. There have been court cases under the Voting Rights Act concerning contemplated changes in voting methods for various representative legislative bodies.... However, these cases do not bear on elections to fill a single office (i.e., the Presidency).", "In 2012, the Justice Department's Civil Rights Division specifically declined to challenge California's accession to the NPV compact on VRA grounds.", "The states' authority to appoint electors by any method their legislatures choose is not absolute. Federal court decisions have struck down state laws concerning appointment of electors that were found to be in violation of the Fourteenth Amendment's guarantee of equal protection:", "Although Clause 2 (of Article II, Section 1 of the Constitution) seemingly vests complete discretion in the states, certain older cases had recognized a federal interest in protecting the integrity of the process. Thus, the Court upheld the power of Congress to protect the right of all citizens who are entitled to vote to lend aid and support in any legal manner to the election of any legally qualified person as a presidential elector.... [I]n Oregon v. Mitchell (42 U.S. 112 (1970)), the Court upheld the power of Congress to reduce the voting age in presidential elections and to set a thirty-day durational residency period as a qualification for voting in presidential elections. Although the Justices were divided on the reasons, the rationale emerging from this case, considered with Williams v. Rhodes , (393 U.S. 20 1968)) is that the Fourteenth Amendment limits state discretion in prescribing the manner of selecting electors and that Congress in enforcing the Fourteenth Amendment may override state practices that violate that Amendment and may substitute standards of its own."], "subsections": []}]}, {"section_title": "Concluding Observations185", "paragraphs": ["Critics of the electoral college system have sought direct election of the President and Vice President without success for more than two centuries. The NPV initiative represents a novel effort to achieve this goal by use of an interstate compact that would circumvent the stringent requirements necessary for the proposal and ratification of constitutional amendments.", "Since its inception in 2006, NPV has achieved a degree of success: 14 states and the District of Columbia, controlling a total of 189 electoral votes, have joined the compact since 2008. Progress has arguably been sporadic, however, notwithstanding active campaigning by National Popular Vote Inc. Over the course of more than a decade, NPV has heretofore failed to develop a sustained momentum toward its stated goal of states controlling 270 electoral votes. The action of three states in joining NPV to date in 2019 marks the most activity in a single year since 2008; it remains to be seen whether this trend will continue. To date, certain Democratic-leaning states have joined the compact. The arguable lack of support in Republican-controlled state legislatures raises questions about further accessions to the compact in the immediate future, particularly given the fact that the GOP controlled both legislative chambers in 30 states following the 2018 elections.", "To date, while the NPV initiative has generated interest among supporters of direct popular election of the President, it does not appear to have gained widespread awareness among the public at large. The findings of the March 27, 2019, Politico/Morning Consult survey cited earlier in this report arguably suggest that greater public knowledge of NPV might spur popular support for the compact. This might then contribute to further momentum if additional states were to join, particularly populous ones like Florida (29 electoral votes), Georgia (16 electoral votes), and Ohio (18 electoral votes) where the compact was under active consideration in 2019. Under these circumstances, proponents might be energized and encouraged by a sense of progress for the initiative. At the same time, NPV opponents could be expected to coalesce around the issues identified earlier in this report, and renew and increase their efforts in defense of the electoral college system. The activities of both might ultimately bring the NPV initiative to the more immediate attention of Congress."], "subsections": []}]}}
{"id": "R43725", "title": "Iraqi and Afghan Special Immigrant Visa Programs", "released_date": "2019-03-29T00:00:00", "summary": ["Congress has enacted a series of legislative provisions since 2006 to enable certain Iraqi and Afghan nationals to become U.S. lawful permanent residents (LPRs). These provisions make certain Iraqis and Afghans who worked as translators or interpreters, or who were employed by, or on behalf of, the U.S. government in Iraq or Afghanistan, eligible for special immigrant visas (SIVs). Special immigrants comprise a category of permanent employment-based admissions under the Immigration and Nationality Act (INA). While the special immigrant category is unique, it does bear some similarities to other admission categories that are authorized by other sections of the INA, including refugees and Amerasian children.", "To apply under the SIV programs for Iraqis or Afghans, a prospective special immigrant must submit a petition to the Department of Homeland Security; be otherwise eligible for an immigrant visa; and be otherwise admissible to the United States. An Iraqi or Afghan SIV applicant whose petition is approved and who is abroad is required to have an in-person visa interview at a U.S. embassy or consulate abroad to determine visa eligibility. Upon admission to the United States, SIV recipients are granted LPR status. Iraqi and Afghan special immigrants are eligible for the same resettlement assistance and federal public benefits as refugees.", "There are three SIV programs for Iraqi and Afghan nationals. One is a permanent program for certain Iraqis and Afghans who have worked directly with U.S. Armed Forces, or under Chief of Mission authority, as translators or interpreters. This program is currently capped at 50 principal aliens (excluding spouses and children) per year.", "The other two SIV programs for Iraqis and Afghans are temporary. One program is for certain Iraqis who were employed in Iraq by, or on behalf of, the U.S. government during a specified period. It was capped at 5,000 principal aliens annually for FY2008 through FY2012 and included a provision to carry forward any unused numbers from one fiscal year to the next. It expired at the end of FY2013, but was subsequently revived. Current statutory authority provides for the issuance of no more than 2,500 visas to principal applicants after January 1, 2014. Applications are no longer being accepted for this program because the application deadline has passed.", "There is a similar SIV program for certain Afghans who were employed in Afghanistan by, or on behalf of, the U.S. government or by the International Security Assistance Force during a specified period. The program was capped at 1,500 principal aliens annually for FY2009 through FY2013, with a provision to carry forward any unused numbers from one fiscal year to the next. Current statutory authority provides for the issuance of no more than 18,500 visas to principal applicants after December 19, 2014. The application period for this program remains open.", "Through the end of FY2018, more than 79,000 individuals were granted special immigrant status under the three SIV programs for Iraqi and Afghan nationals. Principal applicants accounted for about 26,000 of the total, and dependent spouses and children accounted for the remaining 53,000.", "The Iraqi and Afghan SIV programs have faced challenges with respect to application processing, security screening, and visa availability. The structure of the SIV programs themselves, with statutory timeframes and numerical limitations, introduces additional complication."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The hundreds of Iraqi interpreters who work for the U.S. military conceal their identities in distinctive ways.", "One wears a bulletproof Kevlar helmet and a black mask. Another wears sunglasses and a balaclava that covers his entire head.", "What they share is the extraordinary danger of their job. Targeted for death by insurgents, they also face suspicion from their employers and often lie to relatives for fear that word of their job will get out.", "This excerpt from a January 2006 article in a Michigan newspaper suggests the dangerous work that Iraqi interpreters and translators performed in support of the U.S. war effort. Other sources similarly document the work performed by Afghan interpreters and translators and the danger they face. For example, a former Afghan interpreter for the U.S. military, profiled in a January 2017 article, said that it was too dangerous for him to return from the Afghan capital to his native province because of the Taliban. According to the interpreter:", "[Taliban] will stop the car and block the road, and say, 'Come here, I need you, bro' \u2026 Then hang me or shoot me.", "In January 2006, the 109 th Congress enacted the first in a series of legislative provisions to enable certain Iraqi and Afghan nationals to become U.S. lawful permanent residents (LPRs) based on their service to the U.S. government. Section 1059 of the FY2006 National Defense Authorization Act (NDAA) made certain Iraqi and Afghan nationals who had worked directly with U.S. Armed Forces as translators eligible for special immigrant visas (SIVs). Special immigrants comprise a category of permanent employment-based admissions under the Immigration and Nationality Act (INA). Upon admission to the United States, holders of SIVs are granted LPR status. A House Judiciary Committee report on a related bill in the 109 th Congress to provide special immigrant status for Iraqi and Afghan translators ( H.R. 2293 ) described the need for the legislation, as follows:", "A number of alien translators currently working in Iraq and Afghanistan embedded with units of the U.S. Armed Forces are providing extremely valuable services. Their cooperation and close identification with the U.S. military have put these individuals and their families in danger. This danger will only escalate after U.S. forces leave or reduce their strength in Iraq and Afghanistan.", "Congress subsequently broadened the special immigrant classification for translators and also authorized a second special immigrant classification for certain Iraqi and Afghan nationals who had worked for, or on behalf of, the U.S. government in Iraq or Afghanistan, respectively. ", "This report analyzes the SIV classifications for Iraqis and Afghans within the context of both the larger INA special immigrant category and selected other permanent admissions categories. It discusses the legislative changes to the individual Iraqi and Afghan special immigrant programs since their initial authorization, provides statistics on visa issuances, and considers challenges that have faced the programs."], "subsections": []}, {"section_title": "Legislative History of the Special Immigrant Category", "paragraphs": ["The term special immigrant is defined in Section 101(a)(27) of the INA. The definition consists of an enumeration of classifications eligible for this category, such as LPRs who are returning from a temporary stay abroad. Most special immigrant classifications are subject to an annual numerical limitation.", "The special immigrant category was added to the INA by a 1965 immigration law, known as the 1965 amendments. The INA, as originally enacted in 1952, included a predecessor category of nonquota immigrants , immigrants who could be admitted to the United States without regard to numerical limitations. In the 1952 act, these nonquota immigrants included returning LPRs, natives of Western Hemisphere countries, ministers of religion, and long-serving employees of the U.S. government abroad, among other groups. The 1965 amendments to the INA redesignated the nonquota immigrants as special immigrants and made some changes to the various classifications.", "The Immigration Act of 1990 further amended the special immigrant provisions in the INA. It placed the special immigrant category under a revised INA section on permanent employment-based immigration and imposed an overall annual numerical limitation of 10,000 on special immigrants, with exemptions for certain classifications. In addition, the 1990 act amended the existing special immigrant classifications and added several new ones. A 1991 immigration act changed the overall annual limitation on special immigrants from 10,000 to 7.1% of the worldwide level of employment-based immigration. Subsequent laws added new special immigrant classifications.", "Today the special immigrant category encompasses a hodgepodge of classifications, but there are some commonalities among the seemingly disparate groups. Many of the classifications, for example, have a humanitarian element. In another commonality, some of the classifications are directed at individuals in certain fields of work that have a public service component. These include classifications for religious workers, graduates of foreign medical schools licensed to practice medicine in the United States, and international broadcasters. ", "Particularly relevant for this report are special immigrant classifications that apply to individuals who have worked for the U.S. government. These include classifications for 15-year employees or former employees of the U.S. government abroad; nationals of Panama who are 15-year employees or former employees of the U.S. government in the former Canal Zone; and individuals who, after lawful enlistment abroad, have served or will serve on active duty in the U.S. Armed Forces for 12 years. Some of the classifications based on U.S. government employment apply to individuals who are placed in danger because of their work. For example, there is a special immigrant classification for individuals who were employees of the Panama Canal Company or Canal Zone Government on April 1, 1979, who provided faithful service for at least five years, and \"whose personal safety, or the personal safety of whose spouse or children, as a direct result of such Treaty, is reasonably placed in danger because of the special nature of any of that employment.\" As discussed in the next section, the two special immigrant classifications for Iraqis and Afghans similarly apply to individuals who performed U.S. government-related service, with one requiring the presence of a serious threat to the individual as a result of that U.S. government employment."], "subsections": []}, {"section_title": "Special Immigrant Visas for Iraqis and Afghans", "paragraphs": ["There are two special immigrant classifications specifically for nationals of Iraq and Afghanistan: one for individuals who worked as translators or interpreters and one for individuals who were employed by, or on behalf of, the U.S. government in Iraq or by, or on behalf of, the U.S. government or by the International Security Assistance Force in Afghanistan. These classifications, in their current form, are the product of a series of legislative enactments, which initially established the classifications and then amended them (see Table 1 for a comparison of the main features of the programs within these classifications). ", "A prospective Iraqi or Afghan special immigrant must submit a petition for classification; be otherwis e eligible to receive an immigrant visa; and be otherwise admissible to the United States, as specified. Regarding this last requirement, in order to gain admission to the United States, an individual must be admissible under the INA. The INA sets forth various grounds of inadmissibility, which include health-related grounds, security-related grounds, and public charge (i.e., indigence). The public charge ground does not apply to applicants under the special immigrant programs for Iraqis and Afghans; thus, these applicants are not required to demonstrate economic self-sufficiency. "], "subsections": [{"section_title": "Aliens Who Worked as Translators or Interpreters", "paragraphs": ["Section 1059 of the FY2006 NDAA made certain Iraqi and Afghan nationals who had worked directly with U.S. Armed Forces for at least one year as translators, and their spouses and children, eligible to be classified as special immigrants. The provision capped the number of principal aliens who could become special immigrants at 50 annually and provided that these individuals would count against the overall special immigrant cap (see \" Legislative History of the Special Immigrant\u00a0Category \").", "Section 1059 was amended in 2007 to expand eligibility to certain Iraqi and Afghan nationals who had worked directly with U.S. Armed Forces, or under Chief of Mission authority, for at least one year as translators or interpreters. To be eligible for this special immigrant classification, as amended, the alien also had to obtain a favorable written recommendation from the Chief of Mission or a general or flag officer in the relevant Armed Forces unit. The 2007 legislation temporarily increased the numerical limit on this special immigrant program (to 500 for each of FY2007 and FY2008) and provided that the classification would be exempt from the overall numerical limits on special immigrants. Another 2007 amendment provided that if the numerical limits were not reached in a fiscal year any remaining numbers would be carried forward to the next year."], "subsections": []}, {"section_title": "Aliens Who Worked for the U.S. Government", "paragraphs": ["A second special immigrant classification for nationals of Iraq or Afghanistan and their spouses and children was established by Section 1244 of the FY2008 NDAA (for Iraqis) and by Title VI of the Omnibus Appropriations Act, 2009 (for Afghans). This classification, as subsequently amended, is for certain Iraqi and Afghan nationals who were employed by, or on behalf of, the U.S. government in Iraq or Afghanistan, respectively, as specified. The Carl Levin and Howard P. \"Buck\" McKeon National Defense Authorization Act for FY2015 expanded eligibility for the Afghan program to include certain employees of the International Security Assistance Force. To be eligible for this special immigrant classification for nationals of Iraq or Afghanistan, an alien must obtain a recommendation from a senior supervisor that documents the alien's \"faithful and valuable service\" as well as approval from the Chief of Mission. In addition, an applicant must have experienced \"an ongoing serious threat\" as a result of his or her employment. "], "subsections": [{"section_title": "Iraqi Program", "paragraphs": ["The Section 1244 program for Iraqis who were employed by, or on behalf of, the U.S. government in Iraq requires not less than one year of employment on or after March 20, 2003. The law that originally established the program did not specify an end date for the employment period. The Iraqi program was initially capped at 5,000 principal aliens annually for five years (later specified as FY2008-FY2012) with a provision to carry forward any unused numbers from one fiscal year to the next, including from FY2012 to FY2013. This program expired for principal aliens at the end of FY2013. ", "At the beginning of FY2014, however, the 113 th Congress approved a short-term extension of the program in P.L. 113-42 . For FY2014, P.L. 113-42 provided for the approval of cases that were pending when the program expired on September 30, 2013, as well as 2,000 new cases, as long as the principal aliens in the new cases completed the required one-year period of employment by September 30, 2013, and filed an application with the Chief of Mission in Iraq by December 31, 2013. The NDAA for FY2014 rewrote the extension language in P.L. 113-42 to provide for the issuance of no more than 2,500 visas to principal applicants after January 1, 2014, and to extend the application deadline to September 30, 2014 (for an overview of the application process, see \" Iraqi and Afghan Special Immigrant Visa Application Process \"). No changes to the numerical cap or application deadline have been made since then. "], "subsections": []}, {"section_title": "Afghan Program", "paragraphs": ["A similar SIV program for Afghans who were employed by, or on behalf of, the U.S. government in Afghanistan, as originally enacted, required not less than one year of employment on or after October 7, 2001. It was initially capped at 1,500 principal aliens annually for FY2009 through FY2013 with a provision to carry forward any unused numbers from one fiscal year to the next, including from FY2013 to FY2014. ", "Several laws passed by the 113 th Congress amended the Afghan program's numerical limitations to provide for additional visas. The FY2014 Consolidated Appropriations Act provided for the granting of special immigrant status to up to 3,000 principal aliens for FY2014 and the carrying forward and use of any unused balance for FY2014 through the end of FY2015. This law required the one-year employment period to end by December 31, 2014, and required principal aliens to file an application with the Chief of Mission in Afghanistan by September 30, 2014 (see \" Iraqi and Afghan Special Immigrant Visa Application Process \"). The Emergency Afghan Allies Extension Act of 2014 provided that an additional 1,000 principal aliens could be granted special immigrant status by December 31, 2014. This language required principal aliens to apply to the Chief of Mission no later than the same December 31, 2014, date. ", "Making further changes to the Afghan program's numerical limitations, the FY2015 NDAA provided that an additional 4,000 principal aliens could obtain special immigrant status from the December 19, 2014, enactment date through September 30, 2016. For purposes of obtaining special immigrant status under the new provision, the law set the termination date for the required one-year employment period at September 30, 2015, the deadline to apply to the Chief of Mission at December 31, 2015, and the expiration date for the visa issuance authority at March 31, 2017.", "Legislation passed in the 114 th Congress further amended the Afghan SIV program. The NDAA for FY2016 increased from 4,000 to 7,000 the number of additional special immigrant visas available for issuance after December 19, 2014, and provided that these visas would remain available until used. The act also modified the employment requirements for certain applicants, requiring no less than two years of employment for those filing petitions after September 30, 2015, and extended both the employment period for eligibility and the application deadline until December 31, 2016. Regarding the future of the Afghan SIV program, the act included the following provision:", "It is the sense of Congress that the necessity of providing special immigrant status under this subsection should be assessed at regular intervals by the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives, taking into account the scope of the current and planned presence of United States troops in Afghanistan, the current and prospective numbers of citizens and nationals of Afghanistan employed ... and the security climate in Afghanistan.", "The NDAA for FY2017 increased the number of additional special immigrant visas to 8,500 and extended both the employment eligibility period and the application deadline to December 31, 2020. At the same time, it placed restrictions on qualifying employment for, or on behalf of, the U.S. government for visa issuance purposes for applications filed after the law's December 23, 2016, date of enactment. For these applications, eligibility is limited to Afghans employed in Afghanistan (1) to serve as interpreters and translators, particularly while traveling away from U.S. embassies and consulates with personnel of the Department of State or the U.S. Agency for International Development or traveling off-base with U.S. military personnel; or (2) to perform sensitive activities for the U.S. government in Afghanistan. ", "In the 115 th Congress, the FY2017 Consolidated Appropriations Act increased the number of additional visas available under the SIV program for Afghans who were employed by, or on behalf of, the U.S. government from 8,500 to 11,000. The NDAA for FY2018 provided 3,500 additional visas under this program, for a total of 14,500 visas available for issuance after December 19, 2014. The employment termination date and the application deadline remained unchanged at December 31, 2020.", "In the 116 th Congress, the FY2019 Consolidated Appropriations Act makes an additional 4,000 visas available under the SIV program for Afghans who were employed by, or on behalf of, the U.S. government, for a total of 18,500 visas available for issuance after December 19, 2014. The employment termination date and the application deadline remain unchanged at December 31, 2020. This law also makes the funding for the additional 4,000 visas conditional on the Secretary of State developing a system for prioritizing the processing of Afghan SIV applications and submitting specified reports, including a report on processing improvements that was required under the NDAA for FY2019 (see \" Application Processing \")."], "subsections": []}]}, {"section_title": "Conversion of Petitions", "paragraphs": ["As noted, since FY2009, the annual numerical limit on the Section 1059 program for translators and interpreters has been 50, well below the numerical limits on the programs for Iraqis and Afghans who were employed by, or on behalf of, the U.S. government in Iraq or Afghanistan, respectively. A 2008 law authorized the Secretary of Homeland Security or the Secretary of State to convert an approved special immigrant petition under the former program (filed before October 1, 2008) for which a visa was not immediately available to an approved petition under the latter program and subject to the numerical limits of that latter program."], "subsections": []}]}, {"section_title": "Iraqi and Afghan Special Immigrant Visa Application Process", "paragraphs": ["The process of applying for an Iraqi or Afghan special immigrant visa has multiple steps. The application process described in this section is for Iraqis and Afghans who are abroad, who represent the vast majority of applicants. (An applicant in the United States whose petition for classification as a special immigrant is approved under the process described below could then submit an application to adjust status along with supporting documentation; applicants in the United States do not go through the visa process.) ", "The first step under the programs for Iraqis and Afghans who worked for or on behalf of the United States is to apply for Chief of Mission approval. To apply, the principal applicant must submit documentation to the Department of State (DOS), including, among other required information, a letter from the applicant's employer confirming employment; a letter of recommendation from the applicant's direct U.S. citizen supervisor; and a statement from the applicant describing the threats he or she received as a result of his or her U.S. government employment. If approval is granted, the applicant receives a Chief of Mission approval letter. ", "The next step for applicants under the special immigrant programs for Iraqis and Afghans who worked for, or on behalf of, the United States\u2014and the first step for applicants under the program for translators and interpreters\u2014is to file a petition with the Department of Homeland Security's U.S. Citizenship and Immigration Services (DHS/USCIS) along with accompanying documents. In the case of the program for those who worked for, or on behalf of, the United States, the required documents include copies of the Chief of Mission approval letter and of the letter of recommendation from the direct supervisor. In the case of the program for translators or interpreters, the required documents include evidence of qualifying employment, a letter of recommendation from the Chief of Mission or a general or flag officer in the relevant U.S. Armed Forces unit, and evidence of a background check and screening by the Chief of Mission or the U.S. Armed Forces.", "A petition for classification as an Iraqi or Afghan special immigrant that is approved by USCIS is forwarded to DOS's National Visa Center (NVC), which contacts the applicant to advise him or her to begin collecting required documents. The applicant must submit forms and documents for all family members applying for visas to the NVC. In addition to the immigrant visa application, these materials include copies of passport biodata pages, birth certificates, and civil documents; police certificates, if applicable; and a refugee benefits election form, indicating whether the applicant, if approved to receive a special immigrant visa, would like to participate in DOS's Reception and Placement program and receive associated benefits (see \" Resettlement Assistance and Federal Public Benefits \").", "The NVC schedules an in-person visa interview for the principal applicant and any family members at a U.S. embassy or consulate abroad. The interview is required to determine eligibility for a visa. Applicants' fingerprints are taken at the time of the interview. Applicants are also required to have a medical examination at their own cost. After the interview, the consular office informs the applicant about any missing documentation and about any problems with the case that may prevent issuance of a visa. Many cases require additional \"administrative processing\" after the interview. ", "Applicants who are issued visas and who have elected to participate in DOS's resettlement program must have their travel to the United States arranged by the International Organization for Migration. Visa recipients who have elected not to participate in DOS's resettlement program are responsible for making their own travel arrangements. Upon admission to the United States, SIV recipients obtain LPR status."], "subsections": []}, {"section_title": "Comparison of Special Immigrants to Other Selected Admissions Categories", "paragraphs": ["Special immigrant classifications have been established to provide for the permanent admission to the United States of specific populations. As noted, special immigrants comprise a subcategory of permanent employment-based immigrants in the INA, although they are not, in fact, admitted for employment purposes. While the special immigrant category is unique, it does bear similarities to other admission categories that are authorized by other sections of the INA."], "subsections": [{"section_title": "Refugees", "paragraphs": ["Unlike special immigrants, refugees comprise a category of humanitarian admissions under the INA. As defined in the INA, a refugee is a person who is unwilling or unable to return to his or her home country \"because of persecution or a well-founded fear of persecution on account of race, religion, nationality, membership in a particular social group, or political opinion.\" Refugees accepted for admission to the United States can be accompanied by their spouses and children. The admissions process for refugees is separate from and different than the process for immigrants. After one year in refugee status, they are required to apply to adjust to LPR status. By contrast, special immigrants, like immigrants generally, are granted LPR status upon admission to the United States.", "Despite the definitional and procedural differences, there is overlap between the refugee category and the special immigrant category, particularly the special immigrant classifications for Iraqis and Afghans. And the same individuals may be eligible to apply for both refugee status and for classification under one of the Iraqi or Afghan special immigrant programs. Unlike the refugee category, the special immigrant classifications for Iraqis and Afghans do not require a showing of persecution. At the same time, the statutory definitions of an eligible alien for the special immigrant programs for Iraqis and Afghans who worked for, or on behalf of, the United States include the following: \"has experienced or is experiencing an ongoing serious threat as a consequence of the alien's employment by the United States Government.\"", "Another similarity between the special immigrant and refugee categories concerns the element of having a connection to the United States. As noted in the preceding legislative history discussion, U.S. government service is a common feature in special immigrant classifications, including those for Iraqis and Afghans. A U.S. connection also may facilitate access to the U.S. refugee admissions program. Overseas refugee processing is conducted through a system of three priorities for admission. The priorities provide access to U.S. resettlement consideration. Priority 1, which covers refugees for whom resettlement seems to be the appropriate durable solution, applies to all nationalities and requires no connection to the United States. A U.S. connection, however, is a factor under Priorities 2 and 3, which provide more direct access to the U.S. refugee admissions program. Priority 2 covers specified groups of special humanitarian concern to the United States, which may be defined by their nationalities, clans, ethnicities, or other characteristics. A U.S. connection is a required element for some Priority 2 groups, such as Iraqis associated with the United States. Priority 3, which is limited to designated nationalities, covers family reunification cases and requires the prospective refugee to have an eligible relative in the United States."], "subsections": [{"section_title": "Resettlement Assistance and Federal Public Benefits", "paragraphs": ["Iraqi and Afghan special immigrants are treated like refugees for purposes of federal public benefits. Under the refugee provisions in the INA, some inadmissibility grounds are not applicable to refugees. The inapplicable grounds include public charge, as is the case with Iraqi and Afghan special immigrants. Relatedly, needy refugees are eligible for resettlement assistance through programs administered by DOS and the Department of Health and Human Services' Office of Refugee Resettlement (HHS/ORR). Under DOS's Reception and Placement program, public and private, nonprofit entities provide new arrivals with initial resettlement services and referrals to other services, as needed. ORR's refugee resettlement programs provide transitional assistance to refugees and other designated groups. Refugees are also subject to special rules with respect to federal public benefits, such as Medicaid and Supplemental Security Income (SSI) for the Aged, Blind and Disabled. ", "While Iraqi and Afghan special immigrants are now eligible for the same federal public assistance as refugees, this was not always the case. The original law establishing the special immigrant program for Iraqi and Afghan translators included no language on eligibility for resettlement support. Subsequent laws on the Iraqi and Afghan special immigrant programs made Iraqis and Afghans eligible for refugee assistance and benefits on a time-limited basis. With the enactment of the NDAA for FY2010, special immigrants from Iraq and Afghanistan became eligible for the same resettlement assistance, entitlement programs, and other benefits as refugees and for the same periods of time."], "subsections": []}]}, {"section_title": "Amerasian Children", "paragraphs": ["Amerasian children, like Iraqis and Afghans who have assisted the U.S. government, are the subject of special permanent admissions provisions in the INA. The Amerasian provisions have a humanitarian component, but, like the special immigrant provisions, are not a category of humanitarian admissions. Instead, Amerasian children are admitted to the United States under the permanent family-based immigration provisions of the INA (as opposed to the employment-based provisions under which special immigrants are admitted). A law enacted in 1982 amended the INA to provide for the admission to the United States as family-based immigrants of individuals born in Korea, Vietnam, Laos, Kampuchea (Cambodia), or Thailand between 1950 and 1982 with U.S. citizen fathers. An immigrant petition could be filed by the eligible individual or by another person on behalf of an eligible individual. Beneficiaries could not be accompanied to the United States by their mothers or other relatives. In the case of minors, the 1982 law required the mother or guardian to sign a written release and provided for placement of the child with a U.S. citizen or LPR sponsor. ", "A subsequent law enacted in 1987, as amended, eliminated some of restrictions on the immigration of Amerasian children. The 1987 law, which provided for the admission to the United States as immigrants of Vietnamese nationals born in Vietnam between 1962 and 1976 and fathered by a U.S. citizen, permitted the beneficiary to be accompanied by a mother, a spouse, and children. The 1987 law, as amended, also made the public charge ground of inadmissibility inapplicable to these aliens and made them eligible for benefits under the refugee provisions of the INA. With these changes, the treatment of this group became more similar to that of refugees and today's Iraqi and Afghan special immigrants. "], "subsections": []}]}, {"section_title": "Special Immigrant Visa Statistics", "paragraphs": ["Through the end of FY2018, more than 79,000 individuals had been issued special immigrant visas abroad, or been adjusted to LPR status in the United States, under the special immigrant classifications for Iraqi and Afghan nationals. Principal applicants accounted for about 26,000 of the total; dependent spouses and children accounted for the remaining 53,000. Table 2 provides data on the special immigrant classification for Iraqi and Afghan translators and interpreters. Table 3 provides data on the special immigrant classification for Iraqis and Afghans who were employed by, or on behalf of, the U.S. government in Iraq or Afghanistan, respectively. As shown in Table 3 and as discussed in the next section, there was a significant drop in visa issuances from FY2017 to FY2018. The tables are mutually exclusive; an individual appears in only one table. (The Appendix contains separate tables for Iraqis and Afghans for each special immigrant classification.) "], "subsections": []}, {"section_title": "Selected Challenges", "paragraphs": ["There is a fundamental tension in the administration of the Iraqi and Afghan SIV programs between a sense of urgency to issue visas in a timely fashion to eligible individuals and a need to conduct appropriate security screening. This tension is quite sharp because on the one hand these programs are aimed at individuals who assisted the United States and face danger because of it, and on the other hand there are serious concerns that this population may pose security threats. Overlaying this dynamic is the structure of the SIV programs themselves, with statutory timeframes and numerical limitations."], "subsections": [{"section_title": "Application Processing", "paragraphs": ["The Iraqi and Afghan SIV application process has been subject to much criticism. According to a February 2014 PBS NewsHour piece on the SIV program for Afghans who worked for, or on behalf of, the U.S. government:", "Critics describe the process of applying for a visa as opaque, prohibitively complicated and painfully slow, putting the applicant's [ sic ] lives at risk with each passing month that their visas aren't approved.", "In a 2010 assessment of the SIV program for Iraqis who worked for, or on behalf of, the U.S. government, another observer characterized the application process as a series of procedural barriers and argued that it was impossible to navigate the process without English-speaking legal assistance. Anecdotal reports describe years-long waits for approval, layers of bureaucracy, and unexpected denials.", "DOS has acknowledged past problems processing Afghan SIV applications but has also cited changes to improve the efficiency of the system. In the 2014 PBS NewsHour piece, Jarrett Blanc, Deputy Special Representative for Afghanistan and Pakistan, identified the need for approval by the Chief of Mission committee in the U.S. embassy in Kabul, Afghanistan, as a \"key bottleneck at the start of the process\" that has been addressed. Blanc explained that by increasing the number of committees handling cases, applications could be reviewed within two weeks of filing.", "Other changes to the Iraqi and Afghan SIV programs implemented by DOS to decrease processing times were enumerated by Janice Jacobs, former Assistant Secretary of State for Consular Affairs, in written testimony for a July 2011 Senate hearing:", "We no longer require documentation that we found to be redundant; we have decreased the amount of paperwork that must be submitted by mail in favor of electronic submissions; and we have reorganized internal procedures so that the process moves faster.", "Incomplete applications also present problems. In response to questions on the SIV program for Iraqis who worked for, or on behalf of, the U.S. government following an October 2011 Senate Judiciary Committee oversight hearing, DHS referred to obstacles faced by SIV applicants in preparing their applications. The cited obstacles included difficulties obtaining a recommendation from a supervisor and a copy of the work contract. In his comments on the parallel Afghan SIV program for the PBS NewsHour piece, Blanc argued that the Afghan applicants share responsibility for the processing delays by failing to submit all the necessary paperwork. ", "The Department of Homeland Security reported at a December 2012 House Homeland Security Committee hearing that it takes between 3 and 10 days, on average, to process an Iraqi or Afghan SIV petition. The department indicated in response to a question following the October 2011 Senate Judiciary Committee hearing that it did not need additional resources to expedite SIV petition processing (see \" Iraqi and Afghan Special Immigrant Visa Application Process \").", "The 113 th Congress enacted legislation to amend the SIV programs for Afghans and Iraqis who worked for, or on behalf of, the U.S. government to address application processing-related concerns. The FY2014 NDAA established a review process for denial of Chief of Mission approval under each program. More generally, this law directed the Secretary of State and the Secretary of Homeland Security, in consultation with the Secretary of Defense, to make changes to the processing of applications under each program such that \"all steps ... incidental to the issuance of such visas, including required screenings and background checks, should be completed not later than 9 months after the date on which an eligible alien submits all required materials to complete an application for such visa.\" At the same time, the act included an exception to the nine-month limit in \"high-risk cases for which satisfaction of national security concerns requires additional time.\" ", "The FY2014 NDAA included reporting requirements related to application processing under the SIV programs for Afghans and Iraqis who worked for, or on behalf of, the U.S. government. It required the Secretary of State and the Secretary of Homeland Security, in consultation with the Secretary of Defense, to report to Congress on the implementation of improvements to SIV application processing under both programs. The FY2019 NDAA subsequently required a new report on the implementation of SIV application processing improvements under the Afghan program. The July 2018 conference report on this legislation noted concern that \"the SIV application process continues to suffer from inadequate interagency coordination which has resulted in undue delay, needless stress on applicants, and a sizable drop in SIV admissions this year.\"", "In addition to requiring a congressional report, the FY2014 NDAA provided for public reports on Iraqi and Afghan SIV application processing. It required the Secretary of State and the Secretary of Homeland Security, in consultation with the Secretary of Defense, to publish quarterly reports describing improvements in efficiency in SIV application processing. The first quarterly reports on the Iraqi and Afghan SIV programs, dated April 2014, stated that the \"U.S. government has devoted resources to reducing the amount of time required to complete the SIV process.\" Similar language appears in all subsequent quarterly reports on the Iraqi program through the most recent July 2018 report, and in all subsequent quarterly reports on the Afghan program through the April 2017 report. ", "Among other data, the quarterly reports on the Iraqi and Afghan SIV programs include average total U.S. government processing time for SIV applications. This statistic excludes any steps in the application process that are the responsibility of the applicant, such as filing a petition with USCIS (see \" Iraqi and Afghan Special Immigrant Visa Application Process \"). In the initial April 2014 quarterly reports, average total U.S. government processing time was 239 business days for the Iraqi program and 287 business days for the Afghan program. In the January 2016 reports, average total U.S. government processing time was 311 business days for the Iraqi program and 293 business days for the Afghan program. In the most recent quarterly reports for July 2018, average total U.S. government processing time was 252 calendar days for the Iraqi program and 692 calendar days for the Afghan program. ", "A lawsuit challenging the delays in processing Iraqi and Afghan SIV applications was filed in federal court in the District of Columbia in June 2018. It remains pending as of the date of this report."], "subsections": []}, {"section_title": "Security Concerns", "paragraphs": ["As suggested by the \"high-risk cases\" language cited in the preceding section, protecting U.S. national security remains a major concern about the Iraqi and Afghan SIV programs. Iraqi and Afghan SIV applicants are subject to security checks conducted by DHS and DOS, a process that involves coordination with other agencies. ", "Details of the security review process are not publicly available. In her written testimony for the July 2011 Senate hearing, Jacobs said, \"While we cannot discuss specifics for security reasons, SIV applicants from Iraq as well as Afghanistan undergo multiple layers of review.\" ", "In written responses to questions following an April 2013 Senate Foreign Relations Committee hearing, then-Secretary of State John Kerry identified the interagency security screening process as one of the \"major obstacles\" to the quick processing of Afghan SIV applications. Indicating that security screening \"takes the most time,\" he offered that \"the Department of State is working constantly with our interagency counterparts to streamline this comprehensive and essential process while eliminating bottlenecks.\" ", "Scrutiny of the security review process for Iraqi and Afghan SIV applicants increased in 2011 following the arrest on terrorism charges of two Iraqi nationals who had entered the United States through the U.S. refugee program. The potential security risks posed by prospective refugees and special immigrants from Iraq and elsewhere were discussed at the December 2012 House hearing cited above, which was entitled Terrorist Exploitation of Refugee Programs . At the hearing, then-DHS Deputy Under Secretary for Analysis Dawn Scalici described U.S. government efforts to identify potential threats:", "When we look at on [ sic ] the potential in the future for terrorist groups to exploit the refugee program, we do have concerns. Hence, we have the enhanced security and vetting procedures.... I will tell you that we have intelligence-driven processes regardless of the immigration program that a terrorist actor may seek to use or just travel to the United States. We are reviewing intelligence on a regular basis, sharing that with interagency partners and developing the procedures by which we can help to identify and further [screen] individuals of concern.", "The quarterly reports on application processing under the SIV programs for Iraqis and Afghans who worked for, or on behalf of, the U.S. government mention security screening. For example, the July 2018 reports for both programs reference \"thorough screening for national security concerns.\" Neither Iraq nor Afghanistan is among the countries subject to entry restrictions or limitations under President Donald Trump's September 2017 presidential proclamation on enhanced vetting. Regarding Iraq, however, the proclamation includes a recommendation from the Secretary of Homeland Security that \"nationals of Iraq who seek to enter the United States be subject to additional scrutiny to determine if they pose risks to the national security or public safety of the United States.\""], "subsections": []}, {"section_title": "Visa Availability", "paragraphs": ["The SIV program for Iraqi and Afghan translators and interpreters is ongoing, while the programs for Iraqis and Afghans who worked for, or on behalf of, the U.S. government are temporary. As of the date of this report, the temporary Afghan program and the temporary Iraqi program are scheduled to end when all the available visas are issued.", "As detailed above, each of the three SIV programs has been subject to statutory numerical limitations from the start. The numerical limitations language in the statutes creating the programs for Iraqis and Afghans who worked for, or on behalf of, the U.S. government also provided for the carryover of unused visas from a given fiscal year to the next during a specified period (see \" Special Immigrant Visas for Iraqis and Afghans \").", "In the case of the program for Iraqis who worked for, or on behalf of, the U.S. government, as amended, any of the 5,000 visas made available annually for principal aliens for FY2008 through FY2012 that were not used in a given fiscal year were carried forward to the next fiscal year , with unused visas for FY2012 carried forward to FY2013. Visas that were carried forward but not used in that next fiscal year were lost. At the end of FY2013, the Iraqi program ended and any remaining visas were lost. The program was subsequently revived and new visas were authorized. Currently, P.L. 113-66 provides for the issuance of 2,500 visas to principal aliens under the Iraqi program after January 1, 2014. This law required that applications be filed by September 30, 2014, but included no deadline for issuance of the visas.", "Under the program for Afghans who worked for, or on behalf of, the U.S. government, as originally authorized, any of the 1,500 visas made available annually for principal aliens for FY2009 through FY2013 that were not used in a given fiscal year were carried forward to the next fiscal year. P.L. 113-76 provided for the issuance of 3,000 visas to principal aliens for FY2014 and for the carrying forward of any unused balance for issuance in FY2015. As under the Iraqi program, carried-over visas that were not used in the second fiscal year were lost.", "Subsequent Afghan special immigrant visa provisions enacted by the 113 th Congress made additional visas available subject to specified employment periods, application deadlines, and visa issuance authority expiration dates. Legislation enacted by the 114 th , 115 th , and 116 th Congresses made additional visas available for issuance after December 14, 2014, but provided that these visas would remain available until used. Some of these laws also extended employment termination dates and application deadlines (see \" Afghan Program \"). In 2014 and 2017, DOS temporarily stopped scheduling interviews for Afghan special immigrant visa applicants due to a dwindling stock of available visas. The FY2019 Consolidated Appropriations Act provides for the issuance of a total of 18,500 visas to principal aliens under the Afghan program after December 19, 2014.", "The SIV program for translators and interpreters is capped at 50 visas for principal aliens per year. It has been capped at this level for each year except for FY2007 and FY2008, when the cap stood at 500. This program did not originally include carryover provisions, but such language was later added by amendment. As under the other SIV programs, visas that are carried forward but not used in the next fiscal year are lost.", "Consideration of these numerical limitation and carryover provisions, in conjunction with the visa issuance data for the SIV programs for Iraqis and Afghans who worked for, or on behalf of, the U.S. government (in Table A-3 and Table A-4 in the Appendix ), indicates that thousands of visas provided for these two programs are no longer available. As shown in the tables, through FY2013, visa issuances under both programs consistently fell well below the statutory limits. Under current statutory provisions for the SIV programs for Iraqis and Afghans who worked for, or on behalf of, the U.S. government, as described above, there are no deadlines for the issuance of the visas. "], "subsections": []}]}, {"section_title": "Conclusion", "paragraphs": ["There seems to be broad agreement that the United States should admit for permanent residence Iraqis and Afghans who assisted the U.S. government overseas, provided that they do not pose security risks. Yet implementing the SIV programs intended to accomplish this policy goal has proven difficult. Given the seeming consensus that the U.S. government should assist its Iraqi and Afghan employees in need, an ongoing question for Congress is whether the existing SIV provisions are sufficient to accomplish this, or whether further extensions of the temporary SIV programs for Iraqis and Afghans who worked for, or on behalf of, the U.S. government, or other changes to the SIV provisions are warranted."], "subsections": [{"section_title": "Appendix. Additional Special Immigrant Data", "paragraphs": ["Iraqi and Afghan Translators and Interpreters", " Table 2 in the main body of the report provides data on visa issuances to Iraqis and Afghans (combined) under the special immigrant program for translators and interpreters. The tables here present visa issuance data under this program for Iraqis and Afghans separately. Table A-1 provides data on Iraqi nationals who were issued special immigrant visas, or who adjusted to LPR status in the United States, under the special immigrant program for translators and interpreters. Table A-2 provides comparable data for Afghan nationals. Both Table A-1 and Table A-2 exclude certain dependents that are included in Table 2 . These are dependents (27 in total) who received a special immigrant visa or adjusted status under the translator/interpreter program and are Iraqi or Afghan nationals but were born in a third country. These 27 dependents account for the discrepancy between these tables and Table 2 . The significant decreases in Table A-1 and Table A-2 after FY2008 reflect changes in the numerical limitations on this classification (see \" Aliens Who Worked as Translators or Interpreters \").", "Iraqis and Afghans Who Worked for the U.S. Government", " Table 3 in the main body of the report provides data on visa issuances to Iraqis and Afghans (combined) under the special immigrant programs for Iraqis and Afghans who worked for the U.S. government. The tables here present visa issuance data under these programs for Iraqis and Afghans separately. Table A-3 provides data on Iraqi nationals who were issued special immigrant visas, or who adjusted to LPR status in the United States, under the special immigrant program for Iraqis who were employed in Iraq by, or on behalf of, the U.S. government. Table A-4 provides comparable data for Afghan nationals under the special immigrant program for Afghans who were employed in Afghanistan by, or on behalf of, the U.S. government or by the International Security Assistance Force. Both Table A-3 and Table A-4 exclude certain dependents that are included in Table 3 . These are dependents (477 in total) who received a special immigrant visa or adjusted status under these programs and are Iraqi or Afghan nationals but were born in a third country. These 477 dependents account for the discrepancy between these tables and Table 3 ."], "subsections": []}]}]}}
{"id": "R40082", "title": "Medicare: Part B Premiums", "released_date": "2019-04-04T00:00:00", "summary": ["Medicare is a federal insurance program that pays for covered health care services of most individuals aged 65 and older and certain disabled persons. In calendar year 2019, the program is expected to cover about 61 million persons (52 million aged and 9 million disabled) at a total cost of $798 billion. Most individuals (or their spouses) aged 65 and older who have worked in covered employment and paid Medicare payroll taxes for 40 quarters receive premium-free Medicare Part A (Hospital Insurance). Those entitled to Medicare Part A (regardless of whether they are eligible for premium-free Part A) have the option of enrolling in Part B, which covers such things as physician and outpatient services and medical equipment.", "Beneficiaries have a seven-month initial enrollment period, and those who enroll in Part B after this initial enrollment period and/or reenroll after a termination of coverage may be subject to a late-enrollment penalty. This penalty is equal to a 10% surcharge for each 12 months of delay in enrollment and/or reenrollment. Under certain conditions, some beneficiaries are exempt from the late-enrollment penalty; these exempt beneficiaries include working individuals (and their spouses) with group coverage through their current employment, some international volunteers, and those granted \"equitable relief.\"", "Whereas Part A is financed primarily by payroll taxes paid by current workers, Part B is financed through a combination of beneficiary premiums and federal general revenues. The standard Part B premiums are set to cover 25% of projected average per capita Part B program costs for the aged, with federal general revenues accounting for the remaining amount. In general, if projected Part B costs increase or decrease, the premium rises or falls proportionately. However, some Part B enrollees are protected by a provision in the Social Security Act (the hold-harmless provision) that prevents their Medicare Part B premiums from increasing more than the annual increase in their Social Security benefit payments. This protection does not apply to four main groups of beneficiaries: low-income beneficiaries whose Part B premiums are paid by the Medicaid program; high-income beneficiaries who are subject to income-related Part B premiums; those whose Medicare premiums are not deducted from Social Security benefits; and new Medicare and Social Security enrollees.", "Most Part B participants must pay monthly premiums, which do not vary with a beneficiary's age, health status, or place of residence. However, since 2007, higher-income enrollees pay higher premiums to cover a higher percentage of Part B costs. Additionally, certain low-income beneficiaries may qualify for Medicare cost-sharing and/or premium assistance from Medicaid through a Medicare Savings Program. The premiums of those receiving benefits through Social Security are deducted from their monthly payments.", "Each year, the Centers for Medicare & Medicaid Services (CMS) determines the Medicare Part B premiums for the following year. The standard monthly Part B premium for 2019 is $135.50. However, in 2019, the hold-harmless provision applies to about 3.5% of Part B enrollees, and these individuals pay lower premiums. (The premiums of those held harmless vary depending on the dollar amount of the increase in their Social Security benefits.) Higher-income beneficiaries, currently defined as individuals with incomes over $85,000 per year or couples with incomes over $170,000 per year, pay $189.60, $270.90, $352.20, $433.40, or $460.50 per month, depending on their income levels.", "Starting in 2018, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA; P.L. 114-10) reduced the income thresholds in the highest two income tiers so that more enrollees will pay higher premiums. The Bipartisan Budget Act of 2018 (BBA 18; P.L. 115-123) added an additional income tier beginning in 2019 for individuals with annual incomes of $500,000 or more or couples filing jointly with incomes of $750,000 or more.", "Current issues related to the Part B premium that may come before Congress include the amount of the premium and its rate of increase (and the potential net impact on Social Security benefits), the impact of the hold-harmless provision on those not held harmless, modifications to the late-enrollment penalty, and possible increases in Medicare premiums as a means to reduce federal spending and deficits."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Medicare is a federal insurance program that pays for covered health care services of most individuals aged 65 and older and certain disabled persons. Medicare serves approximately one in six Americans and virtually all of the population aged 65 and over. In calendar year (CY) 2019, the program is expected to cover about 61 million persons (52 million aged and 9 million disabled) at a total cost of about $798 billion, accounting for approximately 3.8% of gross domestic product. The Medicare program is administered by the Centers for Medicare & Medicaid Services (CMS) within the Department of Health and Human Services (HHS), and individuals enroll in Medicare through the Social Security Administration (SSA).", "Medicare consists of four parts\u2014Parts A through D. Part A covers hospital services, skilled nursing facility services, home health visits, and hospice services. Part B covers a broad range of medical services and supplies, including physician services, laboratory services, durable medical equipment, and outpatient hospital services. Enrollment in Part B is voluntary; however, most Medicare beneficiaries (about 91%) are enrolled in Part B. Part C (Medicare Advantage) provides private plan options, such as managed care, for beneficiaries who are enrolled in both Part A and Part B. Part D provides optional outpatient prescription drug coverage. ", "Each part of Medicare is funded differently. Part A is financed primarily through payroll taxes imposed on current workers (2.9% of earnings, shared equally between employers and workers), which are credited to the Hospital Insurance (HI) Trust Fund. Beginning in 2013, workers with annual wages over $200,000 for single tax filers or $250,000 for joint filers pay an additional 0.9%. Beneficiaries generally do not pay premiums for Part A. In 2019, total Part A expenditures are expected to reach about $328 billion, representing about 41% of program costs. Parts B and D, the voluntary portions, are funded through the Supplementary Medical Insurance (SMI) Trust Fund, which is financed primarily by general revenues (transfers from the U.S. Treasury) and premiums paid by enrollees. In 2019, about $2.8 billion in fees on manufacturers and importers of brand-name prescription drugs also will be used to supplement the SMI Trust Fund. In 2019, Part B expenditures are expected to reach about $367 billion, and Part D expenditures are expected to reach about $104 billion, representing 46% and 13% of program costs, respectively. (Part C is financed proportionately through the HI and SMI Trust Funds; expenditures for Parts A and B services provided under Part C are included in the above expenditure figures.)", "Part B beneficiary premiums are normally set at a rate each year equal to 25% of average expected per capita Part B program costs for the aged for the year. Higher-income enrollees pay higher premiums set to cover a greater percentage of Part B costs, while those with low incomes may qualify for premium assistance through one of several Medicare Savings Programs administered by Medicaid. Individuals who receive Social Security or Railroad Retirement Board (RRB) retirement or disability benefits have their Part B premiums automatically deducted from their benefit checks. Part B premiums are generally announced in the fall prior to the year that they are in effect (e.g., the 2019 Part B premiums were announced in October 2018).", "In 2019, the standard monthly Part B premium is $135.50. However, about 3.5% of Part B enrollees are protected by a hold-harmless provision in the Social Security Act that prevents their Medicare Part B premiums from increasing more than the annual dollar amount of the increase in their Social Security benefit payments. These individuals pay premiums of less than $135.50. ", "In addition to premiums, Part B beneficiaries may pay other out-of-pocket costs when they use services. The annual deductible for Part B services is $185.00 in 2019. After the annual deductible is met, beneficiaries are responsible for coinsurance costs, which are generally 20% of Medicare-approved Part B expenses.", "This report provides an overview of Medicare Part B premiums, including information on Part B eligibility and enrollment, late-enrollment penalties, collection of premiums, determination of annual premium amounts, premiums for high-income enrollees, premium assistance for low-income enrollees, protections for Social Security recipients from rising Part B premiums, and historical Medicare Part B premium trends. This report also provides a summary of various premium-related issues that may be of interest to Congress. Specific Medicare and Social Security publications and other resources for beneficiaries, and those who provide assistance to them, are cited where appropriate."], "subsections": []}, {"section_title": "Medicare Part B Eligibility and Enrollment", "paragraphs": ["An individual (or the spouse of an individual) who has worked in covered employment and paid Medicare payroll taxes for 40 quarters is entitled to receive premium-free Medicare Part A benefits upon reaching the age of 65. Those who have paid in for fewer than 40 quarters may enroll in Medicare Part A by paying a premium. All persons entitled to Part A (regardless of whether they are eligible for premium-free Part A) are also entitled to enroll in Part B. An aged person not entitled to Part A may enroll in Part B if he or she is aged 65 or over and either a U.S. citizen or an alien lawfully admitted for permanent residence who has resided in the United States continuously for the immediately preceding five years.", "Those who are receiving Social Security or RRB benefits are automatically enrolled in Medicare, and coverage begins the first day of the month they turn 65. These individuals will receive a Medicare card and a \"Welcome to Medicare\" package about three months before their 65 th birthday. Those who are automatically enrolled in Medicare Part A also are automatically enrolled in Part B. However, because beneficiaries must pay a premium for Part B coverage, they have the option of turning it down. Disabled persons who have received cash payments for 24 months under the Social Security or RRB disability programs also automatically receive a Medicare card and are enrolled in Part B unless they specifically decline such coverage. Those who choose to receive coverage through a Medicare Advantage plan (Part C) must enroll in Part\u00a0B.", "Persons who are not receiving Social Security or RRB benefits, for example because they are still working or have chosen to defer enrollment because they have not yet reached their full retirement benefit eligibility age, must file an application with the SSA or RRB for Medicare benefits. There are two kinds of enrollment periods, one that occurs when individuals are initially eligible for Medicare and one annual general enrollment period for those who missed signing up during their initial enrollment period. A beneficiary may drop Part B enrollment and reenroll an unlimited number of times; however, premium penalties may be incurred."], "subsections": [{"section_title": "Initial Enrollment Periods", "paragraphs": ["Those who are not automatically enrolled in Medicare may sign up during a certain period when they first become eligible. The initial enrollment period is seven months long and begins three months before the month in which the individual first turns 65. (See Table 1 .) Beneficiaries who do not file an application for Medicare benefits during their initial enrollment period could be subject to the Part B late-enrollment penalty. (See \" Late-Enrollment Premium Penalty and Exemptions .\") If an individual accepts the automatic enrollment in Medicare Part B, or enrolls in Medicare Part B during the first three months of the initial enrollment period, coverage will start with the month in which an individual is first eligible, that is, the month of the individual's 65 th birthday. Those who enroll during the last four months will have their coverage start date delayed from one to three months after enrollment. The initial enrollment period of those eligible for Medicare based on disability or permanent kidney failure is linked to the date the disability or treatment began."], "subsections": []}, {"section_title": "General Enrollment Period", "paragraphs": ["An individual who does not sign up for Medicare during the initial enrollment period must wait until the next general enrollment period. In addition, persons who decline Part B coverage when first eligible, or terminate Part B coverage, must also wait until the next general enrollment period to enroll or reenroll. The general enrollment period lasts for three months from January 1 to March 31 of each year, with coverage beginning on July 1 of that year. A late-enrollment penalty may apply."], "subsections": []}]}, {"section_title": "Late-Enrollment Premium Penalty and Exemptions", "paragraphs": ["Beneficiaries who do not sign up for Part B when first eligible, or who drop it and then sign up again later, may have to pay a late-enrollment penalty for as long as they are enrolled in Part B. Monthly premiums for Part B may go up 10% for each full 12-month period that one could have had Part B but did not sign up for it. (See \" Calculation of Penalty .\") Some may be exempt from paying a late-enrollment penalty if they meet certain conditions that allow them to sign up for Part B during a special enrollment period (SEP). (See \" Penalty Exemptions .\") In 2018, about 1.4% of Part B enrollees (about 760,000) paid this penalty. On average, their total premiums (standard premium plus penalty) were about 28% higher than what they would have been had they not been subject to the penalty. ", "Those who receive premium assistance through a Medicare Savings Program do not pay the late-enrollment penalty. Additionally, for those disabled persons under the age of 65 subject to a premium penalty, once the individual reaches the age of 65, he or she qualifies for a new enrollment period and no longer pays a penalty.", "The penalty provision was included in the original Medicare legislation enacted in 1965 to help prevent adverse selection by creating a strong incentive for all eligible beneficiaries to enroll in Part B. Adverse selection occurs when only those persons who think they need the benefits actually enroll in the program. When this happens, per capita costs are driven up and premiums go up, causing more enrollees (presumably the healthier and less costly ones) to drop out of the program. With most eligible persons over the age of 65 enrolled in Part B, the costs are spread over the majority of this population and per capita costs are less than would be the case if adverse selection had occurred. ", "As the Part B late-enrollment penalty is tied to Medicare eligibility and not to access to covered services, individuals who live in areas where Medicare benefits are generally not provided, such as outside of the United States or in prison, could still be subject to the Part B late-enrollment penalty if they do not sign up for (or if they drop) Part B when eligible. To illustrate, if a retired Medicare-eligible individual stopped paying Part B premiums while living overseas for a three-year period and reenrolled when returning to the United States, he or she would not be entitled to a SEP. This individual would instead need to enroll during the general enrollment period and could also be subject to late-enrollment penalties based on that three-year lapse in coverage. ", "Additionally, Part B does not have a \"creditable\" coverage exemption similar to that under the Part D outpatient prescription drug benefit. Except for certain circumstances discussed below, having equivalent coverage does not entitle one to a SEP should one decide to enroll in Part B later. For example, an individual who has retiree coverage similar to Part B and therefore decides not to enroll in Part B when first eligible could be subject to late-enrollment penalties if he or she enrolls in Part B at a later time (for example, because the retiree coverage was discontinued)."], "subsections": [{"section_title": "Calculation of Penalty", "paragraphs": ["The late-enrollment penalty is equal to a 10% premium surcharge for each full 12 months of delay in enrollment and/or reenrollment during which the beneficiary was eligible for Medicare. The period of the delay is equal to (1) the number of months that elapse between the end of the initial enrollment period and the end of the enrollment period in which the individual actually enrolls or (2) for a person who reenrolls, the months that elapse between the termination of coverage and the close of the enrollment period in which the individual enrolls. ", "Generally, individuals who do not enroll in Part B within a year of the end of their initial enrollment period would be subject to the premium penalty. For example, if an individual's initial enrollment period ended in September 2016 and the individual subsequently enrolled during the 2017 general enrollment period (January 1 through March 31), the delay would be less than 12 months and the individual would not be subject to a penalty. However, if that individual delayed enrolling until the 2019 general enrollment period, the premium penalty would be 20% of that year's standard premium. (Although the elapsed time covers a total of 30 months of delayed enrollment, the episode includes only two full 12-month periods.) An individual who waits 10 years to enroll in Part B could pay twice the standard premium amount.", "The late-enrollment surcharge is calculated as a percentage of the monthly standard premium amount (e.g., $135.50 in 2019), and that amount is added to the beneficiary's premium each month. The hold-harmless provision does not provide protection from increases in the penalty amounts. This means that although those who are held harmless in 2018 pay reduced premiums, any late-enrollment penalties are based on the 2019 premium of $135.50 per month. ", "Using the example above in which an individual is subject to a 20% premium penalty, the total monthly premium in 2019 would be calculated as follows (see text box):", "For those subject to the high-income premium (see \" Income-Related Premiums \"), the late-enrollment surcharge applies only to the standard monthly premium amount and not to the higher-income adjustment portion of their premiums. Using the example of a 20% penalty for a beneficiary with an income of between $85,000 and $107,000, the applicable income-related adjustment of $54.10 would be added on to the penalty-adjusted premium of $162.60 ($135.50 + $27.10 penalty), for a total monthly premium of $216.70.", "There is no upper limit on the amount of the surcharge that may apply, and the penalty continues to apply for the entire time the individual is enrolled in Part B. Each year, the surcharge is calculated using the standard premium amount for that particular year. Therefore, if premiums increase in a given year, the dollar value of the surcharge will increase as well. "], "subsections": []}, {"section_title": "Penalty Exemptions", "paragraphs": ["Under certain conditions, select beneficiaries may be exempt from the late-enrollment penalty. Beneficiaries who are exempt include working individuals (and their spouses) with group coverage, some international volunteers, and those who based their nonenrollment decision on incorrect information provided by a federal representative. Individuals who are permitted to delay enrollment have their own SEPs."], "subsections": [{"section_title": "Current Workers", "paragraphs": ["A working individual and/or the spouse of a working individual may be able to delay enrollment in Medicare Part B without being subject to the late-enrollment penalty. Delayed enrollment is permitted when an individual aged 65 or older has group health insurance coverage based on the individual's or spouse's current employment (with an employer with 20 or more employees). In 2018, about 2.0 million of the 3.8 million working aged population were enrolled in Part A only, with most of the rest enrolled in both Parts A and B. Delayed enrollment is also permitted for certain disabled persons who have group health insurance coverage based on their own or a family member's current employment with a large group health plan. For the disabled, a large group health plan is defined as one that covers 100 or more employees. ", "Specifically, persons permitted to delay coverage without penalty are those persons whose Medicare benefits are determined under the Medicare Secondary Payer program. Under Medicare Secondary Payer rules, an employer (with 20 or more employees) is required to offer workers aged 65 and over (and workers' spouses aged 65 and over) the same group health insurance coverage that is made available to other employees. The worker has the option of accepting or rejecting the employer's coverage. If he or she accepts the coverage, the employer plan is primary (i.e., pays benefits first) for the worker and/or spouse aged 65 or over, and Medicare becomes the secondary payer (i.e., fills in the gaps in the employer plan, up to the limits of Medicare's coverage). Similarly, a group health plan offered by an employer with 100 or more employees is the primary payer for its employees under 65 years of age, or their dependents, who are entitled to Medicare because of disability.", "Such individuals may sign up for Medicare Part B (or Part A) anytime that they (or their spouse) are still working, and they are covered by a group health plan through the employer or union based on that work. Additionally, those who qualify for Medicare based on age may sign up during the eight-month period after retirement or the ending of group health plan coverage, whichever happens first . (If an individual's group health plan coverage, or the employment on which it is based, ends during the initial enrollment period , that individual would not qualify for a SEP.) Disabled individuals whose group plan is involuntarily terminated have six months to enroll without penalty. ", "Individuals who fail to enroll during this special enrollment period are considered to have delayed enrollment and thus could be subject to the penalty. For example, even though an individual may have continued health coverage through the former employer after retirement or have COBRA coverage, he or she must sign up for Part B within eight months of retiring to avoid paying a Part B penalty if he or she eventually enrolls. Individuals who return to work and receive health care coverage through that employment may be able to drop Part B coverage, qualify for a new special enrollment period upon leaving that employment, and reenroll in Part B without penalty as long as enrollment is completed within the specified time frame. "], "subsections": []}, {"section_title": "International Volunteers", "paragraphs": ["Some international volunteers may also be exempt from the Part B late-enrollment penalty. The Deficit Reduction Act of 2005 ( P.L. 109-171 ) permits certain individuals to delay enrollment in Part B without a late-enrollment penalty if they volunteered outside of the United States for at least 12 months through a program sponsored by a tax-exempt organization defined under Section 501(c)(3) of the Internal Revenue Code. These individuals must demonstrate that they had health insurance coverage while serving in the international program. Individuals permitted to delay enrollment have a six-month SEP, which begins on the first day of the first month they no longer qualify under this provision. "], "subsections": []}, {"section_title": "Equitable Relief", "paragraphs": ["Under certain circumstances, a SEP may be created and/or late-enrollment penalties may be waived if a Medicare beneficiary can establish that an error, misrepresentation, or inaction of a federal worker or an agent of the federal government (such as an employee of the Social Security Administration, CMS, or a Medicare administrative contractor) resulted in late Part B enrollment. To qualify for an exception under these conditions, the beneficiary must provide documentary evidence of the error, which \"can be in the form of statements from employees, agents, or persons in authority that the alleged misinformation, misadvice, misrepresentation, inaction, or erroneous action actually occurred.\"", "Time-limited equitable relief also may be granted for certain categories of individuals. For example, CMS may provide a special enrollment period to those affected by a weather related emergency or a major disaster. Additionally, as described in more detail below, CMS determined that it did not provide adequate information regarding Part B enrollment to certain individuals with exchange coverage who enrolled in Medicare Part A and is allowing equitable relief to these individuals through September 2019."], "subsections": [{"section_title": "Limited Time Equitable Relief for Individuals with Medicare Part A and Exchange Coverage", "paragraphs": ["CMS generally encourages those who have coverage through an individual exchange (also known as marketplace) plan, and subsequently become eligible for Medicare, to drop the exchange coverage and enroll in Medicare during their initial enrollment period. After an individual has become eligible for Medicare Part A, any tax credits and cost-sharing reductions that individual receives through an exchange plan end. CMS recognized that \"these individuals did not receive the information necessary at the time of their Medicare [initial enrollment period], Part B SEP for the working aged or disabled, or initial enrollment in the Exchange to make an informed decision regarding their Part B enrollment.\" This may have resulted in these individuals not enrolling in Part B, or enrolling in Part B late and being subject to a late enrollment penalty.", "CMS is thus offering time-limited equitable relief through September 30, 2019, for certain individuals enrolled in both premium-free Medicare Part A and in a plan provided through the health insurance exchanges. Specifically, those who are currently, or had previously been, enrolled in an exchange plan and in premium-free Medicare Part A, and had an initial enrollment period that began on or after April 1, 2013 (or a Part B SEP that ended on or after October 1, 2013) may enroll in Part B without penalty through September 30, 2019. Additionally, the Part B late enrollment penalties of those who had both Part A and exchange coverage and signed up for Part B outside of their initial enrollment period may be reduced or eliminated. To request this equitable relief, qualifying individuals must contact the Social Security Administration and provide appropriate documentation indicating that they were enrolled in an exchange plan and eligible for Medicare during the specified period."], "subsections": []}]}]}]}, {"section_title": "Collection of the Part B Premium", "paragraphs": ["Part B premiums may be paid in a variety of ways. If an enrollee is receiving Social Security or Railroad Retirement benefits, the Part B premiums must, by law, be deducted from these benefits. Additionally, Part B premiums are deducted from the benefits of those receiving a Federal Civil Service Retirement annuity. The purpose of collecting premiums by deducting them from benefits is to keep premium collection costs at minimum. This withholding does not apply to those beneficiaries receiving state public assistance through a Medicare Savings Program because their premiums are paid by their state Medicaid program. (See \" Premium Assistance for Low-Income Beneficiaries .\") ", "Part B enrollees whose premiums are not deducted from Social Security, Railroad Retirement, or Civil Service Retirement monthly benefits; are paid by Medicaid; or are paid by another person or organization must pay premiums directly to CMS."], "subsections": [{"section_title": "Deduction of Part B Premiums from Social Security Checks", "paragraphs": ["By law, a Social Security beneficiary who is enrolled in Medicare Part B must have the Part B premium automatically deducted from his or her Social Security benefits. Automatic deduction from the Social Security benefit check also applies to Medicare Advantage participants who are enrolled in private health care plans in lieu of traditional Medicare. In 2018, about 68% of Medicare Part B enrollees (40.7 million) had their Part B premiums deducted from their Social Security benefit checks. ", "Social Security beneficiaries who do not pay Medicare Part B premiums include those who are under the age of 65 and do not yet qualify for Medicare (e.g., began receiving Social Security benefits at the age of 62); receive low-income assistance from Medicaid to pay the Part B premium; have started to receive Social Security disability insurance (SSDI) but are not eligible for Medicare Part B because they have not received SSDI for 24 months; or chose not to enroll in Medicare Part B.", "The amount of an individual's Social Security benefits cannot go down from one year to the next as a result of the annual Part B premium increase, except in the case of higher-income individuals subject to income-related premiums. (See \" Protection of Social Security Benefits from Increases in Medicare Part B Premiums .\") For those beneficiaries \"held harmless,\" the dollar amount of their Part B premium increases would be held below or equal to the amount of the increase in their monthly Social Security benefits. "], "subsections": []}, {"section_title": "Part B Enrollees Who Do Not Receive Social Security Benefits", "paragraphs": ["A small percentage of Medicare Part B enrollees do not receive Social Security benefits. For example, some individuals aged 65 and older may have deferred signing up for Social Security for various reasons, for instance if they have not yet reached their full Social Security retirement age or are still working. Additionally, certain persons who spent their careers in employment that was not covered by Social Security\u2014including certain federal, state, or local government workers and certain other categories of workers\u2014do not receive Social Security benefits but may still qualify for Medicare. For those who receive benefit payments from the RRB or the Civil Service Retirement System (CSRS), Part B premiums are deducted from the enrollees' monthly benefit payments. While RRB retirement benefit amounts are protected by the hold-harmless provision, CSRS benefits are not held harmless from annual increases in the Part B premium. ", "For those who do not receive these types of benefit payments, Medicare will generally bill directly for their premiums every three months. The enrollee who is being billed does not necessarily have to pay his or her own premiums; premiums may be paid by the enrollee, a relative, friend, organization, or anyone else. In cases where an organization wants to be billed for the Part B premiums of a number of Medicare beneficiaries, it may enter into a formal group-billing arrangement with CMS. Those approved as group billers include such entities as city and county governments, state teacher retirement systems, and certain religious orders.", "In instances in which a beneficiary's monthly Social Security benefit is not sufficient to cover the entire Part B premium amount, Medicare may bill the beneficiary for the balance. Nonpayment of premiums results in termination of enrollment in the Part B program, although a grace period (through the last day of the third month following the month of the due date) is allowed for beneficiaries who are billed and pay directly."], "subsections": []}]}, {"section_title": "Determining the Part B Premium", "paragraphs": ["Each year, the CMS actuaries estimate total per capita Part B costs for beneficiaries aged 65 and older over for the following year and set the Part B premium to cover 25% of expected Part B expenditures. However, because prospective estimates may differ from the actual spending for the year, contingency margin adjustments are made to ensure sufficient income to accommodate potential variation in actual expenditures during the year. (See \" Contingency Margin .\") The Part B premium is a single national amount that does not vary with a beneficiary's age, health status, or place of residence. Premiums may be adjusted upward for late enrollment (see \" Late-Enrollment Premium Penalty and Exemptions \") and for beneficiaries with high incomes (see \" Income-Related Premiums \"), or they may be adjusted downward for those protected by the hold-harmless provision (see \" Protection of Social Security Benefits from Increases in Medicare Part B Premiums \").", "Monthly Part B premiums are based on the estimated amount that would be needed to finance Part B expenditures on an incurred basis during the year. In estimating needed income and to account for potential variation, CMS takes into consideration the difference in prior years of estimated and actual program costs, the likelihood and potential impact of potential legislation affecting Part B in the coming year, and the expected relationship between incurred and cash expenditures (e.g., payments for some services provided during a particular year may not be paid until the following year). Once the premium has been set for a year, it will not be changed during that year.", "While both aged and disabled Medicare beneficiaries may enroll in Part B, the statute provides that Part B premiums are to be based only on the expected program costs\u2014that is, the monthly actuarial rate \u2014for the aged (those 65 years of age and older). The actuarial rate for the aged is defined as one-half of the expected average monthly per capita program costs for the aged plus any contingency margin adjustments. Standard Part B premiums are one-half of the actuarial rate. (See Appendix A for a discussion of the history of the premium methodology.) Part B costs not covered by premiums are paid for through transfers from the General Fund of the Treasury. The monthly actuarial rates for both aged and disabled enrollees are used to determine the needed amount of matching general revenue funding.", "Starting in 2016, a $3.00 per month surcharge is being added onto the standard premium (higher amounts for high-income individuals). To mitigate the expected large premium increases for those not held harmless in 2016, the Bipartisan Budget Act of 2015 (BBA 15; P.L. 114-74 ) required that 2016 Medicare Part B premiums be set as if the hold-harmless rule were not in effect\u2014in other words, to calculate premiums as if all enrollees were paying the same annual inflation-adjusted standard premium. (For additional information on the changes made by BBA 15, see Appendix D .) To compensate for the lost premium revenue (below the required 25%) and to ensure that the SMI Trust Fund had adequate income to cover payments for Part B benefits in 2016, the act allowed for additional transfers from the General Fund of the Treasury to the SMI Trust Fund. To offset the approximately $9 billion in increased federal spending in 2016 resulting from the reduction in standard premiums for those not held harmless, a $3.00 surcharge was added to the monthly premium in 2016, and will continue to be applied in subsequent years until the additional federal costs are fully offset. For those who pay high-income premiums, the surcharge increases on a sliding scale up to $9.60. (See \" Income Categories and Premium Adjustments .\") It is estimated that the surcharge will be applied to premiums through 2021."], "subsections": [{"section_title": "Premium Calculation for 2019", "paragraphs": ["To determine the 2019 monthly Part B premium amount, CMS first estimated the monthly actuarial rate for enrollees aged 65 and older using actual per-enrollee costs by type of service from program data through 2017 and projected these costs through 2019. CMS estimated that the monthly amount needed to cover one-half of the total benefit and administration costs for the aged in 2019 would be $263.47. However, because of expected variations between projected and actual costs, a contingency adjustment of $3.74 was added to this amount. (See \" Contingency Margin ,\" below.) After a reduction of $2.31 to account for expected interest on trust fund assets, the monthly actuarial rate for the aged was determined to be $264.90. The 2019 Part B standard premium is one-half of $264.90, or $132.50 per month (25% of the monthly expected per capita costs of the aged). The BBA 15 repayment surcharge of $3.00 was then added onto that amount for a total monthly premium of $135.50. (As noted, only those not held harmless pay the standard 2019 premium and surcharge. Those held harmless in 2019 pay lower amounts.) "], "subsections": []}, {"section_title": "Contingency Margin", "paragraphs": ["The contingency margin is the amount set aside to cover an appropriate degree of variation between actual and projected costs in a given year. For example, in some years, legislation that resulted in increased Medicare Part B expenditures for the year was enacted after the premium for the year had been set. The Medicare actuaries consider a contingency reserve ratio\u2014net assets at the end of a year in the Part B account of the SMI Trust Fund compared to the following year's expected expenditures\u2014in the amount of 15% to 20% to be adequate, and normally aim for a 17% ratio when determining Part B financing for the upcoming year. Financing fell short of this goal in 2018; however, the CMS actuaries estimate that the 2019 premium rates will allow asset levels in the Part B account to increase to appropriate levels by the end of 2019. ", "The contingency margin in 2019 is affected by a number of factors. Because about 3.5% of Part B enrollees are being held harmless and pay reduced premiums in 2019, the premiums of the remaining 96.5% were adjusted so that aggregate premiums would still cover 25% of Part B costs in 2019. This increase is included in the contingency margin. Additionally, starting in 2011, manufacturers and importers of brand-name drugs began paying a fee that is allocated to the SMI Trust Fund. The contingency margin was thus reduced to account for this additional revenue. Further, certain payment incentives to encourage the development and use of health information technology (HIT) by Medicare physicians are excluded from premium determinations. (HIT bonuses or penalties are directly offset through transfers of general funds from the Treasury.) The 2019 contingency margin adjustment of $3.74 reflects the expected net effects of all of the above factors. "], "subsections": []}]}, {"section_title": "Income-Related Premiums", "paragraphs": ["For the first 41 years of the Medicare program, all Part B enrollees paid the same Part B premium, regardless of their income. However, the Medicare Modernization Act of 2003 (MMA; P.L. 108-173 ) required that, beginning in 2007, high-income enrollees pay higher premiums. About 3.6 million Medicare Part B enrollees (about 6.6%) paid these higher premiums in 2018.", "Adjustments, known as income-related monthly adjustment amounts (IRMAA), are made to the standard Part B premiums for high-income beneficiaries, with the share of expenditures paid by beneficiaries increasing with income. This share ranges from 35% to 85% of the value of Part\u00a0B coverage. In 2019, individuals whose incomes exceed $85,000 and couples whose combined income exceeds $170,000 are subject to higher premium amounts. The hold-harmless provision that prevents a beneficiary's Social Security benefits from decreasing from one year to the next as a result of the Part B premium increase does not apply to those subject to an income-related increase in their Part B premiums. (See \" Protection of Social Security Benefits from Increases in Medicare Part B Premiums .\")"], "subsections": [{"section_title": "Determination of Income", "paragraphs": ["To determine those subject to the high-income premium, Social Security uses the most recent federal tax return provided by the Internal Revenue Service. In general, the taxable year used in determining the premium is the second calendar year preceding the applicable year. For example, the 2018 tax return (2017 income) was used to determine who wo uld pay the 2019 high-income premiums.", "The income definition on which the high-income premiums are based is modified adjusted gross income (MAGI), which is different from gross income. Specifically, gross income is all income from all sources, minus certain statutory exclusions (e.g., nontaxable Social Security benefits). From gross income, adjusted gross income (AGI) is calculated to reflect a number of deductions, including trade and business deductions and losses from sale of property. MAGI is defined as AGI plus certain foreign-earned income and tax-exempt interest. ", "If a person had a one-time increase in taxable income in a particular year (such as from the sale of income-producing property), that increase would be considered in determining the individual's total income for that year and thus his or her liability for the income-related premium two years ahead. It would not be considered in the calculations for future years.", "In the case of certain major life-changing events that result in a significant reduction in MAGI, an individual may request to have the determination made for a more recent year than the second preceding year. Major life-changing events include (1) death of a spouse; (2) marriage; (3) divorce or annulment; (4) partial or full work stoppage for the individual or spouse; (5) loss by individual or spouse of income from income-producing property when the loss is not at the individual's direction (such as in the case of a natural disaster); and (6) reduction or loss for individual or spouse of pension income due to termination or reorganization of the plan or scheduled cessation of the pension. Certain types of events, such as those that affect expenses but not income or those that result in the loss of dividend income because of the ordinary risk of investment, are not considered major life-changing events.", "If Medicare enrollees disagree with decisions regarding their IRMAAs, they may file an appeal with Social Security. Enrollees may either submit a \"Request for Reconsideration\" or contact their local Social Security office to file an appeal. (An enrollee does not need to file an appeal if he or she is requesting a new decision based on a life-changing event described above or if the enrollee has shown that Social Security used the wrong information to make the original decision.)"], "subsections": []}, {"section_title": "Income Categories and Premium Adjustments", "paragraphs": ["Depending on their level of income, Medicare beneficiaries may be classified into one of six income categories. In 2019, individuals with incomes less than $85,000 a year ($170,000 for a couple) pay the standard premium, which is based on 25% of the average Part B per capita cost. Individuals with incomes over $85,000 per year and couples with combined income over $170,000 per year pay a higher percentage of Part B costs. Depending on one's level of income over these threshold amounts, premiums may be adjusted to cover 35%, 50%, 65%, 80%, or 85% of the value of Part B coverage (with the rest being subsidized through federal general revenues). Additionally, high-income individuals pay surcharges ranging from $4.20 to $10.20 per month to offset increased federal spending in 2019 due to premium reductions under BBA 15 (compared to a $3.00 surcharge for those who pay the standard premium). In 2019, total IRMAAs for the five high-income levels, including the additional BBA 15 surcharges, are $54.10, $135.40, $216.70, $297.90, and $325.00 respectively. ", "The income categories and associated premiums for 2019, including the applicable BBA 15 repayment surcharges, are shown below in Table 2 . When both members of a couple are enrolled in Part B, each pays the applicable premium amount. ", "Married persons who lived with their spouse at some point during the year but who filed separate returns are subject to different premium amounts. The income levels and premium amounts are shown in Table 3 ."], "subsections": []}, {"section_title": "Income Thresholds", "paragraphs": ["The original provision establishing the Part B income-related premiums set the initial income threshold and high-income-level ranges. Prior to 2010, annual adjustments to these levels were based on annual changes in the consumer price index for urban consumers (CPI-U), rounded to the nearest $1,000. However, Section 3402 of the Patient Protection and Affordable Care Act (ACA; P.L. 111-148 , as amended) froze the income thresholds and ranges at the 2010 level through 2019 rather than allowing them to rise with inflation. As a result, as incomes have increased with inflation, a greater share of Medicare enrollees are reaching the high-income thresholds and paying the high-income premiums than would have been the case without this freeze. ", "Additionally, beginning in 2018, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA; P.L. 114-10 ) changed the income thresholds of the top two income categories at that time. Individuals with incomes between $133,500 and $160,000 per year are now in the 65% applicable percentage category (which previously applied to those with incomes between $160,000 and $214,000 in 2010-2017). The income threshold for the highest category at that time (80%) was changed to $160,000 (which previously applied to $214,000 in 2010-2017). The thresholds for the lower two income categories were not changed. (See Table 4 .)", "With the exception of the addition of a new top threshold category described below, the 2019 income thresholds for the high-income categories are the same as in 2018. For years 2020 and after, the thresholds will be adjusted annually for inflation based on the new (2018 and 2019) threshold levels.", "Section 53114 of the Bipartisan Budget Act of 2018 (BBA 18; P.L. 115-123 ) added an additional high-income category beginning in 2019 for individuals with annual income of $500,000 or more or couples filing jointly with income of $750,000 or more. (See Table 4 .) Enrollees with income equal to or exceeding these thresholds pay premiums that cover 85% of the average per capita cost of the Parts B and D benefits instead of 80%. The threshold for couples filing jointly in this new income tier is calculated as 150% of the individual income level rather than 200% as in the other income tiers. This new top income threshold will be frozen through 2027 and will be adjusted annually for inflation starting in 2028 based on the CPI-U. "], "subsections": []}]}, {"section_title": "Premium Assistance for Low-Income Beneficiaries", "paragraphs": ["Medicare beneficiaries with limited incomes and resources may be able to qualify for assistance with their premiums and other out-of-pocket expenses. About one in five Medicare beneficiaries receives Part B premium subsidies.", "Medicare beneficiaries who qualify for full Medicaid benefits ( full dual-eligibles ) have most of their health care expenses paid for by either Medicare or Medicaid. For these individuals, Medicaid covers the majority of Medicare premium and cost-sharing expenses, and it supplements Medicare by providing coverage for services not covered under Medicare, such as dental services and long-term services and supports. In cases where services are covered by both Medicare and Medicaid, Medicare pays first and Medicaid picks up most of the remaining costs. Each state has different rules about eligibility and applying for Medicaid. ", "Beneficiaries who do not meet their respective state's eligibility criteria for Medicaid may still qualify for assistance with Part B premiums if they have incomes of less than 135% of the federal poverty level (FPL) and assets of less than $7,730 for an individual or $11,600 for a couple in 2019. These assistance programs are commonly referred to as Medicare Savings Programs (MSPs). Three of these programs provide assistance with Part B premiums. The type of assistance is based on a beneficiary's level of income. "], "subsections": [{"section_title": "Qualified Medicare Beneficiaries", "paragraphs": ["Aged or disabled persons with incomes at or below FPL may qualify for the Qualified Medicare Beneficiary (QMB) program. In 2019, the QMB monthly qualifying income levels are $1,061 for individuals and $1,430 for a couple (annual income of $12,732 and $17,160, respectively). QMBs are entitled to have their Medicare Parts A and B cost-sharing charges, including the Part B premium and all deductibles and coinsurance, paid by Medicaid. (See Table 5 .) For QMBs, Medicaid coverage is limited to the payment of Medicare premiums and cost-sharing charges (i.e., the Medicare beneficiary is not entitled to coverage of Medicaid plan services, unless the individual is otherwise entitled to Medicaid). "], "subsections": []}, {"section_title": "Specified Low-Income Medicare Beneficiaries", "paragraphs": ["Individuals whose income is more than 100% but less than 120% of FPL may qualify for assistance as a Specified Low-Income Medicare Beneficiary (SLMB). In 2019, the monthly income limits are $1,269 for an individual and $1,711 for a couple (annual income of $15,228 and $20,532, respectively). Medicaid pays the Medicare Part B premiums for SLMBs, but not other cost sharing."], "subsections": []}, {"section_title": "Qualifying Individuals", "paragraphs": ["Individuals whose income is between 120% and 135% of FPL may qualify for assistance as Qualifying Individuals (QIs). In 2019, the monthly income limit for a QI is $1,426 for an individual, and for a couple, it is $1,923 (annual income of $17,112 and $3,076, respectively). Medicaid protection for these individuals is limited to payment of the monthly Medicare Part B premium. Expenditures under the QI program are, however, paid for (100%) by the federal government from the Medicare SMI Trust Fund up to the state's allocation level. A state is required to cover only the number of people that would bring the state's spending on these population groups in a year up to its allocation level. Any expenditures beyond that level are voluntary and paid entirely by the state.", "Funding for the QI program was first made available by the Balanced Budget Act of 1997 (BBA97; P.L. 105-33 ). Subsequent legislation extended the program and the amounts available through allocation. MACRA permanently extended the QI program. "], "subsections": []}]}, {"section_title": "Protection of Social Security Benefits from Increases in Medicare Part B Premiums", "paragraphs": ["After a person becomes eligible to receive Social Security benefits, his or her monthly benefit amount is adjusted annually to compensate for increases in the prices of goods and services over time. Near the end of each year, the Social Security Administration announces the cost-of-living adjustment (COLA) payable in January of the following year. The amount of the COLA is based on inflation as measured by the Consumer Price Index-Urban Wage Earners and Clerical Workers (CPI-W). If the CPI-W decreases, Social Security benefits stay the same\u2014benefits are not reduced during periods of deflation.", "When the annual Social Security COLA is not sufficient to cover the standard Medicare Part B premium increase, most Medicare beneficiaries are protected by a hold - harmless provision in the Social Security Act. Specifically, if in a given year the increase in the standard Part B premium would cause a beneficiary's Social Security check to be less, in dollar terms, than it was the year before, then the Part B premium is reduced to ensure that the amount of the individual's Social Security check does not decline. This determination is made by the Social Security Administration. ", "To be held harmless in a given year, a Social Security beneficiary must have received Social Security benefit checks in both December of the previous year and January of the current year, and the beneficiary must also have had Part B premiums deducted from both checks. The hold-harmless provision operates by comparing the net dollar amounts of the two monthly benefit payments; if the net Social Security benefit for January of the current year is lower than in December of the previous year, then the hold-harmless provision applies to that person. Premiums of those held harmless are then reduced to an amount that would not cause their Social Security benefits to decline in the next year. The premium paid by those held harmless is called the Variable Supplementary Medical Insurance premium. Those not held harmless pay the standard premium as determined for that year.", "Typically, the hold-harmless provision affects only a small number of beneficiaries and has had minimal impact on Part B financing. In most years, this rule primarily protects those with relatively low Social Security payments. However, in years in which there is no or a very low Social Security COLA, such as in 2010, 2011, 2016, and 2017, a large number of beneficiaries may be protected by this provision. (See \" Application of the Hold-Harmless Rule in Years Prior to 2016 ,\" \" Application of the Hold-Harmless Rule in 2016 ,\" and \" Application of the Hold-Harmless Rule in 2017 .\")"], "subsections": [{"section_title": "Some Beneficiaries Are Not Protected by the Hold-Harmless Provision", "paragraphs": ["Not all beneficiaries are protected by the hold-harmless provision and, under some circumstances, may be subject to significantly higher premiums than those who are held harmless. Groups that are not protected include the following:", "Higher- I ncome B eneficiaries. Higher-income beneficiaries who are required to pay income-related Part B premiums are explicitly excluded by law from protection under the hold-harmless provision. They are required to pay the full amount of any increase in their Part B premiums. (See \" Income-Related Premiums .\") Lower- I ncome B eneficiaries. Lower-income beneficiaries who receive premium assistance from Medicaid are not held harmless as their premiums are not deducted from their Social Security benefits. However, the Medicaid program pays the full amount of any increase in their Part B premiums. (See \" Premium Assistance for Low-Income Beneficiaries .\") Those W ho D o N ot R eceive Social Security. This group includes those who have not yet signed up for Social Security for various reasons, for example because they have deferred signing up because they have not reached full retirement age or are still working. It also includes disabled beneficiaries whose Social Security Disability Insurance (SSDI) cash benefits have been discontinued because they have returned to work but who are still eligible for Medicare. Additionally, those who receive benefits exclusively through a different retirement plan are not held harmless. This group includes certain federal retirees under the Civil Service Retirement System as well as certain state and local government workers\u2014such as teachers, law-enforcement personnel, and firefighters\u2014who have their own pension programs. Those W ho D id N ot H ave Medicare P remiums D educted from T heir Social Security C hecks at the E nd of O ne Y ear and the B eginning of the N ext. This category includes those who enroll in Social Security or Medicare during the year in which the hold-harmless provision is in effect, including SSDI recipients who become eligible for Medicare that year after the 24-month waiting period. It also includes those who had Medicare premiums paid on their behalf one year, for example by Medicaid, but lost that coverage during the next year. ", "Some people protected by the hold-harmless provision may still see a decrease in their Social Security checks due to an increase in Medicare Part D premiums. Part D premiums are not covered by the hold-harmless provision, although beneficiaries with low-income subsidies would not be affected. ", "Additionally, those who pay the late-enrollment penalty are not fully protected from the hold-harmless rule. (See \" Late-Enrollment Premium Penalty and Exemptions .\") In a year in which the hold-harmless provision is in effect, the late-enrollment surcharges are calculated as a percentage of the premiums of those not held harmless. These surcharges are considered \"nonstandard\" premiums and thus are not limited by the hold-harmless provision."], "subsections": []}, {"section_title": "Application of the Hold-Harmless Rule in Years Prior to 2016", "paragraphs": ["As described earlier, an individual's Social Security COLA is determined by multiplying his or her benefit amount by the inflation rate, the CPI-W. Part B premiums are determined by projected Part B program costs. Thus, the number of people held harmless can vary widely from year to year, depending on inflation rates and projected Part B costs. For most years, the hold-harmless provision has affected a relatively small number of beneficiaries. However, due to low inflation, no COLA adjustments were made to Social Security benefits in 2010 and 2011. Most Medicare beneficiaries (about 73%) were protected by the hold-harmless provision and continued to pay the 2009 standard monthly premium of $96.40 in both 2010 and 2011. Because Part B expenditures were still expected to increase in those years, and because beneficiary premiums are required to cover 25% of those costs, the premiums for those not held harmless (27% of beneficiaries) were higher than they would have been had the rest of the beneficiaries not been held harmless. The standard monthly premiums paid by those not held harmless were $110.50 in 2010 and $115.40 in 2011. In 2011, of the 27% who were not eligible to be held harmless, about 3% were new Medicare enrollees, about 5% were high-income, about 17% had their premiums paid for by Medicaid, and the remaining 2% did not have their premiums withheld from Social Security benefit payments.", "In 2012 and 2013, Social Security beneficiaries received a 3.6% and a 1.7% COLA, respectively, which more than covered the Part B premium increases in those years; therefore, the hold-harmless provision was not applicable for most beneficiaries. Similarly, in 2014 and 2015, with a Social Security COLA increase of 1.5% and 1.7%, respectively, and no increase in Part B premiums, the hold-harmless provision also was not broadly applicable in those years. "], "subsections": []}, {"section_title": "Application of the Hold-Harmless Rule in 2016", "paragraphs": ["In 2016, for a third time, there was no Social Security COLA increase, but there was a projected increase in Medicare Part B premiums\u2014from $104.90 per month in 2015 to about $121 per month in 2016. Similar to its application in 2010 and 2011, the hold-harmless provision as applied in 2016 protected some beneficiaries but not others. In 2016, about 70% of Part B enrollees were held harmless and continued to pay the 2015 monthly premium amount of $104.90 through 2016. Those not held harmless included those eligible for premium assistance through their state Medicaid programs (about 19%), those who paid the high-income premiums (about 6%), those who did not receive Social Security benefits (3%), and new enrollees in 2016 (5%).", "Absent legislation, the premiums of those not held harmless (the remaining 30%) would have been higher than the premiums would have been had the hold-harmless provision not been in effect. However, BBA 15 mitigated the expected large increases for those not held harmless and required that their premiums be calculated as if the hold-harmless rule were not in effect. BBA 15 also required that a monthly surcharge of $3.00 be added to standard premiums (more for those with high incomes) until the increased cost to the federal government of reducing the premiums is offset. (See Appendix D .) The total standard premium amount for those Part B enrollees not held harmless in 2016, including the $3.00 per month surcharge, was $121.80. "], "subsections": []}, {"section_title": "Application of the Hold-Harmless Rule in 2017", "paragraphs": ["Should there have been a 0% Social Security COLA in 2017, BBA 15 would have allowed for a similar Medicare Part B premium setting mechanism for 2017 as in 2016. However, as there was a very small (0.3%) Social Security COLA in 2017, this provision did not apply. ", "Because the Social Security COLA was not large enough to cover the full Medicare Part B premium increase, about 70% of enrollees were held harmless in 2017. Those held harmless in 2017 pa id , on average, about $109.00 per month for their Part B premiums. However, their actual premiums var ied depending on the dollar amount of the increase in their Social Security benefit. Additionally, many of those not held harmless in 2016 because they were new to Medicare in that year may have qualif ied to be held harmless in 2017. If they qualif ied , t he premiums for those individuals would have been equal to the 2016 premium of $121.80, plus the dollar amount of the increase in their monthly Social Security benefit. ", "As the prem iums of those not held harmless ( the remaining 30% of enrollees) had to cover both their share of the premium increases plus that of the 70% held harmless, the Medicare trustees estimated that their 2017 Part B premiums could be as high as $149 per month. However, in setting the 2017 premiums, the Secretary \"exercised her statutory authority to mitigate projected premium increases for these beneficiaries\" by setting a lower - than - normal contingency reserve ratio for the SMI T rust F und in 2017 . This had the effect of reducing premiums below what they might have been had the ratio been set at a more conventional level. In 2017, those not held harmless pa id monthly premiums of $134.00 . "], "subsections": []}, {"section_title": "Application of the Hold-Harmless Rule in 2018", "paragraphs": ["In 2018, there was a 2.0% Social Security COLA and no increase in the 2018 Medicare Part B premiums (i.e., the Part B premium was $134.00 per month in both 2017 and 2018). For many Part B enrollees who were held harmless in 2017, the Social Security COLA was large enough to cover the difference between the full Medicare premium of $134.00 and the reduced premium amount they paid in 2017. Therefore, many of those held harmless in 2017 no longer saw reduced premiums in 2018 and returned to paying the standard premium amounts (which include the $3.00 BBA 15 surcharge).", "To illustrate, for someone receiving a Social Security benefit of $1,404.00 per month in 2017 (the average amount for retired workers in that year), a 2.0% Social Security COLA would have resulted in an increased benefit of about $28.00 per month in 2018. If that person had been held harmless in 2017 and was paying a Medicare Part B premium of $109.00 per month, this Social Security benefit increase would have been more than enough to cover the $25.00 difference between that individual's reduced Part B 2017 premium amount of $109.00 and the 2018 premium of $134.00. Therefore, that person's Medicare Part B premiums could have increased up to the full premium amount of $134.00 in 2018. ", "CMS estimated that about 72% of Part B enrollees were not held harmless in 2018. About 42% of enrollees were held harmless in 2017 but no longer qualified for reduced premiums in 2018 because they did not meet the requirement that their Social Security benefits would decrease as a result of the increase in their Part B premiums. The remaining 30% included those who normally do not qualify to be held harmless, for instance, because they paid high-income premiums, had their premiums paid on their behalf by Medicaid, or did not receive Social Security benefits.", "About 28% of Part B enrollees did not receive a large enough increase in their Social Security COLAs to cover the full amount of the Part B premium and thus qualified to be held harmless and paid reduced premiums in 2018. Their premiums could have increased from the premium amount they paid in 2017, plus the dollar amount of the increase in their monthly 2018 Social Security benefit. For example, for someone with a monthly Social Security benefit of $600.00 in 2017, the 2.0% 2018 COLA would have provided an increase of about $12.00. If that individual had been paying $109.00 per month for Medicare premiums in 2017, the $12.00 increase would not have been sufficient to cover the full $134.00 per month. In this example, the individual would have paid $109.00 plus $12.00 ($121.00) per month in 2018."], "subsections": []}, {"section_title": "Application of the Hold-Harmless Rule in 2019", "paragraphs": ["The 2019 Social Security COLA of 2.8% was large enough to increase the benefits of most of those who were held harmless in 2018 to levels sufficient to cover the difference between the amount of the (reduced) premiums they paid in 2018 and the 2019 premiums of $135.50. In 2019, only about 3.5% of beneficiaries (about 2 million) are being held harmless and pay premiums lower than the 2019 premium of $135.50."], "subsections": []}]}, {"section_title": "Part B Premiums over Time", "paragraphs": ["Part B premium changes over time generally reflect the growth in total Part B expenditures, although the exact relationship between Part B expenditures covered by the Part B premium has been changed by statute at various points. (See Appendix A .) The standard monthly Part B premium has risen from $3.00 in 1966 to $135.50 in 2019. (See Figure 1 .) For comparison, during a similar time period, average annual Part B benefit costs per beneficiary have increased from about $101.00 in 1970 (about $8.42 per month) to a projected $6,391 per beneficiary (about $532.60 per month) in 2019.", "Prior to 2000, the Part B premium decreased from year to year twice. The first instance was from 1989 ($31.90) to 1990 ($28.60) as a result of the repeal of the Medicare Catastrophic Coverage Act of 1988 ( P.L. 100-360 ). The second was from 1995 ($46.10) to 1996 ($42.50) as a result of the transition from a premium as determined by a fixed dollar amount under the Omnibus Reconciliation Act of 1990 ( P.L. 101-508 ) to 25% of costs as directed under the Omnibus Budget Reconciliation Act of 1993 ( P.L. 103-66 ). ", "More recently, because of the absence of a Social Security COLA in 2010 and 2011, most beneficiaries were held harmless and paid the 2009 premium of $96.40 per month during those years. The standard 2010 and 2011 premiums, paid by those who were not held harmless, were thus higher than they would have been had the hold-harmless provision not been in effect. (See prior section \" Protection of Social Security Benefits from Increases in Medicare Part B Premiums \" for additional detail.) ", "Since 2000, the standard Medicare Part B premium has almost tripled, from $45.50 in 2000 to the current premium of $135.50 in 2019. This growth has been due to a number of factors that have increased per capita Part B expenditures during that time, including the rising prices of health care services and equipment, new technologies, and increased utilization of Medicare Part B services. While Part B expenditure growth has slowed in recent years, the Medicare trustees project faster benefit spending growth over the next five years (an 8.2% Part B average annual growth rate compared with a 5.5% growth rate over the last five years). ", "The Medicare trustees estimate that 2020 premiums will increase to about $141.10 per month, and that premiums will increase thereafter at an average rate of about 5.3% per year through 2027. (For estimates of premiums in future years through 2027, see Appendix C .) "], "subsections": []}, {"section_title": "Current Issues", "paragraphs": [], "subsections": [{"section_title": "Premium Amount and Annual Increases", "paragraphs": ["The Medicare trustees estimate that Medicare Part B premiums will increase from $135.50 per month in 2019 to about $202.70 in 2027. (See Appendix C .) Rising Medicare premiums could have a large effect on Social Security beneficiaries, particularly on those who rely on Social Security as their primary source of income. For example, in 2018, Social Security benefits represented about 33% of the income of Americans aged 65 and older. About 48% of married couples and 69% of unmarried persons received more than half of their income from Social Security, and 21% of married couples and 44% of unmarried persons received more than 90% of their income from Social Security. Some of these beneficiaries may see a decline in their standard of living as their Medicare premiums rise.", "Once a person receives Social Security, his or her benefit is indexed to inflation and thereafter grows with annual Social Security COLAs. However, Medicare premiums are based on the per capita cost growth of Part B benefits, which reflects the growth in the cost of medical care and in the utilization and intensity of services used by beneficiaries, factors that have historically grown faster than CPI-W. Additionally, as there has been a continuing shift from providing care in inpatient (Part A) to outpatient settings (Part B), a greater portion of Medicare spending is expected to be covered by beneficiary premiums. This means that, over time, Medicare premiums are expected to represent a growing proportion of most beneficiaries' Social Security income. Since 2000, Social Security's annual COLA has resulted in a cumulative benefit increase of about 50%, significantly less than the Part B premium growth of close to 200%. The Medicare trustees estimated that average Part B plus Part D premiums would represent close to 12% of the average Social Security benefit in 2018 and would increase to an estimated 17% in 2092. (See Appendix B and Appendix C for historical, current, and projected Part B premiums.) ", "Additionally, while the hold-harmless provision provides protection against increases in the Part B premium, the rule does not apply to Part D premiums or to late-enrollment penalties. Therefore, even in a year with a 0% or a very low Social Security COLA, beneficiaries may still see a decline in benefits as a result of increases in Part D premiums and/or any applicable late-enrollment penalties."], "subsections": []}, {"section_title": "Impact of the Hold-Harmless Provision on Those Not Held Harmless", "paragraphs": ["The law does not specify how Medicare Part B financing (premiums and general revenues) should be established in years in which the hold-harmless provision applies to a large number of Medicare beneficiaries. Under current law, the only way to generate enough premium revenue to cover 25% of Part B costs is to have those not held harmless shoulder the entire beneficiary share of any increase in premiums. Absent legislation such as BBA 15, the premiums of those not held harmless can therefore be significantly greater than if there were no hold-harmless provision. As the Medicare trustees pointed out in their 2010 annual report, \"(t)his approach to preventing exhaustion of the Part B trust fund account is the only one available under current law,\" despite the \"serious equity issues\" that this method raises. ", "In years in which there has been both a 0% or a very low Social Security COLA and a Medicare premium increase, concerns have been raised about the potential financial impact of the premium increases on those not held harmless as well as on the state Medicaid agencies that pay Part B premiums on behalf of low-income beneficiaries. For example, individuals in retirement systems other than Social Security or RRB may also have not received a COLA but could face significantly higher Medicare premiums than those who qualified for protection under the hold-harmless provision. Some have proposed changes to the hold-harmless provision to avoid the disproportionate impact of premium increases on those not held harmless, such as holding all Part B enrollees harmless in years in which there is no Social Security COLA or allowing Social Security checks to decline as a result of Medicare premium increases in some years. Others have proposed linking the Social Security COLA to a measure of inflation that is based on purchasing patterns of the elderly, such as the BLS's Experimental Consumer Price Index for Americans Aged 62 and Older (CPI-E) or requiring a minimum annual Social Security COLA."], "subsections": []}, {"section_title": "Proposals to Modify the Late-Enrollment Penalty", "paragraphs": ["Periodically, proposals have been offered to modify or eliminate the Part B premium penalty either for all enrollees or alternatively for a selected population group. As an increasing number of new Medicare-eligible beneficiaries must actively sign up for Medicare because they are not yet receiving Social Security benefits (e.g., their full retirement Social Security age exceeds the Medicare age of eligibility), there is concern that more people could become subject to late-enrollment penalties. For example, the Medicare Rights Center reported a large number of calls to its hotline related to transitioning to Medicare. Their report notes that \"(m)any individuals who call Medicare Rights are confused by Medicare enrollment rules, and specifically by decision-making related to taking or declining Part B\" and that \"Medicare-eligible people who do not understand Part B enrollment rules and fail to enroll in Medicare when they first became eligible may face late-enrollment penalties, gaps in coverage, and disruptions to access to needed care.\"", "Some proposals have suggested modifying the penalty provision to limit both the amount and the duration of the surcharge, as is the case for delayed Part A enrollment, which has a maximum 10% surcharge and a duration of twice the number of years that enrollment was delayed. (See Appendix E for information on the Part A premium and late-enrollment penalty.) ", "Some have also suggested that Medicare Part B have a creditable-coverage exemption, similar to that under Part D, that would allow Medicare beneficiaries with equivalent coverage to postpone enrollment in Part B without being subject to a penalty. For example, under the Part D prescription drug benefit, individuals are not subject to a late-enrollment penalty if they have maintained \"creditable\" prescription drug coverage prior to enrollment\u2014that is, coverage that is expected to pay at least as much as Medicare's standard prescription drug coverage. Creditable prescription drug coverage includes employer-based prescription drug coverage, qualified State Pharmaceutical Assistance Programs, and military-related coverage (e.g., Veterans Affairs health care system and TRICARE). ", "Other suggestions include formally training employers about Medicare coverage and interaction with other insurance; improving education on Medicare, including late-enrollment penalties, for those nearing Medicare-eligibility age; and expanding equitable relief to include remedies for actions based on misinformation provided by entities in addition to an agent of the federal government, such as an agent of state or local government, and/or an employer or insurer. ", "In recent Congresses, a number of bills have been introduced that would address some of the issues associated with the Part B late-enrollment penalty. For example, in the 116 th Congress, H.R. 1788 would limit the penalty to 15% and twice the period of no enrollment, and would exclude periods of COBRA, retiree, and VA coverage when determining the late enrollment penalty. In the 115 th Congress, H.R. 2575 and S. 1909 would have required Medicare to provide advance notification to those approaching Medicare eligibility, required the creation of a centralized enrollment webpage containing both Social Security and Medicare online tools, restructured Medicare enrollment periods and coverage periods, and expanded the eligibility for special enrollment periods for those who meet exceptional conditions as defined by the Secretary of HHS. Also introduced in the 115 th Congress, H.R. 2342 would have required that employers notify employees about the availability of special enrollment periods to obtain marketplace coverage and Medicare coverage upon termination or separation, and H.R. 5104 would have established a special Medicare Part B enrollment period for individuals enrolled in COBRA (Consolidated Omnibus Budget Reconciliation Act) continuation coverage who elected not to enroll in Part B during their initial enrollment period. Additionally, H.R. 707 would have, among other changes, eliminated late-enrollment penalties for those between the ages of 65 and 70. ", "As introduced in the 112 th Congress, in addition to creating a special enrollment period for those with COBRA coverage, H.R. 1654 would have created a continuous enrollment period that would have allowed Medicare-eligible beneficiaries to sign up for Part B outside of the general enrollment period and to receive health coverage the following month. H.R. 1654 would have also expanded eligibility for equitable relief to those who based enrollment decisions on incorrect information provided by group health plans and plan sponsors, and it would have directed the Government Accountability Office to study problems with Part B enrollment. In the 111 th Congress, H.R. 2235 would have limited the penalty for late Part B enrollment to 10% and limited the duration to twice the period of no enrollment, similar to the Part A late-enrollment penalty. It also would have excluded periods of COBRA and retiree coverage from the penalty."], "subsections": []}, {"section_title": "Deficit Reduction Proposals", "paragraphs": ["As Medicare currently represents about 14% of federal spending, many proposals to reduce federal deficits include suggestions to reduce Medicare program spending and/or increase program income. For example, some proposals would increase Medicare premiums as a portion of total program funding, whereas others would limit the amount of federal contributions. "], "subsections": [{"section_title": "Increasing Medicare Premiums", "paragraphs": ["Certain proposals suggest limiting premium increases to high-income beneficiaries. For example, the President's FY2017 budget proposal would have increased the percentage of per capita expenditures paid by high-income enrollees from 35% to 80% of expenditures to a range of between 40% and 90%, and it would have increased the number of high-income brackets from four to five. The proposal also would have continued the freeze on income thresholds until 25% of beneficiaries were subject to the high-income premiums. (Subsequent to that proposal, the BBA 18 added a fifth high-income bracket with premiums set at 85% of per capita expenditures. See \" Income-Related Premiums .\")", "Other proposals suggest increasing premiums paid by all Part B enrollees. For example, a proposal introduced in 2011 by then-Senators Lieberman and Coburn suggested raising the standard Part B premium from the current 25% of program costs to 35% over five years. "], "subsections": []}, {"section_title": "Impose a Part B Premium Surcharge for Beneficiaries in Medigap Plans with Near First-Dollar Coverage", "paragraphs": ["In 2016, about 34% of beneficiaries enrolled in traditional Medicare bought Medigap policies from private insurance companies that cover some or all of Medicare's cost sharing. Individuals who purchase Medigap must pay a monthly premium, which is set by, and paid to, the insurance company selling the policy. There are 10 standardized Medigap plans with varying levels of coverage. Two of the 10 standardized plans cover Parts A and B deductibles and coinsurance in full (i.e., offer first-dollar coverage). In 2015, 65% of all beneficiaries who purchased Medigap insurance were covered by one of these two plans.", "Some are concerned that beneficiaries enrolled in Medigap plans with low cost-sharing requirements may have less incentive to consider the cost of health care services and may thus increase costs to the Medicare program. To address this, Section 401 of MACRA prohibits the sale of Medigap policies that cover Part B deductibles to newly eligible Medicare beneficiaries beginning in 2020. Some have also proposed imposing a Part B premium surcharge for Medicare beneficiaries who purchase certain types of Medigap plans. For example, the President's FY2016 budget proposal suggested imposing a Part B premium surcharge of approximately 15% of the average Medigap premium (about 30% of the Part B premium) for new Medicare beneficiaries who enroll in a near first-dollar Medigap plan. "], "subsections": []}, {"section_title": "Limit Federal Subsidies", "paragraphs": ["Finally, other proposals, such as that put forth in the FY2019 House Budget Resolution, would place limits on the amount of the federal subsidy for Medicare, and premiums would vary depending on the Medicare plan in which the beneficiary enrolled. In general, such premium support proposals would limit federal spending by changing the current Medicare program from a defined-benefit to a defined-contribution system. Most such proposals would limit the growth in the annual federal premium subsidy. Depending on how such a proposal is designed, and should Medicare costs grow more quickly than the limit, beneficiary premiums could increase more rapidly than the amount of the premium subsidy."], "subsections": []}, {"section_title": "Considerations", "paragraphs": ["Some of the issues that would need to be addressed when evaluating these types of deficit reduction proposals include (1) the ability of Medicare beneficiaries to absorb increased costs given their current levels of income and assets, as well as their other out-of-pocket expenditures (both health and non-health related); (2) the willingness of high-income beneficiaries to continue participating in Medicare Part B should their premiums be increased; and (3) the capacity of the Medicaid program to continue providing premium assistance to low-income beneficiaries should premiums increase.", "Appendix A. History of the Part B Premium Statutory Policy and Legislative Authority", "The basis for determining the Part B premium amount has changed several times since the inception of the Medicare program, reflecting different legislative views of what share beneficiaries should bear as expenditures have increased. When the Medicare program first went into effect in July 1966, the Part B monthly premium was set at a level to cover 50% of Part B program costs. Legislation enacted in 1972 limited the annual percentage increase in the premium to the same percentage by which Social Security benefits were adjusted for changes in the cost-of-living adjustments (i.e., COLAs). Under this formula, revenues from premiums soon dropped from 50% to below 25% of program costs because Part B program costs increased much faster than inflation as measured by the Consumer Price Index on which the Social Security COLA is based (see Table A-1 ).", "From the early 1980s, Congress regularly voted to set Part B premiums at a level to cover 25% of program costs, in effect overriding the COLA limitation. The 25% provisions first became effective January 1, 1984, with general revenues covering the remaining 75% of Part B program costs. Premiums increased in 1989 as a result of the Medicare Catastrophic Coverage Act of 1988 ( P.L. 100-360 ), which added a catastrophic coverage premium to the Part B premium. The act was repealed in November 1989, and the Part B premium for 1990 fell as a result. ", "Congress returned to the general approach of having premiums cover 25% of program costs in the Omnibus Budget Reconciliation Act of 1990 (OBRA 90; P.L. 101-508 ). However, OBRA 90 set specific dollar figures, rather than a percentage, in law for Part B premiums for the years 1991-1995. These dollar figures reflected Congressional Budget Office estimates of what 25% of program costs would be over the five-year period. However, program costs grew more slowly than anticipated, in part due to subsequent legislative changes. As a result, the 1995 premium of $46.10 actually represented 31.5% of Medicare Part B program costs.", "The Omnibus Budget Reconciliation Act of 1993 (OBRA 93; P.L. 103-66 ) extended the policy of setting the Part B premium at a level to cover 25% of program costs for the years 1996-1998. As was the case prior to 1991, a percentage rather than a fixed dollar figure was used, which meant that the 1996 premium ($42.50) and the 1997 premium ($43.80) were lower than the 1995 premium ($46.10). The Balanced Budget Act of 1997 (BBA 97; P.L. 105-33 ) permanently set the premium at 25% of program costs so that, generally speaking, premiums rise or fall with Part B program costs.", "The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA; P.L. 108-173 ), as modified by the Deficit Reduction Act of 2005 (DRA; P.L. 109-171 ), required that beginning in 2007, higher-income beneficiaries pay higher Part B premiums. The income thresholds used to determine eligibility for the high-income premium are to be adjusted each year by the growth in the Consumer Price Index. The Patient Protection and Affordable Care Act (ACA; P.L. 111-148 , as amended, Section 3402), however, froze these thresholds for the period of 2011 through 2019 at the 2010 levels. In 2020, the thresholds were to return to the levels they would have been had they been adjusted for inflation each year during the freeze and again indexed to inflation each year. As this would have resulted in higher income thresholds, it would have had the effect of reducing the number of beneficiaries who pay the high-income premiums in 2020.", "Section 402 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA; P.L. 114-10 ) maintains the freeze on the income thresholds for all income categories through 2017 and on the lower two high-income premium tiers through 2019. Beginning in 2018, MACRA reduces the threshold levels for the two highest income tiers so that more beneficiaries will fall into the higher percentage categories. (See \" Income Thresholds .\") Additionally, starting in 2020, the income thresholds for all income categories will be adjusted annually for inflation based on the 2019 income thresholds. This will, in effect, maintain the proportion of beneficiaries who pay the high-income premium.", "Due to a 0% Social Security COLA coupled with an increase in Medicare premiums, a large percentage of Medicare Part B enrollees were protected by the hold-harmless provision in 2016 and continued to pay the 2015 premium of $104.90 per month. The Medicare trustees estimated that the standard premiums of those not held harmless in 2016 would therefore need to be increased to approximately $159 per month for aggregate premiums to still cover 25% of per capita benefit costs. The Bipartisan Budget Act of 2015 (BBA 15; P.L. 114-74 ), however, mitigated this sharp premium increase and required that the 2016 Part B standard premium be calculated as if the hold-harmless rule were not in effect and the increased costs had been spread across all beneficiaries. (See Appendix D .) Instead of having those not held harmless bear the increase for all of the Part B enrollee population, the act allowed for the transfer of additional general revenues to the SMI Trust Fund to make up for the shortfall in premium revenue. As a result of this change, Part B enrollees not held harmless paid a standard monthly premium of $121.80 in 2016. To offset the increased costs, a $3.00 surcharge was added to the monthly premium in 2016 (the $121.80 premium amount included this surcharge), and will continue to be applied in subsequent years until the additional federal cost of about $9 billion is fully offset (the surcharge increases on a sliding scale for those who pay high-income premiums, up to $9.60). ", "BBA 15 provided for similar premium adjustments in 2017 if there were a 0% Social Security COLA again in that year. However, as there was a 0.3% 2017 Social Security COLA, this provision was not applicable in 2017. ", "Section 53114 of the Bipartisan Budget Act of 2018 (BBA 18; P.L. 115-123 ) added an additional high-income category beginning in 2019 for individuals with annual incomes of $500,000 or more or couples filing jointly with incomes of $750,000 or more. Enrollees with income equal to or exceeding these thresholds pay premiums that cover 85% of the average per capita cost of Part B benefits instead of 80%. The threshold for couples filing jointly in this new income tier is calculated as 150% of the individual income level rather than 200% as in the other income tiers. The BBA 15 premium surcharge for this category is $10.20. This new top income threshold will be frozen through 2027 and will be adjusted annually for inflation starting in 2028 based on the CPI-U. ", "Appendix B. Standard and High-Income Part B Premiums and Income Thresholds: 2007-2019", "Appendix C. Estimated Future Part B Premiums", "Appendix D. Bipartisan Budget Act of 2015 Changes to 2016 Part B Premiums", "Under normal circumstances, standard Medicare Part B premiums are set at an amount to cover 25% of projected average per capita Part B expenditures plus an appropriate contingency margin. Due to expected growth in the cost of Part B benefits, the Medicare trustees projected that in order to cover 25% of benefit costs as well as to build up adequate contingency reserves, the 2016 Part B premiums would need to be increased to about $121 per month from the 2015 amount of $104.90. However, due to the absence of a Social Security COLA in 2016 and the resulting widespread application of the hold-harmless provision, most Part B enrollees continued to pay the 2015 premium amount of $104.90 through 2016. With about 70% of enrollees continuing to pay $104.90, the only way that premiums could cover 25% of per capita expenditures would have been if those not held harmless (the remaining 30%) bore the entire cost increase (i.e., if the aggregate increase in premiums were spread out over fewer people). The Medicare trustees estimated that the premiums of those not held harmless would therefore need to be increased to about $159 per month. The trustees also estimated that high-income beneficiaries (i.e., those earning more than $85,000) would need to pay significantly higher monthly premiums of about $223, $319, $414, or $510 depending on their level of income (compared to their respective 2015 premiums of $147, $210, $273, and $336 per month). ", "To mitigate the expected large premium increases for those not held harmless, the Bipartisan Budget Act of 2015 (BBA 15; P.L. 114-74 ) required that 2016 Medicare Part B premiums be set as if the hold-harmless rule were not in effect\u2014in other words, to calculate premiums as if all enrollees were paying the same annual inflation-adjusted standard premium (about $121 per month). To compensate for the lost premium revenue (below the required 25%) and to ensure that the Supplementary Medical Insurance (SMI) Trust Fund had adequate income to cover payments for Part B benefits in 2016, the act allowed for additional transfers from the General Fund of the Treasury to the SMI Trust Fund. ", "To offset the approximately $9 billion in increased federal spending in 2016 resulting from the reduction in standard premiums for those not held harmless (i.e., the additional amounts transferred from the General Fund), as well as the loss of income due to reductions in the income-related monthly adjustment for high-income enrollees, the law required that a $3.00 per month surcharge be added to standard premiums in 2016, and each subsequent year, until the $9 billion is fully offset. (For those who pay high-income premiums, the surcharge increases on a sliding scale, up to $9.60.) It is expected that this surcharge will be applied to premiums through 2021. The monthly repayment surcharge is paid only by those not held harmless. ", "Should there have been a 0% Social Security COLA in 2017, BBA 15 allowed for a similar Medicare Part B premium setting mechanism for 2017. However, as there was a 0.3% COLA in 2017, this provision did not apply. BBA 15 did not allow for similar adjustments beyond 2017.", "Appendix E. Part A Premiums", "The vast majority of persons turning the age of 65 are automatically entitled to Medicare Part A based on their own or their spouse's work in covered employment. However, individuals aged 65 and older who are not otherwise eligible for Medicare Part A benefits and certain disabled individuals who have exhausted other entitlement may voluntarily purchase Part A coverage. In most cases, persons who voluntarily purchase Part A must also purchase Part B. The periods during which one can enroll are the same as those for Part B (see \" Medicare Part B Eligibility and Enrollment \").", "The monthly Part A premium is equal to the full average per capita value of the Part A benefit ($437.00 per month in 2019). Persons who have at least 30 quarters of covered employment (or are married to someone who has such coverage) pay a premium that is 45% less than the full Part A premium ($240.00 per month in 2019). CMS estimates that in 2019, about 679,000 individuals will voluntarily enroll in Part A by paying the full premium and about 75,000 will pay the reduced premium. ", "Similar to Part B, a penalty is imposed for persons who delay Part A enrollment beyond their initial enrollment period (which is the same seven-month period applicable for enrollment in Part B). However, both the amount of the penalty and the duration of the penalty are different than under Part B. Persons who delay Part A enrollment for at least 12 months beyond their initial enrollment period are subject to a 10% premium surcharge. The surcharge is 10% regardless of the length of the delay. Further the surcharge only applies for a period equal to twice the number of years (i.e., 12-month periods) during which an individual delays enrollment. Thus, an individual who delays enrollment for three years under Part A would be subject to a 10% penalty for six years, whereas a person who delays enrollment for the same three-year period under Part B would be subject to a permanent 30% penalty."], "subsections": []}]}]}]}}
{"id": "98-15", "title": "House Committee on Ethics: A Brief History of Its Evolution and Jurisdiction", "released_date": "2019-04-01T00:00:00", "summary": ["The United States Constitution (Article 1, Section 5, clause 1) provides each House of Congress with the sole authority to establish rules, judge membership requirements, and punish and expel Members. From 1789 to 1967, the House of Representatives dealt with disciplinary action against Members on a case-by-case basis, often forming ad-hoc committees to investigate and make recommendations when acts of wrongdoing were brought to the chamber's attention. Events of the 1960s, including the investigation of Representative Adam Clayton Powell for alleged misuse of Education and Labor Committee funds, prompted the creation of a permanent ethics committee and the writing of a Code of Conduct for Members, officers, and staff of the House.", "Begun as a select committee in the 89th Congress (1965-1966), the House created a 12-member panel to \"recommend to the House \u2026 such \u2026 rules or regulations \u2026 necessary or desirable to insure proper standards of conduct by Members of the House and by officers and employees of the House, in the performance of their duties and the discharge of their responsibilities.\" Acting on the select committee's recommendations, the House created a permanent Committee on Standards of Official Conduct in the 90th Congress (1967-1968). In the 112th Congress (2011-2012), the committee was renamed the Committee on Ethics.", "This report briefly outlines the background of ethics enforcement in the House of Representatives, including the creation of both the Select Committee on Ethics and the Committee on Ethics. The report also focuses on various jurisdictional and procedural changes that the committee has experienced since 1967 and discusses the committee's current jurisdiction and procedures.", "For additional information on ethics in the House of Representatives, please refer to CRS Report R40760, House Office of Congressional Ethics: History, Authority, and Procedures, by Jacob R. Straus; CRS Report RL30764, Enforcement of Congressional Rules of Conduct: A Historical Overview, by Jacob R. Straus; and CRS Report R44213, Altering House Ethics Committee Sanction Recommendations on the Floor: Past Precedent and Options for Action, by Jacob R. Straus and James V. Saturno."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["In the Federalist Papers , James Madison noted the importance of participation by upstanding citizens at all levels of government as a condition for legitimate governance. \"The aim of every political constitution is, or ought to be, first to obtain for rulers men who possess most wisdom to discern, and most virtue to pursue, the common good of the society; and in the next place, to take the most effectual precautions for keeping them virtuous whilst they continue to hold their public trust.\" ", "To ensure that Members uphold high standards, the Constitution provides each house of Congress sole authority to establish rules, judge membership requirements, and punish and expel its Members. Article I, Section 5, clause 1 provides that \"Each House shall be the Judge of the Elections, Returns, and Qualifications of its own Members.\" In addition, clause 2 provides that \"Each House may determine the Rules of its Proceedings, punish its Members for disorderly Behaviour, and, with the Concurrence of two thirds, expel a Member.\" Congress used their ability to establish ethics rules and to punish individual Members sparingly in the 18 th and 19 th centuries. ", "As former Senate historian Richard Baker observed on the subject of congressional ethics, \"[f]or nearly two centuries, a simple and informal code of behavior existed. Prevailing norms of general decency served as the chief determinants of proper legislative conduct. \" During that time, Congress often dealt with potential ethics issues \"on a case-by-case basis, only with the most obvious acts of wrongdoing, those clearly 'inconsistent with the trust and duty of a member. '\" Events in the 1960s, including the investigation of Representative Adam Clayton Powell's alleged misuse of Education and Labor Committee funds, prompted a special subcommittee of the Committee on House Administration to investigate the allegations and the potential creation of an ethics committee to establish a code of conduct for the House of Representatives.", "This report examines the history and evolution of the House Committee on Ethics, including the committee's jurisdiction and investigative procedure. It does not deal with changes to federal or state criminal law or with criminal pros ecutions of Members of Congress or with the specifics of disciplinary cases in the House."], "subsections": []}, {"section_title": "Creating a Permanent Ethics Committee", "paragraphs": ["Prior to the creation of the House Committee on Standards of Official Conduct in the 90 th Congress (1967-1968), no uniform mechanism existed for self-discipline in the House of Representatives. Congress, however, had previously attempted to create an ethical framework for House Members and employees. In 1958, Congress established the first Code of Ethics for Government Service. Initially proposed in 1951 by Representative Charles Bennett, the Code of Ethics was adopted as a result of a House investigation of presidential chief of staff Sherman Adams, who was alleged to have received gifts from an industrialist being investigated by the Federal Trade Commission. The Code of Ethics for Government Service standards continue to be recognized as ethical guidance in the House and Senate. They are, however, not legally binding because the code was adopted by congressional resolution, not by law. ", "In the period preceding the creation of the Committee on Standards of Official Conduct in 1967, investigations into alleged wrongdoing by Members and staff of the House were dealt with in an ad-hoc fashion. There were, however, attempts to create a more uniform system to investigate and discipline Members and staff. For example, during hearings before the Joint Committee on the Organization of Congress in 1965, considerable testimony was presented on the ethical conduct of Members, and the need for House and Senate codes of conduct, financial disclosure regulations, and a House Ethics Committee (the Senate had created one in 1964). In its final report, the joint committee called for the creation of a Committee on Standards and Conduct in the House."], "subsections": [{"section_title": "Select Committee on Standards and Conduct", "paragraphs": ["On September 2, 1966, following publicized allegations of misconduct by House Education and Labor Committee Chair Adam Clayton Powell, Representative Charles Bennett introduced H.Res. 1013 to create a Select Committee on Standards and Conduct, which was referred to the Committee on Rules. On September 7, the Committee on Rules reported the resolution \"with the recommendation that the resolution do pass.\" On October 19, the House debated, amended, and agreed to H.Res. 1013, creating the select committee.", "As adopted, the resolution created a 12-member panel, with 6 majority and 6 minority Members appointed by the Speaker of the House. The Select Committee was charged with two duties. They were to", "(1) recommend to the House, by report or resolution such additional rules or regulations as the Select Committee shall determine to be necessary or desirable to insure proper standards of conduct by Members of the House and by officers or employees of the House, in the performance of their duties and the discharge of their responsibilities; and ", "(2) report violations, by a majority vote of the Select Committee, of any law to the proper Federal and State authorities.", "Pursuant to H.Res. 1013, the report on the select committee's activities at the end of the 89 th Congress (1965-1966) included recommendations for House action on ethics-related matters. Because the select committee only existed between October and December 1966, the committee concluded that they could not \"prudently recommend changes in existing provisions of law or recommend new ones at this time.\" Instead, they recommended that (1) the committee be continued as a select committee in the 90 th Congress; (2) legislation introduced in the 90 th Congress on standards and conduct should be referred to the select committee; and (3) Members of the House should be asked for suggested changes in existing statutes. In addition, the report included draft language for the continuation of the select committee."], "subsections": []}, {"section_title": "Committee on Standards of Official Conduct (Now Committee on Ethics)", "paragraphs": ["In the first session of the 90 th Congress (1967-1966), more than 100 resolutions were introduced to create a Committee on Standards of Official Conduct. One of these proposals, H.Res. 18, was introduced on January 10, 1967, by Representative Charles Bennett, chair of the Select Committee on Standards and Conduct in the 89 th Congress. H.Res. 18 was referred to the Committee on Rules, which held a series of hearings on this, and other similar resolutions, in February and March 1967.", "During the hearings, the Committee on Rules heard from numerous Members of the House and considered proposals to create both a select and a standing committee on standards and conduct. Representative Bennett, the sponsor of H.Res. 18, argued that a standards committee would be essential to aid the House in dealing with issues of perceived and actual impropriety by Members. He testified", "The public image of Congress demands that the House establish a full, working, thoughtful committee working solely in the field of standards and conduct. Sixty percent of those answering a recent Gallup poll said they believe the misuse of Government funds by Congressmen is fairly common. Of course, we know that such abuses are, in fact, not common, but we have seen a number of such damaging polls showing the people's lack of faith in the integrity of Congress.", "There is a need for a vehicle in the House to achieve and maintain the highest possible standards by statute and enforcement thereof. This can only be done after through study by a committee whose primary interests are in the field of ethics.", "On April 6, 1967, following its hearings on H.Res. 18 and other similar resolutions, the House Rules Committee reported H.Res. 418, \"to establish a standing committee to be known as the Committee on Standards of Official Conduct.\" ", "On April 13, the House debated and passed H.Res. 418 by a vote of 400 to zero. The resolution created a bipartisan 12-member standing committee with the initial mission to make \"recommendations for its jurisdiction\" and to \"recommend as soon as practicable to the House of Representatives such changes in laws, rules, and regulations as the committee deems necessary to establish and enforce standards of official conduct for Members, officers and employees of the House.\" The first members of the committee were appointed on May 1 when H.Res. 457 (majority members) and H.Res. 458 (minority members) were agreed to by the House.", "The Committee on Standards of Official Conduct (Committee on Standards) held its first hearings in the summer and fall of 1967. The hearings were designed to help the committee meet the requirements of H.Res. 418 \"to write, and recommend to the House, a set of standards for the official conduct of the Chambers' Members and employees.\"", "In March 1968, the committee issued a report summarizing their activities and recommending", "continuation of the committee as a select committee; changes in the committee's jurisdiction and powers; creation of a Code of Official Conduct and financial disclosure rules for Members, officers, and employees of the House; establishment of standardized controls by the Committee on House Administration over committees using counterpart funds (foreign currencies held by U.S. embassies that can only be spent in the country of origin); a prompt review of the Federal Corrupt Practices Act (reporting of campaign expenditures) by the House; and compliance by House candidates with applicable provisions of the proposed Code of Official Conduct.", "On March 14, 1968, Representative Melvin Price, chair of the Committee on Standards, introduced H.Res. 1099 \"to continue the Committee on Standards of Official Conduct as a permanent standing committee of the House of Representatives.\" The resolution was referred to the Committee on Rules, and was reported with amendments on April 1. On April 3, the Committee on Rules reported a special rule (H.Res. 1119) for the consideration of H.Res. 1099. Following adoption of H.Res. 1119, debate on H.Res. 1099 proceeded. In his opening statement, Representative Price discussed the reasons for amending H.Res. 418 and making the committee a permanent, standing committee of the House.", "The reason for amending that original resolution, as opposed to offering a completely new resolution, is that the committee felt it would be advantageous\u2014from the standpoints of continuity and orderliness\u2014to extend the life of the existing committee rather than constitute a new committee.", "Following the adoption of several amendments, H.Res. 1099 was agreed to by a vote of 406 to 1. The resolution provided for (1) continuation of the Committee on Standards as a permanent standing House committee; (2) enumeration of the committee's jurisdiction and powers; (3) creation of the first House Code of Official Conduct (Rule XLIII); and (4) adoption of the first financial disclosure requirements for Members, officers, and designated employees (Rule XLIV). ", "In the 112 th Congress, the House renamed the Committee on Standards of Official Conduct to the Committee on Ethics. The committee will be referred to as the Committee on Ethics for the remainder of this report."], "subsections": []}]}, {"section_title": "Jurisdiction", "paragraphs": ["In addition to establishing the Committee on Ethics as a permanent standing committee, H.Res. 1099 formalized the committee's jurisdiction. The History of the United States House of Representatives, 1789-1994 , published by the Committee on House Administration in the 103 rd Congress (1993-1994), summarized four major jurisdictional areas for the Committee on Ethics. ", "Since 1968, the House has authorized and directed the Ethics Committee to: (1) recommend to the House legislative or administrative actions deemed necessary for establishing or enforcing standards of conduct; (2) investigate allegations of violations of the Code of Official Conduct or any law, rule, regulation, or other standard of conduct applicable to Members, officers, and employees in the performance of official duties; and after notice and a hearing, recommend to the House whatever action or sanctions it deems appropriate; (3) subject to House approval, report to appropriate state and federal authorities about evidence of violations of law by Members, officers, and employees in the performance of official duties; and (4) issue and publish advisory opinions for the guidance of Members, officers, and employees.", "The committee was also provided with jurisdiction over the Code of Official Conduct and financial disclosure. ", "In addition to establishing the committee's jurisdiction, H.Res. 1099, and subsequent amendments, imposed several constraints on the Committee on Ethics. These limits, except where noted, are still in effect in House Rule XI, clause 3(a). They stipulate that", "there must be an affirmative vote of seven out of 12 committee members for the issuance of any report, resolution, recommendation, or advisory opinion relating to the official conduct of a Member, officer, or employee or the investigation of such conduct; investigations, other than those initiated by the committee, can be undertaken only upon receipt of a complaint, in writing and under oath, from a Member of the House, or an individual not a Member if the committee finds that such complaint has been submitted by the individual to no fewer than three Members who have refused in writing to transmit the complaint to the committee; investigations of alleged violations of any law or rule that was not in effect at the time of the alleged violation are prohibited; and members of the committee are not eligible to participate in any committee proceeding relating to their official conduct.", "H.Res. 1099 also empowered the committee to hold hearings, receive testimony, and issue subpoenas in the course of conducting an investigation.", "When discussing the jurisdiction of House committees, it is important to note that the House Parliamentarian is the sole definitive authority on questions relating to the jurisdiction of the chamber's committees and should be consulted for a formal opinion on any specific procedural question."], "subsections": [{"section_title": "Changes in Jurisdiction", "paragraphs": ["Since the establishment of the Committee on Ethics as a permanent standing committee, the committee's jurisdiction has been amended a number of times. Each of these changes \"necessitated following experience under prior rules\" and reflected the changing nature of ethics enforcement in the House."], "subsections": [{"section_title": "Lobbying and Campaign Finance", "paragraphs": ["On May 19, 1970, Representative William Colmer introduced H.Res. 1031 to amend then clause 19 of Rule XI of the House \"with respect of lobbying practices and political campaign contributions affecting the House of Representatives.\" The Committee on Rules reported the resolution on June 11, and it was brought up for debate on July 8. Following debate, the resolution was adopted to give the Committee on Ethics formal jurisdiction over lobbying activities as well as those involving the raising, reporting, and use of campaign funds. ", "Authority over campaign contributions, lobbying, and financial disclosure have subsequently been removed from the committee's jurisdiction. In the 94 th Congress (1975-1976), the House transferred jurisdiction over campaign contributions to the Committee on House Administration as part of the rules package. In the 95 th Congress (1977-1978), the House transferred jurisdiction over lobbying to the Committee on the Judiciary and jurisdiction over measures relating to financial disclosure was reassigned to the Committee on Rules."], "subsections": []}, {"section_title": "Rules of Conduct", "paragraphs": ["On March 2, 1977, the House adopted H.Res. 287 , which contained several amendments and additions to the House rules of conduct. Included were the first requirement that financial disclosure be made public; limits on outside earned income and unofficial office accounts; and further restrictions on the acceptance of gifts, the use of the franking privilege, and limits on foreign travel. Pursuant to H.Res. 287 , the Committee on Ethics assumed jurisdiction over these additional areas and was authorized to maintain the public financial disclosure reports filed by Members, officers, and designated employees. In addition, the House established a Select Committee on Ethics, chaired by Representative L. Richardson Preyer, to assist the Committee on Ethics with the implementation of the new rules."], "subsections": []}]}, {"section_title": "Additional Authorities", "paragraphs": ["On July 14, 1977, the House agreed to H.Res. 658 and established the Permanent Select Committee on Intelligence. The resolution also authorized the Committee on Ethics to \"investigate an unauthorized disclosure of intelligence or intelligence-related information by a Member, officer, or employee of the House in violation of paragraph (c) and report to the House concerning any allegation which it finds to be substantiated.\"", "In August 1977, the Committee on Ethics was designated as the \"employing agency\" for the House. Pursuant to P.L. 95-105 , the Foreign Relations Authorization Act for FY 1978, the committee was authorized to issue regulations governing the acceptance by House Members, personnel, and employees of gifts, trips, and decorations from foreign governments."], "subsections": [{"section_title": "Financial Disclosure", "paragraphs": ["In 1978, the Ethics in Government Act began requiring government-wide public financial disclosure requirements. Subsequently, with the adoption of the House rules for the 96 th Congress (1979-1980), the provisions of the House financial disclosure rule were replaced by those of the Ethics Act and incorporated into House rules. This act delegated to the Committee on Ethics review, interpretation, and compliance responsibilities for the public financial disclosure reports that henceforth were to be filed with the Clerk of the House.", "On April 4, 2012, the STOCK Act (Stop Trading on Congressional Knowledge Act) was passed to affirm that no exemption exists from \"insider trading\" laws and regulations for Members of Congress and congressional employees. Pursuant to the act, the House Committee on Ethics (and the Senate Select Committee on Ethics) is required to", "issue interpretive guidance of the relevant rules of each chamber, including rules on conflicts of interest and gifts, clarifying that a Member of Congress and an employee of Congress may not use nonpublic information derived from such person's position as a Member of Congress or employee of Congress or gained from the performance of such person's official responsibilities as a means for making a private profit.", "On August 17, 2012, the committee issued a \"pink sheet\" on the implementation of the STOCK Act that clarified who is required to file, what transactions must be reported, the requirements for participating in a stock's initial public offering (IPO), waivers and exclusions to the act, when transactions must be reported, how and where transactions should be reported, late filing fees, penalties for failing to file and filing false information, and how to get assistance from the committee."], "subsections": []}, {"section_title": "Ethics Reform Act of 1989", "paragraphs": ["The Ethics Reform Act of 1989 amended the Ethics in Government Act of 1978 and included a variety of ethics and pay reforms for the three branches of government. Enforcement of these changes further expanded the jurisdiction of the Committee on Ethics. Changes made pursuant to the Ethics Reform Act of 1989 included enforcement of the act's ban on honoraria, limits on outside earned income, and restrictions on the acceptance of gifts. The committee was also given the responsibility for consideration of any requests for a written waiver of the limits imposed by the House gift ban rule."], "subsections": []}]}]}, {"section_title": "Procedures", "paragraphs": ["Procedures for the Committee on Ethics are set through House Rule XI, clause 3 and are further specified in the committee's rules.", "Since its creation in 1967, several changes have been made to the Committee on Ethics' procedures. Change to the committee's procedures can be divided into eight broad time periods or categories: changes in the 1970s, the Ethics Reform Act of 1989, the Ethics Reform Task Force of 1997, 109 th Congress changes, 110 th Congress changes, 113 th Congress changes, 114 th Congress changes, and the creation of the Office of Congressional Ethics in 2008. No changes were made to House ethics procedures in the 111 th or 112 th Congresses."], "subsections": [{"section_title": "Changes in the 1970s", "paragraphs": ["During the first years of the Committee on Ethics many adjustments were made to the procedural operations of the committee. While some of the changes made during the 1970s have been repealed or replaced, three changes remain in effect.", "1. In the 93 rd Congress (1973-1974), the House agreed to H.Res. 988 and amended the jurisdiction and procedures of nearly all standing committees. As part of those reforms, House Rules were amended to permit a majority vote to approve Committee on Standard's reports, recommendations, advisory opinions, and investigations; 2. In the 95 th Congress (1977-1978), the House included in its opening day rules package a provision permitting a member of the committee to disqualify himself/herself from participating in an investigation upon submission of an affidavit of disqualification in writing and under oath; and 3. In the 96 th Congress (1979-1980), House rules were amended to prohibit \"information or testimony received, or the contents of a complaint or the fact of its filing\" from being \"publicly disclosed by any committee or staff member unless specifically authorized in each instance by a vote of the full committee.\""], "subsections": []}, {"section_title": "Ethics Reform Act of 1989", "paragraphs": ["The Ethics Reform Act of 1989 ( P.L. 101-194 ) contained provisions affecting all three branches of government and mandated changes to the House Committee on Ethics. Specifically, it established the Office of Advice and Education in the Committee on Ethics. The Office of Advice and Education's primarily responsibilities include", "(A) Providing information and guidance to Members, officers and employees of the House regarding any laws, rules, regulations, and other standards of conduct applicable to such individuals in their official capacities, and any interpretations and advisory opinions of the committee.", "(B) Submitting to the chairman and ranking minority member of the committee any written request from any such Member, officer or employee for an interpretation of applicable laws, rules, regulations, or other standards of conduct, together with any recommendations thereon.", "(C) Recommending to the committee for its consideration formal advisory opinions of general applicability.", "(D) Developing and carrying out, subject to the approval of the chairman, periodic educational briefings for Members, officers and employees of the House on those laws, rules, regulations, or other standards of conduct applicable to them.", "The Office of Advice and Education offers training, guidance, and provides recommendations to Members, officers, and employees of the House on standards of conduct applicable to their official duties.", "Many other changes implemented by the 1989 act are still applicable. These include", "\"bifurcation\" (separation) within the committee of its investigative and adjudicative functions; a requirement that the committee report to the House on any case it has voted to investigate and that any \"letter of reproval\" or other committee administrative action may be issued only as part of a final report to the House; a statute of limitation prohibiting the committee from initiating or undertaking an investigation of alleged violations occurring prior to the third previous Congress unless they are related to a continuous course of conduct in recent years; a guarantee that any Member who is the respondent in any Ethics Committee investigation may be accompanied by one counsel on the House floor during consideration of his/her case; and a time limit of committee service of no more than three out of any five consecutive Congresses.", "The act also increased the size of the committee's membership from 12 to 14. That change, however, was superseded by the 1997 amendments that reduced the size of the committee from 14 to 10 members."], "subsections": []}, {"section_title": "Ethics Reform Task Force", "paragraphs": ["On February 12, 1997, the House created an Ethics Reform Task Force to \"look into any and all aspects of the ethics process,\" including", "Who can file a complaint and upon what basis of information, what should be the standards for initiating an investigation, what evidentiary standard should apply throughout the process, how has the bifurcation process worked, does it take too long to conduct a review, should non-House Members play a part in a reformed ethics process, should we enlarge the pool of Members who might participate in different phases of the process?", "Chaired by Representatives Bob Livingston and Ben Cardin, the 10-member task force was directed to review the existing House ethics process and to recommend reforms. At the same time that the House approved the establishment of the task force, it also approved a 65-day moratorium on the filing of new ethics complaints to enable the Task Force to conduct its work \"in a climate free from specific questions of ethical propriety.\"", "After seven months of study, the Task Force reported to the House in June 1997 with several recommendations. These included ensuring that the Committee on Standards operated in a non-partisan manner; that the committee's workings be kept confidential unless otherwise voted on by the committee; that an improved system be created for the filing of information offered as a complaint; that the committee should create an efficient administrative structure; that due process for Members, officers, and employees of the House be preserved; that Members play a greater role in the ethics process; and that matters before the committee be dealt with in a timely manner.", "On September 18, 1997, the House debated and agreed to H.Res. 230 , a rule to provide for the consideration of H.Res. 168 , the implementation of the Task Force's recommendations, and proceeded to debate and amend H.Res. 168 . The major ethics process changes adopted pursuant to H.Res. 168 included the following:", "altering the way individuals who are not Members of the House file complaints with the Committee on Ethics by requiring them to have a Member of the House certify in writing that the information is submitted in good faith and warrants consideration; decreasing the size of the committee from 14 members to 10; establishing a 20-person pool of Members (10 from each party) to supplement the work of the Ethics Committee as potential appointees to investigative subcommittees that the committee might establish; requiring the chair and ranking minority member of the committee to determine within 14 calendar days or 5 legislative days, whichever comes first, if the information offered as a complaint meets the committee's requirements; allowing an affirmative vote of two-thirds of the members of the committee or approval of the full House to refer evidence of violations of law disclosed in a committee investigation to the appropriate state or federal law enforcement authorities; providing for a nonpartisan, professional committee staff; allowing the ranking minority member on the committee to place matters on the committee's agenda; and decreasing the maximum service on the committee from six years to four years during any three successive Congresses and required at least four members to be rotated off the committee at the end of each Congress."], "subsections": []}, {"section_title": "109th Congress Changes", "paragraphs": ["On January 4, 2005, the House included several provisions in its rules for the 109 th Congress (2005-2006) that affected the Committee on Ethics. These included the process for handling allegations against a House Member, officer, or employee; procedures for instances when the conduct of one Member, officer, or employee might be referenced in the course of an investigation against another Member, officer, or employee; the due process for respondents and witnesses; and the dismissal of complaints. Subsequently, on April 27, 2005, the House reversed earlier 109 th Congress changes when it agreed to H.Res. 240 and reinstated \"certain provisions of the rules relating to procedures of the Committee on Standards of Official Conduct to the form in which those provisions existed at the close of the 108 th Congress.\""], "subsections": []}, {"section_title": "110th Congress Changes", "paragraphs": ["On June 5, 2007, the House agreed to H.Res. 451 , directing the Committee on Ethics to \"respond to the indictment of, or the filing of charges of criminal conduct in a court of the United States or any State against, any Member of the House of Representatives by empaneling an investigative subcommittee to review the allegations not later than 30 days after the date the Member is indicted or the charges are filed.\" The resolution was adopted following the grand jury indictment of a Member of the House in the United States District Court for the Eastern District of Virginia. The requirements of H.Res. 451 were continued in the rules packages for both the 111 th and the 112 th Congresses."], "subsections": []}, {"section_title": "113th Congress Changes", "paragraphs": ["As part of the rules package ( H.Res. 5 ) for the 113 th Congress (2013-2014), the House amended the Code of Conduct (Rule XXIII, clause 8(c)) to remove references to \"spouses\" and replace those references with the term \"relative.\" For the purpose of the Rule, relative is defined as", "an individual who is related to the Member, Delegate, or Resident Commissioner as father, mother, son, daughter, brother, sister, uncle, aunt, first cousin, nephew, niece, husband, wife, father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, stepfather, stepmother, stepson, stepdaughter, stepbrother, stepsister, half brother, half sister, grandson, or granddaughter.", "Additionally, H.Res. 5 required that copies of executed oaths (or affirmations) made by an officer or employee of the House be retained by the Sergeant at Arms, while oaths (or affirmations) made by Members, Delegates, or the Resident Commissioner continue to be retained by the Clerk of the House."], "subsections": []}, {"section_title": "114th Congress Changes", "paragraphs": ["First adopted as part of the rules package ( H.Res. 5 ) for the 114 th Congress (2015-2016), the House made two changes to Rule XI, clause 3, by adding a new paragraph at the end of the section on House Ethics Committee procedures that stated", "The committee may not take any action that would deny any person any right or protection provided under the Constitution of the United States.", "H.Res. 5 further amended Rule XI, clause 3(a)(6)(B)(i) to require that all new officers, employees, Members, Delegates, and the Resident Commissioner receive ethics training within 60 days of beginning their House service. Previously, only new officers or employees were required to complete ethics training within their first 60 days of service."], "subsections": []}, {"section_title": "115th Congress Changes", "paragraphs": ["As part of the rules package ( H.Res. 5 ) for the 115 th Congress (2017-2018), the House amended Rule II, clause 3 to authorize the Sergeant at Arms to impose a fine\u2014$500 for a first offense and $2,500 for any subsequent offense\u2014against a Member, Delegate, or Resident Commissioner for using electronic devices to take photographs, or record floor proceedings in violation of Rule XVII, clause 5. Should a fine be imposed, the Member has 30 calendar days or 5 legislative days (whichever is later) to appeal the fine to the Committee on Ethics. The Committee then has 30 calendar days or 5 legislative days (whichever is later) to dismiss the fine or allow it to proceed, and report its action to the Speaker of the House, the Chief Administrative Officer (CAO), and the Member involved."], "subsections": []}, {"section_title": "116th Congress Changes", "paragraphs": ["As part of the rules package ( H.Res. 6 ) for the 116 th Congress (2019-2020), the House amended Rule XI to require that all Members, Delegates, and the Resident Commissioner attend and certify completion of annual ethics training. Previously, only officers and employees were required to certify the completion of ethics training on an annual basis. Additionally, H.Res. 6 authorizes the Committee on Ethics to \"consider as evidence the transcripts and exhibits from trial where a Member, Delegate, or the Resident Commissioner was convicted by a court of record for a crime related to the subject of the investigation by the Committee on Ethics.\"", "The 116 th Congress also directed the Committee on Ethics to empanel an investigative subcommittee to review allegations related to indictments of, or the filing of charges of criminal conduct against, any Member of the House. This provision was first agreed to in the 110 th Congress."], "subsections": []}, {"section_title": "Office of Congressional Ethics", "paragraphs": ["On March 11, 2008, the House adopted H.Res. 895 to create the Office of Congressional Ethics (OCE). The OCE was created to review information, and when appropriate, refer findings of fact to the House Committee on Ethics. Information of alleged wrongdoing by Members, officers, and employees of the House may be accepted by the OCE from the general public, but only the OCE board can initiate a review. The OCE was most recently reauthorized by the House as part of the rules package ( H.Res. 6 ) adopted by the 116 th Congress on January 3, 2019."], "subsections": [{"section_title": "Appendix. Membership on the Committee on Ethics, 1967-2019", "paragraphs": ["Since its inception in the 90 th Congress (1967-1968), the Committee on Ethics has had a total of 303 members. Table A-1 provides a list of all Members to have served on the Committee on Ethics, their party affiliation, and their state and district."], "subsections": []}]}]}]}}
{"id": "R45249", "title": "Section 232 Investigations: Overview and Issues for Congress", "released_date": "2019-04-02T00:00:00", "summary": ["President Trump has used Section 232 authority to apply new tariffs to steel and aluminum imports and potentially on automobile and automobile parts and other sectors currently under investigation. These actions have raised a number of policy issues and some Members of Congress have introduced legislation to revise various Section 232 authorities. Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. \u00a71862) provides the President with the ability to impose restrictions on certain imports based on an affirmative determination by the Department of Commerce (Commerce) that the product under investigation \"is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security.\" Section 232 actions are of interest to Congress because they are a delegation of Congress's constitutional authority \"To lay and collect \u2026 Duties\" and \"To regulate Commerce with foreign Nations.\"", "Global overcapacity in steel and aluminum production, mainly driven by China, has been an ongoing concern of Congress. The George W. Bush, Obama, and Trump Administrations each engaged in multilateral discussions to address global steel capacity reduction through the Organisation for Economic Co-operation and Development (OECD). While the United States has extensive antidumping and countervailing duties on Chinese steel imports to counter China's unfair trade practices, steel industry and other experts argue that the magnitude of Chinese production acts to depress prices globally.", "Effective March 23, 2018, President Trump applied 25% and 10% tariffs, respectively, on certain steel and aluminum imports. The President temporarily exempted several countries from the tariffs pending negotiations on potential alternative measures. Permanent tariff exemptions in exchange for quantitative limitations on U.S. imports were eventually announced covering steel for Brazil and South Korea, and both steel and aluminum for Argentina. Australia was permanently exempted from both tariffs with no quantitative restrictions. In August 2018, President Trump raised the tariff to 50% on steel imports from Turkey. The proposed United States-Mexico-Canada Agreement (USMCA) would not resolve or address the Section 232 tariffs on imported steel and aluminum from Canada and Mexico.", "Commerce is managing a process for potential product exclusions in order to limit potential negative domestic effects of the tariffs on U.S. businesses and consumers. Of the nearly 70,000 steel exclusion requests, over 16,000 have been granted, and about 46,000 have been denied to date. Commerce also received about 10,000 aluminum exclusion requests, with 3,000 exclusions granted and 500 denied. Several Members have raised issues and concerns about the exclusionary process.", "U.S. trading partners are challenging the tariffs under World Trade Organization (WTO) dispute settlement rules and have threatened or enacted retaliatory measures. Some analysts view the U.S. unilateral actions as potentially undermining WTO rules, which generally prohibit parties from acting unilaterally, but provide exceptions, including when parties act to protect \"essential security interests.\"", "Congress enacted Section 232 during the Cold War when national security issues were at the forefront of national debate. The Trade Expansion Act of 1962 sets clear steps and timelines for Section 232 investigations and actions, but allows the President to make a final determination over the appropriate action to take following an affirmative finding by Commerce that the relevant imports threaten to impair national security. Prior to the Trump Administration, there were 26 Section 232 investigations, resulting in nine affirmative findings by Commerce. In six of those cases the President imposed a trade action.", "The Trump Administration has launched three additional Section 232 investigations. On May 23, 2018, Commerce initiated an investigation on U.S. automobile and automobile part imports; on July 18, 2018, Commerce launched a Section 232 investigation into uranium ore and product imports; and on March 4, 2019, Commerce began an investigation into titanium sponge imports. The latter two investigations were in response to petitions by U.S. firms. These investigations, as well as the Administration's decision to apply the steel and aluminum tariffs on imports from Canada, Mexico, and the EU\u2014all major suppliers of the affected imports\u2014have prompted further questions by some Members of Congress and trade policy analysts on the appropriate use of the trade statute and the proper interpretation of threats to national security on which Section 232 investigations are based. These actions have also intensified debate over potential legislation to constrain the President's authority with respect to Section 232.", "The steel and aluminum tariffs are affecting various stakeholders in the U.S. economy, prompting reactions from several Members of Congress, some in support of the measures and others voicing concerns. In general, the tariffs are expected to benefit some domestic steel and aluminum manufacturers, leading to potentially higher domestic steel and aluminum prices and expansion in production in those sectors, while potentially negatively affecting consumers and many end users (e.g., auto manufacturing and construction) through higher costs. To date, Congress has held hearings on the potential economic and broader policy effects of the tariffs, and legislation has been introduced to override the tariffs that have already been imposed, or to revise or potentially limit the authority previously delegated to the President in future investigations."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["On March 8, 2018, President Trump issued two proclamations imposing tariffs on U.S. imports of certain steel and aluminum products, respectively, using presidential powers granted under Section 232 of the Trade Expansion Act of 1962. Section 232 authorizes the President to impose restrictions on certain imports based on an affirmative determination by the Department of Commerce (Commerce) that the targeted products are being imported into the United States \"in such quantities or under such circumstances as to threaten to impair the national security.\" Section 232 investigations and actions are important for Congress, as the Constitution gives it primary authority over international trade matters. In the case of Section 232, Congress has delegated to the President broad authority to impose limits on imports in the interest of U.S. national security. The statute does not require congressional approval of any presidential actions that fall within its scope. In the Crude Oil Windfall Profit Tax Act of 1980, however, Congress amended Section 232 by creating a joint disapproval resolution provision under which Congress can override presidential actions in the case of adjustments to petroleum or petroleum product imports.", "Section 232 is one of several tools the United States has at its disposal to address trade barriers and other foreign trade practices. These include investigations and actions to address import surges that are a \"substantial cause of serious injury\" or threat thereof to a U.S. industry (Section 201 of the Trade Act of 1974), those that address violations or denial of U.S. benefits under trade agreements (Section 301 of the Trade Act of 1974), and antidumping and countervailing duty laws (Title VII of the Tariff Act of 1930).", "Trade is an important component of the U.S. economy, and Members often hear from constituents when factories and other businesses are hurt by competing imports, or if exporters face trade restrictions and other market access barriers overseas. Section 232 actions may affect industries, workers, and consumers in congressional districts and states (both positively and negatively). Following the steel and aluminum Section 232 actions, Commerce initiated Section 232 investigations into imports of automobiles and automobile parts in May 2018, uranium ore and product imports in July 2018, and titanium sponges in March 2019. Commerce submitted the auto investigation report to the President on February 17, 2019, but the report has not been made public or shared with Congress; the uranium report is expected by mid-April 2019, and the titanium sponges report is due in late November 2019. The current investigations have raised a number of economic and broader policy issues for Congress.", "This report provides an overview of Section 232, analyzes the Trump Administration's Section 232 investigations and actions, and considers potential policy and economic implications and issues for Congress. To provide context for the current debate, the report also includes a discussion of previous Section 232 investigations and a brief legislative history of the statute."], "subsections": []}, {"section_title": "Overview of Section 232", "paragraphs": ["The Trade Act of 1962, including Section 232, was enacted during the Cold War when national security issues were at the forefront. Section 232 has been used periodically in response to industry petitions, as well as through self-initiation by the executive branch. The Trade Expansion Act establishes a clear process and timelines for a Section 232 investigation, but the executive branch's interpretation of \"national security\" and the potential scope of any investigation can be expansive."], "subsections": [{"section_title": "Key Provisions and Process", "paragraphs": ["Upon request by the head of any U.S. department or agency, by application by an interested party, or by self-initiation, the Secretary of Commerce must commence a Section 232 investigation. The Secretary of Commerce conducts the investigation in consultation with the Secretary of Defense and other U.S. officials, as appropriate, to determine the effects of the specified imports on national security. Public hearings and consultations may also be held in the course of the investigation. Commerce has 270 days from the initiation date to prepare a report advising the President whether or not the targeted product is being imported \"in such quantities or under such circumstances as to threaten to impair\" U.S. national security, and to provide recommendations for action or inaction based on the findings. Any portion of the report that does not contain classified or proprietary information must be published in the Federal Register . See Figure 1 for the Section 232 process and timeline.", "While there is no specific definition of national security in the statute, it states that the investigation must consider certain factors, such as domestic production needed for projected national defense requirements; domestic capacity; the availability of human resources and supplies essential to the national defense; and potential unemployment, loss of skills or investment, or decline in government revenues resulting from displacement of any domestic products by excessive imports. ", "Once the President receives the report, he has 90 days to decide whether or not he concurs with the Commerce Department's findings and recommendations, and to determine the nature and duration of the action he views as necessary to adjust the imports so they no longer threaten to impair the national security (generally, imposition of some trade-restrictive measure). The President may implement the recommendations suggested in the Commerce report, take other actions, or decide to take no action. After making a decision, the President has 15 days to implement the action and 30 days to submit a written statement to Congress explaining the action or inaction; he must also publish his findings in the Federal Register . Presidential actions may stay in place \"for such time, as he deems necessary to adjust the imports of such article and its derivatives so that such imports will not so threaten to impair the national security.\""], "subsections": []}, {"section_title": "Section 232 Investigations to Date", "paragraphs": ["The Commerce Department (or the Department of the Treasury before it) initiated a total of 31 Section 232 investigations between 1962 and 2019, including three investigations that remain ongoing (see Table B-1 ). In 16 of these cases, Commerce determined that the targeted imports did not threaten to impair national security. In 11 cases, Commerce determined that the targeted imports threatened to impair national security and made recommendations to the President. The President took action eight times. One case was terminated at the petitioner's request before Commerce completed its investigation. Prior to the Trump Administration, 10 Section 232 investigations were self-initiated by the Administration. (For a full list of cases to date, see Appendix B .)", "In eight investigations dealing with crude oil and petroleum products, Commerce decided that the subject imports threatened to impair national security. The President took action in five of these cases. In the first three cases on petroleum imports (1973-1978), the President imposed licensing fees and additional supplemental fees on imports, which are no longer in effect, rather than adjusting tariffs or instituting quotas. In two cases, the President imposed oil embargoes, once in 1979 (Iran) and once in 1982 (Libya). Both were superseded by broader economic sanctions in the following years. ", "In the three most recent crude oil and petroleum investigations (from 1987 to 1999), Commerce determined that the imports threatened to impair national security, but did not recommend that the President use his authority to adjust imports. In the first of these reports (1987), Commerce recommended a series of steps to increase domestic energy production and ensure adequate oil supplies rather than imposing quotas, fees, or tariffs because any such actions would not be \"cost beneficial and, in the long run, impair rather than enhance national security.\" In the latter two investigations (1994 and 1999), Commerce found that existing government programs and activities related to energy security would be more appropriate and cost effective than import adjustments. By not acting, the President in effect followed Commerce's recommendation. ", "Prior to the Trump Administration, a President arguably last acted under Section 232 in 1986. In that case, Commerce determined that imports of metal-cutting and metal-forming machine tools threatened to impair national security. In this case, the President sought voluntary export restraint agreements with leading foreign exporters, and developed domestic programs to revitalize the U.S. industry. These agreements predate the founding of the World Trade Organization (WTO), which established multilateral rules prohibiting voluntary export restraints (see \" WTO Cases \"). ", "In addition to the two recent cases on steel and aluminum, on May 23, 2018, after consultations with President Trump, Commerce Secretary Wilbur Ross announced the initiation of a Section 232 investigation to determine whether imports of automobiles, including SUVs, vans and light trucks, and automotive parts threaten to impair national security. In January 2018, two U.S. mining companies petitioned for the investigation into uranium imports. On July 18, Commerce announced the initiation of a Section 232 investigation on these imports and informed the Secretary of Defense. In September 2018, a U.S. titanium company petitioned for the investigation into titanium sponge imports. In March 2019, Commerce announced the initiation of a Section 232 investigation on these imports and informed the Secretary of Defense. "], "subsections": []}, {"section_title": "Relationship to WTO", "paragraphs": ["While unilateral trade restrictions may appear to be counter to U.S. trade liberalization commitments under the WTO agreements, Article XXI of the General Agreement on Tariffs and Trade (GATT), which predates and was one of the foundational agreements of the WTO, allows WTO members to take measures to protect \"essential security interests.\" Broad national security exceptions are also included in international trade obligations at the bilateral and regional levels, and could potentially limit the ability of countries to challenge such actions by trade partners. Historically, exceptions for national security have been rarely invoked and multiple trading partners have challenged recent U.S. actions under the WTO agreements (see \" WTO Cases \"). "], "subsections": []}]}, {"section_title": "Recent Section 232 Actions on Steel and Aluminum", "paragraphs": ["In April 2017, two\u00a0presidential\u00a0memoranda\u00a0instructed Commerce to give priority to two self-initiated investigations into the national security threats posed by imports of steel and aluminum. In conducting its investigation, Commerce held public hearings and solicited public comments via the Federal Register and consulted with the Secretary of Defense and other agencies, as required by the statute. In addition to the hearings, stakeholders submitted approximately 300 comments regarding the Section 232 investigation and potential actions. Some parties (mostly steel producers) supported broad actions to limit steel imports, while others (mostly users and consuming industries such as automakers) opposed any additional tariffs or quotas on imports. The U.S. aluminum industry held differing views of the global aluminum tariff, with most parties opposing it. Some stakeholders in the steel and aluminum industries sought a middle ground, endorsing limited actions to target the underlying issues of overcapacity and unfair trade practices. Still others focused on the process, voicing caution in the use of Section 232 authority and warning against an overly broad definition of \"national security\" for protectionist purposes.", "The Commerce investigations analyzed the importance of certain steel and aluminum products to national security, using a relatively broad definition of \"national security,\" defining it to include \"the general security and welfare of certain industries, beyond those necessary to satisfy national defense requirements, which are critical for minimum operations of the economy and government.\" The scope of the investigations extended to current and future requirements for national defense and to 16 specific critical infrastructure sectors, such as electric transmission, transportation systems, food and agriculture, and critical manufacturing, including domestic production of machinery and electrical equipment. The reports also examined domestic production capacity and utilization, industry requirements, current quantities and circumstances of imports, international markets, and global overcapacity.\u00a0Commerce based its definition of national security on a 2001 investigation on iron ore and semi-finished steel. Section 232 investigations prior to 2001\u00a0generally used a narrower definition considering U.S. national defense needs or overreliance on foreign suppliers. "], "subsections": [{"section_title": "Commerce Findings and Recommendations", "paragraphs": ["The final reports, submitted to the President on\u00a0January 11\u00a0and\u00a0January 22, 2018, respectively, concluded that imports of certain steel mill products and of certain types of primary aluminum and unwrought aluminum \"threaten to impair the national security\" of the United States. The Secretary of Commerce asserted that \"the only effective means of removing the threat of impairment is to reduce imports to a level that should ... enable U.S. steel mills to operate at 80 percent or more of their rated production capacity\" (the minimum rate the report found necessary for the long-term viability of the U.S. steel industry and, separately, for the aluminum industry). The Secretary further recommended the President \"take immediate action to adjust the level of these imports through quotas or tariffs\" and identified three potential courses of action for both steel and aluminum imports, including tariffs or quotas on all or some steel imports from specific countries. ", "The Secretary of Defense, while concurring with Commerce's \"conclusion that imports of foreign steel and aluminum based on unfair trading practices impair the national security,\" recommended targeted tariffs and that \"an inter-agency group further refine the targeted tariffs, so as to create incentives for trade partners to work with the U.S. on addressing the underlying issue of Chinese transshipment\" in which Chinese producers ship goods to another country to reexport. He also noted, however, that \"the U.S. military requirements for steel and aluminum each only represent about three percent of U.S. production.\""], "subsections": []}, {"section_title": "Presidential Actions", "paragraphs": ["On March 8, 2018, President Trump issued two proclamations imposing duties on U.S. imports of\u00a0certain steel\u00a0and\u00a0aluminum products, based on the Secretary of Commerce's findings. The proclamations outlined the President's decisions to impose tariffs of 25% on steel and 10% on aluminum\u00a0imports effective March 23, 2018, but provided for flexibility in regard to country and product applicability of the tariffs (see below). The new tariffs were to be imposed\u00a0 in addition \u00a0to any duties already in place, including antidumping and countervailing duties.", "In the proclamations, the President established a bifurcated approach, instructing Commerce to establish a process for domestic parties to request individual product exclusions and a U.S. Trade Representative (USTR)-led process to discuss \"alternative ways\" through diplomatic negotiations to address the threat with countries having a \"security relationship\" with the United States.", "The President officially notified Congress of his actions in a letter dated April 6, 2018. Several Members actively engaged in voicing their views since the investigations were launched, including through hearings and letters to the President. "], "subsections": [{"section_title": "Country Exemptions", "paragraphs": ["Initially, the President temporarily excluded imports of steel and aluminum products from Mexico and Canada from the new tariffs, and the Administration implicitly and explicitly linked a successful outcome of the North American Free Trade Agreement (NAFTA) renegotiation to maintaining the exemptions. With regard to other countries, the President expressed a willingness to be flexible, stating that countries with which the United States has a \"security relationship\" may discuss \"alternative ways\" to address the national security threat and gain an exemption from the tariffs. The President charged the USTR with negotiating bilaterally with trading partners on potential exemptions.", "On March 22, after discussions with multiple countries, the President issued proclamations temporarily excluding Australia, Argentina, Brazil, South Korea, the European Union (EU), Canada and Mexico, from the Section 232 tariffs. The President gave a deadline of May 1, 2018, by which time each trading partner had to negotiate \"a satisfactory alternative means to remove the threatened impairment to the national security by imports\" for steel and aluminum in order to maintain the exemption. On April 30, 2018, the White House extended negotiations and tariff exemptions with Canada, Mexico, and the EU for an additional 30 days, until June 1, 2018, and exempted Argentina, Australia, and Brazil from the tariffs indefinitely pending final agreements. South Korea, which pursued a resolution over the tariffs in the context of discussions to modify the U.S.-South Korea (KORUS) Free Trade Agreement, agreed to an absolute annual quota for 54 separate subcategories of steel and was exempted from the steel tariffs. South Korea did not negotiate an agreement on aluminum and its exports to the United States have been subject to the aluminum tariffs since May 1, 2018.", "On May 31, 2018, the President proclaimed Argentina and Brazil, in addition to South Korea, permanently exempt from the steel tariffs, having reached final quota agreements with the United States on steel imports. Brazil, like South Korea, did not negotiate an agreement on aluminum and is subject to the aluminum tariffs. The Administration also proclaimed aluminum imports from Argentina permanently exempt from the aluminum tariffs subject to an absolute quota. The Administration proclaimed imports of steel and aluminum from Australia permanently exempt from the tariffs as well, but did not set any quantitative restrictions on Australian imports. ", "As of June 1, 2018, imports of steel and aluminum from Canada, Mexico, and the European Union are subject to the Section 232 tariffs. These countries are among the largest suppliers of U.S. imports of the targeted goods, accounting for nearly 50% by value in 2018 (see Appendix D ). The imposition of tariffs on these major trading partners increases the economic significance of the tariffs and prompted criticism from several Members of Congress, including the chairs of the House Ways and Means and Senate Finance Committees.", "The Trump Administration completed negotiations on the proposed United States-Mexico-Canada Agreement (USMCA) on September 30, 2018, to replace the NAFTA. The USMCA did not resolve or address the Section 232 tariffs on imported steel and aluminum from Canada and Mexico, but it includes a requirement that motor vehicles contain 70% or more of North American steel and aluminum content to qualify for duty-free treatment. The three parties continue to discuss the steel and aluminum tariffs, which some analysts speculate could result in quotas on imports of Mexican and Canadian steel and aluminum. Some U.S., Canadian, and Mexican policymakers have suggested that the parties will not ratify the new agreement until the Section 232 tariffs are removed; the White House economic adviser stated that the Administration continues to negotiate the tariffs as \"part of the bigger legislative picture discussion\" for passage of USMCA. ", "With respect to the EU, on July 27, 2018, after meeting with EU President Juncker, President Trump announced plans for \"high-level trade negotiations\" to eliminate tariffs, including those on steel and aluminum, among other objectives. The two sides agreed to not impose further tariffs on each other's trade products while negotiations are active. It is unclear what those negotiations may seek in terms of alternative measures, but the United States could seek some type of quantitative restriction given the agreements the Administration has negotiated to date with most exempted countries. In addition to seeking quantitative restrictions, the Trump Administration may also pursue increasing traceability and reporting requirements, which may help limit transshipments of steel or aluminum originating from nonexempt countries."], "subsections": []}, {"section_title": "Product Exclusions", "paragraphs": ["To limit potential negative domestic impacts of the tariffs on U.S. consumers and consuming industries, Commerce published an interim final rule for how parties located in the United States may request exclusions for items that are not \"produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality.\" Requests for exclusions and objections to requests have been and will continue to be posted on regulations.gov. The rule went into effect the same day as publication to allow for immediate submissions. ", "Exclusion determinations are based upon national security considerations. To minimize the impact of any exclusion, the rule allows only \"individuals or organizations using steel articles ... in business activities ... in the United States to submit exclusion requests,\" eliminating the ability of larger umbrella groups or trade associations to submit petitions on behalf of member companies. Any approved product exclusion is limited to the individual or organization that submitted the specific exclusion request. Parties may also submit objections to any exclusion within 30 days after the exclusion request is posted. The review of exclusion requests and objections will not exceed 90 days, creating a period of uncertainty for petitioners. Exclusions will generally last for one year from the date of signature. ", "As of March 4, 2019, Commerce received almost 70,000 steel product exclusion requests, with 16,500 exclusions granted and 500 denied. As of the same date, Commerce received 10,000 aluminum exclusion requests, with 3,000 exclusions granted and 500 denied.", "Companies have complained about the intensive, time-consuming process to submit exclusion requests; the lengthy waiting period to hear back from Commerce, which has exceeded the 90 days in some cases; what some view as an arbitrary nature of acceptances and denials; and that all exclusion requests to date have been rejected when a U.S. steel or aluminum producer has objected. Alcoa, the largest U.S. aluminum maker, requested an exemption for all aluminum imported from Canada, where it operates three aluminum smelters. While the company benefits from higher aluminum prices as a result of the tariffs, it is also seeing increased costs in its own supply chain. In addition, the Cause of Action Institute filed a series of Freedom of Information Act (FOIA) requests to gain insight into the exclusion process. Commerce did not respond, leading the organization to file a lawsuit against the agency.", "Several Members of Congress have raised concerns about the exclusion process. A bipartisan group of House Members, for example, raised concerns about the speed of the review process and the significant burden it places on manufacturers, especially small businesses. The Members included specific recommendations, such as allowing for broader product ranges to be included in a single request, allowing trade associations to petition, grandfathering in existing contracts to avoid disruptions, and regularly reviewing the tariffs' effects and sunsetting them if they have a \"significant negative impact.\" ", "Commerce asserts it has taken several steps to improve the exclusion process, including increasing and organizing its staff \"to efficiently process exclusion requests,\" and \"expediting the grant of properly filed exclusion requests that receive no objections.\" The agency's International Trade Administration (ITA) also became involved in the exclusion process by analyzing exclusion requests and objections to determine whether there is sufficient domestic production available to meet the requestor's product needs. BIS remains the lead agency involved in making final decisions regarding whether the requests are granted or denied.", "Some Members have questioned the Administration's processes and ability to pick winners and losers through granting or denying exclusion requests. On August 9, 2018, Senator Ron Johnson requested that Commerce provide specific statistics and information on the exclusion requests and process and provide a briefing to the Committee on Homeland Security and Governmental Affairs. Senator Elizabeth Warren requested that the Commerce Inspector General investigate the implementation of the exclusion process, including a review of the processes and procedures Commerce has established; how they are being followed; and if exclusion decisions are made on a transparent, individual basis, free from political interference. She also requested evidence that the exclusions granted meet Commerce's stated goal of \"protecting national security while also minimizing undue impact on downstream American industries,\" and that the exclusions granted to date strengthen the national security of the United States. Pending legislation to revise Section 232 also addresses the process for excluding products (e.g., S. 287 ). ", "On September 6, 2018, Commerce announced a new rule to allow companies to rebut objections to petitions. The new rule, published September 11, 2018, includes new rebuttal and counter-rebuttal procedures, more information about the exclusion submission requirements and process, the criteria Commerce uses in deciding whether to grant an exclusion request, and revised estimates of the total number of exclusion requests and objections that Commerce expects to receive. On October 29, 2018, the Commerce Inspector General's office (IG) initiated an audit of the agency's processes and procedures for reviewing and adjudicating product exclusion requests. The audit is ongoing.", "To ensure that Commerce follows through with improving the exclusion process, in the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), signed on February 15, 2019, Congress provided funding for \"contractor support to implement the produ ct exclusion process for articles covered by actions taken under section 232.\" To ensure improvements to the exclusion process, Congress indicated that the additional money is to be \"devoted to an effective Section 232 exclusion process\" and required that Commerce submit quarterly reports to Congress. Congress mandated that the reports identify ", "the number of exclusion requests received; the number of exclusion requests approved and denied; the status of efforts to assist small- and medium-sized businesses in navigating the exclusion process; Commerce-wide staffing levels for the exclusion process, including information on any staff detailed to complete this task; and Commerce-wide funding by source appropriation and object class for costs undertaken to process the exclusions."], "subsections": []}]}, {"section_title": "Tariffs Collected to Date", "paragraphs": ["As of March 28, 2019, U.S. Customs and Border Protection assessed $4.7 billion and $1.5 billion from the Section 232 tariffs on steel and aluminum, respectively. The tariffs collected are put in the general fund of the U.S. Treasury and are not allocated to a specific fund. Based on 2017 U.S. import values, annual tariff revenue from the Section 232 tariffs could be as high as $5.8 billion and $1.7 billion for steel and aluminum, respectively, but such estimates do not account for dynamic effects that may impact import flows.", "Generally, higher import prices resulting from the tariffs should cause both import demand and tariff revenue to decrease over time, provided that U.S. production increases and sufficient domestic alternatives become available. Tariff revenue is also likely to decline as the Commerce Department grants additional product exclusions. ", "According to the President's proclamations implementing the Section 232 tariffs, one of the objectives of the tariffs is to \"reduce imports to a level that the Secretary assessed would enable domestic steel (and aluminum) producers to use approximately 80 percent of existing domestic production capacity and thereby achieve long-term economic viability through increased production.\""], "subsections": []}]}, {"section_title": "U.S. Steel and Aluminum Industries and International Trade", "paragraphs": ["In 2018, U.S. imports of steel and aluminum products covered by the Section 232 tariffs totaled $29.5 billion and $17.6 billion, respectively (see Appendix D ). Over the past decade, steel imports have fluctuated significantly, by value and quantity, while imports of aluminum have generally increased. U.S. imports of both metals increased slightly by value from 2017 to 2018 (Section 232 tariffs became effective at different times for different countries), but imports of both decreased by more than 10% in quantity terms (-3.8 million metric tons for steel and -0.9 million metric tons for aluminum). U.S. imports from individual countries fluctuated to an even greater degree over the past year ( Figure 3 ). The largest declines in U.S. steel imports, by value, were from South Korea (-$430 million, -15%), Turkey (-$413 million, -35%), and India (-$372 million, -49%), with significant increases from the EU (+$567 million, +22%), Mexico (+$508 million, +20%), and Canada (+$404 million, +19%). The largest declines in aluminum imports were from China (-$729 million, -40%), Russia (-$676 million, -42%), and Canada (-$294 million, -4%), with major increases from the EU (+$395 million, 9%), India (+$221 million, 58%), and Oman ($186 million, +200%). The countries with permanent exclusions from the tariffs (all except Australia are instead subject to quotas) accounted for 18.4% of U.S. steel imports in 2018 and 4.4% of U.S. aluminum imports.", "In 2018, U.S. steelmakers employed 140,100 workers ( Figure 4 ), accounting for 1.1% of the nation's 12.7 million factory jobs. Employment in the steel industry has declined for many years as new technology, particularly the increased use of electric arc furnaces to make steel, has reduced the demand for workers. According to the Bureau of Labor Statistics, labor productivity in steelmaking nearly tripled since 1987 and rose 20% over the past decade. Hence, even a significant increase in domestic steel production is likely to result in a relatively small number of additional jobs. In 2018, for the first time since 2014, steel manufacturers added 2,700 jobs, a rise of 2% from a year earlier.", "Aluminum manufacturers employed 58,100 workers in 2018, a figure that has changed little since the 2007-2009 recession. Domestic smelting of aluminum from bauxite ore, which requires large amounts of electricity, has been in long-term decline, and secondary aluminum produced from recycled scrap melted in a smelter now accounts for the majority of domestic aluminum production. Imports of secondary unwrought aluminum are not covered by the Section 232 aluminum trade action. ", "Steelmaking and aluminum smelting are both extremely capital intensive. As a result, even small changes in output can have major effects on producers' profitability. Domestic steel producers have operated at 80% or less of production capacity in recent years, with a shift in recent months to a capacity utilization rate at U.S. steel mills of more than 80%. Primary aluminum producers in the United States have operated at about 78% of production capacity in December 2018, up from around 43% in December 2017. A stated aim of the metals tariffs is to enable U.S. producers in both sectors to use an average of 80% of their production capacity, which the Section 232 reports deem necessary to sustain adequate profitability and continued capital investment. "], "subsections": [{"section_title": "Global Production Trends", "paragraphs": ["The OECD Global Forum on Steel Excess Capacity estimates global steel overcapacity was at 595 million metric tons in 2017. While China is the world's largest steel producer, accounting for roughly 45% of global capacity, relatively little Chinese steel enters the U.S. market directly, due to extensive U.S. dumping and subsidy determinations, but the large amount of Chinese production acts to depress prices globally. China has indicated that it plans to reduce its crude steelmaking capacity by 100-150 million metric tons over the five-year period from 2016 to 2020. According to the Chinese government, the country's crude steel capacity has fallen by more than 120 million metric tons since it announced its steel reduction goal in 2016.", "No OECD or other multinational forum has been established to monitor global aluminum overcapacity, though aluminum industry groups have called for such a forum. Although China accounted for more than half of the world's primary aluminum production in 2017, it does not export aluminum in commodity form to the United States. China ships semi-finished aluminum such as bars, rods, and wire to the United States. These are subject to the Section 232 tariffs. ", "Metals imports should be put in the context of U.S. production. In 2018, the United States produced more than twice the amount of steel it imported. According to ITA, import penetration\u2014the share of U.S. demand met by steel imports\u2014reached 33% in 2016, compared to 23% in 2006. Some segments of the domestic steel industry, such as slab converters, import a sizable share of their semi-finished feedstock from foreign suppliers, totaling nearly 7.5 million tons in 2018. In the primary aluminum market, U.S. net import reliance rose to 50% in 2018 from 33% in 2014, according to the U.S. Geological Survey. Most U.S. foreign trade in steel and aluminum is with Canada (see Appendix C ). "], "subsections": []}, {"section_title": "International Efforts to Address Overcapacity", "paragraphs": ["OECD analysis has found that ongoing global steel overcapacity and excess production are largely caused by government intervention, subsidization, and other market-distorting practices, although these are not the only factors. Other reasons for excess capacity include cyclical market downturns. The situation is similar in the aluminum industry, where government financial support for large aluminum stockpiles has delayed the response to lower demand. ", "Past Administrations worked to address the issue of steel overcapacity. President George W. Bush, for example, initiated international discussions on global capacity reduction and improved trade discipline in the steel industry as part of his general steel announcement of 2001. Other governments agreed to join the Bush Administration in discussing overcapacity and trade issues at the OECD in a process that started in mid-2001. The industrial, steel-producing members of the OECD were joined by major non-OECD steel producers, such as India, Russia, and, during later stages of the talks, China. Negotiations were suspended indefinitely in 2004, and by 2005, the OECD had abandoned this effort to negotiate an agreement among all major steel-producing countries to ban domestic subsidies for steel mills. ", "The Obama Administration also participated in international efforts to curb steel imports, including the launch of the G-20 Global Forum on Steel Excess Capacity in 2016, another venue that sought to address the challenges of excess capacity in steel worldwide. In December 2016, the G-20 convened its first meeting of more than 30 economies\u2014all G-20 members plus interested OECD members\u2014as a global platform to discuss steel issues among the world's major producers. The same year, as part of the U.S.-China Strategic and Economic Dialogue (SE&D) established in 2009, the Obama Administration agreed to address excess steel production and also to communicate and exchange information on surplus production in the aluminum sector. ", "In September 2018, the OECD Forum agreed on a process to identify and remove subsidies and take other measures to reduce the global steel overcapacity. The OECD issued a consensus report outlining six principles and specific policy recommendations to address excess steel capacity. The USTR, while supportive of the recommendations, questioned the Forum's ability to pursue effective implementation and did not rule out unilateral action.", "The aluminum industry argues it is also suffering because of China's excess production of primary aluminum. According to the aluminum associations of Japan, Europe, Canada, and the United States, global overcapacity amounted to 11 million metric tons in 2017. Akin to the global steel industry, aluminum producers contend that excess production has been largely caused by government intervention, subsidization, and other market-distorting practices, among other factors. As noted, the U.S. Aluminum Association and some of its international counterparts seek to establish a global forum to address aluminum excess capacity.", "The Trump Administration's Section 232 actions have led multiple U.S. trading partners, such as the EU, the UK, and Canada, to initiate their own safeguard investigations and quota restrictions to prevent dumping of steel and aluminum exports and protect domestic industries. Unlike the OECD efforts, the individual country safeguard actions are uncoordinated.", "In addition to the Section 232 action, the Trump Administration is pursuing joint action on industrial overcapacity in other forums. The USTR, Ambassador Lighthizer, met with his EU and Japanese counterparts in May 2018, and the three countries agreed to\u00a0 concrete steps \u00a0to address \"nonmarket-oriented policies and practices that lead to severe overcapacity, create unfair competitive conditions for our workers and businesses, hinder the development and use of innovative technologies, and undermine the proper functioning of international trade.\" The ministers agreed to work toward negotiation of new international rules on subsidies and state-owned enterprises and improved compliance with WTO transparency commitments. The parties also agreed to cooperate on their concerns with third parties' technology transfer policies and practices and issued a joint statement containing a list of factors that identify if market conditions for competition exist. The parties have met multiple times and continue to work together, aiming to identify signals for nonmarket policies, enhance information sharing, and work with third parties to ensure market economy conditions exist and discuss potential new rules and means of enforcement. In addition, in November 2018, the United States, the EU, Japan, Argentina, and Costa Rica put forward a joint proposal in the WTO to increase transparency, proposing incentives for compliance or penalties for noncompliance with WTO notification reporting requirements regarding subsidies. U.S. unilateral tariff actions, however, may limit other countries' willingness to participate in multilateral forums. "], "subsections": []}]}, {"section_title": "Policy and Economic Issues", "paragraphs": ["Section 232 tariffs on steel and aluminum imports into the United States raise a number of issues for Congress. The economic repercussions of U.S. and foreign actions may be felt not only by domestic steel and aluminum producers, but by downstream manufacturers or other industries targeted for retaliation, and consumers. The response by other countries can have implications for the U.S. economy and multilateral world trading system. Also, other countries may be hesitant in the future to cooperate with the United States to address broader global issues, including steel and aluminum overcapacity, if their exports are subject to U.S. tariffs.", "U.S. trading partners' responses to Section 232 actions have varied based on the country's relationship with the United States. Some countries are pursuing direct negotiations, while keeping other countermeasures in reserve, and raising actions at the WTO (see below). Others have proposed or pursued retaliation with their own tariffs. Some companies have pursued litigation, and may also seek alternative markets for their own products to avoid U.S. tariffs."], "subsections": [{"section_title": "Retaliation", "paragraphs": ["Several major U.S. trading partners have proposed or are imposing retaliatory tariffs in in response to the U.S. actions (see Figure 5 below). In total, retaliatory tariffs are in effect on products accounting for approximately $23.2 billion of U.S. exports in 2018. The process of retaliation is complex given multiple layers of relevant international rules and the potential for unilateral action, which may or may not adhere to those existing rules. Both through agreements at the WTO and in bilateral and regional free trade agreements (FTAs), the United States and its trading partners have agreed to maintain certain tariff levels. Those same agreements include rules on potential responses, including formal dispute settlement procedures and in some cases commensurate tariffs, when one party increases its tariffs above agreed-upon limits. In addition to the national security considerations the Trump Administration has cited as justification for its Section 232 actions, increased tariffs are permitted under these agreements, under specific circumstances, including for example, antidumping tariffs, countervailing duties, and safeguard tariffs.", "The retaliatory actions of U.S. trading partners to date have been notified to the WTO pursuant to the Agreement on Safeguards. These retaliatory notifications are in addition to ongoing WTO dispute settlement proceedings (see \" WTO Cases \"). FTA partner countries may also claim that the increase in U.S. tariff rates violates U.S. FTA commitments and seek recourse through those agreements. For example, Canada and Mexico, U.S. partners in NAFTA, claim that the U.S. actions violate commitments in both NAFTA and the WTO agreements. Canada initially announced its intent to launch a dispute under the NAFTA's dispute settlement provisions in addition to actions at the WTO, although it appears Canada has taken no such action to date. ", "U.S. trading partners' retaliation to the Trump Administration's Section 232 tariff actions has magnified the effects of the Section 232 tariffs. From an economic perspective, retaliation increases the scope of industries affected by the tariffs. U.S. agriculture exports, for example, are among the largest categories of U.S. exports targeted for retaliation, which may have contributed to reduced sales of certain U.S. farm products. Given the scale of U.S. motor vehicle and parts imports, if the Trump Administration moves forward with Section 232 tariffs on that sector and U.S. trading partners respond with retaliation of a similar magnitude, it could have significant negative effects on U.S. exporters. For example, the United States imported more than $50 billion of motor vehicles and parts from the EU in 2018, and the EU has announced it has prepared potential retaliatory tariffs on a commensurate value of U.S. exports.", "Retaliatory actions may also heighten concerns over the potential strain the Section 232 tariffs place on the international trading system. Many U.S. trading partners view the Section 232 actions as protectionist and in violation of U.S. commitments at the WTO and in U.S. FTAs, while the Trump Administration views the actions within its rights under those same commitments. Furthermore, the Trump Administration argues that retaliation to its Section 232 tariffs, which U.S. trading partners have imposed under WTO safeguard commitments, violates WTO rules because it has imposed Section 232 tariffs pursuant to WTO national security exceptions. If the dispute settlement process in those agreements cannot satisfactorily resolve this conflict, it could lead to further unilateral actions and increasing retaliation."], "subsections": []}, {"section_title": "Domestic Court Challenges", "paragraphs": ["The President's actions under Section 232 have resulted in legal challenges in the U.S. domestic court system. Specifically, the Section 232 actions on steel and aluminum have been challenged in cases before the U.S. Court of International Trade (CIT). In one case, Severstal Export Gmbh, a U.S. subsidiary of a Russian steel producer, sought a preliminary injunction from the United States Court of International Trade to prevent the United States from collecting the import tariffs on certain steel products. The company and its Swiss affiliate argued that the President acted outside of the authority that Congress had delegated to him because the tariffs were not truly imposed for national security purposes. The court denied the motion, determining that the plaintiffs were unlikely to prevail on the merits of their challenge. According to the case docket, the parties agreed to dismiss the case in May 2018.", "In another case, which was heard by a three-judge panel of the court, the American Institute for International Steel (AIIS), a trade association, challenged the constitutionality of Congress's delegation of authority to the President under Section 232. The plaintiffs in the case argued that \"Congress created an unconstitutional regime in section 232, in which there are essentially no limits or guidelines on the trigger or the remedies available to the President, and no alternative protections to assure that the President stays within the law, instead of making the law himself.\" ", "On March 25, 2019, the court issued an opinion rejecting the plaintiffs' arguments that Congress delegated too much of its legislative power to the President in Section 232, in violation of the separation of powers established in the Constitution. In granting the United States' motion for judgment on the pleadings, the court held that it was bound by a 1976 Supreme Court precedent determining that Section 232 did not amount to an unconstitutional delegation because it established an \"intelligible principle\" to guide presidential action.", "One member of the three-judge panel, Judge Katzmann, wrote separately to express his significant concerns about the ruling without openly dissenting. Katzmann wrote that he was bound to follow Supreme Court precedent and uphold the delegation but questioned whether the nondelegation doctrine retained any significant meaning if a delegation as broad as that in Section 232 was permissible. The case is currently under appeal.", "Most recently, U.S. importers of Turkish steel have initiated a case arguing that the President's increase of the Section 232 steel tariffs from 25% to 50% on U.S. imports from Turkey did not have a sufficient national security rationale, did not follow statutory procedural mandates, and violates the plaintiffs' Fifth Amendment Due Process rights because the action \"creates an arbitrary distinction between importers of steel products from Turkey and importers of steel products from all other sources.\" The case remains pending before the CIT."], "subsections": []}, {"section_title": "WTO Cases", "paragraphs": ["The President's imposition of tariffs on certain imports of steel and aluminum products, as well as Commerce's exemption of certain WTO members' products from such tariffs, may also have implications for the United States under WTO agreements. As an example, on April 9, 2018, China took the first step in challenging the executive branch's actions as violating U.S. obligations under the WTO agreements (particularly the Agreement on Safeguards) by requesting consultations with the United States. Under WTO dispute settlement rules, members must first attempt to settle their disputes through consultations. If these fail, the member initiating a dispute may request the establishment of a dispute settlement panel composed of trade experts to determine whether a country has violated WTO rules. In October, China requested the formation of a panel. Other WTO members have requested consultations with the United States, or joined existing requests, and panels have been composed to hear the cases (see Figure 6 ). ", "In its request, China alleged that the U.S. tariff measures and exemptions are contrary to U.S. obligations under several provisions of the GATT, the foundational WTO agreement that sets forth binding international rules on international trade in goods. In particular, China alleged that the measure violates GATT Article II, which generally prohibits members from imposing duties on imported goods in excess of upper limits to which they agreed in their Schedules of Concessions and Commitments. It further alleged that Commerce's granting of exemptions from the import tariffs to some WTO member countries, but not to China, violates GATT Article I, which obligates the United States to treat China's goods no less favorably than the goods of other WTO members (i.e., most-favored-nation treatment). China also maintained that the Section 232 tariff measures are \"in substance\" a safeguards measure intended to alleviate injury to a domestic industry from increased quantities of imported steel that competes with domestic steel, but that the United States did not make the proper findings and follow the proper procedures for imposing such a measure as required by the GATT and WTO Safeguards Agreement. ", "The United States has invoked the so-called national security exception in GATT Article XXI in defense of the steel and aluminum tariffs. GATT Article XXI states, in relevant part, that the GATT will not ", "be construed . . . (b) to prevent any [member country] from taking any action which it considers necessary for the protection of its essential security interests", "(i) relating to fissionable materials or the materials from which they are derived; (ii) relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment; [or]", "(iii) taken in time of war or other emergency in international relations. . .", "While some analysts argue that a WTO panel may evaluate whether a WTO member's use of the national security exception falls within one of the three provisions listed above, historically, the United States has taken the position that this exception is self-judging\u2014or, in other words, once a WTO member has invoked the exception to justify a measure potentially inconsistent with its WTO obligations, a WTO panel may not proceed to the merits of the dispute and cannot evaluate whether the WTO member's use of the exception is proper. Though this exception has been invoked several times throughout the history of the WTO and its predecessor agreement, the GATT 1947, it has yet to be interpreted by a WTO dispute settlement panel. Accordingly, there is little guidance as to (1) whether a WTO panel would decide, as a threshold matter, that it had the authority to evaluate whether the United States' invocation of the exception was proper; and (2) how a panel might apply the national security exception, if invoked, in any dispute before the WTO involving the new steel and aluminum tariffs. In the past, however, WTO members have expressed concern that overuse of the exception will undermine the world trading system because countries might enact a multitude of protectionist measures under the guise of national security.", "If one of the WTO panels renders an adverse decision against the United States, the United States would be expected to remove the tariffs, generally within a reasonable period of time, or face the possibility of paying compensation to the complaining member or being subject to countermeasures allowed under the rules. Such countermeasures might include the complaining member imposing higher duties on imports of selected products from the United States. However, China has already begun imposing its own duties on selected U.S. exports without awaiting the outcome of a dispute settlement proceeding, perhaps because it often takes years before the WTO's Dispute Settlement Body authorizes a prevailing WTO member to retaliate. ", "In turn, the United States has argued that unilateral imposition of tariffs in response to the U.S. Section 232 measures cannot be justified under WTO rules. On July 16, 2018, the United States filed its own WTO complaints over the retaliatory tariffs imposed by five countries (Canada, China, EU, Mexico, and Turkey) in response to U.S. actions, and in late August filed a similar case against Russia. Dispute settlement panels have been composed to hear these cases."], "subsections": []}, {"section_title": "Additional Section 232 Investigations", "paragraphs": [], "subsections": [{"section_title": "Automobiles and Parts", "paragraphs": ["As mentioned, subsequent to the steel and aluminum investigations, the Trump Administration initiated a third Section 232 investigation into the imports of automobiles, including SUVs, vans and light trucks, and automotive parts in May 2018. Commerce held a public hearing to inform the investigation and requested comments from stakeholders on the impact of these imports on national security, identifying a broad set of factors related to national defense and the national economy for consideration. As many foreign auto manufacturers have established facilities in the United States, Commerce specifically requested information on how the impact may differ when \"U.S. production by majority U.S.-owned firms is considered separately from U.S. production by majority foreign-owned firms.\" ", "The value of U.S. imports potentially covered under the new investigation is significantly greater than that of steel and aluminum imports. With complex global supply chains, industry dynamics such as the existence of foreign-owned auto manufacturing facilities in the United States, and the potential for further retaliation by trading partners if tariffs are imposed as a result of the investigation, the economic consequences could be substantial. According to Ford Motor Co.'s executive vice president and president of global operations, Joe Hinrichs, \"the auto industry is a global business. The benefits of scale and global reach are important ... The big companies that we compete against\u2014Toyota, Volkswagen, General Motors, Nissan, Hyundai, Kia\u2014are all global in nature because we realize the benefits of sharing the engineering, the platforms and scale, and our supply base.\"", "Some Members and auto industry representatives have spoken out in opposition to the new Section 232 investigation. The Driving American Jobs Coalition was created to oppose the potential tariffs and is comprised of a coalition of industry groups representing auto manufacturers, parts suppliers, auto dealers, parts distributors, retailers, and vehicle service providers. Others view the investigation as a tactical move by the Administration to pressure trade negotiating partners as the President continues to threaten auto tariffs. As mentioned, the EU has reportedly drafted a list of targets for retaliatory tariffs if the Administration moves forward with auto tariffs under Section 232. Three groups have voiced support for at least limited measures to address auto imports: the United Automobile Workers, the United Steelworkers, and the Forging Industry Association.", "Commerce submitted the final Section 232 report to the President on February 17, 2019, but the report has not been publicly released. Some Members have asked for the report to be made public, and the Cause of Action Institute sued Commerce to release the report after an unsuccessful Freedom of Information Act request. As noted earlier, the President has 90 days to review the report and make his determination as to whether he agrees or not with the Commerce findings and/or recommendation. In advance of the report's release, Senate Finance Chairman Grassley publicly reiterated his opposition to potential tariffs on auto or auto part imports, stating \"I hope the president will heed my call to forgo the auto tariffs and focus on opening new markets.... In short, raising tariffs on cars and parts would be a huge tax on consumers who buy or service their cars, whether they are imported or domestically produced.\" Proposed legislation in the House and Senate would require a report by the U.S. International Trade Commission (USITC) on the economic importance of domestic automotive manufacturing before the President could act ( S. 121 , H.R. 1710 )."], "subsections": []}, {"section_title": "Uranium", "paragraphs": ["Unlike the self-initiated investigations into steel, aluminum, and auto imports, the Trump Administration opened two additional Section 232 investigations in response to industry petitions. In July 2018, Commerce launched a Section 232 investigation into uranium ore and product imports in response to a petition from two U.S. mining companies and after consulting with industry and government officials. The petitioners, the uranium-mining companies Energy Fuels and Ur-Energy, requested limiting imports to guarantee about 25% of the U.S. nuclear market for U.S. uranium producers, and \"Buy American\" provisions for government purchases of uranium to bolster the industry.", "Uranium mining is a relatively small-scale industry in the United States, accounting for 1.6% of global production of uranium from mines. At the end of 2017, Energy Fuels was the only remaining operator of a uranium mine in the United States. The Energy Information Administration (EIA) reports U.S. production at U.S. mines shrank to 1.2 million pounds, down 55% from 2016, and U.S. production in 2017 was at its lowest annual level since 2004. EIA also reports annual drops since 2013 in shipments, employment, and expenditures in the U.S. uranium production industry. Kazakhstan accounted for 39% of the world's production of uranium; Canada and Australia supplied roughly a third of the world's production in 2017. China made up 3.2% of worldwide uranium production in 2017. ", "The House Natural Resources Subcommittee questioned the need for the investigation and requested documentation from the petitioners regarding their communication with the Administration. The U.S. nuclear power industry opposes the investigation and claims that a uranium quota would lead to job losses in their industry."], "subsections": []}, {"section_title": "Titanium Sponge", "paragraphs": ["In March 2019, Commerce launched another Section 232 investigation in response to a petition from a U.S. titanium firm. In explaining the investigation, the Commerce Secretary stated, \"Titanium sponge has uses in a wide range of defense applications, from helicopter blades and tank armor to fighter jet airframes and engines.\" ", "Titanium Metals Corporation (known as Timet) is currently the only producer of titanium sponge in the United States; USGS estimates that titanium sponge manufacturing employed 150 workers in 2018. In 2015, there were three such producers. For 2018, and the United States was 75% import reliant for titanium sponge. In 2018, Japan was the biggest supplier of titanium sponge, accounting for more than 90% of sponge imports; Kazakhstan was the second-leading supplier to the United States, making up 6.5% of imported titanium sponge. Although China was the world's largest producer of titanium sponge, producing 70,000 tons in 2018, it is not an important source of sponge imports for the United States. Any Section 232 tariff would be added to the existing 15% ad valorem tariff on titanium sponge imports.", "Unlike steel and aluminum imports, which have multiple countervailing and antidumping duties in place, there are no such duties in place for uranium or titanium sponge imports; however, there is a suspended investigation into Russian uranium imports."], "subsections": []}]}, {"section_title": "Potential Economic Impact", "paragraphs": ["The Section 232 tariffs affect various stakeholders in the U.S. economy, prompting reactions from several Members of Congress, some in support and others voicing concern. Congress has also held a number of hearings to examine the issue. For example, the tariffs and their effects on U.S. stakeholders were a focus of Members' questions during recent House Ways and Means and Senate Finance hearings on U.S. trade policy with USTR Robert Lighthizer. In general, the tariffs are expected to benefit domestic steel and aluminum producers by restricting imports, thereby putting upward pressure on U.S. steel and aluminum prices and expanding production in those sectors, while potentially negatively affecting consumers and downstream domestic industries (e.g., manufacturing and construction) due to higher costs of input materials. In addition, retaliatory tariffs by other countries raise the price of U.S. exports, potentially leading to fewer sales of U.S. products abroad, magnifying the possible negative impact of the Section 232 tariffs.", "Economic studies of the tariffs estimate varying potential aggregate outcomes, but generally suggest an overall modest negative effect on the U.S. economy of the tariffs imposed to date, which could increase considerably if the Administration proceeds with Section 232 tariffs on U.S. motor vehicles and parts. U.S. motor vehicle and parts imports totaled $373.7 billion in 2018, nearly eight times the value of U.S. steel and aluminum imports ($47.1 billion) subject to Section 232 tariffs."], "subsections": [{"section_title": "Economic Dynamics of the Tariff Increase", "paragraphs": ["Changes in tariffs affect economic activity directly by influencing the price of imported goods and indirectly through changes in exchange rates and real incomes. The extent of the price change and its impact on trade flows, employment, and production in the United States and abroad depend on resource constraints and how various economic actors (foreign producers of the goods subject to the tariffs, producers of domestic substitutes, producers in downstream industries, and consumers) respond as the effects of the increased tariffs reverberate throughout the economy. The following outcomes are generally expected at the level of individual firms and consumers:", "The price of the imported goods subject to the tariff is likely to increase . The magnitude of the price increase will depend on a number of factors, including the extent to which foreign producers lower their own prices and absorb a portion of the tariff increase. Known as the tariff \"pass-through\" rate, recent economic studies find that the tariffs have been nearly completely passed through to downstream industries and consumers with little effect on foreign export prices. Anecdotal reports suggest U.S. firms are paying increased prices for steel and aluminum purchased from abroad. For example, CP Industries, a maker of steel cylinders based in McKeesport, PA, is paying tariffs on imports of certain Chinese steel pipes it asserts cannot be produced in sufficient quantity in the United States to meet its demands. The company claims this raises the costs of its production by roughly 10%. The higher input costs potentially give foreign competitors an advantage in the U.S. market and abroad. Demand for the imported goods facing the tariffs is likely to decrease, while demand for those goods produced domestically is likely to increase. Consumers and downstream firms' sensitivity to the price increase (their price elasticity of demand) will depend in large part on the degree to which the steel and aluminum products produced domestically are sufficient substitutes for the products facing the tariffs. In 2018, the year the tariffs went into effect, U.S. imports of steel and aluminum subject to higher tariffs decreased by more than 10% in quantity terms, although both increased slightly in value terms ( Figure 3 ). Annual domestic U.S. steel production meanwhile increased by 6% from 2017 to 2018, while primary U.S. aluminum production increased by 18% (January-November, latest data available). The price and output of goods subject to the tariff produced domestically are likely to increase. As consumers of the products facing the tariffs shift their demand to lower- or zero-tariff substitutes, domestic producers are likely to respond with a combination of increased output and prices. Resource constraints that may limit or slow an expansion of output could cause prices to increase more rapidly. The low U.S. unemployment rate suggests such constraints may include frictions in shifting labor from other domestic industries into steel and aluminum production. In addition to reacting to higher-cost production and supply constraints, domestic steel and aluminum producers may also increase prices simply as a strategic response to the higher prices charged by their foreign competitors subject to the tariffs. In an anticipation of higher domestic demand and the ability to charge higher prices on U.S. steel and aluminum, some producers have announced investment and production increases. For example, U.S. Steel Corporation announced plans to increase capacity through a number of new or expanded facilities, including most recently a new furnace near Birmingham, AL. Similarly, three U.S. aluminum smelters are being restarted, including a Century Aluminum facility in Kentucky. Broad indices of U.S. steel and aluminum producer prices were up 14% and 5% between 2017 and 2018, respectively. Input costs for downstream domestic producers are likely to increase. As prices likely rise in the United States for the goods subject to the tariffs, domestic industries that use steel and aluminum in their products (\"downstream\" industries, such as auto manufacturers and oil producers) face higher input costs. Higher input costs for downstream domestic producers are likely to lead to some combination of lower profits for producers and higher prices for consumers, which in turn could dampen demand for downstream products and result in a reduction of output in these sectors, and possibly employment declines. For example, Ford CEO James Hacket suggested the metal tariffs are expected to cost the auto manufacturer roughly $1 billion. U.S. exports from the industries subject to retaliatory tariffs are likely to decline. Six U.S. trading partners (Canada, Mexico, EU, China, Turkey, and Russia) have imposed retaliatory tariffs in response to U.S. Section 232 tariffs affecting approximately $23 billion of U.S. exports in 2018, including many U.S. agricultural goods such as pork and dairy products. The retaliatory tariffs may have led to decreased demand for U.S. exports and given U.S. exporters an incentive to manufacture abroad to avoid the tariffs. For example, according to U.S. Department of Agriculture, Chinese tariffs on soybeans caused overall U.S. agricultural and food exports to China to decline in 2018, and China increased its purchases of soybeans from Brazil and elsewhere. Canada, Mexico, and the EU account for 80% of U.S. exports subject to retaliatory tariffs in response to Section 232 actions. Since the retaliatory tariffs took effect, U.S. exports to these trading partners have decreased on average by 25%, 10%, and 38%, respectively. Facing retaliatory tariffs on U.S. motorcycle exports to the EU, Harley Davidson has announced its intent to shift some of its production out of the United States in order to remain competitive in the EU market.", "Aggregating these microeconomic effects, tariffs also have the potential to affect macroeconomic variables, although these impacts may be limited in the case of the Section 232 tariffs, given their focus on two specific commodities with potential exemptions, relative to the size of the U.S. economy. With regard to the value of the U.S. dollar, as demand for foreign goods potentially falls in response to the tariffs, U.S. demand for foreign currency may also fall, putting upward pressure on the relative exchange value of the dollar. This in turn would reduce demand for U.S. exports and increase demand for foreign imports, partly offsetting the effects of the tariffs. Tariffs may also affect national consumption patterns, depending on how the shift to higher-cost domestic substitutes affects consumers' discretionary income and therefore aggregate demand. Finally, given their ad hoc nature, these tariffs, in particular, are also likely to increase uncertainty in the U.S. business environment, potentially placing a drag on investment."], "subsections": []}, {"section_title": "Assessing the Overall Economic Impact", "paragraphs": ["From a global standpoint, tariff increases on steel and aluminum are likely to result in an unambiguous welfare loss due to what most economists consider is a misallocation of resources caused by shifting production from lower-cost to higher-cost producers. On the other hand, some see the Administration's trade actions as addressing long-standing issues of fairness that are intended to provide U.S. producers with a more level playing field. Looking solely at the domestic economy, the net welfare effect is unclear, but also likely negative. Generally, economic models would suggest the negative impact of higher prices on consumers and industries using the imported goods is likely to outweigh the benefit of higher profits and expanded production in the import-competing industry and the additional government revenue generated by the tariff. It is theoretically plausible to generate an overall positive welfare effect for the domestic economy if the foreign producers absorb a large enough portion of the tariff increase. Given the current excess capacity and intense price competition in the global steel and aluminum industries, however, this level of tariff absorption by foreign firms seems unlikely. Moreover, retaliation by foreign governments would erode this welfare gain. ", "The direct economic effects of the Section 232 tariffs on steel and aluminum may be limited due to the relatively small share of economic activity directly affected. In 2018, U.S. steel and aluminum imports were $29.5 billion and $17.6 billion, respectively, roughly 2% of all U.S. imports. Various stakeholder groups have prepared quantitative estimates of the costs and benefits across the economy. Specific estimates from these studies should be interpreted with caution given their sensitivity to modeling assumptions and techniques, but generally they suggest a small negative overall effect on U.S. gross domestic product (GDP) from the tariffs with employment shifts into the domestic steel and aluminum industries and away from other sectors in the economy."], "subsections": []}]}]}, {"section_title": "Issues for Congress", "paragraphs": ["As Congress debates the Administration's Section 232 actions it may consider the following issues, many of which include potential legislative responses."], "subsections": [{"section_title": "Appropriate Delegation of Constitutional Authority", "paragraphs": ["In enacting Section 232 of the Trade Expansion Act, Congress delegated aspects of its authority to regulate international commerce to the executive branch. Use of the statute to restrict imports does not require any formal approval by Congress or an affirmative finding by an independent agency, such as the USITC, granting the President broad discretion in applying this authority. Should Congress disapprove of the President's use of the statute, its current recourse is limited to passing new legislation or using informal tools to pressure the Administration (e.g., putting holds on presidential nominee confirmations in the Senate). Some Members and observers have suggested that Congress should require additional steps in the Section 232 process. In the 116 th Congress, a variety of proposals have been introduced to amend Section 232, in various ways, such as by", "requiring an economic impact study by the USITC, congressional consultation, or approval of any new tariffs, allowing for a resolution of disapproval of trade actions, or revisiting the delegation of its constitutional authority more broadly, such as by requiring congressional approval of executive branch trade actions more generally.", "Some Members, including Senate Finance Chair Grassley, seek to draft a consensus bill to restore congressional authority that would gain sufficient bipartisan support to withstand a possible presidential veto. Issues under debate include whether any changes would be retroactive, potentially affecting the steel and aluminum tariffs, or whether they would only apply to future actions, and whether Congress's role should be consultative or decisive (e.g., requiring congressional approval). For a list of proposals in the 116th Congress, see Appendix C ."], "subsections": []}, {"section_title": "Legislative Responses to Retaliatory Tariffs", "paragraphs": ["Several major U.S. trading partners have proposed or are currently imposing retaliatory tariffs in response to the U.S. actions. In the 115 th Congress, some Members of Congress proposed legislation to respond to the potential economic impact of these foreign retaliatory tariffs. Some proposals expand programs like trade adjustment assistance to include assistance for workers, firms, and farmers harmed by foreign retaliation. Other measures propose increased funding and programming for certain agricultural export programs to help farmers find new markets for their exports. For a list of proposals from the 115 th Congress, see Appendix C ."], "subsections": []}, {"section_title": "Establishing Threshold", "paragraphs": ["It is relatively easy for a stakeholder to prompt the Section 232 investigation process. The statute states that \"Upon request of the head of any department or agency, upon application of an interested party, or upon his own motion, the Secretary of Commerce ... shall immediately initiate an appropriate investigation.\" To limit the volume of Section 232 petitions and ensure that any requests are sufficiently justified, Congress may consider establishing criteria or a threshold that a request must meet before Commerce and Defense agencies invest resources in conducting a Section 232 investigation. Similarly, Congress may consider limiting the types of imported articles that may be considered under Section 232 (e.g., S. 287 )."], "subsections": []}, {"section_title": "Interpreting National Security", "paragraphs": ["Congress created the Section 232 process to try to ensure that U.S. imports do not cause undue harm to U.S. national security. Some observers have raised concerns that restrictions on U.S. imports under Section 232, however, may harm U.S. allies, which could also have negative implications for U.S. national security. For example, Canada is considered part of the U.S. defense industrial base according to U.S. law and is also a top source of U.S. imports of steel and aluminum. ", "National security is not clearly defined in the statute, allowing for ambiguity and alternative interpretations by an Administration. International trade commitments both at the multilateral and FTA level generally include broad exceptions on the basis of national security. The Trump Administration argues its Section 232 actions are permissible under these exceptions, while many U.S. trading partners claim the actions are unrelated to national security. If the United States invokes the national security exemption in what may be perceived to be an arbitrary way, it could similarly encourage other countries to use national security as a rationale to enact protectionist measures and limit the scope of potential U.S. responses to such actions.", "Congress may consider amending Section 232 to address these concerns. For example, some Members have proposed to narrowly defin e \"national security\" under Section 232 and the factors to be considered in a Section 232 investigation . One bill limits it to protection against foreign aggression ( S. 287 )."], "subsections": []}, {"section_title": "Establishing New International Rules", "paragraphs": ["Addressing the specific market-distorting practices that are the root causes of steel and aluminum overcapacity (e.g., government intervention, subsidization) may require updating or amending existing trade agreements. Broad WTO negotiations for new multilateral rules, which may have offered opportunity to address some of these issues, have stalled. Recent U.S. FTA negotiations, including the recently concluded USMCA, include related disciplines (e.g., by establishing rules on state-owned enterprises or anticorruption), and the United States is engaged in negotiations with China on overcapacity and other trade barriers. To address these issues, Congress could consider establishing specific or enhanced new negotiating objectives for trade agreement negotiations, potentially through new or modified Trade Promotion Authority (TPA) legislation. Congress could also consider directing the executive branch to prioritize engagement in such negotiations, by, for example, endorsing the current OECD discussions or the trilateral negotiations announced by USTR with the EU and Japan to address nonmarket practices, including subsidies, state-owned enterprises, and technology transfer requirements, mostly aimed at China."], "subsections": []}, {"section_title": "Impact on the Multilateral Trading System", "paragraphs": ["Some analysts argue that the United States risks undermining the international system it helped create when it invokes unilateral trade actions that may violate core commitments and with regard to broad use of national security exemptions. These observers fear that disagreements at the WTO on these issues may be difficult to resolve through the existing dispute settlement procedures given the concerns over national sovereignty that would likely be raised if a WTO dispute settlement panel issued a ruling relating to national security. Furthermore, actions by the United States that do not make use of the multilateral system's dispute settlement process may open the United States to criticism and could impede U.S. efforts to use the multilateral system for its own enforcement purposes. For example, China called on other parties such as the EU to join it in opposition to the U.S. actions on Section 232, while simultaneously promoting domestic policies often seen as undermining WTO rules. Congress could potentially address these concerns by conducting increased oversight of the Administration's actions by inviting testimony from multiple parties, considering legislation to establish more stringent criteria, or requiring congressional approval of any use of Section 232, among other possible actions. "], "subsections": []}, {"section_title": "Impact on Broader International Relationships", "paragraphs": ["The U.S. unilateral actions under Section 232 have raised the level of tension with U.S. trading partners and could pose risks to broader international economic cooperation. For example, trade tensions between the United States and its traditional allies contributed to the lack of consensus at the conclusion of the G-7 summit in June 2018. The strain on international trading relationships also could have broader policy implications, including for cooperation between the United States and allies on foreign policy issues.", "Appendix A. Amendments to and Past Uses of Section 232 (19 U.S.C. \u00a71862)", "Concern over national security, trade, and domestic industry was first raised by the Trade Agreements Extension Act of 1954 (P.L. 83-464 \u00a72). The 1954 act prohibited the President from decreasing duties on any article if the President determined that such a reduction might threaten domestic production needed for national defense. In 1955, the provision was amended to also allow the President to increase trade restrictions, in cases where national security may be threatened.", "The Trade Agreements Extension Act of 1958 (P.L. 85-686 \u00a78) expanded the 1955 provisions, by outlining specific factors to be considered during an investigation, allowing the private sector to petition for relief, and requiring the President to publish a report on each petition. The factors to be considered during an investigation included (1) the domestic production capacity needed for U.S. national security requirements, (2) the effect of imports on domestic production needed for national security requirements, and (3) \"the impact of foreign competition on the economic welfare of individual domestic industries.\"", "Section 232 of the Trade Expansion Act of 1962 (P.L. 87-794) continued the provisions of the 1958 Act. Section 232 has been amended multiple times over the years, including (1) to change the time limits for investigations and actions; (2) to change the advisory responsibility from the Secretary of the Treasury to the Secretary of Commerce; and (3) to limit presidential authority to adjust petroleum imports.", "In 1980, Congress amended Section 232 to create a joint disapproval resolution provision under which Congress could override presidential actions to adjust petroleum or petroleum product imports. The bill was signed into law on April 2, 1980, the same day that President Carter proclaimed a license fee on crude oil and gasoline pursuant to Section 232 in Proclamation 4744.", "On April 15, 1980, two weeks after the President's proclamation on the crude oil and gasoline license fee, Representative James Shannon introduced House Joint Resolution 531 to disapprove and effectively nullify the presidential action. The House Ways and Means Subcommittee on Trade voted 14 to 4 to disapprove the presidential action; the resolution was favorably reported out of the full committee on a 27 to 7 vote. Dissenting views were voiced by Members who supported the fee program and were concerned about U.S. dependence on foreign oil. While the measure passed the House, it was indefinitely postponed in the Senate. Multiple joint resolutions of disapproval were introduced in Congress in 1980, but none passed both chambers.", "In addition to the disapproval mechanism created in the Crude Oil Windfall Profit Tax Act of 1980, President Carter's action in Proclamation 4744 was also challenged in court and through separate legislation in Congress. On May 13, 1980, a federal district court struck down the President's action on petroleum imports as unlawful, thereby preventing the government from implementing the program. The court's decision, however, was appealable to the higher courts. Before a court could consider an appeal, Congress enacted an amendment to a bill to extend the public debt limit ( P.L. 96-264 , Section 2) on June 6, 1980, which terminated Proclamation 4744's petroleum import program. Section 2 of P.L. 96-264 did not use the disapproval mechanism established in the Crude Oil Windfall Profit Tax Act of 1980; it was a separate piece of legislation that was attached as an amendment to an unrelated bill.", "On June 19, 1980, the President formally rescinded Proclamation 4744 \"in its entirety, effective March 15, 1980.\" ", "Appendix B. Section 232 Investigations", "Appendix C. Proposals Concerning Section 232", "Appendix D. 2018 U.S. Steel and Aluminum Imports"], "subsections": []}]}]}}
{"id": "R45071", "title": "SBA Office of the National Ombudsman: Overview, History, and Current Issues", "released_date": "2019-04-04T00:00:00", "summary": ["The Office of the National Ombudsman was created in 1996 as part of P.L. 104-121, the Contract with America Advancement Act of 1996 (Title II, the Small Business Regulatory Enforcement Fairness Act of 1996 [SBREFA]). Housed within the U.S. Small Business Administration (SBA), the office's primary purpose is to provide small businesses, small government entities (those serving populations of less than 50,000), and small nonprofit organizations that believe they have experienced unfair or excessive regulatory compliance or enforcement actions (such as repetitive audits or investigations, excessive fines, and retaliation by federal agencies) a means to comment about such actions.", "The Office of the National Ombudsman is an impartial liaison that reports small business regulatory fairness matters to the appropriate federal agency for review and works across government to address those concerns and reduce regulatory burdens on small businesses.", "SBREFA also created 10 Small Business Regulatory Fairness Boards, one in each of the SBA's 10 regions, to advise the National Ombudsman on matters related to federal regulatory enforcement activities affecting small businesses.", "Specifically, the National Ombudsman", "works with each federal agency with regulatory authority over small businesses to ensure that small businesses are provided a means to comment on the federal agency's regulatory compliance and enforcement activities; receives comments from small businesses regarding actions by federal agency employees conducting small business regulatory compliance or enforcement activities; refers comments to the affected federal agency's inspector general in appropriate circumstances while maintaining the confidentiality of the person or small business making these comments; issues an annual report to Congress and affected federal agencies evaluating the agency's compliance and enforcement activities, including a rating of their responsiveness to small businesses; provides the affected federal agency with an opportunity to comment on the annual report prior to publication and includes in the report a section in which the affected federal agency may comment on issues that are not addressed by the National Ombudsman in revisions to the draft; and coordinates and reports annually on the Small Business Regulatory Fairness Boards' activities, findings, and recommendations to the SBA Administrator and the heads of affected federal agencies.", "This report examines the Office of the National Ombudsman's origin and history; describes its organizational structure, funding, functions, and current activities; and discusses a recent legislative effort to enhance its authority. During the 115th Congress, S. 1146, the Small Business Regulatory Relief Act of 2017, would have, among other provisions,", "expanded the National Ombudsman's authority to work with federal agencies on the development of best practices for educating, training, and assisting small entities in understanding and complying with federal regulations; and authorized the National Ombudsman to evaluate federal agency regulatory compliance guides, ensure that those guides are available to small business development centers and other SBA management and training resource partners, conduct small business customer service surveys on an ongoing basis to assess the timeliness and quality of federal agency regulatory activities, and develop an outreach program to promote awareness of the National Ombudsman's activities.", "This report also discusses some challenges facing the Office of the National Ombudsman", "although it is generally recognized as an independent, impartial office, it is housed within the much larger SBA and remains subject to its influence; the National Ombudsman has often stayed in the position for a relatively short time. Frequent turnover can lead to continuity problems for the office; it does not have the authority to compel federal agencies to undertake specific actions to resolve disputes. As a result, although its annual rating of federal agency responsiveness to small business concerns does provide it a means to exert some influence on federal agency actions, its role in resolving disputes is somewhat constrained; and its relatively limited budget and staffing level restrict its ability to engage in outreach activities that could increase small business awareness of its existence and services."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["There are about 150 ombudsman offices located throughout the federal government. About a third of them are statutorily authorized. The others were created through executive action. Although there are differences among them in terms of their origin, staffing, funding, and organizational structure, they are all tasked with receiving and helping to resolve disputes in an impartial manner. Some ombudsman offices are limited to helping to resolve disputes that arise within the federal agency in which they are housed. Others are limited to helping to resolve disputes received from the agency's clients. Still others may help to resolve disputes that arise both within the federal agency and from the agency's clients. ", "The Office of the National Ombudsman, housed within the U.S. Small Business Administration (SBA), is fairly unique in that it is authorized to help resolve disputes received from the public across federal agencies. It was created in 1996 as part of P.L. 104-121 , the Contract with America Advancement Act of 1996 (Title II, the Small Business Regulatory Enforcement Fairness Act of 1996 [SBREFA]). It is a relatively small office, with authorization for up to seven employees. It currently has five employees: a Deputy National Ombudsman (Mina Wales), an administrative officer, an external outreach manager, and two case management specialists. The National Ombudsman position, which is currently vacant, is appointed by the SBA Administrator.", "The Office of the National Ombudsman's primary purpose is to provide small businesses, small government entities (those serving populations of less than 50,000), and small nonprofit organizations that believe they have experienced unfair or excessive regulatory compliance or enforcement actions (such as repetitive audits or investigations, excessive fines, and retaliation by federal agencies) a means to comment about such actions. As an impartial liaison, the Office of the National Ombudsman \"directs reported regulatory fairness matters to the appropriate agency for high-level fairness review, and works across government to address those concerns, reduce regulatory burdens, and help small businesses succeed.\"", "SBREFA also created a five-person Small Business Regulatory Fairness Board in each of the SBA's 10 regions to advise the National Ombudsman on matters related to federal regulatory enforcement activities affecting small businesses.", "Specifically, SBREFA directs the SBA Administrator to designate an ombudsman to", "work with each federal agency with regulatory authority over small businesses to ensure that small businesses that receive or are subject to an audit, on-site inspection, compliance assistance effort, or other enforcement-related communication or contact by federal agency personnel are provided a means to comment on those regulatory compliance and enforcement activities; receive comments from small businesses regarding actions by federal agency employees conducting small business regulatory compliance or enforcement activities; refer comments to the affected federal agency's inspector general in appropriate circumstances and maintain the confidentiality of the person or small business making these comments; based on substantiated comments received from small businesses and Small Business Regulatory Fairness Boards, annually report to Congress and affected federal agencies an evaluation of the federal agency's regulatory compliance and enforcement activities, including a rating of the agency's responsiveness to small businesses; provide the affected federal agency with an opportunity to comment on the National Ombudsman's annual report to Congress prior to publication and include in the final report a section in which the affected federal agency may comment on issues that are not addressed by the National Ombudsman in revisions to the draft; and coordinate and report annually on the Small Business Regulatory Fairness Boards' activities, findings, and recommendations to the SBA Administrator and the heads of affected federal agencies.", "This report examines the Office of the National Ombudsman's origin and history; describes its organizational structure, funding, functions, and current activities; and discusses a recent legislative effort to enhance its authority. During the 115 th Congress, S. 1146 , the Small Business Regulatory Relief Act of 2017, would have, among other provisions, ", "expanded the National Ombudsman's authority to work with federal agencies on the development of best practices for educating, training, and assisting small entities in understanding and complying with federal regulations; authorized the National Ombudsman to evaluate federal agency regulatory compliance guides, ensure that those guides are available to small business development centers and other SBA management and training resource partners, conduct small business customer service surveys on an ongoing basis to assess the timeliness and quality of federal agency regulatory activities, and develop an outreach program to promote awareness of the National Ombudsman's activities; and authorized to be appropriated such sums as are necessary to carry out these additional responsibilities."], "subsections": []}, {"section_title": "Origin", "paragraphs": ["On March 19, 1996, the Senate passed, 100-0, S. 942 , the Small Business Regulatory Enforcement Fairness Act of 1996. The bill, which included provisions creating the Office of the National Ombudsman and 10 regional Small Business Regulatory Fairness Boards, was later incorporated into P.L. 104-121 , the Contract with America Advancement Act of 1996. The bill was based on recommendations of the 1995 White House Conference on Small Business. ", "The 1995 White House Conference on Small Business, like its 1980 and 1986 predecessors, was preceded by state conferences and regional meetings. The 1,904 delegates to the 1995 White House Conference on Small Business considered more than 150 policy recommendations forwarded from the regional meetings and six petitions. Through a series of votes, the delegates narrowed the list of policy recommendations to 60, which were sent to the President and Congress for consideration. Improving the Regulatory Flexibility Act was the 3 rd highest vote-getter (1,398 votes) at the conference and paperwork and regulatory reform was the 25 th highest vote-getter (1,046 votes). SBREFA addressed both recommendations. The Office of the National Ombudsman and the Small Business Regulatory Fairness Boards were created to address the recommendation concerning federal regulatory reform.", "During Senate floor debate, the bill's proponents argued that the Office of the National Ombudsman was part of the bill's overall effort to create a \"more cooperative and less punitive regulatory environment between agencies and small business that is less threatening and more solution-oriented than we have achieved in the past.\" They argued that it would \"help small businesses get fair and legal treatment from the government if they have been treated unfairly\" and \"also assist small businesses in recovering legal fees as a result of unfair Government actions.\" ", "During floor debate, Senator John Glenn indicated that he supported the legislation but was concerned that the Office of the National Ombudsman and the Small Business Regulatory Fairness Boards could \"end up creating a one-sided record of complaints that will distort the broad public mission of our agencies.\" He also indicated that federal agencies are not \"the enemy when they carry out the laws passed by the people's representatives in Congress\" and was \"happy, at least, that in the final version of the bill before us, the Ombudsman will focus on general agency enforcement activity and not attempt to evaluate or rate the performance of individual agency personnel.\"", "Senator Carl Levin also supported the legislation but argued that \"the committee [on Small Business] should have taken more time to look at the pros and cons of placing an ombudsman in each regulatory agency, rather than relying on a lone ombudsman in the Small Business Administration to cover all agencies.\""], "subsections": []}, {"section_title": "History", "paragraphs": ["Initially, the Office of the National Ombudsman was located in Chicago and had a three-person staff. The first National Ombudsman (Peter Barca) was appointed in November 1996, and 50 small business owners were appointed to the 10 Small Business Regulatory Fairness Boards in that same month. The Small Business Regulatory Fairness Boards were all chartered by February 1997, and became operational in June 1997. ", "During its first year, the Office of the National Ombudsman also created its first small business appraisal form to receive small business comments, developed a structure to evaluate federal agency regulatory compliance and enforcement activities, instructed Small Business Fairness Board members about SBREFA, published a brochure, established its toll-free 1-888-REGFAIR telephone number, created a website, and held 10 public hearings across the nation \"to enable small businesses to publicly bring forth their concerns of the regulatory enforcement structure.\" The Office of the National Ombudsman also received 735 telephone calls, had more than 56,000 hits on its website, and had 110 small businesses initiate an appraisal form. Fifty filed a completed appraisal form, and 33 of these forms were forwarded to federal agencies for responses. ", "To the dismay of some Members, the Office of the National Ombudsman did not issue a report card on federal agency compliance and enforcement practices in its first annual report to Congress, dated December 31, 1997, primarily because the National Ombudsman felt that the office had not had sufficient small business participation to grade the agencies' performance. Instead, the National Ombudsman provided synopses of 12 small business appraisal forms that illustrated what the National Ombudsman identified as \"four common themes in the regulatory environment\" that are faced by small businesses: \"(1) agencies change their rules in the middle of the game; (2) agencies disregard the economic and other consequences of their actions on small businesses; (3) small businesses often get ensnarled in conflicting regulatory requirements when two federal agencies' jurisdiction overlap; and (4) small businesses fear federal agency retaliation.\" ", "In FY1998, the SBA provided the Office of the National Ombudsman its first annual budget (see Table 1 ). The SBA provided $500,000 ($351,000 was actually spent that year), sufficient to hire seven staff members (a writer, clerk or receptionist, agency investigator, attorney, public information officer, special assistant, and policy coordinator), and pay for travel, printing, and overhead expenses (photocopying, telephone line, postage, supplies, etc.). ", "Actual staffing levels have varied somewhat over the years. Including the National Ombudsman, there were 3 staff members in FY1997, 11 in FY1999, 9 in FY2000, 8 in FY2002, 7 from FY2007 to FY2014, 4 from FY2015 to FY2017, 6 in FY2018, and 5 in FY2019. As mentioned previously, the Office of the National Ombudsman has authorization for up to seven employees (including the National Ombudsman position, which is currently vacant).", "The Office of the National Ombudsman's annual report to Congress subsequently included its mandated report card on federal agency regulatory performance, and that section of the report became the focus of congressional hearings, primarily because several federal agencies received relatively low grades, especially in the timeliness of their responses to small business comments. The National Ombudsman added a \"best practices\" section to the annual report to Congress \"so one agency would know what the other agencies are doing and have that dialogue going on, and to encourage them\" to do better.", "Peter Barca left the National Ombudsman position in July 1999, leaving the position vacant until January 2000 when Gail A. McDonald was appointed the second National Ombudsman. Shortly after her appointment, the SBA's Administrator at that time, Aida Alvarez, decided to relocate the Office of the National Ombudsman from Chicago to SBA's headquarters in Washington, DC, reportedly in an effort to increase the office's \"visibility\" within the administration. The physical relocation was completed in August 2001. ", "In 2002, the Office of the National Ombudsman entered into a memorandum of understanding with the SBA Office of Advocacy in which both parties \"pledged the highest degree of cooperation\" and the Office of Advocacy (which focuses on issues related to the development of federal regulations and their impact on small businesses) agreed \"to offer the services of its Regional Advocates in planning the Ombudsman's regional fairness board hearings.\" ", "In 2003, the third National Ombudsman, Michael L. Barrera, testified during a congressional hearing that \"as public awareness of ONO [Office of the National Ombudsman] grows, cooperation among the small business community and Federal regulatory agencies is [also] growing.\" He noted that federal agency attendance at Small Business Regulatory Fairness Board hearings \"has improved dramatically\" and pointed out that the Internal Revenue Service, through its Taxpayer Advocate system, \"now attends every RegFair Hearing and Roundtable conducted by ONO.\"", "In 2006, the Office of the National Ombudsman renewed its previous memorandum of understanding with the SBA Office of Advocacy \"to foster increased cooperation between the offices as they both work to provide a more small business friendly regulatory environment.\" Specifically, the Office of the National Ombudsman agreed to ", "receive comments and concerns regarding the impact of regulations on small business and the burden of regulatory compliance and federal regulatory enforcement; where appropriate, forward such comments to the Office of Advocacy; provide information and materials generated through the Office of the National Ombudsman's activities that are more appropriately within the Office of Advocacy's jurisdiction; and promote the SBA's programs and services, including the Office of Advocacy's regulatory and research role, through its various hearings and roundtables and \"include the Office of Advocacy Regional Advocates in the planning and implementation of those activities as appropriate.\" ", "The SBA Office of Advocacy, which has a larger budget and more staff than the Office of the National Ombudsman, agreed to ", "provide material that may be distributed to participants in the Office of the National Ombudsman's Regulatory Fairness Program; and provide the National Ombudsman with regulatory complaints and other information generated by small business interests that are more appropriately within the Office of the National Ombudsman's jurisdiction.", "The Office of Advocacy's FY2019 appropriation is $9.120 million and it has authorization for 52 full-time equivalent employees.", "In recent years, Congress has focused increased attention on the Office of the National Ombudsman's efficacy in helping small businesses resolve their regulatory disputes with federal agencies, as opposed to focusing on how many small businesses contacted the office, submitted a formal comment, or participated in one of the office's hearings and roundtable discussions. For example, in 2016, the House Committee on Small Business noted that the National Ombudsman \"has no investigative capacity nor authority to overrule, stop or delay a federal action\" and asked the National Ombudsman to report back to the committee the percentage of cases that were referred to federal agencies for resolution in FY2014 (420) that resulted in a favorable outcome for the small businesses, \"such as reduction of a penalty.\" The National Ombudsman reported that 41 of the 420 small businesses (about 10%) that had a regulatory compliance or enforcement dispute forwarded to a federal agency in FY2014 for resolution received a favorable outcome."], "subsections": []}, {"section_title": "Current Organizational Structure and Funding", "paragraphs": ["As noted previously, the Office of the National Ombudsman has authorization for seven employees (including the National Ombudsman position, which is vacant) and currently has five employees: a Deputy National Ombudsman, an administrative officer, an external outreach manager, and two case management specialists. ", "The 10 Small Business Regulatory Fairness Boards are required to meet at least annually to advise the National Ombudsman on matters related to federal agency small business regulatory activities, report substantiated instances of excessive federal enforcement actions against small businesses, and prior to publication, comment on the National Ombudsman's annual report to Congress. ", "The boards are composed of five volunteers who are an owner, operator, or officer of a small business. Board members are appointed by the SBA Administrator, after receiving the recommendations of the chair and ranking minority member of the House Committee on Small Business and the Senate Committee on Small Business and Entrepreneurship. No more than three board members may be of the same political party, they cannot be a federal officer or employee, in either the executive branch or Congress, and they serve at the pleasure of the SBA Administrator for terms of three years or less. ", "The boards are based in the SBA's 10 regions", "Region 1 (serving Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont); Region 2 (serving New Jersey, New York, Puerto Rico, and the U.S. Virgin Islands); Region 3 (serving Delaware, Maryland, Pennsylvania, Virginia, West Virginia, and the District of Columbia); Region 4 (serving Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee); Region 5 (serving Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin); Region 6 (serving Arkansas, Louisiana, New Mexico, Oklahoma, and Texas); Region 7 (serving Iowa, Kansas, Missouri, and Nebraska); Region 8 (serving Colorado, Montana, North Dakota, South Dakota, Utah, and Wyoming); Region 9 (serving Arizona, California, Hawaii, Nevada, and the territories of Guam and American Samoa); and Region 10 (serving Alaska, Idaho, Oregon, and Washington).", "As shown in Table 1 , the SBA provided the Office of the National Ombudsman $1.313 million in FY2018, and an estimated $1.143 million in FY2019. The SBA has requested $1.438 million for FY2020. ", "Unlike the SBA's Office of Advocacy, which is also tasked with serving as an independent advocate for small businesses in the regulatory process (but primarily at the developmental stage), the Office of the National Ombudsman does not have its own funding account. The SBA funds the Office of the National Ombudsman through its salaries and expenses' executive direction subaccount. That account includes funding for the SBA's Office of the Administrator, Office of General Counsel, Office of Government Relations, Office of Hearings and Appeals, Office of Marketing and Communications, Office of Performance Management and Chief Financial Officer, and the National Ombudsman. The Office of Advocacy was also funded through that account, but Congress directed the SBA to provide the Office of Advocacy its own budgetary account in P.L. 111-240 , the Small Business Jobs Act of 2010, as a means to enhance the Office of Advocacy's independence from the SBA Administrator. To date, similar legislation has not been introduced to provide the Office of the National Ombudsman its own funding account within the SBA. Instead, ombudsman advocates have argued that ombudsman offices \"should not have duties within the agency that might create a conflict with their responsibilities as a neutral, and their budgets should be publicly disclosed.\""], "subsections": []}, {"section_title": "The Ombudsman's Regulatory Activities and Outreach Efforts", "paragraphs": ["Small businesses that believe they have experienced excessive or unfair federal regulatory compliance or enforcement actions may file a formal comment with the Office of the National Ombudsman. The formal comment typically includes the following basic information and a signed consent form (SBA Form 1993) authorizing the Office of the National Ombudsman to pursue the matter with the federal agency:", "a description of the specific action taken by the federal agency and the results of this action; the specific resolution sought; and any relevant documentation.", "These comments may be filed online or in paper form, and commenters can receive information regarding the comment form or information about the Office of the National Ombudsman by calling the National Ombudsman's Regulatory Fairness Helpline at 888-REG-FAIR. In addition, small businesses may file comments \"on-the-spot\" at any of the Office of the National Ombudsman's regional hearings and roundtables.", "Once a comment is submitted, a case management specialist reviews the case and any supporting documentation to ensure that the necessary authorization and other information are present. The case management specialist then determines how the Office of the National Ombudsman can best assist the small business, advises the small business of expected next steps, and, if the comment is to be forwarded to a federal agency, explains the parameters of the SBREFA review. ", "Comments forwarded to a federal agency include a request for \"a prompt, high-level, responsive review of the matter reported.\" The federal agency is asked to consider the fairness of the case from a small business perspective and \"to provide a practical, timely response that balances the spirit of the regulation with the specific circumstances of the small business.\" All comments are handled on a confidential, protected basis, and can be raised anonymously, if preferred by the small business.", "The case management specialist then follows up with the federal agency and the small business as appropriate and communicates with the small business owners the actions taken to assist them.", "In FY2018, the Office of the National Ombudsman assisted 354 small businesses, responded to numerous general inquiries, conducted 10 regional regulatory fairness roundtables across 5 of its regions, completed 118 outreach events, and initiated contact with 100 trade associations representing more than 2 million small business owners and SBA resource partners. The National Ombudsman also met with senior officials representing 27 federal agencies.", "In addition, the National Ombudsman's annual report includes a report card providing letter grades (which can range from A to F) for each federal agency (and in several instances, for individual offices within the federal agency)", "two grades rating the agency's responsiveness to small business concerns (the timeliness of the agency's response and the quality of the response); three grades rating the agency's compliance with SBREFA (the agency's nonretaliation policies against small business commenters, the provision of regulatory compliance assistance to small businesses, and the provision of notice to small businesses of their rights under SBREFA); and an overall grade.", "In FY2017, 39 federal agencies and offices received an overall grade of A, 1 received an overall grade of B, 1 received an overall grade of C, and the Department of Veterans Affairs received an overall grade of D. No agencies received an overall grade of F."], "subsections": []}, {"section_title": "Current Congressional Issues", "paragraphs": ["Some Members and small business advocates have argued that the Office of the National Ombudsman should be provided additional resources. For example, on March 29, 2017, a small business advocate argued the following at a Senate Committee on Small Business and Entrepreneurship hearing: ", "Where the Office of Advocacy works on the front end of a development of a significant regulation, the Office of the National Ombudsman is charged with helping small businesses on the back end, with all regulation compliance. It serves as the conduit for small businesses to have their grievances about compliance problems, or other issues, with Federal agencies, heard directly by the agencies, in an effort for successful resolution. In this way, the Office of the National Ombudsman, and the agencies, can detect patterns of compliance problems so that the agencies can revisit rules for modification. ", "This important component of the rulemaking process is woefully underfunded. The Office of the National Ombudsman actually relies on volunteers to help get the message out about its vital small business services. It is, for the most part, unknown and underutilized. If Congress really wants to help small businesses with Federal regulations, invest more in the small business outreach, support, and feedback loop.", "As mentioned previously, many small businesses that submit formal comments to the Office of the National Ombudsman do not receive a favorable outcome from the federal agency. Some Members and small business advocates have argued that the Office of the National Ombudsman should be provided additional authority to assist small businesses in their efforts to resolve their regulatory disputes with federal agencies. For example, during the 115 th Congress, S. 1146 , the Small Business Regulatory Relief Act of 2017, would have, among other provisions, ", "expanded the National Ombudsman's authority to work with federal agencies on the development of best practices for educating, training, and assisting small entities in understanding and complying with federal regulations; authorized the National Ombudsman to evaluate federal agency regulatory compliance guides, ensure that those guides are available to small business development centers and other SBA management and training resource partners, conduct small business customer service surveys on an ongoing basis to assess the timeliness and quality of federal agency regulatory activities, and develop an outreach program to promote awareness of the National Ombudsman's activities; and authorized to be appropriated such sums as are necessary to carry out these additional responsibilities.", "Others Members appear unconvinced that providing the Office of the National Ombudsman additional resources and/or authority is necessary. They have argued, for example, that the best way to reduce small business regulatory burden is not more government but less regulation. "], "subsections": []}, {"section_title": "Concluding Observations", "paragraphs": ["The Office of the National Ombudsman is a small office with a relatively large mandate\u2014to serve as an impartial liaison across federal agencies for small businesses that believe they have not been treated fairly in the enforcement of federal regulations. It faces several challenges.", "First, the Office of the National Ombudsman is generally recognized as being an independent, impartial office, but it is housed within the SBA and remains subject to its influence through (1) its proximity to the agency and its organizational culture; (2) the budgetary process, which provides the SBA Administrator the authority to determine the Office of the National Ombudsman's budget; and (3) the appointment and removal process, which provides the SBA Administrator the authority to hire and fire the ombudsman. In addition, the sheer size of the SBA (more than 3,200 full-time employees and an annual budget of about $700 million) relative to the Office of the National Ombudsman, and the existence of the SBA's Office of Advocacy, which has a similar mission (but focused primarily on regulatory development as opposed to regulatory compliance and enforcement), makes it more difficult than would otherwise be the case for the Office of the National Ombudsman to be recognized by stakeholders as the definitive voice for small businesses in the regulatory process. ", "Second, the National Ombudsman has often had a relatively short tenure. The last two National Ombudsmans (Earl L. Gay and Nathan J. Miller) each served for about a year. The National Ombudsman has left office for various reasons, such as a change in Administration or for opportunities in the private sector. Frequent turnover can lead to continuity problems for the office. ", "Third, the Office of the National Ombudsman does not have the authority to compel federal agencies to undertake specific actions to resolve disputes. As a result, although its annual rating of federal agency responsiveness to small business concerns does provide it a means to exert some influence on federal agency actions, its role in resolving disputes is somewhat constrained.", "Finally, the Office of the National Ombudsman's relatively limited budget and staffing level restricts its ability to engage in outreach activities that could increase small business awareness of its existence and services."], "subsections": []}]}}
{"id": "R45718", "title": "The Antiquities Act: History, Current Litigation, and Considerations for the 116th Congress", "released_date": "2019-05-15T00:00:00", "summary": ["Summary", "The Antiquities Act authorizes the President to declare, by public proclamation, historic landmarks, historic and prehistoric structures, and other objects of historic or scientific interest situated on federal lands as national monuments. The act also authorizes the President to reserve parcels of land surrounding the objects of historic or scientific interest, but requires that the amount of land reserved be confined to the smallest area compatible with the proper care and management of the objects to be protected. Since its enactment in 1906, Presidents have used the Antiquities Act to establish 158 monuments, reserving millions of acres of land in the process. Presidents have also modified existing monuments, whether by increasing or decreasing their size (or both), on more than 90 occasions.", "Though most monument proclamations have been uncontroversial, some have spurred corrective legislative action and litigation. Congress has twice imposed geographic limitations on the President's authority under the Antiquities Act in response to proclamations reserving millions of acres of land in Wyoming and Alaska. Litigants have also challenged the President's authority to establish certain monuments, disputing whether the historic or scientific objects selected for preservation were encompassed by the act, as well as whether the amount of land reserved exceeded the smallest area necessary for the objects' preservation. Courts, however, have uniformly rejected these challenges and adopted a broad interpretation of the President's authority under the Antiquities Act.", "No President has purported to revoke a national monument, but past Presidents have reduced the size of existing monuments on 18 occasions. In 2017, President Trump issued proclamations reducing the size of the Grand Staircase-Escalante National Monument and the Bears Ears National Monument. Various groups have sued to block these proclamations, arguing that the President exceeded his authority under the Antiquities Act. Because none of the prior proclamations diminishing monuments was challenged in court, these lawsuits offer the first opportunity for a court to decide whether the act empowers the President to diminish a national monument.", "Those challenging President Trump's proclamations argue that the Antiquities Act's authorization for the President to \"declare\" national monuments and \"reserve\" surrounding lands does not include the distinct power to revoke or diminish an existing monument. They underscore this point by noting that, unlike the Antiquities Act, several contemporaneous public land laws expressly authorized the President to undo a prior reservation of land. The plaintiffs also highlight a number of 19th and early 20th century legal opinions from the executive branch concluding that the President lacks authority to undo a reservation of land absent express statutory authorization. Finally, the plaintiffs argue that the Federal Land Policy and Management Act of 1976 (FLPMA)\u2014which prohibited the Secretary of the Interior from modifying or revoking a national monument established under the Antiquities Act\u2014demonstrates Congress's intent to consolidate modification power in the legislature.", "By contrast, the United States argues that the requirement that reserved land be \"the smallest area compatible\" with the preservation of the designated objects empowers the President to reduce the size of a monument when he determines that more land was reserved than necessary. The United States also contends that the Executive has implied authority to revisit prior discretionary decisions. Further, the United States argues that the President's authority to diminish monuments is confirmed by the 18 times past Presidents have done so and by several executive branch legal opinions that support this conclusion. Finally, the United States argues that FLPMA is irrelevant because that law prohibits the Secretary of the Interior, not the President, from diminishing monuments.", "While the President's authority to diminish a national monument has been questioned, there appears to be no dispute that Congress has authority to do so, a power it has exercised before. Several Members of Congress have introduced legislation either codifying or reversing President Trump's proclamations or placing limits on the President's authority under the Antiquities Act going forward."], "reports": {"section_title": "", "paragraphs": ["T he Antiquities Act was enacted in 1906 in response to the destruction of prehistoric ruins and other archaeological sites in the western United States, often by amateur archaeologists and treasure hunters. The act authorizes the President to declare, by public proclamation, historic landmarks, historic and prehistoric structures, and other objects of historic or scientific interest located on federal land as national monuments. It also authorizes the President to reserve parcels of land surrounding these objects, but limits the size of such reservations to \"the smallest area compatible with the proper care and management of the objects to be protected.\" Though the Antiquities Act was enacted with the primary goal of preserving archaeological sites, it has also been frequently used to protect naturally occurring objects, such as the geological features within the Grand Canyon National Monument. Once a national monument is established, use of the lands and resources within the monument's boundaries are subject to the limitations specified in the proclamation itself and other sources of law, without need of congressional authorization. Since its enactment, Presidents have used the Antiquities Act to establish 158 national monuments, reserving millions of acres of land in the process, and to modify existing monuments more than 90 times.", "Like many laws concerning federal lands, the Antiquities Act operates in the midst of an ongoing, and sometimes contentious, public policy debate regarding how to best reconcile the need to preserve natural resources and other objects located on public lands with the needs of the local communities affected by the limitations on land use that follow from the creation of a national monument. Though most monument proclamations have been uncontroversial, some have precipitated corrective legislation and litigation. In two instances, Congress passed legislation placing geographic limits on the President's authority to establish national monuments. Attempts to undo proclamations through litigation have been less successful, as courts have uniformly upheld challenged proclamations through a broad interpretation of the Antiquities Act.", "The Antiquities Act has received renewed attention in recent years as a result of President Trump's December 2017 proclamations reducing the size of the Grand Staircase-Escalante National Monument and the Bears Ears National Monument. Various groups have challenged those proclamations in federal district court, arguing (among other things) that the Antiquities Act does not empower the President to diminish the size of national monuments. These cases will be the first time a court has had an opportunity to address whether the President has such authority. ", "This report begins by discussing the Antiquities Act's legislative history. It then provides an overview of the act's provisions before reviewing past presidential proclamations as well as judicial decisions and legislation related to certain monument proclamations. Finally, the report discusses the current litigation involving President Trump's proclamations diminishing the Grand Staircase-Escalante and Bears Ears monuments, with a focus on the parties' arguments addressing whether the Antiquities Act authorizes the President to diminish a national monument."], "subsections": [{"section_title": "Legislative History of the Antiquities Act", "paragraphs": ["Congress passed the Antiquities Act in 1906, and President Theodore Roosevelt signed it into law that same year. As this section discusses, this law's enactment marked the culmination of a multiyear effort to empower the federal government to take swift action to protect archaeological sites and other objects of historical and scientific value from destruction.", "In the 1880s, a growing interest emerged in the prehistoric ruins and other archaeological sites located in the western United States. Prehistoric ruins were initially discovered by ranchers and other prospectors in Colorado, New Mexico, and Arizona. Word of these discoveries spread rapidly, leading to extensive and unregulated excavation of these sites by antiquity hunters from around the world. Amateur excavators removed large quantities of artifacts from prehistoric sites and sold them to exhibitors, museum curators, and private collectors, often causing extensive damage to the ruins during the excavation process. These excavations continued throughout the 1880s and 1890s, leading one observer to bemoan that \"[a] commercial spirit is leading to careless excavations for objects to sell, and walls are ruthlessly overthrown, buildings torn down in hope of a few dollars' gain.\" ", "During this period, federal law did not provide general protection against the excavation or destruction of historic sites located on public lands or require a permit before excavation could commence. Nonetheless, some limited protections did apply. First, the General Land Office was authorized to \"withdraw specific tracts of land from sale or entry for a temporary period,\" a power it exercised with increasing frequency as the threat to historic sites grew. Second, through the Forest Reserve Act of 1891, the President had authority to \"create permanent forest reserves by executive proclamation.\" However, though lands within forest reserves were \"withdrawn from disposition and entry under the homestead and other laws, they were not protected from other forms of development, especially mining.\" Thus, none of these laws authorized the President to make permanent and comprehensive reservations for the purpose of preservation. ", "With the need for federal intervention apparent, Congress set out to empower the President to expeditiously protect historic sites from further destruction. Legislation to protect the nation's antiquities was first introduced in Congress in 1900, though the various proposals differed in how they defined the objects to be protected and how the objects were to be designated. The first bill, introduced by Representative Jonathan P. Dolliver of Iowa, would have authorized the President to designate as a park or reservation \"any prehistoric or primitive works, monuments, cliff dwellings, cave dwellings, cemeteries, graves, mounds, forts, or any other work of prehistoric or primitive man\" in addition to \"any natural formation of scientific or scenic value or interest, or natural wonder or curiosity on the public domain.\" Under this bill, the President would have had authority to designate surrounding land needed for such preservation \"as [the President] may deem necessary for the proper preservation or suitable enjoyment of said reservation,\" and the Secretary of the Interior would have been empowered to acquire private lands or interests within reservation areas. A proposal supported by the Department of the Interior that same year would have similarly vested protective powers in the President, but it defined the objects to be preserved more generally than Representative Dolliver's proposal, protecting \"tracts of public land\" based on their \"scenic beauty, natural wonders or curiosities, ancient ruins or relics, or other objects of scientific or historic interest, or springs of medicinal or other properties.\" Neither of these proposals limited the amount of land the President could reserve.", "In contrast to these proposals, a bill introduced that same Congress by Representative John Shafroth of Colorado and reported out of the House Committee on the Public Lands provided much narrower authority to the executive branch. That legislation would have authorized the Secretary of the Interior\u2014rather than the President\u2014to \"reserve from sale, entry, and settlement\" any public lands containing \"monuments, cliff dwellings, cemeteries, graves, mounds, forts, or any other work of prehistoric, primitive, or aboriginal man,\" but it would have limited the Secretary to creating monuments in Colorado, Wyoming, and the then territories of Arizona and New Mexico, with no monument to exceed 320 acres.", "None of these proposals passed either chamber of Congress. In the following Congress, the Senate did pass legislation aimed at protecting antiquities. That legislation would have authorized the Secretary of the Interior to make \"temporary withdrawals\" of land to protect \"historic and prehistoric ruins, monuments, archaeological objects, and other antiquities,\" but only to the extent \"necessary for the preservation\" of those objects. Permanent withdrawals would have been authorized for \"ruins and antiquities of special importance,\" but the amount of land reserved could not \"exceed[] six hundred and forty acres in any one place.\" ", "As these proposals were being considered, some Members of Congress sought to limit the total amount of land the Executive could withdraw. During a hearing before the House Committee on the Public Lands on the Senate-passed legislation, Delegate Bernard Rodey of New Mexico expressed his desire that the bill contain \"some limit upon the amount of withdrawals that [the Executive] could make,\" noting that much of the land in New Mexico was already withdrawn from public use and that many archaeological sites in need of preservation were located within this territory. Delegate Rodey worried that the Executive could evade an acreage limitation\u2014such as the 640-acre limitation in the Senate-passed bill\u2014by creating multiple 640-acre tracts. Other committee members and witnesses, however, concluded that the Executive was \"not\u00a0.\u00a0.\u00a0. likely to\" evade an acreage limitation in this way and that a 640-acre limitation \"would prevent very extensive reservations in any one State.\" In response to Delegate Rodey's concerns, Edgar Lee Hewett\u2014a prominent archaeologist who was closely involved in developing the Antiquities Act \u2014suggested that the President's discretion could be sufficiently checked by language stating \"that positively no more land shall be withdrawn than is necessary for the purpose.\" The House Committee on the Public Lands reported the Senate bill to the full House, but the legislation was opposed by the Smithsonian Institution and ultimately did not win passage.", "After more than half a decade of debate, the 59th Congress passed the Antiquities Act in 1906. Legislation drafted by Edgar Lee Hewett was introduced in both chambers of Congress in 1906. This proposal authorized the President (rather than the Secretary of the Interior) to issue \"public proclamation[s]\" to protect \"historic landmarks, historic and prehistoric structures, and other objects of historic or scientific interest\" on federal land as \"national monuments.\" This proposal also limited the amount of land reserved for each monument \"to the smallest area compatible with the proper care and management of the objects to be protected[.]\" ", "The Senate bill was passed by voice vote in that chamber on May 24, 1906. During the House debate, Representative John Lacey\u2014chairman of the House Committee on the Public Lands\u2014responded to an inquiry from Representative John Stephens of Texas as to \"[h]ow much land will be taken off the market in the Western States by the passage of the bill?\" Representative Stephens was particularly concerned that the bill provided authority similar to the Forest Reserve Act of 1891, under which Presidents had set aside tens of millions of acres of land. \"Not very much,\" was Representative Lacey's reply, pointing to the language in the proposed legislation requiring that the amount of land reserved be \"the smallest area necessary\" to preserve designated objects. This assurance mirrored that found in the House report on the bill, which explained that \"[t]he bill proposes to create small reservations reserving only so much land as may be absolutely necessary for the preservation of these interesting relics of prehistoric times.\" ", "The House passed the Senate bill on June 5, unanimously and without amendment. President Theodore Roosevelt signed the bill into law on June 8, 1906."], "subsections": []}, {"section_title": "The Antiquities Act", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The Antiquities Act consists of four sections. In its first section, the act imposes a fine or imprisonment for not more than 90 days (or both) on \"any person who shall appropriate, excavate, injure, or destroy any historic or prehistoric ruin or monument, or any object of antiquity, situated on lands owned or controlled by the Government of the United States.\" As written, this section prohibits damaging objects of antiquity, regardless of whether the President had established a monument under the authority conferred by Section 2 of the act. The penalties of this section apply in addition to general federal prohibitions on the misappropriation of federal property.", "The second section\u2014the core of the act\u2014authorizes the President \"in his discretion\" \"to declare by public proclamation historic landmarks, historic and prehistoric structures, and other objects of historic or scientific interest that are situated upon the lands owned or controlled by the Government of the United States to be national monuments.\" In addition to protecting the \"objects\" themselves, the act also authorizes the President to \"reserve\u00a0.\u00a0.\u00a0. parcels of land\" to be part of the monuments, but requires that those parcels be \"confined to the smallest area compatible with the proper care and management of the objects to be protected.\" ", "The Antiquities Act does not require the President to produce an evidentiary record or to follow specific procedures in establishing a national monument. Moreover, because proclamations under the Antiquities Act are issued directly by the President, rather than by an executive agency, they are not subject to the procedural and judicial review provisions of the Administrative Procedure Act (APA) or the procedural and administrative record requirements of the National Environmental Policy Act (NEPA). As a result, presidential proclamations under the Antiquities Act offer a more expeditious means of preserving federal lands than other environmental statutes.", "The act also does not specify what effect the establishment of a national monument has on the use of the objects and lands encompassed within the monument, other than by prohibiting the appropriation, excavation, injury, or destruction of \"historic or prehistoric ruin[s],\" \"monument[s],\" or other \"object[s] of antiquity.\" Instead, limitations on the use of lands and resources within a monument follow from a variety of other sources. The Mineral Leasing Act prohibits new mineral leasing within national monuments, and a presidential proclamation may impose additional restrictions on mining and mineral claims, as well as oil and gas leases, timber harvesting, and hunting, fishing, and grazing. Use restrictions may also be found in the management plans developed by the agency responsible for overseeing a given monument. Monuments established in the last 50 years have also made accommodations for the continued exercise of valid rights existing at the time of the monument's creation.", "The act is also silent on which federal agency is responsible for managing a national monument once established. For much of the act's history, the National Park Service was most often selected for this task. Indeed, every monument from 1933 to 1978 was assigned to the National Park Service's care. However, some Presidents have departed from this practice and tasked other agencies (such as the Bureau of Land Management) with this responsibility.", "In its last sections, the act authorizes the executive branch to issue permits for \"the examination of ruins, the excavation of archaeological sites, and the gathering of objects of antiquity\" for the benefit of scientific or educational institutions in order to \"increas[e] the knowledge of such objects\" and for their \"permanent preservation in public museums.\" The act also authorizes the responsible executive departments to issue \"uniform rules and regulations\" to effectuate the act's provisions."], "subsections": []}, {"section_title": "Past Presidential Proclamations", "paragraphs": ["President Theodore Roosevelt did not tarry long before using his new authority. On September 24, 1906, President Roosevelt issued his first proclamation under the Antiquities Act to protect Devil's Tower\u2014a \"lofty isolated rock\" and \"natural wonder\" located in Wyoming \u2014with a reservation of land totaling 1,152 acres. Most of President Roosevelt's initial designations similarly adhered to Representative Lacey's predication that \"[n]ot very much\" land would be reserved through presidential proclamations under the act. President Roosevelt's second designation in December 1906 (El Morro in New Mexico) consisted of 160 acres and his third (Montezuma Castle in Arizona, also in December 1906) was 161 acres. But it did not take long for the size of monuments to increase. As part of his establishment of the Chaco Canyon National Monument in March 1907, President Roosevelt reserved 20,629 acres, while his creation of the Petrified Forest National Monument in Arizona set aside 60,776 acres. Yet these designations were dwarfed by his establishment of the 808,120-acre Grand Canyon National Monument, by far the largest of President Roosevelt's monuments. All told, President Roosevelt designated 18 monuments in his final years in office.", "Over the last century, Presidents have utilized the Antiquities Act to varying degrees. Presidents from Taft through Eisenhower established or enlarged 10 or more monuments each, with President Franklin Roosevelt leading the pack with 30. Presidents after Eisenhower used the act to a lesser extent. Presidents Kennedy and Johnson each created or enlarged less than ten monuments, President Ford enlarged two, and Presidents Nixon, Reagan, and George H. W. Bush created or enlarged none. President Carter, however, created or enlarged 17 monuments.", "The Antiquities Act's three-term dormancy ended with the election of President Clinton. During his two terms in office, President Clinton established 19 new monuments and enlarged three more. These new monuments included the 1.7 million-acre Grand Staircase-Escalante National Monument in Utah. Following a decline in use under President George W. Bush, who created six national monuments, President Obama exceeded all his predecessors by establishing 29 new monuments and enlarging another five. Among these was the 1.35 million-acre Bears Ears monument in Utah, designated in the last week of President Obama's presidency. To date, President Trump has established one national monument, the Camp Nelson National Monument in Kentucky.", "All told, Presidents Theodore Roosevelt through Trump have used the Antiquities Act to establish a total of 158 national monuments. These presidents also issued proclamations modifying existing monuments over 90 times. Though many of these monuments have retained their status as national monuments, Congress has exercised its authority under the Property Clause to alter certain monument designations, whether by incorporating the monument (or portions thereof) into the National Park System, transferring the monuments to state control, or abolishing the monument outright.", "No President has purported to abolish a national monument, but past Presidents have reduced the size of monuments on 18 separate occasions. President Franklin Roosevelt took such action four times during his presidency, while President Eisenhower did so on six occasions. Presidents Taft, Wilson, Coolidge, Truman, and Kennedy each reduced three or fewer monuments. In some instances, Presidents have simultaneously removed lands from a monument reservation while adding others. No President after Kennedy diminished an existing monument until President Trump's issuance of proclamations in December 2017 diminishing the Grand Staircase-Escalante National Monument by 700,000 acres and the Bears Ears National Monument by 1.15 million acres."], "subsections": []}, {"section_title": "Legislation and Litigation in Response to Proclamations", "paragraphs": ["Most monument declarations have not generated significant debate. Over the years, however, a few monuments have proved controversial, resulting in corrective legislation, litigation, or both. In two instances, Congress imposed restrictions on the President's authority to establish national monuments in Wyoming and Alaska, and in some cases it has abolished monuments altogether. But through all this, Congress has not fundamentally altered the authority of the President under the Antiquities Act. Courts also have broadly interpreted the President's authority to designate prehistoric ruins and other man-made structures (in addition to naturally occurring objections of scientific interest) and to determine the amount of lands needed for their preservation. Finally, though the Supreme Court has not directly addressed the scope of judicial review of a presidential proclamation, courts that have addressed the issue have concluded that such review is deferential."], "subsections": [{"section_title": "The Roosevelt Proclamations", "paragraphs": ["The first lawsuit implicating an Antiquities Act proclamation involved President Theodore Roosevelt's 1908 creation of the Grand Canyon National Monument, which reserved the land designated as part of that monument \"subject to all prior valid adverse claims.\" A businessman and his associates continued to conduct mining operations within the bounds of the monument, arguing first that the President had \"no authority\" to establish the monument because it was not the type of object encompassed by the act, and second that they had a valid and preexisting \"lode mining claim.\" In its 1920 decision in Cameron v. United States , the Supreme Court rejected this challenge. Recognizing the Grand Canyon as \"the greatest eroded canyon in the United States\" and \"one of the great natural wonders,\" the Court noted that it \"has attracted wide attention among explorers and scientists\" and \"affords an unexampled field for geological study.\" Thus, the Court concluded that the Grand Canyon was an \"object[] of unusual scientific interest\" for purposes of the Antiquities Act.", "President Franklin Roosevelt's 1943 establishment of the Jackson Hole National Monument\u2014a 221,610-acre monument in Wyoming \u2014 generated both litigation and legislation. Litigants sued in federal district court in Wyoming to invalidate the proclamation, claiming (among other things) that the reserved land \"contain[ed] no objects of an historic or scientific interest\" and was \"not confined to the smallest area compatible\" with the preservation of the monument. The court concluded first that it had \"limited jurisdiction to investigate and determine whether or not the Proclamation\" was lawful. Though acknowledging that a court could void a proclamation lacking any evidentiary support, the court concluded that it lacked authority to determine the legality of the monument based on its own assessment of the preponderance of the evidence. The court thus held that its review was limited only to assessing whether the government had put forward \"substantial evidence\" to sustain the proclamation. Relying on that standard, the court upheld the Jackson Hole National Monument. It found that the United States' evidence of \"trails and historic spots in connection with the early trappings and hunting of animals\" and \"structures of glacial formation and peculiar mineral deposits and [indigenous] plant life\" was sufficient to sustain the proclamation with respect to both the nature of the objects designated and the amount of lands reserved. In so doing, the court placed the \"burden\u00a0.\u00a0.\u00a0. on the Congress to pass such remedial legislation as may obviate any injustice brought about\" by the proclamation.", "Congress's response to the Jackson Hole monument has been described as \"perhaps the most successful congressional opposition to a monument proclamation.\" Extensive hearings were held by committees in both chambers. The House Committee on the Public Lands emphasized the economic injury that the reservation of land would inflict on the local communities, including by reducing the tax base for local governments and \"destroying the cattle business.\" The Senate Committee on Public Lands and Surveys went further, and concluded that the Jackson Hole proclamation \"disregarded\" the Antiquities Act's requirement that reserved lands be \"confined to the smallest area\" necessary for preservation. In this committee's judgment, the authority given the President in the Antiquities Act \"was not broad enough to cover the establishment of the Jackson Hole Monument,\" and so it sought to \"disestablish[]\" that monument in order to eliminate \"a dangerous precedent.\" ", "Congress ultimately approved legislation abolishing the Jackson Hole monument, but President Roosevelt pocket-vetoed that bill. Responding in kind, Congress refused to fund the Jackson Hole monument for the next seven years. The fate of Jackson Hole was finally resolved when President Truman signed legislation to consolidate it with the existing Grand Teton National Park. But Congress further restricted the President's authority under the Antiquities Act by including a provision in this legislation that amended the Antiquities Act to prohibit the President from establishing monuments within Wyoming. "], "subsections": []}, {"section_title": "Judicial Decisions in the 1970s", "paragraphs": ["Though the Antiquities Act authorizes the President to set aside \"lands,\" the Supreme Court in the 1970s concluded that the act authorizes the preservation of waters and submerged lands as well. In Cappaert v. United States , the United States sought to prevent ranchers, the Cappaerts, from pumping groundwater on their ranch that was two and one-half miles from an underground pool known as \"Devil's Hole,\" located within a 40-acre plot of land within the Death Valley National Monument. The Cappaerts' use of groundwater, the United States argued, reduced the water level of Devil's Hole and threatened the survival of a rare desert fish\u2014the Devil's Hole pupfish\u2014living within. The United States argued that this pumping was prohibited because the proclamation adding Devil's Hole to the Death Valley National Monument also reserved the groundwater feeding the pool. Relying on the Antiquities Act's legislative history, the Cappaerts argued that the inclusion of Devil's Hole in the Death Valley monument was unlawful because the act allows only the protection of land, not water or animals. In any event, the Cappaerts argued, the inclusion of thousands of square miles of groundwater for the preservation of the 40-acre Devil's Hole violated the requirement that land reservations \"be confined to the smallest area compatible\" with the preservation of the designated objects.", "The Supreme Court rejected the Cappaerts' arguments in a few brief sentences. Relying on Cameron , the Court concluded that the underground pool, and the endangered pupfish living within, were objects of scientific interest and thus appropriate subjects of protection under the Antiquities Act. Two years later, the Supreme Court in United States v. California reaffirmed that the Antiquities Act allows the President to withdraw bodies of water, as well as plots of land, when it upheld President Truman's expansion of the Channel Island National Monument."], "subsections": []}, {"section_title": "President Carter's Alaska Monuments", "paragraphs": ["In 1980, Congress also imposed an additional territorial restriction on the President's authority under the Antiquities Act, this time in response to President Carter's creation of numerous monuments in Alaska. In 1971, Congress passed and President Nixon signed the Alaska Native Claims Settlement Act, which authorized the Secretary of the Interior to propose up to 80 million acres for preservation and gave Congress five years to approve or disapprove the recommendation. During that five-year window, the lands would be temporarily withdrawn. But when it became clear that Congress would not act before this deadline, President Carter invoked his authority under the Antiquities Act to establish 17 new or expanded monuments within Alaska, totaling 56 million acres. ", "These monument proclamations \"sparked bitter opposition in Alaska,\" leading to protests throughout the state. Responding to these protests, and with the twin goals of securing environmental protection and providing for the economic needs of Alaskans, Congress passed and the President signed the Alaska National Interest Lands Conservation Act (ANILCA). This law rescinded President Carter's monument designations, but simultaneously set aside over 100 million acres of land for conservation, much of which consisted of the same lands that had been included in President Carter's monuments. But to avoid a repeat of the controversy that surrounded President Carter's proclamations, Congress again limited the President's authority under the Antiquities Act, providing that \"future executive branch action which withdraws more than five thousand acres, in the aggregate, of public lands within the State of Alaska\" will not be \"effective until notice is provided in the Federal Register and to both Houses of Congress\" and that each \"withdrawal shall terminate unless Congress passes a joint resolution of approval within one year after the notice of such withdrawal has been submitted to Congress.\"", "Like the Jackson Hole monument, several of President Carter's Alaska monuments were challenged in federal district court. The district court, while recognizing that the Antiquities Act limits the President's discretion as to which objects may be protected and how much land may be included in a monument, rejected the plaintiffs' argument that the Antiquities Act does not apply to naturally occurring objects of scientific interest. The court observed that prior Presidents had repeatedly used the Antiquities Act for this purpose and Congress had not amended the Antiquities Act in response, thus indicating Congress's tacit approval of the practice. No appeal was taken from the district court's decision in this case."], "subsections": []}, {"section_title": "Recent Lower Court Decisions", "paragraphs": ["Litigation over the Antiquities Act abated during the 1980s and early 1990s, as President Reagan and President H. W. Bush did not use the Antiquities Act to establish national monuments. That hiatus came to an end with challenges to several of President Clinton's monument designations, including the Grand Staircase-Escalante monument in Utah and the Giant Sequoia monument in California. The plaintiffs in two cases\u2014 Mountain States Legal Foundation v. Bush and Tulare County v. Bush \u2014argued (among other things) that President Clinton exceeded his authority under the Antiquities Act because that law authorizes only designations of \"man-made objects, such as prehistoric ruins and ancient artifacts,\" not natural phenomena, and because the monuments were not limited to the smallest area necessary for protecting the designated objects.", "The U.S. Court of Appeals for the D.C. Circuit rejected these arguments. The court of appeals disposed of the first objection based on the Supreme Court's holdings in Cameron and Cappaert . \"[T]he President's Antiquities Act authority,\" the court explained, \"is not limited to protecting only archaeological sites.\" The court of appeals then decided that it had no occasion to resolve the second argument\u2014that the reserved land was not the smallest area compatible with the preservation of the objects\u2014because it determined that the plaintiffs failed to meet their burden of \"identify[ing] the improperly designated lands with sufficient particularity to state a claim.\"", "Notably, the district court in each of these cases dismissed the suits by concluding that judicial review of proclamations under the Antiquities Act is limited \"to the face of the Proclamation,\" thus prohibiting courts from reviewing \"the President's determinations and factual findings.\" The D.C. Circuit, however, declined to \"decide the availability or scope of judicial review of a Presidential Proclamation\u00a0.\u00a0.\u00a0. under the Antiquities Act,\" based on its conclusion that the plaintiffs had failed to allege facts which could plausibly show noncompliance with the Antiquities Act. At the same time, the court of appeals suggested that judicial review of an Antiquities Act proclamation would be appropriate to the extent of ensuring that the President acted within his statutory authority. Relying on Cappaert and Cameron , the D.C. Circuit explained \"that [judicial] review is available to ensure that the Proclamations are consistent with constitutional principles and that the President has not exceeded his statutory authority.\"", "Though the D.C. Circuit in Mountain States and Tulare did not purport to definitively resolve the scope of judicial review of a monument proclamation, a federal district court in Utah Association of Counties v. Bush did. This case involved a challenge to President Clinton's designation of the Grand Staircase-Escalante monument, with the plaintiffs taking the view that the President exceeded his authority under the Antiquities Act by \"fail[ing] to designate the requisite objects of historic or scientific value\" and \"not limit[ing] the size of the monument to the 'smallest area' necessary to preserve the objects.\" The district court, however, declined to engage in an in-depth review of these claims, concluding instead that because the Antiquities Act commits the creation of monuments to the President's discretion, judicial review of those proclamations is limited to \"ascertaining that the President in fact invoked his powers under the Antiquities Act\"\u2014that is, that he \"considered the principles that Congress required him to consider.\" Under this deferential standard, the court rejected the plaintiffs' claims because it was \"evident from the language of the Proclamation\" that President Clinton had \"considered the principles that Congress required him to consider.\"", "The most recent case to address the scope of presidential power under the Antiquities Act involved a challenge to President Obama's establishment of the 4,913-square mile Northeast Canyons and Seamounts Marine National Monument. As its name suggests, this monument is composed of \"underwater canyons and mountains, and the ecosystems around them,\" sitting approximately 130 miles off of the coast of Massachusetts in an area of water known as the Exclusive Economic Zone. Those challenging the designation argued that the term \"lands\" in the Antiquities Act does not encompass submerged lands and, even if it does, that the amount of \"land\" reserved was not the smallest necessary for preserving the designated objects. In addition, the plaintiffs contended that the monument proclamation was invalid because the reserved waters were not completely controlled by the United States, thus violating the requirement in the Antiquities Act that reserved lands be \"owned or controlled by the Federal Government.\"", "The district court began with the scope of its review. Relying on the Supreme Court and D.C. Circuit cases discussed above, the court distinguished between two types of challenges to a presidential proclamation. The first category involves those \"that can be judged on the face of the proclamation,\" such as the argument in Cappaert that only archaeological sites qualify as objects of historic or scientific interest under the act. When a challenge is premised on a disputed question of law, judicial review is conducted without deference. The district court distinguished this category of challenge from those \"requir[ing] some factual development,\" such as the argument raised in Mountain States and Tulare that the amount of land reserved was not \"the smallest area compatible with the proper care and management of the objects to be protected.\" Though recognizing that \"[t]he availability of judicial review of this category of claims\u00a0.\u00a0.\u00a0. stands on shakier ground,\" the court relied on Mountain States and Tulare to conclude that a plaintiff asserting such a challenge must at least \"offer plausible and detailed factual allegations that the President acted beyond the boundaries of authority that Congress set.\" ", "With this framework, the district court rejected the plaintiffs' challenges. As to their first argument, the court relied on Capp a e rt and California to conclude that the Antiquities Act authorizes the President to reserve submerged lands and the water associated with them. As to the second argument, the district court recognized that it fell within the second category of challenges, thus potentially limiting the scope of the court's review. But, as in Mountain States and Tulare , the district court concluded that it did not need to resolve the scope of judicial review because it found that the plaintiffs failed to offer specific, nonconclusory factual allegations \"establishing a problem with [the monument's] boundaries.\" ", "The court also rejected the plaintiffs' argument that President Obama lacked authority under the Antiquities Act to establish the monument because the United States did not have \"complete control\" over the Exclusive Economic Zone. The court first concluded that the Antiquities Act does not require that the United States have complete control over the relevant area, only that the United States \"'exercise directing or restraining influence.'\" Applying this definition, the court concluded that the United States' \"broad sovereign authority\" to regulate and manage the Exclusive Economic Zone for conservation and other purposes\u2014a level of influence unrivaled by any other sovereign\u2014established the federal control necessary under the Antiquities Act. "], "subsections": []}, {"section_title": "Conclusion", "paragraphs": ["In summary, Courts have consistently interpreted the Antiquities Act as giving the President broad authority to protect objects of historic and scientific interest and to determine the amount of lands needed for their preservation. Despite repeated arguments to the contrary, courts have uniformly concluded that the Antiquities Act is not limited to the protection of prehistoric ruins and other man-made structures, but encompasses naturally occurring objects of scientific interest, including bodies of water and submerged lands. And, though it has received less judicial attention, at least one court has held that the United States need not have absolute control over the lands (or waters) at issue in order for them to fall within the ambit of the Antiquities Act. However, the scope of judicial review of a monument proclamation has not been settled. Though courts appear to acknowledge that review of a presidential proclamation is deferential, particularly with respect to factual and discretionary determinations, they have not definitively decided what amount of review is appropriate. "], "subsections": []}]}]}, {"section_title": "Presidential Authority to Diminish Monuments", "paragraphs": ["The President has clear authority under the Antiquities Act to establish national monuments. Less clear, however, is the President's authority to diminish a previously established monument or to abolish a monument altogether. As already discussed, several Presidents in the early and mid-20th century reduced the size of existing monuments, but none of those modifications was challenged in court, thus leaving the lawfulness of that practice unresolved.", "That may soon change. On December 4, 2017, President Trump issued two proclamations modifying the Grand Staircase-Escalante National Monument (established by President Clinton) and the Bears Ears National Monument (established by President Obama). This was the first time since President Kennedy that a President has diminished a national monument. President Trump's proclamations explained that each of the monuments contained objects that were \"not\u00a0.\u00a0.\u00a0. of any unique or distinctive scientific or historic significance\" and were not in danger of being damaged or destroyed. The proclamations explained that other federal laws enacted after the Antiquities Act's passage protected many of these objects, such as the Archaeological Resources Protection Act and the Endangered Species Act. On these grounds, the proclamations concluded that the lands reserved for these monuments were \"greater than the smallest area compatible with the protection of the objects for which the lands were reserved.\" All said, President Trump's proclamations reduced the Grand Staircase-Escalante monument from 1.7 million acres to 1 million acres and the Bears Ears monument from 1.35 million acres to 228,784 million acres.", "President Trump's proclamations attracted significant attention, leading many scholars to take a renewed look at presidential authority under the Antiquities Act. These proclamations have also been challenged in court, and those cases are now pending in the U.S. District Court for the District of Columbia.", "As discussed below, the plaintiffs in these cases have raised multiple arguments to oppose the proclamations. First, the plaintiffs argue that the Antiquities Act does not authorize the President to abolish or diminish monuments once established. Second, the plaintiffs contend that, absent statutory authorization, President Trump's proclamations exceed his authority under the Constitution and conflict with Congress's constitutional power to regulate public lands. Third, and finally, some of the plaintiffs have brought a claim under the APA against the Secretary of the Interior and other federal officials, arguing that because President Trump's proclamations are unauthorized, these officials will be acting unlawfully in failing to abide by the original proclamations issued by President Clinton and President Obama. The United States contests the plaintiffs' standing to sue, contends that judicial review of Presidential proclamations is limited in scope, and argues that the plaintiffs' arguments are meritless in any event. The remainder of this report discusses the central arguments made by the plaintiffs and the United States in this litigation. "], "subsections": [{"section_title": "Text and Implied Authority", "paragraphs": ["The parties advance competing interpretations of the Antiquities Act. The plaintiffs contend that the President's authority under the act is limited to the express grants of authority in the text itself, namely, the power to \"declare\" monuments and to \"reserve\" surrounding lands\u2014neither of which includes or implies the distinct power to diminish or revoke a monument. \"In ordinary parlance,\" the plaintiffs argue, \"the phrases to 'declare national monuments' and to 'revoke' or 'shrink' national monuments are polar opposites[.]\" Under this reading, the Antiquities Act authorizes the President to create national monuments in order to provide for the expeditious protection of objects of historical and scientific interest, but leaves with Congress the authority to modify monuments once established. ", "The plaintiffs point to a number of contemporaneous statutes to support this reading, principally the Forest Service Organic Act of 1897, the Reclamation Act of 1902, and the Pickett Act. Because these statutes contain express grants of authority to the President to modify or otherwise alter an initial reservation of public lands, the plaintiffs argue that the absence of similar language in the Antiquities Act implies the absence of similar authority. In particular, the plaintiffs note that the Forest Reserve Act of 1891 authorized the President to \"set apart and reserve\u00a0.\u00a0.\u00a0. public land bearing forests\" and to \"declare the establishment of such reservations and the limits thereof,\" but did not also include authorization to revoke or modify a reservation once made. After President Cleveland and several Members of Congress expressed the view that the Forest Reserve Act did not authorize the President to alter an existing reservation, Congress passed the Forest Service Organic Act to fill that gap. That law expressly authorized the President to \"revoke, modify, or suspend\" existing forest reservations in order to \"remove any doubt\" regarding the President's authority to do so. Having just gone to the trouble of expressly authorizing the President to modify a prior land reservation, the plaintiffs argue that it \"belies logic\" that Congress would have intended the Antiquities Act to confer this authority sub silentio . And the plaintiffs highlight the fact that Representative Lacey\u2014one of the primary supporters of the Antiquities Act\u2014stated that the Forest Reserve Act did not authorize the President to alter existing reservations. The plaintiffs also point to the Reclamation Act of 1902\u2014authorizing the Secretary of the Interior to \"withdraw\u00a0.\u00a0.\u00a0. lands\" and \"restore to public entry any of the lands so withdrawn\" \u2014and the Pickett Act of 1910\u2014providing that lands withdrawn by the President will remain reserved \"until revoked by him or by an Act of Congress\" \u2014to show that when Congress intends to authorize the President to alter a reservation of federal land, it confers that authority expressly. Finally, in addition to these laws, the plaintiffs identify other \"near-contemporaneous statutes that expressly include language regarding modification or revocation of withdrawn land.\"", "By contrast, the United States argues that the Antiquities Act does authorize the President to modify a previously established monument. The United States places significant weight on the act's requirement that the area of land reserved \"shall be confined to the smallest area compatible\" for preserving the monument. That language, the United States argues, imposes a continuing obligation that cannot be met without the accompanying authority to reduce a monument when it is later determined that excess lands were included in the reservation. Moreover, the United States asserts that the President possesses authority to diminish existing monuments\u2014even absent express statutory authorization\u2014based on \"the general principle that reconsideration 'is inherent in the power to decide.'\" According to the United States, \"[n]umerous statutes authorize various Executive Branch officers to regulate, administer, and make decisions, without expressly saying that those decisions can be repealed or modified.\" The Antiquities Act is, in the United States' view, no exception.", "Finally, the United States contests the plaintiffs' argument that contemporaneous public land laws imply the absence of modification authority in the Antiquities Act. With respect to the Pickett Act, the United States notes that this law provided that \"withdrawals or reservations shall remain in force until revoked by [the President] or by an act of Congress .\" Given that Congress has authority under the Property Clause of the Constitution to dispose of federal law as it sees fit, the United States argues that this language must be read as simply acknowledging existing authority vested in both Congress and the President. As for the Forest Service Organic Act, the United States contends that the legislative record shows mixed opinions among Members of Congress on whether the President had authority under that law to modify existing reservations. Thus, the United States contends that this law's inclusion of language authorizing the President to alter reservations does not reflect a congressional consensus that the President did not have this power already, but merely shows that Congress took a belt-and-suspenders approach in order to (in the words of the statute) \"remove any doubt\" on this question."], "subsections": []}, {"section_title": "Past Executive and Legislative Action", "paragraphs": ["Noting that historical practice may inform a court's understanding of executive power, the United States argues that the long-standing practice of executive monument modification and congressional acquiescence in this practice shows that the President has authority under the Antiquities Act to modify existing monuments. ", "The United States first points to the fact that past Presidents have reduced the size of national monuments a total of 18 times, including President Taft's reduction of the Petrified Forest National Monument \"[o]nly five years after passage of the Antiquities Act.\" Though Congress was no doubt aware of these modifications, the United States observes that Congress never passed legislation disapproving this practice, even as Congress did amend the Antiquities Act after President Franklin Roosevelt's creation of the Jackson Hole National Monument to prohibit the establishment of future monuments in Wyoming.", "The United States also relies on various legal opinions from the executive branch to bolster its argument that Congress has acquiesced in an executive assertion of authority to diminish monuments. In a series of opinions issued in 1915, 1935, and 1947, the Department of the Interior concluded that the President has authority under the Antiquities Act to reduce the size of existing monuments. These opinions identified two sources for that power. First, the Department of the Interior concluded that the President had an implied power to undo reservations or withdrawals of public land. For this, the Department of the Interior relied on the Supreme Court's 1915 decision in United States v. Midwest Oil , which held that Congress had implicitly delegated authority to the President to withdraw or reserve lands from public use by acquiescing in the Executive's \"long-continued practice\" of making such withdrawals and reservations. From this principle, the Department of the Interior concluded that the President had acquired an implied power to diminish the size of national monuments through congressional acquiescence in this practice, as well as the Executive's practice of reducing Indian reservations established by executive order pursuant to statutes that, like the Antiquities Act, did not expressly authorize modification. Second, in opinions from 1935 and 1947, the Department of the Interior argued for presidential modification authority based on the language in the Antiquities Act requiring that lands reserved be \"the smallest area compatible\" for the preservation of the designated objects.", "The plaintiffs contest the United States' reliance on congressional and executive practice. While noting that \"past practice does not, by itself, create power,\" the plaintiffs further argue that history does not show the \"systematic, unbroken, executive practice\" \"long pursued to the knowledge of Congress and never before questioned\" that is necessary to support the United States' acquiescence argument. The plaintiffs note that even during the time when several Presidents were reducing monuments, various departments within the executive branch issued opinions concluding that the President does not have implied authority to undo a reservation of land. Thus, in a 1924 opinion, the Department of the Interior concluded that the President did not have authority to modify a monument because a monument once established \"becomes a fixed reservation subject to restoration to the public domain only by legislative act.\" This view was reiterated in a 1932 opinion from the Department of the Interior.", "The U.S. Attorney General also issued opinions on this question, though the one opinion to address the scope of presidential authority under the Antiquities Act left the issue of monument modification unresolved. In a 1938 opinion, Attorney General Homer Cummings considered whether the President has authority under the Antiquities Act to abolish the Castle Pinckney National Monument. Noting that Presidents had \"from time to time\u00a0.\u00a0.\u00a0. diminished the area of national monuments\u00a0.\u00a0.\u00a0. by removing or excluding lands therefrom,\" the Attorney General concluded that \"[the President's] power so to confine that area\" does not include \"the power to abolish a monument entirely.\" In support of this conclusion, the 1938 opinion relied on a previous Attorney General opinion from 1862, which concluded that the President lacked implied authority to undo a military reservation made by executive order where the statute authorizing the initial reservation did not also authorize its reversal. \"The grant of power to execute a trust, even discretionally,\" the Attorney General argued, \"by no means implies the further power to undo it when it has been completed.\"", "Both the United States and the plaintiffs maintain that the 1938 Attorney General opinion supports their position. Though stating that it agrees with the 1938 Attorney General opinion with respect to monument abolition , the United States asserts that this opinion supports the existence of authority to modify monuments through its acknowledgment that prior Presidents had done so and through its reliance on the Antiquities Act's requirement that reservations be limited to the smallest area necessary. The plaintiffs, by contrast, argue that the same logic that led the Attorney General to conclude that the Antiquities Act does not confer authority to abolish monuments shows that the President also lacks authority to modify monuments.", "The plaintiffs also argue that the United States' claim of an unbroken assertion of, and congressional acquiescence in, executive authority to diminish national monuments is undermined by the numerous instances in which the executive branch itself sought statutory authorization to reduce existing monuments\u2014requests that Congress uniformly denied. For example, the Secretary of the Interior in 1925\u2014the year after that department issued an opinion disclaiming presidential modification authority \u2014sent a letter to Congress requesting that it pass legislation to provide this authorization. Though legislation was introduced in both chambers to accomplish this end, neither became law. In fact, only a few months earlier the Department of the Interior had asked Congress to reduce the Casa Grande Ruins National Monument and at the same time grant the President authority \"in his discretion to eliminate lands from national monuments by proclamation.\" But while Congress did pass legislation reducing the Casa Grande Ruins National Monument, it did so only after removing the language that would have given general modification authority to the President.", "Finally, the plaintiffs rely on the enactment of the Federal Land Policy and Management Act of 1976 (FLPMA) to show that the President lacks authority to modify national monuments. Congress passed FLPMA to modernize and streamline the management of federal lands. In so doing, FLPMA repealed 29 separate statutes authorizing the President to make withdrawals of federal land and simultaneously \"repealed\" the Supreme Court's decision in United States v. Midwest Oil Co. \u2014one of the bases relied on by the Department of the Interior to find an implied presidential authority to diminish national monuments. At the same time, a provision in FLPMA prohibits \"[t]he Secretary\" from \"modify[ing] or revok[ing] any withdrawal creating national monuments under [the Antiquities Act],\" while leaving the act otherwise unchanged. While acknowledging that FLPMA's prohibition is directed to the \"Secretary\"\u2014not the President\u2014the plaintiffs point to the House report accompanying the legislation, which stated that FLPMA \"reserve[s] to the Congress the authority to modify and revoke withdrawals for national monuments created under the Antiquities Act\" \u2014suggesting an intent to consolidate all withdrawal authority in Congress. The United States responds that FLPMA's use of the term \"Secretary,\" rather than \"President,\" is controlling, and that the legislative history on which the plaintiffs rely cannot overcome the plain statutory language."], "subsections": []}, {"section_title": "Scope of Judicial Review", "paragraphs": ["Assuming that the President has authority to diminish an existing monument, the parties dispute the scope of judicial review of a presidential proclamation that purports to exercise that authority. As previously discussed, the D.C. Circuit in Mountain States and Tulare , and the district court in Massachusetts Lobstermen's Association , did not definitively resolve the scope of judicial review of a monument designation, while the district court in Utah Association of Counties concluded that judicial review was limited to assessing whether the President considered the principles specified in the Antiquities Act. Both parties rely on these cases to support their positions. ", "The United States contends that judicial review of Presidential proclamations is \"extremely limited\" to \"addressing\u00a0.\u00a0.\u00a0. whether the President's decision to modify the Monument is authorized by the Antiquities Act\"\u2014that is, \"whether the President, on the face of the Proclamation, exercised his authority in accordance with [the] act's standard.\" On this view, if a proclamation invokes the standards specified in the Antiquities Act in the course of diminishing a monument, a court has no authority to evaluate the factual determinations underlying the proclamation or to review the manner in which the President chose to exercise his discretion in reducing the monument. The United States supports its position by noting that a President's discretionary decisions\u2014unlike agency action\u2014are not subject to \"arbitrary and capricious\" or \"abuse of discretion\" review under the APA. Thus, the United States asserts that President Trump's proclamations must be upheld because, on their face, they \"'advert[] to the statutory standard' for designating monument objects and reserving monument lands.\" ", "The plaintiffs, by contrast, contend that courts are not limited to assessing whether a proclamation purports to apply the Antiquities Act, but are authorized to conduct a more searching inquiry to ensure that the President \"'has not exceeded his statutory authority.'\" On this view, courts have authority to review the factual determinations and rationale underlying a proclamation that diminishes a national monument to ensure that the President did not abuse his discretion in modifying the monument's boundaries. Applying this more searching inquiry, the plaintiffs contend that President Trump's proclamations\u2014though purporting to only \"modify\" the Grand Staircase-Escalante and Bears Ears monuments\u2014effected \"the wholesale dismantling\" of these monuments, thus constituting an abuse of any presidential authority that might exist to diminish a national monument. Further, as required by Mountain States and Tulare , the plaintiffs identify particular objects that, in their view, should not have been removed from the boundaries of these monuments. At least one plaintiff has also argued that President Trump's proclamations were an abuse of discretion because they were \"improperly motivated by potential energy production and resource extraction,\" rather than \"the protection and preservation of sensitive resources.\"", "Some plaintiffs also note that President Trump's proclamations not only reduced the amount of land reserved for these monuments, but also removed certain objects from these monuments. They argue that because the \"objects\" selected for preservation under the Antiquities Act are the \"monuments\" under the act, the exclusion of any previously designated object is, in effect, a revocation of a monument \u2014a power the Executive has disclaimed. Thus, these plaintiffs contend that President Trump's proclamations surpassed any authority that might exist under the Antiquities Act to \"diminish\" or \"modify\" the amount of land included in a monument designation."], "subsections": []}]}, {"section_title": "Considerations for Congress", "paragraphs": ["There are viable arguments on both sides of the debate over the President's authority to diminish monuments. Both parties purport to rely on the text of the Antiquities Act, and both have marshalled historical sources and practice to support their respective interpretations. As one scholar has concluded, \"[r]isk is present all around,\" as \"the legal authorities are mixed and none are clearly controlling.\"", "However, though the President's authority to diminish monuments may reasonably be questioned, it appears clear that Congress has authority to codify or repeal a presidential proclamation. The Property Clause of the Constitution gives Congress the \"[p]ower to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States.\" The Supreme Court has long held that \"the power over the public land thus entrusted to Congress is without limitations.\" And Congress has exercised this authority on several occasions in response to presidential proclamations issued under the Antiquities Act, whether by incorporating monuments (or portions thereof) into the National Park System, transferring certain monuments to state control, or by abolishing monuments outright.", "Legislation was introduced in the 115th and 116th Congresses in response to President Trump's proclamations diminishing the Grand Staircase-Escalante and Bears Ears monuments. Some proposals would have overridden President Trump's proclamations and expanded the monuments to their original (or greater) size. Other Members of Congress have proposed amending the Antiquities Act to limit the President's authority to declare national monuments and to bar the President from diminishing existing monuments, except in specified circumstances. At present, none of these proposals has passed either chamber of Congress. In the absence of congressional action, the President's authority to diminish national monuments will ultimately be decided by the courts."], "subsections": []}]}}
{"id": "R43325", "title": "The Renewable Fuel Standard (RFS): An Overview", "released_date": "2019-01-23T00:00:00", "summary": ["The Renewable Fuel Standard (RFS) requires U.S. transportation fuel to contain a minimum volume of renewable fuel. The RFS\u2014established by the Energy Policy Act of 2005 (P.L. 109-58; EPAct05) and expanded in 2007 by the Energy Independence and Security Act (P.L. 110-140; EISA)\u2014began with 4 billion gallons of renewable fuel in 2006 and aims to ascend to 36 billion gallons in 2022. The Environmental Protection Agency (EPA) has statutory authority to determine the volume amounts after 2022.", "The total renewable fuel statutory target consists of both conventional biofuel and advanced biofuel. Since 2014, the total renewable fuel statutory target has not been met, with the advanced biofuel portion falling below the statutory target by a large margin since 2015. Going forward, it is unlikely that the United States will meet the total renewable fuel target as outlined in statute.", "EPA administers the RFS and is responsible for several tasks. For instance, within statutory criteria EPA evaluates which renewable fuels are eligible for the RFS program. Also, EPA establishes the amount of renewable fuel that will be required for the coming year based on fuel supply and other conditions although waiver authority in the statute allows the EPA Administrator to reduce the statutory volumes if necessary. Further, the statute requires that the EPA Administrator \"reset\" the RFS\u2014whereby the fuel volumes required for future years are modified by the Administrator if certain conditions are met. EPA monitors compliance for the RFS using a system of tradable credits referred to as renewable identification numbers (RINs).", "Congress has expressed ongoing interest in the RFS, particularly as the mandate relates to other legislative efforts (e.g., Reid Vapor Pressure requirements for ethanol-gasoline fuel blends containing greater than 10% ethanol, a national octane standard) and about oversight of the RIN market, among other things. Some assert it is time to amend or repeal the RFS, while others contend the best course of action is to maintain the status quo. For instance, some Members contend the RFS hurts consumers by creating an artificial market for ethanol. Others see ethanol as a part of a competitive energy strategy.", "Congress may also express interest in how the EPA Administrator applies the RFS \"reset\" authority. EPA reports that in early 2019 it will issue a rulemaking that proposes to modify\u2014or \"reset\"\u2014the cellulosic biofuel, advanced biofuel, and total renewable fuel volume targets for the years 2020-2022."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Established by Congress as an amendment to the Clean Air Act, the Renewable Fuel Standard (RFS) mandates that U.S. transportation fuels contain a minimum volume of biofuel. The mandated minimum volume increases annually and must be met using both conventional biofuel (e.g., corn starch ethanol) and advanced biofuel (e.g., cellulosic ethanol). For a renewable fuel to be applied toward the mandate, it must be used for certain purposes (i.e., transportation fuel, jet fuel, or heating oil) and meet certain environmental and biomass feedstock criteria. ", "A variety of factors, such as infrastructure, technology, and limited federal assistance, have led to challenges in meeting the total volume requirement established by Congress. These challenges have included a lack of cellulosic biofuel production and delays by the U.S. Environmental Protection Agency (EPA) in approving fuel pathways. Further, it is not clear how changes in gasoline consumption in response to fluctuating crude oil and gasoline prices impact the biofuel or conventional fuel industries. It is also uncertain how the program will fare once EPA implements the \"reset\" provision of the statute, which allows the agency to modify the volumes required for future years (starting in 2016) if certain conditions are met. In addition, some stakeholders have expressed concern about the transparency of the market wherein credits are traded to demonstrate compliance with the mandate. Lastly, there is concern by some biofuel producers that the Trump Administration's issuance of multiple small refinery exemptions has adversely affected, or will adversely affect, biofuel demand. Small refiners may petition the EPA Administrator for an exemption from the RFS mandate if they can prove disproportionate economic hardship.", "There are, however, two fuel categories that have consistently met their statutory targets: conventional biofuel and biomass-based diesel. Also, since 2014, two advanced biofuel pathways\u2014renewable compressed natural gas and renewable liquefied natural gas\u2014have constituted the majority of the cellulosic biofuel volume target established by EPA.", "Challenges in implementing the RFS have led to scrutiny of the program in Congress and to litigation about EPA's regulations. Largely due to concerns about the implementation and feasibility of the RFS, some Members of Congress have expressed their perspectives on EPA's proposed and final rules as well as EPA's implementation of the program. They also have questioned whether to amend or repeal the RFS or whether to maintain the status quo. This report provides a basic description of the RFS, including some of the widely discussed policy issues related to it. "], "subsections": []}, {"section_title": "The Statute", "paragraphs": ["The Renewable Fuel Standard (RFS) was established by the Energy Policy Act of 2005 ( P.L. 109-58 ; EPAct05) and expanded in 2007 by the Energy Independence and Security Act ( P.L. 110-140 ; EISA). The RFS mandate requires that transportation fuels sold or introduced into commerce in the United States contain an increasing volume of a predetermined suite of renewable fuels. The statute required 4.0 billion gallons of renewable fuel in 2006, ascending to 36.0 billion gallons required in 2022, with EPA determining the volume amounts after 2022 in future rulemakings. The statute centers on four renewable fuel categories\u2014conventional biofuel, advanced biofuel, cellulosic biofuel, and biomass-based diesel\u2014each with its own target volume. ", "The total renewable fuel requirement under the RFS is met with the combination of fuels from two renewable fuel categories: conventional biofuel and advanced biofuel. The requirement for advanced biofuel, in general, can be met with the combination of three types of advanced biofuel: cellulosic biofuel, biomass-based diesel, and other advanced biofuels. To date, the total annual volumes required have been met mostly with conventional biofuel (e.g., corn starch ethanol). Beginning in 2015, the mandate capped the conventional biofuel volume amounts while increasing the requirement for advanced biofuels. For instance, the statutory RFS total advanced biofuel requirement increases over time from approximately 7% of the RFS in 2010 to 58% of the RFS in 2022. ", "A key part of the statutory definition of each fuel category is whether the fuel achieves certain greenhouse gas (GHG) reductions relative to gasoline and diesel fuel. Each fuel is assigned a lifecycle GHG emission threshold (in proportion to baseline lifecycle GHG emissions for gasoline and diesel). For example, a fuel must achieve at least a 50% GHG reduction to be considered an advanced biofuel , at least a 60% reduction to be considered a cellulosic biofuel , and at least a 50% reduction to be considered biomass-based diesel . Similarly, biofuel from new facilities\u2014those built after enactment of the 2007 law\u2014must achieve at least a 20% GHG reduction to qualify as a conventional renewable fuel."], "subsections": []}, {"section_title": "Statutory Compliance", "paragraphs": ["EPA regulates compliance with the RFS using a tradable credit system. Obligated parties (generally, refiners) submit credits\u2014called renewable identification numbers (RINs)\u2014to EPA that equal the number of gallons in their annual obligation. This annual obligation, referred to as the renewable volume obligation (RVO), is the obligated party's total gasoline and diesel sales multiplied by the annual renewable fuel percentage standards announced by EPA. RINs are valid for use in the year they are generated and the following year. Obligated parties may carry a deficit from one year to the next, but in the year following the deficit, the obligated party must meet compliance for that year's renewable fuel volume requirement and purchase or generate enough credits to satisfy the deficit from the previous year. RINs may be used by the party that generates them or they may be traded with other parties. The EPA Moderated Transaction System (EMTS) is used to register RIN transactions. ", "Different biofuels are not treated equally within the RFS. The categories are nested within each other, such that some fuels qualify for multiple categories (e.g., cellulosic ethanol), while others (mainly corn starch ethanol) may only be used to meet the overall RFS but not the advanced category or its nested subcategories. For example, a gallon of cellulosic biofuel may be used to meet the cellulosic biofuel mandate, the advanced biofuel mandate, and the total renewable fuel mandate, possibly making it a more highly valued fuel.", "In addition, some biofuels generate more RINs per volume than others because of the difference in the fuel's energy content. This difference is accounted for by a metric referred to as the equivalence value (EV) of the biofuel. The EV of a renewable fuel represents the number of gallons that can be claimed for compliance purposes for every physical gallon of renewable fuel used, and it is generally the ratio of the energy content of a gallon of the fuel to a gallon of ethanol. For example, because biodiesel has an EV of 1.5 when being used as an advanced biofuel, 1,000 physical gallons of biodiesel would equal 1,500 RIN gallons of advanced biofuels. "], "subsections": []}, {"section_title": "The 2019 Final Rule", "paragraphs": ["EPA released the final rule for the RFS for 2019 on November 30, 2018. The rule calls for 19.92 billion gallons of total renewable fuel for 2019\u2014a 1% increase from the 19.29 billion gallons required in 2018 (see Table 1 ). The conventional biofuel volume requirement remains at 15.00 billion gallons. The volume requirements set by EPA for 2019 for total renewable fuel, advanced biofuel, and cellulosic biofuel are all less than the volumes called for in statute but greater than the previous year's volumes\u2014an annual occurrence that started in 2014. EPA used the cellulosic waiver authority to reduce the statutory volumes. EPA reduced the statutory targets for both advanced biofuel and total renewable by the same amount as the reduction for the cellulosic biofuel (i.e., 8.08 billion gallons). EPA reports that the advanced biofuel statutory target of 13.0 billion gallons \"cannot be reached in 2019 \u2026 primarily due to the expected continued shortfall in cellulosic biofuel.\" EPA estimates there are 2.59 billion carryover RINs available. In its response to comments regarding the rule, EPA mentions a forthcoming reset rulemaking.", "EPA set the biomass-based diesel 2020 volume requirement at 2.43 billion gallons. Biomass-based diesel is the predominant biofuel used to satisfy the advanced biofuel portion of the mandate. Previously, it has been used to backfill the overall advanced biofuel requirement if another advanced biofuel fell short (e.g., cellulosic biofuel). EPA reports \"the advanced biofuel volume requirement is driving the production and use of biodiesel and renewable diesel volumes over and above volumes required through the separate BBD [biomass-based diesel] standard\" and that the 2020 volume requirement \"provides sufficient incentive to producers of 'other' advanced biofuels.\" EPA acknowledges that it took into consideration the unavailability of the biodiesel tax credit for 2019, the tariffs on imports of biodiesel from Argentina and Indonesia, the tariffs on soybeans exported to China, and more in its assessment of the biodiesel requirement for 2020."], "subsections": []}, {"section_title": "RFS Implementation Issues", "paragraphs": ["Implementation of the RFS has been complex, and compliance with some of its parts has been challenging, according to some stakeholders. This section briefly explains some of the general concerns and challenges with implementing the RFS."], "subsections": [{"section_title": "Administering Agency", "paragraphs": ["EPA administers the RFS. This responsibility includes evaluating renewable fuel pathways eligible for the RFS. In addition, EPA is required to evaluate the ability of the biofuel industry to produce enough fuel to meet the annual volume standard, release an annual volume standard based on its research findings, and ensure that annual compliance by obligated parties is met. All of the above must be completed annually, taking into consideration comments from other government agencies, the public, and, recently, court decisions. These responsibilities could be viewed as an addition to EPA's regulatory workload and have required EPA to develop new capabilities to carry them out. ", "For several years following the 2010 issuance of the amended RFS final rule, EPA has had difficulty projecting certain volume requirements (e.g., cellulosic biofuels) which have led EPA to use its waiver authority to set annual volume requirements for cellulosic biofuel, total advanced biofuel, and total renewable fuel different from what was stated in the statute. Legal challenges have been brought against the EPA regarding some of these annual fuel volume projections. For instance, the American Petroleum Institute objected to EPA's 2012 cellulosic biofuel production projection, among other things, and challenged it in court. The federal court vacated the 2012 cellulosic biofuel standard and provided principles for EPA to apply to future annual projections. Likewise, Americans for Clean Energy and other petitioners challenged various aspects of the final rule that set the volume requirements and projections for 2014-2016 and 2017 for biomass-based diesel, including EPA's interpretation of \"inadequate domestic supply\" in exercising its general waiver authority to reduce the total volume requirements. The D.C. Circuit Court vacated EPA's 2016 total renewable fuel volume requirement and remanded the 2015 final rule to EPA for reconsideration consistent with the court's decision.", "In some instances the timing of EPA's RFS regulatory actions, such as the annual announcement of the renewable fuel volume requirements, has not met statutory deadlines. The most recent final rules, including the 2019 final rule, adhere to the statutory schedule. However, some of the earlier final rules did not meet the statutory deadline. A lack of timely rulemaking combined with inaccurate volume projections could affect private investment, according to some advanced biofuel producers. Regardless, they lead to uncertainty in compliance for obligated parties. The amount of time it takes the agency to approve new fuel pathways and register new facilities has been raised in public comments to proposed RFS rules. Slow approval could stifle investment and production of new fuels. Further, prolonged processing time for some program enhancement rules\u2014such as the Proposed Renewables Enhancement and Growth Support Rule (REGS rule)\u2014may impede the growth of the program.", "Lastly, the final rule for 2014 through 2016 triggered the \"reset\" provision of the RFS for the advanced biofuel and cellulosic biofuel categories. The 2019 final rule triggered the \"reset\" provision for total renewable fuel. Thus, three of the four renewable fuel categories identified in statute are subject to being \"reset\" by the EPA Administrator. The reset provision gives the EPA Administrator authority to adjust the applicable volumes of the RFS for future years starting in 2016 if certain conditions are met. How EPA implements this provision will affect renewable fuel production and compliance with the overall program. EPA reports that it will issue a rulemaking in early 2019 that proposes to reset the cellulosic biofuel, advanced biofuel, and total renewable fuel volume targets for the years 2020-2022."], "subsections": []}, {"section_title": "Qualifying Biofuels", "paragraphs": ["As noted above, there are a number of nested categories within the RFS; a fuel may qualify as a biofuel for one or more portions of the mandate. Difficulty by some advanced biofuel producers in understanding which advanced biofuels qualify for the RFS can lead to challenges in determining how compliance is being met. ", "Not all fuels from a renewable source are eligible under the RFS. The RFS operates as a biofuel standard, with priority assigned to liquid transportation fuels from biomass feedstocks. Other renewable sources (e.g., wind) do not qualify. Before a fuel can generate RFS RINs, however, that fuel pathway must be approved by EPA; according to advanced biofuel producers that process can take a considerable amount of time for some fuels.", "Lastly, some may view the RFS as a biofuel production mandate. The statutory language does not mandate the production of biofuels; rather, it mandates the use of biofuel. However, it could be argued that it is difficult to use a fuel that is not being produced and that the RFS therefore indirectly creates a demand for certain biofuels and thus stimulates their production. "], "subsections": []}, {"section_title": "Cellulosic Biofuel Production", "paragraphs": ["By statute, cellulosic biofuel is targeted to comprise approximately 44% of the total renewable fuel mandate in 2022. However, the annual cellulosic biofuel production volume established by Congress is not being met. Actual cellulosic biofuel production volumes (e.g., cellulosic ethanol) are below the expectations set when the law was passed. For instance, in 2019, the statute requires 8.5 billion gallons of cellulosic biofuel. EPA set the 2019 target volume at 418 million gallons for 2019. This shortfall is due to several factors, including lack of private investment, technology setbacks, and uneven support from the federal government. These factors, coupled with the fact that annual volumes in the statute were established when market conditions for raising investment capital for new biofuel technologies were more favorable, may suggest unrealistic targets for some advanced biofuels for the near future. These production limitations have raised questions about whether the statutory cellulosic biofuel volumes are attainable."], "subsections": []}, {"section_title": "Blend Wall", "paragraphs": ["The \"blend wall\"\u2014the upper limit to the total amount of ethanol that can be blended into U.S. gasoline and still maintain automobile performance and comply with the Clean Air Act\u2014has been viewed by many to be in direct conflict with the biofuel volumes mandated in the RFS. Thus far, the largest volume being met under the RFS is for the nonadvanced (conventional) biofuel segment of the mandate, met mainly with corn starch ethanol blended into gasoline. Due to a variety of factors, ethanol content in gasoline is generally limited to 10% (E10). With a relatively fixed supply of gasoline, the amount of ethanol that can be supplied this way is also limited. If the ethanol content of gasoline for the majority of vehicles remains at 10%, and given current fuel consumption rates, the conventional biofuel portion of the RFS is requiring slightly more ethanol than can technically be blended into gasoline. ", "While the blend wall remains a concern, it may not be as significant an impediment to immediate fuel consumption as previously considered by some. Indeed, EPA reports \"the E10 blendwall is not the barrier that some stakeholders believe it to be.\" Had the RFS mandates\u2014for both conventional biofuel and advanced biofuel\u2014come to fruition in the form of mostly ethanol, or had fuel consumption decreased further, the blend wall potentially could have led to more discussion about the volume mandates. However, primarily due to the lack of cellulosic biofuel production, more time has been granted to address the blend wall and the scheduled levels of biofuels in the RFS. ", "Some possible approaches could alleviate blend wall concerns in the near term. One option suggested by some is to blend higher levels of ethanol into conventional gasoline. In 2010 EPA granted a Clean Air Act waiver that allows gasoline to contain up to 15% ethanol for use in model year 2001 and newer light-duty motor vehicles. However, limited demand, infrastructure and automobile warranty concerns, and the lack of a waiver to sell E15 during the summer months, have precluded widespread offering and purchase of E15, gasoline blended with 10.5% to 15% ethanol. Widespread use of E15 could potentially postpone the blend wall for a few years. ", "Another option to address the blend wall would be an aggressive push for the use of ethanol in flexible-fuel vehicles capable of using E85, a gasoline-ethanol blend containing 51% to 83% ethanol. However, there are infrastructure constraints with the use of E85. For example, the number of E85 fueling stations is limited. To help address these infrastructure issues, the U.S. Department of Agriculture (USDA) announced $100 million in matching grants in 2015 under its Biofuel Infrastructure Partnership. The grants may be used for blender pumps, dedicated E15 or E85 pumps, and new storage tanks and related equipment associated with new facilities or additional capacity."], "subsections": []}, {"section_title": "Other Factors", "paragraphs": ["The RFS is not a stand-alone policy. It interacts with many factors that are not easily controlled. For example, cellulosic biofuel production, at a minimum, requires conversion technology, which itself requires technical expertise and time to ramp up to commercial scale. The large quantity of biomass feedstocks needed to produce such biofuels requires factors such as appropriate weather conditions and an expectation of stable markets for feedstock commodities. Further, some types of biofuel production thus far have been sensitive to the availability of tax incentives in order to be economically feasible (e.g., biodiesel). Unexpected occurrences (e.g., drought, failed technology, tax incentive expiration) could potentially impact an entire industry, especially for some advanced biofuels in nascent industries compared to conventional transportation fuels."], "subsections": []}]}, {"section_title": "Congressional Issues", "paragraphs": ["The RFS was established in 2005 at a time when Congress foresaw the need to diversify the country's energy portfolio, strengthen the economy of rural communities that could contribute to biofuel production, bolster U.S. standing in an emerging segment of the energy technology market, and protect the environment, among other objectives. The RFS was then subsequently expanded in 2007. Over the past decade some components of the RFS have progressed steadily toward meeting statutory requirements and other components have not. ", "The RFS is a program with ambitious objectives. Policy questions surrounding future consideration of the RFS might include ", "What should be the purposes of the RFS? Is the RFS properly designed to achieve those purposes? What happens when, and if, the RFS achieves its purposes?", "At the outse t, some would argue that the first question may seem straightforward; the RFS exists to introduce more biofuels into the transportation fuel market to achieve a number of transportation fuel supply and environmental objectives. However, the statute does not list any specific purposes or objectives. Some stakeholders argue that the RFS exists primarily to find another market for biomass feedstocks or to promote the economy of rural America (e.g., the construction of biofuel facilities that create jobs). To the extent the RFS was designed to reduce U.S. dependence on foreign oil, and to the extent that hydraulic fracturing and the growth of unconventional oil and gas production have contributed to achieving that objective, some stakeholders have questioned whether the RFS is still needed for energy security purposes. Likewise, the environmental impact of the RFS could be challenged, as the advanced biofuel component of the RFS\u2014set to yield greater greenhouse gas emission reduction benefits\u2014has missed the statutory targets by a large margin.", "In examining whether the RFS is well designed to realize its general purpose, some have inquired about the challenges in achieving the ambitious RFS targets, given concerns about the slow development of some advanced biofuel supplies. Additionally, past delays in announcing final annual standards by EPA have led to uncertainty for biofuel producers, feedstock growers, and refiners. Whether the RFS should be eliminated, amended to address the current challenges in the program, or maintained in its current form is an ongoing question for Congress. A related question is whether the current provisions for EPA to waive various portions of the RFS mandates and to reset the RFS are sufficient to address the current supply challenges or whether the use of these waivers runs counter to the goals of the program. Some Members of Congress have proposed alternatives to the RFS, such as transitioning to an octane standard.", "Other Members of Congress have expressed interest in modifying or eliminating the conventional biofuel (e.g., corn starch ethanol) portion of the mandate. Some contend that the conventional biofuel segment of the biofuels industry is well established, so it should not require a use mandate. In addition, it has been argued that a demand for conventional biofuels exists regardless of congressional involvement. Others counter that the RFS is needed to help lower GHG emissions and to assure that the biofuels industry continues to have access to a fuel distribution infrastructure that is largely controlled by petroleum interests."], "subsections": []}]}}
{"id": "R42704", "title": "The Purple Heart: Background and Issues for Congress", "released_date": "2019-05-02T00:00:00", "summary": ["The Purple Heart is one of the oldest and most recognized American military medals, awarded to servicemembers who were killed or wounded by enemy action. The conflicts 2001 to the present have greatly increased the number of Purple Hearts awarded to servicemembers.", "Events over the past few years have spurred debate on the eligibility criteria for the Purple Heart. Shootings on U.S. soil and medical conditions such as traumatic brain injury (TBI) and post-traumatic stress disorder (PTSD) have prompted changes to the eligibility requirements for the Purple Heart. Some critics believe that these changes may lessen the value of the medal and the sacrifices of past recipients on the battlefield. In the past, efforts to modify the Purple Heart's eligibility requirements were contentious, and veterans groups were vocal concerning eligibility changes.", "While medal requirements are often left to the military and executive branch to decide, Congress is involved in Purple Heart eligibility, utilizing its constitutional power \"To Make Rules for the Government and Regulation of the land and naval Forces\" (U.S. Constitution, Article I, Section 8, clause 14). The Carl Levin and Howard P. \"Buck\" McKeon National Defense Authorization Act for Fiscal Year 2015 (P.L. 113-291) included language that expands eligibility for the Purple Heart.", "Previous debates have raised several questions about the Purple Heart. In some respects, how an event is defined can determine eligibility: Is a servicemember the victim of a crime or a terrorist attack? Conversely, arguing that killed or wounded servicemembers \"should\" be eligible for the Purple Heart can redefine an event: Is the servicemember an advisor to a foreign military or a combatant? Are PTSD and other mental health conditions adequate injuries to warrant the Purple Heart? These are questions that Congress might consider if it chooses to act on this issue."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Requirements for military awards and decorations can change over time. New events and changes in military, political, or social conditions can generate debate over who is eligible for various military awards. These changes tend to be controversial, especially with veterans groups. Congress has considered several pieces of legislation that would change who would be eligible to receive the Purple Heart, and under what conditions.", "The wars in Iraq and Afghanistan have greatly increased the number of servicemembers receiving the Purple Heart award as well as the potential conditions under which they receive the award. Increasingly acknowledged conditions, such as traumatic brain injuries (TBI) and post-traumatic stress disorder (PTSD), as well as accidents and other events while deployed, bring up new questions as to when a servicemember deserves a Purple Heart. The July 17, 2015, shooting of servicemembers at a Marine recruiting office and a naval reserve center in Chattanooga, TN, again prompted questions about applying the Purple Heart to terrorist attacks versus criminal acts. ", "Veterans groups often voice their views when Congress or the President proposes making changes to expand eligibility for the Purple Heart. These groups argue, for example, that a servicemember who acquires PTSD may not always deserve the same recognition as a servicemember killed or wounded in direct combat, while others contend that these medical conditions can debilitate servicemembers just as much as physical injuries and can have lasting effects on servicemembers' lives. Determining which actions and events make a servicemember qualified for receiving a Purple Heart, and whether expanding eligibility does a disservice to those who have already earned the award, are contentious elements of this debate. ", "Although Congress has traditionally left many military award requirements to the executive branch, the Constitution does allow Congress to act in this area, and events have prompted changes regarding eligibility for the Purple Heart. On December 19, 2014, Congress passed The Carl Levin and Howard P. \"Buck\" McKeon National Defense Authorization Act (NDAA) for Fiscal Year 2015. Section 571 of the NDAA for FY2015 expanded eligibility by redefining what should be considered an attack by a \"foreign terrorist organization\" for purposes of determining eligibility for the Purple Heart. As a result, servicemembers wounded and killed in the 2009 shootings in Little Rock, AR, and at Fort Hood, TX, were awarded Purple Hearts in 2015.", "Congressional offices often receive questions about Purple Heart eligibility from constituents, especially when eligibility rules change. The number of these questions is likely to increase as servicemembers return from conflicts around the world and if eligibility requirements are again changed. This report will examine the history of the Purple Heart and changes in eligibility over time as well as current issues facing Congress."], "subsections": []}, {"section_title": "Original Conception", "paragraphs": ["In 1782, George Washington created the Badge of Military Merit to reward \"any singularly meritorious action\" displayed by a soldier, noncommissioned officer, or officer in the Continental Army. This award was intended to encourage gallantry and fidelity among soldiers, and would later become known as the Purple Heart. ", "The Badge of Military Merit was designed as a purple heart of cloth edged with a narrow lace. Records are incomplete and researchers debate how many soldiers received this award. According to Military Order of the Purple Heart, three soldiers from Connecticut were the first to receive the Badge of Military Merit during the American Revolutionary War. All three were noncommissioned officers and the only recipients who received the award from General Washington. The soldiers were Sergeant William Brown, 5 th Connecticut Regiment of the Connecticut Line on May 3, 1783; Sergeant Elijah Churchill, 2 nd Continental Light Dragoons on May 3, 1783; and Sergeant Daniel Bissell, 2 nd Connecticut Regiment of the Connecticut Line, on June 10, 1783. However, the Badge of Military Merit fell into disuse shortly after its conception."], "subsections": []}, {"section_title": "History of the Purple Heart", "paragraphs": ["The Badge of Military Merit was not seriously considered again until General Douglas MacArthur (then Army Chief of Staff) revived the award on February 22, 1932, the 200 th anniversary of George Washington's birth. ", "This award, renamed the \"Purple Heart,\" was redesigned to its modern appearance: a purple heart-shaped medal with bronze border and George Washington's coat of arms between two green spray leaves. See Figure 1 . General MacArthur also redefined the eligibility requirements to those who received Meritorious Service Citation certificates from World War I or those authorized to wear wound chevrons by Army Regulation (AR) 600-8-22, Military Awards . It was at this point that the Purple Heart became focused on soldiers killed and wounded in combat, rather than \"any singularly meritorious act.\" ", "In 1942, President Franklin Roosevelt extended the Purple Heart award, which to this point was exclusively an Army award, to Navy, Marine Corps, and Coast Guard members serving in World War II. In 1952, President Truman retroactively awarded Purple Hearts to personnel in the Navy, Marine Corps, and Coast Guard that qualified after April 5, 1917, thus including World War I veterans of all services. ", "From 1962 until 1998, eligibility for the Purple Hearts was changed on several occasions. President Kennedy authorized Purple Hearts to all servicemembers, and civilians serving with the Armed Forces, who were engaged in armed conflict against an opposing military or hostile foreign force. This expansion was written to permit U.S. servicemembers, and the civilians that accompanied them, who were killed or wounded in Vietnam to receive the Purple Heart, as many of those servicemembers were officially considered advisors to the Republic of Vietnam, rather than combatants.", "Purple Heart eligibility was expanded again by President Reagan to include military personnel and government civilians killed or wounded in international terrorist attacks after March 28, 1973, or those serving in peacekeeping operations outside of the United States. This expansion was in response to increased terrorist attacks against U.S. servicemembers abroad, namely the Marine Corps Barracks bombing in Beirut, Lebanon, in 1983.", "The NDAA for Fiscal Year 1996 expanded eligibility to prisoners of war injured or wounded in captivity prior to 1962, a group of servicemembers previously not covered for Purple Heart eligibility by President Kennedy's executive order. In 1997, President Clinton signed the NDAA for Fiscal Year 1998, which limited future awards of the Purple Heart to military personnel. It has since remained a military-only award.", "The Department of Defense does not maintain a record of the number of Purple Heart recipients. However, some military historians estimated more than 1 million Purple Hearts have been awarded mostly to soldiers since 1932. Likewise, the National Purple Heart Hall of Honor estimates 1.8 million Purple Hearts have been awarded since the medal was established by the Army in 1932. During the 115 th Congress (2017-2018), H.R. 7097 was introduced as the \"Find our Hearts Act.\" It would have amended Title 10, United States Code, to require the establishment of a searchable database containing the names and citations of members of the Armed Forces who have been awarded the Purple Heart. H.R. 7097 was referred to the House Armed Services Committee but saw no further action. See Table 1 for current Purple Heart legislation."], "subsections": []}, {"section_title": "Current Eligibility", "paragraphs": ["Currently, the Purple Heart is authorized for any member of the U.S. Armed Forces who has been wounded or died from wounds sustained under one of the following conditions: ", "(1) In accordance with E.O. 11016, subject to the provisions of Sections 1129, 1129a, and 1131 of Title 10, U.S.C., and P.L. 104-106 , the Secretary of a Military Department, will, in the name of the President of the United States, award the PH, with suitable ribbons and appurtenances, to any Service member under the jurisdiction of that Department who, after April 5, 1917, has been wounded, killed, or who has died or may hereafter die of wounds received under any of the following circumstances:", "(a) In action against an opposing armed force of a foreign country in which U.S. Armed Forces are or have been engaged.", "(b) In any action with an opposing armed force of a foreign country in which the Military Services are or have been engaged.", "(c) While serving with friendly foreign forces engaged in armed conflict against an opposing armed force in which the United States is not a belligerent party.", "(d) As a result of an act of any such enemy or opposing armed forces.", "(e) As the result of an act of any hostile foreign force.", "(f) After March 28, 1973, as a result of an international terrorist attack against the United States or a foreign nation friendly to the United States, recognized as such an attack for purposes of award of the PH by the Secretary of the Military Department concerned, or jointly by the Secretaries of the Military Departments concerned if members from more than one Military Department are wounded in the attack. The Secretary of the Military Department concerned shall notify the Under Secretary for Personnel and Readiness USD(P&R) prior to awarding the PH for an international terrorist attack that occurs in the United States or its territories.", "(g) After March 28, 1973, as a result of military operations while serving outside the territory of the United States as part of a peacekeeping force.", "(h) On or after December 7, 1941, pursuant to Section 1129 of Title 10, U.S.C., a service member who is killed or wounded in action as the result of action by friendly weapon fire while directly engaged in combat, other than as a result of an act of an enemy of the United States, unless (in the case of a wound) the wound is the result of willful misconduct of the member.", "(i) Before April 25, 1962, pursuant to Section 521 of P.L. 104-106 which held as a prisoner of war (POW), or while being taken captive in the same manner as a former POW who is wounded on or after that date while held as a POW. A person will be considered to be a former POW if the person is eligible for the POW Medal under Section 1128 of Title 10, U.S.C.", "(j) On or after December 7, 1941, to a Service member who is killed or dies while in captivity as a prisoner of war (POW) under circumstances establishing eligibility for the POW medal pursuant to section 1128 of Title 10, U.S.C., and Volume 2 of DoD Manual 1348.33, Manual of Military Decorations and Awards , unless compelling evidence is presented that shows that the member's death was not the result of enemy action. ", "(k) After September 11, 2001, pursuant to section 1129a of Title 10, U.S.C., to a Service member on active duty who is killed or wounded in an attack by a foreign terrorist organizations in circumstances where the death or wound is the result of an attack targeted on the member due to such member's status as a member of the armed forces. ", "An attack by an individual or entity shall be considered to be a foreign terrorist attack if the individual or entity was in communication with the foreign terrorist organization before the attack and the attack was inspired or motivated by the foreign terrorist organization.", "An award is not authorized if the death or wound was the result of the willful misconduct of the Service member.", "To assist in making a PH determination pursuant to section 1129a of Title 10, U.S.C., the Military Department Secretary concerned may request an intelligence assessment from the Defense Intelligence Agencies' Defense Combating Terrorism Center (DCTC). The DCTC assessment of potential foreign terrorist attacks by an individual or entity will assess whether the individual or entity was in communication with the foreign terrorist organization before the attack, and if the attack was inspired or motivated by the foreign terrorist organization. The assessment shall include supporting citations and rationale.", "(2) A wound for which the award is made must have been of such severity that it required treatment, not just examination, by a military medical officer. ", "(a) Treatment must be noted in the Servicemember's medical record. ", "(b) Award may be made of wounds treated by a medical professional other than a medical officer provided a medical officer issues a statement in the Service member's medical record that the extent of the wounds were such that the wounds would have required treatment from a medical officer if one had one been available to treat the wounds.", "(3) After May 17, 1998, pursuant to Section 1131 of Title 10, U.S.C., the PH may only be awarded to a person who is a Service member at the time the person is killed or wounded under circumstances otherwise qualifying that person for award of the PH. Before this date, the Secretary of the Military Department concerned was authorized to award the PH to U.S. civilian nationals who were serving under competent authority in any capacity with the armed forces of that department. ", "For deceased servicemembers, the Purple Heart may be given to the representatives of the deceased as the individual Service Secretary considers appropriate.", "Servicemembers can be awarded multiple Purple Hearts for separate incidents. The servicemember receives the Purple Heart medal for the first award. Subsequent awards are indicated with oak leaf clusters or 5/16 inch service stars, depending on the rules of the recipient's service. Purple Hearts may not be awarded to foreign military personnel."], "subsections": []}, {"section_title": "Issues for Congress", "paragraphs": ["Although the decision to award medals and other military decorations traditionally rests with the executive branch, Congress has been expanding its role in this area in recent decades, exercising its constitutional power \"To Make Rules for the Government and Regulation of the land and naval forces.\" Previously, Congress took the lead and adjusted Purple Heart eligibility in both the NDAA for FY1996 and the NDAA for FY1998. See Appendix A . In response to some mass shootings in recent years, Congress passed a provision in the NDAA for FY2015 that expanded the Purple Heart's eligibility requirements. "], "subsections": [{"section_title": "Domestic Terrorism and the FY2015 NDAA (P.L. 113-291)", "paragraphs": [], "subsections": [{"section_title": "Little Rock, Arkansas, and Fort Hood, Texas, 2009", "paragraphs": ["On June 1, 2009, a man who was allegedly angry over the killing of Muslims in Iraq and Afghanistan opened fire on two U.S. Army soldiers near a recruiting station in Little Rock, AR, killing one and wounding the other. On November 5, 2009, an Army major opened fire at Ft. Hood, TX, killing 13 and wounding 29, many of them servicemembers. Both men were charged with murder and other crimes. ", "Federal and local law enforcement authorities initially considered these acts to be crimes, and the Defense Department reports the Fort Hood shooting as \"workplace violence,\" not acts perpetrated by an enemy or hostile force, which made them ineligible for the Purple Heart. However, some believed these acts should be viewed as acts of war or domestic terrorism because they involved Muslim perpetrators angered over U.S. actions in Iraq and Afghanistan. ", "Section 571 of the NDAA for FY2015 ( P.L. 113-291 ) expanded the eligibility for the Purple Heart by redefining what should be considered an attack by a \"foreign terrorist organization\" for purposes of determining eligibility for the Purple Heart. The law states that an event should be considered an attack by a foreign terrorist organization if the perpetrator of the attack \"was in communication with the foreign terrorist organization before the attack\" and \"the attack was inspired or motivated by the foreign terrorist organization.\" ", "Still, some are opposed to awarding the Purple Heart for terrorist acts that were initially deemed \"workplace violence\" by the Department of Defense (DOD) or a criminal act, and not earned on a battlefield. This act arguably sets a precedent for the future and could make Purple Heart eligibility more subjective, allowing public sentiment to determine what events are worthy of a Purple Heart. ", "On April 10, 2015, then-Army Secretary John McHugh and Army Lieutenant General Sean MacFarland, 3 rd Corps and Fort Hood commanding general, presented Purple Hearts to the families of the 10 servicemembers killed and to the 26 servicemembers wounded during the attack. Defense of Freedom Medals were also awarded to DOD civilians killed and wounded during the attack. In a memorandum, Secretary McHugh directed the Army to \"expedite certain other benefits for which soldiers receiving the Purple Heart are traditionally eligible.\" ", "In addition to the victims of the Fort Hood shooting, the two victims of the June 2009, shooting at a recruiting station in Little Rock, Arkansas, received Purple Hearts on July 1, 2015. Army Private William Andrew \"Andy\" Long was killed and Army Private Quinton Ezeagwula was wounded in that attack by Abdulhakim Muhammad, who was convicted and sentenced to life in prison without the possibility of parole. "], "subsections": []}, {"section_title": "NDAA for FY2016 (H.R. 1735)", "paragraphs": ["Encouraged by the expanded eligibility provision in the NDAA for FY2015, legislation was introduced during the 114 th Congress to award Purple Hearts to other military victims of domestic terrorism. Section 583 of the House-passed version of H.R. 1735 , the NDAA for FY2016, would have awarded the Purple Heart to servicemembers who were victims of the April 19, 1995, Oklahoma City, Oklahoma bombing. Supporters for awarding the Purple Heart to the victims of the Oklahoma City bombing refer to the FY2015 NDAA as precedent. However, critics contend that the bombing was an act of domestic terrorism and does not meet the current eligibility requirements of the assailant being inspired by or motivated by an international terrorist organization. The final version of the FY2016 NDAA ( P.L. 114-92 ) did not include this provision."], "subsections": []}, {"section_title": "Chattanooga Shooting on July 16, 2015", "paragraphs": ["On July 16, 2015, Muhammad Youssef Abdulazeez shot at a Marine Corps recruiting center and Naval Reserve Center in Chattanooga, TN. This incident again raised congressional interest regarding the eligibility for the Purple Heart for servicemembers killed and wounded during an attack inspired by or motivated by international terrorist organizations. Four marines were killed and one was injured during the rampage, and the lone sailor later died from his injuries. The FBI investigation later concluded that Abdulazeez was \"motivated by foreign terrorist organization propaganda,\" but that it was difficult to determine which terrorist group may have inspired him.", "On December 16, 2015, then-Secretary of the Navy Ray Mabus announced that the Purple Heart would be awarded to five servicemembers killed and one wounded in the July 2015 shootings at two naval centers in Chattanooga, Tennessee. Secretary Mabus stated that \"following an extensive investigation, the FBI and NCIS have determined that this attack was inspired by a foreign terrorist group, the final criteria required for the awarding of the Purple Heart to this Sailor and these Marines.\" ", "On January 14, 2016, then-Navy Vice Admiral Robin Braun presented the Purple Heart to the family of Logistics Specialist 2 nd Class Randall Smith at the Navy Operational Support Center Chattanooga. Brigadier General Terry V. Williams presented the Purple Heart on January 26, 2016, to Sergeant DeMonte R. Cheeley, who survived the attack, at a ceremony in Chattanooga.", "On April 20, 2016, Lieutenant General Rex McMillian, then-head of Marine Corps Forces Reserve, presented Purple Hearts to the families of Gunnery Sergeant Thomas Sullivan, Staff Sergeant David Wyatt, Sergeant Carson Holmquist, and Lance Corporal Squire \"Skip\" Wells in a ceremony at the Hunter Museum of American Art in Chattanooga. "], "subsections": []}, {"section_title": "Attack on Paris-Bound Train, August 21, 2015", "paragraphs": ["U.S. Airman 1 st Class Spencer Stone was onboard a train from Amsterdam to Paris with two friends, Anthony Sadler and Alek Skarlatos, when they subdued a heavily armed gunman who attempted to fire an AK-47 at the passengers. Stone was stabbed in the face and neck by the gunman as the trio restrained him before he could discharge his weapon. The vacationing Americans were hailed as heroes and awarded the French Legion of Honor on August 24, 2015. On September 14, 2015, Air Force Secretary Deborah Lee James announced that Stone would receive the Purple Heart along with the Airman's Medal, the Air Force's highest noncombat award. At the Pentagon on September 17, 2015, then-Defense Secretary Ash Carter presented Stone the Purple Heart and Airman's Medal. During the ceremony, Carter presented the Soldier's Medal to Oregon National Guard Specialist Alek Skarlatos, and civilian Anthony Sadler received the Secretary of Defense Medal for Valor. "], "subsections": []}, {"section_title": "Orlando Shooting on June 12, 2016", "paragraphs": ["On June 12, 2016, a security guard, Omar Mateen, killed 49 people and wounded 53 others in an attack inside Pulse, a gay nightclub in Orlando, Florida. Army Reserve Captain Antonio Davon Brown was one of the 49 people killed and may be eligible for the Purple Heart depending on the outcome of the FBI investigation. According to the FBI, Mateen had pledged allegiance to the Islamic State group after his attack in a call to 911. At this time, it is unclear if the Army will make a decision regarding Captain Brown's eligibility for the Purple Heart."], "subsections": []}]}, {"section_title": "Private Corrado Piccoli Purple Heart Preservation Act", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["On September 28, 2016, H.R. 6234 was introduced to amend Title 18, U.S.C., to provide for penalties for the sale of any Purple Heart awarded to a member of the Armed Forces. This legislation would have made selling the medal punishable by fines and up to six months in prison. H.R. 6234 would have placed the Purple Heart into a new protected category, keeping it away from not just con artists but also memorabilia collectors. The measure was named for Private Corrado Piccoli, a World War II infantryman killed in action in 1944, whose Purple Heart was found for sale at an antique store in 2009. This bill was referred to the House Judiciary Subcommittee on Crime, Terrorism, Homeland Security, and Investigations but saw no further action in the 114 th Congress. This legislation was reintroduced in the 115 th Congress on January 13, 2017, as H.R. 544 , the Private Corrado Piccoli Purple Heart Preservation Act of 2017, and a related bill, S. 765 , was passed by the Senate on August 3, 2017. Both bills were referred to committee in the House but saw no further action.", "On January 15, 2019, S. 122 , Private Corrado Piccoli Purple Heart Preservation Act, was introduced in the 116 th Congress. The bill was read twice and referred to the Senate Judiciary Committee."], "subsections": []}]}, {"section_title": "115th Congress Legislation", "paragraphs": ["The House version of the National Defense Authorization Act (NDAA) for FY2019, H.R. 5515 , included a provision (Section 629) that would extend certain morale, welfare, and recreation (MWR) privileges to certain veterans, including Purple Hearts recipients, and their caregivers. This bill became P.L. 115-232 on August 13, 2018. Section 621 of the enacted bill adopted House Section 629, which extends eligibility of certain MWR and commissary privileges to certain veterans, including Purple Heart recipients, and their caregivers starting in 2020. For additional information see section, \"Defense Commissary System,\" in CRS Report R45343, FY2019 National Defense Authorization Act: Selected Military Personnel Issues . "], "subsections": []}, {"section_title": "116th Congress Legislation", "paragraphs": ["For bill summaries of Purple Heart legislation in the 116 th Congress as introduced, see Table 1 ."], "subsections": []}, {"section_title": "Traumatic Brain Injuries, Post-Traumatic Stress Disorder, and the Purple Heart", "paragraphs": ["The large number of veterans with invisible wounds returning from Iraq and Afghanistan has the Department of Defense (DOD) reevaluating Purple Heart eligibility for traumatic brain injuries (TBI) and mental conditions such as post-traumatic stress disorder (PTSD). DOD considers some TBIs eligible for the Purple Heart, as many of those injuries can be diagnosed using brain scans and other objective medical tests. However, there is continued debate on the inclusion of mental conditions, such as PTSD, as part of the appropriate criteria for the Purple Heart. Congress, as well as various executive agencies and departments, is funding and conducting studies regarding PTSD. The National Alliance on Mental Illness, a national grassroots advocacy group representing families and people affected by mental illness, is advocating that the Purple Heart be awarded for psychological wounds including PTSD to eliminate stigma and encourage servicemembers to seek care.", "At this time, DOD does not consider servicemembers with PTSD eligible for the Purple Heart. Army Regulation 600-8-22 allows \"concussion injuries caused as a result of enemy generated explosions\" but specifically disqualifies post-traumatic stress disorders. Army guidance emphasizes \"the degree to which the enemy caused the injury\" when determining eligibility and places PTSD in a column of noneligible injuries. The Marine Corps defines PTSD as a \"severe combat stress injury\" and says that combat stress injuries are \"not directly caused by the enemy's intentional use of an outside force or agent,\" and thus do not qualify.", "Servicemembers are divided on this issue. Some servicemembers believe that mental injuries such as PTSD should be eligible for the Purple Heart, while others believe that it would dishonor those who have received Purple Hearts for physical injuries. Proponents argue that some veterans are less likely to seek help for their mental-health injuries because of the stigma associated with PTSD, and that stigma could be lessened by recognizing their injuries as real. Opponents, including some veterans from the Military Order of the Purple Heart and Veterans of Foreign Wars, are resistant to accepting PTSD as grounds for eligibility. A representative of The Military Order of the Purple Heart stated, \"We believe strongly in and support the criteria that the wound or death should be sustained in combat at the hands of the enemies of the United States.\" In addition, the national spokesman for the Veterans of Foreign Wars, Joseph E. Davis, said, \"Medals aren't awarded for illness or disease, but for 'achievement and valor.'\" ", "Appendix A. Timeline of Purple Heart Eligibility", "August 7, 1782: George Washington creates the Badge of Military Merit. Awarded to several Continental soldiers but it quickly falls from use.", "February 22, 1932: Army Chief of Staff General Douglas MacArthur revives the Badge of Military Merit as an Army award, renamed \"the Purple Heart,\" and retroactively awarded to wounded WWI veterans. ", "December 3, 1942: Executive Order 9277\u2014President Franklin Roosevelt expands Purple Heart eligibility to include U.S. Navy, Marine Corps, and Coast Guard. Retroactively awards Purple Hearts to December 6, 1941.", "November 12, 1952: Executive Order 10409\u2014President Truman retroactively awards Purple Hearts to U.S. Navy, Marine Corps, and Coast Guard veterans after April 5, 1917.", "April 25, 1962: Executive Order 11016\u2014President Kennedy extends eligibility to civilians serving with military forces.", "February 23, 1984: Executive Order 12464\u2014President Reagan awards Purple Hearts to those killed and wounded in terrorist attacks after March 28, 1973, or on peacekeeping missions outside the United States.", "February 10, 1996: National Defense Authorization Act for Fiscal Year 1996 (Section 521, P.L. 104-106 ) includes \"prisoners of war wounded before April 25, 1962, while held as a prisoner of war (or while being taken captive) in the same manner as a former prisoner of war who is wounded on or after that date while held as a prisoner of war (or while being taken captive).\"", "November 18, 1997: National Defense Authorization Act for Fiscal Year 1998 (Section 571, P.L. 105-85 ) limits future Purple Heart awards to members of the Armed Forces. ", "October 17, 2006: National Defense Authorization Act for Fiscal Year 2007 (Section 556, P.L. 109-364 ) includes prisoners of war captured after December 7, 1941.", "April 30, 2008: Purple Heart Family Equity Act of 2007 ( P.L. 110-207 ) revises the congressional charter of the Military Order of the Purple Heart to authorize associate membership for the spouse and siblings of a recipient of the Purple Heart medal.", "December 19, 2014: National Defense Authorization Act for Fiscal Year 2015 (Section 571, P.L. 113-291 ) expands eligibility for the Purple Heart by redefining what should be considered an attack by a foreign terrorist organization, and awards Purple Heart medals to servicemembers wounded or killed during the 2009 shootings at Ft. Hood, Texas, and Little Rock, Arkansas.", "Appendix B. Staffer Instructions for Medal\u00a0Requests", "Members of Congress are able to directly request that a Service Secretary consider awarding military decorations to individuals or groups. Upon receiving a request from a Member's office, the Service Secretary concerned will review the proposal for the award or presentation of a decoration (or the upgrading of a decoration).", "Based on that review, the Secretary shall determine the merits of approving the award or presentation of the decoration and other necessary determinations. The Secretary shall submit a notice to the requesting Member, the Senate Armed Services Committee, and the House Armed Services Committee with one of the following results:", "(1) The award or presentation of the decoration does not warrant approval on the merits. A statement explaining the Secretary's reason will be included.", "(2) The award or presentation of the decoration warrants approval and a waiver by law of time restrictions prescribed by law is recommended.", "(3) The award or presentation of the decoration warrants approval on the merits and has been approved as an exception to policy.", "(4) The award or presentation of the decoration warrants approval on the merits, but a waiver of the time restrictions prescribed in law is not recommended. A statement explaining the Secretary's reason will be included.", "Source: Compiled from the National Defense Authorization Act for Fiscal Year 1996 ( P.L. 104-106 , \u00a7526), February 10, 1996."], "subsections": []}]}]}}
{"id": "R44491", "title": "Internships in Congressional Offices: Frequently Asked Questions", "released_date": "2019-03-25T00:00:00", "summary": ["Many interns serve Congress, assisting individual Members, committees, and other offices or support services. Interns serve the House or Senate in a temporary capacity, primarily for an educational benefit, although some interns may receive pay for their service. Like many aspects of congressional operations, individual House or Senate offices can make many of their own rules and guidelines for interns, if they choose to operate an internship program. Additional institutional rules, however, may also apply. In the House, policies set by the Committee on Ethics or the Committee on House Administration may also affect congressional offices and interns, and in the Senate, additional relevant policies may be set by the Senate Select Committee on Ethics or the Committee on Rules and Administration.", "This report addresses frequently asked questions (FAQs) about congressional interns and internships. It is intended to provide information to congressional offices about the role of interns and to provide a summary of some of the policies and guidance provided by the House and the Senate related to internships. It addresses the House and Senate rules that apply to congressional internships, factors that may affect an office's selection process and an individual's eligibility to serve in an internship, and some of the congressional resources and training opportunities available for interns. For additional information about internship opportunities, refer to CRS Report 98-654, Internships, Fellowships, and Other Work Experience Opportunities in the Federal Government ."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "1. What is an intern? How is an intern different from a volunteer, fellow, or a page?", "paragraphs": ["A number of opportunities exist for individuals who are not regular congressional employees to provide assistance to congressional offices. The titles used to describe these positions are sometimes used interchangeably, but there can also be some key differences. ", "An intern is an individual who provides assistance, paid or unpaid, to a congressional office on a temporary basis. The internship experience is typically considered to provide an educational benefit for that individual. An intern's role does not substitute for or replace the duties of regular employees. If an intern is paid, then some of the rules applicable to congressional employees may apply.", "This report focuses on congressional interns, as described above, although their role can sometimes seem similar to individuals in the following positions: ", "A volunteer also provides assistance to a congressional office, and the experience is generally considered to be of educational value for the volunteer. In many cases, a volunteer's role in a congressional office can be similar to that of an unpaid intern. A volunteer cannot receive financial compensation for his or her service. The volunteer's assignments are not to replace the regular duties of paid employees. A fellow is an individual who also performs services in a congressional office on a temporary basis, but typically through participation in an established, graduate-level or mid-career education program. Fellows often receive compensation from a sponsoring employer, professional association, or other organization while working in Congress during the course of the fellowships. Congressional offices may try to recruit fellows and work with existing programs, but a fellowship is usually not a position a congressional office creates on its own. A page is a high-school junior, at least 16 years old, who participates in a more structured program for a semester or summer. Pages continue to serve in the Senate, but the House program was discontinued in 2010. Although they are appointed by individual Senators, the pages provide assistance as a group in the Senate chamber, and receive housing, education, and a stipend from the Senate."], "subsections": []}, {"section_title": "2. What congressional rules specifically apply to interns?", "paragraphs": ["Few statutes or standing rules of the House or Senate make specific references to congressional interns. In many cases, the distinction between a paid internship and an unpaid internship affects which formal rules apply to interns. Guidance and policies for House interns can be found in the House Ethics Manual , in the Members' Congressional Handboo k , Congressional C ommittee Handbook , from the House Committee on Ethics, and from the Committee on House Administration. For Senate interns, guidance and policies are mainly found in the Senate Ethics Manual , from the Senate Select Committee on Ethics, and from the Senate Committee on Rules and Administration. Congressional offices can choose to set additional rules for their interns to follow.", "House or Senate rules that apply to paid congressional employees generally extend to paid interns as well. These might include, but are not limited to, the Code of Official Conduct for the appropriate chamber, gift restrictions, ban on solicitations, and prohibition on payment for a speech, appearance, or publication. Financial disclosure rules may also apply in the Senate if the intern is receiving compensation from a source other than the U.S. government. Paid interns are exempt from some provisions of the Fair Labor Standards Act (FLSA) that otherwise apply to congressional staff, like minimum wage and overtime pay requirements, as well as employee benefits, like insurance and retirement.", "Fewer House or Senate rules may apply to unpaid interns than to paid interns. To enhance accountability for unpaid interns, the House or Senate ethics committees or individual congressional offices can set standards for unpaid interns to abide by that mirror some of the same rules that paid interns or congressional employees follow. A congressional office can enforce the rules it sets as internal office policies for unpaid interns, whereas the House and Senate institutionally may have fewer enforcement mechanisms affecting unpaid interns.", "The House Committee on Ethics, for example, advises that offices obtain an agreement in writing from unpaid interns at the outset of an internship. This agreement would acknowledge that the intern agrees \"to serve without compensation and to not make any future claim for payment, and acknowledge that the voluntary service does not constitute House employment.\" The committee also suggests that unpaid interns refrain from actions that present themselves as congressional officers or employees.", "The Senate Select Committee on Ethics requires that unpaid interns file a disclaimer with the Financial Clerk of the Senate acknowledging that their service is voluntary, or gratuitous, in nature. The committee also notes that the conflict-of-interest provisions in the Standing Rules of the Senate \"apply to any intern, fellow, or volunteer providing Senate services,\" even if the individual is only working for a single day. Interns performing full-time services in the Senate for over 90 days during a calendar year are also required to abide by the Senate Code of Conduct."], "subsections": [{"section_title": "Use of Official Email, Social Media, and Technology Resources", "paragraphs": ["It may be useful for House and Senate interns to familiarize themselves with the broader technology-use policies that apply to congressional offices. Computers, email accounts, internet access, and other technology resources provided to interns by the congressional office primarily should be used for official congressional business with any personal use limited and incidental. Because information sent and received from a congressional computer or network may be traced back to a particular office, an office may choose to implement additional standards for interns' incidental computer and internet usage. Offices may also develop guidelines for what is or is not permissible for interns to post on social media or public websites about their work."], "subsections": []}, {"section_title": "Giving and Receiving Gifts", "paragraphs": ["Paid interns are required to follow the House or Senate gift rules that apply to regular employees, and the House and Senate ethics committees advise that unpaid interns should also abide by the gift rules. Generally, these rules prohibit (1) receiving gifts from lobbyists or foreign agents, (2) receiving any individual gift valued at over $50, and (3) receiving $100 or more in gifts (each valued at $10 or more) from a single source. In most cases, it is typically permissible for a Member, staffer, or office to give an intern a small gift in recognition of his or her service. Federal law, however, prohibits supervisors from accepting gifts from interns. "], "subsections": []}]}, {"section_title": "3. What other information might an office provide to interns?", "paragraphs": ["Offices often provide additional information or guidance to interns about congressional operations or resources. Offices, for example, might provide an overview of the House or Senate rules that apply to interns, or clarify their own office policies regarding attendance, technology use, phone etiquette, and other expectations. Information about emergency procedures and contact information for the appropriate police or medical services is commonly provided. Some offices may provide interns with a basic overview of the legislative process or how to perform legislative research. Locations of buildings or offices within the Capitol Complex and information on dining facilities and other on-site services may be useful for interns on Capitol Hill, and similar information about the area surrounding a state or district office could be provided to interns in those offices. "], "subsections": []}, {"section_title": "4. What is the selection process for interns?", "paragraphs": ["House and Senate offices are able to set many of their own requirements for intern selection, just as they are with general personnel decisions. Some offices, for example, may require that interns are currently enrolled students, have reached a certain level of education, or that interns live in a Member's district or state. Many congressional offices post internship opportunities and application procedures on their websites. House offices can use the House Vacancy Announcement and Placement Service to post an internship announcement and may also request resumes from its resume bank. Similarly, the Senate Placement Office can publish opportunities for internships, collect applications, or provide resumes from its resume bank if a Senate office chooses to use the service."], "subsections": []}, {"section_title": "5. Do interns have to be U.S. citizens?", "paragraphs": ["In many instances, Members of Congress have broad discretion to determine who works in their offices, but different laws, rules, and considerations may apply to a noncitizen's potential service, based on the individual's status, particularly if the individual receives pay. House offices may wish to contact the Office of the General Counsel, Committee on Ethics, or the Committee on House Administration before employing a noncitizen as an intern. In the Senate, offices may wish to contact the Senate Disbursing Office, Office of Legal Counsel, Select Committee on Ethics, or the Committee on Rules and Administration for guidance on employing noncitizen interns.", "The House and Senate ethics manuals provide some general guidance for congressional offices on working with foreign-national interns. Conflict-of-interest considerations may affect the responsibilities an office chooses to assign to a foreign-national intern. Interns who are foreign-nationals should not be assigned duties that might influence U.S. policy in a way that benefits the intern's home country. As with interns who are U.S. citizens or nationals, a foreign-national intern who receives outside funding for an internship should not be assigned work responsibilities that might affect the intern's employer or other sponsoring organization."], "subsections": []}, {"section_title": "6. Can interns participate in campaign activities?", "paragraphs": ["Member offices are to be careful not to mix official congressional resources with campaign resources. Interns working in a congressional office may also work for a political campaign, but the two responsibilities are to be carefully delineated and kept separate so that congressional time, property, facilities, equipment, or other resources are not used for electoral campaigns. The prohibitions against using congressional resources for political purposes extend broadly and include any campaign activities within House or Senate offices, rooms, and buildings, even if such activities are conducted online using a staffer's personal account or device."], "subsections": []}, {"section_title": "7. Can interns be related to Members or regular employees?", "paragraphs": ["If an intern is paid, then the standard prohibitions regarding nepotism or employment of relatives established in law and House or Senate rules apply. Because each congressional office is its own hiring authority, an intern may be related to another Member or staff in a different office without violating these rules. The House Ethics Committee also notes that a Member in the House can accept volunteer services from immediate family. "], "subsections": []}, {"section_title": "8. Is there a minimum or maximum age for interns?", "paragraphs": ["Often, interns in congressional offices are college-age individuals or recent college graduates between 18 and 24 years old. Historically, individuals under 18 generally serve Congress as pages. There is no minimum age for congressional interns. If working with interns who are under 18, an office may want to consider the potential concerns related to working with minors and carefully evaluate the job-related skills and maturity of the prospective intern.", "There is also no maximum age for interns. Older individuals returning to higher education, considering a career change, or seeking a congressional internship for other reasons could also receive an educational benefit from such service and may have useful experience to share with a congressional office. In 1978, the Senate initiated a Senior Citizen Internship Program for individuals over 60 years old; the program operated for a number of years, but is currently inactive."], "subsections": []}, {"section_title": "9. How long does an internship last?", "paragraphs": ["Internship lengths often reflect time periods designated by the academic calendar, occurring, for example, over the course of the fall or spring semester, or during the summer. On their websites, some congressional offices advertise three-week internships, whereas others expect interns to serve for multiple months. Internship lengths within the same office can vary too, depending on the intern's availability and the office's resource constraints.", "There are no minimum lengths for House or Senate internships in statute, but certain considerations may affect the parameters offices choose for how long an internship should last. Congressional documents generally state that internships serve primarily as an educational experience. To meet this expectation, a congressional office may determine a minimum length for internships based on the amount of time it believes necessary to provide a sufficient learning opportunity.", "More detailed guidance is available for the maximum length of internships. Paid interns in the House can serve no longer than 120 days during a 12-month period. For unpaid interns, House guidance for Member offices suggests that \"limitations should be imposed on ... the duration of services any one volunteer may provide,\" to ensure \"that such voluntary assistance does not supplant the normal and regular duties of paid employees.\" The Senate Handbook notes that an internship should be for a total period not exceeding 12 months, and the Office of Workplace Rights (formerly Office of Compliance) has previously suggested the same maximum length for internships. "], "subsections": []}, {"section_title": "10. Can interns receive congressional pay?", "paragraphs": ["Interns may receive pay from the congressional office they work in, if the office decides to provide it. FY2019 appropriations for the House and Senate provide some designated funding for internships in Members' personal offices in each chamber. Members may also use their own office resources, such as from the Members' Representational Allowance (MRA) in the House and the Senators' Official Personnel and Office Expense Account (SOPOEA) in the Senate, to provide compensation for interns. Committees or other congressional offices may provide compensation for interns through their appropriate accounts designated for staff salaries. In the House, the Committee on House Administration has set a gross annual rate of pay for interns for Member and committee offices to follow. ", "Paid interns working in Washington, DC, may also be eligible for transit subsidies. Paid congressional interns are exempt from many of the provisions of the Fair Labor Standards Act of 1938 (FLSA) that otherwise apply to congressional staff following the passage of the Congressional Accountability Act (CAA) in 1995, including minimum wage requirements and overtime compensation.", "Previously, the Lyndon Baines Johnson Congressional Intern Program operated in the House from 1973 to 1994 and made two-month paid internships available for each Member office. Funds for this program have not been appropriated since the 103 rd Congress (1993-1994)."], "subsections": []}, {"section_title": "11. Can an intern be paid by another organization?", "paragraphs": ["Many educational institutions or other organizations sponsor congressional internships, and interns may receive stipends from these groups for their internships. Some of these internship opportunities are listed in CRS Report 98-654, Internships, Fellowships, and Other Work Experience Opportunities in the Federal Government . Some of these organizations operate internship programs in conjunction with congressional caucuses or other congressional entities to place paid interns in congressional offices. This is permissible, as long as there is no conflict of interest presented during the course of the internship. Additionally, the House and Senate ethics committees note that Members or staff cannot raise funds for programs that place interns or fellows in their own offices. When an intern is sponsored by an outside entity, ethics guidance says the intern should not be given responsibilities that could result in a direct or indirect benefit to the sponsor. If an intern is paid by an outside organization, congressional offices might take steps to ensure that the intern's duties do not supplant the regular duties of official staff, as this could be considered a violation of rules that prohibit House Members from using outside resources to conduct their official duties. "], "subsections": []}, {"section_title": "12. Can an intern receive school credit?", "paragraphs": ["The House and Senate expect that a congressional internship provides an educational experience but, institutionally, make no requirements that an intern receive school credit or be a currently enrolled student. Some congressional offices may choose to select interns on the basis of whether they will receive, or will not receive, academic credit for the experience. Each educational institution sets its own requirements for granting academic credit, and while some schools or academic departments encourage internships and grant academic credit for them, others do not allow students to receive academic credit for internships. School requirements may prevent a student from receiving academic credit for an internship experience that the intern may have personally found to be highly educational. A short internship, for example, may not meet a school's requirement for the number of hours served to receive credit. "], "subsections": []}, {"section_title": "13. How many interns can an office have?", "paragraphs": ["There is no minimum required number of interns for each congressional office; offices are not obligated to hire any interns unless they choose to. If interns are unpaid, there is no cap on the maximum number of interns for either the House or Senate. Offices, however, may want to ensure there is enough office space for interns to work in, and that there is enough work available to provide interns with a sufficient educational experience. If interns are paid, there may be a maximum number of interns an office can employ, based on applicable staff ceiling rules for the office. Under 2 U.S.C. Section 5321, interns in House Member offices paid by the Members' MRA count against the applicable staff ceiling for House personal offices. Interns in House Member offices paid under the intern allowance provided by the FY2019 legislative branch appropriations act ( P.L. 115-244 , \u00c2\u00a7120) do not count against the staff ceiling for House personal offices.", "The number of interns in offices can fluctuate from year to year and within seasons during the year. During the summer, for example, offices commonly have more interns than during other parts of the year. For Member offices, the location of an internship in Washington, DC, or in a state or district office may also affect the number of interested and available interns. "], "subsections": []}, {"section_title": "14. Are there differences between district/state and DC internships?", "paragraphs": ["The substance of the work performed in an internship may vary greatly between district/state offices and Washington, DC, offices if the roles assumed by those different Member offices vary. For example, an intern's tasks may involve more constituent service activities in a district or state office than they would in a Washington, DC, office where the emphasis may be more on legislative activities. The same House and Senate rules and policies generally apply to district or state office interns and to Washington, DC, office interns. Due to the high concentration of congressional interns on Capitol Hill, some training opportunities and congressional programs may be available to Washington, DC, interns, but not to interns serving in district or state offices further away. ", "House interns who are paid from the internship program funded in the FY2019 House appropriations bill ( P.L. 115-244 , \u00c2\u00a7120) must be based in a Member's Washington, DC, office. For security purposes, interns in Washington, DC, offices can obtain a congressional ID badge, available from the Office of the Sergeant at Arms for the appropriate chamber. District or state office interns are also eligible to receive ID badges at the request of the employing Member office. ID badges are to be returned to the Office of the Sergeant at Arms upon completion of an internship. "], "subsections": []}, {"section_title": "15. Are there mandatory trainings for interns?", "paragraphs": ["If interns are paid by Congress, then they are to take many of the mandatory trainings discussed below that new House or Senate employees are required to take. If interns are unpaid, however, fewer House or Senate trainings are mandatory for them. Because interns may be working with Congress or in a professional environment for the first time, congressional offices may want to have their interns attend additional trainings to better ensure they are prepared for their work and can represent the office appropriately. ", "All interns in the House of Representatives are required to complete a training session on workplace rights and responsibilities. Also in the House, any individual who has access to the House network needs to complete an information security training online. A paid intern who is employed for 60 days or more is to take a House ethics training, which is mandatory for new House employees. Unpaid interns or paid interns with a shorter internship are not required to take this ethics training. Other programs or courses offered by the House may be available to interns and helpful for their work duties.", "The Senate Office of Education and Training provides a number of courses specifically designed for interns. A few, including harassment prevention and an overview of the Senate Code of Conduct, are listed as required courses, whereas others, like information security training, are listed as recommended or optional. Many of these courses are online and can be accessed via the Senate intranet in a state or Capitol Hill office. Other courses offered by the Senate Office of Education and Training or the Senate Library may be open to interns if space permits. ", "Interns who are expected by their offices to use Congressional Research Service (CRS) resources or place requests must attend the \"Orientation Program for Interns and Volunteers\" offered by CRS. Interns who might need to use the Library of Congress resources more broadly can sign up for a research orientation covering the Library's collections, resources, and policies. If interns are responsible for hosting tours of the U.S. Capitol, they may be advised to sign up for a tour-leader training course offered by the Architect of the Capitol."], "subsections": []}, {"section_title": "16. What congressional programs are available for interns?", "paragraphs": ["Each summer, the Committee on House Administration and the Senate Committee on Rules and Administration cosponsor the Congressional Summer Intern Lecture Series, providing congressional interns with insights about politics and policymaking from Members of Congress, other government officials, and journalists. The lectures are scheduled from June through August, and the days and times vary based on speaker availability.", "Some programs and courses offered by CRS are open to congressional interns, provided that they have completed the CRS intern orientation. Current offerings are posted at http://www.crs.gov/events , and can help enrich the educational component of an intern's experience. Some video versions of past CRS events are also available at http://www.crs.gov/events/recordedevents , which may be helpful for district or state office interns."], "subsections": []}]}}
{"id": "RL34273", "title": "Federal Land Ownership: Acquisition and Disposal Authorities", "released_date": "2019-03-26T00:00:00", "summary": ["The federal government owns roughly 640 million acres, heavily concentrated in 12 western states. Four agencies\u2014the National Park Service (NPS), Fish and Wildlife Service (FWS), and Bureau of Land Management (BLM) in the Department of the Interior, and the U.S. Forest Service (FS) in the Department of Agriculture\u2014administer about 95% of those lands.", "The extent to which each of these four federal agencies have authority to acquire and dispose of land varies considerably. The BLM has relatively broad authority for both acquisitions and disposals under the Federal Land Policy and Management Act of 1976 (FLPMA). The agency also has other authorities for disposing of land, including two laws that allow the agency to retain the proceeds for subsequent land acquisition, among other purposes, and a law that allows transfers to governmental units and other entities for public purposes. By contrast, the NPS has no general authority to acquire land to create new park units or to dispose of park lands. The FS authority to acquire lands is mostly limited to lands within or contiguous to the boundaries of a national forest. The agency has various authorities to dispose of land, but they are relatively constrained and infrequently used. The FWS has various authorities to acquire lands but no general authority to dispose of its lands. The agency frequently uses acquisition authority under the Migratory Bird Conservation Act of 1929 because of the availability of funding through the Migratory Bird Conservation Fund.", "The nature of the acquisition and disposal authorities of the four federal agencies also varies. In general, the acquisition authorities are designed to allow the four agencies to bring into federal ownership lands that many contend could benefit from federal management. Disposal authorities generally are designed to allow agencies to convey land that is no longer needed for a federal purpose or that might be chiefly valuable for another purpose. Some of the authorities specify particular circumstances where they can be used, such as the conveyance of FS land for educational purposes and the disposal of BLM land for recreation and public purposes.", "Congress often faces questions on the adequacy of existing acquisition and disposal authorities; the nature, extent, and location of their use; and the extent of federal land ownership overall. The current acquisition and disposal authorities form the backdrop for consideration of measures to establish, modify, or eliminate authorities, or to provide for the acquisition or disposal of particular lands. In some cases, Congress enacts bills to provide authority to acquire or dispose of particular parcels where no standing authority exists and, in other cases, to direct or facilitate land transactions. Congress also addresses acquisition and disposal policy in the context of debates on the role and goals of the federal government in owning and managing land generally, and it has considered broader measures to dispose of lands or to promote acquisition.", "Other issues for Congress pertain to the sources and levels of funds for land acquisition. The Land and Water Conservation Fund (LWCF) is the primary source of funding for land acquisition. Congress has considered diverse measures related to the LWCF, such as legislation to make LWCF funding permanent and bills to direct LWCF monies to additional, nonacquisition purposes. Additionally, the FWS has the Migratory Bird Conservation Fund, an account with mandatory spending authority supported by revenue from three sources. The BLM also has mandatory spending authorities that allow the proceeds from land sales to be used for land acquisition, among other purposes."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The federal government owns roughly 640 million acres, more than a quarter of the land in the United States. These lands are heavily concentrated in 12 western states (including Alaska), where t he federal government owns roughly half of the overall land area. Four federal agencies\u2014the National Park Service (NPS), Fish and Wildlife Service (FWS), and Bureau of Land Management (BLM), all in the Department of the Interior (DOI), and the U.S. Forest Service (FS) in the Department of Agriculture\u2014administer about 95% of those lands.", "No single law provides authority for these four agencies to acquire and/or disposal of lands. Rather, Congress provided various acquisition and disposal authorities through laws enacted over more than a century. This report describes the primary authorities of the four agencies. ", "The extent to which each of the agencies has authority to acquire and dispose of land, and the nature of the authorities, varies considerably. Some of the agencies have relatively broad authority to acquire and/or dispose of land. Most notably, the BLM has relatively broad authority for both acquisitions and disposals. By contrast, the NPS has no general authority to acquire land to create new park units or to dispose of park lands. The extent of the acquisition and disposal authorities for the FS and the FWS are not nearly as broad as the BLM's but not nearly as restrictive as the NPS's. The FS authority to acquire lands is mostly limited to lands within or contiguous to the boundaries of a national forest. The agency has various authorities to dispose of land, but they are relatively constrained and infrequently used. The FWS has various authorities to acquire lands but no general authority to dispose of its lands.", "The acquisition authorities differ as to the circumstances in which they apply, and the disposal authorities likewise differ as to their purposes. Thus, where a specific acquisition or disposal by an agency is contemplated, the particular authority at issue should be consulted. In general, the acquisition authorities are designed to allow federal agencies to acquire lands that could be viewed as benefitting from federal management. Among other circumstances, acquisition might be authorized to bring inholdings or lands adjacent to federal lands into federal ownership to improve or simplify management of federal lands. Acquisitions also might be authorized to conserve species, protect natural and cultural resources, and increase opportunities for recreation. The disposal authorities generally are designed to allow federal agencies to dispose of land that is no longer required for a federal purpose, might be inefficient to manage, or might be chiefly valuable for another purpose. For instance, disposal might be authorized to allow lands to be used for agriculture, community development, mineral extraction, or educational purposes.", "Agencies also acquire and dispose of federal land in exchanges. Exchanges are not discussed separately in this report, as often the authorities to acquire and dispose of lands also apply to land exchange. However, there are provisions of law particularly applicable to exchanges. The exchange authorities for the NPS and the FWS are relatively narrow. The Federal Land Policy and Management Act of 1976 (FLPMA; 43 U.S.C. \u00a7\u00a71701-1781) provides broader exchange authority and is the main authority governing exchanges by the BLM and the FS."], "subsections": []}, {"section_title": "Issues for Congress", "paragraphs": ["Congress often faces questions on the adequacy of existing acquisition and disposal authorities; the nature, extent, and location of their use; the extent of federal land ownership overall; and the sources and levels of land acquisition funds, among other issues. The suitability of the acquisition and disposal authorities, and the extent and circumstances of their use by the agencies, forms the backdrop for congressional consideration of measures to establish, modify, or eliminate the use of authorities. With regard to the establishment of new authorities, for instance, some 115 th Congress proposals would authorize states to exchange land grant parcels for federal lands. Other measures would authorize the BLM and FS to convey small tracts to adjacent landowners and to govern the use of proceeds from these conveyances. Proposals to modify authorities include measures in the 115 th Congress to reauthorize and amend BLM authority to sell or exchange land under the Federal Land Transaction Facilitation Act (FLTFA; 43 U.S.C. \u00a7\u00a72301 et seq.), as well as bills to amend the Small Tracts Act (16 U.S.C. \u00a7521e) regarding the type and value of FS lands that can be disposed of and the use of related proceeds. Among the provisions to eliminate the use of authorities are those to prevent the disposal of federal land under the General Mining Law of 1872, which have been contained in annual Interior appropriations laws since FY1995. ", "In addition, Congress frequently considers legislation authorizing and governing the acquisition or disposal of specific parcels. For example, Title XXX of P.L. 113-291 contained various provisions to authorize the acquisition and/or disposal of land. Congress may consider such legislation to provide an agency with acquisition or disposal authority in a particular instance because it is lacking. In other cases, Congress directs a particular acquisition or disposal to facilitate the action. For instance, the legislation may seek to direct an acquisition based on Congress's assessment of public needs and priorities. It may expedite the process for acquiring a parcel of land, such as by limiting the assessments and evaluations that ordinarily would be required under law. The legislation also might authorize actions not ordinarily permitted, such as the conveyance of land at reduced or no cost rather than at fair market value. ", "Congress also addresses acquisition and disposal policy in the context of deliberations on the role and goals of the federal government in owning and managing land generally. The extent to which the federal government should own land remains controversial. Many westerners contend that there is excessive federal influence over their lives and economies and that the federal government should divest itself of many lands. Many others support the policy of retaining lands in federal ownership on behalf of the public and sometimes advocate adding more lands to enhance protection. Recent Congresses considered diverse bills pertaining to the extent of federal land ownership. Among others, 115 th Congress measures would authorize or direct the Secretary of the Interior and the Secretary of Agriculture to offer to sell a certain percentage of land in each of several fiscal years. Other bills provide that where a land management agency acquires land, an equal number of acres is to be offered for sale. "], "subsections": [{"section_title": "Acquisition Funding", "paragraphs": ["Another set of issues pertains to the sources and levels of funds for land acquisition. The principal financing mechanism for federal land acquisition is discretionary appropriations under the Land and Water Conservation Fund (LWCF). Provisions of the Land and Water Conservation Fund Act of 1965 (LWCF Act; 54 U.S.C. \u00a7\u00a7200301 et seq.) had provided for $900 million in specified revenues to be deposited in the LWCF annually. These provisions expired September 30, 2018. Each year, Congress determines the level of appropriations from the LWCF for federal land acquisition. Total appropriations for land acquisition and the amount provided to each of the federal land management agencies have varied substantially since the program's origin in 1965. In the 115 th Congress, some measures propose permanent reauthorization of the LWCF and/or mandatory appropriations at the authorized level. Advocates of such bills typically seek stable, predictable funding to promote a strong federal role in acquiring and managing sensitive resources. Other measures would direct a portion of funding to particular purposes, such as acquisitions in areas with restricted access for fishing, hunting, and other types of recreation. Still other proposals would allow LWCF to be used for a broader array of purposes, including nonacquisition purposes, due to concerns about the extent of federal land ownership and the availability of funding for other federal activities. ", "Additional sources of funding are available for some agencies or under certain authorities. For instance, the FWS has a mandatory source of funds for land acquisition through the Migratory Bird Conservation Fund, as discussed below. As another example, the BLM also has mandatory spending authorities that allow the agency to keep the proceeds of land sales and use these proceeds for subsequent acquisitions and other purposes. These authorities are discussed below. The application of mandatory spending authorities, including the uses of the proceeds, has been the subject of congressional debate. "], "subsections": []}]}, {"section_title": "Federal Land Acquisition Authorities", "paragraphs": ["As noted above, various laws authorizing and governing specific land acquisitions have been enacted. In addition, the four federal land management agencies have different standing authorities for acquiring lands. In general, all four agencies are authorized to accept land as gifts and bequests. In addition, each generally is authorized to use eminent domain \u2014taking private property, through condemnation, for public use\u2014while compensating the landowner. However, this practice is controversial, and it is rarely used by the land management agencies.", "The primary land acquisition authorities are described below for each of the four federal land management agencies. In general, the agencies are presented in the order of the breadth of their authorities, with the NPS (the narrowest authorities) first and the BLM (the broadest authorities) last. "], "subsections": [{"section_title": "National Park Service", "paragraphs": ["The NPS does not have standing authority to acquire lands for new or existing units of the National Park System, except in limited circumstances. Rather, most units have been created by Congress, and the law creating a park unit typically includes specific authority for the NPS to acquire nonfederal inholdings within the identified boundaries of that park. ", "The Secretary of the Interior is authorized to make certain boundary adjustments of park units for \"proper preservation, protection, interpretation, or management\" and to acquire the nonfederal lands within the adjusted boundary, under specified provisions and conditions (54 U.S.C. \u00a7100506(c)). Some of these conditions have been interpreted to apply particularly to boundary adjustments requiring land purchases, as opposed to those in which added lands are acquired by donation, transfer, or exchange. ", "The President has authority to create national monuments on federal lands under the Antiquities Act of 1906 (54 U.S.C. \u00a7\u00a7320301 et seq.). In total, 158 monuments have been created by presidential proclamation. Most are managed by the NPS, but some are managed by the BLM and other agencies.", "Under law, the Secretary of the Interior and the NPS have responsibilities related to the potential acquisition of lands for the National Park System. Among other requirements, the Secretary is directed \"to investigate, study, and continually monitor the welfare of\" areas that could potentially be added to the system and to report to Congress on possible additions (54 U.S.C. \u00a7100507). Furthermore, the general management plan for each unit is to include potential changes to the boundaries of the unit and the reasons for such changes (54 U.S.C. \u00a7100502). The Secretary also is to conduct a \"systematic and comprehensive review of certain aspects of the National Park System\" and to submit a related report to Congress at least every three years (54 U.S.C. \u00a7100505(a)) that includes a list of all authorized but unacquired lands within the boundaries of park units and a priority listing of these unacquired parcels (54 U.S.C. \u00a7100505(c))."], "subsections": []}, {"section_title": "Forest Service", "paragraphs": ["The Secretary of Agriculture has various authorities to acquire lands for the National Forest System (NFS). The NFS consists of 284 units covering 232.4 million acres of federal and nonfederal land, including national forests, national grasslands, purchase units, land utilization projects, and other areas. Today, only an act of Congress can create new NFS units, but the Secretary may acquire lands within or contiguous to the proclaimed exterior boundaries of an NFS unit. The NFS contains substantial acreage of nonfederal lands within the proclaimed boundaries of the system, particularly in the east, where national forests were established after extensive settlement. NFS units in the Eastern and Southern Regions average about 46% nonfederal land within their boundaries, while Western Region NFS units average about 10%. The FS has very limited regulatory authority over the uses of the 39.5 million acres of nonfederal land within the NFS. ", "The FS's primary land acquisition authority is the Weeks Act of 1911 (16 U.S.C. \u00a7515), which was used to acquire many of the lands that became the eastern national forests. The Weeks Act authority continues to be the agency's primary authority to acquire lands; however, acquisitions are now limited to lands within (or adjacent to) established NFS unit boundaries. The Weeks Act also authorizes the Secretary to modify the NFS unit boundary as needed to encompass new acquisitions. ", "Other laws authorize the FS to acquire lands for the national forests, typically in specific areas or for specific purposes. For example, Section 205 of the Federal Land Policy and Management Act (FLPMA; P.L. 94-579 ) authorizes the acquisition of access corridors\u2014including easements\u2014to national forests across nonfederal lands (43 U.S.C. \u00a71715(a)). Another example is the Act of August 3, 1956 (7 U.S.C. \u00a7428(a)), which authorizes the FS to acquire lands without any geographical limitations but does require a provision be made in a specific appropriation or other law. Another law authorizes proceeds from certain land sales or exchanges to be used for acquisitions, including for administrative sites and enhancement of recreational access. However, the acquisitions are limited to the state in which FS previously conveyed NFS land under specific disposal authorities, as discussed later in this report. Several other acquisition authorities apply to specific national forests, such as the Act of June 11, 1940, which authorizes the purchase of lands within the Angeles National Forest in California. In addition, the Secretary of Agriculture and the secretary of a military department that has lands within or adjacent to proclaimed NFS land may interchange lands, without reimbursement or transfer of funds. Many of the acquisition authorities also allow the FS to accept donations of land as specified. ", "Within the NFS, the Secretary of Agriculture also is authorized to acquire privately owned lands within or adjacent to designated wilderness areas (16 U.S.C. \u00a71134(c)), Wild and Scenic River corridors (16 U.S.C. \u00a71277), and certain segments of designated National Trails (16 U.S.C. \u00a71244), as specified by the law creating the trail. "], "subsections": []}, {"section_title": "Fish and Wildlife Service", "paragraphs": ["Lands may be added to the National Wildlife Refuge System (NWRS) in a number of ways, including through congressional and administrative actions and donations. A principal FWS land acquisition authority is the Migratory Bird Conservation Act of 1929 (MBCA; 16 U.S.C. \u00a7\u00a7715 et seq.). This act authorizes the Secretary of the Interior to recommend areas \"necessary for the conservation of migratory birds\" to the Migratory Bird Conservation Commission, after consulting with the relevant governor (or state agency) and appropriate local government officials (16 U.S.C. \u00a7715a and \u00a7715c). In addition, the state in which the purchase is located must have consented to the acquisition by law (16 U.S.C. \u00a7715f and \u00a7715k-5). The Secretary may then purchase or rent areas or interests therein approved by the commission and acquire by gift or devise any area or interest therein (16 U.S.C. \u00a7715d).", "The MBCA authority is used frequently because of the availability of funding through the Migratory Bird Conservation Fund (MBCF, 16 U.S.C. \u00a7718d). The MBCF is supported by multiple sources of funding, including three major sources: the sale of hunting and conservation stamps (commonly known as duck stamps); import duties on arms and ammunition; and a portion of certain refuge entrance fees. MBCF funds are permanently appropriated to the extent of receipts and, after paying certain administrative costs, may be used for the \"location, ascertainment, and acquisition of suitable areas for migratory bird refuges ...\" (16 U.S.C. \u00a7718d(b)). The predictability of funding and permanent authority for use makes the MBCF, and thus the MBCA, particularly important for FWS land acquisition and unique among the four agencies.", "Other laws provide general authority to expand the NWRS, including the Fish and Wildlife Coordination Act of 1934 (16 U.S.C. \u00a7\u00a7661-667a), the Fish and Wildlife Act of 1956 (16 U.S.C. \u00a7\u00a7742a et seq.), and the Endangered Species Act of 1973 (16 U.S.C. \u00a7\u00a71531-1544). The National Wildlife Refuge System Administration Act of 1966 (16 U.S.C. \u00a7\u00a7668dd-668ee) authorizes the Secretary of the Interior to acquire land or interests therein through donated funds or exchange (16 U.S.C. \u00a7668dd(b)). Further, FLPMA authorizes the Secretary of the Interior to withdraw lands from the public domain for creating or adding to refuges (which would be an interagency transfer), although withdrawals exceeding 5,000 acres are subject to congressional approval (43 U.S.C. \u00a71714(c)). In contrast to NPS and FS land acquisition, where the lands generally must be within the boundaries of established units, the FWS can acquire new lands to create a new refuge or to expand an existing one under the general FWS authorities cited above, as well as under certain other laws.", "Some national wildlife refuge (NWR) units have been created by specific acts of Congress, such as Protection Island NWR (WA) and Bayou Sauvage Urban NWR (LA) (16 U.S.C. \u00a7668dd note). Units also can be created by executive order; for example, the Midway Atoll NWR was created by President Clinton in Executive Order 13022."], "subsections": []}, {"section_title": "Bureau of Land Management", "paragraphs": ["The BLM has broad, general authority to acquire lands, principally under Section 205 of FLPMA. Specifically, the Secretary of the Interior is authorized to acquire, by purchase, exchange, donation, or use of eminent domain, lands or interests therein (43 U.S.C. \u00a71715(a)). The BLM acquires land or interests in land, including inholdings, for a variety of reasons. These include to protect natural and cultural resources, to increase opportunities for public access and recreation, and to improve management of lands."], "subsections": []}]}, {"section_title": "Federal Land Disposal Authorities", "paragraphs": ["As noted above, various laws directing the disposal of particular lands sometimes have been enacted. In addition, the four federal land management agencies have different standing authorities for disposing of lands. The specific disposal authorities are discussed below for each of the four agencies in the order of their apparent breadth, with the NPS (the narrowest authorities) first and the BLM (the broadest authorities) last."], "subsections": [{"section_title": "National Park Service", "paragraphs": ["The NPS does not have general authority to dispose of National Park System lands. Units and lands of the Park System that were established by acts of Congress can be disposed of only by acts of Congress. Preservation of park units is a management goal and provisions of law limit the power of the Secretary of the Interior to dispose of land in changing park boundaries. Although the Secretary can, under specified conditions, make boundary changes that concurrently add and remove land within the boundary, minor boundary revisions solely to remove NPS acreage can be made only by Congress. Also, the Secretary can acquire by exchange lands that are adjacent to a boundary revision, but the Secretary cannot dispose of NPS land to do so (54 U.S.C. \u00a7100506(c)).", "Presidents have modified the boundaries of national monuments established by previous presidential proclamations, in some cases reducing the size of the monument. However, no president has terminated a monument established by proclamation."], "subsections": []}, {"section_title": "Fish and Wildlife Service", "paragraphs": ["The FWS does not have general authority to dispose of its lands. With certain exceptions, wildlife refuge lands administered by the FWS can be disposed only by an act of Congress (16 U.S.C. \u00a7\u00a7668dd(a)(5) and (6)). For refuge lands reserved from the public domain, FLPMA prohibits the Secretary of the Interior from modifying or revoking any withdrawal which added lands to the NWRS (43 U.S.C. \u00a71714(j)). For acquired lands, disposal is allowed only if: (1) the disposal is part of an authorized land exchange (16 U.S.C. \u00a7\u00a7668dd(a)(6) and (b)(3)); or (2) the Secretary determines the lands are no longer needed and the Migratory Bird Conservation Commission approves the disposal (16 U.S.C. \u00a7668dd(a)(5)). In the latter case, the disposal must recover the acquisition cost or be at the fair market value (whichever is higher), and the receipts must be deposited in the Migratory Bird Conservation Fund."], "subsections": []}, {"section_title": "Forest Service", "paragraphs": ["The Secretary of Agriculture has numerous authorities to convey lands within proclaimed NFS boundaries out of federal ownership\u2014through sale or exchange\u2014although previous, broader authorities have been modified or revoked. Many of the authorities put constraints on land disposal, such as applying only to a specific geographical area or to the disposal of particular administrative properties or facilities. Many of the authorities are used in conjunction with FLPMA and other federal law and as such may place requirements on the sale or exchange of land. This includes obtaining at least fair market value for the sale of federal lands; requiring that nonfederal land exchanged for federal land be in the same state; and requiring exchanged lands to be of equal value, although value may be partially equalized with a cash payment (43 U.S.C. \u00a71716). ", "The General Exchange Act of 1922 (16 U.S.C. \u00a7485) authorizes the exchange of NFS land or timber that was reserved from the public domain if the Secretary determines it will be in the public interest. The nonfederal land must be within the same state and within the exterior boundary of a national forest, and it must be chiefly valuable for national forest purposes, among other provisions. The Weeks Act of 1911 allows for similar exchanges for acquired NFS lands (16 U.S.C. \u00a7516).", "The 1983 Small Tracts Act authorizes the Secretary to dispose of NFS land by sale or exchange, generally up to certain specified acreage limits. The disposal may be", "To improve management efficiencies where NFS lands are interspersed with nonfederal mineral rights owners, or if the Secretary determines the parcels to be inaccessible, physically isolated from other federal land, or to have lost national forest character (40 acres maximum); To relieve encroachments including due to erroneous surveys, or encroachments by a permanent habitable improvement if there is no evidence that the encroachment was intentional or due to negligence (10 acres maximum); To dispose of unneeded federal rights-of-way substantially surrounded by nonfederal lands (no specified acreage limitation); and If the parcel is used as a cemetery, landfill, or sewage plant pursuant to a special use authorization for the use and occupancy of NFS land (no specified acreage limitation) (16 U.S.C. \u00a7521e). ", "The conveyance must be determined to be in the public interest and the tracts may not be valued at more than $500,000. The land can be disposed of for cash, lands, interests in land (such as an easement), or any combination thereof for at least the value of the land being sold or exchanged (16 U.S.C. \u00a7521d) plus \"all reasonable costs of administration, survey, and appraisal incidental to such conveyance\" (16 U.S.C. \u00a7521f). In some cases, the proceeds may be used for specified land acquisition purposes.", "The 1958 Townsites Act authorizes the Secretary to transfer up to 640 acres of NFS land adjacent to communities in Alaska or the 11 western states for townsites, if the \"indigenous community objectives ... outweigh the public objectives and values which would be served by maintaining such tract in Federal ownership\" (16 U.S.C. \u00a7478a). Public notice of the application for such transfer is required, and upon a \"satisfactory showing of need,\" the Secretary may offer the land to a local governmental entity at \"not less than the fair market value.\"", "The Education Land Grant Act, also known as the Sisk Act (16 U.S.C. \u00a7479a), authorizes the Secretary to transfer up to 80 acres of NFS land for a nominal cost upon written application of a public school district. It provides for reversion of the title to the federal government if the lands are not used for the educational purposes for which they were acquired.", "There are a few other specific authorities that allow for the disposal of NFS lands. For example, the 1911 Weeks Act authorizes the disposal of NFS lands that are \"chiefly valuable for agriculture\" but were acquired inadvertently or otherwise, if agricultural use will not injure the forests or streamflows and the lands are not needed for public purposes. The lands can be sold as homesteads in parcels of up to 80 acres (16 U.S.C. \u00a7519). The Bankhead-Jones Farm Tenant Act of 1937 (7 U.S.C. \u00a7\u00a71010-1012) also authorizes the disposal of lands acquired under its authority, although the FS has adopted regulations stating that the Bankhead-Jones lands comprising the national grasslands will be held permanently (36 C.F.R. \u00a7213.1(b))."], "subsections": []}, {"section_title": "Bureau of Land Management", "paragraphs": ["The BLM can dispose of land under several authorities. They include (1) exchanges and sales under FLPMA, (2) sales or exchanges under the FLTFA, (3) transfers to other governmental units or nonprofit entities for public purposes, (4) patents under the General Mining Law of 1872, and (5) geographically limited sale authorities.", "With regard to exchanges under FLPMA, the exchanges must serve the public interest, and the federal and nonfederal lands in the exchange must be located in the same state and be of equal value (with cash equalization payments possible), among other requirements (43 U.S.C. \u00a71716). With regard to sales under FLPMA, the BLM is authorized to sell certain tracts of public land that are identified through the land-use planning process. Such tracts must meet specific criteria (43 U.S.C. \u00a71713(a)):", "(1) such tract because of its location or other characteristics is difficult and uneconomic to manage as part of the public lands, and is not suitable for management by another Federal department or agency; or", "(2) such tract was acquired for a specific purpose and the tract is no longer required for that or any other Federal purpose; or", "(3) disposal of such tract will serve important public objectives, including but not limited to, expansion of communities and economic development, which cannot be achieved prudently or feasibly on land other than public land and which outweigh other public objectives and values, including, but not limited to, recreation and scenic values, which would be served by maintaining such tract in Federal ownership.", "The size of the tracts for sale is determined by \"the land use capabilities and development requirements.\" Proposals to sell tracts of more than 2,500 acres first must be submitted to Congress and can be disapproved by Congress. Lands may not be sold at less than their fair market value. They generally must be sold through competitive bidding, although modified competition and noncompetitive sales are allowed.", "FLTFA provides for the sale or exchange of BLM lands identified for disposal under BLM land- use plans. The law create s a separate Treasury account for most of the proceeds (96%) from the sale or exchange, and it provide s for the use of those funds by the Secretary of the Interior and the Secretary of Agriculture. The Secretaries may acquire nonfederal lands, specifically inholdings , lands adjacent to federal lands that contain exceptional resources , and areas adjacent to inaccessible lands that are open to recreation. Up to 20% of the funds in the account may be used for administrative costs, and at least 80% of the funds for acquisition are to be in the state in which the funds are generated .", "The Recreation and Public Purposes Act (43 U.S.C. \u00a7869) authorizes the Secretary, upon application by a qualified applicant, to", "dispose of any public lands to a State, Territory, county, municipality, or other State, Territorial, or Federal instrumentality or political subdivision for any public purposes, or to a nonprofit corporation or nonprofit association for any recreational or any public purpose consistent with its articles of incorporation or other creating authority.", "The lands can be sold or leased, and the act specifies conditions, qualifications, and acreage limitations for transfer. The price of the land depends on the type of entity that will receive it, for instance, whether a state government or a nonprofit organization. The price also depends on the intended use of the land, with some sales and leases made at no cost. ", "Although the BLM can dispose of lands through patents under the General Mining Law of 1872, since FY1995 a series of annual moratoria on issuing mineral patents has been enacted into law. These moratoria, contained in the annual Interior appropriations laws, have effectively prevented this means of federal land disposal. Specifically, the Mining Law allows access to and development of hardrock minerals on federal lands that have not been withdrawn from entry. With evidence of valuable minerals and sufficient developmental effort, the Mining Law allows mining claims to be patented, with full title (of surface and mineral rights) transferred to the claimant upon payment of the appropriate fee. Nonmineral lands used for associated milling or other processing operations can also be patented (30 U.S.C. \u00a742). Patented lands may be used for purposes other than mineral development. ", "The BLM also has geographically limited land sale authorities. The program with the largest revenue stream has been the Southern Nevada Public Land Management Act of 1998, which allows the Secretary of the Interior to sell or exchange certain lands around Las Vegas. The BLM and the local government unit jointly decide on the lands to be offered for sale or exchange. In general, 85% of the proceeds are deposited into a special account, and are available to the Secretary of the Interior for land acquisition in Nevada and other purposes in the state, such as certain capital improvements and development of parks, trails, and natural areas. The other 15% of the proceeds are for state or local purposes, specifically the State of Nevada General Education Fund (5%) and the Southern Nevada Water Authority (10%). Other provisions of law similarly provide for BLM land sales in particular areas (mostly in Nevada), with specific allocations of the proceeds. Further, the BLM continues to dispose of land in Alaska as required by law, such as through transfers to the state of Alaska and to Alaska native corporations. A total of about 150 million acres in Alaska will be transferred from federal to state and private ownership. "], "subsections": []}]}]}}
{"id": "R44623", "title": "Commemorative Coins: Background, Legislative Process, and Issues for Congress", "released_date": "2019-02-28T00:00:00", "summary": ["Commemorative coins are produced by the U.S. Mint pursuant to an act of Congress and are often proposed by Members of Congress as part of their representational duties. These coins are legal tender that celebrate and honor American people, places, events, and institutions. Overall, 152 commemorative coins have been authorized since 1892. Since 1982, when Congress reinstituted the commemorative program, 91 commemorative coins have been authorized. Since 1998, only two coins may be authorized for any given year. To date, Congress has authorized commemorative coins to be issued through 2020.", "The issuance of commemorative coins can be broadly divided into two eras: historical coins and modern coins. Historical commemorative coins were those authorized between 1892 and 1954 and generally celebrated anniversaries, public events, or the construction of new memorials. These coins were sold by the government to the sponsor organization, which then resold the coins to the public at a higher price to earn money to support their mission.", "In 1939, Congress stopped authorizing new coins because a glut of commemorative coins on the market had caused their value to decline, and the U.S. Treasury became concerned that so many coins might facilitate counterfeiting. These sentiments were echoed by President Dwight D. Eisenhower, who in 1954 vetoed legislation for a half-dollar honoring the tercentennial of New York City and remarked that \"large quantities [of coins] have remained unsold and have been returned to the mints for melting.\" The historical era concluded with the minting of George Washington Carver and Booker T. Washington half-dollars between 1951 and 1954.", "The modern commemorative coin era began in 1982, when Congress authorized coins to celebrate the 250th anniversary of George Washington's birth. Between 1982 and 1997, prior to the Commemorative Coin Reform Act (CCRA) of 1996's statutory limitation of two commemorative coins issued per year, 47 commemorative coins were authorized and minted. Between 1998 and 2018, an additional 41 coins were authorized and minted. Three additional coins have been authorized, two in 2019 and one in 2020 (to date).", "Commemorative coin legislation generally has a specific format. Once a coin is authorized, it follows a specific process for design and minting. This process includes consultation and recommendations by the Citizens Coin Advisory Commission (CCAC) and the U.S. Commission of Fine Arts (CFA), pursuant to any statutory instructions, before the Secretary of the Treasury makes the final decision on a coin's design. Following the conclusion of a coin program, designated recipient organizations may receive surcharge payments, once the U.S. Mint has recouped all costs associated with producing the coin.", "Should Congress want to make changes to the commemorative coin process, several individual and institutional options might be available. The individual options include decisions made by Members of Congress as to which people, places, events, or institutions should be celebrated; which groups should receive potential surcharge payments; and any specific design requirements Congress might want to request or require. The institutional options could include House, Senate, or committee rules for the consideration of commemorative coin legislation and whether the statutory maximum of two coins minted per year is too many or too few."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Commemorative coins are coins that are \"produced with the primary intention of creating a special souvenir to be sold (at a premium above face value) to observe or memorialize an anniversary, special occasion, or other event.\" Produced by the U.S. Mint pursuant to an act of Congress, these coins celebrate and honor American people, places, events, and institutions. Although they are considered legal tender, they are not minted for general circulation. Instead, they are designed to be collected and to help designated groups raise money to support group activities. Commemorative coin legislation is often proposed by Members of Congress as part of their representational duties.", "The first commemorative coin was authorized in 1892 for the World's Columbian Exposition in Chicago. Issued as a silver half-dollar, the proceeds for the sale of the coin were used \"for the purpose of aiding in defraying the cost of completing in a suitable manner the work of preparation for inaugurating the World's Columbian Exposition.\"", "Beginning in 1892 and continuing to the present day\u2014with a hiatus between 1954 and 1981\u2014coins have been a part of the commemoration of people, places, events, and institutions. This report examines the origins, development, and current practices for commemorative coins, including the authorization process; the design of coins; and issues for congressional consideration, including the disbursement of surcharges, the number of coins minted per year, differences between the number of authorized coins and coins sold, and requirements for legislative consideration in the House and Senate."], "subsections": [{"section_title": "Historical Commemorative Coins", "paragraphs": ["Since 1892, Congress has authorized 152 new commemorative coins. Sixty of these coins were authorized between 1892 and 1954. During this period, most commemorative coins celebrated state anniversaries (e.g., Connecticut's tercentennial in 1935), expositions and event anniversaries (e.g., the Lexington-Concord Sesquicentennial in 1925 or the Louisiana Purchase Exposition in 1903), or helped support memorials (e.g., the Grant Memorial in 1922 or the Stone Mountain Memorial in 1925). During this time period, coins \"were sold to sponsoring organizations, which resold them to the public at higher prices as a means of fundraising.\" The authorization of new commemorative coins was \"discontinued by Congress in 1939, with the exception of three coins issued through 1954.\" For a list of historical commemorative coins authorized between 1892 and 1954, see Appendix A .", "Between 1954 and 1981, Congress did not authorize any new commemorative coins. The moratorium on new commemorative coins was in part because public interest in the coins had waned and the Department of the Treasury was concerned that \"multiplicity of designs on United States coins would tend to create confusion among the public, and to facilitate counterfeiting.\" In his February 1954 veto statement to Congress on S. 2474 (83 rd Congress), which would have authorized a 50-cent piece for the tercentennial of New York City, President Eisenhower cited a diminishing interest among the public for the collection of commemorative coins. President Eisenhower stated:", "I am further advised by the Treasury Department that in the past in many instances the public interest in these special coins has been so short-lived that their sales for the purposes intended have lagged with the result that large quantities have remained unsold and have been returned to the mints for melting."], "subsections": []}, {"section_title": "Modern Commemorative Coins", "paragraphs": ["In 1982, Congress resumed the authorization of commemorative coins with the enactment of a bill to issue a commemorative half-dollar for George Washington's 250 th birthday. With the issuance of new commemorative coins, the \"range of subject matter expanded to include subjects such as women, historical events, and even buildings and landscapes.\" Additionally, the concept of surcharges as a method to direct money to designated groups was introduced. The idea of a surcharge\u2014a statutorily authorized \"dollar amount added to the price of each coin\" \u2014was not without controversy. \"These related surcharges became controversial with collectors, many of whom resented making involuntary donations when they bought coins. Today, the practice ... is ... the linchpin that has ignited most commemorative programs\u2014as potential recipients of the surcharge launch ... lobbying campaigns in Congress.\"", "Commemorative coins authorized during the modern period can be subdivided into coins minted between 1982 and 1997, and coins minted since 1998. In 1996, the Commemorative Coin Reform Act (CCRA) was enacted to (1) limit the maximum number of different coin programs minted per year; (2) limit the maximum number of coins minted per commemorative coin program; and (3) clarify the law with respect to the recovery of Mint expenses before surcharges are disbursed and conditions of payment of surcharges to recipient groups. The CCRA restrictions began in 1998."], "subsections": [{"section_title": "Commemorative Coins, 1982-1997", "paragraphs": ["Between 1982 and 1997, Congress authorized 47 commemorative coins. In several cases, multiple coins were authorized to recognize specific events, including the 1984 Summer Olympics in Los Angeles and the 1996 Summer Olympics in Atlanta. See Appendix B for a list of commemorative coins authorized by Congress prior to the two-per-year limit imposed by the CCRA."], "subsections": []}, {"section_title": "Commemorative Coins, 1998-Present", "paragraphs": ["As noted above, the CCRA limited the U.S. Mint to issuing two coins per year, beginning in 1998. This action was taken in response to the proliferation of commemorative coins authorized since the program was restarted in 1982. Between 1982 and 1997, as many as six different coins were minted in a single year (1994). Ten distinct coins were issued each year (eight Olympic coins per year in addition to two other commemorative coin programs) in 1995 and 1996. Starting in 1998, a maximum of two coins were to be authorized for minting in a given year. Even with this restriction, however, three coins were minted in 1999. Additionally, on two occasions, only one coin was authorized for a given year\u20142003 and 2008. Table 1 lists authorized commemorative coins since 1998, including their authorizing statute.", "As listed in Table 1 , a total of 41 commemorative coins were struck by the U.S. Mint between 1998 and 2018. The average coin minted during this time period was authorized three years prior to being struck, with the longest time period between authorization and minting being the West Point Bicentennial commemorative coin, which was authorized in 1994 to be struck in 2002. The shortest time period between authorization and minting was the San Francisco Old Mint commemorative coin, which was authorized and struck in the same year: 2006.", "In addition to completed commemorative coin programs, Congress has authorized coins to be minted in 2019 and future years. Currently, coins are authorized for 2019 and 2020. No coins are currently authorized for 2021 or beyond. Table 2 lists current and future commemorative coins, including their authorizing statute.", "Each Congress, several proposals are introduced to authorize new commemorative coins. Table 3 lists proposals for new commemorative coins introduced in the 115 th Congress. These bills would have authorized coins for minting between 2017 and 2022. Legislation that became law\u2014American Legion 100 th Anniversary and the Naismith Memorial Basketball Hall of Fame\u2014is not included in Table 3 ."], "subsections": []}]}]}, {"section_title": "Authorizing Commemorative Coins", "paragraphs": [], "subsections": [{"section_title": "Legislative Features", "paragraphs": ["Commemorative coin legislation generally has certain features, including", "findings that summarize the commemorative subject's history and importance; specifications for denominations, weight, and metallic makeup; design requirements, including required dates, words, and images; start and end dates for minting coins and any other limitations; requirements for selling coins; coin surcharge and distribution to designated groups; and assurances that costs of the coin program are recouped by the U.S. Mint.", "The following provides examples of the features generally found in a commemorative coin bill."], "subsections": [{"section_title": "Findings", "paragraphs": ["Commemorative coin legislation typically includes a section of findings. These include historical facts about the people, places, events, and institutions being honored by the coin. For example, the legislation to authorize the Star-Spangled Banner commemorative coin stated:"], "subsections": []}, {"section_title": "Coin Specification", "paragraphs": ["The coin specification section typically provides details on the type and number of coins authorized to be minted. Additionally, this section generally includes language that makes the coin legal tender and a numismatic item. In some cases, this section also includes specific language on coin design. For example, the legislation authorizing the National Baseball Hall of Fame commemorative coin includes language on the three types of coins authorized\u2014$5 gold coin, $1 silver coin, and half-dollar clad coin\u2014and a sense of Congress that the reverse side of the coin should be \"convex to more closely resemble a baseball, and the obverse concave.\""], "subsections": []}, {"section_title": "Design of Coins", "paragraphs": ["Commemorative coin legislation also typically specifies requirements for the design of the coin. These include official language on words or dates that are to appear on the coin and instructions about how the design might be chosen. For example, the legislation to authorize the Civil Rights Act of 1964 commemorative coin stated:"], "subsections": []}, {"section_title": "Issuance of Coins", "paragraphs": ["The issuance of coins section typically specifies the time period that the coin will be available for sale and provides any instructions to the Secretary of the Treasury as to which mint location should strike the coins and the quality of the coins to be issued. For example, the March of Dimes commemorative coin authorization stated:"], "subsections": []}, {"section_title": "Sale of Coins", "paragraphs": ["The sale of coins section typically sets the sale price of the coin and provides instructions to the Mint on bulk sales and prepaid coin orders. For example, the statute authorizing the Five-Star Generals commemorative coin stated:"], "subsections": []}, {"section_title": "Surcharges", "paragraphs": ["The surcharges section of the legislation typically sets the surcharges (amount above the face value that the U.S. Mint charges) per coin and designates the distribution of these surcharges to recipient organizations. For example, the statute to authorize the U.S. Army commemorative coin stated:", "More information on surcharges and disbursement to designated recipient organizations can be found below under \" Disbursement of Surcharges .\""], "subsections": []}, {"section_title": "Financial Assurances", "paragraphs": ["Some bills have included a section on financial assurances. This section generally states that minting coins will not result in a net cost to the government. The Mint is currently required to recover its expenses before it can disburse potential surcharges to recipient organizations designated in a commemorative coin statute. The Mint has stated that all commemorative coin programs have operated at no cost to the taxpayer since 1997. For example, the statute to authorize the American Legion 100 th Anniversary commemorative coin stated:"], "subsections": []}]}, {"section_title": "Consideration of Legislation in Congress", "paragraphs": ["Once a commemorative coin bill is introduced, it is typically referred to the House Committee on Financial Services or the Senate Committee on Banking, Housing and Urban Affairs.", "Neither House nor Senate rules provide any restrictions specifically concerning consideration of commemorative coin legislation on the House or Senate floor. Pursuant to Senate and House rules, the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services have jurisdiction over commemorative coin legislation.", "In the Senate, the Banking, Housing and Urban Affairs Committee rules place a minimum on the number of cosponsors a commemorative coin bill must have before committee consideration. Committee Rule 8 requires that \"at least 67 Senators must cosponsor any ... commemorative coin bill or resolution before consideration by the Committee.\"", "The rules of the House Financial Services Committee adopted for the 116 th Congress do not specifically address committee consideration of commemorative coin legislation, although informal practices may exist. "], "subsections": []}]}, {"section_title": "Design of Coins", "paragraphs": ["After Congress has authorized a commemorative coin, the U.S. Treasury begins the coin design process. This process involves consultation with the Citizens Coinage Advisory Committee (CCAC) and a design recommendation by the U.S. Commission of Fine Arts (CFA). The final decision on a coin's design is made by the Secretary of the Treasury. "], "subsections": [{"section_title": "Citizens Coinage Advisory Committee", "paragraphs": ["Established by P.L. 108-15 , the CCAC advises the Secretary of the Treasury on theme and design of all U.S. coins and medals. For commemorative coins, the CCAC advises the Secretary with regard to events, persons, or places to be commemorated, the mintage level of coins, and commemorative coin designs.", "The CCAC consists of 11 members appointed by the Secretary of the Treasury, with four persons appointed upon the recommendation of the congressional leadership (one each by the Speaker of the House, the House minority leader, the Senate majority leader, and the Senate minority leader). The CCAC meets several times each year to consider design suggestions for coins and medals. For each coin considered, the CCAC provides advice to the Secretary \"on thematic, technical, and design issues related to the production of coins.\" Recommendations are then published to the committee's website, at http://www.ccac.gov .", "When making recommendations to the Secretary, the CCAC considers several design aspects. Figure 1 shows the CCAC's \"Design Aspects We Look For,\" when advising groups on coin design. ", " Figure 2 shows examples of U.S. Commemorative coins. These include the first U.S. commemorative coin (1893 World's Columbian Exposition half-dollar), one of the best-selling commemorative coin programs of all time (1986 Statue of Liberty half-dollar), and one of the most recent (2016 National Park Service Centennial)."], "subsections": []}, {"section_title": "U.S. Commission of Fine Arts", "paragraphs": ["The U.S. Mint also makes a formal presentation of design options to the U.S. Commission of Fine Arts (CFA). Established in 1910, the CFA advises \"upon the location of statues, fountains, and monuments in the public squares, streets, and parks in the District of Columbia, the selection of models for statues, fountains, and monuments erected under the authority of the Federal Government; the selection of artists; and questions of art generally when required to do so by the President or a committee of Congress.\" This includes review of commemorative coins when they are presented by the U.S. Mint and the issuance of recommendations for a coin's design.", "For example, in March 2016, the U.S. Mint presented several alternative designs for the Boys Town Centennial Commemorative Coin program. In a letter to the U.S. Mint, the CFA provided recommendations on the design for each of the three statutorily required coins. CFA's letter stated:"], "subsections": []}, {"section_title": "U.S. Mint", "paragraphs": ["After receiving advice from the CCAC and the CFA, the Secretary of the Treasury, through the U.S. Mint, finalizes the coin's design and schedules it for production at the appropriate time. In some cases, the U.S. Mint holds a competition for coin designs. For example, in February 2016, the U.S. Mint announced a design competition for the 2018 commemorative coin to World War I American Veterans. Additionally, designers competed for the 2018 Breast Cancer Awareness commemorative coin. The final design was announced in October 2017."], "subsections": []}, {"section_title": "Commemorative Coin Timeline", "paragraphs": ["From authorization to coin launch, the CCAC has estimated that a commemorative coin takes a minimum of between 56 and 60 weeks. This includes the coin design process, engraving, marketing, printing materials, and coin launch. This timeline, however, does not account for coin programs that might be authorized years in advance of the coins' scheduled release. In those circumstances, the process from authorization to coin launch will be considerably longer. The process, as described by the CCAC, is shown in Figure 3 ."], "subsections": []}]}, {"section_title": "Disbursement of Surcharges", "paragraphs": ["As discussed above under \" Authorizing Commemorative Coins ,\" each authorizing statute sets a surcharge amount per coin and designates one or more recipient organizations to receive the surcharges. A designated recipient organization is \"any organization designated, under any provision of law, as the recipient of any surcharge imposed on the sale of any numismatic item.\"", "Commemorative coin legislation generally includes the name(s) of the organization(s) that will benefit from the sale of the coin and how the surcharges will be divided, if necessary. For example, the legislation authorizing a commemorative coin for the U.S. Marshals Service specified four groups to receive distribution from the program. They were", "the U.S. Marshals Museum, Inc., the National Center for Missing & Exploited Children, the Federal Law Enforcement Officers Association Foundation, and the National Law Enforcement Officers Memorial Fund.", "Additionally, the law might also specify how much money the designated recipient organization should receive. For th e Marshals Service commemorative coin, the first $5 million was specified for the U.S. Marshals Museum. After that, additional surcharges were divided equally among the National Center for Missing & Exploited Children, the Federal Law Enforcement Officers Association Foundation, and the National Law Enforcement Officers Memorial Fund.", "Once a commemorative coin has been authorized, the CCRA requires that certain standards be met before surcharge payments can be distributed to designated recipient organizations:", "1. The recipient organization must raise funds from private sources \"in an amount that is equal to or greater than the total amount of the proceeds of such surcharge derived from the sale of such numismatic item.\" 2. The qualifying funds raised from private sources must be for the purposes specified by the enabling legislation. 3. The U.S. Mint must recover \"all numismatic operation and program costs allocable to the program.\" 4. The recipient organization must submit an audited financial statement and submit the results of annual audits to demonstrate, to the satisfaction of the Secretary of the Treasury, that it has qualified for surcharge proceeds and is properly expending them.", "Guidance provided by the U.S. Mint in Surcharge Recipient Organization's Compliance Procedures for Surcharge Eligibility & Payments includes further details of the requirements placed on designated recipient groups before surcharge payments can be made . These include requirements for documentation on the amount of money raised from private sources and the period of fund raising. To document these requirements, designated recipient groups must fill out a \"Schedule of Funds Raised From Private Sources,\" which is provided in an appendix to the Surcharge Recipient Organization's Compliance Procedures for Surcharge Eligibility & Payments publication. ", "Following completion of these tasks, and after the Mint has recouped any expenses related to minting the commemorative coin, surcharges are then disbursed to the designated recipient organization. Since 1982, when the commemorative coin program was restarted, the U.S. Mint has raised more than $506 million in surcharges for various designated recipient groups. Production costs for each commemorative coin can differ based on design, administrative costs, and metals used. For example, Table 4 shows how the U.S. Mint calculated surcharges for a commemorative coin for the 2007 Benjamin Franklin Commemorative Coin."], "subsections": []}, {"section_title": "Issues for Congress", "paragraphs": ["As Members of Congress contemplate introducing legislation, and the House or the Senate potentially considers commemorative coin measures, there are several issues that could be considered. These can be divided into issues for individual Members of Congress with respect to individual coins, and issues for Congress as an institution. Individual issues include choices Member may make about which people, places, events, or institutions might be honored; which groups might receive surcharge payments; and whether specific design elements might be required for a proposed coin. Institutional issues might include committee or chamber rules on the consideration of commemorative coins and the limit on the number of commemorative coins minted per year."], "subsections": [{"section_title": "Individual Considerations", "paragraphs": [], "subsections": [{"section_title": "Groups and Events Honored", "paragraphs": ["Some commemorative coin programs are more popular than others. For example, since the commemorative coin program was restarted in 1982, the average commemorative coin program has sold approximately 1 million coins. The 1986 U.S. Statue of Liberty coins (15,491,169 coins) sold the most, while the 1997 Franklin Delano Roosevelt gold $5 coin sold the fewest (41,368). ", "The introduction of commemorative coin legislation often serves two purposes: to honor people, places, events, or institutions and to provide designated recipient groups with potential surcharge funds. These two purposes often go together. Since only two coins may be minted in a given year, Congress may face a ranking of which groups are honored at any given time. In making that decision, consideration might be given to coins that are likely to sell their authorized allotment and provide the designated recipient group with disbursed surcharges over coins that might be less popular and might not sell enough units to provide surcharges to the designated recipient group.", "Alternatively, Congress could decide that a person, place, event, or institution merits a commemorative coin regardless of the potential sales of the coin. In this instance, the authorization for a coin might not expect that the allotment would be fully sold, but that the recognition provided by the coin was nevertheless desirable."], "subsections": []}, {"section_title": "Disbursement of Surcharges", "paragraphs": ["An important part of commemorative coin legislation is the designation of groups to receive potential surcharges from the coin sales. Often, when drafting legislation, Members have specific organizations in mind as recipients of potential surcharges. As that legislation is being drafted, however, Members face a choice of whether surcharges should be directed to a single group, or to more than one entity.", "In order for a group to receive surcharge payments, it must go through two stages: (1) raise sufficient matching funds from private sources, and (2) be subject to annual audits on its use of surcharge payments. Designated recipient groups are required to raise matching funds from private sources prior to the disbursement of surcharges. A group's ability to raise sufficient funds is a potentially important consideration. Should a group not raise sufficient private funds, the full surcharge payment for which they could be eligible might not be disbursed.", "Authorizing legislation generally includes language about how the group might use surcharges. As shown in \" Surcharges \" above, these purposes are often broad. For example, the legislation that authorized the 1993 Thomas Jefferson Commemorative coin directed surcharges to two organizations: the Jefferson Endowment Fund and the Corporation for Jefferson's Poplar Forest. Funds for the Jefferson Endowment Fund were to be used \"to establish and maintain an endowment to be a permanent source of support for Monticello and its historic furnishings; and for the Jefferson Endowment Fund's educational programs, including the International Center for Jefferson Studies.\" For the Corporation for Jefferson's Poplar Forest, funds were to be used for the \"restoration and maintenance of Poplar Forest.\"", "Once sufficient funds are raised and surcharges are disbursed, designated recipient groups are subject to an audit of surcharge payments. Additionally, the surcharge payments must be \"accounted for separately from all other revenues and expenditures of the organization.\" These audits are conducted \"in accordance with generally accepted government auditing standards by an independent public accountant selected by the organization.\" Should a group not use payments properly, that information would likely be discovered by the required audit and could potentially result in a sanction, although no specific penalty is mentioned in law."], "subsections": []}, {"section_title": "Specification of Design Elements", "paragraphs": ["In some cases, commemorative coin authorizations have required the Mint to incorporate design elements beyond requirements for specific words (e.g., \"Liberty,\" or \"E Pluribus Unum\"), the denomination (e.g., \"one dollar\"), or the year. In these cases, the authorizing legislation specifically states the design element. For example, it was a sense of Congress that the National Baseball Hall of Fame commemorative coin was to be curved to look more like a baseball. Similarly, the 2018 Breast Cancer Awareness $5 gold coin is to be minted using \"pink gold.\"", "Should a Member wish to have a specific design element incorporated into a future commemorative coin, the authorizing legislation would likely need to contain that language either as a sense of Congress or as part of the coin specification section. Including language that would require a certain design element would likely ensure that the Member's vision for the commemorative coin would be incorporated into the design and minting process. Such specification, however, could serve to limit design choice for the commemorative coin and might alter the cost structure of striking a coin, if the required element diverges from standard coin-minting practices."], "subsections": []}]}, {"section_title": "Institutional Considerations", "paragraphs": [], "subsections": [{"section_title": "Requirements for Legislative Consideration", "paragraphs": ["As discussed above under \" Consideration of Legislation in Congress ,\" neither House nor Senate rules provide any restrictions specifically concerning consideration of commemorative coin legislation on the House or Senate floor. The Senate Committee on Banking, Housing, and Urban Affairs, however, does have a committee rule that requires that at \"least 67 Senators must cosponsor any ... commemorative coin bill or resolution before consideration by the Committee.\" Currently, the House Financial Services Committee has not adopted any specific rules concerning committee consideration of commemorative coin legislation, although it has required a minimum number of cosponsors in past Congresses.", "As demonstrated by the discontinuation of the House Financial Services Committee rule requiring a minimum number of cosponsors for committee commemorative coin legislation, committee rules can be changed from Congress to Congress. Should the House want to place requirements on the consideration of commemorative coin legislation, the Financial Services Committee could readopt its former rule, or something similar. Adopting committee rules to require a minimum number of cosponsors might encourage bill sponsors to build support among Representatives for a commemorative coin bill to honor a specified group or event. Such a minimum requirement, however, could potentially limit the committee in the number or type of commemorative coin bills it considers. ", "Since only the Senate Committee on Banking, Housing, and Urban Affairs has a rule that imposes a formal qualification on the potential consideration of commemorative coin legislation, the possible path forward for a bill can be different within each chamber. Should the House, the Senate, or both want to adopt similar language for the consideration of commemorative coin legislation, such language could be incorporated into future committee rules, into House and Senate Rules, or into law. Taking steps to formally codify the commemorative coin consideration process might provide sponsors with a single process for coin consideration, which could make it easier for coin bills to meet minimum requirements for consideration across both the House and Senate. Such codification could also limit congressional flexibility and might result in fewer proposals or authorizations to comply with new standards."], "subsections": []}, {"section_title": "Number of Coins Minted Per Year", "paragraphs": ["In 1996, Congress limited the U.S. Mint to issuing two coins per year beginning in calendar year 1998. This action was taken in response to the proliferation of commemorative coins authorized since the program was restarted in 1982. Should Congress want to increase or decrease the maximum number of commemorative coins minted per year, the law could be amended. Reducing the number of commemorative coins per year would also reduce the number of groups or events that might be commemorated and reduce the number of designated recipient groups that might be aided by the disbursement of coin surcharges. A decrease in the number of commemorative coins per year, however, could increase sales on authorized coins by reducing potential competition among coin programs.", "Should Congress desire to increase the number of coins, more people, places, events, or institutions could potentially be honored, and a larger variety of designated recipient groups might receive surcharges from the U.S. Mint. Authorizing additional commemorative coin programs, however, could increase the number of commemorative coins available and reintroduce problems associated with competition among commemorative coin programs and result in a proliferation of coins on the market at any given time. Such a scenario might result in decreased surcharge disbursement opportunities for individual designated recipient groups."], "subsections": []}]}]}, {"section_title": "Concluding Observations", "paragraphs": ["Commemorative coins have long been a popular way to honor people, places, and events. Historically, commemorative coins were issued to celebrate state anniversaries, expositions, and event anniversaries, or to support the building of memorials. Coins were generally sold to sponsoring organizations, who then resold them to raise funds. In the modern era, only two coins can be minted per year at the same time; according to the U.S. Commission of Fine Arts (CFA), the \"range of subject matter [has] expanded to include subjects such as women, historical events, and even buildings and landscapes.\" Additionally, instead of selling coins to organizations to raise money, the concept of surcharges as a method to direct money to designated groups has been introduced.", "As Congress considers the authorization of new coins to support designated recipient groups, consideration might be given to coins that could maximize sales and provide groups with the ability to earn as much money as possible for surcharges to support group activities. On the other hand, if Congress's intent for a coin is to recognize a person, place, event, or institution, then smaller sales numbers might not factor into legislative decisionmaking. Some commemorations inherently have broader appeal than others and the sale of commemorative coins often reflects the popularity of a particular person, place, event, or institution to coin collectors and the broader general public. ", "To potentially maximize the appeal and sale of commemorative coins to support designated recipient organizations, Congress might consider whether the people, places, events, or institutions to be commemorated have a broad appeal and whether design elements might be specified that would make the coin more appealing to the general public. For example, the 1986 Statue of Liberty commemorative coin (shown in Figure 2 ) sold over 15 million units, while other coins have sold as few as approximately 40,000. For a designated recipient organization to earn surcharges, the U.S. Mint's production costs must be recouped before payments can be made. As a result, coins that sell out of statutory allotments are more likely to generate significant surcharges than those that struggle to find a market beyond commemorative coin collectors.", "Similarly, on at least three occasions, Congress has provided specific requirements to the U.S. Mint on the design of commemorative coins\u2014that the 2014 National Baseball Hall of Fame coin be curved to represent a baseball; that the 2018 National Breast Cancer Awareness coin be tinted pink, to reflect the color associated with breast cancer awareness efforts; and that the 2019 Apollo 11 50 th Anniversary coin be convex to resemble an astronaut's helmet. Evidence from the coin collecting community suggests that a coin with unique design features may be more attractive for coin collectors and noncollectors alike. For example, a coin-collecting publication reported that the National Baseball Hall of Fame coin was so popular that the U.S. Mint had difficulty meeting demand for orders, especially because it was the \"first U.S. coin to utilize this [curved or dish design] production method and with a baseball theme, [it] ended up being a homerun with collectors.\" ", "The goal of commemorative coins is twofold: to commemorate a person, place, event, or institution and to provide surcharges to groups. As Congress considers future commemorative coins, the ability to appeal to broad segments of the population to purchase coins in support of designated recipient groups might be a consideration. If Congress considers what people, places, events, or institutions might be honored and the coins' designs, the commemorative coin program could create innovative designs that raise significant monies for designated recipient groups. Since not all people, places, events, or institutions have the same appeal to the general public, consideration of which might be the best subject of commemorative coins would ensure that the U.S. Mint dedicates its resources to coins that are more likely to sell out authorized allotments and provide maximum surcharge payments. Alternatively, Congress could recognize important people, places, events, or institutions with a coin without consideration of the potential surcharges. In this case, historically important people, places, events, or institutions could be recognized by the United States regardless of potential amounts raised for these groups.", "Appendix A. Historical Commemorative Coins", "Between 1892 and 1954, 60 commemorative coins were authorized by Congress. Table A-1 provides a list of these coins organized by the year in which they were struck by the mint. The table also includes the type of coin, the subject, and the authorization statute.", "Appendix B. Modern Commemorative Coins, 1982-1997", "Between 1982 and 1997, 47 commemorative coins were authorized by Congress. Table B-1 provides a list of these coins organized by the year in which they were struck by the Mint. The table also includes the coin's subject and authorizing statute. Coin denominations are not provided for modern commemorative coins because authorizing legislation generally provides for more than one denomination per commemorative coin series."], "subsections": []}]}}
{"id": "R45479", "title": "Bribery, Kickbacks, and Self-Dealing: An Overview of Honest Services Fraud and Issues for Congress", "released_date": "2019-01-30T00:00:00", "summary": ["As the trials of Sheldon Silver and Dean Skelos illustrate, corruption among high-profile public officials continues to be a concern in the United States. Likewise, recent examples abound of powerful executives in the private sector abusing positions of trust for personal gain. Faced with this reality, Congress has shown consistent interest in policing public- and private-sector corruption, enacting a number of criminal provisions aimed at holding corrupt officials accountable for their actions under federal law. However, one of federal prosecutors' most potent existing tools for combating such corruption\u201418 U.S.C. \u00a7 1346, which defines the crimes of mail and wire fraud as including so-called \"honest services\" fraud\u2014has been a source of contention between the courts and Congress for years.", "18 U.S.C. \u00a7 1346 defines the term \"scheme or artifice to defraud,\" as used in the general statutes prohibiting use of the mails or wires to commit fraud, to include a scheme or artifice to deprive another of the intangible right of honest services. Congress enacted this provision in the late 1980s in response to the U.S. Supreme Court's holding in McNally v. United States that the mail fraud statute was limited in scope to only the protection of tangible property rights. The McNally decision was grounded in concerns that a broader construction of the statute could leave its outer boundaries ambiguous and unjustifiably involve the federal government in setting standards for good government at the local level. Nevertheless, Section 1346 abrogates McNally's holding, codifying the understanding of some of the lower federal courts that the mail and wire fraud statutes extend to conduct that deprives a person or group of the right to have another act in accordance with some externally imposed duty or obligation, regardless of whether the victim so deprived has suffered or would suffer a pecuniary harm.", "Recognizing that this lower court understanding in fact evinced considerable disarray as to the kinds of schemes that would qualify as honest services fraud, however, the Supreme Court subsequently read a limiting principle into Section 1346 in Skilling v. United States in order to avoid invalidating the statute as unconstitutionally vague. After Skilling, mail and wire fraud prosecutions under an honest services theory may extend only to those who, in violation of a fiduciary duty, participate in bribery or kickback schemes. Notably, the Skilling decision withdrew from the reach of Section 1346 a significant category of cases that had been prosecuted as honest services fraud up to that point: cases involving more general financial self-dealing or conflicts of interest, where no bribes or kickbacks are given. Congress has considered legislation on more than one occasion that would reinstate the self-dealing category of honest services fraud rejected in Skilling, though the law remains unchanged as of this writing.", "The conversation between the Court and Congress regarding the scope of honest services fraud and its culmination in Skilling have presented more questions that lower courts have been tasked with answering, including the source of the requisite fiduciary duty and the conduct that qualifies as bribery or kickbacks. Courts have looked to a variety of sources to give content to the fiduciary duty requirement, including federal, state, and common law. Likewise, in fleshing out the contours of the bribery or kickbacks called for in Skilling, lower courts have relied on anti-bribery and anti-kickback provisions found in federal statutes. In the recent case of McDonnell v. United States, the Supreme Court limited the reach of one of those statutes\u201418 U.S.C. \u00a7 201, which makes it a crime to offer or solicit anything of value to influence an \"official act\"\u2014by construing the term \"official act\" narrowly. Nevertheless, alternate routes appear to be available to prosecute bribery schemes involving conduct that may be beyond the scope of McDonnell.", "Should Congress seek to alter the scope of honest services fraud, it will likely need to be attuned to the concerns that federal courts interpreting 18 U.S.C. \u00a7 1346 have voiced over the years. Chief among these have been the concerns that\u2014as written\u2014the statute has the potential to sweep too broadly and regulate ethically dubious conduct of state and local officials in a way that conflicts with the Constitution."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["As the trials of Sheldon Silver and Dean Skelos illustrate, corruption among high-profile public officials continues to be a concern in the United States. Likewise, recent examples abound of powerful executives in the private sector abusing positions of trust for personal gain.", "Faced with this reality, Congress has shown consistent interest in policing public- and private-sector corruption, enacting a number of criminal provisions aimed at holding corrupt officials accountable for their actions under federal law. However, one of federal prosecutors' most potent existing tools for combating such corruption\u201418 U.S.C. \u00a7 1346, which defines the crimes of mail and wire fraud as including so-called \"honest services\" fraud\u2014has been a source of contention between the courts and Congress for years. While Congress has manifested its intent that the mail and wire fraud statutes should broadly cover the self-interested actions of federal, state, local, and private-sector officials, the Supreme Court and lower federal courts have repeatedly limited the scope of 18 U.S.C. \u00a7 1346 out of concern that a broad construction would render the statute unconstitutionally vague (and, with respect to state and local officials, potentially raise federalism concerns). This report thus provides an overview of the still-developing federal crime of honest services fraud and highlights certain legal issues that Congress may consider if it seeks to address the scope of the crime legislatively.", "Chapter 63 of Title 18 of the U.S. Code broadly criminalizes the use of the mails or wires in furtherance of \"any scheme or artifice to defraud,\" or \"for obtaining money or property by means of false or fraudulent pretenses, representations, or promises.\" A core category of conduct reached by these mail and wire fraud statutes concerns misrepresentations or omissions that would deprive a victim of his or her money or property. In such cases, \"the victim's loss of money or property supplie[s] the defendant's gain, with one the mirror image of the other.\" A straightforward example is the filing of an insurance claim for a car accident that never happened in order to obtain a payout from the insurance company.", "Yet 18 U.S.C. \u00a7 1346 establishes that the term \"scheme or artifice to defraud\" as used in Chapter 63 also \"includes a scheme or artifice to deprive another of the intangible right of honest services.\" This provision was enacted in the late 1980s, in response to the U.S. Supreme Court's holding in McNally v. United States that the mail fraud statute was \"limited in scope\" to only \"the protection of property rights.\" Section 1346 abrogates McNally 's holding, codifying the understanding of some of the lower federal courts that the mail and wire fraud statutes extend to conduct that deprives a person or group of the right to have another act in accordance with some externally imposed duty or obligation, regardless of whether the victim so deprived has suffered or would suffer a pecuniary harm. Recognizing that this lower court understanding in fact evinced \"considerable disarray\" as to the kinds of schemes that would qualify as \"honest services\" fraud, however, the Supreme Court subsequently read a limiting principle into Section 1346 in Skilling v. United States in order to avoid invalidating the statute as unconstitutionally vague. After Skilling , mail and wire fraud prosecutions under an honest services theory may extend only to \"offenders who, in violation of a fiduciary duty, participate[] in bribery or kickback schemes.\"", "The conversation between the Court and Congress regarding the scope of honest services fraud and its culmination in Skilling have presented more questions that lower courts have been tasked with answering, including the sources of fiduciary duties and the types of conduct that qualify as bribery and kickback schemes. This report provides an overview of the mail and wire fraud statutes and the pre- Skilling development of the \"honest services\" theory of fraud. The report then examines the theory's codification in 18 U.S.C. \u00a7 1346 and subsequent limitation in Skilling , and surveys post- Skilling judicial elaboration of the requirements for honest services fraud. Finally, this report briefly addresses some issues Congress may consider if it seeks to alter the scope of honest services fraud through legislation."], "subsections": []}, {"section_title": "Overview of Mail and Wire Fraud Statutes15", "paragraphs": ["18 U.S.C. \u00a7 1341 prohibits use of the mails (including the United States Postal Service and \"any private or commercial interstate carrier\") for the purpose of executing \"any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises.\" 18 U.S.C. \u00a7 1343 likewise prohibits transmissions \"by means of wire, radio, or television communication in interstate or foreign commerce\" for the purpose of executing such schemes or artifices. These federal crimes, commonly known as \"mail fraud\" and \"wire fraud,\" encompass multiple forms of fraudulent conduct using jurisdictional hooks that reach practically all forms of communication. Because the two statutes (save for the medium used in connection with the offense) essentially mirror each other, interpretations and analyses of one statute will typically apply to the other.", "To secure a mail or wire fraud conviction, the government must prove beyond a reasonable doubt four elements, each of which is discussed in more detail below:", "1. a scheme to defraud involving a material deception; 2. foreseeable use of the mail, a private commercial carrier, or a wire or radio communication in furtherance of said scheme; and 3. intent to defraud another of 4. money, property, or honest services."], "subsections": [{"section_title": "Scheme to Defraud", "paragraphs": ["The requisite \"scheme to defraud\" has been framed broadly, sometimes as broadly as \"a departure from fundamental honesty, moral uprightness and candid dealings in the general life of the community.\" Generally, what the scheme to defraud element contemplates is conduct reasonably calculated to deceive. Because the mail and wire fraud statutes criminalize the \"scheme\" to defraud, and not the fraud itself, the government need not prove that the scheme was successful. However, the Supreme Court has established that the deception contemplated by a scheme to defraud must be \"material,\" that is, the misrepresentation or concealment at issue must have \"a natural tendency to influence, or [be] capable of influencing,\" the person \"to [whom] it was addressed.\""], "subsections": []}, {"section_title": "Use of Mail or Wire", "paragraphs": ["The second element of mail or wire fraud requires proof that the defendant used or caused to be used the U.S. mail; any private or commercial interstate carrier; or a \"wire, radio, or television communication in interstate or foreign commerce.\" The defendant need not have personally dispatched the offending mail or communication, so long as use of the mails or wires could reasonably be foreseen.", "The statutory text contemplates use of the mails or wires \"for the purpose of executing\" the scheme or artifice to defraud, which courts typically frame as use \"in furtherance of\" the fraudulent scheme. The mailing or wire communication does not have to be \"inherently criminal\" or \"essential\" to the scheme in order to qualify \u2014rather, it must only be \"part of the execution of the scheme as conceived by the perpetrator at the time.\" As a result, illicit conduct under the statutes can include mailings or transmissions \"designed to lull the victims into a false sense of security,\" postpone an investigation by authorities, or otherwise conceal the fraud."], "subsections": []}, {"section_title": "Intent", "paragraphs": ["The government must also prove that the defendant in a mail or wire fraud prosecution had the intent to defraud, meaning \"the specific intent to deceive or cheat, usually for the purpose of getting financial gain for one's self or causing financial loss to another.\" A person who merely expresses an opinion or, in good faith, makes a statement of fact that turns out to be inaccurate cannot have the specific intent to defraud. However, deliberate disregard for (or conscious avoidance of) the truth is no defense, nor is the belief that a victim will be unharmed.", "The government may prove intent through circumstantial evidence, such as evidence that the defendant attempted to conceal his activity or profited from the fraudulent endeavor."], "subsections": []}, {"section_title": "Money, Property, or Honest Services", "paragraphs": ["The final element of mail or wire fraud focuses on the object of the fraud. It is clear that the mail and wire fraud statutes contemplate schemes aimed at obtaining victims' money or property. In addition to tangible property, the statutes apply to intangible interests, such as confidential business information, that have \"long been recognized as property.\" If an interest lacks value in the hands of the ostensible victim, however, it is not protected by the statutes as \"property.\"", "Beyond money or property, 18 U.S.C. \u00a7 1346 establishes that a scheme or artifice to defraud includes \"a scheme or artifice to deprive another of the intangible right of honest services.\" It is the history and interpretation of this provision that are the focus of this report."], "subsections": []}]}, {"section_title": "Development of \"Honest Services\" Theory of Fraud", "paragraphs": [], "subsections": [{"section_title": "Origins", "paragraphs": ["The original mail fraud statute was enacted in 1872 and merely prohibited \"any scheme or artifice to defraud.\" Congress amended the statute in 1909 to add the second clause, \"or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises.\" Mirroring this language, the wire fraud statute became law in 1952. Though the legislative history of the mail fraud provision, and the inclusion of the \"obtaining money or property\" clause, arguably suggest that Congress initially contemplated only frauds involving money or property, lower federal courts by the 1980s had interpreted the mail and wire fraud statutes to cover deprivations of intangible rights.", "\"Most\" of these cases involved public officials who \"made governmental decisions with the objective of benefitting themselves or promoting their own interests, instead of fulfilling their legal commitment to provide the citizens of the State or local government with their loyal service and honest government.\" Regardless of whether the betrayed party (the citizenry) was or would be financially harmed, under this theory, the violation lay in the deprivation of that party's intangible right to the official's \"honest services.\" This is not to say that the doctrine extended only to public officials, however\u2014courts came to recognize that a private employee could also be guilty of mail or wire fraud for breaching a fiduciary duty to the employer. So-called \"honest services\" fraud often arose in the context of an official's or employee's receipt of a bribe or kickback in exchange for some veritable benefit. Yet the doctrine was not limited to bribery and kickback schemes; other forms of self-dealing, such as concealing material conflicts of interest, also gave rise to honest services mail and wire fraud prosecutions.", "Neither were the intangible rights protected by the mail and wire fraud statutes confined to honest services. Rather, courts broadly applied the statutes to deprivations of other intangible rights like the right to privacy and the right to honest elections.", "While the fluid scope of liability under the mail and wire fraud statutes caused some to worry that the federal courts were effectively \"develop[ing] a common law crime of unethical conduct,\" federal prosecutors appeared to view the flexibility and expansive reach of the statutes as a benefit. Then, in 1987, the Supreme Court's decision in McNally v. United States \"stopped the development of the intangible-rights doctrine in its tracks.\""], "subsections": []}, {"section_title": "McNally v. United States and Congressional Response", "paragraphs": ["McNally involved a scheme among public officials and a private individual in Kentucky to funnel kickbacks received from an insurance company, which the defendants had given an agency contract, to companies owned and controlled by them. The defendants were convicted of mail fraud on the theory that the officials deprived the citizens of Kentucky of \"their intangible rights to honest and impartial government\" by misusing their offices \"for private gain.\"", "The Supreme Court reversed, however, examining the text and legislative history of the mail fraud statute to conclude that the provision was \"limited in scope to the protection of property rights.\" In the Court's view, a broader reading would \"leave [the statute's] outer boundaries ambiguous and involve[] the Federal Government in setting standards of disclosure and good government for local and state officials.\" In other words, the Court's decision was driven by two constitutional concerns that have underlain much of the subsequent commentary on the scope of the honest services doctrine: first, a criminal statute may violate the Due Process Clauses of the Fifth and Fourteenth Amendments if it is so vague that \"ordinary people can[not] understand what conduct is prohibited.\" Thus, by alluding to the potentially \"ambiguous\" \"outer boundaries\" of the mail fraud statute, the Court was signaling that, if not construed more narrowly, the statute could be considered unconstitutionally vague. Second, courts are hesitant to read federal criminal statutes in a way that intrudes on areas of traditionally state-exclusive interest in light of the Constitution's reservation to the states of powers not expressly given to the federal government. This concept of federalism inherent in the Constitution has animated the Court's hesitancy to involve the federal government in policing the ethicality of state and local officials.", "Ultimately, the Court in McNally declined to adopt a reading of the mail fraud statute that would risk contravening the constitutional principles described above absent a decision by Congress to \"speak more clearly than it has.\" Within a short time, however, Congress had accepted the Court's invitation to speak by passing legislation, now codified at 18 U.S.C. \u00a7 1346, which clarified that \"the term 'scheme or artifice to defraud' includes a scheme or artifice to deprive another of the intangible right of honest services.\" There is some indication in the legislative history that this provision was intended to \"overturn the McNally decision\" in full, \"reinstat[ing] all of the pre- McNally case law pertaining to the mail and wire fraud statutes without change.\" Nonetheless, it is doubtful that Section 1346 restored all pre- McNally case law, as the \"intangible rights\" that courts had viewed the mail and wire fraud statutes to cover were not necessarily limited to honest services. As noted above, cases prior to McNally had recognized that deprivations of other intangible rights like the right to privacy and the right to honest elections could be covered. Thus, by limiting 18 U.S.C. \u00a7 1346 to the \"right of honest services,\" \"Congress amended the law to cover [only] one of the 'intangible rights' that lower courts had protected under \u00a7 1341 prior to McNally .\""], "subsections": []}, {"section_title": "Honest Services Fraud After Enactment of 18 U.S.C. \u00a7 1346", "paragraphs": ["Following the enactment of 18 U.S.C. \u00a7 1346, the lower federal courts continued to apply the mail and wire fraud statutes to a range of fraudulent conduct on the part of both public officials and private parties implicating the deprivation of an intangible right of honest services. \"[T]ypical[]\" cases involved \"either bribery . . . or [the] failure to disclose a conflict of interest, resulting in personal gain.\"", "In light of Section 1346's expansive language and the federalism and overbreadth concerns voiced by the Supreme Court in McNally , however, courts recognized that some \"limiting principle\" was needed in cases implicating an honest services theory of fraud. Yet beyond general pronouncements that Section 1346 \"does not encompass every instance of official misconduct\" and is \"not violated by every breach of contract, breach of duty, conflict of interest, or misstatement made in the course of dealing,\" the lower courts failed to reach a consensus on what the substance and scope of an effective limiting principle should be.", "For example, some courts recognized a limitation that to be guilty of mail or wire fraud on an honest services theory, a defendant must have participated in a scheme involving conduct that violated or would violate state law. These courts expressed concern that leaving federal judges free to define the duties and breaches that would constitute a violation of the mail and wire fraud statutes would amount to unmoored federal imposition of \"an ethical regime for state employees.\" However, several other courts rejected the state-law limitation as inconsistent with the intent of the statute.", "Taking a different tack, a few courts imposed a \"foreseeable harm\" requirement in honest services cases. As the U.S. Court of Appeals for the Sixth Circuit enunciated the limitation, conviction for honest services fraud in these jurisdictions required proof that the defendant \"foresaw or reasonably should have foreseen that [the victim] might suffer an economic harm as a result of the breach\" of fiduciary duty. In Frost , for instance, the Sixth Circuit applied the foreseeable harm limitation to conclude that university professors committed honest services fraud by entering into a scheme with their students to submit plagiarized dissertations, as they could have \"reasonably contemplated\" that the breach of their duty to the university would cause it to \"suffer a concrete business harm by unwittingly conferring an undeserved advanced degree\" on each student.", "Courts recognizing the foreseeable harm requirement appeared to apply it only in private-sector cases, where the \"meaning of the 'intangible right of honest services' has different implications\" given that \"a strict duty of loyalty ordinarily is not part of\" commercial and employment relationships. On occasion, however, the requirement was stated broadly enough to potentially encompass public-sector cases, as well. According to the Fourth and Sixth Circuits, the merits of the foreseeable harm requirement were twofold: (1) it kept \"the focus of the analysis on employee intent rather than employer response,\" and (2) it \"limit[ed] the scope of \u00a7 1346 to serious harms.\" Yet as with the state-law limitation, multiple other courts refused to apply the foreseeable harm limitation, rejecting it as \"something of an ipse dixit designed simply to limit the scope of section 1346.\"", "A competing, and less stringent, alternative to the court-created \"foreseeable harm\" requirement was the \"materiality test,\" which merely emphasized the inherent constraint that a misrepresentation must have \"the natural tendency to influence or [be] capable of influencing\" the employer to change its behavior. In the view of courts employing this test, it allowed honest services fraud to encompass \"some cases of non-economic, yet serious, harm in the private sphere.\" Proponents of the more stringent foreseeable harm requirement, however, pointed out that although the materiality test was \"similar in many respects,\" it might apply too broadly to cases where an employer \"overreacted to an insignificant fraud\" or \"changed [its] business practices to avoid the mere appearance of impropriety.\"", "In still another variation, the Seventh Circuit established the limiting principle that a scheme participant must have misused his position for private gain . One panel in the circuit viewed the limitation as \"cabin[ing] zealous prosecutors by insuring that not every violation of a fiduciary duty becomes a federal crime\" and reducing \"the risk of creating federal common law crimes.\" Nevertheless, given the Seventh Circuit's acknowledgment that its private gain limitation was created out of expediency, other circuits denounced it as \"substituting one ambiguous standard for another\" or as an attempt \"to judicially legislate by adding an element to honest services fraud which the text and the structure of the fraud statutes do not justify.\"", "Finally, at least two courts appeared to reject any reliance on judicially crafted special tests or limiting principles in honest services cases, concluding instead that existing elements\u2014such as the requirement that the defendant possessed a specific intent to defraud\u2014were sufficient to cabin Section 1346's breadth. These courts did, however, acknowledge that the existence of one or more of the elements required in other circuits, such as private gain, could \"bolster a showing of deceptive intent,\" among other things.", "In 2009, Justice Scalia dissented from the denial of certiorari in an honest services case, arguing that the lack of a \"coherent limiting principle\" to \"separate[] the criminal breaches, conflicts and misstatements from the obnoxious but lawful ones\" invited \"abuse by headline-grabbing prosecutors in pursuit of local officials, state legislators, and corporate CEOs who engage in any manner of unappealing or ethically questionable conduct.\" The following year, the Supreme Court granted certiorari in three cases that seemed poised to settle the various disagreements among the federal appellate courts over the requirements for honest services fraud. First, in United States v. Weyhrauch , a state legislator had voted on a bill regarding taxation of oil production while failing to disclose a prospective interest in an oil field services company that had taken an active stance on the legislation. The Supreme Court agreed to review whether, in such a circumstance, the state-law limitation (i.e., that the defendant must have violated a duty imposed by state law) should apply. Second, in United States v. Black , corporate executives allegedly transferred millions of dollars from a subsidiary to themselves through fraudulent non-compete agreements. The appellate court affirmed the defendants' convictions for honest services fraud, in part, on the ground that the government was not required to prove that the scheme sought to financially harm the company, presenting the Supreme Court with an opportunity to address the so-called \"foreseeable harm\" limitation. Third, in United States v. Skilling , a former executive of the energy-trading and utilities company Enron was convicted of participating in a conspiracy to boost the company's stock price by misstating the company's financial situation. The Fifth Circuit affirmed, and the defendant then argued in part in his petition for certiorari that the appellate court should have applied the Seventh Circuit's \"private gain\" requirement to save Section 1346 from unconstitutional vagueness, giving the Supreme Court occasion to consider the merits of that limitation.", "Ultimately, the Supreme Court did not expressly endorse any of the limiting principles propagated by the courts of appeals and presented for review in Weyhrauch , Black , and Skilling . However, the Court did use Skilling as a vehicle to drastically limit the scope of honest services fraud in another way."], "subsections": []}, {"section_title": "United States v. Skilling", "paragraphs": ["As noted above, Jeffrey Skilling, the one-time CEO of Enron, was convicted of (among other things) wire fraud on the theory that he deprived the company and its shareholders of his honest services by manipulating financial results and making false and misleading statements about the company's performance in order to \"prop up Enron's short-run stock prices.\" On appeal, the Fifth Circuit upheld Skilling's honest services fraud conviction, rejecting Skilling's argument that his conduct could not fall within the meaning of Section 1346 because it \"was in the corporate interest and therefore was not self-dealing.\" Skilling then argued to the Supreme Court that the statute should be struck down as unconstitutionally vague.", "The Supreme Court agreed with Skilling that Section 1346, as written, could raise \"due process concerns underlying the vagueness doctrine\" given the breadth of its language. However, the Court declined to strike down the statute as irremediably vague, opting instead to construe it narrowly in a way that avoided the problem. The Court began by \"survey[ing]\" the \"body of pre- McNally honest-services\" case law, a corpus that, in the Court's view, Section 1346 was clearly intended \"to refer to and incorporate.\" The Court's survey yielded two conclusions: (1) that \"honest-services decisions preceding McNally were not models of clarity or consistency\"; and (2) that despite the inconsistency, the honest services doctrine encompassed a \"solid core\" of cases \"involving offenders who, in violation of a fiduciary duty, participated in bribery or kickback schemes.\" Therefore, to steer clear of a \"vagueness shoal,\" the Supreme Court read Section 1346 as being limited only to this \"core\" of bribery and kickback cases. Regarding the precise definitions of bribery and kickbacks, the Court cited to existing federal bribery statutes and the definition of \"kickback\" contained in Title 41 of the U.S. Code, opining that Section 1346 would \"draw[] content not only from the pre- McNally case law, but also from [these] federal statutes proscribing\u2014and defining\u2014similar crimes.\" The Court also clarified that its holding would not render Section 1346 \"superfluous\" in light of its now-substantial overlap with these \"similar crimes\"\u2014as an example, the Court noted that 18 U.S.C. \u00a7 201, the \"principal federal bribery statute,\" applies only to federal public officials, meaning that Section 1346 would continue to reach \"state and local corruption and . . . private-sector fraud\" that \"might otherwise go unpunished.\"", "Significantly, the Court in Skilling rejected the argument, advanced by the government, that Section 1346 should be construed to extend as well to \"undisclosed self-dealing by a public official or private employee\u2014i.e., the taking of official action by the employee that furthers his own undisclosed financial interests while purporting to act in the interests of those to whom he owes a fiduciary duty.\" Although courts prior to Skilling had recognized bribery and undisclosed conflicts of interest as the two \"typical[]\" scenarios giving rise to honest services fraud prosecutions, the Supreme Court viewed an undisclosed self-dealing or conflict-of-interest category of honest services fraud as \"amorphous\" given that lower courts had \"reached no consensus on which schemes qualified.\" The Court thus refused to adopt the government's \"less constrained construction,\" that is, one that would include undisclosed self-dealing, \"absent Congress' clear instruction otherwise.\" In a footnote, the Court went on to provide guidance to Congress should it decide \"to take up the enterprise of criminalizing\" such conduct, noting that legislation \"would have to employ standards of sufficient definiteness and specificity to overcome due process concerns.\" In the Court's view, the formulation proposed by the government\u2014a prohibition on the \"taking of official action by the employee,\" with the specific intent to deceive, \"that furthers his own [material] undisclosed financial interests while purporting to act in the interests of those to whom he owes a fiduciary duty\"\u2014would \"leave[] many questions unanswered,\" including (1) how significant the conflicting interest would have to be, (2) the extent to which official action would have to further the interest, and (3) what (and to whom) information should be conveyed in order for disclosure to be adequate.", "Justice Scalia wrote separately in Skilling to make clear that he viewed Section 1346 as unconstitutionally vague and did not find the Court's limiting construction sufficient to address his concerns. Specifically, Justice Scalia pointed out that (1) not a single court's version of the pre- McNally honest services doctrine limited it only to bribery and kickbacks, rendering the Court's supposition that it was respecting the intent of Congress dubious; and (2) even limited to bribery and kickbacks in breach of a fiduciary duty, Section 1346 (and the majority opinion) left the nature, content, and source of the requisite duty hopelessly unclear and subject to conflicting conceptualizations by the lower courts. On this latter point, the majority addressed Justice Scalia's critique by maintaining in a footnote that \"debates\" over \"the source and scope of fiduciary duties\" were \"rare in bribe and kickback cases,\" with the existence of a fiduciary relationship usually being \"beyond dispute.\" The Court also provided several \"examples\" of such relationships: (1) the relationship between a public official and the public at large, (2) the relationship between an employee and his employer, and (3) the relationship between a union official and union members.", "In light of the Supreme Court's decision in Skilling , the two other honest services cases in which the Court granted certiorari\u2014 Weyhrauch and Black \u2014proved to be anticlimactic. Weyhrauch , which had presented the Court with an opportunity to pass on the \"state-law\" limitation, was simply vacated and remanded for further consideration in light of Skilling ; and the Court in Black \u2014a case involving the \"foreseeable harm\" limitation\u2014cursorily ruled that the jury instructions in the case were incorrect because they did not reflect Skilling 's construction of Section 1346, that is, that honest services fraud encompasses only participation in a bribery or kickback scheme in violation of a fiduciary duty."], "subsections": []}]}, {"section_title": "Honest Services Fraud After Skilling", "paragraphs": ["The Supreme Court's decision in Skilling makes clear that honest services mail or wire fraud must involve \"offenders who, in violation of a fiduciary duty, participate[] in bribery or kickback schemes.\" In light of that holding, lower courts in recent years have had to reconsider the (1)\u00a0vitality of the \"limiting principles\" they adopted prior to Skilling , (2) source and scope of fiduciary duties, and (3) definition and application of the terms \"bribery\" and \"kickbacks.\""], "subsections": [{"section_title": "Status of Lower-Court Limiting Principles", "paragraphs": ["Given that the Supreme Court in Skilling neither explicitly endorsed nor rejected any of the Section 1346 \"limiting principles\" developed by the lower courts, the decision's impact on the disputes among the courts of appeals was not immediately clear. Indeed, one of Justice Scalia's complaints was the Court's failure to address the \"fundamental indeterminacy\" of the requisite fiduciary obligation, including its source and application to private-sector and public-official defendants.", "That said, the opinion in Skilling offered some clues as to the continuing vitality of the limiting principles discussed above. First, by limiting honest services fraud to schemes involving bribery or kickbacks, Skilling appeared to indirectly validate the Seventh Circuit's \"private gain\" limitation, as any bribe or kickback would necessarily seem to constitute such a gain. The Seventh Circuit, which was the only circuit to have squarely adopted the private gain limitation prior to Skilling , recognized as much in a 2014 opinion, noting that its \"general approach\" of \"focus[ing] on the defendant's benefit from the fraud . . . was vindicated\" in Skilling (though \"[n]ow, only bribery or kickbacks, rather than any private gain whatsoever, can be used to show honest-services fraud\"). Thus, after Skilling , actual or contemplated private gain appears to be a necessary but not sufficient condition for imposition of criminal liability on an honest services fraud theory.", "Second, dictum from Skilling may be read as calling into question the \"foreseeable harm\" limitation adopted by some circuits. In describing the development of the honest services theory of fraud, the Court in Skilling explained that the theory targets corruption where \"the betrayed party [has] suffered no deprivation of money or property,\" noting that \"[e]ven if the scheme occasion[s] a money or property gain for the betrayed party, . . . actionable harm [lies] in the denial of that party's right to the offender's 'honest services.'\" The opinion used as an example a mayor who accepts a bribe from a third party in exchange for awarding that party a city contract, where \"the contract terms [are] the same as any that could have been negotiated at arm's length.\" Based on this dictum, at least one district court after Skilling has, in a case involving a public official, rejected the argument that honest services fraud requires \"an actual or intended economic loss to the victim.\" Of course, as described above, the circuits that recognized a foreseeable harm limitation prior to Skilling mostly applied it only in private-sector cases, leading a different post- Skilling district court to \"follow the clear precedent from the Fourth Circuit . . . and apply the reasonably foreseeable harm test in the context of . . . [an] alleged private-sector honest-services offense.\" By contrast, the Seventh Circuit has held that the government need not show \"actual or intended tangible harm\" in either public- or private-sector cases, while the Ninth Circuit in a post- Skilling decision has rejected a foreseeable-economic-loss requirement for public officials but left for \"another day\" the question of whether \"economic damages need be shown\" in private-sector cases.", "Finally, with respect to the \"state law\" limitation adopted by the Third and Fifth Circuits\u2014that is, the requirement that a defendant must have violated some affirmative duty recognized under state law\u2014one might read the Skilling Court's brief discussion of \"the source and scope of fiduciary duties\" as calling the limitation into question. In dismissing Justice Scalia's concerns regarding the indeterminacy of such duties, the majority in Skilling averred that the existence of a fiduciary relationship was \"usually beyond dispute\" in bribe and kickback cases, citing several examples of public and private duties arising from \"specific relationship[s] between two parties.\" This apparent endorsement of a broad conception of fiduciary relationships in the context of honest services fraud would seem to be inconsistent with a requirement that any breach of duty be grounded in positive state law. Nevertheless, and perhaps bearing out Justice Scalia's concerns, the source and scope of fiduciary duties have, as discussed below, continued to be a source of considerable confusion among lower courts following Skilling ."], "subsections": []}, {"section_title": "Fiduciary Duty", "paragraphs": ["The courts of appeals have recognized that under Skilling , honest services fraud requires the existence and breach of a \"fiduciary duty.\" Yet the details of the requirement implicate, as one district court recently put it, \"a troubling analysis that has divided federal courts throughout the country.\" The analysis focuses on at least \"three discrete questions:", "[W]hat types of relationships potentially give rise to the requisite fiduciary duty?; [W]hat are the permissible legal sources of the fiduciary duty?; and [W]hat is the nature or scope of the fiduciary duty, such that a defendant's breach of this obligation would satisfy the fiduciary duty requirement of honest services fraud?\"", "With respect to the first question, a logical starting point is the Skilling footnote that provides three \"examples\" of fiduciary relationships that lower courts had previously found to be \"beyond dispute\": \"public official-public, employee-employer, and union official-union members.\" Courts have recognized that this footnote does not \"represent an exhaustive list of the fiduciary relationships that can support an honest-services fraud prosecution,\" meaning that other relationships sharing similar characteristics, \"such as attorney-client, doctor-patient, or stockbroker-customer,\" may also be included. And one appellate court has determined that the term \"fiduciary\" may encompass even \"informal\" relationships of trust where \"one party acts for the benefit of another and induces the trusting party to relax the care and vigilance which it would ordinarily exercise.\" Not all courts agree with this broader conception of a fiduciary relationship, however.", "Regarding the second question, courts have turned to \"a smorgasbord of sources\" to find the requisite fiduciary duty, and appear to be divided into three general camps: \"those that permit the fiduciary duty to be derived from various sources, including state, federal, and common law; those that require the fiduciary duty to be derived from state law; and those that require the fiduciary duty to be derived from federal law.\" Among the courts that look to \"various sources,\" state law is apparently a sufficient, but not necessary, basis for a fiduciary duty, and decisions may also rely on sources as disparate as common-law agency principles or merely \"inherent\" duties arising from the relationship at issue. Indeed, some courts have seemingly treated the existence of the relationship as synonymous with the existence of a fiduciary duty without analyzing the source of the duty at all. It is also unclear to what extent courts that rely on multifarious sources can be distinguished from the courts that purport to apply a federal standard, as in both circumstances the court may end up relying on common-law principles that are not grounded in positive law.", "With respect to those courts that require a state-law duty, post- Skilling jurisprudence is somewhat muddled. In a 2012 decision, one Fifth Circuit panel announced that Skilling did not \"obviate the requirement that a state official, when prosecuted under \u00a7 1346, owe a state-law duty.\" However, that decision, as well as an earlier Fifth Circuit opinion on which it relied, may have conflated the notion of a state-law duty with a question discussed in more detail below: whether bribery and kickbacks may be defined under state law. And one district court in the Fifth Circuit has subsequently relied on the same precedent to conclude that \"[t]here is no requirement that the actions taken by [the defendants] in exchange for the payments and kickbacks be a violation of state law.\" The legal basis for the relationship that must exist and the obligation that relationship creates thus remain unclear.", "Regarding the third question\u2014the nature and scope of the requisite fiduciary duty\u2014the outcome will likely depend on what source of authority is relied upon and how it is framed. As noted above, some courts have treated the existence of an employment relationship, for example, in the context of a bribe or kickback scheme as a conclusive indication that a fiduciary duty has been breached in a way that constitutes honest services fraud, while other courts have focused more specifically on the \"type of fiduciary duty\" at issue and whether it \"falls within the core\" of the term as applied in honest services cases."], "subsections": []}, {"section_title": "Definitions of Bribery and Kickbacks", "paragraphs": ["As noted above, the Supreme Court in Skilling indicated that the prohibition on bribes and kickbacks should \"draw[] content not only from the pre- McNally case law, but also from federal statutes proscribing\u2014and defining\u2014similar crimes.\" The Court then cited 18 U.S.C. \u00a7 201(b), which criminalizes bribery of federal public officials; 18 U.S.C. \u00a7 666(a)(2), which criminalizes bribery in programs receiving federal funds; and 41 U.S.C. \u00a7 8701(2), which defines the term \"kickback\" for purposes of the statutory provisions prohibiting kickbacks in connection with public contracts. Relying on this portion of the Supreme Court's opinion, courts after Skilling have tended to look to the federal anti-bribery and anti-kickback statutes cited by the Court to \"give substance to the prohibition on honest-services fraud,\" though some courts have also relied on state-law definitions of bribery or simply on prior honest services case law.", "In general, bribery requires a quid pro quo , meaning a specific intent to \"give or receive something of value in exchange for an official act.\" This requirement distinguishes a bribe from a \"gratuity,\" which \"may constitute merely a reward for some future act that the public official will take (and may already have determined to take), or for a past act that he has already taken.\" Thus, although the text of the federal bribery statutes appears to criminalize it, payment or receipt of a mere gratuity does not constitute honest services fraud.", "The quid pro quo required for bribery need not be explicit in most cases, though in light of the First Amendment concerns that arise when an alleged bribe is a political contribution, an explicit quid pro quo may be required under those circumstances. The person offering a bribe also need not \"spell out which payments control which particular official acts\" \u2014rather, proof of a \"stream of benefits\" coinciding with a pattern of official acts is sufficient. Additionally, there is no requirement that a bribe payor and payee come to a meeting of the minds. One who offers a bribe may be convicted of honest services fraud even if the offer is rejected, and one who intends to accept a bribe may be convicted even absent proof that the payor had the requisite intent. There does appear to be some disagreement, however, as to whether a bribe recipient may be prosecuted for honest services fraud when he has no intent to take official action but falsely suggests to the payor that he will do so.", "In 2016, the Supreme Court narrowly construed the scope of conduct that may be considered an \"official act\" supporting bribery, thus potentially narrowing the scope of honest services fraud once again as well. In McDonnell v. United States , the former governor of Virginia was charged with honest services fraud, among other things, for accepting benefits from a nutritional supplement company in exchange for his influence in organizing university studies of the company's product. Importantly, the parties agreed that \"bribery\" for purposes of honest services fraud should be defined by reference to 18 U.S.C. \u00a7\u00a7 201(b)(1)(A) and (b)(2)(A), which require an intent to influence or a promise to be influenced in the performance of an \"official act.\" Of course, the parties disputed the definition of \"official act\" and whether it encompassed the defendant's conduct.", "The McDonnell Court ultimately construed the term \"official act\" narrowly. According to the Court, for there to be an official act, there must be some concrete \"question, matter, cause, suit, proceeding or controversy\" that involves \"a formal exercise of governmental power . . . similar in nature to a lawsuit before a court, a determination before an agency, or a hearing before a committee.\" Additionally, the defendant must at least agree to \"make a decision or take an action\" on that question, matter, cause, suit, proceeding, or controversy, which \"may include using his official position to exert pressure on\" or advise another to perform an official act. Simply \"setting up a meeting, talking to another official, or organizing an event (or agreeing to do so)\u2014without more\"\u2014is not enough. The Court's decision in McDonnell to construe the term \"official act\" narrowly was animated by the same constitutional concerns that undergirded its prior decisions imposing limitations on honest services fraud prosecutions\u2014namely, that a broader construction could leave the scope of criminal liability unclear and impinge on the states' authority to \"regulate the permissible scope of interactions between state officials and their constituents.\"", "Following McDonnell , there has been some speculation that the \"stream of benefits\" theory of bribery\u2014that is, that specific payments need not be linked to particular official acts\u2014is dead. However, at least one court has held to the contrary. Furthermore, because the parties in McDonnell agreed that bribery should be defined by reference to Sections 201(b)(1)(A) and (b)(2)(A), the Court had no occasion to consider whether an \"official act\" (as it defined the term) must always underlie public-sector honest services fraud based on bribery. Thus, to the extent courts look to provisions beyond (b)(1)(A) and (b)(2)(A) to give content to the bribery requirement in honest services cases, McDonnell arguably would have no impact.", "That said, it does seem that McDonnell could potentially cabin the scope of honest services fraud liability in at least some cases where liability is premised on the definition of bribery found in Section 201. For instance, in the high-profile prosecution of Sheldon Silver, the former speaker of the New York State Assembly, the Second Circuit vacated Silver's conviction on honest services charges because the jury instructions broadly captured conduct \"such as arranging meetings or hosting events with constituents\" that would be considered lawful after McDonnell .", "Though it appears that honest services fraud prosecutions since 2010 have largely focused on bribery, a few cases have involved kickback schemes. \"A kickback scheme typically involves an employee's steering business of his employer to a third party in exchange for a share of the third party's profits on that business.\" The defendant need not directly receive the profits, however\u2014a kickback scheme may involve one who \"directs the third party to share its profits with an entity designated by the [defendant] in which [he] has an interest\" or with \"others loyal to the defendant.\"", "Some federal prosecutors appear to have addressed the limitations imposed in Skilling and McDonnell by reframing cases that might previously have been brought on an honest services theory as traditional \"money or property\" wire fraud. Specifically, at least one circuit has favorably referenced a theory of intangible property that encompasses a \"right to control\" one's assets, which may permit prosecutors to use the mail and wire fraud statutes to reach some conflict-of-interest cases that can no longer be tried on an honest services theory."], "subsections": []}]}, {"section_title": "Potential Options for Congress", "paragraphs": ["On more than one occasion since 2010, Congress has considered legislation that would expand honest services fraud to include certain categories of conduct that 18 U.S.C. \u00a7 1346 no longer encompasses under the Supreme Court's interpretations of the statute. For instance, the Senate and House considered bills in the 112th Congress that would have restored undisclosed self-dealing as a basis for honest services fraud prosecution in public-, but not private-sector, cases. The legislation would have expanded the definition of \"scheme to defraud\" to include a scheme by a \"public official\"\u2014meaning a federal, state, or local officer, employee, or agent\u2014to (1) perform an official act that, at least in material part, furthers his own or certain relatives' or associates' financial interests; and (2) conceal or knowingly fail to disclose \"material information\" about the interest required to be disclosed \"by any Federal, State, or local statute, rule, regulation, or charter applicable to the public official.\" In short, it appears that the legislation would have expanded the scope of honest services fraud liability in public-sector cases, beyond the bribery and kickback schemes contemplated in Skilling , to include one additional category of conduct: failure to disclose a material financial conflict of interest. Additionally, though the bills were considered prior to the Supreme Court's decision in McDonnell , it appears that at least one version would have established a slightly broader definition of an \"official act\" than the one the Court subsequently announced. Ultimately, the bills introduced in the 112th Congress did not become law, nor has any other legislation purporting to reexpand the scope of honest services fraud become law as of this writing. ", "Nevertheless, some commentators have continued to lament what they view as the Supreme Court's blunting of a previously sharp weapon to combat public corruption, arguing that the decisions in Skilling and McDonnell placed too little weight on \"the interests of citizens in honest government\" and urging Congress to find a legislative fix. Other observers, however, have suggested that the deleterious impact of the decisions is overstated, pointing out that federal prosecutors still have multiple legal avenues through which to combat corruption in the public sphere. In any event, should Congress revisit and reconsider the scope of 18 U.S.C. \u00a7\u00a01346, understanding the vagueness and federalism concerns that have animated the Supreme Court's repeated limiting constructions of the statute may be beneficial to preventing further judicial limitations. One place to start would be the Skilling Court's identification of some questions that must be answered if Congress seeks to \"take up the enterprise of criminalizing undisclosed self-dealing\u00a0.\u00a0.\u00a0.\u00a0.\" These questions include (1) how \"direct or significant\" a conflicting financial interest must be; (2) the extent to which an \"official\" act or action must further the conflicting financial interest in order to constitute fraud; and (3) to whom a disclosure must be made, and what information it must contain, for a conflicted official to avoid criminal liability. Answering these questions in any proposed legislation may go a long way toward achieving the \"definiteness and specificity\" needed to potentially avoid the vagueness and federalism concerns that the Court has repeatedly articulated."], "subsections": []}]}}
{"id": "R45702", "title": "Overview of FY2020 Appropriations for Commerce, Justice, Science, and Related Agencies (CJS)", "released_date": "2019-04-22T00:00:00", "summary": ["This report describes actions taken by the Trump Administration and Congress to provide FY2020 appropriations for Commerce, Justice, Science, and Related Agencies (CJS) accounts. The annual CJS appropriations act provides funding for the Department of Commerce, which includes agencies such as the Census Bureau, the U.S. Patent and Trademark Office (USPTO), the National Oceanic and Atmospheric Administration (NOAA), and the National Institute of Standards and Technology (NIST); the Department of Justice (DOJ), which includes agencies such as the Federal Bureau of Investigation (FBI), the Bureau of Prisons (BOP), the U.S. Marshals, the Drug Enforcement Administration (DEA), and the U.S. Attorneys; the National Aeronautics and Space Administration (NASA); the National Science Foundation (NSF); and several related agencies such as the Legal Services Corporation and the Equal Employment Opportunity Commission.", "The Administration requests $71.388 billion for CJS for FY2020, which is $1.520 billion (-2.1%) less than the $72.908 billion appropriated for CJS for FY2019. The Administration's request includes $12.214 billion for the Department of Commerce, $30.529 billion for the Department of Justice, $28.092 billion for the science agencies, and $552 million for the related agencies. The Administration's FY2020 budget proposes eliminating several CJS agencies and programs, including the Economic Development Administration, the Community Oriented Policing Services Office, NASA's STEM Engagement Office (formerly the Office of Education), and the Legal Services Corporation. The Administration proposes reducing funding for many accounts in CJS, though there are a few exceptions\u2014the most notable of which is the proposed $2.334 billion increase for the Census Bureau's Periodic Censuses and Programs account. The increased funding is requested to help the Census Bureau conduct the decennial 2020 Census."], "reports": {"section_title": "", "paragraphs": ["T his report describes actions taken by the Administration and Congress to provide FY2020 appropriations for Commerce, Justice, Science, and Related Agencies (CJS) accounts.", "The dollar amounts in this report reflect only new appropriations made available at the start of the fiscal year. Therefore, the amounts do not include any rescissions of unobligated or deobligated balances that may be counted as offsets to newly enacted appropriations, nor do they include any scorekeeping adjustments (e.g., the budgetary effects of provisions limiting the availability of the balance in the Crime Victims Fund). In the text of the report, appropriations are rounded to the nearest million. However, percentage changes are calculated using whole, not rounded, numbers, meaning that in some instances there may be small differences between the actual percentage change and the percentage change that would be calculated by using the rounded amounts discussed in the report."], "subsections": [{"section_title": "Overview of CJS", "paragraphs": ["The annual CJS appropriations act provides funding for the Departments of Commerce and Justice, select science agencies, and several related agencies. Appropriations for the Department of Commerce include funding for agencies such as the Census Bureau, the U.S. Patent and Trademark Office, the National Oceanic and Atmospheric Administration, and the National Institute of Standards and Technology. Appropriations for the Department of Justice (DOJ) provide funding for agencies such as the Federal Bureau of Investigation; the Bureau of Prisons; the U.S. Marshals; the Drug Enforcement Administration; and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, along with funding for a variety of public safety-related grant programs for state, local, and tribal governments. The vast majority of funding for the science agencies goes to the National Aeronautics and Space Administration and the National Science Foundation. The annual appropriation for the related agencies includes funding for agencies such as the Legal Services Corporation and the Equal Employment Opportunity Commission."], "subsections": [{"section_title": "Department of Commerce", "paragraphs": ["The mission of the Department of Commerce is to \"create the conditions for economic growth and opportunity.\" The department promotes \"job creation and economic growth by ensuring fair and reciprocal trade, providing the data necessary to support commerce and constitutional democracy, and fostering innovation by setting standards and conducting foundational research and development.\" It has wide-ranging responsibilities including trade, economic development, technology, entrepreneurship and business development, monitoring the environment, forecasting weather, managing marine resources, and statistical research and analysis. The department pursues and implements policies that affect trade and economic development by working to open new markets for U.S. goods and services and promoting pro-growth business policies. It also invests in research and development to foster innovation.", "The agencies within the Department of Commerce, and their responsibilities, include the following:", "International Trade Administration (ITA) seeks to strengthen the international competitiveness of U.S. industry, promote trade and investment, and ensure fair trade and compliance with trade laws and agreements; Bureau of Industry and Security (BIS) works to ensure an effective export control and treaty compliance system and promote continued U.S. leadership in strategic technologies by maintaining and strengthening adaptable, efficient, and effective export controls and treaty compliance systems, along with active leadership and involvement in international export control regimes; Economic Development Administration (EDA) promotes innovation and competitiveness, preparing American regions for growth and success in the worldwide economy; Minority Business Development Agency (MBDA) promotes the growth of minority owned businesses through the mobilization and advancement of public and private sector programs, policy, and research; Economics and Statistics Administration (ESA) is a federal statistical agency that promotes a better understanding of the U.S. economy by providing timely, relevant, and accurate economic accounts data in an objective and cost-effective manner; Census Bureau , a component of ESA, measures and disseminates information about the U.S. economy, society, and institutions, which fosters economic growth, advances scientific understanding, and facilitates informed decisions; National Telecommunications and Information Administration (NTIA) advises the President on communications and information policy; United States Patent and Trademark Office (USPTO) fosters innovation, competitiveness, and economic growth domestically and abroad by providing high-quality and timely examination of patent and trademark applications, guiding domestic and international intellectual property (IP) policy, and delivering IP information and education worldwide; National Institute of Standards and Technology (NIST) promotes U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology enhancing economic security; and National Oceanic and Atmospheric Administration (NOAA) provides daily weather forecasts, severe storm warnings, climate monitoring to fisheries management, coastal restoration, and support of marine commerce."], "subsections": []}, {"section_title": "Department of Justice", "paragraphs": ["DOJ's mission is to \"enforce the law and defend the interests of the United States according to the law; to ensure public safety against threats foreign and domestic; to provide federal leadership in preventing and controlling crime; to seek just punishment for those guilty of unlawful behavior; and to ensure fair and impartial administration of justice for all Americans.\" DOJ also provides legal advice and opinions, upon request, to the President and executive branch department heads. ", "The major DOJ offices and agencies, and their functions, are described below:", "Office of the United States Attorneys prosecutes violations of federal criminal laws, represents the federal government in civil actions, and initiates proceedings for the collection of fines, penalties, and forfeitures owed to the United States; United States Marshals Service (USMS) provides security for the federal judiciary, protects witnesses, executes warrants and court orders, manages seized assets, detains and transports alleged and convicted offenders prior to sentencing to their court hearings, and apprehends fugitives; Federal Bureau of Investigation (FBI) investigates violations of federal criminal law; helps protect the United States against terrorism and hostile intelligence efforts; provides assistance to other federal, state, and local law enforcement agencies; and shares jurisdiction with the Drug Enforcement Administration for the investigation of federal drug violations; Drug Enforcement Administration (DEA) investigates federal drug law violations; coordinates its efforts with other federal, state, and local law enforcement agencies; develops and maintains drug intelligence systems; regulates the manufacture, distribution, and dispensing of legitimate controlled substances; and conducts joint intelligence-gathering activities with foreign governments; Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) enforces federal law related to the manufacture, importation, and distribution of alcohol, tobacco, firearms, and explosives; Federal Prison System ( Bureau of Prisons; BOP ) houses offenders sentenced to a term of incarceration for a federal crime and provides for the operation and maintenance of the federal prison system; Office on Violence Against Women (OVW) provides federal leadership in developing the nation's capacity to reduce violence against women and administer justice for and strengthen services to victims of domestic violence, dating violence, sexual assault, and stalking; Office of Justice Programs (OJP) manages and coordinates the activities of the Bureau of Justice Assistance; Bureau of Justice Statistics; National Institute of Justice; Office of Juvenile Justice and Delinquency Prevention; Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking; and Office of Victims of Crime; and Community Oriented Policing Services (COPS) advances the practice of community policing by the nation's state, local, territorial, and tribal law enforcement agencies through information and grant resources."], "subsections": []}, {"section_title": "Science Offices and Agencies", "paragraphs": ["The science offices and agencies support research and development and related activities across a wide variety of federal missions, including national competitiveness, space exploration, and fundamental discovery."], "subsections": [{"section_title": "Office of Science and Technology Policy", "paragraphs": ["The primary function of the Office of Science and Technology Policy (OSTP) is to provide the President and others within the Executive Office of the President with advice on the scientific, engineering, and technological aspects of issues that require the attention of the federal government. The OSTP director also manages the National Science and Technology Council, which coordinates science and technology policy across the executive branch of the federal government, and cochairs the President's Council of Advisors on Science and Technology, a council of external advisors that provides advice to the President on matters related to science and technology policy."], "subsections": []}, {"section_title": "The National Space Council", "paragraphs": ["The National Space Council, in the Executive Office of the President, is a coordinating body for U.S. space policy. Chaired by the Vice President, it consists of the Secretaries of State, Defense, Commerce, Transportation, and Homeland Security; the Administrator of NASA; and other senior officials. The council previously existed from 1988 to 1993 and was reestablished by the Trump Administration in June 2017."], "subsections": []}, {"section_title": "National Science Foundation", "paragraphs": ["The National Science Foundation (NSF) supports basic research and education in the nonmedical sciences and engineering. The foundation was established as an independent federal agency \"to promote the progress of science; to advance the national health, prosperity, and welfare; to secure the national defense; and for other purposes.\" The NSF is a primary source of federal support for U.S. university research in the nonmedical sciences and engineering. It is also responsible for significant shares of the federal science, technology, engineering, and mathematics (STEM) education program portfolio and federal STEM student aid and support."], "subsections": []}, {"section_title": "National Aeronautics and Space Administration", "paragraphs": ["The National Aeronautics and Space Administration (NASA) was created to conduct civilian space and aeronautics activities. It has four mission directorates. The Human Exploration and Operations Mission Directorate is responsible for human spaceflight activities, including the International Space Station and development efforts for future crewed spacecraft. The Science Mission Directorate manages robotic science missions, such as the Hubble Space Telescope, the Mars rover Curiosity, and satellites for Earth science research. The Space Technology Mission Directorate develops new technologies for use in future space missions, such as advanced propulsion and laser communications. The Aeronautics Research Mission Directorate conducts research and development on aircraft and aviation systems. In addition, NASA's Office of STEM Engagement (formerly the Office of Education) manages education programs for schoolchildren, college and university students, and the general public."], "subsections": []}]}, {"section_title": "Related Agencies", "paragraphs": ["The annual CJS appropriations act includes funding for several related agencies: ", "U.S. Commission on Civil Rights informs the development of national civil rights policy and enhances enforcement of federal civil rights laws; Equal Employment Opportunity Commission is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person's race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability, or genetic information; International Trade Commission investigates the effects of dumped and subsidized imports on domestic industries and conducts global safeguard investigations, adjudicates cases involving imports that allegedly infringe intellectual property rights, and serves as a resource for trade data and other trade policy-related information; Legal Services Corporation is a federally funded nonprofit corporation that provides financial support for civil legal aid to low-income Americans; Marine Mammal Commission works for the conservation of marine mammals by providing science-based oversight of domestic and international policies and actions of federal agencies with a mandate to address human effects on marine mammals and their ecosystems; Office of the U.S. Trade Representative is responsible for developing and coordinating U.S. international trade, commodity, and direct investment policy, and overseeing negotiations with other countries; and State Justice Institute is a federally funded nonprofit corporation that awards grants to improve the quality of justice in state courts and foster innovative, efficient solutions to common issues faced by all courts."], "subsections": []}]}, {"section_title": "The Administration's FY2020 Budget Request", "paragraphs": ["The Administration requests $71.388 billion for CJS for FY2020, which is $1.520 billion (-2.1%) less than the $72.908 billion appropriated for CJS for FY2019 (see Table 1 ). When comparing the Administration's FY2020 request to the FY2019 funding, it should be considered that the Administration formulated its FY2020 budget request before full-year appropriations for FY2019 were enacted.", "The Administration requests the following: ", "$12.214 billion for the Department of Commerce, which is $801 million (+7.0%) more than FY2019 enacted funding; $30.529 billion for the Department of Justice, which is $405 million (-1.3%) less than FY2019 enacted funding; $28.092 billion for the science agencies, which is $1.491 billion (-5.0%) less than FY2019 enacted funding; and $552 million for the related agencies, which is $425 million (-43.5%) less than FY2019 enacted funding.", "The increase in funding for the Department of Commerce is almost entirely the result of a proposed $2.334 billion (65.7%) increase for the Census Bureau's Periodic Censuses and Programs account. The funding is requested to help the Census Bureau conduct the decennial 2020 Census.", "The Administration's FY2020 budget for CJS proposes eliminating several agencies and programs:", "EDA, NIST's Manufacturing Extension Partnership, NOAA's Pacific Coastal Salmon Recovery Fund, the Community Relations Service (its functions would be moved to DOJ's Civil Rights Division), the COPS Office (grants for community policing activities would be moved to OJP), NASA's Office of STEM Engagement (formerly the Office of Education), and the Legal Services Corporation.", "The Administration requests some funding for the EDA ($30 million) and Legal Services Corporation ($18 million) to help provide for an orderly closeout of these agencies. ", "The Administration proposes a $30 million (-75.0%) reduction for the Minority Business Development Administration. It proposes to change the agency's focus to being a policy office that concentrates on advocating for the minority business community as a whole rather than supporting individual minority business enterprises.", "The Administration proposes to move funding for the High Intensity Drug Trafficking Areas (HIDTA) program to the DEA. Currently, HIDTA funding is administered by the Office of National Drug Control Policy.", "The Administration's requested funding for many CJS accounts is below FY2019 levels; however, there are a few exceptions, which include the following:", "BIS (+$10 million, +8.1%), Economic and Statistical Analysis (+$7 million, +6.9%), NTIA (+$3 million, +7.4%), the Executive Office of Immigration Review (+$110 million, +19.6%), DOJ's general legal activities (+$23 million, +2.6%), the U.S. Marshals' Federal Prisoner Detention account (+$315 million, +20.3%), DOJ's National Security Division (+$8 million, +8.1%), ATF (+$52 million, +3.9%), and the Office of the U.S. Trade Representative (+$6 million, +11.3%).", "The Administration proposes renaming three of NASA's accounts: the Space Technology account would be changed to the Exploration Technology account, the Exploration account would be changed to the Deep Space Exploration Systems account, and the Space Operations account would be changed to the Low Earth Orbit and Spaceflight Operations account. Unlike the Administration's FY2019 budget, which proposed a new account structure for NASA, the FY2020 budget proposal does not appear to include a realignment of items that would be funded from these accounts. ", "The annual CJS appropriations act traditionally includes an obligation cap of funds expended from the Crime Victims Fund (CVF). The Administration's FY2020 budget does not include a proposed obligation cap for the CVF. Rather, the Administration proposes a new $2.300 billion annual mandatory appropriation for crime victims programs. Within this amount, $492.5 million would be for the OVW, $10.0 million would be for oversight of OVC programs by the OIG, $12.0 million would be for developing innovative crime victims services initiatives, and a set-aside of up to $115.0 million would be for tribal victims assistance grants. From the remaining amount, the Office for Victims of Crime (OVC) would provide formula and non-formula grants to the states to support crime victim compensation and victims services programs.", "Also, the Administration's budget includes a proposal to transfer all of the ATF's responsibilities related to alcohol and tobacco enforcement to the Department of the Treasury's Tax and Trade Bureau. The Administration argues that the proposed realignment will allow the ATF to focus on its efforts to prevent violent crime. The proposal does not affect how much the Administration requests for the ATF for FY2020. ", " Table 1 outlines the FY2019 funding and the Administration's FY2020 request for the Department of Commerce, the Department of Justice, the science agencies, and the related agencies."], "subsections": []}, {"section_title": "Historical Funding for CJS", "paragraphs": [" Figure 1 shows the total CJS funding for FY2010-FY2019, in both nominal and inflation-adjusted dollars (more-detailed historical appropriations data can be found in Table 2 ). The data show that nominal funding for CJS reached a 10-year high in FY2019, though in inflation-adjusted terms, funding for FY2019 was lower than it was in FY2010.", "There is a cyclical nature to total nominal funding for CJS because of appropriations for the Census Bureau. Overall funding for CJS traditionally starts to increase a few years before the decennial census, peaks in the fiscal year in which the census is conducted, and then declines immediately thereafter. This is discussed in more detail below.", "Increased funding for CJS also coincides with increases to the discretionary budget caps under the Budget Control Act of 2011 (BCA, P.L. 112-25 ). The BCA put into effect statutory limits on discretionary spending for FY2012-FY2021. Under the act, discretionary spending limits were scheduled to be adjusted downward each fiscal year until FY2021. However, legislation was enacted that increased discretionary spending caps for FY2014 to FY2019. A sequestration of discretionary funding, ordered pursuant to the BCA, cut $2.973 billion out of the total amount Congress and the President provided for CJS for FY2013. Since then, funding for CJS has increased as more discretionary funding has been allowed under the BCA. ", " Figure 2 shows total CJS funding for FY2010-FY2019 by major component (i.e., the Department of Commerce, the Department of Justice, NASA, and the NSF). Although decreased appropriations for the Department of Commerce (a 47.4% reduction) mostly explain the overall decrease in CJS appropriations from FY2010 to FY2013, cuts in funding for DOJ (-8.7%) and NASA (-9.8%) also contributed. Funding for NSF held relatively steady from FY2010 to FY2013.", "Overall CJS funding has increased since FY2014, and this is partially explained by more funding for the Department of Commerce to help the Census Bureau prepare for the 2020 decennial census. While funding for the Department of Commerce decreased from FY2018 to FY2019, it is partly the result of the department receiving $1.000 billion in emergency supplemental funding for FY2018. If supplemental funding is excluded, appropriations for the Department of Commerce increased 2.5% from FY2018 to FY2019. ", "While increased funding for the Department of Commerce partially explains the overall increase in funding for CJS since FY2014, there have also been steady increases in funding for DOJ (+11.5%), NASA (+21.8%), and NSF (+12.6%), as higher discretionary spending caps have been used to provide additional funding to these agencies. Also, increased funding for the Department of Commerce is not only the result of more funding for the Census Bureau. Funding for NOAA increased by 41.0% from FY2014 to FY2018 and funding for NIST increased by 15.9% over the same time period. However, funding for both of these agencies decreased from FY2018 to FY2019, meaning that the increase in the Department of Commerce's funding during this time period was almost solely attributable to increased funding for the Census Bureau."], "subsections": []}]}}
{"id": "R43543", "title": "Navy LPD-17 Flight II Amphibious Ship Program: Background and Issues for Congress", "released_date": "2019-05-17T00:00:00", "summary": ["The Navy wants to procure a total of 13 LPD-17 Flight II amphibious ships. LPD-17 Flight II ships cost roughly $1.8 billion each to procure. The first LPD-17 Flight II ship, LPD-30, was procured in FY2018. As part of its action on the Navy's proposed FY2019 budget, Congress provided $350 million in unrequested advance procurement (AP) funding for a second LPD-17 Flight II ship, LPD-31, to be procured in FY2020. This was consistent with the Navy's FY2019 budget submission, under which LPD-31 was planned for procurement in FY2020 and the remainder of its procurement cost was to be requested in FY2020. The Navy's FY2020 budget submission, however, proposes deferring the procurement of LPD-31 by one year, to FY2021, and the Navy's proposed FY2020 budget, rather than requesting the remainder of LPD-31's procurement cost, instead requests $247.1 million in AP funding for the ship.", "Navy officials state that if no LPD-17 Flight II ship is procured in FY2020, the $350 million in FY2019 AP funding that Congress provided for the LPD-17 program would become unexecutable, because that funding was provided specifically for use in building an LPD-17 Flight II ship procured in FY2020, not an LPD-17 Flight II ship procured in FY2021. The $350 million in FY2019 AP funding can be made executable by procuring LPD-31 in FY2020 or by passing legislation permitting the FY2019 AP funding to be used for an LPD-17 Flight II ship procured in FY2021. One alternative for procuring LPD-31 in FY2020 would be to do so with full funding (i.e., with the remainder of the ship's procurement cost provided in FY2020). Another alternative would be to pass legislation giving the Navy the authority to procure LPD-31 in FY2020 using incremental funding. Navy officials state that under the latter alternative, the amount of procurement funding needed for LPD-31 in FY2020 would be, at a minimum, roughly $200 million, and not more than the requested amount of $247.1 million.", "As part of its action on the Navy's proposed FY2019 budget, Congress also provided $350 million in unrequested AP funding for a different kind of amphibious ship\u2014an amphibious assault ship called LHA-9. This ship is considerably larger and more expensive than an LPD-17 Flight II ship. The Navy's FY2020 budget submission estimates LHA-9's procurement cost at $4,076.4 million (i.e., about $4.1 billion). Under the Navy's FY2019 budget submission, LHA-9 was planned for procurement in FY2024. The $350 million in FY2019 AP funding that Congress provided was intended to encourage the Navy to accelerate the procurement of LHA-9 from FY2024 to an earlier fiscal year, such as FY2020 or FY2021. Under the Navy's FY2020 budget submission, the Navy continues to show LHA-9 as a ship planned for procurement in FY2024, and the Navy's proposed FY2020 budget does not request any additional procurement or AP funding for the ship.", "Issues for Congress include whether to procure LPD-31 in FY2020 or FY2021; whether to procure LPD-31 (if it is procured in FY2020) with full funding or incremental funding; the amount of procurement or AP funding to provide for LPD-31 and LHA-9 in FY2020; more generally whether the Navy is placing too much, too little, or about the right amount of emphasis on amphibious ships in its FY2020 budget submission, particularly compared to other Navy shipbuilding programs; and technical risk in the LPD-17 Flight II and LHA programs."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides background information and issues for Congress on the LPD-17 Flight II amphibious ship program. The Navy's FY2020 budget submission defers the planned procurement of the second LPD-17 Flight II ship, LPD-31, by one year, to FY2021, and requests $247.1 million in advance procurement (AP) funding for the ship. ", "This report also discusses LHA-9, a different kind of amphibious ship that the Navy wants to procure in FY2024. The Navy's proposed FY2020 budget does not request any procurement or AP funding for this ship.", "Issues for Congress include whether to procure LPD-31 in FY2020 or FY2021; whether to procure LPD-31 (if it is procured in FY2020) with full funding or incremental funding; the amount of procurement or AP funding to provide for LPD-31 and LHA-9 in FY2020; and more generally whether the Navy is placing too much, too little, or about the right amount of emphasis on amphibious ships in its FY2020 budget submission, particularly compared to other Navy shipbuilding programs. Congress's decisions on these issues could affect Navy capabilities and funding requirements and the shipbuilding industrial base.", "For an overview of the strategic and budgetary context in which the LPD-17 Flight II program and other Navy shipbuilding programs may be considered, see CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress , by Ronald O'Rourke."], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "Amphibious Ships in General", "paragraphs": [], "subsections": [{"section_title": "Roles and Missions", "paragraphs": ["Navy amphibious ships are operated by the Navy, with crews consisting of Navy personnel. The primary function of Navy amphibious ships is to lift (i.e., transport) embarked U.S. Marines and their equipment and supplies to distant operating areas, and enable Marines to conduct expeditionary operations ashore in those areas. Although amphibious ships are designed to support Marine landings against opposing military forces, they are also used for operations in permissive or benign situations where there are no opposing forces. Due to their large storage spaces and their ability to use helicopters and landing craft to transfer people, equipment, and supplies from ship to shore without need for port facilities, amphibious ships are potentially useful for a range of combat and noncombat operations.", "On any given day, some of the Navy's amphibious ships, like some of the Navy's other ships, are forward-deployed to various overseas operating areas. Forward-deployed U.S. Navy amphibious ships are often organized into three-ship formations called amphibious ready groups (ARGs). On average, two or perhaps three ARGs might be forward-deployed at any given time. Amphibious ships are also sometimes forward-deployed on an individual basis to lower-threat operating areas, particularly for conducting peacetime engagement activities with foreign countries or for responding to smaller-scale or noncombat contingencies."], "subsections": []}, {"section_title": "Types of Amphibious Ships", "paragraphs": ["Navy amphibious ships can be divided into two main groups\u2014the so-called \"big-deck\" amphibious assault ships, designated LHA and LHD, which look like medium-sized aircraft carriers, and the smaller (but still sizeable) amphibious ships designated LPD or LSD, which are sometimes called \"small-deck\" amphibious ships. The LHAs and LHDs have large flight decks and hangar decks for embarking and operating numerous helicopters and vertical or short takeoff and landing (V/STOL) fixed-wing aircraft, while the LSDs and LPDs have much smaller flight decks and hangar decks for embarking and operating smaller numbers of helicopters. The LHAs and LHDs, as bigger ships, in general can individually embark more Marines and equipment than the LSDs and LPDs."], "subsections": []}, {"section_title": "Amphibious Lift Goal", "paragraphs": ["The Navy's 355-ship force-level goal, released in December 2016, calls for achieving and maintaining a 38-ship amphibious force that includes 12 LHA/LHD-type ships, 13 LPD-17 class ships, and 13 LSD/LPD-type ships (12+13+13). The goal for achieving and maintaining a force of 38 amphibious ships relates primarily to meeting wartime needs for amphibious lift. Navy and Marine Corps officials have testified that fully meeting U.S. regional combatant commander requests for day-to-day forward deployments of amphibious ships would require a force of 50 or more amphibious ships."], "subsections": []}, {"section_title": "Current and Projected Force Levels", "paragraphs": ["The Navy's force of amphibious ships at the end of FY2018 included 32 ships, including 9 amphibious assault ships (1 LHA and 8 LHDs), 11 LPD-17 Flight I ships, and 12 LSD-41/49 class ships. The LSD-41/49 class ships, which are the ships to be replaced by LPD-17 Flight II ships, are discussed in the next section.", "The Navy's FY2020 30-year (FY2020-FY2049) shipbuilding plan projects that the Navy's force of amphibious ships will increase gradually to 38 ships by FY2026, remain at a total of 36 to 38 ships in FY2027 to FY2034, decline to 34 or 35 ships in FY2035-FY2038, increase to 36 or 37 ships in FY2039-FY2046, and remain at 35 ships in FY2047-FY2049. Over the entire 30-year period, the force is projected to include an average of about 35.8 ships, or about 94% of the required figure of 38 ships, through resulting amount of lift capability provided by the ships would not necessarily equate to about 94% of the amphibious lift goal, due to the mix of ships in service at any given moment and their individual lift capabilities."], "subsections": []}, {"section_title": "Existing LSD-41/49 Class Ships", "paragraphs": ["The Navy's 12 aging Whidbey Island/Harpers Ferry (LSD-41/49) class ships ( Figure 1 ) were procured between FY1981 and FY1993 and entered service between 1985 and 1998. The class includes 12 ships because they were built at a time when the Navy was planning a 36-ship (12+12+12) amphibious force. They have an expected service life of 40 years; the first ship will reach that age in 2025. The Navy's FY2020 30-year shipbuilding plan projects that the 12 ships will retire between FY2026 and FY2038."], "subsections": []}]}, {"section_title": "LPD-17 Flight II Program", "paragraphs": [], "subsections": [{"section_title": "Program Name", "paragraphs": ["The Navy decided in 2014 that the LSD-41/49 replacement ships would be built to a variant of the design of the Navy's San Antonio (LPD-17) class amphibious ships. (A total of 13 LPD-17 class ships [LPDs 17 through 29] were procured between FY1996 and FY2017.) Reflecting that decision, the Navy announced on April 10, 2018, that the replacement ships would be known as the LPD-17 Flight II ships. By implication, the Navy's original LPD-17 design became the LPD-17 Flight I design. ", "The first LPD-17 Flight II ship is designated LPD-30. Subsequent LPD-17 Flight II ships are to be designated LPD-31, LPD-32, and so on. Whether the LPD-17 Flight II ships constitute their own shipbuilding program or an extension of the original LPD-17 shipbuilding program might be a matter of perspective. As a matter of convenience, this CRS report refers to the Flight II shipbuilding effort as a separate program. Years from now, LPD-17 Flight I and Flight II ships might come to be known collectively as either the LPD-17 class, the LPD-17/30 class, or the LPD-17 and LPD-30 classes."], "subsections": []}, {"section_title": "Design", "paragraphs": ["Compared to the LPD-17 Flight I design, the LPD-17 Flight II design ( Figure 2 ) is somewhat less expensive to procure, and in some ways less capable\u2014a reflection of how the Flight II design was developed to meet Navy and Marine Corps operational requirements while staying within a unit procurement cost target that had been established for the program. In many other respects, however, the LPD-17 Flight II design is similar in appearance and capabilities to the LPD-17 Flight I design. Of the 13 LPD-17 Flight I ships, the final two (LPDs 28 and 29) incorporate some design changes that make them transitional ships between the Flight I design and the Flight II design."], "subsections": []}, {"section_title": "Procurement Quantity", "paragraphs": ["Consistent with the Navy's 38-ship amphibious force-level goal, the Navy wants to procure a total of 13 LPD-17 Flight II ships."], "subsections": []}, {"section_title": "Procurement Schedule", "paragraphs": ["The first LPD-17 Flight II ship, LPD-30, was procured in FY2018. Under the Navy's FY2019 budget submission, the second LPD-17 Flight II ship, LPD-31, was to be procured in FY2020, and the remaining 11 were to be procured at a rate of one per year starting in FY2022. The Navy's FY2020 budget submission proposes deferring the procurement of LPD-31 to FY2021 and the procurement of the third ship (LPD-32) to FY2023, with the final 10 ships to be procured at a rate of one per year starting in FY2025. As shown in Table 1 , when compared to the Navy's FY2019 budget submission, the Navy's FY2020 budget submission reduces from four to two the total number of LPD-17 Flight II ships to be procured during the period FY2020-FY2024."], "subsections": []}, {"section_title": "Procurement Cost", "paragraphs": ["Under the Navy's FY2020 budget submission, LPD-17 Flight II ships cost roughly $1.8 billion each to procure."], "subsections": []}, {"section_title": "Program Funding", "paragraphs": [" Table 2 shows LPD-17 Flight II procurement and advance procurement (AP) funding for FY2020-FY2024 as presented in the Navy's FY2020 budget submission."], "subsections": []}]}, {"section_title": "LHA-9 Amphibious Assault Ship", "paragraphs": ["The most recently procured LHA/LHD-type amphibious assault ship is LHA-8 ( Figure 3 ), which was procured in FY2017 and is scheduled under the Navy's FY2020 budget submission to be delivered in January 2024.", "The Navy wants to procure the next LHA/LHD-type ship, LHA-9, in FY2024. LHA/LHD-type ships are considerably larger and more expensive than LPDs. The Navy's FY2020 budget submission estimates LHA-9's procurement cost at $4,076.4 million (i.e., about $4.1 billion).", "Some in Congress and elsewhere are interested in the potential for accelerating the procurement of LHA-9 from FY2024 to an earlier year, such as FY2020 or FY2021, in part to achieve better production learning curve benefits in shifting from production of LHA-8 to LHA-9 and thereby reduce LHA-9's procurement cost in real (i.e., inflation-adjusted) terms. For example, the Senate Armed Services Committee's report ( S.Rept. 115-262 of June 5, 2018) on the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (S. S. 2987 ) stated:", "The committee remains concerned with the Navy procurement profile for large deck amphibious assault ships, which includes a span of 7 years until the next large deck amphibious assault ship (LHA\u20139) is procured in 2024.", "The committee notes that efficiencies could be gained by reducing this span, which could enable a steadier workforce with an increased learning curve, material and equipment suppliers on more reliable and fixed delivery contracts, and a more effective continuous improvement schedule.", "The committee urges the Secretary of the Navy to accelerate procurement of LHA\u20139 to not later than 2021\u2026. (Pages 82-83)", "As part of its action on the Navy's proposed FY2019 budget, Congress provided $350 million in unrequested AP funding for LHA-9, in part to encourage the Navy to accelerate the procurement of LHA-9 from FY2024 to an earlier fiscal year, such as FY2020 or FY2021. ", "Under the Navy's FY2020 budget submission, the Navy continues to show LHA-9 as a ship planned for procurement in FY2024, and the Navy's proposed FY2020 budget does not request any additional procurement or AP funding for the ship. Consistent with past practice for procuring LHA/LHD-type amphibious ships, the Navy's FY2020 budget submission anticipates using two-year incremental funding (i.e., split funding) to procure LHA-9, with the bulk of the ship's procurement cost to be divided between FY2024 and FY2025. Table 3 shows FY2020-FY2024 funding for the ship under the Navy's FY2020 budget submission."], "subsections": []}, {"section_title": "Amphibious Warship Industrial Base", "paragraphs": ["Huntington Ingalls Industries/Ingalls Shipbuilding (HII/Ingalls) of Pascagoula, MS, is the Navy's current builder of both LPDs and LHA/LHD-type ships, although other U.S. shipyards could also build amphibious ships. The amphibious warship industrial base also includes many supplier firms in numerous U.S. states that provide materials and components for Navy amphibious ships. HII states that the supplier base for its LHA production line, for example, includes 457 companies in 39 states."], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "FY2020 Procurement and Funding Issues", "paragraphs": ["FY2020 procurement and funding issues for Congress for FY2020 include the following:", "whether to procure LPD-31 in FY2020 or FY2021; whether to procure LPD-31 (if it is procured in FY2020) with full funding or incremental funding; the amount of procurement or AP funding to provide for LPD-31 and LHA-9 in FY2020; and more generally whether the Navy is placing too much, too little, or about the right amount of emphasis on amphibious ships in its FY2020 budget submission, particularly compared to other Navy shipbuilding programs.", "Regarding the first issue above, supporters of procuring LPD-31 in FY2020 could argue that it could put the Navy on a path to achieving the 38-ship amphibious ship force-level goal sooner than FY2026, permit the $350 million in AP funding that Congress provided for the program in FY2019 to be executed as intended, and leave more budgetary room in FY2021 for funding other Navy programs. Supporters of procuring LPD-31 in FY2021 could argue that FY2026 is an acceptable date for achieving the 38-ship amphibious ship force-level objective, particularly given the challenges the Navy faces for meeting some of its other force-level goals in coming years (such as those for attack submarines and aircraft carriers); that in a situation of finite Navy or Department of Defense (DOD) funding, procuring LPD-31 in FY2020 might require reductions in funding for other Navy or DOD programs, with an uncertain net result on Navy or DOD capabilities; and that Congress can make the FY2019 AP funding executable by passing legislation permitting the funding to be used on an LPD-17 Flight II ship procured in FY2021.", "Regarding the second issue above, supporters of procuring LPD-31 with full funding could argue that it would leave more budgetary room in FY2021 and perhaps one or more years beyond that for funding other Navy programs, and that Navy surface ships other than aircraft carriers and LHA/LHD-type amphibious assault ships have generally been procured with full funding rather than incremental funding. Supporters of funding LPD-31 with incremental funding could argue that doing so would reduce FY2020 funding needs for LPD-31, preserving more FY2020 funding for other Navy or DOD programs, and that there have been a few instances over the years in which Navy surface ships other than aircraft carriers and LHA/LHD-type amphibious assault ships have been procured with incremental funding.", "Regarding the third issue above, factors that Congress may consider include whether the Navy has properly scheduled and accurately estimated the work on these ships it is proposing to do in FY2020, and how the type and amount of work to be done on these ships in FY2020 would change if LPD-31 were procured in FY2020 instead of FY2021, and if procurement of LHA-9 were accelerated from FY2024 to an earlier fiscal year, such as FY2020 or FY2021.", "Regarding the fourth issue above, supporters of amphibious ships might argue that by deferring the procurement of LPD-31 to FY2021, reducing the number of LPD-17 Flight II ships to be procured in FY2020-FY2024, and not accelerating the procurement of LHA-9 from FY2024 to an earlier fiscal year, the Navy's FY2020 budget submission is placing a reduced emphasis on amphibious ships in its shipbuilding plans, particularly compared to other type of Navy ships, such as attack submarines, destroyers, and frigates, all of which experienced additions or accelerations in FY2020 or FY2021 under the Navy's FY2020 budget submission. Amphibious ships, they could argue, are as important as these other types of ships, and are in high demand by U.S. regional combatant commanders. Other observers, while acknowledging the value of amphibious ships, might argue that within a finite Navy budget, the Navy needs to make difficult choices about what type of ships to procure; that attack submarines, destroyers, and frigates are critical for countering China's improving naval capabilities and for performing other missions; and that the Navy currently has substantial shortfalls in attack submarines, large surface combatants (such as destroyers), and small surface combatants (such as frigates) relative to its force-level goals for those types of ships."], "subsections": []}, {"section_title": "Technical Risk in LPD-17 Flight II and LHA Programs", "paragraphs": ["Another potential issue for Congress is technical risk in the LPD-17 Flight II and LHA programs. A May 2019 Government Accountability Office (GAO) report\u2014the 2019 edition of GAO's annual report surveying DOD major acquisition programs\u2014states the following about the LPD-17 Flight II program:", "Current Status", "The Navy planned to accelerate purchase of LPD 30\u2014the first fully configured Flight II ship\u2014after Congress appropriated $1.8 billion above the fiscal year 2018 budget request, according to program officials. The Navy reported that it awarded contracts in August 2018 for LPD 30 long lead time materials and in March 2019 for lead ship construction.", "The Navy based the Flight II design on Flight I, with modifications to reduce costs and meet new requirements. According to program officials, roughly 200 design changes will distinguish the two flights including replacing the composite mast with a steel stick. Officials stated that the design would not rely on any new technologies. However, the Navy plans to install a new radar, the Enterprise Air Surveillance Radar, which is still in development. The Navy expects live radar system testing through November 2019, with a complete radar prototype in February 2020. Although program officials consider these activities to be low risk, the Navy will make its decision to begin ship construction by December 2019 without incorporating lessons learned from radar testing into the design. Starting construction before stabilizing the design could require the Navy to absorb costly design changes and rework during ship construction.", "The Navy initially pursued a limited competition for LX(R), but now has a non-competitive acquisition strategy for LPD 17 Flight II. The Navy plans to award sole-source contracts to Huntington Ingalls\u2014the only shipbuilder of Flight I ships\u2014for Flight II construction. Further, the program did not request a separate independent cost estimate for Flight II prior to awarding the LPD 30 detail design and construction contract. At the same time, the Navy identified no plans to establish a cost baseline specific to Flight II. Without this baseline, the Navy would report full LPD 17 program costs\u2014rather than Flight II specific costs\u2014constraining visibility into Flight II.", "Program Office Comments", "We provided a draft of this assessment to the program office for review and comment. The program office provided technical comments, which we incorporated as appropriate The program office stated that LPD Flight II is included under the existing LPD 17 acquisition program baseline, and that no other viable contractor responded to a public notice regarding the Navy's plan to award Huntington Ingalls the LPD 30 construction contract.", "The May 2019 GAO report stated the following about the LHA program:", "Current Status", "In June 2017, the Navy exercised a contract option for detail design and construction of the LHA 8. The LHA 8 incorporates significant design changes from earlier ships in the LHA 6 class, but Navy officials were unable to quantify the changes. The Navy started construction in October 2018 and LHA 8 is scheduled to be delivered in January 2024.", "The LHA 8 program office has not identified any critical technologies. However, the ship is relying on technology that is currently being developed by another Navy program, the Enterprise Air Surveillance Radar (EASR), with delivery expected in August 2021. EASR, intended to provide self-defense and situational awareness capabilities, is derived from the pre-existing Air and Missile Defense Radar program, but will be a different size and will rotate. LHA 8 program officials have identified the radar as the program's highest development risk. If the radar is not delivered on schedule, Navy officials report that this could lead to out-of-sequence design and delayed installation and testing. Officials responsible for developing the radar, however, stated that the radar is approaching maturity and is on schedule to be delivered to the shipbuilder when needed.", "The Navy began construction with about 61 percent of the LHA 8 product model completed\u2014an approach inconsistent with shipbuilding best practices. These best practices call for 100 percent completion of 3D product modeling prior to construction start to minimize the likelihood of costly re-work and out of sequence work that can drive schedule delays. The Navy, however, estimates that the LHA 8 shipbuilder will not complete 100 percent of the ship's 3D product model until June 2019, almost 8 months after the start of construction.", "Program Office Comments", "We provided a draft of this assessment to the program office for review and comment. The program office provided technical comments, which we incorporated where appropriate. The program office stated that the Navy understands all design changes incorporated on the LHA 8, such as reintroducing the well deck and incorporating EASR. According to the program office, the Navy does not begin construction on any section of the LHA 8 ship before completing that respective section's design."], "subsections": []}]}, {"section_title": "Legislative Activity for FY2020", "paragraphs": [], "subsections": [{"section_title": "Summary of Congressional Action on FY2020 Funding Request", "paragraphs": [" Table 4 summarizes congressional action on the Navy's FY2020 funding request for the LPD-17 Flight II and LHA-9 programs."], "subsections": []}]}]}}
{"id": "R43168", "title": "Military Sexual Assault: Chronology of Activity in the 113th-114th Congresses and Related Resources", "released_date": "2019-05-16T00:00:00", "summary": ["This report focuses on previous activity in Congress regarding high profile incidents of sexual assault in the military during the summer 2013 through 2016. Included are separate sections on the official responses related to these incidents by the Department of Defense (DOD), the Obama Administration, and Congress including legislation during the 113th (2013-2014) Congress and 114th Congress (2015-2016). The last section is a resource guide for sources in this report and related materials on sexual assault and prevention during this period. This report will not be updated and supersedes CRS Report R43168, Military Sexual Assault: Chronology of Activity in Congress and Related Resources.", "For current information regarding Congress and issues on sexual assault in the military, see CRS Report R44944, Military Sexual Assault: A Framework for Congressional Oversight, by Kristy N. Kamarck and Barbara Salazar Torreon. For legislative initiatives in the 115th Congress, see CRS Report R44923, FY2018 National Defense Authorization Act: Selected Military Personnel Issues, by Kristy N. Kamarck, Lawrence Kapp, and Barbara Salazar Torreon and CRS Report R45343, FY2019 National Defense Authorization Act: Selected Military Personnel Issues, by Bryce H. P. Mendez et al."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Beginning the summer 2013 through 2016, there were numerous reports in the media on sexual assault incidents in the U.S. armed services. In many cases, such reports were followed by questions on what actions were taken by the Department of Defense (DOD), the Obama Administration, and Congress to address the issue. This report lists a comprehensive chronology of official activities in response to incidents of military sexual assault, as well as legislative action on the issue. The report is divided into three sections: the DOD and the Obama Administration's actions, congressional action, and legislation in the 113 th (2013-2014) and 114 th (2015-2016) Congresses. Also included is a resources section with related articles, hearings, and reports. Information in this report was compiled from the official government websites of DOD, the Obama White House and Congress.gov for historical background and will not be updated. "], "subsections": []}, {"section_title": "Actions by Department of Defense and the Obama Administration", "paragraphs": ["June 13, 2012 \u2013 DOD announced Army Major General Gary S. Patton as the new director of the Sexual Assault Prevention and Response Office (SAPRO).", "September 25, 2012 \u2013 As part of the DOD's efforts to confront the crime of sexual assault in the military, then Secretary of Defense Leon Panetta announced improvements to prospective commander and senior enlisted training and a review of the initial military training environment in every service. ", "December 21, 2012 \u2013 DOD released key findings from the Academic Program Year (APY) 2011-2012 Report on Sexual Harassment and Violence at the United States Military Service Academies. According to this report, the overall prevalence rate of unwanted sexual contact increased in all three military academies. From 2011 to 2012, the Air Force Academy in Colorado showed the largest increase in reported sexual assaults from 33 to 52 incidents. Sexual assaults at the Naval Academy in Annapolis, MD, increased from 11 to 15, and were up at the U.S. Military Academy in West Point, NY, from 10 to 13."], "subsections": [{"section_title": "2013", "paragraphs": ["January 18, 2013 \u2013 DOD announced the release of the 2012 Workplace and Gender Relations Survey of Reserve Component Members . This report included rates of unwanted sexual contact, unwanted gender-related behaviors (i.e., sexual harassment and sexist behavior), and gender discriminatory behaviors and sex discrimination reported by survey respondents during the past 12 months.", "March 7, 2013 \u2013 Defense Secretary Chuck Hagel, in a letter responding to Members of Congress, wrote that an internal review was being conducted of a decision by a senior Air Force commander, Lt. Gen. Craig Franklin, to overturn the sexual assault conviction of an Air Force fighter pilot, Lt. Col. James Wilkerson. Colonel Wilkerson was found guilty in November 2012 of aggravated sexual assault and was sentenced to one year in military prison. Lt. General Franklin's decision to overturn the findings of the court-martial freed Colonel Wilkerson, and allowed him to be reinstated in the Air Force. In his letter, Hagel said that while General Franklin's decision could not be overturned, he had asked Pentagon lawyers and the Secretary of the Air Force to review the way in which General Franklin decided the case. He also said he wanted a review of whether the military should change the way it handles sexual assault cases.", "April 2, 2013 \u2013 Secretary Chuck Hagel stated in a message to all DOD personnel on Sexual Assault Awareness and Prevention Month that, \"Together, we must work every day to instill a climate that does not tolerate or ignore sexist behavior, sexual harassment, or sexual assault. These have no place in the United States military and violate everything we stand for and the values we defend.\"", "April 8, 2013 \u2013 Secretary Hagel announced that DOD's Office of General Counsel will review Article 60 of the Uniform Code of Military Justice (UCMJ) after an Air Force officer's court-martial conviction for sexual assault was dismissed using the authority provided by Article 60.", "May 6, 2013 \u2013 The Office of the Secretary of Defense released a 24-page memorandum from Secretary Hagel to all heads of the military services regarding DOD's 2013 Sexual Assault Prevention and Response Strategy, and the release of the Annual Report on Sexual Assault in the Military 2012 (2 volumes). According to this report, in FY2012 (October 1, 2011, through September 30, 2012), the number of sexual assaults reported by members of the military rose 6% to 3,374. An anonymous survey of military personnel showed the number of service members who had experienced unwanted sexual contact could be as many as 26,000 but most never reported the incidents. That number is an increase over the 19,000 estimated assaults in 2011. These reports involved offenses ranging from abusive sexual contact to rape.", "May 7, 2013 \u2013 In a DOD press briefing, Defense Secretary Chuck Hagel and Major General Gary Patton, director of SAPRO, announced new series of actions to further DOD's sexual assault and prevention efforts. Hagel directed service chiefs to develop methods to hold all military commanders accountable for establishing command climates of dignity and respect in incorporating sexual assault prevention and victim care principles in their commands.", "May 7, 2013 \u2013 DOD announced the establishment of the Response Systems to Adult Sexual Assault Crimes Panel consisting of nine selected appointees. Secretary of Defense Hagel appointed five members to serve on the response systems panel, who joined four members appointed by the chairman and ranking member of the Senate Armed Services Committee, and the chairman and ranking member of the House Armed Services Committee. ", "May 14, 2013 \u2013 The Army announced that an Army Sergeant First Class assigned to III Corps, Fort Hood, TX, was under investigation for pandering, abusive sexual contact, assault, and maltreatment of subordinates.", "May 15, 2013 \u2013 Returning from NATO meetings in Brussels, the Chairman of the Joint Chiefs of Staff, Army Gen. Martin E. Dempsey, told reporters that sexual assault in the Armed Forces constitutes a crisis in the military. He further stated that \"We're losing the confidence of the women who serve that we can solve this problem, and that's a crisis.\"", "May 16, 2013 \u2013 At the White House, President Obama met with senior military leaders on the issue of sexual assault in the U.S. Armed Forces. The President stated that not only is it \"shameful and disgraceful\" but also \"dangerous to our national security.\"", "May 17, 2013 \u2013 During a press briefing, Defense Secretary Hagel and Chairman of the Joint Chiefs of Staff Army Gen. Martin Dempsey discussed their meeting with President Obama, Vice President Biden, and senior enlisted and officer leadership in the U.S. military. Dempsey told the Armed Forces Press Service that he believes that the long wars in Iraq and Afghanistan may be factors in the growing incidents of sexual assault. He also stated that: \"If a perpetrator shows up at a court-martial with a rack of ribbons and has four deployments and a Purple Heart, there is certainly a risk that we might be a little too forgiving of that particular crime.\"", "May 17, 2013 \u2013 In an interview, Air Force Chief of Staff, Gen. Mark Walsh, said that sexual assaults in his branch of the military typically involve alcohol use and can be traced to a lack of respect for women. \"We have a problem with respect for women that leads to many of the situations that result in sexual assault in our Air Force,\" he told reporters in his Pentagon office. Walsh further stated that combatting the crisis is his top priority and that he reviews every reported case of sexual assault. ", "May 22, 2013 \u2013 The Pentagon announced that DOD's sexual assault prevention staff would be exempt from furloughs. According to Pentagon spokeswoman, Cynthia O. Smith, \"The full-time civilians working these programs and implementing policies will not be furloughed. This will ensure responsive victim care and ensure all the programs recently directed by Secretary Hagel are implemented swiftly and efficiently.\"", "May 24, 2013 \u2013 President Obama addressed graduates of the U.S. Naval Academy in Annapolis, MD, and noted in his commencement speech that the misconduct of some in the military can endanger U.S. forces and undermine U.S. efforts to achieve security and peace worldwide. He further stated that those who commit sexual assault are not only committing a crime, they also \"threaten the trust and discipline that make our military strong.\"", "May 25, 2013 \u2013 In a commencement speech at the U.S. Military Academy at West Point, NY, Defense Secretary Chuck Hagel told graduates that they must be the generation of leaders that will commit to building a culture of respect for every member of the military. He stated that sexual harassment and sexual assault in the military \"are a profound betrayal of sacred oaths and sacred trusts.\" He also quoted President Obama's remarks at the Naval Academy when he said, \"these crimes have no place in the greatest military on earth.\"", "May 30, 2013 \u2013 Pentagon officials reaffirmed DOD's commitment to fighting sexual assault by launching the Safe HelpRoom at http://SafeHelpline.org , a Sexual Assault Support Service for the DOD community. This new service allows victims to participate in moderated group chat sessions to connect with and support one another in a secure online environment. The Safe HelpRoom is in response to a need for peer support services identified by users of DOD's Safe Helpline for sexual assault victims.", "June 6, 2013 \u2013 In a speech at the 2013 Joint Women's Leadership Symposium, Navy Adm. James A. Winnefeld Jr., vice chairman of the Joint Chiefs of Staff, said plans to combat and eliminate sexual assault include a greater investment in specially trained sexual assault investigators and a push for more psychological, medical, and legal assistance for victims. The vice chairman also said officials will examine the scientific roots of behavioral factors associated with potential predators, which will assist sexual assault prevention efforts.", "June 7, 2013 \u2013 The Pentagon released a statement that Maj. Gen. Michael T. Harrison was suspended of his duties as the Commanding General of United States Army Japan and I Corps for failing in his duties as a commander to report or investigate an allegation of sexual assault.", "June 7, 2013 \u2013 Air Force officials announced Maj. Gen. Margaret H. Woodward has been assigned to direct the Air Force Sexual Assault Prevention and Response Office to replace Lt. Col. Jeffrey Krusinski, the former chief of the Air Force Sexual Assault Prevention and Response Program. He was arrested and charged by Arlington County, VA, police for allegedly being drunk and groping a woman in a parking lot one mile from the Pentagon. In the previous year, Maj. Gen. Woodward led the investigation of Air Force training in the wake of a sexual assault scandal centered at Lackland Air Force Base, Texas.", "June 27, 2013 \u2013 Defense Secretary Hagel met in person with the Sexual Assault Response Systems Review Panel for the first time. According to the Pentagon, \"the panel will conduct an independent review and assessment of the systems used to investigate, prosecute, and adjudicate crimes involving sexual assault and related offenses under the Uniform Code of Military Justice, and will develop recommendations to improve the effectiveness of those systems.\" DOD established the panel in accordance with the National Defense Authorization Act (NDAA) for Fiscal Year 2013 ( P.L. 112-239 , Section 576 (a)). Previously, Hagel held a teleconference with panel members.", "July 3, 2013 \u2013 The Chief of the National Guard Bureau, Army Gen. Frank J. Grass, launched a comprehensive campaign designed to assist National Guard units in combating sexual assault as part of a military-wide effort to protect victims and eradicate the crime from the ranks.", "July 9, 2013 \u2013 DOD Inspector General (IG) released its report, Joint Warfighting and Readiness Evaluation of the Military Criminal Investigative Organizations Sexual Assault Investigations . The report evaluated the Military Criminal Investigative Organizations' (MCIOs') sexual assault investigations in 2010 to determine whether they were adequately investigated. The report found most MCIO investigations (89%) met or exceeded the investigative standards and returned only cases with significant deficiencies (11%) to the MCIOs for corrective action.", "July 18, 2013 \u2013 The Air Force adopted two new measures to eliminate sexual assault from within the ranks, including requiring mandatory discharge for airmen, officer or enlisted, who commit sexual assault, and requiring the Air Force's most senior commanders to review actions taken on these cases. In addition, the Air Force Academy is reviewing the results of a survey on sexual assault taken on June 24, 2013. Suggestions from survey respondents ranged from involving faculty with character coaching to a complete revamping of how the Air Force Academy trains its freshmen.", "July 18, 2013 \u2013 Secretary of the Navy Ray Mabus announced additional resources for investigators and a new initiative designed to enhance accountability and transparency across the Navy. Mabus approved nearly $10 million to hire more than 50 additional Naval Criminal Investigative Service (NCIS) Family and Sexual Violence Program personnel to shorten investigation times, and directed the Navy and Marine Corps to regularly publish online the results of each service's courts- martial.", "July 18, 2013 \u2013 The Air Force announced that airmen who commit sexual assaults will be discharged, and senior commanders must review actions taken on sexual assault cases under new Air Force initiatives as of July 2, 2013.", "August 15, 2013 \u2013 Defense Secretary Hagel announced seven new anti-sexual assault initiatives in a memo detailing \"... absolute and sustained commitment to providing a safe environment in which every service member and DOD civilian is free from the threat of sexual harassment and assault,\" he wrote in a statement. \"Our success depends on a dynamic and responsive approach. We, therefore, must continually assess and strive to improve our prevention and response programs.\" ", "October 3, 2013 \u2013 Air Force Col. Alan R. Metzler, the deputy director for SAPRO, emphasized that the first step to stopping sexual assault in the military is through prevention but when prevention fails, new measures to improve victims' confidence and combat underreporting were needed. Metzler outlined the DOD Sexual Assault Advocate Certification Program (D-SAACP) and the Defense Sexual Assault Incident Database (DSAID), two initiatives set to improve the advocacy services provided to victims of sexual assault.", "November 9, 2013 \u2013 Army Maj. Gen. Gary S. Patton, director of DOD's SAPRO, reported on DOD's recent prevention and awareness successes before the Response Systems to Adult Sexual Assault Crimes Panel. He testified that new DOD initiatives to combat sexual assault helped create a 46% jump in victims reporting compared to the previous year.", "December 20, 2013 \u2013 President Obama instructed Defense Secretary Hagel and Chairman Dempsey to continue their efforts to make substantial improvements with respect to sexual assault prevention and response, including to the military justice system. He also directed that they report back with a full-scale review of their progress, by December 1, 2014."], "subsections": []}, {"section_title": "2014", "paragraphs": ["January 10, 2014 \u2013 Army Maj. Gen. Jeffrey J. Snow, the new SAPRO chief announced the release of the Annual Report to Congress on Sexual Harassment and Violence at the Military Service Academies . The report covered the 2012-13 academic year, and found in 2013, reports of sexual assault decreased at the U.S. Military Academy at West Point, New York and the U.S. Air Force Academy in Colorado Springs, Colorado. The number of reported incidents went up at the U.S. Naval Academy in Annapolis, Maryland.", "January 30, 2014 \u2013 The independent Response Systems to Adult Sexual Assault Crimes Panel accepted a subcommittee recommendation that senior military commanders retain authority for referring these crimes to courts-martial.", "May 1, 2014 \u2013 DOD released the 2013 Annual Report on Sexual Assault in the Military . The report covered the period from Oct. 1, 2012, through Sept. 30, 2013, and revealed 5,061 reports of sexual assault in the Defense Department, a 50 percent jump from the previous year. More than 70 percent of all cases that the military had jurisdiction resulted in criminal charges.", "July 17, 2014 \u2013 DOD collaborated with the Justice Department's Office for Victims of Crime to develop a curriculum that expands on the skills learned in initial sexual assault response coordinator and sexual assault prevention and response victim advocate training. ", "December 4, 2014 \u2013 Secretary Hagel released DOD's Report to the President of the United States on Sexual Assault Prevention and Response on its progress in addressing sexual assault in the military, and announced four directives to further strengthen the department's prevention and response program. According to this report, based on survey data, servicemembers experienced fewer sexual assaults in FY2014 than in FY2012, an estimated 19,000, down from 26,000. "], "subsections": []}, {"section_title": "2015", "paragraphs": ["January 16, 2015 \u2013 Secretary Hagel at the Air Force Sexual Assault Prevention and Response Summit remarked that the fight to end sexual assault in the military must be \"personal.\" He cited \"encouraging progress\" over the last year, but acknowledged more can be done, notably in areas such as social retaliation, which he said stems from the overall environment. ", "February 11, 2015 \u2013 The annual report on sexual harassment and violence at the military service academies estimated that overall rates of unwanted sexual contact at the military service academies declined in Academic Program Year (APY) 2013-2014, decreased for both men and women, indicating that fewer sexual assaults occurred at the academies in APY 13-14 than in APY 11-12. ", "February 19, 2015 \u2013 Health and criminal investigation experts spoke at the Army's Sexual Harassment/Assault Response Program Summit on the underreporting of male victims of sexual assault in the military due to factors such as shame and fear of being ostracized.", "March 26, 2015 \u2013 SAPRO head Army Maj. Gen. Jeffrey Snow monitored 50 initiatives put in place by past Defense secretaries Leon Panetta and Chuck Hagel. According to Snow, the most recent data, gathered last year, shows the past-year prevalence of sexual assault is down significantly, Snow said. Estimates indicate there were 6,000 to 7,000 fewer sexual assaults in 2014 than in 2012.", "May 1, 2015 \u2013 According to the 2014 RAND Military Workplace Stud y, \"the percentage of active duty women who experienced unwanted sexual contact over the past year declined from 6.1% in 2012 to an estimated 4.3% in 2014. For active duty men, the estimated prevalence rate dropped from 1.2% in 2012 to 0.9% in 2014. Based on these rates, an estimated 18,900 service members experienced unwanted sexual contact in 2014, down from around 26,000 in 2012.\" ", "May 22, 2015 \u2013 Defense Secretary Ash Carter announced Army Maj. Gen. Camille M. Nichols will assume duties as director of SAPRO effective June 8, 2015."], "subsections": []}, {"section_title": "2016", "paragraphs": ["January 8, 2016 \u2013 DOD announced the release of the Annual Report on Sexual Harassment and Violence at the Military Service Academies for A cademic P rogram Y ear 2014-2015 . Data in the report indicated the academies received 91 sexual assault reports during the academic year, an increase of 32 reports over the previous year.", "April 2 8 , 2016 \u2013 Defense Secretary Ash Carter announced a sexual assault retaliation prevention and response strategy aimed at how the department supports servicemembers who experience retaliation, while aligning prevention and response efforts across the services. ", "May 5, 2016 \u2013 The annual report of the Defense Department's Sexual Assault Prevention and Response Program indicated that DOD's efforts are having an impact. In FY2015, service members made 6,083 reports of sexual assault \u2013 the same rate as the previous fiscal year, with four in 1,000 servicemembers reporting sexual assault despite a smaller active force size. In addition, 21 percent of those making restricted reports in fiscal 2015 chose to convert to unrestricted reports, enabling them to participate in the military justice process.", "September 19 , 2016 \u2013 The Naval Academy in Annapolis, MD, hosted an all-day training event to strengthen how military and civilian communities work together to support servicemembers who report sexual assault in a joint program between DOD and the Justice Department.", "October 19, 2016 \u2013 DOD released the 2016 Military Investigation and Justice Experience Survey that allowed servicemembers who have experienced sexual assault and elected to participate in the military justice process the opportunity to provide DOD with direct feedback on their experiences; and to improve the services and support servicemembers reporting sexual assault. ", "December 15, 2016 \u2013 Defense Department officials announced the release of the \"DOD Plan to Prevent and Respond to Sexual Assault of Military Men,\" designed to enhance outreach to military men and increase efforts to help them recover."], "subsections": []}]}, {"section_title": "Congressional Action and Legislation", "paragraphs": ["The following information was compiled using Congress.gov, Congressional Quarterly (CQ.com), House.gov, Senate.gov, and Roll Call. See the section \"Resources\" for a list of congressional hearings, reports and other documents."], "subsections": [{"section_title": "113th Congress (2013-2014)", "paragraphs": ["January 23, 2013 \u2013 The House Armed Services Committee held a hearing on sexual misconduct at Lackland Air Force Base in San Antonio, TX.", "January 25, 2013 \u2013 H.R. 430 , Protect Our Military Trainees Act, was introduced. This legislation would have amended the Uniform Code of Military Justice to protect new members of the Armed Forces who are undergoing basic training from the sexual advances of the members of the Armed Forces responsible for their instruction. It also requires that violators be punished as a court-martial may direct. ", "March 5, 2013 \u2013 H.R. 975 , the Servicemember Mental Health Review Act, was introduced. This bill would have amended Title 10, United States Code, to extend the duration of the Physical Disability Board of Review and to the expand the authority of such Board to review the separation of members of the Armed Forces on the basis of a mental condition not amounting to disability, including separation on the basis of a personality or adjustment disorder. This would have included a review of those victims who have suffered military sexual trauma. ", "March 13, 2013 \u2013 S. 548 , Military Sexual Assault Prevention Act of 2013, was introduced, read twice, and referred to the Senate Armed Services Committee. This legislation aimed to amend Title 10, United States Code, and to improve capabilities of the Armed Forces to prevent and respond to sexual assault and sexual harassment in the Armed Forces.", "March 13, 2013 \u2013 Victims of sexual assault in the military testified before a Senate panel examining the military's handling of sexual assault cases and stated that the \"military justice system is broken.\" They urged Congress to make changes in the law that would stem the rape, sexual assault, and sexual harassment that they said are pervasive in the service branches. Several male Navy veterans testified before the Senate Armed Service Committee's military personnel panel investigating sexual assaults in the military. One recounted that he was raped in 2000 by a higher-ranking petty officer aboard a submarine. He told the committee that he carries permanent shame not for the sexual assault but over how the Navy forced him to leave. He stated in his testimony, \"I carry my discharge as an official and permanent symbol of shame, on top of the trauma of the physical attack, the retaliation and its aftermath.\"", "March 20, 2013 \u2013 S. 628 , Servicemember Mental Health Review Act, was introduced, read twice and referred to the Committee on Armed Services. Related to H.R. 975 , this bill would have amended Title 10, United States Code, to extend the duration of the Physical Disability Board of Review and to the expand the authority of such board to review the separation of members of the Armed Forces on the basis of a mental condition not amounting to disability, including separation on the basis of a personality or adjustment disorder. This would have included a review of those victims who may have suffered military sexual trauma.", "April 17, 2013 \u2013 H.R. 1593 , Sexual Assault Training Oversight and Prevention (STOP) Act, was introduced. This bill seeks to amend Title 10, United States Code, by establishing a Sexual Assault Oversight and Response Council and an enhanced Sexual Assault Oversight and Response Office \"to improve the prevention of and response to sexual assault in the Armed Forces, and by requiring the appointment of a Director of Military Prosecutions for sexual-related offenses committed by a member of the Armed Forces.\" ", "April 26, 2013 \u2013 A U.S. senator reportedly put a hold on the nomination of Air Force Lt. Gen. Susan Helms, nominated to serve as vice commander of the U.S. Space Command. Earlier in February 2012, Gen. Helms rejected the recommendation of legal counsel and overturned the conviction of an Air Force captain who had been found guilty of aggravated sexual assault of a female lieutenant.", "May 7, 2013 \u2013 S. 871 , Combating Military Sexual Assault Act of 2013, was introduced, read twice and referred to the Committee on Armed Services. This legislation would have aimed to provide any victim with a special military lawyer who would assist them throughout the process, prohibit sexual contact between instructors and trainees during and within 30 days of completion of basic training or its equivalent, and ensure that sexual assault response coordinators are available to help members of the National Guard and Reserve.", "May 7, 2013 \u2013 H.R. 1864 , to amend Title 10, United States Code, would have required an Inspector General investigation of allegations of retaliatory personnel actions taken in response to making protected communications regarding sexual assault, was introduced and referred to the House Armed Services Committee. This bill would have required the Inspector General of the Department of Defense (DOD), the Department of Homeland Security (DHS) with respect to the Coast Guard, or any of the military departments to investigate allegations of retaliatory personnel actions taken in response to making protected communications regarding alleged instances of rape, sexual assault, or other forms of sexual misconduct in violation of the Uniform Code of Military Justice.", "May 7, 2013 \u2013 At the Senate Armed Services Committee, Subcommittee on Personnel hearing Gen. Mark Welsh, the Air Force's Chief of Staff, told the committee that he and Air Force Secretary Michael Donley were \"appalled\" by the charges against Lt. Col. Jeffrey Krusinski, branch chief of the Air Force's Sexual Assault and Prevention Office. He was arrested and charged by Arlington County, VA, police for allegedly being drunk and groping a woman in a parking lot one mile from the Pentagon. \"Sexual assault prevention and response efforts are critically important to us,\" Welsh said. \"It is unacceptable that this occurs anywhere, at any time, in our Air Force.\"", "May 8, 2013 \u2013 H.R. 1867 , the Better Enforcement for Sexual Assault Free Environments (BE SAFE) Act of 2013, was introduced, read twice, and referred to the House Armed Services Committee. This bill would have amended Title 10, United States Code, \"to require an Inspector General investigation of allegations of retaliatory personnel actions taken in response to making protected communications regarding sexual assault.\" This bill would ensure those found guilty of rape, sexual assault, sodomy, or an attempt to commit any of those crimes, are\u2014at a minimum\u2014dismissed or dishonorably discharged from the military. The five-year statute of limitations within the military's justice system for sexual assault cases would be eliminated, and legal assistance services available to victims would be expanded.", "May 8, 2013 \u2013 In a hearing of the Defense Subcommittee of the Senate Appropriations Committee, senators questioned the Air Force's top leaders over rising sexual assaults in the military. Some senators cited DOD statistics from the Annual Report on Sexual Assault in the Military 2012 on the number of incidents of sexual assaults the same week Lt. Col. Jeffrey Krusinski, Chief of the Air Force's Sexual Assault Prevention and Response Branch, was arrested and charged with sexual battery.", "May 9, 2013 \u2013 A hearing of the Defense Subcommittee of the House Appropriations Committee on the Air Force budget was held. Witnesses included Michael Donley, Secretary of the Air Force, and General Mark Welsh, Air Force Chief of Staff. Members of the committee questioned them on Defense Secretary Hagel's review of the decision by Lt. Gen. Craig Franklin to dismiss Lt. Col. James Wilkerson's sexual assault conviction.", "May 14, 2013 \u2013 H.Res. 213 , a resolution to establish the \"Special Committee on Sexual Assault and Abuse in the Armed Forces\" was introduced. A \"Dear Colleague\" memorandum urged support of this legislation referencing Gen. Martin Dempsey's denouncement of military sexual assault as a \"crisis\" and the need for Congress to address this problem in a \"deeper, more comprehensive manner.\" This Special Committee would have included 19 members appointed by the Speaker and Minority Leader, as well as chairman and ranking members of the committees on Armed Services, Appropriations, Judiciary, and Oversight and Government Reform.", "May 14, 2013 \u2013 H.R. 1960 , a bill to authorize appropriations for FY2014 for military activities of the Department of Defense, for military construction, and for defense activities of the Department of Energy, to prescribe military personnel strengths for such fiscal year, and for other purposes, was introduced. The FY2014 NDAA addressed the issue of sexual assault in the military by establishing minimum sentencing guidelines for any service members found guilty of sexual assault as well as other provisions.", "May 15, 2013 \u2013 H.R. 1986 , Sexual Assault Nurse Examiner (SANE) Deployment Act, was introduced. This bill would have provided for the assignment of Sexual Assault Nurse Examiners-Adult/Adolescent to brigades and equivalent units of the Armed Forces. ", "May 15, 2013 \u2013 H.R. 2002 , Combating Military Sexual Assault Act of 2013, was introduced and referred to the House Committee on Armed Services. This bill was related to S. 871 , and would have provided any sexual assault victim with a special military lawyer who would assist them throughout the process, prohibit sexual contact between instructors and trainees during and within 30 days of completion of basic training or its equivalent, and ensure that sexual assault response coordinators (SARCs) are available to help members of the National Guard and Reserve. ", "May 16, 2013 \u2013 H.R. 2016 , Military Justice Improvement Act of 2013, was introduced and referred to the Committee on Armed Services. This bill would have required \"a commanding officer who receives a report of a sexual-related offense involving a member in such officer's chain of command to act immediately upon such report by way of referral to the appropriate criminal investigative office or service.\" This bill was related to S. 538 , Military Sexual Assault Prevention Act of 2013, and S. 967 , Military Justice Improvement Act of 2013.", "May 16, 2013 \u2013 S. 967 , Military Justice Improvement Act of 2013, was introduced, read twice, and referred to the Committee on Armed Services. This bill would have required a commanding officer who receives a report of a sex-related offense involving a member in such officer's chain of command to act immediately upon such report by way of referral to the appropriate criminal investigative office or service.", "May 21, 2013 \u2013 S. 992 , a bill to provide for offices on sexual assault prevention and response under the Chiefs of Staff of the Armed Forces, to require reports on additional offices and selection of sexual assault prevention and response personnel, and for other purposes. This bill was read twice and referred to the Committee on Armed Services.", "May 22, 2013 \u2013 A House panel passed a number of changes in sexual assault prevention programs that limited commander discretion in reducing or dismissing rape and assault charges and expanded support services for victims. The House Armed Services Subcommittee on Military Personnel approved the personnel issues as part of H.R. 1960 , the FY2014 NDAA bill.", "May 22, 2013 \u2013 The Senate Appropriations Subcommittee on Defense held a hearing on the Army's FY 2014 Budget Request. Witnesses included Secretary of the Army, John McHugh and Chief of Staff of the Army, General Raymond T. Odierno. Army Secretary McHugh announced at this hearing that the service will soon require soldiers being considered for sexual assault prevention jobs to undergo behavioral-health evaluations as a way of screening out potential sex offenders from these high-profile positions. This was in response to a senator's question about the criteria for sexual assault prevention jobs. McHugh said that service record and availability are the only criteria commanders are using to fill these jobs since sexual-assault prevention positions do not fall under any military occupational specialty and lack career incentives.", "May 23, 2013 \u2013 S. 1032 , Better Enforcement for Sexual Assault Free Environments Act of 2013, was introduced, read twice and referred to the Committee on Armed Services. This bill would amend Title 10, United States Code, to make certain improvements in the Uniform Code of Military Justice related to sex-related offenses committed by members of the Armed Forces.", "June 4, 2013 \u2013 The uniformed chiefs of the Army, Navy, Air Force, Marine Corps, and Coast Guard appeared before a hearing of the Senate Armed Services Committee, Subcommittee on Military Personnel. These military leaders acknowledged that despite a \"zero tolerance\" for sexual abuse, they had neglected the \"epidemic\" in the ranks by not always monitoring subordinate commanders. Chairman of the Joint Chiefs of Staff, Army Gen. Martin Dempsey pointed to competing demands and pressures of fighting two wars in Iraq and Afghanistan, as a justification for lack of adequate monitoring. The Service Chiefs voiced support for legislative changes that would take tougher action against offenders and provide more support for victims of military sexual assault. They opposed a legislative proposal that would remove unit commanders' legal power to oversee major criminal cases and transfer that authority to uniformed prosecutors. The Army Chief of Staff, Gen. Ray Odierno, noted that taking away commanders' authority in matters of military justice would adversely impact discipline and that \"we cannot, however, simply 'prosecute' our way out of this problem. At its heart, sexual assault is a discipline issue that requires a culture change.\"", "June 4, 2013 \u2013 S. 1092 was introduced, read twice, and referred to the Senate Armed Services Committee. This bill would have amended Title 10, United States Code, to require an Inspector General investigation of allegations of retaliatory personnel actions taken in response to making protected communications regarding sexual assault.", "June 6, 2013 \u2013would allow victims of sexual assault to apply for a permanent change The House Armed Services Committee passed H.R. 1960 , the NDAA for FY2014, by a vote of 59-2. According to the Committee's Fact Sheet, \"the FY14 NDAA of station or unit transfer, while authorizing the Secretary of Defense to inform commanders of their authority to remove or temporarily reassign service members who are the alleged perpetrators of sexual assault. It also requires the provision of victims' counsels, qualified and specially trained lawyers in each of the services, to be made available to provide legal assistance to the victims of sex-related offenses. The FY14 NDAA adds rape, sexual assault, or other sexual misconduct to the protected communications of service members with a Member of Congress or an Inspector General.\"", "June 14, 2013 \u2013 The House passed H.R. 1960 , the NDAA for FY2014 by a vote of 315 to 108 (Roll no. 244). This bill includes a provision protecting victims of sexual assault in the Armed Forces as protected communications under military whistle-blower laws, to shield victims against retaliatory actions. The measure seeks to encourage more victims to report assaults, rape and other forms of sexual misconduct.", "June 17, 2013 \u2013 H.R. 2397 , \"Department of Defense Appropriations Act, 2014,\" was introduced and referred to the House Committee on Appropriations. It was reported as an original measure, H.Rept. 113-113 . Lawmakers wrote in this committee report that they were \"outraged by the pervasive problem of sexual assault in the Armed Forces. Sexual assault is not just an issue in the military; it is an epidemic. To address it, the Committee believes that there must be a culture change at every level of the military, from the most senior leadership to the most junior ranks.\" Included was a measure that would provide $182 million for the Pentagon's Sexual Assault Prevention and Response Office (SAPRO) and for an expansion of a victim's counseling program. For FY2013, the programs received $95 million. The bill included $25 million that was not requested by the administration in a transfer account to expand assistance across the Defense Department. ", "June 20, 2013 \u2013 S. 1197 , NDAA for Fiscal Year 2014, was introduced in the Senate. This bill would have authorized \"appropriations for fiscal year 2014 for military activities of the Department of Defense, for military construction, and for defense activities of the Department of Energy, to prescribe military personnel strengths for such fiscal year, and for other purposes,\" and referred to the Committee on Armed Services. The original measure was reported to the Senate in Report No. 113-44 and placed on the Legislative Calendar under General Orders (Calendar No. 91). Included in this bill was Title V\u2014Military Personnel Policy, Subtitle E\u2014Sexual Assault Prevention and Response and Military Justice.", "June 27, 2013 \u2013 H.R. 1864 , a bill \"To amend Title 10, United States Code, to require an Inspector General investigation of allegations of retaliatory personnel actions taken in response to making protected communications regarding sexual assault,\" was agreed to/passed in the House, 423-0 (Roll no. 294).", "July 18, 2013 \u2013 Army Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, and Navy Adm. James A. Winnefeld Jr., the vice chairman, in a hearing before the Senate Armed Services Committee said that commanders should retain responsibility for prosecuting service members accused of sexual assault, and taking that authority away could harm good order and discipline.", "July 2 2 , 2013 \u2013 H.R. 2777 , Stop Pay for Violent Offenders Act, was introduced \"to amend Title 10, United States Code, to authorize the Secretaries of the military departments to suspend the pay and allowances of a member of the Armed Forces who is held in confinement pending trial by court-martial or by civil authority for any sex-related offense or capital offense.\"", "July 24, 2013 \u2013 H.Amdt. 408 to H.R. 2397 , an amendment to provide funds to identify individuals who were separated from the military on the grounds of a disorder subsequent to reporting a sexual assault and, if appropriate, correcting their record. This amendment (A065) was agreed to by voice vote.", "July 24, 2013 \u2013 H.R. 2397 , \"Department of Defense Appropriations Act, 2014,\" was passed/agreed to in House, 315 - 109 (Roll no. 414).", "October 22, 2013 \u2013 H.R. 3304 , the NDAA for FY2014, was introduced in the House. As introduced, the bill would have provided for a defense counsel interview of victim of an alleged sex-related offense in presence of trial counsel, counsel for the victim, or a Sexual Assault Victim Advocate, prohibition on service in the Armed Forces by individuals who have been convicted of certain sexual offenses, Coast Guard regulations regarding request for permanent change of station or unit transfer by victim of sexual assault, temporary administrative reassignment or removal of an active duty member accused of committing a sexual assault, Inspector General investigation of allegations of retaliatory personnel actions taken in response to making protected communications regarding sexual assault, compliance tracking of commanding officers in conducting organizational climate assessments for purposes of preventing and responding to sexual assaults, advancement of submittal deadline for report of independent panel on assessment of military response systems to sexual assault, retention of certain forms on sexual assault, timely access to Sexual Assault Response Coordinators by the National Guard and Reserves, and qualifications and selection of Department of Defense sexual assault prevention and response personnel and required availability of Sexual Assault Nurse Examiners. It also would establish commanding officer actions regarding sexual assault reports, an eight-day incident reporting requirement in response to unrestricted report of sexual assault in which the victim is a member of the Armed Forces, and curricula that addresses the prevention of sexual assault at the military service academies.", "December 26, 2013 \u2013 H.R. 3304 , the NDAA for FY2014 became P.L. 113-66 . As enacted, the bill included more than two dozen provisions to address an epidemic of sexual assault in the military in Title XVII\u2014Sexual Assault Prevention and Response and Related Reforms, Subtitle A\u2014Reform of Uniform Code of Military Justice. ", "February 26, 2014 \u2013 Dr. Karen S. Guice, principal deputy assistant secretary of defense for health affairs, and other Defense Department officials testified before the Senate Armed Services Committee's personnel subcommittee on the relationship between military sexual assault survivors and the subsequent development of suicide and post-traumatic stress disorder. ", "April 9, 2014 \u2013 H.R. 4435 , the Howard P. \"Buck\" McKeon National Defense Authorization Act for Fiscal Year 2015, was introduced in the House. The bill would have applied Title XVII of the National Defense Authorization Act for Fiscal Year 2014 ( P.L. 113-66 ; 127 Stat. 950) to the military service academies, consulted with victims of sexual assault regarding victims' preference for prosecution of offense by court-martial or civilian court, created a confidential review of characterization of terms of discharge for victims of sexual offenses, revised requirements relating to DOD policy on retention of evidence in a sexual assault case to allow return of personal property upon completion of related proceedings, required the DOD Inspector General to review separation of members who made unrestricted reports of sexual assault, and would have created a deadline for submission of report containing results of review of Office of Diversity Management and Equal Opportunity role in sexual harassment cases. Prior to passing in the House, the House Armed Services Committee rejected an amendment from Congresswoman Speier that would have removed the military chain of command from decisions to prosecute sexual assault cases and other major crimes, except offenses that are unique to the military. She offered an alternative proposal, which would have only removed commanding officers' prosecutorial discretion for instances of sexual assault, that was also rejected by a 28-34 vote. It was received in the Senate, read twice, and placed on Senate Legislative Calendar under General Orders. Calendar No. 425.", "June 2, 2014 \u2014 S. 2410 , the Carl Levin National Defense Authorization Act for Fiscal Year 2015, was introduced in the Senate. It was placed on Senate Legislative Calendar under General Orders. Calendar No. 402. The bill included measures on military justice such as enhancing sexual assault prevention and response, the application of P.L. 113-66 , Title XVII to military academies, and the collaboration between the Departments of Justice and Defense.", "December 19 , 2014 \u2014 H.R. 3979 , the Carl Levin and Howard P. \"Buck\" McKeon National Defense Authorization Act for Fiscal Year 2015, was signed as P.L. 113-291 . Subtitle D\u2014Military Justice, Including Sexual Assault and Domestic Violence Prevention and Response addressed the following: modification of DOD policy on retention of evidence in a sexual assault cases to permit return of personal property upon completion of related proceedings; requirements relating to Sexual Assault Forensic Examiner; analysis and assessment of disposition of most serious offenses; a plan for limited use of certain information on sexual assaults in restricted reports by military criminal investigative organizations; the establishment of a Defense Advisory Committee on Investigation, Prosecution, and Defense of Sexual Assault in the Armed Forces; confidential review of the terms of discharge of sexual assault survivors; deadline for submission of report containing results of review of Office of Diversity Management and Equal Opportunity role in sexual harassment cases; and applied Title XVII of the NDAA for Fiscal Year 2014 ( P.L. 113-66 ; 127 Stat. 950) to the military service academies."], "subsections": []}, {"section_title": "114th Congress (2015-2016)", "paragraphs": ["January 13, 2015 \u2014 S. 178 , the Justice for Victims of Trafficking Act of 2015 was introduced in the Senate. Title V of this bill \"Military Sex Offender Reporting\" stipulates that the Secretary of Defense shall provide the Attorney General information about sex offenders in the military to be included in the National Sex Offender Registry and the Dru Sjodin National Sex Offender Public Website. It became P.L. 114-22 on May 29, 2015.", "February 3, 2015 \u2014 H.R. 677 , American Heroes COLA Act of 2015, was introduced in the House, passed on February 9, and the next day was received in the Senate, read twice, and referred to the Committee on Veterans' Affairs. Section 6 proposed that veterans whose claims were being reviewed again in relation to a previously denied claim relating to military sexual trauma be given priority, among other claims.", "February 12, 2015 \u2014 H.R. 956 , the Military Track, Register and Alert Communities Act of 2015 (Military TRAC Act) was introduced in the House and referred to the House Armed Services Committee's Subcommittee on Military Personnel on November 23. This bill intended to require DOD to maintain a sex offender registry of individuals convicted of certain sex offenses under the Uniform Code of Military Justice or of other military offenses appropriate for sex offender registration purposes.", "April 13, 2015 \u2014 H.R. 1735 , the National Defense Authorization Act for Fiscal Year 2016, was introduced in the House. Subtitle D addressed military justice, including sexual assault and domestic violence prevention and response. ", "April 24, 2015 \u2014 H.R. 2029 , the Consolidated Appropriations Act, 2016 was introduced in the House and later became P.L. 114-113 . Section 8057 specified that \"$25,000,000 shall be for continued implementation and expansion of the Sexual Assault Special Victims' Counsel Program.\"", "May 14, 2015 \u2014 S. 1356 , the National Defense Authorization Act for Fiscal Year 2016 was introduced in the Senate and later became P.L. 114-92 on November 25, 2015. Subtitle D \"Military Justice, Including Sexual Assault and Domestic Violence Prevention and Response\" amended the Uniform Code of Military Justice, authorized Special Victims' Counsel for civilian DOD employees, required the DOD to develop a policy to standardize the training for Special Victims' Counsel, required the establishment of Defense Advisory Committee on Investigation, Prosecution, and Defense of Sexual Assault in the Armed Forces within 90 days, required the development of a plan to improve prevention and response to sexual assaults of male members of the Armed Forces, required the establishment of a strategy to prevent retaliation against Armed Forces members who report or intervene on behalf of sexual assault victims, and authorized the President to modify Rule 304(c) of the Military Rules of Evidence to conform to the rules governing the admissibility of the corroboration of admissions and confessions in the trial of criminal cases in the U.S. district courts.", "June 11, 2015 \u2014 S. 1558 , Department of Defense Appropriations Act, 2016, was introduced in the Senate. The bill would have required specified O&M funds to be used for continued implementation and expansion of the Sexual Assault Prevention and Response Program.", "June 11, 2015 \u2014 S. 1567 , a bill to amend Title 10, United States Code, to provide for a review of the characterization or terms of discharge from the Armed Forces of individuals with mental health disorders alleged to affect terms of discharge, was introduced in the Senate. The bill proposed to address medical evidence reviews for former members applying for relief from the terms of their discharge due to military sexual trauma among other conditions. ", "June 11, 2015 \u2014 S.Amdt. 1578 to S.Amdt. 1463 in H.R. 1735 , National Defense Authorization Act for Fiscal Year 2016, was proposed in the Senate and later considered and defeated on June 16. This bill was intended to reform procedures for determinations to proceed to trial by court-martial for certain offenses under the Uniform Code of Military Justice. It did not achieve 60 votes in the Senate by Yea-Nay Vote. The final vote was 50 - 49. ", "April 12, 2016 \u2014 H.R. 4909 , the NDAA for FY2017, was introduced in the House where it passed on May 18. On May 26, it was received in the Senate, read twice, and placed on Senate Legislative Calendar under General Orders. Calendar No. 502.", "April 18, 2016 \u2014 H.R. 4991 , the Prevent Retaliation and Open up Transparency to Expand Care for Troops (PROTECT) Act of 2016, was introduced in the House and later referred to the House Armed Services' Subcommittee on Military Personnel. The bill intended to amend the Uniform Code of Military Justice to establish the offense of retaliation with provisions that would permit any person intent on retaliating against anyone for reporting or planning to report a criminal offense to be punished as a court-martial may direct.", "May 18, 2016 \u2014 S. 2943 , the National Defense Authorization Act for Fiscal Year 2017, was introduced in the Senate and became P.L. 114-328 on December 23. Subtitle D specified requirements for the review by a discharge review board of claims by former members asserting post-traumatic stress disorder (PTSD) or traumatic brain injury (TBI) in connection with combat or sexual trauma. Subtitle E \"Military Justice and Legal Assistance Matters\" required an annual report on sexual assault and response efforts, required Sexual Assault Prevention and Response Office to establish evaluation metrics and best practices in the prevention of and response to retaliation, and modified the definition of sexual harassment for the purposes of investigations of complaints of harassment by commanding officers. Title XXXV \"Maritime Matters\" established requirements for policies and training regarding sexual harassment and sexual assault prevention and response at the U.S. Merchant Marine Academy and required the Inspector General of the Department of Transportation to submit a report to Congress about the sexual harassment and sexual assault prevention and response program at the U.S. Merchant Marine Academy. Title LIV \"Court-Martial Jurisdiction\" specified the sexual offenses over which general courts-martial have exclusive jurisdiction. Title LX \"Punitive Articles\" created a new section of the Uniform Code of Military Justice addressing accountability for sexual misconduct committed by recruiters and trainers during the various phases within the recruiting and basic military training environments, revised the definition of ''sexual act'' with respect to the offenses of rape and sexual assault.", "May 19, 2016 \u2014 H.R. 5293 , Department of Defense Appropriations Act, 2017, was introduced in the House, passed on June 16, received in the Senate the next day, where it received a motion to proceed to consideration. The bill would have required O&M funds to be used for continued implementation and expansion of the Sexual Assault Prevention and Response (SAPR) Program.", "May 26, 2016 \u2014 S. 3000 , Department of Defense Appropriations Act, 2017, was introduced in the Senate and placed on Senate Legislative Calendar under General Orders. Calendar No. 500. The Senate Committee on Appropriations, Subcommittee on Department of Defense held several hearings prior from February-April. The bill would have required specified O&M funds to be used for continued implementation and expansion of the SAPR Program."], "subsections": []}]}, {"section_title": "Selected Resources", "paragraphs": [], "subsections": [{"section_title": "Government Sources", "paragraphs": [], "subsections": [{"section_title": "Department of Defense", "paragraphs": ["DOD Directive No. 6495.01. \"Sexual Assault Prevention and Response (SAPR) Program,\" January 23, 2012, Incorporating Change 3, April 11, 2017, at http://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodd/649501p.pdf", "DOD Directive No. 6495.02. \"Sexual Assault Prevention and Response (SAPR) Program Procedures,\" March 28, 2013, Incorporating Change 3, May 24, 2017, at https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/649502p.pdf ", "DOD Inspector General (IG). E valuation of the Military Criminal Investigative Organizations Sexual Assault Investigations, DODIG-2013-091, July 9, 2013, 104 p . at http://www.dodig.mil/reports.html/Article/1118941/evaluation-of-the-military-criminal-investigative-organizations-sexual-assault/ ", "Sexual Assault Prevention and Response Office (SAPRO) at https://www.sapr.mil/ ", "Includes the full text of DOD Annual Reports, FY2004 - FY2016, and reports on Sexual Harassment and Violence at the U.S. Military Service Academies, Academic Program Years (APY) 2005-2018."], "subsections": [{"section_title": "Non-DOD Reports", "paragraphs": ["\"Final 2014\u20132015 Academic Program Year Annual Report on Sexual Harassment and Sexual Assault at the United States Merchant Marine Academy,\" Maritime Administration, undetermined date, at https://www.marad.dot.gov/wp-content/uploads/pdf/Final-2014-2015-SASH-Report.pdf ", "\"Department of Transportation U.S. Merchant Marine Academy Culture Audit, Deliverable 4. Final Report,\" U.S. Merchant Marine Academy, December 2016, at https://cms.dot.gov/sites/dot.gov/files/docs/mission/civil-rights/263966/dot-usmma-report.pdf ", "\"Sexual Assault Prevention and Response (SAPR) Program,\" United States Coast Guard, LMI, December 2016, at https://media.defense.gov/2017/Mar/29/2001723560/-1/-1/0/CIM_1754_10E.PDF ", "\"Preliminary 2015-2016 Academic Year Biennial Survey and Report on Sexual Harassment and Sexual Assault at the United States Merchant Marine Academy,\" Maritime Administration, January 12, 2017, at https://www.marad.dot.gov/wp-content/uploads/pdf/Preliminary-2015-2016-SASH-Report.pdf "], "subsections": []}]}, {"section_title": "Government Accountability Office (GAO)", "paragraphs": ["Military Justice: Oversight and Better Collaboration Needed for Sexual Assault Investigations and Adjudications , GAO-11-579, Jun 22, 2011, 42 p. http://www.gao.gov/products/GAO-11-579", "Preventing Sexual Harassment: DOD Needs Greater Leadership Commitment and an Oversight Framework , GAO-11-809, Sep 21, 2011, 47 p. http://www.gao.gov/assets/590/585344.pdf", "Prior GAO Work on DOD's Actions to Prevent and Respond to Sexual Assault in the Military , GAO-12-571R, Mar 30, 2012, 40 p. http://www.gao.gov/assets/590/589780.pdf", "DOD Has Taken Steps to Meet the Health Needs of Deployed Servicewomen, but Actions Are Needed to Enhance Care for Sexual Assault Victims, GAO-13-182, January 29, 2013, 40 p. http://www.gao.gov/assets/660/651624.pdf", "Military Personnel: Actions Needed to Address Sexual Assaults of Male Servicemembers, Report to the Committee on Armed Services , GAO-15-284, March 19, 2015, 86 p. http://www.gao.gov/products/GAO-15-284 ", "Sexual Assault: Actions Needed to Improve DOD's Prevention Strategy and to Help Ensure It Is Effectively Implemented, GAO-16-61, November 4, 2015, 59 p. http://www.gao.gov/products/GAO-16-61 ", "DOD and Coast Guard: Actions Needed to Increase Oversight and Management Information on Hazing Incidents Involving Servicemembers, GAO-16-226, Feb 9, 2016, 74 p. http://www.gao.gov/products/GAO-16-226 "], "subsections": []}, {"section_title": "Selected Articles, Studies and Reports", "paragraphs": ["The following news sources are listed in chronological order to make it easier to follow the numerous incidents of wide-spread misconduct reported in the media. Military.com has ongoing news on military sexual assault at http://www.military.com/topics/sexual-assault . "], "subsections": [{"section_title": "2012", "paragraphs": ["Montgomery, Nancy. \"Johnson Found Guilty of Last Two Counts; Awaits Sentencing.\" Stars and Stripes , June 13, 2012, at http://www.stripes.com/news/johnson-found-guilty-of-last-two-counts-awaits-sentencing-1.180204", "Carroll, Chris. \"Air Force has Identified 31 Alleged Victims in Lackland Sex Abuse Scandal,\" Stars and Stripes, June 28, 2012, at http://www.stripes.com/news/air-force-has-identified-31-alleged-victims-in-lackland-sex-abuse-scandal-1.181597", "Dao, James. \"Instructor for Air Force Is Convicted in Sex Assaults,\" New York Times , July 20, 2012, at http://www.nytimes.com/2012/07/21/us/lackland-air-force-base-instructor-guilty-of-sex-assaults.html?pagewanted=all&_r=0 ", "Blansett, Susan and Hoffman, Michael. \"Sexual Assault Cases Flood Military Courts,\" Military.com, August 13, 2012, at http://www.military.com/daily-news/2012/08/13/sex-assault-cases-flood-military-courts.html"], "subsections": []}, {"section_title": "2013", "paragraphs": ["Risen, James. \"Honor Betrayed: Attacked at 19 by an Air Force Trainer, and Speaking Out,\" New York Times , February 26, 2013, at http://www.nytimes.com/2013/02/27/us/former-air-force-recruit-speaks-out-about-rape-by-her-sergeant-at-lackland.html?pagewanted=all", "Mulrine, Anne. \"Seeking the Sex-Assault Solution,\" Air Force Magazine , April 2013, at http://www.airforcemag.com/MagazineArchive/Pages/2013/April%202013/0413solution.aspx", "\"5 Former Lackland Commanders Disciplined,\" Military.com, May 2, 2013, at http://www.military.com/daily-news/2013/05/02/5-former-lackland-commanders-disciplined.html", "Kime, Patricia. \"Lawmakers Act Fast with New Legislation on Military Sexual Assault.\" Army Times , May 7, 2013.", "Shapira, Ian. \"July Trial Set for Jeffrey Krusinski, Air Force Officer Accused of Sexual Battery.\" Washington Post , May 9, 2013, at https://www.washingtonpost.com/local/july-trial-set-for-air-force-officer-accused-of-sexual-battery/2013/05/09/8a21eb92-b8d9-11e2-92f3-f291801936b8_story.html?utm_term=.e0d4951e6573 ", "Steinhauer, Jennifer. \"Lawmakers, at White House, Discuss Sex Abuse in Military.\" New York Times , May 9, 2013, at http://www.nytimes.com/2013/05/10/us/politics/lawmakers-huddle-at-white-house-on-sex-abuse-in-military.html?_r=0", "Whitlock, Craig. \"Pentagon Grapples with Sex Crimes by Military Recruiters,\" Washington Post , May 12, 2013, at http://articles.washingtonpost.com/2013-05-12/world/39210853_1_military-recruiters-sexual-abuse-army-reserve", "Sisk, Richard. \"Assault Prevention NCO Investigated for Sex Crimes.\" Military.com, May 15, 2013, at http://www.military.com/daily-news/2013/05/15/assault-prevention-nco-investigated-for-sex-crimes.html", "Whitlock, Craig. \"Some in Congress want Changes in Military Law as a Result of Sex Crimes,\" Washington Post , May 15, 2013, at http://www.washingtonpost.com/world/national-security/some-in-congress-want-changes-in-military-law-as-result-of-sex-crimes/2013/05/15/672a2a8a-bd8b-11e2-a31d-a41b2414d001_story.html", "Sisk, Richard. \"Sex Assault Crisis Pushes Senate to Overhaul UCMJ,\" Military.com, May 16, 2013, at http://www.military.com/daily-news/2013/05/16/sex-assault-crisis-pushes-senate-to-overhaul-ucmj.html", "Tilghman, Andrew. \"Dempsey: DOD May Have Become 'Too Forgiving' of Sexual Assault,\" Army Times , May 17, 2013.", "Brady, Gen. Roger Brady (ret.). \"Commentary: Telling Truths about Sexual Assault is Risky,\" Air Force Times , May. 21, 2013.", "Salcedo, Michele. \"Senator: Fire Commanders Allowing Sex Assault,\" Army Times, May 26, 2013.", "Tucker, Eric. \"More Details Released on Annapolis Sex Assault Investigation: Allegations Made Against Three Football Players,\" Navy Times , May 30, 2013.", "Lardner, Richard. \"Brass Seeks to Temper Military Justice Overhaul,\" Associated Press, June 3, 2013, at http://www.military.com/daily-news/2013/06/03/brass-seeks-to-temper-military-justice-overhaul.html", "Cassata, Donna and Richard Lardner. \"Sexual Assaults Force Changes to Military Justice,\" Associated Press, June 4, 2013, at http://www.military.com/daily-news/2013/06/04/sexual-assaults-force-changes-to-military-justice.html ", "Zengerle, Patricia. \"U.S. Lawmakers Act to Limit Military Authority in Sex Assault Cases,\" Reuters, June 5, 2013, at http://www.reuters.com/article/2013/06/05/us-usa-military-sexassault-congress-idUSBRE9541IG20130605", "Cassata, Donna and Richard Lardner. \" House OKs 2-Yr Jail Term for Military Sex Assault ,\" Associated Press, June 14, 2013, at http://www.military.com/daily-news/2013/06/14/house-oks-2-year-jail-term-for-military-sex-assault.html", "Montgomery, Nancy. \" After 2 decades of sexual assault in military, no real change in message ,\" Stars and Stripes , July 7, 2013, at https://www.stripes.com/news/after-2-decades-of-sexual-assault-in-military-no-real-change-in-message-1.229091", "Steinhauer, Jennifer. \"Complex Fight in Senate over Curbing Military Sex Assaults,\" New York Times , June 14, 2013, at http://www.nytimes.com/2013/06/15/us/politics/in-senate-complex-fight-over-curbing-sexual-military-assaults.html?pagewanted=all", "Dao, James. \"In Debate over Military Sexual Assault, Men Are Overlooked Victims,\" New York Times , June 23, 2013, at http://www.nytimes.com/2013/06/24/us/in-debate-over-military-sexual-assault-men-are-overlooked-victims.html?pagewanted=all&_r=0", "Sisk, Richard. \"Military Tries to Sever Booze, Sex Assault Link,\" Military.com, July 8, 2013, at http://www.military.com/daily-news/2013/07/08/military-tries-to-sever-booze-sex-assault-link.html ", "Watson, Julie. \"Military Works to Change Culture to Combat Rape,\" Associated Press, July 15, 2013, at http://www.military.com/daily-news/2013/07/15/military-works-to-change-culture-to-combat-rape.html", "Olson, Wyatt. \"IG Review Finds Deficiencies in Sex Assault Cases,\" Stars and Stripes, July 16, 2013, at http://www.military.com/daily-news/2013/07/16/ig-review-finds-deficiencies-in-sex-assault-cases.html", "Shanker, Thom. \"New Support for Military in Sex Cases,\" New York Times , July 24, 2013, at http://www.nytimes.com/2013/07/25/us/politics/new-support-for-military-in-sex-cases.html", "Taranto, James. \"A Strange Sort of Justice at West Point,\" The Wall Street Journal, July 26, 2013, at https://www.wsj.com/articles/a-strange-sort-of-justice-at-west-point-1376453937", "Cassata, Donna, \"Senator Targets Military Law over Sexual Assault,\" Associated Press, July 29, 2013, at http://www.military.com/daily-news/2013/07/29/senator-targets-military-law-over-sexual-assault.html?comp=7000023317843&rank=3", "Groer, Annie. \" Military brass claim progress in pursuing sexual assault cases ,\" Washington Post, August 1, 2013, at https://www.washingtonpost.com/blogs/she-the-people/wp/2013/08/01/military-brass-claim-progress-in-pursing-sexual-assault-cases/?utm_term=.72e55e7e218c ", "Jennifer Koons. \"Sexual Assault in the Military: Can the Pentagon stem the rise in incidents?\" CQ Researcher , vol. 23, no. 29 (A ugust 9, 2013 ), p p. 693-716 .", "Laird, Lorelei. \" Military lawyers confront changes as sexual assault becomes big news ,\" ABA (American Bar Association) Journal , September 2013, at http://www.abajournal.com/magazine/article/military_lawyers_confront_changes_as_sexual_assault_becomes_big_news/ ", "Jelinek, Pauline. \" Pentagon: Reports of Sexual Assault Up 46 Percent ,\" Associated Press, November 8, 2013, at http://www.military.com/daily-news/2013/11/08/pentagon-reports-of-sexual-assault-up-46-percent.html", "Matthews, Michael F. \" The Untold Story of Military Sexual Assault ,\" The New York Times, November 24, 2013, at http://www.nytimes.com/2013/11/25/opinion/the-untold-story-of-military-sexual-assault.html ", "\" Men Sexually Assaulted in the Military Speak Out ,\" Baltimore Sun, December 20, 2013, at http://www.military.com/daily-news/2013/12/20/men-sexually-assaulted-in-the-military-speak-out.html"], "subsections": []}, {"section_title": "2014", "paragraphs": ["Kageyama, Yuri and Richard Lardner. \"Documents Reveal Chaotic Military Sex-Abuse Record,\" Associated Press, February 10, 2014, at http://www.military.com/daily-news/2014/02/10/documents-reveal-chaotic-military-sex-abuse-record.html", "Montgomery, Nancy. \"AF Program Rare Bright Spot in Sex Assault Fight,\" Stars and Stripes , February 27, 2014, at http://www.military.com/daily-news/2014/02/27/air-force-program-rare-bright-spot-in-sex-assault-fight.html", "Cox, Matthew. \"Alcohol Policies Reviewed as Sex Assault Rises,\" Military.com, May 1, 2014, at http://www.military.com/daily-news/2014/05/01/alcohol-policies-reviewed-as-sex-assault-rises.html", "Burns, Robert. \"Army Knocks 2-Star Down to 1-Star Rank,\" Associated Press, August 27, 2014, at http://www.military.com/daily-news/2014/08/27/army-knocks-2-star-down-to-1-star-rank.html", "Milham, Matt. \"Army: It's Good News That Sexual Assault Reports Are Up,\" Stars and Stripes , September 26, 2014, at http://www.military.com/daily-news/2014/09/26/army-its-good-news-that-sexual-assault-reports-are-up.html", "Draper, Robert. The Military's Rough Justice on Sexual Assault,\" New York Times , November 26, 2014, at https://www.nytimes.com/2014/11/30/magazine/the-militarys-rough-justice-on-sexual-assault.html", "Sisk, Richard. \"Sexual Assault Reports Increase 8%, Pentagon Cites Progress,\" Military.com, December 4, 2014, at http://www.military.com/daily-news/2014/12/04/sexual-assault-reports-increase-8-pentagon-cites-progress.html", "Baldor, Lolita C. \"Male Military Sex Assault Victims Slow to Complain,\" Associated Press, December 9, 2014, at http://www.military.com/daily-news/2014/12/09/male-military-sex-assault-victims-slow-to-complain.html"], "subsections": []}, {"section_title": "2015", "paragraphs": ["Roulo, Claudette. \"Sexual Assault Rates Decrease at Military Service Academies,\" DOD News, Defense Media Activity, February 11, 2015, at http://archive.defense.gov/news/newsarticle.aspx?id=128158 ", "Pellerin, Cheryl. \"DOD Honors Sexual Assault Response Coordinators,\" DOD News, April 23, 2015, at https://www.defense.gov/News/Article/Article/604510/ ", "Rowe, Major Derek. \"General courts-martial for sexual assault: How do they work?\" Air Force News , April 28, 2015, at http://www.af.mil/News/Commentaries/Display/Article/586763/general-courts-martial-for-sexual-assault-how-do-they-work/ ", "Sisk, Richard. \"Military Sexual Assault Reports Increased 11 Percent Last Year,\" Military.com, May 1, 2015, at http://www.military.com/daily-news/2015/05/01/military-sexual-assault-reports-increased-11-percent-last-year.html ", "Johnson, Lieutenant General Michelle D., U.S. Air Force Academy superintendent; Vice Admiral Walter E. \"Ted\" Carter Jr., superintendent, U.S. Naval Academy; Lieutenant General Robert L. Caslen, superintendent, U.S. Military Academy; Rear Admiral James A. Helis, superintendent, U.S. Merchant Marine Academy; Rear Admiral Sandra L. Stosz, superintendent, U.S. Coast Guard Academy. \"Lessons to Share: The five superintendents of federal service academies discuss how their institutions -- which faced scrutiny over sexual assault before many other colleges attracted such attention -- have responded to the issue,\" Inside Higher Ed, May 7, 2015, at https://www.insidehighered.com/views/2015/05/07/essay-how-federal-service-academics-prevent-and-punish-sexual-assault ", "Tilghman, Andrew. \"Military sexual assault claims: 1 in 20 lead to jail time,\" Military Times, May 13, 2015, at https://www.militarytimes.com/2015/05/13/military-sexual-assault-claims-1-in-20-lead-to-jail-time/ ", "Schogol, Jeff. \"Defense seeks dismissal of sexual assault case transferred to Washington,\" Air Force Times, October 17, 2015, at https://www.airforcetimes.com/news/your-air-force/2015/10/17/defense-seeks-dismissal-of-sexual-assault-case-transferred-to-washington/ ", "Whitlock, Craig. \"In the war against sexual assault, the Army keeps shooting itself in the foot,\" Washington Post, December 19, 2015, at https://www.washingtonpost.com/news/checkpoint/wp/2015/12/19/in-the-war-against-sexual-assault-the-army-keeps-shooting-itself-in-the-foot/?utm_term=.d856136e939b ", "Defense Media Activity. \"Defense Department Proposes UCMJ Changes,\" DOD News, December 28, 2015, at https://www.defense.gov/News/Article/Article/638108/defense-department-proposes-ucmj-changes/ ", "Losey, Stephen. \"USAF launches new strategy to curb sexual assault,\" Air Force Times, December 30, 2015, at https://www.airforcetimes.com/news/your-air-force/2015/12/30/usaf-launches-new-strategy-to-curb-sexual-assault/ "], "subsections": []}, {"section_title": "2016", "paragraphs": ["Kime, Patricia. \"Sexual assault reporting rises at U.S. service academies,\" Military Times , January 8, 2016, at https://www.militarytimes.com/news/your-military/2016/01/08/sexual-assault-reporting-rises-at-u-s-service-academies/ ", "Larter, David B. \"Navy sex assault victims may be eligible for early separation,\" Navy Times, January 20, 2016, at https://www.navytimes.com/news/your-navy/2016/01/20/navy-sex-assault-victims-may-be-eligible-for-early-separation/ ", "Cox, John Woodrow. \"Why sex assault reports have spiked at the Naval Academy, West Point and the Air Force Academy, Washington Post , March 11, 2016, at https://www.washingtonpost.com/news/checkpoint/wp/2016/03/11/why-sex-assault-reports-have-spiked-at-the-naval-academy-west-point-and-the-air-force-academy/?utm_term=.a5e15f2f16f1 ", "Whitlock, Craig, Thomas Gibbons-Neff. \"Military bringing more charges against of\ufb01cers for sexual assault,\" Washington Post, March 20, 2016, at https://www.stripes.com/news/us/military-bringing-more-charges-against-of%EF%AC%81cers-for-sexual-assault-1.400140#.WeTFNOFRXUc ", "Lardner, Richard. \"Pentagon misled lawmakers on military sexual assault cases,\" Associated Press , April 18, 2016, at https://apnews.com/23aed8a571f64a9d9c81271f0c6ae2fa/pentagon-misled-lawmakers-military-sexual-assault-cases ", "Kheel, Rebecca. \"Senators ask Obama to investigate whether Pentagon misled Congress,\" The Hill, April 19, 2016, at http://thehill.com/policy/defense/276832-senators-ask-obama-to-investigate-pentagons-sexual-assault-comments ", "Secretary of the Air Force Public Affairs. \"Air Force report on sexual assault highlights program's progress,\" Air Force News , May 05, 2016, at http://www.af.mil/News/Article-Display/Article/752653/air-force-report-on-sexual-assault-highlights-programs-progress/ ", "Tilghman, Andrew. \"Military sex assault: Just 4 percent of complaints result in convictions,\" Military Times , May 5, 2016, at https://www.militarytimes.com/veterans/2016/05/05/military-sex-assault-just-4-percent-of-complaints-result-in-convictions/ ", "Montgomery, Nancy. \"US Military Court Addresses 'Incapable of Consent' to Sex Issue,\" Stars and Stripes , May 18, 2016, at http://www.military.com/daily-news/2016/05/18/us-military-court-addresses-incapable-of-consent-to-sex-issue.html ", "Losey, Stephen. \"Military must do right by wrongly-discharged sexual assault victims, advocates say,\" Air Force Times , May 19, 2016, at https://www.airforcetimes.com/news/your-air-force/2016/05/19/military-must-do-right-by-wrongly-discharged-sexual-assault-victims-advocates-say/ ", "Lyle, Amaani. \"DoD Safe Helpline Offers Specialized Support to Sexual Assault Victims,\" DOD News, July 15, 2016, at https://dod.defense.gov/News/Article/Article/841166/dod-safe-helpline-offers-specialized-support-to-sexual-assault-victims/ ", "Rein, Lisa. \"Merchant Marine Academy under fire for sexual assault allegations,\" Stars and Stripes, August 12, 2016, at https://www.stripes.com/news/us/merchant-marine-academy-under-fire-for-sexual-assault-allegations-1.423595 ", "Lyle, Amaani. \"DoD Unveils Plan to Broaden Sexual Assault Support to Men,\" DOD News, Defense Media Activity, December 15, 2016, at https://www.defense.gov/News/Article/Article/1030795/dod-unveils-plan-to-broaden-sexual-assault-support-to-men/ "], "subsections": []}]}, {"section_title": "Scholarly Journals, Reports and Studies (non-government)", "paragraphs": ["The following sources are listed in alphabetical order by author.", "Burgess, Ann W., Donna M. Slattery, and Patricia A. Herlihy. \"Military Sexual Trauma: A Silent Syndrome.\" Journal of Psychosocial Nursing & Mental Health Services 51, no. 2 (2013): 20-6. ", "D'Ambrosio-Woodward, Tricia. \"Military Sexual Assault: A Comparative Legal Analysis of the 2012 Department of Defense Report on Sexual Assault in the Military: What It Tells Us, What It Doesn't Tell Us, and How Inconsistent Statistic Gathering Inhibits Winning the 'Invisible War.'\" Wisconsin Journal of Law, Gender & Society 29, no. 2 (2014): 173-211.", "Farris, Coreen, Terry L. Schell and Terri Tanielian. Physical and Psychological Health Following Military Sexual Assault: Recommendations for Care, Research, and Policy . Santa Monica, CA: RAND Corporation, 2013. http://www.rand.org/pubs/occasional_papers/OP382", "Firestone, Juanita M., J. M. Miller, and Richard Harris. \"Implications for Criminal Justice from the 2002 and 2006 Department of Defense Gender Relations and Sexual Harassment Surveys.\" American Journal of Criminal Justice : AJCJ 37, no. 3 (2012): 432-451. ", "Gibson, Carolyn J., Kristen E. Gray, Jodie G. Katon, Tracy L. Simpson, and Keren Lehavot. \"Sexual Assault, Sexual Harassment, and Physical Victimization during Military Service across Age Cohorts of Women Veterans.\" Women's Health Issues 26, no. 2 (2016): 225-231. ", "Harrell, Margaret C., Laura Werber, Marisa Adelson, Sarah J. Gaillot, Charlotte Lynch and Amanda Pomeroy. A Compendium of Sexual Assault Research . Santa Monica, CA: RAND Corporation, 2009. http://www.rand.org/pubs/technical_reports/TR617", "Holland, Kathryn, Rabelo, Ver\u00f3nica, and Cortina, Lilia. Sexual Assault Training in the Military: Evaluating Efforts to End the 'Invisible War.' American Journal of Community Psychology 54, no. 3/4 (2014): 289-303. ", "Morral, Andrew R., Kristie Gore, and Terry L. Schell. Sexual Assault and Sexual Harassment in the U.S. Military, Volume 1. Design of the 2014 RAND Military Workplace Study . Santa Monica, CA: RAND Corporation, National Defense Research Institute, 2014. https://www.rand.org/pubs/research_briefs/RB9841.html ", "Morral, Andrew R., Kristie Gore, and Terry L. Schell. Sexual Assault and Sexual Harassment in the U.S. military: Volume 2. Estimates for Department of Defense Service members from the 2014 RAND Military Workplace Study . Santa Monica, CA: RAND Corporation, National Defense Research Institute, 2015. https://www.rand.org/pubs/research_reports/RR870z2-1.html ", "O'Brien, Carol, Jessica Keith, and Lisa Shoemaker. \"Don't Tell: Military Culture and Male Rape.\" Psychological Services 12, no. 4 (2015): 357-365. ", "Stander, Valeria A. and Cynthia J. Thomsen. \"Sexual Harassment and Assault in the U.S. Military: A Review of Policy and Research Trends.\" AMSUS Military Medicine (Association of Military Surgeons of the United States) 181, no. 1S (2016): 20-27. "], "subsections": []}, {"section_title": "House and Senate Hearings", "paragraphs": ["This chronological list of hearings was compiled from Congress.gov and CQ.com.", "U.S. Congress, House Armed Services Committee, A Review of Sexual Misconduct by Basic Training Instructors at Lackland Air Force Base , 113 th Cong., 1 st sess., January 23, 2013, H.A.S.C. No. 113-2 (Washington, DC: GPO, 2013). ", "U.S. Congress, House Appropriations Committee, Subcommittee on Defense, Department of Defense Appropriations for 2014 , Part 1, 113th Cong., 1 st sess., February 26, 2013 (Washington, DC: GPO, 2013). ", "U.S. Congress, Senate Armed Services Committee, Subcommittee on Personnel, Testimony on Sexual Assault in the Military, 113 th Cong., 1 st sess., March 13, 2013, S. Hrg. 113-303 (Washington, DC: GPO, 2013). ", "U.S. Congress, Senate Appropriations Committee, Subcommittee on Defense, Department of Defense Appropriations for Fiscal Year 2014 , 113th Cong., 1 st sess., April 17, 2013 (Washington, DC: GPO, 2013). ", "U.S. Congress, House Appropriations Committee, Subcommittee on Defense, Department of Defense Appropriations for 2014, Part 2 , 113th Cong., 1 st sess., April 24, 2013 (Washington, DC: GPO, 2013). ", "U.S. Congress, Senate Appropriations Committee, Subcommittee on Defense, Department of Defense Appropriations for Fiscal Year 2014 , 113th Cong., 1 st sess., April 24, 2013 (Washington, DC: GPO, 2013). ", "U.S. Congress, House Appropriations Committee, Subcommittee on Defense, President Obama's Fiscal 2014 Budget Proposal for the U.S. Navy and Marine Corps , 113 th Cong., 1 st sess., May 7, 2013 (Washington, DC: GPO, 2013). ", "U.S. Congress, Senate Armed Services Committee, D epartment of Defense Authorization for Appropriations for Fiscal Year 2014 and the Future Years Defense Program , 113 th Cong., 1 st sess., May 7, 2013 (Washington, DC: GPO, 2013). ", "U.S. Congress, House Appropriations Committee, Subcommittee on Defense, President Obama's Fiscal 2014 Budget Proposal for the U.S. Army , 113 th Cong., 1 st sess., May 8, 2013. (Washington, DC: GPO, 2013). ", "U.S. Congress, Senate Appropriations Committee, Subcommittee on Defense, President Obama's Fiscal 2014 Budget Proposal for the U.S. Air Force , 113 th Cong., 1 st sess., May 8, 2013 (Washington, DC: GPO, 2013). ", "U.S. Congress, House Appropriations Committee, Subcommittee on Defense, President Obama's Fiscal 2014 Budget Proposal for the U.S. Air Force , 113 th Cong., 1 st sess., May 9, 2013 (Washington, DC: GPO, 2013). ", "U.S. Congress, Senate Appropriations Committee, Subcommittee on Defense, Department of Defense Appropriations for Fiscal Year 2014 , 113th Cong., 1 st sess., May 22, 2013 (Washington, DC: GPO, 2013). ", "U.S. Congress, Senate Armed Services Committee, Pending Legislation Regarding Sexual Assaults in the Military , 113 th Cong., 1 st sess., June 4, 2013, S. Hrg. 113\u2013320 (Washington, DC: GPO, 2013).", "U.S. Congress, Senate Armed Services Committee, Subcommittee on Personnel, Markup of the National Defense Authorization Act for Fiscal Year 2014 , 113 th Cong., 1 st sess., June 11, 2013 (Washington, DC: GPO, 2013).", "U.S. Congress, Senate Appropriations Committee, Subcommittee on Defense, Department of Defense Appropriations for Fiscal Year 2014 , 113th Cong., 1 st sess., June 11, 2013 (Washington, DC: GPO, 2013).", "U.S. Congress, House Armed Services Committee, Subcommittee on Military Personnel, Women in Service Review s , 113 th Cong., 1 st sess., July 24, 2013, H.A.S.C. No. 113\u201350 (Washington, DC: GPO, 2013).", "U.S. Congress , Senate Armed Services Committee, Subcommittee on Personnel, The Relationships Between Military Sexual Assault, Post-Traumatic Stress Disorder and Suicide, and on Department of Defense and Department of Veterans Affairs Medical Treatment and Management of Victims of Sexual Trauma , 113 th Cong., 2 nd sess., February 26, 2014, S. Hrg. 113-480 (Washington, DC: GPO, 2013) .", "U.S. Congress, Armed Services Committee , Fiscal Year 2015 National Defense Authorization Budget Request from the Department of Defense , 113 th Cong., 2 nd sess., March 6 , 2014 (Washington, DC: GPO, 2014).", "U.S. Congress, House Armed Services Committee, Fiscal Year 2015 National Defense Authorization Budget Request from the Department of the Navy , 113 th Cong., 2 nd sess., March 12 , 2014 (Washington, DC: GPO, 2014).", "U.S. Congress, House Appropriations Committee, Subcommittee on Defense, Department of Defense Appropriations for 2015, Part 1 , 113 th Cong., 2 nd sess., March 13, 2014 (Washington, DC: GPO, 2014).", "U.S. Congress, House Armed Services Committee , Fiscal Year 2015 National Defense Authorization Budget Request from the Department of the Air Force , 113 th Cong ., 2 nd sess., March 14, 2014 (Washington, DC: GPO, 2014).", "U.S. Congress, House Armed Services Committee , Fiscal Year 2015 National Defense Authorization Budget Request from the Department of the Army , 113 th Cong., 2 nd sess., March 25 , 2014 (Washington, DC: GPO, 2014).", "U.S. Congress, Senate Appropriations Committee, Subcommittee on Defense , Department of Defense Appropriations for 2015 , 113th Cong., 2 nd sess., March 26 , 2014 (Washington, DC: GPO, 2014).", "U.S. Congress, House Appropriations Committee, Subcommittee , Department of Defense Appropriations for 2015 , Part 2, 113 th Cong., 2 nd sess., April 2, 2014, (Washington, DC: GPO, 2014).", "U.S. Congress, Senate Appropriations Committee, Subcommittee on Defense , Department of Defense Appropriations for 2015 , 113th Cong., 2 nd sess., April 2 , 2014 (Washington, DC: GPO, 2014).", "U.S. Congress, House Armed Services Committee , National Defense Priorities from the Members for the Fiscal Year 2015 National Defense Authorization Act , 113 th Cong ., 2 nd sess., April 9 , 2014 (Washington, DC: GPO, 2014).", "U.S. Congress, Senate Appropriations Committee, Subcommittee on Defense, Department of Defense Appropriations for Fiscal Year 2015 , 113th Cong., 2 nd sess., April 9, 2014 (Washington, DC: GPO, 2014). ", "U.S. Congress, Senate Appropriations Committee, Subcommittee on Defense, Department of Defense Appropriations for Fiscal Year 2015 , 113th Cong., 2 nd sess., April 30, 2014 (Washington, DC: GPO, 2014). ", "U.S. Congress, Senate Appropriations Committee, Subcommittee on Defense , Department of Defense Appropriations for 2015 , 113th Cong., 2 nd sess., June 18 , 2014 (Washington, DC: GPO, 2014)."], "subsections": [{"section_title": "114th Congress", "paragraphs": ["U.S. Congress, Senate Armed Services Committee , Department of Defense Authorization for Appropriations for Fiscal Year 2016 and the Future Years Defense Program , Part 1 , 114th Cong., 1 st sess., March 3 , 10 , 12 , 18 , 19, 26, April 4, 30 , 2015 (Washington, DC: GPO, 2015).", "U.S. Congress, Senate Armed Services , Department of Defense Authorization for Appropriations for Fiscal Year 2016 and the Future Years Defense Program , Part 7 Strategic Forces, 114 th Cong., 1 st sess., March 4, 25, April 15, 22, 29 , 2015 (Washington, DC: GPO, 2015).", "U.S. Congress, Senate Armed Services Committee, Department of Defense Authorization for Appropriations for Fiscal Year 2016 and the Future Years Defense Program , Part 3 Readiness and Management Support, 114 th Cong., 1 st sess., March 11, 25, April 22, 2015 (Washington, DC: GPO, 2015).", "U.S. Congress, Senate Armed Services Committee, The Current State of Readiness of U.S. Forces in Review of the Defense Authorization Request for Fiscal Year 2016 and the Future Years Defense Program , 114 th Cong., 1 st sess., March 25, 2015 (Washington, DC: GPO, 2015).", "U.S. Congress, Senate Armed Services Committee, Department of Defense Authorization for Appropriations for Fiscal Year 2017 and the Future Years Defense Program , Part 1 , 114 th Cong., 2 nd sess., February 11, 23, March 3, 10, 15, 17, April 5, 7, 26, 2016 (Washington, DC: GPO, 2016).", "U.S. Congress, House Armed Services Committee, The Fiscal Year 2017 Na tional Defense Authorization Budget Request from the Department of Defense , 114 th Cong., 2 nd sess., March 22, 2016 (Washington, DC: GPO, 2016).", "U.S. Congress, Senate Armed Services Committee, Subcommittee on Strategic Forces, The Current State of Research, Diagnosis, and Treatment for Post-Traumatic Stress Disorder and Traumatic Brain Injury , 114 th Cong., 2 nd sess., April 20, 2016 (Washington, DC: GPO, 2016)."], "subsections": []}]}, {"section_title": "House and Senate Reports", "paragraphs": [], "subsections": [{"section_title": "113th Congress", "paragraphs": ["U.S. Congress, House Committee on Armed Services, National Defense Authorization Act for Fiscal Year 2014 on H.R.1960 with Additional and Dissenting Views, 113 th Cong., 1 st sess., H. Rept. 113-102 (Washington, DC: GPO, 2013).", "U.S. Congress, House Committee on Appropriations, Department of Defense Appropriations Bill, 2014 to Accompany H.R. 2397 together with Additional Views, 113 th Cong., 1 st sess., H. Rept. 113-113 (Washington, DC: GPO, 2013).", "U.S. Congress, Senate Committee on Armed Services, National Defense Authorization Act for Fiscal Year 2014 to accompany S. 1197, 113 th Cong., 1 st sess., S. Rept. 113-44 (Washington, DC: GPO, 2013).", "U.S. Congress, Senate Committee on Appropriations, Department of Defense Appropriations Bill, 2014 to accompany S.1429, 113 th Cong., 1 st sess., S. Rept. 113-85 (Washington, DC: GPO, 2013).", "U.S. Congress, House Committee on Armed Services, First Annual Report on the Activities of the Committee on Armed Services for the One Hundred Thirteenth Congress , 113 th Cong., 1 st sess., H. Rept. 113-309 (Washington, DC: GPO, 2013).", "U.S. Congress, House Committee on Armed Services, Howard P. \"Buck\" McKeon National Defense Authorization Act for Fiscal Year 2015 to accompany H.R.4435, 113 th Cong, 2 nd sess., H. Rept. 113-446 (Washington, DC: GPO, 2014).", "U.S. Congress, House Committee on Armed Services, Howard P. \"Buck\" McKeon National Defense Authorization Act for Fiscal Year 2015 supplemental report to accompany H.R.4435, 113 th Cong. 2 nd sess., H. Rept. 113-446 part 2 (Washington, DC: GPO, 2014).", "U.S. Congress, Senate Committee on Armed Services, Carl Levin National Defense Authorization Act for Fiscal Year 2015 to accompany S.2410, 113 th Cong, 2 nd sess., S. Rept. 113-176 (Washington, DC: GPO, 2014).", "U.S. Congress, House Committee on Appropriations, Department of Defense Appropriations Bill, 2015 to accompany H.R.4870, 113 th Cong., 2 nd sess., H. Rept. 113-473 (Washington, DC: GPO, 2014).", "U.S. Congress, Senate Committee on Appropriations, Department of Defense Appropriations Bill, 2015 to accompany H.R.4870, 113 th Cong., 2 nd sess., S. Rept. 113-211 (Washington, DC: GPO, 2014)."], "subsections": []}, {"section_title": "114th Congress", "paragraphs": ["U.S. Congress, House Committee on Armed Service, National Defense Authorization Act for Fiscal Year 2016 to accompany H.R.1735, 114 th Cong., 1 st sess., H. Rept. 114-102 (Washington, DC: GPO, 2015).", "U.S. Congress, Senate Committee on Armed Services, National Defense Authorization Act for Fiscal Year 2016 to accompany S.1376, 114 th Cong., 1 st sess., S. Rept. 114-49 (Washington, DC: GPO, 2015).", "U.S. Congress, House Committee on Appropriations, Department of Defense Appropriations Bill, 2016 to accompany H.R.2685, 114 th Cong., 1 st sess., H. Rept. 114-139 (Washington, DC: GPO, 2015).", "U.S. Congress, Senate Committee on Appropriations, Department of Defense Appropriations Bill, 2016 to accompany S.1558, 114 th Cong., 1 st sess., S. Rept. 114-63 (Washington, DC: GPO, 2015).", "U.S. Congress, House Conference Report, National Defense Authorization Act for Fiscal Year 2016 to accompany H.R.1735, 114 th Cong., 1 st sess., H. Rept. 114-270 (Washington, DC: GPO, 2015).", "U.S. Congress, House Committee on Armed Services, National Defense Authorization Act for Fiscal Year 2017 on H.R.4909, 114 th Cong., 2 nd sess., H. Rept. 114-537 (Washington, DC: GPO, 2016).", "U.S. Congress, Committee on Armed Services, National Defense Authorization Act for Fiscal Year 2017 to accompany S.2943, 114 th Cong, 2 nd sess., S. Rept. 114-255 (Washington, DC: GPO, 2016).", "U.S. Congress, House Committee on Appropriations, Department of Defense Appropriations Bill, 2017 to accompany H.R.5293, 114 th Cong., 2 nd sess., H. Rept. 114-577 (Washington, DC: GPO, 2016).", "U.S. Congress, Senate Committee on Appropriations, Department of Defense Appropriations Bill, 2017 to accompany S.3000, 114 th Cong., 2 nd sess., S. Rept. 114-263 (Washington, DC: GPO, 2016).", "U.S. Congress, House Conference Report, National Defense Authorization Act for Fiscal Year 2017 to accompany S. 2943, 114 th Cong, 2 nd sess., H. Rept. 114-840 (Washington, DC: GPO, 2016)."], "subsections": []}]}]}]}]}}
{"id": "R44585", "title": "Evolution of the Meaning of \u201cWaters of the United States\u201d in the Clean Water Act", "released_date": "2019-03-05T00:00:00", "summary": ["For more than forty-five years, all three branches of government have struggled with how to interpret the meaning of \"waters of the United States\" in the Clean Water Act. In a shift from early water pollution legislation, the 1972 amendments to the Federal Water Pollution Control Act, which came to be known as the Clean Water Act, eliminated the requirement that federally regulated waters must be capable of being used by vessels in interstate commerce. Rather than use traditional navigability tests, the 1972 amendments redefined \"navigable waters\" for purposes of the Clean Water Act's jurisdiction to include \"the waters of the United States, including the territorial seas.\" Disputes over the proper meaning of that phrase have been ongoing since that change.", "Federal authority to regulate waters within the United States primarily derives from the Commerce Clause, and accordingly, federal laws and regulations concerning waters of the United States cannot cover matters which exceed that constitutional source of authority. During the first two decades after the passage of the Clean Water Act, courts generally interpreted the act as having a wide jurisdictional reach. In recent decades, however, the Supreme Court has emphasized that \"the grant of authority to Congress under the Commerce Clause, though broad, is not unlimited.\" This modern Commerce Clause jurisprudence has informed federal courts' approach to interpreting which \"waters\" are subject to the Clean Water Act. At the same time, the Supreme Court has not always provided clear rules for determining whether a particular waterbody is a water of the United States. In its most recent case on the issue, Rapanos v. United States, the High Court issued a fractured 4-1-4 decision with no majority opinion providing a rationale for how to evaluate jurisdictional disputes.", "Some courts and commentators disagree on how the scope of federal jurisdictional waters changed over time as a result of interpretative approaches taken by the agencies responsible for administering the Clean Water Act\u2014the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps). This debate resurfaced during the Obama Administration when the Corps and EPA issued a rule, known as the Clean Water Rule, which substantially redefined \"waters of the United States\" in the agencies' regulations for the first time in more than two decades. While some argued that the Clean Water Rule constituted a large-scale expansion of federal jurisdiction, others asserted that the agencies construed the term in a narrower fashion than in prior regulations.", "A vocal critic of the Clean Water Rule, President Trump shifted the executive branch's policy toward the meaning of \"waters of the United States.\" In February 2017, President Trump issued an executive order directing EPA and the Corps to review and revise or rescind the Clean Water Rule. The agencies currently are in the process of carrying out the executive order, and they unveiled proposed regulations redefining \"waters of the United States\" in December 2018. As in nearly all prior attempts to define this phrase, observers disagree on whether the latest proposed definition correctly calibrates the scope of federal jurisdiction to regulate water pollution."], "reports": {"section_title": "", "paragraphs": ["F or more than forty-five years, all three branches of government have struggled with how to interpret the meaning of \"waters of the United States\" in the Clean Water Act. In 1972, Congress eliminated the requirement that waters must be navigable in the traditional sense \u2014meaning they are capable of being used by vessels in interstate commerce\u2014in order to be subject to federal water pollution regulation. Rather than use traditional tests of navigability, the 1972 amendments to the Federal Water Pollution Control Act, which came to be known as the Clean Water Act, redefined \"navigable waters\" to include \"the waters of the United States, including the territorial seas.\" Disputes over the meaning of that phrase have been ongoing ever since the change.", "Some courts and commentators disagree on how the scope of federal jurisdictional waters changed over time as a result of interpretative approaches taken by the agencies responsible for administering the Clean Water Act\u2014the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps). This debate resurfaced during the Obama Administration when the Corps and EPA issued a rule, known as the Clean Water Rule, which substantially redefined \"waters of the United States\" in the agencies' regulations for the first time in more than two decades. While some argued that the Clean Water Rule constituted a major expansion of federal jurisdiction, others asserted that the agencies construed the term in a narrower fashion than in prior regulations. ", "A vocal critic of the Clean Water Rule, President Trump shifted the executive branch's policy toward the meaning of \"waters of the United States.\" In February 2017, President Trump issued an executive order directing EPA and the Corps to review and revise or rescind the Clean Water Rule. The agencies currently are in the process of carrying out the executive order, and they unveiled proposed regulations redefining \"waters of the United States\" in December 2018. As in nearly all prior attempts to define this phrase, however, observers disagree on whether the latest proposed definition correctly calibrates the scope of federal water pollution regulation. This report provides context for this debate by examining the history of major changes to the meaning of \"waters of the United States\" as expressed in federal regulations, legislation, agency guidance, and case law."], "subsections": [{"section_title": "Background", "paragraphs": ["The Clean Water Act is the principal law governing pollution of the nation's surface waters. Among other requirements, the act prohibits the unauthorized discharge of pollutants into \"navigable waters,\" and requires persons wishing to discharge dredged or fill material into \"navigable waters\" to obtain a permit from the Corps. In its definition section, the act defines the term \"navigable waters\" to mean \"waters of the United States, including its territorial seas.\" This single, jurisdiction-defining phrase applies to the entire law, including the national pollutant discharge elimination system (NPDES) permit program; permit requirements for disposal of dredged or fill material, known as the Section 404 program; water quality standards and measures to attain them; oil spill liability and prevention; and enforcement.", "The Clean Water Act itself does not expand further on the meaning of \"waters of the United States.\" Instead, the Corps and EPA have expounded on this phrase through agency guidance and regulations, which federal courts have struck down on various occasions as failing to satisfy statutory or constitutional requirements. ", "Federal authority to regulate waters within the United States primarily derives from the Commerce Clause, which gives Congress the power to \"regulate commerce with foreign nations, and among the several states . . . .\" Accordingly, federal laws and regulations regulating waters of the United States cannot cover matters that exceed that constitutional source of authority. Legal challenges to the Corps' and EPA's interpretation of \"waters of the United States\"\u2014particularly those which were successful\u2014often followed broader trends in interpreting the Commerce Clause. For a period after its enactment in 1972, courts generally interpreted the Clean Water Act as having a wide jurisdictional reach, but, in recent decades, the Supreme Court has emphasized that \"the grant of authority to Congress under the Commerce Clause, though broad, is not unlimited.\"", "A time line of events in the evolution of the definition of \"waters of the United States\" is provided in the Appendix , and major events are shown in Figure 1 ."], "subsections": []}, {"section_title": "Early History of Jurisdictional Waters", "paragraphs": ["Historically, federal laws regulating waterways, such as the Rivers and Harbors Appropriations Act of 1899 (Rivers and Harbors Act), exercised jurisdiction over \"navigable water[s] of the United States[.]\" The Supreme Court interpreted this phrase to govern only waters that were \"navigable-in-fact\"\u2014meaning that they were \"used, or are susceptible of being used, . . . as highways for commerce, over which trade and travel are or may be conducted in the customary modes of trade and travel on water.\"", "Beginning with the Federal Water Pollution Control Act of 1948, Congress began to use a different jurisdiction-defining phrase to regulate pollution of \"interstate waters,\" which it defined as \"all rivers, lakes, and other waters that flow across, or form a part of, a State's boundaries.\" Congress amended that legislation in 1961 to expand federal jurisdiction from \"interstate waters\" to \"interstate or navigable waters[.]\"", "The Federal Water Pollution Control Act Amendments of 1972, which came to be known as the Clean Water Act, again amended the jurisdictional reach of federal water pollution legislation. There, Congress exercised jurisdiction over \"navigable waters,\" but provided a new definition of that phrase, stating: \"The term 'navigable waters' means the waters of the United States, including the territorial seas.\" This subtle definitional change proved to have tremendous consequences for the jurisdictional scope of the Clean Water Act.", "In debating the 1972 amendments that created the Clean Water Act, some Members of Congress explained that they intended the revised definition to expand the law's jurisdiction beyond traditionally navigable or interstate waters. The conference report states that the \"conferees fully intend that the term 'navigable waters' be given the broadest possible constitutional interpretation unencumbered by agency determinations which have been made or may be made for administrative purposes.\" And during debate in the House on approving the conference report, one Representative explained that the definition \"clearly encompasses all water bodies, including streams and their tributaries, for water quality purposes.\" Courts have frequently referred to the act's legislative history when interpreting its jurisdictional reach, but they have not always agreed on the import of this history. "], "subsections": []}, {"section_title": "Differing Agency Definitions Following the Clean Water Act", "paragraphs": ["The Corps and EPA share responsibility for administering the Clean Water Act. Both agencies have administrative responsibilities under Section 404 of the act, and EPA administers most other Clean Water Act-related programs in partnership with U.S. states. Because of this shared jurisdiction, both agencies create regulations defining the waters subject to their regulatory jurisdiction. In the initial years following the enactment of the Clean Water Act, their respective definitions differed significantly."], "subsections": [{"section_title": "EPA's Initial Definitions", "paragraphs": ["In May 1973, EPA issued its first set of regulations implementing the Clean Water Act's NPDES permit program. There, EPA defined the term \"navigable waters\" to include six categories of waterbodies.", "Three months prior to issuing these regulations, EPA's general counsel had provided an opinion on the meaning of \"navigable waters\" in the Clean Water Act. The general counsel's recommended definition largely mirrored EPA's 1973 regulatory definition, but with one critical difference: categories four through six of the general counsel's recommendation would have included interstate lakes, rivers, and streams that are utilized for interstate activities rather than intrastate waters used for such activities. EPA's definition of \"navigable waters\" in its non-NPDES water pollution regulations at the time also differed in certain ways from its May 1973 definition. "], "subsections": []}, {"section_title": "The Corps' Initial Definition", "paragraphs": ["The Corps' early implementation of the Clean Water Act differed considerably from EPA's regulations. After initially proposing regulations that simply repeated the statutory definition of \"navigable waters,\" the Corps issued final regulations in April 1974 implementing Section 404 of the Clean Water Act. There, the Corps acknowledged the language from the conference report for the Clean Water Act as calling for the \"broadest possible constitutional interpretation\" of navigable waters, but concluded that the Constitution limited its jurisdiction to the same waters that it regulated under preexisting laws, such as the Rivers and Harbors Act. Based on this reasoning, the Corps defined \"navigable waters\" using language that generally limited its jurisdiction to waters that were navigable-in-fact."], "subsections": []}]}, {"section_title": "Callaway and its Aftermath", "paragraphs": ["Less than one year after the Corps published its first regulations defining jurisdictional waters, the United States District Court for the District of Columbia struck them down as too narrow and inconsistent with the Clean Water Act. In Natural Resources Defense Council v. Callaway , the court held that because \"Congress . . . asserted federal jurisdiction over the nation's waters to the maximum extent permissible under the Commerce Clause of the Constitution[,]\" the definition could not be limited to \"traditional tests of navigability[.]\" The court ordered the Corps to produce new regulations that acknowledged \"the full regulatory mandate\" of the Clean Water Act."], "subsections": [{"section_title": "The Corps' Expansion of Jurisdictional Waters Following Callaway", "paragraphs": ["The Corps responded to Callaway on May 6, 1975, by publishing proposed regulations that offered four alternative methods of redefining the Corps' jurisdiction under the 1972 amendments. ", "At the same time that it proposed these alternatives, the Corps published a press release stating that the holding of Callaway may require \"the rancher who wants to enlarge his stock pond, or the farmer who wants to deepen an irrigation ditch or plow a field, or the mountaineer who wants to protect his land against stream erosion\" to obtain federal permits. These events brought public and media attention to the breadth of jurisdiction under the Clean Water Act. They also created a disagreement between the Corps and EPA, and led to a series of subcommittee hearings in the House and Senate.", "In the aftermath of this public and congressional scrutiny, the Corps issued interim final regulations in 1975 in which it revised the definition of \"navigable waters\" for purposes of the Clean Water Act's Section 404 program by adopting much of the structure used in EPA's 1973 regulations. The Corps' definition also added \"wetlands, mudflats, swamps, marshes, and shallows\" that are \"contiguous or adjacent to other navigable waters\" and \"artificially created channels and canals used for recreational or other navigational purposes that are connected to other navigable waters\" to the definition of \"waters of the United States.\" Finally, the Corps' 1975 interim regulations permitted federal regulation over all other waters that a Corps' district engineer \"determines necessitate regulation for the protection of water quality\" based on the Corps' technical standards and evaluation criteria."], "subsections": []}, {"section_title": "The Corps' 1977 Regulations", "paragraphs": ["In 1977, the Corps issued final regulations reorganizing the definition of \"waters of the United States\" into five categories.", "The final category of the 1977 definition contained the Corps' most expansive definition of jurisdictional waters as of that time. A footnote to the Corps' regulations explained that the Category Five waters incorporate \"all other waters of the United States that could be regulated under the federal government's Constitutional powers to regulate and protect interstate commerce.\" The Corps would continue to use this Commerce Clause-focused provision (with revisions) until the Clean Water Rule was published in 2015, and EPA would later adopt it in its regulations."], "subsections": []}]}, {"section_title": "The Clean Water Act of 1977", "paragraphs": ["After the Corps' 1975 and 1977 regulations, some Members of Congress introduced bills that sought to limit the Clean Water Act's jurisdiction to traditional, navigable-in-fact waters, but the proposed limiting legislation never became law. Instead, Congress amended the Federal Water Pollution Control Act through the Clean Water Act of 1977, which did not alter the jurisdictional phrase \"waters of the United States.\"", "The original version of the Clean Water Act of 1977 introduced in the House would have limited the Corps' jurisdiction, and an amendment proposed in the Senate sought similar limitations. But the original Senate version, which generally retained the existing definition of \"navigable waters,\" was adopted in conference and passed into law. The Clean Water Act of 1977, as enacted, contained certain exemptions from Section 404 permitting for \"normal farming, silviculture, . . . ranching[,]\" and other activities."], "subsections": [{"section_title": "Synthesizing Definitions Following the Clean Water Act of 1977", "paragraphs": ["While the 1977 legislation appeared to resolve temporarily some congressional dispute over the reach of the Clean Water Act, disagreement arose between the Corps and EPA over which agency had final authority to determine which waters were subject to Section 404 permit requirements. EPA independently defined the jurisdictional reach of the Clean Water Act as it related to programs like NPDES and oil pollution prevention, but it incorporated the Corps' definition into its regulations related to Section 404 permits. At the same time, however, EPA separately expanded on that definition in an appendix to its Section 404 regulations.", "The U.S. Attorney General ultimately intervened in 1979 and provided a legal opinion that EPA has final administrative authority to determine the reach of the term \"navigable waters\" for purposes of Section 404. The Corps and EPA eventually executed a Memorandum of Agreement in 1989 resolving that EPA would act as the lead agency responsible for developing programmatic guidance and interpretation of the scope of jurisdictional waters, and the Corps would be responsible for most case-specific determinations on whether certain property was subject to Section 404.", "Although it took the agencies 10 years after the Attorney General's opinion to agree formally on a division of responsibilities, the Corps and EPA streamlined and harmonized the regulatory definition of \"waters of the United States\" well before that. In May 1980, EPA issued regulations redefining the term among its consolidated permit requirements, and the Corps adopted EPA's definition in interim regulations two years later . The Corps issued final regulations in 1986 that did not change the regulatory definition, and the two agencies continued to use this core definition (with modifications) until they published the Clean Water Rule in 2015 ."], "subsections": []}]}, {"section_title": "Changes in \"Waters of the United States\" in the 1980s", "paragraphs": [], "subsections": [{"section_title": "Riverside Bayview Homes", "paragraphs": ["The Supreme Court reviewed a legal challenge to the Corps' application of \"waters of the United States\" for the first time in 1985 in United States v. Riverside Bayview Homes, Inc . There, the Corps sought to enjoin a property owner from discharging fill material on his wetlands located one mile from the shore of Lake St. Clair in Michigan, a 468-square-mile, navigable-in-fact lake that forms part of the boundary between Michigan and Ontario, Canada. The Corps argued that, by defining \"waters of the United States\" to include wetlands that are \"adjacent to\" other jurisdictional waters, including navigable-in-fact waters like Lake St. Clair, its regulations required the landowner to obtain a Section 404 permit before discharging fill material.", "Before the case reached the Supreme Court, the Sixth Circuit concluded that it must construe the Corps' regulatory definition narrowly in order to avoid a potential violation of the Fifth Amendment prohibition on the taking of private property for public use without just compensation. Applying this method of interpretation, the Sixth Circuit construed the Corps' regulations so as not to include the wetlands at issue, and it avoided reaching a decision on whether the Corps' regulations were constitutional.", "The Supreme Court reversed. Although it acknowledged that on a \"purely linguistic level\" it may seem unreasonable to classify lands , wet or otherwise, as waters , the Supreme Court called such a plain language approach \"simplistic.\" Further, it rejected the lower courts' concerns over the constitutionality of the Corps' regulations as \"spurious.\" Instead of applying a narrow approach to avoid constitutional implications, the Court gave deference to the Corps' position, and concluded that because \"[w]ater moves in hydrological cycles\" rather than along \"artificial lines,\" it was reasonable for the Corps to conclude that \"adjacent wetlands are inseparably bound up with the 'waters' of the United States . . . .\" ", "The Court also cited legislative history from the passage of the Clean Water Act and the amendments in 1977\u2014in which the term \"adjacent wetlands\" was added to the statute \u2014as support for its conclusion that Congress intended for the Clean Water Act to have a broad jurisdictional reach which included the adjacent wetlands at issue. In concluding that adjacent wetlands could reasonably be covered, however, the Court also emphasized that it did not express any opinion on the Corps' authority to regulate discharges of fill material into wetlands that are not adjacent to bodies of open water."], "subsections": []}, {"section_title": "The Migratory Bird Rule and Other Adjustments to \"Waters of the United States\"", "paragraphs": ["Following Riverside Bayview Homes , the Corps and EPA engaged in rulemaking in which they interpreted the Clean Water Act to govern all waters which were used or may have been used by migratory birds crossing state lines. The agencies did not redefine \"waters of the United States\" through this interpretation, which came to be known as the Migratory Bird Rule, but instead stated that the Migratory Bird Rule was a \"clarification\" of the existing regulatory definition.", "The agencies also continued to adjust their interpretation of the definition of \"waters of the United States\" in the late 1980s by, among other things, excluding nontidal drainage and irrigation ditches, artificial lakes or ponds used for irrigation and stock watering, reflecting pools, and swimming pools. In 1993, the agencies jointly revised their regulations to exclude \"prior converted cropland\"\u2014areas that were previously drained and converted to agricultural use\u2014from jurisdictional waters."], "subsections": []}, {"section_title": "Competing Wetland Manuals and Congressional Intervention Through Appropriations", "paragraphs": ["In addition to disputes over the textual definition of \"waters of the United States,\" disagreement surrounding the technical standards used to delineate the physical boundaries of jurisdictional waters, particularly wetlands , arose in the late 1980s. The Corps issued the first wetlands delineation manual in 1987 (1987 Manual), but EPA published its own manual the following year which used an alternative technical analysis. Differences among these and other wetlands manuals led to the preparation of an interagency Federal Manual for Identifying and Delineating Jurisdictional Wetlands in January 1989 (Federal Manual).", "Some observers criticized aspects of the Federal Manual, including the methodology it employed for identifying and delineating jurisdictional waters. Some also argued that the Federal Manual improperly expanded the scope of federal regulations of wetlands. Disagreements ultimately led to congressional action in 1991 in the form of appropriations legislation that prohibited the Corps from using funds to identify jurisdictional waters using the Federal Manual. The following year, Congress mandated that the Corps use the 1987 Manual until a new manual was published after public notice and comment. The interagency group proposed revisions to the Federal Manual, which received over 100,000 comments, but that proposal was never finalized, and no interagency wetlands manual was created."], "subsections": []}]}, {"section_title": "Judicially Imposed Limitations Beginning in the Late 1990s", "paragraphs": ["In contrast to the agencies' attempt to align jurisdictional waters with what they interpreted to be the outer reaches of the Commerce Clause in the 1980s, a series of court cases beginning in the late 1990s caused the Corps and EPA to modify their interpretation of \"waters of the United States.\" For much of the 20th century, the Supreme Court broadly construed the Commerce Clause to give Congress discretion to regulate activities which \"affect\" interstate commerce, so long as its legislation was reasonably related to achieving its goals of regulating interstate commerce. In the 1995 case of United States v. Lopez , however, the Supreme Court struck down a federal statute for the first time in more than 50 years based purely on a finding that Congress exceeded its powers under the Commerce Clause.", "In Lopez , the Court held the Commerce Clause did not provide a constitutional basis for federal legislation criminalizing possession of a firearm in a school zone because the law neither regulated a commercial activity nor contained a requirement that the firearm possession be connected to interstate commerce. The Court revisited its prior Commerce Clause cases and sorted Congress's commerce power into three categories: (1) regulation of channels of commerce, (2) regulation of instrumentalities of commerce, and (3) regulation of economic activities which not only affect but \"substantially affect\" interstate commerce. Lopez set the backdrop for a series of major opinions limiting federal jurisdiction under the Clean Water Act."], "subsections": [{"section_title": "United States v. Wilson", "paragraphs": ["The United States Court of Appeals for the Fourth Circuit issued the first in the series of decisions limiting the jurisdictional reach of the Clean Water Act in 1997. Following a seven-week trial in United States v. Wilson , a jury convicted three defendants of violating Section 404 for knowingly discharging fill material into wetland property located approximately 10 miles from the Chesapeake Bay and 6 miles from the Potomac River in Maryland. On appeal to the Fourth Circuit, the defendants challenged their conviction on the grounds that the portion of the Corps' regulatory definition of \"waters of the United States\"\u2014which included all waters \"the use, degradation or destruction of which could affect interstate or foreign commerce\"\u2014exceeded the Corps' statutory authority in the Clea n Water Act and Congress's constitutional authority in the Commerce Clause.", "Relying in part on the holding in Lopez , the Fourth Circuit agreed with a portion of the defendants' arguments and ordered a new trial. The court reasoned that, under Lopez , the regulated conduct must \"substantially affect\" interstate commerce in order to invoke the Commerce Clause power. Because the Corps purported to regulate waters that \"could affect\" interstate commerce\u2014without regard to whether there was any actual effect, substantial or otherwise\u2014the Fourth Circuit concluded that the Corps exceeded its authority. Although the Fourth Circuit strongly suggested that the Corps' assertion of jurisdiction exceeded the constitutional grant of authority under the Commerce Clause, it ultimately invalidated the challenged portion of the regulations solely on the ground that it exceeded the congressional authorization under the Clean Water Act.", "As Wilson never reached the Supreme Court, it was only binding precedent in the Fourth Circuit, and the stricken language remained in the regulations of the Corps and EPA until the release of the 2015 Clean Water Rule."], "subsections": [{"section_title": "The Corps' 2000 Guidance in Response to Wilson", "paragraphs": ["Although the Corps did not modify its regulatory definition of \"waters of the United States\" in response to Wilson , it did publish guidance in March 2000 on the effect of the decision on its Section 404 jurisdiction. The Corps explained that, within the Fourth Circuit only , \"isolated waters\" must be shown to have an actual connection to interstate or foreign commerce. \"Isolated waters,\" in Clean Water Act parlance, are waters that are not navigable-in-fact, not interstate, not tributaries of the foregoing, and not hydrologically connected to such waters\u2014but whose use, degradation, or destruction could affect interstate commerce.", "The 2000 guidance also provided clarification on certain nontraditional waters that the Corps considered part of the \"waters of the United States.\" Jurisdictional waters, the Corps explained, included both intermittent streams , which have flowing water supplied by groundwater during certain times of the year, and ephemeral streams , which have flowing water only during and for a short period after precipitation events. The Corps also deemed drainage ditches constructed in jurisdictional waters to be subject to the Clean Water Act except when the drainage was so complete that it converted the entire area to dry land."], "subsections": []}]}, {"section_title": "SWANCC", "paragraphs": ["In 2001, the Supreme Court took up another challenge to the jurisdictional reach of the Clean Water Act in Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers ( SWANCC ), revisiting the issue for the first time since its 1995 decision in Riverside Bayview Homes . In SWANCC , the Court evaluated whether Clean Water Act jurisdiction extended to an abandoned sand and gravel pit which contained water that had become a habitat for migratory birds. Citing the legislative history of the 1972 amendments and the Clean Water Act of 1977, the Corps had argued that the Clean Water Act can extend to such isolated waters under the Migratory Bird Rule.", "In a 5-4 ruling, the Court rejected the Corps' position, and held that the Corps' assertion of jurisdiction over isolated waters based purely on their use by migratory birds exceeded its statutory authority. The SWANCC Court's conclusion was informed, in part, by Lopez and another landmark Commerce Clause decision issued five years later, United States v. Morrison , in which the Court held that Congress lacked constitutional authority under the Commerce Clause to enact portions of the Violence Against Women Act. In light of this jurisprudence, the SWANCC Court concluded that allowing the Corps to assert jurisdiction under the Migratory Bird Rule raised \"serious constitutional questions\" about the limits of Congress's authority and \"would result in significant impingement of States' traditional and primary power of land and water use.\" Rather than interpret the Clean Water Act in a way that would implicate these \"significant constitutional and federalism questions[,]\" the Court concluded that Congress's use of the phrase \"navigable waters\" in the Clean Water Act \"has at least the import of showing us what Congress had in mind for enacting the [act]: its traditional jurisdiction over waters that were or had been navigable in fact or which could reasonably be made so.\" Based on this reading, the Court concluded that Congress did not intend to invoke the outer limits of the Commerce Clause in the Clean Water Act, and the Corps could not rely on the Migratory Bird Rule as a basis for jurisdiction.", "In contrast to Riverside Bayview Homes , the SWANCC Court focused less on the legislative history of the Clean Water Act, and instead emphasized the Corps' original interpretation of the 1972 amendments in which it limited its jurisdiction to navigable-in-fact waters. Although the Riverside Bayview Homes Court found that classical \"navigability\" was of \"limited import\" in determining Clean Water Act jurisdiction, the SWANCC Court distinguished that case as focused on \"wetlands adjacent to navigable waters.\" The ponds which formed in the abandoned gravel pits in SWANCC were \" not adjacent to open water[,]\" and therefore lacked the requisite \"significant nexus\" to traditionally navigable waters necessary for jurisdiction under the Clean Water Act, the Court concluded.", "SWANCC did not go as far as the Fourth Circuit, however, in striking down an entire subsection of the definition of \"waters of the United States.\" It limited its holding to the Migratory Bird Rule, which the Corps described as an effort to \"clarify\" its regulatory definition. But while its direct holding was arguably narrow, SWANCC 's rationale was much broader and called into question whether the Corps and EPA could assert jurisdiction under the Clean Water Act over many wholly intrastate isolated waters. The relationship between SWANCC 's limited holding and the Court's broader rationale generated considerable litigation over the scope of the Clean Water Act."], "subsections": [{"section_title": "Agency Guidance in Response to SWANCC", "paragraphs": ["The general counsels for the Corps and EPA added their voices to the post- SWANCC debate in a joint memorandum issued on the last full day of the Clinton Administration, January 19, 2001. Combining the \"significant nexus\" language from SWANCC with the existing regulatory definition of \"waters of the United States,\" the agencies concluded that they could continue to exercise jurisdiction over isolated waters so long as the use, degradation, or destruction of those waters could affect other \"waters of the United States.\" The potential effect on or degradation on existing jurisdictional waters, the agencies reasoned, established the \"significant nexus\" mentioned in SWANCC .", "In January 2003, the Corps and EPA issued a notice of proposed rulemaking regarding how field staff should address jurisdictional issues in the Clean Water Act and which contained a revised joint memorandum on the effect of SWANCC . The agencies later abandoned that proposed rulemaking effort, leaving unanswered questions over federal jurisdiction over isolated waters after SWANCC . These uncertainties caused the Corps and EPA to shift their attention to alternative bases for jurisdiction in defining \"waters of the United States\"\u2014such as \"adjacent wetlands\"\u2014and set the stage for the Supreme Court's next encounter with a Clean Water Act jurisdictional dispute in Rapanos v. United States ."], "subsections": []}]}, {"section_title": "Rapanos", "paragraphs": ["Rapanos involved a consolidation of two cases on appeal from the Sixth Circuit\u2014 Rapanos and Carabell \u2014both of which concerned the breadth of the Clean Water Act's jurisdiction over \"adjacent\" wetlands. In Carabell , landowners challenged whether Section 404 jurisdiction extends to \"wetlands that are hydrologically isolated from any of the 'waters of the United States[,]'\" and Rapanos presented the similar question of whether this jurisdiction includes nonnavigable wetlands \"that do not even abut a navigable water.\" In both cases, collectively referred to as Rapanos , the Sixth Circuit upheld the Corps' assertion of jurisdiction over the wetland property in question.", "Many anticipated that Rapanos would provide clarity on the disputes following SWANCC . And although a majority of five Justices agreed that the Sixth Circuit decision was flawed, they were not able to agree on a single, underlying standard which would govern future jurisdictional disputes. Instead, a four-Justice plurality opinion, authored by Justice Scalia, and an opinion by Justice Kennedy, writing only for himself, proposed two alternative tests for evaluating jurisdictional waters."], "subsections": [{"section_title": "Lower Courts' Response to Rapanos", "paragraphs": ["With no controlling rationale from the majority, lower courts interpreting Rapanos struggled with the question of what analysis to apply in Clean Water Act jurisdictional disputes. When a majority of the Supreme Court agrees only on the outcome of a case and not on the ground for that outcome, the holding of the Court which lower courts must follow \"may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds.\" While this rule may appear straightforward, it is not always self-evident how courts should identify which Justice's opinion rests on the \"narrowest grounds.\" Some courts have held that Justice Kennedy's \"significant nexus\" test is the narrowest ruling to be derived from Rapanos . Others concluded that waterbodies that satisfy either the plurality test or the \"significant nexus\" test satisfy Rapanos and may be deemed jurisdictional. Of the nine circuits that have addressed the issue, all have applied Justice Kennedy's significant nexus test either alone or in combination with the plurality's test, and none have applied the plurality approach alone. Still, some courts and observers have criticized the significant nexus test as vague and difficult to implement."], "subsections": []}, {"section_title": "Agency Guidance in Response to Rapanos", "paragraphs": ["The Corps and EPA offered their own interpretation of Rapanos through guidance to field officers in 2007, which the agencies revised and replaced after public comment in 2008. The 2008 guidance adopted the view taken by some lower courts that jurisdiction exists over any waterbody that satisfies either the plurality approach or the significant nexus test. The agencies further deconstructed the jurisdictional analysis into three categories: (1) waters that are categorically jurisdictional; (2) waters that may be deemed jurisdictional on a case-by-case basis; and (3) waters that are excluded from jurisdiction under the Clean Water Act.", "In 2011, the Corps and EPA sought comments on proposed changes to the 2008 guidance, which the agencies acknowledged would increase the number of waters regulated under the Clean Water Act in comparison to its earlier post- Rapanos guidance. The potential enlargement of jurisdiction spawned congressional attention, including a letter signed by 41 Senators requesting that the agencies abandon the effort. Some Members of Congress introduced prohibitions on funding related to the draft guidance in several appropriations bills, but those provisions were never enacted. Instead, the agencies abandoned pursuit of the 2011 draft guidance in favor of their 2015 effort at defining the scope of \"waters of the United States,\" the Clean Water Rule. "], "subsections": []}]}]}, {"section_title": "The Clean Water Rule", "paragraphs": ["The Corps and EPA issued the Clean Water Rule in May 2015 in an effort to clarify the bounds of jurisdictional waters in the wake of SWANCC and Rapanos . The agencies relied on a synthesis of more than 1,200 published and peer-reviewed scientific reports and over 1 million comments on the proposed version of the rule. The Clean Water Rule contains the same three-tier structure from the agencies' 2008 joint guidance, identifying waters that (1) are categorically jurisdictional, (2) may be deemed jurisdictional on a case-by-case basis if they have a significant nexus with other jurisdictional waters, and (3) are categorically excluded from the Clean Water Act's jurisdiction. In an effort to reduce uncertainty about the scope of federal jurisdiction, the agencies sought to increase categorical jurisdictional determinations and reduce the number of waterbodies subject to the case-specific significant nexus test."], "subsections": [{"section_title": "Response to the Clean Water Rule During the 114th Congress", "paragraphs": ["The Clean Water Rule was the subject of significant debate among observers, stakeholders, and Members of Congress, and a 2015 Government Accountability Office (GAO) report found that EPA violated publicity or propaganda and antilobbying provisions in prior appropriations acts through its promotion of the Clean Water Rule on social media. The 114th Congress also took steps to block its implementation. In January 2016, the Senate and House passed a resolution of disapproval seeking to nullify the Clean Water Rule under the Congressional Review Act. However, President Obama vetoed that resolution, and a procedural vote in the Senate to override the veto failed."], "subsections": []}, {"section_title": "National Association of Manufacturers v. Department of Defense: Jurisdiction over Challenges to the Clean Water Rule", "paragraphs": ["The Obama Administration intended the Clean Water Rule to take effect on August 28, 2015, but 31 states and 53 non-state plaintiffs, including industry associations, environmental groups, and others, filed suit challenging its legality. The plaintiffs argued, among other things, that the rule exceeded the agencies' statutory and constitutional authority and did not comply with the rulemaking requirements in the Administrative Procedure Act (APA). Environmental groups, seven states, and the District of Columbia intervened in defense of the rule. Before any court could address the merits of the claims, however, an impasse arose over what court was the proper forum for the litigation. Whereas some plaintiffs filed suit in federal district courts, others argued that a judicial-review provision in Section 509 of the Clean Water Act gave the U.S. circuit courts of appeals direct appellate-level review over challenges to the Clean Water Rule.", "At the district court level, some courts dismissed their suits, concluding that the courts of appeals had exclusive jurisdiction. But one district court\u2014the District Court for the District of North Dakota (District of North Dakota)\u2014ruled that it had jurisdiction to review the Clean Water Rule. In August 2015, the District of North Dakota concluded that the rule was likely to be struck down on the merits, and it granted a motion for preliminary injunction, temporarily barring the Clean Water Rule's implementation in 13 western states. (The court later added another state, Iowa, to the scope of injunction.) ", "In the parallel litigation at the appellate level, a Judicial Panel on Multidistrict Litigation consolidated and transferred all circuit court cases to the United States Court of Appeals for the Sixth Circuit (Sixth Circuit). In the consolidated, appellate-level litigation, the Sixth Circuit concluded that the agencies should not apply the Clean Water Rule during the pendency of the legal challenges, and it issued a nationwide stay of the rule. The Sixth Circuit also concluded that it\u2014and not the district courts\u2014had exclusive jurisdiction over the challenges to the Clean Water Rule, setting the stage for the Supreme Court to address the threshold question of which court or courts possess jurisdiction to hear the Clean Water Rule cases. ", "In National Association of Manufacturers (NAM) v. Department of Defense , the Supreme Court disagreed with the Sixth Circuit and concluded that the Clean Water Act did not provide direct appellate-level jurisdiction over the pending cases. Section 509 of the Clean Water Act lists seven categories of agency actions subject to direct appellate review, Justice Sotomayor explained in an opinion for the unanimous Court, but a legal challenge to a rule defining \"waters of the United States\" does not fall within those categories. \"Congress has made clear that rules like the [Clean Water] Rule must be reviewed first in federal district court[,]\" the Court concluded.", "While NAM resolved the threshold question of which courts can hear challenges to the Clean Water Rule, it did not address the merits of the challenges themselves. Merits challenges soon resumed at the district court level after the 2018 NAM decision. In the interim, while the jurisdictional issue was being litigated, the legal landscape had changed as a result of the Trump Administration's shift in United States' policy toward the jurisdictional reach of the Clean Water Act. "], "subsections": []}]}, {"section_title": "The Trump Administration and \"Waters of the United States\"", "paragraphs": ["The Trump Administration opposes the Clean Water Rule, and it is in the process of attempting to rescind the rule and replace it with new regulations elaborating on the meaning of \"waters of the United States.\""], "subsections": [{"section_title": "The Two-Step Rescind and Revise Process", "paragraphs": ["Less than two months after taking office, President Trump issued Executive Order 13778 directing EPA and the Corps to revise or rescind the Clean Water Rule. The executive order instructs the agencies to review the Clean Water Rule for consistency with the Administration's policy to \"ensure that the Nation's navigable waters should be kept free from pollution, while at the same time promoting economic growth, minimizing regulatory uncertainty, and showing due regard for the role of the Congress and the States under the Constitution.\" The executive order also provides that EPA and the Corps \"shall consider\" interpreting the jurisdictional reach of the Clean Water Act in a manner consistent with Justice Scalia's plurality opinion in Rapanos .", "EPA and the Corps intend to carry out Executive Order 13778 through a two-step process. First, they proposed to issue regulations that rescind the Clean Water Rule and recodify the definition of \"waters of the United States\" that was in place before the agencies issued that rule in 2015. Second, they proposed to engage in a separate rulemaking process to develop new regulations that will define the jurisdictional reach of the Clean Water Act. "], "subsections": [{"section_title": "Step One Status: Repealing the Clean Water Rule", "paragraphs": ["In July 2017, EPA and the Corps provided notice and sought comment on a proposed rule (Step One Proposal) rescinding the Clean Water Rule and replacing it with the same text that existed before the Clean Water Rule was promulgated. In 2018, the agencies issued a supplemental notice expanding on their legal rationale for repealing the Clean Water Rule and clarifying that the Step One Proposal is intended to rescind permanently the Clean Water Rule in its entirety. According to the supplemental notice, a full repeal is necessary because the Clean Water Rule exceeded the agencies' statutory authority by adopting an interpretation of Justice Kennedy's Rapanos opinion that was inconsistent with the Clean Water Act and the opinion itself. The agencies also argued that the complex legal landscape created by litigation surrounding the Clean Water Rule has undermined the Clean Water Rule's goal of providing greater clarity regarding the scope of \"waters of the United States.\" The public comment period for the proposed repeal closed on August 13, 2018."], "subsections": []}, {"section_title": "Step Two Status: Drafting a New Definition of \"Waters of the United States\"", "paragraphs": ["In December 2018, EPA and the Corps unveiled a second proposed rule (Step Two Proposal) that would complete the second step of the repeal and revise process by creating new regulations that substantively redefine \"waters of the United States.\" According to EPA and the Corps, the Step Two Proposal is intended to provide \"predictability and consistency by increasing clarity as to the scope of 'waters of the United States' federally regulated\" under the Clean Water Act. The agencies also intend the Step Two Proposal to \"clearly implement\" the Clean Water of Act's objectives of restoring and maintaining the quality of the nation's waters while respecting state and tribal authority over land and resources. The Step Two Proposal would define \"waters of the United States\" to include six categories of waterbodies.", "The Step Two Proposal would mark a significant change from post- Rapanos interpretations of \"waters of the United States\" because it would eliminate the case-by-case \"significant nexus\" evaluation that has been part of EPA and the Corps' guidance and regulations since 2007. According to the agencies, improvements to the definitions of \"adjacent wetland\" and \"tributary\" in the Step Two Proposal would eliminate the need for case-specific significant nexus tests. ", "Under the Clean Water Rule, a wetland is adjacent to jurisdictional waters (and therefore subject to Clean Water Act regulation itself) if, among other potential criteria, it meets certain distance requirements from the ordinary high water mark of other jurisdictional waters. The Step Two Proposal would largely eliminate the distance evaluation and define \"adjacent wetlands\" as those wetlands that \"abut\" ( i.e. , touch) or have a \"direct hydrological surface connection with\" other jurisdictional waters. Tributaries under the Step Two Proposal must contribute flow to traditionally navigable waters through other jurisdictional waters or non-jurisdictional waters that convey downstream perennial or intermittent flows. Under the Clean Water Rule, by contrast, a tributary is any water that contributes flow to jurisdictional waters that have a bed, bank, and ordinary high water mark."], "subsections": []}]}, {"section_title": "The Applicability Date Rule: Suspending the Clean Water Rule During the Two-Step Process", "paragraphs": ["In addition to the two-step repeal and replace plan, the Trump Administration has engaged in a third rulemaking process designed to suspend the Clean Water Rule until February 2020. While the Clean Water Rule states that it is effective as of August 28, 2015, EPA and the Corps published a separate final rule (Applicability Date Rule), which adds a new \"applicability date\" of February 6, 2020, to the Clean Water Rule. ", "The Trump Administration's impetus for the Applicability Date Rule is derived, in part, from the Supreme Court's NAM v. Department of Defense decision. Prior to NAM , the Sixth Circuit's nationwide stay of the Clean Water Rule prevented EPA and the Corps from applying the Clean Water Rule anywhere in the United States. But after NAM concluded that challenges to the rule must begin in federal district courts, the Sixth Circuit dismissed the consolidated appellate-level challenges and vacated its stay. With no nationwide stay in place and with the step-one repeal rule still in proposed form, the Clean Water Rule could have reverted into effect in states that were not subject to a district court injunction. Seeking to prevent reactivation of the Clean Water Rule in some parts of the country, EPA and the Corps promulgated the Applicability Date Rule in an effort to suspend the Clean Water Rule while the agencies undertake the two-step repeal and revise process.", "Like many prior rules related to the definition of \"waters of the United States,\" litigants challenged the Applicability Date Rule in federal courts. In late 2018, two federal district courts determined that EPA and the Corps did not comply with administrative rulemaking requirements in promulgating the Applicability Date Rule. By declining to consider comments on the substantive merits of the pre-Clean Water Rule regulations, the agencies deprived the public of a \"meaningful opportunity\" to comment on the Applicability Date Rule in violation of the Administrative Procedure Act, the courts held. Both courts issued orders vacating the Applicability Date Rule nationwide. As a consequence, there currently is no instrument (either a final rule or court order) that bars application of the Clean Water Rule on a nationwide basis. "], "subsections": []}]}, {"section_title": "The Legal Landscape for the 116th Congress", "paragraphs": ["The multitude of legal challenges related to \"waters of the United States\" has created a complex legal landscape for the 116th Congress. Because both rules in the Trump Administration's rescind-and-replace process are still in proposed form, the Obama Administration's Clean Water Rule remains the current regulation defining waters of the United States. However, post- NAM challenges to the Clean Water Rule have proceeded at the U.S. district court level, and three federal district courts have entered preliminary injunctions barring application of the Clean Water Rule during the pendency of the suits. At the same time, these district courts have limited the scope of their injunction to the specific states that brought legal challenges to the Clean Water Rule. The ultimate result is that the Clean Water Rule currently is enjoined in 28 states, but it is the current enforceable regulation in 22 states, the District of Columbia, and U.S. territories.", "While finalization of the Trump Administration's Step One and Step Two Proposals could bring greater uniformity to this fragmented legal landscape, those rules are also likely to engender new litigation. The focus of future lawsuits, if filed, is likely to depend on the rulemaking process and content of the final rules. But observers expect critics to challenge whether EPA and the Corps considered sufficient scientific data and provided an adequate rationale to depart from prior agency guidance and regulations that utilized Justice Kennedy's \"significant nexus\" test. While critics of that test argue that it is too unpredictable for the average landowner to determine whether a waterbody is part of the \"waters of the United States,\" opponents of the Trump Administration's policy contend that the Step Two Proposal would also introduce new technical definitions that ordinary landowners would not be able to implement without hiring a specialist."], "subsections": [{"section_title": "Proposed Legislation", "paragraphs": ["Because the \"waters of the United States\" debate hinges on the meaning of a statutory term, Congress could enact legislation that seeks to define the jurisdictional reach of the Clean Water Act more clearly. Some Members of the 115th Congress introduced legislation that would have amended the Clean Water Act by providing a narrower definition of \"waters of the United States.\" Other legislation introduced in the 115th Congress would have repealed the Clean Water Rule or allowed EPA and the Corps to repeal the Clean Water Rule without regard to the requirements of the Administrative Procedure Act. While none of the proposed legislation in the 115th Congress was enacted, at least one bill introduced in the 116th Congress proposes to repeal the Clean Water Rule and narrow the Clean Water Act's definition of jurisdictional waters."], "subsections": []}]}, {"section_title": "Conclusion", "paragraphs": ["The debate over the jurisdictional reach of the Clean Water Act implicates complex and overlapping concerns of environmental protection, statutory interpretation, federalism, and constitutional law. While judicial interpretations of \"waters of the United States\" generally have followed broader trends in understanding of the scope of the Commerce Clause, the Supreme Court's inability to identify a unified rationale in Rapanos has caused significant confusion and debate over the outer reaches of the Clean Water Act in the following years. Both the Obama Administration (in the Clean Water Rule) and the Trump Administration (in its rescind and revise process) have sought to provide clarity by promulgating new definitions of \"waters of the United States\" in EPA and the Corps' regulations. But both Administrations' efforts have faced criticism and legal challenges from certain stakeholders, creating a fragmented legal landscape for the 116th Congress in which \"waters of the United States\" means different things in different parts of the nation. Because the \"waters of the United States\" debate hinges on the meaning of a statutory term, Congress could provide greater clarity and uniformity by amending the Clean Water Act to define its jurisdictional scope more clearly, but legislative proposals thus far have not been enacted. "], "subsections": [{"section_title": "Appendix. Table Concerning Major Federal Actions Related to \"Waters of the United States\" in the Clean Water Act", "paragraphs": [], "subsections": []}]}]}}
{"id": "RL34591", "title": "Overview of Federal Housing Assistance Programs and Policy ", "released_date": "2019-03-27T00:00:00", "summary": ["The federal government has been involved in providing housing assistance to lower-income households since the 1930s. In the beginning, the federal government played a role in supporting the mortgage market (through establishment of the Federal Housing Administration [FHA] and the government-sponsored enterprises) and in promoting construction of low-rent public housing for lower-income families through local public housing authorities (PHAs). Over time, the federal government has shifted away from providing construction-based subsidies toward providing rental subsidies, and private developers and property owners have been playing a larger role.", "Today's federal housing assistance programs fall into three main categories: rental housing assistance, assistance to state and local governments, and assistance for homeowners. Most of these programs are administered by the Department of Housing and Urban Development (HUD). Current housing assistance programs include Section 8 vouchers and project-based rental assistance, public housing, housing for the elderly (Section 202), housing for persons with disabilities (Section 811), rural rental assistance (the United States Department of Agriculture's Section 521 program), Community Development Block Grants (CDBG), HOME Investment Partnerships Block Grants, Low-Income Housing Tax Credits (LIHTC), homeless assistance programs, Federal Housing Authority (FHA) and Department of Veterans Affairs mortgage insurance, and the mortgage interest deduction in the tax code.", "Most federal housing assistance programs are aimed at making housing affordable for low-income families. Affordability\u2014defined as housing that costs no more than 30% of a family's income\u2014is considered to be the largest housing problem today. Rental assistance programs, which are the largest source of direct housing assistance for low-income families, all allow families to pay affordable, income-based rents; however, different forms of assistance target different types of households, including the elderly, persons with disabilities, and families with children. Several trends in federal housing policy have emerged in recent decades. As the focus of federal housing assistance has shifted away from construction-based subsidies to rental assistance, block grants, and LIHTC, state and local governments have had greater access to federal resources to fund local housing and community development priorities. This shift in federal funding has also led affordable housing developers to pursue mixed financing: the use of multiple streams of federal, state, and local funding, or private financing. In the past, lagging homeownership rates among low-income and minority households have prompted several Presidents to promote homeownership-based housing policies. However, given the severe downturn in U.S. housing markets that began in 2007 and the resulting high foreclosure rate, it is unclear to what degree federal policy will continue to focus on increasing access to homeownership."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The federal government has played a role in subsidizing housing construction and providing homeownership and rental assistance for lower-income households since the 1930s. Today, Congress funds a number of programs to help meet the housing needs of poor and vulnerable populations. The programs are primarily administered by the Department of Housing and Urban Development (HUD), with some assistance provided to rural communities through the Department of Agriculture and some tax benefits administered through the Department of the Treasury. The modern housing assistance programs include both relatively flexible grants to state and local governments to serve homeless people, build affordable housing, provide assistance to first-time homebuyers, and promote community development; and more structured, direct assistance programs that provide low-cost apartments and rental vouchers to poor families, administered through local public, quasi-public, and private intermediaries. The federal government also makes tax credits available to states to distribute to developers of low-cost housing and provides mortgage insurance to lenders that make certain types of mortgages to eligible homebuyers or developers of multifamily housing. One of the federal government's largest housing benefits, arguably, is the mortgage interest deduction, which is not targeted to lower-income households and is available to homeowners who pay mortgage interest and itemize their deductions.", "This report begins with an overview of the history and evolution of federal housing assistance policy. It then provides descriptions of today's major federal housing assistance programs. The report concludes with a discussion of issues and trends in federal housing assistance policy. ", "This report is primarily focused on the federal government's programs and policies that provide housing-related assistance to households and communities to assist lower-income families. This is a narrower focus than the federal government's role in all aspects of housing and housing finance. For example, this report does not explore the federal government's regulation of lead-based paint hazards in residential structures, assistance to communities in responding to mass displacement immediately following natural disasters, or financial industry regulations as they affect both residential and commercial lending. It also does not provide an in-depth discussion of the federal government's role in facilitating a secondary market for mortgages through the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac or the government agency Ginnie Mae. "], "subsections": []}, {"section_title": "History and Evolution of Federal Housing Assistance Policy", "paragraphs": [], "subsections": [{"section_title": "The Beginning of Federal Housing Assistance: FHA and Public Housing", "paragraphs": ["The federal government's first major housing policy was formulated in response to trouble in the mortgage market resulting from the Great Depression. Until the early 1930s, most mortgages were written for terms of three to five years and required borrowers to make payments only on an annual basis. At the end of the three- or five-year terms, the remaining loan balance had to be repaid or the mortgage had to be renegotiated. Another feature of the mortgage market at that time was that lenders would only lend 40% to 50% of the value of the property, so borrowers had to have the cash to complete the transaction or find someone willing to finance the balance (or part of the balance) in a second mortgage. During the Great Depression, however, lenders were unable or unwilling to refinance many of the loans that became due. When borrowers could not pay the loan balances, lenders foreclosed on the loans and took possession of the properties.", "It was against this backdrop that the Housing Act of 1934 (P.L. 73-479) was enacted. The broad objectives of the act were to (1) encourage lenders to invest in housing construction, and (2) stimulate employment in the building industry. The act created the Federal Housing Administration (FHA). FHA insured lenders against losses on home modernization and home improvement loans, created the Mutual Mortgage Insurance Fund to fund the operation of the newly created mortgage insurance programs, and established national mortgage associations to buy and sell mortgages.", "The creation of FHA also institutionalized a new idea: 20-year mortgages on which a loan would be completely repaid at the end of its term. If borrowers defaulted, FHA insured the lender for full repayment. Eventually, lenders began to make long-term mortgages without FHA insurance as long as borrowers made significant down payments. Over time, 15- and 30-year mortgages have become the standard mortgage products.", "As in the case of the mortgage finance market, the federal government initially became involved in providing rental housing assistance in response to the Great Depression. In the early 1930s, a housing division was added to President Franklin D. Roosevelt's Works Progress Administration (WPA) as a part of the effort to create jobs and spur economic growth. The Housing Division acquired land and built multifamily housing projects for occupancy by lower-income families across the country. However, the Housing Division's activities proved controversial with local government officials who thought that they were not consulted in the process.", "This provided the background for the enactment of the U.S. Housing Act of 1937 (P.L. 75-412). It replaced the WPA's Housing Division and its projects by establishing a new, federal United States Housing Agency (a precursor agency to today's Department of Housing and Urban Development) and a new Low-Rent Public Housing program. The new program required partnerships between the federal government, states, and localities. States that wished to receive assistance in building low-rent public housing were required to pass enabling legislation creating new, quasi-governmental, local public housing authorities (PHAs). These PHAs could then apply to the federal government for funding to aid in the construction and maintenance of low-rent housing developments targeted to low-income families. The act declared that it was the policy of the United States", "to promote the general welfare of the nation by employing its funds and credit, as provided in this Act, to assist the several states and their political subdivisions to alleviate present and recurring unemployment and to remedy the unsafe and unsanitary housing conditions and the acute shortage of decent, safe, and sanitary dwellings for families of low-income, in rural or urban communities, that are injurious to the health, safety, and morals of the citizens of the nation.", "Housing was a major issue in the presidential and congressional races of 1948. President Harry S. Truman's pledge to address the postwar housing shortage and the problem of urban slums played a key role in his large margin of victory. In his State of the Union Address in 1949, which unveiled the \"Fair Deal,\" President Truman observed that \"Five million families are still living in slums and firetraps. Three million families share their homes with others.\"", "He further stated", "The housing shortage continues to be acute. As an immediate step, the Congress should enact the provisions for low-rent public housing, slum clearance, farm housing, and housing research which I have repeatedly recommended. The number of low-rent public housing units provided for in the legislation should be increased to 1 million units in the next 7 years. Even this number of units will not begin to meet our need for new housing.", "The Housing Act of 1949 (P.L. 81-171) declared the goal of \"a decent home and a suitable living environment for every American family.\" The act (1) established a federal urban redevelopment and slum clearance program, authorizing federal loans of $1 billion over a five-year period to help local redevelopment agencies acquire slum properties and assemble sites for redevelopment; (2) reactivated the public housing program for low-income families (which had been on hold during World War II), authorizing subsidies to local housing authorities sufficient to build 810,000 units over six years; (3) expanded the FHA's mortgage insurance program to promote home building and homeownership; (4) created within the U.S. Department of Agriculture a program of financial assistance and subsidies to improve housing conditions on farms and in rural areas; and (5) authorized federal grants for research, primarily to improve the productivity of the housing industry."], "subsections": []}, {"section_title": "Government Subsidization of Private Rental Development", "paragraphs": ["Through the 1950s, the federal government's role in housing assistance focused largely on public housing, which served a mostly poor population. Congress recognized that there was a gap in the market\u2014few options existed for moderate-income families whose incomes were too high to qualify for public housing but too low to afford adequate market rate housing. Proposals had been made in Congress to address the shortage of housing for moderate-income households during the 1950s; however, no legislation had been enacted, in part due to the cost to the government of creating and funding a new program. To find a way to serve this segment of the population without creating another large housing program with high expenditures, Congress approved legislation at the end of the 1950s and throughout the 1960s that engaged the private sector in the development of affordable rental housing.", "The Housing Act of 1959 (P.L. 86-372) was the first significant instance where government incentives were used to persuade private developers to build housing that would be affordable to low- and moderate-income households. As part of P.L. 86-372, Congress created the Section 202 Housing for the Elderly program. Through the Section 202 program, the federal government extended low-interest loans to private nonprofit organizations for the development of affordable housing for moderate-income residents age 62 and older. The low interest rates were meant to ensure that units would be affordable, with nonprofit developers being able to charge lower rents and still have adequate revenue to pay back the government loans.", "The Housing Act of 1961 (P.L. 87-70) further expanded the role of the private sector in providing housing to low- and moderate-income households. The act created the Section 221(d)(3) Below Market Interest Rate (BMIR) housing program, which both insured mortgages to private developers of multifamily housing and provided loans to developers at low interest rates. The BMIR program expanded the pool of eligible borrowers to private for-profit developers and government entities, as well as nonprofit developers. Eligible developers included cooperatives, limited-dividend corporations, and state or local government agencies. Like the Section 202 program, the low interest rates in the BMIR program were meant to ensure that building owners could offer affordable rents to tenants.", "The Housing and Urban Development Act of 1965 (P.L. 89-117) added rental assistance to the list of incentives for private multifamily housing developers that participated in the Section 221(d)(3) BMIR program. The Rent Supplement Program, enacted as part of P.L. 89-117, capped the rents charged to participating tenants at 20% of their incomes and paid building owners the difference between 20% of a tenant's income and fair market rent. P.L. 89-117 also created the Section 23 leased housing program, which was the first program to provide rent subsidies for use with existing private rental market units. ", "The Housing and Urban Development Act of 1968 (P.L. 90-448) created the Section 236 and Section 235 programs. In the Section 236 program, the government subsidized private developers' mortgage interest payments so that they would not pay more than 1% toward interest. Some Section 236 units also received rent subsidies (referred to as Rental Assistance Payments [RAP]) to make them affordable to the lowest-income tenants. The Section 235 program instituted mortgage interest reduction payments similar to the Section 236 program, but for individual homeowners rather than multifamily housing developers. Through it, eligible borrowers could obtain FHA-insured mortgages with subsidized interest rates. As the program was originally enacted, HUD was to make subsidy payments to the lender in order to reduce the interest rate on the mortgage to as low as 1%. ", "By the end of the 1960s, subsidies to private developers had resulted in the creation of hundreds of thousands of rental housing units. Approximately 700,000 units of housing had been built through the Section 236 and Section 221(d)(3) programs alone. The Section 202 program had created more than 45,000 units for elderly households. The Section 235 program and Section 23 leased-housing program provided ownership and rental subsidies for thousands more. Through 1972, the Section 235 program subsidized nearly 400,000 homeowners, while the Section 23 leased-housing program provided rent subsidies for more than 38,000 private market rental units. Despite the growth in the role of private developers, public housing was still the largest housing subsidy program, with roughly 1 million units built and subsidized by the early 1970s.", "Another development during the 1960s was an income-based rent structure. Under the public housing program, tenants generally paid rent in an amount equal to the costs of operating the assisted housing in which they lived. Over time, as operating costs rose, there was a concern that the below-market rents being charged were too high to be affordable to the poorest families. The Brooke Amendment, which was included as part of the Housing and Urban Development Act of 1969 (P.L. 91-152), limited tenant contributions toward rent in all rent assisted units (including public housing and all project-based rental assistance units) to an amount equal to 25% of tenant income (this was later raised to 30%). The Brooke Amendment is considered to be responsible for codifying an income-based rent structure in federal housing programs."], "subsections": []}, {"section_title": "Housing Discrimination, the Fair Housing Act, and the Community Reinvestment Act", "paragraphs": ["In 1968, Congress enacted the Fair Housing Act as Title VIII of the Civil Rights Act (P.L. 90-284). The law prohibits discrimination in the sale, rental, or financing of housing based on race, color, religion, national origin, sex, familial status, and handicap. In addition to prohibiting discrimination, the Fair Housing Act also requires HUD and other federal agencies to administer their housing and urban development programs in ways that affirmatively further fair housing. In other words, as determined by courts, HUD is to prevent segregation and ensure that housing is open to everyone.", "Leading up to the passage of the Fair Housing Act, there had been years of governmental and private discrimination in the provision of housing. For example, the Federal Housing Administration's policies and underwriting requirements often discouraged or prohibited FHA insurance for mortgages in certain areas, including non-white or racially mixed areas, and encouraged occupancy restrictions based on race for the mortgages it insured. Such policies limited minority households' opportunities to achieve homeownership and contributed to patterns of racial segregation. ", "Systematic racial discrimination was not limited to private market housing transactions, but was also prevalent in public housing. Together, a presidential order, Supreme Court cases, and civil rights legislation, including the Fair Housing Act, worked to make it illegal to deny public housing assistance to families based on their race and to segregate public housing residents systematically by race, both of which had been common practice since the inception of the program. ", "In 1977, Congress enacted the Community Reinvestment Act (CRA) as part of the Housing and Community Development Act of 1974 ( P.L. 95-128 ). The CRA affirms that federally insured depository institutions have an obligation to meet the credit needs of the communities in which they are chartered and accept deposits, consistent with financial safety and soundness considerations, and requires federal banking regulators to assess the extent to which banks are meeting those needs. The enactment of the CRA grew out of concern that banking deposits were funding lending activities across the country at the expense of providing credit in certain areas where deposits were collected, thereby contributing to neighborhood disinvestment. "], "subsections": []}, {"section_title": "Rethinking the Strategy: The Shift from Construction Subsidies to Rent Subsidies", "paragraphs": ["By the early 1970s, concern was growing about the cost, efficacy, and equity of the construction-based housing subsidy programs, such as the Section 236 and public housing programs. Multiple series of pilot programs were launched to test the cost-effectiveness of supply-side (construction) subsidies versus demand-side (rental assistance) subsides. President Richard M. Nixon criticized the existing programs as not equitably serving families in the same circumstances, providing poor quality housing, being too costly, and placing some families in homes they could not afford. Based on these concerns, President Nixon declared a moratorium on all new activity under the major housing subsidy programs\u2014except for the Section 23 leased-housing program\u2014that began in January 1973. Assisted housing activity slowly restarted in response to lawsuits and new legislation.", "The Housing Act of 1974 ( P.L. 93-383 ) was the first omnibus housing legislation since 1968 and the first such legislation following the Nixon moratorium. The act created a new low-income rental assistance program, referred to as Section 8. Although the 1960s had seen rental assistance programs like Rent Supplement and Section 23, the scale of the Section 8 program made it the first comprehensive rental assistance program. The Section 8 program combined features of the Section 236 program, which was popular with advocates of construction-based subsidies, and the Section 23 leased-housing program, which used the existing housing stock and was popular with the Nixon Administration. Through Section 8, the federal government provided private property owners monthly assistance payments for new or substantially rehabilitated rental units. In exchange for monthly rental payments, property owners agreed to rent to eligible low-income families (defined as families with incomes at or below 80% of local area median income), who would pay an income-based rent. It also provided PHAs with the authority to enter into rental assistance contracts for existing, private market units that met certain quality standards.", "Over time, the use of Section 8 in new construction and substantial rehabilitation projects was found to be more expensive than its use in existing housing. The Housing and Urban-Rural Recovery Act of 1983 ( P.L. 98-181 ) repealed HUD's authority to enter into new Section 8 contracts tied to new construction and substantial rehabilitation, but retained HUD's authority to issue new contracts for existing properties. The act also created a new demonstration program to test a modified use of Section 8, referred to as vouchers. Vouchers were similar to the use of Section 8 rent subsidies in existing housing, but they provided more flexibility to PHAs, particularly by permitting families to pay more than 30% of their incomes in rent. The demonstration was made permanent in 1985."], "subsections": []}, {"section_title": "The Increasing Role of State and Local Governments", "paragraphs": ["By the mid-1980s, federal housing programs had gone through a number of iterations. Some programs had been scrapped as inefficient, subject to fraud and abuse, or too expensive. Shifting federal priorities\u2014toward reducing taxes and increasing military spending in response to the Cold War\u2014reduced funding available for social programs, including housing assistance. Creation of assisted housing with federal funds was on the decline, with production slowing significantly between 1982 and 1988. In addition, existing affordable rental units were being lost as use restrictions between private owners and HUD expired or as owners chose to prepay their low-interest mortgages and begin charging market-rate rent.", "As a result of reduced federal support for housing, state and local governments and private for-profit or nonprofit organizations began to take the initiative in developing innovative ways of providing housing in their communities. Policymakers acknowledged that, in some cases, local communities had better knowledge about how to provide housing than the federal government, and might be able to provide housing more efficiently than HUD. From the late 1980s through the 1990s, Congress acknowledged the value of local control and gave more decisionmaking authority over housing policy to state and local governments through the creation of block grants and tax credits.", "In 1986, the Low Income Housing Tax Credit (LIHTC) program was created as part of the Tax Reform Act of 1986 ( P.L. 99-514 ). The LIHTC was not initially part of the bill that became the Tax Reform Act ( H.R. 3838 ). However, because portions of H.R. 3838 eliminated the favorable treatment of real estate investment income, Members added the LIHTC program to the bill to ensure that developers would have an incentive to continue to construct low- and moderate-income housing. The LIHTC, intentionally or not, was one of the first major programs to give a good deal of control over federal funding for housing to states. Tax credits are allocated to states based on population, and states have discretion in setting priorities as to how the credits will be used. While states must prioritize projects that serve the lowest-income tenants for the longest period of time, they may choose to allocate credits based on criteria such as the tenant populations served (e.g., those with special needs, families with children, or those on public housing waiting lists).", "Just one year after enactment of the LIHTC, Congress passed the Stewart B. McKinney Homeless Assistance Act ( P.L. 100-77 ), which included funding for several grants that states and localities could use to assist people experiencing homelessness. Grants were available for permanent and transitional housing, as well as supportive services, with the idea that localities are in a better position to know how to serve the people living in their communities. ", "In 1990, Congress created another large, flexible block grant to states and localities. The National Affordable Housing Act of 1990 (NAHA, P.L. 101-625 ) authorized the HOME Investment Partnerships program. HOME was modeled after an earlier block grant, the Community Development Block Grant (CDBG), which was created as part of the Housing Act of 1974 to consolidate several special purpose grants funding many activities other than housing, such as neighborhood revitalization, open space, and water and sewer grants. NAHA directed that HOME funds be allocated to states and localities based on a formula and that funds be targeted to assist families with incomes at or below 80% of area median income (or lower in some cases). Recipient jurisdictions were permitted to use funds to assist homebuyers and homeowners, construct rental housing, and provide rental assistance, and they were required to establish plans for spending their funds, meet matching requirements, and partner with local nonprofits.", "The Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA, P.L. 104-330 ) reorganized the system of federal housing assistance to Native Americans by eliminating several separate programs of assistance and replacing them with a single block grant program. In addition to simplifying the process of providing housing assistance, a purpose of NAHASDA was to provide federal assistance for Indian tribes in a manner that recognizes the right of Indian self-determination and tribal self-governance."], "subsections": []}, {"section_title": "Reforming Rental Assistance", "paragraphs": ["Throughout the 1990s, concern about the state of public housing grew. The public perceived public housing to be mismanaged, of poor quality, and dangerous. At the same time, interest was growing in reforming social programs by devolving control to the states and increasing the programs' focus on promoting work and self-sufficiency. Concern over the condition of public housing\u2014and the influence of the 1996 welfare reform debate and legislation\u2014led to proposals for major public and assisted housing reforms. Several years of debate in Congress culminated with the enactment of the Quality Housing and Work Responsibility Act of 1998 (QHWRA; P.L. 105-276 ).", "The purposes of QHWRA, as defined in the act, were to deregulate PHAs, provide PHAs with more flexibility in their use of federal assistance, facilitate mixed income communities, decrease concentrations of poverty in public housing, increase accountability and reward effective management of PHAs, create incentives and economic opportunities for residents assisted by PHAs to work and become self-sufficient, consolidate the Section 8 voucher and certificate programs into a single market-driven program, remedy the problems of troubled PHAs, and replace or revitalize severely distressed public housing projects.", "Specific reforms in QHWRA included increased income targeting in the voucher program, removal of federal preference categories for housing assistance, enactment of a limited community service requirement in public housing, creation of the Section 8 Housing Choice Voucher program (a hybrid of the Section 8 voucher and certificate programs), authorization of the HOPE VI program, consolidation and reform of funding for public housing, and modifications to the assessment systems for PHAs. QHWRA also featured the so-called \"Faircloth Amendment,\" which prohibited the use of public housing funding for the development of any net new units of public housing."], "subsections": []}, {"section_title": "The Decline of Public Housing and Aftermath of the Financial Crisis", "paragraphs": ["In the 10 years following passage of QHWRA, the number of public housing units declined by more than 10%. This is attributable to a number of policy changes, many of which were contained in QHWRA, including the Faircloth Amendment limiting development of new public housing, the growth of HOPE VI paired with the removal of a requirement for one-for-one replacement of demolished units, and an increased focus on mixed finance redevelopment of public housing. The pace of decline in the overall number of public housing units increased again with the introduction of the Rental Assistance Demonstration in 2012 ( P.L. 112-55 ). RAD allows PHAs to remove their properties from the public housing program and instead receive a form of Section 8 rental assistance. As the program is currently authorized, HUD is authorized to approve the conversion of nearly half of the remaining public housing stock to Section 8 rent assistance.", "Another important development in housing policy in more recent years was the 2007 financial crisis and its aftermath. The financial crisis itself was precipitated in large part by mortgage lending practices and its aftermath was felt heavily in housing markets as home prices fell, foreclosures rose, and the homeownership rate dropped significantly. This led to a variety of policy responses addressing both the perceived causes and the effects of the housing and financial market turmoil. For example, major reforms enacted in 2008 resulted in federal conservatorship for two housing government-sponsored enterprises (Fannie Mae and Freddie Mac) that continues today. Congress and both the George W. Bush and Obama Administrations created several temporary programs to address rising foreclosure rates. The recession that accompanied the financial market turmoil prompted Congress and President Obama to enact an economic stimulus package in 2009 that included a significant one-time increase in resources for, among other things, several federal housing programs (including public housing, CDBG, and grants for LIHTC projects). In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act ( P.L. 111-203 ) instituted new rules related to mortgages intended to protect consumers and the financial system from some of the lending practices that preceded the financial crisis, among other reforms. In the ensuing years, there has been ongoing debate about the effects of some of these policy responses as well as the appropriate role of the government in providing support for homeownership and the housing finance system more generally. "], "subsections": []}]}, {"section_title": "Today's Housing Assistance Programs", "paragraphs": ["Today's system for providing housing assistance to low-income families is made up of programs that fall into three main categories: rental housing assistance, federal assistance to state and local governments, and housing finance and homeownership assistance. These categories are not necessarily mutually exclusive. For example, some assistance provided to states and local governments can in turn be used to provide various types of housing finance or homeownership assistance.", "Rental assistance is provided primarily through rent vouchers that families can use in the private market; below-market rental units owned by PHAs or private landlords under contract with the federal government; and, to a limited extent, construction of new below-market rental units. ", "Assistance to state and local governments comes in several forms, including broad, flexible block grants that can be used for rental, homeownership, or community development purposes; special purpose block grants; and programs based in the tax system. ", "Housing finance and homeownership assistance can include direct assistance to defray home buying costs, tax incentives, and mortgage insurance programs to help provide incentives for the private market to meet the needs of underserved segments of the population. Such assistance may help finance single-family housing, which can assist eligible homebuyers in obtaining mortgages to purchase homes, or multifamily housing, which can assist housing developers in obtaining financing to develop affordable rental housing. ", "This section provides a description of the major housing assistance programs that fall into the three aforementioned categories."], "subsections": [{"section_title": "Rental Housing Assistance", "paragraphs": [], "subsections": [{"section_title": "Section 8 Housing Choice Vouchers", "paragraphs": ["Section 8 Housing Choice Vouchers (vouchers) are a form of tenant-based rental assistance funded by the federal government, administered locally by quasi-governmental PHAs, and provided to private landlords on behalf of low-income families. (The program is codified at 42 U.S.C. \u00a71437f(o)). Generally, an eligible family with a voucher lives in the housing of its choice in the private market (assuming the unit meets program standards and the landlord is willing to participate in the program) and the voucher pays the difference between the family's contribution toward rent and the actual rent for the unit. Specifically, a family pays 30% of its adjusted income toward rent (although it can choose to pay more) and the PHA, which receives funding from HUD, makes payments to the landlord based on a maximum subsidy set by the PHA (based on the local fair market rent established by HUD), less the tenant's contribution. Families are eligible to receive vouchers if they are very low-income (earning 50% or less of the local area median income) or low-income (earning 80% or less of the local area median income) and meet other special criteria (for example, are elderly or have disabilities). However, PHAs must provide 75% of all vouchers available in a year to extremely low-income families (earning 30% or less of the greater of area median income or the poverty guidelines). Vouchers are nationally portable; once a family receives a voucher, it can take that voucher and move to any part of the country where a voucher program is being administered.", "There are several special forms of Section 8 vouchers. Tenant protection vouchers are provided to families who are being displaced from other HUD programs. Some tenant protection vouchers, called enhanced vouchers, can have higher values than regular vouchers. PHAs also have the discretion to \"project-base\" some of their vouchers. Project-based vouchers are attached to specific housing units rather than given to families to use in homes of their choosing. Another special form is the homeownership voucher; PHAs have the discretion to allow eligible first-time homebuyers to use their vouchers to make monthly mortgage payments. (For more information, see CRS Report RL32284, An Overview of the Section 8 Housing Programs: Housing Choice Vouchers and Project-Based Rental Assistance , by Maggie McCarty.)", "The voucher program is not an entitlement program. Families that wish to receive vouchers must generally apply to their local PHA and are placed on a waiting list, the length of which varies by community and can range from several months to many years. Congress has authorized and funded roughly 2 million vouchers. The funding for them is provided annually by Congress in the appropriations for HUD. ", "The Section 8 voucher program is the largest of HUD's rental assistance programs, serving the largest number of households and accounting, in recent years, for more than one-third of the department's budget. Congress has generally renewed all existing vouchers each year; in some years, Congress also creates new vouchers to serve additional families, referred to as incremental vouchers. The current distribution of vouchers across PHAs results from a variety of allocation methods used in the past: formula-based, competitive, and other methods. While the distribution of funding to PHAs is generally based on the number of vouchers that they have and the cost of those vouchers, the exact distribution formula has often been modified by Congress in the appropriations process. "], "subsections": []}, {"section_title": "Project-Based Section 8 Rental Assistance", "paragraphs": ["Under the project-based Section 8 rental assistance program, HUD entered into contracts with private property owners under which owners agreed to rent their housing units to eligible low-income tenants for an income-based rent, and HUD agreed to pay the difference between tenants' contributions and a rent set by HUD. Families are eligible to live in project-based Section 8 units if they are low-income (having income at or below 80% of the area median income), but 40% of units made available each year must be reserved for extremely low-income families (those with income at or below 30% of the area median income).", "No new project-based Section 8 contracts with private landlords have been awarded since the mid-1980s, although existing contracts can be renewed upon their expiration. Roughly 1 million project-based units are still under contract and receive assistance. The original contracts were for 10- to 40-year periods and were provided with multiyear funding from Congress for the length of the contracts. Therefore, each year Congress only has to provide new funding for those contracts that have expired and require annual renewal (although, eventually, all of those long-term contracts will expire so all contracts will require annual funding). (See Table 1 for appropriations information.) Not all contracts are renewed, so there has been a loss of project-based Section 8 units over time. When owners do not renew, tenants are provided with Section 8 tenant protection vouchers. For more information, see CRS Report RL32284, An Overview of the Section 8 Housing Programs: Housing Choice Vouchers and Project-Based Rental Assistance , by Maggie McCarty."], "subsections": []}, {"section_title": "Public Housing", "paragraphs": ["Low-rent public housing developments are owned and operated by local public housing authorities (PHAs) and subsidized and regulated by the federal government. (The program is codified at 42 U.S.C. \u00a71437.) Generally, families are eligible to live in public housing if they are low-income (earning at or below 80% of area median income), but 40% of public housing units that become available in a year must be given to families that are extremely low-income (earning at or below the greater of 30% of area median income or the federal poverty guidelines). As in the two Section 8 programs, families living in public housing pay 30% of their adjusted income toward rent.", "PHAs receive several streams of funding from HUD to help make up the difference between what tenants pay in rent and what it costs to maintain public housing. PHAs receive operating funds and capital funds through a formula allocation process; operating funds are used for management, administration, and the day-to-day costs of running a housing development, and capital funds are used for modernization needs (such as replacing a roof or heating and cooling system, or reconfiguring units). PHAs can also apply for competitive Choice Neighborhoods revitalization grants (which replaced the HOPE VI program), which are used to demolish and rebuild, or substantially rehabilitate, severely distressed public housing, replacing it with mixed-income housing. ", "There are roughly 1 million public housing units under contract with the federal government, making public housing the second-largest direct housing assistance program. The 1998 Public Housing Reform Act ( P.L. 105-276 ) prohibited PHAs from increasing the total number of public housing units in their inventories; however, the number of public housing units had begun to decline steadily before then for a number of reasons. PHAs are authorized to demolish or sell their public housing developments with HUD's permission, and since the mid-1990s they have not been required to replace those units with new units (although they must provide displaced families with Section 8 vouchers). The 1998 act also provided authority to allow, and in some cases require, PHAs to convert their public housing units to the voucher program. Also, the HOPE VI program has contributed to the demolition of more units than it has replaced. Most recently, the Rental Assistance Demonstration (RAD) authorizes up to nearly half of the current public housing stock to leave the program via conversion to Section 8. (For more information about public housing, see CRS Report R41654, Introduction to Public Housing , by Maggie McCarty.)"], "subsections": []}, {"section_title": "Section 202 Supportive Housing for the Elderly Program and the Section 811 Supportive Housing for Persons with Disabilities Program", "paragraphs": ["Through the Section 202 Supportive Housing for the Elderly program, HUD provides funds to nonprofit organizations that in turn build rental properties for low-income elderly households (those where one or more persons are age 62 or older). It was created as part of the Housing Act of 1959 (P.L. 86-372). (The program is codified at 12 U.S.C. \u00a71701q.) ", "Section 202 is the only federal housing program that funds housing exclusively for elderly persons, although from approximately 1964 to 1990 non-elderly persons with disabilities were eligible for residency in Section 202 properties. Although the Section 202 program initially provided low-interest loans to nonprofit developers, since the early 1990s the program has provided nonprofit developers with capital grants, together with project rental assistance contracts (rental assistance that is similar to project-based Section 8). The current version of the Section 202 program serves very low-income elderly households (those with incomes at or below 50% of area median income). (For more information about the Section 202 program, see CRS Report RL33508, Section 202 and Other HUD Rental Housing Programs for Low-Income Elderly Residents , by Libby Perl.)", "The Section 811 Supportive Housing for Persons with Disabilities Program was created in 1990 as part of the Cranston-Gonzalez National Affordable Housing Act ( P.L. 101-625 ). (The program is codified at 42 U.S.C. \u00a78013.) Until the enactment of Section 811, the Section 202 program provided housing for persons with disabilities.", "Through Section 811, HUD provides capital grants to nonprofit organizations to create rental housing that is affordable to very low-income households (income at or below 50% of AMI) with an adult who has a disability. The program also funds project rental assistance contracts to subsidize the rent paid by tenants. Housing built with capital grants may include group homes, independent living facilities, multifamily rental units, condominium units, and cooperative housing. Section 811 developers must provide supportive services to those residing in the units. In addition, through FY2010 the Section 811 program created tenant-based rental assistance, sometimes called \"mainstream vouchers,\" that tenants could use to find housing in the private market, much like Section 8 vouchers. However, since FY2011 (based on a law enacted in 2010 [ P.L. 111-374 ]), Section 811 tenant-based assistance has been funded via the Section 8 account. Also as part of P.L. 111-374 , Section 811 rental assistance funds were made available to be used in conjunction with capital funding from other sources (such as LIHTC and HOME funds). (For more information about the Section 811 program, see CRS Report RL34728, Section 811 and Other HUD Housing Programs for Persons with Disabilities , by Libby Perl.)"], "subsections": []}, {"section_title": "Other Rent-Restricted Units", "paragraphs": ["The Section 236 program was an initiative to encourage private developers to create housing affordable to low- and moderate-income households. It was created as part of the Housing and Urban Development Act of 1968 (P.L. 90-448), and was active in promoting new development from approximately 1969 to 1973. (The program is codified at 12 U.S.C. \u00a71715z-1.) The Section 236 program provided mortgage insurance to housing developers for the construction and rehabilitation of rental housing, and it continues to provide mortgage subsidies to building owners through a mechanism called Interest Reduction Payments (IRPs). IRPs are subsidies to owners that ensure they will only pay 1% interest on their mortgages. Given the reduced financing costs, owners can charge below-market rents for Section 236 units. Many units also receive rental assistance payments through the project-based Section 8 rental assistance program, Rent Supplement program, or Rental Assistance Payments (RAP) program, making the units affordable to very low-income and extremely low-income families.", "The Section 221(d)(3) Below Market Interest Rate (BMIR) program was another HUD program that encouraged private developers to create affordable housing by offering FHA-insured loans with interest rates of 3%. It was enacted as part of the Housing Act of 1961 (P.L. 87-70) and actively insured new loans until 1968, when the Section 236 program replaced it as a vehicle for affordable housing development. (The Section 221(d)(3) program is codified at 12 U.S.C. \u00a71715 l .) Like Section 236, units created under this program are offered for below-market rents and may also receive rental assistance."], "subsections": []}, {"section_title": "Department of Agriculture Rural Rental Housing Programs", "paragraphs": ["Title V of the Housing Act of 1949 authorized the U.S. Department of Agriculture (USDA) to make loans to farmers to enable them to construct, improve, repair, or replace dwellings and other farm buildings to provide decent, safe, and sanitary living conditions for themselves and their tenants, lessees, sharecroppers, and laborers. USDA was authorized to make grants, or combinations of loans and grants, to those farmers who could not qualify to repay the full amount of a loan but needed the funds to make their dwellings sanitary or to remove health hazards to the occupants or the community. Although the act was initially targeted to farmers, over time it has been amended to enable USDA to make housing loans and grants to rural residents in general.", "The USDA housing programs are generally referred to by the section number under which they are authorized in the Housing Act of 1949, as amended. Under the Section 515 program, the Rural Housing Service of the USDA is authorized to make direct loans for the construction of rural rental and cooperative housing. (The program is codified at 42 U.S.C. \u00a71485.) The loans are made at a 1% interest rate and are repayable in 50 years. Except for public agencies, all borrowers must demonstrate that financial assistance from other sources is not enough to enable the borrower to provide the housing at terms that are affordable to the target population. ", "Under the Section 538 program, USDA guarantees loans made by private lenders to developers of affordable rural rental housing for low- and moderate-income households. (The program is codified at 42 U.S.C. \u00a71490p-2.)", "Under the Section 521 program, rental assistance payments, which are made directly to owners of rental properties, make up the difference between the tenants' rent payments (30% of tenant income) and the USDA-approved rent for the Section 515 units. (The Section 521 program is codified at 42 U.S.C. \u00a71490a.) Owners must agree to operate the property on a limited profit or nonprofit basis. (For more information about rural housing assistance programs, see CRS Report RL31837, An Overview of USDA Rural Development Programs , by Tadlock Cowan.)"], "subsections": []}]}, {"section_title": "Funding for States and Localities", "paragraphs": [], "subsections": [{"section_title": "Low Income Housing Tax Credit", "paragraphs": ["The LIHTC was enacted as part of the Tax Reform Act of 1986 ( P.L. 99-514 ) and provides incentives for the development of affordable rental housing through federal tax credits administered through the Internal Revenue Service. (The program is codified at 26 U.S.C. \u00a742.) The tax credits are disbursed to state housing finance agencies (HFAs) based on population. HFAs, in turn, award the credits to housing developers that agree to build or rehabilitate housing in which a certain percentage of units will be affordable to low-income households. Housing developers then sell the credits to investors and use the proceeds to help finance the housing developments. The benefit of the tax credits to the purchasing investors is that they reduce the investor's federal income tax liability annually over a 10-year period.", "Because tax credits reduce the amount of private financing required to build or rehabilitate housing, the owners of developments financed through tax credits are able to charge lower rents. To qualify for the tax credits, one of three criteria must be met: at least 20% of units in a development must be occupied by households with incomes at or below 50% of area median income; at least 40% of units must be occupied by households with incomes at or below 60% of area median income; or, more recently, properties have been allowed to adopt an \"income-averaging\" approach that enables them to serve a mix of higher-income families if they also serve lower-income families, as long as it results in an average of 40% of units being occupied by households with incomes that average 60% or below of area median income. Rent charged for the rent-restricted units in a development may not exceed 30% of an imputed income limitation\u2014calculated based on area median incomes. Units financed with tax credits must remain affordable for at least 15 years, although states may choose to adopt longer use restrictions. As of 2018, more than 2.3 million units had been placed in service using LIHTCs. In FY2018, the Joint Committee on Taxation estimated that the LIHTC would result in a $9 billion tax expenditure. (For more information about the LIHTC, see CRS Report RS22389, An Introduction to the Low-Income Housing Tax Credit , by Mark P. Keightley.)"], "subsections": []}, {"section_title": "Mortgage Revenue Bonds", "paragraphs": ["The federal government authorizes state and local governments to issue private activity bonds, up to a certain limit, which are exempt from federal taxes. One form of a private activity bond is a mortgage revenue bond (MRB). (MRBs are codified at 26 U.S.C. \u00a7143.) State or local governments\u2014or their authorized agencies, such as housing finance agencies\u2014sell MRBs to investors. Because the interest earned by bondholders is exempt from federal (and sometimes state) taxation, the bonds can be marketed at lower interest rates than would be required for similar taxable instruments. The proceeds of the bond sales, less issuance costs and reserves, are used to finance home mortgages to eligible (generally first-time) homebuyers. In effect, the tax exemption on the bonds provides an interest rate subsidy to homebuyers.", "To qualify for the benefit, a borrower must not have been a homeowner in the past three years, the mortgage must be for the principal residence of the borrower, the purchase price may not exceed 90% (110% in targeted areas) of the average purchase price in the area, and the income of the borrower may not exceed 110% (140% in targeted areas) of the median income for the area. In FY2018, the Joint Committee on Taxation estimated that MRBs would result in a $1.3 billion tax expenditure."], "subsections": []}, {"section_title": "Community Development Block Grants", "paragraphs": ["The Community Development Block Grant (CDBG) program was enacted as part of the Housing and Community Development Act of 1974 ( P.L. 93-383 ), and is administered by HUD. (The program is codified at 42 U.S.C. \u00a7\u00a75301-5321.) Its purpose is to develop viable urban communities by providing decent housing, a suitable living environment, and expanding economic opportunities primarily for low- and moderate-income persons. The CDBG program distributes 70% of total funds through formula grants to entitlement communities\u2014central cities of metropolitan areas, cities with populations of 50,000 or more, and urban counties\u2014and the remaining 30% goes to states for use in small, non-entitlement communities.", "Recipient communities may use CDBG funds for a variety of activities, although at least 70% of funds must be used to benefit low- and moderate-income persons. Eligible activities include the acquisition and rehabilitation of property for purposes such as public works, urban beautification, and historic preservation; the demolition of blighted properties; services such as crime prevention, child care, drug abuse counseling, education, or recreation; neighborhood economic development projects; the rehabilitation or development of housing; and housing counseling services. Beyond CDBG's annual appropriations, Congress has used the program's framework to provide additional, supplemental, and special appropriations to assist states and communities in responding to various economic crises and manmade and natural disasters. (For more information about CDBG, see CRS Report R43394, Community Development Block Grants: Recent Funding History , by Eugene Boyd.)"], "subsections": []}, {"section_title": "HOME Block Grants", "paragraphs": ["The HOME Investment Partnerships Program is a housing block grant program administered by HUD and designed to expand the supply of decent, safe, sanitary, and affordable housing. (The program is codified at 42 U.S.C. \u00a7\u00a712741 et seq.) HOME funding is allocated via formula: 60% of funds are awarded to \"participating jurisdictions\" (localities that have populations above a certain threshold and qualify for a certain amount of funding under the formula), and 40% are awarded to states. HOME grantees must match 25% of their HOME grants (with some exceptions) and submit a plan to HUD detailing their community housing needs and priorities.", "HOME funds can be used for four main purposes: rehabilitation of owner-occupied housing, homebuyer assistance, rental housing construction and rehabilitation, and the provision of tenant-based rental assistance. All HOME funds must be used to benefit low-income families (those with incomes at or below 80% of area median income), and at least 90% of funds used for rental housing activities or tenant-based rental assistance must be used to benefit families with incomes at or below 60% of area median income. (For more information about HOME, see CRS Report R40118, An Overview of the HOME Investment Partnerships Program , by Katie Jones.)"], "subsections": []}, {"section_title": "Housing Trust Fund", "paragraphs": ["The Housing Trust Fund (HTF) was created in the Housing and Economic Recovery Act of 2008 (HERA, P.L. 110-289 ). It is a block grant administered by HUD that is targeted primarily toward the development of rental housing for the lowest-income households. (The program is codified at 12 U.S.C. \u00a74568.) HTF funds are allocated to states via formula. ", "HTF funds are to be used primarily for rental housing; however, by statute up to 10% of funds can be used for certain homeownership activities for eligible first-time homebuyers. Furthermore, all HTF funds must benefit households that are at least very low-income, and at least 75% of the funds used for rental housing must benefit extremely low-income households (or households with incomes at or below the poverty line). While the HTF is similar to the HOME program in some ways, it is more explicitly focused on rental housing and has deeper income targeting requirements than HOME.", "The HTF is funded through contributions from the government-sponsored enterprises Fannie Mae and Freddie Mac rather than through appropriations. Although the HTF was created in 2008, due to concerns about Fannie Mae's and Freddie Mac's financial situations, the first contributions were not provided to the HTF until 2016. (For more information about the Housing Trust Fund, see CRS Report R40781, The Housing Trust Fund: Background and Issues , by Katie Jones.) "], "subsections": []}, {"section_title": "Homeless Assistance Grants", "paragraphs": ["The Homeless Assistance Grants were established in 1987 as part of the Stewart B. McKinney Homeless Assistance Act ( P.L. 100-77 ). They are administered by HUD and fund housing and services for homeless persons. The grants have gone through several permutations since their enactment, with the most recent change taking place when they were reauthorized in the 111 th Congress by the Homeless Emergency Assistance and Rapid Transition to Housing (HEARTH) Act, enacted as part of the Helping Families Save Their Homes Act ( P.L. 111-22 ). (The Homeless Assistance Grants are codified at 42 U.S.C. \u00a711360, et seq.)", "The Homeless Assistance Grants consist of the Emergency Solutions Grants (ESG) program, Continuum of Care (CoC) program, and Rural Housing Stability (RHS) program. ESG funds are distributed to local communities and states by formula and may be used by grantees in two categories: (1) emergency shelter and related services and (2) homelessness prevention and rapid rehousing. The statute limits use of funds in the first category to the greater of 60% of a state or local government's ESG allocation or the amount the recipient spent for these purposes in the year prior to the effective date of the HEARTH Act. CoC program funds, distributed to nonprofit organizations, public housing agencies, and state and local governments via a competition, may be used for transitional housing, permanent supportive housing, rapid rehousing, supportive services, and Homeless Management Information Systems. The RHS program has not been implemented, but would allow rural grantees to assist people who are experiencing homelessness in the same ways as the CoC program. The statute would also allow RHS funds to be used for homelessness prevention activities, relocation assistance, short-term emergency housing, and home repairs that are necessary to make housing habitable. (For more information about the Homeless Assistance Grants, see CRS Report RL33764, The HUD Homeless Assistance Grants: Programs Authorized by the HEARTH Act , by Libby Perl.)"], "subsections": []}, {"section_title": "Housing Opportunities for Persons with AIDS", "paragraphs": ["The Housing Opportunities for Persons with AIDS (HOPWA) program is the only federal program that provides funding specifically for housing for persons with acquired immunodeficiency syndrome (AIDS) and related illnesses. Congress established the program as part of the Cranston-Gonzalez National Affordable Housing Act ( P.L. 101-625 ) in 1990. (The program is codified at 42 U.S.C. \u00a7\u00a712901-12912.) HOPWA program funding is distributed both by formula allocations and competitive grants. HUD awards 90% of appropriated funds by formula to states and eligible metropolitan statistical areas (MSAs) that meet thresholds regarding population, AIDS cases, and AIDS incidence. Recipient states and MSAs may allocate grants to nonprofit organizations or administer the funds through government agencies. HOPWA grantees may use funds for a wide range of housing, social services, program planning, and development costs. (For more information about HOPWA, see CRS Report RL34318, Housing for Persons Living with HIV/AIDS , by Libby Perl.)"], "subsections": []}, {"section_title": "NAHASDA", "paragraphs": ["The Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA, P.L. 104-330 ), reorganized the system of federal housing assistance to Native Americans by separating Native American programs from the public housing program, and by eliminating several separate programs of assistance and replacing them with a single block grant program. In addition to simplifying the process of providing housing assistance, a purpose of NAHASDA was to provide federal assistance for Indian tribes in a manner that recognizes the right of Indian self-determination and tribal self-governance.", "The act provides block grants to Indian tribes or their tribally designated housing entities (TDHEs) to use for a wide range of affordable housing activities through the Native American Housing Block Grant (NAHBG) program. The tribe must submit an Indian housing plan (IHP), which is reviewed by HUD for compliance with statutory and regulatory requirements. Funding is provided under a need-based formula, which was developed pursuant to negotiated rulemaking between tribal representatives and HUD. Tribes and TDHEs can leverage funds, within certain limits, by using future grants as collateral to obtain private loans for affordable housing activities under the Title VI Loan Guarantee Program. (For more information about NAHASDA, see CRS Report R43307, The Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA): Background and Funding , by Katie Jones.)"], "subsections": []}]}, {"section_title": "Housing Finance and Homeownership Assistance", "paragraphs": [], "subsections": [{"section_title": "Federal Housing Administration", "paragraphs": ["The Federal Housing Administration (FHA) was established by the National Housing Act of 1934 (P.L. 73-479). Today, it is an agency within HUD that insures private lenders against losses on certain home mortgages. Because lenders are insured against loss if borrowers default, they are more willing to make loans to borrowers who might not otherwise be served by the private market, particularly those with low down payments or little credit history. FHA-insured borrowers pay insurance premiums to FHA and mortgages are subject to certain requirements, such as limits on the size of the loan.", "FHA administers a variety of both single-family and multifamily mortgage insurance products. Single-family products include insurance for home purchase, refinance, and home improvement loans, as well as reverse mortgages to allow the elderly to access equity in their homes. Multifamily products include insurance for loans for the purchase, repair, or construction of apartments, hospitals, and nursing homes. These products are administered through two primary program accounts\u2014the Mutual Mortgage Insurance Fund account (MMI Fund) and the General Insurance/Special Risk Insurance Fund account (GI/SRI Fund). The MMI Fund provides financial backing for insurance on single-family mortgages. The GI/SRI Fund backs insurance for mortgages on multifamily buildings, hospitals and nursing homes, and for an assortment of special purpose loans such as manufactured housing loans and home improvement loans.", "While FHA insures a variety of different types of mortgages, its single-family home mortgage program is by far its largest. FHA insures mortgages for both home purchases and refinances, but it tends to make up a larger share of the home purchase market than the refinance market (FHA's market share fluctuates depending on economic conditions and other factors). FHA's share of the home purchase market averaged about 14% from the mid-1990s until the early 2000s, but fell to 5% by 2005 as other types of mortgage credit (including subprime mortgages) became more easily available. It then increased dramatically after 2007, reaching a high of 33% in 2009, as the housing market experienced turmoil, mortgage credit standards tightened, and FHA insured a larger number of mortgages in what had become a smaller mortgage market overall. FHA's share has decreased since its peak, but at 20% in 2017 it remains higher than it was in the years preceding the housing market turmoil. (For more information on FHA, see CRS Report RS20530, FHA-Insured Home Loans: An Overview , by Katie Jones.)"], "subsections": []}, {"section_title": "Department of Veterans Affairs Loan Guarantees", "paragraphs": ["The Servicemen's Readjustment Act of 1944 (P.L. 78-346) established the home loan guaranty program, which is administered by the Department of Veterans Affairs (VA). (The program is codified at 38 U.S.C. \u00a73710 et seq.) The VA loan guaranty came about as a less expensive alternative to a cash bonus for veterans returning from World War II that would still provide benefits to veterans.", "The loan guaranty program assists veterans by insuring mortgages made by private lenders, and it is available for the purchase or construction of homes and for refinancing existing loans. The loan guaranty has expanded over the years so that it is available to (1) all veterans who fulfill specific duration of service requirements or who were released from active duty due to service-connected disabilities, (2) members of the reserves who completed at least six years of service, and (3) spouses of veterans who died in action, died of service-connected disabilities, or died while receiving (or while being entitled to receive) benefits for certain service-connected disabilities. Under the loan guaranty, the VA agrees to reimburse lenders for a portion of losses if borrowers default. Unlike the FHA insurance program, the VA does not insure 100% of the loan; instead, the percentage of the loan that is guaranteed is based on the loan amount, and is typically about 25% of the loan.", "As shown in Table 11 , the total number of VA-insured purchase loans originated per year as a share of all home purchase mortgages has increased from 2% in FY2005 through FY2007 to 9% in FY2017. (For more information on VA home loans, see CRS Report R42504, VA Housing: Guaranteed Loans, Direct Loans, and Specially Adapted Housing Grants , by Libby Perl.)"], "subsections": []}, {"section_title": "Department of Agriculture Rural Homeownership Programs", "paragraphs": ["USDA's Rural Housing Service administers a number of loan programs to assist with the financing of both owner-occupied housing and rental housing in rural areas. It also administers some grant programs for purposes such as home repairs. ", "Through the Section 502 Rural Housing Loan program, USDA is authorized both to make direct loans and to guarantee private loans to very low- to moderate-income rural residents for the purchase or repair of new or existing single-family homes. (The program is codified at 42 U.S.C. \u00a71472.) The direct loans have a 33-year term and interest rates may be as low as 1%. Borrowers in rural areas with incomes at or below 80% of area median income qualify for the direct loans. The guaranteed loans have 30-year terms, and borrowers in rural areas with incomes at or below 115% of the area median qualify. Priority for both direct and guaranteed loans is given to first-time homebuyers, and USDA may require that borrowers complete a homeownership counseling program.", "Through the Section 504 program, USDA makes loans and grants to very low-income homeowners (those with incomes at or below 50% of area median income) for home repairs or improvements, or to remove health and safety hazards. (The program is codified at 42 U.S.C. \u00a71474.) The Section 504 grants may be available to homeowners who are age 62 or older. Depending on the cost of the repairs and the income of the elderly homeowner, the owner may be eligible either for a grant that would cover the full cost, or for some combination of a loan and grant. To qualify for a grant, the elderly homeowner must be unable to repay the full cost of the repairs. In FY2017, USDA provided about 3,400 Section 504 loans for a total of about $20 million and about 4,800 grants for a total of about $29 million.", "(For more information about rural housing programs, see CRS Report RL31837, An Overview of USDA Rural Development Programs , by Tadlock Cowan.) "], "subsections": []}, {"section_title": "Federal Home Loan Banks' Affordable Housing and Community Investment Programs", "paragraphs": ["The Federal Home Loan Banks (FHLB; the Banks) were created in 1932 by the Federal Home Loan Bank Act (P.L. 72-304) to serve as lenders to savings and loan associations, which at the time made the majority of home mortgage loans. The Banks were established to ensure the liquidity of these associations, and today lend money to commercial banks, credit unions, and insurance companies in addition to savings and loan associations. The FHLB System includes eleven regional wholesale Banks and an Office of Finance. Each Bank is a separate legal entity, cooperatively owned by its member financial institutions, and has its own management, employees, and board of directors. Each Bank is assigned a distinct geographic area. ", "The FHLB System is a government-sponsored enterprise (GSE). As a GSE, a Bank receives certain privileges, such as an exemption from particular taxes, to assist it in carrying out its mission, and it is also required to engage in required activities to support affordable housing. ", "Each of the Banks is required annually to contribute 10% of its net income toward an Affordable Housing Program (AHP). (The program is codified at 12 U.S.C. \u00a71430. Regulations are at 12 C.F.R. Part 1291.) Through the AHP, the Banks provide grants and subsidized loans for rental and owner-occupied housing for very low- and low-income households. Each Bank may set aside up to the greater of 35% of its AHP funds or $4.5 million per year to help low- and moderate-income households purchase homes by providing grants for down payment or closing cost assistance or other costs related to buying or rehabilitating a home. At least one-third of the amount set aside for homeownership assistance must be used for first-time homebuyers or rehabilitation of owner-occupied housing, with a maximum per-household grant amount that may be adjusted annually to account for changes in home prices. ", "Each of the Banks also operates a Community Investment Program (CIP). (The program is codified at 12 U.S.C. \u00a71430. Regulations are at 12 C.F.R. Part 952.) Through the CIP, the Banks offer advances to member financial institutions at discounted interest rates to fund rental and owner-occupied housing for households at or below 115% of area median income, as well as other community development activities. "], "subsections": []}, {"section_title": "Capital Magnet Fund", "paragraphs": ["The Capital Magnet Fund (CMF) was created in the Housing and Economic Recovery Act of 2008 (HERA, P.L. 110-289 ) and is administered by the Department of the Treasury's Community Development Financial Institutions (CDFI) Fund. (The program is codified at 12 U.S.C. \u00a74569.) The CMF provides competitive grant funds to CDFIs or eligible nonprofit organizations to use to finance affordable housing and certain related community development activities. ", "CMF funds can be used for either rental housing or homeownership, but they must primarily benefit low-income households. The CMF is meant to leverage other sources of funding, and eligible activities are supposed to leverage at least 10 times the CMF award amount from other sources. Eligible forms of assistance that grantees can provide with CMF funds include capitalizing loan loss reserves or revolving loan funds and providing risk-sharing loans or loan guarantees, among other things.", "Like the Housing Trust Fund, described earlier in this report, the CMF is funded through contributions from the government-sponsored enterprises Fannie Mae and Freddie Mac rather than through appropriations. Although the CMF was created in 2008, the first contributions were not transferred to it until 2016 due to concerns about Fannie Mae's and Freddie Mac's financial situations. (For more information on the CMF and CDFIs in general, see CRS Report R42770, Community Development Financial Institutions (CDFI) Fund: Programs and Policy Issues , by Sean Lowry.) "], "subsections": []}, {"section_title": "Mortgage Interest Deduction", "paragraphs": ["Homeownership promotion has generally taken two forms: government assistance in the financing of home purchases, and tax preferences favoring homeowners. One of the largest tax benefits for homeowners is the mortgage interest deduction. It allows homeowners to deduct the interest paid on their mortgage (subject to caps) from their taxable income, thus reducing their tax liability. The deduction benefits those households that own homes, have a mortgage on which they pay interest, have federal income tax liability, and for whom itemized deductions exceed the standard deduction (note that the vast majority of tax filers take the standard deduction). It is not targeted to lower-income households. In FY2018, the Joint Committee on Taxation estimated that the mortgage interest deduction would result in a $33.7 billion tax expenditure. (For more information about the mortgage interest deduction, see CRS Report R41596, The Mortgage Interest and Property Tax Deductions: Analysis and Options , by Mark P. Keightley.)"], "subsections": []}]}]}, {"section_title": "Issues and Trends in Housing Assistance Programs", "paragraphs": [], "subsections": [{"section_title": "Incidence of Housing Problems", "paragraphs": ["When the federal housing assistance programs began in the 1930s, the nation was considered to be ill-housed. The Housing Act of 1937 identified an \"acute shortage of decent, safe, and sanitary dwellings.\" Thanks in part to stricter building codes and standards, most housing in the United States today is decent, safe, and sanitary. Although some units are still considered substandard, the greatest housing problem today is perceived to be affordability. Housing is considered \"affordable\" if it costs no more than 30% of a household's income. Households that pay half or more of their income toward their housing costs are considered severely cost burdened; households that pay between 30% and 50% are considered moderately cost burdened. According to data from the Census Bureau's American Community Survey, 18.5 million households were severely cost burdened and 19.6 million households were moderately cost burdened in 2016. ", "Public policy is generally most concerned with the housing affordability problems of the lowest-income families, because high housing costs may prevent these families from meeting their other basic needs. The American Community Survey data show that in 2016, 70% of households with annual income below $15,000 were severely cost burdened (compared to 64% in 2001), and 33% of households with annual income between $15,000 and $29,999 were severely cost burdened (compared to 25% in 2001). ", "HUD must report to Congress periodically on the incidence of \"worst case\" housing needs, which are defined as occurring when unassisted renters with very low incomes (at or below 50% of area median income) pay more than half of their income for housing costs or live in severely substandard housing. In a 2017 report, HUD found that roughly 8.3 million renter households (7% of all households) had worst case housing needs in 2015. This represented an increase compared to 2013, when 7.7 million renter households (6.7% of all households) had worst case housing needs; a decrease from 2011, when 8.5 million renter households had worst case needs; and a nearly 41% increase since 2007, when 5.9 million renter households had worst case needs. Prior to 2005, the percentage of households with worst case housing needs had remained relatively steady\u2014roughly 5% of all households\u2014since HUD began reporting on worst case needs in 1991. ", "The vast majority of households with worst case housing needs are severely cost burdened but live in standard housing. For example, in 2015 about 95.6% of households with worst case housing needs experienced cost burdens only. About 1.8% of households had worst case housing needs solely because they lived in substandard housing, while another 2.6% experienced both conditions. "], "subsections": []}, {"section_title": "Characteristics of Families Receiving Assistance", "paragraphs": ["Public housing, Section 8 vouchers, and the project-based Section 8 rental assistance programs combined serve roughly 4 million households and can be considered the primary housing assistance programs for low-income families. These three forms of assistance are similar in many ways. They all target assistance to extremely low-income families, require families to pay 30% of their incomes toward rent, and generally have long waiting lists for assistance. However, they vary in terms of their evolution, the structure of their benefit (a portable voucher versus a housing unit), and their administration (PHA versus private owner).", "The similarities and differences in the programs themselves result in similarities and differences in the characteristics of the households they serve. Table 14 provides household characteristics data for participants in the tenant-based Section 8 voucher program, the public housing program, and the project-based Section 8 rental assistance program.", "The tenant-based Section 8 voucher program serves more single, female-headed households with children than do the public housing program or project-based programs, although they are not a majority of those served by the program. Based on 2017 HUD data, 40% of voucher households were households with children headed by females, compared to 34% of public housing households and 25% of project-based households. The project-based Section 8 program primarily serves families headed by persons who are elderly or disabled, which account for over three-fourths (81%) of all households served in the program. This is not surprising given that owners of project-based housing may designate entire properties for elderly or disabled households. In addition, units of Section 202 housing for the elderly that were developed during the 1970s and 1980s were subsidized with project-based Section 8 rental assistance. Public housing and the Section 8 voucher program each also have a large majority of households (71% and 61%, respectively) where the head or spouse is elderly or disabled. ", "HUD reports the race and ethnicity of the head of household as non-Hispanic white, non-Hispanic black, Hispanic, non-Hispanic Asian or Pacific Islander, and non-Hispanic Native American. In the Section 8 voucher program and public housing, households headed by non-Hispanic blacks make up the largest share (48% and 43%, respectively). In the project-based Section 8 program, households headed by non-Hispanic whites are the largest share (42%), with households headed by non-Hispanic blacks making up 34% of the total. Between 15% and 21% of households served across the three programs have heads of household who identify their ethnicity as Hispanic, with public housing having the largest share. ", "The rules governing the three main housing assistance programs require that they serve households that are low-income (income at or below 80% of area median income). However, with the targeting required in these programs, many households that are served have very low or extremely low incomes (at or below 50% or 30% of area median income, respectively). As an example, in 2018 the national median income was $71,900, meaning that low income would be considered to be at or below $57,500; very low income, $35,950; and extremely low income, $21,550. The majority of households served in each of the three programs have incomes at or below $14,999. The percentage of households with incomes at or below this level is 63% in the Section 8 voucher program, 65% in public housing, and 70% in project-based Section 8 rental assistance."], "subsections": []}, {"section_title": "The Federal Government's Role in Directly Subsidizing Affordable Rental Housing", "paragraphs": ["Beginning in the 1980s, the federal government decreased its role in the creation of assisted housing. This occurred in several ways. Congress ceased funding new construction under the project-based Section 8 program, which from its enactment in 1974 had subsidized hundreds of thousands of units of assisted housing. This left very few active programs in which HUD supported the development of physical housing units. Between 1976 and 1982, the federal housing programs produced more than 1 million units of subsidized housing. In the following years, however, annual production was around 25,000 new subsidized units. Around the time that federal housing production was declining, Congress created two programs\u2014the Treasury Department's Low Income Housing Tax Credit (LIHTC) program and HUD's HOME Investment Partnerships program\u2014that gave a good deal of control over decisions regarding housing policy and development to state and local governments. These programs, particularly the LIHTC, have been used by states and localities to create hundreds of thousands of units of affordable housing.", "The federal government's decision to take a lesser role in the development of housing has had several consequences. First, state and local governments have taken on an increased role in providing affordable housing and establishing priorities in their communities. Second, due to a reduction in the number of new affordable housing units that are created each year, the need to preserve existing affordable housing units has taken on a new importance. A third consequence is the need for multiple streams of funding other than federal grants in order both to support the creation of new affordable housing units and to preserve existing units. These three consequences are discussed more fully below.", "First, with the advent of both the LIHTC program and the HOME program, states and localities were able to prioritize and develop housing using a larger and more flexible pool of federal funds. Until that point, states helped finance mortgage loans and affordable rental housing through their Housing Finance Agencies, but the states' roles were limited by the amount of funds available.", "In the LIHTC program, states develop plans in which they may set aside a certain percentage of tax credits for populations such as homeless individuals or persons with disabilities. They may also decide to use tax credits to preserve existing housing and/or build new housing. Funds that states receive from the HOME program may be used for the construction of new rental housing and rental assistance for low-income households. A potential drawback of these programs is their inability, on their own, broadly to reach the neediest households. For example, in an LIHTC development, at least 20% of units must be affordable to households at or below 50% of area median income, or 40% of units must be affordable to households at or below 60% of area median income. More recently, properties have been allowed to adopt an \"income-averaging\" approach that allows them to serve a mix of higher-income families if they also serve lower-income families, as long as it results in an average of 40% of units being occupied by households with incomes that average 60% or below of area median income. Many of the older HUD programs constructed housing that was affordable to households at or below 30% of area median income\u2014those considered extremely low-income. Often these households cannot afford units in LIHTC properties without rental subsidies, such as Section 8 vouchers.", "Another way some states and local governments support affordable housing is through establishment of their own housing trust funds. These trust funds use dedicated funding sources such as document recording fees or real estate transfer taxes to create a pool of funds for affordable housing. By using a dedicated source of financing, trust funds may not be as subject to the vicissitudes of state budgets as are other means of funding housing development. States and local communities also support affordable housing through inclusionary zoning. Through this method, housing developers are expected to dedicate a percentage of units they build as affordable housing. In exchange, states or local communities give developers incentives that allow them to expand or speed up the pace of development. Some of the incentives include density bonuses or zoning variances that allow developers to build larger facilities than they would be able to under existing zoning regulations, as well as expedited approval of building permits.", "A second consequence of the decreased role of the federal government in the production of affordable housing units is the increased pressure to maintain the affordability of existing units. Many HUD subsidized units that were developed in the 1960s and 1970s through programs such as Section 236 and Section 221(d)(3), as well as those units that received project-based Section 8 rental assistance, are no longer available to low-income households. At the time the properties were developed, building owners entered into contracts with HUD in which they agreed to maintain affordability for a certain number of years. The duration of these contracts varied; depending on the federal program, these contracts, or \"use restrictions,\" may last between 15 years (the LIHTC program, although states may adopt longer use restrictions) and 50 years (early Section 202 developments). Over time, these contracts have begun to expire, property owners have chosen to pay off their mortgages early and end the use restrictions, or mortgages have matured and their accompanying use restrictions have ended. When any of these events occur, owners may have the option to charge market-rate rents for the units, potentially making them unaffordable for current tenants. The term used to refer to efforts to maintain the affordability of these housing units is \"affordable housing preservation.\" ", "Congress has attempted to enact laws that would preserve affordable housing units; however, due to the temporary nature of some of the measures, preservation remains a concern. Congress first enacted legislation to help preserve affordable rental housing in 1987. The Emergency Low-Income Housing Preservation Act (ELIHPA), enacted as part of the Housing and Community Development Act of 1987 ( P.L. 100-242 ), was a temporary measure that prevented owners of Section 236 and Section 221(d)(3) properties from prepaying their mortgages unless certain conditions were met, including permission from HUD. In 1990, the Low-Income Housing Preservation and Resident Homeownership Act (LIHPRHA), enacted as part of the Cranston-Gonzalez National Affordable Housing Act ( P.L. 101-625 ), continued the ELIHPA conditions required for prepayment, and also offered incentives to owners to maintain affordability. However, six years after LIHPRHA was enacted, Congress reinstated the right of owners to prepay their mortgages without prior HUD permission (see P.L. 104-134 ). Two years later, in FY1998, Congress stopped providing funding to HUD for preservation incentives to owners under LIHPRHA, effectively ending the LIHPRHA program (see H.Rept. 105-175 ). Another effort to preserve affordable housing was enacted as part of the Multifamily Assisted Housing Reform and Accountability Act (MAHRA, P.L. 105-65 ). Through this effort, HUD restructures the debt of building owners while at the same time renegotiating their rental assistance contracts. Unlike ELIHPA and LIHPRHA, MAHRA is still in effect.", "A third consequence of the decreased federal role in the production of affordable housing is the need for low-income housing developers to bring together multiple funding streams in order to build a development. When the federal government first began to subsidize the production of affordable housing, in many cases the funds appropriated for housing programs were sufficient to construct or rehabilitate the affordable units without the need for funds from the private financial markets. Over the years, however, federal programs that provide grants for the construction of multifamily housing for low-income households have become a smaller portion of the government's housing portfolio. At the same time, the grants themselves have become a smaller portion of the total amount needed to support the development of affordable housing. As a result, it has become necessary for developers to turn to multiple sources of financing, including LIHTCs, tax exempt bonds, and state or local housing trust funds. In addition, it is often necessary for building owners to seek rent subsidies through programs like Section 8 and HOME to make renting to very low- or extremely low-income households feasible. The interactions among these various financing streams can be complex, and putting together a development plan may require the expertise of housing finance professionals."], "subsections": []}, {"section_title": "The Shift to Tenant-Based Assistance", "paragraphs": ["Over time, the number of Section 8 vouchers provided and funded by the federal government has grown, while the number housing units it directly subsidizes\u2014through project-based Section 8 rental assistance and public housing\u2014has declined. This change from project-based assistance to tenant-based assistance is due, in part, to Congress's decision to expand the voucher program by creating new vouchers after new construction in the project-based Section 8 program and public housing program had been halted. Some of these were general purpose vouchers, available to any eligible family, and some were special purpose vouchers, targeted to special populations such as families transitioning from welfare to work and homeless veterans.", "This shift is also due, in part, to declines in the number of project-based assistance and public housing units. As previously noted in this report, the project-based rental assistance contracts between private landlords and HUD began expiring in the 1980s. When these contracts expire, private property owners can either renew their contracts with HUD (typically on an annual or five-year basis) or leave the program. When property owners leave the program, their tenants typically receive Section 8 vouchers\u2014referred to as tenant protection vouchers. Since the mid-1990s, when public housing units are demolished or sold, PHAs are not required to replace each lost unit with a new public housing unit. Instead, displaced families who are not relocated to other public housing units are provided with tenant-protection vouchers.", "Also contributing to the decline in public housing units is the Rental Assistance Demonstration (RAD) program, enacted as part of the FY2012 Consolidated Appropriations Act ( P.L. 112-55 ). Through RAD, PHAs may, with HUD's approval, remove their public housing properties from the public housing program and convert the funds they receive through the public housing operating and capital funds to either project-based Section 8 rental assistance or project-based vouchers. As noted earlier, HUD is currently authorized to transition up to nearly half of the current stock of public housing to a form of Section 8 via RAD.", "The shift from project-based assistance to tenant-based assistance has several implications for families. Vouchers offer portability, which, for some residents of public or other assisted housing, may mean the ability to move out of a troubled community to a community with new opportunities. However, there is debate over whether voucher portability leads to economic or social mobility. Early research on mobility showed promise that families\u2014particularly, low-income black families\u2014that moved from heavily poverty- and minority-concentrated public housing neighborhoods to more economically and racially integrated neighborhoods using vouchers could see improved employment and child outcomes. Subsequent mobility research showed mixed results, although the most recent research has further supported the idea that neighborhood effects can be powerful for young children. There is also some evidence that, for families accustomed to living in public housing, the transition to the private rental market with a voucher can be difficult without counseling and other supports, which may not be provided consistently. Finally, there is evidence that the portability option offered by vouchers is not utilized fully by families to access areas of opportunity. This may be due in part to families' preferences, but it also may be due to structural barriers in the program and/or in local rental markets, such as the maximum value of the voucher relative to rents in opportunity areas and landlord willingness to participate in the program. "], "subsections": []}, {"section_title": "Supporting Homeownership", "paragraphs": ["Since the 1930s, the federal government has engaged in various activities that provide support for homeownership. The specific types of support provided, and the policy rationales for that support, have evolved over the decades. Currently, the federal government provides support for homeownership through a variety of programs and activities, many of which are described in this report. Some of these programs and activities benefit a broad range of homebuyers (e.g., the favorable tax treatment of homeownership, secondary market institutions that support the mortgage market) while others focus specifically on homebuyers who face certain barriers to homeownership (e.g., federal mortgage insurance and guaranty programs, grant programs that can be used for down payment or closing cost assistance). While not all of these existing programs and initiatives were established specifically with the intention of promoting homeownership, many policymakers have come to view the programs and activities as important for helping households access affordable financing to purchase a home.", "In recent decades, federal efforts related to homeownership have also included a focus on reducing disparities in homeownership rates. Homeownership rates vary based on a number of demographic and geographic factors, but large and long-standing gaps in homeownership rates by race and ethnicity have been a particular area of concern, in part out of recognition of federal policies that explicitly contributed to these disparities. Many Presidents in recent decades have expressed support for the concept of specifically increasing homeownership rates, particularly among minority groups who have traditionally been less likely to be homeowners. Generally, these proposals involved little new federal funding, but sought to rally the private sector to use existing programs to reach some specified target. ", "The severe downturn in U.S. housing and mortgage markets that began around 2007 resulted in increased mortgage foreclosure rates and steep declines in home equity in many parts of the country. It also led to a pronounced drop in the overall homeownership rate and further widened the gap in homeownership rates between white and black householders, in particular. As of 2017, the Census Bureau reported a homeownership rate of 63.9%, down from a peak of 69% in 2004. The homeownership rate for non-Hispanic white householders (72.3%) is 30 percentage points higher than it is for black householders (42.3%). (In comparison, in 2001 the homeownership rate for non-Hispanic white householders was about 27 percentage points higher than it was for black householders: 74.3% compared to 47.7%.) Hispanics, who can be of any race, had a homeownership rate of 46.2% in 2017, about 26 percentage points lower than the rate for non-Hispanic white households. ", "The housing market turmoil and its aftermath have raised a variety of questions about the appropriate role of the federal government in supporting homeownership going forward, including how best to balance the perceived benefits of homeownership with its possible risks. Many policymakers believe that federal policy should continue to support activities that help provide access to homeownership, especially for creditworthy households who may otherwise have difficulty becoming homeowners. However, recent experience has reduced the focus on specifically attempting to increase homeownership rates to a particular target and underscored the importance of ensuring that homeownership is not just attainable, but also sustainable over the long term. "], "subsections": []}]}, {"section_title": "Data", "paragraphs": ["The following tables present data on federal spending (outlays) on selected housing assistance programs as well as data on the number of rent-assisted units, since 1980."], "subsections": [{"section_title": "Spending", "paragraphs": [" Table 15 presents spending, or outlays, for selected housing assistance programs, in both real and nominal dollars. This table does not include any spending information related to loan commitments or obligations, nor does it include tax expenditures or expenditures from non-appropriated sources (such as the National Housing Trust Fund). ", "As can be seen in Table 15 , outlays for the selected programs have increased, in both real and nominal dollars (a 449% increase in nominal dollars, a 108% increase in real dollars), over the more than three decades presented. "], "subsections": []}, {"section_title": "Rental Assistance Units", "paragraphs": [" Table 16 and Figure 1 present the total number of units eligible for payment /households served under selected rental assistance programs from FY1980 to FY2016. The rental assistance programs reflected in these data are a subset of a group of housing assistance programs for which spending data are presented in Table 15 . ", "As shown, units/households in the rental assistance programs has grown by 66% over the more than three decades presented. Most of that growth happened in the 1980s and early 1990s. Since the early 1990s, the number of units eligible for payment has gone up and down from year to year, with an overall decline in units from FY2001 to FY2009. HUD stopped publishing \"units eligible for payment\" data after FY2009. Beginning with FY2010, the data shown reflect HUD's report of the number of households served by various HUD programs, taken from their annual performance reports. Between FY2010 and FY2016, there was some modest and uneven growth in the number of assisted households, with increases in vouchers offsetting decreases in other forms of assistance.", " Table 16 also helps to illustrate the trend away from public housing and other housing assistance toward rental assistance (e.g., Section 8 vouchers) discussed earlier in this report. The number of units assisted under the other housing assistance programs has been on the decline since the Nixon moratorium in the 1970s. For many of those units, once the family leaves the program, it receives a voucher. In the case of public housing, the number of units continued to increase until the mid-1990s, as contracted units became available. Since the mid-1990s, through the HOPE VI program and other authority, PHAs have been demolishing and disposing of many of their public housing developments. Some replacement public housing units have been built in their place, but many of the units were replaced with Section 8 vouchers."], "subsections": []}]}]}}
{"id": "96-647", "title": "Water Infrastructure Financing: History of EPA Appropriations", "released_date": "2019-04-10T00:00:00", "summary": ["The principal federal program to aid municipal wastewater treatment plant construction is authorized in the Clean Water Act (CWA). Established as a grant program in 1972, it now capitalizes state loan programs through the clean water state revolving loan fund (CWSRF) program. Since FY1972, appropriations have totaled $98 billion.", "In 1996, Congress amended the Safe Drinking Water Act (SDWA, P.L. 104-182) to authorize a similar state loan program for drinking water to help systems finance projects needed to comply with drinking water regulations and to protect public health. Since FY1997, appropriations for the drinking water state revolving loan fund (DWSRF) program have totaled $23 billion.", "The U.S. Environmental Protection Agency (EPA) administers both SRF programs, which annually distribute funds to the states for implementation. Funding amounts are specified in the State and Tribal Assistance Grants (STAG) account of EPA annual appropriations acts. The combined appropriations for wastewater and drinking water infrastructure assistance have represented 25%-32% of total funds appropriated to EPA in recent years.", "Prior to CWA amendments in 1987 (P.L. 100-4), Congress provided wastewater grant funding directly to municipalities. The federal share of project costs was generally 55%; state and local governments were responsible for the remaining 45%. The 1987 amendments replaced this grant program with the SRF program. Local communities are now often responsible for 100% of project costs, rather than 45%, as they are required to repay loans to states. The greater financial burden of the act's loan program on some cities has caused some to seek continued grant funding.", "Although the CWSRF and DWSRF have largely functioned as loan programs, both allow the implementing state agency to provide \"additional subsidization\" under certain conditions. Since its amendments in 1996, the SDWA has authorized states to use up to 30% of their DWSRF capitalization grants to provide additional assistance, such as forgiveness of loan principal or negative interest rate loans, to help disadvantaged communities. America's Water Infrastructure Act of 2018 (AWIA; P.L. 115-270) increased this proportion to 35% while conditionally requiring states to use at least 6% of their capitalization grants for these purposes.", "Congress amended the CWA in 2014, adding similar provisions to the CWSRF program. In addition, appropriations acts in recent years have required states to use minimum percentages of their allotted SRF grants to provide additional subsidization.", "Final full-year appropriations were enacted as part of the Consolidated Appropriations Act, FY2019 (P.L. 116-6), on February 15, 2019. The act provided $1.694 billion for the CWSRF and $1.163 billion for the DWSRF program, nearly identical to the FY2018 appropriations. The FY0219 act provided $68 million for the WIFIA program, a $5 million increase from the FY2018 appropriation.", "Compared to the FY2019 appropriation levels, the Trump Administration's FY2020 budget request proposes to decrease the appropriations for the CWSRF, DWSRF, and WIFIA programs by 34%, 26%, and 63%, respectively."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Clean Water Act (CWA) authorizes the principal federal program to aid municipal wastewater treatment plant construction and related eligible activities. Congress established this program in the Federal Water Pollution Control Act Amendments of 1972 (P.L. 92-500) (although prior versions of the act had authorized less ambitious grants assistance since 1956). Title II of P.L. 92-500 authorized grants to states for wastewater treatment plant construction under a program administered by the Environmental Protection Agency (EPA). Federal funds were provided through annual appropriations under a state-by-state allocation formula contained in the act itself. States used their allotments to make grants to cities to build or upgrade wastewater treatment plants, supporting the overall objectives of the act: restoring and maintaining the chemical, physical, and biological integrity of the nation's waters. The federal share of project costs, originally 75% under P.L. 92-500, was reduced to 55% in 1981.", "By the mid-1980s, there was considerable policy debate between Congress and the Administration over the future of the act's construction grants program and, in particular, the appropriate federal role in funding municipal water infrastructure projects. Through FY1984, Congress had appropriated nearly $41 billion under this program, representing the largest nonmilitary public works programs since the Interstate Highway System. The grants program was a target of budget cuts in the Reagan Administration, which sought to redirect budgetary priorities in part to sort out the appropriate roles of federal, state, and local governments in a number of domestic policy areas, including water pollution control. The Administration's rationale included several points:", "The original intent of the program to address the backlog of sewage treatment needs had been virtually eliminated by the mid-1980s. Most remaining projects (such as small, rural systems) were believed to pose little environmental threat and were not appropriate federal responsibilities. State and local governments, in the Administration's view, were fully capable of running construction programs and have a clear responsibility to construct treatment capacity to meet environmental objectives that were primarily established by states.", "Thus, the Reagan Administration sought a phaseout of the act's construction grants program by 1990. Many states and localities supported the idea of phasing out the grants program, since many were critical of what they viewed as burdensome rules and regulations that accompanied the federal grant money. However, they sought a longer transition and ample flexibility to set up long-term financing to promote state and local self-sufficiency.", "Congress's response to this debate was contained in 1987 amendments to the act ( P.L. 100-4 , the Water Quality Act of 1987). It authorized $18 billion over nine years for sewage treatment plant construction, through a combination of the Title II grants program and a new State Water Pollution Control Revolving Funds program\u2014hereinafter the clean water state revolving fund (CWSRF) program. Under the new program, in CWA Title VI, federal grants would be provided as seed money for state-administered loans to build sewage treatment plants and, eventually, other water quality projects. Cities, in turn, would repay loans to the state, enabling a phaseout of federal involvement while the state built up a source of capital for future investments. Under the amendments, the CWSRF program was phased in beginning in FY1989 (in FY1989 and FY1990, appropriations were split equally between Title II and Title VI grants) and entirely replaced the previous Title II program in FY1991. The intention was that states would have flexibility to set priorities and administer funding, while federal aid would end after FY1994.", "The CWSRF authorizations for appropriations provided in the 1987 amendments expired in FY1994, but pressure to extend federal funding has continued, in part because, although Congress has appropriated $98 billion in CWA Title II and Title VI wastewater infrastructure assistance since 1972, funding needs remain high: According to the most recent formal estimate by EPA and states (prepared in 2016), an additional $271 billion nationwide is needed over the next 20 years for all types of projects eligible for funding under the act. Congress has continued to appropriate funds, and continued to assist states and localities in meeting wastewater infrastructure needs and complying with CWA requirements.", "In 1996, Congress established a parallel program under the Safe Drinking Water Act (SDWA) to help communities finance projects needed to comply with federal drinking water regulations. Funding support for drinking water occurred for several reasons. First, until the 1980s, the number of drinking water regulations was fairly small, and public water systems often did not need to make large investments in treatment technologies to meet those regulations. Second, good quality drinking water traditionally has been available to many communities at relatively low cost. By comparison, essentially all communities have had to construct or upgrade sewage treatment facilities to meet the requirements of the CWA.", "Over time, drinking water circumstances changed, as communities grew, and commercial, industrial, agricultural, and residential land-uses became more concentrated, thus resulting in more contaminants reaching drinking water sources. Moreover, as the number of federal drinking water standards has increased, many communities have found that their water may not be as good as once thought and that additional treatment technologies are required to meet the new standards and protect public health. Between 1986 and 1996, for example, the number of regulated drinking water contaminants grew from 23 to 83, and EPA and the states expressed concern that many of the nation's 52,000 small community water systems were likely to lack the financial capacity to meet the rising costs of SDWA compliance. According to the most recent EPA-state survey (issued in 2018), future funding needs for projects to treat and deliver public drinking water supplies in the United States are $473 billion over the next 20 years.", "Congress responded to these concerns by enacting the 1996 SDWA Amendments ( P.L. 104-182 ), which authorized a drinking water state revolving loan fund (DWSRF) program to help systems finance projects needed to comply with SDWA regulations and to protect public health. This program, fashioned after the CWSRF program, authorizes EPA to make grants to states to capitalize DWSRFs which states then use to make loans to public water systems. Appropriations for the program were authorized at $599 million for FY1994 and $1 billion annually for FY1995 through FY2003. ", "Capitalization grants for DWSRF programs were provided for the first time in FY1997. Although the authorizations for appropriations expired in FY2003, Congress continued to provide funding for the program in annual appropriations, totaling $23 billion through FY2019. America's Water Infrastructure Act of 2018 (AWIA; P.L. 115-270 ), enacted on October 23, 2018, reauthorized appropriations for the DWSRF at $1.17 billion in FY2019, $1.30 billion in FY2020, and $1.95 billion in FY2021. ", "The first section of this report includes a table that summarizes the history of appropriations for both wastewater and drinking water infrastructure programs. The next section discusses several historical developments in water infrastructure funding. The last section contains a detailed chronology of congressional activity regarding wastewater and drinking water infrastructure funding for each fiscal year since the 1987 CWA amendments."], "subsections": []}, {"section_title": "Summary of Water Infrastructure Appropriations", "paragraphs": [" Table 1 summarizes funding for the wastewater and drinking infrastructure programs since enactment of the 1987 CWA amendments ( P.L. 100-4 ). Funding for these EPA programs is contained in the appropriations act providing funds for the Department of the Interior, Environment, and Related Agencies. Within the portion of the bill that funds EPA, wastewater treatment assistance was first specified in an account called Construction Grants, which was subsequently renamed State Revolving Funds/Construction Grants, and then renamed Water Infrastructure. Since FY1996, this account has been titled State and Tribal Assistance Grants (STAG). ", "The STAG account now includes all water infrastructure funds and management grants provided to assist states in implementing air quality, water quality, and other media-specific environmental programs. The FY1996 appropriation was the first to include both water infrastructure and other state environmental grants; the latter previously were included in EPA's general program management account. Amounts shown in Table 1 include funds for CWA Title II grants, CWSRF grants, drinking water SRF grants, special project grants (discussed below), and the Water Infrastructure Finance and Innovation Act (WIFIA) program. Congress first provided appropriations to cover the subsidy costs of this program in FY2017, as discussed in the detailed chronology section below. ", " Table 1 does not include funds for consolidated state environmental management grants. These grants include funding for a wide range of environmental programs, which have changed over time. In recent years, the categorical grants have included funding for water, air, and waste programs. The categorical grant programs most closely related to water infrastructure issues include grants for states' nonpoint source management programs (CWA Section 319) and states' pollution control programs (CWA Section 106). Funding levels for the environmental management state grants are discussed below in the appropriations chronology section.", "As an additional comparison, Figure 1 illustrates the total EPA water infrastructure appropriations (for clean water and drinking water assistance combined) between FY1986 and FY2019 in both nominal dollars (i.e., not adjusted for inflation) and constant (2018) dollars (i.e., adjusted for inflation). "], "subsections": []}, {"section_title": "Historical Funding Developments", "paragraphs": ["This section discusses several historical developments of note regarding appropriations for EPA's water infrastructure programs. "], "subsections": [{"section_title": "Special Purpose Project Grants", "paragraphs": ["The practice of earmarking a portion of the construction grants/SRF account for specific wastewater treatment and other water quality projects began with the FY1989 appropriations. The practice increased to the point of representing a significant portion of appropriated funds (31% of the total water infrastructure appropriation in FY1994, for example, but less in subsequent years: 2.5% in FY2009 and 5% in FY2010). The number of projects receiving these earmarked funds also increased: from 4 in FY1989 to 319 in FY2010. Beginning in FY2000, the larger total number of earmarked projects resulted in more communities receiving such grants, but at the same time receiving smaller amounts of funds. Thus, while a few communities received individual earmarked awards of $1 million or more, the average size of earmarked grants shrank: $18.1 million in FY1995, $4.9 million in FY1999, $1.08 million in FY2006, and $586,000 in FY2010. (Conference reports on the individual appropriations bills, noted in the later discussion in this report, provide some detail on projects funded in this manner.) The effective result of earmarking was to reduce the amount of funds provided to states to capitalize their SRF programs. Between FY1989 and FY2010, approximately 10% of the total water infrastructure appropriations ($7.4 billion) went to earmarked project grants.", "Interest groups representing state water quality program managers and administrators of infrastructure financing programs criticized the practice of earmarked appropriations. They contended that earmarking undermined the intended purpose of the state funds\u2014promoting water quality improvements nationwide. Many state officials preferred funds to be allocated more equitably, not based on what they viewed largely as political considerations, and they preferred for state environmental and financing officials to retain responsibility to set actual spending priorities. Further, they argued that the special projects funding would diminish the level of seed funding to SRFs, delaying the time when SRFs would be financially self-sufficient.", "The practice of earmarking was criticized because designated projects were arguably receiving more favorable treatment than other communities' projects: They were generally eligible for 55% federal grants (and were not required to repay 100% of the funded project cost, as is the case with a loan through an SRF), and the practice circumvented the standard process of states determining the priority by which projects will receive funding. It also meant that the projects were generally not reviewed by the CWA authorizing committees. This was especially true after FY1992, when special purpose grant funding was designated for types of projects not authorized in the Clean Water Act or the Safe Drinking Water Act.", "Members of Congress intervened for a specific community for a number of reasons. In some cases, the communities may have been unsuccessful in seeking state approval to fund the project under an SRF loan or other program. For some, the cost of a project financed through a state loan was deemed unacceptably high, because repaying the loan would result in increased user fees that ratepayers felt would have been unduly burdensome. ", "In the early years of this congressional practice, special purpose grant funding originated in the House version of the EPA appropriations bill, while the Senate, for the most part, resisted earmarking by rejecting or reducing amounts and projects included in House-passed legislation. Therefore, special purpose grant funding on several occasions was an issue during the House-Senate conference on the appropriations bill. Beginning in FY1999, however, both the House and Senate proposed earmarked projects in their respective versions of the EPA appropriations bill, with the final total number of projects and dollar amounts determined by conferees.", "The Clean Water Act Title II grants program effectively ended when authorizations for it expired after FY1990. One result of earmarking special purpose grants in appropriations bills was to continue grants as a method of funding wastewater treatment construction long after FY1990. This practice led Congress to provide EPA grants for drinking water system projects, which had not previously been available. However, as discussed in the next section, general opposition to congressional earmarking stopped the practice after FY2011."], "subsections": []}, {"section_title": "Local Cost Share on Special Purpose Grants", "paragraphs": ["The federal percentage share and local match required on special purpose grants varied depending on the project and the year of funding. For example, in the early projects (FY1989), the 1987 CWA amendments specified the federal cost shares, which ranged from 75% to 85%. In FY1992 and FY1993, the appropriations acts specified that funds were provided \"as grants under title II,\" resulting in a requirement for local communities to provide a 45% share of project costs. After FY1993, the appropriations acts themselves were the authority for the special purpose projects grants. In the FY1995 appropriation bill, which also directed allocation of funds appropriated in FY1994 to several needy cities, Congress addressed the issue of federal and local cost shares in report language accompanying the bill, but not in the appropriation act itself.", "The conferees are in agreement that the agency should work with the grant recipients on appropriate cost-share arrangements. It is the conferees' expectation that the agency will apply the 45% local cost share requirement under Title II of the Clean Water Act in most cases.", "In the FY1996 appropriations, both the act and accompanying reports were silent on federal/local cost share and applicability of Title II requirements. Because of that, EPA officials planned to require only a 5% local match for most of the special purpose grants in that bill, which is the standard matching requirement for other EPA noninfrastructure grants. Under the agency's rules, the local match could include in-kind services, as well as funding toward the project.", "In the FY1997 appropriations, Congress included report language as it had in FY1995 concerning federal and local cost share requirements.", "The conferees are in agreement that the Agency should work with the grant recipients on appropriate cost-share agreements and to that end the conferees direct the Agency to develop a standard cost-share consistent with fiscal year 1995.", "The FY1998 and FY1999 appropriations included neither bill nor report language on this point. However, language in the House and Senate Appropriations Committees' reports on the FY1998 and FY1999 bills directed EPA to work with grant recipients on appropriate cost-share arrangements.", "For FY2000, Congress included explicit report language concerning the local match.", "The conferees agree that the $331,650,000 provided to communities or other entities for construction of water and wastewater treatment facilities and for groundwater protection infrastructure shall be accompanied by a cost-share requirement whereby 45 percent of a project's cost is to be the responsibility of the community or entity consistent with long-standing guidelines for the Agency. These guidelines also offer flexibility in the application of the cost-share requirement for those few circumstances when meeting the 45 percent requirement is not possible.", "Similar report language concerning local cost-share requirements accompanied the conference reports on the appropriations bills from FY2001 through FY2005. Beginning with FY2004, Congress specified in the appropriations legislation that the local share of project costs shall be not less than 45%. Similarly, beginning with the FY2003 appropriations legislation, Congress also specified that, except for those limited instances in which an applicant meets the criteria for a waiver of the cost-share requirement, the earmarked grant shall provide no more than 55% of an individual project's cost, regardless of the amount appropriated.", "The practice of earmarking special project water infrastructure grants continued to change. First, in FY2007, Congress applied a one-year moratorium on earmarks in all appropriations bills. For the next three years, special project grants were allowed in appropriations bills\u2014including EPA's\u2014but again in FY2011, no special project funding was provided for congressional projects. Following the 2010 midterm election and during subsequent months while FY2011 appropriations were under consideration (discussed below), the general issue of congressional earmarks of specific projects had become highly controversial because of the overall growing number of them, concern over the influence of special interests on spending decisions, and lack of congressional oversight. In response, President Obama said he would veto any legislation containing earmarks, the House extended the ban on earmarks under the Republican Conferences rules, and the chairman of the Senate Appropriations Committee announced a moratorium on earmarks for FY2011 and FY2012. Thus, the FY2011 full-year appropriations measure contained no congressionally directed special project funds for water infrastructure projects in the EPA STAG account. However, it did include funds requested by the President: $10 million for Alaska Native Villages and $10 million for U.S.-Mexico border projects. ", "The FY2012 full-year appropriations measure also contained no special project funding in the EPA STAG account. The FY2012 bill did include funds for Alaska Native and Rural Villages ($10 million) and for U.S.-Mexico border projects ($5 million).", "The moratorium on congressional earmarks has continued. The FY2013 full-year appropriations measure ( P.L. 113-6 ) contained no special project funding in the STAG account. As with other recent bills, however, it did include funds for Alaska Native and Rural Villages ($9.5 million) and for U.S.-Mexico border projects ($4.7 million). Similarly, the moratorium on earmarks continued in FY2014 and FY2015; P.L. 113-76 contained no special project funding in the STAG account for FY2014, but did include funds for Alaska Native and Rural Villages ($10 million) and for U.S.-Mexico border projects ($5 million). The FY2015 funding bill, P.L. 113-235 , was the same as FY2014. The FY2016, FY2017, and FY2018 appropriations acts ( P.L. 114-113 , P.L. 115-31 , and P.L. 115-141 , respectively) included $20 million for Alaska Native and Rural Villages and $10 million for U.S.-Mexico border projects. The FY2019 appropriations act provided $25 million for Alaska Native and Rural Villages and $15 million for U.S.-Mexico border projects. President Trump's FY2020 budget request proposes to eliminate funding for the U.S.-Mexico border program and decrease funding for the Alaska Native and Rural Villages to $3 million."], "subsections": []}, {"section_title": "Additional Subsidization", "paragraphs": ["Although the CWSRF and DWSRF have largely functioned as loan programs, both allow the implementing state agency to provide \"additional subsidization\" under certain conditions. Since its amendments in 1996, the SDWA has authorized states to use up to 30% of their DWSRF capitalization grants to provide additional assistance, such as forgiveness of loan principal or negative interest rate loans, to help disadvantaged communities (as determined by the state). In 2018, AWIA increased that percentage to 35% and conditionally required states to provide at least 6% of their annual grants as additional subsidization. ", "Congress amended the CWA in 2014, adding similar provisions to the CWSRF program. ", "In addition, appropriations acts in recent years have required states to use minimum percentages of their allotted funds to provide additional subsidization. This trend began with the American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ), which required states to use at least 50% of their funds to \"provide additional subsidization to eligible recipients in the form of forgiveness of principal, negative interest loans or grants or any combination of these.\" Subsequent appropriation acts have included similar conditions, with varying percentages of subsidization. The FY2016, FY2017, FY2018, and FY2019 appropriations acts included an identical condition, requiring 10% of the CWSRF grants and 20% of the DWSRF grants to be used \"to provide additional subsidy to eligible recipients in the form of forgiveness of principal, negative interest loans, or grants (or any combination of these).\""], "subsections": []}, {"section_title": "Noninfrastructure Grants", "paragraphs": ["The 1987 CWA amendments authorized federal grants to assist states in implementing programs to manage water pollution from nonpoint sources such as farm and urban areas, construction, forestry, and mining sites. Because of competing demands for funding, it was difficult for Congress to fund this grant program and other water quality initiatives in the 1987 act. Appropriators did fund Section 319 grants in EPA's general program management account (abatement, control, and compliance) in FY1990, FY1991, and FY1992 but well below authorized levels. In the FY1993 act, appropriators moved funding into the SRF/construction grants account, thereby providing a degree of protection from competing priorities. In FY1996, Congress included all state grants for management of environmental programs in a single consolidated grants appropriation. In doing so, Congress endorsed a Clinton Administration proposal for a more flexible approach to state grants, a key element of EPA's efforts to improve the federal-state partnership in environmental programs. In more recent years, Congress has provided specific funding amounts for certain programs within the categorical grants appropriation. "], "subsections": []}]}, {"section_title": "Appropriations Chronology", "paragraphs": ["This section summarizes, in chronological order, congressional activity to fund items in the STAG account since the 1987 CWA amendments."], "subsections": [{"section_title": "FY1986, FY1987", "paragraphs": ["The authorization period covered by P.L. 100-4 was FY1986-FY1994. By the time the amendments were enacted, FY1986 was over, as was a portion of FY1987. Thus, appropriations for those two years only indirectly reflected the policy and program changes for later years that were contained in P.L. 100-4 . For FY1986, Congress appropriated a total of $1.8 billion, consisting of $600 million approved in December 1985 (while Congress was beginning to debate reauthorization legislation that eventually was enacted as P.L. 100-4 in January 1987) and $1.2 billion more in July 1986.", "For FY1987, while debate on CWA reauthorization continued, President Reagan requested $2.0 billion, consistent with his legislative proposal to terminate the grants program by FY1990. In October 1986, Congress appropriated $2.4 billion ( P.L. 99-500 / P.L. 99-591 ). However, only $1.2 billion of that amount was released immediately, pending enactment of a reauthorization bill, which was then in conference. Following enactment of the Water Quality Act of 1987, remaining FY1987 funds were released as part of a supplemental appropriations bill ( P.L. 100-71 ). Conferees on that measure agreed, however, to shift $39 million of the remaining unreleased grant funds to other priority water quality activities authorized in P.L. 100-4 . The final total of construction grant monies was $2.361 billion."], "subsections": []}, {"section_title": "FY1988", "paragraphs": ["For FY1988 the President again requested $2.0 billion. In December 1987, Congress approved legislation providing FY1988 appropriations ( P.L. 100-202 , the omnibus continuing resolution to fund EPA and other federal agencies). In it, Congress appropriated $2.304 billion for construction grants. Final action on the EPA budget and other funding bills had been delayed by budget-cutting talks between Congress and the White House. Reduced construction grants funding was one of many spending cuts required to implement a congressional-White House \"summit agreement\" on the budget. The final construction grants appropriation was less than funding levels that had been included in separate versions of a bill passed by the House and Senate before the budget summit, $2.4 billion."], "subsections": []}, {"section_title": "FY1989", "paragraphs": ["For FY1989, President Reagan requested $1.5 billion, or 35% below FY1988 appropriations and 37.5% less than the authorized level of $2.4 billion for FY1989. In separate versions of an EPA appropriations bill, the House and Senate voted to provide $1.95 billion and $2.1 billion respectively. The final figure, in P.L. 100-404 , was $1.95 billion, which included $68 million for special projects in four states. Thus, the actual amount provided for grants was $1.882 billion. That total was divided equally between the previous Title II grants program and new Title VI SRF program, as provided in the authorizing language of P.L. 100-4 .", "The FY1989 legislation was the first to include earmarking of funds for specified projects or grants in EPA's construction grants account, an action that continued in subsequent years, as discussed above. All of the projects funded in the 1989 legislation were ones that had been authorized in provisions of the Water Quality Act of 1987 (WQA, P.L. 100-4 ). The designated projects were in Boston (authorized in Section 513 of the WQA, to fund the Boston Harbor wastewater treatment project), San Diego/Tijuana (Section 510, to fund an international sewage treatment project needed because of the flow of raw sewage from Tijuana, Mexico, across the border), Des Moines, IA (Section 515, for sewage treatment plant construction), and Oakwood Beach/Redhook, NY (Section 512 of the WQA, to relocate natural gas distribution facilities that were near wastewater treatment works in New York City)."], "subsections": []}, {"section_title": "FY1990", "paragraphs": ["For FY1990, President Reagan's budget requested $1.2 billion in wastewater treatment assistance, or 50% less than the authorized level and 38.5% less than the FY1989 enacted amount of $1.95 billion. Further, the Reagan budget proposed that the $1.2 billion consist of $800 million in Title VI monies and $400 million in Title II grants, contrary to provisions of the CWA directing that appropriations be equally divided between the two grant programs, as in FY1989. President Bush's revised FY1990 budget, presented in March 1989, made no changes from the Reagan budget in this area.", "In acting on this request, Congress agreed to provide $2.05 billion, including $46 million for three special projects (Boston, San Diego/Tijuana, and Des Moines), leaving a total of $1.002 billion each for Titles II and VI ( P.L. 101-144 ). Title II funds were reduced by $6.8 million, however, due to funds earmarked for a specific project in South Carolina. Although these amounts were appropriated, all funds in the bill were reduced by 1.55% (or, a $31.8 million reduction from the construction grants account) to provide funds for the federal government's antidrug program.", "Final FY1990 appropriations were altered again by passage of the FY1990 Budget Reconciliation measure and implementation of the Balanced Budget and Emergency Deficit Control Act (the Gramm-Rudman-Hollings Act), which established procedures to reduce budget deficits annually, resulting in a zero deficit by 1993. For each fiscal year that the deficit was estimated to exceed maximum targets established in law, an automatic spending reduction procedure was triggered to eliminate deficits in excess of the targets through \"sequestration,\" or permanent cancellation of budgetary resources.", "Thus, to meet budget reduction mandates and, in particular, deficit reduction targets under the Balanced Budget and Emergency Deficit Control Act (the Gramm-Rudman-Hollings Act), additional funding cuts were included in P.L. 101-239 , the Budget Reconciliation Act of 1989, affecting construction grants funding and all other accounts not exempted from Gramm-Rudman procedures. P.L. 101-239 provided that the \"sequestration\" procedures under the Gramm-Rudman-Hollings Act would be allowed to apply for a portion of FY1990 (for 130 days, or 35.6% of the year), providing an additional automatic spending reduction in EPA and other agencies' programs subject to the act.", "As a result of these reductions, funding for wastewater treatment aid in FY1990 totaled $1.98 billion, or $30 million more than in FY1989. The total included $53 million for special projects in San Diego, Boston, Des Moines, and Honea Path/Ware Shoals, SC, $960 million for Title II grants, and $967 million for Title VI grants. The combined reductions amounted to 3.4% less than the amount agreed to by conferees on P.L. 101-144 (i.e., $2.05 billion), before subtracting funds for antidrug programs and accounting for effects of the Gramm-Rudman partial-year sequester."], "subsections": []}, {"section_title": "FY1991", "paragraphs": ["For FY1991, President Bush requested $1.6 billion in funding for wastewater treatment assistance. This total included $15.4 million for the San Diego project authorized in Section 510 of the Water Quality Act of 1987, to fund construction of an international sewage treatment project. The remainder, $1.584 billion, would be only for capitalization grants under Title VI of the act, as the 1987 legislation provides for no new Title II grants after FY1990.", "In acting on EPA's appropriations for FY1991 ( P.L. 101-507 ), Congress agreed to provide $2.1 billion in wastewater treatment assistance. Beginning in FY1991, all appropriated funds are utilized for capitalization grants under Title VI of the act (as provided in the Water Quality Act of 1987); funding for the traditional Title II grants program was no longer available.", "The enacted level included several earmarkings: $15.7 million for San Diego (Section 510 of the WQA), $20 million for Boston Harbor (Section 513 of the WQA), and $16.5 million for a new Water Quality Cooperative Agreement Program under Section 104(b)(3) of the act. The President's budget had requested $16.5 million to support state permitting, enforcement, and water quality management activities, especially to offset the reductions in aid to states due to elimination of state management setasides from the previous Title II construction grants program. Congress agreed to the level requested, but provided it as a portion of the wastewater treatment appropriation, rather than as part of EPA's general program management appropriation, as in the President's request. As a result of these earmarkings, $2.048 billion was provided for Title VI grants."], "subsections": []}, {"section_title": "FY1992", "paragraphs": ["For FY1992, President Bush requested $1.9 billion in wastewater treatment funds, or $100 million more than authorized under the Water Quality Act of 1987 for Title VI grants in FY1992. However, out of the $1.9 billion total, the President's request sought $1.5 billion for Title VI SRF grants and $400 million as grants under the expired Title II construction grants program for the following coastal cities: Boston, San Diego, New York, Los Angeles, and Seattle. Two of the five designated projects had been authorized in the 1987 CWA amendments; the other three did not have explicit statutory authorization. Also, $16.5 million was requested for Water Quality Cooperative Agreement grants to the states.", "In acting on the request in November 1991, Congress provided total wastewater funds of $2.4 billion ( P.L. 102-139 ). The total was allocated as follows:", "$1,948.5 million for SRF capitalization grants, $16.5 million for Section 104(b)(3) grants, $49 million for the special project in San Diego-Tijuana (Section 510 of the Water Quality Act), $46 million to the Rouge River (MI) National Wet Weather Demonstration Project, and $340 million as construction grants under title II of the Clean Water Act for several other special projects\u2014the Back River Wastewater Treatment Plant (Baltimore), Maryland, the Boston Harbor project, New York City, Los Angeles, San Diego (a wastewater reclamation project), and Seattle.", "This appropriation bill was the first to include special purpose grant funding for several projects not specifically authorized in the Clean Water Act or amendments to that law."], "subsections": []}, {"section_title": "FY1993", "paragraphs": ["For FY1993, President Bush requested $2.484 billion for state revolving funds/construction grants (now called the water infrastructure account). The requested total included $340 million to be targeted for 55% construction grants to six communities: Boston, New York, Los Angeles, San Diego, Seattle, and Baltimore. In addition, the President requested that $130 million be directed toward a Mexican Border Initiative, consisting of $65 million for construction of the international treatment plant at San Diego (to address the Tijuana sewage problem), $15 million for projects at Nogales, AZ, and New River, CA, and $50 million as 50% grants for colonias in Texas. The President also requested $16.5 million for Section 104(b)(3) grants. Along with these special project and grant amounts, the request sought $2.014 billion for SRF assistance.", "Final action on FY1993 funding occurred on September 25, 1992 ( P.L. 102-389 ). It provided an appropriation of $2.55 billion, but $622.5 million of this amount was reserved for special projects and other grants. The bill provided $50 million in CWA Section 319 grants and $16.5 million in Section 104(b)(3) grants out of the SRF amount. It included $556 million for the following special purpose grants: the international treatment plant at San Diego (Tijuana\u2014Section 510 of the WQA, with bill language capping funding for that project at $239.4 million), plus projects in Boston; New York; Los Angeles; San Diego; Seattle; Rouge River, MI; Baltimore; Ocean County, NJ; Atlanta; and for colonias in Texas, Arizona, and New Mexico. The final SRF grant amount under the bill was $1.928 billion.", "Early in 1993, President Clinton requested that Congress approve \"economic stimulus and investment\" spending, in the form of supplemental FY1993 appropriations. Both his original proposal and a subsequent modified proposal included additional SRF grant funds, but neither of the bills enacted by Congress in response to these requests ( P.L. 103-24 , P.L. 103-50 ) provided additional SRF funds."], "subsections": []}, {"section_title": "FY1994", "paragraphs": ["For FY1994, the Clinton Administration requested $2.047 billion for water infrastructure. The funds in this request were $1.198 billion to capitalize State Revolving Funds, $150 million for Mexican border project grants, and $100 million for a single hardship community (Boston). The request also included $599 million to capitalize new state drinking water revolving funds.", "The final version of the FY1994 legislation ( P.L. 103-124 ) provided $2.477 billion for water infrastructure/state revolving funds. Of this total amount, $599 million was to be reserved for drinking water SRFs, if authorization legislation were enacted; $80 million was for Section 319 grants; $22 million was for Section 104(b)(3) grants; and $58 million was for Tijuana/San Diego\u2014Section 510 of the WQA. This resulted in an appropriation of $1.718 billion for clean water SRFs.", "In addition, the final bill provided that $500 million be used to support water infrastructure financing in economically distressed/hardship communities. Under the bill, these funds were not available for spending until May 31, 1994, and were set aside until projects were authorized in the CWA for this purpose.", "Thus, the bill as enacted provided $1.218 billion immediately for clean water SRFs, with the expectation that $500 million more would be available for financing hardship community projects after May 31, 1994."], "subsections": []}, {"section_title": "FY1995", "paragraphs": ["For FY1995, President Clinton requested $2.65 billion for water infrastructure consisting of $1.6 billion for CWA SRFs, $100 million for Section 319 nonpoint source management grants to states, $52.5 million for a grant to San Diego for a wastewater project pursuant to Section 510 of the WQA, $47.5 million for other Mexican border projects, $50 million to the state of Texas for colonias projects, and $100 million for grants under Title II for needy cities (intended for Boston). The request included $700 million for drinking water SRFs, pending enactment of authorizing legislation. The President's budget also requested $21.5 million for Section 104(b)(3) grants/cooperative agreements.", "Final agreement on FY1995 funding was contained in P.L. 103-327 , enacted in September 1994, which provided a total of $2.962 billion for water infrastructure financing. Of the total, $22.5 million was for grants under Section 104(b), $100 million for Section 319 grants, $70 million for Public Water System Supervision program grants (grants to states under the Safe Drinking Water Act to support state implementation of delegated drinking water programs), $52.5 million for the Section 510 project in San Diego, and $700 million for drinking water SRFs (contingent upon enactment of authorization legislation).", "The remaining $2.017 billion was for CWA projects. Of this amount, $1.235 billion was for clean water SRF grants to states under Title VI of the CWA. The remaining $781.8 million (39% of this amount, 26% of the total appropriation) was designated for 45 specific, named projects in 22 states. The earmarked amounts ranged in size from $200,000 for Southern Fulton County, PA, to $100 million for the city of Boston.", "Finally, the conferees included bill language concerning release of the $500 million in FY1994 needy cities money (because the authorizing committees of Congress had not acted on legislation to authorize specific projects, as had been intended in P.L. 103-124 ) as follows:", "$150 million to Boston, $50 million for colonias in Texas, $10 million for colonias in New Mexico, $70 million for a New York City wastewater reclamation facility, $85 million for the Rouge River project, $50 million for the city of Los Angeles, $50 million for the county of Los Angeles, and $35 million for Seattle, WA."], "subsections": []}, {"section_title": "FY1996", "paragraphs": ["In February 1995, President Clinton submitted the Administration's budget request for FY1996. It requested $2.365 billion for water infrastructure funding consisting of $1.6 billion for clean water state revolving funds, $500 million for drinking water state revolving funds, $150 million to support Mexico border projects under the U.S.-Mexican Border Environmental Initiative and NAFTA, and $100 million for special need/economically distressed communities (not specified in the request, but presumed to be intended for Boston), plus $15 million for water infrastructure needs in Alaska Native Villages.", "In February 1995, congressional appropriations committees began considering legislation to rescind previously appropriated FY1995 funds, as part of overall efforts by the 104 th Congress to shape the budget and federal spending. These efforts resulted in passage in July 1995 of P.L. 104-19 , which rescinded $16.5 billion in total funds from a number of departments, agencies, and programs. In the water infrastructure area, it rescinded $1,077,200,000 from prior year appropriations including the $3.2 million for a project in New Jersey (it had mistakenly been funded twice in P.L. 103-327 ) and $1,074,000,000 in other water infrastructure appropriations. Although not contained in bill language, it was understood that the larger rescinded amount consisted solely of drinking water SRF funds (leaving $1.235 billion for FY1995 clean water SRF funds, $778.6 million for earmarked wastewater projects\u2014both amounts as originally appropriated\u2014and $225 million in FY1994-FY1995 drinking water SRF funds that had not yet been authorized).", "It took until April 1996 for Congress and the Administration to reach agreement on FY1996 appropriations for EPA as part of omnibus legislation ( P.L. 104-134 ) that consolidated five appropriations bills not yet enacted due to disagreements over funding levels and policy. Agreement came as the fiscal year was more than one-half over.", "Before that, however, congressional conferees reached agreement in November 1995 on FY1996 legislation for EPA ( H.R. 2099 , H.Rept. 104-353 ). Conferees agreed to provide $2.323 billion for a new account titled State and Tribal Assistance Grants (STAG), consisting of infrastructure assistance and state environmental management grants for 16 categorical programs that had previously been funded in a separate appropriations account. The total included $1.125 billion for clean water SRF grants, $275 million in new appropriations for drinking water SRF grants, and $265 million for special purpose project grants. Report language provided that the drinking water SRF money also included $225 million from FY1995 appropriations rescinded in P.L. 104-19 . The drinking water SRF money would be available upon enactment of SDWA reauthorization legislation that would authorize a drinking water SRF program; otherwise, it would revert to clean water SRF grants if the SDWA were not reauthorized by June 30, 1996. This made the total potentially available for drinking water SRF grants $500 million.", "The November 1995 agreement on H.R. 2099 included $658 million for consolidated state environmental grants. In doing so, Congress endorsed an Administration proposal for a more flexible approach to state grants, a key element of EPA's efforts to improve the federal-state partnership in environmental programs. In lieu of traditional grants provided separately to support state air, water, hazardous waste, and other programs, consolidated grants are intended to reduce administrative burdens and improve environmental performance by allowing states and tribes to target funds to meet their specific needs and integrate their environmental programs, as appropriate. Congress's support was described in accompanying report language.", "The conferees agree that Performance Partnership Grants are an important step to reducing the burden and increasing the flexibility that state and tribal governments need to manage and implement their environmental protection programs. This is an opportunity to use limited resources in the most effective manner, yet at the same time, produce the results-oriented environmental performance necessary to address the most pressing concerns while still achieving a clean environment.", "Including state environmental grants in the same account with water infrastructure assistance reflected Congress's support for enhancing the ability of states and localities to implement environmental programs flexibly and support for EPA's ability to provide block grants to states and Indian tribes.", "The H.R. 2099 conference agreement also included legislative riders intended to limit or prohibit EPA from spending money to implement several environmental programs. The Administration opposed the riders. The House and Senate approved this bill in December, but President Clinton vetoed it, because of objections to spending and policy aspects of the legislation.", "With no full-year funding in place from October 1995 to April 1996, EPA and the programs it administers (along with agencies and departments covered by four other appropriations bills not yet enacted) were subject to a series of short-term continuing resolutions, some lasting only a day, some lasting several weeks. In March 1996, the House and Senate began consideration of an omnibus appropriations bill to fund EPA and other agencies for the remainder of FY1996, finally reaching agreement in April on a bill ( H.R. 3019 ) enacted as P.L. 104-134 . Congress agreed to provide $2.813 billion for a new account titled STAG, consisting of state grants and infrastructure assistance, as in H.R. 2099 , the vetoed measure. The total was divided as follows:", "$1.3485 billion for clean water SRF grants (including $50 million for impoverished communities), $500 million in new appropriations for drinking water SRF grants, $150 million for Mexico-border project grants and Texas colonias , as requested, $15 million for Alaska Native Villages, as requested, $141.5 million for 17 special purpose project grants, and $658 million for consolidated state environmental grants, which states could use to administer a range of delegated environmental programs.", "Report language provided that the drinking water SRF money also included $225 million from FY1995 appropriations that remained available after the rescissions in P.L. 104-19 , for a total of $725 million. The drinking water SRF money was contingent upon enactment of legislation authorizing an SRF program under the Safe Drinking Water Act by August 1, 1996; otherwise, it would revert to clean water SRF grants.", "The final agreement ( P.L. 104-134 ) included several of the legislative riders from previous versions of the legislation, including riders related to drinking water and clean air, but dropped others strongly opposed by the Administration.", "Funds within the STAG account were redistributed after Congress passed Safe Drinking Water Act amendments in August 1996. Enactment of the amendments ( P.L. 104-182 ) occurred on August 6\u2014after the August 1 deadline in P.L. 104-134 that would have made $725 million available for drinking water SRF grants in FY1996. Thus, the previously appropriated $725 million reverted to clean water SRF grants, making the FY1996 total for those grants $2.0735 billion."], "subsections": []}, {"section_title": "FY1997", "paragraphs": ["While debate over the FY1996 appropriations was continuing, in March 1996, President Clinton submitted the details of a FY1997 budget. For water infrastructure and state and tribal assistance, the request totaled $2.852 billion consisting of", "$1.35 billion for clean water SRF grants (the request included language that would authorize states the discretion to use this SRF money either for clean water or drinking water projects), $165 million for U.S.-Mexico border projects, Texas colonias , and Alaska Native Village projects, $113 million for needy cities projects, $550 million for drinking water infrastructure SRF funding, contingent upon enactment of authorizing legislation, and $674 million for state performance partnership consolidated management grants, which could address a range of environmental programs.", "In response to the Administration's request, in June 1996 the House approved legislation ( H.R. 3666 ) providing FY1997 funding for EPA. In the STAG account, the House approved $2.768 billion, $84 million less than requested but on the whole endorsing the budget request. The total provided the following: $1.35 billion for clean water SRF grants, as requested; $165 million, as requested, for U.S.-Mexico Border projects, Texas colonias , and Alaska Native Village projects; $450 million for drinking water SRF funding, contingent upon authorization; $674 million for state performance partnership consolidated management grants; and $129 million for seven special purpose grants.", "In July, the Senate Appropriations Committee reported its version of H.R. 3666 . The committee approved $2.815 billion for this account, consisting of $1.426 billion for clean water SRF grants; $550 million for drinking water SRF grants, contingent upon authorization; $165 million, as requested, for U.S.-Mexico border projects, Texas colonias , and Alaska Native Village projects; and $674 million for consolidated state grants. The committee rejected the provision of the House-passed bill providing $129 million for special purpose grants, including funds for Boston and New Orleans requested by the Administration, saying in report language that earmarking is provided at the expense of state revolving funds and does not represent an equitable distribution of grant funds ( S.Rept. 104-318 ).", "During debate on H.R. 3666 in September, the Senate adopted an amendment to reduce the FY1997 appropriation for clean water SRF grants by $725 million in order to fund the new drinking water SRF program. This action was intended to restore funds to the drinking water program which had been lost when Safe Drinking Water Act amendments were not enacted by August 1, 1996. Thus, the Senate-passed bill provided $701 million for clean water SRF grants and $1.275 billion for drinking water SRF grants for FY1997. Other amounts in the account were unchanged.", "The conference report on H.R. 3666 ( H.Rept. 104-812 ) was approved by the House and Senate on September 24, 1996. President Clinton signed the bill September 26 ( P.L. 104-204 ). It reflected compromise of the House- and Senate-passed bills, providing the following amounts within the STAG account ($2.875 billion total):", "$625 million for clean water SRF grants, $1.275 billion for drinking water SRF grants, $165 million, as requested, for U.S.-Mexico border projects, Texas colonias , and Alaska Native Village projects, $136 million for 18 specific wastewater, water, and groundwater project grants (the 7 specified in House-passed H.R. 3666 , plus 11 more; the bill provided funds for each of the needy cities projects requested by the Administration, but in lesser amounts), and $674 million for consolidated state grants, which could support implementation of a range of environmental programs.", "The allocation of clean water and drinking water SRF grants was consistent with the Senate's action to restore funds to the drinking water program after enactment of the Safe Drinking Water Act amendments in early August.", "Subsequently, Congress passed a FY1997 Omnibus Consolidated Appropriations bill to cover agencies and departments for which full-year funding had not been enacted by October 1, 1996 ( P.L. 104-208 ). It included additional funding for several EPA programs, as well as $35 million (on top of $40 million provided in P.L. 104-204 ) for the Boston Harbor cleanup project."], "subsections": []}, {"section_title": "FY1998", "paragraphs": ["President Clinton presented the Administration's budget request for FY1998 in February 1997. For water infrastructure and state and tribal assistance, the request totaled $2.793 billion, consisting of $1.075 billion for clean water SRF grants, $725 million for drinking water SRF grants, $715 million for consolidated state environmental grants, and $278 million for special project grants.", "House and Senate committees began activities on FY1998 funding bills somewhat late in 1997, due to prolonged negotiations between Congress and the President over a five-year budget plan to achieve a balanced budget by 2002. After appropriators took up the FY1998 funding bills in June, the House passed EPA's appropriation in H.R. 2158 ( H.Rept. 105-175 ) on July 15. In the STAG account, the House approved $3.019 billion, consisting of $1.25 billion for clean water SRF grants ($600 million more than FY1997 levels and $175 million more than requested by the President), $750 million for drinking water SRF grants ($425 million less than FY1997 levels, but $25 million more than the request), $750 million for state environmental assistance grants, and $269 million for special projects. The latter included funds for the special projects requested by the Administration but at reduced levels ($149 million total for these projects), plus $120 million in special project grants for 21 other communities.", "The Senate passed a separate version of an FY1998 appropriations bill on July 22, 1997 ( S. 1034 , S.Rept. 105-53 ). It provided $3.047 billion for the STAG account, consisting of $1.35 billion for clean water SRF grants, $725 million for drinking water SRF grants, $725 million for state environmental assistance grants, and $247 million for special project grants. The Senate bill provided the amounts requested by the Administration for U.S.-Mexico border projects, Texas colonias , and Alaska Native Village projects (but no special funds for others requested by the President), plus $82 million for 18 special project grants for other communities identified in report language.", "Conferees reached agreement on FY1998 funding in early October 1997 ( H.R. 2158 , H.Rept. 105-297 ). The final version passed the House on October 8 and passed the Senate on October 9. President Clinton signed the bill October 27 ( P.L. 105-65 ). As enacted, it provided $3.213 billion for the STAG account, consisting of $1.35 billion for clean water SRF grants, $725 million for drinking water SRF grants, $745 million for consolidated state environmental assistance grants (which could address a range of environmental programs), and $393 million for 42 special purpose project and special community need grants for construction of wastewater, water treatment and drinking water facilities, and groundwater protection infrastructure. It included the following amounts for grants requested by the Administration:", "$75 million for U.S.-Mexico border projects, $50 million for Texas colonias , $50 million for Boston Harbor wastewater needs, $10 million for New Orleans, $3 million for Bristol County, MA, and $15 million for Alaska Native Village projects.", "The final bill also provided funds for all of the special purpose projects included in the separate House and Senate versions of the legislation, plus three projects not included in either earlier version.", "Bill language was included in P.L. 105-65 to allow states to cross-collateralize clean water and drinking water SRF funds, that is, to use the combined assets of amounts appropriated to State Revolving Funds as common security for both SRFs, which conferees said is intended to ensure maximum opportunity for states to leverage these funds. Senate committee report language also said that the conference report on the 1996 Safe Drinking Water Act Amendments had stated that bond pooling and similar arrangements were not precluded under that legislation. The appropriations bill language was intended to ensure that EPA does not take an unduly narrow interpretation of this point which would restrict the states' use of SRF funds.", "On November 1, 1997, President Clinton used his authority under the Line Item Veto Act ( P.L. 104-130 ) to cancel six items of discretionary budget authority provided in P.L. 105-65 . The President's authority under this act took effect in the 105 th Congress; thus, this was the first EPA appropriations bill affected by it. The cancelled items included funding for one of the special purpose grants in the bill, $500,000 for new water and sewer lines in an industrial park in McConnellsburg, PA. Reasons for the cancellation, according to the President, were that the project had not been requested by the Administration; it would primarily benefit a private entity and is outside the scope of EPA's usual mission; it is a low priority use of environmental funds; and it would provide funding outside the normal process of allocating funds according to state environmental priorities.", "However, in June 1998, the Supreme Court struck down the Line Item Veto Act as unconstitutional, and in July the Office of Management and Budget announced that funding would be released for 40-plus cancellations made in 1997 under that act (including those cancelled in P.L. 105-65 ) that Congress had not previously overturned. (For additional information, see CRS Report RL33635, Item Veto and Expanded Impoundment Proposals: History and Current Status , by Virginia A. McMurtry.)"], "subsections": []}, {"section_title": "FY1999", "paragraphs": ["President Clinton's budget request for FY1999, presented to Congress in February 1998, requested $2.9 billion for the STAG account, representing 37% of the $7.9 billion total requested for EPA programs. The total included $1.075 billion for clean water SRF grants, $775 million for drinking water SRF grants, $115 million for water infrastructure projects along the U.S.-Mexico border projects and in Alaska Native Villages, $78 million for needy cities projects, and $875 million for consolidated state environmental grants (which could address a range of environmental programs).", "Legislative action on the budget request occurred in mid-1998. Both houses of Congress increased amounts for water infrastructure financing, finding the Administration's request for clean water and drinking water SRF grants, as well as special project funding, not adequate. First, the Senate Appropriations Committee reported its version of an EPA spending bill in June 1998 ( S. 2168 , S.Rept. 105-216 ). This bill, passed by the Senate July 17, provided $3.2 billion for the STAG account, consisting of $1.4 billion for clean water SRF grants, $800 million for drinking water SRF grants, $105 million for U.S.-Mexico and Alaska Native Village projects, $100 million for 39 other special needs infrastructure grants, and $850 million for state performance partnership/categorical grants. As in FY1998, the committee included bill language allowing states to cross-collateralize their clean water and drinking water state revolving funds, making the language explicit for FY1999 and thereafter.", "Second, the House passed its version of EPA's funding bill ( H.R. 4194 , H.Rept. 105-610 ) on July 29. This bill provided $3.2 billion for the STAG account, consisting of $1.25 billion for clean water SRF grants, $775 million for drinking water SRF grants, $70 million for U.S.-Mexico and Alaska Native Village projects, $253.5 million for 49 other special needs infrastructure grants (including nine projects also funded in the Senate bill), and $885 million for state environmental management grants (a 20% increase above FY1998 amounts for these state grants).", "Conferees resolved differences between the two versions in October 1998 ( H.R. 4194 , H.Rept. 105-769 ). The conference agreement provided $3.4 billion for the STAG account, consisting of $1.35 billion for clean water SRF grants, $775 million for drinking water SRF grants, $80 million for U.S.-Mexico and Alaska Native and Rural Village projects, $301.8 million for 80 other special needs project grants, and $880 million for state and tribal environmental program grants (which could address a range of environmental programs). The House and Senate approved the agreement on October 7 and 8, respectively, and President Clinton signed the bill into law on October 21 ( P.L. 105-276 ).", "Additional funding was provided in the Omnibus Consolidated and Supplemental Appropriations Act, FY1999 ( P.L. 105-277 ). This bill, which provided full-year funding for agencies and departments covered by seven separate appropriations measures, directed $20 million more in special needs grants for the Boston Harbor wastewater infrastructure project, on top of $30 million that was included in P.L. 105-276 ."], "subsections": []}, {"section_title": "FY2000", "paragraphs": ["For FY2000, beginning on October 1, 1999, the Administration requested $2.638 billion for water infrastructure assistance and state environmental grants. The total, $370 million less than the FY1999 appropriation for this account, consisted of $800 million for clean water SRF grants, $825 million for drinking water SRF grants, $128 million for Mexican border and special project grants, and $885 million for consolidated state environmental grants (which could address a range of environmental programs).", "The request included one SRF policy issue. The Administration asked the appropriators to grant states the permission to set aside up to 20% of FY2000 clean water SRF monies in the form of grants for local communities to implement nonpoint source pollution and estuary management projects. Under the Clean Water Act, SRFs may only be used to provide loans. Some have argued that some types of water pollution projects which are eligible for SRF funding may not be suitable for loans, as they may not generate revenues which can be used to repay the loan to a state. This new authority, the Administration said, would allow states greater flexibility to address nonpoint pollution problems. Critics of the proposal said that making grants from an SRF would reduce the long-term integrity of a state's fund, since grants would not be repaid.", "Some Members of Congress and stakeholder groups were particularly critical of the budget request for clean water SRF grants, $550 million (40%) less than the FY1999 level. Critics said the request was insufficient to meet the needs of states and localities for clean water infrastructure. In response, EPA acknowledged that several years prior the Clinton Administration had made a commitment to states that the clean water SRF would revolve at $2 billion annually in the year 2005. Because of loan repayments and other factors, EPA said, the overall fund will be revolve at $2 billion per year in the year 2002, even with the 20% grant setaside included in the FY2000 request. According to EPA, the $550 million decrease from 1999 would have only a limited impact on SRFs and would still allow the agency to meet its long-term capitalization goal of providing an average amount of $2 billion in annual assistance.", "The House and Senate passed their respective versions of an EPA appropriations bill ( H.R. 2684 ) in September 1999. The conference committee report resolving differences between the two versions ( H.Rept. 106-379 ) was passed by the House on October 14 and the Senate on October 15 and was signed by the President on October 20 ( P.L. 106-74 ). The final bill provided $7.6 billion overall for EPA programs, including $3.47 billion for the STAG account. Within that account, the bill included $1.35 billion for clean water SRF grants, $820 million for drinking water SRF grants, $885 million for categorical state grants (which generally support state and tribal implementation and could address a range of environmental programs), $80 million for U.S.-Mexico border and Alaska Rural and Native Village projects, and $331.6 million for 141 other special needs water and wastewater grants specified in report language. The final bill did not approve the Administration's request to allow states to use up to 20% of clean water SRF monies as grants for nonpoint pollution and estuary management projects.", "Subsequent to enactment of the EPA funding bill, Congress passed the Consolidated Appropriations Act for FY2000 with funding for five other agencies ( P.L. 106-113 ), which included provisions requiring a government-wide cut of 0.38% in discretionary appropriations. The bill gave the President some flexibility in applying this across-the-board reduction. Details of the reduction were announced at the time of the release of the FY2001 budget. EPA's distribution of the rescission resulted in a total reduction of $16.3 million for 139 of the special needs water and wastewater projects identified in P.L. 106-74 . These projects were reduced 4.9% below enacted levels. The agency did not reduce funds for the two projects that had been included in the President's FY2000 budget request (Bristol County, MA, and New Orleans, LA) or for the United States-Mexico border and the Alaska Rural and Native Villages programs. EPA also reduced funds for the clean water SRF (enacted at $1.35 billion) by 0.3%, for a final funding level of $1.345 billion. The appropriation level was not reduced for the drinking water SRF or consolidated state grants."], "subsections": []}, {"section_title": "FY2001", "paragraphs": ["The President's budget for FY2001 requested a total of $2.9 billion for water infrastructure assistance and state environmental grants. For the second year in a row, President Clinton requested $800 million for the clean water SRF program, a $545 million reduction from the FY2000 level. The request included $825 million for the drinking water SRF program, $100 million for U.S.-Mexico border project grants, $15 million for Alaska Native Villages projects, two needy cities grants totaling $13 million (Bristol County, MA, and New Orleans, LA), plus $1.069 billion for consolidated state environmental grants (which could address a range of environmental programs).", "The budget included a policy request similar to one in the FY2000 budget, which Congress rejected. The FY2001 budget sought flexibility for states to set aside up to 19% of clean water SRF monies in the form of grants for local communities to implement nonpoint source pollution and estuary management projects.", "The House approved its version of EPA's funding bill ( H.R. 4635 , H.Rept. 106-674 ) on June 21, 2000. For the STAG account, H.R. 4635 provided $3.2 billion ($273 million more than requested, but $288 million below the FY2000 level). The total in the STAG account consisted of $1.2 billion for clean water SRF grants, $825 million for drinking water SRF grants, $1.068 billion (the budget request) for categorical state grants, and $85 million for U.S.-Mexico border and Alaska Rural and Native Villages projects. Beyond these, however, the House-passed bill included no funds for other special needs grants.", "The Senate approved its version of the funding bill ( S.Rept. 106-410 ) on October 12, 2000. For the STAG account, the Senate-passed bill provided $3.3 billion, consisting of $1.35 billion for clean water SRF grants, $820 million for drinking water SRF grants, $955 million for categorical state grants, $85 million for U.S.-Mexico border and Alaska Rural and Native Village projects, and $110 million for special needs water and wastewater grants.", "In October, the House and Senate approved EPA's funding bill for FY2001 ( H.Rept. 106-988 ), providing $1.35 billion for clean water SRF grants (the same level enacted for FY2000) and $825 million for drinking water SRF grants. The enacted bill included $110 million in grants for water infrastructure projects in Alaska Rural and Native Villages and U.S.-Mexico border projects and an additional $336 million for 237 other specified project grants throughout the country. The bill also provided $1,008 million for state categorical program grants ($60 million less in total than requested), which states could use to address a range of environmental programs. Total funding for the STAG account was $3.6 billion. Congress disapproved the Administration's policy request concerning use of clean water SRF monies for nonpoint source project grants. President Clinton signed the bill October 27, 2000 ( P.L. 106-377 ).", "Subsequently, in December, Congress provided $21 million more for five more special project water infrastructure grants (in addition to the $336 million in P.L. 106-377 ) as a provision of H.R. 4577 , the FY2001 Consolidated Appropriations Act ( P.L. 106-554 ). Also in that legislation, Congress enacted the Wet Weather Water Quality Act, authorizing a two-year, $1.5 billion grants program to reduce wet weather flows from municipal sewer systems. The provision was included in Section 112, Division B, of P.L. 106-554 ."], "subsections": []}, {"section_title": "FY2002", "paragraphs": ["In April 2001, the Bush Administration presented its budget request for FY2002. The Administration requested a total of $2.1 billion for clean water infrastructure funds, consisting of $823 million for drinking water SRF grants, $850 million for clean water SRF grants (compared with $1.35 billion appropriated for FY2001), and $450 million for the new program of municipal sewer overflow grants under legislation enacted in December, the Wet Weather Water Quality Act. However, that act provided that sewer overflow grants are only available in years when at least $1.35 billion in clean water SRF grants is appropriated. Subsequently, Administration officials said they would request that Congress modify the provision linking new grant funds to at least $1.35 billion in clean water SRF grants. The Bush budget requested no funds for special earmarked grants, except for $75 million to fund projects along the U.S.-Mexico border and $35 million for projects in Alaska Native Villages (both are the same amounts provided in FY2001). In response, some Members of Congress and outside groups criticized the budget request, saying that it did not provide enough support for water infrastructure programs. The President's budget also requested $1.06 billion for state categorical program grants, which generally support state and tribal administration of a range of environmental programs.", "The House passed its version of FY2002 funding for EPA on July 30 ( H.R. 2620 , H.Rept. 107-159 ). The House-passed bill provided a total of $2.4 billion for water infrastructure funds, consisting of $1.2 billion for clean water SRF grants, $850 million for drinking water SRF grants, $200 million for special project grants (individual projects were unspecified in the report accompanying H.R. 2620 ), $75 million for U.S.-Mexico border projects, and $30 million for Alaska Rural and Native Villages. The House bill provided no separate funds for the new wet weather overflow grant program, which the Administration had requested. Including $1.08 billion for state categorical program grants, total STAG account funding in the bill was $3.44 billion, about $150 million higher than the President's request.", "The Senate passed its version of this appropriations bill on August 2 ( S. 1216 , S.Rept. 107-43 ). Like the House, the Senate rejected separate funding for wet weather overflow grants, and the Senate increased clean water SRF grant funding to the FY2001 level. The Senate-passed total for the STAG account was $3.49 billion, including $1.35 billion for clean water SRF grants, $850 million for drinking water SRF grants, $140 million for special needs infrastructure grants specified in accompanying report language, $75 million for U.S.-Mexico border projects, $30 million for Alaska Rural and Native Villages, and $1.03 billion for state categorical program grants.", "Resolution of this and other appropriations bills in fall 2001 was complicated by congressional attention to general economic conditions and responses to the September 11 terrorist attacks on the World Trade Center and the Pentagon. Nevertheless, the House and Senate gave final approval to legislation providing EPA's FY2002 funding ( H.R. 2620 , H.Rept. 107-272 ) on November 8, and President Bush signed the bill on November 26 ( P.L. 107-73 ). The final bill did not include separate funds for the new sewer overflow grant program requested by the Administration, which both the House and Senate had rejected, but it did include $1.35 billion for clean water SRF grants, $850 million for drinking water SRF grants, $344 million for 337 earmarked water infrastructure project grants specified in report language, and the requested $75 million for U.S.-Mexico border projects and $30 million for Alaska Rural and Native Villages. The bill included total STAG funding of $3.7 billion."], "subsections": []}, {"section_title": "FY2003", "paragraphs": ["President Bush presented the Administration's FY2003 budget request in February 2002, asking Congress to appropriate $2.185 billion for EPA's water infrastructure programs (compared with $2.659 billion appropriated for FY2002). The FY2003 request sought $1.212 billion for clean water SRF grants, $850 million for drinking water SRF grants, and $123 million for a limited number of special projects (especially in Alaska Native Villages and in communities on the U.S.-Mexico border). The Administration proposed to eliminate funds for unrequested infrastructure project spending that Congress had earmarked in the FY2002 law, which totaled $344 million. Also, the Administration requested no funds for the municipal sewer overflow grants program enacted in 2000.", "Some Members of Congress criticized the request level for clean water SRF capitalization grants, which was $138 million below the FY2002 enacted amount. In August 2002, the Senate Appropriations Committee approved an FY2003 funding bill for EPA that would provide $1.45 billion for clean water SRF grants, $100 million more than the FY2002 level ( S. 2797 , S.Rept. 107-222 ). In addition, the Senate committee bill included $875 million for drinking water SRF grants, $140 million for special needs infrastructure grants specified in report language, $45 million for Alaska Rural and Native Village project grants, $75 million for U.S.-Mexico border projects, and $1.134 billion for state categorical program grants, which could address a range of environmental programs.", "The House Appropriations Committee approved its version of an FY2003 funding bill with $1.3 billion for the clean water SRF program ( H.R. 5605 , H.Rept. 107-740 ) in October. This bill also included $850 million for drinking water SRF grants, $227.6 million for special needs infrastructure grants enumerated in report language, $35 million for Alaska Rural and Native Village project grants, $75 million for U.S.-Mexico border projects, and $1.173 billion for state categorical program grants, which could address a range of environmental programs. Neither appropriations committee included funds for the sewer overflow grant program authorized in 2000 (the Administration did not request FY2003 funds for these grants).", "Due to complex budgetary disputes during the year, final action did not occur before the 107 th Congress adjourned in November 2002, and it extended into 2003, more than five months after the start of the fiscal year. Congress and the President reached agreement on funding levels for EPA and other nondefense agencies in an omnibus appropriations act ( P.L. 108-7 ; H.J.Res. 2 , H.Rept. 108-10 ), which the President signed on February 20. The EPA portion of the enacted bill included $1.34 billion for clean water SRF grants, $844 million for drinking water SRF grants, and $413 million more for 489 special water infrastructure project grants to individual cities specified in conference report language, plus projects in Alaska Native Villages and communities on the U.S.-Mexico border. It also provided a total of $1.14 billion for categorical state grants, which generally support states and tribal implementation of a range of environmental programs."], "subsections": []}, {"section_title": "FY2004", "paragraphs": ["On February 3, 2003, before completion of the FY2003 appropriations, President Bush submitted his budget request for FY2004. It requested a total of $1.798 billion for water infrastructure funds, consisting of $850 million for clean water SRF grants, $850 million for drinking water SRF grants, and $98 million for priority projects (especially in Alaska Native Villages and in communities on the U.S.-Mexico border). As in previous years, the Administration requested no funds for congressionally earmarked project grants for individual communities. Some Members of Congress and interest groups criticized the request for clean water SRF grants ($490 million below the FY2003 enacted level), but Administration officials responded by saying that the request reflected a commitment to fund this program at the $850 million level through FY2011. Funding at that level and over that long-term period, plus repayments of previous SRF loans made by states, would be expected to increase the revolving levels of the overall program from $2.0 billion to $2.8 billion per year, the Administration said. The President's budget also requested $1.2 billion for categorical state grants, which could address a range of environmental programs.", "On July 25, the House approved H.R. 2861 ( H.Rept. 108-235 ), providing FY2004 appropriations for EPA. As passed, the bill included $1.2 billion for clean water SRF grants, $850 million for drinking water SRF grants, $203 million for earmarked water infrastructure project grants, and $75 million in grants for high-priority projects in Alaska Native Villages and along the U.S.-Mexico border. Senate action on its version of a funding bill for EPA ( S.Rept. 108-143 ) occurred on November 18. The Senate-passed bill provided $1.35 billion for clean water SRF grants, $850 million for drinking water SRF grants, $130 million for targeted infrastructure project grants, plus $95 million in grants for projects in Alaska Native Villages and along the U.S.-Mexico border.", "As with the previous year's appropriations, Congress did not enact legislation providing FY2004 funds for EPA before the beginning of the new fiscal year; thus EPA programs were covered by a series of continuing resolutions (CRs). The last of these CRs ( P.L. 108-135 ) extended FY2003 funding levels through January 31, 2004. On December 8, 2003, the House passed legislation providing full-year funding for EPA and other agencies that lacked enacted appropriations ( H.R. 2673 ). The conference report on this bill ( H.Rept. 108-401 ) provided $1.34 billion for clean water SRF grants, $845 million for drinking water SRF grants, and $425 million in grants for 520 earmarked grants in listed communities, Alaska Native Villages, and U.S.-Mexico border projects. The Senate approved the conference report on January 22, 2004, and President Bush signed the legislation January 23 ( P.L. 108-199 )."], "subsections": []}, {"section_title": "FY2005", "paragraphs": ["The FY2005 EPA appropriation for water infrastructure funds was the lowest total for these programs since FY1997 (the first year in which Congress provided both clean water and drinking water SRF capitalization grants, as well as earmarked project grants). The decline was due primarily to a reduction in funding for the clean water SRF program from an average of $1.35 billion since FY1998 to $1.09 billion.", "President Bush's FY2005 budget, presented February 2, 2004, requested a total of $3.0 billion for water infrastructure assistance and state environmental program grants. It included $850 million for clean water SRF grants, $850 million for drinking water SRF grants, $94 million for priority projects (primarily in Alaska Native Villages and along the U.S.-Mexico border), and $1.25 billion for categorical grants, which could address a range of environmental programs. As in recent budgets, the Administration requested no funds for congressionally earmarked project grants. Anticipating that critics likely would focus on the clean water SRF request ($492 million below the FY2004 level), in its budget documents the Administration said that the request included funding for the clean water SRF at $850 million annually through 2011, which, together with loan repayments, state matches, and other funding sources, would result in a long-term average revolving level of $3.4 billion. Likewise, the budget anticipated funding the drinking water SRF program at the same $850 million annually through 2011, resulting in a long-term average revolving level of $1.2 billion.", "House and Senate Appropriations committees began review of the EPA budget request in March. On September 9, 2004, the House Appropriations Committee reported FY2005 funding for EPA in a bill that included the Administration's requested level of $850 million for clean water SRF grants, $850 million for drinking water SRF grants, and earmarked grants for priority water infrastructure projects totaling $393.4 million ( H.R. 5041 , H.Rept. 108-674 ). On September 21, the Senate Appropriations Committee reported its version of this bill ( S. 2825 , S.Rept. 108-353 ), which included $1.35 billion for clean water SRF grants, $850 million for drinking water SRF grants, and $217 million for earmarked project grants.", "Final action on the FY2005 appropriation did not occur before the start of the fiscal year. On November 20, the House and Senate passed H.R. 4818 ( H.Rept. 108-792 ), the Consolidated Appropriations Act, 2005, an omnibus appropriations bill comprising nine appropriations measures, including funding for EPA. The bill provided total funding for EPA of $8.1 billion, a decrease from the $8.4 billion approved in FY2004, but $340 million more than was requested by the President in February. One of the most controversial items in the final bill was a $251 million decrease for clean water SRF grants from the FY2004 level, although the $1.09 billion total was $241 million more than in the President's budget. The final measure also included $843 million for drinking water SRF capitalization grants; $401.7 million for 669 earmarked grants in listed communities, Alaska Native Villages, and U.S.-Mexico border projects; and $1.14 billion for categorical state grants, which generally support state and tribal administration of a range of environmental programs. The $2.34 billion total for water infrastructure programs and projects was $542 million more than was requested by the President, but $276 million less than Congress appropriated for FY2004. President Bush signed the legislation December 8, 2004 ( P.L. 108-447 )."], "subsections": []}, {"section_title": "FY2006", "paragraphs": ["The FY2006 appropriation for water infrastructure funds marked the second consecutive year in which Congress appropriated less funding for these programs, providing lower levels both for clean water SRF capitalization grants and for earmarked project grants than in FY2005.", "President Bush presented the FY2006 budget request in February 2005. Overall for EPA, it sought 5.6% less than Congress had appropriated for FY2005. The Administration's deepest cuts affecting EPA were proposed for the STAG account. The budget requested $730 million for clean water SRF grants (33% below FY2005 appropriated funding and 45.6% below the FY2004 level), $850 million for drinking water SRF grants (a slight increase from the FY2005 level), $69 million for priority projects (primarily in Alaska Native Villages and along the U.S.-Mexico border), and $1.2 billion for state categorical grants, which could address a range of environmental programs. As in previous years, the Administration requested no funds for congressionally earmarked water infrastructure projects. Advocates for the SRF programs (especially state and local government officials) contended that cuts to the clean water program would impair their ability to carry out needed municipal wastewater treatment plant improvement projects. Administration officials responded that the proposed SRF reductions for FY2006 were because Congress had boosted funds above the FY2005 request level. These officials said that the Administration planned to invest $6.8 billion in the clean water SRF program between FY2004 and FY2011, after which federal funding was expected to end, and the state SRFs were expected to have an annual revolving level of $3.4 billion. If Congress appropriated more than requested in any given year (as occurred in FY2005), they said, that target would be met sooner, leading to reduced requests for the SRF in subsequent years until a planned phaseout in FY2011.", "On May 19, 2005, the House passed H.R. 2361 , providing FY2006 funding for EPA. As passed, it provided $850 million for clean water SRF grants ($120 million more than the President's request), $850 million for drinking water SRF grants, and $269 million for earmarked water infrastructure grants. During debate, the House rejected two amendments to increase clean water SRF funding. On June 29, the Senate passed its version of H.R. 2361 , providing $1.1 billion for clean water SRF grants, $850 million for drinking water SRF grants, and $290 million for earmarked project grants. The House bill required that $100 million of the SRF funding come from balances from expired contracts, grants, and interagency agreements from various EPA appropriation accounts. The Senate bill, in contrast, called for a $58 million rescission of unobligated amounts associated with grants, contracts, and interagency agreements in various accounts, but did not specify that such monies go to SRF funding.", "Conferees resolved differences between the bills ( H.Rept. 109-188 ), and the House and Senate approved the measure in July; the President signed it into law on August 2 ( P.L. 109-54 ). As enacted, the bill provided $900 million for clean water SRF grants; $850 million for drinking water SRF grants; $285 million for 259 earmarked grants in listed communities, Alaska Native Villages, and along the U.S.-Mexico border; and $1.13 billion for categorical state grants, which could address a range of environmental programs. The final bill required an $80 million rescission from expired grants, contracts, and interagency agreements in various EPA accounts (not just the STAG account) not obligated by September 1, 2006. It did not direct the rescinded funds to be applied to the clean water SRF, as proposed by the House. The $2.03 billion total in the bill for EPA water infrastructure programs and projects was $386 million more than was requested by the President, but $301 million less than Congress appropriated for FY2005.", "Further, the funding amounts specified in P.L. 109-54 were reduced slightly. First, a provision of P.L. 109-54 , Section 439, mandated an across-the-board rescission of 0.476% for any discretionary appropriation in that bill. Second, in December 2005 Congress enacted P.L. 109-148 , the FY2006 Department of Defense Appropriations Act, and Section 3801 of that bill mandated a 1% across-the-board rescission for discretionary accounts in any FY2006 appropriation act (except for discretionary authority of the Department of Veterans Affairs). As a result of these two rescissions, the final levels for the STAG account were $887 million for clean water SRF grants; $838 million for drinking water SRF grants; $281 million for 259 earmarked grants in listed communities, Alaska Native Villages, and along the U.S.-Mexico border; and $1.11 billion for categorical state grants, which could address a range of environmental programs. FY2006 EPA water infrastructure programs and projects thus total $2.0 billion.", "On October 28, President Bush requested that Congress rescind $2.3 billion from 55 \"lower-priority federal programs and excess funds,\" including $166 million from clean water SRF monies. In the end, Congress did not endorse the specific request to reduce clean water SRF appropriations. The two rescissions resulting from P.L. 109-54 and P.L. 109-148 totaled a $13.2 million reduction from the $900 million specified in the EPA appropriations act."], "subsections": []}, {"section_title": "FY2007", "paragraphs": ["President Bush presented the Administration's FY2007 budget request in February 2006, asking Congress to appropriate $1.570 billion for EPA's water infrastructure programs. The FY2007 request sought $687.6 million for clean water SRF grants, $841.5 million for drinking water SRF grants, and $40.6 million for special projects in Alaska Native Villages, Puerto Rico, and along the U.S.-Mexico border. When the 109 th Congress adjourned in December 2006, it had not completed action on appropriations legislation to fund EPA (or on nine other appropriations bills covering the majority of domestic discretionary agencies and departments) for the fiscal year that began October 1, 2006, thus carrying over this legislative activity into the 110 th Congress. In December 2006, Congress enacted a continuing resolution, P.L. 109-383 (the third such continuing resolution since the start of the fiscal year on October 1), providing funds for EPA and the other affected agencies and departments until February 15, 2007.", "The President's FY2007 budget request for clean water SRF capitalization grants was 22% less than the FY2006 appropriation for these grants and 37% below the FY2005 funding level. The request for drinking water SRF grants was essentially the same as in recent years ($4 million more than FY2006, $1.7 million less than FY2005). As in recent budgets, the Administration proposed no funding for congressionally designated water infrastructure grants, but, as noted above, it did seek a total of $40.6 million for Administration priority projects. Advocates of the clean water SRF program (especially state and local government officials) again contended, as they have for several recent years, that the cuts would impair their ability to carry out needed municipal wastewater treatment plant improvement projects. Administration officials responded that cuts for the clean water SRF in FY2007 were necessary because Congress boosted funds above the requested level in FY2005 and FY2006.", "On May 18, 2006, the House passed H.R. 5386 ( H.Rept. 109-465 ), providing the requested level of $687.6 million for clean water SRF grants and $841.5 million for drinking water SRF grants. The Senate Appropriations Committee approved the same funding levels for these grant programs when it reported H.R. 5386 on June 29 ( S.Rept. 109-275 ), but the Senate did not act on this measure before the 109 th Congress adjourned in December. Before adjournment, Congress enacted a continuing resolution (CR), P.L. 109-383 (the third such CR since the start of the fiscal year on October 1), providing funds for EPA and the other affected agencies and departments until February 15, 2007. Funding levels provided under this CR followed a \"lowest level\" concept for individual programs; that is, programs were funded at the lowest level under either House-passed FY2007 appropriations, Senate-passed appropriations, or the FY2006 funding. For clean water SRF grants, the resulting appropriation through mid-February was $687.6 million, as in House-passed H.R. 5386 . For drinking water SRF grants, the appropriation level through mid-February was $837.5 million, the FY2006-enacted level. The CR included funds for congressionally earmarked water infrastructure project grants totaling $200 million, as in House-passed H.R. 5386 .", "Returning to these issues in 2007, in mid-February, Congress passed H.J.Res. 20 , a continuing appropriations resolution that provides funding for EPA and the other affected agencies through the end of FY2007. As passed, this full-year resolution held most programs and activities at their FY2006 appropriated levels. However, clean water SRF capitalization grants were one of the few programs that received a funding increase under the resolution: these grants received $1.08 billion ($197 million more than in FY2006, and $396 million more than the President requested for FY2007). The resolution further prohibited project grants for congressional earmarks, but not for special project grants requested in the President's budget. The action to ban earmarks in FY2007 occurred when leaders in the 110 th Congress sought to finish up appropriations actions that were unresolved at the end of the 109 th Congress, and at the same time the newly elected Congress moved to adopt rules and procedures to reform the congressional earmarking process for the future. (Water infrastructure project earmarks totaled $281 million in EPA's FY2006 appropriation.) President Bush signed H.J.Res. 20 on February 15, 2007 ( P.L. 110-5 ).", "The final FY2007 amounts provided in P.L. 110-5 were", "$1.084 billion for clean water SRF capitalization grants, $837.5 million for drinking water SRF capitalization grants, $83.75 million for Alaska Native Village and U.S.-Mexico border project grants requested by the Administration, and $1.11 billion for categorical state grants, which could be used to administer a range of environmental programs."], "subsections": []}, {"section_title": "FY2008", "paragraphs": ["President Obama presented his FY2008 budget request to Congress on February 5, 2007, before finalization of the FY2007 appropriations. The budget sought $687.6 million for clean water SRF grants, the same amount requested for FY2007; $842.2 million for drinking water SRF grants; $25.5 million for special project grants for Alaska Native Villages and the U.S.-Mexico border region; and $1.065 billion for categorical state grants, which could address a range of environmental programs.", "In June 2007, the House passed H.R. 2643 , providing FY2008 appropriations for EPA. This bill included $1.125 billion for clean water SRF grants, $842.2 million for drinking water SRF grants, plus $175.5 million for 143 congressionally designated water infrastructure project grants. The Senate Appropriations Committee approved companion legislation ( S. 1696 ) that similarly included higher funding levels for several water quality programs. The Senate committee's bill provided less funding for clean water SRF grants than the House bill ($887 million), the same amount for drinking water SRF grants, and slightly more for congressionally designated water infrastructure project grants ($180 million). The Senate did not take up S. 1696 .", "By October 1, the start of FY2008, Congress had not enacted any appropriations bills for FY2008, and Congress enacted several short-term continuing appropriations resolutions to temporarily fund EPA and other government agencies until final agreement, which occurred in December 2007. Full-year funding for EPA's water infrastructure programs was included in the Consolidated Appropriations Act for FY2008 (Division F, Title II), signed by the President December 26, 2007 ( P.L. 110-161 ).", "The final FY2008 amounts provided in this legislation were", "$689.1 million for clean water SRF capitalization grants ($1.5 million more than requested by the Administration), $829.0 million for drinking water SRF capitalization grants ($13.2 million less than requested), $177.2 million for 282 earmarked grants in listed communities, Alaska Native Villages, and U.S.-Mexico border projects ($151.7 million more than requested), and $1.078 billion for categorical state grants ($13.3 million more than requested), which could address a range of environmental programs."], "subsections": []}, {"section_title": "FY2009", "paragraphs": ["President Obama presented his FY2009 budget request to Congress on February 6, 2008. The budget sought $555 million for clean water SRF grants, $134 million less than Congress appropriated for FY2008; $842.2 million for drinking water SRF grants, $13 million more than was appropriated for FY2008; $25.5 million for special project grants for Alaska Native Villages and the U.S.-Mexico border region, $18.8 million less than was appropriated for FY2008; and $1.057 billion for categorical state grants, which could address a range of environmental programs. As in past years, the budget requested no funds for other earmarked grants.", "In June 2008, a House Appropriations subcommittee approved a bill with FY2009 funding for EPA, but no further action occurred before the start of the fiscal year. At the end of September 2008, Congress and the President agreed to legislation providing partial-year funding for EPA and most other agencies and departments. This bill, the Consolidated Security, Disaster Assistance, and Continuing Resolution Act, 2009 ( P.L. 110-329 ), provided funding through March 6, 2009, at FY2008 funding levels. A second short-term continuing resolution was enacted on March 6 ( P.L. 111-6 ), while Congress was finishing consideration of a full-year omnibus FY2009 appropriations bill that the President signed on March 11 ( P.L. 111-8 ). The omnibus bill provided $689 million in regular appropriations for clean water SRF grants, $829 million for drinking water SRF grants\u2014both at the same levels as were appropriated in FY2008\u2014and $1.094 billion for categorical state grants, which support administration of a range of environmental programs. The omnibus appropriations act also includes $183.5 million for earmarked water infrastructure grants."], "subsections": [{"section_title": "FY2009 Supplemental Appropriations, the American Recovery and Reinvestment Act", "paragraphs": ["In February 2009, Congress responded to the nation's economic crisis by enacting the American Recovery and Reinvestment Act (ARRA, P.L. 111-5 ), legislation providing FY2009 supplemental appropriations to a number of government programs. Part of the philosophy underlying the legislation was the concept of using federal investments to make accelerated investments in the nation's public infrastructure in order to create jobs while also meeting infrastructure needs. To that end, the legislation included $4.0 billion for clean water SRF capitalization grants (for total FY2009 funds of $4.689 billion) and $2.0 billion for drinking water SRF capitalization grants (for total FY2009 funds of $2.829 billion). The supplemental SRF funds were available for obligation through FY2010, but under the legislation, states were to give preference when awarding funds to activities that can start and finish quickly, with a goal that at least 50% of the funds go to activities that can be initiated within 120 days of enactment. States were to give priority to wastewater projects that could proceed to construction within 12 months of enactment, and funds for projects that were not under contract or under construction by February 12, 2010, would be reallocated by EPA to other states. Further, the legislation required states to reserve at least 20% of the SRF capitalization grant funds for a Green Project Reserve, that is, projects intended to achieve improved energy or water efficiency. It also specified that all assistance agreements made in whole or in part with funds appropriated under the ARRA must comply with prevailing wage requirements of the Davis-Bacon Act."], "subsections": []}]}, {"section_title": "FY2010", "paragraphs": ["President Obama presented his Administration's FY2010 budget request on May 7, 2009. For EPA as a whole, the budget sought $10.5 billion, a 38% increase above levels enacted in EPA's regular FY2009 appropriations ( P.L. 111-8 ). The bulk of the increase in the President's budget was for water infrastructure assistance, which would receive 157% above FY2009 levels (excluding ARRA supplemental funds). The request included", "$2.4 billion for clean water SRF capitalization grants; $1.5 billion for drinking water SRF capitalization grants; $20 million for Alaska Native Village and U.S.-Mexico border projects; and $1.111 billion for state categorical grants (1.5% above FY2009 levels), which generally support state administration of environmental programs.", "Congress provided FY2010 appropriations for EPA in P.L. 111-88 , passed by the House and Senate in October 2009 and signed into law on October 30. In this measure, Congress provided the following:", "$2.1 billion for clean water SRF capitalization grants; $1.387 billion for drinking water SRF capitalization grants; $186.7 million for 319 congressionally earmarked special project grants, including assistance for Alaska Native Villages and U.S.-Mexico border projects; and $1.116 billion for state categorical environmental grants, which could address a range of environmental programs.", "The FY2010 appropriations act included some restrictions that Congress also had specified in the American Recovery and Reinvestment Act, discussed above, namely a requirement that 20% of SRF capitalization grant assistance be used for \"green\" infrastructure and also that Davis-Bacon Act prevailing wage rules shall apply to construction of wastewater or drinking water projects carried out in whole or in part with assistance from the SRF."], "subsections": []}, {"section_title": "FY2011", "paragraphs": ["President Obama presented the FY2011 budget request in February 2010. For EPA as a whole, the budget sought $10.02 billion in discretionary budget authority, a 3% decrease from levels enacted for EPA in FY2010. The largest component of the reduced request, compared with FY2010, was $200 million less for grants to capitalize clean water and drinking water SRF programs. In explaining the request, EPA budget documents noted that even with a slight reduction, the budget \"continues robust funding for the SRFs.\" As in past years, the President requested no funds for congressionally designated water infrastructure projects. The request included", "$2.0 billion for clean water SRF capitalization grants; $1.287 billion for drinking water SRF capitalization grants; $20 million for Alaska Native Village and U.S.-Mexico border projects; and $1.277 billion for state categorical grant programs (14% higher than the FY2010 enacted amount), which could address a range of environmental programs.", "Congress took only limited action on FY2011 funding for EPA before the start of the new fiscal year on October 1, 2010: a House Appropriations subcommittee approved a bill in July, but no further action followed. At the end of September, the House and Senate passed a continuing resolution to extend FY2010 funding levels for EPA and other federal agencies and departments until December 3, 2010, because no FY2011 appropriations bills had been enacted by October 1. President Obama signed the continuing resolution (CR) on September 30 ( P.L. 111-242 ). This bill was followed by six more short-term CRs before Congress came to final resolution of FY2011 spending on April 14, 2011, enacting a bill to provide funding for EPA and all other federal agencies and departments through September 30 ( P.L. 112-10 ). The final bill reduced overall funding for EPA 15% below the FY2010 level.", "The enacted bill included", "$1.522 billion for clean water SRF capitalization grants; $963.1 million for drinking water SRF capitalization grants; $19.96 million for Alaska Native Village and U.S. Mexico-border projects; and $1.254 billion for state categorical grant programs, which generally support implementation of a range of environmental programs."], "subsections": []}, {"section_title": "FY2012", "paragraphs": ["Policymakers began to consider the budget for FY2012 before finalizing the funding levels for FY2011. The President submitted the Administration's FY2012 budget request on February 14, 2011. It sought $9 billion total for EPA, a decrease of $1.3 billion from the FY2010 enacted level, but 3% higher than the FY2011 enacted level. The President's request included $1.55 billion for clean water SRF capitalization grants, $990 million for drinking water SRF capitalization grants, $20 million for Alaska Native Village and U.S.-Mexico border assistance, and $1.2 billion for state categorical grants, which could address a range of environmental programs.", "For several days in July 2011, the House debated H.R. 2584 , providing FY2012 appropriations for EPA, but did not take final action on the bill before the August recess. As reported, the bill provided $7.3 billion for EPA, 17% less than FY2011 funds and 19% less than the President's FY2012 request. It reduced funds for the clean water SRF capitalization grants to $689 million and $829 million for drinking water SRF capitalization grants (the same levels provided in FY2008), while including no funds for congressionally designated special projects (i.e., earmarks). The reported bill also provided $1.002 billion for state categorical grants, which could address a range of environmental programs. There was no action on this bill in the Senate.", "Final congressional action on FY2012 appropriations for EPA and most other federal agencies and departments did not occur until the end of December 2011, enacted in an omnibus appropriations act, P.L. 112-74 . The enacted bill included", "$1.466 billion for clean water SRF capitalization grants (3.7% below FY2011); $917.9 million for drinking water SRF capitalization grants (4.7% below FY2011); $14.976 million for Alaska Native Village and U.S.-Mexico border projects; and $1.089 billion for state categorical grants, which could address a range of environmental programs."], "subsections": []}, {"section_title": "FY2013", "paragraphs": ["President Obama presented the Administration's FY2013 budget request in February 2012. It sought $8.34 billion overall for EPA, or 4.7% below the level enacted for FY2012. The request included $1.175 billion for clean water SRF capitalization grants, $850 million for drinking water SRF capitalization grants, $20 million for Alaska Native Village and U.S.-Mexico border assistance, and $1.2 billion for state categorical grants, which could address a range of environmental programs. The total amount requested for SRF capitalization grants is 15% below the FY2012 enacted level, reflecting a 20% reduction for the clean water program and a 7.4% reduction for the drinking water program.", "The House Appropriations Committee approved legislation providing FY2013 funds for EPA in July 2012 ( H.R. 6091 ). As reported, the bill provided $689 million for clean water SRF capitalization grants (the same level provided in FY2008), $829 million for drinking water SRF capitalization grants, $994 million for state categorical grants, and no funds for Alaska Native Village or U.S.-Mexico border projects. ", "The House did not take up H.R. 6091 , nor did the Senate act on an EPA appropriations bill (although the Senate Appropriations Committee released a draft bill in September 2012). Prior to the start of FY2013 on October 1, 2012, Congress passed and the President signed a continuing resolution bill providing funding for government agencies and departments through March 27, 2013 ( P.L. 112-175 ). This measure funded the government generally at FY2012 levels plus a 0.6% increase.", "Final action on FY2013 appropriations occurred in the Further Continuing Appropriations Act, 2013 ( P.L. 113-6 ). Funding enacted in this bill included $1.452 billion for clean water SRF capitalization grants; $908.7 million for drinking water SRF capitalization grants; $15 million for Alaska Native Village and U.S.-Mexico border assistance; and $1.1 billion for state categorical grants, which generally support state and tribal implementation of a range of environmental programs. However, these amounts were reduced under the March 1, 2013, sequester order of the President, which reduced affected accounts by 5.0%, and by an across-the-board rescission of 0.2% necessary to avoid exceeding the FY2013 discretionary spending limits in law. After these reductions, available FY2013 funding was approximately $1.38 billion for the clean water SRF capitalization grants, $860 million for drinking water SRF capitalization grants, $14 million for Alaska Native Village and U.S.-Mexico border assistance, and $1.0 billion for state categorical grants."], "subsections": []}, {"section_title": "FY2014", "paragraphs": ["President Obama presented the Administration's FY2014 budget in April 2013. It sought $8.15 billion overall for EPA, including $1.095 billion for clean water SRF capitalization grants, $817 million for drinking water SRF capitalization grants, $15 million for Alaska Native Village and U.S.-Mexico border projects, and $1.136 billion for state categorical grants. The total amount requested for SRF capitalization grants was 19% below the FY2013 enacted level.", "In mid-2013, the House Appropriations Subcommittee on Interior, Environment, and Related Agencies drafted a bill (unnumbered) that would have reduced overall funding for EPA by 34% from the FY2013 enacted level, including an 83% reduction for clean water SRF capitalization grants (the bill would have provided $250 million) and a 65% reduction for drinking water SRF capitalization grants ($350 million was included in the bill). According to subcommittee documents, the reduction was appropriate because, despite recent federal support, little progress has been made to reduce the known water infrastructure gap. The full committee did not complete markup of this bill.", "The Senate Appropriations Subcommittee on Interior, Environment, and Related Agencies drafted an alternative bill that would have maintained funding for the clean water SRF program at $1.45 billion and funding for the drinking water SRF program at $907 million. There was no further action on this bill.", "Congress did not reach final agreement on FY2014 appropriations before the start of the fiscal year on October 1, but did agree to a short-term continuing appropriations measure ( P.L. 113-46 ), which provided funding through January 15, 2014. Final action on appropriations for EPA and all other federal agencies and departments occurred as part of the Consolidated Appropriations Act, 2014 ( H.R. 3547 , P.L. 113-76 ), signed by the President on January 17, 2014. This bill provides $1.45 billion for clean water SRF capitalization grants (5% more than FY2013 funds and 32% higher than the President's FY2014 budget request) and $907 million for drinking water SRF capitalization grants (5% more than FY2013 funds and 11% higher than the President's FY2014 budget request). The bill also provides $15 million for Alaska Native Village and U.S.-Mexico border assistance, and $1.0 billion for state categorical grants, which generally support state and tribal implementation of a range of environmental programs."], "subsections": []}, {"section_title": "FY2015", "paragraphs": ["President Obama presented the Administration's FY2015 budget on March 4, 2014. It sought $7.89 billion overall for EPA, including $1.018 billion for clean water SRF capitalization grants, $757 million for drinking water SRF capitalization grants, $15 million for Alaska Native Village and U.S.-Mexico border projects, and $1.13 billion for state categorical grants. The total amount requested for SRF capitalization grants was 25% below the FY2014 enacted level.", "Final full-year appropriations were enacted as part of the Consolidated and Further Continuing Appropriations Act, 2015, enacted in December 2014 ( P.L. 113-235 ). The legislation provided the same water infrastructure funding levels as in FY2014: $1.45 billion for clean water SRF capitalization grants and $907 million for drinking water SRF capitalization grants. As with the FY2014 appropriations, the bill provided $15 million for Alaska Native Village and U.S.-Mexico border assistance and $1.0 billion for state categorical grants, which could address a range of environmental programs."], "subsections": []}, {"section_title": "FY2016", "paragraphs": ["The Administration's FY2016 budget requested $8.6 billion overall for EPA. The request included $1.116 billion for clean water SRF capitalization grants, $1.186 billion for drinking water SRF capitalization grants (31% higher than the FY2016 appropriation), $15 million for Alaska Native Village and U.S.-Mexico border projects, and $1.162 billion for state categorical grants, which generally support state and tribal implementation of a range of environmental programs. ", "Although the House and Senate Appropriations Committees reported bills to provide FY2016 appropriations for EPA, final appropriations action for EPA and other agencies occurred as part of the Consolidated Appropriations Act, 2016, signed by the President December 18, 2015 ( P.L. 114-113 ). The bill provided $1.394 billion for clean water SRF capitalization grants ($55 million less than FY2015, but $278 million above the President's request), $863 million for drinking water SRF capitalization grants ($44 million below the FY2015 level, and $323 million less than the President's request), and $30 million for Alaska Native Village and U.S.-Mexico border water infrastructure projects. It also provided $1.06 billion for state categorical grants. "], "subsections": []}, {"section_title": "FY2017", "paragraphs": ["President Obama presented the Administration's FY2017 budget in February 2016, requesting $8.3 billion in total for EPA ($127 million above the FY2016 enacted budget). The request for EPA included $979.5 million for clean water SRF capitalization grants ($424 million less than the FY2016 enacted level), $1.02 billion for drinking water SRF capitalization grants ($157 million above the FY2016 amount), $22 million for Alaska Native Village and U.S.-Mexico border projects, and $1.158 billion for state categorical grants, which generally support state and tribal implementation of environmental programs.", "During congressional hearings on the EPA request, many Members criticized the requested 30% decrease in funds for clean water SRF capitalization grants. This criticism was reflected to some degree in appropriations bills the Appropriations Committees subsequently approved that include EPA funding. In July 2016, the House passed H.R. 5538 , FY2017 Interior and Environment Appropriations Act; it included $1.0 billion for clean water SRF grants, $1.07 billion for drinking water SRF grants, and $1.06 billion for state categorical grants. The Senate Appropriations Committee reported a companion bill, S. 3068 , in June. It included $1.35 billion for clean water SRF grants, $1.02 billion for drinking water SRF grants, and $1.09 billion for state categorical grants. The Senate did not take up this bill.", "Congress did not reach final agreement on an EPA funding bill before the start of FY2017. However, on September 28, the House and Senate passed a 10-week continuing resolution that extended FY2016 funding levels, minus a 0.496% across-the-board reduction, through December 9, 2016 ( P.L. 114-223 ). A second continuing resolution, passed in December 2014, extended FY2016 funding levels, minus a 0.1901% across-the-board reduction, from December 10, 2016, through April 28, 2017 ( P.L. 114-254 ).", "The Obama Administration's FY2017 budget submission also included a $15 million request to allow EPA to begin making water infrastructure project loans under a program that Congress enacted in 2014, the Water Infrastructure Financing and Investment Act, or WIFIA. P.L. 114-254 included the first appropriation, $20 million, for EPA to do so. The FY2017 final appropriations act (discussed below) provided an additional $8 million for EPA's WIFIA program (and $2 million for EPA to administer the program). ", "Final full-year appropriations were enacted as part of the Consolidated and Further Continuing Appropriations Act, 2017, signed by President Trump on May 5, 2017 ( P.L. 115-31 ). The act provided the same level of funding for water infrastructure as FY2016: $1.394 billion for clean water SRF capitalization grants ($414 million above President Obama's request), $863 million for drinking water SRF capitalization grants ($158 million less than President Obama's request), and $30 million for Alaska Native Village and U.S.-Mexico border water infrastructure projects. It also provided $1.07 billion for state categorical grants, which support a range of environmental programs. ", "The Continuing and Security Assistance Appropriations Act, 2017 ( P.L. 114-254 ), included an additional $100 million in DWSRF funding to assist Flint, MI, as authorized in the Water Infrastructure Improvements for the Nation (WIIN) Act ( P.L. 114-322 )."], "subsections": []}, {"section_title": "FY2018", "paragraphs": ["The Trump Administration's FY2018 budget request proposed $8.6 billion overall for EPA. The request included $1.394 billion for clean water SRF capitalization grants and $863 million for drinking water SRF capitalization grants (the same amounts as the FY2017 appropriation). The request proposed $597 million for state categorical grants, a 44% reduction compared to FY2017 levels. Much of this reduction came from the elimination of funding for nonpoint source grants (CWA Section 319) and reduction of grant funding for water pollution control (CWA Section 106). In addition, the President's budget request proposed to eliminate funding for Alaska Native Village and U.S.-Mexico border projects. ", "Similar to the previous fiscal year, Congress did not reach final agreement on an EPA funding bill before the start of FY2018. EPA and other federal departments and agencies operated under multiple continuing resolutions generally at FY2017 enacted levels (minus across-the-board rescissions). Final full-year appropriations were enacted as part of the Consolidated Appropriations Act, 2018, signed by President Trump on March 23, 2018 ( P.L. 115-141 ). EPA's STAG account (Division G, Title II) included $1.394 billion for the clean water SRF and $863 million for the drinking water SRF program (the same amounts appropriated for FY2017, less $100 million for the DWSRF provided to assist Flint, MI). Division G, Title IV (General Provisions), Section 430, included an additional $600 million ($300.0 million each) within the STAG account for both SRF programs. ", "P.L. 115-141 also provided $63 million for the WIFIA program, more than doubling the FY2017 appropriation. The act provided $20 million for Alaska Native Village projects and $10 million U.S.-Mexico border projects. It also provided $1.08 billion for state categorical grants, which support a range of environmental programs.", "In addition, the act provided the first appropriations for three programs authorized in the WIIN Act ( P.L. 114-322 , Title II, the Water and Waste Act of 2016): $10 million to help public water systems serving small or disadvantaged communities meet SDWA requirements; $20 million to support lead reduction projects, including lead service line replacement; and $20 million to establish a voluntary program for testing for lead in drinking water at schools and child care programs."], "subsections": []}, {"section_title": "FY2019", "paragraphs": ["The Trump Administration's FY2019 budget request proposed $6.15 billion overall for EPA. The request included $1.394 billion for clean water SRF capitalization grants and $863 million for drinking water SRF capitalization grants (the same amounts requested in FY2018). The request included $20 million for the WIFIA program: $17 million to cover subsidy costs, which EPA estimated would allow the agency to lend approximately $2 billion (EPA Budget Justification), and $3 million for administrative costs. In addition, the request proposed $597 million for state categorical grants and $3 million for Alaska Native Village projects. The request proposed to eliminate funding for nonpoint source grants (CWA Section 319), reduce grant funding for water pollution control (CWA Section 106), and eliminate funding for U.S.-Mexico border water infrastructure projects.", "At the beginning of FY2019, EPA operated under the terms and conditions of multiple continuing resolutions (Division C of P.L. 115-245 ; P.L. 115-298 ; and P.L. 116-5 ). A \"partial government shutdown\" began on December 22, 2018, during which EPA operated under its shutdown contingency plans. Final full-year appropriations were enacted as part of the Consolidated Appropriations Act, FY2019 ( P.L. 116-6 ), signed by President Trump on February 15, 2019. ", "FY2019 appropriations were provided in two titles of P.L. 116-6 . Title II included $1.394 billion for the CWSRF, $864.0 million for the DWSRF, and $10.0 million for WIFIA. Title IV included an additional $600.0 million ($300.0 million each) for both SRF programs and an additional $58.0 million for WIFIA. ", "Title IV of P.L. 116-6 included $65.0 million within the EPA STAG account for grants authorized in the WIIN Act ( P.L. 114-322 ): $25 million to help public water systems serving small or disadvantaged communities meet SDWA requirements, $15 million to support lead reduction projects (including lead service line replacement), and $25 million to establish a voluntary program for testing for lead in drinking water at schools and child care programs.", "In addition, the act provided $25 million for Alaska Native Village projects and $15 million U.S.-Mexico border projects. It also provided $1.08 billion for state categorical grants, which support a range of environmental programs."], "subsections": []}, {"section_title": "FY2020", "paragraphs": ["The Trump Administration's FY2020 budget request proposed $6.07 billion overall for EPA. The request included ", "$1.120 billion for CWSRF capitalization grants; $863 million for drinking water SRF capitalization grants; $25 million for the WIFIA program: $20 million to cover subsidy costs, which EPA estimated would allow the agency to lend over $2 billion (EPA Budget Justification), and $5 million for administrative costs; $3 million for Alaska Native Village projects; $10 million for testing for lead in drinking water at schools and child care programs; $61 million for sewer overflow control grants; $154 million for water pollution control grants (CWA Section 106); and $580 million for state categorical grants, which support a range of environmental programs.", "The Administration's request proposed to eliminate funding for the following: ", "nonpoint source grants, U.S.-Mexico border water infrastructure projects, drinking water grants for small and disadvantage communities, and lead reduction project grants."], "subsections": []}]}]}}
{"id": "R45500", "title": "Transportation Security: Issues for the 116th Congress", "released_date": "2019-02-11T00:00:00", "summary": ["The nation's air, land, and marine transportation systems are designed for accessibility and efficiency, two characteristics that make them vulnerable to terrorist attack. While hardening the transportation sector is difficult, measures can be taken to deter terrorists. The enduring challenge facing Congress is how best to implement and finance a system of deterrence, protection, and response that effectively reduces the possibility and consequences of terrorist attacks without unduly interfering with travel, commerce, and civil liberties.", "Transportation security has been a major policy focus since the terrorist attacks of September 11, 2001. In the aftermath of those attacks, the 107th Congress moved quickly to pass the Aviation and Transportation Security Act (ATSA; P.L. 107-71), creating the Transportation Security Administration (TSA) and mandating that security screeners employed by the federal government inspect airline passengers, their baggage, and air cargo. Despite the extensive focus on aviation and transportation security over the past decade, a number of challenges remain, including", "developing and deploying effective biometric capabilities to verify the identities of transportation workers and travelers; developing effective risk-based approaches to vetting and screening transportation workers accessing secured areas of airports and other sensitive areas of transportation networks; developing cost-effective solutions to screen air cargo and freight without impeding the flow of commerce; and coordination among state, local, and federal homeland security and law enforcement personnel to effectively deter and respond to criminal and terrorist acts targeting public areas of transportation facilities.", "The FAA Extension, Safety, and Security Act of 2016 (P.L. 114-190) and the TSA Modernization Act (P.L. 115-254, Division K) included provisions intended to improve screening technologies, streamline the passenger screening process, mandate more rigorous background checks of airport workers, strengthen airport access controls, increase passenger checkpoint efficiency and operational performance, and enhance security in public areas of airports and at foreign airports where flights depart for the United States. Oversight of TSA actions to implement these mandates may be an area of particular interest in the 116th Congress. Particular topics may include the evolution of screening technologies and assessments of emerging screening technology solutions; the expansion of canine teams for transportation security; the expansion of the PreCheck program to expedite screening of known travelers; the use of biometrics and associated data security and privacy concerns; implementing effective approaches, regulations, and international agreements to conduct risk-based screening of air cargo shipments worldwide; protecting public areas of airports; and developing effective countermeasures to protect critical infrastructure, including airports and aircraft, from attacks using drones.", "Bombings of passenger trains in Europe and Asia in the past few years illustrate the vulnerability of passenger rail systems to terrorist attacks. Passenger rail systems\u2014primarily subway systems\u2014in the United States carry about five times as many passengers each day as do airlines, over many thousands of miles of track, serving stations that are designed primarily for easy access. Transit security issues of recent interest to Congress include the quality of TSA's surface transportation inspector program. The bulk of U.S. overseas trade is carried by ships, and thus the economic consequences of a maritime terrorist attack could be significant. Customs and Border Protection (CBP) and the Coast Guard have implemented security screening procedures that effectively \"push the borders out\"\u2014that is, they begin screening vessels and cargo before they reach a U.S. port. Two aspects of maritime security that have drawn attention recently are cybersecurity and the use of drones for coastal surveillance."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The nation's air, land, and marine transportation systems are designed for accessibility and efficiency, two characteristics that make them vulnerable to attack. The difficulty and cost of protecting the transportation sector from attack raises a core question for policymakers: how much effort and resources to put toward protecting potential targets versus pursuing and fighting terrorists. While hardening the transportation sector against terrorist attack is difficult, measures can be taken to deter terrorists. The focus of debate is how best to implement and finance a system of deterrence, protection, and response that effectively reduces the possibility and consequences of terrorist attacks without unduly interfering with travel, commerce, and civil liberties.", "For all modes of transportation, one can identify four principal policy objectives that would support a system of deterrence and protection: (1) ensuring the trustworthiness of the passengers and the cargo flowing through the system; (2) ensuring the trustworthiness of the transportation workers who operate and service the vehicles, assist the passengers, or handle the cargo; (3) ensuring the trustworthiness of the private companies that operate in the system, such as the carriers, shippers, agents, and brokers; and (4) establishing a perimeter of security around transportation facilities and vehicles in operation. The first three policy objectives are concerned with preventing an attack from within a transportation system, such as occurred on September 11, 2001. The concern is that attackers could once again disguise themselves as legitimate passengers (or shippers or workers) to get in position to launch an attack.", "The fourth policy objective is concerned with preventing an attack from outside a transportation system. For instance, terrorists could ram a bomb-laden speedboat into an oil tanker, as was done in October 2002 to the French oil tanker Limberg , or they could shoot a shoulder-fired missile at an airplane taking off or landing, as was attempted in November 2002 against an Israeli charter jet in Mombasa, Kenya. Achieving all four of these objectives is difficult at best, and in some modes, is practically impossible. Where limited options exist for preventing an attack, policymakers are left with evaluating options for minimizing the consequences of an attack, without imposing unduly burdensome requirements."], "subsections": []}, {"section_title": "Aviation Security1", "paragraphs": ["Following the 9/11 terrorist attacks, Congress took swift action to create the Transportation Security Administration (TSA) within the U.S. Department of Transportation and gave it control over all airline passenger and baggage screening functions and deployment of armed air marshals on commercial passenger flights. In 2003, TSA was transferred to the newly formed Department of Homeland Security (DHS).", "To this day, the federal role in airport screening remains controversial. While airports are allowed to opt out of federal screening, alternative private screening under TSA contracts has been limited to 22 airports out of approximately 450 commercial passenger airports where passenger screening is required. Congress has sought to ensure that optional private screening remains available for those airports that want to pursue this option. The TSA Modernization Act, incorporated into the FAA Reauthorization Act of 2018 ( P.L. 115-254 ), includes language directing TSA to streamline the contracting process for private screening at airports, and directs TSA to look into the feasibility of modifying the program to allow individual airport terminals, instead of entire airports, to switch over to screening by private contractors. Proposals seeking more extensive reforms of passenger screening have not been extensively debated. Rather, aviation security legislation has largely focused on specific mandates to comprehensively screen for explosives and carry out background checks and threat assessments.", "Despite the extensive focus on aviation security for more than a decade, a number of challenges remain, including", "effectively screening passengers, baggage, and cargo for explosives threats; developing effective risk-based methods for screening passengers and others with access to aircraft and sensitive areas; incorporating biometrics into the passenger screening process to verify identities; exploiting available intelligence information and watchlists to identify individuals who pose potential threats to civil aviation; implementing effective systems, regulations, and international agreements to assess risk and conduct risk-based screening of air cargo shipments worldwide; effectively deterring and responding to security threats in public areas of airports and at screening checkpoints; developing effective strategies for addressing aircraft vulnerabilities to shoulder-fired missiles and other standoff weapons; and addressing the potential security implications of unmanned aircraft operations in domestic airspace and developing effective countermeasures to protect critical infrastructure, including airports and aircraft, from attacks using drones."], "subsections": [{"section_title": "Explosives Screening Strategy for the Aviation Domain", "paragraphs": ["Prior to the 9/11 attacks, explosives screening in the aviation domain was limited in scope and focused on selective screening of checked baggage placed on international passenger flights. Immediately following the 9/11 attacks, the Aviation and Transportation Security Act (ATSA; P.L. 107-71 ) mandated 100% screening of all checked baggage placed on domestic passenger flights and on international passenger flights to and from the United States.", "In addition, the Implementing the 9/11 Commission Recommendations Act of 2007 ( P.L. 110-53 ) mandated the physical screening of all cargo placed on passenger flights. Unlike passenger and checked baggage screening, TSA does not routinely perform physical inspections of air cargo. Rather, TSA satisfies this mandate through the Certified Cargo Screening Program. Under the program, manufacturers, warehouses, distributors, freight forwarders, and shippers carry out screening inspections using TSA-approved technologies and procedures both at airports and at off-airport facilities in concert with certified supply-chain security measures and chain-of-custody standards. Internationally, TSA works with other governments, international trade organizations, and industry to assure that all U.S.-bound air cargo shipments carried aboard passenger aircraft meet the requirements of the mandate.", "Additionally, TSA works closely with Customs and Border Protection (CBP) to carry out risk-based targeting of cargo shipments, including use of the CBP Advance Targeting System-Cargo (ATS-C), which assigns risk-based scores to inbound air cargo shipments to identify shipments of elevated risk. Originally designed to combat drug smuggling, ATS-C has evolved over the years, particularly in response to an October 2010 cargo aircraft bomb plot that originated in Yemen, to assess shipments for explosives threats or other terrorism-related activities. CBP and TSA continue to pilot test the Air Cargo Advance Screening (ACAS) system, initiated in 2010, under which freight forwarders and airlines voluntarily submit key data elements of cargo manifests for predeparture vetting.", "P.L. 115-254 requires TSA to establish an air cargo security division and review and improve the Known Shipper Program and Certified Cargo Screening Program to enhance their effectiveness and address any identified vulnerabilities. The act also requires U.S. Customs and Border Protection to work with TSA to establish a formal ACAS program for inbound international cargo modelled on the long-running ACAS pilot program. It directs TSA to examine the feasibility of expanding the use of computed tomography to air cargo and examine other emerging screening technologies that may enhance air cargo screening.", "Given the focus on the threats to aviation posed by explosives, a significant focus of TSA acquisition efforts has been on explosives screening technologies. The Transportation Security Acquisition Reform Act ( P.L. 113-245 ) required TSA to develop a five-year technology investment plan and mandated formal justifications and certifications that technology investments are cost-beneficial. The act also required tighter inventory controls and processes to ensure efficient utilization of procured technologies. P.L. 115-254 requires TSA to update this plan annually to accompany its budget request. The act also requires TSA to establish an innovation task force to work with industry to identify, cultivate, and accelerate the development and implementation of innovative transportation security technologies. ", "A major thrust of TSA's acquisition and technology deployment strategy is improving the capability to detect concealed explosives and bomb-making components carried by airline passengers. The October 31, 2015, downing of a Russian passenger airliner departing Sharm el-Sheikh, Egypt, reportedly following the explosion of a bomb aboard the aircraft, renewed concerns over capabilities to detect explosives in baggage and cargo and monitoring of airport workers with access to aircraft, particularly overseas.", "In response to a 2009 incident aboard a Northwest Airlines flight, the Obama Administration accelerated deployment of Advanced Imaging Technology (AIT) whole body imaging devices and other technologies at passenger screening checkpoints. This deployment responded to the 9/11 Commission recommendation to improve the detection of explosives on passengers. In addition to AIT, next generation screening technologies for airport screening checkpoints include advanced technology X-ray systems for screening carry-on baggage, bottled liquids scanners, cast and prosthesis imagers, shoe scanning devices, and portable explosives trace detection equipment.", "The use of AIT has raised a number of policy questions. Privacy advocates have objected to the intrusiveness of AIT, particularly when used for primary screening. To allay privacy concerns, TSA eliminated the use of human analysis of AIT images and does not store imagery. In place of human image analysts, TSA has deployed automated threat detection capabilities using automated targeting recognition (ATR) software. Another concern raised about AIT centered on the potential medical risks posed by backscatter X-ray systems, but those systems are no longer in use for airport screening, and current millimeter wave systems emit nonionizing millimeter waves generally not considered harmful. More recently, the effectiveness of AIT and ATR has been brought into question. In 2015, the DHS Office of Inspector General completed covert testing of passenger screening checkpoint technologies and processes and consistently found failures in technology and procedures coupled with human error that allowed prohibited items to pass into secure areas.", "Even prior to the revelations of weaknesses in passenger checkpoint screening technologies and procedures, the use of AIT was controversial. Past legislative proposals specifically sought to prohibit the use of whole body imaging for primary screening (see, for example, H.R. 2200 , 111 th Congress). Primary screening using AIT is now commonplace at larger airports, but checkpoints at many smaller airports have not been furnished with AIT equipment and other advanced checkpoint detection technologies. This raises questions about TSA's long-range plans to expand AIT to ensure more uniform approaches to explosives screening across all categories of airports. ", "Through FY2018, TSA deployed about 960 AIT units. It has not planned for procurements beyond this level, although many smaller airports are not equipped with this capability. TSA plans to manage this risk to a large extent through risk-based passenger screening measures, primarily through increased use of voluntary passenger background checks under the PreCheck trusted traveler program. However, this program, likewise, is not available at many smaller airports: Currently, the program's incentive of expedited screening is offered at fewer than half of all commercial passenger airports.", "The FAA Extension, Safety, and Security Act of 2016 ( P.L. 114-190 ) directed TSA to initiate a demonstration program at three to six large airports to examine passenger checkpoint reconfigurations that increase efficiencies and reduce vulnerabilities, and a separate demonstration program at three airports to develop and test next-generation screening system prototypes designed to expedite passenger handling. P.L. 115-254 instructs TSA to continue operation of its systems integration facility at Washington Reagan National Airport for testing and evaluating advanced transportation security screening technologies, and to ensure timely assessments of new screening technologies. It also directs TSA to promote a diverse security technology industry to better enable small business innovators to develop and commercialize new transportation security technologies. The act requires TSA to formally establish its innovation task force to accelerate the development of innovative transportation security technologies and capabilities. The act also directs DHS to conduct a review to determine whether the Transportation Security Laboratory in Atlantic City, NJ, whose core mission is to perform research, development, and validation of explosives detection and mitigation technologies, should be managed by TSA or by another DHS entity. The laboratory was originally transferred to TSA from the Federal Aviation Administration (FAA), but has been in the hands of the DHS Science and Technology Directorate for more than a decade."], "subsections": []}, {"section_title": "Risk-Based Passenger Screening", "paragraphs": ["TSA has initiated a number of risk-based screening initiatives to focus its resources and apply directed measures based on intelligence-driven assessments of security risk. These include PreCheck; modified screening procedures for children 12 and under; and a program for expedited screening of known flight crew and cabin crew members. Programs have also been developed for modified screening of elderly passengers similar to those procedures put in place for children.", "PreCheck is modeled on CBP programs such as Global Entry, SENTRI, and NEXUS. Under the program, participants vetted through a background check process are processed through expedited screening lanes where they can keep shoes on and keep liquids and laptops inside carry-on bags. As of December 2018, PreCheck expedited screening lanes were available at more than 200 airports. The cost of background checks under the PreCheck program is recovered through application fees of $85 per passenger for a five-year membership. TSA's goal is to process 50% of passengers through PreCheck expedited screening lanes, thus reducing the need for standard security screening lanes, but it has struggled to increase program membership. ", "One concern raised over the PreCheck program is the lack of biometric authentication to verify participants at screening checkpoints. A predecessor test program, the Registered Traveler program, which used private vendors to issue and scan participants' biometric credentials, was scrapped by TSA in 2009 because it failed to show a demonstrable security benefit. In 2016, biometric identity authentication was reintroduced at 13 airports under a private trusted traveler program known as Clear. Participants in Clear, which is separate from PreCheck and not operated or funded by TSA, use an express lane to verify identity using a fingerprint or iris scan rather than interacting with a TSA document checker.", "Previously, the extensive use of a program called \"managed inclusion\" to route selected travelers not enrolled in PreCheck through designated PreCheck expedited screening lanes also raised objections. The Government Accountability Office (GAO) found that TSA had not fully tested its managed inclusion practices, and recommended that TSA take steps to ensure and document that testing of the program adheres to established evaluation design practices. ", "TSA phased out the managed inclusion program in the fall of 2015. Since September 2015, TSA behavior detection officers and explosives trace detection personnel no longer direct passengers not enrolled in PreCheck to expedited screening lanes, but pre-assessments using canine teams have continued at some major airports. Questions remain regarding whether PreCheck is fully effective in directing security resources to unknown or elevated-risk travelers. Nonetheless, it has improved screening efficiency. TSA has estimated annual savings in direct screener workforce costs totaling $110 million as a result of PreCheck and other risk-based initiatives. A study suggested that considerably greater efficiency gains might be realized if TSA could double the annual number of PreCheck screenings, which would require increasing the number of PreCheck-eligible travelers to about 15 to 20 million. PreCheck expansion was addressed in recent legislation, and oversight of TSA efforts to expand PreCheck may be a specific topic of interest during the 116 th Congress. ", "Language in P.L. 115-254 directs TSA to work with at least two private-sector entities to expand PreCheck enrollment options and forge at least two agreements for marketing the program, setting enrollment targets of 7 million by the end of FY2019, 10 million by the end of FY2020, and 15 million by the end of FY2021. The act also directs TSA to explore cost-effective options for conducting recurrent background checks of program participants, although this could raise concerns over impacts on enrollments if procedures for recurrent checks impose additional burdens on participants. ", "The act requires TSA to ensure that PreCheck expedited screening lanes are open and available to program participants during peak and high-volume travel times and take steps to provide expedited screening at standard screening lanes when PreCheck lanes are not available. It also instructs TSA to ensure that only trusted traveler program members and members of the Armed Forces are permitted to use PreCheck screening lanes. ", "P.L. 115-254 also directs TSA and CBP to work together on the deployment of biometric technologies for the entry-exit program for international travelers and other uses. According to the TSA Biometrics Roadmap, TSA also plans to integrate biometrics technology for identity verification of PreCheck travelers, and seeks to eventually expand the voluntary use of biometrics to all domestic air travelers. Plans for increased use of biometrics raise privacy and data-protection concerns that may be of particular interest to congressional oversight committees. ", "In addition to passenger screening, TSA, in coordination with participating airlines and labor organizations representing airline pilots, has developed a known crewmember program to expedite security screening of airline flight crews. In July 2012, TSA expanded the program to include flight attendants.", "TSA has also developed a passenger behavior detection program to identify potential threats based on observed behavioral characteristics. TSA initiated early tests of its Screening Passengers by Observational Techniques (SPOT) program in 2003. By FY2012, the program deployed almost 3,000 behavior detection officers at 176 airports, at an annual cost of about $200 million. Questions remain regarding the effectiveness of the behavioral detection program, and privacy advocates have cautioned that it could devolve into racial or ethnic profiling. While some Members of Congress have sought to shutter the program, Congress has not moved to do so. For example, H.Amdt. 127 (113 th Congress), an amendment to the FY2014 DHS appropriations measure that sought to eliminate funding for the program, failed to pass a floor vote. Congress also has not taken specific action to revamp the program, despite the concerns raised by GAO and the DHS Office of Inspector General. ", "P.L. 115-254 directed TSA to utilize risk-based strategies in deploying federal air marshal teams on international and domestic flights. However, a more controversial TSA initiative using air marshals to shadow passengers whose behavioral profiles based on past itineraries indicated they might pose an elevated security risk was reportedly shuttered in December 2018 after media reports and some Members of Congress raised concerns over the privacy implications of the program. "], "subsections": []}, {"section_title": "The Use of Terrorist Watchlists in the Aviation Domain", "paragraphs": ["Airlines were formerly responsible for checking passenger names against terrorist watchlists maintained by the government. Following at least two instances in 2009 and 2010 in which such checks failed to identify individuals who may pose a threat to aviation, TSA took responsibility for checking passenger names under the Secure Flight program. In November 2010, DHS announced that 100% of passengers flying to or from U.S. airports are being vetted using the Secure Flight system. ", "Secure Flight vets passenger name records against a subset of the Terrorist Screening Database (TSDB). On international flights, Secure Flight operates in coordination with the use of watchlists by CBP's National Targeting Center-Passenger, which relies on the Advance Passenger Information System (APIS) and other tools to vet both inbound and outbound passenger manifests. In addition to flights of U.S. and foreign airlines, all inbound and outbound international flights using chartered and private aircraft must transmit passenger and crew manifests to CBP at least one hour prior to departure. ", "In addition to these systems, TSA conducts risk-based analysis of passenger data carried out by the airlines through use of the Computer-Assisted Passenger Prescreening System (CAPPS). In January 2015, TSA gave notification that it would start incorporating the results of CAPPS assessments, but not the underlying data used to make such assessments, into Secure Flight, along with each passenger's full name, date of birth, and PreCheck traveler number (if applicable). These data are used within the Secure Flight system to perform risk-based analyses to determine whether passengers receive expedited, standard, or enhanced screening at airport checkpoints. P.L. 115-254 removed statutory references to CAPPS, replacing them with references to the Secure Flight Program to clarify that these various passenger vetting elements are fully encompassed under Secure Flight. The act also directed TSA to conduct and publicly disseminate a review of its privacy impact assessment of the Secure Flight Program. ", "Central issues surrounding the use of terrorist watchlists in the aviation domain that may be considered during the 116 th Congress include the speed with which watchlists are updated as new intelligence information becomes available; the extent to which all information available to the federal government is exploited to assess possible threats among passengers and airline and airport workers; the ability to detect identity fraud or other attempts to circumvent terrorist watchlist checks; the adequacy of established protocols for providing redress to individuals improperly identified as potential threats; and the adequacy of coordination with international partners. In addition, there has been a growing interest in finding better ways to utilize watchlists to prevent terrorist travel, particularly travel of radicalized individuals seeking to join forces with foreign terrorist organizations such as the Islamic State (IS). ", "Language in P.L. 114-190 directed TSA to assess whether recurrent fingerprint-based criminal background checks could be carried out in a cost-effective manner to augment terrorist watchlist checks for PreCheck program participants. Additionally, the act directed TSA to expand criminal background checks for certain airport workers."], "subsections": []}, {"section_title": "Perimeter Security, Access Controls, and Worker Vetting", "paragraphs": ["Airport perimeter security, access controls, and credentialing of airport workers are generally responsibilities of airport operators. There is no common access credential for airport workers. Rather, each airport separately issues security credentials to airport workers. These credentials are often referred to as Security Identification Display Area (SIDA) badges, and they convey the level of access that an airport worker is granted.", "TSA requires access control points to be secured by measures such as posted security guards or electronically controlled locks. Additionally, airports must implement programs to train airport workers to challenge anyone not displaying proper identification. ", "Airports may also deploy surveillance technologies, access control measures, and security patrols to protect airport property from intrusion, including buildings and terminal areas. Such measures are paid for by the airport, but must be approved by TSA as part of an airport's overall security program. State and local law enforcement agencies with jurisdiction at the airport are generally responsible for patrols of airport property, including passenger terminals. They also may patrol adjacent properties to deter and detect other threats to aviation, such as shoulder-fired missiles (see \" Mitigating the Threat of Shoulder-Fired Missiles to\u00a0Civilian\u00a0Aircraft \").", "TSA requires security background checks of airport workers with unescorted access privileges to secure areas at all commercial passenger airports and air cargo facilities. Background checks consist of a fingerprint-based criminal history records check and security threat assessment, which include checking employee names against terrorist database information. Certain criminal offenses committed within the past 10 years, including aviation-specific crimes, transportation-related crimes, and other felony offences, are disqualifying. Airports must collect applicant biographical information and fingerprints to submit to TSA to process background checks. Many airports use a service known as the Transportation Security Clearinghouse to coordinate the processing of background check applications.", "P.L. 114-190 directed TSA to update the eligibility criteria and disqualifying criminal offenses for SIDA access credentials based on other transportation vetting requirements and knowledge of insider threats to security. The law proposes that TSA expand the criminal history look-back period from the current 10 years to 15 years, and that individuals be disqualified if they have been released from prison within 5 years of their application. The statute directs TSA to establish a formal waiver process for individuals denied credentials. It also calls for full implementation of recurrent vetting of airport workers with SIDA access credentials using the Federal Bureau of Investigation's (FBI's) Rap Back service to identify disqualifying criminal offences. Language in P.L. 115-254 requires TSA to provide congressional oversight committees with data on the number of airport workers being continuously vetted though the Rap Back service. It also directs TSA to identify means of using homeland security and intelligence resources to educate TSA personnel on means to better mitigate insider threats. The law also requires TSA to establish a centralized database of individuals who have had security access or aircraft-operator credentials revoked for failing to comply with aviation security requirements. ", "P.L. 114-190 directed TSA to conduct random physical inspections of airport workers at SIDA access points and in SIDA areas. P.L. 115-254 clarifies that TSA-led random inspections of aviation workers be targeted, strategic, and focused on providing the greatest level of security effectiveness, rather than being \"random\" in the true sense of the word. The law also directs TSA to continue its covert testing of employee access controls and provide measures of the effectiveness of such operations to airport operators, and as appropriate, to airlines. The act also establishes more stringent standards for individuals applying for SIDA access, requiring that such individuals provide their social security number in order to strengthen vetting effectiveness. "], "subsections": []}, {"section_title": "Explosives Screening Technology and Canines", "paragraphs": ["Explosives screening technologies at passenger screening checkpoints primarily consist of the AIT whole body imaging systems; advanced technology X-ray imagers for carry-on items; and explosives trace detection systems used to test swab samples collected from individuals or carry-on items for explosives residue. TSA began introducing Computed Tomography (CT) scanning technology at passenger screening checkpoints in FY2018 on a trial basis, and plans to expand the use of CT technology for scanning carry-on items throughout FY2019, with an aim of deploying more than 150 units at 14 major airports. TSA asserts that CT technology offers automated capabilities to help improve detection of explosives and other threats. TSA concedes, however, that the introduction of CT technology, at least initially, will require more resources to clear increased numbers of false alarms compared to X-ray technology, and seeks to increase screener numbers at those airports where CT will be deployed to minimize these impacts on passenger screening. P.L. 115-254 directs TSA to proceed with these CT pilot programs and also to examine the feasibility of using CT technology to screen cargo carried on passenger aircraft. The act also directs TSA to assess other emerging screening technologies that may be used to enhance air cargo screening. ", "For checked baggage screening, TSA utilizes a combination of CT-based explosives detection systems and chemical trace detection technology. TSA deploys either high-speed (greater than 900 bags per hour), medium-speed (400 to 900 bags per hour), or reduced-size (100 to 400 bags per hour) CT-based systems, depending on airport needs and configurations. TSA is also funding the development of new algorithms to more reliably detect homemade explosives threats in checked baggage and reduce false positives. TSA pays for or reimburses airports for modifying baggage-handling facilities and installing new inspection systems to accommodate explosives detection technologies.", "The TSA's National Explosives Detection Canine Team Program trains and deploys canines and handlers at transportation facilities to detect explosives. The program includes approximately 370 TSA teams and 675 state and local law enforcement teams trained by TSA under partnership agreements. More than 350 of the TSA teams are dedicated to passenger screening at 46 airports. Following airport bombings in Brussels, Belgium, and Istanbul, Turkey, in 2016, there has been interest in increasing deployments of canine teams in nonsterile areas of airport terminals. P.L. 114-190 authorized TSA to provide training to foreign governments in airport security measures including the use of canine teams. The act also directed TSA to utilize canine teams to minimize passenger wait times and maximize security effectiveness of checkpoint operations. ", "P.L. 115-254 directs TSA to establish a working group to assess ways to support a decentralized, nonfederal domestic breeding program for explosives detection canines and to modernize canine breeding, medical, technical, and training standards. It further instructs TSA to develop guidance for the procurement and deployment of third-party domestic canines to enhance public area security at transportation hubs, including airports. Large hub airports that do not have their full allocation of explosives detection canine teams would be able to directly acquire canines from TSA-approved third-party sources, but canines procured in this manner would be trained by TSA personnel. Additionally, the act directs TSA to issue standards for the primary screening of air cargo by private entities using dogs and handlers not owned or employed by TSA. "], "subsections": []}, {"section_title": "Protecting Public Areas of Airports", "paragraphs": ["Incident response at airports is primarily the responsibility of airport operators and state or local law enforcement agencies, with TSA acting as a regulator in approving an airport's comprehensive security program. Federal law enforcement may also be involved in developing and reviewing response plans, but will typically not have a lead role in event response. However, federal law enforcement may assume a lead investigative role following a security incident, particularly if the event is determined to be an act of terrorism. ", "P.L. 115-254 directs TSA to establish a working group to collaborate with public and private stakeholders to develop nonbinding recommendations for enhancing security in public areas of transportation facilities. The act also directs TSA to increase funding under the law enforcement reimbursable program for airports to increase the presence of law enforcement officers in public areas to provide visible deterrents to terrorists, including in baggage claim and ticketing areas and on airport access roads, as well as at screening checkpoints. ", "On November 1, 2013, a lone gunman targeting TSA employees fired several shots at a screening checkpoint at Los Angeles International Airport (LAX), killing one TSA screener and injuring two other screeners and one airline passenger. In a detailed postincident action report, TSA identified several proposed actions to improve checkpoint security, but did not support proposals to arm certain TSA employees or provide screeners with bulletproof vests, and did not recommend mandatory law enforcement presence at checkpoints.", "The Gerardo Hernandez Airport Security Act of 2015 ( P.L. 114-50 ), named in honor of the TSA screener killed in the LAX incident and enacted in September 2015, requires airports to adopt plans for responding to security incidents and to create a mechanism for sharing information among airports regarding best practices for airport security incident planning, management, and training. It also requires TSA to identify ways to expand the availability of funding for checkpoint screening law enforcement support through cost savings from improved efficiencies mainly achieved through implementing PreCheck expedited screening protocols. TSA partially reimburses local law enforcement agencies for support at screening checkpoints, and P.L. 115-254 directs TSA to increase funding for the reimbursable program to expand protection of public areas of airports as well as screening checkpoints."], "subsections": []}, {"section_title": "Foreign Last Point of Departure Airports", "paragraphs": ["TSA regulates foreign air carriers that operate flights to the United States to enforce requirements regarding the acceptance and screening of passengers, baggage, and cargo carried on those aircraft. As part of this regulation, TSA inspects foreign airports from which commercial flights proceed directly to the United States. Officials known as Transportation Security Administration Representatives (TSARs) assess country compliance with international standards for aviation security and plan and coordinate U.S. airport risk analysis and assessments of foreign airports. TSARs also administer and coordinate TSA response to terrorist incidents and threats to U.S. citizens and transportation assets and interests overseas.", "Fifteen foreign last point of departure airports (eight in Canada, two in the Bahamas, one in Bermuda, one in Aruba, two in Ireland, and one in Abu Dhabi) have Customs and Border Protection (CBP) preclearance facilities where passengers are admitted to the United States prior to departure. Passengers arriving on international flights from these preclearance airports deplane directly into the airport sterile area upon arrival at the U.S. airport of entry, where they can board connecting flights or leave the airport directly, rather than being routed to customs and immigration processing facilities. CBP has announced its intention to expand customs preclearance to additional countries and airports. While agreements to offer preclearance at airports in Stockholm, Sweden, and Punta Cana, Dominican Republic, were finalized in 2016, preclearance operations at these airports have not yet been established. Plans to offer preclearance at other airports are still being negotiated. Assessing screening measures at preclearance airports is a particular priority for TSA. TSA is also working to increase checked baggage preclearance processing so checked baggage does not have to be rescreened by TSA at the U.S. airport of entry, which has been the practice. ", "Language in P.L. 114-190 requires TSA to conduct security risk assessments at all last point of departure airports, and authorizes the donation of security screening equipment to such airports to mitigate security vulnerabilities that put U.S. citizens at risk. P.L. 115-254 mandates that any such donated screening equipment be restored to original commercial settings and must not contain TSA-specific security standards or algorithms. Recipients of donated screening equipment must satisfactorily demonstrate that they are capable of properly maintaining it and must ensure that, once the equipment is retired from service, it does not get into the hands of terrorists or otherwise compromise security. The act also directs DHS, in coordination with the Department of State, to review and improve international aviation security standards and dissemination and implementation processes for security directives and emergency amendments to security requirements issued to domestic and foreign air carriers. It instructs TSA to work with the International Civil Aviation Organization to raise minimum standards for aviation security. P.L. 115-254 also directs TSA to work with FAA to track public charter flights between the United States and Cuba, and to brief congressional oversight committees on aviation security measures at Cuban airports that have air service to the United States. "], "subsections": []}, {"section_title": "Mitigating the Threat of Shoulder-Fired Missiles to Civilian Aircraft", "paragraphs": ["The terrorist threat posed by small man-portable shoulder-fired missiles was brought into the spotlight soon after the 9/11 terrorist attacks by the November 2002 attempted downing of a chartered Israeli airliner in Mombasa, Kenya. Since then, Department of State and military initiatives have sought bilateral cooperation and voluntary reductions of shoulder-fired missiles, formally referred to as man-portable air defense systems (MANPADS), worldwide. ", "The most visible DHS initiative to address the threat was the multiyear Counter-MANPADS program carried out by the DHS Science & Technology Directorate. The program concluded in 2009 with extensive testing and FAA certification of two systems capable of protecting airliners against heat-seeking missiles. The systems have not been deployed on commercial airliners in the United States, however, due largely to high acquisition and life-cycle costs. U.S. airlines have not voluntarily invested in these systems for operational use, and argue that the costs for such systems should be borne, at least in part, by the federal government. ", "MANPADS are mainly seen as a security threat to civil aviation overseas, but a MANPADS attack in the United States could have a considerable impact on the airline industry. While major U.S. airports have conducted vulnerability studies, efforts to reduce vulnerabilities to potential MANPADS attacks face significant logistic challenges. While Congress has not formally debated the issue since the conclusion of the DHS program in 2009, any future terrorist attempts to use standoff weapons, including shoulder-fired missiles, to attack civilian aircraft could quickly escalate this to a major national security priority. "], "subsections": []}, {"section_title": "Security Issues Regarding the Operation of Unmanned Aircraft", "paragraphs": ["The proliferation of civilian drones, also known as unmanned aircraft systems (UAS), raises potential security risks, including the possibility that terrorists could use a drone to carry out an attack against a ground target. It is also possible that drones themselves could be targeted by terrorists or cybercriminals seeking to tap into sensor data transmissions or to cause mayhem by hacking or jamming command and control signals. Two principal concerns are that drones could be used to attack critical infrastructure or high-profile targets and that unauthorized drone operations in close proximity to airports could disrupt air transportation. The 116 th Congress may have a particular interest in policies and technologies to mitigate safety and security threats posed by unmanned aircraft. ", "Terrorists could potentially use drones to carry out small-scale attacks using explosives, or as platforms for chemical, biological, or radiological attacks. In September 2011, the FBI disrupted a homegrown terrorist plot to attack the Pentagon and the Capitol with large model aircraft packed with high explosives. ", "Widely publicized drone incidents include an unauthorized flight at a political rally in Dresden, Germany, in September 2013 that came in close proximity to German Chancellor Angela Merkel; a January 2015 crash of a small hobby drone on the White House lawn in Washington, DC; a series of unidentified drone flights over landmarks and sensitive locations in Paris, France, in 2015; and drone sightings around London Gatwick and Heathrow airports in December 2018 that grounded numerous airline flights. These incidents have raised additional concerns about safety and security threats posed by small unmanned aircraft. ", "Domestically, there have been numerous reports of drones flying in close proximity to airports and manned aircraft, in restricted airspace, and over stadiums and outdoor events. In September 2017, a hobby drone collided with a National Guard Black Hawk helicopter assigned to patrol the skies over New York harbor during a meeting of the United Nations General Assembly, causing damage to one of the helicopter's rotor blades. ", "Numerous other safety incidents involving drones have been reported in the United States and abroad, but few have been tied to terrorism. However, ISIS is known to have used drones in conflict zones to conduct reconnaissance and drop explosives. While the payload capacities of small unmanned aircraft would likely limit the damage a terrorist attack using conventional explosives could inflict, drone attacks using chemical, biological, or radiological weapons could be more serious.", "Regulations for small unmanned aircraft used for commercial purposes require TSA to carry out security threat assessments of certificated operators as it does for civilian pilots. However, this requirement does not apply to recreational users, who are already permitted to operate small drones at low altitudes. Moreover, while FAA has issued general guidance to law enforcement regarding unlawful UAS operations, it is not clear that law enforcement agencies have sufficient training or technical capacity to respond to this potential threat.", "Technology may help manage security threats posed by unmanned aircraft. Integrating tracking mechanisms as well as incorporating \"geo-fencing\" capabilities, designed to prevent flights over sensitive locations or in excess of certain altitude limits, into unmanned aircraft systems may help curtail unauthorized flights.", "Language in P.L. 114-190 directed FAA to establish a pilot program to detect and mitigate unmanned aircraft operations in the vicinity of airports and other critical infrastructure. Additionally, the act directed FAA to develop an air traffic management system for small UASs that could include measures to detect and deter security threats posed by UASs. ", "The National Defense Authorization Act for FY2017 ( P.L. 114-328 ) authorized the Armed Forces and the Department of Energy to take necessary actions to mitigate threats posed by a UAS to certain security-related facilities in the United States. The act authorizes the military to detect, monitor, and track UASs; issue warnings to operators; disrupt control of a UAS, including interrupting or jamming control signals; seize or take control of the UAS; confiscate the unmanned aircraft; or use reasonable force to disable or destroy the UAS. P.L. 115-254 more broadly authorizes the Department of Justice and DHS to take similar defensive actions to protect people, facilities, or assets from credible threats posed by UASs. The act also expands the mission of the Coast Guard to include carrying out protective measures to safeguard its facilities and assets, including Coast Guard vessels and aircraft, from threats posed by unmanned aircraft. ", "P.L. 115-254 also directs FAA to coordinate with the various agencies authorized to engage in counter-unmanned aircraft (C-UAS) activities to review standards, policies, and practices with respect to maintaining safety for airspace users, protecting individuals and property on the ground, and not interfering with avionics, navigation, and air traffic control systems. Additionally, the review is to assess the adequacy of those agencies' coordination with FAA regarding C-UAS operations, the adequacy of training for personnel operating C-UAS systems, information sharing regarding airspace authorizations, and best practices for consistent C-UAS operations. The act directs FAA to work with the Department of Defense (DOD), DHS, and other relevant agencies to ensure that technologies developed to mitigate risks posed by an errant or hostile UAS do not adversely impact safe airport operations and air traffic and air navigation services. The act also directs FAA to work with DOD to streamline deployment of C-UAS and requires FAA to develop a comprehensive strategy for identifying and responding to public safety threats posed by UASs. It also requires FAA to implement a pilot program using remote detection capabilities to identify UASs in order to carry out enforcement actions against UAS operators not in compliance with applicable aviation laws and regulations. ", "P.L. 115-254 establishes a formal prohibition against civilians arming unmanned aircraft with dangerous weapons. Additionally, the act establishes criminal penalties for flying a drone over the White House grounds, the Vice President's residence, sites where the President or other individuals protected by the Secret Service are visiting, or other buildings or grounds hosting a special event of national significance. It also establishes criminal penalties for using a drone in a manner that interferes with wildfire suppression efforts or related law enforcement or emergency response activities."], "subsections": []}, {"section_title": "Aviation Cybersecurity", "paragraphs": ["There is growing concern over cybersecurity threats to aircraft, air traffic control systems, and airports. Executive Order 13636 provides broad guidance for DHS to work with FAA to identify cybersecurity risks, establish voluntary cybersecurity measures, and share information on cybersecurity threats within the broader cybersecurity framework. Additionally, 49 U.S.C. \u00a744912 specifically directs TSA to periodically review threats to civil aviation with a particular focus on specified threats, including the potential disruption of civil aviation service resulting from a cyberattack.", "TSA has indicated that its approach to cybersecurity thus far has not been through regulation, but rather through voluntary collaboration with industry. Under this framework, TSA formed the Transportation Systems Sector Cybersecurity Working Group, which created a cybersecurity strategy for the transportation sector in 2012. Also, in coordination with the FBI and industry partners, TSA launched the Air Domain Intelligence Integration Center and an accompanying analysis center in 2014 to share information and conduct analysis of cyberthreats to civil aviation.", "In recognition of those threats, FAA has developed a software assurance policy for all FAA-owned and FAA-controlled information systems. However, according to an April 2015 GAO report, while FAA has taken steps to protect air traffic control systems from cyberthreats, it faces continuing challenges in mitigating cyberthreats, particularly as it transforms air traffic control systems under its NextGen modernization initiative. While FAA has adopted an evolving framework to address the cybersecurity of its systems, a January 2018 GAO report warned that new aircraft tracking technologies that will transform air traffic control in the coming years under NextGen have unmitigated cybersecurity vulnerabilities, including vulnerabilities to jamming, hacking, and spoofing of signals, that could compromise air traffic operations as well as pose a threat to national security and military aircraft operations.", "For systems onboard aircraft, FAA requires cybersecurity to be addressed in the existing airworthiness certification process. Large commercial aircraft and aviation systems manufacturers now typically collaborate with software security companies to attain high levels of assurance for software embedded in avionics equipment. Despite efforts to design aircraft systems to be resilient to cyberthreats, in April 2015 TSA and the FBI issued warnings that the increasing interconnectedness of these systems makes them vulnerable to unauthorized access and advised airlines to look out for individuals trying to tap into aircraft electronics and for evidence of tampering or network intrusions. ", "FAA separately addresses cybersecurity of government-owned air traffic control systems and certified aircraft systems. However, GAO has cautioned that FAA's current approach to cybersecurity does not adequately address the interdependencies between aircraft and air traffic systems, and consequently may hinder efforts to develop a comprehensive and coordinated strategy. While it identified no easy fix, GAO recommended that FAA develop a comprehensive cybersecurity threat model, better clarify cybersecurity roles and responsibilities, improve management security controls and contractor oversight, and fully incorporate National Institute of Standards and Technology information security guidance throughout the system life cycle.", "Language in P.L. 114-190 mandated development of a comprehensive strategic framework for reducing cybersecurity risks to the national airspace system, civilian aviation, and FAA information systems. P.L. 115-254 directs FAA to review and update the framework to address known cybersecurity risks to the aviation system and short-term and long-term objectives for addressing these risks. The act also directs FAA to address cybersecurity in the certification of aircraft avionics systems and component software, and the cybersecurity of systems and technologies relating to the air traffic control system. The act also directs FAA to develop an integrated cybersecurity testbed for air traffic control modernization technologies. It orders a National Academy of Sciences study to develop recommendations on how to increase the size, quality, and diversity of FAA's cybersecurity workforce.", "P.L. 115-254 directs TSA to implement the framework for improving critical infrastructure cybersecurity developed by the National Institute of Standards and Technology to manage cybersecurity risks and conduct cybersecurity vulnerability assessments, including cybersecurity evaluations of the PreCheck program as well as transportation worker credentialing programs that contain data on individuals. The act also directs TSA to coordinate with international counterparts to harmonize validation processes, allowing reciprocal recognition of security and screening technology approvals that comply with agreed-upon standards relating to performance as well as information security and cybersecurity. The act also directs DHS to review global aviation security standards and practices, including assessments of the cybersecurity risks of security screening equipment. ", "In November 2018, TSA released a new cybersecurity roadmap providing a broad framework for how it will work with transportation industry and government stakeholders to address cybersecurity risks, including risks to aviation. The specific roles of TSA and FAA in regulating cybersecurity, particularly in areas such as aircraft and avionics certification and air traffic control, which have historically been FAA responsibilities, may be a specific topic for congressional oversight during the 116 th Congress. "], "subsections": []}]}, {"section_title": "Transit and Passenger Rail Security37", "paragraphs": ["Bombings of and shootings on passenger trains in Europe and Asia have illustrated the vulnerability of passenger rail systems to terrorist attacks. Passenger rail systems\u2014primarily subway systems\u2014in the United States carry about five times as many passengers each day as do airlines, over many thousands of miles of track, serving stations that are designed primarily for easy access. The increased security efforts around air travel have led to concerns that terrorists may turn their attention to \"softer\" targets, such as transit or passenger rail. A key challenge Congress faces is balancing the desire for increased rail passenger security with the efficient functioning of transit systems, the potential costs and damages of an attack, and other federal priorities.", "The volume of ridership and number of access points make it impractical to subject all rail passengers to the type of screening all airline passengers undergo. Consequently, transit security measures tend to emphasize managing the consequences of an attack. Nevertheless, steps have been taken to try to reduce the risks of an attack as well. These include vulnerability assessments; emergency planning; emergency response training and drilling of transit personnel (ideally in coordination with police, fire, and emergency medical personnel); increasing the number of transit security personnel; installing video surveillance equipment in vehicles and stations; and conducting random inspections of bags, platforms, and trains.", "The challenges of securing rail passengers are dwarfed by the challenge of securing bus passengers. There are some 76,000 buses carrying 19 million passengers each weekday in the United States. Some transit systems have installed video cameras on their buses, but the number and operating characteristics of transit buses make them all but impossible to secure.", "In contrast with the aviation sector, where TSA provides security directly, security in surface transportation is provided primarily by the transit and rail operators and local law enforcement agencies. TSA's main roles are oversight, coordination, intelligence sharing, training, and assistance. However, it provides some operational support through its Visible Intermodal Prevention and Response (VIPR) teams, which conduct operations with local law enforcement officials, including periodic patrols of transit and passenger rail systems to create \"unpredictable visual deterrents.\" Several presidential Administrations have sought to reduce the size of the VIPR program, the value of which has yet to be demonstrated, but Congress has sought to increase the size of the program.", "Congressional efforts to promote the security of passenger rail and transit include providing grants to service providers, requiring those providers considered to be high-risk targets (by DHS) to have security plans approved by DHS, and requiring DHS to conduct security background checks and immigration status checks on all transit and railroad frontline employees. According to TSA, its three primary objectives for reducing risk in transit are to", "increase system resilience by protecting high-risk/high-consequence assets (i.e., critical tunnels, stations, and bridges); expand visible deterrence activities (i.e., canine teams, passenger screening teams, and antiterrorism teams); and engage the public and transit operators in the counterterrorism mission.", "TSA surface transportation security inspectors conduct assessments of transit systems (and other surface modes) through the agency's Baseline Assessment for Security Enhancement (BASE) program. The agency has also developed a security training and security exercise program for transit. TSA's program for securing surface transportation is known as Risk Mitigation Activities for Surface Transportation (RMAST).", "The intent of the RMAST program is to focus TSA's limited surface security resources on high-risk entities and locations. However, GAO reported in 2017 that TSA had not identified or prioritized high-risk entities for the RMAST program to focus on.", "The surface transportation inspector program has been a focus of congressional interest. Issues of concern to Congress have included whether the inspectors promoted from screening passengers at airports have sufficient expertise in surface transportation security; the administrative challenge of having the surface inspectors managed by airport-based federal security directors who themselves typically have no surface transportation experience; and the security value of the tasks performed by surface inspectors. The number of surface inspectors declined from 404 in FY2011 to 222 (full-time equivalent positions) in FY2018. TSA attributed the decrease to efficiencies achieved through focusing efforts on the basis of risk. However, in 2017 GAO reported that surface transportation inspectors were spending more time on the surface transportation mode that TSA had identified as the lowest risk than on the one identified as the highest risk. Surface inspection field offices are located near airports, and surface inspectors may spend a significant portion of their time on tasks related to aviation safety, but TSA does not have complete information on the extent to which surface inspectors are tasked to work on aviation security.", "GAO reported in 2014 that lack of guidance to TSA's surface inspectors resulted in inconsistent reporting of rail security incidents and that TSA had not consistently enforced the requirement that rail agencies report security incidents, resulting in poor data on the number and types of incidents. GAO also found that TSA did not have a systematic process for collecting and addressing feedback from surface transportation stakeholders regarding the effectiveness of its information-sharing effort. In a 2015 hearing, GAO testified that TSA had put processes in place to address these issues.", "DHS provides grants for security improvements for public transit, passenger rail, and occasionally other surface transportation modes under the Transit Security Grant Program. The vast majority of the funding goes to public transit providers. CRS estimates that, on an inflation-adjusted basis, funding for this program has declined 84% since 2009, when Congress allocated $150 million in the American Recovery and Reinvestment Act of 2009, in addition to routine appropriations (see Table 1 ).", "In a 2012 report, GAO found potential for duplication among four DHS state and local security grant programs with similar goals, one of which was the public transportation security grant program. Despite this finding, Congress has not supported consolidation of the programs, though appropriators have expressed concern that grant programs have not focused on areas of highest risk and that significant amounts of previously appropriated funds have not yet been awarded to recipients.", "In P.L. 114-50 , Congress directed TSA to ensure that all passenger transportation providers it considers as having high-risk facilities have in place plans to respond to active shooters, acts of terrorism, or other security-related incidents that target passengers. "], "subsections": []}, {"section_title": "Port and Maritime Security49", "paragraphs": ["The bulk of U.S. overseas trade is carried by ships, and thus the economic consequences of a maritime terrorist attack could be significant. In the aftermath of the 9/11 attacks, the U.S. Customs Service (now Customs and Border Protection, CBP) and the Coast Guard realized that they needed to \"push the borders out\"\u2014that is, they needed to begin screening vessels and cargo before they reached a U.S. port. While the previous screening methods that occurred at U.S. ports were sufficient to intercept other illicit cargo (e.g., drug smuggling) they could be too late in the case of intercepting a terrorist bomb. Thus, Customs instituted the \"24-hour rule,\" requiring importers to submit shipment information to Customs a day before the shipment arrived at the overseas port of loading rather than submitting this information within days of its arrival at a U.S. port. Customs analyzes this information and other intelligence to flag shipments it believes are higher risk or have an unknown risk. Under the Container Security Initiative, those riskier shipments are examined by imaging machines or possibly unloaded before being loaded on a vessel. (It is practically impossible to examine shipping containers once they are aboard a vessel or while the ship is at sea.) ", "Similarly, the Coast Guard recognized the need to extend terrorist screening beyond U.S. ports. It required ships to announce and report their intended arrival four days before entering a U.S. harbor. The Coast Guard examines the vessel's particulars, its crew, and past history to evaluate the security risk. The Coast Guard pushed for establishing international standards for port security at the International Maritime Organization so that overseas ports sending cargo to the United States would abide by the same security regulations as U.S. ports. The Coast Guard also visits foreign ports to assess their security measures.", "In addition to pushing the borders out, these agencies have instituted multiple layers of security that cover the four main elements of maritime transportation: ports, vessels, cargo, and workers. CBP's Customs Trade Partnership Against Terrorism (C-TPAT) program identifies a series of practices that importers are to follow that are designed to cover a shipper's entire supply chain\u2014from the overseas point of origin to final delivery in the United States. For instance, C-TPAT includes procedures and independent checks when loading a shipping container and applying the seal on its doors to prevent tampering while in route. In addition to container inspection equipment installed at overseas ports, CBP has installed radiation portal monitors at each truck exit gate in U.S. ports. ", "The Coast Guard requires vessel owners, port authorities and their terminal operators to submit security plans that describe their access control measures, drills and exercises to respond to a security incident, and other measures to secure their facilities. The Coast Guard recognizes that U.S. ports vary greatly in terms of their geographies and types of cargo they handle. The port security plans allow the industry to develop plans specific to their vulnerabilities. An important goal of the Coast Guard is \"maritime domain awareness\"\u2014knowledge of the varied legitimate vessel activity taking place in a harbor (cargo, fishing, recreational) so as to spot any abnormal or suspicious activity. One aspect of this is requiring many vessels to be equipped with Automatic Identification Systems (transponders). The Coast Guard, along with TSA, has also instituted a port worker background check for longshoremen, truck drivers, vessel crews, and others that need access to port terminals. A Transportation Worker Identification Credential (TWIC) card must be obtained from the TSA and renewed every five years.", "Congress authorized much of the Coast Guard's role in maritime security in the Maritime Transportation Security Act of 2002 (MTSA; P.L. 107-295 ) and CBP's role in the Security and Accountability for Every Port Act of 2006 (SAFE Port Act; P.L. 109-347 ). Congress modified these maritime security programs in Division J of the FAA Reauthorization Act of 2018 ( P.L. 115-254 ).", "Two aspects of maritime security that have drawn attention recently are cybersecurity and the use of drones for coastal surveillance. The development of electronic navigation (\"e-navigation\"), involving the replacement of paper charts with electronic charts (already commonplace) or the replacement of channel marker buoys with virtual aids to navigation (in progress), could create vulnerabilities to cyberattack. In June 2017, a cyberattack on Maersk Line, the largest container carrier, prevented the carrier from taking bookings and required it to close its U.S. terminals for two to three days. A less severe attack affected COSCO Shipping in July 2018. P.L. 115-254 incorporated cybersecurity as a required element in MTSA security plans for terminal and vessel operators. The Coast Guard has provided guidance for vessels and ports to address cyber vulnerabilities, and has incorporated cybersecurity into existing enforcement and compliance programs. The Coast Guard has added cybersecurity training to the requirements for mariner licensing and for port security officer qualifications. ", "Greater use of unmanned aircraft systems potentially offers significant efficiencies in performing various Coast Guard missions, including coastal surveillance. Congress has provided funding for the use of drones aboard national security cutters. The Coast Guard has tested both hand-held drones and larger drone aircraft to extend the surveillance range of its patrol vessels. Since 2015, the Coast Guard has been testing UASs in the Arctic for missions such as surveying ice conditions, marine environmental monitoring, marine safety, and search and rescue. The unmanned aircraft being tested each summer can be launched from land or a Coast Guard cutter. The Coast Guard Authorization Act of 2018 ( P.L. 115-282 , \u00a7812) requests a study by the National Academy of Sciences as to how drones could be used to enhance the Coast Guard's maritime domain awareness. The act also allows the Coast Guard to lease but not design its own large UASs if funding is provided for design and construction of Offshore Patrol Cutters (\u00a7304)."], "subsections": []}]}}
{"id": "R41364", "title": "Capital Gains Tax Options: Behavioral Responses and Revenues", "released_date": "2019-04-30T00:00:00", "summary": ["Compared with most other tax provisions, the potential revenue gain scored for an increase in capital gains taxes is strongly affected by behavioral responses assumed by the Joint Committee on Taxation (JCT) and the Department of the Treasury. As an illustration, the Obama Administration estimated in February 2010 that allowing the Bush tax cuts for capital gains to expire would have raised $16 billion of revenue in FY2019. Yet, based on Congressional Budget Office (CBO) projections in January 2010, the current effective capital gains tax was 13.3% in 2008 and would have increased to 17.9% in 2019; applying the differential in these rates to the realizations in 2019 would have produced a revenue difference of $40 billion. Although some of this differential could arise from different forecasts, assumptions about behavioral responses are the main reason for the reduction in projected revenues.", "Because these behavioral responses limit the potential revenue scored from a tax increase on capital gains and because of concerns that most income of very high-income individuals is in the form of capital gains (whether accrued or realized), proposals have been advanced to tax capital gains currently (as accrued) by marking to market publicly traded securities and imposing a look-back tax on difficult-to-value assets. Such a change faces a number of difficulties; thus it is important to understand the evidence of the behavioral responses. The analysis in this study suggests that the Administration's projections and those of the JCT, absent a change in their realizations response, may understate revenue gains from increasing capital gains tax rates.", "Realizations responses in revenue projections by the revenue-estimating agencies (Joint Committee on Taxation and the Treasury) were publicly discussed at the end of the 1980s, in the midst of a contentious debate. The larger the absolute value of the elasticity (the percentage change in realizations divided by the percentage change in taxes), the smaller the revenue gain; with elasticities larger than one in absolute value, a loss would occur. Estimated elasticities in the literature prior to 1990 ranged from 0.3 to almost 3.8, leaving limited guidance for revenue-estimating agencies. JCT used an elasticity of 0.76, whereas Treasury used an elasticity of one.", "Concerns were raised at that time that there were serious problems with this evidence. Perhaps the most significant concern was that the larger results from studies of individuals reflected a timing or transitory response (high-income taxpayers with variable income chose to realize gains when tax rates were temporarily low). This transitory response is not appropriate for assessing a permanent change.", "Evidence and studies since that time suggest that the permanent elasticity is considerably lower than what appeared to be the case in 1990. The surge in realizations in 1986 as a capital gains tax rate increase was preannounced provided compelling evidence of the importance of a transitory response. A study of the limits of realizations (which cannot exceed accruals in the long run) suggested the elasticity (percentage change in realizations divided by the percentage change in the tax rate) could be no more than 0.5 in absolute value (evaluated at a 22% tax rate), and a midpoint of 0.25. A number of new econometric studies, using new techniques to isolate the permanent response, suggested elasticities of around 0.5 or less. Other recent studies suggested larger responses. The JCT appears to maintain its original assumption, while the Treasury response has been reduced to be similar to JCT's; both appear to exceed the realizations limit.", "Simulations indicate that an increase in capital gains tax rates of five percentage points would raise slightly more than $40 billion on a static basis for 2019, about $30 billion using the 0.25 elasticity and $18 billion using the 0.5 elasticity. The JCT estimates would likely be around $10 billion, reflecting a 0.68 elasticity. Taxing gains on an accrual basis would eliminate this response in the long run and gain additional revenues on currently unrealized gains."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Bush tax cuts, enacted in 2001 and 2003, were scheduled to expire at the end of 2010. Among the expiring tax provisions was a lower 15% rate for long-term capital gains and dividends, with a 0% tax rate on capital gains and dividends for taxpayers subject to ordinary rates of 15% or less. Absent legislative action, capital gains tax rates would have reverted to pre-2003 rates of 20% and 10% (18% and 8% for assets held for five years or more), and dividends would be taxed at ordinary rates. The highest ordinary tax rate is currently 35% but, absent change, will rise to 39.6%.", "President Obama proposed in both his budget outlines (FY2010 and FY2011) to retain the 15% and 0% rates for lower- and middle-income taxpayers, but to tax both dividends and capital gains at 20% for married couples with income of $250,000 or more and single taxpayers with income of $200,000 or more. The tax rates were temporarily extended through the end of 2012 by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ( P.L. 111-312 ).", "The final resolution at the beginning of 2013 (American Taxpayer Relief Act of 2012, P.L. 112-240 ) was to tax capital gains for higher-income individuals at the higher rate, but at incomes of $480,050 for married couples and $453,350 for singles in 2018, considerably higher than those proposed by President Obama. ", "Compared with most other tax provisions, the potential revenue gain scored for an increase in capital gains taxes is strongly affected by behavioral responses assumed by the Joint Committee on Taxation (JCT) and the Department of the Treasury. As an illustration, the Obama Administration estimated in February 2010 that allowing the Bush tax cuts for capital gains to expire would have raised $16 billion of revenue in FY2019. Yet, based on Congressional Budget Office (CBO) projections in January 2010, the current effective capital gains tax was 13.3% in 2008 and would have increased to 17.9% in 2019; applying the differential in these rates to the realizations in 2019 would have produced a revenue difference of $40 billion. Although some of this differential could arise from different forecasts, assumptions about behavioral responses are the main reason for the reduction in projected revenues.", "To address these potential behavioral responses, some supporters of increasing taxes on capital gains (given that such gains comprise a significant part of the income of high-income individuals) have proposed applying mark-to-market rules to tax capital gains as accrued, which would eliminate the realization response for affected assets. Assets that are less easily valued could be subject to look-back treatment, which would increase the tax to achieve the same after-tax earnings that would have occurred if the tax were imposed on an accrual basis. Such an approach has a number of complexities, and to the extent that these changes aim to address the behavioral response, it is important to understand the limits this behavioral assumption imposes on options for increasing taxes on realized capital gains and the empirical basis for these estimated effects. ", "Realizations responses in revenue projections by the revenue-estimating agencies (JCT and Treasury) were publicly discussed at the end of the 1980s, in the midst of a contentious debate. This report explains how these responses affect revenues, discusses the debate that occurred in the late 1980s, reviews research since that time, and analyzes the implications for revenue effects. The analysis in this report suggests that the Obama Administration's projections and those of the JCT, absent a change in their realizations response, may likely understate revenue gains from allowing lower capital gains tax rates to expire."], "subsections": []}, {"section_title": "Realizations Responses and Revenue", "paragraphs": ["Because taxpayers can choose to realize capital gains, economists and policymakers have been concerned about a reduction in the potential revenue from capital gains taxes because those taxes reduce realizations. It is possible for a tax increase to lose revenue if the response is large enough. If realizations are postponed until death, the gains escape tax entirely. Thus, there is an incentive to delay and perhaps ultimately avoid the tax by not selling assets.", "Capital gains realizations responses are typically expressed in the form of an elasticity, which is the percentage change in realizations divided by the percentage change in taxes. These elasticities are expected to be negative but are often reported without the minus sign (and will be in this report). If realizations increase by 5% when the tax rate falls by 10%, the elasticity is 0.5; if realizations increase by 10% when the tax rate falls by 10%, the elasticity is one; if realizations rise by 20% while the tax rate falls by 10%, the elasticity is two.", "The higher the value of the elasticity, the smaller the revenue gain or loss from a capital gains tax increase or decrease. If the elasticity is less than one, a tax increase gains revenue; if the elasticity is greater than one, the tax increase loses revenue. For a small increase in tax rates, the ratio of revenue gain projected to the gain realized with no behavioral response (static gain) is one minus the elasticity. Thus, if the elasticity is 0.25, 75% of the static revenue gain will be realized (that is (1-0.25) times the static gain). If the elasticity is 1.25, the tax increase will lose 25% of the static gain (i.e., (1-1.25) equals minus 0.25).", "Three types of elasticities are relevant to capital gains realizations and revenues and are discussed in the economics literature. The first is the permanent elasticity, which is most relevant for permanent tax law changes: it measures the longer-run (after a year or two) realizations response to a permanent change in tax rate. The second is the short-run elasticity, which measures the short-term response to a permanent change. The third is the transitory elasticity, which measures the response to a temporary tax increase or decrease. This transitory effect might occur because the incomes of wealthy individuals (and the associated taxes due) may vary from year to year, and they time realizations in years when their tax rates are low. It may also occur in the aggregate when a tax change is pre-announced. For example, if taxpayers learn that the tax is increasing next year, they may shift realizations into the current year to take advantage of this year's lower tax rate.", "Although this discussion will focus on the magnitude and effects of permanent elasticities, these short-term and transitory effects constitute both a challenge in estimation and affect shorter-term responses to changes. Thus a brief discussion is in order.", "The short-term realizations elasticity has most often been discussed (as it was in the late 1980s) in the context of a capital gains tax cut. The idea behind such as response is that taxpayers have a large stock of accrued gains that they would have already realized if the tax rate were lower and thus there will be a larger increase in realizations in the first year or two.", "Applying such an effect has two caveats. The first is that the short-term response may be muted if there has been a recent increase in realizations. For example, unbeknownst to revenue estimators in the late 1980s (because the data were not available), there had been a surge in realizations in 1986 because of the pre-announced increase in capital gains taxes for 1987 and later years as part of the Tax Reform Act of 1986. With so many of these accrued gains exhausted, it was unlikely that there would have been a very large short-run response had a tax cut been enacted in 1990.", "Second, and more important for the current issue, there is no reason to expect that short-run responses apply to a tax increase that is not pre-announced, because, although a cut in taxes may unleash significant short-term realizations from the existing stock of gains, an increase should not cause a similar contraction. The stock of gains that has not been realized because of taxes will simply remain unrealized, with no effect on realizations.", "The transitory response is sometimes used interchangeably with the short-term response, but transitory responses can be thought of as occurring because of a temporary lower or higher rate. As noted above, a large aggregate transitory response occurred in 1986 because of the passage of legislation that raised future tax rates significantly. A large increase also occurred in 2012 for the same reason. However, because the higher-income taxpayers who realize most capital gains can have significant fluctuations in income and taxes, transitory responses occur among individuals even in years when the law does not change. This possibility of a transitory response was more pronounced in the period (prior to 1987) when capital gains were subject to graduated rates (because the tax benefit was an exclusion rather than a fixed rate).", "Statistical estimates of realizations responses can be based on a variety of functional forms, but one of the most common functions causes the elasticity (percentage change in gains divided by a percentage change in tax rates) to rise proportionally with the tax rate. Therefore elasticities should be reported with reference to the assumed tax rate. For much of the discussion in the 1990 debate, the relevant tax rate was the one associated with the tax change under consideration, the 22% rate midway between the current and new rate. Many elasticities discussed at that time reflect that rate. Capital gains realizations elasticities are expected to be negative but the elasticities in this report will be stated and referred to in absolute value (without the minus sign).", "This formulation also leads to a revenue-maximizing tax rate, which is the tax rate at which the most capital gains tax revenue will be realized. The underlying equations are presented in Appendix A .", "For considering the effects of allowing tax increases, the 22% rate appears appropriate as a starting point (although the effect would roughly reflect the midpoint between the old and new tax rates). Under current law, in addition to the rates of 0%, 15%, and 20%, there is also the 3.8% net investment income tax enacted by the 2010 health care law for taxpayers with incomes above $250,000 for couples and $200,000 for singles. The Congressional Budget Office estimates an overall marginal tax rate of 21.2% for long-term capital gains, and the Department of the Treasury estimates a similar rate of 21.3%. ", "Note that these issues surrounding capital gains taxes and realizations are not applicable to taxes on dividends, which are estimated by CBO to be taxed at a slightly lower marginal rate of 18.4%."], "subsections": []}, {"section_title": "The 1990 Debate", "paragraphs": ["In 1990, the George H. W. Bush Administration proposed to reduce the capital gains tax rate that had been adopted in 1986. That legislation increased the top rate on capital gains from 20% to 28% by taxing capital gains as ordinary income. During the late 1980s, the revenue-estimating agencies (the Joint Committee on Taxation and the Department of the Treasury's Office of Tax Analysis) had begun to investigate and add behavioral responses in the form of realizations elasticities. The Congressional Budget Office also began to include tax variables in their regressions used to forecast baseline capital gains revenues.", "Because of the strict budget constraints applying at that time, the issue of revenue cost was a crucial one in 1990. The Administration chose an elasticity (at a 22% rate) of 0.98. The JTC used an elasticity of 0.76.", "Two types of data were used to estimate the realizations response. The first was aggregate time series, which related total realizations in different years to the tax rate in that year. The second was micro-data studies, which examined individual taxpayers' realizations in comparison to their tax rates. These studies included cross-section studies (which compare taxpayers in a single year), pooled cross-section time-series (which compare taxpayers and include many years but do not follow individual taxpayers over time) and panel studies (which compare taxpayers over time, tracking each taxpayer).", "As shown in Table B -1 in Appendix B , estimates of the realizations response varied dramatically, from 0.3 to almost 4. To make the revenue implications clear, an elasticity of 0.3 would imply, for a small increase in the tax rate, that the revenue gained would be 70% of the revenue projected if there were no realizations response. An elasticity of 4 implies a loss of three times the projected revenue gained if there were no behavioral response. Estimates based on aggregate time series were generally lower, ranging from 0.3 to 0.9 (70% to 10% of revenue gained). Estimates based on individual taxpayer data ranged from 0.55 to 3.8.", "The range of estimated responses and their implications for revenue implied serious problems with the estimation methods. The range was particularly broad for estimates based on individual data. The JCT took the position that the time series results were more reliable, and they estimated their own elasticity using this methodology. The Treasury never actually provided a specific methodology for their number, but rather reported it as a conservative choice given the realizations estimates.", "Researchers trying to estimate the realizations response faced many problems, which are discussed in more detail in Appendix B . In general, individual data are preferred for estimation, because aggregation can produce a bias and loses information. In addition, it is very difficult to control for other factors that change over time.", "More important, for using individual data, was the problem of distinguishing between permanent and transitory responses. Because income, especially of high-income individuals who realize most gains, can fluctuate over time, tax rates also vary over time. Individuals would be expected to time realizations to coincide with periods of low rates. Individuals might also need to cash in assets when income (and therefore taxes) is unusually low. This concern basically precluded relying on simple cross-section results for permanent responses. Thus, no revenue-estimating entity relied on the larger elasticities (close to 4) produced by some of these micro-data studies.", "Arguments were made at the time that panel data, which followed individuals over several years, could be used to separate these elasticities, because in these data individual tax rates could be examined over several years. These studies used the average of the current, previous, and future tax rate as a permanent rate. These studies reported smaller elasticities, but ones that still were well above one in some cases.", "Because of an incorrectly reported elasticity, the three panel studies available at that time appeared to produce a much narrower range of results. These panel results probably influenced the Treasury to choose a larger elasticity than those suggested by the aggregate time series data. However, as noted in the following section, the last panel study also had a very large elasticity. Thus, although attempts were made to address the problem of transitory effects with panel studies, this procedure may not correct for the transitory effect, perhaps because periods of lower income or higher income can continue for several years.", "Although panel studies offered some possibility of controlling for transitory effects, the panels available were for only a few years. If the higher-income individuals who realize most gains experienced prolonged spells of higher or lower than normal income, panel studies might reduce the transitory element, but estimates could still reflect some transitory response elements. Thus panel estimates could still be too large, whereas the biases in time-series estimates remained uncertain. Neither approach was without flaws.", "Ultimately the proposed tax cuts were not enacted at that time (although they were eventually reduced in 1997 and again in 2003)."], "subsections": []}, {"section_title": "Developments Since 1990", "paragraphs": ["The range of realizations elasticities, even if confined to time series estimates, is very broad for revenue-estimating purposes or otherwise evaluating capital gains taxes. Researchers turned their attention to methods to produce more precise and reliable estimates.", "One important event that influenced thinking about these elasticities was the sharp spike in realizations that occurred in 1986. Between 1985 and 1986, realizations rose from $170.6 billion to $324.4 billion, falling to $144.2 billion in 1987. A study of this phenomenon using taxpayer data showed that these gains occurred in December, and were seven times the gains in December of the previous year. This increase, which took place when a tax increase was passed for the following years, was evidence of the magnitude of transitory realizations responses and contributed further to concerns about the reflection of transitory responses in the econometric studies.", "Eleven additional academic econometric studies of the realizations response have been identified beginning in 1990, and nine of those studies are reported in Table 1 . The table also includes estimates of practices by CBO, JCT, and Treasury. CBO cautions that its realizations estimate is not for the purpose of estimating revenues. Rather, the tax rate is included as part of an overall statistical study which includes many variables used to project capital gains realizations for the baseline.", "The second column of Table 1 reports the coefficient which, multiplied by the tax rate, will produce the elasticity. The studies are arrayed by elasticity, from smallest to largest.", " Table 1 also includes the results of a study by Gravelle, which was not an econometric study. Some analysts had observed that large estimated elasticities from cross-section and panel studies implied large realizations that were far outside the scope of historical experience. Gravelle's study noted that there was a limit to the realizations response in that, for a permanent elasticity, realizations could not exceed accruals (the change in the market value of assets). If every asset were sold every year, realizations would equal accruals, but they could be no larger. The study provided data on the ratio of realizations to accruals, along with tax rates, over a long period of time, and used the average values to estimate the upper limit of the realizations elasticity. The study found that limit to be 0.5, below the estimates of all existing cross-section and panel studies, and below most of the time series studies. Moreover, the 0.5 limit is an upper limit and implies that in the absence of taxes and transactions costs individuals would sell every asset every year. Because some assets are unlikely to be sold even in those circumstances, because investors are satisfied with their investments, the elasticity is likely to be considerably lower. (For example, individuals and families holding controlling shares of corporations are unlikely to sell their assets, as are individuals with investments in family businesses and real estate, or simply those whose portfolios are satisfactory.) Table 1 , therefore, reports both the upper limit and the midpoint of this study.", "This study was prepared in 1991, and covered the data from 1954 to 1989. In the study, the realizations to accruals level was estimated at 46% and the tax rate was estimated at 18.4%. More recent evidence covering the period 1989-2013 finds a similar ratio, 48%, and a similar tax rate of 17.3%. These findings support the limits to realizations elasticities found in the initial Gravelle study. ", "As an illustration, the Dowd, McClelland, and Muthitacharoen panel study that produced the highest coefficient implies that if all income taxes and transactions taxes and costs were eliminated, realizations would 4.25 times their current value, when the level of accruals suggests they could be no more than twice as large. ", "That same study also corrected the elasticity for the most recent panel study of the 1980s, indicating an elasticity of 3.2, similar to the cross-section results. This correction reinforced the observation that the panel studies could not necessarily address the transitory issues that plagued cross-section studies.", "Four of the nine studies are panel studies, three are times series, and two are cross-state aggregate panel studies. The Burman and Randolph study was an early innovative econometric study because it used variation in state tax rates to estimate the permanent elasticity. That study found a very small elasticity that was statistically insignificant and a very large (in excess of 6) transitory elasticity. Because state tax rates are exogenous and presumed permanent, their evidence suggested a very small response. Auerbach and Siegel replicated their approach with different years and found similar results. The findings in these studies were consistent with the Gravelle estimate of limits in that they fell below the upper limit of elasticities. Most subsequent studies have incorporated state tax rates.", "The Auten and Joulfaian study and the Dowd, McClelland, and Muthitacharoen study are individual panel studies and had the highest elasticities of any of the studies. Two aspects were likely to lower their elasticities compared with earlier panel studies: they added state tax rates and they had a longer panel, so that time series effects probably became more important. Both studies, however, continued the approach used by earlier panel studies that used adjacent years to capture permanent tax rates. This period may be too short, and for that reason their estimates probably continue to reflect transitory, timing responses. These timing responses are not appropriate for measuring a permanent response. The Dowd, McClelland, and Muthitacharoen study also provided sensitivity analysis, producing a wide range of estimates reflecting different specifications, inclusion of different variables, and different time periods. For example, considering different time subperiods, the coefficient ranged from 1.8 to 8.0, although the latter estimate would seem questionable because it also produced a large transitory elasticity of the wrong sign. ", "Three of the studies (along with CBO's estimate) used aggregate time series data. The Gillingham and Greenlees study was the earliest and added a few years of data to some earlier studies, whereas the other time series studies (Eichner and Sinai) added many more years. Both studies control for 1986, which was an unusual year. It appears that more years added to time series data lead to lower elasticities; however, all of the time series results fall within the range of the eight time series studies from the 1980s. One time series study falls below the upper limit estimated by Gravelle, one is about at the upper limit, and one is considerably larger. The third time series study was based on Australian data (one of the rare studies undertaken on data outside of the United States). ", "The two state studies, by Bogart and Gentry and by Bakija and Gentry, used aggregate data over time grouped by state. Because they include time controls, they also relied on cross-state variation to identify a permanent response. Their results were slightly above the Gravelle study's upper limit. Bakija and Gentry also show that the control for state fixed effects is important; coefficients rise from 2.91 to 3.88 without state fixed effects. ", "The elasticities in Table 1 are closer together and lower than those in the studies of the 1980s. JCT's current coefficient appears to be similar to the estimate used during the 1990 debate (although the elasticity was slightly higher in 1990, that appears to be due to the exclusion of small portfolio effects; without those, it would probably be around 0.76). The Treasury estimate has been reduced and is now of the same rough magnitude as the JCT assumption.", "Given the evidence from panel studies that use state variation to identify permanent effects and studies of the reasonableness of elasticities given realizations responses, both JCT and Treasury estimates appear high, so that they likely understate the revenue to be gained from increasing the tax rate.", " Table 2 uses the elasticities from Table 1 and the CBO projections to compare these revenue estimates for raising the tax rate on capital gains by five percentage points, for 2019, based on those results. (The method for calculating the revenue is in Appendix A .) The estimates are based on CBO's estimates of revenue for 2019 of $199 billion, and their average marginal tax rate of 21.2%. The $199 billion is adjusted down to $180 billion to reflect the share of gains that are short-term gains taxed at ordinary rates, as reported by the Department of the Treasury. ", "As shown in Table 2 , the revenue gain as a percentage of static gain ranges from a reduction of 26% to a reduction of 97%. The revenue gain for the five-percentage-point tax rate increase ranges, from the lowest to the highest elasticity, from $31.4 billion per year to $1 billion, a range of $30.4 billion.", "These results also illuminate the interest in adopting measures such as an accrual-based taxation that could also include a look-back method. (See Appendix A for an explanation of calculating taxes under the look-back method.) Such a method would not only eliminate the realizations response, increasing capital gains revenues for the five-percentage-point increase from $10.3 billion to $43.2 billion, but by taxing unrealized gains it would collect $222 billion on unrealized gains in a steady state ($180 billion at the old rates and $222 billion at the new rate). ", "Which results are most reliable? The Auten and Joulfaian panel study, judging by problems with short panels in the 1980s, probably retains some transitory elasticity effects because it applied the same methodology. Although it also reflects time series elements, the estimate is probably an overstatement of the permanent elasticity. It also substantially exceeds the upper limit estimated by Gravelle. The Dowd, McClellan, and Muthitacharoen study produced the largest elasticity and also uses adjacent periods to measure the transitory elasticity. It also indicates dramatically differing estimates from different subperiods, implying some fragility in the estimates. ", "Turning to time series, the Eichner and Sinai results include many more years than Gillingham and Greenlees, suggesting that this time series result should be preferred. CBO includes even more years. Given the findings of the remaining studies and of Gravelle's limit calculations, the elasticity is likely below 0.5.", "These findings suggest that revenue-estimating assumptions retained from the 1990 debate may understate the revenue gain. In all cases, evidence from both post-1980s econometric studies and the limits study indicates that there will be revenue gains from increasing the tax rate by five percentage points, although these gains are negligible relative to the static gain for the highest elasticity. Assuming the lower elasticities (and consistent with the Gravelle constraints), revenue gained would be three times the amount likely to be projected by the JCT. Using the Gravelle upper limit, revenues would be 45% larger. Thus, the JCT's projections, absent a change in their realizations response, may likely understate revenue gains from increasing capital gains tax rates.", "Appendix A. Technical Appendix", "This appendix shows in the first section the standard realization of revenues from a coefficient derived from a semi-log function. The second shows the method of calculating taxes under the look-back method.", "Modeling Realizations and Revenues", "The elasticity of realizations with respect to taxes can be estimated with a variety of functional forms, but one of the most common, and the one on which the estimates in Table 2 are based is a semi-log function of the form (excluding the constant and other regressors, such as stock market values and GDP):", "(1) log G = bt", "where G is gains, t is the tax rate, and b is the tax rate coefficient to be estimated. If equation (1) is differentiated, and b is restated in absolute value, the result is: ", "(2) dG/G = -b dt", "Multiplying the right hand side top and bottom by t results in an elasticity (dG/G divided by dt/t) of bt. Because the relationship is normally negative, but it is convenient to restate b in absolute value, a minus sign is added to b.", "If equation (1) is restated in its originally, nonlogged form (again ignoring other explanatory variables and stating b in absolute value), it is:", "(3) G = A e -bt", "Since revenues are tG, the revenue equation is written:", "(4) R = tAe -bt", "Note that if equation (4) is logged and differentiated, the result is dR/r = dt/t (1-bt). Thus, if the absolute value of the elasticity bt, is 1, there is no revenue gain.", "To estimate revenues, denoting new values with an *, divide new revenues by old to achieve:", "(5) R* = R* (t*/t)e -b(t*-t) ", "The revenue maximizing tax rate is where dR/R=0, or where (1-bt) equals zero. This rate is equal to 1/b. Thus, if the coefficient of b is two, the revenue maximizing tax rate is 50% and if b equals 5 the revenue maximizing tax rate is 20%.", "Calculating Taxes under the Look-Back Method", "A look-back method decreases basis (i.e., increases taxable gain) in order to achieve the same net on a sale as if the tax had been paid on an accrual basis. In these calculations, g = growth rate, T= holding period, S =\u00a0sales price, B = basis, t = tax rate, and B* = new basis.", "To determine the growth rate g:", "(1) B(1+g) T = S", "And solving for g:", "(1) g = (S/B) (1/T) -1", "To find a value of B* that will give you the same return as accrual taxation:", "The gain on realization with the new basis is S-t(S-B*)", "The gain on accrual is B(1+g(1-t)) T", "Equating them and substituting in for the value of g:", "(3) B(1+ ((S/B) 1/T -1)(1-t)) T = S-t(S-B*)", "Solving for B*", "(4) B* = [B(1+ ((S/B) 1/T -1)(1-t)) T -S(1-t)]/t", "Appendix B. Econometric Studies", "Elasticities in Studies of the 1980s", " Table B -1 reports the elasticities found in a series of estimates of the realizations elasticity in the 1980s, the information available to influence a choice of realizations response at the time of the 1990 debate. These studies are discussed in general terms earlier, and in more specific terms in the following subsection. Where possible elasticities are reported at a 22% tax rate. The studies are divided into categories based on the fundamental approach used. Citations to all studies in this report are in Appendix C .", "General Issues", "Statistical (or econometric) studies relating capital gains realizations to tax rates face many challenges, and some of the debate over the evidence reflects the concerns about these challenges. The debate also concerned which type of data should be used: aggregate time series (which examines total economy-wide realizations over time compared with the economy-wide tax rates) versus individual taxpayer data (which related individual realizations to individual tax rates). As can be seen in Table B -1 , aggregate time series results were generally smaller and more consistent, falling within a range of 0.3 to 0.9. Estimates based on micro data (individual observations) varied from 0.55 to almost 4. The estimate for the pooled time-series, cross-section regression probably reflects a mix of times series and cross-section results.", "Other things equal, it is more desirable to use individual data, because aggregate data cause a loss of information (i.e., individual variability is lost when individual responses are aggregated) and can bias the results. In addition, it is difficult to control for all of the changes over time that can affect realizations. Two of these, changes in transactions costs and a disconnect between changes in asset prices and changes in accruals, could cause estimates to be overstated. Nor is it clear that the times series estimates are capturing only permanent effects. Other effects, however, could work in the opposite direction.", "Yet the problems associated with studies based on individual data sets were so severe that many researchers believed that aggregate time series results were more reliable.", "As an initial problem and point of contention, the effective capital gains tax rate, which would be used as a predetermined (exogenous) variable to explain realizations in a regression, is actually an endogenous variable which is influenced by the amount of realizations itself. Different techniques could, in theory, be used to address this very serious econometric problem, including using the first dollar tax rate (the tax that would appear on the first dollar of capital gains), using maximum statutory rates, using a rate based on predicted gains (where predicted gains are based on other attributes), or using instrumental variables methods. In general, these problems of endogeneity of the explanatory variable are much more severe in the case of individual cross-section data, where much of the variation is due to individual circumstances, and less important in aggregate time series data where the major source of variation is changes in the law.", "As noted earlier, another important issue, for using individual data, was the problem of distinguishing between permanent and transitory responses. Because income, especially of high-income individuals who realize most gains, can fluctuate over time, tax rates also vary over time. Individuals would be expected to time realizations to coincide with periods of low rates. Individuals might also need to cash in assets when income (and therefore taxes) is unusually low. Although attempts were made to address this problem with panel studies by averaging the previous year, current year, and next year tax rates to create a permanent rate, this procedure may not correct for the transitory effect, perhaps because periods of lower income can continue for several years.", "Studies Since the 1980s", "The following discussion reviews the realizations studies published since the 1980s. In some cases, studies used many specifications, and this section explains why specific results were reported in Table 1 , and why results from two studies were not included. References to these studies are in Appendix C . They are discussed in order of publication.", "Slemrod and Shobe (1990)", "This study uses a six-year small panel to replicate the Feldstein, Slemrod, and Yitzhaki and the Auten and Clotfelter studies. The authors found varying, but quite large, elasticities (in excess of 1, and in excess of 5 in some cases). Their study appears to confirm potential problems with these studies, and also suggests short panels have significant problems as well (as the elasticity for their full sample was 5.84). These large elasticities are similar to those from cross-section and some panel studies in the 1980s, although some were not statistically significant and results varied significantly over time periods. Slemrod and Shobe also estimated a regression that related the difference between current year realizations and average realizations to the difference between current year and average tax rates. They also obtain large, but statistically insignificant results. They acknowledge that their results may capture transitory effects. Because this study continues a methodology that has largely been rejected, the results are excluded from Table 1 .", "Gillingham and Greenlees (1992)", "This study extends a previous times series analysis covering 1954-1985 for a short period (through 1989) and makes some changes in approaches used by CBO to replicate the results. The CBO study referenced used tax rates based on predicted gains in a standard regression. The authors consider three changes. The first is to use an instrumental variables technique that uses taxes on predicted gains as an instrument (that is, first regress actual effective tax rates on predicted tax rates and use the fitted values in the regression on realizations). This provision increased the coefficient from 2.9 to 4.2 and increased the elasticity at a 22% tax rate, from 0.64 to 0.92. Second, they suggested use of the maximum tax rate as an instrument rather than the predicted tax rate, which increased the coefficient to 5.8 and the elasticity to 1.28. They also argued that the data should be differenced (a change in realizations related to a change in rates); differencing produced higher elasticities (1.39 for the instrument with predicted gains and 1.429 for the instrument with the maximum rate) but these elasticities were not statistically significant at conventional levels. Differencing may also capture short-term or transitory effects. Finally they extended the time period through 1989, with and without excluding 1986. Excluding 1986, they found an estimate of 3.4 rather than 4.2 using the predicted gains instrument and 3.5 when the data were differenced (corresponding to elasticities of 0.75 and 0.77 at a 22% rate). For the maximum rate, the values were 5.4 and 5.3 (with and without differencing), corresponding to elasticities of 1.18 and 1.16. Confining the elasticities under consideration to those in the extended sample but excluding 1986, the crucial issue is whether to use the predicted gains rate or the maximum rate as an instrument. It is difficult to know what conclusion to draw from this study, because the principal conclusion of the authors is that micro-data approaches are superior.", "Problems exist with using the maximum rate as an instrument for this time-series regression, because the law itself changed substantially over the time period in a way that altered the relationship between the maximum rate and the average rate. Over this time period, there were episodes where the maximum rate affected a large fraction of taxpayers and other periods where it affected only a small fraction of taxpayers. Given these reservations about using the maximum rate, the coefficient of 3.4 is reported in Table 1 .", "Burman and Randolph (1994)", "The Burman and Randolph study is perhaps the most innovative study done since the 1980s. It separated permanent and transitory effects in a short panel (1979-1983) using variations in state tax rates to identify permanent effects. For the transitory rate, the authors included in their instruments the first dollar current tax rate, which introduced a transitory element. Thus taxpayers with unusually low current income, excluding capital gains (and low current first dollar rates) would have transitory rates below their permanent rates, whereas those with high income would have higher rates. The permanent rates would vary across taxpayers in different states due to state tax rates. The authors estimated an elasticity of 0.18 at an 18% tax rate, which implies a coefficient of one, and an elasticity of 0.22 at a 22% tax rate. This estimated effect was not statistically significant, probably because there was not very much variation in tax rates. They estimated a transitory elasticity of 6.45. Several subsequent studies use across-state variations or incorporate state tax rates into the analysis.", "Bogart and Gentry (1995)", "This study also relied on differentials across states to identify permanent responses, but used aggregate state level gains from 1979 to 1990. The study also uses year dummies to control for fixed-year effects, so that the basic identification is due largely to the differential in tax rates across states. The authors report an elasticity of 0.65, which at their reported tax rate reflects a coefficient of 2.5. For a 22% rate, this coefficient leads to an elasticity of 0.55. The techniques used in the study should identify a permanent elasticity.", "Auerbach and Siegel (2000)", "Auerbach and Siegel used panel data from 1985 to 1994 to replicate the Burman and Randolph results for a different time period. They report an elasticity of 0.33 at the mean of the tax rate. Unfortunately, they do not report the tax rate. Based on evidence from other sources (Eichner and Sinai), the tax rate is probably around 25%. Using that tax rate, the coefficient is 1.126 and suggests an elasticity at a 22% rate of 0.25, very close to the Burman and Randolph results. They find a transitory elasticity of 4.9 (4.1% at a 22% rate).", "Auerbach and Siegel also report an alternative specification in which they add several instruments to the permanent tax rate including the first dollar tax rate for the current year and the year ahead maximum statutory rate to a regression on the next year's tax rate. The permanent elasticity is much higher, 1.75 rather than 0.33. This magnitude of elasticity is similar to that found in panel and cross-section studies in the 1980s. The problem with their approach is that this addition of the current first dollar rate likely adds a transitory element to the permanent tax rate, which explains their significantly larger elasticity. Thus, the 1.126 coefficient is reported in Table 1 .", "Auerbach and Siegel also provide a separate regression for the very wealthy and for \"sophisticated\" taxpayers (who report sales of more complicated financial products such as derivatives or report short sales). Their findings using the Burman and Randolph methodology indicate that there is essentially no response for these taxpayers.", "Eichner and Sinai (2000)", "This study extends time series analysis through 1997, but finds that it is important to exclude 1986 from the estimates. When 1986 is excluded the coefficient is 2.28, for an elasticity of 0.5. There is also a case for excluding 1997, although it is not as important. When both are excluded, the coefficient in a semi-log specification is 2.18, which implies, at a 22% tax rate, an elasticity of 0.48. As in the case of Gillingham and Greenlees, many specifications are tried. One approach used an instrumental variables method relying on the top marginal tax rate. This approach led to an estimate of 3.8, for an elasticity of 0.84. Curiously, the coefficient changes quite substantially when 1997 was also excluded, to 5.13 and an elasticity of 1.13. One of the problems of using the top marginal tax rate is that there are differences between that tax rate and the average tax rate in the years before 1986 when the tax benefit was an exclusion and rates where more steeply graduated. The authors also tried some specifications with changes in tax rates. These tended to lead to elasticities ranging from 0.83 to 1.46. However, in most of these cases some or most of the tax rate coefficients were not statistically significant. Moreover, it is more likely that this approach reflects more transitory elements. Given the problems with using marginal rates and the instability of specifications with tax rate changes, the 2.28 coefficient is reported in Table 1 .", "Auten and Joulfaian (2004)", "This analysis uses a longer micro-data panel (over 17 years) to estimate permanent and transitory effects. Although they include state tax rates, they do not use the state tax variation to identify permanent effects. Their approach is similar to the panel studies of the 1980s in that it uses adjacent years to separate permanent and transitory effects. Their estimate is lower than most estimates of short panels from the 1980s, although this lower elasticity may reflect time series elements. It is likely, however, that the permanent estimate contains transitory elements. They find an elasticity of 0.72 at an apparent 20% tax rate, which indicates a coefficient of 3.6 and an elasticity of 0.79 at a 22% tax rate.", "Evans (2009)", "The Evans study is a basic cross-section regression, relying on the public use file, with a number of different specifications, leading to elasticities typically between 2 and 5. Although there are some issues associated with the public use file data, because tax returns are blended for high-income taxpayers to protect confidentiality, the main reservation about this study is that it reflects the fundamental, and now widely recognized, shortcomings of cross-section studies, and the findings cannot be interpreted as reflecting permanent realizations elasticities. These results are not reflected in Table 1 .", "Bakija and Gentry (2014)", "This study uses a 50-year panel of state data reflecting changes in combined federal and state tax rates. The data are aggregated by state, including state- and time-fixed effects. The identification for the effects comes from changes in effective state marginal tax rates, which are largely exogenous. The state-fixed effects mean that unobserved differences across states are controlled for. The authors provide a number of tests of the effects of changing specification, in particular showing that omitting state-fixed effects and year-fixed effects, separately and together, has significant effects in raising the elasticities. ", "Dowd, McClelland and Muthitacharoen (2015)", "This study uses standard panel methods using a 10-year panel, although its estimates of transitory elasticities rely, as with other studies, on adjacent years, which may not be sufficient to eliminate transitory effects. However, it does have year-fixed effects, which should help control for transitory effects from law changes (as opposed to income changes). It also provides considerable sensitivity analysis with different specifications and time subperiods. ", "Minas, Lim, and Evans (2018)", "This study is an aggregate time series study done with Australian data from 1988 to 2015 and spans a period which included an exclusion for part of capital gains as well as changes in marginal tax rates. It includes controls similar to those in U.S. studies for GDP, inflation, and the stock market index. ", "Appendix C. Citations to Studies", "Citations to Studies of the 1980s (in Table B-1 )", "Auerbach, Alan J. \"Capital Gains Taxation and Tax Reform.\" National Tax Journal (September 1989), pp. 391-401.", "Auten, Gerald E. \"Capital Gains Taxes and Realizations: Can a Tax Cut Pay for Itself?\" Policy Studies Journal (Autumn 1980), pp. 53-60.", "Auten, Gerald E., Leonard E. Burman, and William C. Randolph. \"Estimation and Interpretation of Capital Gains Realization Behavior: Evidence from Panel Data.\" National Tax Journal (September 1989), p. 353374. (This study was also released by the U.S. Department of Treasury. OTA Paper 67, May 1989).", "Auten, Gerald E. and Charles Clotfelter. \"Permanent vs. Transitory Effects and the Realization of Capital Gains.\" Quarterly Journal of Economics (November 1982), pp. 613-632.", "Congressional Budget Office. Effects of the 1981 Act on the Distribution of Income and Taxes Paid . Staff Working Paper. August 1986.", "Congressional Budget Office. How Capital Gains Tax Rates Affect Revenues: The Historical Evidence . March 1988.", "Darby, Michael, Robert Gillingham, and John S. Greenlees. \"The Direct Revenue Effects of Capital Gains Taxation: A Reconsideration of the Time Series Evidence.\" Treasury Bulletin , U.S. Department of Treasury. June 1988.", "Feldstein, Martin, Joel Slemrod, and Shlomo Yitzhaki. \"The Effects of Taxation on the Selling of Corporate Stock and the Realization of Capital Gains.\" Quarterly Journal of Economics (June 1980), pp. 777-791.", "Gillingham, Robert, John S. Greenlees, and Kimberly D. Zieschang. New Estimates of Capital Gains Realization Behavior: Evidence from Pooled Cross Section Data . U. S. Department of Treasury, OTA Paper 66. May 1989.", "Jones, Jonathan D. An Analysis of Aggregate Time Series Capital Gains Equations . U. S. Department of Treasury, Office of Tax Analysis Paper 65. May 1989.", "Lindsey, Larry. Capital Gains: Rates, Realizations, and Revenues . National Bureau of Economic Research, Working Paper 1893. April, 1986.", "Minarik, Joseph. \"The Effects of Taxation on the Selling of Corporate Stock and the Realization of Capital Gains: Comment.\" Quarterly Journal of Economics (February 1984), pp. 93-110.", "U.S. Department of Treasury. Office of Tax Analysis. Report to the Congress on the Capital Gains Tax Reductions of 1978 . September 1985.", "Citations to Studies Since the 1980s", "Auerbach, Alan J. and Jonathan M. Siegel, \"Capital-Gains Realizations of the Rich and Sophisticated,\" American Economic Review , Vol. 90, Papers and Proceedings of the One Hundred Twelfth Annual Meeting of the American Economic Association, May 2000, pp. 276-282.", "Auten, Gerald and David Joulfaian, \"Taxes and Capital Gains Realizations: Evidence from a Long Panel,\" Prepared for Presentation at the Society of Government Economists session at the Allied Social Science Association Meetings, January 8, 2005, December 2004. Posted at http://www.aeaweb.org/annual_mtg_papers/2005/0109_0800_1204.pdf .", "Bakija, Jon M. and William M. Gentry, Capital Gains Realizations: Evidence from a Long Panel of State-Level Data , Working Paper, Williams College, June 2014. Posted at https://web.williams.edu/Economics/wp/BakijaGentryCapitalGainsStatePanel.pdf .", "Bogart, William T. and William M. Gentry, \"Capital Gains Taxes and Realizations: Evidence from Interstate Comparisons.\" Review of Economics and Statistics , vol. 77 (May 1995), pp. 267-282.", "Burman, Leonard E. and William C. Randolph, \"Measuring Permanent Responses to Capital Gains Tax Change in Panel Data,\" American Economic Review , vol. 83 (September 1994), pp. 794-809.", "Dowd, Tim, Robert McClelland, and Athiphat Muthitacharoen, \"New Evidence on the Elasticity of Capital Gains,\" National Tax Journal , vol. 68, no. 3, September 2015, pp. 511-544.", "Evans, Paul, \"The Relationship Between Realized Capital Gains and Their Marginal Rate of Taxation, 1976-2004,\" Institute for Research on the Economics of Taxation, Capital Gains Series no. 2, October 9, 2009. Posted at http://iret.org/pub/CapitalGains-2.pdf .", "Eichner, Matthew and Todd Sinai, \"Capital Gains Tax Realizations and Tax Rates: New Evidence from Time Series.\" National Tax Journal , vol. 53, no.3, part 2 (September 2000), pp. 663-682.", "Gillingham, Robert and John S. Greenlees, \"The Effect of Marginal Tax Rates on Capital Gains Revenue: Another Look at the Evidence,\" National Tax Journal , vol. 45 (June 1992), pp. 167-177.", "Minas, John, Youngdeok Lim, and Chris Evans, \"The Impact of Tax Rate Changes on Capital Gains Realisations: Evidence from Australia,\" Australian Tax Forum , accepted for publication 2018.", "Slemrod, Joel and William Shobe, The Tax Elasticity of Capital Gains Realizations: Evidence from a Panel of Taxpayers . National Bureau of Economic Research, Working Paper 3237. January 1990. Posted at http://www.nber.org/papers/w3237.pdf ."], "subsections": []}]}}
{"id": "R45415", "title": "U.S. Sanctions on Russia", "released_date": "2019-01-11T00:00:00", "summary": ["Many observers consider sanctions to be a central element of U.S. policy to counter Russian malign behavior. Most Russia-related sanctions implemented by the United States have been levied in response to Russia's 2014 invasion of Ukraine. In addition, the United States has imposed sanctions on Russia in response to human rights abuses, election interference and cyberattacks, weapons proliferation, illicit trade with North Korea, support to Syria, and use of a chemical weapon. The United States also employs sanctions to deter further objectionable activities. Most Members of Congress support a robust use of sanctions amid concerns about Russia's international behavior and geostrategic intentions.", "Ukraine-related sanctions are mainly based on four executive orders (EOs) the President introduced in 2014. In addition, Congress passed and the President signed into law two acts establishing sanctions in response to Russia's invasion of Ukraine: the Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014 (SSIDES; P.L. 113-95/H.R. 4152) and the Ukraine Freedom Support Act of 2014 (UFSA; P.L. 113-272/H.R. 5859).", "In 2017, Congress passed and the President signed into law the Countering Russian Influence in Europe and Eurasia Act of 2017 (CRIEEA; P.L. 115-44/H.R. 3364, Countering America's Adversaries Through Sanctions Act [CAATSA], Title II). This legislation codifies Ukraine-related and cyber-related EOs, strengthens existing Russia-related sanctions authorities, and identifies several new targets for sanctions. It also establishes congressional review of any action the President takes to ease or lift a variety of sanctions.", "Additional sanctions on Russia may be forthcoming. On August 6, 2018, the United States determined that in March 2018 the Russian government used a chemical weapon in the United Kingdom in contravention of international law. In response, the United States launched an initial round of sanctions on Russia, as required by the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (CBW Act; P.L. 102-182/H.R. 1724, Title III). The law requires a second, more severe round of sanctions in the absence of Russia's reliable commitment to no longer use such weapons.", "The United States has imposed most Ukraine-related sanctions on Russia in coordination with the European Union (EU). Since 2017, the efforts of Congress and the Trump Administration to tighten U.S. sanctions on Russia have prompted some degree of concern in the EU about U.S. commitment to sanctions coordination and U.S.-EU cooperation on Russia and Ukraine more broadly. The EU continues to consider the possibility of imposing sanctions in response to Russia's use of a chemical weapon in the United Kingdom, human rights abuses, and cyberattacks.", "Debates about the effectiveness of U.S. and other sanctions on Russia continue in Congress, in the Administration, and among other stakeholders. Russia has not reversed its occupation and annexation of Ukraine's Crimea region, nor has it stopped fostering separatism in eastern Ukraine. On the contrary, it has extended military operations to the Black Sea and the Azov Sea bordering Ukraine and Russia. With respect to other malign activities, the relationship between sanctions and Russian behavior is difficult to determine. Nonetheless, many observers argue that sanctions help to restrain Russia or that their imposition is an appropriate foreign policy response regardless of immediate effect.", "In the 115th Congress, several bills were introduced to increase the use of sanctions in response to Russia's malign activities. The 116th Congress may continue to debate the role of sanctions in U.S. foreign policy toward Russia."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": [], "subsections": [{"section_title": "U.S. Sanctions on Russia: A Key Policy Tool", "paragraphs": ["Many observers consider sanctions to be a central element of U.S. policy to counter Russian malign behavior. This includes Russia's invasion of Ukraine in 2014, election interference and cyberattacks, human rights abuses, illicit trade with North Korea, support to the government of Syria, and use of a chemical weapon. The United States also employs sanctions in an effort to deter further objectionable activities by Russia (e.g., expanding the war in Ukraine or launching new attacks in neighboring countries). Most Members of Congress support a robust use of sanctions amid concerns about Russia's international behavior and geostrategic intentions. ", "Most Russia-related sanctions implemented by the United States have been levied in response to Russia's 2014 invasion of Ukraine. These sanctions are based on national emergency authorities granted the office of the President in the National Emergencies Act (NEA; P.L. 94-412 ; 50 U.S.C. 1621) and International Emergency Economic Powers Act (IEEPA; P.L. 95-223 ; 50 U.S.C. 1701) and exercised by President Barack Obama in 2014 in a series of executive orders (EOs 13660, 13661, 13662, 13685). The Obama and Trump Administrations have used these EOs to impose sanctions on approximately 650 Russian individuals and entities. ", "The executive branch also has used a variety of EOs and legislation to impose sanctions on Russian individuals and entities in response to a number of other concerns. Legislation that established specifically Russia-related sanctions includes the following:", "The Sergei Magnitsky Rule of Law Accountability Act of 2012 ( P.L. 112-208 , Title IV; 22 U.S.C. 5811 note). Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014, as amended (SSIDES; P.L. 113-95 ; 22 U.S.C. 8901 et seq.). Ukraine Freedom Support Act of 2014, as amended (UFSA; P.L. 113-272 ; 22 U.S.C. 8921 et seq.). Countering Russian Influence in Europe and Eurasia Act of 2017, as amended (CRIEEA; P.L. 115-44 , Countering America's Adversaries Through Sanctions Act [CAATSA], Title II; 22 U.S.C. 9501 et seq.). ", "The last of these, CRIEEA, codifies Ukraine-related and cyber-related EOs, strengthens sanctions authorities from the 2014 Ukraine-related EOs and legislation, and identifies several new sanctions targets, both possible new categories of designees and additional objectionable behavior. It also establishes congressional review of any action the President takes to ease or lift a variety of sanctions. "], "subsections": []}, {"section_title": "Russia Sanctions and the Trump Administration", "paragraphs": ["The Trump Administration's pace in implementing sanctions, particularly primary and secondary sanctions under CRIEEA, has raised some questions in Congress about the Administration's commitment to holding Russia responsible for its malign behavior. Administration officials contend they are implementing a robust set of sanctions on Russia, including new CRIEEA requirements. ", "As of the start of 2019, the Trump Administration has made 29 designations based on new sanctions authorities in CRIEEA, relating to cyberattacks (\u00a7224, 24 designations), human rights abuses (\u00a7228, amending SSIDES, 3 designations), and arms sales (\u00a7231, 2 designations). The Administration has not made designations under new CRIEEA authorities related to pipeline development, corrupt privatization deals, or support to Syria (\u00a7\u00a7232-234), nor has it made other designations under SSIDES or UFSA, as amended by CRIEEA (\u00a7\u00a7225-228), related to weapons transfers abroad, gas export cutoffs, special oil projects, corruption, and sanctions evasion. Some Members of Congress have called on the President to make more designations based on CRIEEA's mandatory sanctions provisions.", "The Trump Administration has made many Russia-related designations under sanctions authorities that predate CRIEEA, however. These authorities include Ukraine-related and cyber-related EOs codified by CRIEEA, as well as EOs related to weapons proliferation, North Korea, Syria, transnational crime, and international terrorism. The Administration also has made designations based on earlier legislation, such as the Sergei Magnitsky Act; the Global Magnitsky Human Rights Accountability Act (22 U.S.C. 2656 note); the Iran, North Korea, and Syria Nonproliferation Act, as amended (INKSNA; 50 U.S.C. 1701 note); and the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (CBW Act; 22 U.S.C. 5601 et seq.).", "The United States has imposed most Ukraine-related sanctions on Russia in coordination with the European Union (EU). As the invasion of Ukraine progressed in 2014, the Obama Administration argued that EU support for sanctions was crucial, as the EU has more extensive trade and investment ties with Russia than does the United States. Many view U.S.-EU cooperation in imposing sanctions as a tangible indication of U.S.-European solidarity, frustrating Russian efforts to drive a wedge between transatlantic partners. Since 2017, the efforts of Congress and the Trump Administration to tighten U.S. sanctions unilaterally have prompted some degree of concern in the EU about U.S. commitment to sanctions coordination and U.S.-EU cooperation on Russia and Ukraine more broadly."], "subsections": []}, {"section_title": "How Effective Are Sanctions on Russia?", "paragraphs": ["The United States (and, in response to certain activities, the EU and others) has imposed sanctions on Russia mainly to pressure Russia to withdraw from Crimea and eastern Ukraine; to cease malicious cyber activity against the United States, its allies, and partners; to deter and, in some instances, take punitive steps in response to human rights abuses and corruption; to abide by the Chemical Weapons Convention; and to halt Russia's support to the Syrian and North Korean regimes. ", "Many observers have debated the degree to which sanctions promote change in Russia's behavior. With respect to Ukraine, Russia has not reversed its occupation and annexation of Crimea, nor has it stopped fostering separatism in eastern Ukraine. On the contrary, it has extended military operations. After Russia opened a bridge to Crimea over the Kerch Strait, the waterway connecting the Black Sea to the Sea of Azov, it stepped up its interference with commercial traffic traveling to and from ports in eastern Ukraine. On November 25, 2018, Russian coast guard vessels forcibly prevented three Ukrainian naval vessels from transiting the Kerch Strait, fired on them as they sought to leave the area, and detained and imprisoned their crew members. At the same time, Russia has signed two agreements that recognize the entire occupied region in eastern Ukraine as part of Ukraine, and Russian-led separatist military operations have been limited to areas along the perimeter of the current conflict zone. Russia has not expanded its military aggression to other states.", "With respect to other malign activities, the relationship between sanctions and Russian behavior is difficult to determine. Sanctions in response to Russia's malicious cyber-enabled activities, human rights abuses, corruption, use of a chemical weapon, weapons proliferation, and support to Syria and North Korea are relatively limited and highly targeted. The extent to which such sanctions might be expected to change Russian behavior is unclear. To the extent that Russia does change its behavior, other factors besides sanctions could be responsible. ", "If Russia does not change its behavior in response to sanctions, this may be for a number of reasons. Russian policymakers may be willing to incur the cost of sanctions, whether on the national economy or on their own personal wealth, in furtherance of Russia's foreign policy goals. Sanctions also might have the unintended effect of boosting internal support for the Russian government, whether through appeals to nationalism (\"rally around the flag\") or through Russian elites' sense of self-preservation. Finally, sanctions may be targeting individuals that have less influence on Russian policymaking than the United States assumes. ", "Furthermore, the economic impact of sanctions may not be consequential enough to affect Russian policy. Most Russia-related sanctions do not broadly target the Russian economy or entire sectors. Rather, they consist of broad restrictions against specific individuals and entities, as well as narrower restrictions against wider groups of Russian companies. Overall, more than four-fifths of the largest 100 firms in Russia (in 2017) are not directly subject to any U.S. or EU sanctions, including companies in a variety of sectors, such as transportation, retail, services, mining, and manufacturing. Although Russia faced several economic challenges in 2014-2015, including its longest recession in almost 20 years, the 2014 collapse in global oil prices had a larger impact than sanctions. Russia's economy strengthened in 2016 and 2017, as oil prices rose.", "The sanctions' relatively low impact on the Russian economy is by design. The Obama Administration and the EU intended for Ukraine-related sanctions, which account for most U.S. and global Russia-related sanctions, to have a limited and targeted economic impact. They sought to target individuals and entities responsible for offending policies and/or associated with key Russian policymakers in a way that would get Russia to change its behavior while minimizing collateral damage to the Russian people or to the economic interests of the countries imposing sanctions. Moreover, some sanctions were intended to put only long-term pressure on the Russian economy, by denying oil companies access to Western technology to modernize their industry or locate new sources of oil. The full economic ramifications of these restrictions potentially have yet to materialize. ", "There is some evidence that U.S. sanctions on Russia can have broad economic effects if they are applied to economically significant targets, although doing so may create instability in global financial markets. April 2018 sanctions on Rusal, a global aluminum firm, had broad effects that rattled Russian and global financial markets. The sanctions on Rusal marked the first time the United States and the EU imposed full blocking sanctions on a top-20 Russian firm and the first time the Treasury Department appeared prepared to implement CRIEEA-mandated secondary sanctions. In December 2018, however, the Treasury Department announced its intention to remove sanctions on Rusal, pending 30 days for congressional review, on the basis of an agreement that would require Kremlin-connected billionaire Oleg Deripaska, who is subject to sanctions, to relinquish his control over the firm (for more, see \" The Section 241 \"Oligarch\" List ,\" below). "], "subsections": []}, {"section_title": "About the Report", "paragraphs": ["This report provides a comprehensive overview of the use of sanctions in U.S. foreign policy toward Russia. It is compartmentalized, however, so that readers primarily interested in a particular issue, for example sanctions in response to Russia's use of a chemical weapon, may find the relevant information in a subsection of the report. ", "The report first provides an overview of U.S. sanctions authorities and tools, particularly as they apply to Russia. It next describes various sanctions regimes that the executive branch has used to impose sanctions on Russian individuals and entities or that are available for this purpose, addressing authorities, tools, targets, and historical context. Third, the report briefly discusses countersanctions that Russia has introduced in response to U.S. and other sanctions. Fourth, it addresses the evolution of U.S. coordination with the European Union on Russia sanctions policy, and similarities and differences between U.S. and EU sanctions regimes. Finally, the report assesses the economic impact of sanctions on Russia at the level of the national economy and individual firms."], "subsections": []}]}, {"section_title": "Use of Economic Sanctions to Further Foreign Policy and National Security Objectives", "paragraphs": ["Economic sanctions provide a range of tools Congress and the President may use to seek to alter or deter the objectionable behavior of a foreign government, individual, or entity in furtherance of U.S. national security or foreign policy objectives. ", "Scholars have broadly defined economic sanctions as \"coercive economic measures taken against one or more countries [or individuals or entities] to force a change in policies, or at least to demonstrate a country's opinion about the other's policies.\" Economic sanctions may include limits on trade, such as overall restrictions or restrictions on particular exports or imports; the blocking of assets and interest in assets subject to U.S. jurisdiction; limits on access to the U.S. financial system, including limiting or prohibiting transactions involving U.S. individuals and businesses; and restrictions on private and government loans, investments, insurance, and underwriting. Sanctions also can include a denial of foreign assistance, government procurement contracts, and participation or support in international financial institutions. ", "Sanctions that target third parties\u2014those not engaged in the objectionable activity subject to sanctions but engaged with the individuals or entities that are\u2014are popularly referred to as secondary sanctions . Secondary sanctions often are constructed to deter sanctions evasion, penalizing those that facilitate a means to avoid detection or that provide alternative access to finance.", "The United States has applied a variety of sanctions in response to objectionable Russian activities. Most Russia-related sanctions, including most sanctions established by executive order (see \" Role of the President ,\" below), do not target the Russian state directly. Instead, they consist of designations of specific individuals, entities, and vessels on the Specially Designated Nationals and Blocked Persons List (SDN) of the Treasury Department's Office of Foreign Assets Control (OFAC). Sanctions block the U.S.-based assets of those designated as SDNs and generally prohibit U.S. individuals and entities from engaging in transactions with them. In addition, the Secretary of State, in consultation with the Secretary of Homeland Security and Attorney General, is tasked with denying entry into the United States or revoking visas granted to designated foreign nationals.", "Sanctions in response to Russia's invasion of Ukraine also consist of sectoral sanctions . Often, sectoral sanctions broadly apply to specific sectors of an economy. In the case of Russia-related sanctions, sectoral sanctions have a narrower meaning; they apply to specific entities in Russia's financial, energy, and defense sectors that OFAC has identified for inclusion on the Sectoral Sanctions Identifications (SSI) List. These sectoral sanctions prohibit U.S. individuals and entities from engaging in specific kinds of transactions related to lending, investment, and/or trade with entities on the SSI List, but they permit other transactions.", "Another major category of Russia-related sanctions consists of a presumption of denial to designated end users for export licenses. The Department of Commerce's Bureau of Industry and Security (BIS) places entities subject to export restrictions on the Entity List (Supplement No. 4 to Part 744 of the Export Administration Regulations). "], "subsections": [{"section_title": "Role of the President", "paragraphs": ["The President, for a variety of reasons related to constitutional construction and legal challenges throughout U.S. history, holds considerable authority when economic sanctions are used in U.S. foreign policy. If Congress enacts sanctions in legislation, the President is to adhere to the provisions of the legislation and is responsible for determining the individuals and entities to be subject to sanctions.", "The President also often has the authority to be the sole decisionmaker in initiating and imposing sanctions. The President does so by determining, pursuant to the International Emergency Economic Powers Act (IEEPA), that there has arisen an \"unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States.\" The President then declares that a national emergency exists, as provided for in the National Emergencies Act (NEA), submits the declaration to Congress, and establishes a public record by publishing it in the Federal Register . Under a national emergency, the President may further invoke the authorities granted his office in IEEPA to investigate, regulate, or prohibit transactions in foreign exchange, use of U.S. banking instruments, the import or export of currency or securities, and transactions involving property or interests in property under U.S. jurisdiction.", "President Obama invoked NEA and IEEPA authorities to declare that Russia's 2014 interference in Ukraine constituted a threat to the United States. On that basis, he declared the national emergency on which most Ukraine-related sanctions are based. President Obama and President Trump also have used the NEA and IEEPA to declare national emergencies related to cyber-enabled malicious activities and election interference."], "subsections": []}, {"section_title": "Role of Congress", "paragraphs": ["Congress influences which foreign policy and national security concerns the United States responds to with sanctions by enacting legislation to authorize, and in some instances require, the President to use sanctions. Congress has taken the lead in authorizing or requiring the President (or executive branch) to use sanctions in an effort to deter weapons proliferation, international terrorism, illicit narcotics trafficking, human rights abuses, regional instability, cyberattacks, corruption, and money laundering. Legislation can define what sanctions the executive branch is to apply, as well as the conditions that need to be met before these sanctions may be lifted. ", "One limitation on the role of Congress in establishing sanctions originates in the U.S. Constitution's bill of attainder clause. Congress may not enact legislation that \"legislatively determines guilt and inflicts punishment upon an identifiable individual without provision of the protections of a judicial trial.\" In other words, Congress may enact legislation that broadly defines categories of sanctions targets and objectionable behavior, but it is left to the President to \"[determine] guilt and [inflict] punishment\"\u2014that is, to populate the target categories with specific individuals and entities. "], "subsections": []}, {"section_title": "Sanctions Implementation", "paragraphs": ["In the executive branch, several agencies have varying degrees of responsibility in implementing and administering sanctions. Primary agencies, broadly speaking, have responsibilities as follows: ", "Department of the Treasury's OFAC designates SDNs to be subject to the blocking of U.S.-based assets; prohibits transactions; licenses transactions relating to exports (and limits those licenses); restricts access to U.S. financial services; restricts transactions related to travel, in limited circumstances; and identifies entities for placement on the SSI List as subject to investment and trade limitations. Department of State restricts visas, arms sales, and foreign aid; implements arms embargos required by the United Nations; prohibits the use of U.S. passports to travel, in limited circumstances; and downgrades or suspends diplomatic relations. Department of Commerce's BIS restricts licenses for commercial exports, end users, and destinations. Department of Defense restricts arms sales and other forms of military cooperation. Department of Justice investigates and prosecutes violations of sanctions and export laws. "], "subsections": []}]}, {"section_title": "U.S. Russia-Related Sanctions", "paragraphs": ["The United States imposes sanctions on Russia in accordance with several laws and executive orders. In 2012, the United States introduced a new sanctions regime on Russia in response to human rights abuses. In 2014, the United States introduced an extensive new sanctions regime on Russia in response to Russia's invasion of Ukraine. In 2016, the United States imposed sanctions on Russian individuals and entities for election interference. In 2017, Congress introduced and the President signed into law legislation that strengthened existing sanctions authorities and established several new sanctions in response to Russia's invasion of Ukraine, malicious cyber-enabled activities, human rights abuses, and corruption. The United States also has imposed sanctions on Russian individuals and entities in response to the use of a chemical weapon, weapons proliferation, trade with North Korea in violation of U.N. Security Council requirements, support for the Syrian government, transnational crime, and terrorism. ", "For an overview of Russia-related sanctions authorities and designations, see Appendix B ."], "subsections": [{"section_title": "Sergei Magnitsky Act and the Global Magnitsky Act", "paragraphs": ["In December 2012, Congress passed and the President signed into law the Sergei Magnitsky Rule of Law Accountability Act of 2012 (hereinafter the Sergei Magnitsky Act). This legislation bears the name of Sergei Magnitsky, a Russian lawyer and auditor who died in prison in November 2009 after uncovering massive tax fraud that allegedly implicated government officials. The act entered into law as part of a broader piece of legislation related to U.S.-Russia trade relations (see text box entitled \"Linking U.S.-Russia Trade to Human Rights,\" below).", "The Sergei Magnitsky Act requires the President to impose sanctions on those he identifies as having been involved in the \"criminal conspiracy\" that Magnitsky uncovered and in his subsequent detention, abuse, and death. The act also requires the President to impose sanctions on those he finds have committed human rights abuses in Russia against individuals fighting to expose the illegal activity of government officials or seeking to exercise or defend internationally recognized human rights and freedoms.", "The Global Magnitsky Human Rights Accountability Act ( P.L. 114-328 , Title XII, Subtitle F; 22 U.S.C. 2656 note) followed in 2016. This act authorizes the President to apply globally the sanctions authorities aimed at the treatment of whistleblowers and human rights defenders in Russia in the 2012 act. The Global Magnitsky Act also authorizes the President to impose sanctions against government officials and associates around the world responsible for acts of significant corruption.", "Of the 49 individuals designated pursuant to the Sergei Magnitsky Act, 38 are directly associated with the alleged crimes that Magnitsky uncovered and his subsequent ill-treatment and death. OFAC has designated another nine individuals, all from Russia's Chechnya region, for human rights violations and killings in that region and for the 2004 murder of Paul Klebnikov, the American chief editor of the Russian edition of Forbes . Two designations target the suspected killers of former Russian spy Alexander Litvinenko in London in 2006.", "In December 2017, President Trump issued EO 13818 to implement the Global Magnitsky Act, in the process expanding the target for sanctions to include those who commit any \"serious human rights abuse\" around the world, not just human rights abuse against whistleblowers and human rights defenders. At the same time, the Administration issued the first 13 designations under the act; among them were two Russian citizens designated for their alleged participation in high-level corruption. "], "subsections": []}, {"section_title": "Ukraine-Related Executive Orders and Legislation", "paragraphs": ["Most OFAC designations of Russian individuals and entities have been in response to Russia's 2014 invasion and annexation of Ukraine's Crimea region and Russia's subsequent fostering of separatist conflict in eastern Ukraine. In 2014, the Obama Administration said it would impose increasing costs on Russia, in coordination with the EU and others, until Russia \"abides by its international obligations and returns its military forces to their original bases and respects Ukraine's sovereignty and territorial integrity.\" ", "The United States has imposed Ukraine-related sanctions on more than 650 individuals, entities, and vessels (see Table 1 and Table B-1 ). In addition to Treasury-administered sanctions, the Department of Commerce's BIS denies export licenses for military, dual-use, or energy-related goods to designated end users, most of which also are subject to Treasury-administered sanctions. The basis for these Ukraine-related sanctions is a series of four executive orders (EOs 13660, 13661, 13662, and 13685) that President Barack Obama issued in 2014. ", "Two of President Obama's Ukraine-related EOs target specific objectionable behavior. EO 13660 provides for sanctions against those the President determines have undermined democratic processes or institutions in Ukraine; undermined Ukraine's peace, security, stability, sovereignty, or territorial integrity; misappropriated Ukrainian state assets; or illegally asserted governmental authority over any part of Ukraine. EO 13685 provides for sanctions against those the President determines have conducted business, trade, or investment in occupied Crimea. ", "The other two EOs provide for sanctions against a broader range of targets. EO 13661 provides for sanctions against any Russian government officials, those who offer them support, and those operating in the Russian arms sector. EO 13662 provides for sanctions against individuals and entities that operate in key sectors of the Russian economy, as determined by the Secretary of the Treasury. "], "subsections": [{"section_title": "Specially Designated Nationals", "paragraphs": ["OFAC established four SDN lists based on the four Ukraine-related EOs: two lists for those found to have engaged in specific activities related to the destabilization and invasion of Ukraine, and two lists for broader groups of targets. As of the start of 2019, OFAC has placed more than 365 individuals, entities, and vessels on the four Ukraine-related SDN lists (see Table 1 and Table B-1 ).", "OFAC has drawn on EO 13660 to designate individuals and entities for their role in destabilizing and invading Ukraine. Designees mainly include former Ukrainian officials (including ex-President Viktor Yanukovych and a former prime minister), de facto Ukrainian separatist officials in Crimea and eastern Ukraine, Russian-based fighters and patrons, and associated companies or organizations. ", "OFAC has drawn on EO 13685 to designate primarily Russian or Crimea-based companies and subsidiaries that operate in occupied Crimea.", "OFAC has drawn on EO 13661 and EO 13662 to designate a wider circle of Russian government officials, members of parliament, heads of state-owned companies, and other prominent businesspeople and associates, including individuals the Treasury Department has considered part of Russian President Vladimir Putin's \"inner circle.\" It also has designated related entities.", "Among the designated government officials and heads of state-owned companies are Russia's minister of internal affairs, Secretary of the Security Council, directors of the Foreign Intelligence Service and National Guard Troops; the chairs of both houses of parliament; and the chief executive officers of state-owned oil company Rosneft, gas company Gazprom, defense and technology conglomerate Rostec, and banks VTB and Gazprombank.", "OFAC also has designated several politically connected Russian billionaires (whom the Treasury Department refers to as oligarchs) under EO 13661 and, as of April 2018, EO 13662. Designees include 11 of Russia's wealthiest 100 individuals, including 2 of the top 10, as estimated by Forbes . Of these 11 billionaires, 7 were designated in April 2018. ", "The entities OFAC has designated include holdings owned or controlled by SDNs. These holdings include Bank Rossiya, which the Treasury Department has described as the \"personal bank\" of Russian senior officials; other privately held banks and financial services companies (e.g., SMP Bank and the Volga Group); private aluminum company Rusal; gas pipeline construction company Stroygazmontazh; construction company Stroytransgaz; electric company EuroSibEnergo; and vehicle manufacturer GAZ Group. ", "Designated entities also include several defense and arms firms, such as the state-owned United Shipbuilding Corporation, Almaz-Antey (air defense systems and missiles), Uralvagonzavod (tanks and other military equipment), NPO Mashinostroyenia (missiles and rockets), and several subsidiaries of the state-owned defense and hi-tech conglomerate Rostec, including the Kalashnikov Group (firearms). "], "subsections": []}, {"section_title": "Sectoral Sanctions Identifications", "paragraphs": ["Prior to April 2018, OFAC used EO 13662 solely as the basis for identifying entities for inclusion on the SSI List. Individuals and entities under U.S. jurisdiction are restricted from engaging in specific transactions with entities on the SSI List, which OFAC identifies as subject to one of four directives under the EO. SSI restrictions apply to new equity investment and financing (other than 14-day lending) for identified entities in Russia's financial sector (Directive 1); new financing (other than 60-day lending) for identified entities in Russia's energy sector (Directive 2); and new financing (other than 30-day lending) for identified entities in Russia's defense sector (Directive 3). A fourth directive prohibits U.S. trade with identified entities related to the development of Russian deepwater, Arctic offshore, or shale projects that have the potential to produce oil and, amended as a result of requirements enacted in CRIEEA in 2017, such projects worldwide in which those entities have an ownership interest of at least 33% or a majority of voting interests.", "As of the start of 2019, OFAC has placed 13 Russian companies and their subsidiaries and affiliates on the SSI List. The SSI List includes major state-owned companies in the financial, energy, and defense sectors; it does not include all companies in those sectors. The parent entities on the SSI List, under their respective directives, consist of the following:", "Four large state-owned banks (Sberbank, VTB Bank, Gazprombank, Rosselkhozbank) and VEB, which \"acts as a development bank and payment agent for the Russian government\"; State-owned oil companies Rosneft and Gazpromneft, pipeline company Transneft, and private gas producer Novatek; State-owned defense and hi-tech conglomerate Rostec; and For restrictions on transactions related to deepwater, Arctic offshore, or shale oil projects, Rosneft and Gazpromneft, private companies Lukoil and Surgutneftegaz, and state-owned energy company Gazprom (Gazpromneft's parent company). "], "subsections": []}, {"section_title": "Ukraine-Related Legislation", "paragraphs": ["In addition to issuing four Ukraine-related executive orders in 2014, President Obama signed into law the Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act (SSIDES) on April 3, 2014, and the Ukraine Freedom Support Act (UFSA) on December 18, 2014. SSIDES was introduced in the Senate on March 12, 2014, six days after President Obama issued the first Ukraine-related EO, declaring a national emergency with respect to Ukraine. The President signed UFSA into law the day before he issued his fourth Ukraine-related EO, prohibiting trade and investment with occupied Crimea. CRIEEA, which President Trump signed into law on August 2, 2017, amended SSIDES and UFSA (for more on CRIEEA, see \" Countering Russian Influence in Europe and Eurasia Act of 2017 ,\" below). ", "Both SSIDES and UFSA expanded upon the actions the Obama Administration took in response to Russia's invasion of Ukraine. President Obama, however, did not cite SSIDES or UFSA as an authority for designations or other sanctions actions. In November 2018, President Trump cited SSIDES, as amended by CRIEEA (Section 228), to designate two individuals and one entity for serious human rights abuses in territories forcibly occupied or controlled by Russia. President Trump has not cited UFSA as an authority for any sanctions designations.", "Sanctions authorities in SSIDES and UFSA overlap with steps taken by the President in issuing executive orders under emergency authorities. Many individuals and entities OFAC designated for their role in destabilizing Ukraine, for example, could have been designated pursuant to SSIDES. Similarly, some of the individuals OFAC designated in April 2018 as \"oligarchs and elites who profit from [Russia's] corrupt system\" potentially could have been designated pursuant to the authority in SSIDES that provides for sanctions against those responsible for significant corruption. In addition, Russian arms exporter Rosoboronexport, subject to sanctions under UFSA, is subject to sanctions under other authorities (see \" Weapons Proliferation \"). ", "SSIDES and UFSA contain additional sanctions provisions that the executive branch could use. These include sanctions against Russian individuals and entities for corruption, arms transfers to Syria and separatist territories, and energy export cutoffs. They also include potentially wide-reaching secondary sanctions against foreign individuals and entities that facilitate significant transactions for Russia-related designees, help them to evade sanctions, or make significant investments in certain oil projects in Russia (for details, see text box entitled \"Sanctions in Ukraine-Related Legislation\" below)."], "subsections": []}]}, {"section_title": "Cyber-Related Executive Orders and Legislation", "paragraphs": ["The executive branch draws on national emergency authorities to impose sanctions for a range of malicious cyber-enabled activities, including activities the United States has attributed to the Russian government. On April 1, 2015, President Obama issued EO 13694, invoking national emergency authorities to declare that \"the increasing prevalence and severity of malicious cyber-enabled activities originating from, or directed by persons located \u2026 outside the United States, constitute an unusual and extraordinary threat.\" EO 13694 targeted those who (1) engage in cyberattacks against critical infrastructure, (2) for financial or commercial gain, or (3) to significantly disrupt the availability of a computer or network. Although the President declared the national emergency relating to malicious cyber-enabled activities in April 2015, he did not announce the first designations until December 2016. ", "On December 28, 2016, President Obama issued EO 13757, which amended EO 13694 to establish sanctions against those engaged in \"tampering with, altering, or causing a misappropriation of information with the purpose or effect of interfering with or undermining election processes or institutions.\" Under the amended EO, OFAC designated four individuals and five entities for election-related malicious cyber activities. These designees included Russia's leading intelligence agency (Federal Security Service, or FSB), military intelligence (Main Intelligence Directorate, or GRU), and four GRU officers. In addition, OFAC designated two individuals for financial-related malicious cyber-enabled activities.", "In March 2018, the Trump Administration designated 13 individuals and 3 entities for election-related malicious cyber activities. These designees included the Internet Research Agency (IRA), the Russian \"troll factory\" that the Department of Justice's Special Counsel's Office indicted for crimes related to U.S. election interference in February 2018, as well as 12 of its employees, its alleged financial backer, and two of the financier's companies, all of which were also indicted. ", "In June and August 2018, OFAC designated five individuals and seven entities that the Treasury Department referred to as FSB enablers. One of these entities, Divetechnoservices, \"procured a variety of underwater equipment and diving systems for Russian government agencies\" and \"was awarded a contract to procure a submersible craft.\" The Treasury Department noted that Russia \"has been active in tracking undersea communications cables, which carry the bulk of the world's telecommunications data.\"", "In December 2018, OFAC designated two individuals and four entities for cyber-enabled election interference. According to the Treasury Department, these designees were \"related to Project Lakhta, a broad Russian effort that includes the IRA, which has sought to interfere in political and electoral systems worldwide\" and has the same financial backers as the IRA. The designees included a Project Lakhta employee whom the Department of Justice charged in September 2018 for conspiracy to defraud the United States related to Project Lakhta's efforts \"to interfere in the U.S. political system, including the 2018 midterm election.\" Designees also included four entities that represent themselves as media outlets and the head of one of these entities.", "CRIEEA, enacted in August 2017, codified EO 13694, as amended, and, in Section 224, enlarged the scope of cyber-related activities subject to sanctions to include a range of activities conducted on behalf of the Russian government that undermine \"cybersecurity against any person, including a democratic institution, or government\" (for more on CRIEEA, see \" Countering Russian Influence in Europe and Eurasia Act of 2017 ,\" below). In March 2018, the Trump Administration designated, pursuant to Section 224, the FSB, GRU, and four GRU officers, all of which OFAC previously had designated under EO 13694, as well as two other GRU officers, for the 2017 \"NotPetya\" ransomware attack that targeted Ukraine and spread to other countries. In June 2018, OFAC designated one more entity under this authority. ", "In December 2018, OFAC designated 13 GRU officers for undermining cybersecurity under Section 224. OFAC designated nine of the officers for cyber-related election interference and four for cyber-enabled operations against the World Anti-Doping Agency (WADA) and/or the Organization for the Prohibition of Chemical Weapons (OPCW). All of these officers also have been indicted by the Department of Justice for related crimes. ", "In addition, OFAC designated two GRU officers for the \"attempted assassination\" in the United Kingdom of former Russian military intelligence officer Sergei Skripal and his daughter through the use of a lethal nerve agent (for more, see \" Use of a Chemical Weapon ,\" below). Although the attempted assassination was not cyber-related, OFAC used Section 224 to designate these officers as agents of the previously designated GRU. "], "subsections": []}, {"section_title": "Countering Russian Influence in Europe and Eurasia Act of 2017", "paragraphs": ["On August 2, 2017, President Trump signed the Countering America's Adversaries Through Sanctions Act of 2017 (CAATSA), which includes as Title II the Countering Russian Influence in Europe and Eurasia Act of 2017 (CRIEEA). CRIEEA codifies Ukraine-related and cyber-related EOs (discussed above), strengthens sanctions authorities from Ukraine-related EOs and legislation, and establishes several new sanctions. It also establishes congressional review of any action the President takes to ease or lift a variety of sanctions. ", "As of the start of 2019, the Trump Administration has made 29 designations based on new sanctions authorities in CRIEEA, relating to cyberattacks (\u00a7224, 24 designations), human rights abuses (\u00a7228, amending SSIDES, 3 designations), and arms sales (\u00a7231, 2 designations). The Administration has not made designations under other new CRIEEA authorities related to pipeline development, questionable privatization deals, and support to Syria (\u00a7\u00a7232-234), nor has it made other designations under SSIDES or UFSA as amended by CRIEEA (\u00a7\u00a7225-228) related to weapons transfers abroad, certain oil projects, corruption, and sanctions evasion. Some Members of Congress have called on the President to make more designations based on CRIEEA's mandatory sanctions provisions.", "Trump Administration designations pursuant to CRIEEA include the following (some of which are discussed in more detail above, in \" Ukraine-Related Executive Orders and Legislation \" and \" Cyber-Related Executive Orders and Legislation \"):", "On March 15, 2018, OFAC made its first designations under new CRIEEA authorities in response to actions taken to undermine cybersecurity (\u00a7224). OFAC designated two entities and six individuals responsible for a 2017 global ransomware attack. Separately, OFAC made 16 designations for election-related cyber-enabled activities pursuant to EO 13694 (which was codified by CRIEEA). On April 6, 2018, OFAC imposed sanctions on 7 politically connected Russian billionaires (referred to by the Treasury Department as oligarchs), 12 companies they own or control, and 17 government officials. OFAC made these designations under the Ukraine-related EOs codified by CRIEEA. OFAC has made four other rounds of designations under these Ukraine-related EOs: on June 20, 2017 (before CRIEEA entered into law), when it designated as SDNs or placed on the SSI List 58 individuals and entities; on January 26, 2018, when it designated or placed on the SSI List 42 individuals and entities; on November 8, 2018, when it designated 9 individuals and entities; and on December 19, 2018, when it designated 1 individual. On June 11 and August 21, 2018, OFAC designated five individuals and seven entities it referred to as FSB enablers for malicious cyber-enabled activities pursuant to EO 13694. OFAC also designated one of these entities pursuant to Section 224 of CRIEEA. On September 20, 2018, the Administration imposed its first secondary sanctions pursuant to Section 231 of CRIEEA, against those engaged in \"significant transactions\" with the Russian defense or intelligence sectors. OFAC designated the Equipment Development Department of China's Central Military Commission, as well as its director, for taking delivery of 10 Su-35 combat aircraft in December 2017 and S-400 surface-to-air missile system-related equipment in 2018. On November 8, 2018, OFAC designated two individuals and one entity for committing serious human rights abuses in Russian-occupied regions of Ukraine pursuant to SSIDES, as amended by CRIEEA, Section 228. On December 19, 2018, OFAC designated two individuals and four entities for cyber-enabled election interference pursuant to EO 13694. OFAC also designated 15 individuals pursuant to Section 224 of CRIEEA for cyber-related election interference and/or cyberattacks against WADA or the OPCW, as well as for the attempted assassination in the UK of a former Russian intelligence officer and his daughter.", "As of the start of 2019, the Administration has not imposed sanctions under other CRIEEA authorities (\u00a7\u00a7225-228, 232-234). The Administration could use these authorities to target the following: ", "significant foreign investment in deepwater, Arctic offshore, or shale oil projects within Russia (\u00a7225, amending UFSA); foreign financial institutions that facilitate certain transactions for Russia's defense or energy sectors, or for those subject to Ukraine-related sanctions (\u00a7226, amending UFSA); those who engage in significant corruption (\u00a7227, amending UFSA); sanctions evaders and foreign persons that facilitate significant transactions for those subject to Russia-related sanctions (\u00a7228, amending SSIDES); investment in Russia's energy export pipelines (\u00a7232); investment (or facilitating investment) that contributes to the privatization of Russia's state-owned assets \"in a manner that unjustly benefits\" government officials and associates (\u00a7233); and any foreign person who supports or facilitates Syria's acquiring or developing a variety of advanced or prohibited weapons and defense articles, including weapons of mass destruction (\u00a7234)."], "subsections": [{"section_title": "Issues Related to CRIEEA Implementation", "paragraphs": ["The Trump Administration's pace in implementing sanctions, particularly primary and secondary sanctions under CRIEEA, has raised some questions in Congress about the Administration's commitment to holding Russia responsible for its malign activities. Administration officials contend they are implementing a robust set of Russia-related sanctions, including new CRIEEA requirements. ", "When President Trump signed CAATSA (with CRIEEA as Title II) into law in August 2017, his signing statement noted that the legislation was \"significantly flawed\" and \"included a number of clearly unconstitutional provisions.\" He said he would implement the legislation \"in a manner consistent with the President's constitutional authority to conduct foreign relations.\" ", "In the first few months of 2018, some Members of Congress expressed concern about the absence of new designations pursuant to CRIEEA's new authorities. Resolutions were introduced in the Senate, on February 12, 2018, and the House, on February 26, 2018, calling on the President to exercise relevant mandatory sanctions authorities under CRIEEA in response to Russia's \"continued aggression in Ukraine and forcible and illegal annexation of Crimea and assault on democratic institutions around the world, including through cyber attacks.\" On March 15, 2018, OFAC made its first designations, related to cyberattacks, under CRIEEA's new authorities. ", "The Administration might not invoke various CRIEEA authorities for a number of reasons. First, the Administration might cite only a relevant executive order, for example, and not legislation with corresponding authority or requirements. Second, sanctions provisions have different evidentiary requirements, which could lead the Administration to choose one over another; it also might be easier to later remove a designation made under one authority than under another. Third, investigations can take time; if OFAC has not made a designation, it may still be investigating activity that is potentially subject to sanctions. Finally, the Administration may seek to use a particular authority to deter objectionable activity; if that deterrence effort is successful, it may need to make only a few (or no) designations based on that authority."], "subsections": [{"section_title": "Section 231 Sanctions on Transactions with Russia's Defense and Intelligence Sectors", "paragraphs": ["Congress and the Administration have worked to align their positions on one of CRIEEA's new authorities, Section 231, which imposes sanctions on individuals and entities that engage in significant transactions, including arms purchases, with Russia's defense and intelligence sectors.", "In October 2017, the State Department issued initial guidance regarding Section 231 sanctions. It indicated it would examine \"a wide range of factors ... in looking at any individual case\" to determine whether a \"significant transaction\" had occurred. These factors \"may include, but are not limited to, the significance of the transaction to U.S. national security and foreign policy interests, in particular whether it has a significant adverse impact on such interests; the nature and magnitude of the transaction; and the relation and significance of the transaction to the defense or intelligence sector of the Russian government.\" A senior State Department official said the State Department would \"take a close look around the world at transactions and dealings that we think may fall within the scope of this sanctions provision, and we're going to look at really robust engagement ... and talk to partners and allies about where we find transactions that may be problematic.\" ", "In October 2017, the Administration fulfilled a Section 231 requirement to \"specify the persons that are part of, or operate for or on behalf of, [Russia's] defense and intelligence sectors.\" The State Department emphasized that the 39 entities on the list were not subject to sanctions but that secondary sanctions could be imposed on individuals and entities \"that are determined to knowingly engage in a significant transaction with a person specified in the Guidance on or after the date of enactment of the Act.\"", "In January 2018, the Administration indicated that the threat of Section 231 sanctions was having an effect without making any designations. State Department spokesperson Heather Nauert said the State Department estimated that Section 231 had led \"foreign governments [to abandon] planned or announced purchases of several billion dollars in Russian defense acquisitions.\" In February 2018, then-Secretary of State Rex Tillerson reiterated that \"we've been advising countries around the world as to what the impact on their relationship and purchases that they might be considering with Russia, and many have reconsidered those and have decided to not proceed with those discussions.\" In August 2018, U.S. Assistant Secretary of State Wess Mitchell said that \"the chilling effect\" of Section 231 had led to some $8 billion to $10 billion in \"foreclosed arms deals.\"", "At the same time, the Administration sought greater flexibility with regard to Section 231 sanctions. As originally enacted, Section 231 allowed the President to waive the application of sanctions for national security reasons or to \"further the enforcement of this title,\" but only if the President certified that Russia had \"made significant efforts to reduce the number and intensity of cyber intrusions.\" In addition, the President could delay the imposition of sanctions, if the President certified that an individual or entity was \"substantially reducing the number of significant transactions\" it makes with Russia's defense or intelligence sector.", "In April 2018, then-Secretary of Defense James Mattis asked Congress to consider introducing a more \"flexible [national security] waiver authority.\" Otherwise, he said, \"we prevent ourselves from acting in our own best interest and place an undue burden on our allies and partners.\" In July 2018, Secretary Mattis wrote to the chairpersons of the House and Senate Armed Services Committees to request the introduction of a limited national security waiver that \"would enable allied nations to simultaneously sustain their current force while they move to a closer security relationship with the U.S.\" In so doing, the United States would be able to support those \"whose goal is to end reliance on Russian weapons sales\u2026. Failure to provide waiver relief would deny the U.S. a very effective tool to undermine Russian influence in many areas of the world.\" ", "In response to Secretary Mattis's request, Congress amended Section 231 in the John S. McCain National Defense Authorization Act for Fiscal Year 2019 ( P.L. 115-232 , \u00a71294). The amendment provides for a national security waiver that does not require congressional review but does require the President to certify a transaction would not (1) be with an entity that directly participated in or facilitated cyber intrusions, (2) endanger the United States' multilateral alliances or ongoing operations, (3) increase the risk of compromising U.S. defense systems, or (4) negatively impact defense cooperation with the country in question. The President also must certify that the country is taking steps to reduce the share of Russian-produced arms and equipment in its total inventory or is cooperating with the United States on other matters critical to U.S. national security. As of the start of 2019, the Administration has not used this waiver authority. ", "On September 20, 2018, OFAC made its first designations pursuant to Section 231 against the Equipment Development Department of China's Central Military Commission, as well as its director, for taking delivery from Russia of 10 Su-35 combat aircraft in December 2017 and S-400 surface-to-air missile system-related equipment in 2018. ", "In September 2018, the State Department also expanded and formalized the list of individuals and entities it considers part of Russia's defense and intelligence sectors. Now referring to this list as the List of Specified Persons, the State Department indicated that \"any person who knowingly engages in a significant transaction with any of these persons is subject to mandatory sanctions under CRIEEA section 231.\" The State Department again expanded the list in December 2018."], "subsections": []}, {"section_title": "The Section 241 \"Oligarch\" List", "paragraphs": ["CRIEEA, in Section 241, required the Administration to submit a report to Congress that includes \"an identification of any indices of corruption\" among \"the most significant senior foreign political figures and oligarchs in the Russian Federation, as determined by their closeness to the Russian regime and their net worth.\" The Section 241 requirement neither authorizes nor requires the President to impose sanctions on individuals included in the report.", "The Treasury Department submitted this report in unclassified form with a classified annex in January 2018. The unclassified report drew on publicly available lists of political figures and wealthy Russians, without assessments of their closeness to the regime or \"indices of corruption.\" According to the Treasury Department, the classified annex contains an \"extremely thorough analysis\" of information pertaining, among other things, to \"links to corruption, and international business affiliations of the named Russian persons.\"", "Many observers speculated that the list\u2014or a more tailored version, possibly based on information from the classified annex\u2014might serve as the basis for new designations. In January 2018 testimony to the Senate Committee on Banking, Housing, and Urban Affairs, Secretary of the Treasury Steven Mnuchin indicated that \"we intend to now use that report and that intelligence to go forward with additional sanctions.\" ", "On April 6, 2018, OFAC designated several politically connected Russian billionaires (whom the Treasury Department referred to as oligarchs), companies owned or controlled by these individuals, and government officials. OFAC made these designations under Ukraine-related authorities codified by CRIEEA. The Treasury Department, however, suggested the designations were in the spirit of CRIEEA's new authorities, as they were \"in response to worldwide malign activity\" and not just Russia's invasion of Ukraine. The Treasury Department added that \"Russian oligarchs and elites who profit from [a] corrupt system will no longer be insulated from the consequences of their government's destabilizing activities.\" ", "The designation of Rusal, a leading global producer of aluminum, attracted global attention. The move marked the first time OFAC designated one of Russia's 20 largest companies. International attention also focused on the fact that designating Rusal opened the door to the possible imposition of wide-ranging secondary sanctions, mandated by CRIEEA, on foreign individuals and entities that facilitate significant transactions on behalf of designees. Rusal's designation made foreign banks and firms reluctant to engage in transactions with the firm. ", "The Trump Administration appears to have been responsive to international concerns regarding Rusal's designation. On April 23, 2018, the Administration provided a six-month wind-down period for transactions with Rusal that it has repeatedly prolonged and indicated it would remove sanctions against the firm if Kremlin-connected billionaire Oleg Deripaska, who is subject to sanctions, divested and ceded control (since his control was the justification for Rusal's designation in the first place). On December 19, 2018, the Treasury Department announced that an agreement on eliminating Deripaska's control of Rusal's parent company had been reached and, accordingly, notified Congress it intended to terminate sanctions on Rusal and two related companies in 30 days. Pursuant to CRIEEA, Congress has authority to review this action and to prevent its implementation, if Congress passes a joint resolution of disapproval by a veto-proof majority within 30 days."], "subsections": []}]}]}, {"section_title": "Other Sanctions Programs", "paragraphs": ["The United States imposes economic sanctions on Russian individuals and entities in response to a variety of other objectionable activities. These activities include the use of a chemical weapon, weapons proliferation, trade with North Korea in violation of U.N. Security Council requirements, support for the Syrian government, transnational crime, and terrorism. "], "subsections": [{"section_title": "Use of a Chemical Weapon", "paragraphs": ["On August 6, 2018, Secretary of State Michael Pompeo determined that in March 2018 the Russian government used a chemical weapon in the United Kingdom in contravention of international law (see text box entitled \"U.S. Determination of Russia's Use of a Chemical Weapon,\" below). This finding triggered the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (CBW Act).", "The CBW Act requires the President (who, in 1993, delegated CBW Act authorities to the Secretary of State) to terminate arms sales; export licenses for U.S. Munitions List items; foreign military financing; and foreign assistance, other than that which addresses urgent humanitarian situations or provides food, agricultural commodities, or agricultural products. The act also requires the President to deny credit, credit guarantees, or other financial assistance from the U.S. government, including Export-Import Bank programs, and to deny export licenses for goods controlled for national security reasons (the Commodity Control List). The act requires the imposition \"forthwith\" of these sanctions upon determining that a chemical weapon has been used. ", "On August 27, 2018, Assistant Secretary of State for International Security and Nonproliferation Christopher Ford announced the establishment of these sanctions. However, he invoked national security waiver authority to allow for the continuation of foreign assistance, exports related to government space cooperation and commercial space launches, and export licensing for national security-sensitive goods and technology in specific categories related to civil aviation safety, deemed exports or reexports on a case-by-case basis, wholly owned U.S. subsidiaries operating in Russia, and commercial end users for commercial purposes. ", "Within three months after the initial determination (in this case, early November 2018), the CBW Act also requires the President to take further economic and diplomatic punitive steps unless he can determine and certify to Congress that Russia", "\"is no longer using chemical or biological weapons in violation of international law or using lethal chemical or biological weapons against its own nationals,\" \"has provided reliable assurances that it will not in the future engage in any such activities, and\" \"is willing to allow on-site inspections by United Nations observers or other internationally recognized, impartial observers, or other reliable means exist, to ensure\" that Russia is not using chemical or biological weapons in violation of international law or against its own nationals.", "If the President does not certify on all these terms, he, in consultation with Congress, is required to", "oppose support to Russia in international financial institutions; prohibit U.S. banks from making loans or providing credit to the Russian government, other than those related to the purchase of food or other agricultural commodities or products; prohibit exports to Russia of all other goods and technology, except food and other agricultural commodities and products; restrict importation into the United States of articles that are of Russia-origin growth, product, or manufacture; downgrade or suspend diplomatic relations; and set in motion the suspension of foreign air carriers owned or controlled by Russia \"to engage in foreign air transportation to or from the United States.\"", "As of the start of 2019, the Secretary of State had not levied a new round of sanctions, nor had the President determined that Russia meets the three conditions needed to avert sanctions. On November 6, 2018, the State Department informed Congress that it \"could not certify that Russia met the required conditions\" and intends \"to proceed in accordance with the terms of the CBW Act, which directs the implementation of additional sanctions.\" In September 2018 testimony to the House Committee on Foreign Affairs, then-Assistant Secretary of State Manisha Singh said \"we intend to impose a very severe second round of sanctions under the CBW. The global community will not tolerate behavior such as we have seen from Russia, especially in poisoning and killing its own citizens.\" ", "The CBW Act authorizes the President to waive sanctions if he finds it essential to U.S. national security interests to do so and notifies Congress at least 15 days in advance. The President also may waive sanctions if he finds \"that there has been a fundamental change in the leadership and policies of the government of that country, and if the President notifies the Congress at least 20 days before the waiver takes effect.\"", "CBW-related sanctions remain in place for at least a year. They may be removed only after the President determines and certifies to Congress that the three conditions stated above have been met and that Russia is making restitution to those affected by the use of the chemical weapon."], "subsections": []}, {"section_title": "Weapons Proliferation", "paragraphs": ["Several laws require the President to impose sanctions on those he determines have engaged in trade in weapons of mass destruction or advanced conventional weapons. Restrictions cover a range of activities but generally include a one- to two-year cutoff of procurement contracts with the U.S. government and restrictions on import and export licensing. Restrictions also may include a denial of U.S. foreign aid, sales of defense articles and defense services subject to U.S. export control for national security and foreign policy purposes (U.S. Munitions List items), and export licenses for dual-use goods and services (Commerce Control List).", "Pursuant to the Iran, North Korea, and Syria Nonproliferation Act, as amended (INKSNA), Russian state-owned arms exporter Rosoboronexport and six other Russian defense entities are denied most U.S. government procurement contracts, export licenses, and trade in U.S. Munitions List-controlled goods and services. Weapons proliferation sanctions against Rosoboronexport are in addition to Ukraine-related sectoral sanctions imposed on the agency in December 2015 and its designation in April 2018 as an SDN for providing support to the Syrian government. Restrictions against entering into government contracts and other transactions with Rosoboronexport have been stated in annual Defense appropriations acts since 2013.", "The prohibitions against transactions with Rosoboronexport do not apply to contracts related to the maintenance or repair of Mi-17 helicopters purchased by the United States \"for the purpose of providing assistance to the security forces of Afghanistan, as well as for the purpose of combating terrorism and violent extremism globally.\" They also do not apply to procurement related to the purchase or maintenance of optical sensors that \"improve the U.S. ability to monitor and verify Russia's Open Skies Treaty compliance.\"", "In October 2012, the Department of Commerce's BIS imposed restrictions on 119 Russian individuals and entities, and 45 others from 11 other countries, for suspected involvement in procurement and delivery of items to Russia for military-related and other governmental or related end uses in violation of the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations. BIS periodically has imposed restrictions on other Russian individuals and entities for suspected violations of the EAR with respect to exports to Russia for military and other purposes.", "In December 2017, BIS imposed export-licensing restrictions on two entities for producing a ground-launched cruise missile system and associated launcher in violation of the Intermediate-Range Nuclear Forces Treaty. "], "subsections": []}, {"section_title": "Support to North Korea", "paragraphs": ["The U.N. Security Council, beginning in 2006, has required its member states to curtail a range of diplomatic, finance, trade, and exchange relations with North Korea. The Security Council took action in response to North Korea's withdrawal from the Treaty on Non-Proliferation of Nuclear Weapons, its testing of nuclear weapons, and its efforts to develop missile delivery systems. Security Council resolutions also have drawn attention to North Korea's abuse of diplomatic privileges and immunities, money laundering, bulk cash smuggling, disruption of regional stability, and disregard for the human rights conditions of its civilian population. ", "To meet the United States' U.N. obligations, and to implement requirements enacted in the North Korea Sanctions and Policy Enhancement Act of 2016 (P.L. 114-122; 22 U.S.C. 9201 et seq.), as amended by the Korean Interdiction and Modernization of Sanctions Act (Title III, CAATSA), the President has issued a series of executive orders to block assets, transactions, and travel of designated North Korean individuals and entities. These sanctions also apply to other foreign individuals and entities that engage in trade or support North Korean designees.", "In June and August 2017, OFAC designated a Russian oil company and its subsidiary, three Russian individuals, and two Singapore-based companies those individuals control under EO 13722 (March 2016) for trade in petroleum with North Korea. OFAC also designated two Russian entities and two related individuals for sanctions pursuant to EO 13382 (June 2005) for providing supplies and procuring metals to a North Korean company designated in 2009 for its weapons of mass destruction programs. ", "In August and September 2018, OFAC designated four more entities and six vessels for facilitating trade with North Korea. On August 3, 2018, OFAC designated a Russian bank under EO 13810 (September 2017) for \"facilitating a significant transaction on behalf of an individual designated for weapons of mass destruction-related activities.\" According to the Treasury Department, the bank has had a commercial relationship with North Korean entities since at least 2009. On August 21, 2018, OFAC designated two Russian shipping companies and six vessels under EO 13810 for involvement \"in the ship-to-ship transfer of refined petroleum products with North Korea-flagged vessels, an activity expressly prohibited by the U.N. Security Council.\" On September 13, 2018, OFAC designated under EO 13722 and EO 13810 a Russia-based front company for a China-based information technology company that \"in reality ... is managed and controlled by North Koreans\" and facilitates the exportation of information technology workers from North Korea. "], "subsections": []}, {"section_title": "Support to Syria", "paragraphs": ["In a series of executive orders dating back to 2004, the President has sought to block trade and transactions with the government of Syria and its supporters. The U.S. government has imposed these sanctions in response to Syria's past occupation of Lebanon, support of international terrorism, pursuit of weapons of mass destruction and the means to deliver them, undermining of international efforts to stabilize Iraq, and escalating violence against its own people.", "In April 2018, OFAC designated Russia's state-owned arms exporter Rosoboronexport and an associated bank pursuant to EO 13582 (August 2011) for providing material support and services to the government of Syria. Previously, during the Obama Administration, OFAC designated two other banks, which have since had their licenses revoked, and 12 related individuals pursuant to EO 13582 (in May 2014, November 2015, and December 2016)."], "subsections": []}, {"section_title": "Transnational Crime", "paragraphs": ["Russian individuals and entities are subject to sanctions for activities related to transnational crime. OFAC currently designates at least 15 Russian individuals and 6 entities for their roles in transnational criminal organizations (TCOs). In December 2017, OFAC designated as a TCO the \"Thieves-in-Law,\" which it characterized as \"a Eurasian crime syndicate that has been linked to a long list of illicit activity across the globe.\" OFAC also designated 10 individuals (Russian nationals and others) and 2 entities as TCOs for their relation to the Thieves-in-Law; these designees included 6 individuals that OFAC previously had designated in July 2011, during the Obama Administration, as part of a related TCO, the Brothers' Circle. In December 2017, OFAC delisted the Brothers' Circle and several related individuals and entities, when it designated the Thieves-in-Law. "], "subsections": []}, {"section_title": "Terrorism", "paragraphs": ["Russian individuals and entities are subject to sanctions related to global terrorism. OFAC has designated at least 2 entities and 12 affiliated individuals, in Russia or as fighters abroad, as Specially Designated Global Terrorists (SDGTs). The Caucasus Emirate, a terrorist and insurgent group in Russia's North Caucasus region, was established in 2007. OFAC listed its founder, Doku Umarov, as an SDGT in 2010 (he was killed in 2013). OFAC designated the Caucasus Emirate itself in May 2011. In 2015, the Islamic State recognized as its local affiliate the Caucasus Province (Vilayet), which reportedly was established by insurgents previously affiliated with the Caucasus Emirate. OFAC designated the Caucasus Province as an SDGT in September 2015."], "subsections": []}]}, {"section_title": "Restrictions on U.S. Government Funding", "paragraphs": ["As in past years, FY2018 and FY2019 appropriations restrict assistance to the Russian government. The Department of Defense Appropriations Act, 2019 ( P.L. 115-245 , Division A), prohibits the use of defense funding to make a loan or loan guarantee to Rosoboronexport or any of its subsidiaries (\u00a78103). For FY2018, the Energy and Water Development and Related Agencies Appropriations Act, 2018 ( P.L. 115-141 , Division D), prohibits funds to Russia from its Defense Nuclear Nonproliferation Account (\u00a7305(a)). For the same year, the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2018 (Division K), requires country notification procedures to be invoked for foreign aid to Russia (\u00a77015(f)). This act also prohibits funds from being made available to Russia's central government (\u00a77070), a restriction in place since FY2015. ", "The State Department's 2018 Trafficking in Persons Report identifies Russia as a Tier 3 nation that fails to meet minimum standards for the elimination of human trafficking. The designation requires limits on aid and U.S. support in the international financial institutions.", "In December 2018, under the International Religious Freedom Act of 1998, as amended ( P.L. 105-292 , 22 U.S.C. 6401 et seq.), Secretary of State Pompeo included Russia for the first time on the Special Watch List identifying \"governments that have engaged in or tolerated severe violations of religious freedom.\" The Special Watch List was established in 2016 to publicly name foreign governments whose treatment of religious freedoms has deteriorated over the past year. Naming to the Special Watch List serves as a warning that the United States could be considering designating the foreign nation as a Country of Particular Concern (CPC) in the coming year. If Russia were to be designated a CPC, it would become subject to diplomatic and economic sanctions that could range from private demarches to prohibitions on export licensing, procurement contracts, and transactions through U.S. financial institutions."], "subsections": []}]}, {"section_title": "Russian Countersanctions", "paragraphs": ["The Russian government has responded to U.S. and other sanctions by imposing a variety of retaliatory measures, also known as countersanctions. The day the Senate passed the Sergei Magnitsky Act in December 2012, the Russian government announced new restrictions on imported beef, pork, and poultry that, within a few months, led to a major decline in U.S. meat imports to Russia. Several days after President Obama signed the act into law, the Russian parliament voted to ban U.S. adoptions of Russian children. It also introduced a visa ban against U.S. citizens whom Russia characterized as being involved in human rights violations or crimes against and persecution of Russian citizens. The day after OFAC issued its first designations under the Sergei Magnitsky Act in April 2013, the Russian government issued a list of U.S. citizens prohibited from entering Russia.", "Russia also imposed countersanctions in response to Ukraine-related sanctions. These measures included additional travel prohibitions and a ban on the import of agricultural products from countries that had imposed sanctions on Russia. ", "Russia imposed countersanctions related to CRIEEA in anticipation of the act being signed into law. The day after Congress passed the legislation in July 2017, and while the bill awaited the President's signature, the Russian government ordered a reduction of U.S. mission personnel in Russia to no more than 455, which it said was equal to the number of Russian personnel in the United States. It also suspended U.S. use of storage and resort facilities in Moscow. Some observers viewed these measures as a response to CRIEEA but also, belatedly, to the Obama Administration's December 2016 decision to declare certain Russian diplomatic personnel persona non grata and to deny access to two Russian government-owned compounds. In response, on August 31, 2017, the Trump Administration closed Russia's Consulate General in San Francisco, a chancery annex in Washington, DC, and a consular annex that functioned as a trade office in New York City.", "In March 2018, in response to a nerve agent attack on British citizen and former Russian military intelligence officer Sergei Skripal and his daughter, the Trump Administration expelled 60 Russian diplomats and closed the Russian consulate in Seattle. In response, Russia expelled 60 U.S. diplomats and closed the U.S. Consulate General in St. Petersburg.", "After the United States' imposition of new designations of Russian government officials and politically connected billionaires and their holdings in April 2018, President Putin signed into law an act authorizing, but not requiring, restrictions related to trade with the United States and other unfriendly states, as well as foreign access to Russian public procurement and privatization."], "subsections": []}, {"section_title": "U.S. and EU Coordination on Sanctions", "paragraphs": ["Like the United States, the EU has imposed sanctions\u2014or restrictive measures in EU parlance\u2014against Russia since 2014 for its annexation of Ukraine's Crimea region and its subsequent fostering of separatism in eastern Ukraine. The EU imposed Ukraine-related sanctions largely in cooperation with the United States. EU sanctions are similar, although not identical, to U.S. sanctions. ", "Many in the EU welcomed efforts by Congress in 2017 to ensure that the Trump Administration maintained U.S. sanctions on Russia. At the same time, new sanctions that Congress introduced in CRIEEA raised some concerns in Europe about the continued alignment of U.S.-EU sanctions and cooperation on Ukraine policy more broadly.", "Unlike the United States, the EU has not imposed sanctions on Russian individuals or entities for actions related to human rights violations, malicious cyber activity, corruption, transnational crime, or support to Syria or North Korea. However, the March 2018 nerve agent attack in the United Kingdom on former Russian intelligence officer Sergei Skripal and his daughter helped spur the EU to agree to a broad new sanctions regime targeting individuals and entities involved in the development and use of chemical weapons. A degree of momentum also appears to be building within the EU for new EU-wide restrictive measures against people and organizations that carry out cyberattacks, as well as human rights violations.", "Imposing EU sanctions requires the unanimous agreement of all 28 EU member states. Most EU sanctions are imposed for a defined period of time (usually six months or a year) to incentivize change and provide the EU with flexibility to adjust the sanctions as warranted. Unanimity among EU member states also is required to renew (i.e., extend) EU sanctions."], "subsections": [{"section_title": "U.S. and EU Sanctions Cooperation", "paragraphs": ["Since the outbreak of the Ukraine crisis in early 2014, the United States and the EU have pursued similar policies\u2014including those related to sanctions\u2014aimed at supporting Ukraine's political transition and restoring its territorial integrity. U.S.-EU cooperation in imposing sanctions on Russia and coordination on other political and diplomatic responses to the Ukraine conflict largely have been viewed as a high point in transatlantic relations and have helped prevent Russia from driving a wedge between the United States and Europe. ", "In the first half of 2014, Ukraine-related sanctions that the United States and the EU imposed focused mostly on denying visas and freezing assets of Russian and Ukrainian government officials and pro-Russian separatists. The United States then imposed its first round of sectoral sanctions on July 16, 2014. At the time, many in the EU were hesitant to impose sectoral sanctions on Russia; they worried that doing so might hinder a peaceful resolution to the conflict and negatively affect the EU's extensive trade and investment relations with Russia. Some EU countries dependent on Russian oil and gas supplies also feared that stronger sanctions could prompt Russia to cut off energy exports in retaliation.", "On July 17, 2014, the day after President Obama imposed the first U.S. sectoral sanctions on Russia, separatists in eastern Ukraine downed Malaysia Airlines Flight MH17 with a missile supplied by the Russian military. This event, along with the intensifying conflict and continued Russian intransigence, changed the political calculus in Europe on sanctions. European officials and publics were particularly dismayed when the separatists prohibited access to the MH17 crash site and delayed recovery of the remains of the 298 victims, including over 200 EU citizens. By the end of July 2014, the EU expanded its list of individuals and entities subject to asset freezes and visa bans and joined the United States in imposing sanctions on selected companies in Russia's financial, defense, and energy sectors. Both the United States and the EU further tightened their sectoral sanctions in September 2014.", "U.S.-EU coordination sought to close as many gaps as possible between the two sanction regimes to send a unified message to Russia, maximize the effectiveness of sanctions, and make compliance for financial firms and multinational companies easier. President Obama asserted that the combined U.S.-EU measures would \"have an even bigger bite\" than U.S. sanctions alone.", "Although EU sectoral sanctions largely mirror those imposed by the United States, they represent a carefully crafted compromise among EU member states. Agreeing on sectoral sanctions was difficult for the EU, given that the union's 28 member states have varying economic interests and historical relations with Russia. EU member states sought to draft certain provisions in ways to protect some national economic interests. For example, Germany and other member states dependent on Russian gas supplies were eager to preserve their energy ties to Russia. Consequently, the EU decided to apply lending and investment restrictions only in the oil sector, not to Gazprom or other companies in the Russian gas sector. The EU also applied restrictions on the sale of energy exploration equipment, technology, and services only to oil, not gas, development projects. Finally, the EU designed sectoral sanctions in a way that would share potential economic burdens across all member states.", "The EU has tied lifting its sanctions on Russia to the full implementation of the Minsk peace agreements for Ukraine and asserts that it is committed to maintaining sanctions until this goal is achieved. At the same time, questions persist in some EU countries about the sanctions' effectiveness, especially amid concerns that sanctions could be hindering EU relations with Russia on other global priorities and harming European business interests. The EU sanctions (and Russian countersanctions) have come with financial costs for certain industries in some EU member states, including Germany, Finland, and the Baltic states. Some European officials have periodically floated ideas about restructuring the sanctions. Others firmly reject suggestions to relax or recalibrate EU sanctions and have urged the Trump Administration to uphold U.S. sanctions on Russia."], "subsections": []}, {"section_title": "U.S. and EU Ukraine-Related Sanctions Compared", "paragraphs": ["EU sanctions in response to Russia's annexation of Crimea and destabilization of eastern Ukraine consist of three measures:", "Restrictive measures on individuals and entities in Russia and Ukraine believed to be involved in the annexation of Crimea and destabilization of eastern Ukraine. Designees are subject to asset freezes and, for individuals, visa bans. As of the start of 2019, the EU has designated 164 individuals and 44 entities (Council Decision 2014/145/CFSP, March 17, 2014). Economic sanctions targeting Russia ' s finance, defense, and energy sectors ( sectoral sanctions). The EU requires its member states to impose lending and investment restrictions on five major state-controlled Russian banks, three defense firms, and three energy companies, as well as their subsidiaries outside the EU. The sanctions also ban the import and export of arms; the sale of dual-use goods and technology to Russian military end users and nine mixed companies; and sales of equipment, technology, and services for oil-development projects related to deepwater, Arctic offshore, and shale exploration (Council Decision 2014/512/CFSP, July 31, 2014). Restrictions on economic relations with Ukraine's occupied Crimea region. The EU has banned EU individuals and EU-based companies from importing goods, exporting certain goods and technologies, and providing tourism services in Ukraine's Crimea region. The EU also has restricted trade and investment in certain economic sectors and infrastructure projects (Council Decision 2014/386/CFSP, June 23, 2014).", "In addition, in response to the political upheaval in Ukraine in early 2014 and in an effort to bolster Ukraine's political transition, the EU imposed restrictive measures on individuals identified as responsible for the misappropriation of Ukrainian state funds or for the abuse of office causing a loss of Ukrainian public funds. The EU hoped to prevent the transfer of such funds outside of Ukraine and to facilitate their recovery. As of the start of 2019, the EU has frozen assets of and imposed visa bans on 13 former Ukrainian officials, including ex-Ukrainian president Viktor Yanukovych and others who served in his government (Council Decision 2014/119/CFSP, March 5, 2014)."], "subsections": [{"section_title": "Sanctions Targeting Individuals and Entities", "paragraphs": ["As of the start of 2019, the United States has designated as Ukraine-related SDNs\u2014subject to asset freezes, prohibitions on transactions, and, for individuals, travel bans\u2014209 individuals, 158 entities, and 2 vessels. In its equivalent sanctions programs, the EU has designated 177 individuals and 44 entities. Both the United States and the EU have designated a number of high-ranking Russian officials and other individuals close to President Putin. ", "The U.S. and EU lists of designated individuals and entities are not identical. Various legal and political reasons account for some of the differences in the U.S. and EU designations. The EU has imposed sanctions on more individuals and entities directly related to the fighting in Ukraine\u2014military officials, insurgents, and battalions\u2014than has the United States. The United States has specifically designated more companies operating in Crimea and entities affiliated with other designated individuals and entities, whereas the EU provides for blanket restrictions on Crimea-related activities and against affiliated individuals and entities. The EU is unable to impose restrictive measures on some individuals who hold dual citizenship with EU countries.", "Since 2014, several individuals have been removed from the EU sanctions list. Unlike the United States, which requires a decedent's survivors to petition for removal, the EU removes individuals from its sanctions list due to death. In addition, some designees have successfully petitioned for their removal. "], "subsections": []}, {"section_title": "Sectoral Sanctions", "paragraphs": ["EU and U.S. restrictions against lending and/or investments with entities in specific sectors mostly overlap and target a handful of key companies and their subsidiaries in the financial, defense, and energy sectors, including exports and services related to deepwater, Arctic offshore, or shale oil projects in Russia (see Table C-1 ). ", "The manners in which the United States and the EU employ this measure differ somewhat and have changed over time. As of the start of 2019, the United States specifically identifies 13 Russian companies and 276 of their subsidiaries and affiliates as subject to sectoral sanctions. The EU, for its part, identifies 11 entities (and majority-owned subsidiaries outside the EU) as subject to sectoral sanctions. The United States has explicitly identified several companies, including Gazprom, with which sales of equipment, technology, and services for certain oil projects are prohibited; by contrast, the EU has not named specific companies to which these prohibitions apply. In addition, the EU does not impose sanctions on such oil projects worldwide, as CRIEEA does. ", "EU and U.S. policies are comparable in restricting most arms trade with and dual-use exports to Russia, but the EU applied arms-trade sanctions to future contracts only. The EU decision to allow existing arms sales and service contracts with Russia to continue was largely at the insistence of France (which had an existing $1.2 billion contract to sell two Mistral helicopter carriers to Russia) and some Central European countries that rely on Russian companies to service their Soviet-era weapons systems. Analysts suggest, however, that the arms-trade sanctions\u2014and ongoing concern about Russian actions in Ukraine and Russian military resurgence\u2014prompted EU members to reevaluate some existing weapons system sales and licenses. Although not required to do so under the terms of the EU sanctions, France canceled the sales contract with Russia for the Mistral helicopter carriers. Germany also canceled a preexisting contract to supply Russia with a $155 million combat simulation center. Central and Eastern European countries have been advancing plans to phase out Russian-origin military equipment and replace it with more modern U.S. and European equipment.", "The EU and the United States also addressed the issue of existing sales and service contracts on energy development projects differently. The EU allowed for the continuation of existing contracts and agreements, in certain cases with authorization at the national level. The United States generally prohibited, other than a brief wind-down period, the continuation of existing contracts and agreements, unless otherwise authorized by OFAC. This difference led, for instance, to Eni (an Italian energy company) continuing its deepwater exploration in the Black Sea in partnership with Russian state-controlled oil company Rosneft; by contrast, ExxonMobil withdrew from certain joint ventures with Rosneft in 2018 after failing in April 2017 to secure a waiver from the Treasury Department to move forward with its own oil exploration project in the Black Sea.", "Neither the United States nor the EU has employed sectoral sanctions that broadly target Russia's gas sector or state-controlled gas company Gazprom. Reports suggest that as the United States and EU worked to develop sanctions on Russia in 2014, they agreed to avoid measures that could harm the other's interests, including in relation to the production and supply of Russian gas. As discussed above, many EU countries dependent on Russian gas supplies were particularly worried about sanctions that could impede the flow of Russian gas and harm relations with Russia in this area. The United States and EU do apply financial restrictions to two Gazprom subsidiaries (Gazpromneft, its oil production and refining subsidiary, and Gazprombank, a financial institution), and the U.S. restrictions on deepwater, Arctic offshore, and shale oil projects also specifically apply to Gazprom. In addition, the United States applies lending restrictions to Novatek, a private Russian gas company. Neither the United States nor the EU has applied sanctions targeting gas production or trade."], "subsections": []}]}, {"section_title": "Implications of CRIEEA", "paragraphs": ["Given the previously close U.S.-EU coordination on Ukraine-related sanctions, many in the EU were dismayed by certain provisions in CRIEEA as the draft legislation evolved in 2017. European leaders and EU officials recognized that the main intent of CRIEEA was to codify and strengthen sanctions on Russia, including many with parallels in EU legislation. They also were concerned, however, that some of the initial provisions were drafted without regard for the EU's role as a U.S. partner and had the potential to negatively affect EU economic, business, and energy interests. ", "For example, the German and Austrian governments were concerned about the possible effects of a provision authorizing (but not requiring) sanctions on individuals or entities that engage in trade or make investments (with a value of $1 million, or $5 million in aggregate over 12 months) that enhance Russia's ability to construct energy export pipelines. This provision had the potential to establish new secondary sanctions on German, Austrian, and other European energy companies through their financing of the Nord Stream 2 pipeline, a Gazprom-run project to increase the amount of Russian gas delivered to Germany and other parts of Europe via the Baltic Sea. ", "Some in Europe also objected to what they viewed as a unilateral imposition of sanctions. Those of this view worried that new U.S. sanctions could complicate the delicate political consensus on the EU's own sanctions and weaken U.S.-EU cooperation on Ukraine. Others warned that codifying U.S. sanctions could reduce flexibility in negotiations with Moscow on resolving the conflict in Ukraine. Finally, many in the EU were troubled that CRIEEA's introduction of more general secondary sanctions against those who engage in significant transactions with U.S. designees could impact European business partners of Russian companies, even if those companies were not on the EU's own sanctions list. ", "EU concerns were accommodated to some degree by language inserted in CRIEEA specifying that the President should \"continue to uphold and seek unity\" with European partners on sanctions (\u00a7212) and that new U.S. sanctions on pipeline ventures would not be imposed without coordinating with U.S. allies (\u00a7232). Following CRIEEA's enactment, the European Commission (the EU's executive) expressed overall satisfaction that \"European interests can thus be taken into account in the implementation of any [U.S.] sanctions.\"", "At the same time, some in Europe remain wary that implementation of new U.S. sanctions could affect European energy projects. The European Commission has cautioned that the EU is prepared to take \"appropriate steps\" if U.S. sanctions disadvantage EU companies trading with Russia in the energy sector. The EU has not elaborated publicly on what such \"appropriate steps\" might be, and the EU hopes to avoid the need for these measures. In October 2017, the Trump Administration published guidance noting that pipeline-related sanctions in CRIEEA, Section 232, would not apply to existing projects (i.e., those initiated before August 2, 2017). The guidance also reasserted that the United States would not impose any such sanctions without coordination with U.S. allies. ", "Some European officials and experts are skeptical of the Trump Administration's commitment to consult the EU and its member states ahead of imposing new sanctions, especially amid broader European concerns about whether the Administration regards the EU as a partner or a competitor. Those of this view point, for example, to the Trump Administration's April 6, 2018, designation of several Russian billionaires and the companies they control. Some media reports suggested the Trump Administration issued these designations without significant prior consultations with the EU or leading European governments. ", "In particular, the designation of Rusal, a leading global producer of aluminum and the raw material alumina, had potentially significant implications for Europe's aluminum and manufacturing sectors. Concern that the Administration would enforce CRIEEA's secondary sanctions against European firms that have commercial and financial dealings with Rusal (whose facility in Ireland supplies many European aluminum producers) effectively halted such transactions. The U.S. announcement also led to a rise in the price of alumina. European officials warned that sanctions on Rusal could lead to plant closures, job losses, and the supply and production chains of key European industries, ranging from the makers of aluminum cans and foil to automobile and aerospace companies. ", "The Trump Administration appears to have been responsive to subsequent European entreaties (and those of other international partners, such as Brazil) regarding the difficulties posed for them by Rusal's designation. Treasury Secretary Mnuchin indicated that the \"impact on our partners and allies\" contributed to a U.S. decision to extend the wind-down period for transactions with Rusal. In December 2018, the Treasury Department announced its intention to terminate sanctions against Rusal and two related companies (see \" The Section 241 \"Oligarch\" List ,\" above).", "Some analysts have noted that the United States and the EU continue to coordinate other Ukraine-related sanctions. In January 2018, for example, the Trump Administration designated three individuals (including a Russian deputy energy minister) and one entity under Ukraine-related authorities that the EU had sanctioned in April 2017 for their involvement in supplying occupied Crimea with gas turbines. German company Siemens originally sold the turbines for use in Russia; the EU determined that the transfer of the turbines to Crimea was in breach of contractual provisions covering the original sale by Siemens and in contravention of EU prohibitions on the supply of key equipment for certain infrastructure projects in Crimea. "], "subsections": []}, {"section_title": "Potential New EU Sanctions", "paragraphs": ["Beyond Ukraine, the EU and many member states are concerned about a range of other Russian activities, including use of a chemical weapon, cyber threats, and human rights abuses. ", "In October 2018, the EU approved a new legal framework that is to allow it to impose restrictive measures on individuals and entities involved in the development and use of chemical weapons, regardless of their nationality or location. Authorized sanctions include travel bans and asset freezes. Although this measure is not aimed at Russia specifically, observers largely view the March 2018 Skripal attack as providing impetus for the new sanctions framework. The EU has not yet named individuals or entities subject to these new sanctions, but many analysts expect the two Russian intelligence officers accused of carrying out the Skripal attack will be among those ultimately designated.", "Analysts also expect that any new EU-wide sanctions for cyber activities would not be aimed at Russia specifically but could be used against Russian individuals and entities who are believed to be engaged in malicious cyber activities. In October 2018, EU leaders directed that \"work on the capacity to respond to and deter cyberattacks through EU restrictive measures should be taken forward.\" Press reports indicate that such sanctions likely would consist of travel bans and asset freezes, although the EU has not yet put forward a specific proposal.", "Some European leaders and EU officials\u2014including some members of the European Parliament\u2014have called for an \"EU Magnitsky Act\" to impose sanctions on Russians complicit in human rights abuses, money-laundering activities, and other \"antidemocratic\" activities. Since 2016, Estonia, Latvia, and Lithuania have passed their own national versions of the Sergei Magnitsky Act or Global Magnitsky Act. In May 2018, the UK Parliament approved a so-called Magnitsky amendment to its new Sanctions and Anti-Money Laundering Act that expands UK authorities to sanction individuals, companies, or states that commit gross human rights violations. Press reports indicate that Sweden, Denmark, and the Netherlands are considering similar national \"Magnitsky\" legislation.", "The Netherlands also has proposed that the EU should develop a new sanctions regime that could target individuals accused of human rights abuses worldwide, regardless of their nationality. Media reports suggest that the Netherlands has refrained from naming its proposal for a new EU human rights sanctions regime after Sergei Magnitsky in an effort to ensure the necessary EU consensus. Dutch officials reportedly assess that some EU member states may be hesitant to support such a regime if it were named for Magnitsky because of concerns that it would prompt a negative Russian reaction. Other experts note that the motivations for developing an EU-wide human rights sanctions regime go beyond concerns about Russia and have been prompted by the killing of Saudi journalist Jamal Khashoggi.", "Following the Skripal attack, some UK parliamentarians and analysts began calling for additional financial sanctions on Russia, including possibly banning financial clearinghouses from selling Russian sovereign debt. UK Prime Minister Theresa May reportedly agreed to look into imposing such a ban on the City of London, but experts note that any such sanctions likely would be more effective if imposed by the EU, given that key European clearinghouses are not incorporated in the UK and would not be affected by unilateral UK sanctions. Many analysts are skeptical, however, that the EU would be able to achieve the required unanimity to impose such additional EU-wide sanctions on Russian financial activity. Some analysts also suggest that the UK's expected departure from the EU in March 2019 may diminish the prospects for any further EU sanctions targeting Russia's sovereign debt."], "subsections": []}]}, {"section_title": "Economic Impact of Sanctions on Russia", "paragraphs": [], "subsections": [{"section_title": "The Russian Economy Since 2014", "paragraphs": ["It is difficult to disentangle the impact of sanctions imposed on Russia, particularly those related to its invasion of Ukraine, from fluctuations in the global price of oil, a major export and source of revenue for the Russian government. ", "In 2014 and 2015, Russia faced serious economic challenges and entered a two-year recession ( Figure 1 ), its longest in almost 20 years. Investor sentiment collapsed, resulting in capital flight, a collapse in the value of the ruble, and inflation ( Figure 1 and Figure 2 ). The Russian government and many Russian firms (including firms not subject to sanctions) were broadly shut out of capital markets. The government's budget deficit widened, and it tapped reserves to finance spending, defend the value of the ruble, and recapitalize banks affected by sanctions. Between the end of 2013 and May 2015, Russia's foreign exchange reserves fell by about one-third.", "Oil prices began to rise in 2016. Although they have not reached pre-2014 levels, the uptick helped to stabilize Russia's economy. The rate of economic contraction slowed, inflation fell, and the value of the ruble stabilized ( Figure 1 ). The Russian government and non-sanctioned Russian entities resumed some access to international capital markets, capital outflows slowed, and foreign direct investment into Russia rebounded ( Figure 2 ). At the same time, 2016 was a difficult fiscal year; the Russian government relied heavily on funding from one of its sovereign wealth funds and was forced to partially privatize Rosneft, the prized state-owned oil company, to raise funds.", "Russia continues to face long-term economic challenges relating to adverse demographic changes and limited progress on structural reforms. Its reserve holdings remain well below their peak levels. In addition, sanctions continue to constrain the ability of some Russian firms, particularly in the banking sector, to access financing ( Figure 2 ). ", "However, the Russian economy is notably stronger than in 2014-2015. In 2017, the International Monetary Fund (IMF) commended Russian authorities for their effective policy response, which, along with higher oil prices, helped the economy exit its two-year recession. One expert noted \"the fear of economic destabilization that has permeated the country since its 2014 invasion of Crimea\u2014which was met with crippling sanctions from the West\u2014has all but evaporated.\" "], "subsections": []}, {"section_title": "Estimates of the Broad Economic Impact", "paragraphs": ["Some statistical studies estimate the precise impact of sanctions relative to other factors, particularly large swings in oil prices. These studies suggest that sanctions may have had a negative but modest impact. One survey of research on the economic impact of sanctions and oil prices concluded that sanctions had a relatively smaller impact on Russian gross domestic product (GDP) than oil prices. Likewise, in November 2014, Russian Finance Minister Anton Siluanov estimated the annual cost of sanctions to the Russian economy at $40 billion (2% of GDP), compared to $90 billion to $100 billion (4% to 5% of GDP) lost due to lower oil prices. Similarly, in 2015, Russian economists estimated that sanctions would decrease Russia's GDP by 2.4% by 2017 but that this effect would be 3.3 times lower than the effect of the oil price shock. Another analysis found that oil prices, not sanctions, drove changes in the value of the ruble. ", "Russian officials and businesspeople subject to sanctions, who at times have harshly criticized the sanctions, have made public statements that appear to support these conclusions. For example, in November 2016, Putin argued that sanctions were \"severely harming Russia\" in terms of access to international financial markets but that the impact was not as severe as the harm from the decline in energy prices. Likewise, in July 2017, Alexei Kudrin, an economic adviser to Putin, argued that U.S. sanctions were curbing economic growth in Russia and preventing the country from regaining its status as a leading economic power. He contended, however, that a robust structural reform package could lift growth to 3%-4% and offset the effects of sanctions. In May 2018, Arkady Rotenberg, a billionaire businessman close to Putin, said the Ukraine-related sanctions \"did create certain difficulties, but we've overcome them, and these difficulties made us unite.\""], "subsections": [{"section_title": "Factors Influencing the Broad Economic Impact", "paragraphs": ["Russia's economic recovery in 2016-2017 occurred while sanctions remained in place and, in some instances, were tightened. As a result, some have questioned why the sanctions have not had a greater economic impact. A key factor is that the Obama Administration, the EU, and other international counterparts designed Ukraine-related sanctions, which account for most of the implemented U.S. and global Russia sanctions, to have a limited and targeted economic impact. The sanctions do not broadly prohibit economic activity with Russia. They were intended to be \"smart sanctions\" that targeted individuals and entities responsible for offending policies and/or were associated with key Russian policymakers but inflicted minimal collateral damage on the Russian people or on the economic interests of countries imposing sanctions. ", "As a result, the Ukraine-related sanctions target specific Russian individuals and firms. In some cases, they prohibit only specific types of transactions. Overall, more than four-fifths of the largest 100 firms in Russia (in 2017) are not directly subject to any U.S. sanctions, including companies in a variety of sectors, such as railway, retail, autos, services, mining, and manufacturing ( Table D-1 ). According to one independent Russian polling firm, 78% of individuals polled in April 2018 reported that they were largely unaffected by Western sanctions.", "More than half of the U.S. SDN sanctions that block assets and restrict transactions target individuals, not firms. Such sanctions may be consequential for the specific individuals involved and may send important political messages, but they are unlikely to have broader effects on Russia's economy. SDN sanctions on entities are mainly limited to businesses controlled by designated individuals, companies that operate in Crimea, and several defense and arms firms. Of the 100 largest firms in Russia, 7 are subject to full blocking (SDN) sanctions ( Table D-1 ). ", "In contrast, the sectoral (SSI) sanctions target large Russian companies, affecting 7 of Russia's 10 largest companies. However, they limit a specific set of transactions relating to debt, equity, and/or certain long-term oil projects ( Table D-1 ). In terms of debt (and, in some cases, equity) restrictions, the sanctions were intended to restrict the access of major Russian financial, energy, and defense firms to international markets. Many major Russian firms had borrowed heavily from international investors. Restricting their access to new financing from western capital markets was intended to disrupt their ability to refinance (rollover) existing debts. As their debts matured, this would force firms to make large repayments or scramble for alternative sources of financing. ", "The sectoral sanctions restricting certain oil projects sought to put long-term pressure on the Russian government by denying Russian oil companies access to Western technology to modernize their industry or locate new sources of oil. In 2016, a State Department official explained that sanctions were not designed to push Russia \"over the economic cliff\" in the short run but to exert long-term economic pressure on the country. By design, the full economic ramifications of restrictions on oil projects may have yet to materialize fully. The IMF estimated that lower capital accumulation and technological transfers resulting from sanctions could reduce Russia's output in the longer term by up to 9%; in contrast, it estimated the short-term impact of the sanctions as much smaller, between 1.0% and 1.5%. "], "subsections": []}]}, {"section_title": "Impact on Russian Firms and Sectors", "paragraphs": ["Even if the economic effects on Russia's economy as a whole may have been modest, the impact on specific firms and sectors may be more significant. Several anecdotal examples illustrate the sanctions' impact on the firm and sector levels:", "Russian banks have been reluctant to provide financial services in Crimea over the threat of sanctions. Rostec, a major state-owned defense conglomerate, saw profits drop in 2014 from a loss in foreign investment caused by sanctions. Some Western oil service companies, a valuable source of expertise and equipment for Russian oil companies, limited their operations in Russia following sanctions. Exxon canceled its involvement in a joint venture with Rosneft over U.S. sanctions. Sanctions reportedly forced Rosneft to suspend an oil project in the Black Sea. The Russian government has encouraged wealthy Russians to repatriate offshore funds, citing the need for financing in the face of sanctions. Workers in Rusal's hometown have expressed concerns about their jobs following U.S. sanctions. Alfa Bank, Russia's largest privately held bank (and not under U.S. sanctions), announced in January 2018 that it was winding down its business with Russian defense firms, many of which are subject to SDN sanctions.", "Using statistical models, one study uses firm-level data to assess the impact of U.S. and European sanctions in 2014 on Russian firms. Based on data from between 2012 and 2016, it finds that sanctioned firms on average lost about one-quarter of their operating revenues, over one-half of their asset values, and about one-third of their employees relative to their non-sanctioned peers. The authors argue that the findings suggest the sanctions effectively targeted firms with relatively minimal collateral damage to other Russian firms.", "The study estimates the average effects on sanctioned firms and provides only a snapshot of the sanctions' effects. Some sanctioned firms did worse than average; other sanctioned firms did well. For example, the ruble-denominated profits of Sberbank (the largest bank in Russia), Rostec (a major defense conglomerate), and Novatek (an independent natural gas producer) are higher today than when sectoral sanctions were imposed in 2014 (see Table D-2 )."], "subsections": [{"section_title": "Factors Influencing the Impact on Firms and Sectors", "paragraphs": ["Some firms have weathered the sanctions better than others have. This discrepancy may be attributable to a number of factors. First, the extent to which sanctions interrupted economic transactions varies across sanction targets. It is not clear to what extent some sanctioned targets, including Russian intelligence services, the Night Wolves (a motorcycle club), or the Eurasian Youth Union, engage in significant economic transactions with the United States or in the U.S. financial system. If the transactions are limited, the sanctions are more symbolic than disruptive of economic activity. Additionally, the limited design of the sectoral sanctions did not necessarily result in a rapid disruption in business operations, particularly as oil prices picked up. Despite sanctions, Russian energy firms largely have been able to carry on business as normal. Russian oil production has reached record highs, despite restrictions on access to Western technology for certain oil exploration projects.", "Second, the Russian government has implemented various measures to support some sanctioned firms. For example, Sberbank benefited from substantial central bank purchases of its new debt, which it can no longer sell in U.S. and European capital markets due to sanctions. The Russian government strategically granted contracts to sanctioned firms; it provided sanctioned Bank Rossiya the sole contract to service the $36 billion domestic wholesale electricity market, granted the contract to build a bridge linking the Russian mainland with annexed Crimea to a sanctioned construction company (Stroygazmontazh), and selected a sanctioned bank (VTB) to be the sole manager of the government's international bond sales. ", "In December 2014, the government launched a bank recapitalization program worth about 1.2% of GDP to support large and regional banks directly or indirectly affected by the sanctions, as well as provided regulatory forbearance and increased deposit insurance. The central bank also helped sanctioned banks access foreign currency. The Russian government increased its orders from its defense industry firms in 2014, offsetting sales lost from the sanctions. It is also repurposing a nationalized bank, Promsvyazbank, to finance Russia's defense industry in response to financing challenges created by sanctions. In addition, Promsvyazbank extended a new credit line to the Renova Group, owned by billionaire Viktor Vekselberg, to support the firm within weeks after it and its owner came under U.S. sanction in April 2018. ", "More government support may be forthcoming. For example, the head of Novatek, an independent natural gas producer subject to financing restrictions, reportedly has requested government assistance funding the creation of deepwater drilling equipment to replace U.S. imports. The government is creating a department within the Finance Ministry to liaise with sanctioned businesses, study their challenges, and draft government proposals for support. Although it is difficult to find a precise quantitative estimate of the extent to which the Russian government has used resources to shield firms from sanctions, such support shifts the cost of sanctions from the targeted firms to the government.", "Third, some Russian firms have minimized the sanctions' impact by forging alternative economic partnerships. For example, sanctions had the potential to jeopardize Russia's military modernization program, but Russia ultimately found alternative suppliers, particularly from China, South Korea, and Southeast Asia. Additionally, independent gas company Novatek secured alternative financing from China to proceed with a natural gas project in the Artic. Gazprom secured a $2 billion loan from the Bank of China, the largest loan from a single bank in Gazprom's history. More generally, Russian energy firms have concluded a number of corporate agreements with Chinese and Saudi companies following the imposition of sanctions. ", "However, the extent to which Russia can successfully execute a \"pivot to China\" and other non-Western sources of financing, investment, and trade should not be overstated. Public Chinese banks seem more willing to engage than private Chinese banks, and business transactions are complicated by other geopolitical considerations, such as Russia's reluctance to join China's new development bank, the Asian Infrastructure Investment Bank, or participate in Asian forums, such as the Asia-Pacific Economic Cooperation summit. Eager to attract investment, Russian firms also appear to be offering better investment deals to Chinese investors to circumvent financing problems caused by sanctions, suggesting that alternative financing has not been a full substitute for Western capital. Finally, CRIEEA's introduction of a policy option to impose secondary sanctions against third parties that engage in significant transactions with sanctioned Russian individuals and firms, and with Russia's defense and intelligence sectors, means that these alternatives remain risky and uncertain."], "subsections": []}]}]}, {"section_title": "Outlook", "paragraphs": ["Debates about the effectiveness of U.S. and other sanctions on Russia continue in Congress, in the Administration, and among other stakeholders. After more than four years of escalating sanctions, Russia has not reversed its occupation and annexation of Ukraine's Crimea region, nor has it stopped fostering separatism in eastern Ukraine. On the contrary, it has extended military operations to the Black Sea and the Azov Sea bordering Ukraine and Russia. The United States and its allies have documented multiple instances of Russian cyber-enabled malicious activities. They also have determined that Russian agents used a lethal nerve agent to attack an opponent in the United Kingdom. In addition, Russia remains an influential supporter of the Syrian government. ", "Nonetheless, many observers argue that sanctions help to restrain Russia or that the imposition of sanctions is an appropriate foreign policy response regardless of immediate effect. Since the introduction of sanctions, multiple reports suggest Russian government officials and their supporters pay close attention to sanctions developments and express concern about their real and potential impact. Observers also note that sanctions have led the Russian government to make policy adjustments, including diverting resources to affected businesses and sectors. ", "There exists a wide range of options moving forward. Some argue it is necessary to introduce more sanctions on Russia, including more comprehensive and/or more targeted sanctions. Others contend that the Administration should first focus on fully implementing the range of existing sanctions authorized by law. Some observers stress the need to coordinate new sanctions with Europeans and other allies. Others are skeptical that sanctions can produce desired changes in Russian behavior, especially without also using other foreign policy tools. Some express concerns that sanctions, particularly those that are imposed unilaterally, hurt U.S. businesses and cede economic opportunities to firms in other countries. ", "In the 115 th Congress, several bills were introduced to increase the use of sanctions to address Russia's malign activities. Members of Congress may continue to debate the establishment and implementation of U.S. sanctions on Russia in the 116 th Congress.", "Potential new sanctions on Russia in legislation range widely. In the 115 th Congress, they included measures to expand the types of targeted individuals, entities, and sectors ( S. 3336 , H.R. 6437 , S. 2313 / H.R. 4884 , H.R. 5428 , H.R. 5216 ); expand the range of prohibited transactions, including with regard to Russian sovereign debt ( S. 3336 , H.R. 6437 , S. 2313 / H.R. 4884 , H.R. 6423 , H.R. 5428 ); make mandatory previously discretionary secondary sanctions on Russian pipeline investment ( S. 3229 , H.R. 6384 ); expand the scope of sanctions in response to malicious cyber-enabled activities ( H.R. 5576 / S. 3378 ); determine whether the government of Russia supports acts of international terrorism (which would expand sanctions on Russia) ( S. 3336 , S. 2780 , H.R. 6573 , H.R. 6475 ); and expand congressional review procedures to the Sergei Magnitsky Act ( S. 3336 , S. 3275 ) .", "Appendix A. Legislative Abbreviations and Short Titles", "CAATSA: Countering America's Adversaries Through Sanctions Act ( P.L. 115-44 )", "CBW Act: Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 ( P.L. 102-182 , Title III; 22 U.S.C. 5601 et seq.)", "CRIEEA: Countering Russian Influence in Europe and Eurasia Act of 2017, as amended ( P.L. 115-44 , Title II; 22 U.S.C. 9501 et seq.)", "Global Magnitsky Act: Global Magnitsky Human Rights Accountability Act ( P.L. 114-328 , Title XII, Subtitle F; 22 U.S.C. 2656 note)", "IEEPA: International Emergency Economic Powers Act ( P.L. 95-223 ; 50 U.S.C. 1701)", "INKSNA: Iran, North Korea, and Syria Nonproliferation Act, as amended ( P.L. 106-178 , 50 U.S.C. 1701 note)", "NEA: National Emergencies Act ( P.L. 94-412 ; 50 U.S.C. 1621)", "Sergei Magnitsky Act: The Sergei Magnitsky Rule of Law Accountability Act of 2012 ( P.L. 112-208 , Title IV; 22 U.S.C. 5811 note)", "SSIDES: Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014, as amended ( P.L. 113-95 ; 22 U.S.C. 8901 et seq.)", "UFSA: Ukraine Freedom Support Act of 2014, as amended ( P.L. 113-272 ; 22 U.S.C. 8921 et seq.)", "Appendix B. U.S. Sanctions on Russia", "Appendix C. U.S. and EU Sectoral Sanctions", "Appendix D. Russian Firms and U.S. Sanctions"], "subsections": []}]}}
{"id": "R45727", "title": "The Highway Funding Formula: History and Current Status", "released_date": "2019-05-20T00:00:00", "summary": ["More than 90% of federal highway assistance is distributed to the states by formula. Between 1916, when Congress created the first ongoing program to fund road construction, and 2012, various formula factors specified in law were used to apportion highway funds among the states. After 1982, these factors were partially overridden by provisions to guarantee that each state received federal funding at least equal to a specific percentage of the federal highway taxes its residents paid.", "Since enactment of the Moving Ahead for Progress in the 21st Century Act (MAP-21; P.L. 112-141) in 2012, formula factors such as population and highway lane mileage have ceased to have a significant role in determining the distribution of funds. The apportionment among the states under the current surface transportation law, the Fixing America's Surface Transportation Act (FAST Act; P.L. 114-94), passed in 2015, is not based on any particular policy objectives other than ensuring the stability of states' shares of total funding based on their shares in the last year of MAP-21, In addition, each state is guaranteed an amount at least equal to 95 cents on the dollar of the taxes paid by its residents into the highway account of the Highway Trust Fund.", "Some policy-related factors used to distribute highway funds in the past are no longer in use, while other possible factors sometimes mentioned in policy discussions, such as states' rates of population growth and projected increases in truck traffic, have never been used as formula factors. This report describes mechanism by which Federal-Aid Highway Program funds are distributed today, and includes tables comparing individual states' shares of the FY2018 apportionment with their shares of some factors relevant to highway needs. Table 5 ranks states' apportionments based on the apportionment amount per resident, per square mile of land area, per federal-aid highway lane mile, and per million vehicle miles traveled on federal-aid highways."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["In FY2019 and FY2020, more than 90% of federal highway assistance is being distributed to the states by formula. Highway funding formulas have been in use to apportion federal highway authorizations among the states since the passage of the first federal-aid highway act more than a century ago. The resulting apportionments are widely used to evaluate how individual states benefit from federal highway assistance relative to other states. ", "Although the procedure currently used to distribute federal highway funds is written into law and programs receiving funds in this manner are frequently referred to as \"formula programs,\" the statutory language does not describe any formula in a straightforward way. In consequence, it can be difficult to understand how the apportionment of funds is determined, and whether that apportionment adequately reflects considerations that may be of concern to Members of Congress. ", "This report describes the origins and development of highway formula funding, and then discusses how the use of various formula factors gave way to the current apportionment mechanism. A series of tables compares individual states' shares of the FY2018 apportionment with their shares of some factors relevant to highway needs."], "subsections": []}, {"section_title": "The Early Years of Formula Funding", "paragraphs": ["The Federal Aid Road Act of 1916 (39 Stat. 355), which created the first ongoing federal program to fund road construction, used three factors to apportion federal highway funds among the states. After setting some funds aside to cover administrative costs, the law apportioned the remaining authorization to the states according to three factors. These factors were selected, in part, because they were not difficult to compile and seemed relevant to individual states' costs to build and maintain a highway system. The three factors, which were weighted equally, were", "1. land area: the ratio which the area of each state bore to the total area of all states; 2. population: the ratio which the population of each state bore to the total population of all the states, as shown by the latest available census; and 3. postal road mileage: the ratio which the mileage of rural free delivery routes and star routes in each state bore to the total mileage of such in all the states at the close of the preceding year.", "The selection of these factors had much to do with disagreement between urban and rural interests about the goals of the road program and with constitutional concerns regarding the appropriateness of federal spending on road construction. The population and land area factors were proxies for the rural and urban state interests. The population factor was seen as protecting the interests of the more densely populated eastern states and the land area factor as protecting the interests of large but less populated western states. The use of a postal road mileage factor helped allay any constitutional qualms, as Article I, Section 7 of the Constitution specifically grants Congress the power \"To establish\u2026post roads,\" but the factor also garnered favor from less populous states. The 1916 act also set the maximum federal share of the cost of any highway project at 50%. The 1916 act supported the construction of rural roads and excluded streets and roads in places having a population of 2,500 or more.", "The formula factors enacted in 1916 remained in place, with only temporary changes made in Depression-era emergency legislation and war legislation, until passage of the Federal-Aid Highway Act of 1944 (58 Stat. 838). The 1944 act began to shift the federal highway program away from construction of rural roads. It created three separate highway systems: a Primary System, a Secondary System, and an Urban System. Each system was authorized a percentage of the total funds provided, which were then apportioned among the states by formula. ", "The Federal Highway Act of 1921 (42 Stat 22) retained the three formula factors adopted in 1916, but increased federal control over the use of funds by requiring the designation of a system of highways, limited to 7% of each state's total highway mileage, on which the federal funds could be spent. The 1921 act also guaranteed that each state would receive at least one-half percent of the total appropriation in any year. With this law, the three main characteristics of today's federal highway program were in place: funds were apportioned to the states by formula and implementation was left primarily to state governments; the states were required to provide matching funds; and the funds could be spent only on designated federal-aid highways."], "subsections": []}, {"section_title": "The Post-War Highway Program", "paragraphs": ["The Primary System funds were apportioned using the three formula factors established in 1916: each state's share of the national land area, population, and rural post road mileage, with each factor weighted equally. Funds for the Secondary System were apportioned based on each state's share of the national land area, rural population, and rural postal route mileage. The Urban System formula apportioned funds to the states based on one formula factor: each state's share of the national population living in urban areas of 5,000 or more residents. Although the act still favored rural areas, it was the first significant programmatic shift away from what had been essentially a rural road program. ", "During the 1970s and 1980s, as Congress created many narrowly targeted programs within the Federal-Aid Highway Program, it frequently adopted formula factors specific to those programs. By FY1977, there were 35 separate authorized programs. Of those, 13, including all the larger programs, apportioned funds by a variety of statutory formulas. Examples of programs receiving more narrowly targeted funding were the new highway safety and hazard elimination programs, for which funds were apportioned based on both total state population and public road mileage. With the aging of the Interstate Highway System, a new Interstate Resurfacing, Restoration, Rehabilitation, and Reconstruction Program (Interstate 4R) was created, with funding apportioned based on each state's Interstate Highway lane miles and vehicle miles traveled on the Interstate System, as shares of the respective national totals.", "A 1986 report from the General Accounting Office (GAO) criticized the use of land area, decennial population, and postal road mileage in the distribution of highway funding. It recommended instead the use of vehicle miles traveled (on and off the Interstate System), lane miles, motor fuel consumption, annualized population statistics, and road deterioration. ", "Although the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA; P.L. 102-240 ) substantially reorganized the highway programs, it apportioned the funds of the four largest apportioned programs (accounting for roughly 70% of all apportioned funds) according to each state's share of apportionments during the FY1987-FY1991 period rather than according to specific factors. According to a 1995 GAO report, this procedure, to a significant extent, made \"the underlying data and factors\u2026 not meaningful because the funding outcome is largely predetermined.\" Under ISTEA, the apportionments from FY1992 through FY1998 were fixed for six years by the factors used in the FY1987-1991 apportionments. Significantly, they did not reflect the new 1990 census data. An exception was a new program, the Congestion Mitigation and Air Quality Improvement Program (CMAQ), which was apportioned according to population in each state's air quality non-attainment areas relative to the national population living in non-attainment areas.", "In 1998, the Transportation Equity Act for the 21 st Century (TEA-21; P.L. 105-178 ) reestablished apportionment formula factors for individual programs within the Federal-Aid Highway Program, often using new factors designed to act as proxies for the needs a program was intended to address. For example, the formula for the National Highway System program, one of several large programs, used four factors to apportion the annual authorization:", "1. 25% based on the ratio of each state's lane miles on principal arterial routes (excluding the Interstate System) to the national total; 2. 35% based on the ratio of each state's vehicle miles traveled on principal arterial routes (excluding the Interstate System) to the national total; 3. 30% based on the ratio of each state's diesel fuel use on highways within each state to the national total; 4. 10% based on the ratio of each state's per capita lane miles of principal arterial highways to the national total.", "The Surface Transportation Program, the federal-aid program that the states had the greatest discretion in spending, was apportioned by a formula that used three weighted factors:", "1. 25% based on the ratio of each state's total lane miles of federal-aid highways to the national total; 2. 40% based on the ratio of each state's vehicle miles on federal-aid highways to the national total; 3. 35% based on the ratio of each state's estimated tax payments attributable to highway users paid into the highway account of the Highway Trust Fund\u2014the source of federal funding for highways\u2014to the national total.", "The last surface transportation reauthorization that used formula factors to apportion individual program authorizations was the Safe, Accountable, Flexible, Efficient Transportation Equity Act: a Legacy for Users (SAFETEA-LU; P.L. 109-59 ), enacted in 2005. That law apportioned 13 programs using funding formulas. For example, funds under the Highway Safety Improvement Program were apportioned according to three equally weighted factors: (1) each state's share of lane miles of federal-aid-highways; (2) vehicle miles traveled on federal-aid highways; and (3) number of fatalities on the federal-aid system. In contrast, the Railway-Highway Crossings Program used the share of public railway-highway crossings in each state.", "The factors of land area and postal route mileage were no longer used for distributing any highway funds. Population figures were used for only two of the 13 formula programs authorized in SAFETEA-LU."], "subsections": [{"section_title": "Equity Programs", "paragraphs": ["Between 1982 and 2005, the formulas embedded in surface transportation authorization acts were not always decisive in determining how funds were apportioned. After some states objected that their residents paid more of the motor fuel and truck taxes that flowed into the highway account of the Highway Trust Fund than they received in federal highway funding, Congress enacted \"equity\" programs that generally did three things. First, each act included a guarantee that each state would receive federal funding at least equal to a specific percentage of the federal highway taxes its residents paid. Second, all or nearly all states were given an increase in funding from the equity program. Third, the program size was calculated in a way to assure that the states receiving less than their residents paid in highway taxes could be made whole up to their guaranteed percentage and most other states could get more funding as well. ", "In the 1982 act, 5% of highway funding was distributed through the equity program, but in SAFETEA in 2005 the equity program received over 20% of the funds. The equity program distribution determined the total apportionment amount for each state and reduced the impact of the formula factors when it came to calculating each state's apportionments under the individual formula programs."], "subsections": []}]}, {"section_title": "Formulas in Recent Highway Legislation", "paragraphs": ["The Moving Ahead for Progress in the 21 st Century Act (MAP-21; P.L. 112-141 ), enacted in 2012, eliminated or consolidated two-thirds of the federal highway programs. It also made major changes in the way funds were apportioned among the states.", "Prior to MAP-21, Congress wrote authorizations for each individual apportioned program into law, and specified the formula factors that were used to determine each state's share of the authorization for that program. Beginning with MAP-21, all the large formula programs shared a single authorization amount, and the states' apportioned shares of the total authorization were determined before their amounts were divided among the specific programs.", "MAP-21 did not specify any formula factors that were to be used to apportion funds among the states. Instead, the apportionment was based primarily on each state's share of total apportionments in FY2012, the last year of SAFETEA, as extended. In practice, this meant that the main determinants of the totals apportioned among the states under MAP-21 were the relative distributions under the equity bonus program established in SAFETEA. ", "In the MAP-21 formula, Congress addressed concerns about fairness from two different perspectives. On the one hand, it guaranteed that each state received an apportionment equal to at least 95 cents of every dollar the state's highway users paid in highway taxes. This represented an increase from the 92% return guaranteed in 2012, the final year of SAFETEA. On the other hand, by effectively fixing the apportionment shares at the FY2012 level Congress ensured that most states receiving more from the Federal-Aid Highway Program than their residents paid in federal highway taxes would still get increases in funding. As was true under the SAFETEA and earlier equity programs, some states could receive larger amounts without substantially reducing the amounts provided to other states only because of the large amounts of funding provided. This was possible because the bill transferred $18 billion from other Treasury accounts to the highway account of the Highway Trust Fund. "], "subsections": []}, {"section_title": "Apportionment of Highway Funds Under Current Law", "paragraphs": ["The Fixing America's Surface Transportation Act (FAST Act; P.L. 114-94 ), enacted in 2015, is the current authorization of federal highway programs. It made only modest changes to the MAP-21 apportionment mechanism. As was true with MAP-21, the FAST Act authorizes a single amount for each year for all the apportioned highway programs combined. It retained the basic MAP-21 formula and the basic MAP-21 programmatic structure. This means that while apportionments are still based primarily on each state's share of total apportionments in FY2012, the final year of SAFETEA, each state is guaranteed an apportionment equal to at least 95% of the amount its residents pay into the highway account of the Highway Trust Fund."], "subsections": [{"section_title": "Calculating Each State's Apportionment", "paragraphs": ["Under the FAST Act, the authorization that funds six programs within the Federal-Aid Highway Program is apportioned among the states by formula. The programs are the National Highway Performance Program (NHPP), the Surface Transportation Block Grant program (STBG), the Highway Safety Improvement Program (HSIP), the Congestion Mitigation and Air Quality Improvement Program (CMAQ), Metropolitan Planning (MP), and the National Highway Freight Program (NHFP). As summary of the process follows.", "Prior to calculating states' apportionments for FY2020, the Federal Highway Administration is to reserve two amounts, $67 million for NHPP and $1.020 billion for STBG. These reserve funds will later supplement these programs. ", "The remaining amount, net of these two amounts, is the \"base apportionment amount.\"", "Each state's initial apportionment amounts are calculated for the three components (the base apportionment, supplemental NHPP, and supplemental STBG) by multiplying the base apportionment and two supplemental amounts by the ratio that each state's FY2015 apportionments bear to the nationwide total for FY2015. ", "Next, the three initial amounts are adjusted, if necessary, to assure that each state's total base apportionment plus reserve funds is no less than 95 cents for every dollar the state contributed to the highway account of the Highway Trust Fund in the most recent fiscal year for which data are available. Any necessary upward adjustments for some states are offset by proportional decreases to the amounts of other states. However, basing initial apportionment amounts on FY2015 apportionment shares and guaranteeing a 95-cents-on-the-dollar return to all states without major reductions in some states' funding requires a larger program than the existing Highway Trust Fund taxes can fund. As was true under MAP-21, large transfers from the Treasury general fund to the highway account of the Highway Trust Fund authorized in the FAST Act made it possible to fund the Federal-Aid Highway Program in a way that would fulfill the 95% guarantee without having to reduce other states' apportionments significantly. "], "subsections": []}, {"section_title": "Division of Each State's Apportionment Among the Programs", "paragraphs": ["Each state's base apportionment amount is used as the starting point in determining the division of the state's apportionment among the six apportioned programs. First, the amount determined for the NHFP is set aside from each state's base apportionment. Second, from the remaining amounts an amount is distributed for CMAQ (according to the state's FY2009 CMAQ apportionment share). Third, the state's MP program gets a distribution (based on the state's FY2009 apportionment share). Fourth, the remainder of the state's apportionment is divided among the three remaining core programs as follows: 63.7% is apportioned to the NHPP, 29.3% to the STBG, and 7% to the HSIP. Fifth, the STBG (each year FY2016-FY2020) and NHPP (for FY2019-FY2020 only) reserve funds are added to supplement each state's STBG and NHPP amounts calculated from the state's base apportionments."], "subsections": []}]}, {"section_title": "Evaluating States' Highway Apportionments", "paragraphs": ["As described above, the procedure currently used to apportion federal highway funds among the states is not based on any particular policy objectives other than ensuring the stability of state shares based on the apportionment shares in the last year of MAP-21, FY2015. In addition, each state is guaranteed an amount at least equal to 95 cents on the dollar of the taxes paid by its residents into the highway account of the Highway Trust Fund. Some policy-related factors used to distribute highway funds in the past are no longer in use, while other possible factors sometimes mentioned in policy discussions, such as states' rates of population growth and projected increases in truck traffic, have never been used as formula factors. ", "The following tables compare each state's share of highway apportionments under current law to that state's proportion of various factors that have been used in the past in the distribution of federal highway funds. Table 5 provides a ranking of individual states' apportionment amounts as judged by these factors."], "subsections": []}]}}
{"id": "R45307", "title": "Georgia: Background and U.S. Policy", "released_date": "2019-04-01T00:00:00", "summary": ["Georgia is one of the United States' closest partners among the states that gained their independence after the USSR collapsed in 1991. With a history of strong economic aid and security cooperation, the United States has deepened its strategic partnership with Georgia since Russia's 2008 invasion of Georgia and 2014 invasion of Ukraine. U.S. policy expressly supports Georgia's sovereignty and territorial integrity within its internationally recognized borders, and Georgia is a leading recipient of U.S. aid to Europe and Eurasia.", "Many observers consider Georgia to be one of the most democratic states in the post-Soviet region, even as the country faces ongoing governance challenges. The center-left Georgian Dream-Democratic Georgia party (GD) has close to a three-fourths supermajority in parliament and governs with limited checks and balances. Although Georgia faces high rates of poverty and underemployment, its economy in 2017 and 2018 appeared to show stronger growth than it had in the previous four years.", "The GD led a coalition to victory in parliamentary elections in 2012 amid growing dissatisfaction with the former ruling party, Mikheil Saakashvili's center-right United National Movement, which came to power as a result of Georgia's 2003 Rose Revolution. In August 2008, Russia went to war with Georgia to prevent Saakashvili's government from reestablishing control over the regions of South Ossetia and Abkhazia, which broke away from Georgia in the early 1990s and became informal Russian protectorates.", "Congress has expressed firm support for Georgia's sovereignty and territorial integrity. The Countering Russian Influence in Europe and Eurasia Act of 2017 (P.L. 115-44, Title II, \u00a7253) states that the United States \"does not recognize territorial changes effected by force, including the illegal invasions and occupations\" of Abkhazia, South Ossetia, and other territories occupied by Russia. In September 2016, the House of Representatives passed H.Res. 660, which condemns Russia's military intervention and occupation of Abkhazia and South Ossetia. In February 2019, the Georgia Support Act (H.R. 598), which originally passed the House by unanimous consent in the 115th Congress (H.R. 6219), was reintroduced in the 116th Congress. The act would express support for Georgia's sovereignty, independence, and territorial integrity, as well as for its democratic development, Euro-Atlantic integration, and peaceful conflict resolution in Abkhazia and South Ossetia.", "The United States provides substantial foreign and military aid to Georgia each year. Since 2010, U.S. nonmilitary aid to Georgia has totaled around $64 million a year on average, in addition to a five-year Millennium Challenge Corporation grant of $140 million to support education. In FY2019, Congress appropriated almost $90 million in nonmilitary aid to Georgia. Since 2010, U.S. military aid to Georgia has been estimated at around $68 million a year on average. In FY2019, Congress appropriated $35 million in Foreign Military Financing and $2 million in International Military Education and Training funds. Defense assistance also includes a three-year, $35 million training initiative, the Georgia Defense Readiness Program."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Historically located between empires, various Georgian kingdoms and principalities were incorporated into the Russian Empire beginning in the early 19 th century. Georgia enjoyed a brief period of independence from 1918 until its forcible incorporation into the Union of Soviet Socialist Republics (USSR, or Soviet Union) in 1921-1922. Georgia gained independence in 1991 with the collapse of the Soviet Union. ", "Georgia is located in the South Caucasus, a region between the Black and Caspian Seas and separated from Russia by the Greater Caucasus mountain range. The South Caucasus also borders Iran and Turkey (see Figure 1 ). Georgia's South Caucasus neighbors, Armenia and Azerbaijan, have been locked in territorial conflict for almost three decades over the predominantly Armenian-populated region of Nagorno-Karabakh, formally part of Azerbaijan. ", "Georgia has its own unresolved conflicts with two Russian-supported regions, Abkhazia and South Ossetia. These regions, in addition to being settled by ethnic Georgians, are home to ethnic groups that more closely identify with ethnic kin in Russia's North Caucasus, located across the Caucasus mountain range. After a short war with Georgia in 2008, Russia unilaterally recognized the independence of these breakaway regions and stationed military forces on their territory.", "Georgians speak and write their own distinct Caucasian language, with a written literary form that emerged at least as early as the fifth century. The Georgian Orthodox Church, to which most Georgians belong, is autocephalous (independent), with roots that date back to the fourth century. "], "subsections": []}, {"section_title": "Politics", "paragraphs": ["Today, many observers consider Georgia to be one of the most democratic states among the USSR's successor states. The U.S.-based nongovernmental organization (NGO) Freedom House considers Georgia to be the freest post-Soviet state (not including the Baltic states), followed by Ukraine, Moldova, and Armenia. ", "Georgia has a parliamentary system of governance, resulting from constitutional reforms that came into effect in 2013 and 2018. The prime minister is the country's most powerful executive. Georgia's president is commander in chief of the armed forces and has the power to veto legislation and dissolve parliament under certain circumstances.", "Georgia's prime minister, Mamuka Bakhtadze (aged 36), assumed office in June 2018. Bakhtadze was Georgia's minister of finance from November 2017 to June 2018; he previously served as the head of Georgian Railways and the Georgian International Energy Corporation. Georgia's president, elected in November 2018, is Salome Zurabishvili (aged 67), a former member of parliament (2016-2018) and minister of foreign affairs (2004-2005) who was previously a French national and diplomat. The parliamentary chairman is Irakli Kobakhidze (aged 40), a former professor of law and politics.", "Georgia has a unicameral legislature with 150 members elected for four-year terms by two methods: 77 by party list and 73 by majoritarian district. The most recent parliamentary elections in 2016 resulted in a sizeable win for Georgia's center-left ruling party, Georgian Dream-Democratic Georgia (GD), which initially led a ruling coalition after coming to power in 2012 and now governs alone. GD won 49% of the party list vote and nearly all majoritarian races, leading to control of more than 75% of parliamentary seats (116 of 150 deputies). ", "Before losing this supermajority in February 2019 (see \" Ruling Party Tensions \" below), GD had enough votes to unilaterally enact changes to Georgia's constitution. This led many observers and opposition supporters to express concern that there were insufficient checks and balances against the ruling party. ", "GD's main competitor in 2016 was the center-right United National Movement (UNM), the former ruling party previously led by ex-president Mikheil Saakashvili. The UNM received 27% of the party vote and 27 seats (18%). After months of infighting, the UNM fragmented in 2017, and most of its deputies, including much of the party's senior leadership, formed a new opposition party called European Georgia-Movement for Liberty. A third electoral bloc, the nationalist-conservative Alliance of Patriots of Georgia-United Opposition, cleared the 5% threshold to enter parliament with six seats.", "Georgia's most recent local elections were in 2017. They provided a similar picture of ruling party dominance across the country. In the party-list portion of the vote to local councils, GD won in all 73 districts, with a total of 56% of the vote. The UNM and European Georgia won 27% of the vote (17% and 10%, respectively). The nationalist-conservative Alliance of Patriots won 7%. GD won more than 92% of majoritarian seats, giving it a total of 77% of seats in local councils nationwide. GD also won mayoral elections in all but two districts. "], "subsections": [{"section_title": "2018 Presidential Election", "paragraphs": ["The most recent presidential elections were held in two rounds in October and November 2018. The victor, Salome Zurabishvili, won 60% of the vote in the second round. Zurabishvili ran as an independent candidate, although she was supported by GD. UNM candidate Grigol Vashadze, like Zurabishvili an ex-foreign minister, received 40%. The first round of the election was a closer race (39% to 38%), but Zurabishvili appeared to benefit from greater turnout in the runoff (56%, compared to 46% in the first round). ", "Domestic and international observers considered the election to be competitive but flawed. Observers noted instances of official pressure against state employees to support Zurabishvili, as well as incidents of ballot box stuffing. They also expressed concern about allegations of mass vote-buying, related to Prime Minister Bakhtadze's pre-runoff announcement that a philanthropic foundation associated with GD founder and chairman Bidzina Ivanishvili had agreed to purchase and forgive the small private debts of more than 600,000 individuals. The U.S. Department of State said it shared the concerns of observers and indicated \"these actions are not consistent with Georgia's commitment to fully fair and transparent elections.\""], "subsections": []}, {"section_title": "Ruling Party Tensions", "paragraphs": ["Since 2018, GD has exhibited signs of internal tension. Many observers believe that GD founder Ivanishvili continued to maintain an influential behind-the-scenes role in government after stepping down as prime minister in 2013. Ivanishvili formally returned to politics as GD's party chairman in 2018, reportedly due to frustration with the party's growing internal divides. Then-Prime Minister Giorgi Kvirikashvili resigned less than two months later, citing \"disagreements\" with Ivanishvili. Kvirikashvili's resignation also followed a series of anti-government demonstrations against what protestors perceived to be heavy-handed police raids and judicial bias. Prime Minister Bakhtadze succeeded Kvirikashvili in June 2018.", "More recently, GD suffered parliamentary defections in February 2019, as a result of a dispute concerning judicial appointments (see \" Dispute over Judicial Reforms \" below). By the end of March 2019, eight members of parliament, led by Eka Beselia, former chairwoman of the parliamentary committee on legal affairs, had left GD. Beselia and most of the defecting MPs were expected to establish a new faction, while two MPs joined the Patriots of Georgia faction.", "The GD government also has had tense relations with the presidency. Ex-President Giorgi Margvelashvili, who was elected in 2013, initially was allied to GD. He subsequently adopted a more independent stance and fell out of favor with then-Prime Minister Ivanishvili. Margvelashvili frequently criticized the government and vetoed legislation several times, although parliament usually overrode his veto. Margvelashvili chose not to run for reelection in 2018.", "For the 2018 election, GD did not nominate its own presidential candidate. This possibly reflected a belief within the party leadership that the powers of the presidency were too limited to warrant fielding a candidate for the position. After some deliberation, however, GD decided to support Zurabishvili, an independent candidate. Before making this decision, government officials had criticized Zurabishvili for comments she made on the 10 th anniversary of the August 2008 war that appeared to blame Georgia's ex-leadership for the war. "], "subsections": []}, {"section_title": "Dispute over Judicial Reforms", "paragraphs": ["One of the government's internal disputes concerns judicial reform. A series of reforms from 2013 to 2017 restructured Georgia's judicial institutions. A High Council of Justice oversees the appointment and dismissal of judges. The council has 15 members, a majority of whom are selected by the Conference of Judges, the judiciary's self-governing body. ", "In December 2018, several GD members of parliament criticized the High Council's decision to nominate several judges to Georgia's 28-seat Supreme Court whom they considered tainted by association with the UNM. The dispute sparked an intensive debate within the ruling party, as well as with some NGOs who sided with the dissenting GD members out of a concern that the nominated judges could be susceptible to corruption. Ultimately, the Supreme Court nominees withdrew their candidacies. GD's leadership agreed to further debate the rules of appointment and blamed the dispute on the opposition. ", "Appointments to a nine-member Constitutional Court are divided between the parliament, president, and the Supreme Court. In recent years, the Constitutional Court has been the focus of various disputes concerning possible bias (sometimes against the government, other times against the opposition). In July 2018, the Constitutional Court received international attention for ruling that marijuana use was not a criminal offense, a decision government officials and church representatives heavily criticized. In response, parliament passed legislation imposing strict limitations on marijuana use. "], "subsections": []}, {"section_title": "Constitutional Reforms", "paragraphs": ["After GD won a supermajority in 2016, Georgia's parliament convened a State Constitutional Commission to draft additional reforms to the constitution intended to consolidate Georgia's transition to a parliamentary system of governance. Parliament passed the reforms in September 2017 by a vote of 117-2. Opposition parties, who opposed certain measures that appeared to strengthen the ruling party, refused to participate in the vote; civil society organizations also registered opposition. Then-President Margvelashvili vetoed the amendments and proposed alternative reforms. Parliament overrode his veto, and the president signed the amendments into law. The constitutional reforms entered into force after the 2018 presidential election.", "The reforms affect Georgia's parliamentary system in several ways. One of the main changes is the abolition of Georgia's directly elected presidency beginning in 2023. Instead, the president is to be indirectly elected by a college of electors made up of parliamentary deputies and local government representatives. ", "Another major change is that parliamentary elections are to be held entirely on the basis of party lists, eliminating single-member districts. In theory, this change is expected to lead to greater opposition representation in parliament, as in Georgia parties that win the party-list vote tend to overwhelmingly win single-member districts. Although this change was to take effect in 2020, parliament voted to push back its implementation to 2024, a move many observers interpreted as an attempt to prolong the ruling party's dominance. In January 2019, several opposition parties launched a petition to pressure the government to implement the shift to a fully proportional system in advance of the 2020 parliamentary elections.", "In the course of adopting constitutional reforms, parliament considered several recommendations of the Council of Europe's Venice Commission, a legal and democratic advisory body. In the end, the commission provided a \"positive assessment\" of the reforms, although it noted \"the postponement of the entry into force of the proportional election system to October 2024 is highly regrettable and a major obstacle to reaching consensus.\" The Venice Commission said the reform \"completes the evolution of Georgia's political system towards a parliamentary system and constitutes a positive step towards the consolidation and improvement of the country's constitutional order, based on the principles of democracy, the rule of law and the protection of fundamental rights.\""], "subsections": []}]}, {"section_title": "Economy", "paragraphs": ["For more than two decades, Georgia has been recovering from the severe economic decline it experienced after the Soviet Union collapsed. It remains a relatively poor country. In 2018, Georgia's GDP was around $16.7 billion (approximately 16 times less than that of Connecticut, a U.S. state with a similar population size). Its per capita GDP ($4,506) is midsized in comparison to Russia and other post-Soviet states.", "In 2017-2018, Georgia's economy appeared to enter a period of relatively strong growth. After average GDP growth of around 3% a year from 2013 to 2016, Georgia's GDP grew at 4.8% a year in 2017 and 2018. Increased economic growth has been based on strengthening domestic consumption and external demand, as well as \"generally strong policy efforts,\" according to the International Monetary Fund (IMF). The IMF forecasts a sustained rate of GDP growth of around 4.9% annually from 2019 to 2021. In February 2019, the IMF commended Georgian authorities \"for advancing structural reforms [but] stressed the need for continued efforts to promote inclusive growth and higher economic resilience to external shocks.\" ", "Poverty has declined in recent years, although it is still relatively high. According to official data, 22% of the population lived in poverty in 2017 (down from 39% a decade before). In recent years, recorded unemployment has been around 14%; some surveys suggest a higher rate of unemployment. More than 40% of Georgian laborers work in agriculture, a sector of the economy that accounts for less than 10% of GDP. ", "Georgia's economy depends in part on remittances from labor migration. From 2013 to 2017, remittances made up around 11% of Georgia's GDP. In 2017, Russia was estimated to be the source of almost 60% of Georgian remittances, followed by Ukraine (8%), Greece (5%), and Armenia (4%).", "In 2017, the IMF approved a three-year Extended Fund Facility arrangement to provide Georgia with around $285 million in loans to support economic reforms focusing, among other things, on financial stability and infrastructure investment. The IMF noted the need for Georgia to increase its agricultural productivity, improve its business environment, and reform its education system. ", "Georgia has suffered in the past from energy shortages and gas cutoffs, but it has improved its energy security in recent years. Georgia has rehabilitated hydropower plants and constructed new ones. Nearly all its natural gas supplies come from neighboring Azerbaijan. ", "In 2018, Georgia's three largest merchandise trading partners were Turkey ($1.7 billion, or 14% of Georgia's trade), Russia ($1.4 billion, 11%), Azerbaijan ($1.1 billion, 9%), and China ($1.0 billion, 8%). Trade with the European Union (EU), as a whole Georgia's largest trading partner, made up around 27% of total trade ($3.4 billion). More than half of Georgia's merchandise exports (51%) went to five countries: Azerbaijan, Russia, Armenia, Bulgaria, and Turkey. Its main exports were copper ores, beverages (wine, water, and spirits), motor vehicles, and iron and steel. ", "Free trade agreements with the EU (signed in 2014) and China (signed in 2017) may improve Georgia's prospects for export-led growth. Georgia is also exploring a trade agreement with India. However, Georgia's manufacturing sector is small, and its top exports include used foreign cars and scrap metal, which provide low added value. The IMF indicates that Georgia could further diversify its agricultural exports but notes the need to improve quality and standards. ", "Tourism to Georgia has increased in recent years and annual tourism-related income has more than quadrupled since 2010. In 2018, the number of international visitors who stayed in the country overnight was around 4.8 million, a 345% increase since 2010. Most tourists are from neighboring countries: Russia, Azerbaijan, Turkey, and Armenia. ", "In recent years, foreign direct investment (FDI) appears to have exceeded the high levels Georgia enjoyed in 2006 to 2008, before the global financial crisis, when FDI averaged $1.5 billion a year. From 2014 to 2018, FDI averaged $1.64 billion a year. More than 60% of the total amount came from Azerbaijan, the Netherlands, the United Kingdom, and Turkey. During this period, most FDI was in transport and communications (28%); other leading sectors were finance (13%), construction (13%), and energy (10%). In 2017, the IMF noted that attracting FDI to sectors with high export potential, including tourism and agriculture, is \"crucial to ensure growth in foreign markets.\"", "Georgia aspires to be a key transit hub for the growing East-West overland trade route between China and Europe. In pursuit of this goal, a U.S.-Georgian consortium is constructing a major new deepwater port and free industrial zone in Anaklia, which is located on Georgia's Black Sea coast and abuts the Russian-occupied region of Abkhazia. The port, scheduled to begin operations in 2021, is considered Georgia's largest-ever infrastructure investment and is to be accompanied by major government investments in Georgia's road and rail infrastructure."], "subsections": []}, {"section_title": "Relations with the European Union and NATO", "paragraphs": ["The Georgian government has long made closer integration with the EU and NATO a priority. According to recent polls, over 80% of the Georgian population supports membership in the EU and over 75% supports membership in NATO.", "In 2014, Georgia concluded an association agreement with the EU that included a Deep and Comprehensive Free Trade Area (DCFTA) and encouraged harmonization with EU laws and regulations. The EU granted Georgia visa-free travel in 2017. The EU also is a major provider of foreign aid to Georgia, providing on average over \u20ac120 million (around $135 million) a year in 2017 and 2018.", "As of 2018, the benefits of the EU free-trade agreement for Georgia remain unclear. In 2018, the total value of Georgian exports to the EU was 17% greater than in 2014. Exports to the EU as a share of Georgia's total exports, however, were the same in 2018 as they were in 2014 (22%). The EU asserts that Georgia is \"reaping the benefits of economic integration\" with the EU but notes that \"further efforts are needed to stimulate exports and improve the trade balance.\" ", "Georgia has close relations with NATO, which considers Georgia one of its \"closest operational partners.\" A NATO-Georgia Commission, established in 2008, provides the framework for cooperation. At its 2014 Wales Summit, NATO leaders established a \"Substantial NATO-Georgia Package\" to help Georgia bolster its defense capabilities, including capacity-building, training, exercises, and enhanced interoperability. In 2015, Georgia joined the NATO Response Force, a rapid reaction force. ", "Georgia is one of the top troop contributors (and the top non-NATO contributor) in the NATO-led Resolute Support Mission in Afghanistan. At its height, Georgia's deployment to NATO's previous International Security Assistance Force (ISAF) reached over 1,500 troops, who served with no operational caveats. As of December 2018, Georgia is the fifth-largest contributor to the Resolute Support Mission, with 870 troops. Georgia also contributed more than 2,250 troops to the NATO-led Kosovo Force, or KFOR, between 1999 and 2008. ", "In 2015, NATO opened a Joint Training and Evaluation Center in Georgia to provide training, evaluation, and certification opportunities to enhance interoperability and operational readiness. The center hosted its second joint NATO-Georgia exercise in March 2019 (the first one was held in 2016). Some NATO member states also participate in two sets of annual U.S.-Georgia military exercises: Agile Spirit and Noble Partner (see \" Security Assistance Since the August 2008 War ,\" below). NATO also has established a Defense Institution Building School for professional development and training.", "Many observers consider that closer integration with the EU and NATO has not enabled Georgia to improve its near-term prospects for membership in these organizations. The EU is unlikely to consider Georgia a candidate for membership soon, given the EU's internal challenges and a lack of support for enlargement among many members. In 2008, NATO members agreed that Georgia and Ukraine would become members of NATO, but Georgia has not been granted a NATO Membership Action Plan (MAP) or other clear path to membership. ", "Many observers attribute Georgia's lack of a clear path to NATO membership to some members' concerns that Georgia's membership could lead to a heightened risk of war with Russia, which currently occupies around 18% of Georgia's territory. Many believe that NATO will not move forward with membership as long as Russia occupies Georgian territory and the conflict remains unresolved."], "subsections": []}, {"section_title": "Relations with Russia and Secessionist Regions", "paragraphs": ["Georgia's secessionist regions of Abkhazia and South Ossetia broke away from Georgia in the early 1990s, during and after Georgia's pursuit of independence from the USSR. Since then, Georgia's relations with Russia have been difficult, as Tbilisi has blamed Moscow for obstructing Georgia's Western leanings. Many observers believe that Moscow supports Abkhazia and South Ossetia to prevent Georgia from joining NATO. ", "Georgia's relations with Russia worsened after ex-President Saakashvili came to power in 2003 and sought to accelerate Georgia's integration with the West. After clashes increased between Georgian and secessionist forces, Russia invaded Georgia in August 2008 to prevent Georgia from reestablishing control over South Ossetia. Russia subsequently recognized Abkhazia and South Ossetia as independent states. ", "Over the last decade, Russia has tightened control over Abkhazia and South Ossetia. It has constructed border fencing and imposed transit restrictions across the administrative boundary lines dividing the two regions from the rest of Georgia. Russia has established military bases that reportedly house around 3,500 personnel each, and it also stations border guards in the two regions. In 2016, Russia finalized an agreement with the de facto authorities of Abkhazia, establishing a combined group of military forces. In 2017, Russia concluded an agreement with South Ossetia to integrate the breakaway region's military forces with its own.", "Since coming to power in 2012, the GD government has sought to improve relations with Russia, particularly economic ties. In 2013, Moscow lifted an embargo on popular Georgian exports (including wine and mineral water) that had been in place since 2006. As a result, Russia again became one of Georgia's main trading partners. The share of Georgia's merchandise exports to Russia as a percentage of its total exports rose from 2% in 2012 to 13% in 2018. ", "Improved economic relations with Russia have not led to progress in resolving the conflicts over Abkhazia and South Ossetia. The EU leads an unarmed civilian Monitoring Mission in Georgia (EUMM) that monitors compliance with the cease-fire agreements that ended the August 2008 war. Although the EUMM's mandate covers all of Georgia, local and Russian authorities do not permit it to operate in Abkhazia and South Ossetia; EUMM representatives have been allowed to cross the boundary line on a few occasions to address specific issues.", "All parties to the conflict, together with the United States, the EU, the United Nations (U.N.), and the Organization for Security and Cooperation in Europe (OSCE), participate in the Geneva International Discussions, convened quarterly to address issues related to the conflict. They also participate in joint Incident Prevention and Response Mechanisms (IPRM), together with the U.N. and OSCE, designed to address local security issues and build confidence. Abkhaz and South Ossetian representatives periodically have suspended their participation in the IPRM, however; the IPRM for Abkhazia did not convene at all from 2012 to 2016. ", "In general, efforts to rebuild ties across conflict lines or return internally displaced persons have made little progress. In 2018, the Georgian government unveiled a peace initiative and enacted related legislative amendments to facilitate greater engagement with Abkhazia and South Ossetia in trade and educational affairs. The United States and the EU have expressed support for this initiative. Whether Russia and the two regions will accept any of the initiative's elements remains to be seen.", "Improved relations with Russia do not appear to have led to greater public support in Georgia for closer integration with Russia. Several overtly pro-Russian parties performed poorly in the 2016 parliamentary elections. One electoral bloc critical of Georgia's European integration, the nationalist-conservative Alliance of Patriots, cleared the 5% threshold to enter parliament, but even this bloc's leadership did not campaign for membership in the Russia-led Eurasian Union. In a 2018 survey, less than 30% of respondents expressed support for joining the Eurasian Union. "], "subsections": []}, {"section_title": "U.S.-Georgia Relations", "paragraphs": ["Georgia is one of the United States' closest partners among the post-Soviet states. With a history of strong economic aid and security cooperation, the United States and Georgia have deepened their strategic partnership since Russia's 2008 invasion of Georgia and 2014 invasion of Ukraine. A U.S.-Georgia Charter on Strategic Partnership, signed in 2009, provides the framework for much of the two countries' bilateral engagement. A Strategic Partnership Commission convenes annual plenary sessions and working groups to address political, economic, security, and people-to-people issues. ", "Before the 2008 war, the United States supported granting Georgia a NATO Membership Action Plan and backed NATO's April 2008 pledge that Georgia eventually would become a member of NATO. In August 2017, U.S. Vice President Michael Pence said in Tbilisi that the Trump Administration \"stand[s] by the 2008 NATO Bucharest statement, which made it clear that Georgia will one day become a member of NATO.\" At a press conference after the July 2018 NATO summit in Brussels, President Trump said that \"at a certain point [Georgia will] have a chance\" to join NATO, if \"not right now.\""], "subsections": [{"section_title": "Support for Georgia's Sovereignty and Territorial Integrity", "paragraphs": ["U.S. policy expressly supports Georgia's sovereignty and territorial integrity. In a visit to Tbilisi in August 2017, Vice President Michael Pence said the United States \"strongly condemns Russia's occupation on Georgia's soil.\" In January 2018, the State Department indicated that \"the United States' position on Abkhazia and South Ossetia is unwavering: The United States fully supports Georgia's territorial integrity within its internationally recognized borders.\" ", "The United States supports a resolution to the conflict within these parameters. The United States calls on Russia to comply with the terms of the 2008 cease-fire agreement, including withdrawal of its forces to prewar positions, and to reverse its recognition of Abkhazia and South Ossetia as independent states. The U.S. government has expressed support for Georgia's \"commitment to dialogue and a peaceful resolution to the conflict,\" and in 2018 the State Department welcomed the new peace initiative that the government of Georgia unveiled. The State Department regularly participates in the Geneva International Discussions.", "Congress also has expressed firm support for Georgia's sovereignty and territorial integrity. The Countering Russian Influence in Europe and Eurasia Act of 2017 ( P.L. 115-44 , Title II, \u00a7253) states that the United States \"supports the policy known as the 'Stimson Doctrine' and thus does not recognize territorial changes effected by force, including the illegal invasions and occupations\" of Abkhazia and South Ossetia, and other territories occupied by Russia. ", "As with previous appropriations, FY2019 foreign operations appropriations prohibit foreign assistance to governments that recognize Abkhazia or South Ossetia and restrict funds from supporting Russia's occupation of Abkhazia and South Ossetia ( P.L. 116-6 , \u00a77047(c)). The 2014 Ukraine Freedom Support Act ( P.L. 113-272 ) provides for sanctions against Russian entities that transfer weapons to Georgian territory. ", "In February 2019, the Georgia Support Act ( H.R. 598 ) was reintroduced in the House. The act originally passed the House by unanimous consent in December 2018, during the 115 th Congress. The act would express support for Georgia's sovereignty, independence, and territorial integrity, as well as for its democratic development, Euro-Atlantic and European integration, and peaceful conflict resolution. The act would require the Secretary of State to submit to Congress reports on U.S. security assistance to Georgia, U.S.-Georgia cybersecurity cooperation, and a strategy to enhance Georgia's capabilities to combat Russian disinformation and propaganda. The act also would require the President to impose sanctions on those responsible for serious human rights abuses in Abkhazia and South Ossetia. ", "Many Members of Congress have expressed their support for Georgia in House and Senate resolutions. In September 2016, during the 114 th Congress, the House of Representatives passed H.Res. 660, which expressed support for Georgia's territorial integrity, in a 410-6 vote. The resolution condemned Russia's military intervention and occupation, called upon Russia to withdraw its recognition of Abkhazia and South Ossetia as independent states, and urged the U.S. government to declare unequivocally that the United States will not recognize Russia's de jure or de facto sovereignty over any part of Georgia under any circumstances. ", "In January 2019, a resolution (H.Res. 93) was reintroduced in the House supporting Georgia's territorial integrity and condemning a decision by the Syrian government to recognize Abkhazia and South Ossetia as independent states.", "The Senate and House have passed other resolutions in support of Georgian sovereignty and territorial integrity: in 2011-2012 ( S.Res. 175 , H.Res. 526), in September 2008 ( S.Res. 690 ), and, before the conflict, in May-June 2008 (H.Res. 1166, S.Res. 550 ) and December 2007 ( S.Res. 391 )."], "subsections": []}, {"section_title": "Foreign Aid", "paragraphs": ["Georgia has long been a leading recipient of U.S. foreign and military aid in Europe and Eurasia. In the 1990s (FY1992-FY2000), the U.S. government provided over $860 million in total aid to Georgia ($96 million a year on average). In the later part of the decade, the United States began to provide Georgia with increased amounts of aid to improve border and maritime security and to combat transnational crime, including through the development of Georgia's Coast Guard. ", "In the 2000s, Georgia became the largest per capita recipient of U.S. aid in Europe and Eurasia. From FY2001 to FY2007, total aid to Georgia amounted to over $945 million ($135 million a year, on average). In 2005, Georgia also was awarded an initial five-year (2006-2011) $295 million grant from the U.S. Millennium Challenge Corporation (MCC) for road, pipeline, and municipal infrastructure rehabilitation, as well as for agribusiness development.", "The United States gave increased amounts of military aid to Georgia after the terrorist attacks of September 11, 2001. At the time, the George W. Bush Administration considered Georgia part of a \"second stage\" in the \"war on terror,\" together with Yemen and the Philippines, and supported Georgia with a two-year Train and Equip Program. This program was followed by a Sustainment and Stability Operations Program through 2007 that supported a Georgian troop deployment to Operation Iraqi Freedom. ", "After Russia invaded Georgia in August 2008, the United States substantially increased its assistance to Georgia. The U.S. government immediately provided over $38 million in humanitarian aid and emergency relief, using U.S. aircraft and naval and coast guard ships. In September 2008, then-Secretary of State Condoleezza Rice announced a total aid package worth at least $1 billion. Total U.S. assistance to Georgia for FY2008-FY2009 amounted to $1.04 billion, which included $250 million in direct budgetary support and an additional $100 million in MCC funds (taking the total amount of Georgia's initial MCC grant to $395 million). ", "Since the 2008 war, Georgia has continued to be a major recipient of U.S. foreign aid in the Europe and Eurasia region. Nonmilitary aid totaled $60 million a year on average from FY2010 to FY2017. In addition, Georgia was awarded a second five-year (2014-2019) MCC grant of $140 million to support educational infrastructure and training, and to improve the study of science and technology. ", "In FY2018, U.S. nonmilitary aid to Georgia totaled $70.8 million. For FY2019, Congress appropriated $89.8 million in nonmilitary aid. The president's FY2020 nonmilitary aid request for Georgia is $42.4 million."], "subsections": [{"section_title": "Security Assistance Since the August 2008 War", "paragraphs": ["After the 2008 war, Georgia continued to receive U.S. military assistance, including around $144 million in postwar security and stabilization assistance in FY2008-FY2009. Since FY2010, Georgia has received further military assistance, primarily through Foreign Military Financing (FMF) aid, Coalition Support Funds, and Train and Equip and other capacity-building programs. These funds have been used to support Georgia's deployments to Afghanistan in ISAF and the follow-on Resolute Support Mission, as well as for Georgian border security, counterterrorism, and defense readiness.", "U.S. military assistance to Georgia in FY2010-FY2017 is estimated to have been around $74 million a year on average. For FY2018, military aid to Georgia is estimated to have totaled $40.4 million. This includes $35 million in FMF assistance, $2 million in International Military Education and Training (IMET), and $3.4 million for counter-weapons of mass destruction (WMD) capacity-building assistance. For FY2019, Congress again appropriated $35 million in FMF and $2 million in IMET funds. Additional defense funding includes $4.3 million in maritime capacity-building assistance and $2.5 million in counter-WMD capacity-building assistance. ", "Outside of Afghanistan, the United States has gradually deepened its postwar defense cooperation with Georgia. The Obama Administration refrained from approving defensive (anti-tank and antiaircraft) arms sales to Georgia. Observers considered various reasons for this hesitation, including doubts regarding the deterrent effect of such weapons, concerns about encouraging potential Georgian offensives to retake territory, and a desire to avoid worsening relations with Russia as the Administration embarked on a new \"reset\" policy with Moscow. ", "In testimony to the Senate Foreign Relations Committee a year after Russia's invasion, then-Assistant Secretary of Defense Alexander Vershbow characterized U.S. defense cooperation with Georgia as \"a methodical, yet patient, strategic approach \u2026 [focused] on building defense institutions, assisting defense sector reform, and building the strategic and educational foundations\" for training and reform. He said the United States was \"carefully examining each step [of its military assistance program] to ensure it would not be counterproductive to our goals of promoting peace and stability in the region.\"", "U.S.-Georgia defense cooperation deepened over time. In a 2012 visit to Georgia, then-Secretary of State Hillary Clinton said that increased cooperation would help improve Georgia's self-defense capabilities, promote defense reform and modernization, and provide training and equipment to support Georgia's ISAF deployment and NATO interoperability. ", "U.S.-Georgia security cooperation expanded further in 2016. In July 2016, then-U.S. Secretary of State John Kerry and then-Georgian Prime Minister Giorgi Kvirikashvili signed a Memorandum on Deepening the Defense and Security Relationship between the United States and Georgia. In December 2016, the two countries concluded a three-year framework agreement on security cooperation that would focus on \"improving Georgia's defense capabilities, establishing [an] effective and sustainable system of defense, enhancing interoperability of the Georgian Armed Forces with NATO, and ensuring effective military management.\" ", "The framework agreement led to the launching in February 2017 of a three-year, $35 million training initiative, the Georgia Defense Readiness Program. This initiative seeks to build the capacity of Georgia's armed forces \"to generate, train and sustain forces in preparation for all national missions.\" ", "Unlike the Obama Administration, the Trump Administration approved the provision of major defensive lethal weaponry to Georgia. In November 2017, the U.S. State Department approved a Foreign Military Sale of over 400 Javelin portable anti-tank missiles, as well as launchers, associated equipment, and training, at a total estimated cost of $75 million. The Georgian Ministry of Defense confirmed that the \"first stage\" of two sales was complete as of January 2018. In June 2018, then-U.S. Assistant Secretary of State for European and Eurasian Affairs Wess Mitchell said the United States seeks to \"check Russian aggression,\" including by \"building up the means of self-defense for those states most directly threatened by Russia militarily: Ukraine and Georgia.\"", "The United States and Georgia have held annual joint military exercises in Georgia since 2011. Initial exercises, dubbed Agile Spirit, began as a counterinsurgency and peacekeeping operations training exercise and shifted to a \"conventional warfare focus\" in 2015, the year after Russia's invasion of Ukraine. That year, Agile Spirit began to include other NATO partners. A second bilateral exercise, Noble Partner, was launched in 2015; the Department of Defense characterized it as the \"most robust\" U.S.-Georgia exercise ever, designed to support Georgia's integration into the NATO Response Force. "], "subsections": []}]}, {"section_title": "Trade", "paragraphs": ["In 2018, the United States was Georgia's seventh-largest source of merchandise imports and eighth-largest destination for exports. The value of Georgia's merchandise imports from the United States\u2014mainly vehicles, industrial machinery, and meat\u2014was $360 million in 2018. The value of merchandise exports to the United States\u2014mainly iron and steel and inorganic chemicals\u2014was $160 million in 2018. ", "Since 2012, the United States and Georgia periodically have discussed the possibility of a free-trade agreement. The two countries have signed a bilateral investment treaty and a Trade and Investment Framework Agreement. They also have established a High-Level Dialogue on Trade and Investment. During Vice President Michael Pence's August 2017 visit to Georgia, he expressed the United States' \"keen interest in expanding our trade and investment relationship with Georgia.\""], "subsections": []}]}]}}
{"id": "RS22015", "title": "Availability of Legislative Measures in the House of Representatives (The \u201c72-Hour Rule\u201d)", "released_date": "2019-05-07T00:00:00", "summary": ["House rules govern the length of time legislative measures must be available to Members before being considered on the floor. For measures reported from committee, a draft of the committee report must have been available for 72 hours. Conference reports must also have been available for 72 hours and special rules for considering measures for one legislative day. Bills and joint resolutions that have not been reported by committee, and therefore are not accompanied by a written report, may also not be considered on the House floor unless the measure has been available for 72 hours. Proposed committee reports, unreported bills and joint resolutions, conference reports, and joint explanatory statements are considered available under these rules if they are publicly available in electronic form on a website designated by the Committee on House Administration for this purpose, http://docs.house.gov.", "The House has several means by which it can choose to waive these availability requirements and call up, debate, and vote on a measure in a single calendar day even if the text of the measure was not made available prior to consideration. These include (1) considering a measure under the suspension of the rules procedure or by unanimous consent, (2) adopting a special rule that waives the 72-hour requirement, (3) adopting a special rule that waives the one-day requirement for another special rule, and (4) convening a second legislative day on the same calendar day. Waiving availability requirements allows the House to act quickly when necessary, such as near the end of a session."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Availability Requirements in House Rules", "paragraphs": ["The rules of the House of Representatives generally grant Members an opportunity to review legislative measures by governing the length of time the measures must be made available before being considered on the floor. Different House rules establish availability requirements for reported bills and resolutions, unreported bills and joint resolutions, conference committee reports, and special rules (resolutions reported by the Rules Committee intended to regulate floor consideration of a measure named in the resolution). ", "Under House rules, draft committee reports and unreported bills and joint resolutions are considered available under these rules if they are \"publicly available in electronic form at a location designated by the Committee on House Administration.\" Conference committee reports and accompanying joint explanatory statements are also considered available if they are in electronic form at such a location. It is not a requirement under the rule that the measures be available in the designated location. Instead, the House rule is meant to provide an additional means through which Members, congressional staff, and the general public can access these documents."], "subsections": [{"section_title": "Reported Bills and Resolutions (Rule XIII, Clause 4(a))", "paragraphs": ["Measures and other matters reported by committees may not be considered on the House floor until a draft of the committee report on the matter has been available for at least 72 hours. Specifically, the \"proposed text\" of the committee report\u2014except for any supplemental, minority, additional, or dissenting views\u2014must be made available. Under House Rule XI, clause 2(l), committee members are guaranteed two calendar days to submit supplemental or other views for inclusion in a committee report\u2014if notice of intent to file supplement views was given at the markup. However, the committee majority, before receiving such views, can make a draft of the committee report available and start the 72-hour clock. ", "The House rule exempts several kinds of measures specified in the rule, including resolutions reported by the Rules Committee. "], "subsections": []}, {"section_title": "Unreported Bills and Joint Resolutions (Rule XXI, Clause 11)", "paragraphs": ["Bills and joint resolutions that have not been reported by committee, and therefore are not accompanied by a written report, may also not be considered on the House floor unless the measure has been available for at least 72 hours. If a measure has not been reported by a committee, it is generally not eligible for floor consideration unless it is called up under a procedure that waives the requirement that it be reported. Such procedures are discussed below in the section on waiving the availability requirements."], "subsections": []}, {"section_title": "Conference Reports (Rule XXII, Clause 8(a))", "paragraphs": ["The House rule requires that before a conference report can be considered, its text and its accompanying joint explanatory statement must be available in the Congressional Record for 72 hours. Alternatively, the conference report can be considered if it has been made publicly available in electronic form at a location designated by the Committee on House Administration (currently http://docs.house.gov/ ) . In addition, copies of a conference report and the joint explanatory statement must be available for at least two hours prior to its consideration. ", "According to the rule, this 72-hour availability requirement does not apply during the last six days of a session. In contemporary practice, however, it is difficult to implement this exception to the rule. Adjournment resolutions are usually not approved until very shortly before the adjournment takes place. This practice usually makes it impossible to know when the \"last six days\" of a session begin. Absent a resolution setting a future date for adjournment, the 72-hour rule applies even as the House nears the end of a session. The 72-hour availability requirement for conference reports would cease to apply only in the last six calendar days before the constitutional end of a session on January 3. Near the end of a session, however, the House sometimes agrees to special rules reported by the Rules Committee that waive the availability requirement. This is discussed below in the section on waiving availability requirements."], "subsections": []}, {"section_title": "Special Rules (Rule XIII, Clause 6(a))", "paragraphs": ["The House frequently operates under special rules, or resolutions reported from the Rules Committee, which can waive any or all of the above rules . Special rules are required to lie over for one legislative day, which means the special rule cannot be reported and considered on the same legislative day. A legislative day is not necessarily a calendar day. A legislative day begins the first time the House meets after an adjournment and ends when the House adjourns again. Because the House typically adjourns at the end of a calendar day, legislative and calendar days usually coincide.", "Rule XIII also provides several exceptions to the layover requirement for special rules. First, a special rule may be considered the same day it is presented if it proposes only to waive the rules mandating that committee reports and conference reports be available for 72 hours. If the rule also sets the terms for the consideration of the matter, perhaps by waiving points of order, then the rule is required to lie over for one legislative day.", "Second, a special rule may be considered the same day it is presented to the House in the last three days of a session. In modern practice, as mentioned above, the House rarely agrees to an adjournment date far in advance, usually making it impossible to know when \"the last three days\" begin.", "Third, the one-day layover requirement for special rules can be waived if two-thirds of the Members voting agree to the waiver (a quorum being present). In addition, as discussed below, the Rules Committee may report a special rule that waives the one-day layover requirement for subsequent special rules."], "subsections": []}]}, {"section_title": "Waiving the Availability Requirements in the Rules", "paragraphs": ["The House has several means for waiving its rules when it wishes to act expeditiously. For example, the House may set aside any of its availability requirements by unanimous consent. It may also call up and agree to a bill or conference report that has not met the availability requirements by a two-thirds vote to suspend the rules. As previously mentioned, according to Rule XIII, clause 6(a)(1), the one-day layover requirement for a special rule can be waived by two-thirds of the Members voting.", "The House can also waive the availability requirements by a simple majority. If a majority of the House desires to do so, the House can vote on a measure the same calendar day that the text was made available to Members. The House usually does this by agreeing to two special rules, as explained below. It may also achieve the same result by convening for two legislative days on the same calendar day in the manner also described below."], "subsections": [{"section_title": "Waiving Availability Requirements by Special Rule", "paragraphs": ["The Rules Committee may report a special rule that waives the 72-hour availability requirement for bills, resolutions, or conference reports. A rule only waiving the availability requirement can be presented and called up on the same day. Special rules, however, often set the terms for considering a measure as well. A special rule for the consideration of a measure might waive the 72-hour availability requirement but also structure the amending process. Such a rule would be required to lie over for one legislative day (unless this requirement was waived by a two-thirds vote). Similarly, a rule for the consideration of a conference report often waives points of order against the conference report and against its consideration. Under current House rules, that special rule is also required to lie over for one legislative day unless the requirement is waived by a two-thirds vote. In short, special rules only waiving the 72-hour availability requirement are not required to lie over for one legislative day.", "To waive the one-day layover requirement of Rule XIII, clause 6(a), for a special rule, the Rules Committee may report a special rule that waives this requirement. The rule providing this waiver is subject to the same one-day layover requirement. If such a special rule is adopted, the House can then consider and adopt a special rule providing for the consideration of a measure later on the same legislative day. The special rule for the consideration of the measure can waive the 72-hour availability requirement for the measure. In this way, the House of Representatives, by majority vote, has the potential to call up, debate, and pass a measure in a single day even if the measure has not been made available prior to consideration. In order to achieve this result, however, the Rules Committee must have reported the additional special rule on the previous legislative day.", "In summary, a simple majority of the House can call up, debate, and vote on a measure in a single calendar day, regardless of how long the text has been available, by taking the following steps:", "First, the House agrees to a special rule waiving the one-day layover requirement for any special rule for the consideration of a specified matter. (This rule is required to lie over for one legislative day.) Second, the House agrees to a separate special rule setting the terms of consideration of the measure and waiving any availability requirements for the measure itself. (This rule need not lie over for one legislative day. The first special rule waived the one-day layover requirement for this special rule.) Third, the House calls up, debates, and votes on the measure."], "subsections": []}, {"section_title": "Creating or Extending a Legislative Day", "paragraphs": ["Although the House rarely chooses to do so, it could agree to call up and consider a measure in a single calendar day by convening two legislative days in a single calendar day. It would do this by agreeing to a motion to adjourn for a brief period at some point during its session. Agreement to this motion would terminate the legislative day, and when the House returned from its brief adjournment pursuant to this motion, a new legislative day would begin.", "If the Rules Committee presents a special rule before the House adjourns, the rule can be considered on the next legislative day regardless of how much time has elapsed. In other words, if a special rule were reported, and the House adjourned and then shortly thereafter reconvened, the special rule would have been available for one legislative day, meeting the layover requirement of the standing rule. The House could then consider the special rule that, among other things, could waive the 72-hour availability requirement for a resolution, bill, or conference report.", "From time to time, the House has also been known to recess after legislative business, but not adjourn, in order to give the Rules Committee time to complete and report a special rule. The rule could be reported very late or even early in the morning of the next calendar day. Regardless of whether or not it is the next calendar day when the rule is reported, if the House adjourns after it is reported, when it reconvenes it will be a new legislative day, and the layover requirement will be considered met."], "subsections": []}, {"section_title": "Special Rules Near the End of a Session", "paragraphs": ["In the contemporary House, it is not uncommon for the Rules Committee to report several special rules at the end of a session that waive the availability requirements for subsequent special rules for the consideration of certain specified measures. In the past, the House has also agreed to resolutions reported by the Rules Committee near the end of a session that waived availability requirements in general.", "Special rules that waive availability requirements are sometimes referred to as \"same day rules.\" They are also sometimes referred to, particularly by their opponents, as \"martial law\" rules. The term has been used by Members of the House for at least 15 years, but it has not been applied consistently to any one type of special rule. It has been used, for example, to describe both special rules that waive the one-day layover requirement for subsequent special rules and to describe broad special rules that trigger some provisions of House rules and waive others for the remaining duration of a session.", "Supporters of end-of-session resolutions that waive availability requirements sometimes argue that these special rules are meant to achieve the same end as the standing rules that make certain provisions of House rules inapplicable during the final days of the session. As mentioned above, the 72-hour availability requirement for conference reports does not apply in the last six days of a session. The one-day layover requirement for special rules does not apply in the last three days of a session. In recent years, Congress has not agreed to a concurrent resolution setting an adjournment date until just before adjournment takes place. As a result, these standing rules are not triggered in the contemporary House. By agreeing to a same-day rule near the end of the session, the House can achieve the same end as the existing, but technically inapplicable, standing rules that waive availability requirements at the end of a session. Opponents of these end-of-session resolutions sometimes argue that all Representatives should be guaranteed some time to examine legislative proposals regardless of when they are presented during the course of a session."], "subsections": []}]}]}}
{"id": "R43997", "title": "Deferred Maintenance of Federal Land Management Agencies: FY2009-FY2018 Estimates and Issues", "released_date": "2019-04-30T00:00:00", "summary": ["Each of the four major federal land management agencies maintains tens of thousands of diverse assets, including roads, bridges, buildings, and water management structures. These agencies are the Bureau of Land Management (BLM), Fish and Wildlife Service (FWS), National Park Service (NPS), and Forest Service (FS). Congress and the Administration continue to focus on the agencies' deferred maintenance and repair of these assets\u2014in essence, the cost of any maintenance or repair that was not done when it should have been or was scheduled to be done. Deferred maintenance and repair is often called the maintenance backlog.", "In FY2018, the most recent year for which these estimates are available, the four agencies had combined deferred maintenance estimated at $19.38 billion. This figure includes $11.92 billion (62%) in deferred maintenance for NPS, $5.20 billion (27%) for FS, $1.30 billion (7%) for FWS, and $0.96 billion (5%) for BLM. The estimates reflect project costs.", "Over the past decade (FY2009-FY2018), the total deferred maintenance for the four agencies fluctuated, peaking in FY2012 and ending the decade relatively flat in current dollars. It increased overall by $0.36 billion, from $19.02 billion to $19.38 billion, or 2%. Both the BLM and NPS estimates increased, whereas the FWS and FS estimates decreased. By contrast, in constant dollars, the total deferred maintenance estimate for the four agencies decreased from FY2009 to FY2018 by $3.61 billion, from $22.99 billion to $19.38 billion, or 16%. The BLM estimate increased, whereas estimates for the other three agencies decreased.", "In each fiscal year, NPS had the largest portion of the total deferred maintenance, considerably more than any of the other three agencies. FS consistently had the second-largest share, followed by FWS and then BLM. Throughout the past decade, the asset class that included roads comprised the largest portion of the four-agency combined deferred maintenance.", "Congressional debate has focused on varied issues, including the level and sources of funds needed to reduce deferred maintenance, whether agencies are using existing funding efficiently, how to balance the maintenance of existing infrastructure with the acquisition of new assets, whether disposal of assets is desirable given limited funding, and the priority of maintaining infrastructure relative to other government functions.", "Some question why deferred maintenance estimates have fluctuated over time. These fluctuations are likely the result of many factors, among them the following:", "Agencies have refined methods of defining and quantifying the maintenance needs of their assets. Levels of funding for maintenance, including funding to address the maintenance backlog, vary from year to year. Economic conditions, including costs of services and products, also fluctuate. The asset portfolios of the agencies change, with acquisitions and disposals affecting the number, type, size, age, and location of agency assets.", "The extent to which these and other factors affected changes in each agency's maintenance backlog over the past decade is not entirely clear. In some cases, comprehensive information is not readily available or has not been examined."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Each of the four major federal land management agencies has maintenance responsibility for tens of thousands of diverse assets in dispersed locations. These agencies are the Bureau of Land Management (BLM), Fish and Wildlife Service (FWS), and National Park Service (NPS), all within the Department of the Interior (DOI), and the Forest Service (FS) within the Department of Agriculture. These agencies maintain assets to preserve their functioning and to repair and replace components as needed. ", "The infrastructure needs of the federal land management agencies have been a subject of significant federal and public attention for many years. Congressional and administrative attention has focused on deferred maintenance and repairs , defined as \"maintenance and repairs that were not performed when they should have been or were scheduled to be and which are put off or delayed for a future period.\" \"Maintenance and repair\" include a variety of activities intended to preserve assets in an acceptable condition, including activities such as preventive maintenance and replacement of parts, systems, and components. These terms do not include activities intended to expand the capacity of assets to allow them to serve different purposes or significantly increased needs.", "Deferred maintenance and repairs often are called the maintenance backlog . The agencies assert that continuing to defer the maintenance and repair of facilities accelerates the rate of these facilities' deterioration, increases their repair costs, and decreases their value. Debate has focused on varied issues, including the level of funds needed to reduce deferred maintenance, whether agencies are using existing funding efficiently, the priority of deferred maintenance relative to regular maintenance, and whether additional sources of funds should be directed to maintenance. Other issues include how to balance the maintenance of existing infrastructure with the acquisition of new assets, whether disposal of assets is desirable given limited funding, and how much to prioritize maintaining infrastructure relative to other government functions.", "Another issue relates to the dollar amount of deferred maintenance and the reasons for fluctuations over time. This report focuses on these issues. It first provides agency deferred maintenance estimates for FY2018, the most recent fiscal year for which this information is available. It also discusses changes in deferred maintenance over the past decade (FY2009-FY2018) and then identifies some of the factors that likely contributed to these changes."], "subsections": []}, {"section_title": "Estimates", "paragraphs": ["The agencies typically identify deferred maintenance through periodic condition assessments of facilities. FS currently reports an annual deferred maintenance dollar total composed of estimates for 10 classes of assets. These classes include roads, buildings, trails, bridges, and water systems, among others. DOI currently reports annual deferred maintenance composed of estimates for four broad categories of assets: (1) roads, bridges, and trails; (2) irrigation, dams, and other water structures; (3) buildings; and (4) other structures. The \"other structures\" category includes a variety of assets (e.g., recreation sites and hatcheries). ", "For each of the 10 years covered by this report, FS has reported the amount of deferred maintenance as a single figure. DOI agencies began reporting deferred maintenance as a single figure in FY2015. In prior years, DOI agencies reported estimates as a range. For FY2014, for instance, the range had an \"accuracy level of minus 15 percent to plus 25 percent of initial estimate.\" According to DOI, a range had been used because \"due to the scope, nature, and variety of the assets entrusted to DOI, as well as the nature of deferred maintenance itself, exact estimates are very difficult to determine.\" ", "FS estimates of deferred maintenance included in this report generally are taken from the agency's annual budget justifications to Congress. The DOI Budget Office provided the Congressional Research Service (CRS) with a deferred maintenance range for each DOI agency for each fiscal year from FY2009 to FY2014. From these ranges, CRS calculated mid-range figures. For instance, DOI estimated NPS deferred maintenance for FY2014 at between $9.31 billion and $13.70 billion. The CRS-calculated mid-range figure is $11.50 billion. This report reflects CRS's mid-range calculations for FY2009-FY2014 to facilitate comparison with FS estimates. Since FY2015, the DOI Budget Office has provided CRS with a single estimate for each DOI agency, and those figures are used in this report. They represent deferred maintenance as of the end of the fiscal year (i.e., September 30). For both FS and DOI agencies, the deferred maintenance estimates generally reflect project costs. Finally, totals shown in the body and in tables of this report may not add to 100% due to rounding. "], "subsections": [{"section_title": "FY2018", "paragraphs": ["The four agencies had combined FY2018 deferred maintenance estimated at $19.38 billion. The agencies had widely varying shares of the total. NPS had the largest portion, 62%, based on an estimate of $11.92 billion. The FS share was 27% of the total, with an estimated deferred maintenance of $5.20 billion. The FWS portion was 7%, reflecting the agency's deferred maintenance of $1.30 billion. BLM had the smallest share, 5%, based on a backlog estimate of $0.96 billion. ", "Each agency's deferred maintenance estimate for FY2018 consisted of various components. For FS, the single largest asset class was roads, which comprised 61% of the FY2018 total of $5.20 billion. The next largest asset class was buildings, which represented 24% of the FS FY2018 total. The next two largest asset classes were trails and bridges, each with 5%. Six other asset classes made up the remaining 6%. ", "For NPS, the largest asset category was roads, bridges, and trails, which comprised 57% of the FY2018 deferred maintenance total of $11.92 billion. The buildings category comprised 19% of the total, followed by 18% for other structures and 6% for irrigation, dams, and other water structures. ", "Roads, bridges, and trails also reflected the largest share of BLM's FY2018 deferred maintenance, with 69% of the $0.96 billion total. Two other categories of assets had relatively comparable portions, specifically 14% for buildings and 12% for other structures. The remaining 6% was for irrigation, dams, and other water structures. ", "Roads, bridges, and trails made up the smallest portion of FWS's FY2018 deferred maintenance ($1.30 billion), unlike for the other agencies. Moreover, the four asset categories had roughly comparable portions, as follows: 27% for buildings; 27% for other structures; 24% for irrigation, dams, and other water structures; and 22% for roads, bridges, and trails."], "subsections": []}, {"section_title": "Overview of Decade (FY2009-FY2018)", "paragraphs": [], "subsections": [{"section_title": "Changes in Estimates in Current and Constant Dollars", "paragraphs": ["As shown in Table 1 and Figure 1 , in current dollars, the total deferred maintenance estimate for the four agencies showed considerable variation over the 10-year period from FY2009-FY2018, with a peak in FY2012. It ended the decade relatively flat, with an increase of $0.36 billion overall, from $19.02 billion to $19.38 billion, or 2%. Both the BLM and NPS estimates increased, by $0.42 billion (80%) and $1.75 billion (17%), respectively. By contrast, both the FWS and FS estimates decreased, by $1.71 billion (57%) and $0.11 billion (2%), respectively. ", "Within these overall changes, there was considerable variation among agency trends. The NPS estimate increased fairly steadily for several years, fell in FY2016, then rose again. The FS estimate was similar at the beginning and end of the decade, although it fluctuated between $5.10 billion and $6.03 billion throughout the 10-year period. The BLM estimate also fluctuated, falling in the first few years of the decade, then rising, leveling off, and rising again to a new high at the end of the decade. The FWS estimate had a generally steady decline during the first several years, leveled off somewhat after FY2015, and reached a decade low in FY2018. Figure 1 depicts the annual changes in current dollars for each agency and for the four agencies combined. Factors that might have contributed to the changes are discussed in the \" Issues in Analyzing Deferred Maintenance \" section, below. ", "By contrast, as shown in Table 2 and Figure 2 , in constant dollars, the total deferred maintenance estimate for the four agencies decreased over the course of the ten-year period by $3.61 billion, from $22.99 billion to $19.38 billion, or 16%. Three agencies had overall decreases: $0.37 billion (3%) for NPS, $1.22 billion (19%) for FS, and $2.34 billion (64%) for FWS. However, the BLM estimate increased by $0.32 billion (50%) over the 10-year period. ", "As was the case for current-dollar estimates, the overall changes in constant dollars reflected various fluctuations. The BLM estimate fell and rose during the period, with the lowest estimate in FY2011 and the highest at the end (FY2018). The FWS estimate exceeded $3 billion for each of the first four years before dropping steeply over the next six years to roughly one-third of the FY2009 level. The NPS estimate peaked in FY2010, then mainly declined, until increasing in FY2018. The FS estimate exceeded $6 billion for the first half of the 10-year period. It ranged roughly between $5 billion and $6 billion during the second half of the period, reaching a low of $5.20 billion in both FY2017 and FY2018. Figure 2 depicts the annual changes in constant dollars for each agency and for the four agencies combined. "], "subsections": []}, {"section_title": "Agency Shares of Deferred Maintenance in Current and Constant Dollars", "paragraphs": ["Throughout the decade, agency shares of the deferred maintenance totals differed, as shown in Figure 3 and Figure 4 . In both current and constant dollars, in each fiscal year NPS had the largest portion of total deferred maintenance and considerably more than any other agency. FS consistently had the second-largest share, followed by FWS and then BLM. Moreover, in both current and constant dollars, each agency's portion of the total annual deferred maintenance changed over the decade. Specifically, the NPS portion of the annual total grew overall throughout the period, from 53% in FY2009 to 62% in FY2018. By contrast, the FS share of the total decreased over the 10-year period from 28% to 27%. The FWS component also declined, from 16% to 7%, whereas the BLM portion rose from 3% to 5%. ", "The asset class or category that included roads typically comprised the largest portion of each agency's deferred maintenance. Roads represented the largest portion of FS deferred maintenance from FY2009 to FY2018. Over the 10-year period, the NPS roads, bridges, and trails category had the highest share of the agency's deferred maintenance, and irrigation, dams, and other water structures had the smallest. In some years, the portion of NPS deferred maintenance for the \"other structures\" category exceeded the buildings portion, but in some years the reverse was the case. Roads, bridges, and trails also was the biggest category of BLM's deferred maintenance from FY2009 to FY2018. Although this category typically represented a majority of the FWS total deferred maintenance in the earlier part of the period, this has not been the case since FY2013. A decline in the dollar estimate for roads, bridges, and trails resulted in a sizeable drop in overall FWS deferred maintenance beginning in FY2013, as discussed below."], "subsections": []}]}]}, {"section_title": "Issues in Analyzing Deferred Maintenance", "paragraphs": ["Fluctuations in deferred maintenance estimates are likely the result of many factors, among them estimation methods, levels of funding, and asset portfolios, as discussed below. The extent to which these and other factors affected year-to-year changes in any one agency's maintenance backlog is unclear, in part because comprehensive information is not readily available in all cases or has not been examined. Therefore, the data in this report may not fully explain the changes in deferred maintenance estimates over time."], "subsections": [{"section_title": "Methodology", "paragraphs": ["Methods for assessing the condition of assets and estimating deferred maintenance have changed over the years. As a result, it is unclear what portion of the change in deferred maintenance estimates is due to the addition of maintenance work that was not done on time and what portion may be due to changes in methods of assessing and estimating deferred maintenance. With regard to facility assessment, agencies have enhanced efforts to define and quantify the maintenance needs of their assets. Efforts have included collecting comprehensive information on the condition of facilities and maintenance and improvement needs. For instance, the first cycle of comprehensive condition assessments of NPS industry-standard facilities was completed at the end of FY2006. However, through at least FY2018, NPS continued to develop business practices to estimate the maintenance needs of nonindustry-standard assets. This category presents particular challenges because it includes unique asset types. ", "Alterations in methodology have contributed to changes in deferred maintenance estimates, as shown in the following examples for roads. The FY2015 FWS budget justification states that ", "[i]n 2012, Service leadership concluded that condition assessment practices and policies in place at that time were unintentionally producing higher than appropriate [deferred maintenance (DM)] cost estimates for some types of constructed real property. DM estimates for our extensive inventory of gravel and native surface roads are a major contributor to this challenge. In response, the FWS is refining its practices and procedures to improve consistency of DM cost estimates and their use in budget planning. Significant reductions in the DM backlog are resulting from this effort. ", "Subsequent FWS budget justifications have elaborated on changes to methods of estimating deferred maintenance for roads. For instance, the FY2017 document states that \"deferred maintenance estimates for our extensive inventory of roads were further classified to emphasize public use and traffic volume. As a result, minimally used administrative roads are now generally excluded from contributing to deferred maintenance backlog calculations.\" Of note is that the roads, bridges, and trails category of FWS deferred maintenance declined substantially (by $1.18 billion, 81%) in the past several years in current dollars, from $1.46 billion in FY2012 to $0.28 billion in FY2018. This decline is reflected in the smaller FWS deferred maintenance total for FY2018 ($1.30 billion). The FWS change in the method of estimating deferred maintenance for roads, bridges, and trails appears to be a primary reason for the decreased estimate for this category and total FWS deferred maintenance over the 10-year period. ", "Similarly, FS attributes variations in deferred maintenance partly to changes in the methodology for estimating roads. For example, in FY2013 and FY2014, FS adjusted the survey methodology for passenger-car roads, with the goal of providing more accurate estimates of the roads backlog. The FS estimate of deferred maintenance for roads fell in current dollars by $0.84 billion (22%) from FY2012 to FY2014, from $3.76 billion to $2.92 billion. The extent to which the drop is attributable to changes in methodology, including regarding the types of roads reflected in the estimates, is not certain. ", "Finally, in FY2014, the NPS first reflected deferred maintenance for unpaved roads as part of its total deferred maintenance estimate (in agency financial reports). The agency's total deferred maintenance increased in current dollars by $0.26 billion (4%) from FY2013 to FY2014, from $6.57 billion to $6.83 billion. DOI cited the inclusion of unpaved roads as among the reasons for changes in NPS deferred maintenance estimates, although the extent of the effect on NPS estimates is unclear. ", "Broader changes in methodology also occurred during the decade. For example, DOI agencies had been using an accuracy range of -15% to +25% to derive the estimated range of deferred maintenance for industry-standard assets. The change to a single estimate beginning in FY2015 would have affected DOI deferred maintenance estimates as reflected in this report."], "subsections": []}, {"section_title": "Funding", "paragraphs": ["How much total funding is provided each year for deferred maintenance for the four agencies is unclear because annual presidential budget requests, appropriations laws, and supporting documents typically do not aggregate funds for deferred maintenance. Portions of deferred maintenance funding (for one or more of the four agencies) have come from agency maintenance and construction accounts, recreation fees, the Highway Trust Fund (Department of Transportation) for roads, the Timber Sale Pipeline Restoration Fund (for FS and BLM), NPS concession fees, and the NPS Centennial Challenge account, among other accounts. ", "In addition, funding figures are not directly comparable to deferred maintenance estimates because the estimates are limited to project costs and thus do not reflect indirect costs, such as salaries and benefits for government employees. Annual appropriations figures typically reflect indirect costs. Evaluations of the sufficiency of federal funding for deferred maintenance may be hindered by the lack of total funding figures and by the incomparability of appropriations and deferred maintenance estimates. ", "Deferred maintenance estimates might vary due to economic conditions that are not related to agency efforts or within the control of facility managers. For example, if deferred maintenance estimates reflect costs of needed materials, fuel, supplies, and labor, then the cost of deferred maintenance might change as the costs of these products and services change. Further, DOI has noted that NPS deferred maintenance estimates could fluctuate with market trends and inflation. ", "Moreover, consistent and comprehensive information on the effect of federal funding on the condition of facilities and deferred maintenance over the decade does not appear to be available in budget documents. In particular, information based on the facilities condition index (FCI) seems to be incomplete or inconsistent in agency budget justifications. In some cases, budget justifications either do not provide FCI figures for assets or provide figures only for certain years. In other cases, it is not clear whether the FCI figures cover all agency assets or a subset of the assets. Together, the budget justifications present a mix of FCI information using quantitative measurements; percentage measurements; and qualitative statements, such as that a certain number or percentage of structures are in \"good\" condition, but without corresponding FCI figures. ", "Although amounts and impacts of deferred maintenance funding may not be readily available, the agencies at times have asserted a need for increased appropriations to reduce their backlogs. As a recent example, the Interior Budget in Brief for FY2020 sets out a proposal for the establishment of a \"Public Lands Infrastructure Fund,\" with revenues from energy development on federal lands, to be used for deferred maintenance needs of the four agencies (as well as the Bureau of Indian Education). As a second example, a 2017 audit report asserted that reducing the FS maintenance backlog \"will require devoting the necessary resources over an extended period of time,\" and that \"increasing wildfire management costs have left the agency without extra funding to concentrate on reducing deferred maintenance.\" Moreover, in the past, agencies sometimes attributed reductions in deferred maintenance (or slower rates of increase) in part to additional appropriations, such as those provided in the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5 ). The FY2016 FWS budget justification notes the ARRA funding as one factor contributing to a reduction in the backlog from the FY2010 high, for instance. ", "Some observers and stakeholders have identified ways to potentially address deferred maintenance without solely relying on federal funding. For instance, a 2016 report by the Government Accountability Office (GAO) on NPS deferred maintenance listed various actions that NPS is taking at some park units. They include using donations, volunteers, and partnerships to assist with maintenance; leasing assets to nonfederal parties in exchange for rehabilitation or maintenance; and partnering with states in seeking transportation grants. As another example, a 2016 report by a research institute set out options including outsourcing certain agency operations to the private sector, establishing a franchising system for new park units, and disposal of assets."], "subsections": []}, {"section_title": "Assets", "paragraphs": ["The asset portfolios of the four agencies vary considerably in terms of number, type, size, age, and location of agency assets. Although comprehensive data on these variables over the past decade are not readily available, it is likely that they affect agency maintenance responsibilities and maintenance backlogs. For instance, NPS has more assets than the other DOI agencies, a sizeable portion of which were constructed before 1900 or in the first half of the 20 th century. The 2016 GAO report assessed various characteristics of the NPS maintenance backlog, including the age of park units. The agency determined that of the total FY2015 NPS deferred maintenance, park units established over 100 years ago had the largest share (32%). Further, park units established more than 40 years ago collectively accounted for 88% of all NPS deferred maintenance. Moreover, some NPS assets are in urban areas or are iconic structures, which could affect maintenance costs.", "The effect of changes in agency asset portfolios on deferred maintenance is not entirely clear. However, it could be asserted that the acquisition of assets, such as a sizeable number of large or iconic assets in relatively poor condition, would increase regular maintenance needs and the backlog, if maintenance is not performed when scheduled. For instance, the NPS asserted that \"when parks are created or when new land is acquired, the properties sometimes come with facilities that are in unacceptable condition or are unstable for the park or partner organizations.... When facilities are excess to the park ... they also contribute to the deferred maintenance backlog.\" Similarly, it could be argued that disposal of assets, such as a large quantity of old assets in poor condition, could reduce deferred maintenance. For example, a 2017 audit of the FS recommended that the agency \"establish goals and milestones to aggressively reduce the number of unused or underused assets in the agency's portfolio\" as one way to reduce maintenance backlogs given limited resources.", "Agencies examine whether to retain assets in their current condition or dispose of some assets, as the following examples indicate. FS has sought to reduce its maintenance backlog by conveying unneeded or underused administrative sites, as well as decommissioning roads, road and facility infrastructure , and nonpriority recreation sites. FWS has attributed reductions in deferred maintenance in part to \"disposing of unneeded assets.\" NPS identifies assets that are not critical to the agency's mission and that are in relatively poor condition for potential disposal. In the past, the agency has noted that although the agency seeks to improve the condition of its asset portfolio by disposing of assets, \"analysis of removal costs versus annual costs often precludes the removal option.\" "], "subsections": []}]}]}}
{"id": "95-563", "title": "The Legislative Process on the House Floor: An Introduction", "released_date": "2019-05-20T00:00:00", "summary": ["The daily order of business on the floor of the House of Representatives is governed by standing rules that make certain matters and actions privileged for consideration. On a day-to-day basis, however, the House can also decide to grant individual bills privileged access to the floor, using one of several parliamentary mechanisms.", "The standing rules of the House include several different parliamentary mechanisms that the body may use to act on bills and resolutions. Which of these will be employed in a given instance usually depends on the extent to which Members want to debate and amend the legislation. In general, all of the procedures of the House permit a majority of Members to work their will without excessive delay.", "The House considers most legislation by motions to suspend the rules, with limited debate and no floor amendments, with the support of at least two-thirds of the Members voting. Occasionally, the House will choose to consider a measure on the floor by the unanimous consent of Members. The Rules Committee is instrumental in recommending procedures for considering major bills and may propose restrictions on the floor amendments that Members can offer or bar them altogether. Many major bills are first considered in Committee of the Whole before being passed by a simple majority vote of the House. The Committee of the Whole is governed by more flexible procedures than the basic rules of the House, under which a majority can vote to pass a bill after only one hour of debate and with no floor amendments.", "Although a quorum is supposed to be present on the floor when the House is conducting business, the House assumes a quorum is present unless a quorum call or electronically recorded vote demonstrates that it is not. However, the standing rules preclude quorum calls at most times other than when the House is voting. Questions are first decided by voice vote, although any Member may then demand a division vote. Before the final result of a voice or division vote is announced, Members can secure an electronically recorded vote instead if enough Members desire it or if a quorum is not present in the House.", "The constitutional requirements for making law mean that each chamber must pass the same measure with the identical text before transmitting it to the President for his consideration. When the second chamber of Congress amends a measure sent to it by the first chamber, the two chambers must resolve legislative differences to meet this requirement. This can be accomplished by shuttling the bill back and forth between the House and Senate, with each chamber proposing amendments to the position of the other, or by establishing a conference committee to try to negotiate a compromise version of the legislation."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["A complicated body of rules, precedents, and practices governs the legislative process on the floor of the House of Representatives. The official manual of House rules is more than 1,000 pages long and is supplemented by 30 volumes of precedents, with more volumes to be published in coming years. Yet there are two reasons why gaining a fundamental understanding of the House's legislative procedures is not as difficult as the sheer number and size of these documents might suggest.", "First, the ways in which the House applies its rules are largely predictable, at least in comparison with the Senate. Some rules are certainly more complex and more difficult to interpret than others, but the House tends to follow similar procedures under similar circumstances. Even the ways in which the House frequently waives, supplants, or supplements its standing rules with special, temporary procedures generally fall into a limited number of recognizable patterns.", "Second, underlying most of the rules that Representatives may invoke and the procedures the House may follow is a fundamentally important premise\u2014that a majority of Members should ultimately be able to work their will on the floor. Although House rules generally recognize the importance of permitting any minority\u2014partisan or bipartisan\u2014to present its views and sometimes propose its alternatives, the rules do not enable that minority to filibuster or use other parliamentary devices to prevent the majority from prevailing without undue delay. This principle provides an underlying coherence to the various specific procedures discussed in this report."], "subsections": []}, {"section_title": "The Nature of the Rules", "paragraphs": ["Article I of the Constitution imposes a few restrictions on House (and Senate) procedures\u2014for example, requirements affecting quorums and roll-call votes\u2014but otherwise the Constitution authorizes each house of Congress to determine for itself the \"Rules of its Proceedings\" (Article 1, Section 5).", "This liberal grant of authority has several important implications. First, the House can amend its rules unilaterally; it need not consult with either the Senate or the President. Second, the House is free to suspend, waive, or ignore its rules whenever it chooses to do so. By and large, the Speaker or whatever Representative is presiding usually does not enforce the rules at his or her own initiative. Instead, Members must protect their own rights by affirmatively making points of order whenever they believe the rules are about to be violated. In addition, House rules include several formal procedures for waiving or suspending certain other rules, and almost any rule can be waived by unanimous consent. Thus, the requirements and restrictions discussed in this report generally apply only if the House chooses to enforce them."], "subsections": []}, {"section_title": "Limits on Debate", "paragraphs": ["If for no other reason than the size of its membership, the House has found it necessary to limit the opportunities for each Representative to participate in floor deliberations. Whenever a Member is recognized to speak on the floor, there is always a time limit on his or her right to debate. The rules of the House never permit a Representative to hold the floor for more than one hour. Under some parliamentary circumstances, there are more stringent limits, with Members being allowed to speak for no more than 5 minutes, 20 minutes, or 30 minutes.", "Furthermore, House rules sometimes impose a limit on how long the entire membership of the House may debate a motion or measure. Most bills and resolutions, for instance, are considered under a set of procedures called \"suspension of the rules\" (discussed later in this report) that limits all debate on a measure to a maximum of 40 minutes. Under other conditions, when there is no such time limit imposed by the rules, the House (and to some extent, the Committee of the Whole as well) can impose one by simple majority vote. These debate limitations and debate-limiting devices generally prevent a minority of the House from thwarting the will of the majority.", "House rules also limit debate in other important respects. First, all debate on the floor must be germane to whatever legislative business the House is conducting. Representatives may speak on other subjects only in one-minute speeches most often made at the beginning of each day's session, special order speeches occurring after the House has completed its legislative business for the day, and during morning hour debates that are scheduled on certain days of the week. Second, all debate on the floor must be consistent with certain rules of courtesy and decorum. For example, a Member should not question or criticize the motives of a colleague."], "subsections": []}, {"section_title": "The Calendars and the Order of Business", "paragraphs": ["When a House committee reports a public bill or resolution that had been referred to it, the measure is placed on the House Calendar or the Union Calendar. In general, tax, authorization, and appropriations bills are placed on the Union Calendar; all others go to the House Calendar. In effect, the calendars are catalogues of measures that have been approved, with or without proposed amendments, by one or more House committees and are now available for consideration on the floor. Placement on a calendar does not guarantee that a measure will receive floor consideration at a specified time or at all. Because it would be impractical or undesirable for the House to take up measures in the chronological order in which they are reported and placed on one of the calendars, there must be some procedures for deciding the order in which measures are to be brought from the calendars to the House floor\u2014in other words, procedures for determining the order of business.", "Clause 1 of Rule XIV lists the daily order of business on the floor, beginning with the opening prayer, the approval of the Journal (the official record of House proceedings required by the Constitution), and the Pledge of Allegiance. Apart from these routine matters, however, the House never follows the order of business laid out in this rule. Instead, certain measures and actions are privileged, meaning they may interrupt the regular order of business. In practice, all the legislative business that the House conducts comes to the floor by interrupting the order of business under Rule XIV, either by unanimous consent or under the provisions of another House rule. Every bill and resolution that cannot be considered by unanimous consent must become privileged business if it is going to reach the floor at all."], "subsections": []}, {"section_title": "Modes of Floor Consideration", "paragraphs": ["There is no one single set of procedures that the House always follows when it considers a public bill or resolution on the floor. Instead, there are several modes of consideration, or different sets of procedural rules, that the House uses. In some cases, House rules require that certain kinds of bills be considered in certain ways. By various means, however, the House chooses to use whichever mode of consideration is most appropriate for a given bill. Which of these modes the House uses depends on such factors as the importance and potential cost of the bill and the amount of controversy the bill has generated among Members. The differences among these sets of procedures rest largely on the balance that each strikes between the opportunities for Members to debate and propose amendments, on the one hand, and the ability of the House to act promptly, on the other. Regardless of which procedure the House uses to consider legislation, the House majority party leadership generally tries to post the text of measures coming to the chamber floor in advance on an internet website created for that purpose."], "subsections": [{"section_title": "Under Suspension of the Rules", "paragraphs": ["The House most frequently resorts to a set of procedures that enables it to act quickly on bills that enjoy overwhelming but not unanimous support. Although this set is called \"suspension of the rules,\" clause 1 of Rule XV provides for these procedures as an alternative to the other modes of consideration. The essential components of suspension of the rules are (1) a 40-minute limit on debate, (2) a prohibition against floor amendments, and (3) a two-thirds vote of those present and voting for passage.", "On every Monday, Tuesday, and Wednesday\u2014and at other times by special arrangement\u2014the Speaker may recognize Members to move to suspend the rules and pass a particular bill (or take some other action, such as agreeing to the Senate's amendments to a House bill). Once such a motion is made, the motion and the bill itself together are debatable for a maximum of 40 minutes. Half of the time is controlled by the Representative making the motion, often the chair of the committee with jurisdiction over the bill; the other half is usually controlled by the ranking minority member of the committee (or sometimes the subcommittee) of jurisdiction, especially when he or she opposes the motion. The suspension motion itself may propose to pass the bill with certain amendments, but no Member may propose an amendment from the floor.", "During the debate, the two Members who control the time yield parts of it to other Members who wish to speak. Once the 40 minutes is either used or yielded back, a single vote occurs on suspending the rules and simultaneously passing the bill. If two-thirds of the Members present vote \"Aye,\" the motion is agreed to and the bill is passed. If the motion fails, the House may debate the bill again at another time, perhaps under another mode of consideration that permits floor amendments and more debate and requires only a simple majority vote for passage.", "The House frequently considers several suspension motions on the same day, which could result in a series of electronically recorded votes taking place at 40-minute intervals if such votes are requested. For the convenience of the House, therefore, clause 8 of Rule XX permits the Speaker to postpone electronic votes that Members have demanded on motions to suspend the rules until a later time on the same day or the following day. When the votes do take place, they are clustered together, occurring one after the other without intervening debate."], "subsections": []}, {"section_title": "In the House Under the Hour Rule", "paragraphs": ["One of the ironies of the legislative process on the House floor is that the House does relatively little business under the basic rules of the House. Instead, most of the debate and votes on amendments to major bills occur in Committee of the Whole (discussed below). This is largely because of the rule that generally governs debate in the House itself.", "The rule controlling debate during meetings of the House (as opposed to meetings of the Committee of the Whole) is clause 2 of Rule XVII, which states in part that a \"Member, Delegate, or Resident Commissioner may not occupy more than one hour in debate on a question in the House.\" In theory, this rule permits each Representative to speak for as much as an hour on each bill, on each amendment to each bill, and on each of the countless debatable motions that Members could offer. Thus, there could be more than four hundred hours of debate on each such question, a situation that would make it virtually impossible for the House to function effectively.", "In practice, however, this \"hour rule\" usually means that each measure considered \"in the House\" is debated by all Members for no more than a total of only one hour before the House votes on passing it. The reason for this dramatic difference between the rule in theory and the rule in practice lies in the consequences of a parliamentary motion to order what is called the \"previous question.\"", "When a bill or resolution is called up for consideration in the House\u2014and, therefore, under the hour rule\u2014the Speaker recognizes the majority floor manager to control the first hour of debate. The majority floor manager is usually the chair of the committee or subcommittee with jurisdiction over the measure and most often supports its passage without amendment. This Member will yield part of his or her time to other Members and may allocate control of half of the hour to the minority floor manager (usually the ranking minority member of the committee or subcommittee). However, the majority floor manager almost always yields to other Representatives \"for purposes of debate only.\" Thus, no other Member may propose an amendment or make any motion during that hour.", "During the first hour of debate, or at its conclusion, the majority floor manager invariably \"moves the previous question.\" This nondebatable motion asks the House if it is ready to vote on passing the bill. If a majority votes for the motion, no more debate on the bill is in order, nor can any amendments to it be offered; after disposing of the motion, the House usually votes immediately on whether to pass the bill. If the House defeats the previous question, however, opponents of the bill would then be recognized to control the second hour of debate, and might use that time to try to amend the measure. Because of this, it is unusual for the House not to vote for the previous question\u2014the House disposes of most measures considered in the House, under the hour rule, after no more than one hour of debate and with no opportunity for amendment from the floor.", "These are not very flexible and accommodating procedural ground rules for the House to follow in considering most legislation. Debate on a bill is usually limited to one hour, and only one or two Members control this time. Before an amendment to the bill can even be considered, the House must first vote against a motion to order the previous question. For these reasons, most major bills are not considered in the House under the hour rule. In current practice, the most common type of legislation considered under the hour rule in the House are procedural resolutions reported by the House Committee on Rules that are commonly referred to as \"special rules\" (discussed below)."], "subsections": []}, {"section_title": "In Committee of the Whole and the House", "paragraphs": ["Much of the legislative process on the floor occurs not \"in the House\" but in a committee of the House known as the Committee of the Whole (formally, the Committee of the Whole House on the State of the Union). Every Representative is a member of the Committee of the Whole, and it is in this committee, meeting in the House chamber, that many major bills are debated and amended before being passed or defeated by the House itself. Most bills are first referred to, considered in, and reported by a standing legislative committee of the House before coming to the floor. In much the same way, once bills do reach the floor, many of them then are referred to a second committee, the Committee of the Whole, for further debate and for the consideration of amendments.", "The Speaker presides over meetings of the House but not over meetings of the Committee of the Whole. Instead, the Speaker appoints another Member of the majority party to serve as the chair of the Committee of the Whole during the time the committee is considering a particular bill or resolution. In addition, the rules that apply in Committee of the Whole are somewhat different from those that govern meetings of the House itself. The major differences are discussed in the following sections of this report. In general, the combined effect of these differences is to make the procedures in Committee of the Whole\u2014especially the procedures for offering and debating amendments\u2014considerably more flexible than those of the House.", "Clause 3 of Rule XVIII requires that most bills affecting federal taxes and spending be considered in Committee of the Whole before the House votes on passing them. Most other major bills are also considered in this way. Most commonly, the House adopts a resolution, reported by the Rules Committee, that authorizes the Speaker to declare the House \"resolved\" into Committee of the Whole to consider a particular bill."], "subsections": [{"section_title": "General Debate", "paragraphs": ["There are two distinct stages to consideration in Committee of the Whole. First, there is a period for general debate, which is routinely limited to an hour. Each of the floor managers usually controls half the time, yielding parts of it to other Members who want to participate in the debate. During general debate, the two floor managers and other Members discuss the bill, the conditions prompting the committee to recommend it, and the merits of its provisions. Members may describe and explain the reasons for the amendments that they intend to offer, but no amendments can actually be proposed at this time. During or after general debate, the majority floor manager may move that the committee \"rise\"\u2014in other words, that the committee transform itself back into the House. When the House agrees to this motion, it may resolve into Committee of the Whole again at another time to resume consideration of the bill. Alternatively, the Committee of the Whole may proceed immediately from general debate to the next stage of consideration: the amending process."], "subsections": []}, {"section_title": "Amending Process", "paragraphs": ["The Committee of the Whole may consider a bill for amendment section by section or, in the case of appropriations measures, paragraph by paragraph. Amendments to each section or of the bill are in order after the part they would amend has been read or designated and before the next section is read or designated. Alternatively, the bill may be open to amendment at any point, usually by unanimous consent. The first amendments considered to each part of the bill are those (if any) recommended by the committee that reported it. Thereafter, members of the committee are usually recognized before other Representatives to offer their own amendments. All amendments must be germane to the text they would amend. Germaneness is a subject matter standard more stringent than one of relevancy and reflects a complex set of criteria that have developed by precedent over the years.", "The Committee of the Whole votes only on amendments; it does not vote directly on the bill as a whole. And like the standing committees of the House, the Committee of the Whole does not actually amend the bill; it only votes to recommend amendments to the House. The motion to order the previous question may not be made in Committee of the Whole, so, under a purely open amendment process, Members may offer whatever germane amendments they wish. After voting on the last amendment to the last portion of the bill, the committee rises and reports the bill back to the House with whatever amendments it has agreed to. Purely open amendment processes have been rare in recent Congresses; the amendment process is far more frequently structured by the terms of a special rule reported by the Rules Committee and adopted by the House. This process is discussed in the next section of this report. ", "An amendment to a bill is a first-degree amendment. After such an amendment is offered, but before the committee votes on it, another Member may offer a perfecting amendment to make some change in the first degree amendment. In current floor practice, this is rare. A perfecting amendment to a first-degree amendment is a second-degree amendment. After debate, the committee first votes on the second-degree perfecting amendment and then on the first-degree amendment as it may have been amended. Clause 6 of Rule XVI also provides that a Member may offer a substitute for the first-degree amendment before or after a perfecting amendment is offered, and this substitute may also be amended. Although a full discussion of these possibilities is beyond the scope of this report, it is important to note that the amending process can become complicated, with Members proposing several competing policy choices before the Committee of the Whole votes on any of them.", "Debate on amendments in Committee of the Whole is governed by the five-minute rule, not the hour rule that regulates debate in the House. The Member offering each amendment (or the majority floor manager, in the case of a committee amendment) is first recognized to speak for five minutes. Then a Member opposed to the amendment may claim five minutes for debate. Other Members may also speak for five minutes each by offering a motion \"to strike the last word.\" Technically, this motion is an amendment that proposes to strike out the last word of the amendment being debated. But it is a \"pro forma amendment\" that is offered merely to secure time for debate and so is not voted on when the five minutes expire. In this way, each Representative may speak for five minutes on each amendment. However, a majority of the Members can vote (or agree by unanimous consent) to end the debate on an amendment immediately or at some specified time. Also, as mentioned, if the amendment process is governed by a special rule reported by the Rules Committee and adopted by the House, that resolution will limit the number, order, and form of amendments that can be considered. "], "subsections": []}, {"section_title": "Final Passage", "paragraphs": ["When the committee finally rises and reports the bill back to the House, the House proceeds to vote on the amendments the committee has adopted. It usually approves all these amendments by one voice vote, though Members can demand separate votes on any or all of them as a matter of right. After a formal and routine stage called \"third reading and engrossment\" (when only the title of the bill is read), there is then an opportunity for a Member, virtually always from the minority party, to offer a motion to recommit the bill to committee. If the House agrees to a \"simple\" or \"straight\" motion to recommit, which only proposes to return the bill to committee, the bill is taken from the floor and returned to committee. Although the committee technically has the power to re-report the bill, in practice, the adoption of a straight motion to recommit is often characterized as effectively \"killing\" the measure. \"Straight\" motions to recommit are rare.", "Alternatively, motions to recommit far more frequently include instructions that the committee report the bill back to the House \"forthwith\" with an amendment that is stated in the motion. If the House agrees to such a motion, which is debatable for 10 minutes, evenly divided, it then immediately votes on the amendment itself, so a motion to recommit with instructions is really a final opportunity for the minority party to amend the bill before the House votes on whether to pass it.", "Thus, this complicated mode of consideration, which the House uses to consider most major bills, begins in the House with a decision to resolve into Committee of the Whole to consider a particular bill. General debate and the amending process take place in Committee of the Whole, but ultimately it is the House that formally amends and then passes or rejects the bill."], "subsections": []}]}, {"section_title": "Under a Special Rule Reported by the Committee on Rules", "paragraphs": ["Clause 1(m) of Rule X authorizes the Rules Committee to report resolutions affecting the order of business. Such a resolution\u2014called a \"rule\" or \"special rule\"\u2014usually proposes to make a bill in order for floor consideration so that it can be debated, amended, and passed or defeated by a simple majority vote. In effect, each special rule recommends to the House that it take from the Union or House Calendar a measure that is not otherwise privileged business and bring it to the floor out of its order on that calendar. Typically, such a resolution begins by providing that, at any time after its adoption, the Speaker may declare the House resolved into Committee of the Whole for the consideration of that bill. Because the special rule is itself privileged, under clause 5(a) of Rule XIII, the House can debate and vote on it promptly. If the House accepts the Rules Committee's recommendation, it proceeds to consider the bill itself.", "One fundamental purpose of most special rules, therefore, is to make another bill or resolution privileged so that it may interrupt the regular order of business. Their other fundamental purpose is to set special procedural ground rules for considering that measure; these ground rules may either supplement or supplant the standing rules of the House. For example, the special rule typically sets the length of time for general debate in Committee of the Whole and specifies which Members are to control that time. In addition, the special rule normally includes provisions that expedite final House action on the bill after the amending process in Committee of the Whole has been completed. Special rules may also waive points of order that Members could otherwise make against consideration of the bill, against one of its provisions, or against an amendment to be offered to it.", "The most controversial provisions of special rules affect the amendments that Members can offer to the bill that the resolution makes in order. As noted above, an \"open rule\" permits Representatives to propose any amendment that meets the normal requirements of House rules and precedents\u2014for example, the requirement that each amendment must be germane. A \"modified open rule\" permits amendments to be offered that otherwise comply with House rules but imposes a time limit on the consideration of amendments or requires them to be preprinted in the Congressional Record . At the other extreme, a \"closed rule\" prohibits all amendments except perhaps for committee amendments and pro forma amendments (\"to strike the last word\") offered only for purposes of debate. A \"structured\" rule, which is the most common type of rule, permits only certain specific amendments to be considered on the floor. These provisions are very important because they can prevent Representatives from offering amendments as alternatives to provisions of the bill, thereby limiting the policy choices that the House can make. Open rules have been rare in recent Congresses. ", "However, like other committees, the Rules Committee only makes recommendations to the House. As noted above, Members debate each of its procedural resolutions in the House under the hour rule and then vote to adopt or reject it. If the House votes against ordering the previous question on a special rule, a Member could offer an amendment to it, proposing to change the conditions under which the bill itself is to be considered. Because the adoption of a special rule is often viewed as a \"party loyalty\" vote, however, such a development is exceedingly rare. All the same, it is important to remember that while the Rules Committee is instrumental in helping the majority party leadership formulate its order of business and in setting appropriate ground rules for considering each bill, the House retains ultimate control over what it does, when, and how."], "subsections": []}, {"section_title": "Unanimous Consent", "paragraphs": ["Legislation is sometimes brought before the House of Representatives for consideration by the unanimous consent of its Members. Long-standing policies announced by the Speaker regulate unanimous consent requests for this purpose. Among other things, the Speaker will recognize a Member to propound a unanimous consent request to call up an unreported bill or resolution only if that request has been cleared in advance with both party floor leaders and with the bipartisan leadership of the committee of jurisdiction."], "subsections": []}]}, {"section_title": "Senate Amendments and Conference Reports", "paragraphs": ["Before any bill can become law, both the House and the Senate must pass it, and the two houses must agree on each and every one of its provisions. This basic constitutional requirement means that the House must have procedures to respond when the House and Senate pass different versions of the same bill. For example, the House may pass a Senate bill with House amendments, or the Senate may pass a House bill with Senate amendments and then send its amendments to the House. In either case, the two houses must resolve their differences over these amendments before the legislative process is completed.", "There are essentially two ways to approach this stage of the process: (1) by dealing with the amendments individually through a process of exchanging amendments between the chambers, with the bill being sent back and forth between the House and Senate, or (2) by dealing with the amendments collectively through a conference committee of Representatives and Senators who negotiate a series of compromises and concessions that are compiled in a conference report that the two houses can vote to accept. Because the process of resolving differences between the houses can be quite complicated, only some of its basic elements are summarized here.", "The House normally considers Senate amendments to a House bill by unanimous consent or by suspension of the rules; the House may accept the amendments (concur in them) or amend them (concur in them with House amendments). Alternatively, the committee with jurisdiction over the bill may authorize its chair to move that the House disagree to the Senate's amendments and send them to a conference committee. When the House amends and passes a Senate bill, it may request a conference with the Senate immediately, or it may simply send its amendments to the Senate in the hope that the Senate will accept them. If the Senate refuses to do so, it may request a conference with the House instead. On the other hand, if the House and Senate can reach agreement by proposing amendments to each other's positions, the bill can be sent to the President for his signature or veto without the need to create a conference committee. This method of resolving differences is sometimes colloquially called \"ping-pong,\" because each chamber acts in turn, shuttling the legislation back and forth as each proposes amendments to the position of the other.", "If the House and Senate agree to send their versions of the bill to a conference committee, the Speaker appoints the House conferees. These conferees are usually drawn from the standing committee (or committees) with jurisdiction over the bill, although the Speaker may appoint some other Representatives as well. When the House and Senate conferees meet, they are to deal only with provisions of the bill on which the two houses disagree. They should not insert new provisions or change provisions that both houses have already approved. Furthermore, as the conferees resolve each provision or amendment in disagreement, they accept the House position, the Senate position, or a compromise between them. Like almost all other House rules, the rules limiting the authority of conferees are enforced only if Members make points of order at the appropriate time. The House may also adopt a special rule, reported by the Rules Committee, waiving points of order against a conference report.", "To complete their work successfully, a majority of the House conferees and a majority of the Senate conferees must sign a report that recommends all the agreements they have reached. The conferees also sign a \"joint explanatory statement\" that describes the original House and Senate positions and the conferees' recommendations and is the functional equivalent of a legislative committee report.", "After Representatives have had three days to examine a conference report, it is privileged for floor consideration; it may be called up at any time that the House is not already considering something else. The report may be debated in the House under the hour rule, so the vote almost always occurs after no more than one hour of debate. No amendments to the report are in order. In practice, however, the House almost always considers conference reports under the terms of a special rule from the Rules Committee that waives all points of order against the report and its consideration.", "The conference report is a proposed package settlement of a number of disagreements, so the House and Senate may accept it or reject it, but they may not change it. If the two houses agree to the report by simple majority vote, all their differences have been resolved and the bill is then \"enrolled,\" or reprinted, for formal presentation to the President.", "In rare instances, conferees cannot reach agreement on one or more of the amendments in conference, or they may reach an agreement that they cannot include in their conference report because their proposal exceeds the scope of the differences between the House and Senate positions (and thus violates the rules governing the content of conference reports). In either case, the conferees may report back to the two houses with an amendment (or amendments) in disagreement. After acting on the conference report and dealing collectively with all the other amendments that were sent to conference, the House acts on each of the amendments in disagreement by considering motions such as a motion to accept the Senate's amendment or a motion to amend it with a new House amendment. The Senate takes similar action until the disagreements on these amendments are resolved or until the two houses agree to create a new conference committee only to address the remaining amendments that are still in disagreement. The bill cannot become law until the two houses resolve all the differences between their positions."], "subsections": []}, {"section_title": "Voting and Quorum Procedures", "paragraphs": ["Whenever Representatives vote on the floor, there is almost always first a \"voice vote,\" in which the Members in favor of the bill, amendment, or motion vote \"Aye\" in unison, followed by those voting \"No.\" Before the Speaker (or the chair of the Committee of the Whole) announces the result, any Representative can demand a \"division vote,\" in which the Members in favor stand up to be counted, again followed by those opposed. But before the result of either a voice vote or a division vote is announced, a Member may try to require another vote in which everyone's position is recorded publicly.", "This recorded vote is taken by using the House's electronic voting system. In Committee of the Whole, an electronic vote is ordered when 25 Members request it. In the House, such a vote occurs when demanded by at least one-fifth of the Members present. Alternatively, any Member can demand an electronically recorded vote in the House if a quorum of the membership is not present on the floor when the voice or division vote takes place.", "The Constitution requires that a quorum must be present on the floor when the House is conducting business. In the House, a quorum is a majority of the Representatives; in Committee of the Whole, it is only 100 Members. However, the House has traditionally assumed that a quorum is always present unless a Member makes a point of order that it is not. The rules restrict when Members can make such points of order, and they occur most often when the House or the Committee of the Whole is voting. In the House, for example, a Representative can object to a voice or division vote on the grounds that a quorum is not present and make that point of order. If a quorum is not present, the Speaker automatically orders an electronically recorded vote during which Members record their presence on the floor by casting their votes. The issue is decided and a quorum is established at the same time. A voice or division vote is valid even if less than a quorum participates in the vote so long as no one makes a point of order that a quorum is not present. For this reason, Members can continue to meet in their committees or fulfill their other responsibilities off the floor when the House is doing business that does not involve publicly recorded votes."], "subsections": []}, {"section_title": "Bringing It All Together: A Typical Day on the House Floor", "paragraphs": ["On most days, the House will meet two hours prior to scheduled legislative business for Morning Hour Debate, a period in which Members can make speeches of up to five minutes on subjects of their choosing. Later, the House will meet for legislative session. After the opening prayer on each day by the House chaplain (or perhaps by a guest chaplain), the Speaker announces approval of the Journal of the previous day's proceedings. A Member may require a recorded vote on agreeing to the Speaker's approval of the Journal. Following the Pledge of Allegiance, some Members may then ask unanimous consent to address the House for one minute each on whatever subjects they wish, including subjects unrelated to the scheduled legislative business of the day.", "The ability to set the House's floor schedule is one of the primary powers and responsibilities of the majority party leaders, and in doing so they often consult with minority party leaders. Generally speaking, to the extent possible, majority party leaders and the committee chairmen arrange the legislative schedule for each week in advance. During the last floor session of the week, the majority leader normally announces the expected schedule for the coming week in a traditional \"wrap-up\" colloquy with a minority party leader. Changes in the schedule may be announced as they are made. ", "On a Monday, Tuesday, or Wednesday, the House will commonly consider multiple measures under the \"suspension of the rules\" procedure. Typically, recorded votes on such measures, if requested, are clustered together and taken at the end of the day. On other days of the week, the House will usually consider a major bill pursuant to a special rule reported by the House Committee on Rules. Such a special rule would be debated in the House under the hour rule, at the end of which the majority manager of the special rule would \"move the previous question,\" which, when adopted, brings the resolution to a vote. Once adopted, the House would ordinarily consider a measure in Committee of the Whole pursuant to the terms for general debate and amendment established by the special rule. Following consideration in the Committee of the Whole, the House would take the final votes on the measure after voting on the amendments recommended by the committee and on a minority motion to recommit, which would likely be made with amendatory instructions. ", "As each item of business is completed, the Speaker anticipates which Member should be seeking recognition to call up the next bill or resolution. If another Representative requests to be recognized instead, t he Speaker may ask, \"For what purpose does the gentleman seek recognition?\" The Speaker may decline to recognize that Member if the Speaker wants the House to consider another privileged measure, motion, or report. ", "At the end of legislative business on most days, some Members address the House for as much as an hour each on subjects of their choice. These \"special order\" speeches are arranged in advance and organized by the party leadership. In this way, Representatives can comment at length on current national and international issues and discuss bills that have not yet reached the House floor. The House often adjourns by early evening, although it may remain in session later when the need arises or when the end of the annual session or some other deadline approaches."], "subsections": []}, {"section_title": "Sources of Additional Information", "paragraphs": ["The House rules for each Congress are published in a volume often called the House manual but officially entitled Constitution, Jefferson's Manual and Rules of the House of Representatives . A new edition of this collection is published each Congress. The precedents of the House established through 1935 have been compiled in the 11-volume set of Hinds' and Cannon's Precedents of the House of Representatives . More recent precedents are published as Deschler's or Deschler-Brown -Johnson Precedents of the U.S. House of Representatives ; 18 volumes of this set now are available. Volume 1 of a fourth series of House precedents, Precedents of the United States House of Representatives , was initiated in 2017, and additional volumes are expected in the future. The House's procedures are summarized in House Practice: A Guide to the Rules, Precedents and Procedures of the House , by Charles W. Johnson, John V. Sullivan, and Thomas J. Wickham Jr., Parliamentarians of the House. The most recent version of House Practice was published in 2017. The Parliamentarian and his assistants welcome inquiries about House procedures and offer expert assistance compatible with their other responsibilities."], "subsections": [{"section_title": "CRS Reports", "paragraphs": ["CRS Report 98-995, The Amending Process in the House of Representatives , by Christopher M. Davis.", "CRS Report RL32200, Debate, Motions, and Other Actions in the Committee of the Whole , by Bill Heniff Jr. and Elizabeth Rybicki.", "CRS Report 97-552, The Discharge Rule in the House: Principal Features and Uses , by Richard S. Beth.", "CRS Report RL30787, Parliamentary Reference Sources: House of Representatives , by Richard S. Beth and Megan S. Lynch.", "CRS Report 98-696, Resolving Legislative Differences in Congress: Conference Committees and Amendments Between the Houses , by Elizabeth Rybicki.", "CRS Report 97-780, The Speaker of the House: House Officer, Party Leader, and Representative , by Valerie Heitshusen.", "CRS Report 98-314, Suspension of the Rules in the House: Principal Features , by Elizabeth Rybicki.", "CRS Report 98-870, Quorum Requirements in the House: Committee and Chamber , by Christopher M. Davis."], "subsections": []}]}]}}
{"id": "R45242", "title": "Private Flood Insurance and the National Flood Insurance Program", "released_date": "2019-05-07T00:00:00", "summary": ["The National Flood Insurance Program (NFIP) is the main source of primary flood insurance coverage in the United States, collecting approximately $4.75 billion in premiums, fees, and surcharges for over five million flood insurance policies. This is in contrast to the majority of other property and casualty risks, such as damage from fire or accidents, which are covered by a broad array of private insurance companies. One of the primary reasons behind the creation of the NFIP in 1968 was the withdrawal by private insurers from providing flood insurance coverage, leaving flood victims largely reliant on federal disaster assistance to recover after a flood. While private insurers have taken on relatively little flood risk, they have been involved in the administration of the NFIP through sales and servicing of policies and claims.", "In recent years, private insurers have expressed increased interest in providing flood coverage. Advances in the analytics and data used to quantify flood risk along with increases in capital market capacities may allow private insurers to take on flood risks that they shunned in the past. Private flood insurance may offer some advantages over the NFIP, including more flexible flood polices, integrated coverage with homeowners insurance, or lower-cost coverage for some consumers. Private marketing might also increase the overall amount of flood coverage purchased, reducing the amount of extraordinary disaster assistance necessary to be provided by the federal government. Increased private coverage could reduce the overall financial risk to the NFIP, reducing the amount of NFIP borrowing necessary after major disasters.", "Increasing private insurance, however, may have some downsides compared to the NFIP. Private coverage would not be guaranteed to be available to all floodplain residents, unlike the NFIP, and consumer protections could vary in different states. The role of the NFIP has historically been broader than just providing insurance. As currently authorized, the NFIP also encompasses social goals to provide flood insurance in flood-prone areas to property owners who otherwise would not be able to obtain it, and to reduce government's cost after floods. Through flood mapping and mitigation efforts, the NFIP has tried to reduce the future impact of floods, and it is unclear how effectively the NFIP could play this broader role if private insurance became a large part of the flood marketplace. Increased private insurance could also have an impact on the subsidies that are provided for some consumers through the NFIP.", "The 2012 reauthorization of the NFIP (Title II of P.L. 112-141) included provisions encouraging private flood insurance; however, various barriers have remained. Legislation passed the House in the 114th Congress (H.R. 2901) and 115th Congress (H.R. 2874) which would have attempted to expand the role of private flood insurance; neither bill was taken up by the Senate.", "In the 116th Congress, no NFIP legislation has advanced past introduction. The NFIP is currently operating under a short-term reauthorization until May 31, 2019; some NFIP legislation may be considered prior to this date."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Congress is currently considering reauthorization of the National Flood Insurance Program (NFIP) for either a shorter or longer term, while the program is still dealing with the financial impact of the 2017 and 2018 hurricane seasons. Total losses (insured and uninsured) for the 2017 hurricane season are estimated at a record $273 billion, with losses for Hurricane Harvey estimated at $128.8 billion, Hurricane Maria at $92.7 billion, and Hurricane Irma at $51.5 billion. Total losses for the 2018 hurricane season are estimated at $49.4 billion, with Hurricane Florence at $24.2 billion and Hurricane Michael at $25.2 billion. NFIP claims for Harvey, Irma, and Maria amounted to more than $10.1 billion as of January 31, 2019, while NFIP claims for Florence and Michael amounted to more than $850 million as of that date. The NFIP is designed to borrow money from the Treasury to cover claims for extreme events; however, the 2017 losses would have pushed the program over its authorized borrowing limit. Rather than increase the borrowing limit, in 2017, Congress canceled $16 billion of NFIP debt to allow the program to pay claims. ", "Expanding the role of private insurers, including reinsurers, has been seen by many as an answer to the variability of the financial position of the NFIP. Increasing participation by private insurers could transfer more flood risk from policyholders to the private insurance sector, as opposed to transferring the risk to the federal government through the NFIP. In addition to the possible advantage to the NFIP, the increased availability of flood insurance as private companies enter the market may benefit households and businesses, as insured flood victims are likely to recover more quickly and more fully after a flood. ", "Private insurer interest in directly providing and underwriting flood risk has increased in recent years. Advances in the analytics and data used to quantify flood risk along with increases in capital market capacities may allow private insurers to take on flood risks that they shunned in the past. However, increasing the private sector role in providing flood insurance coverage directly to consumers may have implications for the operations and fiscal solvency of the NFIP as currently structured. Increased access to private flood insurance could provide individual policyholders with a wider choice of coverage and possibly cheaper premiums, but may also lead to variable consumer protections. ", "The extent to which private insurance companies participate in the U.S. flood insurance market represents an area of congressional concern. Both the 114 th and 115 th Congress addressed the issue with legislation passing the House; however, no legislation was ultimately enacted. The NFIP is currently operating under a short-term reauthorization until May 31, 2019.", "This report describes the current role of private insurers in U.S. flood insurance, and discusses barriers to private sector involvement. The report considers potential effects of increased private sector involvement in the U.S. flood market, both for the NFIP and for consumers. Finally, the report outlines the provisions relevant to private flood insurance in House and Senate NFIP reauthorization bills from the 115 th Congress. It will be updated to reflect legislative developments in the 116 th Congress, particularly focusing on private flood insurance. "], "subsections": []}, {"section_title": "Background6", "paragraphs": ["The NFIP is the main provider of primary flood insurance coverage for residential properties in the United States, providing nearly $1.42 trillion in coverage for over 5 million residential flood insurance policies. In FY2018, the program collected about $3.5 billion in annual premium revenue, $1.1 billion in assessments, fees, and surcharges and $1.0 billion in payments from private reinsurers. Nationally, over 22,000 communities participate in the NFIP. The role of the federal government in flood insurance is in contrast to the majority of other property and casualty risks, such as damage from fire or accidents, which are covered by a broad array of private insurance companies. Total premiums for private property and casualty insurance in 2018 totaled $611 billion, with the policies backed by over $2 trillion in assets held by private insurers."], "subsections": [{"section_title": "Objectives of the NFIP", "paragraphs": ["The NFIP has two main policy goals: (1) to provide access to primary flood insurance, thereby allowing for the transfer of some of the financial risk of property owners to the federal government; and (2) to mitigate and reduce the nation's comprehensive flood risk through the development and implementation of floodplain management standards. A longer-term objective of the NFIP is to reduce federal expenditure on disaster assistance after floods.", "As a public insurance program, the NFIP is designed differently from the way in which private-sector companies provide insurance. As currently authorized, the NFIP also encompasses social goals to provide flood insurance in flood-prone areas to property owners who otherwise would not be able to obtain it, and to reduce the government's cost after floods. The NFIP also engages in many \"non-insurance\" activities in the public interest: it disseminates flood risk information through flood maps, requires communities to adopt land use and building code standards in order to participate in the program, potentially reduces the need for other post-flood disaster aid, contributes to community resilience by providing a mechanism to fund rebuilding after a flood, and may protect lending institutions against mortgage defaults due to uninsured losses. The benefits of such tasks are not directly measured in the NFIP's financial results from selling flood insurance.", "From the inception of the NFIP, the program has been expected to achieve multiple objectives, some of which may conflict with one another: ", "To ensure reasonable insurance premiums for all; To have risk-based premiums that would make people aware of and bear the cost of their floodplain location choices; To secure widespread community participation in the NFIP and substantial numbers of insurance policy purchases by property owners; and To earn premium and fee income that, over time, covers claims paid and program expenses."], "subsections": []}, {"section_title": "Primary Flood Insurance Through the NFIP", "paragraphs": ["The NFIP offers flood insurance to anyone in a community that chooses to participate in the program. Flood insurance purchase generally is voluntary, except for property owners who are in a Special Flood Hazard Area (SFHA) and whose mortgage is backed by the federal government. Flood insurance policies through the NFIP are sold only in participating communities and are offered to both property owners and renters and to residential and non-residential properties. NFIP policies have relatively low coverage limits, particularly for non-residential properties or properties in high-cost areas. The maximum coverage for single-family dwellings (which also includes single-family residential units within a 2-4 family building) is $100,000 for contents and up to $250,000 for building coverage. The maximum available coverage limit for other residential buildings is $500,000 for building coverage and $100,000 for contents coverage, and the maximum coverage limit for non-residential business buildings is $500,000 for building coverage and $500,000 for contents coverage. "], "subsections": [{"section_title": "The Mandatory Purchase Requirement", "paragraphs": ["By law and regulation, federal agencies, federally regulated lending institutions, and government-sponsored enterprises (GSEs) must require the property owners in an SFHA to purchase flood insurance as a condition of any mortgage that these entities make, guarantee, or purchase. In addition to this legal mandatory purchase requirement, lenders may also require borrowers outside of an SFHA to maintain flood insurance as a means of financially securing the property.", "In order to comply with this mandate, property owners may purchase flood insurance through the NFIP, or through a private company, so long as the private flood insurance \"provides flood insurance coverage which is at least as broad as the coverage\" of the NFIP, among other conditions. The mandatory purchase requirement is enforced by the lender, rather than FEMA, and lenders can be fined up to $2,000 by banking regulators for each failure to require flood insurance or provide notice. Property owners who do not obtain flood insurance when required may find that they are not eligible for certain types of disaster assistance after a flood."], "subsections": []}, {"section_title": "Premium Subsidies and Cross-Subsidies", "paragraphs": ["Flood insurance rates in the NFIP generally are directed by statute to be \"based on consideration of the risk involved and accepted actuarial principles,\" meaning that the rate is reflective of the true flood risk to the property. However, Congress has directed FEMA not to charge actuarial rates for certain categories of properties and to offer discounts to other classes of properties. FEMA is not, however, provided funds to offset these subsidies and discounts, which has contributed to FEMA's need to borrow from the U.S. Treasury to pay NFIP claims. ", "There are three main categories of properties that pay less than full risk-based rates: ", "Pre-FIRM : properties that were built or substantially improved before December 31, 1974, or before FEMA published the first Flood Insurance Rate Map (FIRM) for their community, whichever was later; Newly mapped : properties that are newly mapped into a SFHA on or after April 1, 2015, if the applicant obtains coverage that is effective within 12 months of the map revision date; and Grandfathered : properties that were built in compliance with the FIRM in effect at the time of construction and are allowed to maintain their old flood insurance rate class if their property is remapped into a new flood rate class. "], "subsections": []}]}, {"section_title": "NFIP Reauthorization and Legislation", "paragraphs": [], "subsections": [{"section_title": "116th Congress", "paragraphs": ["The NFIP is currently authorized until May 31, 2019. Since the end of FY2017, 10 short-term NFIP reauthorizations have been enacted. As of the date of this report, in the 116 th Congress, no NFIP legislation has been considered in committee in the Senate. The House Financial Services Committee held a hearing on March 13, 2019, on NFIP reauthorization at which four draft bills were circulated."], "subsections": []}, {"section_title": "Prior Congresses", "paragraphs": ["In the 115 th Congress, a number of bills were introduced to provide a longer-term reauthorization of the NFIP as well as make numerous other changes to the program. The House of Representatives passed H.R. 2874 (The 21 st Century Flood Reform Act) by a vote of 237-189 on November 14, 2017. Among its numerous provisions, H.R. 2874 would have authorized the NFIP until September 30, 2022. ", "Three bills were introduced in the Senate that would have reauthorized the expiring provisions of the NFIP:", "S. 1313 (Flood Insurance Affordability and Sustainability Act of 2017); S. 1368 (Sustainable, Affordable, Fair, and Efficient [SAFE] National Flood Insurance Program Reauthorization Act of 2017); and S. 1571 (National Flood Insurance Program Reauthorization Act of 2017). ", "None of these bills were considered by the full Senate in the 115 th Congress. Among their other provisions, S. 1313 would have authorized the NFIP until September 30, 2027; S. 1368 would have authorized the NFIP until September 30, 2023; and S. 1571 would have authorized the NFIP until September 30, 2023.", "The four reauthorization bills differed significantly in the degree to which they would have encouraged private participation in flood insurance, particularly flood insurance sold by private companies in competition with the NFIP. In general, legislation passed by the House was more encouraging of private flood insurance than Senate legislation. The House passed standalone legislation to encourage private insurance in the 114 th Congress ( H.R. 2901 ); however, the Senate did not take up H.R. 2901 in the 114 th Congress. In the 115 th Congress, the House included the same provisions in H.R. 2874 and in an unrelated bill to reauthorize the Federal Aviation Administration ( H.R. 3823 ). The Senate removed the flood insurance language from H.R. 3823 before passing it. Reportedly, the provisions relating to private flood insurance were a particular issue of concern. The Senate ultimately did not take up H.R. 2874 during the 115 th Congress. S. 1313 included some similar provisions to H.R. 2874 , but S. 1368 and S. 1571 did not.", "Details of the provisions relating to private insurance in the 115 th Congress House and Senate bills are described in the Appendix, and Table A-1 relates the provisions in the bills to the issues discussed in this report. "], "subsections": []}]}]}, {"section_title": "The Current Role of Private Insurers in the NFIP", "paragraphs": ["Private insurers can be involved in the flood insurance market in a number of ways, including (1) by helping to administer the NFIP; (2) by sharing risk with the NFIP as a reinsurer; or (3) by taking on risk themselves as a primary insurer, where the insurer contracts directly with a consumer. Since 1983, private insurers have played a major role in administering the NFIP, including selling and servicing policies and adjusting claims, but they largely have not been underwriting flood risk themselves. Instead, the NFIP retains the direct financial risk of paying claims for these policies. Since 2016, the NFIP has purchased a limited amount of reinsurance, thus transferring some of the flood risk to the private sector."], "subsections": [{"section_title": "Servicing of Policies and Claims Management", "paragraphs": ["While FEMA provides the overarching management and oversight of the NFIP, the majority of the day-to-day operation of the NFIP is handled by private companies. This includes marketing, selling and writing policies, and all aspects of claims management. FEMA has established two different arrangements with private industry. The first is the Direct Servicing Agent, or DSA, which operates as a private contractor, selling NFIP policies on behalf of FEMA for individuals seeking to purchase flood insurance policies directly from the NFIP. The DSA also handles the policies of severe repetitive loss properties. The second arrangement is the Write-Your-Own (WYO) program, where private insurance companies are paid to issue and service NFIP policies. With either the DSA or WYO program, the NFIP retains the actual financial risk of paying claims for the policy, and the policy terms and premiums are the same. Approximately 13% of the total NFIP policy portfolio is managed through the DSA and 87% of NFIP policies are sold by the 60 companies participating in the WYO program. ", "Companies participating in the WYO program are compensated through a variety of methods, but this compensation is not directly based on the costs incurred by the WYOs. In the Biggert-Waters Flood Insurance Reform Act of 2012 (Title II of P.L. 112-141 , hereinafter BW-12), Congress required FEMA to develop and issue a rulemaking on a \"methodology for determining the appropriate amounts that property and casualty insurance companies participating in the WYO program should be reimbursed for selling, writing, and servicing flood insurance policies and adjusting flood insurance claims on behalf of the National Flood Insurance Program.\" This rulemaking was required within a year of enactment of BW-12. As of April 2019, FEMA has yet to publish a rulemaking to revise the compensation structure of the WYO companies. Without this analysis, it is difficult to ascertain how much it actually costs WYO companies to administer the NFIP policies, or the WYO's profit margins (if any). In the 115 th Congress, H.R. 2874 would have capped the allowance paid to the WYOs at 27.9% of premiums, while S. 1368 would have capped the allowance at 22.46%."], "subsections": []}, {"section_title": "Reinsurance", "paragraphs": ["In the Homeowner Flood Insurance Affordability Act of 2014 ( P.L. 113-89 , HFIAA), Congress revised the authority of FEMA to secure reinsurance for the NFIP from the private reinsurance and capital markets. The purchase of private market reinsurance reduces the likelihood of FEMA needing to borrow from the Treasury to pay claims. In addition, as the U.S. Government Accountability Office (GAO) noted, reinsurance could be beneficial because it allows FEMA to price some of its flood risk up front through the premiums it pays to the reinsurers rather than borrowing from Treasury after a flood. From a risk management perspective, using reinsurance to cover losses in only the more extreme years could help the government to manage and reduce the volatility of its losses over time. ", "Transfer of risk to the private sector through reinsurance, however, is unlikely to lower the overall cost of the NFIP because reinsurers understandably charge FEMA premiums to compensate for the risk they assume. The primary benefit of reinsurance is to transfer and manage risk rather than to reduce the NFIP's long-term fiscal exposure. For example, a reinsurance scenario which would provide the NFIP with $16.8 billion coverage (sufficient for Katrina-level losses) could cost an estimated $2.2 billion per year. Such a reinsurance premium, however, would be a large portion of the total premiums paid into the NFIP, approximately two-thirds of the current premium amounts. Devoting such a large portion of premiums to reinsurance could leave insufficient funds for paying claims outside of large disasters, or for covering the other purposes for NFIP funds, such as flood mitigation, mapping, and improving NFIP rating structures. ", "Reinsurance has been purchased by FEMA through two different mechanisms, \"traditional\" reinsurance and reinsurance backed by catastrophe bonds. The traditional reinsurance has been purchased from a varied group of reinsurance companies with each reinsurer bearing part of the risk. The catastrophe bond reinsurance is facilitated by a single company, with the risk then transferred to capital market investors who purchase the bonds. The specifics of each reinsurance purchase has varied, but in general, the reinsurance has been designed to pay a certain percentage of the losses from a single, large scale event, with a higher percentage if losses are higher. Coverage has typically started after $4 billion in losses, a loss level that has only been reached by the NFIP in three events\u2014Hurricane Katrina, Superstorm Sandy, and Hurricane Harvey. Table 1 outlines the various reinsurance purchases, including the dates in force, type of reinsurance, amount of coverage, premiums paid by FEMA, and claims paid to FEMA.", "To date, the reinsurance purchases have been a net fiscal positive for the NFIP with a total of $655 million in premiums paid and $1.042 billion received from claims. This is due to the extremely high losses experienced after Hurricane Harvey, which resulted in over $8.6 billion paid by the NFIP to policyholders. Unless another large scale flooding event occurs, the balance of premiums vs. claims is likely to turn negative in the next two to three years if FEMA continues similar reinsurance purchases.", "In the 115 th Congress, H.R. 2874 , S. 1313 , and S. 1571 all contained provisions that would have required or encouraged the NFIP to transfer a portion of its risk to the private reinsurance market. "], "subsections": []}]}, {"section_title": "Private Flood Insurance Outside the NFIP: Issues and Barriers", "paragraphs": ["One of the reasons that Congress created the NFIP in 1968 was the general unavailability of flood insurance from private insurers. Private flood insurance was offered between 1895 and 1927, but losses incurred from the 1927 Mississippi River floods and additional flood losses in 1928 led most insurers to stop offering flood policies. Private flood insurance companies largely concluded that flood peril was uninsurable because of the catastrophic nature of flooding, the difficulty of determining accurate rates, the risk of adverse selection, and the concern that they could not profitably provide risk-based flood coverage at a price that consumers felt they could afford. ", "Currently, the private flood insurance market most commonly provides commercial coverage, secondary coverage above the NFIP maximums, or coverage in the lender-placed market. The 2018 premiums for private flood insurance as reported to the National Association of Insurance Commissioners (NAIC) totaled $644 million, up from $589 million in 2017 and $376 million in 2016, compared to the $3.5 billion total amount of NFIP premiums. In general, the private flood market tends to focus on high-value properties, which command higher premiums and therefore the extra expense of flood underwriting can be more readily justified. ", "Currently few private insurers compete with the NFIP in the primary residential flood insurance market. One illustration of this is that the NAIC only began systematically collecting separate data on private flood insurance in 2016. ", "As discussed in the following sections, private insurers have identified a number of potential barriers to more widespread private sector involvement in providing flood insurance. Increasing private insurance may present a number of issues for the NFIP and for consumers."], "subsections": [{"section_title": "Flood Insurance Coverage \"at Least as Broad as\" the NFIP", "paragraphs": ["In BW-12, Congress explicitly provided for private flood insurance to fulfill the mandatory purchase mortgage requirement as long as the private flood insurance \"provides flood insurance coverage which is at least as broad as the coverage\" of the NFIP, among other conditions. Implementation of this requirement has proved challenging. The crux of the implementation issue is in answering the question of who would evaluate whether specific policies met the \"at least as broad as\" standard and what criteria would be used in making this evaluation. Some lending institutions feel that they lack the necessary technical expertise to evaluate whether a flood insurance policy meets the definition of private flood insurance set forth in BW-12. ", "The responsible federal agencies issued two separate Notices of Proposed Rulemaking (NPRM) on the question, the first in October 2013, and the second in November 2016. On February 12, 2019, the agencies announced a final rule implementing this BW-12 requirement. Of particular note, the agencies indicate the rule ", "\"allows institutions to rely on an insurer's written assurances in a private flood insurance policy stating the criteria are met; [and] clarifies that institutions may, under certain conditions, accept private flood insurance policies that do not meet the Biggert-Waters Act criteria.\"", "This second point may seem unusual, because BW-12 included a specific definition of private flood insurance, while the agencies indicate that the rule allows acceptance of private flood insurance that does not meet this statutory definition. In creating the exception that allows private flood insurance that does not follow the statutory definition of \"private flood insurance,\" the agencies relied on the usage of the more general term \"flood insurance\" in 42 U.S.C. 4012a(b)(1)(A) combined with the perceived congressional intent to promote private insurance in BW-12. ", "The rule takes effect on July 1, 2019. Press reports described it as generally welcomed by the banking industry, but it is unclear to what extent this new rule will encourage private flood insurance or whether additional legislative changes might be needed if Congress seeks to further encourage development of the private flood insurance market.", "In the 115 th Congress, H.R. 2874 and S. 1313 included provisions that would have revised the definition of private flood insurance, striking existing statutory language requiring private flood insurance to provide coverage \"at least as broad as the coverage\" provided by the NFIP in order to meet the mandatory purchase requirements. Instead, the new definition would have relied on whether the insurance policy and insurance company were in compliance with the laws and regulations in the state where the insurance was purchased. S. 1368 and S. 1571 had no similar provisions."], "subsections": []}, {"section_title": "Continuous Coverage", "paragraphs": ["An associated issue is that of continuous coverage, which is required for property owners to retain any subsidies or cross-subsidies in their NFIP premium rates. Under existing law, if an NFIP policyholder allows their policy to lapse, any subsidy that they currently receive would be eliminated immediately. Unless legislation specifically allows private flood insurance to count for continuous coverage, a borrower may be reluctant to purchase private insurance if doing so means they would lose their subsidy should they later decide to return to NFIP coverage. ", "In the 115 th Congress, H.R. 2874 included a provision that would have specified that if a property owner purchases private flood insurance and decides then to return to the NFIP, they would be considered to have maintained continuous coverage. S. 1313 included a provision to allow private flood insurance to count as continuous coverage. S. 1368 and S. 1571 had no similar provisions. In the 116 th Congress, H.R. 1666 , introduced on March 11, 2019, would consider any period during which a property is covered by a flood insurance policy, either through the NFIP or a private company, to be a period of continuous coverage. "], "subsections": []}, {"section_title": "The \"Non-Compete\" Clause", "paragraphs": ["Before FY2019, the Write Your Own carriers, private insurers who sell and service NFIP policies, were restricted in their ability to sell flood insurance policies on their own behalf while also participating as a WYO, due to a \"non-compete\" clause contained in the standard NFIP contracts. These contracts governing the WYO companies' participation in the NFIP restricted the WYO carriers from selling their own standalone private flood products. A non-compete clause would require WYO companies to decide whether to offer private flood insurance policies in their own right or to act as WYO carriers, thus potentially limiting the size of the private flood market. In the 115 th Congress, H.R. 2874 would have eliminated the non-compete clause in place at the time, while S. 1313 would have provided temporary authorization for WYOs to sell private flood insurance for certain types of properties, with a follow-up study by FEMA to determine if the authorization should be made permanent.", "FEMA implemented changes in the standard WYO contracts for FY2019 removing the restrictions on WYO companies offering private flood insurance, while maintaining requirements that such private insurance lines remain entirely separate from a WYO company's NFIP insurance business. This action removes the non-compete clause without legislation, although FEMA in the future would retain the authority to reinstate the non-compete clause. Possible implications of the removal of the non-compete clause are discussed later in this report in the section on \" Adverse Selection .\""], "subsections": []}, {"section_title": "NFIP Subsidized Rates", "paragraphs": ["FEMA's subsidized rates are often seen as one of the primary barriers to private sector involvement in flood insurance. However, even without the subsidies mandated by law, the NFIP's definition of full-risk rates differs from that of private insurers. Whereas the NFIP's full-risk rates must incorporate expected losses and operating costs, a private insurer's full-risk rates must also incorporate a profitable return on capital. As a result, even those NFIP policies which are considered to be actuarially sound from the perspective of the NFIP may still be underpriced from the perspective of private insurers. In order to make the flood insurance market attractive, private insurers would want to be able to charge premium rates that reflect the full estimated risk of potential flood losses while still allowing the companies to make a profit. A reformed NFIP rate structure could have the effect of encouraging more private insurers to enter the primary flood market because NFIP full-risk based rates would be closer to the rates that private insurers would likely charge; however, this could lead to higher rates for households. ", "In the 115 th Congress, H.R. 2874 would have phased out the pre-FIRM subsidy for primary residences at a rate of 6.5%-15% (compared to the current rate of 5%-18%), in a staged manner. In the first year after enactment, the minimum rate increase would have been 5%; in the second year after enactment, the minimum rate increase would have been 5.5%; and in the third year of enactment, the minimum rate increase would have been 6%. The phaseout of the pre-FIRM subsidy for other categories of properties would have remained at 25%. The Senate bills did not contain any provisions related to premium rate subsidies.", "FEMA is in the process of developing a redesigned risk rating system for the NFIP, known as Risk Rating 2.0. The new flood insurance rates for single-family properties are to be announced on April 1, 2020, and the new rates planned to go into effect for single-family properties across the country on October 1, 2020. As of January 31, 2019, there were 3.53 million single-family policies in force nationally. Many details are not yet known, but FEMA representatives have indicated the new rating structure will include replacement cost value and the distance between the property and a source of water. Risk Rating 2.0 is to also include new sources of flooding, such as intense rainfall, that are not currently included in the rating structure. "], "subsections": []}, {"section_title": "Regulatory Uncertainty", "paragraphs": ["As addressed above, the rules on the acceptance of private insurance for the mandatory purchase requirement, and whether or not private flood insurance would count for continuous coverage, have had a significant impact on the market potential for private insurers. Another driver of private sector concern is regulatory uncertainty at the state level. The role of state regulators would increase in a flood insurance market with increased private sector involvement, which could increase the burden of oversight. The involvement of 56 state and territorial insurance regulators is likely to add complexity and additional costs for insurers, lenders, or property owners. For example, some private insurers cited the intervention of state regulators in controlling rates for wind insurance in Florida as a reason for withdrawing from that market. However, this could also lead to the development of state-specific insurance solutions, which might better suit local social and economic conditions. In the 115 th Congress, H.R. 2874 and S. 1313 referenced state laws and regulations in their definition of private flood insurance that could meet the mandatory purchase requirements. "], "subsections": []}, {"section_title": "Ability to Assess Flood Risk Accurately", "paragraphs": ["Many insurers view the lack of access to NFIP data on flood losses and claims as a barrier to more private companies offering flood insurance. It is argued that increasing access to past NFIP claims data would allow private insurance companies to better estimate future losses and price flood insurance premiums, and ultimately to determine which properties they might be willing to insure. However, FEMA's view is that the agency would need to address privacy concerns in order to provide property level information to insurers, because the Privacy Act of 1974 prohibits FEMA from releasing policy and claims data which contain personally identifiable information. Private insurers have also suggested that better flood risk assessment tools such as improved flood maps and inland and storm surge models are needed in order to price risks at the individual and portfolio level. In the 115 th Congress, H.R. 2874 would have required FEMA to make all NFIP claims data publicly available in a form that does not reveal personally identifiable information, while S. 1313 would have authorized FEMA to sell or license individual claims data while requiring FEMA to make aggregate claims data available."], "subsections": []}, {"section_title": "Adequate Consumer Participation", "paragraphs": ["Insurers need sufficient consumer participation to manage and diversify their risk exposure. Many private insurers have expressed the view that broader participation in the flood insurance market would be necessary to address adverse selection and maintain a sufficiently large risk pool. A long-standing objective of the NFIP has been to increase purchases of flood insurance policies, and this objective was the motivation for introducing the mandatory purchase requirement. ", "Despite the mandatory purchase requirement, not all covered mortgages carry the insurance as dictated, and no up-to-date data on national compliance rates with the mandatory purchase requirement are available. A 2006 study commissioned by FEMA found that compliance with this mandatory purchase requirement may be as low as 43% in some areas of the country (the Midwest), and as high as 88% in others (the West). A more recent study of flood insurance in New York City found that compliance with the mandatory purchase requirement by properties in the SFHA with mortgages increased from 61% in 2012 to 73% in 2016. The escrowing of insurance premiums, which began in January 2016, may increase compliance with the mandatory purchase requirement more widely, but no data are yet available.", "The mandatory purchase requirement could potentially be expanded to more (or all) mortgage loans made by federally regulated lending institutions for properties in communities participating in the NFIP. Another possible option would be to require all properties within the SFHA to have flood insurance, not just those with federally backed mortgages. Consumer participation could also be increased if the federal government were to mandate that homeowners' insurance policies include flood coverage or require all homeowners to purchase flood insurance. All four 115 th Congress bills contained provisions for some form of study to assess the compliance with the mandatory purchase requirement. H.R. 2874 would also have increased civil penalties on lenders for failing to enforce the mandatory purchase requirement."], "subsections": []}]}, {"section_title": "Potential Effects of Increased Private Sector Involvement in the Flood Market", "paragraphs": [], "subsections": [{"section_title": "Increased Consumer Choice", "paragraphs": ["Current NFIP policies offer a relatively limited array of coverages, particularly compared to what is available in private markets for similar insurance against perils other than floods. Private insurance companies could potentially compete with the NFIP by offering coverage not available under the NFIP, such as business interruption insurance, living expenses while a property is being repaired, basement coverage, coverage of other structures on a property, and/or by offering policies with coverage limits higher than the NFIP. The NFIP currently also has a 30-day waiting period in almost all cases before the insurance coverage goes into effect, whereas private insurance companies may have a shorter waiting period. Private companies could also offer flood coverage as an add-on to a standard homeowners' policy, which could eliminate the current problem of distinguishing between flood damage (which is covered by the NFIP) and wind damage (which is often covered by standard homeowners' insurance). Unlike the NFIP, private flood insurance companies may also issue a policy without necessarily requiring elevation certificates, perhaps by using new technology to measure the elevation of individual structures. "], "subsections": []}, {"section_title": "Cheaper Flood Insurance", "paragraphs": ["Since some properties receive lower NFIP rates due to cross subsidies from other NFIP policyholders, it seems likely that some of the non-subsidized NFIP policyholders would be able to obtain less expensive flood insurance from private insurers. Private insurers may also be able to offer premiums more closely tied to individual risks than the NFIP currently does, which would provide lower premiums for some policyholders. Quantifying the potential savings for some policyholders from private insurance is, however, difficult. The amount and extent of cross-subsidization within the NFIP is not currently known, as the NFIP has not historically tracked the number of grandfathered properties. One example of an attempt to provide estimates of NFIP versus private insurance is a modeling exercise carried out by two private companies, Milliman and KatRisk, which looked at premiums for single-family homes in Louisiana, Florida, and Texas. Their modeling suggested that 77% of single-family homes in Florida, 69% in Louisiana, and 92% in Texas would pay less with a private policy than with the NFIP; however, 14% in Florida, 21% in Louisiana, and 5% in Texas would pay over twice as much. Milliman did not provide any details of the coverage offered by these private policies, nor the basis on which their figures were estimated. "], "subsections": []}, {"section_title": "Variable Consumer Protections", "paragraphs": ["The consumer protections associated with private policies are likely to be enforced at a state level and will therefore be variable; some states may offer a higher level of protection than others. Because private insurers are free to accept or reject potential policyholders as necessary in order to manage their risk portfolio, private insurers may not necessarily renew a policy. A private flood insurance policy might be less expensive than an NFIP policy, but it might also offer less extensive coverage, which a policyholder may not realize until they make a claim following a flood. Unlike the NFIP, the language in private flood insurance policies is not standardized and has not yet been tested in court in the same way as, for example, homeowners' insurance. Thus there may be greater variability in claims outcomes for consumers in the early years of private flood insurance penetration."], "subsections": []}, {"section_title": "Adverse Selection", "paragraphs": ["Private sector competition might increase the financial exposure and volatility of the NFIP, as private markets will likely seek out policies that offer the greatest likelihood of profit. In the most extreme case, the private market may \"cherry-pick\" (i.e., adversely select against the NFIP) the profitable, lower-risk NFIP policies that are \"overpriced\" either due to cross-subsidization or imprecise flood insurance rate structures, particularly when there is pricing inefficiency in favor of the customer. This could leave the NFIP with a higher density of actuarially unsound policies that are being directly subsidized or benefiting from cross-subsidization. Because the NFIP cannot refuse to write a policy, those properties that are considered \"undesirable\" by private insurers are likely to remain in the NFIP portfolio\u2014private insurers will not compete against the NFIP for policies that are inadequately priced from their perspective. Private insurers, as profit-seeking entities, are unlikely independently to price flood insurance policies in a way that ensures affordable premiums as a purposeful goal, although some private policies could be less expensive than NFIP policies. It is likely that the NFIP would be left with a higher proportion of subsidized policies, which may become less viable in a competitive market. ", "The extent of such \"cherry picking\" is uncertain with some arguing that it would have little effect. However, evidence from the UK flood insurance market suggests that even in an entirely private market \"cherry picking\" can be difficult to avoid. Interviews of private insurers indicate that one of the key drivers for the introduction of Flood Re, the new UK private flood insurance scheme, was the emergence of new entrants in the flood insurance market after 2000. These new entrants had little or no existing high-flood-risk business and no commitment to continue to insure this business under the terms of the informal agreement with the government. This gave them a competitive advantage, as they could choose to select the more profitable lower-risk business. One driver for change therefore was that Flood Re would include these new entrants and force them to contribute by charging their clients for the cross-subsidy for Flood Re, leveling the playing field between the private insurers. ", "A significant increase in private flood insurance policies that \"depopulates\" the NFIP may also undermine the NFIP's ability to generate revenue, reducing the amount of past borrowing that can be repaid or extending the time required to repay the debt. If the number of NFIP policies decreases, it would likely become increasingly difficult for the remaining NFIP policyholders to subsidize policies, raising prices for the non-subsidized policyholders and thus accelerating the move to private insurance. In the long term the program could be left as a \"residual market\" for subsidized or high-risk properties. Residual market mechanisms are used in areas such as auto insurance, where consumers may be required to purchase insurance, but higher risk individuals may be unable to purchase it from regular insurers. The exact form of residual market mechanisms vary in different states and for different types of insurance, but they typically require some form of outside support either from the government or from insurers themselves. ", "In the 115 th Congress, CBO cost estimate of H.R. 2874 considered the impact of eliminating the WYO companies' non-compete agreement. CBO estimated that, over the 2017-2027 period, holders of about 690,000 properties that, under current law, would have been purchased under the NFIP would instead choose to buy private flood insurance to cover those properties if H.R. 2874 were enacted. CBO did not expect any property owners who are subsidized by the NFIP to be among those leaving the program. CBO estimated that eliminating the non-compete clause and making NFIP data publically available would lead to an increase in spending of $39 million for the 2018-2022 period and $393 million for the 2018-2017 period.", "S. 1313 would have required FEMA, within two years of enactment, to report on the extent to which the properties for which private flood insurance is purchased tend to be at a lower risk than properties for which NFIP policies are purchased (i.e., the extent of adverse selection), by detailing the risk classifications of the private flood insurance policies. S. 1313 would also have provided the FEMA Administrator the power to limit the participation of WYO companies in the broader flood insurance marketplace if the Administrator determined that private insurance adversely impacts the NFIP. "], "subsections": []}, {"section_title": "Issues for NFIP Flood Mapping and Floodplain Management", "paragraphs": ["If the number of NFIP policyholders were to decrease significantly, it might also be difficult to support the NFIP's functions of reducing flood risk through flood mapping and floodplain management. NFIP flood mapping is currently funded in two ways, through (1) annual discretionary appropriations; and (2) discretionary spending authority from offsetting money collected from the Federal Policy Fee (FPF). The FPF is paid to FEMA and deposited in the National Flood Insurance Fund (NFIF). The income from the FPF is designated to pay for floodplain mapping activities, floodplain management programs, and certain administrative expenses. About 66% of the resources from the FPF are allocated to flood mapping, with floodplain management receiving about 19% of the overall income from the FPF. To the extent that the private flood insurance market grows and policies move from the NFIP to private insurers, FEMA will no longer collect the FPF on those policies and less revenue will be available for floodplain mapping and management. Concerns have been raised about maintaining the activities funded by the FPF, with some stakeholders arguing that a form of FPF equivalency, or some form of user fee, should be applied to private flood insurance. In the 115 th Congress, both S. 1313 and S. 1368 contained mechanisms by which private insurance companies could have contributed to the costs of floodplain mapping in lieu of paying the FPF. ", "Enforcement of floodplain management standards could be more challenging within a private flood insurance system, as the current system makes the availability of NFIP insurance in a community contingent on the implementation of floodplain management standards. For example, the Association of State Floodplain Managers (ASFPM) has expressed concerns that the widespread availability of private flood insurance could lead some communities to drop out of the NFIP and rescind some of the floodplain management standards and codes they had adopted, leading to more at-risk development in flood hazard areas. ASFPM suggested that this issue could be addressed by allowing private policies to meet the mandatory purchase requirement only if they were sold in participating NFIP communities. FEMA suggested that access to federal disaster assistance could be made partially contingent on the adoption of appropriate mitigation policies, but noted that this approach could be politically challenging. However, a positive consequence is that government investment in mitigation could increase private market participation by reducing the flood exposure of high-risk properties and thereby increasing the number of properties that private insurers would be willing to cover."], "subsections": []}]}, {"section_title": "Concluding Comments", "paragraphs": ["The policy debate surrounding NFIP and private insurance has evolved over the last few years. The discussion in 2012 was framed in the context of privatization of the NFIP and actions that might be taken to create conditions for private sector involvement. One of the primary interests of Congress at the time was to reduce the federal government's role in flood insurance by transferring its exposure to the private sector, with an expectation that a realignment of roles would allow the federal government to focus on flood risk mitigation while private markets focused on providing flood insurance. One argument for increasing private sector participation in the U.S. flood market was that competition should lead to innovation in flood risk analytics and modeling and produce new flood insurance products that would better meet customer needs and lead to greater levels of insurance market penetration. In fact, private sector flood risk analytics and modeling have improved significantly before any sizable entry of private insurers into the market. Another argument was that, in contrast to the NFIP, which cannot diversify its portfolio of flood risk by insuring unrelated risks, the insurance industry can diversify catastrophic risks with uncorrelated or less correlated risks from other perils, other geographic regions, non-catastrophic risks, or risks from unrelated lines of business.", "FEMA considered a range of concrete steps by which the barriers to private sector involvement could be addressed. One of these has been introduced: the purchase of reinsurance. Two others are in progress: the reduction of premium subsidies for some properties and reporting to make premium subsidies and cross-subsidies more transparent. Although BW-12 directed FEMA to make a recommendation about the best manner in which to accomplish the privatization of the NFIP, FEMA presented the report without a recommendation, arguing that any privatization strategy is complex and involves significant policy decisions that would require input from a variety of stakeholders. They concluded that there is no single, clear solution; it is heavily politicized; and harsh criticism of any change is inevitable.", "Currently the discussion is more focused on sharing risk, with the recognition that neither the NFIP nor the private sector is likely to be able to write all of the policies needed to cover all of the flood risk in the United States. FEMA has identified the need to increase flood insurance coverage across the nation as a major priority for NFIP reauthorization, and this also forms a key element of their 2018-2022 strategic plan. FEMA has developed a \"moonshot\" with the goal of doubling flood insurance coverage by 2023 through the increased sale of both NFIP and private policies. ", "The 2017 hurricane season highlighted the flood insurance gap in the United States, where many people that are exposed to flood risk are not covered by flood insurance. For example, in Texas and Florida, less than a third of the flooded residential structures in SFHAs were insured, and no more than 10%-12% of flooded residential structures outside the SFHA were insured. Recent floods have also demonstrated that insured flood victims generally receive significantly more from NFIP flood insurance than from FEMA Individual Assistance (IA). For example, in the 2015 South Carolina floods, the average NFIP claim was $35,172, while the average IA payment was about $3,199. In the 2016 Louisiana floods, the average NFIP claim was $91,507, while the average IA payment was about $9,349. For Hurricane Harvey, the average NFIP claim was $116,823, while the average IA payment in Texas was about $4,426. For Hurricane Irma, the average NFIP claim in Florida was $51,773, while the average IA payment was about $1,315.", "FEMA's view is that both the NFIP and an expanded private market will be needed to increase flood insurance coverage for the nation and reduce uninsured flood losses. However, the private market is unlikely to expand significantly without congressional action. The concerns of private companies related to the mandatory purchase requirement and continuous coverage and the concerns of some Members of Congress about adverse selection are among the most pressing issues likely to be addressed in any long-term NFIP reauthorization. "], "subsections": [{"section_title": "Appendix. Provisions Related to Private Flood Insurance in Legislation in the 115th Congress", "paragraphs": ["The provisions in the 115 th Congress legislation that related to private flood insurance, and the issues raised as barriers to private sector involvement, are summarized below and compared side-by-side in Table A-1 . All of the bills also included provisions related to administrative reforms of the NFIP, some of which may be relevant to private insurance companies, which are not described in this report.", "H.R. 2874 , 21 St Century Flood Reform Act", "H.R. 2874 , Section 102, would have phased out the pre-FIRM subsidy for primary residences at a rate of 6.5%-15% (compared to the current rate of 5%-18%), except that in the first year after enactment, the minimum rate increase would have been 5%; in the second year after enactment, the minimum rate increase would have been 5.5%; and in the third year after enactment, the minimum rate increase would have been 6%. The phaseout of the pre-FIRM subsidy for other categories of properties (non-primary residences, non-residential properties, severe repetitive loss properties, properties with substantial cumulative damage, and properties with substantial damage or improvement after July 6, 2012) would have remained at 25%. This section would have made it possible, but not certain, for FEMA to raise premiums more rapidly than under current law by increasing the minimum rate at which the pre-FIRM subsidy could be removed for primary residences. H.R. 2874 , Section 201, would have revised the definition of private flood insurance previously defined in BW-12. This section would have struck existing statutory language describing how private flood insurance must provide coverage \"as broad as the coverage\" provided by the NFIP. Instead, the new definition would have relied on whether the insurance policy and insurance company were in compliance in the individual state (as defined to include certain territories and the District of Columbia) where the policy applies. Further, \"private flood insurance\" would have been specifically defined as including surplus lines insurance. Though the majority of regulation of private flood insurance would have rested with individual states, federal regulators would have been required to develop and implement requirements relating to the financial strength of private insurance companies from which such entities and agencies accepted private insurance, provided that such requirements not affect or conflict with any state law, regulation, or procedure concerning the regulation of the business of insurance. The dollar amount of coverage would still have had to meet federal statutory requirements and requirements relating to the financial strength of such companies offering flood insurance could still be implemented. This section would also have specified that if a property owner purchased private flood insurance and decided then to return to the NFIP, they would be considered to have maintained continuous coverage. This section would have allowed private insurers to offer policies that provide coverage that might differ significantly from NFIP coverage, either by providing greater coverage or potentially providing reduced coverage that could leave policyholders exposed after a flood. H.R. 2874 , Section 202, would have applied the mandatory purchase requirement only to residential improved real estate, thereby eliminating the requirement for other types of properties (e.g., all commercial properties) to purchase flood insurance from January 1, 2019. This would likely have affected the policy base of the NFIP by reducing the number of commercial properties covered. However, it is uncertain how many would have elected to forgo insurance coverage (public or private) entirely. H.R. 2874 , Section 203, would have eliminated the non-compete requirement in the WYO arrangement with FEMA that restricted WYO companies from selling both NFIP and private flood insurance policies. This would have allowed the WYO companies to offer their own insurance policies while also receiving reimbursement for their participation in the WYO program to administer the NFIP policies. This section was largely pre-empted by FEMA's proposed changes for FY2019 to remove the WYO non-compete clause. H.R. 2874 , Section 204, would have required FEMA to make publicly available all data, models, assessments, analytical tools, and other information that is used to assess flood risk or identify and establish flood elevations and premiums. This section would also have required FEMA to develop an open-source data system by which all information required to be made publicly available may be accessed by the public on an immediate basis by electronic means. Within 12 months after enactment, FEMA would have been required to establish and maintain a publicly searchable database that provides information about each community participating in the NFIP. This section provided that personally identifiable information would not have been made available; the information provided would be based on data that identifies properties at the zip code or census block level. H.R. 2874 , Section 506, would have established that the allowance paid to WYO companies would not be greater than 27.9% of the chargeable premium for such coverage. It would also have required FEMA to reduce the costs to WYO companies participating in the program. H.R. 2874 , Section 507, would have increased the civil penalties from $2,000 to $5,000 on federally regulated lenders for failure to comply with enforcing the mandatory purchase requirement. In addition, the federal entities for lending regulations, in consultation with FEMA, would have been required jointly to update and reissue the guidelines on compliance with mandatory purchase. H.R. 2874 , Section 513, would have required GAO to issue a report, within 18 months of enactment, on the implementation and efficacy of the mandatory purchase requirement. H.R. 2874 , Section 511, would have required that, no later than 18 months after enactment, FEMA begin to annually transfer a portion of the risk of the NFIP to the private reinsurance or capital markets to cover a FEMA-determined probable maximum loss target expected to occur in the fiscal year.", "S. 1313 , Flood Insurance Affordability and Sustainability Act of 2017", "S. 1313 , Section 101, would have required annual transfer of a portion of the risk of the NFIP to the private reinsurance or capital markets in an amount sufficient to maintain the ability of the program to pay claims, and limit the exposure of the NFIP to potential catastrophic losses from extreme events. S. 1313 , Section 102, would have required FEMA to conduct a study in coordination with the National Association of Insurance Commissioners to address how to increase participation in flood insurance coverage through programmatic and regulatory changes, and report to Congress no later than 18 months after enactment. This study would have been required to include but not be limited to options to (1) expand coverage beyond the SFHA to areas of moderate flood risk; (2) automatically enroll customers in flood insurance while providing customers the opportunity to decline enrollment; and (3) create bundled flood insurance coverage that diversifies risk across multiple-peril insurance. S. 1313 , Section 401, would have allowed any state-approved private insurance to satisfy the mandatory purchase requirement, and allowed private flood insurance to count as continuous coverage. This section would also have changed the amount of insurance required for both private flood insurance policies and NFIP policies in order to satisfy the mandatory purchase requirement. S. 1313 , Section 402, would have provided temporary authority during the first two years after enactment for WYO companies to sell private flood insurance for certain properties (e.g., non-residential properties, severe repetitive loss properties, business properties, or any property that has incurred flood-related damage in which the cumulative amount of payments equaled or exceeded the fair market value of the property) with the possibility of expanded participation after two years and further study. S. 1313 , Section 403, would have required FEMA to study the feasibility of selling or licensing the use of historical structure-specific NFIP claims data to non-governmental entities, while reasonably protecting policyholder privacy, and report within a year of enactment. This section would also have authorized FEMA to sell or license claims data as the Administrator determines is appropriate and in the public interest, with the proceeds to be deposited in the National Flood Insurance Fund (NFIF). S. 1313 , Section 404, would have required an insurance company issuing a policy for private flood insurance to impose and collect an annual surcharge equivalent to the Federal Policy Fee (FPF), to be transferred to the FEMA Administrator and deposited in the NFIF. S. 1313 , Section 602, would have required FEMA, not later than one year from enactment, to create and maintain a publicly searchable database that includes the aggregate number of claims filed each month, by state; the aggregate number of claims paid in part or in full; and the aggregate number of claims denials appealed, denials upheld on appeal, and denials overturned on appeal; without making personally identifiable information available.", "S. 1368 , Sustainable, Affordable, Fair, and Efficient [SAFE] National Flood Insurance Program Reauthorization Act of 2017", "S. 1368 , Section 302, would have established that the total amount of FEMA reimbursement paid to WYO companies could not be greater than 22.46% of the chargeable premium for such coverage. S. 1368 , Section 303, would have required FEMA to develop a fee schedule based on recovering the actual costs of providing Flood Insurance Rate Maps (FIRMs) and charge any private entity an appropriate fee for use of such maps. This requirement would have provided a mechanism by which private insurance companies could contribute to the costs of floodplain mapping in lieu of paying the FPF. S. 1368 , Section 304, would have required FEMA, within 12 months of enactment, to develop a schedule to determine the actual costs of WYO companies, including claims adjusters and engineering companies, and reimburse the WYO companies only for the actual costs of the service or products. S. 1368 , Section 410, would have required FEMA to conduct a study and report to Congress within one year of enactment on the percentage of properties with federally backed mortgages located in SFHAs that satisfy the mandatory purchase requirement, and the percentage of properties with federally backed mortgages located in the 500-year floodplain that would satisfy the mandatory purchase requirement if the mandatory purchase requirement applied to such properties.", "S. 1571 , National Flood Insurance Program Reauthorization Act of 2017", "S. 1571 , Section 302, would have specified that FEMA may consider any form of risk transfer, including traditional reinsurance, catastrophe bonds, collateralized reinsurance, resilience bonds, and other insurance-linked securities. S. 1571 , Section 303, would have required the federal banking regulators to conduct an annual study regarding the rate at which persons who are subject to the mandatory purchase requirement are complying with that requirement. Section 303 would also have required FEMA to conduct an annual study of participation rates and financial assistance to individuals who live in areas outside SFHAs. "], "subsections": []}]}]}}
{"id": "R44801", "title": "Stafford Act Assistance and Acts of Terrorism", "released_date": "2019-01-16T00:00:00", "summary": ["The Robert T. Stafford Disaster Relief and Emergency Assistance Act (the Stafford Act) authorizes the President to issue two types of declarations that could potentially provide federal assistance to states and localities in response to a terrorist attack: a \"major disaster declaration\" or an \"emergency declaration.\" Major disaster declarations authorize a wide range of federal assistance to states, local governments, tribal nations, individuals and households, and certain nonprofit organizations to recover from a catastrophic event. Major disaster declarations also make Small Business Administration (SBA) disaster loans available to eligible businesses and households. Emergency declarations authorize a more limited range of federal assistance to protect property and public health and safety, and to lessen or avert the threat of a major disaster. Only private nonprofit organizations are eligible for disaster loans under an emergency declaration.", "The Stafford Act has been used to provide assistance in response to terrorist attacks in the past including the 1995 bombing of the Alfred P. Murrah Building in Oklahoma City, the September 11, 2001, attacks, and the 2013 Boston Marathon attack. Nevertheless, the tactics used in recent incidents such as the 2015 San Bernardino, CA, and the 2016 Orlando, FL, mass shootings, and the 2016 Ohio State University vehicular and knife attack, have brought to light two main challenges that might prevent certain types of terrorist incidents from receiving the wider assistance provided under a major disaster declaration:", "the major disaster definition lists specific incident types that are eligible for federal assistance. Past terrorist incidents were considered major disasters, in part, because they resulted in fires and explosions. Incidents without a fire or an explosion may not meet the definition of a major disaster; and the Federal Emergency Management Agency's (FEMA) recommendation to the President to issue a major disaster declaration is mainly based on damage amounts to public infrastructure compared to the state's population. Terrorist incidents with a large loss of life but limited damage to public infrastructure may not meet this criterion.", "Some may argue that terrorist incidents warrant the wider range of assistance provided by a major disaster declaration, and advocate for changes to the Stafford Act and FEMA policies to make all acts of terrorism eligible for major disaster assistance. Others may disagree and argue that Stafford Act should not be altered for the following reasons:", "regardless of cause, state and local governments should be the main source of assistance if damages are limited; if the incident does not qualify for major disaster assistance, it could still be eligible for limited assistance under an emergency declaration.", "Advocates of changing the Stafford Act may argue that emergency declaration assistance is too limited. For example, parts of FEMA's Individual Assistance (IA) program, which provides various forms of help for families and individuals, are not available without a major disaster declaration. Another concern is the limited availability of SBA disaster loans under an emergency declaration. Advocates might therefore argue that changes to the Stafford Act are needed to make it easier for certain terror attacks to qualify for major disaster assistance. These include", "expanding the major disaster definition to include terror incidents that do not involve fires and explosions; requiring FEMA to use additional metrics when making major disaster recommendations; and/or extending the availability of certain IA programs and SBA disaster loans under an emergency declaration.", "This report provides an overview of emergency and major disaster declarations and explains how they might be used in the aftermath of a terrorist incident that does not involve a fire or an explosion, such as high casualty mass shootings or chemical gas attacks. This report also provides an overview of Stafford Act assistance provided for past terrorist incidents.", "This report will be updated as events warrant."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["Congress has been interested in disaster relief since the earliest days of the republic. On February 19, 1803, the 7 th Congress passed the first known federal disaster assistance legislation, providing debt relief to the residents of Portsmouth, NH, following a December 26, 1802, fire that burned down most of the town (\"A Bill for the Relief of the Sufferers by Fire, in the Town of Portsmouth,\" commonly known as the Congressional Act of 1803). ", "Over the years, Congress has authorized the expansion of federal disaster assistance to individuals, businesses, and places (both for humanitarian reasons and as a means to enhance interstate commerce). For example", "During the 1930s, Congress passed legislation authorizing the Reconstruction Finance Corporation to make disaster loans for the repair and reconstruction of certain public facilities following an earthquake, and later, other types of disasters; and the Bureau of Public Roads to provide funding for highways and bridges damaged by natural disasters. During the 1950s, Congress passed legislation authorizing the President to respond to major disasters. During the 1960s, Congress passed legislation expanding the U.S. Army Corps of Engineers' authority to implement flood control projects. During the 1970s, Congress passed legislation authorizing federal loans and tax assistance to individuals affected by disasters, as well as federal funding for the repair and replacement of public facilities; and the establishment of the presidential disaster declaration process. During the 1980s, Congress passed legislation authorizing numerous changes to federal disaster assistance programs administered by the Federal Emergency Management Agency (FEMA), which had been created by Executive Order 12127 on March 31, 1979, to, among other activities, coordinate federal disaster relief efforts.", "Since the 1980s, Congress has focused on the oversight of FEMA's implementation of federal disaster relief efforts and assessing the Robert T. Stafford Disaster Relief and Emergency Assistance Act (of 1988), hereinafter the Stafford Act, as amended (42 U.S.C. 5721 et seq.) to determine if its provisions meet current needs. One such potential need is providing disaster assistance following a terrorist attack. "], "subsections": [{"section_title": "Stafford Act Assistance in Response to Terrorism", "paragraphs": ["The Stafford Act authorizes the President to issue two types of declarations that could potentially provide federal assistance to states and localities in response to a terrorist attack: a \"major disaster declaration\" or an \"emergency declaration.\" Major disaster declarations authorize a wide-range of federal assistance to states, local governments, tribal nations, individuals and households, and certain nonprofit organizations to aid recovery from a catastrophic event. Major disaster declarations must be requested by the state governor or tribal leader. Emergency declarations authorize a more limited range of federal assistance and are issued by the President to protect property and public health and safety and to lessen or avert the threat of a major disaster. In most cases, the state governor or tribal leader must request an emergency declaration; however, under 501(b) of the Stafford Act, the President has authority to issue an emergency declaration without a gubernatorial or tribal request under specified conditions. Examples of these types of emergency declarations with respect to terrorist incidents include the April 19, 1995, bombing of the Alfred P. Murrah Building in Oklahoma City, and the September 11, 2001, attack on the Pentagon. In each instance, the emergency declaration was followed by a major disaster declaration.", "While the Stafford Act has been used to provide assistance in response to terrorist attacks in the past, recent incidents such as the mass shootings that occurred in 2015 and 2016 in San Bernardino, CA, and Orlando, FL, respectively, and the 2016 vehicular attacks in Nice, France, and Ohio State University may have brought to light some potential shortcomings in the Stafford Act. That is, certain terror attacks may not meet the criteria of a major disaster for two reasons. First, depending on the mechanism used in the attack, certain terror incidents may not meet the legal definition of a major disaster. Of interest here, the Stafford Act defines a major disaster as \"any natural catastrophe (including any hurricane, tornado, storm, high water, wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, or drought), or, regardless of cause, any fire, flood, or explosion, in any part of the United States, which in the determination of the President causes damage of sufficient severity and magnitude to warrant major disaster assistance.\" The list of incidents that qualify for a major disaster declaration is specifically limited, and it is not clear if a terror attack would meet the legal definition of a major disaster if the incident involved something other than a fire or explosion.", "Meeting the definition of a major disaster is a necessary but insufficient condition for the receipt of major disaster assistance. The incident's cost must also be beyond the capacity of the state and local government. When an incident occurs, FEMA meets with the state to assess damage costs to affected homes and public infrastructure. Damages to public infrastructure are particularly important because this amount is compared to the state's population. This comparison is called the \"per capita threshold.\" FEMA uses the threshold to assess state and local government capacity. In general, FEMA will recommend that the President declare a major disaster if the incident meets or exceeds the per capita threshold. It is conceivable that a terrorist incident could cause substantial loss of life but cause little or no damage to homes and public infrastructure. This lack of damage (to public infrastructure) may disqualify these incidents from receiving the wider range of assistance provided under a major disaster declaration.", "With respect to terrorism, some may view the Stafford Act's current framework adequate and oppose efforts to alter it. Their reasons are twofold. First, while terrorist incidents such as mass shootings can be devastating in terms of loss of life and impact on national morale, some argue that a major disaster should not be declared for terrorist incidents that do not cause enough damage to public infrastructure to warrant federal assistance. State and local governments, as well as insurance coverage, they say, should be the main sources of assistance if damages are limited. Second, they may argue that terror incidents that do not meet the criteria of a major disaster could be eligible for Stafford Act assistance under an emergency declaration. In contrast to the prescribed definition of incidents that qualify as a major disaster, an emergency is defined more broadly to include \"any occasion or instance for which, in the determination of the President, federal assistance is needed to supplement State and local efforts and capabilities to save lives and to protect property and public health and safety, or to lessen or avert the threat of a catastrophe in any part of the United States.\"", "Some might argue that an emergency declaration would provide adequate assistance to individuals and households after a terrorist incident. For example, as outlined in Section 502 of the Stafford Act, an emergency declaration may include Section 408 assistance. Some examples of Section 408 assistance include", "FEMA's Individuals and Household Program (IHP), which provides housing and grants to individuals and families; and Other Needs Assistance (ONA) grants, which is part of the IHP program in the form of grants to families and individuals. These grants can cover items including medical and dental expenses caused by the incident as well as funeral expenses. ONA grants may also cover certain necessary expenses such as the replacement of personal property and other expenses.", "Others may argue that most acts of terrorism warrant the wide range of assistance provided by a major disaster declaration. They would argue that the assistance provided under an emergency declaration is too limited. For example, the Crisis Counseling program is not provided under an emergency declaration. The Crisis Counseling program may seem especially appropriate to a terrorist incident given the assistance it provides for what is likely a wrenching event for those involved. ", "In addition, the type of declaration determines what types of Small Business Administration (SBA) disaster loans are available. In general, homeowners, renters, businesses, and nonprofit organizations become eligible for disaster loans under a major disaster declaration. In contrast, typically only private nonprofit organizations are eligible for disaster loans under an emergency declaration. Finally, beyond the monetary assistance provided by a major disaster declaration, some would argue that major disaster declarations are important symbolic gestures of federal support to states and localities."], "subsections": []}]}, {"section_title": "Declaration Procedure", "paragraphs": ["The Stafford Act requires that all major disaster declaration requests be made by state governors or tribal leaders. Such requests must be made on the basis that the incident is of such severity and magnitude that effective response is beyond the capability of the affected state and local government. The request for a declaration begins with a letter to the President from the governor or tribal leader. Included with the letter are supplemental material and any relevant information about the incident. The letter also describes what types of federal assistance is being requested. In the case of a request for a major disaster declaration, a particularly important piece of information accompanying the letter is the Preliminary Damage Assessment (PDA). PDAs provide public infrastructure damage estimates (as well as estimated damage to households). By regulation, FEMA compares this damage estimate against the state's population. In general, FEMA will make a recommendation to the President that a major disaster be declared if public infrastructure damages exceed $1.42 per capita. This formula is known as the \"per capita threshold.\" ", "A request for an emergency declaration follows the same basic regulatory procedures highlighted above for major disasters with some nuances. Similar to a request for a major disaster declaration, the basis for an emergency declaration is that the incident is of such severity and magnitude that effective response is beyond the capability of the affected state and local government. FEMA, however, does not apply any formulas\u2014including the per capita threshold\u2014in regulations to make emergency declaration recommendations to the President. ", "While there are differences between the two types of declarations, the ultimate decision to declare and grant federal assistance for emergencies and major disasters rests solely with the President."], "subsections": []}, {"section_title": "Major Disaster Declaration Criteria", "paragraphs": ["In general, an incident must meet three criteria to be eligible for a major disaster declaration: (1) definition, (2) unmet need, and (3) state action. "], "subsections": [{"section_title": "Definition", "paragraphs": ["The Stafford Act defines a major disaster as", "any natural catastrophe (including any hurricane, tornado, storm, high water, wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, or drought), or, regardless of cause, any fire, flood, or explosion, in any part of the United States, which in the determination of the President causes damage of sufficient severity and magnitude to warrant major disaster assistance under this chapter to supplement the efforts and available resources of states, local governments, and disaster relief organizations in alleviating the damage, loss, hardship, or suffering caused thereby.", "The definition of a major disaster can be applied in several ways. The definition could be applied prescriptively. In this view, the definition would be considered as an itemized list of incidents eligible for federal assistance under the Stafford Act. As a result, certain incidents are not eligible for assistance because the definition is taken as verbatim and all inclusive. Another approach is to consider the definition as open to interpretation. In this view, the list of incidents is seen as providing examples of some of the incidents that could be considered a major disaster. Alternatively, the definition could be seen as a blend of the two approaches. The list of natural disasters might be seen as open-ended whereas human caused incidents are limited to the itemized list of \"fire, flood, or explosion.\" Depending on the interpretation, the definition may limit certain incidents from receiving federal assistance. ", "The discussion regarding whether an incident would be denied assistance due to definitional limitations is hypothetical. There have been incidents denied for definitional reasons (such as the Flint water contamination incident) but thus far a Governor has not requested a major disaster for a terrorist incident and denied assistance based on the definition of a major disaster. It is unclear if the definition would be fatal to a request for a major disaster declaration. Ultimately, the President has the discretion to determine what incidents that meet this definition are eligible for a major disaster declaration. "], "subsections": []}, {"section_title": "Unmet Need", "paragraphs": ["In addition to meeting the definition of a major disaster, the incident must result in damages significant enough to exceed the capabilities and resources of state and local governments. Exceeding state and local capabilities and resources is generally considered as the state's unmet need. Under the Stafford Act:", "All requests for a declaration by the President that a major disaster exists shall be made by the Governor of the affected state. Such a request shall be based on a finding that the disaster is of such severity and magnitude that effective response is beyond the capabilities of the state and the affected local governments and that federal assistance is necessary.", "In general, FEMA assesses the degree of damage for an incident to help determine unmet need. FEMA considers six general areas:", "estimated cost of the assistance; localized impacts; insurance coverage; hazard mitigation; recent multiple disasters; and other federal assistance programs.", "While all of these factors are considered when assessing an incident's worthiness for federal assistance, the estimated cost of assistance is perhaps the most critical because it contains the per capita threshold mentioned earlier in this report, as well as the unmet needs of families and individuals. Attacks such as the 2016 Pulse nightclub shooting in Florida and the 2015 San Bernardino, CA, shooting had a high number of fatalities with relatively low damages to public infrastructure. Limited public infrastructure damages may make the per capita threshold difficult to reach\u2014particularly for highly populated states. "], "subsections": []}, {"section_title": "State Action", "paragraphs": ["The state or tribal nation must implement its emergency plan, dedicate sufficient resources to respond to the incident, and agree to cost-sharing requirements, as follows:", "As part of such request, and as a prerequisite to major disaster assistance under this chapter, the Governor shall take appropriate response action under state law and direct execution of the state's emergency plan. The Governor shall furnish information on the nature and amount of State and local resources which have been or will be committed to alleviating the results of the disaster, and shall certify that, for the current disaster, state and local government obligations and expenditures (of which state commitments must be a significant proportion) will comply with all applicable cost-sharing requirements of this chapter.", "As conceptualized in Figure 1 , an incident is eligible for a disaster declaration if all three criteria intersect. An incident that does not meet the definition of a major disaster, and/or does not have unmet need would not have intersecting criteria and may have more difficulty receiving a major disaster declaration. "], "subsections": []}]}, {"section_title": "Major Disaster Assistance", "paragraphs": [], "subsections": [{"section_title": "FEMA Assistance", "paragraphs": ["The assistance provided for a major disaster declaration generally takes three forms: Public Assistance (PA), Individual Assistance (IA), and Hazard Mitigation Assistance (HMA). PA addresses the state or tribe's essential needs but concentrates on repairing damage to infrastructure (public roads, buildings, etc.). IA helps families and individuals. IA can be in the form of temporary housing assistance and grants to address post-disaster needs (such as replacing furniture, clothing and other items). It may also include crisis counseling and disaster unemployment benefit. HMA provides grant funding to the state for mitigation projects. HMA does not necessarily need to mitigate risks from the type of disaster that was declared. Rather, HMA can be used for mitigation projects identified before the declaration was issued. ", "FEMA, however, does not exclusively perform all disaster response and recovery operations for the federal government. The President has the authority to direct any federal agency to use its authorities and resources to support state and local response and recovery efforts, primarily through Sections 402, 403, and 502 of the Stafford Act. In general, when a declaration is declared, FEMA coordinates federal entities and organizations that are involved in the incident by \"assigning\" missions to relevant agencies to address a state's request for federal assistance or support overall federal operations pursuant to, or in anticipation of, a Stafford Act declaration. The activities carried out by other agencies through Mission Assignments are generally reimbursed by FEMA through the Disaster Relief Fund (DRF). For example, FEMA may request the Department of Health and Human Services to establish and operate a shelter co-located with a federal medical station to support non-medical caregivers and family members accompanying patients being treated at the station."], "subsections": []}, {"section_title": "SBA Disaster Loan Program", "paragraphs": ["Major disaster declarations also put the Small Business Administration (SBA) Disaster Loan Program into effect. The loan program provides three main types of loans for disaster-related losses: (1) Home and Personal Property Disaster Loans, (2) Business Physical Disaster Loans, and (3) Economic Injury Disaster Loans (EIDL). Home Physical Disaster Loans provide up to $200,000 to repair or replace disaster-damaged primary residences. Personal Property Loans provide up to $40,000 to replace personal items such as furniture and clothing. Business Physical Disaster Loans provide up to $2 million to help businesses of all sizes and nonprofit organizations repair or replace disaster-damaged property, including inventory and supplies. EIDLs provide up to $2 million to help meet financial obligations and operating expenses that could have been met had the disaster not occurred. Loan proceeds can only be used for working capital necessary to enable the business or organization to alleviate the specific economic injury and to resume normal operations. Loan amounts for EIDLs are based on actual economic injury and financial needs, regardless of whether the business suffered any property damage.", "Major disaster declarations that include both IA and PA make all three loan types available. Only private non-profit organizations are eligible for SBA physical disaster loans and EIDL, if the major disaster declaration only provides PA. ", "It is important to note that SBA disaster loans are usually the only type of federal assistance available to businesses after a terror attack because FEMA does not provide assistance to the private sector."], "subsections": []}]}, {"section_title": "Emergency Declaration Criteria", "paragraphs": ["The three criteria for an incident to be eligible for an emergency disaster declaration include (1) definition, (2) unmet need, and (3) state action."], "subsections": [{"section_title": "Definition", "paragraphs": ["The Stafford Act defines an emergency as", "any occasion or instance for which, in the determination of the President, federal assistance is needed to supplement State and local efforts and capabilities to save lives and to protect property and public health and safety, or to lessen or avert the threat of a catastrophe in any part of the United States.", "While the definition of a major disaster includes a list of incidents that could be considered a major disaster, emergencies are defined more broadly. Consequently, a terrorist attack such as a mass shooting or other nontraditional attack (such as using a vehicle as a weapon) under consideration as an \"emergency\" would likely not face the definitional challenge posed by the \"major disaster\" definition. "], "subsections": []}, {"section_title": "Federal Responsibility", "paragraphs": ["The Stafford Act procedure for an emergency declaration can be particularly useful when a terrorist incident involves federal property or a federal program is Section 501(b) of the act:", "The President may exercise any authority vested in him by section 502 or section 503 with respect to an emergency when he determines that an emergency exists for which the primary responsibility for response rests with the United States, because the emergency involves a subject area for which, under the Constitution or laws of the United States, the United States exercises exclusive or preeminent responsibility and authority. In determining whether or not such an emergency exists, the President shall consult the Governor of any affected state, if practicable. The President's determination may be made without regard to subsection (a).", "While Presidents have rarely invoked this authority, it could provide a path for rapid action and certain forms of terrorism might be easily and justly defined as a federal responsibility. And as noted previously, emergency declarations can later be converted to major disaster declarations. The use of Section 501(b) is infrequent and has been invoked on three occasions: (1) the Alfred P. Murrah Federal Building bombing in Oklahoma City in 1995, (2) the 2003 Space Shuttle Columbia explosion, and (3) the terrorist attack on the Pentagon on September 11, 2001.", "It could be argued that the usefulness of 501(b) would be limited to certain situations that involve areas of federal responsibility (e.g., federal properties or programs). It could be further argued that that the use of Section 501(b) would be inappropriate, if the incident occurred in a business setting or an area of state and local jurisdiction. Others might disagree and argue that all terrorist incidents are a federal responsibility regardless of where they occur in the United States. According to this view, the 501(b) authority could be useful in the initial stages of a terrorist event since it provides the President with the discretion to act quickly without having to wait for a gubernatorial request for assistance. Others might be concerned that Section 501(b) might be invoked too often if applied to any situation that involved terrorism. For example, they may argue that it could lead to an expansion of federal assistance if routinely used in terror-related mass shootings."], "subsections": []}, {"section_title": "Unmet Need", "paragraphs": ["In general, similar to a major disaster, an incident must result in damages significant enough to exceed the capabilities and resources of state and local governments. Under the Stafford Act", "All requests for a declaration by the President that an emergency exists shall be made by the Governor of the affected state. Such a request shall be based on a finding that the situation is of such severity and magnitude that effective response is beyond the capabilities of the state and the affected local governments and that federal assistance is necessary.", "As mentioned previously, the President has the authority to issue an emergency declaration in certain circumstances without a gubernatorial or tribal request. Thus, in certain circumstances, the response does not need to be beyond the capabilities of state and local governments since the response could be considered a uniquely federal responsibility. "], "subsections": []}, {"section_title": "State Action", "paragraphs": ["As with a major disaster, the state or tribal nation must implement its emergency plan, dedicate sufficient resources to respond to the incident, and agree to cost-sharing requirements, as follows:", "As a part of such request, and as a prerequisite to emergency assistance under this act, the Governor shall take appropriate action under State law and direct execution of the State's emergency plan. The Governor shall furnish information describing the state and local efforts and resources which have been or will be used to alleviate the emergency, and will define the type and extent of federal aid required. Based upon such Governor's request, the President may declare that an emergency exists.", "As illustrated in Figure 2 , an incident is eligible for an emergency declaration if all three criteria intersect. An incident that does not meet the definition of a major disaster, or does not have unmet need would not have intersecting criteria and may have more difficulty receiving a major disaster declaration. "], "subsections": []}]}, {"section_title": "Emergency Declaration Assistance", "paragraphs": [], "subsections": [{"section_title": "FEMA Assistance", "paragraphs": ["Emergency declarations authorize activities that can help states and communities carry out essential services and activities that might reduce the threat of future damage. Emergency declarations authorize less assistance than a major disaster. Emergency declarations do not provide assistance for repairs and replacement of public infrastructure or nonprofit facilities. However, they do provide emergency services under the Stafford Act and other actions that might lessen the threat of a major disaster.", "As with major disaster declarations, the President has the authority under an emergency declaration to direct any federal agency to use its authorities and resources in support of state and local response and recovery efforts under 502 of the Stafford Act. Also, the emergency authority includes Section 408 which means that housing assistance and grants for individuals and families could be provided under an emergency declaration."], "subsections": []}, {"section_title": "SBA Disaster Loan Program", "paragraphs": ["Emergency declarations also trigger the SBA Disaster Loan Program, albeit usually on a limited basis. All three SBA disaster loan types are available when the emergency declaration includes IA. Emergency declarations, however, rarely provide IA. Typically, limited PA is provided. For example, 281 emergences were declared from 1990 to 2015. Of these, 18 included IA. SBA disaster loans are generally only available to private, non-profit organizations for \"PA-only\" declarations. Some may see this as a limitation. For example, if an incident affected a business (e.g., malls, movie theaters, or nightclubs), those businesses would not be eligible for an SBA disaster loan under a PA-only emergency declaration. "], "subsections": []}]}, {"section_title": "Selected Examples of Stafford Act Assistance for Terror Incidents", "paragraphs": ["The following section provides information on past terror attacks that have received federal assistance under the Stafford Act, including a general description of what types of assistance was provided for the incident. It also provides information on the Orlando Pulse nightclub shooting. It is included in this discussion because the governor requested Stafford Act assistance. The San Bernardino and Ohio State attacks are not included because Stafford Act declarations were not requested. Table 1 provides a comparison of each incident. It is notable that in all but one case, the declaration was issued on the same day as the attack. "], "subsections": [{"section_title": "Oklahoma City Bombing", "paragraphs": ["An emergency declaration was issued to Oklahoma for the Alfred P. Murrah Federal Building Bombing on April 19, 1995\u2014the day of the bombing. The emergency declaration permitted FEMA to take vital actions necessary just hours following the tragedy. This principally involved bringing in FEMA's Urban Search and Rescue (USAR) teams. USAR Task Forces began arriving in Oklahoma City the afternoon of April 19, 1995. In addition, the emergency declaration also provided the sources that allowed the debris removal process to begin. Debris removal, however, was a challenging operation since the area to be cleared was also a Federal Bureau of Investigation (FBI) crime scene and new protocols were needed to accomplish response operations in that unique environment. As then-FEMA Director James Lee Witt explained:", "Here were two earnest, dedicated, well-trained groups working as hard as they could\u2014and yet there was an inherent conflict between them. In clearing out the debris, the search and rescue people needed to proceed slowly, carefully. The FBI wanted to pick up the pace, to get their hands on crime evidence immediately\u2014and they wanted that evidence not to be contaminated. Each group was under tremendous pressure.", "A major disaster declaration was later issued for the incident on April 26, 1995. This action permitted, at the request of the governor, the activation of the Crisis Counseling program. This program provides funding to state and local mental health authorities to provide service to survivors affected by a disaster incident. Since the great majority of damage was to federal facilities, FEMA's expenditures were limited for this event since FEMA aid under the Stafford Act is directed toward the losses of state, tribal and local governments. Aid to families and individuals (which includes crisis counseling) was the largest program expenditure at $5.5 million.", "SBA approved 163 disaster loans for $7.3 million. This included 71 approved home disaster loans for $452,700 and 92 business disaster loans for $6.8 million."], "subsections": []}, {"section_title": "September 11th Terrorist Attacks", "paragraphs": ["Following the attacks on the Twin Towers, a major disaster declaration was issued on September 11, 2001 for the state of New York. The following day an emergency was declared for Virginia, site of the Pentagon attack. Later, on September 21, 2001, a major disaster was declared for Virginia with September 11 th identified as the beginning of the incident period.", "The scope of the New York attacks, along with the President's declaration, resulted in legislation that appropriated $40 billion to address not only recovery for these events but security concerns, including transportation safety and initiating counter measures against terrorism. Half of the appropriated amount ($20 billion) was devoted by law ( P.L. 107-38 ) to recovery and assistance efforts in New York, Virginia, and Pennsylvania. FEMA's work involved urban search and rescue teams, debris removal, crisis counseling, and housing aid for displaced residents. FEMA's DRF expenditures in New York alone surpassed $8.7 billion.", "In the case of Virginia, the largest expenditures were for aid to families and individuals. More than $14.5 million was provided for these programs (including crisis counseling), while nearly $5 million was provided for emergency work and debris clearance.", "The two disaster declarations triggered the SBA Disaster Loan Program. For New York, SBA approved 6,384 loans for roughly $551 million. This included 412 approved home loans for roughly $6.0 million, 566 approved business loans for $37 million, and 5,406 approved EIDL loans for $507 million. For Virginia, SBA approved 256 loans for roughly $31 million. This included one approved business loan for $125,500, and 255 approved EIDL loans for approximately $31 million."], "subsections": []}, {"section_title": "Boston Marathon Bombing", "paragraphs": ["An emergency declaration was issued to Massachusetts on April 17, 2013, for the Boston Marathon Bombing\u2014two days after the incident. The Boston bombing was a unique situation that resulted in a large man-hunt, the shutdown of a major city, and the eventual capture of one perpetrator and the killing of the other in a shootout with the police. ", "Unlike some other terrorism-related incidents, this event stretched out over several days. In addition to the damage caused at the blast site, it also tested the resources of state and local first responders throughout the area. FEMA's Deputy Administrator explained FEMA's post-incident role:", "FEMA was authorized to provide Category B emergency protective measures to include items such as police personnel, search and rescue, and removal of health and safety hazards. FEMA also provided Public Assistance to include funding for shelters and emergency care for Norfolk and Suffolk counties, which was primarily used for residents whose homes had been impacted during the blast or could benefit from crisis counseling.", "Eventually, the incident period was extended, beginning on April 15, 2013, and concluding on April 22, 2013, to capture the eligible costs expended by public safety and other response personnel throughout the region. FEMA's portion of those costs (75% of the eligible amount) totaled just over $6 million. Additionally, FEMA \"authorized state and local agencies in Massachusetts to use existing preparedness grant funding to support law enforcement and first responder overtime costs resulting from investigation support activities or heightened security measures.\"", "SBA approved four EIDL loans for $214,300 in the aftermath of the Boston Marathon Bombing. Other SBA disaster loan types were not available because the incident was declared an emergency (as opposed to a major disaster). "], "subsections": []}, {"section_title": "Orlando Pulse Nightclub Shooting", "paragraphs": ["On June 13, 2016, Florida Governor Rick Scott made a request to the President to issue an emergency declaration in response to the mass shooting at Pulse nightclub in Orlando, FL, on June 12, 2016. The governor's request is the first known Stafford Act request in response to a mass shooting incident. The governor requested $5 million for emergency protective measures (Category B) under the Public Assistance program. The assistance was intended to address health and safety measures, and assistance for management, control, and reduction of immediate threats to public health and safety.", "According to FEMA Administrator Craig Fugate, the President denied the request for assistance partly because the Governor could not satisfactorily demonstrate that the response to the incident was beyond the capacity of the state and local governments. According to the denial letter sent by FEMA Administrator Craig Fugate to Governor Rick Scott:", "a presidential emergency declaration under the Stafford Act applies when federal assistance is needed to supplement state and local efforts and capabilities to save lives and to protect property and public health and safety, or to lessen or avert the threat of a catastrophe. Because your request did not demonstrate how the emergency response associated with this situation is beyond the capability of the state and affected local governments or identify any direct federal assistance needed to save lives or protect property, an emergency declaration is not appropriate for this incident.", "The request was also denied because other forms of federal assistance would be provided for the incident. The letter further states:", "although the Stafford Act is not the appropriate source of funding for those activities and this situation, several federal agencies, including the Department of Justice, the Federal Bureau of Investigation, and FEMA have resources that may help support the response to this incident absent an emergency declaration under the Stafford Act. We will work closely with you and your staff to identify these additional capabilities.", "Although the request for an emergency declaration was denied, FEMA approved a request from Florida to reallocate $253,000 in unspent money from the Homeland Security Grant Program to help pay for overtime costs in the wake of the shooting.", "SBA only provided EIDL for the attack and related investigation. This included five approved loans for $353,400."], "subsections": []}]}, {"section_title": "Policy Considerations", "paragraphs": ["It is generally agreed that the government should help victims of terrorism in times of need, but the proper scope of that assistance with respect to the Stafford Act is subject to debate. Some might question whether the fiscal responsibility resides primarily with the federal or the state government. The debate may be further complicated if the incident does not clearly meet the definition of a major disaster or does not meet certain thresholds, or both. The selected approach will likely be influenced by how policymakers view the role of the federal government in response to terrorism. Some may argue that Stafford Act assistance is warranted for all or most acts of terrorism. Others might argue that Stafford Act assistance should only be provided in cases where the incident meets the existing framework of definitions and unmet need."], "subsections": [{"section_title": "Major Disaster Definition", "paragraphs": ["As mentioned previously, the definition of a major disaster contains a list of incidents that can be considered a major disaster. One hypothetical concern is, as currently defined, certain acts of terror may not meet the definition of a major disaster. The following discussion demonstrates how Congress designed the definition to address natural disasters and human-caused incidents. ", "The term \"major disaster\" was originally defined in the Federal Disaster Relief Act of 1950 as", "any flood, drought, fire, hurricane, earthquake, storm, or other catastrophe in any part of the United States which, in the determination of the President, is or threatens to be of sufficient severity and magnitude to warrant disaster assistance by the federal government to supplement the efforts and available resources of states and local governments in alleviating the damage, hardship, or suffering caused thereby, and respecting which the governor of any State (or the Board of Commissioners of the District of Columbia) in which such catastrophe may occur or threaten certifies the need for disaster assistance under this Act, and shall give assurance of expenditure of a reasonable amount of the funds of the government of such state, local governments therein, or other agencies, for the same or similar purposes with respect to such catastrophe.", "Congress expanded on the list of specific incidents when it amended the definition in the Disaster Relief Act of 1974 which defined a major disaster as ", "any hurricane, tornado, storm, flood, high water, wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, drought, fire, explosion, or other catastrophe in any part of the United States which, in the determination of the President, causes damage of sufficient severity and magnitude to warrant major disaster assistance under this Act, above and beyond emergency services by the federal government, to supplement the efforts and available resources of States, local governments, and disaster relief organizations in alleviating the damage, loss, hardship, or suffering caused thereby.", "It is notable that the Senate report on the bill indicated that a major disaster is defined as \"any damage caused by these hazard s determined by the President to be of sufficient severity and magnitude to warrant federal assistance\" to supplement state and local efforts. To some, this would support the argument that the definition should be prescriptively viewed as a list of eligible incidents. ", "Congress amended the definition again in 1988\u2014the year the Stafford Act was enacted. Congress designed the new definition with a subtle change in wording to limit human-caused incidents from receiving major disaster declarations. As shown in Figure 3 , Congress removed \"or other catastrophe\" from the definition of a major disaster and inserted \"or, regardless of cause.\"", "According to the Senate report accompanying the bill, Congress removed \"other catastrophe\" because it had been broadly interpreted to justify federal assistance to humanly caused incidents. According to the Senate report", "Congress intended the [the Disaster Relief Act of 1974] to alleviate state and local conditions caused by natural catastrophes. Although non-natural catastrophes are not specifically enumerated by Section 102 of the act, the phrase \"other catastrophes\" has been broadly interpreted to justify federal assistance in response to humanly caused traumatic events. The expansion of legislative intent in the administration of the Disaster Relief Act has provoked recent congressional concern.", "The report further states that", "Broadening the scope of the act to cover both natural and non-natural catastrophes has strained the capacity of programs designed to respond only to natural catastrophes. Within its intended context the act has functioned relatively well. It is comprehensive and flexible legislation, well-suited to handle the full range of natural disasters for which it was designed. It was not written, however, to respond to the occasionally catastrophic consequences of social, economic, or political activity and establishes no administrative or programmatic mechanisms to do so.", "As demonstrated above, it appears that Congress sought to prevent the Stafford Act from being used to address an array of social issues and the specificity of the amended definition may have precluded some incidents from being declared a major disaster. For example, Michigan Governor Rick Snyder's request for a major disaster declaration for the Flint water contamination incident was denied based on the grounds that it did not meet the definition of a major disaster. The denial letter sent from the FEMA Administrator to the governor (see Appendix ) stated the incident did not meet the legal definition of a major disaster because it was \"not a result of a natural disaster, nor was it caused by fire, flood, or explosion.\"", "Another potential issue related to the definition's strict enumeration of human-caused incidents is that it is hypothetically conceivable that two incidents with equal damages and loss of life with different mechanisms of destruction would be treated differently in terms of eligibility. For example, an explosion that kills 50 people could be eligible for a major disaster (if there are sufficient damages to public infrastructure) whereas if a vehicle (similar to the 2016 Nice, France, attack) was used to kill 50 people it could arguably be considered ineligible. A similar argument could be made about a sarin gas attack or a cybersecurity attack that do not involve an explosion or result in fire.", "Others may argue that the definition's specificity would not preclude terror incidents from being declared major disasters if the consequences merited a major disaster declaration\u2014regardless of the mechanism. They may further argue that an incident could be recast with some ingenuity to make the incident conform to the definition. For instance, they may argue that, broadly interpreted, firing a gun or releasing gas involves a type of explosion. An arguable example of recasting incident was attempted in the unsuccessful appeal of Flint water contamination incident. The appeal letter stated that", "Respectfully, I appeal the determination that the event \"does not meet the legal definition of a major disaster under 42 U.S.C. \u00a75122.\" This unique disaster poses imminent and long-term threat to the citizens of Flint. Its severity warrants special consideration for all categories of the Individual and Public Assistance Programs, as well as the Hazard Mitigation program in order to facilitate recovery. While the definition under 44 C.F.R. \u00a7206.2(17) provides examples of what might constitute a natural disaster, I submit that this disaster is analogous to the flood category, given that the qualities within the water, over a long term, flooded and damaged the city's infrastructure in ways that were not immediately or easily detectable. This disaster is a natural catastrophe in the sense that lead contamination into water is a natural process.", "One concern that could emerge from broad interpretations of the definition is that it could lead to \"declaration creep\" wherein marginal incidents are increasingly considered major disasters. They may also argue that incidents without fire or explosions would likely not create significant damages and would therefore not warrant a major disaster declaration. An emergency declaration would be more appropriate according to this view.", "If Congress is concerned that the definition of a major disaster might preclude some incidents from receiving federal assistance, it could consider amending the definition to explicitly include terrorism. Since FEMA is a component agency of the Department of Homeland Security (DHS) it might be assumed that a potential definition would be the one used by DHS. There are, however, multiple definitions used by the federal government and there is no consensus on the definition of terrorism. As demonstrated in Table 2 , several U.S. governmental agencies have different definitions of terrorism. In some definitions, such as the one used by the Department of State, the act must be politically motivated whereas in other definitions it does not need to be a factor (such as the one used by the Federal Bureau of Investigation and DHS). Some might argue that definitions that rely on motivation are problematic if applied to Stafford Act assistance because they are based on the intentionality of the act rather than the act's consequences. For example, a mass shooting that is motivated by hate or brought about by mental illness might not be considered an act of terrorism while a similar incident that is politically motivated might. ", "Perhaps an alternative approach would be expanding the types of assistance available under an emergency declaration rather than amending the definition. For example, Congress could make crisis counseling and SBA disaster loans for businesses and households available under emergency declarations. This would arguably help to address events where there is great loss of life but relatively little damage to public infrastructure. These measures may also provide a boost for public morale in such a situation as well as an assurance to state and local governments that they may receive some supplemental help. "], "subsections": []}, {"section_title": "Per Capita Threshold", "paragraphs": ["Some may be concerned that FEMA might not recommend a major disaster declaration to the President for an act of terrorism because the incident does not meet or exceed the $1.42 per capita threshold. Using this threshold, FEMA may not recommend a declaration for an incident with a high number of casualties but limited damage to public infrastructure. For example, the Orlando Pulse nightclub attack killed 49 people but caused little damage to public property. Almost all of the damage was to the nightclub. In addition, damages to businesses are generally not considered when formulating the per capita threshold which is based on public sector damage. ", "Even if there is substantial damage to public infrastructure, some populous states may have difficulty meeting the per capita threshold. For example, in 2013 Illinois communities were denied federal assistance after a string of tornados devastated rural communities of the state. The storms caused significant damages to the rural communities but, given the state's large population, there was not enough damage to meet the per capita threshold. ", "Some might argue that loss of life should play a larger role when FEMA makes declaration recommendations. Others might question whether terror attacks with limited public infrastructure damage\u2014while devastating in their own right in terms of loss of life and the impact they can have on national morale\u2014cause enough damage to warrant a major disaster declaration. ", "If Congress is concerned that the per capita threshold may prevent state and local governments from receiving a major disaster declaration for a terror attack, Congress could require FEMA to consider factors beyond damages to public infrastructure when formulating its recommendation to the President. One potential assessment tool is the value of statistical life (VSL) which assigns a monetary value to each fatality caused by the given incident. For example, the U.S. Department of Transportation uses $9.1 million as the VSL when evaluating risk reduction. If this VSL amount was applied to the Orlando attack, the 49 fatalities would amount to roughly $446 million in damages. ", "Proponents might argue that evaluating a terror attack with VSL would provide objective criteria for making recommendations as to whether an incident warranted federal assistance. Others might question if altering the per capita threshold is necessary. They may point out that the per capita threshold is used solely by FEMA to make recommendations. Also, FEMA already considers damage to homes and rental properties. As noted previously, the ultimate decision to grant federal assistance for a major disaster rests solely with the President.", "Furthermore, the per capita threshold is designed to evaluate a state's capacity to respond to an incident. It could be argued that highly populated states should be able to fund their recovery without federal assistance because they have a higher tax base on which to draw. According to this view, adjusting the per capita threshold or applying additional factors would be unnecessary. "], "subsections": []}, {"section_title": "Emergency Declarations for Acts of Terrorism", "paragraphs": ["Whereas Congress sought to limit the President's authority to issue major disaster declarations for human-caused incidents under the Stafford Act, the inverse might be said about emergency declarations. As demonstrated by Figure 4 , the definition of an emergency in the Disaster Relief Act of 1974 included a specific list of incidents eligible for an emergency declaration. The amended definition eliminated the list and defined emergency more broadly. ", "It could be argued that the amended definition provides the President with a great deal of discretion to issue an emergency declaration in response to acts of terrorism. And as mentioned previously, FEMA does not use the per capita threshold formula to make emergency declaration recommendations to the President. To some, the broad definition and lack of a per capita formula make emergency declarations more suitable for certain types of terror attacks such as mass shootings.", "Consequently, some may argue that there is no need to change the Stafford Act to make it easier for \"soft target\" attacks to receive a major disaster declaration because it is relatively easier to obtain an emergency declaration.", "Even so, some might see the decision to issue an emergency declaration as arbitrary and question how state capacity is determined. For example, in a news release in response to the denied emergency declaration for the Orlando shooting, Governor Rick Scott stated", "It is incredibly disappointing that the Obama Administration denied our request for an emergency declaration. Last week, a terrorist killed 49 people, and wounded many others, which was the deadliest shooting in U.S. history. It is unthinkable that President Obama does not define this as an emergency. We are committing every state resource possible to help the victims and the community heal and we expect the same from the federal government.", "The press release also provided links to other incidents that were approved for emergency declarations, including President Obama's 2009 inauguration, the 2016 Flint Water crisis, the Massachusetts water main break in 2010, and the 2013 Boston Marathon bombing, among others. Some might question why these incidents warranted emergency declarations but the Pulse nightclub shooting did not.", "Proponents of changing the Stafford Act may also argue that, even if an incident receives an emergency declaration, the scope of the assistance is limited compared to a major disaster. For one, assistance is primarily provided to governmental entities under an emergency declaration. Individuals may receive some temporary housing assistance (which may not be applicable if the incident does not impact people's homes) and other forms of assistance such as Other Needs Assistance, which is a grant to households for necessary items damaged or destroyed by the incident, under Section 408 of the Stafford Act. But assistance to those experiencing mental health problems, generally addressed by FEMA's Crisis Counseling program, is not available under an emergency declaration. Further, as mentioned previously, SBA disaster loans are generally only available to private non-profit organizations under an emergency declaration. ", "If Congress is concerned that emergency declarations would not provide enough assistance in response to certain types of terror attacks, it could consider expanding the types of assistance potentially available for these incidents. The expanded assistance could be tied to all emergency declarations, or designed exclusively for acts of terror. In addition, Congress could require the SBA to provide the full range of disaster loans if an emergency were declared for an act of terror. "], "subsections": []}, {"section_title": "SBA Disaster Loans and CDBG Disaster Assistance", "paragraphs": [], "subsections": [{"section_title": "SBA Disaster Loan Program", "paragraphs": ["This section examines how the SBA Disaster Loan programs might be used to assist businesses, individuals, and households following a terrorist attack. The section also examines a potential alternative source of federal funding that has been used to assist businesses negatively impacted by a terror attack.", "As previously mentioned, SBA disaster loans are usually the only type of federal assistance available to businesses affected by a terror attack. There are potentially four scenarios where the SBA Disaster Loan Program could be used to support business recovery activities following a terror attack. These include two types of presidential declarations as authorized by the Stafford Act, and two types of SBA declarations authorized by the Small Business Act. In addition to providing disaster loans for businesses, some of these declarations also make disaster loans available to individuals and households. As demonstrated below, the type of declaration determines what loans types are made available:", "Major Disaster or Emergency Declaration Authorizing PA and IA. The President issues a major disaster declaration, or an emergency declaration, and authorizes both IA and PA under the authority of the Stafford Act. When the President issues such declarations, Home and Personal Property Disaster Loans, and Business Physical Disaster Loans become available to homeowners, renters, businesses of all sizes, and nonprofit organizations located within the disaster area. Home and Personal Property Disaster Loans, and Business Physical Disaster Loans can be used to repair and replace items and structures damaged by an attack. EIDL may also be made available under this declaration to provide loans to businesses that suffered substantial economic injury as a result of the incident. Major Disaster or Emergency Declaration Authorizing PA O nly . The President makes a major disaster declaration or emergency declaration that only provides the state with PA. In such a case, a private nonprofit entity located within the disaster area that provides noncritical services may be eligible for a SBA physical disaster loan and EIDL. ", "Disaster loans would not available to renters and homeowners under this type of declaration. In addition, Business Physical Disaster Loans, and EIDLs are generally not made available to businesses (unless they are a private nonprofit entity) when the declaration only provides PA.", "As mentioned previously, there are two scenarios under which SBA disaster loans could be provided in response to a terror attack without the issuance of presidential disaster declaration: ", "Gubernatorial Request for Assistance . Under this scenario, the SBA Administrator issues a physical disaster declaration in response to a gubernatorial request for assistance. Under this type of declaration, SBA disaster loans would be available to eligible homeowners, renters, businesses of all sizes, and nonprofit organizations within the disaster area or contiguous counties and other political subdivisions. EIDL would also be available under this type of declaration. Gubernatorial Certification of Substantial Economic Injury . The SBA Administrator may issue an EIDL declaration when SBA receives a certification from a governor that at least five small businesses have suffered substantial economic injury as a result of a disaster. This declaration may be offered only when other viable forms of financial assistance are unavailable. Small agricultural cooperatives and most private nonprofit organizations located within the disaster area or contiguous counties and other political subdivisions are eligible for SBA disaster loans when the SBA Administrator issues an EIDL declaration.", "These types of loans, however, may not be used to repair damages resulting from a terror attack. Rather, loan proceeds can only be used for working capital necessary to enable the business or organization to alleviate the specific economic injury and to resume normal operations. For example, a business may suffer a dramatic decline in its business operations and revenue stream or have difficulty obtaining materials as a result of a terror attack.", "As illustrated above, the type of loans that are made available to individuals, homeowners, and businesses largely depends on declaration type. Some observers might be concerned that certain disaster loans may not be available following a terrorist attack. In the view of those observers, Congress could consider amending existing programs by making all SBA disaster loan types available following a terror attack for certain declarations. For example, Congress might make EIDL, home and business disaster loans available for major disaster and emergencies that only provide PA."], "subsections": []}, {"section_title": "Community Development Block Grants71", "paragraphs": ["Another source of potential assistance to businesses is Department of Housing and Urban Development's (HUD's) Community Development Block Grant (CDBG) program. The CDBG program provides grants to states and localities to assist their recovery efforts following a presidentially declared disaster. Generally, grantees must use at least half of these funds for activities that principally benefit low- and moderate-income persons or areas. The program is designed to help communities and neighborhoods that otherwise might not recover due to limited resources. While the SBA Disaster Loan Program is automatically triggered by a presidential disaster declaration, CDBG is not. Instead, Congress has occasionally addressed unmet disaster needs by providing supplemental disaster-related appropriations for the CDBG program. Consequently, CDBG is not provided for all major disasters, but only at the discretion of Congress.", "Congress has authorized supplemental appropriations of funds in response to terror attacks through CDBG. For example", "In 1995, following the Alfred P. Murrah Federal Building attack in Oklahoma City, OK, Congress appropriated $12 million in supplemental CDBG funding to the City of Oklahoma City. Funds were to be used to establish a revolving loan fund only for the purposes of making loans to carry out economic development activities that would primarily benefit a designated area in the city impacted by the bombing. On November 26, 2001, two months following the terror attacks of September 11, 2001, Congress appropriated $700 million in CDBG supplemental funding to the state of New York for assistance to properties and businesses damaged by, and for economic revitalization related to the terror attack. On January 10, 2002, Congress followed that initial appropriation with a second appropriation of $2 billion in CDBG assistance to the Lower Manhattan Development Corporation (LMDC) to be used to, among other things, reimburse businesses and persons for economic losses, including funds to reimburse tourism areas adversely impacted by the attacks. On August 2, 2002, Congress appropriated an additional $783 million to the state of New York through the LMDC in cooperation with the City of New York in support of the city's economic recovery efforts. Funds were used to provide financial assistance to properties and businesses, including the redevelopment of infrastructure, and for economic revitalization activities.", "Most federal disaster assistance programs are funded through annual appropriations. This generally ensures that the programs have funds available when an incident occurs. As a result, these programs can provide assistance in a relatively short period of time. For example, a July 2015 SBA Office of Inspector General (OIG) study found that SBA's processing time for home disaster loans averaged 18.7 days and application processing times for business disaster loans averaged 43.3 days. ", "CDBG disaster assistance, on the other hand, is funded through supplemental funding. In general, Congress only provides supplemental funding when disaster needs exceed the amount available through annual appropriations. This typically only occurs when a large incident takes place, such as Hurricanes Katrina and Sandy. This is because Congress must debate and pass supplemental funding. Additionally, funding for CDBG disaster assistance is not available for all incidents.", "Some might argue the necessity for supplemental funding would preclude smaller terror incidents from receiving CDBG disaster assistance. Others might be concerned that assistance is not timely. For example, an appropriation for CDBG disaster assistance was enacted on June 3, 2008. The allocation date for the CDBG disaster assistance was September 11, 2008\u2014three months after the enacted appropriation. ", "One potential option would be to fund CDBG disaster assistance through annual appropriations. Doing so would create an account with funds that could be made immediately available to help expedite CDBG disaster assistance. Congress could examine strategies to make CDBG disaster assistance available to businesses that suffered damage as a result of a terrorist incident. The assistance could be triggered by a major disaster declaration, an emergency declaration, or both.", "Critics of the above policy option might argue that if this approach were used, it would be necessary to determine under what situations CDBG disaster assistance would be released. Critics may also argue that determinations for CDBG disaster assistance are made by Congress. Changing the process to one based on annual appropriation might shift the determination to a (relevant) federal agency. Similarly, as mentioned previously, CDBG disaster assistance is typically only available for large-scale incidents. Creating a permanent CDBG program for disaster assistance might provide a gateway for smaller incidents to receive CDBG disaster assistance. This, in turn, might lead to increased federal expenditures for disaster assistance."], "subsections": []}]}, {"section_title": "Expanded FEMA Assistance", "paragraphs": ["Some may question whether the Stafford Act is the appropriate authority for providing assistance to terror incidents with high number of casualties and limited damage. The assistance provided under the Stafford Act is primarily for recovery purposes (i.e., repairing and replacing damaged buildings and infrastructure). Under the existing Stafford Act authorities the assistance FEMA might provide would be the Other Needs Assistance (ONA) grant program that can be used to pay funeral expenses. And even in those cases, there may be private insurance already meeting those needs. Arguably, ONA could be expanded to begin to cover other costs following a death in the family and an expansion of FEMA coverage of related emergency health care costs might be helpful to the uninsured affected by a terrorist event. Similarly, a terrorist event could also be the trigger for expanded Disaster Unemployment Assistance benefits. But beyond those areas, little of the FEMA catalogue of assistance would apply beyond the programs already being employed. "], "subsections": []}]}, {"section_title": "Concluding Observations", "paragraphs": ["This report has outlined several different approaches, both definitional and administrative, that could fill in perceived gaps that have been forecast based on possible events juxtaposed against current policy parameters. One view argues that the Stafford Act should be amended to assure that terrorist attacks are eligible for major disaster assistance. Another view is that the Stafford Act is a flexible instrument that has assisted states and families and individuals through a myriad of unanticipated situations. According to this view, the Stafford Act's existing structure is sufficient to meet the potential terrorism challenges that may lie ahead.", "The selected approach will likely be influenced by two factors: (1) impact on federal costs, and (2) personal views concerning the appropriate nature of the federal government's role in addressing terrorism. Some might be concerned that amending the Stafford Act to assure that soft target and nonconventional terror attacks are eligible for major disaster assistance might, in their view, inappropriately shift the primary financial burden for addressing terrorism costs from the states to the federal government. Others might see these costs as minimal, particularly compared to the costs of natural disasters, such as those from major hurricanes. With respect to the appropriate role for the federal government in addressing terrorism costs, some might argue that the federal government should provide assistance for all instances of terrorism, even if those costs could be adequately handled by the state. Others might argue that federal assistance should be provided only in those cases where state and local government financial capacity is lacking. "], "subsections": [{"section_title": "Appendix. Examples of Request and Denial Letters", "paragraphs": [], "subsections": []}]}]}}
{"id": "R41129", "title": "Navy Columbia (SSBN-826) Class Ballistic Missile Submarine Program: Background and Issues for Congress", "released_date": "2019-05-17T00:00:00", "summary": ["The Columbia (SSBN-826) class program is a program to design and build a class of 12 new ballistic missile submarines (SSBNs) to replace the Navy's current force of 14 aging Ohio-class SSBNs. The Navy has identified the Columbia-class program as the Navy's top priority program. The Navy wants to procure the first Columbia-class boat in FY2021. Research and development work on the program has been underway for several years, and advance procurement (AP) funding for the program began in FY2017. The Navy's proposed FY2020 budget requests $1,698.9 million in advance procurement (AP) funding and $533.1 million in research and development funding for the program.", "The Navy's FY2020 budget submission estimates the total procurement cost of the 12-ship class at $109.0 billion in then-year dollars. An April 2018 Government Accountability Office (GAO) report assessing selected major DOD weapon acquisition programs stated that the estimated total acquisition cost of the Columbia-class program is $102,075.3 million (about $102.1 billion) in constant FY2018 dollars, including $12,901.0 million (about $12.9 billion) in research and development costs and $89,174.3 million (about $89.2 billion) in procurement costs.", "Issues for Congress for the Columbia-class program include the following:", "whether to approve, reject, or modify the Navy's FY2020 funding requests for the program; the risk of cost growth in the program; the risk of technical challenges or funding-related issues that could lead to delays in designing and building the lead boat in the program and having it ready for its scheduled initial deterrent patrol in 2031; the potential impact of the Columbia-class program on funding that will be available for other Navy programs, including other shipbuilding programs; and potential industrial-base challenges of building both Columbia-class boats and Virginia-class attack submarines (SSNs) at the same time.", "This report focuses on the Columbia-class program as a Navy shipbuilding program. CRS Report RL33640, U.S. Strategic Nuclear Forces: Background, Developments, and Issues, by Amy F. Woolf, discusses the Columbia class as an element of future U.S. strategic nuclear forces in the context of strategic nuclear arms control agreements."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["This report provides background information and potential oversight issues for Congress on the Columbia-class program, a program to design and build a class of 12 new ballistic missile submarines (SSBNs) to replace the Navy's current force of 14 aging Ohio-class SSBNs. The Navy has identified the Columbia-class program as the Navy's top priority program. The Navy wants to procure the first Columbia-class boat in FY2021. The Navy's proposed FY2020 budget requests $1,698.9 million in advance procurement (AP) funding and $533.1 million in research and development funding for the program.", "The program poses a number of funding and oversight issues for Congress. Decisions that Congress makes on the Columbia-class program could substantially affect U.S. military capabilities and funding requirements, and the U.S. shipbuilding industrial base.", "For an overview of the strategic and budgetary context in which the Columbia-class program and other Navy shipbuilding programs may be considered, see CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress , by Ronald O'Rourke.", "This report focuses on the Columbia-class program as a Navy shipbuilding program. Another CRS report\u2014CRS Report RL33640, U.S. Strategic Nuclear Forces: Background, Developments, and Issues , by Amy F. Woolf\u2014discusses the Columbia class as an element of future U.S. strategic nuclear forces in the context of strategic nuclear arms control agreements."], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "U.S. Navy SSBNs in General", "paragraphs": [], "subsections": [{"section_title": "Mission of SSBNs", "paragraphs": ["The U.S. Navy operates three kinds of submarines\u2014nuclear-powered attack submarines (SSNs), nuclear-powered cruise missile submarines (SSGNs), and nuclear-powered ballistic missile submarines (SSBNs). The SSNs and SSGNs are multi-mission ships that perform a variety of peacetime and wartime missions. They do not carry nuclear weapons.", "The SSBNs, in contrast, perform a specialized mission of strategic nuclear deterrence. To perform this mission, SSBNs are armed with submarine-launched ballistic missiles (SLBMs), which are large, long-range missiles armed with multiple nuclear warheads. SSBNs launch their SLBMs from large-diameter vertical launch tubes located in the middle section of the boat. The SSBNs' basic mission is to remain hidden at sea with their SLBMs, so as to deter a nuclear attack on the United States by another country by demonstrating to other countries that the United States has an assured second-strike capability, meaning a survivable system for carrying out a retaliatory nuclear attack.", "Navy SSBNs, which are sometimes referred to informally as \"boomers,\" form one leg of the U.S. strategic nuclear deterrent force, or \"triad,\" which also includes land-based intercontinental ballistic missiles (ICBMs) and land-based long-range bombers. At any given moment, some of the Navy's SSBNs are conducting nuclear deterrent patrols. The Department of Defense's (DOD's) report on the 2018 Nuclear Posture Review (NPR), released on February 2, 2018, states the following:", "Ballistic missile submarines are the most survivable leg of the triad. When on patrol, SSBNs are, at present, virtually undetectable, and there are no known, near-term credible threats to the survivability of the SSBN force. Nevertheless, we will continue to hedge against the possibility that advances in anti-submarine warfare could make the SSBN force less survivable in the future."], "subsections": []}, {"section_title": "Current Ohio-Class SSBNs", "paragraphs": ["The Navy currently operates 14 Ohio (SSBN-726) class SSBNs (see Figure 1 ). The boats are commonly called Trident SSBNs or simply Tridents because they carry Trident D-5 SLBMs. They were procured in FY1977-FY1991 and entered service in 1984-1997. They were designed and built by General Dynamics' Electric Boat Division (GD/EB) of Groton, CT, and Quonset Point, RI. They were originally designed for 30-year service lives but were later certified for 42-year service lives, consisting of two approximately 19-year periods of operation separated by an approximately 4-year midlife nuclear refueling overhaul, called an engineered refueling overhaul (ERO). The nuclear refueling overhaul includes both a nuclear refueling and overhaul work on the ship that is not related to the nuclear refueling.", "The boats were originally designed to each carry 24 SLBMs. As part of DOD's plan for complying with U.S.-Russia strategic nuclear arms control limits, four SLBM launch tubes on each boat have been deactivated, reducing to 20 the number of SLBMs they can each carry. ", "Eight of the 14 Ohio-class SSBNs are homeported at Bangor, WA, in Puget Sound; the other six are homeported at Kings Bay, GA, close to the Florida border. Unlike most Navy ships, which are operated by single crews, Navy SSBNs are operated by alternating crews (called the Blue and Gold crews) so as to maximize the percentage of time that they spend at sea in deployed status.", "The first of the 14 Ohio-class SSBNs (SSBN-730) will reach the end of its 42-year service life in 2027. The remaining 13 will reach the ends of their service lives at a rate of roughly one ship per year thereafter, with the 14 th reaching the end of its service life in 2040.", "The Navy has initiated a program to refurbish and extend the service lives of D-5 SLBMs to about 2040. As Columbia-class SSBNs begin to replace Ohio-class boats in 2031, refurbished D-5s carried by retiring Ohio-class boats will be transferred to new Columbia-class boats. Columbia-class boats will continue to be armed with these refurbished D-5s until about 2040, at which time the D-5s are to be replaced by a successor SLBM.", "Including the Ohio class, the Navy has operated four classes of SSBNs since 1959. For a table summarizing these four classes, see Appendix A ."], "subsections": []}, {"section_title": "U.S.-UK Cooperation on SLBMs and the New UK SSBN", "paragraphs": ["As one expression of U.S.-UK cooperation on nuclear weapon matters that dates back to World War II, the UK's four Vanguard-class SSBNs, which entered service in 1993-1999, each carry 16 Trident II D-5 SLBMs, and previous classes of UK SSBNs similarly carried earlier-generation U.S. SLBMs. The UK plans to replace the four Vanguard-class boats with three or four Dreadnought-class next-generation SSBNs. Dreadnought-class boats are to be equipped with 12 missile launch tubes, but current UK plans call for each boat to carry eight D-5 SLBMs, with the other four tubes not being used for SLBMs. The United States is providing technical assistance to the United Kingdom for the Dreadnought-class program, as it has over the years for some other UK submarine programs; for additional discussion, see Appendix B ."], "subsections": []}]}, {"section_title": "Submarine Construction Industrial Base", "paragraphs": ["U.S. Navy submarines are built at two shipyards\u2014General Dynamics' Electric Boat Division (GD/EB) of Groton, CT, and Quonset Point, RI, and Huntington Ingalls Industries' Newport News Shipbuilding (HII/NNS), of Newport News, VA. GD/EB and HII/NNS are the only two shipyards in the country capable of building nuclear-powered ships. GD/EB builds submarines only, while HII/NNS also builds nuclear-powered aircraft carriers and is capable of building other types of surface ships. The two yards currently are jointly building Virginia-class attack submarines.", "In addition to GD/EB and HII/NNS, the submarine construction industrial base includes hundreds of supplier firms, as well as laboratories and research facilities, in numerous states. Much of the total material procured from supplier firms for the construction of submarines comes from sole-source suppliers. For nuclear-propulsion component suppliers, an additional source of stabilizing work is the Navy's nuclear-powered aircraft carrier construction program.", "Much of the design and engineering portion of the submarine construction industrial base is resident at GD/EB. Smaller portions are resident at HII/NNS and some of the component makers."], "subsections": []}, {"section_title": "Columbia-Class Program", "paragraphs": [], "subsections": [{"section_title": "Navy's Top Priority Program", "paragraphs": ["Navy officials have stated consistently since September 2013 that the Columbia-class program is the Navy's top priority program, and that this means, among other things, that from the Navy's perspective, the Columbia-class program will be funded, even if that comes at the expense of funding for other Navy programs."], "subsections": []}, {"section_title": "Program Name", "paragraphs": ["Until 2016, the Columbia-class program was known as the Ohio replacement program (ORP) or SSBN(X) program, and boats in the class were referred to as Ohio replacement boats or SSBNXs."], "subsections": []}, {"section_title": "Program Origin and Milestones", "paragraphs": ["For information on the Columbia-class program's origin and milestones, see Appendix C ."], "subsections": []}, {"section_title": "Planned Procurement Quantity and Schedule", "paragraphs": [], "subsections": [{"section_title": "Planned Procurement Quantity", "paragraphs": ["Navy plans call for procuring 12 Columbia-class boats to replace the current force of 14 Ohio-class SSBNs. In explaining the planned procurement quantity of 12 boats, the Navy states the following:", "Ten operational SSBNs\u2014meaning boats not encumbered by lengthy maintenance actions\u2014are needed to meet strategic nuclear deterrence requirements for having a certain number of SSBNs at sea at any given moment. A total of 14 Ohio-class boats was needed to meet the requirement for 10 operational boats because, during the middle years of the Ohio class life cycle, three and sometimes four of the boats were nonoperational at any given moment on account of being in the midst of lengthy midlife nuclear refueling overhauls or other extended maintenance actions. A total of 12 (rather than 14) Columbia-class boats will be needed to meet the requirement for 10 operational boats because the midlife overhauls of Columbia-class boats, which will not include a nuclear refueling, will require less time (about two years) than the midlife refueling overhauls of Ohio-class boats (which require about four years from contract award to delivery), the result being that only two Columbia-class boats (rather than three or sometimes four) will be in the midst of midlife overhauls or other extended maintenance actions at any given moment during the middle years of the Columbia-class life cycle.", "The Trump Administration's Nuclear Posture Review (NPR), released in February 2018, states the following: \"The COLUMBIA-class program will deliver a minimum of 12 SSBNs to replace the current OHIO fleet and is designed to provide required capabilities for decades.\" The use of the word \"minimum\" in that sentence can be viewed as signaling a possibility that the required number of Columbia-class boats might at some point be increased to something more than 12 boats."], "subsections": []}, {"section_title": "Planned Procurement Schedule", "paragraphs": ["The Navy wants to procure the first Columbia-class boat in FY2021, the second in FY2024, and the remaining 10 at a rate of one per year from FY2026 through FY2035. Under this schedule, the Navy projects that the lead boat (i.e., first boat) would be delivered in FY2028, the second in FY2031, and the remaining 10 at a rate of one per year from FY2033 through FY2042. After being delivered in FY2028, the lead boat would undergo substantial testing, with the aim of having it be ready for its first deterrent patrol in 2031.", "Under this schedule, and given planned retirement dates for Ohio-class boats, the Navy projects that the SSBN force would decline to 13 boats in FY2027-FY2028, 12 boats in FY2029, 11 boats in FY2030-FY2036 and 10 boats in FY2037-FY2040, and then increase back to 11 boats in FY2041 and 12 boats in FY2042. The Navy states that the reduction to 11 or 10 boats during the period FY2030-FY2041 is acceptable in terms of meeting strategic nuclear deterrence requirements, because during these years, all 11 or 10 of the SSBNs in service will be operational (i.e., none of them will be in the midst of a lengthy midlife overhaul). The Navy acknowledges that there is some risk in having the SSBN force drop to 11 or 10 boats, because it provides little margin for absorbing an unforeseen event that might force an SSBN into an unscheduled and lengthy maintenance action. ", "The projected minimum level of 11 or 10 boats can be increased to 12 or 11 boats (providing some additional margin for absorbing an unforeseen event that might force an SSBN into an unscheduled and lengthy maintenance action) by accelerating by about one year the planned procurement dates of boats 2 through 12 in the program. Under this option, the second boat in the program would be procured in FY2023 rather than FY2024, the third boat in the program would be procured in FY2025 rather than FY2026, and so on. Implementing this option could affect the Navy's plan for funding the procurement of other Navy shipbuilding programs during the period FY2022-FY2025."], "subsections": []}]}, {"section_title": "Columbia Class Design", "paragraphs": ["The Columbia-class design (see Figure 2 ) includes 16 SLBM tubes, as opposed to 24 SLBM tubes (of which 20 are now used for SLBMs) on Ohio-class SSBNs. Although the Columbia-class design has fewer SLBM tubes than the Ohio-class design, it is larger than the Ohio-class design in terms of submerged displacement. The Columbia-class design, like the Ohio-class design before it, will be the largest submarine ever built by the United States. For additional background information on the Columbia-class design, see Appendix D .", "Current U.S. and UK plans call for the Columbia class and the UK's Dreadnought-class SSBN to use a missile compartment\u2014the middle section of the boat with the SLBM launch tubes\u2014of the same general design. As mentioned earlier, Dreadnought-class SSBNs are to each be armed with eight D-5 SLBMs, or half the number to be carried by the Columbia class. The modular design of the CMC will accommodate this difference. The UK provided some of the funding for the design of the CMC, including a large portion of the initial funding."], "subsections": []}, {"section_title": "Program Cost", "paragraphs": [], "subsections": [{"section_title": "Acquisition Cost", "paragraphs": ["Estimates of the procurement cost or acquisition cost (i.e., the research and development cost plus procurement cost) of the Columbia-class program include the following:", "The Navy's FY2020 budget submission estimates the total procurement cost of the 12-ship class at $109.0 billion in then-year dollars. The Navy in August 2017 estimated the total procurement cost of the Columbia-class program at $109.2 billion in then-year dollars and the program's research and development cost at $13.0 billion in then-year dollars, for a total acquisition (research and development plus procurement) cost of $122.3 billion in then-year dollars. The Navy as of January 2017 estimated the procurement cost of the lead ship in the Columbia class at $8.2 billion in constant 2017 dollars, not including several billion dollars in additional cost for plans for the class, and the average unit procurement cost of ships 2 through 12 in the program at $6.5 billion each in constant FY2017 dollars. A May 2019 Government Accountability Office (GAO) report assessing selected major DOD weapon acquisition programs stated that the estimated total acquisition (development plus procurement) cost of the Columbia-class program as of June 2018 was $103,035.2 million (about $103.0 billion) in constant FY2019 dollars, including $13,103.0 million (about $13.1 billion) in research and development costs and $89,932.2 million (about $89.9 billion) in procurement costs.", "The above estimates do not include estimated costs for refurbishing D-5 SLBMs so as to extend their service lives to about 2040."], "subsections": []}, {"section_title": "Operation and Support (O&S) Cost", "paragraphs": ["The Navy as of January 2017 estimated the average annual operation and support (O&S) cost of each Columbia class boat at $119 million per year."], "subsections": []}]}, {"section_title": "National Sea-Based Deterrence Fund (NSBDF)", "paragraphs": ["The National Sea-Based Deterrence Fund (NSBDF) is a fund in DOD's budget separate from the Navy's shipbuilding account for holding and executing procurement funding for the construction of new SSBNs. It was created by Congress in 2014 originally with the aim of helping to financially insulate other Navy shipbuilding programs from the potential cost impact of the Columbia-class program, and to encourage U.S. policymakers to finance the procurement of Columbia-class boats from across DOD's budget rather than solely from the Navy's budget.", "In more recent years, the statute establishing and governing the fund (10 U.SC. 2218a) has been amended to give the NSBDF an additional function of acting as a vehicle or repository for certain special acquisition authorities that have the potential for reducing at the margin the cost of Columbia-class boats and other Navy nuclear-powered ships (i.e., aircraft carriers and attack submarines). For additional background information on the NSBDF, see Appendix E . "], "subsections": []}, {"section_title": "Submarine Unified Build Strategy (SUBS)", "paragraphs": ["The Navy, under a plan it calls the Submarine Unified Build Strategy (SUBS), plans to build Columbia-class boats jointly at GD/EB and HII/NNS, with most of the work going to GD/EB. As part of this plan, the Navy is also proposing to adjust the division of work on the Virginia-class attack submarine program (in which boats are jointly built at GD/EB and HII/NNS), so that HII/NNS would receive a larger share of the work for that program than it has received in the past."], "subsections": []}, {"section_title": "Columbia-Class Program Funding", "paragraphs": [" Table 1 shows FY2020-FY2024 funding for the Columbia-class program under the Navy's FY2020 budget submission."], "subsections": []}]}]}, {"section_title": "Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "FY2020 Funding Request", "paragraphs": ["One issue for Congress is whether to approve, reject, or modify the Navy's FY2020 funding request for the program. In assessing this question, Congress may consider whether the Navy has accurately priced the work that is proposed to be done with FY2020 funding, as well as broader issues, including those discussed in some of the sections below."], "subsections": []}, {"section_title": "Risk of Cost Growth", "paragraphs": ["Another oversight issue for Congress is the risk of cost growth in the program. As detailed by CBO and GAO, lead ships in Navy shipbuilding programs in many cases have turned out to be more expensive to build than the Navy had estimated. As discussed in further detail below, CBO and GAO have concluded that there is a significant risk of cost growth in the Columbia-class program.", "Navy officials, as discussed earlier, have stated consistently since 2013 that the Columbia-class program is the Navy's top priority program, and that this means, among other things, that from the Navy's perspective, the Columbia-class program will be funded, even if that comes at the expense of funding for other Navy programs. Given this, the impact of cost growth in the Columbia-class program in a situation of finite DOD funding might be not so much on the execution of the Columbia-class program itself as on the consequent affordability of other DOD programs, perhaps particularly other Navy shipbuilding programs. The issue of the potential impact of the Columbia-class program on the affordability of other DOD programs is discussed in a subsequent section of this report."], "subsections": [{"section_title": "Navy Perspective", "paragraphs": [], "subsections": [{"section_title": "Navy Confidence Level at Milestone B Was Less Than 50%", "paragraphs": ["A January 24, 2017, Navy information paper provided to CRS and CBO in March 2017 stated that, at the time of Milestone B for the Columbia-class program, the Navy had assigned a confidence level of 43% to its estimated procurement cost for the lead ship in the Columbia class and a confidence level of 46% to its estimated average procurement cost for ships 2 through 12 in program. What this meant was that the Navy at the time of Milestone B had calculated that there was more than a 50% chance that the procurement costs of Columbia-class boats would turn out to be greater than what the Navy estimates. The January 24, 2017, Navy information paper stated the following:", "The confidence levels associated with the Milestone B Lead Ship End Cost (Less Plans) and Average Follow Ship End Cost estimate are approximately 43 percent and 46 percent respectively. The risk analysis was performed on 54 parameters influencing shipbuilder labor and material, changes, plans, and government furnished equipment costs.", "Reflecting confidence levels that had been calculated at the time of Milestone B, a December 1, 2017, Navy information paper provided the confidence levels and corresponding estimated unit procurement costs shown in Table 2 ."], "subsections": []}, {"section_title": "Navy Confidence Level as of May 2019 Was 50%", "paragraphs": ["Navy officials stated in May 2019 that during the time that has transpired since Milestone B, certain risk elements affecting the calculation of confidence levels have been retired, and that as a result, the Navy's confidence level for its costs estimates had increased to 50%, meaning that the Navy as of May 2019 calculated that there is a 50% chance that the procurement costs of Columbia-class boats will turn out to be greater than what the Navy estimates, and a 50% chance that it will turn out to be less than what the Navy estimates. Navy officials also stated in May 2019 that a confidence level of 50% is where they want the Navy's estimate to be."], "subsections": []}]}, {"section_title": "CBO Perspective", "paragraphs": ["An October 2018 CBO report on the cost of the Navy's shipbuilding programs stated the following (emphasis added):", "The cost of the 12 Columbia class submarines included in the 2019 shipbuilding plan is one of the most significant uncertainties in the Navy's and CBO's analyses of future shipbuilding costs\u2026.", "The Navy currently estimates that the first Columbia would cost $13.2 billion in 2018 dollars and that subsequent ships would have an average cost of $6.6 billion. The implied total cost for the 12 submarines is $85 billion, or an average of $7.1 billion for each ship\u2026. The Navy estimates that research and development costs would amount to $13 billion, bringing the total acquisition cost to $98 billion. The Navy's current estimate of costs for the Columbia class is greater than its estimate for the 2017 [shipbuilding] plan because it is the only shipbuilding program in the 2019 [shipbuilding] plan that includes real cost growth in the naval shipbuilding industry. That adjustment was required as part of the Department of Defense's approval of the Columbia class to Milestone B status, an important marker in the evolution of a major defense procurement program. ", "According to the Navy's estimate, the cost per thousand tons for the first Columbia would be 14 percent less than that of the first Virginia class attack submarine\u2014an improvement that would affect costs for the entire new class of ballistic missile submarines. The Navy anticipates lower costs per thousand tons for the Columbia because it plans to recycle, to the extent possible, the design, technology, and components used for the Virginia class.", "Furthermore, because ballistic missile submarines (such as the Columbia class) tend to be larger and less densely built than attack submarines (like the Virginia class), the Navy maintains that they will be easier to build and thus less expensive per thousand tons. The Navy has stated, however, that there is a greater than 50 percent probability that the cost of the first Columbia and subsequent ships of the class would exceed its estimates, and CBO estimates costs that are about 9 percent greater than the Navy projects.", "The costs of lead ships of new classes of submarines built in the 1970s and 1980s provide little evidence that ballistic missile submarines are cheaper by weight to build than attack submarines\u2026. The first Ohio class submarine was more expensive to build than the lead ships of the two classes of attack submarines built during the same period\u2014the Los Angeles and the Improved Los Angeles. (The design of the Improved Los Angeles included the addition of 12 vertical-launch system cells.) In addition, the average cost-to-weight ratio of the first 12 or 13 ships of the class was virtually identical for the Ohio, Los Angeles, and Improved Los Angeles classes.", "Although the cost by weight of lead ships for submarines had grown substantially by the 1990s, there was still little evidence that submarine size affected the cost per thousand tons. The first Virginia class submarine, which was ordered in 1998, cost about the same by weight as the first Seawolf submarine even though the Seawolf is 20 percent larger and was built nine years earlier.", "The difference between the Navy's and CBO's estimates is smaller than in earlier years, mostly because of the change in the way the service calculated its estimate. CBO estimates that purchasing the first Columbia class submarine would cost $13.6 billion in 2018 dollars, $0.4 billion more than the Navy estimates. Estimating the cost of the lead ship of a class with a new design is particularly difficult because of uncertainty about how much the Navy will spend on nonrecurring engineering and detailed design. CBO estimates that, all told, 12 Columbia class submarines would cost $93 billion, or an average of $7.7 billion each\u2014a half billion more per submarine than the Navy estimates. That average is based on the $13.6 billion estimated cost of the lead submarine and an average cost of $7.1 billion estimated for the 2 nd through 12 th submarines. Research and development would cost between $13 billion and $17 billion, CBO estimates.", "Overall, the Navy expects a 14 percent improvement in the cost-to-weight ratio of the Columbia class compared with the first 12 submarines in the Virginia class. Given the history of submarine construction, however, CBO is less optimistic than the Navy. CBO estimates that the Navy will realize a 6 percent improvement, stemming in part from the projected savings attributable to the concurrent production of the Columbia and Virginia class submarines.", "The costs for the Columbia class submarines could be lower than the Navy and CBO project, depending on the acquisition strategy. The Navy is purchasing the submarines through the National Sea-Based Deterrence Fund, which was established in the Carl Levin and Howard P. \"Buck\" McKeon National Defense Authorization Act for Fiscal Year 2015 ( P.L. 113-291 ). The Congress appropriates money for the program in the Navy's main shipbuilding account, and then DoD transfers money into the fund. The Navy could realize savings from special procurement authorities associated with that fund, such as the ability to purchase components and materials for several submarines, and possibly for other ships, at the same time. Further savings could be considerable if, for example, lawmakers authorized the Navy to use a block-buy strategy\u2014an approach it has used with other types of ships. A block-buy strategy allows the Navy to purchase a group of submarines over a specified period (effectively lowering the price of the ships by promising a steady stream of work for the shipyards) and to buy components and materials for the submarines in optimal amounts that minimize costs (known as economic order quantities). One disadvantage of the strategy is that if lawmakers later decided not to build all the submarines, materials that were purchased for the unbuilt ships might go unused. A block-buy strategy might also leave the Congress with less flexibility to change procurement plans or to purchase fewer submarines if lawmakers did not approve of how the program was progressing.", "Costs for the Columbia class submarines could, however, exceed both the Navy's and CBO's estimates. The new SSBN would be the largest submarine that the United States has ever built. It is expected to reuse some technology and components from the Virginia class submarine, but it would also include many new elements, such as an all-electric drive system, an X-stern ship control system, a new missile compartment, and a nuclear reactor that is designed to last the entire 42-year service life of the submarine."], "subsections": []}, {"section_title": "GAO Perspective", "paragraphs": ["An April 2019 GAO report on the Columbia-class program stated the following:", "The Navy's $115 billion procurement cost estimate is not reliable partly because it is based on overly optimistic assumptions about the labor hours needed to construct the submarines. While the Navy analyzed cost risks, it did not include margin in its estimate for likely cost overruns. The Navy told us it will continue to update its lead submarine cost estimate, but an independent assessment of the estimate may not be complete in time to inform the Navy's 2021 budget request to Congress to purchase the lead submarine. Without these reviews, the cost estimate\u2014and, consequently, the budget\u2014may be unrealistic. A reliable cost estimate is especially important for a program of this size and complexity to help ensure that its budget is sufficient to execute the program as planned.", "The Navy is using the congressionally-authorized National Sea-Based Deterrence Fund to construct the Columbia class. The Fund allows the Navy to purchase material and start construction early on multiple submarines prior to receiving congressional authorization and funding for submarine construction. The Navy anticipates achieving savings through use of the Fund, such as buying certain components early and in bulk, but did not include the savings in its cost estimate. The Navy may have overestimated its savings as higher than those historically achieved by other such programs. Without an updated cost estimate and cost risk analysis, including a realistic estimate of savings, the fiscal year 2021 budget request may not reflect funding needed to construct the submarine."], "subsections": []}]}, {"section_title": "Risk of Schedule Delay in Designing and Building Lead Boat", "paragraphs": ["Another oversight issue for Congress is the risk of technical challenges or funding-related issues (such as lapses in appropriations or restrictions on spending during periods when DOD is funded under continuing resolutions) that could lead to delays in designing and building the lead Columbia-class boat and having it ready for its scheduled initial deterrent patrol in 2031, when it is to deploy in the place of the first retiring Ohio-class SSBN. The schedule for designing and building the lead boat and having it ready for its scheduled first deterrent patrol in 2031 has little slack for absorbing unforeseen delays due to technical challenges or funding-related issues.", "To help mitigate the risk of technical challenges causing delays that threaten the lead boat's 2031 first-patrol date, the Navy has been working to generate additional margin inside the schedule for designing and building the lead boat, so as to provide more ability for absorbing delays and thereby make the schedule less brittle and more resilient. At a March 27, 2019, hearing before the Seapower subcommittee of the Senate Armed Services Committee on Navy shipbuilding programs, Navy officials testified that for the Columbia-class program,", "the Navy is implementing Continuous Production on selected shipyard-manufactured items to reduce cost and schedule risk and help strengthen the industrial base with a focus on critical vendors. Advance Construction activities are set to start in June 2019 at General Dynamics Electric Boat and Huntington Ingalls Industries-Newport News to proactively manage schedule margin and reduce controlling path risks for COLUMBIA.", "At least two technical challenges have already occurred in the Columbia-class program, one first reported in 2017 involving an electric motor, and another first reported in 2018 involving faulty welds in the first missile tube sections being built for the lead boat. Navy officials have stated that neither of these challenges jeopardized the lead's boat's schedule for being ready for its first patrol in 2031, in part because the Navy\u2014recognizing that it had not built SSBN missile tube sections in many years\u2014had built 23 months of margin into the schedule for manufacturing the missile tube sections. (This is in part why manufacturing of missile tube sections began well ahead of fabrication work on other parts of the submarine.) The problem with the welds reportedly absorbed up to 15 months of that margin, but even after absorbing that delay, 8 or more months of margin remained.", "Technical challenges could arise in various parts of the ship. One area that may bear close watching is the ship's electric-drive propulsion system, which is quite different than the mechanical-drive system used in other Navy nuclear-powered submarines. The Navy has been working for years to mitigate the risks associated with the Columbia-class design's electric-drive system through a technology-development process that includes testing and validation with land-based component prototypes. An April 2019 GAO report states the following:", "We found that the Navy continues to experience problems with the electric drive of the integrated power system that could potentially affect construction of the lead submarine. A manufacturing defect that affected the system's first production-representative propulsion motor required extensive repair that consumed 9 months of schedule margin at the land-based test facility. The Navy now plans to test the motor at the same time it had originally scheduled to make any final design changes before starting production. This could constrain opportunities to implement timely, corrective actions if problems are discovered during testing.", "More generally, regarding the risk of delays in designing and building the lead boat, the April 2019 GAO report stated the following:", "The Navy's goal is to complete a significant amount of the Columbia class submarine's design\u201483 percent\u2014before lead submarine construction begins in October 2020. The Navy established this goal based on lessons learned from another submarine program in an effort to help mitigate its aggressive construction schedule. Achieving this goal may prove to be challenging as the shipbuilder has to use a new design tool to complete an increasingly higher volume of complex design products\u2026. The shipbuilder has hired additional designers to improve its design progress. The Navy also plans to start advance construction of components in each major section of the submarine, beginning in fiscal year 2019, when less of the design will be complete\u2026.", "The Navy is attempting to mitigate an aggressive schedule for lead submarine construction by (1) setting a goal to mature a significant amount of the submarine's design prior to the start of construction and (2) beginning advance construction of submarine modules prior to October 2020. The shipbuilder is working to improve design performance and would have to maintain this increased pace to achieve its design goal, which is necessary to mitigate schedule risk associated with constructing the lead submarine. This may prove challenging as it must complete an increasingly higher volume and complexity of design products. At the same time, the Navy is continuing to develop several critical technologies and recent manufacturing defects with the integrated power system and missile tubes are among the challenges that the Navy is facing in ensuring timely delivery of critical components to the shipyard.", "A May 2019 GAO report assessing selected major DOD weapon acquisition programs additionally stated the following regarding the Columbia-class program:", "Technology Maturity", "The Columbia class program identified two critical technologies\u2014a carbon dioxide removal system and the stern area system, the details of which are classified. The program expects the carbon dioxide removal system to reach full maturity in late 2019, while the stern area system is still immature.", "In December 2017, we reported that several Columbia class technologies that met GAO's definition of a critical technology element were not identified by the Navy as critical technologies. Specifically, the Navy did not follow best practices for assessing critical technologies. When we applied these best practices, we identified four additional critical technologies that the Navy excluded. These include the integrated power system, the propulsor/coordinated stern, the common missile compartment (CMC), and the nuclear reactor. Of these, only the nuclear reactor is fully mature as of late 2018.", "The Navy expects the CMC to reach full maturity in 2019. However, officials reported that in July 2018 the shipbuilder identified significant weld defects in CMC missile tubes from one of three suppliers after the supplier had already delivered seven tubes to the shipyard and installation work had begun, resulting in rework. Officials further report that the shipbuilder found defects affected five additional tubes. Program officials attributed these defects to inexperienced welders and weld inspectors. The Navy estimates that, as of January 2019, the CMC consumed 52 percent of its schedule margin. Should the Navy discover additional CMC deficiencies, the planned construction sequence for the lead submarine will be jeopardized.", "Further, manufacturing defects have delayed delivery of the integrated power system's (IPS) first production-representative motor. The Navy plans to recover the motor's schedule margin by testing it while the supplier updates the motor's production design. Consequently, any new deficiencies discovered in testing may require the supplier to modify its design, which could delay the lead ship's IPS motor production schedule.", "Design Stability", "The program office plans to complete the basic and functional design prior to the lead submarine's scheduled construction start, in October 2020. However, Navy officials report the shipbuilder has already begun building sections of the submarine, with 95 percent of the basic and functional design complete\u2014a level slightly below best practices. Further, the Navy has determined that the shipbuilder needs to complete 83 percent of the detail design\u2014the most complex design phases down to the lowest level of the submarine\u2014by October 2020 to meet its cost and schedule goals. Currently, the shipbuilder is behind schedule because it has yet not achieved planned efficiencies with new design software. The shipbuilder increased its design staff by 18 percent in an effort to reach the design goal on schedule. However, the program's plan for achieving design stability is premised on assumptions about the final form, fit, and function of critical technologies\u2014and how those technologies will perform in a realistic environment\u2014that the program has yet to demonstrate.", "Production Readiness", "By beginning to build sections of the submarine starting in December 2018, the Navy believes that the builder can achieve an aggressive 84-month construction schedule. However, this is 2 years prior to the planned request for fiscal year 2021 authorization to start construction of the lead ship.", "Other Program Issues", "In a April 2019 report, we made several recommendations to improve the program's cost estimate. Specifically, we found that the program's $115 billion procurement cost estimate is not reliable because its estimate is based on overly optimistic assumptions about the labor hours needed to construct Columbia class submarines and did not include any cost margin in case these assumptions are not met. While the Navy analyzed program cost risks, it did not include enough margin in its estimate for likely cost growth. The Navy plans to update the cost estimate for the lead ship, but it may not complete this update in time for its fiscal year 2021 budget request, which will seek authorization and funding for lead submarine construction.", "Program Office Comments", "We provided a draft of this assessment to the program office for review and comment. The program office provided technical comments, which we incorporated where appropriate. The program office stated that it intends to provide needed capabilities on schedule and at an affordable price by committing to stable requirements, achieving high design maturity at the start of construction for the lead submarine, improving manufacturing and construction readiness, and aggressively working to reduce costs. It also said it plans to complete 83 percent of the design by construction start\u2014more than other recent submarine programs. The program also stated that it plans to update its cost estimate in 2019 to inform lead submarine funding. The program noted that the Navy recognizes its supplier base remains a high risk to construction readiness and continues to devote increased oversight on manufacturing issues and readiness assessments. The program said it continues to comply with all Navy, Department of Defense, and statutory requirements for managing critical technologies.", "Until such time that the Navy can find ways to generate additional margin inside the program's schedule, the program appears to be in a situation where many things need to go right, and few things can go wrong, between now and 2031 for the lead boat to be ready for its first patrol in 2031. In assessing this situation, it can be noted on the one hand that the Columbia-class program's status as the Navy's top priority program means that the program can be a high claimant for funding and personnel (including engineers, supervisors, and managers) that can be used to reduce the risk of occurrence of technical challenges that could threaten the lead boat's 2031 first-patrol date. On the other hand, it can be noted that the lead ship in the Columbia-class program, like the lead ships in most Navy shipbuilding programs, is serving as the program's prototype, creating an inherent risk of technical challenges."], "subsections": []}, {"section_title": "Program Affordability and Impact on Other Navy Shipbuilding Programs", "paragraphs": ["Another issue for Congress\u2014one that observers have focused on for several years\u2014concerns the potential impact of the Columbia-class program on funding that will be available for other Navy programs, including other shipbuilding programs, particularly during the 10-year period FY2026-FY2035, when the Navy plans to procure one Columbia-class boat per year. Other things held equal, cost growth in the Columbia-class program (see the earlier discussion of the risk of cost growth in the program) could reinforce concerns about the potential impact of the Columbia-class program on funding that will be available for other Navy programs, including other shipbuilding programs. Even without such cost growth, however, this issue would remain as a matter of concern.", "Starting in FY2026, when the Navy plans to procure one Columbia-class boat per year for a period of 10 years, the Navy estimates that the Columbia-class program will require, in constant FY2019 dollars, roughly $7 billion per year in procurement funding. Several years ago, when the Navy's shipbuilding budget was being funded at a level of roughly $14 billion per year, observers were concerned that the Columbia-class program during the period FY2026-FY2035 could absorb as much as half of the Navy's shipbuilding budget, leaving relatively little funding available for all other Navy shipbuilding programs. Over the last several years, the Navy's shipbuilding budget has been increased to an annual funding level of roughly $24 billion per year. In a context of a shipbuilding budget of roughly $24 billion per year, a Columbia-class requirement for roughly $7 billion per year does not loom as large proportionately as it once did. Concerns remain, however, about funding that will be available for the procurement of other kinds of ships. The Navy's report on its FY2020 30-year shipbuilding plan states the following:", "The fiscal impact of the new SSBN begins in FY2023 with advanced procurement [funding], and then increases in FY2026 with full annual procurements. This represents Navy's largest fiscal challenge for near-term budgets and could impact the pace of procuring other ship types \u2013 potentially causing a drop below the steady profiles [shown elsewhere in this report].", "At a March 27, 2019, hearing before the Seapower subcommittee of the Senate Armed Services Committee on Navy shipbuilding programs, Navy officials testified that", "the COLUMBIA Class program remains the Navy's number one acquisition priority program and is on track to start construction in October 2020 and deliver to pace the retirement of our current ballistic missile submarines, deploying for its first patrol in FY 2031. To better align focus and resources and ensure successful delivery of this program to the Fleet, DON has established Program Executive Office COLUMBIA. Additional resources above the Navy's [budget] topline will be required for the Navy to fund serial production of the COLUMBIA Class SSBN and maintain its planned shipbuilding profile.", "The creation of the National Sea-Based Deterrence Fund (NSBDF) and the amending of the statute governing the fund to include special acquisition authorities can be viewed as one response to concerns about the potential impact of the Columbia-class program on funding that will be available for other Navy programs, including other shipbuilding programs. For additional information about the NSBDF, see Appendix E .", "Another potential option for reducing the potential impact of the Columbia-class program on funding that will be available for other Navy programs, including other shipbuilding programs, would be to reduce the Columbia-class program to something fewer than 12 boats. Over the years, for various reasons, some observers have advocated or presented options for an SSBN force of fewer than 12 SSBNs. A November 2013 CBO report on options for reducing the federal budget deficit, for example, presented an option for reducing the SSBN force to 8 boats as a cost-reduction measure. Earlier CBO reports have presented options for reducing the SSBN force to 10 boats as a cost-reduction measure. CBO reports that present such options also provide notional arguments for and against the options. A June 2010 report by a group known as the Sustainable Defense Task Force recommended reducing the SSBN force to 7 boats, a September 2010 report from the Cato Institute recommended reducing the SSBN force to 6\u00a0boats, and a September 2013 report from a group organized by the Stimson Center recommended reducing the force to 10 boats.", "Views on whether a force of fewer than 12 Columbia-class boats would be appropriate could depend on, among other things, assessments of strategic nuclear threats to the United States and the role of SSBNs in deterring such threats as a part of overall U.S. strategic nuclear forces, as influenced by the terms of strategic nuclear arms control agreements. Reducing the number of SSBNs below 12 could also raise a question as to whether the force should continue to be homeported at both Bangor, WA, and Kings Bay, GA, or consolidated at a single location. The Navy's position is that the current requirement for having a certain number of SSBNs on patrol translates into a need for a force of 14 Ohio-class boats, and that this requirement can be met in the future by a force of 12 Columbia-class boats."], "subsections": []}, {"section_title": "Industrial-Base Challenges of Building Both Columbia- and Virginia-Class Boats", "paragraphs": ["Another oversight issue for Congress concerns potential industrial-base challenges of building both Columbia-class boats and Virginia-class attack submarines (SSNs) at the same time, particularly as procurement of Virginia-class submarines shifts to production of a new and larger version of the Virginia-class design that incorporates an additional mid-ship section called the Virginia Payload Module (VPM). Concerns about the ability of the submarine construction industrial base to execute an eventual procurement rate of two VPM-equipped Virginia-class boats and one Columbia-class boat per year, as currently planned under the Navy's FY2020 30-year shipbuilding plan, have been heightened by recent reports of challenges faced by the two submarine-construction shipyards (GD/EB and HII/NNS) as well as submarine component supplier firms in meeting scheduled delivery times for Virginia-class boats as the Virginia-class program transitions over time from production of two \"regular\" Virginia-class boats per year to two VPM-equipped boats per year. Concerns about the industrial-base issue can be viewed as an additional element of the previously discussed issue of the risk of schedule delay in designing and building the lead Columbia-class boat."], "subsections": []}]}, {"section_title": "Legislative Activity for FY2020", "paragraphs": [], "subsections": [{"section_title": "Summary of Congressional Action on FY2020 Funding Request", "paragraphs": [" Table 3 below summarizes congressional action on the Navy's FY2020 funding request for the Columbia-class program.", "Appendix A. Summary of Past U.S. SSBN Designs", "This appendix provides background information on the four SSBN classes that the United States has operated since 1959. The four classes are summarized in Table A-1 . As shown in the table, the size of U.S. SSBNs has grown over time, reflecting in part a growth in the size and number of SLBMs carried on each boat. The Ohio class carries an SLBM (the D-5) that is much larger than the SLBMs carried by earlier U.S. SSBNs, and it carries 24 SLBMs, compared to the 16 on earlier U.S. SSBNs. In part for these reasons, the Ohio-class design, with a submerged displacement of 18,750 tons, is more than twice the size of earlier U.S. SSBNs.", "Appendix B. U.S.-UK Cooperation on SLBMs and the New UK SSBN", "This appendix provides background information on U.S.-UK cooperation on SLBMs and the UK's next-generation SSBN, previously called the Successor-class SSBN and now called the Dreadnought-class SSBN.", "The UK's four Vanguard-class SSBNs, which entered service in 1993-1999, each carry 16 Trident II D-5 SLBMs. Previous classes of UK SSBNs similarly carried earlier-generation U.S. SLBMs. The UK's use of U.S.-made SLBMs on its SSBNs is one element of a long-standing close cooperation between the two countries on nuclear-related issues that is carried out under the 1958 Agreement for Cooperation on the Uses of Atomic Energy for Mutual Defense Purposes (also known as the Mutual Defense Agreement). Within the framework established by the 1958 agreement, cooperation on SLBMs in particular is carried out under the 1963 Polaris Sales Agreement and a 1982 Exchange of Letters between the two governments. The Navy testified in March 2010 that \"the United States and the United Kingdom have maintained a shared commitment to nuclear deterrence through the Polaris Sales Agreement since April 1963. The U.S. will continue to maintain its strong strategic relationship with the UK for our respective follow-on platforms, based upon the Polaris Sales Agreement.\"", "The first Vanguard-class SSBN was originally projected to reach the end of its service life in 2024, but an October 2010 UK defense and security review report states that the lives of the Vanguard class ships will now be extended by a few years, so that the four boats will remain in service into the late 2020s and early 2030s.", "The UK plans to replace the four Vanguard-class boats with three or four next-generation Dreadnought-class boats are to be equipped with 12 missile launch tubes, but current UK plans call for each boat to carry eight D-5 SLBMs, with the other four tubes not being used for SLBMs. The report states that \"'Main Gate'\u2014the decision to start building the submarines\u2014is required around 2016.\" The first new boat is to be delivered by 2028, or about four years later than previously planned. ", "The United States is assisting the UK with certain aspects of the Dreadnought SSBN program. In addition to the modular Common Missile Compartment (CMC), the United States is assisting the UK with the new PWR-3 reactor plant to be used by the Dreadnought SSBN. A December 2011 press report states that \"there has been strong [UK] collaboration with the US [on the Dreadnought program], particularly with regard to the CMC, the PWR, and other propulsion technology,\" and that the design concept selected for the Dreadnought class employs \"a new propulsion plant based on a US design, but using next-generation UK reactor technology (PWR-3) and modern secondary propulsion systems.\" The U.S. Navy states that", "Naval Reactors, a joint Department of Energy/Department of Navy organization responsible for all aspects of naval nuclear propulsion, has an ongoing technical exchange with the UK Ministry of Defence under the US/UK 1958 Mutual Defence Agreement. The US/UK 1958 Mutual Defence Agreement is a Government to Government Atomic Energy Act agreement that allows the exchange of naval nuclear propulsion technology between the US and UK.", "Under this agreement, Naval Reactors is providing the UK Ministry of Defence with US naval nuclear propulsion technology to facilitate development of the naval nuclear propulsion plant for the UK's next generation SUCCESSOR ballistic missile submarine. The technology exchange is managed and led by the US and UK Governments, with participation from Naval Reactors prime contractors, private nuclear capable shipbuilders, and several suppliers. A UK based office comprised of about 40 US personnel provide full-time engineering support for the exchange, with additional support from key US suppliers and other US based program personnel as needed.", "The relationship between the US and UK under the 1958 mutual defence agreement is an ongoing relationship and the level of support varies depending on the nature of the support being provided. Naval Reactors work supporting the SUCCESSOR submarine is reimbursed by the UK Ministry of Defence.", "U.S. assistance to the UK on naval nuclear propulsion technology first occurred many years ago: To help jumpstart the UK's nuclear-powered submarine program, the United States transferred to the UK a complete nuclear propulsion plant (plus technical data, spares, and training) of the kind installed on the U.S. Navy's six Skipjack (SSN-585) class nuclear-powered attack submarines (SSNs), which entered service between 1959 and 1961. The plant was installed on the UK Navy's first nuclear-powered ship, the attack submarine Dreadnought , which entered service in 1963.", "The December 2011 press report states that \"the UK is also looking at other areas of cooperation between Dreadnought and the Ohio Replacement Programme. For example, a collaboration agreement has been signed off regarding the platform integration of sonar arrays with the respective combat systems.\"", "A June 24, 2016, press report states the following:", "The [U.S. Navy] admiral responsible for the nuclear weapons component of ballistic missile submarines today praised the \"truly unique\" relationship with the British naval officers who have similar responsibilities, and said that historic cooperation would not be affected by Thursday's vote to have the United Kingdom leave the European Union.", "Vice Adm. Terry Benedict, director of the Navy's Strategic Systems Programs, said that based on a telephone exchange Thursday morning with his Royal Navy counterpart, \"I have no concern.\" The so-called Brexit vote\u2014for British exit\u2014\"was a decision based on its relationship with Europe, not with us. I see yesterday's vote having no effect.\"", "Appendix C. Columbia-Class Program Origin and Milestones", "This appendix provides background information on the Columbia-class program's origin and milestones.", "Program Origin and Early Milestones", "Although the eventual need to replace the Ohio-class SSBNs has been known for many years, the Columbia-class program can be traced more specifically to an exchange of letters in December 2006 between President George W. Bush and UK Prime Minister Tony Blair concerning the UK's desire to participate in a program to extend the service life of the Trident II D-5 SLBM into the 2040s, and to have its next-generation SSBNs carry D-5s. Following this exchange of letters, and with an awareness of the projected retirement dates of the Ohio-class SSBNs and the time that would likely be needed to develop and field a replacement for them, DOD in 2007 began studies on a next-generation sea-based strategic deterrent (SBSD). The studies used the term sea-based strategic deterrent (SBSD) to signal the possibility that the new system would not necessarily be a submarine.", "An Initial Capabilities Document (ICD) for a new SBSD was developed in early 2008 and approved by DOD's Joint Requirements Oversight Committee (JROC) on June 20, 2008. In July 2008, DOD issued a Concept Decision providing guidance for an analysis of alternatives (AOA) for the program; an acquisition decision memorandum from John Young, DOD's acquisition executive, stated the new system would, barring some discovery, be a submarine. The Navy established an Columbia-class program office at about this same time.", "The AOA reportedly began in the summer or fall of 2008. The AOA was completed, with final brief to the Office of the Secretary of Defense (OSD), on May 20, 2009. The final AOA report was completed in September 2009. An AOA Sufficiency Review Letter was signed by OSD's Director, Cost Assessment & Program Evaluation (CAPE) on December 8, 2009. The AOA concluded that a new-design SSBN was the best option for replacing the Ohio-class SSBNs. (For a June 26, 2013, Navy blog post discussing options that were examined for replacing the Ohio-class SSBNs, see Appendix D .)", "The program's Milestone A review meeting was held on December 9, 2010. On February 3, 2011, the Navy provided the following statement to CRS concerning the outcome of the December 9 meeting:", "The OHIO Replacement Program achieved Milestone A and has been approved to enter the Technology Development Phase of the Dept. of Defense Life Cycle Management System as of Jan. 10, 2011. ", "This milestone comes following the endorsement of the Defense Acquisition Board (DAB), chaired by Dr. Carter (USD for Acquisition, Technology, and Logistics) who has signed the program's Milestone A Acquisition Decision Memorandum (ADM). ", "The DAB endorsed replacing the current 14 Ohio-class Ballistic Missile Submarines (SSBNs) as they reach the end of their service life with 12 Ohio Replacement Submarines, each comprising 16, 87-inch diameter missile tubes utilizing TRIDENT II D5 Life Extended missiles (initial loadout). The decision came after the program was presented to the Defense Acquisition Board (DAB) on Dec. 9, 2010.", "The ADM validates the program's Technology Development Strategy and allows entry into the Technology Development Phase during which warfighting requirements will be refined to meet operational and affordability goals. Design, prototyping, and technology development efforts will continue to ensure sufficient technological maturity for lead ship procurement in 2019.", "January 2017 Milestone B Approval", "On January 4, 2017, DOD gave Milestone B approval to the Columbia-class program. Milestone B approval, which permits a program to enter the engineering and manufacturing development (EMD) phase, is generally considered a major milestone for a defense acquisition program, permitting the program to transition, in effect, from a research and development effort into a procurement program of record. A January 6, 2017, Navy notification to Congress on the Milestone B approval for the Columbia-class program states the following:", "On 4 November 2016, Under Secretary of Defense for Acquisition, Technology and Logistics Frank Kendall chaired the Milestone B Defense Acquisition Board, and on 4 January, 2017 signed the acquisition decision memorandum approving COLUMBIA Class program's Milestone B and designating the program as an Acquisition Category ID major defense acquisition program. Milestone B also establishes the Acquisition Program Baseline against which the program's performance will be assessed. Additionally, this decision formally authorizes entry into the Engineering and Manufacturing Development Phase of an acquisition program, permitting the transition from preliminary design to detail design, using Shipbuilding and Conversion, Navy (SCN) funds. Cost estimates for this program have been rebaselined from CY2010 dollars to CY2017 dollars in accordance with DoDI 5000.02, Rev p, dated 7 January 2015.", "The MS B Navy Cost Estimate for Average Follow Ship End Cost (hulls 2-12) in 2010$ using specific shipbuilding indices is $5.0 billion, a $600 million reduction from the MS A estimate, which nearly achieves the affordability target of $4.9 billion set at MS A. To continue cost control, the Navy will focus on:", "\u2022 Stable operational and technical requirements", "\u2022 High design maturity at construction start", "\u2022 Detailed plans to ensure manufacturing readiness including robust prototyping efforts and synergies with other nuclear shipbuilding programs", "\u2022 Aggressive cost reduction actions", "Affordability caps have been assigned that are consistent with current cost estimates and reasonable margins for cost growth. Relative to Milestone A, these estimates have been updated to adjust Base Year from 2010 to 2017, a standard practice to match Base Year with the year of Milestone B approval. The MS A unit cost affordability target ($4.9 billion in CY2010$ using Navy indices) used a unique metric, \"Average Follow-on Ship End Cost,\" which accounted for hulls 2-12. From Milestone B forward, the affordability cap for the unit cost will be measured by using the Average Procurement Unit Cost (APUC), which includes all 12 hulls. The Affordability Cap of $8.0 billion in CY2017$ is based upon the approved APUC estimate of $7.3 billion plus 10%....", "The Navy and industry are currently negotiating the detail design and construction (DD&C) contract, which is expected to award in early 2017. With negotiations continuing on the DD&C contract, the Navy has ensured the COLUMBIA Program design effort will continue without interruption. The Navy issued a contract modification to allow execution of SCN for detail design on the existing R&D contract. With this modification in place, detail design efforts that had initially planned to transition to the DD&C contract, will continue on the current R&D contract to ensure continued design progress. With the Milestone B approval and the appropriation of $773M in FY17 SCN under the second Continuing Resolution, funding is now available to execute detail design. In accordance with 10 U.S.C. \u00a72218a and the FY17 National Defense Authorization Act, the Navy deposited the FY17 SCN into the National Sea-Based Deterrence Fund (NSBDF). The first installment of funding will be executed on the existing R&D contract, which allows transition into detail design and continued design progress until the award of the DD&C contract.", "Appendix D. Design of Columbia-Class Boats", "This appendix provides additional background information on the design for the Columbia-class boats. ", "Some Key Design Features", "The Columbia-class design will reflect the following:", "The Columbia class is being designed for a 42-year expected service life. Unlike the Ohio-class design, which requires a midlife nuclear refueling, the Columbia class is to be equipped with a life-of-the-ship nuclear fuel core (a nuclear fuel core that is sufficient to power the ship for its entire expected service life). Although the Columbia class will not need a midlife nuclear refueling, it will still need a midlife nonrefueling overhaul (i.e., an overhaul that does not include a nuclear refueling) to operate over its full 42-year life. The Columbia class is to be equipped with an electric-drive propulsion train, as opposed to the mechanical-drive propulsion train used on other Navy submarines. The electric-drive system is expected to be quieter (i.e., stealthier) than a mechanical-drive system. The Columbia class is to have SLBM launch tubes that are the same size as those on the Ohio class (i.e., tubes with a diameter of 87 inches and a length sufficient to accommodate a D-5 SLBM). The Columbia class will have a beam (i.e., diameter) of 43 feet, compared to 42 feet on the Ohio-class design, and a length of 560 feet, the same as that of the Ohio-class design. Instead of 24 SLBM launch tubes, as on the Ohio-class design, the Columbia class is to have 16 SLBM launch tubes. As noted earlier, although the Columbia-class design has fewer SLBM tubes than the Ohio-class design, it is larger than the Ohio-class design in terms of submerged displacement. The Columbia-class design has a reported submerged displacement of 20,815 tons (as of August 2014), compared to 18,750 tons for the Ohio-class design. The Columbia-class design, like the Ohio-class design before it, will be the largest submarine ever built by the United States. The Navy states that \"owing to the unique demands of strategic relevance, [Columbia-class boats] must be fitted with the most up-to-date capabilities and stealth to ensure they are survivable throughout their full 40-year life span.\"", "June 2013 Navy Blog Post Regarding Ohio Replacement Options", "A June 26, 2013, blog post by Rear Admiral Richard Breckenridge, the Navy's Director for Undersea Warfare (N97), discussing options that were examined for replacing the Ohio-class SSBNs, stated the following:", "Over the last five years, the Navy\u2013working with U.S. Strategic Command, the Joint Staff and the Office of the Secretary of Defense\u2013has formally examined various options to replace the Ohio ballistic missile submarines as they retire beginning in 2027. This analysis included a variety of replacement platform options, including designs based on the highly successful Virginia-class attack submarine program and the current Ohio-class ballistic missile submarine. In the end, the Navy elected to pursue a new design that leverages the lessons from the Ohio, the Virginia advances in shipbuilding and improvements in cost-efficiency.", "Recently, a variety of writers have speculated that the required survivable deterrence could be achieved more cost effectively with the Virginia-based option or by restarting the Ohio-class SSBN production line. Both of these ideas make sense at face value\u2013which is why they were included among the alternatives assessed\u2013but the devil is in the details. When we examined the particulars, each of these options came up short in both military effectiveness and cost efficiency.", "Virginia-based SSBN design with a Trident II D5 missile. An SSBN design based on a Virginia-class attack submarine with a large-diameter missile compartment was rejected due to a wide range of shortfalls. It would:", "\u2022 Not meet survivability (stealth) requirements due to poor hull streamlining and lack of a drive train able to quietly propel a much larger ship", "\u2022 Not meet at-sea availability requirements due to longer refit times (since equipment is packed more tightly within the hull, it requires more time to replace, repair and retest)", "\u2022 Not meet availability requirements due to a longer mid-life overhaul (refueling needed)", "\u2022 Require a larger number of submarines to meet the same operational requirement", "\u2022 Reduce the deterrent value needed to protect the country (fewer missiles, warheads at-sea)", "\u2022 Be more expensive than other alternatives due to extensive redesign of Virginia systems to work with the large missile compartment (for example, a taller sail, larger control surfaces and more robust support systems)", "We would be spending more money (on more ships) to deliver less deterrence (reduced at-sea warhead presence) with less survivability (platforms that are less stealthy).", "Virginia-based SSBN design with a smaller missile. Some have encouraged the development of a new, smaller missile to go with a Virginia-based SSBN. This would carry forward many of the shortfalls of a Virginia-based SSBN we just discussed, and add to it a long list of new issues. Developing a new nuclear missile from scratch with an industrial base that last produced a new design more than 20 years ago would be challenging, costly and require extensive testing. We deliberately decided to extend the life of the current missile to decouple and de-risk the complex (and costly) missile development program from the new replacement submarine program. Additionally, a smaller missile means a shorter employment range requiring longer SSBN patrol transits. This would compromise survivability, require more submarines at sea and ultimately weaken our deterrence effectiveness. With significant cost, technical and schedule risks, there is little about this option that is attractive.", "Ohio-based SSBN design. Some have argued that we should re-open the Ohio production line and resume building the Ohio design SSBNs. This simply cannot be done because there is no Ohio production line. It has long since been re-tooled and modernized to build state-of-the-art Virginia-class SSNs using computerized designs and modular, automated construction techniques. Is it desirable to redesign the Ohio so that a ship with its legacy performance could be built using the new production facilities? No, since an Ohio-based SSBN would:", "\u2022 Not provide the required quieting due to Ohio design constraints and use of a propeller instead of a propulsor (which is the standard for virtually all new submarines)", "\u2022 Require 14 instead of 12 SSBNs by reverting to Ohio class operational availability standards (incidentally creating other issues with the New START treaty limits)", "\u2022 Suffer from reduced reliability and costs associated with the obsolescence of legacy Ohio system components ", "Once again, the end result would necessitate procuring more submarines (14) to provide the required at-sea presence and each of them would be less stealthy and less survivable against foreseeable 21 st century threats. ", "The Right Answer: A new design SSBN that improves on Ohio: What has emerged from the Navy's exhaustive analysis is an Ohio replacement submarine that starts with the foundation of the proven performance of the Ohio SSBN, its Trident II D5 strategic weapons system and its operating cycle. To this it adds:", "\u2022 Enhanced stealth as necessary to pace emerging threats expected over its service life ", "\u2022 Systems commonality with Virginia (pumps, valves, sonars, etc.) wherever possible, enabling cost savings in design, procurement, maintenance and logistics ", "\u2022 Modular construction and use of COTS equipment consistent with those used in today's submarines to reduce the cost of fabrication, maintenance and modernization. Total ownership cost reduction (for example, investing in a life-of-the-ship reactor core enables providing the same at-sea presence with fewer platforms).", "Although the Ohio replacement is a \"new design,\" it is in effect an SSBN that takes the best lessons from 50 years of undersea deterrence, from the Ohio, from the Virginia, from advances in shipbuilding efficiency and maintenance, and from the stern realities of needing to provide survivable nuclear deterrence. The result is a low-risk, cost-effective platform capable of smoothly transitioning from the Ohio and delivering effective 21 st century undersea strategic deterrence.", "16 vs. 20 SLBM Tubes", "Overview", "The Navy's decision to design Columbia-class boats with 16 SLBM tubes rather than 20 was one of several decisions the Navy made to reduce the estimated average procurement cost of boats 2 through 12 in the program toward a Navy target cost of $4.9 billion in FY2010 dollars. Some observers were concerned that designing the Columbia class with 16 tubes rather than 20 would create a risk that U.S. strategic nuclear forces might not have enough capability in the 2030s and beyond to fully perform their deterrent role. These observers noted that to comply with the New Start Treaty limiting strategic nuclear weapons, DOD plans to operate in coming years a force of 14 Trident SSBNs, each with 20 operable SLBM tubes (4 of the 24 tubes on each boat are to be rendered inoperable), for a total of 280 tubes, whereas the Navy in the Columbia-class program is planning a force of 12 SSBNs each with 16 tubes, for a total of 192 tubes, or about 31% less than 280. These observers also cited the uncertainties associated with projecting needs for strategic deterrent forces out to the year 2080, when the final Columbia-class boat is scheduled to leave service. These observers asked whether the plan to design the Columbia class with 16 tubes rather than 20 was fully supported within all parts of DOD, including U.S. Strategic Command (STRATCOM).", "In response, Navy and other DOD officials stated that the decision to design the Columbia class with 16 tubes rather than 20 was carefully considered within DOD, and that they believe a boat with 16 tubes will give U.S. strategic nuclear forces enough capability to fully perform their deterrent role in the 2030s and beyond.", "Testimony in 2011", "At a March 1, 2011, hearing before the House Armed Services Committee, Admiral Gary Roughead, then-Chief of Naval Operations, stated the following:", "I'm very comfortable with where we're going with SSBN-X. The decision and the recommendation that I made with regard to the number of tubes\u2014launch tubes are consistent with the new START treaty. They're consistent with the missions that I see that ship having to perform. And even though it may be characterized as a cost cutting measure, I believe it sizes the ship for the missions it will perform.", "At a March 2, 2011, hearing before the Strategic Forces subcommittee of the House Armed Services Committee, the following exchange occurred:", "REPRESENTATIVE TURNER: ", "General Kehler, thank you so much for your continued thoughts and of course your leadership. One item that we had a discussion on was the triad, of looking to\u2014of the Navy and the tube reductions of 20 to 16, as contained in other hearings on the Hill today. I would like your thoughts on the reduction of the tubes and what you see driving that, how you see it affecting our strategic posture and any other thoughts you have on that?", "AIR FORCE GENERAL C. ROBERT KEHLER, COMMANDER, U.S. STRATEGIC COMMAND ", "Thank you, Mr. Chairman. Well, first of all, sir, let me say that the\u2014in my mind anyway, the discussion of Trident and Ohio-class replacement is really a discussion in the context of the need to modernize the entire triad. And so, first of all, I think that it's important for us to recognize that that is one piece, an important piece, but a piece of the decision process that we need to go through.", "Second, the issue of the number of tubes is not a simple black-and-white answer. So let me just comment here for a minute.", "First of all, the issue in my mind is the overall number of tubes we wind up with at the end, not so much as the number of tubes per submarine.", "Second, the issue is, of course, we have flexibility and options with how many warheads per missile per tube, so that's another consideration that enters into this mixture.", "Another consideration that is important to me is the overall number of boats and the operational flexibility that we have with the overall number of boats, given that some number will need to be in maintenance, some number will need to be in training, et cetera.", "And so those and many other factors\u2014to include a little bit of foresight here, in looking ahead to 20 years from now in antisubmarine warfare environment that the Navy will have to operate in, all of those bear on the ultimate sideways shape configuration of a follow-on to the Ohio.", "At this point, Mr. Chairman, I am not overly troubled by going to 16 tubes. As I look at this, given that we have that kind of flexibility that I just laid out; given that this is an element of the triad and given that we have some decision space here as we go forward to decide on the ultimate number of submarines, nothing troubles me operationally here to the extent that I would oppose a submarine with 16 tubes.", "I understand the reasons for wanting to have 20. I understand the arguments that were made ahead of me. But as I sit here today, given the totality of the discussion, I am\u2014as I said, I am not overly troubled by 16. Now, I don't know that the gavel has been pounded on the other side of the river yet with a final decision, but at this point, I am not overly troubled by 16.", "At an April 5, 2011, hearing before the Strategic Forces subcommittee of the House Armed Services Committee, the following exchange occurred:", "REPRESENTATIVE LARSEN: ", "General Benedict, we have had this discussion, not you and I, I am sorry. But the subcommittee has had a discussion in the past with regards to the Ohio-class replacement program.", "The new START, though, when it was negotiated, assumed a reduction from 24 missile tubes per hole to, I think, a maximum a maximum of 20.", "The current configuration [for the Columbia class], as I understand it, would move from 24 to 16.", "Can you discuss, for the subcommittee here, the Navy's rationale for that? For moving from 24 to 16 as opposed to the max of 20?", "NAVY REAR ADMIRAL TERRY BENEDICT, DIRECTOR, STRATEGIC SYSTEMS PROGRAMS (SSP): ", "Sir, as part\u2014excuse me, as part of the work-up for the milestone A [review for the Columbia class program] with Dr. Carter in OSD, SSP supported the extensive analysis at both the OSD level as well as STRATCOM's analysis.", "Throughout that process, we provided, from the SWS [strategic weapon system] capability, our perspective. Ultimately that was rolled up into both STRATCOM and OSD and senior Navy leadership and in previous testimony, the secretary of the Navy, the CNO, and General Chilton have all expressed their confidence that the mission of the future, given their perspectives, is they see the environment today can be met with 16.", "And so, as the acquisition and the SWS provider, we are prepared to support that decision by leadership, sir.", "REPRESENTATIVE LARSEN: ", "Yes.", "And your analysis supports\u2014did your analysis that fed into this, did you look at specific numbers then?", "REARD ADMIRAL BENEDICT: ", "Sir, we looked at the ability of the system, again, SSP does not look at specific targets with...", "REPRESENTATIVE LARSEN: ", "Right. Yes, yes, yes.", "REAR ADMIRAL BENEDICT: ", "Our input was the capability of the missile, the number of re-entry bodies and the throw weight that we can provide against those targets and based on that analysis, the leadership decision was 16, sir.", "At an April 6, 2011, hearing before the Strategic Forces subcommittee of the Senate Armed Services Committee, the following exchange occurred:", "SENATOR SESSIONS:", "Admiral Benedict, according to recent press reports, the Navy rejected the recommendations of Strategic Command to design the next generation of ballistic missile submarines with 20 missile tubes instead of opting for only 16 per boat.", "What is the basis for the Navy's decision of 16? And I'm sure cost is a factor. In what ways will that decision impact the overall nuclear force structure associated with the command?", "NAVY REAR ADMIRAL TERRY BENEDICT, DIRECTOR, STRATEGIC SYSTEMS PROGRAMS (SSP): ", "Yes, sir. SSP supported the Navy analysis, STRATCOM's analysis, as well as the OSD analysis, as we proceeded forward and towards the Milestone A decision [on the Columbia class program] that Dr. Carter conducted.", "Based on our input, which was the technical input as the\u2014as the director of SSP, other factors were considered, as you stated. Cost was one of them. But as the secretary, as the CNO, and I think as General Kehler submitted in their testimony, that given the threats that we see today, given the mission that we see today, given the upload capability of the D-5, and given the environment as they saw today, all three of those leaders were comfortable with the decision to proceed forward with 16 tubes, sir.", "SENATOR SESSIONS: ", "And is that represent your judgment? To what extent were you involved\u2014were you involved in that?", "REAR ADMIRAL BENEDICT: ", "Sir, we were involved from technical aspects in terms of the capability of the missile itself, what we can throw, our range, our capability. And based on what we understand the capability of the D-5 today, which will be the baseline missile for the Ohio Replacement Program, as the director of SSP I'm comfortable with that decision.", "Section 242 Report", "Section 242 of the FY2012 National Defense Authorization Act ( H.R. 1540 / P.L. 112-81 of December 31, 2011) required DOD to submit a report on the Columbia-class program that includes, among other things, an assessment of various combinations of boat quantities and numbers of SLBM launch tubes per boat. The text of the section is as follows:", "SEC. 242. REPORT AND COST ASSESSMENT OF OPTIONS FOR OHIO-CLASS REPLACEMENT BALLISTIC MISSILE SUBMARINE.", "(a) Report Required- Not later than 180 days after the date of the enactment of this Act, the Secretary of the Navy and the Commander of the United States Strategic Command shall jointly submit to the congressional defense committees a report on each of the options described in subsection (b) to replace the Ohio-class ballistic submarine program. The report shall include the following:", "(1) An assessment of the procurement cost and total life-cycle costs associated with each option.", "(2) An assessment of the ability for each option to meet\u2014", "(A) the at-sea requirements of the Commander that are in place as of the date of the enactment of this Act; and", "(B) any expected changes in such requirements.", "(3) An assessment of the ability for each option to meet\u2014", "(A) the nuclear employment and planning guidance in place as of the date of the enactment of this Act; and", "(B) any expected changes in such guidance.", "(4) A description of the postulated threat and strategic environment used to inform the selection of a final option and how each option provides flexibility for responding to changes in the threat and strategic environment.", "(b) Options Considered- The options described in this subsection to replace the Ohio-class ballistic submarine program are as follows:", "(1) A fleet of 12 submarines with 16 missile tubes each.", "(2) A fleet of 10 submarines with 20 missile tubes each.", "(3) A fleet of 10 submarines with 16 missile tubes each.", "(4) A fleet of eight submarines with 20 missile tubes each.", "(5) Any other options the Secretary and the Commander consider appropriate.", "(c) Form- The report required under subsection (a) shall be submitted in unclassified form, but may include a classified annex.", "Subsection (c) above states the report \"shall be submitted in unclassified form, but may include a classified annex.\"", "The report as submitted was primarily the classified annex, with a one-page unclassified summary, the text of which is as follows (underlining as in the original):", "The National Defense Authorization Act (NDAA) for Fiscal Year 2012 (FY12) directed the Secretary of the Navy and the Commander of U.S. Strategic Command (USSTRATCOM) to jointly submit a report to the congressional defense committees comparing four different options for the OHIO Replacement (OR) fleet ballistic missile submarine (SSBN) program. Our assessment considered the current operational requirements and guidance. The four SSBN options analyzed were: ", "1.12 SSBNs with 16 missile tubes each", "2.10 SSBNs with 20 missile tubes each", "3.10 SSBNs with 16 missile tubes each", "4.8 SSBNs with 20 missile tubes each", "The SSBN force continues to be an integral part of our nuclear Triad and contributes to deterrence through an assured second strike capability that is survivable, reliable, and credible. The number of SSBNs and their combined missile tube capacity are important factors in our flexibility to respond to changes in the threat and uncertainty in the strategic environment. ", "We assessed each option against the ability to meet nuclear employment and planning guidance, ability to satisfy at-sea requirements, flexibility to respond to future changes in the postulated threat and strategic environment, and cost. In general, options with more SSBNs can be adjusted downward in response to a diminished threat; however, options with less SSBNs are more difficult to adjust upward in response to a growing threat. ", "Clearly, a smaller SSBN force would be less expensive than a larger force, but for the reduced force options we assessed, they fail to meet current at-sea and nuclear employment requirements, increase risk in force survivability, and limit flexibility in response to an uncertain strategic future. Our assessment is the program of record, 12 SSBNs with 16 missile tubes each, provides the best balance of performance, flexibility, and cost meeting commander's requirements while supporting the Nation's strategic deterrence mission goals and objectives. ", "The classified annex contains detailed analysis that is not releasable to the public.", "Appendix E. National Sea-Based Deterrence Fund (NSBDF)", "This appendix provides additional background information on the National Sea-Based Deterrence Fund (NSBDF).", "Created by P.L. 113-291", "Section 1022 of the Carl Levin and Howard P. \"Buck\" McKeon National Defense Authorization Act for Fiscal Year 2015 ( H.R. 3979 / P.L. 113-291 of December 19, 2014) created the National Sea-Based Deterrence Fund (NSBDF), a fund in the DOD budget, codified at 10 U.S.C. 2218a, that is separate from the Navy's regular shipbuilding account (which is formally known as the Shipbuilding and Conversion, Navy, or SCN, appropriation account).", "Amended by P.L. 114-92 , P.L. 114-328 , and P.L. 115-91", "Section 1022 of the FY2016 National Defense Authorization Act ( S. 1356 / P.L. 114-92 of November 25, 2015), Section 1023 of the FY2017 National Defense Authorization Act ( S. 2943 / P.L. 114-328 of December 23, 2016), and Section 1022 of the FY2018 National Defense Authorization Act ( H.R. 2810 / P.L. 115-91 of December 12, 2017) amended 10 U.S.C. 2218a to provide additional acquisition authorities for the NSBDF.", "Text as Amended", "The text of 10 U.S.C. 2218a, as amended, is as follows:", "\u00a72218a. National Sea-Based Deterrence Fund", "(a) Establishment.-There is established in the Treasury of the United States a fund to be known as the \"National Sea-Based Deterrence Fund\".", "(b) Administration of Fund.-The Secretary of Defense shall administer the Fund consistent with the provisions of this section.", "(c) Fund Purposes.-(1) Funds in the Fund shall be available for obligation and expenditure only for construction (including design of vessels), purchase, alteration, and conversion of national sea-based deterrence vessels.", "(2) Funds in the Fund may not be used for a purpose or program unless the purpose or program is authorized by law.", "(d) Deposits.-There shall be deposited in the Fund all funds appropriated to the Department of Defense for construction (including design of vessels), purchase, alteration, and conversion of national sea-based deterrence vessels.", "(e) Expiration of Funds After 5 Years.-No part of an appropriation that is deposited in the Fund pursuant to subsection (d) shall remain available for obligation more than five years after the end of fiscal year for which appropriated except to the extent specifically provided by law.", "(f) Authority to Enter Into Economic Order Quantity Contracts.-(1) The Secretary of the Navy may use funds deposited in the Fund to enter into contracts known as \"economic order quantity contracts\" with private shipyards and other commercial or government entities to achieve economic efficiencies based on production economies for major components or subsystems. The authority under this subsection extends to the procurement of parts, components, and systems (including weapon systems) common with and required for other nuclear powered vessels under joint economic order quantity contracts.", "(2) A contract entered into under paragraph (1) shall provide that any obligation of the United States to make a payment under the contract is subject to the availability of appropriations for that purpose, and that total liability to the Government for termination of any contract entered into shall be limited to the total amount of funding obligated at time of termination.", "(g) Authority to Begin Manufacturing and Fabrication Efforts Prior to Ship Authorization.-(1) The Secretary of the Navy may use funds deposited into the Fund to enter into contracts for advance construction of national sea-based deterrence vessels to support achieving cost savings through workload management, manufacturing efficiencies, or workforce stability, or to phase fabrication activities within shipyard and manage sub-tier manufacturer capacity.", "(2) A contract entered into under paragraph (1) shall provide that any obligation of the United States to make a payment under the contract is subject to the availability of appropriations for that purpose, and that total liability to the Government for termination of any contract entered into shall be limited to the total amount of funding obligated at time of termination.", "(h) Authority to Use Incremental Funding to Enter Into Contracts for Certain Items.-(1) The Secretary of the Navy may use funds deposited into the Fund to enter into incrementally funded contracts for advance procurement of high value, long lead time items for nuclear powered vessels to better support construction schedules and achieve cost savings through schedule reductions and properly phased installment payments.", "(2) A contract entered into under paragraph (1) shall provide that any obligation of the United States to make a payment under the contract is subject to the availability of appropriations for that purpose, and that total liability to the Government for termination of any contract entered into shall be limited to the total amount of funding obligated at time of termination.", "(i) Authority for Multiyear Procurement of Critical Components to Support Continuous Production.-(1) To implement the continuous production of critical components, the Secretary of the Navy may use funds deposited in the Fund, in conjunction with funds appropriated for the procurement of other nuclear-powered vessels, to enter into one or more multiyear contracts (including economic ordering quantity contracts), for the procurement of critical contractor-furnished and Government-furnished components for critical components of national sea-based deterrence vessels. The authority under this subsection extends to the procurement of equivalent critical components common with and required for other nuclear-powered vessels.", "(2) In each annual budget request submitted to Congress, the Secretary shall clearly identify funds requested for critical components and the individual ships and programs for which such funds are requested.", "(3) Any contract entered into pursuant to paragraph (1) shall provide that any obligation of the United States to make a payment under the contract is subject to the availability of appropriations for that purpose and that the total liability to the Government for the termination of the contract shall be limited to the total amount of funding obligated for the contract as of the date of the termination.", "(j) Budget Requests.-Budget requests submitted to Congress for the Fund shall separately identify the amount requested for programs, projects, and activities for construction (including design of vessels), purchase, alteration, and conversion of national sea-based deterrence vessels.", "(k) Definitions.-In this section:", "(1) The term \"Fund\" means the National Sea-Based Deterrence Fund established by subsection (a).", "(2) The term \"national sea-based deterrence vessel\" means any submersible vessel constructed or purchased after fiscal year 2016 that is owned, operated, or controlled by the Department of Defense and that carries operational intercontinental ballistic missiles.", "(3) The term \"critical component\" means any of the following:", "(A) A common missile compartment component.", "(B) A spherical air flask.", "(C) An air induction diesel exhaust valve.", "(D) An auxiliary seawater valve.", "(E) A hovering valve.", "(F) A missile compensation valve.", "(G) A main seawater valve.", "(H) A launch tube.", "(I) A trash disposal unit.", "(J) A logistics escape trunk.", "(K) A torpedo tube.", "(L) A weapons shipping cradle weldment.", "(M) A control surface.", "(N) A launcher component.", "(O) A propulsor.", "Precedents for Funding Navy Acquisition Programs Outside Navy Appropriation Accounts", "Prior to the establishment of the NSBDF, some observers had suggested funding the procurement of Columbia-class boats outside the Navy's shipbuilding budget, so as to preserve Navy shipbuilding funds for other Navy shipbuilding programs. There was some precedent for such an arrangement", "Construction of certain DOD sealift ships and Navy auxiliary ships was funded in past years in the National Defense Sealift Fund (NDSF), a part of DOD's budget that is outside the Shipbuilding and Conversion, Navy (SCN) appropriation account, and also outside the procurement title of the DOD appropriations act. Most spending for ballistic missile defense (BMD) programs (including procurement-like activities) is funded through the Defense-Wide research and development and procurement accounts rather than through the research and development and procurement accounts of the individual military services.", "A rationale for funding DOD sealift ships in the NDSF had been that DOD sealift ships perform a transportation mission that primarily benefits services other than the Navy, and therefore should not be forced to compete for funding in a Navy budget account that funds the procurement of ships central to the Navy's own missions. A rationale for funding BMD programs together in the Defense-Wide research and development account is that this makes potential trade-offs in spending among various BMD programs more visible and thereby helps to optimize the use of BMD funding.", "Potential Implications of NSBDF on Funding Available for Other Programs", "The NSBDF has at least two potential implications for the impact that the Columbia-class program may have on funding available in coming years for other DOD acquisition programs", "A principal apparent intent in creating the NSBDF is to help preserve funding in coming years for other Navy programs, and particularly Navy shipbuilding programs other than the Columbia-class program, by placing funding for the Columbia-class program in a location within the DOD budget that is separate from the Navy's shipbuilding account and the Navy's budget in general. Referring to the fund as a national fund and locating it outside the Navy's budget appears intended to encourage a view (consistent with an argument made by supporters of the Columbia-class program that the program is intended to meet a national military need rather than a Navy-specific need) that funding for the Columbia-class program should be resourced from DOD's budget as a whole, rather than from the Navy's budget in particular. The acquisition authorities in subsections (f), (g), (h), and (i) of 10 U.S.C. 2218a, which were added by P.L. 114-92 and P.L. 114-328 , could marginally reduce the procurement costs of not only Columbia-class boats, but also other nuclear-powered ships, such as Virginia-class attack submarines and Gerald R. Ford (CVN-78) class aircraft carriers, by increasing economies of scale in the production of ship components and better optimizing ship construction schedules.", "The joint explanatory statement for the FY2016 National Defense Authorization Act ( S. 1356 / P.L. 114-92 of November 25, 2015) directed DOD to submit a report on the \"acquisition strategy to build Ohio-class replacement submarines that will leverage the enhanced procurement authorities provided in the [NSBDF] ... .\" Among other things, the report was to identify \"any additional authorities the Secretary [of Defense] may need to make management of the Ohio-class replacement more efficient....\" The Navy submitted the report on April 18, 2016. The report states in part that", "the high cost for this unique, next generation strategic deterrent requires extraordinary measures to ensure its affordability. Further, procuring the OHO Replacement (OR), the next generation SSBN, within the current shipbuilding plan presents an extreme challenge to the Navy's shipbuilding budget. To minimize this challenge and reduce OR schedule risk, the Navy proposes to leverage those authorities provided by the National Sea-Based Deterrence Fund (NSBDF) in conjunction with the employment of best acquisition practices on this critical program....", "... the Navy is continuing to identify opportunities to further acquisition efficiency, reduce schedule risk, and improve program affordability. Most notably in this regard, the Navy is currently assessing [the concept of] Continuous Production [for producing components of Columbia-class boats more efficiently than currently scheduled] and will keep Congress informed as we quantify the benefits of this and other initiatives that promise substantial savings....", "... the Navy's initial assessment is that the authorities and further initiatives described [in this report] will be essential to achieving the reductions to acquisition cost and schedule risk that are so critical to success on the OR program....", "Section 1022 of the FY2016 NDAA authorized the use of funds in the NSBDF to enter into contracts for EOQ [Economic Order Quantity purchases of materials and equipment] and AC [advance construction activities in shipyards], and to incrementally fund contracts for AP [advance procurement] of specific components. These authorities are essential to successfully executing the OR acquisition strategy. The Navy is able to take advantage of these authorities largely due to how its submarine shipbuilding plan is phased....", "Economic Order Quantity contracts provide substantial cost savings to the Navy from procuring materials and equipment in bulk quantities. In addition to the cost savings typically associated with EOQ authority, the Navy has identified an opportunity to implement EOQ procurements to achieve OR schedule efficiencies and commonality contract actions with VCS [Virginia-class submarine] Block V [boats] and CVN [nuclear-powered aircraft carriers]....", "Advance Construction is the authority to begin [shipyard] construction [work] in fiscal years of AP [advance procurement] budget requests prior to the full funding/authorization year of a hull. Early manufacturing activities help retire construction risk for first-of-a-kind efforts, ease transition from design to production, and provide efficiencies in shipyard construction workload. Advance Construction would allow the shipbuilders to begin critical path construction activities earlier, thus reducing risk to the OR delivery schedule....", "The FY2016 NDAA allows the Navy and shipbuilders to enter into incrementally funded procurements for long lead components that employ both AP and Full Funding (FF) SCN increments. This funding approach will provide significant schedule improvements and cost savings by maximizing the utilization of limited funding....", "Maximum economic advantage can be obtained through Continuous Production. Procuring components and systems necessary for Continuous Production lines [as opposed to production lines that experience periods during which they are without work] would provide opportunities for savings through manufacturing efficiencies, increased [production-line] learning and the retention of critical production skills. In addition to lowering costs, Continuous Production would reduce schedule risk for both the U.S. and UK SSBN construction programs and minimize year-to-year funding spikes. To execute Continuous Production, the Navy requires authority to enter into contracts to procure contractor furnished and government furnished components and systems for OR SSBNs.", "OR Missile Tube and Missile Tube Module component procurement through Continuous Production lines have been identified as the most efficient and affordable procurement strategy.... Missile Tube Continuous Production could achieve an average reduction of 25 percent in Missile Tube procurement costs across the [Columbia] Class. These savings are compared to [the] single shipset procurement costs [that are] included in the PB17 PoR [the program of record reflected in the President's (proposed) Budget for FY2017]....", "The Navy estimates that procuring Missile Tube Modules in Continuous Production lines would result in a cumulative one year schedule reduction in Missile Tube Module manufacturing for the OR Class. This schedule reduction, on a potential critical path assembly, would reduce ship delivery risk and increase schedule margin for follow ship deliveries. In addition to improving schedule, Missile Tube Module Continuous Production (including Strategic Weapon System (SWS) Government Furnished Equipment (GFE)) would produce savings as high as 20 percent compared to single shipset procurement costs included in the PB17 PoR. Executing Continuous Production of Missile Tubes or Missile Tube Modules requires re-phasing of funding from outside the PB17 Future Year's Defense Program (FYDP) [to years that are within the FYDP] but results in significant overall program reductions. The Navy is evaluating additional Continuous Production opportunities for nuclear and nonnuclear components with common vendors required for VIRGINIA Class submarines and FORD Class aircraft carriers. Some examples include spherical air flasks, hull valves, pressure hull hemi heads, bow domes, castings, and torpedo tubes. The prerequisite to Continuous Production in each of these cases would be an affirmation of design stability consistent with completion of first article testing, or its equivalent....", "The Navy's position on the cost benefits of these authorities is not fully developed. However, the Congressional Budget Office stated in its Analysis of the Navy's FY2016 Shipbuilding Plan , \" ... the Navy could potentially save several hundred million dollars per submarine by purchasing components and materials for several submarines at the same time.\"... The Navy's initial cost analysis aligns with CBO's projections, and the cost reductions from employing these acquisition authorities will be further evaluated to support the Navy's updated OR Milestone B cost estimate in August 2016....", "The Under Secretary of Defense for Acquisition, Technology and Logistics (USD AT&L) approved the OR Program Acquisition Strategy on January 4, 2016. This strategy emphasizes using alternative acquisition tools and cross-platform contracting to reduce schedule risk and lower costs in support of the Navy's shipbuilding programs....", "To reduce costs and help alleviate fiscal pressures, the Navy will work with Congress to implement granted authorities and explore the additional initiatives identified in this report.... The cost reductions from employing the granted and proposed acquisition authorities will be further evaluated to support the Navy's updated OR Milestone B cost estimate in August 2016.... These authorities are needed with the National Sea-Based Deterrence Fund, RDTEN [research, development, test, and evaluation, Navy], and SCN appropriations accounts. Together, these acquisition tools will allow the Navy, and the shipbuilders, to implement the procurement strategy which will reduce total OR acquisition costs and shorten construction schedules for a program with no margin for delay."], "subsections": []}]}]}}
{"id": "R45287", "title": "Private Bills: Procedure in the House", "released_date": "2019-05-15T00:00:00", "summary": ["A private bill is one that provides benefits to specified individuals (including corporate bodies). Individuals sometimes request relief through private law when administrative or legal remedies are exhausted, but Congress seems more often to view private legislation as appropriate when no other remedy is available and when enactment would, in a broad sense, afford equity. From 1817 through 1971, most Congresses enacted hundreds of private laws, but since then, the number has declined significantly as Congress has expanded administrative discretion to deal with many of the situations that tended to give rise to private bills. Since 2007, four private laws have been enacted. Private provisions are also occasionally included in public legislation. The Senate considers private bills using the same procedures that are used to consider other legislation."], "reports": {"section_title": "", "paragraphs": ["A private bill is one that provides benefits to specified individuals (including corporate bodies). Individuals sometimes request relief through private law when administrative or legal remedies are exhausted, but Congress seems more often to view private legislation as appropriate when no other remedy is available and when enactment would, in a broad sense, afford equity. From 1817 through 1971, most Congresses enacted hundreds of private laws, but since then the number has declined significantly as Congress has expanded administrative discretion to deal with many of the situations that tended to give rise to private bills. Since 2007, four private laws have been enacted. Private provisions are also occasionally included in public legislation. The Senate considers private bills using the same procedures that are used to consider other legislation."], "subsections": [{"section_title": "Subjects of Private Bills", "paragraphs": ["No House rule defines what bills qualify as private, but most private bills have official titles stating them to be \"for the relief of\" named individuals. House Rule XII, clause 4, prohibits the introduction or consideration of private bills for granting pensions, constructing certain bridges, correcting military or naval records, or settling claims eligible for action under the Tort Claims Act ( U.S. Code , Title 28). Subjects of contemporary private bills (and House committees receiving referral of those bills) include the following:", "Immigration (e.g., residency status, visa classification): Judiciary Domestic claims against the government: Judiciary Foreign claims against the government: Foreign Affairs Patents and copyrights: Judiciary Vessel documentation: Transportation and Infrastructure Taxation (e.g., income tax liability, tariff exemptions): Ways and Means Public lands (e.g., sales, claims, exchanges, mineral leases): Natural Resources Veterans' benefits: Veterans' Affairs Civil Service status: Oversight and Reform Medical (e.g., drug approvals, HMO enrollment requirements): Energy and Commerce Military decorations: Armed Services"], "subsections": []}, {"section_title": "Introduction of Private Bills", "paragraphs": ["Private bills are introduced and referred in the same way as other measures. They are commonly introduced by the Member who represents the individual to be benefitted. Seldom are companion bills introduced in both chambers. Although House Rule XII, clause 7, permits no cosponsors on private bills, cosponsors have occasionally appeared on private bills that attract broad interest."], "subsections": []}, {"section_title": "Committee Consideration", "paragraphs": ["Immigration and claims matters have long been the most common subjects of private bills. The Committee on the Judiciary refers these to its Subcommittee on Immigration and Citizenship, which handles them routinely under established committee rules. It generally takes no action on a private bill unless its sponsor submits specified documentation and requests a hearing. The sponsor is generally the only witness at such a hearing. The subcommittee makes available to Member offices information on what documentation it requires and the kinds of bills on which it is likely to take favorable action. It usually declines to report a bill if its records show few precedents for favorable House action in similar cases. Panels that handle other kinds of private legislation have no similarly institutionalized procedures."], "subsections": []}, {"section_title": "Floor Consideration", "paragraphs": ["House Rule XV, clause 5, establishes special procedures for the consideration of private bills. When reported, private bills go on a dedicated calendar, the Private Calendar (House Rule XIII, clause 1). On the first Tuesday of each month, the Speaker is to direct the Clerk to call the bills and resolutions that are pending on the Private Calendar. Each bill is called up automatically in the order in which it was reported and placed on the Calendar. The bills are considered under a hybrid set of procedures known as \"the House as in Committee of the Whole,\" meaning that there is no period of general debate, but debate and amendment may occur under the five-minute rule. Usually, however, no debate occurs, and private measures are disposed of by voice vote. At his or her discretion, the Speaker may also, on any other day of the month, call up for consideration a bill or resolution that has been pending on the Private Calendar for at least seven days, providing he or she has given two legislative days' notice of his or her intention to do so.", "During the call of the Private Calendar, if two Members object to the consideration of any bill, it is automatically recommitted. During a Congress, each party is to appoint official \"objectors\" who are responsible for examining bills on the Private Calendar and objecting to those they deem inappropriate. Sometimes, a member of a subcommittee dealing with immigration or claims has served simultaneously as an official objector. In practice, instead of objecting, objectors may ask that a bill be passed \"over, without prejudice,\" which gives sponsors an opportunity to discuss concerns with them informally before the next calendar call.", "If a private bill is recommitted, the committee may re-report it as a paragraph of an omnibus private bill, which has priority for consideration under Rule XV. At this stage, the substance of each original private bill may be defeated by majority vote by means of a motion to strike the paragraph out of the omnibus bill. Otherwise, each paragraph may be amended only by reducing amounts of money or providing limitations. After an omnibus private bill is passed, it is broken up again into separate bills for further action. In recent practice, committees seldom re-report private measures once they are recommitted, and the House does not appear to have considered an omnibus private bill in decades. ", "The House has sometimes considered private bills using other parliamentary mechanisms, such as the Suspension of the Rules procedure or by unanimous consent."], "subsections": []}, {"section_title": "Further Proceedings", "paragraphs": ["Further proceedings on private bills follow the general lawmaking process. Presidents have vetoed private bills, sometimes by pocket veto. Otherwise, Congress may override the veto in the same way as with public measures. Either house of Congress may also, by resolution, refer a private claims bill to the Court of Claims for a recommendation from a trial commissioner. These recommendations are requested occasionally and are strictly advisory, but they are often followed when requested."], "subsections": []}]}}
{"id": "R43590", "title": "Federal Workforce Statistics Sources: OPM and OMB", "released_date": "2019-03-25T00:00:00", "summary": ["This report describes online tools, reports, and data compilations created by the Office of Management and Budget (OMB) and the Office of Personnel Management (OPM) that contain statistics about federal employees and the federal workforce.", "The report also describes key characteristics of each resource and briefly discusses selected methodological differences, with the intention of facilitating the selection of appropriate data for specific purposes. This report is not intended to be a definitive list of all information on the federal workforce. It describes significant and recurring products that contain specific data often requested by Members or congressional staff."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["According to the Office of Personnel Management (OPM), the federal workforce is composed of an estimated 2.1 million civilian workers, and several federal agencies collect, compile, and publish statistics about this workforce. Source s may vary in their totals due to differences in how federal workforce statistics are compiled. Some sources rely on \"head counts\" of employees (OPM), some on total hours worked (such as the Office of Management and Budget [OMB]), some on surveys of employing agencies, and others on self-identification by workers surveyed in their homes. ", "In addition, federal civilian employee databases may exclude particular departments, agencies, or branches of government. Some may also account for temporary or seasonal employees (such as those employed by the U.S. Census) depending on the time of year the statistics are generated.", "This report focuses on differences in methodologies, including exclusions, and the frequency of data collection employed by OMB and OPM to determine the size and scope of the federal workforce. These differences will facilitate the selection of appropriate data for specific purposes."], "subsections": []}, {"section_title": "Comparing Methodologies: On-Board Personnel Versus Full-Time Equivalents2", "paragraphs": ["One example of a key methodological distinction is the difference between \"full-time equivalents\" (FTEs) and on-board personnel. The following two examples illustrate how the FTE and on-board methods can be used to derive different federal workforce totals. "], "subsections": [{"section_title": "Method 1: Full-Time Equivalent Employment (OMB)", "paragraphs": ["Full-time equivalent employment is defined as the total number of regular straight-time hours (not including overtime or holiday hours) worked by employees divided by the number of compensable hours applicable to each fiscal year. Work years, or FTEs, are not employee \"head counts.\" One work year, or one FTE, is equivalent to 2,080 hours of work.", " Table 1 offers examples in which there is a difference between the actual number of people and the number of FTEs working the same number of total hours. It also illustrates how measuring employment by hours can substantially change the perception of the number of employees it takes to accomplish the work.", "FTE employment numbers are used by OMB to manage employment in departments and agencies. The requirements for reporting FTE employment in the President's Budget are prescribed in Section 85 of OMB Circular No. A-11 on \"Estimating Employment Levels and the Employment Summary (Schedule Q).\"", "FTE data are published annually in OMB's the Budget of the United States Government under the individual department and agency accounts in the Appendix as well as in the Analytical Perspectives and Historical Tables volumes."], "subsections": []}, {"section_title": "Method 2: On-board Employment (OPM)", "paragraphs": ["OPM defines on-board employment as the number of employees in pay status at the end of the quarter. Data for on-board employment provide employee \"head count\" in most departments and agencies as of a particular date, including full-time, part-time, and seasonal employees. OPM's Employment and Trends report and OPM's FedScope database provide on-board employment headcounts.", "When calculating on-board personnel, the number of full-time, part-time, and seasonal workers at an agency is relevant. For example, an agency reporting 10 FTEs could conceivably report 20 \"on-board\" employees, depending on employees' work schedules.", "In addition, the \"on-board\" headcount may result in wide variances in employment numbers, depending on the specific date the employees are counted. For example, the Census Bureau hires 7,000 Census enumerators every 10 years. The federal on-board employees count is likely to be larger during the duration of their employment. "], "subsections": []}]}, {"section_title": "Office of Personnel Management", "paragraphs": ["OPM is an independent agency that functions as the central human resources department of the executive branch. In fulfilling its mission, OPM collects, maintains, and publishes data on a large portion of the federal civilian workforce. ", "In FY2010, OPM established a system called the Enterprise Human Resources Integration-Statistical Data Mart (EHRI-SDM). This automated system provides access to personnel data for 96% of nonpostal federal civilian executive branch employees. The database does have exclusions; for example, not all executive branch agencies submit their personnel data to OPM. These exclusions include some national security and intelligence agencies, and the Postal Service. Even with these exclusions, the EHRI-SDM is widely regarded as the most comprehensive resource available on the size and scope of the federal workforce.", "More than 100 data elements are collected for each federal employee within the EHRI-SDM. These data are aggregated by OPM and published in the resources described below. "], "subsections": [{"section_title": "FedScope", "paragraphs": ["FedScope is a website that provides public access to the EHRI-SDM, covering the most recent five years of employment, accession, and separation data provided by approximately 120 federal agencies. It is available at http://www.fedscope.opm.gov/ .", "FedScope data are presented in five subject categories, called \"cubes,\" each covering a different subject and time span. The following are descriptions of the data cubes available through FedScope:", "Employment . This set of cubes contains the total number of federal employees of the included agencies, as well as other information such as age, gender, length of service, occupation, occupation category, pay grade, salary level, type of appointment, work schedule, agency, and location. Data are published quarterly (March, June, September, and December) for the most recent eight fiscal years. September data, which align with the end of the fiscal year, are available from 1998 to the present. Accession . This set of cubes contains the number of people added to the federal civilian workforce each fiscal year. It includes data elements on employees hired from outside the government and those who transferred from one type of federal service category to another. The most recent 14 fiscal years of data are available. Separation . This set of cubes contains the number of people who leave the federal civilian workforce each fiscal year. It captures data elements on employees who transferred to other agencies, voluntarily resigned, retired, experienced a reduction-in-force (RIF), were terminated, or died while employed. The most recent 14 years of data are available. Employment Trends . This set of cubes displays the most recent five years of employment cube data together in one interface, facilitating workforce data comparisons and trend recognition. Diversity . This set of cubes sorts data by an Ethnicity and Race Indicator. Data elements for 13 categories of racial and ethnic groups are available for the most recent eight years. September data, which align with the end of the fiscal year, are available from 2006 to the present. ", " Table 2 provides some of the most commonly requested data available from FedScope."], "subsections": []}, {"section_title": "Employment and Trends", "paragraphs": ["Employment and Trends is an occasional publication from OPM based on on-board employee data. It provides data on executive departments and independent agencies, including the Department of Defense (DOD) civilian employees, Executive Office of the President, legislative branch, and judicial branch. It presents selected data in detailed statistical tables and includes information by government branch, agency, and location. Introductory material in Employment and Trends explains the data presented, time lags in data releases, and caveats to consider when calculating workforce totals. The most recently released version of this resource is available at http://www.opm.gov/policy-data-oversight/data-analysis-documentation/federal-employment-reports/#url=Employment-Trends ."], "subsections": []}, {"section_title": "Common Characteristics of Government", "paragraphs": ["Common Characteristics of Government is an annual publication that includes a brief outline of OPM's federal employee databases and it includes frequently requested data. The latest edition (FY2017) is available at https://www.opm.gov/policy-data-oversight/data-analysis-documentation/federal-employment-reports/common-characteristics-of-the-government/ccog2017.pdf ."], "subsections": []}, {"section_title": "Sizing Up the Executive Branch of the Federal Workforce", "paragraphs": ["Sizing Up the Executive Branch of the Federal Workforce is an OPM report that provides access to frequently requested data related to the executive branch. This report includes some information related to the size of the executive branch by month and year, types of employment, and other frequently requested data. The most recent report (FY2017) is available at https://www.opm.gov/policy-data-oversight/data-analysis-documentation/federal-employment-reports/reports-publications/sizing-up-the-executive-branch-2016.pdf ."], "subsections": []}]}, {"section_title": "Office of Management and Budget", "paragraphs": ["OMB is the largest component of the Executive Office of the President. OMB reports directly to the President, and it assists executive departments and agencies in implementing priorities and commitments of the President. OMB produces the Budget of the United States , which includes federal employee statistics created using the FTE counting method. "], "subsections": [{"section_title": "Budget of the United States", "paragraphs": ["The Budget of the United States , sometimes referred to as the President's Budget, is a four-volume set of documents that includes detailed financial information on individual programs and appropriations accounts. Three volumes of the budget include information on direct civilian FTEs. Tables in the President's Budget typically include actual FTE levels for prior fiscal years and estimates for the two most current fiscal years. The U.S. Government Publishing Office website posts budget volumes dating back to FY1996 at https://www.govinfo.gov/app/collection/BUDGET/ .", " Table 3 illustrates an example of some commonly requested federal employment data found within the President's Budget.", "The following volumes of the President's Budget include information on federal employees. The current volumes can be accessed at https://www.whitehouse.gov/omb/budget ."], "subsections": [{"section_title": "Analytical Perspectives", "paragraphs": ["The Analytical Perspectives volume typically includes information on the federal workforce, sometimes including information on occupations, trends, education level, age distribution, and other factors. The most current Analytical Perspectives volume of the President's Budget is available at http://www.whitehouse.gov/omb/analytical-perspectives/ ."], "subsections": []}, {"section_title": "Appendix", "paragraphs": ["The Appendix volume typically includes an estimate of individual agency FTEs based on the President's proposal along with an estimate and actual FTE count for the prior two years. The most recent Appendix volume of the President's Budget is available at http://www.whitehouse.gov/omb/appendix ."], "subsections": []}, {"section_title": "Historical Tables", "paragraphs": ["The Historical Tables volume of the President's Budget includes historical data on topics such as budget, receipts, outlays, and deficits. This volume also typically includes historical employment counts. The most recent Historical Tables volume of the President's Budget is available at http://www.whitehouse.gov/omb/historical-tables ."], "subsections": []}]}]}, {"section_title": "Consideration of Sources", "paragraphs": ["The resources described in this report contain data often requested by Members or congressional staff. The sources covered differ in the methodology, including exclusions, and the frequency of data collection. Users should be aware of these differences when using federal workforce statistics from these sources."], "subsections": []}]}}
{"id": "R44795", "title": "\u201cSanctuary\u201d Jurisdictions: Federal, State, and Local Policies and Related Litigation", "released_date": "2019-05-03T00:00:00", "summary": ["There is no official or agreed-upon definition of what constitutes a \"sanctuary\" jurisdiction, and there has been debate as to whether the term applies to particular states and localities. Moreover, state and local jurisdictions have varied reasons for opting not to cooperate with federal immigration enforcement efforts, including reasons not necessarily motivated by disagreement with federal policies, such as concern about potential civil liability or the costs associated with assisting federal efforts. But traditional sanctuary policies are often described as falling under one of three categories. First, so-called \"don't enforce\" policies generally bar state or local police from assisting federal immigration authorities. Second, \"don't ask\" policies generally bar certain state or local officials from inquiring into a person's immigration status. Third, \"don't tell\" policies typically restrict information sharing between state or local law enforcement and federal immigration authorities.", "One legal question relevant to sanctuary policies is the extent to which states, as sovereign entities, may decline to assist in federal immigration enforcement, and the degree to which the federal government can stop state measures that undermine federal objectives. The Tenth Amendment preserves the states' broad police powers, and states have frequently enacted measures that, directly or indirectly, address aliens residing in their communities. Under the doctrine of preemption\u2014derived from the Supremacy Clause\u2014Congress may displace many state or local laws pertaining to immigration. But not every state or local law touching on immigration matters is necessarily preempted; the measure must interfere with, or be contrary to, federal law to be rendered unenforceable. Further, the anti-commandeering doctrine, rooted in the Constitution's allocation of powers between the federal government and the states, prohibits Congress from forcing state entities to perform regulatory functions on the federal government's behalf, including in the context of immigration. A series of Supreme Court cases inform the boundaries of preemption and the anti-commandeering doctrine, with the Court most recently opining on the issue in Murphy v. NCAA.", "These dueling federal and state interests are front and center in numerous lawsuits challenging actions taken by the Trump Administration to curb states and localities from implementing sanctuary-type policies. Notably, Section 9(a) of Executive Order 13768, \"Enhancing Public Safety in the Interior of the United States,\" directs the Secretary of Homeland Security and the Attorney General to withhold federal grants from jurisdictions that willfully refuse to comply with 8 U.S.C. \u00a7 1373\u2014a statute that bars states and localities from prohibiting their employees from sharing with federal immigration authorities certain immigration-related information. The executive order further directs the Attorney General to take \"appropriate enforcement action\" against jurisdictions that violate Section 1373 or have policies that \"prevent or hinder the enforcement of federal law.\" To implement the executive order, the Department of Justice added new eligibility conditions to the Edward Byrne Memorial Justice Assistance Grant (Byrne JAG) Program and grants administered by the Justice Department's Office of Community Oriented Policing Services (COPS). These conditions tied eligibility to compliance with Section 1373 and other federal immigration priorities, like granting federal authorities access to state and local detention facilities housing aliens and giving immigration authorities notice before releasing from custody an alien wanted for removal.", "Several lawsuits were filed challenging the constitutionality of the executive order and new grant conditions. So far the courts that have reviewed these challenges\u2014principally contending that the executive order and grant conditions violate the separation of powers and anti-commandeering principles\u2014generally agree that the Trump Administration acted unconstitutionally. For instance, the Ninth Circuit Court of Appeals upheld a permanent injunction blocking enforcement of Section 9(a) against California. Additionally, two separate district courts permanently enjoined the Byrne JAG conditions as applied to Chicago and Philadelphia. In doing so, these courts concluded that the Supreme Court's most recent formulation of the anti-commandeering doctrine in Murphy requires holding Section 1373 unconstitutional. These lawsuits notwithstanding, the courts still recognize the federal government's pervasive, nearly exclusive role in immigration enforcement. This can be seen in the federal government's lawsuit challenging three California measures governing the state's regulation of private and public actors' involvement in immigration enforcement within its border. Although a district court opined that several measures likely were lawful exercises of the state's police powers, it also concluded that two provisions regulating private employers are likely unlawful under the Supremacy Clause. This ruling was mostly upheld on appeal, in which the Ninth Circuit additionally opined that a provision requiring the California attorney general to review the circumstances surrounding detained aliens' apprehension and transfer to detention facilities within the state also violates the Supremacy Clause."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The federal government is vested with the exclusive power to create rules governing alien entry and removal. However, the impact of alien migration\u2014whether lawful or unlawful\u2014is arguably felt most directly in the communities where aliens reside . State and local responses to unlawfully present aliens within their jurisdictions have varied considerably, particularly in determining the role th at state or local police should play in enforcing federal immigration law. At one end of the spectrum, some states and localities actively assist federal immigration authorities in identifying and apprehending aliens for removal. For example, jurisdictions sometimes enter into \"287(g) Agreements\" with the federal government, in which state or local law enforcement are deputized to perform certain immigration enforcement activities. Some states and localities have attempted to play an even greater role in immigration enforcement, in many cases because of perceptions that federal efforts have been inadequate. In the past, some have adopted measures that criminally sanction conduct believed to facilitate the presence of unlawfully present aliens and have also instructed police to actively work to detect such aliens as part of their regular duties. The adoption of these kinds of measures has waned considerably, though, after the Supreme Court's 2012 ruling in Arizona v. United States held that several provisions of one such enactment, Arizona's S.B. 1070, were preempted by federal immigration law. Subsequent lower court decisions struck down many other state and local measures that imposed criminal or civil sanctions on immigration-related activity.", "At the other end of the spectrum, some states and localities have been less willing to assist the federal government with its immigration enforcement responsibilities. Often dubbed \"sanctuary jurisdictions,\" some states and localities have adopted measures that limit their participation in enforcing federal immigration laws, including, for example, prohibiting police officers from assisting with federal efforts to identify and apprehend unlawfully present aliens within the state or locality's jurisdiction. That said, there is debate over both the meaning and application of the term \"sanctuary jurisdiction.\" Additionally, state and local jurisdictions have varied reasons for choosing not to cooperate with federal immigration enforcement efforts, including reasons not necessarily motivated by disagreement with federal immigration enforcement policies, such as concern about potential civil liability or the availability of state or local resources to assist federal immigration enforcement efforts. During President Donald Trump's first month in office, he issued an executive order, \"Enhancing Public Safety in the Interior of the United States,\" which, in part, seeks to encourage state and local cooperation with federal immigration enforcement and disincentivize state and local adoption of sanctuary policies. ", "This report discusses legal issues related to state and local measures limiting law enforcement cooperation with federal immigration authorities, as well as the federal government's efforts to counter those measures. It begins by providing a general explanation of the term \"sanctuary jurisdiction\" for the purpose of this report. Next, it provides an overview of constitutional principles underlying the relationship between federal immigration laws and related state and local measures, namely, preemption and the anti-commandeering doctrine. Then, it discusses various types of laws and policies adopted by states and localities to limit their participation with federal immigration enforcement efforts, which may give rise to a label of \"sanctuary jurisdiction,\" and federal efforts to counter those measures. Finally, the report concludes with a discussion of the lawsuits challenging the executive order targeting sanctuary jurisdictions and certain executive branch actions to implement the executive order. "], "subsections": []}, {"section_title": "What Is a Sanctuary Jurisdiction?", "paragraphs": ["State or local measures limiting police participation in immigration enforcement are not a recent phenomenon . Indeed, many of the recent \"sanctuary\"-type initiatives can be traced back to church activities designed to provide refuge\u2014or \"sanctuary\"\u2014to unauthorized Central American aliens fleeing civil unrest in the 1980s. A number of states and municipalities issued declarations in support of these churches' actions. Others went further and enacted more substantive measures intended to limit police involvement in federal immigration enforcement activities. These measures have included, among other things, restricting state and local police from arresting persons for immigration violations, limiting the sharing of immigration-related information with federal authorities, and barring police from questioning a person about his or her immigration status. ", "Still, there is no official definition of a \"sanctuary\" jurisdiction in federal statute or regulation. Broadly speaking, sanctuary jurisdictions are commonly understood to be those that have laws or policies designed to substantially limit involvement in federal immigration enforcement activities, though there is not necessarily a consensus as to the meaning of this term. Some jurisdictions have self-identified as a sanctuary (or some other similar term). For other jurisdictions, there might be disagreement regarding the accuracy of such a designation, particularly if state or local law enforcement cooperates with federal immigration authorities in some areas but not others. Any reference by this report to a policy of a particular jurisdiction is intended only to provide an example of the type of measure occasionally referenced in discussions of \"sanctuary\" policies. These references should not be taken to indicate CRS is of the view that a particular jurisdiction is a \"sanctuary\" for unlawfully present aliens."], "subsections": []}, {"section_title": "Legal Background", "paragraphs": ["The heart of the debate surrounding the permissible scope of sanctuary jurisdictions centers on the extent to which states, as sovereign entities, may decline to assist in federal efforts to enforce federal immigration law, and the degree to which the federal government can stop state action that undercuts federal objectives in a manner that is consistent with the Supremacy Clause and constitutional principles of federalism. . "], "subsections": [{"section_title": "The Supremacy Clause and Preemption", "paragraphs": ["The federal government's power to regulate immigration is both substantial and exclusive. This authority derives from multiple sources, including Congress's Article I powers to \"establish a uniform Rule of Naturalization\" and to \"regulate commerce with foreign nations, and among the several states,\" as well as the federal government's \"inherent power as sovereign to conduct relations with foreign nations.\" Rules governing the admission and removal of aliens, along with conditions for aliens' continued presence within the United States, are primarily contained in the Immigration and Nationality Act of 1952, as amended (INA). The INA further provides a comprehensive immigration enforcement regime that contains civil and criminal elements.", "Arizona v. United States reinforced the federal government's pervasive role in creating and enforcing the nation's immigration laws. The ruling invalidated several Arizona laws designed \"to discourage and deter the unlawful entry and presence of aliens and economic activity by persons unlawfully present in the United States\" as preempted by federal law. In doing so, the Court declared that \"[t]he Government of the United States has broad, undoubted power over the subject of immigration and the status of aliens.\" ", "As Arizona highlights, the doctrine of preemption is relevant in assessing state policies related to immigration. The preemption doctrine derives from the Constitution's Supremacy Clause, which states that the \"Constitution, and the laws of the United States ... shall be the supreme law of the land.\" Therefore, Congress, through legislation, can preempt (i.e., invalidate) state law. Preemption can be express or implied. Express preemption occurs when Congress enacts a law that explicitly expresses the legislature's intent to preempt state law. Preemption may be implied in two ways: (1)\u00a0when Congress intends the federal government to govern exclusively, inferred from a federal interest that is \"so dominant\" and federal regulation that is \"so pervasive\" in a particular area (called \"field preemption\"); or (2)\u00a0when state law conflicts with federal law so that it is impossible to comply with both sovereigns' regulations, or when the state law prevents the \"accomplishment and execution\" of Congress's objectives (called \"conflict preemption\"). Accordingly, any preemption analysis of the relationship between a federal statute and a state measure must be viewed through the lens of congressional intent.", "The Supremacy Clause establishes that lawful assertions of federal authority may preempt state and local laws, even in areas that are traditionally reserved to the states via the Tenth Amendment. One notable power reserved to the states is the \"police power\" to promote and regulate public health and safety, the general welfare, and economic activity within a state's jurisdiction. Using their police powers, states and municipalities have frequently enacted measures that, directly or indirectly, address aliens residing in their communities. ", "Yet despite the federal government's sweeping authority over immigration, the Supreme Court has cautioned that not \"every state enactment which in any way deals with aliens is a regulation of immigration and thus per se preempted\" by the federal government's exclusive power over immigration. Accordingly, in Arizona the Supreme Court reiterated that, \"[i]n preemption analysis, courts should assume that the historic police powers of the States are not superseded unless that was the clear and manifest purpose of Congress.\" For example, in Chamber of Commerce of the United States v. Whiting, the Supreme Court upheld an Arizona law\u2014related to the states' \"broad authority under their police powers to regulate the employment relationship to protect workers within the State\" \u2014that authorized the revocation of licenses held by state employers that knowingly or intentionally employ unauthorized aliens. Even though the Immigration Reform and Control Act of 1986 (IRCA) expressly preempted \"any State or local law imposing civil or criminal sanctions ... upon those who employ, or recruit or refer for a fee for employment, unauthorized aliens,\" the Supreme Court concluded that Arizona's law fit within IRCA's savings clause for state licensing regimes and thus was not preempted. "], "subsections": []}, {"section_title": "The Anti-Commandeering Doctrine", "paragraphs": ["Although the federal government's power to preempt state or local activity touching on immigration matters is extensive, this power is not absolute. The U.S. Constitution establishes a system of dual sovereignty between the federal government and the states, including by creating a national legislature with enumerated powers and reserving most other legislative powers to the states by way of the Tenth Amendment. The anti-commandeering doctrine derives from this structural allocation of power, which \"withholds from Congress the power to issue orders directly to the [s]tates\" and prevents Congress from directly compelling states \"to enact and enforce a federal regulatory program.\" Thus, the federal government cannot \"issue directives requiring the [s]tates to address particular problems, nor command the [s]tates' officers, or those of their political subdivisions, to administer or enforce a federal regulatory program.\" ", "Several Supreme Court rulings inform the boundaries of the anti-commandeering doctrine. First, in New York v. United States , the Court reviewed a constitutional challenge to provisions of a federal law that created a series of incentives for states to dispose of radioactive waste. The statute provided states the option of (1) regulating according to Congress's direction, or (2) taking title to, and possession of, the low-level radioactive waste generated within their borders and becoming liable for all damages suffered by waste generators resulting from the state's failure to timely do so. The law, in the Court's view, gave states a \"choice\" between two options concerning their maintenance of radioactive waste disposal, neither of which the Constitution authorized Congress, on its own, to impose on the states. By offering this \"choice,\" Congress had, in the Court's view, \"crossed the line distinguishing encouragement from coercion,\" and in doing so acted \"inconsistent[ly] with the federal structure of our Government established by the Constitution.\" In so holding, the Court declared that \"[t]he Federal Government may not compel the States to enact or administer a federal regulatory program.\"", "Then, in Printz v. United States, the Supreme Court reviewed whether certain interim provisions of the Brady Handgun Violence Prevention Act (Brady Act) violated the anti-commandeering doctrine. The relevant provisions required state and local law enforcement officers to conduct background checks (and other related tasks) on prospective handgun purchasers. The Court rejected the government's position that the challenged Brady provisions\u2014which directed states to implement federal law\u2014were distinguishable from the law at issue in New York \u2014which directed states to create a policy\u2014and thus was constitutionally permissible. Rather, the Court concluded that a federal mandate requiring state and local law enforcement to perform background checks on prospective handgun purchasers violated the anti-commandeering doctrine. Accordingly, the Court announced that \"Congress cannot circumvent\" the Constitution's prohibition against compelling states to enact or enforce a federal regulatory scheme \"by conscripting the State's officers directly.\"", "But not every federal requirement imposed on the states necessarily violates the anti-commandeering principles identified in Printz and New York . A number of federal statutes provide that certain information collected by state entities must be reported to federal agencies. And the Court in Printz expressly declined to consider whether these kinds of requirements were constitutionally impermissible, distinguishing reporting requirements from the case before it, which involved \"the forced participation of the States ... in the actual administration of a federal program.\"", "Additionally, in Reno v. Condon , the Supreme Court unanimously rejected an anti-commandeering challenge to the Driver's Privacy Protection Act (DPPA), which barred states from disclosing or sharing a driver's personal information without the driver's consent, subject to specific exceptions. The Court distinguished the DPPA from the federal laws struck down in New York and Printz because, in the Court's view, the DPPA sought to regulate states \"as owners of databases\" and did not \"require the States in their sovereign capacity to regulate their own citizens ... [or] enact any laws or regulations ... [or] require state officials to assist in the enforcement of federal statutes regulating private individuals.\" The Court declined to address the state's argument that Congress may only regulate the states through generally applicable laws that apply to individuals as well as states, given that the Court deemed the DPPA to be a generally applicable law.", "The Supreme Court recently clarified the scope of the anti-commandeering doctrine in its 2018 ruling, Murphy v. National Collegiate Athletic Association . Murphy involved a challenge under the anti-commandeering doctrine to the Professional and Amateur Sports Protection Act (PASPA), which, as relevant here, prohibited states from \"authorizing\" sports gambling \"by law.\" (This is sometimes referred to as PASPA's \"anti-authorization\" provision. ) In 2012\u201420 years after PASPA's enactment\u2014New Jersey eliminated its constitutional ban on sports gambling and then, two years later, repealed state laws that prohibited certain sports gambling. Invoking PASPA's civil-suit provision, several sports leagues sued to enjoin New Jersey from enforcing its new law, arguing that it violated PASPA. The Third Circuit Court of Appeals, sitting en banc, agreed. Further, the Third Circuit rejected New Jersey's counterargument that PASPA unlawfully commandeered state legislatures.", "The Supreme Court concluded otherwise, holding that PASPA's anti-authorization provision violated the anti-commandeering doctrine. The sports leagues (and the United States, which appeared as amicus curiae ) had argued that under the anti-commandeering doctrine, Congress cannot compel states to enact certain measures, but it can prohibit states from enacting new laws, as PASPA does. The Court described this distinction as \"empty,\" emphasizing that \"[t]he basic principle\u2014that Congress cannot issue direct orders to state legislatures\u2014applies in either event.\" Further, the Court elucidated two situations in which the anti-commandeering doctrine is not implicated. First, the doctrine does not apply \"when Congress evenhandedly regulates an activity in which both States and private actors engage\" (as the Court characterized the situation in Reno ). Second, the federal government does not commandeer states when it enacts a scheme involving \"cooperative federalism,\" in which a state is given a choice either to implement, on its own, a federal program, or opt-out and yield to the federal government's administration of that program. ", "Finally, the Court rejected the sports leagues and the government's contention that PASPA validly preempts state and local gambling laws. The Court announced that \"regardless of the language sometimes used by Congress and this Court, every form of preemption is based on a federal law that regulates the conduct of private actors, not the States .\" But PASPA neither imposes federal restrictions, nor confers federal rights, on private actors, and so, the Court concluded, PASPA can be construed only as a law that regulates state actors and not as a valid preemption provision."], "subsections": [{"section_title": "Congress's Spending Powers and the Anti-Commandeering Doctrine", "paragraphs": ["Congress does not violate the Tenth Amendment or anti-commandeering principles more generally when it uses its broad authority to enact legislation for the \"general welfare\" through its spending power, including by placing conditions on funds distributed to the states that require those accepting the funds to take certain actions that Congress otherwise could not directly compel the states to perform. However, Congress cannot impose a financial condition that is \"so coercive as to pass the point at which 'pressure turns into compulsion.'\" For example, in National Federation of Independent Business v. Sebelius , the Supreme Court struck down a provision of the Patient Protection and Affordable Care Act of 2010 (ACA) that purported to withhold Medicaid funding to states that did not expand their Medicaid programs. The Court found that the financial conditions placed on the states in the ACA (withholding all federal Medicaid funding, which, according to the Court, typically totals about 20% of a state's entire budget) were akin to \"a gun to the head\" and thus unlawfully coercive."], "subsections": []}]}]}, {"section_title": "Select State and Local Limitations on Immigration Enforcement Activity", "paragraphs": ["Several states and municipalities have adopted measures intended to limit their participation in federal immigration enforcement efforts. These limitations take several forms. For example, some states and localities have sought to restrict police cooperation with federal immigration authorities' efforts to apprehend removable aliens, sometimes called \"don't enforce\" policies. Other measures may restrict certain state officials from inquiring about a person's immigration status, sometimes referred to as \"don't ask\" policies. Still others restrict information sharing between local law enforcement and federal immigration authorities, sometimes described as \"don't tell\" policies. The following sections discuss some state and local restrictions on law enforcement activity in the field of immigration enforcement along those lines, including the relationship between these restrictions and federal law."], "subsections": [{"section_title": "Limiting Arrests for Federal Immigration Violations", "paragraphs": ["Violations of federal immigration law may be criminal or civil in nature. Removal proceedings are civil, although some conduct that makes an alien removable may also warrant criminal prosecution. For example, an alien who knowingly enters the United States without authorization is not only potentially removable, but could also be charged with the criminal offense of unlawful entry. Other violations of the INA are exclusively criminal or civil in nature. Notably, an alien's unauthorized immigration status makes him or her removable but, absent additional factors (e.g., having reentered the United States after being formally removed), unlawful presence on its own is not a criminal offense.", "Some jurisdictions have adopted measures that restrict its police officers from making arrests for violations of federal immigration law. In some jurisdictions restrictions prohibit police from detaining or arresting aliens for civil violations of federal immigration law, like unlawful presence . Other jurisdictions prohibit police from making arrests for some criminal violations of federal immigration law, like unlawful entry. Still others prohibit law enforcement from assisting federal immigration authorities with investigating or arresting persons for civil or criminal violations of U.S. immigration laws. And some other jurisdictions have prohibitions that are broader in scope, such as a general statement that immigration enforcement is the province of federal immigration authorities, rather than that of local law enforcement.", "State or local restrictions on police authority to arrest persons for federal immigration law violations do not appear to raise significant legal issues. Even though the INA expressly allows state and local law enforcement to engage in specified immigration enforcement activities, nothing in the INA compels such participation. Indeed, any such requirement likely would raise anti-commandeering issues. Moreover, after Arizona , it appears that states and localities are generally preempted from making arrests for civil violations of the INA in the absence of a specific federal statutory authorization or the \"request, approval, or other instruction from the Federal Government.\""], "subsections": []}, {"section_title": "Limiting Police Inquiries into Immigration Status", "paragraphs": ["Many sanctuary-type policies place restrictions on police inquiries or investigations into a person's immigration status. Some policies provide that police may not question a person about his or her immigration status except as part of a criminal investigation. Others bar law enforcement from initiating police activity with an individual for the sole purpose of discovering immigration status. And other policies prohibit law enforcement from questioning crime victims and witnesses about their immigration status. Still other policies more broadly limit officials from gathering information about persons' immigration status, except as required by law.", "Restricting the authority of police to question a person about his or her immigration status helps ensure that law enforcement lacks any information that could be shared with federal immigration authorities. As explained in the \" PRWORA and IIRIRA \" section below, two federal laws prevent state or local restrictions on sharing information about a person's immigration status with federal immigration authorities, but the provisions do not require state or local police to actually collect such information. Murphy has raised questions, though, about the continuing constitutional viability of these statutes."], "subsections": []}, {"section_title": "Limiting Information Sharing with Federal Immigration Authorities", "paragraphs": ["Some states and localities have restricted government agencies or employees from sharing information with federal immigration authorities. For instance, some jurisdictions prohibit law enforcement from notifying federal immigration authorities about the release status of incarcerated aliens, unless the alien has been convicted of certain felonies. Similarly, other jurisdictions prohibit their employees from disclosing information about an individual's immigration status unless the alien is suspected of engaging in illegal activity that is separate from unlawful immigration status. Some jurisdictions restrict disclosing information except as required by federal law \u2014sometimes referred to as a \"savings clause\"\u2014although it appears that the Department of Justice has interpreted those provisions as conflicting with federal information-sharing provisions. "], "subsections": []}]}, {"section_title": "Federal Measures to Counteract Sanctuary Policies", "paragraphs": ["Over the years the federal government has enacted measures designed to counter certain sanctuary policies. Notably, in 1996 Congress enacted Section 434 of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), and Section 642 of the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA), to curb state and local restrictions on information sharing. Most recently, the President issued Executive Order 13768, \"Enhancing Public Safety in the Interior of the United States,\" which, as relevant here, seeks to encourage state and local cooperation with federal immigration enforcement and disincentivize state and local adoption of sanctuary policies that hinder federal immigration enforcement. These federal initiatives\u2014and related legal issues\u2014are described below."], "subsections": [{"section_title": "PRWORA and IIRIRA", "paragraphs": ["In 1996 Congress sought to end state and local restrictions on information sharing through provisions in PRWORA and IIRIRA. Neither PRWORA nor IIRIRA require s state or local government entities to share immigration-related information with federal authorities. Instead, these provisions bar restrictions that prevent state or local government entities or officials from voluntarily communicating with federal immigration authorities regarding a person's immigration status. ", "IIRIRA \u00a7\u00a0642, codified at 8 U.S.C. \u00a7 1373, bars any restriction on a federal, state, or local governmental entity or official's ability to send or receive information regarding \"citizenship or immigration status\" to or from federal immigration authorities. It further provides that no person or agency may prohibit a federal, state, or local government entity from (1) sending information regarding immigration status to, or requesting information from, federal immigration authorities; (2) maintaining information regarding immigration status; or (3) exchanging such information with any other federal, state, or local government entity. PRWORA \u00a7 434, codified at 8 U.S.C. \u00a7 1644, similarly bars state and local governments from prohibiting or restricting state or local government entities from sending or receiving information, to or from federal immigration authorities, regarding the \"immigration status\" of an individual. "], "subsections": [{"section_title": "Related Litigation", "paragraphs": ["Shortly after Congress enacted these information-sharing restrictions, New York City, which had a policy limiting information sharing with federal immigration authorities, brought suit challenging the constitutionality of Sections 1373 and 1644. Among other things, New York City alleged that the provisions facially violated the Tenth Amendment by barring states and localities from controlling the degree to which their officials may cooperate with federal immigration authorities. A federal district court dismissed this claim in City of New York v. United States , and the U.S. Court of Appeals for the Second Circuit affirmed the judgment.", "The Second Circuit observed that, unlike the statutes struck down on anti-commandeering grounds in New York and Printz , the information-sharing provisions in PRWORA and IIRIRA did not directly compel state authorities to administer and enforce a federal regulatory program. Instead, the court reasoned, these provisions prohibited state and local governments from restricting \"the voluntary exchange\" of immigration information between federal and state authorities. Further, the court added, \"informed, extensive, and cooperative interaction of a voluntary nature\" between states and federal authorities is an integral feature of the American system of dual sovereignty, and, in any event, the Supremacy Clause \"bars states from taking actions that frustrate federal laws and regulatory schemes.\" Accordingly, the Second Circuit concluded that the Tenth Amendment does not provide states and municipalities with the \"untrammeled right to forbid all voluntary cooperation by state or local officials with particular federal programs.\" The court therefore rejected New York City's constitutional challenge to the information-sharing provisions of PRWORA and IIRIRA, holding that that they did not violate the Tenth Amendment or principles of federalism.", "New York City sought to appeal the decision to the Supreme Court, but its petition for certiorari was denied. A few months later, though, the Court handed down Reno , which, as explained earlier, held that the DPPA (a federal statute regulating the dissemination of certain personal information collected by state authorities) did not violate federalism principles embodied in the Tenth Amendment. ", "Since the Second Circuit's ruling, questions about Section 1373's constitutionality remained relatively quiet until President Trump issued the executive order targeting jurisdictions that do not comply with Section 1373. This sparked new litigation challenging Section 1373, some of which invoked Murphy after the ruling came down. "], "subsections": []}]}]}, {"section_title": "Executive Order 13768 and Related Litigation", "paragraphs": ["Shortly after taking office, President Trump issued Executive Order (EO) 13768, \"Enhancing Public Safety in the Interior of the United States,\" which, in Section 9, addresses sanctuary jurisdictions. Specifically, Section 9(a) of the EO seeks to encourage state and local cooperation with federal immigration enforcement and disincentivize\u2014by threatening to withhold federal grant money\u2014state and local adoption of sanctuary policies. Although EO 13768 did not explicitly define \"sanctuary jurisdiction,\" later interpretive guidance from the Department of Justice (DOJ or Justice Department) defined the term, as it is used in the executive order, as a jurisdiction that willfully refuses to comply with 8 U.S.C. \u00a7 1373 (IIRIRA \u00a7 642). ", "This section discusses recent litigation concerning efforts by the Trump Administration to deter the implementation of state or local \"sanctuary\" policies. It begins by providing a brief description of Section 9(a) of EO 13768 and the DOJ's implementation of its requirements. Next, it discusses ongoing litigation involving challenges to Section 9(a). Several of these cases involve direct challenges to the executive order. Other lawsuits involve challenges to the Justice Department's decision, in implementing the executive order, to attach new conditions for grant eligibility under the Edward Byrne Memorial Justice Assistance Grant (Byrne JAG) program and Community Oriented Policing Services (COPS) program, all of which are designed to encourage state and local law enforcement cooperation with federal immigration enforcement. Finally, this section discusses a lawsuit filed by the United States against California, claiming that three new state laws obstruct the federal government's immigration enforcement efforts and, as a result, violate the Constitution's Supremacy Clause."], "subsections": [{"section_title": "Section 9 of Executive Order 13768", "paragraphs": ["On January 25, 2017, the President signed EO 13768, \"Enhancing Public Safety in the Interior of the United States.\" Section 9 of the executive order seeks to encourage state and local cooperation with federal immigration enforcement and disincentivize state and local adoption of sanctuary policies. In particular, Section 9 declares that \"[i]t is the policy of the executive branch to ensure, to the fullest extent of the law, that a State, or political subdivision of a State, shall comply with 8 U.S.C. 1373.\" ", "To implement the policy set forth in the executive order, the President instructs the Attorney General and the Secretary of the Department of Homeland Security (DHS) under Section 9(a) to ensure that jurisdictions that \"willfully refuse to comply with 8 U.S.C. 1373 (sanctuary jurisdictions) are not eligible to receive Federal grants,\" subject to limited exception. The executive order authorizes the DHS Secretary to designate a jurisdiction she determines to be a \"sanctuary,\" and directs the Attorney General to take \"appropriate enforcement actions\" against \"any entity\" that violates Section\u00a01373 or that \"has in effect a statute, policy, or practice that prevents or hinders the enforcement of Federal law.\" Under Section 9(b), the President directs the DHS Secretary to publish, weekly, a list of jurisdictions that ignore or fail to honor detainer requests for incarcerated aliens, \"[t]o better inform the public regarding the public safety threats associated with sanctuary jurisdictions.\""], "subsections": [{"section_title": "DOJ Implementation of EO 13768", "paragraphs": ["A few months later, on May 22, 2017, Attorney General Sessions issued a memorandum interpreting EO 13768. First, he announced that \"sanctuary jurisdictions,\" for the purposes of enforcing the executive order, are \"jurisdictions that 'willfully refuse to comply with 8 U.S.C. 1373.'\" Further, the Attorney General stated that the executive order applies only to grants that the DOJ or DHS administer. As a result, the Attorney General announced that the DOJ would \"require jurisdictions applying for certain Department grants to certify their compliance with federal law, including 8 U.S.C. \u00a7\u00a01373, as a condition for receiving an award.\" In addition, the certification requirement would apply to all existing grants administered by the DOJ's Office of Justice Programs and Office of Community Oriented Policing Services (COPS) that expressly contain the certification condition, and to future grants for which the DOJ has statutory authority to impose such conditions. Further, the Attorney General added that \"[s]eparate and apart from the Executive Order, statutes may authorize the Department to tailor grants or to impose additional conditions on grantees to advance the Department's law enforcement priorities.\" Accordingly, \"[g]oing forward,\" the Attorney General announced, \"the Department, where authorized, may seek to tailor grants to promote a lawful system of immigration.\"", "As a follow up to that interpretive memorandum, two months later on July 25, 2017, the DOJ issued a press release and accompanying background document announcing new conditions for recipients of the Byrne JAG program. The Byrne JAG program provides federal funds to the states, District of Columbia, Puerto Rico, and other territories for various nonfederal criminal justice initiatives. The press release announced three new conditions: ", "1. Compliance Condition . Byrne JAG program grant recipients must certify compliance with Section 1373, which would notify the federal government that the jurisdiction does not restrict its offices and personnel from sending or receiving citizenship or immigration status to or from federal immigration authorities . 2. Access Condition . Grant recipients that have detention facilities housing aliens (e.g.,\u00a0local jails or state prisons where aliens may be confined) must permit DHS immigration enforcement personnel (i.e., enforcement officers with DHS's U.S. Immigration and Customs Enforcement [ICE]) to access those facilities to meet with housed aliens and inquire into their eligibility to remain in the country. 3. Notice Condition . When DHS believes that an alien in state or local custody is removable from the United States for a violation of federal immigration law, ICE officers may issue a \"detainer\" requesting that the state or local entity give notice of the alien's pending release from custody so that ICE may take control of the alien for possible removal proceedings. To be eligible for grants under the Byrne JAG program, DOJ announced that recipients generally must give DHS 48 hours' advance notice before releasing from custody an alien wanted for removal. ", "These requirements were made applicable to Byrne JAG applications that were due six weeks later, on September 5, 2017, meaning that applying jurisdictions would need to be in compliance with all three conditions within six weeks.", "Additionally, the Justice Department announced a requirement for applicants seeking grants administered by the COPS Office to certify compliance with Section 1373. COPS grants are used to advance community policing, for example, through training, technical assistance, and developing \"innovative policing strategies\" in a number of \"topic areas\" selected by the DOJ. For FY2018, in the topic area for \"Field Initiated Law Enforcement,\" priority consideration could be given to applicants that cooperate with federal immigration authorities \"to address illegal immigration.\" Further, the COPS Office notified potential applicants that additional consideration would be given to applicants that partner with federal law enforcement to combat illegal immigration. To obtain that special consideration, applicants could sign a form certifying that they follow practices mirroring those of the notice and access conditions of Byrne JAG program: (1) allowing federal immigration authorities to access detention facilities where they may question known or suspected aliens about their immigration status; and (2) providing at least 48 hours' notice of those persons' expected custodial release."], "subsections": []}]}, {"section_title": "Litigation Challenging EO 13768 and its Implementation", "paragraphs": ["The lawsuits challenging Section 9(a) of EO 13768 and its implementation came in two waves. The first wave came shortly after President Trump signed the executive order, when several jurisdictions sued for injunctive relief. The second, larger wave of litigation came after the DOJ announced the new Byrne JAG and COPS conditions. In the litigation challenging the EO's implementation, the various challengers have brought arguments raising similar statutory and constitutional concerns, chiefly:", "the DOJ lacked statutory authority to impose the new conditions; the DOJ imposed the conditions arbitrarily and capriciously in violation of the Administrative Procedure Act; the executive branch violated principles of separation of powers by usurping the legislature's spending power; and the government violated the anti-commandeering doctrine by unconstitutionally conscripting the states into federal immigration enforcement.", "The County and City of San Francisco and the County of Santa Clara (collectively, the \"Counties\"), for example, filed suit within days of each other, and those lawsuits were considered jointly by a district judge in the Northern District of California. The district court presiding over the Counties' challenges ultimately issued an injunction blocking nationwide enforcement of Section 9(a). The Ninth Circuit agreed with the lower court that Section 9(a) violates the Constitution's principles of separation of powers. However, while agreeing that the injunction was appropriate to prevent Section 9(a) from having effect in California, the appellate court concluded that the current factual record was insufficient to support a nationwide injunction and remanded the case to the district court for further factfinding. ", "As for the litigation challenging new Byrne JAG and COPS conditions, in one case, the U.S. District Court of the Northern District of Illinois enjoined the Byrne JAG conditions as applied to Chicago. The court held that, in imposing those conditions, the DOJ exceeded the statutory authority Congress delegated to implement the Byrne JAG program. In another case, the U.S. District Court for the Eastern District of Pennsylvania enjoined the federal government from enforcing the three Byrne JAG conditions against Philadelphia. The district court concluded, among other things, that the conditions were imposed arbitrarily and capriciously in violation of the Administrative Procedure Act (APA) because the government had failed to adequately justify imposing the new conditions. For reasons similar to the federal district courts in Chicago and Pennsylvania, a district court in New York enjoined the government from enforcing the new conditions against the City of New York and the States of New York, Connecticut, New Jersey, Rhode Island, Washington, Massachusetts, and Virginia (the collective plaintiffs in that case). Notably, all of the district judges held, post- Murphy , that Section 1373 violates the anti-commandeering doctrine. Finally, in another lawsuit brought by the City of Los Angeles, California, a district judge permanently enjoined the new considerations for COPS grant selections, concluding that they were imposed without statutory authority, violated the Spending Clause, and were arbitrarily and capriciously imposed in violation of the APA. "], "subsections": [{"section_title": "City & Cty. of San Francisco v. Trump and Cty. of Santa Clara v. Trump", "paragraphs": ["Shortly after President Trump issued EO 13768, the City and County of San Francisco and the County of Santa Clara, California, filed suit, asking a federal court to enjoin Section 9(a) of the order. The Counties principally argued that Section 9(a) is unconstitutional in three ways. First, the Counties contended that the funding restrictions, by purporting to withhold, or impose new eligibility conditions on, congressional appropriations, violated the separation of powers by usurping the legislature's spending power granted in Article I, Section 8 of the Constitution. Alternatively, even assuming that the President had lawful authority to withhold, or impose conditions on, congressionally appropriated funds, the Counties argued that Section 9(a) would still violate the Spending Clause because it surpasses the constitutional limits of the Spending Clause set forth by the Supreme Court. Finally, the Counties argued that Section 9(a) violates the anti-commandeering doctrine, contending, for instance, that Section 9(a) coerces jurisdictions into complying with ICE-issued immigration detainers by threatening to withhold federal funding and take unspecified enforcement action against jurisdictions that \"'hinder the enforcement of federal law.'\"", "The district judge ultimately agreed with all three arguments and permanently enjoined\u2014nationwide\u2014Section 9(a) of the executive order. The Ninth Circuit, in a 2-1 ruling, affirmed the district court's judgment on the ground that Section 9(a) violates the separation of powers by usurping Congress's spending power. The Ninth Circuit vacated the injunction's nationwide application, however, and remanded for further factfinding on whether the injunction ought to be nationwide in scope. ", "In holding that EO Section 9(a) violates the separation of powers, the Ninth Circuit recounted that \"when it comes to spending, the President has none of his own constitutional powers to rely upon.\" That power, the court explained, is exclusively Congress's domain, subject to delegation. Yet, the court opined, Congress had not authorized the executive branch \"to withdraw federal grant moneys from jurisdictions that do not agree with the current Administration's immigration strategies.\" Further, the court pointed to nearly a dozen failed congressional proposals to do just that during the 114th Congress. Thus, the Ninth Circuit concluded, \"[n]ot only has the Administration claimed for itself Congress's exclusive spending power, it also attempted to coopt Congress's power to legislate.\""], "subsections": []}, {"section_title": "City of Richmond v. Trump", "paragraphs": ["Another California city unsuccessfully tried to challenge EO 13768 as it relates to sanctuary jurisdictions. Richmond, California, like Santa Clara and San Francisco, argued that (1) the President exceeded his constitutional authority by purporting to appropriate federal funds; (2) even assuming that the President has such spending authority, the conditions set forth in the executive order violate the Spending Clause's lawful parameters; and (3) the executive order unlawfully commandeers the states. The district court denied Richmond's request for injunctive relief, however, after concluding that the city could not establish pre-enforcement standing to challenge the executive order.", "In dismissing Richmond's suit, the district court applied the framework that the Supreme Court set forth in Babbitt v. Farm Workers National Union to determine whether a plaintiff has standing to challenge a statute before it is enforced against the plaintiff. Under Babbitt, the plaintiff must demonstrate \"an intention to engage in a course of conduct arguably affected with a constitutional interest, but proscribed by a statute, and there exists a credible threat of prosecution thereunder.\" The district court assumed without deciding that Richmond had policies proscribed by the executive order, could lose federal funding if the order was enforced against it, and put forward claims that implicated constitutional interests. So the ruling on whether Richmond had pre-enforcement standing ultimately hinged on whether Richmond had demonstrated a \"well-founded fear\" that the executive order would be enforced against it, and the court concluded the city had not. The court opined that \"[t]he likely targets of enforcement under the [Executive] Order are jurisdictions that have actually refused to cooperate with ICE and that ICE believes are hindering its immigration enforcement efforts.\" But according to Richmond's own complaint, the court found, the federal government had never asked Richmond to assist in enforcing immigration policy, nor had it been identified as a locality that restricts cooperation with ICE or regularly declines immigration detainers. Thus, the court decided that Richmond had \"no real-world friction with ICE or the defendants over its policies\" and thus was unlikely to be subjected to the executive order's funding restrictions."], "subsections": []}, {"section_title": "City of Seattle & City of Portland v. Trump", "paragraphs": ["The Cities of Seattle, Washington, and Portland, Oregon, jointly challenged President Trump's executive order. The cities asked a district court to declare that Section 9(a) of EO 13768 is unconstitutional under the Tenth Amendment, the Spending Clause, and separation-of-power principles, principally for the same reasons as the other jurisdictions challenging the executive order. Soon after the plaintiffs brought suit, though, the district court stayed the case, pending the resolution of the appeal in the Ninth Circuit of the injunction issued in the Santa Clara/San Francisco litigation. After the Ninth Circuit concluded that Section 9(a) was unconstitutional, the district judge in this case also ruled that Section 9(a) unconstitutionally violated the separation of powers."], "subsections": []}, {"section_title": "City of Chelsea & City of Lawrence v. Trump", "paragraphs": ["Two cities in Massachusetts, Chelsea and Lawrence, also filed suit shortly after President Trump issued EO 13768, challenging Section 9(a). Chelsea and Lawrence principally argued that that Section 9(a) violates the Tenth Amendment and the Constitution's separation-of-power principles, for reasons substantially similar to those argued by Santa Clara, San Francisco, and Richmond. However, after the district court in the Santa Clara/San Francisco litigation issued a nationwide preliminary injunction blocking the executive order, the parties agreed to stay the proceedings unless and until the injunction is lifted. "], "subsections": []}, {"section_title": "City of Chicago v. Sessions", "paragraphs": ["After the Justice Department announced the new Byrne JAG conditions, the City of Chicago, Illinois, sued, asking a district court to enjoin the Attorney General from imposing them. Chicago's suit challenged each of the three conditions that the Justice Department imposed for grant eligibility (compliance with the information-sharing requirements of Section 1373, DHS access to state and local detention facilities, and providing notice to DHS when an alien wanted for removal is released from custody). ", "First, Chicago argued that the DOJ lacked statutory authority to impose the new conditions because the Byrne JAG statute does not confer agency discretion to add substantive conditions to the receipt of those federal funds. And even though the Byrne JAG statute requires that recipients certify compliance with \"all other applicable Federal laws,\" Chicago contended that conditioning the receipt of the grant on state and local compliance with Section 1373 is a new condition nevertheless. This is so because, Chicago asserted, Section 1373 is not an \"applicable\" law as intended by the JAG statute; rather, Chicago argued that the word \"applicable\" necessarily narrows the phrase from one that includes the entire body of federal law, to one that includes a subset of laws that \"make[s] clear to grant recipients that their receipt of money is conditioned on compliance.\" In Chicago's view, the correct set of \"applicable\" laws is \"the specialized body of statutes that govern federal grantmaking.\" ", "Second, Chicago argued that the notice and access conditions violate the Constitution's separation-of-power principles because the DOJ\u2014an executive branch agency\u2014unlawfully exercised the spending authority exclusively granted to the legislative branch. Third, Chicago asserted that, even if the DOJ had been given the discretion to condition grant eligibility, the notice and access conditions exceeded constitutional spending authority. According to Chicago, the new conditions (1) are not germane to the federal interest in the Byrne JAG funds Chicago receives, and (2) by requiring grant recipients to provide immigration authorities with 48 hours' notice before releasing an alien in custody, would induce Chicago to engage in activities that violate the Fourth Amendment because, in practice, Chicago would have to hold detainees longer than constitutionally permitted. Finally, Chicago alleged that Section 1373, on its face, violates the Tenth Amendment, and thus the DOJ cannot condition the receipt of federal funds on state and local compliance with it.", "The district court initially granted a nationwide, preliminary injunction concerning the notice and access conditions. The Seventh Circuit upheld this ruling on interlocutory appeal but stayed its nationwide effect, making the injunction applicable to only Chicago. Before the district court made its final ruling, the Supreme Court issued Murphy , prompting the court to reconsider its earlier conclusion that the compliance condition was lawful. Ultimately, the court issued a nationwide, permanent injunction, holding that Section 1373 is unconstitutional on its face and blocking the enforcement of all three Byrne JAG conditions. However, because the en banc Seventh Circuit previously had stayed the nationwide effect of the preliminary injunction, the district court stayed the nationwide effect of the permanent injunction, pending appeal, in deference to the Seventh Circuit's earlier order.", "Turning to the merits of the district court's order, the court first concluded that Section 1373 violates the anti-commandeering doctrine. The court recounted that in Murphy, the Supreme Court held that, under the anti-commandeering doctrine, \"Congress cannot issue direct orders to state legislatures\" through a federal law that compels state action or that prohibits state action. Thus, because Section 1373 prohibits state policymakers from forbidding its employees to share immigration-status information with immigration authorities, the court concluded that this federal prohibition on state action runs afoul of the anticommandeering doctrine. The court further rejected the government's request to carve out an exception to the anti-commandeering doctrine for laws requiring states to share information with the federal government \"in the face of clear guidance from Murphy \" and without the Supreme Court ever creating such an exception. ", "Next, the district court concluded that the notice, access, and compliance conditions were imposed without statutory authority and thus unlawful. The court's conclusion that Section 1373 is unconstitutional doomed the compliance condition. The Byrne JAG statute requires compliance with \"all other applicable Federal laws.\" But, \"[a]s an unconstitutional law,\" the court explained, \"Section 1373 automatically drops out of the possible pool of 'applicable Federal laws.'\" ", "For the notice and access conditions, the court principally relied on the Seventh Circuit's reasoning in its order affirming the preliminary injunction, adding that \"the Attorney General ha[d] not mustered any other convincing argument in support of greater statutory authority\" and that \"nothing ha[d] shaken this Court from the opinion it expressed at the preliminary injunction stage.\" For instance, the Seventh Circuit had rejected the government's contention that the conditions are authorized by 34 U.S.C. \u00a7\u00a010102(a)(6), which sets forth the duties and functions of the Assistant Attorney General (AAG) in running the Office of Justice Programs, which administers the Byrne JAG program. The government had pointed to the statutory text granting the AAG the authority to exercise \"powers and functions as may be vested in the Assistant Attorney General pursuant to this chapter or by delegation of the Attorney General, including placing special conditions on all grants, and determining priority purposes for formula grants . \" But, according to the Seventh Circuit, \"[t]he inescapable problem here is that the Attorney General does not even claim that the power exercised here is authorized anywhere in the chapter, nor that the Attorney General possesses that authority and therefore can delegate it to the Assistant Attorney General.\" "], "subsections": []}, {"section_title": "City of Evanston v. Sessions", "paragraphs": ["The City of Evanston, Illinois (City), and the United States Conference of Mayors (Conference), together, brought a lawsuit that mirrored Chicago's and requested preliminary injunctive relief. The case was assigned to the same district judge who had presided over Chicago's lawsuit. For that reason, when considering whether the plaintiffs were likely to succeed on the merits of their claims, the district court relied on its earlier opinions and those of the Seventh Circuit. The district judge observed that, \"though the plaintiffs at bar have changed, the legislation proscribing which conditions the Attorney General may attach has not.\" Accordingly, because the Seventh Circuit described as \"untenable\" the government's arguments for its statutory authority to impose the Byrne JAG conditions, the district court concluded that the City and Conference were likely to prevail. Consequently, the district court enjoined the government from enforcing the conditions against the plaintiffs."], "subsections": []}, {"section_title": "City of Philadelphia v. Sessions", "paragraphs": ["The City of Philadelphia, Pennsylvania, also sued to stop the Attorney General from imposing the new Byrne JAG conditions. Like Chicago, Philadelphia argued that the DOJ lacked statutory authority to impose the new conditions, violated constitutional principles of separation of powers, violated the Spending Clause, and unconstitutionally conscripted the states into federal immigration enforcement. Philadelphia also argued that the conditions were arbitrarily and capriciously imposed in violation of the APA.", "Initially, the district court found that all three of the conditions were unlawfully imposed and preliminarily blocked their enforcement against Philadelphia. Then, after a bench trial, the court permanently enjoined the DOJ from enforcing against Philadelphia the three new Byrne JAG conditions. The district court concluded that the Byrne JAG Statute contained no explicit authority for the notice and access conditions. The court further held that the Justice Department's decision to impose all three conditions was arbitrary and capricious in violation of the APA. The court reasoned that the DOJ did not adequately justify imposing the new conditions. For instance, the court found that, before imposing the certification condition, the government had not \"assess[ed] the benefits or drawbacks of imposing a condition, but instead merely assessed whether jurisdictions would be compliant were such a condition imposed.\" Finally, the district court in Philadelphia concluded that Murphy mandates holding Section 1373 unconstitutional.", "The Third Circuit affirmed the district court's ruling but on narrower grounds: The court held that the conditions were imposed without statutory authority and thus are unlawful. The circuit court first concluded that the JAG statute did not authorize any of the challenged conditions. In support of the notice and access conditions, the government pointed to two provisions of the statute requiring the Attorney General to direct grant applicants (1) to report \"data, records, and information (programmatic and financial)\" that he may \"reasonably require,\" and (2) to certify that \"there has been appropriate coordination with affected agencies.\" In the government's view, \"information\" the Attorney General may \"reasonably require\" includes notification of an alien's release from custody from law-enforcement and corrections programs funded by the JAG grant. But the court disagreed, explaining that JAG statute explicitly limits information to programmatic and financial information, meaning \"information regarding the handling of federal funds and the programs to which those funds are directed\" and not \"priorities unrelated to the grant program.\" ", "The court also rejected the government's argument that the coordination provision authorizes access to aliens in Philadelphia's custody because that would amount to \"appropriate coordination\" with immigration authorities affected by those same JAG-funded law-enforcement and corrections programs. Because the statute refers to instances where \"there has been \" coordination, which the court understood to reference past coordination, the court concluded that the statutory language \"does not serve as a basis to impose an ongoing requirement to coordinate.\" As for the lawfulness of the compliance condition, the government invoked another JAG statute provision, this one requiring applicants to certify compliance with \"all other applicable Federal laws.\" The government contended that Section 1373 is an applicable federal law. The court rejected the government's expansive view of the term, however. The court reasoned, for instance, that if the Attorney General could condition funds based on compliance with any law in the U.S. Code , this practice would essentially turn the JAG formula grant\u2014which is awarded to a jurisdiction through a formula that considers only population and violent crime statistics\u2014into a discretionary grant.", "Next, the court rejected the government's other asserted source of statutory authority for imposing the conditions: the provision establishing the duties and functions of the AAG in 34 U.S.C. \u00a7\u00a010102. This statute directs the AAG to \"exercise such other powers and functions as may be vested in the [AAG] pursuant to this chapter or by delegation of the Attorney General, including placing special conditions on all grants.\" The court emphasized, however, that this provision authorizes the AAG to place conditions on grants only if that power has been vested by Title 34 of the U.S. Code or delegated by the Attorney General, and neither of those predicates had occurred. All told, based on the sole ground that the Attorney General lacked statutory authority to impose the notice, access, and compliance conditions, the Third Circuit affirmed the district court's order enjoining those conditions as applied to Philadelphia, and declined to address Philadelphia's additional arguments."], "subsections": []}, {"section_title": "City & Cty. of San Francisco v. Sessions", "paragraphs": ["In separate lawsuits considered together, the State of California and the City and County of San Francisco sued the Justice Department seeking to block the three new Byrne JAG conditions. The California plaintiffs argued that the notice and access conditions were imposed without statutory authority and, thus, violate the separation of powers, invoking the conclusions reached by the district courts who had enjoined those conditions. The plaintiffs further argued that, post- Murphy , Section 1373 is constitutionally unenforceable against the states. They contended that Section 1373 \"dictates what a state legislature may and may not do,\" and Murphy forecloses Congress's ability to do that.", "The district court concluded that the Byrne JAG conditions violate the separation of powers and that Section 1373 is unconstitutional, declaring that he is \"[i]n agreement with every court that has looked at these issues.\" And \"follow[ing] the lead of the district court in City of Chicago ,\" the district judge entered a nationwide injunction, staying the nationwide aspect until the Ninth Circuit has an opportunity to review the order on appeal. Like the district courts in Chicago and Philadelphia, the district court here concluded that the Byrne JAG statute does not authorize the Justice Department to impose the notice and access conditions, given the sparse, inapplicable discretion the statute delegates. Without that delegated authority, the court continued, the Justice Department unlawfully exercised Congress's exclusive Spending Power and violated the separation of powers. Next, the court held that Section 1373 violates principles of federalism. The court explained that post- Murphy , \"[t]here is no distinction for anti-commandeering purposes . . . between a federal law that affirmatively commands States to enact new laws and one that prohibits States from doing the same.\" And even if the Supreme Court eventually were to carve out an exception for federally required information-sharing, the district court opined that Section 1373 impacts jurisdictions much more than \"a ministerial information-sharing statute.\" For example, the court found that Section 1373 \"takes control over the State's ability to command its own law enforcement.\""], "subsections": []}, {"section_title": "States of New York v. Department of Justice", "paragraphs": ["The States of New York, Connecticut, New Jersey, Rhode Island, Washington, Massachusetts, and Virginia and the City of New York (collectively, the \"States and City\") sued the DOJ, challenging the three new Byrne JAG conditions. Like other jurisdictions, these plaintiffs contended that the conditions violate the separation of powers and the APA, and, further, that Section 1373 violates the anti-commandeering doctrine. A district judge in the Southern District of New York enjoined the Justice Department from imposing the notice, access, and compliance conditions on the States and City. ", "The court first concluded that the conditions were imposed without statutory authority and thus, as the APA directs, must be set aside. Agreeing with the other courts, the district judge rejected the government's arguments that the statutory provision authorizing the Assistant Attorney General to exercise powers delegated by the Attorney General to impose grant conditions. Specifically, the government had contended that 34 U.S.C. \u00a7 10102(a)(6) authorizes the imposition of the conditions, and Department's compliance condition is authorized by the Byrne JAG statute's requirement, under 34 U.S.C. \u00a7 10153(a)(5)(D), to certify compliance with \"all other applicable Federal laws.\" Concerning \u00a7\u00a010102(a)(6), the district court concluded that the Assistant Attorney General could not impose the conditions because the Attorney General had no statutory authority to do so, and thus had no authority to delegate. As for \u00a7\u00a010153(a)(5)(D), the court concluded that the term \"all other applicable Federal laws\" is ambiguous and thus violates the tenet that \"if Congress intends to impose a condition on the grant of federal moneys, it must do so unambiguously.\" Accordingly, the court viewed the language \"'from the perspective of a state official who is engaged in the process of deciding whether the State should accept [the] funds and the obligations that go with those funds,' and 'must ask whether such a state official would clearly understand that one of the obligations of the Act is the [purported] obligation.'\" From that perspective, the court concluded that the applicable federal laws are limited to those applicable grant, given that the rest of \u00a7 10153 concerns requirements for the application and grant itself.", "Additionally, the district court concluded that the conditions constitute arbitrary and capricious agency action in violation of the APA. The court reasoned that, notwithstanding the government's evidence in support of the benefits of withholding Byrne JAG funds from jurisdictions that fail to comply with the three conditions, \"[c]onspicuously absent\" from the government's evidence \"is any discussion of the negative impacts that may result from imposing the conditions, and the record is devoid of any analysis that the perceived benefits outweigh these drawbacks.\"", "Next, the district court concluded that Section 1373 violates the anti-commandeering doctrine and thus is unconstitutional. The court acknowledged that the Second Circuit\u2014whose opinions are binding precedent on the Southern District of New York\u2014held that Section 1373 is constitutional in City of New York v. United States . But the court concluded that the Second Circuit's earlier ruling \"cannot survive the Supreme Court's decision in Murphy .\" City of New York , the court explained, had relied on a distinction between affirmative commands, which were considered unconstitutional, and affirmative prohibitions, which the circuit court had considered permissible. But, the Second Circuit continued, the Supreme Court in Murphy described that distinction as \"empty.\" Because Murphy concluded that the anti-commandeering doctrine forbids the federal government from imposing a direct prohibition on state legislatures, the district court held that Section 1373\u2014by dictating what a state legislature may not do\u2014is unconstitutional.", "The district court additionally held that the three Byrne JAG conditions violate the separation of powers. Harking back to its earlier analysis of the Byrne JAG statute provisions, the court explained that when Congress delegated spending authority to the executive branch in the statute, it did not delegate the authority to impose the new conditions. The Byrne JAG statute, the court continued, authorizes the distribution of funds \"according to statutorily prescribed criteria\" that the executive branch is powerless to disturb."], "subsections": []}, {"section_title": "City of Los Angeles v. Sessions", "paragraphs": ["The City of Los Angeles, California, separately challenged the new conditions attached to the Byrne JAG program and the additional consideration factors for the COPS program. Initially focusing on the COPS program, Los Angeles first asked the U.S. District Court for the Central District of California to enjoin the DOJ from implementing the new COPS considerations in any future grant solicitations, contending, among other things, that they were imposed without statutory authority, violate the Spending Clause, and are invalid under the APA. ", "The district court agreed with Los Angeles and granted a permanent injunction. The court first concluded that the DOJ lacked statutory authority to consider the degree to which applying jurisdictions cooperate with federal immigration enforcement when assessing applications. The court pointed to 34 U.S.C. \u00a7\u00a010381(c)\u2014the statute authorizing the COPS program for community-policing grants\u2014which identifies when the DOJ \"may give preferential consideration\" to applicants, and explained that none of the scenarios listed apply to federal immigration enforcement. ", "Next, the court concluded that the challenged COPS considerations violate the Spending Clause. The federal government had contended that the challenged \"considerations\" on grant funding were not subject to the same Spending Clause requirements as grant \"conditions\" because compliance with the considerations was not required to receive the grant. But the court found no meaningful distinction between grant \"conditions\" and the challenged \"considerations,\" declaring that \"compliance is required in order for applicants to compete on a level playing field.\" Further, the court remarked, if the government's assertion were correct, \"it would be simple for federal agencies to avert Spending Clause requirements by labeling all considerations 'plus factors.'\" And because the COPS statute does not identify as a factor for preferential treatment a jurisdiction's cooperation with federal immigration enforcement, the court concluded that Congress did not, as the Spending Clause requires, \"unambiguously condition\" the receipt of funds on the recipients' compliance with federal authorities. \"It is irrelevant\" that the DOJ's COPS Office was forthcoming about the conditions because, the court added, it is Congress\u2014not the agency\u2014that \"must be clear in its directives.\" Additionally, the added considerations violate the Spending Clause because, the court concluded, they are not germane to the goals of the COPS program: \"[C]ommunity policing is about developing partnerships between local authorities and the community,\" and, in the court's view, \"there is no relationship between local police partnerships with federal authorities and community policing.\" ", "Finally, the district court concluded that the added considerations are arbitrary and capricious in violation of the APA because the government put forth no evidence, nor did it argue, that its explanation for adding the considerations\u2014that \"'[c]ities and states that cooperate with federal law enforcement make all of us safer by helping remove dangerous criminals from our communities,' including by ending 'violent crime stemming from illegal immigration'\"\u2014was based on any findings or data. Thus the court concluded that the government had no reasonable basis for adding the new conditions.", "Concerning the Byrne JAG notice and access conditions, the district court later entered a preliminary injunction blocking the government from enforcing those conditions against Los Angeles. In doing so, the court pointed to the text of the Byrne JAG statute, explaining that \"[t]he authority explicitly granted to the Attorney General . . . is limited.\" That limited authority, the court concluded, does not include requiring states or localities to assist in immigration enforcement."], "subsections": []}]}, {"section_title": "Justice Department Lawsuit Against California", "paragraphs": ["On the other side of the coin, the Justice Department has sued California, seeking to invalidate three laws governing the state's regulation of private and public actors' involvement in immigration enforcement within its border. The government contends that these laws \"reflect a deliberate effort by California to obstruct the United States' enforcement of federal immigration law, to regulate private entities that seek to cooperate with federal authorities consistent with their obligations under federal law, and to impede consultation and communication between federal and state law enforcement officials,\" and, thus, violate the Supremacy Clause. The government is challenging parts of the following three California laws: (1) The Immigrant Worker Protection Act, Assembly Bill 450 (AB 450); (2) Section 12 of Assembly Bill 103 (AB 103); and (3) the California Values Act, Section 3 of Senate Bill 54 (SB 54). In particular, the federal government principally contends that these laws violate the Supremacy Clause in two ways. First, the DOJ argues that the state measures violate the doctrine of intergovernmental immunity\u2014a doctrine that derives from the Supremacy Clause and provides that \"a State may not regulate the United States directly or discriminate against the Federal Government or those with whom it deals.\" Second, the government asserts that the California laws are preempted because they create an obstacle for the federal government's enforcement of certain immigration laws. "], "subsections": [{"section_title": "The Challenged California Laws", "paragraphs": [], "subsections": [{"section_title": "The Immigrant Worker Protection Act (AB 450)", "paragraphs": ["AB 450 imposes on public and private employers in California several requirements related to federal immigration enforcement actions taking place at the worksite. First, AB 450 prohibits an employer from allowing an immigration enforcement officer to enter any nonpublic areas of a worksite, unless the officer has a judicial warrant or \"as otherwise required by federal law.\" Second, AB 450 bars employers from permitting immigration enforcement officers to access, review, or obtain employee records without a subpoena or judicial warrant, or \"as otherwise required by federal law\" (together, the \"consent\" provisions). Third, \"[e]xcept as otherwise required by federal law,\" AB 450 requires employers to provide employees with written notice of any I-9 employment eligibility inspection (or other employment record inspections) within 72 hours after receiving notice of the inspection (the \"notice\" provision). Fourth, AB 450 prohibits an employer (or a person acting on the employer's behalf) from reverifying the employment eligibility of a current employee unless as required by 8 U.S.C. \u00a7\u00a01324a(b) or \"as otherwise required by federal law\" (the \"reverification\" provision)."], "subsections": []}, {"section_title": "Section 12 of AB 103", "paragraphs": ["Section 12 of AB 103\u2014part of California's omnibus budget bill\u2014requires, for the next 10 years, the California Attorney General (or a designee) to review and report on county, local, and private detention facilities that house aliens in immigration proceedings, including those housing minors on behalf of, or by contract with, the U.S. Office of Refugee Resettlement or ICE. The review must include the conditions of confinement, standard of care, due process provided, and the circumstances surrounding the aliens' apprehension and transfer to the facility."], "subsections": []}, {"section_title": "California Values Act (Section 3 of SB 54)", "paragraphs": ["SB 54 enacts the California Values Act, which regulates to California's participation in federal immigration enforcement. As relevant here, the California Values Act generally prohibits law enforcement agencies from using agency money or personnel to investigate, interrogate, detain, detect, or arrest persons for the purpose of immigration enforcement, including", "inquiring into immigration status; detaining a person subject to a hold request; providing information about a person's release date; providing personal information such as a person's home or work address, unless it is publicly available; making or participating in arrests based on civil immigration warrants; or performing any functions of an immigration officer.", "The Act also prohibits California law enforcement agencies from placing their officers under the supervision of federal agencies or employing officers who are deputized as special federal officer for purposes of immigration enforcement. Further, under the Act, California law enforcement agencies may not use immigration authorities as \"interpreters\" for law enforcement matters relating to persons in custody. Nor may California law enforcement agencies transfer a person to immigration authorities unless authorized to do so by judicial warrant, a judicial probable cause determination, or otherwise in accordance with California law. Additionally, subject to limited exception, the agencies may not contract with the federal government to use California law enforcement facilities to house federal detainees. ", "However, the Act specifies that it does not prevent California law enforcement from enforcing violations of 8 U.S.C. \u00a7\u00a01326, which makes it a criminal offense to unlawfully enter the United States after being denied admission to, or being removed from, the United States. Nor does the Act prevent California law enforcement from responding to requests for information about a person's criminal history. Further, the Act does not prevent California law enforcement from engaging in certain joint law enforcement task force activities. Additionally, California law enforcement may still give immigration authorities access to interview an individual in custody, in compliance with California law, and to make inquiries related to determining whether a person is a potential crime or trafficking victim and thus eligible for certain visas."], "subsections": []}]}, {"section_title": "United States v. California", "paragraphs": ["On March 6, 2018, the United States sued California, requesting an injunction to preliminarily block the three California laws described above. In particular, the government contends that the contested California laws violate the Supremacy Clause. The government asserts that the California laws \"reflect a deliberate effort by California to obstruct the United States' enforcement of federal immigration law, to regulate private entities that seek to cooperate with federal authorities consistent with their obligations under federal law, and to impede consultation and communication between federal and state law enforcement officials.\" Further, the United States contends that the California laws \"have the purpose and effect of making it more difficult for federal immigration officers to carry out their responsibilities in California,\" and \"[t]he Supremacy Clause does not allow California to obstruct the United States' ability to enforce laws that Congress has enacted or to take actions entrusted to it by the Constitution.\" The district court granted the government's request, in part, concluding only that parts of California's Immigrant Worker Protection Act (AB 450), as applied to private employers, violates the Supremacy Clause. The government appealed, arguing that the other challenged California provisions, too, likely are unconstitutional. But the Ninth Circuit sustained all but one of the district court's rulings, concluding that one subsection within Section 12 of AB 103 violates the doctrine of intergovernmental immunity."], "subsections": [{"section_title": "AB 450", "paragraphs": ["The district court concluded that the United States was likely to succeed on its claim challenging AB 450's consent and reverification provisions. The court concluded that consent provision violates the doctrine of intergovernmental immunity because it imposes monetary penalties on employers for voluntarily consenting to immigration officers entering nonpublic areas of the worksite and to access employment records, and thus, the provision \"impermissibly discriminates against those who choose to deal with the Federal Government.\" Concerning the reverification provision, the court reasoned that the government was likely to succeed on the merits of its claim that the provision is preempted by IRCA. The court concluded that the reverification provision likely stands as an obstacle to enforcing IRCA's continuing obligation imposed on employers to avoid knowingly employing an unauthorized alien. ", "But the court concluded that the government was unlikely to succeed on its claim that AB 450's notice provision violates the Supremacy Clause. The court first concluded that this provision does not violate the intergovernmental immunity doctrine because, the court explained, it punishes employers for failing to communicate with its employees and not for choosing to deal with the federal government. The Ninth Circuit agreed, adding that \"intergovernmental immunity attaches only to state laws that discriminate against the federal government and burden it in some way .\" And the Ninth Circuit accepted California's contention that \"[t]he mere fact that those notices\" required by AB 450 \"contain information about federal inspections does not convert them into a burden on those inspections.\" ", "The district court also rejected the government's argument that the notice provision prevents an obstacle to enforcing IRCA's prohibition on employing unauthorized aliens because, the government asserted, if investigation targets are warned, investigations will be less effective. But the court opined that IRCA imposes obligations and penalties on employers , not employees, and so the \"target\" of any investigation is the employer , not the employee. Likewise, the Ninth Circuit concluded that AB 450's notice requirement does not impose \"additional or contrary obligations that undermine or disrupt the activities of federal immigration authorities\" in implementing IRCA. "], "subsections": []}, {"section_title": "AB 103", "paragraphs": ["The district court declined to preliminarily enjoin Section 12 of AB 103. The government had argued that California's \"efforts to assess the process afforded to immigrant detainees\" through the review and reporting requirements in AB 103, create an obstacle to administering the federal government's exclusive discretion in deciding whether and how to pursue an alien's removal. The court disagreed, though, opining that the California Attorney General's review would not give the state a role in determining whether an alien should be detained or removed from the United States. Rather, the court characterized the provision as one that harnesses power California's Attorney General lawfully possesses to investigate matters related to state law enforcement. ", "Nor, the court concluded, would the government likely succeed on its claim Section 12 of AB 103 violates the doctrine of intergovernmental immunity. The court recognized that the law imposes inspections only on facilities that contract with the federal government. But the court opined that the burden imposed on the federal contractors is minimal, and the government had not shown that the burden imposed under AB 103 is higher than burdens imposed under independent California laws governing inspections of other detention facilities within the state. ", "On appeal, however, the Ninth Circuit concluded that part of Section 12 of AB 103 (the requirement for the California Attorney General to review the circumstances surrounding detained aliens' apprehension and transfer to each facility) violates the doctrine of intergovernmental immunity. The Ninth Circuit characterized the district court's ruling as creating a \"de minimis exception\" to the doctrine of intergovernmental immunity. But the Ninth Circuit rejected this new exception, opining that \"[ a ] ny economic burden that is discriminatorily imposed on the federal government is unlawful.\" Still, the court decided that only the provision requiring state inspectors to examine the circumstances surrounding the immigration detainees' apprehension and transfer to the facility likely violates the doctrine of intergovernmental immunity. In the Ninth Circuit's view, this \"unique\" requirement appeared distinct from any other inspection imposed under California law, and, thus, the Ninth Circuit concluded that the district court erred in finding that the review appears no more burdensome than other legally mandated inspections. "], "subsections": []}, {"section_title": "SB 54", "paragraphs": ["Finally, the district court rejected the government's argument that SB 54 acts as an obstacle to immigration enforcement and, thus, is preempted. The government had asserted that SB 54's limitations on information sharing and transferring to federal custody certain alien inmates \"impede immigration enforcement from fulfilling its responsibilities regarding detention and removal because officers cannot arrest an immigrant upon the immigrant's release from custody and have a more difficult time finding immigrants after the fact without access to address information.\" The court opined, however, that \"refusing to help is not the same as impeding.\" A state's refusal to help with federal immigration enforcement will always make obtaining the federal objective more difficult than if the state voluntarily assists, but, the court explained, \"[s]tanding aside does not equate to standing in the way.\" ", "The Ninth Circuit upheld the district court's ruling. First, the court concluded that SB 54 does not obstruct the government's implementation of the INA. The court reasoned that the INA (with the exception of Section 1373) \"provides state and localities the option , not the requirement , of assisting federal immigration authorities,\" and \"SB 54 simply makes that choice for California law enforcement agencies.\" Further, invoking the Supreme Court's ruling in Murphy , the Ninth Circuit opined that invalidating SB 54 under the principles of conflict preemption \"would, in effect, 'dictate[] what a state legislature may and may not do,' because it would imply that a state's otherwise lawful decision not to assist federal authorities is made unlawful when it is codified as state law.\" Nor does Section 1373 preempt the information-sharing provisions of SB 54 because, the court concluded, the state measure expressly permits the type of information required by Section 1373, specifically, citizenship or information status. Moreover, the Ninth Circuit, again relying on Murphy , concluded that anti-commandeering principles likely precluded a preemption challenge to the information-sharing provisions. The court described the exception to the anti-commandeering doctrine for reporting requirements as existing only when the \"Congress evenhandedly regulates an activity in which both States and private actors engage.\" But here, Section 1373 regulates only state actors, and therefore anti-commandeering principles preclude the government from requiring California to exchange information with it."], "subsections": []}]}]}]}, {"section_title": "Conclusion", "paragraphs": ["Ongoing lawsuits concerning sanctuary jurisdictions may offer clarity on some unsettled and cross-cutting issues involving immigration and federalism. The Tenth Amendment reserves for the states the \"police power\" to regulate and protect the health, safety, and welfare of the public, and, in adopting sanctuary policies, jurisdictions have sometimes invoked public safety concerns as a justification for enacting those measures. But the federal government's power to regulate immigration-related matters is substantial and exclusive, and on occasion the exercise of this power has been found to render unenforceable state or local initiatives that conflict with federal immigration enforcement priorities. Additionally, Congress generally may condition the receipt of federal funds on compliance with specific conditions that achieve federal goals. Still, the anti-commandeering doctrine restricts the federal government from compelling the states to administer or enforce a federal regulatory program, like the immigration laws, whether through direct compulsion or prohibition, or indirectly, through monetary incentives that are unduly coercive. ", "With that background, the heart of the debate in the lawsuits challenging EO 13768 and its implementation has principally centered on what constitutionally permissible methods are available to the federal government to stop or deter state and local adoption of sanctuary policies, which the government views as hindering federal immigration enforcement objectives, and, on the flip side, whether and when state and local sanctuary policies do, in fact, undercut federal immigration enforcement efforts in a manner that contravenes the Supremacy Clause. ", "In City & County of San Francisco v. Trump and County of Santa Clara v. Trump , for example, the district court's ruling that enjoined Section 9(a) hinged, in part, on its conclusion that the executive branch lacked statutory authority from Congress to withhold and create new conditions for federal grants, and that purporting to withhold all federal grants from what it labeled as sanctuary jurisdictions was unconstitutionally coercive, given the sheer amount of money a sanctuary jurisdiction would stand to lose if it didn't dispense with its policies. Congress could step in to ratify Section 9(a), at least in part, using its spending power to incentivize states to cooperate with immigration enforcement, so long as it doesn't threaten to withhold an amount of money that could be deemed coercive. And in City of Chicago v. Sessions and City of Philadelphia v. Sessions, the district courts and one appellate court concluded that the executive branch lacked statutory authority to impose some of the spending conditions that the DOJ attached to the Byrne JAG program. Likewise, Congress could amend the Byrne JAG statute to give the Attorney General, as it has done for other grant programs, the discretion to impose conditions on the receipt of the federal grant. ", "Moreover, since Murphy, the courts considering the challenges to Section 1373 have concluded that the statute is no longer constitutionally viable, given the Supreme Court's application of the anti-commandeering doctrine to a federal statute that prohibits states from enacting certain kinds of laws. Accordingly, to achieve Section 1373's goals, Congress may consider using its power of the purse to incentivize states and localities to share immigration-related information with federal immigration authorities. "], "subsections": []}]}}
{"id": "R44593", "title": "Introduction to the National Flood Insurance Program (NFIP)", "released_date": "2019-04-01T00:00:00", "summary": ["The National Flood Insurance Program (NFIP) was established by the National Flood Insurance Act of 1968 (NFIA, 42 U.S.C. \u00a74001 et seq.), and was most recently reauthorized to May 31, 2019, through a series of short-term reauthorizations. The general purpose of the NFIP is both to offer primary flood insurance to properties with significant flood risk, and to reduce flood risk through the adoption of floodplain management standards. Communities volunteer to participate in the NFIP in order to have access to federal flood insurance, and in return are required to adopt minimum standards.", "The NFIP is managed by the Federal Emergency Management Agency (FEMA), through its subcomponent the Federal Insurance and Mitigation Administration (FIMA). FEMA manages a Risk Mapping, Assessment and Planning (Risk MAP) process to produce Flood Insurance Rate Maps (FIRMs). Depicted on FIRMs are Special Flood Hazard Areas (SFHAs), which are areas exposed to a 1% or greater risk of annual flooding. FIRMs vary in age across the country, and are updated on a prioritized basis. The Risk MAP process provides extensive outreach and appeal opportunities for communities. Updating a community's FIRMs can take three to five years or more. Participating communities must adopt a flood map and enact minimum floodplain standards to regulate development in the SFHA. FEMA encourages communities to enhance their floodplain standards by offering reduced premium rates through the Community Rating System (CRS). FEMA also manages a Flood Mitigation Assistance (FMA) grant program using NFIP revenues to further reduce comprehensive flood risk. Participating communities that fail to adopt FIRMs or maintain minimum floodplain standards can be put on probation or suspended from the NFIP. In communities that do not participate in the NFIP, or have been suspended, individuals cannot purchase NFIP insurance. Individuals in these communities also face challenges receiving federal disaster assistance in flood hazard areas, and have difficulties receiving federally backed mortgages.", "NFIP insurance uses one of three types of Standard Flood Insurance Policies (SFIPs). SFIPs have maximum coverage limits set by law. Any federal entity that makes, guarantees, or purchases mortgages must, by law, require property owners in the SFHA to purchase flood insurance, generally through the NFIP. In moderate risk areas, community members may purchase Preferred Risk Policies (PRPs) that offer less costly insurance. The day-to-day sale, servicing, and claims processing of NFIP policies are conducted by private industry partners. Most policies are serviced by companies that are reimbursed through the Write Your Own (WYO) Program.", "The premium rate for most NFIP policies is intended to reflect the true flood risk. However, Congress has directed FEMA to subsidize flood insurance for properties built before the community's first FIRM (i.e., the pre-FIRM subsidy). In addition, FEMA \"grandfathers\" properties at their rate from past FIRMs to updated FIRMs through a cross-subsidy.", "Congress has provided appropriations to the NFIP for some of the cost of Risk MAP. Congress also authorizes the use of premium revenues for other NFIP costs, including administration, salaries, and other expenses. NFIP premiums also include other charges, such as a Federal Policy Fee, a Reserve Fund assessment, and a surcharge to help fund the NFIP. In October 2017, Congress cancelled $16 billion of NFIP debt, making it possible for the program to pay claims for Hurricanes Harvey, Irma, and Maria. The NFIP currently owes $20.525 billion to the U.S. Treasury, leaving $9.9 billion in borrowing authority from a $30.425 billion limit in law. This debt is serviced by the NFIP and interest is paid through premium revenues.", "After May 31, 2019, key authorities of the NFIP, such as the authority to issue new insurance contracts, will expire if they are not reauthorized by Congress."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The National Flood Insurance Program (NFIP) was created by the National Flood Insurance Act of 1968 (NFIA). The NFIP received a short-term reauthorization through December 8, 2017, a second short-term reauthorization through December 22, 2017, and a third short-term reauthorization through January 19, 2018. The NFIP lapsed between January 20 and January 22, 2018, and received a fourth short-term reauthorization until February 8, 2018. The NFIP lapsed for approximately eight hours during a brief government shutdown in the early morning of February 9, 2018, and was then reauthorized until March 23, 2018. The NFIP received a sixth reauthorization until July 31, 2018, a seventh reauthorization until November 30, 2018, an eighth reauthorization until December 7, 2018, a ninth reauthorization until December 21, 2018, and a tenth reauthorization until May 31, 2019.", "The last long-term reauthorization of the NFIP was by the Biggert-Waters Flood Insurance Reform Act of 2012 (hereinafter BW-12), from July 6, 2012, to September 30, 2017. Congress amended elements of BW-12, but did not extend the NFIP's authorization further, in the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA). The NFIP is managed by the Federal Emergency Management Agency (FEMA), through its subcomponent the Federal Insurance and Mitigation Administration (FIMA). As of October 2018, the NFIP had more than 5.1 million flood insurance policies providing over $1.3 trillion in coverage. The program collects about $3.6 billion in annual premium revenue. Nationally, as of January 2019, about 22,355 communities in 56 states and jurisdictions participated in the NFIP. According to FEMA, the program saves the nation an estimated $1.87 billion annually in flood losses avoided because of the NFIP's building and floodplain management regulations.", "This report provides introductory information on key components of the NFIP, ranging from floodplain mapping to the standard flood insurance forms. This report will be updated as significant revisions are made to the NFIP through legislation or administrative action. However, this report does not provide detail on current or future legislative issues for Congress, which are covered in a separate report. CRS also has a separate report on flood insurance and other federal disaster assistance programs."], "subsections": []}, {"section_title": "Purpose of the NFIP", "paragraphs": ["In the original NFIP statute, Congress stipulated that \"a program of flood insurance can promote the public interest by providing appropriate protection against the perils of flood losses and encouraging sound land use by minimizing exposure of property to flood losses.\" Congress had found that postdisaster flood losses, and the subsequent federal disaster relief assistance to help communities recover from those flood losses, had \"placed an increasing burden on the Nation's resources\" and that as a matter of national policy \"a reasonable method of sharing the risk of flood losses is through a program of flood insurance which can complement and encourage preventive and protective measures.\" At the time of establishment of the NFIP, as is generally still the case today, it was found that \"many factors have made it uneconomic for the private insurance industry alone to make flood insurance available to those in need of such protection on reasonable terms and conditions.\"", "Thus, the NFIP essentially has two interrelated policy purposes that can be summarized as", "1. to provide access to primary flood insurance, thereby allowing for the transfer of some of the financial risk of property owners to the federal government, and 2. to mitigate and reduce the nation's comprehensive flood risk through the development and implementation of floodplain management standards. ", "A core design feature of the NFIP is that communities are not required to participate in the program by any law or other regulation. Rather, communities in the United States voluntarily participate in the NFIP generally as a means of securing access to the primary flood insurance offered by the NFIP. Essentially, the NFIP is structured so that the availability of primary flood insurance through the NFIP (purpose #1 from above) is tied to the adoption and enforcement of floodplain management standards by participating communities (purpose #2). FEMA is only allowed to provide flood insurance to \"those States or areas (or subdivisions thereof)\" where \"adequate land use and control measures\" have been adopted that \"are consistent with the comprehensive criteria for land management and use developed\" by the NFIP. Thus, communities that participate in the NFIP, and therefore whose residents may access the NFIP's primary flood insurance, also adopt through local or state laws minimum floodplain management standards that are described in FEMA regulations. "], "subsections": []}, {"section_title": "Reduction of Comprehensive Flood Risk", "paragraphs": ["The NFIP accomplishes the goal of reducing comprehensive flood risk primarily by requiring participating communities to", "Collaborate with FEMA to develop and adopt flood maps called Flood Insurance Rate Maps (FIRMs). Enact minimum floodplain standards based on those flood maps. ", "In addition, premiums collected from the sale of insurance in the NFIP finance a Flood Mitigation Assistance (FMA) grant program that reduces overall flood risk. This section of the report briefly discusses each of these means of reducing comprehensive flood risk."], "subsections": [{"section_title": "Risk Mapping, Assessment, and Planning (Risk MAP) and Flood Insurance Rate Maps (FIRMs)", "paragraphs": ["FEMA is responsible for undertaking Flood Insurance Studies (FISs) nationwide to identify areas within the United States having special flood, mudslide, and flood-related erosion hazards; assess the flood risk; and designate insurance zones. FEMA develops, in coordination with participating communities, flood maps called Flood Insurance Rate Maps (FIRMs) using these FISs that depict the community's flood risk and floodplain. In BW-12, Congress revised the authorities of FEMA as it relates to flood hazard mapping to formally establish what FEMA has called the Risk Mapping, Assessment and Planning (Risk MAP) process. Though formally authorized in BW-12, FEMA started the Risk MAP process at the request of Congress in 2009. While FEMA is largely responsible for the creation of the FIRM, the community itself must pass the map into its local or state law in order for the map to be effective."], "subsections": [{"section_title": "Flood Zones", "paragraphs": ["An area of specific focus on the FIRM is the Special Flood Hazard Area (SFHA). The SFHA is intended to distinguish the flood risk zones that have a chance of flooding during a \"1 in 100 year flood\" or greater frequency. This means that properties in the SFHA have a risk of 1% or greater risk of flooding every year. Table 1 shows flood-risk zones that are depicted on the FIRMs. Zones A (A1-30), AE, AH, AO, V, VE, VO, and V1-30 constitute the designated SFHA on the community's FIRM. V zones are distinguished from A zones in that V zones are subject to tidal wave action (i.e., coastal flooding). Two other designations for classifying zones in the SFHA are the Zone AR, which is an area where a levee or similar structure is determined not to provide sufficient flood protection, but is undergoing restoration; and the Zone A99, an area where a federal flood protection structure is under construction to provide the necessary flood protection standard. "], "subsections": []}, {"section_title": "Updating Flood Maps", "paragraphs": ["Flood maps adopted across the country vary considerably in age and in quality. While some FIRMs may have last been developed and adopted by a community in the 1980s, especially in rural areas of the country, most communities will have maps adopted within the past 15 to 20 years. All official FIRMs can be accessed, and are searchable by address and location, on a FEMA website called the Map Service Center, and modern FIRMs can be digitally viewed via the Geographic Information System in the National Flood Hazard Layer. ", "There is no consistent, definitive timetable for when a particular community will have their maps revised and updated. FEMA uses a process called the Coordinated Needs Management Strategy to prioritize, identify, and track the lifecycle of mapping needs of Risk MAP. Generally, flood maps may require updating when there have been significant new building developments in or near the flood zone, changes to flood protection systems (e.g., levees and sand dunes), and environmental changes in the community. Because of the variability in how and when a FIRM is updated, for example, one community may be undergoing the process of updating its map while a neighboring community is not, and one community may have had its map last updated in 2016 while a neighboring community had its last revised in 2005, etc. ", "There are statutory guidelines for how FEMA is allowed to develop new FIRMs for a community. These guidelines require, for example, FEMA to conduct extensive communication and outreach efforts with the community during the mapping process and include various minimum waiting periods after intermediary steps are taken in the process. In addition, during this process, communities are asked to submit pertinent data concerning their flood hazards, flooding experience, mitigation plans to avoid potential flood hazards, and estimates of historical and prospective economic impacts flooding has had on the community. Generally, FEMA seeks to make the Risk MAP process a collaborative process with local communities to encourage a joint sense of \"ownership\" of the maps. There are also legal requirements allowing communities and individuals to appeal during the process of updating FIRMs. This appeal process now includes the option, first authorized in BW-12, for communities to appeal to a Scientific Resolution Panel regarding a proposed FIRM. ", "In BW-12, Congress reestablished and reauthorized a council called the Technical Mapping Advisory Council (TMAC). The TMAC is broadly authorized to review and recommend improvements to how FEMA produces and disseminates flood hazard, flood risk, and flood map information. In particular, the TMAC is authorized to recommend to FEMA \"mapping standards and guidelines for\u2014(A) flood insurance rate maps [FIRMs]; and (B) data accuracy, data quality, data currency, and data eligibility.\" Currently, the TMAC estimates that the production of a new or revised FIRM is designed to take three to five years under the Risk MAP program, but can often take as long as six and a half years or longer. The TMAC has suggested that the ideal Risk MAP project timeline is 25 months. "], "subsections": []}, {"section_title": "Map Corrections", "paragraphs": ["After a map is finalized and adopted by a community, it can still be revised to correct for errors in map accuracy. To correct these inaccuracies, FEMA allows individuals and communities to request letters amending or revising the flood map. In general, two primary circumstances may result in changes to the flood map. First, the natural elevation of property may be incorrectly accounted for on a FIRM, and that natural elevation is such that the property should not be considered part of the SFHA. Generally, in this circumstance, an individual or community may request a Letter of Map Amendment (LOMA). Second, a community may feel that a physical development in the community has resulted in a reduction of the flood risk for areas previously mapped in the floodplain. Generally, in this circumstance, the community may request a Letter of Map Revision (LOMR). In either a LOMA or LOMR, the decision to correct a map must be based on scientific information validating the inaccuracy of the current map. In most circumstances, the cost of requesting the map correction is borne by the community or individual. "], "subsections": []}]}, {"section_title": "State and Local Land Use Controls", "paragraphs": ["As authorized in law, FEMA has developed a set of minimum floodplain management standards that are intended to ", "(1) constrict the development of land which is exposed to flood damage where appropriate, (2) guide the development of proposed construction away from locations which are threatened by flood hazards, (3) assist in reducing damage caused by floods, and (4) otherwise improve the long-range land management and use of flood-prone areas.", "Communities are required to adopt these minimum floodplain management standards in order to participate in the NFIP. FEMA has set forth the minimum standards it requires for participation in the NFIP in federal regulations. Though the standards appear in federal regulations, the standards only have the force of law because they are adopted and enforced by a state or local government. Key conditions of the NFIP minimum standards include, among many other conditions, that communities:", "require permits for development in the SFHA; require elevation of the lowest floor of all new residential buildings in the SFHA to or above the Base Flood Elevation (BFE); restrict development in the regulatory floodway to prevent increasing the risk of flooding; and require certain construction materials and methods that minimize future flood damage.", "Legal enforcement of the floodplain management standards is the responsibility of the participating NFIP community. However, FEMA, often in cooperation with state governments, will conduct community assistance visits (CAVs) to monitor how and if a community is adequately enforcing its floodplain ordinances. Two previous reviews commissioned by FEMA on community enforcement of minimum floodplain standards have estimated that the nationwide rate of community compliance with the standards is 70% to 85%, and that between 58% and 70% of buildings are built in full compliance with the standards. A community that has been found failing to enforce the floodplain management standards may be placed on probation and ultimately suspended from the NFIP (as discussed later in this report). As these standards are just minimum requirements, states and communities can elect to adopt higher standards as a means of mitigating flood risk. In addition, FEMA operates a program, called the Community Rating System, to incentivize NFIP communities to adopt more rigorous floodplain management standards (as discussed later in this report)."], "subsections": []}, {"section_title": "Flood Mitigation Assistance Grants", "paragraphs": ["To reduce comprehensive flood risk, FEMA also operates a Flood Mitigation Assistance (FMA) Grant Program that is funded through revenue collected by the NFIP. The FMA Program awards grants for a number of purposes, including state and local mitigation planning; the elevation, relocation, demolition, or flood proofing of structures; the acquisition of properties; and other activities. In FY2019, the FMA Program was authorized to use $175 million of NFIP revenue. The funding is available until it is expended, so in certain years the amount awarded may exceed the amount authorized by Congress in an appropriation act for a specific fiscal year. A database of approved FMA grants that is available from FEMA indicates that over $905 million in projects was approved between July 1997 and November 2017."], "subsections": []}]}, {"section_title": "Primary Flood Insurance through the NFIP", "paragraphs": [], "subsections": [{"section_title": "Standard Flood Insurance Policies (SFIPs)", "paragraphs": ["FEMA has considerable discretion under the law to craft the details of the flood insurance policies it sells through the NFIP. Currently, there are three policies that the NFIP uses to sell primary flood insurance\u2014the Dwelling, the General Property, and the Residential Condominium Building Association policy forms. Collectively, these Standard Flood Insurance Policies (SFIPs) appear in regulations, and coverage qualifications are generally equivalent. Table 2 displays the maximum available coverage limits for SFIPs by occupancy type. These coverage amounts are set by law. Policyholders are able to elect coverage for both their building property and separate coverage for contents. Renters may obtain contents-only coverage. ", "Because SFIP coverage limits are often less than the value of a structure or the value of the property's contents, policyholders can obtain excess flood insurance to cover losses beyond the coverage limit. However, such excess coverage is not sold by the NFIP, and can only be purchased through the private insurance market.", "Within the SFIPs sold by the NFIP, there are numerous policy exclusions that are often not understood by policyholders. For example, SFIPs do not provide coverage for alternative living expenses (e.g., the cost of staying in a hotel while a house is being repaired) or business interruption expenses, and SFIPs have limited coverage of basements or crawlspaces. In addition, the SFIP does not cover damage caused by earth movement, including landslides."], "subsections": []}, {"section_title": "Mandatory Mortgage Purchase Requirement", "paragraphs": ["In a community that participates or has participated in the NFIP, owners of properties in the mapped SFHA are required to purchase flood insurance as a condition of receiving a federally backed mortgage. By law and regulation, federal agencies, federally regulated lending institutions, and government-sponsored enterprises must require these property owners to purchase flood insurance as a condition of any mortgage that these entities make, guarantee, or purchase. Examples of the types of lenders that are mandated to issue regulations requiring the purchase of flood insurance related to mortgages include", "federal agency lenders, such as the Department of Veterans Affairs, or the government-sponsored enterprises (GSEs), Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac), or federally regulated lending institutions, such as banks covered by the Federal Deposit Insurance Corporation (FDIC) or the Office of the Comptroller of the Currency (OCC).", "Property owners falling under this mandate may purchase flood insurance through the NFIP, or through a private company, so long as the private flood insurance provides \"flood insurance coverage which is at least as broad as the coverage provided under a [SFIP] \u2026 including when considering deductibles, exclusions, and conditions offered by the insurer.\"", "The implementation of this requirement has proved challenging, with the responsible federal regulators (the Federal Reserve, Farm Credit Administration, Federal Deposit Insurance Corporation, National Credit Union Administration, and Comptroller of the Currency) issuing two separate Notices of Proposed Rulemaking (NPRM) addressing the issue in October 2013 and November 2016 . The crux of the implementation issue can be seen as answering the question of who would judge whether specific policies met the \"at least as broad as\" standard and what criteria would be used in making this judgment? The uncertainty as to whether particular private policies would meet the standard has been seen as \" at odds with \" greater private participation in the flood insurance marketplace.", "On February 12, 2019, the regulators announced a final rule implementing the BW-12 \"requirement that regulated lending institutions accept private flood insurance policies\" that takes effect July 1, 2019. Of particular note, the rule ", "\"allows institutions to rely on an insurer's written assurances in a private flood insurance policy stating the criteria are met; [and] clarifies that institutions may, under certain conditions, accept private flood insurance policies that do not meet the Biggert-Waters Act criteria.\"", "The rule does not apply directly to other federal agencies, nor to the GSEs, which would be subject to separate rulemaking.", "Not all mortgages in the SFHA are affected by this mandatory purchase requirement. For example, a personal mortgage loan between two private parties (such as between family members), or a mortgage issued by a private mortgage company that is not then sold on the secondary market to a bank or entity like Fannie Mae, may not require flood insurance. Even if they are not technically required to mandate flood insurance by federal law, the issuing party may still require it as a means of financially securing the property. While the exact percentage of total mortgages requiring flood insurance is unknown, one study suggested at least 77% of all mortgages in SFHAs in 2003 would be subject to the requirement. ", "Despite the mandatory purchase requirement, not all covered mortgages carry the insurance as dictated. Though there are no official statistics available from the federal mortgage regulators responsible for implementation of the mandate, a 2006 study commissioned by FEMA found that compliance with this mandatory purchase requirement may be as low as 43% in some areas of the country (the Midwest), and as high as 88% in others (the West). In a 2013 analysis done following Hurricane Sandy, one study found that approximately 65% of properties in New York City required to have insurance through their mortgage had such insurance. A 2017 study of flood insurance in New York City by the same authors reassessed the 2013 data and suggested that the estimate in their earlier study may have slightly overstated the actual take-up rate, which the 2017 study estimated at 61%. The later study found that compliance with the mandatory purchase requirement by properties in the SFHA with mortgages increased from 61% in 2012 to 73% in 2016. The later study also argued that findings for properties without mortgages indicate the effectiveness of the mandatory purchase requirement, as the 37% take-up rate for properties without mortgages in the SFHA was similar to take-up rates outside the SFHA (37% for properties with mortgages and 32% for properties without mortgages).", "The escrowing of insurance premiums may increase compliance with the mandatory purchase requirement. Federal mortgage regulators have required the escrowing of flood insurance premiums on certain mortgages in compliance with regulations issued after changes to the law made in 1994. Expanding upon existing requirements, Section 100209 of BW-12, as subsequently revised by Section 25 of HFIAA, has required that regulated lenders start escrowing flood insurance for all mortgages, except if the lending institution is under a regulated size or the loan is a subordinate to another loan. This broader implementation of the escrowing provision began in January 2016, per law and regulations."], "subsections": []}, {"section_title": "Preferred Risk Policies (PRPs)", "paragraphs": ["Flood insurance is optional for properties outside the SFHA regardless of whether they have a federally backed mortgage. However, as there is still a risk of flooding outside the SFHA, members of NFIP participating communities with property located in the B, C, or X Zones of a FIRM may voluntarily purchase a lower-cost Preferred Risk Policy. Unlike with properties in the SFHA, an individual may be denied a PRP if there is significant loss history for the property. FEMA encourages the purchase of PRPs both to reduce the financial flood risk of a broader group of individuals, and to expand the policy base of the NFIP writ large, thus improving the fiscal soundness of the NFIP portfolio. A PRP uses the same basic policy forms as properties within the SFHA, but receives discounted rates in accordance with its lower risk profile. "], "subsections": []}, {"section_title": "Increased Cost of Compliance (ICC) Coverage", "paragraphs": ["The NFIP requires most SFIP and PRP policyholders to purchase what is in effect a separate insurance policy to offset the expense of complying with more rigorous building code standards when local ordinances require them to do so. This increased cost of compliance coverage is authorized in law, and rates for the coverage, as well as how much can be paid out for claims, are set by FEMA. Congress has capped the amount that can be paid for ICC coverage at $75. The ICC policy has a separate rate premium structure, and provides an amount up to $30,000 in payments for certain eligible expenses. ", "For example, when a building is determined by a community to be substantially damaged following a flood, floodplain management standards adopted by local communities can require the building to be rebuilt to current floodplain management requirements, even if the property previously did not need to do so. For instance, the new compliance standard may require the demolition and elevation of the rebuilt building to above the BFE. An ICC claim may then be submitted by the policyholder to offset the cost of complying with the elevation standard. FEMA also makes ICC coverage available if a building has been declared a repetitive loss by a community's floodplain management regulations. However, not all participating NFIP communities have or enforce a \"repetitive loss provision\" that records, declares, and mandates improvements to properties that have experienced repetitive loss. Thus, certain structures that have experienced repetitive loss may not be eligible for ICC payments. ", "FEMA has not implemented ICC coverage for two conditions that they are authorized to do so by law. These two conditions are for properties that have sustained flood damage on multiple occasions, if the Administrator determines that it is cost-effective and in the best interests of the NFIP, and for properties for which an offer of mitigation assistance is made under various federal assistance programs. FEMA's decision not to implement these provisions has provoked criticism from some stakeholders of the NFIP."], "subsections": []}, {"section_title": "Servicing of Policies and Claims Management", "paragraphs": ["While FEMA provides the overarching management and oversight of the NFIP, the bulk of the day-to-day operation of the NFIP, including the marketing, sale, writing, and claims management of policies, is handled by private companies. This arrangement between the NFIP and private industry is authorized by statute and guided by regulation. There are two different arrangements that FEMA has established with private industry. The first is the Direct Servicing Agent, or DSA, which operates as a private contractor on behalf of FEMA for individuals seeking to purchase flood insurance policies directly from the NFIP. The second arrangement is called the Write-Your-Own (WYO) Program, where private insurance companies are paid to directly write and service the policies themselves. With either the DSA or WYO Program, the NFIP retains the actual financial risk of paying claims for the policy (i.e., underwrites the policy), and the policy terms and premiums are the same. ", "Currently, approximately 13% of the total NFIP policy portfolio is managed through the DSA, and 87% of NFIP policies are sold by the 59 companies participating in the WYO Program. Over the years, the balance between the number of policies serviced by the WYO Program or the DSA has evolved, with the WYOs covering approximately 50% of policies in 1986, and approximately 97% of policies in 2008. Because most purchasers of the NFIP policies never interface directly with a FEMA representative, and only deal with a WYO company or the DSA, they may not be aware that they are actually purchasing insurance from FEMA.", "Companies participating in the WYO Program are compensated through a variety of methods, as summarized in Table 3 . The Government Accountability Office (GAO) and Department of Homeland Security, Office of the Inspector General (DHS IG) have produced a number of reports investigating how much the WYOs were compensated for the services they provided in support of the NFIP. In BW-12, Congress required FEMA to develop and issue a rulemaking on a \"methodology for determining the appropriate amounts that property and casualty insurance companies participating in the Write Your Own program should be reimbursed for selling, writing, and servicing flood insurance policies and adjusting flood insurance claims on behalf of the National Flood Insurance Program.\" This rulemaking was required within a year of enactment of BW-12. As of April 2019, FEMA has yet to publish a rulemaking to revise the compensation structure of the WYOs. ", "Following Hurricane Sandy, there were concerns raised regarding the possible systematic underpayment of claims for flood losses through the NFIP. As a result of these issues, FEMA carried out a process by which Hurricane Sandy survivors could resubmit their NFIP claims to be reevaluated by FEMA. FEMA reviewed the resubmitted claims and provided additional claim payments to those deemed warranted in the review, and concluded the Sandy Claims Review Process on March 1, 2018. As of January 29, 2018, approximately 85% of policyholders who requested a review had received additional payments, resulting in approximately $258.6 million in additional claims payments. The remaining 15% of reviewed files received no additional payment. In addition, FEMA settled and litigated lawsuits initiated by claimants following Hurricane Sandy, with 1,631 of the 1,633 court cases settled, resulting in approximately $164 million in settlement payments."], "subsections": []}, {"section_title": "Pricing and Premium Rate Structure", "paragraphs": ["Except for certain subsidies, flood insurance rates in the NFIP are directed to be \"based on consideration of the risk involved and accepted actuarial principles,\" meaning that the rate is reflective to the true flood risk to the property. Essentially, FEMA uses several basic characteristics to classify properties based on flood risks. Structures are evaluated by their specific risk zone on a FIRM, the elevation of the structure relative to the Base Flood Elevation (BFE) in each risk zone, and occupancy type (e.g., single family, other residential, nonresidential, and mobile/manufactured homes), along with other specific determinants of risk. In addition, the premium structure includes estimates for the expenses of the NFIP, including servicing of policies. A detailed discussion of the premium rate structure of the NFIP, and how or why it is and is not actuarially sound, is beyond the scope of this report. However, additional resources exist to assist Congress with this issue."], "subsections": [{"section_title": "Pre-FIRM Subsidy", "paragraphs": ["While most premium rates in the NFIP are intended to represent the full flood risk of a given structure, Congress has directed FEMA not to charge actuarial rates for properties that were constructed or substantially improved before December 31, 1974, or before the date upon which FEMA has published the first Flood Insurance Rate Map for the community, whichever was later. Therefore, by statute, premium rates charged on structures built before they were first mapped into a flood zone that have not been substantially improved, known as pre-FIRM structures, are allowed to have lower premiums than what would be expected to cover predicted claims. The availability of this pre-FIRM subsidy was intended to allow preexisting floodplain properties to contribute in some measure to prefunding their recovery from a flood disaster instead of relying solely on federal disaster assistance. In essence, the flood insurance could distribute some of the financial burden among those protected by flood insurance and the public.", "As of September 2016, 817,344 policies received a pre-FIRM subsidy, representing approximately 16.1% of all NFIP policies. Historically, the total number of pre-FIRM policies is relatively stable, but the percentage of those policies by comparison to the total policy base has decreased. The pricing subsidy for pre-FIRM policies is progressively being phased out of the NFIP, as was initially required under Section 100205 of BW-12, as revised by Sections 3 and 5 of HFIAA. Under current law, all premiums for pre-FIRM properties will eventually reach actuarially sound rates (i.e., the rate equivalent structures pay without the subsidy, reflecting true flood risk), but at a different pace of phaseout depending on the property type. Table 4 provides an adaptation of a table from GAO regarding the multifaceted phaseout of the pre-FIRM subsidy following BW-12, as revised by HFIAA. In summary, HFIAA slowed the rate of phaseout of the pre-FIRM subsidy for most primary residences, but retained the pace of the phaseout of the subsidy from BW-12 for business properties and secondary homes. In addition, HFIAA created a minimum and maximum increase in the amount for the phaseout of pre-FIRM subsidies for all primary residences of 5%-15% annually. Unless otherwise noted, the percentage increases are based on the current premium (e.g., a 15% annual increase from the prior year premium), rather than the percentage difference between the current premium and the actuarial rate (i.e., a rate increase of 25% does not mean the pre-FIRM subsidy is eliminated in four years). "], "subsections": []}, {"section_title": "Newly Mapped Subsidy", "paragraphs": ["Congress introduced a new form of subsidy in HFIAA, for owners of properties newly mapped into a SFHA. The newly mapped procedure applies to properties previously in zones B, C, X, D, AR, or A99 (see Table 1 ), which are newly mapped into a SFHA on or after April 1, 2015, if the applicant obtains coverage that is effective within 12 months of the map revision date. The newly mapped procedure does not apply to properties mapped into a SFHA by the initial FIRM for a community entering the NFIP, and certain properties may be excluded based on their loss history. The rate for eligible newly mapped properties is equal to the PRP rate, but with a higher Federal Policy Fee, for the first 12 months following the map revision. After the first year, the newly mapped rate will begin its transition to a full-risk rate, with annual increases to newly mapped policy premiums calculated using a multiplier that varies by the year of the map change. Annual increases are restricted to no more than 18% per year. As of September 2016, 3.9% of all policies received a newly mapped subsidy."], "subsections": []}, {"section_title": "Grandfathering Cross-Subsidy", "paragraphs": ["Using the authority to set rate classes for the NFIP and to offer lower than actuarial premiums, FEMA allows property owners to maintain their old flood insurance rate class if their property is remapped into a new flood rate class. This practice is colloquially referred to as \"grandfathering,\" \"administrative grandfathering,\" or the \"grandfather rule\" and is separate and distinct from the pre-FIRM subsidy. To understand the grandfather rule, consider a hypothetical property X that is currently mapped into one flood zone (e.g., Zone AE), and is built to the proper building code and standards. If property X then is remapped to a new flood zone (e.g., Zone VE) and has maintained continuous insurance coverage under the NFIP, the owner of property X can pay the flood insurance rate and premium based on the prior mapped zone (i.e., pay the AE rate instead of the higher VE rate). A policyholder with a property may also be grandfathered if the elevation of a base flood is changed in a map, but the property itself does not change flood zones. ", "Congress eliminated the practice of offering grandfathering to policyholders after new maps were issued in BW-12, but then subsequently reinstated the practice in HFIAA. FEMA does not have a definitive estimate on the number of properties that have a grandfathered rate in the NFIP, though data are being collected to fulfill a separate mandate of HFIAA. Unofficial estimates suggest that at least 10%-20% of properties are grandfathered, and these figures may increase with time as newer maps are introduced in high population areas. ", "FEMA does not consider the practice of grandfathering to be a subsidy for the NFIP, per se, because the discount provided to an individual policyholder is cross-subsidized by other policyholders in the NFIP. Thus, while grandfathering does intentionally allow grandfathered policyholders to pay premiums that are less than their known actuarial rate, the discount is offset by others in the same rate class as the grandfathered policyholder. Although FEMA does not have an estimate of how many properties are paying grandfathered rates, the program tries to recoup lost revenue by charging higher rates for other policies in the SFHA. It is not clear, however, whether the NFIP is increasing other SFHA policy premiums by an amount equal to the discount from other NFIP risk-based rates that are being paid by the grandfathered properties. "], "subsections": []}, {"section_title": "Community Rating System", "paragraphs": ["Through a program called the Community Rating System (CRS), FEMA encourages communities to improve upon the minimum floodplain management standards that are required to participate in the NFIP. The CRS Program, as authorized by law, is intended to incentivize the reduction of flood and erosion risk, as well as the adoption of more effective measures to protect natural and beneficial floodplain functions. FEMA awards points that increase a community's \"class\" rating in the CRS on a scale of 1 to 10, with 1 being the highest ranking. Points are awarded for an array of improvements for how the community informs its public on flood risk; maps and regulates its floodplain; reduces possible flood damage; and provides immediate warnings and responds to flooding incidents. Starting at Class 9, policyholders in the SFHA within a CRS community receive a 5% discount on their SFIP premiums, with increasing discounts of 5% per class until reaching Class 1, and at that level, policyholders in the SFHA can receive a 45% discount on their SFIP premiums. These discounts are not extended to PRPs. ", "In order to participate in the CRS Program, a community must apply to FEMA and document its creditable improvements through site visits and assessments. As of June 2017, FEMA estimated that only 5% of eligible NFIP communities participate in the CRS program. However, these communities have a large number of flood policies, so more than 69% of all flood policies are written in CRS-participating NFIP communities. One can determine if and how highly rated a community is in the CRS Program through the most recent Flood Insurance Manual.", "For April 2014 premium rates, the National Research Council estimated that the CRS program provided an average 11.4% discount on SFIP premiums across the NFIP. The CRS discount is cross-subsidized into the NFIP program, such that the discount for one community ends up being offset by increased premium rates in all communities across the NFIP. Therefore, for April 2014 rates, the average 11.4% discount for CRS communities was cross-subsidized and shared across NFIP communities through a cost (or load) increase of 13.4% to overall premiums. Thus in some circumstances, the discount provided to communities participating in the CRS Program may be less than the expense of the overall CRS Program. "], "subsections": []}, {"section_title": "Affordability Study and Framework", "paragraphs": ["Congress has expressed concern related to the perceived affordability of flood insurance premiums. In BW-12, Congress required FEMA to commission a study with the National Academy of Sciences (NAS) regarding participation in the NFIP and the affordability of premiums. The Affordability Study was not finished by its original deadline (270 days following enactment of BW-12). Congress amended the authorization for the Study while also extending the deadline in HFIAA. The NAS has since completed the Affordability Study report in two parts. In HFIAA, Congress also required FEMA to develop a Draft Affordability Framework \"that proposes to address, via programmatic and regulatory changes, the issues of affordability of flood insurance sold under the National Flood Insurance Program, including issues identified in the affordability study.\" Due 18 months following the submission of the Affordability Study, the deadline for the Framework, based on FEMA's stated date of submittal of the Affordability Study, was September 10, 2017. FEMA published their Affordability Framework on April 17, 2018."], "subsections": []}]}]}, {"section_title": "Nonparticipating Communities and Community Suspension", "paragraphs": ["FEMA enforces two regulatory conditions\u2014probation and suspension\u2014for removing a participating community from the NFIP. Whether or not a particular community has either been placed on probation or suspended can be found using the NFIP's Community Status Book. Notably, a community cannot be removed from the NFIP because of increased or excess flood insurance claims and losses. Rather, probation and suspension only occur if the community fails to uphold its obligations related to floodplain management. ", "A community can be placed on probation by FEMA if it is found that it is failing to adequately enforce the floodplain management standards it has adopted. As established by regulations, probation can result in a fee of $50 being charged to all policyholders in the community while the community is given time to rectify FEMA's concerns regarding their implementation of the floodplain management standards. Ultimately, if the community does not correct its cited deficiencies after given time periods described in regulations, the community will be suspended from the NFIP by FEMA.", "A community can also be involuntarily suspended from the NFIP for either", "failing to adopt an approved floodplain map and an approved set of floodplain management standards within the time periods required by regulations; or repealing or revising its floodplain management standards to a level below the minimum standards set forth in regulations.", "A suspended community may be reinstated to the NFIP once the relevant errors or deficiencies provoking the suspension have been resolved to meet FEMA's specification. ", "Communities that have been suspended or those communities that do not participate in the NFIP can face significant consequences. Primarily, members of these communities are not able to purchase primary flood insurance through the NFIP, which may result in significant uninsured property risk in that community. However, communities may elect not to participate in the NFIP because they have very little flood risk to begin with, given their particular geography or climate. ", "In addition, if a community does not participate in, or has been suspended from, the NFIP but has been previously mapped by FEMA for flood hazards, it is difficult for the community and policyholders to access other forms of federal assistance for areas in the floodplain. For example, by law, no federal assistance may be provided for acquisition or construction purposes in an area that has been identified as having special flood hazards unless the property is covered by flood insurance. Likewise, federally backed mortgages still require flood insurance for properties in the SFHA, so these property-owners would be required to obtain such insurance in the private market. A community is allowed to leave the NFIP at its will, but the potential consequences of that decision are similar to those if the community has been suspended."], "subsections": []}, {"section_title": "Funding", "paragraphs": ["The funding for the NFIP is primarily maintained in an authorized account called the National Flood Insurance Fund (NFIF). Generally, the NFIP has been funded through three methods:", "receipts from the premiums of flood insurance policies, including fees and surcharges; direct annual appropriations for specific costs of the NFIP; and borrowing from the U.S. Treasury when the balance of the NFIF has been insufficient to pay the NFIP's obligations (e.g., insurance claims).", "This section of the report briefly discusses each of these three methods of NFIP funding. "], "subsections": [{"section_title": "Premium Fees and Surcharges", "paragraphs": ["As of November 2018, the written premium on approximately 5.1 million policies in force was about $3.6 billion. Included within the premiums are several fees and surcharges on flood insurance policies mandated by law. First, the Federal Policy Fee (FPF) was authorized by Congress in 1990 and helps pay for the administrative expenses of the program, including floodplain mapping and some of the insurance operations. The amount of the FPF is set by FEMA and can increase or decrease year to year. Since the April 2016 rating period, the FPF has been set at a flat rate of $50 for SFIPs, and $25 for PRPs. Since October 2017, the FPF is also $25 for contents-only policies. ", "Second, a Reserve Fund assessment was authorized by Congress in BW-12 to establish and maintain a Reserve Fund to cover future claim and debt expenses, especially those from catastrophic disasters. By law, FEMA is ultimately required to maintain a reserve ratio of 1% of the total loss exposure through the Reserve Fund assessment. As of January 2019, the amount required for the Reserve Fund ratio was approximately $13.07 billion. However, FEMA is allowed to phase in the Reserve Fund assessment to obtain the ratio over time, with an intended target of not less than 7.5% of the 1% Reserve Fund ratio in each fiscal year (so, using January 2019 figures, not less than approximately $980 million each year). Since April 2016, using its discretion, FEMA has charged every NFIP policy a Reserve Fund assessment equal to 15% of the premium charged for both SFIPs and PRPs. The Reserve Fund assessment has increased from its original status, in October 2013, of 5% on all SFIPs, and 0% on PRPs. ", "In addition to the Reserve Fund assessment, all NFIP policies are also assessed a surcharge following the passage of HFIAA. The amount of the surcharge is dependent on the type of property being insured. For primary residences, the charge is $25; for all other properties, the charge is $250. Starting on April 1, 2019, FEMA will be introducing a 5% surcharge for severe repetitive loss properties. Revenues from these surcharges are deposited into the Reserve Fund. "], "subsections": []}, {"section_title": "Appropriations and Offsetting Receipts", "paragraphs": [" Table 5 displays how Congress has appropriated and authorized offsetting receipts for the NFIP from FY2015 to FY2018. As provided for in law, all premiums from the sale of NFIP insurance are transferred to FEMA and deposited in the NFIF. Congress then authorizes FEMA to withdraw funds from the NFIF, and use those funds for specified purposes needed to operate the NFIP. In addition to premiums, Congress has also provided annual appropriations to supplement floodplain mapping activities. In addition to the mix of discretionary and mandatory funding levels indicated in Table 5 , which are set in appropriations legislation, fluctuating levels of mandatory spending occur in the NFIP in order to pay and adjust claims on affected NFIP policies."], "subsections": []}, {"section_title": "Borrowing from the U.S. Treasury, NFIP Debt", "paragraphs": ["Congress has authorized FEMA to borrow no more than $30.425 billion from the U.S. Treasury in order to operate the NFIP. The authorization for this borrowing would be reduced to $1 billion after May 31, 2019, were the NFIP to be allowed to lapse. In January 2017, the NFIP borrowed $1.6 billion due to losses in 2016 (the August 2016 Louisiana floods and Hurricane Matthew). On September 22, 2017, the NFIP borrowed the remaining $5.825 billion from the Treasury to cover claims from Hurricane Harvey, Hurricane Irma, and Hurricane Maria, reaching the NFIP's authorized borrowing limit of $30.425 billion. On October 26, 2017, Congress cancelled $16 billion of NFIP debt, making it possible for the program to pay claims for Hurricanes Harvey, Irma, and Maria. This represents the first time that NFIP debt has been cancelled, although Congress appropriated funds between 1980 and 1985 to repay NFIP debt. FEMA borrowed another $6.1 billion on November 9, 2017, to fund estimated 2017 losses, including those incurred by Hurricanes Harvey, Irma, and Maria and anticipated programmatic activities, bringing the debt up to $20.525 billion. The NFIP currently has $9.9 billion of remaining borrowing authority.", "The NFIP's debt to the U.S. Treasury cannot be tied directly to any single incident, as any insurance claim paid by the NFIP is in some way responsible for the existing debt of the NFIP (i.e., a dollar paid in claims, and therefore expended by the NFIP, following a minor flooding incident is no different than a dollar paid following a major hurricane). However, the NFIP was forced to borrow heavily to pay claims in the aftermath of two catastrophic flood seasons, the 2005 hurricane season (particularly Hurricanes Katrina, Rita, and Wilma) and Hurricane Sandy in 2012. For example, following Hurricane Sandy, Congress passed P.L. 113-1 to increase the borrowing limit of the NFIP from $20.775 billion to the current $30.425 billion. Prior to Hurricane Katrina in 2005, the NFIP had generally been able to cover its costs, borrowing relatively small amounts from the U.S. Treasury to pay claims, and then repaying the loans with interest.", "The NFIP's debt is conceptually owed by current and future participants in the NFIP, as the insurance program itself owes the debt to the Treasury and pays for accruing interest on that debt through the premium revenues of policyholders. For example, from FY2006 to FY2016 (i.e., since the NFIP borrowed funds following Hurricane Katrina), the NFIP has paid $2.82 billion in principal repayments and $3.83 billion in interest to service the debt through the premiums collected on insurance policies. ", "Under its current authorization, the only means the NFIP has to pay off the debt is through the accrual of premium revenues in excess of outgoing claims, and from payments made out of the growing Reserve Fund. As required by law, FEMA submitted a report to Congress in 2013 on how the borrowed amount from the U.S. Treasury could be repaid within a 10-year period. Whether or not FEMA will ultimately be able to pay off the debt is largely dependent on future insurance claims, namely if a catastrophic flooding incident such as Hurricanes Harvey, Sandy, or Katrina occurs again and with what frequency. However, using various predictions for both revenues (i.e., premiums) and losses (i.e., insurance claims), FEMA's report on debt repayment indicated even with the most optimistic scenario of future flooding it would take at least 13 years to repay the debt. In more realistic scenarios, the debt would not be paid off for at least 20 years, or it may increase considerably with future catastrophic incidents. For example, in April 2017, CBO projected that the NFIP would have insufficient receipts to pay the expected claims and expenses over the 2018-2027 period and that FEMA would need to use about $1 billion of its then-current $5.825 billion borrowing authority to pay those expected claims. Also in April 2017, FEMA updated some of the assumptions in the October 2015 NFIP Semi-Annual Debt Repayment Progress Report and estimated that at the end of 20 years, the NFIP's net debt would increase by a further $9.4 billion. No projections of the NFIP debt have yet been made that take account of the cancellation of $16 billion of NFIP debt, or the as yet unknown total claims of the 2017 hurricane season."], "subsections": []}, {"section_title": "NFIP Purchase of Reinsurance", "paragraphs": ["In HFIAA-14, Congress revised the authority of FEMA to secure reinsurance for the NFIP from the private reinsurance and capital markets. In September 2016, FEMA secured its first placement of reinsurance for the NFIP, contracting for reinsurance cover which ran from September 19, 2016, through March 19, 2017, structured into two coverage layers. Under the first layer, the reinsurers would indemnify FEMA $1 million for flood claims losses that exceed $5 million. Under the second layer, the reinsurers would indemnify FEMA $1,000,000 when the total losses from a single flood event exceed $5.5 billion. In January 2017, FEMA purchased $1.042 billion of insurance, to cover the period from January 1, 2017, to January 1, 2018, for a reinsurance premium of $150 million. Under this agreement, the reinsurance covered 26% of losses between $4 billion and $8 billion arising from a single flooding event. The purchase of private market reinsurance reduces the likelihood of FEMA needing to borrow from the Treasury to pay claims. However, since FEMA is withdrawing funds from the Reserve Fund to pay for this reinsurance, it subsequently increases the cost of insurance to policyholders. FEMA's modeling of the NFIP portfolio before the reinsurance purchase suggested that there was a 17.2% chance of losses from an event exceeding $4 billion in 2017. FEMA has already paid over $8.67 billion in claims for Hurricane Harvey, triggering the full 2017 reinsurance. ", "In January 2018, FEMA purchased $1.46 billion of insurance to cover the period from January 1, 2018, to January 1, 2019, for a reinsurance premium of $235 million. The agreement is structured to cover losses above $4 billion for a single flooding event, covering 18.6% of losses between $4 billion and $6 billion, and 54.3% of losses between $6 billion and $8 billion. In August 2018, FEMA entered into its first transfer of NFIP risk to private risk markets through an insurance-linked securities transfer, in the form of a three-year agreement with Hannover Re, a reinsurance company. Hannover Re is acting as a \"transformer,\" transferring $500 million of the NFIP's financial risk to the capital markets by sponsoring issuance of an indemnity-triggered cat bond. Hannover Re will indemnify FEMA for a portion of claims for a single qualifying flooding event that occurs between August 1, 2018, and July 31, 2021. The agreement is structured into two tranches. The first provides reinsurance coverage for 3.5% of losses between $5 and $10 billion, and the second for 13% of losses between $7.5 and $10 billion. FEMA paid a premium of $62 million for the first year of coverage. Unlike the earlier reinsurance purchases, which covered all NFIP flood losses, the catastrophe bond applies only to flooding resulting directly or indirectly from a named storm and covers only the 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Combined with the January 2018 reinsurance placement, FEMA transferred $1.96 billion of the NFIP's flood risk for the 2018 hurricane season to the private sector. FEMA has not claimed on the reinsurance purchased in 2018.", "In January 2019, FEMA purchased $1.32 billion of insurance to cover the period from January 1, 2019, to January 1, 2020, for a reinsurance premium of $186 million. The agreement is structured to cover losses above $4 billion for a single flooding event, covering 14% of losses between $4 billion and $6 billion, and 25.6% of losses between $6 billion and $8 billion, and 26.6% of losses between $8 billion and $10 billion."], "subsections": []}]}, {"section_title": "Expiration of Certain NFIP Authorities", "paragraphs": ["The statute for the NFIP does not contain a comprehensive expiration, termination, or sunset provision for the whole of the program. Rather, the NFIP has multiple different legal provisions that generally tie to the expiration of key componen ts of the program. Unless reauthorized or amended by Congress, the following will occur after May 31, 2019:", "The authority to provide new flood insurance contracts will expire. Flood insurance contracts entered into before the expiration would continue until the end of their policy term of one year. The authority for NFIP to borrow funds from the Treasury will be reduced from $30.425 billion to $1 billion.", "Other activities of the program would technically remain authorized following May 31, 2019, such as the issuance of FMA grants. However, the expiration of the key authorities described above would have varied, generally serious effects on these remaining NFIP activities. "], "subsections": []}]}}
{"id": "R45474", "title": "International Trade and Finance: Overview and Issues for the 116th Congress", "released_date": "2019-01-28T00:00:00", "summary": ["The U.S. Constitution grants authority to Congress to lay and collect duties and regulate foreign commerce. Congress exercises this authority in numerous ways, including through oversight of trade policy and consideration of legislation to implement trade agreements and authorize trade programs. Policy issues cover areas such as U.S. trade negotiations, U.S. trade and economic relations with specific regions and countries, international institutions focused on trade, tariff and nontariff barriers, worker dislocation due to trade liberalization, enforcement of trade laws and trade agreement commitments, import and export policies, international investment, economic sanctions, and other trade-related functions of the federal government. Congress also has authority over U.S. financial commitments to international financial institutions and oversight responsibilities for trade- and finance-related agencies of the U.S. government.", "Issues in the 116th Congress", "During his first two years in office, President Trump has focused on reevaluating many U.S. international trade and economic policies and relationships. The President's focus on these issues could continue over the next two years. Broad policy debates during the 116th Congress may include the impact of trade and trade agreements on the U.S. economy, including U.S. jobs; the causes and consequences of the U.S. trade deficit; the implications of technological developments for U.S. trade policy; and the intersection of economics and national security. Among many others, the potentially more prominent issues in this area that the 116th Congress may consider are", "the use and impact of unilateral tariffs imposed by the Trump Administration under various U.S. trade laws, as well as potential legislation that alters the authority granted by Congress to the President to do so; legislation to implement the proposed United States-Mexico-Canada Trade Agreement (USMCA), which would revise and modernize the North American Free Trade Agreement (NAFTA); the Administration's launch of bilateral trade negotiations with the European Union, Japan, and the United Kingdom, as well as key provisions in trade agreements, including on intellectual property rights, labor, the environment, and dispute settlement; U.S. engagement with the World Trade Organization (WTO), proposals for WTO reform, and the future direction of the multilateral trading system; U.S.-China trade relations, including investment issues, intellectual property rights protection, forced technology transfer, currency issues, and market access liberalization; the future of U.S.-Asia trade and economic relations, given President Trump's withdrawal of the United States from the proposed Trans-Pacific Partnership (TPP) and China's expanding Belt and Road Initiative; the Administration's use of quotas to achieve some of its trade objectives, and whether these actions represent a shift in U.S. policy towards \"managed trade\"; monitoring the implementation of legislation passed by the 115th Congress, including changes to the Committee on Foreign Investment in the United States (CIFUS) and export controls, as well as the creation of a new U.S. International Development Finance Corporation; re-authorization of the Export-Import Bank, the U.S. export credit agency that helps finance U.S. exports; oversight of international trade and finance policies to support foreign policy goals, including sanctions on Iran, North Korea, Russia, and other countries; shifts in U.S. leadership of international economic policy coordination at the Group of 7 (G-7) and the Group of 20 (G-20) under the Trump Administration; legislation to fund the Administration's commitment to increase U.S. contributions to the World Bank, as well as potential U.S.-led reforms to the institution; and major developments in financial markets, including the impact of other countries' exchange rate polices on the U.S. economy, high levels of debt in emerging markets, potential economic crises, and the role of the U.S. dollar in the global economy."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview1", "paragraphs": ["Members of Congress may address numerous ongoing and new policy issues in the 116 th Congress. The changing dynamics and composition of international trade and finance can affect the overall health of the U.S. economy, the success of U.S. businesses and workers, and the U.S. standard of living. They also have implications for U.S. geopolitical interests. Conversely, geopolitical tensions, risks, and opportunities can have major impacts on international trade and finance. These issues are complex and at times controversial, and developments in the global economy often make policymaking more challenging. Congress is in a unique position to address these and other issues given its constitutional authority for legislating and overseeing international commerce.", "The major focus of the 115 th Congress was overseeing the Trump Administration's evolving trade policy. The Trump Administration's approach to international trade arguably represents a significant shift from the approaches of prior administrations, in that it questions the benefits of U.S. leadership in the rules-based global trading system and expresses concern over the potential limits that this system may place on U.S. sovereignty. As such, the Administration's withdrawal from the proposed Trans-Pacific Partnership (TPP), imposition of unilateral trade restrictions on various U.S. imports, renegotiation of the North American Free Trade Agreement (NAFTA), modification of certain provisions in the U.S.-South Korea (KORUS) free trade agreement (FTA), and launch of an extensive review of U.S. participation in the World Trade Organization (WTO) were among the most notable developments in U.S. trade policy in the past two years. Other issues before Congress included approving legislation to (1) strengthen the process used to review the national security implications of foreign direct investment transactions in the United States; (2) modernize U.S. development finance tools to help advance U.S. national security and economic interests and global influence; and (3) provide temporary tariff suspensions and reductions\u2014through Miscellaneous Tariff Bills\u2014on certain products not available domestically. Continued focus on economic sanctions against Russia, North Korea, Iran, Cuba, and other countries were also of interest to many in Congress.", "The Trump Administration has displayed a more critical view than past administrations of U.S. trade agreements, made greater use of various U.S. trade laws with the potential to restrict U.S. imports, and focused on bilateral trade balances as a key metric of the health of U.S. trading relationships. As part of this shift in focus, the Administration has placed a greater emphasis on \"fair\" and \"reciprocal\" trade. China has also been a center of attention as the Administration has sought to address longstanding concerns over its policies on intellectual property (IP), forced technology transfer, and innovation. Citing these concerns and others, the President has unilaterally imposed trade restrictions on a number of U.S. imports under U.S. laws and authorities\u2014most of which have been used infrequently since the establishment of the WTO in 1995. During the 115 th Congress' second session, many Members weighed in on the President's actions. While some supported his use of unilateral trade measures, others raised concerns about potential negative economic implications of these actions and the risks they pose to the rules-based international trading system. Several Members introduced bills to amend some of the President's trade authorities\u2014for example, to require congressional consultation or approval before imposing new trade barriers.", "The implications of changes in the U.S. trade landscape for the 116 th Congress will depend on a number of factors, including the impact of the Administration's trade actions\u2014particularly increased tariffs\u2014on U.S. industries, firms, workers, and supply chains; the reaction of U.S. trading partners; and the extent to which future actions are in line with core U.S. commitments and obligations under the WTO and other trade agreements. The U.S.-China trade and economic relationship is complex and wide-ranging, and it will likely entail continued close examination by Congress. In addition to specific trade practices of concern, Congress scrutinize the economic and geopolitical implications of China's Belt and Road Initiative, which finances and develops infrastructure projects across a number of countries and regions. Congress may also examine the economic implications of China's industrial policies in high technology sectors, which could potentially challenge U.S. firms and disrupt global markets.", "How these issues play out, combined with the evolving global economic landscape, raise potentially significant legislative and policy questions for Congress. The 116 th Congress may consider (1) legislation to implement the U.S.-Mexico-Canada Agreement; (2) measures to reassert its constitutional authority over tariffs and other trade restrictions or to narrow the scope of how the president can use delegated authorities to impose such restrictions; (3) the extent to which past U.S. FTAs should be modernized or revised and, if so, in what manner; (4) what priority should be given to negotiating new U.S. FTAs with the European Union, the United Kingdom, Japan, and other trading partners, as well as the scope of negotiations; and (5) the impact of FTAs excluding the United States on U.S. economic and broader interests, and the appropriate U.S. response to the proliferation of such agreements. Another major issue is the role of the United States in the multilateral, rules-based trading system underpinned by the WTO. Historically, U.S. leadership in the global trading system has enabled the United States to shape the international trade agenda in ways that both advance and defend U.S. interests. The growing debate over the role and future direction of the WTO may raise important issues for Congress, such as how current and future WTO agreements affect the U.S. economy, the value of U.S. membership and leadership in the WTO, and the need to update or adapt WTO rules to reflect 21 st century realities. Such updates might address the proliferation of global supply chains, advances in technology, new forms of trade barriers, and market-distorting government policies.", "This report provides a broad overview of select topics in international trade and finance. It is not an exhaustive look at all issues, nor is it a detailed examination of any one issue. Rather, it provides concise background information of certain prominent issues that have been the subject of recent discussion and debate, and that may come before the 116 th Congress. However, it does include references to more in-depth CRS products on the issues."], "subsections": [{"section_title": "The United States in the Global Economy2", "paragraphs": ["In 2017, the global economy began to display signs of a synchronized recovery from the 2008-2009 global financial crisis and deep economic recession. The International Monetary Fund (IMF) estimates that real global gross domestic product (GDP) rose from 3.3% in 2016 to 3.7% in 2017 ( Figure 1 ). As a group, advanced economies grew 2.3% (up from 1.7% in 2016), while emerging market and developing economies grew 4.7% (up from 4.4% in 2016). The growth performance of major U.S. trading partners diverged widely in 2017, affecting both their bilateral trade and investment relations with the United States and their exchange rates against the U.S. dollar. Canada more than doubled its real GDP growth rate, from 1.4% in 2016 to 3.1% in 2017. China also continued to grow, albeit at a pace of 6.9% in 2017. Among the United States' top trading partners, India and Mexico experienced lower growth in 2017 than in 2016.", "The IMF forecasts improved performance in the short-term from both advanced economies\u20142.1% for 2019\u2014and emerging market and developing economies\u20144.7% in 2019. This growth is projected to slow in the medium term, however, as output gaps close and advanced economies return to their potential output paths. Beyond the short term, growth rates are expected to fall below pre-recession levels, as the aging populations and shrinking labor forces in advanced economies are expected to act as a drag on expansion. Overall fiscal policy is expected to remain expansionary in 2019, but begin to turn contractionary by 2020. Monetary policy may remain supportive in the Eurozone and Japan, but may continue to tighten in the United States\u2014although the speed of U.S. monetary tightening has been thrown into question by recent economic and financial market developments. More broadly, global financial conditions are expected to remain generally accommodative.", "Emerging markets (EMs) as a group face growing vulnerabilities to their economies due to uncertainties about global trade, depreciating currencies and risks of capital flight, volatile equity markets, large debts denominated in foreign currencies, and, in certain areas, the lack of deeper economic reform. Increased uncertainty over political and policy direction could constrain the rate of growth in Argentina, Brazil, Pakistan, Turkey, and South Africa. Additionally, China is expected to experience slower growth rates in the coming years, as the economy continues to rebalance away from investment toward private consumption, and from industry to services. The rise in China's nonfinancial debt as a share of GDP is likely to contribute to this downward trend. In Venezuela, the economy has collapsed, with the inflation rate forecast by the IMF to have exceeded 1,000,000% in 2018. In addition, declining commodity prices, particularly oil, could increase concerns in commodity-producing economies\u2014many of them EMs\u2014and destabilize national incomes. These and other developments could add to uncertainties in global financial markets, raise risks for U.S. banks of nonperforming loans, complicate the efforts of some banks to rebuild their capital bases, and potentially dampen prospects for long-term gains in productivity and higher rates of economic growth.", "The United States continues to experience strong economic fundamentals and remains a relatively bright spot within the global economy, which could help it sustain its position as a main driver of global economic growth. With close to 5% of the world's population, it accounted for almost 25% of the world's output in nominal U.S. dollars, more than 10% of its exports (goods and services), and 16% of its growth in 2017. The U.S. economy grew faster in 2017 than in 2016: U.S. real GDP increased 2.2% in 2017, up from 1.5% in 2016. The latest U.S. data show signs of continuing strong performance in 2018, with the IMF forecasting 2.9% growth and the U.S. Federal Reserve estimating growth between 2.9% and 3.2%. Some forecasts indicate that U.S. growth could stop accelerating by 2019 due to higher commodity prices, upward inflationary pressures, monetary policy tightening by the U.S. Federal Reserve, trade policy uncertainties, and global risks. Labor market data indicate that the United States is at\u2014or close to\u2014full employment, as the jobless rate reached 4.1% at the end of 2017 and is projected to have fallen below 4.0% in 2018. The decline in the price of oil is affecting not only the global economy, but also the U.S. economy. While the drop in energy prices may raise U.S. consumers' real incomes and improve the competitive position of some U.S. industries, these positive effects may be offset to some extent by a drop in employment and investment in the energy sector.", "With the improving global economic outlook, the IMF and the WTO had projected a rebound in trade growth for 2018 and 2019. However, amid several downside risks, including rising trade tensions between major economies like the United States and China, and heightened trade policy uncertainty, the IMF and WTO now expect global trade growth to slow. Restrictive trade policy measures imposed by the United States and some of its major trading partners may be affecting trade flows and prices in targeted sectors. Analysts claim that some recent policy announcements also have harmed business outlooks and investment plans, due to heightened concern over possible disruptions to supply chains and the risks of potential increases in the scope or intensity of trade restrictions. The Organization for Economic Cooperation and Development (OECD) projects that a further rise in trade tensions may have additional adverse effects on global investment and jobs.", "In addition, exchange rates continue to experience volatility, with a number of currencies depreciating against the U.S. dollar, including the Chinese renminbi, Argentine peso, Turkish lira, and South African rand. Volatile currency and equity markets\u2014combined with uncertainties over global trade and rates of inflation that remain below the target levels of a number of central banks\u2014could further complicate current efforts of the U.S. Federal Reserve to continue tightening monetary policy. Other major economies, such as Eurozone and Japan, may continue to pursue unconventional monetary policies. Uncertainties in global financial markets could put additional upward pressure on the U.S. dollar, as investors may seek \"safe haven\" currencies and dollar-denominated investments. For some economies, volatile currencies and continued low commodity prices could add to debt issues, raising the prospect of defaults and potential economic crises."], "subsections": []}, {"section_title": "The Role of Congress in International Trade and Finance12", "paragraphs": ["The U.S. Constitution assigns authority over foreign trade to Congress. Article I, Section 8, of the Constitution gives Congress the power to \"lay and collect Taxes, Duties, Imposts, and Excises\" and to \"regulate Commerce with foreign Nations.\" For the first 150 years of the United States, Congress exercised its power to regulate foreign trade by setting tariff rates on all imported products. Congressional trade debates in the 19 th century often pitted Members from northern manufacturing regions, who benefitted from high tariffs, against those from largely southern raw material exporting regions, who gained from and advocated for low tariffs.", "A major shift in U.S. trade policy occurred after Congress passed the highly protective \"Smoot-Hawley\" Tariff Act of 1930, which significantly raised U.S. tariff levels and led U.S. trading partners to respond in kind. As a result, world trade declined rapidly, exacerbating the impact of the Great Depression. Since the passage of the Tariff Act of 1930, Congress has delegated certain trade authority to the executive branch. First, Congress enacted the Reciprocal Trade Agreements Act of 1934, which authorized the President to enter into reciprocal agreements to reduce tariffs within congressionally pre-approved levels, and to implement the new tariffs by proclamation without additional legislation. Congress renewed this authority periodically until the 1960s. Subsequently, Congress enacted the Trade Act of 1974, aimed at opening markets and establishing nondiscriminatory international trade norms for nontariff barriers as well. Because changes in nontariff barriers in reciprocal bilateral, regional, and multilateral trade agreements may involve amending U.S. law, the agreements require congressional approval and implementing legislation. Congress has renewed or amended the 1974 Act five times, which includes granting \"fast-track\" trade negotiating authority. Since 2002, \"fast track\" has been known as trade promotion authority (TPA). In 2015, Congress authorized a new TPA through July 1, 2021 (see \" Trade Promotion Authority (TPA) \" below).", "Congress also exercises trade policy authority through the enactment of laws authorizing trade programs and measures to address unfair and other trade practices. It also conducts oversight of the implementation of trade policies, programs, and agreements. These include such areas as U.S. trade agreement negotiations, tariffs and nontariff barriers, trade remedy laws, import and export policies, economic sanctions, and the trade policy functions of the federal government.", "Over the years, Congress has authorized a number of trade laws that delegate a range of authorities to the President to investigate and take actions on imported goods for national security purposes (Section 232, Trade Expansion Act of 1962), trade remedies to counter dumping and subsidy practices by other countries, unfair trade practices (Section 301, Trade Act of 1974), or safeguard measures (Section 201, Trade Act of 1974). The Trump Administration is using these acts to impose steel and aluminum tariffs on major trading partners and for possible tariffs on vehicles and auto parts for national security purposes, and on a range of Chinese products for what the Administration deems as unfair trading practices including intellectual property theft and other practices. Some Members of Congress have opposed the use of these tariffs and in the 116 th Congress may seek to revisit or curtail these statutes.", "Additionally, Congress has an important role in international investment and finance policy. Under its treaty powers, the Senate considers bilateral investment treaties (BITs), and Congress sets the level of U.S. financial commitments to the multilateral development banks (MDBs), including the World Bank and the International Monetary Fund (IMF). It also funds the Office of the U.S. Trade Representative (USTR) and other trade agencies, and authorizes the activities of various agencies, such as the Export-Import Bank (Ex-Im Bank) and the Overseas Private Investment Corporation (OPIC). Congress also has oversight responsibilities over these institutions, as well as the Federal Reserve and the Department of the Treasury, whose activities can affect international capital flows and short-term movements in the international exchange value of the dollar. Congress also closely monitors developments in international financial markets that could affect the U.S. economy."], "subsections": []}, {"section_title": "Trade Promotion Authority (TPA)13", "paragraphs": ["Trade Promotion Authority (TPA) is a primary means by which Congress asserts its constitutional authority over trade policy, particularly U.S. trade agreements. TPA\u2014the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 ( P.L. 114-26 )\u2014which was signed by President Obama on June 29, 2015, is in place until July 1, 2021. Any agreement signed by that date, such as the United States-Mexico-Canada (USMCA), is eligible for consideration under TPA. TPA allows implementing bills submitted to Congress by the President for specific trade agreements to be considered under expedited legislative procedures\u2014limited debate, no amendments, and an up or down vote\u2014provided the President observes certain statutory obligations in negotiating trade agreements. These obligations include achieving progress in meeting congressionally defined U.S. trade policy negotiating objectives, as well as congressional notification and consultation requirements before, during, and after the completion of the negotiation process. ", "The primary purpose of TPA is to preserve the constitutional role of Congress with respect to the consideration of implementing legislation for trade agreements that require changes in domestic law, which includes tariffs, while also bolstering the negotiating credibility of the executive branch by ensuring that trade agreements will not be changed once concluded. Since the authority was first enacted in the Trade Act of 1974 ( P.L. 93-618 ), Congress has renewed or amended TPA five times (1979, 1984, 1988, 2002, and 2015). In addition, TPA legislative procedures are considered rules of the House and Senate, and, as such, can be changed at any time. Precedent exists for implementing legislation to have its eligibility for expedited treatment under TPA removed by Congress. In 2019, Congress may use TPA to consider the USMCA or other agreements negotiated by the Administration."], "subsections": []}]}, {"section_title": "Key U.S. Trade Policy Debates14", "paragraphs": ["The United States has been a driving force in breaking down trade and investment barriers across the globe and constructing an open and rules-based global trading system through a wide range of international institutions and agreements. Since 1934, U.S. policymakers across political parties have recognized the importance of pursuing trade policies that promote more open, rules-based, and reciprocal international commerce, while being cognizant of potential costs to specific segments of the population, particularly through greater competition. Although there is a general consensus that, in the aggregate, the overall economic benefits of reducing barriers to trade and investment outweigh the costs, the processes of trade and financial liberalization, and of globalization more broadly, have presented both opportunities and challenges for the United States. Many U.S. consumers, workers, firms, and industries have benefited from increased trade. On the consumption side, U.S. households have enjoyed lower product prices and a broader variety of goods and services\u2014some of which the United States does not produce in large quantities. On the production side, stronger linkages to the global economy force U.S. industries and firms to focus on areas in which they have a comparative advantage, provide them with export and import opportunities, enable them to realize economies of scale, and encourage them to innovate.", "At the same time, some stakeholders argue that globalization is not inclusive, benefiting some more than others. They point to job losses, stagnant wages, and rising income inequality among some groups\u2014as well as to environmental degradation\u2014as indicators of the negative impact of globalization on the U.S. economy, although the causes of these trends are highly contested. Some policymakers also perceive growing bilateral U.S. trade deficits as evidence that U.S. trade with other nations is \"uneven\" or that foreign countries engage in \"unfair\" trade practices. Others view many of the existing global trade rules as outdated, since they do not reflect the realities of the 21 st century\u2014particularly when it comes to technological advances, new forms of trade (such as digital trade), and threats that international trade may pose to U.S. national security. Finally, some experts argue that the 2008-2009 financial crisis caused painful adjustment and costs for some segments of the population, which have exacerbated concerns related to U.S. trade policy and have led to increased domestic nationalism.", "A longstanding objective of some Members of Congress and administrations has been to achieve a \"level playing field\" for U.S. industries, firms, and workers, and to preserve the United States' high standard of living\u2014all while remaining innovative, productive, and internationally competitive, as well as safeguarding those stakeholders who otherwise may be left behind in a fast-changing global economy. Given Congress' constitutional authority over U.S. trade policy, Members are in a unique to position to influence, legislate, and oversee responses that support these goals and that reduce or soften the hardships and costs from international trade."], "subsections": [{"section_title": "Trade and U.S. Employment16", "paragraphs": ["A key question in policy debates over international trade is its impact on U.S. jobs. Trade is one among a number of forces that drive changes in employment, wages, the distribution of income, and ultimately the U.S. standard of living. Most economists argue that macroeconomic forces within an economy, including technological and demographic changes, are the dominant factors that shape trade and foreign investment relationships and complicate efforts to disentangle the distinct impact that trade has on the economy. In a dynamic economy like that of the United States, jobs are constantly being created and replaced as some economic activities expand, while others contract. Various measures are used to estimate the role and impact of trade in the economy and of trade on employment. One measure developed by the U.S. Department of Commerce concludes that, as of 2016 (the most recent year for which data is available), exports support, directly and indirectly, 10.7 million jobs in the U.S. economy: 6.3 million in the goods-producing sectors and 4.4 million in the services sector ( Figure 2 ). According to these estimates, jobs associated with international trade, especially jobs in export-intensive manufacturing industries, earn 18% more on a weighted average basis than comparable jobs in other manufacturing industries.", "Trade and trade liberalization can have a differential effect on workers and firms in the same industry. Some estimates indicate that the short-run costs to workers who attempt to switch occupations or switch industries in search of new employment opportunities may experience substantial effects. One study concluded that workers who switched jobs as a result of trade liberalization generally experienced a reduction in their wages, particularly in occupations where workers performed routine tasks. These negative income effects were especially pronounced in occupations exposed to imports from low-income countries. In contrast, occupations associated with exports experienced a positive relationship between rising incomes and growth in export shares. As a result of the differing impact of trade liberalization on workers and firms, Congress created Trade Adjustment Assistance (TAA) programs to mitigate the potential adverse effects of trade liberalization on workers, firms, and farmers (see text box below)."], "subsections": []}, {"section_title": "U.S. Trade Deficit20", "paragraphs": ["The overall U.S. trade deficit, or more broadly the current account balance, represents an accounting principle that expresses the difference between the country's exports and imports of goods and services. The United States has experienced annual current account deficits since the mid-1970s. Congressional interest in the trade deficit has been heightened by the Trump Administration's approach to international trade. The Administration has used the U.S. trade deficit as a barometer for evaluating the success or failure of the global trading system, U.S. trade policy, and U.S. trade agreements. It has characterized the trade deficit as a major factor in a number of perceived ills afflicting the U.S. economy\u2014including the rate of unemployment and slow gains in wages\u2014and partially as the result of unfair trade practices by foreign competitors.", "Many economists, however, argue that this characterization misrepresents the nature of the trade deficit and the role of trade in the U.S. economy. In general, traditional economic theory holds that the overall U.S. trade deficit stems from U.S. macroeconomic policies and an imbalance between saving and investment in the U.S. economy. Currently, the demand for capital in the U.S. economy outstrips the amount of gross savings supplied by households, firms, and the government (a savings-investment imbalance). Therefore, many observers argue that attempting to alter the trade deficit without addressing the underlying macroeconomic issues would be counterproductive and create distortions in the economy. A concern expressed by some analysts and policymakers is the debt accumulation associated with sustained trade deficits. They argue that the long-term impact on the U.S. economy of borrowing to finance imports depends on whether those funds are used for greater investments in productive capital with high returns that raise future standards of living, or whether they are used for current consumption. These concerns and the various policy approaches that have been used to alter the savings-investment imbalance in the economy are beyond the scope of this report."], "subsections": []}, {"section_title": "Core Provisions in U.S. Trade Agreements21", "paragraphs": ["U.S. free trade agreements (FTAs) generally are negotiated on the basis of U.S. trade negotiating objectives established by Congress under Trade Promotion Authority (TPA). U.S. FTAs have evolved in the scope and depth of their commitments since the 1980s. Since the first bilateral U.S. FTA with Israel, which is only 14 pages in length and focused primarily on the elimination of tariffs, the United States has pursued increasingly comprehensive and enforceable commitments. The North American Free Trade Agreement (NAFTA), which entered into force in 1994, was the first FTA that incorporated many of the rules in more recent U.S. FTAs. It initiated a new generation of U.S. trade agreements in the Western Hemisphere and other parts of the world, influencing negotiations in areas such as market access, rules of origin, intellectual property rights (IPR), foreign investment, and dispute resolution. It was the first trade agreement to include provisions on IPR protection, labor, and the environment. Although not all FTAs are exactly the same, core provisions incorporated into most U.S. FTAs include the following:", "Tariffs and Market Access. Elimination of most tariffs and nontariff barriers on goods, services, and agriculture over a period of time, and specific rules of origin requirements. Services. Commitments on national treatment, most-favored nation (MFN) treatment, and prohibition of local presence requirements. IPR Protection. Minimum standards of protection and enforcement for patents, copyrights, trademarks, and other forms of IPR. FTAs after NAFTA have new commitments reflecting standard protection similar to that found in U.S. law. Foreign Investment. Removal of investment barriers, basic protections for investors, with exceptions, and mechanisms for dispute settlement. Labor and Environmental Provisions. Commitments to enforce one's own laws in NAFTA evolved to commitments in later FTAs to adopt, maintain, and not derogate from laws incorporating specific standards, among other provisions. Government Procurement. Commitments to provide certain levels of access to and nondiscriminatory treatment in parties' government procurement markets. Dispute Settlement. Provisions for dispute settlement mechanism to resolve disputes regarding each party's adherence to agreement obligations. Other Provisions. Other core provisions have included those related to competition policy, monopolies, and state enterprises, sanitary and phytosanitary standards, safeguards, technical barriers to trade, transparency, and good governance.", "Before an FTA can enter into force, it must be ratified by the governments of parties involved. In the United States, Congress must approve an FTA before it can enter into force. Before voting on an agreement, Congress may review whether the objectives it set out in TPA legislation were followed in the negotiation of the agreement, evaluate the overall economic effect on the U.S. economy, including through a mandated report by the U.S. International Trade Commission (ITC), determine whether the agreement would promote U.S. standards such as IPR, labor, and the environment in other countries, or consider the enforceability of the agreement and its rules."], "subsections": []}, {"section_title": "Managed Trade23", "paragraphs": ["During 2018, the Trump Administration turned to quotas and quota-like arrangements to achieve some of its trade objectives. It negotiated potential quotas on autos through side letters to the proposed United States-Mexico-Canada Agreement (USMCA), as well as quota arrangements that allowed South Korea, Brazil, and Argentina to avoid U.S. tariff increases on steel and aluminum imports. Some Members of Congress and analysts have questioned whether these actions represent an undesirable shift in U.S. trade policy\u2014towards one that some analysts have labeled managed trade. Managed trade generally refers to government efforts to achieve measurable results by establishing\u2014through quantitative restrictions on trade and other numerical targeted approaches\u2014specific market shares or targets for certain products. These are met through mutual agreement or under threat of trade action (e.g., increased tariffs). The 116 th Congress may wish to examine the extent to which the Administration is adopting such an approach, including its effectiveness and impact on U.S. and international trade.", "Advocates of managed trade policies contend that, by negotiating results-oriented agreements and using the size of the U.S. economy as leverage, the United States can ensure that trade with certain trading partners is \"fair,\" \"balanced,\" and \"reciprocal.\" In addition, they argue, it will force countries to change their distortive economic policies, decrease the size of the U.S. trade deficit and, by reducing U.S. imports, help strengthen certain U.S. industries and boost U.S. employment. Other policymakers view these measures as protectionist and harmful to the economy. Many economists question the efficacy of prodding U.S. trading partners into negotiating or accepting quotas or numerical targets, as well as the ability of the state, rather than market forces, to provide the most efficient allocation of scarce resources\u2014even when attempting to respond to trade-distorting measures by trading partners. They also note that policies that restrict U.S. imports and boost U.S. exports may not decrease the overall size of the U.S. trade deficit, as it is primarily the result of macroeconomic forces\u2014namely the low level of U.S. savings relative to total investment. According to some observers, a move away from a market-driven, multilateral rules-based system to one driven by numerical outcomes and targets could lead to increasing trade restrictions, retaliation or replication by other countries, higher prices, lower global economic growth, and the erosion of the international trading system."], "subsections": []}, {"section_title": "Trade and Technology24", "paragraphs": ["The rapid growth of digital technologies has created new opportunities for U.S. consumers and businesses but also new challenges in international trade. For example, consumers today access e-commerce, social media, telemedicine, and other offerings not available thirty years ago. Businesses use advanced technology to reach new markets, track global supply chains, analyze big data, and create new products and services. New technologies facilitate economic activity but also create new trade policy questions and concerns.", "Recent international negotiations have sought to improve and remove barriers to market access for trade in digital goods and services and also address other concerns, such as cybersecurity and privacy protection. Internationally-traded information and communication technologies (ICT) products, whether physical goods (e.g., laptops) or emerging technologies, including algorithms and artificial intelligence, may be subject to traditional trade barriers such as tariffs or export controls. Nontariff barriers impede U.S. firms' market access by limiting what companies can offer or how they can operate in a foreign market, such as requiring local content or partners. Internet sovereignty is a challenge for firms who seek market access in countries where the government strictly controls what digital data is permitted within its borders, such as what information people can access online. Another often-cited digital trade barrier is data localization requirements or cross-border data flows restrictions that policymakers may enact to promote safety, security, privacy or favor domestic firms but that raise costs and risks for foreign firms. Technology transfer requirements and cybersecurity issues include the infringement of intellectual property and theft of trade secrets, economic espionage, and may touch on national security concerns.", "The 116 th Congress may consider a variety of issues related to technology and trade. These include provisions in the proposed United States-Mexico-Canada Agreement (USMCA), U.S. participation in e-commerce negotiations at the World Trade Organization (WTO), evolving online privacy policies in the United States and other countries, as well as concerns about trade with China, such as those outlined in the Trump Administration's investigation under Section 301 of the Trade Act of 1974 (see section on Tariff Actions by the Trump Administration)."], "subsections": []}, {"section_title": "Economics and National Security26", "paragraphs": ["U.S. officials have long recognized that U.S. economic interests are vital to national security concerns and have considered the concepts of \"geoeconomics\" and \"economic statecraft\" in relation to national security strategy. Broadly speaking, these terms refer to the political consequences of economic decisions or the economic consequences of political trends and the dynamics of national power.", "In recent years, a combination of domestic and international forces are challenging the U.S. leadership role in ways that are unprecedented in the post-World War II era. For some observers, these challenges are not just about economic growth and international economic engagement, but directly affect U.S. national security. In their view, China's growing economic competition for leading-edge technologies, in particular, challenges not only U.S. commercial interests, but potentially threatens U.S. national security interests.", "According to some observers, since taking office, the Trump Administration has promoted a form of national security that mixes trade and economic relationships with national security, defense, and foreign policy objectives in ways that seem more confrontational than cooperative, more unilateral than multilateral, and more central to its overall agenda than in previous administrations. For example, the Trump Administration has used the U.S. trade deficit and import tariffs to support the defense industrial base by placing tariffs on the imports of strategic security partners as a form of national economic security. Despite existing National Security Strategy (NSS) reports and previous executive branch efforts, there is a view that the United States lacks a holistic, whole-of-government approach for thinking about economic challenges and opportunities in relation to U.S. national security. To that end, on April 25, 2018, Senators Young, Merkley, Rubio and Coons introduced S. 2757 , the National Economic Security Strategy Act of 2018 to \"ensure Federal policies, statutes, regulations, procedures, data gathering, and assessment practices are optimally designed and implemented to facilitate the competitiveness, prosperity, and security of the United States.\" This and similar legislation may be introduced in the 116 th Congress."], "subsections": []}]}, {"section_title": "Policy Issues for Congress", "paragraphs": ["Policy debates during the 116 th Congress may include the use and impact of unilateral tariffs imposed by the Trump Administration under various U.S. trade laws, as well as potential legislation that alters the authority granted by Congress to the President to do so; U.S.-China trade relations; legislation to implement the proposed United States-Mexico-Canada Trade Agreement (USMCA); and the Administration's launch of bilateral trade negotiations with the European Union, Japan, and the United Kingdom, among many others. The following section provides a broad overview of the potentially more prominent issues in international trade and finance that the 116 th Congress may consider."], "subsections": [{"section_title": "Tariff Actions by the Trump Administration30", "paragraphs": ["Concerns over trading partner trade practices, the U.S. trade deficit, and potential negative effects of U.S. imports have been a focus of the Trump Administration. Citing these concerns and others, the President has imposed increased tariffs under (1) Section 201 of the Trade Act of 1974 on U.S. imports of washing machines and solar products; (2) Section 232 of the Trade Expansion Act of 1962 on U.S. imports of steel and aluminum, and potentially autos and uranium, and (3) Section 301 of the Trade Act of 1974 on U.S. imports from China. Congress delegated aspects of its constitutional authority to regulate foreign commerce to the President through these trade laws. They allow presidential action, based on agency investigations and other criteria, to impose import restrictions to address specific concerns ( Table 1 ). They have been used infrequently in the past two decades, in part due to the 1995 creation of the World Trade Organization (WTO) and its dispute settlement system.", "Annual U.S. imports of goods subject to the additional tariffs, which range from 10% to 50%, totaled $282 billion in 2017 ( Figure 3 ). All formally proposed tariffs are now in effect. The President has informally raised the prospect of tariffs on an additional $267 billion of U.S. annual imports from China, and, pending a Section 232 investigation expected to be finalized in early 2019, additional tariffs on approximately $361 billion of U.S. auto and parts imports. While the tariffs benefit import-competing U.S. producers, they also increase costs for downstream users of imported products (e.g., auto producers using steel in cars) and consumers. In response to the U.S. actions, several U.S. trading partners have initiated WTO dispute settlement proceedings and imposed retaliatory tariffs on goods accounting for $126 billion of annual U.S. exports in 2017, causing export declines in targeted industries.", "Congressional views on the tariffs differ, but many Members have raised concerns over their potential negative economic implications and the process for seeking exclusions to tariffs. Some also question whether the President's actions adhere to the intent of the trade laws used. The 115 th Congress held a number of hearings on the effects and implementation of the tariffs, and several Members introduced legislation that would have altered the President's current authorities. The issue may be the subject of further debate and possible legislative activity in the 116 th Congress."], "subsections": [{"section_title": "Tariffs on U.S. Imports from China (Section 301)33", "paragraphs": ["Sections 301 of the Trade Act of 1974, as amended, is one of the principal statutory means by which the United States addresses \"unfair\" foreign barriers to U.S. exports. Concerns over China's policies on intellectual property (IP), technology, and innovation led the Trump Administration to launch a \"Section 301\" investigation in August 2017. In March 2018, President Trump signed a memorandum justifying U.S. action against China under Section 301. In its justification, the Administration focused on: 1) various Chinese policies that force or pressure technology transfers from U.S. companies to a Chinese entity; 2) China's unfair technology licensing practices that prevent U.S. firms from achieving market-based returns for their IP; 3) China's investments and acquisitions which generate large-scale technology and IP transfer to support China's industrial policy goals; and 4) China's cyber intrusions into U.S. computer networks to gain access to valuable business information.", "On June 15, the U.S. Trade Representative (USTR) announced a two-stage plan to impose 25% ad valorem tariffs on $50 billion worth of Chinese imports. On June 16, China issued its own two-stage retaliation plan against the United States. In response, on June 18, President Trump directed the USTR to propose a new list of products worth $200 billion that would be subject to increased 10% tariffs if China retaliated (stage 3). The first two stages of U.S. 25% tariff hike measures went into effect on July 6 and August 23. China implemented comparable countermeasures on U.S. products. On September 24, the Trump Administration imposed 10% increased tariffs on additional Chinese imports (stage 3), which were to increase to 25% on January 1, 2019 (now on hold). In response, China raised tariffs (by 5% and 10%) on $60 billion worth of imports from the United States ( Figure 4 ). The Trump Administration created a process to enable affected U.S. firms to petition for an exclusion from some of the tariff increases.", "A bilateral meeting between Presidents Trump and Xi at the conclusion of the December 2018 G-20 summit in Argentina may have laid groundwork for addressing the tariff escalation. The two leaders agreed to begin negotiations on \"structural changes\" on IP and technology issues, along with agriculture services, with the goal of achieving an agreement in 90 days. The White House reported that China agreed to make \"very substantial\" (though unspecified) purchases of U.S. agricultural, energy, and industrial products. President Trump agreed to suspend the tariff rate increases planned for January 1, 2019, unless no agreement is reached in 90 days. On December 13, the U.S. Department of Agriculture reported that China had agreed to purchase 1.13 million metric tons of U.S. soybeans.", "While some policymakers and many business representatives have expressed support for the Administration's goals of improving China's IP and technology policies, they question whether tariff hikes against China can achieve those goals. Several Members of Congress have raised concerns over the impact the current trade conflict is having on their constituents in terms of higher-priced imports from China and lost U.S. export sales."], "subsections": []}, {"section_title": "Tariffs on U.S. Imports of Aluminum and Steel Products (Section 232)36", "paragraphs": ["Section 232 of the Trade Expansion Act of 1962 (as amended) is sometimes called the \"national security clause,\" because it provides the President with the ability to impose restrictions on certain imports that the U.S. Department of Commerce determines threaten to impair the national security. If requested, or upon self-initiation, Commerce investigates the import of specific product(s) and, if it determines in the affirmative, and if the President concurs, he may adjust the subject imports using tariffs, quotas, or other measures to offset the adverse effect. Section 232 sets out timelines and procedures for the investigation and that the President must follow once a decision is made. The executive branch has broad discretion in Section 232 cases to define the scope of the investigation, and the World Trade Organization (WTO) allows members to take measures in order to protect \"essential security interests.\"", "Based on concerns about ongoing global overcapacity and certain trade practices, in April 2017, the Trump Administration initiated Section 232 investigations on U.S. steel and aluminum imports. Effective March 23, 2018, President Trump applied 25% and 10% tariffs, respectively, on certain steel and aluminum imports. In order to limit potential negative domestic effects of the tariffs on U.S. businesses and consumers, Commerce established a process for product exclusions requests and has received over 49,000 requests (including resubmissions) as of October 28, 2018. While the President negotiated tariff exemptions and quota arrangements with Brazil, South Korea, Argentina, and Australia, the proposed United States-Mexico-Canada Agreement (USMCA) did not resolve or address the Section 232 tariffs on imported steel and aluminum from Canada and Mexico. Multiple U.S. trading partners are challenging the tariffs under WTO dispute settlement rules and have threatened or enacted retaliatory measures, risking potential escalation of retaliatory tariffs. In turn, the United States has argued that trading partners' counter tariffs in response to the U.S. Section 232 measures cannot be justified under WTO rules, and the United States filed its own WTO complaints over the retaliatory tariffs by at least six countries.", "As Congress continues to debate the Administration's Section 232 actions, it may consider multiple issues including potential amendments to the delegation of constitutional authority that Congress gave to the President through Section 232, examining the investigation and implementation processes, and exploring opportunities to address specific market-distorting practices that are the root causes of steel and aluminum overcapacity through international forums and trade negotiations."], "subsections": []}, {"section_title": "Tariffs on U.S. Imports of Washing Machines and Solar Products (Section 201)42", "paragraphs": ["Section 201 of the Trade Act of 1974 grants authority to the President to provide temporary import relief (e.g., through additional tariffs or quotas on imports) in order to facilitate positive adjustment of a U.S. industry to import competition. The President may provide this relief if, as a result of an investigation based on industry petitions or self-initiated by the President, the U.S. International Trade Commission (ITC) makes a recommendation for relief based on a finding that increased U.S. imports of these products are a \"substantial cause of serious injury\"\u2014or threat thereof\u2014to U.S. manufacturers. Section 201 investigations are unlike other trade remedy tools, such as antidumping (AD) and countervailing duty (CVD) cases that investigate \"material injury\" (or threat thereof) based on sales of imported products at less than fair value (AD) or that are subsidized by a foreign government or other public entity (CVD). Rather, Section 201 cases investigate import surges of fairly-traded goods.", "On January 23, 2018, based on affirmative findings of serious injury by the ITC and recommended actions, President Trump announced that he would impose temporary new tariffs on imports of large residential washing machines and solar photovoltaic (PV) cells and modules , effective February 7, 2018. When initiating the actions on January 23, the President said , \"My administration is committed to defending American companies, and they've been very badly hurt from harmful import surges that threaten the livelihood of their workers, of jobs, actually, all over this country.\" While such actions may benefit some U.S. domestic producers, they could also raise prices for U.S. consumers and domestic industries that use these imports to manufacture downstream products. The Section 201 measures could also increase tensions with various U.S. trading partners. Prior to the ITC affirmative findings, several Members wrote to the ITC commissioners to caution that imposing tariffs could have unintended consequences, including by raising prices and potentially costing jobs at foreign-run facilities in the United States."], "subsections": []}, {"section_title": "Trading Partner Retaliation and Countermeasures48", "paragraphs": ["Increasing U.S. tariffs or imposing other import restrictions potentially opens the United States to complaints it is violating its World Trade Organization (WTO) and free trade agreement (FTA) commitments. In response to the recent U.S. tariff actions, several U.S. trading partners, including Canada, China, Mexico, and the European Union (EU), have initiated dispute settlement proceedings, which are now at various stages in the WTO dispute settlement process. Several countries have also imposed retaliatory tariffs and the United States has similarly responded by initiating additional disputes at the WTO, arguing that the retaliatory measures do not adhere to WTO commitments. Some analysts fear this escalating series of unilateral tariff actions, retaliations, and resulting WTO disputes may threaten the stability of the multilateral trading system, given the political sensitivity of a potential WTO panel ruling on issues related to national security (Section 232) and the possibility of countries potentially disregarding WTO rulings not in their favor.", "Economically, retaliation amplifies the potential negative effects of the U.S. tariff measures. It broadens the scope of U.S. industries potentially harmed by making targeted U.S. exports less competitive in foreign markets. To date, six trading partners have imposed retaliatory tariffs in response to Section 232 actions affecting approximately $25 billion of U.S. annual exports, and China has imposed retaliatory tariffs in response to Section 301 actions affecting approximately $101 billion of U.S. annual exports ( Figure 5 ). The products affected cover a range of industries, but the largest export categories include soybeans, motor vehicles, steel, and aluminum. Lost market access resulting from the retaliatory tariffs may compound concerns that U.S. exporters increasingly face higher tariffs than some competitors in foreign markets, as other countries proceed with trade liberalization agreements, such as the EU-Japan FTA, which do not include the United States."], "subsections": []}]}, {"section_title": "U.S.-China Trade and Key Issues52", "paragraphs": ["Since China embarked upon economic and trade liberalization in 1979, U.S.-Chinese economic ties have grown extensively (see text box). Total bilateral trade rose from about $2 billion in 1979 to $636 billion in 2017. China was the United States' largest trading partner, largest source of imports ($506 billion), and third largest merchandise export market ($130 billion). From 2008 to 2017, U.S. merchandise exports to China grew faster (at 82.4%) than those to any other major U.S. trading partner. According to the U.S. Department of Commerce's Bureau of Economic Analysis (BEA), sales by U.S.-invested firms in China in 2016 totaled $464 billion. The U.S. merchandise trade deficit with China was $376 billion in 2017, by far the largest U.S. bilateral trade imbalance; projections estimate it may have reached $418 billion in 2018 ( Figure 6 ). Reducing the U.S. trade deficit with China has been a major objective of the Trump Administration and many in Congress. "], "subsections": [{"section_title": "Industrial Policies and Made in China 202555", "paragraphs": ["From the U.S. perspective, tensions over various economic and trade issues stem largely from China's incomplete transition to an open-market economy. While China has significantly liberalized its economic and trade regimes over the past three decades\u2014especially since joining the World Trade Organization (WTO) in 2001\u2014it continues to maintain or has recently imposed a number of policies to support and protect domestic firms, especially state-owned enterprises (SOEs). Major Chinese government practices of concern to U.S. stakeholders include subsidies, tax breaks, and low-cost loans given to Chinese firms, foreign trade and investment barriers, discriminatory intellectual property and technology policies, and the lack of the rule of law. An American Chamber of Commerce in China business climate survey in 2018 found that 75% said that foreign businesses in China were \"less welcomed\" there than before, compared to 44% who felt that way in 2014. Several recently issued economic plans, such as the \"Made in China 2025\" (MIC 2025) initiative, which seeks to make China a global leader in advanced manufacturing in 10 designated industries, appear to indicate a sharply expanded government role in the economy. U.S. business representatives have raised concerns over the potentially distortionary and discriminatory aspects of the MIC 2025 plan, and the Trump Administration's Section 301 actions against China appear to be largely aimed at curbing the initiative (see section on Tariffs on U.S. Imports from China). More recently, Presidents Trump and Xi agreed to negotiations to address issues of concern. The 116 th Congress may monitor ongoing 301 actions and any potential bilateral agreement to resolve U.S. trade concerns."], "subsections": []}, {"section_title": "China's Policies on Technology, Innovation, and Intellectual Property58", "paragraphs": ["U.S. firms cite the lack of effective protection of intellectual property rights (IPR) as one of their biggest impediments in conducting business in China. A study by the Commission on the Theft of American Intellectual Property estimated that global IPR theft costs the U.S. economy $300 billion, of which China accounted for between 50% ($150 billion) and 80% ($240 billion) of those losses. In May 2014, the U.S. Department of Justice indicted five members of the Chinese People's Liberation Army for government-sponsored cyber-espionage against U.S. companies and theft of proprietary information to aid state-owned enterprises. During Chinese President Xi Jinping's state visit to the United States in September 2015, the two sides reached an agreement on cyber security, pledging that neither country's government would conduct or knowingly support cyber-enabled theft of intellectual property for commercial purposes and to establish a joint dialogue on cybercrime and related issues (which has continued under the Trump Administration). However, in October 2018, Crowdstrike, a U.S. cybersecurity technology company, identified China as \"the most prolific nation-state threat actor during the first half of 2018.\" It found that Chinese entities had made targeted intrusion attempts against \"multiple sectors of the economy, including biotech, defense, mining, pharmaceutical, professional services, transportation, and more.\"", "In November 2018, FBI Director Christopher Wray stated: \"No country presents a broader, more severe threat to our ideas, our innovation, and our economic security than China.\" Then U.S. Attorney General Jeff Sessions proclaimed that \"Chinese economic espionage against the United States has been increasing\u2014and it has been increasing rapidly.\" On December 1, 2018, U.S. Assistant Attorney General John C. Demers stated at a Senate hearing that from 2011 to 2018, China was linked to more than 90% of the Department of Justice's cases involving economic espionage and two-thirds of its trade secrets cases. The 116 th Congress may consider how to address the threats outlined by senior government officials, including through possible legislation."], "subsections": []}, {"section_title": "Belt and Road Initiative (BRI)64", "paragraphs": ["China conceived its Belt and Road Initiative (BRI) in 2013 to promote greater economic connectivity and integration across several regions, through the development of \"economic corridors\" and revitalized land and sea routes for trade and investment. While infrastructure investment is a core component, objectives of policy coordination, trade facilitation, financial integration, and people-to-people ties also drive the initiative. To date, China has released little official aggregate information on BRI, raising questions for the United States and others about its scope. According to Chinese media, China has signed agreements on BRI cooperation with more than 100 countries and international institutions, and collectively, projects could entail capital requirements ranging $1 trillion to $4 trillion. Based on emerging trends, projects appear to largely involve Chinese SOEs, materials, and financing. If BRI achieves Chinese objectives to \"complement the development strategies of countries involved\" and build a \"new model of win-win cooperation\" it could help fill major deficits in infrastructure investment in Asia and other regions and reshape trade patterns.", "Some observers, including U.S. officials and Members of Congress, have growing concerns about the initiative's motives, perceived lack of transparency in projects, and potential debt sustainability problems for countries receiving Chinese loans (such as Sri Lanka and Pakistan), as well as the use of economic leverage to achieve geopolitical and strategic goals. The United States has commercial interests at stake, and more broadly, economic interests in shaping the rules governing global and regional trade and finance; BRI could potentially reshape these systems to reflect Chinese interests. In response, the Trump Administration has called for modernizing U.S. development finance tools and cooperating with allies on \"high-quality infrastructure.\" Its \"Free and Open Indo-Pacific\" strategy involves $113 million in new U.S. initiatives and investments in the region.", "China's growing economic influence was cited as a motivation for Congress to pass the Better Utilization of Investments Leading to Development (BUILD) Act ( P.L. 115-254 ), signed into law in October 2018. The 116 th Congress may hold further hearings on Chinese economic practices and BRI, and it may consider new tools to counter Chinese influence and better support U.S. firms involved in economic activities abroad. As part of its oversight and approval of funding for U.S. participation in multilateral development banks and international financial institutions, Congress may also exercise oversight of institutions involved in BRI and implementation of the BUILD Act, as well as consider possible multilateral cooperation on debt transparency issues."], "subsections": []}]}, {"section_title": "U.S. Bilateral and Regional Trade Agreements and Negotiations71", "paragraphs": ["In addition to multilateral efforts through the World Trade Organization (WTO), the United States has worked to reduce and eliminate barriers to trade and create nondiscriminatory rules and principles to govern trade through bilateral and regional trade agreements. Over the past two decades, these agreements, referred to as free trade agreements (FTAs) in the U.S. context, have proliferated globally in part due to difficulty in reaching consensus on new agreements at the WTO. In total, the United States has concluded 14 FTAs with 20 countries since 1985, when the first bilateral FTA was concluded with Israel ( Figure 7 ).", "The Trump Administration has taken a number of actions with regard to FTAs, and the issue may be a focus of the 116 th Congress. In January 2017, the President withdrew the United States from the 12-member Trans-Pacific Partnership (TPP), which had been signed but not ratified during the Obama Administration. The Trump Administration has also made changes to existing U.S. FTAs. Most significantly, the Administration renegotiated the North American Free Trade Agreement (NAFTA), the largest U.S. FTA. The modified agreement\u2014renamed the United States-Mexico-Canada Agreement (USMCA)\u2014requires congressional approval and implementing legislation in order to enter into force, suggesting a possible vote in the 116 th Congress. The President also negotiated changes to the U.S.-South Korea (KORUS) FTA, but the relatively minor adjustments were made by proclamation at the end of 2018 and require no further action by Congress. Looking forward, the Administration has notified Congress under Trade Promotion Authority (TPA) of its intent to negotiate trade agreements with the European Union (EU), Japan, and the United Kingdom (UK), which could begin in early 2019. Congress is expected to weigh in on the scope and objectives for these new agreements throughout the negotiating process, especially through the TPA requirement for the Executive Branch to conduct ongoing consultations before, during, and after the completion of the negotiations."], "subsections": [{"section_title": "U.S.-Mexico-Canada Agreement (USMCA)75", "paragraphs": ["On November 30, 2018, President Trump and the leaders of Canada and Mexico signed the United States-Mexico-Canada Agreement (USMCA), a proposed trilateral free trade agreement (FTA) that, if approved by Congress and ratified by the governments of Canada and Mexico, would revise and modernize the North American Free Trade Agreement (NAFTA). Pursuant to trade promotion authority (TPA), the Administration notified Congress of its intention to sign the agreement on August 31, 2018, in part to allow for the signing of the agreement prior to Mexico's president-elect Andres Manuel Lopez Obrador taking office on December 1, 2018. Members may debate and potentially consider legislation to implement the agreement in the 116 th Congress. Issues for potential examination include whether the USMCA meets TPA's negotiating objectives, whether provisions on labor and environment would have stronger enforcement, and the economic impact of the agreement. Congress may also consider the economic and political ramifications if President Trump gives a six-month notification of an intention to withdraw from NAFTA.", "Many trade policy experts and economists give credit to FTAs such as NAFTA for expanding trade and economic linkages among countries, creating more efficient production processes, increasing the availability of lower-priced consumer goods, and improving living standards and working conditions. Other proponents contend that NAFTA has political dimensions that create positive ties within North America and improve democratic governance. At the same time, some policymakers, labor groups, and consumer advocacy groups argue that NAFTA has had a negative effect on the U.S. economy. They often refer to labor provisions as being weak and maintain that the proposed USMCA should have stronger, more enforceable labor provisions to address issues such as outsourcing, lower wages, and job dislocation.", "The proposed USMCA, comprised of 34 chapters and 12 side letters, retains most of NAFTA's chapters, including the elimination of tariff and nontariff trade barriers, while making notable changes to rules of origin (ROO) for motor vehicle and agriculture products and modernizing provisions on intellectual property rights (IPR), digital trade, and services trade. The agreement also allows some greater access to the Canadian dairy market to U.S. dairy producers and adds new obligations on currency misalignment, a new chapter on state-owned enterprises, and a new chapter on anti-corruption. Other provisions new to U.S. FTAs include a sunset clause provision, which would require a joint review and agreement on renewal issues after six years, revised provisions on government procurement and investment, and a provision that allows a party to withdraw from the agreement if another party enters into an FTA with a country it deems to be a nonmarket economy (e.g., China).", "The Trump Administration's proposals on ROO in motor vehicle products were one of the more controversial issues in the USMCA negotiations. Under NAFTA, the ROO requirement for autos, light trucks, engines, and transmissions is 62.5%; for all other vehicles and automotive parts it is 60%. USMCA would raise these requirements to 75% of a motor vehicle's content and to 70% of its steel and aluminum content. It would also add a wage requirement, for the first time in any FTA, stating that 40%-45% of auto content must be made by workers earning at least $16 per hour.", "Supporters of the proposed USMCA contend that the agreement would modernize NAFTA by including updated provisions in areas such as digital trade and financial services. Some analysts believe that the updated auto ROO requirements contained in the USMCA could raise compliance and production costs and lead to higher prices, which could possibly negatively affect U.S. vehicle sales. Overall, the full economic effects of the proposed USMCA would not be expected to be significant because nearly all U.S. trade with Canada and Mexico is now conducted duty and barrier free. Many economists and other observers believe that it is not expected to have a measurable effect on United States-Mexico trade and investment, jobs, wages, or overall economic growth, and that it would probably not have a measurable effect on the U.S. trade deficit with Mexico."], "subsections": []}, {"section_title": "U.S.-South Korea (KORUS) FTA Modifications77", "paragraphs": ["The U.S.-South Korea (KORUS) free trade agreement (FTA), the second-largest U.S. FTA by trade flows, has been a centerpiece of U.S.-South Korea economic relations since its entry into force in March 2012. Formal negotiations to modify the pact began in January 2018, following months of public criticism of the agreement by President Trump, including threats of potential U.S. withdrawal. In September, the two countries signed a modified agreement. The relevant U.S. tariff changes became effective January 1, 2019, through Presidential proclamation. A major underlying factor in the renegotiation was President Trump's concern over the growth in the bilateral trade deficit since KORUS took effect ( Figure 8 ). Most economists, however, argue that other factors, including a slowdown in South Korea's economic growth during the period, were the key drivers of the deficit. In 2017, the U.S. trade deficit with South Korea shrank by more than $7 billion, in part due to increased U.S. energy (crude oil and natural gas) and services exports.", "The KORUS FTA is the most recent and arguably most extensive U.S. FTA in effect. The changes made through the modifications were relatively minor and focused mostly on U.S. tariff adjustments and South Korean implementation issues. Specifically, the modifications, among other things, extend the 25% U.S. light truck tariff for twenty years to 2041, double the number of U.S. vehicle exports to South Korea that can be imported with U.S. safety standards (25,000 to 50,000 per manufacturer per year), and confirm South Korea's adherence to KORUS commitments on origin verifications, and its intent to amend a domestic pharmaceutical pricing policy to ensure it is consistent with KORUS commitments. Although South Korea's National Assembly ratified the modifications, the government has expressed concern over potential U.S. Section 232 tariffs on auto and auto parts. Unlike the United States-Mexico-Canada Agreement (USMCA), the KORUS FTA modifications do not explicitly exempt any South Korean autos from future Section 232 actions."], "subsections": []}, {"section_title": "U.S.-European Union Trade Negotiations80", "paragraphs": ["On October 16, 2018, the Trump Administration notified Congress, under Trade Promotion Authority (TPA), of its intent to enter trade agreement negotiations with the European Union (EU), its largest overall trade and investment partner. This followed a U.S.-EU announcement in July 2018 on plans to work to eliminate transatlantic tariffs, nontariff barriers, and subsidies on \"non-auto industrial goods,\" as well as to boost trade specifically in services, chemicals, pharmaceuticals, medical products, and U.S. soybeans. Although the European Commission does not have a negotiating mandate from EU member states, U.S.-EU preparatory talks have been ongoing. The proposed negotiations represent a potential de-escalation of the conflict between the two sides over recent new tariff measures (see Tariff Actions by the Trump Administration). Each side agreed not to impose further tariffs on each other while negotiations are active, and to examine current U.S. steel and aluminum tariffs.", "At the same time, the proposed negotiations are likely to be complex. No agreement exists on their scope. The EU, so far, has rejected the U.S. assertion on including all agriculture in the negotiations. It is an open question if the scope will broaden to include other areas designated under TPA. Depending on which issues are addressed, the challenges that impeded the previous U.S.-EU trade negotiations could resurface. EU FTAs negotiated in recent years emphasize expanded protections for geographical indications, replace investor-state dispute settlement (ISDS) with an investment court system, and lack explicit commitments to remove trade restrictions on data flows; these approaches raised concerns for some Members of Congress in the past. The United Kingdom's expected withdrawal from the EU also could affect the negotiations, as it would remove a traditionally leading voice on trade liberalization from the EU. How the United States approaches some trade issues might evolve in the wake of the proposed United States-Mexico-Canada Agreement (USMCA). Congress has a direct interest in monitoring and shaping trade discussions on these issues. Implementing legislation for any final U.S.-EU trade agreement would be subject to congressional consideration. As negotiations proceed, Congress may debate and hold hearings on such issues as the potential impact of greater transatlantic trade liberalization on the U.S. economy and particular sectors, and the extent to which any U.S.-EU commitments could help develop globally relevant rules on trade."], "subsections": []}, {"section_title": "U.S.-Japan Trade Negotiations83", "paragraphs": ["In September 2018, President Trump and Japanese Prime Minister Abe announced plans to launch formal bilateral trade negotiations. Under Trade Promotion Authority (TPA) procedures, on October 16, the Administration officially notified Congress of its intent to enter into the negotiations\u2014which could begin after 90 days\u2014and began consultations with Congress over the scope of such negotiations. As a top U.S. trade and investment partner, Japan is a longstanding U.S. priority for trade negotiations, in particular following U.S. withdrawal from the proposed Trans-Pacific Partnership (TPP) in 2017 ( Figure 10 ). Japan's recent free trade agreements (FTAs) with major markets in the Asia-Pacific and Europe could set new rules and lower tariffs for other countries trading with Japan, disadvantaging U.S. exporters and further incentivizing U.S. interest in new talks. Japan had preferred a regional approach to U.S. trade negotiations, and urged the United States to reconsider its TPP withdrawal. Some suggest Japan's willingness to enter bilateral talks relates to potential U.S. Section 232 tariffs on Japanese autos and auto parts\u2014Japan's top export to the United States and a major source of the U.S. trade deficit with Japan.", "The initial joint announcement stated that the negotiations will focus on goods and services\u2014specifically areas that \"can produce early achievements\"\u2014and then turn to investment and other issues. Negotiations of commitments on agriculture and autos may be among the most contentious, and both sides have expressed priorities for the new talks. Japan plans to limit new agriculture market access to its offers in existing trade agreements, including TPP, while the United States seeks market access outcomes that will increase U.S. production and employment in the auto industry. An agreement limited in coverage or presented to Congress in stages would represent a shift in approach from recent U.S. FTAs, which typically contain more comprehensive provisions. The Administration provided more certainty in the scope of the new U.S.-Japan talks in releasing its specific negotiating objectives in December 2018, as required by TPA 30 days before talks can commence. It suggests that a broad range of issues may be covered, including trade in goods, services, agriculture, investment, intellectual property, state-owned enterprises, and digital trade. The Office of the U.S. Trade Representative (USTR) specified that it may pursue negotiations with Japan in stages, in consultation with Congress, but that the aim is to \"address both tariff and nontariff barriers and to achieve fairer, more balanced trade in a manner consistent with the objectives that Congress has set out\" in TPA."], "subsections": []}, {"section_title": "U.S.-United Kingdom Trade Negotiations87", "paragraphs": ["In light of \"Brexit\"\u2014the expected withdrawal of the United Kingdom (UK) from the European Union (EU)\u2014some Members of Congress and the Trump Administration called for launching U.S.-UK free trade agreement (FTA) negotiations. The UK is a major U.S. trade and economic partner, and foreign direct investment (FDI) and affiliate activity are key aspects of bilateral ties ( Figure 11 ). In January 2017, President Trump and Prime Minister May discussed how the two sides could \"lay the groundwork\" for a future U.S.-UK FTA. The two sides subsequently established a bilateral working group that has met regularly to explore ways to strengthen trade and investment ties, including through a potential future FTA. On October 16, 2018, the Administration formally notified Congress, under Trade Promotion Authority (TPA), of its intent to enter into the negotiations. The 116 th Congress may hold ongoing consultations with the Trump Administration over the scope of the negotiations, and to engage in oversight as the negotiations progress.", "FTA prospects depend on the terms of the UK's withdrawal from the EU and the future UK-EU trade relationship, including whether the UK will have an independent trade policy. Tremendous uncertainty surrounds the UK-EU Brexit negotiations. Under a draft agreement and political declaration, a transition period could extend through at least 2020, during which time the UK may be able to negotiate, but not enter into, trade agreements with other countries. Aspirations for the future UK-EU relationship include negotiating a comprehensive UK-EU FTA, along with developing an independent UK trade policy. Yet, the \"Irish border\" issue presents challenges; a agreement reached by both sides in late 2018\u2014in which the UK would have remained in a customs union with the EU as a \"backstop\" if they cannot reach an alternative arrangement that avoids a \"hard border\" (customs check, physical border infrastructure) between Northern Ireland and Ireland\u2014was rejected by the UK Parliament in January 2019. How aligned the UK remains with the EU in such areas as regulations could affect dynamics in the U.S.-UK FTA negotiations. Some experts view a U.S. FTA with the UK as more feasible than one with the EU, given similarities in U.S. and UK trade policy approaches historically and the two countries' \"special relationship\"; others caution that domestic interests could complicate trade negotiations. Prospects of bilateral FTA negotiations have already generated concern among some stakeholders, particularly in the UK, about implications, such as for food safety regulations. Other key negotiating issues could include financial services, investment, and e-commerce, which are prominent in U.S.-UK trade."], "subsections": []}, {"section_title": "Proliferation of Non-U.S. Trade Agreements92", "paragraphs": ["Since 1990, the number of free trade and regional agreements in force globally has grown six-fold from fewer than 20 to nearly 300 ( Figure 12 ). All 164 members of the World Trade Organization (WTO) are now party to at least one FTA and, as of 2014, each member had on average 11 FTA partners. With only 14 U.S. FTAs in effect, the vast majority of these agreements do not involve the United States. The multilateral trading system, meanwhile, has not produced a broad set of new trade liberalization agreements (excluding more limited scope agreements, such as the Trade Facilitation Agreement) since the Uruguay Round, which also established the WTO in 1995. The proliferation of FTAs, particularly in the absence of a major new multilateral agreement, presents certain challenges for the United States. These agreements are inherently discriminatory given their limited membership (i.e., they provide preferential treatment to some countries and not others). U.S. exporters benefit from the preferential aspects of FTAs when they gain better access to FTA partner markets than their foreign competitors, but may be similarly harmed when third parties negotiate agreements that do not involve the United States.", "During the 116 th Congress, this issue may grow more prominent as agreements among a number of the United States' top trading partners are concluded and take effect. Major recent agreements include the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP-11), involving among others Canada, Mexico, Japan, and Vietnam, which took effect at the end of 2018, and the European Union-Japan FTA which is expected to come into effect in early 2019. Both the United States and Japan exported more than $10 billion of autos to the European Union (EU) in 2017; the EU-Japan FTA would eventually eliminate the EU's 10% auto tariff, giving Japanese exporters a major competitive advantage in the EU market. As other countries move forward with new FTA negotiations that cover a significant share of world trade, a number of issues arise that may be of interest to Congress, including how these agreements will affect U.S. economic and strategic interests, their impact on U.S. leadership in trade liberalization efforts and establishing new trade rules, and the appropriate U.S. response."], "subsections": []}]}, {"section_title": "The World Trade Organization (WTO)94", "paragraphs": ["The 164-member World Trade Organization (WTO), established in 1995, oversees and administers global trade rules and negotiations, and resolves trade disputes. The WTO succeeded the General Agreement on Tariffs and Trade (GATT) of 1947, which was established to advance a more open, rules-based trading system and to further economic stability, growth, and prosperity. The United States was a key architect of the GATT/WTO and the agreements resulting from multilateral trade negotiations. Successive rounds of trade liberalization, culminating in the Uruguay Round (1986-1994), supported the significant expansion of trade through reductions in trade barriers and the establishment of rules and principles, such as nondiscrimination and transparency. Since the establishment of the WTO, members have lowered their average most-favored nation (MFN) applied tariff on a unilateral basis from 25% in 1994 to less than 10% today ( Figure 13 ). The WTO's dispute settlement system has processed more than 500 disputes, with the aim of enforcing its rules, managing trade tensions, and ensuring a stable system.", "While the WTO is recognized as the foundation of the global trading system, including by Congress, it faces growing challenges. Many observers believe it must adopt reforms to remain a relevant and effective institution, both in terms of its negotiating and dispute settlement functions. Compared to past administrations, the Trump Administration has taken a more skeptical stance toward the WTO and the value of multilateral trade deals. President Trump has also raised the possibility of U.S. withdrawal from the WTO. As debates over the future of the WTO intensify, a number of issues arise that may be of interest to the 116 th Congress, including how current and future WTO agreements affect the U.S. economy and the value of U.S. membership and leadership in the WTO."], "subsections": [{"section_title": "Multilateral and Plurilateral Negotiations97", "paragraphs": ["While the landscape of global trade and investment has changed dramatically since the World Trade Organization (WTO)'s founding, WTO rules have not been modernized or expanded since 1995, with some exceptions. The most recent round of multilateral negotiations, the Doha Round, began in 2001, but stalled in 2015, with no clear path forward. The deadlock in negotiations is largely due to entrenched differences in priorities among leading emerging market economies, developing countries, and advanced economies, as well as rigidities in the multilateral negotiating process.", "The most recent 11 th WTO Ministerial Conference in 2017 did not result in major breakthroughs in negotiations. Work to build on current agreements continues, including through plurilateral agreements among subsets of countries. WTO members committed to achieve a multilateral deal on fisheries subsidies by the next ministerial in 2020; the United States has supported these efforts. In other areas, such as agriculture, talks remain stalled. Separate groups of members committed to work programs or plurilateral talks on e-commerce (which the United States joined), investment facilitation, and micro, and small and medium-sized enterprises. The United States viewed the 11 th Ministerial outcome positively\u2014that it signaled \"the impasse at the WTO was broken,\" paving the way for like-minded countries to pursue new work in other areas. Some WTO members, including the United States, point to plurilateral or sectoral settings as the way forward for the institution. The Trump Administration has not specified its position on plurilaterals pursued under the Obama Administration, such as on services and environmental goods. More recently, the European Union (EU), Canada, China, and other countries have put forward WTO reform proposals. These and other issues may be of ongoing interest to Congress."], "subsections": []}, {"section_title": "Dispute Settlement99", "paragraphs": ["The World Trade Organization (WTO) dispute settlement system is often called the \"crown jewel\" of the organization by its adherents because it provides a means to enforce commitments and resolve disputes peacefully without recourse to unilateral action. Under its procedures, countries first seek to settle their differences through consultation. If consultations prove unsuccessful, a dispute can be launched. The dispute is presented before a dispute settlement panel, and a decision is adopted by the Dispute Settlement Body. Cases can be appealed to the Appellate Body (AB). If a party is found to violate an agreement, it has time to bring its law into conformity with the decision. If the party refuses to bring itself into compliance, or if the compliance panel deems the steps taken to be insufficient, the aggrieved party can retaliate by withdrawing trade concessions (i.e., reimposing tariffs) to a level equivalent to the economic damage of the infringing measure. The U.S. Trade Representative (USTR) is authorized to launch cases on behalf of the United States, after input from other agencies and stakeholders in the private sector or nongovernmental organizations (NGOs). The United States is an active user of the dispute settlement system. Among WTO members, the United States has been a complainant in the most dispute cases since the system was established in 1995, initiating 123 disputes ( Figure 14 ). The two largest targets of complaints initiated by the United States are China and the EU, which, combined, account for more than one-third.", "Some stakeholders, including the Trump Administration and some Members of Congress, hold a more skeptical view of the WTO's dispute settlement system and have focused on reforming it. The Administration has withheld the appointment of AB panelists, imperiling the ability of the AB to hear cases past December 2019, when it would lack a quorum. USTR Robert Lighthizer has called for systemic changes in the body, but, thus far, the United States has not made specific proposals. U.S. concerns are known to include whether AB panelists have interpreted agreements too expansively and opine on issues not central to the case at hand, whether proceedings are completed in a timely manner, and whether AB jurists should be able to finish cases after their terms have expired. The European Union (EU) and others have proposed reforms to address U.S. concerns on a number of issues, but these were rejected by the United States. The U.S. Ambassador to the WTO claims that the proposals \"instead appear to endorse changing the rules to accommodate and authorize the very approaches that have given rise to Members' concerns.\""], "subsections": []}, {"section_title": "Challenges and Future Direction101", "paragraphs": ["The United States has historically served as a leader in the World Trade Organization (WTO) and many U.S. firms rely on WTO rules to open markets for imports and exports, eliminate discriminatory treatment, and defend and advance U.S. economic interests. There are costs and benefits to the United States and other countries to uphold the rules and enforce WTO commitments. As WTO members did not conclude the Doha Round, new questions emerged about the WTO's future direction. Many observers are concerned that recent U.S. tariff actions and counterretaliation by other countries, as well as escalating trade disputes are straining the system. Arguably, the WTO system is only as strong as the members' commitment to abide by its rules, and if those rules are not respected by one or more members engaging in tit-for-tat retaliation, the edifice of the system could be weakened. Another question is whether the WTO is equipped to handle effectively the challenges of emerging markets like China that many experts view as not full-fledged market economies.", "The Administration has expressed doubt over the value of the WTO and multilateral trade negotiations to the U.S. economy. While some U.S. frustrations with the WTO are not new and are shared by other trading partners, the Administration's overall approach has spurred new questions regarding future U.S. leadership and participation in the WTO.", "Many observers believe the WTO needs to adopt reforms to salvage its role as the foundation of the global trading system. In addition to ongoing WTO efforts to negotiate new trade liberalization and rules in areas like fisheries or e-commerce and digital trade, negotiations in other areas such as services, competition with state owned enterprises, and other issues could help increase the relevance of the WTO as a negotiating body. Partly in response to perceived protectionist actions by the Trump Administration, other countries have begun to assert themselves as leaders and advocates for the global trading system. Led by the European Union (EU) and Canada, some WTO members have begun to explore aspects of institutional reform that could promote the effectiveness of the WTO. The 116 th Congress may consider whether new U.S. negotiating objectives or oversight hearings are needed to address prospects for WTO reforms and rulemaking."], "subsections": []}]}, {"section_title": "Intellectual Property Rights102", "paragraphs": ["Intellectual property is a creation of the mind that may be embodied in physical and nonphysical (including digital) objects. Intellectual property rights (IPR) are legal, private, enforceable rights that governments grant to inventors and artists that generally provide time-limited monopolies to right holders to use, commercialize, and market their creations and prevent others from doing the same without their permission. Examples of IPR include patents, copyrights, trademarks, trade secrets, and geographical indicators.", "Debate over IPR includes a number of policy concerns, including the role of intellectual property in the U.S. economy as a source of innovation and comparative advantage; the impact of IPR infringement on U.S. commercial, health, safety, and security interests; and the balance between protecting IPR to stimulate innovation and advancing other public policy goals, such as promoting access to medicines and ensuring the free flow of information. As the global economy changes, protection and enforcement of IPR in the digital environment, including cyber-theft, is of increasing concern. At the same time, lawful limitations to IPR, such as exceptions in copyright law for media, research, and teaching (known as \"fair use\"), also may have benefits.", "IPR is addressed in trade agreements and U.S. law. Since 1988, Congress has included IPR as a principal U.S. trade negotiating objective in trade promotion authority (TPA). In the TPA passed in 2015, Congress directs the Executive Branch to seek IP commitments that exceed the minimum standards of the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). The United States also has other trade policy tools at its disposal under U.S. law to advance IPR goals. The \"Special 301\" provision of the Trade Act of 1974 allows the U.S. Trade Representative (USTR) to identify and report different levels of U.S. concern about foreign countries' IPR practices and policies. The U.S. International Trade Commission (ITC) conducts investigations into allegations that U.S. imports infringe U.S. intellectual property under the \"Section 337\" provision of the Tariff Act of 1930, as amended. Section 337 investigations, depending on their outcome, can lead to orders prohibiting counterfeit and pirated goods from entering U.S. borders.", "A central part of the IPR debate in the 116 th Congress may be the IPR provisions of the proposed United States-Mexico-Canada Trade Agreement (USMCA), which retain the North American Free Trade Agreement's (NAFTA's) core protections for IPR and specific enforcement requirements. At the same time, the USMCA also includes updated and new provisions, notably ten years of data protection for biologics; extension of copyright terms to 70 years; prohibitions on circumvention of technological protection measures; criminal and civil penalties for trade secret theft, including by state-owned enterprises and cyber-theft; and copyright safe-harbor provisions for Internet Service Provider (ISP) liability. In addition, Congress may continue to monitor closely negotiations with China to address the IPR issues raised by the Trump Administration's Section 301 investigation (see sections on Tariff Actions by the Trump Administration and U.S.-China Trade and Key Issues). These include forced technology transfer from U.S. companies, cyber-intrusion and cyber-theft of U.S. trade secrets, discriminatory licensing restrictions on U.S. firms, and efforts to acquire sensitive U.S. technology."], "subsections": []}, {"section_title": "Labor and Environment103", "paragraphs": ["Some Members of Congress and others have sought to improve labor and environmental conditions in other countries through the inclusion of more enforceable provisions in U.S. free trade agreements (FTAs). They have been concerned that lax or lower standards in other countries may make U.S. products less competitive (resulting in lost jobs and production to overseas firms), or cause damage to the environment as trade and investment expand. Other policymakers have tried to limit the scope and enforceability of such provisions, or believe that the competence to address these issues lies elsewhere, such as the International Labor Organization (ILO). They also view trade agreements as enabling greater economic growth that can provide more resources for addressing labor and environmental issues.", "Congress may consider how the proposed United States-Mexico-Canada Agreement (USMCA) addresses worker rights protection, an issue that is prominent in the negotiation of U.S. FTAs. Since 1988, Congress has included worker rights protection as a principal negotiating objective in trade promotion authority (TPA) legislation, and the United States has been in the forefront of using FTAs to promote core internationally-recognized worker rights consistent with the ILO Declaration on Fundamental Principles and Rights at Work (1998). The North American Free Trade Agreement (NAFTA) was the first U.S. FTA that addressed worker rights by committing the parties to enforce their own labor laws and to resolve disputes. The proposed USMCA has language similar to more recent FTAs, requiring countries to adopt, maintain, and not derogate from laws that incorporate ILO principles, including freedom of association and the effective recognition of the right to collective bargaining, elimination of all forms of compulsory or forced labor, effective abolition of child labor, and elimination of discrimination in respect of employment and occupation. It also has an additional commitment for Mexico to adopt and maintain labor laws and practices for protection of worker representation in collective bargaining.", "On the environment, the United States has negotiated environmental provisions in FTAs, which have evolved over time. NAFTA was the first agreement to include environmental provisions, committing the parties to enforce their own laws and cooperatively resolve disputes in a special venue, among other goals. The Trade Act of 2002 was the first grant of TPA containing environmental negotiating objectives, calling for countries not to fail to enforce their own environmental laws in a manner affecting trade and investment. Environmental obligations were expanded in later U.S. FTAs and were largely reflected in the 2015 grant of TPA, which obligated parties to adopt and maintain laws consistent with multilateral environmental agreements (MEAs) to which they are a party. Parties also were obligated not to derogate from their laws in order to attract trade and investment. These provisions were subject to the same dispute settlement provisions as other parts of the agreement with the withdrawal of trade concessions as the ultimate penalty for noncompliance. The World Trade Organization (WTO) does not have provisions related to environmental protection, although negotiations are underway to eliminate tariffs for environmental goods, which the United States and other believe will support broader environmental goals. In the proposed USMCA, Congress may examine the extent to which environmental provisions are consistent with TPA and the strength of enforcement mechanisms for environmental commitments."], "subsections": []}, {"section_title": "Select U.S. Import Policies104", "paragraphs": ["The United States often uses its import policy to accomplish broader foreign and domestic policy goals. For example, Congress created programs that provide duty-free access to the U.S. market to foster economic growth in less developed countries. In addition, to address unfair trade practices and thus provide relief to \"materially injured\" domestic producers and workers, Congress created an investigative process through which an additional duty is placed on imported merchandise to offset the amount at which the merchandise is found to be sold in the U.S. market at less than fair value, or to be subsidized by a foreign government or public entity. Congress also helped to provide a competitive edge to U.S. business by suspending or reducing tariffs on imports used by domestic manufacturers to make downstream goods. As the current Administration's actions shift the trade landscape, Congress may conduct oversight of these policies and their implementation, including Trump Administration decisions to self-initiate anti-dumping investigations, which until these actions, had not occurred since 1985."], "subsections": [{"section_title": "Trade Preferences105", "paragraphs": ["Since 1974, Congress has created six trade preference programs to assist developing countries. The following trade preference programs are still in effect:", "Generalized System of Preferences (GSP\u2014expires December 31, 2020), which applies to all designated developing countries; Caribbean Basin Economic Recovery Act (CBERA\u2014permanent), which includes under its umbrella, the Haitian Hemispheric Opportunity through Partnership Encouragement Acts (HOPE I and II\u2014expires September 30, 2025) and the Haitian Economic Lift Program (HELP\u2014expires September 30, 2025); Caribbean Basin Trade Partnership Act (CBTPA\u2014expires September 30, 2020); African Growth and Opportunity Act (AGOA\u2014expires September 30, 2025); and Nepal Preference Program (expires December 31, 2025).", "These programs give preferential, temporary, nonreciprocal, duty-free access to the U.S. market for select products from developing countries designated by the Administration. The aim of the policy is to encourage eligible countries to develop viable domestic industries. The 115 th Congress extended GSP, one of the largest and oldest of the preferential trade programs. However, since the CBTPA and GSP expire in September and December of 2020, respectively, the 116 th Congress could consider further extending these programs. Given the Administration's discretion over product and country eligibility, Congress may seek to consult closely with the Administration over its enforcement of statutory eligibility criteria to ensure adherence to congressional objectives or examine possible reforms to the programs.", "In line with its increased focus on reciprocity in U.S. trade relations, the Trump Administration has also expressed increased interest in potentially negotiating reciprocal trade agreements with current preference program beneficiaries. U.S. Trade Representative Robert Lighthizer, for example, emphasized the possibility of new reciprocal free trade agreement (FTA) negotiations with African countries in his remarks at the annual United States-Sub-Saharan Africa Trade and Economic Cooperation Forum (\"AGOA Forum\"). Congress has directed the Administration to seek such agreements in the past. In the 116 th Congress, it may consider influencing the scope and prioritization of any new negotiations through consultations with the Administration, and it would ultimately have to pass implementing legislation to bring new FTAs into force."], "subsections": []}, {"section_title": "Trade Remedies107", "paragraphs": ["Trade remedies are quasi-judicial administrative actions taken to mitigate injury (or the threat thereof) to domestic industries and workers caused by certain trade practices. Antidumping (AD) and countervailing duty (CVD) remedies provide relief from injurious imports that either are sold at less than fair value or subsidized by a foreign government. Safeguard (Section 201) actions provide temporary relief from import surges of fairly-traded goods. AD/CVD laws are administered primarily through the International Trade Administration (ITA) of the U.S. Department of Commerce, which addresses the existence and amount of dumping or subsidies, and the U.S. International Trade Commission (ITC), which determines injury to the U.S. industries petitioning for redress. In AD and CVD cases, the remedy is an AD or CVD \"order\" that places an additional duty assessed to offset the calculated amount of dumping or subsidy. World Trade Organization (WTO) rules permit the use of all three of these remedies.", "Since a series of legislative changes expanded access to AD/CVD remedies in the 1970s, they have increased in use. As of October 22, 2018, there are 462 AD/CVD orders affecting imports from 47 countries ( Figure 15 ). The majority of these orders (51.3%) apply to iron and steel imports. Critics of AD/CVD remedies argue that they are protectionist, opaque, overused by certain industries, based on poor economics, and give too much discretion to the ITA. Advocates argue that AD/CVD remedies are based on sound economics, provide a safety valve necessary for the continuation of trade liberalization, and ensure a fairer trading system. As part of its oversight function, Congress might consider how the current Administration's priorities might affect the U.S. trade remedy regime, including, as noted above, self-initiation of investigations as opposed to industry-led petitions. Additionally, while the quasi-judicial nature of AD/CVD investigations may indicate that Congress intended AD/CVD actions to be conducted apart from political influence, the involvement of constituents can lead to Members being asked to write letters or testify at hearings on either side of a trade remedy action to support a constituent's cause."], "subsections": []}, {"section_title": "Miscellaneous Tariff Bills (MTBs)112", "paragraphs": ["Many Members of Congress introduce bills to support importer requests for the temporary suspension of tariffs on chemicals, raw materials, or other nondomestically made components used as inputs in the manufacturing process. A rationale for these requests is that such tariff suspensions help domestic producers of manufactured goods reduce costs, making their products more competitive. Due to the large number of bills typically introduced, they are often packaged together in a broader miscellaneous tariff bill (MTB). The American Manufacturing Competitiveness Act of 2016 ( P.L. 114-159 ) revised the process by directing the U.S. International Trade Commission (ITC) to receive importer petitions for reduced or suspended duties and report its findings directly to the U.S. House of Representatives Committee on Ways and Means and the U.S. Senate Committee on Finance. Using the new procedure, Congress passed P.L. 115-239 , the Miscellaneous Tariff Bill Act of 2018. P.L. 114-159 also provides for the initiation of a new MTB process in 2019, which could be considered by Members in the 116 th Congress."], "subsections": []}]}, {"section_title": "International Investment113", "paragraphs": ["In 2017, the United States was the world's largest source of foreign direct investment (FDI) ($342 billion) and the largest recipient of FDI ($275 billion). The U.S. dual position as a leading source and destination for FDI means that the United States has important economic, political, and domestic interests at stake in the development of international policies regarding direct investment. Investment is a major driver of trade, and U.S. investment policy is a critical part of the U.S. trade policy debate\u2014intersecting with questions about economic impact, trade restrictions, national security, and regulatory sovereignty.", "Traditionally, the United States has supported a rules-based open and liberalized investment environment, including by negotiating rules, disciplines, and market access commitments in trade agreements and administering investment promotion programs, while also reviewing certain proposed inbound foreign investment transactions for U.S. national security implications. The U.S. investment policy landscape may be evolving in the wake of the Trump Administration's approach to investment issues in the proposed United States-Mexico-Canada Agreement (USMCA), as well as legislation passed in the 115 th Congress to update and expand the scope of the Committee on Foreign Investment in the United States (CFIUS)."], "subsections": [{"section_title": "Committee on Foreign Investment in the United States (CFIUS)115", "paragraphs": ["Competition over technological leadership and changing dynamics in the global economy with the rise of emerging economies, such as China and state-led firms, has led to renewed debates in Congress over the impact of foreign investment on U.S. economic and national security interests. In general, U.S. policies treat foreign investors no less favorably than U.S. firms, with some exceptions for national security. In 2007, Congress asserted its role in formulating the scope and direction of U.S. foreign investment policy when the Foreign Investment and National Security Act of 2007 ( P.L. 110-49 ) was enacted, formally establishing the Committee on Foreign Investment in the United States (CFIUS), which serves the President in overseeing the national security implications of foreign direct investment. This law broadened Congress's oversight role, and explicitly includes homeland security and critical infrastructure as issues that the President must consider when evaluating the national security implications. The law also grants the President the authority to suspend or block foreign investments that are judged to \"threaten to impair\" U.S. national security and requires review of investments by foreign investors owned or controlled by foreign governments. The law has been used five times to block a foreign acquisition of a U.S. firm, although a number of investments have been withdrawn before reviews were completed.", "In 2017, growing concerns over the impact of Chinese investment in U.S. high-technology firms resulted in the introduction of bipartisan legislation to \"strengthen and modernize\" CFIUS. On August 13, 2018, President Trump signed into law the Foreign Investment Risk Re view Modernization Act (FIRRMA) of 2018 (Title XVII, P.L. 115-232 ), which amends the current process for CFIUS (under P.L. 110-49 ) to review, on behalf of the President, the effect of investment transactions on U.S. national security. The legislation represents the most comprehensive reform of the CFIUS review process since it was created, and notably expands the scope of transactions that fall under CFIUS' jurisdiction. Certain provisions take effect immediately, while others, including some related to the expanded scope of CFIUS, are subject to further regulations (the U.S. Department of the Treasury issued temporary regulations in October 2018). Some experts have suggested that the broad changes under FIRRMA could potentially lead CFIUS to take a more assertive role that emphasizes both U.S. economic and national security interests, particularly relative to the development of emerging or leading-edge technology. While specific countries are not singled out in the legislation, FIRRMA allows CFIUS to potentially discriminate among foreign investors by country of origin during the review of certain investment transactions. Greater scrutiny could be directed on transactions tied to certain countries, pending specific criteria defined by regulations. The debate over FIRRMA and its forthcoming implementation raises a number of questions for the 116 th Congress, including the extent to which the amended review process will be successful in protecting U.S. national security interests and whether it balances the objectives of maintaining the traditionally open U.S. investment climate while preserving the competitiveness of U.S. firms."], "subsections": []}, {"section_title": "International Investment Agreements (IIAs)118", "paragraphs": ["The United States negotiates international investment agreements (IIAs), based on a \"model\" Bilateral Investment Treaty (BIT), to reduce restrictions on foreign investment, ensure nondiscriminatory treatment of investors and investment, and advance other U.S. interests. U.S. IIAs typically take two forms: (1) BITs, which require a two-thirds vote of approval in the Senate; or (2) BIT-like chapters in free trade agreements (FTAs), which require simple majority approval of implementing legislation by both houses of Congress. While U.S. IIAs are a small fraction of the more than 3,300 IIA agreements worldwide, they are often viewed as more comprehensive and of a higher standard than those of other countries ( Figure 16 ).", "A focal point for Congress on investment issues may be implementing legislation for the proposed United States-Mexico-Canada Agreement (USMCA). The investment provisions in USMCA differ significantly from those under the North American Free Trade Agreement (NAFTA) and previous FTAs and BITs entered into by the United States. Differences relate to investor-state dispute settlement (ISDS), the binding arbitration of private claims against host-country governments for violation of investment obligations under IIAs (e.g., obligations to provide nondiscriminatory treatment and a minimum standard of treatment to foreign investors). A longstanding cornerstone of U.S. trade agreements, ISDS has been favored widely in the U.S. business community as an important reciprocal form of protection for foreign investment that is modeled on U.S. law. At the same time, it is contested by some civil society groups based on concerns over its scope and fairness, among other issues. While ISDS is in the current NAFTA, the proposed USMCA would eliminate ISDS with respect to Canada and place specific limits with respect to Mexico. ISDS is available under the proposed USMCA for alleged violations by Mexico of national treatment, most-favored nation treatment, or direct expropriation. However, the proposed USMCA would limit other claims against Mexico, such as those of indirect expropriation, government contracts involving the oil, power generation, telecommunications, transportation, and infrastructure sectors. Claimants would also be required to first exhaust local remedies. Treatment of ISDS and other provisions common to IIAs could be a focus of proposed new U.S. trade agreement negotiations with Japan, the European Union (EU), and the United Kingdom (UK), especially considering the EU's push to include an Investment Court System in place of ISDS in its recent trade agreements and negotiations with other countries."], "subsections": []}]}, {"section_title": "U.S. Trade Finance and Promotion Agencies120", "paragraphs": ["The federal government seeks to expand U.S. exports and investment through finance and insurance programs and other forms of assistance for U.S. businesses in order to support U.S. jobs and economic growth. Trade finance and promotion activities also may support U.S. foreign policy goals. Many of these activities are driven by demand from U.S. commercial interests.", "A number of U.S. government agencies have distinct roles in carrying out these functions. Two agencies that may be focal points for legislative activity and oversight in the 116 th Congress are the Export-Import Bank (Ex-Im Bank) and Overseas Private Investment Corporation (OPIC), discussed below. Collectively, trade promotion agencies raise issues for Congress in terms of their economic justifications, use of federal resources, and intersection with U.S. policy goals and priorities. They also raise questions about the federal trade organizational structure."], "subsections": [{"section_title": "Export-Import Bank of the United States (Ex-Im Bank)121", "paragraphs": ["Ex-Im Bank, the official U.S. export credit agency (ECA), provides direct loans, loan guarantees, and export credit insurance to help finance U.S. exports of goods and services to contribute to U.S. employment. Driven by private sector demand, it aims to provide such support when alternative financing is not available or to counter government-backed export credit financing extended by other countries. Ex-Im charges interest, premiums, and other fees for its services, which it uses to fund its activities, and is subject to the annual appropriations process. Proponents of the agency contend that it supports U.S. exports and jobs, contributes financially to the U.S. Treasury, and manages its risks. Critics argue that it crowds out private sector activity, provides \"corporate welfare,\" and poses a risk to taxpayers.", "Ex-Im Bank operates under a renewable general statutory charter, which Congress extended through September 30, 2019 ( P.L. 114-94 ). Despite its reauthorization, Ex-Im Bank is not fully operational. Since July 2015, the Board of Directors has lacked a quorum due to unfilled positions, constraining it from approving medium- and long-term export financing above $10 million. Ex-Im Bank reported a backlog of almost $40 billion in pending transactions at the end of FY2018. In recent years, Ex-Im Bank authorizations for finance and insurance transactions have declined ( Figure 17 ). In the 115 th Congress, four presidential nominees to the Board were approved by the Senate Banking Committee and were pending before the Senate. In the 116 th Congress, potential issues could be consideration of nominations to the Board, as well as whether to reauthorize Ex-Im Bank, and if so, for how long and under what terms.", "Ex-Im Bank abides by Organization for Economic Cooperation and Development (OECD) guidelines for ECA activity with repayment terms of two years or more, which aim to ensure that price and quality\u2014not financing terms\u2014guide decisions on purchasing exports. Foreign ECAs, of both OECD and non-OECD members, increasingly are providing financing outside of the scope of the OECD Arrangement. ECA financing by China, a non-OECD member, is of particular concern. Within and outside of the reauthorization debate, Congress may consider the effectiveness of current international ECA rules and ongoing international negotiations to enhance existing ECA rules or develop new arrangements, as well as other opportunities to address concerns about \"unfair\" competition from foreign ECAs."], "subsections": []}, {"section_title": "Overseas Private Investment Corporation (OPIC) and the BUILD Act123", "paragraphs": ["Spun out of the U.S. Agency for International Development (USAID) in 1971, OPIC has been the primary U.S. development finance institution (DFI). It aims to promote economic growth in developing and emerging economies by providing project and investment fund financing and insuring against the political risks of investing abroad for U.S.-linked private investors. It operates based on private sector demand. In FY2018, OPIC made $3.3 billion in new commitments for investment projects in infrastructure and other sectors in sub-Saharan Africa, Latin America, the Indo-Pacific, and other regions. OPIC charges fees for its services, which it uses to fund its activities. It is also subject to the appropriations process. In recent years, Congress has renewed OPIC's authority through appropriations legislation. ", "The 116 th Congress will have responsibility for overseeing the Administration's consolidation and expansion of OPIC under the Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act), which establishes a new U.S. International Development Finance Corporation (IDFC) as a successor to OPIC (see textbox). The BUILD Act is part of the U.S. policy response to China's growing economic influence in developing countries, exemplified by China's Belt and Road Initiative. Based on the BUILD Act timeline, the IDFC could become operational as early as summer 2019. During a transition period, OPIC is to continue to perform its existing functions.", "As the IDFC is operationalized, the 116 th Congress may examine implementation issues and whether the current statutory framework allows the IDFC to balance both its mandates to support U.S. businesses in competing for overseas investment opportunities and to support development, as well as whether it enables the IDFC to respond effectively to strategic concerns, especially vis-\u00e0-vis China. Congress also may consider whether to press the Administration to pursue international rules on development finance comparable to export credit financing. More broadly, the IDFC's establishment could renew legislative debate over the economic and policy benefits and costs of U.S. government activity to support private investment."], "subsections": []}]}, {"section_title": "Export Controls and Sanctions127", "paragraphs": ["National security considerations shape U.S. trade and investment policies. In addition to the national security implications of foreign investment discussed above in the context of the Committee on Foreign Investment in the United States (CFIUS), key programs include controls on exports for foreign policy and other objectives and the use of economic sanctions to achieve specific foreign policy goals. The 116 th Congress may consider the balance of U.S. foreign policy and national security objectives against U.S. commercial and economic interests."], "subsections": [{"section_title": "Dual-Use Products and Export Controls128", "paragraphs": ["Congress has authorized the President to control the export of various items for national security, foreign policy, and economic reasons. Separate programs and statutes for controlling different types of exports exist for nuclear materials and technology, defense articles and services, and dual-use goods and technology. Under each program, licenses of various types are required before export. The U.S. Departments of Commerce, State, Energy, and Defense administer these programs.", "In 2018, in conjunction with reform of the Committee on Foreign Investment in the United States (CFIUS), Congress passed the Export Control Reform Act (ECRA) (Subtitle B, P.L. 115-232 ), which authorized the dual-use export control system administered by the Department of Commerce and largely codifies current practices. The Obama Administration undertook a comprehensive reform of the U.S. export control system, which adopted a unified control list, created a single integrated information technology system, and established a single enforcement coordination agency. Responsibility for licensing exports is divided among the Departments of Commerce, State, and the Treasury, based on the nature of the product (munitions or dual-use goods) and basis for control. The Department of Defense has an important advisory role in examining license applications. Enforcement is shared among these agencies, as well as the U.S. Departments of Justice and Homeland Security.", "Exports controls lie between the nexus of trade and security. Congress is increasingly concerned with illicit attempts to obtain U.S. technology by foreign powers (particularly China), in both the dual-use and high technology spheres (such as artificial intelligence, robotics, etc.). In addition to enhanced investment scrutiny through CFIUS, the new export control act provides for the creation of an interagency process to identify foundational and emerging technologies and assess their national security implications, and recommend levels of control. Congress may be interested in the implementation of this process and its role in maintaining U.S. superiority in critical technologies."], "subsections": []}, {"section_title": "Economic Sanctions129", "paragraphs": ["Economic sanctions may be defined as coercive economic measures taken against a target to bring about a change in policies. They can include such measures as trade embargoes; restrictions on particular exports or imports; denial of foreign assistance, loans, and investments; blocking of foreign assets under U.S. jurisdiction; and prohibition on economic transactions that involve U.S. citizens or businesses. Secondary sanctions, in addition, can impede trade, transactions, and access to U.S.-located assets of foreign persons and entities in third countries that engage with a primary target. The United States maintains an array of economic sanctions against foreign governments, entities, and individuals. Specifically, the United States", "maintains sanctions regimes against foreign governments it has identified as supporters of acts of international terrorism (Iran, North Korea, Sudan, Syria); nuclear arms proliferators (Iran, North Korea, Syria); egregious violators of international human rights norms, democratic governance, or corruption standards (Belarus, Burundi, Central African Republic, Cuba, Democratic Republic of the Congo, Iran, Libya, Nicaragua, North Korea, Russia, Somalia, South Sudan, Sudan, Syria, Venezuela, Western Balkans, Yemen, Zimbabwe, and the Hizbollah organization); and those threatening regional stability (Iran, North Korea, Russia, Syria); imposes economic restrictions on individuals and entities found to be active in egregious human rights abuses and corruption within the state system, international terrorism, narcotics trafficking, weapons proliferation, illicit cyber activities, conflict diamond trade, and transnational crime; and targets individuals and entities with economic and diplomatic restrictions to meet the requirements of the United Nations Security Council (Central African Republic, Democratic Republic of Congo, Eritrea, Guinea-Bissau, Iran, Iraq, Lebanon, Libya, North Korea, Somalia, South Sudan, Sudan, Yemen, and individuals affiliated with the Islamic State (Da'esh), al-Qaida, or the Taliban).", "The 116 th Congress may continue the deliberations of its predecessor to influence decision-making by President Trump's approach to foreign policy and national security. Sanctions are central to the debates over how to deter Iran's missile proliferation activities, normalize relations with North Korea while ensuring an end to its nuclear and missile programs, convince Russia to leave Ukraine, or end the conflict in Syria. The 115 th Congress, in its waning days, showed some interest in reviewing the President's long-standing national emergency authorities to use sanctions; given the frequent use of the authorities, the 116 th Congress may take a close look with an eye toward increasing its role in national security and foreign policy decisions."], "subsections": []}]}, {"section_title": "International Financial Institutions (IFIs) and Markets131", "paragraphs": ["Since World War II, governments have created and used informal forums, as well as more formal international organizations, to discuss and coordinate economic policies. More informal forums include the Group of 7 (G-7) and the Group of 20 (G-20), and more formal international organizations include the International Monetary Fund (IMF), the Organization for Economic Co-operation and Development (OECD), the World Bank, and the World Trade Organization (WTO), among others. The United States has traditionally been a leader in these bodies, but the U.S. role is changing under President Trump. Congress plays a key role in shaping U.S. policy at international organizations and forums, including through authorizations and appropriations of U.S. funding, hearings, legislation that directs the Administration's policy and votes at the institutions, and Senate confirmation of high-level political appointees.", "More broadly, given longstanding economic and foreign policy interests in a stable, thriving global economy, the 116 th Congress may continue monitoring major economic developments overseas and their potential impact on U.S. economic and foreign policy interests. Key issues may include how other countries' exchange rate policies are impacting the U.S. economy, the role of the U.S. dollar in the global economy, trade developments, and ongoing and potential economic crises, particularly in indebted emerging markets and developing countries such as Argentina and Pakistan."], "subsections": [{"section_title": "International Economic Cooperation (G-7 and G-20)132", "paragraphs": ["Between the 1970s and the 2000s, international economic discussions at the top leadership level took place among a small group of developed industrialized economies: the Group of 7 (G-7). The G-7 includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. In response to the global financial crisis, leaders decided that a broader group of developed and emerging-market economies, the Group of 20 (G-20), would become the premier forum for international economic cooperation and coordination ( Figure 18 ). The G-20 includes the G-7 members, as well as Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, and the European Union (EU). Although the G-20 is considered the \"premier\" forum, the G-7 continues to meet in parallel. G-7 and G-20 leader meetings (\"summits\") are held annually; meetings among lower and senior level officials occur throughout the year.", "Traditionally, the United States has played a strong leadership role at the G-7 and the G-20. For example, the United States was the leader in convening the G-20 to respond to the global financial crisis of 2008-2009. Under President Trump, however, the U.S. role in these forums has been shifting. The summits have become more contentious, with the United States increasingly isolated on key issues, particularly trade and climate change. At the G-7 summit in Canada in 2018, President Trump unprecedentedly withdrew his initial support for the G-7 joint leaders' statement (communiqu\u00e9). Agreement was reached on a communiqu\u00e9 at the G-20 summit in Argentina in 2018, but many analysts question the significance of the communiqu\u00e9's substance. In 2019, France and Japan are scheduled to host the G-7 and G-20 summits, respectively. Although U.S. participation in the G-7 and the G-20 is primarily driven by the Administration, Congress could exercise oversight through hearings and reporting requirements. Additionally, legislative action may be required to implement some commitments made by the Administration in the G-7 and G-20 process."], "subsections": []}, {"section_title": "International Monetary Fund (IMF)133", "paragraphs": ["The International Monetary Fund (IMF) is an international organization focused on promoting international macroeconomic stability. Created in 1945, it has grown in membership over the past six decades to 189 countries. Although the IMF's functions have changed as the global economy has evolved, today it is focused on surveillance of member states and the global economy, lending to member states facing economic crises, and technical assistance to strengthen members' capacity to design and implement effective policies.", "The FY2016 Consolidated Appropriations Act ( P.L. 114-47 ) authorized U.S. participation in an IMF reform package, which doubled the size of IMF core resources (\"quota\") and gave emerging-markets a stronger voice in the governance of the institution. The legislation also sunsets U.S. contributions to a supplemental fund at the IMF, the New Arrangements to Borrow (NAB), in 2022, the first time the United States reduced its financial commitment to the institution since it was created. Members are evaluating IMF rules on providing large loans, which were used controversially during the 2010-2012 Eurozone debt crisis. Legislation introduced in the 115 th Congress, The IMF Reform and Integrity Ac t ( H.R. 1573 ), would have limited the ability of the U.S. Executive Director to the IMF to vote for large IMF programs, especially, where the Fund is co-financing with larger creditors. In 2019, the IMF is to continue work on its review of IMF quota resources. IMF Managing Director Christine Lagarde has been laying the groundwork to seek an increase in country contributions to the Fund. According to David Lipton, the IMF's first deputy managing director, \"As our world becomes increasingly multipolar, but the scope for national policies to respond to crises becomes more constrained, the IMF will be the indispensable institution.\" The Trump Administration, however, does not appear to support a boost in Fund resources. At a December hearing before the House Financial Services Committee, Treasury Undersecretary David Malpass told Members that \"[the Administration is] opposed to changes in quotas given that the IMF has ample resources to achieve its mission.\" Undersecretary Malpass added that the Administration believes that recent reforms have improved the stability of the global monetary system and that countries have alternative resources to the Fund on which they could draw in the event of a crisis."], "subsections": []}, {"section_title": "Multilateral Development Banks (MDBs)136", "paragraphs": ["Multilateral development banks (MDBs) provide financing funded from private capital markets to developing countries in order to promote economic and social development. The United States is a member, and major donor, to five major multilateral development banks (MDBs): the World Bank, the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, and the Inter-American Development Bank. These institutions were established after World War II to provide financing for economic development at a time when private sector financing, especially for war-torn, post-conflict, or developing countries, was not available. While the MDBs have thrived and grown over the past decades, the international economy has changed dramatically. Many developing and low-income countries are able to borrow on the international capital markets to finance their development projects. At the same time, emerging-market countries are creating their own MDBs, including the China-led Asian Infrastructure Investment Bank.", "Congress authorizes and appropriates U.S. funding for the five major MDBs, which may shift under the Trump Administration. The Trump Administration has laid out a comprehensive reform agenda for the MDBs that includes, but is not limited to, creating lending limits to promote more robust financial discipline at the MDBs and graduate borrowers, especially China, and shift lending from higher income developing countries to lower income countries. The Administration is also seeking to better coordinate country programs and best-practices across. Meanwhile, in 2018 the United States and other World Bank members agreed to a $60.1 billion capital increase for the World Bank's main lending facility, the International Bank for Reconstruction and Development (IBRD), which would raise the IBRD's capital from $268.9 billion to $329 billion. World Bank members also endorsed a $5.5 billion capital increase for the International Finance Corporation (IFC), the World Bank's private-sector lending arm, which would more than triple the IFC's capital base from $2.57 billion to $8.2 billion. Congress would need to fully authorize and appropriate funds for any U.S. participation in the proposed capital increase."], "subsections": []}, {"section_title": "Exchange Rates and Currency Manipulation141", "paragraphs": ["Exchange rates, the price of currencies relative to each other, are among the most important prices in the global economy. They affect the price of every country's imports and exports, as well as the value of every overseas investment. Some U.S. policymakers have expressed concerns that other governments purposefully undervalue their currency to gain an unfair advantage for their exports, or \"manipulate\" their currencies, hurting U.S. companies and jobs. Countries have committed to refraining from currency manipulation through the International Monetary Fund (IMF), the G-7, and the G-20. Under U.S. law, the U.S. Department of the Treasury is tasked with reporting on and responding to currency manipulation. However, the IMF, the G-7, and the G-20 have never publicly labeled a particular country as a currency manipulator, and Treasury has not done so in more than two decades. Some Members of Congress have called for stronger actions to combat currency manipulation over the past decade. It was also a key issue for then candidate Donald Trump during the 2016 presidential campaign. Other policymakers have preferred a more cautious approach, arguing that U.S. consumers benefit when other countries have weak currencies and actions against currency manipulation risk retaliation that could hurt U.S. interests.", "The 116 th Congress may grapple with debates about currency manipulation in at least two contexts. First, as Congress considers implementing legislation for the proposed United States-Mexico-Canada Agreement (USMCA), it may examine the treatment of exchange rates in the agreement. The USMCA would include, for the first time in a trade agreement, enforceable provisions to combat currency manipulation among the signatories. U.S. concerns about currency manipulation have not focused on Canada and Mexico per se, but addressing currency manipulation in the USMCA may serve as precedent for future trade agreements. Second, China's currency policies have been a particular source of concern for U.S. policymakers. After appreciating in 2017, China's currency depreciated by almost 10% between April and November 2018 ( Figure 19 ). Some analysts believe that the Chinese government is using currency policies to offset the effects of tariffs imposed on U.S. imports from China under Section 301. Currency policy could become a salient issue for Members in the trade disputes between the United States and China."], "subsections": []}, {"section_title": "Role of the U.S. Dollar142", "paragraphs": ["For at least 70 years, the U.S. dollar has been the world's dominant currency. Central banks around the world hold a large portion of their reserves in U.S. dollars ( Figure 20 ), and private companies use U.S. dollars for international transactions. Dollars make up nearly two-thirds of central bank reserves, countries' dollar imports are on average worth five times what they buy from the United States, and more than half of all global cross-border debt is denominated in U.S. dollars. There are considerable benefits to having a reserve currency, including lower borrowing costs for the U.S. government. This cost advantage occurs because there is generally a willingness of foreign central banks to pay a liquidity premium to hold dollar assets.", "Questions have been raised about whether the U.S. dollar could lose its status as a reserve currency. Some countries are pursuing or considering policies that challenge the dollar's role. For example, oil market transactions have traditionally been denominated in dollars, but China has begun trading oil futures in renminbi. Some countries have also discussed the creation of alternative payments systems, not centered on the dollar, as a way to circumvent U.S. financial sanctions. Broader concerns about the direction of U.S. economic policy, including rising national debt, as well as the predictability of U.S. policies, including trade conflicts with other countries, are also driving debates about the dollar's supremacy. However, most economists agree that in the short run there are no good alternatives. The Eurozone is still recovering from its crisis, and China does not have a stable banking system or open capital account. However, the 116 th Congress may consider the benefits it derives from dollar as a reserve currency and the long-term impact of various economic policies, such as fiscal policies and financial sanctions, on the role of the dollar in the global economy."], "subsections": []}, {"section_title": "Ongoing and Potential Economic Crises145", "paragraphs": ["Analysts are growing increasingly concerned about debt sustainability in many emerging markets and developing countries. Many emerging markets experienced an influx of capital following the global financial crisis of 2008-2009, as investors sought more profitable investment opportunities than in advanced economies, where interest rates were at historical lows. The influx of capital into emerging markets may have created investment bubbles, which could be vulnerable to changes in the availability or cost of financing, for example if and when the U.S. Federal Reserve raises interest rates. These dynamics started playing out in Argentina and Turkey in 2018, and there are concerns that other emerging markets similarly reliant on external financing may face similar pressures. Additionally, China has increasingly financed projects in developing countries, some of which, such as Pakistan, are starting to experience or exacerbating existing fiscal problems. Some analysts are concerned about whether such countries will be able to meet their financial obligations to China, and the implications if they are unable to do so.", "The 116 th Congress may monitor economic conditions in emerging markets and developing countries in terms of U.S. interests and implications for the role of the IMF. In terms of U.S. economic interests, U.S. economic exposure through trade, investment, and financial channels to emerging markets that faced the most significant pressures in 2018\u2014Argentina and Turkey\u2014is relatively limited. A broader crisis across emerging and developing markets could have more significant economic ramifications. Economic crises in emerging and developing countries could also have implications for U.S. foreign policy interests, depending on the specific countries in question. In terms of the IMF, Congress may monitor the IMF's role in responding to crises. With the United States as the IMF's largest shareholder, Congress may monitor in particular the size of and reforms attached to any IMF programs and the adequacy of IMF resources. Congress may also focus on the role of Chinese financing in countries approaching the IMF for assistance, including transparency on the size and terms of Chinese financing and burden sharing by China in any financial assistance package."], "subsections": []}]}]}, {"section_title": "Looking Forward", "paragraphs": ["Members of Congress exert significant influence over U.S. economic and trade policy and its implementation through their legislative, appropriations, and oversight roles. Given current debates, fundamental questions about the future direction of trade and international economic issues may be key areas of interest for the 116 th Congress. In engaging on these issues, Congress may", "evaluate the impact of Section 301, 232, and 201 tariffs on U.S. workers and firms, and consider legislation that alters the authority granted by Congress to the President to impose unilateral tariffs; consider implementing legislation for the USMCA, and conduct oversight of new bilateral trade negotiations with the EU, Japan, and UK; conduct oversight of the Trump Administration's policies at the WTO, including reform efforts; conduct oversight and take possible legislative action concerning a range of other trade issues, including U.S. trade relations with China and other major economies, as well as U.S. export and import policies and programs; consider legislation to reauthorize the U.S. Export-Import Bank, which expires on September 30, 2019; evaluate the implementation of major legislation passed during the 115 th Congress, including CFIUS and export control reforms, as well as the creation of a new U.S. International Development Finance Corporation as a successor to OPIC; examine U.S. leadership in discussions over international economic policy coordination at the G-7 and the G-20; consider legislation to adjust U.S. funding to the World Bank; and monitor major developments in financial markets, including the impact of other countries' exchange rate polices on the U.S. economy, high levels of debt in emerging markets, and the role of the U.S. dollar.", "U.S. trade and economic policy affects the interest of all Members of Congress and their constituents. Congressional actions on these issues can impact the health of the U.S. economy, the success of U.S. businesses and their workers, the standard of living of Americans, and U.S. geopolitical interests. Some of these issues may be highly contested, as Members of Congress and affected stakeholders have differing views on the benefits, costs, and role of U.S. trade policy. The dynamic nature of the global economy\u2014including the increasingly interconnected nature of the global market, the growing influence of emerging markets, and the growing role of digital trade, among other factors\u2014as well as the Trump Administration's reassessment of U.S. policies provide the backdrop for a potential robust and complex debate in the 116 th Congress over a range of trade and finance issues."], "subsections": []}]}}
{"id": "R45532", "title": "Digital Services Taxes (DSTs): Policy and Economic Analysis", "released_date": "2019-02-25T00:00:00", "summary": ["Several countries, primarily in Europe, and the European Commission have proposed or adopted taxes on revenue earned by multinational corporations (MNCs) in certain \"digital economy\" sectors from activities linked to the user-based activity of their residents. These proposals have generally been labeled as \"digital services taxes\" (DSTs). For example, beginning in 2019, Spain is imposing a DST of 3% on online advertising, online marketplaces, and data transfer service (i.e., revenue from sales of user activities) within Spain. Only firms with \u20ac750 million in worldwide revenue and \u20ac3 million in revenues with users in Spain are to be subject to the tax. In 2020, the UK plans to implement a 3% DST that would apply only to businesses whose revenues exceed \u00a325 million per year and groups that generate global revenues from search engines, social media platforms, and online marketplaces in excess of \u00a3500 million annually. The UK labels its DST as an \"interim\" solution until international tax rules are modified to allow countries to tax the profits of foreign MNCs if they have a substantial enough \"digital presence\" based on local users. The member states of the European Commission are also actively considering such a rule. These policies are being considered and enacted against a backdrop of ongoing, multilateral negotiations among members and nonmembers of the Organization for Economic Cooperation and Development (OECD). These negotiations, prompted by discussions of the digital economy, could result in significant changes for the international tax system.", "Proponents of DSTs argue that digital firms are \"undertaxed.\" This sentiment is driven in part by some high-profile tech companies that reduced the taxes they paid by assigning ownership of their income-producing intangible assets (e.g., patents, marketing, and trade secrets) to affiliate corporations in low-tax jurisdictions. Proponents of DSTs also argue that the countries imposing tax should be entitled to a share of profits earned by digital MNCs because of the \"value\" to these business models made by participation of their residents through their content, reviews, purchases, and other contributions. Critics of DSTs argue that the taxes target income or profits that would not otherwise be subject to taxation under generally accepted income tax principles. U.S. critics, in particular, see DSTs as an attempt to target U.S. tech companies, especially as minimum thresholds are high enough that only the largest digital MNCs (such as Google, Facebook, and Amazon) will be subject to these specific taxes.", "DSTs are structured as a selective tax on revenue (akin to an excise tax) and not as a tax on corporate profits. A tax on corporate profits taxes the return to investment in the corporate sector. Corporate profit is equal to total revenue minus total cost. In contrast, DSTs are \"turnover taxes\" that apply to the revenue generated from taxable activities regardless of costs incurred by a firm. Additionally, international tax rules do not allow countries to tax an MNC's cross-border income solely because their residents purchase goods or services provided by that firm. Rather, ownership of assets justifies a country to be allocated a share of that MNC's profits to tax. Under these rules and their underlying principles, the fact that a country's residents purchase digital services from an MNC is not a justification to tax the MNC's profits.", "DSTs are likely to have the economic effect of an excise tax on intermediate services. The economic incidence of a DST is likely to be borne by purchasers of taxable services (e.g., companies paying digital economy firms for advertising, marketplace listings, or user data) and possibly consumers downstream from those transactions. As a result, economic theory and the general body of empirical research on excise taxes predict that DSTs are likely to increase prices in affected markets, decrease quantity supplied, and reduce investment in these sectors. Compared to a corporate profits tax\u2014which, on balance, tends to be borne by higher-income shareholders\u2014DSTs are expected to be more regressive forms of raising revenue, as they affect a broad range of consumer goods and services.", "Certain design features of DSTs could also create inequitable treatment between firms and increase administrative complexity. For example, minimum revenue thresholds could be set such that primarily large, foreign (and primarily U.S.) corporations are subject to tax. Requirements to identify the location of users could also introduce significant costs on businesses.", "This report traces the emergence of DSTs from multilateral tax negotiations in recent years, addresses various purported policy justifications of DSTs, provides an economic analysis of their effects, and raises several issues for Congress."], "reports": {"section_title": "", "paragraphs": ["T he term digital economy has fluid meaning in different policy contexts. Broadly speaking, this term can refer to any number of everyday economic activities that are connected over computers, mobile phones, or other internet-connected devices. In the realm of international tax policy, though, certain types of activities and markets have been singled out for selective taxation by some jurisdictions\u2014primarily in Europe. Most of these digital economy business models operate in \"two-sided markets\" in which they provide services to individual users (sometimes at zero charge) and sell other services to businesses (e.g., advertising to users). Proponents of these \"digital services taxes\" (DSTs) justify them on a number of grounds, including the goal of having multinational corporations (MNCs) pay their \"fair share\" of taxes, taxing profits purportedly derived from consumers in their jurisdictions, or adapting traditional rules and systems of international taxation to account for new forms of \"disruptive\" business models that can be conducted virtually over the internet.", "U.S. opposition to these unilateral taxes has been voiced by several government officials. Robert Stack, while Treasury Deputy Assistant Secretary for International Tax Affairs under President Obama, said that such efforts are primarily political efforts to target U.S. corporations. More recently, Treasury Secretary Steven Mnuchin has issued multiple statements in opposition to unilateral taxation of digital economy businesses. Some Members of the tax-writing committees in Congress have also criticized these efforts.", "This report analyzes DST proposals from an economic and policy perspective as they have been introduced, discussed, and adapted in European countries."], "subsections": [{"section_title": "Tax Issues Highlighted by the Digital Economy", "paragraphs": ["Some commentators and policymakers argue that MNCs in the digital economy are \"undertaxed\" or are not paying a \"fair share\" of taxes in their jurisdictions. Two issues that often underlie these sentiments are (1) the ability of digital economy MNCs to provide services without establishing a physical presence (or \"permanent establishment\") in the country in which their customers reside and (2) the ability of digital economy MNCs to shift their profits away from countries where they conduct real economy activity (e.g., sales, development, production) toward low-tax jurisdictions where the MNCs are conducting little to no real economic activity. Even if a country is able to establish the right to tax an MNC's profits in the digital economy (via permanent establishment rules), the profits subject to tax in that jurisdiction could be reduced via transfer pricing rules. "], "subsections": [{"section_title": "Permanent Establishments", "paragraphs": ["A commonly held principle across international tax law is that there must be a substantial enough connection between a country and a corporation's activities to establish \"nexus\" in that country, enabling the country the first right to tax the corporation's income or profits earned from sales in that country. Specific criteria for what constitutes a permanent establishment are written into bilateral tax treaties, but they often require a fixed, physical presence within the country. Once a right to tax has been created, a country can tax a portion of the MNC's cross-border profits that can be sourced to its jurisdiction.", "MNCs can earn income from local residents without creating a permanent establishment in that jurisdiction. Rules creating a permanent establishment based on physical nexus might not be triggered by digital activities over the internet because \"the internet\" is not physically located in any one country. The internet is a global network of computers. For example, Google can sell advertising space on its search results to a French business without creating a permanent establishment in France. The physical servers processing the payment and posting the advertisements do not have to be located in France. In response, different countries and intergovernmental organizations have tried or proposed modifying definitions and interpretations of permanent establishment rules to include \"digital presence\" criteria. These criteria include users, \"clicks,\" or other digital activities with origins in the local jurisdiction. The \" Select International Efforts to Tax the Digital Economy \" section of this report discusses these proposals in more detail."], "subsections": []}, {"section_title": "Transfer Pricing", "paragraphs": ["Transfer pricing rules dictate how profits from transactions between related entities within the MNC should be divided among multiple countries for tax purposes. From the U.S. perspective, transfer pricing rules are intended to prevent taxpayers from shifting income properly attributable to the United States to a related foreign company (and vice versa) through pricing that does not reflect an arm's-length result. In practice, though, the arm's-length standard can be difficult to administer on intra-company transactions within an MNC in which there is no market where independent parties bargain over price. Sophisticated transfer pricing strategies can result in an MNC's global profits being subject to a low effective tax rate across multiple tax jurisdictions. ", "MNCs in the digital economy, in particular, can use transfer pricing strategies to reduce the effective tax rate imposed on their cross-border income, because their primary sources of income are often derived from intangible assets (e.g., patents, algorithms, trademarks, and marketing licenses). These assets are more challenging for \"arm's-length\" pricing because it is difficult to determine the value of a comparable sale of such unique technologies and services. Additionally, intangible assets can be sold to a corporate entity in a low-tax jurisdiction at relatively low cost as they do not require the relocation of corporate headquarters or physical factories, workforces, etc. ", "The exact tax planning methods used by MNCs can vary, but generally they involve the parent (e.g., located in the United States) selling the income-earning ownership rights to those intangible assets to a subsidiary corporation in a low-tax jurisdiction. Early on, a firm developing a potentially profitable intangible asset in a higher-tax jurisdiction might create a subsidiary in a low-tax jurisdiction and sell or assign the ownership rights to that subsidiary. Creation of this \"shell corporation\" is primarily a paper transaction for the purposes of holding ownership of the profit-generating intangible asset. One way that this could happen is through a cost-sharing agreement in which a U.S. corporate owner of an existing intangible asset agrees to make the rights available to a foreign affiliate in exchange for other resources and funds to be applied toward the joint development of a new marketable product or service. Under a cost-sharing agreement, a foreign affiliate makes an initial buy-in payment for existing technology that, in theory, should reflect an \"arm's-length\" price that would be paid by an unrelated party. It then receives the income accruing to that asset. Subsequently, the foreign affiliate shares in the cost of continuing technological development. The cost-sharing payments made by the foreign affiliate to the U.S. corporation are income to the U.S. parent, and the foreign affiliate gains the right to use the advance in technology in a specified foreign market.", "This results in two outcomes. First, the MNC can use transfer pricing rules to maximize costs attributable to subsidiaries in higher-tax jurisdictions. Thus, the taxable income earned by the subsidiaries in higher-tax jurisdictions is reduced to as close to zero as possible. And second, taxable income realized by the shell corporation in the lower-tax jurisdiction is increased.", "For example, a U.S. corporation establishes a subsidiary in Jersey, an island in the English Channel with a standard corporate tax rate of 0%. The subsidiary buys an existing mobile phone technology developed by its parent U.S. corporation. The subsidiary has bought the right to earnings from marketing that technology in phones throughout Europe. The original cost-sharing payment to the parent would be subject to U.S. tax. The agreement allows the Jersey subsidiary to use updated versions of that technology in the European market from research conducted in the United States. Although the intangible assets were originally developed and improved in the United States, earnings from the mobile phone sales in Europe flow to the Jersey subsidiary and are taxed at 0%. "], "subsections": []}]}, {"section_title": "Select International Efforts to Tax the Digital Economy", "paragraphs": ["Concerns over the ability for MNCs to avoid corporate income taxes have led to much discussion within national governments and among developed countries in international economic settings. As some of these discussions have met impasse, for various reasons, some countries have unilaterally proposed or implemented policies to tax digital economy MNCs on specific grounds. ", "This section of the report provides a brief historical overview of these recent discussions and select unilateral DST proposals in Europe. While efforts to tax the digital economy have not been limited to European countries, efforts to develop policy principles and justifications in support of these specific taxes on digital economy markets have primarily been driven by politicians and commentators in Europe, including the United Kingdom. This report will not provide a comprehensive account of each DST proposal or be updated to track the rapid pace of policy modifications and emerging proposals."], "subsections": [{"section_title": "OECD/G-20 BEPS Action Plan", "paragraphs": ["In 2013, members of the Organization for Economic Cooperation and Development (OECD) and G-20 initiated the Base Erosion and Profit Shifting (BEPS) Project. The result of this multiyear effort is the 2015 BEPS Action Plan, which represents the consensus of the member countries that participated in the BEPS Project. Article 1 of the BEPS Action Plan analyzes the implications that the digital economy could have for modern tax systems, including taxes on corporate profits (i.e., corporate income taxes), withholding taxes (e.g., on royalties), and value-added taxes (VATs). ", "Article 1 acknowledges that \"it would be difficult, if not impossible, to ring-fence the digital economy from the rest of the economy for tax purposes\" given the importance of digital platforms and business models in modern economies. In light of this finding, though, Article 1 discusses potential new tax principles to enable countries to tax the profits earned by firms in the digital economy. Specifically, Article 1 discusses expanding on the widely accepted principle that profits should be taxed \"where value is created\" to include the notion that value-creating activities include user interaction. For example, YouTube profits when users post their videos and create content on its channels and generates more revenue in advertisement sales based on increased viewer traffic. ", "Additionally, Article 1 considers using \"significant economic presence\" rather than physical presence as the standard nexus for sourcing which jurisdiction has the right to tax. \"Significant economic presence\" could be measured by a corporation's revenues earned from customers in a country. The various DST proposals in Europe share many of the features of digital taxation options discussed in the OECD BEPS report. ", "Following the release of the 2015 BEPS Action Plan, the OECD has continued work in this area with its Task Force on the Digital Economy. On March 16, 2018, the task force released an interim report reflecting three different perspectives by its members. One perspective is that user-value creation has led to a \"misalignment between the location in which profits are taxed and the location in which value is created\" in some digital economy business models. This user-created value argument, discussed more throughout this report, has been used by many proponents of DSTs. A second perspective is that the challenges of tax policy presented by the digital economy are not exclusive to specific business models and should be addressed within the existing international tax framework for business profits. A third perspective is generally satisfied with recent BEPS recommendations and the existing international tax system and does not see a need for significant reform. Despite divisions reflected in the interim report, the task force aims to create an international consensus on principles for taxing the digital economy with a goal of releasing a final report on conclusions and recommendations by 2020."], "subsections": []}, {"section_title": "EU's Proposed DST", "paragraphs": ["In March 2018, the European Commission announced a digital tax package containing two proposals. The first proposal would expand the definition of permanent establishment to include cases where a company had significant economic activity through a \"digital presence,\" thereby allowing EU members to tax profits that are generated in their jurisdiction even if a firm does not have a physical presence. Under the proposal, a digital platform would be deemed to have established a \"virtual permanent establishment\" in an EU member state if it (1) exceeds a threshold of \u20ac7 million in annual revenues in a member state, (2) has more than 100,000 users in a member state in a taxable year, or (3) has over 3,000 business contracts for digital services business users in a taxable year. Until that more systemic change in permanent establishment rules is adopted, the second proposal would impose an \"interim tax\" on certain revenue from digital activities: selling online advertising, online marketplaces (facilitating the buying and selling of goods and services between users), and sales of data generated from user-provided information. The interim DST would apply only to companies with total annual worldwide revenues of at least \u20ac750 million and EU revenues of at least \u20ac50 million. The European Commission estimated that a 3% tax rate would raise \u20ac5 billion annually for member states. Media reports indicate that the EU-wide proposals have stalled partly due to disagreement among member states with different economic interests and questions as to whether the proposals would be legal under EU law.", "In support of its digital tax proposals, the European Commission argues that existing tax rules do not account for how value is \"created by users\" in the digital economy:", "Today's international corporate tax rules are not fit for the realities of the modern global economy and do not capture business models that can make profit from digital services in a country without being physically present. Current tax rules also fail to recognise the new ways in which profits are created in the digital world, in particular the role that users play in generating value for digital companies. As a result, there is a disconnect\u2014or 'mismatch'\u2014between where value is created and where taxes are paid.", "In discussing \"value creation in the digital economy,\" the European Commission states:", "In the digital economy, value is often created from a combination of algorithms, user data, sales functions and knowledge. For example, a user contributes to value creation by sharing his/her preferences (e.g., liking a page) on a social media forum. This data will later be used and monetised for targeted advertising. The profits are not necessarily taxed in the country of the user (and viewer of the advert), but rather in the country where the advertising algorithms has been developed, for example. This means that the user contribution to the profits is not taken into account when the company is taxed.", "Despite the policy pronouncements of the European Commission, member states of the EU disagree on both the long-term (changes to the permanent establishment rules to include digital presence factors) and interim (an EU-wide DST) proposed policies regarding the digital economy. ", "On December 4, 2018, the economics and finance ministers of various EU member states met as part of the EU's Economic and Financial Affairs (Ecofin) Council. As part of its agenda, the Ecofin Council was scheduled to consider a vote on the EU's DST proposal. According to media reports, a vote was not formally considered, as it was apparent that multiple members held out in opposition against the DST. As of the publication date of this report, the issues are still under consideration by the Ecofin Council.", "Even if opponents to the broad, EU-wide DST proposed by the European Commission successfully block adoption of such a tax, this does not mean that individual members states are also barred from imposing their own national-level DSTs. Policy and political pressure for DSTs still exist within many EU member states. According to one media report, approximately 11 of the 28 EU member states were considering or had adopted DSTs before the Ecofin meeting. "], "subsections": []}, {"section_title": "Spain's DST (Effective 2019)", "paragraphs": ["In April 2018, Spain announced that it would introduce a DST of 3% to the gross income derived from certain digital services. According to a preliminary text of the proposal, beginning in 2019, the tax will be imposed on certain digital services, including online advertising, online marketplaces, and data transfer service (i.e., revenue from the sales of online user activities) determined from internet protocol (IP) addresses within Spain. The tax would apply only to companies with global revenues for the previous calendar year exceeding \u20ac750 million and \u20ac3 million in revenues earned in that current year from activities with users in Spain."], "subsections": []}, {"section_title": "The UK's Proposed DST (Effective April 2020)", "paragraphs": ["On October 29, 2018, the Conservative Party introduced a DST as part of its 2018 budget proposal. Specifically, the tax would be levied at 2% on the applicable revenues of \"certain digital businesses which derive value from their UK users.\" Revenue subject to tax include search engines, social media platforms, and online marketplaces derived from the participation of UK users. Users is defined broadly and can include interactions (e.g., payments made or clicks) from UK participants on either side of a two-sided digital market. The tax would apply only to businesses whose revenues from covered business activities exceed \u00a325 million per year and groups that generate global revenues from search engines, social media platforms, and online marketplaces in excess of \u00a3500 million annually. There would also be a safe harbor provision that exempts \"loss-makers and reduces the effective rate of tax on businesses with very low profit margins.\" A \"review clause\" would be included in the DST to ensure that it is still required following further international tax reform discussions. The specifics of the DST are to be detailed in legislation to be considered by Parliament that is expected to be introduced in April 2020. The UK Treasury estimates that the DST will raise \u00a3400m by 2022-2023 and \u00a3440m by 2023-2024.", "According to the UK Treasury, the DST serves as \"interim action\" to \"ensure that digital businesses pay tax that reflects the value they derive from UK users\" until international corporate tax reform efforts determine a comprehensive method to tax income earned from these types of multinational corporate business models. "], "subsections": []}, {"section_title": "France's DST (Effective 2019)", "paragraphs": ["On December 17, 2018, Bruno Le Maire, Finance Minister of France, announced that the government was going to impose a DST beginning on January 1, 2019. Le Maire said that the tax is estimated to raise around \u20ac500 million annually. Details on what activities would be covered and the rate of tax were not provided but may be addressed in legislative sessions. Le Maire's announcement came the week after EU finance ministers did not reach agreement on an EU-wide DST at the December 2018 Ecofin meeting and shortly after President Emmanuel Macron announced billions of euros in tax cuts and spending in response to domestic social unrest. According to media coverage of the announcement, the decision to impose a DST seems to be motivated at least in part by a perceived unfairness in the amount of taxes paid by foreign corporations compared to domestic corporations."], "subsections": []}]}, {"section_title": "Policy Analysis of DSTs", "paragraphs": ["This section of the report first identifies the fundamentals of a corporate profits tax before addressing justifications that some have offered for DSTs. DSTs have been characterized as extensions of different types of tax regimes ranging from a tax on corporate profits in the digital economy to something more like a selective or excise tax on specific types of activities that is standalone from income tax regimes. Based policy analysis, though, DSTs resemble a selective tax on revenue (akin to an excise tax) and not as a tax on corporate profits."], "subsections": [{"section_title": "Fundamentals of a Corporate Profits Tax", "paragraphs": ["A tax on corporate profits taxes the return to investment in the corporate sector. Investment is giving up income for consumption today for the promises of higher returns, or earnings, in the future. Investment can be made in tangible assets, such as factories or equipment, or intangible assets, such as patents or trade secrets. The earnings eventually generated by the assets owned by corporations are taxed under the corporate profits tax. ", "As discussed in the \"Permanent Establishment\" section of this report, domestic tax laws and international agreements provide the first right to tax income at its physical source\u2014that is, where the asset is owned. The locations of a corporation's customers do not determine which country has a right to tax its income. For example, if a U.S. firm manufactures goods in the United States and exports those goods to European countries, then those European countries do not have a right to tax the earnings of the U.S. firm just because of its sale to European customers.", "Under some tax regimes, countries retain the right to impose a residual tax by taxing foreign-source income (i.e., income earned from overseas) and allowing a foreign tax credit. But the right to impose that residual tax on income from foreign incorporated subsidiaries is based on a domestic corporation owning some minimum percentage of the foreign business entity (i.e., a controlled foreign corporation, or CFC). In the United States, income from foreign branches is taxed currently and eligible for a credit. For example, the United States could tax the income that a firm earned from overseas sales if that firm is owned in part or in full by a U.S. parent in the year that the foreign-source income was earned (i.e., \"currently,\" or not subject to deferral). However, most countries do not exercise this residual right to tax foreign-source income outside of income that can be easily shifted to low-tax countries."], "subsections": []}, {"section_title": "Purported Justifications for a DST", "paragraphs": [], "subsections": [{"section_title": "As a Tax on Corporate Profits in the Digital Economy", "paragraphs": ["European Commission authorities appear to be characterizing their DST proposal as an extension of national-level corporate income taxes. In contrast, the UK has framed its DST as a gross receipts tax and specifically says that it is not an income tax. Regardless of these mixed characterizations, a policy analysis of DSTs indicate that they do not resemble a tax on corporate profits.", "First, as explained above, international tax rules do not provide countries a right to tax an MNC's cross-border income solely because their residents purchase goods or services provided by that firm. Rather, ownership of assets justifies a country to tax that MNC's profits. ", "Second, DSTs, as they have been introduced thus far, are not structured as taxes on corporate profits. Corporate accounting profit is equal to total revenue minus total cost. Many corporate income tax systems tax corporate profits (along some policy spectrum of resident-based or worldwide-based rules). In contrast, DSTs are structured as \"turnover taxes\" that apply to the revenue generated from taxable activities regardless of costs incurred to a firm. The first section of the Appendix provides an algebraic illustration to show that a DST may have different consequences for the after-tax accounting profits of a firm than an income tax levied at the same tax rate. ", "Third, DSTs are economically equivalent to excise taxes on intermediate services in the supply chains of various markets. As explained in the \"Economic Efficiency\" section of this report, the economic incidence of a DST is likely to be borne by purchasers of taxable services (e.g., companies paying digital economy firms for advertising, marketplace listings, or user data) and possibly consumers downstream from those transactions, depending on supply-and-demand conditions in each stage of the supply chain. It could be possible under specific market conditions (i.e., in which firms subject to the statutory incidence of a DST earn supernormal economic profits or have monopoly power) that DSTs could reduce corporate profits of firms in the digital economy. Under this scenario, even though DSTs would not still be structured as a tax on profits (from a plain reading of the implementing law), they could have the economic effect of a tax on profits. For reasons discussed later in this report, though, it would be difficult to demonstrate that digital economy firms generate supernormal economic profits or are monopolies within the larger markets in which they operate. "], "subsections": []}, {"section_title": "As a Measure to Counteract Tax Avoidance and Profit Shifting", "paragraphs": ["Proponents of DSTs argue that profits earned by MNCs in the digital economy are not adequately taxed on a worldwide basis, as many of these firms have reduced their effective tax rates through international tax planning strategies. As discussed earlier in the \" Tax Issues Highlighted by the Digital Economy \" section of this report, two prongs of these tax planning strategies include avoiding permanent establishments in higher-tax jurisdictions and using transfer pricing to shift profits to lower-tax jurisdictions. Other strategies that help MNCs, both inside the digital economy and outside, avoid income tax include debt and earnings stripping, avoiding withholding taxes, and contract manufacturing. ", "Critics of basing DSTs on this position could make several arguments. First, revenues lost from profit shifting are lost revenues to the country with the right to tax the corporation that owns the asset, not the country that is home to the corporation's customers. Although many developed economies are concerned with ensuring that profits are taxed from their proper source under international tax laws, a country that imposes a DST on foreign MNCs' income (in which they have no right to tax) is not consistent with the rationale of recouping revenue lost from the profit-shifting practices of that country's firms. ", "Second, tax strategies enabling MNCs to pay little to no tax have been used by a broad array of firms that rely on intangible assets for the majority of their profits, and these firms are not limited to industries in the \"digital economy.\" For example, European Commission authorities recently opened investigations into tax benefits conferred by its members on McDonald's (over royalty payments made by franchisees for use of the company's brand) and Starbucks (over royalty payments for coffee roasting \"know-how\" and the price of its unroasted beans). Thus, it can be argued that DSTs arbitrarily target firms within the digital economy for allegedly excessive profit shifting.", "Third, tax policies in a number of countries have recently changed or are scheduled to change in ways that will reduce incentives for profit shifting. These changes will most likely affect firms with the most aggressive profit-shifting strategies, including some digital economy firms. In the United States, a number of provisions enacted in P.L. 115-97 have reduced or will likely reduce economic incentives for U.S. MNCs to engage in profit shifting and tax avoidance. In addition to reducing the top marginal corporate tax rate from 35% to 21% \u2014and, thus, the potential tax savings from profit shifting\u2014 P.L. 115-97 contains several other policy changes discouraging profit shifting, such as", "\"Thin capitalization\" rules limiting the benefits to earnings and debt stripping, such as reducing the share deductions of interest from 50% to 30% of adjusted taxable income for businesses with gross receipts greater than $25 million and eliminating a safe harbor that exempted firms without high debt-to-equity ratios. A new tax on \"global intangible low-taxed income\" (GILTI), effectively imposing a 10.5% minimum tax rate on the intangible income of CFCs in years 2018-2025 and 13.125% after 2025. In other words, if U.S. corporations are largely the center of concerns about digital economy MNCs not paying a \"fair share\" of their worldwide profits in tax, then GILTI provides a \"floor\" in the amount of tax owed by firms that previously sought out tax homes for their intangible assets in countries that imposed low or zero income tax. A \"deemed repatriation\" tax on accumulated post-1986 earnings at rates of 15.5% (if held in cash) and 8% (other, noncash assets), with applicable foreign tax credits similarly reduced. In other words, retained earnings of U.S. MNCs that were held abroad (often in low-tax jurisdictions) are now subject to tax. U.S. firms that invert are subject to a number of penalties, such as higher tax rates on the stock compensation of the inverting company's executives, a recapture of the deemed repatriation rate on post-1986 earnings (subjecting these earnings instead to 35% instead of 8% or 15.5%), and application of ordinary individual income tax rates instead of lower qualified dividend/long-term capital gains rates on certain dividends issued from the new foreign parent of the inverting U.S. company.", "Some European countries have taken efforts to change policies that were characterized by some as enabling tax avoidance among digital economy MNCs. For example, Ireland is phasing out tax provisions by 2020 behind the \"double Irish sandwich.\" Some digital economy firms reportedly used this tax planning strategy to reduce the effective rate of tax on their cross-border income (e.g., advertising sales in Europe) and shift their profits to \"tax havens\" that impose no tax on corporate income. Furthermore, the Netherlands is considering imposing a withholding tax on royalty payments to low-tax jurisdictions by 2021. Although tax-minimizing international tax planning still exists, policy changes have reduced the benefits of using past strategies that raised concerns of MNCs routing income through a complicated series of international business entities for the primary purpose of reducing tax owed. ", "Fourth, DST proposals are unlikely to affect profit-shifting behavior. As explained above, a tax on corporate profits, in a very general sense, taxes corporate income minus the costs of production. In contrast, DSTs are imposed on gross revenue derived from certain business activities (or \"turnover\") and do not take into account costs or net profits earned by the taxable firm. Thus, economic incentives for MNCs to shift profits remain unchanged by DSTs as they do not affect profit-maximizing decisions at the margins. "], "subsections": []}, {"section_title": "As a Method to Tax Local \"User-Created Value\"", "paragraphs": ["As discussed in the \" Select International Efforts to Tax the Digital Economy \" section of this report, statements by the European Commission and United Kingdom claim that tax regimes are not adequately taxing the \"value\" created by user contributions and behavioral data that forms a key part of the business models of firms in the digital economy.", "The user-based value creation argument says that some digital platforms benefit from \"network effects,\" in which the contributions of one user benefit other users and draw more users to utilize the platform. For example, a UK user creates a video on YouTube that is widely shared or promoted among other UK users. The increased user traffic benefits YouTube because more users are seeing advertisements that it has placed on its site. Thus, the video content creator has created \"value\" to YouTube by generating more advertising revenue to the platform. As another example, Yelp is a website and mobile application that allows users to provide restaurant and business reviews. Yelp generates revenue primarily from targeted advertising placed on its website. As more users provide higher-quality reviews, more users will rely on Yelp. Thus, the quality of user contributions creates \"value\" for Yelp's business model by increasing advertising revenue. ", "Critics of this user-based \"value-creation\" argument could make various rebuttals. First, business models in the digital economy do not raise novel or \"disruptive\" challenges to income tax frameworks. In the digital economy, it is common for firms to operate in two-sided markets, where they sell or provide services to two sets of customers. For example, a social media company could use revenue earned from customers on one side of the market (advertising sales to businesses) to subsidize the free provision of services to customers on the other side of the market (individual platform users). A company providing free health and athletic tracking services can charge lower prices for a wearable device if it can sell aggregated user data to another marketer. This method of earning income across two-sided markets, though, is not new. For example, the advent of radio and television broadcasting in the 1900s operated on the same business model, where individual users consumed free programming in exchange for listening or viewing advertisements from sponsors. Just because French households along the border with Italy listen to Italian advertisements on an Italian radio station does not give France the right to tax the Italian radio station's advertising revenues. By analogy, just because French households are able to view online advertisements placed by a U.S. company on a U.S.-owned social media platform does not give France the right to tax the U.S. social media firm's advertising revenue.", "Second, the \"value created\" in the digital economy is achieved by the innovations and assets of the companies themselves, not by the actions of a single user. The companies\u2014not the customers\u2014bear the risk associated with investments in innovative technologies and platforms. They hire the workers, conduct the research, and develop the software, algorithms, and patentable innovations. For example, a key capability of many digital economy platforms is the ability to aggregate large amounts of data points across millions (if not billions) of users and repurpose that information for targeted adverting or directly selling goods and services. The technology enabling the aggregation of the user data and identifying patterns in consumer behavior is what adds value for resale to potential advertisers or retailers.", "Third, user contributions can be viewed as inputs to digital economy business models. It can be argued that the value of a single user's data or input is worth little to no market value in isolation. This is why users are generally willing to let companies track and collect these data without charge. Even if digital business models that allow individual users to monetize and sell their individual data grow, any income earned by individual users would be subject to tax under existing tax systems. For example, property owners on Airbnb are subject to income taxes and other hospitality fees levied by their national and local governments. YouTube \"influencers\" that are sponsored by companies pay personal income tax on those earnings to their home countries.", "Fourth, user contributions can be viewed as a substitute for money exchanged by consumers for the provision of digital services. \"Direct provision,\" in this context, has the same meaning as \"sale of\" digital services, except there is no money exchanged in the transaction (i.e., bartering). For example, take the market for data generated by user-provided information. Google users agree to have Google track their search queries in exchange for the free use of Google's search engine. Similarly, Facebook users agree to have their likes, posts, and network connections tracked and aggregated for sale to advertisers in exchange for the use of Facebook's social media platform at zero cost.", "These transactions, it is argued, maximize the economic welfare of both consumers and producers. Consumers benefit because the behavioral data of any one user has little to zero market value (as discussed above), but consumers do value the provision of digital goods and services. Producers of digital services benefit because they are able to generate revenue from repurposing aggregated user data in exchange for operating their digital platforms at little to no cost to users. As another example, Amazon's business model can be viewed like a catalog retail merchant that features the goods of different manufacturers. A catalog retail merchant earns income by selling space to manufacturers for the privilege of featuring their products in the merchant's catalog. The catalog merchant's customers place an order, and the goods\u2014which are typically manufactured from outside of the jurisdiction where the customer is located\u2014are then shipped to the customer. The customers did not \"create value\" in that business-to-business transaction via their subscription and purchases of the catalog. By analogy, just because a final consumer of goods sold via Amazon resides in the UK or France does not give those countries the right to tax Amazon's revenues.", "Fifth, the distinction that customers in the digital economy create value while customers in other industries do not could be viewed as arbitrary. Consumers engage in a countless array of activities that enhance a company's \"value\" in the course of everyday life. Customer reviews and referrals for services\u2014everything from dog walkers to dry cleaners to dentists\u2014have existed for years and can increase a business's revenues. However, consumers usually do not expect a share of those revenues, nor does the act of providing a review give the country in which that customer resides a right to tax the service provider's profits. Additionally, consumers promote certain brands and companies simply by using their goods or services. This sort of \"free marketing\" improves the reputation of the brand or firm but does not trigger tax liability based on the location of the consumer. The flow of users to one digital economy platform or another are similar in that mass consumer attraction drives revenue. What the digital economy has changed, though, is the speed and scope in which consumer actions can be relayed to others."], "subsections": []}, {"section_title": "As an Excise Tax on the Digital Economy", "paragraphs": ["Excise taxes are typically justified by economic principles or as revenue-raising measures. From an economic perspective, there are four common types of excise taxes: (1) sumptuary (or \"sin\") taxes, (2) regulatory or environmental taxes, (3) benefit-based taxes (or user charges), and (4) luxury taxes. The first two categories of excise taxes attempt to correct for a perceived \"market failure\" in which the actions of individuals in the market have negative spillover effects to society. The third category is typically used to limit the burden of funding a government program that tends to benefit a relatively defined or narrow set of beneficiaries. The fourth category, largely repealed in the United States, uses specific taxes as a means to raise revenue in a more progressive manner. ", "Based on these classifications of excise taxes, it appears that a DST primarily serves as a revenue raising measure. The use of digital platforms does not appear to create negative spillovers to society, creating the economic justification for use of excise taxes to raise the price of individual transactions as a means to reduce the burden on society. DSTs do not appear to be a benefit-based tax, as proponents have not called for dedicating the revenue to specific government programs that benefit digital economy MNCs subject to tax. DSTs also do not appear to be clearly a more progressive method of financing government activities compared to income taxes or broad-based consumption taxes (e.g., value-added taxes) that are common in Europe. As discussed below in the \" Vertical Equity (Progressivity) \" section of this report, DSTs could be a regressive method of financing government spending in the countries that impose them."], "subsections": []}]}]}, {"section_title": "Economic Analysis", "paragraphs": ["This section analyzes DST proposals under the standard tax evaluation criteria used by economists. These criteria are used to understand how a tax affects consumer demand and producer supply, whether a tax aligns with common notions of fairness, and administrative issues that could increase tax compliance costs for taxpayers or affect the ability of governments to collect revenue from a tax."], "subsections": [{"section_title": "Economic Efficiency", "paragraphs": ["Economic efficiency is typically defined as optimal production and distribution of resources in a market. Taxes typically impede, or distort, that optimal allocation of resources by raising the price of the taxed activity. Central to estimating the magnitude of these distortions is determining who bears the economic burden, or incidence, of the tax. The economic incidence of a tax can differ from the statutory incidence (i.e., who is obligated by law to pay the tax) depending on conditions in the affected market. Once the economic incidence of a tax is established, the exact distortions to consumers and producers can be determined as well as any other economic activity that is typically discouraged by a tax.", "The statutory incidence of the DST is borne by firms that provide covered services. For example, under the Spanish DST, companies that sell online advertising services, provide platforms for online marketplaces and intermediation services, and data transfer services\u2014all to users with IP addresses within Spain's jurisdiction\u2014will be subject to the DST (providing that they meet the threshold requirements). The economic incidence of such a tax could vary depending on the structure and characteristics of those individual markets, as explained in more technical detail in the Appendix . ", "Under one scenario, digital economy firms providing services subject to the DST are perfectly competitive, and the economic burden is borne by the consumers of the digital services in the form of higher prices over the long term. For example, Spain levies its DST on firms that place digital advertisements, based on the revenue earned from showing advertisements on the search results and web pages of users with Spanish IP addresses. In a perfectly competitive market, firms providing digital advertisements earn zero economic profit in that they could not earn a higher rate of return via alternative investments. When faced with the DST, these advertising firms can either (a) exit the industry and pursue higher returns in other industries that are not subject to tax or (b) pass along the tax in the form of higher prices to businesses that purchase the advertising services. The firms purchasing digital advertising could be Spanish companies, but they could also be foreign firms purchasing advertisements that are ultimately targeted to Spanish users. In this case, the imposition of a DST in a competitive market will increase the price of taxable services and lead to a decline in the quantity demanded. The exact magnitude of these changes will depend on the responsiveness, or \"elasticity,\" of the companies purchasing the internet advertising to changes in price. ", "Assuming that companies purchasing the advertising services are also operating in a perfectly competitive market, they are faced with the same options as the firms that sell internet advertising: exit the industry or pass the tax along to consumers of their goods. Higher prices could result in lower consumer demand for the advertised product. The magnitude of this reduced demand depends on the responsiveness of consumer demand to changes in price (i.e., the price elasticity of demand). Thus, a DST imposed on intermediary services can have ripple effects downstream within markets. Under perfect competition, the economic incidence of an upstream DST is ultimately borne by the final consumers of those advertised products. ", "Under an alternative scenario, sellers of digital services (e.g., Google, Facebook, Amazon) could be monopolies, or a small number of firms could have \"market power\" (the ability to influence the price for their services prevailing in the market), and at least part of the tax is borne by these firms in the form of reduced economic profits. Firms can derive market power from a number of factors. For example, lack of competition could enable one firm to have a significant effect on the prevailing rate of digital advertising services. Also, the presence of complements and substitutes could affect market power. In contrast to firms in perfectly competitive markets, firms that have market power are able to earn positive economic profits, also known as \"supernormal profits,\" because they are able to set a price above their marginal cost of production. ", "Some have argued that digital economy firms are more likely to generate supernormal profits because the marginal cost of scaling production of their business model is relatively low, if not costless. For example, the marginal cost for Facebook to display an advertisement to a user is basically zero. Others argue that some firms generate supernormal profits because they are operating in an oligopoly or near-monopoly. For example, most search results are conducted through Google, and Facebook has the most users among social media platforms. These arguments, though, may not provide clear indication of supernormal profits. A variation of the first argument could have been made during the rise of the retail catalog industry, where the marginal cost of producing a single magazine and mailing it to a consumer was relatively small. However, the presence of competing catalog retailers should have driven the prices of firms down close to their marginal costs (which encompass more than just the cost of printing one additional catalog). The second argument could be seen to misidentify the structure of \"two-sided markets\" in which many digital economy firms provide services to individual users as well as businesses. For example, Google provides search engine results to individual users (at no cost) and sells advertising space on those search results to businesses. Even if Google dominates the search engine market, it still competes against other firms, such as Facebook, for digital advertising. Digital economy firms also compete with nondigital economy methods of providing advertising services (e.g., television, print, and radio), which could constrain their ability to set prices well above their marginal cost of production. ", "When faced with the DST, a monopolist or firms with market power bear at least some of the tax in the form of lower profit. This analysis is explained in more detail in the Appendix . How much of the tax is passed along to companies buying the advertising placement (and their customers) depends on the elasticities of supply and demand in those markets. Like the analysis in the competitive market, consumers in the affected industries reduce their demand in response to higher prices. ", "The ultimate implication of the analyses above is that DSTs introduce distortions in various markets by reducing the financial return to capital in digital economy industries or by raising the cost of goods and services intermediated through digital platforms. Investment in affected markets would be expected to decrease. An example of the former would shift investment out of digital economy firms (e.g., as retailers purchase more print, television, or radio advertisement instead of internet advertisement or increased sales via brick-and-mortar or catalog outlets instead of digital), while an example of the latter would involve a reduction in demand of the final goods. The exact magnitude of these changes will vary based on the responsiveness of supply and demand in those various markets. Distortions can also arise in different ways depending on how a particular country's DST is applied to different firms. These issues are described more in the \" Differential Treatment of Firms \" section below."], "subsections": []}, {"section_title": "Equity", "paragraphs": [], "subsections": [{"section_title": "Vertical Equity (Progressivity)", "paragraphs": ["The principle of vertical equity generally implies that taxpayers with a greater ability to pay the tax should generally pay a greater share of their household income in taxes compared to households with a lesser ability. A tax is \"progressive\" if higher income households pay a greater share of their income in tax than lower-income households, whereas the opposite is true in a regressive tax system.", "If the economic incidence of DSTs resemble that of an excise tax rather than a tax on corporate profits, as discussed in the \" Economic Efficiency \" section, this finding also has an impact on the vertical equity analysis of DSTs. A review of the economic literature shows that the majority of the corporate income tax is borne by capital (i.e., the corporation's shareholders) with the residual being borne by labor, or workers. Capital, here in the form of stock ownership, tends to be disproportionately concentrated in higher-income households. In contrast, excise taxes are commonly borne by consumers in the form of higher prices. Excise taxes are often regressive, as lower-income households bear a higher share of their pre-tax income on consuming goods and services than higher-income households. ", "The exact equity effects of DSTs could vary based on different abilities for intermediate firms to pass the tax along to consumers, the nature of the goods and services that they sell, and the responsiveness of consumers in those relative markets. For example, assume that Facebook charges higher prices for advertising on the social media platform to companies, and companies are able to pass those higher advertising costs in full to their customers in the form of higher prices. If one of those companies sells luxury cars and another sells consumer household goods, the DST has more progressive effects in the former case and more regressive effects in the latter. In the aggregate, though, there is little reason to assume that final consumers of goods and services sold through taxable activities in digitized business models are disproportionately higher-income. Thus, it can be expected that a DST affecting a broad range of goods and services is more likely to be regressive than not, especially when compared to a tax on corporate profits. "], "subsections": []}, {"section_title": "Differential Treatment of Firms", "paragraphs": ["DSTs create unequal economic treatment between similarly situated firms inside and outside of the digital economy. Firms outside of the digital economy can earn just as much global or local revenue as firms taxed under DSTs without being subject to an additional layer of tax on their revenue. Firms outside or inside the digital economy can also engage in profit shifting and \"aggressive\" transfer pricing to reduce their taxes owed in a country. ", "DSTs, as they have been presented thus far, also create inequalities for firms of similar size based on certain exemptions and thresholds. For example, each of the specific European DST proposals use different or multiple thresholds based on total cross-border profits, revenue generated from covered business activities, \"clicks\" or interaction based from local users, etc. While proponents of these DSTs with minimum thresholds might have other policy goals in mind (e.g., exempting smaller businesses from potentially costly tax compliance burdens), the exact levels at which these thresholds are drawn among larger MNCs are arbitrary from a policy perspective. Critics of DSTs would argue that the thresholds are drawn to exclude domestic MNCs or to target the taxes to a narrow set of foreign MNCs. ", "Regardless of their rationale, these thresholds create concerns of inequitable treatment between different sectors. In the situation where the tax is fully passed along to consumers, digital firms either charge a higher price (reducing demand) or exit the industry. Where the MNCs subject to the statutory incidence of the tax bear at least a portion of the economic incidence of the DST, then they face a lower return to business investment in that country compared to firms not subject to the DST.", "Additionally, the UK DST's proposed exemption or \"safe harbor\" for \"low profit\" firms could create another layer of equity concerns. If the exemption is based on low profits as calculated by UK tax rules, then firms that are not subject to the UK corporate income tax (because they do not have a permanent establishment in the UK) will not be eligible for the exemption. In other words, if a firm must be subject to the UK corporate income tax to be eligible for exemption then, by definition, the exemption is not available to foreign MNCs. MNCs with similar amounts of global revenue would be subject to different effective tax rates on their worldwide consolidated earnings (across all related entities) based on whether they were subject to UK income taxes or not. An alternative exemption being considered by the UK, based on global consolidated profits, could have some administrative issues, as discussed in the next section of this report."], "subsections": []}]}, {"section_title": "Administration", "paragraphs": ["DSTs present several administrative challenges to both the public and private sectors. With regard to the public sector, lawmakers and revenue-collecting agencies will have to clarify exactly what types of activities are subject to tax and which parties bear the statutory burden of paying tax. These decisions affect the costs of administering the tax or the gross revenue collected by the tax. With regard to the private sector, the decisions made by lawmakers and agencies could affect the costs of complying with DST regimes.", "Technology could present administrative challenges to the implementation of DST proposal. First, some digital economy platforms allow users to opt out of having their data tracked or resold to third parties. Without this information a digital service provider may be able to fulfill a user's desire for privacy, but the absence of the information limits the provider's ability to apply proper taxes based on the customer's jurisdiction. \"Do not track\" or internet browser plugins that make it more difficult for companies to track users' activities could affect the measurement of data collected from local users. Second, users could reroute their internet traffic to servers outside of the country imposing the DST and mask their physical location.", "Virtual private network services (VPNs) allow users to access websites while making it appear that their IP addresses are from locations other than their actual locations. VPNs connect users to servers located in different parts of the world. Websites will see that a user's web traffic is originating from the VPN server, which could or could not be in the same jurisdiction as the user. Typically, VPNs are used for anonymity reasons or to bypass firewalls and website censors imposed in certain jurisdictions. VPNs are not sufficient to protecting a user's IP address, as other unmasking techniques (some requiring more effort) can be used. Still, users could use VPNs located outside of the taxing jurisdiction to reduce the flow of user activity attributed to IPs within the taxing jurisdiction, thereby reducing revenue collected from \"local\" user activity. Even if this does not completely eliminate the revenue base for a DST, VPN use still results in mismeasurement of the amount of revenue attributed to local users. ", "Overall, lawmakers writing DSTs would likely need to consider specifying what level of enforcement would be sufficient for companies to make good faith efforts to source their revenues to local users. More due diligence required by companies to determine the source of their users or unmask user efforts designed to preserve their privacy will impose higher costs to the companies. A lower standard might require fewer resources from firms and be less intrusive on user privacy but reduce the amount of tax raised from local users. Thus, DSTs could present policy tradeoffs between individual privacy concerns and tax revenue collection.", "Two features of the UK's proposed DST create additional administrative challenges. An exemption based on low UK-source profits could also have unintended consequences for proponents of the DST in the form of reduced revenue. Some digital economy MNCs do have subsidiaries physically located in Europe. For example, these firms might have the purpose of providing customer service or call centers that speak the local language or market the company's lines of business. Generally, these types of business activities are low profit margin. If a digital economy MNC does have a permanent establishment in the UK that earns close to zero profits, thereby owing little to no income tax in the UK, does the tax situation of this local subsidiary justify an exemption for the entire MNC controlled group? If so, the MNC could still be technically generating millions of British pounds in revenue from sales to UK customers over the internet. In contrast, an MNC that does not have a UK subsidiary but also has millions in revenue from sales to UK customers would not be eligible for the low-profit exemption. The clear tax planning implication of such an interpretation of the low-profit exemption is that MNCs should establish a low-profit subsidiary in the UK as a means to claim the low-profit margin exemption. If allowed, then the UK DST would likely raise little to no revenue. ", "Alternatively, the UK could base its low-profit exemption based on worldwide profits of the MNC. In the United States, corporations are required to report a number of tax-related calculations and information on their annual Securities and Exchange Commission filings for shareholders. Among these tax-related data are their effective tax rate and tax paid across all jurisdictions where the firm is subject to tax. However, the tax data reported under financial accounting rules typically varies from actual tax paid. This phenomenon is described as \"book-tax differences.\" For example, different rules for depreciation are typically used for accounting purposes compared to actual tax policy in a jurisdiction (e.g., if the lawmakers in that country decided to speed up cost recovery with the intent of increasing business investment). Thus, an exemption based on financial disclosure forms may not accurately reflect taxable income."], "subsections": []}]}, {"section_title": "DSTs and Implications for U.S. Tax Policy", "paragraphs": [], "subsections": [{"section_title": "U.S. Foreign Tax Credits and Bilateral Tax Treaties", "paragraphs": ["U.S. corporations are allowed to claim a tax credit against U.S. corporate income tax liability for income taxes paid to foreign jurisdictions. The rationale is to prevent double taxation of foreign-source income. ", "DSTs are taxes on revenue earned from specific business activities and should not be eligible for U.S. foreign tax credit treatment for several reasons. First, such taxes are not income taxes under common bilateral tax treaty language. Statements from some countries imposing DSTs, such as the UK, indicate that they do not intend DST payments to be creditable against taxes that an MNC might owe in its home country. Nor are DSTs \"in lieu of income taxes,\" as the countries imposing DSTs do have a corporate income tax system. ", "The Internal Revenue Service (IRS) could clarify that U.S. bilateral income tax treaties do not provide for a foreign tax credit against U.S. tax for U.S. corporations that make DST payments to foreign jurisdictions. If the IRS does not do so, then Congress could enact legislation denying a U.S. foreign tax credit for such payments. Denying a foreign tax credit could increase the total taxes paid by U.S. MNCs in jurisdictions around the world, but allowing DST payments to be creditable would effectively force the U.S. Treasury (and U.S. taxpayers) to subsidize tax rates imposed by foreign jurisdictions. "], "subsections": []}, {"section_title": "GILTI", "paragraphs": ["Policymakers who sympathize with the premise that MNCs in the digital economy are unfairly able to shift profits to low-tax jurisdictions could still disagree with the unilateral response of foreign countries to impose DSTs. The tax on GILTI serves as an alternative policy tool intended to impose higher effective tax rates on U.S. firms in the digital economy. For example, in the 115 th Congress, the No Tax Break for Outsourcing Act ( H.R. 5108 ; S. 2459 ) would have increased the GILTI tax rate to 21% and eliminated the deduction for the return on tangible assets derived by domestic corporations from serving foreign markets in computing GILTI tax liability, among other provisions."], "subsections": []}, {"section_title": "Possible Challenges at the World Trade Organization", "paragraphs": ["As discussed, above, DSTs have the same economic effects as an excise tax. It is not controversial for countries to levy excise taxes on imported as well as domestically consumed goods or services. Such taxes are considered to not distort trade. However, some DST proponents have not explicitly labeled them as \"excise taxes,\" making it unclear how these taxes should be viewed in terms of international agreements. ", "Regardless of the label attached to them, some commentators argued that DSTs violate restrictions on tariffs under the rules of the World Trade Organization. For example, some scholars argue that the high-revenue thresholds for taxation and the exclusion of certain revenues earned by European firms effectively discriminate against the digital exports of U.S. firms."], "subsections": []}, {"section_title": "Multilateral Tax Reform Negotiations and U.S. Economic Policy", "paragraphs": ["Many proponents of DSTs argue that they are \"interim measures\" until the international community adopts broader reforms in international tax rules. As mentioned in the discussion of the European Commission's DST proposal, the commission prefers changes, both inside and outside of the EU, in the permanent establishment rules to incorporate some measure of \"digital presence.\" This goal aligns with the EU's goal of a consolidated tax base among its members and formulary apportionment of corporate tax revenue based on a set of factors (e.g., sales, assets, employment), which would result in a shift away from tax allocation based on assets. The form and rationale of DSTs appear to better comport with a formulary apportionment tax being pursued in the EU than a traditional national corporate income tax.", "The inability for consensus to impose a DST at the European Commission level could lead more individual member states to unilaterally impose their own DSTs. Even if the United States objects to unilateral DSTs, these sovereign countries are generally able to impose their own tax systems (within the boundaries of any other international agreements, such as EU membership).", "Congress could consider creating \"carrots\" or \"sticks\" affecting the policy choices of DST proponents. Tax policy and legal scholars have debated the merits of \"potential compromises\" that would not require fundamental rewrites of international tax rules. Some of these options would rely on the executive branch for day-to-day negotiations at a bilateral or multilateral level (e.g., at the OECD). Any modification to existing or new tax treaties, though, would require Senate approval. Congress could also direct the executive branch to impose incentives (and disincentives) that would affect key sectors of the EU economy. An evaluation of these emerging ideas and concepts is, however, beyond the scope of this report. "], "subsections": [{"section_title": "Appendix. Technical Appendix", "paragraphs": ["DSTs Are Not Structured as Taxes on Profits", "Corporate profit is generally defined as:", "(1) \u03c0=TR-TC", "Where \u03c0 is profit, TR is total revenue, and TC is total cost. This is before taxes.", "After tax corporate profit, \u03c0 t , for a firm after imposition of a percentage tax ( t ) on corporate profit, is defined as:", "2 \u03c0t=(1-t)(TR-TC)", "In contrast, a DST ( dst ) is levied as a percent of total, gross revenue yielding an after tax profit, \u03c0 dst , of:", "3 \u03c0dst=(1-dst)TR-TC", "Algebraically, equations (2) and (3) are not equivalent. To further illustrate, the following amounts can be substituted: TR = $1,000, TC = $500, and t = 0.03 (or a 3% tax rate). Using these parameters, \u03c0t based on a 3% profit tax would be:", "4 \u03c0t=(1-0.03)($1,000-$500)", "5 \u03c0t=$485", "Using these parameters, \u03c0dst based on a 3% DST revenue tax would be:", "6 \u03c0dst=(1-0.03)$1,000-$500", "7 \u03c0dst=$470", "As shown above, after-tax profit for a corporation subject to a 3% income tax rate (equation 5) is greater than after-tax profit for a corporation subject to a 3% DST (equation 7) in lieu of an income tax. The two taxes are not the same. ", "Effects of a DST on Supply-Demand Conditions in Digital Markets", "To analyze the economic effects of a DST, the different markets in which digital economy firms operate must be conceptualized. In a general sense, the consumers or buyers in these markets are those that pay money to the supplier or seller for the provision of a service. Many firms in digital economies operate in \"two-sided markets\" in which they provide services to two different consumers: individual users and businesses. While both sides of these markets could be relevant for calculating DST liability, the markets for the latter group of services are the starting point for analyzing the economic effects of a DST, because these business-to-business transactions are where the statutory incidence of a DST is typically first imposed. For example, in the market for internet advertisements, a clothing company could be the consumer and Google or Facebook could be the seller or supplier. In the market for marketplace sales, a vendor could be the consumer and Amazon could be the seller or supplier. In the market for user data sales, a data transfer firm could be the consumer and Facebook, Google, or Fitbit could the supplier. ", "From an economic perspective, there are two extremes of market structure: perfect competition and monopoly. Most market structures lie somewhere in between. Monopolies rarely exist, and they are typically regulated. For reasons explained below, there are specific reasons why monopolies are likely not to exist in the markets in which DSTs apply. However, firms could have market power if there are barriers to entry. ", "The following analyses examine how a DST would apply, over the long run, in the two extremes of market structure for a digital economy firm facing a downward sloping demand curve. ", "Analysis of a DST in a Competitive Market", "In perfect competition, firms face a downward-sloping demand curve, and the supply curve is perfectly elastic (horizontal) as increases in output are achieved by new firms entering the industry over the long run. Each firm earns no economic profit, meaning that the opportunity cost of investing in alternative ventures is zero, and each is a price taker in the market (i.e., an individual firm cannot influence the price prevailing in the market). In this scenario, when the government imposes an excise tax, firms must ultimately pass on the cost of the tax to their consumers or exit the market.", "The market for services provided by firms in the digital economy could be depicted as \"perfectly competitive.\" Under this scenario, many firms are willing to provide a relatively similar service. These markets can be outlined more narrowly to encompass only activities by other digital economy firms (e.g., internet advertising, marketplace sales, data transfer), or they can be outlined more broadly (e.g., consumer advertising, retail outlets, consumer marketing research). In other words, although users typically associate Facebook as primarily a social network and Google as primarily a search engine, both firms may operate and compete in the same market for internet advertising. Additionally, both firms compete in the larger market for consumer advertising alongside television, print, and radio advertisers. If a clothing seller is deciding where to spend his advertising budget, that seller can purchase advertising placements on Facebook, Google, etc. (not to mention television, print, and radio). Similarly, a data transfer company looking to purchase and analyze user data then selling marketing services for another good or service not only has the choice to purchase data from Facebook, Google, etc.; it can also collect data from other companies that collect data and surveys on consumer preferences. ", " Figure A-1 and Figure A-2 illustrate the long-run effects of a DST in a perfect competition scenario with demand curves of different slopes. The demand curves are downward-sloping because consumers demand less of the taxed service as price increases. The different slopes represent scenarios where consumer demand is more responsive, or elastic, to changes in price ( Figure A-1 ) and less responsive, or inelastic ( Figure A-2 ). The supply curves in both figures are flat, or \"infinitely elastic\" because suppliers, in the aggregate, are able to adjust their capacity to meet whatever level of consumer demand prevails in the market. In both figures, the initial equilibrium (E), before the tax, between the prevailing market price (P) and quantity (Q) is denoted by an asterisk superscript (*). After the tax is applied, the change in equilibrium between price and quantity is denoted by a subscript ( t ). In both figures, the tax is also passed forward to consumers in the form of higher prices. Firms reduce output or some firms exit the market because participants earn zero economic profit. If the DST rate is 3%, for example, then suppliers in a competitive market are assumed to increase price by 3% minus any tax savings (i.e., deductions for excise tax payments from any income tax owed to the jurisdiction imposing the DST). ", "In Figure A-1 , imposition of a DST causes prices to rise and quantity demanded to fall in the market. The magnitude of the change in quantity is roughly similar to the change in price in the illustration below, but in a market with relatively elastic demand, the change in quantity can exceed the change in price. One cause for this phenomenon is the availability of near-substitutes. For example, if television advertisement is equally as effective as internet advertising, then a tax increasing prices of the latter will lead to a larger decline in demand as more companies purchase advertisements on television instead of the internet. ", "In Figure A-2 , imposition of a DST also causes prices to rise and quantity demanded to fall in the market. With a relatively inelastic demand curve, though, the magnitude of the change in price exceeds the change in quantity. This could be caused, for example, by a lack of substitutes (e.g., a strong preference for internet advertising or lack of alternative outlets to online marketplaces to sell goods and services). In this case, the change in price is greater than the change in quantity demanded.", "Many of the services subject to a DST are intermediate inputs to the final sales of other goods and services. This means that the method of analyzing the effects of the DST would be replicated for each stage in the supply chain. For example, if a DST increases the price of advertising a clothing company's products over the internet, then that clothing company will likely increase the cost of the clothing that it charges its customers (the retail consumer in the country levying the tax). The exact magnitude of the effects will vary depending on elasticities of supply and demand in that downstream market for retail clothing sales. In a perfectly competitive retail clothing market, though, it is anticipated that prices will increase and quantity demanded will decrease.", "In addition to effects on price and quantity prevailing within a market, DSTs can also have \"welfare effects.\" Under this method of analysis, economists consider changes to consumer surplus, producer surplus, and deadweight loss. Consumer surplus is the total benefit of value of a good or service that consumers receive beyond what they actually pay in the market. It is depicted on a supply-demand graph as the area below the demand curve and above the price. Producer surplus is the benefit to producers from selling a good or service at a price higher than their marginal cost of producing one additional unit. It is depicted on a supply-demand graph as the area above the supply curve and below the price. Deadweight loss is an inefficiency in the market that is typically introduced by government intervention, such as a tax, that results in a loss in economic activity and potential losses to consumer or producer surpluses. In a supply-demand graph of a competitive market, like the ones above, deadweight loss is depicted as the center triangle created after the imposition of a tax. ", "Welfare analyses of the DSTs depicted in Figure A-1 and Figure A-2 indicate that they reduce consumer surplus, have no effect on producer surplus, and create deadweight loss inefficiencies. Before the imposition of a DST, consumer welfare is measured as the areas a + b + c in both figures. This area indicates that consumers are receiving benefits from consuming goods or services subject to DSTs in excess of the price they actually pay for them. This could be in part because social media platforms, shopping on online marketplaces, or using search engines are free to consumers. After the imposition of a DST, though, consumer welfare is reduced to the area a . As producers increase the cost of goods and services subject to a DST, consumer welfare decreases due to higher costs. The area b becomes revenue collected by the government and the area c becomes deadweight loss in economic activity discouraged by the DST. There is no effect on producer surplus, because it does not exist in a perfectly competitive market. In a perfectly competitive market, producers are price takers and earn no economic profit.", "The main differences in Figure A-1 and Figure A-2 are due to the slope of the demand curve. The relatively inelastic demand in Figure A-2 leads to greater reductions in consumer welfare, more tax revenue collected, and smaller deadweight losses. This is because a relatively inelastic demand curve indicates that consumers are less responsive to changes in price. If consumers are unable to substitute away from goods or services subject to DSTs toward nontaxed activities, then they pay higher prices for taxed activities, and the government collects more revenue. ", "Analysis of a DST in a Monopoly Market", "Some argue that major firms in the digital economy have \"monopoly power.\" Proponents of this assertion could point out that Facebook is the largest social media platform or that Google is the predominant search engine. Others may say that digital economy platforms create network effects that prevent competition. For example, Facebook is able to maintain its status as the most popular social media platform because the value of interacting on a network with billions of users exceeds a new platform with only a few users. Similarly, Amazon might be characterized as a monopoly because many customers shop and provide reviews on its website, so a vendor looking for exposure to the largest customer base will choose to pay for the service of listing its products on that site compared to a smaller internet marketplace.", "These views may be seen, by others, as misguided because they are viewing the opposite side of the two-sided markets in the digital economy or defining the \"market\" too narrowly. As explained in the perfect competition analysis, above, Google and Facebook can be viewed as competitors in the market for selling digital advertising space or data transfer services even if they have some degree of market power on the other side of the market (e.g., search engines and social networks). Additionally, digital economy firms also compete against \"non-digital\" competitors. For example, in the larger markets for consumer product advertising, internet companies compete with advertising via television, print, and radio.", "Whether firms have supernormal profits or economic rents in an industry is often difficult to determine. In general, the presence of high accounting profits (total revenue minus total costs) is not indicative of whether a firm has profits in an economic sense. Economic profits take into consideration the opportunity costs of investing in a different income-producing activity. There is typically a risk-free portion of the return to any investment. For example, in the corporate sector this could be the average rate of return of the stock market. However, riskier investments generally require a higher potential return in order to attract capital (also known as the \"risk premium\"). The point of this distinction is that high accounting profits can be an indication of a higher risk premium. ", "For the sake of argument, Figure A-3 illustrates the effects of a DST in a hypothetical monopoly market where there is one producer. An example of this phenomenon in the digital economy could be a single firm that sells internet advertising, marketplace sales, or data transfers to a potential buyer. ", " Figure A-3 illustrates a monopoly market before the imposition of a tax. In a monopoly market, the seller still faces a downward-sloping demand curve. However, the monopolist does not have a supply curve because it does not accept the price prevailing in the market (like individual sellers in a competitive market). Instead, it sets price (P M ) and output (Q M ) at the intersection of marginal revenue (MR) and marginal cost (MC) to arrive at a profit-maximizing equilibrium (E M ) along the demand curve. The upward-sloping MC represents the fact that the monopolist firm faces increasing marginal costs as it increases the quantity supplied in the market. The monopolist also has an upward-sloping average total cost (ATC) curve, which includes the upward-sloping function of the MC curve plus added fixed costs of production. Unlike producers in the competitive markets in Figure A-1 and Figure A-2 , the monopolist in Figure A-3 earns economic profits, or rents. Economic profit per unit sold is the difference between the price charged by the monopolist (P M ) and the ATC curve, or the distance bc . That average profit per unit times the total number of units sold ( dc ) equals the total economic profit earned by the monopolist, as shown in the gray shaded box ( abcd ). ", "The effects of a DST on a monopoly market are illustrated in Figure A-4 . A DST shifts the demand curve in as consumers of taxed services respond to higher after-tax prices. As a result of the reduced demand, the marginal revenue earned by the monopolist declines, and the MR curve shifts from MR M to MR t . The equilibrium in the market shifts from E M to E t . Quantity decreases from Q M to Q t . The price faced by the consumer in the market increases from P M to P t . The price received by the monopolist, though, decreases from P M to P Mt . The economic profit earned by the monopolist under the new post-tax demand and MR t curves is represented by the gray shaded box ( fghi ). The revenue collected by the government is represented by the dashed-line area just above the monopolist's profit. Changes to deadweight loss is not illustrated on Figure A-4 , but they can be explained in qualitative terms. The presence of a monopoly market creates deadweight loss relative to a competitive market because P M is set higher than the price where supply and demand intersect in the competitive market (e.g., in Figure A-1 and Figure A-2 ). When a tax is introduced on top of the distortions caused by the monopolist, the size of the deadweight loss in the market is further increased."], "subsections": []}]}]}]}}
{"id": "R45457", "title": "Animal and Plant Health Import Permits in U.S. Agricultural Trade", "released_date": "2019-01-11T00:00:00", "summary": ["The Animal and Plant Health Inspection Service (APHIS) of the U.S. Department of Agriculture (USDA) is the U.S. government authority tasked with regulating the import, transit, and release of regulated animals, animal products, veterinary biologics, plants, plant products, pests, organisms, soil, and genetically engineered organisms. APHIS provides scientific authorities in trade partner countries and U.S. importers with animal and plant health import regulations.", "APHIS requires U.S. importers to obtain animal or plant health import permits, which verify that the items being imported meet U.S. import standards. Animal and plant health import permits certify that imports follow U.S. regulations, World Trade Organization (WTO) guidelines, and/or trading partner specific requirements. These import permits are a part of broader agreements between the United States and its trading partners within the WTO on established sanitary and phytosanitary (SPS) measures. These measures aim to protect against diseases, pests, toxins, and other contaminants. The House and Senate Agricultural Appropriations Committees appropriate funds that allow APHIS to carry out a range of activities, including those involved in issuing import permits. From FY2014 to FY2018, discretionary appropriations for APHIS have averaged nearly $900 million. About 85% of the APHIS budget is allocated to the \"Safeguarding and Emergency Preparedness/Response\" mission area, which includes the administration of health import permits and other efforts to prevent imports of pests and diseases into the United States.", "APHIS's authority over agricultural imports is largely provided by the Animal Health Protection Act (7 U.S.C. \u00a7\u00a78301 et seq.), the Plant Protection Act (7 U.S.C. \u00a7\u00a77701 et seq.), and the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (7 U.S.C. \u00a7\u00a78401). These laws authorize APHIS to administer animal and plant health import permits and conduct agricultural import inspections. APHIS works with other federal agencies, such as the Department of Homeland Security's Customs and Border Protection (CBP), to conduct animal and plant health monitoring programs and to determine if new pest or disease management programs are needed. In addition, Congress directs the Food and Drug Administration, the Food Safety and Inspection Service, and state-level Departments of Agriculture to participate in inspecting many products regulated by APHIS.", "APHIS and CBP personnel inspect shipments of imported agricultural products and certify that the required import health permits and SPS certificates accompany each shipment. One of the major flagship programs that APHIS and CBP administer together is the Agricultural Quarantine Inspection (AQI) program, in which APHIS and CBP technical staff work to ensure that the required animal or plant health permits, sanitary certificates (for animal products), and phytosanitary certificates (for plant products) accompany each shipment. APHIS transfers funds to CBP to conduct AQI activities.", "The ongoing congressional commitment to preventing plant and animal disease and pests from entering the United States through agricultural imports is evident in annual appropriations Congress provides for APHIS. Congress has directed APHIS to monitor pests and diseases and has assigned APHIS to oversee SPS activities in some free trade agreements. Moreover, legislation introduced in the 115th Congress sought to address invasive species (e.g., Areawide Integrated Pest Management, H.R. 5411) and would have directed CBP to enforce APHIS regulations to deter smuggling of plants and animals into the United States."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["In the past two decades, increasing global trade liberalization, among other factors, has led to a rise in U.S. agricultural imports. The U.S. Department of Agriculture (USDA) reports that U.S. agricultural imports reached nearly $121 billion in the 2017 calendar year ( Figure 1 ), which was twice the level of such imports in 2000. Consequently, the increasing volume of imports has heightened public concern about the potential for introducing pests and diseases. Most imported agricultural products, such as live animal and plants, are inspected by U.S. government officials and have accompanying documentation\u2014animal and plant health import permits\u2014certifying adherence to U.S. requirements. More than ever, the U.S. government depends on the proper use of these import permits to facilitate U.S. agricultural trade. ", "The USDA's Animal and Plant Health Inspection Service (APHIS) regulates the import, transit, and release of regulated animals, animal products, veterinary biologics, plants, plant products, pests, organisms, soil, and genetically engineered organisms. APHIS-issued import health permits verify that the health status and the production practices of an imported product meet U.S. import standards. APHIS works with foreign exporters, U.S. importers, and foreign governments to interpret and enforce APHIS-issued animal and plant health import permits.", "Animal and plant health import permits include components from U.S. specific regulations and World Trade Organization (WTO) guidelines. Further, these health import permits are a part of broader agreements between the United States and its trading partners in the WTO that establish sanitary and phytosanitary (SPS) standards. SPS measures aim to protect against diseases, pests, toxins, and other contaminants. Since 2000, the United States has entered into a dozen free trade agreements (FTAs), which include an SPS chapter containing specific U.S. import requirements that the partner country has agreed to recognize. Examples include specific product or processing standards, requirements for products to be produced in disease-free areas, quarantine and inspection procedures, sampling and testing requirements, residue limits for pesticides and drugs in foods, and prohibitions on certain food additives. ", "APHIS works with the Department of Homeland Security's (DHS) Customs and Border Protection (CBP), in addition to other federal agencies (e.g., Food Safety and Inspection Service, Food and Drug Administration), to enforce agricultural import regulations. CBP has authority to enforce APHIS regulations at ports of entry. APHIS and CBP personnel inspect shipments of imported agricultural products and certify that the required animal or plant health import permits and SPS documentation accompany each shipment. "], "subsections": []}, {"section_title": "APHIS Authority Over Health Import Permits", "paragraphs": ["For much of the 20 th century, animal and plant health bureaus within USDA operated independently of one another. The creation of APHIS consolidated these bureaus in 1972. There are a number of statutes (e.g., Table 1 ) that have established APHIS's authority over health import permits. However, the majority of the directives are found in two key legislative actions:", "1. The Animal Health Protection Act (AHPA, 7 U.S.C. \u00a7 \u00a7 8301 et seq .) is the primary federal law governing the protection of animal health. It gives APHIS broad authority to detect, control, or eradicate pests or diseases of livestock or poultry. AHPA consolidated all of the animal quarantine and related laws\u2014some dating back to the late 1800s\u2014and replaced them with one statutory framework. While most of the authorities contained in the consolidated AHPA were taken from existing laws, some new provisions were added to fill in gaps in legal authority. 2. The Plant Protection Act of 2000 (PPA, 7 U.S.C. \u00a7 \u00a7 7701 et seq . ) is the primary federal law governing plant pests in foreign and interstate commerce, covering agricultural commodities, plants, biological control organisms, articles that might be infested, means of transportation, and other pathways for moving pests. It authorizes APHIS to prohibit or restrict the importation, exportation, and interstate movement of plants, plant products, certain biological control organisms, noxious weeds, and plant pests. It also authorizes APHIS to inspect foreign plant imports, quarantine any state or premise infested with a new pest or noxious weed, and cooperate with states in certain control and eradication actions.", "Both AHPA and PPA give APHIS authority to inspect agricultural imports. However, after the events of September 11, 2001, congressional concern about agroterrorism\u2014the deliberate introduction of an animal or plant disease to infect food, causing economic losses and/or undermining social stability\u2014triggered the strengthening of APHIS and other federal agency agricultural inspection activities. Congress passed the Public Health Security and the Bioterrorism Preparedness and Response Act of 2002 (16 U.S.C. \u00a7\u00a73371-3378; commonly referred to as the Bioterrorism Act) to bolster protection of the nation's food and water supplies and prevent unauthorized access to certain animal and plant disease organisms in laboratories. Since the enactment of the Bioterrorism Act, APHIS-issued health permits have been required to accompany APHIS-regulated agricultural imports to facilitate trade. "], "subsections": [{"section_title": "Annual Appropriations to Conduct APHIS Health Import Permit Activities", "paragraphs": ["Overall, the House and Senate Agriculture Committees maintain jurisdiction over USDA's meat and poultry inspection programs and also other food-safety-related programs administered by other USDA agencies. These House and Senate committees direct APHIS, other federal agencies, states, industry, and professional groups to facilitate international and domestic agricultural trade. ", "The Subcommittees on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies of the House and Senate Appropriations Committees appropriate funds for APHIS. Between FY2014 and FY2018, APHIS's discretionary appropriation has averaged $877 million annually. APHIS's appropriations cover four broad mission areas: (1) Safeguarding and Emergency Preparedness/Response, (2) Agency-Wide Programs, (3) Safe Trade and International Technical Assistance, and (4) Animal Welfare. The Safeguarding and Emergency Preparedness/Response portion of the APHIS budget is responsible for monitoring animal and plant health in the United States and throughout the world and represents roughly 85% of APHIS's annual budget. Most of the animal and plant health import permit activities are housed in this mission area. ", "In May 2018, both the House and Senate appropriations committees reported bills ( H.R. 5961 , S. 2976 , 115 th Congress) that would have provided roughly $1 billion for the APHIS budget for FY2019. This amount was roughly $260 million more than Administration's FY2019 request and would have amounted to an increase of 7% from the FY2018 appropriation of $981.9 million. In August 2018, the Senate passed H.R. 6147 , which would have provided $1 billion for APHIS for FY2019. "], "subsections": []}, {"section_title": "APHIS-Issued Federal Orders", "paragraphs": ["When the APHIS administrator considers it necessary to take emergency action to protect U.S. agriculture or prevent pest or disease entry into the United States, the administrator may issue a Federal Order. Such Federal Orders are effective immediately, contain specific regulatory requirements, and remain in effect until they are revised by another Federal Order or until an interim rule on the subject is published.", "APHIS issues Federal Orders, under the PPA, which authorizes USDA to prohibit or restrict the importation or entry of any plant, plant part, or article that USDA identifies as necessary to prevent the introduction or dissemination of a plant pest into or within the United States. For example, in June 2018, APHIS released a Federal Order prohibiting the importation of pomegranate arils from Peru into the United States due to concerns about the potential importation of the Mediterranean fruit fly ( Ceratitis capitata ). This Federal Order is still in effect as of January 9, 2019. "], "subsections": []}]}, {"section_title": "Obtaining an Animal or Plant Health Import Permit", "paragraphs": ["Agricultural imports arrive to the Un ited States through five U.S. Customs Districts ( Figure 2 ). Although APHIS regulations are enforced at the ports of entry, they are typically mediated through health import permits. ", "APHIS's Plant Production Quarantine and Veterinary Services oversee the health import permit process for a \"plant health import permit\" or \"animal health import permit,\" respectively ( Figure 3 ). APHIS works with several federal agencies to issue import permits.", "U.S. importers obtain APHIS health import permits via the APHIS website (\"ePermit\") or in consultation with APHIS or state Department of Agriculture offices. Many U.S. importers use ePermit for the importation of products from abroad as well as for interstate trade. The ePermit system enables federal regulatory officials to issue, track, and verify the validity of import permits online. There is a cost to the importer associated with each ePermit application. ", "APHIS and the state-level authorities often request health import permit submissions alongside supporting documentation ( Figure 4 ). In many cases, a biosafety facility inspection is a part of the review process\u2014where a facility (e.g., laboratory, greenhouse, growth chamber) must demonstrate they can adequately and safely contain certain organisms. Health import permits are normally processed and issued within 10 business days of receipt of the application. ", "After a health import permit is obtained, APHIS and/or CBP must inspect the APHIS-regulated product. One of the flagship programs that APHIS and CBP collaborate on and administer is the Agricultural Quarantine Inspection (AQI) program. AQI ensures that the required health permits, sanitary certificates (for animal products), and phytosanitary certificates (for plant products) accompany each shipment. APHIS transfers funds to CBP to conduct AQI activities. ", "APHIS collects AQI user fees from international airline passengers, operators of commercial vehicles, cruise ship passengers, and importers of shipments requiring phytosanitary treatments. Congress appropriates funding for AQI each year (e.g., operating expenses such as rent, utilities, travel, and supplies to conduct program activities). The AQI user fees recover costs that APHIS and CBP bear to administer the inspections. USDA estimates that in FY2018, AQI collected $765 million in fees, of which it transferred $539 million to DHS and retained $226 million to augment its discretionary appropriation. In a 2013 report, the Government Accountability Office (GAO) identified a gap between fee revenues and total program costs. In its report, GAO recommended aligning the division of fees between APHIS and CBP with their respective costs and that the two agencies ensure that fees are collected when due. In February 2018, APHIS announced it had implemented all of GAO's recommendations. "], "subsections": []}, {"section_title": "Role of Other Government Entities in Plant and Animal Imports", "paragraphs": ["Importers must obtain APHIS-issued health import permits before beginning the inspection process. In addition to APHIS, Congress has directed other federal agencies and state-level Departments of Agriculture (see Table 2 ) to participate in inspecting APHIS-regulated products:", "The Food and Drug Administration (FDA) has taken steps to protect the public from terrorist attacks on the U.S. food supply and other food-related emergencies in collaboration with DHS. Since 2003, FDA has advised U.S. importers to submit \"prior notice\" online forms to FDA before food is imported or offered for import into the United States. Unlike APHIS, FDA does not enforce industry guidelines, but FDA does review APHIS-issued import permits to verify the disease or pest status of the agricultural product. The Food Safety Modernization Act (FSMA; P.L. 111-353 ) created new rules governing FDA's food inspection regime of both domestic and imported foods under the agency's jurisdiction. CBP and APHIS inspect agricultural products together through the AQI program. CBP officials require U.S. importers to present an APHIS-issued import permit before conducting inspections. The F ood Safety and Inspection Service (FSIS) has regulatory oversight of meat, poultry, and some egg products. FSIS often requests APHIS-issued health import permits before proceeding with meat inspections. In the case of FSIS-regulated products, FSIS requires APHIS-issued animal health import permits to ensure that the meat and/or poultry ingredients in such food products are prepared under FSIS inspection or in a foreign establishment certified by a foreign inspection system approved by FSIS. S tate-l evel D epartments of A griculture enforce APHIS regulations. States have different animal and plant health import restrictions that apply to interstate trade. Some states have heightened restrictions based on disease and pest detections. Similar to FSIS, state-level regulators typically request APHIS-issued animal or plant health import permits before conducting their inspections. State-level Departments of Agriculture often coordinate with APHIS and CBP directly (e.g., when a state detects a disease outbreak). "], "subsections": []}, {"section_title": "Congressional Activities", "paragraphs": ["Congress has long been involved in efforts to prevent the entry of pest and disease threats into the United States from agricultural imports. This oversight has manifest in various congressional actions, including continuing to provide APHIS with appropriations to monitor pests and diseases, introducing legislation to address invasive species (e.g., Areawide Integrated Pest Management, H.R. 5411 , 115 th Congress), and directing CBP to enforce APHIS regulations to deter agricultural smuggling into the United States. APHIS-issued animal and plant health import permits can be a tool to prevent agricultural import threats to the United States. The sections that follow summarize selected issues that Congress has addressed by directing APHIS to undertake a specific role, assigning the agency with specific responsibilities, or authorizing it carry out certain actions."], "subsections": [{"section_title": "Pests and Diseases", "paragraphs": ["In the event of a U.S. disease outbreak or pest infestation, APHIS is designated to be the lead U.S. agency for informing the international community (such as to the World Organization for Animal Health, also known as \"OIE\"). Typically, APHIS would directly contact the partner country's scientific authority to explain the nature and extent of the outbreak. In most cases, APHIS and officials of the partner country observe the SPS guidelines agreed upon under the WTO framework or, in some cases, the SPS chapters in individual FTAs. Responses to a pest or disease outbreak can include a complete ban on the importation of U.S. products impacted by the pest/disease. Under certain circumstances, a \"regionalization\" protocol may be applied in which a specific exporting region within the United States may be recognized as disease- or pest-free. ", "In the event of a trading partner experiencing a disease outbreak or pest infestation, the notification process is similar to a U.S. outbreak (e.g., informing OIE). APHIS informs U.S. importers of the trading partner outbreak. U.S. importers work with APHIS to verify that the health import permit reflects the disease or pest status of the exporting country. APHIS provides guidance to U.S. importers if their health import permits would be accepted (e.g., following SPS protocol of regionalization) or rejected (e.g., ban products from an infected trading partner). ", " Table 3 provides a selected listing of prominent APHIS-monitored diseases and pests that pose a threat to U.S. agriculture. Among these are disease concerns, including avian influenza and foot-and-mouth disease, and invasive plant pests such as the Asian longhorned beetle and the emerald ash borer. In some instances, agricultural imports (or even interstate shipments) can arrive into AQI with pests and diseases that could impact public health or U.S. agricultural production systems.", "Congress has sometimes directed APHIS to address certain diseases through the annual appropriations process. For example, the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), includes a general provision providing APHIS with an additional $5.5 million\u2014to remain available until the end of FY2019\u2014to fund a multiple-agency response to citrus greening disease. "], "subsections": []}, {"section_title": "Agroterrorism", "paragraphs": ["Agroterrorism is the deliberate introduction of an animal or plant disease with the objective of infecting food, causing economic losses and/or undermining social stability. Requiring U.S. importers to obtain APHIS-issued health import permits is one way that APHIS and the CBP protect against agroterrorism. Permits provide APHIS and CBP inspectors an opportunity to conduct random sampling to assist in disease and pest identification or to detect other potential threats. ", "Congress has taken steps to address potential harmful imports (\"select agents\") that could impact public health or animal/plant health through the Bioterrorism Act by directing the Department of Health and Human Services's (HHS) Centers for Disease Control and Prevention (CDC) and APHIS to enforce the Select Agents and Toxins List under the Federal Select Agent Program. The agents and toxins on this list have been determined to pose a threat to human and animal health, plant health, or animal and plant products. Some of these agents and toxins are overseen by HHS, others by USDA, and certain ones by both agencies. "], "subsections": []}, {"section_title": "Invasive Species", "paragraphs": ["An invasive species is a nonnative (also known as an alien ) species that does or is likely to cause economic or environmental harm or harm to human health. Invasive species include plants, animals, and microbes. The introduction of invasive species into the United States\u2014whether deliberate or unintentional\u2014can threaten native animal and plant communities, lead to ecosystem disruptions, and contribute to extinctions of native species. Invasive species can also impact biodiversity and alter habitats and can result in the introduction of new pests and diseases. An estimated 50,000 non-native invasive animal and plant species have been introduced to the United States for over a century, with a 2011 study citing total costs exceeding $100 billion annually\u2014including economic costs related to damages as well as management, mitigation, and recovery activities. ", "APHIS collects information on invasive species and monitors their impacts (e.g., on agricultural production, forest lands). The information is updated and shared with AQI and ports of entries. The health import permits provide the APHIS/CBP officials specific guidelines (e.g., identifying specific pests), depending on the origination of the product, that facilitate detection during inspecting or random sampling of the imported agricultural products. U.S. importers also work with APHIS and other federal agencies (e.g., the Environmental Protection Agency) to obtain regulations on preventing an invasive species infestation (e.g., vessel ballast water discharge). ", "Several statutes provide federal agencies with authorities to address invasive species in the United States. Some in Congress have expressed interest in pursuing legislation to reduce the prevalence of invasive species, such as through the introduction of \"area-wide integrated pest management\" (e.g., H.R. 5411 , 115 th Congress), a pest management strategy that is applied within a geographical area. This bill would have expanded the USDA Integrated Research, Education, and Extension Competitive Grants Program for qualified area-wide integrated pest management projects. "], "subsections": []}, {"section_title": "Smuggling", "paragraphs": ["Over the past 30 years, there has been a steady increase in the movement of people and agricultural products around the world. The volume of smuggled and improperly imported agricultural products entering the United States has been a congressional concern. Products smuggled into the United States can harbor exotic plant and animal pests, diseases, or invasive species that could damage domestic crops, livestock, and the environment. If APHIS identifies an illegally imported product or a regulatory violation, it may seize the item and pursue civil and criminal penalties, if warranted. APHIS encourages distributors and retailers to purchase products that have been imported through legal channels that are typically accompanied by APHIS health import permits.", "One way that Congress has attempted to prevent agricultural smuggling is through the Lacey Act. The Lacey Act dates from 1900 and prohibits the importation of any plant\u2014with limited exceptions\u2014that is taken or traded in violation of domestic or international laws. The act requires declarations\u2014in addition to the APHIS-issued plant health import permits\u2014for imported shipments of most plants or plant products. APHIS works with CBP, the U.S. Coast Guard (e.g., for fisheries violations), the National Marine Fisheries Service, the Federal Bureau of Investigation, the U.S. Forest Service, and U.S. Immigration and Customs Enforcement to enforce the Lacey Act through inspection or monitoring activities. APHIS's role in this context is to collect APHIS-issued health import permits, manage the declaration requirement, provide guidance to importers regarding the declaration, perform compliance checks, and provide enforcement agencies with information to assist their investigations. The declaration is to be made by the importer at the time of import. According to USDA, both CBP and APHIS activities have contributed to an increase in the number of declarations, with approximately 1 million declarations in FY2017, up roughly 300,000 from FY2016. This increase has coincided with the introduction of the online system in lieu of paper-based declarations. "], "subsections": []}]}]}}
{"id": "R43317", "title": "Cybersecurity: Legislation and Hearings, 115th-116th Congresses", "released_date": "2019-05-02T00:00:00", "summary": ["Most major cybersecurity legislative provisions were enacted prior to 2002, despite many recommendations having been made over the past decade. More recently, in the 115th and 116th Congresses, cybersecurity legislation has received either committee or floor action or final passage, and both chambers have held multiple hearings.", "In the 116th Congress, a number of House and Senate bills have received consideration, and hearings have been held by committees in each chamber.", "In the 115th Congress, 31 bills received some type of action (committee consideration or passage by one or both chambers). Five bills became public law. The House held 54 hearings on cybersecurity issues and the Senate held 40 hearings."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Cybersecurity Legislation and Hearings in the 116th and 115th Congresses", "paragraphs": ["This report provides links to cybersecurity-related bills with some type of committee, floor, or chamber action (i.e., action subsequent to introduction). It also provides links to cybersecurity-related hearings. Table 1 lists House bills in the 116th Congress. Table 2 lists Senate bills in the 116th Congress. Table 3 lists House bills in the 115th Congress. Table 4 lists Senate bills in the 115th Congress."], "subsections": [{"section_title": "116th Congress: Legislative Action", "paragraphs": ["In the 116 th Congress, the House has passed four cybersecurity-related bills and the Senate has given varying levels of consideration to four others, passing one. See Table 1 for a list of House bills and Table 2 for a list of Senate bills in the 116 th Congress ."], "subsections": []}, {"section_title": "115th Congress: Legislative Action", "paragraphs": ["Thirty-one bills received committee consideration or passed one or both chambers in the 115 th Congress. Five bills became public laws: ", "On September 28, 2018, the Department of Energy Research and Innovation Act was signed into law ( P.L. 115-246 ). The law establishes a Department of Energy policy for science and energy research and development programs; reforms National Laboratory management and technology transfer programs; and directs DOE to report to Congress on integrated research programs in cybersecurity and national security, among other issues.", "On August 13, 2018, the John S. McCain National Defense Authorization Act for Fiscal Year 2019 was signed into law ( P.L. 115-232 ). The bill authorizes appropriations and sets forth policies regarding Department of Defense's military activities, including cybersecurity matters.", "On December 12, 2017, the President signed the National Defense Authorization Act for Fiscal Year 2018 ( P.L. 115-91 ), which establishes several cybersecurity efforts and new rules and programs related to information security. These include an official ban on Kaspersky Lab software (Section 1634); definition by the President of \"cyberwar\" (Section 1633); the Pentagon's reexamination of the Defense Department's internal organizational structure surrounding its cybersecurity-related missions (Section 1641, Section 1644, and others); and the National Science Foundation and Office of Personnel Management's launch of a joint pilot scholarship program aimed at educating and recruiting talent directly out of universities (Section 1649).", "On November 21, 2017, the FITARA Enhancement Act of 2017 became law ( P.L. 115-88 ). Among other things, it requires the chief information officer of each covered agency for information technology to conduct a risk management review of those investments that have received a high-risk rating for four consecutive quarters.", "On November 2, 2017, Congress passed the Strengthening State and Local Cyber Crime Fighting Act of 2017 ( P.L. 115-76 ), which authorizes a National Computer Forensics Institute within the U.S. Secret Service. The institute is to disseminate information related to the investigation and prevention of cyber and electronic crime and related threats."], "subsections": []}, {"section_title": "CRS Products: Legislation", "paragraphs": ["CRS Report R43831, Cybersecurity Issues and Challenges: In Brief , by Eric A. Fischer CRS In Focus IF10610, Cybersecurity Legislation in the 113th and 114th Congresses , by Eric A. Fischer CRS Report R44069, Cybersecurity and Information Sharing: Comparison of H.R. 1560 (PCNA and NCPAA) and S. 754 (CISA) , by Eric A. Fischer CRS Report R43996, Cybersecurity and Information Sharing: Comparison of H.R. 1560 and H.R. 1731 as Passed by the House , by Eric A. Fischer and Stephanie M. Logan CRS Report R42114, Federal Laws Relating to Cybersecurity: Overview of Major Issues, Current Laws, and Proposed Legislation , by Eric A. Fischer CRS Report R43821, Legislation to Facilitate Cybersecurity Information Sharing: Economic Analysis , by N. Eric Weiss "], "subsections": []}]}, {"section_title": "Hearings in the 116th Congress", "paragraphs": ["The following tables list c ybersecurity hearings in the 116 th Congress . Table 5 lists House hearings arranged by date in reverse chronological order. Table 6 lists House hearings arranged by committee. Table 7 lists Senate hearings arranged by date in reverse chronological order , and Table 8 lists Senate hearings arranged by committee. CRS identified these hearings as being primarily about cybersecurity or related issues. However, no single, objective selection criterion was available for CRS to use in identifying which hearings to include. The list of hearings should therefore not be considered definitive.", "Table document titles are active links to the committee's website for that particular hearing ."], "subsections": []}, {"section_title": "Hearings in the 115th Congress", "paragraphs": [" Table 9 lists House hearings arranged by date in reverse chronological order , and Table 10 lists House hearings arranged by committee. Table 11 lists Senate hearings by date. Table 12 lists Senate hearings arranged by committee. CRS identified these hearings as being primarily about cybersecurity or related issues. However, no single, objective selection criterion was available for CRS to use in identifying which hearings to include. The list of hearings should therefore not be considered definitive.", "In the tables , the document titles are active links to the committee's website for that particular hearing ."], "subsections": []}]}}
{"id": "R45547", "title": "U.S. Foreign Assistance to Latin America and the Caribbean: FY2019 Appropriations", "released_date": "2019-03-01T00:00:00", "summary": ["The United States provides foreign assistance to Latin American and Caribbean nations to support development and other U.S. objectives. U.S. policymakers have emphasized different strategic interests in the region at different times, from combating Soviet influence during the Cold War to promoting democracy and open markets since the 1990s. The Trump Administration has sought to reduce foreign aid significantly and refocus U.S. assistance efforts in the region to address U.S. domestic concerns, such as irregular migration and transnational crime.", "FY2019 Budget Request", "For FY2019, the Trump Administration requested $1.1 billion for Latin America and the Caribbean through foreign assistance accounts managed by the State Department and the U.S. Agency for International Development (USAID). That amount would have been $581 million, or 34%, less than the estimated $1.7 billion of U.S. assistance the region received in FY2018. The proposal would have cut funding for every type of assistance and nearly every Latin American and Caribbean nation. The Trump Administration also proposed eliminating the Inter-American Foundation\u2014a small, independent U.S. foreign assistance agency that promotes grassroots development in the region\u2014and consolidating its programs into USAID.", "The Administration's efforts to scale back U.S. assistance could have significant implications for U.S. policy in Latin America and the Caribbean. Faced with potential cuts, U.S. agencies could accelerate efforts to transition countries in the region away from traditional development assistance toward other forms of bilateral engagement. Reductions in State Department-managed security assistance could lead to the Department of Defense taking on a larger role in U.S. security cooperation. Moreover, many argue that reductions in foreign aid, combined with other policy shifts, could contribute to a relative decline in U.S. influence in the region.", "Legislative Developments", "President Trump signed into law the Consolidated Appropriations Act, 2019 (P.L. 116-6), on February 15, 2019. Division F of the act\u2014the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2019\u2014includes funding for foreign assistance programs in Latin America and the Caribbean. The measure was preceded by three short-term continuing resolutions (P.L. 115-245, P.L. 115-298, and P.L. 116-5), which funded foreign assistance programs at the FY2018 level, and a 35-day lapse in appropriations from December 22, 2018, to January 25, 2019. Although the House and Senate Appropriations Committees had approved their FY2019 foreign assistance appropriations measures (H.R. 6385 and S. 3108, respectively) in June 2018, neither bill received floor consideration prior to the end of the 115th Congress.", "P.L. 116-6 and the accompanying joint explanatory statement do not specify appropriations levels for every Latin American and Caribbean nation. Nevertheless, the amounts designated for key U.S. initiatives in Central America, Colombia, and Mexico significantly exceed the Administration's request. The act provides", "$527.6 million to continue implementation of the U.S. Strategy for Engagement in Central America, which is $92 million more than the Administration requested but $99 million less than Congress appropriated for the initiative in FY2018. at least $418.3 million to support the peace process and security and development efforts in Colombia, which is $153 million more than the Administration requested and $27 million more than Congress appropriated for Colombia in FY2018. $162.7 million to support security and rule-of-law efforts in Mexico, which is $84 million more than the Administration requested and $10 million more than Congress appropriated for Mexico in FY2018."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Foreign assistance is one of the tools the United States employs to advance U.S. interests in Latin America and the Caribbean. The focus and funding levels of aid programs change along with broader U.S. policy goals. Current aid programs reflect the diverse needs of the countries in the region (see Figure 1 for a map of Latin America and the Caribbean). Some countries receive the full range of U.S. assistance as they struggle with political, socioeconomic, and security challenges. Others have made major strides in consolidating democratic governance and improving living conditions; these countries no longer receive traditional U.S. development assistance but typically receive some U.S. support to address security challenges, such as transnational crime. ", "Congress authorizes and appropriates foreign assistance to the region and conducts oversight of aid programs and the executive branch agencies charged with managing them. The Trump Administration has proposed significant reductions in foreign assistance expenditures to shift resources to other budget priorities. The Administration also is reassessing the objectives of U.S. foreign assistance efforts, including those in Latin America and the Caribbean. However, Congress would have to approve any shifts in aid funding levels or priorities.", "This report provides an overview of U.S. assistance to Latin America and the Caribbean. It examines historical and recent trends in aid to the region; the Trump Administration's FY2019 budget request for aid administered by the State Department, the U.S. Agency for International Development (USAID), and the Inter-American Foundation; and FY2019 foreign aid appropriations legislation. It also analyzes how the Administration's efforts to scale back assistance could affect U.S. policy in Latin America and the Caribbean."], "subsections": []}, {"section_title": "Trends in U.S. Assistance to Latin America and the Caribbean", "paragraphs": ["The United States has long been a major contributor of foreign assistance to countries in Latin America and the Caribbean. Between 1946 and 2017, the United States provided the region with more than $88 billion ($181 billion in constant 2017 dollars) of assistance. U.S. assistance to the region spiked in the early 1960s following the introduction of President John F. Kennedy's Alliance for Progress, an anti-poverty initiative that sought to counter Soviet and Cuban influence in the aftermath of Fidel Castro's 1959 seizure of power in Cuba. After a period of decline, U.S. assistance to the region increased again following the 1979 assumption of power by the leftist Sandinistas in Nicaragua. Throughout the 1980s, the United States provided considerable support to Central American governments battling leftist insurgencies to prevent potential Soviet allies from establishing political or military footholds in the region. U.S. aid flows declined in the mid-1990s, following the dissolution of the Soviet Union and the end of the Central American conflicts (see Figure 2 ).", "U.S. foreign assistance to Latin America and the Caribbean began to increase once again in the late 1990s and remained on a generally upward trajectory through 2010. The higher levels of assistance were partially the result of increased spending on humanitarian and development assistance. In the aftermath of Hurricane Mitch in 1998, the United States provided extensive humanitarian and reconstruction assistance to several countries in Central America. The establishment of the President's Emergency Plan for AIDS Relief in 2003 and the Millennium Challenge Corporation in 2004 also provided a number of countries in the region with new sources of U.S. assistance. In addition, the United States provided significant assistance to Haiti in the aftermath of a massive earthquake in 2010.", "Increased funding for counternarcotics and security programs also contributed to the rise in U.S. assistance. Beginning with President Bill Clinton and the 106 th Congress in FY2000, successive Administrations and Congresses provided substantial amounts of foreign aid to Colombia and its Andean neighbors to combat drug trafficking in the region and end Colombia's long-running internal armed conflict. Spending received another boost in FY2008, when President George W. Bush joined with his Mexican counterpart to announce the M\u00e9rida Initiative, a package of U.S. counter-drug and anti-crime assistance for Mexico and Central America. In FY2010, Congress and the Obama Administration split the Central American portion of the M\u00e9rida Initiative into a separate Central America Regional Security Initiative (CARSI) and created a similar program for the countries of the Caribbean known as the Caribbean Basin Security Initiative (CBSI).", "U.S. assistance to Latin America and the Caribbean began to decline again in FY2011. Although the decline was partially the result of reductions in the overall U.S. foreign assistance budget in the aftermath of the U.S. recession, it also reflected changes in the region. Due to stronger economic growth and more effective social policies, the percentage of people living in poverty in Latin America fell from 45% in 2002 to 30% in 2017. Some nations, such as Argentina, Brazil, Chile, Colombia, Mexico, and Uruguay, are now in a position to provide technical assistance to other countries in the region. Other nations, such as Bolivia and Ecuador, have expelled U.S. personnel and opposed U.S. assistance projects, leading to the closure of USAID offices. Collectively, these changes have resulted in the U.S. government concentrating foreign assistance resources in fewer countries and sectors. Aid levels have rebounded since FY2014, largely due to a renewed focus on Central America in response to recent migration trends, but appropriations remain below the FY2008-FY2013 average."], "subsections": []}, {"section_title": "Trump Administration's FY2019 Foreign Assistance Budget Request5", "paragraphs": ["The Trump Administration requested $1.1 billion for Latin America and the Caribbean through foreign assistance accounts managed by the State Department and USAID in FY2019. That amount would have been $581 million, or 34%, less than the estimated $1.7 billion of assistance Congress appropriated for the region in FY2018 (see Table 1 ). The Administration also proposed eliminating the Inter-American Foundation\u2014a small, independent U.S. foreign assistance agency that promotes grassroots development in Latin America and the Caribbean\u2014and consolidating its programs into USAID. The proposed reductions for the region were slightly greater than the 28% reduction proposed for the global foreign aid budget. Congress ultimately did not adopt many of the Administration's proposed cuts (see \" Legislative Developments ,\" below)."], "subsections": [{"section_title": "Foreign Assistance Categories and Accounts7", "paragraphs": ["About $515.9 million (46%) of the Administration's proposed FY2019 foreign aid budget for Latin America and the Caribbean was requested through a new Economic Support and Development Fund (ESDF). The ESDF foreign assistance account would have consolidated aid that currently is provided through the Development Assistance (DA) and Economic Support Fund (ESF) accounts to support democracy, the rule of law, economic reform, education, agriculture, and natural resource management. Whereas the DA account is often used for long-term projects to foster broad-based economic progress and social stability in developing countries, the ESDF account, like the ESF account, would focus more on countries and programs that are deemed critical to short-term U.S. security and strategic objectives. The FY2019 request included $296.4 million (36%) less funding for the ESDF account than was provided to the region through the DA and ESF accounts combined in FY2018.", "Another $151.4 million (14%) of the Administration's FY2019 request for the region would have been provided through the two Global Health Programs (GHP) accounts. This amount includes $119.2 million requested through the State Department GHP account for HIV/AIDS programs and $32.2 million requested through the USAID GHP account to support maternal and child health, nutrition, and malaria programs. Under the FY2019 request for the region, funding for the State Department GHP account would have declined by $17.5 million (13%) and funding for the USAID GHP account would have declined by $31.2 million (49%) compared with the FY2018 estimate.", "The remaining $442.9 million (40%) of the Administration's FY2019 request for Latin America and the Caribbean would have supported security assistance programs, including the following:", "$390 million requested through the International Narcotics Control and Law Enforcement (INCLE) account for counter-narcotics and civilian law enforcement efforts and projects intended to strengthen judicial institutions. INCLE funding for the region would have declined by $152.2 million (28%) compared with the FY2018 estimate. $21.9 million requested through the Nonproliferation, Anti-terrorism, Demining, and Related Programs (NADR) account, which funds efforts to counter global threats, such as terrorism and proliferation of weapons of mass destruction, and humanitarian demining programs. NADR funding would have declined by $1.7 million (7%) compared with the FY2018 estimate. $11.1 million requested through the International Military Education and Training (IMET) account to train Latin American and Caribbean military personnel. IMET funding would have declined by $1.5 million (12%) compared with the FY2018 estimate. $20 million requested through the Foreign Military Financing account to provide U.S.-made defense equipment to Colombia. FMF funding would have declined by $66 million (77%) compared with the FY2018 estimate. "], "subsections": []}, {"section_title": "Major Country and Regional Programs", "paragraphs": ["The Trump Administration's FY2019 foreign assistance request would have reduced funding for nearly every country and regional program in Latin America and the Caribbean (see Table 2 ). Some of the most notable reductions that the Administration proposed are discussed below.", "The FY2019 request included $435.5 million to continue the U.S. Strategy for Engagement in Central America, which would have been a $191 million (30%) cut compared with the FY2018 estimate. The strategy is designed to address the underlying conditions driving irregular migration from the Central America to the United States by promoting good governance, economic prosperity, and improved security in the region. The request included $252.8 million for CARSI (-21%), $45.7 million for El Salvador (-21%), $69.4 million for Guatemala (-42%), $65.8 million for Honduras (-18%), and $1.8 million combined for Belize, Costa Rica, and Panama (-82%). It did not include any democracy assistance to support civil society groups in Nicaragua; such assistance totaled $10 million in FY2018.", "Colombia would have remained the single largest recipient of U.S. assistance in Latin America and the Caribbean under the Administration's FY2019 request; however, aid would have fallen to $265.4 million\u2014a $125.8 million (32%) reduction compared with the FY2018 estimate. Colombia has received significant amounts of U.S. assistance to support counternarcotics and counterterrorism efforts since FY2000. The FY2019 request included funds to support implementation of the Colombian government's peace accord with the Revolutionary Armed Forces of Colombia (FARC); it sought to foster reconciliation within Colombian society, expand state presence to regions historically under FARC control, and support rural economic development in marginalized communities. The request also included funds to support Colombia's drug eradication and interdiction efforts.", "Haiti, which has received high levels of aid for many years as a result of its significant development challenges, would have remained the second-largest recipient of U.S. assistance in the region in FY2019 under the Administration's request. U.S. assistance increased significantly after a massive earthquake struck Haiti in 2010 but has gradually declined from those elevated levels. The Administration's FY2019 request would have provided $170.5 million to Haiti to improve food security, increase economic opportunity, promote good governance, and address health challenges (particularly HIV/AIDS). This would have been a $13.9 million (8%) cut compared with the FY2018 estimate.", "Mexico would have received $78.9 million of assistance under the FY2019 request, which would have been a $73.8 million (48%) cut compared with the FY2018 estimate. Mexico traditionally had not been a major U.S. aid recipient due to its middle-income status, but it began receiving larger amounts of counternarcotics and anti-crime assistance through the M\u00e9rida Initiative in FY2008. The Administration's FY2019 request for Mexico included funds to strengthen the rule of law; secure borders and ports; and combat transnational organized crime, including opium poppy cultivation and heroin production.", "The FY2019 request included $36.2 million for the CBSI, which would have been a $21.5 million (37%) cut compared with the FY2018 estimate. The CBSI funds maritime and aerial security cooperation, law enforcement capacity building, border and port security, justice-sector reform, and crime prevention programs in the Caribbean."], "subsections": []}, {"section_title": "Inter-American Foundation", "paragraphs": ["In addition to the proposed reductions to State Department and USAID-managed assistance for the region, discussed above, the Trump Administration's FY2019 budget request proposed eliminating the Inter-American Foundation (IAF) and consolidating its programs into USAID. The IAF is an independent U.S. foreign assistance agency established through the Foreign Assistance Act of 1969 ( 22 U.S.C. \u00a7290f ). Congress created the agency after conducting a comprehensive review of previous assistance efforts and determining that programs at the government-to-government level had largely failed to promote social and civic change in the region despite fostering economic growth. With annual appropriations of $22.5 million in recent years, the IAF provides grants and other targeted assistance directly to the organized poor to foster economic and social development and to encourage civic engagement in their communities. The IAF is active in 20 countries in the region\u2014including eight countries in which USAID no longer has a presence\u2014and has focused particularly on migrant-sending communities in Central America since 2014. ", "The Trump Administration asserted that merging the IAF's small grants programs into USAID would \"better integrate them with USAID's existing global development programs, more cohesively serve U.S. foreign policy objectives, and increase organizational efficiencies through reducing duplication and overhead.\" The FY2019 request included $3.5 million to conduct an orderly IAF closeout and $20 million under USAID's Latin America and Caribbean Regional program to continue providing small grants to poor and remote communities throughout the region (see Table 3 ). Opponents of the merger noted that Congress specifically created the IAF as an alternative to other U.S. agencies. They argued that USAID would not be able to maintain the IAF's distinct model and flexibility, which have allowed it to invest in innovative projects and work with groups that otherwise would be unable or unwilling to partner with the U.S. government."], "subsections": []}]}, {"section_title": "Legislative Developments", "paragraphs": ["On February 15, 2019, nearly four and a half months into the fiscal year, President Trump signed into law the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ). Division F of the act\u2014the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2019\u2014includes funding for foreign assistance programs in Latin America and the Caribbean. The measure was preceded by three short-term continuing resolutions ( P.L. 115-245 , P.L. 115-298 , and P.L. 116-5 ), which funded foreign assistance programs at the FY2018 level, and a 35-day lapse in appropriations from December 22, 2018, to January 25, 2019. Although the House and Senate Appropriations Committees had approved their FY2019 foreign assistance appropriations measures ( H.R. 6385 and S. 3108 , respectively) in June 2018, neither bill received floor consideration prior to the end of the 115 th Congress.", "P.L. 116-6 and the accompanying joint explanatory statement do not specify foreign assistance appropriations levels for every Latin American and Caribbean nation. Nevertheless, the amounts designated for key U.S. initiatives in Central America, Colombia, and Mexico significantly exceed the Administration's request (see Table 4 ).", "Central America. According to the joint explanatory statement, the act provides $527.6 million to continue implementation of the U.S. Strategy for Engagement in Central America. That amount is $92 million more than the Administration requested but $99 million less than Congress appropriated for the initiative in FY2018. Unlike previous years, the measure provides the Secretary of State with significant flexibility to decide how to allocate the funds among the nations of the region. The joint explanatory statement notes that the Secretary of State should take into account the political will of Central American governments, including their demonstrated commitment to implement reforms \"to reduce illegal migration and reduce corruption and impunity.\"", "Colombia. The act provides \"not less than\" $418.3 million for Colombia, which is nearly $153 million more than the Administration requested and $27 million more than Congress appropriated in FY2018. The joint explanatory statement notes that the additional funding for FY2019, appropriated through the INCLE account, is intended to \"bolster Colombia's drug eradication and interdiction efforts and enhance rural security.\"", "Mexico . According to the joint explanatory statement, the act provides $162.7 million for Mexico. That amount is nearly $84 million more than the Administration requested and $10 million more than Congress appropriated for Mexico in FY2018. The additional funding for FY2019 is intended to support security and rule-of-law efforts, such as \"programs to assist the Government of Mexico in securing its borders and reducing poppy cultivation and heroin and synthetic drug production.\"", "Venezuela. The act provides \"not less than\" $17.5 million for programs to promote democracy and the rule of law in Venezuela. The joint explanatory statement notes that the legislation also includes assistance for Venezuelan refugees and migrants who have been forced to leave the country.", "Inter-American Foundation. The act provides $22.5 million for the IAF, which is the same amount Congress appropriated for the agency in FY2018. The joint explanatory statement designates an additional $10 million, appropriated through the DA account, as a transfer to the IAF to carry out programs in Central America."], "subsections": []}, {"section_title": "Implications for U.S. Policy", "paragraphs": ["The Trump Administration's efforts to scale back U.S. foreign assistance could have significant implications for U.S. policy in Latin America and the Caribbean in the coming years. In particular, they could accelerate U.S. efforts to transition countries in the region away from traditional development assistance and toward other forms of bilateral engagement. They also could result in the Department of Defense (DOD) taking on a larger role in U.S. security cooperation with the region. Moreover, many argue the Administration's proposed foreign assistance cuts, combined with other U.S. policy shifts and the region's growing economic ties with other countries, such as China, could contribute to a relative decline in U.S. influence in Latin America and the Caribbean."], "subsections": [{"section_title": "Aid Transitions", "paragraphs": ["Over the past three decades, many Latin American and Caribbean countries have made major strides in consolidating democratic governance and improving living conditions for their citizens. As nations have achieved more advanced levels of development, the U.S. government has reduced the amount of assistance it provides to them while attempting to sustain long-standing relationships through other forms of engagement. Budget cuts often have accelerated this process by forcing U.S. agencies to refocus their assistance efforts on fewer countries. In the mid-1990s, for example, budget constraints compelled USAID to close its field offices in Argentina, Belize, Chile, Costa Rica, and Uruguay. Similarly, budget cuts in the aftermath of the 2007-2009 U.S. recession contributed to USAID's decision to close its field offices in Guyana and Panama.", "The Trump Administration's desire to reduce foreign assistance funding could contribute to a new round of aid transitions. The FY2019 budget request would have zeroed out traditional development assistance for Brazil, Jamaica, and Nicaragua, and would have reduced it significantly for several other countries in the region. Although it appears as though many of those reductions were not enacted in the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), the Administration may push for further cuts in the coming years. The Administration's National Security Strategy, released in December 2017, asserts that the United States \"will shift away from a reliance on assistance based on grants to approaches that attract private capital and catalyze private sector activity.\" Likewise, USAID has begun to reorient all of its country partnerships around the concept of \"self-reliance,\" placing a greater emphasis on supporting countries' abilities to plan, finance, and implement solutions to their own development challenges.", "Some development experts caution that such transitions should be done in a strategic manner to ensure that partner countries are able to sustain the progress that has been made with past U.S. investments and to prevent ruptures in bilateral relations that could be exploited by competing powers or compromise U.S. interests. These experts argue that successful transitions require careful planning and close coordination across the U.S. government, as well as with partner-country governments, local stakeholders, and other international donors. In their view, a timeline of three to five years, at a minimum, is necessary for the transition process.", "A decision to no longer appropriate new foreign aid funds for a given country would not necessarily lead to an abrupt end to ongoing U.S. assistance programs. In recent years, Congress has appropriated most aid for Latin America and the Caribbean through foreign assistance accounts that provide the State Department and USAID with up to two fiscal years to obligate the funds and an additional four years to expend them. As a result, U.S. agencies often have a pipeline of previously appropriated funds available to be expended on assistance programs.", "If aid transitions do occur, the United States could remain engaged with its partners in the region in several ways. As large-scale development programs are closed out, the U.S. government could use smaller, more nimble programs, such as those managed by the IAF, to maintain its presence in remote areas and continue to build relationships with local leaders. As grant assistance is withdrawn, the U.S. government could help partner countries mobilize private capital by entering into trade and investment agreements or by providing loan guarantees and technical assistance through the newly authorized U.S. International Development Finance Corporation (IDFC). As former aid recipients look to share their development expertise with other nations, the U.S. government could enter into trilateral cooperation initiatives to jointly fund and implement programs in third countries that remain priorities for U.S. assistance. ", "Congress has demonstrated an interest in influencing the pace and shape of aid transitions. The Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) directed the USAID Administrator to submit a report to Congress describing the conditions and benchmarks under which aid transitions may occur, the actions required by USAID to facilitate such transitions, descriptions of the associated costs, and plans for ensuring post-transition development progress. The report, submitted in October 2018, notes that USAID has selected 17 publicly available, third-party metrics to help the agency assess the relative self-reliance of every country. If, after taking into account additional country-specific information, the agency determines a country is ready to transition, USAID is to begin an in-depth, consultative assessment process to consider potential models for continued partnership. The results of that process are to inform an implementation plan that will lay out the activities, resources, and sequencing needed to ensure a successful transition. Jamaica is one of two countries worldwide that USAID is using to test the new strategic transition process.", "Congress could require USAID to provide additional information as the agency continues to develop its framework for strategic transitions and moves forward with the pilot project in Jamaica. For example, in the 115 th Congress, H.R. 6385 would have required the USAID Administrator to regularly consult with Congress and development stakeholders on \"efforts to transition nations from assistance recipients to enduring diplomatic, economic, and security partners.\""], "subsections": []}, {"section_title": "Changes in Security Cooperation", "paragraphs": ["The Trump Administration's approach toward Latin America and the Caribbean has focused heavily on U.S. national security objectives. For example, the Administration described the FY2019 foreign assistance request for the region as an effort to \"break the power of transnational criminal organizations and networks; shut down the illicit pathways used to traffic humans, drugs, money and weapons; and address the underlying causes that contribute to outmigration.\" The Administration's FY2019 budget proposal, however, would have reduced State Department-managed security assistance to the region (INCLE, NADR, IMET, and FMF) by 33% compared with the FY2018 estimate.", "Some analysts have noted that any cuts to State Department-managed security assistance programs in Latin America and the Caribbean could be offset by increased support from DOD. Congress has authorized DOD to provide a wide range of security assistance to foreign nations (referred to as security cooperation by DOD) including many activities that overlap with those traditionally managed by the State Department. For example, 10 U.S.C. \u00a7333 authorizes DOD, with the concurrence of the State Department, to train and equip foreign security forces for counterterrorism operations, counter-weapons of mass destruction operations, counter-illicit drugs operations, counter-transnational organized crime operations, and maritime and border security operations, among other purposes.", "Given the number of security challenges the United States faces around the globe, however, it is unclear whether DOD would devote increased funding to security cooperation in Latin America and the Caribbean. As a result of a provision (10 U.S.C. \u00a7381) enacted as part of the National Defense Authorization Act for FY2017 ( P.L. 114-328 ), DOD is required to submit formal, consolidated budget requests for security cooperation efforts, including the specific countries or regions where they are to take place, \"to the extent practicable.\" For FY2019, DOD requested $55.1 million for security cooperation in the areas of responsibility of U.S. Northern Command and U.S. Southern Command, which encompass the Latin American and Caribbean region. That amount would be slightly less than the estimated $58.6 million DOD obligated for security cooperation in the region in FY2018. Both of those figures exclude funds for drug interdiction and counter-drug activities, which account for the vast majority of DOD security cooperation funding for Latin America and the Caribbean. In FY2017 (the most recent year for which data are available), DOD obligations for drug interdiction and counter-drug activities in the region totaled $210.8 million.", "The exclusion of drug interdiction and counter-drug activities and the lack of country-by-country data in DOD's FY2019 security cooperation request make it difficult to assess the scope of DOD's planned activities in the region and the extent to which those activities may overlap with State Department security assistance programs. This lack of information may hinder congressional efforts to establish budget priorities and shape the relative balance of U.S. assistance in Latin America and the Caribbean. It also may weaken Congress's ability to incentivize policy changes in recipient nations as State Department-managed assistance withheld to comply with legislative conditions could be replaced with less transparent DOD support. DOD asserts that \"in the long-term\" it intends to include \"some budgeting figures by country.\" Congress could use legislation to clarify the breadth of information it expects to receive from DOD in its annual security cooperation budget requests. "], "subsections": []}, {"section_title": "Potential Decline in U.S. Influence", "paragraphs": ["Although the relative importance of foreign assistance in U.S. relations with Latin American and Caribbean nations has declined since the end of the Cold War, the U.S. government continues to use assistance to advance key policy initiatives in the region. In recent years, U.S. assistance has supported efforts to reduce illicit drug production and end the long-running internal conflict in Colombia, combat transnational organized crime in Mexico, and address the root causes that drive unauthorized migration to the United States from Central America. This assistance has enabled the U.S. government to influence partner countries' policies, including the extent to which they dedicate resources to activities that they otherwise may not consider top priorities.", "Some analysts and Latin American officials view the Administration's efforts to cut foreign aid as part of a broader trend of U.S. disengagement from the region. They note that President Trump withdrew from the Trans-Pacific Partnership trade agreement and imposed tariffs on several Latin American nations, has been slow to fill diplomatic posts in the region, and was the first U.S. president in 25 years to skip the triennial Summit of the Americas. They contend that this has created a leadership vacuum in the region that other powers have begun to fill. For example, some analysts warn that China, which has provided more than $140 billion in state-backed finance to Latin American and Caribbean nations since 2005, has begun to leverage its significant commercial ties into other forms of power that could come at the expense of the United States. Others note that it may not be a zero-sum game and that the region's increased ties with China do not necessarily portend a loss of U.S. influence.", "Research suggests that foreign aid can influence perceptions of U.S. leadership, which have declined significantly in Latin America and the Caribbean over the past two years. In 2018, 31% of the region approved of \"the job performance of the leadership of the United States,\" an 18-point decline compared to 2016. Consistently high disapproval ratings could constrain Latin American and Caribbean leaders' abilities to support Trump Administration initiatives and conclude agreements with the United States.", "Many in Congress also have expressed concerns that significant foreign assistance cuts could weaken U.S. influence around the world. In H.Rept. 115-829 , for example, the House Appropriations Committee asserted that \"the magnitude of the reductions proposed for United States diplomatic and development operations and programs in the fiscal year 2019 request would be counterproductive to the economic and security interests of the nation and would undermine our relationships with key partners and allies.\" Similarly, in S.Rept. 115-282 , the Senate Appropriations Committee asserted that the \"proposed reduction to the International Affairs budget\u2026reinforces the perception that the United States is retreating from its preeminent role as the world's superpower.\" These concerns may have influenced Congress's decision not to adopt many of the Administration's proposed foreign assistance cuts for FY2019.", "Appendix A. U.S. Foreign Assistance to Latin America and the Caribbean by Account and Country or Regional Program: FY2017", "Appendix B. U.S. Foreign Assistance to Latin America and the Caribbean by Account and Country or Regional Program: FY2018 Estimate", "Appendix C. U.S. Foreign Assistance to Latin America and the Caribbean by Account and Country or Regional Program: FY2019 Request"], "subsections": []}]}]}}
{"id": "RL31572", "title": "Appropriations Subcommittee Structure: History of Changes from 1920 to 2019", "released_date": "2019-02-06T00:00:00", "summary": ["This report details the evolution of the House and Senate Appropriations Committees' subcommittee structure from the 1920s to the present. In 1920, the House adopted a change in its rules to consolidate jurisdiction over all appropriations in the Appropriations Committee. After the enactment of the Budget and Accounting Act of 1921, the House reorganized its Appropriations Committee by establishing for the first time a set of subcommittees to consider appropriations bills based on the administrative organization of the executive branch. The Senate followed suit in 1922, and the two chambers have continued under that basic organizational approach since that time.", "It is possible to divide the evolution of the modern Appropriations subcommittee structure into four eras. The first era, stretching roughly from the initial reorganization in the 1920s until the end of the Second World War, was marked by stability. Most of the changes in Appropriations structure resulted from combining bills (e.g., the Treasury Department bill with the Post Office Department bill beginning in 1924), although one new bill (and subcommittee) was created when the appropriations bill for the Department of Labor was split off from the Departments of State, Justice, Commerce, and Labor bill in 1939.", "The second era, from the end of the Second World War through 1970, saw a number of significant changes. During this period, Congress attempted to keep pace with executive branch reorganizations (e.g., creation of subcommittees to consider appropriations for the new Departments of Defense in 1947 and Transportation in 1967) and changing national priorities (e.g., creation of a separate appropriations bill, and later subcommittee, for foreign operations).", "The third era, from 1971 through 2003, was marked by a renewed stability. While some appropriations subcommittees were renamed to reflect changes in agency and departmental status, these changes did not represent major shifts in jurisdiction.", "Following major changes in organization involving nearly every subcommittee in the 108th, 109th, and 110th Congresses, the two chambers have once again settled into an era of stable organization. In 2003, both the House and Senate Appropriations Committees merged their subcommittees on Transportation and Treasury and created new subcommittees to consider appropriations for the newly created Department of Homeland Security. In 2005, both chambers undertook major reorganizations, eliminating three subcommittees in the House and one in the Senate. This reorganization, however, left the two chambers with differing subcommittee jurisdictions. In 2007 the two Appropriations Committees reorganized again to reestablish parallel subcommittees that have remained in place since.", "During the first session of the 110th Congress (2007), the House created the Select Intelligence Oversight Panel of the appropriations committee to oversee spending on federal intelligence activities. This panel was eliminated in 2011 at the beginning of the 112th Congress.", "This report will be updated to reflect any changes in Appropriations subcommittee structure."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Article I, Section 9, of the U.S. Constitution provides, \"No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.\" The Constitution does not, however, prescribe any specific structure or process for making appropriations. The committee structure established by Congress during the 20 th century assigns a prominent role to the Appropriations Committees of the House and Senate for both the development of appropriations legislation and oversight over budget execution. The Appropriations Committees, in turn, have created a system of subcommittees designed to facilitate their ability to carry out these tasks. ", "The number and jurisdictions of appropriations subcommittees have evolved to meet changing needs and circumstances. For example, reorganization was undertaken at the beginning of the 108 th Congress in response to the creation of a new Department of Homeland Security. After the legislation establishing the new department was enacted, the House Appropriations Committee established a new subcommittee. This modification of subcommittee structure affected eight of the existing subcommittees and was one of the most extensive reorganizations of the Appropriations Committees since the 1920s. Shortly thereafter, a similar change was made in the Senate Appropriations Committee.", "Reorganization can also be undertaken to adapt to changes in congressional priorities. For example, in the reorganization that occurred at the start of the 109 th Congress, both the House and the Senate undertook a major change in subcommittee structure. This resulted in the elimination of three appropriations subcommittees in the House and one in the Senate and ultimately affected the jurisdictions of 10 appropriations subcommittees in the House and 8 in the Senate. Another major reorganization at the beginning of the 110 th Congress again shifted subcommittee jurisdiction to reestablish parallel House and Senate subcommittees.", "This report details the evolution of the House and Senate Appropriations Committees' subcommittee structure from the 1920s to the present."], "subsections": []}, {"section_title": "Consolidation and Initial Stability: 1920-1946", "paragraphs": ["By the end of the First World War, the idea that the President should play a prominent role in a more centralized budgetary process gained prominence, ultimately resulting in passage of the Budget and Accounting Act of 1921. In anticipation of the more centralized executive budget system provided under the act, the House also changed its rules to require that all appropriations be considered by the Appropriations Committee. During the late 19 th century, congressional rules had assigned jurisdiction over certain general appropriations bills to committees other than the House and Senate Appropriations Committees. Notably, the appropriations bills for the District of Columbia, Indian affairs, Agriculture Department, Army, Navy, Post Office Department, and rivers and harbors (i.e., public works) were all considered by their respective legislative committees.", "A subsequent, additional change involved the organization of appropriations bills. Prior to the Budget and Accounting Act, appropriations bills (and subcommittees) tended to be organized along topical lines. For example, the military activities of the War Department were considered in appropriations bills reported by the Military Affairs Committee, and the activities of the Corps of Engineers were considered in River and Harbor appropriations bills reported by the Commerce Committee. The salaries and contingent expenses for the civilian administration of the department, however, were carried in the Legislative, Executive, and Judicial bill, which was within the jurisdiction of the Appropriations Committee. A similar division existed for most departments and was true even for agencies whose appropriations were wholly within the jurisdiction of the Appropriations Committee. Funding for the activities of agencies as disparate as the Interstate Commerce Commission, the Coast Guard, and the Bureau of Mines was carried in the Sundry Civil bill, which was frequently the largest of the general appropriations bills. Nevertheless, their salaries and expenses were generally funded in the Legislative, Executive, and Judicial bill.", "Concurrent with the congressional consolidation of jurisdiction over appropriations, the newly established Bureau of the Budget recommended that appropriations bills be reorganized along administrative lines, where appropriations for salaries and expenses would be carried in the same bill as funding for programs and activities administered by a department. This arrangement had previously existed only for the Department of Agriculture appropriations bill. The House Appropriations Committee adopted the bureau's concept and reorganized the structure of general appropriations bills and its subcommittees so extensively that only the structure of the Agriculture bill remained essentially unchanged.", "After its reorganization, the House Appropriations Committee comprised the following subcommittees:", "1. Agriculture Department; 2. Commerce and Labor Departments; 3. Deficiencies; 4. District of Columbia; 5. Independent Offices (including the Executive Office of the President); 6. Interior Department; 7. Legislative Establishment; 8. Navy Department and the Navy; 9. Post Office Department; 10. State and Justice Departments (including the judiciary); 11. Treasury Department; and 12. War Department and the Army (both military and civil functions).", "By long-standing custom, the House originates all general appropriations bills. As a consequence, historically, the House has generally determined the initial content of the bills. By originating appropriations bills corresponding to its new administratively based organizational structure, the House created a jurisdictional problem for the Senate, which retained a system based on topical organization of appropriations bills, as well as multiple committees sharing jurisdiction over general appropriations bills. Confronted with the difficulty of considering the reorganized appropriations bills with its now outmoded system, the Senate reorganized its appropriations jurisdiction and subcommittees in 1922.", "Information available on congressional subcommittees, including those of the Appropriations Committees, is generally sparse and unsystematic prior to enactment of the Legislative Reorganization Act of 1946. From available hearings and other committee documents, however, it appears that during this era the Appropriations Committees continued the practice of each subcommittee (other than the Deficiencies Subcommittee) being responsible for drafting one of the regular appropriations bills. Using data on appropriations bills to identify subcommittee structure during this period, one may conclude that the subcommittee structure of the Appropriations Committees was relatively stable. Other than name changes, the salient changes in appropriations bill structure (and, presumably, subcommittee structure) between 1922 and 1946 seem to have been limited to the following:", "The combination of the bills for the Treasury and Post Office Departments beginning in the second session of the 68 th Congress (1924); The combination of the Commerce and Labor Departments bill with the State and Justice Departments bill beginning in the second session of the 68 th Congress (1924); The separation of the War Department and Army bill into two bills, one for the Military Establishment and the other for War Department Civil Functions, beginning in the first session of the 75 th Congress (1937); The separation of the Labor Department (and the Federal Security Agency) from the Departments of State, Justice, Commerce, and Labor bill beginning in the first session of the 76 th Congress (1939); and The inclusion of the Judiciary in the Legislative Branch bill during the 78 th Congress (1943-1944)."], "subsections": []}, {"section_title": "Reorganization and Multiple Changes: 1947-1970", "paragraphs": ["One of the chief aims of the Legislative Reorganization Act of 1946 was to bring about a modernization of Congress's committee system, including its subcommittees. As a result, unlike the earlier period, information on subcommittee structure since 1946 is more readily available. In the 80 th Congress (1947-1948), the Appropriations Committees in both chambers had these 12 subcommittees:", "1. Agriculture; 2. Deficiencies; 3. District of Columbia; 4. Government Corporations; 5. Independent Offices; 6. Interior Department; 7. Legislative; 8. State, Justice, and Commerce Departments and the Judiciary; 9. Treasury Department and Post Office; 10. Labor Department and Federal Security Agency; 11. War Department; and 12. Navy Department.", "The idea of modernizing congressional committee structure and operations embodied in the Legislative Reorganization Act was paralleled by an interest in developing a more modern federal administrative apparatus to supplant the one that had grown in episodic bursts to meet the challenges of the Depression and World War II. Because appropriations bills continued to be organized along administrative lines, these changes in the executive branch had an impact on appropriations subcommittee structure. The four changes in party control of the House between 1947 and 1955 also contributed to an environment conducive to revision of appropriations subcommittee jurisdiction. This evolution saw the number of subcommittees fluctuate between a low of 10 and a high of 15. Despite this fluctuation, it appears that the Appropriations Committees generally continued the practice of each subcommittee being responsible for drafting one of the regular appropriations bills."], "subsections": [{"section_title": "Subcommittee Development", "paragraphs": ["Appropriations Subcommittees that were created, abolished, or reorganized from the 80 th Congress through the 91 st Congress (1947-1970) are as follows:"], "subsections": [{"section_title": "Government Corporations", "paragraphs": ["A subcommittee (and appropriations bill) specifically pertaining to government corporations operated in both the House and Senate during the 80 th Congress (1947-1948)."], "subsections": []}, {"section_title": "Public Works", "paragraphs": ["Jurisdiction over Army civil functions was transferred to the Deficiencies Subcommittees in both the House and Senate for the 81 st Congress (1949-1950). The Senate subsequently transferred jurisdiction over deficiencies to the full committee and established a separate subcommittee for Army civil functions in the 82 nd Congress, which lasted through the 83 rd (1951-1954). The House continued to operate a Deficiencies and Army Civil Functions Subcommittee in the 82 nd Congress (1951-1952) but transferred jurisdiction over deficiencies to the full committee and created a subcommittee combining Army civil functions with military construction in the 83 rd Congress (1953-1954). A Public Works Subcommittee (including the Army civil functions as well as the Atomic Energy Commission, Bureau of Reclamation, and power marketing administrations) was established by both the House and Senate Appropriations Committees beginning in the first session of the 84 th Congress (1955). The Senate maintained separate subunits within the Public Works Subcommittee to consider matters related to the Atomic Energy Commission and Tennessee Valley Authority and related to the Bureau of Reclamation and Department of the Interior power marketing associations. These subunits operated beginning in the 84 th Congress (1955-1956), continuing through the 90 th Congress (1967-1968). A single bill was reported from the subcommittee for each fiscal year during this period."], "subsections": []}, {"section_title": "Deficiencies", "paragraphs": ["A separate subcommittee to consider deficiencies was discontinued in the Senate after the 81 st Congress (1949-1950) and in the House after the 82 nd Congress (1951-1952). Jurisdiction over deficiencies and supplemental was subsequently exercised by the full committee. A Deficiencies Subcommittee was reestablished by the House Appropriations Committee for the 86 th through 88 th Congresses (1959-1964), after which the jurisdiction was again exercised by the full committee. The Senate Subcommittee on Deficiencies was reestablished for the second session of the 87 th Congress and met through the 91 st Congress (1962-1970)."], "subsections": []}, {"section_title": "Department of Defense", "paragraphs": ["The War and Navy Departments were consolidated to create a National Military Establishment (later the Department of Defense) during the first session of the 80 th Congress (1947), and their respective appropriations subcommittees were combined to create an Armed Services Subcommittee at the beginning of the 81 st Congress (1949). Renamed the Department of Defense Subcommittee in the first session of the 84 th Congress (1955), the House Subcommittee maintained three separate subunits for consideration of Army, Navy, and Air Force matters during the 84 th and 85 th Congresses (1955-1958), and the Senate maintained a separate subunit for intelligence activities between the 91 st and 94 th Congresses (1968-1976). During these years, there continued to be a single Department of Defense appropriations bill."], "subsections": []}, {"section_title": "Military Construction", "paragraphs": ["Military construction was considered part of the Defense Appropriations bill prior to the 83 rd Congress. Between the 83 rd Congress and the first session of the 85 th Congress (1953-1957), appropriations for military construction were carried primarily in deficiency and supplemental appropriations measures. In the 83 rd Congress (1953-1954), the House operated a Civil Functions and Military Construction Subcommittee, but it is otherwise not clear whether military construction matters were considered by a subcommittee in this period. A separate Military Construction Subcommittee was created by the House Appropriations Committee beginning in the second session of the 85 th Congress (1958), and a separate bill for military construction matters was considered for the first time that same year. The Senate Appropriations Committee established a separate subunit for military construction within the Defense Subcommittee in the 86 th Congress (1959-1960) and then a separate subcommittee beginning in the first session of the 87 th Congress (1961)."], "subsections": []}, {"section_title": "Legislative Branch", "paragraphs": ["The House and Senate Appropriations Committees established a subcommittee to consider both legislative and judiciary matters in the 83 rd Congress (1953-1954). The two chambers subsequently returned to the former practice of a separate Legislative Subcommittee, with judiciary matters being considered by the same subcommittee as the Departments of State, Justice, and Commerce beginning in the first session of the 84 th Congress (1955)."], "subsections": []}, {"section_title": "Foreign Operations", "paragraphs": ["A separate bill to fund foreign aid programs (then called the Mutual Security bill) was considered beginning in the first session of the 83 rd Congress (1953), with jurisdiction exercised by the full committee in both the House and Senate. A separate subcommittee was established by the House Appropriations Committee beginning in the first session of the 84 th Congress (1955). Foreign operations jurisdiction continued to be exercised at the full committee level by the Senate Appropriations Committee until the first session of the 91 st Congress (1969)."], "subsections": []}, {"section_title": "Commerce", "paragraphs": ["Jurisdiction over Commerce Department appropriations was exercised by a separate subcommittee in the 84 th through 86 th Congresses (1955-1960). The subcommittee's jurisdiction was combined with the General Government Subcommittee for the first session of the 87 th Congress (1961). Beginning in the second session of the 87 th Congress (1962), jurisdiction was transferred to a subcommittee with jurisdiction over the State, Justice, and Commerce Departments and the judiciary."], "subsections": []}, {"section_title": "General Government", "paragraphs": ["In the House, a separate subcommittee was established for general government matters (including the Executive Office of the President) in the 84 th through 86 th Congress (1955-1960). In the Senate, jurisdiction over general government matters was exercised by a Subcommittee on Independent Offices and General Government Matters beginning in the 84 th Congress (1955-1956), although separate appropriations bills for independent offices and general government matters were considered. In both the House and Senate, jurisdiction over general government matters was combined with the Commerce Department Subcommittee in the first session of the 87 th Congress (1961). Jurisdiction over general government matters was subsequently combined with the Treasury Department and Post Office Subcommittee in both chambers beginning in the second session of the 87 th Congress (1962)."], "subsections": []}, {"section_title": "Transportation", "paragraphs": ["A separate subcommittee was established to consider appropriations for the newly created Transportation Department by both the House and Senate Appropriations Committees beginning in the 90 th Congress (1967)."], "subsections": []}]}]}, {"section_title": "Stability: 1971-2002", "paragraphs": ["With the creation of the Transportation Subcommittee by the House Appropriations Committee in 1967, the total number of appropriations subcommittees in the House stabilized at 13. The last subcommittee added in the Senate was the Foreign Operations Subcommittee in 1969, bringing the total in that body to 14. Once the Subcommittee on Deficiencies in the Senate was eliminated at the end of the 91 st Congress (1970), the two chambers' appropriations subcommittee structures both totaled 13 and remained parallel during this period.", "There were no additions, and few major changes, in the subcommittee structure of either the House or Senate Appropriations Committees between 1971 and 2002. The changes that did occur were primarily changes in subcommittee names to reflect changes in agency and departmental status. For example, the title of the Independent Offices bill evolved with the creation of the Departments of Housing and Urban Development in 1965 and Veterans' Affairs in 1988, the Public Works bill became known as the Energy and Water bill after the creation of the Department of Energy in 1977, and the title of the Departments of Labor and Health Education and Welfare was modified to reflect the creation of a separate Department of Education in 1979. However, these changes did not represent major shifts in appropriations subcommittee jurisdictions.", "At the beginning of the 107 th Congress, the House and Senate had the following 13 subcommittees:", "1. Subcommittee on Agriculture, Rural Development, and Related Agencies; 2. Subcommittee on Commerce, Justice, State, and Judiciary; 3. Subcommittee on Defense; 4. Subcommittee on the District of Columbia; 5. Subcommittee on Energy and Water Development; 6. Subcommittee on Foreign Operations; 7. Subcommittee on Interior and Related Agencies; 8. Subcommittee on Labor, Health and Human Services, Education, and Related Agencies; 9. Subcommittee on Legislative Branch; 10. Subcommittee on Military Construction; 11. Subcommittee on Transportation; 12. Subcommittee on Treasury and General Government; and 13. Subcommittee on Veteran's Affairs, Housing and Urban Development, and Independent Agencies."], "subsections": []}, {"section_title": "Major Changes and Renewed Stability: 2003-Present", "paragraphs": ["In response to the establishment of a Department of Homeland Security (DHS), in January 2003, the chairman of the House Appropriations Committee announced that a new appropriations subcommittee would be created. This new subcommittee, consolidating appropriations jurisdiction from eight existing subcommittees over the various entities comprising the DHS, was the first major reorganization of appropriations subcommittee structure in either chamber in over 30 years. The new subcommittee was formally established when the committee organized for the 108 th Congress in February 2003. In order to keep the number of appropriations subcommittees at 13, the committee also merged the subcommittees responsible for Department of Transportation appropriations with that responsible for Treasury, Postal Service, and General Government appropriations. The Senate Appropriations Committee made a similar change when it organized in March 2003.", "At the beginning of the 109 th Congress (2005), the House Appropriations Committee undertook another substantial reorganization, reducing the number of subcommittees from 13 to 10. This reduction was achieved by eliminating the Subcommittees on the Legislative Branch, District of Columbia, and the Departments of Veterans Affairs, Housing and Urban Development, and Independent Agencies (VA-HUD). The jurisdiction over the Legislative Branch appropriations bill was retained by the full committee, and the following major changes were made in House appropriations subcommittee organization:", "A new subcommittee on Military Quality of Life and Veterans Affairs was created. This was accomplished by combining the previous jurisdiction of the Military Construction subcommittee with jurisdiction over the Department of Veterans Affairs (formerly exercised by the VA-HUD subcommittee), as well as those portions of the Department of Defense concerning the Defense Health Program and military facilities sustain ment and housing accounts. The former Transportation and Treasury subcommittee gained jurisdiction over three new areas: The Department of Housing and Urban Development was transferred from the eliminated VA-HUD subcommittee; the federal judiciary was transferred from the former Commerce, Justice, State, and the Judiciary subcommittee; and jurisdiction over the District of Columbia was transferred from the eliminated District of Columbia subcommittee. Jurisdiction over NASA, the National Science Foundation, and the Office of Science and Technology Policy was transferred from the eliminated VA-HUD subcommittee to the newly named Subcommittee on Science, State, Justice and Commerce, and Related Agencies. Jurisdiction over other agencies formerly exercised by the VA-HUD Subcommittee was transferred to the Interior Subcommittee (the Environmental Protection Agency) and Labor-HHS Subcommittee (AmeriCorps). Jurisdiction over Weatherization Assistance Grants exercised by the Labor-HHS Subcommittee, and energy-related accounts exercised by the Interior Subcommittee, was transferred to the Energy and Water Development Subcommittee.", "This reorganization left the House with the following 10 subcommittees:", "1. Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies; 2. Subcommittee on Defense; 3. Subcommittee on Energy and Water Development, and Related Agencies; 4. Subcommittee on Foreign Operations, Export Financing, and Related Programs; 5. Subcommittee on Homeland Security; 6. Subcommittee on Interior, Environment, and Related Agencies; 7. Subcommittee on Labor, Health and Human Services, Education, and Related Agencies; 8. Subcommittee on Military Quality of Life and Veterans Affairs and Related Agencies; 9. Subcommittee on Science, State, Justice and Commerce, and Related Agencies; and 10. Subcommittee on Transportation, Treasury, and Housing and Urban Development, the Judiciary, District of Columbia.", "The Senate Appropriations Committee subsequently adopted a reorganization plan as well, eliminating the Subcommittee on Veterans Affairs, Housing and Urban Development, and Independent Agencies and making the following major changes:", "Jurisdiction over Veterans Affairs was transferred to the Subcommittee on Military Construction. Jurisdiction over the Department of Housing and Urban Development and the federal judiciary was transferred to the former Subcommittee on Transportation, Treasury and General Government. Jurisdiction over NASA, the National Science Foundation, and the Office of Science and Technology Policy was transferred to the former Subcommittee on Commerce, Justice, State, and the Judiciary. Jurisdiction over AmeriCorps was transferred to the Subcommittee on Labor, Health and Human Services, Education, and Related Agencies. Jurisdiction over the Environmental Protection Agency was transferred to the Subcommittee on Interior and Related Agencies. Jurisdiction over energy related accounts formerly exercised by the Interior Subcommittee was transferred to the Subcommittee on Energy and Water Development. Jurisdiction over the State Department was transferred to the former Subcommittee on Foreign Operations.", "This reorganization left the Senate with the following 12 subcommittees:", "1. Subcommittee on Agriculture, Rural Development, and Related Agencies; 2. Subcommittee on Commerce, Justice and Science; 3. Subcommittee on Defense; 4. Subcommittee on the District of Columbia; 5. Subcommittee on Energy and Water Development; 6. Subcommittee on Homeland Security; 7. Subcommittee on Interior and Related Agencies; 8. Subcommittee on Labor, Health and Human Services, Education, and Related Agencies; 9. Subcommittee on Legislative Branch; 10. Subcommittee on Military Construction and Veterans Affairs; 11. Subcommittee on State and Foreign Operations, and Related Programs; and 12. Subcommittee on Transportation, Treasury, the Judiciary, and Housing and Urban Development.", "At the beginning of the 110 th Congress (2007), further major changes were made as follows:", "Jurisdiction over the Departments of Transportation, Treasury, and Housing and Urban Affairs was divided to create subcommittees in both chambers on Transportation, Housing and Urban Development, and related agencies and on Financial Services and General Government (including the Treasury Department, the Judiciary, the Executive Office of the President, the Office of Personnel Management, the Postal Service, the District of Columbia, and other related agencies, such as the Federal Elections Commission, Federal Trade Commission, Securities and Exchange Commission, and Small Business Administration). Jurisdiction over defense health programs and military facilities sustainment and housing accounts was transferred from the House Military Quality of Life subcommittee to the Defense subcommittee. Jurisdiction over the State Department was transferred from the House Science, State, Justice and Commerce, and Related Agencies subcommittee to the Foreign Operations subcommittee.", "In addition, the House reestablished a subcommittee with jurisdiction over the legislative branch, and the Senate eliminated a separate subcommittee on the District of Columbia. The reorganization left the two chambers with the following 12 subcommittees:", "1. Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies; 2. Subcommittee on Commerce, Justice, Science, and Related Agencies; 3. Subcommittee on Defense; 4. Subcommittee on Energy and Water Development, and Related Agencies; 5. Subcommittee on Financial Services and General Government; 6. Subcommittee on the Department of Homeland Security; 7. Subcommittee on Interior, Environment, and Related Agencies; 8. Subcommittee on the Departments of Labor, Health and Human Services, Education, and Related Agencies; 9. Subcommittee on Legislative Branch; 10. Subcommittee on Military Construction, Veterans Affairs, and Related Agencies; 11. Subcommittee on State, Foreign Operations, and Related Programs; 12. Subcommittee on Transportation and Housing and Urban Development, and Related Agencies.", "These 12 subcommittees have remained in place since 2007. In most respects, the jurisdictions of subcommittees for both the House and Senate Appropriations Committees were made parallel. The one salient exception was jurisdiction over funding for the Commodity Futures Trading Commission (CFTC). In the House, funding for CFTC is included in the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations bill, while the Senate includes it in the Financial Services and General Government Appropriations bill. Since 2007, the two chambers have alternated which of these two measures includes CFTC funding when enacted.", "During the first session of the 110 th Congress (2007), based on the recommendations of the 9/11 Commission, the House created the Select Intelligence Oversight Panel of the Appropriations Committee to oversee spending on federal intelligence activities. This panel was established for three major purposes: to review and study on a continuing basis budget requests for and execution of intelligence activities, to make recommendations to relevant subcommittees of the Appropriations Committee, and to prepare an annual report to the Defense subcommittee containing budgetary and oversight observations and recommendations for use by such subcommittee in preparation of the classified annex to the bill making appropriations for the Department of Defense. This panel did not have any spending jurisdiction.", "At the beginning of the 112 th Congress (2011), the Select Intelligence Oversight Panel was eliminated by H.Res. 5 , adopted on January 5, 2011."], "subsections": []}]}}
{"id": "R42565", "title": "SBA New Markets Venture Capital Program", "released_date": "2019-01-11T00:00:00", "summary": ["Authorized by P.L. 106-554, the Consolidated Appropriations Act, 2001 (Appendix H: the New Markets Venture Capital Program Act of 2000), the New Markets Venture Capital (NMVC) program, which is no longer active, is designed to promote economic development and the creation of wealth and job opportunities in low-income geographic areas by addressing the unmet equity investments needs of small businesses located in those areas. Modeled on the Small Business Association's (SBA's) Small Business Investment Company (SBIC) program, SBA-selected, privately owned and managed NMVC companies provide funding and operational assistance to small businesses. To do so, they use private capital the NMVC company has raised (called regulatory capital) and up to 150% of that amount (called leverage) from the sale of SBA-guaranteed 10-year debentures, or loan obligations, to third parties, subject to the availability of funds. Because the SBA guarantees the debenture, the SBA is able to obtain favorable interest rates. NMVC companies are responsible for meeting the terms and conditions set forth in the debenture. At least 80% of the investments must be in small businesses located in a low-income area.", "Specialized Small Business Investment Companies (SSBICs) established under the SBIC program are also eligible for NMVC operational assistance grants, which are awarded on a dollar-to-dollar matching basis. Six companies participated in the NMVC program.", "The NMVC program was appropriated $21.952 million in FY2001 to support up to $150 million in SBA-guaranteed debentures and $30 million to fund operational assistance grants for FY2001 through FY2006. The funds were provided in a lump sum in FY2001 and were to remain available until expended. In 2003, the unobligated balances of $10.5 million for the NMVC debenture subsidies and $13.75 million for operational assistance grants were rescinded. The program continued to operate, with the number and amount of financing declining in recent years as the program's initial investments expired and NMVC companies increasingly engaged only in additional follow-on financings with the small businesses in their portfolios. The NMVC program's active unpaid principal balance peaked at $698 million in FY2008, and then fell each year thereafter until reaching $0 in FY2018.", "This report examines the NMVC program's legislative origins and describes the program's eligibility and performance requirements for NMVC companies, eligibility requirements for small businesses seeking financing, and definition of low-income areas. It also reviews regulations governing the SBA's financial assistance to NMVC companies and provides program statistics.", "The report concludes with an examination of (1) efforts to eliminate the program based on concerns that it duplicated other SBA programs and is relatively expensive, (2) the rescission of the program's unobligated funding in 2003, and (3) congressional efforts to provide the program additional funds."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "New Markets Venture Capital Program Overview", "paragraphs": ["The Small Business Administration (SBA) administers several programs to support small businesses, including loan guaranty programs to enhance small business access to capital; venture capital programs, including the now inactive New Markets Venture Capital (NMVC) program, to foster small business expansion; programs to increase small business opportunities in federal contracting; direct loans for businesses, homeowners, and renters to assist their recovery from natural disasters; and access to entrepreneurial education to assist with business formation and expansion. ", "Authorized by P.L. 106-554 , the Consolidated Appropriations Act, 2001 (Appendix H: the New Markets Venture Capital Program Act of 2000), the NMVC program is designed to", "promote economic development and the creation of wealth and job opportunities in low-income geographic areas and among individuals living in such areas by encouraging developmental venture capital investments in smaller enterprises primarily located in such areas; and address the unmet equity investment needs of small enterprises located in low-income geographic areas.", "Modeled on the SBA's Small Business Investment Company (SBIC) program, SBA-selected, privately owned and managed NMVC companies provide funding and operational assistance to small businesses. To do so, they use private capital the NMVC company has raised (called regulatory capital ) and up to 150% of that amount (called leverage ) from the sale of SBA-guaranteed 10-year debentures, or loan obligations , to third parties, subject to the availability of funds. Because the SBA guarantees the debenture, the SBA is able to obtain favorable interest rates. NMVC companies are responsible for meeting the terms and conditions set forth in the debenture. At least 80% of the investments must be in small businesses located in a low-income area, as defined in the statute.", "Specialized Small Business Investment Companies (SSBICs) established under the SBIC program are also eligible for NMVC operational assistance grants, which are awarded on a dollar-to-dollar matching basis. Six NMVC companies participated in the program.", "The NMVC program was appropriated $21.952 million in FY2001 to support up to $150 million in SBA-guaranteed debentures and up to $30 million for operational assistance grants for FY2001 through FY2006. The funds were provided in a lump sum in FY2001 and were to remain available until expended. The SBA subsequently provided $72.0 million in leverage to NMVC companies in FY2002 and FY2003 ($12.5 million in FY2002 and $59.5 million in FY2003) and $14.4 million for operational assistance grants ($3.75 million in FY2002 and $10.65 million in FY2003). In 2003, the unobligated balances of $10.5 million for NMVC debenture subsidies and $13.75 million for operational assistance grants were rescinded. The program continued to operate, with the number and amount of financing declining in recent years as the program's initial investments expired and NMVC companies increasingly engaged only in additional follow-on financings with the small businesses in their portfolios. ", "The NMVC program's active unpaid principal balance (which is comprised of the SBA guaranteed portion and the unguaranteed portion of the NMVC companies' unpaid principal balance) peaked at $698 million in FY2008, and then fell each year thereafter until reaching $0 in FY2018.", "No bills have been introduced since the 112 th Congress concerning the NMVC program. However, more than 30 bills were introduced in previous Congresses to either expand or amend the program. Many of these bills would have increased the program's funding (a list and summary of bills introduced by Congress to provide the program additional funding appears in the Appendix ). For example, during the 112 th Congress, H.R. 2872 , the Job Creation and Urban Revitalization Act of 2011, would have provided the NMVC program such subsidy budget authority as may be necessary to guarantee $75 million of debentures and $15 million for operational assistance grants for FY2012 through FY2013. The bill was referred to the House Committee on Small Business, but no further action was taken on it.", "This report examines the NMVC program's legislative origins and describes the program's eligibility and performance requirements for NMVC companies, eligibility requirements for small businesses seeking financing, and definition of low-income areas. It also reviews regulations governing the SBA's financial assistance to NMVC companies and provides program statistics. ", "This report concludes with an examination of (1) efforts to eliminate the program based on concerns that it duplicated other SBA programs and is relatively expensive, (2) the rescission of the program's unobligated funding in 2003, and (3) congressional efforts to provide the program additional funds."], "subsections": []}, {"section_title": "Legislative Origins", "paragraphs": [], "subsections": [{"section_title": "105th Congress", "paragraphs": ["On September 15, 1998, the Senate Committee on Small Business conducted a markup of several bills pending before the committee, including H.R. 3412 , the Small Business Investment Company Technical Corrections Act of 1998, which the House had passed. Senator Christopher Bond, chair of the Senate Committee on Small Business, proposed an amendment in the nature of a substitute to H.R. 3412 incorporating the full texts of S. 2372 , the Year 2000 Readiness Act, and S. 2407 , the Small Business Programs Restructuring and Reform Act of 1998, as well as provisions from S. 2448 , the Small Business Loan Enhancement Act. The committee also debated and approved by unanimous voice votes seven amendments to the substitute amendment. One of the seven approved amendments was a precursor of the NMVC program."], "subsections": [{"section_title": "The Community Development Venture Capital Demonstration Program", "paragraphs": ["The amendment, offered by Senator Paul Wellstone, would have authorized a $20 million, four-year technical assistance program\u2014the Community Development Venture Capital Demonstration Program\u2014to provide grants, on a matching dollar-to-dollar basis, to experienced community development venture capital (CDVC) firms that invest in small businesses located in economically distressed areas, such as inner cities and poor rural counties. The grants would be used to provide technical expertise and operating assistance to new, emerging, less experienced CDVC organizations. The program's stated purpose was \"to develop and expand a new but growing field of organizations that use the tools of venture capital to create good jobs, productive wealth, and entrepreneurial capacity that benefit disadvantaged people and economically distressed communities.\" The program's advocates argued that despite difficulties associated with making investments in economically distressed areas, some successful CDVCs had produced \"a 'double bottom line' of not only financial returns, but also social benefits in the form of good jobs and healthier communities.\"", "On September 15, 1998, the committee reported H.R. 3412 , as amended, by a vote of 18-0. On September 30, 1998, the Senate passed the bill, with an amendment, by unanimous consent. The House did not act on the bill."], "subsections": []}]}, {"section_title": "106th Congress", "paragraphs": ["On January 19, 1999, President Bill Clinton announced during his State of the Union Address support for what was later called the \"New Markets Investment Initiative.\" The proposed initiative was comprised of several programs, including a New Markets Tax Credit program and a New Markets Venture Capital program, to encourage economic development in economically distressed areas. President Clinton subsequently drew attention to the initiative by taking three separate trips to underserved inner city and rural communities, visiting Phoenix, Arizona, and the Pine Ridge Indian Reservation in South Dakota on July 7, 1999, and Los Angeles, California, and Anaheim, California, on July 8, 1999 (trip 1); Newark, New Jersey, and Hartford, Connecticut, on November 4, 1999 (trip 2); and Hermitage, Arkansas, and Chicago, Illinois, on November 5, 1999 (trip 3). During his remarks in Chicago, President Clinton announced that he had reached an agreement with House Speaker Dennis Hastert (who was present) to develop a bipartisan legislative initiative on developing new market investments as a means to revitalize impoverished communities."], "subsections": [{"section_title": "SBA's Low- or Moderate-Income Initiative", "paragraphs": ["In a related development, on February 9, 1999, the SBA proposed several incentives to encourage companies participating in its SBIC program to \"expand their investment activity into economically distressed inner cities and rural areas.\" After receiving public comments on several proposed incentives, the SBA issued a final rule on September 30, 1999, implementing the SBIC low- or moderate-income (LMI) initiative.", "The ongoing LMI initiative is designed to encourage SBICs to invest in small businesses located in inner cities and rural areas \"that have severe shortages of equity capital\" because investments in those areas \"often are of a type that will not have the potential for yielding returns that are high enough to justify the use of participating securities.\" SBICs that invest in small businesses with at least 50% of their employees or tangible assets located in a low- or moderate-income area (LMI zone) or at least 35% of their full-time employees with their primary residence in an LMI zone are eligible for the incentives. For example, unlike regular SBIC debentures that typically have a 10-year maturity, LMI debentures are available in 2 maturities, 5 years and 10 years, plus the stub period. The stub period is the time between the debenture's issuance date and the next March 1 or September 1. The stub period allows all LMI debentures to have common March 1 or September 1 maturity dates to simplify administration of the program.", "In addition, LMI debentures are issued at a discount so that the proceeds an SBIC receives for the sale of a debenture are reduced by (1) the debenture's interest costs for the first five years, plus the stub period; (2) the SBA's annual fee for the debenture's first five years, plus the stub period; and (3) the SBA's 2% leverage fee. As a result, these interest costs and fees are effectively deferred, freeing SBICs from the requirement to make interest payments on LMI debentures or to pay the SBA's annual fees on LMI debentures for the first five years of a debenture, plus the stub period.", "As shown in Table 1 , in FY2018, SBICs made 609 investments in small businesses located in an LMI zone, totaling $1.026 billion \u2014 18.6% of the total amount invested."], "subsections": []}, {"section_title": "The Community Development and Venture Capital Act of 2000", "paragraphs": ["On September 16, 1999, Senator John Kerry introduced S. 1594 , the Community Development and Venture Capital Act of 2000. The bill included several provisions in President Clinton's New Markets Investment Initiative. The bill had three main parts: a New Markets Venture Capital Program, very similar to the present program, to encourage investment in economically distressed communities; a Community Development Venture Capital Assistance Program to expand the number of community development venture capital firms and professionals devoted to investing in economically distressed communities; and BusinessLINC, a mentoring program to link established, successful businesses with small business owners in economically stagnant or deteriorating communities to facilitate the development of small businesses in those areas.", "After conducting two hearings and sponsoring a roundtable discussion on the Community Development and Venture Capital Act of 2000, the Senate Committee on Small Business reported the bill, as amended, by a vote of 16-1, on July 26, 2000. In the report accompanying the bill, Senator Christopher Bond, chair of the Senate Committee on Small Business, argued that the SBIC program had \"proven to be an extremely successful public-private sector partnership with the government\" and mentioned the SBA's LMI initiative as a new means to encourage SBICs to make investments in LMI zones. However, he argued that \"as successful as the SBIC program is, it does not sufficiently reach areas of our country that need economic development the most.\" He added that although SBICs invested $771 million in LMI zones in 1999, \"the vast majority of those investments were very large and not at all comparable to the type of investments [NMVC] funds would make.\" Senator Bond argued that the committee was approving the bill because it was necessary", "to expand the number of smaller investments being made to small businesses in the poorest areas, low-income geographic areas, and to fill another gap in access to capital that small businesses face. Investments for NMVC funds typically will range from $50,000 to $300,000 versus the $300,000 to $5 million range found in the Agency's SBIC program.\" ", "The Senate did not take further action on the bill."], "subsections": []}, {"section_title": "The New Markets Venture Capital Program Act of 2000", "paragraphs": ["On December 14, 2000, Representative (later Senator) Jim Talent, chair of the House Committee on Small Business, introduced H.R. 5663 , the New Markets Venture Capital Program Act of 2000. The bill had two parts: the current New Markets Venture Capital Program and BusinessLINC. The next day, the bill was incorporated by reference in the conference report accompanying H.R. 4577 , the Consolidated Appropriations Act, 2001, which became law ( P.L. 106-554 ) on December 21, 2000.", "On January 22, 2001, the SBA published an interim final rule in the Federal Registe r indicating its intention to establish the NMVC program. The SBA's final rule, which formally established the NMVC program, was published in the Federal Registe r on May 23, 2001."], "subsections": []}]}]}, {"section_title": "NMVC Company Eligibility and Performance Requirements", "paragraphs": ["P.L. 106-554 specified that venture capital companies interested in participating in the program must submit ", "a detailed application to the SBA that includes, among other items, a business plan describing how the company intends to make successful developmental venture capital investments in identified low-income geographic areas, and information regarding the community development finance or relevant venture capital qualifications and general reputation of the company's management.", "In addition, an NMVC company must", "be a newly formed for-profit entity or a newly formed for-profit subsidiary of an existing entity; be organized under state law solely for the purpose of performing the functions and conducting the activities contemplated under the act; be organized either as a corporation, a limited partnership, or a limited liability company; show, to the SBA's satisfaction, that its current or proposed management team is qualified and has the knowledge, experience, and capability in community development finance or relevant venture capital finance necessary for investing in the types of businesses contemplated by the act; and have a primary objective of economic development of low-income areas.", "On January 22, 2001, the SBA solicited applications from venture capital companies and SSBICs to participate in the NMVC program. The SBA had planned to offer another round of applications for the program during the first quarter of 2003. However, the second round of applications was canceled because, as mentioned previously, P.L. 108-7 , the Consolidated Appropriations Resolution, 2003, which became law on February 20, 2003, rescinded the program's unobligated funding.", "The SBA received 23 applicants from companies interested in participating in the NMVC program, and conditionally approved 7 of them. Final approval is subject to the applicant meeting several conditions. For example, applicants are required to raise, within 18 months of being conditionally approved, at least $5 million in private capital or in binding capital commitments from one or more investors (other than federal agencies or departments) that meet criteria established by the administrator (the private funds are called regulatory capital ). Applicants also must have in place binding commitments from sources other than the SBA that are payable or available over a multiyear period not to exceed 10 years that amount to not less than 30% of the total amount of regulatory capital and commitments raised (30% of $5 million = $1.5 million). This additional funding is necessary to guarantee the applicant's ability to meet the required dollar-to-dollar matching contribution for operational assistance grants.", "Six of the seven companies granted conditional approval subsequently met all of the program requirements (one in April 2002, three in March 2003, one in April 2003, and one in August 2003) and were accepted into the program after signing a formal participation agreement with the SBA. The six NMVC companies initially raised $48 million in private capital and were subsequently provided $72 million in leverage. The companies are", "Adena Ventures, L.P., Athens, Ohio, approved on April 24, 2002, with targeted low-income areas in Ohio, West Virginia, and Maryland; New Markets Venture Partners, College Park, Maryland, approved on March 5, 2003, with targeted low-income areas in Maryland, Virginia, and the District of Columbia; CEI Community Ventures Fund, LLC, Portland, Maine, approved on March 21, 2003, with targeted low-income areas in Maine, New Hampshire, and Vermont; Murex Investments I, L.P., Philadelphia, Pennsylvania, approved on March 31, 2003, with targeted low-income areas in Pennsylvania, New Jersey, and Delaware; Penn Venture Partners, LP, Harrisburg, Pennsylvania, approved on April 23, 2003, with targeted low-income areas in Pennsylvania; Southern Appalachian Fund, L.P., London, Kentucky, approved on August 8, 2003, with targeted low-income areas in Kentucky, Tennessee, Georgia, Alabama, and Mississippi.", "NMVC companies are subject to various reporting requirements. For example, for each fiscal year, NMVC companies must file an annual financial statement with the SBA that has been audited by an independent public accountant acceptable to the SBA. The statement must include an assessment of the social, economic, or community development impact of each financing; the number of full-time equivalent jobs created as a result of the financing; the impact on the revenues and profits of the business being financed; and the impact on the taxes paid by the business being financed and by its employees. The statement must also include a listing of the number and percentage of the business's employees that reside in a low-income area. In addition, NMVC companies are required to submit to the SBA a portfolio financing report for each financing made within 30 days of the closing date."], "subsections": []}, {"section_title": "Eligibility of Small Businesses and Low-Income Geographic Areas", "paragraphs": ["NMVC companies are required to provide financial assistance and operational assistance only to small businesses as defined under the SBA's SBIC program. The business must either meet the SBA's size standard for the industry in which it is primarily engaged or have a maximum net worth of no more than $19.5 million and average after-tax net income for the preceding two years of not more than $6.5 million. All of the company's subsidiaries, parent companies, and affiliates are considered in the size standard determination.", "In addition, at the close of each NMVC company's fiscal year, at least 80% of the company's total financings (in total dollars) and 80% of the total number of concerns in that company's portfolio must be small businesses that, at the time of the financing, had their principal offices located in a low-income area (low-income enterprises). NMVC companies that fail to reach these required percentages at the end of any fiscal year must be in compliance by the end of the following fiscal year. They are not eligible for additional leverage from the SBA until they reach the required percentages.", "The act defines a low-income area as any census tract, or equivalent county division as defined by the Bureau of the Census, that meets any of the following criteria:", "a poverty rate of 20% or more; if located in a metropolitan area, at least 50% of its households have an income that is below 60% of the area median gross income; if not located in a metropolitan area, has a median household income that does not exceed 80% of the statewide median household income; is located within a historically underutilized business zone (HUBZone); is located in an urban empowerment zone or urban enterprise community as designated by the Department of Housing and Urban Development; or is located in a rural empowerment zone or rural enterprise community as designated by the Department of Agriculture."], "subsections": []}, {"section_title": "NMVC Leverage", "paragraphs": ["NMVC companies invest funds they have raised themselves, their regulatory capital, in small businesses. In addition, they can receive up to 150% of that amount from the SBA, subject to the availability of funds. NMVC companies follow essentially the same process for obtaining SBA funding as prescribed under the SBIC program. The SBA's funding, or leverage, comes from the sale to third parties of 10-year securities (or debentures), which are backed by the full faith and credit of the United States. Because the SBA guarantees the timely payment of the principal and interest due on the securities, the SBA is able to obtain favorable interest rates. NMVC companies are responsible for meeting the terms and conditions set forth in the debenture.", "NMVC debentures are deferred-interest debentures issued at a discount (less than face value) equal to the first five years' interest to eliminate the need for NMVC companies to make interest payments during that period. As a result, NMVC companies make no payments on the debenture for five years from the date of issuance, plus the stub period, which ensures that all NMVC debentures have common prepayment and maturity dates of either March 1 or September 1. NMVC companies make semiannual interest payments on the face amount of the debenture during years 6 to 10, and they are responsible for paying the debenture's principal amount when the debenture reaches its maturity date.", "NMVC companies receive leverage from the SBA in a two-step process. First, they submit a request to the SBA for a conditional commitment to reserve a specific amount of leverage for future use. This request authorizes the SBA to sell the requested debenture amount to a third party at an interest rate approved by the SBA or to pool the requested debenture amount with other requests, providing each request with the same maturity date, interest rates, and conditions. The NMVC companies then apply to the SBA to draw against the SBA's leverage commitment. These requests may come at any time during the term of the SBA's leverage commitment.", "Although authorized to do so, the SBA does not pool NMVC debentures. Through an agreement with the SBA, the Federal Home Loan Bank of Chicago (FHLB) has purchased and held all outstanding NMVC debentures since issuance. The interest rate on each NMVC debenture was determined by FHLB using a spread over FHLB's cost of funds as of the date of each issuance.", "The SBA does not allow NMVC companies to prepay their draws for a period of 12 months (plus the stub period) after issuance.\u00a0Prepayments are permitted after that waiting period, but only on March 1 or September 1 of each year. The cost of prepayment is the present value of the NMVC debenture on the semiannual date chosen for prepayment. ", "After receiving funds, NMVC companies make equity investments in small businesses of their choice. Equity investments are typically in the form of common or preferred stock and sometimes in the form of subordinated debt with equity features (as long as the debt is not amortized and provides for interest payments contingent upon and limited to the extent of earnings) or limited partnership interests, options, warrants, and similar equity investment instruments."], "subsections": []}, {"section_title": "Operational Assistance Grants", "paragraphs": ["The SBA is authorized to award grants to NMVC companies and SSBICs to provide free operational assistance to small businesses financed, or expected to be financed, under the program. The grants must be used to provide management, marketing, and other technical assistance to help a small business with its business development. The grants have a dollar-to-dollar matching requirement and cannot be used for general and administrative expenses, including overhead. Matching resources may be in the form of (1) cash; (2) in-kind contributions; (3) binding commitments for cash or in-kind contributions that are payable or available over a multiyear period acceptable to the SBA but not to exceed 10 years; or (4) an annuity, purchased with funds other than regulatory capital, from an insurance company acceptable to the SBA that may be payable over a multiyear period acceptable to the SBA but not to exceed 10 years.", "NMVC companies and SSBICs are eligible for an operational assistance grant award equal to the amount of matching resources the company has raised, subject to the availability of funds. NMVC companies must use at least 80% of both the grant funds and their matching resources to provide free operational assistance to small businesses located in a low-income area. SSBICs must use both the grant funds awarded by the SBA and their matching resources to provide free operational assistance to small businesses \"in connection with a low-income investment made by the SSBIC with regulatory capital raised after September 21, 2000.\""], "subsections": []}, {"section_title": "Program Statistics", "paragraphs": ["As shown in Table 2 , NMVC companies received operational assistance grants in FY2002 and FY2003 and started making equity investments in small businesses in FY2002.", "Since the program's inception, NMVC companies invested more than $81.4 million in 71 different small businesses. The program reached its peak, in terms of the amount of financings, in FY2007, investing nearly $16.3 million in 35 different small businesses that year. Since then, the amount of financings each year generally declined\u2014falling to no new financings in FY2016 as the program's initial investments expired and NMVC companies engaged only in additional follow-on financings with the small businesses in their portfolios. ", "As mentioned previously, the NMVC program's active unpaid principal balance (including both the SBA guaranteed portion and the unguaranteed portion of the NMVC companies' unpaid principal balance) peaked at $698 million in FY2008, and then fell each year thereafter until reaching $0 in FY2018. "], "subsections": []}, {"section_title": "Congressional Issues", "paragraphs": ["The NMVC program has not received any additional funding since 2001. Opposition to the program within Congress began to gain momentum when President George W. Bush recommended in his FY2002 budget request that the NMVC program be eliminated, arguing that the program is relatively expensive and duplicative of other federal programs: ", "The Administration supports the objectives of the New Markets Venture Capital (NMVC) program but believes those objectives can be achieved more efficiently and at a lower cost through other existing programs. Several vehicles and incentives to direct investment into economically distressed communities already exist. Communities targeted by NMVC have access to a wide range of private for-profit and economic development programs, including the federally supported community development financial institutions administered through the Department of Treasury. In addition, SBA's SBIC program, which has 412 licensed venture capital companies with total capital resources amounting to $17.7 billion, is implementing incentives to encourage investment in economically distressed areas.", "The NMVC program is also expensive relative to the impact that it is expected to have. The total cost of the program in FY2001 is $52 million, not including administrative cost of running the program. Since the program is expected to generate $150-$200 million of investment activity, it will yield only $3.00-$4.00 of investment for every taxpayer dollar spent. In comparison, under the Small Business Investment Company (SBIC) program, there is no cost associated with the debenture portion of the program.", "Others argued that the NMVC program's targeted clientele of small businesses located in economically distressed areas is inherently too risky for government involvement. In their view, NMVC companies are \"designed and chartered to operate (as profit-making firms) in a market niche that mainstream venture capital firms will not touch.\"", "The program's advocates contended that the NMVC program is necessary precisely because mainstream venture capital firms generally avoided investments in small businesses located in economically distressed areas. In their view, the NMVC program is an essential part of a larger federal effort, which includes tax incentives, to fill a market niche in private-sector venture capital investments and, in the process, help to revitalize areas experiencing long-term economic difficulties. They also objected to the Bush Administration's argument that the program is duplicative of other federal programs. In their view, the NMVC program is targeted at a clientele that is not being adequately served by other federal programs.", "The Bush Administration continued to recommend the program's elimination in each of its subsequent budget requests. As mentioned previously, during congressional consideration of the FY2003 budget the unobligated balances of $10.5 million for NMVC debenture subsidies and $13.75 million for operational assistance grants were rescinded. ", "Since then, more than 30 bills have been introduced to amend the NMVC program, including bills to ", "reduce the amount of capital NMVC companies must raise to become eligible for operational assistance grants, eliminate the matching requirement for operational assistance grants, create an Office of New Markets Venture Capital within the SBA, require the SBA to provide conditionally approved NMVC companies a full two years to meet all program requirements, provide increased financing to small manufacturers, and amend the program's definition for low-income area to correspond with the definition used by the New Market Tax Credits program (Section 45D(e) of the Internal Revenue Code of 1986) (26 U.S.C. 45D(e)). ", "Many of these bills also included provisions to provide the NMVC program additional funding."], "subsections": []}, {"section_title": "Legislative Efforts to Provide Additional NMVC Funding", "paragraphs": ["As shown in Table A-1 in the Appendix , during the 108 th Congress, two bills were introduced, one in the House and one in the Senate, to provide the NMVC program \"such subsidy budget authority as may be necessary to guarantee $75 million of debentures\" and $15 million for operational assistance grants over FY2004 and FY2005. Neither bill was enacted.", "During the 109 th Congress, an amendment was offered during the House during floor debate on H.R. 2862 , the Science, State, Justice, Commerce, and Related Agencies Appropriations Act, 2006, to provide \"$30 million in debenture guarantees and $5 million for operational assistance grants to fund the creation of a fresh round of New Market Venture Capital companies \u2026 paid for by using funds from the Small Business Administration's salary and expense account.\" The amendment failed by voice vote. A bill introduced in the House would have authorized an expansion of the NMVC program to include the selection of an NMVC company whose primary objective would be the economic development of small businesses located in Hurricane Katrina-affected areas. The bill would have authorized \"such subsidy budget authority as may be necessary to guarantee \u2026 $50 million of debentures issued by the Gulf Region New Markets Venture Capital Company \u2026 and $10 million for grants to the Gulf Region New Markets Venture Capital Company.\" Another House bill would have provided the NMVC program \"such subsidy budget authority as may be necessary to guarantee $100 million of debentures and $25 million for operational assistance grants for FY2006 through FY2008.\" Neither bill was enacted.", "During the 110 th Congress, four bills were introduced, two in the House and two in the Senate, to provide the NMVC program additional funding. One of the House bills would have provided the NMVC program such subsidy budget authority as may be necessary to guarantee $100 million of debentures and $25 million for operational assistance grants for FY2007 through FY2009. The other House bill would have provided the NMVC program such subsidy budget authority as may be necessary to guarantee $30 million of debentures and $5 million for operational assistance grants for FY2008 through FY2010. The two Senate bills would have provided the NMVC program $20 million for operational assistance grants. None of these bills was enacted.", "During the 111 th Congress, two bills were introduced in the House to provide the NMVC program additional funding. One of the bills would have provided the NMVC program such subsidy budget authority as may be necessary to guarantee $100 million of debentures and $25 million for operational assistance grants for FY2009 through FY2011. The other bill would have provided the NMVC program such subsidy budget authority as may be necessary to guarantee $100 million of debentures and $20 million for operational assistance grants for FY2010 through FY2011.", "During the 112 th Congress, one bill was introduced to provide additional funding for the NMVC program. Representative Nydia Vel\u00e1zquez introduced H.R. 2872 , the Job Creation and Urban Revitalization Act of 2011, on September 8, 2011. The bill would have provided the NMVC program such subsidy budget authority as may be necessary to guarantee $75 million of debentures and $15 million for operational assistance grants for FY2012 through FY2013. The bill was referred to the House Committee on Small Business on September 8, 2011. No further action was taken on the bill.", "As mentioned earlier, no bills have been introduced since the 112 th Congress concerning the NMVC program."], "subsections": []}, {"section_title": "Related SBIC Program Developments", "paragraphs": ["P.L. 111-5 , the American Recovery and Reinvestment Act of 2009 (ARRA), included provisions designed to encourage SBIC investments in low-income areas. The act allowed an SBIC licensed on or after October 1, 2009, to elect to have a maximum leverage amount of $175 million instead of $150 million (later increased to $175 million) if that SBIC has invested at least 50% of its financings in low-income geographic areas, as defined under the NMVC program, and certified that at least 50% of its future investments will be in low-income geographic areas. ARRA also increased the maximum amount of leverage available for two or more licenses under common control to $250 million from $225 million if these requirements are met.", "In addition, on April 7, 2011, the SBA announced a $1 billion impact investment SBIC initiative (providing up to $150 million in leverage in FY2012 and up to $200 million in leverage per fiscal year thereafter until the limit is reached). ", "Under this initiative, SBA-licensed impact investment debenture SBICs are required to invest at least 50% of their financings, \"which target areas of critical national priority including underserved markets and communities facing barriers to access to credit and capital.\" To receive an impact investment, a small business must meet at least one of the following criteria: ", "be located in or, at the time of the initial investment, have at least 35% of its full-time employees residing in an LMI zone as defined in 13 C.F.R. Section 107.50 or be located in an economically distressed area as defined by Section 3011\u00a0of the Public Works and Economic Development Act of 1965, as amended (an area with per capita income of 80% or less of the national average or an unemployment rate that is, for the most recent 24-month period for which data are available, at least 1% greater than the national average unemployment rate); or be in an industrial sector that the SBA has identified as a national priority (currently clean energy, education, and advanced manufacturing).", "Initially, an impact investment SBIC could receive up to $80 million in SBA leverage. On June 6, 2013, the SBA announced that it was increasing the maximum leverage available to impact investment SBICs to $150 million.", "On September 25, 2014, the SBA announced several changes to the impact investment program designed to \"broaden access to the fund.\" The agency announced that it was continuing the program beyond FY2016. Additionally, effective October 1, 2014, among other changes, the SBA eliminated the program's $200 million collective, per-fiscal-year leverage cap; added advanced manufacturing to the list of eligible sectors; provided eligibility to businesses that receive Small Business Innovation Research or Small Business Technology Transfer grants; and permitted, through December 1, 2014, existing debenture SBICs to apply to opt into the program if they meet the program's requirements. Subject to the SBA's approval, impact investment SBICs may devise a customized definition of an \"impact investment\" during the licensing process. ", "On February 3, 2016, the SBA published a proposed rule in the Federal Register to provide regulations for impact investment SBICs regarding licensing, leverage eligibility, fees, and reporting and compliance requirements. The proposed regulations were an indication of the SBA's intent at that time to continue the impact investment SBIC initiative indefinitely.", "At the end of FY2018, there were nine licensed, impact investment SBICs (two in 2011, one in 2012, two in 2014, two in 2015, and two in 2016). As of September 30, 2018, they managed more than $905 million in assets and had investments in 81 small businesses. During FY2018, these SBICs invested $106.8 million in 35 small businesses.", "After reviewing the impact investment SBIC initiative's performance, on September 28, 2017, the SBA's Office of Investment and Innovation (OII) published a letter addressed to SBIC participants, applicants, and all other interested parties indicating that as of November 1, 2017, it would no longer accept new management assessment questionnaires from applicants interested in participating in the impact investment SBIC initiative. The letter indicated that the SBA was also terminating the 2011/2012 Impact Investment Fund Policy letter that the SBA had used to form the initiative's impact investment fund. The OII's letter indicated that the SBA was taking these actions for several reasons, including that \"few qualified funds applied to be licensed as Impact SBICs,\" that \"many of these SBICs would have applied to the SBIC program regardless of the existence of the Impact Policy,\" and \"the results produced were not commensurate with the time and resources expended by SBA to maintain it.\" In addition, on June 11, 2018, the SBA published a notice in the Federal Register withdrawing the proposed rule published on February 3, 2016, that would have created regulations for the impact investment SBIC initiative because the \"SBA has determined that the cost is not commensurate with the benefits.\""], "subsections": []}, {"section_title": "Concluding Observations", "paragraphs": ["The SBA's LMI and impact investment initiatives are designed to encourage SBIC investments in LMI areas. In recent years, the amount of SBIC program investments in LMI zones has generally increased (see Table 1 ). The NMVC program is no longer active (it does not have any active unpaid principal balance) and the amount and number of its financings were lower than anticipated by its original sponsors and below levels desired by its advocates. Some argue that the increased levels of SBIC investments in LMI areas in recent years, coupled with the SBA's efforts to encourage SBIC investments in such areas, may diminish the need for the NMVC program. NMVC advocates disagree.", "In FY2018, SBICs provided 609 financings totaling $1.026 billion to small businesses located in a LMI income area, an average investment of $1.685 million. NMVC advocates argue, as Senator Bond did when the NMVC program was proposed, that the NMVC program targets small businesses seeking much smaller investments.", "The debate over the NMVC program's future, particularly whether the program should be provided additional funding, is, in many ways, reflective of broader disagreements about the role of government, and the SBA, in private enterprise. Some believe the federal government and the SBA should take an active role in assisting small businesses to access capital\u2014through the provision of loan guarantees, equity financing, and management training\u2014to further the economic recovery. In their view, the SBA's programs fill a market niche by providing loans to small businesses unable to get credit elsewhere, equity financings to small businesses often overlooked by private investors, and training for new and aspiring entrepreneurs unable to find affordable training elsewhere. They assert that increasing funding for the NMVC program will create jobs by making capital available to entrepreneurs unable to find it in the private marketplace.", "Others worry about the long-term adverse economic effects of the federal deficit. Instead of supporting increased funding for federal spending programs, they advocate business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to assist small businesses, generate economic growth, and create jobs. They are particularly interested in achieving greater government efficiency by eliminating federal spending programs, such as the NMVC program, that they perceive are duplicative of others."], "subsections": [{"section_title": "Appendix. Legislative Efforts to Provide Additional Funding for the NMVC Program", "paragraphs": [], "subsections": []}]}]}}
{"id": "R45653", "title": "Congressional Subpoenas: Enforcing Executive Branch Compliance", "released_date": "2019-03-27T00:00:00", "summary": ["Congress gathers much of the information necessary to oversee the implementation of existing laws or to evaluate whether new laws are necessary from the executive branch. While executive branch officials comply with most congressional requests for information, there are times when the executive branch chooses to resist disclosure.", "When Congress finds an inquiry blocked by the withholding of information by the executive branch, or where the traditional process of negotiation and accommodation is inappropriate or unavailing, a subpoena\u2014either for testimony or documents\u2014may be used to compel compliance with congressional demands. The recipient of a duly issued and valid congressional subpoena has a legal obligation to comply, absent a valid and overriding privilege or other legal justification. But the subpoena is only as effective as the means by which it may be enforced. Without a process by which Congress can coerce compliance or deter non-compliance, the subpoena would be reduced to a formalized request rather than a constitutionally based demand for information.", "Congress currently employs an ad hoc combination of methods to combat non-compliance with subpoenas. The two predominant methods rely on the authority and participation of another branch of government. First, the criminal contempt statute permits a single house of Congress to certify a contempt citation to the executive branch for the criminal prosecution of an individual who has willfully refused to comply with a committee subpoena. Once the contempt citation is received, any prosecution lies within the control of the executive branch. Second, Congress may try to enforce a subpoena by seeking a civil judgment declaring that the recipient is legally obligated to comply. This process of civil enforcement relies on the help of the courts to enforce congressional demands.", "But these mechanisms do not always ensure congressional access to requested information. Recent controversies could be interpreted to suggest that the existing mechanisms are at times inadequate\u2014particularly in the instance that enforcement is necessary to respond to a current or former executive branch official who has refused to comply with a subpoena. There would appear to be several ways in which Congress could alter its approach to enforcing committee subpoenas issued to executive branch officials. These alternatives include the enactment of laws that would expedite judicial consideration of subpoena-enforcement lawsuits filed by either house of Congress; the establishment of an independent office charged with enforcing the criminal contempt of Congress statute; or the creation of an automatic consequence, such as a withholding of appropriated funds, triggered by the approval of a contempt citation. In addition, either the House or Senate could consider acting on internal rules of procedure to revive the long-dormant inherent contempt power as a way to enforce subpoenas issued to executive branch officials. Yet, because of the institutional prerogatives that are often implicated in inter-branch oversight disputes, some of these proposals may raise constitutional concerns."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Through its investigative powers, Congress gathers information it considers necessary to oversee the implementation of existing laws or to evaluate whether new laws are necessary. This \"power of inquiry\" is essential to the legislative function and derives directly, though implicitly, from the Constitution's vesting of legislative power in the Congress.", "The information that Congress seeks, whether to inform itself for lawmaking purposes or to conduct oversight, often lies in the executive branch's possession. And while executive branch officials comply with most congressional requests for information, \"experience has taught that mere requests\" can sometimes be \"unavailing,\" and that \"information which is volunteered is not always accurate or complete . . . .\" The Supreme Court has therefore determined that \"some means of compulsion [is] essential\" for Congress \"to obtain what is needed.\" When Congress finds an inquiry blocked by the withholding of information, or where the traditional process of negotiation and accommodation is considered inappropriate or unavailing, a subpoena\u2014either for testimony or documents\u2014may be used to compel compliance with congressional demands. An individual\u2014whether a member of the public or an executive branch official\u2014has a legal obligation to comply with a duly issued and valid congressional subpoena, unless a valid and overriding privilege or other legal justification permits non-compliance. The subpoena, however, is only as effective as the means by which it is potentially enforced. Without a process by which Congress can coerce compliance or deter non-compliance, the subpoena would be reduced to a formalized request rather than a constitutionally based demand for information. ", "Congress currently employs an ad hoc combination of methods to combat non-compliance with subpoenas. The two predominant methods rely on the authority and participation of another branch of government. First, the criminal contempt statute permits a single house of Congress to certify a contempt citation to the executive branch for the criminal prosecution of an individual who has willfully refused to comply with a committee subpoena. Once the contempt citation is received, any later prosecution lies within the control of the executive branch. Second, Congress may try to enforce a subpoena by seeking a civil judgment declaring that the recipient is legally obligated to comply. This process of civil enforcement relies on the help of the courts to enforce congressional demands. ", "Congress has only rarely resorted to either criminal contempt or civil enforcement to combat non-compliance with subpoenas. In most circumstances involving the executive branch, committees can obtain the information they seek through voluntary requests or after issuing (but not yet seeking enforcement of) a subpoena. Even where the executive branch is initially reluctant to provide information, Congress can use the application of various forms of legislative leverage, along with an informal political process of negotiation and accommodation, to obtain what it needs. Congress exercises substantial power over the executive branch by controlling agency authority, funding, and, in the case of the Senate, confirmation of executive officers. The use or threatened use of these powers in a way that would impose burdens on an agency can encourage compliance with subpoenas (or make it more likely that requested information will be provided without need to issue a subpoena) and solidify Congress's position when trying to negotiate a compromise during an investigative dispute with the executive branch. ", "But legislative leverage and the subpoena enforcement mechanisms do not always ensure congressional access to requested information, particularly from the executive branch. Recent controversies could be interpreted to suggest that the existing mechanisms are at times inadequate\u2014at least in the relatively rare instance that enforcement is necessary to respond to a current or former executive branch official who has refused to comply with a subpoena.", "Four times since 2008, the House of Representatives has held an executive branch official (or former official) in criminal contempt of Congress for denying a committee information subpoenaed during an ongoing investigation. In each instance the executive branch determined not to bring the matter before a grand jury. In three of the four instances, the House also looked to the federal courts for civil enforcement of the outstanding subpoena. The committees involved eventually obtained much of the information sought through those lawsuits, but only after prolonged litigation, and, in one of the cases, only after a judicial decision that could be viewed as potentially hindering Congress's access to executive branch information in the future.", "The House's decision to resort to criminal contempt of Congress and civil enforcement in these cases was not without controversy, as in each instance the executive official asserted that a constitutional privilege limited Congress's right to the information sought. This report will not address whether the officials in each case invoked a valid privilege or whether the privilege asserted was adequate to justify withholding information from Congress. Nor will this report address whether, under the circumstances, it was appropriate for Congress to exercise its contempt power. Rather, this report will examine the legal enforcement of congressional subpoenas in a contemporary and historical context and discuss legal issues associated with alternative subpoena-enforcement frameworks that Congress may consider to obtain information from the executive branch. "], "subsections": []}, {"section_title": "The Current Process: Criminal Contempt and Civil Enforcement of Subpoenas", "paragraphs": ["Besides leveraging its general legislative powers, Congress currently relies on two formal legal mechanisms to enforce subpoenas: criminal contempt of Congress and civil enforcement of subpoenas in the federal courts. "], "subsections": [{"section_title": "Criminal Contempt of Congress", "paragraphs": ["The criminal contempt of Congress statute, enacted in 1857 and only slightly modified since, makes the failure to comply with a duly issued congressional subpoena a criminal offense. The statute, now codified under 2 U.S.C. \u00a7 192, provides that any person who \"willfully\" fails to comply with a properly issued committee subpoena for testimony or documents is guilty of a misdemeanor, punishable by a substantial fine and imprisonment for up to one year. ", "The criminal contempt statute outlines the process by which the House or Senate may refer the non-compliant witness to the Department of Justice (DOJ) for criminal prosecution. Under 2 U.S.C. \u00a7 194, once a committee reports the failure to comply with a subpoena to its parent body, the President of the Senate or the Speaker of the House is directed to \"certify[] the statement of facts . . . to the appropriate United States attorney, whose duty it shall be to bring the matter before the grand jury for its action.\" The statute does not expressly require approval of the contempt citation by the committee's parent body, but both congressional practice and judicial decisions suggest that approval may be necessary. Although approval of a criminal contempt citation under \u00a7 194 appears to impose a mandatory duty on the U.S. Attorney to submit the violation to a grand jury, the executive branch has repeatedly asserted that it retains the discretion to determine whether to do so.", "A successful contempt prosecution may lead to criminal punishment of the witness in the form of incarceration, a fine, or both. Because the criminal contempt statute is punitive, its use is mainly as a deterrent. In other words, while the threat of criminal contempt can be used as leverage to encourage compliance with a specific request, a conviction does not necessarily lead to release of the information to Congress. "], "subsections": []}, {"section_title": "Civil Enforcement of Subpoenas", "paragraphs": ["Congress may also choose to enforce a subpoena through a civil suit in the federal courts by a process known as civil enforcement. Under this process, either house of Congress may unilaterally authorize one of its committees or another legislative entity to file a suit in federal district court seeking a court order declaring that the subpoena recipient is legally required to comply with the demand for information. In the past, this authorization has been provided through a simple House or Senate resolution. ", "Federal law provides the jurisdictional basis for the Senate's exercise of its civil enforcement power. Under 28 U.S.C. \u00a7 1365, the U.S. District Court for the District of Columbia (D.C. District Court) has jurisdiction \"over any civil action brought by the Senate or committee or subcommittee of the Senate to enforce . . . any subpoena.\" The law, however, makes clear that the grant of jurisdiction \"shall not apply\" to an action to enforce a subpoena issued to an executive branch official acting in his or her official capacity who has asserted a \"governmental privilege.\" Yet at least one district court has suggested that the limitation found within \u00a7 1365 does not necessarily bar the courts from exercising jurisdiction over Senate claims to enforce a subpoena against an executive official under other jurisdictional provisions. ", "The House has no corresponding statutory framework for beginning a civil enforcement lawsuit, but still retains the authority to seek assistance from the courts. Recent practice, approved by the D.C. District Court, suggests that the House may authorize a committee or other entity to file a civil claim in federal court to enforce a subpoena on behalf of the body. This process has been used on various occasions to bring civil enforcement lawsuits against an executive branch official. ", "As opposed to criminal contempt, a successful civil enforcement suit generally has the benefit of securing compliance with the congressional subpoena\u2014meaning the committee may obtain the information it seeks. If the court orders compliance with the subpoena and disclosure of the information, generally after finding both that the subpoena is valid and that the individual has not invoked an adequate privilege justifying non-compliance, continued defiance may lead to contempt of court as opposed to contempt of Congress. "], "subsections": []}, {"section_title": "The Current Process in Use", "paragraphs": ["Modern congressional disputes with the executive branch over access to information provide insight into the functioning of both the criminal contempt of Congress and civil enforcement processes. "], "subsections": [{"section_title": "The Burford Contempt", "paragraphs": ["In 1982, a pair of House committees issued subpoenas to Environmental Protection Agency (EPA) Administrator Anne Burford for litigation documents relating to EPA's enforcement of the federal \"Superfund\" law. At the direction of President Ronald Reagan, Administrator Burford refused to disclose the files on the ground that they were protected by executive privilege. In response, the House approved a criminal contempt citation under 2 U.S.C. \u00a7 192 and \u00a7 194 for Burford's failure to comply with the committee subpoenas. ", "Shortly after passage of the contempt resolution, and before the Speaker delivered the citation to the U.S. Attorney, the DOJ filed a lawsuit asking a federal court to declare that Administrator Burford had acted appropriately in withholding the litigation documents. The lawsuit was ultimately dismissed, with the court determining that judicial intervention in such executive-legislative disputes \"should be delayed until all possibilities for settlement have been exhausted.\" That point, the court reasoned, would not occur until Administrator Burford was prosecuted for criminal contempt of Congress. The U.S. Attorney subsequently refused to present the criminal contempt to a grand jury, asserting that despite the apparently mandatory language of 2 U.S.C. \u00a7 194, the statute left him with discretion to withhold the citation. Two separate compromises were ultimately reached in which both congressional committees were provided access to the subpoenaed documents, at least partly in exchange for proposing a resolution effectively withdrawing the contempt citation.", "Shortly thereafter, the DOJ Office of Legal Counsel (OLC), which acts as a legal adviser to the President and the executive branch, released an opinion articulating the legal reasoning underlying the Administration's decision not to pursue a contempt prosecution against Administrator Burford. Based on both statutory interpretation and the constitutional separation of powers, the OLC concluded that (1) Congress \"may not direct the Executive to prosecute a particular individual without leaving any discretion to the Executive to determine whether a violation of the law has occurred,\" and (2) \"the contempt of Congress statute was not intended to apply and could not constitutionally be applied to an Executive Branch official who asserts the President's claim of executive privilege . . . .\" Specifically, the opinion asserted that interpreting 2 U.S.C. \u00a7 194 as requiring the executive branch to bring a criminal contempt prosecution under these circumstances would \"burden\" and \"nullif[y]\" the President's exercise of executive privilege, and impermissibly interfere with the \"prosecutorial discretion of the Executive by directing the executive branch to prosecute particular individuals.\""], "subsections": []}, {"section_title": "The Miers and Bolten Contempts", "paragraphs": ["In 2007, former White House Counsel Harriet Miers and White House Chief of Staff Joshua Bolten failed to comply with subpoenas issued by the House Judiciary Committee for testimony and documents relating to the dismissal of various United States Attorneys during the George W. Bush Administration. The President asserted executive privilege in each case, asserting that the subpoenaed testimony and documents involved protected White House communications. Both Miers and Bolten relied on the President's determination as justification for non-compliance with the committee subpoenas. After failed negotiations, the House held both individuals in criminal contempt of Congress and\u2014presumably in response to the position taken by the DOJ in the Burford contempt\u2014simultaneously approved a separate resolution authorizing the Judiciary Committee to initiate a civil lawsuit in federal court to enforce the subpoenas. After receiving the criminal contempt citation, the Attorney General informed the Speaker that the DOJ would exercise its discretion and not take any action to prosecute Mr. Bolten or Ms. Miers for criminal contempt of Congress. The DOJ's position, as in the Burford contempt, was that requiring such a prosecution would inhibit the President's ability to assert executive privilege and infringe on the DOJ's prosecutorial discretion. Shortly thereafter, the House Judiciary Committee filed suit, asking the federal court to direct compliance with the subpoenas. ", "In Committee on the Judiciary v Miers , the D.C. District Court rejected the Administration's main argument that a senior presidential adviser asserting executive privilege at the direction of the President is immune from being compelled to testify before Congress. The court described the asserted immunity as \"entirely unsupported by existing case law\" and instead held that Ms. Miers had to appear, but was free to assert executive privilege \"in response to any specific questions posed by the Committee. \" Thus, Ms. Miers could still assert the protections of executive privilege during her testimony depending on the substance of any individual question asked by a Member of the Committee. As for Mr. Bolten, the court directed that the executive branch produce a \"detailed list and description of the nature and scope of the documents it seeks to withhold on the basis of executive privilege\" to allow the court to resolve those claims. The district court decision was appealed. Almost two years after the first subpoena was issued, with the appeal pending before the U.S. Court of Appeals for the D.C. Circuit (D.C. Circuit) and a newly elected Congress and President in office, the parties reached a settlement and the case was dismissed. Under that settlement, most of the requested documents were provided to the Committee and Ms. Miers would testify, under oath, in a closed but transcribed hearing."], "subsections": []}, {"section_title": "The Holder Contempt", "paragraphs": ["In 2012, Attorney General Eric Holder failed to comply with a House Oversight and Government Reform Committee subpoena seeking documents relating to misleading communications made by the DOJ in response to the committee's ongoing investigation into operation Fast and Furious\u2014a Bureau of Alcohol, Tobacco, Firearms, and Explosives operation in which firearms were permitted to be \"walked,\" or trafficked, to gunrunners and other criminals in Mexico. Like the previous controversies, the President asserted executive privilege over the pertinent documents and directed the Attorney General not to comply with the subpoena. Procedurally, the Holder controversy mirrored that of Miers and Bolten. The House held the Attorney General in criminal contempt of Congress and simultaneously passed a resolution authorizing the committee to enforce the subpoena in federal court. The DOJ shortly thereafter informed the Speaker that it would not take any action on the criminal contempt citation, again citing congressional encroachments on executive privilege and prosecutorial discretion. The committee responded by filing a lawsuit, authorized by House resolution, seeking judicial enforcement of the subpoena. ", "The D.C. District Court held that it had jurisdiction to hear the dispute in 2013 and denied the committee's motion for summary judgment in 2014. But it was not until 2016\u2014in a new Congress and after Attorney General Holder had left his position\u2014that the D.C. District Court issued an opinion in Committee on Oversight and Government Reform v. Lynch instructing the new Attorney General to comply with the subpoena. The court rejected the DOJ's argument that the deliberative process privilege\u2014a prong of executive privilege that protects pre-decisional and deliberative agency communications\u2014justified withholding the subpoenaed documents in the case. In \"balancing the competing interests\" at stake, the court held that the asserted privilege must yield to Congress's \"legitimate need\" for the documents. ", "Despite the committee's victory, two aspects of the court's reasoning may affect Congress's ability to obtain similar documents from the executive branch. First, in denying the committee's earlier motion for summary judgment, the court rejected the argument that the deliberative process privilege can never justify withholding documents in the face of a congressional subpoena. While a previous D.C. Circuit decision had suggested that the deliberative process privilege is a \"common law\" privilege, typically subject to override by legislative action, the district court determined that \"there is an important constitutional dimension to the deliberative process aspect of the executive privilege.\" Although the scope of the deliberative process privilege remains unsettled, by explicitly concluding that it has some degree of constitutional foundation the court's decision might have strengthened the privilege in certain contexts, especially for its use in response to a congressional subpoena. ", "Second, in ordering disclosure of the subpoenaed material, the court emphasized that the substance of the DOJ's internal deliberations had been publicly disclosed as part of a DOJ Inspector General investigation and report. Thus, in considering the DOJ's interests, the court noted that the agency would suffer only \"incremental harm\" from disclosing the documents to the committee. This suggests that in a scenario where deliberative process privilege documents have not been disclosed, a court may give more weight than the Lynch court to the agency's interest in protecting the confidentiality of its communications. ", "Although the committee won the case, it still appealed the decision to the D.C. Circuit out of concern for the reasoning applied. As with Miers , the litigation has spanned different Congresses and different presidential Administrations. The case is being held in abeyance pending a potential settlement between the committee and the Trump Administration. Although the parties reportedly reached a negotiated settlement in March 2018, that settlement was contingent upon the vacation of two specific orders issued by the district court earlier in the case. In October 2018, the district court declined to vacate those decisions, leaving the fate of the negotiated settlement uncertain. "], "subsections": []}, {"section_title": "The Lerner Contempt", "paragraphs": ["Finally, in 2013, former Internal Revenue Service (IRS) official Lois Lerner appeared before the House Oversight and Government Reform Committee for a hearing on allegations that the IRS had given increased scrutiny to conservative political groups applying for tax-exempt status. After Ms. Lerner provided an opening statement denying any wrongdoing, she invoked her Fifth Amendment privilege against self-incrimination, and refused to respond to questions from committee members. After further deliberation, the committee ruled that she had waived her Fifth Amendment privilege by making an opening statement proclaiming her innocence. About 10 months later, the committee recalled her to provide testimony and she again asserted her Fifth Amendment privilege. Ultimately, the House adopted a resolution citing Ms. Lerner for criminal contempt of Congress, but did not choose to approve a resolution authorizing the committee to pursue civil enforcement of the subpoena in federal court, as had been done in 2008 with Ms. Miers and 2012 with Attorney General Holder. The U.S. Attorney for the District of Columbia later informed the Speaker that Ms. Lerner's actions did not warrant a prosecution for criminal contempt, as he had determined that she had not waived her Fifth Amendment rights. This decision was notable in that unlike the Burford, Miers, Bolten, and Holder scenarios, Ms. Lerner was relying on a personal privilege rather than the President's assertion of executive privilege as justification for her non-compliance."], "subsections": []}, {"section_title": "Implications of Recent Practice", "paragraphs": ["A pair of observations may be gleaned from the above events. First, efforts to punish an executive branch official for non-compliance with a committee subpoena through the criminal contempt of Congress statute will likely prove unavailing in certain circumstances. For example, when the President directs or endorses the non-compliance of the official, such as when the official refuses to disclose information pursuant to the President's decision that the information is protected by executive privilege, past practice suggests that the DOJ is unlikely to pursue a prosecution for criminal contempt. As a result, it would appear arguable that there is not currently a credible threat of prosecution for violating 2 U.S.C. \u00a7 192 when an executive branch official refuses to comply with a congressional subpoena at the direction of the President. ", "Even when the official is not acting at the clear direction of the President, as in the Lerner controversy, the executive branch has contended that it retains the authority to make an independent assessment of whether the official (or former official) has in fact violated the criminal contempt statute. If the executive branch determines either that the statute has not been violated or that a defense is available that would bar the prosecution, then it may\u2014in an exercise of discretion\u2014leave a congressional citation unenforced. The criminal contempt statute, therefore, may have limited utility as a deterrent to non-compliance with congressional subpoenas by executive branch officials faced with similar circumstances. ", "Second, seeking enforcement of congressional subpoenas in the courts, even when successful, may lead to significant delays in Congress obtaining the sought-after information. This shortcoming was apparent in Miers and the Fast and Furious litigation. Miers , which never reached a decision on the merits by the D.C. Circuit, was dismissed at the request of the parties after about 19 months. Similarly, the Fast and Furious litigation, which remains pending on appeal before the D.C. Circuit, was filed more than six years ago. The passage of time, together with the intervening congressional and presidential elections in each case, could be said to have diminished both the value of the disclosure and the committee's ability to engage in effective, timely oversight. ", "Relying on civil enforcement also involves the risk to Congress that the court will reach a decision that will make it harder for committees to obtain information in the future. For example, while the Miers decision rejected absolute immunity for senior presidential advisers and may have removed a barrier to Congress's access to such testimony in the future, the district court opinions in the Fast and Furious litigation may have more limiting effect on congressional efforts to access testimony by certain executive branch officials, because the court recognized that the deliberative process privilege has constitutional roots and must be balanced against Congress's need for the information. "], "subsections": []}]}]}, {"section_title": "The Historical Process: Inherent Contempt", "paragraphs": ["Historically, the House and Senate relied on their own institutional power to not only enforce congressional subpoenas, but also to respond to other actions that either house viewed as obstructing their legislative processes or prerogatives. Indeed, the criminal contempt statute was not enacted until 1857, and the courts do not appear to have entertained a civil action to enforce a congressional subpoena against an executive official until the Watergate era. For much of American history the House and Senate instead used what is known as the inherent contempt power to enforce their investigative powers. ", "The inherent contempt power is a constitutionally based authority given to each house to unilaterally arrest and detain an individual found to be \"obstruct[ing] the performance of the duties of the legislature.\" The power is therefore broader in scope than the criminal contempt statute in that it may be used not only to combat subpoena non-compliance, but also in response to other actions that could be viewed as \"obstructing\" or threatening either house's exercise of its legislative powers. ", "In practice, the inherent contempt power has been exercised using a multi-step process. Upon adopting a House or Senate resolution authorizing the execution of an arrest warrant by that chamber's Sergeant-at-Arms, the individual alleged to have engaged in contemptuous conduct is taken into custody and brought before the House or Senate. A hearing or \"trial\" follows in which allegations are heard and defenses raised. Although generally occurring before the full body, it would appear likely that the contempt hearing could also permissibly take place before a congressional committee who reports its findings to the whole House or Senate. If judged guilty, the House or Senate may then direct that the witness be detained or imprisoned until the obstruction to the exercise of legislative power is removed. Although the purpose of the detention may vary, for subpoena non-compliance the use of the power has generally not been punitive. Rather, the goal is to detain the witness until he or she discloses the information sought, but not beyond the end of the Congress. ", "Despite its title, \"inherent\" contempt is more accurately characterized as an implied constitutional power. The Supreme Court has repeatedly held that although the contempt power is not specifically granted by the Constitution, it is still \"an essential and appropriate auxiliary to the legislative function,\" and thus implied from the general vesting of legislative powers in Congress. The Court has viewed the power as one rooted in self-preservation, concluding that the \"power to legislate\" includes an \"implied right of Congress to preserve itself\" by dealing \"with direct obstructions to its legislative duties\" through contempt. ", "The Court has also suggested that Congress may effectuate this implied power through the Necessary and Proper Clause, which authorizes Congress to \"make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers . . . .\" The 1857 criminal contempt provision, for example, has been viewed as \"an act necessary and proper for carrying into execution the powers vested in . . . each House.\" To that end, it seems understood that the criminal contempt statute was intended to supplement each house's inherent contempt power, rather than to replace it. The Supreme Court has specifically articulated this view and, in fact, gone further to suggest that \"Congress could not divest itself, or either of its Houses, of the essential and inherent power to punish for contempt.\" Historical practice also supports this conclusion, as Congress continued to use the inherent contempt power after enactment of the criminal contempt statute. ", "As applied to subpoena enforcement, the Supreme Court has affirmed the existence of each house's constitutionally based authority to arrest and detain individuals for refusing to comply with congressional demands for information. The 1927 case of McGrain v. Daugherty may be viewed as the high-water mark of the judiciary's recognition of this power. McGrain arose from a Senate investigation into the alleged failure of the Attorney General to prosecute federal antitrust violations associated with the Teapot Dome Scandal. As part of that investigation, a subpoena was issued to Mallie Daugherty, the brother of the Attorney General and president of an Ohio bank, for relevant testimony. When Daugherty refused to comply, the Senate exercised its inherent contempt power and ordered its Sergeant-at-Arms to take Mr. Daugherty into custody. Once arrested, Daugherty filed a writ of habeas corpus with the local district court, which, upon review, held the House's action unlawful and directed that Daugherty be discharged from the Sergeant-at-Arm's custody. The Supreme Court reversed and upheld the House's authority to arrest and detain a witness in order to obtain information for legislative purposes\u2014noting that \"[t]he power of inquiry\u2014with process to enforce it\u2014is an essential and appropriate auxiliary to the legislative function.\" In an oft-quoted passage, the Court declared: ", "A legislative body cannot legislate wisely or effectively in the absence of information respecting the conditions which the legislation is intended to affect or change; and where the legislative body does not itself possess the requisite information\u2014which not infrequently is true\u2014recourse must be had to others who do possess it. Experience has taught that mere requests for such information often are unavailing, and also that information which is volunteered is not always accurate or complete; so some means of compulsion are essential to obtain what is needed.", "Although broadly conceived, the Court has policed the outer confines of the inherent contempt power. In Jurney v MacCracken , the Court clarified that no act is punishable for contempt \"unless it is of a nature to obstruct the performance of the duties of the legislature.\" The Court identified two scenarios to which the power to punish would not extend: (1) where Congress lacks a \"legislative duty to be performed\" or (2) where \"the act complained of is deemed not to be of a character to obstruct the legislative process.\" ", "The first scenario is reflected in Kilbourn v. Thompson, a case in which the Court held that no person may be made subject to the contempt power unless the subject matter of the investigation giving rise to the contempt was within the body's authority. In Kilbourn , the Court ordered the release of a witness held under the contempt power after determining that the House had exceeded its authority when it authorized an investigation into a bankrupt private real-estate pool, of which the United States was a creditor pursuing payment in the bankruptcy court. The Court viewed the investigation\u2014and therefore the contempt\u2014as exceeding the House's constitutional authority because Congress had \"no general power of making inquiry into the private affairs of the citizen.\" Instead, the Court concluded that by interfering in an issue properly resolved in the bankruptcy courts, the House had \"assumed power . . . [that was] in its nature clearly judicial.\" ", "The second scenario set forth in MacCracken is reflected in Marshall v. Gordon . There it was held that a \"manifestly ill-tempered\" letter written to a committee chair was not related enough to obstructing the powers of the House to constitute a contempt. The Marshall opinion began by establishing that the exercise of the contempt power is appropriate only as \"necessary to preserve and carry out the legislative authority given\" to Congress. The power could, for example, be used to remedy", "physical obstruction of the legislative body in the discharge of its duties, or physical assault upon its members for action taken or words spoken in the body, or obstruction of its officers in the performance of their official duties, or the prevention of members from attending so that their duties might be performed, or finally with contumacy in refusing to obey orders to produce documents or give testimony which there was a right to compel. ", "The Court concluded that because the Marshall contempt was approved in response to the writing of an \"irritating\" letter, and \"not because of any obstruction to the performance of legislative duty,\" it was \"not intrinsic to the right of the House to preserve the means of discharging its legislative duties\" and thus invalid.", "Despite its potential reach, the inherent contempt power has been described by some observers as cumbersome, inefficient, and \"unseemly.\" Presumably for these reasons, it does not appear that either house has exercised its inherent contempt power to enforce subpoenas or to remove any other obstruction to the exercise of the legislative power since the 1930s. Even so, the mere threat of arrest and detention by the Sergeant-at-Arms can be used to encourage compliance with congressional demands. For example, Senator Sam Ervin, when serving as chairman of the Senate Select Committee on Presidential Campaign Activities, invoked the inherent contempt power several times to encourage compliance with the committee's requests for information during its investigation of the Nixon Administration. Although the power has long lain dormant, it remains a tool that Congress may use to enforce subpoenas. "], "subsections": []}, {"section_title": "Subpoena-Enforcement Frameworks and Their Attendant Constitutional Concerns", "paragraphs": ["Given the difficulties associated with Congress's current approach to subpoena enforcement, the House or Senate may find it desirable to consider potential alternative frameworks. Before turning to specific alternatives, it is necessary briefly to establish certain foundational separation-of-powers principles that are generally implicated in any discussion of Congress's authority to compel compliance with subpoenas issued to the executive branch. "], "subsections": [{"section_title": "Potentially Applicable Separation-of-Powers Principles", "paragraphs": ["Although the text of the Constitution distributes the legislative, executive, and judicial powers among the three branches of government, the Supreme Court generally has not endorsed an absolute separation. The allocation of powers was never intended, in the words of Justice Oliver Wendell Holmes, to cause the branches to be \"hermetically sealed,\" or divided into \"fields of black and white.\" Instead, observed Justice Robert Jackson, the separation of powers \"enjoins upon [the] branches separateness but interdependence, autonomy but reciprocity.\" It is a doctrine often characterized by ambiguity and overlap rather than bright-line rules. ", "In the subpoena-enforcement context, potential separation-of-powers concerns may arise in three principle areas: congressional exercise of executive or judicial powers; congressional infringement upon executive privilege; and procedural compliance with the constitutional requirements of bicameralism and presentment. "], "subsections": [{"section_title": "Congressional Exercise of Executive or Judicial Powers", "paragraphs": ["The separation of powers could be implicated either when Congress attempts to enforce a subpoena on its own; seeks to limit or control the executive's discretion in conducting that enforcement; or reserves for itself the ultimate right to adjudicate inter-branch disputes. These actions, at least on the surface, might implicate enforcement and adjudication powers generally granted to the executive and judicial branches, respectively. ", "While the Constitution provides Congress with \"[a]ll legislative Powers herein granted,\" it is the executive branch, and the President specifically, that is directed to \"take Care that the Laws be faithfully executed.\" In enforcing these constitutionally articulated roles, the Court has carefully proscribed attempts by Congress to preserve for itself the authority to engage in executive functions, such as the execution or implementation of law. Congress, the Court has held, may neither execute the law itself, nor appoint or control those engaged in the execution. In Bowsher v. Synar , for example, the Court struck down a provision of law that had delegated executive power to the Comptroller General, a legislative branch officer. Under the law, the Comptroller General was to use his own \"independent judgment\" to identify spending reductions to be implemented by the President that were necessary to reduce the deficit to an established target. In rejecting this arrangement, the Court held that the functions delegated to the Comptroller General were executive in nature, as he was required to \"exercise judgment concerning facts that affect the application\" and \"interpretation\" of the law, and had \"ultimate authority to determine the budget cuts to be made.\" Because \"[t]he structure of the Constitution does not permit Congress to execute the laws,\" Congress could not constitutionally delegate that authority to a legislative officer under its control.", "The Court has also clearly stated that Congress is not \"a law enforcement or trial agency.\" \"Legislative power,\" the Court has established, \"is the authority to make laws, but not to enforce them .\" Thus, \"in order to forestall the danger of encroachment 'beyond the legislative sphere,'\" Congress may not \"invest itself or its Members with . . . executive power.\" These general principles have specific application in the context of congressional investigations and contempt, in which the Court has held that \"the power to investigate must not be confused with any of the powers of law enforcement; those powers are assigned under our Constitution to the Executive and the Judiciary.\" ", "A corollary to the principle that the Constitution has assigned the law enforcement power principally to the executive branch is the notion that when engaging in that enforcement, the executive branch generally retains some degree of \"prosecutorial discretion.\" This doctrine, which derives from a mixture of constitutional principles including the separation of powers, the Take Care Clause, and the duties of a prosecutor as an appointee of the President, forms the foundation of the Court's statement in United States v. Nixon that \"the Executive Branch has exclusive authority and absolute discretion to decide whether to prosecute a case . . . .\" As noted previously, the executive branch has relied partially on prosecutorial discretion in declining to pursue some violations of criminal contempt of Congress. The scope of this discretion is not well established, especially regarding the extent that Congress can require or curtail its exercise. In any event, any attempt by Congress to mandate that the executive branch initiate a specific prosecution, including a prosecution for criminal contempt of Congress, has been opposed by the executive branch and may raise constitutional questions. ", "Just as Congress is not a law enforcer, it is similarly not a court, and may not bestow upon itself the judicial power. The Supreme Court has made clear that \"no judicial power is vested in Congress\" and has generally rebuked congressional attempts to \"try\" an individual for \"any crime or wrongdoing.\" The Constitution does not authorize Congress to exercise even \"commingled\" legislative and judicial powers. In fact, the Court has declared that such an arrangement \"would be absolutely destructive of the distinction between legislative, executive, and judicial authority which is interwoven in the very fabric of the Constitution.\" Relatedly, the Bill of Attainder Clause prohibits Congress from adjudicating specific legal disputes by taking action \"that legislatively determines guilt and inflicts punishment upon an identifiable individual without provision of the protections of a judicial trial.\"", "One might assert that these general prohibitions on Congress's exercise of executive or judicial powers would cast doubt upon Congress's historical exercise of its inherent contempt power. It could be argued that when exercising that power, Congress, both as an institution and through officials such as the Sergeant-at-Arms, is exercising executive and judicial power by acting as an arresting officer, prosecutor, and judge. But in affirming the constitutionality of the inherent contempt power, the Court has viewed the power (including the attendant arrest, hearing, and detention of the witness) as an exercise of implied legislative power and thus not in contravention of general separation-of-powers principles. Thus, in considering separation-of-powers questions that arise from the various methods by which Congress can enforce its subpoenas, it is essential to distinguish between Congress exercising its own legislative powers pursuant to the inherent contempt power, and Congress attempting to enforce and judge general statutory prohibitions such as statutory criminal contempt violations under 2 U.S.C. \u00a7 192. In short, the former is a permissible exercise of legislative power to remedy an offense against Congress, while the latter may be an impermissible exercise of executive and judicial power to remedy a criminal offense against the United States. "], "subsections": []}, {"section_title": "Executive Privilege", "paragraphs": ["The use of some contempt procedures against an executive branch official invoking executive privilege at the direction of the President could be viewed as frustrating the President's ability to protect the confidentiality of his communications\u2014a protection rooted in the separation of powers. In general, executive privilege is an implied legal doctrine that permits the executive branch to \"to resist disclosure of information the confidentiality of which [is] crucial to fulfillment of the unique role and responsibilities of the executive branch of our government.\" Because past subpoena enforcement disputes between Congress and the executive branch have involved such assertions, it is necessary to outline briefly executive privilege's general contours. ", "The Supreme Court has only rarely addressed executive privilege, but its most significant explanation of the doctrine came in the unanimous opinion of United States v. Nixon . Nixon involved the President's assertion of executive privilege in refusing to comply with a criminal trial subpoena\u2014issued upon the request of a special prosecutor\u2014for electronic recordings of conversations he had in the Oval Office with White House advisers. The Court's opinion recognized an implied constitutional privilege protecting presidential communications, holding that the \"privilege of confidentiality of presidential communications\" is \"fundamental to the operation of Government and inextricably rooted in the separation of powers.\" The justification underlying the privilege related to the integrity of presidential decisionmaking, with the Court reasoning that the importance of protecting a President's communications with his advisers was \"too plain to require further discussion,\" as \"[h]uman experience teaches that those who expect public dissemination of their remarks may well temper candor with a concern for appearances and for their own interests to the detriment of the decisionmaking process.\" ", "Even so, the Court determined that when the President asserts only a \"generalized interest\" in the confidentiality of his communications, that interest must be weighed against the need for disclosure in the given case. In conducting that balancing, the Court held that the President's \"generalized\" assertion of privilege \"cannot prevail over the fundamental demands of due process of law in the fair administration of criminal justice,\" and therefore \"must yield to the demonstrated, specific need for evidence in a pending criminal trial.\" ", "The Nixon opinion established three key characteristics of executive privilege, at least as it relates to presidential communications. First, the Court expressly rejected the assertion that the privilege was absolute. Instead, the Court found the privilege to be qualified, requiring that it be assessed in a way that balances \"competing interests\" and \"preserves the essential functions of each branch.\" Second, to protect the \"public interest in candid, objective, and even blunt or harsh opinions in presidential decisionmaking,\" the Court viewed confidential presidential communications as \"presumptively privileged.\" As a result, the Court appeared to suggest that some degree of deference is due to a President's initial determination that certain information is protected by the privilege. Moreover, the burden would appear to be on the party seeking the information to overcome that \"presumption\" through a strong showing of need for the information. Third, the Court viewed the privilege as limited to communications made \"'in performance of [a President's] responsibilities,' 'of his office,' and made 'in the process of shaping policies and making decisions. . . .'\" Thus, the privilege does not appear to apply to all presidential communications. ", "Although presidential claims of a right to protect executive branch confidentiality interests have occurred with relative frequency, the Supreme Court has not addressed executive privilege in any substantial way since the Nixon era, and, in fact, has never addressed the application of executive privilege in the context of a congressional investigation. Indeed, in Nixon , the Court explicitly disclaimed any attempt to assess the application of executive privilege in a congressional investigation, noting that \"we are not here concerned with the balance between the President's generalized interest in confidentiality . . . and congressional demands for information.\" The lower federal courts have generally sought to avoid adjudicating disputes between the executive and legislative branches over executive privilege, instead encouraging the branches to settle their differences through political resolution. Consistent with that approach, lower federal courts have suggested that judicial intervention in such disputes \"should be delayed until all possibilities for settlement have been exhausted,\" and warned that the branches should not take an \"adversarial\" approach to executive privilege disagreements, but should instead \"take cognizance of an implicit constitutional mandate to seek optimal accommodation through a realistic evaluation of the needs of the conflicting branches in the particular fact situation.\" ", "The most significant judicial analysis of executive privilege in the context of a congressional investigation is the D.C. Circuit's decision in Senate Select Committee on Presidential Campaign Activities v. Nixon . Senate Select Committee involved an attempt by the Senate Select Committee on Presidential Campaign Activities to obtain the Nixon White House tapes and other materials as part of the committee's investigation into \"illegal, improper, or unethical\" actions during the 1972 presidential election. The D.C. Circuit decision was issued shortly before the Supreme Court decision in United States v . Nixon , and contemporaneously to an impeachment investigation conducted by the House Judiciary Committee. Although ultimately siding with the President, the D.C. Circuit's opinion affirmed the qualified nature of the privilege by making clear that a President's assertion of the privilege could be overcome by a \"strong showing of need by another institution of government. . . .\" The court elaborated that Congress, in the exercise of its investigative powers, may overcome the President's presumptive privilege when it can show that \"the subpoenaed evidence is demonstrably critical to the responsible fulfillment of the Committee's function.\" Notably, the court suggested that the \"nature of the presidential conduct that the subpoenaed material might reveal,\" including President Nixon's alleged criminal misconduct, is not a significant factor in assessing whether the privilege is overcome. Instead, that analysis depends \"solely\" on the \"nature and appropriateness\" of the function the committee is carrying out. ", "The D.C. Circuit in Senate Select Committee concluded that the Select Committee on Presidential Campaign Activities had failed to make the requisite showing of need. That determination, however, appears to have been based on a pair of unique facts: first, that copies of the tapes had been provided to the House Judiciary Committee under that committee's impeachment investigation; and second, that the President had publicly released partial transcripts of the tapes. Significantly, the Select Committee sought to make the required showing by arguing it had a \"critical\" need for the tapes to carry out two separate and distinct functions. First, pursuant to its oversight function , the committee argued that the tapes were necessary to \"oversee the operations of the executive branch, to investigate instances of possible corruption and malfeasance in office, and to expose the results of its investigations to public view.\" Second, pursuant to its legislative function , the committee argued that \"resolution, on the basis of the subpoenaed tapes, of the conflicts in the testimony before it 'would aid in a determination whether legislative involvement in political campaigns is necessary' and 'could help engender the public support needed for basic reforms in our electoral system.'\" As for the oversight function, the Court held that the Select Committee failed to show the requisite need\u2014mainly because the House Judiciary Committee had already obtained the tapes. Any further investigative need by the Select Committee was therefore \"merely cumulative,\" as the tapes were already in the possession of one committee of Congress. With regard to the Select Committee's legislative functions, the court held that the particular content of the conversations was not essential to future legislation, as \"legislative judgments normally depend more on the predicted consequences of proposed legislative actions . . . than on precise reconstruction of past events.\" Any \"specific legislative decisions\" faced by the Select Committee, the court concluded, could \"responsibly be made\" based on the released transcripts.", "Given both Nixon and Senate Select Committee , it appears that executive privilege does not establish an absolute bar to Congress obtaining protected information, especially when the assertion of the privilege is based on a \"generalized interest\" in confidentiality rather than one connected to \"military, diplomatic, or sensitive national security secrets.\" Instead, the appropriate inquiry appears to be fact-specific, focusing \"solely\" on whether the investigating committee can show that the information sought is \"demonstrably critical\" to a legitimate legislative function such as oversight or the consideration of legislation. ", "Without more detailed judicial pronouncements the political branches have adopted somewhat divergent views on the scope of executive privilege. This interpretive divide has likely contributed to the frequency and intensity of inter-branch disputes over executive privilege. The executive branch has historically viewed the privilege broadly, providing protections to several different categories of documents and communications that relate to executive branch confidentiality interests. Under the executive branch's interpretation, the privilege covers, among other possible areas, presidential communications; deliberative communications within the executive branch; military, diplomatic, and national security information; and law enforcement files. Congress, however, has generally interpreted the privilege more narrowly, limiting its application to the types of core Article II duties and presidential communications referenced by the Supreme Court in Nixon , while also emphasizing that whatever the privilege's scope, it can be overcome by an adequate showing of need. ", "It appears likely that the executive branch will continue to raise constitutional objections if Congress attempts to use the contempt power to either force the disclosure of information the President considers privileged or to punish an executive branch official for asserting executive privilege. Yet judicial decisions and historical practice have set few clear legal standards for application in such disputes\u2014except to establish that neither side's power is absolute and that Congress and the President have an obligation to attempt to accommodate each other's needs. Thus, any conflict between the power of inquiry and executive privilege, either under the current system or as applied to the alternative approaches discussed in this report, would likely be governed not by bright-line rules, but by a balancing of the specific interests at play in the given dispute, and only after it had become apparent that the legislative and executive branches could not reach an acceptable settlement. How that balancing is implemented, and what legal standard is applied to evaluate an executive privilege claim made in response to a congressional subpoena, will likely depend on the type of information the privilege is asserted to protect. The courts appear to have adopted a hierarchical approach to various privileges within the executive privilege taxonomy. For example, the courts \"have traditionally shown the utmost deference\" to the executive's need to protect \"military or diplomatic secrets.\" Courts have not \"extended this high degree of deference to a President's generalized interest in confidentiality\" of his communications. Other asserted aspects of executive privilege, for example the deliberative process privilege, have been given still less weight, and must be assessed differently in the face of an exercise of Congress's investigative powers. ", "Ultimately, the framework through which Congress chooses to enforce a subpoena for information the President considers protected by executive privilege will impact the process by which executive branch assertions of the privilege are resolved. Under the criminal contempt framework, the Executive becomes the final arbiter of the appropriate scope of executive privilege by deciding whether to go forward with a criminal contempt prosecution of an official relying on the privilege. A decision not to move forward with a prosecution would generally not be subject to judicial review. Under the civil enforcement framework, the initial determination on the application of the privilege is made by the Executive, subject to judicial review if the House or Senate chooses to challenge that determination in federal court. Under inherent contempt, the initial determination on the application of the privilege is made by Congress, subject to review in the courts if the subject of the contempt proceeding challenges his detention. "], "subsections": []}, {"section_title": "Bicameralism and Presentment", "paragraphs": ["Finally, because the power to seek enforcement of a congressional subpoena is independently vested in each house, rather than in Congress as a whole, constitutional questions may be raised over whether a single house, through approval of a contempt resolution, can trigger legal consequences or impose requirements upon the executive branch without compliance with bicameralism and presentment.", "The Supreme Court has made clear that Congress must exercise its legislative power in compliance with the \"finely wrought and exhaustively considered[] procedure\" set forth in Article I, Section 7 of the Constitution, which provides that \"every Bill which shall have passed the House of Representatives and the Senate, shall, before it become a Law, be presented to the President of the United States.\" This provision establishes the bedrock constitutional principle that before legislation is given the force and effect of statutory law, it must first satisfy the requirements of bicameralism (approval by both houses of Congress) and presentment (submission to the President for his signature or veto). ", "In the seminal case INS v. Chadha , the Court relied on the bicameralism and presentment requirements to invalidate provisions of the Immigration and Nationality Act that authorized either house of Congress, by a one-house resolution, to \"veto\" an exercise of statutory authority delegated to an executive branch officer. In invalidating this \"legislative veto,\" the Court interpreted Article I, Section 7 of the Constitution as establishing that not only all bills, but all \"legislative acts\" are subject to the procedural requirements of bicameralism and presentment. The Court defined a \"legislative act\" as any action \"properly [] regarded as legislative in its character and effect\" or taken with \"the purpose and effect of altering the legal rights, duties and relations of persons. . . outside the legislative branch.\" In other words, congressional actions that have the \"force of law\" generally must comply with the Constitution's \"single, finely wrought\" process\u2014that of passage by both houses and presentment to the President.", "The Chadha opinion identified specific exceptions to the bicameralism and presentment requirements, noting that \"[c]learly, when the [Constitution's] Draftsmen sought to confer special powers on one House, independent of the other House, or of the President, they did so in explicit, unambiguous terms.\" The Constitution's impeachment provisions and those relating to Senate advice and consent to treaty ratification and the appointment of judges, ambassadors, and public officials are examples of such provisions. The Court also noted that \"[e]ach House has the power to act alone in determining specified internal matters.\" That authority, the Court added, \"only empowers Congress to bind itself and is noteworthy only insofar as it further indicates the Framers' intent that Congress not act in any legally binding manner outside a closely circumscribed legislative arena, except in specific and enumerated instances.\" ", "The contempt power does not fit neatly into the Chadha mold. Indeed, the Court may have neglected the inherent contempt power in articulating its list of exceptions to Chadha 's bicameralism and presentment requirements. Despite Chadha 's language, it does not appear that the Constitution always speaks \"explicit[ly]\" or \"unambiguous[ly]\" when conferring power to each house individually. There is no explicit constitutional language conferring the contempt power or the power of inquiry to each individual house. Rather, as discussed, these powers are implied as essential to the legislative power. Notably, no court has suggested that the exercise of the inherent contempt power by a single house of Congress, which could alter the legal rights or obligations of a detained witness, is inconsistent with the requirements of bicameralism or presentment. ", "As for the criminal contempt statute, the DOJ has asserted that interpreting that statute to require that a contempt citation be brought before the grand jury would be inconsistent with Chadha by allowing one house to place a legal requirement on a U.S. Attorney. To date, no court has had opportunity to consider the validity of the DOJ's position. But it is possible that Chadha -like concerns could be raised by alterations to the contempt framework that would allow the approval of a contempt citation by a single house to create new legal rights or restrictions or otherwise alter the legal authority that may be exercised by executive branch officials. ", "With these general separation-of-powers principles established as background, this report now considers possible subpoena-enforcement frameworks and the key legal issues they raise."], "subsections": []}]}, {"section_title": "Current Framework", "paragraphs": ["As noted previously, most congressional requests for information from the executive branch are complied with, and in those cases when there is a dispute, negotiations between the committee and the executive agency generally lead to a resolution acceptable to both parties. In the instances that Congress has resorted to its subpoena-enforcement mechanisms, the committee involved has generally been able to obtain eventually much of the information it sought. Thus, an argument can be made that the current system acts as an adequate and effective way to obtain information and deter non-compliance with congressional subpoenas in most cases. ", "However, in the rare case that actual prosecution is necessary to compel an executive branch official to comply with a subpoena, criminal contempt (as described above) would not appear to be a wholly reliable means of enforcement. Congress would instead presumably be forced to rely on the traditional process of negotiation, accommodation, and compromise to encourage compliance, or wield its other constitutional powers, such as the power of the purse, the confirmation power, impeachment, and its general legislative control over agency authority to encourage compliance by executive branch officials. ", "When necessary, each house retains the authority to utilize the courts for assistance in enforcing subpoenas. Civil enforcement in the courts, especially when an executive branch official is asserting executive privilege at the direction of the President, conforms to general pronouncements from both the judicial and executive branches. It accords with the judiciary's determination that its established authority to \"say what the law is\" includes the power to \"construe and delineate\" the scope of executive privilege and the executive branch's previous statements that civil enforcement is a permissible way to resolve the competing interests of Congress and the Executive in information access disputes. ", "But reliance on civil enforcement may have certain drawbacks. As discussed above, judicial resolution of oversight disputes can be lengthy and possibly lead to opinions that weaken Congress's oversight authority. Moreover, although a series of district court opinions have recently held civil enforcement cases arising from oversight disputes between the legislative and executive branches to be justiciable, the last appellate opinion to reach the merits of such a dispute was Senate Select Committee v. Nixon in 1977. The executive branch continues to assert the position that inter-branch oversight disputes are non-justiciable. Although such arguments have been rejected by the D.C. District Court, if an appellate court were to adopt the executive's position, that decision could leave both the existing criminal and civil enforcement avenues with only limited effect for use against an executive branch official. "], "subsections": []}, {"section_title": "Alternative Subpoenas Enforcement Frameworks", "paragraphs": ["There would appear to be several ways in which Congress could alter its approach to enforcing committee subpoenas issued to executive branch officials. But because of the separation-of-powers issues highlighted above, many of these options have potential legal concerns. The extensive ambiguity in this area results from a combination of a lack of applicable judicial precedent; the vast differences in how the executive and legislative branches interpret their own institutional powers; and the importance of practical implementation issues. "], "subsections": [{"section_title": "Establish Expedited Civil Enforcement in the Courts", "paragraphs": ["Congress could try to expedite the civil enforcement process by either statutorily establishing timetables for review or urging speedy judicial consideration of civil subpoena-enforcement cases filed in the federal judiciary by the House or Senate. For example, H.R. 4010 , introduced in the 115th Congress, would have amended 28 U.S.C. \u00a7 1365a to provide that \"it shall be the duty\" of the federal courts to \"advance on the docket and to expedite to the greatest possible extent the disposition\" of any civil enforcement lawsuit. The bill would have also provided the House and Senate with the option of having the claim heard by a three-judge panel with a direct appeal to the Supreme Court. ", "Such an approach would appear to be well within Congress's power. Congress has broad authority over the rules of procedure for federal courts, including setting general timetables for judicial consideration of \"cases and controversies.\" Various examples of expedited judicial review procedures exist elsewhere in federal law. Some provisions combine expedited review with the ability to file the lawsuit directly with a federal appellate court rather than a federal district court. ", "Federal law had provided for expedited judicial review of lawsuits filed by the Senate to enforce subpoenas. Under 28 U.S.C. \u00a7 1364(c), Senate subpoena-enforcement actions were to be set for hearing at the \"earliest practicable date\" and \"in every way to be expedited.\" Those provisions were repealed in 1984. ", "Establishing expedited judicial review of congressional subpoena-enforcement actions may mitigate some drawbacks of the current civil enforcement process. Yet even if expedited procedures lead to swifter judicial decisions, the risk remains to Congress that a reviewing court could issue a decision adverse to the legislative branch's investigative and oversight interests. Moreover, some commentators have suggested that any attempt to seek assistance from the courts to enforce Congress's own constitutional powers effectively weakens the legislative branch. "], "subsections": []}, {"section_title": "Return to the Inherent Contempt Power", "paragraphs": ["The House or Senate may also seek to utilize the inherent contempt power to enforce compliance with congressional subpoenas issued to executive branch officials. As noted, the Supreme Court has confirmed the existence of each house's independent and unilateral authority to arrest and detain individuals in order to compel compliance with a subpoena. If either the House or Senate was to revive the inherent contempt power, the chamber may consider establishing specific procedures to be followed in its exercise. Such procedures could govern consideration of an inherent contempt resolution and actions of the Sergeant-at-Arms, as well as the process by which the House or Senate would conduct the \"trial.\" These procedures could be established by a one-house resolution or\u2014if both the House and Senate seek to use uniform procedures\u2014by concurrent resolution or by statute.", "Although rare, the inherent contempt power has been used to detain executive branch officials, including for non-compliance with a congressional subpoena. During an 1879 investigation into allegations of maladministration by George F. Seward while a consul general in Shanghai, a House committee issued a subpoena to Seward for relevant documents and testimony. When Seward\u2014then an ambassador to China\u2014refused to comply, the House passed a resolution holding him in contempt and directing the Sergeant-at-Arms to take him into custody and bring him before the House. Seward was taken into custody and brought before the House, where he was ultimately released while the House considered impeachment articles. ", "In another example which gave rise to Marshall v. Gordon , the House adopted a contempt resolution directing the Sergeant-at-Arms to arrest U.S. Attorney Snowden Marshall for an insulting letter sent to a committee chair. The arrest was then made and quickly challenged in federal court, where ultimately the Supreme Court ordered Marshall released. In doing so, the Court reaffirmed the contempt power generally, but concluded that in Marshall's case the contempt was invalid as \"not intrinsic to the right of the House to preserve the means of discharging its legislative duties.\" Notably, the Court was silent on whether Marshall's status as an executive branch official had any impact on the House's exercise of the power. ", "Given these examples, and the Supreme Court's general statements on the reach of the inherent contempt power, it would appear to be within Congress's power to use inherent contempt to compel executive branch compliance with congressional subpoenas, at least in certain circumstances. But neither the Seward nor Marshall example involved an assertion of executive privilege, meaning that the Court did not need to consider what, if any, constraints that privilege may impose upon Congress's exercise of its inherent contempt authority. ", "Moreover, an attempt by Congress to arrest or detain an executive official may carry other risks. There would appear to be a possibility that, if the Sergeant-at-Arms attempted to arrest an executive official, a standoff might occur with executive branch law enforcement tasked with protecting that official. This concern is also applicable in the event that a judicial marshal enforces a judicial order of contempt against an executive official, and perhaps will always be \"attendant in high-stakes separation-of-powers controversies.\""], "subsections": [{"section_title": "Inherent Contempt and Executive Privilege", "paragraphs": ["Although any subpoena-enforcement mechanism used to override the President's assertion of executive privilege may raise constitutional considerations, use of the inherent contempt power to detain an executive official to obtain documents or testimony the President has found to be privileged would likely raise unique concerns. ", "As discussed, the 1984 OLC opinion issued in the wake of the Burford contempt concluded that the criminal contempt of Congress provision could not constitutionally be applied to an executive official asserting a President's claim of executive privilege. The alternative, the OLC argued, \"would immeasurably burden the President's ability to assert the privilege and to carry out his constitutional functions\" by requiring that subordinates risk a criminal trial and possible conviction to \"vindicate\" the privilege. In a footnote, the opinion extended that same conclusion to Congress's use of inherent contempt to \"arrest\" and \"punish\" an executive branch official invoking a President's claim of executive privilege. The OLC asserted that because the \"reach\" of the criminal contempt statute was \"intended to be coextensive with Congress's inherent civil contempt powers,\" the \"same reasoning that suggests that the criminal contempt statute could not constitutionally be applied against a Presidential assertion of privilege applies to Congress' inherent contempt powers as well.\" This argument has never been tested in court, but was alluded to in Miers . There, the district court stated that the executive branch position was not \"dispositive\" and that the court \"need not decide the issue.\" Nevertheless, the court acknowledged that \"there are strong reasons to doubt the viability of Congress's inherent contempt authority vis-a-vis senior executive officials.\" ", "An argument can be made that the OLC position is based on a conception of inherent contempt not entirely consistent with the power's historical use. For example, the criminal contempt statute does not appear to have been intended to be \"coextensive\" with inherent contempt. While 2 U.S.C. \u00a7 192 and its predecessors apply only to non-compliance with congressional subpoenas, the inherent contempt power applies to a much wider range of actions that threaten Congress's ability to discharge the legislative function. The Supreme Court also appears to have viewed the two powers as distinct, noting that they are \"separately exercised\" and \" diverso intuito .\" As opposed to prosecution under the criminal contempt statute, inherent contempt is not necessarily imposed to \"punish\" the contemnor. In the context of subpoena enforcement, inherent contempt has in fact generally been remedial rather than punitive, in that any detention has generally been lifted once the subpoena is complied with. The Supreme Court, for example, noted in 1917 that it could not identify a \"single instance where in the exertion of the power to compel testimony restraint was ever made to extend beyond the time when the witness should signify his willingness to testify . . . .\" Even so, the Court also appears to have recognized that Congress retains the authority to use the inherent contempt power \"solely\" for purposes of punishment. ", "Conflicts between the President's constitutionally implied privilege to protect confidential executive branch communications and Congress's constitutionally implied power to conduct investigative oversight prerogatives are not novel. Indeed, they have consistently arisen throughout American history, beginning as early as the first Congress when President Washington asserted that although the executive branch had a general obligation to comply with congressional requests for information, it still \"ought to refuse those [papers], the disclosure of which would injure the public.\" A full analysis of this long-standing debate is beyond the scope of this report. It is enough to suggest that historical practice and the limited case law both suggest that neither the President's executive privilege nor Congress's inherent contempt power is absolute. In the case of a conflict, judicial decisions relating to both executive privilege and Congress's oversight and contempt powers would suggest that a resolution would most appropriately come through good-faith negotiations between the political branches in which each seeks to accommodate the needs of the other. If those negotiations fail, and Congress chooses to invoke the inherent contempt power against an executive branch official claiming executive privilege, a court would likely be called upon to resolve the dispute, presumably in the posture of a habeas proceeding or a civil suit for wrongful detention. Although the scope of this review is somewhat unclear, it would seem likely that a reviewing court would engage in a fact-based balancing of interests\u2014weighing Congress's legislative or oversight need for the information against the Executive's need to maintain confidentiality in the specific instance. "], "subsections": []}, {"section_title": "Inherent Contempt and the Power to Fine: An Alternative to Detention", "paragraphs": ["The use of the inherent contempt power to arrest and detain an executive branch official asserting executive privilege at the direction of the President would likely also raise practical concerns relating to historical comity between the branches. The district court in Miers articulated this view, warning that the use of the inherent contempt power to imprison current or even former executive branch officials would \"exacerbate the acrimony between the two branches and would present a grave risk of precipitating a constitutional crisis.\" The court suggested that a \"stand-off\" between the Sergeant-at-Arms and an executive branch official would be an \"unseemly\" and \"provocative clash\" that should be avoided. ", "If Congress agrees with the sentiments expressed in the Miers opinion about the \"unseemly\" nature of directing the Sergeant-at-Arms to arrest and detain an executive branch official, it may consider imposing less onerous penalties on an official deemed guilty of contempt through the inherent contempt process. For example, the imposition of a fine or other monetary penalty, rather than detention and imprisonment, could mitigate some concerns associated with a physical arrest. Neither the House nor the Senate has ever imposed a monetary penalty through the exercise of inherent contempt, yet there may be an argument supporting the existence of that power. ", "Such an argument would likely rely both on dicta from the Supreme Court's opinion in Kilbourn v. Thomps on and an analogy to the judiciary's contempt power . In Kilbourn , the Court made a passing reference to fines during a discussion of the scope of the House's power to \"punish.\" After establishing that the House clearly had authority to punish its own Members for \"disorderly behavior,\" and perhaps the power to punish others as part of either an inquiry into a contested election or an impeachment investigation, the Court then noted that \"[w]hether the power of punishment in either House by fine or imprisonment goes beyond this or not, we are sure that no person can be punished for contumacy as a witness before either House, unless his testimony is required in a matter into which that House has jurisdiction to inquire.\" This may be interpreted to suggest that so long as punishment is appropriate, the form of punishment that may be imposed could include a fine. ", "In Anderson v. Dunn , the Court drew analogies between Congress's power and the judiciary's power to punish for contempt. The courts, the opinion noted, had been delegated authority by statute to punish contemptuous conduct with a fine, imprisonment, or both. The Court suggested, however, that the courts could have exercised the \"power to fine and imprison for contempts . . . without the aid of the statute\" pursuant to a constitutional contempt authority \"incidental to a grant of judicial power.\" The purpose of the judicial contempt statute, the Court reasoned, was to make a \"legislative declaration, that the power of punishing for contempt shall not extend beyond its known and acknowledged limits of fine and imprisonment.\" This statement could be read to suggest that the court viewed the imposition of a fine as a \"known and acknowledged\" form of punishment for inherent contempt, at least in the courts. If such a power inheres to the courts, it might also inhere to Congress as a coordinate branch of government. ", "Yet additional language from Anderson suggests that the power to punish for inherent contempt in the congressional context may be limited to imprisonment. After discussing the judicial contempt power, the Anderson opinion appears to have directly considered the scope of Congress's authority, noting that the \"extent of [Congress's] punishing power\" is", "\"the least possible power adequate to the end proposed;\" which is the power of imprisonment. It may, at first view, and from the history of the practice of our legislative bodies, be thought to extend to other inflictions. But every other will be found to be mere commutation for confinement; since commitment alone is the alternative where the individual proves contumacious.", "Despite the Court's statement that \"imprisonment\" was the \"least possible power adequate\" to remedy contemptuous conduct, monetary penalties have generally been viewed as less severe than imprisonment. The Supreme Court, for example, has viewed the imposition of a fine as a \"lesser punishment\" than the \"punishment of imprisonment.\" Still, the Court later reaffirmed the notion that imprisonment was the appropriate penalty for contempt in Marshall by stating that Anderson imposed two limitations on the contempt power: \"the power . . . is limited to imprisonment and such imprisonment may not be extended beyond the session of the body in which the contempt occurred.\" ", "It would appear, therefore, that whether Congress has the authority to impose a fine or other monetary penalty on a witness found to be in contempt by either house is an open question. However, in the case of a legal challenge to a fine, the lack of any precedent for such an assertion of power may inform a court's judgment on the appropriate reach of Congress's power. Moreover, even if Congress retains this authority, it is unclear how such a fine would be implemented and, in the case that the contemnor refuses to remit the sum, collected. "], "subsections": []}]}, {"section_title": "Provide for the Appointment of an Independent Official to Enforce Violations of the Criminal Contempt of Congress Statute", "paragraphs": ["Another proposed alternative for subpoena enforcement has been to establish statutorily a procedure for the appointment of an independent official responsible for prosecuting criminal contempt of Congress citations against executive branch officials. Such a law would seek to create an independent prosecutor authorized to make litigation and enforcement decisions, including the decision to initiate and pursue a criminal contempt prosecution pursuant to 2 U.S.C. \u00a7\u00a0192 and \u00a7 194 under reduced influence from the President and the DOJ. The independent prosecutor would retain prosecutorial discretion in enforcement decisions, but would arguably not be subject to the same \"subtle and direct\" political pressure and controls that a traditional U.S. Attorney may face. This office would likely be loosely modeled on the expired Office of Independent Counsel (Independent Counsel) established in the Independent Counsel Act of 1978 (Independent Counsel Act or ICA) and upheld by the Supreme Court in Morrison v Olson . ", "The ICA created a statutory framework by which an Independent Counsel could be appointed to investigate and prosecute high-ranking government officials for a variety of violations of federal law, including criminal contempt of Congress. The actual appointment took place under a three-step process. First, the law required that the Attorney General conduct a preliminary investigation upon receiving \"information sufficient to constitute grounds to investigate whether\" a covered federal criminal violation has occurred. Second, if the Attorney General determined that there were \"reasonable grounds to believe that further investigation is warranted,\" the Attorney General had to \"apply\" to a three-judge panel of the D.C. Circuit for the appointment of an Independent Counsel. Third, upon receipt of an application from the Attorney General, the three-judge panel had to \"appoint an appropriate independent counsel . . . .\" Thus, although the actual appointment was made by the judiciary, the Attorney General's preliminary investigation determined whether the court's appointment authority was triggered. Under the law, Congress could request an appointment of an Independent Counsel, but it could not mandate that the Attorney General initiate the appointment process. Nor was a decision by the Attorney General not to seek appointment of an Independent Counsel subject to judicial review. ", "Once appointed, the Independent Counsel had \"full power and independent authority to exercise all investigative and prosecutorial functions and powers of the Department of Justice, the Attorney General, and any other officer or employee of the Department of Justice.\" Moreover, he would exercise those powers with a substantial degree of independence established through removal protections and other provisions ensuring the Independent Counsel's authority to make investigatory and prosecutorial decisions without direction from the Attorney General. With regard to removal, the law provided that the Independent Counsel \"may be removed from office .\u00a0.\u00a0. only by the personal action of the Attorney General and only for good cause, physical or mental disability . . . or any other condition that substantially impairs the performance of such independent counsel's duties.\" ", "The ICA was upheld against constitutional challenge in the 1988 case of Morrison v. Olson . In a 7-1 decision, the Court held that the law was consistent with both the Appointments Clause and the general separation of powers. With regard to the Appointments Clause, the Court determined that the Independent Counsel was an inferior officer, and was thus not required to be appointed by the President with the advice and consent of the Senate, but could permissibly be appointed by the \"courts of law.\" As for the general separation of powers, the Court held that Congress could provide the Independent Counsel with substantial autonomy and protection from removal despite his law enforcement powers. The majority opinion reasoned that although the Independent Counsel was \"to some degree 'independent' and free from executive supervision to a greater extent than other federal prosecutors,\" the ICA still provided the Attorney General with several adequate means of \"supervising or controlling\" the Independent Counsel's prosecutorial powers, preserving in the executive branch \"sufficient control over the Independent counsel to ensure that the President is able to perform his constitutionally assigned duties.\" ", "Although subject to some external criticism in the decades since its issuance, the Morrison opinion has neither been overturned nor even directly criticized by a majority opinion of the Supreme Court. That said, the composition of the Court has changed, and its more recent decisions have arguably been more protective of executive power, specifically with regard to the President's authority to supervise and control executive branch officials. In any event, if Congress were to seek to establish an independent office for the prosecution of criminal contempt of Congress, it would seem prudent to mirror the Independent Counsel framework approved in Morrison , subject to some potential adjustments. ", "Perhaps the chief criticism of the independent counsel statute, and arguably the reason the statute was permitted to expire, was the breadth of the Independent Counsel's jurisdiction. The ICA authorized the appointment of an independent counsel to investigate and prosecute a wide array of crimes, while also providing the option for the expansion of an appointed counsel's initial jurisdiction with the approval of the three-judge panel. Strictly limiting a new Independent Counsel's jurisdiction to only the investigation and prosecution of the specific criminal contempt of Congress citation approved by either the House or the Senate, with no option for jurisdictional expansion, might sufficiently restrict the authority of the Independent Counsel to alleviate some of those concerns. ", "Congress may also seek to alter the triggering mechanism for the appointment of an independent counsel, for example, by removing the requirement for a preliminary investigation and instead simply requiring appointment by the court upon the approval of a contempt citation by either house of Congress. This alteration would prevent the Attorney General from effectively blocking an appointment at that preliminary stage by concluding that the official's non-compliance with the subpoena had legal merit. It would appear, however, that such a change could raise additional constitutional concerns to an already debated framework. Providing the Attorney General with discretion in triggering the appointment was important to the Court's ultimate approval of independent counsel provisions in Morrison . The Court noted the Attorney General's control in both discussing whether the law authorized an unconstitutional \"usurpation\" of \"executive functions\" and whether the law otherwise undermines \"the powers of the executive branch.\" Specifically, the Court noted that the special division could not appoint an independent counsel \"sua sponte,\" and that because the Attorney General retained authority over the appointment, the law gave \"the executive a degree of control over the power to initiate an investigation by the independent counsel.\" Given these statements, removal of the discretionary authority provided to the Attorney General in triggering the appointment would likely create additional avenues of legal challenge to the law. "], "subsections": []}, {"section_title": "Contingent Contempt Legislation", "paragraphs": ["Congress might also seek to establish a contingent contempt framework in which either house's approval of a contempt citation against an executive branch official automatically results in some other consequence to either the individual official who is the subject of the contempt citation or the official's agency. Like the criminal contempt of Congress provisions, such a statute would arguably be enacted as \"necessary and proper\" to Congress's enforcement of its investigative subpoena power. Any number of consequences may be built into this type of contingent framework, but perhaps the most effective approach would be to utilize Congress's power of the purse to establish some form of conditional limitation or reduction on an agency's funding that is triggered by the approval of a contempt citation against the agency's official. For example, a law might seek to establish that the approval of a contempt resolution against an executive branch official would lead to the temporary withholding of a certain percentage of the official's agency's appropriated funds until the outstanding subpoena is complied with. A law could, for example, place an obligation on the Office of Management and Budget (OMB) to restrict the release of a percentage of the applicable agency's funds at the next quarterly apportionment. Such an arrangement would use Congress's control over agency funding to encourage and incentivize agency cooperation with committee subpoenas. ", "Contingent (or conditional) legislation\u2014typically defined as legislation in which a provision is triggered, activated, or given legal effect only upon the occurrence of some future event or decision\u2014has generally been approved by the courts. That said, the triggering event built into previously approved contingent legislation has generally been an action, finding, or decision of an executive branch official. The Supreme Court has explained the purpose of this type of legislation, writing that due to the uncertainty of \"future conditions,\" Congress \"may feel itself unable conveniently to determine exactly when its exercise of the legislative power should become effective,\" and instead \"may leave the determination of such time to the decision of an Executive.\" A statute that would instead effectively leave that determination to a single house of Congress\u2014through the approval of a contempt resolution\u2014would appear to be a unique and potentially problematic arrangement. Such a statutory arrangement could arguably be viewed as an impermissible exercise of either legislative or executive power by a single house of Congress.", "The argument that tying a reduction in agency funding to the approval of a contempt resolution may represent an invalid exercise of legislative power by a single house of Congress would be based on the principles of Chadha . As noted, Chadha limited Congress's authority to wield legislative power\u2014which the Court defined as any action with \"the purpose and effect\" of \"altering the legal rights\" of those outside the legislative branch\u2014without complying with the Constitution's \"finely wrought\" process of bicameralism and presentment. Once Congress makes a legislative choice it generally must abide by that choice until \"legislatively altered or revoked.\" Thus, Congress cannot, even by statute, provide one house with the power to override or alter authority delegated to the executive branch. A contingent contempt framework that would allow one house effectively to amend an agency's legal authority to obligate funds by adopting a contempt resolution could be viewed as in tension with this principle. The executive branch, for example, has objected to legislative proposals that would create a \"permanent [contempt] mechanism to be triggered by the vote of one house,\" at least when that mechanism would \"impose. . . an affirmative legal duty\" on the executive branch. Such an arrangement, the executive has argued, would be \"contrary to the clear language and rationale of Chadha .\" ", "The limits that the Chadha decision imposes on contingent contempt legislation are difficult to assess. It is clear, for example, that in the typical legislative scenario a one-house resolution cannot constitutionally have the legal effect of altering statutorily authorized appropriations. If Congress wants to amend an appropriations provision, it generally must do so by enacting a new law. Even so, it would appear that an argument could be made that the restrictions of Chadha are either inapplicable or apply with less force in the investigative and oversight context, perhaps because it is an area in which the Constitution has implicitly authorized a single house to act with legal authority. There are a variety of existing investigative authorities that appear to allow a single house, or a single committee, to alter the legal rights and obligations of those outside the legislative branch. These include issuing a subpoena, which triggers a legal obligation to comply; the inherent contempt power, which allows one house to arrest and detain those outside the legislative branch; the criminal contempt statute, which by its terms and as interpreted by some courts appears to impose an obligation on the U.S. Attorney that flows from the approval of a contempt resolution; and the federal immunity statute, which allows a single committee or single house to obtain a court order granting a witness immunity and requiring their testimony following an assertion of the Fifth Amendment privilege against self-incrimination. Decisions of at least two federal appellate courts have explicitly recognized each house's authority to act unilaterally in the investigatory context, holding that \"[t]here is no doubt that Congress constitutionally can act, without recourse to the full legislative procedure of bicameral passage and presentment, to investigate the conduct of executive officials and others outside the legislative branch.\" Because the \"process to enforce\" investigative demands has been viewed as part of the \"power of inquiry,\" an argument could be made that laws incidental to enforcing congressional subpoenas (like contingent contempt legislation) should not be subject to bicameralism and presentment limitations. ", "The argument that tying a reduction in agency funding to the approval of a contempt resolution may represent an impermissible exercise of executive power by a single house of Congress would likely be based on the principles of Bowsher v. Synar . As discussed, in Bowsher , the Court relied on the separation of powers to invalidate a federal law that had empowered the Comptroller General, a legislative branch officer, to identify and mandate executive branch spending reductions. The Court concluded that by vesting the \"ultimate authority\" to interpret and implement the law in one of its officers, Congress had in effect \"retained control over the execution of the Act\" and unconstitutionally \"intruded into the executive function.\" Congress, the Court concluded, may \"control the execution of its enactment only indirectly . . . by passing new legislation.\" ", "As in Bowsher , it could be argued that the House and Senate would retain impermissible control over the execution of any law that ties budgetary reductions to the approval of a contempt resolution. Arguably, however, the Comptroller General's authority at issue in Bowsher could be distinguished from that exercised by the House or Senate in a contingent contempt framework. In determining that the Comptroller General was exercising executive authority, the Bowsher Court focused on the fact that the Comptroller General used his own \"interpretation\" and \"judgment\" to \"determine precisely what budgetary calculations are required\" and the \"budget cuts to be made.\" Under a contingent contempt framework that established a set percentage funding reduction the House and Senate would exercise no such \"interpretation\" or \"judgment\" in determining the cuts to be made. To the contrary, a house would have discretion in determining whether an official was in contempt (a legislative act) but would exercise no discretion in the resulting execution or implementation (an executive act) of the budget restrictions, which would be implemented in an arguably ministerial manner by the executive branch. ", "A contingent funding restriction in this context may also run into some of the same implementation obstacles as enforcement of subpoenas through criminal contempt of Congress, especially if executive privilege is being asserted. This is because the withholding of already appropriated funds would likely require the assistance of the executive branch\u2014either through OMB withholding or through DOJ enforcement of a violation of the Anti-Deficiency Act. The executive branch has objected to congressional attempts to use the spending power to encourage compliance with investigative demands in a way that \"infringe[s] on the President's constitutional authority.\" For example, in 1960 the Attorney General directed that appropriated funds \"continue to be available\" to the State Department despite the agency withholding information from Congress that triggered a conditional provision terminating certain funds if congressional requests for documents were not complied with. Thus, in a contempt dispute involving executive privilege, if the President views the contingent contempt funding restriction as a \"burden\" on his ability to assert executive privilege, he might direct the OMB not to withhold applicable funding. ", "The uncertainty associated with tying automatic funding reduction to the approval of a contempt resolution in mind, Congress may consider creating a contingent contempt framework that uses the power of the purse to reward agencies for compliance with congressional subpoenas rather than to punish them. This approach may provide the executive branch with a clear budgetary incentive to disclose subpoenaed information to a committee. For example, future appropriations bills could contain provisions that would make additional funding available (at some later point in the fiscal year) to an agency that has not had an official held in contempt of Congress. This carrot, rather than stick, approach has been used to encourage agency compliance with congressional wishes. Even though arguments may still be put forward that this arrangement raises Chadha or Bowsher concerns by giving a single house control over an agency's funding level, it may not be in the Executive's interest to challenge such a provision given that invalidation of the provision would remove agency access to the increased funds. ", "Rather than trying to establish an automatic alteration to agency funds, Congress could avoid any potential constitutional concerns by instead allowing for the introduction of a joint resolution that would provide for the withholding of the agency's funding upon the approval of a contempt citation by either house. That resolution could be given \"fast track procedures\" to encourage speedy consideration by both the House and Senate. Upon passage by the House and Senate, the joint resolution would be presented to the President. This arrangement would satisfy the requirements of bicameralism and presentment and entail no execution of the law by the legislative branch or its competent parts. The joint resolution would, however, be subject to presidential veto. ", "In the alternative, the House or Senate may establish parliamentary procedural consequences that flow from the approval of a contempt citation under each body's constitutional authority to \"determine the Rules of its Proceedings.\" For example, either the House or Senate could limit consideration of any legislative measure that would fully fund either the salary of the official held in contempt or the office in which the official works. Like other rules, such a provision would be enforceable by a point of order, and subject to waiver under the usual processes. "], "subsections": []}]}]}, {"section_title": "Conclusion", "paragraphs": ["Congress's ability to issue and enforce its own subpoenas is essential to the legislative function and an \"indispensable ingredient of lawmaking.\" That said, the prevailing enforcement mechanisms of criminal contempt of Congress and civil enforcement, both of which rely on the assistance and participation of the other branches of government, have certain drawbacks that arguably limit their effectiveness in ensuring timely compliance with congressional subpoenas by executive branch officials. As discussed, alternatives to the current framework are available, but both the constitutional separation of powers and the practical limitations arising from the political nature of congressional executive information access disputes would likely need to be considered in any potential effort at reform."], "subsections": []}]}}
{"id": "RL33388", "title": "The Committee on Foreign Investment in the United States (CFIUS)", "released_date": "2019-05-15T00:00:00", "summary": ["The Committee on Foreign Investment in the United States (CFIUS) is an interagency body comprised of nine Cabinet members, two ex officio members, and other members as appointed by the President, that assists the President in reviewing the national security aspects of foreign direct investment in the U.S. economy. While the group often operated in relative obscurity, the perceived change in the nation's national security and economic concerns following the September 11, 2001, terrorist attacks and the proposed acquisition of commercial operations at six U.S. ports by Dubai Ports World in 2006 placed CFIUS's review procedures under intense scrutiny by Members of Congress and the public. In 2018, prompted by concerns over Chinese and other foreign investment in U.S. companies with advanced technology, Members of Congress and the Trump Administration enacted the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), which became effective on November 11, 2018. This measure marked the most comprehensive revision of the foreign investment review process under CFIUS since the previous revision in 2007, the Foreign Investment and National Security Act (FINSA).", "Generally, efforts to amend CFIUS have been spurred by a specific foreign investment transaction that raised national security concerns. Despite various changes to the CFIUS statute, some Members and others question the nature and scope of CFIUS reviews. The CFIUS process is governed by statute that sets a legal standard for the President to suspend or block a transaction if no other laws apply and if there is \"credible evidence\" that the transaction threatens to impair the national security, which is interpreted as transactions that pose a national security risk.", "The U.S. policy approach to international investment traditionally established and supported an open and rules-based trading system that is in line with U.S. economic and national security interests. Recent debate over CFIUS reflects long-standing concerns about the impact of foreign investment on the economy and the role of economics as a component of national security. Some Members question CFIUS's performance and the way the Committee reviews cases involving foreign governments, particularly with the emergence of state-owned enterprises, and acquisitions involving leading-edge or foundational technologies. Recent changes expand CFIUS's purview to include a broader focus on the economic implications of individual foreign investment transactions and the cumulative effect of foreign investment on certain sectors of the economy or by investors from individual countries.", "Changes in U.S. foreign investment policy have potentially large economy-wide implications, since the United States is the largest recipient and the largest overseas investor of foreign direct investment. To date, six investments have been blocked, although proposed transactions may have been withdrawn by the firms involved in lieu of having a transaction blocked. President Obama used the FINSA authority in 2012 to block an American firm, Ralls Corporation, owned by Chinese nationals, from acquiring a U.S. wind farm energy firm located near a Department of Defense (DOD) facility and to block a Chinese investment firm in 2016 from acquiring Aixtron, a Germany-based firm with assets in the United States. In 2017, President Trump blocked the acquisition of Lattice Semiconductor Corp. by the Chinese investment firm Canyon Bridge Capital Partners; in 2018, he blocked the acquisition of Qualcomm by Broadcom; and in 2019, he directed Beijing Kunlun Co. to divest itself of Grindr LLC, an online dating site, over concerns of foreign access to personally identifiable information of U.S. citizens. Given the number of regulatory changes mandated by FIRRMA, Congress may well conduct oversight hearings to determine the status of the changes and their implications."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["The Committee on Foreign Investment in the United States (CFIUS) is an interagency committee that serves the President in overseeing the national security implications of foreign direct investment (FDI) in the economy. Since its inception, CFIUS has operated at the nexus of shifting concepts of national security and major changes in technology, especially relative to various notions of national eco nomic security, and a changing global economic order that is marked in part by emerging economies such as China that are playing a more active role in the global economy. As a basic premise, the U.S. historical approach to international investment has aimed to establish an open and rules-based international economic system that is consistent across countries and in line with U.S. economic and national security interests. This policy also has fundamentally maintained that FDI has positive net benefits for the U.S. and global economy, except in certain cases in which national security concerns outweigh other considerations and for prudential reasons. ", "Recently, some policymakers argued that certain foreign investment transactions, particularly by entities owned or controlled by a foreign government, investments with leading-edge or foundational technologies, or investments that may compromise personally identifiable information, are affecting U.S. national economic security. As a result, they supported greater CFIUS scrutiny of foreign investment transactions, including a mandatory approval process for some transactions. Some policymakers also argued that the CFIUS review process should have a more robust economic component, possibly even to the extent of an industrial policy-type approach that uses the CFIUS national security review process to protect and promote certain industrial sectors in the economy. Others argued, however, that the CFIUS review process should be expanded to include certain transactions that had not previously been reviewed, but that CFIUS' overall focus should remain fairly narrow."], "subsections": [{"section_title": "The Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA)", "paragraphs": ["In 2018, Congress and the Trump Administration adopted the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), Subtitle A of Title XVII of P.L. 115-232 (Aug. 13, 2018), which became effective on November 11, 2018. The impetus for FIRRMA was based on concerns that ''the national security landscape has shifted in recent years, and so has the nature of the investments that pose the greatest potential risk to national security ....'' As a result, FIRRMA provided for some programs to become effective upon passage, while a pilot program was developed to address immediate concerns relative to other provisions and allow time for additional resources to be directed at developing a more permanent response in these areas. Interim rules for the pilot program developed by the Treasury Department cover an expanded scope of transactions subject to a review by CFIUS to include noncontrolling investments by foreign persons in U.S. firms involved in critical technologies. A second part of the pilot program implements FIRRMA's mandatory declarations provision for all transactions that fall within the specific scope of the pilot program. The pilot program is to end no later than March 5, 2020.", "Upon enactment, FIRRMA: (1) expanded the scope and jurisdiction of CFIUS by redefining such terms as \"covered transactions\" and \"critical technologies\"; (2) refined CFIUS procedures, including timing for reviews and investigations; and (3) required actions by CFIUS to address national security risks related to mitigation agreements, among other areas. Treasury's interim rules updated and amended existing regulations in order to implement certain provisions immediately. FIRRMA also required CFIUS to take certain actions within prescribed deadlines for various programs, reporting, and other plans.", "FIRRMA also broadened CFIUS' mandate by explicitly including for review certain real estate transactions in close proximity to a military installation or U.S. government facility or property of national security sensitivities. In addition, FIRRMA: provides for CFIUS to review any noncontrolling investment in U.S. businesses involved in critical technology, critical infrastructure, or collecting sensitive data on U.S. citizens; any change in foreign investor rights; transactions in which a foreign government has a direct or indirect substantial interest; and any transaction or arrangement designed to evade CFIUS. Through a \"sense of Congress\" provision in FIRRMA, CFIUS reviews potentially can discriminate among investors from certain countries that are determined to be a country of \"special concern\" (specified through additional regulations) that has a \"demonstrated or declared strategic goal of acquiring a type of critical technology or critical infrastructure that would affect U.S. leadership in areas related to national security.\""], "subsections": []}, {"section_title": "Foreign Investment Data", "paragraphs": ["Information on international investment and production collected and published by the United Nations indicates that global annual inflows of FDI peaked in 2015, surpassing the previous record set in 2007, but has fallen since, as indicated in Figure 1 . Similarly, from 2012 through 2014, international flows of FDI fell below the levels reached prior to the 2008-2009 financial crisis, but revived in 2015. Between 2015 and 2017, FDI inflows fell by nearly $500 million to $1.4 billion, largely reflecting lower inflows to developed economies as a result of a 22% decline in cross-border merger and acquisition activity (M&As). ", "FDI inflows to developing economies also declined, but at a slower rate than among flows to developed economies, while investment flows to economies in transition continued to increase at a steady pace. Other cross-border capital flows (portfolio investments and bank loans) continued at a strong pace in 2017, contrary to the trend in direct investment. Globally, the foreign affiliates of international firms employed 73 million people in 2017, as indicted in Table 1 . Globally, the stock, or cumulative amount, of FDI in 2017 totaled about $31 trillion. Other measures of international production, sales, assets, value-added production, and exports generally indicate higher nominal values in 2017 than in the previous year, providing some indication that global economic growth was recovering.", "According to the United Nations, the global FDI position in the United States, or the cumulative amount of inward foreign direct investment, was recorded at around $7.8 trillion in 2017, with the U.S. outward FDI position of about $7.9 trillion. The next closest country in investment position to the United States was Hong Kong with inward and outward investment positions of about one-fourth that of the United States. In comparison, the 28 counties comprising the European Union (EU) had an inward investment position of $9.1 trillion in 2017 and an outward position of $10.6 trillion."], "subsections": []}]}, {"section_title": "Origins of CFIUS", "paragraphs": ["Established by an Executive Order of President Ford in 1975, CFIUS initially operated in relative obscurity. According to a Treasury Department memorandum, the Committee was established in order to \"dissuade Congress from enacting new restrictions\" on foreign investment, as a result of growing concerns over the rapid increase in investments by Organization of the Petroleum Exporting Countries (OPEC) countries in American portfolio assets (Treasury securities, corporate stocks and bonds), and to respond to concerns of some that much of the OPEC investments were being driven by political, rather than by economic, motives.", "Thirty years later in 2006, public and congressional concerns about the proposed purchase of commercial port operations of the British-owned Peninsular and Oriental Steam Navigation Company (P&O) in six U.S. ports by Dubai Ports World (DP World) sparked a firestorm of criticism and congressional activity during the 109 th Congress concerning CFIUS and the manner in which it operated. As a result of the attention by the public and Congress, DP World officials decided to sell off the U.S. port operations to an American owner. On December 11, 2006, DP World officials announced that a unit of AIG Global Investment Group, a New York-based asset management company with large assets, but no experience in port operations, had acquired the U.S. port operations for an undisclosed amount.", "The DP World transaction revealed that the September 11, 2001, terrorist attacks fundamentally altered the viewpoint of some Members of Congress regarding the role of foreign investment in the economy and the potential impact of such investment on U.S. national security. Some Members argued that this change in perspective required a reassessment of the role of foreign investment in the economy and of the implications of corporate ownership on activities that fall under the rubric of critical infrastructure. The emergence of state-owned enterprises as commercial economic actors has raised additional concerns about whose interests and whose objectives such firms are pursuing in their foreign investment activities. ", "More than 25 bills were introduced in the second session of the 109 th Congress that addressed various aspects of foreign investment following the proposed DP World transaction. In the first session of the 110 th Congress, Congress passed, and President Bush signed, the Foreign Investment and National Security Act of 2007 (FINSA) ( P.L. 110-49 ), which altered the CFIUS process in order to enable greater oversight by Congress and increased transparency and reporting by the Committee on its decisions. In addition, the act broadened the definition of national security and required greater scrutiny by CFIUS of certain types of foreign direct investment. Not all Members were satisfied with the law: some Members argued that the law remained deficient in reviewing investment by foreign governments through sovereign wealth funds (SWFs). Also left unresolved were issues concerning the role of foreign investment in the nation's overall security framework and the methods that are used to assess the impact of foreign investment on the nation's defense industrial base, critical infrastructure, and homeland security."], "subsections": []}, {"section_title": "Establishment of CFIUS", "paragraphs": ["President Ford's 1975 Executive Order established the basic structure of CFIUS, and directed that the \"representative\" of the Secretary of the Treasury be the chairman of the Committee. The Executive Order also stipulated that the Committee would have \"the primary continuing responsibility within the executive branch for monitoring the impact of foreign investment in the United States, both direct and portfolio, and for coordinating the implementation of United States policy on such investment.\" In particular, CFIUS was directed to (1) arrange for the preparation of analyses of trends and significant developments in foreign investment in the United States; (2) provide guidance on arrangements with foreign governments for advance consultations on prospective major foreign governmental investment in the United States; (3) review investment in the United States which, in the judgment of the Committee, might have major implications for U.S. national interests; and (4) consider proposals for new legislation or regulations relating to foreign investment as may appear necessary.", "President Ford's Executive Order also stipulated that information submitted \"in confidence shall not be publicly disclosed\" and that information submitted to CFIUS be used \"only for the purpose of carrying out the functions and activities\" of the order. In addition, the Secretary of Commerce was directed to perform a number of activities, including", "(1) Obtaining, consolidating, and analyzing information on foreign investment in the United States;", "(2) Improving the procedures for the collection and dissemination of information on such foreign investment;", "(3) Observing foreign investment in the United States;", "(4) Preparing reports and analyses of trends and of significant developments in appropriate categories of such investment;", "(5) Compiling data and preparing evaluation of significant transactions; and", "(6) Submitting to the Committee on Foreign Investment in the United States appropriate reports, analyses, data, and recommendations as to how information on foreign investment can be kept current.", "The Executive Order, however, raised questions among various observers and government officials who doubted that federal agencies had the legal authority to collect the types of data that were required by the order. As a result, Congress and the President sought to clarify this issue, and in the following year President Ford signed the International Investment Survey Act of 1976. The act gave the President \"clear and unambiguous authority\" to collect information on \"international investment.\" In addition, the act authorized \"the collection and use of information on direct investments owned or controlled directly or indirectly by foreign governments or persons, and to provide analyses of such information to the Congress, the executive agencies, and the general public.\"", "By 1980, some Members of Congress raised concerns that CFIUS was not fulfilling its mandate. Between 1975 and 1980, for instance, the Committee met only 10 times and seemed unable to decide whether it should respond to the political or the economic aspects of foreign direct investment in the United States. One critic of the Committee argued in a congressional hearing in 1979 that, \"the Committee has been reduced over the last four years to a body that only responds to the political aspects or the political questions that foreign investment in the United States poses and not with what we really want to know about foreign investments in the United States, that is: Is it good for the economy?\"", "From 1980 to 1987, CFIUS investigated a number of foreign investment transactions, mostly at the request of the Department of Defense. In 1983, for instance, a Japanese firm sought to acquire a U.S. specialty steel producer. The Department of Defense subsequently classified the metals produced by the firm because they were used in the production of military aircraft, which caused the Japanese firm to withdraw its offer. Another Japanese company attempted to acquire a U.S. firm in 1985 that manufactured specialized ball bearings for the military. The acquisition was completed after the Japanese firm agreed that production would be maintained in the United States. In a similar case in 1987, the Defense Department objected to a proposed acquisition of the computer division of a U.S. multinational company by a French firm because of classified work conducted by the computer division. The acquisition proceeded after the classified contracts were reassigned to the U.S. parent company. "], "subsections": []}, {"section_title": "The \"Exon-Florio\" Provision", "paragraphs": ["In 1988, amid concerns over foreign acquisition of certain types of U.S. firms, particularly by Japanese firms, Congress approved the Exon-Florio amendment to the Defense Production Act, which specified the basic review process of foreign investments. The statute granted the President the authority to block proposed or pending foreign \"mergers, acquisitions, or takeovers\" of \"persons engaged in interstate commerce in the United States\" that threatened to impair the national security. Congress directed, however, that the President could invoke this authority only after he had concluded that (1) other U.S. laws were inadequate or inappropriate to protect the national security; and (2) \"credible evidence\" existed that the foreign interest exercising control might take action that threatened to impair U.S. national security. This same standard was maintained in an update to the Exon-Florio provision in 2007, the Foreign Investment and National Security Act of 2007, and in FIRRMA.", "After three years of often contentious negotiations between Congress and the Reagan Administration, Congress passed and President Reagan signed the Omnibus Trade and Competitiveness Act of 1988. During consideration of the Exon-Florio proposal as an amendment to the omnibus trade bill, debate focused on three controversial issues: (1) what constitutes foreign control of a U.S. firm?; (2) how should national security be defined?; and (3) which types of economic activities should be targeted for a CFIUS review? Of these issues, the most controversial and far-reaching was the lack of a definition of national security. As originally drafted, the provision would have considered investments which affected the \"national security and essential commerce\" of the United States. The term \"essential commerce\" was the focus of intense debate between Congress and the Reagan Administration.", "The Treasury Department, headed by Secretary James Baker, objected to the Exon-Florio amendment, and the Administration vetoed the first version of the omnibus trade legislation, in part due to its objections to the language in the measure regarding \"national security and essential commerce.\" The Reagan Administration argued that the language would broaden the definition of national security beyond the traditional concept of military/defense to one which included a strong economic component. Administration witnesses argued against this aspect of the proposal and eventually succeeded in prodding Congress to remove the term \"essential commerce\" from the measure and narrow substantially the factors the President must consider in his determination. ", "The final Exon-Florio provision was included as Section 5021 of the Omnibus Trade and Competitiveness Act of 1988. The provision originated in bills reported by the Commerce Committee in the Senate and the Energy and Commerce Committee in the House, but the measure was transferred to the Senate Banking Committee as a result of a dispute over jurisdictional responsibilities. Through Executive Order 12661, President Reagan implemented provisions of the Omnibus Trade Act. In the Executive Order, President Reagan delegated his authority to administer the Exon-Florio provision to CFIUS, particularly to conduct reviews, undertake investigations, and make recommendations, although the statute itself does not specifically mention CFIUS. As a result of President Reagan's action, CFIUS was transformed from an administrative body with limited authority to review and analyze data on foreign investment to an important component of U.S. foreign investment policy with a broad mandate and significant authority to advise the President on foreign investment transactions and to recommend that some transactions be suspended or blocked. ", "In 1990, President Bush directed the China National Aero-Technology Import and Export Corporation (CATIC) to divest its acquisition of MAMCO Manufacturing, a Seattle-based firm producing metal parts and assemblies for aircraft, because of concerns that CATIC might gain access to technology through MAMCO that it would otherwise have to obtain under an export license. ", "Part of Congress's motivation in adopting the Exon-Florio provision apparently arose from concerns that foreign takeovers of U.S. firms could not be stopped unless the President declared a national emergency or regulators invoked federal antitrust, environmental, or securities laws. Through the Exon-Florio provision, Congress attempted to strengthen the President's hand in conducting foreign investment policy, while limiting its own role as a means of emphasizing that, as much as possible, the commercial nature of investment transactions should be free from political considerations. Congress also attempted to balance public concerns about the economic impact of certain types of foreign investment with the nation's long-standing international commitment to maintaining an open and receptive environment for foreign investment.", "Furthermore, Congress did not intend to have the Exon-Florio provision alter the generally open foreign investment climate of the country or to have it inhibit foreign direct investment in industries that could not be considered to be of national security interest. At the time, some analysts believed the provision could potentially widen the scope of industries that fell under the national security rubric. CFIUS, however, is not free to establish an independent approach to reviewing foreign investment transactions, but operates under the authority of the President and reflects his attitudes and policies. As a result, the discretion CFIUS uses to review and to investigate foreign investment cases reflects policy guidance from the President. Foreign investors also are constrained by legislation that bars foreign direct investment in such industries as maritime, aircraft, banking, resources, and power. Generally, these sectors were closed to foreign investors prior to passage of the Exon-Florio provision in order to prevent public services and public interest activities from falling under foreign control, primarily for national defense purposes. "], "subsections": [{"section_title": "Treasury Department Regulations", "paragraphs": ["After extensive public comment, the Treasury Department issued its final regulations in November 1991 implementing the Exon-Florio provision. Although these procedures were amended through FINSA, they continued to serve as the basis for the Exon-Florio review and investigation until new regulations were released on November 21, 2008. These regulations created an essentially voluntary system of notification by the parties to an acquisition, and they allowed for notices of acquisitions by agencies that are members of CFIUS. Despite the voluntary nature of the notification, firms largely complied with the provision, because the regulations stipulate that foreign acquisitions that are governed by the Exon-Florio review process that do not notify the Committee remain subject indefinitely to possible divestment or other appropriate actions by the President. Under most circumstances, notice of a proposed acquisition that is given to the Committee by a third party, including shareholders, is not considered by the Committee to constitute an official notification. The regulations also indicated that notifications provided to the Committee would be considered confidential and the information would not be released by the Committee to the press or commented on publicly. "], "subsections": []}]}, {"section_title": "The \"Byrd Amendment\"", "paragraphs": ["In 1992, Congress amended the Exon-Florio statute through Section 837(a) of the National Defense Authorization Act for Fiscal Year 1993 ( P.L. 102-484 ). Known as the \"Byrd\" amendment after the amendment's sponsor, Senator Byrd, the provision requires CFIUS to investigate proposed mergers, acquisitions, or takeovers in cases where two criteria are met:", "(1) the acquirer is controlled by or acting on behalf of a foreign government; and", "(2) the acquisition results in control of a person engaged in interstate commerce in the United States that could affect the national security of the United States.", "This amendment came under scrutiny by the 109 th Congress as a result of the DP World transaction. Many Members of Congress and others believed that this amendment required CFIUS to undertake a full 45-day investigation of the transaction because DP World was \"controlled by or acting on behalf of a foreign government.\" The DP World acquisition, however, exposed a sharp rift between what some Members apparently believed the amendment directed CFIUS to do and how the members of CFIUS interpreted the amendment. In particular, some Members of Congress apparently interpreted the amendment to direct CFIUS to conduct a mandatory 45-day investigation if the foreign firm involved in a transaction is owned or controlled by a foreign government. ", "Representatives of CFIUS argued they interpreted the amendment to mean that a 45-day investigation was discretionary and not mandatory. In the case of the DP World acquisition, CFIUS representatives argued they had concluded as a result of an extensive review of the proposed acquisition prior to the case being formally filed with CFIUS and during the then-existing 30-day review that the DP World case did not warrant a full 45-day investigation. They conceded that the case met the first criterion under the Byrd amendment, because DP World was controlled by a foreign government, but that it did not meet the second part of the requirement, because CFIUS had concluded during the 30-day review that the transaction \"could not affect the national security.\"", "The intense public and congressional reaction that arose from the proposed Dubai Ports World acquisition spurred the Bush Administration in late 2006 to make an important administrative change in the way CFIUS reviewed foreign investment transactions. CFIUS and President Bush approved the acquisition of Lucent Technologies, Inc. by the French-based Alcatel SA, which was completed on December 1, 2006. Before the transaction was approved by CFIUS, however, Alcatel-Lucent was required to agree to a national security arrangement, known as a Special Security Arrangement, or SSA, that restricts Alcatel's access to sensitive work done by Lucent's research arm, Bell Labs, and the communications infrastructure in the United States.", "The most controversial feature of this arrangement was that it allowed CFIUS to reopen a review of a transaction and to overturn its approval at any time if CFIUS believed the companies \"materially fail to comply\" with the terms of the arrangement. This marked a significant change in the CFIUS process. Prior to this transaction, CFIUS reviews and investigations were portrayed and considered to be final. As a result, firms were willing to subject themselves voluntarily to a CFIUS review, because they believed that once an investment transaction was scrutinized and approved by the members of CFIUS the firms could be assured that the investment transaction would be exempt from any future reviews or actions. This administrative change, however, meant that a CFIUS determination may no longer be a final decision, and it added a new level of uncertainty to foreign investors seeking to acquire U.S. firms. A broad range of U.S. and international business groups objected to this change in the Bush Administration's policy."], "subsections": []}, {"section_title": "Recent Legislative Reforms", "paragraphs": ["In the first session of the 110th Congress, Representative Maloney introduced H.R. 556 , the National Security Foreign Investment Reform and Strengthened Transparency Act of 2007, on January 18, 2007. The House Financial Services Committee approved it on February 13, 2007, with amendments, and the full House amended and approved it on February 28, 2007, by a vote of 423 to 0. On June 13, 2007, Senator Dodd introduced S1610, the Foreign Investment and National Security Act of 2007 (FINSA). On June 29, 2007, the Senate adopted S. 1610 in lieu of H.R. 556 by unanimous consent. On July 11, 2007, the House accepted the Senate's version of H.R. 556 by a vote of 370-45 and sent the measure to President Bush, who signed it on July 26, 2007. On January 23, 2008, President Bush issued Executive Order 13456 implementing the law.", "FINSA made a number of major changes, including:", "Codified the Committee on Foreign Investment in the United States (CFIUS), giving it statutory authority. Made CFIUS membership permanent and added the Secretary of Energy, the Director of National Intelligence (DNI), and Secretary of Labor as ex officio members with the DNI providing intelligence analysis; also granted authority to the President to add members on a case-by-case basis. Required the Secretary of the Treasury to designate an agency with lead responsibility for reviewing a covered transaction. Increased the number of factors the President could consider in making his determination. Required that an individual no lower than an Assistant Secretary level for each CFIUS member must certify to Congress that a reviewed transaction has no unresolved national security issues; for investigated transactions, the certification must be at the Secretary or Deputy Secretary level. Provided Congress with confidential briefings upon request on cleared transactions and annual classified and unclassified reports."], "subsections": [{"section_title": "FIRRMA Legislation: Key Provisions", "paragraphs": ["During the 115 th Congress, many Members expressed concerns over China's growing investment in the United States, particularly in the technology sector. On November 8, 2017, Senators John Cornyn and Dianne Feinstein and Representative Robert Pittenger introduced companion measures in the Senate ( S. 2098 ) and the House ( H.R. 4311 ), respectively, identified as the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) to provide comprehensive revision of the CFIUS process. On May 22, 2018, the Senate Banking and House Financial Services Committees held their respective markup sessions and approved different versions of the legislation. The Senate version of FIRRMA was added as Subtitle A of Title 17 of the Senate version of the National Defense Authorization Act for Fiscal Year 2019 ( S. 2987 , incorporated into the Senate amendments to H.R. 5515 ), which passed the Senate on June 18, 2018. The House version of FIRRMA, H.R. 5841 was passed as a standalone bill under suspension vote on June 26, 2018. On August 13, 2018, President Trump signed FIRRMA, identified as P.L. 115-232 .", "Similar to previous measures, FIRRMA grants the President the authority to block or suspend proposed or pending foreign \"mergers, acquisitions, or takeovers\" by or with any foreign person that could result in foreign control of any United States business, including such a merger, acquisition, or takeover carried out through a joint venture that threaten to impair the national security. Congress directed, however, that before this authority can be invoked the President must conclude that (1) other U.S. laws are inadequate or inappropriate to protect the national security; and (2) he/she must have \"credible evidence\" that the foreign interest exercising control might take action that threatens to impair the national security. According to CFIUS, it has interpreted this last provision to mean an investment that poses a risk to the national security. In assessing the national security risk, CFIUS looks at (1) the threat, which involves an assessment of the intent and capabilities of the acquirer; (2) the vulnerability, which involves an assessment of the aspects of the U.S. business that could impact national security; and (3) the potential national security consequences if the vulnerabilities were to be exploited. ", "In general, FIRRMA:", "Broaden s the scope of transactions under CFIUS ' purview by including for review real estate transactions in close proximity to a military installation or U.S. Government facility or property of national security sensitivities; any nonpassive investment in a critical industry or critical technologies; any change in foreign investor rights regarding a U.S. business; transactions in which a foreign government has a direct or indirect substantial interest; and any transaction or arrangement designed to evade CFIUS regulations. Mandates various deadlines , including: a report on Chinese investment in the United States, a plan for CFIUS members to recuse themselves in cases that pose a conflict of interest, an assessment of CFIUS resources and plans for additional staff and resources, a feasibility study of assessing a fee on transactions reviewed unofficially prior to submission of a written notification, and a report assessing the national security risks related to investments by state-owned or state-controlled entities in the manufacture or assembly of rolling stock or other assets used in freight rail, public transportation rail systems, or intercity passenger rail system in the United States. Allows CFI US to discriminate among foreign investors by country of origin in reviewing investment transactions by labeling some countries as \"a country of special concern\"\u2014a country that has a demonstrated or declared strategic goal of acquiring a type of critical technology or critical infrastructure that would affect United States leadership in areas related to national security. Shift s the filing process for foreign firms from voluntary to mandatory in certain cases and provides for a two-track method for reviewing investment transactions, with some transactions requiring a declaration to CFIUS and receiving an expedited process, while transactions involving investors from countries of special concern would require a written notification of a proposed transaction and would receive greater scrutiny. Provide s for additional factors for consideration that CFIUS and the President may use to determine if a transaction threatens to impair U.S. national security, as well as formalizes CFIUS' use of risk-based analysis to assess the national security risks of a transaction by assessing the threat, vulnerabilities, and consequences to national security related to the transaction. Lengthen s most time periods for CFIUS reviews and investigations and for a national security analysis by the Director of National Intelligence. Provide s for more staff to ha ndle an expected increased work load and provide s for additional funding for CFIUS through a filing fee structure for firms involved in a transaction and a $20 million annual appropriation. Modif ies CFIUS' annual reporting requirements , including its annual classified report to specified Members of Congress and nonclassified reports to the public to provide for more information on foreign investment transactions. Mandate s separate reforms related to export controls , with requirements to establish an interagency process to identify so-called \"emerging and foundational technologies\"\u2014such items are to also fall under CFIUS review of critical technologies\u2014and establish controls on the export or transfer of such technologies."], "subsections": []}]}, {"section_title": "CFIUS: Major Provisions", "paragraphs": ["As indicated in Figure 2 below, the CFIUS foreign investment review process is comprised of an informal step and three formal steps: a Declaration or written notice; a National Security Review; and a National Security Investigation. Depending on the outcome of the reviews, CFIUS may forward a transaction to the President for a Presidential Determination. FIRRMA increases the allowable time for reviews and investigations: (1) 30 days to review a declaration or written notification to determine of the transaction involves a foreign person in which a foreign government has a substantial interest; (2) a 45-day national security review (from 30 days), including an expanded time limit for analysis by the Director of National Intelligence (from 20 to 30 days); (3) a 45-day national security investigation, with an option for a 15 day extension for \"extraordinary circumstances;\" and a 15-day Presidential determination (unchanged).", "Neither Congress nor the Administration has attempted to define the term \"national security.\" Treasury Department officials have indicated, however, that during a review or investigation each CFIUS member is expected to apply that definition of national security that is consistent with the representative agency's specific legislative mandate. The concept of national security was broadened by P.L. 110-49 to include, \"those issues relating to 'homeland security,' including its application to critical infrastructure.\" As presently construed, national security includes \"those issues relating to 'homeland security,' including its application to critical infrastructure,\" and \"critical technologies.\"", "FIRRMA broadens CFIUS' role by explicitly including for review certain real estate transactions in close proximity to a military installation or U.S. government facility or property of national security sensitivities; any noncontrolling investment in U.S. businesses involved in critical technology, critical infrastructure, or collecting sensitive data on U.S. citizens; any change in foreign investor rights; transactions in which a foreign government has a direct or indirect substantial interest; and any transaction or arrangement designed to evade CFIUS.", "While specific countries are not singled out, FIRRMA allows CFIUS to potentially discriminate among foreign investors by country of origin in reviewing certain investment transactions. Greater scrutiny could be directed on transactions tied to certain countries, pending specific criteria defined by regulations.", "FIRRMA provides a \"sense of Congress\" concerning six additional factors that CFIUS and the President may consider to determine if a proposed transaction threatens to impair U.S. national security. These include:", "1. Covered transactions that involve a country of \"special concern\" that has a demonstrated or declared strategic goal of acquiring a type of critical technology or critical infrastructure that would affect U.S. leadership in areas related to national security; 2. The potential effects of the cumulative control of, or pattern of recent transactions involving, any one type of critical infrastructure, energy asset, critical material, or critical technology by a foreign government or person; 3. Whether any foreign person engaged in a transaction has a history of complying with U.S. laws and regulations; 4. Control of U.S. industries and commercial activity that affect U.S. capability and capacity to meet the requirements of national security, including the availability of human resources, products, technology, materials, and other supplies and services; 5. The extent to which a transaction is likely to expose personally identifiable information, genetic information, or other sensitive data of U.S. citizens to access by a foreign government or person that may exploit that information to threaten national security; and 6. Whether a transaction is likely to exacerbate or create new cybersecurity vulnerabilities or is likely to result in a foreign government gaining a significant new capability to engage in malicious cyber-enabled activities."], "subsections": [{"section_title": "National Security Reviews", "paragraphs": [], "subsections": [{"section_title": "Informal Actions", "paragraphs": ["Over time, the three-step CFIUS process has evolved to include an informal stage of unspecified length of time that consists of an unofficial CFIUS determination prior to the formal filing with CFIUS. This type of informal review likely developed because it serves the interests of both CFIUS and the firms that are involved in an investment transaction. According to Treasury Department officials, this informal contact enabled \"CFIUS staff to identify potential issues before the review process formally begins.\" FIRMMA directed CFIUS to analyze the feasibility and potential impact of charging a fee for conducting such informal reviews.", "Firms that are party to an investment transaction apparently benefit from this informal review in a number of ways. For one, it allows firms additional time to work out any national security concerns privately with individual CFIUS members. Secondly, and perhaps more importantly, it provides a process for firms to avoid risking potential negative publicity that could arise if a transaction were blocked or otherwise labeled as impairing U.S. national security interests. For some firms, public knowledge of a CFIUS investigation has had a negative effect on the value of the firm's stock price.", "For CFIUS members, the informal process is beneficial because it gives them as much time as they deem necessary to review a transaction without facing the time constraints that arise under the formal CFIUS review process. This informal review likely also gives CFIUS members added time to negotiate with firms involved in a transaction to restructure the transaction in ways that can address any potential security concerns or to develop other types of conditions that members feel are appropriate in order to remove security concerns.", "According to anecdotal evidence, some firms believe the CFIUS process is not market neutral, but adds to market uncertainty that can negatively affect a firm's stock price and lead to economic behavior by some firms that is not optimal for the economy as a whole. Such behavior might involve firms expending resources to avoid a CFIUS investigation, or terminating a transaction that potentially could improve the optimal performance of the economy to avoid a CFIUS investigation. While such anecdotal accounts generally are not a basis for developing public policy, they raise concerns about the possible impact a CFIUS review may have on financial markets and the potential costs of redefining the concept of national security relative to foreign investment."], "subsections": []}, {"section_title": "Formal Actions", "paragraphs": ["FIRRMA shifts the filing requirement for foreign firms from voluntary to mandatory in certain cases and provides a two-track method for reviewing transactions. Some firms are permitted to file a declaration with CFIUS and could receive an expedited review process, while transactions involving a foreign person in which a foreign government has, directly or indirectly, a substantial interest (to be defined by regulations, but not including stakes of less than 10% voting interest) would be required to file a written notification and receive greater scrutiny. Mandatory declarations may be subject to other criteria as defined by regulations.", "The chief executive officer of any party to a merger, acquisition, or takeover must certify in writing that the information contained in a written notification to CFIUS fully complies with the CFIUS requirements and that the information is accurate and complete. This written notification would also include any mitigation agreement or condition that was part of a CFIUS approval. ", "The mandatory filing and review process (via a declaration) are required for foreign investments in certain U.S. businesses that produce, design, test, manufacture, fabricate, or develop one or more critical technologies in 27 specified industries. This requirement applies to critical technologies that are used either in connection with the U.S. business's activity in one or more of the industries specified under the pilot program, or designed by the U.S. business specifically for use in one or more of the specified industries. The shift also expands CFIUS reviews of transactions beyond those that give foreign investors a controlling interest to include investments in which foreign investors do not have a controlling interest in a U.S. firm as a result of the foreign investment. Specifically, such noncontrolling investments are covered, or subject to a review, if they would grant the foreign investor access to \"material nonpublic technical information\" in possession of the U.S. business; membership or observer rights on the board of directors; or any involvement in substantive decisionmaking regarding critical technology. ", "Prior to this change, a controlling interest was determined to be at least 10% of the voting shares of a publicly traded company, or at least 10% of the total assets of a nonpublicly traded U.S. company. This shift was precipitated by concerns that investments in which foreign firms have a noncontrolling interest could nevertheless \"affect certain decisions made by, or obtain certain information from, a U.S. business with respect to the use, development, acquisition, or release of critical technology.\" New authorities granted by FIRRMA for CFIUS to review noncontrolling investments were not immediately effective upon passage of the Act, but were included as part of the Treasury Department's pilot program.", "The Treasury Department's pilot program also includes provisions for declarations and written notices. The program indicates that declarations and written notices are distinguished according to three criteria: the length of the submission, the time for CFIUS' consideration of the submission, and the Committee's options for disposition of the submission. Declarations are described as short notices that do not exceed five pages. The parties to a transaction could voluntarily stipulate that a transaction is a covered transaction, whether the transaction could result in control of a U.S. business by a foreign person, and whether the transaction is a foreign-government controlled transaction. CFIUS would be required to respond within 30 days to the filing of a declaration, whereas CFIUS would have 45 days to respond to a written notification. ", "CFIUS would also be required to respond in one of four ways to a declaration: (1) request that the parties file a written notice; (2) inform the parties that CFIUS cannot complete the review on the basis of the declaration and that they can file a notice to seek a written notification from the Committee that it has completed all the action relevant to the transaction; (3) initiate a unilateral review of the transaction through an agency notice; or (4) notify the parties that CFIUS has completed its action under the statute.", "At any point during the CFIUS process, parties can withdraw and refile their notice, for instance, to allow additional time to discuss CFIUS's proposed resolution of outstanding issues.\u00a0Under FINSA and FIRRMA, the President retains his authority as the only officer capable of suspending or prohibiting mergers, acquisitions, and takeovers, and the measures place additional requirements on firms that resubmitted a filing after previously withdrawing a filing before a full review was completed."], "subsections": []}, {"section_title": "National Security Review", "paragraphs": ["After a transaction is filed with CFIUS and depending on an initial assessment, the transaction can be subject to a 45-day national security review. During a review, CFIUS members are required to consider the 12 factors mandated by Congress through FINSA and six new factors in FIRRMA that reflect the \"sense of Congress\" in assessing the impact of an investment. If during the 45-day review period all members conclude that the investment does not threaten to impair the national security, the review is terminated. ", "During the 45-day review stage, the Director of National Intelligence (DNI), an ex officio member of CFIUS, is required to carry out a thorough analysis of \"any threat to the national security of the United States\" of any merger, acquisition, or takeover. This analysis is required to be completed \"within 30 days\" (modified by FIRRMA from 20 to 30 days) of the receipt of a notification by CFIUS. This analysis could include a request for information from the Department of the Treasury's Director of the Office of Foreign Assets Control and the Director of the Financial Crimes Enforcement Network. In addition, the Director of National Intelligence is required to seek and to incorporate the views of \"all affected or appropriate\" intelligence agencies. CFIUS also is required to review \"covered\" investment transactions in which the foreign entity is owned or controlled by a foreign government, but the law provides an exception to this requirement. If the Secretary of the Treasury and certain other specified officials determine that the transaction in question will not impair the national security, the investment is not subject to a formal review. "], "subsections": []}, {"section_title": "National Security Investigation", "paragraphs": ["If a national security review indicates that at least one of three conditions exists, the President, acting through CFIUS, is required to conduct a National Security Investigation and to take any \"necessary\" actions as part of an additional 45-day investigation, with a possible 15-day extension. The three conditions are: (1) CFIUS determines that the transaction threatens to impair the national security of the United States and that the threat has not been mitigated during or prior to a review of the transaction; (2) the foreign person is controlled by a foreign government; or (3) the transaction would result in the control of any critical infrastructure by a foreign person, the transaction could impair the national security, and such impairment has not been mitigated. At the conclusion of the investigation or 45-day review period, whichever comes first, the Committee can decide to offer no recommendation or it can recommend to the President that he/she suspend or prohibit the investment. ", "During a review or an investigation, CFIUS and a designated lead agency have the authority to negotiate, impose, or enforce any agreement or condition with the parties to a transaction in order to mitigate any threat to U.S. national security. Such agreements are based on a \"risk-based analysis\" of the threat posed by the transaction. Also, if a notification of a transaction is withdrawn before any review or investigation by CFIUS is completed, the amended law grants the Committee the authority to take a number of actions. In particular, the Committee could develop (1) interim protections to address specific concerns about the transaction pending a resubmission of a notice by the parties; (2) specific time frames for resubmitting the notice; and (3) a process for tracking any actions taken by any parties to the transaction."], "subsections": []}, {"section_title": "Presidential Determination", "paragraphs": ["As noted above, CFIUS authorities allow the President to block or suspend proposed or pending foreign \"mergers, acquisitions, or takeovers\" that threaten to impair the national security. The President, however, is under no obligation to follow the recommendation of the Committee to suspend or prohibit an investment. Congress directed that before this authority can be invoked (1) the President must conclude that other U.S. laws are inadequate or inappropriate to protect the national security; and (2) the President must have \"credible evidence\" that the foreign investment will impair the national security. As a result, if CFIUS determines, as was the case in the Dubai Ports transaction, that it does not have credible evidence that an investment will impair the national security, then it may argue that it is not required to undertake a full 45-day investigation, even if the foreign entity is owned or controlled by a foreign government. After considering the two conditions listed above (other laws are inadequate or inappropriate, and he has credible evidence that a foreign transaction will impair national security), the President is granted almost unlimited authority to take \" such action for such time as the President considers appropriate to suspend or prohibit any covered transaction that threatens to impair the national security of the United States .\" In addition, such determinations by the President are not subject to judicial review, although the process by which the disposition of a transaction is determined may be subject to judicial review to ensure that the constitutional rights of the parties involved are upheld, as was emphasized in the ruling by the U.S. District Court for the District of Columbia in the case of Ralls vs. the Committee on Foreign Investment in the United States . "], "subsections": []}]}, {"section_title": "Committee Membership", "paragraphs": ["President Bush's January 23, 2008, Executive Order 13456 implementing FINSA made various changes to the law. The Committee consists of nine Cabinet members, including the Secretaries of State, the Treasury, Defense, Homeland Security, Commerce, and Energy; the Attorney General; the United States Trade Representative; and the Director of the Office of Science and Technology Policy. The Secretary of Labor and the Director of National Intelligence serve as ex officio members of the Committee. The Executive Order added five executive office members to CFIUS in order to \"observe and, as appropriate, participate in and report to the President:\" the Director of the Office of Management and Budget; the Chairman of the Council of Economic Advisors; the Assistant to the President for National Security Affairs; the Assistant to the President for Economic Policy; and the Assistant to the President for Homeland Security and Counterterrorism. The President can also appoint members on a temporary basis to the Committee as he determines. ", "FIRRMA did not alter the membership of the Committee, but added two new positions within the Treasury Department. Both of the new positions are designated to be at the level of Assistant Secretary, with one of the positions an Assistant Secretary for Investment Security, whose primary responsibilities will be with CFIUS, under the direction of the Treasury Secretary."], "subsections": []}, {"section_title": "Covered Transactions", "paragraphs": ["The statute requires CFIUS to review all \"covered\" foreign investment transactions to determine whether a transaction threatens to impair the national security, or the foreign entity is controlled by a foreign government, or it would result in control of any \"critical infrastructure that could impair the national security.\" A covered foreign investment transaction is defined as any merger, acquisition, or takeover \"that could result in foreign control of any United States business, including such a merger, acquisition, or takeover carried out through a joint venture.\" The term 'national security' is defined to include those issues relating to 'homeland security,' including its application to critical infrastructure and critical technologies. In addition, in reviewing a covered transaction, Congress directed that CFIUS and the President \"may\" consider the following:", "the control of United States industries and commercial activity by foreign persons as it affects the capability and capacity of the United States to meet the requirements of national security, including the availability of human resources, products, technology, materials, and other supplies and services, and in considering ''the availability of human resources,'' should construe that term to include potential losses of such availability resulting from reductions in the employment of United States persons whose knowledge or skills are critical to national security, including the continued production in the United States of items that are likely to be acquired by the Department of Defense or other Federal departments or agencies for the advancement of the national security of the United States; and the extent to which a covered transaction is likely to expose, either directly or indirectly, personally identifiable information, genetic information, or other sensitive data of United States citizens to access by a foreign government or foreign person that may exploit that information in a manner that threatens national security .", "FIRRMA also expanded CFIUS reviews to include unaffiliated businesses that may be affected by a foreign investment transaction if the business: (1) owns, operates, manufactures, supplies, or services critical infrastructure; (2) produces, designs, tests, manufactures, fabricates, or develops one or more critical technologies; or (3) maintains or collects sensitive personal data of United States citizens that may be exploited in a manner that threatens national security. FIRRMA also amended the existing CFIUS statute by mandating certain changes be adopted through new regulations. Seven of 15 changes mandated through regulations concern the definition of a covered transaction and broadening the scope of a CFIUS review. No deadlines were specified for these regulatory changes. The regulatory changes mandated by FIRRMA include:", "Definition of a foreign investment transaction .Real Estate. CFIUS can prescribe criteria for the definition of a covered transaction beyond those specified in the statute that include certain real estate transactions that are located in the United States. In order to qualify under this provision, the real estate must: be located within, or function as part of, an air or maritime port; be in \"close proximity\" to a U.S. military installation or another facility or property of the U.S. government that is sensitive for reasons relating to national security; reasonably provide the foreign person the ability to collect intelligence on activities being conducted at such an installation, facility, or property; or otherwise expose national security activities at such an installation, facility, or property to the risk of foreign surveillance. CFIUS is also directed to develop regulations concerning the definition of \"close proximity\" in describing real estate transactions subject to review. Unaffiliated business . CFIUS can promulgate regulations governing foreign investments in an unaffiliated U.S. business that: owns, operates, manufactures, supplies, or services critical infrastructure; produces, designs, tests, manufactures, fabricates, or develops one or more critical technologies; or maintains or collects sensitive personal data of U.S. citizens that may be exploited in a manner that threatens national security. Changes in investor rights and other structures . Covered transactions also entail any change in the rights that a foreign person has with respect to a U.S. business in which the foreign person has an investment if that change could result in foreign control of the U.S. business. It also includes any other transaction, transfer, agreement, or arrangement that is designed or intended to evade or circumvent the application of the statute, subject to regulations prescribed by CFIUS. Real estate exceptions . Changes by FIRRMA that broaden the scope of a CFIUS review of certain real estate transactions do not include reviews of single housing units or real estate in \"urbanized areas,\" subject to regulations by CFIUS in consultation with the Secretary of Defense. Material nonpublic technical information . CFIUS is directed to develop regulations concerning the term \"material nonpublic technical information,\" which is defined as \"information that provides knowledge, know-how, or understanding, not available in the public domain, of the design, location, or operation of critical infrastructure; or is not available in the public domain, and is necessary to design, fabricate, develop, test, produce, or manufacture critical technologies, including processes, techniques, or methods.\" Critical infrastructure . CFIUS is directed to prescribe regulations concerning investments in U.S. businesses that own, manufacture, supply, or service critical infrastructure that limit the designation to critical infrastructure that is likely to be of importance to U.S. national security (i.e., \"systems and assets, whether physical or virtual, so vital to the United States that the incapacity or destruction of such systems or assets would have a debilitating impact on national security\"). Indirect investment . CFIUS is directed to develop regulations concerning an indirect investment by a foreign person in a U.S. business and exceptions for \"extraordinary circumstances.\" CFIUS is also directed to develop regulations concerning waivers for an investment fund that does constitute control of investment decisions of the fund or decisions relating to entities in which the fund is invested. Foreign person . CFIUS is directed to define further the term \"foreign person\" by specifying criteria to limit the application of the term to investments by foreign persons that are in certain categories. The categories can consider how a foreign person is connected to a foreign country or foreign government, and whether the connection may affect U.S. national security. Substantial interest . Regarding covered transactions with foreign government interests, CFIUS is directed to define the term \"substantial interest.\" In defining the term, CFIUS is directed to consider the means by which a foreign government could influence the actions of a foreign person, including through board membership, ownership interest, or shareholder rights. An interest that is excluded under indirect investment or less than 10% is not considered a substantial interest. Other provisions required by regulation .Transfer of assets pursuant to bankruptcy . CFIUS is required to prescribe regulations for covered transactions that include any transaction that arises pursuant to a bankruptcy proceeding or other form of default on debt. Information required for a declaration . CFIUS is required to develop regulations concerning the type and extent of information parties to an investment transaction are required to provide when submitting a declaration that should not exceed five pages. CFIUS also is required to develop regulations specifying the types of transactions that are required to submit a mandatory declaration. Other declarations . CFIUS may develop regulations that require parties with respect to any investment transaction to submit a declaration. Cooperation with allies and partners. The CFIUS chairperson, in consultation with other members of the Committee, is directed to establish a formal process for exchanging information with governments of countries that are allies or partners of the United States to protect U.S. national security and that of the allies and partners. The process is required to be designed to facilitate the \"harmonization\" of trends in investment and technology that could pose risks to the national security of the United States and its allies and partners; provide for sharing information on specific technologies and entities acquiring technologies to ensure national security; and include consultation with representatives of allied and partner governments on a recurring basis. Additional compliance measures . CFIUS is required to develop methods for evaluating compliance with any mitigation agreement or condition entered into or agreed relative to an investment transaction that allows CFIUS to adequately ensure compliance without unnecessarily diverting resources from assessing new transactions. Filing fees . CFIUS is granted the authority to determine in regulations the amounts of fees and to collect fees on each covered foreign investment transaction for which a written notice was submitted to CFIUS; the amount of fees collected are limited to the costs of administering CFIUS's reviews. CFIUIS can also periodically reconsider and adjust the amount of the fees to ensure that the amount of fees does not exceed the costs of administering the program.", "Since the review process involves numerous federal government agencies with varying missions, CFIUS seeks consensus among the member agencies on every transaction. Any agency that has a different assessment of the national security risks posed by a transaction has the ability to push that assessment to a higher level within CFIUS and, ultimately, to the President. As a matter of practice, before CFIUS clears a transaction to proceed, each member agency confirms to Treasury, at politically accountable levels, that it has no unresolved national security concerns with the transaction. CFIUS is represented through the review process by Treasury and by one or more other agencies that Treasury designates as a lead agency based on the subject matter of the transaction. At the end of a review or investigation, CFIUS provides a written certification to Congress that it has no unresolved national security concerns. This certification is executed by Senate-confirmed officials at these agencies at either the Assistant Secretary or Deputy Secretary level, depending on the stage of the process at which the transaction is cleared. ", "According to Treasury Department regulations, investment transactions that are not considered to be covered transactions and, therefore, not subject to a CFIUS review are those that are undertaken \"solely for the purpose of investment,\" or an investment in which the foreign investor has \"no intention of determining or directing the basic business decisions of the issuer.\" In addition, investments that are solely for investment purposes are defined as those (1) in which the transaction does not involve owning more than 10% of the voting securities of the firm; or (2) those investments that are undertaken directly by a bank, trust company, insurance company, investment company, pension fund, employee benefit plan, mutual fund, finance company, or brokerage company \"in the ordinary course of business for its own account.\" ", "Other transactions not covered include (1) stock splits or a pro rata stock dividend that does not involve a change in control; (2) an acquisition of any part of an entity or of assets that do not constitute a U.S. business; (3) an acquisition of securities by a person acting as a securities underwriter, in the ordinary course of business and in the process of underwriting; and (4) an acquisition pursuant to a condition in a contract of insurance relating to fidelity, surety, or casualty obligations if the contract was made by an insurer in the ordinary course of business. In addition, Treasury regulations stipulate that the extension of a loan or a similar financing arrangement by a foreign person to a U.S. business will not be considered a covered transaction and will not be investigated, unless the loan conveys a right to the profits of the U.S. business or involves a transfer of management decisions."], "subsections": []}, {"section_title": "Critical Infrastructure / Critical Technologies", "paragraphs": ["An element of the CFIUS process added by FINSA and reinforced by FIRRMA is the addition of \"critical industries\" and \"homeland security\" as broad categories of economic activity that could be subject to a CFIUS national security review, ostensibly broadening CFIUS's mandate. The precedent for this action was set in the Patriot Act of 2001 and the Homeland Security Act of 2002, which define critical industries and homeland security and assign responsibilities for those industries to various federal government agencies. FINSA references those two acts and borrows language from them on critical industries and homeland security. After the September 11 th terrorist attacks, Congress passed and President Bush signed the USA PATRIOT Act of 2001 (Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism). In this act, Congress provided for special support for \"critical industries,\" which it defined as", "systems and assets, whether physical or virtual, so vital to the United States that the incapacity or destruction of such systems and assets would have a debilitating impact on security, national economic security, national public health or safety, or any combination of those matters.", "This broad definition is enhanced to some degree by other provisions of the act, which identify certain sectors of the economy that are likely candidates for consideration as components of the national critical infrastructure. These sectors include telecommunications, energy, financial services, water, transportation sectors, and the \"cyber and physical infrastructure services critical to maintaining the national defense, continuity of government, economic prosperity, and quality of life in the United States.\" The following year, Congress adopted the language in the Patriot Act on critical infrastructure into The Homeland Security Act of 2002.", "In addition, the Homeland Security Act added key resources to the list of critical infrastructure (CI/KR) and defined those resources as \"publicly or privately controlled resources essential to the minimal operations of the economy and government.\" Through a series of directives, the Department of Homeland Security identified 17 sectors of the economy as falling within the definition of critical infrastructure/key resources and assigned primary responsibility for those sectors to various federal departments and agencies, which are designated as Sector-Specific Agencies (SSAs). On March 3, 2008, Homeland Security Secretary Chertoff signed an internal DHS memo designating Critical Manufacturing as the 18 th sector on the CI/KR list. ", "In 2013, the list of critical industries was altered through a Presidential Policy Directive (PPD-21). The directive listed three \"strategic imperatives\" as drivers of the Federal approach to strengthening \"critical infrastructure security and resilience:\"", "1. Refine and clarify functional relationships across the Federal Government to advance the national unity of effort to strengthen critical infrastructure security and resilience; 2. Enable effective information exchange by identifying baseline data and systems requirements for the Federal Government; and 3. Implement an integration and analysis function to inform planning and operations decisions regarding critical infrastructure.", "The directive assigns the main responsibility to the Department of Homeland Security for identifying critical industries and coordinating efforts among the various government agencies, among a number of responsibilities. The directive also assigns roles to other agencies and designated 16 sectors as critical to the U.S. infrastructure. The sectors are (1) chemical; (2) commercial facilities; (3) communications; (4) critical manufacturing; (5) dams; (6) defense industrial base; (7) emergency services; (8) energy; (9) financial services; (10) food and agriculture; (11) government facilities; (12) health care and public health; (13) information technology; (14) nuclear reactors, materials, and waste; (15) transportation systems; and (16) water and wastewater systems.", "FIRRMA added language on critical technologies, which are defined as:", "Defense articles or defense services included on the United States Munitions List set forth in the International Traffic in Arms Regulations under subchapter M of chapter I of title 22, Code of Federal Regulations. Items included on the Commerce Control List set forth in Supplement No. 1 to part 774 of the Export Administration Regulations under subchapter C of chapter VII of title 15, Code of Federal Regulations, and controlled\u2014 pursuant to multilateral regimes, including for reasons relating to national security, chemical and biological weapons proliferation, nuclear nonproliferation, or missile technology; for reasons relating to regional stability or surreptitious listening. Specially designed and prepared nuclear equipment, parts and components, materials, software, and technology covered by part 810 of title 10, Code of Federal Regulations (relating to assistance to foreign atomic energy activities). Nuclear facilities, equipment, and material covered by part 110 of title 10, Code of Federal Regulations (relating to export and import of nuclear equipment and material). Select agents and toxins covered by part 331 of title 7, Code of Federal Regulations, part 121 of title 9 of such Code, or part 73 of title 42 of such Code. Emerging and foundational technologies controlled pursuant to section 1758 of the Export Control Reform Act of 2018."], "subsections": []}, {"section_title": "Foreign Ownership Control", "paragraphs": ["The CFIUS statute itself does not provide a definition of the term \"control,\" but such a definition is included in the Treasury Department's regulations and enhanced through FIRRMA to include reviews of transactions that do not involve a controlling interest. According to those regulations, control is not defined as a numerical benchmark, but instead focuses on a functional definition of control, or a definition that is governed by the influence the level of ownership permits the foreign entity to affect certain decisions by the firm. According to the Treasury Department's regulations:", "The term control means the power, direct or indirect, whether or not exercised, and whether or not exercised or exercisable through the ownership of a majority or a dominant minority of the total outstanding voting securities of an issuer, or by proxy voting, contractual arrangements or other means, to determine, direct or decide matters affecting an entity; in particular, but without limitation, to determine, direct, take, reach or cause decisions regarding:", "(1) The sale, lease, mortgage, pledge or other transfer of any or all of the principal assets of the entity, whether or not in the ordinary course of business;", "(2) The reorganization, merger, or dissolution of the entity;", "(3) The closing, relocation, or substantial alternation of the production operational, or research and development facilities of the entity;", "(4) Major expenditures or investments, issuances of equity or debt, or dividend payments by this entity, or approval of the operating budget of the entity;", "(5) The selection of new business lines or ventures that the entity will pursue;", "(6) The entry into termination or nonfulfillment by the entity of significant contracts;", "(7) The policies or procedures of the entity governing the treatment of nonpublic technical, financial, or other proprietary information of the entity;", "(8) The appointment or dismissal of officers or senior managers;", "(9) The appointment or dismissal of employees with access to sensitive technology or classified U.S. Government information; or", "(10) The amendment of the Articles of Incorporation, constituent agreement, or other organizational documents of the entity with respect to the matters described at paragraph (a) (1) through (9) of this section.", "Treasury Department regulations also provide some guidance to firms that are deciding whether they should notify CFIUS of a proposed or pending merger, acquisition, or takeover. The guidance states that proposed acquisitions that need to notify CFIUS are those that involve \"products or key technologies essential to the U.S. defense industrial base.\" This notice is not intended for firms that produce goods or services with no special relation to national security, especially toys and games, food products (separate from food production), hotels and restaurants, or legal services. CFIUS has indicated that in order to ensure an unimpeded inflow of foreign investment it would implement the statute \"only insofar as necessary to protect the national security,\" and \"in a manner fully consistent with the international obligations of the United States.\"", "FIRRMA defines the term control to mean: \"the power, direct or indirect, whether exercised or not exercised, to determine, direct, or decide important matters affecting an entity, subject to regulations prescribed by the Committee.\" Also, Congress added six additional factors through FIRRMA that CFIUS and the President \"may\" consider in reviewing investment transactions, including the fourth factor, as indicated in the section below on factors for consideration. "], "subsections": []}, {"section_title": "Factors for Consideration", "paragraphs": ["The CFIUS statute includes a list of 12 factors the President must consider in deciding to block a foreign acquisition, although the President is not required to block a transaction based on these factors. Additionally, CFIUS members can consider the factors as part of their own review process to determine if a particular transaction threatens to impair the national security. This list includes the following elements:", "(1) domestic production needed for projected national defense requirements;", "(2) capability and capacity of domestic industries to meet national defense requirements, including the availability of human resources, products, technology, materials, and other supplies and services;", "(3) control of domestic industries and commercial activity by foreign citizens as it affects the capability and capacity of the U.S. to meet the requirements of national security;", "(4) potential effects of the transactions on the sales of military goods, equipment, or technology to a country that supports terrorism or proliferates missile technology or chemical and biological weapons; and transactions identified by the Secretary of Defense as \"posing a regional military threat\" to the interests of the United States;", "(5) potential effects of the transaction on U.S. technological leadership in areas affecting U.S. national security;", "(6) whether the transaction has a security-related impact on critical infrastructure in the United States;", "(7) potential effects on United States critical infrastructure, including major energy assets;", "(8) potential effects on United States critical technologies;", "(9) whether the transaction is a foreign government-controlled transaction;", "(10) in cases involving a government-controlled transaction, a review of (A) the adherence of the foreign country to nonproliferation control regimes, (B) the foreign country's record on cooperating in counter-terrorism efforts, (C) the potential for transshipment or diversion of technologies with military applications;", "(11) long-term projection of the United States requirements for sources of energy and other critical resources and materials; and", "(12) such other factors as the President or the Committee determine to be appropriate.", "Factors 6-12 were added through the FINSA Act potentially broadening the scope of CFIUS's reviews and investigations. As previously indicated, instead of adding new factors to this section of the statute, FIRRMA offered six new elements CFIUS and the President \"may\" consider as part of their deliberations through a sense of Congress provision. Previously, CFIUS had been directed by Treasury Department regulations to focus its activities primarily on investments that had an impact on U.S. national defense security. The additional factors, however, incorporate economic considerations into the CFIUS review process in a way that was specifically rejected when the original Exon-Florio amendment was adopted and refocuses CFIUS's reviews and investigations on considering the broader rubric of economic security, although the term is not specifically mentioned. In particular, CFIUS is required to consider the impact of an investment on critical infrastructure and critical technologies as factors for considering a recommendation to the President that a transaction be blocked or postponed. As previously indicated, critical infrastructure is defined in broad terms as \"any systems and assets, whether physical or cyber-based, so vital to the United States that the degradation or destruction of such systems or assets would have a debilitating impact on national security, including national economic security and national public health or safety.\"", "The six factors added by FIRRMA through a sense of Congress that CFIUS and the President may consider in evaluating the national security implications of an investment are:", "1. a transaction involves a country of special concern that has a demonstrated or declared strategic goal of acquiring a type of critical technology or critical infrastructure that would affect United States leadership in areas related to national security; 2. the potential national security-related effects of the cumulative control of, or pattern of recent transactions involving, any one type of critical infrastructure, energy asset, critical material, or critical technology by a foreign government or foreign person; 3. whether any foreign person engaging in a covered transaction with a United States business has a history of complying with United States laws and regulations; 4. control of United States industries and commercial activity by foreign persons as it affects the capability and capacity of the United States to meet the requirements of national security, including the availability of human resources, products, technology, materials, and other supplies and services, and in considering ''the availability of human resources'', should construe that term to include potential losses of such availability resulting from reductions in the employment of United States persons whose knowledge or skills are critical to national security, including the continued production in the United States of items that are likely to be acquired by the Department of Defense or other Federal departments or agencies for the advancement of the national security of the United States ; 5. the extent to which a covered transaction is likely to expose, either directly or indirectly, personally identifiable information, genetic information, or other sensitive data of United States citizens to access by a foreign government or foreign person that may exploit that information in a manner that threatens national security; and 6. a transaction that is likely to have the effect of exacerbating or creating new cybersecurity vulnerabilities in the United States or is likely to result in a foreign government gaining a significant new capability to engage in malicious cyber-enabled activities against the United States, including such activities designed to affect the outcome of any election for Federal office. 52", "As originally drafted, the Exon-Florio provision also would have applied to joint ventures and licensing agreements in addition to mergers, acquisitions, and takeovers. Joint ventures and licensing agreements subsequently were dropped from the proposal because the Reagan Administration and various industry groups argued at the time that such business practices were deemed to be beneficial arrangements for U.S. companies. In addition, they argued that any potential threat to national security could be addressed by the Export Administration Act and the Arms Control Export Act. FIRRMA added joint ventures as a matter for consideration during a CFIUS review or investigation."], "subsections": []}, {"section_title": "Confidentiality Requirements", "paragraphs": ["FINSA codified, and FIRRMA maintains, confidentiality requirements that are similar to those that appeared in the Exon-Florio amendment and Executive Order 11858 by stating that any information or documentary material filed under the provision may not be made public \"except as may be relevant to any administrative or judicial action or proceeding.\" The provision does state, however, that this confidentiality provision \"shall not be construed to prevent disclosure to either House of Congress or to any duly authorized committee or subcommittee of the Congress.\" The provision provides for the release of proprietary information \"which can be associated with a particular party\" to committees only with assurances that the information will remain confidential. Members of Congress and their staff members are accountable under current provisions of law governing the release of certain types of information. Current statute requires the President to provide a written report to the Secretary of the Senate and the Clerk of the House detailing his decision and his actions relevant to any transaction that was subject to a 45-day investigation."], "subsections": []}, {"section_title": "Mitigation and Tracking", "paragraphs": ["Since the implementation of the Exon-Florio provision in the 1980s, CFIUS had developed several informal practices that likely were not envisioned when the statute was drafted. In particular, members of CFIUS on occasion negotiated conditions with firms to mitigate or to remove business arrangements that raised national security concerns among the CFIUS members. Such agreements often were informal arrangements that had an uncertain basis in statute and had not been tested in court. These arrangements often were negotiated during the formal review period, or even during an informal process prior to the formal filing of a notice of an investment transaction.", "FINSA required CFIUS to designate a lead agency to negotiate, modify, monitor, and enforce agreements in order to mitigate any threat to national security. Such agreements are required to be based on a \"risk-based analysis\" of the threat posed by the transaction. CFIUS is also required to develop a method for evaluating the compliance of firms that have entered into a mitigation agreement or condition that was imposed as a requirement for approval of the investment transaction. Such measures, however, are required to be developed in such a way that they allow CFIUS to determine that compliance is taking place without also (1) \"unnecessarily diverting\" CFIUS resources from assessing any new covered transaction for which a written notice had been filed; and (2) placing \"unnecessary\" burdens on a party to an investment transaction.", "If a notification of a transaction is withdrawn before any review or investigation by CFIUS is completed, CFIUS can take a number of actions, including (1) interim protections to address specific concerns about the transaction pending a resubmission of a notice by the parties; (2) specific time frames for resubmitting the notice; and (3) a process for tracking any actions taken by any party to the transaction. Also, any federal entity or entities that are involved in any mitigation agreement are to report to CFIUS if there is any modification that is made to any agreement or condition that had been imposed and to ensure that \"any significant\" modification is reported to the Director of National Intelligence and to any other federal department or agency that \"may have a material interest in such modification.\" Such reports are required to be filed with the Attorney General.", "FIRRMA further authorizes CFIUS to:", "conduct periodic reviews of mitigation agreements to determine if the agreements should be phased out or modified if a threat no longer requires mitigation; negotiate, enter into or impose, and enforce any agreement or condition with any party to an investment transaction during and after consideration of a transaction to mitigate any risk to the national security of the United States as a result of the transaction; and review periodically the appropriateness of an agreement or condition and terminate, phase out, or otherwise amend the agreement or condition if a threat no longer requires mitigation through the agreement or condition. ", "In agreeing to a mitigation agreement, CFIUS must determine that the agreement will resolve the national security concerns posed by the transaction, taking into consideration whether the agreement or condition is reasonably calculated to: be effective, verifiable, monitored, and enforceable."], "subsections": []}, {"section_title": "Funding and Staff Requirements", "paragraphs": ["FIRRMA established a fund within Treasury and appropriates $20 million to CFIUS for each of fiscal years 2019 through 2023. FIRRMA also authorizes CFIUS to develop a fee schedule, determined through regulation, for each transaction, in addition to an expedited process for hiring additional staff. The fee is restricted to be 1% of the value of the transaction, or three hundred thousand dollars. In developing regulations, CFIUS is also required to consider the impact on small businesses, the expenses to CFIUS associated with conducting reviews, and the impact on foreign investment. Also, the total amount of fees collected are limited to not exceed the costs of administering the fees. FIRRMA also directs CFIUS to study the feasibility of establishing a fee or a fee structure to prioritize a response to informal notices prior to the submission of a formal written notice of an impending or proposed transaction. ", "FIRRMA also requires the President to determine whether and to what extent the expansion of CFIUS' responsibilities as a result of the additional duties designated by FIRRMA requires additional resources. If additional resources are necessary, the President is required to make such a request in the Administration's annual budget."], "subsections": []}, {"section_title": "Congressional Oversight", "paragraphs": ["Both FINSA and FIRRMA increased the types and number of reports that CFIUS is required to send to certain specified Members of Congress. In particular, CFIUS is required to brief certain congressional leaders if they request such a briefing and to report annually to Congress on any reviews or investigations it has conducted during the prior year. CFIUS provides a classified report to Congress each year and a less extensive report for public release. Each report is required to include a list of all concluded reviews and investigations, information on the nature of the business activities of the parties involved in an investment transaction, information about the status of the review or investigation, and information on any transactions that were withdrawn from the process, any roll call votes by the Committee, any extension of time for any investigation, and any presidential decision or action. In the classified report, FIRRMA imposed new reporting requirements on CFIUS concerning: ", "the outcome of each review or investigation, including whether a mitigation agreement or condition was entered into and any action by the President; basic information concerning the parties involved; the nature of the business activities or products; statistics on compliance plans and cumulative and trend information on declarations and actions taken; methods used by the Committee to identify nonnotified and nondeclared transactions; a summary of the hiring practices and policies of the Committee; in cases where the Committee has recommended that the President suspend or prohibit a transaction because it threatens to impair the national security, CFIUS is required to notify Congress of the recommendation and, upon request, provide a classified briefing on the recommendation; not later than two years after enactment of FIRRMA, and every two years thereafter through 2026, the Secretary of Commerce is required to submit to Congress and CFIUS a report on foreign direct investment transactions made by entities of the People's Republic of China in the United States.", "In addition, CFIUS is required to report on trend information on the numbers of filings, investigations, withdrawals, and presidential decisions or actions that were taken. The report must include cumulative information on the business sectors involved in filings and the countries from which the investments originated; information on the status of the investments of companies that withdrew notices and the types of security arrangements and conditions CFIUS used to mitigate national security concerns; the methods the Committee used to determine that firms were complying with mitigation agreements or conditions; and a detailed discussion of all perceived adverse effects of investment transactions on the national security or critical infrastructure of the United States.", "The Secretary of the Treasury, in consultation with the Secretaries of State and Commerce, is directed by FINSA to conduct a study on investment in the United States, particularly in critical infrastructure and industries affecting national security, by (1) foreign governments, entities controlled by or acting on behalf of a foreign government, or persons of foreign countries which comply with any boycott of Israel; or (2) foreign governments, entities controlled by or acting on behalf of a foreign government, or persons of foreign countries which do not ban organizations designated by the Secretary of State as foreign terrorist organizations. In addition, CFIUS is required to provide an annual evaluation of any credible evidence of a coordinated strategy by one or more countries or companies to acquire U.S. companies involved in research, development, or production of critical technologies in which the United States is a leading producer. The report must include an evaluation of possible industrial espionage activities directed or directly assisted by foreign governments against private U.S. companies aimed at obtaining commercial secrets related to critical technologies."], "subsections": []}]}, {"section_title": "Recent CFIUS Reviews", "paragraphs": ["According to the annual report filed by CFIUS, CFIUS activity dropped sharply in 2009 as a result of tight credit markets and hesitation by banks to fund acquisitions and takeovers during the global financial crisis, but rebounded in 2010, as indicated in Table 2 . During the eight-year period 2008-2015 (the latest years for which such data are available), foreign investors sent 925 notices to CFIUS of plans to acquire, take over, or merge with a U.S. firm. In comparison, the Commerce Department reports there were over 1,800 foreign investment transactions in 2015, slightly less than half of which were acquisitions of existing U.S. firms. Acquisitions, however, accounted for 96% of the total annual value of foreign direct investments. Of the investment transactions notified during the 2008-2015 period, about 4% were withdrawn during the initial 30-day review; about 36% of the total notified transactions required a 45-day investigation. Also, of the transactions investigated, about 6% were withdrawn before a final determination was reached. As a result, of the 925 proposed investment transactions notified to CFIUS during this period, 822 transactions, or 89% of the transactions, were completed. As noted earlier in this report, but not in the 2017 CFIUS report, a presidential decision was made in six cases to date. ", "The CFIUS report indicates that 43% of foreign investment transactions notified to CFIUS from 2008 to 2015 were in the manufacturing sector. Investments in the finance, information, and services sectors accounted for another 31% of the total notified transactions, as indicated in Table 3 . Within the manufacturing sector, 43% of all investment transactions notified to CFIUS between 2013 and 2015 were in the computer and electronic products sectors, a share that rose to 49% in 2015. The next three sectors with the highest number of transactions were the transportation equipment sector, which was recorded at 12% in the 2013-2015 period and in 2015, the machinery sector, which fell from 13% in the 2013-2015 period to 12% in 2015, and the electrical equipment and computer sector, which fell from 11% of manufacturing transactions in 2013-2015 to 3% in 2015. Within the finance, information, and services sector, professional services accounted for 20% of transactions 2015, down from 37% recorded in the 2013-2015 period. Notified transactions in publishing (21%), telecommunications (17%), and real estate (10%) comprised the next most active sectors.", " Table 4 shows foreign investment transactions by the home country of the foreign investor and the industry composition of the investment transactions. According to data based on notices provided to CFIUS by foreign investors, Chinese investors were the most active in acquisitions, takeovers, or mergers during the 2013-2015 period, accounting for 19% of the total number of transactions. The United Kingdom and Canada join China as the top three countries of origin for investors providing notifications to CFIUS. For China and the UK, investment notifications were concentrated in the manufacturing, finance, information, and services sectors, although nearly one-fifth of Chinese transactions were in the mining, construction, and utilities sectors. The ranking of countries in Table 4 differs in a number of important ways from data published by the Bureau of Economic Analysis on the cumulative amount, or the total book value, of foreign direct investment in the United States, which places the United Kingdom, Japan, the Netherlands, Germany, Canada, and Switzerland as the most active countries of origin for foreign investment in the United States.", " Table 5 provides information on notified foreign investment transactions by in critical technology classified by types of foreign investment. According to CFIUS, the Committee reviewed 130 transactions in 2015 (126 transactions were reported by CFIUS for the data in Table 5 ) involving acquirers from 32 countries to determine if it could detect a coordinated strategy. Solo acquisitions accounted for 86% of the total number of transactions. According to CFIUS, the largest number of transactions in critical technology occurred in the Information Technology and the Aerospace & Defense sectors.", "The CFIUS annual report also provides some general information on the total number of cases in which it applied legally binding mitigation measures. The report did not list any specific cases or measures, but it did indicate that CFIUS applied mitigation measures to 40 cases in the 2013-2015 period. According to the CFIUS report, in 2015 CFIUS agencies negotiated, and parties adopted, mitigation measures for 11 covered transactions. These mitigation measures have included a number of different approaches, including", "Ensuring that only authorized persons have access to certain technologies and information. Establishing a Corporate Security Committee and other mechanisms to ensure compliance with all required actions, including the appointment of a U.S. government-approved security officer or member of the board of directors and requirements for security policies, annual reports, and independent audits. Establishing guidelines and terms for handling existing or future U.S. government contracts, U.S. government customer information, and other sensitive information. Ensuring only U.S. citizens handle certain products and services, and ensuring that certain activities and products are located only in the United States. Notifying security officers or relevant U.S. government parties in advance of foreign national visits to the U.S. business for approval. Security protocols to ensure the integrity of goods or software sold to the U.S. Government. Notifying customers regarding the change of ownership. Assurances of continuity of supply for defined periods, and notification and consultation prior to taking certain business decisions, with certain rights in the event that the company decides to exit a business line. Established meetings to discuss business plans that might affect U.S. Government or national security considerations. Exclusion of certain sensitive assets from the transaction. Providing the U.S. Government with the right to review certain business decisions and object if they raise national security concerns.", "CFIUS also implemented procedures to evaluate and ensure that parties to an investment transaction remain in compliance with any risk mitigation measures that were adopted to gain approval of the investment. These procedures include the following:", "Periodic reporting to U.S. Government agencies by the companies. On-site compliance reviews by U.S. Government agencies. Third party audits when provided for by the terms of the mitigation measures. Investigations and remedial actions if anomalies or breaches are discovered or suspected. Assigning staff responsibilities to monitor compliance. Designating tracking systems to monitor required reports. Instituting internal instructions and procedures to ensure that in-house expertise is drawn upon to analyze compliance with measures."], "subsections": []}, {"section_title": "Issues for Congress", "paragraphs": ["The U.S. policy approach to international investment generally aimed to establish an open and rules-based system that is consistent across countries and in line with U.S. interests as the largest global foreign direct investor and largest recipient of foreign direct investment. In addition, U.S. foreign direct investment policy has been founded on the concept that the net benefits of such investment are positive and benefit both the United States and the foreign investor, except in certain circumstances concerning risks to national security and for prudential reasons. Even in these cases, however, the U.S. approach generally has been to limit any market distorting impact of the national security review process. Under the CFIUS statute, Congress set a legal standard for the President to meet before he could block or suspend investment transactions: no other laws apply, and he determines that there is \"credible evidence\" that the action does not simply affect national security, but that it \"threatens to impair the national security,\" or that it poses a risk to national security", "In 2018, Congress and the Trump Administration amended the CFIUS statute through the Foreign Investment Risk Review Modernization Act (FIRRMA) to address a broader range of issues concerning foreign direct investment in the U.S. economy. In part, the motivation for the change in the CFIS statute reflects differing views of the role CFIUS should play in overseeing foreign investment transactions and the concept of national security, particularly as it relates to national economic interests. In some ways, current discussions regarding the role of CFIUS mirror previous debates over a working set of parameters that establish a functional definition of the national economic security implications of foreign direct investment and expose differing assessments of the economic impact of foreign investment on the U.S. economy and differing political and philosophical convictions. ", "Previous congressional efforts to amend the CFIUS statute were driven in large part by national security concerns related to a particular foreign investment transaction, such as the Dubai Ports transaction. More recently, concerns have arisen from a combination of issues, including (1) an increase in foreign investment activity by Chinese state-owned firms; (2) the perception that such investment is part of a government-coordinated approach that serves official strategic purposes, rather than purely commercial interests; and (3) that investments by Chinese firms are receiving government support through subsidized financing or other types of government support that give Chinese firms an \"unfair\" competitive advantage over other private investors. ", "While Members of Congress and others have expressed concerns over investments by Chinese entities, the broader issue of the role of foreign investment in the economy and the interaction between foreign investment and national security predate the creation of CFIUS. Such concerns arguably are heightened by a changing global economic order that is marked by rising emerging economies such as China and India that are more active internationally and changing notions of national economic interests. Changes to CFIUIS through FIRRMA broaden CFIUS' mandate beyond the original narrow focus on the national security implications of individual investment transactions to a more comprehensive assessment of the impact of a combination of transactions. In addition, CFIUS is now required to analyze the impact of certain types of real estate transactions and the potential impact of foreign investment in start-up companies with potentially foundational technologies. These issues and others raise questions for Congress to consider, including: ", "Through FIRRMA, Congress expanded the role of CFIUS in protecting U.S. national security interests. What rubric should CFIUS use to weigh national security interests against economic interests, particularly at the state and local levels that seek foreign investment to support local jobs and tax revenues? The United States is the single largest recipient of foreign investment and the largest overseas direct investor in the world. How should Congress assess the role of CFIUS in protecting U.S. national security interests while supporting the stated policy of the United States to support international efforts to maintain policies that accommodate foreign direct investment? In any year, the level of foreign investment activity is driven in large part by broad economic fundamentals, including merger and acquisition (M&A) activity. As a result, CFIUS' activities could vary substantially from year to year, depending on forces outside its control. How should Congress evaluate CFIUS' activities given these circumstances? Congress has expressed its concerns through FIRRMA about foreign access to critical technologies through investments and acquisitions developed by U.S. firms. How can CFIUS satisfy congressional concerns about the potential loss of leading-edge technologies while avoiding potential conflicts that inhibit the development of new technologies by start-up firms? In response to FIRRMA, Treasury Department regulations identify 27 industries as critical industries for consideration by CFIUS and the President in deciding to block or suspend a foreign investment transaction. How should CFIUS weigh concerns over foreign investments concentrated in certain industries relative to capital needs and requirements in fast-growing industries that may rely on foreign funds in order to expand? What rubric is CFIUS using to determine how much foreign investment in an industry is considered too concentrated? Without providing a definition of national security, Congress has directed CFIUS to protect the United States against investments that threaten to impair the national security. What rubric should CFIUS use to evaluate the national security implications of such items as personally identifiable information?"], "subsections": []}]}}
{"id": "R45661", "title": "Agricultural Provisions of the U.S.-Mexico-Canada Agreement", "released_date": "2019-04-08T00:00:00", "summary": ["On September 30, 2018, the Trump Administration announced the conclusion of the renegotiations of the North America Free Trade Agreement (NAFTA) and the proposed United States-Mexico-Canada Agreement (USMCA). If approved by Congress and ratified by Canada and Mexico, USMCA would modify and possibly replace NAFTA, which entered into force January 1, 1994. NAFTA provisions are structured as three separate bilateral agreements: one between Canada and the United States, a second between Mexico and the United States, and a third between Canada and Mexico.", "Under NAFTA, bilateral agricultural trade between the United States and Mexico was liberalized over a transition period of 14 years beginning in 1994. NAFTA provisions on agricultural trade between Canada and the United States are based on commitments under the Canada-U.S. Trade Agreement (CUSTA), which granted full market access for most agricultural products with the exception of certain products. The agricultural exceptions under NAFTA include Canadian imports from the United States of dairy products, poultry, eggs, and margarine and U.S. imports from Canada of dairy products, peanuts, peanut butter, cotton, sugar, and sugar-containing products.", "The proposed USMCA would expand market access for U.S. exports of dairy, poultry, and eggs to Canada and enhance NAFTA's Sanitary and Phytosanitary (SPS) provisions. It would also include new provisions for trade in agricultural biotechnology products, add provisions governing Geographical Indications (GIs), add protection for proprietary food formulas, and require USMCA countries to apply the same regulatory treatment to imported alcoholic beverages and wheat as those that govern their domestic products.", "Since 2002, Canada has been the United States' top agricultural export market, and Mexico was the second-largest export market until 2010, when it became the third-largest market as China became the second-largest agricultural export market for the United States. U.S. agricultural exporters are thus keen to keep and grow the existing export market in North America. If the United States were to potentially withdraw from NAFTA, as mentioned several times by President Trump, U.S. agricultural exporters could potentially lose at least a portion of their market share in Canada and Mexico if the proposed USMCA does not enter into force. If the United States withdraws from NAFTA, U.S. agricultural exports to Canada and Mexico would likely face World Trade Organization (WTO) most-favored-nation tariffs\u2014the highest rate a country applies to WTO member countries. These tariffs are much higher than the zero tariffs that U.S. exporters currently enjoy under NAFTA for most agricultural exports to Canada and Mexico.", "The proposed USMCA would need to be approved by the U.S. Congress and ratified by Canada and Mexico before it could enter into force. Some Members of Congress have voiced concerns about issues such as labor provisions and intellectual property rights protection of pharmaceuticals. Other Members have indicated that an anticipated assessment by the U.S. International Trade Commission (USITC) will be key to their decisions on whether to support the agreement. Canada, Mexico, and some Members of Congress have expressed concern about other ongoing trade issues with Canada and Mexico, such as antidumping issues related to seasonal produce imports and the recent U.S. imposition of a 25% duty on all steel imports and a 10% duty on all aluminum imports. Both the Canadian and the Mexican governments have stated that USMCA ratification hinges in large part upon the Trump Administration lifting the Section 232 tariffs on imported steel and aluminum. Similarly, some Members of Congress have stated that the Administration should lift tariffs on steel and aluminum imports in order to secure the elimination of retaliatory tariffs on agricultural products before Congress would consider legislation to implement USMCA."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Since 2002, Canada has been the United States' top agricultural export market. Mexico was the second-largest export market until 2010, when China displaced Mexico as the second-leading market with Mexico becoming the third-largest U.S. agricultural export market. In FY2018, U.S. agricultural exports t otaled $143 billion, of which Canada and Mexico jointly accounted for about 27%. USDA's Economic Research Service estimates that in 2017 each dollar of U.S. agricultural exports stimulated an additional $1.30 in business activity in the United States. That same year, U.S. agricultural exports generated an estimated 1,161,000 full-time civilian jobs, including 795,000 jobs outside the farm sector. U.S. agricultural exports to Canada and Mexico are an important part of the U.S. economy, and the growth of these markets is partly the result of the North American market liberalization under the North American Free Trade Agreement (NAFTA).", "On September 30, 2018, the Trump Administration announced an agreement with Canada and Mexico for a U.S.-Mexico-Canada Agreement (USMCA) that would possibly replace NAFTA. NAFTA entered into force on January 1, 1994, following the passage of the implementing legislation by Congress ( P.L. 103-182 ). NAFTA was structured as three separate bilateral agreements: one between Canada and the United States, a second between Mexico and the United States, and a third between Canada and Mexico. ", "Provisions of the Canada-U.S. Trade Agreement (CUSTA), which went into effect on January 1, 1989, continued to apply under NAFTA (see Table 1 ). CUSTA opened up a 10-year period for tariff elimination and agricultural market integration between the two countries. The agricultural provisions agreed upon for CUSTA remained in force as provisions of the new NAFTA agreement. While tariffs were phased out for almost all agricultural products, NAFTA (in accordance with the original CUSTA provisions) exempted certain products from market liberalization. These exemptions included U.S. imports from Canada of dairy products, peanuts, peanut butter, cotton, sugar, and sugar-containing products and Canadian imports from the United States of dairy products, poultry, eggs, and margarine. Canada liberalized its agricultural sector under NAFTA, but liberalization did not include its dairy, poultry, and egg product sectors, which continued to be governed by domestic supply management policies and are protected from imports by high over-quota tariffs. ", "Quotas that once governed bilateral trade in these commodities were redefined, under NAFTA, as tariff-rate quotas (TRQs) to comply with the Uruguay Round Agreement on Agriculture (URAA), which took effect on January 1, 1995. A TRQ is a quota for a volume of imports at a favorable tariff rate, which was set at zero under NAFTA. Imports beyond the quota volume face higher over-quota tariff rates.", "The United States and Mexico agreement under NAFTA did not exclude any agricultural products from trade liberalization. Numerous restrictions on bilateral agricultural trade were eliminated immediately upon NAFTA's implementation, while others were phased out over a 14-year period. Remaining trade restrictions on the last handful of agricultural commodities (such as U.S. exports to Mexico of corn, dry edible beans, and nonfat dry milk and Mexican exports to the United States of sugar, cucumbers, orange juice, and sprouting broccoli) were removed upon the completion of the transition period in 2008. Under NAFTA, Mexico eliminated all the tariffs and quotas that formerly governed agricultural imports from the United States.", "In addition to directly improving market access, NAFTA set guidance and standards on other policies and regulations that facilitated the integration of the North American agricultural market. For example, NAFTA included provisions for rules of origin, intellectual property rights, foreign investment, and dispute resolution. NAFTA's sanitary and phytosanitary (SPS) provisions made a significant contribution toward the expansion of agricultural trade by harmonizing regulations and facilitating trade. Because NAFTA entered into force before URAA, NAFTA's SPS agreement is considered to have provided the blueprint for URAA's SPS agreement.", "Regarding trade in agricultural products, the Office of the U.S. Trade Representative (USITC) asserts that USMCA would build upon NAFTA to make \"important improvements in the agreement to enable food and agriculture to trade more fairly, and to expand exports of American agricultural products.\" ", "For USMCA to enter into force, Congress would need to ratify the agreement. It must also be ratified by Canada and Mexico. The timeline for congressional approval of USMCA would likely occur under the Trade Promotion Authority (TPA) timeline established under the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 ( P.L. 114-26 ). At various times, President Trump has stated that he intends to withdraw from NAFTA. Some observers have suggested that delays in congressional action on USMCA could make it harder for Canada to consider USMCA approval this year because of upcoming parliamentary elections in October 2019. "], "subsections": []}, {"section_title": "Provisions of USMCA", "paragraphs": ["USMCA seeks to expand upon the agricultural provisions of NAFTA by further reducing market access barriers and strengthening provisions to facilitate trade in North America. An important change in USMCA compared to NAFTA is that the United States agreement with Canada would expand TRQs for imports of U.S. agricultural products into Canada. Other important changes from NAFTA include the agreement between the three countries\u2014Canada, Mexico, and the United States\u2014to further harmonize trade in products of agricultural biotechnology and apply the same health, safety, and marketing standards to agricultural and food imports from USMCA partners as for domestic products."], "subsections": [{"section_title": "Expansion of Market Access Provisions", "paragraphs": ["As agreed upon by the leaders of the United States, Canada, and Mexico, all food and agricultural products that have zero tariffs under NAFTA would remain at zero under USMCA. Under USMCA, agricultural products exempted from tariff elimination under the agreement signed between the United States and Canada would be phased out for further market liberalization. Canada currently employs a supply management regime that includes TRQs on imports of dairy and poultry under its NAFTA and World Trade Organization (WTO) market access commitments. Under NAFTA, U.S. dairy has access into the Canadian market under Canada's WTO commitment provisions. For poultry, NAFTA TRQs were established in accordance with the original CUSTA provisions as a percentage of Canada's domestic production. When Canada joined the WTO in 1995, it committed to provide poultry market access at the level that is the greater of its commitment under the WTO or under NAFTA. For chicken meat, the NAFTA TRQ, set at 7.5% of the previous year's domestic production, is higher than the WTO TRQ set at 39,844 metric tons. Canada's chicken meat NAFTA TRQ was 90,100 metric tons in 2018, and the estimate is 95,000 metric tons for 2019.", "Both the poultry and dairy TRQs under NAFTA are global rather than specific to U.S. imports. The WTO dairy TRQs often have specific allocations for individual countries. For example, the bulk of Canada's WTO cheese quota is allocated to the European Union (EU), and the entire WTO powdered buttermilk TRQ is allocated to New Zealand. Overall, Canada's TRQs appear to have restricted imports of dairy, poultry, and egg products, as the imported volumes for these products have regularly equaled or exceeded their set quota limits. ", "Under USMCA, Canada agreed to increase market access specifically to U.S. exporters of dairy products via new TRQs that are separate from Canada's existing WTO commitments. These additional TRQs apply only to the United States. For chicken meat and eggs, the USMCA replaces the NAFTA commitment with U.S.-specific TRQs. For turkey and broiler hatching eggs and chicks, Canada's NAFTA commitment would be replaced with a minimum access commitment under USMCA, which is not specific to U.S. imports but applies to imports from all origins. While USMCA would expand TRQs for U.S. exports, U.S. over-quota exports would still face the steep tariffs that currently exist under Canada's WTO commitment. ", "The United States, in turn, agreed to improve access to Canadian dairy products, sugar, peanuts, and cotton. The United States would increase TRQs for Canadian dairy, sugar, and sweetened products. Tariffs on cotton and peanut imports into the United States from Canada would be phased out and eliminated five years after the agreement would take effect.", "As for U.S.-Mexico trade in agricultural products, under NAFTA, Mexico eliminated all the tariffs and quotas that formerly governed agricultural imports from the United States, and the proposed USMCA provides for no further market access changes for imports by Mexico of U.S. agricultural products.", "The proposed changes in the market access regime for U.S. agricultural exports to Canada under USMCA are summarized in Table 2 . Canada's import restrictions on U.S. dairy products was a high-profile issue for the United States in the USMCA negotiations, so it is noteworthy that under USMCA, Canada agreed to reduce certain barriers to U.S. dairy exports, a key demand of U.S. dairy groups. For one, Canada would make changes to its milk pricing system that sets low prices for Canadian skim milk solids, which is believed to have undercut U.S. exports. Six months after USMCA goes into effect, Canada would eliminate its Class 7 milk price (which includes skim milk solids and is designated as Class 6 in Ontario) and would set its price for skim milk solids based on a formula that takes into account the U.S. nonfat dry milk price. In the future, the United States and Canada would notify each other if either introduces a new milk class price or changes an existing price for a class of milk products.", "Under USMCA, Canada would maintain its dairy supply management system, but the TRQs would be increased each year for U.S. exports of milk, cheese, cream, skim milk powder, condensed milk, yogurt, and several other dairy categories. While existing in-quota tariffs for U.S. dairy exports to Canada are mostly zero, the over-quota rates can be as high as 200%-300%. USMCA includes provisions on transparency for the implementation of TRQs, such as providing advance notice of changes to the quotas and making public the details of quota utilization rates so that exporters could monitor the extent to which the quotas are filled.", "While WTO TRQs are available to U.S. dairy product exporters under the current NAFTA provisions, the new TRQs proposed by Canada under USMCA would expand the access that U.S. dairy products would have into Canada. Large portions of Canada's WTO TRQs are allocated to other countries, such as cheese to the EU and powdered buttermilk to New Zealand. Thus, USMCA TRQs would open additional market opportunities for U.S. dairy exports to Canada. For example, the 64,500 metric ton fluid milk TRQ currently provided under NAFTA is available only for cross-border shoppers, but USMCA would allow up to 85% of the proposed new fluid milk TRQ, which would reach 50,000 metric tons by year 6, to U.S. commercial dairy processors. In response to another concern raised by the U.S. dairy industry, Canada agreed to cap its global exports of skim milk powder and milk protein concentrates and to provide information regarding these volumes to the United States. USMCA includes a requirement that the United States and Canada meet five years after the implementation of the agreement\u2014and every two years after that\u2014to determine whether to modify the dairy provisions of the agreement.", "Under USMCA, Canada has proposed to replace its NAFTA commitments for poultry and eggs with new TRQs. Under USMCA, the duty-free quota for chicken meat would start at 47,000 metric tons on the agreement's entry into force and would expand to 57,000 metric tons in year six. It would then continue to increase by 1% per year for the next 10 years ( Table 2 ). The United States would also have access to Canada's WTO chicken quota available to imports from all origins of 39,844 metric tons.", "Under USMCA, Canada's TRQ for imports of U.S. eggs would be phased in over six equal installments, reaching 10 million dozen by year six and then increasing by 1% per year for the next 10 years. The annual TRQ for turkey and broiler hatching eggs and chicks would be set by formulas based on Canadian production (see Table 2 ). The TRQs for turkey and broiler-hatching eggs and chicks are USMCA minimum global access commitments based on the greater of Canada's anticipated current year production or its WTO commitment volume."], "subsections": []}, {"section_title": "Improved Agricultural Trading Regime", "paragraphs": ["Under USMCA, several key provisions would further expand the Canadian and Mexican market access to U.S. agricultural producers. With the exception of the wheat grading provision between Canada and Mexico, the following provisions, which aim to improve the trading regime, apply to all three countries:", "Wheat . Canada and the United States have agreed that they shall accord \"treatment no less favorable than it accords to like wheat of domestic origin with respect to the assignment of quality grades.\" Currently, U.S. wheat exports to Canada are graded as feed wheat, which generally commands a lower price. Under USMCA, U.S. wheat exports to Canada would receive the same treatment and price as equivalent Canadian wheat if there is a predetermination that the U.S. wheat variety is similar to a Canadian variety. Canada maintains a list of registered wheat varieties, but the United States does not have a similar list. U.S. wheat exporters would first need to have U.S. varieties approved and registered in Canada before they would be able to benefit from this equivalency provision. According to some stakeholders, this process can be onerous and take several years. Cotton . The addition of a specific textile and apparel chapter to the proposed USMCA may support U.S. cotton production. The chapter promotes greater use of North American\u2013origin textile products such as sewing thread, pocketing, narrow elastics, and coated fabrics for certain end items. Spirits, wine, beer, and other alcoholic beverages . Each country must treat the distribution of another USMCA country's spirits, wine, beer, and other alcoholic beverages as it would its own products. The agreement also establishes new rules governing the listing requirements for a product to be sold in a given country with specific limits on cost markups of alcoholic beverages imported from USMCA countries. SPS provisions . USMCA's SPS chapter calls for greater transparency in SPS rules and regulatory alignment among the three countries. It would establish a new mechanism for technical consultations to resolve SPS issues. SPS provisions provide for increasing transparency in the development and implementation of SPS measures; advancing science-based decisionmaking; improving processes for certification, regionalization and equivalency determinations; conducting systems-based audits; improving transparency for import checks; and promoting greater cooperation to enhance compatibility of regulatory measures. Geographical indicatio ns (GIs) . The United States, Canada, and Mexico agreed to provide procedural safeguards for recognition of new GIs, which are place names used to identify products that come from certain regions or locations. USMCA would protect the GIs for food products that Canada and Mexico have already agreed to in trade negotiations with the EU and would lay out transparency and notification requirements for any new GIs that a country proposes to recognize. The agreement also details a process for determining whether a food name is common or is eligible to be protected as a GI. In a side letter accompanying the agreement, Mexico confirmed a list of 33 terms for cheese that would remain available as common names for U.S. cheese producers to use in exporting cheeses to Mexico. The list includes some terms that are protected as GIs by the EU, such as Edam, Gouda, and Brie. USMCA provisions would protect certain U.S., Canadian, and Mexican spirits as distinctive products. Under the proposed agreement, products labeled as Bourbon Whiskey and Tennessee Whiskey must originate in the United States. Similar protections would exist for Canadian Whiskey, while Tequila and Mezcal would have to be produced in Mexico. In a side letter accompanying the agreement, the United States and Mexico further agree to protect American Rye Whiskey, Charanda, Sotol, and Bacanora. Protections for proprietary food formulas . USMCA signatories agree to protect the confidentiality of proprietary formula information in the same manner for domestic and imported products. The agreement would also limit such information requirements to what is necessary to achieve legitimate objectives. Biotechnology . The agricultural chapter of USMCA lays out provisions for trade in products created using agricultural biotechnology, an issue that was not covered under NAFTA. USMCA provisions for biotechnology cover crops produced with all biotechnology methods, including recombinant DNA and gene editing. USMCA would establish a Working Group for Cooperation on Agricultural Biotechnology to facilitate information exchange on policy and trade-related matters associated with the products of agricultural biotechnology. The agreement also outlines procedures to improve transparency in approving and bringing to market agricultural biotech products. It further outlines procedures for handling shipments containing a low-level presence of unapproved products.", "While USMCA addresses a number of issues that restrict U.S. agricultural exports to Mexico and Canada, it does not include all of the changes sought by U.S. agricultural groups. For instance, the agreement does not include changes to trade remedy laws to address imports of seasonal produce as requested by Southeastern U.S. produce growers. It also does not address nontariff barriers to market access for U.S. fresh potatoes in Mexico and Canada. Canada's Standard Container Law (part of the Fresh Fruits and Vegetable Regulations of the Canadian Agricultural Products Act) prohibits the importation of U.S. fresh potatoes to Canada in bulk quantities (over 50 kilograms). Finally, the agreement does not address the removal of retaliatory tariffs on U.S. agricultural exports imposed by Canada and Mexico in response to U.S. Section 232 tariffs on steel and aluminum. Some U.S. agriculture stakeholders have expressed concern that the potential benefits of implementing USMCA would be outweighed by the retaliatory tariffs imposed on U.S. agricultural exports by Canada and Mexico. "], "subsections": []}]}, {"section_title": "U.S. Agricultural Trade with Canada and Mexico", "paragraphs": ["Since 2002, Canada and Mexico have been two of the top three export markets for U.S. agricultural products (competing with Japan until 2009, when China moved into the top three). In recent years, the two countries have jointly accounted for about 40% of the total value of U.S. agricultural exports. Intraregional trade in North America has increased substantially since the implementation of CUSTA and NAFTA and in the wake of Mexico's market-oriented agricultural reforms, which started in the 1980s ( Figure 1 ). The value of total U.S. agricultural product exports to Canada and Mexico rose from under $7 billion at the start of CUSTA in FY1990 to almost $10 billion at the start of NAFTA in FY1994 and peaked at $41 billion in FY2014. The lower level of exports since FY2014 is partly due to a drought-related decline in livestock production in parts of the United States; increased Canadian production of corn, rapeseed, and soybeans; increased use of U.S. corn as ethanol feedstock; growth in U.S. export markets outside of NAFTA; and increased competition from outside of NAFTA. Since mid-2018, U.S. exports of certain products have been adversely affected by the imposition of retaliatory tariffs by Canada and Mexico in response to the Trump Administration's application of a 25% tariff on all U.S. steel imports and a 10% tariff on all U.S. aluminum imports under Section 232 of the Trade Expansion Act of 1962. ", "Similar to the growth in U.S. agricultural exports, U.S. imports of agriculture and related products from Canada and Mexico grew from about $6 billion in FY1990 to $8 billion in FY1994, and U.S. agricultural exports continued to increase after NAFTA came into force on January 1, 1994, reaching $48 billion in FY2018. For FY2019, USDA projects that total U.S. agricultural exports to Canada and Mexico will to decline to $41.2 billion, while U.S. imports from those countries are projected at $49.6 billion."], "subsections": [{"section_title": "U.S. Agricultural Exports to Canada and Mexico", "paragraphs": [" Table 3 presents U.S. agricultural exports to Canada for selected years since 1990, the year after the implementation of CUSTA. The other years in the table include 1995 (the year following the start of NAFTA), 2009 (the year following the full implementation of NAFTA), and the last three years with complete fiscal year data: 2016, 2017, and 2018.", "U.S. agricultural exports to Canada averaged over $20 billion between FY2016 and FY2018 period ( Table 3 ) and accounted for 14% of the total value of U.S. agriculture exports in FY2018. While the overall value of U.S. agricultural exports to Canada has increased under NAFTA, U.S. exports of consumer-ready food products registered the greatest increase, accounting for almost 80% of the value of all U.S. agricultural exports to Canada in FY2018. Canada accounted for 24% of the value of total U.S. consumer-ready food product exports to all destinations in FY2018. ", "In FY2018, Canada accounted for 72% of the total value of U.S. fresh vegetable exports to all destinations, 54% of nonalcoholic beverage exports to all destinations, 51% of snack food exports to all destinations, 33% of total exports of fresh fruit, 33% of live animal exports, and 26% of total U.S. wine and beer exports to all destinations. Canada is also an important market for bulk agricultural commodities, and Canadian imports of U.S. corn, soybeans, rice, pulses, and wheat have increased since the implementation of NAFTA.", " Table 4 provides a summary of key U.S. agricultural exports to Mexico for selected years since FY1990. Total U.S. agricultural exports to Mexico grew from $2.7 billion in FY1990 to $3.7 billion in FY1995 after NAFTA came into force, reaching $18.8 billion in FY2018. Grains and meats account for the largest share of exports, but growth has been strong among most products including dairy, prepared food, fruit, tree nuts, sugars and sweeteners, wine and beer, and distillers dry grains.", "Between FY2016 and FY2018, U.S. agricultural exports to Mexico averaged over $18 billion, accounting for 13% of the total value of U.S. agricultural exports to all destinations in FY2018 ( Table 4 ). Consumer-ready products as a group account for a significant share of U.S. exports to Mexico at 13% of the total value of U.S. agricultural exports in FY2018. Mexico is also a major U.S. export market for a number of bulk agricultural commodities, meat, and dairy products. In FY2018, Mexico accounted for 25% of the total value of U.S. corn exports to all destinations, 24% of the total value of U.S. dairy exports, 22% each of the total value of U.S. pork and poultry exports, 12% of the total value of U.S. wheat exports, and 8% of the total value of U.S. soybeans exports to all destinations."], "subsections": []}, {"section_title": "U.S. Imports from Canada and Mexico", "paragraphs": ["U.S. agricultural imports from Canada and Mexico have increased in value from $26 billion in FY2009\u2014the first full year since the complete market liberalization under NAFTA in 2008\u2014to over $48 billion in FY2018 ( Table 5 ). ", "Major U.S. imports from Canada include snack foods, meats, and processed fruit and vegetable products. U.S. purchases of hogs and cattle from Canada had increased since NAFTA began, but these imports have declined since FY2016. North American market dynamics and the prevailing hog cycle dynamics in the NAFTA countries have affected live animal trade patterns in recent years. Similarly, U.S. coarse grain imports from Canada have also declined in recent years, likely the result of larger U.S. feed grain supplies. U.S. imports from Mexico mostly consist of fresh fruit and vegetables, alcoholic beverages, snack foods, and processed fruit and vegetable products."], "subsections": []}]}, {"section_title": "Economic Effects of NAFTA versus USMCA", "paragraphs": ["Many studies have assessed the effects of NAFTA on agriculture and the possible effects if NAFTA were to be terminated. It is difficult to isolate the effects of NAFTA from the market liberalization begun under CUSTA and from Mexico's unilateral trade liberalization measures in the 1980s and early 1990s, which included joining the General Agreement on Tariffs and Trade in 1986. Nevertheless, NAFTA is credited with facilitating trade in North America by reducing tariffs and other market access barriers and by providing a stable and improved trading environment in the region. Studies conducted by USDA indicate that U.S. agricultural exports to Canada and Mexico have been higher than they would have been in the absence of NAFTA. One such study concluded that NAFTA particularly expanded trade in those commodities that underwent the most significant reductions in tariff and nontariff barriers, including U.S. exports to Canada of wheat products, beef and veal, and cotton and U.S. exports to Mexico of rice, cattle and calves, nonfat dry milk, cotton, processed potatoes, apples, and pears.", "An October 2018 study commissioned by the Farm Foundation examines the potential economic benefits associated with (1) USMCA compared with the provisions provided under NAFTA, (2) USMCA in an environment with prevailing retaliatory tariffs on U.S. agricultural products in response to U.S. tariff increases on imports of steel and aluminum, and (3) the effect of a complete U.S. withdrawal from USMCA/NAFTA. The methodology used by the study assumes that each of the three trade policy scenarios would need to remain in place for at least three to five years or until the market equilibrium stabilizes following the initial policy shock. Thus, the estimated effects from the study can be considered as the long-run impacts. The study considers only proposed changes under USMCA to market access for U.S. agricultural exports to Canada, such as changes in TRQs and tariff rates. It does not consider other changes proposed for agriculture or for other sectors such as manufacturing and automobiles. The study's conclusions under these three scenarios follow.", "1. Comparing USMCA to NAFTA, the study estimates that USMCA would generate a net increase in annual U.S. agricultural exports to Canada of $450 million\u2014about 1% of current U.S. exports under NAFTA. This estimated increase would reflect increases in exports of dairy products (+$280 million) and meat (+$210 million), which would be partially offset by a decline in exports of other agricultural products (-$40 million). 2. Under the scenario where USMCA would enter into force but the retaliatory tariffs imposed by Canada and Mexico on U.S. agricultural exports would remain in place, the study projects U.S. agricultural export losses from the retaliatory tariffs of $1.8 billion annually, which would more than offset the projected gains of $450 million from USMCA ratification. 3. Under the scenario of a U.S. withdrawal from NAFTA without USMCA ratification, tariffs on U.S. exports to Canada and Mexico would be expected to return to the higher WTO most-favored-nation (MFN) rates, the highest level of applied tariffs rates under WTO commitments. In this circumstance, the study finds that U.S. agricultural and food exports to Canada and Mexico would decline by about $12 billion, or 30% of the value of U.S. agricultural exports to these markets in FY2018. This loss is expected to be partially offset by an increase of $2.6 billion in U.S. exports to other countries for a net loss in export revenues of $9.4 billion. A loss of this order would represent a decline of 24% compared with the total value of U.S. agricultural exports to these countries in FY2018.", "To date, similar studies assessing the effect of USMCA on U.S. agriculture as a whole are not available."], "subsections": [{"section_title": "U.S. Agricultural Stakeholders on USMCA", "paragraphs": ["Individual commodity groups have stated that they expect to benefit from market access gains. For example, the National Turkey Federation stated that USMCA would expand market access resulting in a 29% increase in U.S. turkey exports to Canada. A broad coalition of U.S. agricultural stakeholders is advocating for USMCA's approval, contending that the proposed agreement would further expand market access for U.S. agriculture. Most leading agriculture commodity groups have expressed their support for USMCA. The U.S. wheat industry states that although challenges remain in further opening commerce for U.S. wheat farmers near the border with Canada, USMCA retains tariff-free access to imported U.S. wheat for long-time flour milling customers in Mexico. The American Farm Bureau Federation expressed satisfaction that the USMCA not only locks in market opportunities previously developed but also builds on those trade relationships in several key areas. ", "On the other hand, other farm sector stakeholders, such as the National Farmers Union and the Institute for Agriculture and Trade Policy , have expressed concern that the proposed agreement does not go far enough to institute a fair trade framework that benefits family farmers and ranchers .", "Some agricultural market observers question whether the benefits to U.S. agriculture of USMCA over NAFTA will be more than incremental. Critics also point out that most U.S. agricultural exports currently enjoy zero tariffs under NAFTA and that the main market access gain under USMCA is through limited quota increases. A researcher for the International Food Policy Research Institute recently concluded that farm production costs would be expected to increase because of domestic content provisions in the agreement in tandem with the new U.S. tariffs on steel and aluminum imports.", "Upon signing of the USMCA on November 30, 2018, President Trump stated, \"This new deal will be the most modern, up-to-date, and balanced trade agreement in the history of our country, with the most advanced protections for workers ever developed.\" Regarding agriculture, Secretary Perdue echoed the sentiments expressed by most of the agricultural commodity groups: \"The new USMCA makes important specific changes that are beneficial to our agricultural producers. We have secured greater access to the Mexican and Canadian markets and lowered barriers for many of our products. The deal eliminates Canada's unfair Class 6 and Class 7 milk pricing schemes, opens additional access to U.S. dairy into Canada, and imposes new disciplines on Canada's supply management system. The agreement also preserves and expands critical access for U.S. poultry and egg producers and addresses Canada's discriminatory wheat grading process to help U.S. wheat growers along the border become more competitive.\""], "subsections": []}]}, {"section_title": "Outlook for Proposed USMCA", "paragraphs": ["The proposed USMCA would have to be approved by Congress and ratified by Mexico and Canada before entering into force. On August 31, 2018, pursuant to TPA, President Trump provided Congress a 90-day notification of his intent to sign a free trade agreement with Canada and Mexico. On January 29, 2019\u201460 days after an agreement was signed, and as required by TPA\u2014U.S. Trade Representative Robert Lighthizer submitted to Congress changes to existing U.S. laws that would be needed to bring the United States into compliance with the proposed USMCA. A report by the USITC on the possible economic impact of TPA is not expected to be completed until April 20, 2019, due to the 35-day government shutdown. The report has been cited by some Members of Congress as key to their decisions on whether to support the agreement. ", "Some policymakers have stated that the path to ratifying USMCA by Congress is uncertain partially because the three countries have yet to resolve disputes over tariffs on U.S. imports of steel and aluminum, as well as retaliatory tariffs that Canada and Mexico have imposed on U.S. agricultural products. The conclusion of the proposed USMCA did not resolve these tariff disputes. ", "On January 30, 2019, Senator Chuck Grassley called on the Trump Administration to lift tariffs on steel and aluminum imports from Canada and Mexico before Congress begins considering legislation to implement the USMCA. Representatives of the U.S. business community, agriculture interest groups, other congressional leaders, and Canadian and Mexican government officials have also stated that these tariff issues must be resolved before the USMCA enters into force. ", "Other Members of Congress have raised issues regarding labor and environmental provisions of USMCA. Speaker Pelosi has stated that she wants \"stronger enforcement language\" and that the USMCA talks should be reopened to tighten enforcement provisions for labor and environmental protections.", "Some trade observers believe that delays in congressional action on USMCA could make it harder for Canada to consider USMCA approval this year because of upcoming parliamentary elections in October 2019."], "subsections": []}]}}
{"id": "R43832", "title": "Russian Compliance with the Intermediate Range Nuclear Forces (INF) Treaty: Background and Issues for Congress", "released_date": "2019-02-08T00:00:00", "summary": ["The United States and Soviet Union signed the Intermediate-Range Nuclear Forces (INF) Treaty in December 1987. Negotiations on this treaty were the result of a \"dual-track\" decision taken by NATO in 1979 in response to concerns about the Soviet Union's deployment of new intermediate-range nuclear missiles. NATO agreed both to accept deployment of new U.S. intermediate-range ballistic and cruise missiles and to support U.S. efforts to negotiate with the Soviet Union to limit these missiles. In the INF Treaty, the United States and Soviet Union agreed that they would ban all land-based ballistic and cruise missiles with ranges between 500 and 5,500 kilometers. The ban would apply to missiles with nuclear or conventional warheads, but would not apply to sea-based or air-delivered missiles.", "The U.S. State Department, in the 2014, 2015, 2016, 2017, and 2018 editions of its report Adherence to and Compliance with Arms Control, Nonproliferation, and Disarmament Agreements and Commitments, stated that the United States has determined that \"the Russian Federation is in violation of its obligations under the [1987 Intermediate-range Nuclear Forces] INF Treaty not to possess, produce, or flight-test a ground-launched cruise missile (GLCM) with a range capability of 500 km to 5,500 km, or to possess or produce launchers of such missiles.\" In the 2016 report, it noted that \"the cruise missile developed by Russia meets the INF Treaty definition of a ground-launched cruise missile with a range capability of 500 km to 5,500 km.\" In late 2017, the United States released the Russian designator for the missile\u20149M729. The United States has also noted that Russia has deployed several battalions with the missile. In late 2018, the Office of the Director for National Intelligence provided further details on the violation.", "The Obama Administration raised its concerns about Russian compliance with the INF Treaty in a number of meetings since 2013. Russia repeatedly denied that it had violated the treaty. In October 2016, the United States called a meeting of the Special Verification Commission, which was established by the INF Treaty to address compliance concerns. During this meeting, in mid-November, both sides raised their concerns, but they failed to make any progress in resolving them. A second SVC meeting was held in December 2017. The United States has also begun to consider a number of military responses, which might include new land-based INF-range systems or new sea-launched cruise missiles, both to provide Russia with an incentive to reach a resolution and to provide the United States with options for future programs if Russia eventually deploys new missiles and the treaty regime collapses. It might also suspend or withdraw from arms control agreements, although several analysts have noted that this might harm U.S. security interests, as it would remove all constraints on Russia's nuclear forces.", "The Trump Administration conducted an extensive review of the INF Treaty during 2017 to assess the potential security implications of Russia's violation and to determine how the United States would respond going forward. On December 8, 2017\u2014the 30th anniversary of the date when the treaty was signed\u2014the Administration announced that the United States would implement an integrated response that included diplomatic, military, and economic measures. On October 20, 2018, President Trump announced that the United States would withdraw from INF, citing Russia's noncompliance as a key factor in that decision. The United States suspended its participation in the treaty and submitted its official notice of withdrawal February 2, 2019. Russia responded by suspending its participation on February 2, 2019, as well.", "Congress is likely to continue to conduct oversight hearings on this issue, and to receive briefings on the status of Russia's cruise missile program. It may also consider legislation authorizing U.S. military responses and supporting alternative diplomatic approaches. This report will be updated as needed."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Recent Development", "paragraphs": ["On February 2, 2019, the United States suspended its participation in the Intermediate-Range Nuclear Forces (INF) Treaty and notified Russia of its intent to withdraw from the treaty. Under Article XV of the treaty, the withdrawal will take effect in six months. Russian President Vladimir Putin also announced, on February 2, 2019, that Russia would suspend its participation in the treaty.", "U.S. and Russian officials had met in Geneva on January 15, 2019, in one last attempt to reach an agreement. According to press reports, Russian diplomats proposed that Russia display the 9M729 missile and demonstrate that it could not fly to INF range, while the United States, in exchange, could demonstrate that the MK-41 launchers in Romania could not be converted to launch INF-range cruise missiles. The United States rejected this proposal and indicated that the only acceptable solution would be for Russia to destroy the missile, its launchers, and its supporting infrastructure. Nevertheless, on January 23, 2019, Russia displayed the canister for the 9M729 cruise missile for an audience of foreign military attach\u00e9s and the press. Russia noted that, although the missile was a little longer than the similar 9M728 cruise missile, the added length did not increase the range of the missile. It was needed to house a larger warhead and guidance system. No officials from the United States or NATO nations attended the display, arguing that it was a public relations event. U.S. officials also argued that a static display of the missile's canister would not address questions about the missile's range in flight.", "Over the past few years, NATO, as a whole, has echoed U.S. concerns about Russia's new missile, but some Members have expressed doubt about whether the United States had enough evidence to conclude that the missile violated the INF Treaty. This doubt has ebbed recently, as the allies have offered strong support for the U.S. decision to withdraw from the treaty. In the joint statement released after their December 4 meeting, NATO Foreign Ministers stated that they \"strongly support the finding \u2026 that Russia is in material breach of its obligations under the INF Treaty.\" In a statement released on February 1, 2019, the North Atlantic Council noted that Russia had \"taken no demonstrable steps toward returning to full and verifiable compliance\" and that \"Russia will bear sole responsibility for the end of the Treaty.\" At the same time, the statement noted that the \"allies are firmly committed to the preservation of effective international arms control, disarmament and non-proliferation\" and \"will continue to uphold, support, and further strengthen arms control, disarmament and non-proliferation, as a key element of Euro-Atlantic security.\""], "subsections": []}, {"section_title": "Introduction", "paragraphs": [], "subsections": [{"section_title": "The Russian Violation", "paragraphs": ["In July 2014, the State Department released the 2014 edition of its report Adherence to and Compliance with Arms Control, Nonproliferation, and Disarmament Agreements and Commitments . This report stated that the United States had determined that \"the Russian Federation is in violation of its obligations under the [1987 Intermediate-range Nuclear Forces] INF Treaty not to possess, produce, or flight-test a ground-launched cruise missile (GLCM) with a range capability of 500 km to 5,500 km, or to possess or produce launchers of such missiles.\" The report did not offer any details about the offending missile or cite the evidence that the United States used to make this determination, but it did note that the United States \"raised these concerns with the Russian Federation\" several times during 2013 and \"will continue to pursue resolution\" of the issue.", "The 2015, 2016, 2017, and 2018 State Department reports on Adherence to and Compliance with Arms Control, Nonproliferation, and Disarmament Agreements and Commitments repeated the claim that Russia had violated the INF Treaty and added a few details to the assertion. These reports state that \"the United States determined the cruise missile developed by the Russian Federation meets the INF Treaty definition of a ground-launched cruise missile with a range capability of 500 km to 5,500 km, and as such, all missiles of that type, and all launchers of the type used to launch such a missile, are prohibited under the provisions of the INF Treaty.\" The Obama Administration also noted that, as in past years, \"the United States again raised concerns with Russia on repeated occasions in an effort to resolve U.S. concerns. The United States will continue to pursue resolution of U.S. concerns with Russia.\" The 2016 report did not, however, repeat the assessment mentioned in 2015 that \"it is in the mutual security interests of all the Parties to the INF Treaty that Russia and the other 11 successor states to the Soviet Union remain Parties to the Treaty and comply with their obligations.\" The 2017 and 2018 reports include details on the types of information the United States has shared with Russia to bolster its claim of Russian noncompliance.", "The 2018 version of the State Department report confirmed that Russia continues to be in violation of its obligation \"not to possess, produce, or flight-test a ground-launched cruise missile (GLCM) with a range capability of 500 kilometers to 5,500 kilometers, or to possess or produce launchers of such missiles.\" As in past reports, it did not contain details about the capabilities of the offending missile or confirm press reports about the missile's deployment. However, the report indicated that the United States has provided Russia with \"information pertaining to the missile and the launcher, including Russia's internal designator for the mobile launcher chassis and the names of the companies involved in developing and producing the missile and launcher\" and \"information on the violating GLCM's test history, including coordinates of the tests and Russia's attempts to obfuscate the nature of the program.\" The report also indicated that the GLCM has a range capability of between 500 and 5,500 kilometers and that it is \"distinct from the R-500/SSC-7 GLCM or the RS-26 ICBM.\" It stated that \"the United States assesses the Russian designator for the system in question is 9M729.\"", "U.S. officials have since offered added details about U.S. assessment of Russian noncompliance with INF. In December 2018, Secretary of State Pompeo noted that Russia has deployed several battalions of the 9M729 missile. In addition, in late November 2018, the U.S. Director of National Intelligence, Daniel Coats, offered a more detailed explanation of the U.S. assessment of Russia's noncompliance He noted that Russia \"began the covert development of an intermediate-range, ground-launched cruise missile designated 9M729 probably by the mid-2000s\" and that it had \"had completed a comprehensive flight test program\" with launches from both fixed and mobile launchers by 2015. He also noted that \"Russia conducted the flight test program in a way that appeared purposefully designed to disguise the true nature of their testing activity as well as the capability of the 9M729 missile.\" He noted that Russia first tested the missile to a range \"well over\" 500 kilometers from a fixed launcher, which would be permitted by the treaty if the missile were to be deployed as a sea-based or air-delivered cruise missile. But he noted that \"Russia then tested the same missile at ranges below 500 kilometers from a mobile launcher.\" He then noted that \"by putting the two types of tests together\" Russia developed an INF-range missile that could be launched from a \"ground-mobile platform.\"", "The DNI's timeline confirmed press reports that had indicated that the United States identified Russian activities that raised INF compliance concerns as early as 2008 and that the Obama Administration began to mention these concerns to Members of Congress in late 2011. Reports from October 2016 indicated that the Administration had concluded that Russia might be preparing to deploy the missile, as it is producing more missiles than it would need to support a test program. This deployment evidently occurred in December 2016, with one brigade remaining at the test site at Kapustin Yar and another moving to a different base within Russia. Reports indicate that some U.S. officials also believe Russia may be taking steps toward pulling out of the treaty.", "As noted below, Russia repeatedly denied that it had developed a cruise missile with a range that would violate the INF Treaty. After the United States released the designator for the missile, Russia acknowledged the existence of the 9M729 cruise missile but continued to deny that the missile has been tested to, or is capable of flying to, INF range. In a press briefing on November 26, 2018, Deputy Foreign Minister Sergey Ryabkov stated that the U.S. claims are \"fabrications\" and are \"inconsistent with reality and is an obvious attempt by the United States to distort reality.\" He claimed that Russia had engaged in detailed technical discussions with the United States about the capabilities of the missile and that Russia had told the United States that the missile is an \"an upgraded version of the Iskander-M system missile\" that was launched at its maximum range at the Kapustin Yar testing ground on September 18, 2017,\" and covered \"less than 480 km.\" This would place the missile within the range permitted by the INF Treaty. ", "In a statement to the press on December 5, 2018, Russian President Vladimir Putin noted that Russia did not \"agree with the destruction of this deal. But if this happens, we will react accordingly.\" He further noted that if the United States developed INF-range missiles, Russia would do so as well. General Valery Gerasimov, the chief of staff of the Russian military, also told foreign military attaches that Russia would respond if the United States \"were to destroy\" the treaty. He indicated that U.S. missile sites on allied territory could become \"the targets of subsequent military exchanges.\""], "subsections": []}, {"section_title": "The U.S. Reaction", "paragraphs": ["Obama Administration officials often stated that the INF Treaty remained in the security interest of the United States and its allies, and that the U.S. goal is to \"to work to bring Russia back in to full compliance.\" However, because Russia was unwilling to address U.S. concerns or even acknowledge the existence of the offending cruise missile, the United States reviewed a broad range of economic and military options that might both provide an incentive for Russia to return to compliance with the treaty and provide the United States with the capability to counter Russian actions if it does not return to compliance. ", "Secretary of Defense Mattis addressed the INF Treaty when responding to questions submitted prior to his nomination hearing in early 2017. He stated that Russia's violation of the treaty \"increases the risk to our allies and poses a threat to U.S. forces and interests.\" He also noted that Russia's violation, if allowed to stand, \"could erode the foundations of all current and future arms control agreements and initiatives.\" At the same time, he stated that the violation would not provide Russia with a \"significant military advantage,\" although, if Russia chooses to \"act as an adversary, we must respond appropriately and in league with our allies.\" Further, he echoed the Obama Administration's view that \"returning to compliance is in Russia's best interest.\" Secretary Mattis reaffirmed this goal in November 2017, after a meeting with NATO defense ministers. ", "Secretary Mattis offered a more blunt assessment prior to the NATO meeting of defense ministers in October 2018, when he stated that \"the current situation, with Russia in blatant violation of this treaty, is untenable.\" He also said that \"Russia must return to compliance with the INF Treaty or the U.S. will need to match its capabilities to protect U.S. and NATO interests.\" Press reports indicated that the Trump Administration was moving forward with efforts to begin research and development into a new U.S. ground-launched cruise missile of INF range.", "The Trump Administration conducted a review of the INF Treaty during its first year in office, and announced the results on December 8, 2017\u2014the 30 th anniversary of the date the treaty was signed. The Administration identified an \"integrated strategy\" that it would implement to seek to resolve questions about Russia's compliance, to press Russia to return to compliance, and to prepare the United States to defend itself and its allies if Russia continued to violate the treaty and the treaty collapsed. Specifically, it noted that the United States will continue \"to seek a diplomatic resolution through all viable channels, including the INF Treaty's Special Verification Commission (SVC).\" Second, it stated that DOD \"is commencing INF Treaty-compliant research and development (R&D) by reviewing military concepts and options for conventional, ground-launched, intermediate-range missile systems.\" It noted that this effort would not violate the INF Treaty, but would \"prepare the United States to defend itself and its allies\" if the treaty collapsed as a result of Russia's violation. Finally, the United States will take economic measures \"tied to entities involved in the development and manufacture of Russia's prohibited cruise missile system.\" It noted that both the military steps and economic measures would cease if Russia returned to compliance with the treaty.", "When the Administration released its integrated strategy, it reaffirmed U.S. support for the INF Treaty and its interest in convincing Russia to return to compliance. In an interview with the Russian newspaper Kommersant , Thomas Shannon, who was the Under Secretary of State for Political Affairs, stated that \"the Trump Administration values the INF Treaty as a pillar of international security and stability.\" He also noted that \"in this time of increased tensions between the United States and Russia, INF and other arms control agreements are essential for ensuring transparency and predictability in our relationship.\" However, he also stated that while the United States is \"making every effort to preserve the INF Treaty in the face of Russian violations,\" a \"continuation of a situation in which the United States remains in compliance while Russia violates the agreement is unacceptable to us.\" Hence, he emphasized that \"Russia needs to return to compliance with its obligations by completely and verifiably eliminating the prohibited missile system.\" ", "In support of this objective, the United States called for a meeting of the Special Verification Commission; this meeting was held in Geneva from December 12 to 14, 2017. As the State Department noted, the participants agreed that \"the INF Treaty continues to play an important role in the existing system of international security, nuclear disarmament and non-proliferation, and that they will work to preserve and strengthen it.\" But, according to some reports, Russia continued to deny that the 9M729 ground-based cruise missile had ever been tested to INF range or that telemetry from the tests supported a conclusion that it violated the INF Treaty. The United States has not disputed, publicly, Russia's assertion that it did not test the missile to INF range, but it did note, in the State Department's Annual Report, that Russia has attempted to \"obfuscate the nature of the program.\"", "Although these statements from Trump Administration seemed to indicate that it would continue to press Russia to comply with the INF Treaty and that it continued to believe the treaty served U.S. national security interests, the President reversed course in October 2018. On October 20, he announced that the United States would withdraw from the treaty, citing both Russia's violation and China's nonparticipation. He noted that both nations were expanding their forces of intermediate-range missiles and that the United States was going to have to develop these weapons. His national security advisor, John Bolton, conveyed the U.S. intentions to Moscow on October 23. ", "On December 4, 2018, after a meeting of the NATO foreign ministers, Secretary of State Pompeo declared that the United States \"has found Russia in material breach of the treaty and will suspend our obligations as a remedy effective in 60 days unless Russia returns to full and verifiable compliance.\" He indicated that the United States would not \"test or produce or deploy any systems\" banned by the treaty during the 60-day period, but would provide its official notice of the intent to withdraw, and begin the six-month withdrawal period allowed by the treaty, at the end of the 60 days if Russia did not return to compliance.", "U.S. and Russian officials met in Geneva on January 15, 2019, but were unable to reach an agreement. According to press reports, Russian diplomats proposed that Russia display the 9M729 missile and demonstrate that it could not fly to INF range, while the United States, in exchange, could demonstrate that the MK-41 launchers in Romania could not be converted to launch INF-range cruise missiles. The United States rejected this proposal and indicated that the only acceptable solution would be for Russia to destroy the missile, its launchers, and its supporting infrastructure. Andrea Thompson, the Undersecretary of State for Arms Control and International Security, noted that an inspection of the missile would not allow the United States to \"confirm the distance that missile can travel,\" and that the \"verifiable destruction of the non-compliant system\" was the only way for Russia \"to return to compliance in a manner that we can confirm.\" While Russian officials indicated they were willing to continue the talks, Thompson also noted that there were no plans for additional meetings, and, if Russia did not agree to eliminate the missile, the United States would suspend its participation in the treaty and submit a formal notice of withdrawal on February 2, 2019.", "After the Obama Administration declared that Russia was in violation of the INF Treaty, Congress sought additional information in briefings by Administration officials. It also called on the Obama Administration, in both letters and legislation, to press U.S. compliance concerns with Russia, to hold Russia accountable for its actions, and to forgo additional reductions in U.S. nuclear weapons, either unilaterally or through a treaty, until Russia returns to compliance with the INF Treaty. In a letter sent after the October 2016 allegations, Representative Thornberry and Representative Nunes called on the Administration to not only forswear any further changes to U.S. nuclear doctrine and force structure but also to implement economic sanctions and military responses to \"ensure Russia understood the cost of its illegal activity.\"", "Members also highlighted their concerns with Russia's compliance with the INF Treaty in legislation. The House version of the FY2015 National Defense Authorization Act ( H.R. 4435 , \u00a71225) stated that Congress believes Russia is in \"material breach of its obligations\" under the INF Treaty and that \"such behavior poses a threat to the United States, its deployed forces, and its allies.\" The legislation also called on the President to consider, after consulting with U.S. allies, whether remaining a party to the INF Treaty was still in their national security interests if Russia was in \"material breach\" of the treaty. The final version of this legislation ( H.R. 3979 , \u00a71244) did not include these provisions, but did recognize that Russian violations of the INF Treaty are a serious challenge to the security of the United States and its allies. The final version also stated that it is in the national security interest of the United States and its allies for the INF Treaty to remain in effect and for Russia to return to full compliance with the treaty. At the same time, the legislation mandated that the President submit a report to Congress that includes an assessment of the effect of Russian noncompliance on the national security interests of the United States and its allies, and a description of the President's plan to resolve the compliance issues. The legislation also calls for periodic briefings to Congress on the status of efforts to resolve the U.S. compliance concerns. ", "The FY2016 NDAA ( H.R. 1735 , \u00a71243) also contained provisions addressing congressional concerns with Russia's actions under the INF Treaty. As is discussed in more detail below, it not only mandated that the President notify Congress about the status of the Russian cruise missile program, it also mandated that the Secretary of Defense submit a plan for the development of military capabilities that the United States might pursue to respond to or offset Russia's cruise missile program. In early 2017, following press reports that Russia had begun to deploy the missile, Senator Tom Cotton introduced legislation ( S. 430 )\u2014titled the Intermediate-Range Nuclear Forces (INF) Treaty Preservation Act of 2017\u2014that would authorize the appropriation of $500 million for the Pentagon to develop active defenses to counter ground-launched missile systems of INF range; to develop counterforce capabilities to prevent attacks from these missiles; and to facilitate \"the transfer to allied countries\" of missile systems of INF range. The legislation also stated that the United States should \"establish a program of record\" to develop its own INF-range ground-launched cruise missile system.", "The House and Senate both included provisions in their versions of the National Defense Authorization Act for 2018 that call for the development of a new U.S. land-based cruise missile. The House bill ( H.R. 2810 , \u00a71244) mandated that the Secretary of Defense both \"establish a program of record to develop a conventional road-mobile ground-launched cruise missile system with a range of between 500 to 5,500 kilometers\" and submit \"a report on the cost, schedule, and feasibility to modify existing and planned missile systems ... for ground launch with a range of between 500 and 5,500 kilometers.\" The bill (\u00a71245) also mandated that the President submit a report to Congress that contains a determination of whether Russia has flight-tested, produced, or \"continues to possess\" a ground-launched cruise missile of INF range. If the President makes this determination, the bill states that the INF Treaty's ban on intermediate-range missiles will \"no longer be binding on the United States as a matter of United States law.\"", "The Senate bill (\u00a71635) did not use the phrase \"program of record\" in its response to Russia's INF violation, but stated that DOD should establish \"a research and development program for a dual-capable road-mobile ground-launched missile system with a maximum range of 5,500 kilometers.\" The Senate also required a report on the feasibility of modifying other missile systems and mandates that the costs and feasibility of these modifications be compared to the costs and feasibility of a new ground-launched cruise missile.", "The conference report on the 2018 NDAA ( H.Rept. 115-404 ) retains the House language that mandates that the Secretary of Defense \"establish a program of record to develop a conventional road-mobile ground-launched cruise missile system with a range of between 500 to 5,500 kilometers\" and authorizes $58 million in funding for the development of active defenses to counter INF-range ground-launched missile systems; counterforce capabilities to prevent attacks from these missiles; and countervailing strike capabilities to enhance the capabilities of the United States. It does not include the House version's requirement that the President submit a report to Congress, but it does direct the Director of National Intelligence to notify Congress \"of any development, deployment, or test of a system by the Russian Federation that the Director determines is inconsistent with the INF Treaty.\" Further, the conference report does not contain the House language stating that this determination would mean that the treaty is no longer binding on the United States. Instead, it requires a report outlining possible sanctions against individuals in Russia who are determined to be \"responsible for ordering or facilitating non-compliance by the Russian Federation.\"", "Congress also addressed the INF Treaty in the National Defense Authorization act for FY2019 ( P.L. 115-232 , \u00a71243). This legislation states that the President must submit a determination to Congress stating whether Russia \"is in material breach of its obligations under the INF Treaty\" and whether \"the prohibitions set forth in Article VI of the INF Treaty remain binding on the United States as a matter of United States law.\" These are the prohibitions on the testing and deployment of land-based ballistic and cruise missiles with a range between 500 and 5,500 kilometers. The legislation also expressed the sense of Congress that Russia's testing and deployment of an INF-range cruise missile had \"defeated the object and purpose of the INF Treaty\" and, therefore, constituted a \"material breach\" of the treaty. As a result, it stated that it was the sense of Congress that the United States \"is legally entitled to suspend the operation of the INF Treaty.\" The House version of the FY2019 NDAA ( H.R. 5515 ) had included this language as a \"statement of policy\" rather than a \"sense of Congress.\" The change in language in the final version of the bill indicates that the President, not Congress, would make the determination of a \"material breach.\" The legislation also stated that the United States should \"take actions to encourage the Russian Federation to return to compliance\" by providing additional funds for the development of military capabilities needed to counter Russia's new cruise missile and by \"seeking additional missile defense assets \u2026 to protect United States and NATO forces\" from Russia's noncompliant ground-launched missile systems.", "Some in Congress have also crafted legislation to constrain or delay U.S. withdrawal from the INF Treaty. In late November 2018, several Senators\u2014led by Senators Merkley, Warren, Gillibrand, and Markey\u2014introduced a bill that would prohibit funding for a new INF-range cruise missile or ballistic missile until the Trump Administration submitted a report that, among other things, identified a U.S. ally formally willing to host such a system on its territory; detailed recent diplomatic efforts to bring Russia back into compliance with the treaty; and assessed the risk to U.S. and allied security of if Russia deployed greater numbers of intermediate range missiles.", "This report describes the current status of the INF Treaty and highlights issues that Congress may address as the United States pursues its compliance concerns with Russia. It begins with a historical overview that describes the role of intermediate-range nuclear weapons in NATO's security construct in the late 1970s and the political and security considerations that affected the negotiation of the INF Treaty. In addition, the report summarizes the provisions of the INF Treaty, highlighting those central to the discussion about Russia's current activities. It then reviews the publicly available information about the potential Russian violation and Russia's possible motivations for pursuing the development of a noncompliant missile. Next, the report summarizes Russia's concerns with U.S. compliance with the treaty. The report concludes with a discussion of options that the United States might pursue to address its concerns with Russia's activities and options that it might pursue if Russia deploys new INF-range missiles."], "subsections": []}]}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "Nuclear Weapons in NATO During the Cold War", "paragraphs": [], "subsections": [{"section_title": "Strategy and Doctrine", "paragraphs": ["During the Cold War, nuclear weapons were central to the U.S. strategy of deterring Soviet aggression against the United States and U.S. allies. Toward this end, the United States deployed a wide variety of nuclear-capable delivery systems. These included mines, artillery, short-, medium-, and long-range ballistic missiles, cruise missiles, and gravity bombs. These weapons were deployed with U.S. troops in the field, aboard aircraft, on surface ships, on submarines, and in fixed, land-based launchers. The United States also articulated a complex strategy and developed detailed operational plans that would guide the use of these weapons in the event of a conflict with the Soviet Union and its allies.", "The United States maintained its central \"strategic\" weapons\u2014long-range land-based missiles, submarine-based missiles, and long-range bombers\u2014at bases in the United States. At the same time, it deployed thousands of shorter-range, or nonstrategic, nuclear weapons with U.S. forces based in Europe, Japan, and South Korea and on surface ships and submarines around the world. It maintained these overseas deployments to extend deterrence and to defend its allies in Europe and Asia. Not only did the presence of these weapons (and the presence of U.S. forces, in general) serve as a reminder of the U.S. commitment to defend its allies if they were attacked, the weapons also could have been used on the battlefield to slow or stop the advance of an adversary's conventional forces.", "In Europe, these weapons were part of the North Atlantic Treaty Organization's (NATO's) strategy of \"flexible response.\" The United States and its NATO allies recognized that the Soviet Union and Warsaw Pact had numerical superiority in conventional forces and that, without the possibility of resort to nuclear weapons, the United States and NATO might be defeated in a conventional conflict. As a result, the flexible response strategy was designed to allow NATO to respond, if necessary, with nuclear weapons and to control escalation if nuclear weapons were used. Controlling escalation meant that the United States and NATO might be the first to use nuclear weapons in a conflict, with the intent of slowing or stopping the Soviet and Warsaw Pact forces if they overran NATO's conventional defenses and advanced into Western Europe. If the conflict continued, and the Soviet Union responded with its own nuclear weapons in an effort to disrupt the NATO response, then NATO could have escalated beyond the battlefield and employed weapons with greater ranges or greater yields in attacks reaching deeper into Warsaw Pact territory. Ultimately, if the conflict continued and Western Europe remained under attack, the United States could have launched its longer-range strategic missiles and bombers against targets inside the Soviet Union. ", "This nuclear posture was designed to couple U.S. and allied security and, therefore, complicate Soviet efforts \"to pursue a divide and conquer strategy toward NATO.\" It had three overlapping objectives. First, the weapons and operational plans were designed to provide NATO with military capabilities that could have affected outcomes on the battlefield; in other words, NATO hoped it might at least disrupt the Soviet attack if not defeat Soviet and Warsaw Pact forces. Second, the ability of the United States and NATO to escalate the conflict, and hold at risk targets in the Soviet Union, was intended to deter an attack on Western Europe by convincing the Soviet Union and Warsaw Pact that any conflict, even one that began with conventional weapons, could result in nuclear retaliation. Third, this approach was designed to assure U.S. allies in Europe that the United States would come to their defense, as mandated by Article V of the 1949 North Atlantic Treaty, if any of the allies were attacked by Soviet or Warsaw Pact forces."], "subsections": []}, {"section_title": "Questions of Credibility", "paragraphs": ["As is often noted in discussions of extended deterrence today, the U.S. ability both to assure its allies of its commitment to their defense and to deter adversaries from attacking those allies rests on the credibility of the U.S. threat to resort to the use of nuclear weapons. While some argue that the existence of nuclear weapons may be enough to underscore the threat, most analysts agree that a credible threat requires plausible plans for nuclear use and weapons that can be used in executing those plans. During the Cold War, the United States often altered the numbers and types of nuclear weapons it deployed in Europe to bolster the credibility of its extended deterrent. Although many of these changes occurred in response to ongoing modernization programs and new assessments of Soviet capabilities, some were designed to respond to emerging concerns among U.S. allies about the credibility of the U.S. promise to fight in Europe in their defense. This was the case with the intermediate-range missiles that the United States deployed in Europe in 1983 and removed, under the terms of the INF Treaty, between 1988 and 1991.", "One concern about the credibility of the U.S. extended deterrent derived from the short range of many of the U.S. nuclear weapons deployed in Europe. As noted above, many of these weapons were designed for use on the battlefield to disrupt a conventional attack by Soviet and Warsaw Pact forces. To make the threat of the possible use of nuclear weapons credible to the Soviet Union and its allies, the United States based significant numbers of these weapons near the potential front lines of a conflict in West Germany. This placement increased the likelihood that NATO would use the weapons early in a conflict and was intended to convince the Soviet Union of the potential for their use, because, if they were not used early, they would likely be overrun by Warsaw Pact forces. At the same time, though, the early use of these weapons would have caused extensive damage on the territory of West Germany, leading some to question whether NATO would actually employ the weapons early in conflict. If the Soviet Union did not believe that NATO would use these weapons, it might believe that it could defeat at least some of the NATO allies (West Germany, in particular) without risking a response from the entire alliance or the escalation to nuclear war. Moreover, if some NATO allies did not believe that NATO would use the weapons to stop a Soviet attack, such allies might be vulnerable to coercion or intimidation from the Soviet Union prior to the start of a conflict. In this type of scenario, the Soviet Union might believe it could divide NATO by threatening some, but not all, of its members. As a result, many analysts argued that longer-range systems that could be deployed farther from the front lines and reach targets deeper inside enemy territory would provide a more credible deterrent.", "A second concern about the credibility of U.S. assurances to its allies derived from the Soviet ability to attack the continental United States in response to a U.S. attack on the Soviet Union. Leaders in some of the allied countries questioned whether they could rely on the United States to attack targets in the Soviet Union, as a part of an escalation following an attack in Europe, if the Soviet Union could respond with attacks on targets inside the United States with \"potentially suicidal consequences\" for the United States. Some of the allies feared that if U.S. vulnerability deterred the United States from attacking the Soviet Union in defense of Europe, then a war in Europe, even if it escalated to nuclear use, might remain confined to Europe, with the security of the NATO allies decoupled from the security of the United States. If the allies lacked confidence in the U.S. promise to escalate to strategic strikes on their behalf, then they might, again, be vulnerable to Soviet efforts to coerce or intimidate them before the war began. In addition, if the Soviet Union did not believe that the United States would escalate to strategic nuclear attacks, knowing that it was vulnerable to retaliation, then the Soviet Union might believe it could divide NATO with threats of war.", "Concerns about the decoupling of U.S. and allied security, or, as it was often phrased, the question of whether the United States would actually \"trade New York for Bonn,\" grew during the latter half of the 1970s, after the Soviet Union began to deploy SS-20 intermediate-range ballistic missiles. These three-warhead missiles, which nominally replaced older SS-4 and SS-5 missiles, had a range of 4,000 kilometers and could, therefore, strike targets in most NATO nations (although not in the United States or Canada) from bases inside the Soviet Union. NATO had no similar capability; it could not strike Moscow or other key Soviet cities with missiles or aircraft based in Western Europe. If the NATO allies or the Soviet Union believed that the United States would not attack the Soviet Union out of fear of a Soviet attack on the United States, then these missiles, and the threat they posed to all of Europe, might be sufficient to induce capitulation, or at least cooperation, from NATO's European allies."], "subsections": []}]}, {"section_title": "The Dual-Track Decision of 1979", "paragraphs": ["In December 1979, NATO responded to this gap in intermediate-range forces, and concerns about its effect on alliance security, by adopting a \"dual-track\" decision that sought to link the modernization of U.S. nuclear weapons in Europe with an effort to spur the Soviets to negotiate reductions in INF systems. In the first track, the United States and its NATO partners agreed to replace aging medium-range Pershing I ballistic missiles with a more accurate and longer-range Pershing II (P-II) while adding new ground-launched cruise missiles. They agreed to deploy 108 Pershing II ballistic missiles and 464 ground-launched cruise missiles, all with single nuclear warheads, between 1983 and 1986. The new weapons would be owned and controlled by the United States, but they would be deployed on the territories of five European allies. West Germany would house deployments of both Pershing II ballistic missiles and cruise missiles, while the United Kingdom, Italy, the Netherlands, and Belgium would each house deployments of cruise missiles. ", "The deployment decision was linked, technically and politically, to a second track where NATO agreed that the United States should attempt to negotiate limits with the Soviet Union on intermediate-range nuclear systems. While most of the allies agreed that NATO's security would be best served by eliminating the Soviet Union's ability to target all of Europe with SS-20 missiles, they recognized that the Soviet Union was unlikely to negotiate away those missiles unless it faced a similar threat from intermediate-range systems based in Western Europe. Few expected the Soviet Union to agree to the complete elimination of its SS-20 missiles, but all agreed that the negotiations were necessary, not just as a means to limit the Soviet threat, but also as a means to appeal to public opinion in Europe, where opposition to the new nuclear weapons was strong."], "subsections": [{"section_title": "The Deployment Track", "paragraphs": ["Although NATO adopted the dual-track decision by consensus, with all members of the alliance offering public support for both the deployment and negotiating plans, the governments of each of the five designated host nations still had to approve the deployments. Several had reservations and attached conditions to that approval. For example, West Germany did not want the Soviet Union to be able to single it out as the target for its political campaign against the new systems. Therefore, its leaders required that the NATO decision be unanimous and that at least one other nation on the European continent accept stationing of new nuclear systems. ", "The planned deployments spurred massive public protests across Europe and the United States. These began in 1980, shortly after NATO reached the dual-track decision, and escalated through the first half of the decade. For example, in late 1981, protests occurred in Italy, Germany, Great Britain, and Belgium. Nearly 1 million people marched in Central Park in New York City in June 1982. Additional protests took place across the United States during October 1983. In addition, in October 1983, nearly 3 million people protested across Europe, with nearly 1 million marching in the Netherlands and around 400,000 marching in Great Britain. In one of the more well-known efforts, a Welsh group known as \"Women for Life on Earth\" established a peace camp at Greenham Common, the base where the United Kingdom would house 96 cruise missiles. The women camped outside the base for years, protesting the eventual deployment of the missiles.", "The governments in some of the nations that had accepted deployment of the missiles also faced political opposition to the weapons. In the Netherlands, the center-right coalition government supported the deployments but recognized that the weapons could become an issue in the 1986 elections, as the opposition Labor Party had threatened to block the deployment if it won. As a result, the government sought to link the deployments to progress in U.S.-Soviet negotiations on both strategic and theater nuclear weapons. In a compromise approved by Dutch parliament in 1984, the government delayed their deployment from 1986 until 1988, specifying that deployment could occur only if the Soviet Union increased the number of SS-20s above the number already deployed on June 1, 1984. The government in Belgium supported the deployments but also faced firm opposition from the Belgian Socialist Party. As a result, the government also supported efforts to move the arms control track forward, even though it did not link the deployment of cruise missiles on its territory to the completion of a treaty.", "In spite of the opposition, and after extensive debate, each of the five nations agreed to deploy the new missiles. When the deployments began in late 1983, the Soviet Union suspended the arms control negotiations and did not return to the negotiating table until March 1995."], "subsections": []}, {"section_title": "The Arms Control Track", "paragraphs": ["The United States and Soviet Union opened their first negotiating session in the fall of 1980, at the end of the Carter Administration. The United States did not present the Soviet Union with a specific proposal for limits or reductions on intermediate-range missiles; instead, it outlined a set of guidelines for the negotiations. Specifically, the United States sought an agreement that would impose equal limits on both sides' intermediate-range missiles\u2014the SS-4, SS-5, and SS-20 missiles for the Soviet Union and the Pershing II and ground-launched cruise missiles for the United States. The Soviet Union, in its proposal, suggested that the two sides simply freeze the numbers of medium-range systems in Europe. This meant that it would stop deploying, but would not reduce, its SS-20 missiles in exchange for the cancellation of all Pershing II and GLCM deployments. Neither proposal was acceptable to the other side. ", "The Reagan Administration, which took office in January 1981, spent most of its first year evaluating and reconsidering the U.S. approach to arms control with the Soviet Union. In November 1981, President Reagan announced that the United States would seek the total elimination of Soviet SS-20, SS-4, and SS-5 missiles in return for the cancellation of NATO's deployment plans\u2014a concept known as the \"zero-option.\" The ban would be global, applying to Soviet missiles in both Europe and Asia. The Soviet Union, for its part, proposed that the two sides agree to a phased reduction of all medium-range nuclear weapons (which it defined as those with a range of 1,000 kilometers) deployed on the territory of Europe, in waters adjacent to Europe, or intended for use in Europe. This proposal would have not only avoided limits on Soviet missiles in Asia, it also would have captured some U.S. dual-capable aircraft based in Europe and U.S. sea-launched cruise missiles. Subsequently, in March 1982, the Soviet Union offered to freeze its deployments of SS-20 missiles unilaterally, and to maintain the moratorium until the two sides reached an agreement or the United States began to deploy the Pershing IIs and GLCMs.", "Although the two sides discussed possible compromise positions during 1982 and 1983, they made little progress. When the United States began to deploy its INF systems in Europe in late 1983, the Soviet Union withdrew from the negotiations.", "The negotiations resumed in March 1985 and began to gain traction in 1986. At the Reykjavik summit, in October 1986, Soviet President Gorbachev proposed that all intermediate-range missiles\u2014the SS-20s, GLCMs, and Pershing IIs\u2014be removed from Europe within five years of signing a treaty. He also indicated that the Soviet Union would reduce its SS-20s in Asia to 33 missiles, which would carry 99 warheads. In return, the United States could store a mix of 100 GLCMs and Pershing IIs within the United States, but it could not deploy them within range of the Soviet Union. Further, in April 1987, President Gorbachev indicated that the Soviet Union was prepared to eliminate all of its shorter-range missiles (those with ranges between 300 and 600 miles) in Europe and Asia as a part of an INF agreement. Then, in June, he proposed a global ban on shorter-range and longer-range INF systems, essentially accepting the U.S. zero-option proposal from 1982.", "The United States and the Soviet Union signed the Treaty on Intermediate Range Nuclear Forces (INF) on December 8, 1987. They exchanged the instruments of ratification, and the treaty entered into force June 1, 1988. The two nations had to eliminate their INF systems within three years of the treaty's entry into force, but the treaty, and its ban on the deployment of intermediate-range land-based ballistic missiles and cruise missiles, is of unlimited duration."], "subsections": []}]}]}, {"section_title": "The INF Treaty", "paragraphs": ["The INF Treaty contained several features that were new to the U.S.-Soviet arms control process. Although it was not the first treaty to ban an entire category of weapons (a treaty signed in 1975 had banned biological weapons and earlier treaties had banned the emplacement of nuclear weapons on a seabed or stationing them on celestial bodies), it was the first to ban a category that each nation had already deployed and considered vital for its national security needs. Moreover, where prior treaties imposed equal burdens on each side, the INF Treaty called for asymmetrical reductions. The Soviet Union destroyed 1,846 missiles, including 654 SS-20s, whereas the United States destroyed 846 missiles. Moreover, each of the Soviet SS-20 missiles carried three warheads, while all the U.S. missiles carried only a single warhead.", "The INF Treaty was also the first U.S.-Soviet treaty to employ intrusive monitoring mechanisms in its verification regime. Under prior treaties, the United States and Soviet Union had relied almost exclusively on their own satellites and remote sensing capabilities\u2014known as national technical means (NTM) of verification\u2014to monitor forces and verify compliance with the treaty. These systems served as the foundation of the monitoring regime under INF, but the treaty also permitted on-site inspections of selected missile assembly facilities and all storage centers, deployment zones, and repair, test, and elimination facilities. Although it did not permit the parties to conduct inspections at any location within the other's territory, it did allow up to 20 short-notice inspections at sites designated in the treaty. The two sides also agreed to participate in an extensive data exchange, which allowed them to account for all systems covered by the agreement. Further, it allowed each side to operate a continuous portal monitoring system outside one assembly facility in the other country, to confirm the absence of new INF missile production. These inspections continued for 10 years after the eliminations were complete, ending in May\u00a02001.", "The INF Treaty also established the Special Verification Commission (SVC) \"to promote the objectives and implementation of the provisions of this Treaty.\" The United States and Soviet Union agreed that, if either party requested, they would meet in the SVC to \"resolve questions relating to compliance\" with their treaty obligations and to agree on any new measures needed \"to improve the viability and effectiveness\" of the treaty."], "subsections": [{"section_title": "Central Limits", "paragraphs": ["Under the INF Treaty, the United States and Soviet Union agreed to destroy all intermediate-range and shorter-range ground-launched ballistic missiles and ground-launched cruise missiles. These are missiles with a range between 500 and 5,500 kilometers (300 and 3,400 miles). The launchers associated with the controlled missiles were also to be destroyed, although the warheads and guidance systems of the missiles did not have to be destroyed. They could be used or reconfigured for other systems not controlled by the treaty. Further, the treaty stated that neither party could produce or flight-test any new ground-launched intermediate-range missiles or produce any stages of such missiles or any launchers of such missiles in the future.", "Article III of the INF Treaty listed the U.S. and Soviet intermediate-range and shorter-range missiles that existed at the time of treaty signing. For the Soviet Union, this list included the SS-20 intermediate-range missile, and the SS-4 and the SS-5 shorter-range missiles. The Soviet Union also agreed to destroy a range of older nuclear missiles, as well as the mobile, short-range SS-23, a system developed and deployed in the early 1980s. For the United States, the list of banned missiles included the new Pershing II ballistic missiles and ground-launched cruise missiles, along with several hundred older Pershing I missiles that were in storage in Europe.", "The INF Treaty made it clear that each of these types of missiles and their launchers would count as INF missiles and launchers, even if they were altered to fly to different ranges or perform different missions. For example, the treaty stated that if a type of ground-launched ballistic missile or ground-launched cruise missile \"is an intermediate-range missile\" then all missiles of that type \"shall be considered to be intermediate-range missiles.\" The INF Treaty also stated that, \"if a ballistic missile or a cruise missile has been flight-tested or deployed for weapon delivery, all missiles of that type shall be considered to be weapon-delivery vehicles.\" Further, it stated that \"if a launcher has been tested for launching\" a treaty-defined intermediate-range ground-launched ballistic or cruise missile, then \"all launchers of that type shall be considered to have been tested for launching\" missiles banned by the treaty. In other words, even if a nation sought to use a type of launcher for a different purpose or to launch a different type of missile, it would count as a treaty-limited launcher as long as even one launcher of that type had been tested or deployed with an INF-range missile.", "The INF Treaty's ban on intermediate-range ballistic and cruise missiles applied only to land-based missiles. The treaty did not ban the possession, testing, or production of sea-based or air-delivered intermediate-range ballistic or cruise missiles, even if they had a range of between 500 and 5,500 kilometers. Moreover, it permitted the parties to test sea-based or air-delivered weapons at land-based test ranges, as long as they were \"test-launched at a test site from a fixed land-based launcher which is used solely for test purposes\" and that is distinguishable from an operational launcher of ground-launched ballistic or cruise missiles. Testing such weapons at other locations, or from operational ground-based launchers, would constitute a violation of the treaty.", "Because the INF Treaty defined treaty-limited ballistic missiles and cruise missiles as \"weapons delivery vehicles,\" rockets that were not designed or tested as weapons-delivery vehicles were not banned by the treaty, even if they were based on land and could fly to ranges between 500 and 5,500 kilometers. The INF Treaty also did not ban the possession or testing and production of missile defense interceptors, even if they flew to ranges between 500 and 5,500 kilometers. Specifically, Article VII stated that ground-launched ballistic missiles \"of a type developed and tested solely to intercept and counter objects not located on the surface of the earth, it shall not be considered to be a missile to which the limitations of this Treaty apply.\""], "subsections": []}, {"section_title": "Determining Missile Range", "paragraphs": ["Article III of the INF Treaty lists the intermediate-range ballistic and cruise missiles in existence at the time the treaty was signed; these missiles were banned by the treaty and would remain banned, regardless of the range flown in tests conducted prior to, or possibly after, the signing of the treaty. Article VII describes how the parties will measure the range of new types of missiles to determine whether these missiles are covered by the limits in the treaty. "], "subsections": [{"section_title": "Cruise Missiles", "paragraphs": ["Article VII states that the range of a ground-launched cruise missile is \"the maximum distance which can be covered by the missile in its standard design mode flying until fuel exhaustion, determined by projecting its flight path onto the earth's sphere from the point of launch to the point of impact.\" Like airplanes, cruise missiles do not necessarily fly on a predictable trajectory\u2014they can change direction in flight and can fly to less than their maximum distance. Moreover, the maximum range to fuel exhaustion can depend on the altitude and path of the flight. As a result, flight tests using the same type of missile can demonstrate significant variations for the range of the missile. Observations from a single flight of the missile would be unlikely to provide enough data to estimate the maximum range. Although the range demonstrated in the flight could provide a baseline, other data, including estimates of the maximum amount of fuel and the weight of the missile, could also affect the calculation. "], "subsections": []}, {"section_title": "Ballistic Missiles", "paragraphs": ["Article VII states that the \"the range capability\" of a new type of ground-launched ballistic missile \"shall be considered to be the maximum range to which it has been tested.\" If the range capability of a new missile, as identified by the maximum range demonstrated during flight tests, falls between 1,000 kilometers and 5,500 kilometers, then the missile is considered to be an intermediate-range missile. If the maximum range is greater than 5,500 kilometers, the missile is considered to be a strategic ballistic missile that will count under the limits in the New Strategic Offensive Arms Control Treaty (New START). ", "Because ballistic missiles fly on a predictable trajectory, it is much easier to measure their range than the range of cruise missiles. However, ballistic missiles can also fly to less than their maximum range if they fly along a depressed trajectory or a lofted trajectory, if they carry a heavier payload, or if they consume only part of their fuel. Nevertheless, the INF Treaty does not ban, or even address, ballistic missile flight tests that fall within the 1,000 kilometer to 5,500 kilometer range if the missile in question demonstrated a maximum range greater than 5,500 kilometers in another flight test. ", "In 1988, when the Senate was debating the ratification of the INF Treaty, members of the Armed Services Committee and Foreign Relations Committee expressed concerns about whether this provided a path for the Soviet Union to circumvent the treaty's ban on INF-range missiles. Some questioned whether the Soviet Union might be able to develop a new missile similar to the INF-range SS-20 and test it to a range greater than 5,500 kilometers, before testing it to INF ranges. Officials representing the Reagan Administration acknowledged that both these scenarios were possible and that neither was prohibited by the INF Treaty. In testimony before the Senate Armed Services Committee, Ambassador Maynard Glitman, the lead negotiator for the INF Treaty, stated that a missile tested even once to a range greater than 5,500 kilometers would be considered to be a strategic ground-launched ballistic missile and would not be covered by the INF Treaty, even if it flew to less than 5,500 kilometers in numerous subsequent tests. ", "The State Department amended this answer in a letter to the Foreign Relations Committee after the hearings; it stated that the missile could be considered a new type of missile covered by the INF Treaty if it was tested at strategic range \"with a configuration (booster stages, post-boost vehicle, RV's) that is unlike that used for remaining tests of the system at INF ranges.\" In other words, if the Soviet Union had tested a missile with only a single warhead, which would have allowed it to fly to a longer range, but then tested it at a reduced range with more warheads, it could be considered to be an intermediate-range missile in the multiple warhead configuration. The letter did not indicate, however, whether the Soviet Union agreed with this interpretation. Moreover, the letter reiterated that a ground-launched ballistic missile tested to ICBM ranges and then tested to INF ranges in the same configuration clearly would not be limited by the treaty.", "Others questioned whether the Soviet Union would be able to use longer-range strategic land-based and sea-based ballistic missiles to attack targets in Europe after it eliminated its INF systems. Secretary of Defense Frank Carlucci responded to these concerns in his testimony before the Senate Foreign Relations Committee. He agreed when Senator Sarbanes asked if \"the Soviets could use other weapons to hit Europe\" after they eliminated their INF missiles. He replied that \"they could, with some disruption to their programming, retarget their strategic systems on Europe.\" He also indicated that the United States could do the same thing because there was \"nothing in the treaty that prevents retargeting.\" Former Secretary of State Henry Kissinger made a similar point in his testimony, noting that Soviet \"ICBMs, SLBMs, and airplanes can carry out the missions assigned to the SS-20s.\" "], "subsections": []}]}]}, {"section_title": "U.S. Concerns with Russian Compliance", "paragraphs": ["The United States officially charged Russia with violating the INF Treaty in late July 2014, when the State Department released the 2014 edition of its report Adherence to and Compliance with Arms Control, Nonproliferation, and Disarmament Agreements and Commitments (the Compliance Report). At the same time, President Obama sent a letter to President Putin notifying him of the finding in the Compliance Report and suggesting that the two countries meet to discuss steps that Russia could take to come back into compliance with the treaty. According to press reports, Administration officials had first raised U.S. concerns with Russia during discussions held in May 2013, and had addressed the issue in subsequent meetings. The two sides met again, in September 2014, after the release of the Compliance Report. The State Department reported that the two sides had a \"useful exchange of views\" during that meeting, but that Russia had failed to \"assuage\" U.S. concerns. Russia, for its part, complained that the United States did not offer any details to back up its accusations and, as it had in previous meetings, denied that it had violated the INF Treaty.", "The Obama Administration repeated its accusation of Russian noncompliance in the 2015 edition of the State Department Compliance Report. This report added a little detail to the 2014 version, noting the \"United States determined the cruise missile developed by the Russian Federation meets the INF Treaty definition of a ground-launched cruise missile with a range capability of 500 km to 5,500 km, and as such, all missiles of that type, and all launchers of the type used to launch such a missile, are prohibited under the provisions of the INF Treaty.\" While Administration officials continue to withhold details about either the missile or the data used to determine that it is a violation, they have said specifically that the United States is \"talking about a missile that has been flight-tested as a ground-launched cruise-missile system to these ranges that are banned under this treaty.\" ", "The Administration repeated its accusation of testing of a ground-launched cruise missile in the 2016 and 2017 versions of the State Department Compliance Report. Both reports, again, declined to provide details about the offending missile. However, the 2017 report, in response to Russian assertions that the United States lacked proof of such a violation, states that the United States has provided \"more than enough information for the Russian side to identify the missile in question.\" This includes \"information pertaining to the missile and the launcher, including Russia's internal designator for the mobile launcher chassis and the names of the companies involved in developing and producing the missile and launcher and; information on the violating GLCM's test history, including coordinates of the tests and Russia's attempts to obfuscate the nature of the program.\" The United States has also provided Russia with information showing that the \"violating GLCM has a range capability between 500 and 5,500 kilometers\" and that, contrary to much public speculation, it is \"distinct from the R-500/SSC-7 GLCM or the RS-26 ICBM.\"", "In October 2016, press reports for October 2016 indicated that the Obama Administration believed Russia was moving toward deployment of the new missile, because it had begun to produce the missile in numbers greater than what is needed for a test program. This was followed, in February 2017, by reports in the New York Times stating that Russia had begun to deploy a new ground-launched cruise missile, in violation of the 1987 Intermediate Range Nuclear Forces Treaty. General Paul Selva, the vice chairman of the Joint Chiefs of Staff, confirmed this deployment during testimony before the House Armed Services Committee on March 8, 2017. General Selva noted that Russia had violated the \"spirit and intent\" of the treaty, that it had deliberately deployed the missile to pose a threat to NATO facilities, and that it showed no inclination to return to compliance with the treaty."], "subsections": [{"section_title": "Cruise Missile", "paragraphs": ["As noted above, the 2014 Compliance Report determined that Russia is in \"violation of its obligation not to possess, produce, or flight-test a ground-launched cruise missile (GLCM) with a range capability of 500 km to 5,500 km, or to possess or produce launchers of such missiles.\" The State Department repeated this finding in the 2015 and 2016 Compliance Reports. The reports did not provide any details about the missile or cite the evidence that the United States used to make its determination. However, according to press reports, the intelligence community has \"high confidence\" in its assessment that the cruise missile and flight tests in question constitute a \"serious violation.\"", "Press reports have noted that the missile tests, which took place at the Kapustin Yar test site in western Russia, began in 2008, during the George W. Bush Administration. The Obama Administration concluded that the tests constituted a violation of the INF Treaty and mentioned its concerns to Congress during briefings in late 2011. According to press reports, the Administration briefed U.S. allies in NATO about its concerns at a meeting of NATO's Arms Control, Disarmament and Non-Proliferation Committee in January 2014. The reports also states that the Administration does not believe that Russia has deployed the missile yet.", "Some in Congress have questioned why, if the tests began in 2008, the United States waited until 2011 to inform Congress, until 2013 to raise the issue with Russia, and until 2014 to inform U.S. allies of its concerns. They speculate that the Obama Administration may have hoped to conceal the issue so that it would not undermine its arms control agenda with Russia. For example, in February 2014, Senators Wicker and Ayotte asked whether the Administration delayed notifying Congress so that the issue would not interfere with the Senate debate on the ratification of the New START Treaty.", "On the other hand, it is possible that the Obama Administration held off on mentioning its concerns to Congress and U.S. allies until it had more information about the potential violation and more time to analyze that information. According to press reports, \"it took years for American intelligence to gather information on Russia's new missile system.\" Therefore, it seems likely that the United States could not make its determination, with high confidence, using data gathered during only one, or even a few, test launches.", "Under Secretary of State Rose Goetemoeller underscored this dynamic in testimony before the House Armed Services Committee in late 2015. She noted that the United States knew that Russia had begun to test a cruise missile in 2008, but that \"it was only over time did we accumulate the information that it was a ground launch cruise missile.\" The United States did not immediately assume Russia was testing a prohibited missile because \"under the INF Treaty, sea launched cruise missiles and air launch cruise missiles are permitted, and there is no reason why the Russians could not have been developing during that period a new sea launched or air launched cruise missile.\" She repeated that \"we didn't\u2014simply did not know until later in the test series that it was a ground launch system.\" Daniel Coats, the Director of National Intelligence, confirmed this scenario in his statement to the press on November 30, 2018. He noted that Russia had conducted two types of tests\u2014one to a range of greater than 500 kilometers from a static launcher and one to a shorter range from a mobile launcher. The United States has concluded that the same missile was involved in both types of tests.", "Experts outside government sought to determine which Russian missile constitutes the INF violation. Initial analyses focused on the Iskander system, a Russian missile launcher that can fire both ballistic missiles and cruise missiles. The ballistic missiles for the system have been tested to a maximum range of less than 500 kilometers and, therefore, do not raise treaty compliance issues. The R-500 cruise missile, which is also launched from an Iskander launcher, has been tested to a range of 360 kilometers but, according to some analyses, could have a maximum range \"several times longer.\" Contrary to much of the speculation, however, Obama Administration officials stated that the R-500 cruise missile was not the missile in question. In addition, the 2017 version of the State Department Compliance Report indicated that the United States had provided Russia with information that demonstrates that the noncompliant cruise missile is distinct from the R-500 system.", "Some have also suggested that the violation may have occurred if Russia tested an intermediate-range sea-launched cruise missile (SLCM), such as the SS-N-21 SLCM, from a land-based launcher. The INF Treaty allows land-based tests of SLCMs, as long as they are launched from a \"fixed land-based launcher which is used solely for test purposes and which is distinguishable from GLCM launchers.\" If Russia had launched a SLCM with a range greater than 500 kilometers from any other type of launcher, the test would constitute a violation of the treaty. Members of Congress raised this possibility during a joint hearing of the House Foreign Affairs Subcommittee on Europe, Eurasia and Emerging Threats and Subcommittee on Terrorism, Nonproliferation, and Trade in April 2014. For example, Representative Brad Sherman said that Russia may have tested a missile for \"sea-based purposes\" on \"what appears to be an operational, useable ground-based launcher.\" Press reports from Russia have also speculated about this. An October 2014 article mentioned that Russia had conducted a 2,600-kilometer test of a cruise missile in 2013, and quoted a source in Russia's Defense Ministry as saying the missile was a \"naval cruise missile\" tested from a \"ground-based platform\" rather than a ship to save money and simplify the collection of data on the test. This explanation resurfaced in early October 2015, after Russia used its new Kalibr-NK sea-launched cruise missiles in its attacks against targets in Syria. These cruise missiles, which were launched from ships deployed in the Caspian Sea, traveled to ranges of more than 1,500 km, which clearly exceeds the range permitted by the INF Treaty. So, according to one analyst, \"if this missile was ever test-launched from a mobile land-based launcher, it would be considered GLCM for the purposes of the INF Treaty and this test would be a treaty violation.\"", "This explanation, was also imperfect. It presumed that the violation occurred during a single test, while the timeline discussed above indicated that the United States collected data across several tests. Moreover, there is no evidence in the public press that Russian officials have offered this type of explanation in the several meetings where the United States has raised its concerns. In addition, U.S. officials have repeatedly referred to the violation as a test of a ground-launched cruise missile, lending less credence to the view that the United States might have misidentified tests of a sea-launched missile. Moreover, Rose Goetmeoller stated, specifically, in an article published in September 2015, that this is not a technical violation, as is assumed by the theory that the missile is a SLCM tested from a GLCM launcher.", "Beginning in 2015, press reports identified another possible candidate for the suspect missile. An article published in late September 2015 noted that Russia had conducted another test of its new GLCM in on September 2. According to this article, the missile, which it identified as the SSC-X-8 cruise missile, did not fly to a range beyond the INF limit. However, it cited officials familiar with the test who claimed that the missile had an \"assessed range\" of \"between 300 miles and 3,400 miles,\" giving it the capability to fly to ranges in excess of those allowed under the INF Treaty. The article also claimed that \"an earlier flight test of the missile prompted the administration, backed by U.S. intelligence agencies, to declare the system a breach of the INF treaty.\" ", "The Obama Administration did not comment on the allegations in 2015, but press reports from February 2017 have identified the SSC-X-8 cruise missile as the system that Russia deployed in December 2016; the designation is now the SSC-8, with the X dropped because the missile is no longer experimental. In late November 2017, the Trump Administration identified the Russian designator for the missile as the 9M729. Little is known about the missile's specific characteristics or the observed tests that led the United States to conclude the missile violated the INF Treaty, although some speculate that it may be a ground-based version of the Kalibr sea-launched cruise missile."], "subsections": []}, {"section_title": "Ballistic Missile", "paragraphs": ["Some analysts outside government also contend that Russia has violated the INF Treaty with the development of a new land-based ballistic missile, known as the RS-26, because Russia has tested this missile to ranges below 5,500 kilometers. Other analysts dispute this conclusion, noting that Russia has also tested the missile to more than 5,500 kilometers, which would place it outside INF range and characterize it as a long-range, intercontinental ballistic missile (ICBM). The Obama Administration did not mention this missile in the 2014 Compliance Report, possibly indicating that it either does not consider the missile to be an INF violation or does not have sufficient information to draw a conclusion. The Trump Administration, in the 2018 Compliance Report, specifically noted that the Russian GLCM tested in violation of the INF Treaty \"is distinct from the ... RS-26 ICBM.\" Nevertheless, this missile remains in issue in discussions about the INF Treaty.", "According to unclassified reports, Russia conducted four flight tests of the RS-26 missile. Two of these flight tests\u2014one that failed in September 2011 and one that succeeded in May 2012\u2014flew from Plesetsk to Kura, a distance of approximately 5,800 kilometers (3,600 miles). The second two tests\u2014in October 2012 and June 2013\u2014were both successful. In both cases the missile flew from Kapustin Yar to Sary-Shagan, a distance of 2,050 kilometers (1,270 miles). Reports indicate that all four tests were conducted with \"solid-propellant missiles launched from a mobile launcher.\" The missiles in the first three tests reportedly carried a single warhead, while the last test carried a \"new combat payload\" that may have consisted of multiple warheads.", "Russian officials have claimed that the RS-26 missile is an ICBM. At the time of the first test, in September 2011, an official Russian statement indicated that the failed missile was a part of a development program for a new \"fifth generation ICBM.\" Russian officials continued to refer to the new missile as an ICBM after the two tests from Kapustin Yar to Sary-Shagan. According to General-Colonel Zarudnitskiy, the head of the Main Operational Directorate of Russia's General Staff, all four launches were part of the series of tests with \"a new intercontinental-range ballistic missile with improved accuracy.\"", "Although Russian statements describing the RS-26 as a long-range ICBM cannot serve as definitive proof of the missile's intended range and targets, the existence of a test to more than 5,500 kilometers does seem to place it outside the range of missiles banned by the INF Treaty. Nevertheless, several observers have concluded that, even if it is not a technical violation, the missile's intermediate-range tests could still provide evidence of Russia's intent to circumvent the treaty limits by deploying a new missile optimized for attacks on targets in the INF-range. Ultimately, the question of whether the missile should raise compliance concerns, and, more specifically, whether it represents an actual violation of the INF Treaty, may rest on a more detailed, and possibly classified, analysis of the nature of the missile's payload and the rationale for the shorter-range tests. ", "For example, several analysts have speculated that Russia tested the RS-26 on flights from Kapustin Yar to Sary-Shagan because the missile may have carried a payload that would help it evade ballistic missile defenses. Russia's Deputy Prime Minister, Dmitry Rogozin, reportedly called the missile a \"killer of air defense\" after the June 2013 test flight. Several press reports also indicated that it was designed to be able to evade and penetrate ballistic missile defense systems. For example, in May 2012, an official from Russia's missile industry stated that the missile uses \"a new fuel making it possible to reduce the time of the missile engines' operation during the boost phase. This makes such a missile more capable of overpowering a missile defense system.\" Sary-Shagan serves as the test site for Russia's ballistic missile defense radars, so if Russia wanted to determine whether these radars could identify and track the new missile, it would need to fire the missile toward Sary-Shagan. Russia has also launched its older SS-25 ICBMs from Kapustin Yar to Sary-Shagan in recent years, according to the Russian Ministry of Defense, to gather information that could be used to develop \"effective means for overcoming missile defense.\" ", "If this rationale is consistent with data evident during the missile's flight test, then it might not be considered a violation of the INF Treaty. However, other explanations for the shorter-range tests are possible. As noted above, all long-range missiles can fly to targets at less than their maximum range. If a missile were initially tested with a single, light warhead, but then flew with a heavier payload, or with a greater number of warheads, or if it were flown on a flatter, depressed trajectory or higher, lofted trajectory, it would fly to a shorter range. Some have speculated that the RS-26 may have flown with a single warhead in its initial tests then carried multiple warheads in later tests. Russian press reports indicated that this was a possibility. For example, after the May 2012 test, the Russian press reported that the missile was \"a further development on the Topol-M and Yars strategic missiles and is supposed to be armed with a multiple independently targetable reentry vehicle warhead.\" The Topol-M is a single warhead missile, while the Yars is a variation of the Topol that carries multiple warheads. But both fly to much longer ranges than the 5,800 kilometers demonstrated by the RS-26 in its second flight test. As a result, it is possible that the payload for the RS-26, particularly during its shorter-range tests, contained a substantially different payload than the missile tested to the longer range. ", "If a change in the payload is evident in the data generated during the flight tests, then it may yet be determined to be a violation. Moreover, even if the missile does not violate the terms of the INF Treaty, it could allow Russia to circumvent the limits in the agreement. The United States has not, at this time, concluded that this ballistic missile violates the INF Treaty. In addition, the 2017 and 2018 Compliance Reports indicate that the noncompliant cruise missile at issue in the U.S. allegations is not the RS-26 ICBM."], "subsections": []}, {"section_title": "Russian Interests in Intermediate-Range Missiles", "paragraphs": ["Many analysts agree that Russia has been uncomfortable with the limits in the INF Treaty for nearly a decade. Some speculate that the Russian military has been interested in replacing its lost capabilities since shortly after the treaty was signed so that it could maintain a full complement of missile capabilities, regardless of the threat environment. According to some analysts, Russia has been pursuing a number of programs, including some focused on long-range cruise missiles that seem to seem to \"pay no attention to the treaty limits.\" ", "Others highlight comments from Russian officials that point to emerging threats to Russian security from countries along Russia's periphery that possess their own intermediate-range missiles. Former Secretary of Defense Robert Gates notes in his recent memoir that Sergei Ivanov, a former Russian Minister of Defense, raised this issue with him in 2007. Ivanov, and others in subsequent comments, have noted that the United States and Russia are the only two countries in the world that cannot deploy intermediate-range missiles. Ivanov told Gates that Russia wanted to withdraw from the treaty so that it could deploy these missiles \"to counter Iran, Pakistan, and China.\" Others have echoed this concern in recent years. Anatoly Antonov, Russia's current Deputy Minister of Defense, said in an interview in August 2014, \"Nowadays almost 30 countries have such [intermediate-range] missiles in their arsenals. The majority of them are in close proximity to Russia.\" Others have been more specific, noting that countries from around the periphery of Russia, including North Korea, China, India, and Pakistan, all possess intermediate-range missiles. ", "In 2007, Russia sought to address this concern by submitting a proposal to the United Nations that would convert the INF Treaty into a multilateral treaty that could be signed by all states with intermediate-range and shorter-range missiles. The United States issued a joint statement with Russia supporting this effort. But the proposal did not win any further adherents. Russia may have then focused its attention on the development of its own INF missiles. Recent reports that Russia will deploy the RS-26 missile at Irkutsk, which places it out of range of Europe but within range of China and other nations to its south and east, support the view that Russia may be developing INF-range missiles to address threats outside of Europe.", "Russian officials have also pointed to threats from NATO as the source of Russia's interest in escaping from the limits of the INF Treaty. Often, these threats have been linked to U.S. and NATO plans to deploy missile defense assets in Europe. For example, in 2007, when the Bush Administration was pursuing plans to deploy missile defense interceptors in Poland and radar in the Czech Republic, President Putin threatened to withdraw from the INF Treaty so that he could deploy missiles with the range needed to attack these sites. Although the Obama Administration cancelled the Bush Administration's planned deployments, it still plans to deploy missile defense interceptors in Poland and Romania as a part of its missile defense architecture known as the European Phased Adaptive Approach (EPAA). The United States insists that these interceptors will pose no threat to Russia's strategic nuclear forces, but Russia has continued to threaten to deploy intermediate-range missiles to target these sites. Missiles in the range of 700-1,000 kilometers would be able to reach deployment sites in Poland and Romania, particularly if Russia moved launchers into its newly annexed Crimean territory.", "The United States has completed the installation of the Aegis Ashore site in Romania; it was certified as operational in May 2016. Russia continues to argue that this site can threaten Russian strategic forces and to insist that the launchers violate the INF Treaty because they could launch offensive cruise missiles. While it has not made a direct connection recently, it is possible that Russia may have used the operational status of the Aegis Ashore site as an excuse to prepare for the deployment of its treaty-noncompliant cruise missile.", "Russia may also view new intermediate-range missiles as a response to challenges it faces from NATO's advanced conventional capabilities, especially as NATO has enlarged eastward into nations close to Russia's western border. Russian defense and security documents have not only emphasized that Russia views NATO enlargement as a key threat to its security, they have also highlighted the need for Russia to be able to deter NATO's use of precision conventional weapons, such as the U.S. Navy's Tomahawk sea-launched cruise missiles. Russia already has a wide range of conventional and nuclear capabilities that can threaten U.S. allies in NATO. For example, its shorter-range systems, like the Iskander missiles, which can carry either conventional or nuclear warheads, can reach into Poland and the Baltic states, particularly if they are deployed in Belarus or Kaliningrad. But they cannot reach across Eastern Europe, particularly if they are deployed further east in Russia. As a result, Russia may believe that land-based intermediate-range cruise missiles could fill a gap in Russia's conventional capabilities. Missiles at the lower end of INF range could reach into eastern NATO allies, covering areas that some have noted could serve as staging grounds for NATO strikes against Russia. Systems in the 2,000 kilometer range could reach Germany, and those of 3,000 kilometer range could reach most other NATO states. As Yuriy Baluyevskiy, the former head of the Russian General Staff, said in a September 2014 interview, INF-range missiles would allow Russia \"to erect a system of national security assurance\" with missiles that could target cities in Poland, Romania, and the Baltic and, as a result, \"cool the heads of these states' leaders.\"", "Some have suggested that Russia might use intermediate-range ballistic missiles to threaten NATO capitals at a greater distance from Russia, in part, to threaten the cohesion of the alliance. Although these capitals are still within range of Russian bombers and longer-range missiles, the nuclear threat to these cities eased considerably after the Soviet Union eliminated its SS-20 missiles. With these missiles eliminated, there was little risk the capitals would face nuclear retaliation if they invoked their Article V commitment to defend the allies closer to Russia. But, with a new threat to these more distant allies, some may question the strength of that commitment. In such a circumstance, the allies located closer to Russia might be more inclined to give in to coercion or intimidation from Russia. Although NATO can take steps to offset this impression and strengthen alliance cohesion, Russia's new intermediate-range missiles could introduce a dynamic similar to the one NATO faced during the Cold War, when some questioned whether the United States would come to the defense of its European allies, knowing that its own territory could be threatened by Soviet long-range missiles. "], "subsections": []}]}, {"section_title": "Russian Concerns with U.S. Compliance", "paragraphs": ["Russian officials claim that three current and planned U.S. military programs violate the INF Treaty. They have raised at least one of these issues in diplomatic exchanges for the past several years, but have become more insistent on addressing these issues in recent months, following the State Department's publication of the 2014 Compliance Report. The three programs identified by Russia include (1) the use of intermediate-range missiles as targets during tests of U.S. missile defense systems; (2) the use of drones as weapons delivery vehicles; and (3) the planned deployment of missile defense interceptors on land in the Navy's MK-41 missile launchers. ", "DOD reviews U.S. weapons programs to ensure that they are consistent with all U.S. arms control, nonproliferation, and disarmament commitments. These reviews have found that none of these programs constitute a violation and that the United States is in full compliance with its INF obligations. The United States addressed Russia's concerns during the meeting on INF compliance in September 2014, providing Russia with treaty-based explanations to demonstrate how the programs are compliant with U.S. obligations under the INF Treaty. However, Russian officials continue to insist that the United States has violated the INF Treaty. "], "subsections": [{"section_title": "Missile Defense Targets", "paragraphs": ["The United States has designed and produced numerous target missiles for use during its tests of missile defense interceptors. Several of these targets use modified engines from existing types of ballistic missiles, including retired Minuteman II long-range missiles. One such missile, known as the Hera, flew to ranges of around 1,000 kilometers.", "Russia claims that target missiles using Minuteman II motors violate the INF Treaty because they \"have similar characteristics to intermediate-range missiles\" and can fly to ranges covered by the INF Treaty. Russian officials have also claimed that the United States may have used guidance components from Pershing missiles in some target missiles. The United States reportedly disputed the Russian assertion in 2001, noting that the Hera missile was a \"booster system\" meant for research, not a weapons delivery system. In December 2014, the Principal Deputy Under Secretary of Defense, Brian McKeon, raised the same point in testimony before subcommittees of the House Foreign Affairs and Armed Services Committees. He noted that the INF Treaty \"explicitly permits the use of older booster stages for research and development purposes, subject to specific Treaty rules. This includes their use as targets for missile defense tests.\" The treaty bans land-based intermediate-range missiles that have been \"flight-tested or deployed for weapons delivery.\" The target missiles have never been equipped with warheads and, therefore, have never been flight tested or deployed for weapons delivery. In addition, the use of guidance systems from an eliminated missile does not violate the INF Treaty, as the text allows the parties to remove guidance sets prior to missile elimination and to reuse them in systems not limited by the treaty. "], "subsections": []}, {"section_title": "Armed Drones", "paragraphs": ["The United States operates several types of unmanned aerial vehicles\u2014drones\u2014to perform intelligence, surveillance, and reconnaissance missions. Some drones have been equipped to carry precision-guided weapons to attack ground targets. While the sizes and ranges of U.S. drones vary greatly, some, including those that can deliver weapons, can fly to ranges between 500 and 5,500 kilometers.", "Russia claims that U.S. armed drones violate the INF Treaty because they are consistent with the treaty's definition of a ground-launched cruise missile. The treaty defines a cruise missile as \"an unmanned, self-propelled vehicle that sustains flight through the use of aerodynamic lift over most of its flight path.\" It further specifies that a ground-launched cruise missile banned by the treaty means \"a ground-launched cruise missile that is a weapon-delivery vehicle.\" ", "While it is true that drones sustain flight through the use of aerodynamic lift, they do not necessarily meet the treaty's definition of unmanned and self-propelled. Although drones do not have pilots on board, they are piloted remotely, with pilots based at facilities on the ground. Moreover, although armed drones can deliver weapons to targets, they are platforms that carry weapons, not weapons themselves. Unlike a cruise missile with a separate launcher that remains behind after releasing the missile, a drone is self-contained, and takes off and lands like an aircraft. Further, although cruise missiles are destroyed when delivering their payload, drones release their payload then return to base, like an aircraft. Principal Deputy Under Secretary of Defense Brian McKeon summed this up during recent congressional testimony when he noted that drones are not missiles, they are \"two-way, reusable systems. The INF Treaty imposes no restrictions on the testing, production, or possession of two-way, reusable, armed UAVs.\""], "subsections": []}, {"section_title": "Land-Based Deployment of MK-41 Launchers", "paragraphs": ["As a part of its European Phased Adaptive Approach (EPAA) for missile defense, the United States plans to deploy ballistic missile interceptors on land in Romania and Poland, in a construct known as Aegis Ashore. The site in Romania became operational in May 2016, as a part of phase 2 of the EPAA, while the site in Poland is scheduled for 2018, as a part of phase 3. According to the Missile Defense Agency, the United States will deploy SM-3 interceptor missiles at these sites in the same type of vertical launch system\u2014the MK-41\u2014used aboard Aegis ships. According to the U.S. Navy, the MK-41 vertical launch system (VLS) is a \"multi-missile, multi-mission launcher\" that can launch SM-2 interceptors and Tomahawk cruise missiles, along with a number of other systems. ", "Russia claims that the MK-41 VLS will \"be a flagrant violation\" of the INF Treaty when it is based on land because it \"can be used to launch intermediate-range cruise missiles.\" This complaint seems to assume that the launchers will meet the treaty's definition of a ground-launched cruise missile (GLCM) launcher because they can launch Tomahawk sea-launched cruise missiles (SLCMs), even though they have never been tested or deployed with GLCMs. Mikhail Ulyanov, the director of the nonproliferation and arms control department of the Russian Foreign Ministry, repeated this concern on October 12, 2015, when he stated that the deployment of the MK-41 launchers in Romania would be \"a massive breach of the INF Treaty.\"", "The INF Treaty defines a GLCM launcher as \"a fixed launcher or a mobile land-based transporter-erector-launcher mechanism for launching a GLCM.\" A GLCM is defined \"as a ground-launched cruise missile that is a weapon-delivery vehicle.\" These definitions are somewhat circular: if a missile has been launched from a ground-based launcher, it is a ground-launched missile, and if a launcher has launched a ground-launched missile, it is a GLCM launcher. One could argue that a sea-based missile, such as the Tomahawk, could be launched from land if its launcher were deployed on land. In that case, the launcher could be considered a ground-based launcher, even if it had never been tested with a ground-launched missile. This seems to be the source of Russia's complaint. However, even if it seems somewhat logical, it is not consistent with the INF Treaty's definition. The treaty specifies that the launcher must launch an intermediate-range GLCM, not any intermediate-range cruise missile, to qualify as a system banned by the treaty.", "Moreover, U.S. officials have asserted that the version of the MK-41 system to be based in Romania and Poland will not be the same as the shipboard version that has been used to launch Tomahawk cruise missiles, even though it will use \"some of the same structural components as the sea-based system.\" According to some reports, the \"electronics and software of the Aegis Ashore Mk-41 launcher are different than the ship-borne variant.\" The Trump Administration reiterated this point in a fact sheet released by the State Department in December 2017. It noted that the Aegis Ashore system \"is only capable of launching defensive interceptor missiles.\" The system uses \"some of the same structural components as the sea-based Mk-41 Vertical Launch System\" but it \"is not the same launcher as the sea-based MK-41 Vertical Launch System.\" The system \"lacks the software, fire control hardware, support equipment, and other infrastructure needed to launch offensive ballistic or cruise missiles such as the Tomahawk.\"", "This distinction would seem to undercut the Russian view that the launcher used in Aegis Ashore \"can be used to launch intermediate-range cruise missiles.\" However, convincing Russia of this difference may be difficult. In past arms control agreements, the parties have mandated that similar systems with different purposes possess functionally related, observable differences. This is not required under the INF Treaty, and it is not clear at this time whether this will be the case for the land-based MK-41 launchers. As a result, even though the treaty definitions may not capture the system unless it actually launches a cruise missile from land, the United States may find it helpful, for political reasons, to take additional steps to address Russia's concerns and convince Russia that the system does not violate the INF Treaty."], "subsections": []}]}, {"section_title": "The U.S. Response", "paragraphs": ["The INF treaty is of unlimited duration, but it contains a withdrawal clause that states that each party shall \"have the right to withdraw from this Treaty if it decides that extraordinary events related to the subject matter of this Treaty have jeopardized its supreme interests.\" Russia could have withdrawn from the INF Treaty to address emerging threats from intermediate-range missiles deployed in China or in other nations on its periphery, or if it believed it needed intermediate-range missiles to address perceived threats from NATO. Yet, Russia has remained a party to the treaty while, according to U.S. allegations, developing new intermediate-range missile capabilities. It is possible that it has done so in the hope of delaying a U.S. response while reserving the option to withdraw later, after completing the development and testing of its new systems. ", "The United States, for its part, has considered a number of options to address its compliance concerns, to encourage Russia to remain a party to the treaty, and to respond to security concerns emerging as a result of Russia's development and deployment of new intermediate-range ballistic or cruise missiles. It has now decided to withdraw from the treaty, both to demonstrate that Russia's violation will not go unanswered and to free itself to pursue the development of new intermediate-range missiles. As a result, Russia may now be able to continue its current course free from the limits in the INF Treaty. "], "subsections": [{"section_title": "Options for Addressing Compliance Concerns", "paragraphs": [], "subsections": [{"section_title": "Engage in Diplomatic Discussions", "paragraphs": ["According to press reports, the United States began to raise concerns about INF compliance with Russia during diplomatic meetings in 2013. Although not specified in the reports, it seems likely that the INF Treaty was only one of several issues discussed in these fora. The press reports note that Russia dismissed the U.S. concerns, stating that Russia had \"investigated the matter and consider[s] the case to be closed.\" U.S. officials stated that Russia's answer \"was not satisfactory to us\" and indicated that it would continue to press the case in future meetings. With Russia unwilling to even acknowledge that it has conducted tests that could raise INF concerns, it seems unlikely that this level of engagement will succeed in resolving the issue.", "The United States raised the profile of the issue in July 2014 when the State Department released the 2014 Compliance Report. According to press reports, President Obama sent a letter to President Putin that \"underscored his interest in a high-level dialogue with Moscow with the aim of preserving the 1987 treaty and discussing steps the Kremlin might take to come back into compliance.\" At the same time, Secretary of State John Kerry called the Russian Foreign Minister, Sergey Lavrov, to emphasize the same point. The two nations then held a meeting on September 11, 2014, focused exclusively on the two nations' concerns with INF compliance. ", "As noted above, the State Department reported that Russia had failed to \"assuage\" U.S. concerns during the September 2014 meeting. The Russian participants denied that Russia had violated the treaty, complained about the lack of evidence provided by the United States, and accused the United States itself of violating the treaty. The State Department indicated, in its 2016 Annual Report on Compliance with Arms Control Agreements, that \"the United States again raised concerns with Russia on repeated occasions\" in 2015 and it will \"continue to pursue resolution of U.S. concerns with Russia\" in the future. But Russia continued to refuse to address the issue and continued to deny that it has violated the treaty. In testimony before the Senate Foreign Relations Committee, Under Secretary of State Rose Gotemoeller stated that it has been \"extraordinarily difficult\" to address this issue \"because the Russians simply have not wanted to engage in a way that would resolve this problem.\" She repeated that the United States is \"committed to bringing them back into compliance with the INF Treaty and essentially recommitting to that treaty for the future.\"", "At the same time, Under Secretary Gotemoeller indicated that the diplomatic engagement had some value. In testimony before the House Armed Services Committee in December 2015, she noted that Russia realizes that its \"program has been exposed\" and that it \"is not free to pursue this effort unconstrained, as this would confirm for the world that Russia has been violating an agreement that has been a key instrument of stability and security for nearly three decades.\" As a result Russia still has not begun to deploy the new missile.", "The Trump Administration initially continued to pursue a diplomatic solution to the INF problem. In the State Department's 2018 Compliance Report, the Administration noted that \"the United States remains open to discussing any and all ways to facilitate the Russian Federation's return to full and verifiable compliance.\" It also highlighted, in a fact sheet released in December 2017, that \"the United States continues to seek a diplomatic resolution through all viable channels.\"", "While Russia continued to deny that it violated the INF Treaty, some hoped the ongoing diplomatic exchanges could help move the process forward by emphasizing the magnitude of the U.S. concerns and opening channels for future discussions that focus exclusively on the INF Treaty. Public discussions of compliance concerns\u2014in the State Department Compliance Report, press reports, and congressional hearings\u2014could reinforce the U.S. position and complicate Russia's efforts to simply dismiss the U.S. accusations.", "With more attention focused on its programs, Russia could decide that it needed to explain why it seemed to be testing INF-range missiles and whether it planned to deploy the cruise missile in question on land or at sea. However, even as Russia began to discuss the status of its missile programs, it did not acknowledge that it had violated the treaty. Instead, it disputed U.S. assertions and denied that it had tested a missile to INF range. On the other hand, because Russia has at acknowledged U.S. concerns and offered its own version of events, there might be some room for further discussions during the 60-day period, announced by Secretary of State Pompeo in early December 2018, before the U.S. formally announces its withdrawal.", "Analysts outside government also suggested that the United States might provide Russia with a greater incentive to acknowledge, address, and possibly resolve this issue by bringing its allies into the discussion so that they could understand the implications of Russia's actions and raise their concerns with Russia directly. This would allow the violation to become \"an issue between the Russian government and its neighbors\" and not just an issue between Russia and the United States. ", "The United States has pursued this process with its NATO allies by providing briefings and holding discussions during NATO meetings. For example, in the statement released after the summit in Wales in September 2014, the allies called on Russia \"to preserve the viability of the INF Treaty through ensuring full and verifiable compliance.\" The United States has taken additional steps to brief its NATO allies on the Russian violation and to encourage the allies to address this issue with Russia. The State Department's 2018 Compliance Report notes that NATO issued a public statement in December 2017 \"affirming U.S. compliance with the Treaty\" and urging Russia to address the serious concerns raised by its missile system \"in a substantial and transparent way, and actively engage in a technical dialogue with the United States.\" ", "The issue has also been on the agenda during meetings of the NATO defense ministers. NATO's Secretary General Jens Stoltenberg highlighted this during his press conference prior to the meeting in October 2018. He stated that the NATO allies \"remain concerned about Russia's lack of respect for its international commitments, including the Intermediate-Range Nuclear Forces Treaty.\" He stated that the INF Treaty is a \"crucial element\" of NATO security and is \"in danger because of Russia's actions.\" He also noted that, although Russia has \"acknowledged the existence of a new missile system, called 9M729,\" it has not \"provided any credible answers on this new missile.\" He concluded by noting that the \"allies agree that the most plausible assessment would be that Russia is in violation of the Treaty.\" ", "This last statement indicated that, in spite of ongoing U.S. efforts to provide the allies with information about Russia's noncompliant missile, the allies' assessment of Russian activities still lacked some of the certainty evident in the U.S. determination that Russia is in violation of the INF Treaty. This difference seemed to disappear after the NATO Foreign Ministers meeting on December 4, 2018, when the Foreign Ministers released a statement accepting the U.S. claim of Russian noncompliance. They noted that the \"allies have concluded that Russia has developed and fielded a missile system, the 9M729, which violates the INF Treaty\" and that they \"strongly support the finding of the United States that Russia is in material breach of its obligations under the INF Treaty.\" At the same time, they noted that the \"allies are firmly committed to the preservation of effective international arms control, disarmament and non-proliferation\" and therefore, \"will continue to uphold, support, and further strengthen arms control, disarmament and non-proliferation, as a key element of Euro-Atlantic security, taking into account the prevailing security environment.\" They also called on Russia \"to return urgently to full and verifiable compliance\" with the INF Treaty.", "The German Foreign Minister, Heiko Maas, reiterated his nation's support for the INF Treaty following a meeting with Russia's Foreign Minister, Sergei Lavrov, in January 2019. He noted that the treaty remained important for Germany's security, but also stated that Germany believes \"that there is a missile violating this treaty and it should be destroyed in a verifiable manner to get back to the implementation of this agreement.\"", "The ongoing consultations among and statements by NATO allies likely signal to Russia that NATO remains united in its concerns about Russia's activities and would likely remain united in its response if Russia attempts to use its new missiles to divide the alliance. On the other hand, this coordinated NATO response could backfire if Russia reacted by claiming that the NATO cohesion on this issue provided further evidence of the threat that NATO poses to Russia and further evidence that Russia needs a full scope of military capabilities in response."], "subsections": []}, {"section_title": "Convene the Special Verification Commission", "paragraphs": ["Article XIII of the INF Treaty established the Special Verification Commission (SVC) as a forum where the parties could meet to discuss and resolve implementation and compliance issues. This body had not met since 2000, but according to the terms of the treaty, the parties agreed that a meeting could occur \"if either Party so requests\"; there is no mandate for consensus or mutual agreement on the need for a meeting. ", "Press reports from October 2016 indicated that United States \"has summoned Moscow to a mandatory meeting\" of the SVC \"to answer accusations that Moscow has violated the INF Treaty.\" This meeting occurred on November 15-16, 2016. The State Department released a statement that noted the meeting had occurred in Geneva, Switzerland, and that the United States, Belarusian, Kazakh, Russian, and Ukrainian Delegations \"met to discuss questions relating to compliance with the obligations assumed under the Treaty.\" The statement did not provide any information about the substance of the discussions or about the possibility of future meetings. While some public press outlets reported that the meeting had occurred, the reports also did not provide any details about the substance of the meeting. Both the United States and Russia probably outlined all their compliance concerns, as that was the reason for calling the meeting, but, absent any reporting to the contrary, it is possible that they did not resolve their concerns or reach any new understandings. ", "The United States called a second meeting of the SVC in late 2017. This meeting occurred in Geneva from December 12 to 14, 2017. Because the United States identified the noncompliant GLCM as the 9M729, Russia could no longer deny the existence of the missile. However, according to some reports, Russia continued to deny that this missile had been tested to INF range or that telemetry from the tests supported a conclusion that it violated the INF Treaty. The United States has not disputed, publicly, Russia's assertion that it did not test the missile to INF range, but it did note, in the State Department's Annual Report, that Russia has attempted to \"obfuscate the nature of the program.\"", "Analysts outside government have suggested that, by meeting in the SVC, the parties could return to the more routine compliance process established by the treaty and remove the issue from the public debate. They expected this step to ease efforts to initiate a substantive discussion free of political posturing, while clearing the agenda of unrelated issues. Meetings in this forum would also provide Russia with the opportunity to raise its concerns about U.S. programs and U.S. compliance with the INF Treaty. ", "Others questioned whether Russia would be willing to participate in an SVC meeting if it was required to at least acknowledge that it had conducted tests of a questionable missile. However, once the United States called for the meetings, Russia was obligated to attend under the terms of the treaty. While it is not clear what transpired, the meetings should have provided the two nations with an opportunity to share data and information outside the public spotlight.", "If the meetings had been successful, and Russia had been willing to acknowledge that it had conducted tests that appear inconsistent with the INF Treaty, then the United States and Russia could have used the SVC as a forum to discuss steps they might take to resolve and, if possible, reverse the violation. For example, the United States could provide Russia with a list of missile tests that raised concerns about compliance, and Russia could share data generated during those flight tests so that they could review the data together and try to reach an agreed conclusion on the parameters of the tests. Moreover, even if they could not reach agreed conclusions about past tests, they could seek to negotiate new definitions or procedures that might reduce the chances of future ambiguities or uncertainties. And if they did agree that past tests had violated the terms of the INF Treaty, they might seek to work out procedures to eliminate the offending missiles and restore the parties to compliance with the treaty.", "Even if Russia acknowledged that its missile violated the INF Treaty, the SVC meetings might not lead to a prompt resolution of the INF debate. The process could still take years to reach a conclusion. For example, in 1983, the United States detected Soviet construction of an early-warning radar that appeared to violate the 1972 Anti-ballistic Missile (ABM) Treaty. That treaty permitted the construction of early-warning radars on the periphery of a country facing out; the Soviet Union had constructed the radar in the country's interior, with the radar facing northeast over Soviet territory. The United States first declared this radar to be a violation of the ABM Treaty in January 1984, and it raised its concerns about the radar in numerous compliance meetings and reviews of the ABM Treaty. The Soviet Union dismissed the U.S. accusations and claimed that the facility was a space-track radar, not an early-warning radar, in spite of the fact that it looked exactly like other Soviet early-warning radars. Finally, in 1987, the Soviet Union suspended construction of the radar and, in 1989, agreed that the radar was a technical violation of the treaty. In 1990, seven years after the United States identified the violation, the Soviet Union began to dismantle the radar. "], "subsections": []}, {"section_title": "Initiate Studies on New Military Capabilities", "paragraphs": ["Some analysts have suggested that the United States initiate studies that would explore whether the United States should eventually deploy new intermediate-range ballistic or cruise missiles to meet emerging military requirements. These studies would allow the United States to \"negotiate from a position of strength\" when addressing questions of Russian compliance and might provide the United States with \"military breakout options\" if the negotiations failed. According to Brian McKeon, the Principal Deputy Under Secretary of Defense for Policy, the Pentagon has already pursued this approach. In congressional testimony in December 2014, he noted that the Joint Staff had conducted a military assessment of the threat that new Russian INF-range missiles might create for U.S. allies in Europe and Asia and that \"this assessment has led us to review a broad range of military response options.\" According to Under Secretary McKeon, these options could include the deployment of new defenses against cruise missiles, the development and possible deployment of new U.S. intermediate-range missiles, and the deployment of other military capabilities that could counter the new Russian capabilities. Reports indicate that DOD forwarded its results to the White House in early 2015. The Administration has not, however, released this report to either Congress or the public, noting that its contents remain classified.", "Under Secretary McKeon provided Congress with an update on the Pentagon's pursuit of options to respond to Russia's INF violation in testimony before the House Armed Services Committee in December 2015. At that time, he noted that the Pentagon remained \"focused on ensuring that Russia gains no significant military advantage from its violation.\" But he also noted that the United States should \"consider Russian actions with regard to the INF Treaty in the context of its overall aggressive and bellicose behavior that flouts international legal norms and destabilizes the European security order.\" As a result, instead of seeking a military response that specifically offset the threat introduced by the new ground-launched cruise missile, the Pentagon is \"factoring Russia's increased cruise missile capabilities, including its INF violation into our planning.\" According to Under Secretary McKeon, the Pentagon is focusing on \"developing a comprehensive response to Russian military actions\" and is \"committing to investments now that we will make irrespective of Russia's decisions to return to compliance with the INF Treaty.\"", "Congress first offered support for the development of a military response to Russia's INF violation in legislation proposed in both the House and the Senate in July 2014 ( H.R. 5293 and S. 2725 ). These bills called on the President to \"carry out a program to research and develop ground-launched cruise missile and ground-launched ballistic missile capabilities, including by modification of existing United States military capabilities, with a range between 500 and 5,500 kilometers.\" The legislation also called on the President to study potential sites for the deployment of these new systems and to \"consider selecting sites on United States overseas military bases and sites offered by United States allies.\" The FY2015 National Defense Authorization Act ( H.R. 3979 , \u00a71651) also called on the Pentagon to submit a report to Congress that described steps that it plans to take in response to Russia's violation of the INF Treaty. These plans could include research, development, and testing or deployment of future military capabilities or plans to modify and deploy existing military systems, to deter or defend against the threat posed by new Russian INF systems. The FY2016 National Defense Authorization Act ( H.R. 1735 , \u00a71243) expanded on this provision, calling not only for a study on possible options, but also for a plan for the development of the counterforce capabilities to prevent intermediate-range ground-launched ballistic missile and cruise missile attacks, countervailing strike capabilities to enhance the forces of the United States or allies of the United States, and active defenses to defend against intermediate-range ground-launched cruise missile attacks.", "As noted above, the National Defense Authorization Act for 2018 ( H.R. 2810 ) has taken this approach further, both by providing funding for research into defenses, counterforce capabilities, and countervailing capabilities, and by mandating that DOD begin a program of record to develop a new U.S. ground-launched cruise missile. Press reports indicate that the Pentagon has already begun research into a new ground-launched cruise missile. They note that the United States has told Russia about the new research program and has said it would \"abandon the research program if Russia returns to compliance with the INF Treaty.\"", "Studies exploring possible U.S. military responses would not necessarily lead to the design of new land-based INF-range systems; the studies might conclude that the United States could meet its security challenges with sea-based or air-delivered weapons. However, if the studies did find that U.S. security could benefit from such systems, the United States could initiate research, development, and design work without violating the INF Treaty's ban on the testing or deployment of intermediate-range land-based missiles. Then, if Russia persisted in developing and deploying INF-range missiles, the United States would be able to move more quickly to respond and offset new threats to its security and the security of its allies.", "At the same time, these studies might boost the diplomatic dialogue by creating incentives for Russia to address U.S. concerns and preserve the INF Treaty. During the early 1980s, the Soviet Union was unwilling to ban INF-range systems, and was willing to limit its deployment only if the United States did not introduce any new missiles into Europe. It was only after the United States began to deploy its missiles in Europe that the Soviet Union became willing to reduce, and then eliminate, its systems. Some contend that this occurred because Soviet leaders recognized that U.S. INF systems could have struck targets in Moscow in minutes, and might have \"decapitated\" Soviet command and control systems early in a conflict. The only way to mitigate this threat was to agree to a ban on INF missiles. New U.S. research into INF systems might lead to similar, new Russian worries about its vulnerability to missile strikes from Europe, and therefore, new interests in limiting or banning intermediate-range missiles.", "There is some evidence that the potential for new U.S. INF deployments may have a similar effect on Russia. In June 2015, press reports focused on U.S. statements about the potential development of new military capabilities in response to Russia's INF violation. These articles, which highlighted the possibility that the United States might deploy new land-based missiles to Europe, caught the attention of Russian officials. An official speaking for the Kremlin noted that Moscow \"placed much attention\" on this report. A member of the Defense Committee of Russia's Federal Assembly stated that if the United States pursued such a deployment, Russia \"would face the necessity of retaliating.\" While it is not yet clear whether Russia will conclude that its security is better served by pressing forward with its own deployments or by returning to compliance with the INF Treaty and forestalling a new U.S. cruise missile, it seems likely that Russia now knows that the United States might pursue a military response that affects Russia's security.", "On the other hand, if, as Secretary McKeon testified in December 2015, the United States is considering the challenge posed by Russia's INF violation to be a part of the broader challenge of Russian activities in Europe, these programs may do little to encourage Russia to return to INF compliance. Part of the incentive for that return would rest with the promise that the United States would refrain from deploying new capabilities in Europe if Russia returned to compliance. But, if the United States responds with investments \"that we will make irrespective of Russia's decisions to return to compliance with the INF Treaty,\" the incentive could be lost."], "subsections": []}, {"section_title": "Suspend or Withdraw from Arms Control Agreements", "paragraphs": ["Some analysts have suggested that the United States suspend its participation in arms control agreements with Russia, both to demonstrate the magnitude of its concerns with Russia's missile developments and to preserve U.S. options for responding to military threats that might emerge if Russia deploys new INF missiles. Moreover, by suspending its participation in these agreements, the United States could make it clear that Russia would benefit from treaty-mandated limits on U.S. military capabilities only if its military capabilities were similarly limited. As with the studies on new U.S. military capabilities, this might boost the diplomatic process by providing Russia with an incentive to acknowledge and suspend its noncompliant missile tests."], "subsections": [{"section_title": "INF", "paragraphs": ["Even before President Trump announced that the United States would withdraw from the INF Treaty, analysts and observers outside government suggested that the United States withdraw both to protest Russia's noncompliance and to allow the United States to pursue the development and deployment of its own land-based INF-range missiles. Some also note that the United States has sought to convince Russia to return to compliance for several years, and that it no longer makes sense for the United States to be bound by INF if Russia is violating it. ", "Many have also noted that, by withdrawing from the treaty, the United States will be free to deploy intermediate-range land-based missiles, not only as a response to emerging challenges from Russia, but also in response to China's growing missile capabilities in Asia. They note that land-based missiles would likely provide the United States with added flexibility in countering Chinese efforts to restrict U.S. operations in the region. While they acknowledge that the United States could deploy air-delivered and sea-based missiles without violating the INF Treaty, they argue that air bases in the region are vulnerable to attack and sea-based assets are already stretched thin with weapons deployed for other missions. Consequently, by deploying missiles on the territory of allies, like Japan, the Philippines, and possibly northern Australia, the United States could expand its reach and grow its capabilities without further stretching its naval forces.", "However, some argue that U.S. withdrawal could do more harm than good to U.S. and allied security interests because the United States has not yet determined whether it would want to deploy land-based INF missiles itself, and has not yet funded a program to develop such missiles. As a result, U.S. withdrawal would leave Russia as the only party able to benefit from the elimination of the treaty limits and might allow Russia to move quickly from testing to deployment. Moreover, as Stephen Rademaker noted during testimony before the House Armed Services Committee, Russia might \"welcome a U.S. decision to terminate the treaty,\" and it would \"be a mistake to react in ways that will be seen by them as a reward rather than as a punishment.\" He added that \"since Russia so clearly wants out, we should make sure that they alone pay the political and diplomatic price of terminating the treaty.\"", "Others have argued that U.S. withdrawal from INF could also damage NATO cohesion. Although NATO foreign ministers have accepted the U.S. assessment of a Russian violation, many of the individual nations in NATO continue to support the treaty and believe it continues to serve Europe's security interests. Moreover, even if the United States develops a new land-based missile, U.S. allies in Europe might be unwilling to host the missile on their soil; disputes over deployment of INF-range missiles disrupted NATO in the 1980s and could undermine alliance cohesion again. Consequently, some have suggested that the United States remain in the INF Treaty, continue to seek a resolution with Russia, and deploy air-delivered or sea-based systems around Russia to apply pressure that might bring Russia back into compliance, essentially implementing the strategy outlined by the Trump Administration in late 2017.", "Some have also questioned whether the United States needs a land-based missile to respond to challenges from China; they note that the United States can cover targets in Asia with sea-based and air-delivered missiles without violating INF. They note that there are far greater ocean areas than land areas within INF range of critical targets in China. Moreover, they question whether U.S. allies in Asia would be any more willing than those in Europe to host new U.S. missiles, particularly if the presence of the missiles might raise concerns among the civilian populations or increase the likelihood of attack early in a conflict. ", "Regardless, some note that even if the United States and its allies could benefit from the deployment of land-based missiles in Asia, those benefits should be weighed against the risks of upsetting U.S. allies and undermining the current security structure in Europe, and possibly returning to the Cold War instabilities that gave rise to the INF Treaty in the first place. As one analyst noted, the United States \"will only stoke anxiety if it looks as though it's willing to increase risk to allies in Europe in order to reduce risk to allies in Asia.\""], "subsections": []}, {"section_title": "New START", "paragraphs": ["Several analysts have called on the United States to suspend its participation in the 2010 New Strategic Arms Reduction Treaty (New START). This treaty, which entered into force in February 2011, limits the United States and Russia to 1,550 deployed warheads on 700 deployed delivery vehicles for long-range, strategic nuclear warheads. Both parties have reduced their forces, meeting the mandated limits in February 2018. During implementation, some analysts argued that the United States could suspend its participation, without withdrawing from the treaty, then resume reductions prior to the deadline if Russia returned to compliance with the INF Treaty. This step would \"underscore to Moscow that the advantageous deal they achieved in the New START Treaty ... is being put in jeopardy.\" Others argued that this approach could have undermined U.S. national security interests, noting that Russia could have also suspended its reductions and, possibly, increased its nuclear forces above the limits. Russia could also have responded by suspending the data exchanges and on-site inspections mandated by New START, denying the United States access to data and information that is important not only to the treaty verification process, but also to the U.S. intelligence community.", "This option is no longer viable, as the United States and Russia have completed their New START reductions. However, the linkage between New START and INF compliance remains an issue, as the United States has begun to assess whether it should support the extension of New START for five years, as permitted by the treaty, when it expires in 2021. Reports indicate that the Trump Administration is currently conducting a review that will inform the U.S. approach to the treaty's extension. Administration officials addressed this review during testimony before the Senate Foreign Relations Committee on September 18, 2018. Both Under Secretary of State Andrea Thompson and Deputy Under Secretary of Defense David Trachtenberg emphasized how Russia's violation of the INF Treaty and its more general approach to arms control undermined U.S. confidence in the arms control process. Under Secretary Thompson noted that Russia's noncompliance \"has created a trust deficit that leads the United States to question Russia's commitment to arms control as a way to manage and stabilize our strategic relationship and promote greater transparency and predictability.\" Deputy Under Secretary Trachtenberg also emphasized that \"arms control with Russia is troubled because the Russian Federation apparently believes it need only abide by the agreements that suit it. As a result, the credibility of all international agreements with Russia is at risk.\" Nevertheless, before deciding whether to extend New START, the Administration is likely to weigh its concerns about Russia's compliance with INF against assessments of whether the limits in the treaty continue to serve U.S. national security interests, and whether the insights and data that the monitoring regime provides about Russian nuclear forces remain of value for U.S. national security."], "subsections": []}]}]}, {"section_title": "Options for Addressing Deployment of New INF Missiles", "paragraphs": ["In an interview published in November 2014, Under Secretary of State Rose Gottemoeller, who led the U.S. discussions with Russia on the INF Treaty, stated that she believed there was a debate in Moscow about whether the INF Treaty continued to serve Russia's national security interests. She believed the issue was not settled and that \"recent comments by Russian officials and by the Russian government overall about the viability and importance of the treaty for the time being give us time and space to negotiate.\" It is also possible, however, that the debate in Russia is less about whether to stay within the treaty and more about when and how to move beyond its limits. Some would argue that Russia's willingness to participate in discussions with the United States provided Russia with time and space to pursue its missile programs, before openly withdrawing from the treaty and prompting a U.S. response. Others have argued that Russia may be unwilling to withdraw from the treaty now, with the hope that the United States might eventually agree to a joint withdrawal or that the United States might withdraw itself and free Russia from its obligations.", "With the future of the treaty uncertain, the United States could consider a range of options for how it might address U.S. and allied security concerns now that Russia has begun to deploy the new INF-range cruise missile. These options include military responses\u2014such as the development and deployment of new nuclear-armed cruise missiles or new conventional military capabilities\u2014along with diplomatic and consultative steps taken with U.S. allies."], "subsections": [{"section_title": "Land-Based INF-Range Missiles", "paragraphs": ["As noted above, legislation proposed in July 2014 called on the President to conduct a study both on the need for new missiles and on locations overseas where the United States might deploy such systems. Others have been more direct in their support of new U.S. INF-range systems. Former Under Secretary of State John Bolton has argued that the INF Treaty interferes with the United States' ability \"to preserve global security\" and that other countries, like China, North Korea, and Iran, face no limits on their intermediate-range missiles. He believes the United States \"should see Moscow's breach as an opportunity to withdraw\" from the treaty so that it can \"have access to the full spectrum of conventional and nuclear options.\" As noted above, Congress has mandated that the Pentagon begin a program of record on a new ground-launched intermediate-range cruise missile, and the Pentagon has begun to conduct research into such a system. ", "Those who support programs to develop and deploy new U.S. INF-range missiles do not say, specifically, that these missiles should carry nuclear warheads or be based in Europe, although they also do not rule this out. Other analysts, however, argue that such an approach is unnecessary and would possibly do more to disrupt than support U.S. alliances overseas. They note that the United States should not need to deploy new nuclear weapons because U.S. conventional weapons are more than capable of responding to emerging threats and ensuring U.S. and allied security. They note that Russia also views U.S. conventional capabilities as a threat to Russian security, pointing out that Russian officials have repeatedly raised concerns about U.S. advanced conventional weapons and have suggested that Russia would be unwilling to reduce its nuclear forces any further unless the United States were willing to limit these capabilities in an arms control treaty. ", "Moreover, even if the United States decided that it needed to counter Russia's new capabilities with nuclear-armed missiles, it could be very difficult to find an allied country in Europe or Asia that was willing to house those missiles. As noted above, even after NATO reached consensus on the need to deploy INF missiles in 1979, several allied governments nearly refused to accept the missiles on their territories and many faced widespread public protests against the deployment of new nuclear weapons. There would likely be even less support for new nuclear weapons among many of the U.S. allies in Europe now, with several recently calling for the removal of the nearly 200 U.S. nuclear weapons that remain in Europe. As a result, it is possible that U.S. efforts to deploy new nuclear-armed INF-range missiles in Europe could \"exacerbate political divisions in Europe\" and undermine the unity NATO would need to respond to Russian attempts at coercion. There is also likely to be little support for new U.S. land-based nuclear weapons in Asia, as the United States removed these weapons in the early 1990s and maintains long-range bombers with the capability to support extended deterrence in Asia."], "subsections": []}, {"section_title": "Other Military Capabilities", "paragraphs": ["If Russia deploys new intermediate-range ballistic missiles and cruise missiles and seeks to use those capabilities to coerce or intimidate the United States or its allies, then the United States might deploy other military capabilities in response. These could include new air-delivered or sea-based cruise missiles that would be consistent with the terms of the INF Treaty and would not require basing on allied territories. The United States could also seek to expand the range of existing shorter-range systems, so that it could meet potential new military requirements without bearing the cost of developing new intermediate-range missile systems. For example, in testimony before the House Armed Services Committee, Jim Thomas, the Vice President of the Center for Strategic and Budgetary Assessments, suggested that the Department of Defense (DOD) assess the feasibility and cost to extend the range of the Army's tactical missile system (MGM-164 ATACMS), which currently has a range of about 80 miles. He also suggested that DOD consider developing a \"road-mobile, land-based variant\" of the Navy's MK-41 vertical launch system so that it could launch offensive missiles from land, if needed. Frank Rose and Robert Scher, former officials from the Obama Administration, made similar suggestions in a joint HASC/HFAC hearing in late March 2017. They both identified air-delivered and sea-based military capabilities as a means to not only offset threats to NATO nations but also remind Russia of the threats it could face if the INF Treaty were to collapse.", "The United States could also expand its missile defense capabilities in Europe and Asia in response to the deployment of new Russian missiles. At the present time, the United States and NATO are pursuing the European Phased Adaptive Approach, with missile defense interceptors deployed at sea and, eventually, on land in Poland and Romania. The interceptors and radars in this system are designed to defend against shorter- and intermediate-range missiles launched from Iran, with, eventually, some capability against longer-range Iranian missiles. The United States is deploying similar sea-based capabilities in Asia, in cooperation with allies there, in response to North Korea's missile program. The United States has insisted, repeatedly, that this system will have no capability against the larger numbers of far more capable Russian long-range missiles. However, several analysts in both the United States and Europe have suggested that NATO might reorient this system to defend against Russian intermediate-range missiles, if necessary. Others have argued that the United States and NATO should focus specifically on the development and deployment of cruise missile defenses \"to protect key alliance assets in the event of a conflict with Russia.\""], "subsections": []}, {"section_title": "Consultation and Cooperation with Allies", "paragraphs": ["New intermediate-range missiles deployed in or near Russia would not have the range needed to reach targets in the continental United States. They would, however, be able to threaten U.S. allies in Europe, Asia, and the Middle East. As a result, the United States would likely engage with its allies when determining how to respond if Russia deploys new INF-range missiles. U.S. allies' views on the nature of the threat from the missiles could inform the U.S. approach to responding to that threat. Some may favor continuing efforts to engage Russia through diplomatic channels, while others may prefer that the United States develop and deploy new capabilities to defend against any emerging Russian threat. However, there is little evidence that the United States consulted with its allies in Europe before deciding to withdraw from the treaty. Moreover, press reports indicate that the U.S. decision to delay its formal withdrawal from the treaty by 60 days occurred after \"German Chancellor Angela Merkel and other European leaders persuaded Trump to delay the move to allow for additional consultations.\"", "The United States could also consider several steps to reassure its allies of its commitment to their defense. Some analysts believe that this has become increasingly important in recent months, following Russia's annexation of Crimea and aggression against Ukraine. For example, NATO could develop new plans and procedures for engaging with Russia in a crisis in which these missiles might come into play. NATO might also expand its ongoing joint training missions and exercises, both to reassure the allies of the U.S. commitment and to strengthen its ability to provide reinforcements if a conflict were to occur. Beyond NATO, the United States could also meet with allies in Asia and the Middle East to discuss possible military or diplomatic responses if they felt threatened by Russia's missiles, either generally or in response to specific scenarios. ", "Although some analysts have suggested that the United States focus its response to Russia's noncompliance with the INF Treaty on military measures, and the development of new missile capabilities, others have argued for a more nuanced approach. They note that the United States may be able to defend its allies and respond to Russian aggression with conventional weapons and existing capabilities. But they also note that the full range of U.S. capabilities will do little to assuage the concerns of U.S. allies unless they are confident that the United States will come to their defense if they are threatened. In the absence of that confidence, some allies may feel more exposed than others and may be more vulnerable to Russian efforts at coercion. ", "As a result, although the current crisis over the INF Treaty began with concerns about the development of new Russian missiles, the United States may need to respond with measures directed more at the political concerns of its allies than at the military capabilities of Russia. For example, some European allies, particularly in Central and Eastern Europe, have expressed concern about the United States' reduced conventional force posture in Europe, and particularly the withdrawal over the past two years of two of the Army's four brigade combat teams in Europe. Although the United States has augmented its military presence in Central and Eastern Europe in the wake of Russia's annexation of Crimea, many allies have asked for a more robust U.S. response. NATO addressed these concerns during the September 2014 summit in Wales and announced a number of collective defense measures that were designed to deter further Russian aggression. Although not directly connected to Russia's noncompliance with the INF Treaty, these measures may also serve to assuage security concerns that arise if Russia continues to develop new intermediate-range ballistic and cruise missiles."], "subsections": []}]}, {"section_title": "Congressional Oversight", "paragraphs": ["Both the House and Senate pressed the Obama Administration for information about Russia's arms control compliance record and options for the U.S. response during the 114 th Congress. The House Armed Services and Foreign Affairs Committees have held three hearings on this issue, to date, and both the House and Senate Armed Services Committees have raised the issues during other, related hearings. The National Defense Authorization Act for FY2015 ( H.R. 3979 ) mandates that the President submit a report to Congress that includes an assessment of the effect of Russian noncompliance on the national security interests of the United States and its allies, and a description of the President's plan to resolve the compliance issues. The legislation also calls for periodic briefings to Congress on the status of efforts to resolve the U.S. compliance concerns.", "The FY2016 NDAA ( H.R. 1735 , \u00a71243) also addressed Russia's compliance with the INF Treaty and possible U.S. military responses. This legislation stated the sense of Congress that the development and deployment of a nuclear ground-launched cruise missile by Russia is a violation of the INF Treaty, that Russia should return to compliance with the INF Treaty, that efforts to compel Russia to return to compliance \"cannot be open-ended,\" and that there are several U.S. military requirements that would be addressed by the development and deployment of systems currently prohibited by the INF Treaty. The legislation went on to require that the President notify Congress both about the status of Russia's compliance with the INF Treaty and the status and content of updates that the United States provides to its allies in NATO and East Asia about Russia's testing, operating capability, and deployment of INF-range ground-launched ballistic missiles or ground-launched cruise missiles. As was noted above, the legislation also mandated that the Secretary of Defense submit a plan to Congress for the development of counterforce capabilities to prevent intermediate-range ground-launched ballistic missile and cruise missile attacks, countervailing strike capabilities to enhance the forces of the United States or allies of the United States, and active defenses to defend against intermediate-range ground-launched cruise missile attacks.", "The FY2017 NDAA ( P.L. 114-328 \u00a71231 and \u00a71238) also addressed congressional concerns with Russia's compliance with the INF Treaty. In Section 1231, Congress withheld $10 million in funding for the Executive Office of the President until the Secretary of Defense completed \"meaningful development\" of military capabilities that would allow the United States to respond to risks created by Russia's deployment of a new ground-based cruise missile. Section 1238 mandated that the Chairman of the Joint Chiefs of Staff submit a report containing, among other things, an assessment \"of whether and why the Treaty remains in the national security interest of the United States, including how any ongoing violations bear on the assessment if such a violation is not resolved in the near-term.\" ", "As is noted above, both the House and Senate versions of the FY2018 NDAA ( H.R. 2810 ) also mandate that the United States take steps to develop a military response to Russia's INF-range missile. The conference report ( H.Rept. 115-404 ) mandates that the Secretary of Defense \"establish a program of record to develop a conventional road-mobile ground-launched cruise missile system with a range of between 500 to 5,500 kilometers\" and authorizes $58 million in funding for the development of active defenses to counter INF-range ground-launched missile systems; counterforce capabilities to prevent attacks from these missiles; and countervailing strike capabilities to enhance the capabilities of the United States. The legislation also mandates that the President impose additional sanctions on Russia if it remains in noncompliance with the INF Treaty.", "Congress also addressed the INF Treaty in the National Defense Authorization act for FY2019 ( P.L. 115-232 , \u00a71243). The conference report legislation states that the President must submit a determination to Congress stating whether Russia \"is in material breach of its obligations under the INF Treaty\" and whether \"the prohibitions set forth in Article VI of the INF Treaty remain binding on the United States as a matter of United States law.\" These are the prohibitions on the testing and deployment of land-based ballistic and cruise missiles with a range between 500 and 5,500 kilometers. The legislation also stated that the United States should \"take actions to encourage the Russian Federation to return to compliance\" by providing additional funds for the development of military capabilities needed to counter Russia's new cruise missile and by \"seeking additional missile defense assets \u2026 to protect United States and NATO forces\" from Russia's noncompliant ground-launched missile systems.", "The FY2015 NDAA had stated that it was in the national security interest of the United States and its allies for the INF Treaty to remain in effect and for Russia to return to full compliance with the treaty. However, this assessment could change now that Russia appears to have deployed its new INF-range land-based cruise missile. Both Congress and the Trump Administration could now conclude that the United States may need to move beyond the diplomatic process to address emerging security concerns. While a decision to withdraw from the INF Treaty would have to come from the executive branch, Congress can express its views on that outcome both during hearings and through legislation. It cannot, however, mandate that outcome."], "subsections": []}]}]}}
{"id": "R42045", "title": "The Small Business Lending Fund", "released_date": "2019-04-12T00:00:00", "summary": ["Congressional interest in small business access to capital has increased in recent years because of concerns that small businesses might be prevented from accessing sufficient capital to enable them to start, continue, or expand operations and create jobs. Some have argued that the federal government should provide additional resources to assist small businesses. Others worry about the long-term adverse economic effects of spending programs that increase the federal deficit. They advocate business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to assist small businesses and create jobs.", "Several laws were enacted during the 111th Congress to enhance small business access to capital. For example,", "P.L. 111-5, the American Recovery and Reinvestment Act of 2009 (ARRA), provided the Small Business Administration (SBA) an additional $730 million, including funding to temporarily subsidize SBA fees and increase the 7(a) loan guaranty program's maximum loan guaranty percentage to 90%. P.L. 111-240, the Small Business Jobs Act of 2010, authorized the Secretary of the Treasury to establish a $30 billion Small Business Lending Fund (SBLF), in which $4.0 billion was issued, to encourage community banks with less than $10 billion in assets to increase their lending to small businesses. It also authorized a $1.5 billion State Small Business Credit Initiative to provide funding to participating states with small business capital access programs, numerous changes to the SBA's loan guaranty and contracting programs, funding to continue the SBA's fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage through December 31, 2010, and about $12 billion in tax relief for small businesses. P.L. 111-322, the Continuing Appropriations and Surface Transportation Extensions Act, 2011, authorized the SBA to continue its fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage through March 4, 2011, or until available funding was exhausted, which occurred on January 3, 2011.", "This report focuses on the SBLF. It opens with a discussion of the supply and demand for small business loans. The SBLF's advocates claimed the SBLF was needed to enhance the supply of small business loans. The report then examines other arguments presented both for and against the program. Advocates argued that the SBLF would increase lending to small businesses and, in turn, create jobs. Opponents contended that the SBLF could lose money, lacked sufficient oversight provisions, did not require lenders to increase their lending to small businesses, could serve as a vehicle for Troubled Asset Relief Program (TARP) recipients to effectively refinance their TARP loans on more favorable terms with little or no resulting benefit for small businesses, and could encourage a failing lender to make even riskier loans to avoid higher dividend payments.", "The report concludes with an examination of the program's implementation and a discussion of bills introduced to amend the SBLF. For example, during the 112th Congress, S. 681, the Greater Accountability in the Lending Fund Act of 2011, would have limited the program's authority to 15 years from enactment and prohibited TARP recipients from participating in the program. H.R. 2807, the Small Business Leg-Up Act of 2011, would have transferred any unobligated and repaid funds from the SBLF to the Community Development Financial Institutions Fund \"to increase the availability of credit for small businesses.\" H.R. 3147, the Small Business Lending Extension Act, would have extended the Department of the Treasury's investment authority from one year to two years. During the 113th Congress, H.R. 2474, the Community Lending and Small Business Jobs Act of 2013, would have transferred any unobligated and repaid funds from the SBLF to the Community Development Financial Institutions Fund."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Small Business Access to Capital", "paragraphs": ["Congressional interest in small business access to capital has increased in recent years because of concerns that small businesses might be prevented from accessing sufficient capital to enable them to start, continue, or expand operations and create jobs. Small businesses have played an important role in net job growth during previous economic recoveries, particularly in the construction, housing, and retail sectors. For example, after the eight-month recession that began in July 1990 and ended in March 1991, small businesses (defined for this purpose as having fewer than 500 employees) increased their net employment in the first year after the recession, whereas larger businesses continued to experience declines in employment. During the most recent recession (December 2007-June 2009), small businesses accounted for almost 60% of net job losses. From the end of the recession through the end of FY2012, small businesses accounted for about 63% of net new jobs, close to their historical average share of net new job creation. Since then, small businesses have added about 65% of net new jobs. ", "Some have argued that the federal government should provide additional resources to assist small businesses. Others worry about the long-term adverse economic effects of spending programs that increase the federal deficit. They advocate business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to assist small businesses and create jobs.", "Several laws were enacted during the 111 th Congress to enhance small business access to capital. For example,", "P.L. 111-5 , the American Recovery and Reinvestment Act of 2009 (ARRA), provided the Small Business Administration (SBA) an additional $730 million, including $375 million to temporarily subsidize SBA fees and increase the 7(a) loan guaranty program's maximum loan guaranty percentage from 85% on loans of $150,000 or less and 75% on loans exceeding $150,000 to 90% for all regular 7(a) loans. P.L. 111-240 , the Small Business Jobs Act of 2010, authorized the Secretary of the Treasury to establish a $30 billion Small Business Lending Fund (SBLF) ($4.0 billion was issued) to encourage community banks with less than $10 billion in assets to increase their lending to small businesses. It also authorized a $1.5 billion State Small Business Credit Initiative to provide funding to participating states with small business capital access programs, numerous changes to the SBA's loan guaranty and contracting programs, funding to continue the SBA's fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage through December 31, 2010, and about $12 billion in tax relief for small businesses. P.L. 111-322 , the Continuing Appropriations and Surface Transportation Extensions Act, 2011, authorized the SBA to continue its fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage through March 4, 2011, or until available funding was exhausted, which occurred on January 3, 2011. ", "According to the SBA, the temporary fee subsidies and 90% maximum loan guaranty for the 7(a) program \"engineered a significant turnaround in SBA lending.... The end result is that the agency helped put more than $42 billion in the hands of small businesses through the Recovery Act and Jobs Act combined.\"", "This report focuses on the SBLF. It begins with a discussion of the supply and demand for small business loans. The SBLF's advocates argued that the fund was an important part of a larger effort to enhance the supply of small business loans. After describing the program's structure, the report then examines other arguments that were presented both for and against the program's enactment. Advocates claimed the SBLF would increase lending to small businesses and, in turn, create jobs. Opponents contended that the SBLF could lose money, lacked sufficient oversight provisions, did not require lenders to increase their lending to small businesses, could serve as a vehicle for the Troubled Asset Relief Program (TARP) recipients to effectively refinance their TARP loans on more favorable terms with little or no resulting benefit for small businesses, and could encourage a failing lender to make even riskier loans to avoid higher dividend payments.", "The report concludes with an examination of the SBLF's implementation by the Department of the Treasury and a discussion of bills introduced during recent Congresses to amend the SBLF. For example, during the 112 th Congress, S. 681 , the Greater Accountability in the Lending Fund Act of 2011, would have, among other provisions, limited the program's authority to 15 years from enactment and prohibited TARP recipients from participating in the program. H.R. 2807 , the Small Business Leg-Up Act of 2011, would have transferred any unobligated and repaid funds from the SBLF when its investment authority expired on September 27, 2011, to the Community Development Financial Institutions Fund \"to continue the program of making capital investments in eligible community development financial institutions in order to increase the availability of credit for small businesses.\" H.R. 3147 , the Small Business Lending Extension Act, would have, among other provisions, extended the Department of the Treasury's investment authority from one year following the date of enactment to two years. During the 113 th Congress, H.R. 2474 , the Community Lending and Small Business Jobs Act of 2013, would have transferred any unobligated and repaid funds from the SBLF to the Community Development Financial Institutions Fund."], "subsections": []}, {"section_title": "Two Indicators of the Supply and Demand for Small Business Loans", "paragraphs": [], "subsections": [{"section_title": "Federal Reserve Board: Survey of Senior Loan Officers", "paragraphs": ["Each quarter, the Federal Reserve Board surveys senior loan officers concerning their bank's lending practices. The survey includes questions about both the supply and demand for small business loans. For example, the survey includes a question concerning their bank's credit standards for small business loans: \"Over the past three months, how have your bank's credit standards for approving applications for C&I [commercial and industrial] loans or credit lines\u2014other than those to be used to finance mergers and acquisitions\u2014for small firms (defined as having annual sales of less than $50 million) changed?\" The senior loan officers are asked to indicate if their bank's credit standards have \"Tightened considerably,\" \"Tightened somewhat,\" \"Remained basically unchanged,\" \"Eased somewhat,\" or \"Eased considerably.\" Subtracting the percentage of respondents reporting \"Eased somewhat\" and \"Eased considerably\" from the percentage of respondents reporting \"Tightened considerably\" and \"Tightened somewhat\" provides an indication of the market's supply of small business loans.", "As shown in Figure 1 , senior loan officers reported that they generally tightened small business loan credit standards from 2007 through late 2009. Since 2009, small business credit markets have generally improved, with some tightening in 2016 and the end of 2018.", "The survey also includes a question concerning the demand for small business loans: \"Apart from normal seasonal variation, how has demand for C&I loans changed over the past three months for small firms (annual sales of less than $50 million)?\" Senior loan officers are asked to indicate if demand was \"Substantially stronger,\" \"Moderately stronger,\" \"About the same,\" \"Moderately weaker,\" or \"Substantially weaker.\" Subtracting the percentage of respondents reporting \"Moderately weaker\" and \"Substantially weaker\" from the percentage of respondents reporting \"Substantially stronger\" and \"Moderately stronger\" provides an indication of the market's demand for small business loans.", "As shown in Figure 1 , senior loan officers reported that the demand for small business loans declined somewhat in 2007 and 2008, and declined significantly in 2009. Demand then leveled off (at a relatively reduced level) during 2010, increased somewhat during the first half of 2011, declined during the latter half of 2011, generally increased from 2012 through 2015, and has varied somewhat, increasing in some quarters and declining in others, since then."], "subsections": []}, {"section_title": "Federal Deposit Insurance Corporation: Outstanding Loan Balance", "paragraphs": ["The Federal Deposit Insurance Corporation (FDIC) has maintained comparable small business lending data for the second quarter (June 30) of each year since 2002. Figure 2 shows the amount of outstanding small business loans (defined by the FDIC as commercial and industrial loans of $1 million or less) for nonagricultural purposes as of June 30 of each year from 2006 to 2018. As shown in Figure 2 , the amount of outstanding small business loans for nonagricultural purposes increased at a relatively steady pace from June 30, 2006, to June 30, 2008, declined over the next several years, and has increased each year since June 30, 2013.", "Although changes in small business outstanding debt are not necessarily a result of changes in the supply of small business loans, many, including the SBA, view a decline in small business outstanding debt as a signal that small businesses might be experiencing difficulty accessing sufficient capital to enable them to lead job growth."], "subsections": []}, {"section_title": "Factors that May Have Contributed to the Decline in the Supply of Small Business Loans in 2007-2010", "paragraphs": ["According to an SBA-sponsored study of small business lending, several factors contributed to the decline in small business lending from 2007 to 2010. The report's authors noted that the 30% decline in home prices from their peak in 2006 to 2010 diminished the value of collateral for many small business borrowers, some of whom had relied on home equity loans to finance their small businesses during the real estate boom. The authors concluded that the absence of this additional source of collateral may have contributed to a decline in lending to small businesses. They also argued that many small businesses found it increasingly difficult to renew existing lines of credit as lenders became more cautious as a result of slow economic growth and an increasing risk of loan defaults, especially among small business start-ups, which are generally considered among the most risky investments. The authors argued that", "in this newly regulated market, smaller lenders are likely to be less profitable because they have fewer sales of products and services to spread out over the higher auditing and FDIC costs. Hence, they have less money to lend to small businesses and others; and the relative difficulty in assessing creditworthiness due to the lack of information about potential financial performance is very high in small business lending, especially in financial markets driven by factor\u2014rather than relationship\u2014lending. Therefore, one would expect the small business loan market to recover more slowly than other financial markets.", "The authors also noted that FDIC data indicated that small business lending had not only declined in absolute terms (the total amount of dollars borrowed and the total number of small business loans issued), but in relative terms as well (the market share of business loans): ", "Over the eight years from 2003 through 2010, small business loans as a share of total business loans declined by more than 12 percentage points, from 81.7% in 2003 to 68.9% in 2010. Perhaps of most concern is the further decline in the ratios of small business loans to total assets and small business loans to total business loans. Small business loans constituted about 16.8% of total assets in 2005, but only 15.3% in 2010; hence, small business lending is becoming less significant for these lenders. Small business lending is also losing market share in the business loan market. In the eight-year period from 2003 to 2010, small business loans as a share of total business loans declined more than 10 percentage points from 81.7% in 2003 to 68.9% in 2010."], "subsections": []}, {"section_title": "Factors that May Have Contributed to the Decline in the Demand for Small Business Loans in 2007-2010", "paragraphs": ["According to the previously mentioned SBA-sponsored study of small business lending, the demand for small business loans fell during the recession primarily because many small businesses experienced a decline in sales and many small business owners had a heightened level of uncertainty concerning future sales. The study's authors argued that given small business owners' lack of confidence in the demand for their goods and services, many small business owners decided to save capital instead of hiring additional employees and borrowing capital to invest in business expansions and inventory.", "The responses of small business owners to a monthly survey by the National Federation of Independent Business Research Foundation (NFIB) concerning small business owners' views of the economy support the argument that declining sales contributed to the reduced demand for small business loans. From 2008 through 2011, small business owners responding to the NFIB surveys identified poor sales as their number-one problem. Prior to 2008, taxes had been reported as their number-one problem in nearly every survey since the monthly surveys began in 1986. Also, employment data suggest that small businesses were particularly hard hit by the recession. As mentioned previously, small businesses accounted for almost 60% of the net job losses during the December 2007-June 2009 recession.", "According to testimony by the Secretary of the Treasury before the House Small Business Committee on June 22, 2011, small businesses were especially hard hit by the recession because", "[s]mall businesses are concentrated in sectors that were especially hard hit by the recession and the bursting of the housing bubble: construction and real estate. More than one-third of all construction workers are employed by firms with less than 20 workers, and an additional third are employed by businesses with fewer than 100 employees. Just over half of those employed in the real estate, rental, and leasing sectors work for businesses with less than 100 workers on their payrolls. More broadly, the rate of job losses was almost twice as high in small businesses as it was in larger firms during the depths of the crisis."], "subsections": []}, {"section_title": "The Congressional Response to the Decline in the Supply and Demand for Small Business Loans", "paragraphs": ["During the 111 th Congress, legislation designed to increase both the supply and demand for small business loans was adopted. For example, Congress provided more than $1.1 billion to temporarily subsidize fees for the SBA's 7(a) and 504/Certified Development Company (504/CDC) loan guaranty programs and to increase the 7(a) program's maximum loan guaranty percentage from 85% on loans of $150,000 or less and 75% on loans exceeding $150,000 to 90% for all regular 7(a) loans (funding was exhausted on January 3, 2011). The fee subsidies were designed to increase the demand for small business loans by reducing the cost of borrowing. The 90% loan guarantee was designed to increase the supply of small business loans by reducing the risk of lending.", "Congress also provided the SBA additional resources to expand its lending to small businesses. For example, ARRA included a $255 million temporary, two-year small business stabilization program to guarantee loans of $35,000 or less to small businesses for qualified debt consolidation, later named the America's Recovery Capital (ARC) Loan program (the program ceased issuing new loan guarantees on September 30, 2010); an additional $15 million for the SBA's surety bond program and a temporary increase in that program's maximum bond amount from $2 million to $5 million and up to $10 million under certain conditions (the higher maximum bond amounts ended on September 30, 2010); an additional $6 million for the SBA's Microloan program's lending program and an additional $24 million for the Microloan program's technical assistance program; and increased the funds ( leverage ) available to SBA-licensed Small Business Investment Companies (SBICs) to no more than 300% of the company's private capital or $150 million, whichever is less.", "Several other programs were also enacted during the 111 th Congress to increase the supply of small business loans. For example, ARRA authorized the SBA to establish a temporary secondary market guarantee authority to provide a federal guarantee for pools of first lien 504/CDC program loans that are to be sold to third-party investors. ARRA also authorized the SBA to make below-market interest rate direct loans to SBA-designated \"Systemically Important Secondary Market (SISM) Broker-Dealers\" that would use the loan funds to purchase SBA-guaranteed loans from commercial lenders, assemble them into pools, and sell them to investors in the secondary loan market.", "P.L. 111-240 extended the SBA's secondary market guarantee authority from two years after the date of ARRA's enactment to two years after the date of the program's first sale of a pool of first lien position 504/CDC loans to a third-party investor (which took place on September 24, 2010). The act also increased the loan guarantee limits for the SBA's 7(a) program from $2 million to $5 million, and for the 504/CDC program from $1.5 million to $5 million for \"regular\" borrowers, from $2 million to $5 million if the loan proceeds are directed toward one or more specified public policy goals, and from $4 million to $5.5 million for manufacturers. It also increased the SBA's Microloan program's loan limit for borrowers from $35,000 to $50,000 and for microlender intermediaries after their first year in the program from $3.5 million to $5 million. In addition, it temporarily increased for one year (through September 26, 2011) the SBA 7(a) Express Program's loan limit from $350,000 to $1 million. The act also authorized the Secretary of the Treasury to establish the $30 billion SBLF and a $1.5\u00a0billion State Small Business Credit Initiative to provide funding to participating states with small business capital access programs."], "subsections": []}]}, {"section_title": "The SBLF", "paragraphs": ["The SBLF was designed \"to address the ongoing effects of the financial crisis on small businesses by providing temporary authority to the Secretary of the Treasury to make capital investments in eligible institutions in order to increase the availability of credit for small businesses.\" The SBLF's legislative history, including differences in the House- and Senate-passed versions of the program, appears in the Appendix . ", "P.L. 111-240 authorized the Secretary of the Treasury to make up to $30 billion in capital investments in eligible institutions with total assets equal to or less than $1 billion or $10 billion (as of the end of the fourth quarter of calendar year 2009). The authority to make capital investments in eligible institutions was limited to one year after enactment.", "Eligible financial institutions with total assets equal to or less than $1 billion as of the end of the fourth quarter of calendar year 2009 could apply to receive a capital investment from the SBLF in an amount not exceeding 5% of risk-weighted assets, as reported in the FDIC call report immediately preceding the date of application. During the fourth quarter of 2009, 7,340 FDIC-insured lending institutions reported having assets amounting to less than $1 billion.", "Eligible financial institutions with total assets of $10 billion or less as of the end of the fourth quarter of calendar year 2009 could apply to receive a capital investment from the fund in an amount not exceeding 3% of risk-weighted assets, as reported in the FDIC call report immediately preceding the date of application. During the fourth quarter of 2009, 565 FDIC-insured lending institutions reported having assets of $1 billion to $10 billion.", "Risk-weighted assets are assets such as cash, loans, investments, and other financial institution assets that have different risks associated with them. FDIC regulations (12 C.F.R. \u00a7567.6) establish that cash and government bonds have a 0% risk-weighting; residential mortgage loans have a 50% risk-weighting; and other types of assets (such as small business loans) have a higher risk-weighting.", "Lending institutions on the FDIC problem bank list or institutions that have been removed from the FDIC problem bank list for less than 90 days are ineligible to participate in the program. A lending institution can refinance securities issued through the Treasury Capital Purchase Program (CPP) and the Community Development Capital Incentive (CDCI) program under TARP, but only if that institution had not missed more than one dividend payment due under those programs."], "subsections": [{"section_title": "Dividend Rates", "paragraphs": ["Participating banks (C corporations and savings associations) are charged a dividend rate of no more than 5% per annum initially, with reduced rates available if the bank increases its small business lending by specified amounts. For example, during any calendar quarter in the initial two years of the capital investments under the program, the bank's dividend rate is lowered if it increases its small business lending, as reported in its FDIC call reports, compared with the average small business lending it made in the four previous quarters immediately preceding the law's enactment, minus some allowable adjustments. ", " Table 1 shows the dividend rates associated with small business lending increases by C corporation banks and savings associations.", " Table 2 shows the dividend rates associated with small business lending increases by participating S corporation banks and mutual lending institutions. These rates are slightly higher than those for C corporation banks and savings associations \"to reflect after-tax effective rates equivalent to the dividend rate paid by other classes of institutions participating in the Fund through the issuance of preferred stock.\" As will be discussed later, an S corporation does not pay federal taxes at the corporate level. Any business income or loss is \"passed through\" to shareholders who report it on their personal income tax returns.", "Community Development Financial Institutions (CFDIs) are provided funding for an initial eight years with an automatic rollover for two additional years at the issuer's option. On the 10 th anniversary of the investment date the issuer repays the principal amount, together with all accrued and unpaid interest. Additionally, the dividend rate is 2% per annum for the first eight years from the investment date (payable quarterly in arrears on January 1, April 1, July 1, and October 1 of each year) and 9% thereafter."], "subsections": []}, {"section_title": "Lending Plan Requirement", "paragraphs": ["SBLF applicants are required to submit a small business lending plan to the appropriate federal banking agency and, for applicants that are state-chartered banks, to the appropriate state banking regulator. The plan must describe how the applicant's business strategy and operating goals will allow it to address the needs of small businesses in the areas it serves, as well as a plan to provide linguistically and culturally appropriate outreach, where appropriate. The plan is treated as confidential supervisory information. The Secretary of the Treasury is required to consult with the appropriate federal banking agency or, in the case of an eligible institution that is a nondepository community development financial institution, the Community Development Financial Institution Fund, before determining if the eligible institution may participate in the program.", "The act directed that all funds received by the Secretary of the Treasury in connection with purchases made by the SBLF, \"including interest payments, dividend payments, and proceeds from the sale of any financial instrument, shall be paid into the general fund of the Treasury for reduction of the public debt.\""], "subsections": []}]}, {"section_title": "Arguments For and Against the SBLF", "paragraphs": ["The SBLF's advocates argued that it would create jobs by encouraging lenders, especially those experiencing liquidity problems (access to cash and easily tradable assets), to increase their lending to small businesses. For example, the House report accompanying H.R. 5297 , the Small Business Lending Fund Act of 2010, argued that the SBLF was needed to enhance small business's access to capital, which, in turn, was necessary to enable those businesses to create jobs and assist in the economic recovery:", "There has been a dramatic decrease in the amount of bank lending in the past several quarters. On May 20, 2010, the Federal Deposit Insurance Corporation (FDIC) released its Quarterly Banking Profile for the first quarter of 2010. The report shows that commercial and industrial loans declined for the seventh straight quarter, down more than 17% from the year before.", "Many companies, particularly small businesses, claim that it is becoming harder to get new loans to keep their business operating and that banks are tightening requirements or cutting off existing lines of credit even when the businesses are up to date on their loan repayments. Treasury Secretary Timothy F. Geithner recently acknowledged the problem encountered by some banks, both healthy and troubled, which have been told to maintain capital levels in excess of those required to be considered well capitalized. ", "Some banks say they have little choice but to scale back lending, even to creditworthy borrowers, and the most recent Federal Reserve data shows banks are continuing to tighten lending terms for small businesses.", "A dissenting view, endorsed by the House Committee on Financial Services' minority members, was included in the report. This view argued that the SBLF does not properly deal with the lack of financing for small businesses: ", "Instead of addressing the problem by stimulating demand for credit by small businesses, H.R. 5297 injects capital into banks with no guarantees that they will actually lend. The bill allows a qualifying bank to obtain a capital infusion from the government without even requiring the bank to make a loan for two years. In fact, if a bank reduces or fails to increase lending to small business during those first two years, it would not face any penalty. It defies logic that the Majority would support a bill to increase lending that does not actually require increased lending. A more effective response to the challenges facing America's small businesses was offered by Representatives Biggert, Paulsen, Castle, Gerlach, and King, whose amendment would have extended a series of small business tax credits before implementing the Small Business Lending Fund.", "Advocates also argued that even if the SBLF were authorized \"the program probably would not be fully operational for months; banks could shun the program for fear of being stigmatized by its association with TARP; and many banks would avoid taking on new liabilities when their existing assets are troubled.\" They contended that the bill did not provide sufficient oversight for effectively monitoring the program because the Inspector General of the Department of the Treasury, who was given that oversight responsibility under the bill, \"might not be able to direct sufficient attention to this task given its other responsibilities.\" They argued that the Special Inspector General of TARP would be in a better position to provide effective oversight of the program.", "These, and other, arguments were presented during House floor debate on the bill. For example, Representative Melissa Bean advocated the bill's passage, arguing that the SBLF ", "builds on the effective financial stabilization measures Congress has previously taken by establishing a new $30 billion small business loan fund to provide additional capital to community banks that increase lending to small businesses. This $30 billion investment on which the government will be collecting dividends and earning a profit per the CBO [Congressional Budget Office] estimates can be leveraged by banks into over $300 billion in new small business loans. This is an important investment by the Federal Government in our small business that brings tremendous returns. ", "The terms of the capital provided to banks are performance based; the more a bank increases its small business lending, the lower the dividend rate is for the SBLF capital. If a bank decreases its small business lending, it will be penalized with higher dividend rates. ", "This legislation includes strong safeguards to ensure that banks adequately utilize available funds to increase lending to small businesses, not for other lending or to improve their balance sheet. There will be oversight consistently throughout the program, plus it requires that the capital be invested only in strong financial institutions at little risk of default and the best positioned to increase small business lending. ", "It's important for Americans to understand that although this fund has a maximum value of $30 billion, it is estimated to make a profit for taxpayers in the long run. And the money will ultimately go not to banks, but to the small businesses and their communities that they lend to. As our financial system stabilizes and our community banks recapitalize, these funds will be repaid to Treasury with full repayment required over the next 10 years.", "Representative Nydia Vel\u00e1zquez, then-chair of the House Committee on Small Business, added that the legislation had sufficient safeguards in place to ensure that the funds were targeted at small businesses:", "First, banks must apply to the Treasury to receive funds, with a detailed plan on how to increase small business lending at their institution. This language was included at my insistence that we need to make sure that small businesses will get the benefit of this legislation. ", "Second, this capital, repayment of the government loans will be at a dividend rate starting at 5% per year. This rate will be lowered by 1% for every 2.5% increase in small business lending over 2009 levels. It can go as low as a total dividend rate of just 1% if the bank increases its business lending by 10% or more, incentivizing banks to do the right thing. To ensure that banks actually use the funding they receive, the rate will increase\u2014and there are penalties\u2014to 7% if the bank fails to increase its small business lending at their institution within 2 years. To ensure that all federal funds are paid back within 5 years, the dividend rate will increase to 9% for all banks, irrespective of their small business lending, after 4 1/2 years. ", "Representative Vel\u00e1zquez added \"let me just make it clear \u2026 CBO estimates that [the SBLF] will save taxpayers $1 billion over 10 years, as banks are expected to pay back this loan over 10 years, with interest.\"", "Representative Randy Neugebauer opposed the bill's adoption, arguing that", "the majority is repeating the same failed initiatives that have helped our national debt grow to $13 trillion in the past 2 years. This bill follows the model of the TARP program, minus [TARP's] stronger oversight, and it puts another $30 billion into banks in the hopes that lending to small businesses will increase. In the words of Neil Barofsky, the Special Inspector General who oversees the TARP, \"In terms of its basic design,\" he says, \"its participants, its application process, from an oversight perspective, the Small Business Lending Fund would essentially be an extension of the TARP's Capital Purchase Program.\" From the Congressional Oversight Panel for TARP, chaired by Elizabeth Warren, she says, \"The SBLF's prospects are far from certain. The SBLF also raises questions about whether, in light of the Capital Purchase Program's poor performance in improving credit access, any capital infusion program can successfully jump-start small business lending.\"", "This bill allows for another $33 billion in spending that will be added to the government's credit card. The CBO tells us that the bank lending portion will ultimately cost taxpayers $3.4 billion when market risk is taken into account.", "The House passed H.R. 5297 by a vote of 241-182, on June 17, 2010.", "The arguments presented during House floor debate on H.R. 5297 were also presented during Senate consideration of the bill. Advocates argued that the SBLF would encourage higher levels of small business lending and jobs. For example, Senator Mary Landrieu argued on July 21, 2010, that the SBLF should be adopted because it \"is not a government program for banks. It is a public-private partnership lending strategy for small business.\" She added that as chair of the Senate Committee on Small Business and Entrepreneurship, she talked with her colleagues, including the SBLF's opponents, and revised the program to address their concerns. She also argued that the SBLF has", "hundreds of endorsements from independent banks, the community banks and almost every small business association in America \u2026 makes $1 billion [according to the CBO score] \u2026 is not direct lending from the federal government. It is not creating a new bureaucracy \u2026 [It is] voluntary \u2026 there are no onerous restrictions.\u2026 The small business gets the loans. We create jobs. People are employed. The recession starts ending\u2026. It has nothing to do with TARP money. It is not a TARP program. It is not a bank program. It doesn't have anything to do with banks except that we are working in partnership with banks to lend money to small businesses which are desperate for money.", "Opponents argued that the SBLF could lose money, lacked sufficient oversight provisions, did not require lenders to increase their lending to small businesses, could serve as a vehicle for TARP recipients to effectively refinance their TARP loans on more favorable terms with little or no resulting benefit for small businesses, and could encourage a failing lender to make even riskier loans to avoid higher dividend payments. In addition, there were disagreements over the number of amendments that could be offered by the minority, which led several Senators to oppose further consideration of the bill until that issue was resolved to their satisfaction. For example, on July 22, 2010, Senator Olympia Snowe argued that although \"under a cash-based estimate, CBO listed the official score for the lending fund as raising $1.1 billion over 10 years,\" SBLF proponents \"fail to mention\" that when CBO scored the SBLF using an alternative methodology that adjusts for market risk, it estimated that the SBLF could cost $6.2 billion. Senator Snowe also argued that the bipartisan Congressional Oversight Panel for TARP stated in its May 2010 oversight report that the proposed SBLF \"substantially resembles\" the TARP and \"is a bank-focused capital infusion program that is being contemplated despite little, if any, evidence that such programs increase lending.\" Senator Snowe noted that she regretted \"that we are in a position where we have not been able to reach agreement allowing the minority to offer amendments, which is confounding and perplexing as well as disappointing.\" Senator Snowe later added that the SBLF's incentives to encourage lending to small businesses also \"could encourage unnecessarily risky behavior by banks \u2026 to avoid paying higher interest rates.\" ", "Opponents also questioned the SBLF's use of quarterly call report data as submitted by lenders to their appropriate banking regulator to determine what counts as a small business loan. Call report data denotes loans of $1 million or less as small business loans, regardless of the size of the business receiving the loan. As a result, the SBLF's opponents argued that \"the data used to measure small business lending in the SBLF covers an entirely different set of small businesses than those that fall within the definition set out in the Small Business Act or used by the SBA.\"", "The Senate's version of H.R. 5297 was agreed to on September 16, 2010, by a vote of 68-38. The House agreed to the Senate-passed version of H.R. 5297 on September 23, 2010, by a vote of 237-187, and the bill, retitled the Small Business Jobs Act of 2010, was signed into law by President Obama on September 27, 2010."], "subsections": []}, {"section_title": "The SBLF's Implementation", "paragraphs": ["On February 14, 2011, the Obama Administration issued its budget recommendation for FY2012. The budget anticipated that the SBLF would provide $17.399 billion in financings, well below its authorized amount of $30 billion. This was the first indication that the SBLF's implementation may not proceed as expected. The second indication that the program's implementation may not proceed as expected was an unanticipated delay in the writing of the program's regulations."], "subsections": [{"section_title": "Treasury's Rollout of the Program", "paragraphs": ["The U.S. Treasury was criticized by some for not implementing the program quickly enough. The first financing took place on June 21, 2011, about nine months after the program's enactment. The delay was largely due to the Treasury's need to finalize the SBLF's investment decision process with federal banking agencies and the need to create separate SBLF regulations for financial institutions established as C corporations, Subchapter S corporations, mutual lending institutions, and Community Development Financial Institutions (CDFIs).", "A C corporation is a legal entity established under state law and includes shareholders, directors, and officers. The profit of a C corporation is taxed to the corporation when earned and then is taxed to the shareholders when distributed as dividends. The majority of insured depository institutions, bank holding companies, and savings and loan holding companies are C corporations. A Subchapter S c orporation refers to a section of the Internal Revenue Code (IRC) that allows a corporation to pass corporate income, losses, deductions, and credits through to its shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income. Mutual lending institutions , which include many thrifts, are owned by their depositors or policyholders. They have no stockholders. CDFIs are financial entities certified by the CDFI Fund in the U.S. Department of the Treasury and provide capital and financial services to underserved communities. ", "The establishment of separate regulations for each of these different types of financial institutions was largely related to issues involving whether the SBLF's financings would be counted by banking regulatory agencies as Tier 1 capital (core capital that is relatively liquid, such as common shareholders' equity, disclosed reserves, most retained earnings, and perpetual noncumulative preferred stocks) or as Tier 2 capital (supplementary capital that consists mainly of undisclosed reserves, revaluation reserves, general provisions, hybrid instruments, and subordinated term debt). ", "The treatment of the SBLF's financings was important given that banks must maintain a minimum total risk-based capital ratio of 8% (the ratio measures bank capital against assets, with asset values risk-weighted, or adjusted on a scale of riskiness) to be considered adequately capitalized by federal banking regulators. In addition, banks must maintain a minimum Tier 1 risk-based ratio to assets, typically 3% for banking institutions with the highest financial ratings and 4% for others. ", "According to Treasury officials, under Internal Revenue Service (IRS) rules, S corporations can have only a single class of stock (common shares). Consequently, these institutions cannot issue preferred stock to Treasury. As a result, Treasury had to consider purchasing subordinated debt from these institutions, which the banking regulatory agencies would likely designate as Tier 2 capital. Treasury officials believed that providing Tier 2 capital would probably result in fewer S corporation participants. Additionally, because mutual lending institutions do not issue stock, Treasury officials were unable to receive preferred stock as consideration for an investment in this type of institution. Therefore, Treasury had to consider purchasing subordinated debt from these institutions as well.", "Treasury completed its regulations for C corporation banks first. For C corporations, SBLF funds are treated as Tier I capital and the Treasury purchases senior perpetual noncumulative preferred stock (or an equivalent). The stock pays a quarterly dividend on the first day of each quarter after closing of the SBLF capital program funding. Tier 1 capital is the core measure of a bank's financial strength from a regulator's point of view. It is composed of core capital, which consists primarily of common stock and disclosed reserves (or retained earnings) but may also include nonredeemable, noncumulative preferred stock. In contrast, S corporations and mutual lending institutions receive unsecured subordinated debentures from the Treasury, which are considered Tier 2 capital for regulatory capital requirements.", "The application deadline for C corporation banks was May 16, 2011. The application deadline for Subchapter S corporations and mutual lending institutions was June 6, 2011, and the application deadline for CDFIs was June 22, 2011. A total of 926 institutions applied for $11.8 billion in SBLF funding.", "Treasury approved more than $4.0 billion in SBLF financing to 332 lending institutions ($3.9 billion to 281 community banks and $104 million to 51 CDFIs). SBLF recipients have offices located in 47 states and the District of Columbia. The average financing was $12.1 million, ranging from $42,000 to $141.0 million.", "Of the 332 lending institutions which received financing, 137 institutions had participated in TARP's Community Development Capital Initiative or its Capital Purchase Program. These institutions received nearly $2.7 billion in SBLF financing (66.8% of the total)."], "subsections": []}, {"section_title": "Small Business Lending Progress Reports", "paragraphs": ["Treasury is required to publish monthly reports describing all transactions made under the SBLF program during the reporting period. It is also required to publish a semiannual report (each March and September) providing all projected costs and liabilities, operating expenses, and transactions made by the SBLF, including a list of all participating institutions and the amounts each institution has received under the program. Treasury must also publish a quarterly report describing how participating institutions have used the funds they have received.", "SBLF participants must submit an initial supplemental report to Treasury no later than five business days before closing. The report provides information from the institution's FDIC call reports or, for holding companies, from their subsidiaries' FDIC call reports, that Treasury uses to establish an initial baseline for measuring the SBLF participants' progress in making loans to small businesses. ", "The initial baseline is the average amount of qualified small business lending that was outstanding for the four full quarters ending on June 30, 2010. It is derived by first adding the outstanding amount of lending reported for all commercial and industrial loans, owner-occupied nonfarm, nonresidential real estate loans, loans to finance agricultural production and other loans to farmers, and loans secured by farmland. Then, the outstanding amount of lending for large loans (defined as any loan or group of loans greater than $10\u00a0million), loans to large businesses (defined as businesses with annual revenues greater than $50 million), and the portion of any loans guaranteed by the U.S. government or for which the risk is assumed by a third party is subtracted from that amount. The lending institution then adds back any cumulative charge-offs with respect to such loans since July 1, 2010. This last adjustment is done to prevent lending institutions from being penalized for appropriately charging off loans.", "Each SBLF participant's small business lending baseline is also adjusted to take into account any gains in qualified small business lending during the four baseline quarters resulting from mergers, acquisitions, and loan purchases. This adjustment is designed to ensure that dividend rate reductions provided to any SBLF participant correspond to additional lending to small businesses and not to the acquisition of existing loans. In addition, the cumulative baseline for all SBLF participants will decrease over time as SBLF participants repay their SBLF loans and exit the program. For example, the initial small business lending baseline for the 332 SBLF participants as of March 31, 2011, was $35.52 billion ($34.75 billion for 281 banks and $770.48 million for 51 CDFIs). The small business lending baseline for the 50 institutions that continued to participate in the SBLF as of December 31, 2018, was $1.5 billion ($808.8 million for 7 banks and $714.5 million for 43 CDFIs).", " Table 3 provides the number and type of SBLF participating institutions, the small business lending baseline, the amount of small business lending by participants, the change in small business lending by participants, and the change in small business lending by both current and former participants from 2011 to 2018. The number of SBLF participating institutions is declining as institutions repay their loans and exit the program. As Treasury anticipated, this decline has accelerated following the first quarter of 2016 because the dividend rates for C corporation banks and savings associations and for S corporation banks and mutual lending institutions were increased at that time (to 9% and 13.8%, respectively).", "SBLF institutions are also required to submit quarterly supplemental reports, due in the calendar quarter following submission of the initial supplemental report and in each of the next nine quarters, to determine their dividend rate for the next quarter.", "Using information contained in the quarterly supplemental reports, Treasury announced in its April 2019 quarterly report on SBLF Participants' Small Business Lending Growth that, as of December 31, 2018", "The 50 current SBLF participants (7 banks and 43 CDFIs) increased their small business lending by $1.347 billion over a $1.523 billion baseline. Since inception, the total increase in small business lending reported by both current and former SBLF participants is more than $19.1 billion over the baseline. All seven of the currently participating community banks and 39 of the 43 currently participating CDLFs increased their small business lending over baseline levels. Most current participants report that their small business lending increases have been substantial, with 43 of 50 current SBLF participants (86.0%) increasing small business lending by 10% or more.", "Treasury officials have praised the SBLF's performance. For example, on October 9, 2012, then-Deputy Secretary of the Treasury Neal Wolin announced that the SBLF quarterly use of funds report released that day \"is further indication that the Administration's Small Business Lending Fund is continuing to help create an environment in which entrepreneurial small businesses can succeed and excel.\" He added that \"banks in the SBLF program continue to show large increases in the lending available for small businesses to grow, create jobs, and support families in communities across the country.\"", "Some financial commentators have expressed a somewhat less sanguine view of the program's performance. For example, one commentator noted, after the release of the quarterly use of funds report in January 2012, that although the report of increased small business lending was positive news \"it is difficult to isolate the proportion of new lending that would have occurred anyway\" due to improvements in the economy. Another commentator noted that the data may have been skewed by SBLF participants who were entering the small business lending market for the first time, making the increases appear larger and more significant than they actually are; yet another noted that the reported growth in small business lending occurred over six quarters (since June 30, 2010) and that the results, although positive, are \"not as impressive as it may seem.\" A commentator argued in September 2012 that \"if the SBLF ends up being a success story, it will have been on a far smaller scale than either Obama or Congress had originally expected. What's more, it's become clear that even boatloads of financing won't change the fact that demand for the loans themselves has also fallen off, as small businesses themselves are reluctant to expand in a stagnant economy.\"", "In addition, on August 29, 2013, Treasury's Office of Inspector General (OIG) released an audit of Treasury's reporting of small business lending gains relative to small business lending levels prior to the lenders' participation in the program. The OIG found that \"small business lending gains reported by Treasury are significantly overstated and cannot be linked directly to SBLF funding.\" Specifically, the OIG noted that \"substantial amounts [$3.4 billion of the then reported $8.9 billion] of the reported gains occurred prior to participants receiving SBLF funding.\" As the OIG explained, ", "the lending gains reported [by Treasury] were measured against the same baseline period that the Small Business Jobs Act of 2010 (the Act) instructs Treasury to use for setting dividend rates for repayment of the SBLF capital, which is the four calendar quarters [which] ended [on] June 30, 2010. However, measuring program performance against a baseline with a midpoint seven quarters prior to when most participants received funding inflates program accomplishments and is not responsive to provisions in the Act that direct Treasury to report on participant use of the SBLF funds received.", "The OIG also argued that the reported lending gains cannot be directly linked to the SBLF capital that Treasury invested in the financial institutions because the lending gains reported \"represent all small business lending gains that institutions participating in the SBLF achieved, regardless of how the loans were funded.\" In addition, the OIG noted, among other findings, that \"a relatively small number (35 or 11%) of SBLF participants accounted for half of small business lending increases between the baseline figure and December 31, 2012.\""], "subsections": []}]}, {"section_title": "Proposed Legislation", "paragraphs": ["During the 112 th Congress, several bills were introduced to change the SBLF. None of the bills were enacted. For example, then-Senator Snowe introduced S. 681 , the Greater Accountability in the Lending Fund Act of 2011, on March 30, 2011. Senator Snowe argued that ", "While I would prefer to terminate this fund altogether, it is unlikely based on the current political environment, which is why we must work to protect taxpayers from some of its most egregious provisions. My goal with this legislation is to ensure that only healthy banks have access to taxpayer money, that they are required to repay loans within a reasonable period of time, and that small businesses find the affordable credit they need.", "The bill would have, among other things,", "required recipients to repay SBLF distributions within 10 years of the receipt of the investment; terminated the program no later than 15 years after the date of the bill's enactment; prohibited the Secretary of the Treasury from making capital investments under the program if the FDIC is appointed receiver of 5% or more of the institutions receiving an investment under the program; prohibited participation by any institution that received an investment under TARP (effective on the date of the bill's enactment); removed provisions allowing the Secretary of Treasury to make a capital investment in institutions that would otherwise not be recommended to receive the investment based on the institution's financial condition, but are able to provide a matching investment from private, nongovernmental investors; required the approval of appropriate financial regulators when determining whether an institution should receive a capital investment; and revised the benchmark against which changes in the amount of small business lending is measured from the four full quarters immediately preceding the date of enactment to calendar year 2007.", "In addition, H.R. 1387 , the Small Business Lending Fund Accountability Act of 2011, would have provided the Special Inspector General for TARP responsibility for providing oversight over the SBLF. ", "S.Amdt. 279 to S. 493 , the Small Business Innovation Research, Small Business Technology Transfer Reauthorization Act of 2011, would have prevented TARP recipients from using funds received in any form under any other federal assistance program, including the SBLF program. ", "H.R. 2807 , the Small Business Leg-Up Act of 2011, would have transferred any unobligated and repaid funds from the SBLF to the Community Development Financial Institutions Fund beginning on the date when the Secretary of the Treasury's authority to make capital investments in eligible institutions expired (on September 27, 2011). The bill's stated intent was \"to increase the availability of credit for small businesses.\"", "H.R. 3147 , the Small Business Lending Extension Act, would have extended the Department of the Treasury's investment authority from one year following enactment to two years and required the Treasury Secretary to provide any institution not selected for participation in the program the reason for the rejection, ensure that the rejection reason remains confidential, and establish an appeal process that provides the institution an opportunity to contest the reason provided for the rejection of its application.", "During the 113 th Congress, H.R. 2474 , the Community Lending and Small Business Jobs Act of 2013, would have, among other provisions, transferred any unobligated and repaid funds from the SBLF to the Community Development Financial Institutions Fund."], "subsections": []}, {"section_title": "Concluding Observations", "paragraphs": ["The SBLF was enacted as part of a larger effort to enhance the supply of capital to small businesses. Advocates argued that the SBLF would help to address the decline in small business lending and create jobs. Opponents were not convinced that it would enhance small business lending and worried about the program's potential cost to the federal treasury and its similarities to TARP. ", "Participating institutions are reporting they have increased their small business lending. However, as has been discussed, questions have been raised concerning the validity of these reported amounts. Specifically, as Treasury's OIG argued in its August 2013 audit, more than one-third of the reported lending gains at that time occurred prior to September 30, 2011, the quarter in which most SBLF participants received their SBLF funds; the reported small business lending gains reflect all of the small business lending gains that the participants achieved, regardless of how the loans were funded; and previous OIG audits \"have shown that a large number of participants misreport their small business lending activity.\" In those previous audits, \"50% or more of the institutions reviewed submitted erroneous lending data to Treasury, either overstating or understating their small business lending gains.\"", "In addition to questions related to the validity of the reported small business lending gains, any analysis of the program's influence on small business lending is likely to be more suggestive than definitive because differentiating the SBLF's effect on small business lending from other factors, such as changes in the lender's local economy, is methodologically challenging, especially given the relatively small amount of financing involved relative to the national market for small business loans. The SBLF's $4.0 billion in financing represents less than 0.7% of outstanding small business loans (as defined by the FDIC).", "In terms of the concerns expressed about the program's potential cost, Treasury initially estimated in December 2010 that the SBLF could cost taxpayers up to $1.26 billion (excluding administrative costs that were initially estimated at about $26 million annually but actual outlays were $4.54 million in FY2014, $9.05 million in FY2015, $5.01 million in FY2016, and $3.4 million in FY2017). Treasury based that estimate on an expectation that about $17 billion in SBLF financings would be disbursed. In October 2011, Treasury estimated the program's costs based on actual participant data. It estimated that the SBLF would generate a savings of $80 million (excluding administrative costs), with the savings coming primarily from a lower-than-expected financing level and, to a lesser extent, improvements in projected default rates \"due to higher participant quality than expected\" and lower market interest rates. Treasury issues a semiannual report on SBLF costs. In its latest semiannual cost report, released on August 16, 2018, Treasury estimated that the SBLF will \"generate a lifetime positive return of $31 million [excluding administrative costs] for the Treasury General Fund.\" ", "One issue that arose relative to the program's projected cost is the noncumulative treatment of dividends. Treasury's OIG reported in May 2011 that", "Under the terms set by legislation, dividend payments are non-cumulative, meaning that institutions are under no obligation to make dividend payments as scheduled or to pay off previously missed payments before exiting the program. This dividend treatment differs from the TARP programs, in which many dividend payments were cumulative. This change in dividend treatment was driven by changes in capital requirements mandated by the Collins Amendment to the Dodd-Frank Act.", "The amendment equalizes the consolidated capital requirements for Tier 1 capital of bank holding companies by requiring that, at a minimum, regulators apply the same capital and risk standards for FDIC-insured banks to bank holding companies. Under TARP, the FRB [Federal Reserve Board] and FDIC treated capital differently at the holding company and depository institution levels. The FRB treated cumulative securities issued by holding companies as Tier 1 capital, while FDIC treated non-cumulative securities issued by depository institutions as Tier 1 capital. In order to comply with the Dodd-Frank Act requirement that securities purchased from holding companies receive the same capital treatment as those purchased from depository institutions, Treasury made the dividends under SBLF non-cumulative. ", "Additionally, given that Tier 1 capital must be perpetual and cannot have a mandatory redemption date, the 10-year repayment period in the Small Business Jobs Act cannot be enforced.", "Treasury addressed this issue by placing the following additional requirements and restrictions on participants who miss dividend payments: ", "the participant's CEO [Chief Executive Office] and CFO [Chief Financial Officer] must provide written notice regarding the rationale of the board of directors (BOD) for not declaring a dividend; no repurchases may be affected and no dividends may be declared on any securities for the applicable quarter and the following three quarters; after four missed payments (consecutive or not), the issuer's BOD must certify in writing that the issuer used best efforts to declare and pay dividends appropriately; after five missed payments (consecutive or not), Treasury may appoint a representative to serve as an observer on the issuer's BOD; and after six missed payments (consecutive or not), Treasury may elect two directors to the issuer's BOD if the liquidation preference is $25 million or more.", "Treasury's OIG agreed that Treasury's equity investment policy is consistent with the legislation and that \"it has reasonably structured the program to incentivize payment of dividends.\" However, it recommended that \"Congress consider whether an amendment to the Small Business Jobs Act and/or waiver from the Collins Amendment to the Dodd-Frank Act is needed to make the repayment of dividends a requirement for exiting the program.\"", "In conclusion, congressional oversight of the SBLF is currently focused on the program's potential long-term costs and effects on small business lending. Underlying those concerns are fundamental disagreements regarding the best way to assist small businesses. Some advocate the provision of additional federal resources to assist small businesses in acquiring capital necessary to start, continue, or expand operations and create jobs. Others worry about the long-term adverse economic effects of spending programs that increase the federal deficit. They advocate business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to assist small businesses and create jobs."], "subsections": [{"section_title": "Appendix. The SBLF's Legislative History", "paragraphs": ["The SBLF's Legislative Origin", "On March 16, 2009, President Obama announced the first SBLF-like proposal. Under that proposal, the Department of the Treasury would have used TARP funds to purchase up to $15\u00a0billion of SBA-guaranteed loans. The purchases were intended to \"immediately unfreeze the secondary market for SBA loans and increase the liquidity of community banks.\" The plan was dropped after it met resistance from lenders. Some lenders objected to TARP's requirement that participating lenders comply with executive compensation limits and issue warrants to the federal government. Smaller, community banks objected to the program's paperwork requirements, such as the provision of a small-business lending plan and quarterly reports.", "In his January 2010 State of the Union address, President Obama proposed the creation of a $30\u00a0billion SBLF to enhance access to credit for small businesses:", "When you talk to small business owners in places like Allentown, Pennsylvania, or Elyria, Ohio, you find out that even though banks on Wall Street are lending again, they're mostly lending to bigger companies. Financing remains difficult for small business owners across the country, even those that are making a profit.", "Tonight, I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat.", "In response to the opposition community lenders had expressed concerning TARP's restrictions in 2009, the Obama Administration proposed that Congress approve legislation authorizing the transfer of up to $30 billion in TARP spending authority to the SBLF and statutorily establish the new program as distinct and independent from TARP and its restrictions. The Administration's legislative proposal was finalized and sent to Congress on May 7, 2010. Representative Barney Frank, then-chair of the House Committee on Financial Services, introduced H.R. 5297 , the Small Business Lending Fund Act of 2010, on May 13, 2010.", "The House Committee on Financial Services held a hearing on H.R. 5297 on May 18, 2010, and passed the bill, as amended to include a State Small Business Credit Initiative, the following day. The House passed the bill, as amended to include a Small Business Early-Stage Investment Program, a Small Business Borrower Assistance Program, and some small business tax reduction provisions, on June 17, 2010.", "The House-Passed Version of the SBLF", "Title I of the House-passed version of H.R. 5297 authorized the Secretary of the Treasury to establish a $30 billion SBLF \"to address the ongoing effects of the financial crisis on small businesses by providing temporary authority to the Secretary of the Treasury to make capital investments in eligible institutions\" with total assets equal to or less than $1 billion or $10 billion (as of the end of the fourth quarter of calendar year 2009) \"in order to increase the availability of credit for small businesses.\" The authority to make capital investments in eligible institutions was limited to one year after enactment.", "Eligible financial institutions having total assets equal to or less than $1 billion as of the end of the fourth quarter of calendar year 2009 could apply to receive a capital investment from the SBLF in an amount not exceeding 5% of risk-weighted assets, as reported in the FDIC call report immediately preceding the date of application. During the fourth quarter of 2009, 7,340 FDIC-insured lending institutions reported having assets amounting to less than $1 billion.", "Eligible financial institutions having total assets equal to or less than $10 billion as of the end of the fourth quarter of calendar year 2009 could apply to receive a capital investment from the fund in an amount not exceeding 3% of risk-weighted assets, as reported in the FDIC call report immediately preceding the date of application. During the fourth quarter of 2009, 565 FDIC-insured lending institutions reported having assets of $1 billion to $10 billion.", "Risk-weighted assets are assets such as cash, loans, investments, and other financial institution assets that have different risks associated with them. FDIC regulations (12 C.F.R. \u00a7567.6) establish that cash and government bonds have a 0% risk-weighting; residential mortgage loans have a 50% risk-weighting; and other types of assets (such as small business loans) have a higher risk-weighting.", "Lending institutions on the FDIC problem bank list or institutions that have been removed from the FDIC problem bank list for less than 90 days were ineligible to participate in the program. Lending institutions could refinance securities issued through the Treasury Capital Purchase Program (CPP) and the Community Development Capital Incentive (CDCI) program under TARP, but only if the institution had not missed more than one dividend payment due under those programs.", "Participating banks would be charged a dividend rate of no more than 5% per annum initially, with reduced rates available if the bank increased its small business lending. For example, during any calendar quarter in the initial two years of the capital investments under the program, the bank's rate would be lowered if it had increased its small business lending compared to the average small business lending it made in the four previous quarters immediately preceding the enactment of the bill, minus some allowable adjustments. A 2.5% to less than 5% increase in small business lending would have lowered the rate to 4%, a 5% to less than 7.5% increase would have lowered the rate to 3%, a 7.5% to less than 10% increase would have lowered the rate to 2%, and an increase of 10% or greater would have lowered the rate to 1%.", " Table A-1 shows the dividend rates associated with small business lending increases for C corporation banks and savings institutions under H.R. 5297 . These rates were subsequently included in the final law. ", "The bill also authorized the Secretary of the Treasury to adjust these dividend rates for S corporations \"to take into account any differential tax treatment of securities issued by such eligible institution.\" Also, Community Development Financial Institutions were to be charged a dividend rate of 2% per annum for eight years, and 9% thereafter.", "SBLF applicants were also required to submit a small business lending plan to the appropriate federal banking agency and, for applicants that are state-chartered banks, to the appropriate state banking regulator. The plan was to describe how the applicant's business strategy and operating goals will allow it to address the needs of small businesses in the areas it serves, as well as a plan to provide linguistically and culturally appropriate outreach, where appropriate. The plan was to be treated as confidential supervisory information. The Secretary of the Treasury was required to consult with the appropriate federal banking agency or, in the case of an eligible institution that is a nondepository community development financial institution, the Community Development Financial Institution Fund, before determining if the eligible institution was to participate in the program.", "The bill specified that the SBLF would be \"established as separate and distinct from the Troubled Asset Relief Program established by the Emergency Economic Stabilization Act of 2008. An institution shall not, by virtue of a capital investment under the Small Business Lending Fund Program, be considered a recipient of the Troubled Asset Relief Program.\"", "The bill also directed that all funds received by the Secretary of the Treasury in connection with purchases made by the SBLF, \"including interest payments, dividend payments, and proceeds from the sale of any financial instrument, shall be paid into the general fund of the Treasury for reduction of the public debt.\"", "The Senate-Passed Version of the SBLF", "Title IV of the Senate-passed version of H.R. 5297 , which later became law, authorized the Secretary of the Treasury to establish a $30 billion SBLF to make capital investments in eligible community banks with total assets equal to or less than $1 billion or $10 billion. There were several differences between the Senate-passed version of H.R. 5297 's SBLF provisions and the SBLF provisions in the House-passed version of H.R. 5297 . Specifically, the ", "House-passed version of H.R. 5297 indicated that eligible institutions may be insured depository institutions that are not controlled by a bank holding company or a savings and loan holding company that is also an eligible institution and is not directly or indirectly controlled by any company or other entity that has total consolidated assets of more than $10 billion, bank holding companies, savings and loan holding companies, community development financial institution loan funds, and small business lending companies, all with total assets of $10 billion or less (as of the end of 2009). The Senate-passed version of H.R. 5297 did not provide eligibility to small business lending companies. House-passed version of H.R. 5297 defined small business lending \"as small business lending as defined by and reported in an eligible institution's quarterly call report, where each loan comprising such lending is made to a small business and is one the following types: (1) commercial and industrial loans; (2) owner-occupied nonfarm, nonresidential real estate loans; (3) loans to finance agricultural production and other loans to farmers; (4) loans secured by farmland; (5) nonowner-occupied commercial real estate loans; and (6) construction, land development and other land loans.\" The Senate-passed version of H.R. 5297 's definition of small business lending did not include nonowner-occupied commercial real estate or construction, land development and other land loans. Senate-passed version of H.R. 5297 had an exclusion provision prohibiting recipient lending institutions from using the funds to issue loans that have an original amount greater than $10 million or that would be made to a business with more than $50 million in revenues. The House-passed version of H.R. 5297 did not contain this provision. House-passed version of H.R. 5297 indicated that the incentives received in the form of reduced dividend rates during the first 4.5-year period following the date on which an eligible institution received a capital investment under the program would be contingent on an increase in the number of loans made. If the number of loans made by the institution did not increase by 2.5% for each 2.5% increase of small business lending, then the rate at which dividends and interest would be payable during the following quarter on preferred stock or other financial instruments issued to the Treasury by the eligible institution would be (i) 5%, if this quarter is within the two-year period following the date on which the eligible institution received the capital investment under the program; or (ii) 7%, if the quarter is after the two-year period. The Senate-passed version of H.R. 5297 did not contain this legislative language. House-passed version of H.R. 5297 included an alternative computation provision that would have allowed eligible institutions to compute their small business lending amounts for incentive purposes as if the definition of their small business lending amounts did not require that the loans comprising such lending be made to small business. This alternative computation would have been allowed if the eligible institution certified that all lending included by the institution for purposes of computing the increase in lending was made to small businesses. The Senate-passed version of H.R. 5297 did not contain this provision. House-passed version of H.R. 5297 indicated that an eligible institution that is a community development loan fund may apply to receive a capital investment from the SBLF in an amount not exceeding 10% of total assets, as reported in the audited financial statements for the fiscal year of the eligible institution that ended in calendar year 2009. The Senate-passed version of H.R. 5297 specifies 5%. House-passed version of H.R. 5297 would have required the Secretary of the Treasury, in consultation with the Community Development Financial Institutions Fund, to develop eligibility criteria to determine the financial ability of a Community Development Loan Fund to participate in the program and repay the investment. It provided a list of recommended eligibility criteria that the Secretary of the Treasury could use for this purpose. The Senate-passed version of H.R. 5297 provided a similar, but mandatory, list of eligibility criteria that must be used for this purpose. House-passed version of H.R. 5297 contained a temporary amortization authority provision which would have allowed an eligible institution to amortize any loss or write-down on a quarterly straight-line basis over a period of time, adjusted to reflect the institution's change in the amount of small business lending relative to the baseline. The Senate-passed version of H.R. 5297 did not contain this provision.", "The Senate's version of H.R. 5297 was agreed to in the Senate on September 16, 2010, after considerable debate and amendment to remove the Small Business Early-Stage Investment Program and Small Business Borrower Assistance Program, revise the SBLF, and add numerous other provisions to assist small businesses, including additional small business tax reduction provisions. The House agreed to the Senate amendments on September 23, 2010, and President Obama signed the bill, retitled the Small Business Jobs Act of 2010 ( P.L. 111-240 ), into law on September 27, 2010."], "subsections": []}]}]}}
{"id": "RL33608", "title": "The United Nations Human Rights Council: Background and Policy Issues", "released_date": "2019-02-26T00:00:00", "summary": ["Over the years, many Members of Congress have demonstrated an ongoing interest in the role and effectiveness of the United Nations (U.N.) Human Rights Council (the Council). The Council is the primary intergovernmental body mandated with addressing human rights on a global level. During the Obama Administration and the first part of the Trump Administration, the United States served three terms as a Council member. In June 2018, Trump Administration officials announced U.S. withdrawal from the Council, noting concerns with the Council's focus on Israel, overall ineffectiveness in addressing human rights issues, and lack of comprehensive reform.", "Background", "The U.N. General Assembly established the Human Rights Council in 2006 to replace the Commission on Human Rights, which was criticized for its apparent ineffectiveness in addressing human rights abuses and for the number of widely perceived human rights abusers that served as its members. Since 2006, many governments and observers have expressed serious concerns with the Council's disproportionate attention to Israel and apparent lack of attention to other pressing human rights situations. In particular, some criticize the inclusion of the \"human rights situation in Palestine and other occupied Arab territories\" (Israel) as a permanent item on the Council's agenda. No other country-specific human rights situation is singled out in this manner. Some are also concerned that countries widely perceived as human rights abusers, such as Saudi Arabia, China, and the Democratic Republic of the Congo, serve as Council members. On the other hand, supporters argue that the Council is an improvement over the previous commission. They contend that the Council's Universal Periodic Review (UPR) process, which aims to evaluate each member state's fulfillment of its human rights obligations, is an effective means for addressing human rights issues in various countries. Many proponents of the Council are encouraged by its increased attention to human rights situations in countries such as Iran, North Korea, and Syria.", "U.S. Policy", "Over the years, U.S. policymakers have debated U.S. participation in and funding of the Human Rights Council. The George W. Bush Administration voted against the General Assembly resolution creating the Council and did not run for membership; it also decided to withhold U.S. funding to the organization in FY2008 under a provision enacted by Congress. Conversely, the Obama Administration supported the overall purpose of the Council and decided that it was better to work from within as a Council member to improve its effectiveness. The Obama Administration was also critical of the Council's focus on Israel, sometimes boycotting debates on the issue. The United States was elected to the Council in 2009 and in 2012. In October 2016, it was elected for a third term, which began in January 2017. The United States remained a member during the Trump Administration until mid-2018, when it announced its withdrawal. The Administration also withheld Council funding in FY2017 and FY2018.", "Some Members of Congress maintain an ongoing interest in the credibility and effectiveness of the Council. Members have been particularly critical of both the Council's focus on Israel and lack of competitive Council elections. Some Members have proposed or enacted legislation calling for U.S. withdrawal; at the same time, others have introduced legislation urging the Council to address specific human rights situations. Most recently, the Consolidated Appropriations Act, 2019 (P.L. 116-6 ), prohibits Council funding unless the Secretary of State determines that U.S. participation is important to the national interest of the United States, and that the Council is taking steps to remove Israel as a permanent agenda item and ensure the integrity of Council elections."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The United Nations (U.N.) Human Rights Council (the Council) is the primary intergovernmental body that addresses human rights worldwide. The United States is not currently a Council member; in June 2018, the Trump Administration announced that the United States would withdraw its membership. Administration officials cited concerns with the Council's disproportionate focus on Israel, ineffectiveness in addressing human rights situations, and lack of reform. ", "Members of the 116 th Congress may continue to consider the Council's role and effectiveness, including what impact, if any, the U.S. withdrawal might have on (1) the Council's efforts to combat human rights and (2) the United States' ability to further its human rights objectives in U.N. fora. Policymakers might also consider the following questions:", "What role, if any, should the Council play in international human rights policy and in addressing specific human rights situations? Is the Council an effective mechanism for addressing human rights worldwide? If not, what reform measures might improve the Council and how can they be achieved? What role, if any, might the United States play in the Council, or in other U.N. human rights mechanisms, moving forward? Should the United States rejoin the Council? If so, under what circumstances? ", "This report provides background on the Council, including the role of the previous U.N. Commission on Human Rights. It discusses the Council's current mandate and structure, as well as Administration policy and congressional actions. Finally, it highlights policy aspects of possible interest to the 116 th Congress, including the debate over U.S. membership, U.S. funding of the Council, alternatives to the Council in U.N. fora, and the Council's focus on Israel. "], "subsections": []}, {"section_title": "Background", "paragraphs": ["The U.N. Commission on Human Rights was the primary intergovernmental policymaking body for human rights issues before it was replaced by the U.N. Human Rights Council in 2006. Created in 1946 as a subsidiary body of the U.N. Economic and Social Council (ECOSOC), the commission's initial mandate was to establish international human rights standards and develop an international bill of rights. During its existence, the commission played a key role in developing a comprehensive body of human rights treaties and declarations, including the Universal Declaration of Human Rights. Over time, its work evolved to address specific human rights violations and complaints, as well as broader human rights issues. It developed a system of special procedures to monitor, analyze, and report on country-specific human rights violations, as well as thematic cross-cutting human rights abuses such as racial discrimination, religious intolerance, and denial of freedom of expression.", "In the late 1990s and early 2000s, controversy developed over the human rights records of some commission members that were widely perceived as systematic abusers of human rights. These instances significantly affected the commission's credibility. Critics, including the United States, claimed that countries used their membership to deflect attention from their own human rights violations by questioning the records of others. Some members were accused of bloc voting and excessive procedural manipulation to prevent debate of their human rights abuses. In 2001, the United States was not elected to the commission, whereas widely perceived human rights violators such as Pakistan, Sudan, and Uganda were elected. In 2005, the collective impact of these and other controversies led U.N. Secretary-General Kofi Annan to propose the idea of a new and smaller Human Rights Council to replace the commission. "], "subsections": []}, {"section_title": "Council Structure and Selected Policy Issues", "paragraphs": ["In 2006, as part of broader U.N. reform efforts, the U.N. General Assembly approved resolution 60/251, which dissolved the U.N. Commission on Human Rights and created the Human Rights Council in its place. This section provides an overview of Council structure and selected policy issues and concerns that have emerged over the years."], "subsections": [{"section_title": "Mandate and Role in the U.N. System", "paragraphs": ["The Council is responsible for \"promoting universal respect for the protection of all human rights and fundamental freedoms for all.\" It aims to prevent and combat human rights violations, including gross and systematic violations, and to make recommendations thereon; it also works to promote and coordinate the mainstreaming of human rights within the U.N. system. As a subsidiary of the General Assembly, it reports directly to the Assembly's 193 members. It receives substantive and technical support from the U.N. Office of the High Commissioner for Human Rights (OHCHR), an office within the U.N. Secretariat currently headed by Michelle Bachelet of Chile. The Council is a political body; each of its members has different human rights standards, domestic considerations, and foreign policy priorities. Its decisions, resolutions, and recommendations are not legally binding."], "subsections": []}, {"section_title": "Membership and Elections", "paragraphs": ["The Council comprises 47 members apportioned by geographic region as follows: 13 from African states; 13 from Asian states; 6 from Eastern European states; 8 from Latin American and Caribbean states; and 7 from Western European and other states ( Table 1 ). Members are elected for a period of three years and may not hold a Council seat for more than two consecutive terms. If a Council member commits \"gross and systematic violations of human rights,\" the General Assembly may suspend membership with a two-thirds vote of members present. All U.N. members are eligible to run for a seat on the Council. Countries are nominated by their regional groups and elected by the General Assembly through secret ballot with an absolute majority required. Since 2006, the Council has held 13 elections, the most recent of which was in October 2018. The next election is scheduled for late 2019.", "A key concern for some critics has been the lack of competitiveness in Council elections. In some elections, countries have run unopposed after regional groups nominated the exact number of countries required to fill Council vacancies. Most recently, members from all five regional groups ran unopposed in the October 2018 election. Many experts contend that such actions limit the number of choices and guarantee the election of nominated members regardless of their human rights records. On the other hand, supporters contend that the Council's election process is an improvement over that of the commission. They emphasize that countries widely viewed as the most egregious human rights abusers, such as Belarus, Sudan, and Syria, were pressured not to run or were defeated in Council elections because of the new membership criteria and process. Many also highlight the General Assembly's March 2011 decision to suspend Libya's membership as an example of improved membership mechanisms. ", "More broadly, some Council observers have expressed concern that the Council's closed ballot elections in the General Assembly may make it easier for countries with questionable human rights records to be elected to the Council. To address this issue, some experts and policymakers, including the Trump Administration, have proposed requiring open ballots in Council elections to hold countries publicly accountable for their votes. "], "subsections": []}, {"section_title": "Meetings and Leadership", "paragraphs": ["The Council is headquartered in Geneva, Switzerland, and meets for three or more sessions per year for a total of 10 or more weeks. It can hold special sessions on specific human rights situations or issues at the request of any Council member with the support of one-third of the Council membership. Since 2006, the Council has held 39 regular sessions and 28 special sessions. Since the Council was established, eight of its special sessions have focused on Israel or the Occupied Territories. (See Appendix A for a list of special sessions.)", "The Council president presides over the election of four vice presidents representing other regional groups in the Council. The president and vice presidents form the Council bureau, which is responsible for all procedural and organizational matters related to the Council. Members elect a president from among bureau members for a one-year term. The current president is Coly Seck of Senegal."], "subsections": []}, {"section_title": "Universal Periodic Review", "paragraphs": ["All Council members and U.N. member states are required to undergo a Universal Periodic Review (UPR) that examines a member's fulfillment of its human rights obligations and commitments. The review is an intergovernmental process that facilitates an interactive dialogue between the country under review and the UPR working group, which is composed of the 47 Council members and chaired by the Council president. Observer states and stakeholders, such as nongovernmental organizations (NGOs), may also attend the meetings and present information. During the first review, the UPR working group makes initial recommendations, with subsequent reviews focusing on the implementation of previous recommendations. The full Council is responsible for addressing any cases of consistent noncooperation with the review. The United States underwent its first UPR in November 2010 and its second in May 2015.", "Overall, many governments, observers, and policymakers support the Council's UPR process. They maintain that it provides an important forum for governments, NGOs, and others to discuss and bring attention to human rights situations in specific countries that may not otherwise receive international attention. Some countries have reportedly made commitments based on the outcome of the UPR process. Many NGOs and human rights groups operating in various countries also reportedly use UPR recommendations as a political and diplomatic tool for achieving human rights. At the same time, some human rights experts have been critical of UPR. Many are concerned that the UPR submissions and statements of governments perceived to be human rights abusers are taken at face value rather than being challenged by other governments. Some also contend that the UPR process gives these same countries a platform to criticize countries that may have generally positive human rights records. Many experts have also expressed concern regarding member states' response to and participation in the UPR process."], "subsections": []}, {"section_title": "Special Procedures", "paragraphs": ["The Council maintains a system of special procedures that are created and renewed by members. Country mandates allow for special rapporteurs to examine and advise on human rights situations in specific countries, including Cambodia, North Korea, and Sudan. Under thematic mandates, special rapporteurs analyze major global human rights issues, such as arbitrary detention, the right to food, and the rights of persons with disabilities. The Council also maintains a complaint procedure for individuals or groups to report human rights abuses in a confidential setting. "], "subsections": []}, {"section_title": "Israel as a Permanent Agenda Item", "paragraphs": ["In June 2007, Council members adopted a resolution to address the Council's working methods. In the resolution, Council members included the \"human rights situation in Palestine and other occupied Arab territories\" as a permanent part of the Council's agenda. No other countries are singled out in this manner. At the time the agenda item was adopted, many U.N. member states and Council observers, including the United States, strongly objected to the Council focusing primarily on human rights violations by Israel. A U.N. spokesperson subsequently noted then-U.N. Secretary-General Ban Ki-moon's \"disappointment\" with the Council's decision to \"single out only one specific regional item, given the range and scope of allegations of human rights violations throughout the world.\" "], "subsections": []}, {"section_title": "Budget", "paragraphs": ["The Human Rights Council is funded primarily through the U.N. regular budget, of which the United States is assessed 22%. Estimated Council funding for the 2018-2019 regular budget biennium is $44.43 million (or $22.2 million per year). The Council also receives extrabudgetary (voluntary) funding to help cover the costs of some of its activities, including staff postings and Council trust funds and mechanisms. For the 2018-2019 biennium, such contributions are estimated at $16.27 million (about $8.13 million per year)."], "subsections": []}]}, {"section_title": "U.S. Policy", "paragraphs": ["Most U.S. policymakers have generally supported the Council's overall purpose and mandate; however, many have expressed concern regarding its effectiveness in addressing human rights issues\u2014leading to ongoing disagreements as to whether or not the United States should be a member of or provide funding for the Council. For example, under President George W. Bush, the United States voted against the Assembly resolution creating the Council and did not run for a seat, arguing that the Council lacked mechanisms for maintaining credible membership. (The George W. Bush Administration also withheld Council funding in FY2008 under a provision enacted by Congress in 2007.) On the other hand, the Obama Administration supported U.S. membership and Council funding, maintaining that it was better to work from within to improve the body; the United States was elected as a Council member in 2009, 2012, and 2016. Under President Obama, the United States consistently opposed the Council actions related to Israel and sought to adopt specific reforms during the Council's five-year review in 2011. Congressional perspectives on the issue have been mixed, with some Members advocating continued U.S. participation and others opposing it. A key concern among many Members of Congress is the Council's focus on Israel. "], "subsections": [{"section_title": "Trump Administration Actions", "paragraphs": ["On June 18, 2018, then-U.S. Permanent Representative to the United Nations Nikki Haley and Secretary of State Michael Pompeo announced that the United States would withdraw from the Human Rights Council, citing concerns about U.S. sovereignty and the Council's disproportionate focus on Israel. In a September 2018 speech to the U.N. General Assembly, the President further stated that the United States \"will not return [to the Council] until real reform is enacted.\" Although Administration officials stated that the United States would fully withdraw from the Council, the United States has continued to participate in some Council activities, including the Universal Periodic Review process. Administration officials have also continued to comment on Council elections and express support for continued reform of the organization. The United States withheld $7.67 million in Council funding in both FY2017 and FY2018 (for a total of $15.3 million over two years) under legislation enacted by Congress.", "Prior to withdrawing from the Council, the Trump Administration had expressed strong reservations regarding U.S. membership. It was particularly concerned with the Council's focus on Israel and lack of attention to other human rights abuses. Ambassador Haley called the Council \"corrupt\" and noted that \"bad actors\" are among its members; at the same time, she also stated that the United States wanted to find \"value and success\" in the body. In June 2017, Haley announced that if the Council failed to change, then the United States \"must pursue the advancement of human rights outside of the Council.\" Haley outlined two key U.S. reform priorities: (1) changing the voting process in the General Assembly from a closed to open ballot so that countries can be held publicly accountable for their votes and (2) removing Israel as a permanent agenda item. "], "subsections": []}, {"section_title": "Congressional Actions", "paragraphs": ["Congress maintains an ongoing interest in the credibility and effectiveness of the Council in the context of human rights promotion, U.N. reform, and concerns about the Council's focus on Israel. Over the years, Members have proposed or enacted legislation expressing support for or opposition to the Council, prohibiting U.S. Council funding, or supporting Council actions related to specific human rights situations. Most recently, Members of the 116 th Congress enacted the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), which requires that none of the funds appropriated by the act be made available for the Council unless the Secretary of State determines and reports to the committees on appropriations that participation in the Council is in the national interest of the United States, and that the Council is taking significant steps to remove Israel as a permanent agenda item and ensure integrity in the election of Council members. (Similar language was included in previous fiscal years' appropriations laws.) P.L. 116-6 also addresses the Council in the context of the human rights situations in Sri Lanka; specifically, it states that funds may be made available to the Sri Lankan government only if the Secretary of State certifies to Congress that the Sri Lankan government is, among other things, supporting a credible justice mechanism in compliance with Human Rights Council resolution 30/1 (October 2015).", "In previous Congresses, proposed stand-alone bills have called for U.S. withdrawal from the Council or required that the United States withhold assessed contributions to the Council through the U.N. regular budget and any voluntary contributions. Specifically, some Members of the 115 th Congress introduced legislation addressing a range of issues, including expressing concern with the Council's focus on Israel, seeking to defund or withdraw from the Council, and calling on the Council to take action on specific human rights situations."], "subsections": []}]}, {"section_title": "Selected Policy Issues", "paragraphs": ["Congressional debate regarding the U.N. Human Rights Council has generally focused on a recurring set of policy issues."], "subsections": [{"section_title": "U.S. Membership", "paragraphs": ["In general, U.S. policymakers have been divided as to whether the United States should serve as a member of the Council. Supporters of U.S. participation contend that the United States should work from within the Council to build coalitions with like-minded countries and steer the Council toward a more balanced approach to addressing human rights situations. Council membership, they argue, places the United States in a position to advocate its human rights policies and priorities. Supporters also maintain that U.S. leadership in the Council has led to several promising Council developments, including increased attention to human rights situations in countries such as Iran, Mali, North Korea, and Sudan, among others. Some have also noted that the number of special sessions addressing Israel has decreased since the United States joined the Council. In addition, some Council supporters are concerned that U.S. withdrawal might lead to a possible leadership gap and countries such as China and Russia could gain increased influence in the Council.", "Opponents contend that U.S. membership provides the Council with undeserved legitimacy. The United States, they suggest, should not be a part of a body that focuses disproportionately on one country (Israel) while ignoring many human rights situations in countries that are widely believed to violate human rights. Critics further maintain that the United States should not serve on a body that would allow human rights abusers to serve as members. Many also suggest that U.S. membership on the Council provides countries with a forum to criticize the United States, particularly during the UPR process."], "subsections": []}, {"section_title": "U.S. Funding", "paragraphs": ["Over the years, policymakers have debated to what extent, if any, the United States should fund the Council. Some Members have proposed that the United States withhold a proportionate share of its assessed contributions, approximately 22%, from the U.N. regular budget, which is used to fund the Council. Most recently, FY2017 through FY2019 State-Foreign Operations acts have placed conditions on U.S. funding to the Council, and the Trump Administration subsequently withheld $7.67 million from U.S. contributions to the U.N. regular budget in both FY2017 and FY2018. Information on FY2019 Council funding is currently unavailable. Legislating to withhold Council funds in this manner is a largely symbolic policy action because assessed contributions finance the entire U.N. regular budget and not specific parts of it. The United States had previously withheld funding from the Council in 2008, when the George W. Bush Administration withheld a proportionate share of U.S. Council funding from the regular budget under a law that required the Secretary of State to certify to Congress that funding the Council was in the best national interest of the United States. "], "subsections": []}, {"section_title": "Alternatives to the Council", "paragraphs": ["Some observers and policymakers have argued that if the United States were to withdraw from the Council, it could pursue its human rights objectives in other U.N. fora. Specifically, some suggest that the United States focus on the activities of the General Assembly's Third Committee, which addresses social, humanitarian, and cultural issues, including human rights. Some also recommend that the United States could increase its support for the U.N. Office of the High Commissioner for Human Rights, as well as the Council's independent experts who address country-specific and functional human rights issues. Other U.S. policymakers have proposed addressing human rights in the U.N. Security Council. In April 2017, U.S. Permanent Representative Haley held the Security Council's first ever thematic debate on human rights issues, where she stated the following:", "The traditional view has been that the Security Council is for maintaining international peace and security, not for human rights. I am here today asserting that the protection of human rights is often deeply intertwined with peace and security. The two things often cannot be separated.", "On the other hand, critics of this approach might argue that some proposed alternatives do not carry the same level of influence as the Human Rights Council, particularly since bodies such as the General Assembly and Security Council do not focus exclusively on human rights issues. Opponents of U.S. withdrawal contend that unlike the proposed alternatives, the Council includes unique mechanisms to address human rights issues, such as the complaint procedure and Universal Periodic Review process. "], "subsections": []}, {"section_title": "Focus on Israel", "paragraphs": ["The Council's ongoing focus on Israel has continued to concern some Members of Congress. In addition to singling out Israel as a permanent part of the Council's agenda, other Council actions\u2014including resolutions, reports, and statements by some Council experts\u2014have generated significant congressional interest for what many view as an apparent bias against Israel. For example, some Members of Congress demonstrated considerable concern with a September 2009 Council report (often referred to as the \"Goldstone Report\" after the main author, Richard Goldstone, an independent expert from South Africa), which found \"evidence of serious violations of international human rights and humanitarian law,\" including possible war crimes, by Israel. The report received further attention in April 2011, when Goldstone stated that the report's conclusion that Israel committed possible war crimes may have been incorrect. ", "In addition, the statements and findings of Richard Falk, the Council's previous Special Rapporteur on the Situation of Human Rights on Palestinian Territories Occupied since 1967 , have drawn considerable criticism from many U.S. policymakers for apparent bias against Israel. More recently, some Members of Congress have expressed alarm regarding a March 2016 Council resolution that, among other things, requested OHCHR to produce a database of all business enterprises that have \"directly and indirectly, enabled, facilitated and profited from the construction and growth of the (Israeli) settlements.\" The United States has opposed this resolution. ", "Some experts suggest that the Council's focus on Israel is at least partially the result of its membership composition. After the first elections, members of the Organization of Islamic Cooperation (OIC) held 17 seats on the Council, accounting for about one-third of the votes needed to call a special session (15 OIC members currently serve on the Council). Some experts contend that blocs such as the African Group and Non-Aligned Movement (NAM), who may at times account for the majority of Council seats, tend to view economic and security issues as more important than human rights violations. ", "Appendix A. Special Sessions of the Human Rights Council"], "subsections": []}]}]}}
{"id": "R45584", "title": "Data Flows, Online Privacy, and Trade Policy", "released_date": "2019-03-11T00:00:00", "summary": ["\"Cross-border data flows\" refers to the movement or transfer of information between computer servers across national borders. Such data flows enable people to transmit information for online communication, track global supply chains, share research, provide cross-border services, and support technological innovation.", "Ensuring open cross-border data flows has been an objective of Congress in recent trade agreements and in broader U.S. international trade policy. The free flow of personal data, however, has raised security and privacy concerns. U.S. trade policy has traditionally sought to balance the need for cross-border data flows, which often include personal data, with online privacy and security. Some stakeholders, including some Members of Congress, believe that U.S. policy should better protect personal data privacy and security, and have introduced legislation to set a national policy. Other policymakers and analysts are concerned about increasing foreign barriers to U.S. digital trade, including data flows.", "Recent incidents of private information being shared or exposed have heightened public awareness of the risks posed to personal data stored online. Consumers' personal online data is valued by organizations for a variety of reasons, such as analyzing marketing information and easing the efficiency of transactions. Concerns are likely to grow as the amount of online data organizations collect and the level of global data flows expand. As Congress assesses policy options, it may further explore the link between cross-border data flows, online privacy, and trade policy; the trade implications of a comprehensive data privacy policy; and the U.S. role in establishing best practices and binding trade rules that seek to balance public policy priorities.", "There is no globally accepted standard or definition of data privacy in the online world, and there are no comprehensive binding multilateral rules specifically about cross-border data flows and privacy. Several international organizations, including the Organisation for Economic Co-operation and Development (OECD), G-20, and Asia-Pacific Economic Cooperation (APEC) forum, have sought to develop best practice guidelines or principles related to privacy and cross-border data flows, although none are legally binding. U.S. and other recent trade agreements are establishing new enforceable trade rules and disciplines.", "Countries vary in their data policies and laws; some focus on limiting access to online information by restricting the flow of data beyond a country's borders, aiming to protect domestic interests (e.g., constituents' privacy). However, these policies can also act as protectionist measures. The EU and China, two top U.S. trading partners, have established prescriptive rules on cross-border data flows and personal data from different perspectives. The EU General Data Protection Regulation (GDPR) is driven by privacy concerns; China is focused on security. Their policies affect U.S. firms seeking to do business in those regions, as well as in other markets that emulate the EU and Chinese approaches. Unlike the EU or China, the United States does not broadly restrict cross-border data flows and has traditionally regulated privacy at a sectoral level to cover data, such as health records.", "U.S. trade policy has sought to balance the goals of consumer privacy, security, and open commerce. The proposed United States-Mexico-Canada Agreement (USMCA) represents the Trump Administration's first attempt to include negotiated trade rules and disciplines on privacy, cross-border data flows, and security in a trade agreement. While the United States and other countries work to define their respective national privacy strategies, many stakeholders seek a more global approach that would allow interoperability between differing national regimes to facilitate and remove discriminatory trade barriers to cross-border data flows; this could offer an opportunity for the United States to lead the global conversation.", "Although Congress has examined issues surrounding online privacy and has considered multiple bills, there is not yet consensus on a comprehensive U.S. online data privacy policy. Congress may weigh in as the Administration seeks to define U.S. policy on data privacy and engages in international negotiations on cross-border data flows."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["Cross-border data flows underlie today's globally connected world and are essential to conducting international trade and commerce. Data flows enable companies to transmit information for online communication, track global supply chains, share research, and provide cross-border services. One study estimates that digital commerce relying on data flows drives 22% of global economic output, and that global GDP will increase by another $2 trillion by 2020 due to advances in emerging technologies. However, while cross-border data flows increase productivity and enable innovation, they also raise concerns around the security and privacy of the information being transmitted. ", "Cross-border data flows are central to trade and trade negotiations as organizations rely on the transmission of information to use cloud services, and to send nonpersonal corporate data as well as personal data to partners, subsidiaries, and customers. U.S. policymakers are considering various policy options to address online privacy, some of which could affect cross-border data flows. For example, new consumer rights to control their personal data may impact how companies can use such data. To enable international data flows and trade, the United States has aimed to eliminate trade barriers and establish enforceable international rules and best practices that allow policymakers to achieve public policy objectives, including promoting online security and privacy. ", "Building consensus for international rules and norms on data flows and privacy has become increasingly important as recent incidents have heightened the public's awareness of the risk of personal data stored online. For example, the 2018 Cambridge Analytica scandal drew attention because the firm reportedly acquired and used data on more than 87 million Facebook accounts in an effort to influence voters in the 2016 U.S. presidential election and the UK referendum on continued European Union (EU) membership (\"Brexit\"). In addition, security concerns have been raised about data breaches, such as those that exposed the personal data of half a million Google users or 500 million Marriot hotel customers.", "Organizations value consumers' personal online data for a variety of reasons. For example, companies may seek to facilitate business transactions, analyze marketing information, detect disease patterns from medical histories, discover fraudulent payments, improve proprietary algorithms, or develop competitive innovations. Some analysts compare data to oil or gold, but unlike those valuable substances, data can be reused, analyzed, shared, and combined with other information; it is not a scarce resource. ", "However, personal data is considered personal private property. Individuals often want to control who accesses their data and how it is used. Experts suggest that data may therefore be considered both a benefit and a liability that organizations hold. Data has value, but an organization takes on risk by collecting personal data; they become responsible for protecting users' privacy and not misusing the information. Data privacy concerns may become more urgent as the amount of online information organizations access and collect, and the level of global data flows, continue to expand.", "Countries vary in their policies and laws on these issues. The United States has traditionally supported open data flows and has regulated privacy at a sectoral level to cover data, such as health records, rather than create a comprehensive policy. U.S. trade policy has sought to balance the goals of consumer privacy, security, and open commerce, including eliminating trade barriers and opening markets. Other countries are developing data privacy policies that affect international trade as some governments or groups seek to limit data flows outside of an organization or across national borders for a number of reasons. Blocking international data flows may impede the ability of a firm to do business or of an individual to conduct a transaction, creating a form of trade protectionism. Research demonstrates not only the economic gains from digital trade and international data flows, but also the real economic costs of restrictions on such flows. ", "For many policymakers, the crux of the issue is: How can governments protect individual privacy in the least trade-restrictive way possible? The question is similar to concerns raised about ensuring cybersecurity while allowing the free flow of data. In recent years, Congress has examined multiple issues related to cross-border data flows and online privacy.", "In the 115 th Congress, congressional committees held hearings on these topics, introduced multiple bills, and conducted oversight over federal laws on related issues such as data breach notification. Members are introducing new bills and holding hearings in the 116 th Congress. Congress may consider the proposed U.S.-Mexico-Canada Agreement (USMCA) and examine the digital trade chapter as an example of how to address the issues through trade agreements."], "subsections": [{"section_title": "Defining Online Privacy", "paragraphs": ["In most circumstances, a consumer expects both privacy and security when conducting an online transaction. However, users' expectations and values may vary and there is no globally accepted standard or definition of data privacy in the online world. In addressing online privacy, Congress may need to define personal data and differentiate between sensitive and nonsensitive personal data. In general, data privacy can be defined by an individual's ability to prevent access to personally identifiable information (PII). ", "According to the U.S. Office of Management and Budget (OMB) guidance to federal agencies, PII refers to ", "information that can be used to distinguish or trace an individual's identity, either alone or when combined with other information that is linked or linkable to a specific individual. ", "Since electronic data can be readily shared and combined, some data not traditionally considered PII may have become more sensitive. For example, the OMB definition does not specifically mention data on location tracking, purchase history, o r preferences, but these digital data points can be tracked by a device such as a mobile phone or laptop that an individual carries or logs into. The EU definition of PII attempts to capture the breadth of data available in the online world: ", "\"personal data\" means any information relating to an identified or identifiable natural person ('data subject'); an identifiable natural person is one who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person.", "Policymakers may consider differentiating between sensitive and nonsensitive personal data. For example, sensitive personal data could include ethnic origin, political or religious affiliation, biometric data, health data, sexual orientation, precise geolocation data, etc."], "subsections": []}, {"section_title": "Cross-Border Data Flows and Online Privacy", "paragraphs": ["\"Cross-border data flows\" refers to the movement or transfer of information between computer servers across national borders. Cross-border data flows are part of, and integral to, digital trade and facilitate the movement of goods, services, people, and finance. A 2017 analysis estimated that global flows of goods, services, finance, and people increased world gross domestic product (GDP) by at least 10% in the past decade, adding $8 trillion between 2005 and 2015. Effective and sustainable digital trade relies on data flows that permit commerce and communication but that also ensure privacy and security, protect intellectual property, and build trust and confidence. Impeding cross-border data flows, including through some privacy regulations, may decrease efficiency and reduce other benefits of digital trade, resulting in the fracturing, or so-called balkanization, of the internet. ", "In addressing online privacy, some policymakers focus on limiting access to online information by restricting the flow of data beyond a country's borders. Such limits may also act as protectionist measures. Online privacy policies may create barriers to digital trade, or damage trust in the underlying digital economy. For example, measures to limit cross-border data flows could", "block companies from using cloud computing to aggregate and analyze global data, or from gaining economies of scale, constrain e-commerce by limiting international online payments, hinder global supply chains seeking to use blockchain to track products or manage supply chains, customs documentation, or electronic payments, impede the trading of crypto-currency, or limit the use of advanced technology like artificial intelligence. ", "According to the World Trade Organization (WTO), one of the most significant overall impacts of the growth of digital technologies is in transforming international trade. Technology can lower the costs of trade, change the types of goods and services that are traded, and may even change the factors defining a country's comparative advantage. The extent of the impact of digital technologies on trade, however, depends in large part on open cross-border data flows. ", "One study of U.S. companies found that data localization rules (i.e., requiring organizations to store data on local servers) were the most-cited digital trade barrier. Some governments advocate privacy or security policies that require data localization and limit cross-border data flows. However, many industry stakeholders argue that blocking cross-border data flows and storing data domestically does not make such data more secure or private. "], "subsections": []}, {"section_title": "Balancing Policy Objectives", "paragraphs": ["Many experts argue that policymakers should limit cross-border data flows in the least trade-restrictive manner possible and also ensure security and privacy. These objectives are not easily reconciled. Moreover, although an overlap exists between data protection and privacy, the two are not equivalent.", "Cybersecurity measures are essential to protect data (e.g., against intrusions or theft by hackers). However, they may not be sufficient to protect privacy. For example, if an organization shares user data with a third party, it may be doing so securely, but not in a way that protects users' privacy or aligns with consumer expectations. Similarly, breach notification requirements are not the same as proactive privacy protection measures. At the same time, policies that protect a consumer's privacy can align with security policies. Laws can limit law enforcement's access to information except in certain circumstances. Keeping user information anonymous may enable firms to analyze data while protecting individuals' identities. ", "Some see an inherent conflict between online security, privacy, and trade; others believe that policies protecting all three can be coherent and consistent. The U.S. government has traditionally sought to balance these objectives. Some stakeholders note, however, that current U.S. policy has been inadequate in protecting online privacy and that change is needed. In some cases in the past, Congress has acted to address privacy concerns in particular sectors; for example, the Health Insurance Portability and Accountability Act (HIPAA) of 1996 led to health privacy standards regulations. The Trump Administration has begun an effort to devise an overarching data privacy policy (see \" Defining the U.S. Approach \") and many Members of Congress are also considering possible approaches. "], "subsections": []}]}, {"section_title": "Multilateral Rules", "paragraphs": ["There are no comprehensive multilateral rules specifically about privacy or cross-border data flows. However, the United States and other countries have begun to address these issues in negotiating new and updated trade agreements, and through international economic forums and organizations such as the Asia-Pacific Economic Cooperation (APEC) forum and the Organisation for Economic Co-operation and Development (OECD)."], "subsections": [{"section_title": "WTO General Agreement on Trade in Services", "paragraphs": ["The World Trade Organization (WTO) General Agreement on Trade in Services (GATS) entered into force in January 1995, predating the current reach of the internet and the explosive growth of global data flows. Many digital products and services that did not exist when the agreements were negotiated are not covered. On the other hand, privacy is explicitly addressed within GATS as an exception to allow countries to take measures that do not conform with the agreement in order to protect \"the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts,\" as long as those measures are not arbitrary or a disguised trade restriction.", "Efforts to update the multilateral agreement and discussions for new digital trade rules under the WTO Electronic Commerce Work Program stalled in 2017. Given the lack of progress on multilateral rules, some have suggested that the WTO should identify best practices or guidelines for digital trade rules that could lay the foundation for a future multilateral WTO agreement. "], "subsections": []}, {"section_title": "WTO Plurilateral Effort", "paragraphs": ["In December 2017, a group of more than 70 WTO members, including the United States, agreed to \"initiate exploratory work together toward future WTO negotiations on trade-related aspects of electronic commerce.\" Overall U.S. objectives include allowing the free flow of information for international trade and cross-border data flows, \"subject to reasonable safeguards like the protection of consumer data when it is exported,\" but do not specifically address privacy.", "The group formally launched the e-commerce initiative in January 2019. The official joint statement lists the United States and EU as participants, and also several developing countries such as China and Brazil. India stated it will not join, preferring to maintain its flexibility to favor domestic firms, limit foreign market access, and raise revenue in the future.", "The statement did not define the scope of any potential agreement. After the meeting, the EU noted data localization measures among the potential new rules to be discussed when negotiations officially launch in March 2019. The U.S. Trade Representative's (USTR's) statement emphasized the need for a high-standard agreement that includes enforceable obligations. Although some experts note that harmonization or mutual recognition is unlikely given divergent legal systems, privacy regimes, and norms of the parties, a common system of rules to allow for cross-border data flows while ensuring privacy protection is reportedly under discussion. "], "subsections": []}]}, {"section_title": "International Guidelines and Best Practices", "paragraphs": ["Personal privacy has received increasing focus with the growth of digital trade encouraging global cooperation. The United States has contributed to developing international guidelines or principles related to privacy and cross-border data flows, although none are legally binding."], "subsections": [{"section_title": "OECD", "paragraphs": ["The OECD 1980 Privacy Guidelines established the first international set of privacy principles emphasizing data protection as a condition for the free flow of personal data across borders. These OECD guidelines were intended to assist countries with drawing up national data privacy policies.", "The guidelines were updated in 2013, focusing on national level implementation based on a risk management approach and improving interoperability between national privacy strategies. The updated guidelines identify specific principles for countries to take into account in establishing national policies. The guidelines are to be reviewed and updated again in 2019."], "subsections": []}, {"section_title": "G-20", "paragraphs": ["Building on the OECD principles and prior G-20 work, the 2018 G-20 Digital Economy Ministerial Declaration identified principles to \"facilitate an inclusive and whole-of-government approach to the use of information and communication technology (ICT) and assist governments in reshaping their capacities and strategies, while respecting the applicable frameworks of different countries, including with regards to privacy and data protection.\" ", "Japan is to host the 2019 G-20 and plans to focus on data governance, offering a forum to address potential global standards on privacy and cross-border data flows."], "subsections": []}, {"section_title": "APEC", "paragraphs": ["APEC is a regional forum for economic cooperation whose initiatives on privacy and cross-border data flows have influenced members' domestic policies. APEC's 21 members, including the United States, agreed to the 2005 APEC Privacy Framework , based on the OECD guidelines. The framework identifies a set of principles and implementation guidelines to provide members with a flexible approach to regulate privacy at a national level. Once the OECD publishes updated guidelines in 2019, APEC members may revise the framework and principles to reflect the updated guidelines."], "subsections": [{"section_title": "APEC CBPR", "paragraphs": ["The APEC Cross-Border Privacy Rules (CBPR), endorsed by APEC Leaders in 2011, is a privacy code of conduct, based on the framework. The CBPR system establishes a set of principles for governments and businesses to follow to protect personal data and allow for cross-border data flows between CBPR members. They aim to balance information privacy with business needs and commercial interests, and facilitate digital trade to spur economic growth in the region. ", "Rather than creating a new set of international regulations, the APEC framework and CBPR system identify best practices that each APEC member can tailor to its domestic legal system and allow for interoperability between countries. The scope and implementation mechanisms under CBPR can vary according to each member country's laws and regulations, providing flexibility for governments to design national privacy approaches. To become a member of the CBPR, a government must ", "1. Be a member of APEC; 2. Establish a regulator with authority to sign the Cross-Border Privacy Enforcement Arrangement (CPEA); 3. Map national laws to the published APEC guidelines, which set baseline standards; and 4. Establish an accountability agent empowered to audit and review a company's practices, and enforce privacy rules and laws.", "If a government joins the CBPR system, every domestic organization is not required to also join; however, becoming a member of CBPR may benefit an organization engaged in international trade by indicating to customers and partners that the organization values and protects data privacy. With certified enrollment in CBPR, organizations can transfer personal information between participating economies (e.g., Mexico to Singapore) and be assured of compliance with the legal regimes in both places. To become a CBPR member, an individual organization must develop and implement data privacy policies consistent with the APEC Privacy Framework and complete a questionnaire. The third party accountability agent is responsible for assessing an organization's application, ongoing monitoring of compliance, investigating any complaints, and taking enforcement actions as necessary. Domestic enforcement authorities in each member country serve as a backstop for dispute resolution if an accountability agent cannot resolve a particular issue. All CBPR member governments must join the CPEA to ensure cooperation and collaboration between the designated national enforcement authorities.", "In the United States, the Federal Trade Commission (FTC) is the regulator and enforcement authority. TrustArc is the only accountability agent, but many expect the U.S. Department of Commerce to recognize additional agents soon. As of this writing, TrustArc lists about 20 U.S. firms that are APEC CBPR certified."], "subsections": []}, {"section_title": "Expanding CBPR Beyond APEC", "paragraphs": ["The CBPR grows in significance as the number of participating economies and organizations increases. The U.S. ambassador to APEC aims to have \"as many APEC economies as possible as soon as possible to join the system.\" Currently, the United States, Japan, Mexico, Canada, South Korea, Singapore, Taiwan, and Australia are CBPR members; the Philippines is in the process of joining. Russia, on the other hand, stated it has no plans to join. Although APEC initiatives are regionally focused, they can provide a basis to scale up to larger global efforts because they reflect economies at different stages of development and include industry participation. Due to its voluntary nature, APEC has served as a testbed for identifying best practices, standards, and principles and for creating frameworks that can lead to binding commitments in plurilateral or larger multilateral agreements (see \" Data Flows and Privacy in U.S. Trade Agreements \"). ", "Expanding CBPR beyond APEC could represent the next step toward consistent international rules and disciplines on data flows and privacy."], "subsections": []}]}]}, {"section_title": "Foreign Government Policies", "paragraphs": ["Countries vary in their privacy policies and laws, reflecting differing priorities, cultures, and legal structures. According to one index, China is the most restrictive digital trade country among 64 countries surveyed, followed by Russia, India, Indonesia, and Vietnam (see Figure 1 ). The United States ranks 22 in the index, less restrictive than Brazil or France but more restrictive than Canada or Australia. The relatively high U.S. score largely reflects financial sector restrictions.", "The \"restrictions on data\" category covers data policies such as privacy and security measures; this category is included in the composite index. Looking specifically at the 64 countries' data policies, Russia is the most restrictive country, followed by Turkey and China. Russia's policies include data localization, retention, and transfer requirements, among others. Turkey's comprehensive Data Protection Law also establishes requirements in these areas. In contrast, the United States ranks 50 for data policy restrictions.", "Two of the top U.S. trading partners (the EU and China) have established their data policies from different perspectives. The EU's policies are driven by privacy concerns; China's policies are based on security justifications. Both are setting examples that other countries, especially those with (or seeking) closer trading ties to China or the EU, are emulating; thus, these policies have affected U.S. firms seeking to do business in those other countries as well."], "subsections": [{"section_title": "EU: Privacy First", "paragraphs": [], "subsections": [{"section_title": "U.S.-EU Privacy Shield", "paragraphs": ["The EU considers the privacy of communications and the protection of personal data to be fundamental human rights, which are codified in EU law. Differences between the United States and EU in their approaches to data protection and data privacy laws have long been sticking points in U.S.-EU economic and security relations. The EU and United States negotiated the U.S.-EU Privacy Shield to allow for the transatlantic transfer of personal data by certified organizations. The bilateral agreement established a voluntary program with commitments and obligations for companies, limitations on law enforcement access, and transparency requirements. U.S. companies that participate in the program must still comply with all of the obligations under EU law (see below) if they process personal data of EU persons. The Privacy Shield is overseen and enforced by EU federal and U.S. agencies, including the Department of Commerce and the FTC, and is reviewed by both parties annually."], "subsections": []}, {"section_title": "EU GDPR", "paragraphs": ["The EU's General Data Protection Regulation (GDPR), effective May 2018, establishes rules for EU members, with extraterritorial implications. The GDPR is a comprehensive privacy regime that builds on previous EU data protection rules. It grants new rights to individuals to control personal data and creates specific new data protection requirements. ", "The GDPR applies to (1) all businesses and organizations with an EU establishment that process (i.e., perform operations on) personal data of individuals in the EU, regardless of where the actual processing of the data takes place; and (2) entities outside the EU that offer goods or services (for payment or for free) to individuals in the EU or monitor the behavior of individuals in the EU. While the GDPR is directly applicable at the EU member state level, individual countries are responsible for establishing some national-level rules and policies as well as enforcement authorities, and some are still in the process of doing so. As a result, some U.S. stakeholders have voiced concerns about a lack of clarity and inadequate country compliance guidelines.", "Many U.S. firms doing business in the EU have made and are making changes to comply with the GDPR, such as revising and clarifying user terms of agreement and asking for explicit consent. For some U.S. companies, it may be easier and cheaper to apply GDPR protections to all users worldwide rather than to maintain different policies for different users. Large firms may have the resources to hire consultants and lawyers to guide implementation and compliance; it may be harder and costlier for small and mid-sized enterprises to comply, possibly deterring them from entering the EU market and creating a de facto trade barrier. ", "Since the GDPR went into effect on May 25, 2018, some U.S. businesses, including some newspaper websites and digital advertising firms, have opted to exit the EU market given the complexities of complying with the GDPR and the threat of potential enforcement actions. European Data Protection Authorities (DPAs) have received a range of GDPR complaints and initiated several GDPR enforcement actions in the fall of 2018. In January 2019, the French DPA issued the largest penalty to date for a data privacy breach. The agency imposed a \u20ac50 million (approximately $57 million) fine on Google for the \"lack of transparency\" regarding how the search engine processes user data. Analysts contend that the high fine may set a benchmark and signal for future enforcement, raising concerns among some firms doing business in the EU. "], "subsections": []}, {"section_title": "Exporting Personal Data Under EU GDPR", "paragraphs": ["Under the GDPR, a few options exist to transfer personal data in or out of the EU and ensure that privacy is maintained.", "1. An organization may use specific Binding Corporate Rules (BCRs) or Model Contracts approved by the EU; 2. An organization may comply with domestic privacy regimes of a country that has obtained a mutual adequacy decision from the EU, which means that the EU has deemed that a country's laws and regulations provide an adequate level of data protection; currently, fewer than 15 jurisdictions are deemed adequate by the EU; or 3. A U.S.-based organization may enroll in the bilateral U.S.-EU Privacy Shield program for transatlantic transfer of personal data.", "The GDPR legal text seems to envision a fourth way, such as a certification scheme to transfer data, that the EU has yet to elaborate. A certification option(s) could create a less burdensome means of compliance for U.S. and other non-EU organizations to transfer personal data to or from the EU in the future. This could be an opportunity for the United States to work with the EU on creating a common system, perhaps even setting a global standard."], "subsections": []}, {"section_title": "Expanding GDPR Beyond the EU", "paragraphs": ["Some experts contend that the GDPR may effectively set new global data privacy standards, since many companies and organizations are striving for GDPR compliance to avoid being shut out of the EU market, fined, or otherwise penalized, or in case other countries introduce rules that imitate the GDPR. ", "The EU is actively promoting the GDPR and some countries, such as Argentina, are imitating all or parts of the GDPR in their own privacy regulatory and legislative efforts or as part of broader trade negotiations with the EU. In general, the EU does not include cross-border data flows or privacy in free trade agreements. However, alongside trade negotiations with Japan, the EU and Japan agreed to recognize each other's data protection systems as \"equivalent,\" allowing for the free flow of data between the EU and Japan and serving as a first step in adopting an adequacy decision. Under the agreement, Japan committed to implementing additional measures to address the handling of the personal data of EU persons on top of Japan's own privacy regime. "], "subsections": []}]}, {"section_title": "China: Security First", "paragraphs": ["China's trade and internet policies reflect state direction and industrial policy, limiting the free flow of information and individual privacy. For example, the requirement for all internet traffic to pass through a national firewall can impede the cross-border transmission of data. China's 2015 counterterrorism law requires telecommunications operators and internet service providers to provide assistance to the government, which could include sharing individuals' data. Citing national security concerns, China's Internet Sovereignty policies, Cybersecurity Law, and Personal Information Security Specification impose strict requirements on companies, such as storing data domestically; limiting the ability to access, use, or transfer data internationally; and mandating security assessments that provide Chinese authorities access to proprietary information.", "In 2014, China announced a new social credit system, a centralized big-data-enabled system for monitoring and shaping businesses' and citizens' behavior that serves as a self-enforcing regulatory mechanism. According to the government, China aims to make individuals more \"sincere\" and \"trustworthy,\" while obtaining reliable data on the creditworthiness of businesses and individuals. An individual's score would determine the level of government services and opportunities he or she could receive. ", "China seeks to have all its citizens subject to the social credit system by 2020, forcing some U.S. businesses who do business in China, such as airlines, to participate. As of 2018, multiple government agencies and financial institutions contribute data to the platform. Pilot projects are underway in some provinces to apply various rewards and punishments in response to data collected. The lack of control an individual may have and the exposure of what some consider private data is controversial among observers in and out of China.", "Some countries, such as Vietnam, are following China's approach in creating cybersecurity policies that limit data flows and require local data storage and possible access by government authorities. Some U.S. firms and other multinational companies are considering exiting the Vietnamese market rather than complying, while some analysts suggest that Vietnam's law may not be in compliance with its recent commitments in trade agreements (see below). India has also cited security as the rationale for its draft Personal Data Protection Bill, which would establish broad data localization requirements and limit cross-border transfer of some data. Unlike the EU, these countries do not specify mechanisms to allow for cross-border data flows. U.S. officials have raised concerns with both Vietnam's and India's localization requirements."], "subsections": []}]}, {"section_title": "Defining the U.S. Approach", "paragraphs": ["The EU's emphasis on privacy protection and China's focus on national security (and the countries that emulate their policies) have led these countries to create data-focused policies that restrict international trade and commerce. The United States has traditionally sought a balanced approach between trade, privacy, and security. ", "U.S. data flow policy priorities are articulated in USTR's Digital 2 Dozen report, first developed under the Obama Administration, and the White House's 2017 National Security Strategy. Both Administrations emphasize the need for protection of privacy, the free flow of data across borders, and an interoperable internet. These documents establish the U.S. position that the free flow of data is not inconsistent with privacy protection. Recent free trade agreements translate the U.S. position into binding international commitments.", "The United States has taken a data-specific approach to regulating data privacy, with laws protecting specific information, such as healthcare or financial data. The FTC enforces consumer protection laws and requires that consumers be notified of and consent to how their data will be used, but the FTC does not have the mandate or resources to enforce broad online privacy protections. There is growing interest among some Members of Congress and in the Administration for a more holistic U.S. data privacy policy."], "subsections": [{"section_title": "Data Flows and Privacy in U.S. Trade Agreements", "paragraphs": ["The United States has played an important role in international discussions on privacy and data flows, such as in the OECD, G-20, and APEC, and has included provisions on these subjects in recent free trade agreements. ", "Congress noted the importance of digital trade and the internet as a trading platform in setting the current U.S. trade negotiating objectives in the June 2015 Trade Promotion Authority (TPA) legislation ( P.L. 114-26 ). TPA includes a specific principal U.S. trade negotiating objective on \"digital trade in goods and services and cross-border data flows.\"\u00a0According to TPA, a trade agreement should ensure that governments \"refrain from implementing trade-related measures that impede digital trade in goods and services, restrict cross-border data flows, or require local storage or processing of data.\" However, TPA also recognizes that sometimes measures are necessary to achieve legitimate policy objectives and aims for such regulations to be the least trade restrictive, nondiscriminatory, and transparent.", "Comprehensive and Progressive Agreement for Trans\u2010Pacific Partnership (CPTPP /TPP-11 ) . The CPTPP is a recently concluded trade agreement among 11 Asia-Pacific countries. The CPTPP is based on the proposed Trans-Pacific Partnership (TPP) agreement negotiated by the Obama Administration and from which President Trump withdrew the United States in January 2017. The electronic commerce chapter in TPP, left unchanged in CPTPP, contains the strongest binding trade agreement commitments on digital trade in force globally. ", "CPTPP includes provisions on cross-border data flows and personal information protection. The text specifically states that the parties \"shall allow the cross-border transfer of information.\" The agreement allows restrictive measures for legitimate public policy purposes if they are not discriminatory or disguised trade barriers. The agreement also prohibits localization requirements for computing facilities, with similar exceptions.", "On privacy, the CPTPP requires parties to have a legal framework in place to protect personal information and to have consumer protection laws that cover online commerce. It encourages interoperability between data privacy regimes and encourages cooperation between consumer protection authorities.", "United States-Mexico-Canada Agreement (USMCA). The released text for the proposed USMCA aims to revise and update the trilateral North American Free Trade Agreement (NAFTA), and illustrates the Trump Administration's approach. ", "The USMCA chapter 19 on digital trade includes articles on consumer protection, personal information protection, cross-border transfer of information by electronic means, and cybersecurity, among other topics. Building on the TPP, the agreement seeks to balance the legitimate objectives by requiring parties to", "have a legal framework to protect personal information, have consumer protection laws for online commercial activities, and not prohibit or restrict cross-border transfer of information.", "While the agreement does not prescribe specific rules or measures that a party must take to protect privacy, it goes further than the TPP (or CPTPP) provisions and provides guidance to inform a country's privacy regime. In particular, the USMCA explicitly refers to the APEC Privacy Framework and OECD Guidelines as relevant and identifies key principles. ", "In general, the proposed USMCA requires that parties not restrict cross-border data flows. Governments are allowed to do so to achieve a legitimate public policy objective (e.g., privacy, national security), provided the measure is not arbitrary, discriminatory, a disguised trade barrier, or greater than necessary to achieve the particular objective. In this way, the parties seek to balance the free flow of data for commerce and communication with protecting privacy and security. The agreement specifically states that the parties may take different legal approaches to protect personal data and also recognizes APEC CBPR as a \"valid mechanism to facilitate cross-border information transfer while protecting personal information.\" ", "The agreement aims to increase cooperation between the United States, Mexico, and Canada on a number of digital trade issues, including exchanging information on personal information protection and enforcement experiences; strengthening collaboration on cybersecurity issues; and promoting the APEC CBPR and global interoperability of national privacy regimes. The governments also commit to encourage private-sector self-regulation models and promote cooperation to enforce privacy laws. While the agreement is only between three parties, the provisions are written broadly to encompass global efforts. Some stakeholders look at USMCA as the basis for potential future trade agreements (such as with the UK). Cross-border data flows will likely be a key issue in future U.S.-EU trade negotiations."], "subsections": []}, {"section_title": "U.S. Federal Data Privacy Policy Efforts", "paragraphs": ["The United States has articulated a clear position on data privacy in trade agreements; however, there is no single U.S. data privacy policy. Nevertheless, the Trump Administration is seeking to define an overarching U.S. policy on data privacy. The Trump Administration's ongoing three-track process is being managed by the Department of Commerce (Commerce) in consultation with the White House. Different bureaus in Commerce are tasked with different aspects of the process, as follows. ", "1. The National Institutes of Standards and Technology (NIST) is developing a privacy framework. Similar to its cybersecurity framework, NIST aims to create a voluntary framework as a tool for organizations to adopt to identify, assess, manage, and communicate about privacy risks. By classifying specific privacy outcomes and potential approaches, the framework is intended to enable organizations to create and adapt privacy strategies, innovate, and manage privacy risks within diverse environments. As part of its transparent approach, NIST is currently consulting with public- and private-sector stakeholders through various forms of outreach to collect feedback and aims to have a draft framework before the end of 2019. 2. The National Telecommunications and Information Administration (NTIA) is developing a set of privacy principles to guide a domestic legal and policy approach. The NITA sought public comment on a proposed set of \"user-centric privacy outcomes\" and a set of high-level goals. 3. The International Trade Administration (ITA) engages with foreign governments and international organizations such as APEC. ITA is focusing on the international interoperability aspects of potential U.S. privacy policy. ITA's role is to ensure that the NIST and NTIA approaches are consistent with U.S. international policy objectives, including TPA, and principles, such as the OECD framework and APEC CBPRs.", "Like the EU and China, Commerce is seeking input through a public- and private-sector consultation process. However, unlike the EU or China, Commerce is expecting to create a voluntary privacy framework. Some observers question whether the Commerce approach is sufficient to result in strong privacy protections if it is not backed up by congressional action and federal legislation. ", "Some suggest that Congress could lead a whole-of-government approach through new federal legislation. In the 115 th Congress, then-House Committee on Energy and Commerce Ranking Member Frank Pallone, Jr. requested that the Government Accountability Office (GAO) examine issues related to federal oversight of internet privacy. The January 2019 GAO report concluded that now is \"an appropriate time for Congress to consider comprehensive Internet privacy.\" GAO stated that \"Congress should consider developing comprehensive legislation on Internet privacy that would enhance consumer protections and provide flexibility to address a rapidly evolving Internet environment. Issues that should be considered include what authorities agencies should have in order to oversee Internet privacy, including appropriate rulemaking authority.\""], "subsections": []}, {"section_title": "Stakeholder Perspectives", "paragraphs": ["Recognizing the importance of protecting open data flows amid growing concerns about online privacy, some stakeholders seek to influence U.S. policies on these issues. In addition to submitting comments in response to NTIA and NIST requests and participating in their forums, multiple organizations issued their own sets of principles or guidelines, some referencing the EU GDPR. The U.S. Chamber of Commerce has also published model privacy legislation for Congress to consider.", "Though they vary in emphasis, these proposals share common themes: ", "transparency on what data is being collected and how it is being used; user control, including the ability to opt out of sharing at least some information and to access and correct personal data collected; data security measures, like data breach notification requirements; and enforcement by the FTC; FTC commissioners also voiced support for the agency as the appropriate federal enforcer for consumer privacy.", "But these groups also differ in some areas, such as whether, or to what extent, to include certain aspects included in the GDPR, such as the right to deletion (so-called \"right to be forgotten\"), requirements for data minimization, or extraterritorial reach. There is not consensus on whether the FTC should be given rule-making authority or additional resources, the enforcement role of states, or if an independent data protection commission is needed similar to EU DPAs. ", "Consistent with U.S. trade policy, industry groups generally point out the need to be flexible, encourage private-sector innovation, establish sector- and technology-neutral rules, create international interoperability between privacy regimes, and facilitate cross-border data flows. Private-sector stakeholders generally want to avoid what they regard as overregulation or high compliance burdens. These groups emphasize risk management and a harm-based approach, which they state keeps an organization's costs proportional to the consumer harm prevented. ", "On the other hand, some consumer advocates point to a need for baseline obligations to protect against discrimination, disinformation, or other harm. In general, consumer advocates believe that any comprehensive federal privacy policy should complement, and not supplant, sector-specific privacy legislation or state-level legislation. "], "subsections": []}]}, {"section_title": "Shaping a Global Approach", "paragraphs": ["Finding a global consensus on how to balance open data flows and privacy protection may be key to maintaining trust in the digital environment and advancing international trade. One study found that over 120 countries have laws related to personal data protection. Divergent national privacy approaches raise the costs of doing business and make it harder for governments to collaborate and share data, whether for scientific research, defense, or law enforcement. ", "A system for global interoperability in a least trade-restrictive and nondiscriminatory way between different national systems could help minimize costs and allow entities in different jurisdictions with varying online privacy regimes to share data via cross-border data flows. Such a system could help avoid fragmentation of the internet between European, Chinese, and American spheres, a danger that some analysts have warned against. For example, Figure 2 suggests the potential of an interoperability system that allows data to flow freely between GDPR- and CBPR-certified economies.", "The OECD guidelines, G-20 principles, APEC CBPR, CPTPP, and USMCA provisions demonstrate an evolving understanding on how to balance cross-border data flows, security, and privacy, to create interoperable policies that can be tailored by countries and avoid fragmentation or the potential exclusion of other countries or regulatory systems. The various trade agreements and initiatives with differing sets of parties may ultimately pave the way for a broader multilateral understanding and eventually lead to more enforceable binding commitments founded on the key WTO principles of nondiscrimination, least trade restrictiveness, and transparency. "], "subsections": []}, {"section_title": "Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "Future U.S. Trade Negotiations and Agreements", "paragraphs": ["Congress may consider the trade-related aspects of data flows in trade agreements, including through close examination of these provisions during the congressional debate and consideration of legislation to implement the proposed USMCA. Issues include whether the agreements make progress in meeting TPA's related trade negotiating objectives and if the provisions strike the appropriate balance among public policy objectives. In addition, USTR's specific trade negotiating objectives for future agreements with the EU and Japan include establishing rules to protect cross-border data flows. These future trade negotiations present challenges and provide opportunities for Congress to further engage USTR on the issues and to conduct oversight. "], "subsections": []}, {"section_title": "Global Approach", "paragraphs": ["Congress may further consider how best to achieve broader consensus on data flows and privacy at the global level. Congress could, for example, conduct additional oversight of current best practice approaches (e.g., OECD, APEC) or ongoing negotiations in the WTO on e-commerce to create rules through plurilateral or multilateral agreements. Congress may consider endorsing certain of these efforts to influence international discussions and the engagement of other countries. Congress may want to examine the potential challenges and implications of building a system of interoperability between APEC, CBPR, and the EU GDPR. ", "Related issues are the extent to which the EU is establishing its system as a potential de facto global approach through its trade agreements and other mechanisms, and how U.S. and other trade agreements may ultimately provide approaches that could be adopted more globally."], "subsections": []}, {"section_title": "Impact on U.S. Trade", "paragraphs": ["Congress may seek to better understand the economic impact of data flows and privacy regimes in other countries related to U.S. access to other markets and the extent to which barriers are being put in place that may discriminate against U.S. exporters. Congress may examine the lack of reciprocal treatment and limits on U.S. firms' access to some foreign markets.", "Congress may consider the implications of not having a comprehensive national data privacy policy. Will the EU GDPR and China cybersecurity policies become the global norms that other countries follow in the absence of a clear U.S. alternative? "], "subsections": []}, {"section_title": "Domestic Policy", "paragraphs": ["Congress may enact comprehensive privacy legislation. In considering such action, Congress could investigate and conduct oversight of the Administration's ongoing privacy efforts, including requesting briefings and updates on the NTIA, NIST, and ITA initiatives to provide congressional feedback and direction and ensure they are aligned with U.S. trade objectives. Congress may also seek input from other federal agencies. ", "In deliberating a comprehensive U.S. policy on personal data privacy, Congress may review the GAO report's findings and conclusions. Congress may also weigh several factors, including:", "How can U.S. trade and domestic policy achieve the appropriate balance to encourage cross-border commerce, economic growth, and innovation, while safeguarding individual privacy and national security? How would a new privacy regime affect U.S. consumers and businesses, including large multinationals who must comply with different national privacy regimes and small- and medium-sized enterprises with limited resources and technology expertise? Do U.S. agencies have the needed tools to accurately assess the size and scope of cross-border data flows to help analyze the economic impact of different privacy policies, or measure the costs of trade barriers? How should an evolving U.S. privacy regime align with U.S. trade policy objectives and evolving international standards, such as the OECD Guidelines for privacy and cybersecurity, and should U.S. policymakers prioritize interoperability with other international privacy frameworks to avoid further fragmentation of global markets and so-called balkanization of the internet?", "In addition, there are a host of other policy considerations not directly related to trade."], "subsections": []}]}]}}
{"id": "R43159", "title": "Institutional Eligibility for Participation in Title IV Student Financial Aid Programs", "released_date": "2019-02-14T00:00:00", "summary": ["Title IV of the Higher Education Act (HEA) authorizes programs that provide financial assistance to students to assist them in obtaining a postsecondary education at certain institutions of higher education (IHEs). These IHEs include public, private nonprofit, and proprietary institutions. For students attending such institutions to be able to receive Title IV assistance, an institution must meet basic criteria, including offering at least one eligible program of education (e.g., programs leading to a degree or preparing a student for gainful employment in a recognized occupation).", "In addition, an IHE must satisfy the program integrity triad, under which it must be", "licensed or otherwise legally authorized to operate in the state in which it is physically located, accredited or preaccredited by an agency recognized for that purpose by the Department of Education (ED), and certified by ED as eligible to participate in Title IV programs.", "These requirements are intended to provide a balance between consumer protection, quality assurance, and oversight and compliance in postsecondary education providers participating in Title IV student aid programs.", "An IHE must also fulfill a variety of other related requirements, including those that relate to institutional recruiting practices, student policies and procedures, and the administration of the Title IV student aid programs.", "Finally, additional criteria may apply to an institution depending on its control or the type of educational programs it offers. For example, proprietary institutions must meet HEA requirements that are otherwise inapplicable to public and private nonprofit institutions, including deriving at least 10% of their revenues from non-Title IV funds (also known as the 90/10 rule). While an institution is ineligible to participate in Title IV programs if more than 50% of its courses are offered by correspondence or if 50% or more of its students are enrolled in correspondence courses.", "This report first describes the types of institutions eligible to participate in Title IV programs and discusses the program integrity triad. It then discusses additional issues related to institutional eligibility, including program participations agreements, required campus safety policies and crime reporting, and distance and correspondence education."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["Title IV of the Higher Education Act (HEA; P.L. 89-329), as amended, authorizes programs that provide financial assistance to students to attend certain institutions of higher education (IHEs). In academic year (AY) 2016-2017, 6,760 institutions were classified as Title IV eligible IHEs. Of these IHEs eligible to participate in Title IV programs, approximately 29.4% were public institutions, 27.8% were private nonprofit institutions, and 42.9% were proprietary (or private, for-profit) institutions. It is estimated that $122.5 billion was made available to students through Title IV federal student aid in FY2017. ", "To be able to receive Title IV assistance, students must attend an institution that is eligible to participate in the Title IV programs. IHEs must meet a variety of requirements to participate in the Title IV programs. First, an IHE must meet basic eligibility criteria, including offering at least one eligible program of education. ", "In addition, an IHE must satisfy the program integrity triad, under which it must be", "legally authorized to provide a postsecondary education in the state in which it is located; accredited or preaccredited by an agency recognized by the Department of Education (ED) for such purposes, and certified by ED as eligible to participate in Title IV programs.", "The state authorization and accreditation components of the triad were developed independently to address the issues of quality assurance and consumer protection, and the federal government (ED specifically) generally relies on states and accrediting agencies to determine standards of educational program quality. The federal government's only direct role in determining Title IV eligibility is through the process of certification of eligibility and ensuring IHEs meet some additional Title IV requirements. Certification, as a component of the program integrity triad, focuses on an institution's fiscal responsibility and administrative capacity to administer Title IV funds.", "An IHE must fulfill a variety of other related requirements, including those that relate to institutional recruiting practices, student policies and procedures, and Title IV program administration. Finally, additional criteria may apply to an institution depending on its control or the type of educational programs it offers. For instance, proprietary institutions must derive at least 10% of their revenues from non-Title IV funds (also known as the 90/10 rule). Failure to fulfill some of these requirements does not necessarily end an IHE's participation in the Title IV programs, but may lead to additional oversight from ED and/or restrictions placed an IHE's Title IV participation. ", "This report provides a general overview of HEA provisions that affect a postsecondary institution's eligibility for participation in Title IV student aid programs. It first describes general eligibility criteria at both the institutional and programmatic level and then, in more detail, the program integrity triad. Next, it discusses several issues that are closely related to institutional eligibility: Program Participation Agreements, campus safety policies and crime reporting required under the Clery Act, the return of Title IV funds, and distance education."], "subsections": []}, {"section_title": "Eligibility Criteria", "paragraphs": ["To be eligible to participate in HEA Title IV student aid programs, institutions must meet several criteria. These criteria include requirements related to programs offered by the institutions, student enrollment, institutional operations, and the length of academic programs. This section discusses the definition of an eligible IHE for the purposes of Title IV participation and program eligibility requirements."], "subsections": [{"section_title": "Eligible Institutions", "paragraphs": ["The HEA contains two definitions of institutions of higher education. Section 101 provides a general definition of IHE that applies to institutional eligibility for participation in HEA programs other than Title IV programs. The Section 102 definition of IHE is used only to determine institutional eligibility to participate in HEA Title IV programs. "], "subsections": [{"section_title": "Section 101 Institutions", "paragraphs": ["Section 101 of the HEA provides a general definition of IHE. This definition applies to institutional participation in non-Title IV HEA programs. Section 101 IHEs can be public or private nonprofit educational institutions. Section 101 specifies criteria both public and private nonprofit educational institutions must meet to be considered IHEs."], "subsections": [{"section_title": "Public Institutions of Higher Education", "paragraphs": ["Neither the HEA nor regulations specifically define a public institution of higher education. However, in general, public institutions can be described as those whose educational programs are operated by states or other government entities and are primarily supported by public funds."], "subsections": []}, {"section_title": "Private Nonprofit Institutions of Higher Education", "paragraphs": ["Regulations define a nonprofit IHE as one that (1) is owned and operated by a nonprofit corporation or association, with no part of the corporation's or association's net earnings benefiting a private shareholder or individual, (2) is determined by the Internal Revenue Service to be a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code (IRC), and (3) is legally authorized to operate as a nonprofit organization by each state in which it is physically located."], "subsections": []}, {"section_title": "Section 101 Institution of Higher Education", "paragraphs": ["To be considered a Section 101 IHE, public and private nonprofit educational institutions must", "admit as regular students only individuals with a high school diploma or its equivalent, individuals beyond the age of compulsory school attendance, or individuals who are dually or concurrently enrolled in both the institution and in a secondary school; be legally authorized to provide a postsecondary education within the state in which they are located; offer a bachelor's degree, provide a program of at least two-years that is acceptable for full credit toward a bachelor's degree, award a degree that is accepted for admission to a graduate or professional program, or provide a training program of at least a one-year that prepares students for gainful employment in a recognized occupation; and be accredited or preaccredited by an accrediting agency recognized by ED to grant accreditation or preaccreditation status"], "subsections": []}]}, {"section_title": "Section 102 Institutions", "paragraphs": ["Section 102 of the HEA defines IHE only for the purposes of Title IV participation. The Section 102 definition includes all institutions included in the Section 101 definition (i.e., public and private nonprofit IHEs) and also includes proprietary institutions, postsecondary vocational institutions, and foreign institutions that have been approved by ED. Section 102 specifies that proprietary and postsecondary vocational institutions must meet many of the same Section 101 requirements that are applicable to public and private nonprofit institutions. In addition, Section 102 specifies other criteria that all types of educational institutions must meet to be considered Title IV eligible IHEs."], "subsections": [{"section_title": "Proprietary Institutions of Higher Education", "paragraphs": ["HEA Section 102 specifies that a proprietary IHEs is an institution that is neither a public nor a private nonprofit institution. In addition to the basic Title IV eligibility criteria that all IHEs must meet (e.g., state authorization, accreditation by an ED-recognized accrediting agency), proprietary IHEs must meet additional criteria to be considered Title IV eligible. Specifically, a proprietary IHE must (1) provide an eligible program of training \"to prepare students for gainful employment in a recognized occupation\" or (2) provide a program leading to a baccalaureate degree in liberal arts that has been continuously accredited by a regional accrediting agency since October 1, 2007, and have provided the program continuously since January 1, 2009. Additionally, it must have been legally authorized to provide (and have continuously been providing) the same or a substantially similar educational program for at least two consecutive years. "], "subsections": []}, {"section_title": "Postsecondary Vocational Institutions", "paragraphs": ["HEA Section 102 defines a postsecondary vocational institution as a public or private nonprofit institution that provides an eligible program of training \"to prepare students for gainful employment in a recognized occupation,\" and has been legally authorized to provide (and has continuously been providing) the same or a substantially similar educational program for at least two consecutive years. It is possible for a public or private nonprofit IHE that offers a degree program (e.g., an associate's or bachelor's degree) to also qualify as a postsecondary vocational institution by offering programs that are less than one academic year and that lead to a nondegree recognized credential such as a certificate."], "subsections": []}, {"section_title": "Foreign Institutions", "paragraphs": ["Institutional participation in Title IV student aid programs allows students from the United States to borrow through the federal Direct Loan program to attend postsecondary institutions located outside of the United States. In general, a foreign institution is eligible to participate in the Direct Loan program if it is comparable to an eligible IHE (as defined in HEA Section 101) within the United States, is a public or private nonprofit institution, and has been approved by ED. Foreign graduate medical schools, veterinary schools, and nursing schools are also eligible to participate in Title IV student aid programs, but must meet additional requirements. Freestanding foreign graduate medical schools, veterinary schools, and nursing schools may be proprietary institutions. Additional requirements for foreign institutions to participate in Title IV student aid programs are beyond the scope of this report and, generally, will not be discussed hereinafter."], "subsections": []}, {"section_title": "Section 102 Institution of Higher Education", "paragraphs": ["The definitions of proprietary institutions and postsecondary vocational institutions contained in Section 102 have several overlapping components with the Section 101 definition of IHE. For instance, both proprietary and postsecondary vocational institutions must (1) admit as regular students only those individuals with a high school diploma or its equivalent, individuals beyond the age of compulsory school attendance, or individuals who are dually or concurrently enrolled in both the institution and in a secondary school; (2) be legally authorized to provide a postsecondary education by the state in which they are located; and (3) be accredited or preaccredited by an accrediting agency recognized by ED to grant such statuses.", "In addition, all types of institutions (including public and private nonprofit institutions) must meet requirements related to the course of study offered at the institution and student enrollment to be considered Title IV eligible under Section 102. In general, any type of institution is considered ineligible to participate in Title IV programs if more than 25% of its enrolled students are incarcerated, or if more than 50% of the its enrolled students do not have a secondary school diploma or equivalent and the institution does not provide a two-year associate's degree or a four-year bachelor's degree. Also, in general, an institution is ineligible if more than 50% of the courses offered are correspondence courses or if 50% or more of its students are enrolled in correspondence courses. These \"50% rules\" are discussed in more detail in the distance education section of this report. Finally, an institution is considered ineligible to participate in Title IV programs if the institution has filed for bankruptcy or the institution (or its owner or chief executive officer) has been convicted of or pled no contest or guilty to a crime involving the use of Title IV funds. ", "While the above-described criteria generally apply to most types of Section 102 institutions, specific criteria apply to individual types of Section 102 institutions. The following sections provide information on Title IV eligibility criteria that apply to those additional types of IHEs not specified in Section 101, but specified in Section 102: proprietary IHEs, postsecondary vocational institutions, and foreign institutions.", "Hereinafter, unless otherwise noted, the term \"institution of high education (IHE)\" only refers to Section 102 institutions. "], "subsections": []}]}]}, {"section_title": "Eligible Programs", "paragraphs": ["To qualify as an eligible institution for Title IV participation, an institution must offer at least one eligible program, but overall institutional eligibility does not necessarily extend to all programs offered by the institution. Not all of an institution's programs must meet program eligibility requirements for an IHE to participate in Title IV, but, in general, students enrolled solely in ineligible programs cannot receive Title IV student aid. To be Title IV eligible, a program must lead to a degree (e.g., an associate's or bachelor's degree) or certificate or prepare students for gainful employment in a recognized occupation. ", "Before awarding Title IV aid to students, an IHE must determine that the program in which a student is participating is Title IV eligible, ensure that the program is included in its accreditation notice, and ensure that the the IHE is authorized by the appropriate state to offer the program.", "In addition to the general criteria for all types of institutions, a program must meet specific eligibility requirements depending on whether the institution at which it is offered is a public or private nonprofit IHE, a proprietary IHE, or a postsecondary vocational IHE."], "subsections": [{"section_title": "Public and Private Nonprofit Institutions of Higher Education", "paragraphs": ["At a public or private nonprofit IHE, the following types of programs are Title IV eligible: (1) programs that lead to an associate's, bachelor's, professional, or graduate degree; (2) transfer programs that are at least two academic years in length and for which the institution does not award a credential but that are acceptable for full credit toward a bachelor's degree; (3) programs that lead to a certificate or other recognized nondegree credential, that prepare students for gainful employment in a recognized occupation, and that are at least one academic year in length; (4) certificate or diploma training programs that are less than one year in length, if the institution also meets the definition of a postsecondary vocational institution; and (5) programs consisting of courses required for elementary or secondary teacher certification in the state in which the student intends to teach.", "For all of these, an academic year must also require an undergraduate course of study to contain an amount of instructional time in which a full-time student is expected to complete at least 24 semester or trimester credit hours, 36 quarter credit hours, or 900 clock hours."], "subsections": []}, {"section_title": "Proprietary and Postsecondary Vocational Institutions", "paragraphs": ["In general, eligible programs at proprietary and postsecondary vocational institutions must meet a specified number of weeks of instruction and must provide training that prepares students for gainful employment in a recognized occupation (described below). At proprietary and postsecondary vocational institutions, the following types of programs are Title IV eligible:", "undergraduate programs that provide at least 600 clock hours, 16 semester or trimester hours, or 24 quarter hours of instruction offered over a minimum of at least 15 weeks ; such programs may admit, as regular students, individuals who have not completed the equivalent of an associate's degree; programs that provide at least 300 clock hours, 8 semester hours, or 12 quarter hours of instruction offered over a minimum of 10 weeks; such programs must be graduate or professional programs or must admit as regular students only individuals who have completed the equivalent of an associate's degree; short-term programs that provide between 300 and 600 clock hours of instruction over a minimum of 10 weeks ; such programs must have been in existence for at least one year, have verified completion and placement rates of at least 70%, may not last more than 50% longer than the minimum training period required by the state or federal agency for the occupation for which the program is being offered, and must admit as regular students some individuals who have not completed the equivalent of an associate's degree; and programs offered by accredited proprietary IHEs that lead to a bachelor's degree in liberal arts; the school must have been continuously accredited by an ED-recognized accrediting agency since at least October 1, 2007 and must have provided the program continuously since January 1, 2009. "], "subsections": []}, {"section_title": "Programs Required to Prepare Students for Gainful Employment", "paragraphs": ["Most nondegree programs offered by public and private nonprofit IHEs must prepare students for \"gainful employment in a recognized occupation.\" Gainful employment requirements also apply to almost all programs offered by proprietary and postsecondary vocational institutions, regardless of whether they lead to a degree."], "subsections": [{"section_title": "Status of Gainful Employment Regulations", "paragraphs": ["In response to concerns about the quality of programs that prepare students for gainful employment and the level of student debt assumed by individuals who attend these programs, ED issued final rules on gainful employment on October 31, 2014. The regulations require that educational programs subject to gainful employment requirements offered by IHEs meet minimum performance standards to be considered offering education that prepares students for gainful employment in a recognized occupation. They also require IHEs to disclose specified information about each of its gainful employment programs to enrolled or prospective students. Finally, the gainful employment rules require IHEs to report information to ED necessary to calculate the debt-to-earnings ratios.", "Although the gainful employment regulations became effective July 1, 2015, various aspects of them have not yet been fully implemented or have been delayed in implementation. For example, ED delayed until July 1, 2019, some portions of the rule relating to certain disclosure requirements. Additionally, to enable ED to calculate whether an IHE's programs meet the minimum performance standards (discussed below), regulations specify that ED obtains data from the Social Security Administration (SSA). However, a memorandum of understanding relating to data sharing between ED and SSA lapsed in 2018.", "In August 2018, ED issued a Notice of Proposed Rulemaking that proposes to rescind the gainful employment rules in their entirety. Based on HEA requirements relating to the implementation date for Title IV regulations, the earliest possible date the proposed rules could go into effect is July 1, 2020."], "subsections": []}]}, {"section_title": "Current Gainful Employment Regulations", "paragraphs": ["The gainful employment regulations establish a framework within which educational programs offered by IHEs must meet minimum performance standards to be considered offering education that prepares students for gainful employment in a recognized occupation. Under the framework, ED annually calculates two debt-to-earnings (D/E) rates for each gainful employment program offered by an IHE, the discretionary income rate and the annual earnings rate. These rates measure a gainful employment program's completers' debt (their annual loan payments) as a percentage of their post-completion earnings. Using these measures, institutions will be determined to be \"passing,\" \"in the zone,\" or \"failing.\" Thresholds for each category are as follows:", "Passing : Programs whose completers have annual loan payments less than or equal to 8% of annual earnings (the annual earnings rate) or less than or equal to 20% of discretionary income (the discretionary income rate). In the zone: Programs whose completers have annual loan payments greater than 8% but less than or equal to 12% of annual earnings or greater than 20% but less than or equal to 30% of discretionary income. Failing : Programs whose completers have annual loan payments greater than 12% of annual earnings and greater than 30% of discretionary income.", "Programs that are failing in two out of any three consecutive years or that are in the zone for four consecutive years will be ineligible for Title IV participation for three years.", "The gainful employment rules also contain several disclosure requirements. For any year in which ED notifies an IHE that a gainful employment program could become ineligible in the next year based on its debt-to-earnings ratios (i.e., one year of failure or three years in the zone), the IHE must provide a warning to current and prospective students that the program does not meet the gainful employment standards and that if the program does not meet the gainful employment standards in the future, students would not be able to receive Title IV aid.", "In addition, an IHE must disclose specified information about each of its gainful employment programs to enrolled and prospective students. Information to be disclosed includes the following:", "the primary occupation that the program prepares students to enter; whether the program satisfies applicable educational prerequisites for professional licensure or certification in each state within the institution's metropolitan statistical area (MSA); program length and number of clock or credit hours, or equivalent, in the program; the program's completion rates for full-time and less-than-full-time students and the program's withdrawal rates; Federal Family Education Loan (FFEL) and Direct Loan program loan repayment rates for all students who entered repayment on Title IV loans and who enrolled in the program, for those who withdrew from the program, and for those who completed the program; the program tuition, fees, and additional costs incurred by a student who completes the program within the program's published length; the job placement rate for the program, if otherwise required by the institution's accrediting agency or state; the percentage of enrolled students who received Title IV or private loans for enrollment in the program; the median loan debt and mean or median earnings of students who completed the program, of students who withdrew from the program, and of both groups combined; the program cohort default rate; and the annual earnings rate for the program.", "Institutions must also certify that each of their gainful employment programs is included in the IHE's accreditation, meets any state or federal entity accreditation requirements, and meets any state licensing and certification requirements for the state in which the IHE is located. "], "subsections": []}]}]}, {"section_title": "Program Integrity Triad", "paragraphs": ["Title IV of the HEA sets forth three requirements to ensure program integrity in postsecondary education, known as the program integrity triad. The three requirements are state authorization, accreditation by an accrediting agency recognized by ED, and eligibility and certification by ED. This triad is intended to provide a balance in the Title IV eligibility requirements. The states' role is to provide consumer protection, the accrediting agencies' role is to provide quality assurance, and the federal government's role is to provide oversight of compliance to ensure administrative and fiscal integrity of Title IV programs at IHEs. "], "subsections": [{"section_title": "State Authorization", "paragraphs": ["The state role in the program integrity triad is to provide legal authority for an institution to operate a postsecondary educational program in the state in which it is physically located. ", "There are two basic requirements for an IHE to be considered legally authorized by a state:", "1. the state must authorize the IHE by name to operate postsecondary educational programs, and 2. the state must have in place a process to review and address complaints concerning IHEs, including enforcing applicable state law.", "An IHE can be authorized by name through a state charter, statute, constitutional provision, or other action by an appropriate state agency (e.g., authorization to conduct business or operate as a nonprofit organization). Additionally, an institution must also comply with any applicable state approval or licensure requirements.", "The state agency responsible for the authorization of postsecondary institutions must also perform three additional functions:", "upon request, provide the Secretary with information about the process it uses to authorize institutions to operate within its borders; notify the Secretary if it has evidence to believe that an institution within its borders has committed fraud in the administration of Title IV programs; and notify the Secretary if it revokes an institution's authorization to operate.", "On December 19, 2016, ED issued final regulations related to state authorization for IHEs offering postsecondary distance or correspondence education (discussed later in this report). The regulations would require an IHE offering postsecondary distance or correspondence education to students residing in a state in which the IHE is not physically located to meet any requirements within the student's state of residence. Under the rules, an IHE may meet this requirement if it participates in a state authorization reciprocity agreement. These regulations were scheduled to become effective July 1, 2018. However, on July 3, 2018 (and effective June 29, 2018), the Secretary of Education (Secretary) issued a final rule delaying the implementation of these requirements until July 1, 2020."], "subsections": []}, {"section_title": "Accreditation", "paragraphs": ["The second component of the program integrity triad is accreditation by an ED-recognized accrediting agency or association. In higher education, accreditation is intended to help ensure an acceptable level of quality within IHEs. For Title IV purposes, an institution must be accredited or preaccredited by an ED-recognized accrediting agency. Each accrediting agency must meet HEA-specified standards to be recognized by ED."], "subsections": [{"section_title": "Background", "paragraphs": ["From its inception, accreditation has been a voluntary process. It developed with the formation of associations that distinguished between IHEs that merited the designation of college or university from those that did not. Since then, accreditation has been used as a form of \"external quality review ... to scrutinize colleges, universities and programs for quality assurance and quality improvement.\" ", "In 1952, shortly after the passage of the Veterans' Readjustment Act of 1952 (the Korean GI Bill; P.L. 82-550), the federal government began formally recognizing accrediting agencies. This was done as one means to assess higher education quality and link it to determining which institutions would qualify to receive federal aid under the Korean GI Bill. Rather than creating a centralized authority to assess quality, the federal government chose to rely in part on the existing expertise of accrediting agencies. Today, ED's formal recognition of accrediting agencies is important, because an IHE's Title IV eligibility is conditioned upon accreditation from an ED-recognized accreditation organization.", "As part of the accreditation system's development, three types of accrediting agencies have emerged:", "Regional accrediting agencies. These operate in six regions of the United States, with each agency concentrating on a specific region. Generally, these accredit entire public and private nonprofit degree-granting IHEs. National accrediting agencies. These operate across the United States and also accredit entire institutions. There are two types of national accrediting agencies: faith-based agencies that accredit religiously affiliated or doctrinally based institutions, which are typically private nonprofit degree-granting institutions, and career-related agencies that typically accredit proprietary, career-based, degree- and nondegree-granting institutions. Specialized or programmatic accrediting agencies. These operate throughout the United States and accredit individual educational programs (e.g., law) and single-purpose institutions (e.g., freestanding medical schools). Specific educational programs are often accredited by a specialized accrediting agency, and the institution at which the program is offered is accredited by a regional or national accrediting organization. "], "subsections": []}, {"section_title": "Accreditation Process", "paragraphs": ["Generally, an institution must be accredited by an ED-recognized accrediting agency that has the authority to cover all of the institution's programs. Alternatively, a public or private nonprofit IHE may be preaccredited by an agency recognized by ED to grant such preaccreditation, and a public postsecondary vocational institution may be accredited by a state agency that ED determines is a reliable authority. Proprietary institutions must be accredited by an ED-recognized accrediting agency.", "The accreditation process begins with an institution or program requesting accreditation. Institutional accreditation is cyclical, with a cycle ranging from every few years up to 10 years. Initial accreditation does not guarantee subsequent renewal of the accredited status. ", "Typically, an institution seeking accreditation will first perform a self-assessment to determine whether its operations and performance meet the basic standards required by the relevant accrediting agency. Next, an outside group of higher education peers (e.g., faculty and administrators) and members of the public conduct an on-site visit at the institution during which the team determines whether the accrediting organization's standards are being met. Based on the results of the self-assessment and site visit, the accrediting organization determines whether accreditation will be awarded, renewed, denied, or provisionally awarded to an\u00a0institution.", "Educational programs within institutions can be accredited by programmatic accrediting agencies; however, a program is not required to be accredited by a programmatic accrediting agency for Title IV purposes. Rather, it only needs to be covered by the IHE's primary accrediting agency. Frequently, programmatic accrediting agencies review a specific program within an IHE that is accredited by a regional or national accrediting agency.", "An institution that has had its accreditation revoked or terminated for cause cannot be recertified as an IHE eligible to participate in Title IV programs for 24 months following the loss of accreditation, unless the accrediting agency rescinds the loss. The same rules apply if an institution voluntarily withdraws its accreditation. The Secretary can, however, continue the eligibility of a religious institution whose loss of accreditation, whether voluntary or not, is related to its religious mission and not to the HEA accreditation standards. If an institution's accrediting agency loses its recognition from ED, it has up to 18 months to obtain accreditation from another ED-recognized agency."], "subsections": []}, {"section_title": "Federal Recognition of Accrediting Agencies", "paragraphs": ["Although the federal government does not set specific standards for institutional or programmatic accreditation, generally, it does require that institutions be accredited or preaccredited by a recognized accrediting organization to be eligible for Title IV participation. ED's primary role in accreditation is to recognize an accrediting agency as a \"reliable authority regarding the quality of education or training offered\" at IHEs through the processes and conditions set forth in the HEA and federal regulations.", "For ED recognition, Section 496 of the HEA specifically requires that an accrediting agency be a state, regional, or national agency that demonstrates the ability to operate as an accrediting agency within the relevant state or region or nationally. Additionally, agencies must meet one of the following criteria:", "IHE membership with the agency must be voluntary, and one of the primary purposes of the agency must be accreditation of the IHEs. The agency must be a state agency approved by the Secretary as an accrediting agency on or before October 1, 1991. The agency must either conduct accreditation through a voluntary membership of individuals in a profession, or it must have as its primary purpose the accreditation of programs within institutions that have already been accredited by another ED-recognized agency.", "Agencies that meet the first or third criterion listed above must also be administratively and financially separate and independent of any related trade association or membership organization. For an agency that meets the third criterion and that was ED-recognized on or before October 1, 1991, the Secretary may waive the requirement that the agency be administratively and financially independent of any related organization, but only if the agency can show that the existing relationship with the related organization has not compromised its independence in the accreditation process.", "All types of accrediting agencies must show that they consistently apply and enforce standards that ensure that the education programs, training, or courses of study offered by an IHE are of sufficient quality to meet the stated objectives for which the programs, training, or courses are offered. The standards used by the accrediting agencies must assess student achievement in relation to the institution's mission; this may include course completion, job placement rates, and passage rates of state licensing exams. Agencies must also consider curricula, faculty, facilities, fiscal and administrative capacity, student support services, and admissions practices.", "Accrediting agencies must also meet requirements that focus on the review of an institution's operating procedures, including reviewing an institution's policies and procedures for determining credit hours, the application of those policies and procedures to programs and coursework, and reviewing any newly established branch campuses. They must also perform regular on-site visits that focus on the quality of education and program effectiveness."], "subsections": []}]}, {"section_title": "Eligibility and Certification by ED", "paragraphs": ["The final component of the program integrity triad is eligibility and certification by ED. Here, ED is responsible for verifying an institution's legal authority to operate within a state and its accreditation status. ED also evaluates an institution's financial responsibility and administrative capability to administer Title IV student aid programs. An institution can be certified to participate in Title IV for up to six years before applying for recertification."], "subsections": [{"section_title": "Financial Responsibility", "paragraphs": ["ED determines an IHE's financial responsibility based on its ability to provide the services described in its official publications, to administer the Title IV programs in which it participates, and to meet all of its financial obligations. A public IHE is deemed financially responsible if its debts and liabilities are backed by the full faith and credit of the state or another government entity. A proprietary or private nonprofit IHE is financially responsible if it meets specific financial ratios (e.g., equity ratio) established by ED, has sufficient cash reserves to make any required refunds (including the return of Title IV funds), is meeting all of its financial obligations, and is current on its debt payments. ", "Even if an institution meets the above requirements, ED does not consider it financially responsible if the IHE does not meet third-party financial audit requirements or if the IHE violated past performance requirements, such as failing to satisfactorily resolve any compliance issues identified in program reviews or audits.", "Alternatively, if an institution does not meet the above standards of financial responsibility, ED may still consider it financially responsible or give it provisional certification, under which it may operate for a time, if it qualifies under an alternative standard. These alternative standards include submitting an irrevocable letter of credit to ED that is equal to at least 50% of the Federal Student Aid (FSA) program funds that the IHE received during its most recently completed fiscal year, meeting specific monitoring requirements, or participating in the Title IV programs under provisional certification."], "subsections": []}, {"section_title": "Administrative Capability", "paragraphs": ["Along with demonstrating financial responsibility, an institution must demonstrate its ability to properly administer the Title IV programs in which it participates and to provide the education it describes in public documents (e.g., marketing brochures). Administrative capability focuses on the processes, procedures, and personnel used in administering Title IV funds and indicators of student success.", "Administrative capability standards address numerous aspects of Title IV administration. For example, to administer Title IV programs an institution must use ED's electronic processes and develop a system to identify and resolve discrepancies in Title IV information received by various institutional offices. The IHE must also refer cases of Title IV student fraud or criminal misconduct to ED's Office of Inspector General for resolution, and it must provide all enrolled and prospective students financial aid counseling. Finally, the IHE must have an adequate internal system of checks and balances that includes dividing the functions of authorizing payments and disbursing funds between two separate offices. ", "Institutions are required to have a capable staff member to administer Title IV programs and coordinate those programs with other aid received by students. This person must also have an adequate number of qualified staff to assist with aid administration. Before receiving Title IV funds, an IHE must certify that neither it nor its employees have been debarred or suspended by a federal agency; similar limitations apply to lenders, loan servicers, and third-party servicers.", "Relating to indicators of student success, an institution must have satisfactory academic progress (SAP) standards for students receiving Title IV funds. In general, IHEs must develop SAP standards that establish a minimum grade point average (or its equivalent) for students and a maximum time frame in which students must complete their educational programs. A student who fails to meet the SAP requirements becomes ineligible to receive Title IV funds. Also related to student success indicators, an institution that seeks to participate in Title IV programs for the first time may not have an undergraduate withdrawal rate for regular students that is greater than 33% during its most recently completed award year."], "subsections": [{"section_title": "Cohort Default Rate", "paragraphs": ["An institution may be deemed administratively incapable if it has a high cohort default rate (CDR). In general, the CDR is the number of an IHE's federal loan recipients who enter repayment in a given fiscal year (the cohort fiscal year) and who default within a certain period of time after entering repayment (cohort default period; CDP), divided by the total number of borrowers who entered repayment in the cohort fiscal year.", "Since 2014, ED has used a three-year CDP in calculating an institution's CDR. An IHE will be found administratively incapable if one of the following conditions is met:", "1. an institution's CDR is greater than 40% in one year for loans made under the FFEL and Direct Loans programs; 2. an institution's CDR is 30% or greater for each of the three most recent fiscal years for loans made under the FFEL and Direct Loans programs; or 3. an institution's CDR is 15% or greater in any single year for loans made under the Federal Perkins Loan Program.", "When an IHE is determined to be administratively incapable due to a high CDR, it may become ineligible to participate in the Direct Loan, Pell Grant, and/or Perkins Loan programs (but not other Title IV programs). ED may grant provisional certification for up to three years to an institution that would be deemed administratively capable except for its high cohort default rates."], "subsections": []}]}, {"section_title": "Provisional Certification", "paragraphs": ["If an institution is seeking initial certification, ED can grant it up to one year of provisional certification. ED can also grant an institution provisional certification for up to three years if ED is determining the IHE's administrative capacity and financial responsibility for the first time, if the IHE has experienced a partial or total change in ownership, or if ED determines that the administrative or financial condition of the IHE may hinder its ability to meet its financial responsibilities. Additionally, if an accrediting agency loses its ED recognition, any institution that was accredited by that agency may continue to participate in Title IV programs for up to 18 months after ED's withdrawal of recognition."], "subsections": []}, {"section_title": "Program Reviews", "paragraphs": ["To ensure that an institution is conforming to eligibility requirements, ED can conduct program reviews. During a program review, ED evaluates an institution's compliance with Title IV requirements and identifies actions the IHE must take to correct any problem(s). Review priority is given to those institutions with high cohort default rates; IHEs with significant fluctuations in Pell Grant awards or Direct Loan volume that are not accounted for by changes in programs offered; IHEs that are reported to have deficiencies or financial aid problems by their state or accrediting agency; IHEs with high annual dropout rates; and IHEs determined by ED to pose a significant risk of failing to comply with the administrative capability or financial responsibility requirements. If, during a review, ED determines that an institution is not administratively capable or financially responsible or is violating Title IV program rules, ED may grant it provisional certification, take corrective actions, or impose sanctions."], "subsections": []}, {"section_title": "Sanctions and Corrective Actions", "paragraphs": ["ED has the authority to impose a variety of sanctions and corrective actions on an institution that violates Title IV program rules, a Program Participation Agreement (discussed later in this report) or any other agreement made under the laws or regulations, or if it substantially misrepresents the nature of its educational programs, financial charges, or graduates' employability. Sanctions include fines, limitations, suspensions, emergency actions, and terminations. ED can also sanction third-party servicers performing tasks related to the institution's Title IV programs."], "subsections": [{"section_title": "Fines, Limitations, and Suspensions", "paragraphs": ["ED may impose several types of sanctions on institutions for statutory and regulatory violations, including fines, limitations, and suspensions. ED can fine an institution up to $55,907 for each statutory or regulatory violation it commits, depending on the size of the IHE and the seriousness of the violation. ", "Under a limitation, ED imposes specific conditions or restrictions on an institution related to its administration of Title IV funds. A limitation lasts for at least 12 months, and if an institution fails to abide by the limitation, ED may initiate a termination proceeding. ", "Finally, under a suspension, an institution is not allowed to participate in Title IV programs for up to 60 days. ", "Each of these sanctions may require an institution to take corrective actions as well, which may include repaying illegally used funds or making payments to eligible students from the IHE's own funds."], "subsections": []}, {"section_title": "Emergency Action", "paragraphs": ["ED can take emergency action to withhold Title IV funds from an institution if it receives reliable information that an IHE is violating applicable laws or regulations, agreements, or limitations. ED must determine that the institution is misusing federal funds, that immediate action is necessary to stop misuses, and that the potential losses outweigh the importance of using established procedures for limitation, suspension, or termination. An emergency action suspends an institution's participation in Title IV programs and prohibits it from disbursing such funds. Typically, the emergency action may not last more than 30 days."], "subsections": []}, {"section_title": "Termination of Title IV Participation", "paragraphs": ["The final action ED can take is the termination of an institution's participation in Title IV programs. Generally, an institution that has had its participation terminated cannot reapply to be reinstated for at least 18 months. To request reinstatement, an institution must submit a fully completed application to ED and demonstrate that it has corrected the violation(s) for which its participation was terminated. ED may then approve, approve subject to limitations, or deny the institution's request. "], "subsections": []}]}]}]}, {"section_title": "Other Related Issues", "paragraphs": ["Several other requirements affect institutional eligibility for Title IV programs. Some of these requirements include institution Program Participation Agreements, which include provisions related to incentive compensation and campus crime reporting requirements; return of Title IV funds; and distance education. The failure to meet the requirements for any of these may result in the loss of Title IV eligibility or other sanctions."], "subsections": [{"section_title": "Program Participation Agreements", "paragraphs": ["HEA Section 487 specifies that each institution wanting to participate in Title IV student aid programs is required to have a current Program Participation Agreement (PPA). A PPA is a document in which the institution agrees to comply with the laws, regulations, and policies applicable to the Title IV programs; it applies to an IHE's branch campuses and locations that meet Title IV requirements, as well as its main campus. It also lists all of the Title IV programs in which the IHE is eligible to participate, the date on which the PPA expires, and the date on which the IHE must reapply for participation. ", "By signing a PPA, an institution agrees that it will act as a fiduciary responsible for properly administering Title IV funds, will not charge students a processing fee to determine a student's eligibility for such funds, and will establish and maintain administrative and fiscal procedures to ensure the proper administration of Title IV programs. The PPA reiterates many provisions required for institutional eligibility and ED certification discussed earlier in this report and contains several additional notable requirements that may affect an IHE's Title IV eligibility, which are described below. Along with the general participation requirements with which an institution must comply, a PPA may also contain institution-specific requirements."], "subsections": [{"section_title": "90/10 Rule", "paragraphs": ["As part of their PPAs, domestic and foreign proprietary IHEs must agree to derive at least 10% of their revenue from non-Title IV funds (i.e., no more than 90% of their revenue can come from Title IV funds). This is known as the 90/10 rule. Examples of non-Title IV funds include private education loans and some military and veterans' benefits, such as benefits provided under the Post-9/11 GI Bill program. If an IHE violates the 90/10 rule in one year, it does not immediately lose its Title IV eligibility. Rather, it is placed on a provisional eligibility status for two years. If the IHE violates the 90/10 rule for two consecutive years, it loses its eligibility for at least two years."], "subsections": []}, {"section_title": "Incentive Compensation", "paragraphs": ["In a PPA, an IHE must agree it will not provide any commission or incentive compensation to individuals based directly or indirectly on their success in enrolling students or the enrolled students' obtaining financial aid; however, some exceptions apply to this general rule. For instance, IHEs can provide incentive compensation to individuals for the recruitment of foreign students who are ineligible to receive Title IV funds or they can provide incentive compensation through a profit-sharing plan. ", "The ban on incentive compensation only applies to the activities of securing enrollment (recruitment) and securing financial aid. Other activities are not banned, and ED draws a distinction between activities that involve directly working with individual students and policy-level determinations that affect recruitment and financial aid awards. For instance, an individual who is responsible for contacting potential student applicants or assisting students in filling out an enrollment application cannot receive incentive compensation, but an individual who conducts marketing activities, such as the broad dissemination of informational brochures or the collection of contact information, can receive incentive compensation."], "subsections": []}, {"section_title": "Clery Act Requirements", "paragraphs": ["HEA Section 485(f), referred to as the Clery Act, requires domestic Title IV participating IHEs (1) to report to ED campus crime statistics and (2) establish and disseminate campus safety and security policies. Both the campus crime statistics and campus safety and security policies must be compiled and disseminated to current and prospective students and employees in an IHE's annual security report (ASR).", "Campus crime statistics required to be reported to ED and included in an ASR include data on the occurrence on campus of a range of offenses specified in statute, including murder, burglary, robbery, domestic violence, rape, and other forms of sexual violence. ", "In addition to campus crime statistics, ASRs must include statements of campus safety and security policies regarding, for example,", "procedures and facilities for students and others to report criminal actions or other emergencies occurring on campus and an IHE's response to such reports; security and access to campus facilities; campus law enforcement, including the law enforcement authority of campus security personnel, and the working relationship between campus security personnel and state and local law enforcement; programs designed to inform students and employees about the prevention of crimes; and the possession, use, and sale of alcoholic beverages and illegal drugs; enforcement of state underage drinking laws; enforcement of federal and state drug laws; and any drug or alcohol abuse education programs required under the HEA.", "An ASR must also include statements of policies specifically relating to incidence of domestic and sexual violence. For example, an ASR must include statements of policy regarding", "programs to prevent such incidents; procedures a victim should follow if such an incident as occurred; procedures an IHE will follow once such an incident has been reported and procedures for institutional disciplinary actions in cases of alleged incidents (including a statement of the standard of evidence that will be used in any school proceeding arising from the incident report); and possible sanctions and protective measures that an IHE may impose following a final determination in an institutional proceeding regarding such incidences.", "The Clery Act prohibits the Secretary of Education from requiring IHEs to adopt particular policies, procedures, or practices; and prohibits retaliation against anyone exercising his or her rights or responsibilities under the act."], "subsections": []}]}, {"section_title": "Return of Title IV Funds", "paragraphs": ["HEA Section 484B specifies that when a Title IV aid recipient withdraws from an IHE before the end of the payment or enrollment period for which funds were disbursed, Title IV funds must be returned to ED according to a statutorily prescribed schedule. In general, when a student withdraws from an IHE, an IHE first determines the portion of Title IV aid considered to be \"earned\" by the student while enrolled and the portion considered to be \"unearned.\" Unearned aid must be returned to ED. Up to the 60% point of a payment or enrollment period, unearned funds must be returned on a pro rata schedule. After the 60% point of a payment or enrollment period, the total amount of funds awarded is considered to have been earned by the student and no funds are required to be returned. Whether an IHE and/or the student is required to return the funds to ED depends on a variety of circumstances, including whether Title IV funds have been applied directly to a student's institutional charges. Unearned funds must be returned to their respective programs in a specified order, with loans being returned first, followed by Pell Grants, and then other Title IV aid. In some instances, a student may have earned more aid than has been disbursed, and the difference is disbursed to the student after the student withdraws."], "subsections": []}, {"section_title": "Distance Education and Correspondence Education", "paragraphs": ["Generally, distance education and correspondence education refers to educational instruction with a separation in time, place, or both between the student and instructor. It is a way in which institutions can increase student access to postsecondary education by offering alternatives to traditional on-campus instruction. Recently, due to the greater availability of new technologies, there has been substantial growth in the amount and types of courses institutions offer. ", "Section 103(7)(A) and (B) of the HEA and the accompanying regulations define distance education as instruction that uses \"(1) the internet; (2) one-way and two-way transmissions through open broadcast, closed circuit, cable, microwave, broadband lines, fiber optics, satellite, or wireless communications devices; [or] ... (3) audio conferencing\" to deliver instruction to students separated from the instructor. A course taught through a video cassette, DVD, or CD-ROM is considered a distance education course if one of the above-mentioned technologies is used to support student-instructor interaction. Regardless of the technology used, \"regular and substantive interaction between the students and the instructor\" must be ensured. ", "Correspondence courses are expressly excluded from the definition of distance education. A correspondence course is one for which an institution provides instructional materials and exams for students who do not physically attend classes at the IHE, but does not include those courses that are delivered with \"regular and substantive interaction between the students and the instructor\" via one of the above-described technologies. "], "subsections": [{"section_title": "50% Rule for Correspondence Courses", "paragraphs": ["In 1992, partially in response to cases of some correspondence institutions' fraudulent and abusive practices used to attract unqualified students to enroll in programs of poor or questionable quality, Congress incorporated provisions referred to as the \"50% rules\" into the HEA. The rules affected both the eligibility of institutions offering correspondence courses and their students' eligibility for Title IV aid. In general, under the rules, an institution is ineligible for Title IV aid if more than 50% of its courses are offered by correspondence, or if 50% or more of its students are enrolled in correspondence courses."], "subsections": []}, {"section_title": "State Authorization for Correspondence and Distance Education Courses", "paragraphs": ["As discussed earlier in this report, rules promulgated in 2016 would have required an IHE offering postsecondary distance or correspondence education in a state in which it is not physically located to meet any state authorization requirements within that state. Under the regulations, an IHE could meet this requirement if it participates in a state authorization reciprocity agreement. These regulations were scheduled to become effective July 1, 2018. However, on July 3, 2018 (and effective June 29, 2018), the Secretary of Education issued a final rule delaying the implementation of these requirements until July 1, 2020."], "subsections": []}, {"section_title": "Foreign IHE Eligibility", "paragraphs": ["The distinction between distance education and traditional instruction is also important for the purposes of Title IV program eligibility. Distance education programs provided by domestic IHEs are eligible for Title IV participation if they have been accredited by an accrediting agency recognized by ED to evaluate distance education programs. A program offered by a foreign IHE, in whole or in part, through distance education (including telecommunications) or correspondence is ineligible for Title IV participation."], "subsections": []}]}]}]}}
{"id": "R44852", "title": "The Value of Energy Tax Incentives for Different Types of Energy Resources", "released_date": "2019-03-19T00:00:00", "summary": ["The U.S. tax code supports the energy sector by providing a number of targeted tax incentives, or tax incentives available only for the energy industry. Some policymakers have expressed interest in understanding how energy tax benefits are distributed across different domestic energy resources. For example, what percentage of energy-related tax benefits support fossil fuels (or support renewables)? How much domestic energy is produced using fossil fuels (or produced using renewables)? And how do these figures compare?", "In 2017, the value of federal tax-related support for the energy sector was estimated to be $17.8 billion. Of this, $4.6 billion (25.8%) can be attributed to tax incentives supporting fossil fuels. Tax-related support for renewables was an estimated $11.6 billion in 2017 (or 65.2% of total tax-related support for energy). The remaining tax-related support went toward nuclear energy, efficiency measures, and alternative technology vehicles.", "While the cost of tax incentives for renewables has exceeded the cost of incentives for fossil fuels in recent years, the majority of energy produced in the United States continues to be derived from fossil fuels. In 2017, fossil fuels accounted for 77.7% of U.S. primary energy production. The remaining primary energy production is attributable to renewable energy and nuclear electric resources, with shares of 12.8% and 9.5%, respectively.", "The balance of energy-related tax incentives has changed over time, and it is projected to continue to change, under current law, in coming years. Factors that have contributed to recent changes in the balance of energy-related tax incentives include the following:", "Increased tax expenditures for solar and wind. Tax expenditures associated with the energy credit for solar and the production tax credit for wind have increased substantially in recent years. Following the long-term extensions of these temporary tax benefits provided in the Consolidated Appropriations Act, 2016 (P.L. 114-113), tax expenditures for the solar energy credit are projected to remain stable for several years, before decreasing in the longer term. The expiration of tax-related support for renewable fuels. Tax-related support for renewable fuels declined substantially after the tax credits for alcohol fuels were allowed to expire at the end of 2011. Other fuels-related incentives also expired at the end of 2017 (although these may be extended as part of the \"tax extenders\"). Decline then increase in tax expenditures for fossil fuels. Tax expenditures for fossil fuels declined between 2017 and 2018, an indirect effect of the 2017 tax act (P.L. 115-97). Over time, however, the tax expenditures associated with permanent fossil fuels tax incentives are estimated to increase.", "One starting point for evaluating energy tax policy may be a calculation of subsidy relative to production level. However, a complete policy analysis might consider why the level of federal financial support differs across various energy technologies. Tax incentives for energy may support various environmental or economic objectives. For example, tax incentives designed to reduce reliance on imported petroleum may be consistent with energy security goals. Tax incentives that promote renewable energy resources may be consistent with certain environmental objectives."], "reports": {"section_title": "", "paragraphs": ["S ince the 1970s, policymakers have increasingly used the tax code to promote energy policy goals. Long-term energy policy goals include providing a secure supply of energy, providing energy at a low cost, and ensuring that energy production and consumption is consistent with environmental objectives. A range of federal policies, including various research and development programs, mandates, and direct financial support such as tax incentives or loan guarantees, promotes various energy policy objectives. This report focuses on tax incentives that support the production of or investment in various energy resources.", "Through the mid-2000s, the majority of revenue losses associated with energy tax incentives were from provisions benefiting fossil fuels. At present, the balance has shifted, such that the bulk of federal revenue losses associated with energy tax provisions are from incentives for renewable energy production and investment. While there has been growth in the amount of energy from renewable resources, the majority of domestic energy produced continues to be from fossil energy resources. This has raised questions regarding the value of energy tax incentives relative to production and the relative subsidization of various energy resources.", "Although the numbers in this report may be useful for policymakers evaluating the current status of energy tax policy, it is important to understand the limitations of this analysis. This report evaluates energy production relative to the value of current energy tax expenditures. It does not, however, seek to analyze whether the current system of energy tax incentives is economically efficient, effective, or otherwise consistent with broader energy policy objectives. Further, analysis in this report does not include information on federal spending on energy that is not linked to the tax code. "], "subsections": [{"section_title": "Tax Incentives Relative to Energy Production", "paragraphs": ["The following sections estimate the value of tax incentives relative to the level of energy produced using fossil and renewable energy resources. Before proceeding with the analysis, some limitations are outlined. The analysis itself requires quantification of energy production and energy tax incentives. Once data on energy production and energy tax incentives have been presented, the value of energy tax incentives can be evaluated relative to current levels of energy production."], "subsections": [{"section_title": "Limitations of the Analysis", "paragraphs": ["The analysis below provides a broad comparison of the relative tax support for fossil fuels as compared with the relative support for renewables. Various data limitations prevent a precise analysis of the amount of subsidy per unit of production across different energy resources. Limitations associated with this type of analysis include the following:", "Current-year tax incentives may not directly support current-year production .", "Many of the tax incentives available for energy resources are designed to encourage investment, rather than production. For example, the expensing of intangible drilling costs (IDCs) for oil and gas provides an incentive to invest in capital equipment and exploration. Although the ability to expense IDCs does not directly support current production of crude oil and natural gas, such subsidies are expected to increase long-run supply. ", "Differing levels of federal financial support may or may not reflect underlying policy rationales .", "Various policy rationales may exist for federal interventions in energy markets. Interventions may be designed to achieve various economic, social, or other policy objectives. Although analysis of federal financial support per unit of energy production may help inform the policy debate, it does not directly consider why various energy sources may receive different levels of federal financial support. ", "Tax expenditures are estimates .", "The tax expenditure data provided by the Joint Committee on Taxation (JCT) are estimates of federal revenue losses associated with specific provisions. These estimates do not provide information on actual federal revenue losses, nor do these estimates reflect the amount of revenue that would be raised should the provision be eliminated. Additionally, the JCT advises that tax expenditures across provisions not be summed, due to interaction effects. ", "Tax expenditure data are not specific to energy source .", "Many tax incentives are available to a variety of energy resources. For example, the tax expenditure associated with the expensing of IDCs does not distinguish between revenue losses associated with natural gas versus those associated with oil. The tax expenditure for five-year accelerated depreciation also does not specify how much of the benefit accrues to various eligible technologies, such as wind and solar.", "A number of tax provisions that support energy are not energy specific .", "The U.S. energy sector benefits from a number of tax provisions that are not targeted at energy. For example, the production activities deduction (Section 199), before being repealed in the 2017 tax act ( P.L. 115-97 ), benefited all domestic manufacturers. For the purposes of the Section 199 deduction, oil and gas extraction was considered a domestic manufacturing activity. Certain energy-related activities may also benefit from other tax incentives that are available to non-energy industries, such as the ability to issue tax-exempt debt, the ability to structure as a master limited partnership, or tax incentives designed to promote other activities, such as research and development. "], "subsections": []}, {"section_title": "Energy Production", "paragraphs": ["The Energy Information Administration (EIA) provides annual data on U.S. primary energy production. EIA defines primary energy as energy that exists in a naturally occurring form, before being converted into an end-use product. For example, coal is considered primary energy, which is typically combusted to create steam and then electricity. ", "This report relies on 2017 data on U.S. primary energy production (see Table 1 ). In 2017, most primary energy was produced using fossil fuels. Natural gas was the largest source of primary energy production, accounting for 32.0% of primary energy produced. Crude oil accounted for 22.1% of U.S. primary energy production in 2017, and coal accounted for 17.7%. Taken together, fossil energy sources were used for 77.7% of 2017 primary energy production.", "The remaining U.S. primary energy production is attributable to nuclear electric and renewable energy resources. Overall, 9.5% of 2017 U.S. primary energy was produced as nuclear electric energy. Renewables (including hydroelectric power) constituted 12.8% of 2017 U.S. primary energy production. ", "Biomass was the largest source of primary production among the renewables in 2017, accounting for 5.9% of overall primary energy production and 46.1% of renewable energy production. This was followed by hydroelectric power at 3.1% and wind energy at 2.7% of primary energy production. Solar energy and geothermal energy were responsible for 0.9% and 0.2%, respectively, of 2017 primary energy production (see Table 1 ).", "Primary energy produced using biomass can be further categorized as biomass being used to produce biofuels (e.g., ethanol) and biomass being used to generate biopower. Of the 5.2 quadrillion Btu of energy produced using biomass, about 2.3 quadrillion Btu was used in the production of biofuels."], "subsections": []}, {"section_title": "Energy Tax Incentives", "paragraphs": ["The tax code supports the energy sector by providing a number of targeted tax incentives, or tax incentives only available for the energy industry. In addition to targeted tax incentives, the energy sector may also benefit from a number of broader tax provisions that are available for energy- and non-energy-related taxpayers. These broader tax incentives are not included in the analysis, since tax expenditure estimates do not indicate how much of the revenue loss associated with these generally available provisions is associated with energy-related activities. ", "Joint Committee on Taxation (JCT) tax expenditure estimates are used to tabulate federal revenue losses associated with energy tax provisions. The tax expenditure estimates provided by the JCT are forecasted revenue losses. These revenue losses are not reestimated on the basis of actual economic conditions. Thus, revenue losses presented below are projected, as opposed to actual revenue losses.", "The JCT advises that individual tax expenditures cannot be simply summed to estimate the aggregate revenue loss from multiple tax provisions. This is because of interaction effects. When the revenue loss associated with a specific tax provision is estimated, the estimate is made assuming that there are no changes in other provisions or in taxpayer behavior. When individual tax expenditures are summed, the interaction effects may lead to different revenue loss estimates. Consequently, aggregate tax expenditure estimates, derived from summing the estimated revenue effects of individual tax expenditure provisions, are unlikely to reflect the actual change in federal receipts associated with removing various tax provisions. Thus, total tax expenditure figures presented below are an estimate of federal revenue losses associated with energy tax provisions, and should not be interpreted as actual federal revenue losses.", " Table 2 provides information on revenue losses and outlays associated with energy-related tax provisions in FY2017 and FY2018. The FY2017 figures are included to facilitate comparison with the primary energy production using different energy resources. Since the tax code was substantially changed beginning in 2018, FY2018 tax expenditures are also included. ", "In 2017, the tax code provided an estimated $17.8 billion in support for the energy sector. More than one-third of the 2017 total, $6.4 billion, was due to the renewable energy production tax credit (PTC) and investment tax credit (ITC). ", "Nine different provisions supporting fossil fuels had an estimated cost of $4.6 billion, collectively, in 2017. This declined to $3.2 billion for 2018. While the tax legislation enacted late in 2017 ( P.L. 115-97 ) did not directly change fossil-fuel-related tax provisions, other changes, including the reduced corporate tax rate, lowered the tax savings associated with various tax incentives for fossil fuels. ", "While the majority of federal tax-related support for energy in 2017 can be attributed to either fossil fuels or renewables, provisions supporting energy efficiency, alternative technology vehicles, and nuclear energy also resulted in forgone revenue in 2017 and 2018."], "subsections": []}, {"section_title": "Fossil Fuels Versus Renewables: Relative Production and Tax Incentive Levels", "paragraphs": [" Table 3 provides a side-by-side comparison of fossil fuel and renewable production, along with the cost of tax incentives supporting fossil fuel and renewable energy resources. During 2017, 77.7% of U.S. primary energy production could be attributed to fossil fuel sources. Of the federal tax support targeted to energy in 2017, an estimated 25.8% of the value went toward supporting fossil fuels. During 2017, an estimated 12.8% of U.S. primary source energy was produced using renewable resources. Of the federal tax support targeted to energy in 2017, an estimated 65.2% went toward supporting renewables. ", " Table 3 also contains information on subcategories of renewables, specifically (1) renewables excluding hydro and (2) renewables excluding biofuels. Excluding hydro might be instructive since current energy production is the result of past investment decisions, some of which may not have benefited from targeted tax incentives. Thus, it may not always be appropriate to compare the current value of tax incentives to current levels of energy production. For example, energy generated using hydroelectric power technologies might be excluded from the renewables category, as most existing hydro-generating capacity was installed before the early 1990s. Thus, there is no current federal tax benefit for most electricity currently generated using hydropower. Further, with many of the best hydro sites already developed, there is limited potential for growth in conventional hydropower capacity. There is, however, potential for development of additional electricity-generating capacity through smaller hydro projects that could substantially increase U.S. hydroelectric generation capacity. Excluding hydro from the renewables category, or removing an energy resource where the development was not likely supported by current renewables-related tax incentives, nonhydro renewables accounted for 9.7% of 2017 primary energy production (see Table 3 ).", "During 2017, certain tax expenditures for renewable energy did, however, benefit taxpayers developing and operating hydroelectric power facilities. Certain hydroelectric installations, including efficiency improvements or capacity additions at existing facilities, may be eligible for the renewable energy production tax credit (PTC). Given that hydro is supported by 2017 tax expenditures, one could also argue that for the purposes of the comparison being made in this report, hydro should be included in the renewables category. ", "It may also be instructive to consider incentives that generally support renewable electricity separately from those that support biofuels. Of the estimated $17.8 billion in energy tax provisions in 2017, an estimated $2.1 billion, or 11.8%, went toward supporting biofuels. Excluding tax incentives for biofuels, 53.4% of energy-related tax incentives in 2017 were attributable to renewables. In other words, excluding biofuels from the analysis reduces the share of tax incentives attributable to renewables from 65.2% to 53.4% (see Table 3 ). Excluding biofuels from the analysis also reduces renewables' share of primary energy production. When biofuels are excluded, the share of primary energy produced in 2017 attributable to renewables falls by 2.7 percentage points, from 12.8% to 10.1% ( Table 3 ).", "In 2017, 9.5% of primary energy produced was from nuclear resources. The one tax benefit for nuclear with a positive tax expenditure in 2017 was the special tax rate for nuclear decommissioning reserve funds. At $0.2 billion in 2017, this was 1.7% of the value of all tax expenditures for energy included in the analysis. Like many other energy-related tax expenditures, the special tax rate for nuclear decommissioning reserve funds is not directly related to current energy production. Instead, this provision reduces the cost of investing in nuclear energy by taxing income from nuclear decommissioning reserve funds at a preferred rate (a flat rate of 20%)."], "subsections": []}]}, {"section_title": "Energy Tax Incentive Trends", "paragraphs": ["Over time, there have been substantial shifts in the proportion of energy-related tax expenditures benefiting different types of energy resources. Figure 1 illustrates the projected value of energy-related tax incentives since 1978. Energy tax provisions are categorized as primarily benefiting fossil fuels, renewables, renewable fuels, efficiency, vehicles, or some other energy purpose. ", "Until the mid-2000s, most of the value of energy-related tax incentives supported fossil fuels. Starting in the mid-2000s, the cost of energy-related tax preferences supporting renewables increased. Some of this increase was attributable to provisions supporting renewable fuels, which have since expired. ", "From the 1980s through 2011, most of the tax-related federal financial support for renewable energy was for renewable fuels, mainly alcohol fuels (i.e., ethanol). The tax credits for alcohol fuels (including ethanol) expired at the end of 2011. Starting in 2008, the federal government incurred outlays associated with excise tax credits for biodiesel and renewable diesel. Under current law, the tax credits for biodiesel and renewable diesel expired at the end of 2017. Thus, after FY2018 (which includes the end of calendar year 2017), there are no projected costs associated with tax incentives for renewable fuels. Expired tax incentives may be extended, however, as part of the \"tax extenders.\"", "Beginning in the mid-2000s, the cost of energy tax incentives for renewables began to increase. Beginning in 2009, the Section 1603 grants in lieu of tax credits contributed to increased costs associated with tax-related benefits for renewable energy. Through 2014, Section 1603 grants in lieu of tax credits exceeded tax expenditures associated with the production tax credit (PTC) and investment tax credit (ITC) combined. The Section 1603 grant option is not available for projects that began construction after December 31, 2011. However, since grants are paid out when construction is completed and eligible property is placed in service, outlays under the Section 1603 program continued through 2017.", "Tax expenditures for the ITC and PTC have increased substantially in recent years. As a result of the extensions for wind and solar enacted in the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ), ITC and PTC tax expenditures are projected to remain stable for several years. Under current law, the PTC will not be available to projects that begin construction after December 31, 2019. However, since the PTC is available for the first 10 years of renewable electricity production, and the expiration date is a start-of-construction deadline as opposed to a placed-in-service deadline, PTC tax expenditures will continue after the provision expires. The ITC for solar, currently 30%, is scheduled to decline to 26% for property beginning construction in 2020, and 22% for property beginning construction in 2021, before returning to the permanent rate of 10% after 2021. Thus, absent additional policy changes, the higher tax expenditures associated with the PTC and ITC are expected to be temporary. ", "Tax expenditures for tax incentives supporting energy efficiency increased in the late 2000s, but subsequently declined. Most of the increase in revenue losses for efficiency-related provisions was associated with tax incentives for homeowners investing in certain energy-efficient property. The primary tax incentive for energy efficiency improvements to existing homes expired at the end of 2017. Extension of expired tax incentives for energy efficiency would increase the cost of energy efficiency-related tax incentives.", "As was noted above, many energy-related tax provisions, particularly those that support renewables, are temporary. Over time as these incentives phase out, tax expenditures associated with these provisions will decline. This process may take some time. For the PTC, for example, the credit is claimed during the first 10 years of qualifying production. It is possible that qualifying production begins after the December 31, 2019, start-of-construction expiration date, meaning that tax expenditures for the PTC are expected to continue for at least the next decade. ", "U.S. Department of the Treasury tax expenditure estimates can be used to illustrate how expiring provisions affect the distribution of energy-related tax expenditures over time (see Figure 2 ). Treasury and JCT tax expenditure estimates differ in a number of ways. The Treasury provides tax expenditures over an 11-year budget window. The JCT uses a shorter 5-year window. The JCT and Treasury also use different methodologies when preparing tax expenditure estimates, and have different classifications as to what provisions constitute tax expenditures. Thus, the tax expenditure estimates prepared by each entity are not directly comparable. However, looking at Treasury tax expenditure estimates over time can illustrate broader trends regarding which types of energy are receiving tax-related benefits. ", "In 2018, according to Treasury's tax expenditure estimates, tax expenditures supporting renewables totaled an estimated $8.4 billion. By 2028, that number is expected to decline to $3.5 billion. The decline can be explained by the reduced tax expenditures for the PTC and ITC as these provisions phase down or expire. Treasury estimates that tax expenditures supporting fossil fuels will total $2.2 billion in 2018. The Treasury anticipates this number increasing over time, reaching an estimated $3.8 billion by 2028. The Treasury estimates that the revenue losses associated with most permanent oil-and-gas tax incentives will increase over the next decade. "], "subsections": []}, {"section_title": "Concluding Remarks", "paragraphs": ["The energy sector is supported by an array of tax incentives reflecting diverse policy objectives. As a result, the amount of tax-related federal financial support for energy differs across energy sectors, and is not necessarily proportional to the amount of energy production from various energy sectors. The total amount of energy-related tax incentives is projected to decline under current law, although extensions of expired energy tax provisions, or other modifications to energy tax provisions, could change these figures. Over the longer term, the amount of tax-related support for the energy sector could decline if provisions are allowed to expire as scheduled under current law. "], "subsections": []}]}}
{"id": "RL32934", "title": "U.S.-Mexico Economic Relations: Trends, Issues, and Implications ", "released_date": "2019-03-26T00:00:00", "summary": ["The economic and trade relationship with Mexico is of interest to U.S. policymakers because of Mexico's proximity to the United States, the extensive trade and investment relationship under the North American Free Trade Agreement (NAFTA), the conclusion of the NAFTA renegotiations and the proposed U.S.-Mexico-Canada Agreement (USMCA), and the strong cultural and economic ties that connect the two countries. Also, it is of national interest for the United States to have a prosperous and democratic Mexico as a neighboring country. Mexico is the United States' third-largest trading partner, while the United States is, by far, Mexico's largest trading partner. Mexico ranks third as a source of U.S. imports, after China and Canada, and second, after Canada, as an export market for U.S. goods and services. The United States is the largest source of foreign direct investment (FDI) in Mexico.", "Most studies show that the net economic effects of NAFTA, which entered into force in 1994, on both the United States and Mexico have been small but positive, though there have been adjustment costs to some sectors within both countries. Much of the bilateral trade between the United States and Mexico occurs in the context of supply chains as manufacturers in each country work together to create goods. The expansion of trade since NAFTA has resulted in the creation of vertical supply relationships, especially along the U.S.-Mexico border. The flow of intermediate inputs produced in the United States and exported to Mexico and the return flow of finished products greatly increased the importance of the U.S.-Mexico border region as a production site. U.S. manufacturing industries, including automotive, electronics, appliances, and machinery, all rely on the assistance of Mexican manufacturers.", "Congress faces numerous issues related to U.S.-Mexico trade and investment relations. The United States, Mexico, and Canada signed the proposed USMCA on November 30, 2018, which would have to be approved by Congress and ratified by Mexico and Canada before entering into force. A few days after signing the agreement, President Donald J. Trump stated to reporters that he intends to notify Mexico and Canada of his intention to withdraw from NAFTA with a six-month notice. Congress may consider policy issues and economic effects of the proposed USMCA, economic and political ramifications of possibly withdrawing from NAFTA, and the potential strategic implications of Mexico's new President Andr\u00e9s Manuel L\u00f3pez Obrador, who entered into office on December 1, 2018. Congress may also examine the congressional role in a possible withdrawal from NAFTA; evaluate the effects of U.S. tariffs on aluminum and steel imports from Mexico and Mexico's retaliatory tariffs on certain U.S. exports; and address issues related to the U.S. withdrawal from the proposed Trans-Pacific Partnership (TPP) free trade agreement among the United States, Canada, Mexico, and nine other countries, and the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which will enact much of the proposed TPP without the participation of the United States. The CPTPP is set to take effect for Mexico and five other countries on December 30, 2018. Some observers contend that the withdrawal from TPP could damage U.S. competitiveness and economic leadership in the region, while others see the withdrawal as a way to prevent lower-cost imports and potential job losses.", "Congress also may maintain an active interest in ongoing bilateral efforts to promote economic competitiveness, increase regulatory cooperation, and pursue energy integration. Under the U.S.-Mexico High Level Economic Dialogue (HLED), which was first launched in September 2013, the United States and Mexico are striving to advance economic and commercial priorities through annual meetings at the Cabinet level that also include leaders from the public and private sectors. Two other initiatives that may be of interest to policymakers are the High-Level Regulatory Cooperation Council (HLRCC) and the bilateral border management initiative under the Declaration Concerning 21st Center Border Management."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The U.S.-Mexico bilateral economic relationship is of key interest to the United States because of Mexico's proximity, the extensive cultural and economic ties between the two countries, and the strong economic relationship with Mexico under the North American Free Trade Agreement (NAFTA). The United States and Mexico share many common economic interests related to trade, investment, and regulatory cooperation. The two countries share a 2,000-mile border and have extensive interconnections through the Gulf of Mexico. There are also links through migration, tourism, environmental issues, health concerns, and family and cultural relationships.", "Congress has maintained an active interest on issues related to NAFTA renegotiations and the recently signed U.S.-Mexico-Canada trade agreement (USMCA); U.S.-Mexico trade and investment relations; Mexico's economic reform measures, especially in the energy sector; the Mexican 2018 presidential elections; U.S.-Mexico border management; and other related issues. Congress has also maintained an interest in the ramifications of possible withdrawal from NAFTA. Congress may also take an interest in the economic policies of Mexico's new President Andr\u00e9s Manuel L\u00f3pez Obrador, the populist leader of the National Regeneration Movement (MORENA) party, who won the July 2018 election with 53% of the vote. MORENA's coalition also won majorities in both chambers of the legislature that convened on September 1, 2018. Former President Enrique Pe\u00f1a Nieto successfully drove numerous economic and political reforms that included, among other measures, opening up the energy sector to private investment, countering monopolistic practices, passing fiscal reform, making farmers more productive, and increasing infrastructure investment. ", "This report provides an overview and background information regarding U.S.-Mexico economic relations, trade trends, the Mexican economy, NAFTA, the proposed USMCA, and trade issues between the United States and Mexico. It will be updated as events warrant."], "subsections": []}, {"section_title": "U.S.-Mexico Economic Relations", "paragraphs": ["Mexico is one of the United States' most important trading partners, ranking second among U.S. export markets and third in total U.S. trade (imports plus exports). Under NAFTA, the United States and Mexico have developed significant economic ties. Trade between the two countries has more than tripled since the agreement entered into force in 1994. Through NAFTA, the United States, Mexico, and Canada form one of the world's largest free trade areas, with about one-third of the world's total gross domestic product (GDP). Mexico has the second-largest economy in Latin America after Brazil. It has a population of 129 million people, making it the most populous Spanish-speaking country in the world and the third-most populous country in the Western Hemisphere (after the United States and Brazil).", "Mexico's gross domestic product (GDP) was an estimated $1.15 trillion in 2017, about 6% of U.S. GDP of $19.39 trillion. Measured in terms of purchasing power parity (PPP), Mexican GDP was considerably higher, $2.35 trillion, or about 12% of U.S. GDP. Per capita income in Mexico is significantly lower than in the United States. In 2017, Mexico's per capita GDP in purchasing power parity was $17,743, or 30% of U.S. per capita GDP of $59,381 (see Table 1 ). Ten years earlier, in 2007, Mexico's per capita GDP in purchasing power parity was $13,995, or 29% of the U.S. amount of $48,006. Although there is a notable income disparity with the United States, Mexico's per capita GDP is relatively high by global standards, and falls within the World Bank's upper-middle income category. Mexico's economy relies heavily on the United States as an export market. The value of exports equaled 37% of Mexico's GDP in 2017, as shown in Table 1 , and approximately 80% of Mexico's exports were headed to the United States."], "subsections": [{"section_title": "U.S.-Mexico Trade", "paragraphs": ["The United States is, by far, Mexico's leading partner in merchandise trade, while Mexico is the United States' third-largest trade partner after China and Canada. Mexico ranks second among U.S. export markets after Canada, and is the third-leading supplier of U.S. imports. U.S. merchandise trade with Mexico increased rapidly since NAFTA entered into force in January 1994. U.S. exports to Mexico increased from $41.6 billion in 1993 (the year prior to NAFTA's entry into force) to $265.0 billion in 2018. U.S. imports from Mexico increased from $39.9 billion in 1993 to $346.5 billion in 2018. The merchandise trade balance with Mexico went from a surplus of $1.7 billion in 1993 to a widening deficit that reached $74.3 billion in 2007 and then increased to an all-time high of $81.5 billion in 2018.", "The United States had a surplus in services trade with Mexico of $7.4 billion in 2017 (latest available data), as shown in Figure 1 . U.S. services exports to Mexico totaled $32.8 billion in 2017, up from $14.2 billion in 1999, while imports were valued at $25.5 billion in 2017, up from $9.7 billion in 1999."], "subsections": [{"section_title": "U.S. Imports from Mexico", "paragraphs": ["Leading U.S. merchandise imports from Mexico in 2018 included motor vehicles ($64.5 billion or 19% of imports from Mexico), motor vehicle parts ($49.8 billion or 14% of imports), computer equipment ($26.6 billion or 8% of imports), oil and gas ($14.5 billion or 4% of imports), and electrical equipment ($11.9 billion or 3% of imports), as shown in Table 2 . U.S. imports from Mexico increased from $295.7 billion in 2014 to $346.5 billion in 2018. Oil and gas imports from Mexico have decreased sharply, dropping from $39.6 billion in 2011 to $7.6 billion in 2016, partially due to a decrease in oil production but also because of the drop in the price of oil around the world. In 2017, U.S. oil and gas imports from Mexico increased to $14.5 billion. "], "subsections": []}, {"section_title": "U.S. Exports to Mexico", "paragraphs": ["Leading U.S. exports to Mexico in 2018 consisted of petroleum and coal products ($28.8 billion or 11% of exports to Mexico), motor vehicle parts ($20.2 billion or 8% of exports), computer equipment ($17.4 billion or 7% of exports), semiconductors and other electronic components ($13.1 billion or 5% of exports), and basic chemicals ($10.3 billion or 4% of exports), as shown in Table 3 ."], "subsections": []}]}, {"section_title": "Bilateral Foreign Direct Investment", "paragraphs": ["Foreign direct investment (FDI) has been an integral part of the economic relationship between the United States and Mexico since NAFTA implementation. The United States is the largest source of FDI in Mexico. The stock of U.S. FDI increased from $17.0 billion in 1994 to a high of $109.7 billion in 2017. While the stock Mexican FDI in the United States is much lower, it has increased significantly since NAFTA, from $2.1 billion in 1994 to $18.0 billion in 2017 (see Figure 2 ).", "The liberalization of Mexico's restrictions on foreign investment in the late 1980s and the early 1990s played an important role in attracting U.S. investment to Mexico. Up until the mid-1980s, Mexico had a very protective policy that restricted foreign investment and controlled the exchange rate to encourage domestic growth, affecting the entire industrial sector. A sharp shift in policy in the late 1980s that included market opening measures and economic reforms helped bring in a steady increase of FDI flows. These reforms were locked in through NAFTA provisions on foreign investment and resulted in increased investor confidence. NAFTA investment provisions give North American investors from the United States, Mexico, or Canada nondiscriminatory treatment of their investments as well as investor protection. NAFTA may have encouraged U.S. FDI in Mexico by increasing investor confidence, but much of the growth may have occurred anyway because Mexico likely would have continued to liberalize its foreign investment laws with or without the agreement."], "subsections": []}, {"section_title": "Manufacturing and U.S.-Mexico Supply Chains", "paragraphs": ["Many economists and other observers have credited NAFTA with helping U.S. manufacturing industries, especially the U.S. auto industry, become more globally competitive through the development of supply chains. Much of the increase in U.S.-Mexico trade, for example, can be attributed to specialization as manufacturing and assembly plants have reoriented to take advantage of economies of scale. As a result, supply chains have been increasingly crossing national boundaries as manufacturing work is performed wherever it is most efficient. A reduction in tariffs in a given sector not only affects prices in that sector but also in industries that purchase intermediate inputs from that sector. Some analysts believe that the importance of these direct and indirect effects is often overlooked. They suggest that these linkages offer important trade and welfare gains from free trade agreements and that ignoring these input-output linkages could underestimate potential trade gains.", "A significant portion of merchandise trade between the United States and Mexico occurs in the context of production sharing as manufacturers in each country work together to create goods. Trade expansion has resulted in the creation of vertical supply relationships, especially along the U.S.-Mexico border. The flow of intermediate inputs produced in the United States and exported to Mexico and the return flow of finished products greatly increased the importance of the U.S.-Mexico border region as a production site. U.S. manufacturing industries, including automotive, electronics, appliances, and machinery, all rely on the assistance of Mexican manufacturers. ", "In the auto sector, for example, trade expansion has resulted in the creation of vertical supply relationships throughout North America. The flow of auto merchandise trade between the United States and Mexico greatly increased the importance of North America as a production site for automobiles. According to industry experts, the North American auto industry has \"multilayered connections\" between U.S. and Mexican suppliers and assembly points. A Wall Street Journal article describes how an automobile produced in the United States has tens of thousands of parts that come from multiple producers in different countries and travel back and forth across borders several times. A company producing seats for automobiles, for example, incorporates components from four different U.S. states and four Mexican locations into products produced in the Midwest. These products are then sold to major car makers. The place where final assembly of a product is assembled may have little bearing on where its components are made. ", "The integration of the North American auto industry is reflected in the percentage of U.S. auto imports that enter the United States duty-free under NAFTA. In 2017, 99% of U.S. motor vehicle imports from Mexico entered the United States duty-free under NAFTA, compared to 76% of motor vehicle parts. Only 56% of total U.S. imports from Mexico received duty-free treatment under NAFTA; the remainder entered the United States under other programs. "], "subsections": [{"section_title": "Mexico's Export Processing Zones", "paragraphs": ["Mexico's export-oriented assembly plants, a majority of which have U.S. parent companies, are closely linked to U.S.-Mexico trade in various labor-intensive industries such as auto parts and electronic goods. Foreign-owned assembly plants, which originated under Mexico's maquiladora program in the 1960s, account for a substantial share of Mexico's trade with the United States. These export processing plants use extensive amounts of imported content to produce final goods and export the majority of their production to the U.S. market. ", "NAFTA, along with a combination of other factors, contributed to a significant increase in Mexican export-oriented assembly plants, such as maquiladoras, after its entry into force. Other factors that contributed to manufacturing growth and integration include trade liberalization, wages, and economic conditions, both in the United States and Mexico. Although some provisions in NAFTA may have encouraged growth in certain sectors, manufacturing activity likely has been more influenced by the strength of the U.S. economy and relative wages in Mexico.", "Private industry groups state that these operations help U.S. companies remain competitive in the world marketplace by producing goods at competitive prices. In addition, the proximity of Mexico to the United States allows production to have a higher degree of U.S. content in the final product, which could help sustain jobs in the United States. Critics of these types of operations argue that they have a negative effect on the economy because they take jobs from the United States and help depress the wages of low-skilled U.S. workers."], "subsections": []}, {"section_title": "Maquiladoras and NAFTA", "paragraphs": ["Changes in Mexican regulations on export-oriented industries after NAFTA merged the maquiladora industry and Mexican domestic assembly-for-export plants into one program called the Maquiladora Manufacturing Industry and Export Services (IMMEX). ", "NAFTA rules for the maquiladora industry were implemented in two phases, with the first phase covering the period 1994-2000, and the second phase starting in 2001. During the initial phase, NAFTA regulations continued to allow the maquiladora industry to import products duty-free into Mexico, regardless of the country of origin of the products. This phase also allowed maquiladora operations to increase maquiladora sales into the Mexican domestic market. ", "Phase II made a significant change to the industry in that the new North American rules of origin determined duty-free status for U.S. and Canadian products exported to Mexico for maquiladoras. In 2001, the North American rules of origin determined the duty-free status for a given import and replaced the previous special tariff provisions that applied only to maquiladora operations. The initial maquiladora program ceased to exist and the same trade rules applied to all assembly operations in Mexico.", "The elimination of duty-free imports by maquiladoras from non-NAFTA countries under NAFTA caused some initial uncertainty for the companies with maquiladora operations. Maquiladoras that were importing from third countries, such as Japan or China, would have to pay applicable tariffs on those goods under the new rules."], "subsections": []}]}, {"section_title": "Worker Remittances to Mexico", "paragraphs": ["Remittances are one of the three highest sources of foreign currency for Mexico, along with foreign direct investment and tourism. Most remittances to Mexico come from workers in the United States who send money back to their relatives. Mexico receives the largest amount of remittances in Latin America. Remittances are often a stable financial flow for some regions as workers in the United States make efforts to send money to family members. Most go to southern states where poverty levels are high. Women tend to be the primary recipients of the money, and usually use it for basic needs such as rent, food, medicine, and/or utilities.", "The year 2017 was a record-breaking one for remittances to Mexico, with a total of $28.8 billion, which represents an increase of 7.5% over the 2016 level. In 2016, annual remittances to Mexico increased by 8.7% to a record high at the time of $27.0 billion (see Figure 3 ). Some analysts contend that the increase is partially due to the sharp devaluation of the Mexican peso after the election of President Donald Trump, while others state that it is a shock reaction to President Trump's threat to block money transfers to Mexico to pay for a border wall. The weaker value of the peso has negatively affected its purchasing power in Mexico, especially among the poor, and many families have had to rely more on money sent from their relatives in the United States. Since the late 1990s, remittances have been an important source of income for many Mexicans. Between 1996 and 2007, remittances increased from $4.2 billion to $26.1 billion, an increase of over 500%, and then declined by 15.2%, in 2009, likely due to the global financial crisis. The growth rate in remittances has been related to the frequency of sending, exchange rate fluctuations, migration, and employment in the United States. ", "Electronic transfers and money orders are the most popular methods to send money to Mexico. Worker remittance flows to Mexico have an important impact on the Mexican economy, in some regions more than others. Some studies report that in southern Mexican states, remittances mostly or completely cover general consumption and/or housing. A significant portion of the money received by households goes for food, clothing, health care, and other household expenses. Money also may be used for capital invested in microenterprises throughout urban Mexico. The economic impact of remittance flows is concentrated in the poorer states of Mexico."], "subsections": []}, {"section_title": "Bilateral Economic Cooperation", "paragraphs": ["The United States has engaged in bilateral efforts with Mexico, and also with Canada, to address issues related to border security, trade facilitation, economic competitiveness, regulatory cooperation, and energy integration. "], "subsections": [{"section_title": "High Level Economic Dialogue (HLED)", "paragraphs": ["The United States and Mexico launched the High Level Economic Dialogue (HLED) on September 20, 2013, to help advance U.S.-Mexico economic and commercial priorities that are central to promoting mutual economic growth, job creation, and global competitiveness. The initiative is led at the Cabinet level and is co-chaired by the U.S. Department of State, Department of Commerce, the Office of the United States Trade Representative, and their Mexican counterparts. ", "Major goals of the HLED are meant to build on, but not duplicate, a range of existing bilateral dialogues and working groups. The United States and Mexico aim to promote competitiveness in specific sectors such as transportation, telecommunications, and energy, as well as to promote greater two-way investment. ", "The HLED is organized around three broad pillars, including ", "1. Promoting competitiveness and connectivity; 2. Fostering economic growth, productivity, and innovation; and 3. Partnering for regional and global leadership. ", "The HLED is also meant to explore ways to promote entrepreneurship, stimulate innovation, and encourage the development of human capital to meet the needs of the 21 st century economy, as well as examine initiatives to strengthen economic development along the U.S.-Mexico border region. "], "subsections": []}, {"section_title": "High-Level Regulatory Cooperation Council", "paragraphs": ["Another bilateral effort is the U.S.-Mexico High-Level Regulatory Cooperation Council (HLRCC), launched in May 2010. The official work plan was released by the two governments on February 28, 2012, and focuses on regulatory cooperation in numerous sectoral issues including food safety, e-certification for plants and plant products, commercial motor vehicle safety standards and procedures, nanotechnology, e-health, and offshore oil and gas development standards. U.S. agencies involved in regulatory cooperation include the U.S. Food and Drug Administration, Department of Agriculture, Department of Transportation, Office of Management and Budget, Department of the Interior, and Occupational Safety and Health Administration. "], "subsections": []}, {"section_title": "21st Century Border Management", "paragraphs": ["The United States and Mexico are engaged in a bilateral border management initiative under the Declaration Concerning 21 st Century Border Management that was announced in 2010. This initiative is a bilateral effort to manage the 2,000-mile U.S.-Mexico border through the following cooperative efforts: expediting legitimate trade and travel; enhancing public safety; managing security risks; engaging border communities; and setting policies to address possible statutory, regulatory, and/or infrastructure changes that would enable the two countries to improve collaboration. With respect to port infrastructure, the initiative specifies expediting legitimate commerce and travel through investments in personnel, technology, and infrastructure. The two countries established a Bilateral Executive Steering Committee (ESC) composed of representatives from the appropriate federal government departments and offices from both the United States and Mexico. For the United States, this includes representatives from the Departments of State, Homeland Security, Justice, Transportation, Agriculture, Commerce, Interior, and Defense, and the Office of the United States Trade Representative. For Mexico, it includes representatives from the Secretariats of Foreign Relations, Interior, Finance and Public Credit, Economy, Public Security, Communications and Transportation, Agriculture, and the Office of the Attorney General of the Republic."], "subsections": []}, {"section_title": "North American Leaders Summits", "paragraphs": ["Since 2005, the United States, Canada, and Mexico have made efforts to increase cooperation on economic and security issues through various endeavors. President George W. Bush and President Barack Obama, with the leaders of Mexico and Canada, participated in trilateral summits known as the North American Leaders' Summits (NALS). The first NALS took place in March 2005, in Waco, Texas, and was followed by numerous trilateral summits in Mexico, Canada, and the United States. President Obama participated in the last summit on June 29, 2016, in Ottawa, Canada, with an agenda focused on economic competitiveness, climate change, clean energy, the environment, regional and global cooperation, security, and defense. President Donald Trump has not indicated whether his Administration plans to continue NALS efforts. ", "The United States has pursued other efforts with Canada and Mexico, many of which have built upon the accomplishments of the working groups formed under the NALS. These efforts include the North American Competitiveness Work Plan (NACW) and the North American Competitiveness and Innovation Conference (NACIC). ", "Proponents of North American competitiveness and security cooperation view the initiatives as constructive to addressing issues of mutual interest and benefit for all three countries, especially in the areas of North American regionalism; inclusive and shared prosperity; innovation and education; energy and climate change; citizen security; and regional, global, and stakeholder outreach to Central America and other countries in the Western Hemisphere. Some critics believe that the summits and other trilateral efforts are not substantive enough and that North American leaders should make their meetings more consequential with follow-up mechanisms that are more action oriented. Others contend that the efforts do not go far enough in including human rights issues or discussions on drug-related violence in Mexico."], "subsections": []}]}]}, {"section_title": "The Mexican Economy", "paragraphs": ["Mexico's economy is closely linked to the U.S. economy due to the strong trade and investment ties between the two countries. Economic growth has been slow in recent years. The forecast over the next few years projects economic growth of above 2%, a positive outlook, according to some economists, given external constraints but falling short of what the country needs to make a significant cut in poverty and to create jobs. ", "Over the past 30 years, Mexico has had a low economic growth record with an average growth rate of 2.6%. Mexico's GDP grew by 2.4% in 2017 and 2.1% in 2016. The country benefitted from important structural reforms initiated in the early 1990s, but events such as the U.S. recession of 2001 and the global economic downturn of 2009 adversely affected the economy and offset the government's efforts to improve macroeconomic management. ", "The OECD outlook for Mexico for 2018 states that there are some encouraging signs for potential economic growth, including improvements in fiscal performance, responsible and reliable monetary policy to curb inflation, growth in manufacturing exports and inflows of foreign direct investment, and positive developments due to government reforms in telecommunications, energy, labor, education, and other structural reforms. According to the OECD, full implementation of Mexico's structural reforms could add as much as 1% to the annual growth rate of the Mexican economy. While these achievements may be positive, Mexico continues to face significant challenges in regard to alleviating poverty, decreasing informality, strengthening judicial institutions, addressing corruption, and increasing labor productivity.", "Trends in Mexico's GDP growth generally follow U.S. economic trends, as shown in Figure 4 , but with higher fluctuations. Mexico's economy is highly dependent on manufacturing exports to the United States, as approximately 80% of Mexico's exports are destined for the United States. The country's outlook will likely remain closely tied to that of the United States, despite Mexico's efforts to diversify trade."], "subsections": [{"section_title": "Informality and Poverty", "paragraphs": ["Part of the government's reform efforts are aimed at making economic growth more inclusive, reducing income inequality, improving the quality of education, and reducing informality and poverty. Mexico has a large informal sector that is estimated to account for a considerable portion of total employment. Estimates on the size of the informal labor sector vary widely, with some sources estimating that the informal sector accounts for about one-third of total employment and others estimating it to be as high as two-thirds of the workforce. Under Mexico's legal framework, workers in the formal sector are defined as salaried workers employed by a firm that registers them with the government and are covered by Mexico's social security programs. Informal sector workers are defined as nonsalaried workers who are usually self-employed. These workers have various degrees of entitlement to other social protection programs. Salaried workers can be employed by industry, such as construction, agriculture, or services. Nonsalaried employees are defined by social marginalization or exclusion and can be defined by various categories. These workers may include agricultural producers; seamstresses and tailors; artisans; street vendors; individuals who wash cars on the street; and other professions. ", "Many workers in the informal sector suffer from poverty, which has been one of Mexico's more serious and pressing economic problems for many years. Although the government has made progress in poverty reduction efforts, poverty continues to be a basic challenge for the country's development. The Mexican government's efforts to alleviate poverty have focused on conditional cash transfer programs. The Prospera (previously called Oportunidades ) program seeks to not only alleviate the immediate effects of poverty through cash and in-kind transfers, but to break the cycle of poverty by improving nutrition and health standards among poor families and increasing educational attainment. Prospera has provided cash transfers to the poorest 6.9 million Mexican households located in localities from all 32 Mexican states. It has been replicated in about two dozen countries throughout the world. The program provides cash transfers to families in poverty who demonstrate that they regularly attend medical appointments and can certify that children are attending school. The government also provides educational cash transfers to participating families. Programs also provide nutrition support to pregnant and nursing women and malnourished children.", "Some economists cite the informal sector as a hindrance to the country's economic development. Other experts contend that Mexico's social programs benefitting the informal sector have led to increases in informal employment. "], "subsections": []}, {"section_title": "Structural and Other Economic Challenges", "paragraphs": ["For years, numerous political analysts and economists have agreed that Mexico needs significant political and economic structural reforms to improve its potential for long-term economic growth. President Pe\u00f1a Nieto was successful in breaking the gridlock in the Mexican government and passing reform measures meant to stimulate economic growth. The OECD stated that the main challenge for the government is to ensure full implementation of the reforms and that it needed to progress further in other key areas. According to the OECD, Mexico must improve administrative capacity at all levels of government and reform its judicial institutions. Such actions would have a strong potential to boost living standards substantially, stimulate economic growth, and reduce income inequality. The OECD stated that issues regarding human rights conditions, rule of law, and corruption were also challenges that needed to be addressed by the government, as they too affect economic conditions and living standards. ", "According to a 2014 study by the McKinsey Global Institute, Mexico had successfully created globally competitive industries in some sectors, but not in others. The study described a \"dualistic\" nature of the Mexican economy in which there was a modern Mexico with sophisticated automotive and aerospace factories, multinationals that could compete in global markets, and universities that graduated high numbers of engineers. In contrast, the other part of Mexico, consisting of smaller, more traditional firms, was technologically backward, unproductive, and operated outside the formal economy. The study stated that three decades of economic reforms had failed to raise the overall GDP growth. Government measures to privatize industries, liberalize trade, and welcome foreign investment created a side to the economy that was highly productive in which numerous industries had flourished, but the reforms had not yet been successful in touching other sectors of the economy where traditional enterprises had not modernized, informality was rising, and productivity was plunging. "], "subsections": []}, {"section_title": "Energy", "paragraphs": ["Mexico's long-term economic outlook depends largely on the energy sector. The country is one of the largest oil producers in the world, but its oil production has steadily decreased since 2005 as a result of natural production declines. According to industry experts, Mexico has the potential resources to support a long-term recovery in total production, primarily in the Gulf of Mexico. However, the country does not have the technical capability or financial means to develop potential deepwater projects or shale oil deposits in the north. Reversing these trends is a goal of the 2013 historic constitutional energy reforms sought by President Pe\u00f1a Nieto and enacted by the Mexican Congress. The reforms opened Mexico's energy sector to production-sharing contracts with private and foreign investors while keeping the ownership of Mexico's hydrocarbons under state control. They will likely expand U.S.-Mexico energy trade and provide opportunities for U.S. companies involved in the hydrocarbons sector, as well as infrastructure and other oil field services.", "The North American Free Trade Agreement (NAFTA) excluded foreign investment in Mexico's energy sector. Under NAFTA's energy chapter, parties confirmed respect for their constitutions, which was of particular importance for Mexico and its 1917 Constitution establishing Mexican national ownership of all hydrocarbons resources and restrictions of private or foreign participation in its energy sector. Under NAFTA, Mexico also reserved the right to provide electricity as a domestic public service. ", "In the NAFTA renegotiations (see section below on \" NAFTA Renegotiation and the U.S.-Mexico-Canada Agreement (USMCA) \"), the United States sought to preserve and strengthen investment, market access, and state-owned enterprise disciplines benefitting energy production and transmission. In addition, the negotiating objectives stated that the United States supports North American energy security and independence, and promotes the continuation of energy market-opening reforms. Mexico specifically called for a modernization of NAFTA's energy provisions. The USMCA retains recognition of Mexico's national ownership of all hydrocarbons. ", "Some observers contend that much is at stake for the North American oil and gas industry in the bilateral economic relationship, especially in regard to Mexico as an energy market for the United States. Although Mexico was traditionally a net exporter of hydrocarbons to the United States, the United States had a trade surplus in 2016 of almost $10 billion in energy trade as a result of declining Mexican oil production, lower oil prices, and rising U.S. natural gas and refined oil exports to Mexico. The growth in U.S. exports is largely due to Mexico's reforms, which have driven investment in new natural gas-powered electricity generation and the retail gasoline market. Some observers contend that dispute settlement mechanisms in NAFTA and the proposed USMCA will defend the interests of the U.S. government and U.S. companies doing business in Mexico. They argue that the dispute settlement provisions and the investment chapter of the agreement will help protect U.S. multibillion-dollar investments in Mexico. They argue that a weakening of NAFTA's dispute settlement provisions would result in less protection of U.S. investors in Mexico and less investor confidence."], "subsections": []}, {"section_title": "Mexico's Regional Trade Agreements", "paragraphs": ["Mexico has had a growing commitment to trade integration and liberalization through the formation of FTAs since the 1990s, and its trade policy is among the most open in the world. Mexico's pursuit of FTAs with other countries not only provides domestic economic benefits, but could also potentially reduce its economic dependence on the United States."], "subsections": [{"section_title": "Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) Agreement", "paragraphs": ["Mexico signed the Trans-Pacific Partnership (TPP), a negotiated regional free trade agreement (FTA), but which has not entered into force, among the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. In January 2017, the United States gave notice to the other TPP signatories that it does not intend to ratify the agreement. ", "On March 8, 2018, Mexico and the 10 remaining signatories of the TPP signed the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). The CPTPP parties announced the outlines of the agreement in November 2017 and concluded the negotiations in January 2018. The CPTPP, which will enact much of the proposed TPP without the participation of the United States, is set to take effect on December 30, 2018. It requires ratification by 6 of the 11 signatories to become effective. As of October 31, 2018, Mexico, Canada, Australia, Japan, New Zealand, and Singapore had ratified the agreement. Upon entry into force, it will reduce and eliminate tariff and nontariff barriers on goods, services, and agriculture. It could enhance the links Mexico already has through its FTAs with other signatories\u2014Canada, Chile, Japan, and Peru\u2014and expand its trade relationship with other countries, including Australia, Brunei, Malaysia, New Zealand, Singapore, and Vietnam. "], "subsections": []}, {"section_title": "Mexico's Free Trade Agreements", "paragraphs": ["Mexico has a total of 11 free trade agreements involving 46 countries. These include agreements with most countries in the Western Hemisphere, including the United States and Canada under NAFTA, Chile, Colombia, Costa Rica, Nicaragua, Peru, Guatemala, El Salvador, and Honduras. In addition, Mexico has negotiated FTAs outside of the Western Hemisphere and entered into agreements with Israel, Japan, and the European Union. ", "Given the perception of a rising protectionist sentiment in the United States, some regional experts have suggested that Mexico is seeking to negotiate new FTAs more aggressively and deepen existing ones. In addition to being a party to the CPTPP, Mexico and the EU renegotiated their FTA and modernized it with updated provisions. Discussions included government procurement, energy trade, IPR protection, rules of origin, and small- and medium-sized businesses. The new agreement is expected to replace a previous agreement between Mexico and the EU from 2000. The agreement is expected to allow almost all goods, including agricultural products, to move between Europe and Mexico duty-free. Mexico is also a party to the Pacific Alliance, a regional integration initiative formed by Chile, Colombia, Mexico, and Peru in 2011. Its main purpose is to form a regional trading bloc and stronger ties with the Asia-Pacific region. The Alliance has a larger scope than free trade agreements, including the free movement of people and measures to integrate the stock markets of member countries."], "subsections": []}]}]}, {"section_title": "NAFTA", "paragraphs": ["NAFTA has been in effect since January 1994. Prior to NAFTA, Mexico was already liberalizing its protectionist trade and investment policies that had been in place for decades. The restrictive trade regime began after Mexico's revolutionary period, and remained until the early to mid-1980s, when it began to shift to a more open, export-oriented economy. For Mexico, an FTA with the United States represented a way to lock in trade liberalization reforms, attract greater flows of foreign investment, and spur economic growth. For the United States, NAFTA represented an opportunity to expand the growing export market to the south, but it also represented a political opportunity to improve the relationship with Mexico."], "subsections": [{"section_title": "NAFTA Renegotiation and the U.S.-Mexico-Canada Agreement (USMCA)", "paragraphs": ["On November 30, 2018, the United States, Canada, and Mexico signed the proposed USMCA. Concluded on September 30, 2018, USMCA would revise and modernize NAFTA. The proposed USMCA would have to be approved by Congress and ratified by Mexico and Canada before entering into force. Pursuant to trade promotion authority (TPA), the preliminary agreement with Mexico was notified to Congress on August 31, 2018, in part to allow for the signing of the agreement prior to Mexico's president-elect Andreas Manuel Lopez Obrador taking office on December 1, 2018. TPA contains certain notification and reporting requirements that likely will push any consideration of implementing legislation into the 116 th Congress.", "USMCA, comprised of 34 chapters and 12 side letters, retains most of NAFTA's chapters, making notable changes to market access provisions for autos and agriculture products, and to rules such as investment, government procurement, and intellectual property rights (IPR). New issues, such as digital trade, state-owned enterprises, anticorruption, and currency misalignment, are also addressed.", "NAFTA renegotiation provided opportunities to modernize the 1994 agreement by addressing issues not covered in the original text and updating others. Many U.S. manufacturers, services providers, and agricultural producers opposed efforts to withdraw from NAFTA and asked the Trump Administration to \"do no harm\" in the negotiations because they have much to lose if the United States pulls out of the agreement. Contentious issues in the negotiations reportedly included auto rules of origin, a \"sunset clause\" related to the trade deficit, dispute settlement provisions, and agriculture provisions on seasonal produce."], "subsections": []}, {"section_title": "Possible Effect of Withdrawal from NAFTA", "paragraphs": ["President Trump stated on December 1, 2018, that he intends to notify Mexico and Canada that he intends to withdraw from NAFTA with a notice of six months. A NAFTA withdrawal by the United States prior to congressional approval of the proposed USMCA would have significant implications going forward for U.S. trade policy and U.S.-Mexico economic relations. Numerous think tanks and economists have written about the possible economic consequences of U.S. withdrawal from NAFTA:", "An analysis by the Peterson Institute for International Economics (PIIE) finds that a withdrawal from NAFTA would cost the United States 187,000 jobs that rely on exports to Mexico and Canada. These job losses would occur over a period of one to three years. By comparison, according to the study, between 2013 and 2015, 7.4 million U.S. workers were displaced or lost their jobs involuntarily due to companies shutting down or moving elsewhere globally. The study notes that the most affected states would be Arkansas, Kentucky, Mississippi, and Indiana. The most affected sectors would be autos, agriculture, and nonauto manufacturing. A 2017 study by ImpactEcon, an economic analysis consulting company, estimates that if NAFTA were to terminate, real GDP, trade, investment, and employment in all three NAFTA countries would decline. The study estimates U.S. job losses of between 256,000 and 1.2 million in three to five years, with about 95,000 forced to relocate to other sectors. Canadian and Mexican employment of low-skilled workers would decline by 125,000 and 951,000 respectively. The authors of the study estimate a decline in U.S. GDP of 0.64% (over $100 billion). The Coalition of Services Industries (CSI) argues that NAFTA continues to be a remarkable success for U.S. services providers, creating a vast market for U.S. services providers, such as telecommunications and financial services. CSI estimates that if NAFTA is terminated, the United States risks losing $88 billion in annual U.S. services exports to Canada and Mexico, which support 587,000 high-paying U.S. jobs.", "Opponents of NAFTA argue that it has resulted in thousands of lost jobs to Mexico and has put downward pressure on U.S. wages. A study by the Economic Policy Institute estimates that, as of 2010, U.S. trade deficits with Mexico had displaced 682,900 U.S. jobs. Others contend that workers need more effective protections in trade agreements, with stronger enforcement mechanisms. For example, the AFL-CIO states that current U.S. FTAs have no deadlines or criteria for pursuing sanctions against a trade partner that is not enforcing its FTA commitments. The AFL-CIO contends that the language tabled by the United States in the renegotiations does nothing to improve long-standing shortcomings in NAFTA.", "Canada and Mexico likely would maintain NAFTA between themselves if the United States were to withdraw. U.S.-Canada trade could be governed either by the Canada-U.S. free trade agreement (CUSFTA), which entered into force in 1989 (suspended since the advent of NAFTA), or by the baseline commitments common to both countries as members of the World Trade Organization. If CUSFTA remains in effect, the United States and Canada would continue to exchange goods duty free and would continue to adhere to many provisions of the agreement common to both CUSFTA and NAFTA. Some commitments not included in the CUSFTA, such as intellectual property rights, would continue as baseline obligations in the WTO. It is unclear whether CUSFTA would remain in effect as its continuance would require the assent of both parties."], "subsections": []}]}, {"section_title": "Selected Bilateral Trade Disputes", "paragraphs": ["The United States and Mexico have had a number of trade disputes over the years, many of which have been resolved. These issues have involved trade in sugar, country of origin labeling, tomato imports from Mexico, dolphin-safe tuna labeling, and NAFTA trucking provisions. "], "subsections": [{"section_title": "Section 232 and U.S. Tariffs on Steel and Aluminum Imports", "paragraphs": ["The United States and Mexico are currently in a trade dispute over U.S. actions to impose tariffs on imports of steel and aluminum. The United States claims its actions are due to national security concerns; however, Mexico contends that U.S. tariffs are meant to protect domestic industries from import competition and are inconsistent with the World Trade Organization (WTO) Safeguard Agreement.", "On March 8, 2018, President Trump issued two proclamations imposing tariffs on U.S. imports of certain steel and aluminum products, respectively, using presidential powers granted under Section 232 of the Trade Expansion Act of 1962. Section 232 authorizes the President to impose restrictions on certain imports based on an affirmative determination by the Department of Commerce that the targeted import products threaten to impair national security. The proclamations outlined the President's decisions to impose tariffs of 25% on steel and 10% on aluminum imports, with some flexibility on the application of tariffs by country. On March 22, the President issued proclamations temporarily excluding Mexico, Canada, and numerous other countries, giving a deadline of May 1, by which time each trading partner had to negotiate an alternative means to remove the \"threatened impairment to the national security by import\" for steel and aluminum in order to maintain the exemption. After the temporary exception expired on May 31, 2018, the United States began imposing a 25% duty on steel imports and a 10% duty on aluminum imports from Mexico and Canada. ", "The conclusion of the proposed USMCA did not resolve or address the Section 232 tariffs on imported steel and aluminum from Canada and Mexico. The three parties continue to discuss the tariffs, which some analysts believe could result in quotas on imports of Mexican and Canadian steel and aluminum. ", "In response to the U.S. action, Mexico and several other major partners initiated dispute settlement proceedings and announced their intention to retaliate against U.S. exports. Mexico announced it would impose retaliatory tariffs on 71 U.S. products, covering an estimated $3.7 billion worth of trade, as shown in Table 4 . Mexico is a major U.S. partner for both steel and aluminum trade. In 2017, Mexico ranked second, after Canada, among U.S. trading partners for both steel and aluminum. U.S.-Mexico trade in steel and aluminum totaled $10.3 billion in 2017, as shown in Table 5 . "], "subsections": []}, {"section_title": "Dolphin-Safe Tuna Labeling Dispute", "paragraphs": ["The United States and Mexico are currently involved in a trade dispute under the WTO regarding U.S. dolphin-safe labeling provisions and tuna imports from Mexico. Mexico has long argued that U.S. labeling rules for dolphin-safe tuna negatively affect its tuna exports to the United States. The United States contends that Mexico's use of nets and chasing dolphins to find large schools of tuna is harmful to dolphins. The most recent development in the long trade battle took place on April 25, 2017, when a WTO arbitrator determined that Mexico is entitled to levy trade restrictions on imports from the United States worth $163.2 million per year. The arbitrator made the decision based on a U.S. action from 2013 (see section below on \" WTO Tuna Dispute Proceedings \"), but did not make a compliance judgment on the U.S. 2016 dolphin-safe tuna labeling rule that the United States has said brings it into compliance with the WTO's previous rulings."], "subsections": [{"section_title": "Dispute over U.S. Labeling Provisions", "paragraphs": ["The issue relates to U.S. labeling provisions that establish conditions under which tuna products may voluntarily be labeled as \"dolphin-safe.\" Products may not be labeled as dolphin-safe if the tuna is caught by means that include intentionally encircling dolphins with nets. According to the Office of the United States Trade Representative (USTR), some Mexican fishing vessels use this method when fishing for tuna. Mexico asserts that U.S. tuna labeling provisions deny Mexican tuna effective access to the U.S. market.", "The government of Mexico requested the United States to broaden its dolphin-safe rules to include Mexico's long-standing tuna fishing technique. It cites statistics showing that modern equipment has greatly reduced dolphin mortality from its height in the 1960s and that its ships carry independent observers who can verify dolphin safety. However, some environmental groups that monitor the tuna industry dispute these claims, stating that even if no dolphins are killed during the chasing and netting, some are wounded and later die. In other cases, they argue, young dolphin calves may not be able to keep pace and are separated from their mothers and later die. These groups contend that if the United States changes its labeling requirements, cans of Mexican tuna could be labeled as \"dolphin-safe\" when it is not. However, an industry spokesperson representing three major tuna processors in the United States, including StarKist, Bumblebee, and Chicken of the Sea, contends that U.S. companies would probably not buy Mexican tuna even if it is labeled as dolphin-safe because these companies \"would not be in the market for tuna that is not caught in the dolphin-safe manner.\""], "subsections": []}, {"section_title": "WTO Tuna Dispute Proceedings", "paragraphs": ["The tuna labeling dispute began over 10 years ago. In April 2000, the Clinton Administration lifted an embargo on Mexican tuna under relaxed standards for a dolphin-safe label. This was in accordance with internationally agreed procedures and U.S. legislation passed in 1997 that encouraged the unharmed release of dolphins from nets. However, a federal judge in San Francisco ruled that the standards of the law had not been met, and the Federal Appeals Court in San Francisco sustained the ruling in July 2001. Under the Bush Administration, the Commerce Department ruled on December 31, 2002, that the dolphin-safe label may be applied if qualified observers certify that no dolphins were killed or seriously injured in the netting process. Environmental groups, however, filed a suit to block the modification. On April 10, 2003, the U.S. District Court for the Northern District of California enjoined the Commerce Department from modifying the standards for the dolphin-safe label. On August 9, 2004, the federal district court ruled against the Bush Administration's modification of the dolphin-safe standards and reinstated the original standards in the 1990 Dolphin Protection Consumer Information Act. That decision was appealed to the U.S. Ninth Circuit Court of Appeals, which ruled against the Administration in April 2007, finding that the Department of Commerce did not base its determination on scientific studies of the effects of Mexican tuna fishing on dolphins. ", "In late October 2008, Mexico initiated WTO dispute proceedings against the United States, maintaining that U.S. requirements for Mexican tuna exporters prevent them from using the U.S. \"dolphin-safe\" label for its products. The United States requested that Mexico refrain from proceeding in the WTO and that the case be moved to the NAFTA dispute resolution mechanism. According to the USTR, however, Mexico \"blocked that process for settling this dispute.\" In September 2011, a WTO panel determined that the objectives of U.S. voluntary tuna labeling provisions were legitimate and that any adverse effects felt by Mexican tuna producers were the result of choices made by Mexico's own fishing fleet and canners. However, the panel also found U.S. labeling provisions to be \"more restrictive than necessary to achieve the objectives of the measures.\" The Obama Administration appealed the WTO ruling.", "On May 16, 2012, the WTO's Appellate Body overturned two key findings from the September 2011 WTO dispute panel. The Appellate Body found that U.S. tuna labeling requirements violate global trade rules because they treat imported tuna from Mexico less favorably than U.S. tuna. The Appellate Body also rejected Mexico's claim that U.S. tuna labeling requirements were more trade-restrictive than necessary to meet the U.S. objective of minimizing dolphin deaths. The United States had a deadline of July 13, 2013, to comply with the WTO dispute ruling. In July 2013, the United States issued a final rule amending certain dolphin-safe labelling requirements to bring it into compliance with the WTO labeling requirements. On November 14, 2013, Mexico requested the establishment of a WTO compliance panel. On April 16, 2014, the chair of the compliance panel announced that it expected to issue its final report to the parties by December 2014. In April 2015, the panel ruled against the United States when it issued its finding that the U.S. labeling modifications unfairly discriminated against Mexico's fishing industry.", "On November 2015, a WTO appellate body found for a fourth time that U.S. labeling rules aimed at preventing dolphin bycatch violate international trade obligations. The United States expressed concerns with this ruling and stated that the panel exceeded its authority by ruling on acts and measures that Mexico did not dispute or were never applied. On March 16, 2016, Mexico announced that it would ask the WTO to sanction $472.3 million in annual retaliatory tariffs against the United States for its failure to comply with the WTO ruling. The United States counterargued that Mexico could seek authorization to suspend concessions of $21.9 million. On March 22, 2016, the United States announced that it would revise its dolphin-safe label requirements on tuna products to comply with the WTO decision. The revised regulations sought to increase labeling rules for tuna caught by fishing vessels in all regions of the world, and not just those operating in the region where Mexican vessels operate. The new rules did not modify existing requirements that establish the method by which tuna is caught in order for it to be labeled \"dolphin-safe.\" The Humane Society International announced that it was pleased with U.S. actions to increase global dolphin protections."], "subsections": []}]}, {"section_title": "Sugar Disputes", "paragraphs": [], "subsections": [{"section_title": "2014 Mexican Sugar Import Dispute", "paragraphs": ["On December 19, 2014, the U.S. Department of Commerce (DOC) signed an agreement with the Government of Mexico suspending the U.S. countervailing duty (CVD) investigation of sugar imports from Mexico. The DOC signed a second agreement with Mexican sugar producers and exporters suspending an antidumping (AD) duty investigation on imports of Mexican sugar. The agreements suspending the investigations alter the nature of trade in sugar between Mexico and the United States by (1) imposing volume limits on U.S. sugar imports from Mexico and (2) setting minimum price levels on Mexican sugar. ", "After the suspension agreement was announced, two U.S. sugar companies, Imperial Sugar Company and AmCane Sugar LLC, requested that the DOC continue the CVD and AD investigations on sugar imports from Mexico. The two companies filed separate submissions on January 16, 2015, claiming \"interested party\" status. The companies claimed they met the statutory standards to seek continuation of the probes. The submissions to the DOC followed requests to the ITC, by the same two companies, to review the two December 2014 suspension agreements. The ITC reviewed the sugar suspension agreements to determine whether they eliminate the injurious effect of sugar imports from Mexico. On March 19, 2015, the ITC upheld the agreement between the United States and Mexico that suspended the sugar investigations. Mexican Economy Minister Ildefonso Guajardo Villarreal praised the ITC decision, stating that it supported the Mexican government position.", "The dispute began on March 28, 2014, when the American Sugar Coalition and its members filed a petition requesting that the U.S. ITC and the DOC conduct an investigation, alleging that Mexico was dumping and subsidizing its sugar exports to the United States. The petitioners claimed that dumped and subsidized sugar exports from Mexico were harming U.S. sugar producers and workers. They claimed that Mexico's actions would cost the industry $1 billion in 2014. On April 18, 2014, the DOC announced the initiation of AD and CVD investigations of sugar imports from Mexico. On May 9, 2014, the ITC issued a preliminary report stating that there was a reasonable indication a U.S. industry was materially injured by imports of sugar from Mexico that were allegedly sold in the United States at less than fair value and allegedly subsidized by the Government of Mexico. ", "In August 2014, the DOC announced in its preliminary ruling that Mexican sugar exported to the United States was being unfairly subsidized. Following the preliminary subsidy determination, the DOC stated that it would direct the U.S. Customs and Border Protection to collect cash deposits on imports of Mexican sugar. Based on the preliminary findings, the DOC imposed cumulative duties on U.S. imports of Mexican sugar, ranging from 2.99% to 17.01% under the CVD order. Additional duties of between 39.54% and 47.26% were imposed provisionally following the preliminary AD findings. The final determination in the two investigations was expected in 2015 and had not been issued when the suspension agreements were signed. ", "The Sweetener Users Association (SUA), which represents beverage makers, confectioners, and other food companies, argues that the case is \"a diversionary tactic to distract from the real cause of distortion in the U.S. sugar market\u2014the U.S. government's sugar program.\" It contends that between 2009 and 2012, U.S. sugar prices soared well above the world price because of the U.S. program, providing an incentive for sugar growers to increase production. According to the sugar users association, this resulted in a surplus of sugar and a return to lower sugar prices. The SUA has been a long-standing critic of the U.S. sugar program. "], "subsections": []}, {"section_title": "Sugar and High Fructose Corn Syrup Dispute Resolved in 2006", "paragraphs": ["In 2006, the United States and Mexico resolved a trade dispute involving sugar and high fructose corn syrup. The dispute involved a sugar side letter negotiated under NAFTA. Mexico argued that the side letter entitled it to ship net sugar surplus to the United States duty-free under NAFTA, while the United States argued that the sugar side letter limited Mexican shipments of sugar. In addition, Mexico complained that imports of high fructose corn syrup (HFCS) sweeteners from the United States constituted dumping. It imposed antidumping duties for some time, until NAFTA and WTO dispute resolution panels upheld U.S. claims that the Mexican government colluded with the Mexican sugar and sweetener industries to restrict HFCS imports from the United States.", "In late 2001, the Mexican Congress imposed a 20% tax on soft drinks made with corn syrup sweeteners to aid the ailing domestic cane sugar industry, and subsequently extended the tax annually despite U.S. objections. In 2004, the United States Trade Representative (USTR) initiated WTO dispute settlement proceedings against Mexico's HFCS tax, and following interim decisions, the WTO panel issued a final decision on October 7, 2005, essentially supporting the U.S. position. Mexico appealed this decision, and in March 2006, the WTO Appellate Body upheld its October 2005 ruling. In July 2006, the United States and Mexico agreed that Mexico would eliminate its tax on soft drinks made with corn sweeteners no later than January 31, 2007. The tax was repealed, effective January 1, 2007.", "The United States and Mexico reached a sweetener agreement in August 2006. Under the agreement, Mexico can export 500,000 metric tons of sugar duty-free to the United States from October 1, 2006, to December 31, 2007. The United States can export the same amount of HFCS duty-free to Mexico during that time. NAFTA provides for the free trade of sweeteners beginning January 1, 2008. The House and Senate sugar caucuses expressed objections to the agreement, questioning the Bush Administration's determination that Mexico is a net-surplus sugar producer to allow Mexican sugar duty-free access to the U.S. market."], "subsections": []}]}, {"section_title": "Country-of-Origin Labeling (COOL)", "paragraphs": ["The United States was involved in a country-of-origin labeling (COOL) trade dispute under the World Trade Organization (WTO) with Canada and Mexico for several years, which has now been resolved. Mexican and Canadian meat producers claimed that U.S. mandatory COOL requirements for animal products discriminated against their products. They contended that the labeling requirements created an incentive for U.S. meat processors to use exclusively domestic animals because they forced processors to segregate animals born in Mexico or Canada from U.S.-born animals, which was very costly. They argued that the COOL requirement was an unfair barrier to trade. A WTO appellate panel in June 2013 ruled against the United States. The United States appealed the decision. On May 18, 2015, the WTO appellate body issued findings rejecting the U.S. arguments against the previous panel's findings. Mexico and Canada were considering imposing retaliatory tariffs on a wide variety of U.S. exports to Mexico, including fruits and vegetables, juices, meat products, dairy products, machinery, furniture and appliances, and others. ", "The issue was resolved when the Consolidated Appropriations Act of 2016 ( P.L. 114-113 ) repealed mandatory COOL requirements for muscle cut beef and pork and ground beef and ground pork. USDA issued a final rule removing country-of-origin labeling requirements for these products. The rule took effect on March 2, 2016. The estimated economic benefits associated with the final rule are likely to be significant, according to the U.S. Department of Agriculture (USDA). According to USDA, the estimated benefits for producers, processors, wholesalers, and retailers of previously covered beef and pork products are as much as $1.8 billion in cost avoidance, though the incremental cost savings are likely to be less as affected firms had adjusted their operations.", "The dispute began on December 1, 2008, when Canada requested WTO consultations with the United States concerning certain mandatory labeling provisions required by the 2002 farm bill ( P.L. 107-171 ) as amended by the 2008 farm bill ( P.L. 110-246 ). On December 12, 2008, Mexico requested to join the consultations. U.S. labeling provisions include the obligation to inform consumers at the retail level of the country of origin in certain commodities, including beef and pork. ", "USDA labeling rules for meat and meat products had been controversial. A number of livestock and food industry groups opposed COOL as costly and unnecessary. Canada and Mexico, the main livestock exporters to the United States, argued that COOL had a discriminatory trade-distorting impact by reducing the value and number of cattle and hogs shipped to the U.S. market, thus violating WTO trade commitments. Others, including some cattle and consumer groups, maintained that Americans want and deserve to know the origin of their foods. ", "In November 2011, the WTO dispute settlement panel found that (1) COOL treated imported livestock less favorably than U.S. livestock and (2) it did not meet its objective to provide complete information to consumers on the origin of meat products. In March 2012, the United States appealed the WTO ruling. In June 2012, the WTO's Appellate Body upheld the finding that COOL treats imported livestock less favorably than domestic livestock and reversed the finding that it does not meet its objective to provide complete information to consumers. It could not determine if COOL was more trade restrictive than necessary. ", "In order to meet a compliance deadline by the WTO, USDA issued a revised COOL rule on May 23, 2013, that required meat producers to specify on retail packaging where each animal was born, raised, and slaughtered, which prohibited the mixing of muscle cuts from different countries. Canada and Mexico challenged the 2013 labeling rules before a WTO compliance panel. The compliance panel sided with Canada and Mexico; the United States appealed the decision. "], "subsections": []}, {"section_title": "NAFTA Trucking Issue", "paragraphs": ["The implementation of NAFTA trucking provisions was a major trade issue between the United States and Mexico for many years because the United States delayed its trucking commitments under NAFTA. NAFTA provided Mexican commercial trucks full access to four U.S.-border states in 1995 and full access throughout the United States in 2000. Mexican commercial trucks have authority under the agreement to operate in the United States, but they cannot operate between two points within the country. This means that they can haul cross-border loads but cannot haul loads that originate and end in the United States. The proposed USMCA would cap the number of Mexican-domiciled carriers that can receive U.S. operating authority and would continue the prohibition on Mexican-based carriers hauling freight between two points within the United States. Mexican carriers that already have authority under NAFTA to operate in the United States would continue to be allowed to operate in the United States.", "The United States delayed the implementation of NAFTA provisions because of safety concerns. The Mexican government objected to the delay and claimed that U.S. actions were a violation of U.S. commitments. A dispute resolution panel supported Mexico's position in February 2001. President Bush indicated a willingness to implement the provision, but the U.S. Congress required additional safety provisions in the FY2002 Department of Transportation Appropriations Act ( P.L. 107-87 ). The United States and Mexico cooperated to resolve the issue over the years and engaged in numerous talks regarding safety and operational issues. The United States had two pilot programs on cross-border trucking to help resolve the issue: the Bush Administration's pilot program of 2007 and the Obama Administration's program of 2011.", "A significant milestone in implementation of U.S. NAFTA commitments occurred on January 9, 2015, when the Department of Transportation's Federal Motor Carrier Safety Administration (FMCSA) announced that Mexican motor carriers would be allowed to conduct long-haul, cross-border trucking services in the United States. The International Brotherhood of Teamsters filed a lawsuit on March 20, 2015, in the Ninth Circuit U.S. Court of Appeals, seeking to halt FMCSA's move. On March 15, 2017, a three-judge panel heard the oral arguments of the legal challenge by the Teamsters, the Owner-Operator Independent Drivers Association, and two other organizations. These organizations argued that the FMCSA did not generate enough inspection data during the pilot program to properly make a determination about expanding the program. The Ninth Circuit Court of Appeals dismissed the lawsuit on June 29, 2017, stating that FMCSA has the law-given discretion to grant operating authority to Mexican carriers."], "subsections": [{"section_title": "Bush Administration's Pilot Program of 2007", "paragraphs": ["On November 27, 2002, with safety inspectors and procedures in place, the Bush Administration began the process to open U.S. highways to Mexican truckers and buses. Environmental and labor groups went to court in early December to block the action. On January 16, 2003, the U.S. Court of Appeals for the Ninth Circuit ruled that full environmental impact statements were required for Mexican trucks to be allowed to operate on U.S. highways. The U.S. Supreme Court reversed that decision on June 7, 2004. ", "In February 2007, the Bush Administration announced a pilot project to grant Mexican trucks from 100 transportation companies full access to U.S. highways. In September 2007, the Department of Transportation (DOT) launched a one-year pilot program to allow approved Mexican carriers beyond the 25-mile commercial zone in the border region, with a similar program allowing U.S. trucks to travel beyond Mexico's border and commercial zone. Over the 18 months that the program existed, 29 motor carriers from Mexico were granted operating authority in the United States. Two of these carriers dropped out of the program shortly after being accepted, while two others never sent trucks across the border. In total, 103 Mexican trucks were used by the carriers as part of the program.", "In the FY2008 Consolidated Appropriations Act ( P.L. 110-161 ), signed into law in December 2007, Congress included a provision prohibiting the use of FY2008 funding for the establishment of the pilot program. However, the DOT determined that it could continue with the pilot program because it had already been established. In March 2008, the DOT issued an interim report on the cross-border trucking demonstration project to the Senate Committee on Commerce, Science, and Transportation. The report made three key observations: (1) the Federal Motor Carrier Safety Administration (FMCSA) planned to check every participating truck each time it crossed the border to ensure that it met safety standards; (2) there was less participation in the project than was expected; and (3) the FMCSA implemented methods to assess possible adverse safety impacts of the project and to enforce and monitor safety guidelines.", "In early August 2008, DOT announced that it would extend the pilot program for an additional two years. In opposition to this action, the House approved on September 9, 2008 (by a vote of 396 to 128), H.R. 6630 , a bill that would have prohibited DOT from granting Mexican trucks access to U.S. highways beyond the border and commercial zone. The bill also would have prohibited DOT from renewing such a program unless expressly authorized by Congress. No action was taken by the Senate on the measure.", "On March 11, 2009, the FY2009 Omnibus Appropriations Act ( P.L. 111-8 ) terminated the pilot program. The FY2010 Consolidated Appropriations Act, passed in December 2009 ( P.L. 111-117 ), did not preclude funds from being spent on a long-haul Mexican truck pilot program, provided that certain terms and conditions were satisfied. Numerous Members of Congress urged President Obama to find a resolution to the dispute in light of the effects that Mexico's retaliatory tariffs were having on U.S. producers (see section below on \" Obama Administration's 2011 Pilot Program \")."], "subsections": []}, {"section_title": "Mexico's Retaliatory Tariffs of 2009 and 2010", "paragraphs": ["In response to the abrupt end of the pilot program, the Mexican government retaliated in 2009 by increasing duties on 90 U.S. products with a value of $2.4 billion in exports to Mexico. Mexico began imposing tariffs in March 2009 and, after reaching an understanding with the United States, eliminated them in two stages in 2011. The retaliatory tariffs ranged from 10% to 45% and covered a range of products that included fruit, vegetables, home appliances, consumer products, and paper. Subsequently, a group of 56 Members of the House of Representatives wrote to the then-United States Trade Representative, Ron Kirk, and DOT Secretary Ray LaHood requesting the Administration to resolve the trucking issue. The bipartisan group of Members stated that they wanted the issue to be resolved because the higher Mexican tariffs were having a \"devastating\" impact on local industries, especially in agriculture, and area economies in some states. One reported estimate stated that U.S. potato exports to Mexico had fallen 50% by value since the tariffs were imposed and that U.S. exporters were losing market share to Canada.", "A year after the initial 2009 list of retaliatory tariffs, the Mexican government revised the list of retaliatory tariffs to put more pressure on the United States to seek a settlement for the trucking dispute. The revised 2010 list added 26 products to and removed 16 products from the original list of 89, bringing the new total to 99 products from 43 states with a total export value of $2.6 billion. Products added to the list included several types of pork products, several types of cheeses, sweet corn, pistachios, oranges, grapefruits, apples, oats and grains, chewing gum, ketchup, and other products. The largest in terms of value were two categories of pork products, which had an estimated export value of $438 million in 2009. Products removed from the list included peanuts, dental floss, locks, and other products. The revised retaliatory tariffs were lower than the original tariffs and ranged from 5% to 25%. U.S. producers of fruits, pork, cheese, and other products that were bearing the cost of the retaliatory tariffs reacted strongly at the lack of progress in resolving the trucking issue and argued, both to the Obama Administration and to numerous Members of Congress, that they were potentially losing millions of dollars in sales as a result of this dispute.", "In March 2011, President Obama and Mexican President Calder\u00f3n announced an agreement to resolve the dispute. By October 2011, Mexico had suspended all retaliatory tariffs on U.S. exports to Mexico."], "subsections": []}, {"section_title": "Obama Administration's 2011 Pilot Program", "paragraphs": ["In January 2011, the Obama Administration presented an \"initial concept document\" to Congress and the Mexican government for a new long-haul trucking pilot program with numerous safety inspection requirements for Mexican carriers. It would put in place a new inspection and monitoring regime in which Mexican carriers would have to apply for long-haul operating authority. The project involved several thousand trucks and would eventually bring as many vehicles as are needed into the United States. ", "The concept document outlined three sets of elements:", "1. Pre-Operations Elements included an application process for Mexican carriers interested in applying for long-haul operations in the United States; a vetting process by the U.S. Department of Homeland Security and the Department of Justice; a safety audit of Mexican carriers applying for the program; documentation of Mexican commercial driver's license process to demonstrate comparability to the U.S. process; and evidence of financial responsibility (insurance) of the applicant. 2. Operations Elements included monitoring procedures with regular inspections and electronic monitoring of long-haul vehicles and drivers; follow-up review (first review) to ensure continued safe operation; compliance review (second review) upon which a participating carrier would be eligible for full operation authority; and FMCSA review that included insurance monitoring and drug and alcohol collection and testing facilities. 3. Transparency Elements included required Federal Register notices by the FMCSA; publically accessible website that provides information on participating carriers; establishment of a Federal Advisory Committee with representation from a diverse group of stakeholders; periodic reports to Congress; and requirements for DOT Office of the Inspector General reports to Congress.", "On July 6, 2011, the two countries signed a Memorandum of Understanding (MOU) to resolve the dispute over long-haul cross-border trucking. Within 10 days after signing of the MOU, Mexico suspended 50% of the retaliatory tariffs it had imposed on U.S. exports (see section below on Mexico's retaliatory tariffs). Mexico agreed to suspend the remainder of the tariffs within five days of the first Mexican trucking company receiving its U.S. operating authority. On October 21, 2011, Mexico suspended the remaining retaliatory tariffs. "], "subsections": []}]}, {"section_title": "Mexican Tomatoes", "paragraphs": ["In February 2013, the United States and Mexico reached an agreement on cross-border trade in tomatoes, averting a potential trade war between the two countries. On March 4, 2013, the Department of Commerce (DOC) and the government of Mexico officially signed the agreement suspending the antidumping investigation on fresh tomatoes from Mexico. The dispute began on June 22, 2012, when a group of Florida tomato growers, who were backed by growers in other states, asked the DOC and the U.S. International Trade Commission to terminate an antidumping duty suspension pact on tomatoes from Mexico. The termination of the pact, which set a minimum reference price for Mexican tomatoes in the United States, would have effectively led to an antidumping investigation on Mexican tomatoes. Mexico's Ambassador to the United States at the time, Arturo Sarukhan, warned that such an action would damage the U.S.-Mexico trade agenda and bilateral trade relationship as a whole. He also stated that Mexico would use all resources at its disposal, including the possibility of retaliatory tariffs, to defend the interests of the Mexican tomato industry. ", "The suspension pact dates back to 1996, when the DOC, under pressure from Florida tomato growers, filed an antidumping petition against Mexican tomato growers and began an investigation into whether they were dumping Mexican tomatoes on the U.S. market at below-market prices. NAFTA had eliminated U.S. tariffs on Mexican tomatoes, causing an inflow of fresh tomatoes from Mexico. Florida tomato growers complained that Mexican tomato growers were selling tomatoes at below-market prices. After the 1996 filing of the petition, the DOC and Mexican producers and exporters of tomatoes reached an agreement under which Mexican tomato growers agreed to revise their prices by setting a minimum reference price in order to eliminate the injurious effects of fresh tomato exports to the United States. The so-called \"suspension agreement\" remained in place for years and was renewed in 2002 and 2008.", "The 2013 suspension agreement covers all fresh and chilled tomatoes, excluding those intended for use in processing. It increases the number of tomato categories with established reference prices from one to four. It also raises reference prices at which tomatoes can be sold in the U.S. market to better reflect the changes in the marketplace since the last agreement was signed. It continues to account for winter and summer seasons.", "When they filed the 2012 petition asking for the termination of the suspension agreement, U.S. tomato producers argued that the pacts had not worked. The petitioners stated that it was necessary to end the agreement with Mexico in order to \"restore fair competition to the market and eliminate the predatory actions of producers in Mexico.\" However, business groups urged the DOC to proceed cautiously in the tomato dispute since termination could result in higher tomato prices in the United States and lead Mexico to implement retaliatory measures. Some businesses urged a continuation of the agreement, arguing that it helped stabilize the market and provide U.S. consumers with consistent and predictable pricing. According to a New York Times article, Mexican tomato producers enlisted roughly 370 U.S. businesses, including Wal-Mart Stores and meat and vegetable producers, to argue their cause."], "subsections": []}]}, {"section_title": "Policy Issues", "paragraphs": ["U.S. policymakers may follow trade issues regarding the proposed USMCA and the possibility of a NAFTA withdrawal by President Trump. "], "subsections": [{"section_title": "USMCA", "paragraphs": ["Policymakers may consider numerous issues as they begin to debate the proposed USMCA and consider its approval. Some issues could include the timetable for consideration under TPA, whether the proposed USMCA meets TPA's negotiating objectives and other requirements, and the impact of the agreement on U.S.-Mexico trade relations. ", "The full effects of the proposed USMCA on U.S.-Mexico trade relations would not be expected to be significant because nearly all U.S. trade with Mexico is now conducted duty and barrier free. A USMCA would maintain NAFTA's tariff and nontariff barrier eliminations. If the agreement is approved by Congress, ratified by Mexico and Canada, and enters into force, some economists and other observers believe that it is not expected to have a measurable effect on overall U.S.-Mexico trade and investment, jobs, wages, or overall economic growth, and that it would probably not have a measurable effect on the U.S. trade deficit with Mexico. The U.S. International Trade Commission (ITC) is conducting an investigation into the likely economic impacts of a USMCA, a required element of the TPA process. TPA 2015 states that the ITC must issue its report within 105 days of the President's signing of a trade deal. With President Trump's signing of the USMCA on November 30, 2018, the ITC report would be due by mid-March 2019.", "One exception to this overall economic evaluation may be the motor vehicle industry, which may experience more significant effects than other industries because of the changes in rules of origin in the USMCA and because of the high percentage of motor vehicle goods that enter duty-free under NAFTA. The highest share of U.S. trade with Mexico is in the motor vehicle industry, and it is also the industry with the highest percentage of duty-free treatment under NAFTA because of high North American content. In 2017, leading U.S. merchandise imports from Mexico were motor vehicles ($57.4 billion or 26% of imports) and motor vehicle parts ($45.5 billion or 20% of imports). About 99.4% of U.S. motor vehicle imports and about 75.6% of motor vehicle parts imports from Mexico entered the United States duty-free under NAFTA. In comparison, only 55.6% of total U.S. imports from Mexico in 2017 received duty-free benefits under NAFTA. ", "Some analysts believe that the updated auto rules of origin requirements contained in the USMCA could raise compliance and production costs and could lead to higher prices, which could possibly negatively affect U.S. vehicle sales. The net impact, however, may be more limited depending on the capacity of U.S. automakers and parts manufacturers to shift suppliers and production locations and the ability to absorb higher costs, according to some observers. Some observers contend that manufacturers with a stronger presence in Mexico, such as General Motors and Fiat Chrysler Automobiles, may be more impacted. ", "Other observers and stakeholders are continuing to review the provisions in the new agreement and what effect, if any, these changes would have on U.S. economic relations with Canada and Mexico. To some analysts, provisions in areas such as customs regulation, digital trade, sanitary and phytosanitary measures, and enforcement on labor and the environment are considered an improvement over similar provisions in NAFTA. Other proposed changes in the agreement, such as largely heightened IPR protections and generally less extensive investment provisions, have both supporters and detractors. For example, there is some concern that the ISDS provisions in the USMCA effectively may only apply to certain U.S. contracts in Mexico's energy sector and possibly leave out other sectors such as services. Under USMCA, investors would be limited to filing ISDS claims for breaches of national treatment, most-favored nation treatment, or expropriation, but not indirect expropriation"], "subsections": []}, {"section_title": "Possible NAFTA Withdrawal", "paragraphs": ["President Donald Trump stated to reporters on December 1, 2018, that he intended to notify Canada and Mexico of his intention to withdraw from NAFTA in six months. Article 2205 of NAFTA states that a party may withdraw from the agreement six months after it provides written notice of withdrawal to the other parties. If a party withdraws, the agreement shall remain in force for the remaining parties. Private sector groups are urging the President to remain within NAFTA until the proposed USMCA enters into force. They claim that withdrawing from NAFTA would have \"devastating\" negative consequences. Congress may consider the ramifications of withdrawing from NAFTA and how it may affect the U.S. economy and foreign relations with Mexico. It may monitor and consider the congressional role in a possible withdrawal. ", "If the United States withdraws from NAFTA, it could return to WTO most-favored-nation tariffs, the rate it applies to all countries with which the United State does not have an FTA. The United States and Canada maintain relatively low simple average MFN rates, at 3.5%. Mexico has a higher 7.0% simple average rate. However, both countries have higher \"peak\" tariffs on labor intensive goods, such as apparel and footwear, and some agriculture products.", "Of the three NAFTA parties, the United States has the lowest MFN tariffs in most categories. Applied tariffs are considerably higher in Mexico than the United States. Mexico's bound tariff rates are very high and far exceed U.S. bound rates. Without NAFTA, there is a risk that tariffs on U.S. exports to Mexico could reach up to 36.2% (see Table 6 ). In agriculture, U.S. farmers would face double-digit applied and trade-weighted rates in both Mexico and Canada. Mexico and Canada likely would maintain duty-free treatment between themselves through maintenance of a bilateral NAFTA, or through commitments made in conjunction with the CPTPP.", "If the United States withdrew from NAFTA without the proposed USMCA entering into force, certain commitments would be affected, such as the following:", "Services Access. The three NAFTA countries committed themselves to allowing market access and nondiscriminatory treatment in certain service sectors. If the United States withdrew from NAFTA, it would still be obligated to adhere to the commitments it made for the WTO's General Agreement on Trade in Services. While these commitments were made contemporaneously with NAFTA, given that the NAFTA schedule operated under a negative list basis\u2014all sectors included unless specifically excluded\u2014and GATS on a positive list\u2014specific sectors are listed for inclusion\u2014NAFTA is likely more extensive. Government Procurement. The NAFTA government procurement chapter sets standards and parameters for government purchases of goods and services. The schedule annexes set forth opportunities for firms of each party to bid on certain contracts for specified government agencies. The WTO Government Procurement Agreement (GPA) also imposes disciplines and obligations on government procurement. Unlike most other WTO agreements, membership in the GPA is optional. Mexico is not a member of the GPA, and U.S. withdrawal from NAFTA would allow Mexico to adopt any domestic content or buy local provisions. (Since U.S. firms are more competitive in obtaining Mexican contracts than Mexican firms in the United States, this may adversely affect some U.S. domestic firms.) Investment. Unlike many chapters in NAFTA that have analogous counterparts in the WTO Agreements, the investment chapter in the WTO does not provide the same level of protection for investors as do NAFTA, subsequent U.S. trade agreements, or bilateral investment treaties. If the United States withdrew from NAFTA, U.S. investors would lose protections in Mexico. Countries would have more leeway to block individual investments. U.S. investors would not have recourse to the investor-state dispute settlement (ISDS) mechanism, but would need to deal with claims of expropriation through domestic courts, recourse to government-to-government consultation, or dispute settlement. Canada and Mexico likely would maintain investor protection between them through the prospective CPTPP or through maintenance of NAFTA provisions."], "subsections": []}, {"section_title": "Bilateral Economic Cooperation", "paragraphs": ["Policymakers may consider issues on how the United States can improve cooperation with Mexico in the areas of border trade, transportation, competitiveness, economic growth, and security enhancement through the HLED, HLRCC, and the 21 st Century Border Management programs mentioned earlier in this report. Some policy experts emphasize the importance of U.S.-Mexico trade in intermediate goods and supply chains and argue that the two governments can improve cooperation in cross-border trade and can invest more in improving border infrastructure. The increased security measures along the U.S.-Mexico border, they argue, have resulted in a costly disruption in production chains due to extended and unpredictable wait times along the border."], "subsections": [{"section_title": "Appendix. Map of Mexico", "paragraphs": [], "subsections": []}]}]}]}}
{"id": "R42784", "title": "China\u2019s Actions in South and East China Seas: Implications for U.S. Interests\u2014Background and Issues for Congress", "released_date": "2019-01-31T00:00:00", "summary": ["China's actions in recent years in the South China Sea (SCS)\u2014particularly its island-building and base-construction activities at sites that it occupies in the Spratly Islands\u2014have heightened concerns among U.S. observers that China is rapidly gaining effective control of the SCS, an area of strategic, political, and economic importance to the United States and its allies and partners, particularly those in the Indo-Pacific region. U.S. Navy Admiral Philip Davidson, in his responses to advance policy questions from the Senate Armed Services Committee for an April 17, 2018, hearing to consider his nomination to become Commander, U.S. Pacific Command (PACOM), stated that \"China is now capable of controlling the South China Sea in all scenarios short of war with the United States.\" Chinese control of the SCS\u2014and, more generally, Chinese domination of China's near-seas region, meaning the SCS, the East China Sea (ECS), and the Yellow Sea\u2014could substantially affect U.S. strategic, political, and economic interests in the Indo-Pacific region and elsewhere.", "China is a party to multiple territorial disputes in the SCS and ECS, including, in particular, disputes with multiple neighboring countries over the Paracel Islands, Spratly Islands, and Scarborough Shoal in the SCS, and with Japan over the Senkaku Islands in the ECS. Up through 2014, U.S. concern over these disputes centered more on their potential for causing tension, incidents, and a risk of conflict between China and its neighbors in the region, including U.S. allies Japan and the Philippines and emerging partner states such as Vietnam. While that concern remains, particularly regarding the potential for a conflict between China and Japan involving the Senkaku Islands, U.S. concern since 2014 (i.e., since China's island-building activities in the Spratly Islands were first publicly reported) has shifted increasingly to how China's strengthening position in the SCS may be affecting the risk of a U.S.-China crisis or conflict in the SCS and the broader U.S.-Chinese strategic competition.", "In addition to territorial disputes in the SCS and ECS, China is involved in a dispute, particularly with the United States, over whether China has a right under international law to regulate the activities of foreign military forces operating within China's exclusive economic zone (EEZ). The position of the United States and most other countries is that while international law gives coastal states the right to regulate economic activities (such as fishing and oil exploration) within their EEZs, it does not give coastal states the right to regulate foreign military activities in the parts of their EEZs beyond their 12-nautical-mile territorial waters. The position of China and some other countries (i.e., a minority group among the world's nations) is that UNCLOS gives coastal states the right to regulate not only economic activities, but also foreign military activities, in their EEZs. The dispute appears to be at the heart of multiple incidents between Chinese and U.S. ships and aircraft in international waters and airspace since 2001, and has potential implications not only for China's EEZs, but for U.S. naval operations in EEZs globally, and for international law of the sea.", "A key issue for Congress is how the United States should respond to China's actions in the SCS and ECS\u2014particularly its island-building and base-construction activities in the Spratly Islands\u2014and to China's strengthening position in the SCS. A key oversight question for Congress is whether the Trump Administration has an appropriate strategy\u2014and an appropriate amount of resources for implementing that strategy\u2014for countering China's \"salami-slicing\" strategy or gray zone operations for gradually strengthening its position in the SCS, for imposing costs on China for its actions in the SCS and ECS, and for defending and promoting U.S. interests in the region."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": [], "subsections": [{"section_title": "Focus of Report", "paragraphs": ["This report provides background information and issues for Congress regarding China's actions in the South China Sea (SCS) and East China Sea (ECS), with a focus on implications for U.S. strategic and policy interests. Other CRS reports focus on other aspects of maritime territorial disputes involving China."], "subsections": []}, {"section_title": "Issue for Congress", "paragraphs": ["The issue for Congress is how the United States should respond to China's actions in the SCS and ECS\u2014particularly China's island-building and base-construction activities in the Spratly Islands in the SCS\u2014and to China's strengthening position in the SCS. A key oversight question for Congress is whether the Trump Administration has an appropriate strategy\u2014and an appropriate amount of resources for implementing that strategy\u2014for countering China's \"salami-slicing\" strategy or gray zone operations for gradually strengthening its position in the SCS, for imposing costs on China for its actions in the SCS and ECS, and for defending and promoting U.S. interests in the region. Decisions that Congress makes on these issues could substantially affect U.S. strategic, political, and economic interests in the Indo-Pacific region and elsewhere."], "subsections": []}, {"section_title": "Terminology Used in This Report", "paragraphs": ["In this report, the term China's near-seas region refers to the SCS, ECS, and Yellow Sea. The term first island chain refers to a string of islands, including Japan and the Philippines, that encloses China's near-seas region. The term second island chain , which reaches out to Guam, refers to a line that can be drawn that encloses both China's near-seas region and the Philippine Sea between the Philippines and Guam. The term exclusive economic zone ( EEZ ) dispute is used in this report to refer to a dispute principally between China and the United States over whether coastal states have a right under international law to regulate the activities of foreign military forces operating in their EEZs."], "subsections": []}]}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "U.S. Interests in SCS and ECS", "paragraphs": ["Although maritime territorial disputes in the SCS and ECS involving China and its neighbors may appear at first glance to be disputes between faraway countries over a few rocks and reefs in the ocean that are of seemingly little importance to the United States, the situation in the SCS and ECS can engage U.S. interests for a variety of strategic, political, and economic reasons, including but not necessarily limited to those discussed in the sections below."], "subsections": [{"section_title": "U.S. Regional Allies and Partners, and U.S. Regional Security Architecture", "paragraphs": ["The SCS, ECS, and Yellow Sea border three U.S. treaty allies\u2014Japan, South Korea, and the Philippines. In addition, the SCS and ECS (including the Taiwan Strait) surround Taiwan, regarding which the United States has certain security-related policies under the Taiwan Relations Act ( H.R. 2479 / P.L. 96-8 of April 10, 1979), and the SCS borders Southeast Asian nations that are current, emerging, or potential U.S. partner countries, such as Singapore, Vietnam, and Indonesia.", "In a conflict with the United States, Chinese bases in the SCS and forces operating from them would add to a regional network of Chinese anti-access/area-denial (A2/AD) forces intended to keep U.S. military forces outside the first island chain (and thus away from China's mainland). Among other things, Chinese bases in the SCS and forces operating from them could help create a bastion (i.e., a defended operating sanctuary) in the SCS for China's emerging sea-based strategic deterrent force of nuclear-powered ballistic missile submarines (SSBNs). In a conflict with the United States, Chinese bases in the SCS and forces operating from them would be vulnerable to U.S. attack. Attacking the bases and the forces operating from them, however, would tie down the attacking U.S. forces for a time at least, delaying the use of those U.S. forces elsewhere in a larger conflict, and potentially delay the advance of U.S. forces into the SCS.", "Short of a conflict with the United States, Chinese bases in the SCS, and more generally, Chinese domination over or control of its near-seas region could help China to do one or more of the following on a day-to-day basis:", "control fishing operations and oil and gas exploration activities in the SCS; coerce, intimidate, or put political pressure on other countries bordering on the SCS; announce and enforce an air defense identification zone (ADIZ) over the SCS; announce and enforce a maritime exclusion zone (i.e., a blockade) around Taiwan; facilitate the projection of Chinese military presence and political influence further into the Western Pacific; and help achieve a broader goal of becoming a regional hegemon in its part of Eurasia. ", "In light of some of the preceding points, Chinese bases in the SCS, and more generally, Chinese domination over or control of its near-seas region could complicate the ability of the United States to", "intervene militarily in a crisis or conflict between China and Taiwan; fulfill U.S. obligations under U.S defense treaties with Japan and the Philippines and South Korea; operate U.S. forces in the Western Pacific for various purposes, including maintaining regional stability, conducting engagement and partnership-building operations, responding to crises, and executing war plans; and prevent the emergence of China as a regional hegemon in its part of Eurasia.", "A reduced U.S. ability to do one or more of the above could encourage countries in the region to reexamine their own defense programs and foreign policies, potentially leading to a further change in the region's security architecture. Some observers believe that China is trying to use disputes in the SCS and ECS to raise doubts among U.S. allies and partners in the region about the dependability of the United States as an ally or partner, or to otherwise drive a wedge between the United States and its regional allies and partners, so as to weaken the U.S.-led regional security architecture and thereby facilitate greater Chinese influence over the region.", "Some observers remain concerned that maritime territorial disputes in the ECS and SCS could lead to a crisis or conflict between China and a neighboring country such as Japan or the Philippines, and that the United States could be drawn into such a crisis or conflict as a result of obligations the United States has under bilateral security treaties with Japan and the Philippines. Most recently, those concerns have focused more on the possibility of a crisis or conflict between China and Japan over the Senkaku Islands."], "subsections": []}, {"section_title": "Principle of Nonuse of Force or Coercion", "paragraphs": ["A key element of the U.S.-led international order that has operated since World War II is the principle that force or coercion should not be used as a means of settling disputes between countries, and certainly not as a routine or first-resort method. Some observers are concerned that China's actions in SCS and ECS challenge this principle and\u2014along with Russia's actions in Crimea and eastern Ukraine\u2014could help reestablish the very different principle of \"might makes right\" (i.e., the law of the jungle) as a routine or defining characteristic of international relations."], "subsections": []}, {"section_title": "Principle of Freedom of the Seas", "paragraphs": ["Another key element of the U.S.-led international order that has operated since World War II is the treatment of the world's seas under international law as international waters (i.e., as a global commons), and the principle of freedom of operations in international waters. The principle of freedom of operations in international waters is often referred to in shorthand as freedom of the seas. It is also sometimes referred to as freedom of navigation, although this term can be defined\u2014particularly by parties who might not support freedom of the seas\u2014in a narrow fashion, to include merely the freedom for commercial ships to navigate (i.e., pass through) sea areas, as opposed to the freedom for both commercial and naval ships to conduct various activities at sea. A more complete way to refer to the principle of freedom of the seas, as stated in the Department of Defense's (DOD's) annual Freedom of Navigation (FON) report, is \"all of the rights, freedoms, and lawful uses of the sea and airspace, including for military ships and aircraft, guaranteed to all nations under international law.\" The principle of freedom of the seas dates back hundreds of years.", "Some observers are concerned that China's actions in the SCS appear to challenge the principle that the world's seas are to be treated under international law as international waters. If such a challenge were to gain acceptance in the SCS region, it would have broad implications for the United States and other countries not only in the SCS, but around the world, because international law is universal in application, and a challenge to a principle of international law in one part of the world, if accepted, could serve as a precedent for challenging it in other parts of the world. Overturning the principle of freedom of the seas, so that significant portions of the seas could be appropriated as national territory, would overthrow hundreds of years of international legal tradition relating to the legal status of the world's oceans and significantly change the international legal regime governing sovereignty over much of the surface of the world.", "Some observers are concerned that if China's position that coastal states have a right under international law to regulate the activities of foreign military forces in their EEZs were to gain greater international acceptance under international law, it could substantially affect U.S. naval operations not only in the SCS and ECS, but around the world, which in turn could substantially affect the ability of the United States to use its military forces to defend various U.S. interests overseas. Significant portions of the world's oceans are claimable as EEZs, including high-priority U.S. Navy operating areas in the Western Pacific, the Persian Gulf, and the Mediterranean Sea. The legal right of U.S. naval forces to operate freely in EEZ waters\u2014an application of the principle of freedom of the seas\u2014is important to their ability to perform many of their missions around the world, because many of those missions are aimed at influencing events ashore, and having to conduct operations from more than 200 miles offshore would reduce the inland reach and responsiveness of ship-based sensors, aircraft, and missiles, and make it more difficult to transport Marines and their equipment from ship to shore. Restrictions on the ability of U.S. naval forces to operate in EEZ waters could potentially require changes (possibly very significant ones) in U.S. military strategy or U.S. foreign policy goals."], "subsections": []}, {"section_title": "Trade Routes and Hydrocarbons", "paragraphs": ["Major commercial shipping routes pass through the SCS, which links the Western Pacific to the Indian Ocean and the Persian Gulf. An estimated $3.4 trillion worth of international shipping trade passes through the SCS each year. DOD states that \"the South China Sea plays an important role in security considerations across East Asia because Northeast Asia relies heavily on the flow of oil and commerce through South China Sea shipping lanes, including more than 80 percent of the crude oil [flowing] to Japan, South Korea, and Taiwan.\" In addition, the ECS and SCS contain potentially significant oil and gas exploration areas. Exploration activities there could potentially involve U.S. firms. The results of exploration activities there could eventually affect world oil prices."], "subsections": []}, {"section_title": "Interpreting China's Rise as a Major World Power", "paragraphs": ["As China continues to emerge as a major world power, observers are assessing what kind of international actor China will ultimately be. China's actions in the SCS and ECS could influence assessments that observers might make on issues such as China's approach to settling disputes between states (including whether China views force and coercion as acceptable means for settling such disputes, and consequently whether China believes that \"might makes right\"), China's views toward the meaning and application of international law, and whether China views itself more as a stakeholder and defender of the current international order, or alternatively, more as a revisionist power that will seek to change elements of that order that it does not like."], "subsections": []}, {"section_title": "U.S.-China Relations in General", "paragraphs": ["Developments in the SCS and ECS could affect U.S.-China relations in general, which could have implications for other issues in U.S.-China relations."], "subsections": []}]}, {"section_title": "Overview of Maritime Disputes in SCS and ECS", "paragraphs": [], "subsections": [{"section_title": "Maritime Territorial Disputes", "paragraphs": ["China is a party to multiple maritime territorial disputes in the SCS and ECS, including in particular the following (see Figure 1 for locations of the island groups listed below):", "a dispute over the Paracel Islands in the SCS, which are claimed by China and Vietnam, and occupied by China; a dispute over the Spratly Islands in the SCS, which are claimed entirely by China, Taiwan, and Vietnam, and in part by the Philippines, Malaysia, and Brunei, and which are occupied in part by all these countries except Brunei; a dispute over Scarborough Shoal in the SCS, which is claimed by China, Taiwan, and the Philippines, and controlled since 2012 by China; and a dispute over the Senkaku Islands in the ECS, which are claimed by China, Taiwan, and Japan, and administered by Japan.", "The island and shoal names used above are the ones commonly used in the United States; in other countries, these islands are known by various other names.", "These island groups are not the only land features in the SCS and ECS\u2014the two seas feature other islands, rocks, and shoals, as well as some near-surface submerged features. The territorial status of some of these other features is also in dispute. There are additional maritime territorial disputes in the Western Pacific that do not involve China. Maritime territorial disputes in the SCS and ECS date back many years, and have periodically led to diplomatic tensions as well as confrontations and incidents at sea involving fishing vessels, oil exploration vessels and oil rigs, coast guard ships, naval ships, and military aircraft. "], "subsections": []}, {"section_title": "Dispute Regarding China's Rights within Its EEZ, and Associated U.S.-Chinese Incidents at Sea", "paragraphs": ["In addition to maritime territorial disputes in the SCS and ECS, China is involved in a dispute, principally with the United States, over whether China has a right under international law to regulate the activities of foreign military forces operating within China's EEZ. The position of the United States and most other countries is that while the United Nations Convention on the Law of the Sea (UNCLOS), which established EEZs as a feature of international law, gives coastal states the right to regulate economic activities (such as fishing and oil exploration) within their EEZs, it does not give coastal states the right to regulate foreign military activities in the parts of their EEZs beyond their 12-nautical-mile territorial waters. ", "The position of China and some other countries (i.e., a minority group among the world's nations) is that UNCLOS gives coastal states the right to regulate not only economic activities, but also foreign military activities, in their EEZs. In response to a request from CRS to identify the countries taking this latter position, the U.S. Navy states that", "countries with restrictions inconsistent with the Law of the Sea Convention [i.e., UNCLOS] that would limit the exercise of high seas freedoms by foreign navies beyond 12 nautical miles from the coast are [the following 27]:", "Bangladesh, Brazil, Burma, Cambodia, Cape Verde, China, Egypt, Haiti, India, Iran, Kenya, Malaysia, Maldives, Mauritius, North Korea, Pakistan, Portugal, Saudi Arabia, Somalia, Sri Lanka, Sudan, Syria, Thailand, United Arab Emirates, Uruguay, Venezuela, and Vietnam.", "Other observers provide different counts of the number of countries that take the position that UNCLOS gives coastal states the right to regulate not only economic activities but also foreign military activities in their EEZs. For example, one set of observers, in an August 2013 briefing, stated that 18 countries seek to regulate foreign military activities in their EEZs, and that 3 of these countries\u2014China, North Korea, and Peru\u2014have directly interfered with foreign military activities in their EEZs.", "The dispute over whether China has a right under UNCLOS to regulate the activities of foreign military forces operating within its EEZ appears to be at the heart of incidents between Chinese and U.S. ships and aircraft in international waters and airspace, including", "incidents in March 2001, September 2002, March 2009, and May 2009, in which Chinese ships and aircraft confronted and harassed the U.S. naval ships Bowditch , Impeccable , and Victorious as they were conducting survey and ocean surveillance operations in China's EEZ; an incident on April 1, 2001, in which a Chinese fighter collided with a U.S. Navy EP-3 electronic surveillance aircraft flying in international airspace about 65 miles southeast of China's Hainan Island in the South China Sea, forcing the EP-3 to make an emergency landing on Hainan Island; an incident on December 5, 2013, in which a Chinese navy ship put itself in the path of the U.S. Navy cruiser Cowpens as it was operating 30 or more miles from China's aircraft carrier Liaoning , forcing the Cowpens to change course to avoid a collision; an incident on August 19, 2014, in which a Chinese fighter conducted an aggressive and risky intercept of a U.S. Navy P-8 maritime patrol aircraft that was flying in international airspace about 135 miles east of Hainan Island \u2014DOD characterized the intercept as \"very, very close, very dangerous\"; and an incident on May 17, 2016, in which Chinese fighters flew within 50 feet of a Navy EP-3 electronic surveillance aircraft in international airspace in the South China Sea\u2014a maneuver that DOD characterized as \"unsafe.\"", " Figure 2 shows the locations of the 2001, 2002, and 2009 incidents listed in the first two bullets above. The incidents shown in Figure 2 are the ones most commonly cited prior to the December 2013 involving the Cowpens , but some observers list additional incidents as well.", "DOD stated in 2015 that", "The growing efforts of claimant States to assert their claims has led to an increase in air and maritime incidents in recent years, including an unprecedented rise in unsafe activity by China's maritime agencies in the East and South China Seas. U.S. military aircraft and vessels often have been targets of this unsafe and unprofessional behavior, which threatens the U.S. objectives of safeguarding the freedom of the seas and promoting adherence to international law and standards. China's expansive interpretation of jurisdictional authority beyond territorial seas and airspace causes friction with U.S. forces and treaty allies operating in international waters and airspace in the region and raises the risk of inadvertent crisis.", "There have been a number of troubling incidents in recent years. For example, in August 2014, a Chinese J-11 fighter crossed directly under a U.S. P-8A Poseidon operating in the South China Sea approximately 117 nautical miles east of Hainan Island. The fighter also performed a barrel roll over the aircraft and passed the nose of the P-8A to show its weapons load-out, further increasing the potential for a collision. However, since August 2014, U.S.-China military diplomacy has yielded positive results, including a reduction in unsafe intercepts. We also have seen the PLAN implement agreed-upon international standards for encounters at sea, such as the Code for Unplanned Encounters at Sea (CUES), which was signed in April 2014.", "A recent incident in the SCS occurred on September 30, 2018, between the U.S. Navy destroyer Decatur (DDG-73) and a Chinese destroyer, as the Decatur was conducting a freedom of navigation (FON) operation near Gaven Reef in the Spratly Islands. In the incident, the Chinese destroyer overtook the U.S. destroyer close by on the U.S. destroyer's port (i.e., left) side, requiring the U.S. destroyer to turn starboard (i.e., to the right) to avoid the Chinese ship. U.S. officials stated that at the point of closest approach between the two ships, the stern (i.e., back end) of the Chinese ship came within 45 yards (135 feet) of the bow (i.e., front end) of the Decatur . As the encounter was in progress, the Chinese ship issued a warning by radio stating, \"If you don't change course your [sic] will suffer consequences.\" One observer, commenting on the incident, stated, \"To my knowledge, this is the first time we've had a direct threat to an American warship with that kind of language.\" U.S. officials characterized the actions of the Chinese ship in the incident as \"unsafe and unprofessional.\"", "A November 3, 2018, press report states the following:", "The US Navy has had 18 unsafe or unprofessional encounters with Chinese military forces in the Pacific since 2016, according to US military statistics obtained by CNN.", "\"We have found records of 19 unsafe and/or unprofessional interactions with China and Russia since 2016 (18 with China and one with Russia),\" Cmdr. Nate Christensen, a spokesman for the US Pacific Fleet, told CNN.", "A US official familiar with the statistics told CNN that 2017, the first year of the Trump administration, saw the most unsafe and or unprofessional encounters with Chinese forces during the period.", "At least three of those incidents took place in February, May and July of that year and involved Chinese fighter jets making what the US considered to be \"unsafe\" intercepts of Navy surveillance planes.", "While the 18 recorded incidents only involved US naval forces, the Air Force has also had at least one such encounter during this period\u2026.", "The US Navy told CNN that, in comparison, there were 50 unsafe or unprofessional encounters with Iranian military forces since 2016, with 36 that year, 14 last year and none in 2018. US and Iranian naval forces tend to operate in relatively narrow stretches of water, such as the Strait of Hormuz, increasing their frequency of close contact.", "DOD states that", "Although China has long challenged foreign military activities in its maritime zones in a manner that is inconsistent with the rules of customary international law as reflected in the LOSC, the PLA has recently started conducting the very same types of military activities inside and outside the first island chain in the maritime zones of other countries. This contradiction highlights China's continued lack of commitment to the rules of customary international law.", "Even though China is a state party to the LOSC [i.e., UNCLOS], China's domestic laws restrict military activities in its exclusive economic zone (EEZ), including intelligence collection and military surveys, contrary to LOSC. At the same time, the PLA is increasingly undertaking military operations in other countries' EEZs. The map on the following page [not reproduced here] depicts new PLA operating areas in foreign EEZs since 2014. In 2017, the PLAN conducted air and naval operations in Japan's EEZ; employed an AGI [intelligence-gathering ship] ship, likely to monitor testing of a THAAD system in the U.S. EEZ near the Aleutian Islands; and employed an AGI ship to monitor a multi-national naval exercise in Australia's EEZ. PLA operations in foreign EEZs have taken place in Northeast and Southeast Asia, and a growing number of operations are also occurring farther from Chinese shores."], "subsections": []}, {"section_title": "Relationship of Maritime Territorial Disputes to EEZ Dispute", "paragraphs": ["The issue of whether China has the right under UNCLOS to regulate foreign military activities in its EEZ is related to, but ultimately separate from, the issue of territorial disputes in the SCS and ECS:", "The two issues are related because China can claim EEZs from inhabitable islands over which it has sovereignty, so accepting China's claims to sovereignty over inhabitable islands in the SCS or ECS could permit China to expand the EEZ zone within which China claims a right to regulate foreign military activities. The two issues are ultimately separate from one another because even if all the territorial disputes in the SCS and ECS were resolved, and none of China's claims in the SCS and ECS were accepted, China could continue to apply its concept of its EEZ rights to the EEZ that it unequivocally derives from its mainland coast\u2014and it is in this unequivocal Chinese EEZ that several of the past U.S.-Chinese incidents at sea have occurred.", "Press reports of maritime disputes in the SCS and ECS sometimes focus on territorial disputes while devoting little or no attention to the EEZ dispute, or do relatively little to distinguish the EEZ dispute from the territorial disputes. From the U.S. perspective, the EEZ dispute is arguably as significant as the maritime territorial disputes because of the EEZ dispute's proven history of leading to U.S.-Chinese incidents at sea and because of its potential for affecting U.S. military operations not only in the SCS and ECS, but around the world.", "For background information on treaties and international agreements related to the disputes, see Appendix C .", "For background information on the July 2016 tribunal award in the SCS arbitration case involving the Philippines and China concerning maritime territorial issues in the SCS, see Appendix D ."], "subsections": []}]}, {"section_title": "China's Approach to the SCS and ECS", "paragraphs": [], "subsections": [{"section_title": "In General", "paragraphs": ["In general, China's approach to the maritime disputes in the SCS and ECS, and to strengthening its position over time in the SCS, can be characterized as follows:", "China appears to have identified the assertion and defense of its maritime territorial claims in the SCS and ECS, and the strengthening of its position in the SCS, as important national goals. To achieve these goals, China appears to be employing an integrated, whole-of-society strategy that includes diplomatic, informational, economic, military, paramilitary/law enforcement, and civilian elements. In implementing this integrated strategy, China appears to be persistent, patient, tactically flexible, willing to expend significant resources, and willing to absorb at least some amount of reputational and other costs that other countries might seek to impose on China in response to China's actions."], "subsections": []}, {"section_title": "\"Salami-Slicing\" Strategy and Gray Zone Operations", "paragraphs": ["Observers frequently characterize China's approach to the SCS and ECS as a \"salami-slicing\" strategy that employs a series of incremental actions, none of which by itself is a casus belli , to gradually change the status quo in China's favor. At least one Chinese official has used the term \"cabbage strategy\" to refer to a strategy of consolidating control over disputed islands by wrapping those islands, like the concentric leaves of a cabbage, in successive layers of occupation and protection formed by fishing boats, Chinese Coast Guard ships, and then finally Chinese naval ships. Other observers have referred to China's approach as a strategy of gray zone operations (i.e., operations that reside in a gray zone between peace and war), of creeping annexation or creeping invasion, or as a \"talk and take\" strategy, meaning a strategy in which China engages in (or draws out) negotiations while taking actions to gain control of contested areas."], "subsections": []}, {"section_title": "Island Building and Base Construction", "paragraphs": ["Perhaps more than any other set of actions, China's island-building (aka land-reclamation) and base-construction activities at sites that it occupies in the Paracel Islands and Spratly Islands in the SCS have heightened concerns among U.S. observers that China is rapidly gaining effective control of the SCS. China's island-building and base-construction activities in the SCS appear to have begun around December 2013, and were publicly reported starting in May 2014. Awareness of, and concern about, the activities appears to have increased substantially following the posting of a February 2015 article showing a series of \"before and after\" satellite photographs of islands and reefs being changed by the work.", "China occupies seven sites in the Spratly Islands. It has engaged in island-building and facilities-construction activities at most or all of these sites, and particularly at three of them\u2014Fiery Cross Reef, Subi Reef, and Mischief Reef, all of which now feature lengthy airfields as well as substantial numbers of buildings. Although other countries, such as Vietnam, have engaged in their own island-building and facilities-construction activities at sites that they occupy in the SCS, these efforts are dwarfed in size by China's island-building and base-construction activities in the SCS. DOD stated in 2017 that", "In 2016, China focused its main effort on infrastructure construction at its outposts on the Spratly Islands. Although its land reclamation and artificial islands do not strengthen China's territorial claims as a legal matter or create any new territorial sea entitlements, China will be able to use its reclaimed features as persistent civil-military bases to enhance its presence in the South China Sea and improve China's ability to control the features and nearby maritime space. China reached milestones of landing civilian aircraft on its airfields on Fiery Cross Reef, Subi Reef, and Mischief Reef for the first time in 2016, as well as landing a military transport aircraft on Fiery Cross Reef to evacuate injured personnel....", "China's Spratly Islands outpost expansion effort is currently focused on building out the land-based capabilities of its three largest outposts\u2014Fiery Cross, Subi, and Mischief Reefs\u2014after completion of its four smaller outposts early in 2016. No substantial land has been reclaimed at any of the outposts since China ended its artificial island creation in the Spratly Islands in late 2015 after adding over 3,200 acres of land to the seven features it occupies in the Spratlys. Major construction features at the largest outposts include new airfields\u2014all with runways at least 8,800 feet in length\u2014large port facilities, and water and fuel storage. As of late 2016, China was constructing 24 fighter-sized hangars, fixed-weapons positions, barracks, administration buildings, and communication facilities at each of the three outposts. Once all these facilities are complete, China will have the capacity to house up to three regiments of fighters in the Spratly Islands.", "China has completed shore-based infrastructure on its four smallest outposts in the Spratly Islands: Johnson, Gaven, Hughes, and Cuarteron Reefs. Since early 2016, China has installed fixed, land-based naval guns on each outpost and improved communications infrastructure.", "The Chinese Government has stated that these projects are mainly for improving the living and working conditions of those stationed on the outposts, safety of navigation, and research; however, most analysts outside China believe that the Chinese Government is attempting to bolster its de facto control by improving its military and civilian infrastructure in the South China Sea. The airfields, berthing areas, and resupply facilities on its Spratly outposts will allow China to maintain a more flexible and persistent coast guard and military presence in the area. This would improve China's ability to detect and challenge activities by rival claimants or third parties, widen the range of capabilities available to China, and reduce the time required to deploy them....", "China's construction in the Spratly Islands demonstrates China's capacity\u2014and a newfound willingness to exercise that capacity\u2014to strengthen China's control over disputed areas, enhance China's presence, and challenge other claimants....", "In 2016, China built reinforced hangars on several of its Spratly Island outposts in the South China Sea. These hangars could support up to 24 fighters or any other type of PLA aircraft participating in force projection operations.", "In April, May, and June 2018, it was reported that China has landed aircraft and moved electronic jamming equipment, surface-to-air missiles, and anti-ship missile systems to its newly built facilities in the SCS. In July 2018, it was reported that \"China is quietly testing electronic warfare assets recently installed at fortified outposts in the South China Sea\u2026.\" Also in July 2018, Chinese state media announced that a Chinese search and rescue ship had been stationed at Subi Reef\u2014the first time that such a ship had been permanently stationed by China at one of its occupied sites in the Spratly Islands.", "For additional discussion of China's island-building and facility-construction activities, see CRS Report R44072, Chinese Land Reclamation in the South China Sea: Implications and Policy Options , by Ben Dolven et al."], "subsections": []}, {"section_title": "Other Chinese Actions That Have Heightened Concerns", "paragraphs": ["In addition to the island-building and base-construction activities discussed above, additional Chinese actions in the SCS and ECS have heightened concerns among U.S. observers. Following a confrontation in 2012 between Chinese and Philippine ships at Scarborough Shoal, China gained de facto control over access to the shoal and its fishing grounds. Subsequent Chinese actions that have heightened concerns among U.S. observers, particularly since late 2013, include the following, among others:", "China's announcement on November 23, 2013, of an air defense identification zone (ADIZ) over the ECS that includes airspace over the Senkaku Islands; frequent patrols by Chinese Coast Guard ships\u2014some observers refer to them as harassment operations\u2014at the Senkaku Islands; Chinese pressure against the small Philippine military presence at Second Thomas Shoal in the Spratly Islands, where a handful of Philippine military personnel occupy a beached (and now derelict) Philippine navy amphibious ship; the implementation on January 1, 2014, of fishing regulations administered by China's Hainan province applicable to waters constituting more than half of the SCS, and the reported enforcement of those regulations with actions that have included the apprehension of non-Chinese fishing boats; and a growing civilian Chinese presence on some of the sites in the SCS occupied by China in the SCS, including both Chinese vacationers and (in the Paracels) permanent settlements."], "subsections": []}, {"section_title": "Use of Coast Guard Ships and Maritime Militia", "paragraphs": ["China asserts and defends its maritime claims not only with navy ships, but also with coast guard cutters and maritime militia vessels. Indeed, China employs its coast guard and maritime militia more regularly and extensively than its navy in its maritime sovereignty-assertion operations. DOD states that China's navy, coast guard, and maritime militia together \"form the largest maritime force in the Indo-Pacific.\""], "subsections": [{"section_title": "Coast Guard Ships", "paragraphs": ["DOD states that the China Coast Guard (CCG) is the world's largest coast guard. It is much larger than the coast guard of any country in the region, and it has increased substantially in size in recent years through the addition of many newly built ships. China makes regular use of CCG ships to assert and defend its maritime claims, particularly in the ECS, with Chinese navy ships sometimes available over the horizon as backup forces. The Defense Intelligence Agency (DIA) states the following:", "Under Chinese law, maritime sovereignty is a domestic law enforcement issue under the purview of the CCG. Beijing also prefers to use CCG ships for assertive actions in disputed waters to reduce the risk of escalation and to portray itself more benignly to an international audience. For situations that Beijing perceives carry a heightened risk of escalation, it often deploys PLAN combatants in close proximity for rapid intervention if necessary. China also relies on the PAFMM\u2014a paramilitary force of fishing boats\u2014for sovereignty enforcement actions\u2026.", "China primarily uses civilian maritime law enforcement agencies in maritime disputes, employing the PLAN [i.e., China's navy] in a protective capacity in case of escalation.", "The CCG has rapidly increased and modernized its forces, improving China's ability to enforce its maritime claims. Since 2010, the CCG's large patrol ship fleet (more than 1,000 tons) has more than doubled in size from about 60 to more than 130 ships, making it by far the largest coast guard force in the world and increasing its capacity to conduct extended offshore operations in a number of disputed areas simultaneously. Furthermore, the newer ships are substantially larger and more capable than the older ships, and the majority are equipped with helicopter facilities, high-capacity water cannons, and guns ranging from 30-mm to 76-mm. Among these ships, a number are capable of long-distance, long-endurance out-of-area operations. In addition, the CCG operates more than 70 fast patrol combatants ([each displacing] more than 500 tons), which can be used for limited offshore operations, and more than 400 coastal patrol craft (as well as about 1,000 inshore and riverine patrol boats). By the end of the decade, the CCG is expected to add up to 30 patrol ships and patrol combatants before the construction program levels off.", "In March 2018, China announced that control of the CCG would be transferred from the civilian State Oceanic Administration to the Central Military Commission. The transfer occurred on July 1, 2018. On May 22, 2018, it was reported that China's navy and the CCG had conducted their first joint patrols in disputed waters off the Paracel Islands in the SCS, and had expelled at least 10 foreign fishing vessels from those waters."], "subsections": []}, {"section_title": "Maritime Militia", "paragraphs": ["China also uses the People's Armed Forces Maritime Militia (PAFMM)\u2014a force that essentially consists of fishing ships with armed crew members\u2014to defend its maritime claims. In the view of some observers, the PAFMM\u2014even more than China's navy or coast guard\u2014is the leading component of China's maritime forces for asserting its maritime claims, particularly in the SCS. U.S. analysts in recent years have paid increasing attention to the role of the PAFMM as a key tool for implementing China's salami-slicing strategy, and have urged U.S. policymakers to focus on the capabilities and actions of the PAFMM.", "DOD states that \"the PAFMM is the only government-sanctioned maritime militia in the world,\" and that it \"has organizational ties to, and is sometimes directed by, China's armed forces.\" DIA states that", "The PAFMM is a subset of China's national militia, an armed reserve force of civilians available for mobilization to perform basic support duties. Militia units organize around towns, villages, urban subdistricts, and enterprises, and they vary widely from one location to another. The composition and mission of each unit reflects local conditions and personnel skills. In the South China Sea, the PAFMM plays a major role in coercive activities to achieve China's political goals without fighting, part of broader Chinese military doctrine that states that confrontational operations short of war can be an effective means of accomplishing political objectives.", "A large number of PAFMM vessels train with and support the PLA and CCG in tasks such as safeguarding maritime claims, protecting fisheries, and providing logistic support, search and rescue (SAR), and surveillance and reconnaissance. The Chinese government subsidizes local and provincial commercial organizations to operate militia ships to perform \"official\" missions on an ad hoc basis outside their regular commercial roles. The PAFMM has played a noteworthy role in a number of military campaigns and coercive incidents over the years, including the harassment of Vietnamese survey ships in 2011, a standoff with the Philippines at Scarborough Reef in 2012, and a standoff involving a Chinese oil rig in 2014. In the past, the PAFMM rented fishing boats from companies or individual fisherman, but it appears that China is building a state-owned fishing fleet for its maritime militia force in the South China Sea. Hainan Province, adjacent to the South China Sea, ordered the construction of 84 large militia fishing boats with reinforced hulls and ammunition storage for Sansha City, and the militia took delivery by the end of 2016."], "subsections": []}]}, {"section_title": "Apparent Narrow Definition of \"Freedom of Navigation\"", "paragraphs": ["China regularly states that it supports freedom of navigation and has not interfered with freedom of navigation. China, however, appears to hold a narrow definition of freedom of navigation that is centered on the ability of commercial cargo ships to pass through international waters. In contrast to the broader U.S./Western definition of freedom of navigation (aka freedom of the seas), the Chinese definition does not appear to include operations conducted by military ships and aircraft. It can also be noted that China has frequently interfered with commercial fishing operations by non-Chinese fishing vessels\u2014something that some observers would regard as a form of interfering with freedom of navigation for commercial ships. An August 12, 2015, press report states the following (emphasis added):", "China respects freedom of navigation in the disputed South China Sea but will not allow any foreign government to invoke that right so its military ships and planes can intrude in Beijing's territory, the Chinese ambassador [to the Philippines] said.", "Ambassador Zhao Jianhua said late Tuesday [August 11] that Chinese forces warned a U.S. Navy P-8A [maritime patrol aircraft] not to intrude when the warplane approached a Chinese-occupied area in the South China Sea's disputed Spratly Islands in May....", "\"We just gave them warnings, be careful, not to intrude,\" Zhao told reporters on the sidelines of a diplomatic event in Manila....", "When asked why China shooed away the U.S. Navy plane when it has pledged to respect freedom of navigation in the South China Sea, Zhao outlined the limits in China's view.", "\"Freedom of navigation does not mean to allow other countries to intrude into the airspace or the sea which is sovereign. No country will allow that,\" Zhao said. \"We say freedom of navigation must be observed in accordance with international law. No freedom of navigation for warships and airplanes .\"", "A July 19, 2016, press report states the following:", "A senior Chinese admiral has rejected freedom of navigation for military ships, despite views held by the United States and most other nations that such access is codified by international law.", "The comments by Adm. Sun Jianguo, deputy chief of China's joint staff, come at a time when the U.S. Navy is particularly busy operating in the South China Sea, amid tensions over sea and territorial rights between China and many of its neighbors in the Asia-Pacific region.", "\"When has freedom of navigation in the South China Sea ever been affected? It has not, whether in the past or now, and in the future there won't be a problem as long as nobody plays tricks,\" Sun said at a closed forum in Beijing on Saturday, according to a transcript obtained by Reuters.", "\"But China consistently opposes so-called military freedom of navigation, which brings with it a military threat and which challenges and disrespects the international law of the sea,\" Sun said.", "A March 4, 2017, press report states the following:", "Wang Wenfeng, a US affairs expert at the China Institute of Contemporary International Relations, said Beijing and Washington obviously had different definitions of what constituted freedom of navigation.", "\"While the US insists they have the right to send warships to the disputed waters in the South China Sea, Beijing has always insisted that freedom of navigation should not cover military ships,\" he said.", "A February 22, 2018, press report states the following:", "Hundreds of government officials, experts and scholars from all over the world conducted in-depth discussions of various security threats under the new international security situation at the 54 th Munich Security Conference (MSC) from Feb. 16 to 18, 2018.", "Experts from the Chinese delegation at the three-day event were interviewed by reporters on hot topics such as the South China Sea issue and they refuted some countries' misinterpretation of the relevant international law.", "The conference included a panel discussion on the South China Sea issue, which China and the Association of Southeast Asian Nations (ASEAN) countries have been committed to properly solving since the signing of the draft South China Sea code of conduct. ", "Senior Colonel Zhou Bo, director of the Security Cooperation Center of the International Military Cooperation Office of the Chinese Ministry of National Defense, explained how some countries' have misinterpreted the international law. ", "\"First of all, we must abide by the United Nations Convention on the Law of the Sea (UNCLOS),\" Zhou said. \"But the problem now is that some countries unilaterally and wrongly interpreted the 'freedom of navigation' of the UNCLOS as the 'freedom of military operations', which is not the principle set by the UNCLOS,\" Zhou noted.", "A June 27, 2018, opinion piece in a British newspaper by China's ambassador to the UK stated that", "freedom of navigation is not an absolute freedom to sail at will. The US Freedom of Navigation Program should not be confused with freedom of navigation that is universally recognised under international law. The former is an excuse to throw America's weight about wherever it wants. It is a distortion and a downright abuse of international law into the \"freedom to run amok\".", "Second, is there any problem with freedom of navigation in the South China Sea? The reality is that more than 100,000 merchant ships pass through these waters every year and none has ever run into any difficulty with freedom of navigation....", "The South China Sea is calm and the region is in harmony. The so-called \"safeguarding freedom of navigation\" issue is a bogus argument. The reason for hyping it up could be either an excuse to get gunboats into the region to make trouble, or a premeditated intervention in the affairs of the South China Sea, instigation of discord among the parties involved and impairment of regional stability\u2026.", "China respects and supports freedom of navigation in the South China Sea according to international law. But freedom of navigation is not the freedom to run amok. For those from outside the region who are flexing their muscles in the South China Sea, the advice is this: if you really care about freedom of navigation, respect the efforts of China and Asean countries to safeguard peace and stability, stop showing off your naval ships and aircraft to \"militarise\" the region, and let the South China Sea be a sea of peace.", "A September 20, 2018, press report stated the following:", "Chinese Ambassador to Britain Liu Xiaoming on Wednesday [September 19] said that the freedom of navigation in the South China Sea has never been a problem, warning that no one should underestimate China's determination to uphold peace and stability in the region\u2026.", "Liu stressed that countries in the region have the confidence, capability and wisdom to deal with the South China Sea issue properly and achieve enduring stability, development and prosperity.", "\"Yet to everyone's confusion, some big countries outside the region did not seem to appreciate the peace and tranquility in the South China Sea,\" he said. \"They sent warships and aircraft all the way to the South China Sea to create trouble.\"", "The senior diplomat said that under the excuse of so-called \"freedom of navigation,\" these countries ignored the vast sea lane and chose to sail into the adjacent waters of China's islands and reefs to show off their military might.", "\"This was a serious infringement\" of China's sovereignty, he said. \"It threatened China's security and put regional peace and stability in jeopardy.\"", "Liu stressed that China has all along respected and upheld the freedom of navigation and over-flight in the South China Sea in accordance with international law, including the United Nations Convention on the Law of the Sea.", "\"Freedom of navigation is not a license to do whatever one wishes,\" he said, noting that freedom of navigation is not freedom to invade other countries' territorial waters and infringe upon other countries' sovereignty.", "\"Such 'freedom' must be stopped,\" Liu noted. \"Otherwise the South China Sea will never be tranquil.\"", "In contrast to China's narrow definition, the U.S./Western definition of freedom of navigation is much broader, encompassing operations of various types by both commercial and military ships and aircraft in international waters and airspace. As discussed earlier in this report, an alternative term for referring to the U.S./Western definition of freedom of navigation is freedom of the seas, meaning \"all of the rights, freedoms, and lawful uses of the sea and airspace, including for military ships and aircraft, guaranteed to all nations under international law.\" When Chinese officials state that China supports freedom of navigation, China is referring to its own narrow definition of the term, and is likely not expressing agreement with or support for the U.S./Western definition of the term."], "subsections": []}, {"section_title": "Preference for Treating Territorial Disputes on Bilateral Basis", "paragraphs": ["China prefers to discuss maritime territorial disputes with other regional parties to the disputes on a bilateral rather than multilateral basis. Some observers believe China prefers bilateral talks because China is much larger than any other country in the region, giving China a potential upper hand in any bilateral meeting. China generally has resisted multilateral approaches to resolving maritime territorial disputes, stating that such approaches would internationalize the disputes, although the disputes are by definition international even when addressed on a bilateral basis. (China's participation with the ASEAN states in the 2002 declaration of conduct DOC and in negotiations with the ASEAN states on the follow-on binding code of conduct (COC) [see Appendix C ] represents a departure from this general preference.) Some observers believe China is pursuing a policy of putting off a negotiated resolution of maritime territorial disputes so as to give itself time to implement the salami-slicing strategy."], "subsections": []}, {"section_title": "Depiction of United States as Outsider Seeking to \"Stir Up Trouble\"", "paragraphs": ["Along with its above-discussed preference for treating territorial disputes on a bilateral rather than multilateral basis, China resists and objects to U.S. involvement in maritime disputes in the SCS and ECS. Statements in China's state-controlled media sometimes depict the United States as an outsider or interloper whose actions (including freedom of navigation operations) are seeking to \"stir up trouble\" in an otherwise peaceful regional situation. Potential or actual Japanese involvement in the SCS is sometimes depicted in China's state-controlled media in similar terms. Depicting the United States in this manner can be viewed as consistent with goals of attempting to drive a wedge between the United States and its allies and partners in the region and of ensuring maximum leverage in bilateral (rather than multilateral) discussions with other countries in the region over maritime territorial disputes."], "subsections": []}, {"section_title": "July 2018 Press Report Regarding Chinese Radio Warnings", "paragraphs": ["A July 31, 2018, press report stated the following:", "The Philippines has expressed concern to China over an increasing number of Chinese radio messages warning Philippine aircraft and ships to stay away from newly fortified islands and other territories in the South China Sea claimed by both countries, officials said Monday.", "A Philippine government report showed that in the second half of last year alone, Philippine military aircraft received such Chinese radio warnings at least 46 times while patrolling near artificial islands built by China in the South China Sea's Spratly archipelago.", "The Chinese radio messages were \"meant to step up their tactics to our pilots conducting maritime air surveillance in the West Philippine Sea\", the report said, using the Philippine name for the South China Sea.", "A Philippine air force plane on patrol near the Chinese-held islands received a particularly offensive radio message in late January according to the Philippine government report.", "It was warned by Chinese forces that it was \"endangering the security of the Chinese reef. Leave immediately and keep off to avoid misunderstanding,\" the report said.", "Shortly afterwards, the plane received a veiled threat: \"Philippine military aircraft, I am warning you again, leave immediately or you will pay the possible consequences.\"", "The Filipino pilot later \"sighted two flare warning signals from the reef\", said the report, which identified the Chinese-occupied island as Gaven Reef.", "Philippine officials have raised their concern twice over the radio transmissions, including in a meeting with Chinese counterparts in Manila earlier this year that focused on the Asian countries' long-unresolved territorial disputes, according to two officials who spoke on condition of anonymity because they were not authorised to discuss the issue publicly.", "It is a new problem that emerged after China transformed seven disputed reefs into islands using dredged sand in the Spratlys\u2026", "The messages used to originate from Chinese coastguard ships in past years but US military officials suspect transmissions now are also being sent from the Beijing-held artificial islands, where far more powerful communications and surveillance equipment has been installed along with weapons such as surface-to-air missiles.", "\"Our ships and aircraft have observed an increase in radio queries that appear to originate from new land-based facilities in the South China Sea,\" Commander Clay Doss, public affairs officer of the US 7th Fleet, said by email in response to questions about the Chinese messages.", "\"These communications do not affect our operations,\" Doss said\u2026.", "US Navy ships and aircraft communicate routinely with regional navies, including the Chinese navy.", "\"The vast majority of these communications are professional, and when that is not the case, those issues are addressed by appropriate diplomatic and military channels,\" Doss said.", "For discussion of some additional elements of China's approach to maritime disputes in the SCS and ECS, including China's nine-dash line in the SCS, see Appendix E ."], "subsections": []}]}, {"section_title": "U.S. Position on Maritime Disputes in SCS and ECS", "paragraphs": [], "subsections": [{"section_title": "Some Key Elements", "paragraphs": ["The U.S. position on territorial and EEZ disputes in the Western Pacific (including those involving China) includes the following elements, among others:", "The United States supports the principle that disputes between countries should be resolved peacefully, without coercion, intimidation, threats, or the use of force, and in a manner consistent with international law. The United States supports the principle of freedom of seas, meaning the rights, freedoms, and uses of the sea and airspace guaranteed to all nations in international law. The United States opposes claims that impinge on the rights, freedoms, and lawful uses of the sea that belong to all nations. The United States takes no position on competing claims to sovereignty over disputed land features in the ECS and SCS. Although the United States takes no position on competing claims to sovereignty over disputed land features in the ECS and SCS, the United States does have a position on how competing claims should be resolved: Territorial disputes should be resolved peacefully, without coercion, intimidation, threats, or the use of force, and in a manner consistent with international law. Claims of territorial waters and EEZs should be consistent with customary international law of the sea and must therefore, among other things, derive from land features. Claims in the SCS that are not derived from land features are fundamentally flawed. Parties should avoid taking provocative or unilateral actions that disrupt the status quo or jeopardize peace and security. The United States does not believe that large-scale land reclamation with the intent to militarize outposts on disputed land features is consistent with the region's desire for peace and stability. The United States, like most other countries, believes that coastal states under UNCLOS have the right to regulate economic activities in their EEZs, but do not have the right to regulate foreign military activities in their EEZs. U.S. military surveillance flights in international airspace above another country's EEZ are lawful under international law, and the United States plans to continue conducting these flights as it has in the past. The Senkaku Islands are under the administration of Japan and unilateral attempts to change the status quo raise tensions and do nothing under international law to strengthen territorial claims.", "For additional information regarding the U.S. position on the issue of operational rights of military ships in the EEZs of other countries, see Appendix F ."], "subsections": []}, {"section_title": "Freedom of Navigation (FON) Program", "paragraphs": ["U.S. Navy ships challenge what the United States views as excessive maritime claims and carry out assertions of operational rights as part of the U.S. Freedom of Navigation (FON) program for challenging maritime claims that the United States believes to be inconsistent with international law. The FON program began in 1979, involves diplomatic activities as well as operational assertions by U.S. Navy ships, and is global in scope, encompassing activities and operations directed not only at China, but at numerous other countries around the world, including U.S. allies and partner states.", "DOD's record of \"excessive maritime claims that were challenged by DoD operational assertions and activities during the period of October 1, 2016, to September 30, 2017, in order to preserve the rights, freedoms, and uses of the sea and airspace guaranteed to all nations by international law\" includes a listing for multiple challenges that were conducted to challenge Chinese claims relating to \"excessive straight baselines; jurisdiction over airspace above the exclusive economic zone (EEZ); restriction on foreign aircraft flying through an Air Defense Identification Zone (ADIZ) without the intent to enter national airspace; domestic law criminalizing survey activity by foreign entities in the EEZ; prior permission required for innocent passage of foreign military ships through the TTS; and actions/statements that indicate a claim to a TTS [territorial sea] around features not so entitled.\""], "subsections": []}]}, {"section_title": "Assessments of China's Strengthening Position in SCS", "paragraphs": ["Some observers now assess that China's actions in the SCS have achieved for China a more dominant or more commanding position in the SCS. One observer, for example, writes in a March 28, 2018, commentary piece that", "as Beijing's regional clout continues to grow, it can be hard for weaker nations to resist it, even with these allies' support. Barely three weeks after the [the U.S. aircraft carrier Carl] Vinson's visit [to Vietnam], the Vietnamese government bowed to Chinese pressure and canceled a major oil drilling project in disputed South China waters. ", "It was yet another sign of the region's rapidly shifting dynamics. For the last decade, the United States and its Asian allies have been significantly bolstering their military activities in the region with the explicit aim of pushing back against China. But Beijing's strength and dominance, along with its diplomatic, economic and military reach, continues to grow dramatically....", "Western military strategists worry that China will, in time, be able to block any activity in the region by the United States and its allies. Already, satellite photos show China installing sophisticated weapons on a range of newly-reclaimed islands where international law says they simply should not be present. In any war, these and other new weapons that China is acquiring could make it all but impossible for the U.S. Navy and other potential enemies of China to operate in the area at all....", "China's increasing confidence in asserting control over the South China Sea has clearly alarmed its neighbors, particularly the Philippines, Vietnam, Malaysia, Indonesia and Brunei, all of whom have competing territorial claims over waters that China claims for itself. But it also represents a major and quite deliberate challenge to the United States which, as an ally to all these nations, has essentially staked its own credibility on the issue.", "Over the last several years, it has become common practice for U.S. warships to sail through nearby waters, pointedly refusing to acknowledge Chinese demands that they register with its unilaterally-declared air and maritime \"identification zones\" (which the United States and its allies do not recognize)....", "None of this, however, addresses the seismic regional change produced by China's island-building strategy....", "... China sees this confrontation as a test case for its ability to impose its will on the wider region\u2014and so far it is winning....", "The United States remains the world's preeminent military superpower, and there is little doubt it could win a fight with China almost anywhere else in the world. In its own backyard, however, Beijing is making it increasingly clear that it calls the shots. And for now, there is little sign anyone in Washington\u2014or anywhere else\u2014has the appetite to seriously challenge that assumption.", "An April 9, 2018, article from a Chinese media outlet states the following:", "The situation in the South China Sea has been developing in favor of China, said Chinese observers after media reported that China is conducting naval drills in the region, at the same time as \"three US carrier battle groups passed by\" the area.", "\"The regional strategic situation is tipping to China's side in the South China Sea, especially after China's construction of islands and reefs,\" Chen Xiangmiao, a research fellow at the National Institute for the South China Sea, told the Global Times on Sunday.", "China has strengthened its facilities in the region and conducted negotiations and cooperation on the South China Sea, which have narrowed China's gap in power with the US, while gaining advantages over Japan and India, according to Chen.", "U.S. Navy Admiral Philip Davidson, in responses to advance policy questions from the Senate Armed Services Committee for an April 17, 2018, hearing before the committee to consider nominations, including Davidson's nomination to become Commander, U.S. Pacific Command (PACOM), stated the following in part (emphasis added):", "With respect to their actions in the South China Sea and more broadly through the Belt and Road Initiative, the Chinese are clearly executing deliberate and thoughtful force posture initiatives. China claims that these reclaimed features and the Belt and Road Initiative [BRI] will not be used for military means, but their words do not match their actions....", "While Chinese air forces are not as advanced as those of the United States, they are rapidly closing the gap through the development of new fourth and fifth generation fighters (including carrier-based fighters), long range bombers, advanced UAVs, advanced anti-air missiles, and long-distance strategic airlift. In line with the Chinese military's broader reforms, Chinese air forces are emphasizing joint operations and expanding their operations, such as through more frequent long range bomber flights into the Western Pacific and South China Sea. As a result of these technological and operational advances, the Chinese air forces will pose an increasing risk not only to our air forces but also to our naval forces, air bases and ground forces....", "In the South China Sea, the PLA has constructed a variety of radar, electronic attack, and defense capabilities on the disputed Spratly Islands, to include: Cuarteron Reef, Fiery Cross Reef, Gaven Reef, Hughes Reef, Johnson Reef, Mischief Reef and Subi Reef. These facilities significantly expand the real-time domain awareness, ISR, and jamming capabilities of the PLA over a large portion of the South China Sea, presenting a substantial challenge to U.S. military operations in this region....", "China's development of forward military bases in the South China Sea began in December 2013 when the first dredger arrived at Johnson Reef. Through 2015, China used dredging efforts to build up these reefs and create manmade islands, destroying the reefs in the process. Since then, China has constructed clear military facilities on the islands, with several bases including hangars, barracks, underground fuel and water storage facilities, and bunkers to house offense and defensive kinetic and non-kinetic systems. These actions stand in direct contrast to the assertion that President Xi made in 2015 in the Rose Garden when he commented that Beijing had no intent to militarize the South China Sea. Today these forward operating bases appear complete. The only thing lacking are the deployed forces.", "Once occupied, China will be able to extend its influence thousands of miles to the south and project power deep into Oceania. The PLA will be able to use these bases to challenge U.S. presence in the region, and any forces deployed to the islands would easily overwhelm the military forces of any other South China Sea-claimants. In short, China is now capable of controlling the South China Sea in all scenarios short of war with the United States ....", "Ultimately, BRI provides opportunities for China's military to expand its global reach by gaining access to foreign air and maritime port facilities. This reach will allow China's military to extend its striking and surveillance operations from the South China Sea to the Gulf of Aden. Moreover, Beijing could leverage BRI projects to pressure nations to deny U.S. forces basing, transit, or operational and logistical support, thereby making it more challenging for the United States to preserve international orders and norms....", "With respect to the Indo-Pacific region, specifically, I am concerned that some nations, including China, assert their interests in ways that threaten the foundational standards for the world's oceans as reflected in the Law of the Sea Convention. This trend is most evident off the coast of China and in the South China Sea where China's policies and activities are challenging the free and open international order in the air and maritime domains. China's attempts to restrict the rights, freedoms, and lawful uses of the sea available to naval and air forces is inconsistent with customary international law and as President Reagan said in the 1983 Statement on United States Oceans Policy, \"the United States will not, however, acquiesce in unilateral acts of other states designed to restrict the rights and freedoms of the international community in navigation and overflight.\"", "A May 8, 2018, press report states the following:", "China's neighbors and rivals fear that the Asian powerhouse is slowly but surely establishing the foundation of an Air Defense Identification Zone (ADIZ) in one of the world's most important and busy waterways\u2026.", "Boosting China's missile defense system in the area would allow it to progressively restrict the movement as well as squeeze the supply lines of smaller claimant states, all of which maintain comparatively modest military capabilities to fortify their sea claims.\"", "Another observer writes in a May 10, 2018, commentary piece that", "All these developments [in the SCS], coupled with the lack of any concerted or robust response from the United States and its allies and partners in the region, point to the inevitable conclusion that the sovereignty dispute in the SCS has \u2013 irreversibly \u2013 become a foregone conclusion. Three compelling reasons justify this assertion\u2026.", "First, China sees the SCS issue as a security matter of paramount importance, according it the status of a \"core interest\" \u2013 on par with resolution of the Taiwan question\u2026.", "Second, the sovereignty of SCS waters is a foregone conclusion partly because of U.S. ambivalence toward Chinese military encroachment\u2026.", "Third, the implicit acquiescence of ASEAN [Association of Southeast Asian Nations] states toward China's moves in the SCS has strengthened its position that all features and waters within the \"nine-dashed line\" belongs to Beijing\u2026.", "The above three factors \u2013 Beijing's sharpened focus on national security, lack of American resolve to balance China in the SCS, and ASEAN's prioritization of peace and stability over sovereignty considerations \u2013 have contributed to the bleak state of affairs today\u2026.", "From the realist perspective, as Beijing accrues naval dominance in the SCS, the rules meant to regulate its behavior are likely to matter less and less\u2014underscoring the geopolitical truism that 'might is right.' While China foreswears the use of coercive force on its Southeast Asian neighbors and may indeed have no offensive intentions today, it has now placed itself in a position to do so in future.", "In other words, while it had no capacity nor intent to threaten Southeast Asian states previously, it has developed the requisite capabilities today.", "Another observer writes in a separate May 10, 2018, commentary piece that", "the South China Sea is being increasingly dominated militarily by China at both its eastern and western ends. This is what researchers at the US Naval War College meant when they told the author that Chinese militarization activities in the region are an attempt to create the equivalent of a \"strategic strait\" in the South China Sea. In other words, through the more or less permanent deployment of Chinese military power at both extreme ends of the South China Sea \u2013 Hainan and Woody Island in the west, and the new (and newly militarized) artificial islands in the east \u2013 Beijing is seeking to transform the South China Sea from an international SLOC into a Chinese-controlled waterway and a strategic chokepoint for other countries\u2026.", "This amalgamation of force means that China's decades-long \"creeping assertiveness\" in this particular body of water has become a full-blown offensive. What all this means is that China is well on its way toward turning the South China Sea in a zone of anti-access/area denial (A2/AD). This means keeping military competitors (particularly the US Navy) out of the region, or seriously impeding their freedom of action inside it.", "A June 1, 2018, press report states the following:", "Through its navy, coast guard, a loose collection of armed fishing vessels, and a network of military bases built on artificial islands, Beijing has gained de facto control of the South China Sea, a panel of Indo-Pacific security experts said Friday.", "And the implications of that control\u2014militarily, economically, diplomatically\u2014are far-reaching for the United States and its partners and allies in the region.", "\"Every vessel [sent on a freedom of navigation transit] is shadowed\" by a Chinese vessel, showing Beijing's ability to respond quickly events in areas it considers its own, retired Marine Lt. Gen. Wallace \"Chip\" Gregson said during an American Enterprise Institute forum.", "Another observer writes in a June 5, 2018, commentary piece that", "It's over in the South China Sea. The United States just hasn't figured it out yet\u2026.", "It is past time for the United States to figure out what matters in its relationship with China, and to make difficult choices about which values have to be defended, and which can be compromised.", "A June 21, 2018, editorial states the following:", "America's defence secretary, James Mattis, promised \"larger consequences\" if China does not change track [in the SCS]. Yet for now [Chinese President Xi Jinping], while blaming America's own \"militarisation\" as the source of tension, must feel he has accomplished much. He has a chokehold on one of the world's busiest shipping routes and is in a position to make good on China's claims to the sea's oil, gas and fish. He has gained strategic depth in any conflict over Taiwan. And, through the sheer fact of possession, he has underpinned China's fatuous historical claims to the South China Sea. To his people, Mr Xi can paint it all as a return to the rightful order. Right now, it is not clear what the larger consequences of that might be.", "Another observer writes in a July 17, 2018, commentary piece that", "Two years after an international tribunal rejected expansive Chinese claims to the South China Sea, Beijing is consolidating control over the area and its resources. While the U.S. defends the right to freedom of navigation, it has failed to support the rights of neighboring countries under the tribunal's ruling. As a result, Southeast Asian countries are bowing to Beijing's demands\u2026.", "In late July 2017, Beijing threatened Vietnam with military action if it did not stop oil and gas exploration in Vietnam's exclusive economic zone, according to a report by the BBC's Bill Hayton. Hanoi stopped drilling. Earlier this year, Vietnam again attempted to drill, and Beijing issued similar warnings\u2026.", "Other countries, including the U.S., failed to express support for Vietnam or condemn China's threats. Beijing has also pressured Brunei, Malaysia and the Philippines to agree to \"joint development\" in their exclusive economic zones\u2014a term that suggests legitimate overlapping claims.", "Meanwhile China is accelerating its militarization of the South China Sea. In April, it deployed antiship cruise missiles, surface-to-air missiles and electronic jammers to artificial islands constructed on Fiery Cross Reef, Subi Reef and Mischief Reef. In May, it landed long-range bombers on Woody Island.", "The Trump administration's failure to press Beijing to abide by the tribunal's ruling is a serious mistake. It undermines international law and upsets the balance of power in the region. Countries have taken note that the tide in the South China Sea is in China's favor, and they are making their strategic calculations accordingly. This hurts U.S. interests in the region."], "subsections": []}]}, {"section_title": "Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "U.S. Response to China's Actions in SCS and ECS", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["Up through 2014, U.S. concern over maritime territorial and EEZ disputes involving China centered more on their potential for causing tension, incidents, and a risk of conflict between China and its neighbors in the region, including U.S. allies Japan and the Philippines and emerging partner states such as Vietnam. While that concern remains, particularly regarding the potential for a conflict between China and Japan involving the Senkaku Islands, U.S. concern since 2014 (i.e., since China's island-building activities in the Spratly Islands were first publicly reported) has shifted increasingly to how China's strengthening position in the SCS may be affecting the risk of a U.S.-China crisis or conflict in the SCS and the broader U.S.-Chinese strategic competition.", "A key issue for Congress is how the United States should respond to China's actions in the SCS and ECS\u2014particularly its island-building and base-construction activities in the Spratly Islands\u2014and to China's strengthening position in the SCS. A key oversight question for Congress is whether the Trump Administration has an appropriate strategy for countering China's \"salami-slicing\" strategy or gray zone operations for gradually strengthening its position in the SCS, for imposing costs on China for its actions in the SCS and ECS, and for defending and promoting U.S. interests in the region."], "subsections": []}, {"section_title": "Review of China's Approach", "paragraphs": ["In considering how to respond to China's actions in the SCS and ECS, an initial step can be to review China's approach to the region. As stated earlier, in general, China's approach to the maritime disputes in the SCS and ECS, and to strengthening its position over time in the SCS, can be characterized as follows:", "China appears to have identified the assertion and defense of its maritime territorial claims in the SCS and ECS, and the strengthening of its position in the SCS, as important national goals. To achieve these goals, China appears to be employing an integrated, whole-of-society strategy that includes diplomatic, informational, economic, military, paramilitary/law enforcement, and civilian elements. In implementing this integrated strategy, China appears to be persistent, patient, tactically flexible, willing to expend significant resources, and willing to absorb at least some amount of reputational and other costs that other countries might seek to impose on China in response to China's actions.", "The above points raise a possible question as to how likely a U.S. response might be to achieve U.S. goals if it were", "one-dimensional rather than multidimensional or whole-of-government; halting or intermittent rather than persistent; insufficiently resourced; reliant on imposed costs that are not commensurate with the importance that China appears to have assigned to achieving its goals in the region, or some combination of these things."], "subsections": []}, {"section_title": "Potential U.S. Goals", "paragraphs": [], "subsections": [{"section_title": "General Goals", "paragraphs": ["Potential general U.S. goals in responding to China's actions in the SCS and ECS include but are not necessarily limited to the following, which are not mutually exclusive:", "fulfilling U.S. security commitments in the Western Pacific, including treaty commitments to Japan and the Philippines; maintaining and enhancing the U.S.-led security architecture in the Western Pacific, including U.S. security relationships with treaty allies and partner states; maintaining a regional balance of power that is favorable to the United States and its allies and partners; de fending the principle of peaceful resolution of disputes , under which disputes between countries should be resolved peacefully, without coercion, intimidation, threats, or the use of force, and in a manner consistent with international law, and resisting the emergence of an alternative \"might-makes-right\" approach to international affairs; defending the principle of freedom of the seas , meaning the rights, freedoms, and uses of the sea and airspace guaranteed to all nations in international law, including the interpretation held by the United States and many other countries concerning operational freedoms for military forces in EEZs; and preventing China from becoming a regional hegemon in East Asia, and potentially as part of that, preventing China from controlling or dominating the ECS or SCS."], "subsections": []}, {"section_title": "Specific Goals", "paragraphs": ["Potential specific U.S. goals in responding to China's actions in the SCS and ECS include but are not necessarily limited to the following, which are not mutually exclusive:", "dissuading China from carrying out any additional base-construction activities that it might be planning for sites that it occupies in the SCS; dissuading China from moving any additional military personnel, equipment, and supplies to bases at sites that it occupies in the SCS, and persuading China to remove military personnel, equipment, and supplies that have already been moved to those bases; dissuading China from initiating island-building or base-construction activities at Scarborough Shoal; dissuading China from declaring an ADIZ over the SCS; encouraging China to reduce or end Chinese Coast Guard ships at the Senkaku Islands in the ECS; encouraging China to halt actions intended to put pressure against the small Philippine military presence at Second Thomas Shoal in the Spratly Islands (or against any other Philippine-occupied sites in the Spratly Islands); encouraging China to provide greater access by Philippine fisherman to waters surrounding Scarborough Shoal or in the Spratly Islands; encouraging China to adopt the U.S./Western definition regarding freedom of the seas, including the freedom of U.S. and other non-Chinese military vessels to operate freely in China's EEZ; and encouraging China to accept and abide by the July 2016 tribunal award in the SCS arbitration case involving the Philippines and China (see Appendix D )."], "subsections": []}]}, {"section_title": "Aligning Actions with Goals", "paragraphs": ["In terms of identifying specific actions that are intended to support U.S. policy goals, a key element would be to have a clear understanding of which actions are intended to support which goals, and to maintain an alignment of actions with policy goals. For example, U.S. freedom of navigation (FON) operations, which often feature prominently in discussions of actual or potential U.S. actions, can directly support a general goal of defending principle of freedom of the seas, but might support other goals only indirectly, marginally, or not at all."], "subsections": []}, {"section_title": "Contributions from Allies and Partners", "paragraphs": ["In assessing how the United States should respond to China's actions in the SCS, another factor that policymakers may consider is the potential contribution that could be made by allies such as Japan, the Philippines, Australia, the UK, and France, as well as potential or emerging partner countries such as Vietnam, Indonesia, and India. Most or all of the countries just mentioned have taken steps of one kind or another in response to China's actions in the SCS and ECS.", "For U.S. policymakers, one key question is how effective those steps by allies and partner countries have been, whether those steps could be strengthened, and whether they should be undertaken independent of or in coordination with the United States. A second key question concerns the kinds of actions that Philippine president Rodrigo Duterte might be willing to take, given his largely nonconfrontational policy toward China regarding the SCS, and what implications Philippine reluctance to take certain actions may have for limiting or reducing the potential effectiveness of U.S. options for responding to China's actions in the SCS."], "subsections": []}, {"section_title": "U.S. Actions During Obama Administration", "paragraphs": ["In apparent response to China's actions in the SCS and ECS, the United States during the Obama Administration took a number of actions, including the following:", "reiterating the U.S. position on maritime territorial claims in the area in various public fora; expressing strong concerns about China's island-building and base-construction activities, and calling for a halt on such activities by China and other countries in the region; taking steps to improve the ability of the Philippines, Vietnam, Malaysia, and Indonesia to maintain maritime domain awareness (MDA) and patrol their EEZs, including the Southeast Asia Maritime Security Initiative (MSI), an initiative (since renamed the Indo-Pacific MSI) announced by the Obama Administration in May 2015 and subsequently legislated by Congress to provide $425 million in maritime security assistance to those four countries over a five-year period; taking steps to strengthen U.S. security cooperation with Japan, the Philippines, Vietnam, and Singapore, including signing an agreement with the Philippines that provides U.S. forces with increased access to Philippine bases, increasing the scale of joint military exercises involving U.S. and Philippine forces, relaxing limits on sales of certain U.S. arms to Vietnam, and operating U.S. Navy P-8 maritime patrol aircraft from Singapore; expressing support for the idea of Japanese patrols in the SCS; and stating that the United States would support a multinational maritime patrol of the SCS by members of ASEAN.", "Some observers, both during and after the Obama Administration, have criticized the Obama Administration for not doing enough to counter China's actions in the SCS and ECS. In particular, they have argued that the Obama Administration did not", "react strongly enough to China's occupation of Scarborough Shoal in 2012; react strongly enough to China's island-building and base-construction activities in the Spratly Islands starting around December 2013; do enough in terms of conducting and offering sufficiently clear and strong legal rationales for U.S. freedom of navigation (FON) operations in the SCS; do enough to publicize, rhetorically support, and enforce the July 2016 tribunal award in the SCS arbitration case involving the Philippines and China; and impose sufficiently strong costs on China's for its actions in the SCS and ECS.", "As a result of the above, these critics have argued, the Obama Administration in effect sent a message to China that the United States would not strongly oppose China's actions in the SCS and ECS\u2014a message, these critics have argued, that may have encouraged and accelerated China's actions.", "Supporters of the Obama Administration's actions in response to China's actions in the SCS and ECS have argued that those actions were substantial and proportionate to China's actions and successful in", "deterring China from initiating island-building and base-construction activities at Scarborough Shoal; having U.S. military aircraft disregard the ADIZ that China declared over the ECS, and in deterring China from declaring an ADIZ over the SCS; imposing political and reputational costs on China for its actions in the ECS and SCS during this time; and working with regional allies and partners to impose costs on China and strengthen the U.S.-led security architecture for the region."], "subsections": []}, {"section_title": "U.S. Actions During Trump Administration", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["In addition to continuing to implement the above-mentioned Indo-Pacific MSI and conducting recurring freedom of navigation (FON) operations in the SCS (see next section), the Trump Administration reportedly has taken other actions to promote U.S. interests in that area. These steps include actions to increase U.S. defense and intelligence cooperation with Vietnam and Indonesia, and U.S. assistance to improve the maritime security capabilities of the two countries. A January 9, 2018, press report states the following:", "The United States has accused China of \"provocative militarisation\" of disputed areas in the South China Sea and will continue sending vessels to the region to carry out freedom-of-navigation patrols, according to a top US adviser on Asia policy.", "Brian Hook, a senior adviser to US Secretary of State Rex Tillerson, said on Tuesday [January 9] that the issue of the South China Sea was raised at all diplomatic and security dialogues between China and the US...", "\"China's provocative militarisation of the South China Sea is one area where China is contesting international law. They are pushing around smaller states in ways that put a strain on the global system,\" Hook said during a media telephone conference.", "\"We are going to back up freedom-of-navigation operations and let them know we will fly, sail and operate wherever international law allows.\"...", "\"We strongly believe China's rise cannot come at the expense of the values and rule-based order. That order is the foundation of peace and stability in the Indo-Pacific and also around the world,\" Hook said.", "\"When China's behaviour is out of step with these values and these rules we will stand up and defend the rule of law.\""], "subsections": []}, {"section_title": "May 3, 2018, Statement About \"Near-Term and Long-Term Consequences\"", "paragraphs": ["A May 3, 2018, press report stated the following:", "The United States has raised concerns with China about its latest militarization of the South China Sea and there will be near-term and long-term consequences, the White House said on Thursday [May 3].", "U.S. news network CNBC reported on Wednesday that China had installed anti-ship cruise missiles and surface-to-air missile systems on three manmade outposts in the South China Sea. It cited sources with direct knowledge of U.S. intelligence. ", "Asked about the report, White House spokeswoman Sarah Sanders told a regular news briefing: \"We're well aware of China's militarization of the South China Sea. We've raised concerns directly with the Chinese about this and there will be near-term and long-term consequences.\" ", "Sanders did not say what the consequences might be."], "subsections": []}, {"section_title": "May 23, 2018, Withdrawal of Invitation to RIMPAC Exercise", "paragraphs": ["On May 23, 2018, DOD announced that it was disinviting China from the 2018 RIMPAC (Rim of the Pacific) exercise. RIMPAC is a U.S.-led, multilateral naval exercise in the Pacific involving naval forces from more than two dozen countries that is held every two years. At DOD's invitation, China participated in the 2014 and 2016 RIMPAC exercises. DOD had invited China to participate in the 2018 RIMPAC exercise, and China had accepted that invitation.", "Observers who have argued for the United States to take stronger actions in response to China's actions in the ECS and SCS have argued that the United States should, among other things, not invite China to participate in the 2018 RIMPAC exercise, on the grounds that doing so would in effect reward China for its recent actions in the ECS and SCS. They have also argued that the value to the United States and its allies of information gained from observing Chinese naval forces operate during the exercise would be outweighed by the value to China of information that China would gain from observing U.S. and other allied and partner navies operate during the exercise. After DOD had issued the invitation to China to participate in the 2018 RIMPAC exercise, these observers argued that the invitation should be withdrawn.", "Supporters of having China participate in RIMPAC exercises have argued that they are valuable for maintaining a constructive working relationship with China's navy\u2014something, they argue, that could be of particular value if there were a U.S.-Chinese incident at sea or a U.S.-China crisis over some issue. They have also argued that China's participation in RIMPAC exercises provides opportunities to encourage China's navy to adopt U.S. and Western norms relating to issues such as freedom of the seas and avoidance of incidents at sea, and that the value to the United States and its allies of information gained from observing China's naval forces operate during the exercise is not outweighed by value to China of the information gained by China from observing U.S., allied, and partner navies operate during the exercises, particularly since China could observe the exercise using intelligence-gathering ships or perhaps other means, even without participating in the exercise.", "A statement from DOD about the withdrawal of the invitation for China to participate in the 2018 RIMPAC exercise states the following:", "The United States is committed to a free and open Indo-Pacific. China's continued militarization of disputed features in the South China Sea only serve to raise tensions and destabilize the region. As an initial response to China's continued militarization of the South China Sea we have disinvited the PLA Navy from the 2018 Rim of the Pacific (RIMPAC) Exercise. China's behavior is inconsistent with the principles and purposes of the RIMPAC exercise.", "We have strong evidence that China has deployed anti-ship missiles, surface-to-air missile (SAM) systems, and electronic jammers to contested features in the Spratly Islands region of the South China Sea. China's landing of bomber aircraft at Woody Island has also raised tensions.", "While China has maintained that the construction of the islands is to ensure safety at sea, navigation assistance, search and rescue, fisheries protection, and other non-military functions the placement of these weapon systems is only for military use.", "We have called on China to remove the military systems immediately and to reverse course on the militarization of disputed South China Sea features.", "We believe these recent deployments and the continued militarization of these features is a violation of the promise that President Xi made to the United States and the World not to militarize the Spratly Islands.", "A May 23, 2018, press report states the following:", "The Pentagon rescinded an invitation to China to participate in an international military exercise in the Pacific Ocean next month, signaling disapproval to Beijing for what U.S. officials say is its refusal to stop militarizing South China Sea islands. ", "Defense Secretary Jim Mattis, after weeks of internal debate within the Pentagon, concluded that China shouldn't be allowed to participate in the American-led biennial Rim of the Pacific exercise, slated to begin in June, according to U.S. officials. The invitation's withdrawal hasn't been previously disclosed.", "Chinese officials in Washington were notified of the decision Wednesday morning, said the U.S. officials. China's top diplomat, State Councilor Wang Yi, criticized the Pentagon's decision in comments while visiting the State Department Wednesday.", "\"We find that a very unconstructive move, nonconstructive move,\" Mr. Wang told reporters. \"We hope the U.S. will change such a negative mindset.\"...", "After The Wall Street Journal published [an initial version of] this article on Wednesday [May 23], Pentagon officials called their move \"an initial response\" to China's militarization of the islands.", "\"We have strong evidence that China has deployed anti-ship missiles, surface-to-air missile (SAM) systems, and electronic jammers to contested features in the Spratly Islands region of the South China Sea,\" Lt. Col. Chris Logan, a Pentagon spokesman, said in a statement. \"China's landing of a bomber aircraft at Woody Island has also raised tensions.\"", "Eric Sayers, of the Center for Strategic and International Studies, a think tank in Washington, and a former adviser to U.S. Pacific Command, said the Pentagon move \"will be a minor blow to the PLA Navy's prestige.\"", "He said, \"It will also send the signal to Beijing that China cannot expect to continue to militarize the South China Sea and still be treated as a welcomed member of the international maritime community.\"", "But, Mr. Sayers added, the Trump administration must still develop an overall strategy in the Indo- Pacific region if it hopes to influence the maritime domain there. \"Thus far, there is little evidence or new initiatives one can point to that distinguishes this administration's regional policy from the previous one,\" he said.", "The decision to rescind the invitation came after more than a month of internal Trump administration debate about China, including the timing of any rescission, the officials said, especially given the trade talks.", "Top State Department officials initially advised against rescinding the invitation, hoping that diplomatic interventions would convince China to at least remove missiles from those islands, said the U.S. officials. State Department officials didn't immediately respond to a request for comment.", "But Pentagon officials held the view that it was time to impose a cost on the Chinese for their behavior in the South China Sea, the officials said."], "subsections": []}, {"section_title": "June 3, 2018, Press Report About Potential Increase in U.S. Patrols", "paragraphs": ["A June 3, 2018, press report states the following:", "The United States is considering intensified naval patrols in the South China Sea in a bid to challenge China's growing militarization of the waterway, actions that could further raise the stakes in one of the world's most volatile areas.", "The Pentagon is weighing a more assertive program of so-called freedom-of-navigation operations close to Chinese installations on disputed reefs, two U.S. officials and Western and Asian diplomats close to discussions said. ", "The officials declined to say how close they were to finalizing a decision. ", "Such moves could involve longer patrols, ones involving larger numbers of ships or operations involving closer surveillance of Chinese facilities in the area, which now include electronic jamming equipment and advanced military radars.", "U.S. officials are also pushing international allies and partners to increase their own naval deployments through the vital trade route as China strengthens its military capabilities on both the Paracel and Spratly islands, the diplomats said, even if they stopped short of directly challenging Chinese holdings. ", "\"What we have seen in the last few weeks is just the start, significantly more is being planned,\" said one Western diplomat, referring to a freedom of navigation patrol late last month that used two U.S. ships for the first time. ", "\"There is a real sense more needs to be done.\"\u2026", "Critics have said the patrols have little impact on Chinese behavior and mask the lack of a broader strategy to deal with China's growing dominance of the area\u2026.", "U.S. Defence Secretary Jim Mattis warned in Singapore on Saturday [June 2] that China's militarization of the South China Sea was now a \"reality\" but that Beijing would face unspecified consequences."], "subsections": []}, {"section_title": "November 13, 2018, Statement Opposing Agreements Limiting Freedom of Navigation", "paragraphs": ["A November 13, 2018, press report states the following:", "National security adviser John Bolton said [on November 13] the U.S. would oppose any agreements between China and other claimants to the South China Sea that limit free passage to international shipping, and that American naval vessels would continue to sail through those waters.", "Mr. Bolton's remarks served as a warning to Southeast Asian leaders, who are preparing for a regional summit in Singapore this week, and particularly for the Philippines, which is now in talks with Beijing about jointly exploring natural resources in the contested area.", "In meetings to develop a code of conduct this year for the South China Sea, China has tried to secure a veto over Southeast Asian nations hosting military exercises with other countries in the disputed waters\u2026.", "Mr. Bolton said the U.S. welcomes the negotiations in principle. In a media briefing in Singapore, he described them as a plus.", "But he stressed that \"the outcome has to be mutually acceptable, and also has to be acceptable to all the countries that have legitimate maritime and naval rights to transit and other associate rights that we don't want to see infringed.\""], "subsections": []}, {"section_title": "Potential Distractions", "paragraphs": ["Some observers have expressed concern that the Trump Administration's focus from time to time on North Korea has sometimes distracted the Administration from the situation in the SCS, permitting China to more easily increase or consolidate its gains in the area. Other observers have expressed concern that the Trump Administration's focus on reducing the U.S. trade deficit with China could distract the Administration from other issues relating to China, including China's actions in the SCS."], "subsections": []}]}, {"section_title": "Freedom of Navigation (FON) Operations in SCS", "paragraphs": [], "subsections": [{"section_title": "Obama Administration FON Operations", "paragraphs": ["At a September 17, 2015, hearing before the Senate Armed Services Committee on DOD's maritime security strategy in the Asia-Pacific region, DOD witnesses stated, in response to questioning, that the United States had not conducted a freedom of navigation (FON) operation within 12 miles of a Chinese-occupied land feature in the Spratly Islands since 2012. This led to a public debate in the United States (that was watched by observers in the Western Pacific) over whether the United States should soon conduct such an operation, particularly given China's occupation of Scarborough Shoal in 2012 and China's island-building activities at sites that its occupies in the SCS.", "Opponents argued that conducting a FON operation could antagonize China and give China an excuse to militarize its occupied sites in the SCS. Supporters argued that not conducting such an operation was inconsistent with the underlying premise of the U.S. FON program that navigational rights which are not regularly exercised are at risk of atrophy; that it was inconsistent with the U.S. position of taking no position on competing claims to sovereignty over disputed land features in the SCS (because it tacitly accepts Chinese sovereignty over those features); that it effectively rewarded (rather than imposed costs on) China for its assertive actions in the SCS, potentially encouraging further such actions; and that China intends to militarize its occupied sites in the Spratly Islands, regardless of whether the United States conducts FON operations there.", "The Obama Administration reportedly considered, for a period of weeks, whether to conduct such an operation in the near future. Some observers argued that the Obama Administration's extended consideration of the question, and the press reporting on that deliberation, unnecessarily raised the political stakes involved in whether to conduct what, in the view of these observers, should have been a routine FON operation.", "The Obama Administration decided in favor of conducting the operation, and the operation reportedly was conducted near the Chinese-occupied site of Subi Reef on October 27, 2015 (which was October 26, 2015, in Washington, DC), using the U.S. Navy destroyer Lassen in conjunction with a U.S. Navy P-8 maritime patrol aircraft flying overhead.", "Statements from executive branch sources about the operation that were reported in the press created some confusion among observers regarding how the operation was conducted and what rationale the Obama Administration was citing as the legal basis for the operation. In particular, there was confusion among observers as to whether the United States was defending the operation as an expression of the right of innocent passage \u2014a rationale, critics argued, that would muddle the legal message sent by the operation, possibly implying U.S. acceptance of Chinese sovereignty over Subi Reef, which would inadvertently turn the operation into something very different and perhaps even self-defeating from a U.S. perspective.", "A second FON operation in the SCS was conducted on January 29, 2016, near Triton Island in the Paracel Islands, by the U.S. Navy destroyer C urtis Wilber . A third FON operation in the SCS was conducted on May 10, 2016, in which the destroyer William P. Lawrence conducted an innocent passage within 12 nautical miles of Fiery Cross Reef, a Chinese-occupied feature in the Spratly Islands that is also claimed by Taiwan, Vietnam, and the Philippines. A fourth FON operation in the SCS occurred on October 21, 2016, involving the destroyer Decatur operating near the Paracel Islands. This was the final announced FON operation in the South China Sea during the Obama Administration."], "subsections": []}, {"section_title": "Trump Administration FON Operations", "paragraphs": ["As of early May 2017, the Trump Administration had not conducted any announced FON operations in the SCS, and DOD reportedly had turned down proposals from the Navy to conduct such operations, prompting some observers to argue that the Trump Administration, in its first few months in office, appeared to be more hesitant about conducting FON operations in the SCS than the Obama Administration was during its final 15 months in office (i.e., since October 2015). DOD officials stated that in spite of the absence of announced FON operations in the SCS, U.S. policy on such operations had not changed, and that the United States intended to conduct FON operations in the SCS in the near future.", "As shown in Table 1 , the Trump Administration conducted an FON operation in the SCS on May 25, 2017, and has conducted multiple additional FON operations in the SCS since then. In general, China has objected to each of these operations and has stated that it sent Chinese Navy ships in each case to warn the U.S. Navy ships to leave the areas in question. The FON operation conducted on September 30, 2018, led to an intense encounter, discussed elsewhere in this report, between the U.S. Navy ship that conducted the operation (the USS Decatur [DDG-73]) and the Chinese Navy ship that was sent to warn it off.", "In addition to conducting FON operations in the Spratly and Paracel islands, U.S. Navy ships have steamed through the Taiwan Strait on multiple occasions, and Air Force long-range bombers have periodically conducted flyovers above the ECS and SCS.", "A September 1, 2017, press report states that", "The Pentagon for the first time has set a schedule of naval patrols in the South China Sea in an attempt to create a more consistent posture to counter China's maritime claims there, injecting a new complication into increasingly uneasy relations between the two powers.", "The U.S. Pacific Command has developed a plan to conduct so-called freedom-of-navigation operations two to three times over the next few months, according to several U.S. officials, reinforcing the U.S. challenge to what it sees as excessive Chinese maritime claims in the disputed South China Sea. Beijing claims sovereignty over all South China Sea islands and their adjacent waters.", "The plan marks a significant departure from such military operations in the region during the Obama administration, when officials sometimes struggled with when, how and where to conduct those patrols. They were canceled or postponed based on other political factors after what some U.S. officials said were contentious internal debates.", "The idea behind setting a schedule contrasts with the more ad hoc approach to conducting freedom-of-navigation operations, known as \"fonops\" in military parlance, and establish more regularity in the patrols. Doing so may help blunt Beijing's argument that the patrols amount to a destabilizing provocation each time they occur, U.S. officials said....", "Officials described the new plan as a more predetermined way of conducting such patrols than in the past, though not immutable. The plan is in keeping with the Trump administration's approach to military operations, which relies on giving commanders leeway to determine the U.S. posture. In keeping with policies against announcing military operations before they occur, officials declined to disclose where and when they would occur....", "In a new facet, some freedom-of-navigation patrols may be \"multi-domain\" patrols, using not only U.S. Navy warships but U.S. military aircraft as well.", "Thus far, there have been three publicly disclosed freedom-of-navigation operations under the Trump administration. The last one was conducted on Aug. 10 by the navy destroyer, the USS John S. McCain, which days later collided with a cargo ship, killing 10 sailors.", "That patrol around Mischief Reef\u2014one of seven fortified artificial islands that Beijing has built in the past three years in the disputed Spratlys archipelago\u2014also included an air component.", "According to U.S. officials, two P-8 Poseidon reconnaissance aircraft flew above the McCain in a part of the operation that hadn't been previously disclosed. More navigation patrols using warships likely now will include aircraft overhead, they said.\"", "An October 12, 2017, blog post states the following:", "The [reported October 10, 2017,] FONOP is the fourth in just five months and demonstrates that the Trump administration is accepting a higher frequency for these operations. After the Obama administration initiated South China Sea operations in October 2015, beginning with challenges to Chinese and other South China Sea claimant state possessions in the Spratly group, it only carried out three additional operations in 2016.", "Critics of the Obama administration's approach to the U.S. Navy's freedom of navigation operations in the South China Sea suggested that the relative infrequency and perception that the operations were subject of the overall ebbs and flows of the U.S.-China bilateral relationship undermined their stated utility as legal signaling tools. Even with stepped up FONOPs this year, the Trump administration hasn't changed the fundamentals of U.S. South China Sea policy, which continues to remain agnostic about sovereignty claims and focuses exclusively on freedom of navigation, overflight, and the preservation of international law and order in the region.", "With the exception of USS Dewey's May 2017 FONOP around Mischief Reef\u2014notable for being the first FONOP this year\u2014successive Trump administration FONOPs have attracted comparatively less attention in the press. Proponents of these operations in the United States have argued that they should not be seen as noteworthy events, but more as a fact of life in the South China Sea\u2014a reminder of the U.S. Navy's forward presence in the area and its commitment to freedom of navigation.", "A corollary of the increased pace of operations this year is that a slowdown in U.S. FONOPs could appear to be motivated by broader diplomatic concerns in the bilateral U.S.-China relationship."], "subsections": []}, {"section_title": "Legal Arguments Relating to FON Operations", "paragraphs": ["In assessing U.S. FON operations that take place within 12 nautical miles of Chinese-occupied sites in the SCS, one question relates to whether to conduct such operations, exactly where, and how often. A second question relates to the rationale that is cited as the legal basis for conducting them. Regarding this second question, one U.S. specialist on international law of the sea states the following regarding three key legal points in question (emphasis added):", "Regarding features in the water whose sovereignty is in dispute, \"Every feature occupied by China is challenged by another claimant state, often with clearer line of title from Spanish, British or French colonial rule. The nation, not the land, is sovereign, which is why there is no territorial sea around Antarctica\u2014it is not under the sovereignty of any state, despite being a continent. As the United States has not recognized Chinese title to the features, it is not obligated to observe requirements of a theoretical territorial sea. Since the territorial sea is a function of state sovereignty of each rock or island, and not a function of simple geography, if the United States does not recognize any state having title to the feature, then it is not obligated to observe a theoretical territorial sea and may treat the feature as terra nullius . Not only do U.S. warships have a right to transit within 12 nm [nautical miles] of Chinese features, they are free to do so as an exercise of high seas freedom under article 87 of the Law of the Sea Convention, rather than the more limited regime of innocent passage. Furthermore, whereas innocent passage does not permit overflight, high seas freedoms do, and U.S. naval aircraft lawfully may overfly such features.... More importantly, even assuming that one or another state may have lawful title to a feature, other states are not obligated to confer upon that nation the right to unilaterally adopt and enforce measures that interfere with navigation, until lawful title is resolved. Indeed, observing any nation's rules pertaining to features under dispute legitimizes that country's claim and takes sides.\" Regarding features in the water whose sovereignty has been resolved, \"It is unclear whether features like Fiery Cross Reef are rocks or merely low-tide elevations [LTEs] that are submerged at high tide, and after China has so radically transformed them, it may now be impossible to determine their natural state. Under the terms of the law of the sea, states with ownership over naturally formed rocks are entitled to claim a 12 nm territorial sea. On the other hand, low-tide elevations in the mid-ocean do not qualify for any maritime zone whatsoever. Likewise, artificial islands and installations also generate no maritime zones of sovereignty or sovereign rights in international law, although the owner of features may maintain a 500-meter vessel traffic management zone to ensure navigational safety.\" Regarding features in the water whose sovereignty has been resolved and which do qualify for a 12-nautical-mile territorial sea, \" Warships and commercial vessels of all nations are entitled to conduct transit in innocent passage in the territorial sea of a rock or island of a coastal state, although aircraft do not enjoy such a right.\"", "These three legal points appear to create at least four options for the rationale to cite as the legal basis for conducting an FON operation within 12 miles of Chinese-occupied sites in the SCS:", "One option would be to state that since there is a dispute as to the sovereignty of the site or sites in question, that site or those sites are terra nullius , that the United States consequently is not obligated to observe requirements of a theoretical territorial sea, and that U.S. warships thus have a right to transit within 12 nautical miles of the site or sites as an exercise of high seas freedom under article 87 of the Law of the Sea Convention. A second option, if the site or sites were LTEs prior to undergoing land reclamation, would be to state that the site or sites are not entitled to a 12-nautical-mile territorial sea, and that U.S. warships consequently have a right to transit within 12 nautical miles as an exercise of high seas freedom. A third option would be to state that the operation was being conducted under the right of innocent passage within a 12-nautical-mile territorial sea. A fourth option would be to not provide a public rationale for the operation, so as to create uncertainty for China (and perhaps other observers) as to exact U.S. legal rationale.", "If the fourth option is not taken, and consideration is given to selecting from among the first three options, then it might be argued that choosing the second option might inadvertently send a signal to observers that the legal point associated with the first option was not being defended, and that choosing the third option might inadvertently send a signal to observers that the legal points associated with the first and second options were not being defended.", "Regarding the FON operation conducted on May 24, 2017, near Mischief Reef, the U.S. specialist on international law of the sea quoted above states the following:", "This was the first public notice of a freedom of navigation (FON) operation in the Trump administration, and may prove the most significant yet for the United States because it challenges not only China's apparent claim of a territorial sea around Mischief Reef, but in doing so questions China's sovereignty over the land feature altogether....", "The Pentagon said the U.S. warship did a simple military exercise while close to the artificial island\u2014executing a \"man overboard\" rescue drill. Such drills may not be conducted in innocent passage, and therefore indicate the Dewey exercised high seas freedoms near Mischief Reef. The U.S. exercise of high seas freedoms around Mischief Reef broadly repudiates China's claims of sovereignty over the feature and its surrounding waters. The operation stands in contrast to the flubbed transit by the USS Lassen near Subi Reef on October 27, 2015, when it appeared the warship conducted transit in innocent passage and inadvertently suggested that the feature generated a territorial sea (by China or some other claimant). That operation was roundly criticized for playing into China's hands, with the muddy legal rationale diluting the strategic message. In the case of the Dewey, the Pentagon made clear that it did not accept a territorial sea around Mischief Reef\u2014by China or any other state. The United States has shoehorned a rejection of China's sovereignty over Mischief Reef into a routine FON operation.", "Mischief Reef is not entitled to a territorial sea for several reasons. First, the feature is not under the sovereignty of any state. Mid-ocean low-tide elevations are incapable of appropriation, so China's vast port and airfield complex on the feature are without legal effect. The feature lies 135 nautical miles from Palawan Island, and therefore is part of the Philippine continental shelf. The Philippines enjoys sovereign rights and jurisdiction over the feature, including all of its living and non-living resources....", "Second, even if Mischief Reef were a naturally formed island, it still would not be entitled to a territorial sea until such time as title to the feature was determined. Title may be negotiated, arbitrated or adjudicated through litigation. But mere assertion of a claim by China is insufficient to generate lawful title. (If suddenly a new state steps forward to claim the feature\u2014Britain, perhaps, based on colonial presence\u2014would it be entitled to the presumption of a territorial sea?) Even Antarctica, an entire continent, does not automatically generate a territorial sea. A territorial sea is a function of state sovereignty, and until sovereignty is lawfully obtained, no territorial sea inures. ", "Third, no state, including China, has established baselines around Mischief Reef in accordance with article 3 of UNCLOS. A territorial sea is measured from baselines; without baselines, there can be no territorial sea. What is the policy rationale for this construction? Baselines place the international community on notice that the coastal state has a reasonable and lawful departure from which to measure the breadth of the territorial sea. Unlike the USS Lassen operation, which appeared to be a challenge to some theoretical or \"phantom\" territorial sea, the Dewey transit properly reflects the high seas nature of the waters immediately surrounding Mischief Reef as high seas.", "As a feature on the Philippine continental shelf, Mischief Reef is not only incapable of ever generating a territorial sea but also devoid of national airspace. Aircraft of all nations may freely overfly Mischief Reef, just as warships and commercial ships may transit as close to the shoreline as is safe and practical.", "The Dewey transit makes good on President Obama's declaration in 2016 that the Annex VII tribunal for the Philippines and China issued a \"final and binding\" decision....", "The United States will include the Dewey transit on its annual list of FON operations for fiscal year 2017, which will be released in the fourth quarter or early next year. How will the Pentagon account for the operation\u2014what was challenged? The Dewey challenged China's claim of \"indisputable sovereignty\" to Mischief Reef as one of the features in the South China Sea, and China's claim of \"adjacent\" waters surrounding it. This transit cuts through the diplomatic dissembling that obfuscates the legal seascape and is the most tangible expression of the U.S. view that the arbitration ruling is \"final and binding.\"", "Regarding this same FON operation, two other observers stated the following:", "The Dewey's action evidently challenged China's right to control maritime zones adjacent to the reef\u2014which was declared by the South China Sea arbitration to be nothing more than a low tide elevation on the Philippine continental shelf. The operation was hailed as a long-awaited \"freedom of navigation operation\" (FONOP) and \"a challenge to Beijing's moves in the South China Sea,\" a sign that the United States will not accept \"China's contested claims\" and militarization of the Spratlys, and a statement that Washington \"will not remain passive as Beijing seeks to expand its maritime reach.\" Others went further and welcomed this more muscular U.S. response to China's assertiveness around the Spratly Islands to challenge China's \"apparent claim of a territorial sea around Mischief Reef\u2026[as well as] China's sovereignty over the land feature\" itself.", "But did the Dewey actually conduct a FONOP? Probably\u2014but maybe not. Nothing in the official description of the operation or in open source reporting explicitly states that a FONOP was in fact conducted. Despite the fanfare, the messaging continues to be muddled. And that is both unnecessary and unhelpful.", "In this post, we identify the source of ambiguity and provide an overview of FONOPs and what distinguishes them from the routine practice of freedom of navigation. We then explain why confusing the two is problematic\u2014and particularly problematic in the Spratlys, where the practice of free navigation is vastly preferable to the reactive FONOP. FONOPs should continue in routine, low-key fashion wherever there are specific legal claims to be challenged (as in the Paracel Islands, the other disputed territories in the SCS); they should not be conducted\u2014much less hyped up beyond proportion\u2014in the Spratlys. Instead, the routine exercise of freedom of navigation is the most appropriate way to use the fleet in support of U.S. and allied interests....", "... was the Dewey's passage a FONOP designed to be a narrow legal challenge between the US and Chinese governments? Or was it a rightful and routine exercise of navigational freedoms intended to signal reassurance to the region and show U.S. resolve to defend the rule sets that govern the world's oceans? Regrettably, the DOD spokesman's answer was not clear. The distinction is not trivial....", "The U.S. should have undertaken, and made clear that it was undertaking, routine operations to exercise navigational freedoms around Mischief Reef\u2014rather than (maybe) conducting a FONOP.", "The first problem with conducting FONOP operations at Mischief Reef or creating confusion on the point is that China has made no actual legal claim that the U.S. can effectively challenge. In fact, in the Spratlys, no state has made a specific legal claim about its maritime entitlements around the features it occupies. In other words, not only are there no \"excessive claims,\" there are no clear claims to jurisdiction over water space at all. Jurisdictional claims by a coastal state begin with an official announcement of baselines\u2014often accompanied by detailed geographic coordinates\u2014to put other states on notice of the water space the coastal state claims as its own.", "China has made several ambiguous claims over water space in the South China Sea. It issued the notorious 9-dashed line map, for instance, and has made cryptic references that eventually it might claim that the entire Spratly Island area generates maritime zones as if it were one physical feature. China has a territorial sea law that requires Chinese maritime agencies only to employ straight baselines (contrary to international law). And it formally claimed straight baselines all along its continental coastline, in the Paracels, and for the Senkaku/Diaoyu Islands, which China claims and Japan administers. All of these actions are contrary to international law and infringe on international navigational rights. These have all been subject to American FONOPs in the past\u2014and rightly so. They are excessive claims. But China has never specified baselines in the Spratlys. Accordingly, no one knows for sure where China will claim a territorial sea there. So for now, since there is no specific legal claim to push against, a formal FONOP is the wrong tool for the job. The U.S. Navy can and should simply exercise the full, lawful measure of high seas freedoms in and around the Spratly Islands. Those are the right tools for the job where no actual coastal state claim is being challenged.", "Second, the conflation of routine naval operations with the narrow function of a formal FONOP needlessly politicizes this important program, blurs the message to China and other states in the region, blunts its impact on China's conduct, and makes the program less effective in other areas of the globe. This conflation first became problematic with the confused and confusing signaling that followed the FONOP undertaken by the USS Lassen in the fall of 2015. Afterward, the presence or absence of a FONOP dominated beltway discussion about China's problematic conduct in the South China Sea and became the barometer of American commitment and resolve in the region. Because of this discussion, FONOPs became reimagined in the public mind as the only meaningful symbol of U.S. opposition to Chinese policy and activity in the SCS. In 2015 and 2016 especially, FONOPs were often treated as if they were the sole available operational means to push back against rising Chinese assertiveness. This was despite a steady U.S. presence in the region for more than 700 ship days a year and a full schedule of international exercises, ample intelligence gathering operations, and other important naval demonstrations of U.S. regional interests.", "In consequence, we should welcome the apparent decision not to conduct a FONOP around Scarborough Shoal\u2014where China also never made any clear baseline or territorial sea claim. If U.S. policy makers intend to send a signal to China that construction on or around Scarborough would cross a red line, there are many better ways than a formal FONOP to send that message....", "The routine operations of the fleet in the Pacific theater illustrate the crucial\u2014and often misunderstood\u2014difference between a formal FONOP and operations that exercise freedoms of navigation. FONOPs are not the sole remedy to various unlawful restrictions on navigational rights across the globe, but are instead a small part of a comprehensive effort to uphold navigational freedoms by practicing them routinely. That consistent practice of free navigation, not the reactive FONOP, is the policy best suited to respond to Chinese assertiveness in the SCS. This is especially true in areas such as the Spratly Islands where China has made no actual legal claims to challenge."], "subsections": []}, {"section_title": "What FON Operations Can\u2014and Cannot\u2014Accomplish", "paragraphs": ["As mentioned earlier, in terms of identifying specific actions that are intended to support U.S. policy goals, a key element would be to have a clear understanding of which actions are intended to support which goals, and to maintain an alignment of actions with policy goals. U.S. freedom of navigation (FON) operations can directly support a general goal of defending principle of freedom of the seas, but might support other goals only indirectly, marginally, or not at all."], "subsections": []}]}, {"section_title": "Cost-Imposing Actions", "paragraphs": ["Some of the actions taken to date by the United States, as well as some of those suggested by observers who argue in favor of stronger U.S. actions, are intended to impose costs on China for conducting certain activities in the ECS and SCS, with the aim of persuading China to stop or reverse those activities. Cost-imposing actions can come in various forms (e.g., reputational/political, institutional, or economic).", "Although the potential additional or strengthened actions often relate to the Western Pacific, potential cost-imposing actions do not necessarily need to be limited to that region. As a hypothetical example for purposes of illustrating the point, one potential cost-imposing action might be for the United States to respond to unwanted Chinese activities in the ECS or SCS by moving to suspend China's observer status on the Arctic Council. Expanding the potential scope of cost-imposing actions to regions beyond the Western Pacific can make it possible to employ elements of U.S. power that cannot be fully exercised if the examination of potential cost-imposing strategies is confined to the Western Pacific. It may also, however, expand, geographically or otherwise, areas of tension or dispute between the United States and China.", "Actions to impose costs on China can also impose costs, or lead to China imposing costs, on the United States and its allies and partners. Whether to implement cost-imposing actions thus involves weighing the potential benefits and costs to the United States and its allies and partners of implementing those actions, as well as the potential consequences to the United States and its allies and partners of not implementing those actions."], "subsections": []}, {"section_title": "Potential Further U.S. Actions Suggested by Observers", "paragraphs": ["Some observers argue that the current response to China's actions in the SCS is inadequate, and have proposed taking stronger actions. Appendix G presents a bibliography of some recent writings by these observers. In general, actions proposed by these observers include (but are not limited to) the following:", "making a statement (analogous to the one that U.S. leaders have made concerning the Senkaku islands and the U.S.-Japan treaty on mutual cooperation and security) that clarifies what the United States would do under the U.S.-Philippines mutual defense treaty in the event of certain Chinese actions at Scarborough Shoal, Second Thomas Shoal, or elsewhere in the SCS; further increasing and/or accelerating actions to strengthen the capacity of allied and partner countries in the region to maintain maritime domain awareness (MDA) and defend their maritime claims by conducting coast guard and/or navy patrols of claimed areas; further increasing U.S. Navy operations in the region, including sending U.S. Navy ships more frequently to waters within 12 nautical miles of Chinese-occupied sites in the SCS, and conducting FON operations in the SCS jointly with navy ships of U.S. allies; further strengthening U.S. security cooperation with allied and partner countries in the region, and with India, to the point of creating a coalition for balancing China's assertiveness; and taking additional actions to impose costs on China for its actions in its near-seas region, such as inviting Taiwan to participate in the 2018 RIMPAC exercise."], "subsections": []}]}, {"section_title": "Risk of United States Being Drawn into a Crisis or Conflict", "paragraphs": ["As mentioned earlier, some observers remain concerned that maritime territorial disputes in the ECS and SCS could lead to a crisis or conflict between China and a neighboring country such as Japan or the Philippines, and that the United States could be drawn into such a crisis or conflict as a result of obligations the United States has under bilateral security treaties with Japan and the Philippines. Regarding this issue, potential oversight questions for Congress include the following:", "Have U.S. officials taken appropriate and sufficient steps to help reduce the risk of maritime territorial disputes in the SCS and ECS escalating into conflicts? Do the United States and Japan have a common understanding of potential U.S. actions under Article IV of the U.S.-Japan Treaty on Mutual Cooperation and Security (see Appendix B ) in the event of a crisis or conflict over the Senkaku Islands? What steps has the United States taken to ensure that the two countries share a common understanding? Do the United States and the Philippines have a common understanding of how the 1951 U.S.-Philippines mutual defense treaty applies to maritime territories in the SCS that are claimed by both China and the Philippines, and of potential U.S. actions under Article IV of the treaty (see Appendix B ) in the event of a crisis or conflict over the territories? What steps has the United States taken to ensure that the two countries share a common understanding? Aside from public statements, what has the United States communicated to China regarding potential U.S. actions under the two treaties in connection with maritime territorial disputes in the SCS and ECS? Has the United States correctly balanced ambiguity and explicitness in its communications to various parties regarding potential U.S. actions under the two defense treaties? How do the two treaties affect the behavior of Japan, the Philippines, and China in managing their territorial disputes? To what extent, for example, would they help Japan or the Philippines resist potential Chinese attempts to resolve the disputes through intimidation, or, alternatively, encourage risk-taking or brinksmanship behavior by Japan or the Philippines in their dealings with China on the disputes? To what extent do they deter or limit Chinese assertiveness or aggressiveness in their dealings with Japan the Philippines on the disputes? Has the DOD adequately incorporated into its planning crisis and conflict scenarios arising from maritime territorial disputes in the SCS and ECS that fall under the terms of the two treaties?"], "subsections": []}, {"section_title": "Whether United States Should Ratify UNCLOS", "paragraphs": ["Another issue for Congress\u2014particularly the Senate\u2014is the potential impact of China's actions in the SCS and ECS on the question of whether the United States should become a party to the United Nations Convention on the Law of the Sea (UNCLOS). UNCLOS and an associated 1994 agreement relating to implementation of Part XI of the treaty (on deep seabed mining) were transmitted to the Senate on October 6, 1994. In the absence of Senate advice and consent to adherence, the United States is not a party to UNCLOS or the associated 1994 agreement. During the 112 th Congress, the Senate Foreign Relations Committee held four hearings on the question of whether the United States should become a party to the treaty on May 23, June 14 (two hearings), and June 28, 2012.", "Supporters of the United States becoming a party to UNCLOS argue or might argue one or more of the following:", "The treaty's provisions relating to navigational rights, including those in EEZs, reflect the U.S. position on the issue; becoming a party to the treaty would help lock the U.S. perspective into permanent international law. Becoming a party to the treaty would give the United States greater standing for participating in discussions relating to the treaty\u2014a \"seat at the table\"\u2014and thereby improve the U.S. ability to call on China to act in accordance with the treaty's provisions, including those relating to navigational rights, and to defend U.S. interpretations of the treaty's provisions, including those relating to whether coastal states have a right under UNCLOS to regulate foreign military activities in their EEZs. At least some of the ASEAN member states want the United States to become a member of UNCLOS, because they view it as the principal framework for resolving maritime territorial disputes. Relying on customary international law to defend U.S. interests in these issues is not sufficient, because it is not universally accepted and is subject to change over time based on state practice.", "Opponents of the United States becoming a party to UNCLOS argue or might argue one or more of the following:", "China's ability to cite international law (including UNCLOS) in defending its position on whether coastal states have a right to regulate foreign military activities in their EEZs shows that UNCLOS does not adequately protect U.S. interests relating to navigational rights in EEZs; the United States should not help lock this inadequate description of navigational rights into permanent international law by becoming a party to the treaty. The United States becoming a party to the treaty would do little to help resolve maritime territorial disputes in the SCS and ECS, in part because China's maritime territorial claims, such as those depicted in the map of the nine-dash line, predate and go well beyond what is allowed under the treaty and appear rooted in arguments that are outside the treaty. The United States can adequately support the ASEAN countries and Japan in matters relating to maritime territorial disputes in the SCS and ECS in other ways, without becoming a party to the treaty. The United States can continue to defend its positions on navigational rights on the high seas by citing customary international law, by demonstrating those rights with U.S. naval deployments (including those conducted under the FON program), and by having allies and partners defend the U.S. position on the EEZ issue at meetings of UNCLOS parties."], "subsections": []}]}, {"section_title": "Legislative Activity in 2018", "paragraphs": [], "subsections": [{"section_title": "National Defense Authorization Act for Fiscal Year 2019/John S. McCain National Defense Authorization Act for Fiscal Year 2019 (H.R. 5515/S. 2987/P.L. 115-232)", "paragraphs": [], "subsections": [{"section_title": "House Committee Report", "paragraphs": ["In H.R. 5515 as reported by the House Armed Services Committee ( H.Rept. 115-676 of May 15, 2018), Section 1254 states the following:", "SEC. 1254. Modification, redesignation, and extension of Southeast Asia Maritime Security Initiative. ", "(a) Modification and redesignation.\u2014", "(1) IN GENERAL.\u2014Subsection (a) of section 1263 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114\u201392; 129 Stat. 1073; 10 U.S.C. 2282 note), as amended by section 1289 of the National Defense Authorization Act for Fiscal Year 2017 (Public Law 114\u2013328; 130 Stat. 2555), is further amended\u2014", "(A) in paragraph (1), by striking \"South China Sea\" and inserting \"South China Sea and Indian Ocean\"; and", "(B) in paragraph (2), by striking \"the 'Southeast Asia Maritime Security Initiative'\" and inserting \"the 'Indo-Pacific Maritime Security Initiative'\".", "(2) CONFORMING AMENDMENT.\u2014The heading of such section is amended to read as follows:", "\"Sec. 1263. Indo-Pacific Maritime Security Initiative.\".", "(b) Covered countries.\u2014Subsection (e)(2) of such section is amended by adding at the end the following:", "\"(D) India.\".", "(c) Designation of additional countries.\u2014Such section is further amended\u2014", "(1) in subsection (e)(1), by striking \"subsection (f)\" and inserting \"subsection (g)\";", "(2) by redesignating subsections (f), (g), and (h) as subsections (g), (h), and (i), respectively; and", "(3) by inserting after subsection (e) the following:", "\"(f) Inclusion of additional countries.\u2014The Secretary of Defense, with the concurrence of the Secretary of State, is authorized to include additional foreign countries under subsection (b) for purposes of providing assistance and training under subsection (a) and additional foreign countries under subsection (e)(2) for purposes of providing payment of incremental expenses in connection with training described in subsection (a)(1)(B) if, with respect to each such additional foreign country, the Secretary determines and certifies to the appropriate committees of Congress that it is important for increasing maritime security and maritime domain awareness in the Indo-Pacific region.\".", "(d) Extension.\u2014Subsection (i) of such section, as redesignated, is amended by striking \"September 30, 2020\" and inserting \"September 30, 2023\"."], "subsections": []}, {"section_title": "House Floor Action", "paragraphs": ["On May 22, 2018, as part of its consideration of H.R. 5515 , the House agreed to by voice vote H.Amdt. 644 , an en bloc amendment including, inter alia, amendment number 91 as printed in H.Rept. 115-698 of May 21, 2018, providing for consideration of H.R. 5515 . Amendment 91 added Section 1298, which states the following:", "SEC. 1298. Modification to annual report on military and security developments involving the People's Republic of China. ", "Paragraph (22) of section 1202(b) of the National Defense Authorization Act for Fiscal Year 2000 (Public Law 106\u201365; 10 U.S.C. 113 note), as most recently amended by section 1261 of the National Defense Authorization Act for Fiscal Year 2018 (Public Law 115\u201391; 131 Stat. 1688), is further amended by striking \"activities in the South China Sea\" and inserting the following:", "\"\"activities\u2014", "\"(A) in the South China Sea;", "\"(B) in the East China Sea, including in the vicinity of the Senkaku islands; and", "\"(C) in the Indian Ocean region.\"."], "subsections": []}, {"section_title": "Senate", "paragraphs": ["In S. 2987 as reported by the Senate Armed Services Committee ( S.Rept. 115-262 of June 5, 2018), Section 1064 states the following:", "SEC. 1064. United States policy with respect to freedom of navigation and overflight.", "(a) Declaration of policy.\u2014It is the policy of the United States to fly, sail, and operate throughout the oceans, seas, and airspace of the world wherever international law allows.", "(b) Implementation of policy.\u2014In furtherance of the policy set forth in subsection (a), the Secretary of Defense should\u2014", "(1) plan and execute a robust series of routine and regular air and naval presence missions throughout the world and throughout the year, including for critical transportation corridors and key routes for global commerce;", "(2) in addition to the missions executed pursuant to paragraph (1), execute routine and regular air and maritime freedom of navigation operations throughout the year, in accordance with international law, including the use of expanded military options and maneuvers beyond innocent passage; and", "(3) to the maximum extent practicable, execute the missions pursuant to paragraphs (1) and (2) with regional partner countries and allies of the United States.", "Section 1241 of S. 2987 as reported states the following:", "SEC. 1241. Redesignation, expansion, and extension of Southeast Asia Maritime Security Initiative.", "(a) Redesignation as Indo-Pacific Maritime Security Initiative.\u2014", "(1) IN GENERAL.\u2014Subsection (a)(2) of section 1263 of the National Defense Authorization Act for Fiscal Year 2016 (10 U.S.C. 333 note) is amended by striking \"the 'Southeast Asia Maritime Security Initiative'\" and inserting \"the 'Indo-Pacific Maritime Security Initiative'\".", "(2) CONFORMING AMENDMENT.\u2014The heading of such section is amended to read as follows:", "\"SEC. 1263. Indo-Pacific Maritime Security Initiative\".", "(b) Expansion.\u2014", "(1) EXPANSION OF REGION TO RECEIVE ASSISTANCE AND TRAINING.\u2014Subsection (a)(1) of such section is amended by inserting \"and the Indian Ocean\" after \"South China Sea\" in the matter preceding subparagraph (A).", "(2) RECIPIENT COUNTRIES OF ASSISTANCE AND TRAINING GENERALLY.\u2014Subsection (b) of such section is amended\u2014", "(A) in paragraph (2), by striking the comma at the end and inserting a period; and", "(B) by adding at the end the following new paragraphs:", "\"(6) Bangladesh.", "\"(7) Sri Lanka.\".", "(3) COUNTRIES ELIGIBLE FOR PAYMENT OF CERTAIN INCREMENTAL EXPENSES.\u2014Subsection (e)(2) of such section is amended by adding at the end the following new subparagraph:", "\"(D) India.\".", "(c) Extension.\u2014Subsection (h) of such section is amended by striking \"September 30, 2020\" and inserting \"December 31, 2025\".", "Regarding Section 1241, S.Rept. 115-262 states the following:", "Redesignation, expansion, and extension of Southeast AsiaMaritime Security Initiative (sec. 1241)", "The committee recommends a provision that would amend section 1263 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114\u201392) to: redesignate the Southeast Asia Maritime Security Initiative as the Indo-Pacific Maritime Security Initiative; add Bangladesh and Sri Lanka as recipient countries of assistance and training; add India as a covered country eligible for payment of certain incremental expenses; and extend the authority under the section through December 31, 2025.", "The committee continues to strongly support efforts under the Southeast Asia Maritime Security Initiative aimed at enhancing the capabilities of regional partners to more effectively exercise control over their maritime territory and to deter adversaries. The committee is encouraged by the progress that has been made under the initiative, and notes that to date, the Department of Defense has utilized the authority under section 1263 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114\u201392), as amended, to support specified partner capacity-building efforts in the region, to include the provision of training, sustainment support, and participation in multilateral engagements. The committee recognizes that the initiative was designed to support a long-term capacity building effort, which will require increased resources in future years as requirements are established and refined, as programs mature, and as the regional security environment continues to evolve.", "The committee believes the Department's efforts to improve maritime domain awareness and maritime security should be fully integrated into a U.S. strategy for a free and open Indo-Pacific. Therefore, the committee supports redesignating the authority under section 1263 as the Indo-Pacific Maritime Security Initiative, the inclusion of Bangladesh and Sri Lanka as recipient countries, and the addition of India as a covered country to encourage its participation in regional security initiatives of this kind. Furthermore, as a demonstration of the United States' commitment to allies and partners in the region, the committee supports the extension of the Indo-Pacific Maritime Security Initiative through the end of 2025.", "Beyond the Indo-Pacific Maritime Security Initiative, the committee encourages the Department to make use of the full complement of security cooperation authorities available to the Department, particularly those under section 1241 of the National Defense Authorization Act for Fiscal Year 2017 (Public Law 114\u2013328), to enhance the capabilities of foreign security partners in South and Southeast Asia to protect mutual security interests. (Pages 296-297)", "Section 1245 of S. 2987 as reported states the following:", "SEC. 1245. Prohibition on participation of the People's Republic of China in Rim of the Pacific (RIMPAC) naval exercises.", "(a) Sense of Congress.\u2014It is the sense of Congress that\u2014", "(1) the pace and militarization by the Government of the People's Republic of China of land reclamation activities in the South China Sea is destabilizing the security of United States allies and partners and threatening United States core interests;", "(2) these activities of the Government of the People's Republic of China adversarially threaten the maritime security of the United States and our allies and partners;", "(3) no country that acts adversarially should be invited to multilateral exercises; and", "(4) the involvement of the Government of the People's Republic of China in multilateral exercises should undergo reevaluation until such behavior changes.", "(b) Conditions for future participation in RIMPAC.\u2014The Secretary of Defense shall not enable or facilitate the participation of the People's Republic of China in any Rim of the Pacific (RIMPAC) naval exercise unless the Secretary certifies to the congressional defense committees that China has\u2014", "(1) ceased all land reclamation activities in the South China Sea;", "(2) removed all weapons from its land reclamation sites; and", "(3) established a consistent four-year track record of taking actions toward stabilizing the region.", "A June 26, 2018, statement of Administration policy regarding S. 2987 stated the following:", "Prohibition on Participation of the People's Republic of China in Rim of the Pacific (RIMPAC) Naval Exercises. The Administration objects to section 1245 because China's participation in RIMPAC and other military-to-military events may be appropriate or inappropriate in any given year, depending on numerous other factors. Section 1245 would place restrictions on the Secretary of Defense's ability to manage a strategic relationship in the context of competition, limiting DOD's options on China and ability to act in the national security interest of the United States.", "Section 1251 of S. 2987 as reported states the following:", "SEC. 1251. Report on military and coercive activities of the People's Republic of China in South China Sea.", "(a) In general.\u2014Except as provided in subsection (d), immediately after the commencement of any significant reclamation or militarization activity by the People's Republic of China in the South China Sea, including any significant military deployment or operation or infrastructure construction, the Secretary of Defense, in coordination with the Secretary of State, shall submit to the congressional defense committees, and release to the public, a report on the military and coercive activities of China in the South China Sea in connection with such activity.", "(b) Elements of report to public.\u2014Each report on a significant reclamation or militarization activity under subsection (a) shall include a short narrative on, and one or more corresponding images of, such significant reclamation or militarization activity.", "(c) Form.\u2014", "(1) SUBMITTAL TO CONGRESS.\u2014Any report under subsection (a) that is submitted to the congressional defense committees shall be submitted in unclassified form, but may include a classified annex.", "(2) RELEASE TO PUBLIC.\u2014If a report under subsection (a) is released to the public, such report shall be so released in unclassified form.", "(d) Waiver.\u2014", "(1) RELEASE OF REPORT TO PUBLIC.\u2014The Secretary of Defense may waive the requirement in subsection (a) for the release to the public of a report on a significant reclamation or militarization activity if the Secretary determines that the release to the public of a report on such activity under that subsection in the form required by subsection (c)(2) would have an adverse effect on the national security interests of the United States.", "(2) NOTICE TO CONGRESS.\u2014If the Secretary issues a waiver under paragraph (1) with respect to a report on an activity, not later than 48 hours after the Secretary issues such waiver, the Secretary shall submit to the congressional defense committees written notice of, and justification for, such waiver.", "Regarding Section 1251, S.Rept. 115-262 states the following:", "Report on military and coercive activities of the People's Republic of China in the South China Sea (sec. 1251)", "The committee recommends a provision that would require the Secretary of Defense, in coordination with the Secretary of State, to submit to the congressional defense committees and release to the public, a report on the military and coercive activities of China in the South China Sea in connection with such activity immediately after the commencement of any significant reclamation or militarization activity by the People's Republic of China in the South China Sea, including any significant military deployment or operation or infrastructure construction.", "The committee is concerned that sufficient information has not been made publicly available in a timely fashion regarding China's reclamation and militarization activities of China in the South China Sea. Therefore, the committee urges the Secretary of Defense to determine that the public interest in selective declassification of China's activities in the South China Sea outweighs the potential damage from disclosure. The Secretary should consider mandating that the directors of National Geospatial-Intelligence Agency and the Defense Intelligence Agency provide the Bureau of Intelligence and Research (INR) at the State Department with declassified aircraft-generated imagery and supporting analysis describing Chinese activities of concern. The committee also urges that the State Department brief and distribute the reports to the media and throughout Southeast Asia. (Page 300)"], "subsections": []}, {"section_title": "Conference", "paragraphs": ["In the conference report ( H.Rept. 115-874 of July 25, 2018) on H.R. 5515 / P.L. 115-232 of August 13, 2018, Section 1086 states the following:", "SEC. 1086. UNITED STATES POLICY WITH RESPECT TO FREEDOM OF NAVIGATION AND OVERFLIGHT.", "(a) DECLARATION OF POLICY.\u2014It is the policy of the United States to fly, sail, and operate throughout the oceans, seas, and airspace of the world wherever international law allows.", "(b) IMPLEMENTATION OF POLICY.\u2014In furtherance of the policy set forth in subsection (a), the Secretary of Defense should\u2014", "(1) plan and execute a robust series of routine and regular air and naval presence missions throughout the world and throughout the year, including for critical transportation corridors and key routes for global commerce;", "(2) in addition to the missions executed pursuant to paragraph (1), execute routine and regular air and maritime freedom of navigation operations throughout the year, in accordance with international law, including, but not limited to, maneuvers beyond innocent passage; and", "(3) to the maximum extent practicable, execute the missions pursuant to paragraphs (1) and (2) with regional partner countries and allies of the United States.", "Section 1252 of H.R. 5515 states the following:", "SEC. 1252. REDESIGNATION, EXPANSION, AND EXTENSION OF SOUTHEAST ASIA MARITIME SECURITY INITIATIVE.", "(a) REDESIGNATION AS INDO-PACIFIC MARITIME SECURITY INITIATIVE.\u2014", "(1) IN GENERAL.\u2014Subsection (a)(2) of section 1263 of the National Defense Authorization Act for Fiscal Year 2016 (10 U.S.C. 333 note) is amended by striking ''the 'Southeast Asia Maritime Security Initiative' '' and inserting ''the 'Indo-Pacific Maritime Security Initiative' ''.", "(2) CONFORMING AMENDMENT.\u2014The heading of such section is amended to read as follows:", "''SEC. 1263. INDO-PACIFIC MARITIME SECURITY INITIATIVE.''.", "(b) EXPANSION.\u2014", "(1) EXPANSION OF REGION TO RECEIVE ASSISTANCE AND TRAINING.\u2014Subsection (a)(1) of such section is amended by inserting ''and the Indian Ocean'' after ''South China Sea'' in the matter preceding subparagraph (A).", "(2) RECIPIENT COUNTRIES OF ASSISTANCE AND TRAINING GENERALLY.\u2014Subsection (b) of such section is amended\u2014", "(A) in paragraph (2), by striking the comma at the end and inserting a period; and", "(B) by adding at the end the following new paragraphs:", "''(6) Bangladesh.", "''(7) Sri Lanka.''.", "(3) COUNTRIES ELIGIBLE FOR PAYMENT OF CERTAIN INCREMENTAL EXPENSES.\u2014Subsection (e)(2) of such section is amended by adding at the end the following new subparagraph:", "''(D) India.''.", "(c) EXTENSION.\u2014Subsection (h) of such section is amended by striking ''September 30, 2020'' and inserting ''December 31, 2025''.", "Section 1259 of H.R. 5515 states the following:", "SEC. 1259. PROHIBITION ON PARTICIPATION OF THE PEOPLE'S REPUBLIC OF CHINA IN RIM OF THE PACIFIC (RIMPAC) NAVAL EXERCISES.", "(a) CONDITIONS FOR FUTURE PARTICIPATION IN RIMPAC.\u2014", "(1) IN GENERAL.\u2014The Secretary of Defense shall not enable or facilitate the participation of the People's Republic of China in any Rim of the Pacific (RIMPAC) naval exercise unless the Secretary certifies to the congressional defense committees that China has\u2014", "(A) ceased all land reclamation activities in the South China Sea;", "(B) removed all weapons from its land reclamation sites; and", "(C) established a consistent four-year track record of taking actions toward stabilizing the region.", "(2) FORM.\u2014The certification under paragraph (1) shall be in unclassified form but may contain a classified annex as necessary.", "(b) NATIONAL SECURITY WAIVER.\u2014", "(1) IN GENERAL.\u2014The Secretary of Defense may waive the certification requirement under subsection (a) if the Secretary determines the waiver is in the national security interest of the United States and submits to the congressional defense committees a detailed justification for the waiver.", "(2) FORM.\u2014The justification required under paragraph (1) shall be in unclassified form but may contain a classified annex as necessary.", "Section 1262 of H.R. 5515 states the following:", "SEC. 1262. REPORT ON MILITARY AND COERCIVE ACTIVITIES OF THE PEOPLE'S REPUBLIC OF CHINA IN SOUTH CHINA SEA.", "(a) IN GENERAL.\u2014Except as provided in subsection (d), immediately after the commencement of any significant reclamation, assertion of an excessive territorial claim, or militarization activity by the People's Republic of China in the South China Sea, including any significant military deployment or operation or infrastructure construction, the Secretary of Defense, in coordination with the Secretary of State, shall submit to the appropriate congressional committees, and release to the public, a report on the military and coercive activities of China in the South China Sea in connection with such activity.", "(b) ELEMENTS OF REPORT TO PUBLIC.\u2014Each report on the commencement of a significant reclamation, an assertion of an excessive territorial claim, or a militarization activity under subsection (a) shall include a short narrative on, and one or more corresponding images of, such commencement of a significant reclamation, assertion of an excessive territorial claim, or militarization activity.", "(c) FORM.\u2014", "(1) SUBMISSION TO CONGRESS.\u2014Any report under subsection (a) that is submitted to the appropriate congressional committees shall be submitted in unclassified form, but may include a classified annex.", "(2) RELEASE TO PUBLIC.\u2014If a report under subsection (a) is released to the public, such report shall be so released in unclassified form.", "(d) WAIVER.\u2014", "(1) RELEASE OF REPORT TO PUBLIC.\u2014The Secretary of Defense may waive the requirement in subsection (a) for the release to the public of a report on the commencement of any significant reclamation, an assertion of an excessive territorial claim, or a militarization activity by the People's Republic of China in the South China Sea if the Secretary determines that the release to the public of a report on such activity under that subsection in the form required by subsection (c)(2) would have an adverse effect on the national security interests of the United States.", "(2) NOTICE TO CONGRESS.\u2014If the Secretary issues a waiver under paragraph (1) with respect to a report on an activity, not later than 48 hours after the Secretary issues such waiver, the Secretary shall submit to the appropriate congressional committees written notice of, and justification for, such waiver.", "(e) APPROPRIATE CONGRESSIONAL COMMITTEES DEFINED.\u2014In this section, the term ''appropriate congressional committees'' means\u2014", "(1) the congressional defense committees; and", "(2) the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives.", "Regarding Section 1262, H.Rept. 115-874 states the following:", "Report on military and coercive activities of the People's Republic of China in South China Sea (sec. 1262)", "The House bill contained a provision (sec. 1261) that would require Secretary of Defense, in consultation with the Director of National Intelligence and the Secretary of State, to submit a report to appropriate congressional committees on a quarterly basis describing China's activities in the Indo-Pacific region, and to disseminate the report to regional allies and partners and provide public notification, as appropriate. The provision would require that the dissemination and availability of the report and public notification be made in a manner consistent with national security and the protection of classified national security information.", "The Senate amendment contained a similar provision (sec. 1251) that would require the Secretary of Defense, in coordination with the Secretary of State, to submit to the congressional defense committees and release to the public, a report on the military and coercive activities of China in the South China Sea in connection with such activity immediately after the commencement of any significant reclamation or militarization activity by the People's Republic of China in the South China Sea, including any significant military deployment or operation or infrastructure construction.", "The House recedes with an amendment that would clarify that the required report shall be submitted to the congressional defense committees immediately after the commencement of any significant reclamation, assertion of an excessive territorial claim, or military activity by the People's Republic of China in the South China Sea.", "The conferees are concerned that sufficient information has not been made publicly available in a timely fashion regarding China's reclamation and militarization activities in the South China Sea. Moreover, the conferees recognize that China has engaged in provocative military activities elsewhere throughout the Indo-Pacific Region, including the East China Sea, the Taiwan Strait, and the Indian Ocean. The conferees urge the Secretary of Defense to give full consideration to the strategic and public interest in selective declassification of China's activities in the South China Sea and elsewhere in the Indo-Pacific region. (Pages 993-994)", "Section 1288 of H.R. 5515 states the following:", "SEC. 1288. MODIFICATION OF FREEDOM OF NAVIGATION REPORTING REQUIREMENTS.", "Subsection (a) of section 1275 of the National Defense Authorization Act for Fiscal Year 2017 (Public Law 114\u2013328; 130 Stat. 2540), as amended by section 1262(a)(1) of the National Defense Authorization Act for Fiscal Year 2018 (Public Law 115\u201391; 131 Stat. 1689), is further amended by striking ''the Committees on Armed Services of the Senate and the House of Representatives'' and inserting ''the Committee on Armed Services and the Committee on Foreign Relations of the Senate and the Committee on Armed Services and the Committee on Foreign Affairs of the House of Representatives''.", "Appendix A. Strategic Context from U.S. Perspective", "This appendix presents a brief discussion of some elements of the strategic context from a U.S. perspective in which the issues discussed in this report may be considered. There is also a broader context of U.S.-China relations and U.S. foreign policy toward the Indo-Pacific that is covered in other CRS reports.", "Shift in International Security Environment", "World events have led some observers, starting in late 2013, to conclude that the international security environment has undergone a shift from the familiar post-Cold War era of the past 20 to 25 years, also sometimes known as the unipolar moment (with the United States as the unipolar power), to a new and different situation that features, among other things, renewed great power competition with China and Russia and challenges by these two countries and others to elements of the U.S.-led international order that has operated since World War II. China's actions in the SCS and ECS can be viewed as one reflection of that shift.", "Uncertainty Regarding Future U.S. Role in World", "The overall U.S. role in the world since the end of World War II in 1945 (i.e., over the past 70 years) is generally described as one of global leadership and significant engagement in international affairs. A key aim of that role has been to promote and defend the open international order that the United States, with the support of its allies, created in the years after World War II. In addition to promoting and defending the open international order, the overall U.S. role is generally described as having been one of promoting freedom, democracy, and human rights, while criticizing and resisting authoritarianism where possible, and opposing the emergence of regional hegemons in Eurasia or a spheres-of-influence world.", "Certain statements and actions from the Trump Administration have led to uncertainty about the Administration's intentions regarding the future U.S. role in the world. Based on those statements and actions, some observers have speculated that the Trump Administration may want to change the U.S. role in one or more ways. A change in the overall U.S. role could have profound implications for U.S. foreign policy, including U.S. policy regarding maritime territorial and EEZ disputes involving China.", "U.S. Grand Strategy", "Discussion of the above-mentioned shift in the international security environment has led to a renewed emphasis in discussions of U.S. security and foreign policy on grand strategy and geopolitics. From a U.S. perspective, grand strategy can be understood as strategy considered at a global or interregional level, as opposed to strategies for specific countries, regions, or issues. Geopolitics refers to the influence on international relations and strategy of basic world geographic features such as the size and location of continents, oceans, and individual countries. ", "From a U.S. perspective on grand strategy and geopolitics, it can be noted that most of the world's people, resources, and economic activity are located not in the Western Hemisphere, but in the other hemisphere, particularly Eurasia. In response to this basic feature of world geography, U.S. policymakers for the past several decades have chosen to pursue, as a key element of U.S. grand strategy, a goal of preventing the emergence of a regional hegemon in one part of Eurasia or another, on the grounds that such a hegemon could represent a concentration of power strong enough to threaten core U.S. interests by, for example, denying the United States access to some of the other hemisphere's resources and economic activity. Although U.S. policymakers have not often stated this key national strategic goal explicitly in public, U.S. military (and diplomatic) operations in recent decades\u2014both wartime operations and day-to-day operations\u2014can be viewed as having been carried out in no small part in support of this key goal.", "Focus on Great Power Competition with China and Russia", "The Trump Administration's December 2017 National Security Strategy (NSS) and the 11-page unclassified summary of its January 2018 National Defense Strategy (NDS) reorient U.S. national security strategy and, within that, U.S. defense strategy, toward an explicit primary focus on great power competition with China and Russia and on countering Chinese and Russian military capabilities. The new U.S. strategy orientation set forth in the 2017 NSS and 2018 NDS is sometimes referred to a \"2+3\" strategy, meaning a strategy for countering two primary challenges (China and Russia) and three additional challenges (North Korea, Iran, and terrorist groups).", "Concept of a Free and Open Indo-Pacific (FOIP)", "In addition to the 2017 NSS and 2018 NDS, the Trump Administration has highlighted the concept of a free and open Indo-Pacific (FOIP), with the term Indo-Pacific referring to the Indian Ocean, the Pacific Ocean, and the countries (particularly those in Eurasia) bordering on those two oceans. The concept, which is still being fleshed out by the Trump Administration, appears to be a general U.S foreign policy and national security construct for the region, but observers view it as one that includes a military component.", "Challenge to U.S. Sea Control and U.S. Position in Western Pacific", "Observers of Chinese and U.S. military forces view China's improving naval capabilities as posing a potential challenge in the Western Pacific to the U.S. Navy's ability to achieve and maintain control of blue-water ocean areas in wartime\u2014the first such challenge the U.S. Navy has faced since the end of the Cold War. More broadly, these observers view China's naval capabilities as a key element of an emerging broader Chinese military challenge to the long-standing status of the United States as the leading military power in the Western Pacific.", "Regional U.S. Allies and Partners", "The United States has certain security-related policies pertaining to Taiwan under the Taiwan Relations Act ( H.R. 2479 / P.L. 96-8 of April 10, 1979). The United States has bilateral security treaties with Japan, South Korea, and the Philippines, and an additional security treaty with Australia and New Zealand. In addition to U.S. treaty allies, certain other countries in the Western Pacific can be viewed as current or emerging U.S. security partners.", "Appendix B. U.S. Treaties with Japan and Philippines", "This appendix presents brief background information on the U.S. security treaties with Japan and the Philippines.", "U.S.-Japan Treaty on Mutual Cooperation and Security", "The 1960 U.S.-Japan treaty on mutual cooperation and security states in Article V that", "Each Party recognizes that an armed attack against either Party in the territories under the administration of Japan would be dangerous to its own peace and safety and declares that it would act to meet the common danger in accordance with its constitutional provisions and processes.", "The United States has reaffirmed on a number of occasions over the years that since the Senkaku Islands are under the administration of Japan, they are included in the territories referred to in Article V of the treaty, and that the United States \"will honor all of our treaty commitments to our treaty partners.\" (At the same time, the United States, noting the difference between administration and sovereignty, has noted that such affirmations do not prejudice the U.S. approach of taking no position regarding the outcome of the dispute between China, Taiwan, and Japan regarding who has sovereignty over the islands.) Some observers, while acknowledging the U.S. affirmations, have raised questions regarding the potential scope of actions that the United States might take under Article V.", "U.S.-Philippines Mutual Defense Treaty", "The 1951 U.S.-Philippines mutual defense treaty states in Article IV that", "Each Party recognizes that an armed attack in the Pacific Area on either of the Parties would be dangerous to its own peace and safety and declares that it would act to meet the common dangers in accordance with its constitutional processes.", "Article V states that", "For the purpose of Article IV, an armed attack on either of the Parties is deemed to include an armed attack on the metropolitan territory of either of the Parties, or on the island territories under its jurisdiction in the Pacific or on its armed forces, public vessels or aircraft in the Pacific.", "The United States has reaffirmed on a number of occasions over the years its obligations under the U.S.-Philippines mutual defense treaty. On May 9, 2012, Filipino Foreign Affairs Secretary Albert F. del Rosario issued a statement providing the Philippine perspective regarding the treaty's application to territorial disputes in the SCS. U.S. officials have made their own statements regarding the treaty's application to territorial disputes in the SCS.", "Appendix C. Treaties and Agreements Related to the Maritime Disputes", "This appendix briefly reviews some international treaties and agreements that bear on the issues discussed in this report.", "UN Convention on Law of the Sea (UNCLOS)", "The United Nations Convention on the Law of the Sea (UNCLOS) establishes a treaty regime to govern activities on, over, and under the world's oceans. UNCLOS was adopted by Third United Nations Conference on the Law of the Sea in December 1982, and entered into force in November 1994. The treaty established EEZs as a feature of international law, and contains multiple provisions relating to territorial waters and EEZs. As of May 10, 2018, 168 nations were party to the treaty, including China and most other countries bordering on the SCS and ECS (the exceptions being North Korea and Taiwan).", "The treaty and an associated 1994 agreement relating to implementation of Part XI of the treaty (on deep seabed mining) were transmitted to the Senate on October 6, 1994. In the absence of Senate advice and consent to adherence, the United States is not a party to the convention and the associated 1994 agreement. A March 10, 1983, statement on U.S. ocean policy by President Ronald Reagan states that UNCLOS", "contains provisions with respect to traditional uses of the oceans which generally confirm existing maritime law and practice and fairly balance the interests of all states.", "Today I am announcing three decisions to promote and protect the oceans interests of the United States in a manner consistent with those fair and balanced results in the Convention and international law.", "First, the United States is prepared to accept and act in accordance with the balance of interests relating to traditional uses of the oceans\u2014such as navigation and overflight. In this respect, the United States will recognize the rights of other states in the waters off their coasts, as reflected in the Convention, so long as the rights and freedoms of the United States and others under international law are recognized by such coastal states.", "Second, the United States will exercise and assert its navigation and overflight rights and freedoms on a worldwide basis in a manner that is consistent with the balance of interests reflected in the convention. The United States will not, however, acquiesce in unilateral acts of other states designed to restrict the rights and freedoms of the international community in navigation and overflight and other related high seas uses.", "Third, I am proclaiming today an Exclusive Economic Zone in which the United States will exercise sovereign rights in living and nonliving resources within 200 nautical miles of its coast. This will provide United States jurisdiction for mineral resources out to 200 nautical miles that are not on the continental shelf.", "UNCLOS builds on four 1958 law of the sea conventions to which the United States is a party: the Convention on the Territorial Sea and the Contiguous Zone, the Convention on the High Seas, the Convention on the Continental Shelf, and the Convention on Fishing and Conservation of the Living Resources of the High Seas.", "1972 Convention on Preventing Collisions at Sea (COLREGs)", "China and the United States, as well as more than 150 other countries (including all those bordering on the South East and South China Seas, but not Taiwan), are parties to an October 1972 multilateral convention on international regulations for preventing collisions at sea, commonly known as the collision regulations (COLREGs) or the \"rules of the road.\" Although commonly referred to as a set of rules or regulations, this multilateral convention is a binding treaty. The convention applies \"to all vessels upon the high seas and in all waters connected therewith navigable by seagoing vessels.\" It thus applies to military vessels, paramilitary and law enforcement (i.e., coast guard) vessels, maritime militia vessels, and fishing boats, among other vessels.", "In a February 18, 2014, letter to Senator Marco Rubio concerning the December 5, 2013, incident involving the Cowpens , the State Department stated the following:", "In order to minimize the potential for an accident or incident at sea, it is important that the United States and China share a common understanding of the rules for operational air or maritime interactions. From the U.S. perspective, an existing body of international rules and guidelines\u2014including the 1972 International Regulations for Preventing Collisions at Sea (COLREGs)\u2014are sufficient to ensure the safety of navigation between U.S. forces and the force of other countries, including China. We will continue to make clear to the Chinese that these existing rules, including the COLREGs, should form the basis for our common understanding of air and maritime behavior, and we will encourage China to incorporate these rules into its incident-management tools.", "Likewise, we will continue to urge China to agree to adopt bilateral crisis management tools with Japan and to rapidly conclude negotiations with ASEAN on a robust and meaningful Code of Conduct in the South China in order to avoid incidents and to manage them when they arise. We will continue to stress the importance of these issues in our regular interactions with Chinese officials.", "In the 2014 edition of its annual report on military and security developments involving China, the DOD states the following:", "On December 5, 2013, a PLA Navy vessel and a U.S. Navy vessel operating in the South China Sea came into close proximity. At the time of the incident, USS COWPENS (CG 63) was operating approximately 32 nautical miles southeast of Hainan Island. In that location, the U.S. Navy vessel was conducting lawful military activities beyond the territorial sea of any coastal State, consistent with customary international law as reflected in the Law of the Sea Convention. Two PLA Navy vessels approached USS COWPENS. During this interaction, one of the PLA Navy vessels altered course and crossed directly in front of the bow of USS COWPENS. This maneuver by the PLA Navy vessel forced USS COWPENS to come to full stop to avoid collision, while the PLA Navy vessel passed less than 100 yards ahead. The PLA Navy vessel's action was inconsistent with internationally recognized rules concerning professional maritime behavior (i.e., the Convention of International Regulations for Preventing Collisions at Sea), to which China is a party.", "2014 Code for Unplanned Encounters at Sea (CUES)", "On April 22, 2014, representatives of 21 Pacific-region navies (including China, Japan, and the United States), meeting in Qingdao, China, at the 14 th Western Pacific Naval Symposium (WPNS), unanimously agreed to a Code for Unplanned Encounters at Sea (CUES). CUES, a nonbinding agreement, establishes a standardized protocol of safety procedures, basic communications, and basic maneuvering instructions for naval ships and aircraft during unplanned encounters at sea, with the aim of reducing the risk of incidents arising from such encounters. The CUES agreement in effect supplements the 1972 COLREGs Convention (see previous section); it does not cancel or lessen commitments that countries have as parties to the COLREGS Convention.", "Two observers stated that \"the [CUES] resolution is non-binding; only regulates communication in 'unplanned encounters,' not behavior; fails to address incidents in territorial waters; and does not apply to fishing and maritime constabulary vessels [i.e., coast guard ships and other maritime law enforcement ships], which are responsible for the majority of Chinese harassment operations.\" ", "DOD stated in 2015 that", "Going forward, the Department is also exploring options to expand the use of CUES to include regional law enforcement vessels and Coast Guards. Given the growing use of maritime law enforcement vessels to enforce disputed maritime claims, expansion of CUES to MLE [maritime law enforcement] vessels would be an important step in reducing the risk of unintentional conflict.", "U.S. Navy officials have stated that the CUES agreement is generally working well, and that the United States (as noted in the passage above) is interested in expanding the agreement to cover coast guard ships. Officials from Singapore and Malaysia reportedly have expressed support for the idea. An Obama Administration fact sheet about Chinese President Xi Jinping's state visit to the United States on September 24-25, 2015, stated the following:", "The U.S. Coast Guard and the China Coast Guard have committed to pursue an arrangement whose intended purpose is equivalent to the Rules of Behavior Confidence Building Measure annex on surface-to-surface encounters in the November 2014 Memorandum of Understanding between the United States Department of Defense and the People's Republic of China Ministry of National Defense.", "A November 3, 2018, press report published following an incident in the SCS between a U.S. Navy destroyer and a Chinese destroyer stated the following:", "The U.S. Navy's chief of naval operations has called on China to return to a previously agreed-upon code of conduct for at-sea encounters between the ships of their respective navies, stressing the need to avoid miscalculations.", "During a Nov. 1 teleconference with reporters based in the Asia-Pacific region, Adm. John Richardson said he wants the People's Liberation Army Navy to \"return to a consistent adherence to the agreed-to code that would again minimize the chance for a miscalculation that could possibly lead to a local incident and potential escalation.\"", "The CNO cited a case in early October when the U.S. Navy's guided-missile destroyer Decatur reported that a Chinese Type 052C destroyer came within 45 yards of the Decatur as it conducted a freedom-of-navigation operation in the South China Sea.", "However, he added that the \"vast majority\" of encounters with Chinese warships in the South China Sea \"are conducted in accordance with the Code of Unplanned Encounters at Sea and done in a safe and professional manner.\" The code is an agreement reached by 21 Pacific nations in 2014 to reduce the chance of an incident at sea between the agreement's signatories.", "2014 U.S.-China MOU on Air and Maritime Encounters", "In November 2014, the U.S. DOD and China's Ministry of National Defense signed a Memorandum of Understanding (MOU) regarding rules of behavior for safety of air and maritime encounters. The MOU makes reference to UNCLOS, the 1972 COLREGs convention, the Conventional on International Civil Aviation (commonly known as the Chicago Convention), the Agreement on Establishing a Consultation Mechanism to Strengthen Military Maritime Safety (MMCA), and CUES. The MOU as signed in November 2014 included an annex on rules of behavior for safety of surface-to-surface encounters. An additional annex on rules of behavior for safety of air-to-air encounters was signed on September 15 and 18, 2015.", "An October 20, 2018, press report states the following:", "Eighteen nations including the U.S. and China agreed in principle Saturday [October 20] to sign up to guidelines governing potentially dangerous encounters by military aircraft, a step toward stabilizing flashpoints but one that leaves enough wiggle room to ignore the new standards when a country wants.", "The guidelines essentially broaden a similar agreement reached by the U.S. and China three years ago and are an attempt to mitigate against incidents and collisions in some of the world's most tense areas\u2026.", "The in-principle agreement, which will be put forward for formal adoption by the group of 18 nations next year, took place at an annual meeting of defense ministers under the aegis of the 10-country Association of Southeast Asian Nations, hosted by Singapore. Asean nations formally adopted the new guidelines themselves Friday.", "\"The guidelines are very useful in setting norms,\" Singapore's defense minister Ng Eng Hen told reporters after the meeting. \"All the 18 countries agreed strong in-principle support for the guidelines.\"\u2026", "The aerial-encounters framework agreed to Saturday includes language that prohibits fast or aggressive approaches in the air and lays out guidelines on clear communications including suggestions to \"refrain from the use of uncivil language or unfriendly physical gestures.\"", "Signatories to the agreement, which is voluntary and not legally binding, would agree to avoid unprofessional encounters and reckless maneuvers\u2026.", "The guidelines fall short on enforcement and geographic specifics, but they are \"better than nothing at all,\" said Evan Laksmana, senior researcher with the Center for Strategic and International Studies in Jakarta. \"Confidence-building surrounding military crises or encounters can hardly move forward without some broadly agreed-upon rules of the game,\" he said.", "Negotiations on SCS Code of Conduct (COC)", "In 2002, China and the 10 member states of ASEAN signed a nonbinding Declaration on the Conduct (DOC) of Parties in the South China Sea in which the parties, among other things,", "... reaffirm their respect for and commitment to the freedom of navigation in and overflight above the South China Sea as provided for by the universally recognized principles of international law, including the 1982 UN Convention on the Law of the Sea....", "... undertake to resolve their territorial and jurisdictional disputes by peaceful means, without resorting to the threat or use of force, through friendly consultations and negotiations by sovereign states directly concerned, in accordance with universally recognized principles of international law, including the 1982 UN Convention on the Law of the Sea....", "... undertake to exercise self-restraint in the conduct of activities that would complicate or escalate disputes and affect peace and stability including, among others, refraining from action of inhabiting on the presently uninhabited islands, reefs, shoals, cays, and other features and to handle their differences in a constructive manner....", "...reaffirm that the adoption of a [follow-on] code of conduct in the South China Sea would further promote peace and stability in the region and agree to work, on the basis of consensus, towards the eventual attainment of this objective....", "In July 2011, China and ASEAN adopted a preliminary set of principles for implementing the DOC.", "U.S. officials since 2010 have encouraged ASEAN and China to develop the follow-on binding Code of Conduct (COC) mentioned in the final quoted paragraph above. China and ASEAN have conducted negotiations on the follow-on COC, but China has not yet agreed with the ASEAN member states on a final text.", "On March 8, 2017, China announced that the first draft of a framework for the COC had been completed, and that \"China and ASEAN countries feel satisfied with this.\" On May 18 and 19, 2017, it was reported that the China and the ASEAN countries had agreed on the framework. An article from a Chinese news outlet stated the following:", "All countries involved have agreed not to release the framework document, but to maintain it as an internal document at this time since the consultation will continue and they do not want any external interference, [Vice-Foreign Minister] Liu [Zhenmin] said.", "\"Against the backdrop of economic globalization, China and ASEAN countries should continue making our regional rules to guide our own actions and protect our common interests,\" Liu said.", "A May 18, 2017, press report stated that Liu Zhemin \"called on others to stay out [of the negotiations], apparently a coded message to the United States. 'We hope that our consultations on the code are not subject to any outside interference,' Liu said.\"", "An August 3, 2017, press report stated the following:", "Southeast Asian ministers meeting this week are set to avoid tackling the subject of Beijing's arming and building of manmade South China Sea islands, preparing to endorse a framework for a code of conduct that is neither binding nor enforceable.", "The Association of South East Asian Nations (ASEAN) has omitted references to China's most controversial activities in its joint communique, a draft reviewed by Reuters shows.", "In addition, a leaked blueprint for establishing an ASEAN-China code of maritime conduct does not call for it to be legally binding, or seek adherence to the United Nations Convention on the Law of the Sea (UNCLOS)....", "Analysts and some ASEAN diplomats worry that China's sudden support for negotiating a code of conduct is a ploy to buy time to further boost its military capability....", "The agreed two-page framework is broad and leaves wide scope for disagreement, urging a commitment to the \"purposes and principles\" of UNCLOS, for example, rather than adherence.", "The framework papers over the big differences between ASEAN nations and China, said Patrick Cronin of the Center for a New American Security.", "\"Optimists will see this non-binding agreement as a small step forward, allowing habits of cooperation to develop, despite differences,\" he said.", "\"Pessimists will see this as a gambit favorable to a China determined to make the majority of the South China Sea its domestic lake.\"", "An August 6, 2017, press report stated the following:", "Southeast Asian nations agreed with China on Sunday [August 6] to endorse a framework for a maritime code of conduct that would govern behavior in disputed waters of the South China Sea, a small step forward in a negotiation that has lasted well over a decade.", "Though not the long-discussed code itself, the framework sets out parameters for discussion of an agreement intended to bring predictability to a potential flashpoint as China increasingly asserts its military presence over the area in the face of rival claims.", "The 10 countries of the Association of Southeast Asian Nations will meet with China at the end of August to discuss legalities for negotiations on the code of conduct, with formal talks beginning soon after, Philippines department of foreign affairs spokesman Robespierre Bolivar said Sunday.", "The endorsement of the framework, which was tentatively agreed to in May, came during a bilateral meeting between China and Asean on the sidelines of a series of security-oriented meetings that will conclude Tuesday.", "The unsticking of the framework after years of obstruction is widely seen as a concession by China, which has opposed any legally binding code on maritime engagement, stepped up naval patrols and built artificial islands to enforce its claims, equipping them with military weapons.", "Beijing's move to allow discussion on the code of conduct follows a resetting of ties with the Philippines under President Rodrigo Duterte, who in October\u2014just four months after taking office\u2014visited Beijing and declared a new friendship between the two countries.", "An August 8, 2017, blog post about the framework states the following:", "In Manila on 6 August 2017, the foreign ministers of ASEAN and China endorsed the framework for the Code of Conduct for the South China Sea (COC). ", "While the framework is a step forward in the conflict management process for the South China Sea, it is short on details and contains many of the same principles and provisions contained in the 2002 ASEAN-China Declaration on the Conduct of Parties in the South China Sea (DOC) which has yet to be even partially implemented.", "The text includes a new reference to the prevention and management of incidents, as well as a seemingly stronger commitment to maritime security and freedom of navigation. However, the phrase \"legally binding\" is absent, as are the geographical scope of the agreement and enforcement and arbitration mechanisms.", "The framework will form the basis for further negotiations on the COC. Those discussions are likely to be lengthy and frustrating for those ASEAN members who had hoped to see a legally binding, comprehensive and effective COC.", "Some observers have argued that China has been dragging out the negotiations on the COC for years as part of a \"talk and take strategy,\" meaning a strategy in which China engages in (or draws out) negotiations while taking actions to gain control of contested areas. A May 25, 2017, news report states the following:", "To call negotiations between China and the ten-country Association of South-East Asian Nations (ASEAN) over rival claims in the South China Sea \"drawn out\" would be a gross understatement. At the centre of the matter is an unsquareable circle: the competing claims of China and several South-East Asian countries. Nobody wants to go to war; nobody wants to be accused of backing down.", "Still, at a meeting of senior Chinese and ASEAN officials on May 18 th , something happened: the two sides agreed on a \"framework\" for a code of conduct. An official from Singapore (which currently co-ordinates ASEAN-China relations) called the agreement a sign of \"steady progress\"....", "ASEAN members called for a legally binding code of conduct as far back as 1996....", "Since then, code-of-conduct negotiations have proceeded glacially.... Last July, after China received an unfavourable ruling on its maritime claims in a case brought by the Philippines to a tribunal in The Hague, China agreed to expedite the talks....", "The draft framework will be presented to ASEAN and Chinese foreign ministers at a conference in August. This will then form the basis for the thorny negotiations to follow. The text has not (yet) been leaked. But its most salient feature may be what it appears to lack: any hint of enforcement mechanisms or consequences for violations. China has long rejected a legally binding agreement\u2014or indeed any arrangement that could limit its actions in the South China Sea.", "The result, explains Ian Storey, of the ISEAS-Yusof Ishak Institute, a think-tank in Singapore, is a framework \"that makes China look co-operative\u2026without having to do anything that might constrain its freedom of action\". ASEAN, meanwhile, gets the appearance of progress. \"The ASEAN secretariat is a bureaucracy, and bureaucrats like process,\" explains Mr Storey.", "A July 13, 2018, blog post states the following:", "The COC has become a \"holy grail,\" highly desired but unattainable. A major concern should be that this holy grail could turn into a tool for China to legitimize its actions in the South China Sea by engaging in the process while subverting its spirit. To this end, the challenges to the COC process are likely to be:", "China will use the COC talks to delay, exploit, and divert focus from any ASEAN consensus on the South China Sea;", "China will seek to include unhelpful and imprecise language in the COC which it could then use to justify its actions;", "China will nonetheless claim the COC as a diplomatic success and will use it as cover to avoid criticism while still pursuing its unilateral strategy to control the South China Sea\u2026.", "If the COC process continues on its current trajectory, and China succeeds in filling the document with vague articles that would have little impact on its behavior, it would effectively be abusing the rules-based order to its own benefit. Instead of protecting against unilateral actions in the South China Sea, the rules-based order in the form of the COC could assist and justify China's expansion and ultimately its sole control of the South China Sea. Other regional actors need to recognize these traps of concluding a counter-productive COC, and resist the urge to reach an agreement just to be able to say they made progress. Instead, they should insist on negotiating the terms and conditions of a real COC, one that would establish effective rules-based dispute management mechanisms, not one that would by-pass them for the sake of an easy \"win.\"", "An August 2, 2018, press report states the following:", "After more than a decade of talks, a bloc of Southeast Asian nations and China have agreed on a draft code of conduct that will lay the foundation for negotiations over the disputed South China Sea.", "Observers said the agreement showed that China and the Association of Southeast Asian Nations (Asean) could make progress through talks despite rising regional tensions, but they also warned that there was still a long way to go until a final deal.", "The agreement on the \"Single Draft COC Negotiating Text\" was announced at a meeting of Asean foreign ministers in Singapore on Thursday [August 2], after being nailed down at a China-Asean meeting in the central Chinese city of Changsha in June.", "An August 9, 2018, press report stated the following:", "Talks on completing a code of conduct for the disputed South China Sea will be long and complex and it would be unrealistic to set a timetable, state media on Thursday [August 9] cited a senior Chinese diplomat as saying\u2026.", "In an interview with China Newsweek magazine, Yi Xianliang, Director General of the Chinese Foreign Ministry's Department of Boundary and Ocean Affairs, said the talks were continuing.", "Many of the topics were complex and sensitive and there were many different points of view, he said.", "\"If these issues are to be resolved, and the code finally comes together, all sides need to keep looking for the greatest common denominator,\" Yi added.", "\"There are voices from the outside, who are trying to set a timetable for the talks on the code. I think this is unrealistic,\" he said.", "Any multilateral talks take time, especially on such a complex issue as the South China Sea, Yi added.", "\"It is impossible to define a timetable. Instead of setting the timetable unrealistically, and binding one's hands, it's better to step forward one foot at a time.\"\u2026", "\"Certain countries outside the region have been agitating that the code must be legally binding. This issue is quite complicated, including the domestic legal procedures involved in the countries concerned,\" he added, without elaborating.", "An October 22, 2018, press report stated the following:", "As China moves to complete the creation of military outposts in the South China Sea, Beijing's negotiation with southeastern Asian nations over a binding code of conduct is gaining momentum.", "But U.S. officials and experts warn China's insertions in the draft South China Sea code of conduct may put Washington and Beijing on a collision course. The text of the draft also shows that deep divisions remain among claimants.", "One of the Chinese provisions in the text states, \"The Parties shall not hold joint military exercises with countries from outside the region, unless the parties concerned are notified beforehand and express no objection.\"", "China also proposed cooperation on the marine economy \"shall not be conducted in cooperation with companies from countries outside the region.\"", "A State Department spokesperson told VOA the United States is concerned by reports China has been pressing members of the Association of Southeast Asian Nations \"in the closed-door talks, to accept restrictions on their ability to conduct exercises with security partners, and to agree not to conduct oil and gas exploration in their claimed waters with energy firms based in countries which are not part of the ongoing negotiations.\"", "\"These proposals, if accepted, would limit the ability of ASEAN nations to conduct sovereign, independent foreign and economic policies and would directly harm the interests of the broader international community,\" added the State Department spokesperson\u2026.", "\"In other words, China would like a veto over all the military exercises held by ASEAN countries with other nations. I think this really provides some evidence that China indeed is trying to limit American influence in the region, one might go so far as to say to push American military presence out of the region eventually, but certainly in the area of the South China Sea,\" said Bonnie Glaser, director of the China Power Project at the Center for Strategic and International Studies in Washington\u2026.", "The United States is also calling for ongoing discussions on the South China Sea code of conduct to be transparent and consultative with the rest of the international community. U.S. officials said the international community has direct stakes in the outcome.", "A September 6, 2018, blog post stated the following:", "After two decades of talks, scepticism about the development of a South China Sea Code of Conduct (COC) is well-deserved, but it is also important to acknowledge progress when it happens. The agreement on a single draft negotiating text, revealed ahead of the ASEAN\u2013China Post Ministerial Meeting on 2 August 2018, is an important step in the process that deserves recognition.", "The COC will not resolve the South China Sea disputes, nor was it ever meant to. Instead the COC is intended to manage disputes to avoid conflict pending their eventual resolution by direct negotiation or arbitration among the claimants. But any system to effectively manage the South China Sea disputes would require three things, none of which are achieved yet in the draft text.", "First, an effective COC would need to be geographically defined\u2026.", "Second, an effective COC would need a dispute settlement mechanism\u2026.", "Third, any effective regime to manage the South China Sea disputes would need detailed provisions on fisheries management and oil and gas development\u2026.", "The solution to this problem could be a COC signed by all 10 ASEAN members and China that establishes general rules of behaviour within a clear geographic area, sets up an effective dispute settlement mechanism and endorses the immediate start of follow-on negotiations involving only the relevant claimants on fisheries management and oil and gas cooperation.", "Such a document would be a major step towards peacefully managing the South China Sea disputes and there are hints that at least some sections of the negotiating text might be on the right track. But the differences between parties remain considerable and final agreement on an effective COC still seems some way off.", "An October 29, 2018, press report states the following:", "The Philippines on Monday said a set of rules intended to prevent conflict in the South China Sea need not legally compel countries to follow it\u2014an issue of importance for the Chinese government.", "Philippine Foreign Affairs Secretary Teodoro Locsin Jr. raised this possibility during a joint news conference with Wang Yi, his Chinese counterpart, in Davao City where they held bilateral talks to firm up preparations for President Xi Jinping's visit to Manila next month.", "The Association of Southeast Asian Nations and China are negotiating a code of conduct in the South China Sea. The 10-member bloc wants it to be legally binding, but Beijing prefers just \"binding,\" ASEAN diplomats have said.", "\"Perhaps, we will not be able to arrive at a legally binding COC, but it will be a standard on how people of ASEAN and governments of ASEAN will behave with each other -- always with honor, never with aggression, and always for mutual progress,\" Locsin said\u2026.", "Wang said China will abide by the code whether it is legally binding or not. He said China hopes to finish the negotiations before Manila's term as ASEAN-China coordinator ends.", "\"We welcome constructive opinions within the framework... that has been agreed,\" Wang said, referring to the general outline agreed last year, which dropped a reference to a legally binding code. The framework essentially repeats the spirit of a 2002 declaration on the South China Sea that called on parties to exercise restraint to avoid escalating tensions, and respect international law, among other things. Critics and ASEAN officials said the declaration failed to manage tensions in the disputed area because it was not legally binding.", "A November 14, 2018, press report stated the following:", "A rulebook to settle disputes in the hotly contested South China Sea should be finished in three years, Chinese Premier Li Keqiang said on Tuesday, insisting his nation does not seek \"hegemony or expansion.\"", "Li's comments appeared to be the first clear timeframe for finishing the code of conduct. Talks have dragged on for years, with China accused of delaying progress as it prefers to deal with less powerful countries on a one-to-one basis.", "Appendix D. July 2016 Tribunal Award in SCS Arbitration Case Involving Philippines and China", "This appendix provides background information on the July 2016 tribunal award in the SCS arbitration case involving the Philippines and China.", "Overview", "In 2013, the Philippines sought arbitration under UNCLOS over the role of historic rights and the source of maritime entitlements in the South China Sea, the status of certain maritime features and the maritime entitlements they are capable of generating, and the lawfulness of certain actions by China that were alleged by the Philippines to violate UNCLOS. A tribunal was constituted under UNCLOS to hear the case.", "China stated repeatedly that it would not accept or participate in the arbitration and that, in its view, the tribunal lacked jurisdiction in this matter. China's nonparticipation did not prevent the case from moving forward, and the tribunal decided that it had jurisdiction over various matters covered under the case.", "On July 12, 2016, the tribunal issued its award (i.e., ruling) in the case. The award was strongly in favor of the Philippines\u2014more so than even some observers had anticipated. The tribunal ruled, among other things, that China's nine-dash line claim had no legal basis; that none of the land features in the Spratlys is entitled to any more than a 12-nm territorial sea; that three of the Spratlys features that China occupies generate no entitlement to maritime zones; and that China violated the Philippines' sovereign rights by interfering with Philippine vessels and by damaging the maritime environment and engaging in reclamation work on a feature in the Philippines' EEZ.", "Under UNCLOS, the award is binding on both the Philippines and China (China's nonparticipation in the arbitration does not change this). There is, however, no mechanism for enforcing the tribunal's award. The United States has urged China and the Philippines to abide by the award. China, however, has declared the ruling null and void. Philippine President Rodrigo Duterte, who took office just before the tribunal's ruling, has not sought to enforce it.", "The tribunal's press release summarizing its award states the following in part:", "The Award is final and binding, as set out in Article 296 of the Convention [i.e., UNCLOS] and Article 11 of Annex VII [of UNCLOS].", "Historic Rights and the 'Nine-Dash Line': ... On the merits, the Tribunal concluded that the Convention comprehensively allocates rights to maritime areas and that protections for pre-existing rights to resources were considered, but not adopted in the Convention. Accordingly, the Tribunal concluded that, to the extent China had historic rights to resources in the waters of the South China Sea, such rights were extinguished to the extent they were incompatible with the exclusive economic zones provided for in the Convention. The Tribunal also noted that, although Chinese navigators and fishermen, as well as those of other States, had historically made use of the islands in the South China Sea, there was no evidence that China had historically exercised exclusive control over the waters or their resources. The Tribunal concluded that there was no legal basis for China to claim historic rights to resources within the sea areas falling within the 'nine-dash line'.", "Status of Features: ... Features that are above water at high tide generate an entitlement to at least a 12 nautical mile territorial sea, whereas features that are submerged at high tide do not. The Tribunal noted that the reefs have been heavily modified by land reclamation and construction, recalled that the Convention classifies features on their natural condition, and relied on historical materials in evaluating the features. The Tribunal then considered whether any of the features claimed by China could generate maritime zones beyond 12 nautical miles. Under the Convention, islands generate an exclusive economic zone of 200 nautical miles and a continental shelf, but \"[r]ocks which cannot sustain human habitation or economic life of their own shall have no exclusive economic zone or continental shelf.\" ... the Tribunal concluded that none of the Spratly Islands is capable of generating extended maritime zones. The Tribunal also held that the Spratly Islands cannot generate maritime zones collectively as a unit. Having found that none of the features claimed by China was capable of generating an exclusive economic zone, the Tribunal found that it could\u2014without delimiting a boundary\u2014declare that certain sea areas are within the exclusive economic zone of the Philippines, because those areas are not overlapped by any possible entitlement of China.", "Lawfulness of Chinese Actions: ... Having found that certain areas are within the exclusive economic zone of the Philippines, the Tribunal found that China had violated the Philippines' sovereign rights in its exclusive economic zone by (a) interfering with Philippine fishing and petroleum exploration, (b) constructing artificial islands and (c) failing to prevent Chinese fishermen from fishing in the zone. The Tribunal also held that fishermen from the Philippines (like those from China) had traditional fishing rights at Scarborough Shoal and that China had interfered with these rights in restricting access. The Tribunal further held that Chinese law enforcement vessels had unlawfully created a serious risk of collision when they physically obstructed Philippine vessels.", "Harm to Marine Environment: The Tribunal considered the effect on the marine environment of China's recent large-scale land reclamation and construction of artificial islands at seven features in the Spratly Islands and found that China had caused severe harm to the coral reef environment and violated its obligation to preserve and protect fragile ecosystems and the habitat of depleted, threatened, or endangered species. The Tribunal also found that Chinese authorities were aware that Chinese fishermen have harvested endangered sea turtles, coral, and giant clams on a substantial scale in the South China Sea (using methods that inflict severe damage on the coral reef environment) and had not fulfilled their obligations to stop such activities.", "Aggravation of Dispute: Finally, the Tribunal considered whether China's actions since the commencement of the arbitration had aggravated the dispute between the Parties. The Tribunal found that it lacked jurisdiction to consider the implications of a stand-off between Philippine marines and Chinese naval and law enforcement vessels at Second Thomas Shoal, holding that this dispute involved military activities and was therefore excluded from compulsory settlement. The Tribunal found, however, that China's recent large-scale land reclamation and construction of artificial islands was incompatible with the obligations on a State during dispute resolution proceedings, insofar as China has inflicted irreparable harm to the marine environment, built a large artificial island in the Philippines' exclusive economic zone, and destroyed evidence of the natural condition of features in the South China Sea that formed part of the Parties' dispute.", "Assessments of Impact of Arbitral Award One Year Later", "In July 2017, a year after the arbitral panel's award, some observers assessed the impact to date of the award. For example, one observer stated the following:", "One year ago, China suffered a massive legal defeat when an international tribunal based in The Hague ruled that the vast majority of Beijing's extensive claims to maritime rights and resources in the South China Sea were not compatible with international law. Beijing was furious.", "At an official briefing immediately after the ruling, Vice Foreign Minister Liu Zhenmin twice called it \"nothing more than a piece of waste paper,\" and one that \"will not be enforced by anyone.\" And yet, one year on, China is, in many ways, abiding by it....", "China is not fully complying with the ruling\u2014far from it. On May 1, China imposed a three-and-a-half-month ban on fishing across the northern part of the South China Sea, as it has done each year since 1995. While the ban may help conserve fish stocks, its unilateral imposition in wide areas of the sea violates the ruling. Further south, China's occupation of Mischief Reef, a feature that is submerged at high tide and the tribunal ruled was part of the Philippines' continental shelf, endures. Having built a vast naval base and runway here, China looks like it will remain in violation of that part of the ruling for the foreseeable future.", "But there is evidence that the Chinese authorities, despite their rhetoric, have already changed their behavior. In October 2016, three months after the ruling, Beijing allowed Philippine and Vietnamese boats to resume fishing at Scarborough Shoal, west of the Philippines. A China Coast Guard ship still blocks the entrance to the lagoon, but boats can still fish the rich waters around it. The situation is not perfect but neither is China flaunting its defiance....", "Much more significantly, China has avoided drilling for oil and gas on the wrong side of the invisible lines prescribed by the United Nations Convention on the Law of the Sea (UNCLOS)....", "... the ruling means China has no claim to the fish, oil or gas more than 12 nautical miles from any of the Spratlys or Scarborough Shoal.", "The Chinese authorities appear not to accept this....", "There are clear signs from both China's words and deeds that Beijing has quietly modified its overall legal position in the South China Sea. Australian researcher Andrew Chubb noted a significant article in the Chinese press in July last year outlining the new view....", "... China's new position seems to represent a major step towards compliance with UNCLOS and, therefore, the ruling. Most significantly, it removes the grounds for Chinese objections to other countries fishing and drilling in wide areas of the South China Sea....", "Overall, the picture is of a China attempting to bring its vision of the rightful regional order (as the legitimate owner of every rock and reef inside the U-shaped line) within commonly understood international rules. Far from being \"waste paper,\" China is taking the tribunal ruling very seriously. It is still some way from total compliance but it is clearly not deliberately flouting the ruling.", "Another observer stated the following:", "A year ago today, an arbitral tribunal formed pursuant to the United Nations Convention for the Law of the Sea issued a blockbuster award finding much of China's conduct in the South China Sea in violation of international law. As I detailed that day on this blog and elsewhere, the Philippines won about as big a legal victory as it could have expected. But as many of us also warned that day, a legal victory is not the same as an actual victory. ", "In fact, over the past year China has succeeded in transforming its legal defeat into a policy victory by maintaining its aggressive South China Sea policies while escaping sanction for its non-compliance. While the election of a new pro-China Philippines government is a key factor, much of the blame for China's victory must also be placed on the Obama Administration....", "International law seldom enforces itself, and even the reputational costs of violating international law do not arise unless other states impose those costs on the law-breaker. Both the Philippines and the U.S. had policy options that would have raised the costs of China's non-compliance with the award. But neither country's government chose to press China on the arbitral award....", "Looking back after one year, we cannot say (yet) that U.S. policy in the South China Sea is a failure. But we can say that the U.S. under President Obama missed a huge opportunity to change the dynamics in the region in its favor, and it is hard to know whether or when another such opportunity will arise in the future.", "Reported Chinese Characterization of Arbitral Award as \"Waste\u00a0Paper\"", "When the arbitral panel's award was announced, China stated that \"China does not accept or recognize it,\" and that the award \"is invalid and has no binding force.\" The first of the two passages quoted above states that \"at an official briefing immediately after the ruling, Vice Foreign Minister Liu Zhenmin twice called it 'nothing more than a piece of waste paper,' and one that 'will not be enforced by anyone.'\" A November 22, 2017, press report states the following:", "An eight-page essay pumped through social media and Chinese state newspapers in recent days extolled the virtues of president Xi Jinping.", "Among his achievements, in the Chinese language version, was that he had turned the South China Sea Arbitration at The Hague\u2014which found against China\u2014into \"waste paper\".", "It was an achievement that state news agency Xinhua's lengthy hymn, entitled \"Xi and His Era\", did not include in the English version for foreign consumption.", "Assessments and Events Two Years Later", "Another observer writes in a May 10, 2018, commentary piece that", "Two years after an international tribunal rejected expansive Chinese claims to the South China Sea, Beijing is consolidating control over the area and its resources. While the U.S. defends the right to freedom of navigation, it has failed to support the rights of neighboring countries under the tribunal's ruling. As a result, Southeast Asian countries are bowing to Beijing's demands\u2026.", "While Beijing's dramatic military buildup in the South China Sea has received much attention, its attempts at \"lawfare\" are largely overlooked. In May, the Chinese Society of International Law published a \"critical study\" on the South China Sea arbitration case. It rehashed old arguments but also developed a newer one, namely that China is entitled to claim maritime zones based on groups of features rather than from individual features. Even if China is not entitled to historic rights within the area it claims, this argument goes, it is entitled to resources in a wide expanse of sea on the basis of an exclusive economic zone generated from outlying archipelagoes.", "But the Convention on the Law of the Sea makes clear that only archipelagic states such as the Philippines and Indonesia may draw straight archipelagic baselines from which maritime zones may be claimed. The tribunal also explicitly found that there was \"no evidence\" that any deviations from this rule have amounted to the formation of a new rule of customary international law.", "China's arguments are unlikely to sway lawyers, but that is not their intended audience. Rather Beijing is offering a legal fig leaf to political and business elites in Southeast Asia who are already predisposed to accept Beijing's claims in the South China Sea. They fear China's threat of coercive economic measures and eye promises of development through offerings such as the Belt and Road Initiative.", "Why did Washington go quiet on the 2016 tribunal decision? One reason is Philippine President Rodrigo Duterte's turn toward China and offer to set aside the ruling. The U.S. is also worried about the decision's implications for its own claims to exclusive economic zones from small, uninhabited land features in the Pacific.", "The Trump administration's failure to press Beijing to abide by the tribunal's ruling is a serious mistake. It undermines international law and upsets the balance of power in the region. Countries have taken note that the tide in the South China Sea is in China's favor, and they are making their strategic calculations accordingly. This hurts U.S. interests in the region.", "A July 12, 2018, press report stated the following:", "The Philippines is celebrating today the second anniversary of its landmark arbitration award against China's territorial claims in the South China Sea handed down by an arbitral tribunal in The Hague\u2026.", "Until now, the Philippines remains sharply divided on how to leverage its arbitration award. Filipino President Rodrigo Duterte has repeatedly downplayed the relevance of the ruling by questioning its enforceability amid China's vociferous opposition.", "Soon after taking office in mid-2016, Duterte declared that he would \"set aside\" the arbitration award in order to pursue a \"soft landing\" in bilateral relations with China. In exchange, he has hoped for large-scale Chinese investments as well as resource-sharing in the South China Sea\u2026.", "Other major leaders in the Philippines, however, have taken a tougher stance and continue to try to leverage the award to resist China's expanding footprint in the area.", "The Stratbase-Albert Del Rosario Institute, an influential think tank co-founded by former Philippine Secretary of Foreign Affairs Albert del Rosario, hosted today a high-level forum on the topic at the prestigious Manila Polo Club.", "Del Rosario oversaw the arbitration proceedings against China under Duterte's predecessor, Benigno Aquino. He opened the event attended by dignitaries from major Western and Asian countries with a strident speech which accused China of trying to \"dominate the South China Sea through force and coercion.\"", "He defended the arbitration award as an \"overwhelming victory\" to resist \"China's unlawful expansion agenda.\"", "The ex-top diplomat also accused the Duterte administration of acquiescence to China by acting as an \"abettor\" and \"willing victim\" by soft-pedaling the Philippines' claims in the South China Sea and refusing to raise the arbitration award in multilateral fora.", "The keynote speaker of the event was Vice President Leni Robredo, who has recently emerged as the de facto leader of the opposition against Duterte. Though falling short of directly naming Duterte, her spirited speech served as a comprehensive indictment of the administration's policy in the South China Sea\u2026.", "Her keynote address, widely covered by the local media, was followed by an even more spirited speech by interim Supreme Court Chief Justice Antonio Carpio, another leading critic of Duterte's foreign policy.", "The chief magistrate, who also oversaw the Philippines' arbitration proceedings against China, lashed out at Duterte for placing the landmark award in a \"deep freeze.\"", "He called on the Duterte administration to leverage the award by negotiating maritime delimitation agreements with other Southeast Asian claimant states such as Malaysia and Vietnam which welcomed the arbitral tribunal's nullification of China's nine-dashed-line map.", "He also called on the Philippines to expand its maritime entitlement claims in the area, in accordance to the arbitration award, by applying for an extended continental shelf in the South China Sea at the UN.", "Another July 12, 2018, press report stated the following:", "Tarpaulins bearing the words \"Welcome to the Philippines, province of China\" were seen hanging from several footbridges in Metro Manila Thursday, two years after the country won its arbitration case against China.", "The red banners bore the Chinese flag and Chinese characters.", "It is unclear who installed the tarpaulins, which are possible reference to a \"joke\" by President Rodrigo Duterte that the country can be a province of the Asian giant.", "\"He (Xi Jinping) is a man of honor. They can even make us 'Philippines, province of China,' we will even avail of services for free,\" Duterte said in apparent jest before an audience of Chinese-Filipino business leaders earlier in 2018. \"If China were a woman, I'd woo her.\"\u2026", "In a Palace briefing, presidential spokesperson Harry Roque said enemies of the government are behind the tarpaulins.", "A report on ANC said that the Metro Manila Development Authority already took the banners down.", "The tarpaulins sparked outrage among social media users.", "A July 17, 2018, press report stated the following:", "Protesters held a rally in front of the Chinese Consulate [in San Francisco] before proceeding to the Philippine Consulate downtown, demanding that China \"get out of Philippine territory in the West Philippine Sea.\" The protest was timed with others in Los Angeles and Vancouver on the second anniversary of the UN's Permanent Court of Arbitration ruling that China had no right to the territory it was claiming.", "Filipino American Human Rights Advocates (FAHRA) in a statement celebrated the court's finding that \"China's historical claim of the \"nine-dash line\" [is] illegal and without basis.\"", "\"China continues to violate the UN's decision with the backing of its puppet Philippine government headed by President Duterte, who is deceived by the 'build, build, build' economic push while China establishes a 'steal, steal, steal' approach to islands and territories belonging to the Exclusive Economic Zone (EEZ) of the Philippines as determined by UN,\" the statement lamented.", "FAHRA also found it unacceptable that Filipino fishermen must now ask permission to fish in the Philippine waters from \"a Chinese master.\"", "\"Duterte is beholden to the $15-billion loan with monstrous interest rate and China's investments in Boracay and Marawi, at the expense of Philippine sovereignty,\" FAHRA claimed. \"This is not to mention that China remains to be the premier supplier of illegal drugs to the country through traders that include the son, Paolo Duterte, with his P6 billion shabu shipment to Davao,\" it further charged.", "The group demanded that \"China abide by the UN International Tribunal Court's decision two years ago, to honor the full sovereignty of the Philippines over all territories at the Exclusive Economic Zone (EEZ) including the West Philippine Sea and the dismantling of the nuclear missiles and all military facilities installed by the Chinese government at the Spratly islands meant to coerce the Filipinos and all peace-loving people of Southeast Asia who clamor for equal respect and equal sovereignty in the area\" among others.", "Appendix E. Additional Elements of China's Approach to Maritime Disputes", "This appendix presents background information on additional elements of China's approach to the maritime disputes in the SCS and ECS.", "Map of Nine-Dash Line", "China depicts its claims in the SCS using the so-called map of the nine-dash line\u2014a Chinese map of the SCS showing nine line segments that, if connected, would enclose an area covering roughly 90% (earlier estimates said about 80%) of the SCS ( Figure E-1 ). The area inside the nine line segments far exceeds what is claimable as territorial waters under customary international law of the sea as reflected in UNCLOS, and, as shown in Figure E-2 , includes waters that are within the claimable EEZs (and in some places are quite near the coasts) of the Philippines, Malaysia, Brunei, and Vietnam.", "The map of the nine-dash line, also called the U-shaped line or the cow tongue, predates the establishment of the People's Republic of China (PRC) in 1949. The map has been maintained by the PRC government, and maps published in Taiwan also show the nine line segments.", "In a document submitted to the United Nations on May 7, 2009, which included the map shown in Figure E-1 as an attachment, China stated the following:", "China has indisputable sovereignty over the islands in the South China Sea and the adjacent waters, and enjoys sovereign rights and jurisdiction over the relevant waters as well as the seabed and subsoil thereof (see attached map [of the nine-dash line]). The above position is consistently held by the Chinese Government, and is widely known by the international community.", "The map does not always have exactly nine dashes. Early versions of the map had as many as 11 dashes, and a map of China published by the Chinese government in June 2014 includes 10 dashes. The exact positions of the dashes have also varied a bit over time.", "China has maintained ambiguity over whether it is using the map of the nine-dash line to claim full sovereignty over the entire sea area enclosed by the nine-dash line, or something less than that. Maintaining this ambiguity can be viewed as an approach that preserves flexibility for China in pursuing its maritime claims in the SCS while making it more difficult for other parties to define specific objections or pursue legal challenges to those claims. It does appear clear, however, that China at a minimum claims sovereignty over the island groups inside the nine line segments\u2014China's domestic Law on the Territorial Sea and Contiguous Zone, enacted in 1992, specifies that China claims sovereignty over all the island groups inside the nine line segments. China's implementation on January 1, 2014, of a series of fishing regulations covering much of the SCS suggests that China claims at least some degree of administrative control over much of the SCS.", "An April 30, 2018, blog post states the following:", "In what is likely a new bid to reinforce and even expand China's sweeping territorial claims in the South China Sea, a group of Chinese scholars recently published a \"New Map of the People's Republic of China.\"", "The alleged political national map, reportedly first published in April 1951 but only \"discovered\" through a recent national archival investigation, could give new clarity to the precise extent of China's official claims in the disputed waters.", "Instead of dotted lines, as reflected in China's U-shaped Nine-Dash Line claim to nearly all of the South China Sea, the newly discovered map provides a solid \"continuous national boundary line and administrative region line.\"", "The Chinese researchers claim that through analysis of historical maps, the 1951 solid-line map \"proves\" beyond dispute that the \"U-boundary line is the border of China's territorial sea\" in the South China Sea.", "They also claim that the solid administrative line overlaying the U-boundary \"definitely indicated that the sovereignty of the sea\" enclosed within the U-boundary \"belonged to China.\"", "The study, edited by the Guanghua and Geosciences Club and published by SDX Joint Publishing Company, has not been formally endorsed by the Chinese government.", "April 2018 Press Report of Proposal for Continuous Boundary Line in SCS", "An April 22, 2018, press report states the following:", "Researchers are proposing a new boundary in the South China Sea that they say will help the study of natural science while potentially adding weight to China's claims over the disputed waters, according to a senior scientist involved in the government-funded project. ", "The new boundary will help to define more clearly China's claims in the contested region, but it is not clear whether or when it will be officially adopted by Beijing, the scientist said. ", "A precise continuous line will split the Gulf of Tonkin between China and Vietnam, go south into waters claimed by Malaysia, take a U-turn to the north along the west coast of the Philippines and finish at the southeast of Taiwan.", "For decades, China's sovereign claim in the South China Sea has been murky, in large part because of the use of a segmented, vaguely located borderline known as the 'nine-dash line'.", "A United Nations tribunal ruled in July 2016 that China had no legal basis to claim the area within the dash lines. One reason for China losing the case was that it could not define the territory precisely.", "However, analysts said Beijing was unlikely to officially change the nine-dash line any time soon, in the face of potential international opposition....", "The vast area of blue outlined by the new boundary, hanging on a map like a Christmas stocking under South China, overlaps the dashes and fills in the gaps. It includes all contested waters, such as the Paracel Islands, the Spratly Islands, James Shoal and Scarborough Shoal. ", "The boundary would determine for the first time the exact area that China claimed to own with historic rights in the South China Sea, according to the researcher.", "Its purpose was partly the study of natural science and partly driven by a political motivation \"to strengthen China's claims\" over the waters to prepare for possible changes in its South China Sea policy in the future, the researcher said.", "Within the boundary, China would claim the right to activities ranging from fishing, prospecting and mining for energy or mineral resources to the construction of military bases with deep water ports or airports. ", "Other countries' access to these rights would, however, be open for discussion, as is the case at Scarborough Shoal, which China controls but allows Philippine fishing boats to access.", "While Beijing would consider the area within the boundary its territory, other countries would still have freedom of navigation, the researcher said....", "\"Soon we will have a clear idea of what belongs to us in the South China Sea and what does not,\" said the researcher. \"This will allow us to better plan and coordinate the efforts to protect our national interest in the region while reducing the risk of conflict with other countries caused by the absence of a border over the ocean.\"...", "\"More often, when we are sending vessels out to the sea or looking down at an area via satellite, we are not sure whether it was our water,\" said the researcher in the boundary-drawing project.", "\"The nine-dash line can no longer meet the demands of increasing Chinese activities in the South China Sea.\"...", "The continuous boundary was generated not only by curve-extending, gap-filling algorithms on computer. It was also based on a solid piece of historic evidence, according to the project team. ", "In 1951, an official map approved by the central government of China marked the China-claimed area in the South China Sea with a pair of non-stopping lines. There was an inner black line indicating the sovereign boundary and an outer red line representing where China could exercise administrative power.", "\"We were thrilled when we found the map,\" the researcher said. \"It is something we can show the world.\" ", "A detailed description of the map was published by the project team in a paper in domestic academic journal China Science Bulletin in March this year.", "Its authors recommended using the continuous U-shape boundary line as a replacement for the nine-dash line.", "The \"U-boundary is the border of China's sea in the South China Sea, and its sovereignty belongs to China\", the authors wrote in the paper.", "It \"can further express the certainty of the integrity, continuity and border of China's seas in the South China Sea\", they wrote, adding that it was \"more vivid, accurate, complete and scientific\".", "Professor Yu Minyou, director of the China Institute of Boundary and Ocean Studies at Wuhan University, said that if the old map was published with government approval, which was usually the case in China, \"it surely will add legal weight to China's claim\" in the region....", "But other countries should bear in mind that it did not represent the Chinese government's position as long as the dash lines stayed on official maps, Yu said, adding that China's strategy for the South China Sea was \"open and clear\". ", "\"China wants to achieve peace, stability, harmony and prosperity in the region,\" he said. \"We are willing to share natural resources with other countries and leave the disputes to be solved in the future. ", "\"What we are doing now is creating a suitable environment for the final settlement of the issue.\"", "A government expert at the National Institute for South China Sea Studies in Haikou, Hainan, said the continuous boundary would serve as a useful tool for some studies of natural science.", "But it was highly unlikely to be printed on an official map, said the expert, who requested not to be named because he was not allowed to speak to overseas media about sensitive issues.", "\"To my knowledge, the Chinese government currently has no plan to change the dash lines,\" he said. \"Most diplomats and ocean law experts will oppose joining the dashes.\"", "The tension in the South China Sea has eased significantly in recent times, with neighbouring countries such as the Philippines and Vietnam no longer seeking direct confrontation with China over disputed areas.", "\"Things are moving towards the right direction,\" the government expert said. \"It is not the best time to cut a boundary.\"", "September 2017 Press Report of Potential New \"Four-Sha\" Legal\u00a0Claim", "A September 21, 2017, press report states the following:", "The Chinese government recently unveiled a new legal tactic to promote Beijing's aggressive claim to own most of the strategic South China Sea.", "The new narrative that critics are calling \"lawfare,\" or legal warfare, involves a shift from China's so-called \"9-Dash Line\" ownership covering most of the sea.", "The new lawfare narrative is called the \"Four Sha\"\u2014Chinese for sand\u2014and was revealed by Ma Xinmin, deputy director general in the Foreign Ministry's department of treaty and law, during a closed-door meeting with State Department officials last month.", "China has claimed three of the island chains in the past and recently added a fourth zone in the northern part of the sea called the Pratas Islands near Hong Kong.", "The other locations are the disputed Paracels in the northwestern part and the Spratlys in the southern sea. The fourth island group is located in the central zone and includes Macclesfield Bank, a series of underwater reefs and shoals.", "China calls the island groups Dongsha, Xisha, Nansha, and Zhongsha, respectively.", "Ma, the Foreign Ministry official, announced during the meetings in Boston on Aug. 28 and 29 that China is asserting sovereignty over the Four Sha through several legal claims. He stated the area is China's historical territorial waters and also part of China's 200-mile Exclusive Economic Zone that defines adjacent zones as sovereign territory. Beijing also claims ownership by asserting the Four Sha are part of China's extended continental shelf.", "U.S. officials attending the session expressed surprise at the new Chinese ploy to seek control over the sea as something not discussed before....", "A State Department notice at the end of what was billed as an annual U.S.-China Dialogue on the Law of the Sea and Polar Issues made no mention of the new Chinese lawfare tactic.", "The statement said only that officials from foreign affairs and maritime agencies \"exchanged views on a wide range of issues related to oceans, the law of the sea, and the polar regions.\"", "A September 25, 2017, blog post about the claim states the following:", "While dropping or even de-emphasizing China's Nine-Dash Line claim in favor of the Four Shas has important diplomatic and political implications, the legal significance of such a shift is harder to assess. The constituent parts of China's Four Sha claims have long been set forth publicly in Chinese domestic law and official statements. Based on what we know so far, these new Chinese legal justifications are no more lawful than China's Nine-Dash Line claim. The challenge for critics of Chinese claims in the South China Sea, however, will be effectively explaining and articulating why this shift does not actually strengthen China's legal claims in the South China Sea. ", "The Four Sha claim has a long pedigree in Chinese law and practice. China's 1992 law on the territorial sea and contiguous zone, for example, declared that China's land territory included the \"Dongsha island group, Xisha island group, Zhongsha island group, [and] Nansha island group.\" A 2016 white paper disputing the Philippines' claims in the South China Sea arbitral process similarly claimed that:", "China's Nanhai Zhudao (the South China Sea Islands) consist of Dongsha Qundao (the Dongsha Islands), Xisha Qundao (the Xisha Islands), Zhongsha Qundao (the Zhongsha Islands) and Nansha Qundao (the Nansha Islands). These Islands include, among others, islands, reefs, shoals and cays of various numbers and sizes....", "In a 2016 white paper, Beijing stated that, \"China has, based on Nanhai Zhudao [the \"Four Sha\"], internal waters, territorial sea, contiguous zone, exclusive economic zone and continental shelf.\" Neither the white paper nor the Beacon's report explain how China derives these maritime zones from the four island groups....", "Because China is not constituted \"wholly by one or more archipelagos\" (think Indonesia or the Philippines), the U.S. and most countries would view straight baselines around an island group as contrary to the UN Convention on the Law of the Sea (UNCLOS)....", "For this reason, this new Chinese legal strategy is even weaker than the Nine-Dash Line given that it clearly violates UNCLOS (e.g., Articles 46 and 47). Most Chinese defenses of the Nine Dash Line argued that the claim predated China's accession to UNCLOS and therefore not governed by it. Despite the legal weaknesses of its possible new strategy, China may still reap some benefits from trading the Nine-Dash Line for the Four Shas.", "First, the Chinese leadership may have realized that the Nine Dash Line has become too much of a diplomatic liability. The Nine-Dash Line is completely sui generis and no other state has made a historic maritime claim anything like it. For this reason, the Nine-Dash Line makes China an easy target for foreign criticism in a way that straight baselines around island groups probably will not.", "Second, by adopting language more similar to that found in UNCLOS, China may be betting that it can tamp down criticism, and win potential partners in the region....", "Third, and most intriguingly, China may have concluded that it can better shape (or undermine, depending on your point of view) the law of the sea by adopting UNCLOS terminology....", "So while we might be encouraged to see the Nine-Dash Line pass into the (legal) dustbins of history, we should be skeptical about whether the Four Shas herald a new more modest Chinese role in the South China Sea. China's legal justification for the Four Shas is just as weak, if not weaker, than its Nine-Dash Line claim. But explaining why the Four Shas is weak and lawless will require sophisticated legal analysis married with effective public messaging.", "Comparison with U.S. Actions Toward Caribbean and Gulf of Mexico", "Some observers have compared China's approach toward its near-seas region with the U.S. approach toward the Caribbean and the Gulf of Mexico in the age of the Monroe Doctrine. It can be noted, however, that there are significant differences between China's approach to its near-seas region and the U.S. approach\u2014both in the 19 th and 20 th centuries and today\u2014to the Caribbean and the Gulf of Mexico. Unlike China in its approach to its near-seas region, the United States has not asserted any form of sovereignty or historical rights over the broad waters of the Caribbean or Gulf of Mexico (or other sea areas beyond the 12-mile limit of U.S. territorial waters), has not published anything akin to the nine-dash line for these waters (or other sea areas beyond the 12-mile limit), and does not contest the right of foreign naval forces to operate and engage in various activities in waters beyond the 12-mile limit.", "Appendix F. U.S. Position on Operational Rights in\u00a0EEZs", "This appendix presents additional background information on the U.S. position on the issue of operational rights of military ships in the EEZs of other countries.", "Operational Rights in EEZs", "Regarding a coastal state's rights within its EEZ, Scot Marciel, then-Deputy Assistant Secretary, Bureau of East Asian and Pacific Affairs, stated the following as part of his prepared statement for a July 15, 2009, hearing before the East Asian and Pacific Affairs Subcommittee of the Senate Foreign Relations Committee:", "I would now like to discuss recent incidents involving China and the activities of U.S. vessels in international waters within that country's Exclusive Economic Zone (EEZ). In March 2009, the survey ship USNS Impeccable was conducting routine operations, consistent with international law, in international waters in the South China Sea. Actions taken by Chinese fishing vessels to harass the Impeccable put ships of both sides at risk, interfered with freedom of navigation, and were inconsistent with the obligation for ships at sea to show due regard for the safety of other ships. We immediately protested those actions to the Chinese government, and urged that our differences be resolved through established mechanisms for dialogue\u2014not through ship-to-ship confrontations that put sailors and vessels at risk.", "Our concern over that incident centered on China's conception of its legal authority over other countries' vessels operating in its Exclusive Economic Zone (EEZ) and the unsafe way China sought to assert what it considers its maritime rights. ", "China's view of its rights on this specific point is not supported by international law. We have made that point clearly in discussions with the Chinese and underscored that U.S. vessels will continue to operate lawfully in international waters as they have done in the past.", "As part of his prepared statement for the same hearing, Robert Scher, then-Deputy Assistant Secretary of Defense, Asian and Pacific Security Affairs, Office of the Secretary of Defense, stated that", "we reject any nation's attempt to place limits on the exercise of high seas freedoms within an exclusive economic zones [sic] (EEZ). Customary international law, as reflected in articles 58 and 87 of the 1982 United Nations Convention on the Law of the Sea, guarantees to all nations the right to exercise within the EEZ, high seas freedoms of navigation and overflight, as well as the traditional uses of the ocean related to those freedoms. It has been the position of the United States since 1982 when the Convention was established, that the navigational rights and freedoms applicable within the EEZ are qualitatively and quantitatively the same as those rights and freedoms applicable on the high seas. We note that almost 40% of the world's oceans lie within the 200 nautical miles EEZs, and it is essential to the global economy and international peace and security that navigational rights and freedoms within the EEZ be vigorously asserted and preserved.", "As previously noted, our military activity in this region is routine and in accordance with customary international law as reflected in the 1982 Law of the Sea Convention.", "As mentioned earlier in the report, if China's position on whether coastal states have a right under UNCLOS to regulate the activities of foreign military forces in their EEZs were to gain greater international acceptance under international law, it could substantially affect U.S. naval operations not only in the SCS and ECS (see Figure F-1 for EEZs in the SCS and ECS), but around the world, which in turn could substantially affect the ability of the United States to use its military forces to defend various U.S. interests overseas. As shown in Figure F-2 , significant portions of the world's oceans are claimable as EEZs, including high-priority U.S. Navy operating areas in the Western Pacific, the Persian Gulf, and the Mediterranean Sea.", "Some observers, in commenting on China's resistance to U.S. military survey and surveillance operations in China's EEZ, have argued that the United States would similarly dislike it if China or some other country were to conduct military survey or surveillance operations within the U.S. EEZ. Skeptics of this view argue that U.S. policy accepts the right of other countries to operate their military forces freely in waters outside the 12-mile U.S. territorial waters limit, and that the United States during the Cold War acted in accordance with this position by not interfering with either Soviet ships (including intelligence-gathering vessels known as AGIs) that operated close to the United States or with Soviet bombers and surveillance aircraft that periodically flew close to U.S. airspace. The U.S. Navy states that", "When the commonly recognized outer limit of the territorial sea under international law was three nautical miles, the United States recognized the right of other states, including the Soviet Union, to exercise high seas freedoms, including surveillance and other military operations, beyond that limit. The 1982 Law of the Sea Convention moved the outer limit of the territorial sea to twelve nautical miles. In 1983, President Reagan declared that the United States would accept the balance of the interests relating to the traditional uses of the oceans reflected in the 1982 Convention and would act in accordance with those provisions in exercising its navigational and overflight rights as long as other states did likewise. He further proclaimed that all nations will continue to enjoy the high seas rights and freedoms that are not resource related, including the freedoms of navigation and overflight, in the Exclusive Economic Zone he established for the United States consistent with the 1982 Convention.", "DOD states that", "the PLA Navy has begun to conduct military activities within the Exclusive Economic Zones (EEZs) of other nations, without the permission of those coastal states. Of note, the United States has observed over the past year several instances of Chinese naval activities in the EEZ around Guam and Hawaii. One of those instances was during the execution of the annual Rim of the Pacific (RIMPAC) exercise in July/August 2012. While the United States considers the PLA Navy activities in its EEZ to be lawful, the activity undercuts China's decades-old position that similar foreign military activities in China's EEZ are unlawful.", "In July 2014, China participated, for the first time, in the biennial U.S.-led Rim of the Pacific (RIMPAC) naval exercise, the world's largest multilateral naval exercise. In addition to the four ships that China sent to participate in RIMPAC, China sent an uninvited intelligence-gathering ship to observe the exercise without participating in it. The ship conducted operations inside U.S. EEZ off Hawaii, where the exercise was located. A July 29, 2014, press report stated that", "The high profile story of a Chinese surveillance ship off the cost of Hawaii could have a positive aspect for U.S. operations in the Pacific, the head of U.S. Pacific Command (PACOM) said in a Tuesday [July 29] afternoon briefing with reporters at the Pentagon.", "\"The good news about this is that it's a recognition, I think, or acceptance by the Chinese for what we've been saying to them for sometime,\" PACOM commander Adm. Samuel Locklear told reporters.", "\"Military operations and survey operations in another country's [Exclusive Economic Zone]\u2014where you have your own national security interest\u2014are within international law and are acceptable. This is a fundamental right nations have.\"", "One observer stated the following:", "The unprecedented decision [by China] to send a surveillance vessel while also participating in the RIMPAC exercises calls China's proclaimed stance on international navigation rights [in EEZ waters] into question...", "During the Cold War, the U.S. and Soviets were known for spying on each other's exercises. More recently, Beijing sent what U.S. Pacific Fleet spokesman Captain Darryn James called \"a similar AGI ship\" to Hawaii to monitor RIMPAC 2012\u2014though that year, China was not an official participant in the exercises....", "... the spy ship's presence appears inconsistent with China's stance on military activities in Exclusive Economic Zones (EEZs).... That Beijing's AGI [intelligence-gathering ship] is currently stationed off the coast of Hawaii suggests either a double standard that could complicate military relations between the United States and China, or that some such surveillance activities are indeed legitimate\u2014and that China should clarify its position on them to avoid perceptions that it is trying to have things both ways....", "In its response to the Chinese vessel's presence, the USN has shown characteristic restraint. Official American policy permits surveillance operations within a nation's EEZ, provided they remain outside of that nation's 12-nautical mile territorial sea (an EEZ extends from 12 to 200 nautical miles unless this would overlap with another nations' EEZ). U.S. military statements reflect that position unambiguously....", "That consistent policy stance and accompanying restraint have characterized the U.S. attitude toward foreign surveillance activity since the Cold War. Then, the Soviets were known for sending converted fishing ships equipped with surveillance equipment to the U.S. coast, as well as foreign bases, maritime choke points, and testing sites. The U.S. was similarly restrained in 2012, when China first sent an AGI to observe RIMPAC....", "China has, then, sent a surveillance ship to observe RIMPAC in what appears to be a decidedly intentional, coordinated move\u2014and in a gesture that appears to contradict previous Chinese policy regarding surveillance and research operations (SROs). The U.S. supports universal freedom of navigation and the right to conduct SROs in international waters, including EEZs, hence its restraint when responding to the current presence of the Chinese AGI. But the PRC opposes such activities, particularly on the part of the U.S., in its own EEZ....", "How then to reconcile the RIMPAC AGI with China's stand on surveillance activities? China maintains that its current actions are fully legal, and that there is a distinct difference between its operations off Hawaii and those of foreign powers in its EEZ. The PLAN's designated point of contact declined to provide information and directed inquiries to China's Defense Ministry. In a faxed statement to Reuters, the Defense Ministry stated that Chinese vessels had the right to operate \"in waters outside of other country's territorial waters,\" and that \"China respects the rights granted under international law to relevant littoral states, and hopes that relevant countries can respect the legal rights Chinese ships have.\" It did not elaborate.", "As a recent Global Times article hinted\u2014China's position on military activities in EEZs is based on a legal reading that stresses the importance of domestic laws. According to China maritime legal specialist Isaac Kardon, China interprets the EEZ articles in the United Nations Convention on the Law of the Sea (UNCLOS) as granting a coastal state jurisdiction to enforce its domestic laws prohibiting certain military activities\u2014e.g., those that it interprets to threaten national security, economic rights, or environmental protection\u2014in its EEZ. China's domestic laws include such provisions, while those of the United States do not. Those rules would allow China to justify its seemingly contradictory approach to AGI operations\u2014or, as Kardon put it, \"to have their cake and eat it too.\" Therefore, under the Chinese interpretation of UNCLOS, its actions are neither hypocritical nor illegal\u2014yet do not justify similar surveillance against China.", "Here, noted legal scholar Jerome Cohen emphasizes, the U.S. position remains the globally dominant view\u2014\"since most nations believe the coastal state has no right to forbid surveillance in its EEZ, they do not have domestic laws that do so.\" This renders China's attempted constraints legally problematic, since \"international law is based on reciprocity.\" To explain his interpretation of Beijing's likely approach, Cohen invokes the observation that a French commentator made several decades ago in the context of discussing China's international law policy regarding domestic legal issues: \"I demand freedom from you in the name of your principles. I deny it to you in the name of mine.\"", "Based on his personal experience interacting with Chinese officials and legal experts, Kardon adds, \"China is increasingly confident that its interpretation of some key rules and\u2014most critically\u2014its practices reinforcing that interpretation can over time shape the Law of the Sea regime to suit its preferences.\"", "But China is not putting all its eggs in that basket. There are increasing indications that it is attempting to promote its EEZ approach vis-\u00e0-vis the U.S. not legally but politically. \"Beijing is shifting from rules- to relations-based objections,\" Naval War College China Maritime Studies Institute Director Peter Dutton observes. \"In this context, its surveillance operations in undisputed U.S. EEZs portend an important shift, but that does not mean that China will be more flexible in the East or South China Seas.\" The quasi-authoritative Chinese commentary that has emerged thus far supports this interpretation....", "[A recent statement from a Chinese official] suggests that Beijing will increasingly oppose U.S. SROs on the grounds that they are incompatible with the stable, cooperative Sino-American relationship that Beijing and Washington have committed to cultivating. The Obama Administration must ensure that the \"new-type Navy-to-Navy relations\" that Chinese Chief of Naval Operations Admiral Wu Shengli has advocated to his U.S. counterpart does not contain expectations that U.S. SROs will be reduced in nature, scope, or frequency....", "China's conducting military activities in a foreign EEZ implies that, under its interpretation, some such operations are indeed legal. It therefore falls to China now to clarify its stance\u2014to explain why its operations are consistent with international law, and what sets them apart from apparently similar American activities.", "If China does not explain away the apparent contradiction in a convincing fashion, it risks stirring up increased international resentment\u2014and undermining its relationship with the U.S. Beijing is currently engaging in activities very much like those it has vociferously opposed. That suggests the promotion of a double standard untenable in the international system, and very much at odds with the relationships based on reciprocity, respect, and cooperation that China purports to promote....", "If, however, China chooses to remain silent, it will likely have to accept\u2014at least tacitly, without harassing\u2014U.S. surveillance missions in its claimed EEZ. So, as we watch for clarification on Beijing's legal interpretation, it will also be important to watch for indications regarding the next SROs in China's EEZ.", "In September 2014, a Chinese surveillance ship operated in U.S. EEZ waters near Guam as it observed a joint-service U.S. military exercise called Valiant Shield. A U.S. spokesperson for the exercise stated the following: \"We'd like to reinforce that military operations in international commons and outside of territorial waters and airspace is a fundamental right that all nations have.... The Chinese were following international norms, which is completely acceptable.\"", "Appendix G. Options Suggested by Observers for Strengthening U.S. Actions", "This appendix presents a bibliography of some recent writings by observers who have suggested options (or are reporting on options suggested by others) for strengthening U.S. actions for responding to China's actions in the SCS and ECS, organized by date, beginning with the most-recent item.", "Andrew S. Erickson, \"Maritime Numbers Game, Understanding and Responding to China's Three Sea Forces,\" Indo-Pacific Defense Forum , January 28, 2019.", "James R. Holmes, \"Use It or Lose It: Seagoing Nations Must Defend Embattled Waterways,\" The Hill , January 27, 2019.", "Gregory Poling and Eric Sayers, \"Time to Make Good on the U.S.-Philippine Alliance,\" War on the Rocks , January 21, 2019.", "Gregory Poling and Bonnie S. Glaser, \"How the U.S. Can Step Up in the South China Sea,\" Foreign Affairs , January 16, 2019.", "Zack Cooper and Gregory Poling, \"America's Freedom of Navigation Operations Are Lost at Sea, Far Wider Measures Are Needed to Challenge Beijing's Maritime Aggression,\" Foreign Policy , January 8, 2019.", "Andrew S. Erickson, \"Shining a Spotlight: Revealing China's Maritime Militia to Deter its Use,\" National Interest , November 25, 2018.", "Eric Sayers, \"Assessing America's Indo-Pacific Budget Shortfall,\" War on the Rocks , November 15, 2018.", "Patrick N. Cronin and Richard Javad Heydarian, \"This Is How America and the Philippines Can Upgrade Their Alliance,\" National Interest , November 12, 2018.", "John Lee, Freedom of Navigation and East Asian Stability: Countering Beijing's Campaign of Historical Revisionism ,\" Hudson Institute, November 2018, 8 pp.", "Ryan Martinson and Peter Dutton, \"Chinese Scientists Want to Conduct Research in U.S. Waters\u2014Should Washington Let Them?\" National Interest , November 4, 2018.", "Hunter Stires, \"Understanding and Defeating China's Maritime Insurgency in the South china Sea,\" National Interest , November 1, 2018.", "Robert D. Kaplan, \"How President Trump Is Helping Beijing Win in the South China Sea,\" Washington Post , October 9, 2018.", "Tuan Pham, \"China's Worth Nightmare: RIMPAC 2020 in the South China Sea?\" National Interest , September 29, 2018.", "Patrick M. Cronin, \"China is Waging a Maritime Insurgency in the South China Sea. It's Time for the Unitd States to Counter It.\" National Interest , August 6, 2018.", "Shigeki Sakamoto, \"China's South China Sea Project Must Not Succeed; The International Community Shouldn't Quietly Let China Ignore the 2016 [Arbitral Tribunal] Decision.\" Diplomat , August 6, 2018.", "James Amedeo, \"America Needs a Clear Strategy to Counter China's Expansion in the South China Sea,\" National Interest , August 1, 2018.", "Lynn Kuok, \"Countering China's Actions in the South China Sea,\" Lawfare , August 1, 2018.", "Timothy Perry, \"Use Maritime-Law Trends to Offset Beijing's Gains in the South China Sea,\" Defense One , July 24, 2018.", "J. Michael Cole, \"It's Time to Stop China's Seaward Expansion,\" National Interest , July 21, 2018.", "Lindsey W. Ford, \"Was China's RIMPAC Exclusion An Opening or a Wasted Shot?\" East Asia Forum , July 20, 2018.", "Lynn Kuok, \"China Is Winning in the South China Sea,\" Wall Street Journal , July 17, 2018.", "\"Washington and Its Allies Need to Contain Beijing,\" Financial Times , July 1, 2018.", "Patrick M. Cronin and Melodiw Ha, \"Toward a New maritime Strategy in the South China Sea,\" The Diplomat , June 22, 2018. (A similar version was posted as: Patrick M. Cronin and Melodie Ha, \"Toward a New Maritime Strategy in the South China Sea,\" CSIS, June 21, 2018 (PacNet #42).", "Paul J. Leaf, \"Taiwan and the South China Sea Must Be Taken Off the Back Burner,\" National Interest , June 18, 2018.", "Robert E. McCoy, \"A Better Way to Repel China in the South China Sea,\" Asia Times , June 8, 2018.", "Robert Farley, \"The South China Sea Conundrum for the United States,\" The Diplomat , June 5 2018.", "Joel Gehrke, \"Marco Rubio: US Must Develop Plan to 'Destroy' Chinese Assets in South China Sea,\" Washington Examiner , June 4, 2018.", "Duncan DeAeth, \"Taiwan Should Invite US to Open Military Base on Taiping Island, Says DPP Think-Tank,\" Taiwan News , June 4, 2018.", "Julian Ku, \"It's Time for South China Sea Economic Sanctions,\" Lawfare , June 1, 2018.", "Eric Sayers, \"Time to Launch a Combined Maritime Task Force for the Pacific,\" War on the Rocks , June 1, 2018.", "Matthew Krull, \"America's Annual Naval Patrol Report and How to Fix It,\" National Interest , May 29, 2018.", "Tuan N. Pham, \"A Sign of the Times: China's Recent Actions and the Undermining of Global Rules, Pt. 3,\" CIMSEC (Center for International Maritime Security), May 24, 2018.", "Ryan D. Martinson and Andrew Erickson, \"Re-Orienting American Seapower for the China Challenge,\" War on the Rocks , May 10, 2018.", "Ben Cipperley, \"In the Era of Great Power Competition, the US Needs to Step Up Its Game,\" The Diplomat , May 8, 2018.", "Stephen Bryen, \"How to Counter China's Fortified Islands in South China Sea,\" Asia Times , May 5, 2018.", "Ely Ratner, \"Exposing China's Actions in the South China Sea,\" Council on Foreign Relations, April 6, 2018.", "Shawn Lansing, \"A White Hull Approach to Taming the Dragon: Using the Coast Guard to Counter China,\" War on the Rocks , February 22, 2018.", "Dean Cheng, \"Wanted: A Strategy to Limit China's Grand Plans for the South China Sea,\" National Interest , January 30, 2018.", "Hal Brands, \"China Hasn't Won the Pacific (Unless You Think It Has),\" Bloomberg , January 5, 2018."], "subsections": []}]}]}]}}
{"id": "R45519", "title": "The Army\u2019s Optionally Manned Fighting Vehicle (OMFV) Program: Background and Issues for Congress", "released_date": "2019-03-21T00:00:00", "summary": ["In June 2018, in part due to congressional concerns, the Army announced a new modernization strategy and designated the Next Generation Combat Vehicle (NGCV) as the program to replace the M-2 Bradley. In October 2018, Army leadership decided to redesignate the NGCV as the Optionally Manned Fighting Vehicle (OMFV) and to add additional vehicle programs to what would be called the NGCV Program.", "The M-2 Bradley, which has been in service since 1981, is an Infantry Fighting Vehicle (IFV) used to transport infantry on the battlefield and provide fire support to dismounted troops and suppress or destroy enemy fighting vehicles. Updated numerous times since its introduction, the M-2 Bradley is widely considered to have reached the technological limits of its capacity to accommodate new electronics, armor, and defense systems. Two past efforts to replace the M-2 Bradley\u2014the Future Combat System (FCS) Program and the Ground Combat Vehicle (GCV) Program\u2014were cancelled for programmatic and cost-associated reasons.", "In late 2018, the Army established Army Futures Command (AFC), intended to establish unity of command and effort while consolidating the Army's modernization process under one roof. AFC is intended to play a significant role in OMFV development and acquisition. Hoping to field the OMFV in FY2026, the Army plans to employ Section 804 Middle Tier Acquisition Authority for rapid prototyping. The Army plans to develop, in parallel, three complementary classes of Robotic Combat Vehicles (RCVs) intended to accompany the OMFV into combat both to protect the OMFV and provide additional fire support. For RCVs to be successfully developed, problems with autonomous ground navigation will need to be resolved and artificial intelligence must evolve to permit the RCVs to function as intended. The Army has stated that a new congressionally-granted acquisition authority\u2014referred to as Section 804 authority\u2014might also be used in RCV development.", "The Army requested $378 million in Research, Development, Test, and Evaluation (RDT&E) funding for the OMFV program and $109 million in RDT&E funding for the RCV in its FY2020 budget request.", "Potential issues for Congress include the following:", "How will the OMFV program avoid the same fate as the cancelled FCS and GCV programs? What is the Army Futures Command's (AFC's) role in program management? What is the relationship between the OMFV and RCVs? What are some of the benefits and concerns regarding Section 804 authority and the OMFV?"], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Why Is This Issue Important to Congress?", "paragraphs": ["The Army's Optionally Manned Fighting Vehicle (OMFV) is expected to be the third attempt to replace the M-2 Bradley Infantry Fighting Vehicle (IFV) which has been in service since the early 1980s. Despite numerous upgrades since its introduction, the Army contends the M-2 is near the end of its useful life and can no longer accommodate the types of upgrades needed for it to be effective on the modern battlefield. ", "Because the OMFV would be an important weapon system in the Army's Armored Brigade Combat Teams (ABCTs), Congress may be concerned with how the OMFV would impact the effectiveness of ground forces over the full spectrum of military operations. Moreover, Congress might also be concerned with how much more capable the OMFV is projected to be over the M-2 to ensure that it is not a costly marginal improvement over the current system. A number of past unsuccessful Army acquisition programs have served to heighten congressional oversight of Army programs, and the OMFV will likely be subject to a high degree of congressional interest. In addition to these primary concerns, how the Army plans to use the new congressionally-granted Section 804 Middle Tier Acquisition Authority as well as overall program affordability could be potential oversight issues for Congress. "], "subsections": []}, {"section_title": "The Next Generation Combat Vehicle (NGCV) Becomes the Optionally Manned Fighting Vehicle (OMFV)", "paragraphs": ["In June 2018, the Army established the Next Generation Combat Vehicle (NGCV) program to replace the M-2 Bradley Infantry Fighting Vehicle (IFV), which has been in service since the early 1980s. In October 2018, Army leadership reportedly decided to redesignate the NGCV as the Optionally Manned Fighting Vehicle (OMFV) and add additional vehicle programs to what would be called the NGCV Program. Under the new NGCV Program, the following systems are planned for development:", "The Optionally Manned Fighting Vehicle (OMFV) : the M-2 Bradley IFV replacement. The Armored Multi-Purpose Vehicle (AMPV) : the M-113 vehicle replacement. Mobile Protected Firepower (MPF) : a light tank for Infantry Brigade Combat Teams (IBCTs). Robotic Combat Vehicles (RCVs) : three versions, Light, Medium, and Heavy. The Decisive Lethality Platform (DLP) : the M-1 Abrams tank replacement.", "Two programs\u2014AMPV and MPF\u2014are in Low Rate Initial Production (LRIP) and Prototype Development, respectively. Reportedly, the AMPV and MPF programs, which were overseen by Program Executive Office (PEO) Ground Combat Systems, will continue to be overseen by PEO Ground Combat Systems, but the NGCV Cross Functional Team (CFT) will determine their respective operational requirements and acquisition schedule. "], "subsections": [{"section_title": "Report Focus on OMFV", "paragraphs": ["Because AMPV and MPF are discussed in earlier CRS reports and the OMFV is in the early stages of development, the remainder of this report focuses on the OMFV and associated RCVs. Because the DLP is intended to replace the Army's second major ground combat system\u2014the M-1 Abrams Tank\u2014it will be addressed in a separate CRS report in the future."], "subsections": []}]}, {"section_title": "Preliminary OMFV Requirements5", "paragraphs": ["The Army's preliminary basic operational requirements for the OMFV include the following: ", "Optionally manned . It must have the ability to conduct remotely controlled operations while the crew is off-platform. Capacity. It should eventually operate with no more than two crewmen and possess sufficient volume under armor to carry at least six soldiers. Transportability . Two OMFVs should be transportable by one C-17 and be ready for combat within 15 minutes. Dense urban terrain operations and mobility . Platforms should include the ability to super elevate weapons and simultaneously engage threats using main gun and an independent weapons system. Protection. It must possess requisite protection to survive on the contemporary and future battlefield. Growth. It should possess sufficient size, weight, architecture, power, and cooling for automotive and electrical purposes to meet all platform needs and allow for preplanned product improvements. Lethality. It should apply immediate, precise, and decisively lethal extended range medium-caliber, directed energy, and missile fires in day/night/all-weather conditions, while moving and/or stationary against moving and/or stationary targets. The platform should allow for mounted, dismount, and unmanned system target handover. Embedded p latform t raining . It should have embedded training systems that have interoperability with the Synthetic Training Environment. Sustainability. Industry should demonstrate innovations that achieve breakthroughs in power generation and management to obtain increased operational range and fuel efficiency, increased silent watch, part and component reliability, and significantly reduced sustainment burden.", "Additional requirements include the capacity to accommodate", "reactive armor, an Active Protection System (APS), artificial intelligence, and Directed-energy weapons and advanced target sensors."], "subsections": []}, {"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "The Army's Current Infantry Fighting Vehicle (IFV)", "paragraphs": ["The M-2 Bradley is an Infantry Fighting Vehicle (IFV) used to transport infantry on the battlefield and provide fire support to dismounted troops and suppress or destroy enemy fighting vehicles. The M-2 has a crew of three\u2014commander, gunner, and driver\u2014and carries seven fully equipped infantry soldiers. M-2 Bradley IFVs are primarily found in the Army's Armored Brigade Combat Teams (ABCT). The first M-2 prototypes were delivered to the Army in December 1978, and the first delivery of M-2s to units started in May 1981. The M-2 Bradley has been upgraded often since 1981, and the Army reportedly announced in January 2018 that it plans to undertake an upgrade to the M-2A5 version planned for the mid-2020s. "], "subsections": []}, {"section_title": "M-2 Limitations and the Need for a Replacement", "paragraphs": ["Despite numerous upgrades over its lifetime, the M-2 Bradley has what some consider a notable limitation. Although the M-2 Bradley can accommodate seven fully equipped infantry soldiers, infantry squads consist of nine soldiers. As a result, \"each mechanized [ABCT] infantry platoon has to divide three squads between four Bradleys, meaning that all the members of a squad are not able to ride in the same vehicle.\" This limitation raises both command and control and employment challenges for Bradley-mounted infantry squads and platoons.", "The M-2 Bradley first saw combat in 1991 in Operation Desert Storm, where its crews were generally satisfied with its performance. The M-2's service in 2003's Operation Iraqi Freedom (OIF) was also considered satisfactory. However, reports of vehicle and crew losses attributed to mines, improvised explosive devices (IEDs), and anti-tank rockets\u2014despite the addition of reactive armor to the M-2\u2014raised concerns about the survivability of the Bradley. ", "Furthermore, the M-2 Bradley is reportedly reaching the technological limits of its capacity to accommodate new electronics, armor, and defense systems. By some accounts, M-2 Bradleys during OIF routinely had to turn off certain electronic systems to gain enough power for anti-roadside-bomb jammers. Moreover, current efforts to mount active protection systems (APS) on M-2 Bradleys to destroy incoming anti-tank rockets and missiles are proving difficult. Given its almost four decades of service, operational limitations, demonstrated combat vulnerabilities, and difficulties in upgrading current models, the M-2 Bradley is arguably a candidate for replacement."], "subsections": []}, {"section_title": "Past Attempts to Replace the M-2 Bradley IFV", "paragraphs": ["The Army has twice attempted to replace the M-2 Bradley IFV\u2014first as part of the Future Combat System (FCS) Program, which was cancelled by the Secretary of Defense in 2009, and second with the Ground Combat Vehicle (GCV) Program, cancelled by the Secretary of Defense in 2014. These cancellations, along with a series of high-profile studies, such as the 2011 Decker-Wagner Army Acquisition Review, have led many to call into question the Army's ability to develop and field ground combat systems. "], "subsections": []}, {"section_title": "Why the FCS and GCV Programs Were Cancelled", "paragraphs": [], "subsections": [{"section_title": "FCS", "paragraphs": ["Introduced in 1999 by Army Chief of Staff General Eric Shinseki, FCS was envisioned as a family of networked, manned and unmanned vehicles, and aircraft for the future battlefield. The Army believed that advanced sensor technology would result in total battlefield awareness, permitting the development of lesser-armored combat vehicles and the ability to engage and destroy targets beyond the line-of-sight. However, a variety of factors led to the program's cancellation, including a complicated, industry-led management approach; the failure of a number of critical technologies to perform as envisioned; and frequently changing requirements from Army leadership\u2014all of which resulted in program costs increasing by 25%. After $21.4 billion already spent and the program only in the preproduction phase, then Secretary Gates restructured the program in 2009, effectively cancelling it."], "subsections": []}, {"section_title": "GCV23", "paragraphs": ["Recognizing the need to replace the M-2 Bradley, as part of the FCS \"restructuring,\" the Army was directed by the Secretary of Defense in 2009 to develop a ground combat vehicle (GCV) that would be relevant across the entire spectrum of Army operations, incorporating combat lessons learned in Iraq and Afghanistan. In 2010, the Army, in conjunction with the Pentagon's acquisition office, conducted a review of the GCV program to \"review GCV core elements including acquisition strategy, vehicle capabilities, operational needs, program schedule, cost performance, and technological specifications.\" This review found that the GCV relied on too many immature technologies, had too many performance requirements, and was required by Army leadership to have too many capabilities to make it affordable. In February 2014, the Army recommended terminating the GCV program and redirecting the funds toward developing a next-generation platform. The cost of GCV cancellation was estimated at $1.5 billion. "], "subsections": []}]}]}, {"section_title": "After the Ground Combat Vehicle (GCV): The Next Generation Combat Vehicle (NGCV) Program", "paragraphs": ["In the aftermath of the GCV program, the Army embarked on a Future Fighting Vehicle (FFV) effort in 2015. Army officials\u2014described as \"cautious\" and \"in no hurry to initiate an infantry fighting vehicle program\"\u2014instead initiated industry studies to \"understand the trade space before leaping into a new program.\" In general, Army combat vehicle modernization efforts post-FCS have been characterized as upgrading existing platforms as opposed to developing new systems. This was due in part to reluctance of senior Army leadership, but also to significant budgetary restrictions imposed on the Army during this period. Some in Congress, however, were not pleased with the slow pace of Army modernization, reportedly noting the Army was \"woefully behind on modernization\" and was \"essentially organized and equipped as it was in the 1980s.\" In June 2018, in part due to congressional concerns, the Army announced a new modernization strategy and designated NGCVs as the second of its six modernization priorities. Originally, the NGCV was considered the program to replace the M-2 Bradley. Development of the NGCV would be managed by the Program Executive Officer (PEO) Ground Combat Systems, under the Assistant Secretary of the Army (ASA), Acquisition, Logistics, and Technology (ALT)."], "subsections": []}, {"section_title": "Army Futures Command (AFC) and Cross-Functional Teams (CFTs)", "paragraphs": [], "subsections": [{"section_title": "Army Futures Command29", "paragraphs": ["In November 2017, the Army established a Modernization Task Force to examine the options for establishing an Army Futures Command (AFC) that would establish unity of command and effort as the Army consolidated its modernization process under one roof. Formerly, Army modernization activities were primarily spread among Forces Command (FORSCOM), Training and Doctrine Command (TRADOC), Army Materiel Command (AMC), Army Test and Evaluation Command (ATEC), and the Army Deputy Chief of Staff G-8. Intended to be a 4-star headquarters largely drawn from existing Army commands, AFC was planned to be established in an urban environment with ready access to academic, technological, and industrial expertise. On July 13, 2018, the Army announced that AFC would be headquartered in Austin, TX, and that it had achieved initial operating capability on July 1, 2018. According to the Army, when AFC reaches full operating capacity in summer 2019, the headquarters will comprise approximately 500 personnel (about 100 uniformed and 400 Army civilians). Sub-organizations, many of which currently reside within FORSCOM, TRADOC, and AMC, are to transition to AFC, but there are no plans to physically move units or personnel from these commands at the present time."], "subsections": []}, {"section_title": "Cross-Functional Teams (CFTs)", "paragraphs": ["Army Futures Command intends to use what it calls Cross-Functional Teams (CFT) as part of its mission, which includes the development of NGCV. As a means to \"increase the efficiency of its requirements and technology development efforts, the Army established cross-functional team pilots for modernization\" in October 2017. These CFTs are intended to", "leverage expertise from industry and academia; identify ways to use experimentation, prototyping, and demonstrations; and Identify opportunities to improve the efficiency of requirements development and the overall defense systems acquisition process.", "The eight CFTs are", "Long Range Precision Fires at Ft. Sill, OK; Next Generation Combat Vehicle at Detroit Arsenal, MI; Future Vertical Lift at Redstone Arsenal, AL; Network Command, Control, Communication, and Intelligence at Aberdeen Proving Ground, MD; Assured Positioning, Navigation and Timing at Redstone Arsenal, AL; Air and Missile Defense at Ft. Sill, OK; Soldier Lethality at Ft. Benning, GA; and Synthetic Training Environment in Orlando, FL.", "CFTs are to be a part of AFC. Regarding the NGCV, program acquisition authority is derived from Assistant Secretary of the Army (ASA) for Acquisition, Logistics, and Technology (ALT), who is also the senior Army Acquisition Executive (AAE), to whom the Program Executive Officers (PEOs) report. AFC is to be responsible for requirements and to support PEOs. The NGCV Program Manager (PM), who is subordinate to PEO Ground Combat Systems, is to remain under the control of ASA (ALT) but are to be teamed with CFTs under control of the AFC. The Government Accountability Office (GAO) notes, however", "Army Futures Command has not yet established policies and procedures detailing how it will execute its assigned mission, roles, and responsibilities. For example, we found that it is not yet clear how Army Futures Command will coordinate its responsibilities with existing acquisition organizations within the Army that do not directly report to it. One such organization is the Office of the Assistant Secretary of the Army for Acquisition, Logistics and Technology [ASA (ALT)]\u2014the civilian authority responsible for the overall supervision of acquisition matters for the Army\u2014and the acquisition offices it oversees. ", "The Army's explanation of how the NGCV program is to be administered and managed, along with GAO's findings regarding AFC not yet having established policies and procedures, suggests a current degree of uncertainty as to how the NGCV program will be managed."], "subsections": []}]}, {"section_title": "Army's OMFV Acquisition Approach36", "paragraphs": [" Figure 1 depicts the Department of Defense (DOD) Systems Acquisition Framework, which illustrates the various phases of systems development and acquisitions and is applicable to the procurement of Army ground combat systems."], "subsections": [{"section_title": "Original OMFV Acquisition Plan", "paragraphs": ["Reportedly, the original OMFV plan called for five years of Technology Development, starting in FY2019, and leading up to a FY2024 Milestone B decision to move the program into the Engineering and Manufacturing Development phase. If the Engineering and Manufacturing Development phase proved successful, the Army planned for a Milestone C decision to move the program into the Production and Deployment phase in FY2028, with the intent of equipping the first unit by FY2032."], "subsections": []}, {"section_title": "Secretary of the Army Accelerates the Program", "paragraphs": ["In April 2018, Secretary of the Army Mark Esper, noting that industry could deliver OMFV prototypes by FY2021, reportedly stated he wanted to accelerate the OMFV timeline. After examining a number of possible courses of action, the Army reportedly settled on a timeline that would result in an FY2026 fielding of the OMFV. This being the case, the Army reportedly will pursue a \"heavily modified off-the-shelf model meaning a mature chassis and turret integrated with new sensors.\" Unofficially, some Army officials suggested they would like to see a 50 mm cannon on industry-proposed vehicles. Under this new acquisition approach, the Army plans to", "award up to two vendors three-year Engineering and Manufacturing Development (EMD) contracts in the first quarter of FY2020; if EMD is successful, make a Milestone C decision to move the program into the Production and Development phase in the third quarter of FY2023; and Equip first units in the first quarter of FY2026."], "subsections": []}, {"section_title": "Potential OMFV Candidates", "paragraphs": ["Reportedly, the Army plans eventually to award a production contract for up to 3,590 OMFVs to a single vendor. Although the Army reportedly expects five to seven vendors to compete for the OMFV EMD contract, three vendors have already showcased prospective platforms."], "subsections": [{"section_title": "BAE Systems", "paragraphs": ["BAE Systems is proposing its fifth-generation CV-90. The CV-90 was first fielded in Europe in the 1990s. The latest version mounts a 35 mm cannon provided by Northrop Grumman that can accommodate 50 mm munitions. The CV-90 also features the Israeli IMI Systems Iron Fist active protection system (APS), which is currently being tested on the M-2 Bradley. The CV-90 can accommodate a three-person crew and five infantry soldiers."], "subsections": []}, {"section_title": "General Dynamics Land Systems (GDLS)", "paragraphs": ["GDLS is proposing its Griffin III technology demonstrator, which uses the British Ajax scout vehicle chassis. The Griffin III mounts a 50 mm cannon and can accommodate an APS and host unmanned aerial vehicles (UAVs). The Griffin II can accommodate a two-person crew and six infantry soldiers."], "subsections": []}, {"section_title": "Raytheon/Rheinmetall", "paragraphs": ["Raytheon/Rheinmetall is proposing its Lynx vehicle. It can mount a 50 mm cannon and thermal sights, and can accommodate both APS and UAVs. Raytheon states that the Lynx can accommodate an entire nine-soldier infantry squad. "], "subsections": []}]}]}, {"section_title": "Robotic Combat Vehicles (RCVs) and the OMFV", "paragraphs": ["As part of the revised NGCV Program, the Army plans to develop three RCV variants: Light, Medium, and Heavy. The Army reportedly envisions employing RCVs as \"scouts\" and \"escorts\" for manned OMFVs. RCVs could precede OMFVs into battle to deter ambushes and could be used to guard the flanks of OMFV formations. Initially, RCVs would be controlled by operators riding in NGCVs, but the Army hopes that improved ground navigation technology and artificial intelligence will permit a single operator to control multiple RCVs. The following sections provide a brief overview of each variant."], "subsections": [{"section_title": "Robotic Combat Vehicle\u2013Light (RCV\u2013L)", "paragraphs": ["The RCV\u2013L is to be less than 10 tons, with a single vehicle capable of being transported by rotary wing assets. It should be able to accommodate an anti-tank guided missile (ATGM) or a recoilless weapon. It is also expected to have a robust sensor package and be capable of integration with UAVs. The RCV\u2013L is considered to be \"expendable.\" "], "subsections": []}, {"section_title": "Robotic Combat Vehicle\u2013Medium (RCV\u2013M)", "paragraphs": ["The RCV\u2013M is to be between 10 to 20 tons, with a single vehicle capable of being transported by a C-130 aircraft. It should be able to accommodate multiple ATGMs, a medium cannon, or a large recoilless cannon. It is also expected to have a robust sensor package and be capable of integration with UAVs. The RCV\u2013M is considered to be a \"durable\" system and more survivable than the RCV\u2013L."], "subsections": []}, {"section_title": "Robotic Combat Vehicle\u2013Heavy (RCV\u2013H)", "paragraphs": ["The RC\u2013H is to be between 20 to 30 tons, with two vehicles capable of being transported by a C-17 aircraft. It is also expected to be able to accommodate an onboard weapon system capable of destroying enemy IFVs and tanks. It should also have a robust sensor package and be capable of integration with UAVs. The RCV\u2013H is considered to be a \"nonexpendable\" system and more survivable than the other RCVs."], "subsections": []}, {"section_title": "RCV Acquisition Approach", "paragraphs": ["Reportedly, the Army does not have a formal acquisition approach for the RCV, but it plans to experiment from FY2020 to FY2023 with human interface devices and reconnaissance and lethality technologies. Reportedly, the Army plans to issue prototype contracts in November 2019. Depending on the outcome of experimentation with prototypes, the Army expects a procurement decision in FY2023."], "subsections": []}]}, {"section_title": "OMFV, RCV, and Section 804 Middle Tier Acquisition Authority", "paragraphs": ["Section 804 of the National Defense Authorization Act for FY2016 ( P.L. 114-92 ) provides authority to the Department of Defense (DOD) to rapidly prototype and/or rapidly field capabilities outside the traditional acquisition system. Referred to as \"804 Authority,\" it is intended to deliver a prototype capability in two to five years under two distinct pathways: Rapid Prototyping or Rapid Fielding. One of the benefits of using 804 Authority is that the services can bypass the Joint Requirements Oversight Council (JROC) and the Joint Capabilities Integration Development Systems (JCIDS), two oversight bodies that, according to some critics, slow the acquisition process. Under Rapid Prototyping, the objectives are to", "field a prototype that can be demonstrated in an operational environment, and Provide for residual operational capability within five years of an approved requirement.", "Under Rapid Fielding, the objectives are to", "begin production within six months, and Complete fielding within five years of an approved requirement.", "For the OMFV program, the Army reportedly plans to use Rapid Prototyping under Section 804 to permit the program to enter at the EMD Phase, thereby avoiding a two- to three-year Technical Maturation Phase. Regarding the RCV program, the Army's Robotic Campaign Plan indicates that Section 804 authority is an \"option\" for RCV development. "], "subsections": [{"section_title": "Concerns with Section 804 Authority", "paragraphs": ["While many in DOD have embraced the use of Section 804 authority, some have expressed concerns. Supporters of Section 804 authority contend that provides \"an alternative path for systems that can be fielded within five years or use proven technologies to upgrade existing systems while bypassing typical oversight bodies that are said to slow the acquisition process.\" Critics, however, argue that \"new rapid prototyping authorities won't eliminate the complexities of technology development.\" One former Under Secretary of Defense for Acquisition, Technology, and Logistics, Frank Kendall, reportedly warns", "What determines how long a development program takes is the product. Complexity and technical difficulty drive schedule. That can't be wished away. Requirements set by operators drive both complexity and technical difficulty. You have to begin there. It is possible to build some kinds of prototypes quickly if requirements are reduced and designs are simplified. Whether an operator will want that product is another question. It's also possible to set totally unrealistic schedules and get industry to bid on them. There is a great deal of history that teaches us that this is a really bad idea.", "Others contend that for this authority to work as intended, \"maintaining visibility of 804 prototyping would be vital to ensure the authority is properly used\" and that \"developing a data collection and analytical process will enable DOD to have insight into how these projects are being managed and executed.\" In this regard, congressional oversight of programs employing Section 804 authority could prove essential to ensuring a proper and prudent use of this congressionally authorized authority. "], "subsections": []}]}, {"section_title": "FY2020 OMFV and RCV Budget Request62", "paragraphs": ["The Army requested $378 million in Research, Development, Test, and Evaluation (RDT&E) funding for the OMFV program and $109 million in RDT&E funding for the RCV in its FY2020 budget request. In terms of the OMFV, funding is planned to be used for, among other things, maturing technological upgrades for integration into the vehicle, including nondevelopmental active protection systems (APS), the XM 913 50 mm cannon, and the 3 rd Generation Forward Looking Infrared Radar (FLIR). FY2020 funding for RCVs is planned for finishing building prototypes of surrogate platforms and conducting manned-unmanned teaming evaluations. "], "subsections": []}, {"section_title": "Potential Issues for Congress", "paragraphs": [], "subsections": [{"section_title": "How Will the OMFV Program Avoid the Same Fate as the Cancelled FCS and GCV Programs?", "paragraphs": ["The OMFV is expected to be the Army's third attempt to replace the M-2 Bradley IFV after two costly previous attempts were cancelled, perhaps casting doubt on the Army's ability to design and field major ground combat systems. While many factors contributed to the cancelled FCS and GCV programs, two common problems were (1) overreliance on too many immature technologies, as well as the failure of some critical technologies, and (2) frequently changing performance requirements from Army leadership, resulting in increased program costs. Although the Army suggests that an emphasis on prototyping and the creation of the Army Futures Command (AFC) may remedy such problems, it can be argued these remedies are, at best, too general and lack specific measures necessary to ensure that past problems do not recur. To enhance program oversight and avoid potential problems in the OMFV program, Congress might consider requiring the Army to articulate the specific measures it will employ to mitigate technological challenges and leadership-generated \"requirements creep.\" In terms of requirements, it may be beneficial to have answers to the following questions:", "Who in the Army will have input into OMFV performance requirements? Who in the Army adjudicates the inputs for OMFV performance requirements? Who in the Army will be responsible for the final decision on OMFV performance requirements?", "Understanding these standards could help policymakers conduct oversight in terms of overall OMFV program accountability, especially if requirements change over the lifecycle of the program."], "subsections": []}, {"section_title": "Army Futures Command's (AFC's) Role in OMFV and RCV Program Management", "paragraphs": ["One of the reasons cited for the failure of the FCS program was a \"complicated program management approach.\" Program management of major defense systems typically involves a number of organizations and multiple authorities and processes. Even by those standards, however, program management of the OMFV and RCV programs is arguably overly complicated and somewhat ill-defined (see pages 6-7). Determining AFC's role in OMFV and RCV program management, and how it will relate to the ASA (ALT) and PEO Ground Combat Systems and other organizations, may be a work in progress; however, at some point, having a clearly established management structure with agreed authorities and responsibilities is likely to be essential for ultimate program success. Toward this end, Congress might consider examining, in detail, the Army's proposed program management structure and authorities and processes for OMFV and RCV to help ensure that program management will be efficient and effective, and not a programmatic detriment (as it was in the case of the FCS). "], "subsections": []}, {"section_title": "The Relationship Between the OMFV and RCVs", "paragraphs": ["As previously noted, the Army envisions employing RCVs as \"scouts\" and \"escorts\" for manned OMFVs. In addition to enhancing OMFV survivability, RCVs could potentially increase the overall lethality of ABCTs. Army leadership has stated that the Army's first priority is replacing the Bradley with the OMFV, that the RCV will mature on a longer timeline than the OMFV, and that the OMFV will later be joined by the RCV. ", "Given technological challenges, particularly autonomous ground navigation and artificial intelligence improvement, the Army's vision for RCV may not be achievable by the planned FY2026 fielding date or for many years thereafter. The Army describes the OMFV and RCV as \"complementary\" systems, but a more nuanced description of both the systematic and operational relationship between the two could be beneficial. While the OMFV appears to offer a significant improvement over the M-2 Bradley\u2014given weapon systems technological advances by potential adversaries\u2014operating alone without accompanying RCVs, the OMFV may offer little or marginal operational improvement over the M-2 Bradley. Recognizing the risks associated with a scenario where RCV fielding is significantly delayed or postponed due to technological challenges\u2014along with a better understanding of the systematic and operational relationship between the OMFV and the RCV\u2014could prove useful for policymakers. Another potential oversight question for Congress could be what is the role of Army Futures Command (AFC) in integrating requirements between OMFV and RCVs?"], "subsections": []}, {"section_title": "Section 804 Authority and the OMFV", "paragraphs": ["To some, the use of Section 804 authority offers great promise in developing and fielding qualifying weapon systems quickly and cost-effectively. Others note that rapid prototyping authorities under Section 804 will not eliminate the complexities of technology development and that operational requirements also drive the complexity and technical difficulty of a project. In acknowledging the potential benefits that Section 804 authority could bring to the Army's third attempt to replace the M-2 Bradley, as well as the risks associated with its use over a more traditional acquisition approach, policymakers might decide to examine the potential costs, benefits, and risks associated with using Section 804 authority for the OMFV program. "], "subsections": []}]}]}}
{"id": "RL31734", "title": "Federal Disaster Assistance Response and Recovery Programs: Brief Summaries", "released_date": "2019-04-25T00:00:00", "summary": ["This report is designed to assist Members of Congress and their staff as they address the needs of their states, communities, and constituents after a disaster. It includes a summary of federal programs that provide federal disaster assistance to individual survivors, states, territories, local governments, and nongovernmental entities following a natural or man-made disaster. A number of federal agencies provide financial assistance through grants, loans, and loan guarantees to assist in the provision of critical services, such as temporary housing, counseling, and infrastructure repair.", "The programs summarized in this report fall into two broad categories. First, there are programs specifically authorized for use during situations occurring because of a disaster. Most of these programs are administered by the Federal Emergency Management Agency (FEMA). Second are general assistance programs that in some instances may be used either in disaster situations or to meet other needs unrelated to a disaster. Many federal agencies, including the Departments of Health and Human Services (HHS) and Housing and Urban Development (HUD), administer programs that may be included in the second category.", "The programs in the report are primarily organized by recipient: individuals, state and local governments, nongovernmental entities, or businesses. These programs address a variety of short-term needs, such as food and shelter, and long-term needs, such as the repair of public utilities and public infrastructure.", "The report also includes a list of Congressional Research Service (CRS) reports on disaster assistance as well as relevant federal agency websites that provide information on disaster responses, updates on recovery efforts, and resources on federal assistance programs.", "This report will be updated as significant legislative or administrative changes occur."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Federal agencies provide a range of assistance to individual survivors; state, territorial, and local governments; and nongovernmental entities after major disasters, including natural disasters and terrorist attacks. Types of aid can include, but are not limited to, operational, logistical, and technical support; financial assistance through grants, loans, and loan guarantees; and the provision of federally owned equipment and facilities. ", "Many, but not all, programs are available after the President issues a major disaster declaration pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) authority. More limited aid is available under a Stafford Act emergency declaration, a declaration issued by a department or agency head, or on an as needed basis.", "This report only identifies programs frequently used to provide financial assistance in the disaster response and recovery process. It provides brief descriptive information to help congressional offices determine which programs merit further consideration in the planning, organization, or execution of the disaster response and recovery process. ", "Most of the programs listed here are authorized as assistance programs and are listed at the General Services Administration (GSA) website beta.SAM.gov. The list does not include operational or technical assistance that some agencies provide in emergency or disaster situations. It is also not inclusive of all forms of financial disaster assistance that may be available to every jurisdiction in every circumstance, as unique factors often trigger unique forms of assistance. Congress may, and frequently has, authorized specific forms of financial assistance on a limited basis following particular disasters."], "subsections": [{"section_title": "Program Selection Criteria", "paragraphs": ["Programs discussed in this report satisfy one or more of the following criteria:", "Congress expressly designated the program to provide financial assistance for disaster relief or recovery. The program is applicable to most disaster situations, even if not specifically authorized for that purpose. The Federal Emergency Management Agency (FEMA) and other federal agencies have frequently used the program to provide financial assistance. The program is potentially useful for addressing short-term and long-term recovery needs (e.g., assistance with processing survivor benefits or repair of public facilities).", "Most of the programs listed in this report are specifically authorized for use during situations occurring because of a disaster. General assistance programs that may apply to disaster situations are described at the end of the report (see \" General Assistance Programs \").", "As Congress and the Administration respond to domestic needs arising from major disasters, some conditions of these programs may be changed. For the most up-to-date information on a particular program, please contact the CRS analyst or department or agency program officers listed in the report."], "subsections": []}]}, {"section_title": "Federal Disaster Recovery Programs", "paragraphs": [], "subsections": [{"section_title": "Assistance for Individuals and Families", "paragraphs": [], "subsections": [{"section_title": "Individuals and Households Program", "paragraphs": ["The Individuals and Households Program (IHP) is the primary vehicle for FEMA assistance to individuals and households after the President issues an emergency or major disaster declaration, when authorized. It is intended to meet basic needs and support recovery efforts, but it cannot compensate disaster survivors for all losses. Congress appropriates money for the IHP (and most other aid authorized by the Stafford Act) to the Disaster Relief Fund. ", "IHP assistance is available in the form of financial and direct assistance to eligible individuals and households who, as a result of a disaster, have uninsured or under-insured necessary expenses and serious needs that cannot be met through other means or forms of assistance. Program funds have a wide range of eligible uses, including different forms of temporary housing assistance; housing repairs; housing replacement; and permanent housing construction. IHP funds may also be used for other needs assistance (ONA), including funeral, medical, dental, childcare, personal property, transportation, and other expenses.", "FEMA provides 100% of the housing assistance costs, but ONA is subject to a 75% federal and 25% state cost share. In addition, there is a limitation on the amount of financial assistance an individual or household may receive, with financial assistance including assistance to reimburse temporary lodging expenses; rent for alternate housing accommodations; home repairs and replacement; as well as ONA. ", "Financial assistance for repairs and replacement may not exceed $34,900 (FY2019). Separately, financial assistance for ONA may not exceed $34,900 (FY2019). Financial assistance to rent alternate housing accommodations under Section 408 (c)(1)(A)(i) of the Stafford Act, however, is excluded from the cap. ", "The maximum amount of financial assistance is adjusted annually to reflect changes in the Consumer Price Index. IHP assistance is intended to be temporary and is generally limited to a period of 18 months from the date of the declaration, but may be extended by FEMA. (Also see \" Physical Disaster Loans\u2014Residential SBA Disaster Loans Available to Homeowners and Renters \" below for additional assistance for homeowners and renters.)", "Agency : Federal Emergency Management Agency Authority : 42 U.S.C. \u00a75174 Regulation : 44 C.F.R. \u00a7\u00a7206.110\u2013206.120 Phone : Office of Congressional Affairs, 202-646-4500 Website : https://www.fema.gov/media-library/assets/documents/24945 CFDA Program Numbers : 97.048 and 97.050 CRS Contact : Elizabeth Webster, 202-707-9197 "], "subsections": []}, {"section_title": "Disaster Unemployment Assistance", "paragraphs": ["Disaster Unemployment Assistance (DUA) provides benefits to previously employed or self-employed individuals rendered jobless as a direct result of a major disaster and who are not eligible for regular federal or state unemployment compensation (UC). In certain cases, individuals who have no work history or are unable to work may also be eligible for DUA benefits. DUA is federally funded through FEMA, but is administered by the Department of Labor and state UC agencies. ", "In general, individuals must apply for benefits within 30 days after the date the state announces availability of DUA benefits. When applicants have good cause, they may file claims after the 30-day deadline. This deadline may be extended; however, initial applications filed after the 26 th week following the declaration date will not be considered. When a reasonable comparative earnings history can be constructed, DUA benefits are determined in a similar manner to regular state UC benefit rules. The minimum weekly DUA benefit is required to be half of the average weekly UC benefit for the state where the disaster occurred. DUA assistance is available to eligible individuals as long as the major disaster continues, but no longer than 26 weeks after the disaster declaration. ", "For more information, see CRS Report RS22022, Disaster Unemployment Assistance (DUA) , by Julie M. Whittaker.", "Agency: Department of Labor, Employment and Training Administration Authority: 42 U.S.C. \u00a75177 Regulation: 20 C.F.R. \u00a7625; 44 C.F.R. \u00a7206.141 Contact: See listings of resources by state , https://www.careeronestop.org/localhelp/unemploymentbenefits/unemployment-benefits.aspx Website: http://ows.doleta.gov/unemploy/disaster.asp CFDA Program Number : 97.034 CRS Contact: Julie Whittaker, 202-707-2587"], "subsections": []}, {"section_title": "Dislocated Worker Activities", "paragraphs": ["The dislocated worker program helps fund training and related assistance to persons who have lost their jobs and are unlikely to return to their current jobs or industries. Of the funds appropriated, 80% are allotted by formula grants to states and local entities and 20% are reserved by the Secretary of Labor to fund a national reserve that supports national dislocated worker grants to states or local ent ities. One type of national emergency grant is Disaster Relief Employment Assistance, under which funds can be made available to states to employ dislocated workers in temporary jobs involving recovery after a national emergency. An individual may be employed for up to 12 months. There are no matching requirements for Workforce Innovation and Opportunity Act (WIOA) programs.", "Agency: Department of Labor, Employment and Training Administration Authority: 29 U.S.C. \u00a73225 Regulation: 20 C.F.R. \u00a7671 Contact: See listings of state Dislocated Worker/Rapid Response Coordinators at http://www.doleta.gov/layoff/rapid_coord.cfm Website: https://www.doleta.gov/DWGs/eta_default.cfm CFDA Program Number : 17.278 CRS Contact: David H. Bradley, 202-707-7352"], "subsections": []}, {"section_title": "Physical Disaster Loans\u2014Residential SBA Disaster Loans Available to Homeowners and Renters", "paragraphs": ["The majority of disaster loans provided by the Small Business Administration (SBA), approximately 80%, are made available to individuals and households. SBA disaster assistance is provided in the form of loans, not grants, and therefore must be repaid to the federal government. Homeowners, renters, and personal property owners located in a declared disaster area (and in contiguous counties) may apply to the SBA for loans to help recover losses from the disaster. ", "SBA's Home Disaster Loan Program falls into two categories: personal property loans and real property loans. These loans cover only uninsured or underinsured property and primary residences. Loan maturities may be up to 30 years."], "subsections": [{"section_title": "Personal Property Loans", "paragraphs": ["A personal property loan provides a creditworthy homeowner or renter with up to $40,000 to repair or replace personal property items, such as furniture, clothing, or automobiles, damaged or lost in a disaster. These loans cover only uninsured or underinsured property and primary residences and cannot be used to replace extraordinarily expensive or irreplaceable items, such as antiques, recreational vehicles, or furs."], "subsections": []}, {"section_title": "Real Property Loans", "paragraphs": ["A creditworthy homeowner may apply for a \"real property loan\" of up to $200,000 to repair or restore the homeowner's primary residence to its predisaster condition. The loans may not be used to upgrade homes or build additions, unless upgrades or changes are required by city or county building codes. A real property loan may be increased by 20% for repairs to protect the damaged property from a similar disaster in the future.", "Agency: Small Business Administration Authority: 15 U.S.C. \u00a7636(b) Regulation: 13 C.F.R. \u00a7\u00a7123.200\u2013123.204 Contact : Office of Congressional and Legislative Affairs, 202-205-6700 Website : https://disasterloan.sba.gov/ela/Information/TypesOfLoans CFDA Program Number : 59.008 CRS Contact : Bruce R. Lindsay, 202-707-3752"], "subsections": []}]}, {"section_title": "Cora Brown Fund", "paragraphs": ["This unique fund directs payments to individuals and groups for disaster-related needs that have not been or will not be met by government agencies or other organizations. A disaster survivor will normally receive no more than $2,000 from this fund in any one declared disaster unless the Assistant Administrator for the Disaster Assistance Directorate determines that a larger amount is in the best interest of the disaster victim and the federal government. There is no matching requirement for this program and no limitation on the time period in which assistance is available.", "Agency: Federal Emergency Management Agency Authority: 42 U.S.C. \u00a75121 et seq. Regulation: 44 C.F.R. \u00a7206.181 Contact : Office of Congressional Affairs, 202-646-4500 Website : http://www.fema.gov/library/viewRecord.do?id=5037 CRS Contact: Bruce R. Lindsay, 202-707-3752 "], "subsections": []}, {"section_title": "Crisis Counseling", "paragraphs": ["This program provides grants that enable states to offer crisis counseling services, when required, to victims of a federally declared major disaster for the purpose of relieving mental health problems caused or aggravated by the disaster or its aftermath. Assistance is short-term and community-oriented. Cost-share requirements are not imposed on this assistance. The regulations specify that program funding generally ends after nine months, but time extensions may be approved if requested by the state and approved by federal officials.", "Agency: Federal Emergency Management Agency Authority: 42 U.S.C. \u00a75183 Regulation: 44 C.F.R. \u00a7206.171 Contact : Office of Congressional Affairs, 202-646-4500 Website: https://www.fema.gov/recovery-directorate/crisis-counseling-assistance-training-program CFDA Pr ogram Number : 97.032 CRS Contact: Sarah A. Lister, 202-707-7320"], "subsections": []}, {"section_title": "Disaster Legal Services", "paragraphs": ["Disaster Legal Services (DLS) are provided for free to low-income individuals who require them as a result of a major disaster, and the provision of services is \"confined to the securing of benefits under the [Stafford] Act and claims arising out of a major disaster.\" Assistance may include help with insurance claims, drawing up new wills and other legal documents lost in the disaster, help with home repair contracts and contractors, and appeals of FEMA decisions. Neither the statute nor the regulations establish cost-share requirements or time limitations for DLS.", "Agency: Federal Emergency Management Agency Authority: 42 U.S.C. \u00a75182 Regulation: 44 C.F.R. \u00a7206.164 Contact : Office of Congressional Affairs, 202-646-4500 Website: https://www.fema.gov/media-library/assets/documents/24413 CFDA Program Number : 97.033 CRS Contact: Elizabeth Webster, 202-707-9197"], "subsections": []}, {"section_title": "Disaster Case Management", "paragraphs": ["The Disaster Case Management (DCM) program partners case managers and disaster survivors to develop and implement Disaster Recovery Plans to address unmet needs. The DCM program is authorized under the Stafford Act. Following a presidentially declared major disaster that includes Individual Assistance (IA), the governor or tribal executive may request a grant to use DCM providers to supply services to survivors with long-term, disaster-caused unmet needs. The program is time-limited, and it shall not exceed 24 months from the date of the presidential major disaster declaration.", "Agency: Federal Emergency Management Agency Authority: 42 U.S.C. \u00a75189d Contact: Office of Congressional Affairs, 202-646-4500 Website: https://www.fema.gov/media-library/assets/documents/101292 CFDA Program Number : 97.088 CRS Contact: Elizabeth Webster, 202-707-9197"], "subsections": []}, {"section_title": "Tax Relief", "paragraphs": ["The Internal Revenue Code (IRC) includes tax relief provisions that apply to individuals and businesses affected by federally declared disasters, and the following are some examples. Individuals located in affected areas are allowed extra time (four years instead of the general two) to replace homes due to involuntary conversion (e.g., destruction from wind or floods, theft, or property ordered to be demolished) and still defer any gain. Taxpayers may also be able to deduct personal casualty losses attributable to federally declared disasters, subject to certain limitations. Qualifying disaster relief payments received by affected individuals are not subject to tax. The Internal Revenue Service also has the authority to provide some relief, including the extension of tax filing deadlines. ", "In addition to these and other permanent tax relief provisions, special temporary provisions have been enacted for certain disasters. The 2017 tax revision ( P.L. 115-97 ) provided tax relief related to 2016 and 2017 disasters. These measures were expanded to cover the California wildfires in the Bipartisan Budget Act of 2018 ( P.L. 115-123 ).", "Agency : Internal Revenue Service Authority : Various provisions throughout the Internal Revenue Code, Title 26 U.S.C., including \u00a7\u00a7123, 139, 165, 402, 408, 1033, 6654, 7508A Regulation : No specific regulation Contact : Congressional Liaison, 202-317-6985 Website : http://www.irs.gov/uac/Tax-Relief-in-Disaster-Situations CRS Contact s : Molly Sherlock, 202-707-7797"], "subsections": []}]}, {"section_title": "Assistance for State, Territorial, and Local Governments", "paragraphs": [], "subsections": [{"section_title": "Public Assistance Grants", "paragraphs": ["Authorized by multiple sections of the Stafford Act, the Public Assistance (PA) Grant Program is FEMA's primary form of financial assistance for state and local governments. The PA Program provides grant assistance for many eligible purposes, including the following:", "Emergency work, as authorized by Sections 403, 407, and 502 of the Stafford Act, which provide for the removal of debris and emergency protective measures, such as the establishment of temporary shelters and emergency power generation. Permanent work, as authorized by Section 406, which provides for the repair, replacement, or restoration of disaster-damaged, publicly owned facilities and the facilities of certain private nonprofit organizations (PNPs). At its discretion, FEMA may provide assistance for hazard mitigation measures that are not required by applicable codes and standards. As a condition of PA assistance, applicants must obtain and maintain insurance on their facilities for similar future disasters. Management costs, as authorized by Section 324, which reimburses some of the applicant's administrative expenses incurred managing the totality of the PA Program's projects and grants. ", "PNPs are generally eligible for permanent work assistance if they provide a governmental type of service, though PNPs not providing a \"critical\" service must first apply to the SBA for loan assistance for facility projects.", "The federal government provides a minimum of 75% of the cost of eligible assistance, and this cost share can rise if certain criteria are met. Funding for the PA Program comes through discretionary appropriations to the Disaster Relief Fund. ", "Agency: Federal Emergency Management Agency Authority: 42 U.S.C. \u00a7\u00a75170b, 5172, 5173, 5189f, 5192 Regulation: 44 C.F.R. \u00a7206, subparts G, H, I Contact : Office of Congressional Affairs, 202-646-4500 Website: http://www.fema.gov/public-assistance-local-state-tribal-and-non-profit CFDA Program Number : 97.036 CRS Contact: Natalie Keegan, 202-707-9569"], "subsections": []}, {"section_title": "Hazard Mitigation Grant Program", "paragraphs": ["The Hazard Mitigation Grant Program (HMGP) provides grants to states for implementing mitigation measures after a disaster and to provide funding for previously identified mitigation measures to lessen future damage and loss of life. The federal government provides up to 75% of the cost share of eligible projects. Historically, the amount available for HMGP awards is established by a scale that authorizes three tiers of awards: 15% of the total of other Stafford Act assistance in a state for a major disaster in which no more than $2 billion is provided; 10% for assistance that ranges from more than $2 billion to $10 billion; and 7.5% for a major disaster that involves Stafford Act assistance from more than $10 billion to $35.3 billion. ", "Funding for HMGP comes through discretionary appropriations to the Disaster Relief Fund. The amount of funding provided can be increased if the state has an approved enhanced mitigation plan. HMGP funding is only awarded with a major disaster declaration, not an emergency declaration. However, during FY2015, FY2017, and FY2018, Congress directed that HMGP grants be made available with fire management assistance grants. ", "Agency: Federal Emergency Management Agency Authority: 42 U.S.C. \u00a75170c Regulation: 44 C.F.R. \u00a7\u00a7206.430\u2013206.440 Contact : Office of Congressional Affairs , 202-646-4500 Website : http://www.fema.gov/hazard-mitigation-grant-program CFDA Program Number : 97.039 CRS Contact: Diane P. Horn, 202-707-3472"], "subsections": []}, {"section_title": "Pre-Disaster Mitigation Grants", "paragraphs": ["The Pre-Disaster Mitigation (PDM) Grant Program provides grants and technical assistance to states, territories, and local communities for cost-effective hazard mitigation activities that complement a comprehensive hazard mitigation program and reduce injuries, loss of life, and damage and destruction of property. Through FY2018, a minimum of the lesser of $575,000 or 1.0% of appropriated funds was provided to a state or local government, with assistance capped at 15% of appropriated funds. Federal funds generally comprise 75% of the cost of approved mitigation projects, except for small impoverished communities that may receive up to 90% of the cost. ", "Funding for the PDM Program changed significantly with the passage of the Disaster Recovery Reform Act of 2018 (DRRA). DRRA authorizes the National Public Infrastructure Pre-Disaster Mitigation Fund, for which the President may set aside from the DRF, with respect to each major disaster, an amount equal to 6% of the estimated aggregate amount of the grants to be made pursuant to the following sections of the Stafford Act: 403 (essential assistance), 406 (repair, restoration, and replacement of damaged facilities), 407 (debris removal), 408 (federal assistance to individuals and households), 410 (unemployment assistance), 416 (crisis counseling assistance and training), and 428 (public assistance program alternative program procedures). ", "These changes may increase the focus on funding public infrastructure projects that improve community resilience before a disaster occurs, although FEMA has the discretion to shape the program in many ways. There is potential for significantly increased funding post-DRRA through the new transfer from the DRF, but it is not yet clear how FEMA will implement this new program. ", "Agency: Federal Emergency Management Agency Authority: 42 U.S.C. \u00a75133 Regulation: 44 C.F.R. \u00a7201 Contact : Office of Congressional Affairs, 202-646-4500 Website: http://www.fema.gov/pre-disaster-mitigation-grant-program CFDA Program Number : 97.047 CRS Contact: Diane P. Horn, 202-707-3472"], "subsections": []}, {"section_title": "Community Disaster Loans", "paragraphs": ["The Community Disaster Loan (CDL) program provides loans to local governments that have suffered substantial loss of tax and other revenue in areas included in a major disaster declaration. Typically, the loan may not exceed 25% of the local government's annual operating budget for the fiscal year of the disaster. The limit is 50% if the local government lost 75% or more of its annual operating budget. A loan may not exceed $5 million, and there is no matching requirement. ", "The statute does not impose time limitations on the assistance, but the normal term of a loan is five years. The statute provides that the repayment requirement is cancelled if local government revenues are not sufficient to meet operations expenses during a three-fiscal-year period after a disaster. The governor's authorized representative must officially approve the application and funds must be available in the Disaster Assistance Direct Loan Program (DADLP) account. ", "In P.L. 115-72 , Congress provided up to $4.9 billion for the CDL program to assist local governments in providing essential services as a result of Hurricanes Harvey, Irma, or Maria. However, this legislation departed from the traditional CDL program framework by giving the Secretary of Homeland Security (in consultation with the Secretary of the Treasury) broad authority over lending terms, eligible uses, and criteria for loan cancelation, among other program elements. As a result, this CDL-type program operates differently from the traditional program. For more information, see CRS Insight IN11106, Community Disaster Loans: Homeland Security Issues in the 116th Congress , by Michael H. Cecire. ", "Agency: Federal Emergency Management Agency Authority: 42 U.S.C. \u00a75184 Regulation: 44 C.F.R. \u00a7\u00a7206.360\u2013206.378 Contact : Office of Congressional Affairs, 202-646-4500 CFDA Program Number : 97.030 CRS Contact: Michael H. Cecire, 202-707-7109"], "subsections": []}, {"section_title": "Fire Management Assistance Grant Program", "paragraphs": ["This program provides grants to state and local governments to aid states and their communities with the mitigation, management, and control of fires burning on publicly or privately owned forests or grasslands. The federal government provides 75% of the costs associated with fire management projects, but funding is limited to calculations of the \"fire cost threshold\" for each state. No time limitation is applied to the program. For more information, see CRS Report R43738, Fire Management Assistance Grants: Frequently Asked Questions , by Bruce R. Lindsay and Katie Hoover.", "Agency: Federal Emergency Management Agency Authority: 42 U.S.C. \u00a75187 Regulation: 44 C.F.R. \u00a7\u00a7204.1\u2013204.64 Contact : Office of Congressional Affairs, 202-646-4500 Website: https://www.fema.gov/fire-management-assistance-grant-program CFDA Program Number : 97.046 CRS Contact: Bruce R. Lindsay, 202-707-3752"], "subsections": []}, {"section_title": "Oil Spill Liability Trust Fund", "paragraphs": ["Congress created the Oil Spill Liability Trust Fund (OSLTF) in 1986. Subsequent laws authorized the OSLTF taxing authority, appropriations from the fund, and eligible uses for the fund. The OSLTF complements the Oil Pollution Act of 1990 (OPA; P.L. 101-380 ), which established a new federal oil spill liability framework, replaced existing federal liability frameworks, and amended the existing Clean Water Act oil spill response authorities. In addition, OPA transferred monies into the OSLTF from existing liability funds. ", "The OSLTF may be used, among other purposes, to fund oil spill response activities and to compensate individuals, businesses, and governments for applicable economic damages resulting from an oil spill. Potential damages include injury or loss of property and loss of profits or earning capacity. OPA established a claims process for compensating parties affected by an oil spill. In general, claims must be presented first to the party responsible for the spill, but specific circumstances (e.g., the responsible party is unknown) allow persons to present a claim directly to the OSLTF.", "Agency : National Pollution Funds Center (part of the U.S. Coast Guard) Authority : 26 U.S.C. \u00a79509 and 33 U.S.C. \u00a72712 Regulation : 33 C.F.R. \u00a7136 Contact : Office of Legislative Affairs, 202-245-0520 Website : http://www.uscg.mil/npfc/ CRS Contact : Jonathan L. Ramseur, 202-707-7919"], "subsections": []}]}, {"section_title": "Assistance for Small Businesses and Nonprofit Organizations", "paragraphs": [], "subsections": [{"section_title": "Economic Injury Disaster Loans", "paragraphs": ["This program assists small businesses and nonprofits suffering economic injury as a result of disasters by offering loans and loan guarantees. Businesses must be located in disaster areas declared by the President, the Small Business Administration, or the Secretary of Agriculture. There is no matching requirement in this program. The maximum loan amount is $2 million. Loan terms may extend for up to 30 years. The application period is announced at the time of the disaster declaration. For more information, see CRS Report R41309, The SBA Disaster Loan Program: Overview and Possible Issues for Congress , by Bruce R. Lindsay.", "Agency: Small Business Administration Authority: 15 U.S.C. \u00a7636(b) Regulation: 13 C.F.R. \u00a7\u00a7123.300\u2013123.303 Contact : Office of Congressional Affairs, 202-205-6700 Website : https://disasterloan.sba.gov/ela/Information/EIDLLoans CFDA Program Number : 59.008 CRS Contact: Bruce R. Lindsay, 202-707-3752"], "subsections": []}, {"section_title": "Physical Disaster Loans", "paragraphs": ["This program provides loans to businesses and nonprofits in declared disaster areas for uninsured physical damage and losses. The maximum loan amount is $2 million. Loan terms may extend for up to 30 years. There is no matching requirement in this program. For more information, see CRS Report R41309, The SBA Disaster Loan Program: Overview and Possible Issues for Congress , by Bruce R. Lindsay.", "Agency: Small Business Administration Authority: 15 U.S.C. \u00a7636(b) Regulation: 13 C.F.R. \u00a7\u00a7123.200\u2013123.204 Contact : Office of Congressional Affairs, 202-205-6700 Website: https://disasterloan.sba.gov/ela/Information/BusinessPhysicalLoans CFDA Program Number : 59.008 CRS Contact: Bruce R. Lindsay, 202-707-3752"], "subsections": []}, {"section_title": "Emergency Loans for Farms", "paragraphs": ["When a county has been declared a disaster area by either the President or the Secretary of Agriculture, agricultural producers in that county may become eligible for low-interest emergency disaster (EM) loans available through the U.S. Department of Agriculture's Farm Service Agency. Producers in counties that are contiguous to a county with a disaster designation also become eligible for an EM loan. ", "EM loan funds may be used to help eligible farmers, ranchers, and aquaculture producers recover from production losses (e.g., when the producer suffers a significant loss of an annual crop) or from physical losses (e.g., repairing or replacing damaged or destroyed structures or equipment, or replanting permanent crops, such as orchards). A qualified applicant can then borrow up to 100% of actual production or physical losses (not to exceed $500,000) at a below-market interest rate. For more information see CRS Report RS21212, Agricultural Disaster Assistance , by Megan Stubbs.", "Agency: Department of Agriculture, Farm Service Agency Authority: 7 U.S.C. \u00a71961 Regulation: 7 C.F.R. \u00a7764 Contact : Legislative Liaison Staff, 202-720-7095 Website: https://www.fsa.usda.gov/programs-and-services/farm-loan-programs/emergency-farm-loans/index CFDA Program Number : 10.404 CRS Contact: Megan Stubbs, 202-707-8707"], "subsections": []}, {"section_title": "National Flood Insurance Program", "paragraphs": ["Since 1968, the federal government has pursued a comprehensive flood risk management strategy designed to (1) identify and map flood-prone communities across the country (flood hazard mapping); (2) encourage property owners in NFIP participating communities to purchase insurance as a protection against flood losses (flood insurance); and (3) require communities in designated flood risk zones to adopt and enforce approved floodplain management ordinances to reduce future flood risk to new construction in regulated floodplains (floodplain management). The Federal Insurance and Mitigation Administration (FIMA), a part of FEMA, manages the NFIP. For more information, see CRS Report R44593, Introduction to the National Flood Insurance Program (NFIP) , by Diane P. Horn and Baird Webel, and CRS In Focus IF11023, Selected Issues for National Flood Insurance Program (NFIP) Reauthorization and Reform , by Diane P. Horn.", "Agency: Federal Emergency Management Agency Authority: 42 U.S.C. \u00a74001 et seq. Regulation: 44 C.F.R. \u00a759.1\u2013\u00a782.21 Contact : Office of Congressional Affairs, 202-646-4500 Website: http://www.fema.gov/national-flood-insurance-program CFDA Program Number : 97.022 CRS Contact : Diane Horn, 202-707-3472"], "subsections": []}, {"section_title": "General Assistance Programs", "paragraphs": ["In addition to programs described above that provide targeted assistance to individuals, states, territories, local governments, and businesses specifically affected by disasters, other general assistance programs may be useful to communities in disaster situations. For example, individuals who lose income, employment, or health insurance may become eligible for programs that are not specifically intended as disaster relief, such as cash assistance under the Temporary Assistance for Needy Families (TANF) program, job training under the Workforce Investment Act, Medicaid, or the State Children's Health Insurance Program (S-CHIP). ", "Likewise, state or local officials have the discretion to use funds under programs such as the Social Services Block Grant or Community Development Block Grant to meet disaster-related needs, even though these programs were not established specifically for such purposes. Other agencies may offer assistance to state and local governments, including the Economic Development Administration and the Army Corps of Engineers. For businesses, however, only the disaster programs administered by the Small Business Administration are generally applicable.", "Numerous other federal programs could offer disaster relief, but specific eligibility criteria or other program rules might make it less likely that they would actually be used. Moreover, available funds might already be obligated for ongoing program activities. To the extent that federal agencies have discretion in the administration of programs, some agencies may choose to adapt these non-targeted programs for use in disaster situations. Also, Congress may choose to provide additional funds through emergency supplemental appropriations for certain general assistance programs, specifically for use after a disaster.", "CRS analysts and program specialists can help provide information regarding general assistance programs that might be relevant to a given disaster situation. CRS appropriations reports may have information on disaster assistance within particular federal agencies. These reports also list CRS's key policy staff by their program area and agency expertise."], "subsections": []}]}]}, {"section_title": "Other Sources of Information", "paragraphs": [], "subsections": [{"section_title": "Selected CRS Reports", "paragraphs": [], "subsections": [{"section_title": "Disaster Assistance", "paragraphs": ["CRS Report R41981, Congressional Primer on Responding to Major Disasters and Emergencies , by Bruce R. Lindsay and Elizabeth M. Webster ", "CRS Report R41101, FEMA Disaster Cost-Shares: Evolution and Analysis , by Natalie Keegan and Elizabeth M. Webster ", "CRS Report RL33330, Community Development Block Grant Funds in Disaster Relief and Recovery , by Eugene Boyd", "CRS Report RL33579, The Public Health and Medical Response to Disasters: Federal Authority and Funding , by Sarah A. Lister", "CRS Report R44593, Introduction to the National Flood Insurance Program (NFIP) , by Diane P. Horn and Baird Webel ", "CRS Insight IN10450, Private Flood Insurance and the National Flood Insurance Program (NFIP) , by Baird Webel and Diane P. Horn", "CRS Report R45099, National Flood Insurance Program: Selected Issues and Legislation in the 115th Congress , by Diane P. Horn", "CRS In Focus IF10730, Tax Policy and Disaster Recovery , by Molly F. Sherlock ", "CRS Report R41884, Considerations for a Catastrophic Declaration: Issues and Analysis , by Bruce R. Lindsay ", "CRS Report R43784, FEMA's Disaster Declaration Process: A Primer , by Bruce R. Lindsay", "CRS Report R43738, Fire Management Assistance Grants: Frequently Asked Questions , by Bruce R. Lindsay and Katie Hoover ", "CRS Report R45085, FEMA Individual Assistance Programs: In Brief , by Shawn Reese ", "CRS Report R45238, FEMA and SBA Disaster Assistance for Individuals and Households: Application Process, Determinations, and Appeals , by Bruce R. Lindsay and Shawn Reese "], "subsections": []}, {"section_title": "Disaster Assistance to Individuals, Families, and Businesses", "paragraphs": ["CRS Report RS22022, Disaster Unemployment Assistance (DUA) , by Julie M. Whittaker", "CRS Report R41309, The SBA Disaster Loan Program: Overview and Possible Issues for Congress , by Bruce R. Lindsay", "CRS Report RS21212, Agricultural Disaster Assistance , by Megan Stubbs", "CRS Report R42854, Emergency Assistance for Agricultural Land Rehabilitation , by Megan Stubbs", "CRS In Focus IF10565, Federal Disaster Assistance for Agriculture , by Megan Stubbs", "CRS In Focus IF10730, Tax Policy and Disaster Recovery , by Molly F. Sherlock ", "CRS Report R44808, Federal Disaster Assistance: The National Flood Insurance Program and Other Federal Disaster Assistance Programs Available to Individuals and Households After a Flood , by Diane P. Horn ", "CRS Insight IN11094, The Evolving Use of Disaster Housing Assistance and the Roles of the Disaster Housing Assistance Program (DHAP) and the Individuals and Households Program (IHP) , by Elizabeth M. Webster", "CRS Insight IN11054, Disaster Housing Assistance: Homeland Security Issues in the 116th Congress , by Elizabeth M. Webster ", "CRS Insight IN11106, Community Disaster Loans: Homeland Security Issues in the 116th Congress , by Michael H. Cecire "], "subsections": []}]}, {"section_title": "Federal Agency Websites", "paragraphs": ["Note: Because not all agencies have complete, up-to-date information available on the internet, in particular during and immediately after a disaster, congressional users are encouraged to contact the appropriate CRS program analysts or department or agency program officers for more complete, timely information.", "USA.gov", "http://www.USA.gov/ ", "Many federal agencies have established websites specifically for responding to disasters. Some agencies maintain websites with comprehensive information about their disaster assistance programs, whereas others supply only limited information; most list contact phone numbers. An A-Z index of U.S. government departments and agencies is available at the website above.", "FEMA Website http://www.fema.gov", "From its website, FEMA offers regular updates on recovery efforts in areas under a major disaster declaration. Information on a specific disaster may include a listing of declared counties and contact information for local residents.", "Disaster Assistance.gov http://www.disasterassistance.gov/ ", "DisasterAssitance.gov provides information on how help might be obtained from the U.S. government before, during, and after a disaster. The website includes tools to find, apply for, and check the status of assistance by category or agency. The website also includes disaster-related news feeds and information on community resources.", "Assistance Listings at beta.SAM.gov https://beta.SAM.gov/ ", "Official descriptions of more than 2,200 federal assistance programs, including disaster and recovery grants and loans, can be found on beta.SAM.gov. The website is currently in beta, and it houses federal assistance listings previously found on the now-retired Catalog of Federal Domestic Assistance (CFDA). For programs summarized in this report, CFDA program numbers are given (which are searchable at the \"Assistance Listings\" domain at beta.SAM.gov). Full assistance listing descriptions, updated by departments and agencies, cover authorizing legislation, objectives, and eligibility and compliance requirements. For current appropriations and additional information, users can contact CRS analysts, or departments and agencies."], "subsections": []}]}]}}
{"id": "R41506", "title": "The Longshore and Harbor Workers\u2019 Compensation Act (LHWCA): Overview of Workers\u2019 Compensation for Certain Private-Sector Maritime Workers", "released_date": "2019-01-23T00:00:00", "summary": ["The Longshore and Harbor Workers' Compensation Act (LHWCA) is a federal workers' compensation program that covers certain private-sector maritime workers. Firms that employ these workers are required to purchase workers' compensation or self-insure and are responsible for providing medical and disability benefits to covered workers who are injured or become ill on the job and survivors benefits to the families of covered workers who die on the job. The LHWCA is administered by the Department of Labor (DOL), and all benefit costs are paid by employers and their insurance carriers. In 2016, more than $1.4 billion in LHWCA benefits were paid to beneficiaries.", "Congress has extended the LHWCA provisions to cover workers outside of the maritime industry, such as overseas government contractors and civilian employees of military post exchanges. As part of the American Recovery and Reinvestment Act of 2009 (ARRA), persons who repair recreational vessels of any size were added to the LHWCA exemption list. In 2011, the DOL implemented this provision; since then, those regulations have proven controversial and numerous bills have been introduced to modify the regulatory definition to increase the number of workers exempted from the LHWCA.", "The LHWCA pays for all medical care associated with a covered injury or illness. Disability benefits are based on a worker's pre-injury wage, and, unlike comparable state workers' compensation benefits, are adjusted annually to reflect national wage growth."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Longshore and Harbor Workers' Compensation Act (LHWCA) requires that private-sector firms provide workers' compensation coverage for their employees engaged in longshore, harbor, or other maritime occupations on or adjacent to the navigable waters of the United States. Although the LHWCA program is administered by the Department of Labor (DOL), most benefits are paid either through private insurers or self-insured firms.", "The LHWCA is a workers' compensation system and not a federal benefits program. Like other workers' compensation systems in the United States, the LHWCA ensures that all covered workers are provided medical and disability benefits in the event they are injured or become ill in the course of their employment, and it provides benefits to the survivors of covered workers who die on the job. In 2016, the LHWCA paid approximately $1.41 billion in cash and medical benefits to injured workers and the families of deceased workers."], "subsections": []}, {"section_title": "Workers' Compensation in the United States", "paragraphs": ["Nearly all private- and public-sector workers in the United States are covered by some form of workers' compensation. The federal government has a limited role in workers' compensation and administers workers' compensation programs only for federal employees and several classes of private-sector workers, including longshore and harbor workers. For most occupations, workers' compensation is mandated by state laws and administered by state agencies.", "There is no federal mandate that states provide workers' compensation. However, every state and the District of Columbia has a workers' compensation system. There are no federal standards for state workers' compensation systems. However, all U.S. workers' compensation systems provide for limited wage replacement and full medical benefits for workers who are injured or become ill as a result of their work and survivors benefits to the families of workers who die on the job.", "Workers' compensation in the United States is a no-fault system that pays workers for employment-related injuries or illnesses without considering the culpability of any one party. In exchange for this no-fault protection and the guarantee of benefits in the event of an employment-related injury, illness, or death, workers give up their rights to bring actions against employers in the civil court system and give up their rights to seek damages for injuries and illnesses, including pain and suffering, outside of those provided by the workers' compensation laws. Workers' compensation is mandatory in all states and the District of Columbia, with the exception of Texas. In Texas, employers may, under certain conditions, opt out of the workers' compensation system, but in doing so subject themselves to civil actions brought by injured employees."], "subsections": []}, {"section_title": "History of the LHWCA", "paragraphs": ["Prior to the enactment of the LHWCA in 1927, longshore and harbor workers were not covered by any workers' compensation system. Although persons who worked entirely on land were covered by workers' compensation laws in those states that enacted such laws, pursuant to the Supreme Court's 1917 decision in Southern Pacific Co. v. Jensen , state workers' compensation systems did not have jurisdiction over persons working on the \"navigable waters\" of the United States because the Constitution granted the authority over \"matters of admiralty and maritime jurisdiction\" to the federal government. The LHWCA created a federal workers' compensation program to cover these workers. In 1972, the LHWCA zone of coverage was extended to include areas adjacent to navigable waters that are used for loading, unloading, repairing, or building vessels."], "subsections": []}, {"section_title": "Firms and Workers Covered by the LHWCA", "paragraphs": [], "subsections": [{"section_title": "Covered Firms", "paragraphs": ["The LHWCA provisions apply to any private firm with any covered employees who work, full- or part-time, on the navigable waters of the United States, including in any of the following adjoining areas: piers; wharves; dry docks; terminals; building ways; marine railways; or other areas customarily used in the loading, unloading, repairing, or building of vessels."], "subsections": []}, {"section_title": "Covered Workers", "paragraphs": ["With the exception of workers excluded by statute (listed below), the LHWCA covers any maritime employee of a covered firm, including longshore workers (those who load and unload ships) and harbor workers (i.e., ship repairmen, ship builders, and ship breakers)."], "subsections": [{"section_title": "Workers Excluded by Statute", "paragraphs": ["Sections 2(3) and 3(b) of the LHWCA exclude the following workers from coverage:", "Workers covered by a state workers' compensation law, including employees exclusively engaged in clerical, secretarial, security, or data processing work; persons employed by a club, camp, recreational operation, museum, or retail outlet; marina employees not engaged in the construction, replacement, or expansion of the marina; suppliers, transporters, and vendors doing business temporarily at the site of a covered employer; aquaculture workers; and employees who build any recreational vessel under 65 feet in length, or repair any recreational vessel, or dismantle any part of a recreational vessel in connection with the repair of the vessel. Workers, whether covered or not covered by a state workers' compensation law, including masters and crew members of vessels; persons engaged by the master of a vessel to unload any vessel under 18 tons net; and employees of the federal government, or any state, local, or foreign government or any subdivision of such a government."], "subsections": []}, {"section_title": "2009 Amendment to the LHWCA", "paragraphs": ["Section 803 of the American Recovery and Reinvestment Act of 2009 (ARRA) modified one of the excluded classes of workers under the LHWCA by adding additional exclusions for persons who work on recreational vessels over 65 feet in length. Prior to the amendment, Section 2(3)(F) of the LHWCA read as follows:", "(3) The term \"employee\" means\u2026but such term does not include\u2026", "(F) individuals employed to build, repair, or dismantle any recreational vessel under sixty-five feet in length.", "This section, as amended, reads as follows (with additions in italics):", "(3) The term \"employee\" means\u2026but such term does not include\u2026", "(F) individuals employed to build any recreational vessel under sixty-five feet in length, or individuals employed to repair any recreational vessel, or to dismantle any part of a recreational vessel in connection with the repair of such vessel.", "By granting an exemption from the LHWCA to persons engaged in the repair of any recreation vessel, regardless of its size, this amendment limits the scope of the LHWCA and increases the types of workers excluded from coverage."], "subsections": []}, {"section_title": "2011 DOL Regulations Defining Recreational Vessel", "paragraphs": ["In 2011, the DOL promulgated implementing regulations for the new recreational vessel provision provided by Section 803 of ARRA. These regulations provided definitions of recreational vessel for the purposes of the determination of LHWCA coverage. These definitions are based on the classification of vessels used by the U.S. Coast Guard (USCG) and provided in statute and regulation. "], "subsections": [{"section_title": "General Definition", "paragraphs": ["Specifically, under these current DOL regulations, a vessel is considered a recreational vessel if the vessel is", "being manufactured or operated mainly for pleasure or leased, rented, or chartered to another person for his or her pleasure."], "subsections": []}, {"section_title": "Definition for Vessel Being Built or Repaired Under Warranty", "paragraphs": ["In addition, for a vessel being built or repaired under warranty by its manufacturer or builder, the vessel is considered a recreational vessel if it appears based on its design and construction to be intended for recreational uses. The manufacturer or builder bears the burden under this regulation to establish that the vessel is a recreational vessel. "], "subsections": []}, {"section_title": "Definition for Vessel Being Repaired or Dismantled", "paragraphs": ["For a vessel being repaired, dismantled for repair, or dismantled at the end of its life (ship breaking), the vessel is not considered a recreational vessel if it was operating, more than infrequently, in one of the following categories provided in the U.S. Code :", "\"passenger vessel\" (46 U.S.C. \u00a72101(22)); \"small passenger vessel\" (46 U.S.C. \u00a72101(35)); \"uninspected passenger vessel\" (46 U.S.C. \u00a72101(42)); vessel routinely engaged in \"commercial service\" (46 U.S.C. \u00a72101(5)); or vessel that routinely carries \"passengers for hire\" (46 U.S.C. \u00a72101(21a)). ", "A vessel being repaired, dismantled for repair, or dismantled at the end of its life is considered a recreational vessel if the vessel is a public vessel owned, or bareboat chartered, by the federal government or a state or local government and shares elements of design and construction with traditional recreational vessels and is not used for military or commercial purposes. "], "subsections": []}]}, {"section_title": "Legislation to Change the DOL's Definition of Recreational Vessel", "paragraphs": ["Since the promulgation of the DOL's 2011 rules providing regulatory definitions of recreational vessels for the purposes of the LHWCA, numerous bills have been introduced that would, if enacted, remove the existing regulatory definitions for a vessel being repaired, dismantled for repair, or dismantled at the end of its life so that the USCG categories of vessels provided in Section 2101 of Title 46 of the United States Code would no longer be used in the classification of such a vessel under the LHWCA. This legislation would expand the types of recreational vessels. Because persons who work on recreational vessels are not covered by the LHWCA, the legislation would allow employers to purchase workers' compensation for these workers under state laws rather than the LHWCA, which, due to the more generous benefits frequently offered by the LHWCA and the limited number of providers, may be more expensive. ", "In the 115 th Congress, Section 3509 of H.R. 2810 , the National Defense Authorization Act for 2018 (NDAA), as initially passed by the House of Representatives on July 14, 2017, contained this legislative provision. This provision was not included in the Senate version of the bill nor in the final NDAA enacted into law. "], "subsections": []}, {"section_title": "Extensions of Coverage Under the LHWCA", "paragraphs": ["The LHWCA has been amended four times to extend coverage to occupations outside the original scope of the law. In 1928, coverage was extended to employees of the District of Columbia . The provision was repealed, effective for all injuries occurring on or after July 26, 1982, with the enactment by the District of Columbia government of the District of Columbia Workers' Compensation Act of 1982. Benefits for injuries that occurred prior to July 26, 1982, continue to be paid under the LHWCA.", "Coverage was extended to overse a s military and public works contractors in 1941 with the enactment of the Defense Base Act. In 1952, coverage was extended to civilian employees of nonappropriated fund instrumentalities of the armed forces , such as service clubs and post exchanges. Coverage was extended in 1953 to employees working on the Outer Continental Shelf in the exploration and the development of natural resources , such as workers on offshore oil platforms."], "subsections": []}]}]}, {"section_title": "Insurance and Financing", "paragraphs": ["Employers required by the LHWCA to provide workers' compensation coverage to their employees may either purchase private insurance or self-insure. The DOL is responsible for authorizing insurance carriers to provide coverage under the LHWCA program and for authorizing companies to self-insure. However, the DOL does not set or regulate insurance premiums. These insurance arrangements are the primary means of providing LHWCA benefits to injured, sick, and deceased workers and their families. General revenue is not used to pay any LHWCA benefits."], "subsections": [{"section_title": "Special Fund", "paragraphs": ["The DOL operates the Special Fund to provide LHWCA benefits in cases in which the responsible employer or insurance carrier cannot pay or in which benefits must be paid for a second injury under Section 8(f) of the LHWCA. The Special Fund is financed through an annual assessment charged to employers and insurance carriers based on the previous year's claims, payments required when an employee dies without any survivors, disability payments due to an employee without survivors after his or her death, and penalties and fines assessed for noncompliance with LHWCA program rules."], "subsections": []}, {"section_title": "Administrative Costs", "paragraphs": ["The administrative costs associated with the LHWCA are largely provided by general revenue. General revenue is used to pay for most oversight functions associated with the LHWCA and the processing of LHWCA claims. General revenue is also used to pay legal and investigative costs associated with the DOL Office of the Solicitor and Office of the Inspector General. Revenue from the Special Fund is used to finance oversight activities related to the Special Fund and the program's vocational rehabilitation activities. In 2016, total administrative costs associated with the LHWCA were approximately $15.8 million, of which $13.6 million, or 86%, was paid by general revenue and $2.2 million, or 14%, was paid by the Special Fund."], "subsections": []}]}, {"section_title": "LHWCA Benefits", "paragraphs": ["The LHWCA provides medical benefits for covered injuries and illnesses and disability benefits to partially cover wages lost due to covered injuries or illnesses, and it provides survivors benefits to the families of workers who die on the job."], "subsections": [{"section_title": "Medical Benefits", "paragraphs": ["The LHWCA provides medical benefits to fully cover the cost of any medical treatment associated with a covered injury or illness. These medical benefits are provided without any deductibles, copayments, or costs paid by the injured worker. Prescription drugs and medical procedures are fully covered, as are costs associated with travelling to and from medical appointments. A covered worker may select his or her own treating physician, provided the physician has not been debarred from the LHWCA program for violating program rules."], "subsections": []}, {"section_title": "Vocational Rehabilitation", "paragraphs": ["Covered workers are entitled to vocational rehabilitation services provided under the LHWCA. Vocational rehabilitation services are designed to assist the covered worker in returning to employment. There is no cost to the covered worker for vocational rehabilitation and workers actively participating in a rehabilitation program are entitled to an additional benefit of $25 per week. All costs associated with vocational rehabilitation under the LHWCA are paid out of the Special Fund. Vocational rehabilitation services may be provided by public or private rehabilitation agencies."], "subsections": []}, {"section_title": "Disability Benefits", "paragraphs": ["The LHWCA provides disability benefits to covered workers to partially cover wages lost due to the inability to work because of a covered injury or illness. The amount of disability benefits is based on the worker's pre-disability wage, subject to maximum and minimum benefits based on the National Average Weekly Wage (NAWW) as determined by the DOL. The NAWW is updated October 1 of each year and is based on average wages across the United States for the three calendar quarters ending on June 30 of that year. The minimum weekly benefit that can be paid to a covered employee is equal to 50% of the NAWW and the maximum weekly benefit that can be paid is equal to 200% of the NAWW.", "Disability benefits under the LHWCA, like all workers' compensation benefits, are not subject to federal income taxes. Unlike most state workers' compensation benefits, however, LHWCA benefits are adjusted based on wage inflation rather than price inflation. Benefits are adjusted annually each October 1 to reflect the change in the NAWW from the previous year, up to a maximum increase of 5%. "], "subsections": [{"section_title": "Total Disability Benefits", "paragraphs": ["The LHWCA provides benefits in cases of total disability. Under the LHWCA, a worker is considered totally disabled if he or she is unable to earn his or her pre-injury wage because of a covered injury or illness. In addition, a worker is also considered totally disabled if he or she loses both hands, arms, feet, legs, or eyes, or any two of these body systems, such as the loss of one arm and one leg. Total disability benefits under the LHWCA are equal to two-thirds of the covered worker's wage at the time of the injury or illness. Total disability benefits continue until the worker is no longer totally disabled or dies."], "subsections": []}, {"section_title": "Partial Disability Benefits", "paragraphs": ["If a covered worker is able to partially return to work or return to work at a wage level less than his or her wage at the time of injury, then he or she is considered partially disabled. In cases of temporary partial disability, the LHWCA benefit is equal to two-thirds of the difference between the workers' pre-injury wage and his or her current earning capacity or actual earnings."], "subsections": []}, {"section_title": "Permanent Partial Disability Benefits", "paragraphs": ["Section 8(c) of the LHWCA provides a schedule of benefits to be paid in cases of permanent partial disability (PPD), such as the loss of a limb. The benefit schedule provides the number of weeks of compensation, at two-thirds of the pre-injury wage, for each type of PPD. For example, the LHWCA schedule provides that a worker who loses an arm is entitled to 312 weeks of compensation. Benefits in cases not listed on the schedule are paid at two-thirds of the difference between the pre-injury wage and current earning capacity for the duration of the disability. Schedule benefits for PPD are paid regardless of the current work status or earnings capacity of the employee. Thus, an employee with a PPD can fully return to work and earn his or her wage in addition to the PPD compensation. A copy of the LHWCA PPD schedule can be found in the Appendix to this report. "], "subsections": []}, {"section_title": "Disability After Retirement", "paragraphs": ["If a worker has an illness that was caused by his or her covered employment but did not manifest itself until after his or her retirement, then he or she is entitled to disability benefits equal to two-thirds of the NAWW multiplied by the percentage of his or her impairment. The percentage of impairment is determined using the current edition of the American Medical Association's Guides to the Evaluation of Permanent Impairment (AMA Guides ), or another professionally recognized source if the condition is not listed in the AMA Guides."], "subsections": []}]}, {"section_title": "Survivors Benefits", "paragraphs": ["The LHWCA provides cash benefits to the surviving spouses and minor children of workers killed on the job. Benefits for a surviving spouse end when the spouse remarries or dies and benefits for surviving children continue until the children reach the age of 18, age 23 if a full-time student, or for the life a child with a disability.", "A surviving spouse with no eligible children is entitled to one-half of the deceased worker's wage at the time of death under the LHWCA. A surviving spouse with one or more eligible children is entitled to two-thirds of the deceased worker's wage at the time of death. Once all children become ineligible for benefits because of their ages, the surviving spouse's benefit is reduced to the level of a spouse without any eligible children.", "If an eligible spouse becomes ineligible for benefits because of death or remarriage, or if there is no surviving spouse, benefits are still paid to any surviving children. Under the LHWCA, a single surviving eligible child is entitled to one-half of the deceased worker's wage at the time of death, and two or more surviving children are eligible for a combined two-thirds of the wage at the time of death.", "The survivors of a covered worker killed on the job are entitled under the LHWCA to a cash payment to provide for the burial and funeral of the deceased. The burial and funeral allowance is capped by Section 9(a) of the LHWCA at $3,000, and this cap not adjusted to reflect changes in prices or wages.", "If a covered worker who is receiving scheduled PPD benefits dies of a cause unrelated to his or her illness or injury, then the balance of any remaining PPD benefits is paid to his or her survivors. If a covered worker who dies on the job leaves no survivors, his or her employer or the employer's insurance carrier is required to pay $5,000 into the Special Fund."], "subsections": []}]}, {"section_title": "LHWCA Claims Process", "paragraphs": ["Although the responsibility for the payment of benefits under the LHWCA rests with the employer or the employer's insurance company, decisions on benefit eligibility and the amount of benefits are made by the DOL. Upon the report of an injury, illness, or death, the LHWCA claims process begins. If the employer or insurance carrier does not controvert the claim, then arrangements are made by the DOL for the claim to be paid.", "If, however, the employer controverts any part of the claim, then the DOL sets up an informal conference, either in person or by phone, between the employer or insurance carrier and worker with the goal of resolving any disputes over the claim. If this informal conference fails to resolve all outstanding disputes, then a formal hearing before a DOL administrative law judge (ALJ) is scheduled. If the employer or insurance carrier or the worker is dissatisfied with the decision of the ALJ, then this decision may be appealed to the Benefits Review Board (BRB). The BRB is made up of five members appointed by the Secretary of Labor. Either party dissatisfied with the decision of the BRB may file a petition with the U.S. Court of Appeals for the circuit in which the injury occurred praying that the BRB's decision be set aside or modified. ", "If an employer or insurance carrier fails to pay compensation in accordance with a final decision on a claim, the covered worker or the DOL may request that the U.S. District Court order that payment be made."], "subsections": [{"section_title": "Appendix. Benefits Schedule for LHWCA PPD", "paragraphs": [], "subsections": []}]}]}}
{"id": "R45266", "title": "The Trump Administration\u2019s \u201cZero Tolerance\u201d Immigration Enforcement Policy", "released_date": "2019-02-26T00:00:00", "summary": ["For the last several years, Central American migrant families have arrived at the U.S.-Mexico border in relatively large numbers, many seeking asylum. While some request asylum at U.S. ports of entry, others do so after entering the United States \"without inspection\" (i.e., illegally) between U.S. ports of entry. On May 7, 2018, the Department of Justice (DOJ) implemented a \"zero tolerance\" policy toward illegal border crossing both to discourage illegal migration into the United States and to reduce the burden of processing asylum claims that Administration officials contend are often fraudulent.", "Under the zero tolerance policy, DOJ prosecuted all adult aliens apprehended crossing the border illegally, with no exception for asylum seekers or those with minor children. DOJ's policy represented a change in the level of enforcement of an existing statute rather than a change in statute or regulation. Prior Administrations prosecuted illegal border crossings relatively infrequently.", "Criminally prosecuting adults for illegal border crossing requires detaining them in federal criminal facilities where children are not permitted. While DOJ and the Department of Homeland Security (DHS) have broad statutory authority to detain adult aliens, children must be detained according to guidelines established in the Flores Settlement Agreement (FSA), the Homeland Security Act of 2002, and the Trafficking Victims Protection Reauthorization Act of 2008. A 2015 judicial ruling held that children remain in family immigration detention for no more than 20 days. If parents cannot be released with them, children are treated as unaccompanied alien children and transferred to the Department of Health and Human Services' (HHS's) Office of Refugee Resettlement (ORR) for care and custody.", "The widely publicized family separations were a consequence of the Trump Administration's zero tolerance policy, not the result of an explicit family separation policy. Since the zero tolerance policy was implemented, up to 3,000 children may have been separated from their parents. In addition, thousands more were separated prior to the public announcement of the policy change.", "Following mostly critical public reaction, President Trump issued an executive order on June 20, 2018, mandating that DHS maintain custody of alien families during the pendency of any criminal trial or immigration proceedings. DHS Customs and Border Protection (CBP) subsequently stopped referring most illegal border crossers to DOJ for criminal prosecution. A federal judge then mandated that all separated children be promptly reunited with their families. Another rejected DOJ's request to modify the FSA to extend the 20-day child detention guideline. DHS has since reverted to some prior immigration enforcement policies, and family separations continue to occur based upon DHS enforcement protocols in place prior to the 2018 zero tolerance policy.", "Administration officials and immigration enforcement advocates argue that measures like the zero tolerance policy are necessary to discourage migrants from coming to the United States and submitting fraudulent asylum requests. They maintain that alien family separation resulting from the prosecution of illegal border crossers mirrors that which occurs regularly under the U.S. criminal justice system policy where adults with custody of minor children are charged with a crime and may be held in jail, effectively separating them from their children.", "Immigrant advocates contend that migrant families are fleeing legitimate threats from countries with exceptionally high rates of gang violence, and that family separations resulting from the zero tolerance policy are cruel and violate fundamental human rights\u2014such as the ability to request asylum. They maintain that the zero tolerance policy was hastily implemented and lacked planning for family reunification following criminal prosecutions. Some observers question the Trump Administration's capacity to marshal sufficient resources to prosecute all illegal border crossers without additional resources. Others criticize the family separation policy in light of less expensive alternatives to detention.", "In prior years, most individuals apprehended were single adult males. Family unit apprehensions, which increased from just over 11,000 in FY2012 to 99,901 in the first four months of FY2019, and apprehensions of unaccompanied alien children are occurring within the context of otherwise relatively low historical levels of total alien apprehensions. In addition, the national origin of recently apprehended family units and unaccompanied children has shifted to mostly Central American from long-term trends of mostly Mexican."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["In recent years, Central American migrant families have been arriving at the U.S.-Mexico border in relatively large numbers, many seeking asylum. While some request asylum at U.S. ports of entry, others do so after attempting to enter the United States illegally between U.S. ports of entry. On May 7, 2018, then-Attorney General Jeff Sessions announced that the Department of Justice (DOJ) implemented a \"zero tolerance\" policy toward illegal border crossing, both to discourage illegal migration into the United States and to reduce the burden of processing asylum claims that Administration officials contend are often fraudulent.", "Under the zero tolerance policy, DOJ prosecuted 100% of adult aliens apprehended crossing the border illegally, making no exceptions for whether they were asylum seekers or accompanied by minor children. Illegal border crossing is a misdemeanor for a first time offender and a felony for anyone who has previously been \"denied admission, excluded, deported, or removed, or has departed the United States while an order of exclusion, deportation or removal is outstanding and thereafter enters, attempts to enter or is found in the U.S.\" Both such criminal offenses can be prosecuted by DOJ in federal criminal courts. ", "DOJ's \"100% prosecution\" policy represented a change in the level of enforcement of an existing statute rather than a change in statute or regulation. The recent Bush and Obama Administrations prosecuted illegal border crossings relatively infrequently, in part to avoid having DOJ resources committed to prosecuting sizeable numbers of misdemeanors. At different times during those Administrations, illegal entrants would be criminally prosecuted in an attempt to reduce illegal migration, but exceptions were generally made for families and asylum seekers.", "Illegal border crossers who are prosecuted by DOJ are detained in federal criminal facilities. Because children are not permitted in criminal detention facilities with adults, detaining adults who crossed illegally requires that any minor children under age 18 accompanying them be treated as unaccompanied alien children (UAC) and transferred to the care and custody of the Department of Health and Human Services' (HHS's) Office of Refugee Resettlement (ORR). ", "The widely publicized family separations were therefore a consequence of the Administration's policy of 100% prosecution of illegal border crossing, and not the result of a direct policy or law mandating family separation. Since the policy was implemented, \"under 3,000\" children may have been separated from their parents, including at least 100 under age 5.", "The family separations have garnered extensive public attention. The Trump Administration and immigration enforcement advocates maintain that the zero tolerance policy was necessary to dis-incentivize migrants from coming to the United States and clogging immigration courts with fraudulent requests for asylum. Immigrant advocates contend that migrant families are fleeing legitimate threats of violence and that family separations resulting from the zero tolerance policy were cruel and violated fundamental human rights.", "This report briefly reviews the statutory authority for prosecuting persons who enter the United States illegally between U.S. ports of entry, and the policies and procedures for processing apprehended illegal border entrants and any accompanying children. It explains enforcement policies under past Administrations and then discusses the Trump Administration's zero tolerance policy on illegal border crossers and the attendant family separations. The report concludes by presenting varied policy perspectives on the zero tolerance policy and briefly reviews recent related congressional activity. An Appendix examines recent trends in the apprehension of family units at the U.S. Southwest border.", "This report describes policies and circumstances that continue to change. Information presented in it is current as of the publication date but may become outdated quickly."], "subsections": []}, {"section_title": "Enforcement and Asylum Policy for Illegal Border Crossers", "paragraphs": ["Aliens who wish to enter the United States may request admission legally at a U.S. port of entry or may attempt to enter illegally by crossing the border surreptitiously between U.S. ports of entry. Aliens who wish to request asylum may do so at a U.S. port of entry before an officer with the Department of Homeland Security (DHS) Customs and Border Protection (CBP) Office of Field Operations or upon apprehension between U.S. ports of entry before an agent with CBP's U.S. Border Patrol. DHS has broad statutory authority both to detain aliens not legally admitted, including asylum seekers, and to remove aliens who are found to be either inadmissible at ports of entry or removable once in the United States. Aliens requesting asylum at the border are entitled to an interview assessing the credibility of their asylum claims."], "subsections": [{"section_title": "Illegal U.S. Entry", "paragraphs": ["Aliens who enter the United States illegally between ports of entry face two types of penalties. They face civil penalties for illegal presence in the United States, and they face criminal penalties for having entered the country illegally. Both types of penalties are explained below.", "The Immigration and Nationality Act (INA) establishes civil penalties for persons who are in the United States unlawfully (i.e., without legal status). These penalties apply to foreign nationals who entered the United States illegally as well as those who entered legally but subsequently violated the terms of their admission, typically by \"overstaying\" their visa duration. Foreign nationals who are apprehended for such civil immigration violations are generally subject to removal (deportation) and are placed in formal or streamlined removal proceedings (described below in \" Removal \")", "The INA also establishes criminal penalties for (1) persons who enter or attempt to enter the United States illegally between ports of entry, (2) persons who elude examination or inspection by immigration officers, or (3) persons who attempt to enter or obtain entry to the United States through fraud or willful misrepresentation. In addition, the INA provides criminal penalties for persons who unlawfully reenter the United States after they were previously removed from the country. Foreign nationals apprehended for criminal immigration violations are subject to prosecution by DOJ in federal criminal courts. This report only addresses criminal penalties for illegal entry and reentry between ports of entry.", "Foreign nationals who attempt to enter the United States without authorization often do so between U.S. ports of entry on the U.S. border. If apprehended, they are processed by CBP. They are typically housed briefly in CBP detention facilities before being transferred to the custody of another federal agency or returned to their home country through streamlined removal procedures (discussed below). All apprehended aliens, including children, are placed into removal proceedings that occur procedurally after any criminal prosecution for illegal entry. Removal proceedings generally involve formal hearings in an immigration court before an immigration judge, or expedited removal without such hearings (see \" Removal \" below).", "In general, CBP refers apprehended aliens for criminal prosecution if they meet criminal enforcement priorities (e.g., child trafficking, prior felony convictions, multiple illegal entries). Such individuals are placed in the custody of the U.S. Marshals Service (DOJ's enforcement arm) and transported to DOJ criminal detention facilities for pretrial detention. After individuals have been tried\u2014and if convicted, have served any applicable criminal sentence\u2014they are transferred to DHS Immigration and Customs Enforcement (ICE) custody and placed in immigration detention. ICE, which represents the government in removal hearings, commences removal proceedings.", "If CBP does not refer apprehended aliens to DOJ for criminal prosecution, CBP may either return them to their home countries using streamlined removal processes or transfer them to ICE custody for immigration detention while they are in formal removal proceedings. "], "subsections": []}, {"section_title": "Asylum", "paragraphs": ["Many aliens at the U.S.-Mexico border seek asylum in the United States. Asylum is not numerically limited and is granted on a case-by-case basis. Asylum can be requested by foreign nationals who have already entered the United States and are not in removal proceedings (\"affirmative\" asylum) or those who are in removal proceedings and claim asylum as a defense to being removed (\"defensive\" asylum). The process in each case is different. ", "Arriving aliens who are inadmissible, either because they lack proper entry documents or because they attempt U.S. entry through misrepresentation or false claims to U.S. citizenship, are put into a streamlined removal process known as expedited removal (described below in \" Removal \"). Aliens in expedited removal who express a fear of persecution are detained by ICE and given a \"credible fear\" interview with an asylum officer from DHS's U.S. Citizenship and Immigration Services (USCIS). The purpose of the interview is to determine if the asylum claim has sufficient validity to merit an asylum hearing before an immigration judge. Those who receive a favorable credible fear determination are taken out of expedited removal, placed into formal removal proceedings, and given a hearing before an immigration judge, thereby placing the asylum seeker on the defensive path to asylum. Those who receive an unfavorable determination may request that an immigration judge review the case. Aliens in expedited removal who cannot demonstrate a credible fear are promptly deported."], "subsections": []}, {"section_title": "Detention", "paragraphs": ["The INA provides DHS with broad authority to detain adult aliens who are in removal proceedings . However, child detention operates under different policies than that of adults. All children are detained according to broad guidelines established through a court settlement agreement (applicable to all alien children) and two statutes (applicable only to unaccompanied alien children). ", "The 1997 Flores Settlement Agreement (FSA) established a nationwide policy for the detention, treatment, and release of all alien children, both accompanied and unaccompanied. The Homeland Security Act of 2002 charged ORR with providing temporary care and ensuring custodial placement of UAC with suitable and vetted sponsors. Finally, the William Wilberforce Trafficking Victims Protection Reauthorization Act of 2008 (TVPRA) directed DHS to ensure that all UAC be screened by DHS for possible human trafficking. The TVPRA mandated that UAC from countries other than Mexico or Canada\u2014along with all UAC apprehended in the U.S. interior\u2014be transferred to the care and custody of ORR, and then be \"promptly placed in the least restrictive setting that is in the best interest of the child.\" In the course of being referred to ORR, UAC are also put into formal removal proceedings, ensuring they can request asylum or other types of immigration relief before an immigration judge.", "As a result of a 2015 judicial interpretation of the Flores Settlement Agreement, children accompanying apprehended adults cannot be held in family immigration detention with their parents for more than 20 days, on average. If the parents cannot be released with them, such children are typically treated as UAC and referred to ORR."], "subsections": []}, {"section_title": "Removal", "paragraphs": ["Under the formal removal process, an immigration judge from DOJ's Executive Office for Immigration Review (EOIR) determines whether an alien is removable. The immigration judge may grant certain forms of relief (e.g., asylum, cancellation of removal), and removal decisions are subject to administrative and judicial review.", "Under streamlined removal procedures, which include expedited removal and reinstatement of removal (i.e., when DHS reinstates a removal order for a previously removed alien), opportunities for relief and review are generally limited. Under expedited removal (INA \u00a7235(b)), an alien who lacks proper documentation or has committed fraud or willful misrepresentation to gain admission into the United States may be removed without any further hearings or review, unless he or she indicates a fear of persecution in their home country or an intention to apply for asylum.", "If apprehended foreign nationals are found to be removable, ICE and CBP share the responsibility for repatriating them. \u00a0CBP handles removals at the border for unauthorized aliens from the contiguous countries of Mexico and Canada, and ICE handles all removals from the U.S. interior and removals for all unauthorized aliens from noncontiguous countries. "], "subsections": []}]}, {"section_title": "Prosecution of Aliens Charged with Illegal Border Crossing in Prior Administrations", "paragraphs": ["Prior to the Trump Administration, aliens apprehended between ports of entry who were not considered enforcement priorities (e.g., a public safety threat, repeat illegal border crosser, convicted felon, or suspected child trafficker) were typically not criminally prosecuted for illegal entry but would be placed directly into civil removal proceedings for unauthorized U.S. presence. ", "In addition, aliens apprehended at and between ports of entry who sought asylum and were found to have credible fear generally were not held in immigration detention if DHS did not assess them as public safety risks. Rather, they were administratively placed into removal proceedings, instructed by DHS to appear at their immigration hearings, and then released into the U.S. interior. This policy became more prevalent after 2015 when a federal judge ruled that children could not be kept in immigration detention for more than 20 days.", "DHS officials justified the \"catch and release\" approach in the past because of the lack of detention bed space and the considerable cost of detaining large numbers of unauthorized aliens and family units for the lengthy periods, often stretching to years, between apprehension by CBP and removal hearings before an EOIR judge. Immigration enforcement advocates criticized the catch and release policy because of the failure of many apprehended individuals to appear subsequently for their immigration hearings. ", "According to some observers, prior Administrations made more use of alternatives to detention that permitted DHS to monitor families who were released into the U.S. interior. Such practices are needed to monitor the roughly 2 million aliens in removal proceedings given that ICE's current budget funds less than 50,000 beds, which are prioritized for aliens who pose public safety or absconder risks.", "Data are not available on the rate and/or absolute number of family separations resulting from illegal border crossing prosecutions under prior Administrations, limiting the degree to which comparisons can be made with the Trump Administration's zero tolerance policy.", "DHS states that the agency referred an average of 21% of all illegal border crossing \"amenable adults\" for prosecution from FY2010 through FY2016. DHS maintains that it has an established policy of separating children from adults when it", "cannot determine the family relationship or otherwise verify identity, determines that the child is being smuggled or trafficked or is otherwise at risk with the parent or legal guardian, or determines that the parent or legal guardian may have engaged in criminal conduct and refers them for criminal prosecution. "], "subsections": []}, {"section_title": "Prosecution of Aliens Charged with Illegal Border Crossing in the Trump Administration", "paragraphs": ["On April 6, 2018, then-Attorney General Jeff Sessions announced a \"zero tolerance\" policy under which all illegal border crossers apprehended between U.S. ports of entry would be criminally prosecuted for illegal entry or illegal reentry. This policy made no exceptions for asylum seekers and/or family units. To facilitate this policy, the Attorney General announced that he would send 35 additional prosecutors to U.S. Attorney's Offices along the Southwest border and 18 additional immigration judges to adjudicate cases in immigration courts near the Southwest border.", "Consequently, if a family unit was apprehended crossing illegally between ports of entry, the zero tolerance policy mandated that CBP refer all illegal adult entrants to DOJ for criminal prosecution. Accompanying children, who are not permitted to be housed in adult criminal detention settings with their parents, were to be processed as unaccompanied alien children in accordance with the TVPRA. They were transferred to the custody of ORR, which houses them in agency-supervised, state-licensed shelters. If feasible given the circumstances, ORR attempted to place them with relatives or legal guardian sponsors or place them in temporary foster care. ", "ORR has over 100 shelters in 17 states, and during the implementation of the zero tolerance policy they were reportedly at close to full capacity. Consequently, at one point, the agency was evaluating options for housing children on Department of Defense (DOD) installations to handle the surge of separated children resulting from increased prosecution of parents crossing between ports of entry. ", "As noted earlier, after adults have been tried in federal courts for illegal entry\u2014and if convicted, have served their criminal sentences\u2014they are transferred to ICE custody and placed in immigration detention. Typically, parents are then reunited in ICE family detention facilities with their children who have either remained in ORR custody or have been placed with a sponsor. Requests for asylum can also be pursued at this point."], "subsections": [{"section_title": "Statistics and Timeline on Family Separation", "paragraphs": ["In FY2017, CBP apprehended 75,622 alien family units and separated 1,065 (1.4%) of them.\u00a0Of those separations, 46 were due to fraud and 1,019 were due to medical and/or security concerns. In the first five months of FY2018, prior to enactment of the zero tolerance policy, CBP apprehended 31,102 alien family units and separated 703 (2.2%), of which 191 resulted from fraud and 512 from medical and/or security concerns.", "Prior to Attorney General Sessions's announcement of the zero tolerance policy, the American Civil Liberties Union (ACLU) filed a lawsuit against ICE (referred to as \"Ms. L. v. ICE\") on behalf of two families separated at the Southwest border: a woman from the Democratic Republic of the Congo who was separated from her 6-year-old daughter at a port of entry for five months; and a woman from Brazil who had crossed into the United States illegally between ports of entry and was separated from her 14-year-old son for eight months. The lawsuit, filed in February, was subsequently expanded in March 2018 to a class-action lawsuit filed by the ACLU against ICE on behalf of all parents who were separated from their children by DHS.", "In the early months of the policy, the Administration repeatedly revised the number of families that had been separated. According to CBP testimony in May 2018, 658 children were separated from 638 adults who were referred for prosecution between May 7 and May 21. DHS subsequently reported that 1,995 children had been separated from their parents between April 19 and May 31. DHS updated these figures in June 2018, reporting that 2,342 children were separated from their parents between May 5 and June 9. DHS then reported that CBP had since reunited with their parents 538 children who were never sent to ORR shelters. HHS Secretary Alex Azar then reported that \"under 3,000\" minor children (under age 18) had been separated from their families in total, including roughly 100 under age 5. As of July 13, 2018, HHS reported that 2,551 children ages 5 to 17 remained separated. ", "On June 20, 2018, following considerable and largely negative public attention to family separations stemming from the zero tolerance policy, President Trump issued an executive order (EO) mandating that DHS maintain custody of alien families \"during the pendency of any criminal improper entry or immigration proceedings involving their member,\" to the extent permitted by law and appropriations. The EO instructs DOD to provide and/or construct additional shelter facilities, upon request by ORR, and it instructs other executive branch agencies to assist with housing as appropriate to implement the EO. The EO mandates that the Attorney General prioritize the adjudication of detained family cases, and it requires the Attorney General to ask the U.S. District Court for the Central District of California, which oversees the Flores Settlement Agreement, to modify the agreement to permit detained families to remain together. ", "On June 25, 2018, CBP announced that, because of ICE's lack of family detention bed space, it had temporarily halted the policy of referring adults who cross the border illegally with children to DOJ for criminal prosecution. According to a White House announcement, the zero tolerance policy may be reinstituted once additional family detention bed space becomes available. Also on June 25, 2018, DOD announced plans to permit four of its military bases to be used by other federal agencies to shelter up to 20,000 UAC and family units. DOD subsequently announced that 12,000 persons would be housed on its facilities, before another report appeared suggesting the number was 32,000 UAC and family units. Since these announcements, no efforts have been made to house apprehended UAC or family units on military installations.", "On June 26, 2018, in response to the ACLU class action lawsuit, Judge Dana Sabraw of the U.S. District Court for the Southern District of California issued an injunction against the Administration's practice of separating families and ordered that all separated families be reunited within 30 days. The judge ruled that children under age 5 must be reunited with their parents within 14 days, all children must have phone contact with their parents within 10 days, children could be separated at the border only if accompanying adults presented an immediate danger to them, and parents were not to be removed unless they had been reunited with their separated children.", "In response to the June 26 injunction, the Trump Administration reportedly instructed DHS to provide all parents with final orders of removal and whose children were separated from them with two options. The first was to return to their countries of origin with their children. This option fulfilled the mandate from the June 26 court order to reunite families but also forced parents and children to abandon any claims for asylum. The second option was for parents to return alone to their country of origin. This option would leave the children in the United States to apply for asylum on their own. Parental decisions were to be recorded on a new ICE form. ", "On July 9, 2018, Judge Dolly Gee of the U.S. District Court for the Central District of California, which oversees the Flores Settlement Agreement, ruled against a DOJ request to modify the agreement to permit children to remain with their parents in family detention. Judge Gee held that no basis existed for amending the court's original decision requiring the federal government to release alien minors in immigration detention after 20 days, regardless of any unlawful entry prosecution of the parents. ", "On July 10, ICE officials reportedly indicated that parents reunited with their children would be enrolled in an alternative detention program, such as the use of ankle bracelets that permit electronic monitoring, and then released into the U.S. interior, essentially reverting to the prior policy that has been labeled by some as \"catch and release.\" DOJ continued to maintain that its zero tolerance policy was in effect.", "On July 11, 2018, in response to the requirements of the ACLU lawsuit, ORR certified a list of 2,654 children that the agency stated were in its custody at the time of the June 26 injunction that it believed had been separated from their parents and whose parents met the lawsuit's class definition. According to a subsequent HHS Office of Inspector General (OIG) report, one or more data sources showed that an additional 946 children may have been separated from family members at the time of apprehension, but their family members did not meet the criteria needed for inclusion in the lawsuit.", "On July 16, 2018, in response to concerns expressed by the ACLU about potential abrupt deportations following family reunification, Judge Sabraw temporarily halted, for one week, the deportations of parents who had been reunited with their children. The judge issued the stay of deportations to provide parents slated for removal with a week's time to better understand their legal rights regarding asylum or other forms of immigration relief for themselves and their children.", "On July 16, 2018, Jonathan White, Deputy Director for Children's Programs at the Office of Refugee Resettlement, testified before Judge Sabraw that ORR had identified 2,551 separated children in its custody ages 5 to 17 and had matched 2,480 to their parents, while 71 children's parents remained unidentified. ORR was undertaking intensive background checks to ensure that separated children were reunited with their actual parents and did not face personal security risks such as child abuse. According to White, 1,609 parents of separated children remained in ICE custody. White noted that ICE was also conducting its own security checks and at that point had cleared 918 parents, failed 51 parents, and had 348 parents with pending clearances. As of July 16, 2018, ICE had approved about 300 children for release to be reunited with their parents. ", "On July 18, 2018, HHS submitted a \"Tri-Department Plan\" in coordination with DHS and DOJ explaining actions the agencies were taking to reunify Ms. L v. ICE class members with their children. These steps include conducting and reviewing background checks of parents, confirming parentage, assessing child safety, interviewing parents, and reuniting families.", "As of July 19, 2018, the Administration had reportedly reunified 364 of the 2,551 children ages 5 to 17. Apart from the parents of those children, 1,607 parents were eligible to be reunited with their children, 719 of whom had final orders of deportation. Another 908 parents were not expected to be eligible for reunification because they possessed criminal backgrounds or required \"further evaluation.\"", "On September 6, 2018, DHS and HHS proposed new regulations that would effectively terminate the Flores Settlement Agreement and replace it with formal regulations governing the \"apprehension, processing, care, custody, and release\" of minor children. The primary provision in these proposed regulations would be the authority to hold migrant children and their parents until their cases have been adjudicated. Whether federal courts will impose injunctions on or rule against the regulations based on their inconsistency with the Flores Settlement Agreement is not yet known.", "In October 2018, it was widely reported that the Administration was considering alternative immigration enforcement policies involving family separation to reduce the persistent and relatively high level of unauthorized migrants seeking asylum at the Southwest border. One of these approaches, a \"binary choice\" policy, would give detained parents the option of keeping their children with them in immigration detention during the pendency of their immigration cases or being separated from their children, who would be referred to ORR shelters, including possible foster care. This option gained traction as a large and expanding migrant group originating from Honduras, referred to as the migrant \"caravan,\" garnered extensive media attention as it made its way through Central America and Mexico. As of this writing, DHS has not taken any action with regard to this proposed policy.", "Apart from the number of separated children who have been included in the Ms. L. v. ICE lawsuit, other figures emerged on the total number of family separations that have occurred more generally. For example, on October 12, 2018, Amnesty International (AI) published a report citing statistics provided to the organization by CBP indicating that 6,022 \"family units\" had been separated between April 19, 2018, and August 15, 2018. These cases, combined with the 1,768 family separations reported by DHS between October 1, 2016, and February 28, 2018 (the 1,065 in FY2017 plus the 703 in the first five months of FY2018 noted separately above) indicate that CBP has reported a total of 7,790 family separations to either CRS or AI. This total excludes an unknown number of family separations occurring between March 1 and April 18, 2018. According to AI, it also may exclude an unknown number of families that were separated after requesting asylum at U.S. ports of entry.", "In January 2019, HHS's OIG issued a report on ORR's challenges identifying all separated children, ultimately concluding that \"the total number of children separated from a parent or guardian by immigration authorities is unknown.\" The report cited limitations with both its information technology system for tracking such children as well as the complexity of determining which children should be classified as separated. According to this report, ORR's review of new information acquired between July and December 2018 indicated that an additional 162 children had met the criteria to be included in the Ms. L. v. ICE lawsuit, and that 79 previously included children had not actually been separated from a parent, changing the total from 2,654 to 2,737 children in the lawsuit.", "On February 7, 2019, a representative from HHS's OIG testified before Congress that DHS was continuing to separate children from their parents, although at a lower rate than during the zero tolerance policy of May-June 2018. The testimony noted that while DHS routinely separates families if parents have a criminal history, DHS had not provided HHS with sufficient information to facilitate appropriate placement within the ORR shelter system. The testimony also noted that \"thousands more\" children were likely separated prior to June 26, 2018, but, lacking any formal system for tracking such separations, the witness could not provide more precise figures.", "On February 21, 2019, the Joint Status Report filed on the status of a revised total of 2,816 children (2,709 ages 5 and above and 107 under age 5) included in the Ms. L. v. ICE lawsuit indicated that 2,735 had been reunited with their parents. The statuses of the remaining children are described in the report largely as follows: being determined upon further review to have not been separated from their parents; not reunited because of potential safety issues with the parent; and not being reunited because deported parents confirmed they wanted to allow the child to remain in the United States. In addition, the report also indicated that up to 249 additional children not part of the Ms. L. v. ICE lawsuit had been separated between June 27, 2018 (the day after the lawsuit was filed), and January 31, 2019. According to ICE, the basis for separation was largely \"parent criminality, prosecution, gang affiliation, or other law enforcement purpose.\" ", "On February 21, 2019, Texas Civil Rights Project released a report describing the findings from interviews with 272 adults who had experienced family separation subsequent to the President's executive order. The interviewees, a subset of almost 10,000 screened immigrants who were prosecuted for immigration violations at the Southwest border, had indicated to screeners that they had been separated from their children. The data, the first on family separation collected on a large scale by an organization outside the federal government, indicated that since the zero tolerance policy was terminated, a considerable number of family separations had occurred between minor children and relatives other than parents and legal guardians. As noted above, the INA defines an unaccompanied child as an unauthorized minor under age 18 who is not in the care and custody of a parent or legal guardian. According to DHS, minor children apprehended at the border who are accompanied by older siblings, cousins, aunts, uncles, grandparents, and other relatives who are not parents or legal guardians must be treated as unaccompanied alien children, separated from their accompanying relatives, and turned over to the custody of ORR. DHS reportedly does not count such related pairs of individuals as family units in its statistics, raising concerns among advocates that current CBP statistics may not fully capture the extent of family separation among apprehended migrants."], "subsections": []}]}, {"section_title": "Policy Perspectives", "paragraphs": ["Perspectives on the zero tolerance policy generally divide into two groups. Those who support greater immigration enforcement point to recent surges in family unit migration and a substantial backlog of asylum cases that are straining DHS and DOJ resources, potentially compromising the agencies' abilities to meet their outlined missions. Those who advocate on behalf of immigrants decry the Administration's treatment of migrants as unnecessarily harsh and counterproductive. "], "subsections": [{"section_title": "Enforcement Perspectives", "paragraphs": ["DHS and DOJ contend that the policy enforces existing law and is needed to reduce illegal immigration. DHS notes that foreign nationals attempting to enter the United States between ports of entry or \"without inspection\" are committing a crime punishable under the INA as a misdemeanor on the first occasion and a felony for every attempt thereafter. ", "DHS maintains that it has a long-standing policy of separating children from adults when children are at risk because of threats from human trafficking or because the familial relationship is suspect. DHS also maintains that it does not have a formal policy of separating parents from children for deterrence purposes, and it follows a standard policy of keeping families together \"as long as operationally possible.\" According to DHS, the agency has \"a legal obligation to protect the best interests of the child whether that is from human smugglings, drug traffickers, or nefarious actors who knowingly break [U.S.] immigration laws and put minor children at risk.\" Accordingly, DHS considers it appropriate to treat children of apprehended parents as UAC. ", "DHS posits that while family separation is an unfortunate outcome of stricter enforcement of immigration laws and criminal prosecution of illegal entry and reentry, it is no different than the family separation that occurs in the U.S. criminal justice system when parents of minor children commit a crime and are taken into criminal custody. Attorney General Sessions has stated that parents who do not want to be separated from their children should simply not attempt to cross the U.S. border illegally.", "DHS Secretary Nielsen justified the zero tolerance policy with statistics showing a 223% increase in illegal border crossings and inadmissible cases along the Southwest border between April 2017 and April 2018. Similar increases in monthly apprehensions between years were cited for family units and unaccompanied alien children. Secretary Nielsen also stated that while the apprehension figures \"are at times higher or lower than in years past, it makes little difference,\" characterizing them as unacceptable either way. DHS officials cite results of policies imposed at the Border Patrol's El Paso sector (covering West Texas and New Mexico) for part of 2017, where a similar family separation policy reduced the number of illegal family border crossings by 64%.", "DHS notes that its policy reflects President Trump's January 2017 Executive Order 13767 on border security directing executive branch departments and agencies to \"deploy all lawful means to secure the Nation's Southwest border, to prevent further illegal immigration into the United States, and to repatriate illegal aliens swiftly, consistently, and humanely.\" DHS further contends that parents who attempt to cross illegally into the United States with their children not only put their children at grave risk but also enrich transnational criminal organizations to whom they pay smuggling fees. DHS argues that some parents, aware of the limited amount of family detention space, intentionally use their children as shields from detention and anticipate that they will be viewed, as they had been in prior years, as low security risks. DHS points to unpublished intelligence reports describing cases where unrelated adults have used or trafficked children in order to avoid immigration detention. DHS and other observers also note that asylum requests have increased considerably, a trend that raises concerns about possible fraudulent asylum claims and the misuse of asylum claims to enter and remain in the United States.", "DHS notes that ICE and ORR both play a role in family reunification and characterizes the process as \"well-coordinated.\" DHS maintains that it has procedures in place to connect separated family members and ensure that parents know the location of minors and can regularly communicate with them. Mechanisms to facilitate such communication include posted information notices in ICE detention facilities, an HHS Adult Hotline and email inquiry address, and an ICE call center and email inquiry address. DHS and ORR are using DNA testing to confirm familial ties between parents and children."], "subsections": []}, {"section_title": "Immigrant Advocacy Perspectives", "paragraphs": ["Immigrant advocacy organizations argue that migrant families are fleeing a well-documented epidemic of gang violence from the Northern Triangle countries of El Salvador, Guatemala, and Honduras. They have criticized the practice of family separation because it seemingly punishes people for fleeing dangerous circumstances and seeking asylum in the United States. They posit that requesting asylum is not an illegal act, Congress created laws that require DHS to process and evaluate claims for humanitarian protection, DHS must honor congressional intent by humanely processing and evaluating such claims, and many who request asylum have valid claims and compelling circumstances that merit consideration. ", "Immigrant advocates have also criticized the Administration for creating what they consider to be a debacle of its own making, characterized by frequently changing policies and justifications, what some describe as an uncoordinated implementation process, and the absence of an effective plan to reunify separated families. In some cases, records linking parents to children reportedly may have disappeared or been destroyed, hampering efforts to establish relationships between family members. Media reports have described obstacles to reuniting families after separation, including a lack of communication between federal agencies, the absence of information about accompanying children collected by CBP at the time of apprehension, the inability of ICE detainees to receive phone calls without special arrangements, and a cumbersome vetting process to ensure children's safe placement with parents. Similar observations have since been made by government agencies. In addition, while DOJ typically detains and prosecutes parents for illegal entry at federal detention centers and courthouses near the U.S.-Mexico border, ORR houses their children at shelters geographically dispersed in 17 states, in some cases thousands of miles away from the parents.", "Child welfare professionals assert that family separation has the potential to cause lasting psychological harm for adults and especially for children. Some point to the findings of a DHS advisory panel as well as those of other organizations that discourage family detention as neither appropriate nor necessary for families and as not being in children's best interests.", "Some immigration observers question the Administration's ability to marshal resources required to prosecute all illegal border crossers given that Congress has not appropriated additional funding to support the zero tolerance policy. One news report, for example, noted that 3,769 foreign nationals were convicted of illegal entry in criminal courts during March 2018, a month in which 37,383 foreign nationals were apprehended for illegal entry. Given the relative size of the task they face, observers question how DOJ and DHS can channel fiscal resources to meet this objective without compromising their other missions. They contend that the policy is counterproductive because it prevents CBP from using risk-based strategies to pursue the most egregious crimes, thereby making the Southwest border region less safe and more prone to criminal activity. Some have suggested that the zero tolerance policy is diverting resources from, and thereby hindering, other DHS operations.", "Some in Congress have criticized the family separation policy because of its cost in light of alternative options, such as community-based detention programs. They cite, for example, the Family Case Management Program (FCMP), which monitored families seeking asylum and demonstrated reportedly high compliance rate with immigration requirements such as court hearings and immigration appointments. The FCMP, which began in January 2016, was terminated by the Trump Administration in April 2017. According to DHS, the FCMP average daily cost of $36 reportedly exceeded that of \"intensive supervision\" programs ($5-$7 daily), although both programs are considerably lower than the average daily cost of family detention ($319).", "More broadly, immigration advocates contend that the Administration is engaged in a concerted effort to restrict access to asylum and reduce the number of asylum claims. They caution that prosecuting persons who cross into the United States in order to present themselves before a CBP officer and request asylum raises concerns about whether the United States is abiding by human rights and refugee-related international protocols. They note a considerable current backlog of pending defensive asylum cases, which numbered almost 325,000 (45%) of the roughly 720,000 total pending immigration cases in EOIR's docket as of June 11, 2018. They also cite Attorney General Sessions's recent decision to substantially limit the extent to which immigration judges can consider gang or domestic violence as sufficient grounds for asylum. Such efforts could have the unintended effect of sustaining illegal immigration flows of desperate foreign nationals fleeing violent circumstances, particularly from Northern Triangle countries."], "subsections": []}]}, {"section_title": "Congressional Activity", "paragraphs": ["Given that this topic is developing rapidly, bills discussed below do not reflect all legislation or amendments introduced to date, or more recent developments. Instead, the bills presented here are intended to illustrate the range of legislative proposals to address family separation in the current context."], "subsections": [{"section_title": "116th Congress", "paragraphs": ["Bills introduced during the 116 th Congress that are related to family separation are intended to prevent or limit the practice. These include H.R. 883 / S. 271 , the Families Belong Together Act, which would grant humanitarian parole and/or LPR status to separated parents and children upon request. Likewise, H.R. 541 / S. 292 , the Keep Families Together Act (similar to H.R. 6135 / S. 3036 introduced in the 115 th Congress) contains provisions to keep families together during all stages of processing following apprehension at a U.S. border, plus protections against the prosecution for illegal border crossing of asylum seekers and grantees. H.R. 1012 , the REUNITE Act, includes provisions that would facilitate the expeditious reunification of separated families.", "H.J.Res. 31 , the Consolidated Appropriations Act, 2019, included additional funding to increase the number of participants in Alternatives to Detention (ATD) programs; additional ICE staffing dedicated to the management of ATD immigration cases, particularly those of asylum applicants; and the Family Case Management Program (FCMP), an alternative to family detention. The legislation directs ICE to prioritize both the use of ATD programs for families and the adjudication timeline for cases of individuals enrolled in ATD, particularly those of families and asylum seekers."], "subsections": []}, {"section_title": "115th Congress", "paragraphs": ["A number of bills were introduced in the 115 th Congress in response to family separation resulting from the Administration's zero tolerance policy regarding the prosecution of illegal border crossing. With the exception of H.R. 6136 , which failed to pass in the House by a vote of 121-301, none of the bills introduced saw congressional action.", "Bills that emphasized immigration enforcement included H.R. 6182 , the Codifying President Trump's Affording Congress an Opportunity to Address Family Separation Executive Order Act, which would have provided statutory authority for President Trump's executive order within the INA; H.R. 6173 , which would have clarified standards for family detention; and Section 3102 of H.R. 6136 , the Border Security and Immigration Reform Act of 2018, which would have permitted children accompanied by parents to remain in DHS custody during the pendency of a parent's criminal prosecution, rather than being referred to ORR and treated as UAC. On July 11, 2018, similar amendment language was included in an appropriations bill to fund the Departments of Labor, Health and Human Services, and Education, that was approved by the House Appropriations Committee. H.R. 6204 , the Families First Act of 2018, included similar provisions, asylum reforms, and provided increased funding for family unit facilities, personnel, and judges, among other provisions. ", "Bills that intended to prevent or limit family separation included H.R. 6135 / S. 3036 , the Keep Families Together Act, and H.R. 6236 , the Family Unity Rights and Protection Act, both of which contained provisions to keep families together during all stages of processing following apprehension at a U.S. border; H.R. 6232 , the Preventing Family Separation for Immigrants with Disabilities Act, which would have prohibited family separation for individuals with developmental disabilities; and H.R. 6172 , the Reunite Children with Their Parents Act, which would have required DHS and DOJ to reunite minor children already separated from their parents.", "Other bills, such as H.R. 6181 / H.R. 6190 / S. 3093 , the Keep Families Together and Enforce the Law Act, would have maintained family unity by making the Flores Settlement Agreement and related laws and regulations inapplicable to children who are accompanied by adults when they are apprehended at a U.S. border. H.R. 6195 / S. 3091 , the Protect Kids and Parents Act, would have limited the separation of families seeking asylum by mandating that they be housed together, and facilitated asylum processing (e.g., by adding additional immigration judges and DHS personnel and establishing asylum processing deadlines), among other provisions."], "subsections": [{"section_title": "Appendix. Trends in Alien Apprehensions", "paragraphs": ["Increasing numbers of apprehensions of Central American families and children are occurring within the context of relatively low historical levels of total alien apprehensions ( Figure A-1 ). ", "Apprehensions at the Southwest border had peaked at 1.62 million in 1986, the year Congress enacted the Immigration Reform and Control Act (IRCA), which gave legal status to roughly 2.7 million unauthorized aliens residing in the United States. After dropping for multiple years, apprehensions increased again, climbing from 0.85 million in FY1989 to an all-time high of 1.64 million in FY2000. Apprehensions generally fell after that (with the exception of FY2004-FY2006), reaching a 40-year low of 327,577 in FY2011. They have fluctuated since that point, declining even further in some years. For the first four months of FY2019, apprehensions at the Southwest border reached 201,497.", "The national origins of apprehended aliens have shifted considerably during the past two decades ( Figure A-2 ). In FY2000, for example, almost all aliens apprehended at the Southwest border (98%) were Mexican nationals. As recently as FY2011, Mexican nationals made up 84% of all apprehensions. However, beginning in FY2012, foreign nationals from countries other than Mexico made up a growing percentage of total apprehensions and for most years after FY2013, they made up the majority. In the first four months of FY2019, \"other-than-Mexicans\" comprised most (78%) of total alien apprehensions on the Southwest border. ", "Among demographic categories, persons in family units and unaccompanied children currently make up the largest share of total alien apprehensions at the Southwest border ( Figure A-3 ). According to CBP Commissioner Kevin McAleenan, single adult males made up over 90% of arriving aliens in the past. However, in the first four months of FY2019, family units and unaccompanied children comprised roughly 60% of all apprehended aliens. ", "CBP data on family unit apprehensions at the Southwest border are publicly available starting in FY2012, when they numbered just over 11,000. Since then, family unit apprehensions have increased considerably, reaching a peak of 107,212 in FY2018. In the first four months of FY2019, CBP apprehended 99,901 family units, which, if extrapolated to the remainder of FY2019, yields a projected estimate of almost 300,000 family unit apprehensions, exceeding the annual levels of all prior fiscal years. CBP data on apprehensions of unaccompanied alien children at the Southwest border from FY2012 onward indicate a peak of 68,541 apprehensions in FY2014 and 20,123 apprehensions in the first four months of FY2019.", "Since FY2012, the composition of family unit apprehensions by origin country has shifted from mostly Mexican (80%) to mostly El Salvadoran, Guatemalan, and Honduran (96%) ( Figure A-4 ). Among these three Northern Triangle countries, the percentage of apprehensions from El Salvador, after increasing for several years, has recently declined, from 35% of all family unit apprehensions in FY2016 to 9% in the first four months of FY2019, while the percentage from Guatemala has increased steadily from 3% in FY2012 to 51% in FY2019. ", "Among unaccompanied alien children apprehended at the Southwest border, a similar country-of-origin compositional shift has also occurred. The percentage of apprehended unaccompanied children originating from Mexico declined from 57% in FY2012 to 15% in the first four months of FY2019, while the percentage of apprehended unaccompanied children from the Northern Triangle countries increased from 42% to 82% over the same period."], "subsections": []}]}]}]}}
{"id": "R45485", "title": "Fifth-Generation (5G) Telecommunications Technologies: Issues for Congress", "released_date": "2019-01-30T00:00:00", "summary": ["Since the first mobile phones were made available in the 1980s, telecommunication providers have been investing in mobile networks to expand coverage, improve services, and attract more users. First-generation networks supported mobile voice calls but were limited in coverage and capacity. To address those limitations, providers developed and deployed second-generation (2G) mobile networks, then third-generation (3G), and fourth-generation (4G) networks. Each generation offered improved speeds, greater capacity, and new features and services.", "In 2018, telecommunication providers began deploying fifth-generation (5G) networks to meet growing demands for data from consumer and industrial users. 5G networks are expected to enable providers to expand consumer services (e.g., video streaming, virtual reality applications), support the growing number of connected devices (e.g., medical devices, smart homes, Internet of Things), support new industrial uses (e.g., industrial sensors, industrial monitoring systems), perform advanced data analytics, and enable the use of advanced technologies (e.g., smart city applications, autonomous vehicles).", "5G is expected to yield significant economic benefits. Market analysts estimate that in the United States, 5G could create up to 3 million new jobs and add $500 billion to the nation's gross domestic product (GDP). Globally, analysts estimate that 5G technologies could generate $12.3 trillion in sales activity across multiple industries and support 22 million jobs by 2035. Experience has shown that companies first to market with new products can capture the bulk of the revenues, yielding long-term benefits for those companies and significant economic gains for the countries where those companies are located. Hence, technology companies around the world are racing to develop 5G products, and some countries (i.e., central governments) are acting in support of 5G deployment. This competition to develop 5G products and capture the global 5G market is often called the \"race to 5G.\"", "In the race to 5G, the United States is one of the leaders, along with China and South Korea. Each country has adopted a different strategy to lead in 5G technology development and deployment. China's central government is supporting the deployment of 5G infrastructure in China. China has a national plan to deploy 5G domestically, capture the revenues from its domestic market, improve its industrial systems, and become a leading supplier of telecommunications equipment to the world. In South Korea, the central government is working with telecommunications providers to deploy 5G. South Korea plans to be the first country to deploy 5G nationwide, and to use the technology to improve its industrial systems. In the United States, private industry is leading 5G deployment. U.S. providers, competing against each other, have conducted 5G trials in several cities and were the first in the world to offer 5G services commercially. The U.S. government has supported 5G deployment, making spectrum available for 5G use and streamlining processes related to the siting of 5G equipment (e.g., small cells).", "While each country has taken a different approach to capturing the 5G market, there are factors that drive the timeline for all deployments, including international decisions on standards and spectrum. In the United States, 5G deployment may also be affected by the lengthy spectrum allocation process, resistance from local governments to federal small cell siting rules, and limitations on trade that may affect availability of equipment.", "The 116th Congress may monitor the progress of 5G deployment in the United States and the U.S. position in the race to 5G. Congress may consider policies that may affect 5G deployment, including policies related to spectrum allocation, trade restrictions, and local concerns with 5G deployment. Policies that support 5G deployment while also protecting national and local interests could provide significant consumer benefits, help to modernize industries, give U.S. companies an advantage in the global economy, and yield long-term economic gains for the United States. In developing policies, Members may consider the economic and consumer benefits of 5G technologies, as well as other interests, such as the need to preserve spectrum for other users and uses, the protection of national security and intellectual property when trading, the privacy and security of 5G devices and systems, and the respect of local authorities and concerns during 5G deployment."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Telecommunication providers and technology companies around the world have been working together to research and develop new technology solutions to meet growing demands for mobile data from consumers and industrial users. Fifth-generation (5G) mobile technologies represent the next iteration of mobile communications technologies that were designed to improve current (e.g., 3G, 4G) mobile networks. 5G networks are expected to provide faster speeds, greater capacity, and the potential to support new features and services. ", "5G technologies were developed to accommodate the increasing demands for mobile data (i.e., more people using more data on more devices). 5G technologies are expected to serve current consumer demands and future applications (e.g., industrial Internet of Things, autonomous vehicles). 5G technologies are expected to yield significant consumer benefits (e.g., assisting the disabled, enabling telemedicine), industrial benefits (e.g., automated processes, increased operational efficiencies, data analytics), and economic benefits (e.g., new revenues, new jobs). ", "Past experience has shown that companies first to market with new technologies capture the bulk of the revenues. Hence, companies around the world are racing to develop and deploy 5G technologies, and many countries (e.g., central governments), seeing potential for economic gain, are taking action to support 5G deployment. This competition between companies and countries to lead 5G technologies and capture the bulk of the revenues is often called the \"race to 5G.\"", "In the United States, Congress has monitored the progress of 5G deployment, and the U.S. position in the race to 5G. Congress has made spectrum available for 5G use, and directed the federal government to identify additional spectrum for future 5G use. Congress has also streamlined processes for deploying 5G equipment (also known as small cells ) on federal land; additionally, in 2018, legislation was introduced in the Senate which would have streamlined processes for deploying 5G small cells. To protect national security interests and to ensure the security of 5G networks, Congress restricted federal agencies from purchasing certain foreign-made telecommunications equipment. ", "This report provides a background on mobile technologies, and addresses the race to 5G, focusing on three leading countries\u2014the United States, China, and South Korea. This report discusses factors affecting 5G deployment, and U.S. actions to support 5G deployment, such as actions related to small cells and national security. Finally, this report discusses near-term policy considerations for Congress related to the deployment of 5G networks, and future policy considerations, including the privacy and security of 5G networks and devices."], "subsections": []}, {"section_title": "Background on Mobile Technologies", "paragraphs": ["The first mobile phones appeared in the 1980s. Since then, mobile phone use has increased exponentially. The number of smartphone users in the United States has grown from nearly 63\u00a0million in 2010 to an estimated 238 million in 2018. Worldwide, there are an estimated 4.5\u00a0billion mobile phone users, 2.5 billion of which are smartphone users. More people are using more data on more mobile devices; as a result, demand for mobile data is rapidly increasing.", "Telecommunication companies continually invest in their networks to provide faster, more reliable service, expand the capacity of networks to meet growing demands for data, and support new technology uses. Approximately every 10 years, a new technology solution emerges from industry studies and research that offers vastly improved speeds, supports new features and functions, and creates new markets and new revenue for providers. These technologies offer such significant improvements to networks and devices that they change the way people use mobile communications, and thus represent the next generation of mobile technology. ", "In mobile communications, there have been five generations of technology. Figure 1 provides an overview of the technologies. First-generation (1G) technologies brought consumers the first mobile phone. The phone and the service were expensive, and the basic analog networks offered voice-only services, and limited coverage and capacity. Second-generation (2G) technologies used digital networks, which supported voice and texting. Networks were expanded and phones were made more affordable, increasing adoption. Third-generation (3G) technologies supported voice, data, and mobile access to the internet (e.g., email, videos). Smartphones were introduced, and people began using mobile phones as computers for business and entertainment, greatly increasing demand for data. Fourth-generation (4G) technologies offered increased speeds, and true mobile broadband that could support music and video streaming, mobile applications, and online gaming. Providers offered unlimited data plans and mobile devices that could be used as hotspots to connect other devices to the network, further increasing demand for mobile data. ", "Each generation was built to achieve certain levels of performance (e.g., certain levels of speed, higher capacity, added features). To be called a \"3G network\" implied a specific network architecture and specific technologies were used, certain levels of speeds were offered, and new features were supported. In earlier generations, companies and countries adopted different technical standards to achieve performance requirements. In 3G and 4G, companies and countries began building networks to the same standards. This enabled equipment to be used in many countries, enabled manufacturers to achieve economies of scale, and enabled carriers to speed deployment. For example, for 4G, companies and countries adopted Long-Term Evolution (LTE) standards, which redefined the network architecture to offer greater speeds and capacity. ", "Fifth-generation (5G) networks utilize 5G standards, which use new technologies and deployment methods to provide faster speeds, greater capacity, and enhanced services. 5G networks are expected to meet the increasing demand for data from consumers, and to support new services. 5G was also designed to meet growing demands for data from industrial users, and to support the growing use of mobile communications technologies across multiple industries (e.g., crop management systems, public safety applications, new medical technologies)."], "subsections": [{"section_title": "Factors Driving the Need for Improved Wireless Networks", "paragraphs": ["Three factors are driving the need for improved wireless networks. First, there are more people using more data on more devices. Since 2016, more people worldwide have been using more data on mobile devices such as smartphones than on desktops. Globally, mobile data traffic is expected to increase sevenfold from 2016 to 2021, and mobile video is driving that increase. The spectrum used for mobile communications is becoming crowded and congested. Current networks (e.g., 3G, 4G) cannot always meet consumer demands for data, especially during periods of heavy use (e.g., emergencies). During periods of heavy use, consumers may experience slow speeds, unstable connections, delays, or loss of service.", "Second, the total number of internet-connected devices, both consumer devices (e.g., smart watches, smart meters) and industrial devices (e.g., sensors that assist with predictive maintenance), has increased. Market research indicates that in 2018 there were 17.8 billion connected devices globally; 7 billion of which were not smartphones, tablets, or laptops, but other connected devices (e.g., sensors, smart locks) that allow users to monitor and manage activities through a mobile device, such as a smartphone, further increasing demand on networks.", "Third, industries are relying on internet-connected devices in everyday business operations. Companies use devices to track assets, collect performance data, and inform business decisions. These devices, when connected, form the Internet of Things (IoT)\u2014the collection of physical objects (e.g., health monitors, industrial sensors) that interconnect to form networks of devices and systems that can collect and compute data from many sources. More advanced IoT devices (e.g., autonomous cars, emergency medical systems) need networks that can provide persistent (\"always-on\") connections, low latency services (i.e., minimal lag time on commands), greater capacity (e.g., bandwidth) to access and share more data, and the ability to quickly compile and compute data. These are features that current mobile networks cannot consistently support."], "subsections": []}, {"section_title": "The Emergence of 5G Technologies", "paragraphs": ["Since 2012, telecommunications standards development organizations (SDO), with the help of their industry partners, have been researching ways to improve mobile communication networks; link people, devices, and data through a smart network; and enable a \"seamlessly connected society.\" Companies are developing new technologies that are expected to improve networks, meet the growing demand for data, support IoT applications, and enable a seamlessly connected society. ", "Telecommunication and technology companies experimented with new, higher-band spectrum (i.e., millimeter waves) that could provide greater bandwidth and speed. However, these waves cannot travel long distances or penetrate obstacles (e.g., trees, buildings); companies worked together to develop technologies that capitalize on the strengths of this spectrum (e.g., bandwidth and speed) and address its shortfalls through innovative technology solutions (e.g., placing smaller cell sites close together to relay signals around obstacles and over longer distances).", "The research identified several solutions that offer vastly improved speeds (from 10 times to 100 times faster than 4G networks), greater bandwidth, and ultra-low latency service (i.e., 1-2 milliseconds (ms) of lag time as opposed to 50 ms for 4G). These solutions address many of the perceived shortcomings of existing networks and offer new features that could support and expand the use of more advanced technologies for consumers and businesses."], "subsections": []}, {"section_title": "Uses of 5G Technologies", "paragraphs": ["5G networks offer the increased bandwidth, constant connectivity, and low latency services which can enhance and expand the use of mobile technologies for consumers and businesses. Consumers are to be able to download a full-length, high-definition movie on their mobile device in seconds; engage in video streaming without interruption; and participate in online gaming anywhere. 5G technologies are expected to create new revenue streams for technology companies and telecommunications providers. ", "5G technologies are also expected to support interconnected devices (e.g., smart homes, medical devices), and advanced IoT systems, such as autonomous vehicles, precision agriculture systems, industrial machinery, and advanced robotics. IoT technologies are expected to be integrated into industrial systems to automate processes and to optimize operational efficiencies. 5G networks are expected to support the growing IoT industry, enabling device makers to develop and deploy new IoT devices and systems across multiple industries, and sell IoT products globally, yielding significant economic gains for technology companies and for the countries where those companies are located.", " Figure 1 shows an interconnected tractor system, and the progression of a single product to a connected product to an IoT system that can process data from many sources to inform decisions. "], "subsections": []}]}, {"section_title": "Race to 5G", "paragraphs": ["During the deployment of 4G networks, U.S. companies took the lead in developing new technologies. U.S. companies drove industry standards, brought products to market, gained first-mover advantage, and achieved significant economic gains for themselves and the United States. Analysts conclude that \"U.S. leadership on 4G added nearly $100 billion to [the U.S.] economy and brought significant economic and consumer benefits.\" ", "Industry analysts predict 5G will generate new revenue for technology companies and for the countries where those companies are located. For example, in a study commissioned by the Cellular Telecommunications and Internet Association (CTIA), IHS Markit estimated that 5G could produce up to $12.3 trillion in global sales across multiple industries by 2035. In another analysis, Accenture reports that U.S. telecommunication providers are expected to invest approximately $275 billion in 5G infrastructure, which could create up to 3 million new jobs in the United States and add up to $500 billion to the nation's GDP. ", "Past experience has shown that companies that are first to market capture the bulk of the economic benefits from new technologies. Hence, companies around the world are racing to bring 5G products to markets. Technology companies (e.g., network equipment manufacturers, chip makers, smartphone manufacturers, and software companies) are producing 5G equipment and devices for providers. Telecommunications providers are deploying 5G infrastructure and marketing new 5G products to gain domestic market share and increase revenues. Countries around the world (i.e., central governments) are supporting 5G efforts to ensure their companies are first to deploy 5G products and services, and positioned to capture the bulk of the economic benefits from the new technology\u2014to \"win the race to 5G.\""], "subsections": [{"section_title": "5G Leaders", "paragraphs": ["There have been several industry reports on countries leading in 5G. In a 2018 report, Deloitte notes that \"The United States, Japan, and South Korea have all made significant strides toward 5G readiness, but none to the same extent as China.\" A 2017 study by IHS Markit, a data analytics and information services firm, examined the economic activity for seven countries: the United States, China, South Korea, Japan, Germany, United Kingdom, and France. The 2017 IHS Markit study concluded, that based on projected research and development (R&D) and capital expenditure (Capex) investments in 5G from 2020 to 2035, the United States and China are expected to drive and dominate 5G technologies over the next 16 years. ", "More recent reports paint a different picture of 5G leadership. An April 2018 report by Analysys Mason, commissioned by CTIA, concluded that with the first 5G standards approved in December 2017, there was a shift in readiness between nations. In the report, the United States ranked third in readiness behind China and South Korea. According to the report, China is showing greater signs of readiness due to government planning and coordination with industry. The government's \"Made in China 2025\" initiative (released in 2015) and its more recent five-year economic plan (China's 13 th Five-Year Plan for Economic and Social Development Plan for the People's Republic of China, 2016) established a path to gain leadership of 5G. ", "China financed R&D projects, supported Chinese industry efforts to participate in standards development, and collaborated with international partners to test new equipment and technology solutions. China also provided $400 billion in 5G investments, coordinated with companies manufacturing 5G technologies, and worked with Chinese providers to deploy 5G infrastructure to achieve its goal to launch 5G by 2020. Analysts report that China's technology companies and telecommunications providers are committed to the national plan and 2020 timeline.", "Industry analysts have pointed to other actions by China that indicate China is positioning itself to dominate in 5G technologies. Analysts note that China has set targets to increase the use of Chinese equipment and components in its 5G networks. China wants locally-made chips to be used in 40% of smartphones sold domestically by 2025, and domestic firms to have 60% of the market in industrial sensors. China plans to deploy domestically; capture the revenues from its massive domestic market (e.g., consumers and industrial users); upgrade industrial systems to increase the efficiency, productivity, and competitiveness of Chinese technology companies; build its capacity to develop technology equipment and components; and become a leading supplier of 5G technologies to the world (e.g., network equipment and IoT devices). ", "In the Analysys Mason report, South Korea was positioned ahead of the United States \"based on a strong push for early 5G launch combined with government commitment to achieving 5G success.\" South Korea advanced in 5G readiness due to early investments in R&D and trial deployments at the 2018 Olympics. The early investment in 5G allowed South Korea to claim credit for the first large-scale pilot of 5G technologies.", "Some analysts rank China above the United States in 5G readiness, while other analysts assert that the competitive market in the United States spurs innovation, which could give the United States an edge in the global 5G market. Still others note that given the focus on 5G deployment by several Asian nations (e.g., China, South Korea, and Japan); the large Asian market; and the rapid rate of migration to new technologies in Asia, Asia may emerge as a 5G leader."], "subsections": []}, {"section_title": "Current 5G Deployment Status", "paragraphs": ["The Chinese government has advanced on its plan: investing in R&D, participating and leading in 5G standards development to benefit Chinese firms, engaging in international 5G projects to build knowledge, building capacity to provide 5G equipment, and reserving spectrum for 5G use. ", "A 2018 study found that since 2015, China has outspent the United States by $24 billion in 5G infrastructure, having built 350,000 new cell sites, while U.S. companies have built 30,000 in the same timeframe. Recent reports indicate that after first 5G technical specifications were released in December 2017, Chinese providers began deploying 5G cell sites at a rapid pace, and announced plans to launch 5G in 2019, ahead of the 2020 timeline. Industry observers called this the \"China Surge,\" and concluded that China was positioning to win the race to 5G. ", "South Korea is also moving forward on spectrum. In June 2018, South Korea auctioned both mid-band and high-band spectrum for 5G use. And in July 2018, government officials announced its telecommunications providers would work together to build out a nationwide 5G network. Officials argued that a coordinated approach would reduce duplication, save costs, speed deployment, and enable South Korea to be the first to launch a nationwide 5G network. Telecommunication providers committed to the plan and to launching 5G on the same day\u2014a day the government is calling \"Korea 5G Day.\" According to articles from December 2018, South Korea's providers launched fixed 5G to business users on December 1, 2018, and announced plans to launch mobile 5G for consumers in March 2019 when 5G phones become available. ", "In the United States, private telecommunication providers are driving deployment. For example, Verizon launched fixed 5G services in four cities on October 1, 2018. AT&T launched mobile 5G services in 12 cities on December 21, 2018, with at least 19 more cities targeted in 2019. T-Mobile is building out 5G networks in 30 cities and plans to launch 5G services after 5G cell phones are released in 2019. Sprint is moving ahead with its plans to deploy 5G in 9 cities in the first half of 2019. Analysts assert that the United States ranks near the top in readiness due to industry investment in 5G trial deployments and aggressive timelines for commercial deployment. In the United States, Congress has supported 5G deployment by identifying spectrum for 5G use and easing regulations related to the placement of 5G equipment. The FCC has developed a comprehensive strategy to free spectrum for 5G use and accelerate deployment. ", "In the race to 5G, countries are leading in different ways and in different aspects. China assumed a top-down approach, and is leading on infrastructure deployment; however, China faces the same challenges as other countries in terms of spectrum (e.g., managing incumbent users, avoiding interference)\u2014activities that take time. South Korea has auctioned 5G spectrum and is committed to being the first to deploy 5G nationwide; however, its cooperative approach to deployment may thwart competition and innovation needed to develop new 5G products and compete in the global 5G market. In the United States, industry is leading 5G efforts. The government has supported private deployment efforts by identifying and allocating spectrum for 5G use and reducing regulatory barriers for siting of 5G equipment. However, the lengthy spectrum allocation process, competing demands for spectrum, and local resistance to 5G cell siting regulations may slow 5G deployment in the United States; further, a purely market-based approach to deployment may not ensure that all areas and all industries will have access to 5G.", "Some industry analysts contend that the race to 5G has just started and is more of a marathon than a sprint, noting \"Europe was quicker to roll out 2G, and Japan was the first with 3G, but that hardly deterred Apple and Google from dominating the smartphone market.\" 5G technologies have many areas of growth, and opportunities to achieve revenues from both the sale of the technology at initial deployment and the sale of products and services after deployment (e.g., innovative applications, subscription services, IoT devices). Industry analysts note that in the race to dominate the global 5G market, months may not matter; but if the United States falls years behind in deploying 5G networks and developing new 5G technologies, devices, and services, that may affect its ability to compete in the global technology market for many years to come. ", "There are factors affecting 5G deployment in all countries, including international decisions on standards and spectrum, and factors affecting deployment in the United States such as resistance to the placement of 5G infrastructure and trade restrictions. "], "subsections": []}]}, {"section_title": "Factors Affecting 5G Deployment", "paragraphs": ["There are several factors affecting all 5G deployments, including international decisions on standards and spectrum; the management of spectrum (e.g., auctioning spectrum, reconfiguring users to accommodate 5G, establishing agreements to share spectrum); the availability of 5G equipment and devices; and the installation of small cells needed to provide 5G services. "], "subsections": [{"section_title": "Standards", "paragraphs": ["In earlier cellular networks, countries and companies built networks, equipment, and devices to different standards; as a result, not all equipment worked on all networks or in all countries. Technology companies and telecommunication providers saw value in developing standards, to enable technology companies to build to one standard, bring products to market faster, sell equipment globally, achieve economies of scale, and reduce the cost of equipment. ", "Two organizations central to this effort for 5G are the 3 rd Generation Partnership Project (3GPP) and the United Nations International Telecommunications Union (ITU). 3GPP is a collaboration of seven telecommunication SDOs from Japan, China, Europe, India, Korea, and the United States. 3GPP has more than 370 members from leading companies from many nations. Members include leading telecommunication providers (e.g., AT&T, China Mobile, SK Telecom), technology companies (e.g., Intel, Qualcomm, Samsung, Ericsson, Huawei, ZTE), and government agencies. 3GPP is one of many organizations working to build consensus on technical specifications for mobile communications (3G, 4G, and 5G). ", "3GPP members have worked together to develop, test, and build specifications for 5G technologies. In 2018, 3GPP approved two 5G technical specifications:", "In December 2017, 3GPP approved the \"Non-Standalone version of the New Radio standard,\" which supports enhanced mobile broadband (eMBB). These specifications allow carriers to supplement existing 4G networks with 5G technologies to improve speed and reduce latency. In June 2018, 3GPP completed the \"Stand-Alone version of the New Radio standard.\" This specification supports the independent deployment of 5G, using core networks that are designed to support advanced IoT devices and functions. ", "These specifications are important because they define how 5G networks will be designed and deployed, because they set technical specifications for 5G equipment, and because they have support from a wide array of stakeholders. 3GPP plans to submit these 5G specifications to the ITU in June 2019 as part of the global standards development process. If the ITU ratifies the specifications, those specifications would be recognized as the global standard for the technology. Other SDOs submit specifications to ITU as well; however, 3GPP is recognized as the major standards contributor. Thus, many companies and countries are moving forward on 5G plans based on approved 3GPP specifications. ", "3GPP is now focused on technical specifications and performance requirements for advanced functions (e.g., 5G for vehicle-to-vehicle communication, industrial IoT). These specifications are expected to be finalized by 3GPP in 2019; thus, networks, equipment, and devices that can support advanced 5G functions are not expected to arrive until 2020 or later."], "subsections": [{"section_title": "Why Standards Are Important in the \"Race to 5G\"", "paragraphs": ["During the development of 3G technologies, China adopted its own standard to avoid dependence on western technology. While equipment built to those standards was successful in China, the standards were not accepted globally, and equipment could not be successfully exported. Other countries participated in international projects, contributed to international standards, and implemented standards-based networks. ", "By participating in SDOs, a company can shape standards, and ensure that the final standards and requirements for equipment align to its preferred specifications for the product. Companies that are able to gain acceptance of their preferred standards through the standards development process have a head start in bringing products to market and gaining first-mover advantage. This approach is \"much more economical than trying to retrofit a product (and its manufacturing process) after a standard is approved.\" Many countries support industry efforts to participate in standards development. FCC Commissioner O'Rielly noted, \"If standards properly reflect and include our industries' amazing efforts, they promote U.S. technologies and companies abroad, bringing investment, revenues, and jobs to this country.\" ", "For 5G, China played a more cooperative role in standards development, participating in SDOs, leading technical committees, conducting 5G R&D, contributing to 5G specifications, and participating in international projects. Some experts assert that through its participation in SDOs, China is advancing its preferred standards and positioning itself to dominate the global 5G market. As an example, analysts note that many network operators are adopting the 5G Non-Stand Alone standard to leverage their legacy 4G networks as a first step to building out 5G. China is supporting the 5G Stand-Alone standard which would require operators to rebuild core networks and buy new base stations and equipment, and move all countries toward more advanced IoT devices (which China is focused on providing). However, in the development of standards for 5G, SDO members supported both Non-Stand-Alone and Stand-Alone specifications, which enabled them to leverage 4G networks, improve 4G services with 5G technologies, and provide better services as companies plan out 5G deployments. ", "Even before specifications were finalized, some companies and countries advanced 5G plans and launched 5G services. For example, China began deploying 5G infrastructure before 5G specifications were approved, and Verizon launched fixed 5G services using proprietary standards. While these efforts provide some advantages in future deployments, in that companies can prepare for and learn from these deployments, there are also risks. For example, last-minute revisions to the specifications may require China to upgrade those pre-standard 5G sites.", "To offer mobile 5G technologies, companies need 5G phones, which were under development. So while companies began deploying 5G networks once specifications were approved, they would have to wait for 5G phones to offer mobile 5G services. Since 5G phones were slated for release around the same time (spring 2019), most major carriers in the leading countries announced launch dates that were within months of each other. South Korea is expected to launch mobile 5G services in March 2019. T-Mobile announced it would launch mobile 5G services in early 2019, as did Verizon. AT&T announced plans to offer a 5G smartphone in the first half of 2019. Sprint is expected to launch nationwide 5G in the first half of 2019. China Mobile announced plans to introduce 5G service by the end of 2019\u2014ahead of its 2020 target date. ", "Approval of technical specifications is an important milestone in the race to 5G. With approved specifications, technology companies can begin to manufacture equipment and devices. Once equipment become available, telecommunication companies can begin to build out networks and plan their launch of 5G services. "], "subsections": []}]}, {"section_title": "Spectrum Allocation", "paragraphs": ["Another factor driving 5G deployment is spectrum. All wireless technologies use the electromagnetic spectrum to communicate. Spectrum refers to the radio frequencies used to communicate over the airwaves. ", "Most countries have spectrum management agencies. In the United States, the FCC manages spectrum allocation for nonfederal users while the National Telecommunications and Information Administration (NTIA) manages spectrum for federal users. Agencies may assign the rights to use specific frequencies to certain users (e.g., public safety users), or sell the rights to use specific frequencies (e.g., telecommunication companies, broadcasters). Companies deploy infrastructure (e.g., towers, equipment) that will enable communications on their assigned frequencies. Error! Reference source not found. provides an overview of U.S. spectrum allocations in 2008 as an example of how the U.S. spectrum is allocated for various communications (e.g., mobile communications) and for other wireless uses (e.g., garage door openers, satellite radio, GPS). ", "Most mobile devices (e.g., cell phones) use frequencies under 6 gigahertz (GHz) because the frequencies in this segment of the spectrum are conducive to wireless communications. For example, frequencies in this segment of the spectrum can travel long distances enabling coverage across wider areas, and can penetrate buildings and walls easily. However, as more people are using more mobile devices for more purposes, this segment of the spectrum (below 6 GHz) is becoming crowded, which can result in slower speeds, slower connections, and dropped calls.", "In 2015, companies began looking at new spectrum bands that could support mobile communications. Industry researchers identified waves between 30 GHz and 300 GHz (also known as millimeter waves or MMW) that offered greater bandwidth (e.g., higher capacity to handle more traffic) and increased speeds. Telecommunication providers had not considered MMW for mobile communications because the waves are shorter, cannot travel far, cannot travel well through buildings, and tend to be absorbed by trees and rain. Researchers proposed the use of small cells, placed close together, to relay shorter waves across longer distances, and to interconnect them to provide a high-speed network to specific areas, such as a city or a stadium. Typically, telecommunications equipment is designed to function on certain frequencies. Equipment and device manufacturers consider the characteristics of the assigned frequency bands and engineer equipment to take advantage of frequency strengths and mitigate weaknesses. ", "5G relies on multiple spectrum bands. 5G leverages low-band spectrum (below 1 GHz), mid-band spectrum (1 GHz-6 GHz), and high-band (MMW) spectrum. 5G calls for deployment of 5G technologies in high band spectrum (MMW) spectrum to offer ultra-fast services to high-density areas. 5G technologies deployed in mid-band spectrum offer improved capacity and coverage, faster service, and new features to existing customers. 5G technologies deployed in low-band spectrum can provide the widespread coverage needed for many IoT applications. ", "Studies have shown that delays in spectrum allocation can delay deployments, and put countries at a disadvantage in technology markets. Hence, countries are working to identify spectrum in all three bands for 5G. They are also working together, and with industry, to harmonize spectrum (i.e., ensure all countries are using similar frequency bands) to create economies of scale, reduce costs for manufacturers and providers, and promote compatibility (e.g., roaming) across systems. "], "subsections": [{"section_title": "Global Harmonization of Spectrum", "paragraphs": ["Companies around the world are interested in identifying common spectrum for 5G deployment. This would help ensure all companies deploy in the same bands, so that equipment works in all regions. According to one expert, \"Harmonized global spectrum is important because with a commonality of spectrum the 5G ecosystem can optimize resources to achieve economies of scale, [reduce the cost of equipment and devices, and] spur rapid proliferation and adoption.\" Exact harmonization is not necessary; similar ranges of frequencies can support global harmonization. This provides countries (i.e., government agencies responsible for allocating spectrum) with flexibility to accommodate existing users who may be operating in certain bands, and cannot be easily relocated (e.g., military agencies). ", "The ITU works with countries and industries to set standards and harmonize regulations and spectrum use worldwide. In 2019, the ITU is expected to discuss 5G spectrum at its World Radiocommunication Conference (WRC-19). Stakeholders involved in the development of 5G technologies agree that 5G needs spectrum in three key frequency ranges to operate effectively:", "sub-1 GHz to support widespread coverage across urban, suburban, and rural areas, provide in-building coverage, and support IoT devices and services; 1-6 GHz to provide additional capacity and coverage, including the 3.3-3.8 band, which is expected to form the basis of many initial 5G services; and above 6 GHz, including MMW, to provide ultra-high broadband speeds. ", " Figure 3 shows 5G spectrum targets worldwide, and commonalities in spectrum that may help to inform global harmonization of spectrum for 5G. "], "subsections": []}, {"section_title": "U.S. Actions on Spectrum", "paragraphs": ["The FCC has auctioned spectrum previously; hence telecommunication providers have substantial spectrum holdings in different bands, including frequency bands targeted for 5G. For example, T-Mobile is deploying 5G using its 600 MHz spectrum, and Verizon was able to launch 5G services using its 28 GHz spectrum. ", "In 2018, Congress took action to identify additional spectrum for 5G use. In the Consolidated Appropriations Act, 2018, signed into law on March 23, 2018, Congress enacted two provisions related to spectrum. The Repack Airwaves Yielding Better Access for Users of Modern Services Act of 2018 (RAY BAUM'S Act of 2018), encourages the repurposing of federal spectrum to support 5G. The Making Opportunities for Broadband Investment and Limiting Excessive and Needless Obstacles to Wireless (MOBILE NOW) Act, directs the NTIA to study the impact of deploying in MMW band on federal users. ", "The FCC initiated an auction of the 28 GHz band on November 14, 2018. The auction of the 24 GHz band is to follow. The FCC is preparing additional high-band spectrum for auction. With these auctions, the FCC will have released almost 5 GHz of high-band spectrum for 5G. The FCC stated it has \"assigned more high-band spectrum for 5G than any country in the world,\" noting the United States is 4 GHz ahead of China in high-band spectrum for 5G. ", "The FCC has also initiated proceedings to identify mid-band spectrum (e.g., 2.5 GHz, 3.5 GHz, and 3.7-4.2 GHz) for 5G use. The FCC has identified under-utilized mid-band spectrum that could support 5G, and is examining ways in which mid-band spectrum can be shared between users (e.g., educational, satellite, federal). The FCC is working with the NTIA to identify federal mid-band spectrum that can be repurposed for or shared to support commercial 5G use.", "The FCC has also granted applications to deploy in the low band (600 MHz), and has targeted changes for the 800 MHz and 900 MHz bands to support 5G use. Further, the FCC has identified additional spectrum for unlicensed (e.g., Wi-Fi) use that will be needed to support 5G networks. ", "Although the FCC is striving to free up spectrum for 5G use, the United States has a complex spectrum allocation process that requires a lengthy rulemaking process, auction process, and relocation process, which takes time. Industry advocates have urged policymakers to plan, collaborate, and set timelines to expedite the availability of spectrum, and coordinate spectrum auctions so providers can plan spectrum acquisitions and deployments. ", "The Trump Administration has focused on 5G planning. On September 28, 2018, the White House held a \"5G Summit\" with industry and government officials to discuss policies that would help ensure faster deployment of 5G technologies. On October 25, 2018, President Trump signed a Presidential Memorandum calling for a National Spectrum Strategy to assess current and future spectrum needs and support the deployment of 5G through incentives and reduced regulations. ", "Even as the FCC is moving forward on multiple proceedings, U.S. telecommunications executives are arguing that more mid-band spectrum is needed to support 5G deployment. Some policymakers have called for additional spectrum and reduced regulations to spur 5G deployment. Others have stressed the need to ensure 5G benefits are available to all people."], "subsections": []}, {"section_title": "Other Countries' Progress on Spectrum", "paragraphs": ["In comparison, South Korea simultaneously completed auctions of high-band (28 GHz) and mid-band (3.5 GHz) spectrum in June 2018. South Korea's Ministry of Science and Information and Communications Technology (ICT) allowed operators to start using the 5G frequencies in December 2018, in preparation of the country's launch of mobile 5G planned for March 2019. ", "China reserved spectrum for 5G use in 2017, and sought public comment on the planned use of the mid-band spectrum (3.4-3.6 GHz), and millimeter wave spectrum (24.75-27.5 GHz and 37-42.5 GHz) for 5G. During its public comment process, China noted the potential for disruption to existing users, which is a common issue in spectrum allocation. Experts assert that China has an advantage over the United States in freeing spectrum for 5G, in that it can \"exert much stronger control over existing spectrum users.\" Industry experts have noted that China has eliminated \"regulatory red tape to expedite deployment and make it easier for industry to access large blocks of higher frequency spectrum bands.\" In December 2018, China reportedly allocated large swathes of mid-band spectrum to its three state-owned mobile operators, \"preparing the way for large-scale networks testing in 2019, and the launch of commercial 5G services by 2020.\""], "subsections": []}]}, {"section_title": "Equipment and Devices", "paragraphs": ["Just as telecommunications providers are racing to deploy 5G, technology companies and device makers are racing to be the first to deploy 5G equipment and phones, to achieve the economic benefits expected from 5G technologies. ", "U.S. equipment manufacturers are developing 5G equipment and devices. In a July 2018 Senate hearing, Qualcomm announced that it is \"on track to deliver chips that support 5G in both sub-6 GHz and millimeter wave spectrum in time to enable 5G data-only devices to launch before the end of 2018 and for the first 5G smartphones \u2026 to launch in the first half of 2019.\" ", "U.S. equipment manufacturers are benefitting from the race to 5G, supplying other countries with 5G technologies, including China. For example, the American chip-maker, Intel, is working with Chinese telecommunications providers. Similarly, technology suppliers from other countries are supporting U.S. deployments. For example, T-Mobile signed a $3.5 billion agreement with the Swedish telecommunications equipment maker Ericsson to support T-Mobile's 5G plans. ", "Most device makers have announced that 5G phones will be available in 2019. While both Verizon and AT&T launched 5G networks in select areas and offered some 5G services, neither offered access to 5G on a smartphone because 5G smartphones were not yet available. With the adoption of 5G specifications, 5G devices are in production and expected to be available in 2019. ", "As a result, most providers have announced plans to launch 5G services in 2019, after devices are released. For example, both Verizon and AT&T have announced a launch of new Samsung 5G devices in the first half of 2019. South Korean device-maker LG announced that its 5G smartphone is expected to be available in the first half of 2019, as a Sprint exclusive.", "Technology experts have cautioned that since providers are using different spectrum bands to deploy 5G, the first 5G phones may be carrier exclusive (i.e., may only contain one carrier's frequencies). Experts note that \"nobody has figured out how to cram the 28 GHz [spectrum] that Verizon and T-Mobile are using, and AT&T's 39 GHz into one box yet. And while T-Mobile and Verizon are using similar 28 GHz bands, T-Mobile is also putting 5G on the 600 MHz band, which Verizon is not.\" ", "The telecommunications industry is global and co-dependent. Providers partner with technology companies and device makers from around the world to move forward on 5G deployment. The availability of 5G devices will drive adoption and revenues for all telecommunications providers. Hence, the availability of equipment and devices is an important factor in the race to 5G. "], "subsections": []}, {"section_title": "Small Cell Siting", "paragraphs": ["As stated, deployment of 5G systems will rely on a range of technologies and different bands of spectrum. 5G systems using low- to mid-band spectrum can install new 5G equipment on existing cell sites (4G cell sites). This will increase the speed and functionality of existing 4G networks, but will likely not achieve the ultra-fast speeds provided by millimeter wave bands. ", "For deployments that leverage higher bands, particularly above 6 GHz, a much higher density of cell sites is needed as the signals cannot travel as far or through obstacles. To overcome these challenges, providers will place many smaller cell sites (also called small cells ) close together to relay signals further distances and around obstacles. ", "Small cells are low-powered radio access nodes with ranges of between 10 meters to two kilometers (in comparison, macro cell towers can cover up to 20 miles or around 32 kilometers). The lower end of small cell nodes is similar to today's Wi-Fi access points. Often compared in size to a pizza box or backpack, small cells can be installed on existing structures, such as buildings, poles, or streetlights. When attaching small cells to existing infrastructure, installation and operation requires connection to a power source, backhaul (e.g., fiber optic cable connection or wireless connection to a core network), and a permit for use of the space. Installations on existing structures can expand to include multiple small cells for use by different wireless carriers, wires, and adjacent boxes housing batteries or cooling fans. Small cells can also be placed in locations without such existing infrastructure, in which case construction of a pole with a power source and backhaul (i.e., wired connections) is required. ", "In the United States, constructing new wireless towers or attaching equipment to pre-existing structures generally requires providers to obtain approval from federal, state, or local governmental bodies, depending on the location and current owner of the land or structure. The FCC has promulgated rules to ensure all people have access to communications services and to guide approval processes. Past FCC rules", "require localities to act on cell siting applications in a reasonable period of time; grant the FCC authority to regulate terms and rates of pole attachments unless states elect to regulate poles themselves; restrict state or local entities from prohibiting telecommunications services; grant state and local entities authorities to manage rights-of-way and charge reasonable fees for access to rights-of-way; and require state and local entities to approve eligible facilities requests.", "5G small cell installation have sparked debate over the balance between streamlining siting regulations to facilitate 5G deployment nationwide and maintaining local authorities to review placement of cell sites in communities. U.S. industry executives claim that current regulations and local approvals required for placement of telecommunications equipment adds time and cost to deployment, which puts U.S. carriers at a disadvantage in 5G deployment. Local governments and residents have cited concerns about management of rights-of-way, fees charged to providers for access, and the impact of small cells on property values and health and safety. ", "At the September 26, 2018, Commission meeting, the FCC approved new rules aimed at facilitating the deployment of wireless infrastructure for 5G networks. In its ruling, the FCC", "clarified when a state or local regulation of wireless infrastructure deployment effectively prohibits service; the FCC declared that a state or local government that restricts the entry of a new provider into a service area or inhibits a new service (e.g., 5G) materially inhibits service (which is not permitted under FCC rules); concluded that state and local governments should be able to charge fees that are no greater than a reasonable approximation of objectively reasonable costs for processing applications and for managing deployments in the rights-of-way for 5G deployments; identified acceptable fee levels for small wireless facility deployments; and provided guidance defining criteria for determining whether certain state and local non-fee requirements\u2014such as aesthetic and undergrounding requirements\u2014constitute an effective prohibition of service (which is not permitted under FCC rules).", "Further, the FCC", "established two new shot clocks for small wireless facilities which require localities to make decisions on cell siting applications within 60 days for collocation of equipment on preexisting structures and 90 days for new builds; codified the existing 90- and 150-day shot clocks for wireless facility deployments that do not qualify as small cells that were established in 2009; stated that all state and local government authorizations necessary for the deployment of personal wireless service infrastructure are subject to those shot clocks; and adopted a new remedy for missed shot clocks by finding that a failure to act within the new small wireless facility shot clock constitutes a prohibition on the provision of telecommunication services to an area, which is not allowed under FCC rules.", "The FCC noted that easing cell siting regulations will help to speed 5G deployment, encourage private sector investment in 5G networks, and give the United States an advantage in the global race to dominate the 5G market. "], "subsections": [{"section_title": "Viewpoints on the Rules on Small Cells", "paragraphs": ["Prior to the FCC vote on the small cell siting rules in September 2018, nine Members of Congress wrote a letter to the FCC urging the FCC to remove the item from its September meeting agenda. The letter urged the FCC to \"hit pause\" on the issue to consider the perspectives of cities and municipalities, and to seek a solution that balances the interests of localities and industry.", "FCC Commissioner Carr, who led the effort to streamline the small cell placement process, invoked the race to 5G in his support of the rules, noting, \"We're not the only country that wants to be first to 5G. One of our biggest competitors is China. They view 5G as a chance to flip the script. They want to lead the tech sector for the next decade. And they are moving aggressively to deploy the infrastructure needed for 5G.\"", "Industry officials praised the FCC's rules on the day of the vote, noting, \"The FCC's action today addresses key obstacles to deploying 5G across the country by reducing unnecessary government red tape.\" Industry representatives noted that high fee rates and long approval processes cost providers money, delayed the deployment of telecommunications infrastructure, and resulted in fewer sites proposed, and less investment in and services to communities.", "FCC Commissioner Rosenworcel, who dissented in part, asserted the rules amounted to federal overreach and an override of state and local authorities and worried that \"litigation that follows will only slow our 5G future.\" According to Rosenworcel, the FCC's decision \"irresponsibly interferes with existing agreements and ongoing deployments across the country.\" She cited a recently approved partnership in San Jose, CA, that led to 4,000 small cells on city-owned light poles and $500 million of private investment to support broadband deployment.", "Many local governments opposed the ruling, saying the rules exceed the FCC's authorities, and preempt local authorities to manage public property, protect public health and safety, and manage small cell installments. Several localities have stated they would experience a loss in revenue due to the FCC's rules. The National Association of Counties and the National League of Cities, in a joint statement, noted, \"The FCC's impractical actions will significantly impede local governments' ability to serve as trustees of public property, safety and well-being. The decision will transfer significant local public resources to private companies, without securing any guarantee of public benefit in return.\"", "On January 14, 2019, the FCC rules related to small cells went into effect. Various parties are challenging the rules in federal court. ", "Small cell siting is a key issue in U.S. 5G deployment. FCC rules designed to advance national interests (e.g., accelerate 5G deployment, achieve the full benefits from 5G technologies) are conflicting with authorities and regulations designed to protect other interests (e.g., public safety, health, ensuring equal access to advanced technologies). Policies that enable U.S. companies to deploy 5G infrastructure and allow state and local entities to manage the placement of 5G small cells in communities could speed deployment of 5G technologies in the United States and enable the United States to achieve the broader consumer and economic benefits from 5G . "], "subsections": []}]}]}, {"section_title": "National Security and Counterintelligence Concerns", "paragraphs": ["On December 18, 2017, the Trump Administration released its first National Security Strategy (NSS). In the context of the NSS's broader discussion of \"rejuvenating\" domestic economic competitiveness as one pillar of U.S. national security, the Administration identified the enhancement of American infrastructure as a priority action, to include \"[improving] America's digital infrastructure by deploying a secure 5G capability nationwide.\""], "subsections": [{"section_title": "Security Concerns with 5G Deployments", "paragraphs": ["Concern over the rollout of 5G technology from a U.S. national security and intelligence standpoint has been directed at (1) a perceived lack of market diversity that some have argued would result in increased risk to the global telecommunications supply chain; and (2) concern over the potential vulnerability of 5G networks to targeting by foreign intelligence services. In a February 13, 2018, statement for the record prepared for a Senate Select Committee on Intelligence (SSCI) open hearing, Director of National Intelligence Daniel Coats stated", "The global shift to advanced information and communications technologies (ICT) will increasingly test U.S. competitiveness because aspiring suppliers around the world will play a larger role in developing new technologies and products. These technologies include next-generation, or 5G, wireless technology; the internet of things; new financial technologies; and enabling [artificial intelligence] and big data for predictive analysis. Differences in regulatory and policy approaches to ICT-related issues could impede growth and innovation globally and for U.S. companies.", "Some analysts and experts have highlighted the substantial investment in 5G technologies made by Chinese companies such as ZTE Corporation and Huawei Technologies Co., Ltd.\u2014and the ties of such companies to the government of China\u2014in raising concerns regarding China's relative position vis-\u00e0-vis the U.S. in 5G network development. Those who share this view believe China's ambition is 5G dominance using several methods, including continued investment in networks, products, and standards that support critical infrastructure and services that will rely on 5G technology; shaping industry standards, regulations, and policies; and \"extracting concessions from large multinationals in exchange for market access.\" FBI Director Christopher Wray has also highlighted the potential threat associated with any increase in the integration of Chinese-made or designed devices and 5G cellular network equipment into the United States telecommunications network, stating that", "We're deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks. That provides the capacity to exert pressure or control over our telecommunications infrastructure. It provides the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage.", "Others have pointed to the legal leverage the Chinese intelligence services have over companies like Huawei and ZTE to underscore concern over the potential threat Chinese firms could bring to 5G networks:", "If Huawei or ZTE were to win a contract to supply 5G equipment under market terms, the political and legal environment in China would prevent either company from refusing a subsequent entreaty from either the Chinese intelligence services or military for access to the technology or services\u2026. The [Chinese] government treats Chinese companies operating abroad as subject to [Chinese] law, and multiple new Chinese laws dictate that telecoms operators must provide the Chinese intelligence services with unfettered access to networks for intercept, which raises concerns about Huawei or ZTE 5G support facilities being used for intelligence operations."], "subsections": []}, {"section_title": "Security Concerns with Specific Chinese Firms", "paragraphs": ["During the 112 th Congress, the House Permanent Select Committee on Intelligence (HPSCI) conducted an investigation into the U.S. national security issues posed by Huawei and ZTE, with the committee's report on the results of the investigation highlighting \"the potential security threat posed by Chinese telecommunications companies with potential ties to the Chinese government or military.\" It found, \"in particular, to the extent these companies are influenced by the state, or provide Chinese intelligence services access to telecommunication networks, the opportunity exists for further economic and foreign espionage by a foreign nation-state already known to be a major perpetrator of cyber espionage\" and other forms of state-sponsored and corporate espionage. The HPSCI report concludes with a number of recommendations. Among them: (1) The intelligence community should remain focused on the threat of penetration of the U.S. telecommunications market by Chinese companies; and (2) the Committee on Foreign Investment in the United States (CFIUS) should block acquisitions, takeovers, and mergers that involve Chinese companies Huawei and ZTE.", "In March 2018, CFIUS blocked the takeover of Qualcomm Inc. of the United States\u2014a leader in 5G research and development funding\u2014by Broadcom of Singapore. A U.S. Treasury Department letter of March 5 explaining this decision noted that a takeover of Qualcomm by Broadcom \"could pose a risk to the national security of the United States.\" Although details of the national security concerns are classified, they relate to ", "Broadcom's relationships with third party foreign entities and the national security effects of Broadcom's business intentions with respect to Qualcomm. [Because of] well-known U.S. national security concerns about Huawei and other Chinese telecommunications companies, a shift to Chinese dominance in 5G would have substantial negative national security consequences for the United States.", "Additionally, Section 889 of the John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 ( P.L. 115-232 ) prohibits the heads of federal agencies from procuring telecommunications equipment or services from Huawei, ZTE Corporation, and other telecommunications companies linked to the government of China that could pose a counterintelligence and national security threat to the United States. ", "On January 28, 2019, the U.S. Department of Justice announced criminal charges against Huawei, its Chief Financial Officer, and two affiliates. "], "subsections": []}, {"section_title": "Security Concerns with 5G Networks", "paragraphs": ["Many observers are concerned about the vulnerabilities of 5G networks to exploitation by foreign intelligence services. An individual's ability to use 5G-enabled networks and systems for positive purposes also suggests this same technology can be exploited by foreign intelligence to manipulate perceptions and behavior.", "That manipulation is likely to take various forms, including efforts to deceive and confuse people in various ways about what is happening and what the truth is \u2026 overloading people's senses with useless or irrelevant information so that we cannot accurately discern what adversaries are doing or what is important; and putting misinformation before us to erroneously confirm pre-existing biases and cause us to misperceive reality and to choose the wrong courses of action. They will also try to stoke long-standing animosities and fears so that Americans fight with each other and look foolish to the world we are supposed to be leading. ", "The amount of personal information available for exploitation will expand exponentially with 5G technology, along with doubts as to the security of the networks. This raises concerns among privacy advocates and national security professionals. National security professionals foresee significant challenges for the U.S. intelligence, military, and diplomatic communities in terms of their ability to interact freely and discreetly with foreign nationals who may be deterred by the threat of an aggressive counterintelligence posture. "], "subsections": []}, {"section_title": "Trade Restriction Concerns", "paragraphs": ["Some analysts argue that policies directed at discouraging Chinese investment in the United States not only contradict longstanding U.S. policy of encouraging China to participate in international standards processes, but also may be counterproductive. They suggest that to regard China's influence in 5G technology and standards development as a potential threat to national security may effectively encourage China to create national standards that may act as technical barriers to trade that, in and of themselves, threaten U.S. national security. Technological innovation in the private sector, to include 5G, relies on cooperation between the United States and China, they maintain. These critics also note that the Trump Administration's trade policy, which includes tariffs on Chinese telecommunications equipment, threatens to significantly increase the costs and slow the deployment of 5G infrastructure. ", "Fencing off the U.S. technology sector from one-sixth of the world's population, they suggest, will only cede ground to Chinese competitors, drive up costs for U.S. consumers, and reduce the competitiveness of leading U.S. technology companies, all while isolating the United States from the places where innovation is happening."], "subsections": []}]}, {"section_title": "Policy Considerations for Congress", "paragraphs": ["Congress and other U.S. policymakers are faced with deciding how to address both interest in promoting U.S. competitiveness in the global race to 5G, and an efficient domestic 5G deployment. Congress may consider the role of the federal government in industrial policy and promotion, and the role of the federal government in domestic deployment of 5G technologies. ", "In the rollout of previous technologies, U.S. telecommunications companies invested in research and development, participated in international projects to test the technologies, contributed to standards, and planned business strategies. This market-based approach sparked competition and innovation that gave the United States an edge in previous technologies. For 5G, other countries (i.e., central governments) have engaged in centralized planning and coordination with industry to gain a lead in the race to 5G. Congress may monitor U.S. progress on 5G deployment and technologies, consider whether there is a need for more planning and coordination with industry, and assess whether additional government involvement would help or hinder the efforts of U.S. companies in the global race to 5G. ", "In terms of domestic deployment, Congress may be asked to consider the benefits and risks of 5G deployment. Nationally, 5G technologies are expected to create new revenues and new jobs. 5G technologies have also raised national security concerns, individual privacy concerns, and questions about how to assess the security of foreign-made equipment. ", "Congress may consider policies that protect U.S. telecommunications networks, including policies that impose trade restrictions or economic sanctions on foreign technology providers, or policies limiting foreign participation in 5G build-outs. Congress may weigh how various policy approaches address threats to national security (e.g., threats to telecommunications networks, industrial systems, critical infrastructure, and government networks; cybersecurity threats; threats to privacy). Congress may also consider how trade policies may alter the ability of U.S. companies to deploy networks domestically, and to purchase and sell equipment abroad. ", "5G technologies are also expected to offer new services for consumers (e.g., telehealth to rural areas, new services for the disabled). However, localities have raised concerns regarding the siting of 5G small cells (e.g., authorities to make decisions about public rights-of-way, fees, ensuring rural access, health and safety). While some stakeholders are seeking U.S. government support to speed 5G deployment, others are calling on the U.S. government to assess 5G risks and concerns before deploying. Congress may consider how to weigh these competing interests and concerns. ", "Congress may consider policies to allocate additional spectrum for future 5G use. Congress may weigh the spectrum needs of 5G and the spectrum needs of other users (e.g., other commercial, federal, and educational users) to ensure essential users will have adequate access to the nation's spectrum. Congress may also consider future spectrum needs\u2014spectrum needed for advanced 5G technologies, and industrial IoT systems\u2014when developing spectrum policies. ", "Congress may consider policies related to the future use of 5G and IoT devices. As 5G and IoT technologies are integrated into various industries and applied to everyday life, Congress may consider new policies related to the privacy and security of data being transmitted across millions of IoT devices and through 5G networks. Congress may consider policies implementing security measurements (i.e., best practices) in devices, systems, and networks to ensure security of data. ", "To retain U.S. leadership in telecommunications technologies, Congress may consider supporting or encouraging investment in research and development of new telecommunications technologies (e.g., IoT applications, 6G technologies). The challenge with new technologies is that while the free and open exchange of information (e.g., in the international standards process) promotes innovation, it also presents risks (e.g., sharing intellectual capital). As global standards emerge, and equipment is built to a common standard, companies around the world may use equipment and component parts from other countries. Policies and processes that assess and address security risks with 5G supply chains may enhance the security of U.S. telecommunications networks."], "subsections": []}, {"section_title": "Conclusion", "paragraphs": ["The deployment of 5G technologies is just beginning. Countries around the world are striving to be first to market with 5G technologies and services to capture the bulk of the economic benefits from this new technology.", "In the United States, private industry is leading deployment efforts. The U.S. government is supporting 5G deployment by identifying and allocating spectrum for 5G use and streamlining rules related to siting of 5G small cell. However, there are factors that may hinder 5G deployment in the United States, including the complex spectrum allocation process, local resistance to small cell rules, and limitations on trade that may affect the availability of 5G equipment and devices. ", "Development and deployment of 5G technologies are expected to extend through 2035. The 116 th Congress may be asked to consider both issues related to the immediate deployment of 5G networks, and issues related to future use of 5G devices (including IoT devices). Policy decisions made now, at the start of the deployment, could affect the U.S. position in the race to 5G and the future use of 5G in the United States. "], "subsections": [{"section_title": "Appendix. Congressional Actions Related to 5G", "paragraphs": ["The 115 th Congress considered several policies related to 5G technologies. Congress enacted two pieces of legislation related to 5G spectrum: ", "The Repack Airwaves Yielding Better Access for Users of Modern Services Act of 2018 (RAY BAUM'S Act of 2018) ( P.L. 115-141 , Division P), was incorporated into the Consolidated Appropriations Act, 2018, which was enacted on March 23, 2018. This act includes provisions that improve and accelerate the spectrum auction process. The Making Opportunities for Broadband Investment and Limiting Excessive and Needless Obstacles to Wireless (MOBILE NOW) Act ( P.L. 115-141 , Division P, Title VI), which was also incorporated into the Consolidated Appropriations Act, 2018 (enacted on March 23, 2018), requires federal agencies to make decisions on applications and permit requests for placing wireless infrastructure on federal property in a timely and reasonable manner; this act also directs the federal government to conduct assessments of spectrum in the 3 GHz band and in the millimeter wave frequencies to determine whether authorizing licensed or unlicensed wireless broadband services in those bands is feasible, and, if so, which frequencies are best suited for such operations. ", "The 115 th Congress considered legislation to allocate additional spectrum for mobile communications, and to expand wireless services in rural areas: ", "The Advancing Innovation and Reinvigorating Widespread Access to Viable Electromagnetic Spectrum (AIRWAVES) Act ( S. 1682 ) was introduced in the Senate on August 1, 2017, and would have created a national pipeline of spectrum for commercial use, to incentivize industry to expand wireless services. If passed, the bill would have required the federal government to identify additional spectrum for commercial licensed and unlicensed use (including 5G), and to allocate 10% of the proceeds from the designated spectrums to expand wireless infrastructure in rural areas. The bill was referred to the Committee on Commerce, Science, and Transportation, where there was no further action on the bill. A related bill ( H.R. 4953 ) was introduced in the House on February 6, 2018, and referred to the Committee on Energy and Commerce, Subcommittee on Communications and Technology, where there was no further action on the bill. ", "Some Members introduced resolutions in support of 5G technologies and services:", "S.Res. 242 and H.Res. 521 introduced in August and September 2017, respectively. The resolutions would have expressed the sense that the United States should commit to modernizing infrastructure policies to meet demand for wireless broadband services, to increase access, quality, and affordability of broadband services, and to promote economic development and digital innovation throughout the United States. If passed, the resolutions would have shown congressional support for the deployment of 5G technologies in the United States. ", "Legislation was introduced to address the challenges of small site deployment: ", "The Streamlining the Rapid Evolution and Modernization of Leading-edge Infrastructure Necessary to Enhance (STREAMLINE) Small Cell Deployment Act ( S. 3157 ), introduced on June 28, 2018, would have set criteria for state and local review of cell siting applications, deadlines for approvals of applications, and restrictions on fees that state and local governments may charge. The bill was referred to the Committee on Commerce, Science, and Transportation, where there was no further action on the bill. ", "Four bills were introduced that addressed cybersecurity issues:", "The Securing the Internet of Things Act of 2017 or Securing IoT Act of 2017 ( H.R. 1324 ), introduced on March 2, 2017, would have required equipment using certain frequencies to meet new cybersecurity standards defined by the FCC and the National Institute of Standards and Technology. The State of Modern Application, Research, and Trends of IoT Act or SMART IoT Act ( H.R. 6032 ) was introduced on June 7, 2018. The bill would have directed the Department of Commerce to conduct a study on Internet-connected devices industry in the United States. This bill passed in the House on November 28, 2018; the bill was received in the Senate on November 29, 2018, where it was referred to the Committee on Commerce, Science, and Transportation; there was no further action on the bill. The Interagency Cybersecurity Cooperation Act ( H.R. 1340 ) introduced on March 2, 2017, would have required the FCC to create a new interagency committee to examine security reports related to telecommunications and produce recommendations for preventing and mitigating against attacks. It would have also defined communications networks as \"critical infrastructure,\" subject to national security requirements. The bill was referred to the Committee on Energy and Commerce, Subcommittee on Communications and Technology and the Committee on Oversight and Government Reform where there was no further action on this bill. The Cyber Security Responsibility Act ( H.R. 1335 ) would have required the FCC to issue rules for securing communications networks and define communications networks as \"critical infrastructure.\" The bill was referred to the Committee on Energy and Commerce, Subcommittee on Communications and Technology; there was no further action on this bill. ", "Congress also addressed national security concerns related to telecommunications:", "The John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 ( P.L. 115-232 ), enacted on August 13, 2018, prohibited the heads of federal agencies from procuring telecommunications equipment or services from Huawei, ZTE Corporation, and other companies linked to the government of China that could pose a counterintelligence and national security threat to the United States.", "Hearings held during the 115 th Congress that have discussed 5G and related topics have included ", "\"Race to 5G: Exploring Spectrum Needs to Maintain U.S. Global Leadership,\" Senate Committee on Commerce, Science, and Transportation, July 25, 2018. \"Realizing the Benefits of Rural Broadband: Challenges and Solutions,\" House Committee on Energy and Commerce, Subcommittee on Communications and Technology, July 17, 2018. \"Oversight of the Federal Communications Commission,\" House Committee on Energy and Commerce, Subcommittee on Communications and Technology, July 18, 2018. \"Race to 5G and Its Potential to Revolutionize American Competitiveness,\" House Committee on Energy and Commerce, Subcommittee on Communications and Technology, November 16, 2017. \"Cybersecurity of the Internet of Things,\" House Committee on Oversight and Government Reform, Subcommittee on Information Technology, October 3, 2017. "], "subsections": []}]}]}}
{"id": "R45472", "title": "Market-Based Greenhouse Gas Emission Reduction Legislation: 108th Through 116th Congresses", "released_date": "2019-05-07T00:00:00", "summary": ["Congressional interest in market-based greenhouse gas (GHG) emission control legislation has fluctuated over the past 15 years. During that time, legislation has often involved market-based approaches, such as a cap-and-trade system or a carbon tax or fee program. Both approaches would place a price\u2014directly or indirectly\u2014on GHG emissions or their inputs (e.g., fossil fuels), both would increase the price of fossil fuels, and both would reduce GHG emissions to some degree. Both would allow emission sources to choose the best way to meet their emission requirements or reduce costs, potentially by using market forces to minimize national costs of emission reductions. Preference between the two approaches ultimately depends on which variable policymakers prefer to precisely control\u2014emission levels or emission prices.", "A primary policy concern with either approach is the economic impacts that may result from the program. Expected energy price increases could have both economy-wide impacts (e.g., on the U.S. gross domestic product) and disproportionate effects on specific industries and particular demographic groups. The degree of these potential effects would depend on a number of factors, including the magnitude, design, and scope of the program and the use of tax or fee revenues or emission allowance values.", "This report includes a separate table for each Congress, comparing GHG emission reduction legislation by the following characteristics:", "General framework: the proposed program structure and scope in terms of emissions covered, multiple GHG emissions, or just carbon dioxide (CO2) emissions. Covered entities/materials: a list of the industries, sectors, or materials that would be subject to the program. Emissions limit or target: the GHG or CO2 emissions target or cap for a specified year. Distribution of allowance value or tax revenue: how emission allowance value or carbon tax or fee revenue would be distributed. Offset and international allowance treatment: the degree to which offsets and international allowances could be used for compliance purposes and the types of offset activities that would qualify. Mechanism to address carbon-intensive imports: a U.S. GHG reduction program may create a competitive disadvantage for some domestic businesses, particularly carbon-intensive, trade-exposed industries. Additional GHG reduction measures: other mechanisms designed to further reduce GHG emissions that are not covered in the central program.", "As the figure below illustrates, between the 108th and 111th Congresses, most of the introduced bills would have established cap-and-trade systems. Between the 112th and 115th Congresses, most of the introduced bills would have established carbon tax or emissions fee programs.", "The proposals from the 116th Congress range in their scope of emissions covered from CO2 emissions from fossil fuel combustion to multiple GHG emissions from a broader array of sources. In addition, the proposals differ by how, to whom, and for what purpose the fee revenues or allowance value would be applied. Some economic analyses indicate that policy choices to distribute the tax, fee, or emission allowance revenue would yield greater economic impacts than the direct impacts of the carbon price."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Human activities, particularly fossil fuel combustion and industrial operations, have raised the atmospheric concentration of carbon dioxide (CO 2 ) and other greenhouse gases (GHG) by about 40% over the past 150 years. Almost all climate scientists agree that these GHG increases have contributed to a warmer climate today and that, if they continue, will contribute to future climate change. Although a range of actions that seek to reduce GHG emissions are currently underway or being developed on the international and sub-national level (e.g., individual state actions or regional partnerships) , federal policymakers and stakeholders have different viewpoints over what to do, if anything, about future climate change and related impacts.", "Congressional interest in GHG emission control legislation has fluctuated over the last 15 years. Proposals to limit GHG emissions have often focused on market-based approaches, such as a GHG emission cap-and-trade program or a GHG emissions tax (often referred to as a carbon tax) or fee. In general, a market-based approach would place a price on GHG emissions (e.g., through an emissions cap or emission tax or fee), allowing covered entities to determine their pathway of compliance. ", "This report provides a comparison of the legislative proposals from the 108 th through the 116 th Congresses that were and are designed primarily to reduce GHG emissions using market-based approaches such as cap-and-trade or carbon tax/fee programs. During this time frame, Members introduced multiple energy-related proposals that would have likely resulted in reductions in GHG emissions\u2014legislation that promotes renewable energy or encourages carbon capture and sequestration \u2014but these bills are not discussed in this report. In addition, starting in the 112 th Congress, some Members have introduced resolutions in the House and Senate expressing the view that a carbon tax is not in the economic interests of the United States. In September 2018, the House passed a resolution \"expressing the sense of Congress that a carbon tax would be detrimental to the United States economy\" ( H.Con.Res. 119 ). An analogous resolution was not introduced in the Senate in the 115 th Congress. ", "As Figure 2 illustrates, between the 108 th and 111 th Congresses, most of the introduced bills would have established cap-and-trade systems. Between the 112 th and 115 th Congresses, most of the introduced bills would have established carbon tax or emissions fee programs.", "In the 111 th Congress, Members offered multiple and varied proposals, ultimately resulting in the House passage of H.R. 2454 , an economy-wide cap-and-trade bill. A companion bill in the Senate ( S. 1733 ) was ordered reported from the Committee on Environment and Public Works, but the bill was never brought to the Senate floor for consideration.", "In subsequent Congresses, some Members continued to offer GHG emission control legislation, but these proposals saw minimal legislative activity. During that time frame, the U.S. Environmental Protection Agency (EPA) used existing Clean Air Act authorities to promulgate GHG emission standards for key sectors, including the electric power and transportation sectors. EPA rulemakings in this area\u2014particularly the 2015 Clean Power Plan final rule and the 2018 Affordable Clean Energy proposed rule \u2014generated considerable interest and debate in Congress.", "The proposals from the 116 th Congress range in their scope of emissions covered from CO 2 emissions from fossil fuel combustion to multiple GHG emissions from a broader array of sources. In addition, the proposals differ by how, to whom, and for what purpose the fee revenues or allowance value would be applied. Some economic analyses indicate that policy choices to distribute the tax, fee, or emission allowance revenue would yield greater economic impacts than the direct impacts of the carbon price.", "The first section of this report provides background information on cap-and-trade and carbon tax or emission fee programs. The second section compares the GHG emission reduction legislation in each Congress (108 th -116 th )."], "subsections": []}, {"section_title": "Background", "paragraphs": ["Over the last 15 years, broad GHG emission reduction legislation has generally involved market-based approaches\u2014such as cap-and-trade systems or carbon tax programs\u2014that rely on private sector choices and market forces to minimize the costs of emission reductions and spur innovation. Both carbon tax and emissions cap-and-trade programs would place a price\u2014directly or indirectly\u2014on GHG emissions or their inputs (e.g., fossil fuels), both would increase the price of fossil fuels for the consumer, and both would reduce GHG emissions to some degree. Preference between the two approaches ultimately depends on which variable policymakers prefer to precisely control: emission levels or emission prices. As a practical matter, these market-based policies may include complementary or hybrid designs, incorporating elements to increase certainty in price or emissions quantity. For example, legislation could provide mechanisms for adjusting a carbon tax/fee if a targeted range of emissions reductions were not achieved in a given period. Alternatively, legislation could include mechanisms that would bound the range of market prices for a cap-and-trade system's emissions allowances to improve price certainty."], "subsections": [{"section_title": "What Is a GHG Emissions Cap-and-Trade System?", "paragraphs": ["A GHG cap-and-trade system creates an overall limit, or cap, on GHG emissions from certain sources. Cap-and-trade programs can vary by the sources covered, which often include major emitting sectors (e.g., power plants and carbon-intensive industries), fuel producers and/or processors (e.g., coal mines or petroleum refineries), or some combination of both.", "The emissions cap is partitioned into emission allowances . Typically, in a GHG cap-and-trade system, one emission allowance represents the authority to emit one metric ton of carbon dioxide-equivalent (mtCO 2 e). The emissions cap creates a new commodity\u2014the emission allowance. Policymakers may decide to distribute the emission allowances to covered entities at no cost (based on, for example, previous years' emissions), sell the allowances (e.g., through an auction), or use some combination of these strategies. The distribution of emission allowances is typically a source of significant debate during a cap-and-trade program's development, because the allowances have monetary value.", "At the end of each established compliance period (e.g., a calendar year or multiple years), covered sources submit emission allowances to an implementing agency to cover the number of tons emitted. If a source did not provide enough allowances to cover its emissions, the source would be subject to penalties. Covered sources would have a financial incentive to make reductions beyond what is required, because they could (1) sell or trade unused emission allowances to entities that face higher costs to reduce their facility emissions, (2) reduce the number of emission allowance they need to purchase, or (3) bank them, if allowed, to use in a future year. ", "The use of emission offsets as a compliance option received attention during debate over cap-and-trade programs. An offset is a measurable reduction, avoidance, or sequestration of GHG emissions from a source not covered by an emission reduction program. Economic analyses of cap-and-trade proposals concluded that offset treatment (i.e., whether or not to allow their use and, if so, to what degree) would have a substantial impact on overall program cost. This is because some emissions and sources often not covered in cap-and-trade programs can reduce emissions at a lower cost per ton than many typically covered sources. However, the use of offsets generates considerable controversy, primarily over the concern that difficult-to-assess or fraudulent offsets could create uncertainty about the quantity of emission reductions.", "In addition, other mechanisms\u2014such as allowance banking or borrowing\u2014may be included to increase the flexibility of the program and, generally, reduce the costs."], "subsections": []}, {"section_title": "What Is a Carbon Tax or Emissions Fee?", "paragraphs": ["In a carbon tax or emissions fee program, policymakers attach a price to GHG emissions or the inputs that create them. A carbon tax/fee on emissions or emissions inputs\u2014namely fossil fuels\u2014would increase the relative price of the more carbon-intensive energy sources. This result is expected to spur innovation in less carbon-intensive technologies and stimulate other behavior that may decrease emissions. ", "Economic modeling indicates that a carbon tax/fee approach could achieve emission reductions, the level of which would depend on the scope and stringency (i.e., tax or fee level) of the program. For example, to address emissions from fossil fuel combustion\u201476% of total U.S. GHG emissions \u2014policymakers could apply a tax/fee to fossil fuels at approximately 3,000 entities, including coal mines, petroleum refineries, and entities required to report natural gas deliveries.", "A carbon tax/fee would generate a new revenue stream. The magnitude of the revenues would depend on the scope and rate of the tax or fee, the responsiveness of covered entities in reducing their potential emissions, and multiple other market factors. A 2016 Congressional Budget Office study estimated that a $25/ton carbon tax would yield approximately $100 billion in the first year of the program. ", "When designing a carbon tax/fee system, one of the more controversial and challenging questions for policymakers is how, to whom, and for what purpose the new tax or fee revenues could be applied. Congress would face the same issues that would be encountered during a debate over emission allowance value distribution in a cap-and-trade system. ", "When deciding how to allocate the revenues, policymakers would encounter trade-offs among objectives. The central trade-offs involve minimizing economy-wide costs, lessening the costs borne by specific groups\u2014particularly low-income households and displaced workers or communities\u2014and supporting a range of specific policy objectives.", "A primary argument against a carbon tax/fee system (and a cap-and-trade program) is the concern about the economy-wide costs that a carbon price could impose. The potential costs would depend on a number of factors, including the magnitude, design, and use of revenues of the carbon tax or fee.", "Others who may oppose a carbon tax system express opposition to federal taxes in general or the possibility that the revenues would enable greater federal spending. Owners of coal resources, in particular, would likely lose asset values under a carbon tax system\u2014as under a cap-and-trade system\u2014to the degree that coal becomes less competitive under the costs of emission reductions."], "subsections": []}]}, {"section_title": "GHG Emission Reduction Legislation by Congress", "paragraphs": ["This section compares GHG emission reduction legislation from the 108 th Congress to the 116 th Congress by including a separate legislative table for each Congress. The tables compare the bills by their overall framework, scope, stringency, and selected design elements. Categories of comparison include", "General framework: the proposed program structure\u2014emissions cap, emissions tax or fee, or some combination of both\u2014and scope in terms of emissions covered (multiple GHG emissions or just CO 2 emissions). Covered entities/materials: the industries, sectors, or materials that would be subject to the program. Emissions limit or target: the GHG or CO 2 emissions target or cap for a particular year. Some targets/caps would apply only to covered sources; others apply to total U.S. GHG emissions. Distribution of allowance value or tax revenue: how emission allowance value or carbon tax or fee revenue would be distributed (if applicable). Offset and international allowance treatment: the degree to which offsets and international allowances could be used for compliance purposes and the types of offset activities that would qualify. Some proposals limit offsets by percentage of required reductions; others limit offsets as a percentage of allowance submissions. Mechanism to address carbon-intensive imports: a central concern with a U.S. GHG reduction program is that it could raise U.S. prices more than goods manufactured abroad, potentially creating a competitive disadvantage for some domestic businesses, particularly carbon-intensive, trade-exposed industries. Policymakers could address these potential impacts in several ways\u2014for example, through border adjustments, tax rebates, or emission allowances provided at no cost to selected industrial sectors. Additional GHG reduction measures: other mechanisms that are designed to further reduce GHG emissions that are not covered in the central program. "], "subsections": []}]}}
{"id": "R43327", "title": "Financing Airport Improvements", "released_date": "2019-03-15T00:00:00", "summary": ["There are five major sources of airport capital development funding: the federal Airport Improvement Program (AIP); local passenger facility charges (PFCs) imposed pursuant to federal law; tax-exempt bonds; state and local grants; and airport operating revenue from tenant lease and other revenue-generating activities such as landing fees. Federal involvement is most consequential in AIP, PFCs, and tax-exempt financing.", "The AIP has been providing federal grants for airport development and planning since the passage of the Airport and Airway Improvement Act of 1982 (P.L. 97-248). AIP funding is usually spent on projects that support aircraft operations such as runways, taxiways, aprons, noise abatement, land purchase, and safety or emergency equipment. The funds obligated for AIP are drawn from the airport and airway trust fund, which is supported by a variety of user fees and fuel taxes. Different airports use different combinations of these sources depending on the individual airport's financial situation and the type of project being considered. Although smaller airports' individual grants are of much smaller dollar amounts than the grants going to large and medium hub airports, the smaller airports are much more dependent on AIP to meet their capital needs. This is particularly the case for noncommercial airports, which received over 25% of AIP grants distributed in FY2018. Larger airports are much more likely to issue tax-exempt bonds or finance capital projects with the proceeds of PFCs.", "The FAA Reauthorization Act of 2018 (P.L. 115-254) provided annual AIP funding of $3.35 billion from the airport and airway trust fund for five years from FY2019 to FY2023. The act left the basic structure of AIP unchanged, but authorized supplemental annual funding of over $1 billion from the general fund to the AIP discretionary funds, starting with $1.02 billion in FY2019, and required at least 50% of the additional discretionary funds to be available to nonhub and small hub airports. The act included a provision permitting eligible projects at small airports (including those in the State Block Grant Program) to receive a 95% federal share of project costs (otherwise capped at 90%), if such projects are determined to be successive phases of a multiphase construction project that received a grant in FY2011.", "The 2018 reauthorization expanded the number of states that could participate in the State Block Grant Program from 10 to 20 and also expanded the existing airport privatization pilot program (now renamed the Airport Investment Partnership Program) to include more than 10 airports. The law included a provision that forbids states or local governments from levying or collecting taxes on a business at an airport that \"is not generally imposed on sales or services by that State, political subdivision, or authority unless wholly utilized for airport or aeronautical purposes.\"", "The airport improvement issues Congress generally faces in the context of FAA reauthorization include the following:", "Should airport development funding be increased or decreased? Should the $4.50 ceiling on PFCs be eliminated, raised, or kept as it is? Could AIP be restructured to address congestion at the busiest U.S. airports, or should a large share of AIP resources continue to go to noncommercial airports that lack other sources of funding? Should Congress set tighter limits on the purposes for which AIP and PFC funds may be spent?", "This report provides an overview of airport improvement financing, with emphasis on AIP and the related passenger facility charges. It also discusses some ongoing airport issues that are likely to be included in a future FAA reauthorization debate."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The federal government supports the development of airport infrastructure in three different ways. First, the Airport Improvement Program (AIP) provides federal grants to airports for planning and development, mainly of capital projects related to aircraft operations such as runways and taxiways. Second, Congress has authorized airports to assess a local passenger facility charge (PFC) on each boarding passenger, subject to specific federal approval. PFC revenues can be used for a broader range of projects than AIP funds, including \"landside\" projects such as passenger terminals and ground access improvements. Third, federal law grants investors preferential income tax treatment on interest income from bonds issued by state and local governments for airport improvements (subject to compliance with federal rules). Airports may also draw on state and local funds and on operating revenues, such as lease payments and landing fees.", "A federal role in airport infrastructure first developed during World War II. Prior to the war, airports were a local or private responsibility, with federal support limited to the tax exclusion of municipal bond interest. National defense needs led to the first major federal support for airport construction. After the war, the Federal Airport Act of 1946 (P.L. 79-377) continued federal a id, although at lower levels than during the war years. Initially, much of this spending supported conversion of military airports to civilian use. In the 1960s, substantial funding also was used to upgrade and extend runways for use by commercial jets.", "In 1970, Congress responded to increasing congestion, both in the air and on the ground at U.S. airports, by passing two laws. The first, the Airport and Airway Development Act, established the forerunner programs of AIP: the Airport Development Aid Program and the Planning Grant Program. The second, the Airport and Airway Revenue Act of 1970, dealt with the revenue side of airport development, establishing the Airport and Airway Trust Fund (AATF, also referred to as the Aviation Trust Fund, and in this report, the trust fund). The Airport and Airway Improvement Act of 1982 ( P.L. 97-248 ; the 1982 Act) created the current AIP and reactivated the trust fund. For a more detailed legislative history of AIP, see Appendix A of this report.", "Eight years later, amid concerns that the existing sources of funds for airport development would be insufficient to meet national airport needs, the Aviation Safety and Capacity Expansion Act of 1990 (Title IX of the Omnibus Budget Reconciliation Act of 1990, P.L. 101-508 ) allowed the Secretary of Transportation to authorize public agencies that control commercial airports to impose a passenger facility charge on each paying passenger boarding an aircraft at their airports.", "Different airports use different combinations of AIP funding, PFCs, tax-exempt bonds, state and local grants, and airport revenues to finance particular projects. Small airports are more likely to be dependent on AIP grants than large or medium-sized airports. Larger airports are much more likely to issue tax-exempt bonds or finance capital projects with the proceeds of PFCs. Each of these funding sources places various legislative, regulatory, or contractual constraints on airports that use it. The availability and conditions of one source of funding may also influence the availability and terms of other funding sources. In a 2015 study, the U.S. Government Accountability Office (GAO) found that airport-generated net income financed about 38% of airports' capital spending, AIP 33%, PFCs 18%, capital contributions by airport sponsor (often a state or municipality) or by other sources such as an airline or tenant 6%, and state grants nearly 5%."], "subsections": []}, {"section_title": "Airport Improvement Program (AIP)", "paragraphs": ["AIP provides federal grants to airports for airport development and planning. Participants range from very large publicly owned commercial airports to small general aviation airports that may be privately owned but are available for public use. AIP funding is usually limited to construction of improvements related to aircraft operations, such as runways and taxiways. Commercial revenue-producing facilities are generally not eligible for AIP funding, nor are operating costs. The structure of AIP funds distribution reflects congressional priorities and the objectives of assuring airport safety and security, increasing airport capacity, reducing congestion, helping fund noise and environmental mitigation costs, and financing small state and community airports.", "The main financial advantage of AIP to airports is that, as a grant program, it can provide funds for capital projects without the financial burden of debt financing, although airports are required to provide a modest local match to the federal funds. Limitations on the use of AIP grants include the range of projects that AIP can fund and the requirement that recipients adhere to all program regulations and grant assurances.", "Federal law requires the Secretary of Transportation to publish a national plan for the development of public-use airports in the United States. This appears as a biannual Federal Aviation Administration (FAA) publication called the National Plan of Integrated Airport System s (NPIAS) . For an airport to receive AIP funds, it must be listed in the NPIAS. ", "AIP program structure and authorizations are set in FAA authorization acts. Modifications have been made to AIP through the years, but the basic program structure remains the same. The most recent act, the FAA Reauthorization Act of 2018 ( P.L. 115-254 ), authorized AIP funding through FY2023. "], "subsections": [{"section_title": "The Airport and Airway Trust Fund7", "paragraphs": ["The trust fund was designed to assure an adequate and consistent source of funds for federal airport and airway programs. It is the primary funding source for most FAA activities in addition to federal grants to airports. These include facilities and equipment (F&E); research, engineering, and development (R, E&D); and FAA operations and maintenance (O&M). Congress determines how much the trust fund will be allowed to expend for various purposes, including the AIP.", "The money flowing into the Airport and Airway Trust Fund comes from a variety of aviation-related taxes. These taxes were authorized by the Taxpayer Relief Act of 1997 ( P.L. 105-34 ) and reauthorized by the 2018 FAA reauthorization act. Revenue sources include the following:", "7.5% ticket tax, $4.20 flight segment tax, 6.25% tax on cargo waybills, 4.4 cents per gallon on commercial aviation fuel, 19.4 cents per gallon on general aviation gasoline, 21.9 cents per gallon on general aviation jet fuel, 14.1 cents per gallon fractional ownership surtax on general aviation jet fuel, $18.60 international arrival tax, $18.60 international departure tax, and 7.5% \"frequent flyer\" award tax.", "In most years since the trust fund was established, the revenues plus interest on the unexpended balances brought in more money than was being paid out. This led to the growth in the end-of-year unexpended balances in the trust fund. At times these unexpended balances are inaccurately referred to as a surplus. In practice, FAA may have committed unexpended balances to fund particular airport projects, so those balances may not be available for other purposes. ", "Most air carriers have altered their pricing structures in ways that have implications for the trust fund. Ancillary fees are now commonly charged for services such as checked baggage that in the past were included in the ticket price. Such fees are not subject to the 7.5% ticket tax. Had the $4.57 billion in baggage fees collected in 2017 been subject to the ticket tax, the trust fund might have received more than $343 million in additional revenue."], "subsections": []}, {"section_title": "AIP Funding", "paragraphs": ["AIP spending authorized and the amounts actually made available for grants from the aviation trust fund since FY2000 are illustrated in Table 1 .", "After trending upward from FY1982 to FY1992, grant funding approved in annual appropriations declined through the mid-1990s as part of federal deficit reduction efforts, leaving large gaps between authorized AIP spending levels and the amounts the program was actually allowed to expend. This occurred despite provisions in place since 1976 designed to ensure that federal capital spending for airports is fully funded at the authorized level (see Text B ox ).", "The Wendell H. Ford Aviation Investment and Reform Act for the 21 st Century (AIR21; P.L. 106-181 ), enacted in 2000, provided major increases in AIP's authorization, starting in FY2001. During FY2001-FY2006 AIP was funded near its fully authorized levels. The amount available for grants peaked at $3.47 billion in FY2008. From FY2008 through FY2011, when AIP was authorized by a series of authorization extension acts, appropriators set the program's annual obligation limitation at $3.515 billion. The 2012 FAA Modernization and Reform Act authorized funding through FY2015 at an annual level of $3.35 billion. In July 2016, the FAA Extension, Safety, and Security Act of 2016 ( P.L. 114-190 ) was passed to further extend the authorization of AIP at the annual level of $3.35 billion through September 30, 2017.", "The 115 th Congress passed a six-month extension ( P.L. 115-63 ) of aviation funding and programs through the end of March 2018. Subsequently, the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), provided a further extension through the end of FY2018. In addition to the annual funding of $3.35 billion, the 2018 appropriations act provided a $1.0 billion appropriation from the general fund to the AIP discretionary grants program. The Secretary of Transportation was directed to keep this supplemental funding available through September 30, 2020, and to give priority to nonprimary, nonhub, and small hub airports. These supplemental funds are not included in the AIP funding summary or discussion in this report, as FAA is in the process of evaluating applications and distributing funds.", "The FAA Reauthorization Act of 2018 ( P.L. 115-254 ) funded AIP from FY2019 through FY2023 at an annual level of $3.35 billion. It also authorized supplemental annual funding from the general fund to the AIP discretionary grants program ($1.02 billion in FY2019, $1.04 billion in FY2020, $1.06 billion in FY2021, $1.09 billion in FY2022, and $1.11 billion in FY2023), and required at least 50% of these additional funds to be available to nonhub and small hub airports.", "In February 2019, Congress passed the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ). The act provided a $500 million supplemental appropriation from the general fund to the AIP discretionary grants program and required that this money remain available through September 30, 2021."], "subsections": []}, {"section_title": "AIP Funding Distribution", "paragraphs": ["The distribution system for AIP grants is complex. It is based on a combination of formula grants (also referred to as apportionments or entitlements) and discretionary funds. Each year the entitlements are first apportioned by formula to specific airports or types of airports. Once the entitlements are satisfied, the remaining funds are defined as discretionary funds. Airports apply for discretionary funds for projects in their airport master plans. Formula grants and discretionary funds are not mutually exclusive, in the sense that airports receiving formula funds may also apply for and receive discretionary funds. Grants are generally awarded directly to airports. ", "Legislation sets forth definitions of airports that are relevant both in discussions of the airport system in general and of AIP funding distribution in particular (see Appendix B ). The statutory provisions for the allocation of both formula and discretionary funds are based on these definitions."], "subsections": [{"section_title": "Entitlements (Formula Funds)", "paragraphs": ["Entitlements are funds that are apportioned by formula to airports and may generally be used for any eligible airport improvement or planning project. These funds are divided into four categories: primary airports, cargo service airports, general aviation airports, and Alaska supplemental funds (see Appendix B for a full list of airport definitions). Each category distributes AIP funds by a different formula (49 U.S.C. \u00a747114).", "Most airports have up to three years to use their apportionments. Nonhub commercial service airports have up to four years. The formula distributions are contingent on an annual AIP obligation limitation of $3.2 billion or more. If this threshold is not met in a particular fiscal year, most formulas revert to prior authorized funding formulas.", "Primary Airports. The apportionment for airports that board more than 10,000 passengers each year is based on the number of boardings (also referred to as enplanements) during the prior calendar year. The amount apportioned for each fiscal year is equal to double the amount that would be received according to the following formulas:", "$7.80 for each of the first 50,000 passenger boardings; $5.20 for each of the next 50,000 passenger boardings; $2.60 for each of the next 400,000 passenger boardings; $0.65 for each of the next 500,000 passenger boardings; and $0.50 for each passenger boarding in excess of 1 million.", "The minimum allocation to any primary airport is $1 million. The maximum is $26 million.", "Cargo Service Airports. Some 3.5% of AIP funds subject to apportionment are apportioned to airports served by all-cargo aircraft with a total annual landed weight of more than 100 million pounds. The allocation formula is the proportion of the individual airport's landed weight to the total landed weight at all cargo service airports.", "General Aviation Airports. General aviation, reliever, and nonprimary commercial service airports are apportioned 20% of AIP funds subject to apportionment. From this share, all airports, excluding all nonreliever primary airports, receive the lesser of the following:", "$150,000; or one-fifth of the estimated five-year costs for airport development for each of these airports as listed in the most recent NPIAS.", "Any remaining funds are distributed according to a state-based population and area formula. FAA makes the project decisions on the use of these funds in consultation with the states. Although FAA has ultimate control, some states view these funds as an opportunity to address general aviation needs from a statewide, rather than a local or national, perspective.", "Alaska Supplemental Funds. Funds are apportioned to airports in Alaska to assure that Alaskan airports receive at least twice as much funding as they did under the Airport Development Aid Program in 1980.", "Foregone Apportionments. Large and medium hub airports that collect a passenger facility charge of $3 or less have their AIP formula entitlements reduced by an amount equal to 50% of their projected PFC revenue for the fiscal year until they forgo or give back 50% of their AIP formula grants. In the case of PFC above the $3 level the percentage forgone is 75%. A special small airport fund, which provides grants on a discretionary basis to airports smaller than medium hub, gets 87.5% of these foregone funds. The discretionary fund gets the remaining 12.5%."], "subsections": []}, {"section_title": "Discretionary Funds", "paragraphs": ["The discretionary funds (49 U.S.C. \u00a7\u00a747115-47116) include the money not distributed under the apportioned entitlements, as well as the forgone PFC revenues that were not deposited into the small airport fund. AIP discretionary funding for FY2018 was about 9.4% of the total AIP funding. Discretionary grants are approved by FAA based on project priority and other selection criteria. Figure 1 illustrates the composition of both apportioned and discretionary grants, based on FY2018 data.", "Despite its name, the discretionary fund is not allocated solely at FAA's discretion. Allocations are subject to the following three set-asides and certain other spending criteria:", "Airport Noise Set-Asides . At least 35% of discretionary funds are set aside for noise compatibility planning and for carrying out noise abatement and compatibility programs. Military Airport Program . At least 4% of discretionary funds are set aside for conversion and dual use of up to 15 current and former military airports. The program allows funding of some projects not normally eligible under AIP. Grants for Reliever Airports . There is a set-aside of two-thirds of 1% of discretionary funds for reliever airports in metropolitan areas suffering from flight delays.", "The Secretary of Transportation is also directed to see that 75% of the grants made from the discretionary fund are used to preserve and enhance capacity, safety, and security at primary and reliever airports, and also to carry out airport noise compatibility planning and programs at these airports. From the remaining 25%, FAA is required to set aside $5 million for the testing and evaluation of innovative aviation security systems.", "Subject to these limitations and the three set-asides, the Secretary of Transportation, through FAA, has discretion in distribution of grants from the remainder of the discretionary fund."], "subsections": []}, {"section_title": "State Block Grant Program24", "paragraphs": ["Under this program, FAA provides funds directly to participating states for projects at airports classified as other than primary airports. Each participating state receives a block grant made up of the state's apportionment (formula) funds and available discretionary funds. A block grant program state is responsible for selecting and funding AIP projects at the small airports in the state. In making the selections, the participating states are required to comply with federal priorities. Each block grant state is responsible for project administration as well as most of the inspection and oversight roles normally assumed by FAA. The states that currently participate in the state block grant program are Georgia, Illinois, Michigan, Missouri, New Hampshire, North Carolina, Pennsylvania, Tennessee, Texas, and Wisconsin."], "subsections": []}, {"section_title": "The Federal Share of AIP Matching Funds", "paragraphs": ["For AIP projects, the federal government share differs depending on the type of airport. The federal share, whether funded by formula or discretionary grants, is as follows:", "75% for large and medium hub airports (80% for noise compatibility projects); 90% for other airports; \"not more than\" 90% for airport projects in states participating in the state block grant program; 70% for projects funded from the discretionary fund at airports receiving exemptions under 49 U.S.C. \u00a747134, the pilot program for private ownership of airports; airports reclassified as medium hubs due to increased passenger volumes may retain eligibility for up to a 90% federal share for a two-year transition period; certain economically distressed communities receiving subsidized air service may be eligible for up to a 95% federal share of project costs.", "This cost-share structure means that smaller airports pay a lower share of AIP-funded project costs than larger airports. The airports themselves must raise the remaining share from other sources. "], "subsections": []}, {"section_title": "Distribution of AIP Grants by Airport Size", "paragraphs": ["Although smaller airports' individual grants are of much smaller dollar amounts than the grants going to large and medium hub airports, the smaller airports are much more dependent on AIP to meet their capital needs. This is particularly the case for noncommercial airports, such as general aviation and reliever airports, which received over 25% of AIP grants distributed in FY2018. Air carriers have objected to this allocation, pointing out that their passengers and freight shippers pay the vast majority of revenue flowing into the trust fund. General aviation interests, however, defend AIP grants to noncommercial airports. Figure 2 shows the share of AIP grants awarded in FY2018, by value, broken out by airport type."], "subsections": []}, {"section_title": "What AIP Money Is Spent On", "paragraphs": [" Figure 3 displays AIP grants awarded by type of project for FY2018. For the most part, AIP development grants support \"airside\" development projects such as runways, taxiways, aprons, navigation aids, lighting, and airside safety projects. Substantial AIP funds also go for state block grants and noise planning and abatement. AIP spending on roads is generally restricted to roads on or entering airport property."], "subsections": []}, {"section_title": "Letters of Intent (LOI)", "paragraphs": ["In cases in which a primary or reliever airport may want to begin an AIP-eligible project without waiting for the funds to become available, FAA is authorized to issue a letter of intent (LOI). If it does so, the LOI states that eligible project costs, up to the allowable federal share, will be reimbursed according to a schedule set forth in the letter.", "Although the LOI technically does not obligate the federal government, it is an indication of FAA's approval of the scope and timing of the project, as well as the federal intent to fund the project in future years. Because most primary airports fund their major development projects with tax-exempt revenue bonds, the evidence of federal support that the LOI provides is likely to lead to favorable bond interest rates. The airport may proceed with the project with assurance that all AIP-allowable costs specified in the LOI will remain eligible for reimbursement over the life of the LOI. Both entitlement and discretionary funds are used to fulfill LOIs. FAA limits the total of discretionary funds in all LOIs subject to future obligation to roughly 50% of forecast available discretionary funds.", "LOIs have certain eligibility restrictions. They can only be issued to cover projects at primary and reliever airports. The proposed airport development project or action must \"enhance airfield capacity in terms of increased aircraft operations, increased aircraft seating or cargo capacity, or reduced airfield operational delays.\" For large and medium hub airports, the project must enhance \"system-wide airport capacity significantly.\""], "subsections": []}, {"section_title": "AIP Grant Assurances", "paragraphs": ["Airports' grant applications are conditioned on assurances regarding future airport operations. Examples of such assurances include making the airport available for public use on reasonable conditions and without unjust economic discrimination (against all types, kinds, and classes of aeronautical activities); charging air carriers making similar use of the airport substantially comparable amounts; maintaining a current airport layout plan; making financial reports to FAA; and expending airport revenue only on capital or operating costs at the airport. Within the AIP context, assurances are a means of guaranteeing the implementation of federal policy. ", "Obligations derived from airports' assurances extend beyond the formal closure of AIP grant-supported projects. Obligations related to the use, operation, and maintenance of an airport remain in effect for the expected life of the improvement, up to 20 years. In the case of the purchase of land with AIP funds, the federal obligations do not expire. Airports may request that FAA release them from their AIP contractual obligations. Typically, as a condition of the release, the airport sponsor must either reimburse the federal government for the AIP grants (in the case of land grants, the federal share of the fair market value of the land) or reinvest the amount in an approved AIP project (see Text B ox ). When airport managers or interest groups express concerns about the \"strings attached\" to AIP funding, they are usually referring to AIP grant assurances."], "subsections": []}]}]}, {"section_title": "Passenger Facility Charges", "paragraphs": ["In 1990, federal deficits and expected tight budgets led to concerns that the Airport and Airway Trust Fund and other existing sources of funds for airport development would be insufficient to meet national airport needs. This led to authorization of a new user charge, the Passenger Facility Charge (PFC). The PFC was seen as a complementary funding source to AIP. The Aviation Safety and Capacity Expansion Act of 1990 allowed the Secretary of Transportation to authorize public agencies that control commercial airports to impose a fee on each paying passenger boarding an aircraft at their airports. Initially, there was a $3 cap on each airport's PFC and a $12 limit on the total PFCs that a passenger could be charged per round trip.", "The PFC is a state, local, or port authority fee, not a federally imposed tax deposited into the Treasury. Because of the complementary relationship between AIP and PFCs, PFC provisions are generally folded into the sections of FAA reauthorization legislation dealing with AIP. The money raised from PFCs must be used to finance eligible airport-related projects. Unlike AIP funds, PFC funds may be used to service debt incurred to carry out projects.", "Legislation in 2000 raised the PFC ceiling to $4.50, with an $18 limit on the total PFCs that a passenger can be charged per round trip. To impose a PFC above $3 an airport has to show that the funded projects will make significant improvements in air safety, increase competition, or reduce congestion or noise impacts on communities, and that these projects could not be fully funded by using the airport's AIP formula funds or AIP discretionary grants. Large and medium hub airports imposing PFCs above the $3 level forgo 75% of their AIP formula funds. PFCs at large and medium hub airports may not be approved unless the airport has submitted a written competition plan to FAA, which includes information about the availability of gates, leasing arrangements, gate-use requirements, controls over airside and ground-side capacity, and intentions to build gates that could be used as common facilities.", "The FAA Modernization and Reform Act of 2012 included minor changes to the PFC program. The act made permanent the trial program that authorized nonhub small airports to impose PFCs. The act also required GAO to study alternative means of collecting PFCs without including the PFC in the ticket price. The FAA Reauthorization Act of 2018 did not include significant changes to the PFC program and maintained the $4.50 PFC cap, with a maximum charge of $18 per round-trip flight. It did include a provision, however, that required a qualified organization to conduct a study assessing the infrastructure needs of airports and existing financial resources for commercial service airports and to make recommendations on the actions needed to upgrade the national aviation infrastructure system.", "Unlike AIP grants, of which over 67% in FY2018 went to airside projects (runways, taxiways, aprons, and safety-related projects), PFC revenues are heavily used for landside projects, such as terminals and transit systems on airport property, and for interest payments. Table 2 shows the AIP grant awards and PFC approvals by project type in FY2018. Annual system-wide PFC collections grew from $85.4 million in 1992 to over $3.4 billion in 2018.", "The PFC statutory language lends itself to a broader interpretation of \"capacity enhancing\" projects, and the implementing regulations are less constraining than those for AIP funds. Air carriers, which historically have preferred funding to be dedicated to airside projects, must be notified and provided with an opportunity for consultation about airports' proposals to fund projects with PFC revenues. They are generally less involved in the PFC project planning and decisionmaking process than is the case with AIP projects. The difference in the pattern of project types may also be influenced by the fact that larger airports, which collect most of the PFC revenue, tend to have substantial landside infrastructure, whereas smaller airports that are much more dependent on AIP funding have comparatively limited landside facilities."], "subsections": []}, {"section_title": "Bonds", "paragraphs": ["Bonds have long been a major source of funding for capital projects at primary airports. According to Bond Buyer, a trade publication, airports raised approximately $17.4 billion in 84 bond issues in 2018, a substantial increase over the $14.7 billion raised in 116 issues in 2017. ", "Most airport-related bonds are classified as tax-exempt private activity bonds (PABs). These bonds, issued by a local government or public authority, allow the use of landing fees, charges on airport users, and property taxes on privately controlled on-airport buildings, such as cargo facilities, to service debt without obligating tax revenue. Their tax-exempt status enables airports to raise funds more cheaply than would otherwise be the case because investors enjoy a federal income tax exclusion on interest paid on the bonds. In some cases, revenue from PFCs may be used to service the bonds. PABs may be used to build facilities that are directly related and essential to servicing aircraft, enabling aircraft to take off and land, and transferring passengers or cargo to or from aircraft.", "Normally, airport bonds might be classified as taxable PABs because they are used to finance facilities where more than 90% of the activity is private and more than 90% of the repayment is from revenue generated by the facility. Issuers of taxable PABs must pay higher interest rates than required on tax-exempt bonds, to compensate investors for the taxes due on interest income. Congress therefore created an exception allowing airports that are owned by governmental entities to issue \"qualified\" PABs that are tax-exempt. \u00a0The majority of airport bonds are considered by the Internal Revenue Service to be \"qualified\" PABs. ", "Some recent proposals would allow privately owned airports to receive the same tax-preferred treatment of their bonds as airports owned by public authorities. A possible precedent for this is the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users ( P.L. 109-59 , \u00a71143; SAFETEA-LU), which allowed for up to $15 billion in tax-exempt bond financing for highways or freight transfer facilities that would otherwise not qualify for tax-exempt financing. Many of the supporters of the SAFETEA-LU provisions envisioned expanded eligibility for PABs as a means of facilitating public-private partnerships between a public authority and an outside investor. In the airport context, this would be analogous to an airport authority agreeing to a long-term lease with a private investor who would have the ability to enter the market for tax-exempt bonds to finance improvements at the airport and, perhaps, also to finance the purchasing costs of the lease itself. "], "subsections": []}, {"section_title": "Congressional Issues", "paragraphs": ["By statute, the safe operation of airports is the highest aviation priority. Other priorities established by Congress include increasing capacity to the maximum feasible extent, minimizing noise impacts, and encouraging efficient service to state and local communities (i.e., support for general aviation airports). But there are significant disagreements about the appropriate degree of federal participation in airport development and finance and about the specific types of expenditure that should be given priority within AIP. Airline and airport operators tend to view the fully authorized funding of the program as a good thing. An alternative view, however, is that too much has been spent on AIP, particularly at smaller airports that do not play a significant role in commercial aviation. "], "subsections": [{"section_title": "Airport Capital Needs Assessments", "paragraphs": ["The assessment of airport capital needs is fundamental to determining the appropriate federal support needed to foster a safe and efficient national airport system. The federal government's interest goes beyond capacity issues to include implementation of federal safety and noise policies.", "Both FAA and the Airports Council International-North America (ACI-NA) have issued projections of airports' long-term financial needs. In its most recent NPIAS report, FAA estimated that the national system's capital needs for FY2019-FY2023 will total $35.1 billion (an annual average of approximately $7 billion). The ACI-NA infrastructure needs survey resulted in an estimate of $128.1 billion over the same years (an annual average of approximately $25.6 billion). The main reason for the widely differing estimates was disparate views on what kinds of airport projects to include. ", "The NPIAS report was based on information taken from airport master plans and state system plans, but FAA planners screened out planned projects not justified by aviation activity forecasts or not eligible for AIP grants. Only designated NPIAS airports were included in the FAA study. Implicit in this methodology is that the planning has been carried through to the point where financing is identified. Not all projects used to develop the NPIAS estimates are actually completed, or in some cases even begun, within the range of years covered in the NPIAS estimates. ACI-NA argues that the NPIAS underestimates AIP eligible needs because not all such needs will be in the current airport plans.", "The ACI-NA study reflects the broader business view of major airport operators and casts a substantially wider net. It includes projects funded by PFCs, bonds, or state or local funding; airport-funded air traffic control facilities; airport- or TSA-funded security projects; \"necessary\" AIP-ineligible projects such as parking facilities, hangars, revenue portions of terminals, and off-airport roads/transit facilities; and AIP-eligible projects not reported to FAA in the belief that there would be a low probability of receiving additional AIP funding. Its 2019-2023 infrastructure needs survey, for example, included major airport terminal projects that are ineligible for AIP grants. The ACI-NA study also includes projects without identified funding sources. The ACI-NA estimate is higher than the FAA estimate because of the wider net it casts and because it is adjusted for projected inflation.", "The estimates are important because the primary AIP reauthorization issue is the program's appropriate level of funding. Because the ACI-NA airport needs projection includes much that is not eligible for AIP grants, its accuracy may not be as critical in evaluating appropriate AIP funding levels as that of the NPIAS projections. On the other hand, the broader ACI-NA estimate may be more significant for policy choices related to bond issuance and PFCs, since these sources fund a broader range of projects than AIP."], "subsections": []}, {"section_title": "FAA Revises Demand Forecasts Downward", "paragraphs": ["In 2004, then-FAA Administrator Marion C. Blakey stated that the agency's goal was to increase total capacity at the top 35 U.S. airports by 30% over a 10-year period. FAA's Operational Evolution Plan (OEP) is intended to increase the capacity and efficiency of the National Airspace System (NAS) over a 10-year period to keep up with the expected growth in demand for air travel and air cargo. In support of that goal, FAA released a study focused on the 35 busiest airports, Capacity Needs in the National Airspace System: An Analysis of Airport and Metropolitan Area Demand and Operational Capacity in the Future (also referred to as FACT1). The study projected 18 airports would need additional capacity by 2020. ", "In 2007, FACT1 was updated by a second study, FACT2. FACT2 expanded the study to include 21 non-OEP airports that were identified as having the potential to be capacity constrained or were in capacity-constrained metropolitan areas. The study examined airports that would need capacity increases and also projected which airports would need capacity increases in 2015 and 2025. It identified four airports plus the New York metropolitan area that needed additional capacity in 2007. It further identified 14 hub airports as likely to be capacity-constrained in 2025. FACT2 found that, in comparison to FACT1, many non-OEP airports \"... have higher capacities than originally presumed and thus less need for additional capacity.\"", "A further update, FACT3, was released in January 2015. FACT3 forecasted that the 2007-2009 recession, volatile fuel costs, airline consolidation, and replacement of many 50-seat regional jets with larger aircraft would result in 32% fewer operations and about 23% fewer enplanements in 2025 at the 30 core airports than forecast in FACT2. It projected that airport delays would remain concentrated at a few major hub airports, notably the three New York City-area airports, Philadelphia International Airport, and Hartsfield-Jackson Atlanta International Airport.", "This study may have implications for the reauthorization of AIP. The large runway projects that are the focus of the OEP can require long lead times\u201410 or more years from concept to initial construction is not unusual. At large and medium hub airports, runway projects are usually paid for, in part, by AIP funds. Therefore, some projects needed by 2025 may require AIP funding in earlier years. Because large and medium airports that levy PFCs must forgo either 50% or 75% of their AIP formula entitlement funds, most federal funding for their runway projects would probably need to take the form of AIP discretionary funds. ", "The pool of discretionary funds is primarily the remainder of annual funding after the entitlement formula requirements are satisfied. Of the forgone PFC funds, 87.5% are reserved for the small airport fund and are also not available for OEP airports. If the AIP budget is constrained in the future, either under a reauthorization bill or during the annual appropriations process, and the entitlement formulas remain as they are, the discretionary portion of the AIP budget may be squeezed, limiting large airports' ability to draw on AIP funds for major capacity expansion projects."], "subsections": []}, {"section_title": "Program Restructuring and Apportionment Changes", "paragraphs": ["Many of the attributes of AIP's programmatic structure are similar to those of the 1982 act that created the program. Over the years these attributes have been modified based on perceived needs and on the practical politics of passing the periodic FAA reauthorization bills that contain the AIP provisions. These considerations make a major overhaul of the AIP structure unlikely, but may leave room for programmatic adjustments in the distribution of apportionments.", "One such adjustment might shift AIP funds to enhancing capacity at large and medium hub airports. There are several ways Congress might accomplish this. One would be to eliminate the requirement that large and medium hub airports that impose the maximum PFCs forgo 75% of their entitlements. This change would give larger airports a greater share of entitlement funding, but at the cost of reducing AIP grants to small airports. Alternatively, changes in the statutory set-asides of discretionary funds could give FAA more flexibility to use that money for capacity enhancement, but might reduce funding for noise mitigation and other purposes.", "Changes in the last several FAA authorization acts increased entitlements and broadened the range of landside projects eligible for AIP grants. These changes generally benefitted airports smaller than medium hub size. In particular, the increased amount of apportioned funds has limited the availability of funds for discretionary grants at major airports. Further changes giving airports increased flexibility in the use of their entitlements might benefit smaller airports not served by commercial aviation, in line with the national goal of having an \"extensive\" national airport system, but this use of funds might conflict with the goal of reducing congestion at major commercial airports.", "The current apportionment system relies on a $3.2 billion funding level trigger mechanism to lift most of the apportionments to twice their formula level. This has been in place for two reauthorization cycles. Should that trigger be breached, entitlements for all airports would be reduced drastically. The entitlement formulas may not be sustainable, without depleting discretionary funds, in the absence of additional funding for AIP.", "One way to reduce the amount of trust fund revenue needed for AIP would be to allow large and medium hub airports to opt out of AIP and rely exclusively on PFCs to finance capital projects. This would require raising or eliminating the federal cap on PFCs. These \"defederalized\" airports could then be released from some or all of the AIP grant assurances under which they now operate, such as land use requirements and airport revenue use restrictions. If airports exit the program, AIP spending could be reduced or could be redirected to other NPIAS airports. "], "subsections": []}, {"section_title": "Airport Privatization56", "paragraphs": ["Airport privatization denotes a change in ownership from a public entity (such as a local government or an airport authority established by a state government) to a private one. In a number of countries, such as Great Britain, government-owned airports have been privatized by sale to private owners. In the United States, some airports have allowed private ownership of certain on-airport facilities or management functions, but the ownership of all major airports remains in the hands of government entities.", "The Airport Privatization Pilot Program (49 U.S.C. \u00a747134; Section 149 of the Federal Aviation Reauthorization Act of 1996, P.L. 104-264 , as amended) authorizes FAA to exempt up to 10 airports from certain federal restrictions on the use of airport revenue off-airport. Participating airports may be also exempted from certain requirements on the repayment of federal grants. Privatized airports may still participate in the AIP, but at a lower federal share (70%). The pilot program was renamed the Airport Investment Partnership Program (AIPP) in the 2018 FAA reauthorization act and expanded to admit more than 10 airports. ", "The AIPP provides that at primary airports, the airport sponsor may only recover from the sale or lease an amount approved by at least 65% of the scheduled air carriers serving the airport, as well as by both scheduled and unscheduled air carriers that together account for 65% of the total landed weight at the airport for the year. The requirement that air carriers approve the use of airport revenue for nonairport purposes, such as profit distribution, may have served to limit interest in the program.", "To date, only two airports have completed the privatization process established under the provisions of the AIPP. One of those, Stewart International Airport in New York State, subsequently reverted to public ownership when it was purchased by the Port Authority of New York and New Jersey. Luis Mu\u00f1oz Mar\u00edn International Airport in San Juan, PR, is now the only commercial service airport operating under private management after privatization under the APPP. As of 2018, there are three applicants under active FAA consideration: Hendry County Airglades Airport in Clewiston, FL; Westchester Airport in White Plains, NY; and St. Louis Lambert International Airport in St. Louis, MO.", "There is no certainty that any AIP cost savings from privatization would be retained for use by the other AIP-eligible airports. AIP spending is determined by the authorization and appropriations process, and Congress could choose to use any savings to reduce the program size, to marginally assist in deficit reduction, to reduce general fund portions of FAA operations funding, or to make money available for spending elsewhere."], "subsections": []}, {"section_title": "Grant Assurances", "paragraphs": ["Debate over FAA reauthorization generally brings forth proposals to alter the AIP grant assurances, such as ensuring that workers on airport construction projects receive prevailing wages set under the Davis-Bacon Act and pledging to use airport revenue solely for spending on airport operations and capital costs. If AIP spending remains constrained, critics are likely to argue that the grant assurances raise the cost of projects to increase airport capacity and complicate the closure and reuse of underutilized airports or airports that are locally unpopular due to noise or safety concerns."], "subsections": []}, {"section_title": "Noise Mitigation", "paragraphs": ["Historically, a basic funding issue is whether to change the existing discretionary fund set-aside for noise mitigation and abatement. The noise set-aside, however, has been increased in previous reauthorization acts and is now 35% of discretionary funding. Demand to use AIP funds for noise mitigation could increase if Congress grants FAA the flexibility to fund noise mitigation projects that are outside the DNL 65 decibel (dB) noise impact area, but this could divert resources from capacity and safety projects. A related issue is whether to make the planning for noise-mitigating air traffic control procedures at individual airports eligible for AIP funding."], "subsections": []}, {"section_title": "Passenger Facility Charge Issues", "paragraphs": ["The central issue related to PFCs is whether to raise the $4.50 per enplaned passenger ceiling or to eliminate the ceiling altogether. In general, airports argue for increasing or eliminating the ceiling, whereas most air carriers and some passenger advocates oppose higher limits on the PFCs. A 2015 GAO study analyzed the effects by raising the PFC cap under three scenarios: setting the cap at $6.47, $8.00, or $8.50. The study found raising PFC would significantly increase airport funding, but could also marginally slow passenger growth and therefore the growth in revenues to the trust fund. ", "PFC supporters feel that the PFC is more reliable than AIP funding, which is subject to the authorization and appropriations process. They also argue that PFCs are procompetitive, helping airports build gates and facilities that both encourage new entrant carriers and allow incumbent carriers to expand. Advocates of an increase in the cap also argue that over time, the value of the PFC has been eroded by inflation and an adjustment is therefore necessary. ", "The permissible uses of revenues are an ongoing point of contention. Airport operators, in particular, would like more freedom to use PFC funds for off-airport projects, such as transportation access projects, and want the process of obtaining FAA approval to be streamlined. Carriers, on the other hand, often complain that airports use PFC funds to finance proposals of dubious value, especially outside airport boundaries, instead of high-priority projects that offer meaningful safety or capacity enhancements. The major air carriers are also unhappy with their limited influence over project decisions, as airports are required only to consult with resident air carriers instead of having to get their agreement on PFC-funded projects. "], "subsections": []}, {"section_title": "Alternative Minimum Tax", "paragraphs": ["Unlike interest income from governmental bonds, which is not subject to the alternative minimum tax (AMT), interest from private activity bonds is still subject to the AMT. ACI-NA has proposed broadening the definition of governmental airport bonds to, in effect, include either all airport bonds or at least those bonds issued for public-use projects that meet AIP or PFC eligibility requirements.", "Opponents of such changes express concerns that these changes would reduce U.S. Treasury revenues. Some also argue it would make more sense to change the AMT as part of a tax bill rather than including a specific exemption for income on airport bonds in an FAA reauthorization bill. In either case, such a change would not be under the jurisdiction of the congressional committees that will have jurisdiction over most reauthorization provisions. Changes to the AMT would be under the jurisdiction of the congressional tax-writing committees, the House Committee on Ways and Means and the Senate Committee on Finance.", "Appendix A. Legislative History of Federal\u00a0Grants-in-Aid to Airports", "Prior to World War II the federal government viewed airports as a local responsibility. During the 1930s, it spent about $150 million a year on airports through work relief agencies such as the Works Progress Administration (WPA). The first federal support for airport construction was granted during World War II. After the war, the Federal Airport Act of 1946 (P.L. 79-377) created the Federal Aid to Airports Program, using funds appropriated annually from the general fund. Initially much of this spending supported conversion of military airports to civilian use. In the 1960s substantial funding went to upgrade and extend runways for use by commercial jets. By the end of the 1960s, congestion, both in the air and on the ground at U.S. airports, was seen as evidence that airport capacity was inadequate.", "Airport and Airway Development and Revenue Acts of 1970 (P.L. 91-258)", "In 1970, Congress responded to the capacity concerns by passing two acts. The first, the Airport and Airway Development Act (Title I of P.L. 91-258), established the Airport Development Aid Program (ADAP) and the Planning Grant Program (PGP), and set forth the programs' grant criteria, distribution guidelines, and authorization of grant-in-aid funding for the first five years of the program. The second, the Airport and Airway Revenue Act of 1970 (Title II of P.L. 91-258), established the Airport and Airway Trust Fund. Revenues from levies on aviation users and fuel were dedicated to the fund. Under the 1970 acts the trust fund could pay capital costs and, when excess funds existed, could also help cover FAA's administrative and operations costs.", "Airport and Airway Development and Revenue Acts Amendments of 1971 (P.L. 92-174)", "The Nixon Administration's FAA budget requests for FY1971 and FY1972 under the new trust fund system brought it into immediate conflict with Congress over the budgetary treatment of trust fund revenues. The Administration treated the new financing system as a user-pay system, whereas many Members of Congress viewed the trust fund as primarily a capital fund. The 1971 Amendments Act made the trust fund a capital-only account (although only through FY1976), disallowing the use of trust fund revenues for FAA operations.", "Airport and Airway Development Amendments Act of 1976 ( P.L. 94-353 )", "The 1976 act made a number of adjustments to the ADAP and reauthorized the Airport and Airway Trust Fund through FY1980. The act again allowed the use of trust fund resources for the costs of air navigation services (a part of operations and maintenance). However, in an attempt to assure adequate funding of airport grants, the act included \"cap and penalty\" provisions which placed an annual cap on spending for costs of air navigation systems and a penalty that reduced these caps if airport grants were not funded each year at the airport program's authorized levels. This cap was altered multiple times in reauthorization acts in the following decades. ADAP grants totaled about $4.1 billion from 1971 through 1980. Congress did not pass authorizing legislation for ADAP during FY1981 and FY1982, during which the aviation trust fund lapsed, although spending for airport grants continued.", "Airport and Airway Improvement Act of 1982 ( P.L. 97-248 )", "The 1982 act created the current AIP and reactivated the Airport and Airway Trust Fund. It altered the funding distribution among the newly defined categories of airports, extending aid eligibility to privately owned general aviation airports, increasing the federal share of eligible project costs, and earmarking 8% of total funding for noise abatement and compatibility planning. The act also required the Secretary of Transportation to publish a national plan for the development of public-use airports in the United States. This biannual publication, the National Plan of Integrated Airport Systems (NPIAS) , identifies airports that are considered important to the national aviation system. For an airport to receive AIP funds it must be listed in the NPIAS.", "Although the 1982 act was amended often in the 1980s and early 1990s, the general structure of AIP remained the same. The Airport and Airway Safety and Capacity Expansion Act of 1987 ( P.L. 100-223 ; 1987 act) authorized significant spending increases for AIP and added a cargo service apportionment. It also included provisions to encourage full funding of AIP at the authorized level. Title IX of P.L. 101-508 , the Omnibus Budget Reconciliation Act of 1990 (OBRA1990), included the Aviation and Airway Safety and Capacity Act of 1990, which allowed airports, under certain conditions, to levy a Passenger Facility Charge (PFC) to raise revenue and also established the Military Airport Program (MAP), which provided AIP funding for capacity and/or conversion-related projects at joint-use or former military airports. The Airport Noise and Capacity Act of 1990 (OBRA 1990, Title IX, Subtitle D) set a national aviation noise policy. OBRA1990 included the Revenue Reconciliation Act of 1990, which reauthorized the Aviation Trust Fund and adjusted some of the aviation taxes. The Federal Aviation Reauthorization Act of 1994 ( P.L. 103-305 ) reauthorized AIP for two more years and again made modifications in the cap and penalty provisions.", "Federal Aviation Reauthorization Act of 1996 ( P.L. 104-264 )", "The 1996 reauthorization of the AIP made a number of adjustments to entitlement funding and discretionary set-aside provisions. It also included directives concerning intermodal planning, cost reimbursement rules, letters of intent, and the small airport fund. A demonstration airport privatization program and a demonstration program for innovative financing techniques were established. The demonstration status of the state block grant program was removed. The act did not reauthorize the taxes that supported the Airport and Airway Trust Fund. This was done by the Taxpayer Relief Act of 1997 ( P.L. 105-34 ), which extended, subject to a number of modifications, the existing aviation trust fund taxes through September 30, 2007.", "The Wendell H. Ford Aviation Investment and Reform Act for the 21 st Century of 2000 (AIR21; P.L. 106-181 )", "The enactment of AIR21 was the culmination of two years of legislative effort to pass a multiyear FAA reauthorization bill.", "The initial debate focused on provisions to take the aviation trust fund off-budget or erect budgetary \"firewalls\" to assure that all trust fund revenues and interest would be spent each year for aviation purposes. These proposals, however, never emerged from the conference committee. Instead, the enacted legislation included a so-called \"guarantee\" that all of each year's receipts and interest credited to the trust fund would be made available annually for aviation purposes. ", "AIR21 did not make major changes in the structure or functioning of AIP. It did, however, greatly increase the amount available for airport development projects. The AIP funding authorization rose from $1.9 billion in FY2000 to $3.4 billion in FY2003. The formula funding and minimums for primary airports were doubled starting in FY2001. The state apportionment for general aviation airports was increased from 18.5% to 20%. The noise set-aside was increased from 31% to 34% of discretionary funding and a reliever airport discretionary set-aside of 0.66% was established.", "AIR21 also increased the PFC maximum to $4.50 per boarding passenger. In return for imposing a PFC above the $3 level, large and medium hub airports would forgo 75% of their AIP formula funds. This had the effect of making a greater share of AIP funding available to smaller airports.", "Vision 100: Century of Aviation Reauthorization Act of 2003 ( P.L. 108-176 ; H.Rept. 108-334 )", "Vision 100, signed by President George W. Bush on December 12, 2003, included significant changes to AIP. The law codified the AIR21 spending \"guarantees\" through FY2007. It increased the discretionary set-aside for noise compatibility projects from 34% to 35%. It increased the amount that an airport participating in the Military Airport Program (MAP) could receive to $10 million for FY2004 and FY2005, but in FY2006 and FY2007 it returned the maximum funding level to $7 million. The act allowed nonprimary airports to use their entitlements for revenue-generating aeronautical support facilities, including fuel farms and hangars, if the Secretary of Transportation determines that the sponsor has made adequate provisions for the airside needs of the airport. The law permitted AIP grants at small airports to be used to pay interest on bonds issued to finance airport projects. The act included a trial program to test procedures for authorizing small airports to impose PFCs. Vision 100 repealed the authority to use AIP or PFC funds for most airport security purposes.", "FAA Modernization and Reform Act of 2012 ( P.L. 112-95 )", "The 2012 FAA reauthorization act funded AIP for four years from FY2012 to FY2015 at an annual level of $3.35 billion. A new provision, Section 138, permitted small airports reclassified as medium hubs due to increased passenger volumes to retain eligibility for up to a 90% federal share for a two-year transition period. This provision also allows certain economically distressed communities receiving subsidized air service to be eligible for up to a 95% federal share of project costs.", "The 2012 act maintained the $4.50 PFC cap, with a maximum charge of $18 per round-trip flight. It included a provision that instructed GAO to study alternative means for collecting PFCs. The act also expanded the number of airports that could participate in the airport privatization pilot program from 5 to 10. This law was extended through July 15, 2016.", "The FAA Extension, Safety, and Security Act of 2016 ( P.L. 114-190 )", "The 2016 FAA extension act funded AIP through FY2017 at an annual level of $3.35 billion. A new provision, Section 2303, provided temporary relief to small airports that had 10,000 or more passenger boardings in 2012 but had fewer than 10,000 during the calendar year used to calculate the AIP apportionment for FY2017. This provision allowed such airports to receive apportionment for FY2017 an amount based on the number of passenger boardings at the airport during calendar year 2012. ", "The FAA Reauthorization Act of 2018 ( P.L. 115-254 )", "The 2018 FAA reauthorization act funded AIP for five years from FY2019 through FY2023 at an annual level of $3.35 billion. It also authorized supplemental annual funding from the general fund to the AIP discretionary funds\u2014$1.02 billion in FY2019, $1.04 billion in FY2020, $1.06 billion in FY2021, $1.09 billion in FY2022, and $1.11 billion in FY2023\u2014and required at least 50% of the additional discretionary funds to be available to nonhub and small hub airports.", "The act included a provision permitting eligible projects at small airports (including those in the State Block Grant Program) to receive 95% federal share of project costs (otherwise capped at 90%), if such projects are determined to be successive phases of a multiphase construction project that received a grant in FY2011. ", "The 2018 reauthorization expanded the number of states that could participate in the State Block Grant Program from 10 to 20 and also expanded the existing airport privatization pilot program (now renamed the Airport Investment Partnership Program) to include more than 10 airports. The law included a provision that forbids states or local governments from levying or collecting taxes on a business on an airport that \"is not generally imposed on sales or services by that State, political subdivision, or authority unless wholly utilized for airport or aeronautical purposes.\"", "Appendix B. Definitions of Airports Included in\u00a0the\u00a0NPIAS", "Commercial Service Airports", "Publicly owned airports that receive scheduled passenger service and board at least 2,500 passengers each year (506 airports).", "Primary Airports . Airports that board more than 10,000 passengers each year. There are four subcategories:", "Large Hub Airports . Board 1% or more of system -wide boardings ( 30 airports, 72 % of all enplanements)Medium Hub Airports . Board 0.25% but less than 1% (31 airports, 16% of all enplanements) Small Hub Airports . Board 0.05% but less than 0.25% (72 airports, 8% of all enplanements) Non hub Primary Airports . Board more than 10,000 but less than 0.05% (247 airports, 3% of all enplanements)", "Non primary Commercial Service Airports . Board at least 2,500 but no more than 10,000 passengers each year (126 airports, 0.1% of all enplanements).", "Other Airports", "General Aviation Airports . General aviation airports do not receive scheduled commercial or military service but typically do support business, personal, and instructional flying; agricultural spraying; air ambulances; on-demand air-taxies; and/or charter aircraft service (2,554 airports).", "Reliever Airports . Airports designated by FAA to relieve congestion at commercial airports and provide improved general aviation access (261 airports).", "Cargo Service Airports . Airports served by aircraft that transport cargo only and have a total annual landed weight of over 100 million pounds. An airport may be both a commercial service and a cargo service airport.", "New Airports", "Seven airports are anticipated to be built between 2019 and 2023. They include two primary airports, two nonprimary commercial service airports, and three general aviation airports."], "subsections": []}]}]}}
{"id": "R44408", "title": "Cybersecurity: Cybercrime and National Security Authoritative Reports and Resources", "released_date": "2019-01-11T00:00:00", "summary": ["As online attacks grow in volume and sophistication, the United States is expanding its cybersecurity efforts. Cybercriminals continue to develop new ways to ensnare victims, whereas nation-state hackers compromise companies, government agencies, and businesses to create espionage networks and steal information. Threats come from both criminals and hostile countries, especially China, Russia, Iran, and North Korea.", "Much is written on this topic, and this CRS report directs the reader to authoritative sources that address many of the most prominent issues. The annotated descriptions of these sources are listed in reverse chronological order, with an emphasis on material published in the past several years. This report includes resources and studies from government agencies (federal, state, local, and international), think tanks, academic institutions, news organizations, and other sources:", "Table 1\u2014cybercrime, data breaches and security, including hacking, real-time attack maps, and statistics (such as economic estimates) Table 2\u2014national security, cyber espionage, and cyberwar, including Stuxnet, China, and the Dark Web Table 3\u2014, The Internet of Things (IoT), smart cites, cloud computing, and FedRAMP", "The following reports comprise a series of authoritative reports and resources on these additional cybersecurity topics:", "CRS Report R44405, Cybersecurity: Overview Reports and Links to Government, News, and Related Resources, by Rita Tehan. CRS Report R44406, Cybersecurity: Education, Training, and R&D Authoritative Reports and Resources, by Rita Tehan. CRS Report R44408, Cybersecurity: Cybercrime and National Security Authoritative Reports and Resources, by Rita Tehan. CRS Report R44410, Cybersecurity: Critical Infrastructure Authoritative Reports and Resources, by Rita Tehan. CRS Report R44417, Cybersecurity: State, Local, and International Authoritative Reports and Resources, by Rita Tehan. CRS Report R44427, Cybersecurity: Federal Government Authoritative Reports and Resources, by Rita Tehan. CRS Report R43317, Cybersecurity: Legislation, Hearings, and Executive Branch Documents, by Rita Tehan. CRS Report R43310, Cybersecurity: Data, Statistics, and Glossaries, by Rita Tehan."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["As online attacks grow in volume and sophistication, the United States is expanding its cybersecurity efforts. Cybercriminals continue to develop new ways to ensnare victims, whereas nation-state hackers compromise companies, government agencies, and businesses to create espionage networks and steal information. Threats come from both criminals and hostile countries, especially China, Russia, Iran, and North Korea. ", "Much is written on this topic, and this CRS report directs the reader to authoritative sources that address many of the most prominent issues. The annotated descriptions of these sources are listed in reverse chronological order, with an emphasis on material published in the past several years. This report includes resources and studies from government agencies (federal, state, local, and international), think tanks, academic institutions, news organizations, and other sources:", "Table 1 \u2014cybercrime, data breaches and security, including hacking, real-time attack maps, and statistics (such as economic estimates) Table 2 \u2014national security, cyber espionage, and cyberwar, including Stuxnet, China, and the Dark Web Table 3 \u2014 the Internet of Things (IoT), smart cities, cloud computing, and FedRAMP"], "subsections": []}]}}
{"id": "R40683", "title": "Congressional Member Organizations (CMOs) and Informal Member Groups: Their Purpose and Activities, History, and Formation", "released_date": "2019-01-23T00:00:00", "summary": ["This report examines the historical development and contemporary role of Congressional Member Organizations (CMOs) in the House, as well as informal Member groups in the House, Senate, and across the chambers. Commonly, these groups are referred to as caucuses, but they will be referred to collectively as informal Member organizations in this report to avoid confusion with official party caucuses. Some examples of groups that modern observers would consider informal Member organizations date back as far as the early 1800s, but the number of groups has grown substantially since the 1990s.", "Members of the House and Senate may form these groups and participate in their activities for a variety of reasons. Often the objectives of these groups coincide with Members' policy objectives or representational considerations. These groups enable Members to exchange information and ideas with colleagues, and can facilitate interactions among Members who might not otherwise have opportunities to work with one another.", "Some groups may be eligible to register with the Committee on House Administration as a Congressional Member Organization (CMO), which enables House Members to utilize some personal office resources in support of CMO legislative activities. CMOs may include Senators among their members, but the Senate has no registration process for Member groups. Informal Member organizations that are not registered with the Committee on House Administration (including those in the Senate) are called informal Member groups. The term informal Member organization is used when referring to both CMOs and informal Member groups.", "Since the 1970s, the House has issued various regulations governing informal Member organizations. This history provides some additional background on existing CMO regulations and can provide further insights about some of the perceived benefits and shortcomings of these groups. To increase accountability and transparency in an era when Member groups had greater access to institutional resources, the House created its first regulations in 1979 for Member groups registered with the Committee on House Administration as Legislative Service Organizations (LSOs). In 1995, LSOs were abolished and CMOs were created, with limited abilities to use official resources in support of Member groups. Beginning in 2015, the Committee on House Administration created a designation of Eligible Congressional Member Organizations (ECMOs) for certain CMOs, which enables Members to assign personal office staff to work on behalf of an ECMO; four CMOs in the 115th Congress were designated as ECMOs.", "In recent years, the number of CMOs and informal Member groups has increased, more than doubling from the 108th Congress (350) to the 115th Congress (854). This increase has taken place even though (with limited exceptions in certain specific circumstances) House Members can no longer use their Members' Representational Allowance (MRA) to directly support a CMO or informal Member group as an independent entity; provide congressional office space for these organizations; use the congressional frank to support their activities; or accept goods, funds, or services from private organizations or individuals to support their activities. Despite these limits imposed on the options available to House Members to support informal Member organizations, CMOs and other informal Member organizations have retained an ongoing role in the congressional policymaking process. Their influence has endured largely because many Members continue to consider their participation in informal Member groups and CMOs as advantageous in achieving their legislative and representational goals."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Several hundred informal Member organizations exist within the House of Representatives, Senate, or between both the chambers; these organizations typically reflect Members' shared legislative objectives or representational interests. These groups may commonly be described as congressional caucuses, working groups, or task forces, but in this report, will be identified, collectively, as informal Member organizations , to avoid confusion with official party caucuses. An additional distinction between informal Member organizations may be drawn. In the House of Representatives, some groups may register with the Committee on House Administration to form a Congressional Member Organization (CMO). CMOs registered with the Committee on House Administration can include groups exclusively for House Members or bicameral groups that include House Members and Senators. Informal Member organizations that are not registered with the Committee on House Administration are called informal Member groups ; these include groups exclusive to the Senate, which does not have any formal registration process for informal Member organizations. These distinctions are described in greater detail in the sections below. ", "The Appendix provides some considerations for House Members seeking to form a CMO. Some of these considerations that are not exclusive to the House process, such as determining a group's objective and possible membership, may also be of interest to Senators or House Members seeking to form an informal Member group. "], "subsections": []}, {"section_title": "Types of Informal Member Organizations", "paragraphs": ["There are two types of informal Member organizations: Congressional Member Organizations (CMOs) and informal Member groups. "], "subsections": [{"section_title": "Congressional Member Organizations (CMOs)", "paragraphs": ["The term C ongressional Member O rganization refers to a group of Members that is registered with the Committee on House Administration to support a common legislative objective. CMOs may be composed of House Members exclusively, or they may include House Members and Senators. The requirements to register a group as a CMO, as well as guidelines governing how official resources under the control of the Member may be available to use for CMO activities, are provided on the website of the Committee on House Administration. ", "To become a CMO, the Committee on House Administration requires that at least one of the officers associated with the group must be a Member of the House. A group seeking identification as a CMO must also register electronically with the Committee on House Administration by submitting a letter on official letterhead containing the name of the CMO, its statement of purpose, names of its officers, and contact information for staff designated to work on issues related to the CMO. If a group's application complies with the Committee on House Administration's guidelines for CMOs and is approved by the committee, the group will be included in the online list of registered CMOs for the current Congress. A registered CMO may request use of internal House mail, House intranet site, and a postbox at House Postal Operations. A CMO must reregister with the Committee on House Administration in every Congress to maintain its status as such.", "House Members may have personal office staff (including shared employees) assist a CMO with its legislative objectives. CMOs are not employing authorities, nor do they have separate corporate or legal identities. House Members may also utilize some official resources for CMO activities, subject to limitations established by the Committee on House Administration. CMOs cannot be assigned office space, host a separate website, send franked mail, or use official funds to print or pay for stationery. The Members' Representational Allowance (MRA) may not be used to directly support a CMO as an independent entity, nor can individual Members use their franking privilege on behalf of a CMO. Members may use official resources for communications related to a CMO, to prepare materials related to CMO issues for dissemination, or to publicize CMO issues on a section of their official House website. Neither CMOs nor individual Members may accept funds, goods, or services from private individuals or organizations to support the CMO. Members may, however, use personal funds to support a CMO. ", "House Members who join CMOs must conduct their activities in accordance with applicable provisions in law, the House Ethics Manual , Members' Congressional Handbook , and Rules of the House (including House Rule XXIII, the House Code of Official Conduct). Some additional guidance addressing CMO and informal Member group funding is available on the House Committee on Ethics website. In general, unless otherwise specified, the same regulations applicable to House Members as individuals also apply to their participation in CMOs. Members can contact the Committee on House Administration; the Commission on Congressional Mailing Standards (also known as the Franking Commission); and the Office of Advice and Education of the House Committee on Ethics for information and guidance. Additional regulations may apply to shared employees."], "subsections": [{"section_title": "Eligible Congressional Member Organizations (ECMOs)", "paragraphs": ["Beginning in the 114 th Congress, the House amended its rules to allow certain CMOs to be designated as E ligible Congressional Member Organizations (ECMOs). Members may assign personal office staff to work on behalf of an ECMO and transfer associated MRA funds for salaries and expenses for those employees to a dedicated House account administered by the ECMO. H.Res. 6 directs the Committee on House Administration to promulgate relevant regulations regarding the use of MRA funds, shared employees, and access of House services. To qualify for ECMO status, a group must have been a registered CMO in the preceding Congress, with shared employees from at least 15 House Member offices; register as a CMO in the 116 th Congress; designate a single House Member as administrator of the group; and have at least three House employees assigned to perform work on its behalf. The Committee on House Administration provides further information about the eligibility and disclosure requirements, registration process, and other regulations for ECMOs."], "subsections": []}]}, {"section_title": "Informal Member Groups in the House and Senate", "paragraphs": ["In addition to registered CMOs, informal Member groups exist in the House, Senate, and across the chambers. Some informal groups with House Members may be loosely organized associations of like-minded Members; others may be more structured and operate similarly to CMOs but are not registered with the Committee on House Administration. In general, the rules and regulations that apply to House Members as individuals apply to their participation in informal Member groups, including applicable provisions in law, the House Ethics Manual , Members' Congressional Handbook , and Rules of the House (including House Rule XXIII, the House Code of Official Conduct). The Committee on House Administration and House Committee on Ethics can provide further guidance for Members. ", "The Senate does not have a registration process for informal Member groups. Historically, Senate informal groups have drawn upon resources available to Senators for materials and services, without dedicating any additional funding to the organization. Because of their traditional, nonofficial status and informal nature, specific regulation of such groups in the Senate has not been deemed necessary. As in the House, informal groups of Senators are collectively subject to the same regulations applicable to Senators as individuals as indicated in the Senate Ethics Manual , Rules of the Senate, and the Senate Code of Official Conduct. Further guidance may be available to Senators from the Senate Committee on Ethics and Committee on Rules and Administration. Separate regulations expressly recognizing them and prescribing their operations have never been implemented in the Senate."], "subsections": []}]}, {"section_title": "Number of Informal Member Organizations Over Time", "paragraphs": ["The number of identified informal Member organizations since the 92 nd Congress (1971-1972) is provided in Table 1 , which shows how an increase began in the 1970s and has increased more markedly since the 1990s. The Committee on House Administration lists 518 registered CMOs for the 115 th Congress, which includes House-only organizations and some bicameral organizations. It is more challenging to tally the number of informal Member groups because they are not officially tracked by the House or Senate. Self-reported information from House Members' offices in the Congressional Yellow Book identifies an additional 158 groups, some of which may be House-only and some of which may be bicameral groups. Self-reported information from Senators' offices in the Congressional Yellow Book identifies 178 groups, some of which may be Senate-only and some of which may be bicameral groups. "], "subsections": []}, {"section_title": "Purpose of Informal Member Organizations", "paragraphs": ["Informal Member organizations typically exist as forums to discuss ideas and potential activities related to public policy or representational considerations. Groups may engage in direct legislative advocacy for a particular issue or concern, provide opportunities to educate Members and staff on policy matters, or generate broader public awareness on these topics. Groups often hold regular Member or staff meetings to exchange information and develop legislative strategy. Many informal Member organizations also invite outside speakers and groups to make presentations to their Members. Some informal Member organizations may have a relatively narrow legislative interest or objective. Other groups may have a broader focus and address multiple issues of concern for a particular geographic region, economic sector, or generalized policy area. ", "Many Members view their participation in informal group or CMO activities as a means to realize both electoral and policy objectives. An informal Member organization can", "be readily established as circumstances and issues warrant without first enacting legislation or changing House, Senate, or party rules; open or limit its membership as it deems necessary to accomplish its goals; expand Members' opportunities to specialize on issues because there is no limit on the number of groups that can exist or on the number of groups that a Member can join; serve as a vehicle for the resolution of issue and policy differences between committees, parties, or the two houses; provide an opportunity for a comprehensive and coordinated approach to issues over which committee jurisdiction is unclear or fragmented; conduct briefings and use other means to provide Members information and analysis on issues of interest; attract attention to issues that the group members believe need to be addressed; and enhance Members' relations and standing with particular constituencies.", "In addition to the benefits that informal Member organizations may provide, some observers have noted certain limitations or disadvantages to these groups. Specifically, they have argued that informal Member organizations", "have become so numerous that their significance has been diminished, as nearly every cause or issue has a Member organization; compete with the formal leadership and committee structure and functions; undermine or even impede the legislative process by further fragmenting the congressional policymaking process; may facilitate certain special interests in attaining undue attention in the legislative process; create a perception of conflict of interest for Members who may have formal legislative responsibilities within the same subject areas covered by the informal Member organization (i.e., by appearing to be an advocate and adjudicator of an issue at the same time); and present the possibility of Congress being viewed negatively by the public as overly influenced by special interests. ", "Ethical considerations have arisen related to the nature and extent of Member participation on governing bodies of outside, nonprofit, tax-exempt organizations with informal ties to CMOs, particularly with regard to Members' participation in fundraising for these outside foundations. Under the current House ethics rules, House Members are permitted to serve on the boards of certain outside groups, including nonprofit foundations and institutes, so long as they do not serve for compensation and their service does not conflict with a Member's general obligation to the public. House Members are also permitted to raise funds for certain nonprofit organizations, but they are prohibited from raising money for any organization that is \"established or controlled by Members (or staff)\" without receiving permission from the House Committee on Ethics.", "Questions as to whether a nonprofit organization's activities are related to a Member's official duties can be directed to the House Committee on Ethics."], "subsections": []}, {"section_title": "Types of Informal Member Organizations", "paragraphs": ["In addition to the distinction between CMOs and informal Member groups, informal Member organizations may be broadly categorized by the purpose of the group. In general, six categories can serve as a classification system for informal Member organizations, although some informal Member organizations may be difficult to fit into any category or may fit into multiple categories. The six categories of informal Member organizations are", "1. intraparty (promoting the policy views of like-minded Members within a political party); 2. personal interest (typically focused on a broad, single concern, such as the environment or children, that is often under the jurisdiction of more than one committee); 3. industry (advocating the interests of a particular industry); 4. regional (championing the interests of a particular region); 5. state/district (advocating the interests of a particular state or district); and 6. national constituency (advocating the interests of particular groups of constituents, such as women, minorities, and veterans).", "Members who join intraparty Member organizations, such as the Blue Dog Coalition and the Republican Study Committee, tend to use their membership as a forum to exchange information and develop legislative strategy with party colleagues who share their political ideology. They tend to work on a wide range of issues and \"have been important factors in agenda setting\" by attracting attention to issues. Personal interest Member organizations, such as the Congressional Diabetes Caucus and the Congressional Sportsmen's Caucus, tend to focus on increasing public and congressional awareness of issues, offer new solutions for addressing them, and attempt to influence the congressional agenda. ", "CMOs that focus on issues of interest to particular industries, such as the Congressional Automotive Caucus, Congressional Shipbuilding Caucus, and Congressional Steel Caucus, tend to attract Members who are strongly committed to promoting that industry's interests. Members often view their membership as a means to increase congressional awareness of the industry's concerns, develop legislative strategy, and signal to constituents that they are actively promoting their interests. ", "Regional CMOs, such as the Northeast-Midwest Congressional Coalition and Congressional Western Caucus, and state/district CMOs, such as the California Democratic Congressional Delegation, tend to focus on promoting legislative provisions that they believe will assist their region or state/district. ", "National constituency CMOs, such as the Congressional Black Caucus, Congressional Hispanic Caucus, and Congressional Hispanic Conference, tend to have broad concerns that often fall under the jurisdiction of more than one committee. In addition to engaging in a wide range of agenda-setting activities, such as testifying before congressional committees and drafting bills and amendments, national constituency CMOs are more likely than other CMOs to attempt to place issues on the legislative agenda. Members tend to join national constituency CMOs to raise public and congressional awareness of their issues, exchange information, and develop legislative strategy. "], "subsections": []}, {"section_title": "Historical Development of Informal Member Organizations", "paragraphs": ["Since the earliest Congresses, Members have gathered to promote their mutual interests in ad hoc, informal settings, outside of the formal committee and political party systems. This section provides examples of some of these early groups, followed by the developments that shaped the modern system of informal Member organizations. Two key changes for informal Member organizations in the House are also discussed: the development of Legislative Service Organizations (LSOs), which operated from 1979 to 1994, and the creation of congressional Member organizations in 1995."], "subsections": [{"section_title": "Examples of Early Informal Member Organizations", "paragraphs": ["When Congress first convened in Washington, DC, many Members resided in local boardinghouses and spent considerable time discussing legislation and building coalitions after-hours with their colleagues who also resided in their house. Historians have noted that there was a close correlation in the voting records among those Members who boarded together, often forming boardinghouse voting blocs. In 1812, the efforts of two informal congressional groups, the War Hawks and the Invisibles, were instrumental in the declaration of war against Great Britain in the War of 1812. In 1833, several Members of Congress formed the Congressional Temperance Society to advocate abstinence from intoxicating beverages, and the group remained active until 1899. In the 1840s, the Abolitionist Group, an informal congressional group, worked in opposition to slavery."], "subsections": []}, {"section_title": "Mid-20th Century Informal Member Organizations", "paragraphs": ["One prominent Member group from the mid-20 th century was the Chowder and Marching Society, which was founded in 1949 by 15 Republican House Members, including future Presidents Richard M. Nixon and Gerald R. Ford. It was initially formed to oppose legislation providing monthly bonuses for war veterans, which the Members considered too costly. As its membership increased over time, it served as a somewhat exclusive social forum for leading Republican Members of Congress to discuss pending legislation and legislative strategy. In 1957, several freshman House Republicans formed the Acorns, which served both as a social group and as a forum to discuss legislative issues.", "The Democratic Study Group (DSG), established in 1959, is considered by many observers to be the first modern informal Member organization. It was formed by moderate and liberal House Democrats to counter the influence of southern conservative Democrats who chaired many of the House's committees at the time. Forty Members attended its organizational meeting in 1959. Over time, the dues-paying membership of the DSG increased, ranging from 115 to 170 Members during the early 1970s, to around 225 during the mid-1970s, and 250 in 1980. Membership then fell to around 200 dues-paying Members during the remainder of the 1980s.", "Initially, DSG meetings focused on providing legislative briefings for Members and developing strategy concerning pending floor legislation. Later, the DSG gained influence in the House by establishing a whip system and using paid staff to create research and policy analyses. DSG staff briefing papers and information on scheduled floor votes became essential reading material for many Members, especially for those who were not serving on the committee of jurisdiction. A leading congressional scholar described the DSG's influence on the legislative process as follows:", "Operating out of an office on the top floor of the Longworth House Office Building, DSG staff briefing papers and information on scheduled floor legislation filled an information gap left open by party leaders. Even Republicans subscribed to the DSG Legislative Report for its detailed, balanced descriptions of bills and proposed amendments scheduled for floor action and for information on the rules setting the terms of floor debate. By 1977, 37 percent of House Members and 66 percent of legislative assistants surveyed by the House Commission on Administrative Review reported relying heavily on DSG material for information on legislation scheduled for floor action. Even a higher proportion of legislative assistants used DSG information for committee work and to keep up-to-date on public issues.", "In 1963, 14 moderate and liberal House Republican freshmen, led by Representative F. Bradford Morse (R-MA), formed the Wednesday Group to serve as a forum for the exchange of information on pending legislation. Its membership later grew to about 30 Members. In 1966, Senators Jacob Javits (R-NY), Joseph Clark (D-PA), and George McGovern (D-SD), and Representative Robert Kastenmeier (D-WI) formed the nonpartisan Members of Congress for Peace Through Law (MCPL) to advocate their views on foreign affairs and defense policy and concerns about the escalating Vietnam conflict. One of its Members, Representative Paul McCloskey (R-CA), declared ", "[t]he beauty of the MCPL, the great function that it performs, is that it gives us a source of knowledge and an opportunity for self-information outside the formal committee work.... Essentially, it's a rebel organization. We're rebelling against the close ties between the Administration and committee chairmen who have a monopoly on information.", "For several years, the DSG, Wednesday Group, and MCPL were the only informal Member groups within Congress that achieved a visible and enduring status within the institution."], "subsections": []}, {"section_title": "Growth of Informal Member Organizations Beginning in the 1970s", "paragraphs": ["As shown in Table 1 , the number of informal Member groups increased during the 1970s. The establishment of the Conference of Great Lakes Congressmen in 1970 and the Congressional Black Caucus (CBC) in 1971 increased the number of informal Member organizations to five. By 1980, the number of informal Member organizations had grown to 59, not counting class clubs. During the 1970s, scholars note that Members were largely expected to follow and respect the norms of seniority, apprenticeship, and legislative specialization within the committee system. For Members who felt that these institutional arrangements inhibited their personal or policy objectives, informal Member organizations may have provided an alternative system for policy work that provided greater opportunities for individual policy specialization, representation of constituent interests, and working with like-minded colleagues."], "subsections": [{"section_title": "House Regulation of Groups as Legislative Service Organizations (LSOs)", "paragraphs": ["As the number of informal Member organizations grew throughout the 1970s, several Members and political organizations called for regulation of these groups, arguing that they operated largely beyond the reach of congressional ethics rules and were not subject to any direct congressional oversight. ", "In September 1977, the Commission on Administrative Review of the House of Representatives recommended that informal Member groups \"should be held accountable for the spending of public monies.\" To accomplish this goal, the commission made recommendations for informal Member organizations, generally, and created recommended criteria for groups seeking recognition by the House as Legislative Service Organizations. The commission's recommendations were never considered by the full House, however, because the rule providing for their consideration, H.Res. 766 , was defeated in the House, 160-252, on October 12, 1977.", "A report from the House Select Committee on Ethics from January 3, 1979, found that informal Member groups were exempt from language in House Rule XLV, which prohibited the establishment of unofficial office accounts. On April 4, 1979, the Committee on Standards of Official Conduct issued an advisory opinion that determined that informal Member groups were exempt from House Rule XLIII, clause 11, which prohibited Members of the House from authorizing or allowing a non-House individual, group, or organization from using the words \"Congress of the United States,\" \"House of Representatives,\" \"Official Business,\" or any combination thereof on any letterhead or envelope.", "Given continuing concerns that, without congressional oversight, informal Member groups might be used to circumvent House ethics rules, on July 18, 1979, the Committee on House Administration issued the first regulations governing their activities. It required informal Member groups receiving disbursements from a Member's clerk-hire allowance or allowance for official expenses, office space controlled by the House Office Building Commission, or furniture, supplies, or equipment to", "register with the Clerk of the House as an LSO; provide the Clerk a summary of their finances semi-annually, including, among other information, a listing of their officers and staff, a summary of funds received and disbursed, and an itemization of all receipts and disbursements if $1,000 or more in the aggregate; have its chair, or senior House Member certify the amount of employee salaries, the physical location of each employee, and the regular performance of official duties; and make a monthly certification of the amount of clerk-hire fees disbursed and identify the LSO employees receiving the funds, with the salary amounts issued directly by the Clerk.", "Because LSOs were not subject to House rules concerning how House Members and committees could spend public funds, however, several organizations argued that LSOs could bring the House into public disrepute if they were used to circumvent House spending rules. One outside organization told the Committee on House Administration that ", "what legislators and their staffs were prohibited from doing as individuals, they can now do by acting as a group. Specifically, informal House groups can receive an unlimited amount of funds from special interest lobbying groups; they have not reported the proceeds from fundraising events as campaign contributions; one caucus has received contributions from foreign governments; and caucus related institutes have accepted hundreds of thousands of dollars in non-bid grants from federal agencies. All of these activities, if conducted by a Member acting individually, would clearly be prohibited by House rules or federal law.", "On September 22, 1981, the Committee on House Administration formed the Ad hoc Subcommittee on Legislative Service Organizations. In October 1981, the subcommittee held a hearing and adopted several recommendations regarding the regulation of LSOs. The full committee adopted these recommendations on October 21, 1981, which included the following regulations: ", "LSOs could not receive income or contributions, either in cash or in-kind, from any source other than Congress or its Members from their personal accounts, except that they may take advantage of educational intern, fellowship, or volunteer programs when the programs are primarily of educational benefit to the participating interns, fellows, or volunteers and they may distribute any report, analysis, or other research material prepared by others so long as the identity of the person or organization authoring the work is fully disclosed. Any informal Member group receiving contributions or any form of income from any source other than Congress or its Members (except as noted above) could not be located in space under control of the House and could not receive other support from the House or from Members of the House via their allowances. The Clerk of the House would disburse salary payments to an employee authorized by a Member to work for an LSO, dependent upon receiving a monthly certification by the employing Member and by the chair or ranking Member of the LSO. Each LSO would submit a quarterly report to the Clerk of the House no later than 30 days after the end of the reporting period, which would be publicly available and contain (1) the name, business address, officers, and number of Members of the organization; (2) total receipts for the quarter with a summary of receipts by category (e.g., clerk-hire, or dues); (3) total disbursements for the quarter plus a listing of the recipient, purpose, and amount of all disbursements in excess of $200 in the aggregate during the quarter; (4) a listing of the name, business address, and job title of all persons employed by the organization, their total compensation during the quarter, and the dates of their employment; (5) name and sponsor of all interns, fellows, or volunteers associated with the LSO; (6) a general description of the legislative services or other assistance associated with the LSO provided to its Members during the quarter; (7) a listing of all reports, analyses, or other material provided to Members during the quarter provided by the LSO; and (8) a copy of the sponsorship statement required to be filed with the Committee on House Administration at establishment and May 1 of each even-numbered year thereafter.", "The Committee on House Administration's requirement to submit quarterly financial reports was effective January 1, 1982, and the other regulations were effective January 1, 1983."], "subsections": []}, {"section_title": "Abolishment of LSOs and Creation of CMOs", "paragraphs": ["During the 1980s and into the early 1990s, the number of informal House Member organizations generally continued to increase, although the number of LSOs remained fairly stable. In 1990 (101 st Congress), for example, there were 30 registered LSOs and 63 informal House Member groups. ", "In these years, some Members and political organizations questioned the financial integrity of certain LSOs, arguing that the quarterly financial reports they submitted were incomplete, misleading, or habitually late, and that these groups did not face any sanctions for violating House LSO regulations. At a hearing on May 6, 1993, for example, a member of the Committee on House Administration delivered the following critique of LSO accounting procedures:", "The big picture is the House LSOs with millions of dollars in Federal tax dollars missing and unaccounted for. These are an embarrassment to the Congress. I think it could be a national disgrace. It could rival last year's bank, restaurant, and post office scandals. My independent 10 year review involves surprising and alarming figures. It shows that Members of Congress have funneled more than $34 million in tax funds on LSO operations. Those LSOs in turn report spending of $26.8 million.... $7.7 million are absent. They have simply disappeared. One out of every $5 is missing, unreported, and unaccounted for.", "Some Members and political organizations also objected to certain LSOs' links with external groups and affiliated foundations, arguing that those relationships raised suspicions of impropriety. In addition, media reports suggested that some LSO spending and staffing decisions raised ethical questions concerning possible nepotism and cronyism, and accused some LSOs of using taxpayer funds for expenses that normally were prohibited or required preapproval for Members and committees. Also, some congressional scholars raised concerns about LSOs' decentralizing effect on the congressional policymaking process.", "In response to concerns about lax filing of LSO financial reports, on August 5, 1993, the Committee on House Administration issued new LSO financial accounting requirements, effective January 1, 1994. The new regulations", "placed financial management of LSOs under the House Finance Office (eliminating individual LSO bank accounts outside Congress), including payroll and expense vouchers; required LSOs to file proposed budgets starting in January, including a statement of purpose and a list of all employees and Members; subjected LSO employees to House ethics rules; and required LSOs to file annual, year-end statements disclosing cash-on-hand, expenses, and receipts.", "The change in House leadership and party control following the 1994 elections ushered in further changes for House Member organizations through the elimination of LSOs and the creation of CMOs. At that time, there were 28 LSOs, and 16 of them had House office space, primarily in the Ford House Office Building. On December 6, 1994, incoming House Speaker-elect Newt Gingrich announced that the House Republican Conference had adopted a resolution to prohibit LSOs. House Members could still form groups for similar purposes, but institutional funding would no longer be available. Some congressional scholars have suggested that the elimination of LSOs, in part, helped Speaker Gingrich centralize control in the House. One scholar, for example, argues ", "eliminating LSOs removed one institutional impediment to achieving a more hierarchical congressional structure in which party leaders and conferences assume an enhanced political importance.... The removal of autonomous and entrepreneurial actors such as LSOs was fully consonant with achieving a more centralized and rationalized House.", "Members from the new minority party and Members of established LSOs, including the Democratic Study Group, Congressional Black Caucus, Congressional Hispanic Caucus, and Congressional Caucus for Women's Issues, opposed the dissolution of LSOs. More than 150 members of the Democratic Study Group, which had 18 full-time employees and a $1.6 million budget in 1993, signed a letter in December 1994 to the incoming Speaker, alleging that the prohibition on LSOs was \"an effort to censor opposing views, and to deny the primary source of information to the minority party as we embark upon a furious legislative schedule.\"", "LSOs were eliminated through the adoption of the House Rules for the 104 th Congress on January 4, 1995. The Committee on House Oversight (now the Committee on House Administration) subsequently revoked previous certifications of all LSOs, effective January 11, 1995. LSOs were instructed to stop spending money and vacate their offices by January 31, 1995. They were given until March 30, 1995, to pay all outstanding bills; any balances in LSO accounts after April 3, 1995, were to be returned to the U.S. Treasury to reduce the national debt. ", "On February 8, 1995, the committee issued regulations defining CMOs and governing their activities:", "A CMO is an informal organization of Members who share official resources to jointly carry out activities.... [It has] no separate corporate or legal identity apart from the Members who comprise it.... [It] is not an employing authority, and no staff may be appointed by, or in the name of a CMO. A CMO may not be assigned separate office space.", "CMO organizers were required to provide the CMO's name, a statement of purpose, the names and titles of officers, and the name of any personal staff member (including shared employees) designated to work on the CMO's issues when they registered with the committee, and as changes in information warranted. Members could not use funds from their official allowances to support CMO activities or lend their frank to a CMO. CMOs could not accept funds or resources from outside groups or individuals to support their operations. However, Members could use their own personal funds for that purpose.", "Most (23) of the 28 LSOs reorganized and continued operating either as an informal Member group (8) or as a CMO (15). Four LSOs disbanded, including one that became a private, nonprofit organization and another that transferred its research responsibilities to the House Republican Conference. Another LSO was absorbed by the House Democratic Caucus. ", "Some contemporary political observers believed that the demise of LSOs in 1995 might have signaled the end, or at least a significant reduction, of the number, role, and influence of informal Member organizations in Congress. Instead, the number of CMOs and informal Member groups continued to increase in the late 1990s, suggesting that, despite the limitations imposed on the options available to House Members to support these organizations, they have retained an important role in the congressional policymaking process. Since the 2000s, the number of informal member organizations has continued to grow. "], "subsections": []}]}]}, {"section_title": "Concluding Observations", "paragraphs": ["Informal Member organizations have become an enduring part of modern Congresses, and they have grown in number markedly since the 1970s. House or Senate regulations broadly pertaining to individual Members' activities generally apply to their participation with informal Member organizations, and certain additional House regulations from the Committee on House Administration affect a subset of informal Member organizations known as CMOs. The independence of these groups from more formal institutions within the House and Senate can provide certain advantages, such as facilitating collaboration among Members and providing leadership opportunities outside of one's party or committee assignments. At times, this relative independence has also led to concerns about oversight for informal Member organizations, as well as concerns over the fractionalization of the legislative process and competition with formal leadership and committee functions. Some groups may share legislative or representational interests with the House or Senate at large, certain party leaders, or particular committees; yet Member organizations can also create forums for differing viewpoints, new policy ideas, or more particularized constituent concerns. Informal Member organizations can facilitate deliberation and policy development in Congress by providing opportunities for Members to exchange information and can contribute to public awareness on a variety of topics. "], "subsections": [{"section_title": "Appendix. Initiating a CMO", "paragraphs": ["This appendix covers some considerations that may be of interest to House Members seeking to form a CMO. Current requirements from the Committee on House Administration are noted, where applicable. ", "Define the Objective", "First, clearly state the group's objective(s). What is its purpose?", "Determine the Level of Interest", "The founding Member(s) determines whether there is sufficient interest to warrant organizing the group. A number of methods may be used in making this determination. These include informal discussions with colleagues; communications with constituents (individuals and organizations); and the Member's personal judgment and interest.", "The extent to which an issue or interest is fragmented within the committee system may also be a factor. In an effort to bring the various aspects of an issue under one entity, a number of groups have been organized around issues that were widely dispersed among several committees and subcommittees.", "Consult Prospective \"Core\" Members", "Sometimes, the organizing Member(s) selects a few colleagues with an interest in the issue, consults with them about the group, and enlists their support in organizing it. In many instances, these Members serve as the group's executive officers, coordinators, or sponsors, and are the activists who lay the group's foundation and shape its policy. This informal gathering of \"core\" Members may occur before the group is actually established or shortly thereafter.", "Consider Internal Institutional Concerns", "In an effort to avoid the appearance of rivalry or duplication with party or committee positions and policy, group organizers may wish to consult with party and committee leadership, or inform them of the intent to form the organization. Similar consideration may also be given to any existing groups that handle relevant aspects of the issue(s) or policy. Organizers will likely want to give careful consideration to the group's name in order to avoid confusion with other existing entities (whether formal or informal).", "Identify Likely Membership", "CMO membership is voluntary. Eligibility criteria for membership are determined by the group itself. Membership may be open to all Members who are willing to join, or it may be limited to invitees only. Membership may be open to", "one party only or both parties; the House only or both the House and the Senate; regions that share specific economic concerns; districts or states; Members who share personal characteristics; Members whose constituents share personal or occupational characteristics; or Members who share issue interests.", "Membership may also be based upon committee and subcommittee assignments. Similarly, the membership lists of the committees and subcommittees with primary jurisdiction over the relevant issue(s) can be used to identify prospective CMO members. This procedure can provide an indication of whether, how, and by whom the issue is handled. It may also identify some Members who would either support or oppose the group.", "Seek Necessary Guidance and Information", "The Committee on House Administration has issued specific regulations governing groups that register as CMOs. The regulations appear in the Members' Congressional Handbook, which is available online at http://cha.house.gov/handbooks/members-congressional-handbook#Members-Handbook-Organizations .", "After reviewing these regulations, House Members may wish to contact the Committee on House Administration, the House Commission on Congressional Mailing Standards (also known as the Franking Commission), the Committee on Standards of Official Conduct's Office of Advice and Education, and any other authorities, as appropriate, for guidance.", "Notify or Announce the CMO's Formation", "There are instances where formation of a CMO has been announced on the House floor, in the Congressional Record , by the media (through press releases, news articles, newsletters, television interviews, etc.), and internally, through circulation of \"Dear Colleague\" letters to Members. The \"Dear Colleague\" letter and announcement usually invite Members to join the group and explain its goals, anticipated activities, and reason(s) for being formed. Sometimes, notification of a group's formation also includes language aimed at assuring that the group is not being established to supplant the structure or operations of any committee or party organizations.", "Register with the Committee on House Administration", "As mentioned previously, any informal group of House Members that wishes to use personal staff to work on behalf of an informal Member group, discuss their membership in the group in official communications, or mention their membership on their official House website must register the group with the Committee on House Administration as a CMO. The registration form is available at https://cha.house.gov/member-services/congressional-memberstaff-organizations/cmocso-registration-form#cmo .", "CMO Organizational Structure", "Each CMO determines its own organizational structure. All CMOs are required to have at least one identifiable leader who is designated as the group's sponsor when it is registered with the Committee on House Administration. That Member, or Members if there is more than one sponsor, is listed as the CMO's chair, or co-chairs, on the committee's web page. Beyond that, many CMOs have little or no formal organizational structure. Often, the founding Member or Members serve as the group's officers or coordinators, without formal election or designation. Leadership responsibilities (e.g., coordinating the group's activities, scheduling meetings, distributing information on group issues and actions, etc.) are undertaken by Members who volunteer, and group business usually is handled by staff in an individual Member's office as part of their regular office duties.", "Several groups have a structure that includes any combination of the following elements: officers (e.g., chair, co-chair, vice chair, secretary); an executive committee (alternatively called an executive board, steering committee, or advisory panel); and subunits (usually called task forces or working groups).", "The chair usually is a Member who is highly interested in the issue(s) surrounding the group's organization. More often than not, he or she \"steps forth\" to serve in that role or agrees to accept the position when recruited. Usually, he or she also designates staff to serve as (the) key contact person(s) for the group and to provide assistance on group business.", "Most bipartisan or bicameral CMOs have had more than one chair (i.e., co-chairmen) to emphasize the bipartisan or bicameral aspect of the organization. For example, a CMO might have two co-chairs, one from each party. Or, the CMO might have a chair, who may be a Member of either party in either house, as well as a Senate co-chair and a House co-chair, while prescribing that all three officers cannot be members of the same party.", "Several CMOs have a chair, vice chair, and secretary. A few have opted for an even more stratified structure, one that might include whips and an executive committee. Class groups (i.e., freshmen in a particular Congress) usually have a structure that includes a president, vice president, and secretary.", "Most of the bicameral groups are also bipartisan, and their organizational structure usually reflects these characteristics. Thus, many bicameral CMOs require that the group's leadership be composed of Members from both parties and both houses. Current CMO regulations provide that \"Members of both the House and Senate may participate in CMO, but at least one of the Officers of the CMO must be a Member of the House.\"", "Executive Committee/Steering Committee/Advisory Board", "For most CMOs, the officers or executive committee administer the group's activities and set its agenda. Often, the executive committee also serves as the CMO's source of expertise, and it advises the group on certain issues. An executive committee serving in this advisory capacity sometimes comprises Members who serve on the committees and subcommittees with primary jurisdiction over the issue(s) of concern to the group. Other bases for advisory or executive committee membership might be the Member's state or region, common characteristic(s) of Members' constituents or congressional districts, or shared characteristics among the Members themselves, including their \"class\" group, knowledge, or interest. Some CMOs have separated the administrative and advisory roles of the executive committee by creating an advisory committee, apart from the executive committee.", "How Are the Chairs and Other Officers Selected?", "Like other internal operational matters, the manner by which the CMO's chair(s) is selected is left to the discretion of each CMO. A CMO may use an informal method of selection, whereby Members volunteer to serve as chair. If more than one Member expresses such interest, a co-chair arrangement may be used. Or, the interested Members themselves may work out an agreement as to who will serve, perhaps so that some Members serve during the first session and others during the second session. Alternatively, a group may choose a more formal process whereby interested Members must be nominated and then stand for election by the total membership or the executive committee.", "In many instances, the initial chair(s) is the CMO's founder. Often, he or she continues to serve until no longer a Member or until he or she relinquishes the position. However, in some instances, tenure as CMO chair is limited, either by custom or by rule (in the CMO's bylaws).", "Staff", "Currently, CMOs cannot employ staff. It is the individual Members and not the CMO who are the employing entities. Thus, CMO business is handled by staff of individual Members (often the group's chair(s)) as part of their regular duties. Frequently, the staff member works in an area related to the group's issue(s). ", "Beginning in the 114 th Congress, the House amended its rules to allow certain CMOs (Eligible Congressional Member Organizations, or ECMOs) to enter into agreements with individual Members to contribute employment slots and a portion of the Members' Representational Allowance to a dedicated account of the ECMO. Members interested in registering a CMO as an ECMO can consult with the Committee on House Administration regarding the eligibility requirements and registration process."], "subsections": []}]}]}}
{"id": "R42072", "title": "Legislative Branch Agency Appointments: History, Processes, and Recent Actions", "released_date": "2019-01-28T00:00:00", "summary": ["The leaders of the legislative branch agencies and entities\u2014the Government Accountability Office (GAO), the Library of Congress (LOC), the Congressional Research Service (CRS), the Government Publishing Office (GPO, formerly Government Printing Office), the Office of the Architect of the Capitol (AOC), the U.S. Capitol Police (USCP), the Congressional Budget Office (CBO), and the Office of Compliance\u2014are appointed in a variety of manners.", "Four agencies are led by a person appointed by the President, with the advice and consent of the Senate; two are appointed by Congress; one is appointed by the Librarian of Congress; and one is appointed by a board of directors.", "Congress has periodically examined the procedures used to appoint these officers with the aim of protecting the prerogatives of, and ensuring accountability to, Congress within the framework of the advice and consent appointment process established in Article II, Section 2 of the Constitution.", "This report contains information on the legislative branch agency heads' appointment processes, length of tenures (if terms are set), reappointment or removal provisions (if any), salaries and benefits, and most recent appointments.", "This report also briefly addresses legislation considered, but not enacted, in the 115th Congress to change the appointment process for the Register of Copyrights."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The leaders of the eight legislative branch agencies and entities\u2014the Government Accountability Office, the Library of Congress, the Government Publishing Office (formerly Government Printing Office), the Office of the Architect of the Capitol, the U.S. Capitol Police, the Congressional Budget Office, the Congressional Research Service, and the Office of Compliance\u2014are appointed in a variety of manners. ", "The first four agencies are led by a person appointed by the President, with the advice and consent of the Senate. The next two are appointed by Congress, the next by the Librarian of Congress, and the last by a board of directors. ", "Congress has periodically examined the procedures used to appoint legislative branch officers with the aim of protecting the prerogatives of, and ensuring accountability to, Congress within the framework of the advice and consent appointment process established in Article II, Section 2 of the Constitution. Legislation to alter the appointment process for legislative branch agencies and entities has periodically been introduced for many years. Questions remain about various reform proposals, including the ability of Congress to remove the President from the appointment process for some of these positions. These may depend upon the implication or interpretation of the Appointments Clause of the Constitution, the definition of an \"officer of the United States,\" the specific office or agency in question, and whether or not a change in appointing authority would require any revision in the powers and duties of legislative branch agency leaders. Some previous reforms and proposals have also attempted to find a role for the House of Representatives, which does not play a formal role in the confirmation of presidential nominees, in the search for legislative branch officials. ", "The report also briefly addresses legislation considered, but not enacted, in the 115 th Congress to change the appointment process for the Register of Copyrights."], "subsections": []}, {"section_title": "Overview by Legislative Branch Agency or Entity", "paragraphs": ["The following sections contain information on the legislative branch agency heads' appointment processes, length of tenures (if terms are set), reappointment or removal provisions (if any), salaries and benefi ts, and most recent appointments. Information is provided on each agency and summarized in Table 1 ."], "subsections": [{"section_title": "Architect of the Capitol", "paragraphs": ["Pursuant to the Legislative Branch Appropriations Act, 1990, the Architect is \"appointed by the President by and with the advice and consent of the Senate for a term of 10 years.\" The act also established a congressional commission responsible for recommending individuals to the President for the position of Architect of the Capitol. The commission, originally consisting of the Speaker of the House of Representatives, the President pro tempore of the Senate, the majority and minority leaders of the House of Representatives and the Senate, and the chairs and the ranking minority Members of the Committee on House Administration and the Senate Committee on Rules and Administration, was expanded in 1995 to include the chairs and ranking minority Members of the House and Senate Appropriations Committees. ", "Prior to 1989, the Architect was selected by the President for an unlimited term without any formal involvement of Congress. The FY1990 act, however, followed numerous attempts dating at least to the 1950s to alter the appointment procedure to provide a role for Congress. The proposals included requiring the advice and consent of the Senate, establishing a commission to recommend names to the President, and removing the appointment process from the President and instead making the Architect appointed solely by Congress. ", "In the 111 th Congress, two measures ( H.R. 2185 and H.R. 2843 ) were introduced to remove the President from the Architect appointment process and shift it to congressional leaders and chairs and ranking Members of specific congressional committees. Under both measures, the Architect would still serve a 10-year term. Under H.R. 2843 , as reported, the Architect would have been appointed jointly by the same 14-member panel, equally divided between the House and Senate, that currently is responsible for recommending candidates to the President. This bill was reported by the Committee on House Administration ( H.Rept. 111-372 ) on December 10, 2009. The Committee on Transportation and Infrastructure was discharged from further consideration the same day. The House agreed to the bill, as amended to include an 18-member panel, also equally divided between the House and Senate, by voice vote on February 3, 2010. H.R. 2843 was received in the Senate and referred to the Committee on Rules and Administration, although no further action was taken.", "Under the earlier bill ( H.R. 2185 , 111 th Congress), which was introduced on April 30, 2009, the Architect would have been appointed jointly by the Speaker of the House, the Senate majority leader, the minority leaders in the House and Senate, the chairs and ranking minority Members of the House and Senate Committees on Appropriations, and the chairs and ranking minority Members of the Committee on House Administration and Senate Committee on Rules and Administration. This bill followed similar legislation ( H.R. 6656 , 110 th Congress), with the same 12-member appointing panel, introduced on July 30, 2008. Both bills were referred to two committees, but no further action was taken. ", "The Architect of the Capitol is compensated at an \"annual rate which is equal to the lesser of the annual salary for the Sergeant at Arms of the House of Representatives or the annual salary for the Sergeant at Arms and Doorkeeper of the Senate.\" "], "subsections": [{"section_title": "Most Recent Appointment", "paragraphs": ["Stephen T. Ayers was nominated by President Obama for a 10-year term on February 24, 2010. He was the second Architect nominated pursuant to the new commission procedure. The nomination was referred to the Senate Committee on Rules and Administration. The committee held a hearing on April 15, 2010, and Ayers was confirmed by unanimous consent in the Senate on May 12, 2010. Ayers was previously the Deputy Architect/Chief Operating Officer and had served as Acting Architect of the Capitol following the February 4, 2007, retirement of former Architect of the Capitol Alan Hantman. ", "Upon the retirement of Ayers on November 23, 2018, Christine Merdon, the Deputy Architect of the Capitol/Chief Operating Officer, became the Acting Architect of the Capitol."], "subsections": []}]}, {"section_title": "Government Accountability Office", "paragraphs": ["Pursuant to 31 U.S.C. 703(a)(1), the Comptroller General shall be \"appointed by the President, by and with the advice and consent of the Senate.\" This procedure dates to the establishment of the agency in 1921. Additionally, a commission procedure established in 1980 recommends individuals to the President in the event of a vacancy. The commission consists of the Speaker of the House, the President pro tempore of the Senate, the majority and minority leaders of the House and Senate, the chairs and ranking minority Members of the Senate Committee on Homeland Security and Governmental Affairs and the House Committee on Oversight and Government Reform. The commission is to recommend at least three individuals for this position to the President, although the President may request additional names. ", "The Comptroller General is appointed to a 15-year term and may not be reappointed. The Comptroller General may be removed by \"(A) impeachment; or (B) joint resolution of Congress, after notice and an opportunity for a hearing\" and only by reason of permanent disability; inefficiency; neglect of duty; malfeasance; or a felony or conduct involving moral turpitude.", "The salary of the Comptroller General is equal to Level II of the Executive Schedule. Additionally, a law enacted in 1953 established a separate retirement system for the Comptroller General. "], "subsections": [{"section_title": "Most Recent Appointment", "paragraphs": ["Gene L. Dodaro, then-Chief Operating Officer at GAO, became the acting Comptroller General on March 13, 2008, upon the resignation of David M. Walker, who had previously been confirmed on October 21, 1998. The White House announced Dodaro's nomination to a 15-year term as Comptroller General on September 22, 2010. The Senate Committee on Homeland Security and Governmental Affairs held a hearing on the nomination on November 18, 2010, and Dodaro was confirmed by the Senate by unanimous consent on December 22, 2010."], "subsections": []}]}, {"section_title": "Government Publishing Office", "paragraphs": ["The Government Publishing Office (formerly Government Printing Office) was established in 1861. The U.S. Code , at 44 U.S.C. 301, states that the President \"shall nominate and, by and with the advice and consent of the Senate, appoint a suitable person to take charge of and manage the Government Publishing Office. The title shall be Director of the Government Publishing Office.\" ", "The current appointment language was enacted in 2014, although the use of the advice and consent procedure for this position can be traced back much further. There is no set term of office for the Director. The Director's pay is equivalent to Level II of the Executive Schedule."], "subsections": [{"section_title": "Most Recent Appointment", "paragraphs": ["Robert C. Tapella was nominated to be Director of the Government Publishing on June 18, 2018. The nomination was referred to the Committee on Rules and Administration. No further action was taken prior to the end of the 115 th Congress, and the nomination was returned to the President pursuant to Senate Rule XXXI. President Trump renominated Tapella on January 16, 2019. The nomination was referred to the Committee on Rules and Administration. Previously, Tapella served in this role from October 4, 2007 (confirmed by the Senate by voice vote) until December 28, 2010.", "GPO's Chief Administrative Officer, Herbert H. Jackson Jr., has served as Acting Deputy Director since July 1, 2018, following the retirement of Andrew M. Sherman. Sherman, formerly GPO's Chief of Staff, had been serving as Acting Deputy Director since the retirement of Acting GPO Director Jim Bradley on March 6, 2018. Bradley, previously the GPO Deputy Director, had assumed this role following the departure of the previous Director, Davita Vance-Cooks, in November 2017. Vance-Cooks had been nominated by President Obama on May 9, 2013, to be Public Printer, as the head of the GPO was then known, and confirmed by the Senate by voice vote on August 1, 2013."], "subsections": []}]}, {"section_title": "Library of Congress", "paragraphs": ["The Library of Congress was established in 1800. The U.S. Code , at 2 U.S.C. 136, states: \"The Librarian of Congress shall make rules and regulations for the government of the Library.\"", "Until an act of February 19, 1897, which made the appointment subject to the advice and consent of the Senate, the Librarian was appointed solely by the President. ", "Recent changes to the appointment statute, at 2 U.S.C. 136-1, amended the tenure of the Librarian. The Librarian of Congress Succession Modernization Act of 2015, S. 2162 , was introduced in the Senate on October 7, 2015, and agreed to the same day by unanimous consent. It was agreed to in the House without objection on October 20 and signed by President Obama on November 5, 2015 ( P.L. 114-86 ). The act establishes a term limit of 10 years, with the possibility of reappointment by the President, by and with the advice and consent of the Senate. Previously, there was no set term of office for the Librarian.", "The U.S. Code , at 2 U.S.C. 136a-2, states: \"the Librarian of Congress shall be compensated at an annual rate of pay which is equal to the annual rate of basic pay payable for positions at Level II of the Executive Schedule under section 5313 of title 5.\" "], "subsections": [{"section_title": "Most Recent Appointment", "paragraphs": ["Carla D. Hayden was nominated to a 10-year term as Librarian of Congress by President Obama on February 24, 2016. The Senate Committee on Rules and Administration held a hearing on the nomination on April 20, 2016, and ordered the nomination favorably reported on June 9. Hayden was confirmed as the 14 th Librarian of Congress on July 13, 2016 (74-18, record vote number 128).", "Hayden succeeded James H. Billington who retired effective September 30, 2015. Billington had been confirmed as Librarian of Congress by the Senate on July 24, 1987. "], "subsections": []}]}, {"section_title": "Congressional Research Service", "paragraphs": ["The Legislative Reorganization Act of 1970 provides that the Librarian of Congress appoint the Director of the Congressional Research Service (CRS) \"after consultation with the Joint Committee on the Library.\" The basic rate of pay for the director is equivalent to Level III of the Executive Schedule. There is no set term of office."], "subsections": [{"section_title": "Most Recent Appointment", "paragraphs": ["Mary B. Mazanec, who served as Acting Director of CRS following the retirement of former Director Daniel P. Mulhollan on April 2, 2011, was appointed Director by the Librarian of Congress on December 5, 2011."], "subsections": []}]}, {"section_title": "U.S. Capitol Police", "paragraphs": ["2 U.S.C. 1901 states: \"There shall be a captain of the Capitol police and such other members with such rates of compensation, respectively, as may be appropriated for by Congress from year to year. The Capitol Police shall be headed by a Chief who shall be appointed by the Capitol Police Board and shall serve at the pleasure of the Board.\" The last sentence was inserted in 1979, struck by the FY2003 Consolidated Appropriations Resolution, and restored in 2010 by the U.S. Capitol Police Administrative Technical Corrections Act.", "Pursuant to the FY2003 act, the chief of the Capitol Police receives compensation \"equal to $1,000 less than the lower of the annual rate of pay in effect for the Sergeant-at-Arms of the House of Representatives or the annual rate of pay in effect for the Sergeant-at-Arms and Doorkeeper of the Senate.\" Pay for the chief has been adjusted multiple times in recent years: it formerly was (1) equal to Level IV of the Executive Schedule under 1979 legislation, (2) linked to the Senior Executive Service under an act from 2000, and (3) equal to $2,500 less than these officers pursuant to a 2002 law. "], "subsections": [{"section_title": "Most Recent Appointment", "paragraphs": ["On February 24, 2016, the Capitol Police Board announced the appointment of Matthew R. Verderosa as the new Chief of the U.S. Capitol Police, effective March 20, 2016. Previously, Chief Kim Dine was sworn in on December 17, 2012. "], "subsections": []}]}, {"section_title": "Congressional Budget Office", "paragraphs": ["The director of the Congressional Budget Office (CBO) has been appointed wholly by Congress since the creation of the post with the passage of the Congressional Budget Act in 1974. The act stipulates that the director is appointed for a four-year term \"by the Speaker of the House of Representatives and the President pro tempore of the Senate after considering recommendations received from the Committees on the Budget of the House and the Senate, without regard to political affiliation and solely on the basis of his fitness to perform his duties.\" The director may be reappointed, and either chamber can remove the director by simple resolution. Additionally, a director appointed \"to fill a vacancy prior to the expiration of a term shall serve only for the unexpired portion of that term\" and an \"individual serving as Director at the expiration of a term may continue to serve until his successor is appointed.\"", "The director of CBO receives compensation at an annual rate that is equal to the lower of the highest annual rate of compensation of any officer of the House or any officer of the Senate."], "subsections": [{"section_title": "Most Recent Appointment", "paragraphs": ["Keith Hall, the current director of CBO, began his service on April 1, 2015. He follows Douglas W. Elmendorf, who began his term on January 22, 2009. "], "subsections": []}]}, {"section_title": "Office of Compliance", "paragraphs": ["2 U.S.C. 1382 states that the chair of the board of directors of the Office of Compliance, \"subject to the approval of the Board, shall appoint and may remove an Executive Director. Selection and appointment of the Executive Director shall be without regard to political affiliation and solely on the basis of fitness to perform the duties of the Office.\" The executive director must be \"an individual with training or expertise in the application of laws referred to in section 1302(a)\" of Title II of the U.S. Code .", "The FY2008 Consolidated Appropriations Act altered the compensation for the Office's statutorily established positions, including that of the executive director. The chair of the board may fix the annual rate of pay for the executive director, although the level may not exceed the lesser of House or Senate officers. Prior to the FY2008 act, the maximum pay for this position had been Level V of the Executive Schedule.", "Separate legislation, P.L. 110-164 , amended the Congressional Accountability Act and altered eligibility and tenure restrictions for the executive director by allowing current or former Office of Compliance employees to serve in this capacity. The legislation also permits the executive director, deputy executive directors, and general counsel, who formerly were limited to one five-year term in their positions, to serve up to two terms."], "subsections": [{"section_title": "Most Recent Appointment", "paragraphs": ["Susan Tsui Grundmann was appointed to a five-year term as executive director commencing January 2017. She succeeded Barbara J. Sapin, who was appointed in 2013. "], "subsections": []}]}]}, {"section_title": "Proposals Related to the Register of Copyrights in the 115th Congress", "paragraphs": ["During the 115 th Congress, the House and Senate considered legislation that would alter the appointment of one position within one of these agencies\u2014the Register of Copyrights. Under current law pertaining to the copyright office (17 U.S.C. 701): ", "All administrative functions and duties ... are the responsibility of the Register of Copyrights as director of the Copyright Office of the Library of Congress. The Register of Copyrights, together with the subordinate officers and employees of the Copyright Office, shall be appointed by the Librarian of Congress, and shall act under the Librarian's general direction and supervision. ", "H.R. 1695 and S. 1010 , the Register of Copyrights Selection and Accountability Act, would have made the Register of Copyrights a presidential appointment, subject to the advice and consent of the Senate. The legislation would have established a seven-person panel to recommend at least three candidates for this position to the President. The panel would consist of the Speaker of the House, President pro tempore of the Senate, majority and minority leaders in the House and Senate, and Librarian of Congress. The bills would have established a 10-year term of office for the Register.", "H.R. 1695 was reported by the House Judiciary Committee on April 20, 2017 ( H.R. 1695 , H.Rept. 115-91 ), and passed in the House, as amended, on April 26 (378\u201348, Roll no. 227). The Senate Committee on Rules and Administration held a hearing on September 26, 2018. A Senate committee markup of S. 1010 initially scheduled for December 12, 2018, was postponed. No further action was taken during the 115 th Congress.", "The office is currently led by Acting Register of Copyrights Karyn A. Temple, who was named to the position by Librarian of Congress Carla Hayden on October 21, 2016."], "subsections": []}]}}
{"id": "R45691", "title": "Bosnia and Herzegovina: Background and U.S. Policy", "released_date": "2019-04-15T00:00:00", "summary": ["Bosnia and Herzegovina (hereafter, \"Bosnia\") drew heavily on U.S. support after gaining independence from Yugoslavia in 1992. The United States helped end the Bosnian war (1992-1995), one of the most lethal conflicts in Europe since the Second World War, by leading NATO airstrikes against Bosnian Serb forces, brokering the Dayton Peace Agreement in 1995, and deploying 20,000 U.S. troops. Some Members of Congress became involved in policy debates over these measures, and Congress monitored and at times challenged the Bush and Clinton Administrations' response through numerous hearings, resolutions, and legislative proposals. Since 1995, the United States has been a major source of aid to Bosnia and firmly supports its territorial integrity. The United States also supports Bosnia's aspirations for NATO and European Union (EU) membership.", "Today, Bosnia faces serious challenges. Nearly 25 years after the Dayton Agreement, Bosnia continues to use part of the Agreement as its constitution, which divides the country into two ethnoterritorial entities. Critics charge that Bosnia's political system is too decentralized to enact the reforms required for NATO and EU membership. They also contend that the ethnic power-sharing arrangements and veto points embedded in numerous government bodies are sources of gridlock. Domestic and international courts have ruled against several aspects of Bosnia's constitution, yet the Bosnian government thus far has failed to implement these rulings.", "Since Bosnia's independence, its politics has been dominated by ethnic parties representing the country's three main groups: Bosniaks (Slavic Muslims), Croats, and Serbs. These parties have prospered under a system that critics charge lacks transparency and accountability. Critics also maintain that ethnic party leaders use divisive nationalist rhetoric to distract from serious issues affecting the country as a whole, including poverty, unemployment, and stalled political reforms. The Bosnian population exhibits low trust in political parties and the government, and disaffection toward the country's elite.", "U.S. and EU officials brokered several ultimately unsuccessful rounds of constitutional reform negotiations, and continue to call on Bosnia's leaders to implement reforms to make governance more efficient and effective, dismantle patronage networks, and bring Bosnia closer to EU and NATO membership. However, there is little consensus among the country's leaders on how the country should be reformed. Bosnian Serb leaders from the Serb-majority entity (Republika Srpska) have called for greater autonomy and even secession from Bosnia. Some Bosnian Croat leaders have called for partitioning Bosnia's other entity, the Federation of Bosnia and Herzegovina, to create a separate Croat-majority entity. Bosniak leaders, by contrast, generally prefer a more centralized state. Many analysts caution that any move to partition the country could lead to renewed violence, while greater decentralization could make Bosnia's government less functional. U.S. policy has long been oriented toward preserving Bosnia's statehood. Bosnia's 2018 general elections largely returned to power the same entrenched ethnic parties. Of particular concern is the election of Bosnian Serb leader Milorad Dodik to Bosnia's collective presidency. Dodik, a sharp critic of the United States and NATO, has periodically called for a referendum on Republika Srpska's secession. He is under U.S. sanctions for obstructing the Dayton Agreement.", "In addition to these internal challenges, U.S. and EU officials have expressed concern over external influence in the region. Russia reportedly relies on soft power, energy leverage, and \"spoiler\" tactics to influence Bosnia, particularly in the Serb-majority entity. Turkish soft power draws on Bosnia's Ottoman-era heritage and Turkey's shared religious tradition with Bosniaks. China is a more recent presence in the region, but its heavy investments and lending have prompted concern on both sides of the Atlantic. Policymakers have also expressed concern at the challenges posed by the return of Bosnians who fought with the Islamic State and Nusra Front in Syria and Iraq.", "Many observers contend that the United States remains a stakeholder in Bosnia's future because of its central role in resolving the conflict and shaping the postwar Bosnian state. Given the history of U.S. involvement in Bosnia, Bosnia's importance to regional stability in the Balkans, and concerns over Russian and Chinese influence in Bosnia, Members of Congress may be interested in monitoring how the country navigates its internal and external challenges. Congress may also consider future U.S. aid levels to Bosnia and the degree to which such assistance supports the long-standing U.S. policy objectives for Bosnia of territorial integrity, NATO and EU integration, energy security, and resilience against malign influence."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "The United States and Bosnia", "paragraphs": ["Many Members of Congress became actively engaged in foreign policy debates over U.S. intervention in the 1992-1995 war in Bosnia and Herzegovina (hereafter, \"Bosnia\"). Congress monitored and at times challenged the Bush and Clinton Administrations' response to the conflict through numerous hearings, resolutions, and legislative initiatives. Many observers contend that the United States is a stakeholder in Bosnia's future because of the strong impact of U.S. intervention on the postwar Bosnian state.", "Nearly 25 years after warring parties in Bosnia reached the Dayton Agreement (see below), Bosnia faces numerous internal and external challenges, and the country retains geopolitical importance to U.S. interests in the Western Balkans. As Congress assesses ongoing and emerging security issues in the region, including resilience against malign external influence, renewed conflict, and radicalization, Bosnia's internal politics and its role in Balkan stability may merit further examination. "], "subsections": []}, {"section_title": "Brief History and Population", "paragraphs": ["Bosnia has existed in various forms throughout its history: a medieval kingdom, territory held by two major empires, a federal unit, and, since 1992, an independent state. Bosnia's present international borders are largely consistent with its administrative boundaries under later periods of Ottoman Turkish rule. After World War I, Bosnia became part of the newly created Kingdom of Serbs, Croats, and Slovenes. It was one of the six constituent republics of the Socialist Federal Republic of Yugoslavia from 1945 until 1992. ", "Bosnia's constitution stems from the U.S.-brokered Dayton Peace Agreement that ended the country's 1992-1995 war. It recognizes three \"constituent peoples\": Bosniaks, Croats, and Serbs. All three groups are Slavic. Religious tradition is considered a marker of difference among the three ethnic identities: Bosniaks are predominantly Muslim, Serbs are largely Orthodox Christian, and Croats are mostly Catholic. Although Bosnian, Croatian, and Serbian are recognized in Bosnia as distinct official languages, they are mutually intelligible. Bosniaks comprise approximately 50.1% of the population, Bosnian Serbs 30.8%, and Bosnian Croats 15.4%. In this report, Bosnian is used as a non-ethnic term for a person or institution from Bosnia. A Bosnian Serb is an ethnic Serb from Bosnia and a Bosnian Croat is an ethnic Croat from Bosnia. Bosniak refers to Slavic Muslims.", "Bosnia's religious and cultural diversity is one of its distinctive characteristics. Islam was introduced to part of Bosnia's population during the Ottoman period, although there were also large Catholic, Orthodox Christian, and Jewish communities. Bosnia was the most heterogeneous Yugoslav republic and the only one where no ethnic group formed an absolute majority. ", "During the 1990s, some popular accounts of Bosnia (and the former Yugoslavia) depicted its ethnic relations as \"ancient hatreds,\" implying that the country's ethnic groups cannot peacefully coexist and that the 1992-1995 war was unavoidable. However, many experts on the region reject this thesis. Although Bosnia has experienced episodes of communal violence and bloodshed, most recently during World War II and the 1992-1995 war, its heterogeneous population also has lived in mixed communities for periods of peace. Many experts contend that ethnic conflict often was stoked by domestic leaders who manipulated historical memory and grievances to further their own agendas, or by external powers seeking to rule Bosnia or annex its territory."], "subsections": []}, {"section_title": "The Bosnian War (1992-1995)", "paragraphs": ["In the 1980s, Yugoslavia's escalating political and economic crises fueled nationalist movements. Nationalist leaders in Serbia and Croatia appealed to Bosnian Serbs and Croats as ethnic \"kin.\" The party that ruled Croatia for most of the 1990s, the Croatian Democratic Union (HDZ), established a sister party with the same name to mobilize Bosnian Croats and compete in Bosnia's elections. This gave Croatia an avenue of influence in Bosnian politics. Serbia, led by strongman Slobodan Milo\u0161evi\u0107, likewise had influence over Bosnian Serb leaders. ", "In Bosnia's November 1990 elections\u2014the first competitive elections in decades\u2014voters cast aside the ruling League of Communists party and elected ethnic parties that largely continue to dominate today. Bosnian voters backed independence in a 1992 referendum, following in the footsteps of Slovenia, Croatia, and Macedonia. Bosnian Serbs, who did not want to separate from Yugoslavia, boycotted the referendum. Bosnian Serb forces seized more than two-thirds of Bosnia's territory, and a three-year conflict followed that pitted Serb, Croat, and Bosniak forces against one another. Bosnian Serb leaders declared a \"Serb Republic\" ( Republika Srpska) in March 1992, while Bosnian Croat leaders proclaimed the Croat Community of Herceg-Bosnia in July. Some Bosnian Croat and Bosnian Serb leaders advocated unification with Croatia and Serbia, respectively, where government factions\u2014including their strongman leaders\u2014likewise wanted to carve a Greater Croatia and Greater Serbia out of Bosnia's territory. Bosniak leaders opposed dismemberment of the state.", "Bosnia's war was one of the most lethal conflicts in Europe since World War II. Bosnian Serb forces besieged Sarajevo for 44 months. More than 10,000 people, mostly civilians, died due to shelling, sniping, and blockade-related deprivation. Paramilitary factions from neighboring Croatia and Serbia\u2014some of which reportedly had ties to the Croatian and Serbian government\u2014fought alongside Bosnian Croats and Serbs. The Serb-dominated Yugoslav National Army also aided Bosnian Serb forces, giving them a military advantage. In many areas, combatants from the three groups killed or expelled members of other ethnic groups to \"purify\" territory that they wanted to claim as their own. This \"ethnic cleansing\" changed Bosnia's demographic landscape.", "An estimated 100,000 or more Bosnians were killed in the conflict, and roughly half of its population displaced. In addition, an estimated 20,000 or more women and girls were victims of sexual violence. Hundreds of Bosnians have been prosecuted for war crimes at the International Criminal Tribunal for the former Yugoslavia (ICTY) and in Bosnian courts. In 2016, the ICTY convicted wartime Bosnian Serb leader Radovan Karad\u017ei\u0107 of genocide and war crimes. In 2019, the tribunal rejected his appeal and increased his sentence from 40 years to life. Citizens of Croatia and Serbia have also been indicted for crimes committed in the Bosnian war. ", "Highly publicized incidents in 1994 and 1995 underscored the war's human toll. Bosnian Serb forces bombarded a Sarajevo market in 1994 and 1995, resulting in over 100 civilian deaths. In July 1995, Serb forces commanded by Ratko Mladi\u0107 seized and executed more than 8,000 Bosniak men and boys in a U.N.-designated safe area around the city of Srebrenica, an incident subsequently seen by some as a consequence of the international community's muddled, ineffectual response to the conflict. The International Court of Justice and ICTY subsequently ruled that the Srebrenica massacres constituted an act of genocide. Mladi\u0107 was convicted of genocide and other crimes in 2017. ", "These incidents increased pressure on U.S. policymakers to take a stronger role in resolving a conflict that had largely been left to the EU and the United Nations. Under U.S. command, NATO intervened in August and September 1995 with air strikes against Bosnian Serb targets, while allied Bosniak and Croat forces launched a simultaneous offensive in western Bosnia. ", "The United States played a key role in brokering several agreements. The 1994 Washington Agreement ended the \"war within a war\" between Bosniaks and Croats. In November 1995, leaders from Croatia, Bosnia, and Serbia met at the Wright-Patterson Air Force base in Dayton, OH, to negotiate a peace agreement. U.S. diplomat Richard Holbrooke played a crucial role in brokering the General Framework Agreement for Peace in Bosnia and Herzegovina, more commonly known as the Dayton Peace Agreement. "], "subsections": []}]}, {"section_title": "Domestic Issues", "paragraphs": ["Bosnia's complex political system is a product of the Dayton Agreement; one of its annexes serves as Bosnia's constitution (Annex 4). Its provisions partly reflect the situation on the ground in 1995, including the subdivision of Bosnia into two ethnoterritorial entities ( Figure 1 ): Republika Srpska (\"RS\"), which Bosnian Serb leaders had proclaimed in 1992, and the Federation of Bosnia and Herzegovina (\"FBiH,\" predominantly populated by Bosniaks and Croats), which was created by the 1994 Washington Agreement. Entity borders were largely drawn to form ethnic majorities, even though they also reflected territorial seizure and ethnic cleansing. Many Bosniaks view the division of Bosnia into these roughly equal entities as awarding the spoils of war to Bosnian Serbs, whom they regard as the aggressors. Many Bosnian Serbs, however, view the Serb-majority entity as a protection against marginalization. ", "The designation of Bosniaks, Croats, and Serbs as Bosnia's three \"constituent peoples\" is a cornerstone of the Dayton system. Numerous government bodies have ethnic quotas requiring equal representation of the three groups. In these power-sharing institutions, delegates from each constituent group may veto measures that go against vital ethnic interests. While these arrangements make Bosnia's political system prone to gridlock, Dayton's negotiators viewed them as necessary to prevent any group from feeling marginalized in a context of low trust."], "subsections": [{"section_title": "Government Structure", "paragraphs": ["Bosnia is a parliamentary republic with a high degree of decentralization. Its complex, tiered structure includes a central (\"state-level\") government, the two entities, the autonomous Br\u010dko district, and cantonal and municipal governments."], "subsections": [{"section_title": "State-level Government", "paragraphs": ["The central (\"state-level\") government covers the entirety of Bosnia. A three-member presidency is the head of state, and includes one Serb member who is elected by RS voters, and one Bosniak and one Croat member elected by FBiH voters. The Council of Ministers, led by a Chairperson, is roughly equivalent to a cabinet government and prime minister in other parliamentary systems. The Parliamentary Assembly is a state-level legislature with two chambers: a directly elected House of Representatives (42 members) and an indirectly elected House of Peoples (5 Serbs, 5 Croats, and 5 Bosniaks). The state-level government is considered to be weak, despite some expansion of its functions in the 2000s. Its major responsibilities include foreign relations; trade, customs, and monetary policy; migration and asylum policy; defense; and intelligence."], "subsections": []}, {"section_title": "The Two Entities", "paragraphs": ["Bosnia is further subdivided into two ethnoterritorial entities: Republika Srpska (RS), where Serbs are the largest ethnic group (82%), and the Federation entity (FBiH), where Bosniaks (70%) and Croats (22%) are the largest groups. The two entities have broader policy jurisdiction than the state-level government. Governing functions that are not assigned to the state-level government fall to the entities. These include civilian policing, economic policy, fiscal policy, energy policy, and health and social policy, as well as other issues. Each entity has its own constitution, as well as a president, vice presidents, legislature, and cabinet government with a prime minister. Each entity may establish \"special parallel relationships\" with neighboring states (i.e., Croatia and Serbia). Numerous entity bodies also incorporate ethnic quotas."], "subsections": []}, {"section_title": "Br\u010dko District", "paragraphs": ["Br\u010dko district, a border region in northeastern Bosnia, was initially administered by the international community to allay concerns about RS secession. Br\u010dko's location interrupts RS's contiguity, and both entities initially claimed it. Br\u010dko was later awarded to both entities, but remains a self-governing district whose population is a mix of all three constituent peoples. Some analysts believe it has been relatively more successful than the entities in passing reforms and reintegrating its divided population (e.g., ethnically mixed schools with a common curriculum). "], "subsections": []}, {"section_title": "Cantonal and Municipal Government", "paragraphs": ["FBiH entity is further divided into ten cantons, many of which were drawn to form ethnic Bosniak or Croat majorities. The cantons have jurisdiction in many policy areas, including policing, housing, culture, and education. They also have their own constitutions\u2014based on the FBiH constitution\u2014as well as legislatures and cabinet-style governments. FBiH and RS are further divided into 79 and 64 municipalities, respectively."], "subsections": []}, {"section_title": "International Oversight", "paragraphs": ["The Dayton Agreement established a strong oversight role for the international community. The Office of the High Representative (OHR) was created to monitor the implementation of civilian aspects of Dayton. The High Representative is supported by the Peace Implementation Council (PIC), a group of 55 countries and agencies. A 1997 PIC conference empowered the High Representative to impose binding decisions and sanction politicians who obstruct Dayton. Until the mid-2000s, the High Representative used these powers to remove officials deemed to be obstructive to peace and to promote what are considered among the most constructive reforms since Dayton, including merging the entities' armed forces and intelligence services and putting them under new state-level ministries. ", "However, the High Representative's proactive role has since decreased. This is partly due to criticism that the OHR lacks democratic legitimacy and accountability. Bosnian Serb politicians have claimed that the OHR's interventions support Bosniak leaders' preference for a more centralized state. At the same time, some U.S. and EU policymakers believed that the attraction of EU membership could incentivize reforms in place of the OHR's more top-down approach. ", "The international community also plays an ongoing security role. NATO led the Implementation Force (IFOR) and the smaller Stabilization Force (SFOR) that monitored security aspects of the Dayton Peace Agreement. The initial deployment of NATO ground forces to Bosnia numbered nearly 60,000, of which the largest share (approximately one-third) was from the United States. The number of troops subsequently decreased. In 2004, NATO's peacekeeping role was transferred to the EU with the understanding that NATO would assist if necessary. The size of the EU operation (EUFOR Althea) decreased from 7,000 troops in 2004 to roughly 600 troops today. "], "subsections": []}]}]}, {"section_title": "Political Challenges", "paragraphs": ["Many analysts contend that the Dayton Agreement helped hold Bosnia together after the war; they point to the absence of widespread violence since 1995 as an indicator of its success. However, observers also question whether Bosnia can function much longer under the Dayton system. They identify several key challenges: "], "subsections": [{"section_title": "Ethnic divisions", "paragraphs": ["Critics claim that Bosnia's political system reinforces the country's ethnic divisions and makes ethnicity a core basis of political identity. The ethnic parties that have dominated politics since the war generally appeal to voters from their respective ethnic communities rather than all Bosnians. Critics accuse ethnic party leaders of inflaming nationalist tensions and manipulating historical memory to distract from corruption and win elections, thus aggravating rather than bridging the deep wounds that remain from the war. In some parts of Bosnia, divisions are further reproduced at the societal level through institutions like segregated schools, which separate schoolchildren from different ethnic groups and teach them different curriculum."], "subsections": []}, {"section_title": "Gridlock", "paragraphs": ["Some analysts also contend that the system is too gridlock-prone to pass major political and economic reforms to be passed, even with the incentive of potential EU membership. Bosnia's fractured, overlapping institutions sometimes muddle policymaking jurisdiction and impede coordinated response. Furthermore, power-sharing arrangements create numerous veto points in the legislative process. Government coalitions are typically ideologically broad and unwieldy, creating a further source of potential dysfunction. One of the consequences of these barriers is that it is difficult to pass legislation. The previous state-level Parliament, for example, adopted twelve new laws over the course of its 2014-2018 term. "], "subsections": []}, {"section_title": "Corruption", "paragraphs": ["Corruption in Bosnia has roots in the country's wartime economy. A 2000 Government Accountability Office (GAO) report stated that \"organized crime and corruption pervade Bosnia's national political parties, civil service, law enforcement and judicial systems. [Ethnic] parties control all aspects of the government, the judiciary, and the economy, and in so doing maintain the personal and financial power of their members.\" Many observers claim that the situation has improved little since then. In 2018, the High Representative warned that the rule of law has deteriorated, while the U.S. State Department describes the rule of law as \"an existential issue.\" Bosnia's major parties allegedly siphon from the state apparatus and public enterprises in their strongholds to amass wealth and power. Furthermore, parties in power reportedly politicize hiring in Bosnia's public sector, which employs an estimated third or more of the working population. For many Bosnians, satisfactory employment depends on having the right political connections, which creates a dependence that reportedly is exploited during elections. In 2018, the outgoing U.S. ambassador to Bosnia decried the \"[Bosnian] politicians who seek to destabilize the country in order to remain in power at all costs for personal profit and protection.\""], "subsections": []}, {"section_title": "Weak Reform Incentives", "paragraphs": ["Many analysts believe that Bosnia's entrenched ethnic parties benefit tremendously from the status quo and have little incentive to reform the system. Bosnia's MPs are among the best-paid in Europe relative to local incomes, commanding six to eight times the average Bosnian salary. Parties and politicians who gain office in the government or administration often find \"a remarkably efficient path to personal enrichment.\" Politicians are skilled at using veto points to block legislation that threatens their position in Bosnia's patronage system. According to one analyst, Bosnia's patronage system is \"the raison d'etre of the political elites and is the main cause of the state's dysfunctionality and resistance to reform.\" Bosnia's entrenched political class may also fear penalty if serious reforms are enacted and shine the spotlight on malfeasance. Criminal indictments against leaders in neighborhood countries like Romania, Croatia, and North Macedonia highlight this risk. ", "Analysts believe these disincentives make entrenched politicians resistant to external pressure for reform. Several major rounds of U.S.- and EU-brokered constitutional reform efforts, including in 2006, 2008, and 2009, ultimately failed. Germany and the United Kingdom launched a major initiative in 2014 to shift the focus from difficult constitutional reforms to seemingly more feasible socioeconomic reforms that they hoped would improve Bosnia's economy and dismantle patronage networks. The 2015 \"Reform Agenda\" identified economic, administrative, and legal measures to be adopted by entity- and state-level governments. The process, which required the major parties to commit in writing to the reform framework, was supported by the EU, the International Monetary Fund, the World Bank Group, and the United States. As an incentive for politicians to agree to the Agenda, the EU offered the entry into force of Bosnia's long-stalled Stabilization and Association Agreement, which marked the first step toward EU membership. However, most observers view the Reform Agenda as largely unsuccessful; many of its provisions failed when entrenched parties objected to measures that would undercut their dominance. "], "subsections": []}, {"section_title": "Lack of Consensus", "paragraphs": ["While many officials recognize that Bosnia's political system needs reform, there is little consensus on how to change it or to generate the political will to find common ground so long as the dominant parties remain entrenched. Bosnian Serb leaders have expressed a desire to return to the \"original\" Dayton system, when the entities had greater competencies in security and justice. Milorad Dodik, who has dominated politics in Republika Srpska since the 2000s, has gone further by repeatedly threatening RS secession. Bosnian Croat leaders from the largest Croat party, the Croatian Democratic Union of Bosnia (HDZ-BiH), call for more autonomy for Croats, and have raised the prospect of splitting FBiH to create a third Croat-majority entity. By contrast, Bosniak leaders generally prefer more centralization and the removal of some of the institutional arrangements that they believe contribute to dysfunction and gridlock. Some Bosniak officials also have proposed dismantling the entities or eliminating FBiH's cantons. "], "subsections": []}, {"section_title": "Popular Discontent", "paragraphs": ["Survey research documents Bosnian citizens' anger toward the political class and their distrust of political institutions. In a 2018 International Republican Institute survey, 86% of respondents expressed belief that Bosnia is heading in the wrong direction. An estimated 170,000 individuals\u2014disproportionately young and skilled\u2014have emigrated since 2013. Dissatisfaction with education and healthcare, insecurity, and nepotism are cited as key motives to emigrate. ", "Nevertheless, some analysts believe that periods of social discontent in 2014 and 2018, which challenged the system but appeared to transcend ethnic divides, suggest that strengthening Bosnian civil society could increase pressure for reform, and perhaps cultivate a new generation of party leaders. Other observers have put their hopes for reform in Bosnia's so-called \"civic parties,\" which do not have nationalist platforms and typically mobilize voters on the basis of socioeconomic interests rather than ethnicity. While these parties have not matched the results of the ethnic parties, their electoral performance has improved in recent years. "], "subsections": []}, {"section_title": "2018 General Election", "paragraphs": ["Bosnia's challenges came to the forefront during its most recent general election on October 7, 2018 (see Table 1 ). The Central Election Commission (CEC) registered 60 parties and over 3,500 candidates for state-level, entity, and cantonal offices. Observers noted that the campaign climate was more divisive and nationalist in tone than usual. Despite broad voter dissatisfaction, entrenched ethnic parties won the largest vote shares. Almost six months after the election, the parties are still negotiating over government formation at the state level and in FBiH; however, it appears that entrenched ethnic parties will continue to dominate. In March 2019, the leaders of the largest Bosniak, Croat, and Serb parties stated that they had agreed to a set of principles to guide forming the state-level government (the Council of Ministers). Some observers viewed the improved result of civic parties (one-third of the vote in FBiH) as a positive development.", "Some of the most controversial outcomes concern the elections to the state-level presidency, composed of three members (one Bosniak, one Croat, and one Serb). In a closely fought race, \u0160efik D\u017eaferovi\u0107, candidate of the ethnic Bosniak SDA party, narrowly defeated the candidate of the civic SDP party (36.6% and 33.5%, respectively), retaining the lock that the SDA has had on the Bosniak seat in most elections since 1996, but perhaps auguring a future victory by a civic party candidate. ", "Prior to the election, some analysts expressed concern at the prospect of two of the three seats on the presidency being held by the nationalist Bosnian Serb leader Milorad Dodik and his ally, the nationalist Bosnian Croat politician Dragan \u010covi\u0107. Both politicians have explicitly or implicitly challenged the legitimacy of Bosnian statehood and called for greater ethnoterritorial autonomy. ", "However, to the surprise of some observers, \u017deljko Kom\u0161i\u0107 of the civic Democratic Front defeated incumbent \u010covi\u0107 for the Croat seat with 53% of the vote. Kom\u0161i\u0107 was previously elected as the Croat member of the presidency in 2006 and 2010, and is considered to be a moderate political figure who generally supports centralizing reforms. In contrast to HDZ-BiH leader \u010covi\u0107, he does not have strong ties to the Croatian government. ", "Kom\u0161i\u0107's election as the Croat member of the presidency in 2006 and 2010 was mired in controversy amid complaints that he only won with the support of Bosniaks who voted in the election for the Croat member on the presidency rather than the Bosniak member. Kom\u0161i\u0107 identifies as Croat but has been leader of several civic parties. He comes from central Bosnia, and not from the Croat-majority western regions that are the stronghold of the HDZ. Although it is not illegal for Bosniaks to vote for the Croat seat on the presidency rather than the Bosniak seat, some Croat leaders (especially HDZ-BiH and HDZ-1990) claim that it violates the spirit of Dayton and results in illegitimate representation of Croats. Similar accusations of ethnic cross-voting surfaced after Kom\u0161i\u0107's victory in 2018. Some analysts expect Kom\u0161i\u0107's victory to harden the HDZ-BiH position on electoral reform (see \"Legal Challenges,\" above) and possibly embolden politicians who seek a separate entity. ", "As most pre-election polls anticipated, RS strongman Milorad Dodik defeated the more moderate incumbent Serb member of the presidency with 54% of the vote. Dodik has dominated entity politics in RS since the mid-2000s as entity prime minister and president. Analysts note that RS's political environment grew more closed as Dodik consolidated power. Dodik has run afoul of the United States and the EU by frequently threatening to hold a referendum on RS secession, questioning the legitimacy of Bosnian statehood, and cultivating close ties to Russia (see below). The U.S. Treasury Department sanctioned him in 2017 for actively obstructing Dayton. ", "Many analysts have expressed concern that Dodik will use his new position to obstruct the workings of the central government while continuing to dictate politics in RS through loyal allies. Shortly after the election he vowed to \"work above all and only for the interests of Serbs.\" One of his first acts as head of state was to call for Bosnia to recognize Ukraine's Crimea region as Russian territory. In December 2018, the National Assembly of RS approved the creation of several new ministries, an act that some view as an attempt to wrest competencies from the state-level government. In early 2019, the RS parliament courted controversy when it passed legislation to create a new commission to reinvestigate the events of Srebrenica, which many view as an attempt to deny or downplay the massacres. ", "Since the election, the formation of governments has proceeded piecemeal, and legal challenges to election law in FBiH (see above, \"Legal Challenges\") initially cast doubt over the formation of that entity's government. The RS National Assembly approved the new entity government in December 2018. Party leaders continue to negotiate over forming governments in FBiH and the state-level Council of Ministers. Because the FBiH government did not fix electoral legislation before the election, the Electoral Commission adopted a decision to assign delegates to the House of Peoples based on the 2013 census. (The Electoral Commission's actions reportedly came amid strong pressure from U.S. and EU officials). Several Bosniak parties challenged the decision before the Constitutional Court; however, the Court declined to take on the case. "], "subsections": []}, {"section_title": "Economy", "paragraphs": ["Bosnia is one of Europe's poorest countries. The 1992-1995 war caused an estimated $110 billion in damage, and Bosnia's economy contracted to one-eighth of its prewar level. Despite significant reconstruction and recovery since 1995, GDP per capita was $5,148 in 2017, well below the EU average ($33,715) and that of Bulgaria ($8,031), its lowest-ranking member. Nearly one in five Bosnians lives below the poverty level. Bosnia's unemployment rate was 18% in 2018, down from 28% in 2015. Youth unemployment also declined in recent years from 60% to 46%. Nevertheless, these rates are still high by European standards. ", "Since 2015, annual GDP growth has averaged around 3%, but it is largely driven by consumption (much of which in turn is fueled by migrant remittances). The IMF has urged Bosnia to privatize or restructure the nearly 550 state-owned enterprises that comprise roughly 20% of its economy; many of them are unprofitable but allegedly are used by politicians as \"cash cows and workplaces for loyal cadres.\" ", "Bosnia participates in several free trade schemes. In 2006, it joined the Central European Free Trade Agreement (CEFTA) alongside other non-EU countries in the region, including other ex-Yugoslav neighbors. Bosnia's Stabilization and Association Agreement (SAA) with the European Union, which entered into force in 2015, provides for almost fully free trade. A free trade agreement with the European Free Trade Association (EFTA) also entered into force in 2015. ", "The EU is Bosnia's primary trade partner. Germany, Italy, Croatia, Slovenia, and Austria are Bosnia's key EU export markets, accounting for more than half of its exports in 2017. Serbia, another CEFTA signatory, is also an important export market. Bosnia's major exports include vehicle seats, raw materials, leather products, textiles, energy, and wood products.", "The EU is also Bosnia's primary source of foreign direct investment (FDI). In 2016, 63% of Bosnia's FDI came from EU countries, with Austria, Croatia, and Slovenia the top sources. Serbia is also a significant source of FDI (16.3%). However, Bosnia's fragmented legal and administrative structure create a challenging investment climate. Many relevant laws differ between the two entities. Corruption, entrenched economic interests, and political instability also deter investment. As a result, FDI amounts to just 2% of Bosnia's GDP, well below the Western Balkan average of 5%. Bosnia was the region's lowest-rated country in the World Bank's 2019 Ease of Doing Business Index."], "subsections": []}]}, {"section_title": "Foreign Relations and Security Issues", "paragraphs": [], "subsections": [{"section_title": "European Union and NATO Membership", "paragraphs": ["U.S. and EU policymakers view the NATO and EU accession processes as a positive force for democratization and reform in the Western Balkans, including Bosnia. According to analysts, this assessment informed the United States' partial retreat from the region in the 2000s and 2010s. ", "EU membership is one of the few policy issues for which there is relatively broad consensus among Bosnia's politicians and population. The EU's \"fundamentals first\" approach to enlargement in the Western Balkans frontloads the accession process with meeting the core requirements of having a democratic political system and functioning market economy; in Bosnia, the EU is currently focused on issues relating to the rule of law, public administration reform, and economic development. In 2016, Bosnia submitted its application to join the EU. Its current status is potential candidate , which entitles it to receive financial assistance from the EU's Instrument for Pre-Accession Assistance II (IPA II). Between 2014 and 2020, Bosnia is expected to receive \u20ac552 million in IPA II allocations, making the EU Bosnia's largest source of foreign assistance. Many EU member states provide additional aid to Bosnia through domestic foreign assistance programs. ", "Bosnia's EU membership prospects are uncertain. In a 2018 progress report, the European Commission (the EU's executive) flagged Bosnia's slow implementation of reforms, including the 2015 Reform Agenda (a flagship EU initiative in Bosnia) and numerous domestic and international court rulings (see \"Legal Challenges,\" above). Some analysts question whether Bosnia, under its current political system, would be capable of meeting the membership requirement of harmonizing domestic legislation with the many thousands of provisions in the acquis communautaire, the cumulative body of EU legislation, case law, and regulations.", "In comparison to EU membership, Bosnian leaders are more divided over the issue of joining NATO. These divisions largely fall along Bosnian Serb and Bosnian Croat/Bosniak lines. Bosnian Serb opposition is rooted in resentment over NATO's role in the Bosnian war, and may also reflect a desire to remain in lockstep with neighboring Serbia, which also does not seek NATO membership. Bosnia joined NATO's Partnership for Peace in 2006 and secured an Individual Partnership Action Plan in 2008. In 2010, NATO indicated that it would launch a Membership Action Plan (MAP)\u2014a program to help aspiring members meet membership requirements\u2014once Bosnia meets several conditions, the most challenging of which is the reregistration of permanent defense installations from entity to state-level government. RS officials have resisted ceding control over defense installations on entity territory. ", "Although Bosnia does not yet meet these requirements, in December 2018 NATO foreign ministers invited Bosnia to activate its MAP by submitting its first Annual National Program. Some analysts interpreted this invitation as a gesture to generate reform momentum in Bosnia's fragile post-election period. The Bosniak and Croat members of the presidency responded positively, but Bosnian Serb leaders (and most Bosnian Serbs) do not want Bosnia to join NATO. In October 2017, the RS National Assembly passed a resolution supporting military neutrality. RS President \u017deljka Cvijanovi\u0107 reiterated this stance after NATO's invitation, and Dodik\u2014now a member of the state-level presidency\u2014also has vowed to pursue military neutrality. "], "subsections": []}, {"section_title": "Relations with Croatia and Serbia", "paragraphs": ["Bosnia's relations with Croatia and Serbia are seen as an important component of regional stability. However, bilateral relations have often been fraught as a legacy of the Bosnian war, as well as sensitivities over Croatia and Serbia's relations with Bosnian Croats and Serbs. While democratic gains in Croatia and Serbia after 2000 contributed to improved relations with Bosnia, they remain reluctant to examine or acknowledge their role in the Bosnian war. ", "At times, Bosnian leaders have objected to what they describe as Croatian and Serbian meddling in Bosnia's affairs. Ex-Bosnian Croat member of the presidency Dragan \u010covi\u0107 and current Bosnian Serb member of the presidency Milorad Dodik draw support from leaders in Croatia and Serbia and reportedly hold Croatian and Serbian citizenship, respectively, alongside their Bosnian citizenship. The Croatian government financially and politically backed \u010covi\u0107 in Bosnia's 2018 elections, and Croatian politicians have raised the issue of Bosnian Croats' constitutional challenges (see above, \"Legal Challenges\") in forums like the European Parliament, NATO, and the United Nations. These moves prompted three former High Representatives to Bosnia to issue a joint letter expressing alarm over Croatia's \"meddling\" in Bosnia's internal affairs. The Croatian government also challenged the legitimacy of \u017deljko Kom\u0161i\u0107 as the Croat member of the Bosnian presidency (see above, \"2018 General Election\"). Some parties in Croatia hold Croatian election campaign events on Bosnian territory to mobilize Bosnian Croat voters with dual citizenship to vote in Croatia's elections. The Serbian government likewise supports Dodik, who is a frequent visitor to Belgrade. Some Serbian politicians have made statements supporting convicted Bosnian Serb war criminals, inflaming an issue that remains highly sensitive in Bosnia. Bosnia and Serbia have an unresolved demarcation dispute over approximately 40 square kilometers of border area, including a railway segment and hydroelectric power stations. ", "Bosnia has dual citizenship treaties with Croatia and Serbia, resulting in hundreds of thousands of Bosnian Croats and Bosnian Serbs acquiring dual citizenship. This has raised jurisdictional issues in cases in which indicted war criminals hold dual citizenship. ", "Despite occasional tensions in their relations, Croatia and Serbia are important economic partners for Bosnia. Both countries are among Bosnia's top export markets and top sources of FDI. As part of its enlargement strategy in the Western Balkans, the EU has embraced a connectivity agenda to improve regional transportation, energy, and infrastructural linkages, reserving up to \u20ac1 billion in grants for projects for the period 2015-2020. Officials believe that improved connectivity could benefit bilateral relations and contribute to regional stability. "], "subsections": []}, {"section_title": "Other Bilateral Relations", "paragraphs": ["Given its strategic location and relatively small, weak states, the Balkan region has long drawn in more powerful states. Many analysts maintain that as the United States and the European Union have both scaled back their presence in the Balkans to address other issues since the late 2000s, Russia, Turkey, and China partly filled the vacuum. "], "subsections": [{"section_title": "Russia", "paragraphs": ["U.S. and EU officials have expressed concern over Russian influence in the Western Balkans, particularly after Russia occupied Ukraine's Crimea region in 2014. Many analysts maintain that Russia does not have a grand strategy in the Western Balkans, but rather aims to prevent Euro-Atlantic integration and shore up its claims to great power status by asserting itself in the EU's \"inner courtyard.\" Analysts have identified several Russian tools in the region, including playing a \"spoiler\" role, projecting soft power, and leveraging energy dominance. ", "Observers contend that Russia plays a \"spoiler\" role in Bosnia by exacerbating ethnic divisions, backing illiberal or anti-Western political factions, and helping to militarize RS. They claim that these actions help sustain the dysfunction and gridlock that undermine Bosnia's Euro-Atlantic reform efforts. Russia has supported Bosnian Serb and Bosnian Croat nationalist leaders Milorad Dodik and Dragan \u010covi\u0107. Dodik's meeting with Russian President Vladimir Putin just before Bosnia's October 7, 2018 general election was one of nearly ten meetings between the two over the past three years, signaling high-level Russian support. Many experts assert that Russia has been a key ally to Dodik in resisting Western pressure to cooperate on reforms. Moscow has also supported divisive RS policies. When Dodik violated a Bosnian Constitutional Court ruling in 2016 by holding a referendum to establish a controversial \"Statehood Day,\" Russia stood apart from the High Representative and Western diplomats by supporting the initiative. More recently, Russia stated its support for RS's controversial Srebrenica commission (see above). Analysts have also expressed concern at Russia's apparent support for \u010covi\u0107, who has advocated greater autonomy for Croats and the creation of a third Croat entity. ", "Some analysts have expressed concern at Russia's role in RS's security sector. Russian forces have trained RS police special forces on counterterrorism and intelligence. Some observers believe that these exercises contribute to militarization in RS, potentially pushing the police force beyond its civilian law enforcement mandate. Analysts caution that militarization could increase the scale of violence in any confrontation between RS and the Bosnian government. Some Bosnian Serb ultranationalist and veterans groups have fought alongside pro-Russia combatants in Ukraine, and analysts believe they could be mobilized to support RS leaders as well. ", "Russian soft power draws upon religious and cultural kinship with Bosnian Serbs, as well as Russia's history of support during the wars of Yugoslav disintegration. Kremlin-linked media, like Sputnik and RT , amplify existing anti-Western narratives and positively shape public opinion toward Russia. Some local media further propagate Sputnik and RT articles. A 2018 National Democratic Institute media study found that RS media stories about Russia were overwhelmingly positive, while the tone of most stories about the United States and NATO was negative. Pro-Russian media glorifies the Russian military, highlights cultural and religious links between Serbs and Russians, and documents high-level meetings between RS and Russian officials. ", "Economic relations between Russia and RS have deepened in recent years. Russia is the largest source of FDI in RS, and it is largely concentrated in the energy sector. In 2007, Russian state-owned oil company Zarubezhneft bought RS's Bosanski Brod oil refinery, motor oil processing facilities in nearby Modrica, and retailer Banjaluka Petrol. Some analysts believe that these assets\u2014which were purchased without an open tender\u2014give Zarubezhneft influence in RS. In addition to being an important employer, Zarubezhneft is RS's biggest taxpayer; its value-added tax and excise duty contributions reportedly account for 25% of RS budget revenue. ", "Bosnia depends upon Russian natural gas imports via Ukraine. Energy policy is vested in the entities, and Russian natural gas provider Gazprom reportedly has used its market dominance to pit the two entities against one another and undermine projects that would diversify supplies. "], "subsections": []}, {"section_title": "Turkey", "paragraphs": ["Many analysts believe that Turkey's influence in Bosnia has increased over the last two decades due to Ankara's close relationship with Bosniak leaders. Some Turkish officials reportedly view Bosnia as a natural sphere of influence given geographic and historical connections. Observers note that Turkish President Recep Tayyip Erdogan has at times invoked Ottoman-era ties to Bosnia and religious kinship with Bosniaks as soft power tools. ", "Turkish influence in Bosnia has expanded since Yugoslavia's collapse. During the 1992-1995 war, Turkey gained prestige among Bosniaks by condemning the international arms embargo against Bosnia, arguing that it prevented Bosniaks from defending themselves. Turkey, as well as other predominantly Muslim countries like Iran and Saudi Arabia, reportedly supplied Bosniak forces with arms. ", "Turkish influence has continued since the war's end. Bosnia is one of the top recipients of Turkish Cooperation and Coordination Agency assistance; much of this support is earmarked for projects to restore Ottoman-era buildings and monuments. A Turkish Cultural Center was established in Bosnia in 2003, and in 2009 the Yunus Emre Foundation, an NGO founded by the Turkish government, opened an office in Sarajevo to promote Turkish language and culture.", "Turkey has popular support among Bosniaks. In a 2018 International Republican Institute survey, 76% of Bosniak respondents had positive views of Turkey\u2014the strongest support among Bosniaks for any foreign state. Many Bosnian Croats and Bosnian Serbs look to Croatia and Serbia as external protectors, and some analysts believe that Turkey has attempted to establish a similar role for itself vis-\u00e0-vis Bosniaks. Observers contend that Erdogan's ruling party has particularly strong ties to the largest Bosniak ethnic party, the SDA. Erdogan and Turkish state-owned media openly supported SDA candidate Bakir Izetbegovi\u0107 in his bid for the Bosniak seat on the presidency in 2014. Some observers believe that Izetbegovi\u0107's clout within the SDA rests in part on his support from Erdogan. ", "Economic relations between Bosnia and Turkey have deepened in recent years. Turkish FDI in Bosnia accounted for 5.6% of FDI flows in 2016. One notable project is a highway to connect Sarajevo to Belgrade, Serbia. After years of disagreement, Bosnian officials approved the route in February 2019. Turkey is expected to provide funding for some of the expected \u20ac3 billion in costs, although the terms of the contract are not yet resolved. ", "Some officials, including French President Emmanuel Macron, have expressed concern over Turkey's alleged ambitions as part of broader EU concern over external influence in the Balkans. However, analysts caution that Turkey's ambitions and capabilities in the Balkans may be overstated. They note that the scope of Turkish investment is sometimes exaggerated in the media, and that proposed projects do not always come to fruition. "], "subsections": []}, {"section_title": "China", "paragraphs": ["While Russian and Turkish influence in Bosnia relies in part on soft power, China's presence in Bosnia is primarily economic. Between 2011 and 2019, Chinese investments in Bosnia amounted to an estimated $3.6 billion, primarily in the form of direct lending for energy and transportation projects. Chinese firms have contracts to construct or expand energy plants, including a \u20ac350 million loan to construct a coal-fired plant in Stanari, RS. A \u20ac1.4 billion deal was signed to construct a highway between Banja Luka and Mlini\u0161te. In March 2019, the EU Energy Community criticized the FBiH entity government's decision to guarantee a \u20ac600 million loan from China's Exim Bank to build a coal-fired power plant in Tuzla. ", "However, some analysts caution that China's economic influence in Bosnia may be overstated at present. While China's pledged investments in high-visibility projects garner media attention, the actual amount of Chinese FDI is far less than that of the EU. Moreover, many pledged projects do not come to fruition. ", "Nevertheless, EU and U.S. officials have voiced concern over the scope of China's investments in the Balkans, as well as Chinese lending practices. Chinese loans often require recipient state governments to assume the loan burden, potentially leading to high external debt. The EU has also raised concerns that Chinese lending practices violate EU rules in public procurement because they frequently require use of Chinese contractors, laborers, or supplies. In contrast to EU funds, which are partly designed to spur reform, Chinese loans have few conditions and rules linked to transparency or reform. Finally, EU officials have expressed concern that China's economic might could be a source of leverage over recipient states that are candidates or potential candidates for EU membership and thus impede the EU's ability to speak with one voice on relations with China if they do become members. "], "subsections": []}]}, {"section_title": "Transnational Issues", "paragraphs": [], "subsections": [{"section_title": "Migration and Refugees", "paragraphs": ["Bosnia was not a core transit country in the \"Balkan Route\" that hundreds of thousands of migrants and refugees followed in an attempt to reach the EU during heightened flows in 2015 and early 2016. However, recent route shifts have brought more migrant and refugee traffic through Bosnia. Since early 2018, an estimated 23,000 migrants and refugees have entered Bosnia; approximately 25% of them remain in the country. Most of them hope to enter EU territory via Bosnia's neighbor, Croatia, and from there move on and enter the EU's visa- and passport-free Schengen Area. However, the Croatian government has expanded border policing, and apprehended individuals are sent back to Bosnia. The EU provided \u20ac2 million in 2018 to help Bosnia respond to the crisis and provide shelter to migrants and refugees who are effectively stranded in Bosnia. ", "The migration crisis has triggered a backlash from some Bosnians, particularly in Una-Sana Canton, which borders Croatia and has the highest concentration of migrants and refugees. Some residents of Biha\u0107, Una-Sana's administrative center, protested against camps situated in their municipality in October 2018, while local authorities in Velika Kladu\u0161a, another city in the canton, reportedly obstructed the Ministry of Security's plans to house migrants in a local building. The incident illustrates local backlash as well as the state-level government's difficulty enforcing its decisions, even when it has jurisdiction."], "subsections": []}, {"section_title": "Radicalization and Counterterrorism", "paragraphs": ["Islam was introduced to part of Bosnia's population during Ottoman rule. In socialist Yugoslavia, the semi-official Islamic Religious Community played a key role in religious affairs, including legal rulings and religious education. It was renamed the Islamic Community of Bosnia and Herzegovina in 1992, and remains an important religious institution. ", "Islamic tradition in the Balkans, including Bosnia, is generally moderate and secular. The majority of Bosnia's practicing Muslims follow the Hanafi school of Sunni Islam. However, some analysts have expressed concern over the emergence of groups influenced or funded by state and non-state entities in the Arab Gulf states, where more conservative Hanbali Sunni practices are common. Aid workers, missionaries, and \"mujahedeen\" fighters from the Gulf States promoted transnational Islamist militancy and Salafist Hanbali religious doctrine during Bosnia's 1992-1995 war; Iran's government also supported Bosniak leaders and forces. After the war, Saudi Arabia provided an estimated $600 million in aid to repair and build hundreds of mosques and establish schools and cultural centers that promote socially conservative Sunni views. Iran has also maintained active cultural outreach and other ties to some Bosnian Muslims.", "Many analysts contend that Salafi groups have limited support in Bosnia because of the traditionally high level of secularism among Bosnian Muslims. They also note that few Bosnian Muslims who subscribe to Salafist ideas and practices have violent intentions, and many of them live in remote rural communities. While most of these groups were not originally affiliated with official religious organizations in Bosnia, the Grand Mufti of Bosnia's Islamic Community exerted pressure on them to acknowledge his authority and his right to monitor religious content. As a result, an estimated 90% of Salafi groups were brought under official structures.", "Nevertheless, some experts caution that radicalized groups and individuals may pose a terrorist threat despite their small numbers. Radicalized Muslims were implicated in the bombing of a police station in Bugojno in 2010 and a lone-gunman attack on the U.S. Embassy in Sarajevo in 2011. The Islamic State (IS) and Nusra Front's gains in Syria and Iraq in the 2010s altered the dynamic of the terrorism threat in Bosnia and broadened the use of social media in recruitment. Between 2012 and 2017, an estimated 350 Bosnian citizens traveled from Bosnia or Bosnian diaspora communities to fight with armed groups in Iraq and Syria. More recently, returned foreign fighters are seen as a potential threat as the position of the IS and other armed groups has weakened. Bosnia's stock of illegal weapons, mines, and explosives may exacerbate the risk posed by returnees. As of December 2017, officials believed that just over 100 Bosnians remained in Syria (including women and children), roughly 50 had returned to Bosnia, and 70 had been killed in the conflict. ", "In 2014, the Bosnian government introduced new criminal offenses to prosecute foreign terrorist fighters and recruiters. Several dozen returned fighters and domestic recruiters have been convicted of these offenses. While the U.S. State Department describes Bosnia as a \"cooperative counterterrorism partner,\" it warns that Bosnia's political fragmentation and dysfunction could undermine counterterrorism efforts. For example, in 2017 several ministries proposed new measures to tighten counterterrorism efforts; however, they were not enacted due to political gridlock in state-level and FBiH governments. "], "subsections": []}]}]}, {"section_title": "U.S. Relations with Bosnia", "paragraphs": ["Initially viewed as a \"European problem,\" the Bosnian conflict eventually helped shape the post-Cold War role of the United States and NATO in European security. When the United States assumed greater responsibilities in resolving the conflict, its role was considerable: leading NATO airstrikes, garnering diplomatic support from Russia and European allies, persuading warring parties to agree to a ceasefire, brokering the Dayton Peace Agreement, and deploying 20,000 troops to Bosnia. According to Richard Holbrooke, the U.S. official who brokered the talks, the Bosnian war was a pivotal period in U.S. foreign policy in Europe: \"The three main pillars of [policy]\u2014U.S.-Russian relations, NATO enlargement into Central Europe, and Bosnia\u2014had often worked against each other. Now they reinforced each other: NATO sent its forces out of area for the first time in its history, and Russian troops, under an American commander, were deployed alongside them.\" ", "Some analysts and policymakers believe that the United States' strong hand in resolving the conflict and in shaping Bosnia's political system have made it a stakeholder in Bosnia's future. U.S. officials, often in cooperation with the EU, have intervened to defuse crises and broker reform talks. The United States also has imposed sanctions against Bosnian officials: in addition to Dodik (see above), the U.S. State Department publicly designated Bosnian Serb politician Nikola \u0160piri\u0107 (Dodik's associate) for \"significant corruption or gross violation of human rights.\"", "U.S. policymakers attach strategic importance to Bosnia's stability; many analysts believe turbulence in Bosnia could reverberate in the Balkans and potentially draw in Croatia and Serbia, while instability in other parts of the region could spill over into Bosnia. When the Trump Administration indicated in 2018 that it would consider supporting a potential Serbia-Kosovo agreement to \"adjust borders\" between the two\u2014a major break with the long-standing EU and U.S. policy to oppose redrawing borders in the Balkans along ethnic lines\u2014some analysts expressed concern that the Administration could reshape long-standing U.S. policy toward Bosnia. However, the new U.S. Ambassador to Bosnia stated in February 2019 that the U.S. will continue to be \"guarantor of Bosnia and Herzegovina's sovereignty and territorial integrity.\" ", "On the other hand, many observers also note that U.S. engagement in Bosnia (and the Western Balkans) decreased under the administrations of President George W. Bush and President Barack Obama. During this time U.S. policymakers turned their focus to geopolitical crises and challenges in other parts of the globe while ceding the regional lead to the EU. Indeed, some analysts have urged the United States to assume a greater role in Bosnia, arguing that Bosnia's current crises warrant it, and that the EU and the United States are more effective in the region when they work together. "], "subsections": [{"section_title": "Issues for Congress", "paragraphs": ["Congressional interest in Bosnia dates back to the 1992-1995 war. Many Members featured prominently in foreign policy debates over U.S. intervention in the conflict. In 2015, the House passed a resolution describing the Srebrenica massacres as a genocide and urging the United States to continue to support Bosnia's territorial integrity ( H.Res. 310 , 114 th Congress). In the 114 th and 115 th Congresses, a bill was introduced in the Senate to establish an enterprise fund to promote economic development and the private sector in Bosnia ( S. 2307 and S. 864 ). In April 2018, the House Foreign Affairs Committee's Subcommittee on Europe, Eurasia, and Emerging Threats held a hearing on Bosnia's prospects ahead of its October 2018 elections.", "Congress's engagement with Bosnia also continues within the broader context of policy concern over the external influence of China, Turkey, and Russia in the Western Balkans and energy security. As a potential candidate for EU membership and NATO partner, Bosnia is eligible for assistance through the Countering Russian Influence Funds under the Countering America's Adversaries Through Sanctions Act (CAATSA) enacted in 2017 ( P.L. 115-44 ). ", "Through congressionally approved (and sometimes expanded) foreign assistance appropriations, Bosnia has received more than $2 billion in aid since 1995. Between 1996 and 1999, the United States pledged $1 billion of the $4 billion international commitment to implementing Dayton's civilian provisions and helping to rebuild Bosnia. The cost of U.S. military operations in Bosnia since 1992 is estimated at more than $10 billion ( Appendix I ). Bosnia continues to receive U.S. foreign assistance, although the amount has decreased in recent years. Assistance to Bosnia in FY2015 and FY2016 was approximately $33 million each year. In FY2017, it was $53.5 million, and $41.5 million in FY2018. The Administration requested $21 million for FY2019 and $16.9 million for FY2020. "], "subsections": []}, {"section_title": "Potential Questions for Congress", "paragraphs": ["Nearly 25 years after the Dayton Peace Agreement, Bosnia faces many challenges. In considering U.S. relations with Bosnia, Members of Congress may consider the following questions: ", "How can the United States encourage Bosnia's government to incorporate the legal rulings of the Bosnian Constitutional Court and the European Court of Human Rights into election legislation and the constitution? How can U.S. foreign assistance be used to counter Russian influence in Republika Srpska, in particular Russia's close ties to Bosnian Serb politicians and its use of local media and Sputnik to amplify anti-U.S. narratives and project pro-Russia soft power? What are the implications of potential militarization in Republika Srpska? How can the United States effectively address this alleged trend? How can the United States support a successful reform initiative that secures transparency and accountability, and facilitates a political community in which politicians and voters are committed to the Bosnian state and socioeconomic challenges that transcend all three ethnic groups? Can the Germany-U.K. initiative from 2015 be revived, or is it better to start from scratch? Are the approximately 600 troops in the European Union Force mission in Bosnia sufficient to stabilize Bosnia if violence breaks out? If Serbia and Kosovo agree to normalize relations by redrawing their borders, how can U.S. policymakers prevent this development from destabilizing Bosnia, particularly given Milorad Dodik's threats to seek RS secession if Kosovo is \"partitioned\"? How can the United States encourage Croatia and Serbia to engage in Bosnia in a manner that helps bridge ethnic divisions and contributes to Bosnia's territorial integrity and sovereignty? Given the pervasiveness of corruption in Bosnia, how can U.S. assistance most effectively be used to counter it? Does foreign assistance contribute to civic groups and independent media that could serve as a check against corruption? "], "subsections": [{"section_title": "Appendix. DOD Funding 1992-2018", "paragraphs": [], "subsections": []}]}]}]}}
{"id": "R45462", "title": "Freight Issues in Surface Transportation Reauthorization", "released_date": "2019-01-16T00:00:00", "summary": ["Economic growth and expanded global trade have led to substantial increases in goods movement over the past few decades. The growth in freight transportation demand, along with growing passenger demand, has caused congestion in many parts of the transportation system, making freight movements slower and less reliable. Because the condition and performance of freight infrastructure play a considerable role in the efficiency of the freight system, federal support of freight infrastructure investment is likely to be of significant congressional concern in the reauthorization of the surface transportation program. The program is currently authorized by the Fixing America's Surface Transportation Act (FAST Act; P.L. 114-94), which is scheduled to expire on September 30, 2020.", "Until recently, the federal surface transportation program did not pay specific attention to freight movement. However, the two most recent surface transportation acts, the Moving Ahead for Progress in the 21st Century Act (MAP-21; P.L. 112-141), approved in 2012, and the FAST Act, passed in 2015, encouraged federal and state planning for freight transportation from a multimodal perspective. The FAST Act also directed a portion of federal funds toward highway segments and other projects deemed most critical to freight movement. It did this by creating two new programs: a discretionary grant program administered by the Secretary of Transportation and a formula program for distributing federal funds to states.", "Trucks continue to move the bulk of freight in the United States. Freight tonnage is projected to increase by an average of 1.4% per year through 2045, according to the Department of Transportation (DOT), and trucks are projected to carry the largest share of the additional freight traffic. Much of the growth in truck traffic has occurred in urban areas, and this trend is expected to continue. Consequently, most truck congestion occurs in urban areas, and comparatively few highway miles are responsible for a disproportionately large share of congestion costs. Highway infrastructure decisions are mainly made by the states, but federal fuel tax revenue is an important source of funds for the projects states pursue. With fuel taxes no longer able to fully cover the cost of existing highway infrastructure programs, Congress has considered strategies to raise new revenue and to make more effective use of federal dollars to facilitate the movement of freight. The trucking industry has favored raising additional revenue by increasing fuel taxes and has generally opposed greater use of highway tolls out of concern that these may disproportionately affect truckers. DOT studies have shown that the structure of motor fuel taxes provides a subsidy to heavily loaded trucks at the expense of passenger vehicles.", "One significant question is whether additional funding for freight-related infrastructure should be distributed to the states by formula or on a discretionary basis. Federal projections indicate that a relatively small number of Interstate Highway segments and interchanges are likely to face large increases in truck traffic by 2045. However, individual states may have limited incentives to use their federal formula funds to alleviate increasing congestion in those locations, as many of the trucks affected may be passing through rather than serving local businesses. Discretionary grants may be more effective in providing large amounts of federal funding for very costly freight-related projects, particularly those requiring interstate cooperation, but could also lead to fewer projects receiving federal funds.", "Besides appropriating funds for freight infrastructure, Congress has created programs to support research and development of new transportation technologies. Autonomous and connected vehicle technologies have potential applications in the freight sector, but many federal regulations are written assuming that a single person is in full control of a vehicle at all times. Congress has considered, but not advanced, proposals to update such regulations. Industry is eager to explore the cost-saving potential of new technology, so it will likely remain an issue for Congress."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Economic growth and expanded global trade have led to substantial increases in goods movement over the past few decades. The growth in freight transportation demand, along with growing passenger demand, has caused congestion in parts of the transportation system, making freight movements slower and less reliable. Because the condition and performance of freight infrastructure play a considerable role in the efficiency of the freight system, federal support of freight infrastructure investment is likely to be of significant congressional concern in the reauthorization of the surface transportation program. The program is currently authorized by the Fixing America's Surface Transportation Act (FAST Act; P.L. 114-94 ), which is scheduled to expire on September 30, 2020.", "Congress has begun to place greater emphasis on freight over the course of recent reauthorizations, but national policy is still vague or silent on a number of issues. There are ongoing disagreements about the best way to accomplish improvements in freight system infrastructure\u2014notably, how to raise new funds for investment, the magnitude of the amounts required, which projects to prioritize, and the role of the federal government in the planning process. Meanwhile, technological advances in mobility have prompted new questions about how best to accomplish the efficient movement of people and goods in a multimodal transportation system. Autonomous vehicle technology could have potential applications in the trucking industry, as could greater deployment of automation in the rail and port industries. ", "While the FAST Act concerns many aspects of surface transportation funding and safety policy, the focus of this report is on truck freight and that portion of the rail and port industries that transports truck trailers and containers (intermodal freight). This report does not address operational issues that also may be of interest during reauthorization, such as hours of service and hazardous material transport safety. Moreover, this report does not contain in-depth discussion of environmental issues associated with freight movements, such as carbon emissions and climate change, or air and noise pollution, though these issues may be germane to the topics of funding and project selection."], "subsections": []}, {"section_title": "The Freight Transportation System", "paragraphs": ["The freight transportation system is a complex network of different types of transportation, known as modes, that carries everything from coal to small packages. It handles domestic shipments of a few miles as well as international shipments of thousands of miles. Often, a shipment of cargo will move across multiple modes before reaching its destination, using road, rail, air, pipeline, and/or maritime infrastructure in the process; when freight changes modes in this way, it is referred to as multimodal . Freight moved in stackable containers is easier to move among ships, trains, and trucks; this is referred to as intermodal freight.", "Rail alone carries the second-largest share of domestic freight measured in ton-miles, but only a small proportion by value ( Table 1 ), reflecting the fact that major rail cargos such as coal and grain have low ratios of value to weight. Trucks carry by far the most freight by value but a smaller proportion of ton-miles, as the average truck shipment travels a much shorter distance than the average rail shipment. Air transportation is a relatively minor mode for domestic shipments because it is expensive to ship goods by air. The proportions for international shipments to and from the United States are quite different from those for domestic shipments, with about three-quarters of goods, measured by weight, arriving or departing by ship. Measured by value, nearly one-fourth of U.S. international freight moves by air.", "Trucks operate over a four-million-mile system of public access highways and streets. Of this, approximately 209,000 miles has been designated by the Federal Highway Administration (FHWA) as the \"National Truck Network,\" a network of highways able to accommodate large trucks. This network includes the Interstate Highway system, which extends approximately 47,000 miles, plus principal arterial highways designated by the states. Trucks account for about 9% of vehicle miles traveled on the entire U.S. road system, but 15% of vehicle miles on Interstates and 24% on rural Interstates.", "The railroad sector is dominated by seven large railroads, or Class I carriers, that generally focus on long-distance moves. The Class I railroads are complemented by more than 500 short line and regional railroads (Class II and Class III, respectively) that tend to haul freight shorter distances, provide connections between the Class I networks, or connect the Class I networks and ports. For the most part, railroad infrastructure, including track and associated structures and the land they occupy, is owned by the carriers themselves. The U.S. railroad network consists of approximately 140,000 miles of railroad, of which approximately 94,000 miles could be considered transcontinental or mainline railroad and 46,000 miles could be considered regional or local railroad. In some places, freight trains share space with intercity and commuter passenger trains."], "subsections": [{"section_title": "The Flow of Freight", "paragraphs": ["Overall, freight traffic has recovered to the level prior to the 2007-2009 recession, but the modal composition of freight traffic is now quite different ( Figure 1 ). While truck tonnage has risen steadily and is now 33% higher than a decade ago, rail tonnage dropped sharply in 2008-2009 and has recovered more slowly. Increased intermodal traffic has offset declining volumes of coal and crude oil shipped by rail. Barge traffic on inland waterways recovered from recession lows in 2010, but since then has grown only slightly. "], "subsections": [{"section_title": "Truck, Train, and Intermodal Freight", "paragraphs": ["The steady growth in truck traffic, which includes smaller delivery trucks in addition to tractor-trailer \"combination\" trucks, has been linked to the growth of e-commerce establishments and just-in-time delivery services. As companies push to offer quicker delivery, they are opening new distribution centers in urban areas. These centers depend on large trucks to replenish inventory, and on small trucks to quickly deliver products to consumers.", "Coal has been the most significant revenue source for the rail industry aside from intermodal traffic, and the decline in rail traffic reflects a general decline in demand for coal. Since 2011, the volume of coal carried by railroads has declined significantly despite rebounding slightly in 2017. This decline has been mitigated somewhat by an increase in intermodal traffic, and by more short-lived booms in other commodity groups. A spike in oil production and a shortage of pipeline capacity contributed to a bump in rail shipments from 2012 to 2016, but the quantity of oil moved by rail has since receded. Crude industrial sand, which includes sand used in hydraulic fracturing of oil and gas wells, saw a similar rise and fall in that period before spiking again in 2017. ", "Tonnage carried by trucks as a single mode has increased a modest 2% over the past decade. Meanwhile, tonnage moving only by rail has decreased 16%, due largely to a significant decline in coal shipments. Most of the growth in surface freight has occurred in intermodal tonnage (mainly involving combined truck/rail shipment), which has increased by 188% in 10 years. ", "The U.S. Department of Transportation (DOT) forecasts that domestic freight tonnage will increase by an average of about 1.4% per year from 2015 to 2045. In that span, truck tonnage is projected to increase by 38%, rail tonnage by 20%, and multimodal tonnage (of which intermodal is a subset) by 120%. Overall, this would represent an acceleration compared to recent trends. Freight tonnage in the United States grew at an average annual rate of 1.1% from 1993 to 2017, with truck tonnage growing slightly faster (1.4%) in that period. By contrast, DOT forecasts truck tonnage to grow more slowly than total tonnage over the coming decades."], "subsections": []}, {"section_title": "Maritime Freight", "paragraphs": ["River and coastal ports are hubs for considerable truck and rail activity, making the road and rail links to these facilities an important component of surface transportation infrastructure. Over the last two decades, barge traffic on inland rivers has been flat or declining. Meanwhile, the volume of containerized cargo grew rapidly from 17.9 million twenty-foot equivalent units (TEUs) in 2000 to 32.0 million TEUs in 2015. Container traffic declined during the 2007-2009 recession but has since recovered. In 2018 it was approximately 40% above its 2009 low.", "The Ports of Los Angeles and Long Beach together handled 29.9% of all container traffic at ocean ports in the United States in 2017. Container trade at these two ports increased by 64% between 2000 and 2017, but was outpaced by the growth in container trade for the entire United States, which grew by 106%. Congress has requested studies on the condition of road and rail links to ports (also known as intermodal connectors ) in past surface transportation reauthorization legislation. The most recent study by DOT indicates that of the approximately 1,484 miles of freight intermodal connectors in the National Highway System, roughly half are two lanes wide. ", "Certain port projects are eligible for funding from surface transportation programs, including the BUILD and INFRA competitive grant programs discussed later in this report, but eligibility reflects a primary concern with the intermodal connections to these facilities. Most capital programs to benefit marine transportation, such as harbor dredging and lock repair, are undertaken by other federal agencies, notably the U.S. Army Corps of Engineers, rather than by DOT. Historically, these programs have not been included in surface transportation legislation."], "subsections": []}]}]}, {"section_title": "Evolution of National Freight Transportation Policy", "paragraphs": ["Until recently, there was no separate federal freight transportation program, but instead a relatively loose collection of freight-related programs that were embedded in a larger surface transportation program aimed at supporting both passenger and freight mobility. Historically, most highway funding has been distributed to the states via several large \"core\" formula programs, leaving states to decide how to use their allocated funds. Other, smaller programs provide grant awards for more targeted projects. The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA; P.L. 109-59 ), which was enacted in 2005 and expired in 2012 after a series of extensions, funded over 70 highway programs. Almost all of these have now been combined into a handful of formula programs with broader objectives.", "Core surface transportation program funds are distributed to states by formula, but freight transportation is often interstate in nature. The funds received by a single state may not be sufficient to construct the infrastructure necessary to relieve congestion at freight bottlenecks whose effects are felt several states away. Recognizing this, Congress created the Projects of National and Regional Significance program within SAFETEA as a way of directing federal funds to large projects with wide-ranging benefits. All funds made available through the program were earmarked in the legislation and were not available for other projects.", "The American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ) created a discretionary grant program for transportation infrastructure investments, originally known as the Transportation Investment Generating Economic Recovery (TIGER) program and now called the Better Utilizing Investments to Leverage Development (BUILD) program. BUILD grants are distributed at the discretion of the Secretary of Transportation, subject to a set-aside for rural areas and limits on maximum and minimum grant size. The program is not authorized in law, but has received funding in appropriations bills every year since its introduction in FY2009 through FY2018. Since its inception, roughly one-quarter of grants have gone to freight-specific projects, and almost half to road projects that could benefit freight as well as passengers (see Table 2 )."], "subsections": [{"section_title": "Moving Ahead for Progress in the 21st Century (MAP-21) Act", "paragraphs": ["The successor to SAFETEA, the Moving Ahead for Progress in the 21 st Century Act (MAP-21; P.L. 112-141 ) of 2012, contained the first articulation of a national freight policy. Whether the federal government should make a more focused effort toward funding projects that benefit freight movement was a major policy question in the reauthorization debate. The Senate version of MAP-21 ( S. 1813 , 112 th Congress) would have created a separate program for funding freight-related projects, but this was not enacted. Instead, MAP-21 allowed a larger share of project costs to come from federal sources if a project could be demonstrated to improve the efficient movement of freight: the state cost share for freight-specific projects on Interstate Highways was reduced from 10% to 5% and on other highways from 20% to 10%.", "MAP-21 enacted planning provisions related to identifying infrastructure components critical to freight transport. It directed DOT to designate a \"Primary Freight Network\" (PFN) consisting of 27,000 centerline miles of existing roadways (independent of the number of lanes), based primarily on freight volume and in consultation with shippers and carriers. The Secretary of Transportation could designate up to an additional 3,000 centerline miles of existing or planned roads as part of the PFN based on their future importance to freight movement. States could designate \"critical rural freight corridors\" based on the density of truck traffic if they connect the PFN or Interstate System with sufficiently busy freight terminals. The act designated a larger National Freight Network to include the critical rural freight corridors, portions of the Interstate System not designated as parts of the PFN, and roads in the PFN. DOT, in consultation with partners and stakeholders, was directed to develop a National Freight Strategic Plan that identifies highway bottlenecks and to report every two years on the condition and performance of the National Freight Network. ", "Each state was encouraged, but not required, to create a state freight advisory committee comprising representatives of freight interests and a state freight plan \"that provides a comprehensive plan for the immediate and long-range planning activities and investments of the State with respect to freight.\" Among other things, a state's freight plan was to describe how it will improve the ability of the state to meet the national freight goals established by DOT."], "subsections": []}, {"section_title": "Fixing America's Surface Transportation (FAST) Act", "paragraphs": ["National freight policy was updated significantly by the FAST Act. The act repealed the Primary Freight Network and National Freight Networks established by MAP-21. It instead directed DOT to create a National Freight Strategic Plan and identify the components of a National Highway Freight Network, consisting only of highways, and a National Multimodal Freight Network, which must include railroads, marine highways, and the infrastructure necessary to connect these networks to one another in order to facilitate the movement of containerized freight. The multimodal network was to be officially designated within a year of enactment. However, while DOT sought public comment on an interim network and released a draft strategic plan, it has not taken final action. No public comment was sought on the National Highway Freight Network, as the FAST Act defined it by expanding upon the Primary Freight Network already defined by MAP-21.", "The FAST Act also directed a portion of federal funds toward highway segments and other projects deemed most critical to freight movement. It did this by creating a new discretionary grant program and a new formula program for distributing federal funds to states. The stated goals of these two programs are very similar: to increase U.S. global economic competitiveness, reduce congestion and bottlenecks, increase the efficiency and reliability of the highway network, and reduce the environmental impact of freight movement."], "subsections": [{"section_title": "National Highway Freight Program", "paragraphs": ["The National Highway Freight Program created in the FAST Act is a formula program with funding of $1.1 billion in FY2016 rising to $1.5 billion in FY2020. Funds are administered by state departments of transportation and must be directed toward highway components designated as especially important to freight movement. These components include a Primary Highway Freight Network (PHFN) designated by the Federal Highway Administration, \"critical rural freight corridors\" designated by the states, and \"critical urban freight corridors\" designated by either states or metropolitan planning organizations, depending on the population size of an urban area. These components, along with other Interstate Highway segments, comprise the National Highway Freight Network. ", "States containing 2% or more of the total mileage of the PHFN are required to spend their program funds on the PHFN, critical rural, or critical urban freight corridors. Other states may spend their program funds on any part of the larger National Highway Freight Network. Up to 10% of a state's apportionment can be directed toward projects within rail or port terminals \"that provide surface transportation infrastructure necessary to facilitate direct intermodal interchange, transfer, and access into or out of the facility.\" "], "subsections": []}, {"section_title": "Nationally Significant Freight and Highway Projects Program (FASTLANE/INFRA)", "paragraphs": ["The Nationally Significant Freight and Highway Projects Program is a discretionary grant program with funding of $800 million in FY2016 rising to $1 billion in FY2020. It was initially known as the Fostering Advancements in Shipping and Transportation for the Long-Term Achievement of National Efficiencies (FASTLANE) program, but is now called Infrastructure for Rebuilding America (INFRA). Public entities are eligible to apply, including states and groups of states, metropolitan planning organizations, local governments or groups of local governments, political subdivisions of states or local governments, transportation-related authorities such as port authorities, and tribal governments. Eligible uses of funds include highway projects, railway-highway grade crossing projects, connections to ports and intermodal freight facilities, and elements of private freight rail projects that provide public benefits. However, grants for freight intermodal or freight rail projects are capped at $500 million over the life of the program. A grant is to provide not more than 60% of the cost of a project, but other federal assistance can be used to provide up to a total federal share of 80% (i.e., the local cost share required must be at least 20%). ", "This grant program is designed primarily for relatively high-cost projects; each grant awarded must be at least $25 million, and the project must have eligible costs amounting to at least $100 million or a significant share of a state's highway funding apportionment the previous fiscal year (e.g., 30% in the case of a project within a single state). However, 10% of grant funds are reserved for smaller projects with minimum grants of $5 million. DOT is to consider the dispersion of projects geographically, including between rural and urban communities. Congress has 60 days to disapprove a DOT grant approval.", "While not an explicit focus of federal freight programs, it can be argued that projects that do not serve freight directly can reduce traffic in areas where infrastructure is shared between passengers and freight, freeing up roadway capacity and alleviating some impacts of congestion. For example, reconstruction of the Memorial Bridge in Washington, DC, was partially funded by a $90 million FASTLANE grant in 2016. This bridge is not currently open to trucks, but supporters of the project argued that returning the infrastructure to a state of good repair for use by passenger vehicles would relieve congestion on other crossings of the Potomac River used by freight carriers. "], "subsections": []}]}, {"section_title": "Implementation of Provisions in MAP-21 and FAST", "paragraphs": [], "subsections": [{"section_title": "National Freight Strategic Plan", "paragraphs": ["In October 2015, DOT published a draft National Freight Strategic Plan, fulfilling one of the requirements of MAP-21 (three months after the deadline initially set by law). A comment period would have required a final version of that plan to be released by December 2016, but the passage of the FAST Act in the interim updated the requirements of the National Freight Strategic Plan with a new deadline of December 2017; DOT opted to complete the document required by the FAST Act rather than continue updating the MAP-21 strategic plan, now superseded. As of year-end 2018, this requirement of the FAST Act had not been met."], "subsections": []}, {"section_title": "Conditions and Performance Reports", "paragraphs": ["The Federal Highway Administration Conditions and Performance Report released in May 2018 was the first to fulfill the requirement of Section 1116 of the FAST Act to report specifically on the conditions of the National Highway Freight Network. This report found that in 2014, 77% of network mileage had \"good\" pavement, while 19% of miles were graded \"fair\" and the remaining 4% \"poor.\" The report also found that there are approximately 57,600 bridges on the network, of which 4.3% are structurally deficient. The report contains measures of congestion at the 25 most congested points in the freight network, and for key freight corridors, generally dealing with speed and trip times. Since this is the first report to contain these figures, it can be used as a baseline to assess whether the condition and functioning of the network are improving over time. ", "The FAST Act also required DOT to report on the conditions and performance of the National Multimodal Freight Network, but as this network has not yet been defined, no report has been issued."], "subsections": []}]}, {"section_title": "Financing Initiatives", "paragraphs": ["The federal government supports surface transportation projects mostly through funds distributed to the states. Financing initiatives, on the other hand, are arrangements that rely primarily on borrowing. The federal government supports freight infrastructure financing arrangements mainly through direct loans, loan guarantees, and tax preferences for certain types of bonds. The FAST Act created a new Surface Transportation Infrastructure Finance Bureau to consolidate some of the support functions for several of these programs. "], "subsections": [{"section_title": "TIFIA Program", "paragraphs": ["The Transportation Infrastructure Finance and Innovation Act (TIFIA) program provides loans for highway projects, public or private freight rail facilities providing intermodal transfer, infrastructure providing access to intermodal freight facilities, and surface transportation improvements facilitating intermodal transfers or improved access at port terminals. Since FY1999, according to DOT, TIFIA financing for all types of projects amounted to $30.1 billion. This assistance was provided to 77 projects that have a total cost of $108.4 billion. Highway and freight projects account for approximately 60% of TIFIA assistance. The largest project specifically related to freight, receiving a $341 million TIFIA loan, is the Port of Miami Tunnel, which opened August 3, 2014, to improve truck access to and from the port.", "The FAST Act provided a total of $1.435 billion for TIFIA loans, including $300 million in each of FY2019 and FY2020. Because the government expects most of the loans to be repaid, the program's funding need only cover the subsidy cost of credit assistance and administrative costs. According to the Federal Credit Reform Act of 1990, Title XIII, Subtitle B of the Omnibus Budget Reconciliation Act of 1990 ( P.L. 101-508 ), the subsidy cost is \"the estimated long-term cost to the government of a direct loan or a loan guarantee, calculated on a net present value basis, excluding administrative costs.\" Consequently, the loan capacity of the TIFIA program is much larger than the budget authority available. DOT estimates that since each dollar of funding has historically allowed TIFIA to provide $14 in credit assistance, FAST Act funding levels could allow for up to $20 billion in total credit assistance over the life of the law."], "subsections": []}, {"section_title": "RRIF Program", "paragraphs": ["The Railroad Rehabilitation and Improvement Financing (RRIF) program provides loans and loan guarantees for rail infrastructure and equipment through the Federal Railroad Administration up to a total of $35 billion of unpaid principal, with $7 billion reserved for Class II and III railroads. Direct loans can be up to 100% of a project's cost and for a maximum term of 35 years. Interest is charged at the rate paid by the U.S. Treasury to issue bonds of a similar maturity. Eligible borrowers are state and local governments, government-sponsored authorities and corporations, railroads, joint ventures that include at least one railroad, freight rail shippers served by one railroad wanting to connect a facility to a second railroad, and interstate compacts. ", "The RRIF program does not receive an appropriation from Congress, but allows project sponsors to pay the subsidy cost (termed the credit risk premium ). FRA evaluates applications for RRIF loans in terms of each applicant's creditworthiness and the value of collateral offered to secure the loan. These factors determine the credit risk premium.", "Since 2002, there have been 40 loan agreements totaling $6.3 billion. Loans for freight railroads have ranged in size from $234 million, made to the Dakota Minnesota and Eastern Railroad in 2004, to $56,000, made in 2011 to C&J Railroad. Loans are typically relatively small; while the mean size of a loan is $142 million, the median is $21 million. While Class II and Class III freight operators have received most of the loans, the largest loans by value have gone to Amtrak or commuter railroads. A 2018 loan for $6 million to the Port of Everett, WA, the first extended to a port authority, is to be used to increase rail freight capacity.", "Similar to the TIGER/BUILD program, many projects financed by TIFIA or RRIF loans may benefit passengers as well as freight."], "subsections": []}]}]}, {"section_title": "Issues and Options for Congress", "paragraphs": [], "subsections": [{"section_title": "Funding Needs in Freight Infrastructure", "paragraphs": ["In reauthorizing federal surface transportation programs, the primary freight-related issues before Congress are likely to be setting funding levels and, if necessary, raising revenue. Key questions include whether there should be a dedicated revenue stream for freight-related purposes and whether additional federal funding should be dedicated to freight projects selected by DOT rather than distributed by formula for spending at the discretion of the states. "], "subsections": [{"section_title": "Goods Movement Charges", "paragraphs": ["One idea that has come before Congress is the creation of a new dedicated revenue stream for freight infrastructure, funded not by the motor fuels taxes that fund most federal surface transportation spending, but by a charge on goods movement. Under one such proposal, which was introduced in the 113 th , 114 th , and 115 th Congresses but not passed, a 1% tax would be assessed on the cost of freight shipments, with the revenue deposited in a new trust fund. A National Freight Program would then distribute these funds to states by formula for exclusive use for freight projects. A similar proposal would reserve 5% of the import duties collected by Customs and Border Patrol for freight purposes, directing the money into a Freight Trust Fund. ", "Proposals for taxes and fees on freight traffic have been raised before, including taxes based on trucking charges, a combined weight-distance or ton-mile tax such as those assessed already by certain states, and a tax on every maritime container imported and exported. Some proponents have advocated such fees specifically to raise money for freight-related projects, while others see them as a means of raising additional sums for general surface transportation use. "], "subsections": []}, {"section_title": "Tolls", "paragraphs": ["Existing law generally permits tolling of existing federal-aid highways only when they are rebuilt or replaced. In the case of Interstate Highways, the existing non-tolled lane count must be maintained, even if the facility is reconstructed (with exceptions for some toll roads that predate the Interstate System). In 1998, Congress created the Interstate System Reconstruction and Rehabilitation Pilot Program, allowing up to three states to toll Interstate segments in order to repair or rehabilitate them. One of the states accepted into the pilot program, Missouri, considered reconstructing 200 miles of Interstate 70 to include two truck-only lanes in each direction, with the entire project to be funded by tolls. The proposal encountered strong resistance in the state and is no longer being pursued. The other states participating in the pilot program, Virginia and North Carolina, also did not undertake proposed projects. The only other way an existing toll-free federal-aid highway (including non-tolled existing Interstate Highway lanes) may be converted is under the Value Pricing Pilot Program, a separate program established in 1991 that is designed primarily to mitigate congestion.", "Congress has no direct control over the decision to impose highway tolls, which is up to the state or local entity that owns the infrastructure. It could, however, widen the circumstances under which states are permitted to toll Interstate Highways. Tolls could provide a source of funding for freight-related projects. Trucking interests generally oppose additional tolling, especially truck-only tolling, largely out of concern that political considerations will make it easier to raise tolls on trucks than on cars, and prefer higher motor fuels taxes to fund highway improvements. Studies have concluded that funding highways with motor fuels taxes provides trucks a cross-subsidy from automobile users' gas tax payments, due to the fact that the wear and tear caused by a heavy truck is much greater than that caused by a light vehicle."], "subsections": []}]}, {"section_title": "Addressing Congestion", "paragraphs": ["Growth in freight and passenger transportation demand has brought an increase in truck and rail congestion. This congestion is particularly pronounced in major urban areas that contain important freight hubs such as ports, airports, border crossings, and rail yards. Many of the trucks delayed may be simply passing through the region rather than serving local shippers. As identified by DOT, the 25 most congested segments for trucks are generally urban Interstate Highway interchanges. ", "The most recent rankings published by DOT are based on 2014 data, so the impact of FAST Act programs on alleviating freight bottlenecks has not yet been assessed. However, a number of metropolitan areas have been at or near the top of the congestion list for several consecutive years. Five of the 25 most congested segments are in Houston and two are in each of Chicago, Atlanta, Los Angeles, Seattle, and Cincinnati. While the rankings of individual cities can fluctuate, 13 interchanges have been listed among the top 20 most congested for at least the last five years. The interchange of I-290 and I-90/94 in Chicago has ranked no better than second-worst since 2010, and the interchange of I-95 and SR 4 in Fort Lee, NJ, just outside New York City, has ranked no better than fourth-worst. A trucking industry study estimates that 86% of the total costs of congestion for trucks are concentrated on 17% of Interstate Highway mileage. ", "Similarly, the projected increase in highway freight traffic over the coming decades is not likely to be uniformly distributed across the nation's highways. Segments of the Interstate Highway system that are projected to see an increase of more than 10,000 trucks per day are spread out over parts of 15 states (see Figure 2 ). This is roughly equivalent to an additional truck traveling on a segment every 8.6 seconds. At the same time, many Interstate Highway segments are projected to have only small increases in truck traffic through 2045. The formula used to distribute most federal surface transportation funds to the states, including formula grants under the National Highway Freight Program, does not incorporate anticipated increases in truck traffic volume, meaning that the states expected to face the largest increases in truck traffic are not entitled to greater federal funding to address capacity constraints. ", "As Figure 2 indicates, the largest increases in truck traffic are expected to occur where Interstates intersect, but also along stretches of highway that connect busy nodes to each other. For example, a stretch of I-40 in Arkansas, connecting Little Rock to Memphis, TN, is one such segment. The nature of interstate commerce means that much of the truck traffic using this highway may simply be crossing Arkansas rather than moving freight to or from businesses in Arkansas. Although only Arkansas can use its federal highway funds to increase the capacity of the road, much of the benefit from such a project would likely accrue to other states, potentially limiting Arkansas's incentive to undertake the work. ", "One way for Congress to address this situation would be to adjust the methodology for calculating each state's apportionment of funds distributed under the National Highway Freight Program to consider freight-related metrics. The NHFP currently takes into account each state's share of National Highway Freight Network miles. The dedicated freight funding proposals introduced in the 113 th , 114 th , and 115 th Congresses, discussed above, would have incorporated several other measures intended to reflect a state's importance to the national freight system into the distribution formula. These would have included each state's share of the nation's ports, miles of freight rail track, cargo-handling airports, freight tonnage, and freight value relative to the national total.", "Instead of adjusting formula programs to reflect freight-related needs, Congress has provided DOT with discretionary funds it can distribute for freight and other purposes through the INFRA and BUILD grant programs. These programs have proven to be popular and routinely receive applications for more funding than they can make available, but they have also been criticized for lacking transparent processes for project selection and for funding projects that may not have the highest estimated benefit/cost ratios. A 2017 Government Accountability Office report concluded that the INFRA (then known as FASTLANE) application review process allowed for broad discretion during certain team reviews, and that certain large projects were forwarded to the Secretary of Transportation for approval even if they did not initially meet certain statutory requirements.", "A third approach would be to direct spending congressionally. From the start of the 112 th Congress in 2011 until the end of the 115 th Congress in January 2019, the House and Senate observed a ban on congressionally directed spending, also known as earmarking. The earmark ban effectively blocked Members of Congress from inserting language in authorization or appropriations bills to designate funds for specific freight-related projects, as frequently occurred prior to 2011. The ban was established through rules adopted by the House Republican Conference, the Senate Republican Conference, and the Senate Appropriations Committee. The Democratic Party majority that has controlled the House since January 2019 has not adopted similar language, and it is unclear whether earmarks are permitted in proposed legislation in that chamber. "], "subsections": []}, {"section_title": "Research, Development, and Technology", "paragraphs": [], "subsections": [{"section_title": "Freight Performance Data and Statistics", "paragraphs": ["Because freight infrastructure decisions are often made at the state or local level, it would be helpful for transportation planners to know the characteristics of the trucks traveling particular highway segments. Information about the industries served, the origin and destination of the shipments, and daily or seasonal variations in volume could help planners identify freight users that share an economic interest in mitigating a bottleneck or determine the feasibility of moving some of the traffic to off-peak hours or to other modes.", "DOT's Bureau of Transportation Statistics and the Census Bureau conduct a survey of shippers every five years (the Commodity Flow Survey cited in Table 1 ) that provides information on outbound shipments. However, the sample size is not sufficient to provide reliable data for any specific urban area. The survey does not record through traffic, does not distinguish between imports and domestic freight, and occurs too infrequently to identify trends in freight patterns. The survey was designed more to provide a national picture of freight transport than to meet local or regional needs. In the FAST Act, Congress requested DOT to \"... consider any improvements to existing freight flow data collection efforts that could reduce identified freight data gaps and deficiencies....\" A policy decision for Congress is whether the federal government should be responsible for providing adequate freight data for state and local transportation planners."], "subsections": []}, {"section_title": "Autonomous Vehicles", "paragraphs": ["Autonomous vehicle technology has potential applications in the freight sector. Autonomous trucks potentially offer significant freight transportation savings, as driver compensation represents either the largest or second-largest cost component for truck carriers, depending on the price of fuel. Fuel and driver compensation typically each account for about one-third of total operating costs. A truck driver may not drive for more than 11 hours per day under federal regulations, so it is difficult for carriers to improve labor productivity except by using larger trucks. Because driver error is the overwhelming cause of vehicle accidents, automation that reduces accident rates could improve public safety. Also, long-distance truck carriers experience exceptionally high driver turnover, and automation may reduce the need for drivers. ", "Despite the economic motivation, many in the trucking industry doubt whether driverless trucks are feasible in the foreseeable future given the current horizon of autonomous technology. An alternative scenario, at least for the next decade or two, is that truck driver jobs may come to resemble those of airline pilots in that drivers would spend part of their time monitoring an autonomous driving system rather than directly controlling the vehicle at all times. The skills of truck drivers when backing up an 18-wheeler to a warehouse or driving on local roads may be irreplaceable. In addition, some carriers may not be eager to forgo personal contact between drivers and customers, which may create sales opportunities.", "The 115 th Congress debated federal policy regarding autonomous vehicle technology at length. H.R. 3388 , passed by the House, sought to establish new rules for testing and adoption of autonomous technology for cars and light trucks, but had no provisions pertaining to commercial vehicles. In the Senate, S. 1885 would have subjected commercial vehicles to the same safety evaluation requirements as private vehicles. Neither measure was enacted, but in debating these bills, Congress evaluated to what extent federal policy should assist autonomous vehicle technology by granting exemptions to certain federal requirements that otherwise would impede testing and demonstrations of these vehicles. Congress also considered preempting states from issuing certain regulations that are contrary to federal regulations or contrary to other states' regulations in order to avoid differing state requirements.", "These provisions were relevant to a technology being tested in the trucking industry known as \"platooning.\" In a platoon, trucks follow each other closely enough to save fuel by reducing drag at high speeds (around 10% for a following truck and 5% for the lead truck). All the trucks in a platoon have drivers, but only the driver of the lead truck is in full control of the vehicles. The drivers in the following trucks steer their vehicles, but their feet are off the accelerator and brake because truck speed is controlled by wireless communication from the lead truck. This communication reduces the braking response times of the following trucks and therefore allows trucks to follow closely enough to significantly reduce wind resistance. Absent federal legislation, it is possible that states would enact conflicting limits on platooning, reducing its utility in interstate commerce."], "subsections": []}, {"section_title": "What About Hyperloop?", "paragraphs": ["Congress may also be asked to support a technology known as Hyperloop, which proposes the use of pods or sleds to transport containers in vacuum-sealed tubes at high speed. While this technology has gone through some testing, it has not yet been commercially deployed. Hyperloop projects are not currently eligible for funding under surface transportation formula grant programs or any of DOT's discretionary grant programs, which are limited to road, rail, and some port projects. ", "There is no federal program dedicated solely to research and development of freight-specific technology. The federal government supports research and development of some surface transportation technologies through the Highway Research and Development Program (23 U.S.C. \u00a7503(b)) and the Technology and Innovation Deployment Program (23 U.S.C. \u00a7503(c)). The FAST Act currently authorizes $250 million and $135 million, respectively, for these programs through FY2020. "], "subsections": []}]}]}]}}
{"id": "RS21232", "title": "Grazing Fees: Overview and Issues", "released_date": "2019-03-04T00:00:00", "summary": ["Charging fees for grazing private livestock on federal lands is a long-standing but contentious practice. Generally, livestock producers who use federal lands want to keep fees low, whereas conservation groups believe fees should be increased. The current formula for determining the grazing fee for lands managed by the Bureau of Land Management (BLM) and the Forest Service (FS) was established in the Public Rangelands Improvement Act of 1978 (PRIA) and continued by a 1986 executive order issued by President Reagan. The fee is based on grazing of a specified number of animals for one month, known as an animal unit month (AUM). The fee is set annually under a formula that uses a base value per AUM. The base value is adjusted by three factors\u2014the lease rates for grazing on private lands, beef cattle prices, and the cost of livestock production.", "For 2019, BLM and FS are charging a grazing fee of $1.35 per AUM. This fee is in effect from March 1, 2019, through February 29, 2020, and is the minimum allowed. Since 1981, when BLM and FS began charging the same grazing fee, the fee has ranged from $1.35 per AUM (for about half the years) to $2.31 per AUM (for 1981). The average fee during the period was $1.55 per AUM. In recent decades, grazing fee reform has occasionally been considered by Congress or proposed by the President, but no fee changes have been adopted.", "The grazing fees collected by each agency essentially are divided between the agency, Treasury, and states/localities. The agency portion is deposited in a range betterment fund in the Treasury and is subject to appropriation by Congress. The agencies use these funds for on-the-ground activities, such as range rehabilitation and fence construction. Under law, BLM and FS allocate the remaining collections differently between the Treasury and states/localities.", "Issues for Congress include whether to retain the current grazing fee or alter the charges for grazing on federal lands. The current BLM and FS grazing fee is generally lower than fees charged for grazing on state and private lands. Comparing the BLM and FS fee with state and private fees is complicated, due to factors including the purposes for which fees are charged, the quality of the resources on the lands being grazed, and whether the federal grazing fee alone or other nonfee costs are considered.", "Unauthorized grazing occurs on BLM and FS lands in a variety of ways, including when cattle graze outside the allowed areas or seasons or in larger numbers than allowed under permit. In some cases, livestock owners have intentionally grazed cattle on federal land without getting a permit or paying the required fee. The agencies have responded at times by fining the owners, as well as by impounding and selling the trespassing cattle. BLM continues to seek a judicial resolution to a long-standing controversy involving cattle grazed by Cliven Bundy on lands in Nevada.", "There have been efforts to end livestock grazing in specific areas through voluntary retirement of permits and leases and subsequent closure of the allotments to grazing. Congress has enacted some such proposals. Congress also has considered measures to reduce or end grazing in specified states or to allow a maximum number of permits to be waived yearly. Among other reasons, such measures have been supported to protect range resources but opposed as diminishing ranching operations.", "Another issue involves expiring grazing permits. Both BLM and FS have a backlog of permits needing evaluation for renewal. To allow for continuity in grazing operations, P.L. 113-291 made permanent the automatic renewal (until the evaluation process is complete) of permits and leases that expire or are transferred. The law provided that the issuance of a grazing permit \"may\" be categorically excluded from environmental review under the National Environmental Policy Act (NEPA) under certain conditions. NEPA categorical exclusions have been controversial."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Charging fees for grazing private livestock on federal lands is statutorily authorized and has been the policy of the Forest Service (FS, Department of Agriculture) since 1906, and of the Bureau of Land Management (BLM, Department of the Interior) since 1936. Today, fees are charged for grazing on BLM and FS land basically under a fee formula established in the Public Rangelands Improvement Act of 1978 (PRIA) and continued administratively. ", "BLM manages a total of 245.7 million acres, primarily in the West. Of total BLM land, 154.1 million acres were available for livestock grazing in FY2017. The acreage used for grazing during 2017 was 138.7 million acres. FS manages a total of 192.9 million acres. Although this land is predominantly in the West, FS manages more than half of all federal lands in the East. Of total FS land, more than 93 million acres were available for grazing in FY2017, with 74 million used for livestock grazing. For both agencies, the acreage available for livestock grazing reflects lands within grazing allotments. However, the acreage in those allotments that is capable of forage production is substantially less, according to the FS, because some lands lack forage (e.g., are forested or contain rockfalls). In addition, for both agencies, acreage used for grazing is less than the acreage available due to voluntary nonuse for economic reasons, resource protection needs, and forage depletion caused by drought or fire, among other reasons. Because BLM and FS are multiple-use agencies, lands available for livestock grazing generally are also available for other purposes.", "On BLM rangelands, in FY2017, there were 16,357 operators authorized to graze livestock, and they held 17,886 grazing permits and leases. Under these permits and leases, a maximum of 12,333,568 animal unit months (AUMs) of grazing potentially could have been authorized for use. Instead, 8,820,617 AUMs were authorized for use. BLM defines an AUM, for fee purposes, as a month's use and occupancy of the range by one animal unit, which includes one yearling, one cow and her calf, one horse, or five sheep or goats. ", "On FS rangelands, in FY2017, there were 5,725 permit holders permitted (i.e., allowed) to graze commercial livestock, with a total of 6,146 active permits. A maximum of 8,238,429 head-months (HD-MOs) of grazing were under permit and thus potentially could have been authorized for use. Instead, 6,803,425 HD-MOs were authorized for use. FS uses HD-MO as its unit of measurement for use and occupancy of FS lands. This measurement is nearly identical to AUM as used by BLM for fee purposes. Hereinafter, AUM is used to cover both HD-MO and AUM. ", "BLM and FS are charging a 2019 grazing fee of $1.35 per AUM. This annual fee is in effect from March 1, 2019, through February 29, 2020. This is the minimum fee allowed. (See \" The Fee Formula \" section, below.) BLM and FS typically spend more managing their grazing programs than they collect in grazing fees. For example, $79.0 million was appropriated to BLM for rangeland management in FY2017. Of that amount, $32.4 million was used for administration of livestock grazing, according to the agency. The remainder was used for other range activities, i ncluding weed management, habitat improvement, and water development. For the same fiscal year, BLM collected $18.3 million in grazing fees. The FY2017 appropriation for FS for grazing management was $56.9 million. The funds are used primarily for grazing permit administration and planning. FS collected $7.6 million in grazing fees during FY2017. ", "Grazing fees have been contentious since their introduction. Generally, livestock producers who use federal lands want to keep fees low. They assert that federal fees are not comparable to fees for leasing private rangelands because public lands often are less productive; must be shared with other public users; and often lack water, fencing, or other amenities, thereby increasing operating costs. They fear that fee increases may force many small and medium-sized ranchers out of business. Conservation groups generally assert that low fees contribute to overgrazing and deteriorated range conditions. Critics assert that low fees subsidize ranchers and contribute to budget shortfalls because federal fees are lower than private grazing land lease rates and do not cover the costs of range management. They further contend that, because some of the collected fees are used for range improvements, higher fees could enhance the productive potential and environmental quality of federal rangelands."], "subsections": []}, {"section_title": "Current Grazing Fee Formula and Distribution of Receipts", "paragraphs": [], "subsections": [{"section_title": "The Fee Formula", "paragraphs": ["The fee charged by BLM and FS is based on the grazing on federal rangelands of a specified number of animals for one month. PRIA establishes a policy of charging a grazing fee that is \"equitable\" and prevents economic disruption and harm to the western livestock industry. The law requires the Secretaries of Agriculture and the Interior to set a fee annually that is the estimated economic value of grazing to the livestock owner. The fee is to represent the fair market value of grazing, beginning with a 1966 base value of $1.23 per AUM. This value is adjusted for three factors based on costs in western states of (1) the rental charge for pasturing cattle on private rangelands, (2) the sales price of beef cattle, and (3) the cost of livestock production. Congress also established that the annual fee adjustment could not exceed 25% of the previous year's fee.", "PRIA required a seven-year trial (1979-1985) of the formula while BLM and FS undertook a study to help Congress determine a permanent fee or fee formula. President Reagan issued Executive Order 12548 (February 14, 1986) to continue indefinitely the PRIA fee formula, and established the minimum fee of $1.35 per AUM. ", "The 2019 grazing fee of $1.35 per AUM represents a 4% decrease from the 2018 fee. Since 1981, BLM and FS have been charging the same fee, as shown in Table 1 . The fee has ranged from $1.35 per AUM (for about half of the years during the 39-year period) to $2.31 per AUM (for 1981). The fee averaged $1.55 per AUM over the period. "], "subsections": []}, {"section_title": "Distribution of Receipts", "paragraphs": ["Fifty percent of grazing fees collected by each agency, or $10.0 million\u2014whichever is greater\u2014go to a range betterment fund in the Treasury. BLM and FS grazing receipts are deposited separately. Monies in the fund are subject to appropriations. BLM typically has requested and received an annual appropriation of $10.0 million for the fund. FS generally requests and receives an appropriation that is less than the $10.0 million minimum authorized in law. For instance, for FY2017, the agency received an appropriation of $4.2 million, roughly half the fees collected.", "The agencies use the range betterment fund for range rehabilitation, protection, and improvement, including grass seeding and reseeding, fence construction, weed control, water development, and fish and wildlife habitat. Under law, one-half of the fund is to be used as directed by the Secretary of the Interior or of Agriculture, and the other half is authorized to be spent in the district, region, or forest that generated the fees, as the Secretary determines after consultation with user representatives. Agency regulations contain additional detail. For example, BLM regulations provide that half of the fund is to be allocated by the Secretary on a priority basis, and the rest is to be spent in the state and district where derived. Forest Service regulations provide that half of the monies are to be used in the national forest where derived, and the rest in the FS region where the forest is located. In general, FS returns all range betterment funds to the forest that generated them.", "The agencies allocate the remaining 50% of the collections differently. For FS, 25% of the funds are deposited in the Treasury and 25% are subject to revenue-sharing requirements. The revenue-sharing payments are made to states, but the states do not retain any of the funds. The states pass the funds to specified local governmental entities for use at the county level (16 U.S.C. \u00a7500; see Figure 1 ). For BLM, states receive 12.5% of monies collected from lands defined in Section 3 of the Taylor Grazing Act and 37.5% is deposited in the Treasury. Section 3 lands are those within grazing districts for which BLM issues grazing permits. (See Figure 2 .) By contrast, states receive 50% of fees collected from BLM lands defined in Section 15 of the Taylor Grazing Act. Section 15 lands are those outside grazing districts for which BLM leases grazing allotments. (See Figure 3 .) For both agencies, any state share is to be used to benefit the counties that generated the receipts."], "subsections": []}]}, {"section_title": "History of Fee Evaluation and Reform Attempts", "paragraphs": ["PRIA directed the Interior and Agriculture Secretaries to report to Congress, by December 31, 1985, on the results of their evaluation of the fee formula and other grazing fee options and their recommendations for implementing a permanent grazing fee. The Secretaries' report included (1) a discussion of livestock production in the western United States; (2) an estimate of each agency's cost for implementing its grazing programs; (3) estimates of the market value for public rangeland grazing; (4) potential modifications to the PRIA formula; (5) alternative fee systems; and (6) economic effects of the fee system options on permittees. A 1992 revision of the report updated the appraised fair market value of grazing on federal rangelands, determined the costs of range management programs, and recalculated the PRIA base value through the application of economic indexes. The study results, criticized by some as using faulty evaluation methods, were not adopted.", "In the 1990s, grazing fee reform was considered by Congress but no change was enacted. In particular, in the 104 th Congress (1995-1996), the Senate passed a bill to establish a new grazing fee formula and alter rangeland regulations. The formula was to be derived from the three-year average of the total gross value of production for beef and no longer indexed to operating costs and private land lease rates, as under PRIA. By one estimate, the measure would have resulted in an increase of about $0.50 per AUM. In the 105 th Congress (1997-1998), the House passed a bill with a fee formula based on a 12-year average of beef cattle production costs and revenues. The formula would have resulted in a 1997 fee of about $1.84 per AUM. Since the 1990s, it appears that no major bills to alter the grazing fee have passed the chambers. ", "Also in the 1990s\u2014and in subsequent years\u2014certain Presidents proposed changes to grazing fees and related policies. However, these changes were not adopted. As one example, in 1993, the Clinton Administration proposed an administrative increase in the fee and revisions of other grazing policies. The proposed fee formula started with a base value of $3.96 per AUM and was to be adjusted to reflect annual changes in private land lease rates in the West (called the Forage Value Index). The current PRIA formula is adjusted using multiple indexes. As a second example, for some fiscal years (e.g., FY2008), President George W. Bush proposed terminating the deposit of 50% of BLM's grazing fees into the range betterment fund. The fee collections would have gone instead to the General Fund of the U.S. Treasury. As a third example, for some fiscal years, President Obama proposed a grazing administrative fee for BLM and FS (e.g., of $1.00 per AUM in FY2015 and $2.50 per AUM in FY2017). These administrative fees would have been additional to the annual grazing fee, and the agencies would have used them to offset the cost of administering the livestock grazing programs. "], "subsections": []}, {"section_title": "Current Issues", "paragraphs": [], "subsections": [{"section_title": "Fee Level", "paragraphs": ["There is ongoing debate about the appropriate grazing fee, with several key areas of contention. First, there are differences over which criteria should prevail in setting fees: fair market value; cost recovery (whereby the monies collected would cover the government's cost of running the program); sustaining ranching, or resource-based rural economies generally; or diversification of local economies. Second, there is disagreement over the validity of fair market value estimates for federal grazing because federal and private lands for leasing are not always directly comparable. Third, whether to have a uniform fee, or varied fees based on biological and economic conditions, is an area of debate. Fourth, there are diverse views on the environmental costs and benefits of grazing on federal lands and on the environmental impact of changes in grazing levels. Fifth, it is uncertain whether fee increases would reduce the number of cattle grazing on sensitive lands, such as riparian areas. Sixth, some environmentalists assert that the fee is not the main issue, but that all livestock grazing should be barred to protect federal lands. ", "As noted, there have been proposals to alter the grazing fee in recent years, but these proposals have not been adopted. For example, the Obama Administration's proposed grazing administration fee of $2.50 per AUM in 2017 would have been in addition to the annual fee of $2.11 per AUM. The monies would have been used for administering grazing to shift a portion of the costs to permit holders. Use of the fees would have been subject to appropriations. BLM estimated that the proposed administrative fee would have generated $16.5 million in FY2017, and FS estimated revenues of $15.0 million in FY2017. Livestock organizations, among others, opposed the proposal as an unnecessary and burdensome cost for the livestock industry. The Administration had included similar proposals in earlier budget requests; none of these proposals were enacted.", "As another example, in 2005, several groups petitioned BLM and FS to raise the grazing fees, asserting that the fees did not reflect the fair market value of federal forage. When the agencies did not respond to the petition, the groups sued. In addition to asserting that BLM and FS unreasonably delayed response to their petition, the petitioners argued that the agencies were required to conduct a study under the National Environmental Policy Act (NEPA) to determine the environmental impacts of the current grazing fee rate. In January 2011, BLM and FS responded to the petition, denying the request for a fee increase, and the lawsuit was settled. "], "subsections": []}, {"section_title": "State and Private Grazing Fees", "paragraphs": ["The BLM and FS grazing fee has generally been lower than fees charged for grazing on other federal lands as well as on state and private lands, as shown in studies over the past 15 years. For instance, a 2005 Government Accountability Office (GAO) study found that other federal agencies charged $0.29 to $112.50 per AUM in 2004, when the BLM and FS fee was $1.43 per AUM. While BLM and FS use a formula to set the grazing fee, most agencies charge a fee based on competitive methods or a market price for forage. Some seek to recover the costs of their grazing programs. GAO also reported that in 2004, state fees ranged from $1.35 to $80 per AUM and private fees ranged from $8 to $23 per AUM. ", "In 2010, when the BLM and FS fee was $1.35 per AUM, state grazing fees continued to show wide variation. They ranged from $2.28 per AUM for Arizona to $65-$150 per AUM for Texas. Moreover, some states did not base fees on AUMs, but rather had fees that were variable, were set by auction, were based on acreage of grazing, or were tied to the rate for grazing on private lands. Further, a 2018 study of state grazing fees in 11 western states continued to show widely differing fees, ranging from $3.50 per AUM for New Mexico to $65-$100 per AUM for Texas. Fees for these states were higher than the 2018 BLM and FS fee ($1.41 per AUM). ", "For grazing on private lands in 2017, the average monthly lease rate for lands in 16 western states was $23.40 per head. Fees ranged from $11.50 in Oklahoma to $39.00 in Nebraska. For comparison, in 2017, the BLM and FS grazing fee was $1.87 per AUM.", "Comparing the BLM and FS grazing fee with state and private fees is complicated due to a number of factors. One factor is the varying purposes for which the fees are charged. Many states and private landowners seek market value for grazing. As noted above, PRIA established the BLM and FS fee in accordance with multiple purposes. They included preventing economic disruption and harm to the western livestock industry as well as being \"equitable\" and representing the fair market value of grazing. While the base fee originally reflected what was considered to be fair market value, the adjustments included in the formula have not resulted in fees comparable to state and private fees. According to GAO's 2005 study, \"it is generally recognized that while the federal government does not receive a market price for its permits and leases, ranchers have paid a market price for their federal permits or leases\u2014by paying (1) grazing fees; (2) nonfee grazing costs, including the costs of operating on federal lands, such as protecting threatened and endangered species (i.e., limiting grazing area or time); and (3) the capitalized permit value.\" Regarding the latter, the capitalized value of grazing permits typically is reflected in higher purchase prices that federal permit holders pay for their ranches. ", "A second factor is the quality of resources on the lands being grazed and the number and types of services provided by the landowners. For example, in its 2005 study, GAO noted advantages of grazing on private lands over federal lands. They included generally better forage and sources of water; services provided by private landowners, such as watering, fencing, feeding, veterinary care, and maintenance; the ability of lessees to sublease, thus generating revenue; and limited public access. With regard to state lands, the study indicated that states also typically limit public access to their lands, while the quality of forage and the availability of water are more comparable to federal lands. ", "A third factor is whether the federal grazing fee alone or other nonfee costs of operating on federal lands are considered in comparing federal and nonfederal costs. Some research suggests that ranchers might spend more to graze on federal lands than private lands when both fee and nonfee costs are considered. Nonfee costs relate to maintenance, herding, moving livestock, and lost animals, among other factors. "], "subsections": []}, {"section_title": "Grazing Without Paying Fees", "paragraphs": ["Unauthorized grazing occurs on BLM and FS lands in a variety of ways, including when cattle graze outside the allowed areas or seasons or in larger numbers than allowed under permit. According to GAO, the frequency and extent of unauthorized grazing is not known, because many cases are handled informally by agency staff. However, during the five-year period spanning 2010 to 2014, BLM and FS documented nearly 1,500 instances of unauthorized grazing, some of which involved the livestock owners having to pay penalties and, less frequently, livestock impoundment.", "In many cases the unauthorized grazing is unintentional, but in other cases livestock owners have intentionally grazed cattle on federal land without getting a permit or paying the required fee. The livestock owners have claimed that they do not need to have permits or pay grazing fees for various reasons, such as that the land is owned by the public; that the land belongs to a tribe under a treaty; or that other rights, such as state water rights, extend to the accompanying forage.", "A particularly long-standing controversy involves cattle grazed by Cliven Bundy in Nevada. After about two decades of pursuing administrative and judicial resolutions, in April 2014, BLM and the National Park Service began impounding Mr. Bundy's cattle on the grounds that he did not have authority to graze on certain federal lands and had not been paying grazing fees for more than 20 years. BLM estimated at that time that Mr. Bundy owed more than $1 million to the federal government (including grazing fees and trespassing fees) as a result of unauthorized grazing. However, the agencies ceased the impoundment of the cattle due to fears of confrontation between private citizens opposed to the roundup and federal law enforcement officials present during the impoundment. Mr. Bundy had not been paying grazing fees to the federal government primarily on the assertion that the lands do not belong to the United States but rather to the state of Nevada, and that his ancestors used the land before the federal government claimed ownership. However, courts determined that the United States owns the lands, enjoined Mr. Bundy from grazing livestock in these areas, and authorized the United States to impound cattle remaining in the trespass areas. BLM continues to seek to resolve the issue through the judicial process.", "BLM estimated that during the two decades prior to the 2014 intended impoundment of Mr. Bundy's cattle, the agency had impounded cattle about 50 times. The operation to remove Mr. Bundy's cattle from federal lands in Nevada was the biggest removal effort, in terms of the number of cattle and the area involved, according to BLM. \u00a0It was also one of the most controversial, in part because of the number and role of law enforcement officials and the temporary closures of land to conduct the impoundment."], "subsections": []}, {"section_title": "Voluntary Permit Retirement", "paragraphs": ["There have been efforts to end livestock grazing on certain federal lands through voluntary retirement of permits and leases and subsequent closure of the allotments to grazing. This practice is supported by those who view grazing as damaging to the environment, more costly than beneficial, and difficult to reconcile with other land uses. This practice is opposed by those who support ranching on the affected lands, fear a widespread effort to eliminate ranching as a way of life, or question the legality of the process. In some cases, supporters seek to have ranchers relinquish their permits to the government in exchange for compensation by third parties, particularly environmental groups. The third parties seek to acquire the permits through transfer, and advocate agency amendments to land use plans to permanently devote the grazing lands to other purposes, such as watershed conservation. ", "Legislation to authorize an end to grazing in particular areas through voluntary donations of the permits by the permit holders has been introduced in recent Congresses. These measures generally provide for the Secretary of the Interior and/or the Secretary of Agriculture to accept the donation of a permit, terminate the permit, and end grazing on the associated land (or reduce grazing where the donation involves a portion of the authorized grazing). Provisions authorizing such voluntary permit donations in specific areas have sometimes been enacted. ", "Other bills have sought to establish pilot programs for livestock operators to voluntarily relinquish permits and leases in particular states. Still other measures have proposed allowing the Secretary of the Interior and the Secretary of Agriculture to accept a certain number of waived permits, such as a maximum of 100 each year. Under both types of measures, when the Secretaries accept waived permits, they would permanently retire such permits and leases and end grazing on the affected allotments (or reduce grazing where the relinquishment involves a portion of the authorized grazing). Provisions authorizing such pilot programs for particular states or authorizing acceptance of a certain number of waived permits have not been enacted. ", "In earlier Congresses, legislation was introduced to buy out grazing permittees (or lessees) on federal lands generally or on particular allotments. Such legislation provided that permittees who voluntarily relinquished their permits would be compensated at a certain dollar value per AUM, generally significantly higher than the market rate. The allotments would have been permanently closed to grazing. Such legislation, which had been backed by the National Public Lands Grazing Campaign, was advocated to enhance resource protection, resolve conflicts between grazing and other land uses, provide economic options to permittees, and save money. According to proponents, while a buyout program would be costly if all permits were relinquished, it would save more than the cost over time. Opponents of buyout legislation include those who support grazing, others who fear the creation of a compensable property right in grazing permits, some who contend that it would be too costly, or still others who support different types of grazing reform."], "subsections": []}, {"section_title": "Extension of Expiring Permits", "paragraphs": ["The extension, renewal, transfer, and reissuance of grazing permits have been issues for Congress. Both BLM and FS have a backlog of permits needing evaluation for renewal. For instance, BLM's backlog has been increasing for more than a decade, with a backlog of more than 7,000 permit renewals as of September 30, 2017. To allow for continuity in grazing operations, Congress had enacted a series of temporary provisions of law allowing the terms and conditions of grazing permits to continue in effect until the agencies complete processing of a renewal. The most recent provision, P.L. 113-291 (Section 3023), made permanent the automatic renewal (until the renewal evaluation process is complete) of grazing permits and leases that expire or are transferred.", "Agency decisions regarding permit issuance are subject to environmental review under the National Environmental Policy Act (NEPA). That environmental review would include the identification of any additional state, tribal, or federal environmental compliance requirements, such as the Endangered Species Act (ESA), that would apply to a permitted grazing operation. P.L. 113-291 provided that the issuance of a grazing permit \"may\" be categorically excluded from this NEPA requirement under certain conditions. Provisions regarding categorical exclusions have been controversial. Supporters assert that they will expedite the renewal process, foster certainty of grazing operations, and reduce agency workload and expenses. Opponents have expressed concern that categorical exclusions could result in insufficient environmental review and public comment to determine range conditions. "], "subsections": []}]}]}}
{"id": "RL33785", "title": "Runaway and Homeless Youth: Demographics and Programs", "released_date": "2019-03-26T00:00:00", "summary": ["This report discusses runaway and homeless youth, and the federal response to support this population. There is no single definition of the terms \"runaway youth\" or \"homeless youth.\" However, both groups of youth share the risk of not having adequate shelter and other provisions, and may engage in harmful behaviors while away from a permanent home.", "Youth most often cite family conflict as the major reason for their homelessness or episodes of running away. A youth's sexual orientation, sexual activity, school problems, and substance abuse are associated with family discord. The precise number of homeless and runaway youth is unknown due to their residential mobility and overlap among the populations. The U.S. Department of Housing and Urban Development (HUD) is supporting data collection efforts, known as Voices of Youth Count, to better determine the number of homeless youth. The 2017 study found that approximately 700,000 youth ages 13 to 17 and 3.5 million young adults ages 18 to 25 experienced homelessness within a 12-month period because they were sleeping in places not meant for habitation, in shelters, or with others while lacking alternative living arrangements.", "From the early 20th century through the 1960s, the needs of runaway and homeless youth were handled locally through the child welfare agency, juvenile justice courts, or both. The 1970s marked a shift toward federal oversight of programs that help youth who had run afoul of the law, including those who committed status offenses (i.e., a noncriminal act that is considered a violation of the law because of the youth's age). The Runaway Youth Act of 1974 was enacted as Title III of the Juvenile Justice and Delinquency Prevention Act (P.L. 93-415) to assist runaways through services specifically for this population. The act was amended over time to include homeless youth. It authorizes funding for services carried out under the Runaway and Homeless Youth Program (RHYP), which is administered by the U.S. Department of Health and Human Services (HHS). The program was most recently authorized through FY2020 by the Juvenile Justice Reform Act of 2018 (P.L. 115-385). This law did not make other changes to the RHYP statute. Funding is discretionary, meaning provided through the appropriations process. FY2019 appropriations are $127.4 million.", "The RHYP program is made up of three components: the Basic Center Program (BCP), Transitional Living Program (TLP), and Street Outreach Program (SOP). The BCP provides temporary shelter, counseling, and after care services to runaway and homeless youth under age 18 and their families. In FY2017, the program served 23,288 youth, and in FY2018 it funded 280 BCP shelters (most recent figures available). The TLP is targeted to older youth ages 16 through 22 (and sometimes an older age). In FY2017, the TLP program served 3,517 youth, and in FY2018 it funded 299 grantees (most recent figures available). Youth who use the TLP receive longer-term housing with supportive services. The SOP provides education, treatment, counseling, and referrals for runaway, homeless, and street youth who have been subjected to, or are at risk of being subjected to, sexual abuse, sex exploitation, and trafficking. In FY2017, the SOP grantees made contact with 24,366 youth.", "The RHYP is a part of larger federal efforts to end youth homelessness through the U.S. Interagency Council on Homelessness (USICH). The USICH is a coordinating body made up of multiple federal agencies committed to addressing homelessness. The USICH's Opening Doors plan to end homelessness includes strategies for ending youth homelessness by 2020, including through collecting better data and supporting evidence-based practices to improve youth outcomes. Voices of Youth Count is continuing to report on characteristics of homeless youth. In addition to the RHYP, there are other federal supports to address youth homelessness. HUD's Youth Homelessness Demonstration Program is funding a range of housing options for youth, in selected urban and rural communities. Other federal programs have enabled homeless youth to access services, including those related to education and family violence."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Running away from home is not a recent phenomenon. Folkloric heroes Huckleberry Finn and Davy Crockett fled their abusive fathers to find adventure and employment. Although some youth today also leave home due to abuse and neglect, they often endure far more negative outcomes than their romanticized counterparts from an earlier era. Without adequate and safe shelter, runaway and homeless youth are vulnerable to engaging in high-risk behaviors and further victimization. Youth who live away from home for extended periods may become removed from school and systems of support. Runaway and homeless youth are vulnerable to multiple problems while they are away from a permanent home, including untreated mental health disorders, drug use, and sexual exploitation. They also report other challenges including poor health and the lack of basic provisions.", "Congress began to hear concerns about the vulnerabilities of the runaway population in the 1970s due to increased awareness about these youth and the establishment of runaway shelters to assist them in returning home. Congress and the President went on to enact the Runaway Youth Act of 1974 as Title III of the Juvenile Justice and Delinquency Prevention Act ( P.L. 93-415 ) to assist runaways through services specifically for this population. Since that time, the law has been updated to authorize services to provide support for runaway and homeless youth outside of the juvenile justice, mental health, and child welfare systems. The Runaway Youth Act\u2014now known as the Runaway and Homeless Youth Act\u2014authorized federal funding to be provided through annual appropriations for three programs that assist runaway and homeless youth: the Basic Center Program (BCP), Transitional Living Program (TLP), and Street Outreach Program (SOP). Together, the programs make up the Runaway and Homeless Youth Program (RHYP), administered by the Family and Youth Services Bureau (FYSB) in the U.S. Department of Health and Human Services' (HHS) Administration for Children and Families (ACF).", "Basic Center Program: Provides funding to community-based organizations for crisis intervention, temporary shelter, counseling, family unification, and after care services to runaway and homeless youth under age 18 and their families. In some cases, BCP-funded programs may serve older youth. Over 31,000 youth participated in FY2016, the most recent year for which data are available. Transitional Living Program: Supports community-based organizations that provide homeless youth ages 16 through 22 with stable, safe, longer-term residential services up to 18 months (or longer under certain circumstances), including counseling in basic life skills, building interpersonal skills, educational advancement, job attainment skills, and physical and mental health care. Over 6,000 youth participated in FY2016. Street Outreach Program: Provides funding to community-based organizations for street-based outreach and education, including treatment, counseling, provision of information, and referrals for runaway, homeless, and street youth who have been subjected to, or are at risk of being subjected to, sexual abuse, sexual exploitation, prostitution, and trafficking. SOP grantees made contact with more than 36,000 youth in FY2016. ", "This report begins with an overview of the runaway and homeless youth population. It then describes the challenges in defining and counting this population, as well as the factors that influence homelessness and leaving home. The report also provides background on federal efforts to support runaway and homeless youth, including the evolution of federal policies to respond to these youth, with a focus on the period from the Runaway Youth Act of 1974 to the present time. The report then describes the administration and funding of the Basic Center, Transitional Living, and Street Outreach programs that were created from authorizations in the act. The appendixes include funding information for the BCP program and discuss other federal programs that may be used to assist runaway and homeless youth."], "subsections": []}, {"section_title": "Who Are Homeless and Runaway Youth?", "paragraphs": [], "subsections": [{"section_title": "Defining the Population", "paragraphs": ["There is no single federal definition of the terms \"homeless youth\" or \"runaway youth.\" However, HHS relies on definitions from the Runaway and Homeless Youth Act in administering the Runaway and Homeless Youth program: The act includes the following definitions:", "\"Homeless youth,\" for purposes of the BCP, includes individuals under age 18 (or some older age if permitted by state or local law) for whom it is not possible to live in a safe environment with a relative and who lack safe alternative living arrangements. \"Homeless youth,\" for purposes of the TLP, includes individuals ages 16 through 22 for whom it is not possible to live in a safe environment with a relative and who lack safe alternative living arrangements. Youth older than age 22 may participate if they entered the program before age 22 and meet other requirements. \"Runaway youth\" includes individuals under age 18 who absent themselves from their home or legal residence at least overnight without the permission of their parents or legal guardians.", "Separately, the McKinney-Vento Act authorizes several federal programs for homeless individuals that are administered by the U.S. Department of Housing and Urban Development (HUD). The definition of \"homeless individual\" in McKinney-Vento refers to \"unaccompanied youth,\" which applies to selected homelessness programs. HUD's related regulation defines an \"unaccompanied youth\" as someone under age 25 who meets the definition of \"homeless\" in the Runaway and Homeless Youth Act or other specified federal laws. The regulation also provides additional criteria, including that they have lived independently without permanent housing for at least 60 days. ", "The research literature discusses definitions of runaway and homeless youth. While studies have often categorized young people based on their status as runaways , homeless, or street youth , a 2011 report suggests that overlap exists between these categories. The authors of the study note that these \"typologies,\" or classifications, are too narrowly defined by the youth's housing status and reasons for homelessness, among other factors. The authors explain that typologies based on mental health status or age cohort are promising, but they suggest further research in this area to ensure that the typologies are accurate. "], "subsections": []}, {"section_title": "Demographics", "paragraphs": ["The precise number of homeless and runaway youth is unknown due to their residential mobility. These youth often eschew the shelter system for locations or areas that are not easily accessible to shelter workers and others who count the homeless and runaways. Youth who come into contact with census takers may also be reluctant to report that they have left home or are homeless. Determining the number of homeless and runaway youth is further complicated by the lack of a standardized methodology for counting the population and inconsistent definitions of what it means to be homeless or a runaway.", "Differences in methodology for collecting data on homeless populations may also influence how the characteristics of the runaway and homeless youth population are reported. Some studies have relied on point prevalence estimates that report whether youth have experienced homelessness at a given point in time, such as on a particular day. According to researchers that study the characteristics of runaway and homeless youth, these studies appear to be biased toward describing individuals who experience longer periods of homelessness."], "subsections": [{"section_title": "Annual Point-in-Time (PIT) Counts", "paragraphs": ["HUD requires communities receiving certain HUD funding to conduct annual point-in-time (PIT) counts of people experiencing homelessness, including homeless youth. The PIT counts include people living in emergency shelter, transitional housing, and on the street or other places not meant for human habitation. It does not include people who are temporarily living with family or friends. In the 2018 PIT count, communities identified 36,361 unaccompanied youth under age 25 (versus 40,799 in 2017) and another 8,724 under age 25 who were homeless parents (versus 9,434 in 2017). While PIT counts do not provide a confident estimate of youth experiencing homelessness across the country, they provide some information to communities about the potential scope of youth homelessness. "], "subsections": []}, {"section_title": "Voices of Youth Count", "paragraphs": ["The Reconnecting Homeless Youth Act ( P.L. 110-378 ), which renewed authorization of appropriations for the Runaway and Homeless Youth Program through FY2013, also authorized funding for HHS to conduct periodic studies of the incidence and prevalence of youth who have run away or are homeless. Separately, the accompanying conference report to the FY2016 appropriations law ( P.L. 114-113 ) directed HUD to use $2 million to conduct a national incidence and prevalence study of homeless youth as authorized under the Runaway and Homeless Youth program. HUD provided these funds to Chapin Hall at the University of Chicago to carry out the study. The study, known as Voices of Youth Count , used a nationally representative phone survey to derive national estimates and conducted brief surveys of youth and in-depth interviews of youth who had experiences of homelessness. The phone survey involved interviews with adults whose households had youth and young adults ages 13 to 25 and with adults ages 18 to 25. Voices of Youth Count estimated that approximately 700,000 youth ages 13 to 17 and 3.5 million young adults ages 18 to 25 had experienced homelessness within a one-year period, meaning they were sleeping in places not meant for human habitation, staying in shelters, or temporarily staying with others while lacking a safe and stable alternative living arrangement. This differs from the PIT counts because it includes individuals who are staying with others. The study also found that youth homelessness affected youth in rural and urban areas at similar levels. "], "subsections": []}, {"section_title": "Other Research", "paragraphs": ["A 2010 study on the lifetime prevalence of running away used longitudinal survey data of young people who were 12 to 18 years old when they were first interviewed about whether they had run away\u2014defined as staying away at least one night without their parents' prior knowledge or permission\u2014along with other behaviors. In subsequent years, youth who were under age 17 at their previous interview were asked if they had run away since their last interview. Youth who had ever run away were asked how many times they had done so and the age at which they first did. The study found that 19% of those who ran away did so before turning 18; females were more likely than males to run away; and among white, black, and Hispanic youth, black youth have the highest rate of ever running away. Youth who ran away reported that they did so about three times on average; however, about half of runaways had only run away once. Approximately half of the youth had run away before age 14. ", "A subset of runaway youth is those in foster care. In FY2017, over 500 children in the United States had run away from their foster care home or other placement. While this represents less than 1% of all children in foster care, running away is more prevalent among older youth in care. A study of over 50,000 youth ages 13 through 17 in 21 states indicated that 17% ran away at least once during their first time in foster care. The study found that female, black, and Hispanic youth were more likely to run away than male and white youth in care. The study further found that youth were more likely to run away from congregate care (i.e., group care) settings compared to other settings, such as living with a relative or in a foster family home. Youth were also more likely to run away from care if they lived in the most socioeconomically disadvantaged counties or lived in a state that lacked a process to screen youth on the risk of running away. States report on the characteristics and experiences of certain current and former foster youth through the National Youth in Transition Database (NYTD). Among other information, states must report data on cohorts of foster youth beginning when they are age 17, and later at ages 19 and 21. Among youth surveyed in FY2015 at age 21, about 43% reported having experienced homelessness."], "subsections": []}]}, {"section_title": "Factors Influencing Homelessness and Leaving Home", "paragraphs": ["Youth most often cite family conflict as the major reason for their homelessness or episodes of running away. According to the research literature, a youth's poor family dynamics, sexual activity, sexual orientation, pregnancy, school problems, and alcohol and drug use are strong predictors of family discord. One-third of callers who used the National Runaway Safeline in 2017\u2014a crisis call center funded under the Runaway and Homeless Youth Program for youth and their relatives involved in runaway incidents\u2014gave family dynamics (not defined) as the reason for their call. ", "Further, a longitudinal survey of middle school and high school youth examined the effects of family instability (e.g., child maltreatment, lack of parental warmth, and parent rejection) and other factors on the likelihood of running away from home approximately two to six years after youth were initially surveyed. Researchers found that youth with family instability were more likely to run away. Family instability also influenced problem behaviors, such as illicit drug use, which, in turn, were associated with running away. Researchers further determined that certain other effects (e.g., school engagement, neighborhood cohesiveness, physical victimization, and friends' support) were not strong predicators of whether youth in the sample ran away. In a study of youth who ran away from foster care between 1993 and 2003, the youth cited three primary reasons why they ran from foster care: to connect with their biological families, express their autonomy and find normalcy, and maintain relationships with nonfamily members. The Voices of Youth Count study found that certain youth ages 18 to 25 were at heightened risk of experiencing homelessness. This included youth with less than a high school diploma or GED; who were Hispanic or black; who were parenting and unmarried; or identified as lesbian, gay, bisexual, transgender, or questioning (LGBTQ). Gay and lesbian youth appear to be at greater risk for homelessness and are overrepresented in the homeless population, due often to experiencing negative reactions from their parents when they come out about their sexuality. The Voices of Youth Count study found that LGBTQ young adults ages 18 to 25 had more than twice the risk of being homeless than their heterosexual peers. LGBTQ youth made up about 20% of young adults who reported homelessness. In addition, a study involving LGBTQ young adults in seven cities found that the most common reason youth became homeless was due to being kicked out or asked to leave the home of a parent, relative, foster home, or group home. ", "Under an HHS grant, Youth with Child Welfare Involvement at Risk of Homelessness , the 18 grantees (state, local, and tribal child welfare agencies or community-based organizations) evaluated multiple risk factors for homelessness among child welfare-involved populations: which include those who have had numerous foster care placements, run away from foster care, been placed in a group home, had a history of mental health or behavioral health diagnoses, had juvenile justice involvement, had a history of substance abuse, been emancipated from foster care, and been parenting or fathered a child. "], "subsections": []}, {"section_title": "Challenges Associated with Running Away and Homelessness", "paragraphs": ["Runaway and homeless youth are vulnerable to multiple problems while they are away from a permanent home, including untreated mental health disorders, drug use, and sexual exploitation. Studies of homeless youth indicate that they are more likely to experience mental health and substance abuse disorders than their counterparts in the general population. A literature review of studies on psychiatric disorders among homeless youth found high prevalence of conduct disorders, major depression, psychosis, and other disorders. A study of participants in the Street Outreach Program found that about 6 out of 10 reported symptoms associated with depression and almost three-fourths reported that they had experienced major trauma, such as physical or sexual abuse or witnessing or being a victim of violence. Substance abuse is more prevalent among youth who live on the street, compared to homeless youth who are in shelters. Still, both groups of youth use alcohol or drugs at higher rates than their peers who live in family households, even after researchers control for demographic differences.", "While away from a permanent home, runaway and homeless youth are also vulnerable to sexual exploitation; sex and labor trafficking; and other victimization such as being beaten up, robbed, or otherwise assaulted. Some youth resort to illegal activity including stealing, exchanging sex for food or a place to stay, and selling drugs for survival. Runaway and homeless youth report other challenges including poor health and a lack of basic provisions."], "subsections": []}]}, {"section_title": "Evolution of Federal Policy", "paragraphs": ["Prior to the enactment of the Runaway Youth Act of 1974 (Title III, Juvenile Justice and Delinquency Prevention Act of 1974, P.L. 93-415 ), federal policy provided limited services to runaway and homeless youth. If they received any services, most of these youth were served through the local child welfare agency, juvenile justice court system, or both. The 1970s marked a shift to a more rehabilitative model for assisting youth who had run afoul of the law, including those who committed status offenses such as running away. During this period, Congress focused increasing attention on runaways and other vulnerable youth due, in part, to emerging sociological models to explain why youth engaged in deviant behavior. The first runaway shelters were created in the late 1960s and 1970s to assist them in returning home. The landmark Runaway Youth Act of 1974 decriminalized runaway youth and authorized funding for programs to provide shelter, counseling, and other services. Since the law's enactment, Congress and the President have expanded the services available to both runaway youth and homeless youth under what is now referred to as the Runaway and Homeless Youth Program. In more recent years, other federal entities have been involved in responding to the challenges facing runaway and homeless youth. These efforts are coordinated through the U.S. Interagency Council on Homelessness (USICH). Figure 1 traces the evolution of federal policy in this area."], "subsections": [{"section_title": "U.S. Interagency Council on Homelessness: Opening Doors", "paragraphs": ["The Runaway and Homeless Youth Program is a major part of recent federal efforts to end youth homelessness through the U.S. Interagency Council on Homelessness. The USICH, established under the 1987 Stewart B. McKinney Homeless Assistance Act, is made up of several federal agencies, including HHS and HUD. The HEARTH Act, enacted in 2009 as part of the Helping Families Save Their Homes Act ( P.L. 111-22 ), charged USICH with developing a National Strategic Plan to End Homelessness. In June 2010, USICH released this plan, entitled Opening Doors . The plan set out goals for ending homelessness, including (1) ending chronic homelessness by 2015; (2) preventing and ending homelessness among veterans by 2015; (3) preventing and ending homelessness for families, youth, and children by 2020; and (4) setting a path to ending all types of homelessness."], "subsections": [{"section_title": "Focus on Youth Homelessness", "paragraphs": ["In 2012, USICH amended Opening Doors to specifically address strategies for improving the educational outcomes for children and youth and assisting unaccompanied homeless youth. USICH outlined its intention to improve outcomes for youth in four areas: stable housing, permanent connections, education or employment options, and socio-emotional well-being.", "In 2013, a USICH working group developed a guiding document for ending youth homelessness by 2020. Known as the Framework to End Youth Homelessness , the document outlines a data strategy to collect better data on the number and characteristics of youth experiencing homelessness. This data strategy includes coordinating the former data collection system for the Runaway and Homeless Youth program\u2014referred to as RHYMIS\u2014with HUD's Homeless Management Information Systems (HMIS). RHYMIS was a data system administered by HHS for previous RHYP grantees to upload demographic and other data for the youth they served. HMIS is a locally administered data system used to record and analyze client, service, and housing data for individuals and families who are homeless or at risk of homelessness in a given community. As of FY2015, RHYP grantees stopped reporting to RHYMIS and instead report to HMIS. Grantees reported to RHYMIS on the basic demographics of the youth, the services they received, and the status of the youth upon exiting the programs. RHY grantees are now required to report this same (and new information) to HMIS. According to HHS, some grantees have had have encountered inaccurate software programming for their data standards or have had issues with successfully extracting their data to submit to HHS. ", "The data strategy outlined in the framework also involves, if funding is available, designing and implementing a national study to estimate the number, needs, and characteristics of youth experiencing homelessness. This is consistent with the Runaway and Homeless Youth Act's directive for HHS to conduct a study of youth homelessness. As noted, this study\u2014 Voices of Youth Count \u2014received funding from FY2016 HUD appropriations. In addition, HHS has supported other research on homeless youth, including factors associated with prolonged homelessness and risk factors for homelessness among children and youth with involvement in child welfare. In 2018, the USICH issued a brief that outlines continued gaps in data on the homeless youth population, citing the need for greater understanding about the causes of youth homelessness and how youth enter and exit homelessness. Separately, the framework also outlined a strategy to strengthen and coordinate the capacity of federal, state, and local systems to work toward ending youth homelessness. USICH has provided guidance to communities, including by establishing community-level criteria for ending homelessness and accompanying benchmarks to assess whether they have achieved an end to youth homelessness. Still, the 2018 USICH brief called for greater evidence regarding the impact of housing and service interventions in helping youth exit homelessness. "], "subsections": []}]}]}, {"section_title": "Runaway and Homeless Youth Program", "paragraphs": ["As mentioned, the Runaway and Homeless Youth Program is administered by the Family and Youth Services Bureau (FYSB) within HHS's Administration for Children and Families (ACF). The Runaway and Homeless Youth Act includes three authorizations of appropriations. ", "The authorization of appropriations for the Basic Center Program and Transitional Living program is $127.4 million for each of FY2019 and FY2020. Under the law, 90% of the federal funds appropriated under the two programs must be used for the BCP and TLP (together, the programs and their related activities are known as the Consolidated Runaway and Homeless Youth program). Of this amount, 45% is reserved for the BCP and no more than 55% is reserved for the TLP. The remaining share of consolidated funding is allocated for (1) a national communication system to facilitate communication between service providers, runaway youth, and their families (National Safeline); (2)\u00a0training and technical support for grantees; (3) evaluations of the programs; (4) federal coordination efforts on matters relating to the health, education, employment, and housing of these youth; and (5) studies of runaway and homeless youth. The authorization of appropriations for the Street Outreach program is $25 million for each of FY2019 and FY2020. Although the SOP is a separately funded component, SOP services are coordinated with those provided under the BCP and TLP. The authorization of appropriations for the periodic estimate of incidence and prevalence of youth homelessness is such sums as may be necessary for FY2019 and FY2020. Funding has not been provided by HHS under this authority, and as noted, funds appropriated to HUD for this purpose have been used to support Voices of Youth Count.", " Table 1 shows funding levels for the Runaway and Homeless Youth Program from FY2006 through FY2019. Over this period, funding has increased notably for the program three times, most recently from FY2017 to FY2018. Congress has provided some guidance on how the additional funds are to be spent. In the conference report to accompany the FY2019 consolidated appropriations act, Congress stated that the increase should be provided to current TLP grantees whose awards end on March 31, 2019. The funding is to be used to continue services until new awards are made to those grantees, or for those grantees that did not receive a new grant, to provide services until the end of FY2019. Funding may then be used for additional new awards. "], "subsections": [{"section_title": "Basic Center Program", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The Basic Center Program is intended to provide short-term shelter and services for youth and their families at centers operated by BCP grantees, which are public and private community-based organizations. Youth eligible to receive BCP services include those youth who are at risk of running away or becoming homeless (and may live at home with their parents), or have already left home, either voluntarily or involuntarily. To stay at the shelter, youth must be under age 18, or an older age if the BCP center is located in a state or locality that permits this higher age. Some centers may serve homeless youth through street-based services, home-based services, and drug abuse education and prevention services. Grantees seek to connect youth with their families, whenever possible, or to locate appropriate alternative placements. They also provide individual or group and family counseling, health care, education, and employment assistance.", "As specified in the law, BCP grantees or centers are intended to provide services as an alternative to involving runaway and homeless youth in the law enforcement, juvenile justice, child welfare, and mental health systems. Youth may stay in a center continuously up to 21 days. In FY2017, the program served 23,288 youth, and in FY2018 it funded 280 BCP shelters (most recent figures available). These centers, which can shelter as many as 20 youth, are generally supposed to be located in areas that are frequented or easily reached by runaway and homeless youth. ", "BCP grantees must make efforts to contact the parents and relatives of runaway and homeless youth. Grantees are also required to establish relationships with law enforcement, health and mental health care, social service, welfare, and school district systems to coordinate services. Grantees maintain confidential statistical records of youth, including youth who are not referred to out-of-home shelter services. Further, grantees are required to submit an annual report to HHS detailing the program activities and the number of youth participating in such activities, as well as information about the operation of the centers."], "subsections": []}, {"section_title": "Funding Allocation", "paragraphs": ["BCP grants are allocated directly to grantees for a three-year period. Funding is generally distributed to entities based on the proportion of the nation's youth under age 18 in the jurisdiction where the entities are located. The 50 states, the District of Columbia, and Puerto Rico each receive a minimum allotment of $200,000. Separately, the territories (currently, this includes American Samoa and Guam) each receive a minimum of $70,000. The amount of funding for each state or territory can further depend on whether grant applicants in that jurisdiction applied for funding, and if so, whether the applicant fulfilled the requirements in the authorizing law and grant application. For example, the authorizing law directs HHS to give priority to applicants who have demonstrated experience in providing services to runaway and homeless youth. HHS is to re-allot any funds designated for grantees in one state to grantees in other states that will not be obligated before the end of a fiscal year. See Table A-1 for the amount of funding allocated for each state in FY2017 and FY2018. The costs of the BCP are shared by the federal government (90%) and grantees (10%). "], "subsections": []}, {"section_title": "Rural Homeless Youth Demonstration", "paragraphs": ["In FY2008, HHS began funding a three-year Rural Host Homes Demonstration Project , which was initiated to expand BCP shelter and support services to runaway and homeless youth who live in rural areas not served by shelter facilities. The project supported grantees that provided youth with shelter (via host home families who were recruited, screened, and trained) and preventive services, including transportation, counseling, educational assistance, and aftercare planning, among others. Over the course of the three years, the project served 781 youth, 411 of whom received shelter and 370 of whom received preventive services without shelter. "], "subsections": []}]}, {"section_title": "Transitional Living Program", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["Recognizing the difficulty that youth face in becoming self-sufficient adults, the Transitional Living Program provides longer-term shelter and assistance for youth ages 16 through 22 (or older if the youth entered the TLP prior to reaching age 22) who may leave their biological homes due to family conflict, or have left and are not expected to return home. Pregnant and/or parenting youth are eligible for TLP services. In FY2017, the TLP provided services to 3,517 youth. In FY2018, the program funded 229 organizations. ", "Each TLP grantee may shelter up to 20 youth at various sites, such as host family homes, supervised apartments owned by a social service agency, scattered-site apartments, or single-occupancy apartments rented directly with the assistance of the grantee. Youth may remain at TLP sites for up to 540 days (18 months), or longer for youth under age 18. Youth ages 16 through 22 may remain in the program for a continuous period of 635 days (approximately 21 months) under \"exceptional circumstances.\" This term means circumstances in which a youth would benefit to an unusual extent from additional time in the program. A youth in a TLP who has not reached age 18 on the last day of the 635-day period may, in exceptional circumstances and if otherwise qualified for the program, remain in the program until his or her 18 th birthday.", "Youth receive several types of services at TLP-funded programs:", "basic life-skills training, including consumer education and instruction in budgeting and the use of credit; parenting support and child care (as appropriate); building interpersonal skills; educational opportunities, such as GED courses and postsecondary training; assistance in job preparation and attainment; and mental and physical health care services.", "TLP grantees are required to develop a written plan designed to help youth transition to living independently or another appropriate living arrangement, and they are to refer youth to other systems that can help to meet their educational, health care, and social service needs. The grantees must also submit an annual report to HHS that includes information regarding the activities carried out with funds and the number and characteristics of the homeless youth."], "subsections": []}, {"section_title": "Maternity Group Homes", "paragraphs": ["As part of the FY2002 budget request, the George W. Bush Administration proposed a $33 million initiative to fund maternity group homes\u2014or centers that provide shelter to pregnant and parenting teens who are vulnerable to abuse and neglect\u2014as a component of the TLP. Although the TLP authorized services for pregnant and parenting teens prior to FY2002, the Bush Administration sought funds specifically to serve this population. Increased funds were ultimately provided to enable these youth to access TLP services. The 2003 amendments to the Runaway and Homeless Youth Act ( P.L. 108-96 ) provided explicit authority to use TLP funds for this purpose. Since FY2004, funding for adult-supervised transitional living arrangements that serve pregnant or parenting women ages 16 to 21 and their children has been awarded to organizations that receive TLP grants. These organizations provide youth with parenting skills, including child development education, family budgeting, health and nutrition, and other skills to promote family well-being."], "subsections": []}, {"section_title": "Funding Allocation", "paragraphs": ["TLP grants are distributed competitively by HHS to community-based public and private organizations throughout the country for a five-year period. Grantees must provide at least 10% of the total cost of the program."], "subsections": []}, {"section_title": "Outcomes of Youth in the TLP", "paragraphs": ["HHS is carrying out a study to learn more about the long-term outcomes of 1,250 youth who have used TLP services. The study seeks to describe the outcomes and to isolate and describe promising practices and other factors that may contribute to their successes or challenges. Of particular interest for the study is how services are delivered, the demographics of youth, and their socio-emotional wellness and life experiences. It involves both a process evaluation and impact evaluation, with youth randomly assigned to the treatment (i.e., participation in the TLP) and control groups. The study seeks to address the following questions: (1) How do TLP programs operate, what types of program models are used to deliver services, and what services are delivered to homeless youth? (2) What are the long-term housing outcomes and protective factors for youth who participate in the TLP program immediately, six months, 12 months, and 18 months after exiting the program? (3) What interventions can be attributed to any positive outcomes experienced by youth who participate in the TLP? According to HHS, the pilot study revealed challenges \"in collecting data from a large enough sample size of youth to detect any effects so that conclusions could be drawn about the impact of homeless youth served by TLPs.\" HHS is not certain how it will move forward with the study."], "subsections": []}, {"section_title": "Special Populations and Rural Homeless Youth Demonstration", "paragraphs": ["In FY2016, HHS began the Transitional Living Program Special Population Demonstration project. The project funded nine grantees over a two-year period that tested approaches for serving populations that need additional support: LGBTQ runaway and homeless youth ages 16 to 21; and young adults who have left foster care because of emancipation. Grantees were expected to provide strategies that help youth build protective factors, such as connections with schools, employment, and appropriate family members and other caring adults. According to HHS, a process evaluation will assess how grantees are implementing the demonstration project. ", "HHS separately funded a project from FY2012 through FY2014 to build the capacity of TLPs in serving LGBTQ youth. Known as the 3/40 Blueprint: Creating the Blueprint to Reduce LGBTQ Youth Homelessness , the purpose of the grant was develop information about serving the LGBTQ youth population experiencing homelessness, such as through efforts to identify innovative intervention strategies, determine culturally appropriate screening and assessment tools, and better understand the needs of LGBTQ youth served by RHY providers. The website developed by the grantee, the University of Illinois at Chicago, identifies promising practices that serve LGBTQ youth who are experiencing homelessness and publishes information about their challenges.", "In FY2009, HHS began the Support Systems for Rural Homeless Youth Demonstration Project . Six states received grants to support TLPs in rural communities in serving young adults who have few or no connections to a supportive family structure or community resources. The five-year project sought to provide services across three main areas: ", "survival support, which includes housing, health care (including mental health), and substance abuse treatment and prevention; community, which includes community service, youth and adult partnerships, mentoring, and peer support groups; and education and employment, which includes high school or GED completion, postsecondary education, and job training and employment. ", "The six states\u2014Colorado, Iowa, Minnesota, Nebraska, Oklahoma, and Vermont\u2014each received annual grants of $200,000. According to HHS, all of the sites engaged youth in positive youth development activities that included safe places for youth to go. In addition, they raised awareness about homelessness in rural areas and addressed some of the unique needs around employment, housing, and transportation. However, the sites also confirmed that there is a general lack of available housing for homeless youth and that transportation was the most critical impediment to serving these youth."], "subsections": []}]}, {"section_title": "Street Outreach Program", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The Street Outreach Program provides runaway and homeless youth living on the streets or in areas that increase their risk of using drugs or being subjected to sexual abuse, prostitution, sexual exploitation, and trafficking are eligible to receive services. The program's goal is to assist youth in transitioning to safe and appropriate living arrangements. SOP services include the following:", "treatment and counseling; crisis intervention; drug abuse and exploitation prevention and education activities; survival aid; street-based education and outreach; information and referrals; and follow-up support."], "subsections": []}, {"section_title": "Funding Allocation", "paragraphs": ["Grants are awarded for a three-year period, and grantees must provide 10% of the funds to cover the cost of the program. In FY2018, 96 grantees were funded. In FY2017 grantees made contact with 24,366 youth."], "subsections": []}, {"section_title": "Data Collection Project", "paragraphs": ["The Family and Youth Services Bureau initiated the Street Outreach Program Data Collection Project in 2012 to learn more about the lives and needs of homeless and runaway youth served by SOP grantees. The purpose of the project was to design services to better meet the needs of these youth. FYSB collected information through focus groups and computer-assisted personal interviews with 656 youth (ages 14 to 21 years) served by grantees in 11 cities. The project found that participants were homeless on average for nearly two years and had challenges with substance abuse, mental health, and exposure to trauma. Youth most identified that they were in need of job training or help finding a job, transportation assistance, and clothing. The top barriers to obtaining shelter were shelters being full, not knowing where to go for shelter, and lacking transportation to get to a shelter. The study researchers concluded that more emergency shelters could help prevent youth from sleeping on the street. Further, they noted that youth on the streets need more intensive case management (e.g., careful assessment and treatment planning, linkages to community resources, etc.) and more intensive interventions. "], "subsections": []}]}, {"section_title": "Training and Technical Assistance: RHYTTAC", "paragraphs": ["HHS funds the Runaway and Homeless Youth Training and Technical Assistance Center (RHYTTAC) to provide technical assistance to RHYP grantees. HHS awarded a five-year cooperative agreement, from September 30, 2017, through September 29, 2020, to National Safe Place to operate RHYTTAC. National Safe Place is a national youth outreach program that aims to educate young people about the dangers of running away or trying to resolve difficult, threatening situations on their own. RHYTTAC is designed to provide training and conference services to RHYP grantees that enhance and promote continuous quality improvement to services provided by RHYP grantees. Further, RHYTTAC offers resources and information through its website, tip sheets, a quarterly newsletter, toolkits, sample policies and procedures, and other resources. RHYTTAC also provides assistance to individual grantees in response to their questions or concerns, as well as concerns raised by HHS as part of the Runaway and Homeless Youth Program Monitoring System (see subsequent section)."], "subsections": []}, {"section_title": "National Communication System: National Runaway Safeline", "paragraphs": ["A portion of the funds for the BCP, TLP, and related activities are allocated for a national communications system known as the National Runaway Safeline (\"Safeline\"). The Safeline is intended to help homeless and runaway youth (or youth who are contemplating running away) through counseling, referrals, and communicating with their families. Beginning with FY1974 and every year after, the Safeline, which until 2013 was called the National Runaway Switchboard, has been funded through the Basic Center Program grant or the Consolidated Runaway and Homeless Youth Program grant. The Safeline is located in Chicago and operates each day to provide services to youth and their families across the country. Services include (1) a channel through which runaway and homeless youth or their parents may leave messages; (2) 24-hour referrals to community resources, including shelter, community food banks, legal assistance, and social services agencies; and (3) crisis intervention counseling to youth. In calendar year 2017, the Safeline handled nearly 30,000 contacts with youth (via phone, computer, emails, and postings), of which nearly three-quarters were from youth and 9% were from parents; the other callers were relatives, friends, and others. Other services are also provided through the Safeline. Since 1995, the \"Home Free\" family reunification program has provided bus tickets for youth ages 12 to 21 to return home or to an alternative placement near their home through Home Free."], "subsections": []}, {"section_title": "Oversight", "paragraphs": ["HHS evaluates each RHYP grantee through the Runaway and Homeless Youth Monitoring System. Staff from regional ACF offices and other grant recipients (known as peer reviewers) inspect the program site, conduct interviews, review case files and other agency documents, and conduct entry and exit conferences. The monitoring team then prepares a written report that identifies the strengths of the program and areas that require corrective action. ", "The Reconnecting Homeless Youth Act of 2008 required that within one year of its enactment (October 8, 2009), HHS was to issue rules that specified performance standards for public and nonprofit entities that receive BCP, TLP, and SOP grants. On April 14, 2014, HHS issued a notice of proposed rulemaking (NPRM) for the new performance standards and other requirements for the Runaway and Homeless youth program grantees. On December 20, 2016, HHS implemented a final rule that was similar to the provisions in the NPRM. These standards are used to monitor individual grantee performance. ", "The Senate Committee on Health, Education, Labor, and Pensions (HELP) and the House Committee on Education and Labor have exercised jurisdiction over the Runaway and Homeless Youth Program. HHS must submit reports biennially to the committees on the status, activities, and accomplishments of program grant recipients and evaluations of the programs performed by HHS. The most recent report was submitted in January 2018, and covered FY2014 and FY2015.", "The 2003 reauthorization law ( P.L. 108-96 ) of the Runaway and Homeless Youth Act required that HHS, in consultation with the U.S. Interagency Council on Homelessness, submit a report to Congress on the promising strategies to end youth homelessness within two years of the reauthorization, in October 2005. The report was submitted to Congress in June 2007.", "As mentioned above, the 2008 reauthorization law ( P.L. 110-378 ) required HHS, as of FY2010, to periodically submit to Congress an incidence and prevalence study of runaway and homeless youth ages 13 to 26, as well as the characteristics of a representative sample of these youth. As discussed, Congress appropriated funding to HUD for this purpose and the study, known as Voices of Youth Count , includes multiple publications about its findings. The 2008 law also directed the Government Accountability Office (GAO) to evaluate the process by which organizations apply for BCP, TLP, and SOP, including HHS's response to these applicants. GAO submitted a report to Congress in May 2010 on its findings. GAO found weaknesses in several of the procedures for reviewing grants, such as that peer reviewers for the grant did not always have expertise in runaway and homeless youth issues and feedback on grants was not provided in a permanent record. In addition, GAO found that HHS delayed telling successful grantees that the grant had been awarded to them. HHS has implemented the recommendations made in the report.", "Appendix A. Basic Center Program (BCP) Funding ", "Appendix B. Additional Federal Support for Runaway and Homeless Youth", "Since the creation of the Runaway and Homeless Youth Program, other federal initiatives have also established services for such youth. ", "Youth Homelessness Demonstration Program (YHDP): The omnibus appropriations laws for FY2016 through FY2018 enabled HUD to set aside up to $33 million (FY2016), $43 million (FY2017), and $80 million (FY2018) from the Homeless Assistance Grants account to implement projects that demonstrate how a \"comprehensive approach\" can \"dramatically reduce\" homelessness for youth through age 24. The appropriations laws each fiscal year direct this funding to up to 10 communities with the FY2016 funding; up to 11 communities with the FY2017 funding, including at least five rural communities; and up to 25 communities with the FY2018 funding, including at least eight rural communities. HUD has allocated $33 million to 10 communities for FY2016 and $43 million for FY2017. In addition, HUD is taking steps to evaluate the YHDP grantee communities in developing and carrying out a coordinated community approach to preventing and ending youth homelessness. 100-Day Challenges to End Youth Homelessness : Since 2016, cities have partnered with public and private entities to accelerate efforts to prevent and end youth homelessness. A Way Home America and Rapid Results Institute, organizations that focus on pressing social problems, have provided support to the organizations. HHS provided training and technical assistance through RHYTTAC to the first three cities involved in the challenge: Los Angeles, CA; Cleveland, OH; and Austin, TX. In general, participating communities have housed homeless youth and have identified new housing options for this population. Youth with Child Welfare Involvement At-Risk of Homelessness (YAHR): HHS has funded grants to build evidence on what works to prevent homelessness among youth and young adults who have child welfare involvement. HHS awarded funds to 18 grantees for a two-year planning period (2013-2015). Six of the grantees received additional funding to refine and test their service models during a second phase (2015-2018). A subset of those grantees will then be selected to conduct a rigorous evaluation of their impact on homelessness."], "subsections": []}, {"section_title": "Educational Assistance", "paragraphs": [], "subsections": [{"section_title": "Elementary and Secondary Education", "paragraphs": ["In school year 2016-2017, more than 1.3 million children and youth were homeless. Of these students, over 118,000 were homeless youth unaccompanied by their families. The Department of Education administers the Education for Homeless Children and Youth program, which was established under the McKinney-Vento Homeless Assistance Act of 1987 ( P.L. 100-77 ), as amended. This program assists state education agencies (SEAs) to ensure that all homeless children and youth have equal access to the same, appropriate education, including public preschool education, that is provided to other children and youth. Grants made by SEAs to local education agencies (LEAs) under this program must be used to facilitate the enrollment, attendance, and success in school of homeless children and youth. Program funds may be appropriated for activities such as tutoring, supplemental instruction, and referral services for homeless children and youth, as well as providing them with medical, dental, mental, and other health services. McKinney-Vento liaisons for homeless children and youth in each LEA is responsible for coordinating activities for these youth with other entities and agencies, including local Basic Center and Transitional Living Program grantees. States that receive McKinney-Vento funds are prohibited from segregating homeless students from non-homeless students, except for short periods of time for health and safety emergencies or to provide temporary, special, supplemental services. FY2019 funding for the program is $93.5 million."], "subsections": []}, {"section_title": "Higher Education", "paragraphs": ["According to a 2017 survey of 43,000 college students at selected colleges and universities, 9% of those attending four-year universities and 12% of those attending community college had been homeless in the last year. In addition, 37% of university students and 46% of community college students were housing insecure in the past year, meaning that they had difficulty paying rent or lived with others beyond the expected capacity of the housing, among other scenarios. ", "The Higher Education Act (HEA) authorizes financial aid and support programs that target homeless students and other vulnerable populations. For purposes of applying for federal financial aid, a student's expected family contribution (EFC) is the amount that can be expected to be contributed by a student and the student's family toward his or her cost of education. Certain groups of students are considered \"independent,\" meaning that only the income and assets of the student (and not their parents or guardians) are counted. Individuals under age 24 who have been verified during the school year as either (1) unaccompanied and homeless or (2) unaccompanied, self-supporting, and risk of homelessness. This verification can come from a McKinney-Vento liaison for homeless children and youth in the local education agency; the director (or designee) of a program funded under the Runaway and Homeless Youth program; the director (or designee) of an emergency shelter or transitional housing program funded by HUD; or a financial aid administrator. ", "Separately, HEA provides that homeless children and youth are eligible for what are collectively called the federal TRIO programs. This includes the following TRIO programs: Talent Search, Upward Bound, Student Support Services, and Educational Opportunity Centers. The TRIO programs are designed to identify potential postsecondary students from disadvantaged backgrounds, prepare these students for higher education, provide certain support services to them while they are in college, and train individuals who provide these services. HEA directs the Department of Education (ED), which administers the programs, to (as appropriate) require applicants seeking TRIO funds to identify and make services available, including mentoring, tutoring, and other services, to these youth. TRIO funds are awarded by ED on a competitive basis. In addition, HEA authorizes services for homeless youth through TRIO Student Support Services\u2014a program intended to improve the retention and graduation rates of disadvantaged college students\u2014that include temporary housing during breaks in the academic year. In FY2019, TRIO appropriations are $1.1 billion.", "Separately, HEA allows additional uses of funds through the Fund for the Improvement of Postsecondary Education (FIPSE) to establish demonstration projects that provide comprehensive support services for students who are or were homeless at age 13 or older. FIPSE is a grant program that seeks to support the implementation of innovative educational reform ideas and evaluate how well they work. As specified in the law, the projects can provide housing to the youth when housing at an educational institution is closed or unavailable to other students. FY2019 appropriations for FIPSE are $5 million. "], "subsections": []}]}, {"section_title": "Chafee Foster Care Independence Program88", "paragraphs": ["Recently emancipated foster youth are vulnerable to becoming homeless. In FY2017, nearly 20,000 youth \"aged out\" of foster care. The Chafee Foster Care Independence Program (CFCIP), created under the Chafee Foster Care Independence Act of 1999 ( P.L. 106-169 ), provides states with funding to support children and youth ages 14 to 21 who are in foster care and former foster youth ages 18 to 21 (and up to age 23 in states that extend foster care to age 21). States are authorized to receive funds based on their share of the total number of children in foster care nationwide. However, the law's \"hold harmless\" clause precludes any state from receiving less than the amount of funds it received in FY1998 or $500,000, whichever is greater. The program specifies funding for transitional living services, and as much as 30% of the funds may be dedicated to room and board. The program is funded through mandatory spending, and as such $140 million ($143 million as of FY2020) is provided for the program each year through the annual appropriations process. "], "subsections": []}, {"section_title": "Discretionary Grants for Family Violence Prevention", "paragraphs": ["The Family Violence Prevention and Services Act (FVPSA), Title III of the Child Abuse Amendments of 1984 ( P.L. 98-457 ), authorized funds for Family Violence Prevention and Service grants that work to prevent family violence, improve service delivery to address family violence, and increase knowledge and understanding of family violence. From FY2007 to FY2009, one of these projects focused on runaway and homeless youth in dating violence situations through HHS's Domestic Violence/Runaway and Homeless Youth Collaboration on the Prevention of Adolescent Dating Violence initiative. The initiative was created because many runaway and homeless youth come from homes where domestic violence occurs and may be at risk of abusing their partners or becoming victims of abuse. The initiative funded eight states and community-based organizations to address the issue of teen dating violence among runaway and homeless youth. The grants funded activities such as curriculum on dating violence, small groups for teens, and a sexual assault/dating violence reduction program. The initiative resulted in an online toolkit for advocates in the runaway and homeless youth and domestic and sexual assault fields to help programs better address relationship violence with runaway and homeless youth."], "subsections": []}]}]}}
{"id": "R45618", "title": "The International Emergency Economic Powers Act: Origins, Evolution, and Use", "released_date": "2019-03-20T00:00:00", "summary": ["The International Emergency Economic Powers Act (IEEPA) provides the President broad authority to regulate a variety of economic transactions following a declaration of national emergency. IEEPA, like the Trading with the Enemy Act (TWEA) from which it branched, sits at the center of the modern U.S. sanctions regime. Changes in the use of IEEPA powers since the act's enactment in 1977 have caused some to question whether the statute's oversight provisions are robust enough given the sweeping economic powers it confers upon the President upon declaration of a state of emergency.", "Over the course of the twentieth century, Congress delegated increasing amounts of emergency power to the President by statute. The Trading with the Enemy Act was one such statute. Congress passed TWEA in 1917 to regulate international transactions with enemy powers following the U.S. entry into the First World War. Congress expanded the act during the 1930s to allow the President to declare a national emergency in times of peace and assume sweeping powers over both domestic and international transactions. Between 1945 and the early 1970s, TWEA became a critically important means to impose sanctions as part of U.S. Cold War strategy. Presidents used TWEA to block international financial transactions, seize U.S.-based assets held by foreign nationals, restrict exports, modify regulations to deter the hoarding of gold, limit foreign direct investment in U.S. companies, and impose tariffs on all imports into the United States.", "Following committee investigations that discovered that the United States had been in a state of emergency for more than 40 years, Congress passed the National Emergencies Act (NEA) in 1976 and IEEPA in 1977. The pair of statutes placed new limits on presidential emergency powers. Both included reporting requirements to increase transparency and track costs, and the NEA required the President to annually assess and extend, if appropriate, the emergency. However, some experts argue that the renewal process has become pro forma. The NEA also afforded Congress the means to terminate a national emergency by adopting a concurrent resolution in each chamber. A decision by the Supreme Court, in a landmark immigration case, however, found the use of concurrent resolutions to terminate an executive action unconstitutional. Congress amended the statute to require a joint resolution, significantly increasing the difficulty of terminating an emergency.", "Like TWEA, IEEPA has become an important means to impose economic-based sanctions since its enactment; like TWEA, Presidents have frequently used IEEPA to restrict a variety of international transactions; and like TWEA, the subjects of the restrictions, the frequency of use, and the duration of emergencies have expanded over time. Initially, Presidents targeted foreign states or their governments. Over the years, however, presidential administrations have increasingly used IEEPA to target individuals, groups, and non-state actors such as terrorists and persons who engage in malicious cyber-enabled activities.", "As of March 1, 2019, Presidents had declared 54 national emergencies invoking IEEPA, 29 of which are still ongoing. Typically, national emergencies invoking IEEPA last nearly a decade, although some have lasted significantly longer--the first state of emergency declared under the NEA and IEEPA, which was declared in response to the taking of U.S. embassy staff as hostages by Iran in 1979, may soon enter its fifth decade.", "IEEPA grants sweeping powers to the President to control economic transactions. Despite these broad powers, Congress has never attempted to terminate a national emergency invoking IEEPA. Instead, Congress has directed the President on numerous occasions to use IEEPA authorities to impose sanctions. Congress may want to consider whether IEEPA appropriately balances the need for swift action in a time of crisis with Congress' duty to oversee executive action. Congress may also want to consider IEEPA's role in implementing its influence in U.S. foreign policy and national security decision-making."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The issue of executive discretion has been at the center of constitutional debates in liberal democracies throughout the twentieth century. How to balance a commitment to the rule of law with the exigencies of modern political and economic crises has engaged legislators and scholars in the United States and around the world. ", "The United States Constitution is silent on questions of emergency power. As such, over the past two centuries, Congress and the President have answered those questions in varied and often ad hoc ways. In the eighteenth and nineteenth centuries, the answer was often for the President to act without congressional approval in a time of crisis, knowingly risking impeachment and personal civil liability. Congress claimed primacy over emergency action and would decide subsequently to either ratify the President's actions or indemnify the President for any civil liability. ", "By the twentieth century, a new pattern had begun to emerge. Instead of retroactively judging an executive's extraordinary actions in a time of emergency, Congress created statutory bases permitting the President to declare a state of emergency and make use of extraordinary delegated powers. The expanding delegation of emergency powers to the executive and the increase of governing via emergency power by the executive has been a common trajectory among twentieth-century liberal democracies. As innovation has quickened the pace of social change and global crises, some legislatures have felt compelled to delegate to the executive, who traditional political theorists assumed could operate with greater \"dispatch\" than deliberate, future-oriented legislatures. Whether such actions subvert the rule of law or are a standard feature of healthy modern constitutional orders has been a subject of extensive debate.", "The International Emergency Economic Powers Act (IEEPA) is one such example of a twentieth-century delegation of emergency authority. One of 123 emergency statutes under the umbrella of the National Emergencies Act (NEA), IEEPA grants the President extensive power to regulate a variety of economic transactions during a state of emergency. Congress enacted IEEPA in 1977 to rein in the expansive emergency economic powers that it had been delegated to the President under the Trading with the Enemy Act (TWEA). Nevertheless, some scholars argue that judicial and legislative actions subsequent to IEEPA's enactment have made it, like TWEA, a source of expansive and unchecked executive authority in the economic realm. Others, however, argue that Presidents often use IEEPA to implement the will of Congress either as directed by law or as encouraged by congressional activity. ", "Until recently, there has been little congressional discussion of modifying either IEEPA or its umbrella statute, the NEA. Recent presidential actions, however, have drawn attention to presidential emergency powers under the NEA of which IEEPA is the most frequently used. Should Congress consider changing IEEPA, there are two issues that Congress may wish to address. The first pertains to how Congress has delegated its authority under IEEPA and its umbrella statute, the NEA. The second pertains to choices made in the Export Control Reform Act of 2018."], "subsections": []}, {"section_title": "Origins", "paragraphs": [], "subsections": [{"section_title": "The First World War and the Trading with the Enemy Act (TWEA)", "paragraphs": ["The First World War (1914-1918) saw an unprecedented degree of economic mobilization. The executive departments of European governments began to regulate their economies with or without the support of their legislatures. The United States, in contrast, was in a privileged position relative to its allies in Europe. Separated by an ocean from Germany and Austria-Hungary, the United States was never under substantial threat of invasion. Rather than relying on the inherent powers of the presidency, or acting unconstitutionally and waiting for congressional ratification, President Wilson sought explicit pre-authorization for expansive new powers to meet the global crisis. Between 1916 and the end of 1917, Congress passed 22 statutes empowering the President to take control of private property for public use during the war. These statutes gave the President broad authority to control railroads, shipyards, cars, telegraph and telephone systems, water systems, and many other sectors of the American economy.", "TWEA was one of those 22 statutes. It granted to the executive an extraordinary degree of control over international trade, investment, migration, and communications between the United States and its enemies. TWEA defined \"enemy\" broadly and included \"any individual, partnership, or other body of individuals [including corporations], of any nationality, resident within the territory ... of any nation with which the United States is at war, or resident outside of the United States and doing business within such a territory ....\" The first four sections of the act granted the President extensive powers to limit trading or communication with, or transporting enemies (or their allies) of the United States. These sections also empowered the President to censor foreign communications and place extensive restrictions on enemy insurance or reinsurance companies. ", "It was Section 5(b) of TWEA, however, that would form one of the central bases of presidential emergency economic power in the twentieth century. Section 5(b), as originally enacted, states:", "That the President may investigate, regulate, or prohibit, under such rules and regulations as he may prescribe, by means of licenses or otherwise, any transactions in foreign exchange, export or earmarkings of gold or silver coin or bullion or currency, transfers of credit in any form (other than credits relating solely to transactions to be executed wholly within the United States), and transfers of evidences of indebtedness or of the ownership of property between the United States and any foreign country, whether enemy, ally of enemy or otherwise, or between residents of one or more foreign countries, by any person within the United States; and he may require any such person engaged in any such transaction to furnish, under oath, complete information relative thereto, including the production of any books of account, contracts, letters or other papers, in connection therewith in the custody or control of such person, either before or after such transaction is completed. ", "The statute gave the President exceptional control over private international economic transactions in times of war. While Congress terminated many of the war powers in 1921, TWEA was specifically exempted because the U.S. Government had yet to dispose of a large amount of alien property in its custody. "], "subsections": []}, {"section_title": "The Expansion of TWEA", "paragraphs": ["The Great Depression, a massive global economic downturn that began in 1929, presented a challenge to liberal democracies in Europe and the Americas. To deal with the complexities presented by the crisis, nearly all such democracies began delegating discretionary authority to their executives to a degree that had only previously been done in times of war. The U.S. Congress responded, in part, by dramatically expanding the scope of TWEA, delegating to the President the power to declare states of emergency in peacetime and assume expansive domestic economic powers. ", "Such a delegation was made possible by analogizing economic crises to war. In public speeches about the crisis, President Franklin D. Roosevelt asserted that the Depression was to be \"attacked,\" \"fought against,\" \"mobilized for,\" and \"combatted\" by \"great arm[ies] of people.\" The economic mobilization of the First World War had blurred the lines between the executive's military and economic powers. As the Depression was likened to \"armed strife\" and declared to be \"an emergency more serious than war\" by a Justice of the Supreme Court, it became routine to use emergency economic legislation enacted in wartime as the basis for extraordinary economic authority in peacetime.", "As the Depression entered its third year, the newly-elected President Roosevelt sought from Congress \"broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.\" In his first act as President, Roosevelt proclaimed a bank holiday, suspending all transactions at all banking institutions located in the United States and its territories for four days. In his proclamation, Roosevelt claimed to have authority to declare the holiday under Section 5(b) of TWEA. However, because the United States was not in a state of war and the suspended transactions were primarily domestic, the President's authority to issue such an order was dubious.", "Despite the tenuous legality, Congress ratified Roosevelt's actions by passing the Emergency Banking Relief Act three days after his proclamation. The act amended Section 5(b) of TWEA to read: ", "During time of war or during any other period of national emergency declared by the President , the President may, through any agency that he may designate, or otherwise, investigate, regulate, or prohibit.... ", "This amendment gave the President the authority to declare that a national emergency existed and assume extensive controls over the national economy previously only available in times of war. By 1934, Roosevelt had used these extensive new powers to regulate \"Every transaction in foreign exchange, transfer of credit between any banking institution within the United States and any banking institution outside of the United States.\" ", "With America's entry into the Second World War in 1941, Congress again amended TWEA to grant the President extensive powers over the disposition of private property, adding the so-called \"vesting\" power, which authorized the permanent seizure of property. Now in its most expansive form, TWEA authorized the President to declare a national emergency and, in so doing, to regulate foreign exchange, domestic banking, possession of precious metals, and property in which any foreign country or foreign national had an interest. ", "The Second World War ended in 1945. Following the conflict, the allied powers constructed institutions and signed agreements designed to keep the peace and to liberalize world trade. However, the United States did not immediately resume a peacetime posture with respect to emergency powers. Instead, the onset of the Cold War rationalized the continued use of TWEA and other emergency powers outside the context of a declared war. Over the next several decades, Presidents declared four national emergencies under Section 5(b) of TWEA and assumed expansive authority over economic transactions in the postwar period. ", "During the Cold War, economic sanctions became an increasingly popular foreign policy and national security tool, and TWEA was a prominent source of presidential authority to use the tool. In 1950, President Harry S. Truman declared a national emergency, citing TWEA, to impose economic sanctions on North Korea and China. Subsequent Presidents referenced that national emergency as authority for imposing sanctions on Vietnam, Cuba, and Cambodia. Truman likewise used Section 5(b) of TWEA to maintain regulations on foreign exchange, transfers of credit, and the export of coin and currency that had been in place since the early 1930s. Presidents Richard M. Nixon and Gerald R. Ford invoked TWEA to continue export controls established under the Export Administration Act when the act expired.", "TWEA was also a prominent instrument of postwar presidential monetary policy. Presidents Dwight D. Eisenhower and John F. Kennedy used TWEA and the national emergency declared by President Roosevelt in 1933 to maintain and modify regulations controlling the hoarding and export of gold. In 1968, President Lyndon B. Johnson explicitly used Truman's 1950 declaration of emergency under Section 5(b) of TWEA to limit direct foreign investment by U.S. companies in an effort to strengthen the balance of payments position of the United States after the devaluation of the pound sterling by the United Kingdom. In 1971, after President Nixon ended the convertibility of the U.S. dollar to gold, effectively ending the postwar monetary order, he made use of Section 5(b) of TWEA to declare a state of emergency and place a 10% ad valorem supplemental duty on all dutiable goods entering the United States. ", "The reliance by the executive on the powers granted by Section 5(b) of TWEA meant that postwar sanctions regimes and significant parts of U.S. international monetary policy relied on continued states of emergency for their operation. "], "subsections": []}, {"section_title": "Pushing Back Against Executive Discretion", "paragraphs": ["By the mid-1970s, in the wake of U.S. military involvement in Vietnam, revelations of domestic spying, assassinations of foreign political leaders, the Watergate break-in, and other related abuses of power, Congress increasingly focused on checking the executive branch. The Senate formed a bipartisan special committee chaired by Senators Frank Church and Charles Mathias to reevaluate the expansive delegations of emergency authority to the President. The special committee issued a report surveying the President's emergency powers in which it asserted that the United States had technically \"been in a state of national emergency since March 9, 1933\" and that there were four distinct declarations of national emergency in effect. The report also noted that the United States had \"on the books at least 470 significant emergency statutes without time limitations delegating to the Executive extensive discretionary powers, ordinarily exercised by the Legislature, which affect the lives of American citizens in a host of all-encompassing ways.\" ", "In the course of its investigations, Senator Mathias, committee co-chair, noted, \"A majority of the people of the United States have lived all of their lives under emergency government.\" Senator Church, the other co-chair, said the central question before the committee was \"whether it [was] possible for a democratic government such as ours to exist under its present Constitution and system of three separate branches equal in power under a continued state of emergency.\" ", "Among the more controversial statutes highlighted by the committee was TWEA. In 1977, during the House markup of a bill revising TWEA, Representative Jonathan Bingham, Chairperson of the House International Relations Committee's Subcommittee on Economic Policy, described TWEA as conferring \"on the President what could have been dictatorial powers that he could have used without any restraint by Congress.\" According to the Department of Justice, TWEA granted the President four major groups of powers in a time of war or other national emergency:", "(a) Regulatory powers with respect to foreign exchange, banking transfers, coin, bullion, currency, and securities;", "(b) Regulatory powers with respect to \"any property in which any foreign country or a national thereof has any interest\";", "(c) The power to vest \"any property or interest of any foreign country or national thereof\"; and", "(d) The powers to hold, use, administer, liquidate, sell, or otherwise deal with \"such interest or property\" in the interest of and for the benefit of the United States.", "The House report on the reform legislation called TWEA \"essentially an unlimited grant of authority for the President to exercise, at his discretion, broad powers in both the domestic and international economic arena, without congressional review.\" The criticisms of TWEA centered on the following:", "(a) It required no consultation or reports to Congress with regard to the use of powers or the declaration of a national emergency. ", "(b) It set no time limits on a state of emergency, no mechanism for congressional review, and no way for Congress to terminate it.", "(c) It stated no limits on the scope of TWEA's economic powers and the circumstances under which such authority could be used.", "(d) The actions taken under the authority of TWEA were rarely related to the circumstances in which the national emergency was declared.", "In testimony before the House Committee on International Relations, Professor Harold G. Maier summed up the development and the main criticisms of TWEA:", "Section 5(b)'s effect is no longer confined to \"emergency situations\" in the sense of existing imminent danger. The continuing retroactive approval, either explicit or implicit, by Congress of broad executive interpretations of the scope of powers which it confers has converted the section into a general grant of legislative authority to the President\u2026\""], "subsections": []}, {"section_title": "Enactment of the National Emergencies Act and the International Emergency Economic Powers Act", "paragraphs": ["Congress's reforms to emergency powers under TWEA came in two acts. First, Congress enacted the National Emergencies Act (NEA) in 1976. The NEA provided for the termination of all existing emergencies in 1978, except those making use of Section 5(b) of TWEA, and placed new restrictions on the manner of declaring and the duration of new states of emergency, including: ", "Requiring the President to immediately transmit to Congress of the declaration of national emergency. Requiring a biannual review whereby \"each House of Congress shall meet to consider a vote on a concurrent [now joint, see below] resolution to determine whether that emergency shall be terminated.\" Authorizing Congress to terminate the national emergency through a privileged concurrent [now joint] resolution. ", "Second, Congress tackled the thornier question of TWEA. Because the authorities granted by TWEA were heavily entwined with postwar international monetary policy and the use of sanctions in U.S. foreign policy, unwinding it was a difficult undertaking. The exclusion of Section 5(b) reflected congressional interest in preserving existing regulations regarding foreign assets, foreign funds, and exports of strategic goods. Similarly, establishing a means to continue existing uses of TWEA reflected congressional interest in \"improving future use rather than remedying past abuses.\"", "The subcommittee charged with reforming TWEA spent more than a year preparing reports, including the first complete legislative history of TWEA, a tome that ran nearly 700 pages. In the resulting legislation, Congress did three things. First, Congress amended TWEA so that it was, as originally intended, only applicable \"during a time of war.\" Second, Congress expanded the Export Administration Act to include powers that previously were authorized by reference to Section 5(b) of TWEA. Finally, Congress wrote the International Emergency Economic Powers Act (IEEPA) to confer \"upon the President a new set of authorities for use in time of national emergency which are both more limited in scope than those of section 5(b) and subject to procedural limitations, including those of the [NEA].\"", "The Report of the House Committee on International Relations summed up the nature of an \"emergency\" in their \"new approach\" to international emergency economic powers:", "[G]iven the breadth of the authorities, and their availability at the President's discretion upon a declaration of a national emergency, their exercise should be subject to various substantive restrictions. The main one stems from a recognition that emergencies are by their nature rare and brief, and are not to be equated with normal ongoing problems. A national emergency should be declared and emergency authorities employed only with respect to a specific set of circumstances which constitute a real emergency, and for no other purpose. The emergency should be terminated in a timely manner when the factual state of emergency is over and not continued in effect for use in other circumstances. A state of national emergency should not be a normal state of affairs."], "subsections": []}]}, {"section_title": "IEEPA's Statute, its Use, and Judicial Interpretation", "paragraphs": [], "subsections": [{"section_title": "IEEPA's Statute", "paragraphs": ["IEEPA, as currently amended, empowers the president to:", "(A) investigate, regulate, or prohibit: ", "(i) any transactions in foreign exchange, ", "(ii) transfers of credit or payments between, by, through, or to any banking institution, to the extent that such transfers or payments involve any interest of any foreign country or national thereof, ", "(iii) the importing or exporting of currencies or securities; and", "(B) investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States.", "(C) when the United States is engaged in armed hostilities or has been attacked by a foreign country or foreign nationals, confiscate any property, subject to the jurisdiction of the United States, of any foreign person, foreign organization, or foreign country that he determines has planned, authorized, aided, or engaged in such hostilities or attacks against the United States; and all right, title, and interest in any property so confiscated shall vest, when, as, and upon the terms directed by the President, in such agency or person as the President may designate from time to time, and upon such terms and conditions as the President may prescribe, such interest or property shall be held, used, administered, liquidated, sold, or otherwise dealt with in the interest of and for the benefit of the United States, and such designated agency or person may perform any and all acts incident to the accomplishment or furtherance of these purposes.", "These powers may be exercised \"to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.\" Presidents may invoke IEEPA under the procedures set forth in the NEA. When declaring a national emergency, the NEA requires that the President \"immediately\" transmit the proclamation declaring the emergency to Congress and publish it in the Federal Register . The President must also specify the provisions of law that he or she intends to use. ", "In addition to the requirements of the NEA, IEEPA provides several further restrictions. Preliminarily, IEEPA requires that the President consult with Congress \"in every possible instance\" before exercising any of the authorities granted under IEEPA. Once the President declares a national emergency invoking IEEPA, he or she must immediately transmit a report to Congress specifying:", "(1) the circumstances which necessitate such exercise of authority;", "(2) why the President believes those circumstances constitute an unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States;", "(3) the authorities to be exercised and the actions to be taken in the exercise of those authorities to deal with those circumstances;", "(4) why the President believes such actions are necessary to deal with those circumstances; and", "(5) any foreign countries with respect to which such actions are to be taken and why such actions are to be taken with respect to those countries.", "The President subsequently is to report on the actions taken under the IEEPA at least once in every succeeding six-month interval that the authorities are exercised. As per the NEA, the emergency may be terminated by the President, by a privileged joint resolution of Congress, or automatically if the President does not publish in the Federal Register and transmit to Congress a notice stating that such emergency is to continue in effect after such anniversary."], "subsections": []}, {"section_title": "Amendments to IEEPA", "paragraphs": ["Congress has amended IEEPA eight times ( Table 1 ). Five of the eight amendments have altered civil and criminal penalties for violations of orders issued under the statute. Other amendments excluded certain informational materials and expanded IEEPA's scope following the terrorist attacks of September 11, 2001. Congress also amended the NEA in response to a ruling by the Supreme Court to require a joint rather than a concurrent resolution to terminate a national emergency."], "subsections": [{"section_title": "The Berman Amendment and Informational Materials", "paragraphs": ["As originally enacted, IEEPA protected the rights of U.S. persons to participate in the exchange of \"any postal, telegraphic, telephonic, or other personal communication, which does not involve a transfer of anything of value\" with a foreign person otherwise subject to sanctions. Amendments in 1988 and 1994 updated this list of protected rights to include the exchange of published information in a variety of formats. The act currently protects the exchange of \"information or informational materials, including but not limited to, publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and news wire feeds,\" provided such exchange is not otherwise controlled for national security or foreign policy reasons related to weapons proliferation or international terrorism. "], "subsections": []}, {"section_title": "USA PATRIOT Act Amendments to IEEPA", "paragraphs": ["Unlike the Trading with the Enemy Act (TWEA), IEEPA did not allow the President to vest assets as originally acted. In 2001, at the request of George W. Bush Administration, Congress amended IEEPA as part of the USA PATRIOT Act to return to the President the authority to vest frozen assets, but only under certain circumstances:", "... the President may ... when the United States is engaged in armed hostilities or has been attacked by a foreign country or foreign nationals, confiscate any property, subject to the jurisdiction of the United States, of any foreign person, foreign organization, or foreign country that [the President] determines has planned, authorized, aided, or engaged in such hostilities or attacks against the United States; and all right, title, and interest in any property so confiscated shall vest, when, as, and upon the terms directed by the President, in such agency or person as the President may designate from time to time, and upon such terms and conditions as the President may prescribe, such interest or property shall be held, used, administered, liquidated, sold, or otherwise dealt with in the interest of and for the benefit of the United States, and such designated agency or person may perform any and all acts incident to the accomplishment or furtherance of these purposes.", "Speaking about the efforts of intelligence and law enforcement agencies to identify and disrupt the flow of terrorist finances, Attorney General John Ashcroft told Congress:", "At present the President's powers are limited to freezing assets and blocking transactions with terrorist organizations. We need the capacity for more than a freeze. We must be able to seize. Doing business with terrorist organization must be a losing proposition. Terrorist financiers must pay a price for their support of terrorism, which kills innocent Americans.", "Consistent with the President's [issuance of E.O. 13224 ] and his statements [of September 24, 2001], our proposal gives law enforcement the ability to seize the terrorists' assets. Further, criminal liability is imposed on those who knowingly engage in financial transactions, money-laundering involving the proceeds of terrorist acts.", "The House Judiciary Committee report explaining the amendments described its purpose as follows:", "Section 203 of the International Emergency Economic Powers Act (50 U.S.C. \u00a7 1702) grants to the President the power to exercise certain authorities relating to commerce with foreign nations upon his determination that there exists an unusual and extraordinary threat to the United States. Under this authority, the President may, among other things, freeze certain foreign assets within the jurisdiction of the United States. A separate law, the Trading With the Enemy Act, authorizes the President to take title to enemy assets when Congress has declared war.", "Section 159 of this bill amends section 203 of the International Emergency Economic Powers Act to provide the President with authority similar to what he currently has under the Trading With the Enemy Act in circumstances where there has been an armed attack on the United States, or where Congress has enacted a law authorizing the President to use armed force against a foreign country, foreign organization, or foreign national. The proceeds of any foreign assets to which the President takes title under this authority must be placed in a segregated account can only be used in accordance with a statute authorizing the expenditure of such proceeds. ", "Section 159 also makes a number of clarifying and technical changes to section 203 of the International Emergency Economic Powers Act, most of which will not change the way that provision currently is implemented.", "The government has apparently never employed the vesting power to seize Al Qaeda assets within the United States. Instead, the government has sought to confiscate them through forfeiture procedures.", "The first, and to date, apparently only, use of this power under IEEPA occurred on March 20, 2003. On that date, in Executive Order 13290, President George W. Bush ordered the blocked \"property of the Government of Iraq and its agencies, instrumentalities, or controlled entities\" to be vested \"in the Department of the Treasury.... [to] be used to assist the Iraqi people and to assist in the reconstruction of Iraq.\" However, the President's order excluded from confiscation Iraq's diplomatic and consular property, as well as assets that had, prior to March 20, 2003, been ordered attached in satisfaction of judgments against Iraq rendered pursuant to the terrorist suit provision of the Foreign Sovereign Immunities Act and \u00a7 201 of the Terrorism Risk Insurance Act (which reportedly totaled about $300 million) .", "A subsequent executive order blocked the property of former Iraqi officials and their families, vesting title of such blocked funds in the Department of the Treasury for transfer to the Development Fund for Iraq (DFI) to be \"used to meet the humanitarian needs of the Iraqi people, for the economic reconstruction and repair of Iraq's infrastructure, for the continued disarmament of Iraq, for the cost of Iraqi civilian administration, and for other purposes benefitting of the Iraqi people.\" The DFI was established by UN Security Council Resolution 1483, which required member states to freeze all assets of the former Iraqi government and of Saddam Hussein, senior officials of his regime and their family members, and transfer such assets to the DFI, which was then administered by the United States. Most of the vested assets were used by the Coalition Provision Authority (CPA) for reconstruction projects and ministry operations.", "The USA PATRIOT Act made three other amendments to Section 203 of IEEPA. After the power to investigate, it added the power to block assets during the pendency of an investigation. It clarified that the type of interest in property subject to IEEPA is an \"interest by any person, or with respect to any property, subject to the jurisdiction of the United States.\" It also added subsection (c), which provides:", "In any judicial review of a determination made under this section, if the determination was based on classified information (as defined in section 1(a) of the Classified Information Procedures Act) such information may be submitted to the reviewing court ex parte and in camera. This subsection does not confer or imply any right to judicial review.", "As described in the House Judiciary Committee report, these provisions were meant to clarify and codify existing practices."], "subsections": []}]}, {"section_title": "IEEPA Trends", "paragraphs": ["Like TWEA prior to its amendment in 1977, the President and Congress together have often turned to IEEPA to impose economic sanctions in furtherance of U.S. foreign policy and national security objectives. While initially enacted to rein in presidential emergency authority, presidential emergency use of IEEPA has expanded in scale, scope, and frequency since the statute's enactment. The House report on IEEPA stated, \"emergencies are by their nature rare and brief, and are not to be equated with normal, ongoing problems.\" National emergencies invoking IEEPA, however, have increased in frequency and length since its enactment. ", "Since 1977, Presidents have invoked IEEPA in 54 declarations of national emergency. On average, these emergencies last nearly a decade. Most emergencies have been geographically specific, targeting a specific country or government. However, since 1990, Presidents have declared non-geographically-specific emergencies in response to issues like weapons proliferation, global terrorism, and malicious cyber-enabled activities. The erosion of geographic limitations has been accompanied by an expansion in the nature of the targets of sanctions issued under IEEPA authority. Originally, IEEPA was used to target foreign governments; however, Presidents have increasingly targeted groups and individuals. While Presidents usually make use of IEEPA as an emergency power, Congress has also directed the use of IEEPA or expressed its approval of presidential emergency use in several statutes. "], "subsections": [{"section_title": "Presidential Emergency Use91", "paragraphs": ["IEEPA is the most frequently cited emergency authority when the President invokes NEA authorities to declare a national emergency. ( Figure 1 ). Rather than referencing the same set of emergencies, as had been the case with TWEA, IEEPA has required the President to declare a national emergency for each independent use. As a result, the number of national emergencies declared under the terms of the NEA has proliferated over the past four decades. Presidents declared only four national emergencies under the auspices of TWEA in the four decades prior to IEEPA's enactment. In contrast, Presidents have invoked IEEPA in 54 of the 61 declarations of national emergency issued under the National Emergen cies Act. As of March 1, 2019, there were 32 ongoing national emergencies; all but three involved IEEPA. ", "Each year since 1990, Presidents have issued roughly 4.5 executive orders citing IEEPA and declared 1.5 new national emergencies citing IEEPA. ( Figure 2 ).", "On average, emergencies invoking IEEPA last nearly a decade. The longest emergency was also the first. President Jimmy Carter, in response to the Iranian hostage crisis of 1979, declared the first national emergency under the provisions of the National Emergencies Act and invoked IEEPA. Six successive Presidents have renewed that emergency annually for nearly forty years. As of March 1, 2019, that emergency is still in effect, largely to provide a legal basis for resolving matters of ownership of the Shah's disputed assets. That initial emergency aside, the length of emergencies invoking IEEPA has increased each decade. The average length of an emergency invoking IEEPA declared in the 1980s was four years. That average extended to 10 years for emergencies declared in the 1990s and 11 years for emergencies declared in the 2000s ( Figure 3 ). As such, the number of ongoing national emergencies has grown nearly continuously since the enactment of IEEPA and the NEA ( Figure 4 ). Between January 1, 1979, and January 1, 2019, there were on average 14 ongoing national emergencies each year, 13 of which invoked IEEPA.", "In most cases, the declared emergencies citing IEEPA have been geographically specific ( Figure 5 ). For example, in the first use of IEEPA, President Jimmy Carter issued an executive order that both declared a national emergency with respect to the \"situation in Iran\" and \"blocked all property and interests in property of the Government of Iran [...].\" Five months later, President Carter issued a second order dramatically expanding the scope of the first EO and effectively blocked the transfer of all goods, money, or credit destined for Iran by anyone subject to the jurisdiction of the United States. A further order expanded the coverage to block imports to the United States from Iran. Together, these orders touched upon virtually all economic contacts between any place or legal person subject to the jurisdiction of the United States and the territory and government of Iran. ", "Many of the executive orders invoking IEEPA have followed this pattern of limiting the scope to a specific territory, government, or its nationals. Executive Order 12513, for example, prohibited \"imports into the United States of goods and services of Nicaraguan origin\" and \"exports from the United States of goods to or destined for Nicaragua.\" The order likewise prohibited Nicaraguan air carriers and vessels of Nicaraguan registry from entering U.S. ports. Executive Order 12532 prohibited various transactions with the \"Government of South Africa or to entities owned or controlled by that Government.\"", "While the majority (38) of national emergencies invoking IEEPA have been geographically specific, ten have lacked explicit geographic limitations. President George H.W. Bush declared the first geographically nonspecific emergency in response to the threat posed by the proliferation of chemical and biological weapons. Similarly, President George W. Bush declared a national emergency in response to the threat posed by \"persons who commit, threaten to commit, or support terrorism.\" President Barack Obama declared emergencies to respond to the threats of \"transnational criminal organizations\" and \"persons engaging in malicious cyber-enabled activities.\" Without explicit geographic limitations, these orders have included provisions that are global in scope. These geographically nonspecific emergencies have increased in frequency over the past 40 years\u2014three of the ten have been declared since 2015. ", "In addition to the erosion of geographic limitations, the stated motivations for declaring national emergencies have expanded in scope as well. Initially, stated rationales for declarations of national emergency citing IEEPA were short and often referenced either a specific geography or the specific actions of a government. Presidents found that circumstances like \"the situation in Iran,\" or the \"policies and actions of the Government of Nicaragua,\" constituted \"unusual and extraordinary threat[s] to the national security and foreign policy of the United States\" and would therefore declare a national emergency. ", "The stated rationales have, however, expanded over time in both the length and subject matter. Presidents have increasingly declared national emergencies, in part, to respond to human and civil rights abuses, slavery, denial of religious freedom, political repression, public corruption, and the undermining of democratic processes. While the first reference to human rights violations as a rationale for a declaration of national emergency came in 1985, most of such references have come in the past twenty years. Table A-2 .", "Presidents have also expanded the nature of the targets of IEEPA sanctions. Originally, the targets of sanctions issued under IEEPA were foreign governments. The first use of IEEPA targeted \"Iranian Government Property.\" Use of IEEPA quickly expanded to target geographically defined regions. Nevertheless, Presidents have also increasingly targeted groups, such as political parties or terrorist organizations, and individuals, such as supporters of terrorism or suspected narcotics traffickers. ", "The first instances of orders directed at groups or persons were limited to foreign groups or persons. For example, in Executive Order 12978, President Bill Clinton targeted specific \"foreign persons\" and \"persons determined [...] to be owned or controlled by, or to act for or on behalf of\" such foreign persons. An excerpt is included below:", "Except to the extent provided in section 203(b) of IEEPA (50 U.S.C. 1702(b)) and in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date, I hereby order blocked all property and interests in property that are or hereafter come within the United States, or that are or hereafter come within the possession or control of United States persons, of:", "(a)\u2007the foreign persons listed in the Annex to this order;", "(b)\u2007 foreign persons determined by the Secretary of the Treasury, in consultation with the Attorney General and the Secretary of State:", "(i)\u2007to play a significant role in international narcotics trafficking centered in Colombia; or", "(ii)\u2007materially to assist in, or provide financial or technological support for or goods or services in support of, the narcotics trafficking activities of persons designated in or pursuant to this order; and", "(c)\u2007persons determined by the Secretary of the Treasury, in consultation with the Attorney General and the Secretary of State, to be owned or controlled by, or to act for or on behalf of, persons designated in or pursuant to this order.", "However, in 2001, President George W. Bush issued Executive Order 13219 to target \"persons who threaten international stabilization efforts in the Western Balkans.\" While the order was similar to that of Executive Order 12978, it removed the qualifier \"foreign.\" As such, persons in the United States, including U.S. citizens, could be targets of the order. The following is an excerpt of the order:", "Except to the extent provided in section 203(b)(1), (3), and (4) of IEEPA (50 U.S.C. 1702(b)(1), (3), and (4)), the Trade Sanctions Reform and Export Enhancement Act of 2000 (title IX, P.L. 106-387 ), and in regulations, orders, directives, or licenses that may hereafter be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date, all property and interests in property of:", "(i)\u2007 the persons listed in the Annex to this order; and", "(ii)\u2007 persons designated by the Secretary of the Treasury, in consultation with the Secretary of State, because they are found:", "(A)\u2007to have committed, or to pose a significant risk of committing, acts of violence...", "Several subsequent invocations of IEEPA have similarly not been limited to foreign targets.", "In sum, presidential emergency use of IEEPA was directed at foreign states initially, with targets that were delimited by geography or nationality. Since the 1990s, however, Presidents have expanded the scope of their declarations to include individual persons, regardless of nationality or geographic location, who are engaged in specific activities."], "subsections": []}, {"section_title": "Congressional Nonemergency Use and Retroactive Approval", "paragraphs": ["While IEEPA is often categorized as an emergency statute, Congress has used IEEPA outside of the context of national emergencies. When Congress legislates sanctions, it often authorizes or directs the President to use IEEPA authorities to impose those sanctions. ", "In the Nicaragua Human Rights and Anticorruption Act of 2018, the most recent example, Congress directed the President to exercise \"all powers granted to the President [by IEEPA] to the extent necessary to block and prohibit [certain transactions].\" Penalties for violations by a person of a measure imposed by the President under the Act would be, likewise, determined by reference to IEEPA. ", "The trend has been long-term. Congress first directed the President to make use of IEEPA authorities in 1986 as part of an effort to assist Haiti in the recovery of assets illegally diverted by its former government. That statute provided:", "The President shall exercise the authorities granted by section 203 of the International Emergency Economic Powers Act [50 USC 1702] to assist the Government of Haiti in its efforts to recover, through legal proceedings, assets which the Government of Haiti alleges were stolen by former president-for-life Jean Claude Duvalier and other individuals associated with the Duvalier regime. This subsection shall be deemed to satisfy the requirements of section 202 of that Act. [50 USC 1701]", "In directing the President to use IEEPA, Congress waived the requirement that he declare a national emergency (and none was declared). ", "Subsequent legislation has followed this general pattern, with slight variations in language and specificity. The following is an example of current legislative language that has appeared in several recent statutes:", "(a) IN GENERAL.\u2014The President shall impose the sanctions described in subsection (b) with respect to\u2014", "...", "(b) SANCTIONS DESCRIBED.\u2014", "(1) IN GENERAL.\u2014The sanctions described in this subsection are the following:", "(A) ASSET BLOCKING.\u2014The exercise of all powers granted to the President by the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to the extent necessary to block and prohibit all transactions in all property and interests in property of a person determined by the President to be subject to subsection (a) if such property and interests in property are in the United States, come within the United States, or are or come within the possession or control of a United States person.", "...", "(2) PENALTIES.\u2014A person that violates, attempts to violate, conspires to violate, or causes a violation of paragraph (1)(A) or any regulation, license, or order issued to carry out paragraph (1)(A) shall be subject to the penalties set forth in subsections (b) and (c) of section 206 of the International Emergency Economic Powers Act (50 U.S.C. 1705) to the same extent as a person that commits an unlawful act described in subsection (a) of that section.", "Congress has also expressed, retroactively, its approval of unilateral presidential invocations of IEEPA in the context of a national emergency. In the Countering Iran's Destabilizing Activities Act of 2017, for example, Congress declared, \"It is the sense of Congress that the Secretary of the Treasury and the Secretary of State should continue to implement Executive Order No. 13382.\"", "Presidents, however, have also used IEEPA to preempt or modify parallel congressional activity. On September 9, 1985, President Reagan, finding \"that the policies and actions of the Government of South Africa constitute an unusual and extraordinary threat to the foreign policy and economy of the United States,\" declared a national emergency and limited transactions with South Africa. The President declared the emergency despite the fact that legislation limiting transactions with South Africa was quickly making its way through Congress. In remarks about the declaration, President Reagan stated that he had been opposed to the bill contemplated by Congress because unspecified provisions \"would have harmed the very people [the U.S. was] trying to help.\" Nevertheless, members of the press at the time (and at least one scholar since) noted that the limitations imposed by the Executive Order and the provisions in legislation then winding its way through Congress were \"substantially similar.\""], "subsections": []}]}, {"section_title": "Current Uses of IEEPA", "paragraphs": ["In general, IEEPA has served as an integral part of the postwar international sanctions regime. The President, either through a declaration of emergency or via statutory direction, has used IEEPA to limit economic transactions in support of administrative and congressional national security and foreign policy goals. Much of the action taken pursuant to IEEPA has involved blocking transactions and freezing assets. ", "Once the President declares that a national emergency exists, he may use the authority in Section 203 of IEEPA (Grants of Authorities; 50 U.S.C. \u00a7 1702) to investigate, regulate, or prohibit foreign exchange transactions, transfers of credit, transfers of securities, payments, and may take specified actions relating to property in which a foreign country or person has interest\u2014freezing assets, blocking property and interests in property, prohibiting U.S. persons from entering into transactions related to frozen assets and blocked property, and in some instances denying entry into the United States. ", "Pursuant to Section 203, Presidents have", "prohibited transactions with and blocked property of those designated as engaging in malicious cyber-enabled activities, including \"interfering with or undermining election processes or institutions\" [Executive Order 13694 of April 1, 2015, as amended; 50 U.S.C. \u00a7 1701 note. See also Executive Order 13848 of September 12, 2018; 83 F.R. 46843.]; prohibited transactions with and blocked property of those designated as illicit narcotics traffickers including foreign drug kingpins; prohibited transactions with and blocked property of those designated as engaging in human rights abuses or significant corruption; prohibited transactions related to illicit trade in rough diamonds; prohibited transactions with and blocked property of those designated as Transnational Criminal Organizations; prohibited transactions with \"those who disrupt the Middle East peace process;\" prohibited transactions related to overflights with certain nations; instituted and maintained maritime restrictions; prohibited transactions related to weapons of mass destruction, in coordination with export controls authorized by the Arms Export Control Act and the Export Administration Act of 1979, and in furtherance of efforts to deter the weapons programs of specific countries (i.e., Iran, North Korea); prohibited transactions those designated as \"persons who commit, threaten to commit, or support terrorism;\" maintained the dual-use export control system at times when its then-underlying authority, the Export Administration Act authority had lapsed; blocked property of and transactions with those designated as engaged in cyber activities that compromise critical infrastructures including election processes or the private sector's trade secrets; blocked property of and prohibited transactions with those designated as responsible for serious human rights abuse or engaged in corruption; blocked certain property of and transactions with foreign nationals of specific countries those designated as engaged in activities that constitute an extraordinary threat. ", "No President has used IEEPA to place tariffs on imported products from a specific country or on products imported to the United States in general. However, IEEPA's similarity to TWEA, coupled with its relatively frequent use to ban imports and exports, suggests that such an action could happen. In addition, no President has used IEEPA to enact a policy that was primarily domestic in effect. Some scholars argue, however, that the interconnectedness of the global economy means it would probably be permissible to use IEEPA to take an action that was primarily domestic in effect."], "subsections": []}, {"section_title": "Use of Assets Frozen under IEEPA", "paragraphs": ["The ultimate disposition of assets frozen under IEEPA may serve as an important part of the leverage economic sanctions provide to influence the behavior of foreign actors. The President and Congress have each at times determined the fate of blocked assets to further foreign policy goals."], "subsections": [{"section_title": "Presidential Use of Foreign Assets Frozen under IEEPA", "paragraphs": ["Presidents have used frozen assets as a bargaining tool during foreign policy crises and to bring a resolution to such crises, at times by unfreezing the assets, returning them to the sanctioned entity or channeling them to a follow-on government. The following are some examples of how Presidents have made use of blocked assets to resolve foreign policy issues.", "President Carter invoked authority under IEEPA to impose trade sanctions against Iran, freezing Iranian assets in the United States, in response to the hostage crisis in 1979. On January 19, 1981, the United States and Iran entered into a series of executive agreements brokered by Algeria under which the hostages were freed, a portion of the blocked assets ($5.1 billion) was used to repay outstanding U.S. bank loans to Iran, another part ($2.8 billion) was returned directly to Iran, another $1 billion was transferred into a security account in the Hague to pay other U.S. claims against Iran as arbitrated by the Iran-U.S. Claims Tribunal (IUSCT), and an additional $2 billion remained blocked pending further agreement with Iran or decision of the Tribunal. The United States also undertook to freeze the assets of the former Shah's estate along with those of the Shah's close relatives pending litigation in U.S. courts to ascertain Iran's right to their return. Iran's litigation was unsuccessful, and none of the contested assets were returned to Iran.", "Presidents have also been able to channel frozen assets to opposition governments in cases where the United States continued to recognize a previous government that had been removed by coup d'\u00e9tat or otherwise replaced as the legitimate government of a country. For example, after Panamanian President Eric Arturo Delvalle tried to dismiss de facto military ruler General Manuel Noriega from his post as head of the Panamanian Defense Forces, which resulted in Delvalle's own dismissal by the Panamanian Legislative Assembly, President Reagan recognized Delvalle as the legitimate head of government and instituted economic sanctions against the Noriega regime. The Department of State advised U.S. banks not to disburse funds to the Noriega regime, and Delvalle was able to obtain court orders permitting him access to the funds. President Reagan issued Executive Order 12635, which blocked all property and interests in payments of the government of Panama, and the Department of the Treasury issued regulations requiring companies who owed money to Panama to pay those funds into an escrow account established at the Federal Reserve Bank of New York, which also held payments owed by the United States for the operation of the Panama Canal Commission. Some of the funds in the escrow account were used to pay the operating expenses of the Delvalle government. After the U.S. invasion of Panama, President George H.W. Bush lifted economic sanctions and used some of the frozen funds to repay debts owed by Panama to foreign creditors, with remaining funds returned to the successor government.", "In a similar more recent case, the Trump Administration's recognition of Venezuelan opposition leader Juan Guaid\u00f3 as Venezuela's interim president permitted Guaid\u00f3 access to Venezuelan government assets held at the United States Federal Reserve and other insured United States financial institutions. President Barrack Obama initially froze Venezuelan government assets in 2015, pursuant to IEEPA and the Venezuela Defense of Human Rights and Civil Society Act of 2014. After official recognition of Guaid\u00f3, the Trump Administration imposed new sanctions under IEEPA to freeze the assets of the main Venezuelan state-owned oil company, Petr\u00f3leos de Venezuela (Pdvsa), which could both significantly reduce funds available to the regime of Nicolas Maduro and channel them to Guaid\u00f3.", "There is also precedent for using frozen foreign assets for purposes authorized by the U.N. Security Council. After the first war with Iraq, President George H.W. Bush ordered the transfer of frozen Iraqi assets derived from the sale of Iraqi petroleum held by U.S. banks to be transferred to a holding account in the Federal Reserve Bank of New York to fulfill \"the rights and obligations of the United States under U.N. Security Council Resolution No. 778.\" The President cited a section of the United Nations Participation Act (UNPA), as well as IEEPA, as authority to take the action. The transferred funds were used to provide humanitarian relief and to finance the United Nations Compensation Commission, which was established to adjudicate claims against Iraq arising from the invasion. Other Iraqi assets remained frozen and accumulated interest until they were vested in 2003 (see below). ", "In some cases, the United States has ended sanctions and returned frozen assets to successor governments. In the case of the former Yugoslavia, for example, in 2003, $237.6 million in frozen funds belonging to the Central Bank of the Socialist Federal Republic of Yugoslavia were transferred to the central banks of the successor states. In the case of Afghanistan, $217 million in frozen funds belonging to the Taliban were released to the Afghan Interim Authority in January 2002."], "subsections": []}, {"section_title": "Congressionally Mandated Use of Frozen Foreign Assets and Proceeds of Sanctions", "paragraphs": ["The executive branch has traditionally resisted congressional efforts to vest foreign assets to pay U.S. claimants without first obtaining a settlement agreement with the country in question. Congress has overcome such resistance in the case of foreign governments that have been designated as \"State Supporters of Terrorism.\" U.S. nationals who are victims of state-supported terrorism involving designated states have been able to sue those countries for damages under an exception to the Foreign Sovereign Immunities Act (FSIA) since 1996. ", "To facilitate the payment of judgments under the exception, Congress passed Section 117 of the Treasury and General Government Appropriations Act, 1999, which further amended the FSIA by allowing attachment and execution against state property with respect to which financial transactions are prohibited or regulated under Section 5(b) TWEA, Section 620(a) of the Foreign Assistance Act (authorizing the trade embargo against Cuba), or Sections 202 and 203 of IEEPA, or any orders, licenses or other authority issued under these statutes. Because of the Clinton Administration's continuing objections, however, Section 117 also gave the President authority to \"waive the requirements of this section in the interest of national security,\" an authority President Clinton promptly exercised in signing the statute into law. ", "The Section 117 waiver authority protecting blocked foreign government assets from attachment to satisfy terrorism judgments has continued in effect ever since, prompting Congress to take other actions to make frozen assets available to judgment holders. Congress enacted \u00a72002 of the Victims of Trafficking and Violence Protection Act of 2000 (VTVPA) to mandate the payment from frozen Cuban assets of compensatory damages awarded against Cuba under the FSIA terrorism exception on or prior to July 20, 2000. ", "The Department of the Treasury subsequently vested $96.7 million in funds generated from long-distance telephone services between the United States and Cuba in order to compensate claimants in Alejandre v. Republic of Cuba , the lawsuit based on the1996 downing of two unarmed U.S. civilian airplanes by the Cuban air force. Another payment of more than $7 million was made using vested Cuban assets to a Florida woman who had won a lawsuit against Cuba based on her marriage to a Cuban spy. ", "As unpaid judgments against designated state sponsors of terrorism continued to mount, Congress enacted the Terrorism Risk Insurance Act (TRIA). Section 201 of TRIA overrode long-standing objections by the executive branch to make the frozen assets of terrorist states available to satisfy judgments for compensatory damages against such states (and organizations and persons) as follows:", "Notwithstanding any other provision of law, and except as provided in subsection (b), in every case in which a person has obtained a judgment against a terrorist party on a claim based upon an act of terrorism, or for which a terrorist party is not immune under section 1605(a)(7) of title 28, United States Code, the blocked assets of that terrorist party (including the blocked assets of any agency or instrumentality of that terrorist party) shall be subject to execution or attachment in aid of execution in order to satisfy such judgment to the extent of any compensatory damages for which such terrorist party has been adjudged liable.", "Subsection (b) of Section 201 provided waiver authority \"in the national security interest,\" but only with respect to frozen foreign government \"property subject to the Vienna Convention on Diplomatic Relations or the Vienna Convention on Consular Relations.\" When Congress amended the FSIA in 2008 to revamp the terrorism exception, it provided that judgments entered under the new exception could be satisfied out of the property of a foreign state notwithstanding the fact that the property in question is regulated by the United States government pursuant to TWEA or IEEPA.", "Congress has also directed that the proceeds from certain sanctions violations be paid into a fund for providing compensation to the former hostages of Iran and terrorist state judgment creditors. To fund the program, Congress designated that certain real property and bank accounts owned by Iran and forfeited to the United States could go into the United States Victims of State Sponsored Terrorism Fund, along with the sum of $1,025,000,000, representing the amount paid to the United States pursuant to the June 27, 2014, plea agreement and settlement between the United States and BNP Paribas for sanctions violations. The fund is replenished through criminal penalties and forfeitures for violations of IEEPA or TWEA-based regulations, or any related civil or criminal conspiracy, scheme, or other federal offense related to doing business or acting on behalf of a state sponsor of terrorism. Half of all civil penalties and forfeitures relating to the same offenses are also deposited into the fund."], "subsections": []}]}, {"section_title": "Judicial Interpretation of IEEPA", "paragraphs": ["A number of lawsuits seeking to overturn actions taken pursuant to IEEPA have made their way through the judicial system, including challenges to the breadth of congressionally delegated authority and assertions of violations of constitutional rights. As demonstrated below, most of these challenges have failed. The few challenges that succeeded did not seriously undermine the overarching statutory scheme for sanctions."], "subsections": [{"section_title": "Dames & Moore v. Regan", "paragraphs": ["The breadth of presidential power under IEEPA is illustrated by the Supreme Court's 1981 opinion in Dames & Moore v. Regan . In Dames & Moore , petitioners had challenged President Carter's executive order establishing regulations to further compliance with the terms of the Algiers Accords, which the President had entered into to end the hostage crisis with Iran. Under these agreements, the United States was obligated (1) to terminate all legal proceedings in U.S. courts involving claims of U.S. nationals against Iran, (2) to nullify all attachments and judgments, and (3) to resolve outstanding claims exclusively through binding arbitration in the Iran-U.S. Claims Tribunal (IUSCT). The President, through executive orders, revoked all licenses that permitted the exercise of \"any right, power, or privilege\" with regard to Iranian funds, nullified all non-Iranian interests in assets acquired after a previous blocking order, and required banks holding Iranian assets to transfer them to the Federal Reserve Bank of New York to be held or transferred as directed by the Secretary of the Treasury.", "Dames and Moore had sued Iran for breach of contract to recover compensation for work performed. The district court had entered summary judgment in favor of Dames and Moore and issued an order attaching certain Iranian assets for satisfaction of any judgment that might result, but stayed the case pending appeal. The executive orders and regulations implementing the Algiers Accords resulted in the nullification of this prejudgment attachment and the dismissal of the case against Iran, directing that it be filed at the IUSCT. ", "In response, Dames and Moore sued the government. The plaintiffs claimed that the President and the Secretary of the Treasury exceeded their statutory and constitutional powers to the extent they adversely affected Dames and Moore's judgment against Iran, the execution of that judgment, the prejudgment attachments, and the plaintiff's ability to continue to litigate against the Iranian banks.", "The government defended its actions, relying largely on IEEPA, which provided explicit support for most of the measures taken\u2014nullification of the prejudgment attachment and transfer of the property to Iran\u2014but could not be read to authorize actions affecting the suspension of claims in U.S. courts. Justice Rehnquist wrote for the majority:", "Although we have declined to conclude that the IEEPA\u2026directly authorizes the President's suspension of claims for the reasons noted, we cannot ignore the general tenor of Congress' legislation in this area in trying to determine whether the President is acting alone or at least with the acceptance of Congress. As we have noted, Congress cannot anticipate and legislate with regard to every possible action the President may find it necessary to take or every possible situation in which he might act. Such failure of Congress specifically to delegate authority does not, \"especially . . . in the areas of foreign policy and national security,\" imply \"congressional disapproval\" of action taken by the Executive. On the contrary, the enactment of legislation closely related to the question of the President's authority in a particular case which evinces legislative intent to accord the President broad discretion may be considered to \"invite\" \"measures on independent presidential responsibility.\" At least this is so where there is no contrary indication of legislative intent and when, as here, there is a history of congressional acquiescence in conduct of the sort engaged in by the President.", "The Court remarked that Congress's implicit approval of the long-standing presidential practice of settling international claims by executive agreement was critical to its holding that the challenged actions were not in conflict with acts of Congress. For support, the Court cited to Justice Frankfurter's concurrence in Youngstown Sheet and Tube Co. v. Sawyer stating that \"a systematic, unbroken, executive practice, long pursued to the knowledge of the Congress and never before questioned \u2026 may be treated as a gloss on 'Executive Power' vested in the President by \u00a7 1 of Art. II.\" Consequently, it may be argued that Congress's exclusion of certain express powers in IEEPA do not necessarily preclude the President from exercising them, at least where a court finds sufficient precedent exists.", "Lower courts have examined IEEPA under a number of other constitutional doctrines."], "subsections": []}, {"section_title": "Separation of Powers\u2014Non-Delegation Doctrine", "paragraphs": ["Courts have reviewed whether Congress violated the non-delegation principle of separation of powers by delegating too much power to the President to legislate, in particular by creating new crimes. These challenges have generally failed. As the U.S. Court of Appeals for the Second Circuit explained while evaluating IEEPA, delegations of congressional authority are constitutional so long as Congress provides through a legislative act an \"intelligible principle\" governing the exercise of the delegated authority. Even if the standards are higher for delegations of authority to define criminal offenses, the court held, IEEPA provides sufficient guidance. The court stated:", "The IEEPA \"meaningfully constrains the [President's] discretion,\" by requiring that \"[t]he authorities granted to the President ... may only be exercised to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared.\" And the authorities delegated are defined and limited.", "The Second Circuit found it significant that \"IEEPA relates to foreign affairs\u2014an area in which the President has greater discretion,\" bolstering its view that IEEPA does not violate the non-delegation doctrine. "], "subsections": []}, {"section_title": "Separation of Powers\u2014Legislative Veto", "paragraphs": ["The U.S. Court of Appeals for the Eleventh Circuit considered whether Section 207(b) of IEEPA is an unconstitutional legislative veto. That provision states:", "The authorities described in subsection (a)(1) may not continue to be exercised under this section if the national emergency is terminated by the Congress by concurrent resolution pursuant to section 202 of the National Emergencies Act [50 U.S.C. \u00a7 1622] and if the Congress specifies in such concurrent resolution that such authorities may not continue to be exercised under this section.", "In U.S. v. Romero-Fernandez , two defendants convicted of violating the terms of an executive order issued under IEEPA argued on appeal that IEEPA was unconstitutional, in part, because of the above provision. The Eleventh Circuit accepted that the provision was an unconstitutional legislative veto (as conceded by the government) based on INS v. Chadha , in which the Supreme Court held that Congress cannot void the exercise of power by the executive branch through concurrent resolution, but can act only through bicameral passage followed by presentment of the law to the President. The Eleventh Circuit nevertheless upheld the defendants' convictions for violations of IEEPA regulations, holding that the legislative veto provision was severable from the rest of the statute."], "subsections": []}, {"section_title": "Fifth Amendment \"Takings\" Clause", "paragraphs": ["Courts have also addressed whether certain actions taken pursuant to IEEPA have effected an uncompensated taking of property rights in violation of the Fifth Amendment. The Fifth Amendment's Takings Clause prohibits \"private property [from being] taken for public use, without just compensation.\" The Fifth Amendment's prohibitions apply as well to regulatory takings, in which the government does not physically take property but instead imposes restrictions on the right of enjoyment that decreases the value of the property or right therein.", "The Supreme Court has held that the nullification of prejudgment attachments pursuant to regulations issued under IEEPA was not an uncompensated taking, suggesting that the reason for this position was the contingent nature of the licenses that had authorized the attachments. The Court also suggested that the broader purpose of the statute supported the view that there was no uncompensated taking:", "This Court has previously recognized that the congressional purpose in authorizing blocking orders is \"to put control of foreign assets in the hands of the President....\" Such orders permit the President to maintain the foreign assets at his disposal for use in negotiating the resolution of a declared national emergency. The frozen assets serve as a \"bargaining chip\" to be used by the President when dealing with a hostile country. Accordingly, it is difficult to accept petitioner's argument because the practical effect of it is to allow individual claimants throughout the country to minimize or wholly eliminate this \"bargaining chip\" through attachments, garnishments, or similar encumbrances on property. Neither the purpose the statute was enacted to serve nor its plain language supports such a result.", "Similarly, a lower court held that the extinguishment of contractual rights due to sanctions enacted pursuant to IEEPA does not amount to a regulatory taking requiring compensation under the Fifth Amendment. Even though the plaintiff suffered \"obvious economic loss\" due to the sanctions regulations, that factor alone was not enough to sustain plaintiff's claim of a compensable taking. The court quoted long-standing Supreme Court precedent to support its finding:", "A new tariff, an embargo, a draft, or a war may inevitably bring upon individuals great losses; may, indeed, render valuable property almost valueless. They may destroy the worth of contracts. But whoever supposed that, because of this, a tariff could not be changed, or a non-intercourse act, or an embargo be enacted, or a war be declared? .... [W]as it ever imagined this was taking private property without compensation or without due process of law?", "Accordingly, it seems unlikely that entities whose business interests are harmed by the imposition of sanctions pursuant to IEEPA will be entitled to compensation from the government for their losses.", "Persons whose assets have been directly blocked by the U.S. Department of the Treasury Office of Foreign Assets Control (OFAC) pursuant to IEEPA have likewise found little success challenging the loss of the use of their assets as uncompensated takings. Many courts have recognized that a temporary blocking of assets does not constitute a taking because it is a temporary action that does not vest title in the United States. This conclusion is apparently so even if the blocking of assets necessitates the closing altogether of a business enterprise. In some circumstances, however, a court may analyze at least the initial blocking of assets under a Fourth Amendment standard for seizure. One court found a blocking to be unreasonable under a Fourth Amendment standard where there was no reason that OFAC could not have first obtained a judicial warrant."], "subsections": []}, {"section_title": "Fifth Amendment \"Due Process\" Clause", "paragraphs": ["Some persons whose assets have been blocked have asserted that their right to due process has been violated. The Due Process Clause of the Fifth Amendment provides that no person shall be deprived of life, liberty, or property, without due process of law. Where one company protested that the blocking of its assets without a pre-deprivation hearing violated its right to due process, a district court found that a temporary deprivation of property does not necessarily give rise to a right to notice and an opportunity to be heard. A second district court stated that the exigencies of national security and foreign policy considerations that are implicated in IEEPA cases have meant that OFAC historically has not provided pre-deprivation notice in sanctions programs. A third district court stated that OFAC's failure to provide a charitable foundation with notice or a hearing prior to its designation as a terrorist organization and blocking of its assets did not violate its right to procedural due process, because the OFAC designation and blocking order serve the important governmental interest of combating terrorism by curtailing the flow of terrorist financing. That same court also held that prompt action by the government was necessary to protect against the transfer of assets subject to the blocking order.", "In Al Haramain Islamic Foundation v. U.S. Department of Treasury , the U.S. Court of Appeals for the Ninth Circuit considered whether OFAC's use of classified information without any disclosure of its content in its decision to freeze the assets of a charitable organization, and its failure to provide adequate notice and a meaningful opportunity to respond, violated the organization's right to procedural due process. The court applied the balancing test set forth by the Supreme Court in its landmark administrative law case Mathews v. Eldridge to resolve these questions. Under the Eldridge test, to determine if an individual has received constitutional due process, courts must weigh:", "(1) [the person's or entity's] private property interest, ", "(2) the risk of an erroneous deprivation of such interest through the procedures used, as well as the value of additional safeguards, and ", "(3) the Government's interest in maintaining its procedures, including the burdens of additional procedural requirements.\"", "While weighing the interests and risks at issue in Al Haramain , the Ninth Circuit found the organization's property interest to be significant:", "By design, a designation by OFAC completely shutters all domestic operations of an entity. All assets are frozen. No person or organization may conduct any business whatsoever with the entity, other than a very narrow category of actions such as legal defense. Civil penalties attach even for unwitting violations. Criminal penalties, including up to 20 years' imprisonment, attach for willful violations. For domestic organizations such as AHIF\u2013Oregon, a designation means that it conducts no business at all. The designation is indefinite. Although an entity can seek administrative reconsideration and limited judicial relief, those remedies take considerable time, as evidenced by OFAC's long administrative delay in this case and the ordinary delays inherent in our judicial system. In sum, designation is not a mere inconvenience or burden on certain property interests; designation indefinitely renders a domestic organization financially defunct.", "Nevertheless, the court found \"the government's interest in national security [could not] be understated.\" In evaluating the government's interest in maintaining its procedures, the Ninth Circuit explained that the Constitution requires that the government \"take reasonable measures to ensure basic fairness to the private party and that the government follow procedures reasonably designed to protect against erroneous deprivation of the private party's interests.\" While the Ninth Circuit had previously held that the use of undisclosed information in a case involving the exclusion of certain longtime resident aliens should be considered presumptively unconstitutional, the court found that the presumption had been overcome in this case. The Ninth Circuit noted that all federal courts that have considered the argument that OFAC may not use undisclosed classified information in making its determinations have rejected it. Although the court found that OFAC's failure to provide even an unclassified summary of the information at issue was a violation of the organization's due process rights, the court deemed the error harmless because it would not likely have affected the outcome of the case. ", "In the same case, the Ninth Circuit also considered the organization's argument that it had been denied adequate notice and an opportunity to be heard. Specifically, the organization asserted that OFAC had refused to disclose its reasons for investigating and designating the organization, leaving it unable to respond adequately to OFAC's unknown suspicions. Because OFAC had provided the organization with only one document to support its designation over the four-year period between the freezing of its assets and the redesignation of the organization as a specially designated global terrorist (SDGT), the court agreed that the organization had been deprived of due process rights. However, the court found that this error too was harmless."], "subsections": []}, {"section_title": "First Amendment Challenges", "paragraphs": ["Some courts have considered whether asset blocking or penalties imposed pursuant to regulations promulgated under IEEPA have violated the subjects' First Amendment rights to free association, free speech, or religion. Challenges on these grounds have typically failed. Courts have held that there is no First Amendment right to support terrorists. The U.S. Court of Appeals for the District of Columbia Circuit distinguished advocacy from financial support and held that the blocking of assets affected only the ability to provide financial support, but did not implicate the organization's freedom of association. Similarly, a district court interpreted relevant case law to hold that government actions prohibiting charitable contributions are subject to intermediate scrutiny rather than strict scrutiny, a higher standard that applies to political contributions.", "With respect to a free speech challenge brought by a charitable organization whose assets were temporarily blocked during the pendency of an investigation, a district court explained that \"when 'speech' and 'nonspeech' elements are combined in the same course of conduct, a sufficiently important government interest in regulating the nonspeech element can justify incidental limitations on First Amendment freedoms.\" Accordingly, the district court applied the following test to determine whether the designations and blocking actions were lawful. Citing the Supreme Court's opinion in United States v. O'Brien , the court stated that a government regulation is sufficiently justified if:", "it is within the constitutional power of the government; ", "it furthers an important or substantial governmental interest; ", "the governmental interest is unrelated to the suppression of free expression; and", "the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest.", "The court found the government's actions to fall within the bounds of this test:", "First, the President clearly had the power to issue the Executive Order. Second, the Executive Order promotes an important and substantial government interest\u2014that of preventing terrorist attacks. Third, the government's action is unrelated to the suppression of free expression; it prohibits the provision of financial and other support to terrorists. Fourth, the incidental restrictions on First Amendment freedoms are no greater than necessary.", "However, with respect to an organization that was not itself designated as an SDGT but wished to conduct coordinated advocacy with another organization that was so designated, one appellate court found that an OFAC regulation barring such coordinated advocacy based on its content was subject to strict scrutiny. Accordingly, the court rejected the government's reliance on the Supreme Court's decision in Holder v. Humanitarian Law Project to find that the regulation impermissibly implicated the organization's right to free speech. Accordingly, there may be some circumstances where the First Amendment protects speech coordinated with (but not on behalf of) an organization designated as an SDGT."], "subsections": []}, {"section_title": "Use of IEEPA to Continue Enforcing the Export Administration Act (EAA)", "paragraphs": ["Until the recent enactment of the Export Control Reform Act of 2018, export of dual use goods and services was regulated pursuant to the authority of the Export Administration Act (EAA), which was subject to periodic expiry and reauthorization. President Reagan was the first President to use IEEPA as a vehicle for continuing the enforcement of the EAA's export controls. ", "After Congress did not extend the expired EAA, President Reagan issued Executive Order 12444 in 1983, finding that \"unrestricted access of foreign parties to United States commercial goods, technology, and technical data and the existence of certain boycott practices of foreign nations constitute, in light of the expiration of the Export Administration Act of 1979, an unusual and extraordinary threat to the national security.\" Although the EAA had been reauthorized for short periods since its initial expiration in 1983, every subsequent President utilized the authorities granted under IEEPA to maintain the existing system of export controls during periods of lapse. Figure 1 .", "In the latest iteration, President George W. Bush issued Executive Order 13222 in 2001, finding the existence of a national emergency with respect to the expiration of the EAA and directing\u2014pursuant to the authorities allocated under IEEPA\u2014that \"the provisions for administration of the [EAA] shall be carried out under this order so as to continue in full force and effect\u2026the export control system heretofore maintained.\" Presidents Obama and Trump annually extended the 2001 executive order. ", "Courts have generally treated this arrangement as authorized by Congress, although certain provisions of the EAA in effect under IEEPA have led to challenges. The determining factor appears to be whether IEEPA itself provides the President the authority to carry out the challenged action. In one case, the U.S. Court of Appeals for the Fifth Circuit upheld a conviction for an attempt to violate the regulations even though the EAA had expired and did not expressly criminalize such attempts. The circuit court rejected the defendants' argument that the President had exceeded his delegated authority under the EEA by \"enlarging\" the crimes punishable under the regulations. ", "Nevertheless, a district court held that the conspiracy provisions of the EAA regulations were rendered inoperative by the lapse of the EAA and \"could not be repromulgated by executive order under the general powers that IEEPA vests in the President.\" The district court found that, even if Congress intended to preserve the operation of the EAA through IEEPA, that intent was limited by the scope of the statutes' substantive coverage at the time of IEEPA's enactment, when no conspiracy provision existed in either statute.", "The U.S. Court of Appeals for the D.C. Circuit upheld the application of the EAA as a statute permitting the government to withhold information under exemption 3 of the Freedom of Information Act (FOIA), which exempts from disclosure information exempted from disclosure by statute, even though the EAA had expired. Referring to legislative history it interpreted as congressional approval of the use of IEEPA to continue the EAA provisions during periods of lapse, the court stated:", "Although the legislative history does not refer to the EAA's confidentiality provision, it does evince Congress's intent to authorize the President to preserve the operation of the export regulations promulgated under the EAA. Moreover, it is significant for purposes of determining legislative intent that Congress acted with the knowledge that the EAA's export regulations had long provided for confidentiality and that the President's ongoing practice of extending the EAA by executive order had always included these confidentiality protections.", "The D.C. Circuit distinguished this holding in a later case involving appellate jurisdiction over a decision by the Department of Commerce to apply sanctions for a company's violation of the EAA regulations. Pursuant to the regulations and under the direction of the Commerce Department, the company sought judicial review directly in the D.C. Circuit. The D.C. Circuit, however, concluded that it lacked jurisdiction: ", "This court would have jurisdiction pursuant to the President's order only if the President has the authority to confer jurisdiction\u2014an authority that, if it exists, must derive from either the Executive's inherent power under the Constitution or a permissible delegation of power from Congress. The former is unavailing, as the Constitution vests the power to confer jurisdiction in Congress alone. Whether the executive order can provide the basis of our jurisdiction, then, turns on whether the President can confer jurisdiction on this court under the auspices of IEEPA\u2026..We conclude that the President lacks that power. Nothing in the text of IEEPA delegates to the President the authority to grant jurisdiction to any federal court.", "Consequently, the appeal of the agency decision was determined to belong in the district court according to the default rule under the Administrative Procedure Act (APA)."], "subsections": []}]}]}, {"section_title": "Issues and Options for Congress", "paragraphs": ["Congress may wish to address a number of issues with respect to IEEPA; two are addressed here. The first pertains to how Congress has delegated its authority under IEEPA and its umbrella statute, the NEA. The second pertains to choices made in the Export Control Reform Act of 2018."], "subsections": [{"section_title": "Delegation of Authority under IEEPA", "paragraphs": ["Although the stated aim of the drafters of the NEA and IEEPA was to restrain the use of emergency powers, the use of such powers has expanded by several measures. Presidents declare national emergencies and renew them for years or even decades. The limitation of IEEPA to transactions involving some foreign interest was intended to limit IEEPA's domestic application. However, globalization has eroded that limit, as few transactions today do not involve some foreign interest. Many of the other criticisms of TWEA that IEEPA was supposed to address\u2014consultation, time limits, congressional review, scope of power, and logical relationship to the emergency declared\u2014are criticisms that scholars levy against IEEPA today. ", "In general, three common criticisms are levied by scholars with respect to the structure of the NEA and IEEPA that may be of interest to Congress. First, the NEA and IEEPA do not define the phrases \"national emergency\" and \"unusual and extraordinary threat\" and Presidents have interpreted these terms broadly. Second, the scope of presidential authority under IEEPA has become less constrained in a highly globalized era. Third, owing to rulings by the Supreme Court and amendments to the NEA, Congress would likely have to have a two-thirds majority rather than a simple majority to terminate a national emergency. Despite these criticisms, Congress has not acted to terminate or otherwise express displeasure with an emergency declaration invoking IEEPA. This absence of any explicit statement of disapproval, coupled with explicit statements of approval in some instances, may indicate congressional approval of presidential use of IEEPA thus far. Arguably, then, IEEPA could be seen as an effective tool for carrying out the will of Congress."], "subsections": [{"section_title": "Definition of \"National Emergency\" and \"Unusual and Extraordinary Threat\"", "paragraphs": ["Neither the NEA nor IEEPA define what constitutes a \"national emergency.\" IEEPA conditions its invocation in a declaration on its necessity for dealing with an \"unusual and extraordinary threat \u2026 to the national security, foreign policy, or economy of the United States.\" In the markup of IEEPA in the House, Fred Bergsten, then-Assistant Secretary for International Affairs in the Department of the Treasury, praised the requirement that a national emergency for the purposes of IEEPA be \"based on an unusual and extraordinary threat\" because such language \"emphasizes that such powers should be available only in true emergencies.\" Because \"unusual\" and \"extraordinary\" are also undefined, the usual and ordinary invocation of the statute seems to conflict with those statutory conditions. ", "If Congress wanted to refine the meaning of \"national emergency\" or \"unusual and extraordinary threat,\" it could do so through statute. Additionally, Congress could consider requiring some sort of factual finding by a court prior to, or shortly after, the exercise of any authority, such as under the First Militia Act of 1792 or the Foreign Intelligence Surveillance Act. However, Congress may consider that the ambiguity in the existing statute provides the executive with the flexibility necessary to address national emergencies with the requisite dispatch. "], "subsections": []}, {"section_title": "Scope of the Authority", "paragraphs": ["While IEEPA nominally applies only to foreign transactions, the breadth of the phrase, \"any interest of any foreign country or a national thereof\" has left a great deal of room for executive discretion. The interconnectedness of the modern global economy has left few major transactions in which a foreign interest is not involved. As a result, at least one scholar has concluded, \"the exemption of purely domestic transactions from the President's transaction controls seems to be a limitation without substance.\"", "Presidents have used IEEPA since the 1980s to control exports by maintaining the dual-use export control system, enshrined in the Export Administration Regulations (EAR) in times when its underlying authorization, the Export Administration Act (EAA), periodically expired. During those times when Congress did not reauthorize the EAA, Presidents have declared emergencies to maintain the dual-use export control system. The current emergency has been ongoing since 2001. ", "While Presidents have used IEEPA to implement trade restrictions against adversaries, it has not been used as a general way to impose tariffs. However, as noted above, President Nixon used TWEA to impose a 10% ad valorem tariff on goods entering the United States to avoid a balance of payments crisis after he ended the convertibility of the U.S. dollar to gold. Although the use of TWEA in this instance was criticized at the time, it does not appear that the subsequent reforms resulting in the enactment of IEEPA would prevent the President from imposing tariffs or other restrictions on trade. However, the availability of diverse other authorities for addressing trade, including for national security purposes, makes the use of IEEPA for this purpose unlikely. ", "The scope of powers over individual targets is also extensive. Under IEEPA, the President has the power to prohibit all financial transactions with individuals designated by Executive Order. Such power allows the President to block all the assets of a U.S. citizen or permanent resident.", "Such uses of IEEPA may reflect the will of Congress or they may represent a grant of authority that may have gone beyond what Congress originally intended."], "subsections": []}, {"section_title": "Terminating National Emergencies or IEEPA Authorities", "paragraphs": ["The heart of the curtailment of presidential power by the NEA and IEEPA was the provision that Congress could terminate a state of emergency declared pursuant to the NEA with a concurrent resolution. When the \"legislative veto\" was struck down by the Supreme Court (see above), it left Congress with a steeper climb\u2014presumably requiring passage of a veto-proof joint resolution\u2014to terminate a national emergency declared under the NEA. Two such resolutions have ever been introduced and neither declarations of emergency involved IEEPA. The lack of congressional action here could be the result of the necessity of obtaining a veto-proof majority or it could be that the use of IEEPA has so far reflected the will of Congress.", "If Congress wanted to assert more authority over the use of IEEPA, it could amend the NEA or IEEPA to include a \"sunset provision,\" terminating any national emergency after a certain number of days. At least one scholar has recommended such an amendment. Alternatively, Congress could amend IEEPA to provide for a review mechanism that would give Congress an active role. In the Senate during the 115 th Congress, for example, Senator Mike Lee introduced the Global Trade Accountability Act of 2017 required the President to report to Congress on any proposed trade action (including the use of IEEPA), including a description of the proposal together with a list of items to be affected, an economic impact study of the proposal including potential retaliation. Congress, using expedited procedures, would need to approve the President's action through a joint resolution within a 60-day period. The legislation would have provided for a temporary one-time unilateral trade action for a 90-day period. Similarly, in the 116 th Congress, Senator Lee introduced S. 764 , a bill to provide for congressional approval of national emergency declarations, and for other purposes, which would amend the NEA to require an act of Congress within 30 days to allow a national emergency to continue. ", "Another approach would establish a means for Congress to pass a resolution of disapproval if IEEPA authorities are invoked. An example of this approach is the Trade Authority Protection Act (H.R. 5760). After the submission of similar reporting requirement to S. 177 (above), Congress could, under Congressional Review Act (CRA)-style procedures, pass a joint resolution of disapproval. Congress does have the authority to pass a joint resolution under IEEPA, as noted above, but the use of CRA procedures would allow for certain expedited consideration. ", "Alternatively, Congress could use any of these mechanisms to amend the current disapproval resolution process in IEEPA or the NEA itself. "], "subsections": []}, {"section_title": "The Status Quo", "paragraphs": ["In testimony before the House Committee on International Relations in 1977, Professor Harold G. Maier summed up the main criticisms of TWEA:", "Section 5(b)'s effect is no longer confined to \"emergency situations\" in the sense of existing imminent danger. The continuing retroactive approval, either explicit or implicit, by Congress of broad executive interpretations of the scope of powers which it confers has converted the section into a general grant of legislative authority to the President\u2026\"", "Like TWEA before it, IEEPA sits at the center of the modern U.S. sanction regime. Like TWEA before it, Congress has often approved explicitly of the President's use of IEEPA. In several circumstances, Congress has directed the President to impose a variety of sanctions under IEEPA and waived the requirement of an emergency declaration. Even when Congress has not given explicit approval, no Member of Congress has ever introduced a resolution to terminate a national emergency citing IEEPA. The NEA requires that both houses of Congress meet every six months to consider a vote on a joint resolution on terminating an emergency. Neither house has ever met to do so. In response to concerns over the scale and scope of the emergency economic powers granted by IEEPA, supporters of the status quo would argue that Congress has implicitly and explicitly expressed approval of the statute and its use. "], "subsections": []}]}, {"section_title": "The Export Control Reform Act of 2018", "paragraphs": ["In 2018, Congress passed the Export Control Reform Act (ECRA). The legislation repealed the expired Export Administration Act of 1979, the regulations of which had been continued by reference to IEEPA since 2001. The ECRA became the new statutory authority for Export Administration Regulations. Nevertheless, several export controls addressed in the Export Administration Act of 1979 were not updated in the Export Control Reform Act of 2018; instead, Congress chose to require the President to continue to use IEEPA to continue to implement the three sections of the Export Administration Act of 1979 that were not repealed. Going forward, Congress may wish to revisit these provisions, which all relate to deterring the proliferation of weapons of mass destruction.", "Appendix A. NEA and IEEPA Use"], "subsections": []}]}]}}
{"id": "R40860", "title": "Small Business Size Standards: A Historical Analysis of Contemporary Issues", "released_date": "2019-02-01T00:00:00", "summary": ["Small business size standards are of congressional interest because they have a pivotal role in determining eligibility for Small Business Administration (SBA) assistance as well as federal contracting and, in some instances, tax preferences. Although there is bipartisan agreement that the nation's small businesses play an important role in the American economy, there are differences of opinion concerning how to define them. The Small Business Act of 1953 (P.L. 83-163, as amended) authorized the SBA to establish size standards to ensure that only small businesses receive SBA assistance. The SBA currently uses two types of size standards to determine SBA program eligibility: industry-specific size standards and alternative size standards based on the applicant's maximum tangible net worth and average net income after federal taxes.", "The SBA's industry-specific size standards determine program eligibility for firms in 1,036 industrial classifications in 23 sub-industry activities described in the 2017 North American Industry Classification System (NAICS). The size standards are based on one of four measures: (1) number of employees, (2) average annual receipts in the previous three (may soon be the previous five) years, (3) average asset size as reported in the firm's four quarterly financial statements for the preceding year, or (4) a combination of number of employees and barrel per day refining capacity. Overall, about 97% of all employer firms qualify as small under the SBA's size standards. These firms represent about 30% of industry receipts.", "The SBA conducts an analysis of various economic factors, such as each industry's overall competitiveness and the competitiveness of firms within each industry, to determine its size standards. However, in the absence of precise statutory guidance and consensus on how to define small, the SBA's size standards have often been challenged, typically by industry representatives seeking to increase the number of firms eligible for assistance and by Members concerned that the size standards may not adequately target assistance to firms that they consider to be truly small.", "This report provides a historical examination of the SBA's size standards and assesses competing views concerning how to define a small business. It also discusses", "P.L. 111-240, the Small Business Jobs Act of 2010, which authorized the SBA to establish an alternative size standard using maximum tangible net worth and average net income after federal taxes for both the 7(a) and 504/CDC loan guaranty programs; established, until the SBA acted, an interim alternative size standard for the 7(a) and 504/CDC programs of not more than $15 million in tangible net worth and not more than $5 million in average net income after federal taxes (excluding any carry-over losses) for the two full fiscal years before the date of the application; and required the SBA to conduct a detailed review of not less than one-third of the SBA's industry size standards every 18 months beginning on the new law's date of enactment (September 27, 2010) and ensure that each size standard is reviewed at least once every five years. P.L. 112-239, the National Defense Authorization Act for Fiscal Year 2013, which directed the SBA not to limit the number of size standards and to assign the appropriate size standard to each NAICS industrial classification. This provision addressed the SBA's practice of limiting the number of size standards it used and combining size standards within industrial groups as a means to reduce the complexity of its size standards and to provide greater consistency for industrial classifications that have similar economic characteristics. P.L. 114-328, the National Defense Authorization Act for Fiscal Year 2017, which authorizes the SBA to establish different size standards for agricultural enterprises using existing methods and appeal processes. Previously, the small business size standard for agricultural enterprises was set in statute as having annual receipts not in excess of $750,000. P.L. 115-324, the Small Business Runway Extension Act of 2018, which directs federal agencies proposing a size standard (and, based on report language accompanying the act, presumably the SBA as well) to use the average annual gross receipts from at least the previous five years, instead of the previous three years, when seeking SBA approval to establish a size standard based on annual gross receipts. Legislation introduced during recent Congresses (including H.R. 33, the Small Business Regulatory Flexibility Improvements Act of 2017, and its Senate companion bill, S. 584, during the 115th Congress) to authorize the SBA's Office of Chief Counsel for Advocacy to approve or disapprove a size standard requested by a federal agency for purposes other than the Small Business Act or the Small Business Investment Act of 1958. The SBA's Administrator currently has that authority."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "What Is a Small Business?", "paragraphs": ["The Small Business Act of 1953 (P.L. 83-163, as amended) authorized the U.S. Small Business Administration (SBA) and justified the agency's existence on the grounds that small businesses are essential to the maintenance of the free enterprise system. In economic terms, the congressional intent was to assist small businesses as a means to deter monopoly and oligarchy formation within all industries and the market failures caused by the elimination or reduction of competition in the marketplace. Congress decided to allow the SBA to establish size standards to ensure that only small businesses were provided SBA assistance. ", "Specifically, the Small Business Act of 1953 defines a small business as one that ", "is organized for profit; has a place of business in the United States; operates primarily within the United States or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials, or labor; is independently owned and operated; and is not dominant in its field on a national basis.", "The business may be a sole proprietorship, partnership, corporation, or any other legal form.", "The SBA conducts an analysis of various economic factors, such as each industry's overall competitiveness and the competitiveness of firms within each industry, to determine its size standards. The analysis is designed to ensure that only small businesses receive SBA assistance and that these small businesses are not dominant in their field on a national basis.", "The SBA currently uses two types of size standards to determine SBA program eligibility: (1) industry-specific size standards and (2) alternative size standards based on the applicant's maximum tangible net worth and average net income after federal taxes. The SBA's industry-specific size standards are also used to determine eligibility for federal small business contracting purposes. ", "The SBA's industry-specific size standards determine program eligibility for firms in 1,036 industrial classifications (hereinafter industries) in 23 sub-industry activities described in the 2017 North American Industry Classification System (NAICS). Given its mandate to promote competition in the marketplace, the SBA includes an economic analysis of each industry's overall competitiveness and the competitiveness of firms within the industry in its size standards methodology. The size standards are based on four measures: (1) number of employees (505 industries), (2) average annual receipts in the previous three (may soon be the previous five) years (526 industries), (3) average asset size as reported in the firm's four quarterly financial statements for the preceding year (5 industries), or (4) a combination of number of employees and barrel per day refining capacity (1 industry). Overall, about 97% of all employer firms qualify as small. These firms represent about 30% of industry receipts.", "In the absence of precise statutory guidance and consensus on how to define small, the SBA's size standards have often been challenged, typically by industry representatives seeking to increase the number of firms eligible for assistance. The size standards have also been challenged by Members of Congress concerned that the size standards may not adequately target federal assistance to firms that they consider to be truly small.", "This report provides a historical examination of the SBA's size standards and assesses competing views concerning how to define a small business. It also discusses", "P.L. 111-240 , the Small Business Jobs Act of 2010, which authorized the SBA to establish an alternative size standard using maximum tangible net worth and average net income after federal taxes for both the 7(a) and 504/CDC loan guaranty programs; established, until the SBA acted, an interim alternative size standard for the 7(a) and 504/CDC programs of not more than $15 million in tangible net worth and not more than $5 million in average net income after federal taxes (excluding any carry-over losses) for the two full fiscal years before the date of the application; and required the SBA to conduct a detailed review of not less than one-third of the SBA's industry size standards every 18 months beginning on the new law's date of enactment (September 27, 2010) and ensure that each size standard is reviewed at least once every five years. P.L. 112-239 , the National Defense Authorization Act for Fiscal Year 2013, which directs the SBA not to limit the number of size standards and to assign the appropriate size standard to each NAICS industrial classification. This provision addressed the SBA's practice of limiting the number of size standards it used and combining size standards within industrial groups as a means to reduce the complexity of its size standards and to provide greater consistency for industrial classifications that have similar economic characteristics. P.L. 114-328 , the National Defense Authorization Act for Fiscal Year 2017, which authorizes the SBA to establish different size standards for agricultural enterprises using existing methods and appeal processes. Previously, the small business size standard for agricultural enterprises was set in statute as having annual receipts not in excess of $750,000. P.L. 115-324 , the Small Business Runway Extension Act of 2018, which directs federal agencies proposing a size standard (and, based on report language accompanying the act, presumably the SBA as well) to use the average annual gross receipts from at least the previous five years, instead of the previous three years, when seeking SBA approval to establish a size standard based on annual gross receipts. Legislation introduced during the 112 th Congress ( H.R. 585 , the Small Business Size Standard Flexibility Act of 2011), 113 th Congress ( H.R. 2542 , the Regulatory Flexibility Improvements Act of 2013, and included in H.R. 4 , the Jobs for America Act), 114 th Congress ( H.R. 527 , the Small Business Regulatory Flexibility Improvements Act of 2015, and its Senate companion bill, S. 1536 ), and 115 th Congress ( H.R. 33 , the Small Business Regulatory Flexibility Improvements Act of 2017, and its Senate companion bill, S. 584 , and included in H.R. 5 , the Regulatory Accountability Act of 2017) to authorize the SBA's Office of Chief Counsel for Advocacy to approve or disapprove a size standard requested by a federal agency for purposes other than the Small Business Act or the Small Business Investment Act of 1958. The SBA's Administrator currently has that authority."], "subsections": []}, {"section_title": "How Big Is Small?", "paragraphs": ["In 2016 (the most recent available data), there were over 5.95 million employer firms and over 24.8 million nonemployer (self-employed) firms.", "As Table 1 indicates, there were 5,954,684 employer firms in the United States employing 126,752,238 people and providing total payroll of $6.43 trillion in 2016. ", "Most employer firms (61.6%) had 4 or fewer employees, 78.6% had fewer than 10 employees, 89.1% had fewer than 20 employees, 98.1% had fewer than 100 employees, and 99.7% had fewer than 500 employees in 2016. The table also provides data concerning other economic factors that might be used to define a small business: an employer firm's number of employees as a share (cumulative percentage) of the total number of employer firms, as a share of employer firm total employment, and as a share of employer firm total annual payroll.", "As will be discussed, the SBA has traditionally applied economic factors to specific industries, not to cumulative statistics for all employer firms, to determine which firms are small businesses. Nonetheless, the data in Table 1 illustrate how the selection of economic factors used to define small business affects the definition's outcome. For example, for illustrative purposes only, if the mid-point (50%) for these three economic factors was used to define what is a small business, three different employee firm sizes would be used to designate firms as small:", "Businesses would be required to have no more than 4 employees to be defined as small if the definition for small used the mid-point (50%) share of the total number of employer firms (employer firms with no more than four employees accounted for 61.6% of the total number of employer firms in 2016). Businesses would be required to have no more than 999 employees to be defined as small if the definition for small used the mid-point (50%) share of employer firm total employment (employer firms with no more than 999 employees accounted for 52.6% of employer firm total employment in 2016). Businesses would be required to have no more than 1,999 employees to be defined as small if the definition for small used the mid-point (50%) share of employer firm total annual payroll (employer firms with no more than 1,999 employees accounted for 51.8% of employer firm total annual payroll in 2016).", "Other economic factors that might be used to define a small business include the value of the employer firm's assets or its market share, expressed as a firm's sales revenue from that market divided by the total sales revenue available in that market or as a firm's unit sales volume in that market divided by the total volume of units sold in that market."], "subsections": []}, {"section_title": "Who Makes the Call?", "paragraphs": ["The Small Business Act of 1953 (P.L. 83-163, as amended) authorized the SBA to establish size standards for determining eligibility for SBA assistance. More than sixty years have passed since the SBA established its initial small business size standards on January 1, 1957. Yet, decisions made then concerning the rationale and criteria used to define small businesses established precedents that continue to shape current policy. Moreover, as mentioned previously, the SBA relies on an analysis of various economic factors, such as each industry's overall competitiveness and the competitiveness of firms within each industry, in its size standards methodology to ensure that businesses receiving SBA assistance are not dominant in their field on a national basis. However, in the absence of precise statutory guidance and consensus on how to define small, the SBA's size standards have often been challenged, typically by industry representatives seeking to increase the number of firms eligible for assistance and by Members of Congress concerned that the size standards do not adequately target the SBA's assistance to firms that they consider to be truly small.", "Over the years, the SBA typically reviewed its size standards piecemeal, reviewing specific industries when the SBA determined that an industry's market conditions had changed or the SBA was asked to undertake a review by an industry claiming that its market conditions had changed. On five occasions, in 1980, 1982, 1992, 2004, and 2008, the SBA proposed a comprehensive revision of its size standards. The SBA did not fully implement any of these proposals, but the arguments presented, both for and against the proposals, provide a context for understanding the SBA's current size standards, and the rationale and criteria that have been presented to retain and replace them. ", "As mentioned previously, P.L. 111-240 requires the SBA to conduct a detailed review of not less than one-third of the SBA's industry size standards during the 18-month period beginning on the date of enactment (September 27, 2010) and during every 18-month period thereafter. The act also requires the SBA to review each size standard at least once every five years. The SBA completed its first five-year review of all SBA industry size standards in 2016. As a result of its five-year review, the SBA estimates that more than 72,000 small businesses gained SBA eligibility."], "subsections": []}, {"section_title": "Early Definitions of Small Business Vary in Approach and Criteria", "paragraphs": ["There is no uniform or accepted definition for a small business. Instead, several criteria are used to determine eligibility for small business spending and tax programs. This was also the case when Congress considered establishing the SBA during the early 1950s. For example, in 1952, the House Select Committee on Small Business reviewed federal statutes, executive branch directives, and the academic literature to serve as a guide for determining how to define small businesses.", "The Select Committee began its review by asserting that the need to define the concept of small business was based on a general consensus that assisting small business was necessary to enhance economic competition, combat monopoly formation, inhibit the concentration of economic power, and maintain \"the integrity of independent enterprise.\" It noted that the definition of small businesses in federal statutes reflected this consensus by taking into consideration the firm's size relative to other firms in its field and \"matters of independence and nondominance.\" For example, the War Mobilization and Reconversion Act of 1944 defined a small business as either \"employing 250 wage earners or less\" or having \"sales volumes, quantities of materials consumed, capital investments, or any other criteria which are reasonably attributable to small plants rather than medium- or large-sized plants.\" The Selective Service Act of 1948 classified a business as small for military procurement purposes if \"(1) its position in the trade or industry of which it is a part is not dominant, (2) the number of its employees does not exceed 500, and (3) it is independently owned and operated.\"", "The Select Committee also found that, for data-gathering purposes, the executive branch defined small businesses in relative, as opposed to absolute, terms within specific industries. For example, the Bureau of Labor Statistics \"defined small business in terms of an average for each industry based on the volume of employment or sales. All firms which fall below this average are deemed to be small.\" The U.S. Census Bureau also used different criteria for different industries. For example, manufacturing firms were classified as small if they had fewer than 100 employees, wholesalers were considered small if they had annual sales below $200,000, and retailers were considered small if they had annual sales below $50,000. According the Census Bureau, in 1952, small businesses accounted for \"roughly 92 percent of all business establishments, 45 percent of all employees, and 34 percent of all dollar value of all sales.\"", "The Select Committee also noted that in 1951, the National Production Authority's Office of Small Business proposed defining all manufacturing firms with fewer than 50 employees as small and any with more than 2,500 employees as large. Manufacturers employing between these numbers of employees would be considered large or small depending on the general structure of the industry to which they belonged. The larger the percentage of total output produced by large firms, the larger the number of employees a firm could have to be considered small. Using this definition, most manufacturing firms with fewer than 50 employees would be classified as small, but others, such as an aircraft manufacturer, could have as many as 2,500 employees and still be considered small.", "For procurement purposes, the Select Committee found that executive branch agencies defined small businesses in absolute, as opposed to relative, terms, using 500 employees as the dividing line between large and small firms. Federal agencies defended the so-called 500 employee rule on the grounds that it \"had the advantage of easy administration\" across federal agencies.", "In reviewing the academic literature, the Select Committee reported that Abraham Kaplan's Small Business: Its Place and Problems defined small businesses as those with no more than $1 million in annual sales, $100,000 in total assets, and no more than 250 employees. Applying this definition would have classified about 95% of all business concerns as small, and would have accounted for about half of all nonagricultural employees.", "Based on its review of federal statutes, executive branch directives, and the academic literature, the Select Committee decided that it would not attempt \"to formulate a rigid definition of small business\" because \"the concept of small business must remain flexible and adaptable to the peculiar needs of each instance in which a definition may be required.\" However, it concluded that the definition of small should be a relative one, as opposed to an absolute one, that took into consideration variations among economic sectors:", "This committee is also convinced that whatever limits may be established to the category of small business, they must vary from industry to industry according to the general industrial pattern of each. Public policy may demand similar treatment for a firm of 2,500 employees in one industry as it does for a firm of 50 employees in another industry. Each may be faced with the same basic problems of economic survival."], "subsections": []}, {"section_title": "The Small Business Act of 1953's Definition of Small Provides Room for Interpretation", "paragraphs": ["Reflecting the view that formulating a rigid definition of small business was impractical, the Small Business Act of 1953 provided leeway in defining small businesses. It defined a small firm as \"one that is independently owned and operated and which is not dominant in its field of operation.\" The SBA was authorized to establish and subsequently alter size standards for determining eligibility for federal programs to assist small business, some of which are administered by the SBA. The act specifies that the size standards \"may utilize number of employees, dollar volume of business, net worth, net income, a combination thereof, or other appropriate factors.\" It also notes that the concept of small is to be defined in a relative sense, varying from industry to industry to the extent necessary to reflect \"differing characteristics\" among industries.", "The House Committee on Banking and Currency's report accompanying H.R. 5141, the Small Business Act of 1953, issued on May 28, 1953, provided the committee's rationale for not providing a detailed definition of small:", "It would be impractical to include in the act a detailed definition of small business because of the variation between business groups. It is for this reason that the act authorizes the Administration to determine within any industry the concerns which are to be designated small-business concerns for the purposes of the act. ", "The report did not provide specific guidance concerning what the committee might consider to be small, but it did indicate that data on industry employment, as of March 31, 1948, \"reveals that on the basis of employment, small business truly is small in size. Of the approximately 4 million business concerns, 87.4% had fewer than 8 employees and 95.2% of the total number of concerns, employed fewer than 20 people.\""], "subsections": []}, {"section_title": "Industry Challenges the SBA's Initial Size Standards, Claiming They Are Too Restrictive", "paragraphs": ["Initially, the SBA created two sets of size standards, one for federal procurement preferences and another for the SBA's loan and management training services. At the request of federal agencies, the SBA adopted the then-prevailing small business size standard used by federal agencies for procurement, which was no more than 500 employees. The SBA retained the right to make exceptions to the no more than 500 employee procurement size standard if the SBA determined that a firm having more than 500 employees was not dominant in its industry.", "For the SBA's loan and management training services, the SBA's staff reviewed economic data provided by the Census Bureau to arrive at what Wendell Barnes, SBA's Administrator, described at a congressional hearing in 1956 as \"a fairly accurate conclusion as to what comprises small business in each industry.\" Jules Abels, SBA's economic advisor to the Administrator, explained at that congressional hearing how the SBA's staff determined what constituted a small business:", "There are various techniques for the demarcation lines, but in a study of almost any industry, you will find a large cluster of small concerns around a certain figure.... On the other hand, above a certain dividing line you will find relatively few and as you map out a picture of an industry it appears that a dividing line at a certain point is fair. ", "On January 5, 1956, the SBA published a notice of proposed rulemaking in the Federal Register announcing its first proposed small business size standards. During the public comment period, representatives of several industries argued that the proposed standards were too restrictive and excluded too many firms. In response, Mr. Abels testified that the SBA decided to adjust its figures to make them \"a little bit more liberal because there was some feeling on the part of certain industries that they were too tight and that they excluded too many firms.\" The SBA published its final rule concerning its small business size standards on December 7, 1956, and they became effective on January 1, 1957.", "The SBA decided to use number of employees as the sole criterion for determining if manufacturing firms were small and annual sales or annual receipts as the sole criterion for all other industries. Mr. Abels explained at the congressional hearing the SBA's rationale for using number of employees for classifying manufacturing firms as small and annual sales or annual receipts for all other firms:", "in the absence of automation which would give one firm in an industry a great advantage over another, roughly speaking if the firms were mechanized to the same extent, a firm with 400 employees would have an output which would be twice as large as the output of a firm with 200 employees.... However when you depart from the manufacturing field and go into, say, a distributive field or trade, it then becomes necessary to discard the number of employees, because it is a matter of judicial notice, that one man for example in the distributive trades can sell as much as 100 men can sell. One small construction firm possibly can do a lot more business than one with a lot more employees. A service trade again has its volume geared to something other than the number of employees. So I think that one can say with reasonable certainty that it is only within the manufacturing field that the employee standard is the uniform yardstick, but that other than manufacturing the dollar volume is the appropriate yardstick.", "The SBA's initial size standards defined most manufacturing firms employing no more than 250 employees as small. In addition, the SBA considered manufacturing firms in some industries (e.g., metalworking and small arms) as small if they employed no more than 500 employees, and in some others (e.g., sugar refining and tractors) as small if they employed no more than 1,000 employees. To be considered small, wholesalers were required to have annual sales volume of $5 million or less; construction firms had to have average annual receipts of $5 million or less over the preceding three years; trucking and warehousing firms had to have annual receipts of $2 million or less; taxicab companies and most firms in the service trades had to have annual receipts of $1 million or less; and most retail firms had to have annual sales of $1 million or less.", "Mr. Abels testified that the SBA experienced \"continual\" protests of its size standards by firms denied financial or support assistance because they were not considered small. He also testified that in each case, the SBA denied the protest and determined, in his words, that the standard was \"valid and accurate.\""], "subsections": []}, {"section_title": "GAO and Several Members of Congress Challenge the SBA's Size Standards, Claiming They Are Too Broad", "paragraphs": ["In 1977, the U.S. General Accounting Office (GAO, now the U.S. Government Accountability Office) was asked by the Senate Select Committee on Small Business to review the SBA's size standards. At that time, most of the SBA's size standards remained at their original 1957 levels, other than a one-time upward adjustment for inflation in 1975 for industries using annual sales and receipts to restore eligibility to firms that may have lost small-business status due solely to the effect of inflation.", "GAO's report, issued in 1978, found that the SBA's size standards \"are often high and often are not justified by economic rationale.\" Specifically, GAO reported that", "many size standards may not direct assistance to the target group described in SBA regulations as businesses \"struggling to become or remain competitive\" because the loan and procurement size standards for most industries were established 15 or more years ago and have not been periodically reviewed; SBA records do not indicate how most standards were developed; and the standards often define as small a very high percentage of the firms in the industries to which they apply.", "GAO recommended that the SBA reexamine its size standards \"by collecting data on the size of bidders on set-aside and unrestricted contracts, determining the size of businesses which need set-aside protection because they cannot otherwise obtain Federal contracts\" and then consider reducing its size standards or \"establishing a two-tiered system for set-aside contracts, under which certain procurements would be available for bidding only to the smaller firms and others would be opened for bidding to all businesses considered small under present standards.\"", "Citing the GAO report, several Members objected to the SBA's size standards at a House Committee on Small Business oversight hearing conducted on July 10, 1979. Representative John J. LaFalce, chair of the House Committee on Small Business Subcommittee on General Oversight and Minority Enterprise, stated that \"what we have faced from 1953 to the present is virtually nothing other than acquiescence to the demands of the special interest groups. That is how the size standards have been set.\" Representative Tim Lee Carter, the subcommittee's ranking minority member, stated that \"it seems to me that we may be fast growing into just a regular bank forum not just to small business but to all business.\" At that time, approximately 99% of all firms with employees were classified by the SBA as a small business.", "Roger Rosenberger, SBA's associate administrator for policy, planning and budgeting, testified at the hearing that the SBA would undertake a comprehensive economic analysis of industry data to determine if its size standards should be changed. However, he also defended the validity of the SBA's size standards, arguing that the task of setting size standards was a complicated and difficult one because of \"how market structure and size distribution of firms vary from industry to industry.\" He testified that some industries are dominated by a few large firms, some are comprised almost entirely of small businesses, and others \"can be referred to as a mixed industry.\" He argued that each market structure presents unique challenges for defining small businesses within that industry group. For example, he argued that it was debatable whether the SBA should provide any assistance to any of the businesses within industries where \"smaller firms are flourishing.\" "], "subsections": []}, {"section_title": "SBA Proposes More Restrictive Size Standards Based on Industry Competitiveness", "paragraphs": ["On March 10, 1980, the SBA issued a notice of proposed rulemaking designed to \"reduce administrative complexity\" by replacing its two sets of size standards, one for procurement preferences and another for its loan and consultative support services, with a single set of size standards for both purposes. The SBA also proposed to use a single factor, the firm's number of employees, for definitional purposes for nearly all industries instead of using the firm's number of employees for some industries, the firm's assets for others, and the firm's annual gross receipts for still others. The SBA argued that ", "when size standards are denominated in dollars, i.e., annual revenues, its ability to help the small business sector is undermined by inflation. Using employment, as opposed to dollar sales, will provide greater stability for SBA and its clients; will remove inter-industry distortions generated by differential inflation rates; and reduce the need for SBA to make frequent revisions in the size standards merely to reflect price increases.", "In setting its proposed new size standards for each industry (ranging from no more than 15 to no more than 2,500 employees), the SBA first placed each industry into one of three groups: concentrated (characterized by a highly unequal distribution of sales among the firms in the industry), competitive (characterized by a more equal distribution of sales in the industry), or mixed (industries that do not meet the criteria of competitive or concentrated industries). ", "The SBA determined that there were 160 concentrated industries, 317 competitive industries, and 249 mixed industries. The SBA argued that establishing a size standard for the 160 concentrated industries was a \"straight-forward task\u2014simply identify and exclude those few firms which account for a disproportionately large share of the industry's sales.\" For competitive industries, the SBA argued that the size standard should be set \"relatively low, so as to support entry and moderate growth.\" The SBA argued that mixed industries require \"relatively high size standards ... to reinforce competition and offset the pressures to increase the degree of concentration in these industries.\"", "The proposed new SBA size standards would have had the net effect of reducing the number of firms classified as small by about 225,000. In percentage terms, the number of firms classified as small would have been reduced from about 99% of all employer firms to 96%.", "Over 86% of the more than 1,500 public comments received by the SBA concerning its proposed new size standards criticized it. Most of the criticism was from firms that would no longer be considered small under the new size standards. In addition, several federal agencies indicated that the proposed size standards in the services and construction industries were set too low, reducing the number of small firms eligible to compete for procurement contracts below levels they deemed necessary to ensure adequate competition to prevent agency costs from rising. ", "On October 21, 1980, Congress required the SBA to take additional time to consider the consequences of the proposed changes to the size standards by adopting the Small Business Export Expansion Act of 1980 ( P.L. 96-481 ). It prohibited \"the SBA from promulgating any final rule or regulation relating to small business size standards until March 31, 1981.\" In the meantime, the Reagan Administration entered office, and, as is customary when there is a change in Administration, replaced the SBA's senior leadership.", "The SBA's new Administrator, Michael Cardenas, was sympathetic to the concerns of federal agencies that the proposed size standards in the services and construction industries were set too low to meet those agencies' procurement needs. As a result, he indicated that the SBA would modify its size standards proposal by (1) increasing the proposed size standards for 51 industries, mostly in the services and construction industries; (2) lowering the proposed size standards in 157 manufacturing industries (typically from no more than 2,500 employees to no more than 500 employees) to prevent one or more of the largest producers in those industries from being classified as small; and (3) increasing the SBA's proposed lowest size standard from no more than 15 employees to no more than 25 employees (affecting 93 service and trade industries). The net effect of these changes would have restored eligibility for approximately 60,000 of the 225,000 firms expected to lose eligibility under the previous Administration's proposal.", "The SBA subsequently met with various trade organizations and federal agency procurement officials to discuss the proposal. As these consultations took place, the SBA experienced another turnover in its senior leadership. ", "The SBA, headed by the new appointee, James C. Sanders, issued a notice of proposed rulemaking concerning its size standards on May 3, 1982. The proposal differed from its March 10, 1980, predecessor in three ways:", "First, the range of size standards was narrowed to a range of 25 employees to 500 employees. This reflected a widespread view that 15 employees was too low a cutoff while 2,500 employees was too high. Second, SBA proposed a 500-employee ceiling, focusing on smaller firms. Third, SBA responded to sentiments within many procurement-sensitive industries that the proposed size standards in some cases were too low to accommodate the average procurement currently being performed by small business. Therefore, SBA proposed higher size standards in a number of procurement-sensitive industries, while maintaining the 500-employee cap.", "The SBA received over 500 comments on the proposed rule, with about 72% of those comments opposing the rule.", "Taking those comments into consideration, the SBA reexamined its size standards once again, and, after a year of further consultation with various trade organizations and federal agency procurement officials, issued another notice of proposed rulemaking on May 6, 1983. The 1983 proposal (1) replaced the use of two sets of size standards, one for procurement and another for the SBA's loan and consultative support services, with a single set for all programs; (2) retained most of the size standards that were expressed in terms of average annual sales or receipts; (3) adjusted those size standards for inflation (an upward adjustment of 81%); (4) retained most of the size standards for manufacturing; and (5) made relatively minor changes to the size standards in other industries, with a continued emphasis on a 500-employee ceiling for most industries. The SBA received 630 comments on the proposed rule, with almost 70% supporting it.", "SBA Administrator Sanders characterized the SBA's revised size standard proposal as \"a fine-tuning of current standards which has the basic support of both the private sector and the Federal agencies that use the basic size standards to achieve their set-aside procurement goals.\" He also added that \"since almost no size standard is proposed to decrease, and most will in fact increase, very few firms will lose their small business status. We estimate that about 39,000 firms will gain small business status.\" He testified that in percentage terms, in 1983, 97.9% of the nation's 5.2 million firms with employees were classified by the SBA as small. Under the SBA's proposal, 98.6% of all firms with employees would be classified as small. The final rule was published in the Federal Register on February 9, 1984.", "Representative Parren J. Mitchell, chair of the House Committee on Small Business, expressed disappointment in the SBA's final rule, stating at a congressional oversight hearing on July 30, 1985, that \"the government and the business community are still victimized by that same ad hoc, sporadic system that the SBA promised to fix some six years ago.\" He introduced legislation ( H.R. 1178 , a bill to amend the Small Business Act) that would have required the SBA to adjust its size standard for an industrial classification downward by at least 20% if small business' share of that market equaled or exceeded 60%, and at least 40% of the market share was achieved through the receipt of federal procurement contracts. The bill also mandated a minimum 10% increase in the SBA's size standard for an industrial classification if small business' share of that market was less than 20% and less than 10% of the market share was achieved through the receipt of federal procurement contracts. The bill was opposed by various trade associations, the SBA, and federal agency procurement officials, and was not reported out of committee."], "subsections": []}, {"section_title": "SBA Proposes to Streamline Its Size Standards", "paragraphs": ["On December 31, 1992, the SBA issued a notice of proposed rulemaking \"to streamline its size standards\" by reducing the number of fixed size standard levels from 30 to 9. The nine proposed size standards were no more than 100, 500, 750, 1,000, or 1,500 employees; and no more than $5 million, $10 million, $18 million, or $24 million in annual receipts. The annual receipts levels reflected an upward adjustment of 43% for inflation. The SBA argued that the proposed changes would make the size standards more user-friendly for small business owners and restore eligibility to nearly 20,000 firms that were no longer considered small solely because of the effects of inflation. The proposed rule was later withdrawn as a courtesy to allow the incoming Clinton Administration time to review it. The SBA ultimately decided not to pursue this approach because it felt that converting \"receipts based size standards in effect at that time to one of four proposed receipts levels created a number of unacceptable anomalies.\"", "Over the subsequent decade, the SBA reviewed the size standards for some industries on a piecemeal basis and, in 1994, adjusted for inflation its size standards based on firm's annual sales or receipts (an upward adjustment of 48.2%). The SBA estimated that the adjustment would restore eligibility to approximately 20,000 firms that lost small-business status due solely to the effects of inflation.", "In 2002, the SBA adjusted for inflation its annual sales and receipts based size standards for the fourth time (an upward adjustment of 15.8%). The SBA estimated that the adjustment would restore eligibility to approximately 8,760 firms that lost small-business status due solely to the effects of inflation. The rule also included a provision that the SBA would assess the impact of inflation on its annual sales and receipts based size standards at least once every five years. Then, on March 19, 2004, the SBA, once again, issued a notice of proposed rulemaking to streamline its size standards.", "The proposed rule would have established size standards based on the firm's number of employees for all industries, avoiding the need to adjust for inflation size standards based on sales or receipts. At that time, the SBA size standards consisted of 37 different size levels: 30 based on annual sales or receipts, 5 on the number of employees (both full- and part-time), 1 on financial assets, and 1 on generating capacity. Under the proposed rule, the SBA would use 10 size standards, 5 new employee size standards (adding no more than 50, 150, 200, 300, and 400 employees), and the existing 5 employee size standards (no more than 100, 500, 750, 1,000, and 1,500 employees).", "The proposed rule would not have changed any existing size standards based on number of employees. The SBA argued that the use of a single size standard would \"help to simplify size standards\" and \"tends to be a more stable measure of business size\" than other measures. It added that the proposed rule would change 514 size standards and that, after the proposed conversion to the use of number of employees, of the \"approximately 4.4 million businesses in the industries with revised size standards, 35,200 businesses could gain and 34,100 could lose small business eligibility, with the net effect of 1,100 additional businesses defined as small.\"", "A majority (51%) of the more than 4,500 comments on the proposed rule supported it, but with \"a large number of comments opposing various aspects of SBA's approach to simplifying size standards.\" In addition, the chairs of the House Committee on Small Business and Senate Committee on Small Business and Entrepreneurship opposed the proposed rule, largely because they were concerned about potential job losses resulting from more than 34,000 small businesses losing program eligibility. The SBA withdrew the proposed rule on July 1, 2004.", "In 2005, the SBA adjusted for inflation size standards based on firms' annual sales or receipts (an upward adjustment of 8.7%). The SBA estimated that the adjustment restored eligibility to approximately 12,000 firms that lost small-business status due solely to inflation. In 2008, the SBA made another adjustment for inflation to its annual sales and receipts based standards (another upward adjustment of 8.7%). The SBA estimated that the adjustment restored eligibility for approximately 10,400 firms that lost small-business status due solely to inflation."], "subsections": []}, {"section_title": "SBA Adopts a Targeted Approach and Reduces the Number of Receipt Based Size Standards", "paragraphs": ["In June 2008, the SBA announced that it would undertake a comprehensive, two-year review of its size standards, proceeding one industrial sector at a time, starting with Retail Trade (NAICS Sector 44-45), Accommodations and Food Services (NAICS Sector 72), and Other Services (NAICS Sector 81). The SBA argued that it was concerned that \"not all of its size standards may now adequately define small businesses in the U.S. economy, which has seen industry consolidations, technological advances, emerging new industries, shifting societal preferences, and other significant industrial changes.\" It added that its reliance on an ad hoc approach \"scrutinizing the limited number of specific industries during a year, while worthwhile, leaves unexamined many deserving industries for updating and may create over time a set of illogical size standards.\"", "The SBA announced that it would begin its analysis of its size standards by assuming that \"$6.5 million [later increased to $7.5 million] is an appropriate size standard for those industries with receipts size standards and 500 employees for those industries with employee size standards.\" It would then analyze the following industry characteristics: \"average firm size; average asset size (a proxy for startup costs); competition, as measured by the market share of the four largest firms in the industry; and, the distribution of market share by firm size\u2014that is, are firms in the industry generally very small firms, or dominated by very large firms.\" Then, before making its final determination on the size standard, it would \"examine the participation of small businesses in federal contracting and SBA's guaranteed loan program at the current size standard level. Depending on the level of small business participation, additional consideration may be given to the level of the current size standard and the analysis of industry factors.\"", "In April 2009, the SBA announced that was simplifying the administration and use of its size standards by reducing the number of receipts based size standards from 31 to 8 when establishing a new size standard or reviewing an existing size standard:", "For many years, SBA has been concerned about the complexity of determining small business status caused by a large number of varying receipts based size standards (see 69 FR 13130 (March 4, 2004) and 57 FR 62515 (December 31, 1992)). At the start of current comprehensive size standards review, there were 31 different levels of receipts based size standards. They ranged from $0.75 million to $35.5 million, and many of them applied to one or only a few industries. The SBA believes that to have so many different size standards with small variations among them is unnecessary and difficult to justify analytically. To simplify managing and using size standards, SBA proposes that there be fewer size standard levels. This will produce more common size standards for businesses operating in related industries. This will also result in greater consistency among the size standards for industries that have similar economic characteristics.", "Under the current comprehensive size standards review, SBA is proposing to establish eight \"fixed-level\" receipts based size standards: $5.0 million, $7.0 million, $10.0 million, $14.0 million, $19.0 million, $25.5 million, $30.0 million, and $35.5 million. These levels are established by taking into consideration the minimum, maximum and the most commonly used current receipts based size standards.", "These eight receipts based size standards were increased to $5.5 million, $7.5 million, $11.0 million, $15.0 million, $20.5 million, $27.5 million, $32.5 million, and $38.5 million in 2014 to account for inflation.", "The SBA also announced that it would ", "use eight employee based size standards when establishing a new size standard or reviewing an existing size standard (no more than 50, 100, 150, 200, 250, 500, 750, and 1,000 employees) instead of seven (no more than 50, 100, 150, 500, 750, 1,000, and 1,500 employees); and continue to use one asset based size standard, one megawatt hours size standard (based on electrical output over the preceding fiscal year), and one size standard based on a combination of the number of employees and barrel per day refining capacity.", "The SBA also announced that \"to simplify size standards further\" it \"may propose a common size standard for closely related industries.\" The SBA argued", "although the size standard analysis may support a separate size standard for each industry, SBA believes that establishing different size standards for closely related industries may not always be appropriate. For example, in cases where many of the same businesses operate in the same multiple industries, a common size standard for those industries might better reflect the Federal marketplace. This might also make size standards among related industries more consistent than separate size standards for each of those industries.", "Because SBA size standards remain in force until after they are reviewed, the number of size standards did not immediately drop from 41 to 19 in 2009. Instead, the number of size standards began to decline gradually as new size standard final rules were issued. In addition, from 2010 through 2016, the SBA decided, in most instances, not to lower size standards (which would have made it more difficult for businesses to qualify) even if the data supported lowering them because unemployment at that time was relatively high and doing so would \"run counter to numerous Congressional and Administration's initiatives and programs to create jobs and boost economic growth.\" As a result of this policy decision, several size standards that would have otherwise been eliminated remained in place. Also, in 2016, the SBA added a new employee based size standard (no more than 1,250 employees) and reinstated the use of another (no more than 1,500 employees) when establishing a new, or revising an existing, size standard.", "The SBA's decisions in 2009 to reduce the number of receipts based size standards and to propose a common size standard for closely related industries were opposed by some industry groups. They argued that these policies could lead to the SBA to classify an industry \"for the sake of convenience\" into a size standard that the agency's own economic analysis indicates should be in a different (easier to qualify) size standard. Congress adopted legislation in 2013 ( P.L. 112-239 , National Defense Authorization Act for Fiscal Year 2013) that included provisions directing the SBA not to limit the number of size standards and to assign the appropriate size standard to each NAICS industrial classification.", "The SBA currently has 27 SBA industry size standards in effect (16 receipts based size standards, 9 employee based sized standards, 1 asset based size standard, and 1 size standard based on a combination of the number of employees and barrel per day refining capacity). That number is expected to increase given the SBA's directive not to limit the number of size standards."], "subsections": []}, {"section_title": "Congress Requires Periodic Size Standard Reviews", "paragraphs": ["As mentioned previously, P.L. 111-240 requires the SBA to conduct a detailed review of not less than one-third of the SBA's industry size standards during the 18-month period beginning on the date of enactment (September 27, 2010) and during every 18-month period thereafter.", "The act directs the SBA to \"make appropriate adjustments to the size standards\" to reflect market conditions, and to report to the House Committee on Small Business and the Senate Committee on Small Business and Entrepreneurship and make publicly available \"not later than 30 days\" after the completion of each review information regarding the factors evaluated as part of each review, the criteria used for any revised size standard, and why the SBA did, or did not, adjust each size standard that was reviewed. The act also requires the SBA to ensure that each industry size standard is reviewed at least once every five years.", "On July 7, 2011, the SBA announced that its \"comprehensive review of all small business size standards\" would begin with the following six industries:", "Educational Services (final rule was issued on September 24, 2012); Health Care and Social Assistance Services (final rule was issued on September 24, 2012); Real Estate Rental and Leasing (final rule was issued on September 24, 2012); Administrative and Support, Waste Management and Remediation Services (final rule was issued on December 6, 2012); Information (final rule was issued on December 6, 2012); and Utilities (final rule was issued on December 23, 2013). ", "The SBA subsequently completed size standard reviews for all industries in January 2016 (listed by when the final rule was issued):", "Professional, Scientific and Technical Services (final rule was issued on February 24, 2012); Transportation and Warehousing (final rule was issued on February 24, 2012); Agriculture, Forestry, Fishing and Hunting (final rule was issued on June 20, 2013); Arts, Entertainment, and Recreation (final rule was issued on June 20, 2013); Finance and Insurance (final rule was issued on June 20, 2013); Management of Companies (final rule was issued on June 20, 2013); Support Activities for Mining (final rule was issued on June 20, 2013); Construction (final rule was issued on December 23, 2013); Wholesale Trade (final rule was issued on January 25, 2016); Industries with Employee Based Size Standards not Part of Manufacturing, Wholesale Trade, or Retail Trade (final rule was issued on January 26, 2016); and Manufacturing (final rule was issued on January 26, 2016).", "A summary of the final rules issued for each industry is provided in Table A-1 . ", "During the first five-year review cycle, the SBA increased 621 size standards, decreased 3 (to exclude potentially dominant firms from being considered small), and retained 388 at their pre-existing levels. Of the 388 retained size standards, 214 were retained based on the results of the SBA's economic analysis and 174 were retained based on the SBA's policy of generally not lowering any size standard, even though the results of the economic analysis supported lowering them, due to national economic conditions.", "The SBA has started its second five-year review of its size standards and anticipates issuing its first final rules in the second five-year review cycle in 2019, using new size standard methodology announced in April 2018 (discussed in the next section). The SBA also announced in April 2018 that its policy of generally not lowering size standards when the analysis indicates that a lower standard is justified would no longer be in force, at least initially, during the second five-year review cycle:", "the decision to raise, lower, or retain a size standard will primarily be driven by analytical results, with due considerations of public comments, impacts of changes on the affected businesses, and other factors SBA considers important. All of these decisions will be detailed in individual rulemakings. It will take several years to complete the five-year review of all size standards \u2026 during which the state of the economy may change. It is, therefore, not possible to state now \u2026 what impact, if any, the future economic environment would have on the SBA's policy decision regarding size standards."], "subsections": []}, {"section_title": "SBA's Definitions for Small Business", "paragraphs": ["As mentioned earlier, the SBA, relying on statutory language, defines a small business as a concern that is organized for profit; has a place of business in the United States; operates primarily within the United States or makes a significant contribution to the economy through payment of taxes or use of American products, materials, or labor; is independently owned and operated; and is not dominant in its field on a national basis. The business may be a sole proprietorship, partnership, corporation, or any other legal form.", "The SBA uses two measures to determine if a business is small: industry specific size standards or a combination of the business's net worth and net income. For example, the SBA's Small Business Investment Company (SBIC) program allows businesses to qualify as small if they meet the SBA's size standard for the industry in which the applicant is primarily engaged, or an alternative net worth and net income based size standard which has been established for the SBIC program. The SBIC's alternative size standard is currently set as a maximum net worth of not more than $19.5 million and average after-tax net income for the preceding two years of not more than $6.5 million. All of the company's subsidiaries, parent companies, and affiliates are considered in determining if it meets the size standard. The SBA decided to apply the net worth and net income measures to the SBIC program \"because investment companies evaluate businesses using these measures to decide whether or not to make an investment in them.\"", "Businesses participating in the SBA's 504/Certified Development Company (504/CDC) loan guaranty program are to be deemed small if they did not have a tangible net worth in excess of $8.5 million and did not have an average net income in excess of $3 million after taxes for the preceding two years. As discussed below, P.L. 111-240 increased these threshold amounts on an interim basis to not more than $15 million in tangible net worth and not more than $5 million in average net income after federal taxes for the two full fiscal years before the date of the application. All of the company's subsidiaries, parent companies, and affiliates are considered in determining if it meets the size standard. Also, before May 5, 2009, businesses participating in the SBA's 7(a) loan guaranty program, including its express programs, were deemed small if they met the SBA's size standards for firms in the industries described in NAICS."], "subsections": [{"section_title": "Alternative Size Standards", "paragraphs": ["Using authority provided under P.L. 111-5 , the American Recovery and Reinvestment Act of 2009, the SBA temporarily applied the 504/CDC program's size standards as an alternative for 7(a) loans approved from May 5, 2009, through September 30, 2010. Firms applying for a 7(a) loan during that time period qualified as small using either the SBA's industry size standards or the 504/CDC program's size standard. The provision's intent was to enhance the ability of small businesses to access the capital necessary to create and retain jobs during the economic recovery.", "P.L. 111-240 made the use of alternative size standards for the 7(a) program permanent. The act directs the SBA to establish an alternative size standard for both the 7(a) and 504/CDC programs that uses maximum tangible net worth and average net income as an alternative to the use of industry standards. The act also establishes, until the date on which the alternative size standard is established, an interim alternative size standard for the 7(a) and 504/CDC programs of not more than $15 million in tangible net worth and not more than $5 million in average net income after federal taxes (excluding any carry-over losses) for the two full fiscal years before the date of the application."], "subsections": []}, {"section_title": "Industry Size Standards", "paragraphs": ["The SBA Administrator has the authority to establish and modify size standards for particular industries. Overall, about 97% of all employer firms qualify as small under the SBA's size standards. These firms account for about 30% of industry receipts.", "The SBA generally \"prefers to use average annual receipts as a size measure because it measures the value of output of a business and can be easily verified by business tax returns and financial records.\" However, historically, the SBA has used the number of employees to determine if manufacturing and mining companies are small. ", "Before a proposed change to the size standards can take effect, the SBA's Office of Size Standards (OSS) undertakes an analysis of the change's likely impact on the affected industry, focusing on the industry's overall degree of competition and the competitiveness of the firms within the industry. The analysis includes an assessment of the following four economic factors: \"average firm size, average assets size as a proxy of start-up costs and entry barriers, the 4-firm concentration ratio as a measure of industry competition, and size distribution of firms.\" The SBA also considers the ability of small businesses to compete for federal contracting opportunities and, when necessary, several secondary factors \"as they are relevant to the industries and the interests of small businesses, including technological change, competition among industries, industry growth trends, and impacts of size standard revisions on small businesses.\"", "The specifics of SBA's size standards methodology have evolved over the years with the availability of new industry and federal procurement data and staff research. For example, the SBA previously presumed less than $7.0 million (increased to less than $7.5 million in 2014 to account for inflation) as an appropriate \"anchor\" size standard for the services, retail trade, construction, and other industries with receipts based size standards; 500 or fewer employees as an appropriate anchor size standard for the manufacturing, mining and other industries with employee based size standards; and 100 or fewer employees as an appropriate anchor size standard for the wholesale trade industries. These three anchor size standards were used as benchmarks or starting points for the SBA's economic analysis. To the extent an industry displayed \"differing industry characteristics,\" a size standard higher, or in some cases lower, than an anchor size standard was used.", "In April 2018, the SBA replaced the \"anchor\" approach with a \"percentile\" approach, primarily because the anchors were no longer representative of the size standards being used (just 24% of industries with receipt-based size standards and 22% of those with employee based size standards have the anchor size standards) and the anchor approach entails \"grouping industries from different NAICS sectors thereby making it inconsistent with section 3(a)(7) of the [Small Business] Act,\" which limits the SBA's ability to create common size standards by grouping industries below the 4-digit NAICS level. ", "Specifically, when assessing the appropriateness of the current size standards, the SBA now", "evaluates the structure of each industry in terms of four economic characteristics or factors, namely average firm size, average assets size as a proxy of start-up costs and entry barriers, the 4-firm concentration ratio as a measure of industry competition, and size distribution of firms using the Gini coefficient. For each size standard type ... SBA ranks industries both in terms each of the four industry factors and in terms of the existing size standard and computes the 20 th percentile and 80 th percentile values for both. SBA then evaluates each industry by comparing its value for each industry factor to the 20 th percentile and 80 th percentile values for the corresponding factor for industries under a particular type of size standard.", "If the characteristics of an industry under review within a particular size standard type are similar to the average characteristics of industries within the same size standard type in the 20 th percentile, SBA will consider adopting as an appropriate size standard for that industry the 20 th percentile value of size standards for those industries. For each size standard type, if the industry's characteristics are similar to the average characteristics of industries in the 80 th percentile, SBA will assign a size standard that corresponds to the 80 th percentile in the size standard rankings of industries. A separate size standard is established for each factor based on the amount of differences between the factor value for an industry under a particular size standard type and 20 th percentile and 80 th percentile values for the corresponding factor for all industries in the same type. Specifically, the actual level of the new size standard for each industry factor is derived by a linear interpolation using the 20 th percentile and 80 th percentile values of that factor and corresponding percentiles of size standards. Each calculated size standard will be bounded between the minimum and maximum size standards levels [see Table 2 ] ... the calculated value for a receipts based size standard for each industry factor is rounded to the nearest $500,000 and the calculated value for an employee based size standard is rounded to the nearest 50 employees for Manufacturing and industries in other sectors (except Wholesale and Retail Trade) and to the nearest 25 employees for employee based size standards for Wholesale Trade and Retail Trade.", "The SBA anticipates that its shift from using the anchor approach to the percentile approach will have minimal impact, both in terms of the direction and magnitude of changes, to its industry size standards.", "Any changes to size standards must follow the rulemaking procedures of the Administrative Procedure Act. A proposed rule changing a size standard is first published in the Federal Register , allowing for public comment. It must include documentation establishing that a significant problem exists that requires a revision of the size standard, plus an economic analysis of the change. Comments from the public, plus any other new information, are reviewed and evaluated before a final rule is promulgated establishing a new size standard.", "The SBA currently uses employment size to determine eligibility for 505 of 1,036 industries (48.6%), including all 360 manufacturing industries, 24 mining industries, and 71 wholesale trade industries. As of October 1, 2017, ", "98 manufacturing industries have an upper limit of 500 employees (27.2%); 91 have an upper limit of 750 employees (25.2%); 89 have an upper limit of 1,000 employees (24.7%); 56 have an upper limit of 1,250 employees (15.6%); and 26 have an upper limit of 1,500 employees (7.2%). 3 of the 24 mining industries have an upper limit of 250 employees (12.5%), 7 have an upper limit of 500 employees (29.2%), 7 have an upper limit of 750 employees (29.2%), 2 have an upper limit of 1,000 employees (8.3%), 3 have an upper limit of 1,250 employees (12.5%), and 2 have an upper limit of 1,500 employees (8.3%). 25 of the 71 wholesale trades industries have an upper limit of 100 employees (35.2%), 16 have an upper limit of 150 employees (22.5%), 21 have an upper limit of 200 employees (29.6%), and 9 have an upper limit of 250 employees (12.7%).", "The SBA currently has nine employee based industry size standards in effect (no more than 100, 150, 200, 250, 500, 750, 1,000, 1,250, and 1,500 employees). ", "The SBA uses average annual receipts over the three (soon to be five) most recently completed fiscal years to determine program eligibility for most other industries (526 of 1,036 industries, or 50.8%). The SBA also uses average asset size as reported in the firm's four quarterly financial statements for the preceding year to determine eligibility for five finance industries, and a combination of number of employees and barrel per day refining capacity for petroleum refineries. ", "The SBA currently has 16 receipts based industry size standards in effect. In some instances, there is considerable variation in the size standards used within each industrial sector. For example, the SBA uses 11 different size standards to determine eligibility for 66 industries in the retail trade sector. In general,", "most administrative and support service industries have an upper limit of either $15.0 million or $20.5 million in average annual sales or receipts; most agricultural industries have an upper limit of $0.75 million in average annual sales or receipts; most construction of buildings and civil engineering construction industries have an upper limit of $36.5 million in average annual sales or receipts, and most construction specialty trade contractors have an upper limit of $15.0 million in average annual sales or receipts; most educational services industries have an upper limit of either $7.5 million or $11.0 million in average annual sales or receipts; most health care industries have an upper limit of either $7.5 million or $15.0 million in average annual sales or receipts; most social assistance industries have an upper limit of $11.0 million in average annual sales or receipts; there is considerable variation within the professional, scientific, and technical service industries, ranging from an upper limit of $7.5 million in average annual sales or receipts to $38.5 million; there is considerable variation within the transportation and warehousing industrial sector, ranging from an upper limit of $7.5 million in average annual sales or receipts to $38.5 million for 43 industries and from an upper limit of 500 employees to 1,500 employees for 15 industries); and most finance and insurance industries have an upper limit of $38.5 million in average annual sales or receipts.", "The SBA also applies a $550 million average asset limit (as reported in the firm's four quarterly financial statements for the preceding year) to determine eligibility in five finance industries: commercial banks, saving institutions, credit unions, other depository credit intermediation, and credit card issuing."], "subsections": []}, {"section_title": "Other Federal Agency Size Standards", "paragraphs": ["Many federal statutes provide special considerations for small businesses. For example, small businesses are provided preferences through set-asides and sole source awards in federal contracting and pay lower fees to apply for patents and trademarks. In most instances, businesses are required to meet the SBA's size standards to be considered a small business. However, in some cases, the underlying statute defines the eligibility criteria for defining a small business. In other cases, the statute authorizes the implementing agency to make those determinations. ", "Under current law, a federal agency that decides that it would like to exercise its authority to establish its own size standard through the federal rulemaking process is required to, among other things, (1) undertake an initial regulatory flexibility analysis to determine the potential impact of the proposed rule on small businesses, (2) transmit a copy of the initial regulatory flexibility analysis to the SBA's Chief Counsel for Advocacy for comment, and (3) publish the agency's response to any comments filed by the SBA's Chief Counsel for Advocacy in response to the proposed rule and a detailed statement of any change made to the proposed rule in the final rule as a result of those comments. In addition, the federal agency must provide public notice of the proposed rule and an opportunity for the public to comment on the proposed rule, typically through the publication of an advanced notice of proposed rulemaking in the Federal Register and notification of interested small businesses and related organizations. Also, prior to issuing the final rule, the federal agency must have the approval of the SBA's Administrator. Under current practice, the SBA's Administrator, through the SBA's Office of Size Standards, consults with the SBA's Office of Advocacy prior to making a final decision concerning such requests. The Office of Advocacy is an independent office within the SBA. ", "During the 112 th Congress, H.R. 585 , the Small Business Size Standard Flexibility Act of 2011, was reported by the House Committee on Small Business on November 16, 2011, by a vote of 13 to 8. The bill would have retained the SBA's Administrator's authority to approve or disapprove size standards for programs under the Small Business Act of 1953 (as amended) and the Small Business Investment Act of 1958 (as amended). The Office of Chief Counsel for Advocacy would have assumed the SBA Administrator's authority to approve or disapprove size standards for purposes of any other act.", "Similar legislative provisions have been introduced during the 113 th Congress ( H.R. 2542 , the Regulatory Flexibility Improvements Act of 2013, and included in H.R. 4 , the Jobs for America Act), 114 th Congress ( H.R. 527 , the Small Business Regulatory Flexibility Improvements Act of 2015, and its Senate companion bill, S. 1536 ), and 115 th Congress ( H.R. 33 , the Small Business Regulatory Flexibility Improvements Act of 2017, and its Senate companion bill, S. 584 , and included in H.R. 5 , the Regulatory Accountability Act of 2017).", "Advocates of splitting the SBA Administrator's small business size standards' authority between the Office of Chief Counsel for Advocacy and the SBA's Administrator have argued that ", "Should an agency wish to draft a regulation that adopts a size standard different from the one already adopted by the Administrator in regulations implementing the Small Business Act, the agency must obtain approval of the Administrator. However, that requires the Administrator to have a complete understanding of the regulatory regime of that other act\u2014knowledge usually outside the expertise of the SBA. However, the Office of the Chief Counsel for Advocacy, an independent office within the SBA, represents the interests of small businesses in rulemaking proceedings (as part of its responsibility to monitor agency compliance with the Regulatory Flexibility Act, 5 U.S.C. 601-12, (RFA)) does have such expertise. Therefore, it is logical to transfer the limited function on determining size standards of small businesses for purposes other than the Small Business Act and Small Business Investment Act of 1958 to the Office of the Chief Counsel for Advocacy\u2026.", "the Administrator is not the proper official to determine size standards for purposes of other agencies' regulatory activities. The Administrator is not fluent with the vast array of federal regulatory programs, is not in constant communication with small entities that might be affected by another federal agency's regulatory regime, and does not have the analytical expertise to assess the regulatory impact of a particular size standard on small entities. Furthermore, the Administrator's standards are: very inclusive, not developed to comport with other agencies' regulatory regimes, and lack sufficient granularity to examine the impact of a proposed rule on a spectrum of small businesses.", "Opponents have argued that ", "When an agency is seeking to use a size standard other than those approved by the SBA, the agency may consult with the Office of Advocacy. Such consultation is sensible, as the Office of Advocacy has significant knowledge of the regulatory environment outside of the canon of SBA law. However, the SBA's Office of Size Standards, with its historical involvement, expertise, and staff resources in this area, remains the appropriate entity to approve such size standards\u2026.", "While the legislation permits the SBA to continue to approve size standards for its enabling statutes, it removes SBA's authority to do so for other statutes. The result would be to create a duplicate size standard authority in both the SBA and the Office of Advocacy. Both the SBA and the Office of Advocacy would have personnel who would analyze and evaluate size standards. Through the bifurcation of these responsibilities, taxpayers would effectively be forgoing the economies of scale that are currently enjoyed by the operation of a single Office of Size Standards in the SBA\u2026.", "Having two such entities that have the same mission is not a transfer of function, but an inefficient and duplicative reorganization.\u2026 Instead of having one central office, there will now be two\u2014further muddling small businesses' relationship with the federal government."], "subsections": []}, {"section_title": "Other Recent Legislation", "paragraphs": ["Two bills were introduced during the 114 th Congress ( H.R. 3714 , the Small Agriculture Producer Size Standards Improvements Act of 2015, and H.R. 4341 , the Defending America's Small Contractors Act of 2016) to authorize the SBA to establish size standards for agricultural enterprises not later than 18 months after the date of enactment. The size standard for agricultural enterprises was, at that time, set in statute as having annual receipts not in excess of $750,000. H.R. 4341 , among other provisions, would have also limited an industry category to a greater extent than provided under the North American Industry Classification codes for small business procurement purposes if further segmentation of the industry category is warranted. ", "H.R. 4341 was introduced on January 7, 2016, and ordered to be reported with amendment by the House Committee on Small Business on January 13, 2016. H.R. 3714 was introduced on October 8, 2015, considered by the House under suspension of the rules on April 19, 2016, and agreed to by voice vote.", "P.L. 114-328 , the National Defense Authorization Act for Fiscal Year 2017, includes a provision which authorizes the SBA to establish different size standards for agricultural enterprises using existing methods and appeal processes. ", "Also, as mentioned previously, P.L. 115-324 , the Small Business Runway Extension Act of 2018, directs federal agencies proposing a size standard (and, based on report language accompanying the act, presumably the SBA as well) to use the average annual gross receipts from at least the previous five years, instead of the previous three years, when seeking SBA approval to establish a size standard based on annual gross receipts. ", "The SBA has not announced if it will continue to use the average annual gross receipts over three years to determine receipts-based size standards or if it will use the average annual gross receipts from the previous five years."], "subsections": []}]}, {"section_title": "Congressional Policy Options", "paragraphs": ["Historically, the SBA has relied on economic analysis of market conditions within each industry to define eligibility for small business assistance. On several occasions in its history, the SBA attempted to revise its small business size standards in a comprehensive manner. However, because (1) the Small Business Act provides leeway in how the SBA is to define small business; (2) there is no consensus on the economic factors that should be used in defining small business; (3) federal agencies have generally opposed size standards that might adversely affect their pool of available small business contractors; and (4) the SBA's initial size standards provided program eligibility to nearly all businesses, the SBA's efforts to undertake a comprehensive reassessment of its size standards met with resistance. Firms that might lose eligibility objected. Federal agencies also objected. As a result, in each instance, the SBA's comprehensive revisions were not fully implemented.", "The SBA's congressionally mandated requirement to conduct a detailed review of at least one-third of the SBA's industry size standards every 18 months was imposed by P.L. 111-240 , the Small Business Jobs Act of 2010, to prevent small business size standards from becoming outdated. More frequent reviews of the size standards were expected to increase their accuracy and, generally speaking, result in (1) increased numbers of small businesses found to be eligible for SBA assistance and (2) an increase in the number and amount of federal contracts awarded to small businesses (primarily by preventing large businesses from being misclassified as small and by increasing the number of small businesses eligible to compete for federal contracts). ", "As expected, the SBA's economic analyses during the recent five-year review cycle often supported an increase in the size standards for many industries. However, the SBA's economic analyses also occasionally supported a decrease in the size standards for some industries. Despite the SBA's decision to, in most circumstances, make no changes when their economic analyses indicated that a decrease was warranted, it could be argued that the increased frequency of the reviews has generally prevented the SBA's size standards from becoming outdated. This, in turn, has, at least to a certain extent, improved the accuracy of the size standards (as measured by the extent to which the size standard is in alignment with the SBA's economic analyses). ", "In a related matter, the SBA continues to adjust its receipts based size standards for inflation at least once every five years, or more frequently if inflationary circumstances warrant, to prevent firms from losing their small business eligibility solely due to the effects of inflation. The most recent adjustment for inflation took place on July 14, 2014. Prior to that, the last adjustment for inflation took place in 2008. The SBA also continues to review size standards within specific industries whenever it determines that market conditions within that industry have changed.", "Congress has several options related to the SBA's ongoing review of its size standards. For example, as part of its oversight of the SBA, Congress can wait for the agency to issue its proposed rule before providing input or establish a dialogue with the agency, either at the staff level or with Members involved directly, prior to the issuance of its proposed rule. Historically, Congress has tended to wait for the SBA to issue proposed rules concerning its size standards before providing input, essentially deferring to the agency's expertise in the technical and methodological issues involved in determining where to draw the line between small and large firms. Congress has then tended to respond to the SBA's proposed rules concerning its size standards after taking into consideration current economic conditions and input received from the SBA and affected industries.", "Waiting for the SBA to issue its proposed rule concerning its size standards before providing congressional input has both advantages and disadvantages. It provides the advantage of insulating the proposed rule from charges that it is influenced by political factors. It also has the advantage of respecting the separation of powers and responsibilities of the executive and legislative branches. However, it has the disadvantage of heightening the prospects for miscommunication, false expectations, and wasted effort, as evidenced by past proposed rules concerning the SBA's size standards that were either rejected outright, or withdrawn, after facing congressional opposition.", "Another policy option that has not received much congressional attention in recent years, but which Congress may choose to address, is the targeting of the SBA's resources. When the SBA reviews its size standards, it focuses on the competitive nature of the industry under review, with the goal of removing eligibility of firms that are considered large, or dominant, in that industry. There has been relatively little discussion of the costs and benefits of undertaking those reviews with the goal of targeting SBA resources to small businesses in industries that are struggling to remain competitive. GAO recommended this approach in 1978 and Roger Rosenberger, then SBA's associate administrator for policy, planning, and budgeting, testified at a congressional hearing in 1979 that it was debatable whether the SBA should provide any assistance to any of the businesses within industries where \"smaller firms are flourishing.\"", "Revising the SBA's size standards using this more targeted approach would likely reduce the number of firms eligible for assistance. It would also present the possibility of increasing available benefits to eligible small firms in those industries deemed \"mixed\" or \"concentrated\" by the SBA without necessarily increasing overall program costs. Perhaps because previous proposals that would result in a reduction in the number of firms eligible for assistance have met with resistance, this alternative approach to determining program eligibility has not received serious consideration in recent years. Nonetheless, it remains an option available to Congress should it decide to change current policy."], "subsections": [{"section_title": "Appendix. SBA Size Standard Reviews, 2011-2016", "paragraphs": [], "subsections": []}]}]}}
{"id": "RL30261", "title": "Women in Congress, 1917-2019: Service Dates and Committee Assignments by Member, and Lists by State and Congress", "released_date": "2019-04-09T00:00:00", "summary": ["In total 365 women have been elected or appointed to Congress, 247 Democrats and 118 Republicans. These figures include six nonvoting Delegates, one each from Guam, Hawaii, the District of Columbia, and American Samoa, and two from the U.S. Virgin Islands, as well as one Resident Commissioner from Puerto Rico. Of these 365 women, there have been", "309 (211 Democrats, 98 Republicans) women elected only to the House of Representatives; 40 (25 Democrats, 15 Republicans) women elected or appointed only to the Senate; and 16 (11 Democrats, 5 Republicans) women who have served in both houses.", "A record 131 women currently serve in the 116th Congress. Of these 131 women, there are", "25 in the Senate (17 Democrats and 8 Republicans); 102 Representatives in the House (89 Democrats and 13 Republicans); and 4 women in the House (2 Democrats and 2 Republicans) who serve as Delegates or Resident Commissioner, representing the District of Columbia, American Samoa, the U.S. Virgin Islands, and Puerto Rico.", "This report includes brief biographical information, committee assignments, dates of service, district information, and listings by Congress and state, and (for Representatives) congressional districts of the 365 women who have been elected or appointed to Congress. It will be updated when there are relevant changes in the makeup of Congress.", "For additional information, including a discussion of the impact of women in Congress as well as historical information, including the number and percentage of women in Congress over time, data on entry to Congress, comparisons to international and state legislatures, tenure, firsts for women in Congress, women in leadership, and African American, Asian Pacific American, and Hispanic women in Congress, see CRS Report R43244, Women in Congress: Statistics and Brief Overview, by Jennifer E. Manning and Ida A. Brudnick."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["On November 9, 1916, Jeannette Rankin (R-MT) was elected to the House of Representatives as Montana's Representative-at-Large to the 65 th Congress (1917-1919). This election win gave Representative Rankin the dist inction of being the first woman elected to serve in Congress. The first woman to serve in the Senate was Rebecca Latimer Felton (D-GA). She was appointed in 1922 and served for one day.", "Three hundred sixty five women have been elected or appointed to Congress. These figures include six nonvoting Delegates, one each from Guam, Hawaii, the District of Columbia, and American Samoa, and two from the U.S. Virgin Islands, as well as one Resident Commissioner from Puerto Rico. Of these 365 women, there have been", "247 Democrats and 118 Republicans; 309 (211 Democrats, 98 Republicans) women elected only in the House of Representatives, including 7 (4 Democrats, 3 Republicans) women who have served as Delegates or Resident Commissioners in the House; 40 (25 Democrats, 15 Republicans) women elected or appointed only in the Senate; and 16 (11 Democrats, 5 Republicans) women elected or appointed in both houses.", "A record 131 women currently serve in the 116 th Congress. This is higher than the previous record from the 115 th Congress (109 women initially sworn in, 5 House Members subsequently elected, and 2 Senators subsequently appointed). Of these 131 women, there are", "25 in the Senate (17 Democrats and 8 Republicans); 106 in the House (91 Democrats and 15 Republicans); 4 of the women in the House who serve as Delegates or Resident Commissioner (2 Democrats and 2 Republicans), representing the District of Columbia, American Samoa, the U.S. Virgin Islands, and Puerto Rico; 25 African American women, 10 Asian Pacific American women, 15 Hispanic women, and 2 Native American women; and 5 women who chair House committees, 1 woman who chairs a Senate standing committee, 1 woman who chairs a House select committee, and 1 woman who chairs a Senate select committee. One of the House committee chairs also chairs a Joint Committee. ", "Other notable facts about women in the 116 th Congress include the following:", "Not including Delegates and the Resident Commissioner, women currently hold 102 (23.4%) seats in the House of Representatives and 25 (25%) seats in the Senate, totaling 127 (23.7%) of the 535 voting seats in the 116 th Congress. Including Delegates and the Resident Commissioner, women currently hold 106 seats in the House of Representatives, increasing the total to 131 seats (24.2%) in the entire Congress.", "This report includes brief biographical information, committee assignments, dates of service, listings by Congress and state, and (for Representatives) congressional districts of the 365 women who have been elected or appointed to Congress. It will be updated when there are relevant changes in the makeup of Congress.", "For additional information, including a discussion of the impact of women in Congress as well as historical information, including the number and percentage of women in Congress over time, data on entry to Congress, comparisons to international and state legislatures, tenure, firsts for women in Congress, women in leadership, and African American, Asian Pacific American, Hispanic, and Native American women in Congress, see CRS Report R43244, Women in Congress: Statistics and Brief Overview , by Jennifer E. Manning and Ida A. Brudnick. "], "subsections": [{"section_title": "Tables and Data", "paragraphs": ["The lists and tables that follow provide information on women Members of Congress, including the dates they were first elected or appointed, the Congresses in which they served, the committees on which they served, and, where relevant, the committees they chaired or served on as ranking Member.", " Table 1 lists all the women who have served in each Congress, by Congress. Table 2 lists the women Members of Congress, by state. Table 3 provides the total number of women in each Congress.", "Most of the data presented are from the", "Biographical Directory of the United States Congress, 1774-present , available at http://bioguide.congress.gov ; various editions of the Congressional Directory ; Congressional Quarterly and Leadership Directories Inc. publications; and Women in Congress website, at http://womenincongress.house.gov , maintained by the House of Representatives' Office of the Historian and the Office of Art and Archives, Office of the Clerk. ", "The 116 th Congress committee assignments sources are the", "House, Official Alphabetical List of the Members with Committee Assignments in the 11 6 th Congress , available from the Clerk of the House's website at http://clerk.house.gov/committee_info/oal.aspx ; and Senate, Committee Assignments of the 11 6 th Congress , available at the Senate website at http://www.senate.gov/general/committee_assignments/assignments.htm .", "The names and jurisdiction of House and Senate committees have changed many times over the years. In the interest of brevity, this report does not identify all historical name changes. The committee names listed are for the most part those in effect at the time a Member served on the panel."], "subsections": []}]}, {"section_title": "Alphabetical Listing, Including Dates of Service and Committee Assignments5", "paragraphs": ["ABEL, HAZEL HEMPEL. Republican; Nebraska, Senator. Elected to the 83 rd Congress to fill the vacancy caused by the death of Dwight P. Griswold and filled in the interim by Eva Bowring. (served Nov. 8, 1954, until her resignation Dec. 31, 1954)", "Committee assignments: ", "S. Finance (83 rd Congress) S. Interstate and Foreign Commerce (83 rd Congress)", "ABZUG, BELLA S. Democrat; New York, 19 th District (92 nd Congress) and 20 th District (93 rd -94 th Congresses). Elected to the 92 nd -94 th Congresses. (served Jan. 3, 1971-Jan. 3, 1977)", "Committee assignments:", "H. Government Operations (92 nd -94 th Congresses) H. Public Works (92 nd -94 th Congresses)", "ADAMS, ALMA S. Democrat; North Carolina, 12 th District. Elected to the 113 th Congress to fill the vacancy caused by the resignation of Melvin L. Watt, and also elected to the 114 th -116 th Congresses. (served Nov. 4, 2014-present)", "Committee assignments:", "H. Agriculture (114 th -116 th Congresses) H. Education and the Workforce/Education and Labor (114 th -116 th Congresses) H. Small Business (114 th -115 th Congresses) H. Financial Services (116 th Congress)", "ADAMS, SANDY. Republican; Florida, 24 th District. Elected to the 112 th Congress. (served Jan. 3, 2011-Jan. 3, 2013)", "Committee assignments:", "H. Judiciary (112 th Congress) H. Science, Space and Technology (112 th Congress)", "ALLEN, MARYON PITTMAN. Democrat; Alabama, Senator. Appointed to the 95 th Congress June 8, 1978, to fill vacancy caused by the death of husband James B. Allen. (served June 12, 1978-Jan. 3, 1979)", "Committee assignments:", "S. Agriculture, Nutrition, and Forestry (95 th Congress) S. Judiciary (95 th Congress)", "ANDREWS, ELIZABETH B. Democrat; Alabama, 3 rd District. Elected to the 92 nd Congress in an April 4, 1972, special election to fill vacancy caused by the death of husband George W. Andrews. (served April 10, 1972-Jan. 3, 1973)", "Committee assignment:", "H. Post Office and Civil Service (92 nd Congress)", "ASHBROOK, JEAN. Republican; Ohio, 17 th District. Elected to the 97 th Congress in a June 29, 1982, special election to fill vacancy caused by the death of husband John M. Ashbrook. (served July 12, 1982-Jan. 3, 1983)", "Committee assignment:", "H. Merchant Marine and Fisheries (97 th Congress)", "AMATA, AUMUA. See RADEWAGEN, AUMUA AMATA COLEMAN.", "AXNE, CYNTHIA. Democrat; Iowa, 3 rd District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Financial Services (116 th Congress) H. Agriculture (116 th Congress)", "AYOTTE, KELLY. Republican; New Hampshire, Senator. Elected in 2010. (served Jan. 3, 2011-Jan. 3, 2017)", "Committee assignments: ", "S. Armed Services (112 th -114 th Congresses) S. Budget (112 th -114 th Congresses) S. Commerce, Science and Transportation (112 th -114 th Congresses) S. Small Business and Entrepreneurship (112 th -114 th Congresses) S. Special Aging (112 th -113 th Congresses) S. Homeland Security and Governmental Affairs (113 th -114 th Congresses)", "BACHMANN, MICHELE. Republican; Minnesota, 6 th District. Elected to the 110 th -113 th Congresses. (served Jan. 3, 2007-Jan. 3, 2015)", "Committee assignments: ", "H. Financial Services (110 th -113 th Congresses) H. Intelligence (112 th -113 th Congresses)", "BAKER, IRENE BAILEY. Republican; Tennessee, 2 nd District. Elected to the 88 th Congress in a March 10, 1964, special election, to fill vacancy caused by the death of husband Howard H. Baker, Sr. (served March 10, 1964-Jan. 3, 1965)", "Committee assignment:", "H. Government Operations (88 th Congress)", "BAKER, NANCY KASSEBAUM. See KASSEBAUM, NANCY LANDON.", "BALDWIN, TAMMY. Democrat; Wisconsin, 2 nd District. Elected to the 106 th -112 th Congresses (served in House Jan. 3, 1999-Jan. 3, 2013). Subsequently elected to the Senate in 2012 and reelected in 2018. (served in Senate Jan. 3, 2013-present)", "Committee assignments:", "H. Budget (106 th -108 th Congresses) H. Judiciary (106 th -111 th Congresses) H. Energy and Commerce (109 th -112 th Congresses) S. Budget (113 th -114 th Congresses) S. Energy (113 th Congresses) S. Homeland Security and Governmental Affairs (113 th -114 th Congresses) S. Health, Education, Labor, and Pensions (113 th -116 th Congresses) S. Special Aging (113 th Congress) S. Appropriations (114 th -116 th Congresses) S. Commerce, Science and Transportation (115 th -116 th Congresses)", "BARR\u00c1GAN, NANETTE DIAZ. Democrat; California, 44 th District. Elected to the 115 th -116 th Congresses. (served Jan. 3, 2017-present)", "Committee assignments:", "H. Homeland Security (115 th -116 th Congresses) H. Natural Resources (115 th Congress) H. Energy and Commerce (116 th Congress)", "BASS, KAREN. Democrat; California, 33 rd (112 th Congress) and 37 th District (113 th Congress-present). Elected to the 112 th -116 th Congresses. (served Jan. 3, 2011-present). Chair of the Congressional Black Caucus, 116 th Congress.", "Committee assignments:", "H. Budget (112 th Congress) H. Foreign Affairs (112 th -116 th Congresses) H. Judiciary (113 th -116 th Congresses)", "BEAN, MELISSA L. Democrat; Illinois, 8 th District. Elected to the 109 th -111 th Congresses. (served Jan. 3, 2005-Jan. 3, 2011)", "Committee assignments:", "H. Financial Services (109 th -111 th Congresses) H. Small Business (109 th -111 th Congresses)", "BEATTY, JOYCE. Democrat; Ohio, 3 rd District. Elected to the 113 th -116 th Congresses. (served Jan. 3, 2013-present)", "Committee assignments:", "H. Financial Services (113 th -116 th Congresses) Jt. Economic (116 th Congress)", "BENTLEY, HELEN DELICH. Republican; Maryland, 2 nd District. Elected to the 99 th -103 rd Congresses. (served Jan. 3, 1985-Jan. 3, 1995)", "Committee assignments:", "H. Merchant Marine and Fisheries (99 th -103 rd Congresses) H. Public Works and Transportation (99 th , 100 th , and 102 nd Congresses) H. Select Aging (99 th -102 nd Congresses) H. Budget (101 st -102 nd Congresses) H. Appropriations (103 rd Congress)", "BERKLEY, SHELLEY. Democrat; Nevada, 1 st District. Elected to the 106 th -112 th Congresses. (served Jan. 3, 1999-Jan. 3, 2013)", "Committee assignments:", "H. Small Business (106 th Congress) H. Transportation and Infrastructure (106 th -109 th Congresses) H. Veterans' Affairs (106 th -110 th Congresses) H. International Relations (107 th -109 th Congresses) H. Foreign Affairs (111 th Congress) H. Ways and Means (110 th -112 th Congresses)", "BIGGERT, JUDY. Republican; Illinois, 13 th District. Elected to the 106 th -112 th Congresses. (served Jan. 3, 1999-Jan. 3, 2013)", "Committee assignments:", "H. Banking and Financial Services (106 th Congress) H. Government Reform (106 th Congress) H. Financial Services (107 th -112 th Congresses) H. Science/Science and Technology/Science, Space and Technology (106 th -112 th Congresses) H. Education and the Workforce/and Labor (107 th -112 th Congresses) H. Standards of Official Conduct (107 th -109 th Congresses)", "BLACK, DIANE. Republican; Tennessee, 6 th District. Elected to the 112 th -115 th Congresses. (served Jan. 3, 2011-Jan. 3, 2019)", "Committee assignments:", "H. Budget (112 th -115 th Congresses; chair, 115 th Congress, 1 st session) H. Ways and Means (112 th -115 th Congresses)", "BLACKBURN, MARSHA. Republican; Tennessee, 7 th District, and Senator. Elected to the 108 th -115 th Congresses. (served in House Jan. 3, 2003-Jan. 3, 2019). Subsequently elected to the Senate in 2018. (served in Senate Jan. 3, 2019-present)", "Committee assignments: ", "H. Education and the Workforce (108 th Congress) H. Government Reform (108 th Congress) H. Judiciary (108 th Congress) H. Energy and Commerce (109 th -115 th Congresses) H. Select Energy Independence and Global Warming (111 th Congress) H. Budget (113 th -114 th Congresses) S. Armed Services (116 th Congress) S. Commerce, Science and Transportation (116 th Congress) S. Judiciary (116 th Congress) S. Veterans' Affairs (116 th Congress)", "BLITCH, IRIS FAIRCLOTH. Democrat; Georgia, 8 th District. Elected to the 84 th -87 th Congresses. (served Jan. 3, 1955-Jan. 3, 1963)", "Committee assignment:", "H. Public Works (84 th -87 th Congresses)", "BLUNT ROCHESTER, LISA. Democrat; Delaware, At Large. Elected to the 115 th -116 th Congresses. (served Jan. 3, 2017-present)", "Committee assignments:", "H. Agriculture (115 th Congress) H. Education and the Workforce (115 th Congress) H. Energy and Commerce (116 th Congress)", "BOGGS, CORINNE C. (LINDY). Democrat; Louisiana, 2 nd District. Elected to the 93 rd Congress in a March 20, 1973, special election to fill vacancy caused by the death of husband Thomas Hale Boggs, Sr.; reelected to the 94 th -101 st Congresses. (served March 27, 1973-Jan. 3, 1991)", "Committee assignments:", "H. Banking and Currency/Banking, Currency, and Housing (93 rd -94 th Congresses) H. House Administration (94 th Congress) H. Appropriations (95 th -101 st Congresses) H. Select Children, Youth, and Families (99 th -101 st Congresses) Jt. Bicentennial Arrangements (94 th Congress; chair) Commission of the Bicentenary of the U.S. House (chair, 99 th -100 th Congresses)", "BOLAND, VERONICA GRACE. Democrat; Pennsylvania, 11 th District. Elected to the 77 th Congress, to fill vacancy caused by the death of husband Patrick J. Boland. (served Nov. 19, 1942-Jan. 3, 1943)", "No committee assignments listed.", "BOLTON, FRANCES PAYNE. Republican; Ohio, 22 nd District. Elected to the 76 th Congress in a Feb. 27, 1940, special election to fill vacancy caused by death of husband Chester C. Bolton; reelected to the 77 th -90 th Congresses. (served March 5, 1940-Jan. 3, 1969)", "Committee assignments:", "H. Election of President, Vice President, and Representatives in Congress (76 th Congress) H. Expenditures in Executive Departments (76 th Congress) H. Foreign Affairs (77 th -90 th Congresses; ranking member, 88 th -90 th Congresses)", "BONAMICI, SUZANNE. Democrat; Oregon, 1 st District. Elected to the 112 th Congress in a Jan. 31, 2012, special election to fill vacancy caused by resignation of David Wu; reelected to the 113 th -116 th Congresses. (served Feb. 7, 2012-present)", "Committee assignments:", "H. Budget (112 th Congress) H. Science, Space and Technology (112 th -116 th Congresses) H. Education and the Workforce/Education and Labor (113 th -116 th Congresses) H. Select Committee on the Climate Crisis (116 th Congress)", "BONO MACK, MARY. Republican; California, 44 th District (105 th -107 th Congresses) and 45 th District (108 th -112 th Congresses). Elected to the 105 th Congress in an April 7, 1998, special election to fill vacancy caused by the death of husband Sonny Bono; reelected to the 106 th -112 th Congresses. (served April 20, 1998-Jan. 3, 2013)", "Committee assignments:", "H. National Security (105 th Congress) H. Judiciary (105 th -106 th Congresses) H. Armed Services (106 th Congress) H. Small Business (106 th Congress) H. Energy and Commerce (107 th -112 th Congresses)", "BORDALLO, MADELEINE Z. Democrat; Delegate from Guam. Elected to the 108 th -115 th Congresses. (served Jan. 3, 2003-Jan. 3, 2019)", "Committee assignments:", "H. Armed Services (108 th -115 th Congresses) H. Resources/Natural Resources (108 th -115 th Congresses) H. Small Business (108 th -109 th Congresses)", "BOSONE, REVA ZILPHA BECK. Democrat; Utah, 2 nd District. Elected to the 81 st and 82 nd Congresses. (served Jan. 3, 1949-Jan. 3, 1953)", "Committee assignments:", "H. Public Lands (81 st Congress) H. Administration (82 nd Congress) H. Interior and Insular Affairs (82 nd Congress)", "BOWRING, EVA KELLY. Republican; Nebraska, Senator. Appointed to the Senate April 16, 1954, to fill vacancy caused by death of Dwight Griswold. (served April 16-Nov. 8, 1954)", "Committee assignments:", "S. Interstate and Foreign Commerce (83 rd Congress) S. Labor and Public Welfare (83 rd Congress) S. Post Office and Civil Service (83 rd Congress)", "BOYDA, NANCY. Democrat; Kansas, 2 nd District. Elected to the 110 th Congress. (served Jan. 3, 2007-Jan. 3, 2009)", "Committee assignments:", "H. Agriculture (110 th Congress) H. Armed Services (110 th Congress)", "BOXER, BARBARA. Democrat; California, 6 th District. Elected to the 98 th -102 nd Congresses (served in House Jan. 3, 1983-Jan. 3, 1993). Subsequently elected to the Senate in 1992 and reelected in 1998, 2004, and 2010. (served in Senate Jan. 5, 1993-Jan. 3, 2017)", "Committee assignments:", "H. Merchant Marine and Fisheries (98 th Congress) H. Government Operations (98 th -102 nd Congresses) H. Budget (99 th -101 st Congresses) H. Select Children, Youth, and Families (99 th -102 nd Congresses) H. Armed Services (102 nd Congress) S. Banking, Housing, and Urban Affairs (103 rd -105 th Congresses) S. Budget (103 rd -106 th Congresses) S. Environment and Public Works (103 rd -114 th Congresses; chair, 110 th -113 th Congresses; ranking member, 114 th Congress) S. Appropriations (105 th Congress) S. Foreign Relations (106 th -114 th Congresses) S. Commerce, Science, and Transportation (107 th -113 th Congresses) S. Select Ethics (110 th -114 th Congresses; chair, 110 th -113 th Congresses; vice chair, 114 th Congress)", "BROOKS, SUSAN. Republican; Indiana, 5 th District. Elected to the 113 th -116 th Congresses. (served Jan. 3, 2013-present)", "Committee assignments:", "H. Education and the Workforce (113 th Congress) H. Ethics (113 th -115 th Congresses; chair, 115 th Congress) H. Homeland Security (113 th Congress) H. Select Terrorist Attack in Benghazi (113 th -114 th Congresses) H. Energy and Commerce (114 th -116 th Congresses) H. Select Modernization of Congress (116 th Congress)", "BROWN, CORRINE. Democrat; Florida, 3 rd District (103 rd -112 th Congresses), 5 th District (113 th -114 th Congress). Elected to the 103 rd -114 th Congresses. (served Jan. 3, 1993-Jan. 3, 2017)", "Committee assignments:", "H. Government Operations (103 rd Congress) H. Public Works and Transportation (103 rd Congress) H. Transportation and Infrastructure (104 th -114 th Congresses) H. Veterans' Affairs (103 rd -114 th Congresses; ranking member, 114 th Congress)", "BROWN-WAITE, GINNY. Republican; Florida, 5 th District. Elected to the 108 th -111 th Congresses. (served Jan. 3, 2003-Jan. 3, 2011)", "Committee assignments:", "H. Budget (108 th -109 th Congresses) H. Financial Services (108 th -110 th Congresses) H. Veterans Affairs (108 th -110 th Congresses) H. Homeland Security (109 th -110 th Congresses) H. Ways and Means (111 th Congress)", "BROWNLEY, JULIA. Democrat; California, 26 th District. Elected to the 113 th -116 th Congresses. (served Jan. 3, 2013-present)", "Committee assignments:", "H. Education and the Workforce (113 th Congress) H. Science and Technology (113 th Congress) H. Transportation and Infrastructure (114 th -116 th Congresses) H. Veterans' Affairs (114 th -116 th Congresses) H. Select Committee on the Climate Crisis (116 th Congress)", "BUCHANAN, VERA DAERR. Democrat; Pennsylvania, 30 th District. Elected to the 82 nd Congress in a July 24, 1951, special election to fill vacancy caused by death of husband Frank Buchanan; reelected to the 83 rd -84 th Congresses. (served August 1, 1951, until her death Nov. 26, 1955)", "Committee assignments:", "H. Merchant Marine and Fisheries (82 nd Congress, 1 st session) H. Veterans' Affairs (82 nd Congress, 1 st session) H. Public Works (82 nd Congress, 2 nd session-83 rd Congress) H. Banking and Currency (84 th Congress)", "BUERKLE, ANN MARIE. Republican; New York, 25 th District. Elected to the 112 th Congress. (served Jan. 3, 2011-Jan. 3, 2013)", "Committee assignments:", "H. Foreign Affairs (112 th Congress) H. Oversight and Government Reform (112 th Congress) H. Veterans' Affairs (112 th Congress)", "BURDICK, JOCELYN BIRCH. Democrat; North Dakota, Senator. Appointed to Senate Sept. 12, 1992, to fill vacancy caused by death of husband Quentin Burdick. (served Sept. 16, 1992-Dec. 4, 1992)", "Committee assignment:", "S. Environment and Public Works (102 nd Congress)", "BURKE, YVONNE BRATHWAITE. Democrat; California, 37 th District. Elected to the 93 rd -95 th Congresses. (served Jan. 3, 1973-Jan. 3, 1979). First female Chair of the Congressional Black Caucus, 94 th Congress.", "Committee assignments:", "H. Public Works (93 rd Congress) H. Interior and Insular Affairs (93 rd Congress) H. Appropriations (94 th -95 th Congresses) H. Select Committee on the House Beauty Shop (chair, 94 th -95 th Congresses)", "BURTON, SALA. Democrat; California, 5 th District. Elected to the 98 th Congress in a June 21, 1983, special election, to fill vacancy caused by death of husband Phillip Burton; reelected to the 99 th -100 th Congresses. (served June 28, 1983, until her death Feb. 1, 1987)", "Committee assignments:", "H. Education and Labor (98 th Congress) H. Interior and Insular Affairs (98 th Congress) H. Select Committee on Hunger (98 th -99 th Congresses) H. Rules (99 th -100 th Congresses)", "BUSHFIELD, VERA CAHALAN. Republican; South Dakota, Senator. Appointed to the Senate Oct. 6, 1948, to fill vacancy caused by death of husband Harlan J. Bushfield; resigned Dec. 26, 1948.", "No committee assignments listed.", "BUSTOS, CHERI. Democrat; Illinois, 17 th District. Elected to the 113 th -116 th Congresses. (served Jan. 3, 2013-present)", "Committee assignments:", "H. Agriculture (113 th -116 th Congresses) H. Transportation and Infrastructure (113 th -115 th Congresses) H. Appropriations (116 th Congress)", "BYRNE, LESLIE. Democrat; Virginia, 11 th District. Elected to the 103 rd Congress. (served Jan. 3, 1993-Jan. 3, 1995)", "Committee assignments:", "H. Post Office and Civil Service (103 rd Congress) H. Public Works and Transportation (103 rd Congress)", "BYRON, BEVERLY BARTON BUTCHER. Democrat; Maryland, 6 th District. Elected to the 96 th Congress to fill vacancy caused by death of husband Goodloe E. Byron; reelected to the 97 th -102 nd Congresses. (served Jan. 3, 1979-Jan. 3, 1993)", "Committee assignments:", "H. Armed Services (96 th -102 nd Congresses) H. Select Committee on Aging (96 th -102 nd Congresses) H. Interior and Insular Affairs (97 th -102 nd Congresses)", "BYRON, KATHARINE EDGAR. Democrat; Maryland, 6 th District. Elected to the 77 th Congress in a May 27, 1941, special election to fill vacancy caused by death of husband William Devereux Byron. (served June 11, 1941-Jan. 3, 1943)", "Committee assignments:", "H. Civil Service (77 th Congress) H. War Claims (77 th Congress)", "CANTWELL, MARIA. Democrat; Washington, 1 st District. Elected to the 103 rd Congress (served in House Jan. 3, 1993-Jan. 3, 1995). Subsequently elected to the Senate in 2000 and reelected in 2006, 2012, and 2018. (served in Senate Jan. 3, 2001-present)", "Committee assignments:", "H. Foreign Affairs (103 rd Congress) H. Merchant Marine and Fisheries (103 rd Congress) H. Public Works and Transportation (103 rd Congress) S. Judiciary (107 th Congress) S. Energy and Natural Resources (107 th -116 th Congresses; ranking member, 114 th -115 th Congresses) S. Small Business and Entrepreneurship (107 th -116 th Congresses; chair, 113 th Congress, 2 nd session) S. Indian Affairs (107 th -116 th Congresses; chair, 113 th Congress, 1 st session) S. Commerce, Science, and Transportation (108 th -116 th Congresses; ranking member, 116 th Congress) S. Finance (110 th -116 th Congresses)", "CAPITO, SHELLEY MOORE. Republican; West Virginia, 2 nd District; Senator. Elected to the 107 th -113 th Congresses. (served in House Jan. 3, 2001-Jan. 3, 2015). Subsequently elected to the Senate in 2014. (served in Senate Jan. 3, 2015-present)", "Committee assignments:", "H. Financial Services (107 th -113 th Congresses) H. Small Business (107 th -108 th Congresses) H. Transportation and Infrastructure (107 th -113 th Congresses) H. Rules (109 th Congress) H. Select Committee on Energy and Global Warming (111 th Congress) S. Appropriations (114 th -116 th Congresses) S. Energy and Natural Resources (114 th -115 th Congresses) S. Environment and Public Works (114 th -116 th Congresses) S. Rules and Administration (114 th -116 th Congresses) Jt. Committee on the Library (114 th -115 th Congresses) S. Commerce, Science, and Transportation (115 th -116 th Congresses)", "CAPPS, LOIS. Democrat; California, 22 nd District (105 th -107 th Congresses), 23 rd District (108 th -112 th Congresses) and 24 th District (113 th -114 th Congress). Elected to the 105 th Congress in a March 9, 1998, special election to fill vacancy caused by death of husband Walter Capps; reelected to the 106 th -114 th Congresses. (served March 17, 1998-Jan. 3. 2017)", "Committee assignments:", "H. International Relations (105 th Congress) H. Science (105 th Congress) H. Commerce (106 th Congress) H. Energy and Commerce (107 th -114 th Congresses) H. Budget (109 th Congress) H. Natural Resources (110 th -111 th Congresses; 114 th Congress) H. Ethics (114 th Congress)", "CARAWAY, HATTIE WYATT. Democrat; Arkansas, Senator. Appointed to the Senate Nov. 13, 1931, and elected Jan. 12, 1932, to fill the vacancy caused by death of husband Thaddeus H. Caraway; reelected to two full Senate terms. (served Dec. 8, 1931-Jan. 3, 1945)", "Committee assignments:", "S. Agriculture and Forestry (72 nd -78 th Congresses) S. Commerce (72 nd -78 th Congresses) S. Enrolled Bills (72 nd -78 th Congresses; chair, 73 rd -78 th Congresses) S. Library (72 nd -78 th Congresses)", "CARNAHAN, JEAN. Democrat; Missouri, Senator. Appointed to the Senate Dec. 4, 2000, to fill vacancy caused by her husband's (Governor Mel Carnahan's) posthumous election to the Senate. (served Jan. 3, 2001-Nov. 25, 2003)", "Committee assignments:", "S. Armed Services (107 th Congress) S. Commerce, Science and Transportation (107 th Congress) S. Governmental Affairs (107 th Congress) S. Small Business and Entrepreneurship (107 th Congress) S. Special Committee on Aging (107 th Congress)", "CARSON, JULIA. Democrat; Indiana, 10 th District (105 th -107 th Congresses) and 7 th District (108 th -110 th Congresses). Elected to the 105 th -110 th Congresses. (served Jan. 3, 1997, until her death Dec. 15, 2007)", "Committee assignments:", "H. Banking and Financial Services/Financial Services (105 th -110 th Congresses) H. Veterans' Affairs (105 th -107 th Congresses) H. Transportation and Infrastructure (108 th -110 th Congresses)", "CASTOR, KATHY. Democrat; Florida, 11 th District (110 th -112 th Congresses) and 14 th District (113 th Congress-present). Elected to the 110 th -116 th Congresses. (served Jan. 3, 2007-present)", "Committee assignments:", "H. Armed Services (110 th , 112 th Congresses) H. Rules (110 th Congress) H. Energy and Commerce (111 th -116 th Congresses) H. Standards of Official Conduct (111 th Congress) H. Budget (112 th -114 th Congresses) H. Select Committee on the Climate Crisis (116 th Congress; chair)", "CHENEY, LIZ. Republican; Wyoming, At Large. Elected to the 115 th -116 th Congresses. (served Jan. 3, 2017-present)", "Committee assignments:", "H. Armed Services (115 th -116 th Congresses) H. Natural Resources (115 th -116 th Congresses) H. Rules (115 th Congress)", "CHENOWETH, HELEN. Republican; Idaho, 1 st District. Elected to the 104 th -106 th Congresses. (served Jan. 3, 1995-Jan. 3, 2001)", "Committee assignments:", "H. Agriculture (104 th -106 th Congresses) H. Resources (104 th -106 th Congresses) H. Veterans' Affairs (105 th -106 th Congresses) H. Government Reform (106 th Congress)", "CHISHOLM, SHIRLEY ANITA. Democrat; New York, 12 th District. Elected to the 91 st -97 th Congresses. (served Jan. 3, 1969-Jan. 3, 1983) ", "Committee assignments:", "H. Veterans' Affairs (91 st -92 nd Congresses) H. Education and Labor (92 nd -94 th Congresses) H. Rules (95 th -97 th Congresses)", "CHRISTENSEN, DONNA. Democrat; Delegate from the Virgin Islands. Elected to the 105 th -113 th Congresses. (served Jan. 3, 1997-Jan. 3, 2015)", "Committee assignments:", "H. Resources/Natural Resources (105 th -112 th Congresses) H. Small Business (105 th -109 th Congresses) H. Homeland Security (108 th -110 th Congresses; 112 th Congress) H. Energy and Commerce (111 th -113 th Congresses)", "CHRISTIAN-GREEN, DONNA and CHRISTIAN-CHRISTENSEN, DONNA . See CHRISTENSEN, DONNA .", "CHU, JUDY. Democrat; California, 32 nd District (111 th -112 th Congresses) and 27 th District (113 th Congress-present). Elected to the 111 th Congress in a July 14, 2009, special election to fill vacancy caused by resignation of Hilda Solis; reelected to 112 th -116 th Congresses. Chair of the Congressional Asian Pacific American Caucus, 112 th -116 th Congresses. (served July 16, 2009-present)", "Committee assignments:", "H. Education and Labor (111 th Congress) H. Judiciary (111 th -115 th Congresses) H. Oversight and Government Reform (111 th Congress) H. Small Business (112 th -116 th Congresses) H. Ways and Means (115 th -116 th Congresses)", "CHURCH, MARGUERITE STITT. Republican; Illinois, 13 th District. Elected to the 82 nd -87 th Congresses (served Jan. 3, 1951-Jan. 3, 1963). Representative Church succeeded her husband, Ralph E. Church, who died in office.", "Committee assignments:", "H. Expenditures in Executive Departments (82 nd Congress) H. Government Operations (83 rd Congress) H. Foreign Affairs (83 rd -87 th Congresses)", "CLARK, KATHERINE M. Democrat; Massachusetts, 5 th District. Elected to the 113 th Congress in a Dec. 10, 2013, special election to fill vacancy caused by the resignation of Edward Markey. Subsequently reelected to the 114 th -116 th Congresses. (served Dec. 12, 2013-present)", "Committee assignments:", "H. Natural Resources (113 th Congress) H. Science and Technology (113 th -114 th Congresses) H. Education and the Workforce (114 th Congress) H. Appropriations (115 th -116 th Congresses)", "CLARKE, MARIAN WILLIAMS. Republican; New York, 34 th District. Elected to the 73 rd Congress in a Dec. 28, 1933, special election to fill vacancy caused by death of husband John Davenport Clarke. (served Jan. 3, 1934-Jan. 3, 1935)", "Committee assignments:", "H. Civil Service (73 rd Congress) H. Claims (73 rd Congress) H. Invalid Pensions (73 rd Congress)", "CLARKE, YVETTE. Democrat; New York, 11 th District (110 th -112 th Congresses) and 9 th District (113 th Congress-present). Elected to the 110 th -116 th Congresses. (served Jan. 3, 2007-present)", "Committee assignments:", "H. Education and Labor (110 th -111 th Congresses) H. Homeland Security (110 th -113 th , 116 th Congresses) H. Small Business (110 th -114 th Congresses) H. Ethics (113 th -115 th Congresses) H. Energy and Commerce (114 th -116 th Congresses)", "CLAYTON, EVA. Democrat; North Carolina, 1 st District. Elected to the 102 nd Congress Nov. 3, 1992, to fill vacancy caused by death of Walter Jones; simultaneously elected to the 103 rd Congress; reelected to the 104 th -107 th Congresses. (served Nov. 5, 1992-Jan. 3, 2003)", "Committee assignments:", "H. Agriculture (103 rd -107 th Congresses) H. Small Business (103 rd -104 th Congresses) H. Budget (105 th -107 th Congresses)", "CLINTON, HILLARY RODHAM. Democrat; New York, Senator. Elected to the Senate in 2000 and reelected in 2006. (served Jan. 3, 2001, until her resignation Jan. 21, 2009, to become Secretary of State). First Lady of the United States, 1993-2001. ", "Committee assignments:", "S. Budget (107 th Congress) S. Environment and Public Works (107 th -110 th Congresses) S. Health, Education, Labor, and Pensions (107 th -110 th Congresses) S. Armed Services (108 th -110 th Congresses) S. Special Aging (109 th -110 th Congresses)", "COLLINS, BARBARA-ROSE. Democrat; Michigan, 13 th District (102 nd Congress) and 15 th District (103 rd -104 th Congresses). Elected to the 102 nd -104 th Congresses. (served Jan. 3, 1991-Jan. 3, 1997)", "Committee assignments:", "H. Public Works and Transportation (102 nd -103 rd Congresses) H. Science, Space and Technology (102 nd Congress) H. Government Operations (103 rd Congress) H. Post Office and Civil Service (103 rd Congress) H. Government Reform and Oversight (104 th Congress) H. Transportation and Infrastructure (104 th Congress) H. Select Children, Youth, and Families (102 nd Congress)", "COLLINS, CARDISS. Democrat; Illinois, 7 th District. Elected to the 93 rd Congress in a June 5, 1973, special election to fill vacancy caused by death of husband George W. Collins; reelected to the 94 th -104 th Congresses (served June 7, 1973-Jan. 3, 1997). Chair of the Congressional Black Caucus, 96 th Congress.", "Committee assignments:", "H. Government Operations/Government Reform and Oversight (93 rd -104 th Congresses) H. International Relations/Foreign Affairs (94 th -96 th Congresses) H. District of Columbia (95 th Congress) H. Select Committee on Narcotics Abuse and Control (96 th -102 nd Congresses) H. Energy and Commerce (97 th -103 rd Congresses) H. Commerce (104 th Congress)", "COLLINS, SUSAN M. Republican; Maine, Senator. Elected to the Senate in 1996; reelected in 2002, 2008, and 2014. (served Jan. 3, 1997-present)", "Committee assignments:", "S. Labor and Human Resources (105 th Congress) S. Governmental Affairs (105 th -108 th Congresses; chair, 108 th Congress) S. Homeland Security and Governmental Affairs (109 th -112 th Congresses; chair, 109 th Congress; ranking member, 110 th -112 th Congresses) S. Special Aging (105 th -116 th Congresses; ranking member, 113 th Congress; chair, 114 th -116 th Congresses) S. Special Committee on the Year 2000 Technology Problems (106 th Congress) S. Health, Education, Labor, and Pensions (106 th -107 th Congresses; 115 th -116 th Congresses) S. Armed Services (107 th -112 th Congresses) Jt. Economic (108 th Congress) S. Appropriations (111 th -116 th Congresses) S. Select Intelligence (113 th -116 th Congresses)", "COMSTOCK, BARBARA J. Republican; Virginia, 10 th District. Elected to the 114 th -115 th Congresses (served Jan. 3, 2015-Jan. 3, 2019). ", "Committee assignments:", "H. House Administration (114 th -115 th Congresses) H. Science and Technology (114 th -115 th Congresses) H. Transportation and Infrastructure (114 th -115 th Congresses)", "CORTEZ MASTO, CATHERINE . Democrat; Nevada, Senator. Elected in 2016. (served Jan. 3, 2017-present)", "Committee assignments:", "S. Banking, Housing, and Urban Affairs (115 th -116 th Congresses) S. Commerce, Science, and Transportation (115 th Congress) S. Energy and Natural Resources (115 th -116 th Congresses) S. Indian Affairs (115 th -116 th Congresses) S. Rules (115 th -116 th Congresses) S. Finance (116 th Congress)", "CRAIG, ANGELA. Democrat; Minnesota, 2 nd District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Agriculture (116 th Congress) H. Small Business (116 th Congress) H. Transportation and Infrastructure (116 th Congress)", "CUBIN, BARBARA. Republican; Wyoming, At Large. Elected to the 104 th -110 th Congresses. (served Jan. 3, 1995-Jan. 3, 2009) ", "Committee assignments:", "H. Resources (104 th -109 th Congresses) H. Science (104 th Congress) H. Commerce (105 th -106 th Congresses) H. Energy and Commerce (107 th -110 th Congresses)", "DAHLKEMPER, KATHLEEN A. Democrat; Pennsylvania, 3 rd District. Elected to the 111 th Congress. (served Jan. 3, 2009-Jan. 3, 2011) ", "Committee assignments:", "H. Agriculture (111 th Congress) H. Science and Technology (111 th Congress) H. Small Business (111 th Congress)", "DANNER, PAT. Democrat; Missouri, 6 th District. Elected to the 103 rd -106 th Congresses. (served Jan. 3, 1993-Jan. 3, 2001)", "Committee assignments:", "H. Public Works and Transportation/Transportation and Infrastructure (103 rd -106 th Congresses) H. Small Business (103 rd Congress) H. International Relations (105 th -106 th Congresses)", "DAVIDS, SHARICE. Democrat; Kansas, 3 rd District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Small Business (116 th Congress) H. Transportation and Infrastructure (116 th Congress)", "DAVIS, JO ANN. Republican; Virginia, 1 st District. Elected to the 107 th -110 th Congresses. (served Jan. 3, 2001, until her death Oct. 6, 2007)", "Committee assignments:", "H. Armed Services (107 th -110 th Congresses) H. Government Reform (107 th -108 th Congresses) H. International Relations (107 th -109 th Congresses) H. Foreign Affairs (110 th Congress) H. Select Intelligence (108 th -109 th Congresses)", "DAVIS, SUSAN. Democrat; California, 49 th District (107 th Congress) and 53 rd District (108 th Congress-present). Elected to the 107 th -116 th Congresses. (served Jan. 3, 2001-present)", "Committee assignments:", "H. Armed Services (107 th -116 th Congresses) H. Education and the Workforce/Education and Labor (107 th -116 th Congresses) H. Veterans' Affairs (108 th Congress) H. House Administration (110 th -111 th , 116 th Congresses) Jt. Printing (110 th , 116 th Congresses)", "DEAN, MADELEINE. Democrat; Pennsylvania, 4 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Financial Services (116 th Congress) H. Judiciary (116 th Congress)", "DEGETTE, DIANA. Democrat; Colorado, 1 st District. Elected to the 105 th -116 th Congresses. (served Jan. 3, 1997-present) ", "Committee assignments:", "H. Commerce/Energy and Commerce (105 th -116 th Congresses) H. Natural Resources (111 th , 116 th Congresses)", "DELAURO, ROSA. Democrat; Connecticut, 3 rd District. Elected to the 102 nd -116 th Congresses. (served Jan. 3, 1991-present) ", "Committee assignments:", "H. Government Operations (102 nd Congress) H. Public Works and Transportation (102 nd Congress) H. Select Committee on Aging (102 nd Congress) H. Appropriations (103 rd Congress; 105 th -116 th Congresses) H. National Security (104 th Congress) H. Budget (108 th -111 th , 116 th Congresses)", "DELBENE, SUZAN. Democrat; Washington, 1 st District. Elected to the 112 th Congress in a Nov. 6, 2012, special election to fill vacancy caused by resignation of Jay Inslee; reelected to the 113 th -116 th Congresses. (served Nov. 13, 2012-present)", "Committee assignments:", "H. Agriculture (113 th -114 th Congresses) H. Judiciary (113 th -114 th Congresses) H. Budget (115 th Congress) H. Ways and Means (115 th - 116 th Congresses) H. Select Modernization of Congress (116 th Congress)", "DEMINGS, VAL BUTLER . Democrat; Florida, 10 th District. Elected to the 115 th -116 th Congresses. (served Jan. 3, 2017-present) ", "Committee assignments:", "H. Homeland Security (115 th -116 th Congresses) H. Government Reform (115 th Congress) H. Judiciary (115 th -116 th Congresses) H. Intelligence (116 th Congress)", "DINGELL, DEBBIE. Democrat; Michigan, 12 th District. Elected to the 114 th -116 th Congress. (served Jan. 3, 2015-present) ", "Committee assignments:", "H. Budget (114 th Congress) H. Natural Resources (114 th , 116 th Congresses) H. Energy and Commerce (115 th -116 th Congresses) Jt. Select Solvency Multiemployer Pension Plans (115 th Congress)", "DOLE, ELIZABETH H. Republican; North Carolina, Senate. Elected to the Senate in 2002. (served Jan. 3, 2003-Jan. 3, 2009) ", "Committee assignments:", "S. Agriculture, Nutrition, and Forestry (108 th Congress) S. Armed Services (108 th -110 th Congresses) S. Banking, Housing, and Urban Affairs (108 th -110 th Congresses) S. Special Aging (108 th -110 th Congresses) S. Small Business and Entrepreneurship (110 th Congress)", "DOUGLAS, EMILY TAFT. Democrat; Illinois, At Large. Elected to the 79 th Congress. (served Jan. 3, 1945-Jan. 3, 1947)", "Committee assignment:", "H. Foreign Affairs (79 th Congress)", "DOUGLAS, HELEN GAHAGAN. Democrat; California, 14 th District. Elected to the 79 th -81 st Congresses. (served Jan. 3, 1945-Jan. 3, 1951)", "Committee assignment:", "H. Foreign Affairs (79 th -81 st Congresses)", "DRAKE, THELMA. Republican; Virginia, 2 nd District. Elected to the 109 th -110 th Congresses. (served Jan. 3, 2005-Jan. 3, 2009)", "Committee assignments:", "H. Armed Services (109 th -110 th Congresses) H. Education and the Workforce (109 th Congress) H. Resources (109 th Congress) H. Transportation and Infrastructure (110 th Congress)", "DUCKWORTH, TAMMY. Democrat; Illinois, 8 th District. Elected to the 113 th -114 th Congresses. (served in House Jan. 3, 2013-Jan. 3, 2017). Subsequently elected to the Senate in 2016. (served in Senate Jan. 3, 2017-present)", "Committee assignments:", "H. Armed Services (113 th -114 th Congresses) H. Oversight and Government Reform (113 th -114 th Congresses) H. Select Terrorist Attack in Benghazi (113 th -114 th Congresses) S. Commerce, Science, and Transportation (115 th -116 th Congresses) S. Energy and Natural Resources (115 th Congress) S. Environment and Public Works (115 th -116 th Congresses) S. Small Business and Entrepreneurship (115 th -116 th Congresses) S. Armed Services (116 th Congress)", "DUNN, JENNIFER. Republican; Washington, 8 th District. Elected to the 103 rd -108 th Congresses. (served Jan. 3, 1993-Jan. 3, 2005) ", "Committee assignments:", "H. Administration (103 rd Congress) H. Public Works and Transportation (103 rd Congress) H. Science, Space, and Technology (103 rd Congress) Jt. Committee on Congressional Operations (103 rd Congress) H. Oversight (104 th Congress) H. Ways and Means (104 th -108 th Congresses) Jt. Economic (107 th -108 th Congresses) H. Homeland Security (108 th Congress)", "DWYER, FLORENCE PRICE. Republican; New Jersey, 6 th District (85 th -89 th Congresses) and 12 th District (90 th -92 nd Congresses). Elected to the 85 th -92 nd Congresses. (served Jan. 3, 1957-Jan. 3, 1973)", "Committee assignments:", "H. Government Operations (85 th -92 nd Congresses; ranking member, 90 th -92 nd Congresses) H. Veterans' Affairs (85 th Congress) H. Banking and Currency (86 th -92 nd Congresses)", "EDWARDS, DONNA. Democrat; Maryland, 4 th District. Elected to the 110 th Congress in a June 17, 2008, special election to fill vacancy caused by the resignation of Albert Wynn; reelected to the 111 th -114 th Congresses. (served June 19, 2008-Jan. 3, 2017)", "Committee assignments:", "H. Science and Technology/Science, Space and Technology (110 th -114 th Congresses) H. Transportation and Infrastructure (110 th -114 th Congresses) H. Ethics (112 th Congress)", "EDWARDS, ELAINE. Democrat; Louisiana, Senator. Appointed to the Senate August 1, 1972, by her husband, Governor Edwin L. Edwards, to fill vacancy caused by death of Allen J. Ellender. (served August 7, 1972-Nov. 13, 1972)", "Committee assignments:", "S. Agriculture and Forestry (92 nd Congress) S. Public Works (92 nd Congress)", "ELLMERS, RENEE. Republican; North Carolina, 2 nd District. Elected to the 112 th -114 th Congresses. (served Jan. 3, 2011-Jan. 3, 2017)", "Committee assignments:", "H. Agriculture (112 th Congress) H. Foreign Affairs (112 th Congress) H. Small Business (112 th Congress) H. Energy and Commerce (113 th -114 th Congresses)", "EMERSON, JO ANN. Republican; Missouri, 8 th District. Elected to the 104 th Congress in a Nov. 5, 1996, special election to fill vacancy caused by death of husband, Bill Emerson, and simultaneously to the 105 th Congress; reelected to the 106 th -113 th Congresses. (served Nov. 5, 1996, until her resignation Jan. 22, 2013)", "Committee assignments:", "H. Agriculture (105 th Congress) H. Small Business (105 th Congress) H. Transportation and Infrastructure (105 th Congress) H. Appropriations (106 th -112 th Congresses)", "ENGLISH, KARAN. Democrat; Arizona, 6 th District. Elected to the 103 rd Congress. (served Jan. 3, 1993-Jan. 3, 1995)", "Committee assignments:", "H. Education and Labor (103 rd Congress) H. Natural Resources (103 rd Congress)", "ERNST, JONI. Republican; Iowa, Senator. Elected in 2014. (served Jan. 3, 2015-present)", "Committee assignments:", "S. Agriculture, Nutrition, and Forestry (114 th -116 th Congresses) S. Armed Services (114 th -116 th Congresses) S. Homeland Security and Governmental Affairs (114 th Congress) S. Small Business and Entrepreneurship (114 th -116 th Congresses) S. Environment and Public Works (115 th -116 th Congresses) Jt. Select Budget and Appropriations Process Reform (115 th Congress) S. Judiciary (116 th Congress)", "ESCOBAR, VERONICA. Democrat; Texas, 16 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Judiciary (116 th Congress) H. Armed Services (116 th Congress)", "ESHOO, ANNA G. Democrat; California, 14 th District (103 rd -112 th Congresses) and 18 th District (113 th Congress-present). Elected to the 103 rd -116 th Congresses. (served Jan. 3, 1993-present)", "Committee assignments:", "H. Merchant Marine and Fisheries (103 rd Congress) H. Science, Space, and Technology (103 rd Congress) H. Commerce (104 th -106 th Congresses) H. Energy and Commerce (107 th -116 th Congresses) H. Intelligence (108 th -111 th Congresses)", "ESLICK, WILLA McCORD BLAKE. Democrat; Tennessee, 7 th District. Elected to the 72 nd Congress in an August 4, 1932, special election to fill vacancy caused by death of husband Edward Eslick. (served Dec. 5, 1932-March 3, 1933)", "Committee assignments:", "H. Public Buildings and Grounds (72 nd Congress) H. World War Veterans' Legislation (72 nd Congress)", "ESTY, ELIZABETH. Democrat; Connecticut, 5 th District. Elected to the 113 th -115 th Congresses. (served Jan. 3, 2013-Jan. 3, 2019)", "Committee assignments:", "H. Science, Space and Technology (113 th -115 th Congresses) H. Transportation and Infrastructure (113 th -115 th Congresses)", "FALLIN, MARY. Republican; Oklahoma, 5 th District. Elected to the 110 th -111 th Congresses. (served Jan. 3, 2007-Jan. 3, 2011)", "Committee assignments: ", "H. Small Business (110 th -111 th Congresses) H. Transportation and Infrastructure (110 th -111 th Congresses) H. Natural Resources (110 th Congress) H. Armed Services (111 th Congress)", "FARRINGTON, MARY ELIZABETH PRUETT. Republican; Delegate from Hawaii. Elected to the 83 rd Congress in a July 31, 1954, special election to fill vacancy caused by death of husband, Joseph R. Farrington; reelected to the 84 th Congress. (served August 4, 1954-Jan. 3, 1957)", "Committee assignments:", "H. Agriculture (83 rd -84 th Congresses) H. Armed Services (83 rd -84 th Congresses) H. Interior and Insular Affairs (83 rd -84 th Congresses)", "FEINSTEIN, DIANNE. Democrat; California, Senator. Elected to the Senate Nov. 3, 1992, to fill the vacancy caused by the resignation of Pete Wilson. Subsequently elected to a full term on Nov. 8, 1994, and reelected in 2000, 2006, 2012, and 2018. (served Nov. 10, 1992-present)", "Committee assignments:", "S. Appropriations (103 rd Congress, 107 th -116 th Congresses) S. Judiciary (103 rd -116 th Congresses; ranking member, 115 th -116 th Congresses) S. Rules and Administration (103 rd -116 th Congresses; chair, 110 th Congress) S. Foreign Relations (104 th -105 th Congresses) Jt. Committee on the Library (105 th and 111 th Congresses; chair, 110 th Congress) S. Energy and Natural Resources (107 th -109 th Congresses) Jt. Committee on Inaugural Ceremonies (110 th -111 th Congresses) S. Select Intelligence (107 th -116 th Congresses; chair, 111 th -113 th Congresses; vice chair, 114 th Congress) Jt. Committee on Printing (106 th -107 th Congresses; vice chair, 110 th Congress)", "FELTON, REBECCA LATIMER. Democrat; Georgia, Senator. Appointed to the Senate on Oct. 3, 1922, to fill vacancy caused by death of Thomas E. Watson; sworn in Nov. 21, 1922; term expired Nov. 22 with the election of Walter George to the vacancy she filled.", "No committee assignments listed.", "FENWICK, MILLICENT. Republican; New Jersey, 5 th District. Elected to the 94 th -97 th Congresses. (served Jan. 3, 1975-Jan. 3, 1983)", "Committee assignments: ", "H. Banking, Currency, and Housing/Banking, Finance and Urban Affairs (94 th -95 th Congresses) H. Small Business (94 th -95 th Congresses) H. Standards of Official Conduct (95 th Congress) H. District of Columbia (96 th Congress) H. International Relations/Foreign Affairs (96 th -97 th Congresses) H. Education and Labor (97 th Congress) H. Select Committee on Aging (97 th Congress)", "FERRARO, GERALDINE ANN. Democrat; New York, 9 th District. Elected to the 96 th -98 th Congresses. (served Jan. 3, 1979-Jan. 3, 1985) ", "Committee assignments:", "H. Post Office and Civil Service (96 th -97 th Congresses) H. Public Works and Transportation (96 th -98 th Congresses) H. Select Committee on Aging (96 th -97 th Congresses) H. Budget (98 th Congress)", "FIEDLER, BOBBI. Republican; California, 21 st District. Elected to the 97 th -99 th Congresses. (served Jan. 3, 1981-Jan. 3, 1987)", "Committee assignments:", "H. Budget (97 th -99 th Congresses) Jt. Economics (99 th Congress)", "FINKENAUER, ABBY. Democrat; Iowa, 1 st District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Small Business (116 th Congress) H. Transportation and Infrastructure (116 th Congress)", "FISCHER, DEBRA (DEB). Republican; Nebraska, Senator. Elected to the Senate in 2012 and reelected in 2018. (served Jan. 3, 2013-present)", "Committee assignments:", "S. Agriculture, Nutrition and Forestry (115 th -116 th Congresses) S. Armed Services (113 th -116 th Congresses) S. Commerce, Science and Transportation (113 th -116 th Congresses) S. Environment and Public Works (113 th -115 th Congresses) S. Indian Affairs (113 th Congress) S. Small Business and Entrepreneurship (113 th -114 th Congresses) S. Special Aging (115 th Congress) S. Rules and Administration (115 th -116 th Congresses)", "FLETCHER, ELIZABETH (LIZZY) . Democrat; Texas, 7 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Science, Space and Technology (116 th Congress) H. Transportation and Infrastructure (116 th Congress)", "FOWLER, TILLIE. Republican; Florida, 4 th District. Elected to the 103 rd -106 th Congresses. (served Jan. 3, 1993-Jan. 3, 2001) ", "Committee assignments:", "H. Armed Services (103 rd , 106 th Congresses) H. National Security (104 th -105 th Congresses) H. Merchant Marine and Fisheries (103 rd Congress) H. Transportation and Infrastructure (104 th -106 th Congresses)", "FOXX, VIRGINIA. Republican; North Carolina, 5 th District. Elected to the 109 th -116 th Congresses. (served Jan. 3, 2005-present)", "Committee assignments: H. Agriculture (109 th -110 th Congresses) H. Education and the Workforce/Education and Labor (109 th -110 th Congresses, 113 th -116 th Congresses; chair, 115 th Congress, ranking member, 116 th Congress) H. Government Reform/Oversight and Government Reform/Oversight and Reform (109 th -110 th , 115 th -116 th Congresses) H. Rules (111 th -114 th Congresses) Jt. Select Solvency Multiemployer Pension Plans (115 th Congress)", "FRAHM, SHEILA. Republican; Kansas, Senator. Appointed to the Senate May 24, 1996, to fill vacancy caused by resignation of Robert Dole. (served June 11, 1996-Nov. 5, 1996)", "Committee assignments:", "S. Armed Services (104 th Congress) S. Banking, Housing, and Urban Affairs (104 th Congress)", "FRANKEL, LOIS. Democrat; Florida, 22 nd District (113 th -114 th Congresses) and 21 st District (115 th Congress-present). Elected to the 113 th -116 th Congresses. (served Jan. 3, 2013-present) ", "Committee assignments:", "H. Foreign Affairs (113 th -115 th Congresses) H. Transportation and Infrastructure (113 th -115 th Congresses) H. Appropriations (116 th Congress) Jt. Economic (116 th Congress)", "FUDGE, MARCIA F. Democrat; Ohio, 11 th District. Elected to the 110 th Congress in a Nov. 4, 2008, special election to fill vacancy caused by death of Stephanie Tubbs Jones; reelected to the 111 th -116 th Congresses. (served Nov. 19, 2008-present) Chair of the Congressional Black Caucus, 113 th Congress. ", "Committee assignments:", "H. Education and Labor/Education and the Workforce (111 th Congress; 113 th -116 th Congresses) H. Science and Technology/Science, Space and Technology (111 th -112 th Congresses) H. Agriculture (112 th -116 th Congresses) H. Administration (116 th Congress)", "FULMER, WILLA LYBRAND. Democrat; South Carolina, 2 nd District. Elected to the 78 th Congress Nov. 7, 1944, to fill vacancy caused by death of husband, Hampton P. Fulmer. (served Nov. 6, 1944-Jan. 3, 1945)", "No committee assignments listed.", "FURSE, ELIZABETH. Democrat; Oregon, 1 st District. Elected to the 103 rd -105 th Congresses. (served Jan. 3, 1993-Jan. 3, 1999)", "Committee assignments: H. Armed Services (103 rd Congress) H. Banking, Finance, and Urban Affairs (103 rd Congress) H. Merchant Marine and Fisheries (103 rd Congress) H. Commerce (104 th -105 th Congresses)", "GABBARD, TULSI. Democrat; Hawaii, 2 nd District. Elected to the 113 th -116 th Congresses. (served Jan. 3, 2013-present)", "Committee assignments:", "H. Armed Services (113 th -116 th Congresses) H. Foreign Affairs (113 th -115 th Congresses) H. Homeland Security (113 th Congress) H. Financial Services (116 th Congress)", "GARCIA, SYLVIA. Democrat; Texas, 29 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Financial Services (116 th Congress) H. Judiciary (116 th Congress)", "GASQUE, ELIZABETH HAWLEY. Democrat; South Carolina, 6 th District. Elected to the 75 th Congress in a Sept. 13, 1938, special election to fill vacancy caused by death of her husband, Allard H. Gasque; never sworn in or seated, because Congress was not in session between the time of her election and the expiration of her term.", "No committee assignments listed; never sworn in.", "GIBBS, FLORENCE REVILLE. Democrat; Georgia, 8 th District. Elected to the 76 th Congress in an Oct. 1, 1940, special election to fill vacancy caused by death of husband, Benjamin Gibbs. (served Oct. 3, 1940-Jan. 3, 1941)", "No committee assignments listed.", "GIFFORDS, GABRIELLE. Democrat; Arizona, 8 th District. Elected to the 110 th -112 th Congresses (served Jan. 3, 2007, until her resignation on Jan. 25, 2012). Giffords was seriously wounded in an assassination attempt on Jan. 8, 2011.", "Committee assignments:", "H. Armed Services (110 th -112 th Congresses) H. Foreign Affairs (110 th -111 th Congresses) H. Science and Technology/Science, Space and Technology (110 th -112 th Congresses)", "GILLIBRAND, KIRSTEN. Democrat; New York, 20 th District. Elected to the 110 th -111 th Congresses (served in House Jan. 3, 2007, until resignation on Jan. 26, 2009). Appointed to the Senate to fill vacancy caused by resignation of Hillary Clinton; elected to remainder of term in 2010 and reelected in 2012 and 2018. (served in Senate Jan. 27, 2009-present)", "Committee assignments:", "H. Agriculture (110 th Congress) H. Armed Services (110 th Congress) S. Foreign Relations (111 th Congress) S. Environment and Public Works (111 th -116 th Congresses) S. Special Aging (111 th -116 th Congresses) S. Agriculture, Nutrition and Forestry (111 th -116 th Congresses) S. Armed Services (112 th -116 th Congresses)", "GONZ\u00c1LEZ - COL\u00d3N, JENNIFFER. Republican; Resident Commissioner from Puerto Rico. Elected to the 115 th -116 th Congresses. (served Jan. 3, 2017-present)", "Committee assignments:", "H. Natural Resources (115 th -116 th Congresses) H. Small Business (115 th Congress) H. Veterans' Affairs (115 th Congress) H. Transportation and Infrastructure (116 th Congress) H. Science, Space and Technology (116 th Congress)", "GRAHAM, GWEN. Democrat; Florida, 2 nd District. Elected to the 114 th Congress. (served Jan. 3, 2015-Jan. 3, 2017)", "Committee assignments:", "H. Agriculture (114 th Congress) H. Armed Services (114 th Congress)", "GRANAHAN, KATHRYN ELIZABETH. Democrat; Pennsylvania, 2 nd District. Elected to the 84 th Congress in a Nov. 6, 1956, special election to fill the vacancy caused by the death of her husband, William T. Granahan, and to the 85 th Congress; reelected to the 86 th -87 th Congresses. (served Jan. 3, 1957-Jan. 3, 1963)", "Committee assignments:", "H. District of Columbia (85 th Congress) H. Post Office and Civil Service (85 th -87 th Congresses) H. Government Operations (85 th Congress, 2 nd session-87 th Congress)", "GRANGER, KAY. Republican; Texas, 12 th District. Elected to the 105 th -116 th Congresses. (served Jan. 3, 1997-present) ", "Committee assignments:", "H. Budget (105 th , 107 th Congresses) H. Oversight (105 th Congress) H. Transportation and Infrastructure (105 th Congress) Jt. Printing (105 th Congress) H. National Security (105 th Congress) H. Appropriations (106 th -116 th Congresses; ranking member, 116 th Congress) H. Homeland Security (108 th Congress)", "GRASSO, ELLA T. Democrat; Connecticut, 6 th District. Elected to the 92 nd -93 rd Congresses. (served Jan. 3, 1971-Jan. 3, 1975) ", "Committee assignments:", "H. Education and Labor (92 nd -93 rd Congresses) H. Veterans' Affairs (92 nd -93 rd Congresses)", "GRAVES, DIXIE BIBB. Democrat; Alabama, Senator. Appointed by her husband, Governor David Bibb Graves, to the Senate August 18, 1937, to fill the vacancy caused by the resignation of Hugo L. Black. (served August 20, 1937, until her resignation Jan. 10, 1938)", "Committee assignments: ", "S. Claims (75 th Congress) S. Education and Labor (75 th Congress) S. Mines and Mining (75 th Congress)", "GREEN, EDITH. Democrat; Oregon, 3 rd District. Elected to the 84 th -93 rd Congresses. (served Jan. 3, 1955, until her resignation Dec. 31, 1974)", "Committee assignments:", "H. Education and Labor (84 th -92 nd Congresses) H. Interior and Insular Affairs (84 th -85 th Congresses) Jt. Committee on Disposition of Executive Papers (85 th Congress) H. House Administration (86 th -87 th Congresses) H. Merchant Marine and Fisheries (88 th -90 th Congresses) H. Select Committee on the House Beauty Shop (90 th -93 rd Congresses) H. District of Columbia (92 nd Congress) H. Appropriations (93 rd Congress)", "GREENE, ENID. See WALDHOLTZ, ENID GREENE.", "GREENWAY, ISABELLA SELMES. Democrat; Arizona, At Large. Elected to the 73 rd Congress in a Oct. 3, 1933, special election to fill vacancy caused by resignation of Lewis W. Douglas; reelected to the 74 th Congress. (served Jan. 3, 1934-Jan. 3, 1937)", "Committee assignments:", "None listed (73 rd Congress) H. Indian Affairs (74 th Congress) H. Irrigation and Reclamation (74 th Congress) H. Public Lands (74 th Congress)", "GRIFFITHS, MARTHA WRIGHT. Democrat; Michigan, 17 th District. Elected to the 84 th -93 rd Congresses. (served Jan. 3, 1955-Jan. 3, 1975)", "Committee assignments:", "H. Banking and Currency (84 th -87 th Congresses) H. Government Operations (84 th -87 th Congresses) Jt. Economic (87 th -92 nd Congresses) H. Ways and Means (88 th -92 nd Congresses) H. Select Committee on the House Beauty Shop (chair, 90 th -93 rd Congresses) H. Select Committee on Crime (91 st Congress)", "HAALAND, DEBRA. Democrat; New Mexico, 1 st District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Natural Resources (116 th Congress; vice chair) H. Armed Services (116 th Congress)", "HAGAN, KAY. Democrat; North Carolina; Senator. Elected in 2008. (served Jan. 3, 2009-Jan. 3, 2015)", "Committee assignments:", "S. Armed Services (111 th -113 th Congresses) S. Health, Education, Labor, and Pensions (111 th -113 th Congresses) S. Small Business and Entrepreneurship (111 th -113 th Congresses) S. Banking, Housing and Urban Affairs (112 th -113 th Congresses)", "HAHN, JANICE. Democrat; California, 36 th District. Elected to the 112 th Congress in a July 12, 2011, special election to fill vacancy created by the resignation of Jane Harman; reelected to the 113 th -114 th Congresses. (served July 19, 2011, until her resignation Dec. 4, 2016)", "Committee assignments:", "H. Homeland Security (112 th Congress) H. Transportation and Infrastructure (113 th -114 th Congresses) H. Small Business (114 th Congress)", "HALL, KATIE. Democrat; Indiana, 1 st District. Elected to the 97 th Congress in a Nov. 2, 1982, special election to fill vacancy caused by death of Adam Benjamin Jr.; reelected to the 98 th Congress. (served Nov. 29, 1982-Jan. 3, 1985)", "Committee assignments:", "H. Post Office and Civil Service (98 th Congress) H. Public Works and Transportation (98 th Congress)", "HALVORSON, DEBBIE . Democrat; Illinois, 11 th District. Elected to the 111 th Congress. (served Jan. 3, 2009-Jan. 3, 2011)", "Committee assignments:", "H. Agriculture (111 th Congress) H. Small Business (111 th Congress) H. Veterans Affairs (111 th Congress)", "HANABUSA, COLLEEN. Democrat; Hawaii, 1 st District. Elected to the 112 th -113 th Congresses; to the 114 th Congress to fill vacancy caused by the death of Mark Takai, and to the 115 th Congress. (served Jan. 3, 2011-Jan. 3, 2015; Nov. 8, 2016-Jan. 3, 2019)", "Committee assignments:", "H. Armed Services (112 th , 113 th , 115 th Congresses) H. Natural Resources (112 th , 113 th , 115 th Congresses)", "HANDEL, KAREN. Republican; Georgia, 6 th District. Elected to the 115 th Congress to fill vacancy caused by the resignation of Tom Price. (served June 26, 2017-Jan. 3, 2019)", "Committee assignments:", "H. Education and the Workforce (115 th Congress) H. Judiciary (115 th Congress)", "HANSEN, JULIA BUTLER. Democrat; Washington, 3 rd District. Elected to the 86 th Congress Nov. 8, 1960, to fill vacancy caused by death of Russell V. Mack, and to the 87 th Congress; reelected to the 88 th -93 rd Congresses. (served Jan. 3, 1961-Jan. 3, 1975)", "Committee assignments:", "H. Veterans' Affairs (87 th Congress, 1 st session) H. Education and Labor (87 th Congress) H. Interior and Insular Affairs (87 th Congress) H. Appropriations (88 th -93 rd Congresses)", "HARDEN, CECIL MURRAY. Republican; Indiana, 6 th District. Elected to the 81 st -95 th Congresses. (served Jan. 3, 1949-Jan. 3, 1959)", "Committee assignments:", "H. Veterans' Affairs (81 st Congress) H. Expenditures in Executive Departments (82 nd Congress) H. Government Operations (83 rd -85 th Congresses) H. Post Office and Civil Service (83 rd -85 th Congresses)", "HARMAN, JANE. Democrat; California, 36 th District. Elected to the 103 rd -105 th Congresses and the 107 th -112 th Congresses. (served Jan. 3, 1993-Jan. 3, 1999; Jan. 3, 2001, until her resignation Feb. 28, 2011)", "Committee assignments:", "H. Armed Services (103 rd Congress) H. Science, Space, and Technology/Science (103 rd -104 th Congresses) H. National Security (104 th -105 th Congresses) H. Energy and Commerce (107 th , 111 th , 112 th Congresses) H. Intelligence (104 th -105 th Congresses; 107 th -109 th Congresses) H. Homeland Security (108 th -112 th Congresses)", "HARRIS, KAMALA DEVI. Democrat; California, Senator. Elected in 2016. (served Jan. 3, 2017-present)", "Committee assignments:", "S. Budget (115 th -116 th Congresses) S. Environment and Public Works (115 th Congress) S. Homeland Security (115 th -116 th Congresses) S. Judiciary (115 th -116 th Congresses) S. Select Intelligence (115 th -116 th Congresses)", "HARRIS, KATHERINE. Republican; Florida, 13 th District. Elected to the 108 th - 109 th Congresses. (served Jan. 3, 2003-Jan. 3, 2007)", "Committee assignments:", "H. Financial Services (108 th -109 th Congresses) H. International Relations (108 th -109 th Congresses) H. Homeland Security (109 th Congress)", "HART, MELISSA. Republican; Pennsylvania, 4 th District. Elected to the 107 th -109 th Congresses. (served Jan. 3, 2001-Jan. 3, 2007)", "Committee assignments:", "H. Financial Services (107 th -108 th Congresses) H. Judiciary (107 th -108 th Congresses) H. Science (107 th -108 th Congresses) H. Standards of Official Conduct (109 th Congress) H. Ways and Means (109 th Congress)", "HARTZLER, VICKY. Republican; Missouri, 4 th District. Elected to the 112 th -116 th Congresses. (served Jan. 3, 2011-present)", "Committee assignments:", "H. Agriculture (112 th -116 th Congresses) H. Armed Services (112 th -116 th Congresses) H. Budget (113 th -114 th Congresses)", "HASSAN, MAGGIE. Democrat; New Hampshire, Senator. Elected in 2016. (served Jan. 3, 2017-present)", "Committee assignments:", "S. Commerce, Science, and Transportation (115 th Congress) S. Health, Education, Labor, and Pensions (115 th -116 th Congresses) S. Homeland Security and Governmental Affairs (115 th -116 th Congresses) Jt. Economic (115 th -116 th Congresses) S. Finance (116 th Congress)", "HAWKINS, PAULA. Republican; Florida, Senator. Elected in 1980. (served Jan. 1, 1981-Jan. 3, 1987)", "Committee assignments:", "S. Agriculture, Nutrition, and Forestry (97 th -99 th Congress) S. Labor and Human Resources (97 th -99 th Congress) Jt. Economic (97 th Congress) S. Banking, Housing, and Urban Affairs (98 th Congress) S. Foreign Relations (98 th Congress) S. Special Aging (99 th Congress)", "HAYES, JAHANA. Democrat; Connecticut, 5 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Agriculture (116 th Congress) H. Education and Labor (116 th Congress)", "HAYWORTH, NAN. Republican; New York, 19 th District. Elected to the 112 th Congress. (served Jan. 3, 2011-Jan. 3, 2013)", "Committee assignment:", "H. Financial Services (112 th Congress)", "HECKLER, MARGARET M. Republican; Massachusetts, 19 th District. Elected to the 90 th -97 th Congresses. (served Jan. 3, 1967-Jan. 3, 1983) ", "Committee assignments:", "H. Government Operations (90 th Congress) H. Veterans' Affairs (90 th -97 th Congresses) H. Banking and Currency (91 st -93 rd Congresses) H. Select Committee on the House Beauty Shop (92 nd -93 rd Congresses) H. Agriculture (94 th -96 th Congresses) Jt. Economic (94 th , 96 th , 97 th Congresses) H. Select Committee on Ethics (96 th Congress) H. Science and Technology (97 th Congress)", "HEITKAMP, MARY KATHRYN (HEIDI). Democrat; North Dakota, Senator. Elected in 2012. (served Jan. 3, 2013-Jan. 3, 2019)", "Committee assignments:", "S. Agriculture, Nutrition, and Forestry (113 th -115 th Congresses) S. Banking, Housing and Urban Affairs (113 th -115 th Congresses) S. Homeland Security and Governmental Affairs (113 th -115 th Congresses) S. Indian Affairs (113 th -115 th Congresses) S. Small Business and Entrepreneurship (113 th -115 th Congresses) Jt. Select Solvency Multiemployer Pension Plans (115 th Congress)", "HERRERA BEUTLER, JAIME. Republican; Washington, 3 rd District. Elected to the 112 th -116 th Congresses. (served Jan. 3, 2011-present)", "Committee assignments:", "H. Small Business (112 th -113 th Congresses) H. Transportation and Infrastructure (112 th Congress) H. Small Business (113 th Congress) H. Appropriations (114 th -116 th Congresses) H. Science, Space and Technology (116 th Congress)", "HERSETH SANDLIN, STEPHANIE. Democrat; South Dakota, At-Large. Elected to the 108 th Congress in a June 1, 2004, special election, to fill vacancy caused by resignation of William Janklow; reelected to the 109 th -111 th Congresses. (served June 3, 2004-Jan. 3, 2011)", "Committee assignments:", "H. Agriculture (108 th -111 th Congresses) H. Resources (108 th -109 th Congresses) H. Natural Resources (111 th Congress) H. Veterans' Affairs (108 th -111 th Congresses) H. Select Energy, Independence, and Global Warming (110 th -111 th Congresses)", "HICKS, LOUISE DAY. Democrat; Massachusetts, 9 th District. Elected to the 92 nd Congress. (served Jan. 3, 1971-Jan. 3, 1973)", "Committee assignments:", "H. Education and Labor (92 nd Congress) H. Veterans' Affairs (92 nd Congress)", "HILL, KATIE. Democrat; California, 25 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Oversight and Reform (116 th Congress) H. Science, Space and Technology (116 th Congress) H. Armed Services (116 th Congress)", "HIRONO, MAZIE. Democrat; Hawaii, 2 nd District. Elected to the 110 th -112 th Congresses; elected to the Senate in 2012 and reelected in 2018. (served in the House Jan. 3, 2007-Jan. 3, 2013; served in the Senate Jan. 3, 2013-present)", "Committee assignments:", "H. Education and Labor/Education and the Workforce (110 th -112 th Congresses) H. Transportation and Infrastructure (110 th -112 th Congresses) H. Small Business (110 th Congress) H. Ethics (112 th Congress, partial) S. Armed Services (113 th -116 th Congresses) S. Environment and Public Works (113 th Congress) S. Judiciary (113 th , 115 th -116 th Congresses) S. Veterans' Affairs (113 th -116 th Congresses) S. Select Intelligence (114 th Congress) S. Small Business and Entrepreneurship (114 th -116 th Congresses) S. Energy and Natural Resources (115 th -116 th Congresses) Jt. Select Budget and Appropriations Process Reform (115 th Congress)", "HOCHUL, KATHY. Democrat; New York, 26 th District. Elected to the 112 th Congress in a May 24, 2011, special election to fill vacancy caused by resignation of Christopher Lee. (served June 1, 2011-Jan. 3, 2013)", "Committee assignments:", "H. Armed Services (112 th Congress) H. Homeland Security (112 th Congress)", "HOLT, MARJORIE S. Republican; Maryland, 4 th District. Elected to the 93 rd -99 th Congresses. (served Jan. 3, 1973-Jan. 3, 1987)", "Committee assignments:", "H. Armed Services (93 rd -99 th Congresses) H. Administration (94 th Congress) H. Budget (95 th -96 th Congresses) Jt. Economic (98 th Congress) H. District of Columbia (98 th Congress)", "HOLTZMAN, ELIZABETH. Democrat; New York, 16 th District. Elected to the 93 rd -96 th Congresses. (served Jan. 3, 1973-Jan. 3, 1981)", "Committee assignments:", "H. Judiciary (93 rd -96 th Congresses) H. Budget (94 th -96 th Congresses) H. Select Committee on Aging (96 th Congress)", "HONEYMAN, NAN WOOD. Democrat; Oregon, 3 rd District. Elected to the 75 th Congress. (served Jan. 3, 1937-Jan. 3, 1939)", "Committee assignments:", "H. Indian Affairs (75 th Congress) H. Irrigation and Reclamation (75 th Congress) H. Rivers and Harbors (75 th Congress)", "HOOLEY, DARLENE. Democrat; Oregon, 5 th District. Elected to the 105 th -110 th Congresses. (served Jan. 3, 1997-Jan. 3, 2009)", "Committee assignments:", "H. Banking and Financial Services/Financial Services (105 th -109 th Congresses) H. Science/Science and Technology (105 th , 109 th , 110 th Congresses) H. Budget (106 th -108 th Congresses; 110 th Congress) H. Veterans' Affairs (108 th -109 th Congresses) H. Energy and Commerce (110 th Congress)", "HORN, JOAN KELLY. Democrat; Missouri, 2 nd District. Elected to the 102 nd Congress. (served Jan. 3, 1991-Jan. 3, 1993)", "Committee assignments:", "H. Public Works and Transportation (102 nd Congress) H. Science, Space, and Technology (102 nd Congress) H. Select Children, Youth, and Family (102 nd Congress)", "HORN, KENDRA. Democrat; Oklahoma, 5 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Science, Space and Technology (116 th Congress) H. Armed Services (116 th Congress)", "HOULAHAN, CHRISTINA . Democrat; Pennsylvania, 6 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Small Business (116 th Congress) H. Foreign Affairs (116 th Congress) H. Armed Services (116 th Congress)", "HUCK, WINNIFRED SPRAGUE MAS ON. Republican; Illinois, At Large. Elected to the 67 th Congress in a Nov. 7, 1922, special election to fill vacancy caused by death of her father, William E. Mason. (served Nov. 20, 1922-March 3, 1923)", "Committee assignments:", "H. Expenditures in the Department of Commerce (67 th Congress) H. Reform in the Civil Service (67 th Congress) H. Woman Suffrage (67 th Congress)", "HUMPHREY, MURIEL BUCK. Democrat; Minnesota, Senator. Appointed to the Senate Jan. 25, 1978, to fill vacancy caused by death of husband, Hubert H. Humphrey. (served Feb. 6, 1978-Jan. 3, 1979)", "Committee assignments:", "S. Foreign Relations (95 th Congress) S. Governmental Affairs (95 th Congress)", "HUTCHISON, KAY BAILEY. Republican; Texas, Senator. Elected on June 5, 1993, to fill vacancy caused by resignation of Lloyd Bentsen. Subsequently elected to a full term in 1994, and reelected in 2000 and 2006. (served June 14, 1993-Jan. 3, 2013)", "Committee assignments:", "S. Armed Service (103 rd -104 th Congresses) S. Commerce, Science, and Transportation (103 rd -112 th Congresses; ranking member, 111 th -112 th Congresses) S. Small Business (103 rd -104 th Congresses) S. Select Intelligence (104 th Congress) S. Appropriations (105 th -112 th Congresses) S. Rules and Administration (105 th -112 th Congresses) S. Environment and Public Works (106 th Congress) S. Veterans' Affairs (107 th -110 th Congresses) S. Banking, Housing, and Urban Affairs (111 th Congress)", "HYDE-SMITH, CINDY. Republican; Mississippi, Senator. Appointed to the Senate March 21, 2018, to fill vacancy caused by resignation of Thad Cochran. Elected in Nov. 2018. (served April 9, 2018-present)", "Committee assignments:", "S. Agriculture, Nutrition and Forestry (115 th -116 th Congresses) S. Appropriations (115 th -116 th Congresses) S. Rules and Administration (115 th -116 th Congresses) S. Energy and Natural Resources (116 th Congress)", "JACKSON LEE, SHEILA. Democrat; Texas, 18 th District. Elected to the 104 th -116 th Congresses. (served Jan. 3, 1995-present)", "Committee assignments:", "H. Judiciary (104 th -116 th Congresses) H. Science (104 th -109 th Congresses) H. Homeland Security (108 th -116 th Congresses) H. Foreign Affairs (110 th -111 th Congresses) H. Budget (116 th Congress)", "JAYAPAL, PRAMILA. Democrat; Washington, 7 th District. Elected to the 115 th -116 th Congresses. (served Jan. 3, 2017-present)", "Committee assignments:", "H. Budget (115 th -116 th Congresses) H. Judiciary (115 th -116 th Congresses) H. Education and Labor (116 th Congress)", "JENCKES, VIRGINIA ELLIS. Democrat; Indiana, 6 th District. Elected to the 73 rd -75 th Congresses. (served March 9, 1933-Jan. 3, 1939)", "Committee assignments:", "H. Civil Service (73 rd -75 th Congresses) H. District of Columbia (73 rd -75 th Congresses) H. Mines and Mining (73 rd -74 th Congresses)", "JENKINS, LYNN. Republican; Kansas, 2 nd District. Elected to the 111 th -115 th Congresses. (served Jan. 3, 2009-Jan. 3, 2019) ", "Committee assignments:", "H. Financial Services (111 th Congress) H. Ways and Means (112 th -115 th Congresses)", "JOHNSON, EDDIE BERNICE. Democrat; Texas, 30 th District. Elected to the 103 rd -116 th Congresses (served Jan. 3, 1993-present). Chair of the Congressional Black Caucus, 107 th Congress.", "Committee assignments:", "H. Public Works and Transportation (103 rd Congress) H. Science, Space, and Technology/Science/Science and Technology (103 rd -116 th Congresses; ranking member, 112 th -115 th Congresses; chair, 116 th Congress) H. Transportation and Infrastructure (104 th -116 th Congresses)", "JOHNSON, NANCY L. Republican; Connecticut, 6 th District (98 th -107 th Congresses) and 5 th District (108 th -109 th Congresses). Elected to the 98 th -109 th Congresses. (served Jan. 3, 1983-Jan. 3, 2007) ", "Committee assignments:", "H. Public Works and Transportation (98 th -100 th Congresses) H. Veterans' Affairs (98 th -99 th Congresses) H. Select Children, Youth, and Families (98 th -100 th Congresses) H. Budget (100 th Congress) H. Ways and Means (101 st -109 th Congresses) H. Standards of Official Conduct (102 nd -104 th Congresses; chair, 104 th Congress) Jt. Taxation (109 th Congress)", "JONES, BRENDA. Democrat; Michigan, 13 th District. Elected to the 115 th Congress in a Nov. 6, 2018 special election to fill vacancy caused by resignation of John Conyers. (served Nov. 29, 2018-Jan. 3, 2019)", "No committee assignments. ", "JONES, STEPHANIE TUBBS. Democrat; Ohio, 11 th District. Elected to the 106 th -110 th Congresses. (served Jan. 3, 1999, until her death on August 20, 2008)", "Committee assignments:", "H. Banking and Financial Services (106 th Congress) H. Financial Services (107 th Congress) H. Small Business (106 th -107 th Congresses) H. Standards of Official Conduct (107 th -110 th Congresses; chair, 110 th Congress) H. Ways and Means (108 th -110 th Congresses)", "JORDAN, BARBARA C. Democrat; Texas, 18 th District. Elected to the 93 rd -95 th Congresses. (served Jan. 3, 1973-Jan. 3, 1979)", "Committee assignments:", "H. Judiciary (93 rd -95 th Congresses) H. Government Operations (94 th -95 th Congresses)", "KAHN, FLORENCE PRAG. Republican; California, 4 th District. Elected to the 69 th Congress in a Feb. 17, 1925, special election to fill vacancy caused by death of husband, Julius Kahn; reelected to the 70 th -74 th Congresses. (served Dec. 7, 1925-Jan. 3, 1937)", "Committee assignments:", "H. Census (69 th Congress) H. Coinage, Weights, and Measures (69 th Congress) H. Education (69 th Congress) H. Expenditures in the War Department (69 th Congress) H. War Claims (70 th Congress) H. Military Affairs (71 st -72 nd Congresses) H. Appropriations (73 rd -74 th Congresses)", "KAPTUR, MARCY. Democrat; Ohio, 9 th District. Elected to the 98 th -116 th Congresses. (served Jan. 3, 1983-present)", "Committee assignments:", "H. Banking, Finance, and Urban Affairs (98 th -101 st Congresses) H. Veterans' Affairs (98 th -100 th Congresses) H. Budget (101 st , 112 th Congresses) H. Appropriations (101 st -116 th Congresses)", "KASSEBAUM, NANCY LANDON. Republican; Kansas, Senator. Elected to the Senate in 1978. Reelected to the Senate in 1984 and 1990. (served Dec. 23, 1978-Jan. 3, 1997) ", "Committee assignments:", "S. Banking, Housing, and Urban Affairs (96 th , 101 st , 102 nd Congresses) S. Special Committee on Aging (96 th -98 th Congresses; 101 st -102 nd Congresses) S. Budget (96 th -100 th Congresses) S. Commerce, Science, and Transportation (96 th -100 th Congresses) S. Select Committee on Ethics (99 th -100 th Congresses) S. Foreign Relations (97 th -104 th Congresses) S. Labor and Human Resources (101 st -104 th Congresses; ranking member, 103 rd Congress; chair, 104 th Congress) S. Indian Affairs (102 nd -104 th Congresses) Jt. Committee on the Organization of Congress (103 rd Congress)", "KEE, MAUDE ELIZABETH. Democrat; West Virginia, 5 th District. Elected to the 82 nd Congress in a July 16, 1951, special election to fill vacancy caused by death of husband, John Kee; reelected to the 83 rd -88 th Congresses. (served July 26, 1951-Jan. 3, 1965) ", "Committee assignments:", "H. Veterans' Affairs (82 nd -88 th Congresses) H. Government Operations (85 th -87 th Congresses) H. Interior and Insular Affairs (88 th Congress)", "KELLY, EDNA FLANNERY. Democrat; New York, 12 th District. Elected to the 81 st Congress Nov. 8, 1949, to fill vacancy caused by death of Andrew L. Somers; reelected to the 82 nd -90 th Congresses. (served Jan. 3, 1950-Jan. 3, 1969) ", "Committee assignments:", "H. Foreign Affairs (81 st -90 th Congresses) H. Standards of Official Conduct (90 th Congress)", "KELLY, ROBIN. Democrat; Illinois, 2 nd District. Elected to the 113 th Congress in a April 9, 2013, special election to vacancy caused by resignation of Jesse Jackson Jr.; reelected to the 114 th -116 th Congresses. (served April 11, 2013-present) ", "Committee assignments:", "H. Oversight and Government Reform/Oversight and Reform (113 th -116 th Congresses) H. Science, Space, and Technology (113 th Congress) H. Foreign Affairs (114 th -115 th Congresses) H. Energy and Commerce (116 th Congress)", "KELLY, SUE. Republican; New York, 19 th District. Elected to the 104 th -109 th Congresses. (served Jan. 3, 1995-Jan. 3, 2007)", "Committee assignments:", "H. Banking and Financial Services/Financial Services (104 th -109 th Congresses) H. Small Business (104 th -109 th Congresses) H. Transportation and Infrastructure (104 th -109 th Congresses)", "KENNELLY, BARBARA BAILEY. Democrat; Connecticut, 1 st District. Elected to the 97 th Congress in a Jan. 12, 1982, special election to fill vacancy caused by death of William R. Cotter; reelected to the 98 th -105 th Congresses. (served Jan. 12, 1982-Jan. 3, 1999) ", "Committee assignments:", "H. Government Operations (97 th Congress) H. Public Works and Transportation (97 th Congress) H. Select Intelligence (100 th -102 nd Congresses) H. Budget (103 rd Congress) H. Administration (103 rd Congress) H. Ways and Means (98 th -105 th Congresses)", "KEYS, MARTHA ELIZABETH. Democrat; Kansas, 2 nd District. Elected to the 94 th -95 th Congresses. (served Jan. 3, 1975-Jan. 3, 1979)", "Committee assignment:", "H. Ways and Means (94 th -95 th Congresses)", "KILPATRICK, CAROLYN CHEEKS. Democrat; Michigan, 15 th District (105 th -107 th Congresses) and 13 th District (108 th -111 th Congresses). Elected to the 105 th -111 th Congresses. (served Jan. 3, 1997-Jan. 3, 2011). Chair of the Congressional Black Caucus, 110 th Congress.", "Committee assignments:", "H. Banking and Financial Services (105 th Congress) H. House Oversight (105 th Congress) Jt. Library (105 th Congress) H. Appropriations (106 th -111 th Congresses)", "KILROY, MARY JO. Democrat; Ohio, 15 th District. Elected to the 111 th Congress. (served Jan. 3, 2009-Jan. 3, 2011)", "Committee assignments:", "H. Financial Services (111 th Congress) H. Homeland Security (111 th Congress)", "KIRKPATRICK, ANN. Democrat; Arizona, 1 st District (111 th , 113 th , and 114 th Congresses) and 2 nd District (116 th Congress-present). Elected to the 111 th , 113 th , 114 th , and 116 th Congresses. (served Jan. 3, 2009-Jan. 3, 2011; Jan. 3, 2013-Jan. 3, 2017; Jan. 3, 2019-present)", "Committee assignments:", "H. Homeland Security (111 th Congress) H. Small Business (111 th Congress) H. Veterans Affairs (111 th , 113 th Congresses) H. Transportation and Infrastructure (113 th -114 th Congresses) H. Agriculture (114 th , 116 th Congresses) H. Appropriations (116 th Congress)", "KLOBUCHAR, AMY. Democrat; Minnesota, Senator. Elected to Senate in 2006 and reelected in 2012 and 2018. (served Jan. 3, 2007-present)", "Committee assignments:", "S. Agriculture, Nutrition and Forestry (110 th -116 th Congresses) S. Commerce, Science, and Transportation (110 th -116 th Congresses) S. Environment and Public Works (110 th -111 th Congresses) Jt. Economic (110 th -116 th Congresses; Vice Chair, 113 th Congress) S. Judiciary (111 th -116 th Congresses) S. Rules (114 th -116 th Congresses; ranking member, 115 th -116 th Congresses) Jt. Printing (116 th Congress) Jt. Library (116 th Congress)", "KNUTSON, COYA GJESDAL. Democrat; Minnesota, 9 th District. Elected to the 84 th -85 th Congresses. (served Jan. 3, 1955-Jan. 3, 1959)", "Committee assignment:", "H. Agriculture (84 th -85 th Congresses)", "KOSMAS, SUZANNE. Democrat; Florida, 24 th District. Elected to the 111 th Congress. (served Jan. 6, 2009-Jan. 3, 2011)", "Committee assignments:", "H. Finance Services (111 th Congress) H. Science and Technology (111 th Congress)", "KUSTER, ANN McLANE. Democrat; New Hampshire, 2 nd District. Elected to the 113 th -116 th Congresses. (served Jan. 3, 2013-present)", "Committee assignments:", "H. Agriculture (113 th -115 th Congresses) H. Small Business (113 th Congress) H. Veterans' Affairs (113 th -115 th Congresses) H. Energy and Commerce (116 th Congress)", "LANDRIEU, MARY. Democrat; Louisiana, Senator. Elected to the Senate in 1996; reelected in 2002 and 2008. (served Jan. 3, 1997-Jan. 3, 2015)", "Committee assignments:", "S. Agriculture, Nutrition, and Forestry (105 th Congress) S. Energy and Natural Resources (105 th -113 th Congresses; chair, 113 th Congress, 2 nd session) S. Small Business and Entrepreneurship (105 th -113 th Congresses; chair, 111 th Congress-113 th Congress, 1 st session) S. Armed Services (106 th -107 th Congresses) S. Appropriations (107 th -113 th Congresses) S. Homeland Security and Governmental Affairs (110 th -113 th Congresses)", "LANGLEY, KATHERINE GUDGER. Republican; Kentucky, 10 th District. Elected to the 70 th -71 st Congresses. (served Dec. 5, 1927-March 3, 1931)", "Committee assignments:", "H. Claims (70 th -71 st Congresses) H. Immigration and Naturalization (70 th -71 st Congresses) H. Invalid Pensions (70 th -71 st Congresses) H. Education (71 st Congress)", "LAWRENCE, BRENDA L. Democrat; Michigan, 14 th District. Elected to the 114 th -116 th Congress. (served Jan. 3, 2015-present)", "Committee assignments:", "H. Oversight and Government Reform/Oversight and Reform (114 th -116 th Congresses) H. Small Business (114 th Congress) H. Transportation and Infrastructure (115 th Congress) H. Appropriations (116 th Congress)", "LEE, BARBARA. Democrat; California, 9 th District (105 th -112 th Congresses); 13 th District (113 th -116 th Congresses). Elected to the 105 th Congress in an April 7, 1998, special election to fill vacancy caused by resignation of Ronald Dellums; reelected to the 106 th -116 th Congresses. (served April 20, 1998-present) Chair of the Congressional Black Caucus, 111 th Congress.", "Committee assignments:", "H. Banking and Financial Services/Financial Services (105 th -109 th Congresses) H. Science (105 th Congress) H. International Relations/Foreign Affairs (107 th -111 th Congresses) H. Appropriations (110 th -116 th Congresses) H. Budget (113 th -116 th Congresses)", "LEE, SUSIE. Democrat; Nevada, 3 rd District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignment:", "H. Veterans' Affairs (116 th Congress) H. Education and Labor (116 th Congress)", "LESKO, DEBBIE. Republican; Arizona, 8 th District. Elected to the 115 th Congress in an April 24, 2018, special election to fill vacancy caused by resignation of Trent Franks; reelected to the 116 th Congress. (served May 7, 2018-present)", "Committee assignments:", "H. Homeland Security (115 th -116 th Congresses) H. Judiciary (116 th Congress) H. Rules (116 th Congress)", "LINCOLN, BLANCHE LAMBERT. Democrat; Arkansas, 1 st District. Elected to the 103 rd -104 th Congresses (served in House Jan. 3, 1993-Jan. 3, 1997). Subsequently elected to the Senate in 1998 and reelected in 2004. (served in Senate Jan. 3, 1999-Jan. 3, 2011)", "Committee assignments:", "H. Agriculture (103 rd Congress) H. Energy and Commerce (103 rd Congress) H. Merchant Marine and Fisheries (103 rd Congress) H. Commerce (104 th Congress) S. Agriculture, Nutrition, and Forestry (106 th -111 th Congresses; chair, 111 th Congress) S. Energy and Natural Resources (106 th , 111 th Congresses) S. Special Committee on Aging (106 th -111 th Congresses) S. Finance (107 th -111 th Congresses) S. Select Committee on Ethics (107 th -108 th Congresses)", "LLOYD, MARILYN. Democrat; Tennessee, 3 rd District. Elected to the 94 th -103 rd Congresses. (served Jan. 3, 1975-Jan. 3, 1995)", "Committee assignments:", "H. Science, Space, and Technology (94 th -103 rd Congresses) H. Public Works and Transportation (94 th -99 th Congresses) H. Select Committee on Aging (96 th -102 nd Congresses) H. Armed Services (98 th -103 rd Congresses)", "LOFGREN, ZOE. Democrat; California, 16 th District (104 th -112 th Congresses); 19 th District (113 th Congress-present). Elected to the 104 th -116 th Congresses. (served Jan. 3, 1995-present)", "Committee assignments:", "H. Judiciary (104 th -116 th Congresses) H. Science/Science, Space and Technology (104 th -108 th Congresses; 113 th -116 th Congresses) H. Standards of Official Conduct (105 th -107 th Congresses; chair, 111 th Congress) H. Homeland Security (108 th -111 th Congresses) H. Administration (109 th -116 th Congresses; chair, 116 th Congress) Jt. Library (109 th -110 th Congresses; 113 th -116 th Congresses) H. Select Modernization of Congress (116 th Congress) Jt. Printing (chair, 116 th Congress)", "LONG, CATHERINE S. Democrat; Louisiana, 8 th District. Elected to the 99 th Congress in a March 30, 1985, special election to fill vacancy caused by death of husband, Gillis Long. (served April 4, 1985-Jan. 3, 1987)", "Committee assignments:", "H. Public Works (99 th Congress) H. Small Business (99 th Congress)", "LONG, JILL. Democrat; Indiana, 4 th District. Elected to the 101 st Congress in a March 28, 1989, special election to fill vacancy caused by resignation of Dan Coats; reelected to the 102 nd -103 rd Congresses. (served April 5, 1989-Jan. 3, 1995)", "Committee assignments:", "H. Agriculture (101 st -103 rd Congresses) H. Veterans' Affairs (101 st -103 rd Congresses) H. Select Committee on Hunger (101 st -102 nd Congresses)", "LONG, ROSE McCONNELL. Democrat; Louisiana, Senator. Appointed to the Senate Jan. 31, 1936, to fill vacancy caused by death of her husband, Huey Pierce Long; subsequently elected April 21, 1936, in a special election to fill the remaining months of his term. (served Feb. 10, 1936-Jan. 3, 1937)", "Committee assignments:", "S. Claims (74 th Congress) S. Immigration (74 th Congress) S. Interoceanic Canals (74 th Congress) S. Post Office and Post Roads (74 th Congress) S. Public Lands and Surveys (74 th Congress)", "LOVE, MIA B. Republican; Utah, 4 th District. Elected to the 114 th -115 th Congress. (served Jan. 3, 2015-Jan. 3, 2019)", "Committee assignment:", "H. Financial Services (114 th -115 th Congresses)", "LOWEY, NITA M. Democrat; New York, 20 th District (101 st -102 nd Congresses); 18 th District (103 rd -112 th Congresses); 17 th District (113 th Congress-present). Elected to the 101 st -116 th Congresses. (served Jan. 3, 1989-present)", "Committee assignments:", "H. Education and Labor (101 st -102 nd Congresses) H. Merchant Marine and Fisheries (101 st -102 nd Congresses) H. Select Narcotics Abuse and Control (101 st -102 nd Congresses) H. Appropriations (103 rd -116 th Congresses; ranking member, 113 th -115 th Congresses; chair, 116 th Congress) H. Homeland Security (108 th -110 th Congresses) Jt. Select Budget and Appropriations Process Reform (115 th Congress; co-chair)", "LUCE, CLARE BOOTHE. Republican; Connecticut, 4 th District. Elected to the 78 th -79 th Congresses. (served Jan. 3, 1943-Jan. 3, 1947)", "Committee assignment:", "H. Military Affairs (78 th -79 th Congresses)", "LUJAN GRISHAM, MICHELLE. Democrat; New Mexico, 1 st District. Elected to the 113 th -115 th Congresses. Chair, Congressional Hispanic Caucus, 115 th Congress. (served Jan. 3, 2013-until her resignation Dec. 31, 2018)", "Committee assignments:", "H. Agriculture (113 th -115 th Congresses) H. Budget (113 th -115 th Congresses) H. Oversight and Government Reform (113 th -114 th Congresses)", "LUMMIS, CYNTHIA. Republican; Wyoming, At Large. Elected to the 111 th -114 th Congresses. (served Jan. 3, 2009-Jan. 3, 2017)", "Committee assignments:", "H. Agriculture (111 th Congress) H. Budget (111 th Congress) H. Natural Resources (111 th Congress; 113 th -114 th Congresses) H. Appropriations (112 th Congress) H. Oversight and Government Reform (113 th -114 th Congresses) H. Science, Space and Technology (113 th Congress)", "LURIA, ELAINE. Democrat; Virginia, 2 nd District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignment:", "H. Veterans' Affairs (116 th Congress) H. Armed Services (116 th Congress)", "LUSK, GEORGIA LEE. Democrat; New Mexico, At Large. Elected to the 80 th Congress. (served Jan. 3, 1947-Jan. 3, 1949)", "Committee assignment:", "H. Veterans' Affairs (80 th Congress)", "MAJETTE, DENISE L. Democrat; Georgia, 4 th District. Elected to the 108 th Congress. (served Jan. 3, 2003-Jan. 3, 2005)", "Committee assignments:", "H. Budget (108 th Congress) H. Education and the Workforce (108 th Congress) H. Small Business (108 th Congress)", "MALONEY, CAROLYN. Democrat; New York, 14 th District (103 rd -112 th Congresses); 12 th District (113 th Congress-present). Elected to the 103 rd -116 th Congresses. (served Jan. 3, 1993-present)", "Committee assignments:", "H. Government Operations/Government Reform/Oversight and Government Reform/Oversight and Reform (103 th -116 th Congresses) H. Banking and Financial Services/Financial Services (103 rd -116 th Congresses) Jt. Economic (105 th -116 th Congresses; vice chair, 110 th Congress and 116 th Congresses; chair, 111 th Congress; ranking member, 114 th Congress)", "MANKIN, HELEN DOUGLAS. Democrat; Georgia, 5 th District. Elected to the 79 th Congress in a Feb. 12, 1946, special election to fill vacancy caused by resignation of Robert Ramspeck. (served Feb. 25, 1946-Jan. 3, 1947)", "Committee assignments:", "H. Civil Service (79 th Congress) H. Claims (79 th Congress) H. Elections (79 th Congress) H. Revision of Laws (79 th Congress)", "MARGOLIES-MEZVINSKY, MARJORIE. Democrat; Pennsylvania, 13 th District. Elected to the 103 rd Congress. (served Jan. 3, 1993-Jan. 3, 1995)", "Committee assignments:", "H. Energy and Commerce (103 rd Congress) H. Government Operations (103 rd Congress) H. Small Business (103 rd Congress)", "MARKEY, BETSY. Democrat; Colorado, 4 th District. Elected to the 111 th Congress. (served Jan. 3, 2009-Jan. 3, 2011)", "Committee assignments:", "H. Agriculture (111 th Congress) H. Transportation and Infrastructure (111 th Congress)", "MARTIN, LYNN M. Republican; Illinois, 16 th District. Elected to the 97 th -101 st Congresses. (served Jan. 3, 1981-Jan. 3, 1991) ", "Committee assignments:", "H. Administration (97 th -98 th Congresses) H. Budget (97 th -99 th Congresses) H. Armed Services (99 th -100 th Congresses) Jt. Printing (98 th Congress) H. Rules (101 st Congress) H. Bipartisan Task Force on Ethics (vice chair, 101 st Congress)", "MATSUI, DORIS O. Democrat; California, 5 th District (109 th -112 th Congresses); 6 th District (113 th Congress-present). Elected to the 109 th Congress in a March 8, 2005, special election to fill vacancy caused by death of husband, Robert Matsui; reelected to the 110 th -116 th Congresses. (served March 10, 2005-present)", "Committee assignments:", "H. Rules (109 th -111 th , 116 th Congresses) H. Science (109 th Congress) H. Transportation and Infrastructure (110 th Congress) H. Energy and Commerce (110 th -116 th Congresses)", "MAY, CATHERINE DEAN. Republican; Washington, 4 th District. Elected to the 86 th -91 st Congresses. (served Jan. 3, 1959-Jan. 3, 1971)", "Committee assignments:", "H. Agriculture (86 th -91 st Congresses) H. District of Columbia (91 st Congress, 1 st session) H. Select Committee on the House Beauty Shop (90 th -91 st Congresses) Jt. Atomic Energy (91 st Congress)", "MCBATH, LUCY. Democrat; Georgia, 6 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Judiciary (116 th Congress) H. Education and Labor (116 th Congress)", "MCCARTHY, CAROLYN. Democrat; New York, 4 th District. Elected to the 105 th -113 th Congresses. (served Jan. 7, 1997-Jan. 3, 2015)", "Committee assignments:", "H. Education and the Workforce/Education and Labor (105 th -113 th Congresses) H. Small Business (105 th -106 th Congresses) H. Financial Services (108 th -113 th Congresses)", "MCCARTHY, KAREN. Democrat; Missouri, 5 th District. Elected to the 104 th -108 th Congresses. (served Jan. 3, 1995-Jan. 3, 2005)", "Committee assignments:", "H. Science (104 th Congress) H. Small Business (104 th Congress) H. Transportation and Infrastructure (104 th Congress) H. Commerce/Energy and Commerce (105 th -108 th Congresses) H. Homeland Security (108 th Congress)", "MCCARTHY, KATHYRN O'LOUGHLIN. Democrat; Kansas, 6 th District. Elected to the 73 rd Congress. (served March 9, 1933-Jan. 3, 1935)", "Committee assignments:", "H. Education (73 rd Congress) H. Public Buildings and Grounds (73 rd Congress) H. World War Veterans' Legislation (73 rd Congress)", "MCCASKILL, CLAIRE. Democrat; Missouri, Senator. Elected to the Senate in 2006; reelected in 2012. (served Jan. 3, 2007-Jan. 3, 2019)", "Committee assignments:", "S. Armed Services (110 th -115 th Congresses) S. Homeland Security and Governmental Affairs (110 th -115 th Congresses; ranking member, 115 th Congress) S. Indian Affairs (110 th Congress) S. Special Aging (110 th -114 th Congresses; ranking member, 114 th Congress) S. Commerce, Science, and Transportation (111 th -114 th Congresses) S. Finance (115 th Congress)", "MCCOLLUM, BETTY. Democrat; Minnesota, 4 th District. Elected to the 107 th -116 th Congresses. (served Jan. 3, 2001-present)", "Committee assignments:", "H. Education and the Workforce (107 th -109 th Congresses) H. Resources (107 th -108 th Congresses) H. International Relations (108 th -109 th Congresses) H. Appropriations (110 th -116 th Congresses) H. Oversight and Government Reform (110 th Congress) H. Budget (111 th -112 th Congresses)", "MCCORMICK, RUTH HANNA. Republican; Illinois, At Large. Elected to the 71 st Congress. (served April 15, 1929-March 3, 1931)", "Committee assignment:", "H. Naval Affairs (71 st Congress)", "MCKINNEY, CYNTHIA. Democrat; Georgia, 11 th District (103 rd -104 th Congresses) and 4 th District (105 th -107 th Congress and 109 th Congress). Elected to the 103 rd -107 th Congresses and to the 109 th Congress. (served Jan. 3, 1993-Jan. 3, 2003; Jan. 3, 2005-Jan. 3, 2007)", "Committee assignments:", "H. Agriculture (103 rd -104 th Congresses) H. Banking and Finance (104 th -105 th Congresses) H. Foreign Affairs/International Relations (103 rd -107 th Congresses) H. National Security (105 th Congress) H. Armed Services (106 th -107 th Congresses; 109 th Congress) H. Budget (109 th Congress)", "MCMILLAN, CLARA GOODING. Democrat; South Carolina, 1 st District. Elected to the 76 th Congress in a Nov. 7, 1939, special election to fill vacancy caused by death of husband, Thomas S. McMillan. (served Jan. 3, 1940-Jan. 3, 1941)", "Committee assignments:", "H. Election of President, Vice President, and Representatives in Congress (76 th Congress) H. Insular Affairs (76 th Congress) H. Patents (76 th Congress) H. Public Buildings and Grounds (76 th Congress)", "MCMORRIS RO D GERS, CATHY. Republican; Washington, 5 th District. Elected to the 109 th -116 th Congresses. (served Jan. 3, 2005-present) ", "Committee assignments:", "H. Armed Services (109 th -111 th Congresses) H. Education and the Workforce/Education and Labor (109 th -111 th Congresses) H. Resources/Natural Resources (109 th -111 th Congresses) H. Energy and Commerce (112 th -116 th Congresses)", "MCSALLY, MARTHA. Republican; Arizona, 2 nd District. Elected to the 114 th -115 th Congresses. (served in House Jan. 3, 2015-Jan. 3, 2019) Appointed to the Senate Jan. 3, 2019, to fill vacancy caused by death of John McCain. (served in Senate Jan. 3, 2019-present)", "Committee assignments:", "H. Armed Services (114 th -115 th Congresses) H. Homeland Security (114 th -115 th Congresses) S. Armed Services (116 th Congress) S. Banking (116 th Congress) S. Energy and Natural Resources (116 th Congress) S. Special Committee on Aging (116 th Congress) S. Indian Affairs (116 th Congress)", "MEEK, CARRIE. Democrat; Florida, 17 th District. Elected to the 103 rd -107 th Congresses. (served Jan. 3, 1993-Jan. 3, 2003)", "Committee assignments:", "H. Appropriations (103 rd Congress; 105 th -107 th Congresses) H. Budget (104 th Congress) H. Government Reform and Oversight (104 th Congress)", "MENG, GRACE. Democrat; New York, 6 th District. Elected to the 113 th -116 th Congresses. (served Jan. 3, 2013-present)", "Committee assignments:", "H. Foreign Affairs (113 th -114 th Congresses) H. Small Business (113 th -114 th Congresses) H. Appropriations (115 th -116 th Congresses) H. Ethics (116 th Congress)", "MEYERS, JAN. Republican; Kansas, 3 rd District. Elected to the 99 th -104 th Congresses. (served Jan. 3, 1985-Jan. 3, 1997)", "Committee assignments:", "H. Science and Technology (99 th Congress) H. Select Aging (99 th -102 nd Congresses) H. Foreign Affairs/ International Relations (99 th -104 th Congresses) H. Economic and Educational Opportunities (104 th Congress) H. Small Business (99 th -104 th Congresses; ranking member, 103 rd Congress; chair, 104 th Congress)", "MEYNER, HELEN STEVENSON. Democrat; New Jersey, 13 th District. Elected to the 94 th -95 th Congresses. (served Jan. 3, 1975-Jan. 3, 1979)", "Committee assignments:", "H. District of Columbia (94 th -95 th Congresses) H. Foreign Affairs (94 th Congress) H. International Relations (95 th Congress)", "MIKULSKI, BARBARA ANN. Democrat; Maryland, 3 rd District. Elected to the 95 th -99 th Congresses (served in House Jan. 3, 1977-Jan. 3, 1987). Subsequently elected to the Senate in 1986 and reelected in 1992, 1996, 2004, and 2010. (served in Senate Jan. 6, 1987-Jan. 3, 2017)", "Committee assignments:", "H. Interstate and Foreign Commerce (95 th -97 th Congresses) H. Merchant Marine and Fisheries (95 th -99 th Congresses) H. Energy and Commerce (97 th -99 th Congresses) S. Environmental and Public Works (100 th Congress) S. Appropriations (100 th -114 th Congresses; chair, 113 th Congress; ranking member, 114 th Congress) S. Labor and Human Resources (100 th -105 th Congresses) S. Small Business (100 th -102 nd Congresses) S. Select Ethics (103 rd -104 th Congresses; 109 th Congress) S. Health, Education, Labor, and Pensions (106 th -114 th Congresses) S. Select Intelligence (107 th -114 th Congresses)", "MILLENDER-McDONALD, JUANITA. Democrat; California, 37 th District. Elected to the 104 th Congress in a March 26, 1996, special election to fill vacancy caused by resignation of Walter Tucker; reelected to the 105 th -110 th Congresses. (served April 16, 1996, until her death April 22, 2007)", "Committee assignments:", "H. Small Business (104 th -110 th Congresses) H. Transportation and Infrastructure (104 th -110 th Congresses) H. Administration (108 th -110 th Congresses; ranking member, 109 th Congress; chair, 110 th Congress) Jt. Library (108 th -110 th Congresses) Jt. Printing (109 th -110 th Congresses)", "MILLER, CANDICE S. Republican; Michigan, 10 th District. Elected to the 108 th -114 th Congresses. (served Jan. 3, 2003, until her resignation Dec. 31, 2016)", "Committee assignments:", "H. Armed Services (108 th -110 th Congresses) H. Government Reform (108 th -109 th Congresses) H. House Administration (109 th Congress; chair, 113 th - 114 th Congresses) H. Transportation and Infrastructure (110 th -114 th Congresses) H. Select Energy Independence and Global Warming (110 th -111 th Congresses) H. Homeland Security (110 th -114 th Congresses) Jt. Library (109 th Congress; 113 th -114 th Congresses) Jt. Printing (109 th Congress; 113 th -114 th Congresses)", "MILLER, CAROL. Republican; West Virginia, 3 rd District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Oversight and Reform (116 th Congress) H. Transportation and Infrastructure (116 th Congress) H. Select Committee on the Climate Crisis (116 th Congress)", "MINK, PATSY TAKEMOTO. Democrat; Hawaii, 2 nd District. Elected to the 89 th -94 th Congresses; elected to the 101 st Congress in a Sept. 22, 1990, special election to fill vacancy caused by resignation of Daniel Akaka; reelected to the 102 nd -107 th Congresses; posthumously reelected to the 108 th Congress. (served Jan. 3, 1965-Jan. 3, 1977; Sept. 27, 1990, until her death Sept. 28, 2002) ", "Committee assignments:", "H. Education and Labor (89 th -94 th Congresses; 101 st -103 rd Congresses) H. Interior and Insular Affairs (90 th -94 th Congresses) H. Budget (94 th Congress; 103 rd -105 th Congresses) H. Government Operations (101 st -102 nd Congresses) H. Natural Resources (103 rd Congress) H. Economic and Educational Opportunities/Education and the Workforce (104 th -107 th Congresses) H. Government Reform (106 th -107 th Congresses)", "MOLINARI, SUSAN. Republican; New York, 14 th District (101 st -102 nd Congresses) and 13 th District (103 rd -105 th Congresses). Elected to the 101 st Congress in a March 20, 1990, special election to fill vacancy caused by resignation of father, Guy Molinari; reelected to the 102 nd -105 th Congresses. (served March 27, 1990, until her resignation August 1, 1997) ", "Committee assignments:", "H. Small Business (101 st Congress) H. Public Works and Transportation (101 st -103 rd Congresses) H. Transportation and Infrastructure (104 th -105 th Congresses) H. Education and Labor (102 nd -103 rd Congresses) H. Budget (104 th -105 th Congresses)", "MOORE, GWENDOLYNNE (GWEN). Democrat; Wisconsin, 4 th District. Elected to the 109 th -116 th Congresses. (served Jan. 3, 2005-present)", "Committee assignments:", "H. Financial Services (109 th -115 th Congresses) H. Small Business (109 th -111 th Congresses) H. Budget (110 th -114 th Congresses) H. Ways and Means (116 th Congress)", "MORELLA, CONSTANCE A. Republican; Maryland, 8 th District. Elected to the 100 th -107 th Congresses. (served Jan. 6, 1987-Jan. 3, 2003)", "Committee assignments:", "H. Post Office and Civil Service (100 th -103 rd Congresses) H. Science, Space, and Technology/Science (100 th -107 th Congresses) H. Select Aging (100 th -102 nd Congresses) H. Government Reform and Oversight (104 th -107 th Congresses)", "MOSELEY-BRAUN, CAROL. Democrat; Illinois, Senator. Elected to the Senate in 1992. (served Jan. 3, 1993-Jan. 3, 1999) ", "Committee assignments:", "S. Banking, Housing, and Urban Affairs (103 rd -105 th Congresses) S. Judiciary (103 rd Congress) S. Small Business (103 rd Congress) S. Finance (104 th -105 th Congresses) S. Special Aging (104 th -105 th Congresses)", "MUCARSEL-POWELL, DEBBIE. Democrat; Florida, 26 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Transportation and Infrastructure (116 th Congress) H. Judiciary (116 th Congress)", "MURKOWSKI, LISA. Republican; Alaska, Senator. Appointed to the Senate Dec. 20, 2002, by her father, Frank Murkowski, to the seat he had held before he was elected governor of Alaska. Reelected to a six-year term in 2004, as well as in 2010 and 2016. (served Jan. 3, 2003-present)", "Committee assignments:", "S. Energy and Natural Resources (108 th -116 th Congresses; ranking member, 111 th -113 th Congresses; chair, 114 th -116 th Congresses) S. Environment and Public Works (108 th -109 th Congress) S. Veterans' Affairs (108 th Congress) S. Indian Affairs (108 th -116 th Congresses; ranking member, part of 110 th Congress) S. Foreign Relations (109 th -110 th Congresses) S. Health, Education, Labor, and Pensions (110 th -116 th Congresses) S. Appropriations (111 th -116 th Congresses)", "MURPHY, STEPHANIE. Democrat; Florida, 7 th District. Elected to the 115 th -116 th Congresses. (served Jan. 3, 2017-present)", "Committee assignments:", "H. Armed Services (115 th Congress) H. Small Business (115 th Congress) H. Ways and Means (116 th Congress)", "MURRAY, PATTY. Democrat; Washington, Senator. Elected to the Senate in 1992 and reelected in 1998, 2004, 2010, and 2016. (served Jan. 5, 1993-present) ", "Committee assignments:", "S. Appropriations (103 rd -111 th Congresses; 113 th -116 th Congresses) S. Banking, Housing, and Urban Affairs (103 rd -104 th Congresses) S. Budget (103 rd -116 th Congresses; chair, 113 th Congress) S. Labor and Human Resources (105 th Congress) S. Veterans Affairs (105 th -116 th Congresses; chair, 112 th Congress) S. Select Ethics (105 th Congress) S. Health, Education, Labor, and Pensions (106 th -116 th Congresses; ranking member, 114 th -116 th Congresses) S. Foreign Relations (110 th Congress) S. Indian Affairs (110 th Congress) Jt. Printing (111 th -112 th Congresses) S. Rules and Administration (111 th -113 th Congresses) Jt. Select Committee on Deficit Control (112 th Congress)", "MUSGRAVE, MARILYN. Republican; Colorado, 4 th District. Elected to the 108 th -110 th Congresses. (served Jan. 3, 2003-Jan. 3, 2009)", "Committee assignments:", "H. Agriculture (108 th -110 th Congresses) H. Education and the Workforce (108 th -109 th Congresses) H. Small Business (108 th -110 th Congresses) H. Resources (109 th Congress)", "MYRICK, SUE. Republican; North Carolina, 9 th District. Elected to the 104 th -112 th Congresses. (served Jan. 3, 1995, to Jan. 3, 2013)", "Committee assignments:", "H. Budget (104 th Congress) H. Science (104 th Congress) H. Small Business (104 th Congress) H. Rules (105 th -108 th Congresses) H. Energy and Commerce (109 th -112 th Congresses) H. Intelligence (112 th Congress)", "NAPOLITANO, GRACE FLORES. Democrat; California, 34 th District (106 th -107 th Congresses), 38 th District (108 th -112 th Congresses) and 32 nd District (113 th Congress-present). Elected to the 106 th -116 th Congresses (served Jan. 3, 1999-present). Chair of the Congressional Hispanic Caucus, 109 th Congress.", "Committee assignments:", "H. Resources/Natural Resources (106 th -116 th Congresses) H. Small Business (106 th -108 th Congresses) H. International Relations (107 th -109 th Congresses) H. Transportation and Infrastructure (110 th -116 th Congresses)", "NEGRETE McLEOD, GLORIA. Democrat; California, 35 th District. Elected to the 113 th Congress. (served Jan. 3, 2013-Jan. 3, 2015)", "Committee assignments:", "H. Agriculture (113 th Congress) H. Veterans' Affairs (113 th Congress)", "NEUBERGER, MAURINE BROWN. Democrat; Oregon, Senator. Elected to the Senate in a Nov. 8, 1960, special election to fill vacancy caused by death of husband, Richard L. Neuberger, and for the ensuing six-year term. (served Nov. 9, 1960-Jan. 3, 1967)", "Committee assignments:", "S. Agriculture and Forestry (87 th -88 th Congresses) S. Banking and Currency (87 th -89 th Congresses) S. Special Committee on Aging (87 th Congress) S. Committee on Parliamentary Conference with Canada (87 th Congress, 2 nd session) S. Commerce (89 th Congress)", "NOEM, KRISTI. Republican; South Dakota, At Large. Elected to the 112 th -115 th Congresses. (served Jan. 3, 2011-Jan.3, 2019)", "Committee assignments:", "H. Education and the Workforce (112 th Congress) H. Natural Resources (112 th Congress) H. Agriculture (113 th Congress) H. Ways and Means (114 th -115 th Congresses)", "NOLAN, MAE ELLA. Republican; California, 5 th District. Elected to the 67 th Congress in a Jan. 23, 1923, special election to fill vacancy caused by death of husband, John Nolan, and also to the 68 th Congress. (served Feb. 2, 1923-March 3, 1925). First woman to chair a congressional committee.", "Committee assignments:", "H. Expenditures in the Post Office Department (67 th -68 th Congresses; chair, 68 th Congress) H. Labor (67 th -68 th Congresses)", "NORRELL, CATHERINE DORRIS. Democrat; Arkansas, 6 th District. Elected to the 87 th Congress in an April 18, 1961, special election to fill vacancy caused by death of husband, William Frank Norrell. (served April 25, 1961-Jan. 3, 1963)", "Committee assignment:", "H. Post Office and Civil Service (87 th Congress)", "NORTHUP, ANNE M. Republican; Kentucky 3 rd District. Elected to the 105 th -109 th Congresses. (served Jan. 3, 1997-Jan. 3, 2007)", "Committee assignment:", "H. Appropriations (105 th -109 th Congresses)", "NORTON, ELEANOR HOLMES. Democrat; Delegate from the District of Columbia. Elected to the 102 nd -116 th Congresses. (served Jan. 3, 1991-present)", "Committee assignments:", "H. District of Columbia (102 nd -103 rd Congresses) H. Post Office and Civil Service (102 nd -103 rd Congresses) H. Public Works and Transportation (102 nd -103 rd Congresses) Jt. Committee on the Organization of Congress (103 rd Congress) H. Small Business (104 th Congress) H. Oversight and Government Reform/ Government Reform/Oversight and Reform (104 th -116 th Congresses) H. Transportation and Infrastructure (104 th -116 th Congresses) H. Homeland Security (108 th -111 th Congresses)", "NORTON, MARY TERESA. Democrat; New Jersey, 13 th District. Elected to the 69 th -81 st Congresses. (served Dec. 7, 1925-Jan. 3, 1951)", "Committee assignments:", "H. District of Columbia (69 th -74 th Congresses; chair, 72 nd - 74 th Congresses) H. Labor (69 th -79 th Congresses; chair, 75 th -79 th Congresses) H. World War Veterans Legislation (69 th -72 nd Congresses) H. Memorials (71 st -79 th Congresses) H. Education (78 th -79 th Congresses) H. Enrolled Bills (78 th -79 th Congresses) H. Administration (ranking member, 80 th Congress; chair, 81 st Congress) Jt. Printing (81 st Congress) Jt. Library (80 th Congress)", "OAKAR, MARY ROSE. Democrat; Ohio, 20 th District. Elected to the 95 th -102 nd Congresses. (served Jan. 3, 1977-Jan. 3, 1993) ", "Committee assignments:", "H. Banking, Finance, and Urban Affairs (95 th -102 nd Congresses) H. Select Committee on Aging (96 th -102 nd Congresses) H. Post Office and Civil Service (97 th -102 nd Congresses) H. Administration (98 th -102 nd Congresses)", "OCASIO-CORTEZ, ALEXANDRIA. Democrat; New York, 14 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Oversight and Reform (116 th Congress) H. Financial Services (116 th Congress)", "O'DAY, CAROLINE LOVE GOODWIN. Democrat; New York, At Large. Elected to the 74 th -77 th Congresses. (served Jan. 3, 1935-Jan. 3, 1943)", "Committee assignments:", "H. Election of President, Vice President, and Representatives (74 th -77 th Congresses; chair, 75 th -77 th Congresses) H. Immigration and Naturalization (75 th -77 th Congresses) H. Insular Affairs (75 th -77 th Congresses)", "OLDFIELD, PEARL PEDEN. Democrat; Arkansas, 2 nd District. Elected to the 70 th Congress in a Jan. 9, 1929, special election to fill vacancy caused by death of husband, William A. Oldfield, and also to the 71 st Congress. (served Jan. 11, 1929-March 3, 1931)", "Committee assignments:", "H. Coinage, Weights, and Measures (71 st Congress) H. Expenditures in the Executive Departments (71 st Congress) H. Public Buildings and Grounds (71 st Congress)", "OMAR, ILHAN. Democrat; Minnesota, 5 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignment:", "H. Budget (116 th Congress) H. Foreign Affairs (116 th Congress) H. Education and Labor (116 th Congress)", "OWEN, RUTH BRYAN. Democrat; Florida, 4 th District. Elected to the 71 st -72 nd Congresses. (served April 15, 1929-March 3, 1933)", "Committee assignment:", "H. Foreign Affairs (71 st -72 nd Congresses)", "PATTERSON, ELIZABETH J. Democrat; South Carolina, 4 th District. Elected to the 100 th -102 nd Congresses. (served Jan. 3, 1987-Jan. 3, 1993)", "Committee assignments:", "H. Banking, Finance, and Urban Affairs (100 th -102 nd Congresses) H. Veterans' Affairs (100 th -102 nd Congresses) H. Select Hunger (100 th -102 nd Congresses)", "PELOSI, NANCY. Democrat; California, 5 th District (100 th -102 nd Congresses), 8 th District (103 rd -112 th Congresses); 12 th District (113 th Congress-present). Elected to the 100 th Congress in a June 2, 1987, special election to fill vacancy caused by death of Sala Burton; reelected to the 101 st -116 th Congresses. (served June 9, 1987-present) First female Speaker of the House, 110 th , 111 th , and 116 th Congresses. ", "Committee assignments:", "H. Banking, Finance, and Urban Affairs (100 th -101 st Congresses) H. Government Operations (100 th -101 st Congresses) H. Appropriations (102 nd -107 th Congresses) H. Standards of Official Conduct (102 nd -104 th Congresses) H. Intelligence (104 th -107 th Congresses; Ex Officio, 108 th -113 th , 116 th Congresses)", "PETTIS, SHIRLEY N. Republican; California, 37 th District. Elected to the 94 th Congress in a April 29, 1975, special election to fill vacancy caused by death of husband, Jerry L. Pettis; reelected to the 95 th Congress. (served May 6, 1975-Jan. 3, 1979)", "Committee assignments:", "H. Interior and Insular Affairs (94 th Congress) H. Education and Labor (95 th Congress) H. International Relations (95 th Congress)", "PFOST, GRACIE BOWERS. Democrat; Idaho, 1 st District. Elected to the 83 rd -87 th Congresses. (served Jan. 3, 1953-Jan. 3, 1963)", "Committee assignments:", "H. Interior and Insular Affairs (83 rd -87 th Congresses) H. Post Office and Civil Service (84 th -85 th Congresses) H. Public Works (86 th -87 th Congresses)", "PINGREE, CHELLIE. Democrat; Maine, 1 st District. Elected to the 111 th -116 th Congresses. (served Jan. 3, 2009-present)", "Committee assignments:", "H. Armed Services (111 th -112 th Congresses) H. Rules (111 th -112 th Congresses) H. Agriculture (112 th -116 th Congresses) H. Appropriations (113 th -116 th Congresses)", "PLASKETT, STACEY E. Democrat; Delegate from the U.S. Virgin Islands. Elected to the 114 th -116 th Congresses. (served Jan. 3, 2015-present)", "Committee assignments:", "H. Agriculture (114 th -116 th Congresses) H. Oversight and Government Reform/Oversight and Reform (114 th -116 th Congresses) H. Transportation and Infrastructure (116 th Congress)", "PORTER, KATIE . Democrat; California, 45 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Financial Services (116 th Congress)", "PRATT, ELIZA JANE. Democrat; North Carolina, 8 th District. Elected to the 79 th Congress in a May 25, 1946, special election to fill vacancy caused by death of William O. Burgin. (served June 3, 1946-Jan. 3, 1947)", "Committee assignments:", "H. Flood Control (79 th Congress) H. Pensions (79 th Congress) H. Territories (79 th Congress)", "PRATT, RUTH SEARS BAKER. Republican; New York, 17 th District. Elected to the 71 st -72 nd Congresses. (served April 15, 1929-March 3, 1933)", "Committee assignments:", "H. Banking and Currency (71 st Congress) H. Library (71 st -72 nd Congresses) H. Education (72 nd Congress)", "PRESSLEY, AYANNA. Democrat; Massachusetts, 7 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Oversight and Reform (116 th Congress) H. Financial Services (116 th Congress)", "PRYCE, DEBORAH. Republican; Ohio, 15 th District. Elected to the 103 rd -110 th Congresses. (served Jan. 3, 1993-Jan. 3, 2009) ", "Committee assignments:", "H. Banking, Finance, and Urban Affairs (103 rd Congress) H. Government Operations (103 rd Congress) H. Rules (104 th -108 th Congresses) H. Financial Services (109 th -110 th Congresses)", "PYLE, GLADYS. Republican; South Dakota, Senator. Elected to the Senate Nov. 8, 1938, to fill vacancy caused by death of Peter Norbeck; never sworn in and seated, because Congress was not in session between her election and the expiration of the term on Jan. 3, 1939.", "No committee assignments listed.", "RADEWAGEN, AUMUA AMATA COLEMAN. Republican; Delegate from American Samoa. Elected to the 114 th -116 th Congress. (served Jan. 3, 2015-present)", "Committee assignments:", "H. Natural Resources (114 th -116 th Congresses) H. Small Business (114 th -116 th Congresses) H. Veterans' Affairs (114 th -116 th Congresses)", "RANKIN, JEANNETTE. Republican; Montana, At Large (65 th Congress) and 1 st District (77 th Congress). Elected to the 65 th Congress and the 77 th Congress. (served April 2, 1917-March 4, 1919; Jan. 3, 1941-Jan. 3, 1943) First woman elected to Congress.", "Committee assignments:", "H. Public Lands (65 th Congress; 77 th Congress) H. Woman Suffrage (65 th Congress) H. Insular Affairs (77 th Congress)", "REECE, LOUISE GOFF. Republican; Tennessee, 1 st District. Elected to the 87 th Congress in a May 16, 1961, special election to fill vacancy caused by death of her husband, B. Carroll Reece. (served May 23, 1961-Jan. 3, 1963)", "Committee assignment: ", "H. Public Works (87 th Congress)", "REID, CHARLOTTE THOMPSON. Republican; Illinois, 15 th District. Elected to the 88 th -92 nd Congresses. (served Jan. 3, 1963, until her resignation on Oct. 7, 1971)", "Committee assignments:", "H. Interior and Insular Affairs (88 th -89 th Congresses) H. Public Works (89 th Congress) H. Appropriations (90 th -92 nd Congresses) H. Standards of Official Conduct (91 st -92 nd Congresses)", "RICE, KATHLEEN M. Democrat; New York; 4 th District. Elected to the 114 th -116 th Congresses. (served Jan. 3, 2015-present)", "Committee assignments:", "H. Homeland Security (114 th -116 th Congresses) H. Veterans' Affairs (114 th -116 th Congresses)", "RICHARDSON, LAURA. Democrat, California, 37 th District. Elected to the 110 th Congress in an August 21, 2007, special election to fill vacancy caused by death of Juanita Millender-McDonald; reelected to the 111 th -112 th Congresses. (served Sept. 4, 2007, to Jan. 3, 2013)", "Committee assignments:", "H. Science and Technology (110 th Congress) H. Transportation and Infrastructure (110 th -112 th Congresses) H. Homeland Security (111 th -112 th Congresses)", "RILEY, CORINNE BOYD. Democrat; South Carolina, 2 nd District. Elected to the 87 th Congress in an April 10, 1962, special election to fill vacancy caused by death of husband, John J. Riley. (served April 12, 1962-Jan. 3, 1963)", "Committee assignment:", "H. Science and Transportation (87 th Congress)", "RIVERS, LYNN. Democrat; Michigan, 13 th District. Elected to the 104 th -107 th Congresses. (served Jan. 3, 1995-Jan. 3, 2003)", "Committee assignments:", "H. Budget (104 th -106 th Congresses) H. Science (104 th -107 th Congresses) H. Education and the Workforce (107 th Congress)", "ROBERTSON, ALICE MARY. Republican; Oklahoma, 2 nd District. Elected to the 67 th Congress. (served April 11, 1921-March 3, 1923)", "Committee assignments:", "H. Expenditures in the Interior Department (67 th Congress) H. Indian Affairs (67 th Congress) H. Woman Suffrage (67 th Congress)", "ROBY, MARTHA. Republican; Alabama, 2 nd District. Elected to the 112 th -116 th Congresses. (served Jan. 3, 2011-present)", "Committee assignments:", "H. Agriculture (112 th -113 th Congresses) H. Armed Services (112 th -113 th Congresses) H. Education and the Workforce (112 th -113 th Congresses) H. Appropriations (113 th -116 th Congresses) H. Select Terrorist Attack in Benghazi (113 th -114 th Congresses) H. Judiciary (115 th -116 th Congresses)", "ROGERS, EDITH NOURSE. Republican; Massachusetts, 5 th District. Elected to the 69 th Congress in a June 30, 1925, special election to fill vacancy caused by death of husband, John J. Rogers; reelected to the 70 th -86 th Congresses. (served Dec. 7, 1925, until her death Sept. 10, 1960)", "Committee assignments:", "H. Expenditures in the Navy Department (69 th Congress) H. Industrial Arts and Expositions (69 th Congress) H. Woman Suffrage (69 th Congress) H. World War Veterans' Legislation (69 th -79 th Congresses) H. Civil Service (70 th -77 th Congresses) H. Indian Affairs (70 th Congress) H. Foreign Affairs (73 rd -79 th Congresses) H. Veterans' Affairs (80 th -86 th Congresses; ranking member, 81 st -82 nd and 84 th -86 th Congresses; chair, 80 th and 83 rd Congresses)", "ROSEN, JACKY. Democrat; Nevada, 3 rd District, and Senator. Elected to the 115 th Congress. (served in House Jan. 3, 2017-Jan. 3. 2019) Subsequently elected to the Senate in 2018. (served in the Senate Jan. 3, 2019-present)", "Committee assignments:", "H. Armed Services (115 th Congress) H. Science, Space and Technology (115 th Congress) S. Commerce, Science and Transportation (116 th Congress) S. Health, Education, Labor and Pensions (116 th Congress) S. Homeland Security and Governmental Affairs (116 th Congress) S. Small Business (116 th Congress) S. Special Aging (116 th Congress)", "ROS-LEHTINEN, ILEANA. Republican; Florida, 18 th District (102 nd -112 th Congresses); 27 th District (113 th Congress-present). Elected to the 101 st Congress in an August 29, 1989, special election to fill vacancy caused by death of Claude Pepper; reelected to the 102 nd -115 th Congresses. Chair of the Congressional Hispanic Conference in the 109 th Congress. (served Sept. 6, 1989-Jan. 3, 2019)", "Committee assignments:", "H. Foreign Affairs/International Relations (101 st -115 th Congresses; ranking member, 110 th -111 th Congresses; chair, 112 th Congress) H. Government Operations/Government Reform (101 st -109 th Congresses) H. Budget (109 th Congress) H. Rules (113 th Congress) H. Intelligence (114 th -115 th Congresses)", "ROUKEMA, MARGARET (MARGE) SCAFATI. Republican; New Jersey, 7 th District. Elected to the 97 th -107 th Congresses. (served Jan. 3, 1981-Jan. 3, 2003)", "Committee assignments:", "H. Education and Labor/Economic and Educational Opportunities/Education and the Workforce (97 th -107 th Congresses) H. Select Hunger (98 th -102 nd Congresses; vice chair, 100 th Congress) H. Banking, Finance and Urban Affairs/Banking and Financial Services/Financial Services (97 th -107 th Congresses)", "ROYBAL-ALLARD, LUCILLE. Democrat; California, 33 rd District (103 rd -107 th Congresses); 34 th District (108 th -112 th Congresses); 40 th District (113 th Congress-present). Elected to the 103 rd -116 th Congresses. (served Jan. 3, 1993-present)", "Committee assignments:", "H. Banking, Finance, and Urban Affairs/Banking and Financial Services (103 rd -105 th Congresses) H. Small Business (103 rd Congress) H. Budget (104 th -105 th Congresses) H. Select U.S. National Security and Military/Commercial Concerns with \u2026 China (105 th -106 th Congresses) H. Appropriations (106 th -116 th Congresses) H. Standards of Official Conduct (108 th -110 th Congresses) Jt. Select Budget and Appropriations Process Reform (115 th Congress)", "SAIKI, PATRICIA F. Republican; Hawaii, 1 st District. Elected to the 100 th -101 st Congresses. (served Jan. 3, 1987-Jan. 3, 1991)", "Committee assignments:", "H. Banking, Finance and Urban Affairs (100 th -101 st Congresses) H. Merchant Marine and Fisheries (100 th -101 st Congresses) H. Select Aging (100 th -101 st Congresses)", "ST. GEORGE, KATHARINE PRICE COLLIER. Republican; New York, 28 th District. Elected to the 80 th -88 th Congresses. (served Jan. 3, 1947-Jan. 3, 1965)", "Committee assignments:", "H. Post Office and Civil Service (80 th -84 th Congresses; 86 th -88 th Congresses) H. Government Operations (83 rd Congress) H. Armed Services (85 th -86 th Congresses) H. Rules (87 th -88 th Congresses)", "S\u00c1NCHEZ, LINDA. Democrat; California, 39 th District (108 th -113 th Congresses); 38 th District (113 th Congress-present). Elected to the 108 th -115 th Congresses (served Jan. 3, 2003-present). Sister of Loretta Sanchez. Chair of the Congressional Hispanic Caucus, 114 th Congress.", "Committee assignments:", "H. Government Reform (108 th -109 th Congresses) H. Judiciary (108 th -112 th Congresses) H. Small Business (108 th -109 th Congresses) H. Education and Labor (110 th Congress) H. Foreign Affairs (110 th Congress) H. Ways and Means (111 th Congress; 113 th -116 th Congresses) H. Veterans' Affairs (112 th Congress) H. Ethics (112 th -114 th Congresses; ranking member, 114 th Congress) H. Select Terrorist Attack in Benghazi (113 th -114 th Congresses)", "SANCHEZ, LORETTA. Democrat; California, 46 th District (105 th -107 th and 113 th -114 th Congresses) and 47 th District (108 th -110 th Congresses). Elected to the 105 th -114 th Congresses (served Jan. 3, 1997-Jan. 3, 2017). Sister of Linda S\u00e1nchez.", "Committee assignments:", "H. Education and the Workforce (105 th -107 th Congresses) H. National Security (105 th Congress) H. Armed Services (106 th -114 th Congresses) H. Homeland Security (108 th -114 th Congresses) Jt. Economic (109 th Congress; 111 th -114 th Congresses)", "SCANLON, MARY GAY. Democrat, Pennsylvania, 7 th District (115 th Congress); 5 th District (116 th Congress). Elected to the 115 th Congress in a Nov. 6, 2018 special election to fill vacancy caused by the resignation of Patrick Meehan, also elected to the 116 th Congress. (served Nov. 13, 2018-present)", "Committee assignments:", "115 th Congress: no assignments H. Judiciary (116 th Congress) H. Rules (116 th Congress) H. Select Modernization of Congress (116 th Congress)", "SCHAKOWSKY, JANICE. Democrat; Illinois, 9 th District. Elected to the 106 th -116 th Congresses. (served Jan. 3, 1999-present)", "Committee assignments:", "H. Banking and Financial Services/Financial Services (106 th -107 th Congresses) H. Government Reform (106 th -107 th Congresses) H. Small Business (106 th Congress) H. Energy and Commerce (108 th -116 th Congresses) H. Intelligence (110 th -113 th Congresses) H. Appropriations (114 th Congress) H. Budget (116 th Congress)", "SCHENK, LYNN. Democrat; California, 49 th District. Elected to the 103 rd Congress. (served Jan. 3, 1993-Jan. 3, 1995)", "Committee assignments:", "H. Energy and Commerce (103 rd Congress) H. Merchant Marine and Fisheries (103 rd Congress)", "SCHMIDT, JEAN. Republican, Ohio, 2 nd District. Elected to the 109 th Congress in an August 2, 2005, special election to fill vacancy caused by resignation of Rob Portman; reelected to the 110 th -112 th Congresses. (served Sept. 6, 2005, to Jan. 3, 2013)", "Committee assignments:", "H. Agriculture (109 th -112 th Congresses) H. Government Reform (109 th Congress) H. Transportation and Infrastructure (109 th -112 th Congresses) H. Foreign Affairs (112 th Congress)", "SCHNEIDER, CLAUDINE CMARADA. Republican; Rhode Island, 2 nd District. Elected to the 97 th -101 st Congresses. (served Jan. 3, 1981-Jan. 3, 1991)", "Committee assignments:", "H. Merchant Marine and Fisheries (97 th -101 st Congresses) H. Science and Technology (97 th -101 st Congresses) H. Special Committee on Aging (98 th -101 st Congresses)", "SCHRIER, KIM. Democrat; Washington, 8 th District. Elected to the 116 th Congress (served Jan. 3, 2019 to present)", "Committee assignments:", "H. Agriculture (116 th Congress) H. Education and Labor (116 th Congress)", "SCHROEDER, PATRICIA S. Democrat; Colorado, 1 st District. Elected to the 93 rd -104 th Congresses. (served Jan. 3, 1973-Jan. 3, 1997) ", "Committee assignments:", "H. Armed Services (93 rd -103 rd Congresses) H. Post Office and Civil Service (93 rd -103 rd Congresses) H. Judiciary (97 th -104 th Congresses) H. Select Children, Youth, and Families (100 th -102 nd Congresses; chair, 102 nd Congress) H. National Security (104 th Congress)", "SCHWARTZ, ALLYSON Y. Democrat; Pennsylvania, 13 th District. Elected to the 109 th -113 th Congresses. (served Jan. 3, 2005-Jan. 3, 2015)", "Committee assignments:", "H. Budget (109 th -113 th Congresses) H. Transportation and Infrastructure (109 th Congress) H. Ways and Means (110 th , 111 th , 113 th Congresses) H. Foreign Affairs (112 th Congress)", "SEASTRAND, ANDREA . Republican; California, 22 nd District. Elected to the 104 th Congress. (served Jan. 3, 1995-Jan. 3, 1997)", "Committee assignments:", "H. Science (104 th Congress) H. Transportation and Infrastructure (104 th Congress)", "SEKULA GIBBS, SHELLEY . Republican; Texas, 22 nd District. Elected to the 109 th Congress in a Nov. 7, 2006, special election to fill vacancy caused by resignation of Tom Delay. (served Nov. 13, 2006-Jan. 3, 2007)", "Committee assignments:", "H. Education and the Workforce (109 th Congress) H. Transportation and Infrastructure (109 th Congress)", "SEWELL, T ERRYCINA ( \"TERRI\" ). Democrat; Alabama, 7 th District. Elected to the 112 th -116 th Congresses. (served Jan. 3, 2011-present) ", "Committee assignments:", "H. Agriculture (112 th Congress) H. Science, Space and Technology (112 th Congress) H. Financial Services (113 th -114 th Congresses) H. Intelligence (113 th -116 th Congresses) H. Ways and Means (115 th -116 th Congresses)", "SHAHEEN, JEANNE D. Democrat; New Hampshire; Senator. Elected to Senate in 2008 and reelected in 2014. (served Jan. 3, 2009-present)", "Committee assignments:", "S. Energy and Natural Resources (111 th -112 th Congresses) S. Foreign Relations (111 th -116 th Congresses) S. Small Business and Entrepreneurship (111 th -116 th Congresses; ranking member, 114 th -115 th Congresses) S. Armed Services (112 th -116 th Congresses) S. Appropriations (113 th -116 th Congresses) S. Ethics (115 th -116 th Congress)", "SHALALA, DONNA. Democrat; Florida, 27 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Education and Labor (116 th Congress) H. Rules (116 th Congress)", "SHEA-PORTER, CAROL, Democrat; New Hampshire, 1 st District. Elected to the 110 th , 111 th , 113 th , and 115 th Congresses. (served Jan. 3, 2007-Jan. 3, 2011; Jan. 3, 2013-Jan. 3, 2015; Jan. 3, 2017-Jan. 3, 2019)", "Committee assignments:", "H. Armed Services (110 th , 111 th , 113 th , 115 th Congresses) H. Education and Labor/ Education and the Workforce (110 th , 111 th , 115 th Congresses) H. Natural Resources (111 th , 113 th Congresses)", "SHEPHERD, KAREN. Democrat; Utah, 2 nd District. Elected to the 103 rd Congress. (served Jan. 3, 1993-Jan. 3, 1995)", "Committee assignments:", "H. Natural Resources (103 rd Congress) H. Public Works and Transportation (103 rd Congress) ", "SHERRILL, MIKIE. Democrat; New Jersey, 11 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Science, Space and Technology (116 th Congress) H. Armed Services (116 th Congress)", "SIMPSON, EDNA OAKES. Republican; Ohio, 28 th District. Elected to the 86 th Congress (served Jan. 3, 1959-Jan. 3, 1961). She succeeded her husband, Sidney Simpson, who died on Oct. 26, 1958.", "Committee assignments:", "H. Administration (86 th Congress) H. Interior and Insular Affairs (86 th Congress)", "SINEMA, KYRSTEN. Democrat; Arizona, 9 th District, and Senator. Elected to the 113 th -115 th Congresses. (served in House Jan. 3, 2013-Jan. 3, 2019) Subsequently elected to the Senate in 2018. (served in Senate Jan. 3, 2019-present)", "Committee assignment:", "H. Financial Services (113 th -115 th Congresses) S. Banking, Housing and Urban Affairs (116 th Congress) S. Commerce, Science and Transportation (116 th Congress) S. Homeland Security and Governmental Affairs (116 th Congress) S. Veterans' Affairs (116 th Congress) S. Special Aging (116 th Congress) ", "SLAUGHTER, LOUISE MCINTOSH. Democrat; New York; 30 th District (100 th -102 nd Congresses); 28 th District (103 rd -112 th Congresses); 25 th District (113 th Congress-present). Elected to the 100 th -115 th Congresses. (served Jan. 3, 1987, until her death March 16, 2018)", "Committee assignments:", "H. Government Operations (100 th -101 st Congresses) H. Public Works and Transportation (100 th -101 st Congresses) H. Select Aging (100 th -102 nd Congresses) H. Budget (102 nd -104 th Congresses) H. Government Reform and Oversight (104 th Congress) H. Rules (102 nd -115 th Congresses; chair, 110 th -111 th Congresses; ranking member, 109 th , 112 th -115 th Congresses) H. Homeland Security (108 th Congress)", "SLOTKIN, ELISSA. Democrat; Michigan, 8 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Homeland Security (116 th Congress) H. Armed Services (116 th Congress)", "SMITH, LINDA. Republican; Washington, 3 rd District. Elected to the 104 th -105 th Congresses. (served Jan. 3, 1995-Jan. 3, 1999)", "Committee assignments:", "H. Resources (104 th -105 th Congresses) H. Small Business (104 th -105 th Congresses)", "SMITH, MARGARET CHASE. Republican; Maine, 2 nd District, and Senator. Elected to the 76 th Congress in a June 3, 1940, special election to fill vacancy caused by death of husband, Clyde H. Smith; reelected to the 77 th -80 th Congresses (served in House June 10, 1940-Jan. 3, 1949). Subsequently elected to the Senate in 1948 and reelected in 1954, 1960, and 1966 (served in Senate Jan. 3, 1949-Jan. 3, 1973). Chair of the Senate Republican Conference, 1967-1972 (the highest Senate leadership post held by a woman).", "Committee assignments:", "H. Election of the President, Vice President, Representatives in Congress (76 th Congress) H. War Claims (76 th Congress) H. Revision of the Laws (76 th Congress) H. Invalid Pensions (76 th -77 th Congresses) H. Education (77 th Congress) H. Post Office and Post Roads (77 th Congress) H. Naval Affairs (78 th -79 th Congresses) H. Armed Services (80 th Congress) S. District of Columbia (81 st Congress) S. Expenditures in Executive Departments (81 st -82 nd Congresses) S. Rules and Administration (82 nd Congress) S. Select Senate Employees Compensation Rates (chair, 83 rd Congress) S. Appropriations (83 rd -92 nd Congresses) S. Armed Services (83 rd -92 nd Congresses; ranking member, 90 th -92 nd Congresses) S. Government Operations (83 rd -85 th Congresses) S. Aeronautical and Space Sciences (86 th -92 nd Congresses; ranking member, 88 th -91 st Congresses)", "SMITH, TINA. Democrat; Minnesota; Senator. Appointed to the Senate Dec. 13, 2017, to fill vacancy caused by resignation of Al Franken, reelected in 2018. (served Jan. 3, 2018-present)", "Committee assignments:", "S. Agriculture, Nutrition and Forestry (115 th -116 th Congresses) S. Energy and Natural Resources (115 th Congress) S. Indian Affairs (115 th -116 th Congresses) Jt. Select Solvency Multiemployer Pension Plans (115 th Congress) S. Banking, Housing and Urban Affairs (116 th Congress) S. Health, Education, Labor and Pensions (116 th Congress)", "SMITH, VIRGINIA. Republican; Nebraska, 3 rd District. Elected to the 94 th -101 st Congresses. (served Jan. 3, 1975-Jan. 3, 1991)", "Committee assignments:", "H. Education and Labor (94 th Congress) H. Interior and Insular Affairs (94 th Congress) H. Appropriations (95 th -101 st Congresses)", "SNOWE, OLYMPIA J. Republican; Maine, 2 nd District, and Senator. Elected to the 96 th -103 rd Congresses (served in House Jan. 3, 1979-Jan. 3, 1995). Subsequently elected to the Senate in 1994 and reelected in 2000 and 2006. (served in Senate Jan. 3, 1995, to Jan. 3, 2013)", "Committee assignments:", "H. Government Operations (96 th Congress) H. Small Business (96 th -97 th Congresses) H. Select Committee on Aging (96 th -102 nd Congresses) H. Foreign Affairs (97 th -103 rd Congresses) Jt. Economic (98 th -102 nd Congresses) H. Budget (103 rd Congress) S. Budget (104 th -107 th Congresses) S. Commerce, Science, and Transportation (104 th -112 th Congresses) S. Foreign Relations (104 th Congress) S. Small Business and Entrepreneurship (104 th -112 th Congresses; chair, 108 th -109 th Congresses; ranking member, 110 th -112 th Congresses) S. Armed Services (105 th -106 th Congresses) S. Finance (107 th -112 th Congresses) S. Select Intelligence (108 th -112 th Congresses)", "SOLIS, HILDA. Democrat; California, 31 st District (107 th Congress) and 32 nd District (108 th -111 th Congresses). Elected to the 107 th -111 th Congresses. (served Jan. 3, 2001, until her resignation on Feb. 23, 2009, to become Secretary of Labor)", "Committee assignments:", "H. Education and the Workforce (107 th Congress) H. Resources/Natural Resources (107 th , 110 th Congresses) H. Energy and Commerce (108 th -110 th Congresses) H. Select Energy Independence and Global Warming (110 th Congress)", "SPANBERGER, ABIGAIL. Democrat; Virginia, 7 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Agriculture (116 th Congress) H. Foreign Affairs (116 th Congress)", "SPEIER, JACKIE. Democrat; California, 12 th District (110 th -112 th Congresses); 14 th District (113 th Congress-present). Elected to the 110 th Congress in an April 8, 2008, special election to fill vacancy caused by death of Tom Lantos; reelected to the 111 th -116 th Congresses. (served April 10, 2008-present)", "Committee assignments:", "H. Financial Services (110 th -111 th Congresses) H. Oversight and Government Reform/Oversight and Reform (110 th -113 th , 116 th Congresses) H. Select Committee on Energy Independence and Global Warming (111 th Congress) H. Homeland Security (112 th Congress) H. Armed Services (112 th -116 th Congresses) H. Intelligence (114 th -116 th Congresses)", "SPELLMAN, GLADYS NOON. Democrat; Maryland, 5 th District. Elected to the 94 th -97 th Congresses. Began service Jan. 14, 1975. Unable to be sworn in to the 97 th Congress due to disability; seat declared vacant Feb. 24, 1981.", "Committee assignments:", "H. Banking, Currency, and Housing/Banking, Finance, and Urban Affairs (94 th -96 th Congresses) H. Post Office and Civil Service (94 th -95 th Congresses) H. Democratic Steering and Policy (96 th Congress)", "STABENOW, DEBBIE. Democrat; Michigan, 8 th District, and Senator. Elected to the 105 th -106 th Congresses (served in House Jan. 3, 1997-Jan. 3, 2001). Subsequently elected to the Senate in 2000 and reelected in 2006, 2012, and 2018. (served in Senate Jan. 3, 2001-present) ", "Committee assignments:", "H. Agriculture (105 th -106 th Congresses) H. Science (105 th -106 th Congresses) S. Agriculture, Nutrition, and Forestry (107 th -116 th Congresses; chair, 112 th -113 th Congresses, ranking member, 114 th -116 th Congresses) S. Banking, Housing, and Urban Affairs (107 th -109 th Congresses) S. Budget (107 th -116 th Congresses) S. Special Committee on Aging (107 th -108 th Congresses) S. Finance (110 th -116 th Congresses) S. Energy and Natural Resources (111 th -116 th Congresses) Jt. Taxation (114 th -116 th Congresses)", "STANLEY, WINIFRED CLAIRE. Republican; New York, At Large. Elected to the 78 th Congress. (served Jan. 3, 1943-Jan. 3, 1945)", "Committee assignments:", "H. Civil Service (78 th Congress) H. Patents (78 th Congress) ", "STEFANIK, ELISE M. Republican; New York, 21 st District. Elected to the 114 th -116 th Congresses. (served Jan. 3, 2015-present)", "Committee assignments:", "H. Armed Services (114 th -116 th Congresses) H. Education and the Workforce /Education and Labor (114 th -116 th Congresses) H. Intelligence (115 th -116 th Congresses)", "STEVENS, HALEY. Democrat; Michigan, 11 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Science, Space and Technology (116 th Congress) H. Education and Labor (116 th Congress)", "SULLIVAN, LEONOR KRETZER. Democrat; Missouri, 3 rd District. Elected to the 83 rd -94 th Congresses. (served Jan. 3, 1953-Jan. 3, 1977) ", "Committee assignments:", "H. Merchant Marine and Fisheries (83 rd Congress; 89 th -94 th Congresses; chair, 93 rd - 94 th Congresses) H. Banking and Currency (84 th -94 th Congresses) Jt. Committee on Defense Production (91 st -94 th Congresses)", "SUMNER, JESSIE. Republican; Illinois, 18 th District. Elected to the 76 th -79 th Congresses. (served Jan. 3, 1939-Jan. 3, 1947)", "Committee assignment:", "H. Banking and Currency (76 th -79 th Congresses)", "SUTTON, BETTY. Democrat; Ohio, 13 th District. Elected to the 110 th -112 th Congresses. (served Jan. 3, 2007, to Jan. 3, 2013)", "Committee assignments:", "H. Budget (110 th Congress) H. Rules (110 th Congress) H. Energy and Commerce (111 th Congress) H. Armed Services (112 th Congress) H. Natural Resources (112 th Congress)", "TAUSCHER, ELLEN. Democrat; California, 10 th District. Elected to the 105 th -111 th Congresses. (served Jan. 3, 1997, until her resignation on June 26, 2009)", "Committee assignments:", "H. National Security (105 th Congress) H. Science (105 th Congress) H. Armed Services (106 th -111 th Congresses) H. Transportation and Infrastructure (105 th -111 th Congresses)", "TENNEY, CLAUDIA. Republican; New York, 22 nd District. Elected to the 115 th Congress. (served Jan. 3, 2017-Jan. 3, 2019)", "Committee assignment: ", "H. Financial Services (115 th Congress)", "THOMAS, LERA MILLARD. Democrat; Texas, 8 th District. Elected to the 89 th Congress in a March 26, 1966, special election to fill vacancy caused by death of husband, Albert Thomas. (served March 30, 1966-Jan. 3, 1967)", "Committee assignment:", "H. Merchant Marine and Fisheries (89 th Congress)", "THOMPSON, RUTH. Republican; Michigan, 9 th District. Elected to the 82 nd -84 th Congresses. (served Jan. 3, 1951-Jan. 3, 1957)", "Committee assignments:", "H. Judiciary (82 nd -84 th Congresses) Jt. Committee on Immigration and Nationality Policy (84 th Congress)", "THURMAN, KAREN L. Democrat; Florida, 5 th District. Elected to the 103 rd -107 th Congresses. (served Jan. 3, 1993-Jan. 3, 2003)", "Committee assignments:", "H. Agriculture (103 rd -104 th Congresses) H. Government Operations/Government Reform and Oversight (103 rd -104 th Congresses) H. Ways and Means (105 th -107 th Congresses)", "TITUS, DINA. Democrat; Nevada, 3 rd District (111 th Congress); 1 st District (113 th Congress-present). Elected to the 111 th and 113 th -116 th Congresses. (served Jan. 3, 2009-Jan. 3, 2011; Jan. 3, 2013-present)", "Committee assignments:", "H. Education and Labor (111 th Congress) H. Homeland Security (111 th , 116 th Congresses) H. Transportation and Infrastructure (111 th -116 th Congresses) H. Veterans' Affairs (113 th -114 th Congresses) H. Foreign Affairs (115 th -116 th Congresses)", "TLAIB, RASHIDA. Democrat; Michigan, 13 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Oversight and Reform (116 th Congress) H. Financial Services (116 th Congress)", "TORRES, NORMA J. Democrat; California, 35 th District. Elected to the 114 th -116 th Congresses. (served Jan. 3, 2015-present)", "Committee assignments:", "H. Homeland Security (114 th Congress) H. Natural Resources (114 th -115 th Congresses) H. Foreign Affairs (115 th Congress) H. Rules (115 th -116 th Congresses) H. Appropriations (116 th Congress)", "TORRES SMALL, XOCHITL. Democrat; New Mexico, 2 nd District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Homeland Security (116 th Congress) H. Armed Services (116 th Congress)", "TRAHAN, LORI. Democrat; Massachusetts, 3 rd District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "Education and Labor (116 th Congress) H. Armed Services (116 th Congress)", "TSONGAS, NIKI. Democrat; Massachusetts; 5 th District (110 th -112 th Congresses); 3 rd District (113 th Congress-present). Elected to the 110 th Congress in an Oct. 16, 2007, special election to fill vacancy caused by resignation of Martin Meehan; reelected to the 111 th -115 th Congresses. (served Oct. 18, 2007-Jan. 3, 2019)", "Committee assignments:", "H. Armed Services (110 th -115 th Congresses) H. Budget (110 th -111 th Congresses) H. Natural Resources (111 th -115 th Congresses)", "UNDERWOOD, LAUREN. Democrat; Illinois, 14 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Homeland Security (116 th Congress) H. Veterans' Affairs (116 th Congress) H. Education and Labor (116 th Congress)", "UNSOELD, JOLENE. Democrat; Washington, 3 rd District. Elected to the 101 st -103 rd Congresses. (served Jan. 3, 1989-Jan. 3, 1995)", "Committee assignments:", "H. Education and Labor (101 st -103 rd Congresses) H. Merchant Marine and Fisheries (101 st -103 rd Congresses) H. Select Aging (101 st -102 nd Congresses)", "VEL\u00c1ZQUEZ, NYDIA M. Democrat; New York, 12 th District (103 rd -112 th Congresses); 7 th District (113 th District-present). Elected to the 103 rd -116 th Congresses. (served Jan. 3, 1993-present) Chair of the Congressional Hispanic Caucus, 111 th Congress.", "Committee assignments:", "H. Banking, Finance, and Urban Affairs/Banking and Financial Services/Financial Services (103 rd -116 th Congresses) H. Small Business (103 rd -115 th Congresses; chair, 110 th -111 th , 116 th Congresses; ranking member, 105 th -109 th , 112 th -115 th Congresses) H. Natural Resources (115 th -116 th Congresses)", "VUCANOVICH, BARBARA. Republican; Nevada, 2 nd District. Elected to the 98 th -104 th Congresses. (served Jan. 3, 1983-Jan. 3, 1997) ", "Committee assignments:", "H. Administration (98 th -101 st Congresses) H. Select Children, Youth, and Families (98 th -101 st Congresses) H. Interior and Insular Affairs (98 th -102 nd Congresses) H. Appropriations (102 nd -104 th Congresses) H. Natural Resources (103 rd Congress)", "WAGNER, ANN. Republican; Missouri, 2 nd District. Elected to the 113 th -116 th Congresses. (served Jan. 3, 2013-present)", "Committee assignments:", "H. Financial Services (113 th -116 th Congresses) H. Foreign Affairs (115 th -116 th Congress)", "WALDHOLTZ, ENID GREENE. Republican; Utah, 2 nd District. Elected to the 104 th Congress. (served Jan. 3, 1995-Jan. 3, 1997)", "Committee assignment:", "H. Rules (104 th Congress)", "WALORSKI, JACKIE. Republican; Indiana, 2 nd District. Elected to the 113 th -116 th Congresses. (served Jan. 3, 2013-present)", "Committee assignments:", "H. Armed Services (113 th -114 th Congresses) H. Budget (113 th Congress) H. Veterans' Affairs (113 th -114 th Congresses) H. Agriculture (114 th Congress) H. Ways and Means (115 th -116 th Congresses)", "WALTERS, MIMI. Republican; California, 45 th District. Elected to the 114 th -115 th Congresses. (served Jan. 3, 2015-Jan. 3, 2019)", "Committee assignments:", "H. Judiciary (114 th Congress) H. Transportation and Infrastructure (114 th Congress) H. Energy and Commerce (115 th Congress) H. Ethics (115 th Congress)", "WARREN, ELIZABETH. Democrat; Massachusetts; Senator. Elected in 2012 and reelected in 2018. (served Jan. 3, 2013-present)", "Committee assignments:", "S. Banking, Housing and Urban Affairs (113 th -116 th Congresses) S. Health, Education, Labor, and Pensions (113 th -116 th Congresses) S. Special Aging (113 th -116 th Congresses) S. Energy and Natural Resources (114 th Congress) S. Armed Services (115 th -116 th Congresses)", "WASSERMAN SCHULTZ, DEBBIE. Democrat, Florida, 20 th District (109 th -112 th Congresses); 23 rd District (113 th Congress-present). Elected to the 109 th -116 th Congresses. (served Jan. 3, 2005-present) ", "Committee assignments:", "H. Financial Services (109 th Congress) Jt. Library (110 th -111 th Congresses) H. Appropriations (110 th -111 th Congresses; 113 th -116 th Congresses) H. Judiciary (110 th -112 th Congress, first session) H. Budget (112 th , 115 th Congresses) H. Oversight and Reform (116 th Congress)", "WATERS, MAXINE. Democrat; California, 29 th District (102 nd Congress), 35 th District (103 rd -112 th Congresses) and 43 rd District (113 th Congress-present). Elected to the 102 nd -116 th Congresses. (served Jan. 3, 1991-present) Chair, Congressional Black Caucus, 105 th Congress.", "Committee assignments:", "H. Banking, Finance, and Urban Affairs/Banking and Financial Services/ Financial Services (102 nd -116 th Congresses; ranking member, 113 th -115 th Congresses; chair, 116 th Congress) H. Veterans' Affairs (102 nd -104 th Congresses) H. Small Business (103 rd -104 th Congresses) H. Judiciary (105 th -112 th Congresses)", "WATSON, DIANE. Democrat; California, 32 nd District (107 th Congress) and 33 rd District (108 th -111 th Congresses). Elected to the 107 th Congress in a June 5, 2001, special election to fill vacancy caused by death of Julian Dixon; reelected to the 108 th -111 th Congresses. (served June 7, 2001-Jan. 3, 2011)", "Committee assignments:", "H. Government Reform/Oversight and Government Reform (107 th -111 th Congresses) H. International Relations/Foreign Affairs (107 th -111 th Congresses)", "WATSON COLEMAN, BONNIE. Democrat; New Jersey, 12 th District. Elected to the 114 th -116 th Congresses. (served Jan. 3, 2015-present)", "Committee assignments:", "H. Homeland Security (114 th -116 th Congresses) H. Oversight and Government Reform (114 th -115 th Congresses) H. Appropriations (116 th Congress)", "WEIS, JESSICA McCULLOUGH. Republican; New York, 38 th District. Elected to the 86 th -87 th Congresses. (served Jan. 3, 1959-Jan. 3, 1963)", "Committee assignments:", "H. District of Columbia (86 th -87 th Congresses) H. Government Operations (86 th Congress) H. Science and Astronautics (87 th Congress)", "WEXTON, JENNIFER. Democrat, Virginia, 10 th District. Elected to the 116 th Congress. (served Jan. 3, 2019-present)", "Committee assignments:", "H. Science, Space and Technology (116 th Congress) H. Financial Services (116 th Congress)", "WILD, SUSAN. Democrat, Pennsylvania, 15 th District (115 th Congress); 7 th District (116 th Congress). Elected to the 115 th Congress in a Nov. 6, 2018 special election to fill vacancy caused by resignation of Charlie Dent; subsequently elected to the 116 th Congress. (served Nov. 27, 2018-present)", "Committee assignments:", "None in 115 th Congress H. Foreign Affairs (116 th Congress) H. Education and Labor (116 th Congress) H. Ethics (116 th Congress)", "WILSON, FREDERICA. Democrat; Florida; 17 th District (112 th Congress), 24 th District (113 th Congress-present). Elected to the 112 th -116 th Congresses. (served Jan. 3, 2011-present)", "Committee assignments:", "H. Foreign Affairs (112 th Congress) H. Science, Space and Technology (112 th -113 th Congresses) H. Education and the Workforce (114 th -116 th Congresses) H. Transportation and Infrastructure (115 th -116 th Congresses)", "WILSON, HEATHER. Republican; New Mexico, 1 st District. Elected to the 105 th Congress in a June 23, 1998, special election to fill vacancy caused by death of Steven Schiff; reelected to the 106 th -110 th Congresses. (served June 25, 1998-Jan. 3, 2009)", "Committee assignments:", "H. Commerce (105 th -106 th Congresses) H. Intelligence (106 th Congress; 109 th -110 th Congresses) H. Armed Services (107 th -108 th Congresses) H. Energy and Commerce (107 th -110 th Congresses)", "WINGO, EFFIGENE LOCKE. Democrat; Arkansas, 4 th District. Elected to the 71 st Congress Nov. 4, 1930, to fill vacancy caused by death of husband, Otis Wingo, and to the 72 nd Congress. (served Dec. 1, 1930-March 3, 1933)", "Committee assignments:", "H. Accounts (71 st Congress) H. Insular Affairs (71 st Congress) H. Foreign Affairs (72 nd Congress)", "WOODHOUSE, CHASE GOING. Democrat; Connecticut, 2 nd District. Elected to the 79 th and 81 st Congresses. (served Jan. 3, 1945-Jan. 3, 1947, and Jan. 3, 1949-Jan. 3, 1951) ", "Committee assignments:", "H. Banking and Currency (79 th , 81 st Congresses) H. Administration (81 st Congress)", "WOOLSEY, LYNN. Democrat; California, 6 th District. Elected to the 103 rd -112 th Congresses. (served Jan. 3, 1993-Jan. 3, 2013)", "Committee assignments:", "H. Budget (103 rd -105 th Congresses) H. Education and Labor/Economic and Educational Opportunities/Education and the Workforce (103 rd -112 th Congresses) H. Government Operations (103 rd Congress) H. Science/Science and Technology/Science, Space and Technology (106 th -112 th Congresses) H. Foreign Affairs (110 th Congress)"], "subsections": []}]}}
{"id": "RL33375", "title": "Staffing for Adequate Fire and Emergency Response: The SAFER Grant Program", "released_date": "2019-04-25T00:00:00", "summary": ["In response to concerns over the adequacy of firefighter staffing, the Staffing for Adequate Fire and Emergency Response Act, known as the SAFER Act, was enacted by the 108th Congress as Section 1057 of the FY2004 National Defense Authorization Act (P.L. 108-136). The SAFER Act authorizes grants to career, volunteer, and combination local fire departments for the purpose of increasing the number of firefighters to help communities meet industry-minimum standards and attain 24-hour staffing to provide adequate protection from fire and fire-related hazards. Also authorized are grants to volunteer fire departments for recruitment and retention of volunteers. SAFER is administered by the Federal Emergency Management Agency (FEMA) of the Department of Homeland Security (DHS).", "On January 3, 2018, the President signed the United States Fire Administration, AFG, and SAFER Program Reauthorization Act of 2017 (P.L. 115-98). P.L. 115-98 extends the SAFER and AFG authorizations through FY2023; extends the sunset provisions for SAFER and AFG through September 30, 2024; provides that the U.S. Fire Administration (USFA) may develop and make widely available an online training course on SAFER and AFG grant administration; expands SAFER hiring grant eligibility to cover the conversion of part-time or paid-on-call firefighters to full-time firefighters; directs FEMA, acting through the Administrator of USFA, to develop and implement a grant monitoring and oversight framework to mitigate and minimize risks of fraud, waste, abuse, and mismanagement related to the AFG and SAFER grant programs; and makes various technical corrections to the SAFER and AFG statute.", "The Consolidated Appropriations Act, 2019 (P.L. 116-6) provided $700 million for firefighter assistance in FY2019, including $350 million for SAFER and $350 million for AFG. For FY2020, the Administration requested $688.688 million for firefighter assistance, including $344.344 million for SAFER and $344.344 million for AFG. This is the same amount the Administration requested in its FY2019 budget proposal and a 1.6% reduction from the FY2019 appropriation.", "An overall issue for the 116th Congress is how equitably and effectively grants are being distributed and used to protect the health and safety of the public and firefighting personnel against fire and fire-related hazards. Another continuing issue is budget appropriations for SAFER and AFG. As is the case with many federal programs, concerns over the federal budget deficit could impact budget levels for SAFER and AFG. At the same time, firefighter assistance budgets will likely receive heightened scrutiny from the fire service community, given the local budgetary shortfalls that many fire departments may face.", "Additionally, a continuing issue related to SAFER hiring grants has been whether SAFER statutory restrictions should be waived to permit grantees to use SAFER funds for retention and rehiring. Division F, Title III, Section 307 of the Consolidated Appropriations Act, 2018 stated that FEMA \"may\" grant SAFER waiver authority. However, for the 2018 round of SAFER awards, FEMA has chosen not to exercise that authority, and thus will not provide SAFER hiring grants for retaining or rehiring firefighters. The Consolidated Appropriations Act, 2019 (P.L. 116-6) also includes SAFER waiver authority for the FY2019 round of SAFER awards. The Administration's FY2020 budget proposal does not request SAFER waiver authority."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background and Genesis of SAFER", "paragraphs": ["Firefighting and the provision of fire protection services to the public is traditionally a local responsibility, funded primarily by state, county, and municipal governments. During the 1990s, however, shortfalls in state and local budgets\u2014coupled with increased responsibilities (i.e., counterterrorism) of local fire departments\u2014led many in the fire community to call for additional financial support from the federal government. Since enactment of the FIRE Act in the 106 th Congress, the Assistance to Firefighters Grants (AFG) program (also known as \"fire grants\" and \"FIRE Act grants\") has provided funding for equipment and training directly from the federal government to local fire departments.", "Since the fire grant program commenced in FY2001, funding has been used by fire departments to purchase firefighting equipment, personal protective equipment, and firefighting vehicles. Many in the fire-service community argued that notwithstanding the fire grant program, there remained a pressing need for an additional federal grant program to assist fire departments in the hiring of firefighters and the recruitment and retention of volunteer firefighters. They asserted that without federal assistance, many local fire departments would continue to be unable to meet national consensus standards for minimum staffing levels, which specify at least four firefighters per responding fire vehicle (or five or six firefighters in hazardous or high-risk areas). Fire-service advocates also pointed to the Community Oriented Policing Services (COPS) program as a compelling precedent of federal assistance for the hiring of local public safety personnel.", "In support of SAFER, fire-service advocates cited studies performed by the U.S. Fire Administration and the National Fire Protection Association, the Boston Globe , and the National Institute for Occupational Safety and Health (NIOSH) which concluded that many fire departments fall below minimum standards for personnel levels. According to these studies, the result of this shortfall can lead to inadequate response to different types of emergency incidents, substandard response times, and an increased risk of firefighter fatalities.", "On the other hand, those opposed to SAFER grants have contended that funding for basic local government functions\u2014such as paying for firefighter salaries\u2014should not be assumed by the federal government, particularly at a time of high budget deficits. Also, some SAFER opponents disagree that below-standard levels in firefighting personnel are necessarily problematic, and point to statistics indicating that the number of structural fires in the United States has continued to decline over the past 20 years."], "subsections": []}, {"section_title": "The SAFER Act", "paragraphs": ["In response to concerns over the adequacy of firefighter staffing, the Staffing for Adequate Fire and Emergency Response Act\u2014popularly called the \"SAFER Act\"\u2014was introduced into the 107 th and 108 th Congresses. The 108 th Congress enacted the SAFER Act as Section 1057 of the FY2004 National Defense Authorization Act ( P.L. 108-136 ; signed into law November 24, 2003). The SAFER provision was added as an amendment to S. 1050 on the Senate floor ( S.Amdt. 785 , sponsored by Senator Dodd) and modified in the FY2004 Defense Authorization conference report ( H.Rept. 108-354 ). The SAFER grant program is codified as Section 34 of the Federal Fire Prevention and Control Act of 1974 (15 U.S.C. 2229a).", "The SAFER Act authorizes grants to career, volunteer, and combination fire departments for the purpose of increasing the number of firefighters to help communities meet industry-minimum standards and attain 24-hour staffing to provide adequate protection from fire and fire-related hazards. Also authorized are grants to volunteer fire departments for activities related to the recruitment and retention of volunteers. "], "subsections": []}, {"section_title": "Fire Grants Reauthorization Act of 2012", "paragraphs": ["On January 2, 2013, the President signed P.L. 112-239 , the FY2013 National Defense Authorization Act. Title XVIII, Subtitle A is the Fire Grants Reauthorization Act of 2012, which significantly amended the SAFER statute (15 U.S.C. 2229a) and authorized the SAFER program through FY2017. Table 1 provides a summary of key SAFER provisions in the 2012 reauthorization, and provides a comparison with the previous version of the SAFER statute.", "Two types of grants are authorized by the SAFER Act: hiring grants and recruitment and retention grants. Hiring grants cover a three-year term and are cost shared with the local jurisdiction. According to the amended statute, the federal share shall not exceed 75% in the first year of the grant, 75% in the second year, and 35% in the third year. While the majority of hiring grants will be awarded to career and combination fire departments, the SAFER Act specifies that 10% of the total SAFER appropriation be awarded to volunteer or majority-volunteer departments for the hiring of personnel.", "Additionally, at least 10% of the total SAFER appropriation is set aside for recruitment and retention grants , which are available to volunteer and combination fire departments for activities related to the recruitment and retention of volunteer firefighters. Also eligible for recruitment and retention grants are local and statewide organizations that represent the interests of volunteer firefighters. No local cost sharing is required for recruitment and retention grants."], "subsections": []}, {"section_title": "Fire Grants Reauthorization in the 115th Congress", "paragraphs": ["With the authorizations of both the AFG and SAFER programs expiring on September 30, 2017, and with sunset dates for both programs of January 2, 2018, the 115 th Congress considered reauthorization legislation."], "subsections": [{"section_title": "Senate", "paragraphs": ["On April 5, 2017, S. 829 , the AFG and SAFER Program Reauthorization Act of 2017, was introduced by Senator McCain and referred to the Committee on Homeland Security and Governmental Affairs. On May 17, 2017, the committee ordered S. 829 to be reported ( S.Rept. 115-128 ) with an amendment in the nature of a substitute. On August 2, 2017, the Senate passed S. 829 by unanimous consent."], "subsections": []}, {"section_title": "House", "paragraphs": ["On July 12, 2017, the House Subcommittee on Research and Technology, Committee on Science, Space and Technology, held a hearing entitled U.S. Fire Administration and Fire Grant Programs Reauthorization: Examining Effectiveness and Priorities . Testimony was heard from the USFA acting administrator and from fire service organizations.", "On December 15, 2017, H.R. 4661 , the United States Fire Administration, AFG, and SAFER Program Reauthorization Act of 2017, was introduced by Representative Comstock. H.R. 4661 was identical to the Senate-passed S. 829 , except that while S. 829 repealed the sunset provisions for AFG and SAFER, H.R. 4661 extended the sunset dates to September 30, 2024. Additionally, H.R. 4661 reauthorized the USFA through FY2023. ", "On December 18, 2017, the House passed H.R. 4661 by voice vote under suspension of the rules. On December 21, 2017, the Senate passed H.R. 4661 without amendment by unanimous consent.", "Other legislation related to SAFER reauthorization included H.R. 3881 , the AFG and SAFER Program Reauthorization Act of 2017, introduced by Representative Pascrell, which was identical to S. 829 as passed by the Senate."], "subsections": []}, {"section_title": "United States Fire Administration, AFG, and SAFER Program Reauthorization Act of 2017 (P.L. 115-98)", "paragraphs": ["On January 3, 2018, the President signed the United States Fire Administration, AFG, and SAFER Program Reauthorization Act of 2017 ( P.L. 115-98 ). P.L. 115-98", "extends the SAFER and AFG authorizations through FY2023; extends the sunset provisions for SAFER and AFG through September 30, 2024; extends the USFA authorization through FY2023; provides that the U.S. Fire Administration in FEMA may develop and make widely available an online training course on SAFER and AFG grant administration; expands SAFER hiring grant eligibility to cover the conversion of part-time or paid-on-call firefighters to full-time firefighters; directs FEMA, acting through the Administrator of USFA, to develop and implement a grant monitoring and oversight framework to mitigate and minimize risks of fraud, waste, abuse, and mismanagement related to the SAFER and AFG grant programs; and makes various technical corrections to the SAFER and AFG statute."], "subsections": []}]}, {"section_title": "Appropriations", "paragraphs": ["The SAFER grant program receives its annual appropriation through the House and Senate Appropriations Subcommittees on Homeland Security. Within the appropriations bills, SAFER is listed under the line item, \"Firefighter Assistance Grants,\" which is located in Title III\u2014Protection, Preparedness, Response, and Recovery. \"Firefighter Assistance Grants\" also includes the Assistance to Firefighters Grant Program.", "Although authorized for FY2004, SAFER did not receive an appropriation in FY2004. Table 2 shows the appropriations history for firefighter assistance, including SAFER, AFG, and the Fire Station Construction Grants (SCG) grants provided in the American Recovery and Reinvestment Act (ARRA). Table 3 shows recent and proposed appropriated funding for the SAFER and AFG grant programs."], "subsections": [{"section_title": "FY2017", "paragraphs": ["For FY2017, the Administration requested $335 million for SAFER and $335 million for AFG, a reduction of $10 million for each program from the FY2016 enacted level. According to the budget request, the proposed reduction in SAFER and AFG \"reflects FEMA's successful investments in prior year grants awarded.\" The Administration's FY2017 budget did not request SAFER waiver authority for FY2017.", "Under the proposed budget, the SAFER and AFG grant accounts would be transferred to the Preparedness and Protection activity under FEMA's broader \"Federal Assistance\" account. According to the budget request, Federal Assistance programs will \"assist Federal agencies, States, Local, Tribal, and Territorial jurisdictions to mitigate, prepare for and recover from terrorism and natural disasters.\" ", "On May 26, 2016, the Senate Appropriations Committee approved S. 3001 , the Department of Homeland Security Act, 2017. The Senate bill would provide $680 million for firefighter assistance, including $340 million for SAFER and $340 million for AFG. The committee maintained a separate budget account for Firefighter Assistance and did not transfer that budget account to the Federal Assistance account as proposed in the Administration budget request. In the accompanying report ( S.Rept. 114-68 ), the committee directed DHS to continue the present practice of funding applications according to local priorities and those established by the USFA, and to continue direct funding to fire departments and the peer review process. The committee stated its expectation that funding for rural fire departments remain consistent with their previous five-year history, and encouraged FEMA to consider the need for resources for staffing grants to rural departments that meet both local and regional needs. ", "On June 22, 2016, the House Appropriations Committee approved its version of the Department of Homeland Security Appropriations Act, 2017. Unlike the Senate, the House committee did transfer the Firefighter Assistance budget account into a broader Federal Assistance account in FEMA. The bill provided $690 million for firefighter assistance, including $345 million for SAFER and $345 million for AFG. In the committee report, the committee directed FEMA to continue administering the fire grants programs as directed in prior year committee reports. ", "The Consolidated Appropriations Act, 2017 ( P.L. 115-31 ) provided $690 million for firefighter assistance in FY2017, including $345 million for SAFER and $345 million for AFG. The firefighter assistance account is transferred to FEMA's broader Federal Assistance account."], "subsections": []}, {"section_title": "FY2018", "paragraphs": ["For FY2018, the Administration requested $688.688 million for firefighter assistance, including $344.344 million for SAFER and $344.344 million for AFG, slightly below the FY2017 level. SAFER and AFG are under Grants in the Federal Assistance budget account.", "On July 18, 2017, the House Appropriations Committee approved the Department of Homeland Security Appropriations Act, 2018 ( H.R. 3355 ; H.Rept. 115-239 ). The bill provided $690 million for firefighter assistance under the Federal Assistance budget account, including $345 million for SAFER and $345 million for AFG. In the bill report, the committee encouraged FEMA to give high-priority consideration to grants providing for planning, training, and equipment to firefighters for crude oil-by-rail and ethanol-by-rail derailment and incident response. ", "On September 14, 2017, the House passed H.R. 3354 , a FY2018 omnibus appropriations bill that includes funding for SAFER and AFG. During floor consideration, the House adopted an amendment offered by Representative Kildee that added $20 million to SAFER; thus H.R. 3354 would provide $365 million for SAFER and $345 million for AFG.", "The Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) provided $700 million for firefighter assistance in FY2018, including $350 million for SAFER and $350 million for AFG. Money is to remain available through September 30, 2019."], "subsections": []}, {"section_title": "FY2019", "paragraphs": ["For FY2019, the Administration requested $688.688 million for firefighter assistance, including $344.344 million for SAFER and $344.344 million for AFG. ", "On June 21, 2018, the Senate Appropriations Committee approved S. 3109 , the Department of Homeland Security Appropriations Act, 2019 ( S.Rept. 115-283 ). The Senate bill would provide $700 million for firefighter assistance, including $350 million for SAFER and $350 million for AFG.", "On July 25, 2018, the House Appropriations Committee approved its version of the FY2019 Homeland Security appropriations bill ( H.R. 6776 ; H.Rept. 115-676 ). The House bill would also provide $700 million for firefighter assistance, including $350 million for SAFER and $350 million for AFG. Unlike the Senate bill, the House bill would continue SAFER waiver authority.", "The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provided $700 million for firefighter assistance in FY2019, including $350 million for SAFER and $350 million for AFG, with funds to remain available through September 30, 2020. Division A, Title III, Section 307 of P.L. 116-6 includes SAFER waiver authority which FEMA would be able to implement (if it so chose) for the FY2019 round of SAFER awards."], "subsections": []}, {"section_title": "FY2020", "paragraphs": ["For FY2020, the Administration requested $688.688 million for firefighter assistance, including $344.344 million for SAFER and $344.344 million for AFG. This is the same amount the Administration requested in its FY2019 budget proposal and a 1.6% reduction from the FY2019 appropriation. The Administration's FY2020 budget proposal does not request SAFER waiver authority."], "subsections": []}]}, {"section_title": "Waiver of SAFER Requirements", "paragraphs": ["In 2009, with the economic turndown adversely affecting budgets of local governments, concerns arose that modifications to the SAFER statute may be necessary to enable fire departments to more effectively participate in the program. The American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ) included a provision (\u00a7603) that waived the matching requirements for SAFER grants awarded in FY2009 and FY2010. ", "Subsequently, the FY2009 Supplemental Appropriations Act ( P.L. 111-32 ) included a provision (\u00a7605) giving the Secretary of Homeland Security authority to waive certain limitations and restrictions in the SAFER statute. For grants awarded in FY2009 and FY2010, waivers permitted grantees to use SAFER funds to rehire laid-off firefighters and fill positions eliminated through attrition, allow grants to extend longer than the five-year duration, and permit the amount of funding per position at levels exceeding the limit of $100,000. ", "The Department of Defense and Continuing Appropriations Act, 2011 ( P.L. 112-10 ) contained language that removed cost-share requirements and allowed SAFER grants to be used to rehire laid-off firefighters and fill positions eliminated through attrition. However, the law did not remove the requirement that SAFER grants fund a firefighter position for four years, with the fifth year funded wholly by the grant recipient. P.L. 112-10 also did not waive the cap of $100,000 per firefighter hired by a SAFER grant. According to fire service advocates, these unwaived SAFER requirements (the mandatory five-year position duration, the $100,000 cap) would be a disincentive for many communities to apply for SAFER grants, because localities would be reluctant to apply for grants that would require future expenditure of local funds.", "P.L. 112-74 , the Consolidated Appropriations Act, FY2012, included language (\u00a7561) prohibiting using any funds to enforce all of the SAFER restrictions that have been lifted since FY2009. Additionally, Section 562 of P.L. 112-74 reinstated DHS waiver authority for the restrictions that were not lifted in the FY2011 appropriations bill ( P.L. 112-10 ). ", "Meanwhile, the SAFER reauthorization language in the Fire Grants Reauthorization Act of 2012 ( P.L. 112-239 ) removed the $100,000 cap per firefighter hired, shortened the grant period from four to three years, removed the requirement to retain SAFER-hired firefighters for one year past the termination of federal grant support, and provided economic hardship waivers that will give DHS the authority to waive matching requirements and prohibitions on using SAFER funds for rehiring laid-off firefighters and filling positions eliminated through attrition.", "The Consolidated and Further Continuing Appropriations Act, 2013 ( P.L. 113-6 ) and the Consolidated Appropriations Act, 2014 ( P.L. 113-76 ) continued to grant DHS waiver authority from SAFER requirements. Specifically, DHS was allowed to waive cost sharing requirements, the three-year grant term, cost limits per firefighter hired, and the prohibition on using SAFER funds for rehiring laid-off firefighters and filling positions eliminated through attrition. ", "The same SAFER waiver authority was included in the Administration's FY2015 budget proposal and in the FY2015 House and Senate Department of Homeland Security Appropriations bills. In the bill report accompanying H.R. 4903 ( H.Rept. 113-481 ), the House Appropriations Committee noted that this annual waiver authority has been available since FY2009, and that the reauthorization of the SAFER program by the 112 th Congress ( P.L. 112-239 ) provided FEMA with permanent authority to waive certain matching and nonsupplantation requirements for grantees based on a determination that a grantee meets economic hardship criteria. Given that FEMA had been working with stakeholders to develop these criteria and that the agency hoped to soon be able to implement its new waiver authority, the committee expected that FY2015 would be the last instance in which annual waiver authority would be provided, and that any waivers in future fiscal years would be limited to the authorization provided in P.L. 112-239 .", "The Department of Homeland Security Appropriations Act, 2015 ( P.L. 114-4 ) was signed by the President on March 4, 2015. Section 557 of P.L. 114-4 provided SAFER waiver authority for FY2015. ", "The Administration's FY2016 budget would have maintained SAFER waiver authority for FY2016. S. 1619 , the Department of Homeland Security Act, 2016, would also have continued waiver authority. The accompanying bill report ( S.Rept. 114-68 ) directed FEMA to work with stakeholders and present a recommendation to the Senate Appropriations Committee on the feasibility of removing these waivers in future appropriations. However, neither the House bill ( H.R. 3128 ), nor the final Consolidated Appropriations Act, 2016 ( P.L. 114-113 ) contained the SAFER waiver provision for FY2016. ", "The Administration's FY2017, FY2018, and FY2019 budgets did not request SAFER waiver authority, and neither the House nor Senate Appropriations Committee bills contained SAFER waiver provisions. However, Section 307 of the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) again contained the previous waiver authority provision, stating that FEMA \"may\" grant SAFER waiver authority to allow SAFER funds for retaining and rehiring firefighters. However, for the 2018 round of SAFER awards, FEMA chose not to exercise that authority, and thus will not provide SAFER hiring grants for retaining or rehiring firefighters.", "The House FY2019 Homeland Security appropriations bill would have continued the waiver authority in FY2019, while the Senate FY2019 Homeland security appropriations bill did not include the SAFER waiver authority provision. Ultimately, the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) included SAFER waiver authority for the FY2019 round of SAFER awards. The Administration's FY2020 budget proposal does not request SAFER waiver authority."], "subsections": []}, {"section_title": "Implementation of the SAFER Program", "paragraphs": ["For the latest information and updates on the application for and awarding of SAFER grants, see the official SAFER grant program website at https://www.fema.gov/staffing-adequate-fire-emergency-response-grants .", " Table 4 shows the state-by-state distribution of SAFER grant funds, from FY2005 through FY2017. Table 5 shows the percentage distribution of SAFER grant funds by type of department (career, combination, volunteer) for FY2009 through FY2014, while Table 6 shows the percentage distribution of SAFER grant funds by community service area (urban, suburban, rural) for FY2009 through FY2014. Of the FY2014 SAFER awards, grants for hiring accounted for 90% of the total federal share of dollars awarded, while recruitment and retention accounted for 10%. ", "During 2014 and 2015, the DHS Office of the Inspector General (OIG) conducted an audit of SAFER grants for fiscal years 2010 through 2012. On June 8, 2016, the DHS OIG released its report finding that 63% of SAFER grant recipients over that period did not comply with grant guidance and requirements to prevent waste, fraud, and abuse of grant funds. The report recommended that FEMA's Grant Programs Directorate develop and implement an organizational framework to manage the risk of fraud, waste, abuse, and mismanagement. According to the report, FEMA has concurred with the OIG findings and has taken corrective actions to resolve the recommendations. ", "Meanwhile, the Fire Grants Reauthorization Act of 2012 ( P.L. 112-239 ) directed GAO to prepare a report to Congress that includes an assessment of the effect of the changes made by P.L. 112-239 on the effectiveness, relative allocation, accountability, and administration of the fire grants. GAO was also directed to evaluate the extent to which those changes have enabled grant recipients to mitigate fire and fire-related and other hazards more effectively. In September 2016, GAO released its report, entitled Fire Grants: FEMA Could Enhance Program Administration and Performance Assessment. The report concluded that FEMA's fire grant policies and the awards made in FY2013 and FY2014 generally reflected the changes to the fire grant statute made by P.L. 112-239 , and that FEMA enhanced its assessment of program performance by establishing and reporting on measures of effectiveness of the grants. However, GAO also concluded that those performance measures do not include measurable performance targets linked to SAFER and AFG program goals, and that \"aligning the fire grants programs' use of data on, and definitions of, critical infrastructure to award fire grants and assess program performance with the more objective, quantitative approach used by DHS and GPD [the Grants Program Directorate] for other programs and non-fire preparedness grants could enhance GPD's efforts to integrate the fire grants program into larger national preparedness efforts and more objectively assess the impact of fire grants.\""], "subsections": []}, {"section_title": "Impact of 2018-2019 Government Shutdown", "paragraphs": ["Firefighter assistance grants were impacted by the partial government shutdown. FEMA personnel who administer the grants were furloughed. For all three grant programs (AFG, SAFER, and FP&S) the application and awards process was delayed. For the 2018 awards round, the application windows for AFG and FP&S closed in October and December 2018, respectively, but the processing of those applications could not move forward. The opening of the 2018 round application window for SAFER grants was also delayed. ", "For grants already awarded (in the 2017 and previous rounds), grant recipients periodically draw down funds, either to reimburse expenditures already incurred, or in immediate advance of those expenditures. Grant recipients were unable to draw down funds during the shutdown, which may have disrupted the ability of the grantees to continue grant-funded activities, including personnel costs covered by SAFER grant awards, which extend for three years. This disruption may continue after the government shutdown has resolved due to a backlog of payment requests that need to be processed once furloughed FEMA grant personnel return to work."], "subsections": []}, {"section_title": "Issues in the 116th Congress", "paragraphs": ["SAFER grants are distributed to career, volunteer, combination, and paid-on-call fire departments serving urban, suburban, and rural areas. A continuing issue is how equitably and effectively grants are being distributed and used to protect the health and safety of the public and firefighting personnel against fire and fire-related hazards.", "Another continuing issue is budget appropriations for SAFER and AFG. As is the case with many federal programs, concerns over the federal budget deficit could impact budget levels for SAFER and AFG. At the same time, firefighter assistance budgets will likely receive heightened scrutiny from the fire service community, given the local budgetary shortfalls that many fire departments may face. "], "subsections": []}]}}
{"id": "RL33275", "title": "The LIHEAP Formula", "released_date": "2019-05-02T00:00:00", "summary": ["The Low Income Home Energy Assistance Program (LIHEAP) provides funds to states, the District of Columbia, U.S. territories and commonwealths, and Indian tribal organizations (collectively referred to as grantees) primarily to help low-income households pay home energy expenses. The LIHEAP statute provides for two types of funding: regular funds (sometimes referred to as block grant funds) and emergency contingency funds. Regular funds are allocated to grantees based on a formula, while emergency contingency funds may be released to one or more grantees at the discretion of the Secretary of the Department of Health and Human Services (HHS) based on emergency need. This report focuses on the way in which regular funds are distributed.", "Regular LIHEAP funds are allocated to the states according to a formula that has a long and complicated history. (Tribes receive a share of state funding, while a percentage of regular funds is set aside for territories.) Prior to enactment of LIHEAP, in 1981, a series of predecessor energy assistance programs focused on the heating needs of cold weather states. This focus was in part the result of high heating oil prices throughout the 1970s. When LIHEAP was enacted, it adopted the formula of its immediate predecessor program, the Low Income Energy Assistance Program (LIEAP). Funds under LIEAP were distributed according to a multi-step formula that was more favorable to colder-weather states. The LIHEAP statute specified that states would continue to receive the same percentage of regular funds that they did under the LIEAP formula. This is sometimes referred to as the \"old\" LIHEAP formula.", "After several years, when Congress reauthorized LIHEAP in 1984 it changed the program's formula by requiring the use of more recent population and energy data (data were not updated under the \"old\" formula) and reducing the emphasis on heating needs. The effect of these changes meant that, in general, some funding would be shifted from colder-weather states to warmer-weather states. (Using FY2019 formula data, the figure below shows which states receive a greater share of funds under the \"new\" and \"old\" formulas.) To prevent a dramatic shift of funds, Congress added two \"hold-harmless\" provisions to the formula. The percentage of funds that states receive under the formula enacted in 1984 is sometimes referred to as the \"new\" formula.", "New formula data is used to calculate state allotments when appropriations for LIHEAP regular funds exceed approximately $2 billion. In the years following the enactment of the \"new\" LIHEAP formula, appropriations did not reach this level, so until the mid-2000s funds were largely distributed according to the \"old\" formula percentages. However, in FY2006, and in FY2009 through FY2019, regular fund appropriations have ranged from $2.5 billion to $4.5 billion, and the \"new\" formula has been incorporated into the way in which funds are distributed to the states. Notably, however, since FY2009 Congress has limited the operation of the \"new\" formula by requiring that the majority of regular funds be distributed using \"old\" formula percentages. For distributions to the states from FY2009-FY2019, see Table C-1."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction to LIHEAP", "paragraphs": ["The Low Income Home Energy Assistance Program (LIHEAP) is a block grant program administered by the Department of Health and Human Services (HHS) under which the federal government gives annual grants to states, the District of Columbia, U.S. territories and commonwealths, and Indian tribal organizations to operate multi-component home energy assistance programs for needy households. Established in 1981 by Title XXVI of P.L. 97-35 , the Omnibus Budget Reconciliation Act, LIHEAP has been reauthorized and amended a number of times, most recently in 2005, when P.L. 109-58 , the Energy Policy Act, authorized annual regular LIHEAP funds at $5.1 billion per year from FY2005 through FY2007.", "The federal LIHEAP statute has very broad guidelines, with many decisions regarding the program's operation made by the states. Recipients may be helped with their heating and cooling costs, receive crisis assistance, have weatherizing expenses paid, or receive other aid designed to reduce their home energy needs. Households with incomes up to 150% of the federal poverty income guidelines or, if greater, 60% of the state median income, are federally eligible for LIHEAP benefits. States may adopt lower income limits, but no household with income below 110% of the poverty guidelines may be considered ineligible. ", "The LIHEAP statute provides for two types of program funding: regular funds\u2014sometimes referred to as block grant funds\u2014and emergency contingency funds. Regular funds are allotted to states on the basis of the LIHEAP statutory formula, which was enacted as part of the Human Services Reauthorization Act of 1984 ( P.L. 98-558 ). The way in which regular funds are allocated to states depends on the amount of funds appropriated by Congress. The second type of LIHEAP funds, emergency contingency funds, last appropriated in FY2011, may be released and allotted to one or more states at the discretion of the President and the Secretary of HHS. The funds may be released at any point in the fiscal year to meet additional home energy assistance needs created by a natural disaster or other emergency.", "For more information on LIHEAP more generally, see CRS Report RL31865, LIHEAP: Program and Funding , by Libby Perl. The remainder of this report discusses only the history and methods of distributing regular LIHEAP funds to the states. Funds for tribes are included in each state's formula allocations and are distributed at the state level based on eligible tribal members. Territories receive funds separately as a percentage set aside of regular funds, so neither tribes nor territories are included in the formula discussion."], "subsections": []}, {"section_title": "LIHEAP Formula Basics", "paragraphs": ["The current statutory LIHEAP formula was enacted in 1984 as part of P.L. 98-558 , the Human Services Reauthorization Act. The statutory formula replaced a formula from a predecessor program to LIHEAP, the Low Income Energy Assistance Program (LIEAP), which was active for one year (FY1981) prior to enactment of LIHEAP. The LIEAP formula emphasized the heating needs of cold-weather states. When Congress changed the LIHEAP formula in 1984, there were two primary differences from the previous formula: home heating needs were not emphasized to the same degree, and the law provided that HHS use the most recent data available to calculate allotments (the LIEAP formula used static data to distribute funds to the states). ", "For more information about both the history of energy assistance formulas from the 1970s through enactment of LIHEAP as well as the enactment of the statutory formula, see Appendix D ."], "subsections": [{"section_title": "What Is the \"Old\" LIHEAP Formula?", "paragraphs": ["The term \"old\" LIHEAP formula refers to the way in which regular funds were distributed using the formula under LIEAP, which was then adopted by LIHEAP when it was enacted. Congress directed that LIEAP state allocations be determined using a complex combination of alternate formulas and factors that included residential energy expenditures, a measure of \"coldness\" called heating degree days, and household income. Further, as specified in law, the data for each factor were either from a particular year or measured a change over a particular period of time, so the data inputs did not change. See Table D-2 for LIEAP formula data.", "The result of the LIEAP combination of formulas was that each state was assigned a static percentage of funds that did not change from one year to the next. For example, Minnesota received approximately 4.0% of total LIHEAP funds under this formula, and Florida received not-quite 1.4% of the total. See column (a) of Table 1 for each state's share of funds under the \"old\" LIHEAP formula. "], "subsections": []}, {"section_title": "What is the \"New\" LIHEAP Formula?", "paragraphs": ["The term \"new\" LIHEAP formula refers to the way in which funds are to be distributed via the statutory formula enacted as part of P.L. 98-558 . The statute provides that each state's share of funds is to be based on low-income household expenditures on home energy in the state. See the statutory language in the text box, below.", "Based on the statutory language, HHS calculates heating and cooling consumption and expenditures by low-income households in each state, with the numbers updated each year. (See \" Calculating the New Formula Percentages ,\" later in this report, for more details about how the formula rates are calculated.) Each state's share is then based on the ratio of low-income household expenditures on home energy for the state to all expenditures of low-income households in the country. For example, when formula data were updated in FY2019, Minnesota's share of funds under the \"new\" formula was approximately 1.9% of the total and Florida's was about 4.4%. See column (b) of Table 1 for FY2019 formula shares.", "However, unlike under the \"old\" formula, states do not necessarily receive their \"new\" formula percentage share of funds. As can be seen from the Minnesota and Florida examples, the implementation of the \"new\" LIHEAP formula meant that some states saw their share of funding reduced, while others saw their share increased. As a result, Congress included in the statutory formula two \"hold harmless\" provisions to make sure that states that saw their shares of total funds decrease were prevented from dramatic drops in funding. The hold harmless provisions operate so that states that gain the most funding have their share reduced to compensate states that lose funding. See \" Using the \"New\" Formula Percentages to Allocate Funds to the States ,\" later in this report, for a more detailed description about how the hold-harmless provisions operate."], "subsections": []}, {"section_title": "The LIHEAP Formula and Congressional Appropriations", "paragraphs": ["In the 25 years after the enactment of the \"new\" LIHEAP formula, Congress, with few exceptions, did not appropriate sufficient regular funds to require use of \"new\" formula data. Because of the hold-harmless provisions in the statutory formula, appropriations must exceed approximately $2 billion before the \"new\" formula percentages are used. During these years, the \"old\" formula percentages (found in column (a) of Table 1 ) were used to distribute LIHEAP funds to the states.", "Starting in FY2009, appropriations for LIHEAP regular funds have exceeded $2 billion, ranging from $3.3 billion to $4.5 billion over the last 10 years. However, the \"new\" formula has not operated as is provided for in the statute. Instead, Congress has directed, in appropriations language, that a portion of funds be distributed using the \"new\" formula, and the remainder using the \"old\" formula. For example, in FY2019 P.L. 115-245 provided that $716 million be distributed according to the \"new\" formula, and the remainder, about $2.96 billion (after deducting funds for the territories and training and technical assistance), distributed using the \"old\" formula percentages. For allocations to the states from FY2009-FY2019, see Appendix C .", "The next section of this report (\" Determining State LIHEAP Allotments Using the \"New\" Formula \") goes into additional detail about how the \"new\" formula operates, while Appendix D explains more about the history of the \"old\" LIHEAP formula."], "subsections": []}]}, {"section_title": "Determining State LIHEAP Allotments Using the \"New\" Formula", "paragraphs": ["The LIHEAP statutory formula provides for three different methods to calculate each state's allotment of regular LIHEAP funds. The calculation method used to determine state allotments depends upon the size of the appropriation in a particular year. ", "If the annual appropriation level is at or below the equivalent of a hypothetical FY1984 appropriation of $1.975 billion, then the \"old \"LIHEAP formula percentages apply. If appropriations exceed a hypothetical FY1984 appropriation of $1.975 billion, then \"new\" formula percentages apply and are used to calculate state allotments. To calculate the new formula percentages, HHS determines the heating and cooling costs of low-income households in each state. If the appropriation is less than $2.25 billion, the new formula percentages are used together with a hold-harmless level that prevents states from falling below the amount they would have received at the hypothetical FY1984 appropriations level. Finally, if appropriations equal or exceed $2.25 billion, the \"new\" percentages apply, as does the hold-harmless level, and, in addition, a hold-harmless rate increases the \"new\" formula percentage for certain states.", "This section describes the steps involved in allocating LIHEAP funds to the states under each of the appropriations triggers."], "subsections": [{"section_title": "Calculating the New Formula Percentages", "paragraphs": ["The LIHEAP formula uses the home energy expenditures of low-income households in each state as a first step in determining the amount of total regular funds that each state will receive. Specifically, this means estimating the amount of money that all low-income households (as defined by the LIHEAP statute) in each state spend on heating and cooling from all energy sources. This method accounts for variations in heating and cooling needs of the states, the types of energy used, energy prices, and the low-income population and their heating and cooling methods. Further, as mentioned in the previous section, the \"new\" formula requires HHS to determine allocations \"on the basis of the most recent satisfactory data available to the Secretary.\" HHS updates these data annually. The most recent data were provided to CRS in 2019. ", "The process for capturing the expenditures of low-income households involves the following steps:", "Total Residential Energy Consumption. The first step in calculating new formula rates is determining total residential energy consumption for each heating and cooling source in every state. Residential energy consumption is usually measured in terms of the total amount of British Thermal Units (Btus) used in private households and generally captures energy used for space and water heating, cooling, lighting, refrigeration, cooking, and the energy needed to operate appliances. The most recent data used in calculating LIHEAP formula rates come from the 2016 Energy Information Administration (EIA) State Energy Data System consumption estimates. Temperature Variation. The next step in determining the formula rates involves adjusting the amount of energy consumed for each fuel source by temperature variation in each state. This is done by using a ratio consisting of the 30-year average heating and cooling degree day data to each state's share of the most recent year's average heating and cooling degree days. A heating degree day measures the extent to which a day's average temperature falls below 65\u00b0F and a cooling degree day measures the extent to which a day's average temperature rises above 65\u00b0F. For example, a day with an average temperature of 50\u00b0F results in a measure of 15 heating degree days; a day with an average temperature of 80\u00b0F results in a measure of 15 cooling degree days. The purpose of the adjustment to fuel consumption is to account for abnormally warm or cool years, where energy usage might attain extreme values. This information is collected by the National Oceanic and Atmospheric Administration. The most recent year's average heating and cooling degree day data are from 2016, and the 30-year average was computed from 1971 to 2000. Heating and Cooling Consumption. As mentioned above, total residential energy consumption encompasses other uses in addition to heating and cooling (e.g., operation of appliances). So the next step in calculating LIHEAP formula rates is to derive the portion of fuel consumed specifically to heat and cool homes as opposed to other uses. The EIA, as part of the Residential Energy Consumption Survey (RECS), uses an \"end use estimation methodology\" to estimate the amount of fuel used for heating and cooling (among other uses). The most recent information on heating and cooling consumption comes from the 2009 RECS. HHS adjusts the EIA heating and cooling consumption estimates using heating degree day and cooling degree day data. Low-Income Household Heating and Cooling Consumption. After estimating heating and cooling consumption for all households, the next step is to calculate heating and cooling consumption in Btus for low-income households. HHS uses Census data to determine fuel sources used by low-income households. The most recent information on low-income households and the fuel sources they use comes from the American Community Survey five-year estimates for 2012-2016. In addition, low-income consumption data are adjusted to account for the fact that low-income households might use more or less of a fuel source than is used by households on average. This is done using consumption data from the 2009 RECS. Total Spending on Heating and Cooling. To arrive at the amount of money that low-income households spend on heating and cooling, the number of Btus used by low-income households that were estimated in the previous step are multiplied by the average fuel price for each fuel source. The total amount spent on heating and cooling by low-income households for each fuel source is then added together to arrive at total spending for each state. Regional energy price variation can be significant, and the formula takes expected expenditure differences into account. This information is collected by the EIA and published in the State Energy Data System Consumption, Price, and Expenditure Estimates. The most recent price data used to calculate formula rates are from 2016. New Formula Percentage. Finally, these expenditure data are used to estimate the amount spent by low-income households on heating and cooling in each state relative to the amount spent by low-income households on heating and cooling in all states. The calculated proportion becomes the new formula percentage for each state. Table 1 at the end of this section shows both the percentages under the \"old\" formula (column (a)) and the most recent \"new\" formula percentages (column (b)), received by CRS from HHS in 2019. To see how the formula rates for each state have changed in recent years, see Table 2 .", "These new formula percentages are used to allocate LIHEAP funds to the states if the annual appropriation exceeds the equivalent of a hypothetical FY1984 appropriation of $1.975 billion. However, they do not represent the exact percentage of funds that all states will receive under the new formula. The ultimate allotments are determined after application of both the hold-harmless level and hold-harmless rate, described in the next section. The new percentages are the starting point for determining how funds will be allocated to the states."], "subsections": []}, {"section_title": "Using the \"New\" Formula Percentages to Allocate Funds to the States", "paragraphs": ["The LIHEAP \"new\" formula percentages that HHS calculates using the most recent satisfactory data available do not necessarily represent the percentage of funds that states will receive. State allotments depend upon the application of the two hold-harmless provisions in the LIHEAP statute. Some states must have their share of funds ratably reduced in order to hold harmless those states that would, but for the hold-harmless provisions, lose funds. Other states see a gain in their share of funds because they benefit from the hold-harmless provisions. The application of the hold-harmless provisions depends upon the size of the appropriation for a given fiscal year. These appropriation level triggers are described below."], "subsections": [{"section_title": "\"Old\" Formula: Appropriations at or Below $1.975 Billion", "paragraphs": ["The LIHEAP statute does not contain an explicit trigger for the \"new\" formula rates to be used. However, the statute specifies that states must receive no less than \"the amount of funds the State would have received in fiscal year 1984 if the appropriations for this subchapter for fiscal year 1984 had been $1,975,000,000.\" As a result, up to this appropriation level, states receive the same percentage of funds that they would have received at a given appropriation level under the \"old\" LIHEAP formula. ", "The FY1984 appropriation of $1.975 billion referred to in the LIHEAP statute is hypothetical because this was not the amount actually appropriated in FY1984. The actual FY1984 appropriation was $2.075 billion. In addition, the current year appropriation that is \"equivalent to\" a hypothetical FY1984 appropriation of $1.975 billion is not exactly $1.975 billion. In FY1984, with the exception of funds provided to the territories, all LIHEAP regular funds were distributed to the states. Since then, two other funds have become part of the regular fund distribution. These are funds for training and technical assistance (TTA) and for the leveraging incentive (LI) grants (which includes REACH grants) to the states. This means that an appropriation that is equivalent to a hypothetical FY1984 appropriation of $1.975 billion must account for these new funds. For example, in FY2019, Congress appropriated $2.988 million for TTA and no funding for LI /REACH, so the equivalent of an FY1984 appropriation of $1.975 billion is approximately $1.978 billion.", "The LIHEAP formula in FY1984 distributed funds by giving states the same percentage of funds that they received in FY1981 under the predecessor program, the Low Income Energy Assistance Program (LIEAP). Table 1 shows rates under the old formula in column (a). For example, at an appropriation at or below the equivalent of a hypothetical FY1984 appropriation of $1.975 billion, Alabama would receive 0.86% of total funds, Alaska would receive 0.55% of total funds, and so on. Table A-1 , column (a), reports the dollar amount of funds that each state would have received in FY1984 had the regular fund appropriation been $1.975 billion. For comparison purposes, the dollar amounts also assume that funds for the territories would be 0.5% of the total, a change made by HHS beginning with the FY2014 appropriation."], "subsections": []}, {"section_title": "\"New\" Formula with Hold-Harmless Level: Appropriations Between $1.975 Billion and $2.25 Billion", "paragraphs": ["If the regular LIHEAP appropriation exceeds the equivalent of a hypothetical FY1984 appropriation of $1.975 billion for the fiscal year, all funds are to be distributed under a different methodology, using the new set of percentages described earlier. In addition, a hold-harmless level applies to ensure that certain states do not fall below the amount of funds they would have received at the equivalent of a hypothetical FY1984 appropriation of $1.975 billion. ", " Table 1 shows whether a state benefits from the hold-harmless level. This is indicated by a \"Y\" in column (c), while the dollar amount of funds those states receive by being held harmless appears in column (d). For example, Alabama is not held harmless, while Colorado is held harmless. The dollar amount of funds that Colorado receives pursuant to the hold-harmless level is $31.613 million. But for the hold-harmless level, Colorado would receive less than this dollar amount at its new formula percentage at certain appropriation levels. Eventually, when appropriations increase sufficiently, the percentage of funds under the new formula for hold-harmless states will exceed their hold harmless amounts and they will begin to receive their new percentage of funds. This appropriation level varies for each state. For example, at lower appropriation levels, the $31.613 million hold-harmless level for Colorado exceeds the state's new percentage share of 1.438% of total funds. However, by the time appropriations reach $2.25 billion, Colorado's new percentage share exceeds $31.613 million and the state begins to receive funds at the new percentage. Eventually, many states will receive the percentage of funds at their new percentage.", "The hold-harmless level is achieved by reducing the allocation of funds to states with the greatest proportional gains under the new formula percentages. For example, under the most recent LIHEAP formula percentages, states with the greatest proportional gains were Nevada, Arizona, and Texas. Depending on the appropriation level, these states (and others with the greatest gains) may then have their allotments reduced to hold harmless the states that would otherwise see reduced benefits. So although these states with the greatest proportional gains will see their LIHEAP allotments increase under the new formula, their allotments may not increase to reach their new formula rates (column (b) of Table 1 ).", "Columns (b) and (c) of Table A-1 show estimated allotments to the states at hypothetical appropriations levels between $1.975 billion and $2.25 billion. Column (b) shows the estimated allotment of funds that each state would receive when the regular fund appropriation is at $2.14 billion and column (c) shows the estimated allotment of funds when the regular fund appropriation is just under $2.25 billion ($2,249,999,999)."], "subsections": []}, {"section_title": "\"New\" Formula with Hold-Harmless Level and Rate: Appropriations At or Above $2.25 Billion", "paragraphs": ["The LIHEAP statute stipulates additional requirements in the method for distributing funds when the appropriation is at or above $2.25 billion. At this level, the hold-harmless level still applies, but, in addition, a new hold-harmless rate is applied. Specifically, for all appropriation levels at or above $2.25 billion, states that would have received less than 1% of a total $2.25 billion appropriation must be allocated the percentage they would have received at a $2.14 billion appropriation level. (This assumes the percentage at $2.14 billion is greater than the percentage originally calculated at the hypothetical $2.25 billion appropriation; this is not true for all states that receive less than 1% of the $2.25 billion appropriation.) Then that state will receive the percentage share of funds it would have received at $2.14 billion for all appropriation levels at or above $2.25 billion. This hold-harmless rate ensures a state specific share of the total available funds.", "As with the hold-harmless level, the allocations to the states with the greatest proportional gains are then ratably reduced again until there is no funding shortfall. Column (e) of Table 1 shows which states benefit from the hold-harmless rate, indicated by a \"Y,\" while column (f) shows the proportion of funds that those states receive. For example, Idaho benefits from the hold-harmless rate and receives 0.580% of the total appropriation when appropriations are at or above $2.25 billion.", "The application of the hold-harmless rate creates another layer of discontinuity in the allocation rates. States that are ratably reduced see their allocations at $2.25 billion fall below the amount they would receive at $2.249 billion, while states that benefit from the hold-harmless rate see their funding jump up slightly. Columns (d) through (i) of Table A-1 in Appendix A show estimated allotments to states at various hypothetical appropriations levels at or above $2.25 billion. "], "subsections": []}]}, {"section_title": "Implementation of the \"New\" LIHEAP Formula", "paragraphs": ["Until FY2006, appropriations for regular LIHEAP funds had only exceeded the equivalent of a hypothetical FY1984 appropriation of $1.975 billion in 1985 and 1986; thereafter, from FY1987 through FY2005, and again in FY2007, states continued to receive the same percentage of LIHEAP funds that they received under the program's predecessor, LIEAP (see column (a) of Table 1 for these percentages). In FY2006, funds were distributed under the \"new\" LIHEAP formula when Congress appropriated $2.48 billion in regular funds for the program. In FY2008, perhaps due to an oversight, the new formula was again used to distribute funds. The FY2008 Consolidated Appropriations Act ( P.L. 110-161 ) failed to authorize a set-aside called leveraging incentive grants. As a result, the funds for those grants were added to the LIHEAP regular funds, triggering use of new formula data. In FY2009, the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act ( P.L. 110-329 ) appropriated $4.51 billion in regular funds. However, the law further specified that $840 million be distributed according to the \"new\" LIHEAP formula, with the remaining $3.67 billion distributed according to the percentages of the \"old\" formula established by LIEAP. From FY2010 through the present, Congress has continued to appropriate funds using a version of a split between the \"old\" and \"new\" formulas. See Table C-1 in Appendix C of this report for the distribution of funds to the states from FY2009 through FY2019.", "Appendix A. Estimated Allotments to the States Under Various Hypothetical Appropriations Levels", " Table A-1 , below, shows estimated allocations to the states at various hypothetical appropriations levels. In column (a) are allotments at the equivalent of a hypothetical FY1984 appropriation of $1.975 billion\u2014under recent LIHEAP practice where funds are set aside for training and technical assistance, the equivalent appropriation level is approximately $1.978 billion. The remaining columns show estimated allotments at appropriations of $2.14 billion, just under $2.25 billion, $2.25 billion, $3.0 billion, $3.69 billion (the amount appropriated in FY2019), $4.0 billion, and $5.1 billion, the amount at which the LIHEAP program was last authorized in P.L. 109-58 . In each case, the estimates assume that 0.5% would be set aside for the territories, the amount set aside by HHS starting in FY2014.", "Appendix B. Further Depiction of How State Allotments Depend Upon Appropriation Levels", " Figure B-1 graphically illustrates the interplay of the hold harmless provisions in state allotments for three types of states over a range of appropriations from $0 to $5.1 billion.", "Represented are (1) a hold-harmless level state, (2) a state whose increased allocations are ratably reduced in order to maintain allocations for the hold-harmless level and rate states, and (3) a hold-harmless level and rate state. These three states are not representative of all states in the three categories; see Table A-1 for the range of individual state allocations.", "In the figure, there are three vertical areas. These areas separate the three levels of appropriations that are triggers under current law and were explained previously in this report. The figure also graphs the three types of states. These three types of states are as follows.", "Hold-Harmless Level Only State . This state is depicted with a blue line running from $0 to point G. States with \"new\" formula percentages that start out lower than their \"old\" formula percentages are subject to only the hold-harmless level provision. They do not qualify for the hold-harmless rate because each state's share of the regular funds at $2.25 billion is greater than 1%. The hold-harmless level is evident from point A to point F. Here, despite increases in the appropriations level, the state allotment remains fixed. In Table 1 , these are the states that have a \"Y\" in column (c) and an \"N\" in column (e).Ratable Reduction State. This state is depicted with a purple line running from $0 to point H. States with \"new\" formula percentages that are higher than their \"old\" formula percentages are subject to a ratable reduction. Their new formula percentage is greater than their old (FY1984) percentage. There is a small decrease in state allotments at point D that is attributable to the increased shortfall on the distribution of funds that the hold-harmless rate imposes. In Table 1 , these are the states that have an \"N\" in both column (c) and column (e).Hold-Harmless Level and Rate State. This state is depicted with a red line running from $0 to point I. States have lower new formula percentages and are subject to both the hold-harmless level and the hold harmless rate provisions. The hold-harmless level is evident by the fixed state allotment from point C to point E. However, the (subtle) jump at exactly $2.25 billion (point E) signals that this state is subject to the hold-harmless rate provision. After the allotment jump at $2.25 billion, the state's allotment continues to increase (at a rate lower than the old rate, but higher than the new rate). In Table 1 , these are the states that have a \"Y\" in column (c) and a \"Y\" in the column (e).", "Appendix C. LIHEAP Formula Fund Allocations to the States, FY2010-FY2019", "Since FY2009, Congress, through appropriations language, has directed that a portion of the regular funds appropriated be distributed to the states via the \"new\" LIHEAP formula, and the remainder using the \"old\" formula percentages. The portion of funds distributed via the new formula has ranged from 14% to nearly 20% of regular funds appropriated, depending on the year.", " Table C-1 , below, shows actual LIHEAP regular fund allocations to the states from FY2009 through FY2019. In each year, funds for the territories, training and technical assistance (TTA), and leveraging incentive grants (if appropriated) are first subtracted from the total appropriation. The remainder of funding is distributed to the states via formula as directed in appropriations language. For example, in FY2019 Congress directed that $716 million be distributed via the \"new\" LIHEAP formula, and the remainder via the \"old\" LIHEAP formula percentages. ", "The column header in Table C-1 for each year shows the total regular funds appropriated for LIHEAP (including funds that were not distributed via the formula such as rescissions and transfers). Total funding distributed to the states via formula is in the final row of the table for each year. The table notes describe the division between \"new\" and \"old\" formulas, and any other relevant information.", "Appendix D. History of the LIHEAP Formula", "Predecessor Programs to LIHEAP", "The mid- to late-1970s, a time marked by rapidly rising fuel prices, also marked the beginning of federal energy assistance funding for low-income households. The first national program to help low-income households was created in early 1975 to assist families with energy conservation primarily through home weatherization. This assistance was provided through a new Emergency Energy Conservation Program (EECP), enacted as part of the Headstart, Economic Opportunity, and Community Partnership Act of 1974 ( P.L. 93-644 ). The funds were administered by the Community Services Administration (CSA), the successor agency to the Office of Economic Opportunity, which was responsible for many of the programs created as part of the 1964 war on poverty. Beginning in 1977, funds were also made available through the CSA to help families directly pay for fuel (as opposed to weatherization expenses) via a variety of programs. Each of these programs had in common a focus on the need for heating assistance (versus cooling assistance).", "Congress continued to appropriate funds for energy assistance programs through FY1980, at which point a new program, the Low Income Energy Assistance Program (LIEAP), was enacted as part of the Crude Oil Windfall Profits Tax Act of 1980 ( P.L. 96-223 ). LIEAP, which was administered by the Department of Health and Human Services (HHS), was funded for one year, FY1981, before the creation of LIHEAP. Like the CSA programs, LIEAP emphasized heating over cooling needs. This preference was reflected in both the CSA program formulas and the LIEAP set of formulas, which used variables that benefitted cold-weather states to determine how funds would be distributed. The LIEAP set of formulas continues to have relevance for the way in which LIHEAP funds are distributed. This section of the report describes these predecessor programs to LIHEAP and their distribution formulas.", "Community Services Administration Energy Assistance Programs", "On January 4, 1975, President Ford signed into law the Headstart, Economic Opportunity, and Community Partnership Act of 1974 ( P.L. 93-644 ), which contained funds for a new program, called the Emergency Energy Conservation Program (EECP). The program was to be administered by the Community Services Administration (CSA), and its purpose was", "to enable low-income individuals and families, including the elderly and the near poor, to participate in energy conservation programs designed to lessen the impact of the high cost of energy ... and to reduce ... energy consumption.", "The law governing EECP listed a number of eligible activities in which states could participate, including energy conservation and education programs; weatherization assistance; loans and grants for the purchase of energy conservation technologies; alternative fuel supplies; and fuel voucher and stamp programs. Despite the variety of activities that could be funded through the program, the first CSA funding notice regarding the program limited eligible activities to \"winterizing\" homes and to giving emergency assistance \"to prevent hardship or danger to health due to utility shutoff or lack of fuel.\" During the four years the EECP was funded, the majority of funds were used for weatherization expenses.", "EECP funds were distributed to states via a formula that benefitted those states with high heating costs. One formula variable in particular, a measure of \"coldness\" called heating degree days, benefitted cold-weather states. Heating degree days measure the extent to which a day's average temperature falls below 65\u00b0 Fahrenheit. For example, a day with an average temperature of 50\u00b0 results in a measure of 15 heating degree days. Because heating degree days are higher in cold-weather states, including the heating degree day variable in a formula favors states with greater heating needs. Squaring the heating degree days magnifies this effect. The EECP formula took the number of population-weighted heating degree days in each state, squared them, and multiplied the result by the number of households in poverty that owned their homes to determine how funds would be allocated. The CSA acknowledged the emphasis on heating needs in its formula, stating that the FY1975 allocation \"was heavily weighted to the coldest areas.\" In the three fiscal years that followed the first appropriation for the EECP, from FY1976 through FY1978, the CSA changed somewhat the way in which it allocated funds to the states; however, the factors continued to favor cold-weather states through use of either heating degree days or heating degree days squared.", "The first year that Congress specifically appropriated funds for direct assistance to help low-income households (those at or below 125% of poverty) pay their energy costs (instead of funds that went primarily for weatherization and conservation activities) was FY1977. The FY1977 Supplemental Appropriations Act ( P.L. 95-26 ) provided $200 million for a Special Crisis Intervention Program to be administered by CSA. States could use funds to make direct payments to fuel providers on behalf of low-income families lacking the financial resources to pay their energy bills. The CSA directed states to target households where utilities had been shut off (or were threatened with shut off) or who could prove \"dire financial need\" as the result of paying large energy bills. Although the law did not reserve funds exclusively for heating costs, the way in which funds were allocated to the states emphasized heating need. Funds were distributed to the states based on a formula that used (1) heating degree days squared, (2) the number of households in poverty, (3) the number of persons above age 65 with incomes below 125% of poverty, and (4) the relative cost of fuel in the region. Congress again appropriated $200 million for crisis intervention in both FY1978 and FY1979. In FY1978, funds were available to households with the need for assistance as the result of an energy-related emergency such as lack of fuel, a natural disaster, fuel shortages, and widespread unemployment. In FY1979, funds were made available to assist families facing \"substantially increased energy costs and/or life- or health-threatening situations caused by winter-related energy emergencies.\"", "In FY1980, Congress appropriated a total of $1.6 billion for energy assistance. Of this amount, $400 million was appropriated for the Energy Crisis Assistance Program (ECAP, a CSA program similar to the Special Crisis Intervention Program) through two separate appropriations. The remainder, $1.2 billion, was appropriated as part of the FY1980 Department of the Interior Appropriations Act ( P.L. 96-126 ) to the Department of Health, Education, and Welfare (HEW, the predecessor to HHS) for cash assistance and crisis intervention due to high energy costs. This appropriation to HEW is sometimes referred to as Low Income Supplemental Energy Allowances. Of this $1.2 billion, $400 million was to be distributed specifically to recipients of Supplemental Security Income (SSI). The rest of the funds appropriated to HEW, approximately $800 million, as well as the ECAP funds, were distributed to states on the basis of three factors: heating degree days squared, the number of households below 125% of poverty, and the difference in home heating energy expenditures between 1978 and 1979. The formula used to distribute the $400 million for SSI recipients used these same factors but also included the number of SSI recipients in each state relative to the national total.", "The Low Income Energy Assistance Program (LIEAP) Formula", "In April 1980, Congress replaced the patchwork energy assistance programs of the late 1970s with one program, the Low Income Energy Assistance Program (LIEAP). LIEAP, the direct predecessor program to LIHEAP, was established as part of the Crude Oil Windfall Profits Tax Act of 1980 ( P.L. 96-223 ). The program was introduced in the Senate as the Home Energy Assistance Act ( S. 1724 ) and was incorporated into H.R. 3919 , the bill that would become the Crude Oil Windfall Profits Tax Act, on the Senate floor. Like the energy assistance programs of the late 1970s such as the Special Crisis Intervention Program and the Low Income Supplemental Energy Allowances, LIEAP allocated funds to states in order to help low-income households pay their home energy costs. Also like these predecessor programs, LIEAP allocated funds to states using a method that put more emphasis on the heating needs of cold-weather states than it did on cooling needs. ", "The formula developed under LIEAP continues to be relevant in several ways: (1) it has been used to distribute LIHEAP funds as recently as FY2007, (2) the percentage shares of funds that states received continue to be the benchmark for the way in which states are held harmless under the current LIHEAP formula, and (3) from FY2009 through the present, Congress has distributed the bulk of LIHEAP funds using the LIEAP formula percentages (for more information, see Appendix C ). As a result, the variables used are important in understanding the current formula and the way in which it is used to distribute funds.", "Ultimately, Congress developed the LIEAP formula through two different laws: P.L. 96-223 , the law that authorized LIEAP, and P.L. 96-369 , a continuing resolution enacted six months later. The following two subsections describe the elements of the formula developed through each.", "Formula Under P.L. 96-223", "The formula developed as part of S. 1724 , and subsequently incorporated into P.L. 96-223 , reflected, in part, the concern that the problem of rising energy costs were \"most critical in areas with high home heating costs.\" The formula for LIEAP arose from a Senate compromise over three different proposals. The debate centered around the degree to which heating should be emphasized over energy expenditures generally. Some Members wanted a formula that accounted for all energy uses and was not based solely on geographic location, while others saw the program's purpose as solely to provide heating assistance. The debate on the Senate floor was, at times, contentious, with Senator Edmund Muskie (Maine) resolved to filibuster in order to support the heating needs of northern states. Primarily at issue was the measure of heating degree days, particularly the extent to which they would be weighted and whether they would be squared.", "Under the final compromise LIEAP formula in P.L. 96-223 , states received funds under one of four different alternatives used to measure home energy need, depending on which one benefitted a state the most. Three of the four options contained different combinations of several formula factors: residential energy expenditures; heating degree days or heating degree days squared; and the number of low-income households in the state.", "Under the first formula alternative, 50% of the allocation was based on residential energy expenditures and 50% on heating degree days squared multiplied by the number of households at or below the Bureau of Labor Statistics (BLS) lower living standard. Under the second formula alternative, 25% of the allocation was based on residential energy expenditures and 75% based on heating degree days squared multiplied by the number of households at or below the BLS lower living standard. Under the third formula alternative, 50% of the allocation was based on residential energy expenditures and 50% based on heating degree days (not squared) multiplied by the number of households with incomes at or below the BLS lower living standard. The fourth option guaranteed states a minimum benefit of $120 for each household that received Aid to Families with Dependent Children (AFDC), SSI, or Food Stamp benefits. The option was added to S. 1724 at the Finance Committee level in recognition of the fact that (in general) funds were not being provided for cooling costs. ", "(See Table D-2 for a breakdown of these formulas.) ", "While the focus of the formula was on heating assistance, the LIEAP law did allow states to provide for cooling when households could demonstrate medical necessity. Congress authorized LIEAP for one year, FY1981, at $3 billion, but funds were not appropriated as part of P.L. 96-223 .", "Formula Under P.L. 96-369", "Before the formula in P.L. 96-223 could be used to allocate funds, Congress introduced an alternative method for computing the state distribution rates. It did so when it appropriated $1.85 billion in LIEAP funds for FY1981 in a continuing resolution ( P.L. 96-369 ), in October of 1980, six months after enactment of the Crude Oil Windfall Profits Tax Act. The new allocation method was not described in P.L. 96-369 , however. Instead, the continuing resolution referred to a House Appropriations Committee report (H. Rept. 96-1244) accompanying another bill\u2014the FY1981 Departments of Labor, Health and Human Services and Education Appropriations Act. It was in this committee report that the additional formula components for LIEAP were laid out. The additional formula components appeared to be intended to act as a counter to the formula developed in P.L. 96-223 , which some argued benefitted warmer weather states more than was necessary. ", "The first step in the new set of formulas was to determine each state's share of funds using two calculations set out in H. Rept. 96-1244 and assign states the greater of the two amounts.", "Under the first formula alternative, 50% of the allocation was based on the increase in home heating expenditures, and 50% was based on the number of heating degree days squared times the population with income less than or equal to 125% of poverty. This was the same formula used for the Low-Income Supplemental Energy Allowances Program. Under the second formula alternative, 25% of the allocation was based on total residential energy expenditures, and 75% was based on heating degree days squared multiplied by the number of low-income households in the state.", "The greater of the two percentages calculated using the formula in H. Rept. 96-1244 was then assigned to each state. After adjusting state allotments proportionately so that the total allocation reached 100% of funds available, the second step in the amended formula was to compare these state allotments to 75% of the amount each state would receive under the formula in P.L. 96-223 . States would then receive the greater of these two amounts. To see the percentage of funds that each state received under the LIEAP formula, see Table 1 , column (a).", "Although the alternative formulas under H.Rept. 96-1244 used factors similar to those in P.L. 96-223 , the original set of formulas was somewhat more favorable to warm-weather states. For example, the BLS lower living standard, used in all of the P.L. 96-223 formulas but only one of those in H.Rept. 96-1244, was higher than 125% of poverty for most household sizes, which benefitted the South, where the low-income population was higher. The original set of formulas in P.L. 96-223 also provided for a minimum benefit to states on the basis of the number of AFDC, SSI, and Food Stamp recipient households, unconditioned on their household heating expenditures. In addition, the inclusion of the increase in home heating expenditures in H. Rept. 96-1244 benefitted Northeastern states, where heating oil prices had increased substantially.", "Enactment of LIHEAP", "In August 1981, the Omnibus Budget Reconciliation Act, P.L. 97-35 , created LIHEAP, replacing its predecessor, LIEAP. The new program was not substantially different from the previous program. Some of the changes to the program included less restrictive federal rules and more state flexibility in determining how to operate their LIHEAP programs. The program was authorized at $1.85 billion for FY1982-FY1984. In FY1982, Congress appropriated $1.875 billion for LIHEAP; in FY1983, it appropriated $1.975 billion; and in FY1984, $2.075 billion.", "Continued Use of the LIEAP Formula", "When the formula for LIEAP was initially created in 1980 under the Crude Oil Windfall Profits Tax Act ( P.L. 96-223 ), it brought about a good deal of debate on the floor of the Senate, where the formula provisions were added to the legislation. Discussion over the formula also occurred leading up to the enactment of P.L. 96-369 , the FY1981 continuing resolution that funded LIEAP and amended the formula. Despite these earlier disagreements over formula allocations, the process to enact LIHEAP in 1981 did not engender the same level of debate or result in a different formula. Instead, the law creating LIHEAP provided that the allotment percentages for each state would remain the same as they had been in FY1981 under the LIEAP formula as amended by P.L. 96-369 . From FY1982 through FY1984, then, states continued to receive the same percentage of funds that they received under the LIEAP formula.", "The 1984 LIHEAP Reauthorization: A New Formula", "Formula Discussions", "When Congress began to consider reauthorizing LIHEAP in 1983, two aspects of the formula were debated. First, some legislators recognized that the multi-step LIEAP formula benefitted cold-weather states relative to warm-weather states. The second debated aspect of the formula centered on the appropriateness and timeliness of the data used in formula calculations. In 1983, the energy information used to calculate state allotments was not the most current data available. For example, the most recent data the formula used were the change in the cost of energy between 1978 and 1980, or the cost of energy in 1980, depending on the sub-formula one chose to apply. No aspect of the formula took account of increased costs after 1980.", "Legislative sentiment in favor of changing the formula was evident, when, in September 1983, the House adopted an amendment to the Emergency Immigration Education Act ( H.R. 3520 ) that would have adjusted the LIHEAP formula and resulted in a change in allocations to the states. The amendment's formula took into account the energy expenditures of poor families, which, according to the amendment's sponsor, Representative Carlos Moorhead (California), would result in lower percentage allocations for 23 states, mostly in the Northeast and Midwest, gains for 27, primarily in the South, and the same allocation for one state. The amendment was eventually dropped from H.R. 3520 in conference with the Senate.", "Introduction of a Hold-Harmless Level", "Efforts to reauthorize LIHEAP began in April 1983 with the introduction of the Low-Income Home Energy Assistance Amendments of 1984 ( H.R. 2439 ). The bill was referred to two committees: Education and Labor and Energy and Commerce. Within the Energy and Commerce committee, two subcommittees held markups: Fossil and Synthetic Fuels and Energy Conservation and Power.", "As introduced, H.R. 2439 did not contain changes to the LIHEAP formula. The Subcommittees on Fossil and Synthetic Fuels and Energy Conservation and Power worked together to arrive at a formula change, which had the effect of shifting funds from states in the Northeast to the South and West. Unlike the previous set of formulas developed under LIEAP, the new formula directed the Department of Health and Human Services to determine states' allotments \"using data relating to the most recent year for which data is available.\" Because the cost of heating oil remained steady between 1981 and 1983, and the price of natural gas rose 33%, this meant that states in the Northeast\u2014where heating oil was the primary source of energy\u2014would lose LIHEAP dollars, while states in the South and the Midwest would gain under this provision. In addition, population growth in the South (as well as its higher poverty rates) meant that southern states would benefit from the use of more recent population data.", "To offset the losses to certain states resulting from the use of current data, H.R. 2439 also included a hold-harmless provision, or hold-harmless level; this provision ensured that if appropriations were less than or equal to $1.875 billion, states would receive no less than their allotment would have been under the old formula at this appropriations level. The bill additionally increased the LIHEAP authorization level to $2.075 billion for FY1984, $2.26 billion for FY1985, $2.5 billion in FY1986, $2.625 billion for FY1987, and $2.8 billion for FY1988.", "Introduction of a Hold-Harmless Rate", "After the House Energy and Commerce Committee reported H.R. 2439 to the House floor\u2014but before the full House could act on the bill\u2014the Senate passed its version of LIHEAP reauthorization as part of the Human Services Reauthorization Act ( S. 2565 ) on October 4, 1984. The Senate bill contained language very similar to H.R. 2439 , but made several changes and additions to the formula.", "S. 2565 specified that states' shares of LIHEAP funds would be based on the home energy expenditures of low-income households, not on expenditures of all households. The hold-harmless level was altered. S. 2565 directed that no state in FY1985 would receive less funding than it received in FY1984, and for FY1986 and thereafter, no state would receive less than the amount they would have received in FY1984 if the appropriations level had been $1.975 billion. A second hold-harmless provision, or hold-harmless rate, was created. The provision maintained the percentage allocated rather than a total funding level allocated to each affected state.", "The hold-harmless rate provision guaranteed that certain states would receive increased allotments when appropriations reached $2.25 billion. States would qualify for this increase if their total allotment percentage at an appropriation of $2.25 billion were less than 1%. These states would instead receive the allotment rate they would have received at an appropriation of $2.14 billion if that allotment rate were higher than the rate at $2.25 billion. In their debate about S. 2565 , Senators referred to the hold-harmless rate as the \"small States hold harmless,\" as the intent was to protect the small (population) states' shares of LIHEAP funds. Otherwise, the concern was that appropriations might have to increase significantly before small state allotments would increase above their hold-harmless levels, with the states' percentage shares of funds declining even as total appropriations increased. ", "The Senate bill also included different authorization amounts for LIHEAP, $2.14 billion for FY1985 and $2.275 billion for FY1986. After S. 2565 passed the Senate, the House debated and passed the bill on October 9, 1984, retaining all the provisions included in the Senate version. The bill became P.L. 98-558 , the Human Services Reauthorization Act, on October 30, 1984."], "subsections": []}]}]}}
{"id": "R41268", "title": "Small Business Administration HUBZone Program", "released_date": "2019-04-03T00:00:00", "summary": ["The Historically Underutilized Business Zone Empowerment Contracting (HUBZone) program provides participating small businesses located in areas with low income, high poverty, or high unemployment with contracting opportunities in the form of set-asides, sole-source awards, and price-evaluation preferences. Its primary objectives are job creation and increased capital investment in distressed communities. Firms must be certified by the SBA to participate in the program. As of April 3, 2019, the SBA's Dynamic Small Business Search database included 6,769 firms with active HUBZone certifications.", "In FY2017, the federal government awarded 81,082 contracts valued at $7.53 billion to HUBZone-certified businesses. About $1.90 billion of that amount was awarded with a HUBZone preference ($1.49 billion through a HUBZone set-aside, $65.3 million through a HUBZone sole-source award, and $346.9 million through a HUBZone price-evaluation preference). About $1.53 billion of that amount was awarded to HUBZone-certified businesses in open competition with other firms. The remaining $4.10 billion was awarded with another small business preference (e.g., set aside and sole source awards for small business generally and for 8(a), women-owned, and service-disabled veteran-owned small businesses).", "The HUBZone program's administrative cost is about $8.4 million annually. It received an appropriation of $3.0 million for FY2019, with the additional cost of administering the program provided by the SBA's appropriation for salaries and general administrative expenses.", "Congressional interest in the HUBZone program has increased in recent years, primarily due to GAO reports of fraud in the program and efforts by small businesses to ease HUBZone eligibility requirements.", "This report examines arguments both for and against targeting assistance to geographic areas with specified characteristics as opposed to providing assistance to people or businesses with specified characteristics. It then assesses the arguments both for and against the continuation of the HUBZone program.", "The report also discusses the HUBZone program's structure and operation, focusing on the definition of HUBZone areas and HUBZone small businesses and the program's performance relative to federal contracting goals. It includes an analysis of the SBA's administration of the program and the SBA's performance measures.", "This report also examines HUBZone-related legislation, including", "P.L. 114-92, the National Defense Authorization Act for Fiscal Year 2016, which, among other provisions, expanded the definition of a Base Realignment and Closure Act (BRAC) military base closure area to make it easier for businesses located in those areas to meet the HUBZone program's requirement that at least 35% of its employees reside in a HUBZone area. It also extended BRAC base closure area HUBZone eligibility from five years to not less than eight years, provided HUBZone eligibility to qualified disaster areas, and added Native Hawaiian Organizations to the list of HUBZone eligible small business concerns. P.L. 115-91, the National Defense Authorization Act for Fiscal Year 2018, which, among other provisions, allows small businesses that have HUBZone status on or before December 31, 2019, to retain that status from January 1, 2020, until the SBA prepares an updated online tool depicting HUBZone qualified areas (anticipated by the SBA to take place in December 2021). Once the new online tool (currently called the HUBZone map) is operational, the SBA must update it every five years for qualified census tracts and nonmetropolitan counties and when a change in status takes place for other HUBZone types (e.g., when an area becomes or ceases to be a redesignated area). The act also allows governors, starting on January 1, 2020, to petition the SBA each year to designate areas located in nonurban areas, with a population of 50,000 or fewer, and an average unemployment rate at least 120% of the national or state average, whichever is lower, as HUBZones; requires the SBA to process HUBZone certification applications with sufficient and complete documentation within 60 days of receipt; ensures that HUBZone-eligible BRAC areas receive HUBZone eligibility for a full eight years, beginning on the date they are designated a BRAC; and requires the SBA, not later than one year after enactment, to publish performance metrics measuring the HUBZone program's success in promoting economic development in economically distressed areas."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "The HUBZone Program", "paragraphs": ["The Small Business Administration (SBA) administers several programs to support small businesses, including the Historically Underutilized Business Zone Empowerment Contracting (HUBZone) program. The HUBZone program is \"a place-based contracting assistance program whose primary objective is job creation and increasing capital investment in distressed communities.\" It was authorized in 1997 ( P.L. 105-135 , the HUBZone Act of 1997; Title VI of the Small Business Reauthorization Act of 1997), and the SBA began accepting applications from interested small businesses on March 22, 1999.", "The HUBZone program provides participating small businesses located in areas with low income, high poverty, or high levels of unemployment with contracting opportunities in the form of set-asides , sole-source awards , and price-evaluation preferences . The Competition in Contracting Act of 1984 generally requires \"full and open competition\" for government procurement contracts. However, procurement set-asides are permissible competitive procedures.", "A set-aside restricts competition for a federal contract to specified contractors. Set-asides can be exclusive or partial, depending upon whether the entire procurement or just part of it is so restricted. In this case, the competition may be restricted to SBA-certified HUBZone businesses if there is a reasonable expectation of at least two SBA-certified HUBZone bidders and a fair market price. It is the most commonly used mechanism in the HUBZone program, accounting for about 78.4% of HUBZone program contract dollars ($1.49 billion of $1.90 billion) in FY2017.", "A sole-source award is a federal contract awarded, or proposed for award, without competition. Sole-source awards accounted for about 3.4% of HUBZone program contract dollars ($65.3 million of $1.90 billion) in FY2017. In addition, in any full and open competition for a federal contract \"the price offered by a qualified HUBZone business shall be deemed as being lower than the price of another offeror if the HUBZone business price offer is not more than 10% higher than the other offer.\" Price-evaluation preferences accounted for about 18.2% of HUBZone program contract dollars ($346.9 million of $1.90 billion) in FY2017.", "In FY2017, the federal government awarded 81,082 contracts valued at $7.53 billion to HUBZone-certified businesses. About $1.90 billion of that amount was awarded with a HUBZone preference ($1.49 billion through a HUBZone set-aside, $65.3 million through a HUBZone sole-source award, and $346.9 million through a HUBZone price-evaluation preference). About $1.53 billion of that amount was awarded to HUBZone-certified businesses in open competition with other firms. The remaining $4.10 billion was awarded with another small business preference (e.g., set aside and sole source awards for small business generally and for 8(a), women-owned, and service-disabled veteran-owned small businesses).", "The program's administrative cost is about $9.8 million annually. It received an appropriation of $3 million for FY2019, with the additional cost of administering the program provided by the SBA's appropriation for salaries and general administrative expenses. ", "Congressional interest in the HUBZone program has increased in recent years, primarily due to U.S. Government Accountability Office (GAO) reports of fraud in the program and efforts by small businesses to ease HUBZone eligibility requirements.", "This report ", "examines arguments presented both for and against targeting assistance to geographic areas with specified characteristics as opposed to providing assistance to people or businesses with specified characteristics; assesses arguments presented both for and against the creation and continuation of the HUBZone program, starting with the arguments presented during consideration of P.L. 105-135 , which authorized the program; discusses the HUBZone program's structure and operation, focusing on the definitions of HUBZone areas and HUBZone small businesses and the program's performance relative to federal contracting goals; and provides an analysis of the SBA's administration of the HUBZone program and the SBA's performance measures.", "This report also examines HUBZone-related legislation, including", "P.L. 114-92 , the National Defense Authorization Act for Fiscal Year 2016, which expanded the definition of a Base Realignment and Closure Act (BRAC) military base closure area to make it easier for businesses located in those areas to meet the HUBZone program's requirement that at least 35% of its employees reside in a HUBZone area. It also extended BRAC base closure area HUBZone eligibility from five years to not less than eight years, provided HUBZone eligibility to qualified disaster areas, and added Native Hawaiian Organizations to the list of HUBZone eligible small business concerns. P.L. 115-91 , the National Defense Authorization Act for Fiscal Year 2018, which included provisions from several bills introduced during the 115 th Congress, including S. 929 , the Invest in Rural Small Business Act of 2017, and H.R. 3294 , the HUBZone Unification and Business Stability Act of 2017. Specifically, the act, among other provisions, allows small businesses that have HUBZone status on or before December 31, 2019, to retain that status from January 1, 2020, until the SBA prepares an updated online tool depicting HUBZone qualified areas (anticipated by the SBA to take place in December 2021). Once the new online tool (currently called the HUBZone map) is operational, the SBA must update it every five years for qualified census tracts and nonmetropolitan counties and when a change in status takes place for other HUBZone types (e.g., when an area becomes, or ceases to be, a redesignated area). The act also allows governors, starting on January 1, 2020, to petition the SBA each year to designate areas located in nonurban areas, with a population of 50,000 or fewer, and an average unemployment rate at least 120% of the national or state average, whichever is lower, as HUBZones; requires the SBA to process HUBZone certification applications with sufficient and complete documentation within 60 days of receipt; ensures that HUBZone-eligible BRAC areas receive HUBZone eligibility for a full eight years, beginning on the date they are designated a BRAC; and requires the SBA, not later than one year after enactment, to publish performance metrics measuring the HUBZone program's success in promoting economic development in economically distressed areas. ", "In addition, P.L. 114-187 , the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA), includes a provision exempting Puerto Rico from the 20% population cap on qualified census tracts (QCTs) located in metropolitan statistical areas (MSAs) for 10 years, or until the date on which the Financial Oversight and Management Board for Puerto Rico, created by PROMESA, ceases to exist, whichever comes first. The act also requires the SBA to implement a risk-based approach to requesting and verifying information from firms applying to be designated or recertified as a qualified HUBZone small business.", "Several bills are also discussed that would increase the federal government's small business contracting goals. For example, during the 113 th Congress, S. 259 , the Assuring Contracting Equity Act of 2013, would have increased the federal government's 23% contracting goal for small businesses generally to 25%, the 5% contracting goals for small disadvantaged businesses and women-owned small businesses to 10%, and the 3% contracting goals for HUBZone-certified small businesses and service-disabled veteran-owned small businesses to 6%. The bill's provisions were reintroduced in both the House and Senate during the 114 th Congress ( H.R. 3175 and S. 1859 ) and the 115 th Congress ( H.R. 2362 and S. 1061 ). Also, H.R. 273 , the Minority Small Business Enhancement Act of 2015, would have increased the federal government's 23% contracting goal for small businesses generally to 25% and the 5% contracting goals for small disadvantaged businesses and women-owned small businesses to 10%."], "subsections": []}, {"section_title": "Targeting Assistance to Geographic Areas", "paragraphs": ["The HUBZone program was authorized by P.L. 105-135 . Senator Christopher S. \"Kit\" Bond, the legislation's sponsor, described it as a \"jobs bill and a welfare-to-work bill\" designed to \"create realistic opportunities for moving people off of welfare and into meaningful jobs\" in \"inner cities and rural counties that have low household incomes, high unemployment, and whose communities have suffered from a lack of investment.\" Its enactment was part of a broader debate that had been under way since the late 1970s concerning whether the federal government should target assistance to geographic areas with specified characteristics as opposed to providing assistance to people or businesses with specified characteristics."], "subsections": [{"section_title": "Discussion", "paragraphs": ["The idea that targeting government assistance to geographic areas with specified characteristics, as opposed to targeting government assistance to people or businesses with specified characteristics, would result in more effective outcomes had its origins in a British experiment in urban revitalization started during the late 1970s. In 1978, Sir Geoffrey Howe, a Conservative Member of Parliament, argued for the establishment of market-based enterprise zones that would provide government regulatory and tax relief in economically distressed areas as a means to encourage entrepreneurs \"to pursue profit with minimum governmental restrictions.\" With the support of Prime Minister Margaret Thatcher's Conservative government (1979-1990), by the mid-1980s, more than two dozen enterprise zones were operating in England. Evaluations of the British enterprise zones' potential for having a positive effect on the long-term economic growth of economically distressed areas suggested that providing tax incentives and implementing regulatory relief in those areas were \"useful but not decisive economic development tools for distressed communities.\"", "In the United States, the idea of targeting regulatory and tax relief to economically distressed places appealed to some liberals who had become frustrated by the lack of progress some economically distressed communities had experienced under conventional government assistance programs, such as federal grant-in-aid programs. They tended to view the idea as a supplement to existing government assistance programs. Some conservatives also supported the idea of providing additional regulatory and tax relief to geographic areas because it generally aligned with their views on reducing government regulation and taxes. They tended to view this approach as a replacement, as opposed to a supplement, for existing government assistance programs. As a result, support for targeting federal assistance to economically distressed places came from a diverse group of individuals and organizations that were often on opposing sides in other issue areas. Some of its leading proponents were the Congressional Black Caucus; the National Urban League; the National League of Cities; the National Association for the Advancement of Colored People; President Ronald Reagan; Republican Representative Jack Kemp, who introduced the first enterprise zone bill in Congress in May 1980 ( H.R. 7240 , the Urban Jobs and Enterprise Zone Act of 1980); and Democratic Representative Robert Garcia, who cosponsored with Representative Kemp H.R. 3824 , the Urban Jobs and Enterprise Zone Act of 1981.", "Opponents noted that targeting government assistance, in this case regulatory and tax relief, to economically distressed places would \"provide incentives in designated areas, regardless of the nature of the industry which would benefit from the incentives.\" They argued that it would be more efficient and cost effective to target federal assistance to businesses that offer primarily high-wage, full-time jobs with benefits and have relatively high multiplier effects on job creation than to offer the same benefits to all businesses, including those that offer primarily low-wage, part-time jobs with few or no benefits and have relatively low multiplier effects on job creation.", "Others opposed the idea because they viewed it as a partisan extension of supply-side economics. Still others, including the National Federation of Independent Businesses, an organization representing the interests of the nation's small businesses, were not convinced that providing \"marginal rate reductions or marginal reductions in taxes\" would \"stimulate the entry of new businesses into depressed areas.\" Further, some economists argued that it would be more efficient to let the private market determine where businesses locate rather than to have the government enact policies that encourage businesses to locate, or relocate, in areas they would otherwise avoid. In this view, \"the locational diversion of economic activity reduces or may outweigh gains from the creation of economic activity.\"", "These disagreements may have had a role in delaying the enactment of the first fully functional federal enterprise zone program until 1993 ( P.L. 103-66 , the Omnibus Budget Reconciliation Act of 1993). In the meantime, 37 states and the District of Columbia had initiated their own enterprise zone programs. Evaluations of their effect on job creation and the economic status of the targeted distressed areas \"provided conflicting conclusions, with some finding little or no program-related impacts, and others finding gains in the zones associated with the enterprise zone incentives.\" Evaluations of federal enterprise zones would later report similarly mixed findings."], "subsections": []}, {"section_title": "The Debate over HUBZones", "paragraphs": ["The federal enterprise zone program's enactment in 1993 established a precedent for the enactment of other programs, such as the HUBZone program, that target federal assistance, in this case government contracts, to places with specified characteristics. For example, the Senate Committee on Small Business's report accompanying the HUBZone program's authorizing legislation in 1997 presented many of the same arguments for adopting the HUBZone program that had been put forth for adopting the federal enterprise zone program:", "Creating new jobs in economically distressed areas has been the greatest challenge for many of our nation's governors, mayors, and community leaders. The trend is for business to locate in areas where there are customers and a skilled workforce. Asking a business to locate in a distressed area often seems counter to its potential to be successful. But without businesses in these communities, we don't create jobs, and without sources of new jobs, we are unlikely to have a successful revitalization effort.", "The HUBZone program attempts to utilize a valuable government resource, a government contract, and make it available to small businesses who agree in return to locate in an economically distressed area and employ people from these areas\u2026. Contracts to small businesses in HUBZones can translate into thousands of job opportunities for persons who are unemployed or underemployed. ", "HUBZone opponents expressed many of the same arguments that were raised in opposition to federal enterprise zones. For example, some Members opposed contract set-asides because they \"unfairly discriminate against more efficient producers\" and argued that \"lower taxes, fewer mandates and freer markets are what stimulate the growth of small business.\" Others contended that the experiences under enterprise zones suggested that HUBZones would have, at best, a limited impact on the targeted area's economic prospects:", "the record of enterprise zones demonstrates that businesses that locate in an area because of tax breaks or other artificial inducements (such as HUBZone contract preferences), instead of genuine competitive advantages, generally prove not to be sustainable\u2026. Thus, the incentives generally go to businesses that would have located in and hired from the target area anyway\u2026. Therefore, we should be realistic about the impact the HUBZone legislation will have on business relocation decisions.", "HUBZone critics also argued that the program would compete with, and potentially diminish the effectiveness of, the SBA's Minority Small Business and Capital Ownership Development 8(a) program. ", "The 8(a) program provides participating small businesses with training, technical assistance, and contracting opportunities in the form of set-asides and sole-source awards. Eligibility for the 8(a) program is generally limited to small businesses \"unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and citizens of the United States\" that demonstrate \"potential for success.\" Small businesses owned by Indian tribes, Alaska native corporations, native Hawaiian organizations, and community development corporations are also eligible for the 8(a) program under somewhat different terms. In FY2017, about 5,100 firms participated in the 8(a) program and the federal government provided more than $22.3 billion in contracts to 8(a) firms.", "Others argued that the HUBZone self-certification process \"while laudable in its effort to reduce certification costs and delays, invites inadvertent or deliberate abuses.\"", "As will be discussed in greater detail, the SBA's administration of the HUBZone program and the program's effectiveness in assisting economically distressed areas has been criticized. For example, GAO has argued that the program is subject to fraud and abuse and has recommended that the SBA \"take additional actions to certify and monitor HUBZone firms as well as to assess the results of the HUBZone program.\" ", "Several Members of Congress have also questioned the program's effectiveness. For example, in 2009, Representative Nydia M. Vel\u00e1zquez argued that", "When first introduced, the HUBZone program promised to create opportunities for small businesses in low-income communities. It was designed to do this by helping entrepreneurs access the Federal marketplace. In theory, the benefits will be twofold; HUBZones will not only bolster the small business community, but will also breathe new life into struggling neighborhoods. However, the program has been undermined by chronic underfunding, inherent program flaws and sloppy management. Instead of being incubators for growth and development, HUBZones have become breeding grounds for fraud and abuse."], "subsections": []}]}, {"section_title": "HUBZone Areas Defined", "paragraphs": ["Five HUBZone types (or classes) currently exist: ", "qualified census tracts (QCTs), qualified nonmetropolitan counties, qualified Indian reservations/Indian Country, military bases closed under the BRAC, and qualified disaster areas.", "In addition, QCTs and qualified nonmetropolitan counties that lose their eligibility may temporarily retain their eligibility by becoming redesignated areas. Also, P.L. 115-91 , the National Defense Authorization Act for Fiscal Year 2018, authorizes governors, starting on January 1, 2020, to petition the SBA annually to grant HUBZone eligibility to designated covered areas in their state (or territory) which are located outside of an urbanized area, have a population of 50,000 or fewer, and have an unemployment rate at least 120% of the unemployment rate for the nation or state in which it is located, whichever is less."], "subsections": [{"section_title": "Qualified Census Tracts", "paragraphs": ["The term qualified census tract (QCT) has the meaning given that term in Section 42(d)(5)(B)(ii) of the Internal Revenue Code of 1986. That section of the Internal Revenue code refers to QCTs as determined by the Department of Housing and Urban Development (HUD) for its low-income housing tax credit program and has three subparts:", "(I) In general", "The term \"qualified census tract\" means any census tract which is designated by the Secretary of Housing and Urban Development and, for the most recent year for which census data are available on household income in such tract, either in which 50 percent or more of the households have an income which is less than 60 percent of the area median gross income for such year or which has a poverty rate of at least 25 percent. If the Secretary of Housing and Urban Development determines that sufficient data for any period are not available to apply this clause on the basis of census tracts, such Secretary shall apply this clause for such period on the basis of enumeration districts.", "(II) Limit on MSA's designated", "The portion of a metropolitan statistical area which may be designated for purposes of this subparagraph shall not exceed an area having 20 percent of the population of such metropolitan statistical area.", "(III) Determination of areas", "For purposes of this clause, each metropolitan statistical area shall be treated as a separate area and all nonmetropolitan areas in a State shall be treated as 1 area.", "In MSAs in which more than 20% of the population qualifies, HUD orders the census tracts in that MSA from the highest percentage of eligible households to the lowest. HUD then designates the census tracts with the highest percentage of eligible households as qualified until the 20% population limit is exceeded.\u00a0If a census tract is excluded because it raises the percentage above 20%, then subsequent census tracts are considered to determine if a census tract with a smaller population could be included without exceeding the 20% limit.", "As mentioned earlier, P.L. 114-187 , the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA) exempts Puerto Rico from the 20% population cap for 10 years, or until the date on which the Financial Oversight and Management Board for Puerto Rico ceases to exist, whichever comes first.", "The HUBZone map indicates that, as of June 1, 2018, 20.2% of all census tracts (14,980 of 74,002) had QCT status.", "The SBA's most recent update of QCT eligibility was released in January 2018. The SBA has announced that the next update of QCT status will not take place until December 2021. Those designations will then be updated every five years thereafter, as required by P.L. 115-91 , the National Defense Authorization Act for Fiscal Year 2018. "], "subsections": []}, {"section_title": "Qualified Nonmetropolitan Counties", "paragraphs": ["A qualified nonmetropolitan county is any county that is not located in a metropolitan statistical area as defined in Section 143(k)(2)(B) of the Internal Revenue Code of 1986 and in which", "the median household income is less than 80% of the nonmetropolitan state median household income, based on the most recent data available from the Bureau of the Census of the Department of Commerce; the unemployment rate is not less than 140% of the average unemployment rate for the United States or for the state in which such county is located, whichever is less, based on the most recent data available from the Secretary of Labor; or the county has been designated by the Secretary of HUD as a difficult development area (DDA).", "As of June 1, 2018, about 18.9% (613) of the nation's 3,242 counties had qualified nonmetropolitan county status (30.6% of the nation's 2,006 nonmetropolitan counties). This count includes 21 counties qualified as eligible solely due to their status as a DDA.", "The SBA's most recent update of nonmetropolitan county eligibility was released in January 2018. The SBA has announced that the next update of nonmetropolitan county eligibility will not take place until December 2021. Those designations will then be updated every five years thereafter, as required by P.L. 115-91 . ", "As will be discussed, Congress created redesignated areas to delay the loss of HUBZone status for census tracts and nonmetropolitan counties that lose HUBZone eligibility."], "subsections": []}, {"section_title": "Qualified Indian Lands", "paragraphs": ["P.L. 105-135 , the HUBZone Act of 1997, provided HUBZone eligibility to \"lands within the external boundaries of an Indian reservation.\" Since then, the term Indian reservation has been clarified and expanded to include ", "Indian trust lands and other lands covered under the term Indian Country as used by the Bureau of Indian Affairs, portions of the state of Oklahoma designated as former Indian reservations by the Internal Revenue Service (Oklahoma tribal statistical areas), and Alaska native village statistical areas.", "As of June 1, 2018, there were 619 HUBZone-qualified Indian lands. A private firm's analysis of Indian reservations' economic characteristics conducted on behalf of the SBA indicated that", "for the most part\u2014and particularly in states where reservations are numerous and extensive\u2014mean income of reservations is far below state levels, and unemployment rates and poverty rates are far above state levels. There are some interesting exceptions, however, where reservations are basically on a par with the states they are in. Examples include Osage reservation in Oklahoma and reservations in Connecticut, Rhode Island, and Michigan. The factors at work here may be casinos and oil.", "In accordance with P.L. 115-91 , all HUBZone-qualified Indian lands designated on or before December 31, 2019, retain that status from January 1, 2020, until the SBA prepares an updated online tool depicting HUBZone qualified areas (anticipated by the SBA to take place in December 2021). The act does not address when the SBA is required to update its new online tool to reflect changes in the status of HUBZone-qualified Indian lands. Presumably, the online tool would be updated immediately to reflect any change in that status."], "subsections": []}, {"section_title": "Military Bases Closed Under BRAC", "paragraphs": ["P.L. 108-447 , the Consolidated Appropriations Act, 2005, provided HUBZone eligibility for five years to \"lands within the external boundaries of a military installation closed through a privatization process\" under the authority of P.L. 101-510 , the Defense Base Closure and Realignment Act of 1990 (BRAC\u2014Title XXIX of the National Defense Authorization Act for Fiscal Year 1991); title II of P.L. 100-526 , the Defense Authorization Amendments and Base Closure and Realignment Act; and any other provision of law authorizing military base closures or redevelopment. The military base's HUBZone eligibility commences on the effective date of the initial law (December 8, 2004) if the military base was already closed at that time or on the date of formal closure if the military base was still operational at that time. ", "During the 113 th and 114 th Congresses, several bills were introduced to make it easier for businesses located in a BRAC military base closure area to meet the HUBZone requirement of having at least 35% of their employees reside within a HUBZone. As mentioned earlier, P.L. 114-92 contains such a provision. The act expands BRAC HUBZone eligibility to census tracts and nonmetropolitan counties that (1) contain a BRAC base closure area, (2) intersect with a BRAC base closure area, (3) are contiguous with a BRAC base closure area, or (4) are contiguous to any census tract or nonmetropolitan county described in (1) through (3). The act also extended HUBZone eligibility for BRAC base closure areas from five years to at least eight years.", "As of June 1, 2018, there were 125 HUBZone-qualified base closure areas. In accordance with P.L. 115-91 , all HUBZone-qualified base closure areas designated on or before December 31, 2019, retain that status from January 1, 2020, until the SBA prepares an updated online tool depicting HUBZone qualified areas (anticipated by the SBA to take place in December 2021). The act also requires the SBA to update its new online tool immediately after an area is designated as a HUBZone-qualified base closure area to reflect its change in status."], "subsections": []}, {"section_title": "Qualified Disaster Areas", "paragraphs": ["P.L. 114-92 provided HUBZone eligibility for qualified disaster areas, defined as \"any census tract or nonmetropolitan county for which the President has declared a major disaster under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170) or located in an area in which a catastrophic incident has occurred (on or after the date of enactment) if such census tract or nonmetropolitan county ceased to be qualified [as a HUBZone] ... during the period beginning 5 years before the date on which the President declared the major disaster or the catastrophic incident occurred and ending 2 years after such date.\" ", "However, the following exceptions apply: (1) in the case of a major presidentially-declared disaster, such census tract or nonmetropolitan county may be designated a qualified disaster area only during the 5-year period beginning on the date on which the President declared the major disaster for the area in which the census tract or nonmetropolitan county is located; and (2) in the case of a catastrophic incident, such census tract or nonmetropolitan county may be designated a qualified disaster area only during the 10-year period beginning on the date on which the catastrophic incident occurred in the area in which the census tract or nonmetropolitan area is located. ", "As of June 1, 2018, there were eight designated qualified disaster areas. In accordance with P.L. 115-91 , all qualified disaster areas designated on or before December 31, 2019, retain that status from January 1, 2020, until the SBA prepares an updated online tool depicting HUBZone qualified areas (anticipated by the SBA to take place in December 2021). The act also requires the SBA to update its new online tool immediately after an area is designated as a qualified disaster area to reflect its change in status."], "subsections": []}, {"section_title": "Redesignated Areas", "paragraphs": ["One of the implicit goals of the HUBZone program is to improve the economic standing of the geographic areas receiving assistance so they are no longer economically distressed areas. As a result, it could be argued that it is a program success when a QCT or a qualified nonmetropolitan county loses its HUBZone status when new economic data are published. However, because small businesses \"that locate to a HUBZone may lose their eligibility in only one year due to changes in such data\" and concerned that some HUBZone areas could \"shift in and out of eligibility year after year,\" Congress included a provision in P.L. 106-554 , the HUBZones in Native America Act of 2000 (Title VI, the Consolidated Appropriations Act, 2001), to address this issue. The provision provided census tracts and nonmetropolitan counties that lose HUBZone eligibility an automatic extension \"for the 3-year period following the date on which the census tract or nonmetropolitan county ceased to be so qualified.\" The act labeled these census tracts and nonmetropolitan counties as redesignated areas .", "As of June 1, 2018, there were 221 redesignated nonmetropolitan counties and 5,174 redesignated census tracts. In accordance with P.L. 115-91 , all redesignated areas on or before December 31, 2019, retain that status from January 1, 2020, until the SBA prepares an updated online tool depicting HUBZone qualified areas (anticipated by the SBA to take place in December 2021). The act also requires the SBA to update its new online tool immediately after an area becomes, or ceases to be, a redesignated area to reflect its change in status.", "Overall, as of June 1, 2018, 834 of the nation's 3,242 counties (about 25.7%) had HUBZone status, either as a qualified nonmetropolitan county, a DDA, or a redesignated nonmetropolitan county and 20,154 of the nation's 74,002 census tracts (about 27.2%) had HUBZone status, either as a QCT or as a redesignated QCT.", "During the 114 th Congress H.R. 5250 , the Growing and Reviving Rural Economies Through Transitioning HUBZone Redesignation Act of 2016, and S. 2838 , the Small Business Transforming America's Regions Act of 2016, would have extended the eligibility of redesignated HUBZones to seven years from three years. ", "During the 115 th Congress, H.R. 2013 , the Growing and Reviving Rural Economies Through Transitioning HUBZone Redesignation Act of 2017, and S. 690 , the HUBZone Investment Protection Act, would extend the eligibility of redesignated HUBZones to seven years from three years. The Senate Committee on Small Business and Entrepreneurship reported S. 690 favorably, without amendment, on August 2, 2017. ", "In addition, H.R. 2592 , the Expanding the Impact of the HUBZone Program Act of 2017, would extend HUBZone eligibility to not more than 10 years and H.R. 3294 , the HUBZone Unification and Business Stability Act of 2017, would provide HUBZone eligibility for at least five years beginning on January 1, 2020."], "subsections": []}]}, {"section_title": "HUBZone Businesses Defined", "paragraphs": ["Firms must be certified by the SBA to participate in the HUBZone program. Table 1 indicates the number of HUBZone-certified small businesses listed in the SBA's Dynamic Small Business Search database for selected dates from 2010 to 2018. The SBA's database contains information provided by small businesses interested in obtaining federal contracts when they registered in the federal System for Award Management (SAM).", "The data indicate that the number of HUBZone firms increased from May 2010 to May 2011 and then generally declined until mid-2015, with much of the reduction due to the previously mentioned expiration of grandfathered redesignated areas on October 1, 2011. Since then, the number of HUBZone firms has increased somewhat.", "As of April 3, 2019, the SBA's Dynamic Small Business Search database included 6,769 firms with active HUBZone certifications.", "To become certified, firms complete and submit specified SBA HUBZone application forms to the SBA, either online or by mail. Firms must", "meet SBA size standards for the firm's primary industry classification; be at least 51% owned and controlled by U.S. citizens, a community development corporation, an agricultural cooperative, or an Indian tribe (including Alaska native corporations); maintain a principal office located in a HUBZone; ensure that at least 35% of its employees reside in a HUBZone; represent, as provided in the application, that it will \"attempt to maintain\" having at least 35% of its employees reside in a HUBZone during the performance of any HUBZone contract it receives; represent, as provided in the application, that it will ensure that it will comply with certain contract performance requirements in connection with contracts awarded to it as a qualified HUBZone small business concern (such as spending at least 50% of the cost of the contract incurred for personnel on its own employees or employees of other qualified HUBZone small business concerns and meeting specified subcontracting limitations to nonqualified HUBZone small business concerns); provide an active, up-to-date Dun and Bradstreet profile and Data Universal Numbering System (DUNS) number that represents the business; and provide an active Central Contractor Registration profile for the business.", "Prior to 2010, the SBA's goal was to make its determination within 30 calendar days after receipt of a complete application package, subject to the need for additional information or clarification of information contained in the application. In response to reports of applicant fraud, in FY2009 the SBA began a two-year effort to reengineer its applicant review process (requiring applicants to submit documentation such as lease or rental agreements, three years of tax returns, citizenship documentation, and payroll records to prove they meet program requirements). Initially, depending on the complexity of the application and the need for additional information, the SBA took from 5 months to 12 months to make its determination. The SBA has since decreased the average time to process HUBZone applications, with about 61% of applications processed in three months or less. ", "P.L. 115-91 requires the SBA, effective January 1, 2020, to process HUBZone certification applications with sufficient and complete documentation within 60 days of receipt.", "If the SBA approves an application, it sends a written notice to the business and adds the business to its list of certified HUBZone businesses. A decision to deny eligibility must be in writing and state the specific reasons for denial.", "In the past, the SBA's staff conducted random program examinations \"to verify the accuracy of any certification made or information provided as part of the HUBZone application process, or in connection with a HUBZone contract.\" Examiners typically verified that the business met the program's eligibility requirements and that it met such requirements at the time of its application for certification, its most recent recertification, or its certification in connection with a HUBZone contract. In response to reports of fraud, the SBA, in addition to reengineering its applicant review process, now conducts program examinations of all firms that received a HUBZone contract in the previous fiscal year. SBA district field offices also conduct site visits to validate the geographic requirement for principal offices. In FY2018, SBA district field offices completed 529 on-site compliance reviews of HUBZone-certified firms, about 10% of the HUBZone-certified firms in the SBA's portfolio. ", "Certified HUBZone small business concerns must recertify every three years to the SBA that they meet the requirements for being a HUBZone business. They must also immediately notify the SBA of any material change that could affect their eligibility, such as a change in the ownership, business structure, or principal office of the concern or a failure to meet the 35% HUBZone residency requirement."], "subsections": []}, {"section_title": "HUBZone Federal Contracting Goals", "paragraphs": ["Since 1978, federal agency heads have been required to establish federal procurement contracting goals, in consultation with the SBA, \"that realistically reflect the potential of small business concerns and small businesses concerns owned and controlled by socially and economically disadvantaged individuals\" to participate in federal procurement. Each agency is required, at the conclusion of each fiscal year, to report its progress in meeting the goals to the SBA.", "In 1988, Congress authorized the President to annually establish government-wide minimum participation goals for procurement contracts awarded to small businesses and small businesses owned and controlled by socially and economically disadvantaged individuals. Congress required the government-wide minimum participation goal for small businesses to be \"not less than 20% of the total value of all prime contract awards for each fiscal year\" and \"not less than 5% of the total value of all prime contract and subcontract awards for each fiscal year\" for small businesses owned and controlled by socially and economically disadvantaged individuals.", "Each federal agency was also directed to \"have an annual goal that presents, for that agency, the maximum practicable opportunity for small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals to participate in the performance of contracts let by such agency.\" The SBA was also required to report to the President annually on the attainment of the goals and to include the information in an annual report to Congress. The SBA negotiates the goals with each federal agency and establishes a small business eligible baseline for evaluating the agency's performance. The agency head is required to \"make consistent efforts to annually expand participation by small business concerns from each industry category.\" If the SBA and the agency cannot agree on the goals, the agency may submit the case to the Office of Management and Budget (OMB) Office of Federal Procurement Policy (OFPP) for resolution.", "The small business eligible baseline excludes certain contracts that the SBA has determined do not realistically reflect the potential for small business participation in federal procurement (such as those awarded to mandatory and directed sources), contracts funded predominately from agency-generated sources (i.e., nonappropriated funds), contracts not covered by Federal Acquisition Regulations, acquisitions on behalf of foreign governments, and contracts not reported in the Federal Procurement Data System (such as contracts or government procurement card purchases valued less than $10,000). These exclusions typically account for 18% to 20% of all federal prime contracts each year.", "The SBA then evaluates the agencies' performance against their negotiated goals annually, using data from the Federal Procurement Data System\u2014Next Generation, managed by the U.S. General Services Administration, to generate the small business eligible baseline. This information is compiled into the official Small Business Goaling Report, which the SBA releases annually. Each agency that fails to achieve any proposed prime or subcontract goal is required to submit a justification to the SBA on why they failed to achieve a proposed or negotiated goal with a proposed plan of corrective action.", "Agencies can take credit in every category that is applicable to the recipient of the contract. For example, \"when counting goaling achievements, a contract awarded to a service-disabled Veteran-Owned Woman-Owned Small Business would be counted toward the Small Business (SB) goal, the Service-Disabled Veteran-Owned Small Business (SDVOSB) goal and the Women-Owned Small Business (WOSB) goal. However, these category counts are not summed to triple the total count. The Sum of Parts Does Not Equal the Whole (italics in original).\"", "Over the years, federal government-wide procurement contracting goals have been established for small businesses generally ( P.L. 100-656 , the Business Opportunity Development Reform Act of 1988, and P.L. 105-135 , the HUBZone Act of 1997\u2014Title VI of the Small Business Reauthorization Act of 1997), small businesses owned and controlled by socially and economically disadvantaged individuals ( P.L. 100-656 ), women ( P.L. 103-355 , the Federal Acquisition Streamlining Act of 1994), small businesses located within a HUBZone ( P.L. 105-135 ), and small businesses owned and controlled by a service-disabled veteran ( P.L. 106-50 , the Veterans Entrepreneurship and Small Business Development Act of 1999).", "The current federal small business contracting goals are", "at least 23% of the total value of all small business eligible prime contract awards to small businesses for each fiscal year, 5% of the total value of all small business eligible prime contract awards and subcontract awards to small disadvantaged businesses for each fiscal year, 5% of the total value of all small business eligible prime contract awards and subcontract awards to women-owned small businesses, 3% of the total value of all small business eligible prime contract awards and subcontract awards to HUBZone small businesses, and 3% of the total value of all small business eligible prime contract awards and subcontract awards to service-disabled veteran-owned small businesses.", "There are no punitive consequences for not meeting these goals. However, the SBA's Small Business Goaling Report is distributed widely, receives media attention, and serves to heighten public awareness of the issue of small business contracting. For example, agency performance as reported in the SBA's Small Business Goaling Report is often cited by Members during their questioning of federal agency witnesses during congressional hearings.", "As shown in Table 2 , the FY201 7 Small Business Goaling Report , using data in the Federal Procurement Data System, indicates that federal agencies met the federal contracting goal for small businesses generally, small disadvantaged businesses, and service-disabled veteran-owned small businesses in FY2017. ", "Federal agencies awarded 23.88% of the value of their small business eligible contracts ($442.5 billion) to small businesses ($105.7 billion), 9.10% to small disadvantaged businesses ($40.2 billion), 4.71% to women-owned small businesses ($20.8 billion), 1.65% to HUBZone small businesses ($7.3 billion), and 4.05% to service-disabled veteran-owned small businesses ($17.9 billion). ", "The percentage of total reported federal contracts (without exclusions) awarded to those small businesses in FY2017 is also provided in the table for comparative purposes."], "subsections": []}, {"section_title": "Congressional Issues", "paragraphs": ["Congressional interest in the HUBZone program has increased in recent years, primarily due to GAO reports of fraud in the program and efforts by small businesses to ease HUBZone eligibility requirements."], "subsections": [{"section_title": "Program Administration", "paragraphs": ["GAO and the SBA's Office of Inspector General (OIG) have audited the SBA's administration of the HUBZone program on many occasions over the years and have made a number of recommendations to improve the SBA's internal control and oversight practices in an effort to deter fraud in the program. In most instances, the SBA has endeavored to implement these recommendations, but both GAO and the OIG have argued that despite these efforts administrative challenges remain."], "subsections": [{"section_title": "SBA OIG and GAO Audits, 2006-2010", "paragraphs": ["In 2006, the OIG reported that there was a two-year backlog in HUBZone program examinations. It noted that it was concerned \"that workload resources had not been adequately devoted to eliminating this two-year backlog\" and that firms that should be decertified from the program remained on the list of certified HUBZone businesses and potentially were \"inappropriately receiving HUBZone contracts between the time they are initially certified and subsequently examined/recertified.\" In 2008, GAO reported that the map used by the SBA to publicize qualified HUBZone areas was inaccurate, resulting in ineligible small businesses participating in the program and excluding eligible businesses; the mechanisms used by the SBA to certify and monitor HUBZone firms provided limited assurance that only eligible firms participated in the program; the SBA had not complied with its own policy of recertifying HUBZone firms every three years (about 40% of those firms had not been recertified); and the SBA lacked formal guidance that would specify a time frame for processing HUBZone firm decertifications (1,400 of 3,600 firms proposed for decertification had not been processed within the SBA's self-imposed goal of 60 days). In 2008, GAO released another report that \"identified substantial vulnerabilities in SBA's application and monitoring process, clearly demonstrating that the HUBZone program is vulnerable to fraud and abuse.\" Using fictitious employee information and fabricated documentation, GAO obtained HUBZone certification for four bogus firms. In one of its applications, GAO claimed that its principal office was the same address as a coffee store that happened to be located in a HUBZone. GAO argued that if the SBA \"had performed a simple Internet search on the address, it would have been alerted to this fact.\" Two of GAO's applications used leased mailboxes from retail postal services centers. GAO argued that \"a post office box clearly does not meet SBA's principal office requirement.\" In addition, it identified \"10 firms from the Washington, D.C. metro area that were participating in the HUBZone program even though they clearly did not meet eligibility requirements.\" GAO subsequently selected four geographical areas for analysis to determine whether cases of fraud and abuse exist for HUBZone businesses located outside of the Washington, DC, metropolitan area: Dallas, TX; Huntsville, AL; San Antonio, TX; and San Diego, CA. GAO reported in March 2009 that it found \"fraud and abuse\" in all four metropolitan areas, including 19 firms that \"clearly are not eligible,\" and highlighted 10 firms that it \"found to be egregiously out of compliance with HUBZone program requirements.\" In 2010, GAO submitted applications for HUBZone certification for \"four new bogus firms \u2026 using false information and fabricated documents ... fictitious employee information and bogus principal office addresses\" including \"the addresses of the Alamo in Texas, a public storage facility in Florida, and a city hall in Texas as principal office locations.\" The SBA certified three of the four bogus firms and lost GAO's documentation for its fourth application \"on multiple occasions,\" forcing GAO to abandon that application. GAO reported that \"the SBA continues to struggle with reducing fraud risks in its HUBZone certification process despite reportedly taking steps to bolster its controls.\"", "The SBA responded to these audits and congressional criticism of its administration of the HUBZone program by \"reengineering business processes to reduce fraud and abuse within the program.\" In 2006, the SBA committed to reviewing 5% of all certifications \"through a full-scale program of examinations.\" In 2009, it \"moved from verifying a sample of HUBZone firms to verifications of 100% of HUBZone firms receiving contracts in the previous fiscal year.\" In 2010, the SBA reported that its standard HUBZone business process", "now requires all firms to submit supporting documentation verifying the information and statements made in their application. Previous practice required firms only to submit an electronic application.", "In addition, the Program Office implemented a new business process for recertifying HUBZone firms which requires all firms that are due for recertification to certify via wet signature that they still conform to the eligibility requirements. Previous practice required firms to submit an electronic verification.", "On April 21, 2010, Karen Mills, the SBA's Administrator at that time, testified before the House Committee on Small Business that the SBA is \"working to ensure that only legitimate and eligible firms are benefiting from HUBZone\" and has \"made dramatic increases in the number of site visits to HUBZone firms.\" ", "The SBA conducted 680 HUBZone site visits in FY2008, 911 in FY2009, 1,070 in FY2010, 988 in FY2011, 788 in FY2012, 511 in FY2013, 569 in FY2014, 518 in FY2015, 515 in FY2016, 505 in FY2017, and 529 in FY2018.", "The SBA's new, more labor-intensive certification process, coupled with an increase in applications for HUBZone certifications, resulted in what the SBA described as \"significant delays in the processing of new applications for certification.\" Noting that individual applications \"can vary greatly depending on the complexity of the case and the applicant's responsiveness to any requests for supporting information,\" the SBA reported in 2010 that the final HUBZone determination time frames \"vary from 5 months to 12 months, with an average of 8 to 10 months.\" The SBA has since decreased the average time to process HUBZone applications, with about 61% of applications processed in three months or less. ", "As mentioned previously, P.L. 115-91 requires the SBA, effective January 1, 2020, to process HUBZone certification applications with sufficient and complete documentation within 60 days of receipt."], "subsections": []}, {"section_title": "SBA's OIG Audit, 2013", "paragraphs": ["On November 19, 2013, the OIG released the results of an audit of 12 of the 357 firms that received HUBZone certification between July 2012 and December 2012. The 12 firms accounted for 94% of the federal contract dollars awarded to those 357 firms during that time period. ", "The OIG found that 3 of the 12 firms \"received certification without meeting the requirements of the program.\" Specifically, the OIG found \"one firm [that] did not meet the principal office requirement, one firm [that] did not meet the 35% residency requirement, and one instance where a possibly fraudulent application was missed.\" The OIG also noted that ", "the HUBZone program's standard operating procedures (SOP) manual was last updated in November 2007, when firms self-certified their HUBZone eligibility, and does not account for the SBA's new certification process; the SBA did not make its eligibility determination within 30 calendar days of the receipt of a complete application for all 12 of the nonfraudulent applications reviewed as required under the SBA's existing regulations; and the SBA did not make its eligibility determination within its proposed 90 calendars days of the receipt of a complete application, a change to the existing regulations that the SBA is seeking due to the shift from self-certification to full document review, for 5 of the 12 firms.", "The SBA responded to the OIG's audit on November 12, 2013, indicating that it planned to update and publish a new HUBZone program SOP by the end of 2014, issue decertification notices for the three firms cited in the OIG's audit, and amend the certification process \"so that actions are completed within an average of 90 days from the date the application is electronically verified.\" ", "The new HUBZone SOP has not been published. The delay may be related to the SBA's ongoing review of the program's regulations. The SBA has announced that \"several of the regulations governing the program should be amended in order to resolve certain issues that have arisen\" and is working on a proposed rule that \"would constitute a comprehensive revision of part 126 of SBA's regulations to clarify current HUBZone Program regulations and implement various new procedures.\""], "subsections": []}, {"section_title": "SBA's OIG Audit, 2019", "paragraphs": ["On March 28, 2019, the OIG released the results of an audit of 15 of 39 firms that received HUBZone certification and a HUBZone contract between April 1, 2017, and March 31, 2018. The 15 firms obtained approximately $29.4 million in HUBZone contract dollars during that time period. Of these selected firms, five received more than $1 million in HUBZone contracts, five received HUBZone contacts amounting to $100,000 to $999,999, and five received HUBZone contacts amounting to less than $100,000. ", "The OIG found that the SBA \"did not detect indicators of fraud and certified 2 of the 15 firms \u2026 that did not meet principal office location requirements\" and \"certified a third firm \u2026 based on incomplete analysis of supporting documentation\" related to the 35% residency requirement. The OIG questioned $598,000 in contract obligations for these firms and concluded that \"these deficiencies occurred because the Program Office did not have a standardized review process of the analysis of oversight of HUBZone certifications\" and \"did not update its written policies despite a prior OIG audit recommendation to update its HUBZone guidance.\"", "The OIG also found that the SBA did not make its eligibility determinations for 4 of the 15 firms with the 90-day regulatory requirement and \"did not timely assign applications to analysts for certified and pending firms.\" The OIG concluded that these delays were due to \"a lack of formalized guidance, IT issues, and staff turnover.\" ", "The OIG issued five recommendations for the SBA's consideration, including reexamine the three cited firm's eligibility, update and implement HUBZone written guidance, and implement a plan to mitigate information technology issues affecting the HUBZone certification process. The SBA responded to a draft of the OIG's audit on March 14, 2019, indicating that it agreed with all five recommendations and had already reexamined the eligibility of one of the three firms cited in the audit."], "subsections": []}, {"section_title": "Legislation", "paragraphs": ["During the 112 th Congress, S. 633 , the Small Business Contracting Fraud Prevention Act of 2011, which was introduced on March 17, 2011, and agreed to by the Senate, with amendment, by unanimous consent on September 21, 2011, would have required the SBA to implement GAO's recommendations to", "maintain a correct, accurate, and updated map to identify HUBZone areas; implement policies that ensure only eligible firms participate in the program; employ appropriate technology to control costs and maximize efficiency; notify the Small Business Committees of any backlogs in applications or recertifications with plans and timetables for eliminating the backlog; ensure small businesses meet the 35% HUBZone residency requirement at the time of bid as well as at the time of the contract award; and extend the redesignated status of HUBZone areas that lose that status due to the release of economic data from the 2010 decennial census for three years after the first date on which the SBA publishes a HUBZone map that is based on the results from that census.", "In addition, S. 3572 , the Restoring Tax and Regulatory Certainty to Small Businesses Act of 2012, was introduced on September 19, 2012, and referred to the Senate Committee on Finance. It included, among other provisions, the HUBZone provisions contained in S. 633 .", "The SBA did not formally respond to the legislation. It has argued at congressional hearings and in its congressional budget justification documents that it has taken steps to implement GAO's recommendations.", "During the 114 th Congress, P.L. 114-187 , the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), includes a provision requiring the SBA to implement, within 270 days following PROMESA's enactment (which took place on June 30, 2016), a risk-based approach to requesting and verifying information from firms applying to be designated or recertified as a qualified HUBZone small business. GAO is required to begin an assessment of the SBA's risk-based approach within a year of the approach's implementation and complete the assessment, along with any recommendations for improvement, within the following six months. ", "During the 115 th Congress, P.L. 115-91 , the National Defense Authorization Act for Fiscal Year 2018, among other provisions, requires the SBA, starting on January 1, 2020, to \"conduct program examinations of qualified HUBZone small business concerns, using a risk-based analysis to select which concerns are examined, to ensure that any concern examined meets the [program's] requirements.\" The act also specifies that any small business that misrepresented its status as a qualified HUBZone small business concern shall be subject to liability for fraud."], "subsections": []}]}, {"section_title": "Performance Measures", "paragraphs": ["As part of its 2008 audit of the HUBZone program, GAO reported that the SBA had taken \"limited steps\" to assess the effectiveness of the HUBZone program. It noted that the SBA's performance measures\u2014the number of applications approved and recertifications processed, the annual value of federal contracts awarded to HUBZone firms, and the number of program examinations completed\u2014provide data on program activity but \"do not directly measure the program's effect on firms (such as growth in employment or changes in capital investment) or directly measure the program's effect on the communities in which the firms are located (for instance, changes in median household income or poverty levels).\" GAO recommended that the SBA \"further develop measures and implement plans to assess the effectiveness of the HUBZone program that take into account factors such as the economic characteristics of the HUBZone area.\"", "The SBA responded to GAO's findings by announcing that it \"would develop an assessment tool to measure the economic benefits that accrue to areas in the HUBZone program\" and that it \"would then issue periodic reports accompanied by the underlying data.\"", "On March 25, 2009, GAO reported that, as of that date, the SBA had not developed measures or implemented plans to assess the program's effectiveness. GAO noted that the SBA did commission an independent review of the HUBZone program's economic impact. That study was released in May 2008. It concluded that the HUBZone program", "has not generated enough HUBZone contract dollars to have an impact on a national scale. When spread over an eight-year period across 2,450 metropolitan areas and counties with qualified census tracts, qualified counties, and Indian reservations, $6 billion has a limited impact\u2026.", "About two-thirds of HUBZone areas have HUBZone businesses; just under one-third have HUBZone vendors that have won HUBZone contracts; and about 4 percent of HUBZone areas have received annual-equivalent HUBZone contract revenues greater than $100 per capita, based on HUBZone population\u2026.", "The program has a substantial impact in only a very small percentage of HUBZones. Where the impact is largest, there generally is at least one very successful vender in the HUBZone. Thus, the program can be effective. At present, however, the impact in two-thirds of all HUBZones is nil.", "GAO also noted that the SBA had issued a notice in the Federal Register on August 11, 2008, seeking public comment on a proposed methodology for measuring the economic impact of the HUBZone program. The notice presented a two-step economic model that the SBA had developed to estimate the impact on HUBZone areas directly attributable to the HUBZone program, the SBA's non-HUBZone programs, and other related federal procurement programs. The notice indicated that economic impact \"will be measured by the estimated growth in median household income and employment (or a reduction in unemployment) in a specific HUBZone area.\"", "GAO criticized the SBA for relying on public comments to refine the proposed methodology \"rather than conducting a comprehensive effort\" that considered relevant literature and input from experts in economics and performance measurement. GAO concluded that \"based on our review, we do not believe this effort was a sound process for developing measures to assess the effectiveness of the program\" and reported that the SBA had abandoned that proposal and \"had initiated a new effort to address this issue.\"", "The SBA indicated in its FY2011 budget justification report to Congress that it had developed \"a methodology for measuring the economic impact of the HUBZone program\" to \"provide for the continuous study and monitoring of the program's effectiveness in terms of its economic goals.\" However, it did not provide any details concerning the methodology and has continued to use its previous performance measures\u2014the number of small businesses assisted (applications approved and recertifications processed), the annual value of federal contracts awarded to HUBZone firms, and the number of program examinations completed\u2014to assess the program's performance."], "subsections": [{"section_title": "Legislation", "paragraphs": ["During the 112 th Congress, S. 633 would have required the SBA to implement GAO's recommendation to \"develop measures and implement plans to assess the effectiveness of the HUBZone program.\" It also would have required the SBA to identify \"a baseline point in time to allow the assessment of economic development under the HUBZone program, including creating additional jobs\" and take into account \"the economic characteristics of the HUBZone and contracts being counted under multiple socioeconomic subcategories.\"", "The SBA did not formally respond to the legislation. It has argued at congressional hearings and in its congressional budget justification documents that it is taking steps to implement GAO's recommendation. ", "During the 115 th Congress, P.L. 115-91 requires the SBA, starting on January 1, 2020, to publish performance metrics measuring the HUBZone program's success in meeting the program's objective of promoting economic development in economically distressed areas and to submit, not later than 90 days after the last date of each fiscal year, a report to the House Committee on Small Business and the Senate Committee on Small Business and Entrepreneurship \"analyzing the data from the performance metrics.\" Similar provisions were included in H.R. 2592 , the Expanding the Impact of the HUBZone Program Act of 2017, and H.R. 3294 , the HUBZone Unification and Business Stability Act of 2017."], "subsections": []}]}, {"section_title": "Small Business Contracting Goals", "paragraphs": ["As mentioned previously, the federal government has established procurement contracting goals for small businesses generally (at least 23% of the total value of all small business eligible prime contract awards for each fiscal year), small disadvantaged businesses (5% of the total value of all small business eligible prime contract awards and subcontract awards for each fiscal year), women-owned small businesses (5% of the total value of all small business eligible prime contract awards and subcontract awards for each fiscal year), HUBZone small businesses (3% of the total value of all small business eligible prime contract awards and subcontract awards for each fiscal year), and service-disabled veteran-owned small businesses (3% of the total value of all small business eligible prime contract awards and subcontract awards for each fiscal year).", "A number of bills have been introduced over the past several Congresses to increase the small business procurement contracting goals. Generally speaking, the executive branch, during both Democratic and Republican Administrations, has not advocated increasing these goals. Although no official reason has been provided for not advocating an increase in these goals, it is generally recognized that the sitting Administration is often blamed when small business contracting goals are not achieved. Since 2005, the 5% contracting goal for small disadvantaged businesses has been achieved each fiscal year through FY2016, the 23% contracting goal for small businesses generally was achieved five times (23.41% in FY2005, 23.39% in FY2013, 24.99% in FY2014, 25.75% in FY2015, and 24.3% in FY2016), the 3% contracting goal for service-disabled veteran-owned small businesses was achieved four times (3.38% in FY2013, 3.68% in FY2014, 3.28% in FY2015, and 3.98% in FY2016), and the 5% contracting goal for women-owned small businesses was achieved once (5.05% in FY2015). The federal government did not achieve the 3% contracting goal for HUBZone small businesses in any of these fiscal years.", "Because the federal government has frequently not been able to meet most of its small business contracting goals, sitting Administrations have generally been reluctant to advocate an increase in these goals. From the executive branch's perspective, increasing the goals could subject the sitting Administration to a greater risk of being labeled as antibusiness or anti-small business even if the executive branch increases its contracting with small businesses from the previous fiscal year. As a result, proposals to increase the small business contracting goals have originated in the legislative, as opposed to the executive, branch."], "subsections": [{"section_title": "Legislation", "paragraphs": ["Several bills were introduced during the 112 th Congress to increase the federal government's small business contracting goals, including H.R. 2424 , the Expanding Opportunities for Main Street Act of 2011, and its companion bill in the Senate ( S. 1334 ); H.R. 2921 , the Expanding Opportunities for Small Businesses Act of 2011; H.R. 2949 , the Small Business Opportunity Expansion Act of 2011; H.R. 3850 , the Government Efficiency through Small Business Contracting Act of 2012; H.R. 6078 , the Small Business Contracting Opportunities Expansion Act of 2012; and S. 3213 , the Small Business Goaling Act of 2012. In addition, as passed by the House on May 18, 2012, H.R. 4310 , the National Defense Authorization Act for Fiscal Year 2013, included a provision that would have increased the 23% contracting goal for small businesses generally to 25%. The bill would have also established a 40% goal for small businesses generally of the total value of all subcontract awards for each fiscal year. These provisions were subsequently dropped from the bill.", "During the 113 th Congress, S. 259 , the Assuring Contracting Equity Act of 2013, would have increased the federal government's 23% contracting goal for small businesses generally to 25%, raised the 5% contracting goals for small disadvantaged businesses and women-owned small businesses to 10%, and increased the 3% contracting goals for HUBZone small businesses and service-disabled veteran-owned small businesses to 6%. The bill's provisions were reintroduced in both the House and Senate during the 114 th Congress ( H.R. 3175 and S. 1859 ) and the 115 th Congress ( H.R. 2362 and S. 1061 ).", "In addition, H.R. 4093 , the Greater Opportunities for Small Business Act of 2014, which was reported by the House Committee on Small Business on April 9, 2014, would have increased the federal government's 23% contracting goal for small businesses generally to 25% and established a 40% subcontracting goal for small businesses generally. H.R. 4435 , the Howard P. \"Buck\" McKeon National Defense Authorization Act for Fiscal Year 2015, which was passed by the House on May 22, 2014, also contained these two provisions. The Senate's national defense reauthorization bill ( S. 2410 ) did not include this language. Also, H.R. 273 , the Minority Small Business Enhancement Act of 2015, would have increased the federal government's 23% contracting goal for small businesses generally to 25% and the 5% contracting goals for small disadvantaged businesses and women-owned small businesses to 10%.", "Advocates of increasing the federal government's small business contracting goals argue that higher goals are necessary to ensure that small businesses receive \"a fair proportion of the total purchases and contracts for property and services for the government in each industry category.\" They also contend that higher goals will \"increase prime contracting and subcontracting opportunities for small businesses\" and that \"each time the goal has previously been increased, small business contracting, with its inherent benefits, has increased.\"", "During consideration of H.R. 4310 , the National Defense Authorization Act for Fiscal Year 2013, the Obama Administration opposed the House's provisions that would have increased the 23% contracting goal for small businesses generally and established a 40% subcontracting goal for small businesses generally:", "The Administration strongly supports efforts to increase Federal contracting with small businesses, but opposes section 1631, which would establish a laudable but overly ambitious government-wide small business procurement goal and unrealistic individual agency goals that could undermine the goals process and take away the Government's ability to focus its efforts where opportunities for small business contractors are greatest."], "subsections": []}]}]}, {"section_title": "Concluding Observations", "paragraphs": ["Congressional interest in the SBA's HUBZone program has increased in recent years. Debates over the program's effect on economically distressed communities, as reflected in GAO's recommendation for new SBA performance measures; the federal government's difficulty in meeting the 3% contracting goal; the reduction in the number of HUBZone firms; and small business anxiety concerning the increased frequency of HUBZone eligibility determinations have all served to elevate congressional interest in the program. But perhaps the most influential reason for the increased level of congressional interest has been GAO's finding of fraud in the program.", "The SBA has overhauled the program. It reported in its FY2011 congressional budget justification that it had \"met its primary goal during FY2009\" to reengineer its \"business processes to reduce fraud and abuse with the program.\" On April 21, 2010, then-SBA Administrator Karen Mills testified before the House Committee on Small Business that progress has been made but \"we know there's more work to do.\" She testified that \"At the front-end, it means more upfront certification and eligibility. For small businesses already in the program, it means more efforts with compliance and site visits. And if they're found to be out of compliance, it means pursuing and removing bad actors.\" Also, in its FY2013 congressional budget justification, the SBA indicated that", "To further reduce fraud, waste, and abuse, the HUBZone program began the systematic Legacy Portfolio Review of firms that were certified as a HUBZone prior to the FY2009 policy of full document review for initial certification. During FY2011, 2,040 firms completed the Legacy Portfolio Review. The SBA also conducted and received 987 site visit reports from its field staff conveying whether or not the firm appeared to be operating from the HUBZone principal office. This amount is in sharp contrast with the seven site visits that had been conducted in FY2008. In FY2012, the SBA will be rolling out a HUBZone recruitment initiative to target firms that may be HUBZone eligible and educate them on the benefits of the program.", "One of the immediate by-products of the SBA's new business processes was an increase in the processing time for new HUBZone certifications. In the past, the SBA had a self-imposed goal of making those certifications within 30 calendar days after receipt of a complete application package, subject to the need for additional information or clarification of information contained in the application. Now, depending on the complexity of the application and the need for additional information, the SBA reports that it takes, on average, about three months to make those certifications. Concerns about the processing times were reflected in P.L. 115-91 's provision requiring the SBA, effective January 1, 2020, to process HUBZone certification applications with sufficient and complete documentation within 60 days of receipt. It remains to be determined if the SBA's new processes will reduce the incidence of fraud within the program. The resolution of that question could determine the future of the HUBZone program."], "subsections": []}]}}
{"id": "RS20071", "title": "United States Fire Administration: An Overview", "released_date": "2019-04-25T00:00:00", "summary": ["The United States Fire Administration (USFA)\u2014which includes the National Fire Academy (NFA)\u2014is currently housed within the Federal Emergency Management Agency (FEMA) of the Department of Homeland Security (DHS). The objective of the USFA is to significantly reduce the nation's loss of life from fire, while also achieving a reduction in property loss and nonfatal injury due to fire.", "The Consolidated Appropriations Act, 2019 (P.L. 116-6) provided $45.679 million for USFA, including $1.5 million in the FEMA Procurement, Construction, and Improvements account for the National Emergency Training Center. For FY2020, the Administration requested $46.605 million, which includes $1.5 million transferred from the Procurement, Construction, and Improvements account for NETC campus renovations. The budget proposal would be a $1 million increase over the FY2019 level; the increase would fund further improvements to NETC facilities. The budget proposal does not include funding for State Fire Training Assistance.", "On January 3, 2018, the President signed the United States Fire Administration, AFG, and SAFER Program Reauthorization Act of 2017 (P.L. 115-98). P.L. 115-98 extends the USFA authorization through FY2023. The authorization levels are the same as in the previous authorization: $76,490,890 each year for FY2017 through FY2023.", "Meanwhile, concerns over the federal budget deficit could impact future funding levels for the USFA. Debate over the USFA budget has focused on whether the USFA is receiving an appropriate level of funding to accomplish its mission, given that appropriations for USFA have consistently been well below the agency's authorized level. Additionally, an ongoing issue is the viability and status of the USFA and the National Fire Academy within the Department of Homeland Security."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": ["The United States Fire Administration (USFA) is currently an entity within the Federal Emergency Management Agency (FEMA) of the Department of Homeland Security (DHS). Its mission is to provide leadership, coordination, and support for the nation's fire prevention and control, fire training and education, and emergency medical services activities, and to prepare first responders and health care leaders to react to hazard and terrorism emergencies of all kinds. One of USFA's key objectives is to significantly reduce the nation's loss of life from fire, while also achieving a reduction in property loss and nonfatal injury due to fire. Although fire loss has improved significantly over the past 25 years, the fire problem in the United States remains serious. The United States still has one of the highest fire death rates in the industrialized world. According to the National Fire Protection Association (NFPA), in 2015 there were 1,345,500 total fires reported, 3,280 civilian fire deaths, 15,700 civilian fire injuries, and an estimated $14.3 billion in direct property loss. There were 69 on-duty firefighter deaths in 2016.", "The genesis of USFA and FEMA's fire prevention and control activities can be found in the landmark 1973 report of the National Commission on Fire Prevention and Control, entitled America Burning . The commission recommended the creation of a federal fire agency which would provide support to state and local governments and private fire organizations in their efforts to reduce fire deaths, injuries, and property loss. The commission recommended that this new agency be placed within the Department of Housing and Urban Development. Congress instead opted to place the agency in the Department of Commerce, and with the passage of the Federal Fire Prevention and Control Act of 1974 ( P.L. 93-498 ), the National Fire Prevention and Control Administration (NFPCA) was established. In 1978, Congress changed the name of NFPCA to USFA ( P.L. 95-422 ), and in 1979, President Carter's Reorganization Plan No. 3 placed the USFA within the newly created FEMA. Also in 1979, the National Fire Academy (NFA) in Emmitsburg, MD, was opened, offering courses and training to fire service personnel and other persons engaged in fire prevention and control.", "During the early 1980s, the Reagan Administration proposed the elimination of the USFA (while preserving the Fire Academy). Although Congress did not allow the termination of the USFA, the agency suffered severe staff reductions and the Fire Academy was separated from the USFA and housed organizationally with other FEMA emergency training programs. In 1991, the NFA was subsequently reorganized back into the USFA, where it remains today.", "Currently, the USFA is located on the grounds of the National Emergency Training Center in Emmitsburg, MD. USFA programs include the following:", "Data Collection \u2014USFA's National Fire Data Center (NFDC) administers a national system (the National Fire Incident Reporting System or NFIRS) used for collecting, analyzing, and disseminating data and information on fire and other emergency incidents to state and local governments and the fire community. The NFDC provides a national analysis of the fire problem, identifying problem areas for which prevention and mitigation strategies are needed.", "Public Education and Awareness \u2014Through partnerships and special initiatives, USFA involves the fire service, the media, other federal agencies, and safety interest groups in the development and delivery of fire safety awareness and education programs. These programs are targeted at those groups most vulnerable to the hazards of fire, including the young, elderly, and disabled.", "Training \u2014USFA's National Fire Academy (NFA) offers educational opportunities for the advanced professional development of the mid-level and senior fire/EMS officers and allied professionals involved in fire prevention and life safety activities. The academy develops and delivers educational and training programs with a national focus that supplement and support state and local fire service training. The NFA also offers training to support the National Incident Management System Integration Center (NIC) and nationwide implementation of the National Incident Management System (NIMS).", "Research and Technology \u2014Through research, testing, and evaluation, USFA works with public and private entities to promote and improve fire and life safety. Research and special studies are conducted on fire detection, suppression, and notification systems, as well as issues related to firefighter and emergency responder health and safety. Research results are published and made available to the public free of charge through the USFA Publications Center.", "In fulfilling its mission, the USFA uses the assets of the National Fire Academy, the National Emergency Training Center (NETC) Facilities and Support Services, and the National Fire Programs Division.", "On May 18, 2017, President Trump announced his intention to appoint Chief G. Keith Bryant as the USFA Administrator. G. Keith Bryant was sworn in as the U.S. Fire Administrator on August 4, 2017."], "subsections": []}, {"section_title": "Budget", "paragraphs": ["The USFA receives its annual appropriation through the House and Senate Appropriations Subcommittees on Homeland Security. Table 1 shows recent and proposed appropriated funding for USFA."], "subsections": [{"section_title": "Appropriations", "paragraphs": ["Beginning in FY2004, the USFA was funded through the Preparedness, Mitigation, Response, and Recovery (PMRR) account within the Emergency Preparedness and Response Directorate of the Department of Homeland Security. On July 13, 2005, then-DHS Secretary Michael Chertoff announced a restructuring of DHS, effective October 1, 2005. USFA was removed from the PMRR account and received a separate appropriation (its own line item) under the new DHS Directorate for Preparedness. The FY2007 Department of Homeland Security appropriations bill ( P.L. 109-295 ) transferred the USFA back to the Federal Emergency Management Agency within DHS. "], "subsections": [{"section_title": "FY2017", "paragraphs": ["The Administration's FY2017 budget proposed $42.3 million for USFA, a 3.8% decrease from the FY2016 level. The request included $1.5 million for facilities improvement under the Procurement, Construction, and Improvements account. The budget proposal included $500,000 for distance learning capability and reductions of $1 million each for NFIRS and state fire training grants. The budget request would also transfer the stand-alone USFA budget account into the Preparedness and Protection activity under FEMA's broader Federal Assistance account. ", "On May 26, 2016, the Senate Appropriations Committee approved S. 3001 , the Department of Homeland Security Act, 2017. The Senate bill would provide $44 million for USFA, which matches the FY2016 level and is $1.688 million above the request. In the accompanying report ( S.Rept. 114-68 ), the committee stated that the increase over the Administration request should allow for the continued development of NFIRS and support for the National Fallen Firefighters Memorial. The committee maintained a separate budget account for USFA and did not transfer the USFA budget account to the Federal Assistance account as proposed in the Administration budget request.", "On June 22, 2016, the House Appropriations Committee approved its version of the Department of Homeland Security Appropriations Act, 2017. Unlike the Senate, the House committee transferred the USFA budget account into a broader \"Federal Assistance\" account in FEMA. The bill provided $42.5 million for USFA under the Federal Assistance account and $1.5 million under Procurement, Construction, and Improvements for National Fire Academy facility costs.", "The Consolidated Appropriations Act, 2017 ( P.L. 115-31 ) funded USFA at a total level of $44 million in FY2017. This consisted of $42.5 million under Education, Training, and Exercises in the Federal Assistance account, and $1.5 million under the Procurement, Construction, and Improvements account."], "subsections": []}, {"section_title": "FY2018", "paragraphs": ["For FY2018, the Administration requested $43.41 million for USFA, slightly below the FY2017 level of $44 million. The FY2018 level consists of $41.913 million under Education, Training, and Exercises in the Federal Assistance account, and $1.497 million under the Procurement, Construction, and Improvements account. According to the FY2018 budget proposal, the request reflects a $1 million reduction to the State Fire Training Assistance grants.", "On July 18, 2017, the House Appropriations Committee approved the Department of Homeland Security Appropriations Act, 2018 ( H.R. 3355 ; H.Rept. 115-239 ). The bill provided the same level as the Administration request: $41.913 million under Education, Training, and Exercises in the Federal Assistance account, and $1.497 million under the Procurement, Construction, and Improvements account.", "On September 14, 2017, the House passed H.R. 3354 , a FY2018 omnibus appropriations bill that includes funding for USFA. During floor consideration, the House adopted an amendment offered by Representative Pascrell that added $1 million for USFA's State Fire Training Assistance grants, thereby restoring the Administration's proposed reduction. H.R. 3354 would provide a total of $44.41 million for USFA.", "The Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) provided $44.397 million for USFA. This total included $1.497 million in the FEMA Procurement, Construction, and Improvements account for the National Emergency Training Center. State Fire Training Assistance grants continued to be funded by USFA."], "subsections": []}, {"section_title": "FY2019", "paragraphs": ["For FY2019, the Administration requested $44.993 million for USFA. The FY2019 level consisted of $43.493 million under Education, Training, and Exercises in the Federal Assistance account, and $1.5 million for annual capital improvement of the National Emergency Training Center under the Procurement, Construction, and Improvements account.", "On June 21, 2018, the Senate Appropriations Committee approved S. 3109 , the Department of Homeland Security Act, 2019 ( S.Rept. 115-283 ). The Senate bill would provide $44 million to USFA in the Federal Assistance account, $507,000 above the budget request, to ensure the National Fire Academy can fulfill its mission of providing training and professional development without reducing its ability to carry out other important responsibilities. The bill report directed FEMA to continue its traditional funding for the congressionally mandated National Fallen Firefighters Memorial. S. 3109 would also provide $1.5 million for annual capital improvement of the National Emergency Training Center under the Procurement, Construction, and Improvements account.", "On July 25, 2018, the House Appropriations Committee approved its version of the FY2019 Homeland Security bill. Identical to the Administration's budget request, the House bill would provide $43.493 million under Education, Training, and Exercises in the Federal Assistance account, and $1.5 million under the Procurement, Construction, and Improvements account.", "The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provided $45.679 million for USFA, including $1.5 million in the FEMA Procurement, Construction, and Improvements account for the National Emergency Training Center."], "subsections": []}, {"section_title": "FY2020", "paragraphs": ["For FY2020, the Administration requested $46.605 million for USFA, which includes $1.5 million transferred from the Procurement, Construction, and Improvements account for NETC campus renovations. The budget proposal would be a $1 million increase over the FY2019 level; the increase would fund further improvements to NETC facilities. The budget proposal does not include funding for State Fire Training Assistance."], "subsections": []}]}, {"section_title": "Authorizations", "paragraphs": ["The U.S. Fire Administration Reauthorization Act of 2003 ( P.L. 108-169 ) was signed into law on December 6, 2003. The act reauthorized the USFA through FY2008 at the following levels: $63 million for FY2005, $64.85 million for FY2006, $66.796 million for FY2007, and $68.8 million for FY2008. P.L. 108-169 also reestablished the presidentially appointed position of the U.S. Fire Administrator, which had been statutorily abolished by the Homeland Security Act of 2002. Additionally, the legislation directed the USFA to develop new firefighting technologies and standards in coordination with private sector standards groups and federal, state, and local agencies. P.L. 108-169 required that equipment purchased with fire grant money meet or exceed voluntary consensus standards when feasible.", "The U.S. Fire Administration Reauthorization Act of 2008 was signed into law on October 8, 2008 ( P.L. 110-376 ). P.L. 110-376 authorized the USFA at $70 million for FY2009, $72.1 million for FY2010, $74.263 million for FY2011, and $76.491 million for FY2012. Provisions included authorizing National Fire Academy training program modifications and reports; directing the National Fire Academy to provide training on incidents occurring in the wildfire-urban interface, multijurisdictional fires, hazardous materials incidents, and advanced emergency medical services; authorizing USFA to enter into contracts with one or more nationally recognized third-party organizations to deliver training; a report on the feasibility of providing incident command training for fires at ports and in marine environments; national fire incident reporting system upgrades; sponsoring and disseminating research on fire prevention and control at the wildland-urban interface; encouraging adoption of national voluntary consensus standards for firefighter health and safety; establishing a state and local fire service position at the National Operations Center within DHS; providing coordination regarding fire prevention and control and emergency medical services; and expressing congressional support for USFA recommendations for adoption and education regarding sprinklers in commercial and residential buildings.", "On January 2, 2013, the President signed P.L. 112-239 , the FY2013 National Defense Authorization Act. Title XVIII, Subtitle B was the U.S. Fire Administration Reauthorization Act of 2012, which authorized USFA through FY2017. P.L. 112-239 included the following provisions:", "reauthorized USFA at an annual level of $76,490,890 for FY2013 through FY2017, and for each fiscal year sets aside $2,753,672 to be used to carry out Section 8(f) of the Fire Prevention and Control Act (15 U.S.C. 2207) related to evaluation of technology and development of standards; authorized the USFA Administrator to appoint a Deputy Administrator; authorized the Administrator to take such steps as the Administrator considers appropriate to educate the public and overcome public indifference as to fire, fire prevention, and individual preparedness; and removed the limitation on funding levels for updating the National Fire Incident Reporting System.", "In the 115 th Congress, on July 12, 2017, the House Subcommittee on Research and Technology, Committee on Science, Space and Technology, held a hearing entitled U.S. Fire Administration and Fire Grant Programs Reauthorization: Examining Effectiveness and Priorities . Testimony was heard from the USFA acting administrator and from fire service organizations.", "On December 15, 2017, H.R. 4661 , the United States Fire Administration, AFG, and SAFER Program Reauthorization Act of 2017, was introduced by Representative Comstock, which sought to reauthorize the USFA through FY2023. On December 18, 2017, the House passed H.R. 4661 by voice vote under suspension of the rules. On December 21, 2017, the Senate passed H.R. 4661 without amendment by unanimous consent.", "On January 3, 2018, the President signed the United States Fire Administration, AFG, and SAFER Program Reauthorization Act of 2017 ( P.L. 115-98 ). P.L. 115-98 extends the USFA authorization through FY2023. The authorization levels are the same as in the previous authorization: $76,490,890 each year for FY2017 through FY2023, of which $2,753,672 each fiscal year is to be used to carry out Section 8(f) of the Fire Prevention and Control Act (15 U.S.C. 2207) related to evaluation of technology and development of standards. "], "subsections": []}]}, {"section_title": "Assistance to Firefighters Program (FIRE Act Grants)", "paragraphs": ["The Assistance to Firefighters Grant (AFG) Program, also known as the FIRE Act grant program, was established by Title XVII of the FY2001 Floyd D. Spence National Defense Authorization Act ( P.L. 106-398 ). The program provides federal grants directly to local fire departments and unaffiliated Emergency Medical Services (EMS) organizations to help address a variety of equipment, training, and other firefighter-related and EMS needs. A related program is the Staffing for Adequate Fire and Emergency Response Firefighters (SAFER) program, which provides grants for hiring, recruiting, and retaining firefighters.", "Since its inception, the fire grant program has been administered by FEMA/USFA (FY2001-FY2003), the Office for Domestic Preparedness (FY2004), the Office of State and Local Government Coordination Preparedness (FY2005), and the Office of Grants and Training in the DHS Directorate for Preparedness (FY2006). The FY2007 DHS Appropriations Act ( P.L. 109-295 ) transferred USFA to FEMA and the fire and SAFER grants to the Grants Programs Directorate in FEMA. Congressional appropriations reports have consistently instructed DHS to maintain USFA involvement in the grant administration process for AFG and SAFER grants.", "In September 2016, the Government Accountability Office (GAO) released a report entitled Fire Grants: FEMA Could Enhance Program Administration and Performance Assessment. Among its findings, GAO concluded that FEMA has not defined and documented USFA's specific role or responsibilities with the fire grants program, and that there is no formalized relationship or policy regarding how the two organizations' programs could work together. According to GAO", "Although a level of informal coordination exists between GPD [Grant Programs Directorate] and USFA, enhancing these efforts by using collaborative mechanisms that our work across the federal government has identified as key features and issues to consider during implementation\u2014such as clearly defining and agreeing upon USFA's role and responsibilities and documenting agreement regarding how they will be collaborating\u2014could help GPD further leverage USFA expertise and resources in support of the fire grants programs, which could also help GPD manage the integration of fire grants into broader national preparedness efforts.", "In December 2016, the USFA signed an agreement with FEMA's Grant Programs Directorate to provide a framework for each entity's roles and responsibilities for improving the management of the fire grants."], "subsections": []}, {"section_title": "Issues in the 116th Congress", "paragraphs": ["Concerns over the federal budget deficit could impact future funding levels for the USFA. Debate over the USFA budget has focused on whether the USFA is receiving an appropriate level of funding to accomplish its mission, given that appropriations for USFA have consistently been well below the agency's authorized level, and given that USFA's budget has remained flat over recent years.", "The 116 th Congress may also consider whether the role of USFA might be expanded. For example, H.R. 1646 , the Helping Emergency Responders Overcome Act of 2019 (the HERO Act), introduced by Representative Bera on March 8, 2019, would direct USFA, in coordination with the Secretary of Health and Human Services, to develop and make publicly available resources that may be used by the federal government and other entities to educate mental health professionals about the mental health issues and challenges faced by firefighters and emergency medical services personnel.", "Finally, an ongoing issue is the viability and status of the USFA and National Fire Academy within the Department of Homeland Security. While supportive of the reorganization of FEMA into DHS, many in the fire service community have cautioned that USFA and NFA programs\u2014which address the day-to-day challenges faced by fire departments\u2014should not be overshadowed in an organization which focuses on homeland security and counterterrorism. Since the establishment of DHS in March 2003, fire service groups have opposed a number of actions DHS has taken with respect to the USFA and NFA. These included the abolishment of the presidentially appointed position of U.S. Fire Administrator (subsequently reestablished by enactment of the USFA Reauthorization Act of 2003); proposed cancellations of some NFA courses in 2003 due to an across-the-board FEMA budget cut (those NFA courses were subsequently restored after fire service protests); and the transfer of the fire grant program from the USFA to the DHS Office for Domestic Preparedness. "], "subsections": []}]}}
{"id": "R45484", "title": "The Disaster Relief Fund: Overview and Issues", "released_date": "2019-02-01T00:00:00", "summary": ["The Disaster Relief Fund (DRF) is one of the most-tracked single accounts funded by Congress each year. Managed by the Federal Emergency Management Agency (FEMA), it is the primary source of funding for the federal government's domestic general disaster relief programs. These programs, authorized under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, as amended (42 U.S.C. 5121 et seq.), outline the federal role in supporting state, local, tribal, and territorial governments as they respond to and recover from a variety of incidents. They take effect in the event that nonfederal levels of government find their own capacity to deal with an incident is overwhelmed.", "The appropriation which feeds the DRF predates current disaster relief programs and FEMA itself. It dates back to a half-million dollar deficiency appropriation to the President in 1948 that was drafted to allow him to use these resources to provide temporary emergency assistance to communities in the wake of unspecified potential natural disasters. Although the appropriation was provided with one particular Upper Midwest flooding incident in mind, the legislative language allowed the funding to be used more broadly, if the President wished to do so. This policy of providing general disaster relief was a shift from previous policy, which largely left emergency management, disaster relief, and disaster recovery in the hands of other levels of government and private relief organizations. Prior to the development of the general relief program, when the federal government got involved in disaster response and recovery, it was on an ad hoc, case-by-case basis. By comparison, the annual appropriation for the DRF in FY2018\u201470 years after the initial appropriation for general disaster relief\u2014was $7.9 billion.", "The evolving federal role in disaster relief is partially illuminated in the funding stream provided for it through the DRF. What is a fixture of federal policy today was not a given a century ago. Examining the history of the program and its funding through the DRF may help Congress consider future approaches to disaster relief.", "This report introduces the DRF and provides a brief history of federal disaster relief programs. It goes on to discuss the appropriations that fund the DRF, and provides a funding history from FY1964 to the present day, discussing factors that contributed to those changing appropriations levels. It concludes with discussion of how the budget request for the DRF has been developed and structured, given the unpredictability of the annual budgetary impact of disasters, and raises some potential issues for congressional consideration.", "This report is updated on an annual basis."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The Disaster Relief Fund (DRF) is one of the most-tracked single accounts funded by Congress each year.\u00a0Managed by the Federal Emergency Management Agency (FEMA), it is the primary source of funding for the federal government's domestic general disaster relief programs. These programs, authorized under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, as amended (42 U.S.C. 5121 et seq.), outline the federal role in supporting state, local, tribal, and territorial governments as they respond to and recover from a variety of incidents.\u00a0They take effect in the event that nonfederal levels of government find their own capacity to deal with an incident is overwhelmed.", "The current emergency management policy environment assumes this federal role in domestic disaster relief as the default position and the availability of resources through the DRF a necessary requirement. However, this was not always the case. The concept of general disaster relief from the federal government predates both FEMA and the Stafford Act, but federal involvement in relief after natural and man-made disasters was very rare before the Civil War, and was at times considered unconstitutional. Domestic disaster relief efforts became more common after the Civil War, but were not seen as a necessary obligation of the federal government. Standing federal domestic disaster relief programs and a pool of resources to fund them only emerged after the Second World War. Prior to the development of these programs, domestic disaster relief and recovery was a matter for private nongovernmental organizations and state and local governments. ", "Once established, the federal role in domestic disaster response and recovery grew, proving politically popular and resilient despite periodic concerns about management, execution, and budgetary impacts. As the DRF is the source of funding for most general disaster relief programs, it is an indicator of the scope of those programs and the volume of taxpayer-funded aid they provide. Understanding the trends in the growth of the federal government's role in general disaster relief and recovery, and the associated costs of that role, may be useful as Congress considers changes in both emergency management and budgetary policies.", "This report introduces the DRF and outlines how its resources are made available through a series of simple questions, presents a brief history of the federal government's involvement in domestic disaster relief, describes how the request for general disaster relief funding has been formulated over time, and examines the congressional response to those requests. It also provides the funding history for the DRF, and discusses several issues before Congress connected to the fund and the general disaster relief programs it supports."], "subsections": [{"section_title": "What is the Disaster Relief Fund and how is it used?", "paragraphs": ["The DRF is the primary source of funding for the federal government's general disaster relief program\u2014response and recovery efforts pursuant to a range of domestic emergencies and disasters in existing law\u2014as opposed to specific relief and recovery initiatives that may be enacted for individual incidents. "], "subsections": [{"section_title": "What determines whether an incident qualifies as an emergency or disaster?", "paragraphs": ["Under the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( P.L. 93-288 , as amended; hereinafter \"the Stafford Act\"), the President can declare that an emergency exists or a major disaster is occurring. These declarations make state, tribal, territorial, and local governments eligible for a variety of assistance programs, many of which are funded from the DRF. Usually declarations are made at the request of a state, tribal, or territorial government."], "subsections": []}, {"section_title": "Does all federally funded disaster relief come from the DRF?", "paragraphs": ["While the DRF funds Stafford Act disaster relief and recovery programs, several other federal departments and agencies have significant roles in disaster preparedness, relief, recovery, and mitigation. They include the Department of Housing and Urban Development, the Small Business Administration, U.S. Department of Agriculture, U.S. Army Corps of Engineers, and the Department of Health and Human Services. While FEMA may fund some of their activities from the DRF through mission assignments, their larger programs are funded through separate appropriations."], "subsections": []}, {"section_title": "What federal government activities are funded under the DRF?", "paragraphs": ["The role of the federal government has evolved over the years, but emergency response and disaster relief has historically been a federalized \"bottom-up\" operation, starting from the local or tribal governments affected, backed up by the state or territorial government, and then turning to the federal government if their capacity is overwhelmed. The broadening of the federal role has been a factor in which activities are funded under the DRF. ", "Currently, the Federal Emergency Management Agency (FEMA) coordinates federal disaster response and recovery efforts, and manages the DRF, which funds activities in five categories:", "1. Activity pursuant to a major disaster declaration\u2014 This activity represents the vast majority of spending from the DRF. FEMA's primary \"Direct Disaster Programs\" are the Individual Assistance (IA), Public Assistance (PA), and the Hazard Mitigation Grant Program (HMGP) programs. Federal assistance provided by other federal agencies at FEMA's direction through \"mission assignments\" is also paid for from the DRF. 2. Pre declaration surge activities \u2014These are activities undertaken prior to an emergency or major disaster declaration to prepare for response and recovery, such as deploying response teams or prepositioning equipment. 3. Activit y pursuant to an emergency declaration \u2014This is federal assistance to supplement state and local efforts in providing emergency services in any part of the United States. 4. Fire Management Assistance Grants (FMAGs) for large wildfires \u2014This is assistance for the mitigation, management, and control of any fires on public or private lands that could, if unchecked, worsen and result in a major disaster declaration. 5. Disaster Readiness and Support (DRS) activities \u2014These are ongoing, non-incident specific activities that allow FEMA to provide timely disaster response, operate its programs responsively and effectively, and provide oversight of its emergency and disaster programs."], "subsections": []}, {"section_title": "Under what statute is the Disaster Relief Fund authorized?", "paragraphs": ["The DRF is not separately authorized as a distinct entity, but the activities it funds are authorized under the Stafford Act (42 U.S.C. 5121 et seq.)."], "subsections": []}, {"section_title": "Where are appropriations for the Disaster Relief Fund provided?", "paragraphs": ["Since FY1980\u2014FEMA's first annual appropriation\u2014the DRF has been funded through its own appropriation within FEMA's budget, first under the heading \"Disaster Relief,\" and then \"Disaster Relief Fund\" starting in FY2012. FEMA's annual appropriations were first provided through the VA, HUD, and Independent Agencies Appropriations Act, but have been included in the Department of Homeland Security Appropriations act since FY2004. Since the first \"Disaster Relief\" appropriation for FY1948, most of the DRF's appropriations have been provided through supplemental appropriations. "], "subsections": []}, {"section_title": "Are specific Disaster Relief Fund appropriations for specific disasters?", "paragraphs": ["DRF appropriations have historically been provided for general disaster relief, rather than specific presidentially declared disasters or emergencies. ", "The most recent iterations of the accompanying language indicate the funds are provided for the \"necessary expenses in carrying out the Robert T. Stafford Disaster Relief and Emergency Assistance Act,\" thus covering all past and future disaster and emergency declarations. Previous versions of the appropriations language going back to 1950 also referenced the legislation authorizing general disaster relief rather than targeting specific disasters. On a number of occasions, specific disasters have been mentioned in the appropriation, but funding was not specifically directed to one disaster over others. ", "While many disaster supplemental appropriations bills are associated with a specific incident or incidents\u2014such as P.L. 113-2 , \"the Sandy Supplemental\"\u2014the language in that act does not limit the use of the disaster relief appropriation to that specific incident."], "subsections": []}, {"section_title": "How is the DRF being spent?", "paragraphs": ["Since the enactment of P.L. 112-74 , Congress has received regular reporting on spending from the DRF. Monthly reports on such spending since March 2013 are available on FEMA's website. Currently, the reports include information on DRF balances, actual and projected obligations from the DRF for large-scale disasters broken down by disaster declaration, and obligations and expenditures aggregated by incident. These reports also include estimates of the DRF balance through the end of the current fiscal year."], "subsections": []}]}]}, {"section_title": "Historical Context for Federal Disaster Relief Funding", "paragraphs": ["Disaster relief has not always been a part of the mission of the federal government. For nearly 80 years, federal domestic disaster relief was minimal, extremely narrow in scope, and largely ignored the humanitarian side of the relief equation, leaving that to private organizations and local levels of government. Even as the country emerged from the Civil War with more of a national identity and a sense that the federal government could act to provide relief in some circumstances, disaster aid remained limited, responding only after the fact on a case-by-case basis. Only after World War II did the concept emerge of a federal role in responding to disasters broadly defined, led by the President and funded in advance, as opposed to case-by-case responses to needs in the wake of the most severe events led by ad hoc congressional action. Over the ensuing years, the general disaster relief program and its funding grew, adopting concepts of assistance that had been reserved for catastrophic events. In the 1970s, the Federal Emergency Management Agency (FEMA) was established, institutionalizing the federal role in disaster response, recovery, mitigation, and preparedness\u2014the role we recognize today. At the heart of that role is the set of relief programs that have evolved since the 1940s, known collectively as the Stafford Act, which are funded by the Disaster Relief Fund appropriation. "], "subsections": [{"section_title": "1789-1947: Case by Case, After the Fact", "paragraphs": ["The Constitution provides little specific direction on the question of how the United States should confront disasters. While allusions to the intent of the Constitution speak to promoting domestic tranquility and promoting the general welfare, limitations on the federal role in state affairs combined with practical politics of the day to limit federal involvement in disaster relief and recovery in the early years of the country.", "The federal government did provide disaster relief on some occasions. Some observers note at least 128 instances from 1803 to 1947 when natural disasters prompted the federal government to provide some type of ad hoc relief on a case-by-case basis for specific incidents after they occurred. Prior to the Civil War, these measures largely consisted of refunds of duties paid on goods destroyed in customs house fires, allowance for delayed payments of bonds, and land grants for resettlement. ", "Proponents of disaster relief argued that the \"general welfare\" clause of the Constitution warranted the federal role in disaster relief. Opponents did not find this justification convincing, as it was nonspecific, and argued that certain natural disasters (such as flooding of the Mississippi River) were foreseeable, and therefore state and local governments had an obligation to be prepared; that it was improper for the government to provide relief for specific places with money it collected for the common good; and that the federal government could not afford to provide universal relief.", "As the U.S. economy became more robust, federal revenues grew, weakening the position of those in Congress who opposed a federal role in disaster assistance on the basis of the lack of such resources.", "Congressional willingness to provide assistance was not always sufficient to ensure its provision, however. In 1887, President Grover Cleveland vetoed a bill that would have provided $10,000 to pay for seeds for farmers in Texas after a drought, arguing as follows:", "I can find no warrant for such an appropriation in the Constitution; and I do not believe that the power and duty of the General Government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit. A prevalent tendency to disregard the limited mission of this power and duty should, I think, be steadfastly resisted, to the end that the lesson should be constantly enforced that though the people support the Government, the Government should not support the people.", "The friendliness and charity of our countrymen can always be relied upon to relieve their fellow-citizens in misfortune. This has been repeatedly and quite lately demonstrated. Federal aid in such cases encourages the expectation of paternal care on the part of the Government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood.", "Much of the disaster relief provided in this period was nongovernmental in nature. In 1881, Clara Barton founded the American National Red Cross (ANRC), which provided disaster aid from funds it raised from private sources. One year before a catastrophic earthquake struck San Francisco in 1906, revised incorporating legislation for the ANRC tasked the organization with \"mitigating the sufferings caused by pestilence, famine, fire, floods, and other great national calamities, and to devise and carry on measures for preventing the same.\" In the days after the earthquake, President Theodore Roosevelt issued an appeal for assistance from the public to be channeled through the ANRC:", "In the face of so horrible and appalling a national calamity as that which has befallen San Francisco, the outpouring of the nation's aid should, as far as possible, be entrusted to the American Red Cross, the national organization best fitted to undertake such relief work.... In order that this work may be well systematized and in order that the contributions, which I am sure will flow in with lavish generosity, may be wisely administered, I appeal to the people of the United States, to all cities, chambers of commerce, boards of trade, relief committees and individuals to express their sympathy and render their aid by contributions to the American Red Cross.", "While the federal government provided assistance in response and recovery in the San Francisco case on an ad hoc basis, the majority of the assistance provided was through private means. Congress appropriated $2.5 million in the days after the quake for the Secretary of War to provide \"subsistence and quartermaster's supplies ... to such destitute persons as have been rendered homeless or are in needy circumstances as a result of the earthquake and commissary stores to such injured and destitute persons as may require assistance,\" but nonfederal cash contributions to the ANRC and the local relief organizations exceeded $9 million in the two years following the disaster. ", "The ANRC served as the major institutional source of relief for disaster victims in the United States, serving communities and individuals in cooperation with state and local governments with relatively little direct contributions from the federal government for many years. The Red Cross continued to play a leading role in nongovernmental disaster relief as the federal government's role in disaster aid evolved and expanded through the 20 th century and into the 21 st . "], "subsections": []}, {"section_title": "1947-1950: General Disaster Relief Funding from the Federal Government Begins", "paragraphs": ["After the Second World War, the federal government started becoming more involved in disaster relief beyond specific incident-by-incident relief efforts. In 1947, P.L. 80-233 authorized the federal government to provide surplus property to state and local governments for disaster relief under the Disaster Surplus Property Program. Less than eight months later, the Administrator of the Federal Works Agency noted in a letter to President Harry S. Truman that the program would not provide adequate relief to communities over the longer term.", "The next year, Congress made its first appropriation for general disaster relief. The Second Deficiency Appropriation Act, 1948, which was enacted on June 25, 1948, provided funding directly to the President as follows:", "DISASTER RELIEF", "Disaster Relief: To enable the President, through such agency or agencies as he may designate, and in such manner as he shall determine, to supplement the efforts and available resources of State and local governments or other agencies, whenever he finds that any flood, fire, hurricane, earthquake, or other catastrophe in any part of the United States is of sufficient severity and magnitude to warrant emergency assistance by the Federal Government in alleviating hardship, or suffering caused thereby, and if the governor of any State in which such catastrophe shall occur shall certify that such assistance is required, $500,000, to remain available until June 30, 1949, and to be expended without regard to such provisions regulating the expenditure of Government funds or the employment of persons in the Government service as he shall specify: Provided, That no expenditures shall be made with respect to any such catastrophe in any State until the governor of such State shall have entered into an agreement with such agency of the Government as the President may designate giving assurance of expenditure of a reasonable amount of the funds of the government of such State, local governments therein, or other agencies, for the same or similar purposes with respect to such catastrophe: Provided further, That no part of this appropriation shall be expended for departmental personal services: Provided further, That no part of this appropriation shall be expended for permanent construction: Provided further, That within any affected area Federal agencies are authorized to participate in any such emergency assistance.", "Although this legislation comes with broad latitude for the President in expending these funds, this appropriation contained several hallmarks that continue in today's disaster relief structure:", "the President makes the determination that a disaster has occurred, and that federal aid is required; the state has a role in certifying the need and committing state resources to be eligible for federal support; aid is to \"supplement the efforts and available resources of State and local governments or other agencies,\" rather than to fund the entire relief effort; and the President may direct federal agencies to participate in emergency assistance.", "The conditions laid out in this appropriation were echoed in the next two appropriations, provided in 1949, which totaled $1 million."], "subsections": []}, {"section_title": "1950-1966: The Disaster Relief Act of 1950\u2014General Relief and Specific Relief", "paragraphs": ["The Disaster Relief Act of 1950 formalized the structure outlined in the initial appropriations legislation, and indicated for the first time that ", "it is the intent of Congress to provide an orderly and continuing means of assistance by the Federal Government to States and local governments in carrying out their responsibilities to alleviate suffering and damage resulting from major disasters, to repair essential public facilities in major disasters, and to foster the development of such State and local organizations and plans to cope with major disasters as may be necessary.", "Section 8 of the act limited the authorized disaster relief funding to $5 million in total. This restriction did not effectively constrain funding, however. The first supplemental appropriation for general disaster relief authorized under the Disaster Relief Act for 1950 provided $25 million, and a waiver of the Section 8 limitation. The first authorized annual appropriation for general disaster relief was for $800,000, enacted August 31, 1951, less than two months later. Annual appropriations were \"to be available until expended,\" rather than expiring as previous general disaster relief appropriations had, and their use for administrative expenses was statutorily capped at 2% per year. ", "Under the Kennedy and Johnson Administrations, the federal government's role in disaster relief expanded further. Federal general disaster relief programs broadened in 1962, with the inclusion of several American territories, and grants for repair of state facilities. ", "However, Congress still passed specific legislation authorizing relief programs pursuant to other major disasters. In 1964 and 1965, post-disaster legislation provided specific relief for victims of an earthquake in Alaska, flooding in western states, and victims of Hurricane Betsy in Florida, Louisiana, and Mississippi. In a history of disaster relief legislation, one observer described the situation thus:", "In 1962, 1964, and 1965, Congress had sought to preserve P.L. 81-875 [the Disaster Relief Act of 1950] and yet provide disaster assistance in the case of the very big disasters by special legislation only for the states named. Although no one at the time appeared aware that the new types of assistance would become precedents for general legislation, it was in the nature of the system that ultimately they would be reenacted for general use. ", "This would change the following year. "], "subsections": []}, {"section_title": "1966-1974: The Disaster Relief Act of 1966\u2014General Relief Broadens", "paragraphs": ["The Disaster Relief Act of 1966 abolished the Disaster Relief Act of 1950, and revised the general disaster assistance program by providing more assistance to public colleges and universities, as well as authorizing assistance to repair local public facilities. According to some observers, the agencies charged with carrying out most of the disaster relief activity felt the 1966 legislation was unnecessary and the work could be carried out under existing authorities.", "The Disaster Relief Act of 1969 was enacted in response to Hurricane Camille, although the expansion of the federal role in disaster assistance it represented had been included in legislation since 1965. It included broader public and individual assistance, including temporary housing, food assistance, unemployment assistance, and the federal government funding up to half the cost of repair and restoration of public facilities, and providing matching funds to help states develop preparedness plans. Not all of these costs would be borne by the funding provided to the President, and the programs were only authorized through calendar 1970, but they represented a significant broadening of federal government involvement.", "The Disaster Relief Act of 1970 consolidated the previous disaster relief legislation into a single act, and made many of the Camille-driven programs permanent, including a permanent program to provide temporary housing assistance, and programs for debris removal and permanent repair and replacement of state and local public facilities."], "subsections": []}, {"section_title": "1974-Present: The Era of Federally Coordinated Emergency Management", "paragraphs": ["The Disaster Relief Act of 1974 provided for a more robust preparedness program, and introduced the concept of \"emergency\" declarations to accommodate assistance in cases where an incident did not rise to the \"major disaster\" threshold. ", "The Disaster Relief and Emergency Assistance Amendments of 1988 ( P.L. 100-707 , hereinafter DREAA) was enacted 14 years later; it renamed the Disaster Relief Act of 1974 as the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the aforementioned Stafford Act). It made the following programmatic changes:", "Authorized the President to declare an emergency under the Stafford Act in \"any occasion or instance\" in which federal aid is needed\u2014allowing for assistance without a major disaster declaration; Defined a \"major disaster\" as \"any natural catastrophe ... or, regardless of cause, any fire, flood, or explosion, in any part of the United States, which in the determination of the President causes damage of sufficient severity and magnitude to warrant major disaster assistance....\" Established a 75% minimum level of assistance for the immediate response, debris removal, and repair of public facilities; and Provided for a 50/50 cost share for hazard mitigation grants.", "Over the course of the 40 years after the original $500,000 appropriation for general disaster relief with associated programmatic language, the now-renamed Stafford Act and the DREAA are the pieces of legislation that structure the current relationship between the federal and state government in emergency management and disaster relief. These laws, which appear at 42 U.S.C. 5121 et seq., continue to be amended through such vehicles as the Sandy Recovery Improvement Act ( P.L. 113-2 , Division B) and the Disaster Recovery Reform Act of 2018 ( P.L. 115-254 , Division D). Other CRS analyses will address such amendments to the general disaster relief program in detail. "], "subsections": []}]}, {"section_title": "Appropriations for General Disaster Relief", "paragraphs": [], "subsections": [{"section_title": "Types of Appropriations for Disaster Relief", "paragraphs": ["General disaster relief activities by the federal government under the Stafford Act are funded through the appropriations process. Three types of appropriations support these activities:", "Supplemental Appropriations are requested by the Administration on an ad hoc basis, generally to address a need not sufficiently covered in the annual appropriations process. These move on a short timetable and generally do not go through the complete committee process. More than 85% of net appropriations for the DRF have been provided through supplemental appropriations.", "Annual Appropriations: Requested by the Administration in February as a part of the annual budget process, these are expected to be passed by Congress and enacted into law prior to the start of the fiscal year in October. Annual appropriations measures fund the core activities of the government and are developed through the committee process.", "Continuing Appropriations: Provided when annual appropriations work remains unresolved at the beginning of the new fiscal year, these appropriations are temporary budget authority provided at a rate for operations based on the prior fiscal year to allow the government to continue functioning. The measure that provides them is termed a \"continuing resolution,\" or \"CR.\" These continuing appropriations may expire (in the case of an interim CR), or extend to the end of the fiscal year (in the case of a \"long-term\" CR)."], "subsections": [{"section_title": "Supplemental Appropriations for Disaster Relief", "paragraphs": ["The current Disaster Relief Fund concept can trace its birth back to an appropriations bill in the 1940s\u2014the Second Deficiency Appropriations Act, 1948. Deficiency appropriations bills, which provided funding to meet unanticipated needs during the fiscal year, were a forerunner of modern supplemental appropriations bills. As the severity, frequency, and resultant costs to the federal government of the array of disasters that will strike the United States in a given year have always been unpredictable in an annual budgetary context, disaster relief funding frequently has been provided through deficiency, and later supplemental, appropriations.", "When Congress and the Administration began to express concerns about the budget deficit in the 1980s, efforts were made to restrain supplemental spending by limiting it to cases of \"dire emergency.\" With the implementation of budget control in the 1990s, a special designation for emergency spending was created. If both Congress and the Administration agreed certain spending was an emergency requirement, budget limits would be adjusted to accommodate that spending. Congress used the emergency designation on a disaster relief appropriation for the first time in an FY1992 supplemental appropriations act. Congress continues to use emergency designations in supplemental appropriations legislation to provide budgetary flexibility.", "At one point, Congress was statutorily required to use the designation for disaster relief appropriations. Under the terms of the aforementioned FY1992 supplemental appropriations act, beginning in FY1993, Congress required \"all amounts appropriated for disaster assistance payments [under the Stafford Act] that are in excess of either the historical annual average obligation of $320,000,000, or the amount submitted in the President's initial budget request, whichever is lower\" to be designated as emergency requirements under a specific provision of the Balanced Budget and Emergency Deficit Control Act of 1985. This practice of emergency designation above a particular threshold was followed until FY2000, when a clause appeared in the appropriation noting that discretionary appropriations were being provided notwithstanding the restrictions of this section of the U.S. Code. ", "With the passage of the Budget Control Act in 2011, which provided additional budgetary flexibility for the costs for major disasters, supplemental disaster relief appropriations declined in frequency, but remained a primary contributor to balances in the DRF. See the \" DRF Funding History: FY1964-FY2018 \" section below for details."], "subsections": []}, {"section_title": "Annual Appropriations", "paragraphs": ["As was noted above, the first general disaster relief funding was provided in an appropriations act in 1948, and carried its own authorizing provisions. Stand-alone authorization for general disaster relief first came in 1950.", "Once the initial separate authorization was put in place for general disaster relief, appropriations were provided for FY1952, FY1956-FY1958, and FY1962. With the broadening of the relief program to cover more types of damages and the authorization of aid on general terms that had only been made on a case-by-case basis before the mid-1960s, appropriations for general disaster relief became more common\u2014and larger. Annual appropriations for general disaster relief have been provided each year since FY1964, with only two exceptions. Each time this occurred, the DRF was deemed to have an adequate unobligated balance to meet anticipated needs."], "subsections": [{"section_title": "Disaster Relief Designation", "paragraphs": ["As will be discussed later in this report, the adoption of a special designation for the costs of major disasters under the Stafford Act as a part of the Budget Control Act of 2011 ( P.L. 112-25 ) made it easier to provide budget authority to the DRF in the annual appropriations process. In the seven appropriations cycles since the implementation of this designation in FY2012, more budget authority was provided for the DRF in annual appropriations measures than in the 63 prior cycles combined, accounting for inflation.", "Since the FY2013 budget request, FEMA has bifurcated its annual appropriations request between the costs of major disasters\u2014the \"Disaster Relief Category\"\u2014and everything else funded by the DRF\u2014\"Base Disaster Relief,\" which includes funding for emergency designations, fire management assistance, pre-disaster declaration surge activities, and Disaster Readiness and Support Programs. The former category is eligible for the designation as \"disaster relief,\" a designation that triggers an upward adjustment of statutory discretionary spending limits to accommodate it without triggering sequestration. The latter category is not, and scores as discretionary spending."], "subsections": []}]}, {"section_title": "Continuing Appropriations", "paragraphs": ["Even though the DRF is a \"no-year\" fund, and its appropriations are available until expended, it does get temporary replenishment from continuing resolutions (CRs) at times, until its annual appropriations are finalized.", "In FY1982, for the first time, interim general disaster relief funding was provided in a CR through an \"anomaly,\" a provision providing funds at an operating rate different from that base rate of operations provided in the resolution.", "These \"anomaly\" provisions may also provide flexibility that can help avoid some of the complications that can arise under the constraints of operating under continuing appropriations. For example, CRs generally provide funding at a constant rate of operations, with certain restrictions. This can complicate disaster response and recovery, when calls for funding vary in scale and timing from year to year. When FEMA responds to major disasters of significant size while operating under a CR, either FEMA requests special flexibility from the Office of Management and Budget (OMB)\u2014which apportions funding to agencies\u2014or CRs direct flexibility to be provided to ensure adequate resources are available for disaster response and recovery. An example of this can be found in the initial FY2019 CR. Section 124 of Division C of P.L. 115-245 provides that the funds provided under the CR \"may be apportioned up to the rate for operations necessary to carry out response and recovery activities.\" "], "subsections": []}]}, {"section_title": "DRF Funding History: FY1964-FY2018", "paragraphs": ["The following figures show appropriations for the DRF from FY1964 through FY2018. ", "Each fiscal year shows a gross total of annual appropriations and discretionary appropriations (represented by a two-part bar) and a net total (represented by a black mark on each bar), which takes into account rescissions and transfers from the DRF. An inset graphic provides the scale to include funding levels for several outlier years, while showing the detail of appropriations for the more typical years. The first figure shows data in nominal dollars, and the second shows constant FY2018 dollars. ", "The figures show an increase in appropriations for the DRF starting in the 1990s, largely due to increases in supplemental appropriations. Annual appropriations rose significantly in the early 2000s and again starting in FY2013. Even with the surge in appropriations for the 2017 catastrophic series of disasters, which included Hurricane Harvey, Hurricane Maria, and the California wildfires, FY2005 remains the single highest year for appropriations for the DRF, when a series of hurricanes, including Katrina, Rita, and Wilma hit the southeastern United States.", "A table showing the underlying data for each figure appears in the Appendix ."], "subsections": []}, {"section_title": "Factors in Changing Appropriations Levels", "paragraphs": ["FEMA's budget justifications have noted for years, in one form or another, that \"[t]he primary cost driver associated with Major Disasters is disaster activity.\" Although year-to-year disaster relief appropriations are largely driven by disaster activity and ongoing recovery needs, when analyzing historical data over an extended time frame, other factors such as programmatic changes in general disaster relief and certain changes in the budget process may also warrant consideration."], "subsections": [{"section_title": "Incident Frequency and Severity", "paragraphs": ["The two largest factors affecting year-to-year disaster relief appropriations are disaster activity, which varies in frequency and severity, and the ongoing recovery costs from previous disasters. Federal involvement in disaster response and recovery occurs when lower levels of government find their capabilities are overwhelmed and turn to the federal government for help. Reduced (or increased) numbers of calls for relief mean reduced (or increased) need for disaster relief appropriations.", "The incidents that lead to expenditures from the DRF vary in scale. Equally powerful storms may strike a community a glancing blow or a direct hit. An earthquake may hit a rural area, or a major city with complex infrastructure. Stricken communities, states, territories, and tribes have varying levels of preparedness for particular types of disaster. Some observers have noted that as the U.S. population grows and develops property in disaster-prone areas, and as patterns of severe weather shift, the costs of disasters are likely to continue to rise. According to the National Centers for Environmental Information of the National Oceanic and Atmospheric Administration, from 1980 through October 2018, the United States has averaged six weather-related disaster events that each cost $1 billion or more each year. 2016 had 15 such events, 2017 had 16, and 2018, as of October 9, had 11. Spending to help large, complex communities rebuild disaster-damaged facilities and infrastructure and mitigate against future disasters is a significant multiyear cost largely paid for from the Disaster Relief Fund.", "Using Figure 2 , one can contrast this period of high-frequency, high-impact events of the 2010s to the relatively calm period of the 1980s. Without the driver of large disasters, DRF appropriations remained modest. Over the period from FY1981 to FY1991, abnormally low levels of disaster activity led to no supplemental appropriations for 7 of those 11 fiscal years, and no annual appropriations in either FY1984 or FY1991\u2014the only two fiscal years that has occurred since FY1964. By contrast, over the last six years, the DRF has required sustained high levels of appropriations, including three of its five highest total appropriations by fiscal year, even adjusting for inflation. "], "subsections": []}, {"section_title": "Programmatic Changes in Disaster Relief", "paragraphs": ["Over the long term, alterations to the scope of federal disaster relief programs affect the type and level of federal spending when disasters occur. The Disaster Relief Act of 1950 authorized funding to repair local public facilities at the President's discretion. As the brief history above relates, the federal program for general disaster relief has evolved into a much broader program, of which local public facilities is only one facet.", "This evolution has occurred gradually. Some of this evolution was the result of incorporating assistance offered in response to specific disasters in the 1960s and 1970s into the general relief programs under the Stafford Act. Another facet of this evolution was the broadening of the federal role in helping respond to smaller-scale incidents, including proactive declarations prior to potential disasters to reduce their impact. In addition, disaster relief programs funded through the DRF now include disaster mitigation programs that are not limited to mitigating the disaster that triggered them, but are also intended to reduce the impact (and by extension, the cost) of disasters over the long term.", "The impacts of programmatic expansions are reflected in Figure 2 , with the trend of increased general disaster relief appropriations on a small scale associated with expansions under the Disaster Relief Act of 1969 and the Disaster Relief Act of 1970, and on a larger scale with the expansion of programs under the Disaster Relief and Emergency Assistance Amendments of 1988. While the decrease in disaster activities in the 1980s reduced the annual demand for disaster relief appropriations, once the number of declared disasters rose again, and emergencies and mitigation also drew on DRF resources, demand for those resources grew rapidly.", "This evolution continues, with reform legislation frequently following on the heels of exceptionally large disasters, or complexes of disasters. This was the case when the federal response to a series of hurricanes and wildfires in 2017 helped drive interest in the Disaster Recovery Reform Act of 2018."], "subsections": []}, {"section_title": "Changes in the Budget Process", "paragraphs": ["Changes in congressional budget processes have at times been discussed as a means of limiting the budgetary impact of disaster relief spending. However, the budget controls that have been approved and implemented have more often been provided with provisions to ensure disaster relief budget authority remains available if needed.", "Prior to 1985, Congress provided appropriations to fund the federal government without specific statutory limitations on overall spending. The 1985 Balanced Budget and Emergency Deficit Control Act put limits on deficit spending in place. The Budget Enforcement Act of 1990 placed express limits on discretionary spending for the first time.", "The 1990 act also provided an exception to those limits, allowing Congress, together with the President, to declare certain spending to be an emergency requirement, and therefore not subject to those limits. This was used to provide additional appropriations for disaster relief. Although the original set of discretionary limits expired, the emergency spending designation has continued as part of the appropriations process. ", "In 2011, the Budget Control Act ( P.L. 112-25 ) not only reestablished statutory spending limits, but also provided a special designation for the costs of major disasters, in addition to the emergency designation. The amount of funding that can be designated as disaster relief\u2014defined as spending pursuant to a major disaster declaration\u2014is limited by a formula based on past spending on disaster relief. It is not a restriction on how much can be spent on disasters, however\u2014funding in excess of the allowable adjustment for disaster relief is still eligible for an emergency designation. This formula was adjusted by the Bipartisan Budget Act of 2018 to account for emergency-designated spending on disasters. The special designation for disaster spending will expire along with the discretionary spending limits in 2021.", "The impact of these changes in the budget process on disaster relief appropriations appears to be limited to the structure of the total appropriations, rather than the amount. The Congressional Budget Office (CBO) noted that in the 1970s, \"about 5%\" of supplemental funding was for disasters. In a report reviewing supplemental appropriations enacted during the 1980s, CBO indicated that number fell to less than 1%. This can be attributed to the drop in disaster activity discussed above. In a similar report on the 1990s, CBO observed an increase in the use of supplemental appropriations to provide disaster relief, noting the following:", "[I]n the 1990s, Presidents Bush and Clinton tended to request\u2014and the Congress tended to provide in regular appropriations\u2014less than what would eventually be spent in those disaster-related accounts. (Some observers say the underfunding was an effort to keep total appropriations under the [budget enforcement] caps.) When a disaster or emergency arose, the Congress enacted supplemental appropriations during the fiscal year, usually at the request of the President. That supplemental funding was designated emergency spending and was therefore not counted under the discretionary spending caps.", " Figure 1 and Figure 2 do not show a distinct impact of budget controls on the overall level of disaster spending. However, they do show an increase in the amount of funding provided in annual appropriations versus supplemental appropriations starting in FY2012. The addition of the disaster relief designation under the Budget Control Act enabled higher funding levels for disasters in the annual appropriations bills, as disaster relief-designated appropriations did not compete with other appropriations for limited discretionary resources, within the allocations provided to the subcommittee funding FEMA, or within the overall discretionary spending limit. In the early years of the disaster relief designation, this increased annual funding also reduced the frequency and urgency of supplemental appropriations for the DRF. However, Congress has provided emergency-designated relief for catastrophic disasters in supplemental appropriations, whether statutory budget controls were in place or not. "], "subsections": []}]}]}, {"section_title": "Budgeting Practices for Disaster Relief", "paragraphs": [], "subsections": [{"section_title": "Management of Disaster Relief Funds", "paragraphs": ["The responsibility for managing DRF appropriations has shifted among agencies as the general disaster relief function grew. In March 1951, President Truman initially delegated the authority for directing federal agencies in a disaster to the Housing and Home Finance Administrator at the Department of Housing and Urban Development (HUD); then in January 1953 the responsibility was shifted to the Federal Civil Defense Administration in the Department of Defense (DOD). In 1961, the authority was moved within the department to the Office of Civil Defense Mobilization, which had its name changed in 1961 to the Office of Emergency Planning, and changed again in 1968 to the Office of Emergency Preparedness. It remained with that office until its abolishment in 1973, when disaster relief powers were transferred from DOD back to HUD, where those powers were exercised by the Federal Disaster Assistance Administration (FDAA). ", "Although management responsibilities were vested in various parts of the federal bureaucracy, appropriations for general disaster relief were provided directly to the Executive Office of the President from FY1948 through FY1973. For FY1974, funds were still described as \"Funds Appropriated to the President,\" but they were provided within HUD's appropriations. "], "subsections": [{"section_title": "1978: The Creation of the Federal Emergency Management Agency", "paragraphs": ["In 1978, responding to support for a more cohesive emergency management structure at the federal level, President Jimmy Carter issued Reorganization Plan #3, which created the Federal Emergency Management Agency (FEMA). At the time, disaster relief functions were vested in three agencies: the FDAA (at HUD, managing general federal disaster relief), the Federal Preparedness Agency (FPA\u2014part of the General Services Administration); and the Defense Civil Preparedness Agency (DCPA\u2014part of the Department of Defense). This was the first time that emergency management functions at the national level were expressly centralized into a single federal agency. FEMA had a three-part role:", "Mobilizing federal resources, Coordinating federal efforts with state and local governments, and Managing the efforts of the public and private sectors in disaster responses.", "FY1980 was the first year appropriations for \"Disaster Relief\" were provided to FEMA."], "subsections": []}, {"section_title": "Calculation of the Annual Appropriations Request", "paragraphs": ["A review of selected FEMA budget justifications shows how the executive branch has discussed its decision on how much to request for disaster relief."], "subsections": [{"section_title": "\"Past Experience\" and Various Averages", "paragraphs": ["In the early 1980s (1983-1985), FEMA provided justifications for the Disaster Relief appropriation that included management and coordination, individual assistance, and public assistance activities. These activities were also supported under the Emergency Management Planning and Assistance appropriation and the Salaries and Expenses appropriation for FEMA. These justifications noted that actual disaster relief requirements were based on unpredictable external factors. The FY1984 justification noted, \"The budget requests mentioned are based on average projection of disaster occurrence. Any significant change from the projected totals, through either more or larger size incidents, could generate an increased request.\"", "However, despite that uncertainty, a request for a specific budget number leads to questions about the basis for that particular number. In the FY1986 process, FEMA explicitly noted it was projecting its anticipated need \"on the basis of past experience with disasters.\" Between September 1984, when FEMA submitted its budget request to the Office of Management and Budget for review, and February 1985, when the budget justification was provided to Congress, additional \"experience\" was apparently accumulated that reduced the projected demand for disaster relief from $350 million to $275 million.", "By the FY1989 appropriations cycle, the language justifying the request had evolved into \"an assessment of historical averages,\" and included specific data on the average annual disaster relief obligations for a seven-year period, as well as the disaster relief obligations for the most recently concluded fiscal year. The budget justification then included a request, noting the request and the projected obligation data that justified it included $30 million in savings through unspecified \"legislative and administrative reforms.\"", "By the late 1980s and into the 1990s, concerns about deficit spending led to the discussion of budget controls, and ultimately their implementation.", "The FY1992 request highlighted the difficulty in simply using averages of past obligations. According to the justification, the average annual obligation from 1981 to 1989 of $270 million was exceeded by the FY1990 obligation of over $2 billion for costs related to Hurricane Hugo and the Lomo Prieta earthquake.", "The FY1994 request included a great deal of information on prior-year activities, discussing these elements in the context of average levels of obligations, and noting the impact of larger disasters in prior years, but did little to specifically justify the request level of $292 million."], "subsections": []}, {"section_title": "Five-Year Averages (With Exceptions)", "paragraphs": ["For FY1995, the budget discussion evolved, as FEMA justified the request on the basis of the first five years of activities under the Stafford Act, and the series of major disasters that had struck. The use of the five-year average continued through the 1990s and early 2000s, with disaster support costs\u2014the costs of maintaining disaster response capabilities that are not attributable to a specific disaster\u2014included as well. Certain very large disasters were not included in the average. For example, for FY1999, FEMA explicitly excluded the costs of the Northridge earthquake, plus disaster support costs. For FY2003, not only was Northridge excluded from the average, but so were the impacts of the 9/11 terrorist attacks. ", "By FY2009, the justification had again evolved: \"Coupled with funding from recoveries of prior year obligations and unobligated funds carried forward, the appropriation request will fund the five-year average obligation level for direct disaster activity (excluding extraordinary events, such as the terrorist attack of September 11, 2001, the 2004 hurricanes in Florida and other states, and Hurricanes Katrina, Rita, and Wilma in 2005 and 2006 and excluding disaster readiness and support functions).\" In FY2011, the Administration simplified the request language by referring to disasters that cost less than $500 million as \"non-catastrophic disaster activity.\" That year, in addition to the request for the DRF based on the five-year average of \"non-catastrophic\" disaster relief obligations, the Administration made a concurrent request for $3.6 billion for the costs of prior catastrophic storms and wildfires."], "subsections": []}, {"section_title": "The Budget Control Act Era: Ten-Year Averages, Reserves, and Flexibility", "paragraphs": ["The 2010s saw continued debate on deficit spending, coupled with a continuing desire to fund disaster relief programs. When Congress passed the Budget Control Act of 2011 ( P.L. 112-25 ), it created statutory caps on spending as well as a special mechanism to exempt some of the costs of major disasters from those caps. (See \" Changes in the Budget Process \" for details.)", "A $500 million reserve fund was included in the Administration's budget request for FY2012. This was intended to help ensure resources were available on short notice in hurricane season. This rose to $1 billion in FY2015. For FY2019, the reserve request increased to $2 billion \"due to the uncertainty around the availability of additional supplemental funding to continue addressing the 2017 hurricanes.\"", "In FY2013, FEMA shifted from using a 5-year average to using a 10-year average of non-catastrophic obligations, plus the estimated requirements for past catastrophic disasters, plus the reserve, as the basis for their overall DRF request. "], "subsections": []}]}, {"section_title": "Emergency Contingency Funding and Reserve Funds", "paragraphs": ["At times, the Administration and Congress have examined methods of speeding up or broadening the availability of funds to address emergencies and disasters by changing how they were appropriated. Examples of this include the use of contingent appropriations and the proposal to establish a reserve fund for disaster relief."], "subsections": [{"section_title": "Contingent Appropriations", "paragraphs": ["In some of its first exercises of the emergency designation, Congress chose to provide a portion of the appropriation for the DRF as emergency-designated budget authority contingent on the Administration specifically requesting the additional funds and designating them as an emergency requirement. An example of this structure can be found in P.L. 103-75 , a supplemental appropriations bill for FY1993:", "For an additional amount for ''Disaster relief\", $1,735,000,000, and in addition, $265,000,000, which shall be available only to the extent an official budget request for a specific dollar amount, that includes designation of the entire amount of the request as an emergency requirement as defined in the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, is transmitted by the President to Congress, to remain available until September 30, 1997, for the Midwest floods and other disasters: Provided , That the entire amount is designated by Congress as an emergency requirement pursuant to section 251(b)(2)(D)(i) of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, and title I, chapter II, of Public Law 102-229.", "The FY2002 annual disaster relief appropriation was the last annual appropriation that included this type of contingent appropriation. "], "subsections": []}, {"section_title": "Reserve Funds", "paragraphs": ["While current appropriations requests for the DRF include a special appropriated reserve within the DRF for unanticipated catastrophic disasters, the concept of a budgetary reserve fund outside the DRF has also been proposed in the past, which would enable appropriations for broader non-Stafford disaster relief initiatives.", "In FY2002, alongside a request for the DRF that included disaster support costs and funding for prior-year disasters, the Administration proposed the creation a of $5.6 billion National Emergency Reserve allowance to support the costs of \"significant new disasters.\" The DRF, the Small Business Administration (SBA) Disaster Loan Program, and wildfire programs at the Department of Agriculture and Department of the Interior would have been the primary recipients of this funding. The annual reserve would have been established in the budget resolution, and based on the average annual spending on \"extraordinarily large events.\" It would have been allocated to the appropriations subcommittees to fund presidential requests for emergency requirements if two criteria were met: \"the events were sudden, urgent, unforeseen, and not permanent; and adequate funding for a normal year has been provided for the applicable program by the Appropriations Committees.\" Unused reserve amounts could be rolled over into the next year. The proposal was not ultimately adopted."], "subsections": []}]}]}]}, {"section_title": "Issues for Congress", "paragraphs": ["The federal government has defined a role for itself in emergency management and disaster recovery, as a backstop for state, local, territorial, and tribal governments, with roles in providing limited relief for individuals and support for mitigation efforts. FEMA's DRF appropriation funds a great deal of the federal effort. As the DRF appropriation is simply an amount of budget authority provided to support a role in disasters that is defined through separately crafted laws and policies, many of the issues related to the DRF are less about the appropriation than they are about that separately defined federal role."], "subsections": [{"section_title": "Should the purpose of the DRF be rescoped?", "paragraphs": ["Despite the magnitude of funding provided through the DRF for a range of activities and programs, other appropriations support disaster-related activities in other departments and agencies. As noted earlier, HUD, USDA, DOT, DOD, and SBA all fund various disaster relief and recovery programs. ", "At various times in the past, efforts have been made to fund activities through the DRF that are not part of the current portfolio of Stafford Act programs. The Stafford Act already encompasses a wide range of emergency management, disaster relief, and disaster response activities. Making non-Stafford programs eligible for DRF funding is something Congress could choose to do, but it would not provide any obvious policy or budgetary advantage. Existing non-Stafford programs have their own funding streams, management, and oversight. Providing their resources through a new appropriation could complicate their funding stream and congressional oversight. While making the programs eligible for funding from the DRF could make additional budget authority available, it would be more transparent and direct for Congress to simply fund the program through its existing appropriation. ", "There is no special budgetary treatment for appropriations for the DRF\u2014only for appropriations which are designated for the costs of major disasters under the BCA. Shifting discretionary spending out of one appropriations subcommittee's jurisdiction into another provides no overall budgetary benefit\u2014the total amount of spending remains the same. Subcommittee allocations are set and reset every year (sometimes multiple times each year) at the discretion of the House and Senate appropriations committees, so such a move could well result in no net impact on available resources.", "The concept of a broader funding stream providing discretionary resources for DRF, SBA, and USDA disaster relief programs has also been considered before. Such an idea, floated by a previous Administration but rejected by Congress, might have made more resources available in the immediate aftermath of a disaster, but it is not clear that reorganizing funding would make the programs subject to more thorough oversight or make them more effective. It could limit the ability of Congress to provide specific oversight or direction through appropriations to the separate programs.", "Congress could also break up the DRF into appropriations for the individual Stafford Act programs or groups of programs. This might allow for additional specific congressional oversight and direction, but it could reduce the flexibility that exists within the DRF to shift its resources to meet unanticipated disaster needs by segmenting the available resources."], "subsections": []}, {"section_title": "How much is enough to have on hand?", "paragraphs": ["Appropriations are frequently provided on the basis of what can be spent on a project in a given fiscal year. This thinking informs part of the funding request, as it includes a basis of spending on open disasters, where recovery is ongoing. A 10-year average informs the portion of the DRF budget request that pays for response and recovery from disasters that cost less than $500 million. Previous and current Administrations have sought additional reserve funds over and above those projected needs to pay for potential \"no notice\" events. On the other hand, from FY2014 to FY2017, almost $2.5 billion in funding was rescinded from unobligated balances in the DRF. In the present constrained budget environment, Congress continues to weigh the proper level of reserves for FEMA to keep on hand in the DRF."], "subsections": []}, {"section_title": "What accommodations should be made in the federal budget for disaster relief?", "paragraphs": ["While disaster relief is a relatively small part of the discretionary budget, and an even smaller part of the overall federal budget, disaster relief spending is anticipated to continue growing in the coming years. In modern history, Congress has been generally willing to provide resources for major disasters on an as-needed basis. However, discussions of deficit and debt continue in Congress, and may increase in frequency and volume as the Budget Control Act nears expiration in FY2021. The central question is this: Does disaster relief represent enough of a priority for the federal government to maintain the status quo notwithstanding potential increasing costs?", "When budget controls were put in place in the 1980s, 1990s, and 2010s, exceptions were provided to help ensure relief and recovery efforts would continue to be funded. With the expiration of the Budget Control Act statutory caps on discretionary spending, one limitation on disaster relief spending\u2014albeit one with a limited practical effect, as noted above\u2014will go away. The allowable adjustment for disaster relief will expire as well, which may have more of an impact, as Congress has used it to move disaster relief spending more fully into the annual appropriations process. The adjustment has effectively allowed most of the annual DRF appropriation to be provided without competing against other homeland security priorities for the discretionary funding provided under the Homeland Security appropriations subcommittee's allocation. Congress may consider whether they want that process to continue. ", "Congress may also debate whether to try to limit disaster relief spending. The most direct means of doing this would not be to change the DRF appropriation, but by changing the underlying laws that authorize the programs it funds. Implementing relief limits or deductibles for states or smaller jurisdictions, larger nonfederal cost shares, or changes in the declaration process may prove unpopular, and having to vote for them once in more durable authorizing legislation may be more practical than doing so annually in appropriations legislation, which expires. "], "subsections": [{"section_title": "Appendix. General Disaster Relief Appropriations, FY1964-FY2018", "paragraphs": [], "subsections": []}]}]}]}}
{"id": "R45310", "title": "Farm Policy: USDA\u2019s 2018 Trade Aid Package", "released_date": "2019-02-08T00:00:00", "summary": ["In early 2018, the Trump Administration\u2014citing concerns over national security and unfair trade practices\u2014imposed increased tariffs on certain imported products in general and on U.S. imports from China in particular. Several of the affected foreign trading partners (including China) responded to the U.S. tariffs with their own retaliatory tariffs targeting various U.S. products, especially agricultural commodities.", "On July 24, 2018, Secretary of Agriculture Sonny Perdue announced that the U.S. Department of Agriculture (USDA) would be taking several temporary actions to assist farmers in response to trade damage from what the Administration has characterized as \"unjustified retaliation.\" Specifically, the Secretary said that USDA would authorize up to $12 billion in financial assistance\u2014referred to as a trade aid package\u2014for certain agricultural commodities using Section 5 of the Commodity Credit Corporation (CCC) Charter Act (15 U.S.C. 714c). USDA intends for the trade aid package to provide short-term assistance in response to the ongoing trade disputes. However, the Secretary stated that there would not be further trade-related financial assistance beyond this $12 billion package. The aid package includes (1) a Market Facilitation Program (MFP) of direct payments (valued at up to $10 billion) to producers of soybeans, corn, cotton, sorghum, wheat, hogs, and dairy who are most affected by the trade retaliation (sweet cherries and almonds were added to this list in September); (2) a Food Purchase and Distribution Program to partially offset lost export sales of affected commodities ($1.2 billion); and (3) an Agricultural Trade Promotion (ATP) Program to expand foreign markets ($200 million).", "USDA's Farm Service Agency will administer the MFP by providing payments in two potential tranches: a first round announced on August 27, 2018, initially valued at $4.7 billion; and an equivalent-valued second round announced on December 17, 2018. However, producers need only sign up once for the MFP to be eligible for first and second payments. The sign-up period for soybeans, corn, cotton, sorghum, wheat, hogs, and dairy started September 4, 2018. The sign-up period for fresh sweet cherries and shelled almonds started on September 24. To be eligible, a producer must have an ownership share in the commodity, be actively engaged in farming, and be in compliance with adjusted gross income restrictions and conservation provisions. Eligible producers should apply after their harvest is complete. Initially, producers were given a deadline of January 15, 2019, to complete an application. However, USDA extended the deadline until February 14, 2018, due to the government shutdown.", "USDA used 2017 production data to estimate that approximately $9.6 billion would be distributed in MFP payments for corn, cotton, sorghum, soybeans, wheat, dairy, hogs, fresh sweet cherries, and shelled almonds, with over three-fourths ($7.3 billion) of MFP payments provided to soybean producers. MFP payments are capped on a per-person or per-legal-entity basis at a combined $125,000 for eligible crop commodities, a combined $125,000 for dairy production and hogs, and, separately, a combined $125,000 for fresh sweet cherries and shelled almonds.", "In addition to the MFP payments, the Administration announced a Food Purchase and Distribution Program that is to undertake $1.2 billion in government purchases of excess food supplies. USDA has targeted an initial 29 commodities for purchases and distribution through domestic nutrition assistance programs. Purchasing orders and distribution activities are to be adjusted based on the demand by the recipient food assistance programs geographically.", "The smallest piece of the trade aid package is an allocation of $200 million to the ATP to boost the trade promotion efforts at USDA's Foreign Agricultural Service, including foreign market development for affected agricultural products. On January 31, 2019, USDA awarded $200 million to 57 organizations through ATP.", "USDA's use of its discretionary authority under the CCC Charter Act to make direct payments without further congressional action has historically been somewhat intermittent and limited in its scale. While the use of this authority is not without precedent, the scope and scale of this trade aid package has increased congressional and public interest. Furthermore, the significant variation in the announced MFP payment rates for affected commodities has elicited questions about equitable treatment among affected commodities. On September 13, USDA released a description of its MFP payment methodology, which is based strictly on the estimated direct trade \"damage\"\u2014that is, export losses resulting from retaliatory tariffs. Indirect effects\u2014such as the decline in market prices and resultant \"lost value\" for many of the affected commodities\u2014were not included in the payment calculation."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["In early 2018, the Trump Administration\u2014citing concerns over national security and unfair trade practices\u2014imposed increased tariffs on certain imported products in general and on U.S. imports from China in particular. Several of the affected foreign trading partners responded to the U.S. tariffs with their own retaliatory tariffs targeting various U.S. products, especially agricultural commodities.", "On July 24, 2018, Secretary of Agriculture Sonny Perdue announced that the U.S. Department of Agriculture (USDA) would be taking several temporary actions to assist farmers in response to trade damage from what the Administration has characterized as \"unjustified retaliation.\" Specifically, USDA would authorize up to $12 billion in financial assistance\u2014referred to as the \"trade aid\" package\u2014for certain agricultural commodities under Section 5 of the Commodity Credit Corporation (CCC) Charter Act (15 U.S.C. 714c). The Secretary said that most of the funding would go to agricultural commodities most directly affected by the trade retaliation\u2014corn, cotton, soybeans, sorghum, wheat, hogs, and dairy (sweet cherries and almonds were added to this list in September)\u2014but that some funding would also be used for the purchase, distribution, and trade promotion of a variety of affected commodities. ", "The trade-aid package includes a Market Facilitation Program (MFP) of direct payments to affected producers, a Food Purchase and Distribution Program, and an Agricultural Trade Promotion (ATP) program. Payments under the MFP program would be made in two rounds: a first round announced on August 27, 2018, initially valued at $4.7 billion; and an equivalent-valued second round announced on December 17, 2018. Secretary Perdue stated that there would not be further trade-related financial assistance beyond this $12 billion package as producers would be able to adjust their production activities in 2019 to reflect market conditions related to the trade dispute. ", "This report provides background on the trade dispute that triggered the trade-aid package as well as the authority used by USDA to respond to the trade dispute with financial assistance. Then the report describes the three components of the trade-aid package with details on their implementation."], "subsections": []}, {"section_title": "Tariffs as the Origin of the Trade Aid Package", "paragraphs": ["In March 2018, the Trump Administration began applying a 25% tariff to U.S. steel imports and 10% tariff to U.S. aluminum imports from certain countries, citing national security concerns. In April, in response to alleged unfair trade practices by the Chinese government, the Administration placed additional tariffs on a number of Chinese products that are exported to the United States. China, Canada, Mexico, the European Union, and Turkey subsequently enacted retaliatory tariffs on U.S. food and agricultural products, in addition to other goods, in response to the U.S. actions. The retaliatory tariffs from those countries now apply to more than 800 U.S. food and agricultural products across meats, grains, dairy products, specialty and horticultural crops, seafood, and alcoholic beverages. The export value for the targeted products to the retaliating countries totaled about $26.9 billion in 2017\u2014about 18% of total U.S. agricultural exports.", "China, which is subject to the largest set of U.S. tariff increases\u2014including both the U.S. steel and aluminum tariffs and the U.S. tariffs in response to unfair trade practices\u2014also has the most expansive list of retaliatory tariffs. All told, China, which was the second-leading export market by value for U.S. food and agriculture products in 2017, has levied retaliatory tariffs on about 800 U.S. food and agricultural products that were worth about $20.6 billion in exports to that country in 2017. Among China's retaliatory tariffs is a 25% tariff on soybeans, its top agricultural product import by value from the United States. China imported about $12 billion worth of U.S. soybeans in 2017, accounting for 57% of the value of all U.S. soybean exports that year. With the higher tariffs in place, China is now purchasing more soybeans from Brazil and elsewhere to meet its demand. China has also targeted other key U.S. products, including sorghum, wheat, pork and pork offal, dairy products, fruits and nuts, seafood, and whiskey. ", "Among other countries, Canada\u2014the leading export market for U.S. agriculture and food products in 2017\u2014has imposed retaliatory tariffs of 10% on about 20 food and agricultural products, mostly processed foods. U.S. exports of those products to Canada in 2017 were valued at $2.6 billion. Mexico, the third-leading export market for U.S. agriculture and food products by value in 2017, has imposed tariffs ranging from 15% to 25% on cheese, pork, and some prepared foods. U.S. exports of those products to Mexico were valued at about $2.5 billion in 2017. The European Union has levied tariffs on a small number of U.S. prepared foods, corn, and rice, which were worth about $1 billion in 2017. Turkey has imposed retaliatory tariffs on U.S. nuts, rice, and some prepared foods, imports of which amounted to some $250 million in 2017. ", "U.S. agriculture and food products have been targeted with increased tariffs by foreign nations for several reasons. First, the United States exports a large amount of agriculture and food products, so many countries have the choice of retaliating against those goods. Second, agricultural commodities are easily substituted from among potential suppliers, so curbing imports from one country would not necessarily limit an importing country's access to the commodity. For example, China has turned primarily to Brazil for more of its soybean imports. Third, given the geographic nature of the production of some agriculture and food products, countries can target certain goods in order to negatively and disproportionately affect the constituents of specific U.S. lawmakers. For example, all of the retaliating countries have imposed retaliatory tariffs on whiskey, some specifically on Bourbon whiskey, which is largely produced in Kentucky, rather than on all distilled beverages or alcohol more generally. "], "subsections": []}, {"section_title": "Trade Aid Package Authority", "paragraphs": ["The primary authority for the trade aid package is the Secretary of Agriculture's discretion to use the general powers of the CCC. The CCC is a wholly government-owned entity that exists solely to finance authorized programs that support U.S. agriculture. It is federally chartered by the CCC Charter Act of 1948 (P.L. 80-806; 15 U.S.C. 714 et seq. ), as amended. Most CCC-funded programs are classified as mandatory spending programs and therefore do not require annual discretionary appropriations in order to operate. The CCC instead borrows from the U.S. Treasury to finance its programs consistent with its permanent, indefinite authority to borrow up to $30 billion. Congress replenishes the CCC borrowing authority by appropriating funding to cover the CCC's net realized losses.", "Typically, Congress passes laws, such as omnibus farm bills, that specifically direct USDA on how to administer CCC activities and in what amounts to fund them. The underlying authorization for the CCC, however, also provides the Secretary with general powers to take certain actions in support of U.S. agriculture at the discretion of the Secretary. This discretionary use has historically been somewhat intermittent and limited in its scale, but it is the basis of the MFP and ATP announced by the Administration.", "USDA also has discretionary authority to purchase U.S. agricultural commodities under a provision known as Section 32. The name refers to its authorization in Section 32 of the act of August 24, 1935 (P.L. 74-320; 7 U.S.C. 612c), as amended. Most of Section 32's mandatory funding is transferred to the USDA's child nutrition account, but the Secretary has broad discretion in how to spend the remaining unallocated funding\u2014some of which is used to purchase agricultural commodities. The premise is that removing products from normal marketing channels helps to reduce supply and thereby increase prices and farm income. Purchased commodities are diverted to domestic food assistance programs as discussed below (see \" Food Purchase and Distribution Program \"). ", "The Administration's trade aid announcement does not specify whether the CCC or Section 32 authority is being used to make the purchases under the announced Food Purchase and Distribution Program. However, the scale of the $1.2 billion program indicates that the CCC is most likely the source since the typical annual amount of funding available in Section 32 for purchases is rarely more than half of this amount. Whether from the CCC or Section 32, the Administration's purchases appear to use distribution channels similar to those under Section 32."], "subsections": []}, {"section_title": "Trade Aid Package Implementation", "paragraphs": ["On August 27, 2018, Secretary Perdue announced the first round of trade assistance. As part of the August 27 announcement, Secretary Perdue provided details on each of the three trade aid package components, including an initial tranche of $6.1 billion in designated outlays out of a potential $12 billion in total program spending. The MFP was to provide initial estimated direct payments of $4.7 billion to qualifying agricultural producers. A Food Purchase and Distribution Program is to undertake $1.2 billion in government purchases of excess food supplies. The ATP program, funded with an additional $200 million, is to help finance foreign market development for affected agricultural products. On December 17, 2018, Secretary Perdue revised the first round of MFP outlays upward slightly to $4.8 billion, and announced an equivalent $4.8 billion in potential second-round outlays. "], "subsections": [{"section_title": "Market Facilitation Program", "paragraphs": ["The MFP provides direct financial assistance to producers of commodities that are significantly impacted by actions of foreign governments resulting in the loss of traditional exports. USDA initially determined that qualifying commodities include corn, upland cotton, extra-long-staple cotton, sorghum, soybeans, wheat, dairy, and hogs. On September 21, 2018, USDA announced that fresh sweet cherries and shelled almonds are also eligible for MFP payments.", "USDA's Farm Service Agency (FSA) is to administer the MFP by providing payments in two potential tranches. However, producers need only sign up once for the MFP to be eligible for first and second payments. Under the sign-up period, producers can submit MFP applications beginning on the following dates: September 4, 2018, for producers of soybeans, sorghum, corn, wheat, cotton, dairy, and hogs; and September 24, 2018, for producers of shelled almonds and fresh sweet cherries. Eligible producers should apply after their harvest is complete. Initially, producers were given a deadline of January 15, 2019, to complete an application. However, USDA extended the deadline to February 14 due to a partial shutdown of the federal government. The current deadline for producers to certify their 2018 production is May 1, 2019.", "USDA used 2017 production data to estimate that approximately $9.6 billion would be distributed in MFP payments for corn, cotton, sorghum, soybeans, wheat, dairy, hogs, fresh sweet cherries, and shelled almonds, with over three-fourths ($7.3 billion) of MFP payments provided to soybean producers ( Table 1 ). "], "subsections": [{"section_title": "Who Qualifies for a Payment?", "paragraphs": ["U.S. producers of corn, cotton, sorghum, soybeans, wheat, dairy, hogs, fresh sweet cherries, and shelled almonds are eligible for MFP payments at this time. Eligible applicants must", "have an ownership interest in the commodity and be actively engaged; have an average adjusted gross income for tax years 2014, 2015, and 2016 of less than $900,000 per year; comply with the provisions of the \"Highly Erodible Land and Wetland Conservation\" regulations, often called the conservation compliance provisions."], "subsections": []}, {"section_title": "USDA Determination of MFP Per-Unit Payment Rates", "paragraphs": ["USDA determined MFP payments based on its estimated \"direct trade damage\"\u2014that is, the difference in expected trade value for each affected commodity with and without the retaliatory tariffs ( Table A-3 ). The estimated \"trade damage\" for each affected commodity was then divided by the crop's production in 2017 to derive a per-unit payment rate. Indirect effects\u2014such as any decline in market prices and resultant \"lost value\" for many of the affected commodities\u2014are not included in the payment calculation (see Appendix B ). ", "USDA's trade-aid package is thus linking MFP commodity payments only to the trade loss associated with each identified MFP commodity. Neither final trade effect, with or without retaliatory tariffs, is observable because much of the affected agricultural production had yet to be harvested and sold at the time the payment rates were calculated, and markets had yet to fully adjust to whatever new trade patterns would emerge from the trade dispute. As a result, USDA estimated both export values (with and without retaliatory tariffs) using a global trade model that took into account the availability of substitute supplies from export competitors, and the availability of demand for U.S. agricultural exports from alternate importers. "], "subsections": []}, {"section_title": "How Will Farm-Level MFP Payments Be Determined?", "paragraphs": ["MFP payments are tied directly to a producer's actual level of production of eligible commodities in 2018. A producer's total potential MFP payment for an eligible commodity equals the announced payment rate per unit (see column two of Table 1 ) times the harvested (and certified) production during 2018 or in the case of hogs, the inventory during the period of July 15 to August 15, 2018. During the first payment period (announced by USDA on September 27), MFP payments were set equal to the announced MFP payment rate times 50% of a producer's harvested (and certified) production. The second payment rate (announced on December 17) applied to the remaining 50% of the producer's production.", "The MFP is separate from and in addition to the current safety net support provided by the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) support programs or crop insurance coverage where revenue insurance protects against low prices, low yields, or a combination of both. Furthermore, by coupling the payments directly to production, those regions of the country where drought or other yield-reducing factors have negatively impacted production during 2018 may receive less aid through MFP than other regions.", "According to USDA, as of February 7, 2019, $6.4 billion in payments have been made to farmers. FSA offices closed on December 28, 2018, due to a lack of funding under the government shutdown. Producers who have not yet applied for payments or certified their 2018 production must wait for FSA offices to reopen before receiving MFP payments. However, USDA has said that producers that have already applied and certified their 2018 production will continue to receive MFP payments during the government shutdown."], "subsections": []}, {"section_title": "MFP Payment Limit", "paragraphs": ["USDA announced that MFP payments are capped on a per-person or per-legal-entity basis under three separate payment limits: a combined $125,000 for eligible crops (corn, cotton, sorghum, soybeans, and wheat), a combined $125,000 for livestock (dairy production and hogs), and a combined $125,000 for eligible specialty crops (fresh sweet cherries and shelled almonds). Furthermore, MFP payments do not count against other 2014 farm bill payment limitations. There are no criteria in place to calculate whether losses covered under revenue support programs (e.g., ARC and PLC) of the 2014 farm bill might be duplicated by MFP. As a result, the same program acres that are eligible for ARC or PLC payments may be eligible for MFP payments."], "subsections": []}, {"section_title": "WTO Compliance of Trade Retaliation Assistance Payments", "paragraphs": ["Due to its potential price tag ($12 billion) and the coupled nature of the MFP payments, there is considerable interest from policymakers and market observers about whether these payments will be fully compliant with World Trade Organization (WTO) commitments. It would appear that, if the United States restricts MFP payments to $12 billion or less, and its other amber box payments adhere to the recent annual average of $4.9 billion since 2010, then total U.S. amber box payments would be below its $19.1 billion limit on trade-distorting farm subsidies at the WTO. However, several economists have suggested there is considerable uncertainty in how much the eventual MFP payments will be. For example, Darci Vetter, former chief U.S. agricultural negotiator at the Office of the U.S. Trade Representative, said that current low agricultural commodity prices cause her to worry that billions of dollars in \"additional payments will put us over our [amber box] $19 billion cap,\" exposing the United States to a potential legal challenge. Joe Glauber, a former USDA chief economist, stated, \"I would be very hesitant to say categorically, 'No, we're not going to hit our $19.1 [billion ceiling].'\" "], "subsections": []}, {"section_title": "Industry Response to MFP Payment Allocation", "paragraphs": ["While soybean growers and most farm-advocacy groups have generally been supportive of the payments, some commodity groups\u2014most notably associations representing corn, wheat, and milk\u2014contend that the MFP payments are insufficient to fully compensate their industries (see Table A-4 and Appendix B for a comparison of \"trade loss\" and \"market loss\"). The National Corn Growers Association claims that recent trade disputes have lowered corn prices by $0.44/bu. for a loss of $6.3 billion on the projected 2018 harvest. Similarly, the National Association of Wheat Growers estimates that a $0.75/bu. price decrease will result in nearly $2.5 billion in lost value, while the National Milk Producers Federation calculates that milk prices are now estimated to be $1.10/cwt. lower than just prior to the trade retaliation, causing over $1.2 billion in losses based on milk futures prices.", "Many specialty crop groups similarly contend that their interests are not being fully compensated for tariff-related export losses by the USDA trade aid programs. For example, a recent study suggests that, in California alone, specialty crops may suffer trade-related losses of over $3.3 billion this year."], "subsections": []}]}, {"section_title": "Food Purchase and Distribution Program", "paragraphs": ["The Administration is allocating about $1.2 billion of its trade aid package to purchasing various agricultural commodities and distributing them through domestic nutrition assistance programs. USDA typically purchases agricultural commodities for domestic distribution in two ways: (1) \"entitlement purchases\" for the mandated, preplanned needs of a feeding program; and (2) \"contingency purchases\" (also called \"bonus buys\") that are usually triggered as a surplus removal mechanism to raise market prices of a commodity without displacing normal demand. ", "The new $1.2 billion of purchases is under the second category of contingency purchases. Contingency purchases are statutorily authorized under the Secretary's discretion to support agriculture by making purchases under the CCC or Section 32 as discussed above. These are mandatory funds and do not need to be appropriated.", "When USDA purchases commodities, especially for distribution to nutrition assistance programs, the Agricultural Marketing Service (AMS) announces its purchasing intentions with product specifications. Vendors who are approved to sell to USDA may submit offers. The purchased products would be distributed through regular USDA nutrition assistance channels that provide in-kind assistance, such as food banks participating in the Emergency Food Assistance Program, the Commodity Supplemental Food Program, child nutrition programs such as the National School Lunch Program, and the Food Distribution Program on Indian Reservations. However, not all of these programs have the authority to accept contingency/bonus purchases.", "The Administration's August 27 announcement listed 29 commodities targeted for purchases totaling $1.2 billion ( Table A-1 ). It also mentions two additional commodities (sweet cherries and almonds) that total $175 million, with program details to be determined ( Table A-2 ). The announced purchase values were set for each affected commodity using the same gross trade damage formula that was used to calculate the MFP per-unit payment rate described earlier.", "The largest purchases that were announced include pork ($559 million), apples ($93 million), dairy ($85 million), and pistachios ($85 million). USDA said that the breadth of commodities and scale of purchases was based on economic analyses of the effect of tariffs. Purchasing orders and distribution activities are to be adjusted based on the demand by the recipient food assistance programs geographically. As of December 17, 2018, USDA had procured some portion of 16 of the 29 commodities included in the program, totaling more than 4,500 truckloads of food. USDA's AMS will continue purchasing commodities for delivery throughout 2019.", "In FY2017, the AMS purchased $2.2 billion of commodities for distribution for domestic nutrition assistance. Of this total, $735 million was from Section 32 ($270 million in contingency purchases that are most similar to those under the trade aid package and $465 million in entitlement purchases), and $1.5 billion was entitlement purchases from the USDA's Food and Nutrition Service budget. No purchases were made with CCC funds. Thus, the new program of contingency purchases is several times larger than a typical annual amount and a relatively large increase in the amount distributed through nutrition programs."], "subsections": []}, {"section_title": "Agricultural Trade Promotion Program", "paragraphs": ["The third and smallest element of the trade aid package is the ATP program. The Administration is allocating $200 million of the trade aid package to boost trade promotion efforts of USDA's Foreign Agricultural Service (FAS). The program is to operate in a manner similar to FAS's Market Access Program (MAP) and Foreign Market Development Program (FMDP). These funds are to provide cost-share assistance to eligible U.S. agricultural organizations to promote U.S. food and agricultural goods overseas and develop new markets to help offset the adverse effects of the retaliatory tariffs. The money\u2014which would nearly double the amounts made available annually for the MAP and FMDP trade promotion programs for one year\u2014can be used for such activities as consumer advertising, public relations, point-of-sale demonstrations, participation in trade fairs and exhibits, market research, and technical assistance. Further, ATP money is not limited to certain commodities and is to be available to all sectors of agriculture. ", "While the $200 million for ATP is considerably less than the other programs in the trade aid package, it is a notable increase for USDA's trade promotion programs, which are authorized at $234 million annually. Though all sectors of agriculture can apply for ATP funding through eligible U.S. organizations, it is unclear whether USDA intends to give preference to certain commodities\u2014such as those that are not eligible for other programs under the trade aid package or those most impacted by the tariffs.", "The application period for ATP closed in November 2018 with more than $600 million in requested activities from more than 70 organizations. On January 31, 2019, USDA's FAS announced the full $200 million in ATP funding awards."], "subsections": []}]}, {"section_title": "Conclusion", "paragraphs": ["The broad discretionary authority granted to the Secretary under the CCC Charter Act to implement the trade aid package also allows the Secretary to determine how the aid is to be calculated and distributed. Using this authority is not without precedent, but the scope and scale of its use for the trade aid package has increased congressional and public interest. USDA has declared this trade aid package to be a temporary, one-time response to foreign tariffs imposed on selected U.S. commodities. ", "Most farm commodity and advocacy groups have been supportive of the trade aid package even as they have called for solutions that restore export activity.", "However, some stakeholders have begun to question the equity of the distribution of MFP payments due to difficulties in isolating specific market effects and the initial lack of transparency around the formulas for determining MFP payment rates. Now that the formulas are public, several commodity groups question the rationale for determining MFP payments based on \"trade damage\" rather than the broader \"market loss\" measure.", "Some trade economists and market watchers have suggested that the potential effects of the trade aid package and the imposition of tariffs and retaliatory tariffs could be longer lasting because they have created uncertainty about U.S. trade policy behavior and have called into question U.S. reliability as a trading partner. Further, the use of CCC authority to mitigate tariff-related losses may establish a precedent for future situations.", "Appendix A. Food Purchases in the Trade Aid Package", "Appendix B. Trade Loss versus Opportunity Cost", "USDA has elected to base MFP payments strictly on estimated trade loss. In contrast, several commodity groups have calculated the \"lost market value\" and view it as a better measure of the economic damage from the retaliatory tariffs (see \" Industry Response to MFP Payment Allocation \"). These two \"loss\" measures are described here.", "Trade Loss", "Trade loss is the value of lost export sales due to a change in foreign demand ( Table A-3 ). With respect to retaliatory tariffs, it is the difference in U.S. agricultural exports with and without the tariffs. It also appears in USDA export forecasts. For example, in May 2018, USDA forecast U.S. agricultural export sales to China for FY2018 of $21.6 billion; by August 2018, USDA had revised its forecast down to $19 billion and initially projected agricultural export sales to China in FY2019 of only $12 billion. Thus, from May to August the U.S. agricultural export outlook to China had declined by $2 billion, while the FY2019 forecast had fallen by as much as $9 billion. ", "Lost Market Value (or the Opportunity Cost of Missed Sales)", "Lost market value describes the opportunity cost of missed sales associated with a drop in market prices. For example, if soybean prices were $10.00 per bushel in March and $8.00 per bushel in October, the opportunity cost of not selling in March (whether from on-farm stocks or by forward contracting the crop in the field) but instead waiting to sell after harvest in October would be $2.00 per bushel. All physical quantities of a commodity available on the farm\u2014including commodities in storage as well as in the field\u2014are potentially subject to a missed sales opportunity. Furthermore, until the producer actually sells the commodity, the realized market value and true opportunity cost remain unknown. ", "What Is the Correct Cost? ", "If a trade dispute contributes to a drop in the market price of a commodity, then the associated \"lost market value\" would affect all quantities of the affected commodity, whether exported or used domestically. This appears to be the type of \"loss\" being measured by most U.S. commodity groups. However, the retaliatory tariffs are only one of a number of factors that influence market prices. In particular, the outlook for record U.S. soybean and near-record corn harvests in 2018 has likely had an important effect on pressuring market prices lower during the May to September period. This production effect should be excluded from any estimate of trade-based market loss.", "Changes in USDA's monthly price forecasts from May to September may provide an upper-bound estimate of the trade impacts ( Table A-4 ), since this period coincides with the escalating trade conflicts when the retaliatory tariffs were applied. However, they include the production effect and thus likely overstate any trade impact. According to USDA, during the May-September period, farm prices for MFP commodities declined 18% for soybeans, 8% for sorghum, and 8% for corn but rose 2% for wheat and 15% for cotton. At first glance, these price changes seem out of sync with the MFP payment rates. Sorghum could receive a payment rate that is nearly three times as large as its estimated price decline from May to September. In contrast, corn\u2014which has experienced a price decline identical to sorghum\u2014could receive a payment rate that amounts to 3% of the price decline that corn prices experienced over this same period.", "However, given the number of factors influencing market prices over this period, it may not be possible to establish with confidence what market prices would have been in the absence of the retaliatory tariffs. Any viable estimate would have to be generated from a global economic model featuring all major agricultural commodities that compete for land and other inputs in production; may substitute for each other in alternative uses; and captures the interactions of all relevant market factors such as policy, technology, and expected prices, production, and demand. For example, wheat and cotton are to receive per-unit MFP payment rates while experiencing an increase in farm prices during the May-September period. However, 2018 has been a year of poor international wheat harvests, and it could be that wheat prices might have moved to much higher levels in the absence of retaliatory tariffs."], "subsections": []}]}}
{"id": "R41456", "title": "SBA Small Business Investment Company Program", "released_date": "2019-04-04T00:00:00", "summary": ["The Small Business Administration's (SBA's) Small Business Investment Company (SBIC) program is designed to enhance small business access to venture capital by stimulating and supplementing \"the flow of private equity capital and long-term loan funds which small-business concerns need for the sound financing of their business operations and for their growth, expansion, and modernization, and which are not available in adequate supply.\" Facilitating the flow of capital to small businesses to stimulate the national economy was, and remains, the SBIC program's primary objective.", "As of December 31, 2018, there were 305 privately owned and managed SBA-licensed SBICs providing small businesses private capital the SBIC has raised (called regulatory capital) and funds the SBIC borrows at favorable rates (called leverage) because the SBA guarantees the debenture (loan obligation). SBICs pursue investments in a broad range of industries, geographic areas, and stages of investment. Some SBICs specialize in a particular field or industry, and others invest more generally. Most SBICs concentrate on a particular stage of investment (i.e., startup, expansion, or turnaround) and geographic area.", "The SBIC program currently has invested or committed about $30.3 billion in small businesses, with the SBA's share of capital at risk about $14.5 billion. In FY2018, the SBA committed to guarantee $2.52 billion in SBIC small business investments. SBICs invested another $2.98 billion from private capital for a total of $5.50 billion in financing for 1,151 small businesses.", "In recent years, some Members of Congress have argued that the program should be expanded as a means to stimulate economic activity and create jobs. For example, P.L. 113-76, the Consolidated Appropriations Act, 2014, increased the annual amount of leverage the SBA is authorized to provide to SBICs to $4 billion from $3 billion. P.L. 114-113, the Consolidated Appropriations Act, 2016, increased the amount of outstanding leverage allowed for two or more SBIC licenses under common control (the multiple licenses/family of funds limit) to $350 million from $225 million. P.L. 115-187, the Small Business Investment Opportunity Act of 2017, increased the amount of outstanding leverage allowed for individual SBICs to $175 million from $150 million. Others worry that an expanded SBIC program could result in losses and increase the federal deficit. In their view, the best means to assist small business, promote economic growth, and create jobs is to reduce business taxes and exercise federal fiscal restraint.", "Some Members have also proposed that the program target additional assistance to startup and early stage small businesses, which are generally viewed as relatively risky investments but also as having a relatively high potential for job creation. During the Obama Administration, the SBA established a five-year, early stage SBIC initiative. Early stage SBICs are required to invest at least 50% of their investments in early stage small businesses, defined as small businesses that have never achieved positive cash flow from operations in any fiscal year. The SBA stopped accepting new applicants for the early stage SBIC initiative in 2017.", "This report describes the SBIC program's structure and operations, focusing on SBIC eligibility requirements, investment activity, and program statistics. It also includes information concerning the SBIC program's debenture SBIC program, participating securities SBIC program, impact investment SBIC program (targeting underserved markets and communities facing barriers to access to credit and capital), and early stage SBIC initiative."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "SBIC Program Overview", "paragraphs": ["The Small Business Administration (SBA) administers several programs to support small businesses, including loan guaranty programs to enhance small business access to capital; programs to increase small business opportunities in federal contracting; direct loans for businesses, homeowners, and renters to assist their recovery from natural disasters; and access to entrepreneurial education to assist with business formation and expansion. It also administers the Small Business Investment Company (SBIC) program. ", "Authorized by P.L. 85-699, the Small Business Investment Act of 1958, as amended, the SBIC program is designed to \"improve and stimulate the national economy in general and the small-business segment thereof in particular\" by stimulating and supplementing \"the flow of private equity capital and long-term loan funds which small-business concerns need for the sound financing of their business operations and for their growth, expansion, and modernization, and which are not available in adequate supply.\"", "The SBIC program was created to address concerns raised in a Federal Reserve Board report to Congress that identified a gap in the capital markets for long-term funding for growth-oriented small businesses. The report noted that the SBA's loan programs were \"limited to providing short-term and intermediate-term credit when such loans are unavailable from private institutions\" and that the SBA \"did not provide equity financing.\" Equity financing (or equity capital) is money raised by a company in exchange for a share of ownership in the business. Ownership is represented by owning shares of stock outright or having the right to convert other financial instruments into stock. Equity financing allows a business to obtain funds without incurring debt, or without having to repay a specific amount of money at a particular time. The Federal Reserve Board's report concluded there was a need for a federal government program to \"stimulate the availability of capital funds to small business\" to assist these businesses in gaining access to long-term financing and equity financing. Facilitating the flow of capital to small businesses to stimulate the national economy was, and remains, the SBIC program's primary objective.", "The SBA does not make direct investments in small businesses. It partners with privately owned and managed SBICs licensed by the SBA to provide financing to small businesses with private capital the SBIC has raised (called regulatory capital) and with funds (called leverage) the SBIC borrows at favorable rates because the SBA guarantees the debenture (loan obligation). As of December 31, 2018, there were 305 licensed SBICs participating in the SBIC program. In FY2018, the SBA provided $2.52 billion in leverage to SBICs.", "In recent years, some Members of Congress have argued that the program should be expanded as a means to stimulate economic activity and create jobs. For example, P.L. 113-76 , the Consolidated Appropriations Act, 2014, increased the annual amount of leverage the SBA is authorized to provide to SBICs to $4 billion from $3 billion and P.L. 114-113 , the Consolidated Appropriations Act, 2016, increased the amount of outstanding leverage allowed for two or more SBIC licenses under common control (the multiple licenses/family of funds limit) to $350 million from $225 million. In addition, P.L. 115-187 , the Small Business Investment Opportunity Act of 2017, increased the amount of outstanding leverage allowed for individual SBICs to $175 million from $150 million.", "Others worry that an expanded SBIC program could result in losses and increase the federal deficit. In their view, the best means to assist small business, promote economic growth, and create jobs is to reduce business taxes and exercise federal fiscal restraint.", "Some Members and small business advocates have also proposed that the program target additional assistance to startup and early stage small businesses, which are generally viewed as relatively risky investments but also as having a relatively high potential for job creation. For example, during the 113 th Congress, S. 1285 and H.R. 30 , the Small Business Investment Enhancement and Tax Relief Act, would have authorized the Administration to establish a separate SBIC program for early stage small businesses. In addition, as part of the Obama Administration's Startup America Initiative, the SBA established a five-year, $1 billion early stage SBIC initiative in 2012. Early stage SBICs are required to allocate at least 50% of their investments in early stage small businesses, defined as small businesses that have never achieved positive cash flow from operations in any fiscal year. ", "The SBA stopped accepting new applicants for the early stage SBIC initiative in 2017. In addition, on June 11, 2018, the SBA withdrew a proposed rule published on September 19, 2016, to amend the initiative to make it \"more attractive and ... a permanent part of the SBIC program.\" The SBA indicated that it withdrew the proposed rule \"because very few qualified funds applied to the Early Stage SBIC initiative, the costs were not commensurate with the results, and the comments to the proposed rule did not demonstrate broad support for a permanent Early Stage SBIC program.\"", "This report examines the SBIC program's structure and operations, focusing on SBIC eligibility requirements, investment activity, and program statistics. It includes information concerning the SBA's debenture SBIC program, participating securities SBIC program, impact investment SBIC program (targeting underserved markets and communities facing barriers to access to credit and capital), and early stage SBIC initiative. ", "This report also discusses legislative efforts that led to an increase in (1) the maximum annual leverage the SBA is authorized to provide to SBICs and (2) the maximum amount of outstanding leverage allowed for two or more SBIC licenses under common control."], "subsections": []}, {"section_title": "SBIC Types", "paragraphs": ["There are two types of SBICs. Investment companies licensed under Section 301(c) of the Small Business Investment Act of 1958, as amended, are referred to as original , or regular, SBICs. Investment companies licensed under Section 301(d) of the act, called Specialized Small Business Investment Companies (SSBICs), focus on providing financing to small business entrepreneurs \"whose participation in the free enterprise system is hampered because of social or economic disadvantage.\" Section 301(d) was repealed by P.L. 104-208 , the Omnibus Consolidated Appropriations Act, 1997 (Title II of Division D, the Small Business Programs Improvement Act of 1996). As a result, no new SSBIC licenses have been issued since October 1, 1996. However, existing SSBICs were \"grandfathered\" and allowed to remain in the program.", "With few exceptions, SBICs and SSBICs are subject to the same eligibility requirements and operating rules and regulations. Therefore, the term SBIC is usually used to refer to both SBICs and SSBICs.", "Five types of regular SBICs exist. Debenture SBICs, impact investment SBICs, and early stage SBICs receive leverage through the issuance of debentures. Debentures are debt obligations issued by SBICs and held or guaranteed by the SBA. P articipating securities SBICs receive leverage through the issuance of participating securities. Participating securities are redeemable, preferred, equity-type securities, often in the form of limited partnership interests, preferred stock, or debentures with interest payable only to the extent of earnings. Bank-owned , non-leveraged SBICs do not receive leverage. This report focuses on the four types of regular SBICs that receive leverage from the SBA."], "subsections": []}, {"section_title": "SBIC Eligibility Requirements", "paragraphs": ["A SBIC can be organized in any state as either a corporation, a limited partnership (LP), or a limited liability company (LLCs must be organized under Delaware law). Most SBICs are owned by relatively small groups of local investors, although many are partially owned, and some (47 of 305) are wholly owned, by commercial banks. A few SBICs are corporations with publicly traded stock.", "One of the primary criteria for licensure as a SBIC is having qualified management. The SBA reviews and approves a prospective SBIC's management team based upon its professional capabilities and character. Specifically, the SBA examines the SBIC's management team and looks for", "at least two principals with substantive and analogous principal investment experience; realized track record of superior returns, based on an overall evaluation of appropriate quantitative performance measures; evidence of a strong rate of business proposals and investment offers (deal flow) in the investment area proposed for the new fund; a cohesive management team, with complementary skills and a history of working together; managerial, operational, or technical experience that can add value at the portfolio company level; and a demonstrated ability to manage cash flows so as to provide assurance the SBA will be repaid on a timely basis."], "subsections": []}, {"section_title": "SBIC Application Process", "paragraphs": ["Applying for a SBIC debenture license is a multi-step process, beginning with the submission of the SBA Management Assessment Questionnaire (MAQ) and an initial, nonrefundable licensing fee of $10,000. The questionnaire includes, among others, questions concerning", "the fund's legal name and the name and addresses of its principals and control persons; the fund's investment strategy (including geographic focus, industry focus, diversification strategy, primary types of securities to be used, whether it plans to be primarily an equity or debt investor, etc.); the management team's history and professional experience; the fund's investment decisionmaking process, from deal origination to portfolio monitoring; the fund's economics (including a description of the fund's carried interest, the formula used to calculate management fees and the fund's policy on the allocation of fees between the fund and any management or other affiliated entities, details concerning compensation the principals earn outside of this partnership, etc.); the fund's capitalization (including investment strategy, whether a placement agent has been or will be hired, information concerning any third-party borrowing arrangements, etc.); the fund's governance structure (including an organizational chart); and a 10-year financial forecast for the fund.", "After receiving the firm's application, a member of the SBA's Program Development Office reviews the MAQ; assesses the investment company's proposal in light of the program's minimum requirements and management qualifications; performs initial due diligence, including making reference telephone calls; and prepares a written recommendation to the SBA's Investment Division's Investment Committee (composed of senior members of the division).", "If, after reviewing the MAQ and the SBA's Program Development Office's evaluation, the Investment Committee concludes, by majority vote at a regularly scheduled meeting, that the investment company's management team may be qualified for a license, that management team is invited to the SBA's headquarters in Washington, DC, for an in-person interview. If, following the interview, the Investment Committee votes to proceed, the investment company is provided a \"Green Light\" letter formally inviting it to proceed to the final licensing phase of the application process. ", "Once an applicant receives a Green Light letter, the applicant typically has up to 18 months to raise the requisite private capital. During this time frame, the SBA \"keeps in touch with the applicant, conducts SBIC training classes, and provides guidance as needed.\" Final licensing occurs when the SBA accepts an applicant's complete licensing application (consisting of an updated SBA Form 2181 and complete SBA Forms 2182 and 2183), which is submitted after raising sufficient private capital, and receives a final licensing fee, currently $20,000. Obtaining a SBIC license for the first time usually takes six to eight months from the initial MAQ submission to the license issuance.", "As discussed below, new applications for the participating securities program, impact investment program, and early stage SBIC initiative are no longer being accepted. ", "The eligibility requirements and application process for small businesses requesting financial assistance from a SBIC is provided in the Appendix ."], "subsections": []}, {"section_title": "SBIC Capital Investment Requirements", "paragraphs": [], "subsections": [{"section_title": "Debenture SBICs", "paragraphs": ["P.L. 85-699 authorized the SBA to select companies to participate in the SBIC program and to purchase debentures from those companies to provide additional funds to invest in small businesses. Initially, debenture SBICs were required to have a private capital investment of at least $300,000 to participate in the SBIC program. ", "Debenture SBICs are now required to have a private capital investment of at least $5 million (called regulatory capital). The SBA has discretion to license an applicant with regulatory capital of $3 million if the applicant has satisfied all licensing standards and requirements, has a viable business plan reasonably projecting profitable operations, and has a reasonable timetable for achieving regulatory capital of at least $5 million. At least 30% of a debenture SBIC's regulatory and leverageable capital must come from three people unaffiliated with the fund's management and unaffiliated with each other. Also, no more than 33% of a SBIC's regulatory capital may come from state or local government entities."], "subsections": []}, {"section_title": "Participating Securities SBICs", "paragraphs": ["P.L. 102-366 , the Small Business Credit and Business Opportunity Enhancement Act of 1992 (Title IV, the Small Business Equity Enhancement Act of 1992), authorized the SBA to guarantee participating securities. Participating securities are redeemable, preferred, equity-type securities issued by SBICs in the form of limited partnership interests, preferred stock, or debentures with interest payable only to the extent of earnings. ", "In 1994, the SBA established the SBIC Participating Securities Program (SBIC PSP) to encourage the formation of participating securities SBICs that would make equity investments in startup and early stage small businesses. The SBA created the program to fill a perceived investment gap created by the SBIC debenture program's focus on mid- and later-stage small businesses. The SBA stopped issuing new commitments for participation securities on October 1, 2004, beginning a process to end the program, which continues.", "The SBA stopped issuing new commitments for participating securities primarily because the program experienced a projected loss of $2.7 billion during the early 2000s as investments in technology startup and early stage small businesses lost much of their stock value at that time. The SBA found that \"the fees payable by SBICs for participating securities leverage are not sufficient to cover the projected net losses in the participating securities program.\" The SBA continued to honor its existing commitments to participating securities SBICs, which were allowed to continue operations. However, these securities SBICs were required to comply with special rules concerning minimum capital, liquidity, non-SBA borrowing, and equity investing. In recent years, some Members have expressed interest in either revising the program or starting a new program modeled on certain aspects of the SBIC PSP to assist startup and early stage small businesses.", "The SBA is no longer issuing new commitments for participating securities, and each year several participating securities SBICs leave the program because their leverage commitments are retired. As of December 31, 2018, there were 25 participating securities SBICs in the SBIC program, with $18.0 million in outstanding capital at risk. Participating securities SBIC are required to have regulatory capital of at least $10 million. The SBA has discretion to require less than $10 million in regulatory capital if the licensee can demonstrate that it can be financially viable over the long term with a lower amount. In this circumstance, the regulatory amount required may not be lower than $5 million. At least 30% of a participating securities SBIC's regulatory and leverageable capital must come from three people unaffiliated with the fund's management and unaffiliated with each other. Also, no more than 33% of a SBIC's regulatory capital can come from state or local government entities."], "subsections": []}, {"section_title": "Impact Investment SBICs", "paragraphs": ["On April 7, 2011, the SBA announced it was establishing a $1 billion impact investment SBIC initiative (up to $150 million in leverage in FY2012 and up to $200 million in leverage per fiscal year thereafter until the limit is reached). SBA-licensed impact investment SBICs are required to invest at least 50% of their financings, \"which target areas of critical national priority including underserved markets and communities facing barriers to access to credit and capital.\" These areas initially included businesses located in underserved communities (as defined by the SBA), the education sector, and the clean energy sector. Impact investment SBICs are required to have a minimum private capital investment of at least $5 million and are subject to the same conditions as debenture SBICs concerning the source of the funds.", "Initially, an impact investment SBIC could receive up to $80 million in SBA leverage. On June 6, 2013, the SBA announced that it was increasing the maximum leverage available to impact investment SBICs to $150 million.", "Nine impact investment SBICs were licensed (two in 2011, one in 2012, two in 2014, two in 2015, and two in 2016). As of September 30, 2018, they managed more than $905 million in assets and had investments in 81 small businesses. In FY2018, impact investment SBICs invested $106.8 million in 35 small businesses.", "On September 28, 2017, the SBA provided notice to program stakeholders that it would no longer accept new applications to be a licensed impact investment SBIC on or after November 1, 2017. The SBA also announced that it was withdrawing a proposed rule, published on February 3, 2016, that would have provided impact investment SBICs additional benefits \"to encourage qualified private equity fund managers with a focus on social impact to apply to the SBIC program.\" The SBA indicated that the cost of the proposed additional benefits was \"not commensurate\" with the benefits. The SBA also indicated that few qualified SBICs had applied to participate in the program, and that many of the program's participants would have applied to the SBIC program \"regardless of the existence of the [impact investment program].\" "], "subsections": []}, {"section_title": "Early Stage SBICs", "paragraphs": ["On April 27, 2012, the SBA published a final rule in the Federal Register establishing a $1 billion early stage SBIC initiative (up to $150 million in leverage in FY2012 and up to $200 million in leverage per fiscal year thereafter until the limit is reached). As mentioned previously, the SBA is no longer seeking new applicants for the early stage SBIC initiative.", "Early stage SBICs are required to invest at least 50% of their financings in early stage small businesses, defined as small businesses that have never achieved positive cash flow from operations in any fiscal year. In recognition of the higher risk associated with investments in early stage small businesses, the initiative included \"several new regulatory provisions intended to reduce the risk that an early stage SBIC would default on its leverage and to improve SBA's recovery prospects should a default occur.\" For example, early stage SBICs are required to raise more regulatory capital (at least $20 million) than debenture SBICs, impact investment SBICs (at least $5 million), and participating securities SBICs (at least $10 million). They are also subject to special distribution rules to require pro rata repayment of SBA leverage when making distributions of profits to their investors. In addition, early stage SBICs are provided less leverage (up to 100% of regulatory capital, $50 million maximum) than debenture SBICs and participating securities SBICs (up to 200% of regulatory capital, $175 million maximum per SBIC and $350 million for two or more SBICs under common control) and impact investment SBICs (up to 200% of regulatory capital, $175 million maximum).", "On May 1, 2012, the SBA published a notice in the Federal Register announcing its first annual call for venture capital fund managers to submit an application to become a licensed early stage SBIC. Thirty-three venture capital funds submitted preliminary application materials. After these materials were examined and interviews held, the SBA announced on October 23, 2012, that it had issued Green Light letters to six funds, formally inviting them to file license applications. ", "The SBA's second, third, fourth, and fifth annual calls for venture capital fund managers to submit an application to become a licensed early stage SBIC took place on December 18, 2012, February 4, 2014, January 12, 2015, and February 2, 2016, respectively. ", "Five of the 63 investment funds that applied to participate in the program were granted an early stage SBIC license. As of September 30, 2018, the five early stage SBICs had raised $251.3 million in private capital, received $138.4 million in SBA-guaranteed leverage, had $43.7 million in outstanding commitments, and invested $267.5 million in 82 small businesses. In FY2018, early stage SBICs invested $47.1 million in 36 small businesses.", "On September 19, 2016, the SBA published a notice of proposed rulemaking in the Federal Register , which included proposed changes to the early stage SBIC initiative to \"make material improvements to the program\" and \"attract more qualified early stage fund managers.\" The SBA, at that time, indicated its intention to continue the initiative beyond its initial five-year term. ", "As mentioned previously, the SBA stopped accepting new applications for the early stage SBIC initiative in 2017. In addition, on June 11, 2018, the SBA withdrew the September 19, 2016 proposed rule that included provisions designed to encourage qualified SBICs to participate in the initiative."], "subsections": []}]}, {"section_title": "Key Features of Regular SBIC Types", "paragraphs": [" Table 1 provides five key features distinguishing the SBA's debenture SBICs, participating securities SBICs, impact investment SBICs, and early stage SBICs", "the minimum amount of capital required to obtain a license; the amount of SBA leverage that can be received; the nature of the investments provided; a description of the requirements for repaying the SBA's leverage; and any profit participation requirements. "], "subsections": []}, {"section_title": "SBIC Investments in Small Businesses", "paragraphs": ["SBICs provide equity capital to small businesses in various ways, including by", "purchasing small business equity securities (e.g., stock, stock options, warrants, limited partnership interests, membership interests in a limited liability company, or joint venture interests); making loans to small businesses, either independently or in cooperation with other private or public lenders, that have a maturity of no more than 20 years; purchasing debt securities from small businesses, which may be convertible into, or have rights to purchase, equity in the small business; and providing small businesses, subject to limitations, a guarantee of their monetary obligations to creditors not associated with the SBIC.", "SBICs are subject to statutory and regulatory restrictions concerning the nature of their approved investments. For example, SBICs are not allowed to ", "directly or indirectly provide financing to any of their associates (e.g., officers, directors, and employees); control, either directly or indirectly, any small business on a permanent basis; invest, without SBA approval, more than specified percentages of their private (regulatory) capital in securities, commitments, or guarantees in any one small business (e.g., SBICs are not allowed to invest more than 30% of their private capital in any one small business if their investment plan includes two or more tiers of SBA leverage); invest in farmland, unimproved land, or any small business classified under Major Group 65 (Real Estate) of the Standard Industrial Classification (SIC) Manual, with the exception of title abstract companies, real estate agents, brokers, and managers; provide funds for small businesses whose primary business activity involves directly or indirectly providing funds to others, purchasing debt obligations, factoring, or leasing equipment on a long-term basis with no provision for maintenance or repair; or provide funds to a small business if the funds will be used substantially for a foreign operation.", "The SBA also regulates the interest rates and fees SBICs are allowed to charge small businesses on loans, debt securities, and equity financing.", "In 1999, the SBA introduced the low and moderate income investments (LMI) initiative to encourage SBICs to invest in small businesses located in inner cities and rural areas \"that have severe shortages of equity capital\" because investments in those areas \"often are of a type that will not have the potential for yielding returns that are high enough to justify the use of participating securities.\" This ongoing initiative provides incentives to SBICs that invest in small businesses that have at least 50% of their employees or tangible assets located in a low-to-moderate income area (LMI Zone) or have at least 35% of their full-time employees with their primary residence in an LMI Zone. For example, unlike regular SBIC debentures that typically have a 10-year maturity, LMI debentures are available in two maturities, for 5 years and 10 years, plus the stub period. The stub period is the time between the debenture's issuance date and the next March 1 or September 1. The stub period allows all LMI debentures to have common March 1 or September 1 maturity dates to simplify administration of the program.", "In addition, LMI debentures are issued at a discount so that the proceeds that a SBIC receives for the sale of a debenture is reduced by (1) the debenture's interest costs for the first five years, plus the stub period; (2) the SBA's annual fee for the debenture's first five years, plus the stub period; and (3) the SBA's 2% leverage fee. As a result, these interest costs and fees are effectively deferred, freeing SBICs from the requirement to make interest payments on LMI debentures or pay the SBA's annual fees on LMI debentures for the first five years of a debenture, plus the stub period.", "In FY2018, SBICs made 609 investments in small businesses located in a LMI Zone, totaling nearly $1.03 billion\u2014about 18.6% of the total amount invested.", "In 2007, P.L. 110-140 , the Energy Independence and Security Act of 2007, authorized the SBA to issue Energy Saving Debentures for the purpose of making \"Energy Saving Qualified Investments,\" defined in the act as an investment \"in a small business concern that is primarily engaged in researching, manufacturing, developing, or providing products, goods, or services that reduce the use or consumption of non-renewable energy resources.\" Energy Saving Debentures are structured as a discount debenture similar to LMI debentures. For example, there are no interest payments or SBA annual charge for the first five years of the Energy Saving Debenture, plus the stub period between the debenture's issuance date and the next March 1 or September 1 payment date."], "subsections": []}, {"section_title": "Leverage", "paragraphs": [], "subsections": [{"section_title": "Leverage Drawdown", "paragraphs": ["A SBIC applies to the SBA for financial assistance (leverage) to secure the \"SBA's conditional commitment to reserve a specific amount of leverage\" for the SBIC's future use. If the application is approved, a SBIC draws down the leverage as it makes financial commitments.", "The SBA accepts draw applications from SBICs twice a month. When the SBA approves the draw, it issues a payment voucher to a SBIC (called an approval notice). The payment voucher has a term of approximately 60 days and provides a SBIC with the ability to draw funds on a daily basis.", "A debenture is executed in conjunction with each draw and held by an agent of a bank selected by the SBA (Federal Home Loan Bank of Chicago), which provides interim funding to the SBIC until a \"SBIC's debenture(s) can be pooled with others and sold to the public, a process that occurs every six months [each March and September].\" During the interim period, the bank charges a SBIC the London Interbank Offered Rate (LIBOR), plus a 30 basis point premium.", "The SBA determines the size of the debenture pool two weeks prior to each scheduled pooling date. All of \"the debentures scheduled to be pooled are purchased and pooled together by an entity called the Investment Trust which is managed by the Bank of New York Mellon,\" and, as the pooling occurs, \"the SBA signs an agreement with the Trust to guarantee all the interest and principal payments due on each of the debentures in the pool.\" The trust then securitizes the pool of debentures and issues new securities called trust certificates. Underwriters are hired to sell the trust certificates to investors in the public market. An offering circular is issued to notify investors of the trust certificates' availability, the terms of the securities, and information concerning how they can be purchased.", "The SBA operates the SBIC program on a zero-subsidy basis. To recoup its expenses should defaults occur, the SBA is authorized to charge SBICs a 3% origination fee for each debenture and for each participating security issued (1% at commitment and 2% at draw), an annual fee (not to exceed 1.38% for debentures and 1.46% for participating securities) on the leverage drawn, which is fixed at the time of the leverage commitment, and other administrative and underwriting fees that are adjusted annually. "], "subsections": []}, {"section_title": "Debenture SBIC Leverage Requirements", "paragraphs": ["A licensed debenture SBIC in good standing with a demonstrated need for funds may apply to the SBA for financial assistance (leverage) of up to 300% of its private capital. However, the SBA has traditionally approved debenture SBICs for a maximum of 200% of their private capital, and no fund management team may exceed the allowable maximum amount of leverage of $175 million per SBIC and $350 million for two or more licenses under common control. ", "Debenture SBICs obtain leverage from the sale of SBA-guaranteed debenture participation trust certificates. SBA-guaranteed debenture participation trust certificates may have a term of up to 15 years, although only one outstanding SBA-guaranteed debenture participation trust certificate has a term exceeding 10 years and all recent public offerings have specified a term of 10 years. Debenture SBICs are required to make semiannual payments on the interest due on the debenture, semiannual payments on the SBA's annual charge, and a lump sum principal payment to investors at maturity. SBICs are allowed to prepay SBA-guaranteed debentures without penalty. However, a SBA-guaranteed debenture must be prepaid in whole and not in part and can only be prepaid on a semiannual payment date. The debenture's coupon (interest) rate is determined by market conditions and the interest rate of 10-year Treasury securities at the time of the sale. Also, as mentioned previously, LMI debentures are available in two maturities, for 5 years and 10 years (plus the stub period).", "Because the SBA guarantees the debenture, investors are more likely to purchase a debenture participation trust certificate as opposed to others available on the market. They are also more likely to accept a lower coupon (interest) rate than what would be expected without the SBA's guarantee. As a result, the SBIC program enhances a SBIC's access to venture capital and reduces its cost of raising additional financial resources.", "Because debenture SBICs are required to make semiannual interest payments on the debenture and semiannual payments on the SBA's annual charge, they tend to focus their investments on mid- and later-stage small businesses that have a positive cash flow. Businesses with a positive cash flow have resources available to make payments to the debenture SBIC, either in the form of interest payments or dividends. In many instances, small businesses with positive cash flow are seeking capital for expansion."], "subsections": []}, {"section_title": "Participating Securities SBIC Leverage Requirements", "paragraphs": ["Although the SBA is no longer issuing new commitments for participating securities, the SBA is authorized to accept an application from licensed participating securities SBICs for leverage of up to 200% of their private capital. Also, no fund management team may exceed the allowable maximum amount of leverage of $175 million per SBIC and $350 million for two or more licenses under common control.", "Participating securities SBICs obtained leverage by issuing SBA-guaranteed participating securities. The SBA pooled these participating securities and sold SBA-guaranteed participating securities certificates, representing an undivided interest in the pool, to investors through periodic public offerings. SBA participating securities may have a term of up to 15 years, but all recent public offerings had a specified a term of 10 years.", "There were 35 public offerings of SBA-guaranteed participating securities certificates since the start of the participating securities program, amounting to just under $10.3 billion. The final SBA-guaranteed participating securities certificate, for $332 million, had a term of 10 years and was offered to investors on February 19, 2009, with delivery of the certificates on February 25, 2009.", "SBIC participating securities certificates provide for quarterly payments to investors from dividends on preferred stock, interest on an income bond, or a priority return on a preferred limited partnership equal to a specified interest rate on the principal amount and a lump sum principal payment at maturity. A participating securities SBIC is obligated to make these quarterly payments \"only to the extent it has sufficient profits available to make such payments.\" If a participating securities SBIC is unable to make any required payment, the SBA will make the payment on its behalf. Because startup and early stage small businesses often are not initially profitable, the SBA included language in its participating securities' offering circulars that it \"anticipates that it will be called upon routinely to make such \u2026 payments for the SBICs in the early years of the lives of such SBICs\" and that it \"expects to be reimbursed [by the SBIC] any amounts paid \u2026 under its guarantee over the life of a participating security.\"", "Because the SBA guaranteed the certificate, investors were more likely to purchase a SBIC participating securities certificate as opposed to others available on the market. They were also more likely to accept a lower payment rate than what would be expected without the SBA's guarantee.", "In addition, participating securities SBICs are more likely than debenture SBICs to invest in startup and early stage small businesses because the SBA is willing to make a participating securities SBIC's required quarterly payments to investors, at least during the early years of the investment. Because participating securities SBICs are not required to make these quarterly payments, they are encouraged to focus on a small business's long-term prospects for growth and profitability rather than on its prospects for having immediate, positive cash flow.", "As of December 31, 2018, the SBA had a guarantee on an outstanding unpaid principal balance of $11.3 billion in SBIC debentures, $18.0 million in SBIC participating securities, and $56.7 million in other, primarily SSBIC, financings. The SBA also had an outstanding commitment on $3.4 billion in SBIC debentures and $2.6 million in other, primarily SSBIC, financings."], "subsections": []}, {"section_title": "Impact Investment SBIC Leverage Requirements", "paragraphs": ["The SBA established the Impact Investment SBIC Initiative in 2011 to \"target areas of critical national priority including underserved markets and communities facing barriers to access to credit and capital.\" On July 26, 2011, the SBA announced that the first impact investment SBIC license had been awarded to InvestMichigan! Mezzanine Fund. ", "Licensed impact investment SBICs may apply to the SBA for leverage of up to 300% of their private capital, limited to $175 million. In addition, they may receive leverage amounting to no more than 100% of their private capital during any fiscal year (subject to the $175 million limit). The SBA generally limits impact investment SBICs to a maximum of 200% of their private capital, up to $175 million.", "Impact investment SBICs obtain leverage in the same way debenture SBICs obtain leverage\u2014through the issuance of SBA-guaranteed debentures with a term of up to 10 years. They are also subject to the same terms and conditions as debenture SBICs, except they were provided an expedited application review process when new applications to the impact investment program were being accepted."], "subsections": []}, {"section_title": "Early Stage SBIC Leverage Requirements", "paragraphs": ["The SBA established the Early Stage Innovation SBIC Initiative in 2012 to \"expand access to capital for early stage small businesses throughout the United States.\" A licensed early stage SBIC may apply to the SBA for leverage of up to 100% of its private capital, limited to $50 million. The SBA does not consider applications for leverage from an early stage SBIC applicant that is under common control with another early stage SBIC applicant or an existing early stage SBIC (unless the existing early stage SBIC has no outstanding leverage or leverage commitments and will not seek additional leverage in the future).", "Early stage SBICs obtain leverage in the same way that debenture SBICs obtain leverage\u2014through the issuance of SBA-guaranteed debentures with a term of up to 10 years. However, early stage debentures come in two forms: early stage standard debentures and early stage discounted debentures.", "Early stage standard SBIC debentures are similar to standard SBIC debentures, but, instead of requiring semiannual payments on the debenture's interest and on the SBA's annual charge, they require quarterly payments on the debenture's interest and on the SBA's annual charge. In addition, early stage SBICs must maintain a reserve sufficient to pay the interest on the debenture and on the SBA's annual charges for the first 21 payment dates following the date of issuance (five years plus the length of time between the issue date and the next March 1, June 1, September 1, or December 1). Because early stage standard debentures require early stage SBICs to make quarterly payments, they are most appropriate for investments in small businesses that have established a positive cash flow enabling them to pay interest or dividends to the early stage SBIC.", "Early stage discounted debentures are issued at a discount (less than face value) equal to the first five years of interest on the debenture and the first five years of annual SBA charges. The discount eliminates the need for early stage SBICs to make interest payments on the debenture and to make payments on the SBA's annual charge for five years from the date of issuance, plus the stub period. \u00a0Early stage SBICs make quarterly payments on the debenture's interest and on the SBA's annual charge during years 6 through 10. They are also responsible for paying the debenture's principal amount when the debenture reaches its maturity date.", "Because early stage discounted debentures do not require interest payments or payments on the SBA's annual charge for five years, they are most appropriate for investments in small businesses that have not established a positive cash flow to pay interest or dividends to the early stage SBIC. As a result, early stage discounted debentures are designed to encourage investments in early stage small businesses, which by definition have not established a positive cash flow."], "subsections": []}]}, {"section_title": "Reporting Requirements", "paragraphs": ["Once licensed, each SBIC is required to file with the SBA an annual financial report that includes an audit by a SBA-approved independent public accountant. SBICs are also subject to annual on-site regulatory compliance examinations and required to provide the SBA ", "a portfolio financing report within 30 days of the closing date for each financing of a small business; the value of their loans and investments within 90 days of the end of the fiscal year in the case of annual valuations and within 30 days following the close of other reporting periods; any material adverse changes in valuations at least quarterly (within 30 days following the close of the quarter); and copies of reports provided to investors, documents filed with the Securities and Exchange Commission, and documents pertaining to litigation or other legal proceedings, including criminal charges against any person required by the SBA complete a personal history statement in connection with the SBIC's license."], "subsections": []}, {"section_title": "SBIC Program Statistics", "paragraphs": ["As of December 31, 2018, there were 305 licensed SBICs in operation (227 debenture SBICs, 25 participating securities SBICs, 47 bank-owned, non-leveraged SBICs, and 6 SSBICs).", "As shown in Table 2 , the number of debenture SBICs has generally increased in recent years. However, the total number of licensed SBICs has stayed relatively the same in recent years, primarily due to the planned reduction in the number of participating securities SBICs and SSBICs. ", "The SBA has made it a goal to increase the number of new SBIC licenses issued each year, with an emphasis on new debenture SBICs licenses, \"to position the program for continued growth.\"", "Overall, SBICs pursue investments in a broad range of industries, geographic areas, and stages of investment. Some individual SBICs specialize in a particular field or industry and others invest more generally. Most SBICs concentrate on a particular stage of investment (i.e., startup, expansion, or turnaround) and identify a geographic area in which to focus."], "subsections": [{"section_title": "Total Financing", "paragraphs": ["From the inception of the SBIC program to December 31, 2018, SBICs have invested approximately $97.6 billion in approximately 181,185 financings to small businesses. As mentioned previously, as of December 31, 2018, the SBA had a guarantee on an outstanding unpaid principal balance of $11.3 billion in SBIC debentures, $18.0 million in SBIC participating securities, and $56.7 million in other, primarily SSBIC, financings. The SBA also had an outstanding commitment on $3.2 billion in SBIC debentures and $2.6 million in other, primarily SSBIC, financings.", "Including private investment, as of December 30, 2018, the SBIC program had invested or committed about $30.3 billion in small businesses, with the SBA's share of capital at risk about $14.5 billion. ", "In FY2018, SBICs made 2,711 financings. The average financing amount was $2,029,730. ", "In FY2018, SBIC funds were used primarily for acquiring an existing business (57.9%) and also for operating capital (18.0%), refinancing or refunding debt (13.0%), a new building or plant construction (0.9%), research and development (0.8%), purchasing machinery or equipment (0.6%), marketing activities (0.6%), plant modernization (0.4%) and other uses (7.8%).", "As shown in Table 3 , the total amount of SBIC financing declined during the recession (December 2007-June 2009), reached prerecession levels in FY2011, and has generally increased since then. In FY2018, the SBA committed to guarantee $2.52 billion in SBIC small business investments. SBICs invested another $2.98 billion from private capital for a total of $5.50 billion in financing for 1,151 small businesses. ", "In addition, the amount of SBA leverage as a share of total financing provided has generally increased in recent years. For example, the SBA's leverage commitments accounted for 26.7% of total financing in FY2007, compared with 46.6% in FY2014, 40.6% in FY2015, 42.0% during FY2016, 34.2% in FY2017, and 45.8% in FY2018.", "The SBA was authorized to issue up to $3.0 billion in SBIC leverage from FY2006 through FY2013. As mentioned previously, P.L. 113-76 , the Consolidated Appropriations Act, 2014, increased that annual SBIC-leverage amount to $4 billion. For comparative purposes, private venture capital firms invested $26.0 billion in 3,417 deals in 2010, $36.3 billion in 4,234 deals in 2011, $33.1 billion in 4,680 deals in 2012, $36.4 billion in 5,176 deals in 2013, $60.0 billion in 5,998 deals in 2014, $78.1 billion in 6,098 deals in 2015, $63.8 billion in 5,679 deals in 2016, $76.4 billion in 5,824 deals in 2017, and $99.5 billion in 5,536 deals in 2018. ", "In 2008, the Urban Institute released an analysis comparing debenture SBIC investments made from 1997 to 2005 to private-sector venture capital investments made during that time period in second stage business loans, third stage business loans, and bridge loans \"because these investments are likely to be of the same character (debt with equity features) as those made by debenture SBICs.\" The Urban Institute found that debenture SBIC investments accounted for more than 62% of all venture capital financings in second stage business loans, third stage business loans, and bridge loans in the United States during that time period. However, because the average amount of a SBIC debenture investment was much smaller than the industry average, SBIC debenture investments accounted for \"only 8% of total dollars invested.\""], "subsections": []}, {"section_title": "Financing to Specific Demographic Groups", "paragraphs": ["As shown in Table 4 , in FY2018, SBICs made 130 financings (4.8% of all financings) amounting to $132.4 million (2.4% of the total amount of financings) to minority-owned and -controlled small businesses.", "In addition, in FY2018, SBICs made 59 financings (2.2% of all financings) totaling $96.0 million (1.7% of the total amount financed) to women-owned small businesses and 25 financings (0.9% of all financings) totaling nearly $16.1 million (0.3% of the total amount financed) to veteran-owned small businesses.", "Research concerning private venture capital investment in minority-owned or women-owned small businesses is limited. As a result, it is difficult to find the data necessary to compare the SBIC program's investment in minority-owned or women-owned small businesses to the private sector's investment in these firms. ", "In 2007, the SBA acknowledged at a congressional hearing on its investment programs that \"women and minority representation in [the SBIC program] is low\" and has been for many years. The SBA reported at that time that it did not control the investments made by SBICs, but it has tried to increase women and minority representation in the SBIC program by reaching out to venture capital firms, trade organizations, and others to better understand why women and minority representation in the SBIC program is low and by \"finding debenture firms with minority representation on their investment committees and in senior management.\" However, despite these efforts, in 2009, the Small Business Investor Alliance (then called the National Association of Small Business Investment Companies) asserted at a congressional hearing on the SBA's capital access programs that the SBA's SBIC licensing process \"has done an abysmal job at attracting and licensing funds led by women and minorities.\"", "During the 111 th Congress, S. 1831 , the Small Business Venture Capital Act of 2009, was introduced on October 21, 2009, and referred to the Senate Committee on Small Business and Entrepreneurship. No further action was taken on the bill. It would have encouraged SBIC investments in women-owned small businesses and socially and economically disadvantaged small business concerns by increasing the amount of leverage available to SBICs that invest at least 50% of their financings in small business concerns owned and controlled by women or socially and economically disadvantaged small business concerns. "], "subsections": []}, {"section_title": "Financing by State", "paragraphs": ["As shown in Table 5 , in FY2018, SBICs provided financing to small businesses located in 48 states, the District of Columbia and Puerto Rico, with the most financing taking place in California (392 financings totaling over $1.0 billion), Texas (276 financings totaling $427.6 million), and New York (233 financings totaling $482.6 million).", "The previously mentioned 2008 Urban Institute comparative analysis of debenture SBIC financing from 1997 to 2005 found that the dollar volume of investments from debenture SBICs was more evenly distributed across the nation than from comparable private venture capital funds. For example, the Urban Institute found that California (45.8%) and Massachusetts (12.9%) received the largest share of the total dollar volume invested by private venture capital funds from 1997 to 2005. The two states accounted for more than half (58.7%) of the total dollar volume invested by private venture capital funds. In contrast, New York (18.7%) and California (11.1%) received the largest share of the total dollar volume invested by debenture SBICs from 1997 to 2005. The two states accounted for less than one-third (29.8%) of the total dollar volume invested by debenture SBICs. In addition, the top 10 states in terms of their share of the total dollar volume invested accounted for nearly 84% of the total invested by private venture capital funds, compared with 64% for debenture SBICs.", "A comparison of the state-by-state distribution of private-sector venture capital fund investments in 2018 and SBIC financings in FY2018 (see Table 5 ) suggests the Urban Institute's finding that SBICs investments were more evenly distributed across the nation than private-sector venture capital fund investments from 1997 to 2005 continues to be the case today. For example, during 2018, California (55.3%), New York (13.2%), Massachusetts (9.4%), and Texas (2.2%) received the largest shares of the total dollar volume invested by private venture capital funds. The four states accounted for more than four-fifths (80.1%) of the total dollar volume invested by private venture capital funds during that time period. In contrast, the four states with the largest share of the total volume invested by SBICs in FY2018 (California at 19.1%, New York, New York at 8.8%, Texas at 7.8%, and Illinois at 6.2%) accounted for 41.9% of the total dollar volume invested by SBICs."], "subsections": []}]}, {"section_title": "Legislative Activity", "paragraphs": ["P.L. 111-5 , the American Recovery and Reinvestment Act of 2009 (ARRA), included provisions designed to increase the amount of leverage issued under the SBIC program by increasing the maximum amount of leverage available to an individual SBIC to 300% of its private capital or $150 million, whichever is less, and by increasing the maximum amount of leverage available for two or more licenses under common control to $225 million. It also encouraged SBIC investment in smaller enterprises by requiring SBICs licensed after the date of its enactment (February 17, 2009) to certify that at least 25% of all future financing dollars are invested in smaller enterprises. ARRA defined smaller enterprises as firms having either a net worth of no more than $6 million and average after-tax net income for the preceding two years of no more than $2 million or meeting the SBA's size standard for its industry classification.", "ARRA also encouraged SBIC investments in low-income areas by allowing a SBIC licensed on or after October 1, 2009, to elect to have a maximum leverage amount of $175 million, and $250 million for two or more licenses under common control, if the SBIC has invested at least 50% of its financings in low-income geographic areas and certified that at least 50% of its future investments will be in low-income geographic areas.", "As part of its Startup America Initiative, on January 31, 2012, the Obama Administration recommended that the SBIC program's annual authorization be increased to $4 billion from $3 billion and that the amount of SBA leverage available to licensees under common control (the multiple licenses/family of funds limit) be increased to $350 million from $225 million. On April 27, 2012, the SBA also published a final rule in the Federal Register establishing the $1 billion Early Stage Innovation SBIC Initiative (up to $150 million in SBA leverage in FY2012 and up to $200 million in SBA leverage per fiscal year thereafter until the limit is reached) to encourage SBIC program investments in early stage small businesses. As will be discussed, several bills have been introduced during recent Congresses to expand the SBIC program by increasing its annual authorization to $4 billion (enacted), increasing the multiple licenses/family of funds limit to $350 million (enacted), increasing the individual SBIC fund limit to $175 million (enacted), or authorizing a SBIC program specifically designed to encourage SBIC investments in business startups and other early stage small businesses (introduced). "], "subsections": [{"section_title": "Legislation to Target Additional Assistance to Startup and Early Stage Small Businesses", "paragraphs": ["Some Members and small business advocates have proposed legislation to establish a \"permanent\" congressionally authorized SBIC program to target additional assistance to startup and early stage small businesses, which are generally viewed as relatively risky investments but also as having a relatively high potential for job creation. Advocates of targeting additional assistance to startup and early stage small businesses argue that the SBA's participating securities program was created to fill a perceived investment gap resulting from the SBA's debenture program's focus on mid- and later-stage small businesses. Because the SBA is no longer providing new licenses or leverage for participating securities SBICs, several Members have introduced legislation to create a new SBA program that would focus on the investment needs of startup and early stage small businesses.", "For example, during the 111 th Congress, the House passed, by a vote of 241-182, H.R. 5297 , the Small Business Jobs and Credit Act of 2010. Among its provisions, as passed by the House, H.R. 5297 would have authorized a $1 billion Small Business Early Stage Investment Program. The proposed program would have provided equity investment financing of up to $100 million in matching funds to each participating investment company. It would have required participating investment companies to invest in small businesses, with at least 50% of the financing in early stage small businesses, defined as those small businesses not having \"gross annual sales revenues exceeding $15 million in any of the previous three years.\" The proposed program emphasized venture capital investments in startup companies operating in nine targeted industries.", "H.R. 5297 , as subsequently approved by Congress and signed into law by President Obama on September 27, 2010 ( P.L. 111-240 , the Small Business Jobs Act of 2010), did not include legislative language authorizing a Small Business Early Stage Investment Program. However, it authorized a three-year Intermediary Lending Pilot Program to provide direct loans to not more than 20 eligible nonprofit lending intermediaries each year, totaling not more than $20 million and $1 million per intermediary at an interest rate of 1%. The intermediaries, in turn, may make loans to new or growing small businesses, not to exceed $200,000 per business. The Intermediary Lending Pilot Program was funded for two years. Thirty-six lenders currently participate in the program.", "As mentioned previously, in 2012, the SBA established the early stage SBIC initiative to encourage SBIC investments in early stage small businesses. Also, during the 113 th Congress, H.R. 30 , the Small Business Investment Enhancement and Tax Relief Act, and S. 1285 , the Small Business Innovation Act of 2013, would have authorized the Administration to establish a separate SBIC program for early stage small businesses. The Small Business Innovation Act (of 2016) was reintroduced ( S. 3375 ) during the 114 th Congress. "], "subsections": [{"section_title": "Discussion", "paragraphs": ["Advocates of efforts to encourage capital investment in startup and early stage small businesses, including Members of Congress who have served on the House or Senate Small Business Committees, have argued that the SBA's elimination of the SBIC participating securities program has created a gap \"in the SBA's existing array of capital access programs, particularly in the provision of capital to early stage small businesses in capital-intensive industries.\" As Representative Nydia Vel\u00e1zquez argued on the House floor during congressional consideration of H.R. 5297 :", "This legislation, Mr. Chairman, also recognizes that capital markets are changing dramatically. Credit standards are stricter, and small businesses are now looking not only to loans and to credit cards to finance their operations, but they are also looking to equity investment to turn their ideas into reality. This has become even more pronounced as asset values have declined, leaving entrepreneurs with less collateral to borrow against. Unfortunately, small firms' access to venture capital and to equity investment has declined. Last year, such investments plummeted from $28 billion in 2008 to only $17 billion last year. This is due, in part, to the previous administration's decision to terminate the SBA's largest pure equity financing program\u2014the Small Business Investment Company Participating Securities program. This has left many entrepreneurs who need equity investment to fulfill their business plans without a source of such financing. ", "Opponents of efforts to encourage capital investment in startup and early stage small businesses have argued that such efforts could \"pile unnecessary risk or costs onto taxpayers at a time when we're dealing with record debt and unsustainable deficit spending.\" During consideration of the proposed Small Business Early Stage Investment Program, opponents argued that it was untested, that it would likely encourage risky investments, and that the legislation required \"only 50% of the funding \u2026 to be invested\" in early stage small businesses."], "subsections": []}]}, {"section_title": "Legislation to Increase SBIC Financing Levels", "paragraphs": ["In 2009, the Small Business Investor Alliance characterized the SBIC program as \"dramatically underused.\" It argued that the program's financing levels would increase if (1) the SBA further improved its licensing processing procedures to make them more timely and objective, (2) the percentage of SBIC regulatory capital allowed from state or local government entities was increased from its present maximum of 33%, and (3) the SBIC program's multiple licenses/family of funds limit (at that time $225 million for two or more licenses under common control) was increased to allow SBICs to have a series of investment funds in place, in which, for example, \"one fund could be winding down, another could be at peak, and another could just be ramping up.\"", "During the 111 th Congress, H.R. 3854 , the Small Business Financing and Investment Act of 2009, which was passed by the House on October 29, 2009, and H.R. 5554 , the Small Business Assistance and Relief Act of 2010, which was not reported after being referred to five committees for consideration, proposed to encourage greater use of the SBIC program by increasing the maximum percentage of SBIC regulatory capital allowed from state or local government entities to 45% from 33%. Both measures would have also increased the SBIC program's multiple licenses/family of funds limit to $350 million from $225 million; increased the SBIC program's limit of $250 million to $400 million for multiple funds under common control that were licensed after September 30, 2009, and invested 50% of their dollars in low-income geographic areas; and increased the SBIC program's authorization level from to $5.5 billion from $3.0 billion in FY2011.", "The Obama Administration also recommended, as part of its Startup America Initiative (which included the SBA's $1 billion early stage SBIC initiative and $1 billion impact investment SBIC initiative), that the 112 th Congress adopt legislation to increase the SBIC program's annual authorization to $4 billion from $3 billion. The Administration recommended as well that the 112 th Congress adopt legislation to increase the amount of SBA leverage available to licensees under common control to $350 million from $225 million.", "During the 112 th Congress, H.R. 3219 , the Small Business Investment Company Modernization Act of 2011, would have encouraged greater utilization of the SBIC program by increasing the maximum amount of outstanding SBA leverage available to any single licensed SBIC from the lesser of 300% of its private capital or $150 million to the lesser of 300% of its private capital or $200 million if a majority of the managers of the company are experienced in managing one or more SBIC licensed companies. It would also have increased the maximum amount of outstanding SBA leverage available to two or more licenses under common control to $350 million from $225 million.", "S. 2136 , a bill to increase the maximum amount of leverage permitted under title III of the Small Business Investment Act of 1958, would have encouraged greater use of the SBIC program by increasing the maximum amount of outstanding SBA leverage available to two or more licenses under common control to $350 million from $225 million. It also would have increased the SBIC program's authorization level to $4 billion from $3 billion.", "On March 15, 2012, S.Amdt. 1833 , the INVEST in America Act of 2012, was offered on the Senate floor as an amendment in the nature of a substitute to H.R. 3606 , the Jumpstart Our Business Startups Act, which had previously passed the House. Two of the provisions in the amendment proposed to encourage greater use of the SBIC program by (1) increasing the maximum amount of outstanding SBA leverage available to two or more licenses under common control to $350 million from $225 million and (2) increasing the SBIC program's authorization level to $4 billion from $3 billion. The Senate later passed H.R. 3606 with amendments, which did not address the SBIC program. The House accepted the Senate amendments and passed the bill, which President Obama signed into law ( P.L. 112-106 ).", "S. 3442 , the SUCCESS Act of 2012, and S. 3572 , the Restoring Tax and Regulatory Certainty to Small Businesses Act of 2012, would have, among other provisions, increased the SBIC program's authorization amount to $4 billion from $3 billion, increased the multiple licenses/family of funds limit to $350 million from $225 million, and annually adjusted the maximum outstanding leverage amount available to both individual SBICs and SBICs under common control to account for inflation. ", "In addition, H.R. 6504 , the Small Business Investment Company Modernization Act of 2012, which was passed by the House on December 18, 2012, would have increased the SBIC program's multiple licenses/family of funds limit to $350 million from $225 million.", "During the 113 th Congress, as mentioned previously, P.L. 113-76 increased the annual leverage amount the SBA is authorized to provide to SBICs to $4 billion from $3 billion. In addition to increasing the program's authorization amount to $4 billion, S. 511 , the Expanding Access to Capital for Entrepreneurial Leaders Act (EXCEL Act) would have increased the program's multiple licenses/family of funds limit to $350 million from $225 million. S. 1285 , would have, among other provisions, also increased the program's multiple licenses/family of funds limit to $350 million. ", "During the 114 th Congress, P.L. 114-113 , the Consolidated Appropriations Act, 2016, increased the SBIC program's multiple licenses/family of funds limit to $350 million. In addition, H.R. 5968 , the Small Business Investment Opportunity Act of 2016, introduced on September 8, 2016, and referred to the House Committee on Small Business, would have increased the maximum amount of leverage available to SBICs to 300% of the SBIC's private capital (200% in practice) or $170 million, whichever is less, from the current maximum of 300% of the SBIC's private capital (200% in practice) or $150 million, whichever is less. ", "During the 115 th Congress, P.L. 115-187 , the Small Business Investment Opportunity Act of 2017, increased the maximum amount of leverage for individual SBICs to $175 million from $150 million."], "subsections": [{"section_title": "Discussion", "paragraphs": ["In 2010, the SBA announced that one of its goals for the SBIC program was to increase its \"acceptance in the marketplace and increase the number of funds licensed and the amount of leverage issued so as to improve capital access for small businesses.\" The SBA asserted that ARRA's changes to the SBIC program would help it to achieve this goal. ARRA increased the maximum leverage available to SBICs to up \"to three times the private capital raised by the SBIC, or $150 million, whichever is less, and $225 million for multiple licensees under common control\" and increased \"the maximum leverage amounts to $175 million for single funds and $250 million for multiple funds under common control who are licensed after September 30, 2009, and invest 50% of their dollars in low income geographic areas.\"", "As mentioned previously, P.L. 113-76 increased the annual leverage amount the SBA is authorized to provide to SBICs to $4 billion from $3 billion, P.L. 114-113 , the Consolidated Appropriations Act, 2016, increased the SBIC program's multiple licenses/family of funds limit to $350 million, and P.L. 115-187 , the Small Business Investment Opportunity Act of 2017, increased the maximum amount of leverage for individual SBICs to $175 million.", "Advocates of increasing the SBIC program's leverage limits have argued that these actions are necessary to help fill a perceived gap in the SBA's \"array of capital access programs.\" In addition, they argue that the demise of the SBIC participating securities program and the current \"underutilization\" of the SBIC debentures program is preventing many small firms from accessing the capital necessary to fully realize their economic potential and assist in the national economic recovery. On the other hand, others worry about the potential risk that an expanded SBIC program has for the taxpayer, especially if investments are targeted at startup and early stage small businesses which, by definition, have a more limited credit history and a higher risk for default than businesses that have established positive cash flow."], "subsections": []}]}]}, {"section_title": "Concluding Observations", "paragraphs": ["Some Members of Congress have argued that the SBA should be provided additional resources to assist small businesses in acquiring capital necessary to start, continue, or expand operations and create jobs. In their view, encouraging greater utilization of the SBIC program will increase small business access to capital, result in higher levels of job creation and retention, and promote economic growth. For example, on March 19, 2012, during Senate consideration of the INVEST in America Act of 2012, then-Senator Olympia Snowe argued ", "The amendment [ S.Amdt. 1833 ] I and Senator Landrieu introduced would also help small companies access capital by modifying the Small Business Investment Company, SBIC, Program to raise the amount of SBIC debt the Small Business Administration, SBA, can guarantee from $3 billion to $4 billion. It would also increase the amount of SBA guaranteed debt a team of SBIC fund managers who operate multiple funds can borrow. The SBIC provisions in this amendment have bipartisan support, are noncontroversial, come at no cost to taxpayers and will create jobs. We do not get many bills of this kind in the Senate anymore. ", "One of the most difficult challenges facing new small businesses today is access to capital. The SBIC Program has helped companies like Apple, FedEx, Callaway Golf, and Outback Steakhouse become household names. As entrepreneurs and other aspiring small business owners well know, it takes money to make money. This legislation ensures that our entrepreneurs and high-growth companies have access to the resources they need so they can continue to drive America's economic growth and job creation in these challenging times. There is no reason why Congress should not approve this amendment to ensure capital is getting into the hands of America's job creators. ", "This amendment will spur investment in capital-starved startup small businesses, which will play a critical role in leading the Nation of the devastating economic downturn from which we have yet to emerge. For those who may be unfamiliar, despite significant entrepreneurial demand for small amounts of capital, because of their substantial size, most private investment funds cannot dedicate resources to transactions below $5 million. The Nation's SBICs are working to fill that gap, especially even during these challenging times.", "Others worry about the potential risk an expanded SBIC program may have for increasing the federal deficit. In their view, the best means to assist small business, promote economic growth, and create jobs is to reduce business taxes and exercise federal fiscal restraint. For example, Representative Sam Graves, then-chair of the House Committee on Small Business, indicated in the Small Business Committee's FY2013 \"views and estimates\" letter to the House Budget Committee that the House Small Business Committee supported an increase in the SBIC program's authorization to $4 billion from $3 billion. However, he indicated that the committee opposed funding for the SBA's early stage SBIC initiative and impact investment SBIC initiative because of their potential to generate losses that could lead to higher SBIC fees or to the need to provide federal funds to subsidize the SBIC program. Representative Graves wrote in the FY2013 views and estimates letter that ", "The debenture SBIC program is designed to provide equity injections to small businesses that have been operational and have a track record of cash-flow and profits. \u2026 The program is financially sound because the structure of repayments ensures that the government will not suffer significant losses. Thus, no changes are needed to the program and it operates on a zero subsidy basis without an appropriation. The SBA budget is fully supportive of this program and we concur in that recommendation, including raising the program level from $3 billion to $4 billion. ", "Presumably, some of the additional program level (which will cost the federal government no money) will be used to support two new variations in the Debenture SBIC Program [the early stage SBIC initiative and the impact investment SBIC initiative] \u2026 Neither initiative has received authority from Congress nor had its operational principles assessed by the Committee prior to implementation. The Committee reiterates its recommendation from last year's views and estimates \u2013 no funds should be allocated from the additional debenture program levels for these two programs. The Committee on the Budget also should provide further protection to the existing debenture SBIC program by requiring any modifications to the program, whether a pilot program or not, be based on a new subsidy calculation that ensures the current debenture program will operate at zero subsidy without any increase in fees due to losses stemming from the Impact and Early Stage Innovation programs.", "The House Committee on Small Business's FY2016 views and estimates letter reiterated the committee's opposition to the funding of these two initiatives and recommended that any modifications to the SBIC program \"whether a pilot program or not, be based on a new subsidy calculation that ensures the current debenture program will operate at zero subsidy without any increase in fees.\" ", "As these quotations attest, congressional debate concerning the SBIC program has primarily involved assessments of the ability of small businesses to access capital from the private sector and evaluations of the program's risk, the effect of proposed changes on the program's risk, and the potential impact of the program's risk on the federal deficit. Empirical analysis of economic data can help inform debate concerning the ability of small businesses to access capital from the private sector and the extent of the program's risk, the effect of proposed changes on the program's risk, and the potential impact of the program's risk on the federal deficit. Additional data concerning SBIC investment impact on recipient job creation and firm survival might also prove useful."], "subsections": [{"section_title": "Appendix. Small Business Eligibility Requirements and Application Process", "paragraphs": ["Small Business Eligibility Requirements", "Only businesses that meet the SBA's definition of \"small\" may participate in the SBIC program. Businesses must meet either the SBA's size standard for the industry in which they are primarily engaged or the SBA's alternative size standard for the SBIC program. SBICs use the size standard that is most likely to qualify the company, typically the alternative size standard for the SBIC program. The current SBIC alternative size standard, which became effective on July 14, 2014, is tangible net worth not in excess of $19.5 million and average net income after federal income taxes (excluding any carry-over losses) for the preceding two completed fiscal years not in excess of $6.5 million. All of a company's subsidiaries, parent companies, and affiliates are considered in determining if it meets the size standard. ", "In addition, since 1997, the SBA has required SBICs to set aside a specified percentage of their financing for \"businesses at the lower end of the permitted size range,\" primarily because \"the financial size standards applicable to the SBIC program are considerably higher than those used in other SBA programs.\" P.L. 111-5 requires SBICs licensed after the date of its enactment (February 17, 2009) to certify that at least 25% of their future financing is invested in smaller enterprises. A smaller enterprise is a company that, together with any affiliates, either has net worth of no more than $6 million and average after-tax net income for the preceding two years of no more than $2 million or meets the SBA's size standard in the industry in which the applicant is primarily engaged.", "A SBIC licensed on or before February 17, 2009, that has not received any SBA leverage commitments after February 17, 2009, must have at least 20% of its aggregate financing dollars (plus 100% for leverage commitments over $90 million) invested in smaller enterprises.", "A SBIC licensed on or before February 17, 2009, that has received a SBA leverage commitment after February 17, 2009, must meet the 20% threshold (plus 100% for leverage commitments over $90 million) for financing provided before the date of the first leverage commitment issued after February 17, 2009, and the 25% threshold for financing made after such date.", "SBICs are not allowed to invest in the following: other SBICs, finance and investment companies or finance-type leasing companies, unimproved real estate, companies with less than 51% of their assets and employees in the United States, passive or casual businesses (those not engaged in a regular and continuous business operation), or companies that will use the proceeds to acquire farmland. In addition, SBICs may not provide funds for a small business whose primary business activity is deemed contrary to the public interest or if the funds will be used substantially for a foreign operation.", "Small Business Application Process", "Small business owners interested in receiving SBIC financing can search for active SBICs using the SBA's SBIC directory. The directory provides contact information for all licensed SBICs, sorted by state. It also includes the SBIC's preferred minimum and maximum financing size range, the type of capital provided (e.g., equity, mezzanine, subordinated debt, 1 st and 2 nd lien secured term, or preferred stock), funding stage preference (e.g., early stage, growing and expansion stage, or later stage), industry preference (e.g., business services, manufacturing, environmental services, or distribution), geographic preference (e.g., national, regional, or specific state or states), and a description of the firm's focus (e.g., equity capital to later stage companies for expansion and acquisition or targeting companies with revenues of at least $5 million and profitability at the time of financing).", "After locating a suitable SBIC, the small business owner presents the SBIC a business plan that addresses the business's operations, management, financial condition, and funding requirements. The typical business plan includes the following information:", "the name of the business as it appears on the official records of the state or community in which\u00a0it operates; the city, county, and state of the principal location and any branch offices or facilities; the form of business organization and, if a corporation, the date and state of incorporation; a description of the business, including the principal products sold or services rendered; a history of the general development of the products or services during the past five years (or since inception); information about the relative importance of each principal product or service to the volume of the business and its profits; a description of the business's real and physical property and adaptability to other business ventures; a description of technical attributes of its products and facilities; detailed information about the business's customer base, including potential customers; a marketing survey or economic feasibility study; a description of the distribution system for the business's products or services; a descriptive summary of the competitive conditions in the industry in which the business is engaged, including its competitive position relative to its largest and smallest competitors; a full explanation and summary of the business's pricing policies; brief resumes of the business's management personnel and principal owners, including their ages, education, and business experience; banking, business, and personal references for each member of management and for the principal owners; balance sheets and profit and loss statements for the last three fiscal years (or from inception); detailed projections of revenues, expenses, and net earnings for the coming year; a statement of the amount of funding requested and the time requirements for the funds; the reasons for the request for funds and a description of the proposed uses; and a description of the benefits the business expects to gain from the financing (e.g., expansion, improvement in financial position, expense reduction, or increase in efficiency).", "Because SBICs typically receive hundreds of business plans per year, the SBA recommends that small business owners seek a personal referral or introduction to the particular SBIC fund manager being targeted to increase \"the likelihood that the business plan will be carefully considered.\" According to the Small Business Investor Alliance, \"a thorough study an SBIC must undertake before it can make a final decision could take several weeks or longer.\""], "subsections": []}]}]}}
{"id": "R44296", "title": "Deeming Resolutions: Budget Enforcement in the Absence of a Budget Resolution", "released_date": "2019-04-29T00:00:00", "summary": ["The budget resolution reflects an agreement between the House and Senate on a budgetary plan for the upcoming fiscal year. Once agreed to by both chambers in the exact same form, the budget resolution creates parameters that may be enforced by (1) points of order and (2) using the budget reconciliation process.", "When the House and Senate do not reach final agreement on this plan, it may be more difficult for Congress to reach agreement on subsequent budgetary legislation, both within each chamber and between the chambers.", "In the absence of agreement on a budget resolution, Congress may employ alternative legislative tools to serve as a substitute for a budget resolution. These substitutes are typically referred to as \"deeming resolutions,\" because they are deemed to serve in place of an annual budget resolution for the purposes of establishing enforceable budget levels for the upcoming fiscal year.", "Since the creation of the budget resolution, there have been 10 years in which Congress did not come to agreement on a budget resolution. In each of those years, one or both chambers employed at least one deeming resolution to serve as a substitute for a budget resolution.", "While referred to as deeming resolutions, such mechanisms are not formally defined and have no specifically prescribed content. Instead, they represent the House and Senate, often separately, engaging legislative procedures to deal with enforcement issues on an ad hoc basis. As described below, the mechanisms can vary significantly in content and timing. This report covers the use of deeming resolutions pertaining to fiscal years for which the House and Senate did not agree on a budget resolution.", "While neither the House nor Senate have yet adopted a budget resolution for FY2020, they may still do so. In the meantime, on April 9, 2019, the House passed a deeming resolution for FY2020, H.Res. 293."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "What Is the Budget Resolution and How Is It Enforced?", "paragraphs": ["The Congressional Budget Act of 1974 (hereinafter referred to as the Budget Act) created the budget resolution and specifies that it be adopted annually. The budget resolution reflects an agreement between the House and Senate on spending and revenue levels.", "The budget resolution does not become law; therefore no money is spent or collected as a result of its adoption. Instead, it is meant to assist Congress in considering an overall budget plan. Once agreed to by both chambers in the exact same form, the budget resolution creates parameters that may be enforced in two primary ways: (1) by points of order, and (2) by using the budget reconciliation process. "], "subsections": [{"section_title": "Enforcement Through Points of Order", "paragraphs": ["Once the budget resolution has been agreed to by both chambers, certain levels contained in it are enforceable through points of order. This means that if legislation is being considered on the House or Senate floor that would violate certain levels contained in the budget resolution, a Member may raise a point of order against the consideration of that legislation. Points of order can be raised against bills, resolutions, amendments, or conference reports. If such a point of order is raised against legislation for violating levels in the budget resolution, the presiding officer makes a ruling on the point of order based on estimates provided by the relevant Budget Committee.", "Points of order are not self-enforcing, meaning that if no Member raises a point of order, a chamber may consider and pass legislation that would violate levels established in the budget resolution. In addition, either chamber may waive the point of order. The process for waiving points of order, and the number of Members required to waive points of order, varies by chamber. Generally, such points of order can be waived in the House by a simple majority of Members and in the Senate by three-fifths of all Senators. ", "The Budget Act requires that the budget resolution include the following budgetary levels for the upcoming fiscal year and at least four out years: total spending, total revenues, the surplus/deficit, new spending for each major functional category, the public debt, and (in the Senate only) Social Security spending and revenue levels. The Budget Act also requires that the aggregate amounts of spending recommended in the budget resolution be allocated among committees. The Budget Act provides that the House and Senate Appropriations Committees receive an allocation for only the upcoming fiscal year (referred to as the budget year), but the remaining House and Senate committees receive allocations for the entire period covered by the budget resolution. The Budget Act requires that the House and Senate Appropriations Committees subdivide their allocations by subcommittee and report these sub-allocations to their respective chambers.", "While the Budget Act requires that the budget resolutions include the levels described above, it does not require that all of these levels be enforceable by points of order. (Some levels in the budget resolution are, therefore, included only for informational purposes.)", "Budgetary levels that are enforceable include spending and revenue aggregates and committee spending allocations. The Budget Act prohibits the consideration of (1) any measure that would cause spending to exceed levels in the budget resolution, or (2) any measure that would cause total revenue levels to fall below the levels in the budget resolution. Likewise, the Budget Act prohibits the consideration of legislation that would violate the committee spending allocations. (Similarly, once the Appropriations Committees report their sub-allocations to their respective chambers, the Budget Act bars the consideration of any spending measures that would cause those sub-allocations to be violated.)"], "subsections": []}, {"section_title": "Enforcement Through the Budget Reconciliation Process", "paragraphs": ["While points of order can be effective in enforcing the budgetary goals outlined in the budget resolution, they can be raised against legislation only when it is pending on the House or Senate floor. This can be effective for legislation such as appropriations measures, which typically provide funding for one year and are therefore considered on the House and Senate floor annually. Points of order cannot, however, limit direct spending or revenue levels resulting from current law. ", "Often, for the budgetary levels in the budget resolution to be achieved, Congress must pass legislation to alter the levels of revenue and/or direct spending resulting from existing law. In this situation, Congress seeks to reconcile the levels of direct spending and revenue resulting from existing law with those budgetary levels expressed in the budget resolution. To assist in this process, the budget reconciliation process allows special consideration of legislation that would accomplish those budgetary levels expressed in the budget resolution.", "If Congress intends to use the reconciliation process, reconciliation directives (also referred to as reconciliation instructions) must be included in the annual budget resolution. These directives instruct individual committees to develop and report legislation that would change laws within their respective jurisdictions related to direct spending, revenue, or the debt limit. Once a specified committee develops legislation, the reconciliation directive may direct it to report the legislation for consideration in its chamber or submit it to the Budget Committee to be included in an omnibus reconciliation measure. Such reconciliation legislation is then eligible to be considered under special expedited procedures in both the House and Senate."], "subsections": []}]}, {"section_title": "What Complications Arise When the House and Senate Do Not Reach Agreement on a Budget Resolution?", "paragraphs": ["The budget resolution reflects an agreement between the House and Senate on a budgetary plan for the upcoming fiscal year. When the House and Senate do not reach final agreement on this plan, the budget process for the upcoming fiscal year may become complicated. Without an agreement on budgetary parameters, it may be more difficult for Congress to reach agreement on subsequent budgetary legislation, both within each chamber and between the chambers.", "If Congress agreed upon a budget resolution for the prior fiscal year, that resolution remains in effect and may provide some operative parameters, since a resolution includes multi-year enforceable levels. The usefulness of such levels may be limited, however, due to altered economic conditions and technical factors, not to mention any changes in congressional budgetary goals. ", "Since a committee allocation to the Appropriations Committee is made for only the upcoming fiscal year, the House and Senate cannot rely on a prior year's budget resolution. This means that there is no allocation of spending made to the Appropriations Committees and no formal basis for them to make the required spending sub-allocations. Without such enforceable budgetary levels, the development and consideration of individual appropriations measures may encounter difficulties. ", "Without agreement on a budget resolution, Congress also may not use the budget reconciliation process. This means that any budgetary changes to revenue or mandatory spending may not be considered under the special expedited procedures provided by the budget reconciliation process. ", "The Budget Act sought to require adoption of a budget resolution before Congress could consider budgetary legislation for the upcoming year. Under Section 303(a) of the Budget Act, the House and Senate generally may not consider spending, revenue, or debt limit legislation for a fiscal year until the budget resolution for that fiscal year has been adopted. The Budget Act provides for exceptions, however, and in addition allows the point of order to be waived in both chambers by a simple majority."], "subsections": []}, {"section_title": "What Can Be Used for Budget Enforcement in the Absence of a Budget Resolution?", "paragraphs": ["In the absence of a budget resolution, other budget enforcement mechanisms are available to Congress comprising two general categories. First, there are types of budget enforcement that are entirely separate from the budget resolution, such as chamber rules and statutory spending caps. These mechanisms remain in effect in the absence of a budget resolution and place restrictions on certain types of budgetary legislation. Such enforcement is briefly described below in the section titled \" What Types of Budgetary Enforcement Exist Outside of the Budget Resolution? \"", "Second, in the absence of agreement on a budget resolution, Congress may employ alternative legislative tools to serve as a substitute for a budget resolution. When Congress has been late in reaching final agreement on a budget resolution, or has not reached agreement at all, it has relied on such substitutes. These substitutes are typically referred to as \"deeming resolutions,\" because they are deemed to serve in place of an agreement between the two chambers on an annual budget resolution for the purposes of establishing enforceable budget levels for the upcoming fiscal year (or multiple fiscal years). Employing a deeming resolution, however, does not preclude Congress from subsequently agreeing to a budget resolution.", "While referred to as deeming resolutions, such mechanisms are not formally defined and have no specifically prescribed content. Instead, they denote the House and Senate, often separately, engaging legislative procedures to deal with enforcement issues on an ad hoc basis. As described below, the mechanisms vary in form and function, but they always (1) include or reference certain budgetary levels (e.g., aggregate spending limits and committee spending allocations) and (2) contain language stipulating that such levels are to be enforceable by points of order as if they had been included in a budget resolution. "], "subsections": []}, {"section_title": "In Which Years Did Congress Rely on Deeming Resolutions in the Absence of Agreement on a Budget Resolution?", "paragraphs": ["As shown in Table 1 , since the creation of the budget resolution, dates of adoption have varied, and there have been 10 years in which Congress did not come to agreement on a budget resolution. As shown in Table 2 , in each of those years, one or both chambers employed at least one deeming resolution to serve as a substitute for a budget resolution. It should be noted that Table 2 includes only the deeming resolutions that pertain to the fiscal years for which Congress did not agree on a budget resolution. For example, for FY2017, the House and Senate ultimately agreed to a budget resolution, and so data pertaining to FY2017 is not included in this report even though the Senate utilized a deeming resolution before agreement on a budget resolution was reached. "], "subsections": []}, {"section_title": "In What Ways Have Deeming Resolutions Varied?", "paragraphs": ["As described below, deeming resolutions have varied in several ways. "], "subsections": [{"section_title": "Variations in Legislative Vehicle", "paragraphs": ["Congress initially used simple resolutions as the legislative vehicle for deeming resolutions (which is why they are referred to as resolutions). As shown in Table 2 , however, deeming resolutions have also been included as provisions in lawmaking vehicles, such as appropriations bills. ", "Questions sometimes arise regarding whether the use of an alternative legislative vehicle has any impact on the enforceability of the budgetary levels. Article I of the Constitution, however, gives each house of Congress broad authority to determine its rules of procedure. The House and the Senate may include rulemaking provisions, such as enforceable budgetary levels, in any type of legislative vehicle. In each case, the rulemaking provisions have equal standing and effect. Under this constitutional rulemaking principle, each house has the authority to take parliamentary action that waives its own rules in certain circumstances if it sees fit. This power is not compromised by the fact that the rulemaking provision may be established in statute."], "subsections": []}, {"section_title": "Variations in Timing", "paragraphs": ["As shown in Figure 1 , timing of congressional action on deeming resolutions has varied, since deeming resolutions may be initiated any time Congress regards it as necessary. Chambers have often agreed to deeming resolutions several months after they have separately agreed to a budget resolution but have not come to agreement with each other. Also, chambers have agreed to a deeming resolution on the same day as agreeing to a budget resolution in situations when one chamber foresees difficulty resolving differences with the other chamber. For example, the Senate agreed to a budget resolution for FY1999 on April 2, 1998, and, anticipating an impasse with the House, agreed to a deeming resolution the same day. Similarly, the House passed a budget resolution for FY2007 on May 18, 2006, and agreed to a deeming resolution the same day. Further, deeming resolutions have been provided for far in advance of potential action on a budget resolution. For example, the Bipartisan Budget Act of 2015 ( P.L. 114-74 , enacted in November of 2015) included a provision directing the Senate Budget Committee chair to file in the Congressional Record levels that would then become enforceable in the Senate as if they had been included in a budget resolution for FY2017. ", "Often, a chamber initiates action on a deeming resolution so that it can subsequently begin consideration of appropriations measures. In the House deeming resolutions are often included in the same resolution providing for consideration of the first appropriations measure for the upcoming fiscal year. ", "Just as employing a deeming resolution does not preclude Congress from subsequently agreeing to a budget resolution, it also does not preclude Congress from acting on another deeming resolution that either expands or replaces the first deeming resolution. For example, in FY1999 the Senate agreed to a deeming resolution in April, and in October it agreed to a further deeming resolution that amended the previous deeming resolution. Likewise, the House agreed to a deeming resolution for FY2014 in June but in December passed the Bipartisan Budget Act, which included a deeming resolution that superseded parts of the initial deeming resolution. "], "subsections": []}, {"section_title": "Variations in Content", "paragraphs": ["Deeming resolutions always include at least two things: (1) language setting forth or referencing specific budgetary levels (e.g., aggregate spending limits and/or committee spending allocations), and (2) language stipulating that such levels are to be enforceable as if they had been included in a budget resolution. Even so, significant variations exist in their content, as shown in Table 3 . ", "Budget resolutions include budgetary levels in the form of explicit dollar amounts, and in some instances deeming resolutions have done the same. For example:", "Pending the adoption by the Congress of a concurrent resolution on the budget for FY1999, the following allocations contemplated by section 302(a) of the Congressional Budget Act of 1974 shall be considered as made to the Committee on Appropriations: (1) New discretionary budget authority: $531,961,000,000. (2) Discretionary outlays: $562,277,000,000.", "Some deeming resolutions, however, have not included the budgetary levels themselves but have incorporated them by reference, particularly in situations when that chamber has already passed a budget resolution but has not come to agreement with the other chamber. For example:", "Pending the adoption of a concurrent resolution on the budget for fiscal year 2003, the provisions of House Concurrent Resolution 353, as adopted by the House, shall have force and effect in the House as though Congress has adopted such concurrent resolution.", "In some cases, the deeming resolution has stated that the chairs of the House and Senate Budget Committees shall subsequently file in the Congressional Record levels that will then become enforceable as if they had been included in a budget resolution. The committee chairs are typically directed to file particular levels, such as those consistent with discretionary spending caps or those consistent with the baseline projections of the Congressional Budget Office. Such provisions have been used recently in both the Budget Control Act of 2011 and the Bipartisan Budget Act of 2013. For example: ", "For the purpose of enforcing the Congressional Budget Act of 1974 for fiscal year 2014... the ... levels provided for in subsection (b) shall apply in the same manner as for a concurrent resolution on the budget for fiscal year 2014.... The Chairmen of the Committee on the Budget of the House of Representatives and the Senate shall each submit a statement for publication in the Congressional Record as soon as practicable after the date of enactment of this Act that includes ... committee allocations for fiscal year 2014 consistent with the discretionary spending limits set forth in this Act.", "As stated above, deeming resolutions will sometimes reference a budget resolution that has been previously adopted by that chamber and will deem that budget resolution to be enforceable. Alternatively, mechanisms may include or reference only certain levels normally included in a budget resolution. For example, in some cases deeming resolutions have included only committee allocations to the Appropriations Committee, while in other cases they have included allocations for all committees, as well as aggregate spending and revenue levels. While content has varied, deeming resolutions that have not referenced a previously passed budget resolution have typically included only levels to be enforced by points of order, such as aggregate spending and revenue levels as well as spending allocations for each committee. Deeming resolutions generally do not include all of the levels required to be in a budget resolution by the Budget Act. For example, the Budget Act requires that the budget resolution include the corresponding deficit level and public debt level under the enforceable budgetary framework. These have not typically been included in deeming resolutions. In addition, deeming resolutions have often included other matter, such as points of order."], "subsections": []}]}, {"section_title": "What Types of Budgetary Enforcement Exist Outside of the Budget Resolution?", "paragraphs": ["In addition to the budget resolution, Congress employs other types of budget enforcement. Some of these enforcement mechanisms are procedural (which are enforced through points of order), and some are statutory (which are enforced through sequestration). In the absence of a budget resolution, these additional budget enforcement mechanisms remain intact. This means that even without a budget resolution, there are still prohibitions and restrictions on different types of budgetary legislation. For example, a limit on defense and nondefense discretionary spending currently exists in the form of annual discretionary spending caps and in addition can act as a guide to appropriators in crafting appropriations measures. In addition, limits on new direct spending and revenue legislation exist through points of order and statutory enforcement such as Senate PAYGO, House CUTGO, and Statutory PAYGO. "], "subsections": [{"section_title": "Budget Enforcement Through Points of Order", "paragraphs": ["The House and Senate have many budget-related points of order that seek to restrict or prohibit consideration of different types of budgetary legislation. These points of order are found in various places such as the Budget Act, House and Senate standing rules, and past budget resolutions. ", "For example, for FY2017, Congress moved forward with appropriations in the absence of a budget resolution or deeming resolution. The House Appropriations Committee adopted \"interim 302(b) sub-allocations\" for some individual appropriations bills. Such levels did not act as an enforceable cap on appropriations measures when they were considered on the floor. A separate order adopted by the House as a part of H.Res. 5 (114 th Congress), however, prohibited floor amendments that would increase spending in a general appropriations bill, effectively creating a cap on individual appropriations bills when they were considered on the floor.", "In addition, in the Senate there exists a pay-as-you-go (PAYGO) rule that prohibits the consideration of direct spending or revenue legislation that is projected to increase the deficit. Another example is the House cut-as-you-go (CUTGO) rule that prohibits the consideration of direct spending legislation that is projected to increase the deficit.", "Numerous other points of order exist. A summary of many of these can be found in CRS Report 97-865, Points of Order in the Congressional Budget Process , by James V. Saturno."], "subsections": []}, {"section_title": "Budget Enforcement Through Statutory Means", "paragraphs": ["In addition to points of order, there are other types of budget enforcement mechanisms that employ statutory enforcement known as a sequester. A sequester provides for the automatic cancellation of previously enacted spending, making largely across-the-board reductions to nonexempt programs, activities, and accounts. A sequester is implemented through a sequestration order issued by the President as required by law.", "The purpose of a sequester is to enforce certain statutory budget requirements, such as enforcing statutory limits on discretionary spending or ensuring that new revenue and direct spending laws do not have the net effect of increasing the deficit. Generally, sequesters have been used as an enforcement mechanism that would either discourage Congress from enacting legislation violating a specific budgetary goal or encourage Congress to enact legislation that would fulfill a specific budgetary goal.", "Sequestration is currently employed as the enforcement mechanism for three budgetary policies: ", "1. The Budget Control Act of 2011 (BCA; P.L. 112-25 ) established annual statutory limits on each defense discretionary and non-defense discretionary spending that are in effect through 2021. If legislation is enacted breaching either the defense or non-defense discretionary spending cap, then a sequester will occur, making cuts to non-exempt programs within the corresponding category to make up for the breach. In this situation, the sequester will either deter enactment of legislation violating the spending limits or\u2014in the event that legislation is enacted violating these limits\u2014automatically reduce discretionary spending to the limit specified in law. 2. The BCA also created a Joint Select Committee on Deficit Reduction instructed to develop legislation to reduce the budget deficit by at least $1.5 trillion over the 10-year period FY2012-FY2021. The BCA stipulated that if a measure meeting specific requirements was not enacted by January 15, 2012, then a sequester would be triggered to enforce the budgetary goal established for the committee. In this situation the sequester was meant to either encourage agreement on deficit reduction legislation or, in the event that such agreement was not reached, automatically reduce spending so that an equivalent budgetary goal would be achieved. Because the agreement was not reached, this sequester is now in effect through 2024. 3. Another enforcement mechanism was created by the Statutory Pay-As-You-Go Act of 2010 ( P.L. 111-139 ). The budgetary goal of Statutory PAYGO is to ensure that new revenue and direct spending legislation enacted during a session of Congress does not have the net effect of increasing the deficit (or reducing a surplus) over either a 6- or 11-year period. The sequester enforces this requirement by either deterring enactment of such legislation or, in the event that legislation has such an effect, automatically reducing spending to achieve the required deficit neutrality."], "subsections": []}]}]}}
{"id": "R44017", "title": "Iran\u2019s Foreign and Defense Policies", "released_date": "2019-05-08T00:00:00", "summary": ["Iran's national security policy is the product of many overlapping and sometimes competing factors such as the ideology of Iran's Islamic revolution, perception of threats to the regime and to the country, long-standing national interests, and the interaction of the Iranian regime's factions and constituencies. Iran's leadership:", "Seeks to deter or thwart U.S. or other efforts to invade or intimidate Iran or to bring about a change of regime. Has sought to take advantage of opportunities of regional conflicts to overturn a power structure in the Middle East that it asserts favors the United States, Israel, Saudi Arabia, and other Sunni Muslim Arab regimes. Seeks to enhance its international prestige and restore a sense of \"greatness\" reminiscent of ancient Persian empires. Advances its foreign policy goals, in part by providing material support to regional allied governments and armed factions. Iranian officials characterize the support as helping the region's \"oppressed\" and assert that Saudi Arabia, in particular, is instigating sectarian tensions and trying to exclude Iran from regional affairs. Sometimes disagrees on tactics and strategies. Supreme Leader Ali Khamene'i and key hardline institutions, such as the Islamic Revolutionary Guard Corps (IRGC), oppose any compromises of Iran's national security core goals. Iran's elected president, Hassan Rouhani, and Foreign Minister Mohammad Javad Zarif support Iran's integration into regional and international diplomacy. Supports acts of international terrorism, as the \"leading\" or \"most active\" state sponsor of terrorism, according to each annual State Department report on international terrorism since the early 1990s.", "The Administration insists that an end to Iran's malign activities is a requirement of any revised JCPOA and normalization of relations with the United States. The Trump Administration has articulated a strategy to counter Iran's \"malign activities\" based on:", "Applying \"maximum pressure\" on Iran's economy and regime through sanctions. President Trump withdrew the United States from the JCPOA on May 8, 2018, and reimposed all U.S. sanctions as of November 5, 2018. Attempting to diplomatically, politically, and economically isolate Iran. Training, arming, and providing counterterrorism assistance to partner governments and some allied substate actors in the region. Deploying U.S. forces to deter Iran and interdict its arms shipments to its allies and proxies. Indirectly threatening military action against Iranian actions that pose an immediate threat to U.S. regional interests or allies."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["Successive Administrations have identified Iran as a key national security challenge. The Trump Administration encapsulated its assessment of the threat posed by Iran in a late September 2018 State Department report entitled \"Outlaw Regime: A Chronicle of Iran's Destructive Activities.\" It outlines Iran's malign activities as well as a litany of other activities the Administration terms \"the Iranian regime's destructive behavior at home and abroad.\" The U.S. intelligence community testified in January 2019 that \"Iran's regional ambitions and improved military capabilities almost certainly will threaten U.S. interests in the coming year, driven by Tehran's perception of increasing U.S., Saudi, and Israeli hostility, as well as continuing border insecurity, and the influence of hardliners.\" An annual Defense Department report on Iran's military power required by successive National Defense Authorization Acts (NDAAs), generally contain assessments similar to those presented publicly by the intelligence community. "], "subsections": []}, {"section_title": "Iran's Policy Motivators", "paragraphs": ["Iran's foreign and defense policies are products of overlapping, and sometimes contradictory, motivations. One expert asserts that Iran has not decided whether it is a \"nation, or a cause.\" "], "subsections": [{"section_title": "Threat Perception", "paragraphs": ["Iran's leaders are apparently motivated, at least to some extent, by the perception of threats to their regime and their national interests posed by the United States and its allies. ", "Supreme Leader Grand Ayatollah Ali Khamene'i, Iran's paramount decisionmaker since 1989, has repeatedly stated that the United States seeks to overturn Iran's regime through support for anti-regime activists, economic sanctions, and alliances with Iran's regional adversaries. Iran's leaders assert that the U.S. military presence in and around the Persian Gulf region reflects intent to intimidate Iran or attack it if Iran pursues policies the United States finds inimical. Iran's leaders assert that the United States' support for Sunni Arab regimes that oppose Iran has led to the empowerment of radical Sunni Islamist groups and spawned Sunni-dominated terrorist groups such as the Islamic State. "], "subsections": []}, {"section_title": "Ideology", "paragraphs": ["The ideology of Iran's 1979 Islamic revolution infuses Iran's foreign policy. The revolution overthrew a secular, authoritarian leader, the Shah, who the leaders of the revolution asserted had suppressed Islam and its clergy. A clerical regime was established in which ultimate power is invested in a \"Supreme Leader\" who melds political and religious authority. ", "In the early years after the revolution, Iran attempted to \"export\" its revolution to nearby Muslim states. In the late 1990s, Iran appeared to abandon that goal because its promotion produced resistance to Iran in the region. However, the various conflicts in the region that arose from the 2011 \"Arab Spring\" uprisings have appeared to give Iran opportunities to revive that goal to some extent. Iran's leaders assert that the political and economic structures of the Middle East are heavily weighted in favor of the United States and its regional allies and against who Iranian leaders describe as \"oppressed peoples\": the Palestinians, who do not have an independent state, and Shia Muslims, who are politically underrepresented and economically disadvantaged minorities in many countries of the region. Iran claims that the region's politics and economics have been distorted by Western intervention and economic domination. Iranian leaders also assert that the creation of Israel is a manifestation of Western intervention that deprived the Palestinians of legitimate rights. Iranian leaders frequently assert that the Islamic revolution made Iran independent of U.S. influence and that the country's foreign policy is intended, at least in part, to ensure that the United States cannot interfere in Iran's domestic affairs. They cite as evidence of past U.S. interference the 1953 U.S.-backed overthrow of elected Prime Minister Mohammad Mossadeq and U.S. backing for Saddam Hussein's regime in the 1980-1988 Iran-Iraq war. Iran claims its ideology is pan-Islamic and nonsectarian. It cites its support for Sunni groups such as Hamas and for secular Palestinian groups as evidence that it works with non-Islamist and non-Shia groups to promote Palestinian rights. "], "subsections": []}, {"section_title": "National Interests", "paragraphs": ["Iran's national interests usually dovetail with, but sometimes conflict with, Iran's ideology. ", "Iran's leaders, stressing Iran's well-developed civilization and historic independence, claim a right to be recognized as a major power in the region. They contrast Iran's history with that of the six Persian Gulf monarchy states (Saudi Arabia, Kuwait, United Arab Emirates, Qatar, Bahrain, and Oman of the Gulf Cooperation Council, GCC), most of which gained independence only in the 1960s and 1970s. To this extent, many of Iran's foreign policy actions are similar to those undertaken by the Shah of Iran and prior Iranian dynasties. Iran has generally refrained from backing Islamist movements in the Central Asian countries, which are mainly Sunni inhabited and whose Islamist movements are largely hostile toward Iran. Iran has sometimes tempered its commitment to aid other Shias to promote its geopolitical interests. For example, it has supported mostly Christian-inhabited Armenia, rather than Shia-inhabited Azerbaijan, in part to thwart cross-border Azeri nationalism among Iran's large Azeri minority. Even though Iranian leaders accuse U.S. allies of contributing to U.S. efforts to structure the Middle East to its advantage, Iranian officials have sought to engage with historic U.S. allies, such as Turkey, to try to thwart international sanctions and consolidate Iran's position in Syria. "], "subsections": []}, {"section_title": "Factional Interests, Competition, and Public Opinion", "paragraphs": ["Iran's foreign policy often appears to reflect differing approaches and outlooks among key players and interest groups.", "Supreme Leader Khamene'i sits as the apex of Iran's hardline leaders and factions. His consistent refrain, and the title of his book widely available in Iran, is \"I am a revolutionary, not a diplomat.\" He and leaders of Iran's Islamic Revolutionary Guard Corps (IRGC), the military and internal security force created after the Islamic revolution, consistently support regional interventions, even when doing so earns international criticism. More moderate Iranian leaders, including President Hassan Rouhani and Foreign Minister Mohammad Javad Zarif, argue that Iran should not have any \"permanent enemies.\" They maintain that a pragmatic foreign policy has resulted in easing of international sanctions under the JCPOA, increased worldwide attention to Iran's views, and the positioning of Iran as a trade and transportation hub. They argue for continuing to adhere to the JCPOA as a means of dividing the United States from Europe and other U.S. partners\u2014virtually all of which opposed the U.S. withdrawal from the JCPOA. Criticism from hardliners contributed to Zarif's resignation in February 2019, but Rouhani did not accept the resignation and Zarif remains in position. The moderate factions draw support from Iran's youth and intellectuals who want integration with the West. The degree to which public opinion shapes Iranian foreign policy decisions is not clear. During protests in Iran in December 2017-January 2018, some protesters expressed opposition to the use of Iran's financial resources for regional interventions rather than to improve the living standards of the population. And, the 2011-2016 period of comprehensive international sanctions weakened Iran's economy and living standards to the point where the government accepted a compromise to limit its nuclear program. Yet, the regime has not at any time shifted its regional policies in response to domestic public opinion. "], "subsections": []}]}, {"section_title": "Instruments of Iran's National Security Strategy", "paragraphs": ["Iran employs a number of different methods and mechanisms to implement its foreign policy. "], "subsections": [{"section_title": "Support to Allied Regimes and Groups and Use of Terrorism", "paragraphs": ["Iran uses support for terrorist groups and armed factions as an instrument of policy. In some cases, such as Lebanese Hezbollah and some Iraqi Shia factions, Iran has established Shia militia groups as armed factions and, through funding and advice, has helped build them into political movements that acquire political legitimacy and seats in national parliaments and cabinets. ", "The State Department report on international terrorism for 2017 stated that Iran remained the foremost state sponsor of terrorism in 2017, and continued to provide arms, training, and military advisers in support of allied governments and movements, such as the regime of President Bashar Al Asad of Syria, Lebanese Hezbollah, Hamas and other Palestinian militant groups, Houthi rebels in Yemen, Shia militias in Iraq, and underground violent groups in Bahrain. Other Administration reports, testimony, and statements, including DNI worldwide threat assessment testimony in recent years, make similar assertions. Many of the groups Iran supports are named as Foreign Terrorist Organizations (FTOs) by the United States, and because of that support, Iran was placed on the U.S. list of state sponsors of terrorism (\"terrorism list\") in January 1984. Some armed factions that Iran supports have not been named as FTOs. Such groups include the Houthi (\"Ansar Allah\") movement in Yemen (composed of Zaidi Shia Muslims), the Taliban, and underground Shia opposition factions in Bahrain. Iran generally opposes Sunni terrorist groups that work against Iran's core interests, such as Al Qaeda and the Islamic State. Iran actively combatted the Islamic State in Syria and Iraq. Iran has expelled some Al Qaeda activists who it allowed to take refuge there after the September 11, 2001, attacks, but some reportedly remain, perhaps in an effort by Iran to exert leverage against the United States or Saudi Arabia. Iran's operations in support of its allies are carried out by the Qods (Jerusalem) Force of the IRGC (IRGC-QF). That force, estimated to have about 20,000 personnel, is headed by IRGC Major General Qasem Soleimani, who is said to report directly to Khamene'i. IRGC and IRGC-QF leaders generally publicly acknowledge operations in support of regional allies, although often characterizing Iran's support as humanitarian aid or protection for Shia religious shrines or sites. Much of the weaponry Iran supplies to its allies includes specialized anti-tank systems (\"explosively forced projectiles\" EFPs), artillery rockets, mortars, short-range ballistic missiles, and cruise missiles. The table below lists major terrorist attacks sponsored by Iran and/or Hezbollah, and does not include plots that were foiled. In recent months, authorities in Europe have arrested Iranian diplomats and operatives, including IRGC-QF agents, suspected of organizing terrorist plots against Iranian dissidents and other targets. In January 2018, Germany arrested 10 IRGC-QF operatives. In March 2018, Albania arrested two Iranian operatives for terrorist plotting. In mid-2018, authorities in Germany, Belgium, and France arrested Iranian operatives, including one based at Iran's embassy in Austria, for a suspected plot to bomb a rally by Iranian dissidents in Paris. In October 2018, an Iranian operative was arrested for planning assassinations in Denmark. "], "subsections": []}, {"section_title": "Direct Military Action", "paragraphs": ["Iran seemingly prefers indirect action through proxies and armed factions it supports, but does sometimes undertake direct military action. Iran conducts, although less frequently in 2017-2018, \"high speed intercepts\" of U.S. ships in the Persian Gulf as an apparent show of strength. Iran has, on some occasions, diverted or detained international shipping transiting the Gulf. In 2018, Iran has conducted missile strikes on regional opponents. In September, Iran fired missiles at a Kurdish opposition group based in northern Iraq. In early October, Iran fired, from Iranian territory, missiles at Islamic State positions in Syria. "], "subsections": []}, {"section_title": "Other Political Action/Cyberattacks", "paragraphs": ["Iran's national security is not limited to militarily supporting allies and armed factions. ", "A wide range of observers report that Iran has provided funding to political candidates in neighboring Iraq and Afghanistan to cultivate allies there. Iran has provided direct payments to leaders of neighboring states to gain and maintain their support. In 2010, then-President of Afghanistan Hamid Karzai publicly acknowledged that his office had received cash payments from Iran. Iran has established some training and education programs that bring young Muslims to study in Iran. One such program runs in Latin America, despite the small percentage of Muslims there. Since 2012, Iran has dedicated significant resources toward cyberespionage and has conducted cyberattacks against the United States and U.S. allies in the Persian Gulf. Government-supported Iranian hackers have conducted a series of cyberattacks against oil and gas companies in the Persian Gulf. "], "subsections": []}, {"section_title": "Diplomacy", "paragraphs": ["Iran also uses traditional diplomatic tools. ", "Iran has an active Foreign Ministry and maintains embassies or representation in all countries with which it has diplomatic relations. Khamene'i has rarely traveled outside Iran as Supreme Leader\u2014and not at all in recent years\u2014but Iranian presidents travel outside Iran regularly, including to Europe and U.N. meetings in New York. Khamene'i frequently hosts foreign leaders in Tehran. From August 2012 until August 2015, Iran held the presidency of the Non-Aligned Movement (NAM), which has about 120 member states and 17 observer countries and generally shares Iran's criticisms of big power influence over global affairs. In August 2012, Iran hosted the NAM annual summit. Iran is a party to all major nonproliferation conventions, including the Nuclear Non-Proliferation Treaty (NPT) and the Chemical Weapons Convention (CWC). Iran insists that it has adhered to all its commitments under these conventions, but the international community asserted that it did not meet all its obligations under these pacts. Nuclear negotiations between Iran and international powers began in 2003 and culminated with the July 2015 JCPOA. Iran is actively seeking to expand its participation in multilateral organizations. It has sought to join the World Trade Organization (WTO) since the mid-1990s. Iran also seeks full membership in regional organizations including the South Asian Association of Regional Cooperation (SAARC) and the Shanghai Cooperation Organization (SCO). Officials from some SCO countries have said that the JCPOA removed obstacles to Iran's obtaining full membership, but opposition from some members has blocked Iran's accession to date. Iran has participated in multilateral negotiations to try to resolve the civil conflict in Syria, even though Iran's main goal is to ensure Asad's continuation in power. "], "subsections": []}]}, {"section_title": "Iran's Nuclear and Defense Programs", "paragraphs": ["Iran has pursued a wide range of defense programs, as well as a nuclear program that the international community perceived could be intended to eventually produce a nuclear weapon. These programs are discussed in the following sections. "], "subsections": [{"section_title": "Nuclear Program22", "paragraphs": ["Iran's nuclear program has been a paramount U.S. concern, in part because Iran's acquisition of an operational nuclear weapon could cause Iran to perceive that it is immune from military pressure and produce a regional nuclear arms race. Israeli leaders have characterized an Iranian nuclear weapon as a threat to Israel's existence. Some Iranian leaders argue that a nuclear weapon could end Iran's historic vulnerability to great power invasion, domination, or regime change attempts.", "Iran's nuclear program became a major issue in 2002, when U.S. officials confirmed that Iran was building a uranium enrichment facility at Natanz and a heavy water production plant at Arak. The threat escalated in 2010, when Iran began enriching uranium to 20% purity, which requires most of the effort needed to produce weapons-grade uranium (90%+ purity). A nuclear weapon also requires a detonation mechanism. The International Atomic Energy Agency (IAEA) concluded that Iran researched such a mechanism until 2009. The United States insists that Iran must not possess a nuclear-capable missile. "], "subsections": [{"section_title": "Iran's Nuclear Intentions and Activities", "paragraphs": ["The U.S. intelligence community has stated in recent years that it \"does not know whether Iran will eventually decide to build nuclear weapons.\" Iranian leaders cite Supreme Leader Khamene'i's 2003 proclamation ( fatwa ) that nuclear weapons are un-Islamic as evidence that a nuclear weapon is inconsistent with Iran's ideology. Iranian leaders assert that Iran's nuclear program was always intended for civilian uses, including medicine and electricity generation. Iran argued that uranium enrichment is its \"right\" as a party to the 1968 Nuclear Non-Proliferation Treaty and that it wants to make its own nuclear fuel to avoid potential supply disruptions. U.S. officials have said that Iran's use of nuclear energy is acceptable. IAEA findings that Iran researched a nuclear explosive device\u2014detailed in a December 2, 2015, International Atomic Energy Agency (IAEA) report\u2014cast doubt on Iran's assertions of purely peaceful intent. There were no assertions that Iran, at any time, diverted nuclear material for a weapons program. "], "subsections": [{"section_title": "Nuclear Weapons Time Frame Estimates", "paragraphs": ["In April 2015, then-Vice President Biden stated that Iran could likely have enough fissile material for a nuclear weapon within two to three months of a decision to manufacture that material. U.S. officials said that the JCPOA increased the \"breakout time\"\u2014an all-out effort by Iran to develop a nuclear weapon using declared facilities or undeclared covert facilities\u2014to at least 12 months. When the JCPOA was agreed, Iran had about 19,000 total installed centrifuges to enrich uranium, of which about 10,000 were operating. Prior to the interim nuclear agreement (Joint Plan of Action, JPA), Iran had a stockpile of 400 pounds of 20% enriched uranium (short of the 550 pounds that would be needed to produce one nuclear weapon). Weapons grade uranium is uranium that is enriched to 90%. ", "Under the JCPOA, Iran is allowed to operate only about 5,000 centrifuges and was required to reduce its stockpile of 3.67% enriched uranium to 300 kilograms (660 pounds). These restrictions start to expire in October 2025\u201410 years from Adoption Day (October 2015). Another means of acquiring fissile material for a nuclear weapon is to reprocess plutonium, a material that could be produced by Iran's heavy water plant at Arak. In accordance with the JCPOA, Iran rendered inactive the core of the reactor and it has limited its stockpile of heavy water. ", "The JCPOA does not prohibit civilian nuclear plants such as the one Russia built at Bushehr. Under a 1995 bilateral agreement, Russia supplies nuclear fuel for that plant and takes back the spent nuclear material for reprocessing. It became operational in 2012. "], "subsections": []}]}, {"section_title": "Diplomatic History of Addressing Iran's Nuclear Program", "paragraphs": ["The JCPOA was the product of a long international effort to persuade Iran to negotiate limits on its nuclear program. In 2003, France, Britain, and Germany (the \"EU-3\") opened a diplomatic track to negotiate curbs on Iran's program, and in October 2003 they obtained an Iranian pledge, in return for receiving peaceful nuclear technology, to suspend uranium enrichment activities and sign and ratify the \"Additional Protocol\" to the NPT (allowing for enhanced inspections). Iran signed the Additional Protocol on December 18, 2003, although the Majles did not ratify it. ", "Iran ended the suspension after several months, but the EU-3 and Iran subsequently reached a November 14, 2004, \"Paris Agreement,\" under which Iran suspended uranium enrichment in exchange for trade talks and other non-U.S. aid. The Bush Administration supported the agreement with a March 11, 2005, announcement by dropping the U.S. objection to Iran's applying to join the World Trade Organization (WTO). That agreement broke down in 2005 when Iran rejected an EU-3 proposal for a permanent nuclear accord as offering insufficient benefits. In August 2005, Iran began uranium \"conversion\" (one step before enrichment) at its Esfahan facility and, on February 4, 2006, the IAEA board voted 27-3 to refer the case to the Security Council. The Council set an April 29, 2006, deadline to cease enrichment.", "\"P5+1\" Formed . In May 2006, the Bush Administration join the talks, triggering an expanded negotiating group called the \"Permanent Five Plus 1\" (P5+1: United States, Russia, China, France, Britain, and Germany). A month after it formed, the P5+1 offered Iran guaranteed Iran nuclear fuel for its civilian reactor (Annex I to Resolution 1747) and threatened sanctions if Iran did not agree (sanctions were imposed in subsequent years)."], "subsections": [{"section_title": "U.N. Security Council Resolutions Adopted", "paragraphs": ["The U.N. Security Council subsequently imposed sanctions on Iran in an effort to shift Iran's calculations toward compromise, as outlined in the text box below."], "subsections": []}]}, {"section_title": "The Obama Administration and the JCPOA", "paragraphs": ["The P5+1 met in February 2009 to incorporate the Obama Administration's stated commitment to direct U.S. engagement with Iran and, in April 2009, U.S. officials announced that a U.S. diplomat would attend P5+1 meetings with Iran. In July 2009, the United States and its allies demanded that Iran offer constructive proposals by late September 2009 or face \"crippling sanctions.\" A September 9, 2009, Iranian proposal led to an October 1, 2009, P5+1-Iran meeting in Geneva that produced a tentative agreement for Iran to allow Russia and France to reprocess 75% of Iran's low-enriched uranium stockpile for medical use. A draft agreement was approved by the P5+1 countries following technical talks in Vienna on October 19-21, 2009, but the Supreme Leader decided that Iran's concessions were excessive and no accord was finalized. ", "In April 2010, Brazil and Turkey negotiated with Iran to revive the October arrangement. On May 17, 2010, the three countries signed a \"Tehran Declaration\" for Iran to send 2,600 pounds of low enriched uranium to Turkey in exchange for medically useful uranium. Iran submitted to the IAEA an acceptance letter, but the Administration rejected the plan for failing to address enrichment to the 20% level. "], "subsections": [{"section_title": "U.N. Security Council Resolution 1929", "paragraphs": ["Immediately after the Brazil-Turkey mediation failed, then-Secretary of State Clinton announced that the P5+1 had reached agreement on a new U.N. Security Council Resolution that would give U.S. allies authority to take substantial new economic measures against Iran. Adopted on June 9, 2010, Resolution 1929 was pivotal by linking Iran's economy to its nuclear capabilities and thereby authorizing U.N. member states to sanction key Iranian economic sectors. An annex to the Resolution presented a modified offer of incentives to Iran. Negotiations subsequent to the adoption of Resolution 1929\u2014in December 2010, in Geneva and January 2011, in Istanbul\u2014floundered over Iran's demand for immediate lifting of international sanctions. Additional rounds of P5+1-Iran talks in 2012 and 2013 (2012: April in Istanbul; May in Baghdad; and June in Moscow; 2013: Almaty, Kazakhstan, in February and in April) did not reach agreement on a P5+1 proposals that Iran halt enrichment to the 20% level; close the Fordow facility; and remove its stockpile of 20% enriched uranium. "], "subsections": []}, {"section_title": "Joint Plan of Action (JPA)", "paragraphs": ["The June 2013 election of Rouhani as Iran's president improved the prospects for a nuclear settlement and, in advance of his visit to the U.N. General Assembly in New York during September 23-27, 2013, Rouhani stated that the Supreme Leader had given him authority to negotiate a nuclear deal. The Supreme Leader affirmed that authority in a speech on September 17, 2013, stating that he believes in the concept of \"heroic flexibility\"\u2014adopting \"proper and logical diplomatic moves....\" An interim nuclear agreement, the Joint Plan of Action (JPA), was announced on November 24, 2013, providing modest sanctions relief in exchange for Iran (1) eliminating its stockpile of 20% enriched uranium, (2) ceasing to enrich to that level, and (3) not increasing its stockpile of 3.5% enriched uranium. "], "subsections": []}, {"section_title": "The Joint Comprehensive Plan of Action (JCPOA)33", "paragraphs": ["P5+1-Iran negotiations on a comprehensive settlement began in February 2014 but missed several self-imposed deadlines. On April 2, 2015, the parties reached a framework for a JCPOA, and the JCPOA was finalized on July 14, 2015. U.N. Security Council Resolution 2231 of July 20, 2015, endorsed the JCPOA and contains restrictions (less stringent than in Resolution 1929) on Iran's importation or exportation of conventional arms (for up to five years), and on development and testing of ballistic missiles capable of delivering a nuclear weapon (for up to eight years). On January 16, 2016, the IAEA certified that Iran completed the work required for sanctions relief and \"Implementation Day\" was declared. "], "subsections": []}]}, {"section_title": "The Trump Administration and the Deterioration of the JCPOA", "paragraphs": ["The Trump Administration criticized the JCPOA for not addressing key U.S. concerns about Iran's continuing \"malign activities\" in the region or its ballistic missile program, and the expiration of key nuclear restrictions. In October 2017, the Administration withheld certification of Iranian compliance under the Iran Nuclear Agreement Review Act (INARA, P.L. 114-17 ) on the grounds that sanctions relief was not proportional to the limitations on Iran's nuclear program. The noncertification enabled Congress to use expedited rules to reimpose U.S. sanctions, but Congress did not take any action. ", "On October 13, 2017, and January 12, 2018, the President threatened to withdraw the United States from the JCPOA unless Congress and the European countries acted to (1) extend the JCPOA's nuclear restrictions beyond current deadlines to ensure that Iran never comes close to developing a nuclear weapon; (2) impose strict sanctions on Iran's development of ballistic missiles; and (3) ensure that Iran allows \"immediate\" access to any site that the IAEA wants to visit. The Administration insisted that U.S. allies address Iran's \"malign activities\" in the region. The European countries negotiated with the United States but ultimately did not meet all of his stipulated conditions. On May 8, 2018, President Trump withdrew the United States from the JCPOA and announced that all U.S. sanctions would be reimposed by November 4, 2018. ", "On August 29, 2018, the Administration provided Congress with a report mandated by the Countering America's Adversaries through Sanctions Act ( P.L. 115-44 ) on its strategy to counter \"Iran's conventional and asymmetric threats.\" The elements of the strategy are discussed throughout this report. ", "In May 2019, the Trump Administration revoked some of the waivers under U.S. law that enable European and other countries to provide technical assistance to Iran's JCPOA-permitted nuclear sites. On May 8, 2019, after that announcement as well as a series of U.S. sanctions announcements against Iran, President Rouhani announced that Iran would begin exceeding some of the allowed limits to Iran's program \u2013 particularly the amount of low-enriched uranium and heavy water that Iran could stockpile. He announced that Iran would take further nuclear steps in violation of the JCPOA if its demands for the economic benefits of the JCPOA were not met within 60 days. "], "subsections": []}]}, {"section_title": "Missile Programs and Chemical and Biological Weapons Capability", "paragraphs": ["Iran has an active missile development program, as well as other WMD programs at varying stages of activity and capability, as discussed further below. "], "subsections": [{"section_title": "Chemical and Biological Weapons36", "paragraphs": ["Iran signed the Chemical Weapons Convention (CWC) on January 13, 1993, and ratified it on June 8, 1997. The U.S. statement to the November 22, 2018, CWC review conference said that \"the United States has had longstanding concerns that Iran maintains a chemical weapons program that it failed to declare to the OPCW (Organization for the Prohibition of Chemical Weapons).\" The statement specified that Iran failed to submit a complete chemical weapons production facility declaration; that Iran did not declare all of its riot control agents; and that Iran failed to declare its transfer of chemical weapons to Libya in the 1980s. The statement added that the United States could not certify that Iran does not maintain an undeclared CW stockpile. ", "Iran also has ratified the Biological and Toxin Weapons Convention (BTWC), but it engages in dual-use activities with possible biological weapons applications that could potentially be inconsistent with the convention. ", "Iran is widely believed to be unlikely to use chemical or biological weapons or to transfer them to its regional proxies or allies because of the potential for international powers to discover their origin and retaliate against Iran for any use."], "subsections": []}, {"section_title": "Missiles37", "paragraphs": ["According to the September 2018 Administration report \"Outlaw Regime: A Chronicle of Iran's Destructive Activities,\" Iran has \"the largest ballistic missile force in the Middle East, with more than ten ballistic missile systems either in its inventory or in development, and a stockpile of hundreds of missiles that threaten its neighbors in the region.\" The intelligence community has said publicly that Iran \"can strike targets up to 2,000 kilometers from Iran's borders.\" ", "Iran is not known to possess an intercontinental ballistic missile (ICBM) capability (missiles of ranges over 2,900 miles), but the DNI threat assessment testimony of February 13, 2018, stated that \"Iran's work on a space launch vehicle (SLV)\u2014including on its Simorgh\u2014shortens the timeline to an ICBM because SLVs and ICBMs use similar technologies.\" However, then-IRGC Commander-in-Chief Ali Jafari said in October 2017 that the existing ranges of Iran's missiles are \"sufficient for now,\" suggesting that Iran has no plans to develop an ICBM. If there is a decision to do so, progress on Iran's space program could shorten the pathway to an ICBM because space launch vehicles use similar technology. ", "Iran's missile programs are run by the IRGC Aerospace Force, particularly the Al Ghadir Missile Command\u2014an entity sanctioned under Executive Order 13382. There are persistent reports that Iran-North Korea missile cooperation is extensive, but it is not known whether North Korea and Iran have recently exchanged missile hardware.", "At the more tactical level, Iran is acquiring, developing, and exporting short-range ballistic and cruise missiles that Iran's forces can use and/or transfer to regional allies and proxies to protect them and to enhance Iran's ability to project power. The U.S. intelligence community has said in recent years that Iran \"continues to develop and improve a range of new military capabilities to target U.S. and allied military assets in the region, including armed UAVs, ballistic missiles, advanced naval mines, unmanned explosive boats, submarines and advanced torpedoes, and anti-ship and land-attack cruise missiles.\" ", "Resolution 2231 (the operative Security Council resolution on Iran) \"calls on\" Iran not to develop or test ballistic missiles \"designed to be capable of\" delivering a nuclear weapon, for up to eight years from Adoption Day of the JCPOA (October 18, 2015). The wording is far less restrictive than that of Resolution 1929, which clearly prohibited Iran's development of ballistic missiles. The JCPOA itself does not specifically contain ballistic missile restraints. ", "Iran has continued developing and testing missiles, despite Resolution 2231, which took effect on January 16, 2016, \"Implementation Day.\" ", "On October 11, 2015, and reportedly again on November 21, 2015, Iran tested a 1,200-mile-range ballistic missile, which U.S. intelligence officials called \"more accurate\" than previous Iranian missiles of similar range. Iran conducted ballistic missile tests on March 8-9, 2016\u2014the first such tests after Implementation Day. Iran reportedly conducted a missile test in May 2016, although Iranian media had varying accounts of the range of the missile tested. A July 11-21, 2016, test of a missile of a range of 2,500 miles, akin to North Korea's Musudan missile, reportedly failed. It is not clear whether North Korea provided any technology or had any involvement in the test. On January 29, 2017, Iran tested what Trump Administration officials called a version of the Shahab missile and what outside experts called a Khorramshahr missile (see Table 2 ). Press reports say the test failed when the missile exploded after traveling about 600 miles. On July 27, 2017, Iran's Simorgh rocket launched a satellite into space. On January 15, 2019, a Simorgh vehicle failed to put a communications satellite into orbit. On December 1, 2018, Secretary of State Pompeo stated that Iran had test fired a medium-range ballistic missile \"capable of carrying multiple warheads.\" Iran continues to periodically test short-range ballistic missiles."], "subsections": [{"section_title": "U.S. and U.N. Responses to Iran's Missile Tests", "paragraphs": ["The Obama Administration termed Iran's post-Implementation Day ballistic missile tests as \"provocative and destabilizing\" and \"inconsistent with\" Resolution 2231. The Trump Administration termed Iran's July 27, 2017, space launch and its December 1, 2018, missile launch \"violations\" of the Resolution because of the inherent capability of the vehicle and the missile to carry a nuclear warhead. The U.N. Security Council has not imposed any additional sanctions on Iran for these tests to date. ", "Several successive Administrations have designated Iranian missile-related entities for sanctions under Executive Order 13382 and the Iran, North Korea, and Syria Nonproliferation Act. The Trump Administration has demanded, as a condition of any revised JCPOA, a binding ban on Iran's development of nuclear-capable ballistic missiles. Section 1226 of the FY2017 National Defense Authorization Act ( S. 2943 , P.L. 114-328 ) requires the DNI, as well as the Secretary of State and the Secretary of the Treasury, to submit quarterly reports to Congress on Iranian missile launches in the preceding year, and on efforts to impose sanctions on entities assisting those launches. The provision sunsets on December 31, 2019. ", "Iran asserts that conventionally armed missiles are an integral part of its defense strategy and they will not accept any new curbs on Iran's missile program. Iran argues that it is not developing a nuclear weapon and therefore is not designing its missile to carry a nuclear weapon. "], "subsections": []}, {"section_title": "U.S. and Other Missile Defenses", "paragraphs": ["Successive U.S. Administrations have sought to build up regional missile defense systems. The United States and Israel have a broad program of cooperation on missile defense as well as on defenses against shorter-range rockets and missiles such as those Iran supplies to Lebanese Hezbollah. Through sales of the Patriot system (PAC-3) and more advanced \"THAAD\" (Theater High Altitude Area Defense) to the Gulf states, the United States has sought to construct a coordinated GCC missile defense system. ", "The United States has sought a defense against an eventual long-range Iranian missile system by emplacing missile defense systems in various Eastern European countries and on ship-based systems. The United States has helped Israel develop the Arrow missile defense system that is intended to intercept Iranian (or other) ballistic missiles launched at Israel. Other Israeli systems developed with U.S. help, including Iron Dome and David's Sling, are intended to intercept rockets launched by Iranian allies Hezbollah and Hamas. The FY2013 national defense authorization act ( P.L. 112-239 ) contained provisions urging the Administration to undertake more extensive efforts, in cooperation with U.S. partners and others, to defend against the missile programs of Iran (and North Korea)."], "subsections": []}]}]}, {"section_title": "Conventional and \"Asymmetric Warfare\" Capability44", "paragraphs": ["Iran appears to be able to defend against any conceivable aggression from Iran's neighbors, while lacking the ability to project conventional military power outside the region or across waterways. Iran's forces are widely assessed as incapable of defeating the United States in a classic military confrontation, but they could potentially inflict significant damage or casualties on the U.S. military. Then-CENTCOM Commander General Joseph Votel testified on February 27, 2018, that Iran's ground forces are \"improving their ability to quickly mobilize and deploy in response to internal and external threats.\" ", "Organizationally, Iran's armed forces are divided to perform functions appropriate to their roles. The Islamic Revolutionary Guard Corps (IRGC, known in Persian as the Sepah-e-Pasdaran Enghelab Islami ) controls the Basij (Mobilization of the Oppressed) volunteer militia that has been the main instrument to repress domestic dissent. The IRGC also has a national defense role. The IRGC and the regular military ( Artesh )\u2014the national army that existed under the former Shah\u2014report to a joint headquarters. In June 2016, Supreme Leader Khamene'i replaced the longtime Chief of Staff (head) of the Joint Headquarters with IRGC Major General Mohammad Hossein Bagheri, an early IRGC recruit who fought against Kurdish insurgents and in the Iran-Iraq War. The appointment of an IRGC officer to head the joint headquarters again demonstrates the IRGC's dominance within Iran's military and security structure. ", "In April 2019, Khamene'i appointed a new IRGC Commander-in-Chief, IRGC Maj. Gen. Hossein Salami, to replace IRGC Maj. Gen. Mohammad Ali Jafari. Both are hardliners and IRGC operations and its political orientation are not expected to change. The IRGC Navy (IRGCN) and regular Navy (Islamic Republic of Iran Navy, IRIN) are distinct forces. As of 2007, the IRIN has responsibility for the Gulf of Oman, whereas the IRGC Navy has responsibility for the closer-in Persian Gulf and Strait of Hormuz more well-suited to its generally smaller ships. The IRGC Navy operates Iran's large inventory of small boats, including China-supplied patrol boats. In August 2018, the hardline IRGC General Alireza Tangsiri was appointed commander of the IRGC Navy. ", "Rouhani's August 2017 appointment of a senior Artesh figure, Brigadier General Amir Hatami, as Defense Minister suggests that the Artesh remains an integral part of the defense establishment. The Artesh is deployed mainly at bases outside cities and has no internal security role. The regular air force (Islamic Republic of Iran Air Force, IRIAF) operates most of Iran's traditional combat aircraft, whereas the IRGC Aerospace Force operates Iran's missile force and does not generally operate combat aircraft. The IRIN controls Iran's larger ships as well as its three Kilo-class submarines bought from Russia and the 14 North Korea-designed \"Yona\" (Ghadir, Iranian variant) midget subs, according to DOD reports. Iran is also developing increasingly lethal systems such as more advanced naval mines. Iran has a small number of warships on its Caspian Sea coast and, since 2014, Iran has periodically sent warships into the Atlantic Ocean to demonstrate growing naval capability. "], "subsections": [{"section_title": "Asymmetric Warfare Capacity", "paragraphs": ["Iran compensates for its conventional military deficiencies by focusing on \"asymmetric warfare.\" As an example, the IRGC Navy has developed forces and tactics to control the approaches to Iran, including the Strait of Hormuz, centering on an ability to \"swarm\" U.S. naval assets with its fleet of small boats and to launch large numbers of anti-ship cruise missiles and coastal defense cruise missiles. Iran has added naval bases along its coast in recent years, enhancing its ability to threaten shipping in the strait. As discussed further later in this report, IRGC Navy vessels sometimes conduct \"high-speed intercepts\"\u2014close-approaches of U.S. naval vessels in the Gulf. ", "Iran's arming of regional allies and proxies represents another aspect of Iran's development of asymmetric warfare capabilities. Iran's allies and proxies control territory within which Iran can emplace missiles, rockets, and factories to build military equipment. These allies help Iran expand its influence and project power with little direct risk, giving Tehran a measure of deniability. For example, Iran's provision of anti-ship missiles to the Houthi rebels in Yemen could represent an effort by Tehran to project military power into the key Bab el-Mandeb Strait chokepoint. Iran could also try to retaliate through terrorist attacks inside the United States or against U.S. embassies and facilities in Europe or the Persian Gulf. Iran could also try to direct Iran-supported forces in Afghanistan or Iraq to attack U.S. personnel in those countries. Iran's support for regional terrorist groups was a justification for Iran's addition to the U.S. list of state sponsors of terrorism (\"terrorism list\") in January 1984. "], "subsections": []}, {"section_title": "Military-to-Military Relationships", "paragraphs": ["Iran's armed forces have few formal relationships with foreign militaries outside the region. Iran's most significant military-to-military relationships have focused on Iranian arms purchases or upgrades. According to the August 2018 report to Congress mandated by the Countering America's Adversaries through Sanctions Act, Iran has bought weaponry from Russia, China, North Korea, Belarus, and Ukraine, and \"has obtained missile and aircraft technology from foreign suppliers, including China and North Korea.\" Iran and Russia have cooperated closely to assist the Asad regime in Syria. In August 2016, Iran allowed Russia's bomber aircraft, for a brief time, to use Iran's western airbase at Hamadan to launch strikes in Syria\u2014the first time the Islamic Republic gave a foreign military use of Iran's military facilities. Iran and India have a \"strategic dialogue\" and some Iranian naval officers reportedly underwent some training in India in the 1990s \u2013 a timeframe during which Iran's military also conducted joint exercises with the Pakistani armed forces. Iran has signed at least basic\u2014and in some cases more extensive\u2014military cooperation agreements with Syria, Afghanistan, Sudan, Oman, Venezuela, Belarus, Russia, China, and South Africa. ", "The IRIN (regular navy) appears to be trying to expand Iran's relationships through naval port visits, including to China in 2013 and South Africa in 2016. The IRIN has also, in recent years, made port visits to Sri Lanka, Tanzania, Azerbaijan, Indonesia, and South Africa, and held joint naval exercises with Oman, Bangladesh, India, Pakistan, Kazakhstan, Russia, China, Djibouti, and Italy. In September 2014, two Chinese warships docked at Iran's port of Bandar Abbas, for the first time in history, to conduct four days of naval exercises, and in October 2015, the leader of Iran's regular (not IRGC) Navy made the first visit ever to China by an Iranian Navy commander. In August 2017, the chief of Iran's joint military headquarters made the first top-level military visit to Turkey since Iran's 1979 revolution. "], "subsections": []}, {"section_title": "Iranian Arms Transfers and U.N. Restrictions", "paragraphs": ["Sales to Iran of most conventional arms (arms on a U.N. Register of Conventional Arms) were banned by U.N. Resolution 1929. Resolution 2231, which supersedes Resolution 1929, requires Security Council approval for any transfer of weapons or military technology, or related training or financial assistance, to Iran. The requirement extends for a maximum of five years from Adoption Day (until October 17, 2020). The Resolution named the systems subject to restriction: ", "Battle tanks; armored combat vehicles; large caliber artillery systems; combat aircraft; attack helicopters; warships; missiles or missile systems, as defined by the U.N. Register of Conventional Arms, or related material, including spare parts ... and the provision to Iran ... of technical training, financial resources or services, advice, other services or assistance related to the supply, sale, transfer, manufacture, maintenance, or use of arms and related materiel.... ", "Defense Minister Hossein Dehgan visited Moscow in February 2016, reportedly to discuss possible purchases of $8 billion worth of new conventional arms, including T-90 tanks, Su-30 aircraft, attack helicopters, anti-ship missiles, frigates, and submarines. Such purchases would require Security Council approval under Resolution 2231, and U.S. officials have said the United States would use its veto power to deny approval for the sale. ", "Resolution 2231 also requires Security Council approval for Iranian transfers of any weaponry outside Iran until October 17, 2020. Separate U.N. Security Council resolutions ban arms shipments to such conflict areas as Yemen (Resolution 2216) and Lebanon (Resolution 1701). Iran appears to have violated this restriction on numerous occasions, but the U.N. Security Council has not, to date, agreed on any punishments for these apparent violations. "], "subsections": []}, {"section_title": "Defense Budget", "paragraphs": ["Iran's defense budget generally runs about 4% of GDP, but was higher (6%) in 2018. Iran's national budget is about $300 billion and, in dollar terms, Iran's 2018-2019 defense budget was about $25 billion, up from about $23 billion in 2017. These observations appear to support President Trump's statement in his May 8, 2018, announcement of the U.S. withdrawal from the JCPOA that Iran's defense budget had increased 40% since the JCPOA has been implemented. Of the defense budget, about two-thirds funds the IRGC and its subordinate units, and about one-third funds the regular military ( Artesh ) and its units. By contrast, GCC combined defense spending is expected by defense industry experts to reach $100 billion in 2019. "], "subsections": []}]}]}, {"section_title": "Countering Iran's Malign Activities", "paragraphs": ["The Trump Administration has articulated a multilayered strategy to try to counter Iran's malign activities and \"roll back\" Iranian influence in the region. The centerpiece of the strategy is to utilize economic sanctions to change Iran's behavior and deny Iran the resources it needs to continue its regional operations. The State Department's 2018 report \"Outlaw Regime: A Chronicle of Iran's Destructive Activities\" asserts that Iran has spent over $16 billion since 2012 \"propping up the Assad regime and supporting [Iran's] other partners and proxies in Syria, Iraq, and Yemen.\"", "The Administration has also articulated 12 specific demands for Iran to change its behavior in exchange for a new JCPOA and normalized relations with the United States and the international community. The demands pertaining to Iran's regional activities, as stipulated in the May 21, 2018, speech by Secretary of State Pompeo at the Heritage Foundation are that Iran:", "End support to Middle East terrorist groups, including Lebanese Hizballah, Hamas, and the Palestinian Islamic Jihad. Respect the sovereignty of the Iraqi government and permit the disarming, demobilization, and reintegration of Shia militias. End military support to the Houthi militia and work toward a peaceful political settlement in Yemen. Withdraw all forces under Iranian command throughout the entirety of Syria. End support for the Taliban and other terrorists in Afghanistan and the region, and cease harboring senior al-Qaeda leaders. End the IRGC-QF's support for terrorists and militant partners around the world. End its threatening behavior against its neighbors, including threats to destroy Israel, firing of missiles into Saudi Arabia and the UAE, threats to international shipping, and destructive cyberattacks.", "Coalition Building. Moreover, the Administration has sought to build alliances to counter Iran strategically. Some initiatives, such as the formation of a \"Middle East Strategic Alliance,\" are discussed below. Building a coalition to counter Iran was a key component of Secretary of State Pompeo's trip to the GCC states, Iraq, Jordan, and Egypt in January 2019, as well as a ministerial meeting in Poland during February 13-14, 2019. ", "Threatening Military Action. The Administration also has threatened military retaliation for Iranian direct action. On September 21, 2018, Secretary of State Pompeo threatened action against Iran also for activities undertaken by Iran's proxies. According to the Secretary, \"We have told the Islamic Republic of Iran that using a proxy force to attack an American interest will not prevent us from responding against the prime actor.\" In early May 2019, the United States sent accelerated the deployment of an aircraft carrier group and sent a bomber group to the Persian Gulf region in response to what the Administration said were \"troubling; and escalatory indications and warnings\" related to Iran. The United States also works with local leaders and factions that seek to counter Iranian influence. The applications of Administration strategy are discussed in the sections below."], "subsections": [{"section_title": "Near East Region", "paragraphs": ["The focus of Iranian security policy is the Near East, where Iran employs all instruments of its national power. Successive Administrations have described many of Iran's regional operations as \"malign activities.\" Director of National Intelligence Dan Coats, in the February 13, 2018, delivery of the annual worldwide threat assessment testimony before Congress, assessed that \"Iran will seek to expand its influence in Iraq, Syria, and Yemen, where it sees conflicts generally trending in Tehran's favor.\" Secretary of State Pompeo described a litany of Iranian malign activities in his speech to the Heritage Foundation on May 21, 2018, referenced above. ", "A question that often proves difficult is that of the dollar value of material support that the IRGC-QF provides to Iran's allies and proxies. Published estimates vary widely and are difficult to corroborate. Information from official U.S. government sources sometimes provides broad dollar figures without breakdowns or clear information on how those figures were derived. "], "subsections": [{"section_title": "The Persian Gulf", "paragraphs": ["Iran has a 1,100-mile coastline on the Persian Gulf and Gulf of Oman, and exerting dominance of the Gulf has always been a key focus of Iran's foreign policy\u2014even during the reign of the Shah of Iran. In 1981, perceiving a threat from revolutionary Iran and spillover from the Iran-Iraq War that began in September 1980, the six Gulf states formed the Gulf Cooperation Council alliance (GCC: Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, and the United Arab Emirates). U.S.-GCC security cooperation expanded during the 1980-1988 Iran-Iraq War and became more institutionalized after the 1990 Iraqi invasion of Kuwait. Prior to 2003, the extensive U.S. presence in the Gulf was in large part to contain Saddam Hussein's Iraq but, with Iraq militarily weak since Saddam's ouster, the U.S. military presence in the Gulf focuses primarily on containing Iran and conducting operations against regional terrorist groups.", "Several of the GCC leaders have accused Iran of fomenting unrest among Shia communities in the GCC states. Yet, the GCC states maintain relatively normal trading relations with Iran. In 2017, Iran sought to ease tensions with the GCC countries in an exchange of letters and a February 2017 visit by President Hassan Rouhani to Kuwait and Oman, but the long-standing issues that divide Iran and the GCC countries thwarted the initiative. ", "The willingness of Qatar, Kuwait, and Oman to engage Iran contributed to a rift within the GCC in which Saudi Arabia, UAE, and Bahrain\u2014joined by a few other Muslim countries\u2014announced on June 5, 2017, an air, land, and sea boycott of Qatar. The rift has given Iran an opportunity to accomplish a long-standing goal of weakening the GCC alliance. The GCC rift came two weeks after President Donald Trump visited Saudi Arabia and expressed strong support for its policies. "], "subsections": [{"section_title": "Saudi Arabia54", "paragraphs": ["Iranian and Saudi leaders accuse each other of seeking regional hegemony and the two countries consistently have sought to weaken each other, including by supporting each other's oppositionists. The mutual animosity has aggravated regional sectarian tensions and caused escalations of the region's various conflicts. In 2015, Saudi Arabia led a coalition that intervened in Yemen's internal conflict in an effort to roll back Iranian influence by reducing the territory under the control of Houthi rebels there. Saudi Arabia, with corroboration from U.S. officials and a U.N. \"panel of experts\" on the Yemen conflict, has blamed Iran directly for supplying the Houthis with ballistic missiles that have been fired on the Kingdom. In 2017, Saudi leaders unsuccessfully sought to undermine Lebanese Hezbollah by pressuring Saudi ally and Lebanon Prime Minister Sa'd Hariri to expose Hezbollah's political influence in Lebanon. Saudi leaders have sought since 2017 to more extensively engage Iraqi leaders to draw the country closer to the Arab world and away from Iran. Iran blamed Saudi Arabia and the Islamic State organization, for the September 22, 2018, attack on a military parade in Ahwaz, in mostly Arab southwestern Iran, which killed 25 persons. Iran did not retaliate against Saudi Arabia, instead launching missiles against Islamic State positions in Syria on October 1, 2018. ", "In January 2016, Saudi Arabia severed diplomatic relations with Iran in the wake of violent attacks and vandalism against its embassy in Tehran and consulate in Mashhad, Iran. The attacks were a reaction to Saudi Arabia's January 2, 2016, execution of an outspoken Shia cleric, Nimr Baqr al Nimr, alongside dozens of Al Qaeda members; all had been convicted of treason and/or terrorism charges. Subsequently, Saudi Arabia and Bahrain broke diplomatic relations with Iran, and Qatar, Kuwait, and UAE recalled their ambassadors from Iran. In December 2016, Saudi Arabia executed 15 Saudi Shias sentenced to death for \"spying\" for Iran. ", "Strong backers of a hard line U.S. policy toward Iran, Saudi leaders publicly applauded the Trump Administration's May 2018 exit from the JCPOA. Saudi Crown Prince Mohammad bin Salman Al Saudi, on the eve of a March 20, 2018, meeting with President Trump, stated that Saudi Arabia would acquire a nuclear weapon if Iran does. ", "Saudi officials repeatedly cite past Iran-inspired actions as a reason for distrusting Iran. These actions include Iran's encouragement of violent demonstrations at some Hajj pilgrimages in Mecca in the 1980s and 1990s, which caused a break in relations from 1987 to 1991. The two countries increased mutual criticism of each other's actions in the context of the 2016 Hajj. Saudi Arabia asserts that Iran instigated the June 1996 Khobar Towers bombing and accused it of sheltering the alleged mastermind of the bombing, Ahmad Mughassil. "], "subsections": []}, {"section_title": "United Arab Emirates (UAE)56", "paragraphs": ["The UAE is aligned with Saudi Arabia on the Iran issues. It likewise applauded the U.S. pullout from the JCPOA and has been, aside from Saudi Arabia, the lead force combatting the Houthis in Yemen. UAE leaders blamed Iran for arming the Houthis with anti-ship missiles that damaged a UAE naval vessel in the Bab el-Mandeb Strait in late 2016. Despite their political and territorial differences, the UAE and Iran maintain extensive trade and commercial ties. Iranian-origin residents of Dubai emirate number about 300,000, and many Iranian-owned businesses are located there, including branch offices of large trading companies based in Iran. ", "The UAE is alone in the GCC in having a long-standing territorial dispute with Iran, concerning the Persian Gulf islands of Abu Musa and the Greater and Lesser Tunb islands. The Tunbs were seized by the Shah of Iran in 1971, and the Islamic Republic took full control of Abu Musa in 1992, violating a 1971 agreement to share control of that island. The UAE has sought to refer the dispute to the International Court of Justice (ICJ), but Iran insists on resolving the issue bilaterally. (ICJ referral requires concurrence from both parties to a dispute.) In 2013-2014, the two countries held direct apparently productive discussions on the issue and Iran reportedly removed some military equipment from the islands. However, no resolution has been announced. The GCC has consistently backed the UAE position. "], "subsections": []}, {"section_title": "Qatar58", "paragraphs": ["Since 1995, Qatar has occupied a \"middle ground\" between anti-Iran animosity and sustained engagement with Iran. The speaker of Iran's Majles (parliament) visited Qatar in March 2015 and the Qatari government allowed him to meet with Hamas leaders in exile there. Qatar also pursues policies that are opposed to Iran's interests, for example by providing arms and funds to factions in Syria opposed to Syrian President Bashar Al Asad and\u2014until the 2017 rift with Saudi Arabia and the UAE\u2014by joining Saudi-led military intervention in Yemen. Qatar has sometimes used its engagement with Iran to obtain the release of prisoners held by Iran or its allies, and strongly refutes Saudi-led assertions that it is aligned with or politically close to Iran. Qatar withdrew its Ambassador from Iran in connection with the Nimr execution discussed above, but restored relations in August 2017 to reciprocate Iran's support for Qatar in the intra-GCC rift. Iran has increased its food exports to Qatar as an alternative to supplies from Saudi Arabia.", "Qatar does not have territorial disputes with Iran, but Qatari officials reportedly remain wary that Iran could try to encroach on the large natural gas field Qatar shares with Iran (called North Field by Qatar and South Pars by Iran). In April 2004, the Iran's then-deputy oil minister said that Qatar is probably producing more gas than \"her right share\" from the field. "], "subsections": []}, {"section_title": "Bahrain59", "paragraphs": ["Bahrain, ruled by the Sunni Al Khalifa family and still unsettled by 2011 unrest among its majority Shia population, consistently alleges that Iran is agitating Bahrain's Shia community, some of which is of Persian origin, to try to overturn Bahrain's power structure. Bahrain has consistently accused Iran of supporting violent Shia factions that reportedly operate separately from an opposition dominated by peaceful political societies. On several occasions, Bahrain has withdrawn its Ambassador from Iran following Iranian criticism of Bahrain's treatment of its Shia population or alleged Iranian antigovernment plots. Bahrain broke ties with Iran in concert with Saudi Arabia in January 2016. In 1981 and again in 1996, Bahrain publicly claimed to have thwarted Iran-backed efforts by Bahraini Shia dissidents to violently overthrow the ruling family. As did Saudi Arabia and the UAE, Bahrain supported the Trump Administration's withdrawal from JCPOA.", "Bahraini and U.S. officials assert that Iran provides weapons, explosives, and weapons-making equipment efforts to violent underground factions in Bahrain. In 2016, Bahraini authorities uncovered a large warehouse containing equipment, apparently supplied by Iran that is tailored for constructing \"explosively forced projectiles\" (EFPs) such as those Iran-backed Shia militias used against U.S. armor in Iraq during 2004-2011. No EFPs have actually been used in Bahrain, to date. On January 1, 2017, 10 detainees who had been convicted of militant activities such as those discussed above broke out of Bahrain's Jaw prison with the help of attackers outside the jail. In March 2017, security forces arrested a group of persons that authorities claimed were plotting to assassinate senior government officials, asserting that the cell received military training by IRGC-QF. Six Bahraini Shias were sentenced to death for this alleged plot on December 25, 2017. In October 2017, 29 Bahrainis were convicted for having links to Iran and conducting espionage in Bahrain. ", "On March 17, 2017, the State Department named two members of a Bahrain militant group, the Al Ashtar Brigades, as Specially Designated Global Terrorists (SDGTs), asserting the group is funded and supported by Iran. In July 2018, the State Department named the Al Ashtar Brigades as a Foreign Terrorist Organization (FTO), based on State Department assertions that", "Iran has provided weapons, funding, and training to Bahraini militant Shia groups that have conducted attacks on the Bahraini security forces. On January 6, 2016, Bahraini security officials dismantled a terrorist cell, linked to IRGC-QF, planning to carry out a series of bombings throughout the country.", "Tensions also have flared occasionally over Iranian attempts to question the legitimacy of a 1970 U.N.-run referendum in which Bahrainis chose independence rather than affiliation with Iran. In March 2016, a former IRGC senior commander and adviser to Supreme Leader Khamene'i reignited the issue by saying that Bahrain is an Iranian province and should be annexed. "], "subsections": []}, {"section_title": "Kuwait64", "paragraphs": ["Kuwait is differentiated from some of the other GCC states by its integration of Shias into the political process and the economy. About 25% of Kuwaitis are Shia Muslims, but Shias have not been restive there and Iran was not able to mobilize Kuwaiti Shias to end Kuwait's support for the Iraqi war effort in the Iran-Iraq War (1980-1988). Kuwait cooperates with U.S.-led efforts to contain Iranian power and is participating in Saudi-led military action against Iran-backed Houthi rebels in Yemen. However, it also has tried to mediate a settlement of the Yemen conflict and broker GCC-Iran rapprochement, and Kuwait's government did not fund or arm any Syrian opposition groups. Kuwait exchanges leadership-level visits with Iran; Kuwait's Amir Sabah al-Ahmad Al Sabah visited Iran in June 2014, Kuwait's Foreign Minister visited Iran in late January 2017 to advance Iran-GCC reconciliation, and Rouhani visited Kuwait (and Oman) in February 2017 as part of that abortive effort. However, on numerous occasions, Kuwaiti courts have convicted Kuwaitis with spying for the IRGC-QF or Iranian intelligence. Kuwait recalled its Ambassador from Iran in connection with the Saudi-Iran dispute over the execution of Al Nimr. "], "subsections": []}, {"section_title": "Oman65", "paragraphs": ["Omani officials assert that engagement with Iran is a more effective means to moderate Iran's foreign policy than to threaten or pressure it, and Oman's leadership has the most consistent engagement with Iran's leadership of any of the Gulf states. Omani leaders express gratitude for the Shah's sending of troops to help the Sultan suppress rebellion in the Dhofar region in the 1970s, even though Iran's regime changed since then. President Rouhani visited Oman in 2014 and in 2017. Sultan Qaboos visited Iran in August 2013, reportedly to explore with the newly elected Rouhani U.S.-Iran nuclear negotiations that ultimately led to the JCPOA. After the JCPOA was finalized, Iran and Oman accelerated their joint development of the Omani port of Al Duqm, which is emerging as a significant trading and transportation outlet. Since late 2016, Oman also has been a repository of Iranian heavy water to help Iran comply with the JCPOA, but the May 2, 2019 U.S. ending of waivers for storing Iranian heavy water could curtail Oman's future storage of that Iranian product. ", "Oman was the only GCC country to not downgrade its relations with Iran in connection with the January 2016 Nimr dispute. And, Oman drew closer to Iran in 2017 because of Iran's support for Qatar in the intra-GCC rift, which Omani leaders assert was the result of misguided action by Saudi Arabia and the UAE. Oman has not supported any factions fighting the Asad regime in Syria and has not joined the Saudi-led Arab intervention in Yemen, enabling Oman to undertake the role of mediator in both of those conflicts. Omani officials say that, in the past two years, they have succeeded in blocking Iran from smuggling weaponry to the Houthis via Oman. "], "subsections": []}]}, {"section_title": "U.S.-GCC Cooperation against Iranian Threats to Gulf Security", "paragraphs": ["Successive U.S. Administrations have considered the Gulf countries as lynchpins in U.S. strategy to contain Iranian power, and to preserve the free flow of oil and freedom of navigation in the Persian Gulf, which is only about 20 miles wide at its narrowest point. Each day, about 17 million barrels of oil flow through the Strait, which is 35% of all seaborne traded oil and 20% of all worldwide traded oil. ", "U.S. and GCC officials view Iran as posing a possible threat to the Strait and the Gulf, potentially using the naval, missile, mine, and other assets and tactics discussed above. In mid-2015, Iran stopped several commercial ships transiting the strait as part of an effort to resolve commercial disputes with the shipping companies involved. In July 2018, Iran's President Rouhani indirectly threatened the free flow of oil in the Gulf should the Trump Administration succeed in compelling Iran's oil customers to cease buying Iranian oil entirely. In late August 2018 and again in late April 2019, after the United States ended sanctions exceptions for the purchase of Iranian oil, IRGC Navy commander Alireza Tangsiri reiterated those threats. ", "Iran has sometimes challenged U.S. forces in the Gulf, perhaps in part to demonstrate that it is not intimidated by U.S. power. During 2016-2017, according to DNI Coats, about 10% of U.S. Navy interactions with the IRGC-Navy were \"unsafe, abnormal, or unprofessional.\" IRGC-Navy elements conducted numerous \"high speed intercepts\" of U.S. naval vessels in the Gulf and, in some cases, fired rockets near U.S. warships. During some of these incidents, U.S. vessels have fired warning shots at approaching Iranian naval craft. U.S. Navy and other military commanders say that, since August 2017, Iran has largely, although not completely, ceased the naval challenges. The shift in Iranian behavior might have been prompted by concerns that that the Trump Administration might respond militarily. ", "President Trump has stated an intent to counter Iranian actions in the Gulf or more broadly, including potentially with military action. On July 22, 2018, President Trump issued the tweet below: ", "To Iranian President Rouhani: NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE. WE ARE NO LONGER A COUNTRY THAT WILL STAND FOR YOUR DEMENTED WORDS OF VIOLENCE & DEATH. BE CAUTIOUS!", "As noted, in early May 2019, the United States accelerated a carrier deployment to the Gulf and sent additional bombers in response to reported Iranian planning for attacks on U.S. forces in and around the Gulf and possible further afield in the region. Some reports indicated that the U.S. deployments were triggered primarily by observed Iranian shipments of short-range ballistic missiles in regional waterways, presumably bound for the Houthis. In a statement, National Security Adviser John Bolton warned that the deployment was intended to send a \"clear and unmistakable message that any attack on U.S. interests or those of our allies\" would be met with \"unrelenting force.\""], "subsections": [{"section_title": "U.S.-GCC Cooperation Structures", "paragraphs": ["The Obama Administration sought to add structure to the U.S.-GCC strategic partnership by instituting a \"U.S.-GCC Strategic Dialogue\" in March 2012. Earlier, in February 2010, then-Secretary Clinton also raised the issue of a possible U.S. extension of a \"security umbrella\" or guarantee to regional states against Iran. However, no such formal U.S. security pledge was issued. The JCPOA prompted GCC concerns that the United States might reduce its commitment to Gulf security and President Obama and the GCC leaders held two summit meetings\u2014in May 2015 and April 2016\u2014to reassure the GCC of U.S. support against Iran. The summit meetings produced announcements of a U.S.-GCC strategic partnership and specific commitments to (1) facilitate U.S. arms transfers to the GCC states; (2) increase U.S.-GCC cooperation on maritime security, cybersecurity, and counterterrorism; (3) organize additional large-scale joint military exercises and U.S. training; and (4) implement a Gulf-wide coordinated ballistic missile defense capability, which the United States has sought to promote in recent years. Perhaps indicating reassurance, the GCC states expressed support for the JCPOA. ", "Despite that public support, the GCC states have strongly backed the Trump Administration's characterization of Iran as a major regional threat, and the related relaxation of restrictions on arms sales to the GCC states and downplaying of concerns about GCC human rights practices. Saudi Arabia, the UAE, and Bahrain all publicly supported the Trump Administration exit from the JCPOA, whereas\u2014reflecting divisions within the GCC\u2014Qatar, Kuwait, and Oman expressed \"understanding\" for the exit. U.S. officials have stated that the intra-GCC rift centered on Qatar is harming the U.S.-led effort to forge a united strategy against Iran, and, since April 2018, President Trump reportedly has been insisting that Gulf leaders resolve the rift, although without evident success to date. ", "Middle East Strategic Alliance (MESA). The Trump Administration reportedly is attempting to build a new coalition to counter Iran, composed of the GCC states plus Egypt, Jordan, and possibly also Morocco. The Administration reportedly sought to unveil this \"Middle East Strategic Alliance\" (MESA) in advance of a planned U.S.-GCC summit but, because of the ongoing intra-GCC dispute and other factors, the meeting has been repeatedly postponed and no date has been announced. The Saudi killing of U.S.-based Saudi journalist Jamal Kashoggi, which has brought widespread international and congressional criticism of the Kingdom and Crown Prince Mohammad bin Salman Al Saud, further clouds prospects for another U.S.-GCC summit. The establishment of a MESA was a significant element of Secretary of State Pompeo's trip to the GCC states in January 2019, but the concept suffered a setback in April 2019 when Egypt announced it would not participate in the MESA grouping. "], "subsections": []}, {"section_title": "U.S. Forces in the Gulf and Defense Agreements.", "paragraphs": ["The GCC states are pivotal to U.S. efforts to counter Iran militarily. There are about 35,000 U.S. forces stationed at GCC military facilities, in accordance with formal defense cooperation agreements (DCAs) with Kuwait, Bahrain, Qatar, and the UAE; a facilities access agreement with Oman; and memoranda of understanding with Saudi Arabia. The DCAs and other defense agreements reportedly provide for the United States to pre-position substantial military equipment, to train the GCC countries' forces; to sell arms to those states; and, in some cases, for consultations in the event of a major threat to the state in question. Some U.S. forces in the Gulf are aboard a U.S. aircraft carrier task force that is in the Gulf region nearly constantly, although a U.S. carrier was absent from the Gulf for much of 2018 before returning there in December 2018. The Defense Department also uses authority in Section 2282 of U.S.C. Title 10 to program Counterterrorism Partnerships Funds (CTPF) for U.S. special operations forces training to enhance GCC counterterrorism capabilities, including to prevent infiltration by the IRGC-QF. ", "Arms Sales . U.S. arms sales to the GCC countries have improved GCC air and naval capabilities and their interoperability with U.S. forces. In past years, the United States has tended to approve virtually all arms purchase requests by the GCC states, including such equipment as combat aircraft, precision-guided munitions, combat ships, radar systems, and communications gear. However, the Bahrain government crackdown on the 2011 uprising there, the intra-GCC rift, and the Saudi/UAE-led war in Yemen have slowed or halted some U.S. arms sales to the GCC states. ", "The following sections discuss specific U.S.-Gulf defense relationships.", "Saudi Arabia . The United States and Saudi Arabia have signed successive memoranda of understanding (MoUs) under which a few hundred U.S. military personnel to train the military, National Guard (SANG), and Ministry of Interior forces in Saudi Arabia. The Saudi force has about 225,000 active duty personnel, with about 600 tanks, of which 200 are U.S.-made M1A2 \"Abrams\" tanks. The Saudi Air Force flies the F-15. In late 2018, Saudi Arabia announced it would buy the sophisticated missile defense system Theater High Altitude Air Defense system (THAAD) at an estimated cost of about $14 billion. The sale was approved by the State Department in October 2017. Kuwait . The United States has had a DCA with Kuwait since 1991, and over 13,000 mostly U.S. Army personnel are stationed there, including ground combat troops. Kuwait has hosted the U.S.-led headquarters for Operation Inherent Resolve (OIR), the military component of the campaign against the Islamic State. U.S. forces operate from such facilities as Camp Arifjan, south of Kuwait City, where the United States pre-positions ground armor including Mine Resistant Ambush Protected (MRAP) vehicles, as well as from several Kuwaiti air bases. U.S. forces train at Camp Buehring, about 50 miles west of the capital. Kuwait has a small force (about 15,000 active military personnel) that relies on U.S. arms, including Abrams tanks and F/A-18 combat aircraft. The Trump Administration stated during the September 2017 visit to Washington, DC, of Kuwait's Amir that it would proceed with selling Kuwait 32 additional F/A-18s. Qatar . The United States has had a DCA with Qatar since 1992, which was revised in December 2013. Over 11,000 U.S. military personnel, mostly Air Force, are in Qatar, stationed at the forward headquarters of U.S. Central Command (CENTCOM), which has responsibility for the Middle East and Central Asia; a Combined Air Operations Center (CAOC) that oversees U.S. combat aircraft missions in the region; the large Al Udeid Air Base; and the As Saliyah army pre-positioning site where U.S. armor is pre-positioned. Qatar's armed force is small with about 12,000 active military personnel. Qatar has historically relied on French military equipment, including Mirage combat aircraft, but in late 2016, the Obama Administration approved selling up to 72 F-15s to Qatar. The F-15 deal, with an estimated value of $21 billion, was formally signed between Qatar and the Trump Administration on June 14, 2017. Qatar and the United States signed an agreement in early 2019 under which Qatar commits to expand Al Udeid air base and build fixed housing and other facilities there to be able to accommodate up to 13,000 U.S. personnel. UAE. The United States has had a DCA with UAE nearly continuously since 1994. About 5,000 U.S. forces, mostly Air Force and Navy, are stationed in UAE, operating surveillance and refueling aircraft from Al Dhafra Air Base, and servicing U.S. Navy and contract ships at the large commercial port of Jebel Ali. The UAE armed forces include about 63,000 active duty personnel, using primarily French-made tanks purchased in the 1990s. Its air force is equipped with U.S.-made F-16s the country has bought in recent years. The UAE has stated that it wants to buy the F-35 Joint Strike Fighter, but U.S. officials have indicated that the potential sale would be evaluated in accordance with U.S. policy to maintain Israel's Qualitative Military Edge (QME). The Trump Administration has reportedly agreed to brief the UAE on the aircraft\u2014possibly signaling a willingness to sell it to the UAE at some point. The UAE has taken delivery of the THAAD anti-missile system. Bahrain . The United States has had a DCA with Bahrain since 1991. Over 6,000 U.S. personnel, mostly Navy, operate out of the large Naval Support Activity facility that houses the U.S. command structure for U.S. naval operations in the Gulf. U.S. Air Force personnel also access Shaykh Isa Air Base. Bahrain has only about 6,000 active military personnel, and another 11,000 internal security forces under the Ministry of Interior. The United States has given Bahrain older model U.S. M60A3 tanks and a frigate ship as grant \"excess defense articles,\" and the country has bought U.S.-made F-16s with national funds and U.S. Foreign Military Financing (FMF) credit. The Obama Administration told Congress in 2016 that it would not finalize a sale of additional F-16s unless the government demonstrates progress on human rights issues, but in March 2017, the Trump Administration dropped that condition. The Trump Administration has maintained a general ban on arms sales to Bahrain's internal security forces. Oman . The United States has had a \"facilities access agreement\" with Oman since April 1980, under which a few hundred U.S. forces (mostly Air Force) are deployed at and have access to Omani air bases such as those at Seeb, Masirah Island, Thumrait, and Musnanah. Oman has a 25,000-person force that has historically relied on British-made military equipment. The United States has provided some M60A3 tanks as excess defense articles, and Oman has bought F-16s using national funds, partly offset by U.S. FMF. Assistance Issues . The GCC states are considered wealthy states and most receive little or virtually no U.S. assistance. The more wealthy GCC states (Saudi Arabia, Kuwait, Qatar, and UAE) sometimes receive nominal amounts of U.S. funding for the purpose or enabling them to obtain discounted prices to enroll personnel in military education courses in the United States. Bahrain and Oman receive a few million dollars per year in Foreign Military Financing (FMF) and International Military Education and Training Funds (IMET). Small amounts of State Department funds are provided to all the Gulf states for counterterrorism/border security programs (nonproliferation, antiterrorism, de-mining and related, NADR, funds)"], "subsections": []}]}]}, {"section_title": "Iranian Policy on Iraq, Syria, and the Islamic State82", "paragraphs": ["Iran's policy has been to support the Shia-led governments in Iraq and Syria against armed insurgencies or other domestic strife that might threaten those governments. That policy faced a significant challenge and uprising in Syria that began in 2011 and the Islamic State organization's capture of significant territory in Iraq in 2014. These challenges have been beaten back substantially not only by Iranian intervention but also by U.S. intervention in Iraq and Russian intervention in Syria, and Iran is perceived to be strongly positioned in both Syria and Iraq. "], "subsections": [{"section_title": "Iraq", "paragraphs": ["The U.S. military ousting of Saddam Hussein in 2003 removed Iran's main regional adversary and produced governments led by Shia Islamists with long-standing ties to Iran. Iran is able to wield substantial influence on Iraq not only through these relationships but because the IRGC-QF arms, trains, and advises several Shia militias. Some of them were formed during Saddam Hussein's rule and others formed to fight U.S. forces in Iraq during 2003-2011. The June 2014 offensive led by the Islamic State organization at one point brought Islamic State forces to within 50 miles of the Iranian border, triggering Iran to supply the Baghdad government as well as the peshmerga forces of the autonomous Kurdistan Regional Government (KRG) with IRGC-QF advisers, intelligence drone surveillance, weapons shipments, and other direct military assistance. In part to counter the Islamic State challenge, Iranian leaders acquiesced to U.S. insistence that Iran's longtime ally, Prime Minister Nuri al-Maliki be replaced by a different Shia Islamist, Haider al-Abadi, who pledged to be more inclusive of Sunni leaders. ", "Iran supplies Shia militias in Iraq with rocket-propelled munitions, such as Improvised Rocket Assisted Munitions (IRAMs), contributed to the deaths of about 500 U.S. military personnel during those years. Iran has typically appointed members of or associates of the IRGC-QF as its Ambassador to Iraq. Current estimates of the total Shia militiamen in Iraq number about 110,000-120,000, of which about two-thirds are members of Iran-backed militias. Collectively, all of the Shia militias are known as Popular Mobilization Forces or Units (PMFs or PMUs). ", "Iran also exercises a degree of soft power in Iraq. It is the main supplier of natural gas that Iraq needs to operate its electricity plants. Then-Secretary of Defense Mattis warned in early 2018 that Iran was funding some Iraqi candidates as part of an effort to increase its influence over the Iraqi government elected in the May 2018 vote. In October 2018, coalition negotiations named relatively pro-American figures as president and prime minister, but Iran is said to be pushing for the appointment of a pro-Iranian figure to be interior minister, a post crucial to Iran's ability to continue to work with its proxies inside Iraq. To demonstrate Iran's interest in the Iraq relationship, President Rouhani conducted an official visit to Iraq in March 2019, during which agreements were signed for a new rail link and other new economic linkages. Rouhani was received in Najaf by the revered Iraqi Shia leader Ayatollah Ali al-Sistani\u2014the only Iranian president the reclusive figure has received. Sistani reportedly urged Iran to respect Iraq's sovereignty\u2014a veiled criticism of the IRGC-QF's emphasis on supporting Iraqi militias. At the same time, Iran reportedly has been seeking to increase its sway over the Shia religious leadership in Iraq.", "The commanders of the most powerful Iran-backed militias, including Asa'ib Ahl Al Haq (AAH) leader Qais Khazali, the Badr Organization's Hadi al-Amiri (see above), and Kata'ib Hezbollah's Abu Mahdi al-Muhandis, have come to wield significant political influence. They have close ties to Iran dating from their underground struggle against Saddam Hussein in the 1980s and 1990s, and the commanders have publicly pressured the government to reduce reliance on the United States and ally more closely with Iran. Some of these commanders advocate a U.S. withdrawal from Iraq now that the Islamic State has been mostly defeated in Iraq. These figures have largely resisted incorporating their forces into the formal security structure.", "In late August 2018, there were unconfirmed reports that Iran had transferred short-range ballistic missiles to some of its Shia militia allies in Iraq, possibly for the purpose or projecting force further into the region. Secretary of State Michael Pompeo reacted to the reports by stating in a tweet that he is ", "Deeply concerned about reports of #Iran transferring ballistic missiles into Iraq. If true, this would be a gross violation of Iraqi sovereignty and of UNSCR 2231. Baghdad should determine what happens in Iraq, not Tehran.", "Despite good relations with the Iraqi Kurdish political leadership, Iran, as does the United States, supports the territorial integrity of Iraq and opposed the September 25, 2017, KRG referendum on independence. At the same time, Iran is wary of the ability of some anti-Iran government Kurdish movements to operate in northern Iraq. In September 2018, Iran fired seven Fateh-110 short-range ballistic missiles at a base in northern Iraq operated by the Kurdistan Democratic Party of Iran\u2014an Iranian Kurdish opposition group. The KDP-I's Secretary General and other figures of the group were reportedly among those wounded. ", "However, Iran's influence in Iraq was cast into some doubt with the strong May 12, 2018, election showing of Iraqi nationalist Moqtada al-Sadr's faction. "], "subsections": [{"section_title": "Iranian Advice and Funding to Iraqi Militias", "paragraphs": ["The number of IRGC-QF personnel in Iraq advising Iran-backed militias or the Iraqi government is not known from published sources. It is likely that there are far fewer such Iranian personnel in Iraq than there were at the height of the Islamic State challenge to Iraq in 2014. In 2014, a senior Iranian cleric estimated the dollar value of Iran's assistance to Iraq at about $1 billion\u2014a large increase over an estimated baseline level of about $150 million per year. "], "subsections": []}, {"section_title": "Iran-Backed Militias and Their Offshoots", "paragraphs": ["Some Iran-backed militias are offshoots of the \"Mahdi Army\" militia that Shia cleric Moqtada Al Sadr formed in 2004 to combat the U.S. military presence in Iraq. As the U.S. intervention in Iraq ended in 2011, the Mahdi Army evolved into a social services network but, in response to the Islamic State offensive in 2014, it reorganized as the \"Salaam (Peace) Brigade,\" with about 15,000 fighters. ", "Kata'ib Hezbollah . One Mahdi Army offshoot, Kata'ib Hezbollah (KAH), was designated by the State Department as a Foreign Terrorist Organization (FTO) in June 2009. KAH has an estimated 20,000 fighters. In July 2009, the Department of the Treasury designated it and its commander, Abu Mahdi al-Muhandis, as threats to Iraqi stability under Executive Order 13438. Muhandis was a Da'wa party operative during Saddam's rule, and was convicted in absentia by Kuwaiti courts for the Da'wa assassination attempt on the ruler of Kuwait in May 1985 and the 1983 Da'wa bombings of the U.S. and French embassies there. After these attacks, he served as leader of the Badr Corps of the IRGC-backed Supreme Council for the Islamic Revolution in Iraq (SCIRI), but he broke with the group in 2003 because of its support for the U.S. invasion of Iraq. He joined the Mahdi Army during 2003-2006 but then broke to form KAH. Asa'ib Ahl Al Haq . Asa'ib Ahl Al Haq (AAH) leader Qais al-Khazali headed the Mahdi Army \"Special Groups\" breakaway faction during 2006-2007, until his capture and incarceration by U.S. forces for his alleged role in a 2005 raid that killed five American soldiers. During his imprisonment, his followers formed AAH. After his release in 2010, Khazali took refuge in Iran, returning in 2011 to take resume command of AAH while also converting it into a political movement. AAH resumed military activities after the 2014 Islamic State offensive, and has about 15,000 fighters. Khazali is now an elected member of Iraq's national assembly. Badr Organization . The Badr Organization, the armed wing of the Islamic Supreme Council of Iraq (ISCI, formerly SCIRI), the mainstream Shia party headed now by Ammar al-Hakim. Did not oppose the 2003-2011 U.S. intervention in Iraq. The Badr forces (then known as the Badr Brigades or Badr Corps) received training and support from the IRGC-QF in its failed efforts to overthrow Saddam during the 1980s and 1990s. The Badr Organization largely disarmed after Saddam's fall, integrated into the political process, and supported the United States as a facilitator of Iraq's transition to Shia rule. Its leader is Hadi al-Amiri, an elected member of the National Assembly who advocates for government reliance on the Shia militias. Amiri's faction, called \"Conquest,\" won the second-highest number of seats in the May 12, 2018, Iraqi election, positioning Amiri to wield significant influence. Badr has an estimated 20,000 militia fighters. Harakat Hezbollah al-Nujaba. Some Iran-backed Shia militias formed after the U.S. withdrawal. Harakat Hezbollah al-Nujaba or \"Nujaba Movement,\" led by Shaykh Akram al-Ka'bi, formed in 2013 to assist the Asad regime in Syria. The group increased its presence on the Aleppo front in 2016 to help the Asad regime recapture the whole city. Ka'bi was designated as a threat to Iraq's stability under E.O. 13438 in 2008, when he was then a leader of a Mahdi Army offshoot termed the \"Special Groups.\" In March 2019, the Trump Administration designated the Nujaba militia as a terrorist entity under E.O. 13224. Another Shia militia, the Mukhtar Army, claimed responsibility for a late October 2015 attack on Iranian dissidents inhabiting the \"Camp Liberty\" facility, discussed below. These militias might total 10,000 personnel. "], "subsections": []}, {"section_title": "U.S. Policy to Curb Iranian Influence in Iraq", "paragraphs": ["U.S. policy to limit Iranian influence in Iraq has focused on engaging with Iraqi leaders who are well-disposed to the United States and relatively nonsectarian. The United States supported Abadi's reelection bid in Iraq as contributing to efforts to counter Iran's influence there, and the current president and prime minister, Barham Salih and Adel Abdul Mahdi, respectively, are well known to U.S. officials and favor continued U.S. involvement in Iraq. In 2014, U.S. officials initially refused to support Iraqi Shia militias in the anti-Islamic State effort, but U.S. policy after 2015 supported those PMFs identified by U.S. officials as not backed by Iran. October 2017, then-Secretary of State Rex Tillerson called on Iran-backed militias to disarm and for their Iranian advisors to \"go home.\" The Trump Administration reportedly has worked with the Iraqi government, with mixed success to date, to integrate the militias into the official security forces or demobilize and merge into the political process. ", "Even though the approximately 5,000 U.S. forces in Iraq have directed their operations against Islamic State remnants and on improving the capabilities of Iraqi forces, and have not conducted any combat against IRGC-QF personnel or Iran-backed militias in Iraq, Iran-backed Shia militias pose a potential threat to U.S. personnel in Iraq. On September 11, 2018, following rocket attacks near U.S. diplomatic facilities in Iraq, the Administration blamed Iran for not \"act[ing] to stop these attacks,\" and threatened potential U.S. military action against Iran if Iran-backed militias in Iraq attacked U.S. interests. ", "Some reports indicate that the additional U.S. force deployments to the Persian Gulf were prompted in part by U.S. indications of Iranian planning for its allies in Iraq to attack U.S. forces. The potential for such Iranian attacks was assessed by experts as increasing following the April 15, 2019 U.S. designation of the IRGC as an FTO. U.S. indications of possible attacks on U.S. forces prompted Secretary of State Pompeo to suddenly rearrange his travel in Europe to make an unscheduled visit to Iraq on May 7, 2019 to \"assure [Iraq's leaders] that we stood ready to continue to ensure that Iraq was a sovereign, independent nation, and that the United States would continue to help build out partners in the region.\" ", "With respect to sanctions, the United States has pressed Iraq to comply with reimposed U.S. sanctions on Iran by ceasing oil swaps with Iran and ceasing dollar transactions with Iran's Central Bank. The United States has provided successive 90-day waivers of the Iran Freedom and Counterproliferation Act ( P.L. 112-239 ) to permit Iraq to continue buying Iranian natural gas that feeds its power plants until it can line up alternative gas sources. Executive Order 12438 blocks property and prevents U.S. visas for persons determined to threaten stabilization efforts in Iraq. The FY2019 National Defense Authorization Act (NDAA, P.L. 115-232 ), bans any U.S. assistance from being used to assist any group affiliated with the IRGC-QF. In the 116 th Congress, legislation such as H.R. 361 and H.R. 571 requires sanctions on Iran-backed militias or other entities determined to be destabilizing Iraq. On the other hand, these organizations are believed to have virtually no U.S.-based assets or financial interests that would be susceptible to U.S. sanctions. "], "subsections": []}]}, {"section_title": "Syria100", "paragraphs": ["Iranian leaders characterize Syrian President Bashar al Asad as a key ally, despite Asad's secular ideology, and Iran has undertaken major efforts to keep him in power. The reasons for Iran's consistent and extensive support for Asad include the following: (1) Syria's cooperation is key to Iran's arming and protection of Hezbollah; (2) the Asad regime has been Iran's closest Arab ally in a region where most governments oppose Iran; (3) a Sunni opposition government hostile to Iran might come to power if Asad fell; and (4) the Asad regime can help block Sunni extremist groups from attacking Hezbollah in Lebanon from across the Syria border. Most observers conclude that Iran's strategic interest in the Asad regime's survival is sufficiently compelling that Iran will resist withdrawing Iranian forces from Syria as long as any threat to Asad's grip on power persists. In 2018, Iran and Syria signed updated military cooperation agreements, perhaps suggesting Iranian intent to remain militarily in Syria indefinitely. ", "On the Syria battlefield, Iran-backed militias advanced east to the point where they can potentially help Iran form a secure supply corridor from Iran to Lebanon. On several occasions, Iran-backed forces approached U.S. training locations for Syrian forces in southeast Syria combatting the Islamic State and were subjected to U.S.-led fire to halt their advances. On October 1, 2018, Iran fired six ballistic missiles from western Iran on suspected Islamic State positions near Hanjin, Syria. Iran claimed the strikes were retaliation for the September 2018 attack on Iran's military parade in Ahwaz (see above), but the strikes, which were near areas in which U.S. and U.S.-backed forces in Syria operate, could be interpreted as signaling Iran's ability to project power in Syria from Iran's homeland itself. Iran-backed forces are likely to play a role in any Syrian government offensive to recapture Idlib province, the last major bastion of opposition forces.", "Iran's extensive involvement in Syria has alarmed Israeli leaders who now apparently perceive Iran as using Syrian territory to exert greater leverage against Israel\u2014adding to the threat posed by Hezbollah on Israel's northern border. Israel accuses Iran of constructing bases in Syria, including rocket and missile factories that can safely supply Hezbollah. For additional information on the threat to Israel posed by Iran's presence in Syria, see: CRS In Focus IF10858, Iran and Israel: Tension Over Syria , by Carla E. Humud, Kenneth Katzman, and Jim Zanotti ", "Iran has not hidden its involvement or its losses in Syria. Deaths of high-ranking IRGC commanders in battles in Syria have been widely publicized in state-run media. Their deaths have been portrayed by the regime as heroic sacrifices on behalf of the Iranian revolution and Iran's national interests. At least 700 Iranian military personnel have died in Syria, including several high-level IRGC-QF commanders. ", "Prior to the Russian intervention, Iran participated in multilateral diplomacy on a political solution in Syria and put forward proposals for a peaceful transition in Syria. In 2015, Iran attended meetings of and did not publicly dissent from joint statements issued by an international contact group on Syria, which included the United States. Iran was invited to participate in this \"Vienna process\" after the United States dropped its objections on the grounds that, in the wake of the July 2015 Iran nuclear agreement, Iran could potentially contribute to a Syria solution. However, Russia's intervention in Syria created the potential for Iran to achieve its maximum goals in Syria, and in 2016-2018, Iran has apparently continued to pursue those goals in negotiations brokered by Russia and Turkey (\"Astana Process\"). However, an August 2018 Administration report on Iran mandated by the Countering America's Adversaries through Sanctions Act said that Iran \"is not playing a constructive role in Syria ... despite Iran's status as a 'guarantor' of the Astana ceasefire zones ostensibly in place.\" "], "subsections": [{"section_title": "Iranian Military and Financial Support to Asad", "paragraphs": ["Iranian support to Asad against the rebellion is extensive, including the provision of substantial funds, weapons, and IRGC-QF advisors to the Syrian regime. However, exact numbers of Iranian and Iran-backed forces are available in ranges, because of the wide disparity in open reporting: ", "Iranian Military Personnel. After 2012, Iran expanded its intervention to the point where regional security sources estimated that, by late 2015, it was deploying nearly 2,000 military personnel in Syria, including IRGC-QF, IRGC ground force, and even some regular army special forces personnel. The deployment of Iranian regular army forces in Syria was significant because Iran's regular military has historically not deployed beyond Iran's borders since the 1980-1988 Iran-Iraq War. Hezbollah Fighters . Sources tend to center on a figure of about 7,000 Lebanese Hezbollah fighters deployed to Syria to assist Syrian government forces. Militia Recruits . The IRGC-QF recruited a reported 24,000-80,000 Shia fighters to operating under Iranian command in Syria at the height of the conflict during 2013-2017. These include not only Lebanese Hezbollah fighters but also Iraqi militias such as Harakat Hezbollah al-Nujaba, and brigades composed of Afghan and Pakistani Shias. These numbers might have declined somewhat as the Syrian government regained much of its territory; on November 29, 2018, the State Department's policy official on Iran, Brian Hook, stated that Iran \"manages as many as 10,000 Shia fighters in Syria, some of whom are children as young as 12 years old.\" Financial Support. Estimates of Iran's spending to support Asad's effort against the rebellion vary widely. In June 2015, the office of the U.N. Special Envoy to Syria Staffan de Mistura estimated Iran's aid to Syria, including military and economic aid, to total about $6 billion per year. Iranian aid to Syria is difficult to gauge with precision, in part because it includes a combination of economic aid (for which some figures, such as lines of credit, are publicly available in official statements), subsidized oil and commodity transfers, and military aid (for which numbers are difficult to obtain). The State Department's \"Outlaw Regime\" report (graphic, page 11), referenced above, indicates that Iran has extended \"at least $4.6 billion in credit to the Assad regime\" since 2012. "], "subsections": []}, {"section_title": "U.S. Policy to Limit Iranian Influence in Syria", "paragraphs": ["U.S. officials have stated that reducing Iran's presence in Syria is critical to protecting Israel and to the larger U.S. strategy of rolling back Iran's regional influence. Then-Secretary of State Rex Tillerson devoted much of a January 17, 2018, speech on U.S. policy toward Syria to explaining that the 2,000 U.S. troops in Syria were there in part to diminish Iranian influence in Syria and denying Iran's \"dreams of a northern arch\" (from Iran to the Mediterranean). He explained that a U.S.-Russia de-escalation agreement for southwest Syria \"addresses Israel's security by requiring Iranian-backed militias, most notably Hezbollah, to move away from Israel's border.\" National Security Adviser John Bolton reiterated that position in a speech on September 10, 2018. Secretary of State Pompeo said in his May 21, 2018, speech at the Heritage Foundation, that \"Iran must withdraw all forces under Iranian command throughout the entirety of Syria.\"", "In December 2018, President Trump announced that U.S. forces would withdraw, leading some experts to assert that the United States would lose at least some of its leverage against Iran in Syria. Others argued that the U.S. forces that are in Syria do not pressure Iran much because the U.S. forces have not been ordered to preemptively attack Iranian or pro-Iranian forces in Syria and the U.S. force is not large enough to influence political outcomes in Syria. The Administration has supported Israeli strikes on Iranian positions in Syria that are part of Israel's effort to deny Iran the opportunity to conduct an extensive military infrastructure there. Still, at least in part due to these arguments and others, President Trump ultimately decided to leave at least 400 U.S. forces in Syria indefinitely. ", "Executive Order 13572 blocks U.S.-based property and prevents U.S. visas for persons determined to be responsible for human rights abuses and repression of the Syrian people. Several IRGC-QF commanders have been designated for sanctions under the order. In the 115 th Congress, H.R. 4012 would direct the Director of National Intelligence to produce a National Intelligence Estimate on Iranian support to proxy forces in Syria (and Lebanon)."], "subsections": []}]}]}, {"section_title": "Hamas, Hezbollah, and other Anti-Israel Groups109", "paragraphs": ["A significant component of Iran's policy is to use its allies to pressure Israel strategically."], "subsections": [{"section_title": "Israel", "paragraphs": ["Iran's leaders assert that Israel is an illegitimate creation of the West and an oppressor of the Palestinians\u2014a position that differs from that of the Shah of Iran, whose government maintained relatively normal relations with Israel. Supreme Leader Khamene'i has repeatedly described Israel as a \"cancerous tumor\" that should be removed from the region. In a September 2015 speech, Khamene'i stated that Israel will likely not exist in 25 years\u2014the time frame for the last of the JCPOA nuclear restriction to expire. These statements underpin Israeli assertions that a nuclear-armed Iran would be an \"existential threat\" to Israel. ", "Iran's leaders routinely state that Israel presents a strategic threat to Iran. They add that the international community applies a \"double standard\" to Iran in that Israel has faced no sanctions even though it is the only Middle Eastern country to possess nuclear weapons and not to become a party to the Nuclear Non-Proliferation Treaty (NPT). Iran's leaders assert that Israel's purported nuclear arsenal is a main obstacle to establishing a weapons-of-mass-destruction (WMD) free zone in the Middle East. ", "Iran materially supports nonstate actors such as Hamas and Hezbollah that have undertaken armed action against Israel, possibly as an attempt to apply pressure to Israel to compel it to make concessions. Alternately, Iran might be attempting to disrupt prosperity, morale, and perceptions of security among Israel's population. For more than two decades, the annual State Department report on international terrorism has asserted that Iran provides funding, weapons (including advanced rockets), and training to a variety of U.S.-designated FTOs, including Hezbollah, Hamas, Palestinian Islamic Jihad\u2014Shiqaqi Faction (PIJ), the Al Aqsa Martyrs Brigades (a militant offshoot of the dominant Palestinian faction Fatah), and the Popular Front for the Liberation of Palestine-General Command (PFLP-GC). ", "Israel and the Obama Administration disagreed over the JCPOA\u2014Prime Minister Benjamin Netanyahu called it a \"historic mistake,\" and, in September 2017 and in March 2018, he reportedly urged President Trump to seek to renegotiate it or to terminate U.S. participation in it. Netanyahu's policy preference was adopted when the Trump Administration exited the JCPOA on May 8, 2018. Israel retains the option of a military strike on Iran's nuclear facilities should Iran responds to the U.S. exit by resuming the nuclear activities prohibited or limited by the JCPOA. "], "subsections": []}, {"section_title": "Hamas111", "paragraphs": ["U.S. officials assert that Iran gives Hamas funds, weapons, and training. Hamas seized control of the Gaza Strip in 2007 and has since administered that territory, but it ceded formal authority over Gaza in June 2014 to a consensus Palestinian Authority (PA) government and turned over further authority to the PA as part of an October 2017 reconciliation agreement. Hamas terrorist attacks within Israel have decreased since 2005, but Hamas has used Iran-supplied rockets and other weaponry during three conflicts with Israel since 2008, the latest of which was in 2014. Smaller scale trading of rocket attacks and air strikes have taken place in the summer of 2018. ", "The Iran-Hamas relationship was forged in the 1990s as part of an apparent attempt to disrupt the Israeli-Palestinian peace process through Hamas attacks on buses, restaurants, and other civilian targets inside Israel. However, in 2012, their differing positions on the ongoing Syria conflict caused a rift. Largely out of sectarian sympathy with Sunni rebels in Syria, Hamas opposed the efforts by Asad to defeat the rebellion militarily. Iran reduced its support to Hamas in its brief 2014 conflict with Israel as compared to previous Hamas-Israel conflicts in which Iran backed Hamas extensively. Since then, Iran has apparently sought to rebuild the relationship by providing missile technology that Hamas used to construct its own rockets and by helping it rebuild tunnels destroyed in the conflict with Israel. Hamas and Iran restored their relations in October 2017. "], "subsections": [{"section_title": "Iranian Financial Support to Hamas", "paragraphs": ["Iran's support to Hamas has been estimated to be as high as $300 million per year (funds and in-kind support, including weapons) during periods of substantial Iran-Hamas collaboration, but is widely assessed at a baseline amount in the tens of millions per year. The State Department's September 2018 \"Outlaw Regime\" report states that Iran \"provides up to $100 million annually in combined support to Palestinian terrorist groups,\" including Hamas, PIJ, and the PFLP-GC. "], "subsections": []}]}, {"section_title": "Hezbollah", "paragraphs": ["Lebanese Hezbollah, which Iranian leaders portray as successful \"exportation\" of Iran's Islamic revolution, is Iran's most significant nonstate ally. Hezbollah's actions to support its own as well as Iranian interests take many forms, including acts of terrorism and training and combat in countries in the region. Recent State Department reports on international terrorism state that \"the group generally follows the religious guidance of the Iranian Supreme Leader, which [is] [Grand Ayatollah] Ali Khamenei.\"", "Iran's close relationship to the group began when Lebanese Shia clerics of the pro-Iranian Lebanese Da'wa (Islamic Call) Party\u2014many of whom had studied under the leader of Iran's revolution, Grand Ayatollah Ruhollah Khomeini\u2014began to organize in 1982 into what later was unveiled in 1985 as Hezbollah. IRGC forces were sent to Lebanon to help develop a military wing, and these IRGC forces subsequently evolved into the IRGC-QF. ", "Iranian leaders have long worked with Hezbollah as an instrument to pressure Israel. Hezbollah's attacks on Israeli forces in Israel's self-declared \"security zone\" in southern Lebanon contributed to an Israeli withdrawal from that territory in May 2000. Hezbollah fired Iranian-supplied rockets on Israel's northern towns and cities during the July-August 2006 war with Israel, and in July 2006 Hezbollah damaged an Israeli warship with a C-802 anti-ship missile of the type that Iran reportedly bought in significant quantity from China in the 1990s. Hezbollah's leadership asserted that it was victorious in that war for holding out against Israel. ", "Illustrating the degree to which Iranian assistance has helped Hezbollah become a potential global terrorism threat, the State Department Coordinator for Counterterrorism said on November 13, 2018, that \"Hezbollah's ambitions and global reach rival those of Al Qaeda and ISIS.\" Iran has assisted Hezbollah in several of the terrorist attacks that are depicted in the table above. ", "Hezbollah has become a major force in Lebanon's politics, in part due to the arms and funding it gets from Iran. Hezbollah now plays a major role in decisionmaking and leadership selections in Lebanon. Hezbollah's militia rivals the Lebanese Armed Forces (LAF). However, there has been vocal criticism of Hezbollah in and outside Lebanon for its support for Asad, which has diluted Hezbollah's image as a steadfast opponent of Israel and has embroiled it in war against other Muslims. In November 2017, the resignation of Prime Minister Sa'd Hariri appeared intended to expose and undermine Hezbollah's influence in Lebanon\u2014a move he undertook immediately after close consultations with Riyadh. The resignation was rescinded by popular pressure in Lebanon and did not diminish Hezbollah's position. Hezbollah's allies increased their number of seats as a result of April 2018 parliamentary elections in Lebanon, although the number of seats held by Hezbollah itself stayed at the 13 it held previously. "], "subsections": [{"section_title": "Iranian Financial and Military Support", "paragraphs": ["Iranian support for Hezbollah fluctuates according to the scope and intensity of their joint activity. Iran provided high levels of aid to the group in the course of its combat intervention in Syria and after the 2006 Hezbollah war with Israel. Among specific assistance: ", "Training . The State Department report for 2016 asserted that Iran \"has trained thousands of [Hezbollah] fighters at camps in Iran.\" In the early 1980s, Iran was widely reported to have a few thousand IRGC personnel helping to establish what became Hezbollah. More recently, Hezbollah has become more self-sufficient and able to assist IRGC-QF operations elsewhere, such as in Syria, Iraq, and Yemen. In Syria, the IRGC-QF has facilitated Hezbollah's extensive involvement on behalf of the Asad regime, whose continuation in power is in the interests of both Iran and Hezbollah. Syria is the key conduit through which the IRGC-QF has historically armed and assisted Hezbollah. Financial Support . The State Department report for 2015 contained a specific figure, stating that Iran has provided Hezbollah with \"hundreds of millions of dollars.\" However, on June 5, 2018, Under Secretary of the Treasury for Terrorism and Financial Intelligence Sigal Mandelker cited a figure of $700 million in Iranian support to Hezbollah per year \u2014far higher than specific figures previously cited in any U.S. official reports. The higher figure could represent a U.S. reassessment of its previous estimates, or perhaps reflect a large increase due to Hezbollah's extensive combat on various battlefronts in Syria. The State Department's September 2018 \"Outlaw Regime\" report repeats the $700 million figure. Weapons Transfers . State Department reports and officials say that, according to the Israeli government, since that conflict, Hezbollah has stockpiled more than 130,000 rockets and missiles, presumably supplied mostly by Iran. Some are said to be capable of reaching Tel Aviv and other population centers in central Israel from south Lebanon. The State Department report adds that Israeli experts assert that Iran also has transferred to Hezbollah anti-ship and anti-aircraft capabilities. These specific rockets and missiles are discussed in the table above. Iran has historically transferred weaponry to Hezbollah via Syria, offloading the material at Damascus airport and then trucking it over the border. However, possibly due to expanded Israeli strike operations against Iran in Syria, some reports indicate that in 2018 Iran has also sought to transfer weaponry directly to Hezbollah via Beirut. "], "subsections": []}, {"section_title": "U.S. Policy to Reduce Iran's Support for Hezbollah", "paragraphs": ["The Trump Administration has followed its predecessors in trying to disrupt the Iran-Hezbollah relationship, although without appreciably more success than its predecessors had. The United States has not acted against Hezbollah militarily, but it has supported Israeli air strikes in Syria that are intended, at least in part, to disrupt Iranian weapons supplies to Hezbollah. Successive Administrations have also sought to provide U.S. military gear and other assistance to the Lebanese army, to build it up as a counterweight to Hezbollah. It is not clear that such efforts have accomplished the stated objectives, however.", "The United States has imposed sanctions on Iranian entities involved in supplying Hezbollah as well as on Hezbollah and its related entities, although without apparent effect in light of the fact that such entities do not generally operate in the international financial or commercial system. The 115 th Congress enacted legislation ( P.L. 115-272 ) that expanded the authority to sanction foreign banks that transaction business with Hezbollah, its affiliates, and partners. Sanctions on Hezbollah and on Iran might have contributed to the early 2019 call by Hezbollah's Secretary General Hassan Nasrallah for additional donations, but there has been no evident change in Hezbollah's operational behavior in 2019. "], "subsections": []}]}]}, {"section_title": "Yemen125", "paragraphs": ["Iranian leaders have not historically identified Yemen as a core Iranian security interest, but they seized on 2014 territorial gains by Zaidi Shia Houthi rebels there as an opportunity to acquire significant leverage against Saudi Arabia. A 2011 \"Arab Spring\"-related uprising in Yemen forced longtime President Ali Abdullah Saleh to resign in January 2012. In March 2015, Saudi Arabia assembled an Arab coalition that, with logistical help from U.S. forces, has helped the ousted government recapture some territory but has caused drastic humanitarian consequences without yet compelling the Houthis to accept a political solution. ", "The increasingly sophisticated nature of Iran's support for the Houthis could suggest that Iran perceives the Houthis as a potential proxy to project power on the southwestern coast of the Arabian Peninsula. Iranian weapons shipments to the Houthis are banned by Resolution 2231 on Iran and also by Resolution 2216 on Yemen, discussed above. ", "A July 2016 report on Iran by the U.N. Secretary-General reiterated the assertion made previously by U.N. experts, that Iran has shipped arms to the Houthis. Among the systems Iran is providing are anti-ship cruise missiles that are of increasing concern to U.S. commanders. The Houthis fired anti-ship missiles at UAE and U.S. ships in the Red Sea in October 2016, which prompted U.S. strikes on Houthi-controlled radar installations. Iran subsequently deployed several warships to the Yemen seacoast as an apparent sign of support for the Houthis. In January 2017, the Houthis damaged a Saudi ship in the Red Sea\u2014an action that contributed to the February 1, 2017, Trump Administration statement putting Iran \"on notice\" for its regional malign activities. The degree of U.S. concern about Iran's supplies of missiles to the Houthis was reflected in then-CENTCOM commander General Joseph Votel's March 29, 2017, testimony before the House Armed Services Committee, referring to the Bab el-Mandeb Strait:", "It is a choke point, it is a major transit area for commerce, not only ours but for international ships. About 60 to 70 ships go through there a day. What we have seen, I believe, that the\u2014with the support of Iran, we have seen the migration of capabilities that we previously observed in the Straits of Hormuz, a layered defense, consists of coastal defense missiles and radar systems, mines, explosive boats that have been migrated from the Straits of Hormuz to this particular area right here, threatening commerce and ships and our security operations in that particular area. ", "Saudi Arabia, with U.S. and some U.N. backing, accuses Iran of providing the ballistic missiles that the Houthis have fired on Riyadh on several occasions. A December 8, 2017, report by the U.N. Secretary-General on implementation of Resolution 2231 generally supports those allegations as well as allegations that Iran had shipped other weapons to the Houthis. U.S. Ambassador to the U.N. Nikki Haley cited that report in a December 14, 2017, presentation to the Security Council that asserted definitively that Iran had given the Houthis the missiles fired on Riyadh. A report by a U.N. panel of experts in January 2018 reportedly found that two missiles fired on Saudi Arabia by the Houthis, on July 22 and November 4, 2017, were consistent with the design of Iranian missiles, but the panel did not state definitively who supplied the missiles or how they were transported to Yemen. On November 29, 2018, the head of the State Department's \"Iran Action Group,\" Brian Hook, displayed missiles, rockets, and other equipment that he asserted were supplied by Iran to the Houthis and captured by Saud-led coalition forces. Some of these systems are discussed in the \"Iran missile arsenal\" table above. In late February 2018, Russia blocked a U.N. Security Council resolution from identifying Iran directly as a violator of the U.N. ban on weapons shipments to Yemen (Resolution 2216). Iran has denied providing the Houthis with missiles and assert that they are from a government arsenal assembled before the 2011 civil strife. "], "subsections": [{"section_title": "Financial and Advisory Support", "paragraphs": ["Many observers assess that Iran's support for the Houthis has been modest. ", "The State Department's \"Outlaw Regime\" report states that since 2012, Iran \"has spent hundreds of millions of dollars\" aiding the Houthis. Secretary Pompeo mentioned the same figure in the transcript of his briefing for Senators on November 28, 2018. In that same transcript, Secretary Pompeo stated that a 20-person IRGC-QF unit called \"Unit 190\" is responsible for funneling Iranian weaponry to the Houthis. Pompeo added that the head of the unit also arranges for the travel of IRGC-QF and Hezbollah advisers to go to Yemen to advise the Houthis. The State Department's \"Outlaw Regime\" report cites press reports that Iran might have sent some militia forces from Syria to fight alongside the Houthis in Yemen."], "subsections": []}, {"section_title": "U.S. Policy to Counter Iranian Influence in Yemen", "paragraphs": ["U.S. officials have cited Iran's support for the Houthis to argue for the main policy line of effort, which is providing logistical support to the Saudi-led Arab coalition battling the Houthis in Yemen. In his May 21, 2018, speech, Secretary Pompeo stipulated as one U.S. demand on Iran that the country \"must also end its military support for the Houthi militia and work towards a peaceful political settlement in Yemen.\" In the transcript of his remarks to Senators on November 28, 2018, Pompeo stated that \"Iran wants to establish a version of Lebanese Hezbollah on the Arabian Peninsula so the mullahs in Tehran can control seaborne trade through strategic waterways like the Bab el-Mandeb Strait.... we must also prevent Iran from entrenching itself in Yemen.\" However, even though many Members of Congress express concerns with Iran's backing for the Houthis, several bills have passed the House and the Senate requiring a decrease, or even an end, to the U.S. support for the Arab coalition fighting in Yemen. These votes have been widely viewed as opposition to the civilian casualties caused by the Saudi-led effort as well as sentiment against Saudi Crown Prince Mohammad bin Salman over the October 2018 Kashoggi killing. ", "The United States has also sought to prevent Iran from delivering weapons to the Houthis by conducting joint naval patrols with members of the Saudi-led coalition. Some weapons shipments have been intercepted. Some reports indicate that, to evade the naval scrutiny, Iran has been transferring its weapons deliveries to a variety of small boats in the northern Persian Gulf, from where they sail to Yemen. ", "The United States also has increased its assistance to Oman to train its personnel to prevent smuggling through its territory, presumably including the smuggling of Iranian weaponry to the Houthis. U.S. forces have not engaged in any bombing of the Houthis or Iranian advisers in Yemen, although U.S. forces continue to operate on the ground in Yemen against the Al Qaeda in the Arabian Peninsula (AQAP) terrorist group that operates in southeastern Yemen. "], "subsections": []}]}, {"section_title": "Turkey134", "paragraphs": ["Iran and Turkey, which share a short border, have extensive economic relations but sometimes tense political relations. Turkey is a member of NATO, and Iran has sought to limit Turkey's cooperation with any NATO plan to emplace military technology near Iran's borders. Iran and Turkey's disputes on some regional issues might be caused, at least in part, by the sectarian differences between Sunni-inhabited Turkey and Shia Iran. Turkey has advocated Asad's ouster as part of a solution for conflict-torn Syria whereas Iran is a key supporter of Asad. However, following a failed Turkish military coup in July 2016, and mutual concerns over the empowerment of Syrian Kurdish forces, Turkey-Iran differences narrowed. Turkey's President Recep Tayip Erdogan has come to publicly accept that Asad might remain in power in Syria and both countries are integral part of Russia-led talks on an overall political solution for Syria. Iran and Turkey cooperate to try to halt cross border attacks by Kurdish groups that oppose the governments of Turkey (Kurdistan Workers' Party, PKK) and of Iran (Free Life Party, PJAK), and which enjoy safe have in northern Iraq. In August 2017, the first high-level Iranian military visit to Turkey since the Iranian revolution took place when the chief of staff of Iran's joint military headquarters, Hamid Baqeri, who rose through IRGC ranks, visited Ankara. ", "Turkey supported the JCPOA, and sanctions relief on Iran has enabled Iran-Turkey trade to expand. Iran supplies as much as 50% of Turkey's oil and over 5% of its natural gas, the latter flowing through a joint pipeline that began operations in the late 1990s and has since been supplemented by an additional line. President Erdogan has indicated that Turkey will not cooperate with the reimposition of sanctions on Iran related to the U.S. exit from the JCPOA. ", "In the 1990s and early 2000s, Iran and Turkey were at odds over the strategic engagement of Turkey's then leaders with Israel. The Iran-Turkey dissonance on the issue faded after Erdogan's Islamist-rooted Justice and Development Party (AKP) came to power in Turkey. Turkey has since been a significant supporter of Hamas and other Islamist movements. "], "subsections": []}, {"section_title": "North Africa", "paragraphs": ["Two countries in North Africa, Egypt and Morocco, have been mentioned as potential members of the planned \"Middle East Strategic Alliance\" (MESA) to counter Iran"], "subsections": [{"section_title": "Egypt135", "paragraphs": ["Iran's relations with Egypt have been strained for decades, spanning various Egyptian regimes. Egypt is a Sunni-dominated state that is aligned politically and strategically with other Sunni governments that are critical of Iran. Iran broke relations with Egypt shortly after the 1979 peace treaty Egypt signed with Israel. The two countries reportedly have been close to reestablishing full relations numerous times, including after the election of a Muslim Brotherhood leader, Mohammad Morsi, as Egypt's president. Morsi visited Iran in August 2012. However, relations worsened again after the military's overthrow of the Morsi government. Egypt, particularly under the government of President Abd al Fattah Sisi, views Hamas as an Islamist threat and has sought to choke off Iranian and other weapons supplies to that movement. On the other hand, Egypt and Iran have found some common ground on Syria insofar as Sisi has not sought Asad's ouster. Egypt said in April 2019 that it would not join the U.S.-backed MESA alliance."], "subsections": []}, {"section_title": "Morocco136", "paragraphs": ["In May 2018, Morocco announced t hat it would sever diplomatic ties with Iran because of alleged Iranian support (via its ally Lebanese Hezbollah) for the Polisario Front, which seeks independence for the Western Sahara. Morocc o's foreign minister claimed that Hezbollah had provided surface-to-air missiles to the Polisario; that evidence was reportedly presented to Iran but has not been made public. No other publicly available evidence appears to support of those specific allegations, and both Iran and Hezbollah denied the accusations. Morocco previously cut ties with Iran in March 2009 due to alleged Iranian efforts to spread Shiism in largely Sunni Morocco; diplomatic relations were reestablished in January 2017. Morocco has close relations with Saudi Arabia, which supported Morocco's severing ties with Iran. ", "An intent to be part of the MESA coalition could give Morocco incentive to be as hardline on Iran as possible, and potential to accuse Iran of activities for which there might not be a lot of independently corroborated evidence. There has been little, if any, evidence that influencing politics or political outcomes in Morocco has been a significant feature of Iran's regional policies or its intent. Iranian leaders rarely, if ever, mention Morocco when they outline Iranian policy in the Middle East region. There are few easily identifiable factions in Morocco that are pro-Iranian or with which the IRGC-QF can work. "], "subsections": []}]}]}, {"section_title": "South and Central Asia", "paragraphs": ["Iran's relations with countries in the Caucasus, Central Asia, and South Asia vary significantly, but most countries in these regions conduct relatively normal trade and diplomacy with Iran. Some of them face significant domestic threats from radical Sunni Islamist extremist movements similar to those that Iran characterizes as a threat. ", "Most of the Central Asia states that were part of the Soviet Union are governed by authoritarian leaders. Afghanistan remains politically weak, and Iran is able to exert influence there. Some countries in the region, particularly India, seek greater integration with the United States and other world powers and tend to downplay cooperation with Iran. The following sections address countries that have significant economic and political relationships with Iran. "], "subsections": [{"section_title": "The South Caucasus: Azerbaijan and Armenia", "paragraphs": ["Azerbaijan is, like Iran, mostly Shia Muslim-inhabited. However, Azerbaijan is ethnically Turkic and its leadership is secular. Iran and Azerbaijan also have territorial differences over boundaries in the Caspian Sea. Iran asserts that Azeri nationalism might stoke separatism among Iran's large Azeri Turkic population, which has sometimes been restive. Iran has generally tilted toward Armenia, which is Christian, in Armenia's conflict with Azerbaijan over the Nagorno-Karabakh enclave. The relationship is expanding among Iran, Armenia, and Georgia now that Iran is not under international economic sanctions. On December 21, 2016, President Rouhani visited Armenia to discuss a Persian Gulf-Black Sea transit and transport corridor.", "For more than two decades, Azerbaijan has engaged in strategic cooperation with the United States against Iran (and Russia), including Azerbaijan's deployments of troops to and facilitation of supply routes to Afghanistan, and counterterrorism cooperation. In the 1990s, the United States successfully backed construction of the Baku-Tblisi-Ceyhan oil pipeline, intended in part to provide non-Iranian and non-Russian export routes. On the other hand, the United States has accepted Azerbaijan's need to deal with Iran on some major regional energy projects. Several U.S. sanctions laws exempted from sanctions long-standing joint natural gas projects that involve some Iranian firms\u2014particularly the Shah Deniz natural gas field and pipeline in the Caspian Sea. The project is run by a consortium in which Iran's Naftiran Intertrade Company (NICO) holds a passive 10% share. (Other major partners are BP, Azerbaijan's national energy firm SOCAR, and Russia's Lukoil.) ", "The lifting of sanctions on Iran has caused Azerbaijan to alter its policy toward Iran somewhat. In August 2016, Azerbaijan's President Ilham Aliyev hosted Rouhani and Russia's President Vladimir Putin to a \"Baku Summit,\" in which a major topic was a long-discussed \"North-South Transport Corridor\" involving rail, road, and shipping infrastructure from Russia to Iran, through Azerbaijan. The project is estimated to cost $400 million. And, some press reports indicate that Iranian investors previously or still linked to Iranian governing institutions have engaged in real estate and other projects in Azerbaijan. "], "subsections": []}, {"section_title": "Central Asia", "paragraphs": ["Iran has generally sought positive relations with the leaderships of the Central Asian states, even though most of these leaderships are secular and all of the Central Asian states are mostly Sunni inhabited. Almost all of the Central Asian states share a common language and culture with Turkey; Tajikistan is alone among them in sharing a language with Iran. Several have active Sunni Islamist opposition movements, such as the Islamic Movement of Uzbekistan (IMU), giving the Central Asian countries common cause with Iran to prevent Sunni jihadist terrorist actions. The IMU, which is active in Afghanistan, in mid-2015, declared its loyalty to the Islamic State organization. ", "Iran and the Central Asian states are expanding economic relations, perhaps in part to fit into China's \"Belt and Road Initiative\" (BRI) to build up infrastructure in countries west of China\u2014akin to reviving the old \"Silk Road. In December 2014, a new railway was inaugurated through Iran, Kazakhstan, and Turkmenistan, providing a link from the Persian Gulf to Central Asia. Iran was hoping that the 2016 lifting of sanctions would position Iran as central to energy and transportation routes linking East Asia with Europe\u2014a vision that was discussed with Iranian leaders during the January 2016 visit to Iran of China's President Xi Jinping. However, the reimposition of U.S. sanctions in 2018 is likely to slow or halt that ambition. ", "Along with India and Pakistan, Iran has been given observer status in a Central Asian security grouping called the Shanghai Cooperation Organization (SCO\u2014Russia, China, Kazakhstan, Kyrgyzstan, Uzbekistan, and Tajikistan). In April 2008, Iran applied for full membership in the organization. Apparently in an effort to cooperate with international efforts to pressure Iran, in June 2010, the SCO barred admission to Iran on the grounds that it is under U.N. Security Council sanctions. Some officials from SCO member countries have stated that the JCPOA removed that formal obstacle to Iran's obtaining full membership, but opposition to Iran's full membership among some SCO countries has denied Iran from full membership. Rouhani attended the late May 2018 SCO meeting in China which discussed how to react to the U.S. exit from the JCPOA."], "subsections": [{"section_title": "Turkmenistan", "paragraphs": ["Turkmenistan and Iran have a land border in Iran's northeast. Supreme Leader Khamene'i is of Turkic origin; his family has close ties to the Iranian city of Mashhad, capital of Khorasan Province, which borders Turkmenistan. The two countries are also both rich in natural gas reserves. A natural gas pipeline from Iran to Turkey, fed with Turkmenistan's gas, began operations in 1997, and a second pipeline was completed in 2010. China has since become Turkmenistan's largest natural gas customer. ", "Another potential project favored by Turkmenistan and the United States would likely reduce interest in pipelines that transit Iran. President Berdymukhamedov has revived his predecessor's 1996 proposal to build a gas pipeline through Afghanistan to Pakistan and India (termed the Turkmenistan-Afghanistan-Pakistan-India, or \"TAPI\" pipeline). In August 2015, Turkmenistan's state-owned gas company was named head of the pipeline consortium and Turkmenistan officials said the project was formally inaugurated in December 2015, with completion expected in 2019. U.S. officials have expressed strong support for the project as \"a very positive step forward and sort of a key example of what we're seeking with our New Silk Road Initiative, which aims at regional integration to lift all boats and create prosperity across the region.\" "], "subsections": []}, {"section_title": "Tajikistan", "paragraphs": ["Iran and Tajikistan share a common Persian language, as well as literary and cultural ties, but the two do not share a border and most Tajikistan citizens are Sunni Muslims. President Imamali Rakhmonov has asserted that Iran and Tajikistan face common threats from arms races, international terrorism, political extremism, fundamentalism, separatism, drug trafficking, transnational organized crime, and the proliferation of weapons of mass destruction, and that close ties with neighboring states such as Iran would be based on noninterference in each other's internal affairs and the peaceful settlement of disputes, such as over border, water, and energy issues. ", "Some Sunni Islamist extremist groups that pose a threat to Tajikistan are allied with Al Qaeda or the Islamic State. Tajikistan's leaders appear particularly concerned about Islamist movements in part because the Islamist-led United Tajik Opposition posed a serious threat to the newly independent government in the early 1990s, and a settlement of the insurgency in the late 1990s did not fully resolve government-Islamist opposition tensions. The Tajikistan government has detained members of Jundallah (Warriors of Allah)\u2014a Pakistan-based Islamic extremist group that has conducted bombings and attacks against Iranian security personnel and mosques in Sunni areas of eastern Iran. In part because the group attacked some civilian targets in Iran, in November 2010, the State Department named the group an FTO. "], "subsections": []}, {"section_title": "Kazakhstan", "paragraphs": ["Kazakhstan is a significant power by virtue of its geographic location, large territory, and ample natural resources. It hosted P5+1-Iran nuclear negotiations in 2013 and, in September 2014, Kazakhstan's President Nursultan Nazarbayev met with President Rouhani and expressed the hope that a JCPOA would be achieved in order to better integrate Iran economically into the Central Asian region. Kazakhstan played a role in the commercial arrangements that produced the December 2015 shipment out to Russia of almost all of Iran's stockpile of low-enriched uranium, fulfilling a key JCPOA requirement. Kazakhstan's National Atomic Company Kazatomprom supplied Iran with 60 metric tons of natural uranium on commercial terms as compensation for the removal of the material, which Norway paid for. ", "With sanctions eased, Iran is open to additional opportunities to cooperate with Kazakhstan on energy and infrastructure projects. Kazakhstan possesses 30 billion barrels of proven oil reserves (about 2% of world reserves) and 45.7 trillion cubic feet of proven gas reserves (less than 1% of world reserves). Two major offshore oil fields in Kazakhstan's sector of the Caspian Sea\u2014Kashagan and Kurmangazy\u2014are estimated to contain at least 14 billion barrels of recoverable reserves. Iran and Kazakhstan do not have any joint energy ventures in the Caspian or elsewhere, but after the finalization of the JCPOA in July 2015, the two countries resumed Caspian oil swap arrangements that were discontinued in 2011. The two countries are not at odds over specific sections of the Caspian Sea, and some aspects, but not all, of the territorial questions regarding the Caspian were settled in 2018. "], "subsections": []}, {"section_title": "Uzbekistan", "paragraphs": ["During the 1990s, Uzbekistan, which has the largest military of the Central Asian states, identified Iran as a potential regional rival and as a supporter of Islamist movements in the region. However, since 1999, Uzbekistan and Iran\u2014which do not share a common border or significant language or cultural links\u2014have moved somewhat closer over shared stated concerns about Sunni Islamist extremist movements, particularly the Islamic Movement of Uzbekistan (IMU) extremist group. In February 1999, six bomb blasts in Tashkent's governmental area nearly killed then President Islam Karimov, who was expected to attend a high-level meeting there. The government alleged that the plot was orchestrated by the IMU with assistance from Afghanistan's Taliban, which was in power in Afghanistan and hosting Osama bin Laden. In September 2000, the State Department designated the IMU as an FTO. The IMU itself has not claimed responsibility for any terrorist attacks in Iran and appears focused primarily on activities against the governments of Afghanistan and Uzbekistan. ", "Iran-Uzbekistan relations have not changed significantly since the August 2016 death of Uzbekistan's longtime President Islam Karimov and his replacement by Shavkat Mirziyoyev, who was at the time the Prime Minister. Uzbekistan has substantial natural gas resources but it and Iran do not have joint energy-related ventures. Most of Uzbekistan's natural gas production is for domestic consumption. Still, Mirziyoyev has sought to expand regional and international cooperation and his foreign policy departure from the Karimov era is likely to benefit Uzbekistan-Iran relations. "], "subsections": []}]}, {"section_title": "South Asia", "paragraphs": ["The countries in South Asia face perhaps a greater degree of threat from Sunni Islamic extremist groups than do the countries of Central Asia. They also share significant common interests with Iran, which Iran used to foster cooperation against U.S. sanctions. This section focuses on several countries in South Asia that have substantial interaction with Iran. "], "subsections": [{"section_title": "Afghanistan", "paragraphs": ["In Afghanistan, Iran is pursuing a multitrack strategy by helping develop Afghanistan economically, engaging the central government, supporting pro-Iranian groups and, at times, arming Taliban fighters. An Iranian goal appears to be to restore some of its traditional sway in eastern, central, and northern Afghanistan, where \"Dari\"-speaking (Dari is akin to Persian) supporters of the \"Northern Alliance\" grouping of non-Pashtun Afghan minorities predominate. Iran shares with the Afghan government concern about the growth of Islamic State affiliates in Afghanistan, such as Islamic State\u2014Khorasan Province, ISKP, an affiliate of the Islamic State organization that Iran is trying to thwart on numerous fronts in the region. The two countries are said to be cooperating effectively in their shared struggle against narcotics trafficking. President Ghani and Iranian leaders meet periodically. ", "Iran has sought influence in Afghanistan in part by supporting the Afghan government, which is dominated by Sunni Muslims and ethnic Pashtuns. In October 2010, then-President Hamid Karzai admitted that Iran was providing cash payments (about $2 million per year) to his government. It is not known whether such payments continue. Iran's ally, Dr. Abdullah Abdullah, who is half-Tajik and speaks Dari, is \"Chief Executive Officer\" of the Afghan government under a power-sharing arrangement with President Ashraf Ghani that followed the 2014 presidential election. ", "Even though it engages the Afghan government, Tehran has in the recent past sought leverage against U.S. forces in Afghanistan and in any Taliban-Afghan government peace settlement. Past State Department reports on international terrorism have accused Iran of providing materiel support, including 107mm rockets, to select Taliban and other militants in Afghanistan, and of training Taliban fighters in small unit tactics, small arms use, explosives, and indirect weapons fire. In July 2012, Iran allowed the Taliban to open an office in Zahedan (eastern Iran). In December 2016, Iran invited several Taliban figures to an \"Islamic Unity\" conference in Tehran. Reflecting apparent concern about the U.S. military presence in Afghanistan, Iran reportedly tried to derail the U.S.-Afghanistan Bilateral Security Agreement (BSA), signed in September 2014, that allowed the United States to maintain troops in Afghanistan after 2014. It prohibits the United States from launching military action against other countries from Afghanistan. In his May 21, 2018, speech, Secretary Pompeo demanded that \"Iran, too, must end support for the Taliban and other terrorists in Afghanistan and the region, and cease harboring senior Al Qaeda leaders.\"", "Purported Iranian support to Taliban factions comes despite the fact that Iran saw the Taliban regime in Afghanistan of 1996-2001 as an adversary. The Taliban allegedly committed atrocities against Shia Afghans (Hazara tribes) while seizing control of Persian-speaking areas of western and northern Afghanistan. Taliban fighters killed nine Iranian diplomats at Iran's consulate in Mazar-e-Sharif in August 1998, prompting Iran to mobilize ground forces to the Afghan border."], "subsections": []}, {"section_title": "Pakistan156", "paragraphs": ["Relations between Iran and Pakistan have been uneven. Pakistan supported Iran in the 1980-1988 Iran-Iraq War, and Iran and Pakistan engaged in substantial military cooperation in the early 1990s, and the two still conduct some military cooperation, such as joint naval exercises in April 2014. The founder of Pakistan's nuclear weapons program, A.Q. Khan, sold nuclear technology and designs to Iran. However, a rift emerge between the two countries in the 1990s because Pakistan's support for the Afghan Taliban ran counter to Iran's support for the Persian-speaking and Shia Muslim minorities who opposed Taliban rule. Iran reportedly is concerned that Pakistan might harbor ambitions of returning the Taliban movement to power in Afghanistan. Two Iranian Sunni Muslim militant groups that attack Iranian regime targets\u2014 Jundullah (named by the United States as an FTO, as discussed above) and Jaysh al-Adl\u2014operate from western Pakistan. ", "A significant factor dividing them is Pakistan's relationship with Saudi Arabia. Pakistan declined a Saudi request that Pakistan participation in the Saudi-led coalition against the Houthis in Yemen, but Pakistan joined Saudi Arabia's 34-nation \"antiterrorism coalition\" in December 2015. The coalition was announced as a response to the Islamic State, but Iran asserts it is directed at reducing Iran's regional influence. ", "The two nations' bilateral agenda has increasingly focused on a joint major gas pipeline project that would ease Pakistan's energy shortages while providing Iran an additional customer for its large natural gas reserves. As originally conceived, the line would continue on to India, but India withdrew from the project at its early stages. Then-President of Iran Ahmadinejad and Pakistan's then-President Asif Ali Zardari formally inaugurated the project in March 2013. Iran has completed the line on its side of the border, but Pakistan was unable to finance the project on its side of the border until China agreed in April 2015 to build the pipeline at a cost of about $2 billion. U.S. officials stated that the project could be subject to U.S. sanctions under the Iran Sanctions Act, which went into effect again on November 5, 2018, and there is little evident movement on the project. "], "subsections": []}, {"section_title": "India161", "paragraphs": ["India and Iran have overlapping histories and civilizations, and they are aligned on several strategic issues. Tens of millions of India's citizens are Shia Muslims. Both countries have historically supported minority factions in Afghanistan that are generally at odds with Afghanistan's dominant Pashtun community. ", "India has generally cooperated with U.S. sanctions policy on Iran, even though India has obtained Iranian oil on concessionary terms and even though India's position has generally been that it will only enforce sanctions authorized by U.N. Security Council resolutions. Some projects India has pursued in Iran involve not only economic issues but national strategy. India has long sought to develop Iran's Chabahar port, which would give India direct access to Afghanistan and Central Asia without relying on transit routes through Pakistan. India had hesitated to move forward on that project because of U.S. opposition to projects that benefit Iran. India, Iran, and Afghanistan held a ceremony in May 2016 to herald the start of work. In December 2017, Iran inaugurated the $1 billion expansion of Chabahar\u2014a project that U.S. officials have excepted from U.S. sanctions on Iran because of its pivotal contribution to Afghanistan's development. During Rouhani's visit to India in February 2018, he and India's Prime Minister Narendra Modi signed memoranda outlining future expanded energy cooperation. ", "During the late 1990s, U.S. officials expressed concern about India-Iran military-to-military ties. The relationship included visits to India by Iranian naval personnel, although India said these exchanges involved junior personnel and focused mainly on promoting interpersonal relations and not on India's provision to Iran of military expertise. The military relationship between the countries has withered in recent years. "], "subsections": []}]}]}, {"section_title": "Russia", "paragraphs": ["Iran attaches significant weight to its relations with Russia\u2014a permanent member of the U.N. Security Council, a supplier of arms to Iran, a party to the JCPOA, and a key supporter of the Asad regime. Russia appears to view Iran as a de facto ally in combating Sunni Islamist extremist movements, which have conducted attacks in Russia. Russian President Vladimir Putin visited Iran on November 23, 2015, to attend a conference of major international natural gas producers, and also held talks with Supreme Leader Khamene'i and President Rouhani, resulting in an announcement of a $5 billion line of credit to Iran for possible joint projects, including additional natural gas pipelines, railroads, and power plants. Rouhani visited Moscow on March 28, 2017, to discuss with President Putin the issues discussed below. During Putin's visit to Tehran on November 1, 2017, the two countries agreed to collaborate on \"strategic energy deals\" valued at about $30 billion. Russia opposed the U.S. exit from the JCPOA and has said it would not cooperate with reimposed U.S. secondary sanctions on Iran. ", "U.S. officials express concern primarily with Iran-Russia military cooperation, particularly in Syria. Russia-Iran cooperation has been pivotal to the Asad regime's recapture of much of rebel-held territory since 2015. Yet, the two countries' interests do not align precisely in Syria because Iranian leaders express far greater concern about protecting Hezbollah in any post-Asad regime than do leaders of Russia, whose interests appear to center on preserving the Asad regime and on Russia's overall presence in the Middle East. In August 2016, Iran allowed Russia to stage bombing runs in Syria from a base in western Iran, near the city of Hamadan. The Russian use of the base ran counter to Iran's constitution, which bans foreign use of Iran's military facilities, and Iran subsequently ended the arrangement after Russia publicized it. ", "Russia has been Iran's main supplier of conventional weaponry and a significant supplier of missile-related technology. In February 2016, Iran's then-Defense Minister Hosein Dehgan visited Moscow reportedly to discuss purchasing Su-30 combat aircraft, T-90 tanks, helicopters, and other defense equipment. Under Resolution 2231, selling such gear would require Security Council approval - until the provision sunsets in October 2020 - and U.S. officials have said publicly they would not support such a sale. Russia previously has abided by all U.N. sanctions to the point of initially cancelling a contract to sell Iran the advanced S-300 air defense system\u2014even though Resolution 1929, which banned most arms sales to Iran, did not specifically ban the sale of the S-300. After the April 2, 2015, framework nuclear accord was announced, Russia lifted its ban on the S-300 sale, and the system became operational in Iran in 2016. In January 2015, Iran and Russia signed a memorandum of understanding on defense cooperation, including military drills.", "Russia built and still supplies fuel for Iran's only operating civilian nuclear power reactor at Bushehr, a project from which Russia earns significant revenues. Since December 2015, Russia has shipped out of Iran of almost all of Iran's stockpile of low-enriched uranium\u2014helping Iran meet a key requirement of the JCPOA. The U.S. ending of sanctions waivers that allowed for the shipments could complicate this technical assistance provided by Russia. "], "subsections": []}, {"section_title": "Europe", "paragraphs": ["Iran's foreign policy is focused on urging the European countries to continue providing Iran with the economic benefits of the JCPOA in the wake of the May 2018 Trump Administration pullout from that accord. The EU is struggling with that effort, insofar as European countries have substantial engagement in the U.S. economy and are reluctant to risk that business to maintain economic ties to Iran. Still, Rouhani and his subordinates regularly visit European capitals and engage European leaders, daily flights from several European countries to Iran continue, and many Iranian students attend European universities.", "While the European countries oppose the U.S. withdrawal from the JCPOA, they are critical of Iran for recent alleged Iranian plots to assassinate dissidents in Europe (discussed above). In January 2019, in response to a Dutch letter linking Iran to assassinations of Dutch nationals of Iranian origin in 2015 and 2017, the EU sanctioned the internal security unit of Iran's Intelligence ministry and two Iranian operatives for sponsoring acts of terrorism. ", "It is the terrorism issue that has, in the past, disrupted Iran-Europe relations. During the 1990s, the United States had no dialogue with Iran at all, whereas the EU countries maintained a policy of \"critical dialogue\" and refused to join the 1995 U.S. trade and investment ban on Iran. But, that dialogue was suspended in April 1997 in response to the German terrorism trial (\"Mykonos trial\") that found high-level Iranian involvement in killing Iranian dissidents in Germany. "], "subsections": []}, {"section_title": "East Asia", "paragraphs": ["East Asia includes three of Iran's five largest buyers of crude oil and one country, North Korea, that is widely accused of supplying Iran with missile and other military-related technology. The countries in Asia have not extensively intervened militarily or politically in the Middle East, and Iran rarely criticizes countries in Asia. "], "subsections": [{"section_title": "China167", "paragraphs": ["China, a permanent member of the U.N. Security Council and a P5+1 party to the JCPOA, is Iran's largest oil customer. During U.N. Security Council deliberations on Iran during 2006-2013, China tended to argue for less stringent sanctions than did the United States, but China's compliance with U.S. sanctions was pivotal to U.S. efforts to reduce Iran's revenue from oil sales during 2012-2016. China opposed the U.S. withdrawal from the JCPOA and the government has continued to buy substantial quantities of Iran oil, even while earning a U.S. exception from sanctions requiring Iran's oil customers to reduce buys from Iran. ", "China faces a potential threat from Sunni Muslim extremists in western China and appears to see Shia Iran as a potential ally against Sunni radicals. China also appears to agree with Iran's view that the Asad regime is preferable to the Islamic State and other Islamist rebel organizations.", "Shortly after Implementation Day of the JCPOA in January 2016, China's President Xi Jinping included Tehran on a visit to the Middle East region. His trip to Iran generally focused on China's vision of an energy and transportation corridor extending throughout Eurasia (Belt and Road Initiative, BRI), and including Iran, and the two countries agreed to expand trade to $600 billion over the next decade. Iran's burgeoning economic and diplomatic relationships with the Central Asian states appear intended, at least in part, to enable Iran to take advantage of the substantial Chinese investment in the region that is required to implement its BRI vision. As an example, in February 2016, the first rail cargo from China arrived in Iran via the Kazakhstan-Turkmenistan-Iran link discussed above. ", "China in the past supplied Iran with advanced conventional arms, including cruise missile-armed fast patrol boats that the IRGC Navy operates in the Persian Gulf; anti-ship missiles; ballistic missile guidance systems; and other WMD-related technology. A number of China-based entities have been sanctioned by the United States, including in 2017, for allegedly aiding Iran's missile, nuclear, and conventional weapons programs. "], "subsections": []}, {"section_title": "Japan and South Korea", "paragraphs": ["Iran's primary interest in Japan and South Korea has been to expand commercial relations after sanctions were eased. Neither Japan nor South Korea has been heavily involved in security and strategic issues in the Middle East, but both countries are close allies of the United States. Both countries are wary of Iran's reported military and technology relations with North Korea.", "During the period when the United States was implementing the JCPOA, South Korea's then-President Geun-hye Park visited Tehran in May 2016 for the first tour of Iran by a South Korean president to Iran since 1962, accompanied by representatives of 236 South Korean companies and organizations. The two sides signed a number of agreements in the fields of oil and gas, railroads, tourism, and technology, and agreed to reestablish direct flights between Tehran and Seoul. ", "Japan's Prime Minister Shinzo Abe reportedly had planned to visit Iran in late August 2016, but postponed the visit. During the U.N. General Assembly meetings in New York (September 18-21, 2017), Abe accepted an invitation from President Rouhani to visit Iran, according to Abe's spokesperson., but no date for the visit was announced. The visit, which would have been the first by a leader of Japan to the Islamic Republic, is unlikely now that the United States has exited the JCPOA.", "Japanese and South Korean firms are consistently unwilling to risk their positions in the U.S. market by violating any U.S. sanctions on Iran, and these companies are starting to leave the Iran market now that U.S. secondary sanctions are being reimposed. "], "subsections": []}, {"section_title": "North Korea", "paragraphs": ["Iran and North Korea have been aligned as \"rogue states\" subjected to wide-ranging international sanctions. North Korea is one of the few countries with which Iran has formal military-to-military relations, and the two countries have cooperated on a wide range of military and WMD-related ventures, particularly the development of ballistic missile technology. In the past, Iran reportedly funded and assisted in the retransfer of missile and possibly nuclear technology from North Korea to Syria. North Korea also reportedly supplied Iran with small submarines. It is widely suspected that the two continue to cooperate on missile development, and possibly nuclear issues as well, but the extent of the cooperation, if any, is not known from published sources. ", "North Korea has not at any time pledged to abide by international sanctions against Iran, but its economy is too small to significantly help Iran. According to some observers, a portion of China's purchases of oil from Iran and other suppliers is reexported to North Korea. After international sanctions on Iran's crude oil exports were removed, additional quantities of Iranian oil likely began reaching North Korea, most likely via China. However, the expansion of such retransfers are likely limited by the adoption in September 2017 of additional U.N. sanctions limiting the supply of oil to North Korea. "], "subsections": []}]}, {"section_title": "Latin America169", "paragraphs": ["Some U.S. officials and some in Congress have expressed concerns about Iran's relations with leaders in Latin America that share Iran's distrust of the United States. Some experts and U.S. officials have asserted that Iran has sought to position IRGC-QF operatives and Hezbollah members in Latin America to potentially carry out terrorist attacks against Israeli targets in the region or even in the United States itself. Some U.S. officials have asserted that Iran and Hezbollah's activities in Latin America include money laundering and trafficking in drugs and counterfeit goods. These concerns were heightened during the presidency of Mahmoud Ahmadinejad (2005-2013), who made repeated, high-profile visits to the region in an effort to circumvent U.S. sanctions and gain support for his criticisms of U.S. policies. However, few of the economic agreements that Ahmadinejad announced with Latin American countries were implemented, by all accounts. ", "President Rouhani has expressed only modest interest in expanding ties in Latin America, perhaps in part because Latin America is not pivotal to Iran's economy. He made his first visit to the region in September 2016 in the course of traveling to the annual U.N. General Assembly meetings in New York. He went to several of the countries that Foreign Minister Zarif did in August 2016: Cuba, Chile, Bolivia, Ecuador, Nicaragua, and Venezuela\u2014countries in that region that Ahmadinejad visited during his presidency as well. Iran's officials have stated that the purpose of the visits were to expand economic relations with Latin American countries. ", "In the 112 th Congress, the Countering Iran in the Western Hemisphere Act, requiring the Administration to develop a strategy to counter Iran's influence in Latin America, was enacted ( H.R. 3783 , P.L. 112-220 ). The required report was provided to Congress in June 2013, asserting that \"Iranian influence in Latin America and the Caribbean is waning\" in part because of U.S. efforts to cause Latin American countries to assess the costs and benefits of closer relations with Iran. Observers have directed particular attention to Iran's relationship with Venezuela (an OPEC member, as is Iran) because of its avowed anti-U.S. posture, and Argentina, because of the Iran-backed attacks on Israeli and Jewish targets there. Iran's relations with Cuba have been analyzed by experts in the past, but the U.S. opening to Cuba that began in late 2014 have eased concerns about Cuba-Iran relations. U.S. counterterrorism officials also have stated that the tri-border area of Argentina, Brazil, and Paraguay is a \"nexus\" of arms, narcotics and human trafficking, counterfeiting, and other potential funding sources for terrorist organizations, including Hezbollah. Assertions in 2009 by some U.S. officials that Iran was significantly expanding its presence in Nicaragua were disputed by subsequent accounts. "], "subsections": [{"section_title": "Venezuela175", "paragraphs": ["During Ahmadinejad's presidency, Iran had particularly close relations with Venezuela and its president, Hugo Chavez, who died in office in March 2013. Neither Rouhani nor Chavez's successor, Nicolas Maduro, have expressed the enthusiasm for the relationship that Chavez and Ahmadinejad did, but Iran has expressed support for Maduro in 2019 in the face of the serious political challenge from the opposition led by Juan Guaido. In the context of stepped up unrest in Venezuela in April-May 2019, U.S. officials have accused Iran and Hezbollah of helping Maduro retain support within the Venezuelan military. Iranian leaders have publicly supported Maduro as the legitimate leader of Venezuela and, in April 2019, Iran resumed a long-dormant direct air route from Tehran to Venezuela. Still, the extent of any Iranian or Hezbollah involvement in current events in Venezuela remains unclear. ", "Even during the presidencies of Chavez and Ahmadinejad, the United States did not necessarily perceive a threat from the Iran-Venezuela relationship. In July 2012, President Obama stated that Iran-Venezuela ties have not had \"a serious national security impact on the United States.\" Very few of the economic agreements announced were implemented. A direct air link was reportedly restarted by President Maduro in January 2015 in order to try to promote tourism between the two countries. Petroleos de Venezuela (PDVSA)\u2014which operates the Citgo gasoline stations in the United States\u2014has been supplying Iran with gasoline since 2009, in contravention of U.S. sanctions, and PDVSA was sanctioned under the Iran Sanctions Act in May 2011. The United States \"de-listed\" PDVSA as stipulated in the JCPOA, but it was \"re-listed\" in concert with the reimposition of U.S. sanctions on Iran in 2018. "], "subsections": []}, {"section_title": "Argentina181", "paragraphs": ["In Argentina, Iran and Hezbollah carried out acts of terrorism against Israeli and Jewish targets in Buenos Aires that continue to affect Iran-Argentina relations. The major attacks were the 1992 bombing of the Israeli embassy and the 1994 bombing of a Jewish community center (Argentine-Israeli Mutual Association, AMIA). Based on indictments and the investigative information that has been revealed, there is a broad consensus that these attacks were carried out by Hezbollah operatives, assisted by Iranian diplomats and their diplomatic privileges. ", "The Buenos Aires attacks took place more than 20 years ago and there have not been any recent public indications that Iran and/or Hezbollah are planning attacks in Argentina or elsewhere in Latin America. However, in February 2015, Uruguay stated that an Iranian diplomat posted there had left the country before Uruguay issued a formal complaint that the diplomat had tested the security measures of Israel's embassy in the capital, Montevideo.", "Many in Argentina's Jewish community opposed a January 2013 agreement between Iran and the government of then-President Cristina Fernandez de Kirchner to form a \"truth commission\" rather than to aggressively prosecute the Iranians involved. In May 2013, the Argentine prosecutor in the AMIA bombing case, Alberto Nisman, issued a 500-page report alleging that Iran has been working for decades in Latin America, setting up intelligence stations in the region by utilizing embassies, cultural organizations, and even mosques as a source of recruitment. In January 2015, Nisman was found dead of a gunshot wound, amid reports that he was to request indictment of Argentina's president for allegedly conspiring with Iran to downplay the AMIA bombing issue. President Kirchner was succeeded in December 2015 by Mauricio Macri, who has not sought to broaden relations with Iran. "], "subsections": []}]}, {"section_title": "Africa", "paragraphs": ["Sub-Saharan Africa has not generally been a focus of Iranian foreign policy, perhaps because of the relatively small size of most African economies and the limited ability of African countries to influence the actions of Iran's main regional rivals. Former President Ahmadinejad sought to deepen diplomatic and commercial ties to some African countries, focusing on those that have had historically tense relations with Western powers (such as Sudan, Zimbabwe, and South Africa). Many African countries, however, apparently did not want to risk their relationships with the United States or blowback from domestic Sunni constituencies by broadening relations with Iran. ", "The overwhelming majority of Muslims in Africa are Sunni, and Muslim-majority African countries have tended to be responsive to financial and diplomatic overtures from Iran's rival, Saudi Arabia. Amid the Saudi-Iran dispute in January 2016 over the Nimr execution, several African countries that Iran had cultivated as potential allies broke relations with Iran outright, including Djibouti, Comoros, and Somalia, as well as Sudan. Senegal, at one time seen as a primary focus of Ahmadinejad's Africa outreach, and Sudan have supported the Saudi-led military effort against the Iran-backed Houthis in Yemen\u2014in Sudan's case with some forces. The UAE, in particular, has actively sought allies in the Horn of Africa to reduce Iranian influence, including by facilitating UAE operations against the Iran-backed Houthi rebels in Yemen. West Africa's large Lebanese diaspora communities may also be a target of Iranian influence operations and a conduit for Hezbollah financial and criminal activities. ", "Rouhani has made few statements on relations with countries in Africa and has apparently not made the continent a priority. Tehran appears, however, to retain an interest in cultivating African countries as trading partners\u2014an interest that might increase now that the Trump Administration has decided to exit the JCPOA and reimpose all U.S. sanctions. Iran's leaders also apparently see Africa as a market for its arms exports and as sources of diplomatic support in U.N. forums. African populations may also be seen as potential targets for Iranian \"soft power\" and religious influence. Iran's Al Mustafa University, which promotes Iran's message and Shia religious orientation with branches worldwide, has numerous branches in various African countries.", "The IRGC-QF has reportedly operated in some countries in Africa, in part to secure arms-supply routes for pro-Iranian movements in the Middle East but also to be positioned to act against U.S. or allied interests, to support friendly governments or factions, and act against Sunni extremist movements. Several African countries have claimed to disrupt purportedly IRGC-QF-backed arms trafficking or terrorism plots. In May 2013, a court in Kenya found two Iranian men guilty of planning to carry out bombings in Kenya, apparently against Israeli targets. In December 2016, two Iranians and a Kenyan who worked for Iran's embassy in Nairobi were charged with collecting information for a terrorist act after filming the Israeli embassy in that city. Senegal cut diplomatic ties with Iran between 2011 and 2013 after claiming that Iran had trafficked weapons to its domestic separatist insurgency. "], "subsections": [{"section_title": "Sudan", "paragraphs": ["Iran's relations with the government of Sudan, which were extensive since the early 1990s, have diminished substantially since 2014 as Sudan has moved closer to Iran's rivals, Saudi Arabia and the UAE. Sudan, like Iran, is still named by the United States as a state sponsor of terrorism, although U.S. officials have praised the country's counterterrorism cooperation in recent years, possibly to the point where the Administration might decide to remove Sudan from the terrorism list. Iran's relations with Sudan provided Iran with a channel to supply weapons to Hamas and other pro-Iranian groups in the Gaza Strip. The relationship began in the 1990s when Islamist leaders in Sudan, who came to power in 1989, welcomed international Islamist movements to train and organize there. Iran began supplying Sudan with weapons it used on its various fronts, such as in its internal conflicts with rebels in what is now South Sudan as well as in the Darfur region, and the IRGC-QF reportedly armed and trained Sudanese forces, including the Popular Defense Force militia. Iranian pilots reportedly assisted Sudan's air force, and Iran's naval forces periodically visited Port Sudan. Iran also reportedly played a key role in helping Sudan build its own military industry. Israel repeatedly accused Iran of shipping weapons bound for Gaza through Sudan and, at times, took military action against sites in Sudan that Israel asserted were being used by Iran to arm Hamas. ", "However, because Sudan is inhabited by Sunni Arabs, it has always been considered susceptible to overtures from Saudi Arabia and other GCC countries to distance itself from Iran. Since 2014, Saudi and UAE economic assistance to and investment in Sudan have caused Sudan to realign. In September 2014, the Sudan government closed all Iranian cultural centers in Sudan and expelled the cultural attach\u00e9 and other Iranian diplomats on the grounds that Iran was using its facilities and personnel in Sudan to promote Shia Islam. In March 2015, Sudan joined the Saudi-led Arab coalition against the Houthis in Yemen, appearing to confirm that Sudan has significantly downgraded its strategic relations with Iran. In December 2015, Sudan joined the Saudi-led antiterrorism coalition discussed earlier. In January 2016, Sudan severed ties with Iran in connection with the Saudi execution of Nimr."], "subsections": []}]}, {"section_title": "Outlook", "paragraphs": ["Key questions include whether, and if so, how, U.S. actions might alter Iran's behavior, and whether the United States and Iran are on a collision course toward armed conflict. To date, no U.S. strategy, by any Administration, has reduced Iran's inclination to intervene in the region or otherwise try to enhance its regional influence. Trump Administration officials asserted that the sanctions relief of the JCPOA enabled Iran to increase its regional malign activities, and that pulling out of the accord and reimposing sanctions were required. However, it can be argued that the level of Iran's regional influence is linked more to opportunities provided by the region's conflicts than to the level of Iran's financial resources. Whereas deployments of additional U.S. military force to the region might deter some Iranian actions, U.S. buildups arguably have never caused Iran to alter its fundamental regional strategies. ", "As noted throughout, Administration efforts against Iran included imposition of sanctions on various Iranian activities; provision of advice, training, and counterterrorism assistance to regional leaders and groups who seek to limit Iranian influence; and deployment of U.S. forces to intercept Iranian weapons shipments and deter Iranian ground action. Additional U.S. pressure on Iran\u2014particularly if such pressure involves military action\u2014could embroil the United States more deeply in regional conflicts. ", "Those who argue that Iran is an increasingly challenging regional actor maintain the following: ", "Iran is likely to continue to supply its regional allies and proxies with larger quantities of and more accurate weaponry, including short-range missiles. Iran might, through its allies and proxies in Syria and Iraq, succeed in establishing a secure land corridor extending from Iran to Lebanon and in pressuring Israel from the Syrian border as well as the Lebanese border. The potential for major Iran-Israel conflict in Syria is significant. A further prolongation of the intra-GCC rift could complicate U.S. efforts to contain Iran militarily and hinder U.S. military operations in the region. The lifting of the U.N. ban on arms sales to Iran in October 2020 will enable Iran to modernize its armed forces, possibly to the point where it can move ground forces across waterways such as the Strait of Hormuz. Iran could further increase its assistance to hardline opposition factions in Bahrain, which has apparently been limited to date to only small, militant underground groups. Iran might succeed in emerging as a major regional energy and trading hub, both within and outside its participation in China's BRI initiative, potentially expanding Iran's political influence to an even greater extent. Various regional powers might establish or expand military cooperation with Iran, a development that could strengthen Iran's conventional capabilities.", "On the other hand, in order to preserve at least some multilateral sanctions relief and avoid the potential for confrontation, Iran might be induced to accept regional settlements that benefit U.S. and allied interests. Those who take this view argue the following: ", "Iran might be induced to cooperate in identifying an alternative to Asad in Syria that attenuates the civil conflict and permits Iran to draw down its forces. Iran might be persuaded to curtail its delivery of additional long-range rockets or other military equipment to Hezbollah and Hamas, although Iran is unlikely under any circumstances to reduce its political support for Hezbollah. Iran might support a political solution in Yemen that gives the Houthis less influence in a new government than they are demanding. Iran and the UAE might resolve their territorial dispute. Iran might gain admission to the SCO and cooperate more systematically with its members against the Islamic State or other terrorist organizations. Iran might seek to finalize regional economic projects, including development of oil and gas fields in the Caspian Sea; gas pipeline linkages between Iran and Kuwait, Bahrain, Oman, and Pakistan; and transportation routes to China. ", "Domestic Iranian factors could cause Iran's foreign policy to shift. For example: ", "Protests that have taken place since late 2017 could escalate and cause the regime to reduce the scope of its interventions, cut its defense budget, or limit its missile development program. If unrest escalates dramatically and the regime loses power, Iran's foreign policy could shift dramatically, likely becoming far more favorable to U.S. interests. ", "The departure from the scene of the Supreme Leader could change Iran's foreign policy sharply, depending on the views of his successor."], "subsections": []}]}}
{"id": "RS22478", "title": "Navy Ship Names: Background for Congress", "released_date": "2019-05-06T00:00:00", "summary": ["Names for Navy ships traditionally have been chosen and announced by the Secretary of the Navy, under the direction of the President and in accordance with rules prescribed by Congress. Rules for giving certain types of names to certain types of Navy ships have evolved over time. There have been exceptions to the Navy's ship-naming rules, particularly for the purpose of naming a ship for a person when the rule for that type of ship would have called for it to be named for something else. Some observers have perceived a breakdown in, or corruption of, the rules for naming Navy ships. On July 13, 2012, the Navy submitted to Congress a 73-page report on the Navy's policies and practices for naming ships.", "For ship types now being procured for the Navy, or recently procured for the Navy, naming rules can be summarized as follows:", "The first Ohio replacement ballistic missile submarine (SSBN-826) has been named Columbia in honor of the District of Columbia, but the Navy has not stated what the naming rule for these ships will be. Virginia (SSN-774) class attack submarines are being named for states. Aircraft carriers are generally named for past U.S. Presidents. Of the past 14, 10 were named for past U.S. Presidents, and 2 for Members of Congress. Destroyers are being named for deceased members of the Navy, Marine Corps, and Coast Guard, including Secretaries of the Navy. The Navy has not yet announced a naming rule for its planned new class of FFG(X) frigates, the first of which the Navy wants to procure in FY2021. Previous classes of U.S. Navy frigates, like Navy destroyers, were generally named for naval leaders and heroes. Littoral Combat Ships (LCSs) are being named for regionally important U.S. cities and communities. Amphibious assault ships are being named for important battles in which U.S. Marines played a prominent part, and for famous earlier U.S. Navy ships that were not named for battles. San Antonio (LPD-17) class amphibious ships are being named for major U.S. cities and communities, and cities and communities attacked on September 11, 2001. John Lewis (TAO-205) class oilers are being named for people who fought for civil rights and human rights. Expeditionary Fast Transports (EPFs) are being named for small U.S. cities. Expeditionary Transport Docks (ESDs) and Expeditionary Sea Bases (ESBs) are being named for famous names or places of historical significance to U.S. Marines. Navajo (TATS-6) class towing, salvage, and rescue ships are being named for prominent Native Americans or Native American tribes.", "Since 1974, at least 21 U.S. military ships have been named for persons who were living at the time the name was announced. The most recent instance occurred on May 6, 2019, when the Navy announced that it was naming the destroyer DDG-51 for former Senator Sam Nunn.", "Members of the public are sometimes interested in having Navy ships named for their own states or cities, for older U.S. Navy ships (particularly those on which they or their relatives served), for battles in which they or their relatives participated, or for people they admire.", "Congress has long maintained an interest in how Navy ships are named, and has influenced the naming of certain Navy ships. The Navy suggests that congressional offices wishing to express support for proposals to name a Navy ship for a specific person, place, or thing contact the office of the Secretary of the Navy to make their support known. Congress may also pass legislation relating to ship names. Measures passed by Congress in recent years regarding Navy ship names have all been sense-of-the-Congress provisions."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Background", "paragraphs": [], "subsections": [{"section_title": "Navy's Authority and Process for Naming Ships", "paragraphs": [], "subsections": [{"section_title": "Authority for Naming Ships", "paragraphs": ["Names for Navy ships traditionally have been chosen and announced by the Secretary of the Navy, under the direction of the President and in accordance with rules prescribed by Congress. For most of the 19 th century, U.S. law included language explicitly assigning the Secretary of the Navy the task of naming new Navy ships. The reference to the Secretary of the Navy disappeared from the U.S. Code in 1925. The code today (10 U.S.C. \u00a78662) is silent on the issue of who has the authority to name new Navy ships, but the Secretary of the Navy arguably retains implicit authority, given the location of Section 8662 in subtitle C of Title 10, which covers the Navy and Marine Corps."], "subsections": []}, {"section_title": "Process for Selecting Names", "paragraphs": ["In discussing its name-selection process, the Naval History and Heritage Command\u2014the Navy's in-house office of professional historians\u2014cites the above-mentioned laws and states the following:", "As with many other things, the procedures and practices involved in Navy ship naming are as much, if not more, products of evolution and tradition than of legislation. As we have seen, the names for new ships are personally decided by the Secretary of the Navy. The Secretary can rely on many sources to help him reach his decisions. Each year, the Navy History and Heritage Command (NHHC) compiles primary and alternate ship name recommendations and forwards these to the Chief of Naval Operations by way of the chain of command. These recommendations are the result of research into the history of the Navy and by suggestions submitted by service members, Navy veterans, and the public. Ship name source records at NHHC reflect the wide variety of name sources that have been used in the past, particularly since World War I. Ship name recommendations are conditioned by such factors as the name categories for ship types now being built, as approved by the Secretary of the Navy; the distribution of geographic names of ships of the fleet; names borne by previous ships that distinguished themselves in service; names recommended by individuals and groups; and names of naval leaders, national figures, and deceased members of the Navy and Marine Corps who have been honored for heroism in war or for extraordinary achievement in peace.", "In its final form, after consideration at the various levels of command, the Chief of Naval Operations signs the memorandum recommending names for the current year's building program and sends it to the Secretary of the Navy. The Secretary considers these nominations, along with others he receives, as well as his own thoughts in this matter. At appropriate times, he selects names for specific ships and announces them.", "While there is no set time for assigning a name, it is customarily done before the ship is christened. The ship's sponsor\u2500the person who will christen the ship\u2500is also selected and invited by the Secretary. In the case of ships named for individuals, an effort is made to identify the eldest living direct female descendant of that individual to perform the role of ship's sponsor. For ships with other name sources, it is customary to honor the wives of senior naval officers or public officials.", "A July 2012 Navy report to Congress on the Navy's policies and practices for naming ships (see next section) states the following:", "Once a type/class naming convention [i.e., a general rule or guideline for how ships of a certain type or class are to be named] is established, Secretaries can rely on many sources to help in the final selection of a ship name. For example, sitting Secretaries can solicit ideas and recommendations from either the Chief of Naval Operations (CNO) or the Commandant of the Marine Corps (CMC), or both. They can also task the Naval Heritage and History Command to compile primary and alternate ship name recommendations that are the result of research into the history of the Navy's battle force or particular ship names. Secretaries also routinely receive formal suggestions for ship names from concerned citizens, active and retired service members, or members of Congress. Finally, Congress can enact provisions in Public Law that express the sense of the entire body about new ship naming conventions or specific ship names. Regardless of the origin of the recommendations, however, the final selection of a ship's name is the Secretary's to make, informed and guided by his own thoughts, counsel, and preferences. At the appropriate time\u2014normally sometime after the ship has been either authorized or appropriated by Congress and before its keel laying or christening\u2014the Secretary records his decision with a formal naming announcement."], "subsections": []}, {"section_title": "July 2012 Navy Report to Congress", "paragraphs": ["On July 13, 2012, the Navy submitted to Congress a 73-page report on the Navy's policies and practices for naming ships. The report was submitted in response to Section 1014 of the FY2012 National Defense Authorization Act ( H.R. 1540 / P.L. 112-81 of December 31, 2011). The executive summary of the Navy's report is reprinted here as Appendix A ."], "subsections": []}, {"section_title": "Overview of Naming Rules for Ship Types", "paragraphs": [], "subsections": [{"section_title": "Evolution Over Time", "paragraphs": ["Rules for giving certain types of names to certain types of Navy ships have evolved over time. Attack submarines, for example, were once named for fish, then later for cities, and most recently for states, while cruisers were once named for cities, then later for states, and most recently for battles. State names, to cite another example, were given to battleships, then later to nuclear-powered cruisers and ballistic missile submarines, and are now being given to attack submarines. ", "The Naval History and Heritage Command states the following: \"How will the Navy name its ships in the future? It seems safe to say that the evolutionary process of the past will continue; as the fleet itself changes, so will the names given to its ships. It seems equally safe, however, to say that future decisions in this area will continue to demonstrate regard for the rich history and valued traditions of the United States Navy.\" The July 2012 Navy report to Congress states that \"US Navy ship-naming policies, practices, and 'traditions' are not fixed; they evolve constantly over time.\" The report also states that \"Just as [ship] type naming conventions change over time to accommodate technological change as well as choices made by Secretaries, they also change over time as every Secretary makes their own interpretation of the original naming convention.\""], "subsections": []}, {"section_title": "Exceptions", "paragraphs": ["There have been numerous exceptions to the Navy's ship-naming rules, particularly for the purpose of naming a ship for a person when the rule for that type of ship would have called for it to be named for something else. The July 2012 report to Congress cites exceptions to ship naming rules dating back to the earliest days of the republic, and states that \"a Secretary's discretion to make exceptions to ship-naming conventions is one of the Navy's oldest ship-naming traditions.\" The report argues that exceptions made for the purpose of naming ships for Presidents or Members of Congress have occurred frequently enough that, rather than being exceptions, they constitute a \"special cross-type naming convention\" for Presidents and Members of Congress. This CRS report continues to note, as exceptions to basic class naming rules, instances where ships other than aircraft carriers have been named for Presidents or Members of Congress.", "Some observers have perceived a breakdown in, or corruption of, the rules for naming Navy ships. Such observers might cite, for example, the three-ship Seawolf (SSN-21) class of attack submarines\u2014 Seawolf (SSN-21), Connecticut (SSN-22), and Jimmy Carter (SSN-23)\u2014which were named for a fish, a state, and a President, respectively, reflecting no apparent class naming rule. The July 2012 Navy report to Congress states the following: \"Current ship naming policies and practices fall well within the historic spectrum of policies and practices for naming vessels of the Navy, and are altogether consistent with ship naming customs and traditions.\""], "subsections": []}]}]}, {"section_title": "Rules for Ship Types Now Being Procured or Recently Procured", "paragraphs": ["For ship types now being procured for the Navy, or recently procured for the Navy, naming rules (and exceptions thereto) are summarized below. The July 2012 Navy report to Congress discusses current naming rules (and exceptions thereto) at length."], "subsections": [{"section_title": "Ballistic Missile Submarines (SSBNs)", "paragraphs": ["On December 14, 2016, the Navy named the first of its 12 planned next-generation ballistic missile submarines Columbia (SSBN-826), in honor of the District of Columbia. The 12 planned boats are consequently now referred to as Columbia -class or SSBN-826 class boats. The Navy has not stated what the naming rule for these ships will be. Given the selection of Columbia as the name of the lead ship, possibilities for the naming rule include (but are not necessarily limited to) cities, capital cities, or states and federal districts and territories. It is also possible that the name Columbia will turn out to be an exception to the naming rule for the class.", "The current USS Columbia (SSN-771)\u2014a Los Angeles (SSN-688) class attack submarine that was named for Columbia, SC; Columbia, IL; and Columbia, MO \u2014entered service in 1995 and will reach the end of its 33-year expected service life in 2028, at about the time that construction of SSBN-826 is scheduled to be completed. If the service life of SSN-771 is extended for several years, it would remain in service after the commissioning of SSBN-826. This would create an issue to be resolved, since 10 U.S.C. \u00a78662(a) states, \"Not more than one vessel of the Navy may have the same name.\" One possible step for resolving such an issue would be to change the name of SSBN-826 to something else, such as District of Columbia \u2014a step that could be viewed as somewhat similar to the below-discussed instance in which the name of the Los Angles-class submarine SSN-705 was changed from Corpus Christi to City of Corpus Christi (see \" Congressional Responses to Announced Navy Ship-Naming Decisions \" below)."], "subsections": []}, {"section_title": "Attack Submarines (SSNs)", "paragraphs": ["Virginia (SSN-774) class attack submarines are being named for states. An exception occurred on January 8, 2009, when then-Secretary of the Navy Donald Winter announced that SSN-785 would be named for former Senator John Warner. Another exception occurred on January 9, 2014, when then-Secretary of the Navy Ray Mabus announced that SSN-795, the second of the two Virginia-class boats procured in FY2015, would be named for Admiral Hyman G. Rickover, who served for many years as director of the Navy's nuclear propulsion program. ", "As of May 6, 2019, the Navy has announced names for all Virginia-class boats through SSN-801, the second of two Virginia-class boats procured in FY2018.", "A total of 30 Virginia-class boats have been procured through FY2019, of which 26 have been named for states. (Two were named for people and the two procured in FY2019 have not yet been named.) The Navy's shipbuilding plan calls for procuring three additional Virginia-class boats in FY2020 and two per year FY2021 and subsequent years. The 26 state-named Virginia-class boats procured through FY2018, together with the additional Virginia-class boats planned for procurement in FY2020 and subsequent years and the 17 existing state-named Ohio (SSBN-726) class SSBNs and cruise missile submarine (SSGNs), could make for a total of more than 50 boats starting around FY2022. Thus, starting around FY2022, the Navy might run out of state names for Virginia-class boats, and consequently might need to either amend the Virginia-class naming rule or begin making a series of exceptions to the rule."], "subsections": []}, {"section_title": "Aircraft Carriers (CVNs)", "paragraphs": ["The July 2012 Navy report to Congress states that \"while carrier names are still 'individually considered,' they are now generally named in honor of past US Presidents.\" Of the 14 most recently named aircraft carriers (those with hull numbers 67 through 80), 10 have been named for U.S. Presidents and 2 for Members of Congress.", "The Navy is currently procuring Gerald R. Ford (CVN-78) class carriers. On January 16, 2007, the Navy announced that CVN-78, the lead ship in the CVN-78 class, would be named for President Gerald R. Ford. On May 29, 2011, the Navy announced that CVN-79, the second ship in the class, would be named for President John F. Kennedy. On December 1, 2012, the Navy announced that CVN-80, the third ship in the class, would be named Enterprise . The Navy made the announcement on the same day that it deactivated the 51-year-old aircraft carrier CVN-65, also named Enterprise . CVN-80 is the ninth Navy ship named Enterprise . CVN-80 was procured in the FY2018 budget, which Congress considered in 2017. If CVN-80, like most Navy ships, had been named at about the time of procurement, or later, rather than in 2012, it would have been named by the current Secretary of the Navy, Richard Spencer. The July 2012 Navy report to Congress, which was produced when Ray Mabus was the Secretary of the Navy, states that", "Secretary [of the Navy Ray] Mabus values the ability to consider [aircraft] carrier names on an individual, case\u2010by\u2010case basis, for two reasons. First, it will allow a future Secretary to name a future fleet aircraft carrier for someone or something other than a former President. Indeed, Secretary Mabus has a particular name in mind. With the scheduled decommissioning of USS Enterprise (CVN 65), perhaps the most famous ship name in US Navy history besides USS Constitution will be removed from the Naval Vessel Register. Secretary Mabus believes this circumstance could be remedied by bestowing the Enterprise's storied name on a future carrier.", "Prior to the naming of CVN-80, the most recent carrier that was not named for a President or Member of Congress was the second of the 14 most recently named carriers, Nimitz (CVN-68), which was procured in FY1967."], "subsections": []}, {"section_title": "Destroyers (DDGs)", "paragraphs": [], "subsections": [{"section_title": "In General", "paragraphs": ["Destroyers traditionally have been named for famous U.S. naval leaders and distinguished heroes. The July 2012 Navy report to Congress discusses this tradition and states more specifically that destroyers are being named for deceased members of the Navy, Marine Corps, and Coast Guard, including Secretaries of the Navy. Exceptions since 2012 (all of which involve Arleigh Burke [DDG-51] class destroyers) include the following:", "On May 7, 2012, the Navy announced that it was naming DDG-116 for a living person, Thomas Hudner. On May 23, 2013, the Navy announced that it was naming DDG-117 for a living person, Paul Ignatius, and that it was naming DDG-118 for the late Senator Daniel Inouye, who served in the U.S. Army during World War II. On March 31 and April 5, 2016, it was reported that the Navy was naming DDG-120 for a living person, former Senator Carl Levin. On July 28, 2016, the Navy announced that it was naming DDG-124 for a living person, Harvey C. Barnum Jr. On July 11, 2018, Secretary of the Navy Richard Spencer announced that the Navy was expanding the name of the destroyer John. S. McCain (DDG-56) to include a living person, Senator John S. McCain III (for additional discussion, see the next section below). On May 6, 2019, the Navy announced that it was naming DDG-133 for a living person, former Senator Sam Nunn, who had served in the Coast Guard from 1959 to 1960, and in the Coast Guard Reserve from 1960 until 1968 (for additional discussion, see the section following the next section).", "As of May 6, 2019, the Navy had announced names for all DDG-51 class destroyers procured through DDG-131, the second of three DDG-51s procured in FY2019, and DDG-133, one of three DDG-51s requested for procurement in FY2020."], "subsections": []}, {"section_title": "July 11, 2018, Expansion of DDG-56's Name to Include Senator McCain", "paragraphs": ["On July 11, 2018, Secretary of the Navy Richard Spencer announced that the Navy was expanding the name of the destroyer John. S. McCain (DDG-56), originally named for Admiral John S. \"Slew\" McCain (1884-1945) and his son, Admiral John S. \"Jack\" McCain, Jr. (1911-1981), to also include Senator John S. McCain III, the grandson of Admiral John S. McCain and the son of Admiral John S. McCain, Jr. DDG-56 was procured in FY1989 and was commissioned into service on July 2, 1994. John S. McCain III served as a Member of the House of Representatives from 1983 to 1987, and as a Senator from 1987 to 2018. Among his committee chairmanships, he was the chairman of the Senate Armed Services Committee from January 3, 2015, until his death on August 25, 2018. He was the Republican Party candidate for President in 2008."], "subsections": []}, {"section_title": "May 6, 2019, Naming of DDG-133 for former Senator Sam Nunn", "paragraphs": ["On May 6, 2019, the Navy announced that it was naming DDG-133 for former Senator Sam Nunn. Nunn served in the Coast Guard from 1959 to 1960, and in the Coast Guard Reserve from 1960 until 1968. He was a Senator from 1972 to 1997. During his time in the Senate, he was, among other things, the Chairman of the Senate Armed Services Committee from January 1987 to January 1995."], "subsections": []}]}, {"section_title": "Frigates (FFG[X]s)", "paragraphs": ["The Navy in 2017 initiated a new program, called the FFG(X) program, to build a class of 20 guided-missile frigates (FFGs). The Navy wants to procure the first FFG(X) in FY2020, the second in FY2021, and the remaining 18 at a rate of two per year in FY2022-FY2030. As of May 6, 2019, the Navy had not announced a naming rule for this planned new class of ships. Previous classes of U.S. Navy frigates, like Navy destroyers, were generally named for naval leaders and heroes."], "subsections": []}, {"section_title": "Littoral Combat Ships (LCSs)", "paragraphs": ["Littoral Combat Ships (LCSs) were at first named for U.S. mid-tier cities, small towns, and other U.S. communities. The naming rule was later adjusted to regionally important U.S. cities and communities. An exception occurred on February 10, 2012, when the Navy announced that it was naming LCS-10 for former Representative Gabrielle Giffords.", "Another exception occurred on February 23, 2018, when President Trump, in a press conference with Australian Prime Minister Malcolm Turnbull, announced that an LCS would be named Canberra , in honor of HMAS Canberra (D33), an Australian cruiser named for the capital city of Australia that fought alongside U.S. Navy forces World War II and was scuttled after being damaged by Japanese attack in the Battle of Savo Island on August 9, 1942. The Navy has identified the LCS to be named Canberra as LCS-30. A previous U.S. Navy ship, the gun cruiser Canberra (CA-70), which served from 1943 to 1947 and again from 1956 to 1970, was similarly named in honor of HMAS Canberra . There is also a current HMAS Canberra (L02), an amphibious assault ship (i.e., helicopter carrier) that entered service in 2014 and now serves as the flagship of the Australian navy. The situation of LCS-30 and L02 sharing the same name will presumably not violate 10 U.S.C. \u00a78662(a)\u2014which states that \"not more than one vessel of the Navy may have the same name\"\u2014because 10 U.S.C. \u00a78662 is a statute governing the naming of U.S. Navy ships and L02 is not a U.S. Navy ship.", "As of May 6, 2019, the Navy had posted or announced names for all LCSs up through LCS-30, plus LCS-32, LCS-34, LCS-36, and LCS-38. The Navy also announced on October 9, 2018, that one additional LCS would be named for Cleveland, OH, but the Navy did not specify which LCS would receive this name.", "A total of 35 LCSs have been procured through FY2019. In addition to LCSs 1-30, 32, 34, 36, and 38, the Navy has identified the 35 th LCS as LCS-31. As of May 6, 2019, this ship was listed by the Navy as having no name. The Navy does not want to procure any more LCSs beyond the 35 that have been procured. If no additional LCSs are procured beyond the 35 that have been procured, LCS-31 will be the last LCS to be named. Given the Navy's October 9, 2018, announcement that one additional LCS would be named for Cleveland, OH, it is possible the Navy will name LCS-31 for Cleveland."], "subsections": []}, {"section_title": "Amphibious Assault Ships (LHAs)", "paragraphs": ["Amphibious assault ships (LHAs), which look like medium-sized aircraft carriers, are being named for important battles in which U.S. Marines played a prominent part, and for famous earlier U.S. Navy ships that were not named for battles. The Navy announced on June 27, 2008, that the first LHA-6 class amphibious assault ship, LHA-6, would be named America , a name previously used for an aircraft carrier (CV-66) that served in the Navy from 1965 to 1996. The Navy announced on May 4, 2012, that LHA-7, the second ship in the class, LHA-7, would be named Tripoli , the location of famous Marine battles in the First Barbary War. The Navy reaffirmed this name selection with a more formal announcement on May 30, 2014. On November 9, 2016, the Navy announced that the third ship in the class, LHA-8, will be named Bougainville , the location of a famous World War II campaign in the Pacific."], "subsections": []}, {"section_title": "Amphibious Ships (LPDs)", "paragraphs": ["San Antonio (LPD-17) class amphibious ships are being named for major U.S. cities and communities (with major being defined as being one of the top three population centers in a state), and cities and communities attacked on September 11, 2001. An exception occurred on April 23, 2010, when the Navy announced that it was naming LPD-26, the 10 th ship in the class, for the late Representative John P. Murtha. Another exception occurred on May 2, 2018, when the Navy announced that it was naming LPD-29, the 13 th ship in the class, for Navy Captain Richard M. McCool, Jr., who received the Medal of Honor for his actions in World War II and later served in the Korean and Vietnam wars. As of May 6, 2019, the Navy had not announced a name for LPD-30, which was funded in FY2018, and which is to be the first of a new version, or flight, of the LPD-17 class design called the LPD-17 Flight II design."], "subsections": []}, {"section_title": "Oilers (TAOs)", "paragraphs": ["On January 6, 2016, then-Secretary of the Navy Ray Mabus announced that the Navy's new oilers will be named for \"people who fought for civil rights and human rights,\" and that the first ship in the class, TAO-205, which was procured in FY2016, will be named for Representative John Lewis. The ships in this class consequently are now referred to as John Lewis (TAO-205) class ships. The Navy wants to procure a total of 20 John Lewis-class ships.", "On July 28, 2016, it was reported that the Navy would name the second through sixth ships in the class (i.e., TAOs 206 through 210) for Harvey Milk, Earl Warren, Robert F. Kennedy, Lucy Stone, and Sojourner Truth, respectively. All these names were later posted by the Navy for these ships."], "subsections": []}, {"section_title": "Dry Cargo and Ammunition Ships (TAKEs)", "paragraphs": ["The Navy's 14 Lewis and Clark (TAKE-1) class cargo and ammunition ships were named for famous American explorers, trailblazers, and pioneers. The Navy announced on October 9, 2009, that the 13 th ship in the class was being named for the civil rights activist Medgar Evers. The Navy announced on May 18, 2011, that the 14 th ship in the class would be named for civil rights activist Cesar Chavez."], "subsections": []}, {"section_title": "Expeditionary Fast Transports (EPFs)", "paragraphs": ["Expeditionary Fast Transports (EPFs), which until May 2011 were being procured by the Army as well as by the Navy, were at first named for American traits and values. In December 2009, the naming rule for EPFs was changed to small U.S. cities. At some point between December 2010 and October 2011, it was adjusted to small U.S. cities and counties. As of May 6, 2019, the Navy had posted names for all EPFs through EPF-12, which was procured in FY2016. A 13 th EPF was funded by Congress in FY2018, and a 14 th was funded by Congress in FY2019."], "subsections": []}, {"section_title": "Expeditionary Transport Docks (ESDs) and Expeditionary Sea Bases (ESBs)", "paragraphs": ["The Navy's two Expeditionary Transport Docks (ESDs 1 and 2) and its Expeditionary Sea Bases (ESB 3 and higher) are being named for famous names or places of historical significance to U.S. Marines. Two of these ships have been named for living persons\u2014ESD-2, which was named John Glenn , and ESB-4, which was named for Hershel \"Woody\" Williams.", "On November 4, 2017, Secretary of the Navy Richard Spencer announced that the third ESB (ESB-5), which was procured in FY2016, would be named for Marine Corps Vietnam veteran and Medal of Honor recipient Lance Corporal Miguel Keith. This was Spencer's first announced naming of a Navy ship. A fourth ESB (ESB-6) was procured in FY2018, and a fifth (ESB-7) was procured in FY2019. Navy plans calls for procuring a total of six ESBs."], "subsections": []}, {"section_title": "Towing, Salvage, and Rescue Ships (TATSs)", "paragraphs": ["On March 12, 2019, the Navy announced that that TATS-6, the first ship in a new class of towing, salvage, and rescue ships (TATSs), would be named Navajo, \"in honor of the major contributions that the Navajo people have made to the armed forces,\" and that ships in this class will be named for prominent Native Americans or Native American tribes."], "subsections": []}]}, {"section_title": "Aspects of Navy Ship Names", "paragraphs": [], "subsections": [{"section_title": "State Names Not Used in a Long Time\u2014Particularly Kansas", "paragraphs": ["It has been a long time since ships named for certain states were last in commissioned service with the Navy as combat assets. While there is no rule requiring the Navy, in selecting state names for ships, to choose states for which the most time has passed since a ship named for the state has been in commissioned service with the Navy as a combat asset, advocates of naming a ship for a certain state may choose to point out, among other things, the length of time that has transpired since a ship named for the state has been in commissioned service with the Navy as a combat asset.", "In its announcement of April 13, 2012, that the Navy was naming the Virginia class attack submarines SSNs 786 through 790 for Illinois, Washington, Colorado, Indiana, and South Dakota, respectively, the Department of Defense stated, \"None of the five states has had a ship named for it for more than 49 years. The most recent to serve was the battleship Indiana, which was decommissioned in October 1963.\" The July 2012 Navy report to Congress states the following: \"Before deciding on which names to select [for the five submarines], [then-]Secretary [of the Navy Ray] Mabus asked for a list of State names that had been absent the longest from the US Naval Register....\"", "In its announcement of November 19, 2012, that the Navy was naming the Virginia class attack submarine SSN-791 for Delaware, the Department of Defense quoted then-Secretary Mabus as saying, \"It has been too long since there has been a USS Delaware in the fleet....\"", "A Navy News Service article about the Navy's September 18, 2014, announcement that the Virginia class attack submarine SSN-792 was being named for Vermont stated that \"This is the first ship named for Vermont since 1920[,] when the second USS Vermont was decommissioned.\"", "A Navy News Service article about the Navy's October 10, 2014, announcement that the Virginia class attack submarine SSN-793 was being named for Oregon stated that the previous USS Oregon \"was a battleship best known for its roles in the Spanish American War when it helped destroy Admiral Cervera's fleet and in the Philippine-American War; it performed blockade duty in Manila Bay and off Lingayen Gulf, served as a station ship, and aided in the capture of Vigan.\"", "A Navy News Service article about the Navy's January 19, 2016, announcement that the Virginia-class attack submarine SSN-801 was being named for Utah stated, \"The future USS Utah will be the second naval vessel to bear the name; the first, a battleship designated BB-31, was commissioned in 1911 and had a long, honorable time in service.... While conducting anti-gunnery exercises in Pearl Harbor, BB-31 was struck by a torpedo and capsized during the initial stages of the Japanese attack [on December 7, 1941]. She was struck from the Navy record Nov. 13, 1944 and received a battle star for her service in World War I.\"", "The Navy's naming announcements for Virginia-class submarines have reduced the group of states for which several decades had passed since a ship named for the state had been in commissioned service with the Navy as a combat asset, and for which no ship by that name is currently under construction. This group used to include Illinois, Delaware, Vermont, Oregon, and Montana, but Virginia-class attack submarines have now been named for these states. (See the Virginia-class attack submarine naming announcements of April 13, 2012; November 19, 2012; September 18, 2014; October 10, 2014; and September 2, 2015, respectively.)", "As shown in Table 1 , the three states for which the most time now appears to have passed since a ship named for the state has been in commissioned service with the Navy as a combat asset, and for which no ship by that name is currently under construction, are Kansas, Arizona, and Oklahoma. As of May 6, 2019, it has been more than 97 years since the decommissioning on December 16, 1921, of the battleship Kansas (BB-21), the most recent ship named for the state of Kansas that was in commissioned service with the Navy as a combat asset.", "As discussed earlier in the section on rules for naming SSNs, starting around FY2022, the Navy might run out of state names for Virginia-class boats, and consequently might need to either amend the Virginia-class naming rule or begin making a series of exceptions to the rule."], "subsections": []}, {"section_title": "Ships Named for Living Persons", "paragraphs": ["The Navy historically has only rarely named ships for living persons, meaning (throughout this CRS report) persons who were living at the time the name was announced. The Navy stated in February 2012 that", "The Navy named several ships for living people (ex. George Washington, Ben Franklin, etc.) in the early years of our Republic. The Naval History and Heritage Command (NHHC) believes that the last ship to be named by the Navy in honor of a living person prior to [the aircraft carrier] CARL VINSON (CVN-70) was the brig JEFFERSON (launched in April 1814). Between 1814 and November 18, 1973, when President Nixon announced the naming of CARL VINSON, NHHC does not believe that any ships had been named for a living person by the Navy as NHHC does not have records that would indicate such.", "The July 2012 Navy report to Congress, noting a case from 1900 that was not included in the above passage, states that", "the practice of naming ships in honor of deserving Americans or naval leaders while they are still alive can be traced all the way back to the Revolutionary War. At the time, with little established history or tradition, the young Continental Navy looked to honor those who were fighting so hard to earn America's freedom. Consequently, George Washington had no less than five ships named for him before his death; John Adams and James Madison, three apiece; John Hancock, two; and Benjamin Franklin, one. ", "The practice of naming ships after living persons was relatively commonplace up through 1814, when a US Navy brig was named in honor of Thomas Jefferson. However, after the War of 1812, with the US Navy older and more established, and with the list of famous Americans and notable naval heroes growing ever longer, the practice of naming ships after living persons fell into disuse. Indeed, the only exception over the next 150 years came in 1900, when the Navy purchased its first submarine from its still living inventor, John Philip Holland, and Secretary of the Navy John D. Long named her USS Holland (SS 1) in his honor....", "[In the early 1970s], however, Department of the Navy leaders were considering the name for CVN 70. Secretary of the Navy John Warner knew the 93 rd Congress had introduced no less than three bills or amendments (none enacted) urging that CVN 70 be named for in honor of Carl Vinson, who served in the House for 50 years and was known as the \"Father of the Two-Ocean Navy.\" Although Secretary Warner felt Congressman Vinson was more than worthy of a ship name, the former Congressman was still alive. Naming a ship for this giant of naval affairs would therefore violate a 160-year old tradition. After considering the pros and cons of doing so, Secretary Warner asked President Richard Nixon's approval to name CVN 70 for the 90-year old statesman. President Nixon readily agreed. Indeed, he personally announced the decision on January 18, 1974....", "In hindsight, rather than this decision being a rare exception, it signaled a return to the Continental Navy tradition of occasionally honoring famous living persons with a ship name. Since then, and before the appointment of current Secretary [now then-Secretary] of the Navy Ray Mabus, Secretaries of the Navy have occasionally chosen to follow this new, \"old tradition,\" naming ships in honor of still living former Presidents Jimmy Carter, Ronald Reagan, George H.W. Bush, and Gerald R. Ford; Secretary of the Navy Paul Nitze; Navy Admirals Hyman G. Rickover, Arleigh Burke, and Wayne E. Meyer; Senators John C. Stennis and John Warner; and famous entertainer Bob Hope. Moreover, it is important to note that three of these well-known Americans\u2014Gerald R. Ford, John C. Stennis, and Bob Hope\u2014were so honored after Congress enacted provisions in Public Laws urging the Navy to do so. By its own actions, then, Congress has acknowledged the practice of occasionally naming ships for living persons, if not outright approved of it.", "In other words, while naming ships after living persons remains a relatively rare occurrence\u2014about three per decade since 1970\u2014it is now an accepted but sparingly used practice for Pragmatic Secretaries [of the Navy] of both parties. For them, occasionally honoring an especially deserving member of Congress, US naval leader, or famous American with a ship name so that they might end their days on earth knowing that their life's work is both recognized and honored by America's Navy-Marine Corps Team, and that their spirit will accompany and inspire the Team in battle, is sometimes exactly the right thing to do.", "As shown in Table 2 , since the naming of CVN-70 for Carl Vinson in 1974, at least 21 U.S. military ships have been named for persons who were living at the time the name was announced. Eight of the 21 were announced between January 2012 and March 2016, including three announced in 2012 and four announced in 2016. In four of the six most-recent instances, the ships were named for current or former Members of Congress. The most recent instance occurred on May 6, 2019, when the Navy announced that it was naming the destroyer DDG-51 for former Senator Sam Nunn. (For further discussion of that naming action, see the earlier section on names for destroyers.)"], "subsections": []}, {"section_title": "Ships Named for Confederate Officers", "paragraphs": ["A June 15, 2017, blog post states the following:", "Four [past U.S. Navy] ships have been named for Confederate officers: the [ballistic missile submarine/attack submarine] USS Robert E. Lee (SSBN-601[/SSN-601]) [commissioned 1960; decommissioned 1983], the [ballistic missile submarine] USS Stonewall Jackson (SSBN-634) [commissioned 1964; decommissioned 1995], the [submarine tender] USS Hunley (AS-31) [commissioned 1962; decommissioned 1994], and the [submarine tender] USS Dixon (AS-37) [commissioned 1971; decommissioned 1995]. H. L. Hunley built the Confederate submarine that sank with him on board before it engaged in combat. A subsequent Confederate submarine was built and named for him. Commanded by George Dixon, the CSS Hunley carried out the world's first submarine attack when it struck the [sloop-of-war] USS Housatonic in February1864.", "Currently in the fleet is the [Ticonderoga (CG-47) class Aegis cruiser] USS Chancellorsville (CG-62) [commissioned 1989], named for Lee's greatest victory over the U.S. Army. Chancellorsville also was the battle in which Gen. Thomas \"Stonewall\" Jackson was mortally wounded by friendly fire.", "The purpose of erecting monuments and naming U.S. ships after Confederates\u2014enemies of the United States\u2014seems to be to recognize their perceived status as noble warriors rather than to remember the cause for which they waged war: the dissolution of the United States to preserve the \"peculiar institution\" of human slavery. This view of history is not shared by millions of Americans who see the monuments to Confederates as glorifying, even justifying the \"lost cause\" and the enslavement of humans.", "Other ships have been named for enemies [of the United States], probably because they were considered \"noble warriors\" too. [The ballistic missile submarine] USS Tecumseh (SSBN-628) [commissioned 1964; decommissioned 1993] and [the harbor tug] USS Osceola (YTB-129) [commissioned 1938; sold for scrapping 1973] were named after American Indian leaders who fought wars against the United States.", "Regarding the Chancellorsville , the Navy states that the cruiser is", "The first U.S. Navy ship named for a Civil War battle fought just south of the Rappahannock and Rapidan Rivers in Virginia (1\u20135 May 1863). Gen. Robert E. Lee, CSA, who led the Confederate Army of Northern Virginia, held Gen. Joseph Hooker, USA, who commanded the Union Army and Department of the Potomac, in position while Lt. Gen. Thomas J. Jackson, CSA, enveloped the Union right flank, surprising and rolling up the Federal's right. Lee's victory, combined with the urgent need to relieve pressure on Vicksburg, Miss., prompted the South's thrust into Pennsylvania that summer, resulting in the pivotal Battle of Gettysburg.", "An August 16, 2017, press report states the following:", "As America churns through a bloody debate over the place Confederate monuments occupy in the modern day United States, a Navy cruiser named in honor of a Confederate Civil War victory is unlikely to see its named changed, a service official said Wednesday [August 16].", "The guided-missile cruiser Chancellorsville [CG-62] was commissioned in 1989 and derives its name from an 1863 battle considered to be the greatest victory of Confederate Gen. Robert E. Lee....", "But a Navy official speaking on the condition of anonymity Wednesday said that even though the Chancellorsville is named after a Confederate victory, the name comes from a battle, not an individual, and soldiers on both sides died.", "The week-long battle resulted in major casualties for both sides\u201413,000 Confederates and 17,000 Union troops, according to the National Parks [sic: Park] Service.", "The Navy official did say, however, that there remains a chance the ship's crest could be altered.", "The predominance of gray in the ship's crest speaks to \"General Robert E. Lee's spectacular military strategies and his dominance in this battle,\" according to the ship's website.", "An inverted wreath also memorializes the Confederacy's second-best known general, Stonewall Jackson, who was mortally wounded in the battle.", "While the rupture of the country during the Civil War is reflected in the crest, it also features Jackson's order to \"press on.\"", "\"Maybe that is worth re-looking at or redoing,\" the official said. \"There's a fine line.\""], "subsections": []}, {"section_title": "Ships Named Several Years Before They Were Procured", "paragraphs": ["In recent years, the Navy on a few occasions has announced names for ships years before those ships were procured. Although announcing a name for a ship years before it is procured is not prohibited, doing so could deprive a future Secretary of the Navy (or, more broadly, a future Administration) of the opportunity to select a name for the ship. It could also deprive Congress of an opportunity to express its sense regarding potential names for a ship, and create a risk of assigning a name to a ship that eventually is not procured for some reason, a situation that could be viewed as potentially embarrassing to the Navy. As noted earlier, the July 2012 Navy report to Congress states the following:", "At the appropriate time\u2014normally sometime after the ship has been either authorized or appropriated by Congress and before its keel laying or christening\u2014the Secretary records his decision with a formal naming announcement.", "At the end of the above passage, there is a footnote (number 3) in the Navy report that states the following:", "Although there is no hard and fast rule, Secretaries most often name a ship after Congress has appropriated funds for its construction or approved its future construction in some way\u2014such as authorization of either block buys or multi-year procurements of a specific number of ships. There are special cases, however, when Secretaries use their discretion to name ships before formal Congressional approval, such as when Secretary John Lehman announced the namesake for a new class of Aegis guided missile destroyers would be Admiral Arleigh Burke, several years before the ship was either authorized or appropriated.", "In connection with the quoted footnote passage immediately above, it can be noted that the lead ship of the DDG-51 class of destroyers was named for Arleigh Burke on November 5, 1982, about two years before the ship was authorized and fully funded.", "Recent examples of Navy ships whose names were announced more than two years before they were procured include the following:", "The destroyer Zumwalt (DDG-1000). On July 4, 2000, President Bill Clinton announced that DDG-1000, the lead ship in a new class of destroyers, would be named Zumwalt in honor of Admiral Elmo Zumwalt Jr., the Chief of Naval Operations from 1970 to 1974, who had died on January 2, 2000. At the time of the naming announcement, Congress was considering the Navy's proposed FY2001 budget, under which DDG-1000 was scheduled for authorization in FY2005, a budget that Congress would consider in 2004, which was then about four years in the future. The aircraft carrier Enterprise (CVN-80). As noted earlier, on December 1, 2012, the Navy announced that CVN-80, the third Gerald R. Ford (CVN-78) class aircraft carrier, would be named Enterprise . At the time of the announcement, CVN-80 was scheduled for procurement in FY2018, the budget for which Congress was to consider in 2017, which was then more than four years in the future. (CVN-80 was in fact procured in FY2018.) The ballistic missile submarine ( SSBN-826 ) Columbia . As noted earlier, on July 28, 2016, it was reported that the first Ohio replacement ballistic missile submarine (SSBN-826) will be named Columbia in honor of the District of Columbia. This ship is scheduled for procurement in FY2021, the budget for which Congress is to consider in 2020, which in July 2016 was about four years in the future. Three John Lewis (TAO- 205) class oilers. As noted earlier, on July 28, 2016, it was reported that the Navy would name the second through sixth John Lewis (TAO-205) class oilers (i.e., TAOs 206 through 210) for Harvey Milk, Earl Warren, Robert F. Kennedy, Lucy Stone, and Sojourner Truth, respectively. In 2016, these five ships were scheduled for procurement in FY2018, FY2019, FY2020, FY2021, and FY2022, respectively, the budgets for which Congress has considered or will consider in 2017, 2018, 2019, 2020, and 2021, respectively. Thus, using the procurement dates that were scheduled in 2016, the name for TAO-208 ( Robert F. Kennedy ) was announced about three years before it was to be procured, the name for TAO-209 ( Lucy Stone ) was announced about four years it was to be procured, and the name for TAO-210 ( Sojourner Truth ) was announced about five years before it was to be procured. As discussed in the CRS report on the TAO-205 class program, the first six ships in the TAO-205 class are being procured under a block buy contract that Congress authorized as part of its action on the FY2016 defense budget. The procurement of each ship under this contract remains subject to the availability of appropriations for that purpose."], "subsections": []}]}, {"section_title": "Public's Role in Naming Ships", "paragraphs": ["Members of the public are sometimes interested in having Navy ships named for their own states or cities, for earlier U.S. Navy ships (particularly those on which they or their relatives served), for battles in which they or their relatives participated, or for people they admire. Citizens with such an interest sometimes contact the Navy, the Department of Defense, or Congress seeking support for their proposals. An October 2008 news report, for example, suggested that a letter-writing campaign by New Hampshire elementary school students that began in January 2004 was instrumental in the Navy's decision in August 2004 to name a Virginia-class submarine after the state. The July 2012 Navy report to Congress states the following:", "In addition to receiving input and recommendations from the President and Congress, every Secretary of the Navy receives numerous requests from service members, citizens, interest groups, or individual members of Congress who want to name a ship in honor of a particular hometown, or State, or place, or hero, or famous ship. This means the \"nomination\" process is often fiercely contested as differing groups make the case that \"their\" ship name is the most fitting choice for a Secretary to make.", "Members of the public may also express their opposition to an announced naming decision. The July 2012 Navy report to Congress cites and discusses five recent examples of ship-naming decisions that were criticized by some observers: the destroyer DDG-1002 (named for President Lyndon Johnson), the Littoral Combat Ship LCS-10 (named for former Representative Gabrielle Giffords), the amphibious ship LPD-26 (named for late Representative John P. Murtha), the auxiliary ship TAKE-13 (named for Medgar Evers), and the auxiliary ship TAKE-14 (named for Cesar Chavez)."], "subsections": []}, {"section_title": "Congress's Role in Naming Ships", "paragraphs": [], "subsections": [{"section_title": "Overview of Congressional Influence on Navy Ship-Naming Decisions", "paragraphs": ["Congress has long maintained an interest in how Navy ships are named, and has influenced or may have influenced pending Navy decisions on the naming of certain ships, including but not limited to the following:", "One source states that \"[the aircraft carriers] CVN 72 and CVN 73 were named prior to their start [of construction], in part to preempt potential congressional pressure to name one of those ships for Admiral H.G. Rickover ([instead,] the [attack submarine] SSN 709 was named for the admiral).\" There was a friendly rivalry of sorts in Congress between those who supported naming the aircraft carrier CVN-76 for President Truman and those who supported naming it for President Reagan; the issue was effectively resolved by a decision announced by President Clinton in February 1995 to name one carrier (CVN-75) for Truman and another (CVN-76) for Reagan. One press report suggests that the decision to name CVN-77 for President George H. W. Bush may have been influenced by a congressional suggestion. Section 1012 of the FY2007 John Warner National Defense Authorization Act ( H.R. 5122 / P.L. 109-364 of October 17, 2006), expressed the sense of the Congress that the aircraft carrier CVN-78 should be named for President Gerald R. Ford. The Navy announced on January 16, 2007, that CVN-78 would be named Gerald R. Ford . In the 111 th Congress, H.Res. 1505 , introduced on July 1, 2010, expressed the sense of the House of Representatives that the Secretary of the Navy should name the next appropriate naval ship in honor of John William Finn. The measure was not acted on after being referred to the House Armed Services Committee. On February 15, 2012, the Navy announced that DDG-113, an Arleigh Burke (DDG-51) class destroyer, would be named John Finn . Section 1012 of the FY2012 National Defense Authorization Act ( H.R. 1540 / P.L. 112-81 of December 31, 2011) expressed the sense of Congress that the Secretary of the Navy is encouraged to name the next available naval vessel after Rafael Peralta. On February 15, 2012, the Navy announced that DDG-113, an Arleigh Burke (DDG-51) class destroyer, would be named Rafael Peralta .", "The July 2012 Navy report to Congress states that", "every Secretary of the Navy, regardless of point of view [on how to name ships], is subject to a variety of outside influences when considering the best names to choose. The first among these comes from the President of the United States, under whose direction any Secretary works...", "Secretaries of the Navy must also consider the input of Congress.... Given the vital role Congress plays in maintaining the Navy-Marine Corps Team, any Secretary is sure to respect and consider its input when considering ships names.", "Sometimes, the Secretary must also balance or contend with differences of opinion between the President and Congress.", "The Navy suggests that congressional offices wishing to express support for proposals to name a Navy ship for a specific person, place, or thing contact the office of the Secretary of the Navy to make their support known. Congress may also pass legislation relating to ship names (see below)."], "subsections": []}, {"section_title": "Congressional Responses to Announced Navy Ship-Naming Decisions", "paragraphs": [], "subsections": [{"section_title": "Examples of Legislation", "paragraphs": ["Congress can pass legislation regarding a ship-naming decision that has been announced by the Navy. Such legislation can express Congress's views regarding the Navy's announced decision, and if Congress so desires, can also suggest or direct the Navy to take some action. The following are three examples of such legislation:", "S.Res. 332 of the 115 th Congress is an example of a measure that appears to reflect support for an announced Navy ship-naming decision. This measure, introduced in the Senate on November 15, 2017, and considered and agreed to without amendment and with a preamble by unanimous consent the same day, summarizes the military career of Hershel \"Woody\" Williams and commemorates the christening of ESB-4, an expeditionary sea base ship named for Williams (see \" Legislative Activity in 115th and 116th Congress .\") H.Res. 1022 of the 111 th Congress is an example of a measure reflecting support for an announced Navy ship-naming decision. This measure, introduced on January 20, 2010, and passed by the House on February 4, 2010, congratulates the Navy on its decision to name a naval ship for Medgar Evers. H.Con.Res. 312 of the 97 th Congress is an example of a measure that appears to reflect disagreement with an announced Navy ship-naming decision. This measure expressed the sense of Congress that the Los Angeles (SSN-688) class attack submarine Corpus Christi (SSN-705) should be renamed, and that a nonlethal naval vessel should instead be named Corpus Christi . (Los Angeles-class attack submarines were named for cities, and SSN-705 had been named for Corpus Christi, TX.) H.Con.Res. 312 was introduced on April 21, 1982, and was referred to the Seapower and Strategic and Critical Materials subcommittee of the House Armed Services Committee on April 28, 1982. On May 10, 1982, the Navy modified the name of SSN-705 to City of Corpus Christi ."], "subsections": []}, {"section_title": "USS Portland (LPD-27)", "paragraphs": ["On April 12, 2013, then-Secretary of the Navy Ray Mabus announced that LPD-27, a San Antonio (LPD-17) class amphibious ship, would be named for Portland, OR. LPD-27 is to be the third Navy ship to bear the name Portland. The first, a cruiser (CA-33), was named for Portland, ME. It was commissioned into service in February 1933, decommissioned in July 1946, and maintained in reserve status until struck from the Navy list in March 1959. The second, an amphibious ship (LSD-37), was named for both Portland, ME, and Portland, OR. It was commissioned into service in October 1970, decommissioned in October 2003, and stricken from the Naval Vessel Register in March 2004.", "An April 18, 2013, press release from Senator Angus King stated that \"U.S. Senators Susan Collins and Angus King today sent a letter to Ray Mabus, the Secretary of the Navy, asking that the USS Portland [LPD-27], a new San Antonio-class amphibious transport dock ship named after the city of Portland, Oregon, also be named in honor of Portland, Maine, consistent with the long history and tradition of U.S. Navy ships bestowed with the name USS Portland.\" In reply, the Navy sent letters dated April 24, 2013, to Senators Collins and King that stated the following in part:", "In addition to [the ballistic missile submarine] USS MAINE (SSBN 743), Secretary [of the Navy Ray] Mabus recently honored the state of Marine through his naming of [the expeditionary fast transport ship] USNS MILLINOCKET (JHSV 3) [now called T-EPF 3] which was christened last weekend and will proudly represent our Nation as part of the fleet for decades to come. The Secretary of the Navy has tremendous appreciation for the state of Maine, its citizens and the incredible support provided by them to our Navy and our Nation. However, Oregon is the only state in our Nation that does not currently have a ship in the fleet named for the state, its cities or communities. Secretary Mabus named LPD 27 after Portland, Oregon, to correct that oversight and acknowledge the support and contributions made by the men and women of Portland and Oregon.", "As noted elsewhere in this report, on October 10, 2014, the Navy announced that it was naming the Virginia-class attack submarine SSN-793 for Oregon.", "A May 21, 2016, Navy blog post about the ship's christening states that \"LPD-27 will be the third Navy ship named Portland, honoring both the Oregon seaport and Maine's largest city.\" That statement is not correct, as the Navy confirms that LPD-27 is named solely for Portland, OR. A July 5, 2017, Navy News Service report states correctly that \"LPD 27 is named for the city of Portland, Oregon, and follows the World War II heavy cruiser CA 33 and the amphibious ship LSD 37 as the third U.S. Navy ship to bear the name Portland.\" LPD-27 is scheduled to be commissioned in Portland, OR, on April 21, 2018."], "subsections": []}]}, {"section_title": "Legislation on Future Navy Ship-Naming Decisions", "paragraphs": [" Table 3 shows past enacted provisions going back to the 100 th Congress regarding future ship-naming decisions. All of these measures expressed the sense of the Congress (or of the Senate or House) about how a future Navy ship should be named.", " Table 4 shows past examples of proposed bills and amendments regarding future ship-naming decisions going back to the 93 rd Congress. Some of these measures expressed the sense of the Congress about how a Navy ship should be named, while others would mandate a certain name for a ship. Although few of these measures were acted on after being referred to committee, they all signaled congressional interest in how certain ships should be named, and thus may have influenced Navy decisions on these matters."], "subsections": []}]}]}, {"section_title": "Legislative Activity in 115th and 116th Congresses", "paragraphs": [], "subsections": [{"section_title": "S.Con.Res. 10 of 115th Congress (Expressing Sense of Congress That Next SSN be Named Los Alamos)", "paragraphs": [], "subsections": [{"section_title": "Senate", "paragraphs": ["S.Con.Res. 10 of the 115 th Congress was introduced in the Senate on March 21, 2017; no further actions for the measure are listed at Congress.gov. The text of S.Con.Res. 10 as introduced was as follows:", "CONCURRENT RESOLUTION", "Expressing the sense of Congress that the Secretary of the Navy should name the next nuclear powered submarine of the United States Navy the \"USS Los Alamos\".", "Whereas the people of Los Alamos and the Navy have a 74-year relationship that continues from the Manhattan Project through the creation of a nuclear Navy and into the current ocean-borne leg of the strategic nuclear triad of the United States;", "Whereas the contributions of the people of Los Alamos and surrounding communities allowed the Navy to keep its offensive edge from World War II, through the Cold War, continuing to the emerging conflicts as of the date of adoption of this resolution;", "Whereas Captain \"Deke\" Parsons was one of the first residents of Los Alamos and, along with Laureate Ramsey, oversaw the safe delivery, assembly and loading of the nuclear bomb that led to the surrender of Japan in World War II;", "Whereas the people of Los Alamos and surrounding communities played a critical role in designing the nuclear portion of the first nuclear weapon to enter the arsenal of the Navy, known as the Regulus, along with atomic depth bombs, torpedoes, rockets, and even next generation weapon systems like the B61\u201312 precision-guided nuclear bomb;", "Whereas the people of Los Alamos designed the warheads that armed the first generation Trident submarine-launched ballistic missiles of the Navy and the follow-on Trident II missile warheads used by the Navy;", "Whereas the research into nuclear energy conducted by Los Alamos during World War II advanced the technical basis for the development of the nuclear propulsion systems of the Navy used aboard Los Angeles, Seawolf, Ohio, and Virginia Class submarines along with multiple naval aircraft carriers today;", "Whereas the people of Los Alamos and Los Alamos National Laboratory host United States Naval Academy midshipmen every year to provide hands-on scientific and engineering experience working to solve real world challenges in national security, thereby directly contributing to the development of future Navy leadership;", "Whereas the people of Los Alamos carry the solemn responsibility to assess the sea-based nuclear deterrent carried aboard Navy fleet ballistic missile submarines;", "Whereas naming a submarine Los Alamos will recognize and continue to forge the longstanding relationship between the Navy and Los Alamos;", "Whereas the year 2018 will mark the 75th anniversary of Los Alamos National Laboratory; and", "Whereas the distinctive service and contributions from the people of Los Alamos to the Navy merits naming a vessel that embodies the heritage, service, fidelity, and achievements of the residents of Los Alamos and surrounding communities in partnership with the United States Navy: Now, therefore, be it", "Resolved by the Senate (the House of Representatives concurring), That it is the sense of the Congress that the Secretary of the Navy should name the next nuclear powered submarine of the United States Navy as the \"USS Los Alamos\".", "Appendix A. Executive Summary of July 2012 Navy Report to Congress", "This appendix reprints the executive summary of the July 2012 Navy report to Congress on the Navy's policies and practices for naming its ships. The text of the executive summary is as follows:", "Executive Summary", "This report is submitted in accordance with Section 1014 of P.L. 112-81 , National Defense Authorization Act (NDAA) for Fiscal Year 2012, dated 31 December 2011, which directs the Secretary of Defense to submit a report on \"policies and practices of the Navy for naming vessels of the Navy.\" ", "As required by the NDAA, this report:", "Includes a description of the current policies and practices of the Navy for naming vessels of the Navy, and a description of the extent to which theses policies and practices vary from historical policies and practices of the Navy for naming vessels of the Navy, and an explanation for such variances; ", "Assesses the feasibility and advisability of establishing fixed policies for the naming of one or more classes of vessels of the Navy, and a statement of the policies recommended to apply to each class of vessels recommended to be covered by such fixed policies if the establishment of such fixed policies is considered feasible and advisable; and ", "Identifies any other matter relating to the policies and practices of the Navy for naming vessels of the Navy that the Secretary of Defense considers appropriate.", "After examining the historical record in great detail, this report concludes:", "Current ship naming policies and practices fall well within the historic spectrum of policies and practices for naming vessels of the Navy, and are altogether consistent with ship naming customs and traditions. ", "The establishment of fixed policies for the naming of one or more classes of vessels of the Navy would be highly inadvisable. There is no objective evidence to suggest that fixed policies would improve Navy ship naming policies and practices, which have worked well for over two centuries. ", "In addition, the Department of the Navy used to routinely publish lists of current type naming rules for battle force ships, and update it as changes were made to them. At some point, this practice fell into disuse, leading to a general lack of knowledge about naming rules. To remedy this problem, the Naval History and Heritage Command will once again develop and publish a list of current type naming rules to help all Americans better understand why Secretaries of the Navy choose the ship names they do. This list will be updated as required."], "subsections": []}]}]}]}}
{"id": "R42647", "title": "Continuing Resolutions: Overview of Components and Practices", "released_date": "2019-04-19T00:00:00", "summary": ["The program activities of most federal agencies are generally funded on an annual basis through the enactment of regular appropriations acts. When those annual appropriations acts are not enacted by the beginning of the fiscal year (i.e., by October 1), one or more continuing appropriations acts (commonly known as continuing resolutions or CRs) may be enacted to provide temporary funding to continue certain programs and activities until action on the regular appropriations acts is completed.", "Congress has included six main components in CRs. First, CRs have provided funding for certain activities (coverage), which are typically specified with reference to the prior fiscal year's appropriations acts. Second, CRs have provided budget authority for a specified duration of time. This duration may be as short as a single day or as long as the remainder of the fiscal year. Third, CRs have provided funds based on an overall funding rate. Fourth, the use of budget authority provided in the CR has been prohibited for new activities not funded in the previous fiscal year. Fifth, the duration and amount of funds in the CR, and purposes for which they may be used for specified activities, may be adjusted through anomalies. Sixth, legislative provisions\u2014which create, amend, or extend other laws\u2014have been included in some instances.", "This report provides detailed information on CRs beginning with FY1977, which was the first fiscal year that began on October 1. Congress has enacted one or more CRs in all but three of the last 43 fiscal years (FY1977-FY2019). In addition, in 10 of the last 18 fiscal years, the initial CR\u2014and in some years subsequent CRs\u2014provided continuing appropriations for all the regular appropriations acts.", "After FY1997\u2014the most recent fiscal year that all regular appropriations bills were enacted before the start of the new fiscal year\u2014an average of at least five CRs were signed into law for each fiscal year before the appropriations process was completed for that year. During this period, CRs provided funding for an average of almost five months each fiscal year.", "For some fiscal years, a CR has provided continuing appropriations (i.e., at a rate of operations) through the end of that year (often referred to as a full-year CR). Most recently, a full-year CR was enacted for most of the regular appropriations acts for FY2007, FY2011, and FY2013. In the 1980s, in contrast, some \"full-year CRs\" actually included the full text of certain regular appropriations acts (i.e., in the form of an omnibus appropriations act rather than a typical CR)."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Introduction", "paragraphs": ["The program activities of most federal agencies are generally funded on an annual basis through the enactment of 12 regular appropriations acts . When those annual appropriations acts are not enacted by the beginning of the fiscal year (i.e., by October 1), one or more continuing appropriations acts may be enacted to provide temporary funding to continue certain programs and activities until action on regular appropriations acts is completed. Such funding is provided for a specified period of time, which may be extended through the enactment of subsequent CRs.", "A continuing appropriations act is commonly referred to as a continuing resolution or CR because it has typically been in the form of a joint resolution rather than a bill. But there is no procedural requirement as to its form. Continuing appropriations are also occasionally provided through a bill.", "If appropriations are not enacted for a fiscal year through a regular appropriations act or a CR, a \"funding gap\" occurs until such appropriations are provided. When a funding gap occurs, federal agencies may be directed to begin a \"shutdown\" of the affected programs and activities. Agencies are generally prohibited from obligating or expending federal funds in the absence of appropriations.", "Congress has enacted one or more CRs in all but three of the 43 fiscal years since FY1977. Further information is available in Table 2 of this report. In total, 186 CRs were enacted into law during the period covering FY1977-FY2019, ranging from zero to 21 in any single fiscal year. On average, about four CRs were enacted each fiscal year during this interval. Table 3 and Figure 1 of this report provide more information on this aspect of CRs. ", "This report provides an overview of the components of CRs and information about congressional practices related to their use. The first section of this report explains six of the typical main components of CRs: coverage, duration, funding rate, restrictions on new activities, anomalies, and legislative provisions. The second section discusses the enactment of regular appropriations acts prior to the start of the fiscal year and the number of CRs enacted, beginning with FY1977, which was the first fiscal year that began on October 1. The third section provides information on the variation in the number and duration of CRs enacted each fiscal year after FY1997\u2014the most recent fiscal year in which all regular appropriations were enacted before the start of the new fiscal year. Finally, the fourth section of this report discusses the features of the 15 \"full-year CRs\" that provided funding through the remainder of the fiscal year. For further information, see Table 4 in this report. A list of all CRs enacted between FY1977 and FY2019 is provided at the end of this report in Table 5 .", "This report has been updated from the previous January 2016 version to include information on FY2017, FY2018, and FY2019."], "subsections": []}, {"section_title": "Main Components of Continuing Resolutions", "paragraphs": ["Congress has included six main components in CRs. First, CRs provide funding for certain activities ( coverage ), which are typically specified with reference to the prior or current fiscal year's appropriations acts. Second, CRs provide budget authority for a specified duration of time. This duration may be as short as a single day or as long as the remainder of the fiscal year. Third, CRs typically provide funds based on an overall funding rate . Fourth, the use of budget authority provided in the CR is typically prohibited for new activities not funded in the previous fiscal year. Fifth, the duration and amount of funds in the CR, and purposes for which they may be used for specified activities, may be adjusted through anomalies . Sixth, legislative provisions \u2014which create, amend, or extend other laws\u2014have been included in some instances.", "Although this section discusses the above components as they have been enacted in CRs under recent practice, it does not discuss their potential effects on budget execution or agency operations. For analysis of these issues, see CRS Report RL34700, Interim Continuing Resolutions (CRs): Potential Impacts on Agency Operations ."], "subsections": [{"section_title": "Coverage", "paragraphs": ["A CR provides funds for certain activities, which are typically specified with reference to other pieces of appropriations legislation or the appropriations acts for a previous fiscal year. Most often, the coverage of a CR is defined with reference to the activities funded in prior fiscal years' appropriations acts for which the current fiscal year's regular appropriations have yet to be enacted. For example, in Section 101 of P.L. 111-68 (the first CR for FY2010), the coverage included activities funded in selected regular and supplemental appropriations acts for FY2008 and FY2009:", "Sec. 101. Such amounts as may be necessary\u2026 under the authority and conditions provided in such Acts, for continuing projects or activities (including the costs of direct loans and loan guarantees) that are not otherwise specifically provided for in this joint resolution, that were conducted in fiscal year 2009, and for which appropriations, funds, or other authority were made available in the following appropriations Acts:", "(1) Chapter 2 of title IX of the Supplemental Appropriations Act, 2008 ( P.L. 110-252 ).", "(2) Section 155 of division A of the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009 ( P.L. 110-329 ), except that subsections (c), (d), and (e) of such section shall not apply to funds made available under this joint resolution.", "(3) Divisions C through E of the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009 ( P.L. 110-329 ).", "(4) Divisions A through I of the Omnibus Appropriations Act, 2009 ( P.L. 111-8 ), as amended by section 2 of P.L. 111-46 .", "(5) Titles III and VI (under the heading `Coast Guard ' ) of the Supplemental Appropriations Act, 2009 ( P.L. 111-32 ). [emphasis added]", "Less frequently, CRs specify coverage with reference to regular appropriations bills for the current fiscal year that have yet to be enacted. In these instances, it is possible that an activity covered in the corresponding previous fiscal year's appropriations bill might not be covered in the CR. Alternatively, a CR might stipulate that activities funded in the previous fiscal year are covered only if they are included in a regular appropriations bill for the current fiscal year. For example, Section 101 of P.L. 105-240 , the first CR for FY1999, provided that funding would continue only under such circumstances.", "SEC. 101. (a) Such amounts as may be necessary under the authority and conditions provided in the applicable appropriations Act for the fiscal year 1998 for continuing projects or activities including the costs of direct loans and loan guarantees (not otherwise specifically provided for in this joint resolution) which were conducted in the fiscal year 1998 and for which appropriations, funds, or other authority would be available in the following appropriations Acts :", "(1) the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 1999\u2026.", "(8) the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 1999, the House and Senate reported versions of which shall be deemed to have passed the House and Senate respectively as of October 1, 1998, for the purposes of this joint resolution, unless a reported version is passed as of October 1, 1998, in which case the passed version shall be used in place of the reported version for purposes of this joint resolution;", "(9) the Legislative Branch Appropriations Act, 1999\u2026. [emphasis added]", "CRs may be enacted as stand-alone legislative vehicles or as provisions attached to a regular appropriations bill or an omnibus bill. In instances in which one or more regular appropriations bills are near completion, Congress may find it expeditious to include a CR in that same legislative vehicle to cover activities in the remaining regular bills that are not yet enacted. In such instances, some activities may be covered by reference while funding for others is provided through the text of the measure. For example, Division C of P.L. 115-245 \u2014the Department of Defense and Labor, Health and Human Services, and Education Appropriations Act, 2019, and Continuing Appropriations Act, 2019\u2014provided continuing appropriations through December 7, 2018, by referencing the FY2018 regular appropriations acts, while the other divisions of P.L. 115-245 provided full-year regular appropriations for the FY2019 Defense and Labor-HHS-ED bills. "], "subsections": []}, {"section_title": "Duration", "paragraphs": ["The duration of a CR refers to the period for which budget authority is provided for covered activities. The period ends either upon the enactment of the applicable regular appropriations act or on an expiration date specified in the CR, whichever occurs first. When a CR expires prior to the completion of all regular appropriations bills for a fiscal year, one or more additional CRs may be enacted to prevent funding gaps and secure additional increments of time to complete the remaining regular appropriations bills. The duration of any further CRs may be brief, sometimes a single day, to encourage the process to conclude swiftly, or it may be for weeks or months to accommodate further negotiations or congressional recesses. In some cases, CRs have carried over into the next session of Congress.", "In most of the fiscal years in which CRs have been used, a series of two or more have been enacted into law. Such CRs may be designated by their order (e.g., \"first\" CR, \"second\" CR) or, after the initial CR has been enacted, designated as a \"further\" CR. When action on the regular appropriations bills is not complete by the time when the first CR expires, subsequent CRs will often simply replace the expiration date in the preceding CR with a new expiration date. For example, Section 1 of the third CR for FY2016, P.L. 114-100 , stated that \"Public Law 114-53 is amended by striking the date specified in Section 106(3) and inserting 'December 22, 2015.'\" This action extended the duration of the preceding CR by six days.", "Funds provided by a CR will not necessarily be used by all covered activities through the date the CR expires. In practice, the budget authority provided by a CR may be superseded by the enactment of subsequent appropriations measures or the occurrence of other specified conditions. In an instance in which a regular appropriations bill was enacted prior to the expiration of a CR, the budget authority provided by the regular bill for covered activities would replace the funding provided by the CR. All other activities in the CR, however, would continue to be funded by the CR unless they were likewise superseded or the CR expired. The duration of funds for certain activities could also be shortened if other conditions that are specified in the CR occur. For example, Section 107 of P.L. 108-84 , the first CR for FY2004, provided funds for 31 days or fewer:", "Sec. 107. Unless otherwise provided for in this joint resolution or in the applicable appropriations Act, appropriations and funds made available and authority granted pursuant to this joint resolution shall be available until (a) enactment into law of an appropriation for any project or activity provided for in this joint resolution, or (b) the enactment into law of the applicable appropriations Act by both Houses without any provision for such project or activity, or (c) October 31, 2003, whichever first occurs . [emphasis added]", "In this instance, funding for all other activities not subject to these conditions would continue under the CR until it expired or was otherwise superseded.", "When a CR is attached to a regular appropriations bill, the activities covered by regular appropriations are funded through the remainder of the fiscal year, whereas the activities covered by the CR are funded through a specified date. Congress may also single out specific activities in a CR to receive funding for a specified duration that differs from the vast majority of other accounts and activities. This type of variation in duration is discussed in the \" Exceptions to Duration, Amount, and Purposes: Anomalies \" section.", "As an alternative to the separate enactment of one or more of the regular appropriations bills for a fiscal year, a CR may provide funds for the activities covered in such bills through the remainder of the fiscal year. This type of CR is referred to as a full-year CR. Full-year CRs may provide funding for all bills that have yet to be enacted or include the full text of one or more regular appropriations bills. For example, Division A of P.L. 112-10 contained the text of the FY2011 Defense Appropriations Act, whereas the programs and activities covered by the 11 remaining regular appropriations bills were funded by the full-year CR in Division B."], "subsections": []}, {"section_title": "Funding Rate", "paragraphs": ["CRs often fund activities under a formula-type approach that provides budget authority at a restricted level but not a specified amount. This method of providing budget authority is commonly referred to as the \"funding rate.\" Under a funding rate, the amount of budget authority for an account is calculated as the total amount of budget authority annually available based on a reference level (usually a dollar amount or calculation), multiplied by the fraction of the fiscal year for which the funds are made available in the CR. This is in contrast to regular and supplemental appropriations acts, which generally provide specific amounts for each account.", "In previous years, many CRs have provided funding across accounts by reference to the amount of budget authority available in specified appropriations acts from the previous fiscal year. For example, Section 101 of P.L. 110-329 , the first CR for FY2010, provided the following funding rate:", "Such amounts as may be necessary, at a rate for operations as provided in the applicable appropriations Acts for fiscal year 2008 and under the authority and conditions provided in such Acts, for continuing projects or activities (including the costs of direct loans and loan guarantees) that are not otherwise specifically provided for in this joint resolution, that were conducted in fiscal year 2008, and for which appropriations, funds, or other authority were made available in the following appropriations Acts: divisions A, B, C, D, F, G, H, J, and K of the Consolidated Appropriations Act, 2008 ( P.L. 110-161 ) . [emphasis added]", "Other CRs have provided funding by reference to the levels available in the previous fiscal year, with either an increase or decrease from the previous fiscal year's level. For example, Section 101(a) and (b) of P.L. 112-33 , the first CR for FY2012, provided the following funding rate:", "(a) Such amounts as may be necessary, at a rate for operations as provided in the applicable appropriations Acts for fiscal year 2011 and under the authority and conditions provided in such Acts, for continuing projects or activities (including the costs of direct loans and loan guarantees) that are not otherwise specifically provided for in this Act, that were conducted in fiscal year 2011, and for which appropriations, funds, or other authority were made available in the following appropriations Acts\u2026.", "(b) The rate for operations provided by subsection (a) is hereby reduced by 1.503 percent . [emphasis added]", "Although these examples illustrate the most typical types of funding rates, other types of funding rates have sometimes been used when providing continuing appropriations. For example, P.L. 105-240 , the first CR for FY1999, provided a variable funding rate for covered activities. Specifically, the CR provided funds derived from three possible reference sources: the House- and Senate-passed FY1999 regular appropriations bills, the amount of the President's budget request, or \"current operations\" (the total amount of budget authority available for obligation for an activity during the previous fiscal year), whichever was lower. In instances where no funding was provided under the House-and Senate-passed FY1999 appropriations bills, the funding rate would be based on the lower of the President's budget request or current operations. In addition, while the first CR for a fiscal year may provide a certain funding rate, subsequent CRs sometimes may provide a different rate.", "CRs have sometimes provided budget authority for some or all covered activities by incorporating the actual text of one or more regular appropriations bills for that fiscal year rather than providing funding according to the rate formula. For example, P.L. 112-10 provided funding for the Department of Defense through the incorporation of a regular appropriations bill in Division A, whereas Division B provided formulaic funding for all other activities for the remainder of the fiscal year. In this type of instance, the formula in the CR applies only to activities not covered in the text of the incorporated regular appropriations bill or bills."], "subsections": []}, {"section_title": "Purpose for Funds and Restrictions on New Activities", "paragraphs": ["CRs that provide a funding rate for activities often stipulate that funds may be used for the purposes and in the manner provided in specified appropriations acts for the previous fiscal year. CRs may also provide that the funds provided may be used only for activities funded in the previous fiscal year. In practice, this is often characterized as a prohibition on \"new starts.\" In addition, conditions and limitations on program activity from the previous year's appropriations acts may be retained by language contained within the resolution's text. An example of such language, from P.L. 112-33 , is below:", "Sec. 103. Appropriations made by section 101 shall be available to the extent and in the manner that would be provided by the pertinent appropriations Act. [emphasis added]", "Sec. 104. Except as otherwise provided in section 102, no appropriation or funds made available or authority granted pursuant to section 101 shall be used to initiate or resume any project or activity for which appropriations, funds, or other authority were not available during fiscal year 2011. [emphasis added]", "This language prevents the initiation of new activities with the funds provided in the CR. Agencies may use appropriated funds from prior fiscal years that remain available, however, to initiate new activities in some circumstances."], "subsections": []}, {"section_title": "Exceptions to Duration, Amount, and Purposes: Anomalies", "paragraphs": ["Even though CRs typically provide funds at a rate, they may also include provisions that enumerate exceptions to the duration , amount , or purposes for which those funds may be used for certain appropriations accounts or activities. Such provisions are commonly referred to as \"anomalies.\" The purpose of anomalies is to preserve Congress's constitutional prerogative to provide appropriations in the manner it sees fit, even in instances when only short-term funding is provided."], "subsections": [{"section_title": "Duration", "paragraphs": ["A CR may contain anomalies that designate a duration of funding for certain activities that is different from the overall duration provided. For example, Section 112 of P.L. 108-84 provided an exception to the expiration date of October 31, 2003, specified in Section 107(c) of the CR:", "For entitlements and other mandatory payments whose budget authority was provided in appropriations Acts for fiscal year 2003, and for activities under the Food Stamp Act of 1977, activities shall be continued at the rate to maintain program levels under current law, under the authority and conditions provided in the applicable appropriations Act for fiscal year 2003, to be continued through the date specified in section 107(c): Provided , That notwithstanding section 107, funds shall be available and obligations for mandatory payments due on or about November 1 and December 1, 2003, may continue to be made . [emphasis added]"], "subsections": []}, {"section_title": "Amount", "paragraphs": ["Anomalies may also designate a specific amount or rate of budget authority for certain accounts or activities that is different than the funding rate provided for the remainder of activities in the CR. Typically, such funding is specified as an annualized rate based upon a lump sum. For example, Section 120 of P.L. 112-33 provided the following anomaly for a specific account, which was an exception to the generally applicable rate in Section 101:", "Notwithstanding section 101, amounts are provided for \"Defense Nuclear Facilities Safety Board\u2014Salaries and Expenses\" at a rate for operations of $29,130,000. [emphasis added]", "Funding adjustments can also be provided in anomalies for groups of accounts in the bill. For example, Section 121 of P.L. 112-33 provided a different rate for certain funds in a group of accounts:", "Notwithstanding any other provision of this Act, except section 106, the District of Columbia may expend local funds under the heading \"District of Columbia Funds\" for such programs and activities under title IV of H.R. 2434 (112 th Congress), as reported by the Committee on Appropriations of the House of Representatives, at the rate set forth under ''District of Columbia Funds\u2014Summary of Expenses'' as included in the Fiscal Year 2012 Budget Request Act of 2011 (D.C. Act 19\u201392), as modified as of the date of the enactment of this Act. [emphasis added]", "Further, anomalies may provide exceptions to amounts specified in other laws. For example, Section 121 of P.L. 110-329 provided that funds may be expended in excess of statutory limits up to an alternative rate.", "Notwithstanding the limitations on administrative expenses in subsections (c)(2) and (c)(3)(A) of section 3005 of the Digital Television Transition and Public Safety Act of 2005 ( P.L. 109-171 ; 120 Stat. 21), the Assistant Secretary (as such term is defined in section 3001(b) of such Act) may expend funds made available under sections 3006, 3008, and 3009 of such Act for additional administrative expenses of the digital-to-analog converter box program established by such section 3005 at a rate not to exceed $180,000,000 through the date specified in section 106(3) of this joint resolution. [emphasis added]"], "subsections": []}, {"section_title": "Purpose", "paragraphs": ["CRs may also use anomalies to alter the purposes for which the funds may be expended. Such anomalies may allow funds to be spent for activities that would otherwise be prohibited or prohibit funds for activities that might otherwise be allowed. For example, Section 114 of P.L. 108-309 , the first CR for FY2005, prohibited funds from being available to a particular department for a certain activity:", "Notwithstanding any other provision of this joint resolution, except sections 107 and 108, amounts are made available for the Strategic National Stockpile (\"SNS\") at a rate for operations not exceeding the lower of the amount which would be made available under H.R. 5006, as passed by the House of Representatives on September 9, 2004, or S. 2810, as reported by the Committee on Appropriations of the Senate on September 15, 2004: Provided, That no funds shall be made available for the SNS to the Department of Homeland Security under this joint resolution \u2026. [emphasis added]"], "subsections": []}]}, {"section_title": "Legislative Provisions", "paragraphs": ["Substantive legislative provisions, which have the effect of creating new law or changing existing law, have also been included in some CRs. One reason why CRs have been attractive vehicles for such provisions is that they are often widely considered to be must-pass measures to prevent funding gaps. Legislative provisions previously included in CRs have varied considerably in length, from a short paragraph to more than 200 pages.", "House and Senate rules restrict the inclusion of legislative provisions in appropriations bills, but such restrictions are applicable in different contexts. Although House rules prohibit legislative provisions from being included in general appropriations measures (including amendments or any conference report to such measures), these restrictions do not apply to CRs. Senate rules prohibit non-germane amendments that include legislative provisions either on the Senate floor or as an amendment between the houses. While these Senate restrictions do apply in the case of CRs, there is considerable leeway on when such provisions may be included, such as when the Senate amends a legislative provision included by the House. The rules of the House and Senate are not self-enforcing. A point of order must be raised and sustained to prevent any legislative language from being considered and enacted.", "Substantive provisions in CRs have included language that established major new policies, such as an FY1985 CR, which contained the Comprehensive Crime Control Act of 1984.", "More frequently, CRs have been used to amend or renew provisions of law. For example, Section 140 of P.L. 112-33 retroactively renewed import restrictions under the Burmese Freedom and Democracy Act of 2003 ( P.L. 108-61 ):", "(a) Renewal of Import Restrictions Under Burmese Freedom and Democracy Act of 2003.\u2014", "(1) In general.\u2014Congress approves the renewal of the import restrictions contained in section 3(a)(1) and section 3A (b)(1) and (c)(1) of the Burmese Freedom and Democracy Act of 2003.", "(2) Rule of construction.\u2014This section shall be deemed to be a \"renewal resolution\" for purposes of section 9 of the Burmese Freedom and Democracy Act of 2003.", "(b) Effective Date.\u2014This section shall take effect on July 26, 2011.", "CRs have also contained legislative provisions that temporarily extended expiring laws. For example, Section 136 of P.L. 115-298 extended the National Flood Insurance Program:", "Sec. 136. Sections 1309(a) and 1319 of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4016(a) and 4026) shall be applied by substituting the date specified in section 105(3) of this Act for 'December 7, 2018.'", "Legislative provisions that temporarily extend expiring laws are effective through the date the CR expires, unless otherwise specified."], "subsections": []}]}, {"section_title": "The Enactment of Regular Appropriations Bills and Use of CRs, FY1977-FY2019", "paragraphs": ["As mentioned previously, regular appropriations were enacted after October 1 in all but four fiscal years between FY1977 and FY2019. Consequently, CRs have been needed in almost all of these years to prevent one or more funding gaps from occurring.", " Table 2 provides an overview of the enactment of regular appropriations bills and the use of CRs between FY1977 and FY2019. All appropriations were enacted before the start of the new fiscal year four times during this period: FY1977, FY1989, FY1995, and FY1997. Over half of the regular appropriations bills for a fiscal year were enacted before the start of the new fiscal year in only one instance (FY1978). In all other fiscal years, fewer than six regular appropriations acts were enacted on or before October 1. In addition, in 15 out of the 43 years during this period, no regular appropriations bills were enacted prior to the start of the fiscal year. Ten of these fiscal years have occurred in the interval since FY2001.", "CRs were enacted in all but three of these fiscal years (FY1989, FY1995, and FY1997). In FY1977, although all 13 regular appropriations bills became law on or before the start of the fiscal year, two CRs were enacted to provide funding for certain activities that had not been included in the regular appropriations acts."], "subsections": []}, {"section_title": "Duration and Frequency of Continuing Resolutions, FY1998-FY2019", "paragraphs": ["CRs have been a significant element of the recent annual appropriations process. As shown in Table 3 , a total of 117 CRs were enacted into law from FY1998 to FY2019. While the average number of such measures enacted per year was about five, the number enacted ranged from two measures (for FY2009, FY2010, and FY2013) to 21 (for FY2001). ", "During the past 22 fiscal years, Congress provided funding by means of a CR for an average of almost five months (143 days) each fiscal year. Taking into account the total duration of all CRs for each fiscal year, the period for which continuing appropriations were provided ranged from 21 days to 365 days. On average, each of the 117 CRs lasted for about 39 days; 53 of these were for seven days or fewer. Three full-year CRs were used during this period, for FY2007, FY2011, and FY2013.", "In the first four instances (FY1998-FY2001), the expiration date of the final CR was set in the first quarter of the fiscal year on a date occurring between October 21 and December 21. The expiration date in the final CR for the next three fiscal years (FY2002-FY2004) and FY2019, however, was set in the following session of Congress on a date occurring between January 10 and February 20. In six of the next 12 fiscal years (FY2005, FY2006, FY2008, FY2010, FY2012, and FY2016), the expiration dates were in the first quarter of the fiscal year on a date occurring between December 8 and December 31. For the remaining fiscal years, the final CRs were enacted during the next session of Congress. In one instance, the final CR for the fiscal year expired during the month of January (FY2014). In three instances, the final CR expired in March (FY2009, FY2015, and FY2018). Three other final CRs\u2014for FY2007, FY2011, and FY2013\u2014provided funding through the end of the fiscal year. ", " Figure 1 presents a representation of the duration of CRs for FY1998-FY2019. As the figure shows, there is no significant correlation between these two variables. For example, six CRs were enacted for both FY1998 and FY1999, but the same number of measures lasted for a period of 57 days for FY1998 and only 21 days for FY1999. The largest number of CRs enacted for a single fiscal year during this period\u201421 for FY2001\u2014covered a period lasting 82 days at an average duration of about four days per act. The smallest number enacted\u2014two each for FY2009, FY2010, and FY2013\u2014covered 162 days, 79 days, and 365 days, respectively. ", " Figure 1 also shows considerable mix in the use of shorter-term and longer-term CRs for a single fiscal year. For example, for FY2001, 21 CRs covered the first 82 days of the fiscal year. The first 25 days were covered by a series of four CRs lasting between five and eight days each. The next 10 days, a period of intense legislative negotiations leading up to the national elections on November 7, 2000, were covered by a series of 10 one-day CRs. The next 31 days were covered by two CRs, the first lasting 10 days and the second lasting 21 days. The first of these two CRs was enacted into law on November 4, the Saturday before the election, and extended through November 14, the second day of a lame-duck session. The second CR was enacted into law on November 15 and expired on December 5, which was 10 days before the lame-duck session ended. The remaining five CRs, which ranged in duration from one to six days, covered the remainder of the lame-duck session and several days beyond (as the final appropriations measures passed by Congress were being processed for the President's approval).", " Table 5 provides more detailed information on the number, length, and duration of CRs enacted for FY1977-FY2019. As indicated previously, this represents the period after the start of the federal fiscal year was moved from July 1 to October 1 by the Congressional Budget Act."], "subsections": []}, {"section_title": "Features of Full-Year CRs After FY1977", "paragraphs": ["Full-year CRs have been used to provide annual discretionary spending on a number of occasions. Prior to the full implementation of the Congressional Budget Act in FY1977, full-year CRs were used occasionally, particularly in the 1970s. Full-year CRs were enacted into law for four of the six preceding fiscal years (FY1971, FY1973, FY1975, and FY1976). Following the successful completion of all 13 regular appropriations acts prior to the start of FY1977, full-year CRs were used in each of the 11 succeeding fiscal years (FY1978-FY1988) to cover at least one regular appropriations act. Three years later, another full-year CR was enacted for FY1992. Most recently, full-year CRs were enacted for FY2007, FY2011, and FY2013.", " Table 4 identifies the 15 full-year CRs enacted for the period since FY1977. Nine of the 15 full-year CRs during this period were enacted in the first quarter of the fiscal year\u2014three in October, two in November, and four in December. The six remaining measures, however, were enacted during the following session between February 15 and June 5.", "The full-year CRs enacted during this period also varied in terms of length and the form of funding provided. Full-year CRs prior to FY1983 were relatively short measures, ranging in length from one to four pages in the Statutes-at-Large . Beginning with FY1983 and extending through FY1988, however, the measures became much lengthier, ranging from 19 to 451 pages. The greater page length of full-year CRs enacted for the period covering FY1983-FY1988 may be explained by two factors. First, full-year CRs enacted prior to FY1983 generally established funding levels by formulaic reference. Beginning with FY1983, however, Congress began to incorporate the full text of some or all of the covered regular appropriations acts, thereby increasing its length considerably. None of the full-year CRs enacted between 1985 and 1988 used formulaic funding provisions. Secondly, the number of regular appropriations acts covered by full-year CRs increased significantly during the FY1983-FY1988 period. For the period covering FY1978-FY1982, the number of regular appropriations acts covered by CRs for the full fiscal year ranged from one to six (averaging about three). Beginning with FY1983 and extending through FY1988, the number of covered acts ranged from five to 13, averaging about 10.", "The next two full-year CRs, for FY1992 and FY2007, returned to the earlier practice of using formulaic references and anomalies to establish funding levels. Both CRs provided funding only through this means. As a consequence, the length of these measures was considerably shorter than the FY1983 through FY1988 full-year CRs.", "The two most recent full-year CRs, for FY2011 and FY2013, in some respects were a hybrid of the earlier and recent approaches. The FY2011 full-year CR provided funding for 11 bills through formulaic provisions and anomalies. It also carried the full text of one regular appropriations bill in a separate division of the act (the FY2011 Department of Defense Appropriations Act). Similarly, the FY2013 CR contained the texts of five regular appropriations bills in Divisions A through E of the act\u2014the FY2013 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act; the Commerce, Justice, Science, and Related Agencies Appropriations Act; the Department of Defense Appropriations Act; the Department of Homeland Security Appropriations Act; and the Military Construction and Veterans Affairs and Related Agencies Appropriations Act. In addition, Division F was characterized as providing continuing appropriations for the remaining seven regular appropriations bills through formulaic provisions and anomalies. Unlike previous years, the formula for providing continuing appropriations was based on the amount provided in FY2012 rather than a rate."], "subsections": []}]}}
{"id": "R45723", "title": "Fiscal Policy: Economic Effects", "released_date": "2019-05-16T00:00:00", "summary": ["Fiscal policy is the means by which the government adjusts its spending and revenue to influence the broader economy. By adjusting its level of spending and tax revenue, the government can affect the economy by either increasing or decreasing economic activity in the short term. For example, when the government runs a budget deficit, it is said to be engaging in fiscal stimulus, spurring economic activity, and when the government runs a budget surplus, it is said to be engaging in a fiscal contraction, slowing economic activity.", "The government can use fiscal stimulus to spur economic activity by increasing government spending, decreasing tax revenue, or a combination of the two. Increasing government spending tends to encourage economic activity either directly through purchasing additional goods and services from the private sector or indirectly by transferring funds to individuals who may then spend that money. Decreasing tax revenue tends to encourage economic activity indirectly by increasing individuals' disposable income, which tends to lead to those individuals consuming more goods and services. This sort of expansionary fiscal policy can be beneficial when the economy is in recession, as it lessens the negative impacts of a recession, such as elevated unemployment and stagnant wages. However, expansionary fiscal policy can result in rising interest rates, growing trade deficits, and accelerating inflation, particularly if applied during healthy economic expansions. These side effects from expansionary fiscal policy tend to partly offset its stimulative effects.", "The government can use contractionary fiscal policy to slow economic activity by decreasing government spending, increasing tax revenue, or a combination of the two. Decreasing government spending tends to slow economic activity as the government purchases fewer goods and services from the private sector. Increasing tax revenue tends to slow economic activity by decreasing individuals' disposable income, likely causing them to decrease spending on goods and services. As the economy exits a recession and begins to grow at a healthy pace, policymakers may choose to reduce fiscal stimulus to avoid some of the negative consequences of expansionary fiscal policy, such as rising interest rates, growing trade deficits, and accelerating inflation, or to manage the level of public debt.", "In recent history, the federal government has generally followed a pattern of increasing fiscal stimulus during a recession, then decreasing fiscal stimulus during the economic recovery. Prior to the \"Great Recession\" of 2007-2009 the federal budget deficit was about 1% of gross domestic product (GDP) in 2007. During the recession, the budget deficit grew to nearly 10% of GDP in part due to additional fiscal stimulus applied to the economy. The budget deficit began shrinking in 2010, falling to about 2% of GDP by 2015. In contrast to the typical pattern of fiscal policy, the budget deficit began growing again in 2016, rising to nearly 4% of GDP in 2018 despite relatively strong economic conditions. This change in fiscal policy is notable, as expanding fiscal stimulus when the economy is not depressed can result in rising interest rates, a growing trade deficit, and accelerating inflation. As of publication of this report, interest rates have not risen discernibly and are still near historic lows, and inflation rates show no sign of acceleration. The trade deficit has been growing in recent years; however, it is not clear that this growth in the trade deficit is a result of increased fiscal stimulus."], "reports": {"section_title": "", "paragraphs": ["T he federal government has two major tools for affecting the macroeconomy: fiscal policy and monetary policy. These policy interventions are generally used to either increase or decrease economic activity to counter the business cycle's impact on unemployment, income, and inflation. This report focuses on fiscal policy; for more information related to monetary policy, refer to CRS Report RL30354, Monetary Policy and the Federal Reserve: Current Policy and Conditions , by Marc Labonte. "], "subsections": [{"section_title": "What is Fiscal Policy?", "paragraphs": ["Fiscal policy is the means by which the government adjusts its budget balance through spending and revenue changes to influence broader economic conditions. According to mainstream economics, the government can impact the level of economic activity, generally measured by gross domestic product (GDP), in the short term by changing its level of spending and tax revenue. Expansionary fiscal policy\u2014an increase in government spending, a decrease in tax revenue, or a combination of the two\u2014is expected to spur economic activity, whereas contractionary fiscal policy\u2014a decrease in government spending, an increase in tax revenue, or a combination of the two\u2014is expected to slow economic activity. When the government's budget is running a deficit, fiscal policy is said to be expansionary: when it is running a surplus, fiscal policy is said to be contractionary.", "From a policymaker's perspective, expansionary fiscal policy is generally used to boost GDP growth and the economic indicators that tend to move with GDP, such as employment and individual incomes. However, expansionary fiscal policy also tends to affect interest rates and investment, exchange rates and the trade balance, and the inflation rate in undesirable ways, limiting the long-term effectiveness of persistent fiscal stimulus. Contractionary fiscal policy can be used to slow economic activity if policymakers are concerned that the economy may be overheating, which can cause a recession. The magnitude of fiscal policy's effect on GDP will also differ based on where the economy is within the business cycle\u2014whether it is in a recession or an expansion."], "subsections": []}, {"section_title": "Expansionary Fiscal Policy", "paragraphs": ["During a recession, aggregate demand (overall spending) in the economy falls, which generally results in slower wage growth, decreased employment, lower business revenue, and lower business investment. Recessions occur for a number of reasons, but as seen during the most recent recession from 2007 to 2009, they can result in serious negative consequences for both individuals and businesses. However, the government can replace some of the lost aggregate demand and limit the negative impacts of a recession on individuals and businesses with the use of fiscal stimulus by increasing government spending, decreasing tax revenue, or a combination of the two. Government spending takes the form of both purchases of goods and services by the government, which directly increase economic activity, and transfers to individuals, which indirectly increase economic activity as individuals spend those funds. Decreased tax revenue via tax cuts indirectly increases aggregate demand in the economy. For example, an individual income tax cut increases the amount of disposable income available to individuals, enabling them to purchase more goods and services. Standard economic theory suggests that in the short term, fiscal stimulus can lessen the negative impacts of a recession or hasten a recovery. However, the ability of fiscal stimulus to boost aggregate demand may be limited due to its interaction with other economic processes, including interest rates and investment, exchange rates and the trade balance, and the rate of inflation."], "subsections": [{"section_title": "Potential Offsetting Effects to Expansionary Fiscal Policy", "paragraphs": [], "subsections": [{"section_title": "Investment and Interest Rates", "paragraphs": ["To engage in fiscal stimulus by either increasing spending or decreasing tax revenue, the government must increase the size of its deficit and borrow money to finance that stimulus. This can lead to an increase in interest rates and subsequent decreases in investment and some consumer spending. This rise in interest rates may therefore offset some portion of the increase in economic activity spurred by fiscal stimulus.", "At any given time, there is a limited supply of loanable funds available for the government and private parties to borrow from\u2014a global pool of savings. If the government begins to borrow a larger portion of this pool of savings, it increases the demand for these funds. As demand for loanable funds increases, without any corresponding increase in the supply of these funds, the price to borrow these funds, also known as interest rates, increases. Rising interest rates generally depress economic activity, as they make it more expensive for businesses to borrow money and invest in their firms. Similarly, individuals tend to decrease so-called interest-sensitive spending\u2014spending on goods and services that require a loan, such as cars, homes, and large appliances\u2014when interest rates are relatively higher. The process through which rising interest rates diminish private-sector spending is often referred to as crowding out . However, the degree to which crowding out occurs is partially dependent on where the economy is within the business cycle, either in a recession or in a healthy expansion. ", "During a recession, crowding out tends to be smaller than during a healthy economic expansion due to already depressed demand for investment and interest-sensitive spending. Because demand for loanable funds is already depressed during a recession, the additional demand created by government borrowing does not increase interest rates as much, and therefore does not crowd out as much private spending as it would during an economic expansion. ", "In addition to fiscal policy, the government can influence the business cycle through the use of monetary policy, which is implemented by the Federal Reserve. The Federal Reserve is an independent government agency charged with maintaining stable prices and maximum employment through its monetary policy. The Federal Reserve can influence interest rates throughout the economy by adjusting the federal funds rate, a very short-term interest rate faced by banks. Decreasing interest rates reduces the cost to businesses and individuals of borrowing funds to make new investments and purchases. Conversely, increasing interest rates raises the cost to businesses and individuals of borrowing funds to make new investments and purchases. The Federal Reserve can conduct monetary policy in a complementary nature to fiscal policy, offsetting the rise in interest rates by decreasing the federal funds rate. Alternatively, the Federal Reserve can pursue a policy that offsets stimulus, pushing interest rates up by increasing the federal funds rate. "], "subsections": []}, {"section_title": "Exchange Rates and the Trade Balance", "paragraphs": ["Another potential consequence of government fiscal stimulus is an increase in the value of the U.S. dollar and a subsequent increase in the trade deficit, which mitigates some portion of the rise in economic activity resulting from the fiscal stimulus. As discussed above, fiscal stimulus can cause interest rates to rise. In a global context where interest rates are rising in the United States relative to the rest of the world, demand for investment inside the United States is likely to increase among investors around the world as they seek out higher rates of return. The greater demand for investment in the United States is likely to temper the increase in interest rates resulting from fiscal stimulus. However, foreign investors must first exchange their own currency for U.S. dollars to invest in the United States. The increased demand for U.S. dollars increases the value of a U.S. dollar relative to other foreign currencies. As the U.S. dollar appreciates in value, domestic demand for imported goods increases because a U.S. dollar can now buy more goods and services abroad, but foreign demand for U.S. goods and services decreases because they are now relatively more expensive for foreigners. The end result is generally an increase in the U.S. trade deficit, as exports decrease and imports from abroad increase in the United States. An increasing trade deficit, all else equal, means that consumption and production of domestic goods and services are falling, partly offsetting the increase in aggregate demand caused by the stimulus. ", "As discussed above, however, during a recession interest rates are less likely to rise, or are likely to increase to a lesser degree, due to an already depressed demand for investment and spending within the economy. Without rising interest rates, or if they increase to a lesser degree, the associated increase in the trade deficit is also likely to be smaller. In addition, if the Federal Reserve engages in similarly stimulative monetary policy, it may be able to mitigate some of the anticipated increase in the trade deficit by further preventing an increase in interest rates. "], "subsections": []}, {"section_title": "Inflation", "paragraphs": ["As discussed above, the goal of fiscal stimulus is to increase aggregate demand within the economy. However, if fiscal stimulus is applied too aggressively, or is implemented when the economy is already operating near full capacity, it can result in an unsustainably large demand for goods and services that the economy is unable to supply. When the demand for goods and services is greater than the available supply, prices tend to rise, a scenario known as inflation. A rising inflation rate can introduce distortions into the economy and impose unnecessary costs on individuals and businesses, although economists generally view low and stable inflation as a sign of a well-managed economy. As such, rising inflation rates can hinder the effectiveness of fiscal stimulus on economic activity by imposing additional costs on individuals and interfering with the efficient allocation of resources in the economy. ", "The Federal Reserve has some ability to limit inflation by implementing contractionary monetary policy. If the Federal Reserve observes accelerating inflation as a result of additional fiscal stimulus, it can counteract this by increasing interest rates. The rise in interest rates results in a slowing of economic activity, neutralizing the fiscal stimulus, and may help to slow inflation as well. "], "subsections": []}]}, {"section_title": "Fiscal Expansion Multipliers", "paragraphs": ["Economists attempt to evaluate the overall impact of fiscal stimulus on the economy by estimating fiscal multipliers , which measure the ratio of a change in economic output to the change in government spending or revenue that causes the change in output. A fiscal multiplier greater than one suggests that for each dollar the government spends, the economy grows by more than one dollar. A multiplier may be larger than one if the initial government stimulus results in further spending by private actors. For example, if the government increases spending on infrastructure projects as part of its stimulus, directly increasing aggregate demand, numerous contractors and construction workers will likely receive additional income as a consequence. If those workers then spend a portion of their new income within the economy, it further increases aggregate demand. Alternatively, a fiscal multiplier of less than one suggests that for each dollar the government spends, the economy grows by less than one dollar, suggesting the expansionary power of the fiscal stimulus is being offset by the contractionary pressures discussed above. ", "Estimates of fiscal multipliers vary depending on the form of the fiscal stimulus and on which economic model the economist uses to measure the multiplier. For example, a 2012 academic research article estimated fiscal multipliers for various forms of stimulus utilizing several different prominent economic models from the Federal Reserve Board, the European Central Bank, the International Monetary Fund (IMF), the European Commission, the Organisation for Economic Co-operation and Development (OECD), the Bank of Canada, and two models developed by academic economists. The authors found varying estimates (see Table 1 ) for different forms of fiscal stimulus ranging from 1.59 for cash transfers to low-income individuals to 0.23 for reduced labor income taxes. Based on these estimates, increasing government spending on consumption by 1% of GDP would result in a 1.55% increase in GDP, and decreasing labor income taxes by 1% of GDP would result in a 0.23% increase in GDP. ", "The magnitude of fiscal multipliers likely depends on where the economy is in the business cycle. As discussed above, during a recession fiscal stimulus is less likely to result in offsetting contractionary effects\u2014such as rising interest rates, trade deficits, and inflation\u2014resulting in a larger increase in economic activity from fiscal stimulus. Accordingly, another academic research article attempted to estimate fiscal multipliers depending on whether the economy was in an expansion or a recession, and found that the multiplier for government spending was between 0 and 0.5 during expansions and between 1.0 and 1.5 during recessions. "], "subsections": []}, {"section_title": "Long-Term Considerations Regarding Fiscal Stimulus", "paragraphs": ["Persistently applying fiscal stimulus can negatively affect the economy through three main avenues. First, persistent large budget deficits can result in a rising debt-to-GDP ratio and lead to an unsustainable level of debt. Second, persistent fiscal stimulus\u2014particularly during economic expansions\u2014can limit long-term economic growth by crowding out private investment. Third, rising public debt will require a growing portion of the federal budget to be directed toward interest payments on the debt, potentially crowding out other, more worthwhile sources of government spending. ", "Some economic research has suggested that relatively high public debt negatively impacts economic growth. For example, one academic research paper suggested that for developed countries, a 10-percentage-point increase in the debt-to-GDP ratio is associated with a 0.15- to 0.20-percentage-point decrease in per capita real GDP growth."], "subsections": [{"section_title": "Unsustainable Public Debt", "paragraphs": ["As noted, persistent fiscal stimulus can result in a rising debt-to-GDP ratio and lead to an unsustainable level of public debt. A rising debt-to-GDP ratio can be problematic if the perceived or real risk of the government defaulting on that debt begins to rise. As the perceived risk of default begins to increase, investors will demand higher interest rates to compensate themselves. ", "The tipping point at which public debt becomes unsustainable is difficult to predict. A continually rising debt-to-GDP ratio is likely to lead to an unsustainable level of debt over time. The threshold at which a nation's debt becomes unsustainable depends on a number of factors, such as the denomination of the debt, political circumstances, and, potentially most importantly, underlying economic conditions. A change in these circumstances may shift a nation's debt to unsustainable without the underlying amount of debt changing at all. To date, it does not appear that the United States has an immediate concern with respect to unsustainability; however, the U.S. debt-to-GDP ratio is projected to continually rise under current policy."], "subsections": []}, {"section_title": "Decreased Business Investment", "paragraphs": ["Persistent fiscal stimulus, and the associated budget deficits, can decrease the size of the economy in the long term as a result of decreased investment in physical capital. As discussed previously, the government's deficit spending can result in higher interest rates, which generally lead to lower levels of business investment. Business investment\u2014spending on physical capital such as factories, computers, software, and machines\u2014is an important determinant of the long-term size of the economy. Physical capital investment allows businesses to produce more goods and services with the same amount of labor and raw materials. As such, government deficits that lead to lower levels of business investment can result in lower quantities of physical capital, and therefore may reduce the productive capacity of the economy in the long term.", "As discussed earlier, some of the increase in interest rates and decline in domestic investment resulting from fiscal stimulus will likely be offset by additional investment in the United States from abroad. The inflow of capital from abroad is beneficial, as it allows for additional investment in the United States economy. However, in exchange for these investment flows, the United States is now sending a portion of its national income to foreigners in the form of interest payments. With a larger portion of investment flows coming from abroad, rather than from within the United States, a larger portion of the U.S. national income will be sent abroad. "], "subsections": []}, {"section_title": "Crowding Out Government Spending", "paragraphs": ["Rising public debt may also be of concern due to its associated interest payments. All else equal, an increase in the level of public debt will result in an increase in interest payments that the government must make each year. Rising interest payments may displace government spending on more worthwhile programs. In 2019, interest payments on the debt are projected to be about 1.8% of GDP, or about $382 billion. By 2029 interest payments on the debt are expected to increase significantly, rising to about 3.0% of GDP or about $921 billion. "], "subsections": []}]}]}, {"section_title": "Withdrawing Fiscal Stimulus", "paragraphs": ["As the economy shifts from a recession and into an expansion, broader economic conditions will generally improve, whereby unemployment falls and wages and private spending increase. With improving economic conditions, policymakers may choose to begin withdrawing fiscal stimulus by decreasing the size of the deficit or potentially by applying contractionary fiscal policy and running a budget surplus. As discussed in the previous section, policymakers may choose to withdraw fiscal stimulus for a number of reasons. First, persistent fiscal stimulus when the economy is near full capacity can exacerbate the negative consequences of fiscal stimulus, such as decreasing investment, rising trade deficits, and accelerating inflation. Second, decreasing the size of the budget deficit slows the accumulation of public debt. ", "The government can withdraw fiscal stimulus by increasing taxes, decreasing spending, or a combination of the two. When the government raises individual income taxes, for example, individuals have less disposable income and decrease their spending on goods and services in response. The decrease in spending reduces aggregate demand for goods and services, slowing economic growth temporarily. Alternatively, when the government reduces spending, it reduces aggregate demand in the economy, which again temporarily slows economic growth. As such, when the government reduces the deficit, regardless of the mix of fiscal policy choices used to do so, aggregate demand is expected to decrease in the near term. However, withdrawing fiscal stimulus is expected to result in lower interest rates and more investment; a depreciation of the U.S. dollar and a shrinking trade deficit; and a slowing inflation rate. These effects tend to spur additional economic activity, partly offsetting the decline resulting from withdrawing fiscal stimulus. Whether the decrease in aggregate demand is problematic for overall economic performance depends on the state of the overall economy at that time."], "subsections": [{"section_title": "Potential Offsetting Effects to Withdrawing Fiscal Stimulus", "paragraphs": [], "subsections": [{"section_title": "Investment and Interest Rates", "paragraphs": ["Withdrawing fiscal stimulus is likely to put downward pressure on domestic interest rates, which encourages additional spending and investment, increasing economic activity. When the government decreases its budget deficit, the demand for loanable funds decreases because the government reduces the amount of those funds it is borrowing. The decrease in demand for loanable funds decreases the price to borrow those funds (i.e., interest rates decline). Declining interest rates encourage increased business investment into new capital projects and consumer spending into durable goods by reducing the cost of borrowing. "], "subsections": []}, {"section_title": "Exchange Rates and the Trade Balance", "paragraphs": ["Withdrawing fiscal stimulus is also expected to result in a depreciation of the U.S. dollar and an improved trade balance with the rest of the world. Assuming the shrinking deficit causes a decline in U.S. interest rates relative to interest rates abroad, individuals in the United States and abroad would rather make investments outside of the United States to benefit from those higher interest rates. Individuals shifting their investments outside the United States must first exchange their U.S. dollars for foreign currency, which decreases the value of the U.S. dollar relative to foreign currencies. As the U.S. dollar depreciates, foreign goods and services become relatively more expensive for U.S. residents and U.S. goods and services become relatively less expensive for foreign individuals. This generally results in an improved trade balance as foreign demand for U.S. goods and services (exports) increases and domestic demand for foreign goods and services (imports) decreases."], "subsections": []}, {"section_title": "Inflation", "paragraphs": ["When fiscal stimulus is withdrawn, aggregate demand for goods and services in the economy also tends to shrink, which is expected to slow inflation. Economists generally view relatively low and stable inflation as beneficial for economic growth, because businesses and consumers are relatively certain about the future price of goods and can make efficient decisions with respect to investment and consumption over time. "], "subsections": []}]}, {"section_title": "Fiscal Contraction Multipliers", "paragraphs": ["The ultimate impact on the economy of withdrawing fiscal stimulus depends on the relative magnitude of its effects on aggregate demand, interest rates and investment, exchange rates and the trade deficit, and inflation. The same fiscal multipliers discussed earlier in the \" Fiscal Expansion Multiplier \" section can be used to estimate the impact of withdrawing fiscal stimulus by simply reversing the sign for each multiplier. As shown in Table 1 , decreasing government spending on consumption by 1% of GDP is expected to reduce real GDP by 1.55% after the first year, compared to no change in fiscal policy. Alternatively, increasing labor income taxes by 1% of GDP is expected to reduce real GDP by 0.23% after the first year. ", "Again, monetary policy can be used alongside fiscal policy to affect the overall impact on the economy. For example, the Federal Reserve could lower interest rates to spur aggregate demand as the federal government withdraws fiscal stimulus in an effort to offset the decline in aggregate demand resulting from the shrinking deficit. This could allow the government to withdraw fiscal stimulus without decreasing aggregate demand or economic activity. "], "subsections": []}]}, {"section_title": "Fiscal Policy Stance", "paragraphs": ["As shown in Figure 1 , the federal government has generally been running a budget deficit for much of the past 30 years\u2014save for two short periods in the 1960s and 1990s. This suggests that the federal government has been applying some level of fiscal stimulus to the economy for much of the past three decades, although the level of stimulus has increased and decreased over time. However, simply examining the overall budget deficit to judge the level of fiscal stimulus can be misleading, as the levels of federal spending and revenue differ over time automatically due to changes in the state of the economy, rather than deliberate choices made each year by Congress. During economic expansions, tax revenue tends to increase and spending tends to decrease automatically, as rising incomes and employment result in higher average incomes and therefore greater individual and corporate income tax revenues. Federal spending on income support programs, such as food stamps and unemployment insurance, tends to fall as fewer people need financial assistance and unemployment claims fall during economic expansions. The combination of rising tax revenue and falling federal spending tends to improve the government's budget deficit. The opposite is true during recessions, when federal spending rises and revenue shrinks. These cyclical fluctuations in revenue and spending are often referred to as automatic stabilizers. Therefore, when examining fiscal policy, it is often beneficial to estimate the budget deficit excluding these automatic stabilizers, referred to as the structural deficit , to get a sense of the affirmative fiscal policy decisions made each year by Congress. ", "As shown in Figure 1 , budget deficits tend to increase during and shortly after recessions (denoted by grey bars) as policymakers attempt to buoy the economy by applying fiscal stimulus. This can be seen explicitly by viewing the structural deficit/surplus, as this only shows affirmative changes in fiscal policy made by Congress. The budget deficit then tends to shrink as the economy enters into recovery and fiscal stimulus is less necessary to support economic growth. However, in recent years, the federal budget has bucked this trend. After the structural deficit peaked in 2009 at roughly 7.5% of GDP, it began to decline through 2014, falling to about 2.0% of GDP. Beginning in 2016, in spite of relatively strong economic conditions, the structural deficit has started to rise again, nearing 4.0% of GDP in 2018. ", "Given that the economy is arguably at or exceeding full employment currently, the increase in fiscal stimulus since 2016 is notable. As discussed earlier, expanding fiscal stimulus when the economy is not depressed can result in rising interest rates, a growing trade deficit, and higher inflation. As of publication of this report, interest rates and inflation do not appear to have been affected by the additional fiscal stimulus; interest rates are at historic lows and inflation shows no signs of acceleration. The trade deficit has been growing in recent years; however, it is not clear that this growth in the trade deficit is a result of increased fiscal stimulus. "], "subsections": []}]}}
{"id": "R44804", "title": "Burma\u2019s Political Prisoners and U.S. Policy", "released_date": "2019-05-17T00:00:00", "summary": ["Despite a campaign pledge that they \"would not arrest anyone as political prisoners,\" Aung San Suu Kyi and the National League for Democracy (NLD) have failed to fulfil this promise since they took control of Burma's Union Parliament and the government's executive branch in April 2016. While presidential pardons have been granted for some political prisoners, people continue to be arrested, detained, tried, and imprisoned for alleged violations of Burmese laws. According to the Assistance Association of Political Prisoners (Burma), or AAPP(B), a Thailand-based, nonprofit human rights organization formed in 2000 by former Burmese political prisoners, there were 331 political prisoners in Burma as of the end of April 2019.", "During its three years in power, the NLD government has provided pardons for Burma's political prisoners on six occasions. Soon after assuming office in April 2016, former President Htin Kyaw and State Counsellor Aung San Suu Kyi took steps to secure the release of nearly 235 political prisoners. On May 23, 2017, former President Htin Kyaw granted pardons to 259 prisoners, including 89 political prisoners. On April 17, 2018, current President Win Myint pardoned 8,541 prisoners, including 36 political prisoners. In April and May 2019, he pardoned more than 23,000 prisoners, of which the AAPP(B) considered 20 as political prisoners.", "Aung San Suu Kyi and her government, as well as the Burmese military, however, also have demonstrated a willingness to use Burma's laws to suppress the opinions of its political opponents and restrict press freedoms. The NLD-led government arrested two Reuters reporters who had reported on alleged murders of Rohingya by Tatmadaw soldiers, Kyaw Soe Oo and Wa Lone, in December 2017 and charged them with violating the Official Secrets Act of 1923. On September 3, 2018, the two reporters were sentenced to seven years in prison. Kyaw Soe Oo and Wa Lone were granted a presidential pardon on May 7, 2019, after serving 511 days in prison. In addition, Aung Ko Htwe was sentenced to two years in prison with hard labor on March 28, 2018, following his August 2017 interview with Radio Free Asia about his allegations that he was forced by the Tatmadaw to become a \"child soldier.\"", "The Union Parliament has repealed or amended a few of the numerous laws that authorities use to arrest and prosecute people for political reasons, and further has passed new laws that some observers see as limiting political expression and protection of human rights. In addition, the Tatmadaw, which directly or indirectly control the nation's security forces (including the Myanmar Police Force), has not demonstrated an interest in ending Burma's history of political imprisonment. Tatmadaw leaders have brought multiple defamation cases against journalists who publish stories critical of Burma's military.", "The Burma Political Prisoners Assistance Act (H.R. 2327) would make it U.S. policy to support the immediate and unconditional release of \"all prisoners of conscience and political prisoners in Burma,\" and require the Secretary of State to \"provide assistance to civil society organizations in Burma that work to secure the release of prisoners of conscience and political prisoners in Burma.\"", "Congress may consider if and how to integrate concerns regarding political imprisonment into overall U.S. policy in Burma. Congress may also choose to assess how other important issues in Burma should influence U.S. policy, including efforts to end the nation's ongoing low-grade civil war, the forced deportation of more than 700,000 Rohingya from Rakhine State, and prospects for constitutional and legal reform designed to establish a democratically elected civilian government that respects the human rights and civil liberties of all Burmese people."], "reports": {"section_title": "", "paragraphs": [], "subsections": [{"section_title": "Overview", "paragraphs": ["The existence and treatment of political prisoners in Burma (Myanmar) has been a central issue in the formulation of U.S. policy toward Burma for more than 25 years. The arrest, detention, prosecution, and imprisonment of Burmese political prisoners\u2014including Aung San Suu Kyi \u2014frequently were cited as reasons for imposing political and economic sanctions on Burma and the leaders of its ruling military junta. The release of political prisoners was often listed as a necessary condition for the repeal of those sanctions. When announcing waivers of existing sanctions, the Obama Administration often cited progress on the release of political prisoners as evidence for why the waiver was warranted. ", "During a discussion of the human rights situation in Burma during the 34 th session of the U.N. Human Rights Council in March 2017, William J. Mozdzierz, Director of the Office of Human Rights and Humanitarian Affairs within the State Department's Bureau of International Organization Affairs, stated that the U.S. government was \"concerned by new political arrests under the current [Burmese] government,\" and urged \"the [Burmese] government to immediately and unconditionally release all political prisoners, and to drop charges against individuals for taking part in protected political activities.\" What actions, if any, the 116 th Congress or the Trump Administration may take with respect to U.S. policy toward Burma may hinge, in part, on the issue of political prisoners in Burma. ", "Eight years have passed since Burma's ruling military junta, the State Peace and Development Council (SPDC), transferred power over to a newly reconstituted Union Parliament and President Thein Sein, a retired general and the SPDC's last Prime Minister. In 2016, Aung San Suu Kyi and the National League for Democracy (NLD) assumed control over the Union Parliament after NLD's landslide victory in the 2015 parliamentary elections. Although both the Thein Sein and NLD-led governments periodically pardoned political prisoners, authorities continue to arrest, detain, prosecute, and imprison people for peacefully expressing their political opinions. ", "One reason that controversy over political imprisonment persists in Burma is the lack of agreement on the definition of \"political prisoner.\" Some in Burma would restrict the definition to \"prisoners of conscience\"; others prefer a broader definition that would include persons who took up arms against the SPDC and the Burmese military. Efforts to forge an official definition for political prisoners during the Thein Sein government were unsuccessful. So far, the NLD-led government has made little progress on the definition issue.", "A second reason the issue of political imprisonment persists in Burma is the existence of many laws\u2014some dating back to the time of British colonial rule\u2014that restrict freedom of speech, freedom of assembly, and freedom of the press. Various human rights organizations have identified Burmese laws that violate international standards on these freedoms. Because these laws remain in force, Burmese security personnel can arrest, detain, and prosecute people for their political views. Burma's courts have also shown a willingness to convict people for their political views. During the Thein Sein government, the Union Parliament made some progress on legal reform, but also passed new laws that some observers maintain restrict political expression. Since the NLD took control of the Union Parliament, little progress has been made on repealing or revising Burma's questionable laws.", "A third reason the issue of political imprisonment persists in Burma has to do with who holds administrative authority over Burma's criminal cases. All security forces in Burma\u2014including the military (or Tatmadaw), the Myanmar Police Force (MPF), the Border Guard Police, and local militias\u2014directly or indirectly report to the Tatmadaw's Commander-in-Chief Senior General Min Aung Hlaing, and not to President Win Myint or the Union Parliament. As a result, people will continue to be arrested for political expression, in accordance with existing Burmese laws, so long as Min Aung Hlaing supports such a policy. President Win Myint does have authority over the prosecution of criminal offenses and the power to grant amnesty to convicted criminals. ", "If addressing political imprisonment remains a priority in U.S. policy toward Burma, then the 116 th Congress and the Administration could consider several options, such as reimposing sanctions and restrictions previously waived, or providing assistance in repealing or revising problematic laws or the provisions in the 2008 constitution. However, it may be useful for such options to be evaluated in the context of and with consideration of the possible impact on other priorities in U.S. relations with Burma, including:", "the creation of a democratically elected civilian government in Burma; the protection of the human rights of the people of Burma; progress toward greater economic prosperity for the people of Burma; and the establishment of direct civilian control over the Tatmadaw and the rest of Burma's security forces."], "subsections": []}, {"section_title": "Current Status of Political Prisoners in Burma", "paragraphs": ["The number of political prisoners in Burma fluctuates over time, depending on the termination of prison sentences, the status of pending trials, and the arrest and detention of new alleged political prisoners by Burma's security forces. The number also varies depending on which definition of \"political prisoner\" is used when categorizing cases. ", "The figures released by the Assistance Association of Political Prisoners (Burma), or AAPP(B), in its monthly report on political prisoners are widely used by the Burmese media, the international press, and the State Department, as a comparatively reliable estimate of the number of political prisoners in Burma. The AAPP(B) is a nonprofit human rights organization formed in 2000 by former Burmese political prisoners. ", "For over a decade, the AAPP(B) has released a monthly report on the number of political prisoners in Burma, based on its definition of political prisoner (see \" Definition of Political Prisoners \" below) and its network of researchers who monitor Burma's security system for information on alleged political prisoner arrests, detentions, trials, and incarceration. The monthly reports include a description of related events of the past month and a detailed list containing the names, alleged violation, prison (where applicable), sentence (where applicable), and political affiliation (if any) of each political prisoner. ", "According to the AAPP(B), there were 331 political prisoners in Burma as of the end of April 2019. Of those, 48 were serving prison sentences, 90 were being held in detention awaiting trial, and 193 were awaiting trial outside of prison (see Figure 1 ). The number of political prisoners in Burma declined sharply after the NLD-led government took power in April 2016, but has been gradually increasing since June 2017, setting aside the anticipated downturn following the Myanmar New Year's presidential pardons. In addition, the number of political prisoners serving sentences or being detained while awaiting trial has slowly risen over the last year. "], "subsections": []}, {"section_title": "Political Prisoners and the NLD-Led Government", "paragraphs": ["The success of Aung San Suu Kyi and the National League for Democracy (NLD) in Burma's 2015 parliamentary elections raised the hopes of many in Burma that the arrest and detention of political prisoners would soon come to an end. During his term in office (2011-2016), former President Thein Sein promised to release all \"prisoners of conscience\" and at one point pledged that there would be no more \"prisoners of conscience\" in Burmese prisons by the end of 2014. According to most observers, he failed to fulfill his pledge. In January 2016, an NLD spokesperson told the press that the new government once in power would adopt an official definition of \"political prisoner\" and \"would not arrest anyone as political prisoners.\" The spokesperson also stated that the NLD-led government \"can control the arresting of political prisoners in accordance with existing laws,\" but did not elaborate on how that would be accomplished."], "subsections": [{"section_title": "Prisoner Releases", "paragraphs": ["Soon after assuming office in April 2016, former President Htin Kyaw and State Counsellor Aung San Suu Kyi took steps to secure the release of nearly 235 political prisoners. On April 7, 2016, the Office of the State Counsellor announced that \"releasing prisoners of conscience who are behind bars for their involvement in peaceful political activities is one of the priorities of the new government.\" The following day, Aung San Suu Kyi ordered that charges be dropped for 114 people facing charges for their participation in a peaceful protest against a proposed National Education Bill. On April 16, 2016\u2014Burma's traditional New Year\u2014President Htin Kyaw issued Order 33/2016 granting amnesty to 83 political prisoners. The amnesty was reportedly granted to \"make people feel happy and peaceful, and (promote) national reconciliation during the New Year.\" According to the Ministry of Home Affairs, between April and mid-August 2016, the NLD-led government released 457 people facing trial for political activity, and 274 political cases were closed.", "On May 23, 2017, President Htin Kyaw granted amnesty to 259 prisoners in recognition of the second 21 st Century Panglong Peace Conference, held on May 24-29, 2017. On April 17, 2018, current President Win Myint pardoned 8,541 prisoners, including 36 political prisoners. In its comments on the April pardons, AAPP(B) stated the following:", "In light of the Presidential pardons, persecuting journalists for seeking the truth and others for speaking leaves a bitter taste in the mouth, particularly considering NLD's broken promise, made in 2016, that it would release all political prisoners when it came to power.", "President Win Myint has issued three separate prisoner pardons in 2019. On April 17, 2019, he granted amnesty to 9,551 prisoners, of which 2 were considered political prisoners according to AAPP(B). On April 26, 2019, 6,948 additional prisoners received a presidential pardon. On May 7, 2019, President Win Myint pardoned 6,520 prisoners, bringing the total for the year to 23,019. ", "According to AAPP(B), the three releases in 2019 included 20 political prisoners. The most prominent among them were the journalists Kyaw Soe Oo and Wa Lone. The released political prisoners also included 6 individuals imprisoned under the Unlawful Associations Act for their alleged association with one of Burma's ethnic armed organizations (EAOs), 5 people sentenced for violations of the Telecommunications Law, and 4 persons convicted of violating Penal Code 505(b). These three laws are among a number of Burmese laws that have been identified as unduly restricting human rights and civil liberties (see \" Problematic Laws \"). ", "According to a spokesperson from the State Counsellor's Office, 27 people with affiliations with three EAOs\u2014the All Burma Students' Democratic Front (ABSDF), the Restoration Council of Shan State (RCSS) and the Shan State Progressive Party (SSPP)\u2014were released as part of peace and national reconciliation efforts. "], "subsections": []}, {"section_title": "Continuing Arrests and Trials of Political Prisoners", "paragraphs": ["In between the episodic presidential pardons, the NLD-led government has continued to arrest, detain, try, and convict individuals for political reasons using various laws, some of which date back to British colonial rule (see \" Problematic Laws \"). According to the AAPP(B), 25 of the 48 political prisoners serving sentences as of the end of April 2019 were convicted under the Unlawful Association Act of 1908 for their alleged association with a prohibited EAO. Another 4 people were imprisoned under Section 505(b) of the Penal Code, which makes it illegal to \"cause fear or alarm to the public.\" In addition, 5 of those in prison were convicted for violating Section 66(d) of the Telecommunications Act of 2013 for allegedly \"using a telecommunication network to extort, threaten, obstruct, defame, disturb, inappropriately influence or intimidate.\" ", "Three cases in particular have garnered strong international responses. The first case involves a former \"child soldier,\" Aung Ko Htwe, who was arrested and convicted in March 2018 for violation of Section 505(b) of the Penal Code. The second concerns the arrest and conviction on September 3, 2018, of two Reuters reporters, Kyaw Soe Oo and Wa Lone, for violating the Official Secrets Act of 1923. Kyaw Soe Oo and Wa Lone were granted presidential pardons on May 7 2019; Aung Ko Ktwe remains in prison. The third case pertains to the December 2, 2018, convictions of Lum Zawng, Nang Pu, and Zau Jet, for their alleged defamation of the Burmese military during peaceful protests in Mytkyina, the capital of Kachin State, in April 2018. "], "subsections": [{"section_title": "The Case of Aung Ko Htwe", "paragraphs": ["Aung Ko Htwe claims he was kidnapped and enlisted in the Burmese Army in 2005 at the age of 10. In 2008, he deserted, but was soon arrested and charged with murder; he was convicted and sentenced to death, but his sentence was commuted to 10 years by Commander-in-Chief Senior General Min Aung Hlaing. Following an August 10, 2017, interview with Radio Free Asia (RFA) in which he recounted his alleged kidnapping and enlistment, he was arrested and charged with violating Section 505(b) of the Penal Code that makes it illegal to \"cause fear or alarm to the public.\" On March 28, 2018, Aung Ko Htwe was convicted and sentenced to two years imprisonment with hard labor. In addition, he was sentenced to six months in prison in February 2018 for criticizing the judge presiding over his trial. On October 30, 2018, he was acquitted of subsequent charges arising from his trial. He remains in prison, serving out the rest of his term. "], "subsections": []}, {"section_title": "The Case of Kyaw Soe Oo and Wa Lone", "paragraphs": ["Kyaw Soe Oo and Wa Lone are reporters for Reuters who broke the story in February 2018 about the murder of 10 Rohingya by Tatmadaw soldiers in Inn Din village during the \"clearance operations\" in Rakhine State (see text box). On December 17, 2017\u2014two months before their story was published\u2014they were arrested for allegedly violating the Official Secrets Act of 1923. The next day, Acting President Myint Swe granted Lieutenant Colonel Yu Naing the authority to press charges under the Official Secrets Act and Burma's Information Ministry announced their arrest and detention for \"possessing important and secret government documents related to Rakhine State and security forces (with the intent) to send them to a foreign news agency.\"", "The trial of Kyaw Soe Oo and Wa Lone lasted over eight months and was full of conflicting and unusual testimony. On February 6, 2018, a police lieutenant informed the court that he burned all his notes pertaining to the case. On April 20, 2018, prosecution witness Captain Moe Yan Naing testified that police Brigadier General Tin Ko Ko ordered him and other police officers to entrap the two reporters by giving them \"secret documents\" as part of a sting operation. After his testimony, Captain Moe Yan Naing was arrested and sentenced to one year in prison for violating the Police Disciplinary Act.", "On September 3, 2018, Kyaw Soe Oo and Wa Lone were convicted of violating the Official Secrets Act and sentenced to seven years in prison. The U.S. Embassy in Burma released the following statement:", "Today's conviction of journalists Wa Lone and Kyaw Soe Oo under the Official Secrets Act is deeply troubling for all who support press freedom and the transition toward democracy in Myanmar. The American people have long stood with the people of Myanmar in support of democracy, and we continue to support civilian rule and those advocating for freedom, reform, and human rights in Myanmar. The clear flaws in this case raise serious concerns about rule of law and judicial independence in Myanmar, and the reporters' conviction is a major setback to the Government of Myanmar's stated goal of expanding democratic freedoms. We urge the Government of Myanmar to release Wa Lone and Kyaw Soe Oo immediately, and to end the arbitrary prosecution of journalists doing their jobs.", "Then-U.S. Ambassador to the United Nations Nikki Haley also released a statement about the convictions, stating the following:", "It is clear to all that the Burmese military has committed vast atrocities. In a free country, it is the duty of a responsible press to keep people informed and hold leaders accountable. The conviction of two journalists for doing their job is another terrible stain on the Burmese government. We will continue to call for their immediate and unconditional release. ", "Other governments, including the European Union and the United Kingdom, as well as many human rights organizations, also issued statements calling for the immediate release of Kyaw Soe Oo and Wa Lone. ", "On April 23, 2019, Burma's Supreme Court upheld the convictions and sentences imposed on Kyaw Soe Oo and Wa Lone. The following day, the State Department issued a press statement, indicating that the Court's decision \"sends a profoundly negative signal about freedom of expression and the protection of journalists in Burma.\" The statement also urged Burma \"to protect hard-earned freedoms, prevent further backsliding on recent democratic gains, and reunite these journalists with their families.\"", "Kyaw Soe Oo and Wa Lone were among the 6,520 prisoners granted a pardon on May 7, 2019. "], "subsections": []}, {"section_title": "The Case of Lum Zawng, Nang Pu, and Zau Jet", "paragraphs": ["On April 30, 2018, peaceful protests were held in Myitkyina, the capital of Kachin State to demand that the Tatmadaw and the NLD-led government take steps to provide assistance to an estimated 2,000 people displaced by fighting between the Tatmadaw and the Kachin Independence Army (KIA). On September 3, 2018, Lum Zawng, Nang Pu, and Zau Jet were arrested for alleged violations of Section 500 of the Penal Code, defamation of the Burmese military. The three activists supposedly made inaccurate and derogatory statements about the Burmese military during the protests in Myitkyina and in a press conference the following day. ", "On December 7, 2018, Lum Zawng, Nang Pu, and Zau Jet were convicted and sentenced to six months in jail. A number of embassies, including the U.S. Embassy in Rangoon, as well as several human rights organizations criticized the convictions and called for the immediate release of the three activists. Nang Pu was released from prison on March 29, 2019, for health reasons. Lum Zawng and Zau Jet were granted pardons on April 26, 2019. "], "subsections": []}]}]}, {"section_title": "Definition of Political Prisoners", "paragraphs": ["One factor complicating the end of political prisoners in Burma is a lack of agreement on the definition of a political prisoner. While the concept of political prisoner has a long history, there is no single international standard for defining political prisoners. Prisoners detained for political reasons are afforded some protection by international agreements, such as the Universal Declaration of Human Rights and the International Covenant on Civil and Political Rights. ", "The State Department's Bureau of Democracy, Human Rights, and Labor considers someone a political prisoner if ", "1. the person is incarcerated in accordance with a law that is, on its face, illegitimate; the law may be illegitimate if the defined offense either impermissibly restricts the exercise of a human right; or is based on race, religion, nationality, political opinion, or membership in a particular group; 2. the person is incarcerated pursuant to a law that is on its face legitimate, where the incarceration is based on false charges where the underlying motivation is based on race, religion, nationality, political opinion, or membership in a particular group; or 3. the person is incarcerated for politically motivated acts, pursuant to a law that is on its face legitimate, but who receives unduly harsh and disproportionate treatment or punishment because of race, religion, nationality, political opinion, or membership in a particular group; this definition generally does not include those who, regardless of their motivation, have gone beyond advocacy and dissent to commit acts of violence.", "In applying this definition, the State Department recognizes that being accused of violent acts and committing violent acts are two different matters, and considers the circumstances pertaining to a particular person when determining whether she or he is to be considered a political prisoner. Following a human rights dialogue with the Thein Sein government in January 2015, the State Department issued a press release that included the statement, \"The United States [government] expressed the need to adopt consensus definitions of 'prisoner of conscience' and 'political prisoner' as a basis to review cases.\"", "In Burma, one of the more critical issues in defining political prisoners is whether or not to include individuals who have been detained for their alleged association with Burma's ethnic-based militias or their associated political parties. Because these militias periodically have been involved in armed conflict with the Burmese military, some analysts exclude detainees allegedly associated with the militias from their estimates of Burma's political prisoners. ", "Ex-President Thein Sein consistently confined his definition to include only \"prisoners of conscience,\" and generally used that phrase when discussing the issue. He repeatedly stated that individuals who have committed criminal acts are not considered \"prisoners of conscience,\" and are expected to serve out their prison sentences. Similarly, Aung San Suu Kyi and Burma's military leaders prefer to restrict the definition of political prisoner to only include \"prisoners of conscience.\" Some international groups, such as Amnesty International (AI), also use a narrower definition that emphasizes so-called \"prisoners of conscience.\" ", "The AAPP(B) and Human Rights Watch (HRW) use a broader definition of political prisoner. The AAPP(B) defines a political prisoner as \"anyone who is arrested because of his or her perceived or real involvement in or supporting role in opposition movements with peaceful or resistance means.\" The AAPP(B) rejects the limitation of political prisoners to \"prisoners of conscience\" for several reasons. First, the AAPP(B) maintains that Burmese security forces frequently detain political dissidents with false allegations that they committed violent or nonpolitical crimes. Restricting the definition to \"prisoners of conscience\" would exclude many political prisoners. Second, the AAPP(B) maintains that the decision to participate in armed resistance against the government in Naypyidaw should be \"viewed with the backdrop of violent crimes committed by the state, particularly against ethnic minorities.\" In short, the AAPP(B) views armed struggle as a reasonable form of political opposition given the severity of the violence perpetrated by the Burmese military and police. ", "The Political Prisoners Review Committee (PPRC, also known as the Political Prisoner Scrutiny Committee), set up by former Burmese President Thein Sein, reportedly attempted to develop a consensus definition of political prisoners. Bo Kyi, the committee's AAPP(B) representative, told the press in May 2013 that the 19 members had agreed to a definition, but that the Thein Sein government did not formally adopt the definition. ", "On August 17 and 18, 2014, AAPP(B) and the FPPS held a workshop in Rangoon to discuss a common definition of political prisoners and to open a discussion with the Thein Sein government and Burma's Union Parliament on the topic. Representatives of various Burmese organizations and political parties, as well as the International Committee of the Red Cross, attended the workshop. The attendees at the conference agreed to the following definition of political prisoner:", "Anyone who is arrested, detained, or imprisoned for political reasons under political charges or wrongfully under criminal and civil charges because of his or her perceived or known active role, perceived or known supporting role, or in association with activities promoting freedom, justice, equality, human rights, and civil and political rights, including ethnic rights, is defined as a political prisoner.", "The adopted statement of the conferees further explained:", "The above definition relates to anyone who is arrested, detained, or imprisoned because of his or her perceived or known active role, perceived or known supporting role, or in association with political activities (including armed resistance but excluding terrorist activities), in forming organizations, both individually and collectively, making public speeches, expressing beliefs, organizing or initiating movements through writing, publishing, or distributing documents, or participating in peaceful demonstrations to express dissent and denunciation against the stature and activities of both the Union and state level executive, legislative, judicial, or other administrative bodies established under the constitution or under any previously existing law.", "Following the workshop, a Member of Parliament from Aung San Suu Kyi's National League for Democracy (NLD) reportedly said that the NLD would submit a proposed definition of political prisoner to the Union Parliament.", "Since the NLD has assumed power, different voices have called for establishing a legal definition of political prisoners. In their May 2016 report cited above, the AAPP(B) and FPPS recommended that the NLD-led government adopt an internationally recognized definition of political prisoners. On June 2, 2016, Pe Than, an Arakan National Party (ANP) member of the Union Parliament's lower house, spoke on the chamber's floor in support of adopting legal definitions of \"political prisoners\" and \"political offenses\" to protect political activists. Deputy Minister of Home Affairs General Aung Soe voiced his ministry's opposition to Pe Than's proposal, stating that providing special treatment to political prisoners would discriminate against other people arrested for alleged violations of the law. ", "In addition, human rights abuses by the government against two segments of Burmese society also have been raised in association with the issue of political prisoners. First, allegations of corruption among local Burmese officials are fairly common, with officials reportedly frequently using their official power to detain people on falsified charges in order to confiscate property (particularly land) or otherwise exact revenge on their opponents. In addition, officials have reportedly used provisions in old and new laws to arrest and detain people protesting alleged violations of their legal rights by those very same officials. These reported abuses of power by officials have been portrayed as creating a special group of \"political prisoners.\" Second, past governments in Burma singled out the Rohingya, a predominately Muslim ethnic minority residing in northern Rakhine State along the border with Bangladesh, and allegedly subjected them to more extensive and invasive political repression, including restrictions on movement, employment, education, and marriage. The NLD-led government has done little to reverse the previous practice of discrimination against the Rohinyga."], "subsections": []}, {"section_title": "Problematic Laws", "paragraphs": ["Burma's 2008 Constitution provides for the continued authority of any laws promulgated prior to the adoption of the Constitution, unless they contravene provisions in the Constitution or are superseded by laws passed by the Union Parliament. As a result, many comparatively repressive laws, including some dating back to British colonial rule, remain in force in Burma. Over the last six years, the Union Parliament has repealed or amended some of the more problematic laws, but has also passed new laws that some observers view as being similarly repressive of human rights. Burma's security forces, and in particular, the Myanmar Police Force, have used these laws to suppress the voices of political opposition in Burma. ", "In its monthly report on political prisoners, the AAPP(B) includes information on which laws were allegedly violated. The following laws are those most frequently cited in the AAPP(B) monthly reports:", "The Unlawful Associations Act of 1908 \u2014Section 17(1) states that association with any organization that the President declares illegal is punishable by two to three years' imprisonment, along with a possible fine. Under Section 17(2), managing an unlawful association or promoting its meetings is subject to three to five years of imprisonment, and a possible fine. This law has been frequently used to declare ethnic armed organizations and their militias \"unlawful associations.\" As of December 2016, at least 72 people were serving sentences for alleged violations of this act. The Telecommunications Law of 2013 \u2014Section 66(d) subjects anyone found \"[e]xtorting, coercing, restraining wrongfully, defaming, disturbing, causing undue influence or threatening to any person by using any Telecommunications Network\" to up to three years in prison and/or a fine. This law is being used to arrest and try political commentators and journalists who criticize government policy, government officials, or the Tatmadaw on social media. The AAPP(B) has compiled a list of 37 Section 66(d) cases since October 2015, including 10 convictions. The Right to Peaceful Assembly and Peaceful Procession Act of 2011 (as amended in 2016) \u2014The law places restrictions on the freedom of assembly and expression inconsistent international human rights laws and standards. Violators of the law are subject to up to two years in prison and/or a fine. This law has reportedly been used to arrest and try people protesting against alleged illegal land confiscations by local officials and the Tatmadaw, as well as individuals rallying in opposition to other actions by the Burmese government and the military. On July 15, 2015, the U.S. Embassy in Rangoon issued a statement indicating, \"The United States is concerned over continued reports or arrests and excessive prison terms handed down to peaceful protesters under Article 18 of the Peace Assembly and Processions Act.\" Section s 505(a) and 505(b) of the Penal Code \u2014These sections make it illegal to publish or circulate statements that either cause or is likely to cause \"any officer, soldier, sailor, or airman, in the Army, Navy or Airforce to mutiny or otherwise disregard or fail in his duty\" [Section 505(a)] or \"fear or alarm to the public or to any section of the public whereby any person may be induced to commit an offence against the State or against the public tranquility\" [Section 505(b)]. This law is frequently used against journalists who publish stories that contradict or question official accounts of events in Burma, particularly those associated with the nation's ongoing low-grade civil war. ", "In April 2016, Burma's Legal Affairs and Special Cases Assessment Commission, a governmental body established by Burma's Union Parliament, recommended that 142 laws be repealed or amended, including some that have been used to suppress political opposition and expression. The commission recommended abolishing the Emergency Provisions Act of 1950 (which made it illegal to engage in activities that hindered the ability of the government or the military to perform their duties) and Section 505(b) of the Penal Code (which makes it illegal to circulate, make, or publish any statement, rumor, or report \"with intent to cause, or which is likely to cause, fear or alarm to the public or to any section of the public whereby any person may be induced to commit an offence against the State or against the public tranquility\"), as well as amend Article 18 of the Peace Assembly and Processions Act. ", "In January 2016, the International Federation for Human Rights (FIDH), a federation of over 180 international human rights organizations, called on the incoming Union Parliament to repeal or amend several laws enacted by the outgoing Union Parliament. The laws identified by FIDH included the Right to Peaceful Assembly and Peaceful Procession Act of 2011; the Telecommunications Act of 2013; the Printing and Publications Act of 2014; the Media Act of 2014; and the four so-called \"Race and Religion Protection Laws\" of 2015 (the Interfaith Marriage Law, the Monogamy Law, the Population Control Law, and the Religious Conversion Law), which are seen as discriminating against Burma's Muslim population. Human Rights Watch issued a report in 2016, entitled \"They Can Arrest You at Any Time: The Criminalization of Peaceful Expression in Burma,\" that also cited these laws as tools of political oppression, as well as several others, including the Electronic Transactions Act of 2004; the Official Secrets Act of 1923; and various sections of the Penal Code (Sections 124A, 130B, 141-147, 153A, 295A, 298, 503, 405, 505(b), 505(c), and 509).", "Since taking office in January 2016, the NLD-led Union Parliament has made some efforts to repeal or amend a few of the problematic laws. In May 2016, the Union Parliament revoked the State Protection Act of 1975, which allowed the government to declare a State of Emergency and to suspend citizens' basic rights. In October 2016, it repealed the Emergency Provisions Act of 1950, which effectively prohibited criticism of the Tatmadaw or the government. In December 2016, proposals were submitted to amend Section 66(d) of the Telecommunications Act of 2013, but they have not been approved. "], "subsections": []}, {"section_title": "Civilian Government Authority over Criminal Cases", "paragraphs": ["Under Burma's 2008 constitution, the President has limited authority over the arrest and detention of people for alleged criminal activity; the Commander-in-Chief of Defence Services controls the security forces that make arrests. In part as a result, people in Burma continue to be arrested and convicted for their political activities. The President, however, can direct that pending cases be dropped, as well as grant pardons and amnesties once people have been convicted.", "Burma's 2008 constitution stipulates \"All the armed forces in the Union shall be under the command of the Defence Services\" (Article 338) and \"The Defence Services shall lead in safeguarding the Union against all internal and external dangers\" (Article 339). The Commander-in-Chief is to be appointed by the President, \"with the proposal and approval of the National Defence and Security Council\" (Article 342). Article 20(c) states, \"The Commander-in-Chief of the Defence Services is the Supreme Commander of all armed forces.\"", "Burma's Defence Services includes the Myanmar Armed Forces (or Tatmadaw), the Border Guard Forces, and the Myanmar Police Force. The Myanmar Armed Forces and the Border Guard Forces are part of the Ministry for Defence; the Myanmar Police Force are part of the Ministry for Home Affairs. Article 232(b)(ii) of the 2008 constitution requires the President \"obtain a list of suitable Defence Services personnel nominated by the Commander-in-Chief of the Defence Services for Ministries of Defence, Home Affairs and Border Affairs,\" thereby requiring that those Ministers be active military personnel and giving the Commander-in-Chief authority over who is selected as Minister of Defence, Home Affairs, and Border Affairs. As a result, the Commander-in-Chief of Defence Services has authority over Burma's security forces and, by extension, over the arrest and detention of persons who allegedly have violated the law. ", "Once arrests have been made, the cases are directed to Burma's attorney general, who is appointed by the president (subject to the approval of the Union Parliament) and reports directly to the president. Public prosecutors, appointed at the local level and under the attorney general's authority, are responsible for prosecuting criminal cases. As such, the president does have the authority to direct the attorney general and the public prosecutors to drop charges considered political in nature. In April 2016, State Counsellor Aung San Suu Kyi exercised such authority to secure the release of over 100 people being detained for participation in peaceful protests. ", "Article 204 of the constitution gives the president the power to grant pardons and amnesties (in accord with the recommendation of the National Defence and Security Council). In addition, Section 401(1) of Burma's Code of Criminal Procedures states the following:", "When any person has been sentenced to punishment for an offence, the President of the Union may at any time, without conditions or upon any conditions which the person sentenced accepts, suspend the execution of his sentence or remit the whole or any part of the punishment to which he has been sentenced.", "The authority to grant pardons and amnesties was used several times by former Presidents Thein Sein and Htin Kyaw, and has been used by current President Win Myint. "], "subsections": []}, {"section_title": "Pending Legislation", "paragraphs": ["The Burma Political Prisoners Assistance Act (BPPAA, H.R. 2327 ) was introduced on April 15, 2019, by Representatives Andy Levin and Ann Wagner. It would call for immediate release of Kyaw Soe Oo, Lum Zawng, Nang Pu,Wa Lone, and Zau Jet (all five have been released or granted pardons since the bill's introduction). The legislation would also state that it is U.S. policy that (1) all prisoners of conscience and political prisoners in Burma be \"unconditionally and immediately released\"; (2) the Administration and the Department of State \"should use all their diplomatic tools\" to ensure such a release occurs; and (3) the NLD-led government should \"repeal or amend all laws that violate the rights to freedom of expression, peaceful assembly, or association.\"", "In addition, the BPPAA would require that the Secretary of State provide assistance to civil society organizations in Burma that \"work to secure the release of prisoners of conscience and political prisoners in Burma,\" as well as assistance to current and former prisoners of conscience and political prisoners in Burma. That assistance shall include:", "Support for documentation of human rights violations with respect to prisoners of conscience and political prisoners; Support for awareness and advocacy in Burma on the issue of political prisoners; Support for efforts to repeal or amend laws that \"are used to imprison individuals as either prisoners of conscience or political prisoners\"; travel costs and legal fees for families of prisoners of conscience or political prisoners; post-incarceration assistance\u2014including mental health and other health care, access to education and employment assistance, and other forms of reparation\u2014for former prisoners of conscience or political prisoners; and the creation of an independent prisoner review mechanism in Burma. ", "The BPPAA would also include definitions for prisoners of conscience and political prisoners. The legislation's definition of prisoners of conscience is similar to that used by Amnesty International. It would define political prisoners as any person:", "who is arrested, detained, or imprisoned for political reasons under political charges or wrongfully under criminal and civil charges because of his or her perceived or known active role in, perceived or known supporting role in, or perceived or known association with activities promoting freedom, justice, equality, human rights, or civil and political rights, including ethnic rights."], "subsections": []}, {"section_title": "Issues for U.S. Policy", "paragraphs": ["Some of the options that Congress may consider to address issues of political imprisonment in Burma include the following:", "Providing technical and other forms of assistance to the Union Parliament and the Ministry of Justice in identifying and revising those laws that have been or could be used to arrest and prosecute people for political reasons; Pressuring the NLD-led government to reevaluate and consider repealing laws or regulations that declare any of the ethnic armed organizations (EAOs) illegal under the Unlawful Associations Act of 1908; Supporting the reestablishment of a Political Prisoners Review Committee or a similar body to identify alleged political prisoners and develop an official definition of political prisoners; Imposing suitable restrictions on relations with Burma until all political prisoners have been unconditionally released; Conditioning the provision of certain types of assistance to the NLD-led government and/or the Tatmadaw contingent on the adoption of an official definition of political prisoner, and on the release of political prisoners; Imposing suitable restrictions on relations with Burma until sufficient reforms of Burma's security forces, including the Myanmar Police Force, have been undertaken to preclude or reduce the likelihood people will be arrested or prosecuted as political prisoners; and Including the absence of political prisoners in Burma as a criteria for determining that a democratic civilian government that respects human rights and civil liberties has been established in Burma, and that certain restrictions on bilateral relations can be removed.", "The presence of political prisoners in Burma is only one of several possible issues that Congress may consider when examining U.S. policy toward Burma. Other key issues may be as follows:", "The Low- G rade Civil War : Burma has endured a low-grade civil war between the Tatmadaw and up to 20 ethnic armed organizations for over 50 years. Aung San Suu Kyi has made the peace process a high priority for the NLD-led government, but the three \"21 st Century Panglong Peace Conferences\" (held on August 31-September 3, 2016, May 24-29, 2017, and July 11-16, 2018, respectively) have made little progress toward ending the long-standing conflict. Tatmadaw Commander-in-Chief Min Aung Hlaing announced a unilateral ceasefire in eastern Burma for the first half of 2019, but periodic fighting between the Tatmadaw and several EAOs continues to be reported. Violence in Rakhine State and the Rohingya Refugee Crisis : On August 25, 2017, the Arakan Rohingya Salvation Army (ARSA) attacked 30 security outposts along Burma's border with Bangladesh. The Tatmadaw responded with a \"clearance operation\" that resulted in the flight of over 700,000 Rohingya into Bangladesh. A United Nations Fact Finding Mission on Myanmar has recommended that the United Nations Security Council refer six Tatmadaw senior officers to the International Criminal Court for investigation and possible prosecution for genocide, crimes against humanity, and war crimes for serious human rights abuses committed during the clearance operations. In December 2018, the Arakan Army began a campaign to establish bases in northern Rakhine State. The Tatmadaw responded by deploying heavily-armed troops into the region. Frequent fighting between the Arakan Army and the Tatmadaw continues to occur, complicating any plans of the safe and voluntary return of the Rohingya. Relations between the two major ethnic minorities residing in Rakhine State\u2014the Rakhine (also known as Arakan) and the Rohingya\u2014have been problematic for decades. In 1982, Burma's military junta stripped the Rohingya of their citizenship, and began portraying the vast majority of them as illegal immigrants from Bangladesh and India. Violent unrest broke out in Rakhine State in 2012, resulting in the deaths of at least 57 Rohingya and 31 Rakhine, and the displacement of an estimated 90,000 people, mostly Rohingya. In October 2016, after a group of assailants attacked three police outposts, the Tatmadaw began a \"clearance operation\" in northern Rakhine State that, according to the U.N. Office of High Commissioner of Human Rights (OHCHR), resulted in the murder, enforced disappearance, torture, rape, arbitrary detention, and forced deportation of hundreds of Rohingya. Constitutional and Legal Reform : During the parliamentary campaign, the NLD stated that it would seek to implement both constitutional and legal reforms aimed at establishing a more democratic government and protecting the human rights of the people of Burma. Some analysts note that, since taking office in April 2016, the NLD has made little progress on either campaign pledge."], "subsections": []}]}}